International Paper Reports Solid Third-Quarter Earnings
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MEMPHIS, Tenn., Oct. 28 TN-Intl-Paper-earns
MEMPHIS, Tenn., Oct. 28 /PRNewswire-FirstCall/ -- International Paper (NYSE: IP) today reported preliminary 2009 third-quarter net earnings attributable to common shareholders of $371 million ($0.87 per share) compared with $136 million ($0.32 per share) in the second quarter of 2009 and $149 million ($0.35 per share) in the third quarter of 2008. Amounts in all periods include special items.
(Logo: http://www.newscom.com/cgi-bin/prnh/20020701/IPLOGO )
Diluted Earnings Per Share Attributable to International Paper
Shareholders
Third Second Third
Quarter Quarter Quarter
2009 2009 2008
------- ------- -------
Net Earnings $0.87 $0.32 $0.35
----- ----- -----
Add Back - Net Special
Items Expense (Income) (0.50) (0.12) 0.49
----- ----- ----
Earnings from Continuing
Operations and Before $0.37 $0.20 $0.84
Special Items ===== ===== =====
Earnings from continuing operations and before special items in the 2009 third quarter totaled $157 million ($0.37 per share), compared with $86 million ($0.20 per share) in the second quarter of 2009 and $356 million ($0.84 per share) in the third quarter of 2008.
Quarterly net sales were $5.9 billion in the third quarter compared with $5.8 billion in the second quarter of 2009 and $6.8 billion reported in the third quarter of 2008.
Operating profits in the 2009 third quarter were $940 million, up from $788 million in the second quarter of 2009 and $536 million in the third quarter of 2008.
At the end of the 2009 third quarter, International Paper had $4.2 billion in cash and committed liquidity facilities. The company generated $1.3 billion of free cash flow (cash provided by operations less capital expenditures) during the quarter, reflecting its continued focus on reducing costs, managing capacity and working capital, and continued reduced capital spending, as well as cash received from alternative fuel mixture credits. The company also repaid $1.3 billion of debt during the quarter.
"At the end of the third quarter, we began to see some modest improvements in demand in some segments of our paper and packaging businesses," said Chairman and CEO John Faraci. "We expanded margins year-over-year and continued to deliver strong cash flow and pay down debt, and I'm confident we're in position to benefit as the economy continues to slowly recover."
SEGMENT INFORMATION
To measure the performance of the company's business segments from quarter to quarter without variations caused by special or unusual items, management focuses on business segment operating profits excluding those items. Third-quarter 2009 segment operating profits and business trends, excluding special items, compared with the prior quarter are as follows:
Industrial Packaging operating profits were $214 million, down from $255 million in the second quarter of 2009 as lower annual maintenance outages and modest volume improvement were offset by lower box prices.
Printing Papers had operating profits of $138 million compared with operating profits of $86 million in the second quarter of 2009. Improved volume, lower input costs and favorable operations offset unfavorable mix as export sales increased.
Consumer Packaging had operating profits of $68 million, up from $38 million in the previous quarter as lower annual maintenance outages, modest volume improvements and favorable input costs and operations offset pricing pressure.
The company's distribution business, xpedx, reported operating profits of $21 million, up from $10 million in the previous quarter, due to improved volumes and cost reductions.
Forest Products operating profits totaled $2 million, down from $3 million in the second quarter of 2009. The pending sale of 143,000 acres is not expected to close in the fourth quarter of 2009 although interested parties are continuing their due diligence efforts.
Net corporate expenses totaled $46 million for the 2009 third quarter compared with $44 million in the 2009 second quarter and $40 million in the third quarter of 2008. The slight increase versus the 2009 second quarter was due to slightly higher pension expense, while the increase from the 2008 third quarter reflects higher pension expense, partially offset by lower supply chain initiative costs.
EFFECTIVE TAX RATE
The effective tax rate from continuing operations and before special items was 30 percent for the 2009 third quarter, lower than 33 percent in the second quarter of 2009 and 32.5 percent in the third quarter of 2008. The lower rate in the 2009 third quarter reflects adjustments of prior-year income tax estimates upon the filing of the company's 2008 income tax return.
EFFECTS OF SPECIAL ITEMS
Special items in the third quarter of 2009 included a $525 million pre-tax credit ($320 million after taxes) for alternative fuel mixture credits earned under 2007 legislation enacted to provide a tax credit for companies that use alternative fuel mixtures to produce renewable energy to operate their businesses, a $18 million pre-tax charge ($11 million after taxes) for integration costs associated with the Industrial Packaging business integration, and a pre-tax charge of $151 million ($95 million after taxes) for restructuring and other charges. Restructuring and other charges included a pre-tax charge of $102 million ($62 million after taxes) for early debt extinguishment costs, a $39 million pre-tax charge ($24 million after taxes) for severance and benefit costs associated with the company's 2008 overhead reduction program, and a $10 million pre-tax charge ($9 million after taxes) for facility closure costs.
Special items in the second quarter of 2009 included a $482 million pre-tax credit ($294 million after taxes) for alternative fuel mixture credits, a $48 million before and after-tax charge to write down the assets of the Etienne mill in France to estimated fair value, an $18 million pre-tax charge ($11 million after taxes) for integration costs associated with the Industrial Packaging business integration, and a pre-tax charge of $79 million ($55 million after taxes) for restructuring and other charges. Restructuring and other charges included a $34 million charge before taxes ($21 million after taxes) for severance and benefit costs associated with the Company's 2008 overhead reduction program, a $25 million charge before taxes ($16 million after taxes) for early debt extinguishment costs, a $15 million before and after-tax charge for severance and other costs related to the Company's Etienne mill in France, and a $5 million charge before taxes ($3 million after taxes) for other closure costs. Additionally, the second-quarter income tax provision included a $156 million charge to establish a valuation allowance for net operating loss carryforwards in France, and a $26 million credit related to the closing of the 2004 and 2005 U.S. federal income tax audit and related state income tax effects.
Special items in the third quarter of 2008 included a $107 million pre-tax charge ($84 million after taxes) to write down the assets of the Inverurie, Scotland, mill to its estimated fair value, a $155 million pre-tax charge ($96 million after taxes) for restructuring and other charges, a $3 million pre-tax credit ($2 million after taxes) for adjustments to estimated transaction costs accrued in connection with 2006 transformation plan forestland sales, and a $29 million income tax charge relating to estimated U.S. taxes on a gain in the company's Ilim joint venture.
EARNINGS WEBCAST
The company will hold a webcast to review earnings at 10 a.m. EDT / 9 a.m. CDT 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 Investors tab and going to the Presentations page. A replay of the webcast will also be available on the Web site beginning approximately two hours after the call. Parties who wish to participate in the webcast via teleconference may dial +1 (706) 679-8242 or, within the U.S. only, (877) 316-2541 and ask to be connected to the International Paper Third-Quarter Earnings Call. The conference ID number is 31381047. Participants should call in no later than 9:45 a.m. EDT/8:45 a.m. CDT. An audio-only replay will be available for four weeks following the call. To access the replay, dial +1 (706) 645-9291 or, within the U.S. only, (800) 642-1687, and when prompted for the conference ID, enter 31381047.
About International Paper
International Paper (NYSE: IP) is a global paper and packaging company with manufacturing operations in North America, Europe, Latin America, Russia, Asia and North Africa. Its businesses include uncoated papers and industrial and consumer packaging, complemented by xpedx, the company's North American distribution company. Headquartered in Memphis, Tenn., the company employs approximately 58,000 people in more than 20 countries and serves customers worldwide. 2008 net sales were approximately $25 billion. For more information about International Paper, its products and stewardship efforts, visit www.internationalpaper.com.
This press release contains forward-looking statements. These statements reflect management's current views and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in these statements. Factors which could cause actual results to differ relate to: (i) increases in interest rates; (ii) industry conditions, including but not limited to changes in the cost or availability of raw materials, energy and transportation costs, competition we face, cyclicality and changes in consumer preferences, demand and pricing for its products; (iii) global economic conditions and political changes, including but not limited to the impairment of financial institutions, changes in currency exchange rates, credit ratings issued by recognized credit rating organizations, the amount of our future pension funding obligation, changes in tax laws and pension and health care costs; (iv) unanticipated expenditures related to the cost of compliance with environmental and other governmental regulations and to actual or potential litigation; and (v) whether we experience a material disruption at one of our manufacturing facilities and risks inherent in conducting business through a joint venture. 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 COMPANY
Consolidated Statement of Operations
Preliminary and Unaudited
(In millions, except per share amounts)
Three Months Ended Three Months Ended
September 30, June 30
-------------
2009 2008 2009
---- ---- ----
Net Sales $5,919 $6,808 $5,802
------ ------ ------
Costs and Expenses
Cost of products
sold 3,758 (a) 5,154 (d) 3,781 (i)
Selling and
administrative
expenses 527 (b) 507 (e) 508 (j)
Depreciation,
amortization and
cost of timber
harvested 378 374 367
Distribution expenses 299 376 279
Taxes other than
payroll and income
taxes 48 48 47
Restructuring and other
charges 151 (c) 97 (f) 79 (k)
Gain on sale of
mineral rights - (261) -
Forestland sales - (3) (g) -
Net losses on sales and
impairments of
businesses - 107 (h) 48 (l)
Interest expense, net 169 144 173
--- --- ---
Earnings From Continuing
Operations Before
Income Taxes and
Equity Earnings 589 (a-c) 265 (d-h) 520 (i-l)
Income tax provision 212 118 348 (m)
Equity earnings
(losses), net of taxes - 5 (32)
--- --- ---
Earnings From Continuing
Operations 377 (a-c) 152 (d-h) 140 (i-m)
Discontinued
operations, net
of taxes - - -
--- --- ---
Net Earnings $377 (a-c) $152 (d-h) $140 (i-m)
Less: Net earnings
attributable to
noncontrolling
interests 6 3 4
--- --- ---
Net Earnings
Attributable to
International
Paper Company $371 (a-c) $149 (d-h) $136 (i-m)
==== ==== ====
Basic Earnings Per
Common Share
Attributable to
International Paper
Common Shareholders
Earnings from
continuing
operations $0.87 (a-c) $0.35 (d-h) $0.32 (i-m)
Discontinued
operations - - -
--- --- ---
Net earnings $0.87 (a-c) $0.35 (d-h) $0.32 (i-m)
===== ===== =====
Diluted Earnings Per
Common Share
Attributable to
International Paper
Common Shareholders
Earnings from
continuing
operations $0.87 (a-c) $0.35 (d-h) $0.32 (i-m)
Discontinued
operations - - -
--- --- ---
Net earnings $0.87 (a-c) $0.35 (d-h) $0.32 (i-m)
===== ===== =====
Average Shares
of Common Stock
Outstanding -
Diluted 428.7 423.4 425.4
===== ===== =====
Cash Dividends
Per Common Share $0.025 $0.25 $0.025
====== ===== ======
Amounts Attributable
to International
Paper Common
Shareholders
Earnings from
continuing
operations, net
of tax $371 $149 $136
Discontinued
operations, net
of tax - - -
--- --- ---
Net Earnings $371 $149 $136
==== ==== ====
Nine Months Ended
September 30,
-------------
2009 2008
---- ----
Net Sales $17,389 $18,283
------- -------
Costs and Expenses
Cost of products sold 11,270 (n) 13,720 (d)
Selling and administrative
expenses 1,535 (o) 1,438 (e)
Depreciation,
amortization and
cost of timber
harvested 1,088 965
Distribution expenses 857 962
Taxes other than payroll
and income taxes 145 136
Restructuring and other
charges 313 (p) 152 (q)
Gain on sale of mineral
rights - (261)
Forestland sales - (6) (g)
Net losses on sales and
impairments of businesses 48 (l) 106 (h)
Interest expense, net 506 306
--- ---
Earnings From Continuing
Operations Before Income
Taxes and Equity Earnings 1,627 (l,n-p) 765 (d,e,g,h,q)
Income tax provision 790 (m) 274
Equity earnings (losses),
net of taxes (59) 51
--- --
Earnings From Continuing
Operations 778 (l-p) 542 (d,e,g,h,q)
Discontinued operations,
net of taxes - (18) (r)
--- ---
Net Earnings $778 (l-p) 524
Less: Net earnings
attributable to
noncontrolling
interests 14 15
-- --
Net Earnings Attributable
to International
Paper Company $764 (l-p) 509 (d,e,g,h,q,r)
==== ====
Basic Earnings Per
Common Share Attributable
to International Paper
Common Shareholders
Earnings from continuing
operations $1.80 (l-p) $1.25 (d,e,g,h,q)
Discontinued operations - (0.04) (r)
--- -----
Net earnings $1.80 (l-p) $1.21 (d,e,g,h,q,r)
===== =====
Diluted Earnings Per
Common Share Attributable
to International Paper
Common Shareholders
Earnings from continuing
operations $1.79 (l-p) $1.24 (d,e,g,h,q)
Discontinued operations - (0.04) (r)
--- -----
Net earnings $1.79 (l-p) $1.20 (d,e,g,h,q,r)
===== =====
Average Shares of Common
Stock Outstanding -
Diluted 426.6 424.2
===== =====
Cash Dividends
Per Common Share $0.300 $0.75
====== =====
Amounts Attributable
to International
Paper Common
Shareholders
Earnings from continuing
operations, net of tax $764 $527
Discontinued operations,
net of tax - (18)
--- ---
Net Earnings $764 509
==== ===
The accompanying notes are an integral part of this consolidated
statement of operations.
(a) Includes a pre-tax gain of $525 million ($320 million after taxes)
related to alternative fuel mixture credits.
(b) Includes a pre-tax charge of $18 million ($11 million after taxes)
for integration costs associated with the Containerboard, Packaging
and Recycling business (CBPR) acquired from Weyerhaeuser Company in
August 2008.
(c) Includes a pre-tax charge of $39 million ($24 million after taxes)
for severance and benefit costs associated with the Company's 2008
overhead cost reduction initiative, a pre-tax charge of $102 million
($62 million after taxes) for early debt extinguishment costs, a
charge of $7 million (before and after taxes) for costs associated
with the planned closure of the Etienne mill in France and a pre-tax
charge of $3 million ($2 million after taxes) for other items.
(d) Includes a pre-tax charge of $39 million ($24 million after taxes)
relating to the write-up of inventory to fair value in connection
with the CBPR acquisition.
(e) Includes a pre-tax charge of $19 million ($12 million after taxes)
for integration costs associated with the CBPR acquisition.
(f) Includes a pre-tax charge of $35 million ($22 million after taxes)
for an adjustment to legal reserves, a pre-tax charge of $8 million
($5 million after taxes) for costs associated with the
reorganization of the Company's Shorewood operations in Canada, a
pre-tax charge of $53 million ($33 million after taxes) to write off
deferred supply chain initiative development costs for U.S.
container operations that will not be implemented due to the CBPR
acquisition, and a pre-tax charge of $1 million ($0 million after
taxes) for severance costs associated with the Company's
Transformation Plan.
(g) Reflects adjustments of estimated transaction costs accrued in
connection with the 2006 Transformation Plan forestland sales.
(h) Includes a pre-tax charge of $107 million ($84 million after taxes)
to write down the assets at the Inverurie, Scotland mill to
estimated fair value.
(i) Includes a pre-tax gain of $482 million ($294 million after taxes)
related to alternative fuel mixture credits.
(j) Includes a pre-tax charge of $18 million ($11 million after taxes)
for integration costs associated with the CBPR business.
(k) Includes a pre-tax charge of $34 million ($21 million after taxes)
for severance and benefit costs associated with the Company's 2008
overhead cost reduction initiative, a pre-tax charge of $25 million
($16 million after taxes) for early debt extinguishment costs, a
charge of $15 million (before and after taxes) for severance and
other costs associated with the planned closure of the Etienne mill
in France, and a pre-tax charge of $5 million ($3 million after
taxes) for other items.
(l) Includes a pre-tax charge of $48 million (before and after taxes)
to write down the assets at the Etienne mill to estimated fair
value.
(m) Includes a $156 million tax expense for the write off of deferred
tax assets in France and a $26 million tax benefit related to the
closing of the 2004 and 2005 U.S. federal income tax audit, and
related state income tax effects.
(n) Includes a pre-tax gain of $1.5 billion ($944 million after taxes)
related to alternative fuel mixture credits.
(o) Includes a pre-tax charge of $72 million ($44 million after taxes)
for integration costs associated with the CBPR business.
(p) Includes a pre-tax charge of $125 million ($77 million after taxes)
for severance and benefit costs associated with the Company's 2008
overhead cost reduction initiative, a pre-tax charge of $23 million
($28 million after taxes) for closure costs associated with the
Inverurie, Scotland mill, a pre-tax charge of $127 million ($78
million after taxes) for early debt extinguishment costs, a charge
of $22 million (before and after taxes) for severance and other
costs associated with the planned closure of the Etienne mill, and a
pre-tax charge of $16 million ($10 million after taxes) for other
items.
(q) Includes a $75 million pre-tax charge ($47 million after taxes) for
adjustments to legal reserves, a pre-tax charge of $26 million ($17
million after taxes) for costs associated with the reorganization of
the Company's Shorewood operations in Canada , a pre-tax charge of
$53 million ($33 million after taxes) to write off deferred supply
chain initiative development costs for U.S. container operations
that will not be implemented due to the CBPR acquisition, and a gain
of $2 million (before and after taxes) for adjustments to previously
recorded reserves and other charges associated with the Company's
Transformation Plan.
(r) Includes a pre-tax charge of $25 million ($16 million after taxes)
for the settlement of a post-closing adjustment on the sale of the
beverage packaging business, and the operating results of certain
wood products facilities.
International Paper Company
Reconciliation of Earnings Before Special Items to Net Earnings
Attributable to International Paper Company
(In millions except for per share amounts)
Three Months Three Months Nine Months
Ended Ended Ended
September 30, June 30, September 30,
------------- -------------
2009 2008 2009 2009 2008
---- ---- ---- ---- ----
Earnings Before Special
Items $157 $356 $86 $277 $766
Restructuring and other
charges (95) (84) (55) (215) (119)
CBPR business integration
costs (11) (12) (11) (44) (12)
Alternative fuel mixture
credits 320 - 294 944 -
Forestland sales - 2 - - 4
Net losses on sales and
impairments of
businesses - (84) (48) (48) (83)
Income tax adjustments - (29) (130) (150) (29)
--- --- --- --- ---
Earnings from Continuing
Operations 371 149 136 764 527
Discontinued operations - - - - (18)
--- --- --- --- ---
Net Earnings as Reported $371 $149 $136 $764 $509
==== ==== ==== ==== ====
Three Months Three Months Nine Months
Ended Ended Ended
September 30, June 30, September 30,
------------- -------------
Diluted Earnings per
Common Share 2009 2008 2009 2009 2008
---- ---- ---- ---- ----
Earnings Per Share Before
Special Items $0.37 $0.84 $0.20 $0.65 $1.80
Restructuring and other
charges (0.22) (0.20) (0.13) (0.50) (0.28)
CBPR business integration
costs (0.03) (0.03) (0.03) (0.11) (0.03)
Alternative fuel mixture
credits 0.75 - 0.69 2.21 -
Forestland sales - - - - 0.01
Net losses on sales and
impairments of businesses - (0.20) (0.11) (0.11) (0.19)
Income tax adjustments - (0.06) (0.30) (0.35) (0.07)
--- ----- ------ ------ ------
Earnings Per Common Share
from Continuing
Operations 0.87 0.35 0.32 1.79 1.24
Discontinued operations - - - - (0.04)
--- --- --- --- -----
Diluted Earnings per
Common Share $0.87 $0.35 $0.32 $1.79 $1.20
===== ===== ===== ===== =====
Notes:
(1) The Company calculates Earnings Before Special Items by excluding
the after-tax effect of items considered by management to be unusual
from the earnings reported under U.S. 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, provides for a more
complete analysis of the results of operations by quarter. Net
earnings is the most directly comparable GAAP measure.
(2) Diluted earnings per common share reflect the inclusion of
contingently convertible securities in the computation.
(3) Since diluted earnings per share are computed independently for each
period, nine-month per share amounts may not equal the sum of the
respective quarters.
International Paper
Sales and Earnings by Industry Segment
Preliminary and Unaudited
(In Millions)
Sales by Industry Segment
Three Months Three Months
Ended Ended
September 30, June 30,
-------------
2009 2008 2009
---- ---- ----
Industrial Packaging $2,230 $2,320 $2,270
Printing Papers 1,470 1,800 1,360
Consumer Packaging 790 830 770
Distribution 1,665 2,075 1,595
Forest Products 5 55 10
Corporate and
Inter-segment Sales (241) (272) (203)
---- ---- ----
Net Sales $5,919 $6,808 $5,802
====== ====== ======
Sales by Industry Segment
Nine Months
Ended
September 30,
-------------
2009 2008
---- ----
Industrial Packaging $6,680 $5,235
Printing Papers 4,155 5,305
Consumer Packaging 2,275 2,395
Distribution 4,850 6,030
Forest Products 20 135
Corporate and Inter-segment Sales (591) (817)
---- ----
Net Sales $17,389 $18,283
======= =======
Operating Profit by
Industry Segment
Three Months Three Months
Ended Ended
September 30, June 30,
-------------
2009 2008 2009
---- ---- ----
Industrial Packaging $410 (2,3,4) $95 (5) $382 (2,3,4)
Printing Papers 363 (2,6) 103 (7) 279 (2,6)
Consumer Packaging 144 (2,8) (2) (8) 114 (2,8)
Distribution 21 35 10
Forest Products 2 305 3
--- --- ---
Operating Profit (1) 940 536 788
Interest expense, net (169) (144) (173)
Noncontrolling
interest/equity
earnings adjustment (9) 5 (1) 8
Corporate items, net (46) (40) (44)
Restructuring and
other charges (141) (89) (59)
Sale of forestlands - 3 -
Net gains on sales and
impairments of
businesses - - -
--- --- ---
Earnings From Continuing
Operations Before
Income Taxes and
Equity Earnings $589 $265 $520
==== ==== ====
Equity Earnings (Loss)
in Ilim Holdings S.A.,
Net of Taxes (1) $- $5 $(30)
== == ====
Operating Profit by Industry Segment
Nine Months
Ended
September 30,
-------------
2009 2008
---- ----
Industrial Packaging $1,152 (2,3,4) $279 (5)
Printing Papers 954 (2,6) 514 (7)
Consumer Packaging 370 (2,8) 20 (8)
Distribution 24 77
Forest Products 7 371
--- ---
Operating Profit (1) 2,507 1,261
Interest expense, net (506) (306)
Noncontrolling interest/equity earnings
adjustment (9) 19 11
Corporate items, net (141) (82)
Restructuring and other charges (252) (126)
Sale of forestlands - 6
Net gains on sales and impairments of
businesses - 1
--- ---
Earnings From Continuing Operations
Before Income Taxes and Equity
Earnings $1,627 $765
====== ====
Equity Earnings (Loss) in Ilim
Holdings S.A., Net of Taxes (1) $(56) $54
==== ===
(1) In addition to the operating profits shown above, International
Paper recorded equity earnings, net of taxes, of $0 million for the
three months ended September 30, 2009, equity losses, net of taxes,
of $30 million for the three months ended June 30, 2009 and $56
million for the nine months ended September 30, 2009, and equity
earnings, net of taxes, of $5 million for the three months ended
September 30, 2008 and $54 million for the nine months ended
September 30, 2008, related to its equity investment in Ilim Holding
S.A., a separate reportable industry segment.
(2) Includes gains of $221 million and $208 million in the Industrial
Packaging segment, $226 million and $197 million in the Printing
Papers segment, and $78 million and $77 million in the Consumer
Packaging segment for the three months ended September 30, 2009 and
June 30, 2009, respectively, and gains of $637 million in the
Industrial Packaging segment, $663 million in the Printing Papers
segment, and $247 million in the Consumer Packaging segment for the
nine months ended September 30, 2009, relating to alternative fuel
mixture credits.
(3) Includes charges of $18 million for both the three months ended
September 30, 2009 and June 30, 2009, and $72 million for the nine
months ended September 30, 2009, for CBPR integration costs.
(4) Includes charges of $7 million and $15 million for the three months
ended September 30, 2009 and June 30, 2009, respectively, for
severance and other costs related to the planned closure of the
Etienne mill in France, and $48 million for the three months ended
June 30, 2009 to write down the assets at the Etienne mill to
estimated fair value.
(5) Includes a charge of $39 million relating to the write-up of
inventory to fair value in connection with the CBPR acquisition, and
a charge of $19 million for CBPR integration costs.
(6) Includes charges of $1 million and $4 million for the three months
ended September 30, 2009 and June 30, 2009, and $11 million for the
nine months ended September 30, 2009, for shutdown costs for the
Louisiana mill and the Franklin lumber mill, sheet converting plant
and converting innovations center, and a charge of $23 million for
the nine months ended September 30, 2009 for the closure of the
Inverurie, Scotland mill.
(7) Includes a charge of $107 million to write down the assets of the
Inverurie, Scotland mill to estimated fair value.
(8) Includes charges of $2 million, $8 million, and $1 million for the
three months ended September 30, 2009, September 30, 2008 and June
30, 2009, respectively, and $5 million and $26 million for the nine
months ended September 30, 2009 and 2008, respectively, related to
the reorganization of the Company's Shorewood operations.
(9) 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 noncontrolling
interest and equity earnings for these subsidiaries are adjusted
here to present consolidated earnings before income taxes and equity
earnings.
International Paper
Sales Volume by Product (1) (2)
Preliminary and Unaudited
International Paper Consolidated
Three Months Three Months Nine Months
Ended Ended Ended
September 30, June 30, September 30,
------------- -------------
2009 2008 2009 2009 2008
---- ---- ---- ---- ----
Industrial Packaging (In
thousands of short tons)
Corrugated Packaging (4) 1,856 1,641 1,899 5,531 3,419
Containerboard (4) 580 686 530 1,581 1,686
Recycling (4) 566 397 598 1,759 397
Saturated Kraft 33 45 29 83 130
Bleached Kraft 22 24 17 52 65
European Industrial
Packaging 252 261 268 790 844
Asian Industrial Packaging 200 154 139 427 443
--- --- --- --- ---
Industrial Packaging 3,509 3,208 3,480 10,223 6,984
----- ----- ----- ------ -----
Printing Papers (In
thousands of short tons)
U.S. Uncoated Papers 753 875 702 2,148 2,653
European & Russian Uncoated
Papers 304 355 332 1,006 1,101
Brazilian Uncoated Papers 282 217 234 696 638
Asian Uncoated Papers 25 6 12 40 21
-- -- -- -- --
Uncoated Papers 1,364 1,453 1,280 3,890 4,413
----- ----- ----- ----- -----
Market Pulp (3) 422 448 375 1,114 1,218
--- --- --- ----- -----
Consumer Packaging (In
thousands of short tons)
U.S. Coated Paperboard 324 403 318 932 1,202
European Coated Paperboard 86 81 92 265 235
Asian Coated Paperboard 221 138 218 628 386
Other Consumer Packaging 42 48 42 130 136
-- -- -- --- ---
Consumer Packaging 673 670 670 1,955 1,959
--- --- --- ----- -----
(1) Sales volumes include third party and inter-segment sales and exclude
sales of equity investees.
(2) Sales volumes for divested businesses are included through the date
of sale, except for discontinued operations.
(3) Includes internal sales to mills.
(4) Includes CBPR volumes from date of acquisition.
INTERNATIONAL PAPER COMPANY
Consolidated Balance Sheet
Preliminary and Unaudited
(In Millions)
September 30, December 31,
2009 2008
---- ----
Assets
Current Assets
Cash and Temporary Investments $1,652 $1,144
Accounts and Notes Receivable, Net 3,080 3,288
Inventories 2,278 2,495
Deferred Income Tax Assets 207 261
Other 300 172
--- ---
Total Current Assets 7,517 7,360
----- -----
Plants, Properties and Equipment, Net 13,699 14,202
Forestlands 749 594
Investments 1,102 1,274
Goodwill 2,288 2,027
Deferred Charges and Other Assets 1,326 1,456
----- -----
Total Assets $26,681 $26,913
======= =======
Liabilities and Equity
Current Liabilities
Notes Payable and Current Maturities of
Long-Term Debt $369 $828
Accounts Payable and Accrued Liabilities 3,947 3,927
----- -----
Total Current Liabilities 4,316 4,755
----- -----
Long-Term Debt 9,253 11,246
Deferred Income Taxes 2,514 1,957
Pension Benefit Obligation 3,303 3,260
Postretirement and Postemployment Benefit
Obligation 632 663
Other Liabilities 779 631
Equity
Invested Capital 3,583 2,739
Retained Earnings 2,062 1,430
----- -----
Total Shareholders' Equity 5,645 4,169
----- -----
Noncontrolling interests 239 232
--- ---
Total Equity 5,884 4,401
----- -----
Total Liabilities and Equity $26,681 $26,913
======= =======
INTERNATIONAL PAPER COMPANY
Consolidated Statement of Cash Flows
Preliminary and Unaudited
(In Millions)
Nine Months Ended
September 30,
-------------
2009 2008
---- ----
Operating Activities
Net earnings attributable to International Paper
Company $764 $509
Noncontrolling interests 14 15
Discontinued operations, net of taxes and noncontrolling
interests - 18
--- ---
Earnings from continuing operations 778 542
Depreciation, amortization and cost of timber
harvested 1,088 965
Deferred income tax expense (benefit), net 585 (51)
Restructuring and other charges 313 152
Payments related to restructuring and legal reserves (35) (71)
Net losses on sales and impairments of businesses 48 106
Gains on sales of forestlands - (3)
Equity loss (earnings), net 59 (51)
Periodic pension expense, net 160 89
Alternative fuel mixture credits receivable (251) -
Other, net 140 65
Changes in current assets and liabilities
Accounts and notes receivable 466 (12)
Inventories 262 (104)
Accounts payable and accrued liabilities (38) 255
Interest payable 21 (12)
Other (26) 86
--- --
Cash Provided by Operations 3,570 1,956
----- -----
Investment Activities
Invested in capital projects (367) (732)
Acquisitions, net of cash received (17) (6,086)
Proceeds from divestitures - 14
Equity investment in Ilim - (21)
Other (59) (147)
--- ----
Cash Used for Investment Activities (443) (6,972)
---- ------
Financing Activities
Repurchases of common stock and payments of restricted
stock tax withholding (10) (47)
Issuance of common stock - 1
Issuance of debt 2,490 6,011
Reduction of debt (4,911) (627)
Change in book overdrafts (5) (45)
Dividends paid (129) (321)
Other (113) (69)
---- ---
Cash (Used for) Provided by Financing Activities (2,678) 4,903
------ -----
Effect of Exchange Rate Changes on Cash 59 (21)
-- ---
Change in Cash and Temporary Investments 508 (134)
Cash and Temporary Investments
Beginning of the period 1,144 905
----- ---
End of the period $1,652 $771
====== ====
SOURCE International Paper
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