01—Abstract
Summary
Summary of the 10-K filed March 31, 1994. Cited figures are marked; the original filing is the authoritative source.
International Paper Company reported 1993 net sales of $13.69 billiona, up slightly from $13.60 billion in 1992, and net earnings of $289 million, or $2.34 per share, compared with $86 million, or $.71 per share, in 1992.
Those 1993 results include a $25 millionb charge to revalue deferred tax balances for the increase in the U.S. federal income tax rate; before that charge, net earnings were $314 million, or $2.54 per share. Operating profit rose to $832 million from $570 million, though 1992 included $336 million of restructuring and other charges. Results diverged by segment: Forest Products set a record with operating profit of $445 million, while Printing Papers posted an operating loss of $122 million, reflecting weak European markets and prices.
Packaging operating profit fell to $188 million and Specialty Products rose to $263 millionc. Cash provided by operations was $929 million in 1993, down from $1.08 billion in 1992. Capital spending was $954 million in 1993 and is expected to exceed $1.1 billion in 1994, with major projects focused on printing papers and packaging.
The debt-to-capital ratio was 38.7% at year-end 1993, and the company paid dividends of $1.68d per share. The filing describes ongoing environmental capital programs, with $160 million expected in 1994 and an estimated $700 million to $1.5 billion needed for future Cluster Rulemaking and Great Lakes Initiative compliance. It also discloses substantial dioxin-related litigation in Mississippi, where plaintiffs seek total compensatory damages of approximately $1.0 billion and punitive damages of approximately $8.4 billion.
The company believes these proceedings will not have a materially adverse effect on its consolidated financial position or results of operations. In March 1994, a subsidiary acquired about half of Brierley Investments' holdings in Carter Holt Harvey, raising International Paper's ownership to 24%. Management expects 1994 improvement in printing papers and packaging as prices recover and European economies improve, while Petroleum earnings are expected to decline on lower oil prices.
02—Key points
Key Highlights
- Net earnings were $289 million, or $2.34 per share, in 1993, versus $86 million, or $.71 per share, in 1992.
- Operating profit rose to $832 million from $570 million, with 1992 including $336 million of restructuring and other charges.
- Forest Products delivered record operating profit of $445 million on net sales of $1.7 billion, while Printing Papers recorded an operating loss of $122 million.
- Capital spending was $954 million in 1993 and is expected to exceed $1.1 billion in 1994.
- Cash provided by operations was $929 million in 1993, down from $1.08 billion in 1992.
- The debt-to-capital ratio was 38.7% at year-end 1993, and the company paid $1.68 per share in dividends.
- In March 1994, the company raised its ownership of Carter Holt Harvey to 24% through the purchase of about half of Brierley Investments' holdings.
03—Questions
Frequently Asked Questions
How did International Paper perform financially in 1993?
Net sales were $13.69 billion, slightly above 1992's $13.60 billion. Net earnings were $289 million, or $2.34 per share, up from $86 million, or $.71 per share, in 1992. Earnings included a $25 million charge for revaluing deferred taxes after the increase in the U.S. federal income tax rate.
Which business segments drove results?
Forest Products reported record operating profit of $445 million on net sales of $1.7 billion, benefiting from strong lumber and panel prices and higher IPT harvest volumes. Specialty Products operating profit rose to $263 million. Printing Papers posted an operating loss of $122 million, reflecting weak European sales and prices, and Packaging operating profit fell to $188 million.
What are the company's capital spending and cash flow plans?
Capital spending was $954 million in 1993 and is expected to exceed $1.1 billion in 1994, focused mainly on printing papers and packaging facilities, including a new uncoated paper machine at the Riverdale mill and the $175 million Kwidzyn investment program. Cash provided by operations was $929 million in 1993. Management said cash flow from operations is expected to be adequate to meet capital expenditures, working capital and dividend requirements.
What environmental and legal exposures does the filing disclose?
The company spent $100 million on environmental capital in 1993 and expects about $160 million in 1994. It estimates future capital spending of $700 million to $1.5 billion to comply with the Cluster Rulemaking and Great Lakes Initiative regulations. In Mississippi, 79 dioxin-related cases seek total compensatory damages of about $1.0 billion and punitive damages of about $8.4 billion, but the company believes these will not have a materially adverse effect on its financial position or results of operations.
What changed in the company's ownership and holdings in 1994?
In March 1994, a subsidiary acquired about one-half of Brierley Investments Limited's holdings in Carter Holt Harvey Limited, a New Zealand forest products and paper company. The purchase raised International Paper's ownership of Carter Holt Harvey to 24%, leaving Brierley with 8%.
04—Continue