International Paper Company CONSOLIDATED STATEMENT OF OPERATIONS In millions, except per share amounts, for the years ended December 31 2004 ) 2003 ) 2002 ) Net Sales $25,548) $23,955) $23,899) Costs and Expenses Cost of products sold 18,996) 17,878) 17,468) Selling and administrative expenses 2,005) 1,952) 2,022) Depreciation, amortization and cost of timber harvested 1,565) 1,538) 1,497) Distribution expenses 1,054) 992) 993) Taxes other than payroll and income taxes 242) 241) 242) Restructuring and other charges 211) 298) 695) Insurance recoveries (123) -) -) Net losses (gains) on sales and impairments of businesses held for sale 144) 32) (41) Reversals of reserves no longer required, net (35) (40) (68) Interest expense, net 743) 772) 785) Earnings From Continuing Operations Before Income T axes and Minority Interest 746) 292) 306) Income tax provision (benefit) 206) (113) (72) Minority interest expense, net of taxes 62) 111) 118) Earnings From Continuing Operations 478) 294) 260) Discontinued operations, net of taxes and minority interest (513) 21) 35) Cumulative effect of accounting changes, net of taxes and  minority interest: Asset retirement obligations -) (10) -) Variable interest entities -) (3) -) Transitional goodwill impairment charge -) -) (1,175) Net Earnings (Loss) $(35) $302) $(880) Basic Earnings (Loss) Per Common Share Earnings from continuing operations $0.98) $0.62) $0.54) Discontinued operations, net of taxes and minority interest (1.05) 0.04) 0.07) Cumulative effect of accounting changes, net of taxes and  minority interest: Asset retirement obligations -) (0.02) -) Variable interest entities -) (0.01) -) Transitional goodwill impairment charge -) -) (2.44) Net earnings (loss) $(0.07) $0.63) $(1.83) Diluted Earnings (Loss) Per Common Share Earnings from continuing operations $0.98) $0.61) $0.54) Discontinued operations, net of taxes and minority interest (1.05) 0.04) 0.07) Cumulative effect of accounting changes, net of taxes and  minority interest: Asset retirement obligations -) (0.02) -) Variable interest entities -) (0.01) -) Transitional goodwill impairment charge -) -) (2.43) Net earnings (loss) $(0.07) $0.63) $(1.82) The accompanying notes are an integral part of these financial statements. 38