1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
(x) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ........... TO ............
COMMISSION FILE NUMBER 1-6780
RAYONIER INC.
Incorporated in the State of North Carolina
I.R.S. Employer Identification Number l3-2607329
l177 Summer Street, Stamford, Connecticut 06905-5529
(Principal Executive Office)
Telephone Number: (203) 348-7000
Indicate by check mark whether the registrant (l) has filed all reports
required to be filed by Section l3 or l5(d) of the Securities Exchange
Act of l934 during the preceding l2 months and (2) has been subject to
such filing requirements for the past 90 days.
YES (X) NO ( )
As of May 5, 1997, there were 28,959,528 Common Shares of the
Registrant outstanding.
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RAYONIER INC.
TABLE OF CONTENTS
PAGE
----
PART I. FINANCIAL INFORMATION
Item l. Financial Statements
Statements of Consolidated Income for the
Three Months Ended March 31, 1997 and 1996 1
Consolidated Balance Sheets as of March 31, 1997
and December 3l, 1996 2
Statements of Consolidated Cash Flows for the
Three Months Ended March 31, 1997 and 1996 3
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations 4-6
Item 3. Selected Operating Data 7
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 8
Signature 8
Exhibit Index 9
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The following unaudited financial statements reflect, in the opinion of Rayonier
Inc. (Rayonier or the Company), all adjustments (which include only normal
recurring adjustments) necessary for a fair presentation of the results of
operations, the financial position and the cash flows for the periods presented.
Certain reclassifications have been made to the prior year's financial
statements to conform to current year presentation. For a full description of
accounting policies, please refer to Notes to Consolidated Financial Statements
in the l996 Annual Report on Form l0-K.
RAYONIER INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED INCOME
(UNAUDITED)
(THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA)
Three Months
Ended March 31,
---------------
1997 1996
------------ ------------
SALES $ 260,138 $ 293,980
------------ ------------
Costs and expenses
Cost of sales 209,781 225,674
Selling and general expenses 10,505 8,843
Other operating income, net (621) (429)
------------ ------------
219,665 234,088
------------ ------------
OPERATING INCOME 40,473 59,892
Interest expense (5,856) (7,146)
Interest and miscellaneous income, net 397 1,488
Minority interest (8,079) (8,988)
------------ ------------
Income before income taxes 26,935 45,246
Provision for income taxes (8,539) (13,769)
------------ ------------
NET INCOME $ 18,396 $ 31,477
============ ============
NET INCOME PER COMMON SHARE $ 0.62 $ 1.05
============ ============
Weighted average Common Shares
outstanding 29,721,186 30,089,060
============ ============
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RAYONIER INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(THOUSANDS OF DOLLARS)
ASSETS
March 31, December 31,
1997 1996
--------- ------------
CURRENT ASSETS
Cash and short-term investments $ 2,878 $ 3,432
Accounts receivable, less allowance for doubtful
accounts of $4,739 and $4,674 112,953 123,435
Inventories
Finished goods 78,450 68,441
Work in process 22,749 20,128
Raw materials 36,495 39,650
Manufacturing and maintenance supplies 25,738 26,695
---------- ----------
Total inventories 163,432 154,914
Timber stumpage purchases 24,212 31,416
Other current assets 18,663 13,223
Deferred income taxes 21,900 23,168
---------- ----------
Total current assets 344,038 349,588
OTHER ASSETS 49,772 50,026
TIMBER STUMPAGE PURCHASES 22,108 23,341
TIMBER, TIMBERLANDS AND LOGGING ROADS,
NET OF DEPLETION AND AMORTIZATION 494,806 490,298
PROPERTY, PLANT AND EQUIPMENT
Land, buildings, machinery and equipment 1,219,239 1,190,786
Less - accumulated depreciation 524,447 506,308
---------- ----------
694,792 684,478
---------- ----------
$1,605,516 $1,597,731
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 68,287 $ 87,609
Bank loans and current maturities 3,128 2,243
Accrued taxes 13,069 11,497
Accrued payroll and benefits 10,327 18,340
Accrued interest 8,110 5,154
Other current liabilities 49,261 55,976
Current reserves for dispositions and discontinued operations 41,120 40,003
---------- ----------
Total current liabilities 193,302 220,822
DEFERRED INCOME TAXES 96,550 89,484
LONG-TERM DEBT 461,367 430,667
NON-CURRENT RESERVES FOR DISPOSITIONS
AND DISCONTINUED OPERATIONS 179,870 183,975
OTHER NON-CURRENT LIABILITIES 30,701 30,529
MINORITY INTEREST 18,341 18,864
SHAREHOLDERS' EQUITY
Common Shares, 60,000,000 shares authorized, 29,128,823
and 29,282,455 shares issued and outstanding 138,048 145,679
Retained earnings 487,337 477,711
---------- ----------
625,385 623,390
---------- ----------
$1,605,516 $1,597,731
========== ==========
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RAYONIER INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
(UNAUDITED)
(THOUSANDS OF DOLLARS)
Three Months
Ended March 31,
---------------
1997 1996
-------- --------
OPERATING ACTIVITIES
Net income $ 18,396 $ 31,477
Non-cash items included in income
Depreciation, depletion and amortization 24,800 24,136
Deferred income taxes 7,239 1,617
Increase in other non-current liabilities 172 1,234
Change in accounts receivable, inventories
and accounts payable (17,358) (26,960)
Decrease in current timber stumpage purchases 7,204 6,744
Increase in other current assets (5,440) (7,191)
(Decrease) increase in accrued liabilities (10,200) 4,485
Reduction in reserves for dispositions -- (1,250)
-------- --------
CASH FROM OPERATING ACTIVITIES 24,813 34,292
======== ========
INVESTING ACTIVITIES
Capital expenditures, net of sales and retirements
of $612 and $543 (39,622) (30,160)
Expenditures for dispositions and discontinued operations,
net of tax benefits of $1,095 and $321 (1,893) (558)
Change in timber stumpage purchases and other assets 1,487 876
-------- --------
CASH USED FOR INVESTING ACTIVITIES (40,028) (29,842)
======== ========
FINANCING ACTIVITIES
Issuance of debt 31,734 700
Repayments of debt (149) (1,348)
Dividends paid (8,770) (8,600)
Repurchase of Common Shares (8,167) (2,678)
Issuance of Common Shares 536 398
(Decrease) increase in minority interest (523) 1,752
-------- --------
CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES 14,661 (9,776)
======== ========
CASH AND SHORT-TERM INVESTMENTS
Decrease in cash and short-term
investments during the period (554) (5,326)
Balance, beginning of period 3,432 10,932
-------- --------
Balance, end of period $ 2,878 $ 5,606
======== ========
Supplemental disclosures of cash flow information
Cash paid (received) during the period for:
Interest $ 4,228 $ 4,830
======== ========
Income taxes, net of refunds $ (52) $ (898)
======== ========
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The sales and operating income of Rayonier's business segments for the three
months ended March 31, 1997 and 1996 were as follows (thousands of dollars):
Three Months
Ended March 31,
---------------
1997 1996
--------- ---------
SALES
TIMBER AND WOOD PRODUCTS
Log trading and merchandising $ 56,737 $ 65,760
Timberlands management and stumpage 49,514 58,124
Wood products 29,663 20,638
Intrasegment eliminations (6,287) (11,472)
--------- ---------
Total Timber and Wood Products 129,627 133,050
--------- ---------
SPECIALTY PULP PRODUCTS
Chemical cellulose 80,216 75,617
Fluff and specialty paper pulps 43,194 56,038
--------- ---------
Total Specialty Pulp Products 123,410 131,655
--------- ---------
Intersegment eliminations (625) (1,596)
--------- ---------
Total before dispositions 252,412 263,109
Dispositions 7,726 30,871
--------- ---------
Total sales $ 260,138 $ 293,980
========= =========
OPERATING INCOME
Timber and Wood Products $ 33,647 $ 37,183
Specialty Pulp Products 12,387 25,566
Corporate and other (4,144) (2,496)
Intersegment eliminations 112 65
--------- ---------
Total before dispositions 42,002 60,318
Dispositions (1,529) (426)
--------- ---------
Total operating income $ 40,473 $ 59,892
========= =========
RESULTS OF OPERATIONS
SALES AND OPERATING INCOME
Sales of $260 million for the first quarter of 1997 were $34 million or 12
percent lower than the first quarter of 1996 due to the closure of the Port
Angeles, WA pulp mill on February 28, 1997 and lower pulp prices. Operating
income of $40 million was $19 million or 32 percent less than last year's first
quarter as a result of the lower pulp pricing and weaker Asian log markets.
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7
Timber and Wood Products
Timber and Wood Products' sales in the first quarter were $130 million compared
to $133 million for the same period of 1996. Operating income for the quarter of
$34 million decreased $4 million from the prior year, reflecting lower stumpage
pricing partially offset by stronger lumber prices and volumes.
Log trading and merchandising sales of $57 million declined $9 million or 14
percent from the 1996 first quarter. The decrease in sales was due to lower New
Zealand export log volumes, resulting from continued weakness in Asian wood
markets. In North America, both selling prices and volume declined from 1996
resulting in reduced margins.
Timberlands management and stumpage sales and operating income were below last
year's first quarter as a result of lower stumpage prices in the U.S. Northwest.
In the U.S. Southeast, weak demand from pulp and paper producers resulted in a
decline in pine pulpwood prices, which was partially offset by increased
harvest activity for chip'n saw and sawlog timber, driven by a strong lumber
market.
Wood products showed continued improvement due to increased capacity and
productivity along with higher lumber prices resulting from a strong housing
market.
Specialty Pulp Products
Sales of Specialty Pulp Products (from the Company's ongoing Jesup and
Fernandina mills) were $123 million for the quarter compared to $132 million for
the prior year's first quarter, and operating income declined $13 million to $12
million. Results were below the prior year when fluff pulp and chemical
cellulose prices were starting to decline from their cyclical peaks. Pulp sales
volumes and product mix strengthened. Production costs continued to improve due
to lower chemical and other costs, declining $25 per ton from first quarter
1996.
Dispositions
Dispositions reflect results of the Company's Port Angeles mill (whose
disposition was announced in October 1996) which were unfavorable to last year's
first quarter due to lower pulp volumes and prices.
OTHER INCOME / EXPENSE
Interest expense was $6 million for the first quarter of 1997, $1 million
favorable to 1996, reflecting lower interest rates and higher capitalized
interest in connection with the Company's New Zealand MDF facility currently
under construction.
Interest and miscellaneous income, net declined $1 million from the prior year
which included mark-to-market gains on forward exchange contracts. The Company
uses these forward contracts to mitigate the impact of New Zealand/U.S dollar
exchange rate fluctuations on New Zealand operating expenses.
Minority interest in the earnings of Rayonier's subsidiary, Rayonier
Timberlands, L.P. (RTLP) was slightly below that of the prior year period,
reflecting lower Northwest U.S. stumpage prices. The minority participation in
the earnings of RTLP will change from approximately 24 percent to approximately
1 percent effective January 1, 2001.
NET INCOME
Net income for the first quarter was $18 million or $0.62 per Common Share,
compared to $31 million or $1.05 per Common Share in 1996.
OTHER ITEMS
In April the Company announced that a strategic assessment of its specialty pulp
business had been completed. The Company indicated that the comprehensive study,
performed with the assistance of a leading consulting firm, confirmed that
existing strategies were sound and that it is taking appropriate steps to
increase the pulp business' contribution to shareholder value. The report also
reaffirmed that the closure of the Port Angeles pulp mill would significantly
strengthen the competitiveness and long-term value of both the Jesup, GA and
Fernandina Beach, FL mills. The Company indicated that actions are already
underway to implement several significant cost-reduction opportunities that were
identified. The study also indicated that Rayonier's excellence in technical
research provides a competitive advantage and it helped clarify the relative
priorities of several product development and quality enhancement programs
designed to further strengthen the Company's market position. In addition, the
study concluded that the balance and
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flexibility of Rayonier's specialty pulp product mix - producing both chemical
cellulose and fluff pulps - provide the greatest opportunity to maximize value.
Statement of Financial Accounting Standards (SFAS) No. 128, Earnings Per Share
(EPS), which establishes standards for computing and presenting EPS, is
effective for both interim and annual periods ending after December 15, 1997.
SFAS No. 128 does not permit early application of its provisions. The statement
replaces the presentation of primary EPS with a presentation of basic EPS, as
defined. The Company's pro forma basic EPS determined in accordance with SFAS
No. 128 was $0.63 and $1.06 for the three months ended March 31, 1997 and 1996,
respectively. Pro forma diluted EPS would be unchanged from the reported income
per Common share.
LIQUIDITY AND CAPITAL RESOURCES
Cash flow from operating activities of $25 million in the first quarter of 1997
decreased $9 million from 1996 as a result of lower earnings and an increase in
working capital. EBITDA (defined as earnings from continuing operations before
significant non-recurring items, provision for dispositions, interest expense,
income taxes and depreciation, depletion and amortization) for the first quarter
of 1997 was $58 million compared to $77 million for the same period of 1996.
Cash from operating activities together with an increase in debt of $32 million
financed capital expenditures of $40 million, dividends of $9 million and the
repurchase of Common Shares of $8 million. In connection with the previously
announced one-year increase in the Company's share repurchase program to $50
million for 1997, the Company repurchased 214,000 shares during the first
quarter at an average cost of $38.16 for $8 million. Over the same period of
1996, the Company purchased 76,100 shares at an average cost of $35.19 per share
for $3 million. First quarter ending debt was $464 million and the
debt-to-capital-ratio was 42.6 percent compared to 41.0 percent at December 31,
1996.
The Company has unsecured credit facilities totaling $300 million, which are
used for direct borrowings and as support for $135 million of outstanding
commercial paper. As of March 31, 1997, the Company had $165 million of
available borrowings under its revolving credit facilities. In addition, through
currently effective shelf registration statements filed with the Securities and
Exchange Commission, the Company may offer up to $141 million of new public debt
securities. The Company believes that internally generated funds combined with
available external financing will enable Rayonier to fund capital expenditures,
share repurchases, working capital and other liquidity needs for the foreseeable
future.
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ITEM 3. SELECTED OPERATING DATA
Three Months
Ended March 31,
---------------
1997 1996
-------- --------
TIMBER AND WOOD PRODUCTS
Log sales
North America - million board feet 45 51
New Zealand - thousand cubic meters 237 370
Other - thousand cubic meters 133 34
Timber sales
Northwest U.S. - million board feet 59 61
Southeast U.S. - thousand short green tons 610 570
New Zealand - thousand cubic meters 211 257
Lumber sold - million board feet 74 61
Intercompany sales
Logs - million board feet 1 2
Northwest U.S. timber stumpage
- million board feet 6 9
Southeast U.S. timber stumpage
- thousand short green tons 25 48
New Zealand, thousand cubic meters 130 198
SPECIALTY PULP PRODUCTS
Pulp sales (a)
Chemical cellulose sales - thousand metric tons 89 79
Fluff and specialty paper pulp sales - thousand
metric tons 81 79
Production as a percent of capacity 97.9% 99.3%
SELECTED SUPPLEMENTAL INFORMATION (thousands of dollars)
New Zealand - Sales $17,151 $25,296
======= =======
New Zealand - Operating Income $ 211 $ 1,420
======= =======
(a) Excludes Port Angeles statistics reflected below:
Chemical cellulose sales - thousand metric tons 9 32
Fluff and specialty paper pulp sales - thousand
metric tons 4 3
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PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) See Exhibit Index.
(b) Rayonier Inc. did not file a report on Form 8-K during the
quarter covered by this report.
SIGNATURE
Pursuant to the requirements of Section 13 of the Securities Exchange
Act of l934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
RAYONIER INC. (Registrant)
---------------------------
BY KENNETH P. JANETTE
------------------
Kenneth P. Janette
Vice President and Corporate
Controller
May 12, 1997 (Chief Accounting Officer)
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EXHIBIT INDEX
-------------
EXHIBIT NO. DESCRIPTION LOCATION
----------- ----------- --------
2 Plan of acquisition, reorganization, None
arrangement, liquidation or succession
3.1 Amended and restated articles of incorporation No amendments
3.2 By-laws No amendments
4.1 Amended and Restated Revolving Credit Agreement Filed herewith
dated as of April 11, 1997, for the $200 million
Revolving Credit Agreement dated as of April 14, 1995
as amended as of June 16, 1995 and as of April 12, 1996
among Rayonier Inc. as Borrower and the banks named
therein as Banks, Citibank, N.A. as Administrative Agent
and Citicorp Securities, Inc. and the Toronto-Dominion
Bank as Arrangers
4.2 Other instruments defining the rights of security holders, Not required to be filed. The
including indentures Registrant hereby agrees to file
with the Commission a copy of
any instrument defining the rights
of holders of the Registrant's
long-term debt upon request of
the Commission.
10 Material contracts None
11 Statement re computation of per share earnings Not required to be filed
12 Statement re computation of ratios Filed herewith
15 Letter re unaudited interim financial information None
18 Letter re change in accounting principles None
19 Report furnished to security holders None
22 Published report regarding matters None
submitted to vote of security holders
23 Consents of experts and counsel None
24 Power of attorney None
27 Financial data schedule Filed herewith
99 Additional exhibits None
9
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EXECUTION COPY
Exhibit 4.1
AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
Dated as of April 11, 1997
Amendment and Restatement among Rayonier Inc., a North Carolina
corporation (the "Borrower"), the banks, financial institutions and other
institutional lenders parties hereto, Citibank, N.A., as administrative agent
(together with any successor thereto appointed pursuant to Article VII of the
Existing Credit Agreement referred to below, the "Administrative Agent") for the
Lenders (as defined in the Existing Credit Agreement referred to below), who
hereby agree as follows:
PRELIMINARY STATEMENTS:
(1) The Borrower is a party to a U.S. $200,000,000 Revolving Credit
Agreement dated as of April 14, 1995, as amended as of June 16, 1995 and as of
April 12, 1996 (the "Existing Credit Agreement") with the banks, financial
institutions and other institutional lenders party thereto and Citibank, N.A.,
as Administrative Agent for the Lenders and such other lenders under the
Existing Credit Agreement. Capitalized terms not otherwise defined in this
Amendment and Restatement have the same meanings as specified in the Existing
Credit Agreement.
(2) The parties to this Amendment and Restatement desire to amend the
Existing Credit Agreement as set forth herein and to restate the Existing Credit
Agreement in its entirety to read as set forth in the Existing Credit Agreement
with the following amendments.
(3) The Borrower has requested that the Lenders agree to extend credit
to it from time to time in an aggregate principal amount of up to $300,000,000
for working capital and other general corporate purposes of the Borrower and its
Subsidiaries not otherwise prohibited under the terms of this Amendment and
Restatement. The Lenders have indicated their willingness to agree to extend
credit to the Borrower from time to time in such amount on the terms and
conditions of this Amendment and Restatement.
242492,6/NYL3
Amendment and Restatement
2
2
SECTION 1. Amendments to the Existing Credit Agreement. The Existing
Credit Agreement is, effective as of the date hereof and subject to the
satisfaction of the conditions precedent set forth in Section 2, hereby amended
as follows:
(a) The definition of "Applicable Margin" in Section 1.01 is amended in
full to read as follows:
"'Applicable Margin' means, as of any date, a percentage per annum
determined by reference to the Public Debt Rating in effect on such
date as set forth below:
Applicable
Margin for
Public Debt Rating Eurodollar Rate
S&P/Moody's Advances
----------- --------
Level 1
-------
A-/A3 or above .1950%
Level 2
-------
BBB+/Baal or above, .2250%
but less than Level 1
Level 3
-------
BBB/Baa2 or above, .2400%
but less than Level 2
Level 4
-------
BBB-/Baa3 or above, .2750%
but less than Level 3
Level 5
-------
Less than Level 4 .4250%"
(b) The definition of "Applicable Percentage" in Section 1.01 is
amended in full to read as follows:
242492,6/NYL3
Amendment and Restatement
3
3
"'Applicable Percentage' means, as of any date, a percentage per
annum determined by reference to the Public Debt Rating in effect on
such date as set forth below:
Public Debt Rating Applicable
S&P/Moody's Percentage
----------- ----------
Level 1
-------
A-/A3 or above .0800%
Level 2
-------
BBB+/Baal or above, .1000%
but less than Level 1
Level 3
-------
BBB/Baa2 or above, .1100%
but less than Level 2
Level 4
-------
BBB-/Baa3 or above, .1250%
but less than Level 3
Level 5
-------
Less than Level 4 .2000%"
(c) Clause (b) of the definition of "Base Rate" is amended by
deleting therein each fraction "1/4" and substituting therefor the
fraction "1/16".
(d) The definition of "Borrower's Form 10-K for 1994" is deleted in
full and the following definition is substituted therefor:
"'Borrower's Form 10-K for 1996' has the meaning specified in
Section 4.01(f)."
(e) The definition of "Commitment" is amended by deleting therein
the word "hereof" and substituting therefor the following:
"of the Amendment and Restatement dated as of April 11, 1997 to
the Credit Agreement dated as of April 14, 1995, as amended, among
the
242492,6/NYL3
Amendment and Restatement
4
4
Borrower, the banks, financial institutions and other institutional
lenders parties thereto and Citibank, as Administrative Agent for
such lenders".
(f) The definition of "Lenders" is amended in full to read as
follows:
"'Lenders' means, collectively, (i) the banks listed on the
signature pages of the Amendment and Restatement dated as of April
11, 1997 to the Credit Agreement dated as of April 14, 1995, as
amended, among the Borrower, the banks, financial institutions and
other institutional lenders parties thereto and Citibank, as
Administrative Agent for such lenders, (ii) each institution that
shall become a party hereto pursuant to Section 8.07(a), (b) and
(c), and (iii) except when used in reference to an A Advance, an A
Borrowing, an A Note, a Commitment, a C Advance, a C Borrowing, a C
Note or a term related to any of the foregoing, each Designated
Bidder."
(g) The definition of "Public Debt Rating" is amended by deleting
in the first line thereof the word "lowest" and substituting therefor
the word "highest".
(h) The definition of "Reference Banks" is amended in full to read
as follows: "'Reference Banks' means Citibank, Toronto-Dominion and The
Chase Manhattan Bank."
(i) The definition of "Termination Date" in Section 1.01 is amended
in full to read as follows:
"'Termination Date' means the earlier of April 30, 2002 and the
date of termination in whole of the Commitments pursuant to Section
2.06 or 6.01."
(j) Section 2.03(a) is amended by deleting therein each figure "30"
and substituting therefor the figure "7".
(k) Section 2.11 is amended by deleting therein the following "upon
at least one Business Day's" and substituting therefor the following:
"upon notice to the Administrative Agent no later than 11:00
A.M. on the proposed date of the prepayment in the case of Base
Rate Advances and on the second Business Day prior to the proposed
date of the prepayment in the case of Eurodollar Rate Advances, in
each case such".
242492,6/NYL3
Amendment and Restatement
5
5
(l) Sections 4.01(e) and 4.01(f) are amended by deleting therein
each of the years "1994" and substituting therefor the year "1996".
(m) Section 4.01(j)(B) is amended by deleting from the first line
thereof the year "1994" and substituting therefor the year "1996".
(n) Section 4.01(q) is amended in full to read as follows:
"(q) Schedule B (Actuarial Information) to the most recent
annual report (Form 5500 Series) for each Plan, copies of which
have been filed with the Internal Revenue Service and, if
requested, furnished to the Administrative Agent pursuant to
Section 5.01(l)(ix) hereof, is complete and accurate in all
material respects and fairly presents the funding status of such
Plan, and since the date of such Schedule B there has been no
material adverse change in such funding status."
(o) Section 5.01(l)(ix) is amended by deleting therein the words
"promptly and in any event within 30 days" and substituting therefor
the following:
"upon the request of the Administrative Agent".
242492,6/NYL3
Amendment and Restatement
6
6
(p) Section 5.02(c) is amended in full to read as follows:
"Sales, Etc. of Assets. Sell, lease, transfer or otherwise
dispose of, or permit any of its Subsidiaries to sell, lease,
transfer or otherwise dispose of, any assets, or grant any option
or other right to purchase, lease or otherwise acquire any assets,
except (i) as permitted by Section 5.02(b), (ii) any such sale,
lease, transfer or disposition that is made in the ordinary course
of its business, (iii) any such sale, lease, transfer or
disposition by a Subsidiary of the Borrower to the Borrower or to
another wholly owned Subsidiary of the Borrower (whether by
dissolution, liquidation or otherwise), (iv) any such sale, lease,
transfer or disposition to the extent the net book value of any
single asset sold, leased, transferred or disposed of from and
after April 11, 1997 pursuant to this clause (iv) is less than
$2,000,000, and the aggregate of all such single assets sold,
leased, transferred or disposed of from and after April 11, 1997,
in any given calendar year pursuant to this clause (iv) is less
than $10,000,000 and (v) any such sale, lease, transfer or
disposition to the extent the net book value of all assets sold,
leased, transferred or disposed of from and after April 11, 1997
pursuant to this clause (v) does not exceed (x) in any calendar
year an amount equal to the greater of an amount equal to 10% of
the Borrower's Consolidated Assets or $160,000,000 or (y) in the
aggregate from and after April 11, 1997 the greater of an amount
equal to 25% of the Borrower's Consolidated Assets or $400,000,000,
in each case measured as of the last day of the most recent Fiscal
Quarter of the Borrower ended on or prior to such date of
determination."
(q) Section 5.02(d)(ii) is amended by inserting immediately after
the term "Schedule 5.02(d)" the following:
"(including as Debt permitted under this subsection any credit
facilities or credit lines of any Subsidiary listed on such Schedule
5.02(d), whether or not such facilities or lines have been drawn upon
by such Subsidiary)".
(r) Section 6.01(d) is amended by deleting therefrom each figure
"$1,000,000" and substituting therefor the figure "$10,000,000".
(s) Schedules 4.01(f), 4.01(p), 5.02(a) and 5.02(d) are deleted in
full and replaced with Schedules 4.01(f), 4.01(p), 5.02(a) and 5.02(d)
attached hereto.
(t) Exhibit A-1 is deleted in full and replaced with Exhibit A-1
attached hereto.
242492,6/NYL3
Amendment and Restatement
7
7
(u) Each reference in Exhibits A-2 and A-3 to the "$200,000,000
Credit Agreement dated as of April 14, 1995" shall be amended to mean a
reference to the Existing Credit Agreement as amended by this Amendment
and Restatement.
(v) The Borrower's Environmental Disclosure Report attached as
Exhibit F to the Existing Credit Agreement is replaced with the
environmental disclosure report delivered pursuant to Section 2(g)
hereof.
SECTION 2. Conditions of Effectiveness. This Amendment and
Restatement shall become effective when, and only when, the Administrative Agent
shall have received counterparts of this Amendment and Restatement duly executed
by the Borrower and the Lenders or, as to any of the Lenders, advice
satisfactory to the Administrative Agent that such Lender has executed this
Amendment and Restatement, and Section 1 hereof shall become effective when, and
only when, the Administrative Agent shall have additionally received all of the
following documents, each such document (unless otherwise specified) dated the
date of receipt thereof by the Administrative Agent (unless otherwise
specified), in form and substance satisfactory to the Administrative Agent
(unless otherwise specified) and in sufficient copies for each Lender (unless
otherwise specified):
(a) The A Notes to the order of the Lenders, respectively.
(b) Certified copies of (x) the resolutions of the Designated
Persons appointed by the Board of Directors of the Borrower approving
this Amendment and Restatement, the Existing Credit Agreement as
amended by this Amendment and Restatement, the Notes and the matters
contemplated hereby and thereby, and (y) the Borrower's charter and
by-laws and all documents evidencing other necessary corporate action
and governmental approvals, if any, with respect to this Amendment and
Restatement, the Existing Credit Agreement as amended by this Amendment
and Restatement and the Notes.
(c) A certificate of the Secretary or Assistant Secretary of the
Borrower certifying the names and true signatures of the officers of
the Borrower authorized to sign this Amendment and Restatement, the
Notes and the other documents to be delivered hereunder.
(d) A favorable opinion of John B. Canning, Corporate Secretary and
Associate General Counsel of the Borrower, that this Amendment and
Restatement, the Existing Credit Agreement as amended by this Amendment
and Restatement and the Notes are the legal, valid and binding
obligations of the Borrower enforceable against the Borrower in
accordance with their terms, in form and substance satisfactory to the
Administrative Agent.
242492,6/NYL3
Amendment and Restatement
8
8
(e) A certificate signed by a duly authorized officer of the
Borrower stating that:
(i) The representations and warranties contained in Section 3
are correct on and as of the date of such certificate as though
made on and as of such date; and
(ii) No event has occurred and is continuing that constitutes a
Default.
(f) Federal Reserve Forms U-1 provided for in Regulation U, the
statements made in which shall be such as to permit the transactions
contemplated hereby and by the Existing Credit Agreement as amended by
this Amendment and Restatement in accordance with Regulation U.
(g) An environmental disclosure report in form and substance
satisfactory to the Administrative Agent.
The effectiveness of this Amendment and Restatement is conditioned
upon the accuracy of the factual matters described herein. This Amendment and
Restatement is subject to the provisions of Section 8.01 of the Existing Credit
Agreement.
SECTION 3. Representations and Warranties of the Borrower. The
Borrower represents and warrants that, in accordance with Section 2, on and as
of the date this Amendment and Restatement becomes effective:
(a) The Borrower is a corporation duly organized, validly existing
and in good standing under the laws of the State of North Carolina.
(b) The execution, delivery and performance by the Borrower of this
Amendment and Restatement and the Notes, and the performance of the
Existing Credit Agreement as amended by this Amendment and Restatement
are within the Borrower's corporate powers, have been duly authorized
by all necessary corporate action, and do not contravene (i) the
Borrower's charter or by-laws or (ii) any law or any contractual
restriction binding on or affecting the Borrower.
(c) No authorization or approval or other action by, and no notice
to or filing with, any governmental authority, regulatory body or any
other third party is required for the due execution, delivery and
performance by the Borrower of this
242492,6/NYL3
Amendment and Restatement
9
Amendment and Restatement, the Existing Credit Agreement as amended by
this Amendment and Restatement and the Notes.
(d) This Amendment and Restatement and the Notes have been duly
executed and delivered by the Borrower and are the legal, valid and
binding obligations of the Borrower enforceable against the Borrower in
accordance with their terms.
(e) No event has occurred and is continuing that constitutes a
Default.
SECTION 4. Reference to and Effect on the Existing Credit Agreement
and the Notes.
(a) On and after the effectiveness of this Amendment and
Restatement, each reference in the Existing Credit Agreement to "this
Agreement", "hereunder", "hereof" or words of like import referring to
the Credit Agreement, and each reference in the Notes to "the Credit
Agreement", "thereunder", "thereof" or words of like import referring
to the Credit Agreement, shall mean and be a reference to the Existing
Credit Agreement, as amended by this Amendment and Restatement.
(b) The Existing Credit Agreement and the Notes, as specifically
amended by this Amendment and Restatement, are and shall continue to be
in full force and effect and are hereby in all respects ratified and
confirmed.
(c) The execution, delivery and effectiveness of this Amendment and
Restatement shall not, except as expressly provided herein, operate as
a waiver of any right, power or remedy of any Lender or the
Administrative Agent under the Existing Credit Agreement, nor
constitute a waiver of any provision of the Existing Credit Agreement.
(d) Without limiting any of the other provisions of the Existing
Credit Agreement as amended by this Amendment and Restatement, any
references in the Existing Credit Agreement to the phrases "on the date
hereof", "on the date of this Agreement" or words of similar import
shall mean and be a reference to the date of this Amendment and
Restatement.
(e) By acceptance of an A Note delivered pursuant to Section 2(a),
each Lender acknowledges and agrees that each A Note delivered under
the Existing Credit Agreement is cancelled as of the date of
effectiveness hereof.
SECTION 5. Costs, Expenses. The Borrower agrees to pay on demand
all costs and expenses of the Administrative Agent in connection with the
preparation, execution,
242492,6/NYL3
Amendment and Restatement
10
10
delivery and administration, modification and amendment of this Amendment and
Restatement and the other instruments and documents to be delivered hereunder
(including, without limitation, the reasonable fees and expenses of counsel for
the Administrative Agent) in accordance with the terms of Section 8.04 of the
Existing Credit Agreement.
SECTION 6. Execution in Counterparts. This Amendment and
Restatement may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute but
one and the same agreement. Delivery of an executed counterpart of a signature
page to this Amendment and Restatement by telecopier shall be effective as
delivery of a manually executed counterpart of this Amendment and Restatement.
242492,6/NYL3
Amendment and Restatement
11
11
SECTION 7. Governing Law. This Amendment and Restatement shall be
governed by, and construed in accordance with, the laws of the State of New
York.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
and Restatement to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
RAYONIER INC.
By __________________________________
Name:
Title:
By __________________________________
Name:
Title:
Commitment
- ----------
$32,500,000 CITIBANK, N.A.
as Administrative Agent and as Lender
By __________________________________
Name:
Title:
$32,500,000 THE TORONTO-DOMINION BANK
By __________________________________
Name:
Title:
242492,6/NYL3
Amendment and Restatement
12
Commitment 12
- ----------
$25,000,000 BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION
By __________________________________
Name:
Title:
$25,000,000 THE BANK OF NEW YORK
By __________________________________
Name:
Title:
$25,000,000 THE CHASE MANHATTAN BANK
By __________________________________
Name:
Title:
$25,000,000 FLEET NATIONAL BANK
By __________________________________
Name:
Title:
$25,000,000 MORGAN GUARANTY TRUST
COMPANY OF NEW YORK
By __________________________________
Name:
Title:
242492,6/NYL3
Amendment and Restatement
13
Commitment 13
- ----------
$25,000,000 NATIONSBANK, N.A.
By __________________________________
Name:
Title:
$25,000,000 SUNTRUST BANK, ATLANTA
By __________________________________
Name:
Title:
$15,000,000 AUSTRALIA AND NEW ZEALAND
BANKING GROUP LIMITED
By __________________________________
Name:
Title:
242492,6/NYL3
Amendment and Restatement
14
Commitment 14
- ----------
$15,000,000 CREDIT SUISSE FIRST BOSTON
By __________________________________
Name:
Title:
$15,000,000 THE SUMITOMO BANK, LIMITED
NEW YORK BRANCH
By __________________________________
Name:
Title:
$15,000,000 UNITED STATES NATIONAL BANK
OF OREGON
By __________________________________
Name:
Title:
$300,000,000 Total of the Commitments
242492,6/NYL3
Amendment and Restatement
15
EXHIBIT A-1
FORM OF A NOTE
U.S.$___________ Dated: ________,________
FOR VALUE RECEIVED, the undersigned, RAYONIER INC., a North
Carolina corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
___________________(the "Lender") for the account of its Applicable Lending
Office on the Termination Date (each as defined in the Credit Agreement referred
to below) the principal sum of U.S.$[amount of the Lender's Commitment in
figures] or, if less, the aggregate principal amount of the A Advances (as
defined below) made by the Lender to the Borrower pursuant to the Credit
Agreement outstanding on the Termination Date.
The Borrower promises to pay interest on the unpaid principal
amount of each A Advance from the date of such A Advance until such principal
amount is paid in full, at such interest rates, and payable at such times, as
are specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the
United States of America to Citibank, N.A., as Administrative Agent, at 399 Park
Avenue, New York, New York 10043, in same day funds. Each A Advance made by the
Lender to the Borrower pursuant to the Credit Agreement, and all payments made
on account of principal thereof, shall be recorded by the Lender and, prior to
any transfer hereof, endorsed on the grid attached hereto or set forth in a
schedule substantially in the form of such grid and attached hereto, either of
which is part of this Promissory Note.
This Promissory Note is one of the A Notes referred to in, and is
entitled to the benefits of, the Amended and Restated Credit Agreement dated as
of April 11, 1997 (the "Credit Agreement") among the Borrower, the Lender and
certain other lenders parties thereto, and Citibank, N.A., as Administrative
Agent for the Lender and such other lenders. The Credit Agreement, among other
things, (i) provides for the making of advances (the "A Advances") by the Lender
to the Borrower from time to time in an aggregate amount not to exceed at any
time outstanding the U.S. dollar amount first above mentioned, the indebtedness
of the Borrower resulting from each such A Advance being evidenced by this
Promissory Note, and (ii) contains provisions for acceleration of the maturity
hereof upon the happening of certain stated events and also for prepayments on
account of principal hereof prior to the maturity hereof upon the terms and
conditions therein specified.
242492,6/NYL3
Amendment and Restatement
16
The Borrower hereby waives presentment, demand, protest and notice
of any kind. No failure to exercise, and no delay in exercising, any rights
hereunder on the part of the holder hereof shall operate as a waiver of such
rights.
This Promissory Note shall be governed by, and construed in
accordance with, the laws of the State of New York, United States.
RAYONIER INC.
By _____________________________________
Title:
By _____________________________________
Title:
242492,6/NYL3
Amendment and Restatement
17
ADVANCES AND PAYMENTS OF PRINCIPAL
- ------------------- ----------------------- ---------------------------- ------------------------- -----------------
Date Amount of Amount of
A Advance Principal Paid Unpaid Principal Notation
or Prepaid Balance Made By
- ------------------- ----------------------- ---------------------------- ------------------------- -----------------
- ------------------- ----------------------- ---------------------------- ------------------------- -----------------
- ------------------- ----------------------- ---------------------------- ------------------------- -----------------
- ------------------- ----------------------- ---------------------------- ------------------------- -----------------
- ------------------- ----------------------- ---------------------------- ------------------------- -----------------
- ------------------- ----------------------- ---------------------------- ------------------------- -----------------
- ------------------- ----------------------- ---------------------------- ------------------------- -----------------
- ------------------- ----------------------- ---------------------------- ------------------------- -----------------
- ------------------- ----------------------- ---------------------------- ------------------------- -----------------
- ------------------- ----------------------- ---------------------------- ------------------------- -----------------
- ------------------- ----------------------- ---------------------------- ------------------------- -----------------
- ------------------- ----------------------- ---------------------------- ------------------------- -----------------
- ------------------- ----------------------- ---------------------------- ------------------------- -----------------
- ------------------- ----------------------- ---------------------------- ------------------------- -----------------
- ------------------- ----------------------- ---------------------------- ------------------------- -----------------
- ------------------- ----------------------- ---------------------------- ------------------------- -----------------
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- ------------------- ----------------------- ---------------------------- ------------------------- -----------------
242492,6/NYL3
Amendment and Restatement
1
EXHIBIT 12
RAYONIER INC. AND SUBSIDIARIES
RATIO OF EARNINGS TO FIXED CHARGES
(UNAUDITED)
(THOUSANDS OF DOLLARS)
Three Months
Ended March 31,
---------------
1997 1996
------- -------
Earnings:
Net Income $18,396 $31,477
Add:
Income Taxes 8,539 13,769
Minority Interest 8,079 8,988
Amortization of Capitalized Interest 268 491
------- -------
35,282 54,725
Adjustments to Earnings for Fixed Charges:
Interest and Other Financial Charges 5,856 7,146
Interest Factor Attributable to Rentals 547 361
------- -------
6,403 7,507
------- -------
EARNINGS AS ADJUSTED $41,685 $62,232
======= =======
Fixed Charges:
Fixed Charges above $ 6,403 $ 7,507
Capitalized Interest 1,328 433
------- -------
TOTAL FIXED CHARGES $ 7,731 $ 7,940
======= =======
RATIO OF EARNINGS AS ADJUSTED TO
TOTAL FIXED CHARGES 5.39 7.84
======= =======
5
1,000
3-MOS
DEC-31-1997
JAN-01-1997
MAR-31-1997
2,878
0
117,692
4,739
163,432
344,038
1,219,239
524,447
1,605,516
193,302
461,367
0
0
138,048
487,337
1,605,516
260,138
260,138
209,781
209,781
17,566
0
5,856
26,935
8,539
18,396
0
0
0
18,396
0.62
0.62
