0000051434-14-000024.txt : 20140725 0000051434-14-000024.hdr.sgml : 20140725 20140725095607 ACCESSION NUMBER: 0000051434-14-000024 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20140701 ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20140725 DATE AS OF CHANGE: 20140725 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTERNATIONAL PAPER CO /NEW/ CENTRAL INDEX KEY: 0000051434 STANDARD INDUSTRIAL CLASSIFICATION: PAPER MILLS [2621] IRS NUMBER: 130872805 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-03157 FILM NUMBER: 14992996 BUSINESS ADDRESS: STREET 1: 6400 POPLAR AVENUE CITY: MEMPHIS STATE: TN ZIP: 38197 BUSINESS PHONE: 901-419-7000 MAIL ADDRESS: STREET 1: 6400 POPLAR AVENUE CITY: MEMPHIS STATE: TN ZIP: 38197 FORMER COMPANY: FORMER CONFORMED NAME: INTERNATIONAL PAPER & POWER CORP DATE OF NAME CHANGE: 19710527 8-K/A 1 ip8-ka712014.htm 8-K/A IP 8-K/A 7.1.2014


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
  
FORM 8-K/A
 (Amendment No. 1)
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): July 1, 2014 
International Paper Company
(Exact name of registrant as specified in its charter) 
 
Commission file number 1-3157 
New York
 
13-0872805
(State or other jurisdiction
of incorporation)
 
(IRS Employer
Identification No.)
 
 
 
6400 Poplar Avenue, Memphis, Tennessee
 
38197
(Address of principal executive offices)
 
(ZIP Code)
Registrant’s telephone number, including area code: (901) 419-7000 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))




Item 2.01     Completion of Acquisition and Disposition of Assets.
Explanatory Note:
This Amendment to our Current Report on Form 8-K filed on July 7, 2014 is being filed solely for the purpose of correcting the intercompany sales pro forma adjustment in the unaudited pro forma condensed consolidated statement of operations for the three months ended March 31, 2014 and for the years ended December 31, 2013, 2012 and 2011 and the accompanying notes to the unaudited pro forma condensed consolidated financial statements. All other information in the original 8-K remains unchanged.

Item 9.01    Financial Statements and Exhibits.

(b) Pro Forma Financial Information.

The following unaudited pro forma condensed financial information of International Paper Company is filed as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference:

•
Unaudited pro forma condensed consolidated balance sheet as of March 31, 2014,
•
Unaudited pro forma condensed consolidated statement of operations for the three months ended March 31, 2014,
•
Unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2013,
•
Unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2012,
•
Unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2011, and
•
Notes to unaudited pro forma condensed consolidated financial information.

(d) Exhibits.

Exhibit Number
 
Description
Exhibit 99.1
 
Unaudited pro forma condensed consolidated financial information.




2


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 hereunto duly authorized.
INTERNATIONAL PAPER COMPANY

By: /s/ Sharon R. Ryan            
Name:     Sharon R. Ryan
Title:    Senior Vice President, General Counsel
and Corporate Secretary    

Date: July 25, 2014                        
 


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EXHIBIT INDEX

Exhibit Number
 
Description
Exhibit 99.1
 
Unaudited pro forma condensed consolidated financial information.


4
 EX-99.1 2 exhibit9911.htm EXHIBIT 99.1 Exhibit 99.1 (1)


Exhibit 99.1


UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

On July 1, 2014, International Paper Company ("International Paper" or the "Company") completed the previously announced spinoff (the "Spinoff") of its distribution solutions business, xpdex. Immediately following the Spinoff of the xpedx business to International Paper shareholders, UWW Holdings, Inc., the parent company of Unisource Worldwide, Inc., merged with and into the xpedx business to form a new, publicly-traded company, Veritiv Corporation ("Veritiv"), listed on the New York Stock Exchange. After the Spinoff and merger, Veritiv owns and operates the combined distribution solutions businesses of xpedx and Unisource.

The historical financial information for International Paper set forth below has been derived from the historical audited consolidated financial statements of International Paper included in the Annual Reports on Form 10-K for the years ended December 31, 2013, 2012 and 2011 and the unaudited consolidated financial statements included in the Quarterly Report on Form10-Q for the quarter ended March 31, 2014. The unaudited pro forma condensed consolidated balance sheet as of March 31, 2014 was prepared as if the Spinoff occurred on that date and the adjustments give effect to events that are directly attributable to the transaction. The unaudited pro forma condensed consolidated statements of operations were prepared as if the Spinoff occurred on January 1, 2011.

The pro forma statements do not purport to represent what the results of operations or financial position of International Paper would have been had the transaction occurred on the dates noted above, or to project the results of operations or the financial position of International Paper for any future periods. In the opinion of management, all adjustments necessary to present fairly the unaudited pro forma condensed consolidated financial information have been made. Beginning in the third quarter of 2014, historical financial results for xpedx for periods prior to the Spinoff will be reflected in International Paper's consolidated financial statements as discontinued operations.

The unaudited pro forma condensed consolidated financial statements should be read in conjunction with the historical financial statements of the Company included in its 2013, 2012 and 2011 Annual Reports on Form 10-K and its Quarterly Report on Form 10-Q for the three months ended March 31, 2014.

The As Reported column in the unaudited pro forma condensed consolidated balance sheet and in the unaudited pro forma condensed consolidated statements of operations reflects International Paper's historical financial statements for the periods presented and does not reflect any adjustments related to the Spinoff and related events.

The information in the Disposition of xpedx column in the unaudited pro forma condensed consolidated statements of operations was derived from International Paper's accounting records and was adjusted to exclude certain previously allocated corporate overhead costs. The Disposition of xpedx column also includes the goodwill impairment charge associated with the xpedx reporting unit that was previously included in the Company's historical financial results for the year ended December 31, 2013. The information in the Disposition of xpedx column in the unaudited pro forma condensed consolidated balance sheet was derived from International Paper's accounting records and represents the net assets of xpedx contributed in the Spinoff as defined in the Contribution and Distribution Agreement.

The Pro Forma Adjustments column in the unaudited pro forma condensed consolidated financial statements reflects additional pro forma adjustments which are further described in the accompanying notes.














1



INTERNATIONAL PAPER COMPANY
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
BALANCE SHEET
(In millions)

 
 
As of March 31, 2014
 
 
As Reported
 
Disposition of xpedx
 
Pro Forma Adjustments
 
Pro Forma
ASSETS
 
 
 
 
 
 
 
 
Current assets
 
 
 
 
 
 
 
 
Cash and temporary investments
 
$
1,341

 
$
—

 
$
400

(a)
$
1,741

Accounts and notes receivable, net
 
3,933

 
(644
)
 
30

(a)
3,319

Inventories
 
2,809

 
(316
)
 
—

 
2,493

Other current assets
 
650

 
(32
)
 
—

 
618

Plants, properties and equipment, net
 
13,194

 
(77
)
 
—

 
13,117

Forestlands
 
578

 
—

 
—

 
578

Investments
 
659

 
—

 
—

 
659

Financial assets of special purpose entities
 
2,132

 
—

 
—

 
2,132

Goodwill
 
3,996

 
—

 
—

 
3,996

Deferred charges and other assets
 
1,403

 
(36
)
 
—

 
1,367

TOTAL ASSETS
 
$
30,695

 
$
(1,105
)
 
$
430

 
$
30,020

LIABILITIES AND EQUITY
 
 
 
 
 
 
 
 
Current liabilities
 
 
 
 
 
 
 
 
Notes payable and current maturities of long-term debt
 
$
561

 
$
—

 
$
—

 
$
561

Accounts payable
 
2,954

 
(331
)
 
5

(a)
2,628

Accrued payroll and benefits
 
411

 
(45
)
 
—

 
366

Other accrued liabilities
 
1,102

 
(34
)
 
—

 
1,068

Long-term debt
 
8,867

 
—

 
—

 
8,867

Nonrecourse financial liabilities of special purpose entities
 
2,045

 
—

 
—

 
2,045

Deferred income taxes
 
3,540

 
(17
)
 
—

 
3,523

Pension benefit obligation
 
2,319

 
—

 
—

 
2,319

Postretirement and postemployment benefit obligation
 
408

 
—

 
—

 
408

Other liabilities
 
574

 
(13
)
 
—

 
561

TOTAL LIABILITIES
 
22,781

 
(440
)
 
5

 
22,346

Redeemable Noncontrolling Interest
 
168

 
—

 
—

 
168

TOTAL EQUITY
 
7,746

 
(665
)
 
425

 
7,506

TOTAL LIABILITIES AND EQUITY
 
$
30,695

 
$
(1,105
)
 
$
430

 
$
30,020



See accompanying notes.










2




INTERNATIONAL PAPER COMPANY
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
(In millions, except per share data)

 
 
Three Months Ended March 31, 2014
 
 
As Reported (a)
 
Disposition of xpedx (b)
 
Pro Forma Adjustments
 
Pro Forma
NET SALES
 
$
7,014

 
$
1,290

 
$
142

(a)
$
5,866

COST AND EXPENSES
 
 
 
 
 
 
 
 
Cost of products sold
 
5,175

 
1,153

 
142

(a)
4,164

Selling and administrative expenses
 
528

 
88

 
—

 
440

Depreciation, amortization and cost of timber harvested
 
352

 
5

 
—

 
347

Distribution expenses
 
400

 
35

 
—

 
365

Taxes other than payroll and income taxes
 
47

 
1

 
—

 
46

Restructuring and other charges
 
517

 
2

 
(16
)
(b)
499

Interest expense, net
 
142

 
—

 
—

 
142

EARNINGS (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND EQUITY EARNINGS
 
(147
)
 
6

 
16

 
(137
)
Income tax provision (benefit)
 
(83
)
 
2

 
6

 
(79
)
Equity earnings (losses), net of taxes
 
(33
)
 
—

 
—

 
(33
)
NET EARNINGS (LOSS) FROM CONTINUING OPERATIONS
 
(97
)
 
4

 
10

 
(91
)
Less: Net earnings (loss) attributable to noncontrolling interests
 
(4
)
 
—

 
—

 
(4
)
NET EARNINGS (LOSS) FROM CONTINUING OPERATIONS ATTRIBUTABLE TO INTERNATIONAL PAPER COMPANY
 
$
(93
)
 
$
4

 
$
10

 
$
(87
)
BASIC EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO INTERNATIONAL PAPER COMPANY COMMON SHAREHOLDERS
 
 
 
 
 
 
 
 
Earnings (loss) from continuing operations
 
$
(0.21
)
 
 
 
 
 
$
(0.20
)
Average common shares outstanding
 
435.6

 
 
 
 
 
435.6

DILUTED EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO INTERNATIONAL PAPER COMPANY COMMON SHAREHOLDERS
 
 
 
 
 
 
 
 
Earnings (loss) from continuing operations
 
$
(0.21
)
 
 
 
 
 
$
(0.20
)
Average common shares outstanding - assuming dilution
 
435.6

 
 
 
 
 
435.6


See accompanying notes.










3




INTERNATIONAL PAPER COMPANY
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
(In millions, except per share data)
 
 
Year Ended December 31, 2013
 
 
As Reported
 
Disposition of xpedx
 
Pro Forma Adjustments
 
Pro Forma
NET SALES
 
$
29,080

 
$
5,597

 
$
604

(a)
$
24,087

COST AND EXPENSES
 
 
 
 
 
 
 
 
Cost of products sold
 
21,223

 
5,026

 
604

(a)
16,801

Selling and administrative expenses
 
2,205

 
324

 
—

 
1,881

Depreciation, amortization and cost of timber harvested
 
1,547

 
16

 
—

 
1,531

Distribution expenses
 
1,732

 
149

 
—

 
1,583

Taxes other than payroll and income taxes
 
185

 
7

 
—

 
178

Restructuring and other charges
 
210

 
32

 
(23
)
(b)
155

Impairment of goodwill and other intangibles
 
527

 
400

 
—

 
127

Net (gains) losses on sales and impairments of business
 
3

 
—

 
—

 
3

Net bargain purchase gain on acquisition of business
 
(13
)
 
—

 
—

 
(13
)
Interest expense, net
 
612

 
—

 
—

 
612

EARNINGS (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND EQUITY EARNINGS
 
849

 
(357
)
 
23

 
1,229

Income tax provision (benefit)
 
(523
)
 
(17
)
(c)
9

 
(497
)
Equity earnings (losses), net of taxes
 
(39
)
 
—

 
—

 
(39
)
NET EARNINGS (LOSS) FROM CONTINUING OPERATIONS
 
1,333

 
(340
)
 
14

 
1,687

Less: Net earnings (loss) attributable to noncontrolling interests
 
(17
)
 
—

 
—

 
(17
)
NET EARNINGS (LOSS) FROM CONTINUING OPERATIONS ATTRIBUTABLE TO INTERNATIONAL PAPER COMPANY
 
$
1,350

 
$
(340
)
 
$
14

 
$
1,704

BASIC EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO INTERNATIONAL PAPER COMPANY COMMON SHAREHOLDERS
 
 
 
 
 
 
 
 
Earnings (loss) from continuing operations
 
$
3.05

 
 
 
 
 
$
3.84

Average common shares outstanding
 
443.3

 
 
 
 
 
443.3

DILUTED EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO INTERNATIONAL PAPER COMPANY COMMON SHAREHOLDERS
 
 
 
 
 
 
 
 
Earnings (loss) from continuing operations
 
$
3.01

 
 
 
 
 
$
3.80

Average common shares outstanding - assuming dilution
 
448.1

 
 
 
 
 
448.1


See accompanying notes.


4




INTERNATIONAL PAPER COMPANY
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
(In millions, except per share data)

 
 
Year Ended December 31, 2012
 
 
As Reported
 
Disposition of xpedx
 
Pro Forma Adjustments
 
Pro Forma
NET SALES
 
$
27,833

 
$
5,981

 
$
639

(a)
$
22,491

COST AND EXPENSES
 
 
 
 
 
 
 
 
Cost of products sold
 
20,587

 
5,376

 
639

(a)
15,850

Selling and administrative expenses
 
2,092

 
342

 
—

 
1,750

Depreciation, amortization and cost of timber harvested
 
1,486

 
13

 
—

 
1,473

Distribution expenses
 
1,611

 
141

 
—

 
1,470

Taxes other than payroll and income taxes
 
166

 
7

 
—

 
159

Restructuring and other charges
 
109

 
44

 
—

 
65

Net (gains) losses on sales and impairments of business
 
86

 
—

 
—

 
86

Interest expense, net
 
672

 
—

 
—

 
672

EARNINGS (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND EQUITY EARNINGS
 
1,024

 
58

 
—

 
966

Income tax provision (benefit)
 
331

 
23

 
—

 
308

Equity earnings (losses), net of taxes
 
61

 
—

 
—

 
61

NET EARNINGS (LOSS) FROM CONTINUING OPERATIONS
 
754

 
35

 
—

 
719

Less: Net earnings attributable to noncontrolling interests
 
5

 
—

 
—

 
5

NET EARNINGS (LOSS) FROM CONTINUING OPERATIONS ATTRIBUTABLE TO INTERNATIONAL PAPER COMPANY
 
$
749

 
$
35

 
$
—

 
$
714

BASIC EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO INTERNATIONAL PAPER COMPANY COMMON SHAREHOLDERS
 
 
 
 
 
 
 
 
Earnings (loss) from continuing operations
 
$
1.72

 
 
 
 
 
$
1.64

Average common shares outstanding
 
435.2

 
 
 
 
 
435.2

DILUTED EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO INTERNATIONAL PAPER COMPANY COMMON SHAREHOLDERS
 
 
 
 
 
 
 
 
Earnings (loss) from continuing operations
 
$
1.70

 
 
 
 
 
$
1.62

Average common shares outstanding - assuming dilution
 
440.2

 
 
 
 
 
440.2


See accompanying notes.





5




INTERNATIONAL PAPER COMPANY
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
(In millions, except per share data)

 
 
Year Ended December 31, 2011
 
 
As Reported
 
Disposition of xpedx
 
Pro Forma Adjustments
 
Pro Forma
NET SALES
 
$
26,034

 
$
6,571

 
$
652

(a)
$
20,115

COST AND EXPENSES
 
 
 
 
 
 
 
 
Cost of products sold
 
18,960

 
5,899

 
652

(a)
13,713

Selling and administrative expenses
 
1,887

 
391

 
—

 
1,496

Depreciation, amortization and cost of timber harvested
 
1,332

 
14

 
—

 
1,318

Distribution expenses
 
1,390

 
146

 
—

 
1,244

Taxes other than payroll and income taxes
 
146

 
9

 
—

 
137

Restructuring and other charges
 
102

 
49

 
—

 
53

Net (gains) losses on sales and impairments of business
 
218

 
—

 
—

 
218

Interest expense, net
 
541

 
—

 
—

 
541

EARNINGS (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND EQUITY EARNINGS
 
1,458

 
63

 
—

 
1,395

Income tax provision (benefit)
 
311

 
25

 
—

 
286

Equity earnings (losses), net of taxes
 
140

 
—

 
—

 
140

NET EARNINGS (LOSS) FROM CONTINUING OPERATIONS
 
1,287

 
38

 
—

 
1,249

Less: Net earnings attributable to noncontrolling interests
 
14

 
—

 
—

 
14

NET EARNINGS (LOSS) FROM CONTINUING OPERATIONS ATTRIBUTABLE TO INTERNATIONAL PAPER COMPANY
 
$
1,273

 
$
38

 
$
—

 
$
1,235

BASIC EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO INTERNATIONAL PAPER COMPANY COMMON SHAREHOLDERS
 
 
 
 
 
 
 
 
Earnings (loss) from continuing operations
 
$
2.95

 
 
 
 
 
$
2.86

Average common shares outstanding
 
432.2

 
 
 
 
 
432.2

DILUTED EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO INTERNATIONAL PAPER COMPANY COMMON SHAREHOLDERS
 
 
 
 
 
 
 
 
Earnings (loss) from continuing operations
 
$
2.92

 
 
 
 
 
$
2.83

Average common shares outstanding - assuming dilution
 
437.0

 
 
 
 
 
437.0


See accompanying notes.





6




NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

1.
Basis of Presentation

The accompanying unaudited pro forma condensed consolidated financial statements give effect to the pro forma adjustments necessary to reflect the Spinoff as if it occurred on January 1, 2011 in the unaudited pro forma condensed consolidated statements of operations for the years ended 2013, 2012, and 2011 and for the three months ended March 31, 2014, and as of March 31, 2014 in the unaudited pro forma condensed consolidated balance sheet.

2. Pro Forma Adjustments

The following notes relate to the unaudited pro forma condensed balance sheet:

(a) Represents the special payment received by International Paper excluding any possible working capital, net debt, or other adjustments and an estimate of intercompany receivables and intercompany payables that will be settled in cash, as trade accounts receivable and trade accounts payable, pursuant to the terms of the Contribution and Distribution Agreement.

The following notes relate to the unaudited pro forma condensed consolidated statements of operations:

(a) Represents the historical net sales from International Paper to xpedx that were previously eliminated in consolidations.
(b) Reflects the removal of transaction costs and related tax effects incurred during the quarter ended March 31, 2014 and the year ended December 31, 2013, that are directly related to the Spinoff of xpedx from International Paper.
(c) Represents the tax benefit for the loss during the period, excluding the nondeductible portion of the goodwill impairment.



7