<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
Quarterly Report under Section 13 or 15 (d) of the Securities Exchange Act of
1934 for the Quarterly Period Ended July 1, 1995
---------------------------------------------
Commission File No. 1-2300
-------------------------------------------------------------
Scott Paper Company
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Pennsylvania 23-1065080
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Scott Center, 2650 N. Military Trail, Suite 300, Boca Raton, Florida 33431
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(407) 989-2300
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Scott Plaza, Philadelphia, PA 19113 (610) 522-5000
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
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 August 5, 1995
- ------------------------- ------------------------------
Common Shares, no par value 151,651,544 shares
---------------
<PAGE>
SCOTT PAPER COMPANY
INDEX
PART I. FINANCIAL INFORMATION
<TABLE>
<CAPTION>
<S> <C> <C>
Item 1. Financial Statements:
Consolidated statement of earnings for the three month and
six month periods ended July 1, 1995 and June 25, 1994...................... 3
Consolidated balance sheet at July 1, 1995, December 31, 1994
and June 25, 1994........................................................... 4
Consolidated statement of changes in common shareholders'
equity for the six month periods ended December 31, 1994 and
July 1, 1995................................................................ 5
Consolidated statement of cash flows (condensed) for the
six month periods ended July 1, 1995 and June 25, 1994...................... 6
Notes to Consolidated Financial Statements................................... 7
Item 2. Management's Discussion and Analysis......................................... 9
PART II. OTHER INFORMATION............................................................... 13
Item 1. Legal Proceedings............................................................ 13
Item 6. Exhibits and Reports on Form 8-K............................................. 13
Signatures............................................................................ 14
Exhibit Index......................................................................... 15
</TABLE>
<PAGE>
SCOTT PAPER COMPANY
-------------------
CONSOLIDATED STATEMENT OF EARNINGS
----------------------------------
(Millions, Except on a Per Share Basis)
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
----------------------------- ------------------------------
July 1, June 25, July 1, June 25,
------- -------- ------- --------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Sales $1,057.5 $914.3 $2,060.8 $1,743.0
-------- ------ -------- --------
Costs and expenses
Product costs 707.6 629.3 1,396.4 1,226.1
Marketing and distribution 131.0 129.9 251.0 247.5
Research, administration and general 43.6 56.2 86.4 105.3
Other (42.6) - (50.0) 1.5
-------- ------ -------- --------
839.6 815.4 1,683.8 1,580.4
-------- ------ -------- --------
Income from operations 217.9 98.9 377.0 162.6
Interest expense 23.6 31.0 48.0 60.4
Other income and (expense) 2.2 1.7 9.0 2.3
-------- ------ -------- --------
Income before taxes 196.5 69.6 338.0 104.5
Taxes on income 64.8 25.8 115.0 39.2
-------- ------ -------- --------
Income before share of earnings of
international equity affiliates 131.7 43.8 223.0 65.3
Share of earnings of
international equity affiliates 13.8 6.5 19.4 13.5
-------- ------ -------- --------
Income from continuing operations 145.5 50.3 242.4 78.8
Discontinued operation - printing and
publishing papers:
Loss from operations, net of income tax - (10.1) - (13.4)
benefit -------- ------ -------- --------
Net income $ 145.5 $ 40.2 $ 242.4 $ 65.4
======== ====== ======== ========
Earnings per share:
Income from continuing operations $ .96 $ .34 $ 1.60 $ .53
Loss from discontinued operation - (.07) - (.09)
-------- ------ -------- --------
Net income $ .96 $ .27 $ 1.60 $ .44
======== ====== ======== ========
Dividends per share $ .10 $ .10 $ .20 $ .20
Average shares outstanding 151.4 148.8 151.4 148.5
</TABLE>
The accompanying notes are an integral part of these financial statements
3
<PAGE>
SCOTT PAPER COMPANY
-------------------
CONSOLIDATED BALANCE SHEET
--------------------------
(Millions)
<TABLE>
<CAPTION>
July 1, 1995 December 31, 1994 June 25, 1994
------------ ----------------- -------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Assets
- ------
Current assets
Cash and cash equivalents $ 210.3 $1,114.0 $ 101.7
Receivables 732.5 592.2 569.4
Inventories
Finished products $ 136.5 $ 150.6 $ 214.5
Work in process 74.0 56.0 70.8
Raw materials and other 205.4 415.9 195.3 401.9 216.5 501.8
--------- --------- ---------
Deferred income taxes 114.3 146.6 243.2
Prepaid items and other 72.7 53.8 75.1
-------- -------- --------
1,545.7 2,308.5 1,491.2
Plant assets at cost 4,711.1 4,625.0 7,447.2
Accumulated depreciation (2,166.3) 2,544.8 (2,143.0) 2,482.0 (3,396.9) 4,050.3
--------- --------- ---------
Timber resources 84.4 84.2 111.7
Investments in and advances
to affiliates 168.8 227.3 307.3
Construction funds held by trustees 53.2 79.5 108.2
Notes receivable 220.0 220.0 220.0
Goodwill and other assets 224.9 224.6 275.6
-------- -------- --------
Total $4,841.8 $5,626.1 $6,564.3
======== ======== ========
Liabilities and Shareholders' Equity
- ----------------------------------------
Current liabilities
Payable to suppliers and others $ 755.0 $ 810.8 $ 789.9
Accruals for restructuring programs 55.9 108.6 487.1
Current maturities of long-term debt 48.2 764.8 107.2
Accrued taxes on income 94.9 254.7 37.8
-------- -------- --------
954.0 1,938.9 1,422.0
Long-term debt 1,210.3 1,093.1 2,514.1
Deferred income taxes and
other liabilities 746.1 841.7 985.9
-------- -------- --------
2,910.4 3,873.7 4,922.0
Preferred shares 7.1 7.1 7.1
Common shareholders' equity 1,924.3 1,745.3 1,635.2
-------- -------- --------
Total $4,841.8 $5,626.1 $6,564.3
======== ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
SCOTT PAPER COMPANY
-------------------
CONSOLIDATED STATEMENT OF CHANGES IN COMMON SHAREHOLDERS' EQUITY
----------------------------------------------------------------
(Millions)
(UNAUDITED)
<TABLE>
<CAPTION>
Cumulative
Reinvested Common Treasury Translation
Earnings Shares Shares Adjustment Total
---------- ------ -------- ---------- -----
<S> <C> <C> <C> <C> <C>
Balance at June 25, 1994 $1,393.6 $466.8 $(11.0) $(214.2) $1,635.2
Net Income 144.4 144.4
Dividends
Common shares (29.9) (29.9)
Preferred shares (.2) (.2)
Shares issued for the
exercise of stock options,
stock awards, and
restricted stock grants 39.3 (.2) 39.1
Foreign currency
translation adjustment (45.0) (45.0)
Minimum pension liability charge 1.7 1.7
- ----------------------------------------------------------------------------------------------------------------
Balance at December 31, 1994 1,509.6 506.1 (11.2) (259.2) 1,745.3
Net income 242.4 242.4
Dividends
Common shares (30.2) (30.2)
Preferred shares (.2) (.2)
Shares issued for the
exercise of stock options,
stock awards, and
restricted stock grants 85.2 3.4 88.6
Purchase of shares by the Company (127.5) (127.5)
Foreign currency
translation adjustment 5.9 5.9
- ----------------------------------------------------------------------------------------------------------------
Balance at July 1, 1995 $1,721.6 $591.3 $(135.3) $(253.3) $1,924.3
======== ====== ======= ======= ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
SCOTT PAPER COMPANY
-------------------
CONSOLIDATED STATEMENT OF
-------------------------
CASH FLOWS (Condensed)
----------------------
(Millions)
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
----------------------------------
July 1, June 25,
------- --------
1995 1994
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
- ------------------------------------
Net income $ 242.4 $ 65.4
Adjustments to reconcile net income to
net cash (used for) provided by operating activities:
Share of earnings of affiliates, net of distributions (21.6) (10.7)
Depreciation, cost of timber harvested and amortization 109.9 152.8
Deferred income taxes and other expenses (2.5) 26.5
(Gains) losses on asset sales (58.0) .3
Postretirement benefits, net (funding) cost (70.0) 1.3
Net changes in current assets and current liabilities,
net of effects of businesses divested (430.6) (122.6)
-------- -------
Net cash (used for) provided by operating activities (230.4) 113.0
-------- -------
CASH FLOWS FROM INVESTING ACTIVITIES
- ------------------------------------
Investments in plant assets, timber resources and other assets (140.3) (185.9)
Advances to affiliates, net (1.8) (.3)
Proceeds from asset sales 167.8 14.0
Decrease (increase) in construction funds held by trustees 26.3 (21.1)
Other investing (11.9) 1.4
-------- -------
Net cash provided by (used for) investing activities 40.1 (191.9)
-------- -------
CASH FLOWS FROM FINANCING ACTIVITIES
- ------------------------------------
Dividends paid (30.4) (29.9)
Proceeds from issuance of long-term debt 183.3 449.8
Treasury stock purchases (127.5) --
Repayments of long-term debt (746.2) (387.1)
Proceeds from exercise of stock options 64.3 16.4
Net (decrease) in short-term borrowings (44.5) (1.1)
Other financing (12.7) (3.8)
-------- -------
Net cash (used for) provided by financing activities (713.7) 44.3
-------- -------
Effect of exchange rate changes on cash .3 2.7
-------- -------
NET DECREASE IN CASH AND CASH EQUIVALENTS (903.7) (31.9)
Cash and cash equivalents at beginning of period 1,114.0 133.6
-------- -------
Cash and cash equivalents at end of period $ 210.3 $ 101.7
======== =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ------------------------------------------
1. Statement of Information Furnished
----------------------------------
The accompanying financial statements have been prepared by the Company
pursuant to the rules and regulations of the Securities and Exchange
Commission. In the opinion of management these consolidated financial
statements give effect to all adjustments (consisting of only normal
recurring adjustments) necessary to present fairly the financial position of
Scott Paper Company and its subsidiaries as of July 1, 1995, December 31,
1994 and June 25, 1994, and the earnings and cash flows for the six month
periods ended July 1, 1995 and June 25, 1994.
The Company presumes that users of this Quarterly Report on Form 10-Q have
read or have access to the audited financial statements contained in the
Company's Annual Report on Form 10-K for the year ended December 31, 1994.
Accordingly, footnote disclosures which would substantially duplicate the
disclosures contained therein have been omitted.
2. Supplemental Cash Flow Information
----------------------------------
Cash payments for interest, net of amounts capitalized, were $59.5 million
and $81.1 million during the first six months of 1995 and 1994,
respectively. Cash payments for income taxes were $265.8 million (related
primarily to 1994 asset sales) and $25.8 million during the first six months
of 1995 and 1994, respectively.
3. Restructuring and Productivity Improvement
------------------------------------------
At year end 1994, the Company had accruals for restructuring programs of
$108.6 million recorded in its balance sheet including the 1993 charges for
restructuring and productivity improvement programs. During the first six
months of 1995, $52.7 million was charged to these reserves primarily for
continued severance payments associated with the 1994 work force reductions.
4. Stock Split
-----------
On April 18, 1995, the Board of Directors authorized a two-for-one stock
split of common shares. The additional common shares were issued on May 12,
1995 to shareholders of record on April 28, 1995. Accordingly, earnings per
share, cash dividends per share, and weighted average common shares
outstanding for all periods presented have been restated to reflect the
stock split.
5. Subsequent Event
----------------
On July 17, 1995, the Company and Kimberly-Clark Corporation announced the
signing of a definitive merger agreement that will create a global consumer
products company operating under the Kimberly-Clark name. Under the
agreement, the Company will become a wholly-owned subsidiary of Kimberly-
Clark and Scott shareholders will receive .765 of a share of Kimberly-Clark
common stock for each Scott common share. The ratio is subject to an upward
adjustment to .780 if the record date for Kimberly-Clark's previously
announced spin-off of its Specialty Products business precedes the merger.
The merger agreement has been unanimously approved by the boards of
directors of both companies. The merger is expected to be completed in late
1995 and is subject to certain conditions, including regulatory clearances
and approval by the shareholders of both companies.
7
<PAGE>
The Company will be required to pay Kimberly-Clark a fee of $100 million if
the merger agreement is terminated as a result of:
(a) the determination by the Company's Board of the existence of a
financially superior takeover proposal (as defined in the merger
agreement) from a third party for the Company, if the Company terminates
the merger agreement and enters into a definitive agreement with such
third party; or
(b) the Company's Board not recommending the merger to its shareholders, or
modifying or rescinding its prior recommendation of the merger to its
shareholders after a competing takeover proposal is made for the
Company; or
(c) the failure of the Company's shareholders to approve and adopt the
merger agreement following a competing takeover proposal for the Company
or certain other events, if within seven months after the shareholders
meeting the Company enters into, and thereafter consummates, an
agreement with regard to such takeover proposal (as defined in the
merger agreement), or within such seven month period a third party
commences and thereafter consummates a tender offer for more than 20% of
the Company's outstanding common shares.
The company will also be required to pay Kimberly-Clark a fee of $50 million
if the merger agreement is terminated by Kimberly-Clark following a breach
by the Company of its non-solicitation covenant.
8
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
Results of Operations -
- ------------------------
Second Quarter 1995 Compared with Second Quarter 1994
- -----------------------------------------------------
The Company's second quarter 1995 net income increased 262% to $145.5 million
from $40.2 million for the same period in 1994. Reported earnings for the
second quarter of 1994 included the results of the Company's former printing and
publishing subsidiary, S.D. Warren, which was sold in December 1994 and is
reflected as a discontinued operation. Earnings per share for the second
quarter of 1995 increased 256% to $.96 from $.27 in 1994. Dollar sales in the
second quarter of 1995 increased 16% to $1.06 billion.
Excluding net special items of $.16 per share, primarily from asset sales,
second quarter earnings for 1995 of $.80 per share were 135% higher than the
$.34 earned from continuing operations in the second quarter of 1994.
The quarter represented the Company's third consecutive all-time record
quarterly earnings and reflected significant increases in sales, income from
operations and margins from the company's core tissue business.
Income from operations for the consolidated global tissue business increased 76%
compared to the same period last year. All regions reported increased sales and
significantly higher earnings. The overall operating margin for the tissue
business increased to a new record level of 18.2%, primarily due to higher
selling prices, mix improvements and reduced manufacturing costs resulting from
the 1994 restructuring as well as aggressive execution of strategic cost
reductions. These positive factors more than offset higher pulp prices and
other inflationary pressures. Additional price increases have been announced in
selected markets, which, if successful, would help offset continuing increases
in pulp prices.
Income from operations for the U.S. tissue business increased 67% from the same
quarter in 1994, while sales revenue increased 13% on 3% higher unit volume.
Earnings of the European tissue business increased by almost 125% from 1994.
Sales revenue increased 21% compared with 1994, primarily due to higher selling
prices.
During the quarter, volumes in the U.S. and Europe were somewhat constrained due
to the Company's price increases noted above as well as the successful
implementation of plans in these regions to rationalize nonstrategic brands and
new product initiatives, which, in certain cases, required liquidation by
customers of inventories of the products replaced. In future periods, volume
will be dependent, in part, on the continued favorable market reaction to the
Company's numerous product initiatives, which are being aggressively supported
through media campaigns and other marketing programs.
In the combined Pacific and Latin American area, income from operations
increased 34% over the 1994 level. Sales revenue increased by approximately
17%, with volume increasing 8% above the prior year level.
Scott's share of earnings from its equity affiliates was $13.8 million compared
to $6.5 million in 1994. The Company's Mexican affiliate reported substantially
higher earnings as price increases and cost reductions more than offset the
impacts of a worsening economy. The 1995 results include a charge of $2.5
million for restructuring of Scott Paper Limited, the Company's Canadian
affiliate.
In addition to the Canadian restructuring, the special items recorded in the
second quarter of 1995 include gains on assets sales, offset by a provision for
the cost of relocating the worldwide headquarters to Boca Raton, Florida. A net
gain of $24.2 million, or $.16 per share, resulted from these actions.
9
<PAGE>
Results of Operations
- ---------------------
Six Months 1995 Compared With Six Months 1994
- ---------------------------------------------
For the first six months of 1995, net income increased 271% to $242.4 million
from $65.4 million of reported earnings for the same period in 1994. Earnings
per share for the first six months of 1995 increased 264% to $1.60 compared to
$.44 for the prior year period. Dollar sales for the first six months of 1995
increased 18.2% to $2.06 billion.
Excluding net special items of $.16 per share, primarily from asset sales,
earnings for the first six months of 1995 of $1.44 were 172% higher than the
$.53 earned from continuing operations for the first six months of 1994.
Income from operations for the consolidated global tissue business was up 96.2%
in the first six months of 1995. All regions reported higher earnings, with
higher selling prices and reduced manufacturing costs resulting from the 1994
restructuring more than offsetting higher pulp prices and other inflationary
pressures.
Income from operations for the U.S. tissue business increased 92% in the first
six months of 1995 versus the same period in 1994, due to higher selling prices
and increased volumes as well as reduced manufacturing costs. Sales revenue was
up 15% with volume increasing 5%.
Outside the U.S., income from operations for the European tissue business
increased 135%. Sales revenue increased more than 20%, primarily due to higher
selling prices. In the combined Pacific and Latin America area, income from
operations increased approximately 44%. Sales revenue increased approximately
19%, with volumes increasing approximately 11%.
Scott's share of earnings from its equity affiliates also increased in the first
six months of 1995 compared to the prior year, primarily due to higher selling
prices and cost reductions. Results for 1995 included charges for the
restructuring of the Company's Canadian affiliate and a charge related to the
impact of the devaluation of the Mexican peso.
Financial Condition
- -------------------
Liquidity and Capital Resources
- -------------------------------
Cash used for operations during the first six months of 1995 was $230.4 million
compared with cash provided by operations of $113.0 million in the first six
months of 1994. The cash used by operations was due to higher net income being
more than offset by increased postretirement benefits funding and higher working
capital. The increase in working capital was due to a reduction in accrued
taxes on income due to tax payments of approximately $200 million made related
to the 1994 sales of S.D. Warren and other non-core assets as well as higher
receivables balances due to increased sales and decreases in payables to
suppliers and others. Accruals for restructuring programs also decreased
primarily due to the continuation of severance payments related to the work
force reductions made as part of the 1994 restructuring program.
Capital expenditures were $140.3 million during the first six months of 1995
compared with $185.9 million during the same period in 1994. During 1995 and
1996, capital spending is projected at $550-650 million on a variety of projects
including continued spending on the tissue mill in Owensboro, Kentucky, the new
converting facility in Arizona, and other projects designed to sustain existing
operations and reduce costs. The Company expects to finance this spending
primarily from internally generated funds.
10
<PAGE>
During the second quarter of 1995, the Company completed the sale of its 20
percent interest in a pulp mill and timberland acreage in Chile, its 50 percent
interest in timberland and other property in southeastern Georgia, and certain
mineral interests. During the first quarter of 1995, the Company also completed
the sale of its foodservice businesses in the U.S. and U.K. and its remaining 1%
interest in Scott Health Care.
As a result of the definitive merger agreement between Scott and Kimberly-Clark
announced on July 17, 1995, the Company has suspended its efforts to sell its
global pulp operations and timberlands. In addition, the letter of intent signed
by the Company for the sale of the Chester, Pa. cogeneration facility has
expired without an agreement to sell, and the Company has decided to terminate
further discussions on the sale.
Total debt at July 1, 1995 was $1,258.5 million compared with $2,621.3 million
at June 25, 1994 and $1,857.9 million at December 31, 1994. During the first
six months of 1995, the Company's financing activities included the retirement
of $746.2 million in debt, primarily related to the Company's debt retirement
program. In addition, as part of the Company's share repurchase plan, which as
previously announced has been discontinued, approximately 3 million shares were
repurchased at a cost of $127.5 million.
To maintain financing flexibility, the Company maintains two long-term revolving
credit agreements totaling $775 million, all unused at July 1, 1995.
The Company's debt to equity ratios at July 1, 1995, December 31, 1994 and June
25, 1994 are set forth below:
<TABLE>
<CAPTION>
July 1, 1995 December 31, 1994 June 25, 1994
------------ ----------------- -------------
<S> <C> <C> <C>
Debt to equity 65% 106% 160%
</TABLE>
July 1, 1995 Compared with June 25, 1994
- ----------------------------------------
Total assets of $4,841.8 million at July 1, 1995 decreased $1,722.5 million or
26% compared with total assets of $6,564.3 million at June 25, 1994. The
decrease was primarily due to the 1994 sales of S.D. Warren and other non-core
businesses.
Total liabilities of $2,910.4 million at July 1, 1995 decreased $2,011.6 million
or 41% compared with total liabilities of $4,922.0 million at June 25, 1994.
The decrease was primarily due to the 1994 sales of S.D. Warren and other non-
core assets, and the use of asset sale proceeds to reduce the Company's debt.
Common shareholders' equity at July 1, 1995 of $1,924.3 million increased $289.1
million compared with the June 25, 1994 balance of $1,635.2 million due
primarily to net income, foreign currency translation adjustments and the
issuance of shares related to the exercise of stock options, which were
partially offset by the share repurchase program and dividends paid.
July 1, 1995 Compared with December 31, 1994
- --------------------------------------------
Total assets at July 1, 1995 of $4,841.8 million decreased $784.3 million or 14%
compared with total assets of $5,626.1 million at December 31, 1994. This was
primarily due to the use of cash and cash equivalents to retire debt and income
tax payments made related to the 1994 sale of S.D. Warren and other non-core
assets, more than offsetting increases in accounts receivable due to higher
sales and increases in net plant assets due to capital spending.
Total liabilities of $2,910.4 million at July 1, 1995 decreased $963.3 million
or 24.9% compared with total liabilities of $3,873.7 million at December 31,
1994. The decrease was primarily due to significantly lower debt levels and
reductions in balances of accrued taxes on income due to tax payments.
11
<PAGE>
Common shareholders' equity at July 1, 1995 of $1,924.3 million was $179.0
million higher than the balance at December 31, 1994 of $1,745.3 million due
primarily to net income, foreign currency translation adjustments and the
issuance of shares related to the exercise of stock options, which were
partially offset by the Company's previously announced share repurchase program
and dividends.
Subsequent Event
- ----------------
On July 17, 1995, the Company and Kimberly-Clark Corporation announced the
signing of a definitive merger agreement. Under the agreement, Scott
shareholders will receive .765 of a share of Kimberly-Clark common stock for
each Scott common share. The ratio is subject to an upward adjustment of .015
shares, if the record date for Kimberly-Clark's previously announced spin-off of
its Specialty Products business precedes the merger. See further discussion of
the merger agreement at Note 5 of the Consolidated Financial Statements.
12
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
-----------------
In Item 3 of the Company's Form 10-K for 1994, it was stated that the
federal actions relating to breast implants had been consolidated in the
Northern District of Alabama for pretrial purposes. As reported in Item 1 of the
Company's Form 10-Q for the first quarter of 1995, on April 25, 1995, the Court
granted the Company's motion for summary judgment and dismissed with prejudice
all claims pending against the Company and the purchaser of the Company's former
Foam Division. The plaintiffs have appealed this decision. The Company continues
to believe its defenses to these claims are meritorious and that the final
results of these claims, while they cannot be predicted with certainty, will not
have a material adverse effect on the Company's financial condition.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits:
<TABLE>
<CAPTION>
Number Description
- ------ -----------
<S> <C>
10(a) Scott Paper Company Non-Employee Directors' Compensation Plan
(b) Reports on Form 8-K:
Form 8-K dated April 19, 1995, reporting under Item 5 a two-for-
one split of the Company's common shares.
</TABLE>
13
<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.
Scott Paper Company
---------------------------------------
(Registrant)
DATE: August 11, 1995 /s/ Edward B. Betz
------------------- ---------------------------------------
Edward B. Betz
Vice President & Controller
(Authorized Signer and
Chief Accounting Officer)
14
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Number Description
- ------ -----------
<S> <C>
10(a) Scott Paper Company Non-Employee Directors' Compensation Plan,
incorporated by reference to Exhibit A the Company's Proxy Statement
dated March 10, 1995.
</TABLE>
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-30-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUL-01-1995
<EXCHANGE-RATE> 1
<CASH> 210
<SECURITIES> 0
<RECEIVABLES> 656
<ALLOWANCES> 31
<INVENTORY> 416
<CURRENT-ASSETS> 1,546
<PP&E> 4,711
<DEPRECIATION> 2,166
<TOTAL-ASSETS> 4,842
<CURRENT-LIABILITIES> 954
<BONDS> 1,210
<COMMON> 591
0
7
<OTHER-SE> 1,333
<TOTAL-LIABILITY-AND-EQUITY> 4,842
<SALES> 2,061
<TOTAL-REVENUES> 2,061
<CGS> 1,396
<TOTAL-COSTS> 1,396
<OTHER-EXPENSES> (50)
<LOSS-PROVISION> 33
<INTEREST-EXPENSE> 48
<INCOME-PRETAX> 338
<INCOME-TAX> 115
<INCOME-CONTINUING> 242
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 242
<EPS-PRIMARY> 1.60
<EPS-DILUTED> 1.60
</TABLE>
