Crown Zellerbach Corporation: $75,000,000 9 1/4% sinking fund debentures due March 15, 2005

The Crown Zellerbach Corporation was incorporated in Nevada on August 28, 1924, as a holding company under the name Zellerbach Corporation. It was the outgrowth of a business that was founded in about 1870. In 1928 the Zellerbach Corporation and the Crown Willamette Paper Company merged and the company name was changed to the Crown Zellerbach Corporation. The reason given for the merger was that large economies would be achieved by the consolidation of production machinery and the elimination of duplication. The resulting company had assets of nearly $100 million, a manufacturing capacity of 1,450 tons of finished paper daily, timberlands of over 350,000 acres, and paper mills throughout the Pacific Coast. After merging, it became the second largest paper manufacturer in the United States. It produced newsprint, sulphite and kraft wrapping paper, paper bags, and a variety of other paper products. In December 1928 Crown Zellerbach common stock was listed on the New York Stock Exchange. During the 1930s, sales for Crown Zellerbach grew steadily. In 1934 the company earned $1.6 million, rising to $6.2 million in 1938. With the onset of World War II, pulp and paper shipments from Europe were discontinued and demand for North American wood pulp rose along with prices. As a result, Crown Zellerbach prospered as earnings rose to $8.1 million in 1940 and $9.1 million in 1942. The company continued to do well in the postwar period. It entered into new contracts such as producing coated paper for Time and Life magazines in 1947. It also embarked on multi-million dollar expansion and improvement programs for plants, timberlands, and logging facilities to the amount of $23 million in 1948 alone. In 1946 it purchased Northern Pulpwood Ltd. and Badwater Towing Company at a cost of $1.1 million. These improvements were reflected in production figures and in the bottom line. In 1951 Crown Zellerbach produced 902,917 tons of paper and pulp, nearly twice the amount from a decade earlier. Net income also grew to $25.3 million that same year. Crown Zellerbach acquired both Canadian Western Lumber Company and St Helens Pulp & Paper Company through an exchange of common stock in 1953. Canadian Western had large timber holdings on Vancouver Island and St. Helens owned large amounts of second-growth timber as well as a mill for the production of high-class paper products. After these acquisitions, Crown Zellerbach possessed the second-largest timber holdings in the West, next to Weyerhaeuser. Crown Zellerbach purchased Bartram Paper Products and merged with Gaylord Container Corporation, a manufacturer of paper and shipping containers, in 1955. In 1956 the company reported that it had achieved the most successful year in its history. Sales and net earnings were both records at $462 million and $50 million, respectively. Production also rose to a new high of 1,660,100 tons of paper and paperboard. In 1956 Crown Zellerbach acquired Waxide Paper Company, and in 1957 the company formed the St. Francisville Paper Company with Time, Inc., to build and operate a paper mill at St. Francisville, Louisiana. In 1958 the Federal Trade Commission ordered Crown Zellerbach to dissolve the 1953 merger with St. Helens Paper & Pulp, charging the acquisition violated the antitrust laws by giving Crown Zellerbach the power to dominate production and sale of coarse papers in eleven Western states. In the 1960s the company continued to do well despite the fact that the pulp and paper industries had grown intensely competitive. In 1962 it formed Crown Zellerbach AG, Switzerland, and Norsk Pacific Steamship Company in the Bahamas. It also acquired Beaty Laminated Ltd. of Canada. Crown Zellerbach earned $38.8 million in 1962 and $39.3 million the following year. In 1963 demand for paper products was so strong that production was close to two million tons. In 1965 Crown Zellerbach reported record sales and earnings of $709.4 million and $47.4 million, respectively. The company continued to expand and modernize in 1965 by beginning construction of three new mills to expand paper and containerboard capacity by 25 percent and by expanding the number of timberlands owned or controlled by the company to 2.7 million at the end of 1965 from 2 million a year earlier. The company added Redman Manufacturing Company of Kansas City, Missouri, in 1968, and in 1969 it acquired Park Lumber Company, Park Logging Company, and Armstrong Sawmills Ltd. From 1970 to 1975, sales for Crown Zellerbach rose from $955 million to $1.76 billion and earnings nearly doubled, from $68 million in 1970 to $125.8 million in 1975. The company continued to expand through acquisitions. In 1970 it bought Pondosa Pine Lumber Company, Seaforth Plastics Ltd., and Barhil Enterprises. In 1972 it added Gulfport Creosoting and Creosote Oil Corporation, both of Gulfport, Mississippi. It also purchased a 50 percent interest in Van Gelfer Papier of Amsterdam. It added Biles-Coleman Lumber Company in 1973 for approximately 600,000 shares of common stock. That same year, it also added Rainier Manufacturing Company. In November 1973 Crown Zellerbach and Southern Timber Trust made a successful joint bid of $185 million for assets of the Tremont Lumber Company, which included 215,000 acres of Louisiana timberland. The Southern Timber Trust was created by Brookwood Energy and Properties, Inc., a real estate and investment subsidiary of Lehman, in order to acquire the mills and timberlands of Tremont. Crown Zellerbach had grown to become a fully integrated forest products company with significant timber resources by 1975. It was one of the largest paper companies in the world with a broad and diversified product line, including pulp, paper, logs, lumber, plywood, and containers.