EX-99 2 ex99-1.htm EXHIBIT 99.1

 

                

INTERNATIONAL PAPER PLAZA

400 ATLANTIC STREET

STAMFORD, CT 06921

News Release

 

Media Contacts:

Jennifer Boardman, 203-541-8407

 

Investor Contacts:

Darial Sneed, 203-541-8541

 

 

Brian Turcotte, 203-541-8632

 

 

International Paper Reports Higher Fourth-Quarter  

Earnings from Continuing Operations

 

•

Earnings from continuing operations of $157 million versus $35 million in the 2003 fourth quarter.

•

Quarterly net sales rose to $6.6 billion from 2003 fourth-quarter net sales of $6.1 billion. Volume up 5 percent versus the 2003 fourth quarter.

•

Annual sales rose 6 percent to $25.5 billion from 2003 annual sales of $24.0 billion.

 

Basic Earnings Per Share Summary  

                

 

Fourth Quarter 2004

 

Fourth Quarter 2003

 

Third Quarter 2004

 

Full Year 2004

 

Full Year 2003

Net Earnings (Loss)

$0.35

 

$0.10

 

$(0.97)

 

$(0.07)

 

$0.63

Add Back – Loss (Income) from Discontinued Operations:

 

 

 

 

 

 

 

 

 

Loss (gain) on sale or impairment

(0.01)

 

-

 

1.48

 

1.28

 

-

Earnings from operations

(0.02)

 

(0.03)

 

(0.08)

 

(0.23)

 

(0.04)

Cumulative Effect of Accounting Change

-

 

0.01

 

-

 

-

 

0.03

Earnings from Continuing Operations

0.32

 

0.08

 

0.43

 

0.98

 

0.62

Add Back – Net Special Items Expense

0.11

 

0.12

 

-

 

0.33

 

0.14

Earnings from Continuing Operations and Before Special Items

$0.43

 

$0.20

 

$0.43

 

$1.31

 

$0.76

 

 

 

 


 

 

STAMFORD, Conn. - Feb. 3, 2005 - International Paper (NYSE: IP) today reported fourth-quarter 2004 earnings from continuing operations of $157 million ($0.32 per share basic and diluted) compared with $35 million ($0.08 per share basic, $0.07 per share diluted) in the fourth quarter of 2003 and $208 million ($0.43 per share basic, $0.42 per share diluted) in the third quarter of 2004. For the full-year 2004, International Paper reported earnings from continuing operations of $478 million ($0.98 per share basic and diluted) compared with $294 million ($0.62 per share basic, $0.61 per share diluted) in 2003. Diluted per share amounts reflect a recent accounting pronouncement requiring the inclusion of contingently convertible securities in computing diluted earnings per share. The above amounts include the effects of special items in all periods.

 

After discontinued operations relating to the sale of Weldwood of Canada Limited, net earnings for the 2004 fourth quarter totaled $169 million ($0.35 per share basic and diluted) compared with a loss of $470 million ($0.97 per share basic, $0.91 per share diluted) in the 2004 third quarter and earnings of $48 million ($0.10 per share basic and diluted) in the fourth quarter of 2003. Full-year 2004 results totaled a net loss of $35 million ($0.07 per share basic and diluted) compared with net earnings of $302 million ($0.63 per share basic and diluted) in 2003.

 

Earnings from continuing operations and before special items in the 2004 fourth quarter were $209 million ($0.43 per share basic, $0.42 per share diluted), compared with $94 million ($0.20 per share basic, $0.19 per share diluted) in the fourth quarter of 2003 and $209 million ($0.43 per share basic, $0.42 per share diluted) in the third quarter of 2004. Earnings from continuing operations and before special items for the full year 2004 were $637 million ($1.31 per share basic, $1.30 diluted), compared with $363 million ($0.76 per share basic, $0.75 per share diluted) for the year 2003.

 

Fourth-quarter 2004 earnings reflect an effective tax rate, excluding special items, discontinued operations and accounting changes, of 16 percent, which reduced the full-year effective tax rate to 26 percent from 30 percent estimated in the third quarter. The lower tax rate reflects an increase in non-US tax credits, a reduction of tax valuation allowances and a higher proportion of earnings in lower tax rate jurisdictions.

 

Fourth-quarter 2004 net sales rose to $6.6 billion from $6.1 billion in the fourth quarter of 2003, and compared with $6.6 billion in the third quarter of 2004. For the full-year 2004, net sales were $25.5 billion compared with 2003 net sales of $24.0 billion.

 

“Throughout 2004, we experienced healthy business conditions with solid volume and improving average price realizations,” said John Faraci, International Paper chairman and chief executive officer. “However, margins and earnings were impacted by dramatically rising raw material costs and lower wood products pricing, particularly in the last quarter.”

 

Commenting on the first quarter of 2005, Faraci said, “Going into February, we are seeing demand starting to improve. After a slow month in January, our order activity is picking up, and our average price realizations are moving up on coated paper, some grades of printing papers, bleached board and pulp. However, our profit margins and earnings will be under pressure as the raw material cost environment continues to be severe. We expect higher benefit-related costs, and the investment we are making to improve our supply chain will be somewhat higher this quarter.”

 

 


 

 

The company also said it will continue to strengthen its balance sheet through the repayment of debt. For example, by the end of January 2005, the company had used the proceeds from the divestitures of Weldwood of Canada and the Maine and New Hampshire forestlands to repay approximately $1.3 billion in debt.

 

Segment Information

 

Operating profits of $583 million for the 2004 fourth quarter were essentially flat compared with the third-quarter 2004 operating profits of $585 million, as the benefit of higher average price realizations in Printing Papers and Packaging were offset by higher input costs and lower wood products price realizations.

 

Fourth-quarter segment operating profits and business trends compared with the third quarter of 2004 are as follows:

 

Fourth-quarter operating profits for Printing Papers were $196 million compared with third-quarter operating profits of $160 million as a result of the company experiencing higher average pricing for uncoated free sheet and coated paper in the United States. This was somewhat offset by weaker average pulp pricing and higher input costs.

 

Industrial and Consumer Packaging operating profits were $170 million in the fourth quarter, compared with $183 million in the third quarter, as higher average pricing across International Paper’s containerboard, corrugated box and bleached board businesses was offset by higher input costs and seasonally lower volumes in Industrial Packaging, maintenance downtime in containerboard and weaker operational performance.

 

The company’s distribution business, xpedx, reported operating profits of $22 million for the fourth quarter compared with operating profits in the third quarter of $27 million, due to seasonally weaker business conditions.

 

Fourth-quarter Forest Products operating profits were $176 million, compared with earnings of $191 million in the third quarter primarily as lower average IP wood products price realizations combined with seasonally slower volumes more than offset $20 million of higher income from land and real estate sales.

 

Operating profits at Carter Holt Harvey, International Paper’s 50.5 percent owned subsidiary in New Zealand, were $12 million in the fourth quarter, compared with third-quarter operating profits of $17 million as a result of facility reorganization costs.

 

Net corporate expenses of $156 million in the 2004 fourth quarter were higher than the $101 million in the 2004 third quarter and the $144 million in the 2003 fourth quarter. The increase in the 2004 fourth quarter compared with the previous quarter reflects higher inventory-related costs, higher costs from the company’s supply chain initiative, and slightly higher administrative overhead costs. Higher inventory-related and supply chain initiative costs were also the major factors in the increase compared to the 2003 fourth quarter, offsetting the effect of lower administrative overhead costs.

 

 

 


 

 

Discontinued Operations

During the 2004 fourth quarter, International Paper completed the sale of Weldwood of Canada Limited for cash proceeds of approximately U.S. $1.1 billion. While still subject to post-closing adjustments, the loss on sale was approximately $84 million less than estimated in the third quarter. The loss on discontinued operations was reduced by $79 million and $5 million in the 2004 third quarter and fourth quarter, respectively. All periods presented have been restated to present the operating results of Weldwood, and the tissue business of Carter Holt Harvey sold in the 2004 second quarter, as discontinued operations.

 

 

Effects of Special Items

 

Special items in the 2004 fourth quarter included a charge of $79 million ($64 million after taxes) for estimated losses on sales and impairments of businesses held for sale, a charge of $19 million before taxes and minority interest ($11 million after taxes and minority interest) for restructuring and other costs, a pre-tax credit of $20 million ($12 million after taxes) for insurance recoveries related to the hardboard siding and roofing litigation, and a $17 million credit ($11 million after taxes) for the net reversal of restructuring and realignment reserves no longer required. The $19 million charge for restructuring and other costs included $10 million ($6 million after taxes and minority interest) for legal reserves, a $6 million goodwill impairment charge ($3 million after minority interest), and a $3 million charge ($2 million after taxes) for losses on early extinguishment of debt. The net after-tax effect of all of these special items was expense of $0.11 per share.

 

Special items in the 2004 third quarter included a charge of $55 million before taxes and minority interest ($31 million after taxes and minority interest) for restructuring and other costs, a pre-tax credit of $103 million ($64 million after taxes) for insurance recoveries related to the hardboard siding and roofing litigation, a charge of $38 million for estimated losses on sales and impairments of businesses held for sale and a $6 million credit ($4 million after taxes) for the net reversal of restructuring and realignment reserves no longer required. The $55 million charge for restructuring and other costs included $18 million ($11 million after taxes and minority interest) for organizational restructuring programs, a $29 million goodwill impairment charge ($15 million after minority interest), and $8 million charge ($5 million after taxes) for losses on early extinguishment of debt. The net after-tax effect of all of these special items was $0.00 per share.

 

Special items in the 2003 fourth quarter included a pretax charge of $101 million ($61 million after taxes and minority interest) for restructuring and other costs, $21 million ($26 million after taxes) of net losses on sales and impairments of businesses held for sale, and a $23 million credit ($15 million after taxes) for the net reversal of restructuring and realignment reserves no longer required. In addition, a $13 million decrease in the income tax provision, after minority interest, was recorded in the fourth quarter reflecting a favorable settlement with Australian tax authorities of net operating loss carryforward credits. The $101 million charge for restructuring and other costs included $91 million ($55 million after taxes and minority interest) for facility closures and organizational restructuring programs, $29 million ($18 million after taxes) for additional legal reserves, and a credit of $19 million ($12 million after taxes) for gains on early extinguishment of debt. The net after-tax effect of these special items was an expense of $0.12 per share. Additionally, an after-tax charge of $3 million ($0.01 per share) was recorded for the

 


 

cumulative effect of an accounting change, for a total expense of $0.13 per share in the quarter from special items and accounting changes.

 

The company will hold a webcast to discuss earnings and current market conditions at 10 a.m. (EST) today. All interested parties are invited to listen to the webcast live via the company's Internet site at http://www.internationalpaper.com by clicking on the Investor Information button. A replay of the webcast will also be available on the Web site beginning at noon today.

 

International Paper (http://www.internationalpaper.com) is the world's largest paper and forest products company. Businesses include paper, packaging, and forest products. As one of the largest private forest landowners in the world, the company manages its forests under the principles of the Sustainable Forestry Initiative® (program, a system that ensures the continual planting, growing and harvesting of trees while protecting wildlife, plants, soil, air and water quality. Headquartered in the United States, International Paper has operations in over 40 countries and sells its products in more than 120 nations.

 

# # #

 

Statements in this press release that are not historical are forward-looking. These statements are subject to risks and uncertainties that could cause actual results to differ materially, including but not limited to, the strength of demand for the company’s products and changes in overall demand, the effects of competition from foreign and domestic producers, the level of housing starts, changes in the cost or availability of raw materials, unanticipated expenditures related to the cost of compliance with environmental and other governmental regulations, the ability of the company to continue to realize anticipated cost savings, performance of the company’s manufacturing operations, results of legal proceedings, changes related to international economic conditions, changes in currency exchange rates, particularly the relative value of the U.S. dollar to the Euro, economic conditions in developing countries, specifically Brazil and Russia, the current military action in Iraq and the war on terrorism. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.  These and other factors that could cause or contribute to actual results differing materially from such forward looking statements are discussed in greater detail in the company's Securities and Exchange Commission filings.

 

 


 

 

International Paper

Summary of Consolidated Earnings

Preliminary and Unaudited

(In millions except for net sales and per share amounts)

 

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

 

 

December 31,

 

December 31,

 

 

 

 

 

 

2004

 

 

2003

 

 

2004

 

 

 

2003

 

 

 

Net Sales (In billions)

 

 

$6.6

 

 

$6.1

 

 

$25.5

 

 

$24.0

 

 

 

Earnings From Continuing Operations Before

Interest, Income Taxes, and Minority Interest

 

 

 

383

 

 

(a)

 

 

194

 

 

(f)

 

 

1,489

 

 

(d)

 

 

1,064

 

 

(i)

 

 

Interest expense, net

 

 

175

 

 

187

 

(g)

 

743

 

 

772

(g)

 

 

Earnings From Continuing Operations Before

Income Taxes and Minority Interest

 

 

 

208

 

 

 

(a)

 

 

7

 

 

(f,g)

 

 

746

 

 

(d)

 

 

292

 

 

(i)

 

 

Income tax provision (benefit)

 

 

38

 

(a)

 

(49)

 

(f,g,h)

 

206

 

(c,d)

 

(113)

 

(g,h,i,j)

 

 

Minority interest expense, net of taxes

 

 

13

 

(a)

 

21

 

(f,g)

 

62

 

(d)

 

111

 

(f,g,i)

 

 

Earnings From Continuing Operations

 

 

 

157

 

 

(a)

 

 

35

 

 

(f,h)

 

 

478

 

 

(c,d)

 

 

294

 

 

(h,i,j)

 

Discontinued Operation, net of taxes and minority

interest

 

 

 

12

 

 

(b)

 

 

16

 

 

 

 

 

(513)

 

 

(b,e)

 

 

21

 

 

 

 

 

Cumulative Effect of Accounting Changes:

Asset Retirement Obligations, net of taxes

 

 

 

-

 

-

 

 

 

-

 

 

 

(10)

 

 

Variable Interest Entities, net of taxes

 

-

 

(3)

 

-

 

(3)

 

 

 

Net Earnings (Loss)

 

 

$169

(a,b)

 

$48

 

(f,h)

 

$(35)

 

(b,c,d,e)

 

$302

 

(h,i,j)

 

Basic Earnings Per Share:

 

 

 

 

 

 

 

 

 

 

Earnings From Continuing Operations

 

$0.32

(a)

 

$0.08

(f,h)

 

$0.98

(c,d)

 

$0.62

(h,i,j)

 

Discontinued Operation, net of taxes and minority

interest

 

0.03

(b)

0.03

 

(1.05)

 

(b,e)

0.04

 

 

Cumulative Effect of Accounting Changes:

Asset Retirement Obligations, net of taxes

 

-

 

-

 

-

 

(0.02)

 

 

Variable Interest Entities, net of taxes

 

-

 

(0.01)

 

-

 

(0.01)

 

 

 

Basic Earnings (Loss) Per Common Share

 

 

$0.35

 

(a,b)

 

$0.10

 

(f,h)

 

$(0.07)

 

(b,c,d,e)

 

$0.63

 

(h,i,j)

 

Diluted Earnings Per Share:

 

 

 

 

 

 

 

 

 

 

Earnings From Continuing Operations

 

$0.32

(a)

$0.07

(f,h)

$0.98

(c,d)

$0.61

(h,i,j)

 

Discontinued Operation, net of taxes and minority

interest

 

0.03

(b)

0.03

 

(1.05)

(b,e)

0.04

 

 

Cumulative Effect of Accounting Changes:

Asset Retirement Obligations, net of taxes

 

-

 

-

 

-

 

(0.02)

 

 

Variable Interest Entities, net of taxes

 

-

 

(0.01)

 

-

 

(0.01)

 

 

 

Diluted Earnings (Loss) Per Common Share

 

$0.35

 

(a,b)

$0.10

 

(f,h)

$(0.07)

 

(b,c,d,e)

$0.63

 

(h,i,j)

 

Average Shares of Common Stock Outstanding

 

486.9

 

480.7

 

485.8

 

479.6

 

 

 

 

 

 


 

 

 

(a)

Includes a pretax charge of $79 million ($64 million after taxes) for estimated losses on sales of businesses; a $19 million charge before taxes and minority interest ($11 million after taxes and minority interest) for litigation settlements, goodwill impairment charges and losses on early debt extinguishment; a credit of $20 million ($12 million after taxes) for insurance recoveries related to the hardboard siding and roofing litigation; and a credit of $17 million before taxes and minority interest ($11 million after taxes and minority interest) for the reversal of restructuring and realignment reserves no longer required.

 

(b)

Includes the net income of Weldwood of Canada, Ltd. prior to its sale in the 2004 fourth quarter, and a credit of $5 million after taxes and a charge of $711 million after taxes for the three and twelve months ended December 31, 2004, respectively, relating to the loss on the sale.

 

(c)

Includes a $5 million net increase, net of minority interest, in the income tax provision reflecting an adjustment of deferred tax balances and a reduction of valuation reserves for capital loss carryovers.

 

(d)

Includes a charge of $144 million before taxes and minority interest ($128 million after taxes and minority interest) for estimated gains/losses of businesses sold or held for sale; a $211 million charge before taxes and minority interest ($124 million after taxes and minority interest) for litigation settlements, goodwill impairment charges, and losses on early debt extinguishment; a pretax credit of $123 million ($76 million after taxes) for insurance recoveries related to the hardboard siding and roofing litigation; and a credit of $35 million before taxes and minority interest ($22 million after taxes and minority interest) for the net reversal of restructuring and realignment reserves no longer required.

 

(e)

Includes the net income of the Carter Holt Harvey tissue business prior to the sale and the gain on the sale of $267 million ($90 million after taxes and minority interest) in the second quarter of 2004.

 

(f)

Includes a $101 million charge before taxes and minority interest ($61 million after taxes and minority interest) for facility closures and organizational restructuring programs, net losses on early debt extinguishment, and additional legal reserves; a pre-tax charge of $21 million ($26 million after taxes) for net losses on sales and impairments of businesses held for sale; and a credit of $23 million before taxes and minority interest ($15 million after taxes and minority interest) for the net reversal of restructuring and realignment reserves no longer required.

 

(g)

Includes an increase in interest expense and a decrease in minority interest expense of approximately $22 million and $44 million for the three and twelve months ended December 31, 2003, respectively, related to the adoption of FIN 46R

 

(h)

Includes the decrease of $26 million before minority interest ($13 million after minority interest) in the income tax provision related to a settlement of Australian net operating loss carryforward credits.

 

(i)

Includes a $298 million charge before taxes and minority interest ($184 million after taxes and minority interest) for facility closures and organizational restructuring programs, early debt extinguishment losses, and additional legal reserves; a pre-tax charge of $32 million ($33 million after taxes) net losses on sales and impairments of businesses held for sale; and a credit of $40 million before taxes and minority interest ($25 million after taxes and minority interest) for the net reversal of restructuring and realignment reserves no longer required.

 

(j)

Includes decreases of $110 million in the income tax provision reflecting a revision of estimated tax reserves upon filing of the 2002 Federal income tax return and settlements of prior period tax issues.

 

 

 

 

 


 

 

International Paper

Reconciliation of Earnings Before

Special Items to Net Earnings (Loss)

Preliminary and Unaudited

(In millions except for per share amounts)

 

 

 

Three Months Ended

 

 

Twelve Months Ended

 

 

 

December 31,

 

 

December 31,

 

 

 

2004

 

2003

 

 

2004

 

2003

 

Earnings Before Special Items

$

209

$

94

 

$

637

$

363

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring and other charges

 

(11)

 

(61)

 

 

(124)

 

(184)

 

Insurance Recoveries

 

12

 

-

 

 

76

 

-

 

Reversal of reserves no longer required

 

11

 

15

 

 

22

 

25

 

Net gains (losses) on sales and impairments

of businesses held for sale

 

 

(64)

 

 

(26)

 

 

 

(128)

 

 

(33)

 

Income tax adjustment

 

-

 

13

 

 

(5)

 

123

 

Earnings From Continuing Operations

 

157

 

35

 

 

478

 

294

 

Discontinued Operation

 

12

 

16

 

 

(513)

 

21

 

Cumulative effect of accounting changes

 

-

 

(3)

 

 

-

 

(13)

 

Net Earnings (Loss) as Reported

$

169

$

48

 

$

(35)

$

302

 

 

 

 

Three Months Ended

 

 

Twelve Months Ended

 

 

 

December 31,

 

 

December 31,

 

Basic Earnings Per Common Share (3):

 

2004

 

2003

 

 

2004

 

2003

 

Earnings Per Share Before Special Items

$

0.43

$

0.20

 

$

1.31

$

0.76

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring and other charges

 

(0.02)

 

(0.13)

 

 

(0.25)

 

(0.39)

 

Insurance Recoveries

 

0.02

 

-

 

 

0.15

 

-

 

Reversal of reserves no longer required

 

0.02

 

0.03

 

 

0.04

 

0.05

 

Net gains (losses) on sales and impairments

of businesses held for sale

 

 

(0.13)

 

 

(0.05)

 

 

 

(0.26)

 

 

(0.06)

 

Income tax adjustment

 

-

 

0.03

 

 

(0.01)

 

0.26

 

Earnings Per Common Share From Continuing Operations

 

0.32

 

0.08

 

 

0.98

 

0.62

 

Discontinued Operation

 

0.03

 

0.03

 

 

(1.05)

 

0.04

 

Cumulative effect of accounting changes

 

-

 

(0.01)

 

 

-

 

(0.03)

 

Basic Earnings (Loss) per Common Share

$

0.35

$

0.10

 

$

(0.07)

$

0.63

 

 

Diluted Earnings Per Common Share (3):

 

 

 

 

 

 

 

 

 

 

Earnings Per Common Share

Before Special Items

$

0.42

$

0.19

 

 

$

1.30

$

0.75

 

 

 

 

 

 

 

 

 

 

 

 

Special Items

 

(0.10)

 

(0.12)

 

 

(0.33)

 

(0.14)

 

Earnings From Continuing Operations

 

0.32

 

0.07

 

 

0.98

 

0.61

 

Discontinued Operation

 

0.03

 

0.03

 

 

(1.05)

 

0.04

 

Cumulative effect of accounting changes

 

-

 

(0.01)

 

 

-

 

(0.03)

 

Diluted Earnings (Loss) per Common Share

$

0.35

$

0.10

 

$

(0.07)

$

0.63

 

 

Notes:

(1) The company calculates Earnings Before Special Items by excluding the after-tax effect of the adoption of new accounting standards and items considered by management to be unusual from the net earnings (loss) reported under generally accepted accounting principles (“GAAP”). Management uses this measure to focus on on-going operations, and believes that it is useful to investors because it enables them to perform meaningful comparisons of past and present operating results. International Paper believes that using this information along with net earnings (loss) provides for a more complete analysis of the results of operations by quarter. Net earnings (loss) is the most directly comparable GAAP measure.

(2) Diluted earnings per common share reflects a recent accounting pronouncement requiring the inclusion of contingently convertible securities in the computation. As required by the pronouncement, all prior periods presented have been restated.

(3) Since the basic and diluted earnings per share are computed independently for each period and category, total per share amounts may not equal the sum of the respective categories.

 


 

 

International Paper

Sales and Earnings by Industry Segment

Preliminary and Unaudited

(In Millions)

 

Sales by Industry Segment

 

 

Three Months

 

Twelve Months

 

 

Ended

 

Ended

 

 

December 31,

 

December 31,

 

 

2004

 

 

2003(1)

 

2004

 

 

2003(1)

Printing Papers

$

1,975

 

$

1,800

$

7,635

 

$

7,245

Industrial and Consumer Packaging

 

1,990

 

 

1,715

 

7,470

 

 

6,670

Distribution

 

1,550

 

 

1,470

 

6,065

 

 

5,860

Forest Products

 

570

 

 

640

 

2,395

 

 

2,390

Carter Holt Harvey

 

585

 

 

515

 

2,190

 

 

1,820

Other Businesses (2)

 

260

 

 

275

 

1,120

 

 

1,235

Less: Intersegment Sales

 

(343)

 

 

(281)

 

(1,343)

 

 

(1,265)

 

 

 

$

 

6,587

 

 

$

 

6,134

 

$

 

25,532

 

 

$

 

23,955

 

 

 

 

 

 

 

Earnings by Industry Segment

 

 

Three Months

Ended

 

Twelve Months

Ended

 

 

December 31,

 

December 31,

 

 

2004

 

 

2003(1)

 

2004

 

 

2003(1)

Printing Papers

$

196

 

$

65

$

579

 

$

460

Industrial and Consumer Packaging

 

170

 

 

111

 

543

(3)

 

451

Distribution

 

22

 

 

18

 

87

 

 

80

Forest Products

 

176

 

 

218

 

793

 

 

720

Carter Holt Harvey

 

12

 

 

8

 

47

(3)

 

38

Other Businesses (2)

 

7

 

 

9

 

38

 

 

23

 

Operating Profit

 

 

583

 

 

 

429

 

 

2,087

 

 

 

1,772

 

Interest expense, net

 

 

(175)

 

 

 

(187)

 

 

(743)

 

 

 

(772)

Minority interest (4)

 

17

 

 

8

 

59

(3)

 

48

Corporate items, net

 

(156)

 

 

(144)

 

(469)

 

 

(466)

Restructuring and other charges

 

(19)

 

 

(101)

 

(211)

 

 

(298)

Insurance recoveries

 

20

 

 

-

 

123

 

 

-

Net gains (losses) on sales and impairments of businesses held for sale

 

(79)

 

 

(21)

 

(135)

 

 

(32)

Reversal of reserves no longer required

 

17

 

 

23

 

35

 

 

40

 

 

 

 

 

 

 

 

 

 

 

Earnings from continuing operations before income taxes and minority interest

$

208

 

$

7

$

746

$

 

292

 

(1)

Prior-year industry segment information has been restated to conform with 2004 management structure and to reflect the Carter Holt Harvey tissue business and the Weldwood business as discontinued operations.

 

(2)

Includes Arizona Chemical, Chemical Cellulose Pulp (closed in 2003) and businesses identified in our divestiture program.

 

(3)

Includes a 2004 second quarter estimated loss on the sale of Food Pack S.A. of $9 million before taxes, of which $4 million is in the Packaging segment, $3 million is in the Carter Holt Harvey segment and $2 million is in Minority interest.

 

(4)

Operating profits for industry segments include each segment’s percentage share of the profits of subsidiaries included in that segment that are less than wholly owned. The pre-tax minority interest for these subsidiaries is added here to present consolidated earnings before income taxes, minority interest, extraordinary items, and cumulative effect of accounting changes.

 

 

 


 

 

International Paper

Sales Volumes by Product (1) (2)

Preliminary and Unaudited

 

International Paper Consolidated (excluding Carter Holt Harvey)

 

 

Three Months Ended

 

Twelve Months Ended

 

December 31,

 

December 31,

 

2004

 

2003

 

2004

 

2003

 

 

 

 

 

 

 

 

Printing Papers (In thousands of short tons)

 

 

 

 

 

 

 

Brazil Uncoated Papers

116

 

114

 

461

 

447

Europe & Russia Uncoated Papers

373

 

342

 

1,409

 

1,352

U.S. Uncoated Papers and Bristols

1,115

 

1,107

 

4,570

 

4,439

Uncoated Papers and Bristols

1,604

 

1,563

 

6,440

 

6,238

Coated Papers

532

 

532

 

2,173

 

2,113

Market Pulp

374

 

381

 

1,422

 

1,379

 

 

 

 

 

 

 

 

Packaging (In thousands of short tons)

 

 

 

 

 

 

 

U.S. Container (Boxes)

721

 

548

 

2,668

 

2,204

European Container (Boxes)

282

 

274

 

1,049

 

1,031

Other Industrial and Consumer Packaging

308

 

290

 

1,222

 

1,148

Industrial and Consumer Packaging

1,311

 

1,112

 

4,939

 

4,383

Containerboard

461

 

504

 

2,090

 

1,946

Bleached Packaging Board

367

 

351

 

1,495

 

1,348

Kraft

137

 

151

 

605

 

606

 

 

 

 

 

 

 

 

Forest Products (In millions)

 

 

 

 

 

 

 

Panels (sq. ft. 3/8” – basis)

362

 

375

 

1,563

 

1,580

Lumber (board feet)

606

 

589

 

2,456

 

2,345

Particleboard (sq. ft. 3/4” – basis)

-

 

-

 

-

 

-

 

 

 

 

 

 

 

 

Carter Holt Harvey (3)

 

Three Months Ended

 

Twelve Months Ended

 

December 31,

 

December 31,

 

2004

 

2003

 

2004

 

2003

 

 

 

 

 

 

 

 

Printing Papers (In thousands of short tons)

 

 

 

 

 

 

 

Market Pulp

157

 

155

 

568

 

499

 

 

 

 

 

 

 

 

Packaging (In thousands of short tons)

 

 

 

 

 

 

 

Containerboard

123

 

107

 

459

 

361

Bleached Packaging Board

24

 

19

 

83

 

84

Industrial and Consumer Packaging

34

 

38

 

147

 

153

 

 

 

 

 

 

 

 

Forest Products (In millions)

 

 

 

 

 

 

 

Panels (sq. ft. 3/8” – basis)

43

 

44

 

183

 

179

Lumber (board feet)

119

 

128

 

497

 

503

MDF and Particleboard (sq. ft. 3/4” – basis)

142

 

141

 

580

 

582

 

 

 

 

 

 

 

 

 

(1) Includes third party and inter-segment sales.

(2) Sales volumes for divested businesses are included through the date of sale except for discontinued operations.

(3) Includes 100 percent of volumes sold.

 

 


 

 

 

International Paper

Supplemental Financial Data

Preliminary and Unaudited

 

Financial Data (In millions)

 

 

Three Months Ended

 

Twelve Months Ended

 

 

December 31,

 

December 31,

 

 

2004

 

2003

 

2004

 

2003

 

 

 

 

 

 

 

 

 

Depreciation, amortization and cost of

 

 

 

 

 

 

 

 

timber harvested

$

411

$

390

$

1,565

$

1,538

 

 

 

 

 

 

 

 

 

Investment in capital projects (1)

$

516

$

463

$

1,328

$

1,166

 

(1) Includes $19 million and $66 million of spending for businesses held for sale for the three months and twelve months ended December 31, 2004, respectively. Includes $31 million and $72 million of spending for businesses held for sale for the three months and twelve months ended December 31, 2003, respectively.

 

 

 


 

 

INTERNATIONAL PAPER COMPANY

Consolidated Balance Sheet

Preliminary and Unaudited

(In Millions)

 

 

 

December 31,

 

December 31,

 

2004

 

2003

Assets

 

 

 

Current Assets

 

 

 

Cash and temporary investments

$           2,596

 

$           2,363

Accounts and notes receivable, net

2,982

 

2,765

Inventories

2,653

 

2,767

Assets of businesses held for sale

383

 

2,104

Other current assets

869

 

1,097

Total Current Assets

9,483

 

11,096

 

 

 

 

Plants, Properties and Equipment, net

13,333

 

13,260

Forestlands

3,936

 

3,979

Investments

679

 

678

Goodwill

4,988

 

4,793

Deferred Charges and Other Assets

1,859

 

1,719

Total Assets

$        34,278

 

$        35,525

 

 

 

 

Liabilities and Common Shareholders’ Equity

 

 

 

Current Liabilities

 

 

 

Notes payable and current maturities of long-term debt

$              506

 

$           2,087

Liabilities of businesses held for sale

110

 

645

Accounts payable and accrued liabilities

4,317

 

4,538

Total Current Liabilities

4,933

 

7,270

 

 

 

 

Long-Term Debt

14,131

 

13,450

Deferred Income Taxes

1,700

 

1,387

Other Liabilities

3,712

 

3,559

Minority Interest

1,548

 

1,622

 

 

 

 

 

 

 

 

Common Shareholders’ Equity

 

 

 

Invested capital

5,692

 

5,155

Retained earnings

2,562

 

3,082

Total Common Shareholders’ Equity

8,254

 

8,237

 

 

 

 

Total Liabilities and Common Shareholders’ Equity

$          34,278

 

$        35,525

 

 

 

Note:

December 31, 2003 balances have been restated to include the assets and liabilities of the

Carter Holt Harvey tissue business and Weldwood of Canada as businesses held for sale.