<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
---------------------------------------
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 1-3053
--------------------------------------
Champion International Corporation
------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
New York 13-1427390
-------------------------------------- -----------------------------------
State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization
One Champion Plaza, Stamford, Connecticut 06921
-----------------------------------------------
(Address of principal executive offices)
(Zip Code)
203-358-7000
-----------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports, and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at July 31, 1995
-------------------------------------- ---------------------------------------
Common stock, $.50 par value 95,227,254
<PAGE>
PART I. FINANCIAL INFORMATION
------------------------------
Item 1. Financial Statements.
------------------------------
CHAMPION INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME (unaudited)
(in thousands, except per share)
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
------------------------- -------------------------
June 30, June 30,
------------------------- -------------------------
1995 1994 1995 1994
------------ ----------- ------------ -----------
<S> <C> <C> <C> <C>
Net Sales $ 3,390,456 $ 2,468,078 $ 1,756,432 $ 1,241,958
Cost of products sold 2,587,970 2,304,184 1,311,009 1,161,508
Selling, general and administrative expenses 194,832 142,913 98,173 76,278
------------ ----------- ------------ -----------
Income From Operations (Note 2) 607,654 20,981 347,250 4,172
Interest and debt expense 114,528 115,427 54,811 58,890
Other (income) expense - net (Note 3) (31,253) (8,387) (11,477) (8,627)
------------ ---------- ------------ -----------
Income (Loss) Before Income Taxes 524,379 (86,059) 303,916 (46,091)
Income Taxes (Benefit) 205,621 (23,975) 116,383 (14,993)
------------ ---------- ------------ -----------
Net Income (Loss) $ 318,758 $ (62,084) $ 187,533 $ (31,098)
============ =========== ============ ===========
Dividends on Preference Stock 13,258 13,875 6,321 6,938
============ =========== ============ ===========
Net Income (Loss) Applicable to Common Stock $ 305,500 $ (75,959) $ 181,212 $ (38,036)
============ =========== ============ ===========
Average Number of Common Shares Outstanding 93,536 92,962 93,686 92,977
============ ========== ============ ===========
Earnings (Loss) Per Common Share (Exhibit 11):
Primary $ 3.27 $ (0.82) $ 1.93 $ (0.41)
============ =========== ============ ===========
Fully Diluted $ 3.04 $ (0.82) $ 1.79 $ (0.41)
============ =========== ============ ===========
Cash dividends declared $ .10 $ .10 $ .05 $ .05
============ =========== ============ ===========
</TABLE>
The accompanying Notes to Consolidated Financial
Statements are an integral part of this statement.
-2-
<PAGE>
CHAMPION INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(in thousands of dollars)
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
ASSETS: (unaudited)
------------- --------------
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 255,608 $ 90,948
Receivables - net 673,511 562,085
Inventories 398,804 441,430
Prepaid expenses 35,268 23,286
Deferred income taxes 61,753 61,032
------------ ------------
Total Current Assets 1,424,944 1,178,781
------------ ------------
Timber and timberlands, at cost
- less cost of timber harvested 1,914,978 1,846,823
------------ ------------
Property, plant and equipment, at cost 8,675,882 8,579,254
Less - Accumulated Depreciation (3,177,239) (2,976,640)
------------ ------------
5,498,643 5,602,614
------------ ------------
Other assets and deferred charges 315,497 335,410
------------ ------------
Total Assets $ 9,154,062 $ 8,963,628
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current Liabilities:
Current installments of long-term debt $ 275,613 $ 308,922
Short-term bank borrowings 211,903 90,184
Accounts payable and accrued liabilities 596,247 592,033
Income taxes 89,936 43,273
------------ ------------
Total Current Liabilities 1,173,699 1,034,412
------------ ------------
Long-term debt 2,994,790 2,889,252
------------ ------------
Other liabilities 690,022 670,761
------------ ------------
Deferred income taxes 1,108,457 1,039,927
------------ ------------
Minority interest in subsidiaries 91,459 68,531
------------ ------------
Preference stock, $1.00 par value, $92.50 cumulative
convertible series; 300,000 shares issued and
outstanding at December 31, 1994 (redeemable
at maturity for $300,000) (Note 4) --- 300,000
------------ ------------
Shareholders' Equity:
Capital Shares: (Note 4)
Preference stock, no series designated, 8,231,431
shares authorized but unissued --- ---
Common (105,442,039 and 96,786,039
shares issued at June 30, 1995 and
December 31, 1994, respectively) 52,721 48,393
Capital Surplus 1,493,516 1,175,008
Retained Earnings 2,174,607 1,878,476
------------ ------------
3,720,844 3,101,877
------------ ------------
Treasury shares, at cost (Note 4) (593,037) (100,308)
Cumulative translation adjustment (32,172) (40,824)
------------ ------------
Total Shareholders' Equity 3,095,635 2,960,745
------------ ------------
Total Liabilities and
Shareholder's Equity $ 9,154,062 $ 8,963,628
============ ============
</TABLE>
The accompanying Notes to Consolidated Financial
Statements are an integral part of this statement.
-3-
<PAGE>
CHAMPION INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED CASH FLOWS (unaudited)
(in thousands of dollars)
<TABLE>
<CAPTION>
Six Months Ended
---------------------
June 30,
---------------------
1995 1994
--------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 318,758 $(62,084)
Adjustments to reconcile net income
(loss) to net cash provided by operations:
Depreciation expense 193,926 182,747
Cost of timber harvested 37,798 36,395
Net gain on sale of assets (36,167) (85)
(Increase) decrease in receivables (110,429) (22,803)
(Increase) decrease in inventories 11,872 17,727
(Increase) decrease in prepaid expenses (16,903) (8,119)
Increase (decrease) in accounts payable and
accrued liabilities (7,905) (43,401)
Increase (decrease) in income taxes 45,765 7,594
Increase (decrease) in other liabilities 7,684 (2,894)
Increase (decrease) in deferred income taxes 64,136 (40,974)
All other - net 53,445 32,133
----------- -------
Net cash provided by operating activities 561,980 96,236
----------- -------
Cash flows from investing activities:
Expenditures for property, plant and
equipment (154,089) (90,534)
Timber and timberlands expenditures (119,970) (36,382)
Purchase of investments --- (28,859)
Proceeds from redemption of investments --- 25,389
Proceeds from sales of property, plant and
equipment and timber and timberlands 182,886 14,450
All other - net (11,489) (7,541)
----------- -------
Net cash used in investing activities (102,662) (123,477)
----------- -------
Cash flows from financing activities:
Proceeds from issuance of long-term debt 276,851 465,906
Payments of current installments of long-
term debt and long-term debt (80,095) (389,273)
Cash dividends paid (22,596) (23,177)
Payments to acquire treasury stock (492,729) (75)
All other - net 23,911 2,497
----------- -------
Net cash provided by (used in) financing
activities (294,658) 55,878
----------- -------
Increase in cash and cash equivalents 164,660 28,637
Cash and Cash Equivalents:
Beginning of period 90,948 55,653
----------- --------
End of period $ 255,608 $ 84,290
=========== ========
Supplemental cash flow disclosures:
Cash paid during the period for:
Interest (net of capitalized amounts) $ 120,043 118,897
Income taxes (net of refunds) 91,168 7,823
</TABLE>
The accompanying Notes to Consolidated Financial
Statements are an integral part of this statement.
-4-
<PAGE>
CHAMPION INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
June 30, 1995
Note 1.
The unaudited information furnished in this report reflects all adjustments
which are, in the opinion of management, necessary to present fairly a statement
of the results for the interim periods reported. All such adjustments made were
of a normal recurring nature.
Note 2.
Income from operations for the six months ended June 30, 1995 includes $13
million of non-recurring expenses primarily for the writedown of certain
receivables from customers in Mexico and for certain legal contingencies.
Note 3.
Other (income) expense - net for the three months and six months ended June 30,
1995 includes non-recurring gains of $39 million and $89 million, respectively,
from the sales of certain operations in Canada and non-recurring charges of $32
million and $68 million, respectively, primarily for the writedown of certain
U.S. paper and wood products assets.
Note 4.
On June 22, 1995, the company purchased all 7,894,737 shares of Common Stock
that were issued on that date upon conversion of the $92.50 Cumulative
Convertible Preference Stock, and on June 30, 1995, the company purchased an
additional 2,000,000 shares of Common Stock.
-5-
<PAGE>
CHAMPION INTERNATIONAL CORPORATION AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial Condition and
------------------------------------------------------------------------
Results of Operations.
---------------------
Results of Operations
---------------------
Overall Quarterly Results
The company reported net income in the second quarter of 1995 of $188 million or
$1.79 per share, compared to last year's second quarter loss of $31 million or
41 cents per share and last quarter's net income of $131 million or $1.26 per
share. Results for the second quarter of 1995 reflected several non-recurring
income and expense items, as discussed below, the net effect of which was to add
approximately $5 million to net income or 4 cents per share to earnings.
Significant Line Item Changes
Net sales of $1.76 billion improved from $1.24 billion a year ago and $1.63
billion last quarter. Operating income of $347 million increased from $4 million
a year ago and $260 million last quarter. These improvements were due
principally to higher prices for all of the company's major pulp and paper
grades, which reflected strong demand attributable to favorable economic
conditions in the United States and Europe and, on the supply side, few capacity
increases in the industry. The increase in paper segment operating income more
than offset the decline in operating income in the wood products segment.
General corporate expense was up from last year and last quarter primarily as
the result of the impact of a higher stock price on the value of stock
appreciation rights.
Long-term debt, including current installments, declined from last year but
increased from the first quarter due to borrowings incurred late in the second
quarter to partially finance the purchase for $493 million of 9,894,737 shares
of the company's common stock. Interest and debt expense decreased from a year
ago and last quarter, reflecting lower average outstanding debt and higher
capitalization of interest related to capital projects.
Other (income) expense - net improved from a year ago principally due to a $39
million non-recurring gain from the sale by the company's Canadian subsidiary,
Weldwood of Canada Limited, of its coastal British Columbia fee-owned
timberlands. This gain was partially offset by a non-recurring charge of $32
million primarily for the writedown of certain U.S. paper and wood products
assets. However, other (income) expense - net declined from last quarter, which
included net non-recurring income of $14 million.
The income tax provision for the second quarter of 1995 reflected a
significantly higher effective tax rate than last year as the result of an
increase in the proportion of income derived from North American operations and
a corresponding decrease from Brazilian operations. The effective tax rate
declined from last quarter primarily due to changes in estimated carryforwards
for 1995.
Year-To-Date Results
For the first six months, the company reported net income of $319 million or
$3.04 per share, compared to a year-ago loss of $62 million or 82 cents per
share.
Paper Segment
For the company's paper segment, second quarter operating income was $344
million. This compared to a loss of $38 million a year ago and income, excluding
non-recurring expenses, of $243 million last quarter.
-6-
<PAGE>
Operating income for the domestic printing and writing papers business improved
considerably from the loss a year ago and from last quarter's earnings
principally due to higher prices for most coated and uncoated free sheet grades.
Also, shipments increased compared to a year ago and last quarter. Additional
price increases for most coated grades and certain uncoated grades were
effective July 1. A further price increase for certain uncoated paper grades has
been announced for September 1. Maintenance outages have been scheduled at three
of the four domestic printing and writing papers mills in the third quarter.
Operating income at the Brazilian subsidiary, Champion Papel e Celulose Ltda.,
improved from the year-ago and prior quarters, primarily due to higher domestic
and export prices. Export prices continued to strengthen early in the third
quarter, while domestic prices remained unchanged.
Earnings for the publication papers business improved significantly from the
small loss a year ago and from last quarter's operating income. Prices for all
publication grades were higher than last year and last quarter, more than
offsetting increased purchased pulp and wood costs. Also, shipments were higher
than a year ago and last quarter. Additional price increases for most grades
were effective July 1. Maintenance outages have been scheduled at two of the
four publication papers mills in the third quarter.
Operating income for the company's U.S. and Canadian market pulp operations
represented a considerable improvement from the year-ago and prior quarters.
Prices for all pulp grades were significantly higher than last year and last
quarter. Shipments were down from a year ago, principally due to more downtime
for scheduled maintenance outages, but were higher than last quarter. A price
increase for all grades has been announced for October 1.
Earnings for the newsprint business represented a substantial improvement from
the loss of a year ago and last quarter's operating income principally due to
higher prices. Shipments were significantly higher than last year, due to
improved productivity, and approximately even with last quarter. A price
increase for certain grades has been announced for September 1.
Earnings for the packaging business exceeded those of a year ago and last
quarter primarily due to higher prices for kraft paper and linerboard. Shipments
were approximately even with last year and last quarter. Prices for kraft paper
and linerboard weakened somewhat early in the third quarter.
Wood Products Segment
The company's wood products segment, which includes the wood-related operations
of Weldwood, reported second quarter income from operations of $28 million, down
from $56 million a year ago and $49 million last quarter. Lower prices for
lumber and higher purchased wood costs principally were responsible for the
decline. Shipments of lumber and plywood increased from a year ago and last
quarter. Lumber and plywood prices improved slightly early in the third quarter.
The lumber mill at Abbeville, Alabama was closed for an indefinite period
effective June 9. The annual capacity of that facility is 79 million board feet.
Labor Contracts
A new three year labor contract is in effect at Weldwood's Hinton, Alberta
timberlands operation. Efforts to reach a new labor agreement continue at the
Hinton pulp mill, which is presently operating under the terms of its expired
contract.
-7-
<PAGE>
Financial Condition
-------------------
General
The company's current ratio was 1.2 to 1 at June 30, 1995 as compared to 1.4 to
1 at March 31, 1995 and 1.1 to 1 at year-end 1994. Total debt to total
capitalization was 45% at June 30, 1995, as compared to 41% at March 31, 1995
and 43% at year-end 1994.
Reflecting strong earnings and the sale of certain assets, in the first six
months of 1995 the company's net cash provided by operating activities and asset
sales exceeded the requirements of its investing activities (principally capital
expenditures). The approximate excess, together with net borrowings, was used to
pay dividends, purchase shares of the company's common stock and increase cash
and cash equivalents. Net borrowings generated cash proceeds of $197 million,
while cash and cash equivalents increased by $165 million, in the first six
months of 1995.
In the first six months of 1994, the company's net cash provided by operating
activities was not sufficient to meet the requirements of its investing
activities (principally capital expenditures) and its financing activities
(principally debt payments and cash dividends). Borrowings by the company
financed the difference and also resulted in an increase in cash and cash
equivalents. Net borrowings generated cash proceeds of $77 million, while cash
and cash equivalents increased by $29 million, in the first six months of 1994.
Operating Activities
For the first six months, net cash provided by operating activities of $562
million increased from $96 million a year ago. The increase was due primarily to
significantly higher earnings and higher deferred income taxes, which more than
offset an increase in receivables.
Investing Activities
For the first six months, net cash used in investing activities of $103 million
compared with net cash used in investing activities of $123 million a year ago.
The improvement was due to higher net proceeds from asset sales, principally the
sale of Weldwood's coastal British Columbia fee-owned timberlands and solid wood
operations, which more than offset an increase in capital expenditures.
Financing Activities
Net cash used in financing activities of $295 million compared with net cash
provided by financing activities of $56 million a year ago. The change from last
year was due primarily to the purchase of shares of common stock by the company
this year. On June 22, 1995, the company purchased 7,894,737 shares of common
stock that were issued on that date upon conversion of the $92.50 Cumulative
Convertible Preference Stock, and on June 30, 1995, the company purchased an
additional 2,000,000 shares of common stock.
At June 30, 1995, the company had $454 million of U.S. commercial paper and
other short-term obligations outstanding, all of which are classified as long-
term debt, up from $335 million at March 31, 1995 and $382 million at year-end
1994. In addition, at June 30, 1995, the company had $237 million of notes
outstanding under its U.S. bank lines of credit, up from $130 million at March
31, 1995 and $65 million at year-end 1994. Domestically, at June 30, 1995, $454
million of the company's unused bank lines of credit of $963 million supported
the classification of commercial paper and other short-term obligations as long-
term debt.
On April 12, 1995, the company borrowed $6,750,000 through the issuance of long-
term tax-exempt bonds. The net proceeds are being applied to the payment of a
portion of the costs of construction of pollution control and solid waste
disposal facilities at the company's Lufkin, Texas mill.
-8-
<PAGE>
The annual principal payment requirements under the terms of all long-term
agreements for the period from July 1 through December 31, 1995 are $201 million
and for the years 1996 through 1999 are $78 million, $194 million, $385 million
and $981 million, respectively.
On June 27, 1995, the company called all $149,893,000 of its 6 1/2% Convertible
Subordinated Debentures due April 15, 2011 for redemption on August 8, 1995.
Virtually all of the Debentures were converted into an aggregate of 4,309,070
shares of common stock during the third quarter.
-9-
<PAGE>
PART II. OTHER INFORMATION
CHAMPION INTERNATIONAL CORPORATION AND SUBSIDIARIES
Item 4. Submission of Matters to a Vote of Security Holders.
-------------------------------------------------------------
(a) The Annual Meeting of Shareholders of the company was held on
May 18, 1995.
(b) N/A
(c) (i) Four nominees were elected to the Board of Directors at the 1995
Annual Meeting.
Sybil C. Mobley - 86,114,181 votes were cast in favor of her
election and 1,195,057 votes were withheld.
Lawrence G. Rawl - 86,188,817 votes were cast in favor of his
election and 1,120,421 votes were withheld.
Andrew C. Sigler - 86,123,681 votes were cast in favor of his
election and 1,185,557 votes were withheld.
John L. Weinberg - 86,170,492 votes were cast in favor of his
election and 1,138,746 votes were withheld.
(ii) The shareholders approved the appointment of Arthur Andersen LLP
as the company's auditors for 1995. There were 87,003,374 votes
cast in favor of the proposal, 134,942 votes cast against the
proposal and 170,932 abstentions.
(iii) The shareholders rejected a shareholder proposal concerning a
classified board of directors. There were 33,260,939 votes cast
in favor of the proposal, 49,118,298 votes cast against the
proposal, 942,524 abstentions and 3,987,477 broker non-votes.
(iv) The shareholders rejected a shareholder proposal concerning
directors' retirement benefits. There were 15,686,119 votes cast
in favor of the proposal, 66,066,784 votes cast against the
proposal, 1,568,848 abstentions and 3,987,487 broker non-votes.
(d) N/A
Item 6. Exhibits and Reports on Form 8-K.
------------------------------------------
(a) See exhibit index following the signature page.
(b) The company filed a Current Report on Form 8-K dated April 10,
1995 reporting the issuance of a press release announcing
certain unaudited consolidated financial results of the company
for the three months ended March 31, 1995, with the consolidated
statement of income for the three months ended March 31, 1995
and March 31, 1994 and consolidated balance sheet as of March
31, 1995 and December 31, 1994 as exhibits thereto.
-10-
<PAGE>
The company filed a Current Report on Form 8-K dated June 29, 1995
reporting: (i) the issuance of a press release announcing the conversion
of the company's $92.50 Cumulative Convertible Preference Stock into
shares of the company's Common Stock, and the purchase of such Common
Stock by the company from subsidiaries of Berkshire Hathaway Inc.; (ii)
the issuance of a press release announcing that Loews Corporation agreed
to sell up to 5,500,000 shares of the company's Common Stock to Goldman,
Sachs & Co. and that the company agreed to purchase 2,000,000 of such
shares; and (iii) the issuance of a press release announcing that the
company called for redemption all of its 6 1/2% Convertible Subordinated
Debentures.
-11-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the undersigned on behalf of the registrant as duly
authorized officers thereof and in their capacities as the chief accounting
officers of the registrant.
Champion International Corporation
----------------------------------------
(Registrant)
Date: August 11, 1995 John M. Nimons
-------------------------------- ----------------------------------------
(Signature)
John M. Nimons
Vice President and Controller
Date: August 11, 1995 Kenwood C. Nichols
-------------------------------- ----------------------------------------
(Signature)
Kenwood C. Nichols
Vice Chairman
-12-
<PAGE>
EXHIBIT INDEX
Each exhibit is listed according to the number assigned to it in the Exhibit
Table of Item 601 of Regulation S-K.
11 - Calculation of Primary Earnings Per Common Share and Fully Diluted
Earnings per Common Share (unaudited).
27 - Financial Data Schedule (unaudited).
-13-
<PAGE>
EXHIBIT 11
CHAMPION INTERNATIONAL CORPORATION AND SUBSIDIARIES
Calculation of Primary Earnings (Loss) Per Common Share and
Fully Diluted Earnings (Loss) Per Common Share (unaudited)
(in thousands, except per share)
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
------------------------- -----------------------
June 30, June 30,
------------------------- -----------------------
1995 1994 1995 1994
--------- ----------- -------- ----------
<S> <C> <C> <C> <C>
Primary earnings (loss) per common share:
Net Income (Loss) $ 318,758 $ (62,084) $187,533 $ (31,098)
Dividends on Preference Shares 13,258 13,875 6,321 6,938
---------- ----------- --------- ----------
Net Income (Loss) Applicable to Common Stock $ 305,500 $ (75,959) $ 181,212 $ (38,036)
========== =========== ========= ==========
Average number of common shares outstanding 93,536 92,962 93,686 92,977
========== =========== ========= ==========
Per share $ 3.27 $ (.82) $ 1.93 $ (.41)
========== =========== ========= ==========
Fully diluted earnings (loss) per common share:
Net Income (Loss) Applicable to Common Stock $ 305,500 $ (75,959) $ 181,212 $ (38,036)
Add income effect, assuming conversion of
dilutive convertible securities 15,106 --- 6,585 ---
---------- ----------- --------- ----------
Net income (loss) on a fully diluted basis $ 320,606 $ (75,959) $ 187,797 $ (38,036)
========== =========== ========= ==========
Average number of common shares outstanding 93,536 92,962 93,686 92,977
Add common share effect, assuming conversion
of dilutive convertible securities 11,814 --- 11,419 ---
---------- ----------- --------- ----------
Average number of common shares outstanding on
a fully diluted basis 105,350 92,962 105,105 92,977
========== =========== ========= ==========
Per share $ 3.04 $ (.82) $ 1.79 $ (.41)
========== =========== ========= ==========
</TABLE>
NOTE:
(1) The computation of fully diluted earnings per common share assumes that the
average number of common shares outstanding during the period is increased
by the conversion of securities having a dilutive effect, and that net
income applicable to common stock is increased by dividends and after-tax
interest on such securities.
(2) Earnings per share was calculated for each three month and six month period
on a stand-alone basis. On June 22, 1995, the company purchased all
7,894,737 shares of Common Stock that were issued on that date upon
conversion of the $92.50 Cumulative Convertible Preference Stock, and on
June 30, 1995, the company purchased an additional 2,000,000 shares of
Common Stock. As a result of this reduction in the number of shares
outstanding, the sum of the earnings per share for the first and second
quarters of 1995 does not equal the earnings per share for the first six
months of 1995.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Statement of Income for the six months ended June 30, 1995 and the
Colsolidated Balance Sheet as of June 30, 1995 and is qualified in its entirety
by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 255,608
<SECURITIES> 0
<RECEIVABLES> 692,716
<ALLOWANCES> 19,205
<INVENTORY> 398,804
<CURRENT-ASSETS> 1,424,944
<PP&E> 10,590,860<F1>
<DEPRECIATION> 3,177,239
<TOTAL-ASSETS> 9,154,062
<CURRENT-LIABILITIES> 1,173,699
<BONDS> 2,994,790
<COMMON> 52,721
0
0
<OTHER-SE> 3,042,914
<TOTAL-LIABILITY-AND-EQUITY> 9,154,062
<SALES> 3,390,456
<TOTAL-REVENUES> 3,390,456
<CGS> 2,587,970
<TOTAL-COSTS> 2,587,970
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 114,528
<INCOME-PRETAX> 524,379
<INCOME-TAX> 205,621
<INCOME-CONTINUING> 318,758
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 318,758
<EPS-PRIMARY> 3.27
<EPS-DILUTED> 3.04
<FN>
<F1>Includes timber and timberlands.
</FN>
</TABLE>
