IP Agrees to Sell Temple-Inland Building Products Division
Friday, December 14, 2012
Press release from the issuing company
Announces Changes to Pension Expense Reporting
MEMPHIS, Tenn., - International Paper today announced that it has reached an agreement to sell its Temple-Inland Building Products division to Georgia-Pacific LLC for $750 million in cash, subject to certain pre-and post-closing adjustments. The assets to be sold include 16 manufacturing facilities - five solid wood mills, four particleboard plants, two medium-density fiberboard plants, one fiberboard plant and four gypsum wallboard plants.
"While not core to IP's strategy, Temple-Inland Building Products is an industry leader," said John Faraci, Chairman and Chief Executive Officer. "I am pleased to have reached a deal that recognizes the strength of the business and provides excellent value for IP shareowners."
Temple-Inland Building Products facilities are located across eight states, primarily in the southeastern and eastern portions of the United States, with access to five of the top 12 housing markets.
The transaction is expected to be completed in the first quarter of 2013, subject to satisfaction of various closing conditions, including obtaining required governmental approvals. IP intends to use the proceeds from the sale to reduce its debt.
Additionally, the Company announced its intention to report a new (Non-GAAP) adjusted EPS measure, 'Operating Earnings' beginning with our fourth quarter 2012 earnings release. Operating earnings is defined as earnings from continuing operations (GAAP) excluding special items and non-operating pension expense, which is impacted by changes in interest rates and plan returns. Significant declines in interest rates over the past several years have caused an extraordinary increase in certain components of pension expense that the Company considers to be unrelated to underlying operating performance. This move will thereby reduce the volatility in earnings from non operational factors and improve the transparency of the performance of current operations. For the nine-month period ended Sept. 30, 2012, non-operating pension expense was approximately $.18 per share on a continuing operations basis. The Company will provide further information concerning the new reporting format with our next quarterly earnings release.
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