-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, k3LdpvbOt/xvPU1iUhYFgE++12NN8TMCoTeBWzB9rl64bPSFIusEmYxgCUsfmxZL oul/Vp+lBS6rgKdobCy37g== 0000889812-94-000019.txt : 19940802 0000889812-94-000019.hdr.sgml : 19940802 ACCESSION NUMBER: 0000889812-94-000019 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19940801 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19940801 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTERNATIONAL PAPER CO /NEW/ CENTRAL INDEX KEY: 0000051434 STANDARD INDUSTRIAL CLASSIFICATION: 2631 IRS NUMBER: 130872805 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-03157 FILM NUMBER: 94541088 BUSINESS ADDRESS: STREET 1: TWO MANHATTANVILLE RD CITY: PURCHASE STATE: NY ZIP: 10577 BUSINESS PHONE: 9143971500 FORMER COMPANY: FORMER CONFORMED NAME: INTERNATIONAL PAPER & POWER CORP DATE OF NAME CHANGE: 19710527 8-K 1 CURRENT REPORT 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 August 1, 1994 ------------------------------------------------ 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 (Registrant's telephone No.) ITEM I. CHANGES IN CONTROL OF REGISTRANT N/A ITEM II. ACQUISITION OR DISPOSITION OF ASSETS N/A ITEM III. BANKRUPTCY OR RECEIVERSHIP N/A ITEM IV. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT N/A ITEM V. OTHER EVENTS N/A ITEM VI. RESIGNATIONS OF REGISTRANT'S DIRECTORS N/A ITEM VII. FINANCIAL STATEMENTS AND EXHIBITS (a) Financial Statements N/A (b) Pro Forma Financial Information: N/A (c) Exhibits: (13) 1994 Midyear Report to Shareholders ITEM VIII. CHANGES IN FISCAL YEAR N/A 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 thereunto duly authorized. INTERNATIONAL PAPER COMPANY (Registrant) Date: August 1, 1994 /s/SYVERT E. NERHEIM Purchase, NY Syvert E. Nerheim Assistant Secretary 3 EXHIBIT INDEX (13) 1994 Midyear Report to Shareholders EX-13 2 1994 MIDYEAR REPORT INTERNATIONAL [LOGO] PAPER Cover Page Photo No. 1 Cover Page Photo No. 2 UPDATE Cover Page Photo No. 3 Cover Page Photo No. 4 Cover Page Photo No. 5 1994 MIDYEAR REPORT FINANCIAL HIGHLIGHTS (unaudited) 1994 1993 ---------------------- ---------------------- Six Six Months Quarter Months Quarter In millions, except per share Ended -------------- Ended -------------- amounts June 30 First Second June 30 First Second ------- ------ ------ ------- ------ ------ Net Sales $7,047 $3,414 $3,633 $6,868 $3,362 $3,506 Operating Profit 408 188 220 375 174 201 Earnings Before Income Taxes 245 111 134 223 101 122 Net Earnings 159 72 87 141 64 77 Per Common Share Net Earnings $ 1.28 $ .58 $ .70 $ 1.14 $ .52 $ .62 Cash Dividends .84 .42 .42 .84 .42 .42 Book Value at June 30 50.62 50.28 CONTENTS Update and Outlook: Mid-1994 Review......................... 1 Earnings................................ 6 Balance Sheet........................... 7 Cash Flows.............................. 8 CORPORATE OVERVIEW International Paper is a global leader in the manufacture of printing and writing papers, industrial and consumer packaging, and forest products. These enterprises are complemented by a broad array of specialty products businesses and an extensive distribution capability, giving us the diversity we need to enhance the growth and stability of our earnings, achieve substantial economies of scale, and strengthen our presence in some of the fastest growing segments of our industry. With an unwavering focus on the needs of our customers, International Paper reaches markets in more than 130 countries from facilities in 27 nations. Inside Front Cover Illustration A INTERNATIONAL PAPER: THE BUSINESSES WE'RE IN PRINTING PAPERS International Paper is one of the world's largest producers of high-quality printing and writing papers. We serve growing markets for uncoated papers, specialty fine papers and nearly 100 different grades of recycled papers. We are leaders in the manufacture of coated papers used in magazines and catalogs; heavyweight papers used for folders, tags and tickets; and pulp for international markets. Our Springhill, Hammermill, Strathmore and Beckett brands rank among the most popular in the industry. International Paper's Aussedat Rey, Zanders and Kwidzyn subsidiaries are major producers of printing and writing papers in Europe. PACKAGING Our reputation for exceptional quality and innovative designs has helped International Paper become a leader in industrial and consumer packaging. Our operations in the U.S. and overseas make us one of the world's largest producers of containerboard and corrugated boxes, and the leading provider of agricultural packaging in Europe. Our kraft division offers the widest array of kraft paper and packaging in the industry. And our premium Everest line of bleached board is known for its superior quality and is used worldwide for folding cartons, liquid containers and food service products. DISTRIBUTION International Paper is a leading local, national and internatioal distributor of paper, industrial products and graphic arts supplies. ResourceNet International unites more than 260 strategically located regional distribution facilities in the U.S., Canada and Mexico. And our Aussedat Rey and Scaldia affiliates in France and the Netherlands give us broad exposure to the growing European marketplace. Our distribution business has built its success by delivering a wide range of products and superior customer service in a timely and economical manner. SPECIALTY PRODUCTS Because they share materials, processes or customers with other International Paper businesses, Specialty Products help us leverage the strengths and resources of our core enterprises. Our imaging products business serves the photography and graphic arts markets. Specialty panels produces siding, door facings, decorative surfaces, foam products and furniture components. Specialty industrial papers includes products used for laminating, tape and release applications such as pressure-sensitive labels. Veratec, our nonwovens producer, is a leading manufacturer of spunbond fabrics used in consumer disposable products. Arizona Chemical upgrades the natural byproducts of papermaking into specialty products. And our petroleum operations play an important role in our energy strategy. FOREST PRODUCTS International Paper owns or controls 6.1 million acres of U.S. forestlands, giving us one of the largest fiber bases in our industry. The sawlogs and pulpwood yielded by our forestry operations are used in our own plants and mills and sold to other companies. We are also the fourth largest U.S. producer of southern pine lumber, and we manufacture a broad range of panel and other wood products. We take very seriously our responsibility to maintain the health and vitality of the forests under our stewardship. The environmentally sound, scientifically based forest management techniques we practice help us ensure that our precious natural resources will be sustained and renewed for many generations to come. CORPORATE RESPONSIBILITY International Paper puts the safety of its employees, communities and environment first. We seek balanced solutions to environmental concerns, and we strive to reduce the environmental impact of our operations. We have met this challenge through responsible stewardship of our natural and industrial resources, through conservation of wildlife habitats and by making our forestlands available to the public for recreational and educational use. In the same spirit, we dedicate considerable resources to improving safety in our operations. Our constant focus on teamwork, technology and innovative thinking helps us fulfill those responsibilities in a way that satisfies the needs of our customers, the public, our employees, the environment and our shareholders. UPDATE AND OUTLOOK: MID-1994 REVIEW The first half of 1994 saw steady improvement in International Paper's overall results. Sales for the period totaled $7.0 billion versus $6.9 billion during the first six months of 1993. Net earnings were $159 million, or $1.28 per share, up from $141 million and $1.14, respectively, one year ago. Although these increases are relatively modest, we believe that they represent the beginning of a fundamental turnaround in many of our key markets. As economic growth, worldwide demand, pricing trends and internal cost-cutting initiatives all gather strength during the second half of this year, we expect operating results to improve further. More specifically, expanding economies in the U.S. and Europe are likely to benefit many of our businesses. Over the next several years, for example, demand for most of our paper grades is expected to grow faster than our industry's capacity-expansion plans. This should lead to higher prices and, together with the cost-control measures we have implemented, increased company earnings over time. Similarly, continued strength in our fast-growing specialty products and distribution businesses should also contribute to higher earnings. Diverse markets, a strong balance sheet and prudent business strategies position us to take full advantage of the upturn in the economic cycle that is under way. (Photo A) Caption: Radiata pine, a high-quality, renewable fiber source, grows more rapidly than many other species. By increasing our ownership of Carter Holt Harvey from 16 percent to 24 percent in March, we realized a more substantial interest in radiata pine forests in New Zealand and broader participation in the growing markets of the Pacific Rim. UPDATE 1 PRINTING PAPERS While our Printing Papers businesses reported a loss during the first six months of 1994, operating results improved considerably on sales of $2.0 billion. First-half prices for uncoated papers declined slightly compared to a year ago, but sales began to improve late in the period in response to low merchant inventories and rising end-user demand. Prices of coated papers have stabilized, supported by greater U.S. demand, stronger order backlogs, and growth in the catalog and insert markets. We are especially encouraged by the improvement of our paper business in Europe, where pulp prices, paper product prices and sales volume have rebounded in response to the region's economic recovery. Our refurbished Saillat pulp mill in France is operating near full capacity, and capital improvements at the Kwidzyn paper mill in Poland have already had an impact on both quality and output. We are optimistic about the prospects for continued improvement in the printing papers markets during the second half of this year. Price increases for uncoated papers are being implemented domestically and further increases are expected in Europe. Over the longer term, we believe that margins in our uncoated papers business will expand when our new paper machine and wastepaper deinking facility begin operations next year at our Riverdale mill in Alabama. This new system will help us reduce costs substantially, enhance our ability to produce high-grade recycled papers and allow us to use other manufacturing assets more efficiently. (Photo B) Caption: Recycling has become a way of life in communities throughout America, and International Paper is pleased to provide markets for the nation's recyclable waste. Springhill Incentive 100 and Hammermill Unity printing papers are the first in the U.S. to contain 100 percent recycled fiber from old newspapers and magazines. 2 UPDATE PACKAGING Stronger markets for containerboard helped boost sales in our Packaging operations to $1.6 billion. Demand for containerboard rose in response to strong domestic and export markets, enabling us to raise prices late in 1993 and again in the spring and summer of 1994. While bleached board prices declined compared to first-half 1993 levels, stronger global demand for consumer packaging should support higher prices in the months ahead. The outlook for our Packaging businesses is strong as we continue to develop premium products and solidify partnerships with key customers. To meet rising demand, we are adding a recycling plant and a lightweight containerboard machine to our mill in Mansfield, La. When construction is complete in 1996, the new machine will have an annual capacity of 400,000 tons, giving International Paper the widest selection of containerboard grades in the industry, including the fast-growing white-top and mottled-white grades. Finally, we recently announced plans to increase our penetration of the important aseptic packaging market. Construction of a new facility in Lyons, France, and expansion of our Raleigh, N.C., plant will help us strengthen our position as a manufacturer of aseptic packaging, which keeps juice and other perishable beverages fresh without refrigeration. (Photo C) Caption: Aggressive product development is leading to a number of new products that provide innovative solutions to customers' needs. Among them is Triton, a degradable paperboard beverage ring carrier that is an efficient, printable and environmentally friendly alternative to traditional plastic rings. UPDATE 3 DISTRIBUTION Distribution earnings for the first half of 1994 grew slightly compared to year-ago results on sales of $1.6 billion. This improvement can be attributed to better business conditions in our U.S. and European markets. Greater demand and higher prices for printing papers should boost Distribution sales further in the months ahead. Moreover, we believe that results will continue to improve as we complete the process of integrating our various regional operations into one North American system, ResourceNet International, and achieve the economies of scale that a more coordinated organization should produce. Moreover, this structure will enable us to enhance service and strengthen relationships with customers in new and existing markets. SPECIALTY PRODUCTS Buoyed by sales of $1.3 billion during the first half of this year, operating earnings in our Specialty Products businesses exceeded those of the same period last year. Our specialty panels business led the group in sales growth and operating profits, supported by the ongoing success of CraftMaster door facings and robust sales of decorative products. To meet rising demand, a new door facings line at our Laurel, Miss., plant is scheduled for completion next year. Profits from our imaging products businesses are also ahead of last year's first-half levels, due primarily to upgraded products and lower manufacturing costs. We expect Specialty Products to achieve record sales and earnings for full-year 1994. Looking forward, several major projects are under way that will drive growth in these businesses. A rebuilt paper (Photo D) Caption: To be a leader in today's global economy, it is no longer enough to reach markets in just one nation. Our 1994 acquisition of Mexican paper distributors Ogi Papel and Papelera Kif has helped us expand our position in paper distribution throughout North America. 4 UPDATE machine in our Kaukauna, Wis., specialty industrial papers mill will meet rising demand for backing papers for pressure-sensitive labels. A second spunbond line in Toronto, Canada, will help us increase capacity, improve quality and reduce costs for light- to medium-weight nonwovens. In addition, higher commodity prices in our chemicals and petroleum operations should lead to higher earnings in those businesses as well. FOREST PRODUCTS Steady demand for curtailed supplies of stumpage and wood products helped Forest Products produce operating profits only slightly below the record pace set during the first half of 1993. Sales rose to $870 million as building activity remained strong in response to still-low interest rates and improved consumer confidence. Despite some moderation in the second quarter of 1994, overall pricing levels for stumpage and wood products remained high. Due in part to higher prices for conventional wood products, which have been affected by logging restrictions on federal lands in the Pacific Northwest, demand for engineered wood products such as oriented strand board (OSB) has increased substantially. To satisfy this growing need, we are building a new OSB plant in the southern U.S. that will more than double our manufacturing capacity. We expect Forest Products to have another good year in 1994. Our harvest and wood products volumes over the next six months should match first-half levels in a favorable pricing environment. (Photo E) Caption: Modern technology has rendered obsolete many glue-applied, "lick and stick" labels and envelopes. As a leading manufacturer of the backing papers used in pressure-sensitive adhesive products, International Paper is well positioned to capture a larger share of this growing market. (Photo F) Caption: Our forestlands provide more than wood fiber for our business operations; they are also home to a wide variety of wildlife. We are proud to have received the National Wild Turkey Federation's first Industrial Forestry Award in recognition of our wildlife preservation programs in company-owned forests. UPDATE 5 CONSOLIDATED STATEMENT OF EARNINGS (unaudited) Six Months Ended Year Ended June 30 December 31 In millions-except per share amounts 1994 1993 1993 ---- ---- ---- Net Sales $7,047 $6,868 $13,685 ------ ------ ------- Costs and Expenses Cost of products sold 5,277 5,162 10,191 Depreciation and amortization 453 448 898 Distribution expenses 329 319 634 Selling and administrative expenses 502 484 999 Taxes other than payroll and income taxes 78 80 153 ------ ------ ------- Total Costs and Expenses 6,639 6,493 12,875 ------ ------ ------- Earnings Before Interest and Income Taxes 408 375 810 Interest expense, net 163 152 310 ------ ------ ------- Earnings Before Income Taxes 245 223 500 Provision for income taxes 86 82 211 ------ ------ ------- Net Earnings $ 159 $ 141 $ 289 ------ ------ ------- Earnings per Common Share $ 1.28 $ 1.14 $ 2.34 ------ ------ ------- Average Shares of Common Stock Outstanding 124.4 123.0 123.2 ------ ------ ------- 6 UPDATE CONSOLIDATED BALANCE SHEET (unaudited) June 30 December 31 In millions 1994 1993 ---- ---- Assets Current Assets Cash and temporary investments $ 193 $ 242 Accounts and notes receivable, net 2,098 1,856 Inventories 2,072 2,024 Other current assets 274 279 ------- ------- Total Current Assets 4,637 4,401 Plants, Properties and Equipment, Net 8,909 8,872 Forestlands 796 786 Investments 975 631 Goodwill 763 754 Deferred Charges and Other Assets 1,295 1,187 ------- ------- Total Assets $17,375 $16,631 ------- ------- Liabilities and Common Shareholders' Equity Current Liabilities Notes payable and current maturities of long-term debt $ 2,371 $ 2,089 Accounts payable and accrued liabilities 1,871 1,920 ------- ------- Total Current Liabilities 4,242 4,009 Long-Term Debt 3,981 3,601 Deferred Income Taxes 1,643 1,614 Minority Interest and Other Liabilities 1,195 1,182 Common Shareholders' Equity 6,314 6,225 ------- ------- Total Liabilities and Common Shareholders' Equity $17,375 $16,631 ------- ------- UPDATE 7 CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited) Six Months Ended Year Ended June 30 December 31 In millions 1994 1993 1993 ---- ---- ---- Operating Activities Net earnings $ 159 $ 141 $ 289 Noncash items Depreciation and amortization 453 448 898 Deferred income taxes 7 2 54 Other, net (21) (18) (22) Net change in current assets and liabilities (279) (284) (238) ------- ----- ------- Cash Provided by Operations 319 289 981 ------- ----- ------- Investment Activities Invested in capital projects (418) (373) (954) Mergers and acquisitions (21) (35) Investments in affiliated companies (299) (9) Other (60) (28) (124) ------- ----- ------- Cash Used for Investment Activities (777) (422) (1,122) ------- ----- ------- Financing Activities Issuance of common stock 52 38 60 Issuance of debt 1,150 430 1,276 Reduction of debt (521) (161) (1,016) Dividends paid (105) (103) (208) Other (169) (23) 51 ------- ----- ------- Cash Provided by Financing Activities 407 181 163 ------- ----- ------- Effect of Exchange Rate Changes on Cash 2 (1) (5) ------- ----- ------- Change in Cash and Temporary Investments (49) 47 17 Cash and Temporary Investments Beginning of the period 242 225 225 ------- ----- ------- End of the period $ 193 $ 272 $ 242 ------- ----- ------- COMPANY INFORMATION Transfer Agent For services regarding your account such as change of address, lost certificates or dividend checks, change in registered ownership, or the dividend reinvestment program, write or call: Chemical Bank Shareholder Services 450 West 33rd Street New York, New York 10001 800-678-8715 Stock Exchange Listings Common shares (symbol: IP) are traded on the following exchanges: New York, Basel, Geneva, Lausanne, Zurich and Amsterdam. Reports and Publications Additional copies of this report, annual and environmental reports, SEC filings and other publications are available by calling or writing to the investor relations department at corporate headquarters. Current financial information, position statements and general information about International Paper are available by facsimile by calling 800-851-4FAX. This service is available on a 24-hour basis. Investor Relations Investors desiring further information about International Paper should contact the investor relations department at corporate headquarters, 914-397-1625. 8 UPDATE Two Manhattanville Road Purchase, New York 10577 914-397-1500 INTERNATIONAL [LOGO] PAPER APPENDIX FOR GRAPHIC AND IMAGE MATERIAL Pursuant to Rule 304 of Regulation S-T, the following table presents fair and accurate narrative descriptions of graphic and image material omitted from this EDGAR filing due to ASCII-incompatibility and cross-references this material to the location of each occurrence in the text. DESCRIPTION OF OMITTED LOCATION OF GRAPHIC GRAPHIC OR IMAGE OR IMAGE IN TEXT ------------------------ --------------------- An icon representing the Printing Papers Cover Page Photo No. 1 segment. An icon representing the Packaging segment. Cover Page Photo No. 2 An icon representing the Distribution segment. Cover Page Photo No. 3 An icon representing the Specialty Products Cover Page Photo No. 4 segment. An icon representing the Forest Products Cover Page Photo No. 5 segment. An illustration representing International Inside Front Cover Illus- Paper's various businesses as described in tration the text titled "International Paper: The Businesses We're In". An illustration of a radiata pine tree. Photo "A" Page 1 UPDATE A photograph of a bundle of recyclable waste Photo "B" Page 2 UPDATE (newspapers and magazines) and reams of the 100 percent recycled papers that Interna- tional Paper manufactures. A photograph of a paperboard six-pack beverage Photo "C" Page 3 UPDATE ring carrier. A photograph of a person pushing a dolly on Photo "D" Page 4 UPDATE which various products are stacked, with the Mexican flag in the background. A photograph of an envelope showing the use of Photo "E" Page 5 UPDATE pressure-sensitive labels in a traditional "lick-and-stick" adhesive application. An illustration of a wild turkey. Photo "F" Page 5 UPDATE -----END PRIVACY-ENHANCED MESSAGE-----