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Exhibit 99.1
INTERNATIONAL PAPER PLAZA
400 ATLANTIC STREET
STAMFORD, CT 06921
News Release
CONTACTS:
Media: Jennifer Boardman, 203-541-8407
Investors: Carol Tutundgy, 203-541-8632
Darial Sneed, 203-541-8541
International Paper Reports Fourth-Quarter 2001 Earnings
Stamford, Conn. - Jan. 22, 2002 - International Paper (NYSE: IP) today reported
2001 fourth-quarter earnings of $58 million ($0.12 per share), compared with
$145 million ($0.28 per share) in the fourth quarter 2000 and $68 million ($0.14
per share) in the third quarter 2001. All figures are before special and
extraordinary items.
For the year 2001, International Paper reported earnings of $214 million ($0.44
per share) before special and extraordinary items, compared with 2000 full year
net earnings of $969 million ($2.16 per share) before special and extraordinary
items.
Fourth quarter net sales were $6.3 billion compared with $7.2 billion for the
same period in 2000 and $6.5 billion in the third quarter of 2001. Sales for the
year 2001 were $26.4 billion compared to 2000 annual sales of $28.2 billion.
"Our earnings improved in the second half compared to first half performance,
due in large part to our cost reduction programs and business and facility
rationalizations. This positively impacted our results for the year," said John
Dillon, International Paper chairman and chief executive officer. "There is no
doubt the company continued to face weak economic conditions during the fourth
quarter; but we remain focused on key internal improvements, and we continue to
manage our inventories. At year-end, our inventory levels were nearly 10 percent
lower than a year ago."
During the fourth quarter, the company also benefited from increased volumes of
large land sales in our Forest Resources business and an adjustment in the
annual tax rate that resulted in $0.05 and $0.03 per share improvements,
respectively, in earnings before special and extraordinary items for the quarter
as compared with third quarter 2001.
After special items, International Paper reported a 2001 fourth-quarter net loss
of $572 million ($1.19 per share), compared with a net loss of $371 million
($0.85 per share) in the 2000 fourth quarter after special and extraordinary
items. In the third quarter of 2001, the company reported a net loss of $275
million ($0.57 per share) after special items.
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Special items in the 2001 fourth quarter totaled a loss of $745 million ($630
million after taxes, or $1.31 per share), including charges for asset shutdowns
of excess internal capacity and cost reduction actions, losses related to
dispositions and asset impairments of businesses held for sale, and a credit for
the reversal of reserves no longer required. In the fourth quarter of 2000,
special and extraordinary items netted to a loss of $762 million ($516 million
after tax, or $1.13 per share). This included special charges for asset
shutdowns of excess internal capacity and cost reduction actions, merger
integration costs related to the Champion acquisition, and a credit for the
reversal of reserves no longer required as well as a net extraordinary loss
related to dispositions and asset impairments of businesses held for sale.
Third-quarter 2001 special items of $434 million ($343 million after taxes, or
$0.71 per share) included charges for asset shutdowns of excess internal
capacity and cost reduction actions, an increase in litigation related reserves,
and a net loss related to dispositions and asset impairments of businesses held
for sale.
After special and extraordinary items, International Paper reported a 2001 net
loss of $1.2 billion ($2.50 per share). Net earnings for 2000 after special and
extraordinary items were $142 million ($0.32 per share).
"In 2001, we made significant progress toward our programs to change the company
- - focusing on our core businesses, divesting non-strategic assets, aggressively
managing costs and capital spending and enhancing our focus on customers," said
Dillon.
Since the completion of its June 2000 acquisition of Champion International,
International Paper has completed divestitures totaling $2.7 billion. During the
fourth quarter, International Paper announced the addition of its Industrial
Papers business to the company's divestiture program. The company also announced
plans to shut down the Oswego, N.Y., containerboard mill and completed the
previously announced shutdown of the Erie, Pa., pulp operation, at the end of
the fourth quarter.
Commenting on the coming year, Dillon said, "Although we expect a weak first
quarter, we do expect to see improvement begin in the second quarter. While
macro-economic factors will impact results, we expect our performance will
improve in 2002."
Segment Information
Compared to fourth quarter 2000, earnings were down in most segments reflecting
lower volumes and prices caused by the economic slowdown and the strong U.S.
dollar.
Fourth-quarter segment earnings and business trends compared with the third
quarter of 2001 are as follows.
Fourth-quarter earnings for Printing Papers were $119 million, down from
third-quarter 2001 earnings of $146 million as a result of seasonally reduced
demand for coated paper. Demand was also lower in commercial printing grades,
while pulp remained under pricing pressure.
Industrial and Consumer Packaging earnings were $129 million in the fourth
quarter, up slightly from $127 million in the third quarter. Bleached Board
shipments were stronger versus the prior
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quarter, marginally offsetting the impact of the strong dollar and lower prices
across the sector. Containerboard volume was steady, but lower prices and mix
resulted in decreased earnings.
The company's distribution business, xpedx, reported a $10 million loss for the
fourth quarter 2001 compared with earnings in the third quarter of $5 million,
as a result of weak business conditions and lower sales volumes.
Fourth-quarter Forest Products earnings of $153 million were down from $184
million in the third quarter 2001. Earnings were impacted by sharply lower
lumber prices and volume, which were partially offset by solid results in the
Forest Resources business.
Earnings at Carter Holt Harvey, International Paper's 50.5 percent owned
subsidiary in New Zealand, rose to $8 million in the fourth quarter 2001, versus
third-quarter 2001 losses of $1 million. Strong Australian residential
construction volumes and seasonal improvement in New Zealand were coupled with
strong tissue and packaging sales.
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. Persons who wish to listen to the live earnings webcast must
pre-register at the site prior to the webcast. A replay of the webcast will also
be available on the web-site beginning at 1 p.m. (EST) this afternoon.
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 (SFI'sm') program, a system that ensures the perpetual 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 nearly 50 countries and exports its products to more than 130
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 risks related to the effects on our
business of our efforts to balance internal supply with demand, whether
anticipated merger, restructuring and divestiture benefits can be achieved, and
conditions affecting demand for our products, including impacts relating to
foreign exchange rates as well as any changes in business, political and
economic conditions due to the September 11, 2001 terrorist attacks in the
United States, the threat of future terrorist activity in the United States and
other parts of the world, and related U.S. military action overseas.
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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,
---------------------------- -------------------------------
2001 2000 2001 2000
--------- ----------- --------- --------
Net Sales (In billions) $6.3 $7.2 $26.4 $28.2
--------- ----------- --------- --------
Earnings (Loss) Before Interest, Income Taxes,
Minority Interest, Extraordinary Items
and Cumulative Effect of Accounting
Change (422)(a) (252) (e) (336)(b) 1,539(g)
Interest expense, net 211 251 929 816
--------- ----------- --------- --------
Earnings (Loss) Before Income Taxes, Minority
Interest, Extraordinary Items and
Cumulative Effect of Accounting Change (633)(a) (503) (e) (1,265)(b) 723(g)
Income tax provision (benefit) (96)(a) (232) (e) (270)(b) 117(g)
Minority interest expense, net of taxes 35 50 147 b) 238(g)
--------- ----------- --------- --------
Earnings (Loss) Before Extraordinary Items
And Cumulative Effect of Accounting Change (572)(a) (321) (e) (1,142)(b) 368(g)
Gains (losses) on sales of investments and
businesses, net of taxes and minority
interest - (50) (f) (46)(c) (226)(h)
Cumulative effect of change in
accounting for
derivatives and hedging activities,
net of taxes
and minority interest - - (16) -
--------- ----------- --------- --------
Net Earnings (Loss) $(572)(a) $(371) (e,f) $(1,204)(b,c) $142(g,h)
========= =========== ========= ========
Earnings (Loss) Per Common Share Before
Extraordinary Items and Cumulative
Effect of Accounting Change $(1.19)(a) $(0.67) (e) $(2.37)(b) $0.82(g)
Earnings (Loss) Per Common Share -
Extraordinary Items - (0.10) (f) (0.10)(c) (0.50)(h)
Cumulative Effect of Accounting Change - - (0.03) -
--------- ----------- --------- --------
Earnings (Loss) Per Common Share $(1.19)(a) $(0.77) (d,e,f) $(2.50)(b,c) $0.32(d,g,h)
========= =========== ========= ========
Earnings (Loss) Per Common Share -
Assuming Dilution $(1.19)(a) $(0.77) (d,e,f) $(2.50)(b,c) $0.32(d,g,h)
========= =========== ========= ========
Average Shares of Common Stock Outstanding 481.9 481.4 482.6 449.6
========= =========== ========= ========
(a) Includes a pre-tax charge of $171 million ($111 million after taxes)
for asset shutdowns of excess internal capacity and cost reduction
actions, a pre-tax charge of $591 million ($530 million after taxes)
related to dispositions and asset impairments of businesses held for
sale, and a $17 million pre-tax credit ($11 million after taxes) for
the reversal of reserves no longer required.
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(b) Includes a gain of $215 million before taxes ($137 million after taxes)
on the sale of Curtis-Palmer, an $844 million pre-tax charge ($724
million after taxes) related to dispositions and asset impairments of
businesses held for sale, an $892 million charge before taxes and
minority interest ($606 million after taxes and minority interest) for
asset shutdowns of excess internal capacity and cost reduction actions,
a $225 million pre-tax charge ($146 million after taxes) for additional
Masonite legal reserves, a $42 million pre-tax charge ($28 million
after taxes) for Champion merger integration costs, and a $17 million
pre-tax credit ($11 million after taxes) for the reversal of reserves
no longer required.
(c) Includes an extraordinary pre-tax charge of $73 million ($46 million
after taxes) related to the impairment of the Masonite business to be
sold and the divestiture of the Petroleum and Minerals assets.
(d) In order for the year-to-date earnings per share to equal the sum of
the quarters, a loss of $0.85 is required in the fourth quarter. The
sum of each quarter's earnings (loss) per share for 2000 calculated on
the basis of the weighted-average shares outstanding during each of the
respective quarters is $0.18 per share higher than the twelve months
year-to-date earnings per share calculated based on the year-to-date
weighted-average number of shares outstanding. This is a result of 68.7
million shares being issued in June 2000 related to the Champion
acquisition. On a stand-alone basis, the fourth quarter loss per share,
inclusive of special and extraordinary items was $0.77 per share.
However, in order for the quarterly earnings per share to add to the
year-to-date earnings per share, a loss of $0.85 per share is required.
(e) Includes a charge of $753 million ($467 million after taxes and
minority interest) for asset shutdowns of excess internal capacity and
cost reduction actions, a pre-tax charge of $27 million ($16 million
after taxes) for Union Camp and Champion merger related items, and a
$28 million pre-tax credit ($17 million after taxes) for the reversal
of reserves no longer required.
(f) Includes an extraordinary pre-tax gain of $368 million ($183 million
after taxes) related to the sale of Bush Boake Allen, an extraordinary
loss of $5 million before taxes and minority interest ($2 million after
taxes and minority interest) related to Carter Holt Harvey's sale of
its Plastics division, and an extraordinary pre-tax charge of $373
million ($231 million after taxes) for the impairment of assets of the
following businesses held for sale: Flexible Packaging in Argentina,
Chemical Cellulose pulp and Fine Papers.
(g) Includes a pre-tax charge of $949 million ($589 million after taxes and
minority interest) for asset shutdowns of excess internal capacity,
restructuring reserves, and additions to existing Masonite litigation
reserves, a $54 million pre-tax charge ($33 million after taxes) for
Union Camp and Champion merger related items, and a $34 million pre-tax
credit ($21 million after taxes) for the reversal of reserves no longer
required.
(h) Includes an extraordinary gain of $385 million before taxes and
minority interest expense ($134 million after taxes and minority
interest expense) on the sale of our investment in Scitex and Carter
Holt Harvey's sale of its share of COPEC, an extraordinary pre-tax gain
of $368 million ($183 million after taxes) related to the sale of Bush
Boake Allen, an extraordinary loss of $5 million before taxes and
minority interest ($2 million after taxes and minority interest)
related to Carter Holt Harvey's sale of its Plastics division, and an
extraordinary pre-tax charge of $833 million ($541 million after taxes)
for the impairment of assets of the following businesses held for sale:
Masonite, Zanders, Flexible Packaging in Argentina, Chemical Cellulose
pulp, and Fine Papers.
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International Paper
Sales by Industry Segment
Preliminary and Unaudited
(In Millions)
Three Months Ended Twelve Months Ended
December 31, December 31,
----------------------------- ---------------------------
2001 2000(1) 2001(1) 2000(1)
----------- ----------- ------------ ---------
Printing Papers $ 1,840 $ 2,065 $ 7,815 $ 7,210
Industrial and Consumer Packaging 1,555 1,660 6,280 6,625
Distribution 1,615 1,875 6,790 7,255
Forest Products 725 665 2,855 2,380
Carter Holt Harvey 460 370 1,710 1,675
Other Businesses (2) 405 990 2,325 4,230
Less: Intersegment Sales (346) (397) (1,412) (1,195)(3)
------- ------- -------- --------
$ 6,254 $ 7,228 $ 26,363 $ 28,180
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(1) Certain reclassifications and adjustments have been made to current year and
prior year amounts.
(2) Includes businesses identified in the company's divestiture program.
(3) Includes results from operations of Champion from date of acquisition, June
20, 2000, through June 30, 2000.
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International Paper
Earnings by Industry Segment
Preliminary and Unaudited
(In Millions)
Three Months Ended Twelve Months Ended
December 31, December 31,
--------------------------- ----------------------------
2001 2000(1) 2001(1) 2000(1)
------------ ---------- ----------- -----------
Printing Papers $ 119 $ 257 $ 538 $ 930
Industrial and Consumer Packaging 129 143 508 741
Distribution (10) 23 21 120
Forest Products 153 119 655 564
Carter Holt Harvey 8 10 13 71
Other Businesses (2) 3 33 52 233
Corporate - - - 26(3)
-------- ----------- ----------- -----------
Operating Profit 402 585 1,787 2,685
Interest expense, net (211) (251) (929) (816)
Minority interest adjustment 10 14 17 108
Corporate items, net (89) (99) (369) (285)
Merger integration costs - (27) (42) (54)
Restructuring and other charges (171) (753) (1,117) (949)
Gains (losses) on sales and impairments of
businesses held for sale (591) - (629) -
Reversal of reserves no longer required 17 28 17 34
-------- ----------- ----------- -----------
Earnings (loss) before income taxes, minority
interest, extraordinary items and
cumulative effect of accounting change $ (633) $ (503) $ (1,265) $ 723
======== =========== =========== ===========
(1) Certain reclassifications and adjustments have been made to current year and
prior year amounts.
(2) Includes businesses identified in the company's divestiture program.
(3) Includes results from operations of Champion from date of acquisition, June
20, 2000, through June 30, 2000.
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INTERNATIONAL PAPER
2000 and 2001 Segment Sales and Operating Profit Restated to
Conform to Current Segment Presentation
PRELIMINARY AND UNAUDITED
(In Millions)
Three Months Ended Three Months Ended Three Months Ended
SEGMENT SALES (1) March 31, June 30, September 30,
---------------------- ----------------------- ------------------------
2001 2000 2001 2000 2001 2000
---------- --------- ---------- ---------- ---------- -----------
Printing Papers (5) $ 2,085 $ 1,470 $ 1,945 $ 1,440 $ 1,945 $ 2,235
Industrial & Consumer
Packaging(2) 1,590 1,540 1,585 1,740 1,550 1,685
Distribution 1,800 1,750 1,710 1,700 1,665 1,930
Forest Products 685 500 720 460 725 755
Carter Holt Harvey 395 410 400 460 455 435
Other Businesses (3)(5) 715 1,070 675 1,080 530 1,090
Less: Intersegment Sales (4) (376) (369) (349) (100) (341) (329)
---------- --------- ---------- ---------- ---------- -----------
$ 6,894 $ 6,371 $ 6,686 $ 6,780 $ 6,529 $ 7,801
========== ========= ========== ========== ========== ===========
Three Months Ended Twelve Months Ended
SEGMENT SALES (1) December 31, December 31,
----------------------- -----------------------
2001 2000 2001 2000
---------- ---------- ---------- ----------
Printing Papers (5) $ 1,840 $ 2,065 $ 7,815 $ 7,210
Industrial & Consumer
Packaging (2) 1,555 1,660 6,280 6,625
Distribution 1,615 1,875 6,790 7,255
Forest Products 725 665 2,855 2,380
Carter Holt Harvey 460 370 1,710 1,675
Other Businesses (3) (5) 405 990 2,325 4,230
Less: Intersegment Sales (4) (346) (397) (1,412) (1,195)
---------- ---------- ---------- ----------
$ 6,254 $ 7,228 $26,363 $28,180
========== ========== ========== ==========
Three Months Ended Three Months Ended Three Months Ended
SEGMENT OPERATING PROFIT (1) March 31, June 30, September 30,
---------------------- ----------------------- ------------------------
2001 2000 2001 2000 2001 2000
---------- --------- ---------- ---------- ---------- -----------
Printing Papers (5) $ 154 $ 172 $ 119 $ 204 $ 146 $ 297
Industrial & Consumer
Packaging (2) 113 184 139 227 127 187
Distribution 14 30 12 35 5 32
Forest Products 136 132 182 151 184 162
Carter Holt Harvey 1 17 5 23 (1) 21
Other Businesses (3) (5) 8 68 25 74 16 58
Corporate (4) - - - 26 - -
---------- --------- ---------- ---------- ---------- -----------
Operating Profit $ 426 $ 603 $ 482 $ 740 $ 477 $ 757
========== ========= ========== ========== ========== ===========
Three Months Ended Twelve Months Ended
SEGMENT OPERATING PROFIT (1) December 31, December 31,
----------------------- -----------------------
2001 2000 2001 2000
---------- ---------- ---------- -----------
Printing Papers (5) $ 119 $ 257 $ 538 $ 930
Industrial & Consumer Packaging
(2) 129 143 508 741
Distribution (10) 23 21 120
Forest Products 153 119 655 564
Carter Holt Harvey 8 10 13 71
Other Businesses (3) (5) 3 33 52 233
Corporate (4) - - - 26
---------- ---------- ---------- ----------
Operating Profit $ 402 $ 585 $1,787 $ 2,685
========== ========== ========== ==========
(1) Certain reclassifications and adjustments have been made to conform with
current presentation.
(2) Restated to reflect the Industrial Papers business reclassification to the
Other Businesses segment.
(3) Includes businesses identified in the company's divestiture program.
Restated to include Industrial Papers.
(4) Includes results from operations of Champion from date of acquisition, June
20, 2000 through June 30, 2000.
(5) Restated to reflect the Fine Papers reclassification to Printing Papers from
the Other Businesses segment.
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INTERNATIONAL PAPER
SALES VOLUMES BY PRODUCT (a) (b) (c)
(UNAUDITED)
Three Months Ended Twelve Months Ended
December 31, December 31,
---------------------------- --------------------------------
2001 2000 2001 2000
---- ---- ---- ----
Printing Papers (In thousands of short tons)
Uncoated Papers and Bristols 1,589 1,592 6,439 5,957
Coated Papers 519 671 2,132 2,062
Market Pulp 678 554 2,531 1,996
Packaging (In thousands of short tons)
Containerboard 509 517 2,091 2,347
Bleached Packaging Board 328 323 1,247 1,339
Kraft 164 134 587 489
Industrial and Consumer Packaging 1,125 1,255 4,683 5,135
Forest Products (In millions)
Panels (sq. ft. 3/8" - basis) 724 698 2,991 2,380
Lumber (board feet) 1,032 959 4,089 3,302
MDF and Particleboard (sq. ft. 3/4" - basis) 172 181 660 654
(a) Includes third party and inter-segment sales.
(b) Includes sales volumes for Champion from July 1, 2000.
(c) Sales volumes for divested businesses are included through the date of sale.
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INTERNATIONAL PAPER COMPANY
Consolidated Balance Sheet
Preliminary and Unaudited
(In Millions)
December 31, December 31,
2001 2000
------------------ --------------------
Assets
Current Assets
Cash and temporary investments $ 1,224 $ 1,198
Accounts and notes receivable, net 2,629 3,433
Inventories 2,701 3,182
Assets of businesses held for sale 657 1,890
Other current assets 1,073 752
------- -------
Total Current Assets 8,284 10,455
------- -------
Plants, Properties and Equipment, net 14,461 16,011
Forestlands 4,197 5,966
Investments 239 269
Goodwill 6,567 6,310
Deferred Charges and Other Assets 3,390 3,098
------- -------
Total Assets $37,138 $42,109
======= =======
Liabilities and Common Shareholders' Equity
Current Liabilities
Notes payable and current maturities of long-term debt $ 157 $ 2,115
Liabilities of businesses held for sale 233 541
Accounts payable and accrued liabilities 4,147 4,757
------- -------
Total Current Liabilities 4,537 7,413
------- -------
Long-Term Debt 13,257 12,648
Deferred Income Taxes 4,046 4,699
Other Liabilities 1,951 2,155
Minority Interest 1,274 1,355
Preferred Securities 1,805 1,805
Common Shareholders' Equity
Invested capital 5,646 5,726
Retained earnings 4,622 6,308
------- -------
Total Common Shareholders' Equity 10,268 12,034
------- -------
Total Liabilities and Common Shareholders' Equity $37,138 $42,109
======= =======