International Paper Company · NYSE:IP
International Paper — International Paper Co /New/ — Investor Presentation (November 2001)
33 slides from International Paper's investor presentation, Nov 27, 2001
Slide 1: Agenda
Agenda » Who We Are >» How We Are Changing the Company 1. Changing the Focus 2. Changing the Asset Mix 3. Changing How We Manage the Company > Is It Working? tennarionaL (parce ‘i
Slide 2: Forward Looking Statements
Forward Looking Statements The following information contains forward looking statements. 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 wit
Slide 3: International Paper Undergoing Significant Change
International Paper Paper & For@St Produ Undergoing Significant ee Change wremanionan paren
Slide 4: Major Change Underway
Major Change Underway: #1 Objective: Improve profitability & returns Changing the focus of the company Changing the asset mix of the company Changing the way we manage the company ntennarionaL (parce :
Slide 5: Changing the Focus
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Slide 6: Changing the Focus of IP
Changing the Focus of IP > In the 1980s: IP operated a broad portfolio of businesses >In the 1990s: IP required a different strategy > Today: IP is focusing on its key competencies & strengthening its core operations + Paper + Packaging + Forest Products ntennarionaL (paren a:
Slide 7: Our Paper Products
Our Paper Products inrennarionaL Parc :
Slide 8: Our Packaging Products
Our Packaging Products INTERNATIONAL @P)PAPER :
Slide 9: Our Forest Products
Our Forest Products inrennarionaL @f)ParcR 0
Slide 10: Strengthening Core Operations
Strengthening Core Operations Strategic Acquisitions Union Camp valuable uncoated paper & packaging assets Champion quality coated/uncoated assets INTERNATIONAL()PAPER "4
Slide 11: IP Has a Significant Position in Key Segments
IP Has a Significant Position in Key Segments Rank > U.S. Printing Papers #1 » U.S. Coated Papers #1 » Bleached Board al » Containerboard #2 > U.S. Land Ownership. #1 »>N. American Lumber #2 INTERNATIONAL()PAPER 12
Slide 12: Changing the Asset Mix
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Slide 13: Strengthening Core Operations
Strengthening Core Operations Improving costs and efficiencies Announced Actions Status 4Q00 Indefinite shutdown of Mobile mill mill down Closure of Lock Haven mill 2 machines down Down-sizing of Courtland mill machines down Close Camden kraft paper mill mill down, rennamionaL paren a
Slide 14: Strengthening Core Operations
Strengthening Core Operations Improving costs and efficiencies Announced Actions Status 400 Indefinite shutdown of Mobile mill mill down Closure of Lock Haven mill 2 machines down Down-sizing of Courtland mill machines down Close Camden kraft paper mill mill down 1Q01 Discontinue 2 lumber operations
Slide 15: Strengthening Core Operations
Strengthening Core Operations Improving costs and efficiencies Announced Actions Status 4qQ00 Indefinite shutdown of Mobile mill Closure of Lock Haven mill Down-sizing of Courtland mill Close Camden kraft paper mill 1Q01 Discontinue 2 lumber operations Shutdown 2 plywood mills 2Q01 Close Moss Point
Slide 16: Strengthening Core Operations
Strengthening Core Operations Improving costs and efficiencies Capacity Shut Down % of IP U.S. Capacity Uncoated paper: 920,000 tpy 20% Market pulp: 320,000 tpy 19% Containerboard: 840,000 tpy 16% Lumber: 380 mmbf 13% Plywood: 180 mmsf 3/8” 9% Bleached Board: 190,000 tpy 8% Coated Freesheet: 60,000
Slide 17: Improved IP's U.S. Cost Position in North American Uncoated Freesheet
Improved IP’s U.S. Cost Position in North American Uncoated Freesheet 1000 7-------- First Quarto 900 } SS 800 + - 2000 Cash Cost per Ton ($) 0 5,000 10,000 CumulativeNorth American Annual Capaiy in Short Ton ions) ierenvonn paren
Slide 18: IP's Linerboard System is Cost Competitive
IP’s Linerboard System is Cost Competitive First Quartile Second Quattie Third Guarile Fourth Quartile 2000 Cash Cost per Ton ($) 0 5,000 10,000 16,000 20,000 26,000 Cumulative North American Annual Capacity in Short Tons (lions) stom ne Py Cnt nt ntennarionaL(@)rarcn oe
Slide 19: Divesting Non-Core Assets
Divesting Non-Core Assets Bush Boake Allen Oil & Gas. Arizona Chemical Zanders Hydro Assets Decorative Products Hamilton Mill Flexible Packaging Chemical Cellulose Argentina Packaging Masonite Chocolate Bayou Washington State Timberlands Timberlands Champion Office TOTAL $2.6B ntennarionaL (parr oa
Slide 20: Changing the Asset Mix: Summary
Changing the Asset Mix Summary » Closed 32 facilities, including 7 mills » Downsized 12 facilities » Shut down 2.3 million tons of capacity » Closed 100 distribution operations » Reduced staffing by nearly 12,000 positions » Sold 9 businesses vtennarionaL (parce a
Slide 21: Slide 21
Slide 22: Changing How We Manage IP
Changing How We Manage IP > Customer Driven » People Engagement » Accountability > Capital » Aggressive Cost Management ntennarionaL (paren oe
Slide 23: Customer Driven Company
n Customer Driven Company >» Segment, Target, Position > Grow business with target customers intenwarionaL(@)raren Z
Slide 24: Changing How We Manage IP
Changing How We Manage IP » Customer Driven » People Engagement » Accountability » Capital » Aggressive Cost Management ntennarionaL (paren ss
Slide 25: Changing How We Manage IP
Changing How We Manage IP » Customer Driven » People Engagement » Accountability > Capital » Aggressive Cost Management ntennarionaL(@rarcn ce
Slide 26: Changing How We Manage IP: Matching production to demand
Changing How We Manage IP Matching production to demand Market Related 815 Ci ‘ity Downtime ed ° 20 | 490 = oa in el | I = 1Q'00 2Q'00 3Q'00 4Q ‘00 1Q‘01* 2Q'‘01* 3Q'01* i Containerboard Uncoated papers Pul mCoated papers Bleached Board mEuropean Papers “Downtime is after 40 0 rationalization action
Slide 27: Changing How We Manage IP: Cost management
Changing How We Manage IP Cost management Capture merger synergies Reduce overhead Improve machine productivity Improve purchasing leverage Share best practices ntennarionaL (paren ot
Slide 28: Is It Working?
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Slide 29: Improved Productivity
Improved Productivity Average Percent Machine Size Improvement Tonsivr Uncoated Freesheet IP Today 200 60% IP Sefore Champion/UnionCamp 125 Containerboard IP Today 420 40% IP S</ore Champion/Union Camp 300 ntennarionaL (paren a
Slide 30: 3Q '01 vs. 2Q '01 - Operating EPS
3Q ‘01 vs. 2Q ‘01 - Operating EPS Cost cuts/operational efficiencies improving earnings EPS $/ Share soso go.12 $0.01 $00.11) ws an (0.02) 30.46 $0.02) sa.01 $0.14 PARE = = saw wo som ss Soo 5 © of o = = eS ntennarionaL (paren
Slide 31: Upside Potential - Mid Cycle Prices
Upside Potential - Mid Cycle Prices » Upside earnings potential + Higher volumes + Mid-cycle prices + Additional non-price improvement » Mid-cycle target - Earnings before interest and taxes - $4 billion + EBITDA - approaching $6 billion ntennarionaL (paren
Slide 32: IP: Changing the Way We Do Business
IP: Changing the Way We Do Business Leanerpfox Delivering 0 Well Positioned for Economic Upturn wnremvarionat @) paren
Slide 33: International Paper
INTERNATIONAL (A) PAPER
International Paper Co /New/ — Investor Presentation (November 2001) on 6ix