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Previous: INTERNATIONAL FLAVORS & FRAGRANCES INC, 10-Q, 1999-05-14 |
Next: INTERPUBLIC GROUP OF COMPANIES INC, 10-Q, 1999-05-14 |
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
May 13, 1999
------------------------------------------------------
Date of Report (Date of Earliest Event Reported)
INTERNATIONAL PAPER COMPANY
(Exact name of Registrant as specified in its charter)
New York 1-3157 13-0872805
- -------------- -------------- ----------------------
(State of (Commission (IRS Employer
Incorporation) File) Identification Number)
Two Manhattanville Road, Purchase, NY 10577
-------------------------------------------
(Address of Principal executive offices)
914-397-1500
------------
(Telephone No.)
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
N/A
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
The Company announced its merger with Union Camp Corporation
which was approved by shareholders at Special Meetings held on
April 30, 1999. Union Camp shareowners will receive 1.4852
International Paper common shares for each Union Camp share
held. The exchange ratio was determined by taking the average
price per International Paper common share, which was calculated
based on market prices on ten randomly selected days during a
20-trading day period prior to the merger. The total value of
the merger is estimated at $7.9 billion including assumption of
debt.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
N/A
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
N/A
ITEM 5. OTHER EVENTS
N/A
ITEM 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS
N/A
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements:
The financial statements of Union Camp Corporation filed with
the Securities and Exchange Commission on March 31, 1999 on Form
10K are hereby incorporated by reference.
<PAGE>
(b) Pro Forma Financial Information:
The following selected unaudited pro forma combined financial
data gives effect to the merger. The unaudited pro forma
combined statement of earnings data for the three years ended
December 31, 1998 was prepared based upon International Paper's
audited consolidated financial statements for the three years
ended December 31, 1998 and Union Camp's audited consolidated
financial statements for the three years ended December 31,
1998, as if the merger had occurred at the beginning of each of
the three years. The selected unaudited pro forma combined
balance sheet data was prepared based upon the audited balance
sheet data of International Paper at December 31, 1998 and Union
Camp at December 31, 1998, giving effect to the merger. The pro
forma adjustments are based upon the "pooling of interests"
method of accounting, available information and particular
assumptions that International Paper and Union Camp believe to
be reasonable.
The pro forma condensed consolidated financial statements and
accompanying notes should be read in conjunction with the
historical financial statements of International Paper and Union
Camp, and the related notes thereto, that are incorporated by
reference or included elsewhere in this document.
The pro forma condensed consolidated financial statements are
provided for informational purposes only in response to SEC
requirements and do not purport to represent what International
Paper's financial position or results of operations would
actually have been if the merger had in fact occurred at such
dates or to project International Paper's financial position or
results of operations for any future date or period.
<PAGE>
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 1998
(IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
IP UCC PRO FORMA PRO FORMA
(HISTORICAL) (HISTORICAL) ADJUSTMENTS COMBINED
----------- ------------ ----------- --------
<S> <C> <C> <C> <C>
NET SALES $19,541 $4,502 $ (65)(a)(b) $23,978
------- ------ ------ -------
COSTS AND EXPENSES
Cost of products sold 14,761 3,479 (351)(a)(b)(d) 17,889
Selling and administrative expenses 1,532 500 2,032
Depreciation and amortization 1,186 315 (14)(b) 1,487
Distribution expenses 865 252 (b) 1,117
Taxes other than payroll and income taxes 181 50 (b) 231
Oil and gas impairment charges 111 111
Equity losses from invesment in Scitex 15 15
Restructuring and other charges 105 40 145
------- ------ ------ -------
TOTAL COSTS AND EXPENSES 18,756 4,334 (63) 23,027
Reversals of reserves no longer required 83 83
Gain on sale of business 20 20
------- ------ ------ -------
EARNINGS BEFORE INTEREST, INCOME TAXES AND
MINORITY INTEREST 888 168 (2) 1,054
Interest expense, net 496 118 614
------- ------ ------ -------
EARNINGS BEFORE INCOME TAXES AND
MINORITY INTEREST 392 50 (2) 440
Income tax provision 80 20 100
Minority interest expense, net of taxes 76 11 87
------- ------ ------ -------
NET EARNINGS $236 $19 $(2) $253
======= ====== ====== =======
EARNINGS PER COMMON SHARE $0.77 $0.62
======= =======
EARNINGS PER COMMON SHARE - ASSUMING DILUTION $0.77 $0.61
======= =======
AVERAGE SHARES OF COMMON STOCK OUTSTANDING 305.9 411.0
======= =======
AVERAGE SHARES OF COMMON STOCK OUTSTANDING
- ASSUMING DILUTION 306.3 416.6
======= =======
</TABLE>
The accompanying notes are an integral part of these Unaudited Pro Forma
Condensed Combined Financial Statements.
<PAGE>
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 1997
(IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
IP UCC PRO FORMA PRO FORMA
(HISTORICAL) (HISTORICAL) ADJUSTMENTS COMBINED
---------- ------------ ------------ --------
<S> <C> <C> <C> <C>
NET SALES $20,096 $4,477 $ (5)(a)(b) $24,568
------- ------ ------ -------
COSTS AND EXPENSES
Cost of products sold 14,974 3,400 (313)(a)(b)(d) 18,061
Selling and administrative expenses 1,581 509 2,090
Depreciation and amortization 1,258 311 (10)(b) 1,559
Distribution expenses 933 264 (b) 1,197
Taxes other than payroll and income taxes 205 50 (b) 255
Provision for legal reserve 150 150
Equity earnings from invesment in Scitex (1) (1)
Restructuring and other charges 660 660
------- ------ ------ -------
TOTAL COSTS AND EXPENSES 19,760 4,220 (9) 23,971
Gain on sale of business 170 170
------- ------ ------ -------
EARNINGS BEFORE INTEREST, INCOME TAXES AND
MINORITY INTEREST 506 257 4 767
Interest expense, net 490 117 607
Other (income) expense, net (4) 4 (b)
------- ------ ------ -------
EARNINGS BEFORE INCOME TAXES AND
MINORITY INTEREST 16 144 160
Income tax provision 38 52 90
Minority interest expense, net of taxes 129 11 140
------- ------ ------ -------
NET EARNINGS (LOSS) $(151) $81 $0 $(70)
======= ====== ====== =======
EARNINGS (LOSS) PER COMMON SHARE $(0.50) $(0.17)
======= =======
EARNINGS (LOSS) PER COMMON SHARE - ASSUMING DILUTION $(0.50) $(0.17)
======= =======
AVERAGE SHARES OF COMMON STOCK OUTSTANDING 301.6 406.7
======= =======
AVERAGE SHARES OF COMMON STOCK OUTSTANDING
- ASSUMING DILUTION 300.7 411.0
======= =======
</TABLE>
The accompanying notes are an integral part of these Unaudited Pro Forma
Condensed Combined Financial Statements.
<PAGE>
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 1996
(IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
IP UCC PRO FORMA PRO FORMA
(HISTORICAL) (HISTORICAL) ADJUSTMENTS COMBINED
---------- ------------ ------------ --------
<S> <C> <C> <C> <C>
NET SALES $20,143 $4,013 $ 36 (a)(b) $24,192
------- ------ ------ -------
COSTS AND EXPENSES
Cost of products sold 14,883 2,972 (237)(a)(b)(d) 17,618
Selling and administrative expenses 1,509 451 1,960
Depreciation and amortization 1,194 299 (9)(b) 1,484
Distribution expenses 925 222 (b) 1,147
Taxes other than payroll and income taxes 194 49 (b) 243
Equity losses from invesment in Scitex 28 28
Restructuring and other charges 670 39 709
------- ------ ------ -------
TOTAL COSTS AND EXPENSES 19,403 3,761 25 23,189
Gain on sale of business 592 592
------- ------ ------ -------
EARNINGS BEFORE INTEREST, INCOME TAXES AND
MINORITY INTEREST 1,332 252 11 1,595
Interest expense, net 530 112 642
Other (income) expense, net (11) 11 (b)
------- ------ ------ -------
EARNINGS BEFORE INCOME TAXES AND
MINORITY INTEREST 802 151 953
Income tax provision 330 55 385
Minority interest expense, net of taxes 169 11 180
------- ------ ------ -------
NET EARNINGS (LOSS) $303 $85 $0 $388
======= ====== ====== =======
EARNINGS (LOSS) PER COMMON SHARE $1.04 $0.98
======= =======
EARNINGS (LOSS) PER COMMON SHARE - ASSUMING DILUTION $1.04 $0.96
======= =======
AVERAGE SHARES OF COMMON STOCK OUTSTANDING 292.1 397.2
======= =======
AVERAGE SHARES OF COMMON STOCK OUTSTANDING
- ASSUMING DILUTION 292.6 402.9
======= =======
</TABLE>
The accompanying notes are an integral part of these Unaudited Pro Forma
Condensed Combined Financial Statements.
<PAGE>
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
AT DECEMBER 31, 1998
(IN MILLIONS)
<TABLE>
<CAPTION>
IP UCC PRO FORMA PRO FORMA
(HISTORICAL) (HISTORICAL) ADJUSTMENTS COMBINED
---------- ------------ ----------- --------
<S> <C> <C> <C> <C>
Assets
Current Assets
Cash and temporary investments $ 477 $ 56 $ $ 533
Accounts and notes receivable, net 2,469 557 (8)(c) 3,018
Inventories 2,719 496 (2)(d) 3,213
Other current assets 345 77 422
------- ------ ------- -------
Total Current Assets 6,010 1,186 (10) 7,186
Plants, Properties and Equipment, Net 12,079 3,306 15,385
Forestlands 2,795 376 3,171
Investments 1,075 73 (e) 1,148
Goodwill 2,625 74 (e) 2,699
Deferred Charges and Other Assets 1,772 308 (147)(e) 1,933
------- ------ ------- -------
Total Assets $26,356 $5,176 $(10) $31,522
======= ====== ======= =======
Liabilities and Common Shareholders' Equity
Current Liabilities
Notes payable and current maturities of long-term debt $ 1,074 $ 344 $ 1,418
Accounts payable and accrued liabilities 2,562 545 (8)(c) 3,149
50 (g)
------- ------ ------- -------
Total Current Liabilities 3,636 889 42 4,567
------- ------ ------- -------
Long-Term Debt 6,407 1,290 7,697
Deferred Income Taxes 2,860 742 3,602
Other Liabilities 1,138 312 (113)(e) 1,337
Minority Interest 1,608 113 (e) 1,721
International Paper - Obligated Mandatorily Redeemable Preferred
Securities of Subsidiaries Holding International Paper Debentures 1,805 1,805
Common Shareholders' Equity
Common stock 308 69 34 (f) 411
Paid-in capital 3,877 53 (34)(f) 3,896
Retained earnings 5,116 1,839 (2)(d) 6,903
(50)(g)
Accumulated other comprehensive income (loss) (375) (18) (393)
------- ------ ------- -------
8,926 1,943 (52) 10,817
Less: Common stock held in treasury, at cost 24 24
------- ------ ------- -------
Total Common Shareholders' Equity 8,902 1,943 (52) 10,793
------- ------ ------- -------
Total Liabilities and Common Shareholders' Equity $26,356 $5,176 $(10) $31,522
======= ====== ======= =======
</TABLE>
The accompanying notes are an integral part of these Unaudited Pro Forma
Condensed Combined Financial Statements.
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONDENSED
COMBINED FINANCIAL STATEMENTS:
The following is a summary of reclassifications and adjustments
reflected in the Unaudited Pro Forma Condensed Combined Financial
Statements.
(a) Represents the elimination of intercompany transactions between
Union Camp and International Paper.
(b) Represents the reclassification of items in Union Camp's financial
statements to conform with International Paper's financial reporting
presentation, including the reclassifications of cost of timber
harvested and other (income) expense, net, to cost of products sold;
distribution expenses and taxes other than payroll and income taxes to
separate cost and expense line items; and sales with containerboard
trading partners from an offset in costs of goods sold to net sales.
(c) Represents the elimination of intercompany balances between Union
Camp and International Paper.
(d) Represents the elimination of intercompany profit on sales between
International Paper and Union Camp. The intercompany profit elimination
in each year was approximated by multiplying the change in intercompany
inventory balances on hand at both Union Camp and International Paper by
the average margin on such sales.
(e) Represents the reclassification of items in Union Camp's financial
statements to conform with International Paper's financial reporting
presentation, including the reclassification of investments, goodwill
and minority interest to separate balance sheet line items.
(f) Represents the balance sheet effect of the exchange of Union Camp
common shares for International Paper common shares.
(g) The companies expect merger-related costs to be just under $50
million. The combined Company will charge these costs to earnings in the
period in which the merger is consummated. The companies have reflected
these costs in the December 31, 1998 Unaudited Pro Forma Condensed
Combined Balance Sheet.
(c) Exhibits
N/A
<PAGE>
ITEM 8. CHANGES IN FISCAL YEAR
N/A
SIGNATURE
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 13, 1999 /s/ CAROL M. SAMALIN
------------------------------
Purchase, NY Carol M. Samalin
Assistant Secretary
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