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Earnings per share from continuing operations and before special items
were $0.84, up from $0.56 in the second quarter of 2008 and $0.57 in
the 2007 third quarter.
Third-quarter 2008 net earnings totaled $0.35 per share, compared with
net earnings of $0.54 per share in the prior quarter and $0.51 per
share in the third quarter of 2007.
Net sales for the quarter were $6.8 billion, versus $5.8 billion in the
second quarter and $5.5 billion in the third quarter of 2007.
MEMPHIS, Tenn., Oct. 30 /PRNewswire-FirstCall/ -- International Paper
(NYSE: IP) today reported preliminary third-quarter 2008 net earnings of $149
million ($0.35 per share), compared with net earnings of $227 million ($0.54
per share) in the 2008 second quarter and $217 million ($0.51 per share) in
the third quarter of 2007. Third-quarter 2008 amounts include the operating
results of the packaging business acquired from Weyerhaeuser Co. on Aug. 4,
2008. Amounts in all periods include special items.
(Logo: http://www.newscom.com/cgi-bin/prnh/20020701/IPLOGO )
Diluted Earnings Per Share Summary
Third Second Third
Quarter Quarter Quarter
2008 2008 2007
Net Earnings $0.35 $0.54 $0.51
Discontinued Operations:
Loss on sale or impairment - - 0.01
Earnings from Continuing Operations 0.35 0.54 0.52
Net Special Items Expense 0.49 0.02 0.05
Earnings from Continuing Operations
and Before Special Items $0.84 $0.56 $0.57
Earnings from continuing operations and before special items in the third
quarter of 2008 were $356 million ($0.84 per share), compared with $235
million ($0.56 per share) in the 2008 second quarter and $243 million ($0.57
per share) in the third quarter of 2007.
Quarterly net sales were $6.8 billion, up from $5.8 billion in the second
quarter and $5.5 billion in the third quarter of 2007.
Industry segment operating profits were $536 million for the 2008 third
quarter, up from $393 million in the 2008 second quarter and $478 million in
the third quarter of 2007. The quarter-to-quarter increase reflects the
realization of previously announced price increases, a significant gain from a
mineral rights sale, two months worth of earnings after the successful
completion of the Weyerhaeuser packaging acquisition on Aug. 4 and benefits
from cost reductions.
"While our third-quarter results were solid, our higher prices did not
offset higher input costs which negatively impacted our net earnings," said
Chairman and CEO John Faraci. "Input costs for energy and recycled fibers have
fallen recently, but costs for wood and some key chemicals are still rising.
Currently, in aggregate input and transportation costs remain high."
Commenting on the recent acquisition of the Weyerhaeuser packaging
business, he noted, "The integration is going smoothly, quicker than planned
and the first two months of results have met our expectations."
Looking at the fourth quarter of 2008, Faraci said, "We are focused on
managing our business in this significantly weaker economy and achieving the
synergy targets we established for our industrial packaging business. Since
mid-September, demand in our core businesses has weakened and as a result, we
will continue to manage our capacity to meet our customers' needs, and
continue our cost reduction initiatives."
SEGMENT INFORMATION
During 2008, in order to facilitate performance comparisons with other
companies, the company changed its method of allocating corporate overhead
expenses to attribute additional expense to its business segments.
Accordingly, business segment operating profits for all periods have been
restated to reflect this change. Third-quarter 2008 segment operating profits
and business trends compared with the previous quarter are as follows:
Operating profits for Printing Papers were $103 million (including a $107
million impairment charge to write down the assets of the Inverurie, Scotland,
mill to its estimated fair value), down from second-quarter operating profits
of $226 million. Prices improved and volumes were steady except for some
decline in the pulp business. High input costs and annual outages negatively
impacted quarter-over-quarter earnings.
Industrial Packaging operating profits were $95 million (including charges
totaling $58 million related to the Weyerhaeuser packaging acquisition), up
from $87 million in the prior quarter. Volume was higher, mainly due to the
acquisition, and pricing improved. High input costs negatively impacted
earnings, but annual outage costs were much lower than in the second quarter.
The Vicksburg mill recovery boiler is still being repaired after the second-
quarter accident, and net of business interruption insurance recoveries, its
impact on results was relatively flat quarter over quarter. Containerboard
inventory levels remain low. Both the U.S. and European box volumes remain
under pressure due to weak economic conditions.
Consumer Packaging lost $2 million (including a special $8 million charge
relating to the reorganization of Shorewood's Canadian operations) compared
with a $13 million profit in the 2008 second quarter (including a $13 million
charge related to Shorewood's Canadian reorganization). Improved pricing did
not offset high input costs. Volumes in the Foodservice business weakened with
the slowing economy.
The company's distribution business, xpedx, reported operating profits of
$35 million, up from $26 million in the prior quarter because of increased
revenue and cost management. While printing paper and packaging volumes did
realize seasonal improvement, markets weakened near the end of the quarter.
Forest Products operating profits were $305 million, compared with second-
quarter operating profits of $41 million largely due to $261 million of
earnings from a mineral rights sale. While land and mineral rights sales are
difficult to forecast within a quarter, the company's objective continues to
be to maximize net present value for shareholders.
Equity earnings, net of taxes, in Ilim Holding S.A. were $5 million for
the quarter, down from $32 million reported in the 2008 second quarter, which
included a $14 million after-tax foreign exchange gain and a $3 million option
write-off charge. During the quarter, Ilim incurred a small after-tax foreign
exchange loss and performed annual outages at two of its mill sites.
Operations were solid, but pulp prices started to flatten and come under
pressure. (Ilim's results are reported on a one-quarter lag.)
Net corporate expenses totaled $40 million for the quarter, up from $21
million in the 2008 second quarter, but well below the $56 million recorded in
the 2007 third quarter. The increase compared with the 2008 second quarter
reflects a $10 million settlement of a multi-employer pension fund liability
during the quarter and an $11 million gain on the sale of the former Natchez,
Miss., mill site that was recorded in the second quarter. Lower pension
expenses were the principle factor in the year-to-year quarterly decline.
EFFECTIVE TAX RATE
The effective tax rate from continuing operations and before special items
for the third quarter of 2008 was 32.5 percent, the same as in the second
quarter of 2008 and higher than the 29 percent rate in the third quarter of
2007.
EFFECTS OF SPECIAL ITEMS
Special items in the third quarter of 2008 included a pre-tax charge of
$107 million ($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. Restructuring and
other charges included a $35 million pre-tax charge ($22 million after taxes)
for costs associated with the company's hardboard siding and roofing legal
settlements, a $53 million pre-tax charge ($33 million after taxes) to write
off supply chain initiative development costs following a decision not to
implement the initiative in the U.S. container business, an $8 million pre-tax
charge ($5 million after taxes) associated with the reorganization of
Shorewood operations in Canada, pretax charges of $39 million ($24 million
after taxes) and $19 million ($12 million after taxes) relating to the write-
up of inventories in connection with the Weyerhaeuser packaging acquisition
and integration costs, and a $1 million pre-tax charge ($0 million after
taxes) for severance costs associated with the company's transformation plan.
The net after-tax effect of these special items is a loss of $207 million, or
$0.49 per share.
Special items in the second quarter of 2008 consisted of a $13 million
pre-tax charge ($9 million after taxes) for costs associated with the
reorganization of Shorewood operations in Canada and a $3 million pre-tax gain
($2 million after taxes) for an adjustment to the gain on the 2006
transformation plan forestland sales. The net after-tax effect of these
special items was a loss of $7 million, or $0.02 per share.
Special items in the third quarter of 2007 included restructuring and
other charges totaling $42 million before taxes ($26 million after taxes),
including $37 million of pre-tax charges ($23 million after taxes) related to
the closure of the company's Terre Haute, Ind., mill. Additionally, net pre-
tax gains of $8 million ($6 million after taxes) were recorded, principally to
reduce estimated transaction costs accrued in connection with the
transformation plan forestland sales in 2006, and a $3 million increase to the
income tax provision was recorded related to the settlement of a prior-year
tax audit. The net after-tax effect of these special items is a loss of $23
million, or $0.05 per share.
EARNINGS WEBCAST
The company will host a webcast to discuss earnings and current market
conditions at 10 a.m. EDT (9 a.m. CDT) today. All interested parties are
invited to listen to the webcast via the company's Internet site at
http://www.internationalpaper.com by clicking on the Investor tab and going to
the Presentations page. A replay of the webcast will also be on the Web site
approximately two hours after the call.
Parties who wish to participate in the webcast via teleconference may dial
(706) 679-8242 or, within the U.S. only, (877) 316-2541, and ask to be
connected to the International Paper 3Q Earnings Call. The conference ID
number is 64890241. 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 (706) 645-9291 or, within the
U.S. only, (800) 642-1687, and when prompted for the conference ID, enter
"64890241."
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
more than 65,000 people in more than 20 countries and serves customers
worldwide. 2007 net sales were approximately $22 billion. For more information
about International Paper, its products and stewardship efforts, visit
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) the company's ability to realize anticipated profit
improvement from its transformation plan, including our ability to realize the
expected benefits of our acquisition of the assets of Weyerhaeuser Company's
containerboard, packaging and recycling business in light of integration
difficulties and other challenges; (ii) increases in interest rates and our
ability to meet our debt service obligations; (iii) industry conditions,
including but not limited to changes in the cost or availability of raw
materials and energy, transportation costs, competition we face, the company's
product mix, demand and pricing for its products; (iv) global economic
conditions and political changes, including but not limited to changes in
currency exchange rates, credit availability, the company's credit ratings
issued by recognized credit rating organizations and pension and health care
costs; (v) unanticipated expenditures related to the cost of compliance with
environmental and other governmental regulations and to actual or potential
litigation; and (vi) whether we experience a material disruption at one of our
manufacturing facilities. 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
September 30,
2008 2007
Net Sales $6,808 $5,541
Costs and Expenses
Cost of products sold 5,154 (a) 4,086
Selling and administrative expenses 507 (b) 455
Depreciation, amortization and cost
of timber harvested 374 277
Distribution expenses 376 255
Taxes other than payroll and income taxes 48 42
Gain on sale of mineral rights (261) -
Restructuring and other charges 97 (c) 42 (f)
Forestland sales (3) (d) (9) (d)
Net (gains) losses on sales and
impairments of businesses 107 (e) 1
Interest expense, net 144 77
Earnings From Continuing Operations
Before Income Taxes,
Equity Earnings and Minority
Interest 265 (a-e) 315 (d,f)
Income tax provision 118 89
Equity earnings, net of taxes 5 -
Minority interest expense, net of taxes 3 6
Earnings From Continuing Operations 149 (a-e) 220 (d,f)
Discontinued operations, net of
taxes and minority interest - (3)
Net Earnings $149 (a-e) $217 (d,f)
Basic Earnings Per Common Share
Earnings from continuing operations $0.35 (a-e) $0.52 (d,f)
Discontinued operations - (0.01)
Net earnings $0.35 (a-e) $0.51 (d,f)
Diluted Earnings Per Common Share
Earnings from continuing operations $0.35 (a-e) $0.52 (d,f)
Discontinued operations - (0.01)
Net earnings $0.35 (a-e) $0.51 (d,f)
Average Shares of Common Stock
Outstanding - Diluted 423.4 425.6
Cash Dividends Per Common Share $0.25 $0.25
Three Months Ended
June 30,
2008
Net Sales $5,807
Costs and Expenses
Cost of products sold 4,305
Selling and administrative expenses 459
Depreciation, amortization and cost
of timber harvested 305
Distribution expenses 301
Taxes other than payroll and income taxes 44
Gain on sale of mineral rights -
Restructuring and other charges 13 (g)
Forestland sales (3) (d)
Net (gains) losses on sales and
impairments of businesses -
Interest expense, net 81
Earnings From Continuing Operations
Before Income Taxes,
Equity Earnings and Minority
Interest 302 (d,g)
Income tax provision 97
Equity earnings, net of taxes 30
Minority interest expense, net of taxes 7
Earnings From Continuing Operations 228 (d,g)
Discontinued operations, net of
taxes and minority interest (1)
Net Earnings $227 (d,g)
Basic Earnings Per Common Share
Earnings from continuing operations $0.54 (d,g)
Discontinued operations -
Net earnings $0.54 (d,g)
Diluted Earnings Per Common Share
Earnings from continuing operations $0.54 (d,g)
Discontinued operations -
Net earnings $0.54 (d,g)
Average Shares of Common Stock
Outstanding - Diluted 422.6
Cash Dividends Per Common Share $0.25
Nine Months Ended
September 30,
2008 2007
Net Sales $18,283 $16,049
Costs and Expenses
Cost of products sold 13,720 (a) 11,818
Selling and administrative expenses 1,438 (b) 1,331
Depreciation, amortization and cost
of timber harvested 965 808
Distribution expenses 962 765
Taxes other than payroll and income
taxes 136 131
Gain on sale of mineral rights (261) -
Restructuring and other charges 152 (h) 86 (j)
Forestland sales (6) (d) (9)(d)
Net (gains) losses on sales and
impairments of businesses 106 (e) (314)(k)
Interest expense, net 306 218
Earnings From Continuing Operations
Before Income Taxes,
Equity Earnings and Minority
Interest 765 (a,b,d,e,h) 1,215 (d,j,k)
Income tax provision 274 321
Equity earnings, net of taxes 51 -
Minority interest expense, net of
taxes 15 17
Earnings From Continuing Operations 527 (a,b,d,e,h) 877 (d,j,k)
Discontinued operations, net of
taxes and minority interest (18) (i) (36)(l)
Net Earnings $509 (a,b,d,e,h-i) $841 (d,j-l)
Basic Earnings Per Common Share
Earnings from continuing operations $1.25 (a,b,d,e,h) $2.03 (d,j,k)
Discontinued operations (0.04) (i) (0.08)(l)
Net earnings $1.21 (a,b,d,e,h-i) $1.95 (d,j-l)
Diluted Earnings Per Common Share
Earnings from continuing operations $1.24 (a,b,d,e,h $2.01 (d,j,k)
Discontinued operations (0.04) (i) (0.08)(l)
Net earnings $1.20 (a,b,d,e,h-i) $1.93 (d,j-l)
Average Shares of Common Stock
Outstanding - Diluted 424.2 435.7
Cash Dividends Per Common Share $0.75 $0.75
The accompanying notes are an integral part of these financial statements.
(a) 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 acquisition of Weyerhaeuser Company's Containerboard, Packaging
and Recycling business (CBPR).
(b) Includes a pre-tax charge of $19 million ($12 million after taxes) for
integration costs associated the CBPR acquisition.
(c) 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, and 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.
(d) Reflects adjustments of estimated transaction costs accrued in
connection with the 2006 Transformation Plan forestland sales.
(e) Includes a pre-tax charge of $107 million ($84 million after taxes) to
write down the assets at the Inverurie, Scotland mill to its estimated
fair value.
(f) Includes a pre-tax charge of $27 million ($17 million after taxes) of
accelerated depreciation charges for the Terre Haute, IN mill, which
has been closed as part of the Company's Transformation Plan, and a
pre-tax charge of $10 million ($6 million after taxes) for
environmental costs associated with this closure, a pre-tax charge of
$3 million ($2 million after taxes) for Brazilian restructuring
charges, and a pre-tax charge of $2 million ($1 million after taxes)
for severance and other charges associated with the Company's
Transformation Plan.
(g) Includes a pre-tax charge of $13 million ($9 million after taxes) for
costs associated with the reorganization of the Company's Shorewood
operations in Canada.
(h) 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 pre-tax gain of
$2 million ($2 million after taxes) for adjustments to previously
recorded reserves and other charges associated with the Company's
Transformation Plan.
(i) 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.
(j) Includes a pre-tax charge of $27 million ($17 million after taxes) of
accelerated depreciation charges for the Terre Haute, IN mill, which
has been closed as part of the Company's Transformation Plan, and a
pre-tax charge of $10 million ($6 million after taxes) for
environmental costs associated with this closure, a pre-tax charge of
$3 million ($2 million after taxes) for Brazilian restructuring
charges, accelerated depreciation charges of $29 million ($18 million
after taxes) for long-lived assets being removed from service, and $17
million ($10 million after taxes) for severance and other charges
associated with the Company's Transformation Plan.
(k) Includes a pre-tax gain of $113 million ($102 million after taxes) on
the sale of the Arizona Chemical business, a pre-tax gain of $205
million ($159 million after taxes) related to the asset exchange for
the Luiz Antonio mill in Brazil, a $6 million pre-tax loss ($4 million
after taxes) for adjustments to the loss on the sale of UK and Ireland
box plants, a $5 million pre-tax credit ($4 million after taxes) for
adjustments to the loss on the sale of the coated and supercalendered
papers business, and a $3 million pre-tax loss ($3 million after
taxes) for other small items.
(l) Includes a pre-tax gain of $16 million ($6 million after taxes)
relating to the sale of the wood products business, a pre-tax loss of
$21 million ($43 million after taxes) for adjustments to the loss on
the sale of the beverage packaging business, a pre-tax gain of $6
million ($4 million after taxes) for adjustments to the loss on the
sale of the kraft papers business, a $10 million pre-tax credit ($6
million after taxes) for additional refunds received from the Canadian
government of duties paid by the Company's Weldwood of Canada Limited
business, and the year-to-date operating results of the beverage
packaging and wood products businesses.
International Paper Company
Reconciliation of Earnings Before
Special Items to Net Earnings
(In millions except for per share amounts)
Three
Three Months Months Nine Months
Ended Ended Ended
September 30, June 30, September 30,
2008 2007 2008 2008 2007
Earnings Before Special Items $356 $243 $235 $766 $669
Restructuring and other charges (96) (26) (9) (131) (53)
Net gains (losses) on sales and
impairments of businesses (84) 1 2 (83) 258
Forestland sales 2 5 4 5
Interest Income - - - - 1
Income tax adjustments (29) (3) - (29) (3)
Earnings Per Common Share from
Continuing Operations 149 220 228 527 877
Discontinued operations - (3) (1) (18) (36)
Net Earnings as Reported $149 $217 $227 $509 $841
Three
Three Months Months Nine Months
Ended Ended Ended
Diluted Earnings per Common Share September 30, June 30, September 30,
2008 2007 2008 2008 2007
Earnings Per Share Before Special
Items $0.84 $0.57 $0.56 $1.80 $1.54
Restructuring and other charges (0.23) (0.05) (0.02) (0.31) (0.11)
Net gains (losses) on sales and
impairments of businesses (0.20) - - (0.19) 0.58
Forestland sales - 0.01 - 0.01 0.01
Income tax adjustments (0.06) (0.01) - (0.07) (0.01)
Earnings Per Common Share from
Continuing Operations 0.35 0.52 0.54 1.24 2.01
Discontinued operations - (0.01) - (0.04) (0.08)
Diluted Earnings per Common Share $0.35 $0.51 $0.54 $1.20 $1.93
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
Three Months Months Nine Months
Ended Ended Ended
September 30, June 30, September 30,
2008 2007 2008 2008 2007
Printing Papers $1,800 $1,660 $1,790 $5,305 $4,810
Industrial Packaging 2,320 1,305 1,470 5,235 3,855
Consumer Packaging 830 775 795 2,395 2,315
Distribution 2,075 1,880 1,970 6,030 5,275
Forest Products 55 120 55 135 295
Other Businesses (6) - - - - 135
Corporate and Inter-segment
Sales (272) (199) (273) (817) (636)
Net Sales $6,808 $5,541 $5,807 $18,283 $16,049
Operating Profit by Industry Segment
Three Months Three Months Nine Months
Ended Ended Ended
September 30, June 30, September 30,
2008 2007 (2) 2008 2008 2007 (2)
Printing Papers $103 (3) $241 $226 $514 (3) $596
Industrial Packaging 95 (4) 84 87 279 (4) 265
Consumer Packaging (2)(5) 27 13 (5) 20 (5) 97
Distribution 35 30 26 77 80
Forest Products 305 96 41 371 287
Other Businesses (6) - - - - 6
Operating Profit (1) 536 478 393 1,261 1,331
Interest expense, net (144) (77) (81) (306) (218)
Minority interest/
equity earnings
adjustment (7) (1) 4 8 11 15
Corporate items, net (40) (56) (21) (82) (150)
Restructuring and
other charges (89) (42) - (126) (86)
Sale of forestlands 3 9 3 6 9
Net gains on sales
and impairments of
businesses - (1) - 1 314
Earnings From
Continuing Operations
Before Income Taxes,
Equity Earnings, and
Minority Interest $265 $315 $302 $765 $1,215
Equity Earnings in
Ilim Holdings S.A.,
Net of Taxes (1) $5 $- $32 $54 $-
(1) In addition to the operating profits shown above, International Paper
recorded $5 million and $32 million of equity earnings, net of taxes,
for the three months ended September 30, 2008 and June 30, 2008,
respectively, and $54 million of equity earnings, net of taxes, for
the nine months ended September 30, 2008, related to its equity
investment in Ilim Holdings S.A., a separate reportable industry
segment.
(2) Prior-year information has been revised to reflect a change in the
allocation of corporate overhead to the Company's industry segments.
(3) Includes a charge of $107 million to write down the assets of the
Inverurie, Scotland mill to estimated fair value.
(4) 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.
(5) Includes charges of $8 million and $13 million for the three months
ended September 30, 2008 and June 30, 2008, respectively, and $26
million for the nine months ended September 30, 2008, related to the
reorganization of the Company's Shorewood operations in Canada.
(6) Includes Arizona Chemical and certain smaller businesses.
(7) 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
and equity earnings for these subsidiaries are included here to
present consolidated earnings before income taxes, equity earnings,
and minority interest.
International Paper
Sales Volume by Product (1) (2)
Preliminary and Unaudited
International Paper Consolidated
Three
Three Months Months Nine Months
Ended Ended Ended
September 30, June 30, September 30,
2008 2007 2008 2008 2007
Printing Papers (In thousands of short
tons)
U.S. Uncoated Papers 875 940 868 2,653 2,871
European & Russian Uncoated Papers 355 351 373 1,101 1,081
Brazilian Uncoated Papers 217 225 211 638 567
Asian Uncoated Papers 6 6 7 21 18
Uncoated Papers 1,453 1,522 1,459 4,413 4,537
Market Pulp (3) 448 348 416 1,218 1,020
Industrial Packaging (In thousands of
short tons)
Corrugated Packaging (4) 1,641 896 896 3,419 2,683
Containerboard (4) 686 466 493 1,686 1,315
Recycling (4) 397 - - 397 -
Saturated Kraft 45 42 39 130 124
Bleached Kraft 24 19 22 65 53
European Industrial Packaging 261 274 288 844 879
Asia Industrial Packaging 154 116 152 443 329
Industrial Packaging 3,208 1,813 1,890 6,984 5,383
Consumer Packaging (In thousands of
short tons)
U.S. Coated Paperboard 403 413 399 1,202 1,200
European Coated Paperboard 81 79 73 235 238
Asia Coated Paperboard 138 127 123 386 371
Other Consumer Packaging 48 42 46 136 125
Consumer Packaging 670 661 641 1,959 1,934
(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
CONSOLIDATED BALANCE SHEET
Preliminary and Unaudited
(In Millions)
September 30, December 31,
2008 2007
Assets
Current Assets
Cash and Temporary Investments $771 $905
Accounts and Notes Receivable, Net 3,864 3,152
Inventories 2,766 2,071
Assets of Businesses Held for Sale - 24
Deferred Income Tax Assets 217 213
Other 272 370
Total Current Assets 7,890 6,735
Plants, Properties and Equipment, Net 14,755 10,141
Forestlands 712 770
Investments 1,377 1,276
Goodwill 3,877 3,650
Deferred Charges and Other Assets 1,558 1,587
Total Assets $30,169 $24,159
Liabilities and Common Shareholders' Equity
Current Liabilities
Notes Payable and Current Maturities of
Long-Term Debt $800 $267
Liabilities of Businesses Held for Sale - 4
Accounts Payable and Accrued Liabilities 4,155 3,571
Total Current Liabilities 4,955 3,842
Long-Term Debt 11,232 6,353
Deferred Income Taxes 3,124 2,919
Other Liabilities 1,854 2,145
Minority Interest 239 228
Common Shareholders' Equity
Invested Capital 4,206 4,297
Retained Earnings 4,559 4,375
Total Common Shareholders' Equity 8,765 8,672
Total Liabilities and Common Shareholders' Equity $30,169 $24,159
INTERNATIONAL PAPER
CONSOLIDATED STATEMENT OF CASH FLOWS
Preliminary and Unaudited
(In Millions)
Nine Months Ended
September 30,
2008 2007
Operating Activities
Net earnings $509 $841
Discontinued operations, net of
taxes and minority interest 18 36
Earnings from continuing operations 527 877
Depreciation, amortization and cost
of timber harvested 965 808
Deferred income tax (benefit) expense, net (51) 125
Restructuring and other charges 152 86
Payments related to restructuring
and legal reserves (71) (60)
Net losses (gains) on sales and
impairments of businesses 106 (314)
Gains on sales of forestlands (3) (9)
Equity earnings, net (51) -
Periodic pension expense, net 89 158
Other, net 80 145
Changes in current assets and liabilities
Accounts and notes receivable (12) (6)
Inventories (104) (91)
Accounts payable and accrued liabilities 243 (313)
Other 86 1
Cash provided by operations - continuing operations 1,956 1,407
Cash used for operations - discontinued operations - (56)
Cash Provided by Operations 1,956 1,351
Investment Activities
Invested in capital projects (732) (804)
Acquisitions, net of cash received (6,086) (227)
Proceeds from divestitures 14 1,675
Equity investment in Ilim (21) -
Other (147) (135)
Cash (used for) provided by
investment activities - continuing operations (6,972) 509
Cash used for investment activities -
discontinued operations - (12)
Cash (Used for) Provided by
Investment Activities (6,972) 497
Financing Activities
Repurchases of common stock and
payments of restricted stock tax withholding (47) (1,124)
Issuance of common stock 1 122
Issuance of debt 6,011 15
Reduction of debt (627) (528)
Change in book overdrafts (45) (3)
Dividends paid (321) (330)
Other (69) -
Cash Provided by (Used for) Financing Activities 4,903 (1,848)
Effect of Exchange Rate Changes on Cash (21) 78
Change in Cash and Temporary Investments (134) 78
Cash and Temporary Investments
Beginning of the period 905 1,624
End of the period $771 $1,702
SOURCE International Paper
10/30/2008
CONTACT: Media, Patty Neuhoff, +1-901-419-4052; Investors, Tom Cleves,
+1-901-419-7566, Ann-Marie Donaldson, +1-901-419-4967 and Emily Nix, +1-901-
419-4987 all of International Paper
Web site: http://www.internationalpaper.com
(IP)
