-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, I6PUwbE7KcVqdY8pctph/GCxJ/m6KutS5YduI+8sFqIk9wjeVFJVbTHcjwWCV4sB NXJ31ko2fiooOVkdie0XhA== 0000950117-04-001216.txt : 20040330 0000950117-04-001216.hdr.sgml : 20040330 20040330171830 ACCESSION NUMBER: 0000950117-04-001216 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20031231 FILED AS OF DATE: 20040330 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: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-03157 FILM NUMBER: 04702535 BUSINESS ADDRESS: STREET 1: 400 ATLANTIC STREET CITY: STAMFORD STATE: CT ZIP: 06921 BUSINESS PHONE: 203-541-8000 MAIL ADDRESS: STREET 1: 400 ATLANTIC STREET CITY: STAMFORD STATE: CT ZIP: 06921 FORMER COMPANY: FORMER CONFORMED NAME: INTERNATIONAL PAPER & POWER CORP DATE OF NAME CHANGE: 19710527 11-K 1 a37365.txt INTERNATIONAL PAPER COMPANY Weldwood of Canada Limited Employee Phantom Share Plan Financial Statements as of and for the Years Ended December 31, 2003 and 2002 and Independent Auditors' Report ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------- FORM 11-K ANNUAL REPORT Pursuant to Section 15(d) of the Securities Exchange Act of 1934 For the Year Ended December 31, 2003 Commission file number 1-3157 WELDWOOD OF CANADA LIMITED EMPLOYEE PHANTOM SHARE PLAN (Full title of the plan) INTERNATIONAL PAPER COMPANY 400 Atlantic Street Stamford, CT 06921 Telephone: (203) 541-8000 (Name of issuer of the securities held pursuant to the plan and the address of its principal executive office) 13-0872805 (I.R.S. Employer Identification No.) ================================================================================ WELDWOOD OF CANADA LIMITED EMPLOYEE PHANTOM SHARE PLAN TABLE OF CONTENTS
- -------------------------------------------------------------------------------- Page ---- INDEPENDENT AUDITORS' REPORT 1 FINANCIAL STATEMENTS: Statements of Net Assets Available for Benefits as of December 31, 2003 and 2002 2 Statements of Changes in Net Assets Available for Benefits for the Years Ended December 31, 2003 and 2002 3 Notes to Financial Statements 4-5
INDEPENDENT AUDITORS' REPORT To the Plan Administrator of Weldwood of Canada Limited Employee Phantom Share Plan: We have audited the accompanying statements of net assets available for benefits of Weldwood of Canada Limited Employee Phantom Share Plan (the "Plan") as of December 31, 2003 and 2002, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2003 and 2002, and the changes in net assets available for benefits for the years then ended in conformity with accounting principles generally accepted in the United States of America. /s/ Deloitte & Touche LLP March 30, 2004 1 WELDWOOD OF CANADA LIMITED EMPLOYEE PHANTOM SHARE PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS AS OF DECEMBER 31, 2003 AND 2002 - --------------------------------------------------------------------------------
2003 2002 NET ASSETS AVAILABLE FOR BENEFITS--Receivable from Weldwood of Canada Limited (Note 2) $2,636,432 $1,834,806 ========== ==========
See notes to financial statements. 2 WELDWOOD OF CANADA LIMITED EMPLOYEE PHANTOM SHARE PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS YEARS ENDED DECEMBER 31, 2003 AND 2002 - --------------------------------------------------------------------------------
2003 2002 Amounts allocated to participant accounts (Note 1): Participant contributions $ 82,547 $ 52,586 Phantom investment gain (loss) 476,641 (250,288) Benefits paid to participants (157,396) -- ---------- ---------- 401,792 (197,702) ---------- ---------- Translation adjustment (Note 2) 399,834 17,309 ---------- --------- NET INCREASE (DECREASE) 801,626 (180,393) ---------- ---------- NET ASSETS AVAILABLE FOR BENEFITS: Beginning of year 1,834,806 2,015,199 ---------- ---------- End of year $2,636,432 $1,834,806 ========== ==========
See notes to financial statements. 3 WELDWOOD OF CANADA LIMITED EMPLOYEE PHANTOM SHARE PLAN NOTES TO FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002 - -------------------------------------------------------------------------------- 1. DESCRIPTION OF THE PLAN The following description of the Weldwood of Canada Limited Employee Phantom Share Plan (the "Plan") is provided for general information purposes only. Participants should refer to the Plan document for more complete information. General--The Plan is an unfunded retirement plan established for the purpose of encouraging eligible employees of Weldwood of Canada Limited ("Weldwood"), a Canadian corporation and wholly owned subsidiary of International Paper Company, to contribute to the growth and profitability of the Company through an equity-based compensation plan. For purposes of these financial statements, references to "the Company" relate to Weldwood and International Paper Company. As an unfunded plan, no assets of the Company have been segregated to pay the amounts due to participants under the Plan. The Company controls and manages the operation and administration of the Plan. JP Morgan/American Century Retirement Plan Services performs certain administrative and recordkeeping functions for the Plan. Contributions--The Plan provides that the Company will allocate to each participant's account an amount equal to a percentage of the participant's incentive compensation, as designated by the participant. Investments--Each participant's account is treated as if it is invested in the Company Stock Fund of the Champion International Corporation Savings Plan #077 through March 31, 2002 and the International Paper Company Salaried Savings Plan subsequent to March 31, 2002 (the "Company Stock Fund"). The Company Stock Fund is generally invested in common stock of International Paper Company. Participant Accounts--Individual accounts are maintained for each Plan participant. Although the Plan itself has no investment assets, each participant's account is credited with the participant's contributions, the Company's contributions, if applicable, and allocations of earnings, and charged with benefit payments, if applicable, and allocations of losses. Earnings and loss allocations are based on the actual earnings and losses of the Company Stock Fund for the period. Vesting--Participants are immediately vested in their entire account balance, as adjusted for earnings and losses. Payment of Benefits--All vested amounts are distributable to participants from the assets of the Company upon retirement, death, disability or other termination of employment in a single lump sum payment or in two cash installments. In addition, effective January 1, 2003, quarterly installments may be selected with the final payment being no later than December 31 of the calendar year following the calendar year in which termination or retirement occurs. All benefits are payable in Canadian currency. 4 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting--The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S."). Use of Estimates--The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of net assets available for benefits and changes therein. Actual results could differ from those estimates. Net Assets Available for Benefits--The Plan's net assets available for benefits consist of a receivable from the Company as all Plan benefits are paid directly from the Company's general assets. Expenses--Administrative expenses of the Plan are paid by the Company. Payment of Benefits--Benefit payments to participants are recorded upon distribution. Foreign Currency Translation--The functional currency of the Plan is Canadian dollars. The net assets of the Plan are translated into U.S. dollars using the year-end exchange rate. The changes in net assets are translated using the average exchange rate for the year. The resulting translation adjustment is included in the accompanying statements of changes in net assets available for benefits. 3. PLAN TERMINATION It is the Company's intention to continue the Plan. However, the Company has the right under the Plan to terminate or amend the Plan in whole or in part at any time. No amendment or termination shall reduce a participant's benefit under the Plan that has been accrued up to the date of termination or amendment. As an unfunded Plan, no assets of the Company have been segregated to pay amounts due to participants under the Plan. 4. INCOME TAX STATUS The Plan is established pursuant to the provisions of subsection 6801(d) of the regulations to the Income Tax Act (Canada). The Plan is subject to income taxes; however, the unfunded nature of the Plan generally precludes the occurrence of a taxable event arising from the Plan's operations. Amounts contributed, and earnings credited thereon, are not considered taxable income to participants until distributed. 5 International Paper Company Weldwood of Canada Limited Employee Phantom Share Plan Financial Statements As of December 31, 2001 and 2000 Together With Auditors' Report International Paper Company Weldwood of Canada Limited Employee Phantom Share Plan Table of Contents
Page(s) ------- Report of Independent Public Accountants 1 Statements of Net Assets Available for Benefits As of December 31, 2001 and 2000 2 Statements of Changes in Net Assets Available for Benefits For the Years Ended December 31, 2001, 2000 and 1999 3 Statements of Accumulated Plan Benefits As of December 31, 2001 and 2000 4 Statements of Changes in Accumulated Plan Benefits For the Years Ended December 31, 2001, 2000 and 1999 5 Notes to Financial Statements 6-7
THIS REPORT SET FORTH BELOW IS A COPY OF A PREVIOUSLY ISSUED AUDIT REPORT BY ARTHUR ANDERSEN LLP. THIS REPORT HAS NOT BEEN REISSUED BY ARTHUR ANDERSEN LLP IN CONNECTION WITH ITS INCLUSION IN THIS FORM 11-K. REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Plan Administrator of the Weldwood of Canada Limited Employee Phantom Share Plan: We have audited the accompanying statements of net assets available for benefits and of accumulated plan benefits of the WELDWOOD OF CANADA LIMITED (a Canadian corporation and wholly owned subsidiary of International Paper Company) EMPLOYEE PHANTOM SHARE PLAN (the Plan) as of December 31, 2001 and 2000, and the related statements of changes in net assets available for benefits and of changes in accumulated plan benefits for each of the three years in the period ended December 31, 2001. These financial statements are the responsibility of the Plan Administrator. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the Plan Administrator, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial status of the Plan as of December 31, 2001 and 2000, and the changes in its financial status for each of the three years in the period ended December 31, 2001, in conformity with accounting principles generally accepted in the United States. Memphis, Tennessee, March 18, 2002. -1- INTERNATIONAL PAPER COMPANY WELDWOOD OF CANADA LIMITED EMPLOYEE PHANTOM SHARE PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS AS OF DECEMBER 31, 2001 AND 2000
2001 2000 ----------------------- ----------------------- Cdn.$ US $ Cdn.$ US $ ---------- ---------- ---------- ---------- ASSETS Receivable from Weldwood of Canada Limited (Note 1) $3,209,426 $2,015,199 $2,524,029 $1,682,518 ---------- ---------- ---------- ---------- Net assets available for benefits $3,209,426 $2,015,199 $2,524,029 $1,682,518 ========== ========== ========== ==========
The accompanying notes to financial statements are an integral part of these statements. -2- INTERNATIONAL PAPER COMPANY WELDWOOD OF CANADA LIMITED EMPLOYEE PHANTOM SHARE PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
2001 2000 1999 ----------------------- ----------------------- ------------------- Cdn. $ US $ Cdn. $ US $ Cdn. $ US $ ---------- ---------- ---------- ---------- -------- -------- Amounts allocated to participant accounts (Note 1): Participant deferrals $ 471,629 $ 304,588 $ 793,688 $ 534,430 $329,621 $222,428 ---------- ---------- ---------- ---------- -------- -------- Company- Additional deferral 47,163 30,459 79,369 53,443 32,962 22,243 Phantom investment earnings 399,753 258,169 1,153,359 776,614 290,325 195,911 ---------- ---------- ---------- ---------- -------- -------- Company deferrals 446,916 288,628 1,232,728 830,057 323,287 218,154 ---------- ---------- ---------- ---------- -------- -------- Total deferrals 918,545 593,216 2,026,416 1,364,487 652,908 440,582 ---------- ---------- ---------- ---------- -------- -------- Benefits paid (Note 1) (233,148) (150,572) (256,946) (173,015) -- -- ---------- ---------- ---------- ---------- -------- -------- Net increase in net assets available for benefits 685,397 442,644 1,769,470 1,191,472 652,908 440,582 ---------- ---------- ---------- ---------- -------- -------- Translation adjustment (Note 2) -- (109,963) -- (31,411) -- 15,446 ---------- ---------- ---------- ---------- -------- -------- Net assets available for benefits, beginning of year 2,524,029 1,682,518 754,559 522,457 101,651 66,429 ---------- ---------- ---------- ---------- -------- -------- Net assets available for benefits, end of year $3,209,426 $2,015,199 $2,524,029 $1,682,518 $754,559 $522,457 ========== ========== ========== ========== ======== ========
The accompanying notes to financial statements are an integral part of these statements. -3- INTERNATIONAL PAPER COMPANY WELDWOOD OF CANADA LIMITED EMPLOYEE PHANTOM SHARE PLAN STATEMENTS OF ACCUMULATED PLAN BENEFITS AS OF DECEMBER 31, 2001 AND 2000
2001 2000 ----------------------- ----------------------- Cdn. $ US $ Cdn. $ US $ ---------- ---------- ---------- ---------- Present value of accumulated plan benefits: Vested benefits- Vested benefits of participants currently receiving payments $ -- $ -- -- $ -- Other vested benefits 3,209,426 2,015,199 2,524,029 1,682,518 ---------- ---------- ---------- ---------- Total vested benefits 3,209,426 2,015,199 2,524,029 1,682,518 ---------- ---------- ---------- ---------- Nonvested benefits -- -- -- -- ---------- ---------- ---------- ---------- Total present value of accumulated plan benefits $3,209,426 $2,015,199 $2,524,029 $1,682,518 ========== ========== ========== ==========
The accompanying notes to financial statements are an integral part of these statements. -4- INTERNATIONAL PAPER COMPANY WELDWOOD OF CANADA LIMITED EMPLOYEE PHANTOM SHARE PLAN STATEMENTS OF CHANGES IN ACCUMULATED PLAN BENEFITS FOR THE YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
2001 2000 1999 ---------------------- ---------------------- ------------------ Cdn. $ US $ Cdn. $ US $ Cdn. $ US $ ---------- ---------- ---------- ---------- -------- -------- Present value of accumulated plan benefits, beginning of year $2,524,029 $1,682,518 $ 754,559 $ 522,457 $101,651 $ 66,429 ---------- ---------- ---------- ---------- -------- -------- Increase (decrease) during the year attributable to: Amounts allocated to participant accounts (Note 1)- Participant deferrals 471,629 304,588 793,688 534,430 329,621 222,428 Additional deferral 47,163 30,459 79,369 53,443 32,962 22,243 Phantom investment earnings 399,753 258,169 1,153,359 776,614 290,325 195,911 ---------- ---------- ---------- ---------- -------- -------- Total 918,545 593,216 2,026,416 1,364,487 652,908 440,582 ---------- ---------- ---------- ---------- -------- -------- Benefits paid (233,148) (150,572) (256,946) (173,015) -- -- ---------- ---------- ---------- ---------- -------- -------- Net increase in accumulated plan benefits 685,397 442,644 1,769,470 1,191,472 652,908 440,582 ---------- ---------- ---------- ---------- -------- -------- Translation adjustment (Note 2) -- (109,963) -- (31,411) -- 15,446 ---------- ---------- ---------- ---------- -------- -------- Present value of accumulated plan benefits, end of year $3,209,426 $2,015,199 $2,524,029 $1,682,518 $754,559 $522,457 ========== ========== ========== ========== ======== ========
The accompanying notes to financial statements are an integral part of these statements. -5- INTERNATIONAL PAPER COMPANY WELDWOOD OF CANADA LIMITED EMPLOYEE PHANTOM SHARE PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2001 AND 2000 1. PLAN DESCRIPTION The following description of the Weldwood of Canada Limited Employee Phantom Share Plan (the Plan) provides only summary information. Reference should be made to the Plan document for a more complete description of the Plan's provisions. Weldwood of Canada Limited (Weldwood) is a Canadian Corporation and was a wholly-owned subsidiary of Champion International Corporation (Champion). On June 20, 2000, International Paper Company acquired Champion. Under the terms of the agreement, Champion shareholders received $50 in cash per share and $25 worth of International Paper common stock for each Champion share. For purposes of the financial statements, references to "the Company" relate to Weldwood and Champion prior to the purchase agreement and Weldwood and International Paper thereafter. The Plan, which became effective on January 1, 1998, is an unfunded retirement plan established for the purpose of encouraging eligible employees of Weldwood to contribute to the growth and profitability of the Company through an equity-based compensation plan. As an unfunded plan, no assets of the Company have been segregated to pay the amounts due to participants under the Plan. The Plan is administered by the Company. Expenses of the Plan are paid by the Company and are not included in the accompanying financial statements. JP Morgan/American Century Retirement Plan Services performs certain administrative and record-keeping functions of the Plan. Among other things, the Plan provides that the Company will allocate to each participant's account an amount equal to a percentage of such participant's incentive compensation, as designated by the participant, plus an additional allocation equal to 10% of the participant's designated deferral. The participant's account (and any earnings thereon) is treated as if it was invested in the Company Stock Fund of the Champion International Corporation Savings Plan #077 (Plan #077). The Company Stock Fund is generally fully invested in common stock of Champion or, subsequent to the acquisition, International Paper. Although the Plan itself has no investment assets, participant accounts are credited with earnings or losses, based upon the actual earnings and losses of the Company Stock Fund for the period. Effective June 20, 2000, in connection with the acquisition of Champion by International Paper, all participant balances invested in the phantom Company Stock Fund of Champion, including the Company additional deferral, were converted into phantom shares of the Company Stock Fund of International Paper in an amount equivalent to the Champion purchase consideration on a per-share basis. Participants are immediately vested in their entire account balance, as adjusted for the earnings and losses previously discussed. All vested amounts are distributable to participants from the assets of the Company upon retirement, death, or other termination of employment in a single lump sum cash payment or in two cash installments. All benefits are payable in Canadian currency. 6 2. SIGNIFICANT ACCOUNTING POLICIES (a) Basis of Accounting--The Plan uses the accrual basis of accounting. (b) Payment of Benefits--Benefits are recorded when paid. (c) Present Value of Accumulated Plan Benefits--Accumulated plan benefits represent the future benefit payments due to participants under the provisions of the Plan. The present value of accumulated plan benefits is equal to the total of the estimated fair value of the participants' account balances (i.e., participant and Company allocation plus (minus) phantom investment earnings (losses) less benefits paid). (Note 1) (d) Foreign Currency Translation--The net assets of the Plan and the accumulated plan benefits are translated into U.S. dollars using the year-end exchange rate. The changes in net assets and accumulated plan benefits are translated using the average exchange rate for the year. The resulting translation gains or losses are included in the translation adjustment included in the Statements of Changes In Net Assets Available for Benefits and the Statements of Changes In Accumulated Plan Benefits. The cumulative translation adjustment at December 31, 2001 and 2000 totaled ($127,819) and ($17,856), respectively. (e) Use of Estimates--The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the financial statements. Actual results could differ from those estimates. 3. PRIORITIES UPON TERMINATION OF THE PLAN The Company may amend or terminate the Plan in whole or in part at any time. No amendment or termination of the Plan shall reduce a participant's benefit under the Plan that has been accrued up to the date of termination or amendment. As an unfunded Plan, no assets of the Company have been segregated to pay amounts due to participants under the Plan. 4. TAX STATUS The Plan is established pursuant to the provisions of subsection 6801(d) of the regulations to the Income Tax Act (Canada). The Plan is subject to income taxes; however the unfunded nature of the Plan generally precludes the occurrence of a taxable event arising from the Plan's operation. Amounts deferred, and earnings credited thereon, are not considered taxable income to participants until distributed. 7 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the person who administers the Plan has duly caused this annual report to be signed by the undersigned thereunto duly authorized. INTERNATIONAL PAPER COMPANY Weldwood of Canada Limited Employee Phantom Share Plan By: /s/ Jerome N. Carter -------------------------------- Jerome N. Carter Senior Vice President and Plan Administrator Dated: March 30, 2004 Stamford, Connecticut EX-23 3 ex23.txt EXHIBIT 23 Exhibit 23 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in Registration Statement No. 333-37390 of International Paper Company on Form S-8 of our report dated March 30, 2004, appearing in this Annual Report on Form 11-K of Weldwood of Canada Limited Employee Phantom Share Plan for the year ended December 31, 2003. /s/ Deloitte & Touche LLP Memphis, Tennessee March 30, 2004 -----END PRIVACY-ENHANCED MESSAGE-----