<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 March 31, 1996
------------------------------
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 incorporation (I.R.S. Employer
or organization) Identification No.)
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 April 30, 1996
- --------------------------------- -------------------------------
Common stock, $.50 par value 95,508,094
<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>
Three Months Ended
-----------------------
March 31,
-----------------------
1996 1995
---------- ----------
<S> <C> <C>
Net Sales $1,533,182 $1,634,024
Costs and Expenses
Cost of products sold 1,260,453 1,276,961
Selling, general and administrative expenses 97,015 96,659
Interest and debt expense 54,959 59,717
Other (income) expense - net (Note 2) (11,168) (19,776)
---------- ----------
Total costs and expenses 1,401,259 1,413,561
Income Before Income Taxes 131,923 220,463
Income Taxes 48,274 89,238
---------- ----------
Net Income $ 83,649 $ 131,225
========== ==========
Dividends on Preference Stock --- 6,938
========== ==========
Net Income Applicable to Common Stock $ 83,649 $ 124,287
========== ==========
Average Number of Common Shares Outstanding 95,505 93,385
========== ==========
Earnings Per Common Share (Exhibit 11):
Primary $ .88 $ 1.33
========== ==========
Fully Diluted $ .88 $ 1.26
========== ==========
Cash dividends declared $ .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>
March 31, December 31,
1996 1995
(unaudited)
------------ -----------
<S> <C> <C>
ASSETS:
Current Assets:
Cash and cash equivalents $ 249,617 $ 317,069
Short-term investments 89,057 98,275
Receivables - net 559,584 641,291
Inventories 544,442 484,001
Prepaid expenses 27,578 24,841
Deferred income taxes 72,532 75,329
----------- -----------
Total Current Assets 1,542,810 1,640,806
----------- -----------
Timber and timberlands, at cost - less cost of
timber harvested 2,188,361 2,007,685
----------- -----------
Property, plant and equipment, at cost 8,918,657 8,850,519
Less - Accumulated depreciation (3,418,107) (3,335,945)
----------- -----------
5,500,550 5,514,574
----------- -----------
Other assets and deferred charges 400,906 380,237
----------- -----------
Total Assets $ 9,632,627 $ 9,543,302
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current Liabilities;
Current installments of long-term debt $ 129,218 $ 77,760
Short-term bank borrowings 137,075 150,067
Accounts payable and accrued liabilities 664,180 726,206
Income taxes 34,433 125,840
----------- -----------
Total Current Liabilities 964,906 1,079,873
----------- -----------
Long-term debt 2,859,938 2,828,509
----------- -----------
Other liabilities 673,292 664,010
----------- -----------
Deferred income taxes 1,307,439 1,218,978
----------- -----------
Minority interest in subsidiaries 109,553 105,241
----------- -----------
Shareholders' Equity:
Capital Shares:
Common (110,257,747 and 110,230,379 shares
issued at March 31, 1996 and December 31,
1995, respectively) 55,129 55,115
Capital Surplus 1,651,082 1,653,456
Retained Earnings 2,696,895 2,618,033
----------- -----------
4,403,106 4,326,604
Treasury shares, at cost (657,864) (650,049)
Cumulative translation adjustment (27,743) (29,864)
----------- -----------
Total Shareholders' Equity 3,717,499 3,646,691
----------- -----------
Total Liabilities and Shareholders' Equity $ 9,632,627 $ 9,543,302
=========== ===========
</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>
Three Months Ended
---------------------
March 31,
---------------------
1996 1995
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 83,649 $ 131,225
Adjustments to reconcile net income (loss) to net cash
provided by operations:
Depreciation expense 100,061 96,805
Cost of timber harvested 22,661 18,644
Net gain on sale of assets (2,960) (22,976)
(Increase) decrease in receivables 82,848 (48,116)
(Increase) decrease in inventories (60,136) (16,570)
(Increase) decrease in prepaid expenses (2,679) (4,517)
Increase (decrease) in accounts payable and accrued
liabilities (62,539) (20,541)
Increase (decrease) in income taxes (91,370) 11,736
Increase (decrease) in other liabilities (14,303) (1,116)
Increase (decrease) in deferred income taxes 13,675 34,478
All other - net 17,335 21,846
--------- ---------
Net cash provided by (used in) operating activities 86,242 200,898
--------- ---------
Cash flows from investing activities:
Expenditures for property, plant and equipment (73,417) (56,530)
Timber and timberlands expenditures (30,326) (42,831)
Acquisition of timber subsidiary (Note 3) (71,775) ---
Proceeds from redemption of investments 9,218 ---
Proceeds from sales of property, plant and equipment
and timber and timberlands 8,139 130,328
All other - net (13,292) (1,729)
--------- ---------
Net cash provided by (used in) investing activities (171,453) 29,238
--------- ---------
Cash flows from financing activities:
Proceeds from issuance of long-term debt 342,039 36,089
Payments of current installments of long-term debt
and long-term debt (313,287) (183,957)
Payments to acquire treasury stock (7,815) ---
Cash dividends paid (4,797) (11,601)
All other - net 1,619 5,407
--------- ---------
Net cash provided by (used in) financing activities 17,759 (154,062)
--------- ---------
Increase (decrease) in cash and cash equivalents (67,452) 76,074
Cash and Cash Equivalents:
Beginning of period 317,069 90,948
--------- ---------
End of period $ 249,617 $ 167,022
========= =========
Supplemental Cash Flow Disclosures:
Cash paid during the period for:
Interest (net of capitalized amounts) $ 44,844 $ 47,932
Income taxes (net of refunds) 122,776 41,861
</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)
March 31, 1996
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.
Other (income) expense - net for the three months ended March 31, 1996 includes
a charge of $9 million primarily for severance costs at the Hamilton, Ohio,
printing and writing papers mill, and income of $7 million for the reduction of
reserves associated with certain discontinued operations. The three months ended
March 31, 1995 includes a $50 million gain from the sale of certain operations
in Canada and a charge of $36 million primarily for the writedown of certain
U.S. paper and wood products assets.
Note 3.
During the first quarter of 1996 the company acquired Lake Superior Land Company
for $76 million, before netting $4 million of cash owned by Lake Superior Land
Company, as well as an outstanding $44 million mortgage loan. The acquisition
was accounted for as a purchase. Liabilities recorded in connection with the
acquisition, including purchase accounting adjustments, were the $44 million
mortgage loan, $68 million of deferred taxes payable and $13 million of other
liabilities.
-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 first quarter of 1996 of $84 million or
$.88 per share, fully diluted, compared to last year's first quarter net income
of $131 million or $1.26 per share and last quarter's net income of $217 million
or $2.26 per share. Operating income in both the paper and wood products
segments declined from the year-ago and prior quarters, as discussed below.
Significant Income Statement Line Item Changes
Net sales of $1.53 billion declined from $1.63 billion a year ago and $1.74
billion last quarter. Gross profit on sales was $273 million, compared to $357
million last year and $470 million last quarter. Pre-tax income of $132 million
declined from $220 million a year ago and $329 million last quarter. The
declines in net sales, gross profit and pre-tax income from last year were due
primarily to lower prices for domestic uncoated free sheet papers, market pulp
and wood products, as well as lower shipments for most pulp and paper grades and
wood products. The declines from last quarter were due principally to lower
prices for all of the company's major pulp and paper grades. The aggregate cost
of products sold decreased somewhat from last year and last quarter mainly due
to reduced paper shipments. Selling, general and administrative expenses were
approximately even with last year but significantly higher than last quarter
primarily due to the impact of stock price fluctuations on the value of stock
appreciation rights.
Interest and debt expense declined from last year primarily due to lower average
interest rates on outstanding debt. Interest and debt expense was approximately
even with last quarter. Other (income) expense-net decreased from the year-ago
quarter, which reflected the sale by the company's Canadian subsidiary, Weldwood
of Canada Limited, of certain operations in British Columbia. Compared to last
quarter, other (income) expense-net improved principally due to lower expense
for minority interest in subsidiaries and reduced charges for discontinued
operations.
The income tax provision for the first quarter of 1996 reflected an effective
tax rate lower than last year mainly as the result of an increase in the
proportion of income derived from Brazilian operations and a corresponding
decrease from North American operations. The effective tax rate was higher than
last quarter due to the impact of adjustments to the 1995 Brazilian income tax
provision on the fourth quarter rate.
-6-
<PAGE>
Paper Segment
For the company's paper segment, first quarter operating income was $167
million. This compared to income of $230 million a year ago and $367 million
last quarter. Total paper, packaging and pulp shipments were 1,386,000 tons in
the first quarter, declining from 1,505,000 tons a year ago and 1,448,000 tons
last quarter.
Operating income for the domestic printing and writing papers business declined
considerably from a year ago and last quarter principally due to lower prices
and shipments for uncoated free sheet papers. The average price for domestic
uncoated free sheet papers, the principal product of the printing and writing
papers business, was $815 per ton in the first quarter of this year, compared to
$873 per ton last year and $1,002 per ton last quarter. The average price for
coated free sheet papers was somewhat higher than a year ago but slightly lower
than last quarter. Shipments of all printing and writing grades were 492,000
tons, compared to 528,000 tons last year and 498,000 tons last quarter,
reflecting lower demand, as well as weather-related outages at the Courtland,
Alabama; Canton, North Carolina; and Pensacola, Florida mills. Inventory levels
increased during the quarter. Although order levels for certain uncoated grades
began to improve early in the second quarter, and a price increase for these
grades was implemented in late April, average prices remain significantly below
those of the first quarter. Maintenance outages are scheduled at the Canton and
Courtland mills in the second quarter.
Operating income at the Brazilian subsidiary, Champion Papel e Celulose Ltda.,
improved from the year-ago quarter primarily due to higher prices for domestic
uncoated free sheet papers, which more than offset the decline in export prices.
Operating income declined from last quarter due to lower prices for domestic and
export uncoated free sheet papers. Prices continued to decline into the second
quarter. The average price for uncoated free sheet papers was $961 per ton this
quarter, compared to $855 per ton last year and $1,082 per ton last quarter.
Uncoated free sheet papers shipments of 96,000 tons were approximately even with
last year and last quarter. Approximately 29% of the company's first quarter
consolidated pre-tax income was attributable to the Brazilian subsidiary. A pulp
mill maintenance outage is scheduled in the second quarter.
Earnings for the publication papers business improved considerably from the
year-ago quarter, but declined significantly from last quarter. The average
price for coated groundwood papers was $1,113 per ton this quarter, compared to
$900 per ton last year and $1,168 per ton last quarter. Prices for coated free
sheet papers also increased from last year and declined from last quarter, while
prices for uncoated groundwood papers increased from last year and were the same
as last quarter. Shipments of all publication grades of 288,000 tons declined
from 321,000 tons last year and 323,000 tons last quarter, as weakening order
backlogs resulted in a buildup in inventories. Purchased pulp and wood costs
were higher than last year, but lower than last quarter. Prices for all
publication grades continued to decline early in the second quarter.
Operating income for the company's U.S. and Canadian market pulp operations
declined substantially from last year and last quarter. Weakening demand for
pulp, reflecting shorter order backlogs for most grades of paper, and additional
pulp capacity in Indonesia resulted in a decline from last year and last quarter
in prices for all pulp grades. The average price for Canadian softwood pulp was
$500 per ton in the first quarter of this year, compared to $603 last year and
$763 last quarter. Prices for northern hardwood and southern pulps also
decreased from last year and last quarter. Shipments of all pulp grades were
174,000 tons, compared to 200,000 tons last year and 167,000 tons last quarter.
-7-
<PAGE>
Inventory levels of pulp increased during the quarter. Maintenance outages are
scheduled in the second quarter at all of the company's market pulp mills.
Earnings for the newsprint business improved substantially from last year mainly
due to higher prices, but were down somewhat from last quarter primarily due to
lower shipments. Average newsprint prices (including freight) of $681 per ton in
the first quarter of 1996 compared to $520 per ton last year and $693 per ton
last quarter. Shipments of 208,000 short tons of newsprint, specialty and
directory grades declined from 234,000 tons last year and 236,000 tons last
quarter. Weakening demand resulted in a decline in shipments and an increase in
inventories beginning late in the first quarter and continuing into the second
quarter. Maintenance outages are scheduled at both of the newsprint mills in the
second quarter.
Earnings for the packaging business declined from last year and last quarter
primarily due to lower prices for kraft paper and linerboard. Shipments of
128,000 tons were approximately even with last year and last quarter. Order
levels and prices for linerboard declined early in the second quarter. A
maintenance outage is scheduled at the company's linerboard and kraft paper mill
in the second quarter.
Wood Products Segment
The company's wood products segment, which includes the wood-related operations
of Weldwood, reported first quarter income from operations of $19 million, down
from earnings of $49 million a year ago and $27 million last quarter. The
decline from last year was due principally to a decrease in average plywood and
lumber prices of 11% and 13%, respectively. The decline from last quarter was
due mainly to a 6% decrease in average plywood prices. Total wood products
shipments were approximately even with last year and higher than last quarter.
West coast timber stumpage volumes increased somewhat from last year but
declined from last quarter.
Foreign Operations
The company's major foreign operations, which are discussed above under their
respective business segment headings, are in Canada and Brazil. Net sales to
unaffiliated customers by the company's foreign subsidiaries for the first
quarter of 1996 were (U.S.) $201 million, accounting for 13.1% of consolidated
net sales of the company. Pre-tax income of the foreign subsidiaries for this
year's first quarter was (U.S.) $53 million, accounting for 40.1% of
consolidated pre-tax income of the company. Net income (after minority interest)
of the foreign subsidiaries for the first quarter of 1996 was (U.S.) $36
million, accounting for 42.5% of consolidated net income of the company.
Labor Contracts
Negotiations are under way for a new labor contract at the Pensacola, Florida,
paper mill. The existing labor contract expires in June.
-8-
<PAGE>
Financial Condition
The company's current ratio was 1.6 to 1 at March 31, 1996 as compared to 1.5 to
1 at year-end 1995. Total debt to total capitalization was 38% at March 31, 1996
and year-end 1995.
Significant Balance Sheet Line Item Changes
Receivables decreased by $82 million from December 31, 1995 primarily due to
substantial price decreases for uncoated free sheet papers and market pulp, as
well as reduced shipments for several of the company's major paper grades.
Inventories increased by $60 million, reflecting the reduced shipments. Timber
and timberlands - net increased by $181 million mainly due to the acquisition of
Lake Superior Land Company, which owns approximately 290,000 acres of forest
lands in Michigan and Wisconsin. Accounts payable and accrued liabilities
decreased by $62 million primarily due to the timing of payments. Income taxes
payable decreased by $91 million, as $123 million in payments were made in the
first quarter of 1996 for U.S. and foreign income taxes. The deferred income tax
liability increased by $88 million, which included $69 million recorded in
connection with the Lake Superior Land Company acquisition. For a discussion of
changes in long-term debt (including current installments) and cash and cash
equivalents, see below.
Cash Flows Statement - General
In the first three months of 1996, the company's net cash provided by operating
activities and asset sales was not sufficient to meet the requirements of its
investing activities (principally capital expenditures and the acquisition of
Lake Superior Land Company) and its financing activities (principally debt
payments, cash dividends, and the purchase of shares of the company's common
stock). The difference was financed through borrowings and the use of cash and
cash equivalents. In the first three months, net borrowings generated cash
proceeds of $29 million; long-term debt (including current installments)
increased by $83 million, including a $44 million mortgage loan of Lake Superior
Land Company which was outstanding at the time of its acquisition. Cash and cash
equivalents decreased by $68 million in the first three months to a total of
$250 million, $192 million of which was held by the company's Canadian and
Brazilian subsidiaries.
In the first three 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 was used to pay
dividends as well as a portion of the company's long-term debt (including
current installments) and to increase cash and cash equivalents. Long-term debt
(including current installments) declined by $158 million and cash and cash
equivalents increased by $76 million in the first three months of 1995.
Cash Flows Statement - Operating Activities
For the first three months, net cash provided by operating activities of $86
million declined from $201 million a year ago. The decrease was due primarily to
lower earnings, higher income tax payments, higher inventories and lower
accounts payable and accrued liabilities, partially offset by a decrease in
receivables.
-9-
<PAGE>
Cash Flows Statement - Investing Activities
For the first three months, net cash used in investing activities of $171
million compared to net cash provided by investing activities of $29 million a
year ago. The change was due principally to the acquisition of Lake Superior
Land Company for $76 million (as well as the outstanding $44 million mortgage
loan referred to above), and a decline in net proceeds from asset sales
attributable to the sale of certain operations in Canada last year.
As a result of the decline in earnings in the first quarter of 1996 and the
continuation into the second quarter of low price levels for several pulp and
paper grades, the company has reduced anticipated capital spending for 1996 from
$660 million to $550 million. Further reductions may occur if market conditions
for pulp and paper do not improve.
On April 9, 1996, the company sold the lumber mill at Abbeville, Alabama, to
Abbeville Forest Products, Inc. for approximately $1.4 million. The facility,
with an annual capacity of 79 million board feet, had been closed indefinitely
effective June 9, 1995.
On April 1, 1996, Weldwood sold is Longlac, Ontario, hardwood plywood and
waferboard plants and related timber supply rights to a subsidiary of Kruger
Inc. The two plants have annual capacities of 80 million square feet (3/8"
basis) of hardwood plywood and 160 million square feet (3/8" basis) of
waferboard.
Cash Flows Statement - Financing Activities
Net cash provided by financing activities of $18 million compared to net cash
used in financing activities of $154 million a year ago. The change was
primarily due to an increase in debt in 1996 compared to a reduction in debt in
1995, which in turn reflected the decrease in net cash provided by operating
activities and the increase in net cash used in investing activities this year,
as discussed above.
At March 31, 1996, the company had $31 million of U.S. commercial paper
outstanding, all of which is classified as long-term debt, down from $58 million
at year-end 1995. At December 31, 1995, the company had $40 million of notes
outstanding under its U.S. bank lines of credit. At March 31, 1996, no notes
were outstanding under these lines of credit. Domestically, at March 31, 1996,
$31 million of the company's unused bank lines of credit of $1,250 million
supported the classification of commercial paper as long-term debt. At March 31,
1996, Weldwood had unused bank lines of credit of $184 million.
On February 20, 1996, the company borrowed $200 million through the issuance of
6.40% Debentures due February 15, 2026. The net proceeds of this issue were used
to pay a portion of the company's commercial paper and all of its short-term
notes at maturity.
On April 22, 1996, Weldwood of Canada Limited, the company's majority-owned
Canadian subsidiary, announced that it had been requested by the company to
propose a plan of arrangement pursuant to which each of the approximately 6.2
million shares of Weldwood not owned by the company would be surrendered and
canceled in exchange for (Cdn) $40.50. Upon consummation of the plan of
arrangement, Weldwood would become a wholly-owned subsidiary of the company. The
plan of arrangement is subject to approval by the minority shareholders of
Weldwood at a meeting expected to be held in June as well as approval by the
Supreme Court of British Columbia.
-10-
<PAGE>
The annual principal payment requirements under the terms of all long-term
agreements for the period from April 1 through December 31, 1996 are $79 million
and for the years 1997 through 2000 are $180 million, $280 million, $316 million
and $205 million, respectively.
The Environment
Environmental Legal Proceedings
There is incorporated by reference herein the information under Item 1. Legal
Proceedings in Part II of this report.
-11-
<PAGE>
PART II. OTHER INFORMATION
CHAMPION INTERNATIONAL CORPORATION AND SUBSIDIARIES
Item 1. Legal Proceedings.
As most recently reported in the company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1995, on November 9, 1992, an action was brought
against the company in the Circuit Court for Baldwin County, Alabama, on behalf
of a class consisting of all persons who own land along Perdido Bay in Florida
and Alabama. The action originally sought $500 million in compensatory and
punitive damages for personal injury, intentional infliction of emotional
distress and diminution in property value allegedly resulting from the purported
discharge of hazardous substances, including dioxin, from the company's
Pensacola, Florida mill into Eleven Mile Creek, which flows into Perdido Bay.
However, in February 1994, the plaintiffs reduced their demand to not more than
$50,000 for each class member, and in June 1994, the personal injury claims were
dismissed. On May 3, 1996, the court approved a settlement of the action
providing for a payment of $5 million by the company. The court's approval is
subject to appeal through June 14, 1996.
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 January 9, 1996
reporting the issuance of a press release announcing certain unaudited
consolidated financial results of the company for the three months and
twelve months ended December 31, 1995, with the consolidated statement of
income for the three months and twelve months ended December 31, 1995 and
December 31, 1994 as an exhibit thereto.
The company filed a Current Report on Form 8-K dated February 7, 1996
reporting the sale of $200 million aggregate principal amount of the
company's 6.40% Debentures due February 15, 2026, pursuant to the company's
registration statement (No. 33-62819). The Form 8-K also reported the
issuance of a press release announcing weather-related outages at several
facilities, related equipment repair costs and continuing price declines for
certain of the company's pulp and paper grades.
-12-
<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: May 13, 1996 John M. Nimons
----------------------- ----------------------------------
(Signature)
John M. Nimons
Vice President and Controller
Date: May 13, 1996 Kenwood C. Nichols
----------------------- ----------------------------------
(Signature)
Kenwood C. Nichols
Vice Chairman
-13-
<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).
14
<PAGE>
EXHIBIT 11
CHAMPION INTERNATIONAL CORPORATION AND SUBSIDIARIES
Calculation of Primary Earnings Per Common Share and
Fully Diluted Earnings Per Common Share (unaudited)
(in thousands, except per share)
<TABLE>
<CAPTION>
Three Months Ended
------------------
March 31,
------------------
1996 1995
-------- --------
<S> <C> <C>
Primary earnings per common share:
Net Income $ 83,649 $131,225
Dividends on Preference Shares --- 6,938
-------- --------
Net Income Applicable to Common Stock $ 83,649 $124,287
======== ========
Average number of common shares
outstanding 95,505 93,385
======== ========
Per share $.88 $1.33
======== ========
Fully diluted earnings per common
share:
Net Income Applicable to Common Stock $ 83,649 $124,287
Add income effect, assuming conversion
of dilutive convertible securities --- 8,522
-------- --------
Net income on a fully diluted basis $ 83,649 $132,809
======== ========
Average number of common shares
outstanding 95,505 93,385
Add common share effect, assuming
conversion of dilutive convertible
securities --- 12,211
-------- --------
Average number of common shares
outstanding on a fully diluted basis 95,505 105,596
======== ========
Per share $ .88 $ 1.26
======== ========
</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.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED STATEMENT OF INCOME FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND
THE CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 1996 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 249,617
<SECURITIES> 89,057
<RECEIVABLES> 576,952
<ALLOWANCES> 17,368
<INVENTORY> 544,442
<CURRENT-ASSETS> 1,542,810
<PP&E> 11,107,018<F1>
<DEPRECIATION> 3,418,107
<TOTAL-ASSETS> 9,632,627
<CURRENT-LIABILITIES> 964,906
<BONDS> 2,859,938
<COMMON> 55,129
0
0
<OTHER-SE> 3,662,370
<TOTAL-LIABILITY-AND-EQUITY> 9,632,627
<SALES> 1,533,182
<TOTAL-REVENUES> 1,533,182
<CGS> 1,260,453
<TOTAL-COSTS> 1,260,453
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 54,959
<INCOME-PRETAX> 131,923
<INCOME-TAX> 48,274
<INCOME-CONTINUING> 83,649
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 83,649
<EPS-PRIMARY> 0.88
<EPS-DILUTED> 0.88
<FN>
<F1>Includes timber and timberlands.
</FN>
</TABLE>
