SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended March 31, 1997 Commission file number 1-3157
INTERNATIONAL PAPER COMPANY
(Exact name of registrant as specified in its charter)
New York 13 0872805
(State or other jurisdiction of (I.R.S. Employer
incorporation of organization) Identification No.)
Two Manhattanville Road, Purchase, NY 10577
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 914-397-1500
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.
Common stock outstanding on April 30, 1997: 300,852,134 shares.
<PAGE>
INTERNATIONAL PAPER COMPANY
INDEX
Page No.
--------
PART I. Financial Information
Item 1. Financial Statements
Consolidated Statement of Earnings -
Three Months Ended March 31, 1997 and 1996 3
Consolidated Balance Sheet -
March 31, 1997 and December 31, 1996 4-5
Consolidated Statement of Cash Flows -
Three Months Ended March 31, 1997 and 1996 6
Notes to Consolidated Financial
Statements 7-9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 10-12
Item 3. Other Financial Information 13
PART II. Other Information
Item 1. Legal Proceedings 14
Item 2. Changes in Securities *
Item 3. Defaults upon Senior Securities *
Item 4. Submission of Matters to a Vote of Security Holders *
Item 5. Other Information *
Item 6. Exhibits and Reports on Form 8-K 15
Signatures 16
* Omitted since no answer is called for, answer is in the negative or
inapplicable.
2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
INTERNATIONAL PAPER COMPANY
Consolidated Statement of Earnings
(Unaudited)
(In millions, except per-share amounts)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
----------------------------------------
1997 1996
--------------------- ------------------
<S> <C> <C>
Net Sales $ 4,862 $ 4,798
--------------------- ------------------
Costs and Expenses
Cost of products sold 3,636 3,556
Selling and administrative expenses 379 347
Depreciation and amortization 320 263
Distribution expenses 237 201
Taxes other than payroll and income taxes 52 47
Restructuring and asset impairment charge 515
--------------------- ------------------
Total Costs and Expenses 4,624 4,929
--------------------- ------------------
Gain on sale of partnership interest 592
--------------------- ------------------
Earnings Before Interest, Income Taxes and
Minority Interest 238 461
Interest expense, net 130 125
--------------------- ------------------
Earnings Before Income Taxes and Minority Interest 108 336
Provision for income taxes 40 163
Minority interest expense, net of taxes 34 75
--------------------- ------------------
Net Earnings $ 34 $ 98
===================== ==================
Earnings per Common Share $ 0.11 $ 0.36
===================== ==================
Average Shares of Common Stock Outstanding 300.6 268.9
===================== ==================
Cash Dividends per Common Share $ 0.25 $ 0.25
===================== ==================
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
INTERNATIONAL PAPER COMPANY
Consolidated Balance Sheet
(Unaudited)
(In millions)
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
------------------- -----------------
<S> <C> <C>
Assets
Current Assets
Cash and temporary investments $ 560 $ 352
Accounts and notes receivable, net 2,545 2,553
Inventories 2,868 2,840
Other current assets 239 253
------------------- -----------------
Total Current Assets 6,212 5,998
------------------- -----------------
Plants, Properties and Equipment, Net 12,924 13,217
Forestlands 3,333 3,342
Investments 1,225 1,178
Goodwill 2,705 2,748
Deferred Charges and Other Assets 1,755 1,769
------------------- -----------------
Total Assets $ 28,154 $ 28,252
=================== =================
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
INTERNATIONAL PAPER COMPANY
Consolidated Balance Sheet
(Unaudited)
(In millions)
<TABLE>
<CAPTION>
March 31, December 31,
Liabilities and Common Shareholders' Equity 1997 1996
---------------- -------------------
<S> <C> <C>
Current Liabilities
Notes payable and current maturities of long-term debt $ 3,287 $ 3,296
Accounts payable 1,274 1,426
Accrued liabilities 1,330 1,172
---------------- -----------------
Total Current Liabilities 5,891 5,894
---------------- -----------------
Long-Term Debt 6,618 6,691
Deferred Income Taxes 2,753 2,768
Other Liabilities 1,217 1,240
Minority Interest 1,912 1,865
International Paper-Obligated Mandatorily Redeemable
Preferred Securities of Subsidiary Trust Holding Solely
International Paper Subordinated Debentures 450 450
Common Shareholders' Equity
Common stock, $1 par value, issued
1997 - 301.3 shares, 1996 - 300.8 shares 301 301
Paid-in capital 3,437 3,426
Retained earnings 5,598 5,639
---------------- -----------------
9,336 9,366
Less: Common stock held in treasury, at cost,
1997 - 0.5 shares, 1996 - 0.6 shares 23 22
---------------- -----------------
Total Common Shareholders' Equity 9,313 9,344
---------------- -----------------
Total Liabilities and Common Shareholders' Equity $ 28,154 $ 28,252
================ =================
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
INTERNATIONAL PAPER COMPANY
Consolidated Statement of Cash Flows
(Unaudited)
(In millions)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
----------------------------
1997 1996
----------- ------------
<S> <C> <C>
Operating Activities
Net earnings $ 34 $ 98
Noncash items
Depreciation and amortization 320 263
Deferred income taxes (26) 81
Gain on sale of partnership interest (592)
Restructuring and asset impairment charge 515
Other, net 17 89
Changes in current assets and liabilities
Accounts and notes receivable (57) 50
Inventories (65) 36
Accounts payable and accrued liabilities 40 (167)
Other (22) (21)
----------- ------------
Cash Provided by Operations 241 352
----------- ------------
Investment Activities
Invested in capital projects (202) (253)
Mergers and acquisitions, net of cash acquired (1,279)
Other 9 (9)
----------- ------------
Cash Used for Investment Activities (193) (1,541)
----------- ------------
Financing Activities
Issuance of common stock 14 35
Issuance of debt 217 1,421
Reduction of debt (43) (136)
Change in bank overdrafts (52) (12)
Dividends paid (75) (65)
Other 113 31
----------- ------------
Cash Provided by Financing Activities 174 1,274
----------- ------------
Effect of Exchange Rate Changes on Cash (14) 2
----------- ------------
Change in Cash and Temporary Investments 208 87
Cash and Temporary Investments
Beginning of the period 352 312
----------- ------------
End of the period $ 560 $ 399
=========== ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
INTERNATIONAL PAPER COMPANY
Notes to Consolidated Financial Statements
(Unaudited)
1. The accompanying unaudited consolidated financial statements have been
prepared in accordance with the instructions to Form 10-Q and, in the
opinion of Management, include all adjustments (consisting only of normal
recurring accruals) which are necessary for the fair presentation of
results for the interim periods. It is suggested that these consolidated
financial statements be read in conjunction with the audited financial
statements and the notes thereto incorporated by reference in the Company's
Form 10-K for the year ended December 31, 1996, which has previously been
filed with the Commission.
2. In August 1996, the Company acquired Forchem, a tall oil and turpentine
processor in Finland. In September 1996, Carter Holt Harvey, a consolidated
subsidiary of the Company, acquired Forwood Products, the timber processing
business of the South Australian Government.
On March 12, 1996, the Company completed the merger with Federal Paper
Board (Federal), a diversified forest and paper products company. Under the
terms of the merger agreement, Federal shareholders received, at their
election and subject to certain limitations, either $55 in cash or a
combination of cash and International Paper common stock worth $55 for each
share of Federal common stock. To complete the merger, Federal shares were
acquired for approximately $1.3 billion in cash and $1.4 billion in
International Paper common stock, and approximately $800 million of debt
was assumed. The results of Federal are included in the consolidated
statement of earnings from March 12, 1996.
All of the above acquisitions were accounted for using the purchase method.
The consolidated balance sheets at March 31, 1997 and December 31, 1996
include preliminary purchase price allocations for Forchem and Forwood
Products. Final allocations for these acquisitions will be completed in
1997.
3. The following unaudited pro forma financial information for the three
months ended March 31, 1996 presents the combined results of the continuing
operations of International Paper, Federal, and the other acquisitions
completed during 1996.
The 1997 amounts presented below are actual results for the first quarter.
These amounts include the results of all of the 1996 acquisitions for the
entire quarter and are presented for comparative purposes only.
7
<PAGE>
The pro forma information is presented as if the transactions occurred as
of the beginning of the three month period ended March 31, 1996. The pro
forma adjustments are based on available information, preliminary purchase
price allocations and certain assumptions that the Company believes are
reasonable. There can be no assurance that the assumptions and estimates
would have been realized. The pro forma information does not purport to
represent the Company's actual results of operations if the transactions
described above would have occurred at the beginning of the 1996 period,
nor is it indicative of the actual results since acquisition. In addition,
the information may not be indicative of future results.
<TABLE>
<CAPTION>
Three Months Ended
(In millions, except per-share amounts) March 31,
-------------------------------
1997 1996
--------------- --------------
(Unaudited)
<S> <C> <C>
Net Sales $ 4,862 $ 5,167
=============== ==============
Net Earnings $ 34 $ 84
=============== ==============
Earnings Per Common Share $ .11 $ .28
=============== ==============
</TABLE>
4. In October 1996, the American Institute of Certified Public Accountants
issued Statement of Position 96-1, "Environmental Remediation Liabilities"
(the SOP), which was adopted by the Company in the first quarter of 1997.
The SOP provides guidance concerning the recognition, measurement and
disclosure of environmental remediation liabilities. The adoption of the
SOP did not have a material effect on the Company's financial position or
results of operations.
5. In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, "Earnings Per Share," which
specifies the computation, presentation and disclosure requirements for
earnings per share. This statement is effective for fiscal years ending
after December 15, 1997 and earlier adoption is not permitted. Adoption of
the provisions of this statement is not expected to have a material effect
on reported earnings per share.
6. On March 29, 1996, IP Timberlands, Ltd. (IPT), a consolidated subsidiary of
International Paper, completed the sale of a 98% general partnership
interest in a subsidiary partnership that owns approximately 300,000 acres
of forestlands located in Oregon and Washington. Included in the net assets
of the partnership interest sold were forestlands, roads and $750 million
of long-term debt. As a result of this transaction, International Paper
recognized in its consolidated results for the first quarter of 1996 a $592
million pre-tax gain ($336 million after taxes and minority interest
expense or $1.25 per share). IPT and International Paper retained
non-operating interests in the partnership.
7. During the first quarter of 1996, the Company's Board of Directors
authorized a series of management actions to restructure and strengthen
existing businesses which resulted in a pre-tax charge to earnings of $515
million ($362 million after taxes or $1.35 per share). The charge included
$305 million for the write-off of certain assets, $100 million for asset
impairments, $80 million in associated severance costs and $30 million of
other expenses, including the cancellation of leases. Accruals for one-time
cash costs, which include severance costs and other expenses, totaled $110
million. Approximately $34 million of these costs were incurred in 1996 and
the remainder will be spent in 1997.
8
<PAGE>
8. In the third quarter of 1995, International Paper Capital Trust (the Trust)
issued $450 million of International Paper-obligated mandatorily redeemable
preferred securities. The Trust is a wholly-owned consolidated subsidiary
of International Paper and its sole assets are International Paper 5-1/4%
convertible subordinated debentures. The obligations of the Trust related
to its preferred securities are fully and unconditionally guaranteed by
International Paper. These preferred securities are convertible into
International Paper common stock. Preferred securities distributions of $6
million were paid during each of the three months ended March 31, 1997 and
1996.
9. Inventories by major category include:
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
----------------- ------------------
(In millions)
<S> <C> <C>
Raw materials $ 482 $ 552
Finished pulp, paper and packaging products 1,443 1,400
Finished lumber and panel products 220 215
Operating supplies 402 397
Other 321 276
----------------- ------------------
Total $ 2,868 $ 2,840
================= ==================
</TABLE>
10. Interest payments made during the three months ended March 31, 1997 and
1996 were $140 million and $162 million, respectively. Interest income for
the three months ended March 31, 1997 and 1996 was $20 million and $11
million, respectively. Income tax payments made during the three months
ended March 31, 1997 and 1996 were $8 million and $14 million,
respectively.
11. Temporary investments with a maturity of three months or less are treated
as cash equivalents and are stated at cost. Temporary investments totaled
$267 million and $221 million at March 31, 1997 and December 31, 1996,
respectively.
12. Accumulated depreciation was $9.7 billion at March 31, 1997 and $9.5
billion at December 31, 1996. The allowance for doubtful accounts was $105
million at March 31, 1997 and $101 million at December 31, 1996.
9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
International Paper's first-quarter 1997 net sales of $4.9 billion were slightly
ahead of the $4.8 billion reported in the 1996 first-quarter. Fourth-quarter
1996 net sales were $5.1 billion.
First-quarter 1997 net earnings were $34 million or $.11 per share, a decrease
from first-quarter 1996 earnings before special items of $124 million or $.46
per share and fourth-quarter 1996 earnings before special items of $100 million
or $.33 per share. First-quarter 1996 and fourth-quarter 1996 net earnings
after special items were $98 million or $.36 per share and a loss of $5 million
or $.02 per share, respectively. First-quarter 1996 special items included a
$515 million pre-tax restructuring and asset impairment charge ($362 million
after taxes or $1.35 per share) and a $592 million pre-tax gain on the sale of a
partnership interest ($336 million after taxes and minority interest expense or
$1.25 per share). In the fourth quarter of 1996, a $165 million pre-tax charge
($105 million after taxes or $.35 per share) was recorded for the write-down of
the investment in Scitex, a company that markets digital communication products.
First-quarter 1997 earnings declined significantly from the 1996 first and
fourth quarters, before special items, primarily due to price declines
experienced in major paper and packaging product lines. Although demand remained
generally strong, industry inventories remained high throughout the quarter
resulting in lower prices for uncoated papers, pulp and containerboard. The
Company has taken downtime to balance production with demand, principally in
uncoated papers, pulp and containerboard.
The consolidated results of operations include Federal Paper Board (Federal)
since March 12, 1996. Federal contributed about 8% of first-quarter 1997
consolidated net sales. Operating results for Carter Holt Harvey, adjusted as
necessary to conform with International Paper's classifications, are also
included in each segment as applicable.
Printing Papers 1997 first-quarter net sales remained stable at about $1.4
billion compared with the 1996 first quarter. Contributions from Federal of
about 12% of 1997 first-quarter segment sales offset declines in other
businesses. Operating profits for the 1997 first quarter were significantly
below the comparable prior-year period and the 1996 fourth quarter primarily due
to lower prices for uncoated papers and pulp. Demand for uncoated grades,
particularly copy and printing papers, has recently strengthened in the United
States, and price increases have been announced early in the second quarter.
Packaging 1997 first-quarter net sales increased to $1.2 billion from $1.1
billion in the 1996 first quarter. Sales contributions from Federal were about
16% of total 1997 first-quarter sales for this segment. Operating profits
declined significantly from the 1996 first quarter and the previous quarter
mainly due to lower containerboard and box prices. Although demand for
containerboard was strong, excess industry capacity and high industry
inventories combined to depress prices. Prices and demand for bleached board
remained stable throughout the quarter.
Distribution net sales of $1.1 billion for the 1997 first quarter were slightly
below the 1996 first quarter and the 1996 fourth quarter. Operating profits were
about even with the 1996 first quarter and declined from the previous quarter.
The decline from the 1996 fourth quarter reflects the decrease in prices for
printing papers.
10
<PAGE>
Specialty Products 1997 first-quarter net sales of $860 million were even with
the 1996 first quarter. First-quarter 1997 operating profits improved
significantly from the comparable prior-year period after adjusting for
first-quarter 1996 special items that significantly impacted this segment.
First-quarter 1997 operating profits were also ahead of the previous quarter
reflecting strong demand for building products. Results for the chemicals
business improved and were further strengthened by contributions from Forchem, a
tall oil and turpentine processor in Finland acquired in August of 1996.
Forest Products 1997 first-quarter net sales increased to $605 million from $575
million recorded in the 1996 first quarter. Sales contributions from Federal
were about 11% of total segment sales for the quarter. Operating profits were
ahead of the 1996 first quarter after adjusting for first-quarter 1996 special
items. Earnings were down from the 1996 fourth quarter primarily due to
depressed markets for siding and a lower contribution from Carter Holt Harvey.
However, demand for timber was solid and prices trended upward. Housing starts,
a reflection of the construction and repair markets, were strong throughout the
quarter.
LIQUIDITY AND CAPITAL RESOURCES
Cash provided by operations totaling $241 million for the 1997 first quarter
decreased from $352 million in the 1996 first quarter. Lower earnings for the
1997 first quarter, together with a reduction in noncash items, were primarily
responsible for the decrease. Working capital increased approximately $100
million in each of the 1997 and 1996 first quarters. Noncash operating items in
the first quarter of 1996 included the $77 million net impact of special items.
Investments in capital projects, including spending by Federal, totaled $202
million for the 1997 first quarter, down 20% from the $253 million reported for
the 1996 first quarter. Approximately $1.3 billion of cash was spent and $1.4
billion of International Paper common stock was exchanged (35.4 million shares)
to acquire the outstanding shares of Federal during the 1996 first quarter.
Financing activities for the 1997 first quarter included $174 million of net
borrowing activities primarily consisting of short-term debt. During the 1996
first quarter, approximately $1.3 billion of short-term debt was issued to
acquire the Federal common shares. Dividend payments totaled $75 million or $.25
per common share for the 1997 first quarter compared with $65 million in the
1996 first quarter. This change reflects the increase in common shares
outstanding due to the Federal merger.
Cash flow generated by operations, supplemented as necessary by short- or
long-term borrowings, are anticipated to be adequate to fund expected capital
expenditures, which have been reduced to approximately $1.2 billion for 1997.
MERGERS AND ACQUISITIONS
On March 12, 1996, International Paper completed the merger with Federal Paper
Board, a diversified forest and paper products company. Under the terms of the
merger agreement, Federal shareholders received, at their election and subject
to certain limitations, either $55 in cash or a combination of cash and
International Paper common stock worth $55 for each share of Federal common
stock. To complete the merger, Federal shares were acquired for approximately
$1.3 billion in cash and $1.4 billion in International Paper common stock, and
approximately $800 million of debt was assumed.
11
<PAGE>
The results of Federal are included in the consolidated statement of earnings
from March 12, 1996. As a result of the merger, Federal contributed about 8% of
consolidated net sales for the 1997 first quarter and between 2% and 14% for
each of the components of consolidated costs and expenses. The consolidated
balance sheets at March 31, 1997 and December 31, 1996 include the balances of
Federal.
In August 1996, the Company acquired Forchem, a tall oil and turpentine
processor in Finland, for approximately $100 million. In September 1996, Carter
Holt Harvey acquired Forwood Products, the timber processing business of the
South Australian Government, for approximately $100 million.
RESTRUCTURING AND ASSET IMPAIRMENT CHARGE
During the first quarter of 1996, the Company's Board of Directors authorized a
series of management actions to restructure and strengthen existing businesses,
which resulted in a pre-tax charge to earnings of $515 million ($362 million
after taxes or $1.35 per share). The charge included $305 million for the
write-off of certain assets, $100 million for asset impairments, $80 million in
associated severance costs and $30 million of other expenses, including the
cancellation of leases. Accruals for one-time cash costs, which include
severance costs and other expenses, totaled $110 million. Approximately $34
million of these costs were incurred in 1996 and the remainder will be spent in
1997.
GAIN ON SALE OF PARTNERSHIP INTEREST
On March 29, 1996, IP Timberlands Ltd. (IPT), a consolidated subsidiary of
International Paper, completed the sale of a 98% general partnership interest in
a subsidiary partnership that owns approximately 300,000 acres of forestlands
located in Oregon and Washington. Included in the net assets of the partnership
interest sold were forestlands, roads and $750 million of long-term debt. As a
result of this transaction, International Paper recognized in its 1996
first-quarter consolidated results a $592 million pre-tax gain ($336 million
after taxes and minority interest expense or $1.25 per share).
OTHER
Minority interest expense for the 1997 first quarter decreased significantly
from the comparable 1996 period due to the minority interestholders' share of
the gain on the sale of a partnership interest that was recorded in the 1996
first quarter.
12
<PAGE>
ITEM 3. OTHER FINANCIAL INFORMATION
Financial Information by Industry Segment
(Unaudited)
(In millions)
Net Sales by Industry Segment
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------------------------
1997 1996
---------------- ---------------
<S> <C> <C>
Printing Papers $ 1,380 $ 1,355
Packaging 1,190 1,135
Distribution 1,120 1,185
Specialty Products 860 860
Forest Products 605 575
Less: Intersegment Sales (293) (312)
---------------- ---------------
Net Sales $ 4,862 $ 4,798
================ ===============
</TABLE>
Production by Products
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------------
1997 (E) 1996 (D)(F)
------------- -------------
<S> <C> <C>
Printing Papers (In thousands of tons)
White Papers and Bristols 1,027 833
Coated Papers 310 246
Market Pulp (A) 575 404
Newsprint 21 22
Packaging (In thousands of tons)
Containerboard 699 652
Bleached Packaging Board 549 343
Industrial Papers 172 160
Industrial and Consumer Packaging (B) 807 774
Specialty Products (In thousands of tons)
Tissue 32 25
Forest Products (In millions)
Panels (sq. ft. 3/8" basis) (C) 292 245
Lumber (board feet) 481 339
MDF (sq. ft. 3/4" basis) 52 71
Particleboard (sq. ft. 3/4" basis) 45 45
</TABLE>
(A) This excludes market pulp purchases.
(B) A significant portion of this tonnage was fabricated from paperboard and
paper produced at the Company's own mills and included in the
containerboard, bleached packaging board, and industrial papers amounts in
this table.
(C) Panels include plywood and oriented strand board.
(D) Includes Federal Paper Board from March 12, 1996.
(E) Includes Federal Paper Board for the full quarter.
(F) Certain reclassifications and adjustments have been made to prior-period
amounts.
13
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
MASONITE
As previously reported on Forms 10-K and 10-Q, a lawsuit which has been
certified as a nationwide class action was filed against the Company and its
wholly owned subsidiary, Masonite Corporation, on December 27, 1994, in Mobile
County Circuit Court, Mobile, Alabama. The lawsuit alleged that hardboard
siding, which is used as exterior cladding for residential dwellings and is
manufactured by Masonite, fails prematurely, allowing moisture intrusion. It
further alleged that the presence of moisture in turn causes the failure of the
structure underneath. In August 1996, the single issue of product defect was
tried to a jury and they returned a split decision, finding partly for the
plaintiff and partly for Masonite. The jury was not asked to determine any other
liability issues, causation or damages. A phase II trial is set for July 14,
1997 on the remaining issues in the case. The Company and Masonite feel that
there are valid defenses to this case and will continue to vigorously defend all
claims asserted by Plaintiff. While any litigation has an element of
uncertainty, it is believed that the outcome of these proceedings will not have
a material adverse effect on the Company's consolidated financial position or
results of operations.
14
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
(11) Statement of Computation of Per Share Earnings
(12) Computation of Ratio of Earnings to Fixed Charges
(27) Financial Data Schedule
(b) Reports on Form 8-K
A report on Form 8-K was filed on April 9, 1997.
15
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
INTERNATIONAL PAPER COMPANY
(Registrant)
Date: May 15, 1997 By /s/ MARIANNE M. PARRS
---------------------
Marianne M. Parrs
Senior Vice President
and Chief Financial Officer
Date: May 15, 1997 By /s/ ANDREW R. LESSIN
--------------------
Andrew R. Lessin
Vice President, Controller and
Chief Accounting Officer
16
INTERNATIONAL PAPER COMPANY
STATEMENT OF COMPUTATION OF PER SHARE EARNINGS
(Unaudited) (EXHIBIT 11)
(In millions, except per-share amounts)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------------
1997 1996
----------- -----------
<S> <C> <C>
Net earnings $ 34 $ 98
============ ===========
Primary net earnings 34 98
Reduction in minority interest expense, net of taxes, assuming
conversion of preferred securities of subsidiary * 3
------------ -----------
Fully diluted net earnings $ 34 $ 101
============ ===========
Earnings per common share $ .11 $ .36
============ ===========
Primary earnings per share $ .11 $ .36
============ ===========
Fully diluted earnings per share $ .11 $ .36
============ ===========
PRIMARY SHARES
Average shares outstanding 300.6 268.9
Shares assumed to be repurchased using long-term incentive plan deferred
compensation at average market price (0.9) (0.8)
Shares assumed to be issued upon exercise of stock options, net of treasury
buyback at average market price 1.2 2.0
------------ -----------
Primary shares 300.9 270.1
============ ===========
FULLY DILUTED SHARES
Average shares outstanding 300.6 268.9
Shares assumed to be repurchased using long-term incentive plan deferred
compensation at period-end market price (if higher than average market
price) (0.9) (0.7)
Shares assumed to be issued upon exercise of stock options, net of treasury
buyback at period-end market price (if higher than average market price) 1.2 2.1
Shares assumed to be issued upon conversion of
preferred securities of subsidiary * 8.3
------------ -----------
Fully diluted shares 300.9 278.6
============ ===========
</TABLE>
Note: The Company reports earnings per common share as the effect of dilutive
securities is less than 3%.
* Preferred securities of subsidiary were anti-dilutive.
17
INTERNATIONAL PAPER COMPANY
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollar amounts in millions) (Exhibit 12)
(Unaudited)
<TABLE>
<CAPTION>
For the Years Ended December 31, Three Months Ended
March 31,
TITLE 1992 1993 1994 1995 1996 1996 1997
- ------------------------------------------- ---------- ---------- ----------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
A) Earnings before income taxes, minority
interest, extraordinary item and
accounting changes $ 226.0 $ 538.0 $ 715.0 $2,028.0 $ 802.0 $ 336.0 $ 108.0
B) Less: Minority interest expense, net of
taxes (15.0) (36.0) (47.0) (156.0) (169.0) (75.0) (34.0)
C) Add: Fixed charges excluding
capitalized interest 325.3 365.3 412.3 605.9 672.4 153.2 170.4
D) Add: Amortization of previously
capitalized interest 9.9 12.2 12.8 13.0 17.8 3.7 4.8
E) Less: Equity in undistributed
earnings of affiliates (19.1) (25.9) (49.1) (94.5) 6.2 (12.4) (5.8)
-------- --------- ---------- -------- -------- ------- -------
F) Earnings before income taxes,
minority interest, extraordinary
item, accounting changes and fixed charges $ 527.1 $ 853.6 $ 1,044.0 $2,396.4 $1,329.4 $ 405.5 $ 243.4
======== ========= ========== ======== ======== ======= =======
Fixed Charges
G) Interest and amortization of debt costs $ 297.1 $ 334.5 $ 371.0 $ 542.3 $ 582.8 $ 136.3 $ 149.6
H) Interest factor attributable to rentals 28.2 30.8 41.3 53.0 66.0 11.0 14.9
I) Preferred dividends of subsidiary 10.6 23.6 5.9 5.9
J) Capitalized interest 42.0 12.2 18.0 58.0 66.7 15.3 13.8
-------- --------- ---------- -------- -------- ------- -------
K) Total fixed charges $ 367.3 $ 377.5 $ 430.3 $ 663.9 $ 739.1 $ 168.5 $ 184.2
======== ========= ========== ======== ======== ======= =======
L) Ratio of earnings to fixed charges 1.44 2.26 2.43 3.61 1.80 2.41 1.32
======== ========= ========== ======== ======== ======= =======
</TABLE>
18
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