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Fort James Corp – ‘10-K405’ for 12/26/99

On: Monday, 3/27/00 · For: 12/26/99 · Accession #: 950131-0-2041 · File #: 1-07911

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 3/27/00  Fort James Corp                   10-K405    12/26/99   10:346K                                   Donnelley R R & S… 03/FA

Annual Report — [x] Reg. S-K Item 405 — Form 10-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K405     Form 10-K                                             21    124K 
 2: EX-3.A      Amended and Restated Articles of Incorp.               7     39K 
 3: EX-10.O     Separation Agreement                                  11     31K 
 4: EX-10.P     Employment Agreement                                  22     66K 
 5: EX-10.Q     Employment Agreement                                  20     66K 
 6: EX-12       Computation of Ratio of Earnings                       1      7K 
 7: EX-13       Sections of the Annual Report                         52±   243K 
 8: EX-21       Subsidiaries of the Company                            2±    10K 
 9: EX-23       Consent of Independent Accountants                     2±    10K 
10: EX-27       Financial Data Schedule                                2     10K

10-K405 — Form 10-K
Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (Word, et al.) Business Certain Relationships and Related Transactions Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Directors and Executive Officers of the Registrant Environmental Matters Executive Compensation Exhibits, Financial Statement Schedules and Reports on Form 8-K Financial Statements and Supplementary Data Legal Proceedings Management's Discussion and Analysis of Financial Condition and Results of Operations Market for Registrant's Common Equity and Related Stockholder Matters Properties Quantitative and Qualitative Disclosures About Market Risk Security Ownership of Certain Beneficial Owners and Management Selected Financial Data Submission of Matters to a Vote of Security Holders
1	1st Page - Filing Submission
3	Item 1. Business
9	Environmental Matters
11	Item 2. Properties
12	Item 3. Legal Proceedings
"	Item 4. Submission of Matters to a Vote of Security Holders
"	Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
"	Item 6. Selected Financial Data
13	Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
"	Item 7A. Quantitative and Qualitative Disclosures About Market Risk
"	Item 8. Financial Statements and Supplementary Data
"	Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
"	Item 10. Directors and Executive Officers of the Registrant
14	Item 11. Executive Compensation
"	Item 12. Security Ownership of Certain Beneficial Owners and Management
"	Item 13. Certain Relationships and Related Transactions
"	Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K

10-K405 1st Page of 21 TOC ↑Top Previous Next ↓Bottom Just 1st
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

Form 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
of the
SECURITIES EXCHANGE ACT OF 1934

For the year ended Commission File
December 26, 1999 Number 1-7911

FORT JAMES CORPORATION
(Exact name of registrant as specified in its charter)

VIRGINIA 54-0848173
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)

1650 Lake Cook Road
Deerfield, Illinois 60015-4753
(Address of Principal Executive Offices)

Registrant's Telephone Number, Including Area Code
(847) 317-5000

Securities registered pursuant to Section 12(b) of the Act:

[Download Table]

Name of Each Exchange
Title of Each Class on Which Registered
------------------- -----------------------

Common Stock, $.10 par value New York Stock Exchange

Rights to Purchase Series M New York Stock Exchange
Cumulative Participating
Preferred Stock, $10 par
value

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [_]

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]

[Download Table]

Aggregate market value of voting stock held by non-affiliates of
the registrant, at close of business, February 27, 2000........ $4,134,600,000
Number of shares of $.10 par value common stock outstanding, as
of February 27, 2000........................................... 213,398,208

Documents Incorporated by Reference:

(1) Portions of the registrant's Annual Report to Shareholders for the year
ended December 26, 1999, incorporated into Parts I and II hereof; and (2)
Portions of the registrant's definitive Proxy Statement for the Annual Meeting
of Shareholders to be held on April 27, 2000, incorporated into Part III
hereof.

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FORT JAMES CORPORATION

Annual Report on Form 10-K
December 26, 1999

TABLE OF CONTENTS

[Download Table]

Page
----

PART I
Item 1. Business....................................................... 3
Item 2. Properties..................................................... 11
Item 3. Legal Proceedings.............................................. 12
Item 4. Submission of Matters to a Vote of Security Holders............ 12
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder
Matters...................................................... 12
Item 6. Selected Financial Data........................................ 12
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations........................................ 13
Item 7a Quantitative and Qualitative Disclosures about Market Risk..... 13
Item 8. Financial Statements and Supplementary Data.................... 13
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure......................................... 13
PART III
Item 10. Directors and Executive Officers of the Registrant............. 13
Item 11. Executive Compensation......................................... 14
Item 12. Security Ownership of Certain Beneficial Owners and Management. 14
Item 13. Certain Relationships and Related Transactions................. 14
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K..................................................... 14

10-K405 3rd Page of 21 TOC 1st Previous Next ↓Bottom Just 3rd
PART I

ITEM 1. BUSINESS

(a) General Development of Business

Fort James Corporation ("Fort James" or the "Company"), incorporated in the
Commonwealth of Virginia, manufactures and markets consumer tissue products,
including bath tissue, facial tissue, paper towels and napkins, and disposable
tabletop products, including cups, plates, bowls and cutlery. Principal
markets for the Company's tissue products include North America and Europe,
while its disposable tabletop products are marketed primarily in North America
under the Dixie name. The Company is the second largest provider of tissue-
based products globally, and holds the leading position in North America. In
disposable cups and plates, the Company has the largest U.S. retail market
share of such products. Additionally, the Company manufactures and markets
business, office and printing papers, primarily in the western United States.
Fort James also sells small amounts of market pulp and recycled paper in
excess of its local needs.

Fort James was created by the merger of a subsidiary of James River
Corporation of Virginia ("James River") with and into Fort Howard Corporation
("Fort Howard") in August 1997 (the "Merger"). The Merger was accounted for as
a pooling of interests. In connection with the Merger, James River Corporation
of Virginia was renamed Fort James Corporation.

Disclosures made herein are as of December 26, 1999, or for the 52-week year
then ended. Portions of the Fort James Annual Report to Shareholders for the
year ended December 26, 1999 (the "1999 Annual Report") are incorporated in
this Form 10-K by specific reference. All reference to "Notes" are to Notes to
Consolidated Financial Statements in the 1999 Annual Report. All references to
tons refer to short tons, unless otherwise specifically indicated.

1999 Developments

1. Dispositions

In December 1999, Fort James signed an agreement to sell its non-
integrated softwood kraft pulp mill in Marathon, Ontario ("Marathon"),
to a joint venture between Tembec Inc. and Kruger Inc. for $69.1
million. In addition, the parties entered into a three-year renewable
supply agreement, largely to provide pulp to the Company's non-
integrated European tissue operations. This sale closed on January 31,
2000. In December 1999, the Company also announced its decision to exit
the groundwood paper business ("the Groundwood Business") by closing
its groundwood paper operations at the Wauna mill in Clatskanie, Oregon
in the first quarter of 2000. The operations of the Groundwood Business
include a whole log chipping operation, a groundwood pulp mill and a
140,000 ton per year paper machine.

In August 1999, the Company sold its Packaging business to ACX
Technologies, Inc. for $836.3 million in cash. The sale included the
operations, assets, and liabilities of the Company's folding carton,
healthcare, and microwave packaging manufacturing facilities. As a
result of the sale, the operating results of the Packaging business
have been reported as discontinued operations.

2. Acquisitions

In December 1999, Fort James purchased its partner's 50% interest in
the Naheola Cogeneration Limited Partnership ("the Naheola
Partnership") for $53.6 million and refinanced $141 million of 9%
Naheola Partnership debt on more favorable terms. The Naheola
Partnership provides energy to the Company's Naheola, Alabama mill. The
acquisition of the equity interest was recorded as a purchase.

In July 1999, the Company acquired the operations of the Demak'Up
brand from The Procter & Gamble Company for $56.7 million. Demak'Up is
the leading European brand of make-up removal

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cotton pads. The operations include a cotton product manufacturing
plant in Brionne, France. The acquisition was accounted for as a
purchase.

3. Stock Buy-Back Plan

In August 1999, the Company commenced a $500 million stock purchase
program intended to be completed in 18 months. As of December 26, 1999,
the Company had purchased 7.1 million shares of common stock at a total
cost of $199.7 million.

Additional information on the Company's dispositions and acquisitions is
presented in Note 2 of Notes to Consolidated Financial Statements in the 1999
Annual Report, which information is incorporated herein by reference.

(b) Financial Information About Industry Segments

For financial reporting purposes, Fort James operations are separated into
the following segments:

. Tissue--North America, which manufactures and markets paper-based towel
and tissue products;

. Tissue--Europe, which also manufactures and markets paper-based towel
and tissue products, as well as feminine hygiene products and health
care and pharmacy items;

. Dixie, which manufactures and markets disposable plates, cups and
cutlery principally under its DIXIE brand;

. Communications Papers and Fiber, which manufactures and markets uncoated
business and printing papers for the commercial printing and office
markets, also includes pulp sales to both intercompany and third-party
customers and the Harmon Associates wastepaper brokerage business.

Included in 1999 income from operations for segment results, are unusual
charges for severance and other costs related to a reduction-in-force program
and for antitrust and other litigation accruals of $46.0 million. Income from
operations, before restructure and other items, is used to measure segment
profitability.

Financial information on the Company's segments is presented in Note 14 of
Notes to Consolidated Financial Statements in the 1999 Annual Report, which
information is incorporated herein by reference.

Principal Products

Fort James processes basic raw materials, such as wood, wood pulp,
wastepaper, paperboard and plastic resins, into products, which generally are
close to or in their end use form. Market share and product rankings are based
on U.S. industry statistics for the 52-week period ended January 15, 2000, or
internal Company estimates.

Tissue--North America

In 1999, the Tissue--North America business reported income from operations
of $644.7 million on sales of $3.6 billion (net of intercompany sales),
representing 52% of consolidated net sales. Income from operations, excluding
unusual items, was $679.4 million.

In the retail channel, which accounts for approximately 60% of segment
sales, Fort James produces both branded and private label products. The
Company's principal retail brands include QUILTED NORTHERN bathroom tissue
(the number two bathroom tissue brand), BRAWNY paper towels (the number two
paper towel brand), MARDI GRAS napkins (the leading paper napkin brand) and
paper towels, VANITY FAIR premium dinner napkins (the number one premium
napkin brand), NORTHERN paper napkins (the number three paper napkin brand),
and SOFT'N GENTLE bathroom and facial tissue.

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Fort James also supplies private label or customer brand products to some of
the best known retailers in the United States including Wal-Mart Stores, Inc.,
Kroger Co., Walgreen Co. and Federated Foods. The Company believes that it is
the leading supplier to the U.S. private label towel and tissue market, with
an estimated market share between 40% and 45%. Additionally, the Company
believes it is the leading supplier of towel, tissue and napkin products to
the warehouse club channel, which includes Costco Wholesale Corporation, Sam's
Clubs and BJ's.

In the away-from-home channel, the Company sells towel and tissue products
to foodservice, janitorial supply and sanitary paper distributors for use in
restaurants, offices, factories, hospitals, schools and hotels. The Company's
principal away-from-home brands include ENVISION, the leading brand of
environmentally positioned 100% recycled tissue, towel and napkin products;
and PREFERENCE ULTRA premium, PREFERENCE near premium, and ACCLAIM economy
tissue, towel and napkin products. With an estimated market share between 35%
and 40%, Fort James believes it is the leading producer of towel and tissue
products for the U.S. away-from-home channel.

Tissue--Europe

In 1999, the Tissue--Europe business reported income from operations of
$210.4 million on sales of $1.8 billion, representing 27% of consolidated net
sales.

The Tissue--Europe business is a leading supplier of paper-based consumer
products in many European countries. Product lines in both the retail and
away- from-home markets include bathroom and facial tissue, paper towels and
napkins. Retail sales include both branded and private label products. The
Company also markets feminine hygiene products and pharmacy supplies in select
countries.

During 1999, tissue-based products accounted for approximately 85% to 90% of
annual sales with the balance comprised of feminine hygiene products,
ancillary products, such as health care and pharmacy items, and unconverted
tissue parent rolls. Fort James sells its towel and tissue products through
both retail and away-from-home distribution channels in Europe. Approximately
75% of European towel and tissue sales were into retail distribution channels
and the remaining 25% were into away-from-home and other channels. Sales into
retail channels are supported by both branded and private label product
offerings.

The Company's principal European brands include LOTUS bathroom tissue and
handkerchiefs (both hold the number one position in France), MOLTONEL bathroom
tissue (the number two tissue in France), LOTUS kitchen towels (the number one
kitchen towel in the Netherlands), OKAY kitchen towels (the number one kitchen
towel in France), COLHOGAR kitchen towels and bathroom tissue (both hold
number one positions in Spain), KITTENSOFT towels and bathroom tissue (both
hold number one positions in Ireland), EMBO bathroom tissue (the number one
tissue in Finland), TENDERLY bathroom tissue (the number two tissue in Italy),
DELICA kitchen towels and bathroom tissue (both hold number two positions in
Greece), VANIA feminine hygiene products (the leader in France), SELPAK
premium tissue products (the leader in Turkey) and DEMAK'UP cotton facial pads
(the leader in Europe).

Fort James' largest European operations are in France and the United
Kingdom, which combined, account for approximately 75% of sales. Aggregating
retail branded, private label and away-from-home production, the Company
believes it is the largest producer of tissue products in France, Spain,
Finland, Ireland, and Turkey and the second largest producer in the United
Kingdom and Greece.

Dixie

During 1999, the Dixie business reported income from operations of $105.1
million on sales of $783.9 million (net of intercompany sales), which
represents 12% of consolidated net sales. Income from operations, excluding
unusual items, was $106.0 million. The Dixie business is conducted primarily
in North America.

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The Dixie business, with one of the most recognized names in disposable
plates, cups and cutlery, provides a full range of products for both retail
and foodservice distribution channels. The Company's principal retail tabletop
brand is DIXIE, which has the largest U.S. retail market share for disposable
cups and plates. The Company believes that it is also the leading supplier of
tabletop products to the warehouse club channel. Foodservice customers include
distributors, restaurants, hotels, office buildings, and institutions. The
Company believes that it is one of the largest producers of disposable cups,
plates and related products for the foodservice industry. Approximately 55% of
sales are into retail distribution channels and the remaining 45% are into
foodservice distribution channels.

In 1999, the Company announced the retail launch of new DIXIE Rinse & ReUse
Disposable Stoneware plates and the expansion in foodservice channels of
PERFECTOUCH insulated hot cups.

Communications Papers and Fiber

During 1999, the Communications Papers and Fiber businesses reported a loss
from operations of $8.7 million on sales of $644.8 million (net of
intercompany sales), which represented 9% of consolidated net sales. Excluding
unusual items, the loss from operations was $6.6 million.

The Communications Papers business sells printing and publishing papers used
in brochures, catalogs, manuals, direct mail and advertising inserts, and on
cut-size office printing and copying papers used in printers and copiers. The
Company is the largest producer of uncoated communications papers in the
western United States and its EUREKA! brand is the number one recycled brand
of office and printing papers in the western United States.

The Company's domestic kraft and deinked pulp operations are fully
integrated with its tissue-making and converting operations, with excess
production sold externally by the Fiber business. Fiber sales also include
both intercompany sales of pulp and third-party sales of wastepaper through
the Harmon Associates wastepaper brokerage business.

Marketing

The Tissue--North America and Dixie businesses have organized their
marketing efforts both along distribution channels and by product line. Fort
James' retail products are marketed directly to customers through national and
regional sales organizations. The Company's retail sales force markets both
consumer towel, tissue and tabletop products directly to grocery stores, drug
stores, mass merchandisers and warehouse clubs. In addition, the Company has
an away-from-home sales force that markets towel and tissue products primarily
to outside distributors, who generally focus on specific market segments.
Regional distribution centers located throughout the United States and
warehouse space at the Company's production facilities are used to manage
inventories and transportation costs.

Marketing of Fort James' consumer products within Europe is generally
similar to such efforts in the United States. However, national (individual
country) sales organizations are necessary due to customer preferences and
language and cultural differences among countries. The majority of products in
Europe are manufactured and sold within national or regional markets, in part,
to control logistics and distribution costs.

Raw Materials and Supplies

Fort James utilizes a variety of raw materials in its manufacturing
processes. These include wood, wood pulp, wastepaper, selected base papers and
paperboards and plastic resins and chemicals. Fort James believes there is
generally a sufficient supply of these or substitutable raw materials.

The Company's paper products are manufactured principally from wood-based
pulp and deinked pulp which are both produced internally and purchased from
external sources. The Company produces deinked pulp through the recycling of
wastepaper and other reclaimable fiber sources.

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The capacity of Fort James' pulping facilities in North America and Europe
(excluding Marathon and the Groundwood Business) is summarized as follows:

[Download Table]

Capacity (thousands of
Pulp Type metric tons per year)
--------- --------------------------
North America Europe Total
------------- ------ -----

Kraft/Wood pulp................................. 1,695 -- 1,695
Deinked pulp.................................... 1,575 360 1,935
----- --- -----
Total......................................... 3,270 360 3,630
===== === =====

In addition to the Company's internal sources, several types of pulp are
purchased from both domestic and international suppliers. Purchased pulp is
used to supply non-integrated paper mills in Europe, to obtain types of pulp
not produced by the Company, and to minimize transportation costs. After the
sale of Marathon and the closure of the Groundwood Business, the Company will
produce approximately 80% of its pulp requirements. On a geographic basis, the
Company will be a net seller in North America of approximately 100,000 metric
tons per year of pulp and will purchase approximately 500,000 metric tons of
pulp in Europe. The Company's paper machines in Europe are supplied through a
combination of purchased chemical pulp, deinked fiber pulp and Fort James'
North American pulp production.

Pulpwood and woodchips used in Fort James' pulp mills are primarily obtained
from leased lands, lands covered by long-term cutting rights agreements,
supply contracts and open market purchases. All of the timberlands controlled
by Fort James are managed on a sustained-yield basis, and the rate of timber
harvesting is generally equal to or less than the average growth rate. Fort
James currently has controlled access of timber supply on approximately
125,000 acres of timberland.

Fort James is an industry leader in developing towel and tissue products
from recycled wastepaper. Currently, the Company recycles approximately 2.5
million tons of wastepaper annually. The Company uses wastepaper in making a
large portion of its consumer and away-from-home tissue products in both North
America and Europe, as well as in certain communications papers. The Company
obtains deinked and other grades of wastepaper through its Harmon Associates
wastepaper brokerage business.

Bleached paperboard is used in the manufacturing of plates and cups. A
substantial portion of Fort James bleached paperboard needs are manufactured
at its Naheola, Alabama mill. In addition, the Company makes purchases from
outside bleached paperboard producers to obtain grades of paperboard not
produced by the Company or to minimize transportation costs. Such purchases
are made pursuant to long-term contracts with prices approximately equal to
prevailing market prices. In total, the Company is a net seller of a small
amount of bleached paperboard.

Polystyrene and polypropylene plastic resins are utilized in the production
of tabletop products including plastic cups and other containers, lids for
plastic and paper containers, and plastic cutlery. The Company purchases
plastic resins pursuant to negotiated arrangements with a variety of
suppliers.

In addition to these materials, pulp and paper production depends on an
adequate supply of water, electric power and various forms of fuel for the
generation of steam and electricity. The Company's major types of purchased
fuels and energy include electricity, natural gas, coal, oil and petroleum
coke. The Company internally generates approximately 45% of its North American
electrical energy needs, with cogeneration facilities at a number of its major
facilities.

Trademarks and Patents

Fort James has a number of trademarks and trade names registered
domestically and in certain foreign countries under which it conducts its
business. Trademarks include, among others, ACLAIM, BRAWNY, COLHOGAR, DELICA,
DEMAK'UP, DIXIE, EMBO, ENVISION, EUREKA!, GREEN FOREST, LOTUS,

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MARDI GRAS, MOLTONEL, NORTHERN, OKAY, PERFECTOUCH, PREFERENCE, PREFERENCE
ULTRA, QUILTED NORTHERN, QUILT-RAP, SELPAK, SO-DRI, SOFT'N GENTLE, TENDERLY,
VANIA, VANITY FAIR, and WORD PRO. The Company considers its trademarks, in the
aggregate, to be material to its business, and consequently, seeks trademark
protection by all available means. The Company also has a variety of material
patents and licenses related to its business. While, in the aggregate, the
foregoing patents and licenses are of material importance to Fort James'
business, the Company believes the loss of any one or any related group of
such intellectual property rights would not have a material adverse effect on
its operations.

Seasonal Business

While seasonal variation in demand is not a major factor in the Company's
business, the first and fourth quarters of the year are generally the lowest
in net sales and operating income. Net sales and profit margins in the Dixie
business are generally higher in the spring and summer (second and third
quarters) compared to the winter (fourth and first quarters) due to the
seasonal strength of the retail DIXIE paper cup and plate business during the
summer months. In addition, the away-from-home tissue channel of the North
American and European Tissue businesses generally experience lower sales
volumes in the fourth quarter, when many industrial customers are on extended
holiday shutdowns. Profit margins for the Company have also historically been
lower in the first and fourth quarters because of holiday, vacation and
maintenance shutdowns and higher seasonal energy costs.

Customers

For 1999, sales to Fort James' five largest customers in the aggregate
accounted for approximately 22% of consolidated net sales. Sales to the five
largest Tissue--North America customers accounted for approximately 33% of its
sales, sales to the five largest Tissue--Europe customers accounted for
approximately 23% of its sales; sales to the five largest Dixie customers
accounted for approximately 45% of its sales; and sales to the five largest
Communications Papers and Fiber customers accounted for approximately 36% of
its sales. There were no individual customers, however, to which sales
exceeded 10% of Fort James' consolidated net sales. Though the loss of a
single customer may be significant to an individual segment, the Company
believes that such loss would not have a long-term material adverse effect on
its consolidated financial condition.

Order Backlog

In the Tissue-North America, Tissue-Europe and Dixie businesses, the Company
maintains product inventories to meet delivery requirements of its customers;
therefore, the backlog of customer orders for these segments is not
significant. In the Communications Papers business, the Company's backlogs
were generally 4 to 17 days as of December 26, 1999 and 5 to 25 days as of
December 27, 1998. The order backlog does not vary substantially on a seasonal
basis.

Competition

Fort James competes in both North America and Europe, with a number of large
diversified paper and consumer product companies, such as The Procter & Gamble
Company, Kimberly-Clark Corporation and Georgia-Pacific Corporation and large
European companies such as Svenska Cellulosa Aktiebolaget (SCA). In addition,
the Company also competes with small regional producers. The Company competes
on the basis of price, product quality and performance, product development
effectiveness, service, and sales and distribution support. Aggressive
competitive pricing actions and new product introductions, which may become
more intense due to changing industry conditions, could reduce revenues and
adversely affect the Company's operating results or financial condition.
Increased marketing expenditures by manufacturers of competing branded
products could prompt the Company to increase its advertising or promotional
expenditures for key branded products. Markets for consumer products are
generally regional or national, with limited imports and exports, due to the
high bulk and low density of these products, as well as brand recognition
factors. Markets for communications papers, however, can be affected by
increased imports from Europe, Asia and Latin America.

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Research and Development

Fort James' major research and development facilities are located in Neenah,
Wisconsin and Kunheim, France and its engineering centers are located in Green
Bay, Wisconsin; Lehigh Valley, Pennsylvania; and Kunheim, France. The primary
efforts at these facilities are to improve existing products, develop new
processes and products, improve product quality and process control, manage
major capital projects, and provide technical assistance in adhering to
regulatory standards. In addition, emphasis is placed upon achieving the
Company's cost reduction initiatives for major products through the
application of proprietary deinking, papermaking and converting technologies.

Financial information on the Company's research and development expenditures
is presented in Note 1 of Notes to Consolidated Financial Statements in the
1999 Annual Report, which information is incorporated herein by reference.

Environmental Matters

Like its competitors, Fort James is subject to extensive regulation by
various federal, state, provincial, and local agencies concerning compliance
with environmental control statutes and regulations. These regulations impose
limitations, including effluent and emission limitations, on the discharge of
materials into the environment, as well as require the Company to obtain and
operate in compliance with the conditions of permits and other governmental
authorizations. Future regulations could materially increase the Company's
capital requirements and certain operating expenses in future years.

Fort James has made and will continue to make substantial capital
investments and operating expenditures, as well as production adjustments, to
comply with increasingly stringent standards for air, water, and solid and
hazardous waste regulations. During 1999, capital expenditures totaling
approximately $32 million were made by Fort James for pollution control
facilities and equipment. Capital expenditures for such purposes on existing
facilities are estimated to approximate $45 million for 2000 (including
expenditures to comply with the "Cluster Rules"). Estimates of costs for
future environmental compliance are necessarily imprecise due to, among other
things, the continuing emergence of new environmental laws and regulations and
environmental control or process technology developments. While the Company
believes that its environmental control costs are likely to increase as
environmental regulations become broader and more stringent, Fort James is
unable to predict the amount or timing of such increases. Such future
regulations could materially increase the Company's capital requirements in
future years.

In 1998, the U.S. Environmental Protection Agency ("EPA") regulations
affecting pulp and paper industry discharges of wastewater and gaseous
emissions, commonly referred to as the "cluster rules", became effective.
These rules require changes in the pulping and bleaching processes presently
used in some U.S. pulp mills, including several of Fort James' mills. The
majority of the investment required to comply with these regulations is due by
2001, with the possibility of a one-year extension for parts of the program.
In fiscal 2000 and 2001, the Company expects to invest approximately $40
million as part of its compliance program.

Fort James, along with others, has been identified as a potentially
responsible party ("PRP") at EPA designated Superfund sites and is involved in
other remedial investigations and actions under federal and state laws. These
sites include the Lower Fox River in Wisconsin, where the Company and six
other companies have been identified as PRPs for contamination of the river by
hazardous substances. Various state and federal agencies and tribal entities
are seeking sediment restoration and natural resources damages. In February
1999, the Wisconsin Department of Natural Resources released for public
comment a draft remedial investigation/feasibility study of the Fox River.
While the draft study did not advocate any specific restoration alternatives,
it included estimated total costs ranging from zero for "no action' to
approximately $720 million, depending on the alternative or combination of
alternatives selected. The final restoration alternative and the Company's
share of the related costs are unknown at this time. The Company, along with
other PRPs, is also participating in the funding of a remedial
investigation/feasibility study of contamination of the Kalamazoo River
located in Michigan. Management does not anticipate selection of a remedy
prior to 2002.

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It is the Company's policy to accrue remediation costs on an undiscounted
basis when it is probable that such costs will be incurred and when a range of
loss can be reasonably estimated. Fort James' accrued environmental
liabilities, including remediation and landfill closure costs, totaled $65.6
million as of December 26, 1999 and $54.1 million as of December 27, 1998. The
Company periodically reviews the status of all significant existing or
potential environmental issues and adjusts its accruals as necessary. The
accruals do not reflect any possible future insurance recoveries. Estimates of
costs for future remediation are necessarily imprecise due to, among other
things, the identification of presently unknown remediation sites and the
allocation of costs among PRPs. The Company believes that its share of the
costs of cleanup for its current remediation sites will not have a material
adverse effect on its consolidated financial position but could have a
material effect on consolidated results of operations in a given year. As is
the case with most manufacturing and many other entities, there can be no
assurance that the Company will not be named as a PRP at additional sites in
the future or that the costs associated with such additional sites would not
be material.

Further information pertaining to hazardous substance cleanup, accrued
environmental liabilities and other environmental matters affecting the
Company is set forth in "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Environmental Matters" and Note 13 of
Notes to Consolidated Financial Statements in the 1999 Annual Report, which
information is incorporated herein by reference.

Year 2000 Date Conversion

The Year 2000 (Y2K) issue was the result of computer programs using two
digits rather than four to define the applicable year. The Company's Y2K
remediation efforts were completed in the fourth quarter of 1999. As a result
of these efforts, the Company experienced no significant Y2K related problems.
Fort James spent approximately $26 million in 1999, $35 million in 1998 and $8
million in 1997 on the Y2K project.

Personnel

At December 26, 1999, the Company employed approximately 24,800 people.
Contracts covering approximately 2,500 domestic and Canadian employees are
scheduled for renegotiation in 2000. Such contracts include approximately 800
employees at one facility who are working under the terms of a contract that
expired in 1999. The Company and its unions generally have good working
relationships and management believes its labor agreements contain wage and
fringe benefit programs that are competitive within the applicable industry
segment and geographic region. Although the Company believes that it has
satisfactory relations with its employees, there can be no assurance that the
Company will not have labor disputes in the future.

(d) Financial Information About Foreign and Domestic Operations and Export
Sales

Financial information regarding the Company's domestic and foreign
operations is included in Note 14 of Notes to Consolidated Financial
Statements in the 1999 Annual Report, which information is incorporated herein
by reference. International operations are generally characterized by the same
conditions discussed in the narrative description of business and may also be
affected by additional elements including changing currency values and
different rates of inflation and economic growth. The effects of these
additional elements are more significant in the Tissue-Europe business, which
includes substantially all of the Company's international business.

10-K405 11th Page of 21 TOC 1st Previous Next ↓Bottom Just 11th
ITEM 2. PROPERTIES

The pulp and papermaking facilities of Fort James, the number of paper or
paperboard machines, and the principal types of products produced at each
facility are as follows:

[Download Table]

Paper
Facility Locations (A) Pulping Machines
---------------------- ------- --------

Tissue--North America:
Pennington, Alabama (C)..................... Kraft 7
Rincon, Georgia............................. Deinked 5
Old Town, Maine............................. Kraft 2
Muskogee, Oklahoma.......................... Deinked 5
Halsey, Oregon.............................. Deinked 2
Clatskanie, Oregon (Wauna).................. Kraft 3
Camas, Washington........................... Kraft 6
Green Bay, Wisconsin (East)................. Deinked 6
Green Bay, Wisconsin (West)................. Deinked 11
Total capacity (in millions of tons)......................... 2.1 Tissue
.3 Bleached
paperboard
Tissue--Europe:
Nokia, Finland.............................. Deinked 3
Gien, France................................ 3
Hondouville, France......................... Deinked 2
Kunheim, France............................. 2
Patras, Greece.............................. 1
Castelnuovo, Italy.......................... 1
Avigliano, Italy............................ 1
Cuijk, Netherlands.......................... Deinked 2
Allo, Spain................................. 2
Karamursel, Turkey (B)...................... 2
Stubbins, U.K............................... Deinked 3
Bridgend, U.K............................... Deinked 3
Oughtibridge, U.K........................... Deinked 2
Total capacity (in millions of tons)......................... .9 Tissue
Communications Papers:
Clatskanie, Oregon (Wauna) (D).............. Kraft 1
Camas, Washington (D)....................... Kraft 6
Total capacity (in millions of tons)......................... .5 Uncoated
freesheets

--------
(A) The locations listed for Fort James' consolidated subsidiaries are held
in fee by the Company.
(B) Unconsolidated subsidiary.
(C) Includes bleached paperboard products
(D) Includes uncoated freesheet products

The Company believes that its production facilities are suitable for their
purposes and are adequate to support their businesses. The extent of
utilization of individual facilities varies. During 1999, Fort James' paper
and paperboard mills generally had production levels of more than 90% of
capacity.

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Fort James also operates converting plants that perform a variety of
converting operations. These converting plants (excluding converting
operations performed at pulp and papermaking facilities listed above) are
summarized as follows:

[Download Table]

Number of Converting Plants
----------------------------
Principal Products Domestic International Total
------------------ -------- ------------- -----

Tissue and other converting........................ 1 12 13
Dixie Products..................................... 8 4 12
--- --- ---
Total.............................................. 9 16 25
=== === ===

Fort James' manufacturing and converting facilities are complemented by an
integrated network of sales offices and distribution terminals. The Company
also operates a warehouse and terminal service that provides freight
interchange and other services in the Pacific Northwest.

ITEM 3. LEGAL PROCEEDINGS

Other than the information set forth in Note 13 of Notes to Consolidated
Financial Statements in the Company's 1999 Annual Report, which information is
incorporated herein by reference, the Company is not involved in any
litigation the outcome of which management believes would have a material
adverse effect on the Company's results of operations, financial condition or
competitive position.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders during the last
quarter of 1999.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Company's common stock is listed on the New York Stock Exchange.
Information with respect to quarterly high and low sales prices for Fort
James' common stock, quarterly dividends and other quarterly information
related to common shares is contained in Note 16 of Notes to Consolidated
Financial Statements in the 1999 Annual Report, which information is
incorporated herein by reference. The payment of dividends and the amounts
thereof will be dependent upon Fort James' earnings, financial position, cash
requirements and other relevant factors. Common shares of the Company reserved
for issuance are described in Note 11 of Notes to Consolidated Financial
Statements in the 1999 Annual Report, which information is incorporated herein
by reference. In addition, covenants of certain of the Company's senior note
agreements impose restrictions on the amount of net worth which, in turn, may
limit the funds available for the payment of dividends; these covenants are
discussed in Note 9 of Notes to Consolidated Financial Statements in the 1999
Annual Report, which information is incorporated herein by reference. On
February 28, 2000, there were approximately 10,000 shareholders of record of
the Company's common stock.

ITEM 6. SELECTED FINANCIAL DATA

See Selected Financial Data on page 57 of the 1999 Annual Report, which
information for fiscal years 1995 through 1999 is incorporated herein by
reference. The Merger of James River with and into Fort Howard was accounted
for as a pooling-of-interests; accordingly, the Company's consolidated
financial data has been restated for all periods prior to the business
combination to include the combined results of James River and Fort Howard.
For all other acquisitions, the data presented for each period reflects
operations acquired from the respective acquisition dates. Acquisitions,
dispositions and other transactions from 1997 through 1999 are described in
Note 2 of Notes to Consolidated Financial Statements in the 1999 Annual
Report, which information is incorporated herein by reference.

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

See "Management's Discussion and Analysis of Financial Condition and Results
of Operations" on pages 25 through 33 of the 1999 Annual Report, which
information is incorporated herein by reference.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

See "Management's Discussion and Analysis of Financial Condition and Results
of Operations--Financing Activities" on pages 30 and 31 of the 1999 Annual
Report, which information is incorporated herein by reference.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See the consolidated financial statements and selected quarterly financial
information, under the headings "Consolidated Statements of Operations",
"Consolidated Balance Sheets", "Consolidated Statements of Cash Flows",
"Consolidated Statements of Shareholders' Equity" and "Notes to Consolidated
Financial Statements" on pages 34 through 55 of the 1999 Annual Report, which
information is incorporated herein by reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

There have been no changes in or disagreements with accountants on
accounting and financial disclosures prior to the date of the most recent
financial statements included herein.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

For information with respect to the Company's Directors, see "Information on
Nominees" on pages 2 and 3 and "Section 16(a) Beneficial Ownership Reporting
Compliance" on page 16 of the Company's Proxy Statement for the Annual Meeting
of Shareholders to be held on April 27, 2000 (the "2000 Proxy Statement"),
which information is incorporated herein by reference.

The following table reflects the name, age, length of service as an officer
of Fort James, and current position for each of the current executive officers
of the Company. Previous positions and areas of responsibility over the past
five years are included in "Executive Officers" on pages 59 and 60 of the 1999
Annual Report, which information is incorporated herein by reference. Each
officer is elected by the Board of Directors to serve a one-year term. There
is no family relationship between any of these officers or between any such
officer and any director of the Company; nor is there any arrangement or
understanding between any officer and any other person pursuant to which the
officer was selected.

[Enlarge/Download Table]

Calendar
Year First
Elected as
Name Age an Officer Current Position
---- --- ---------- ----------------

Miles L. Marsh.......... 52 1995 Chairman of the Board of Directors, Chief Executive Officer
Clifford A. Cutchins,
IV..................... 51 1990 Senior Vice President, General Counsel, Corporate Secretary
Francis J. Florido...... 51 1998 President, North American Consumer Products
Daniel J. Girvan........ 51 1993 Senior Vice President, Human Resources and Administration
Alan R. Guibord......... 53 1998 Vice President and Chief Information Officer
Ernst A. Hberli......... 51 1996 President, North American Tissue Operations and Technology
George F. Hartmann, Jr.. 57 1998 Senior Vice President--North American Commercial Business
Gary Kurlancheek........ 46 1998 Vice President, Marketing

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[Enlarge/Download Table]

Calendar
Year First
Elected as
Name Age an Officer Current Position
---- --- ---------- ----------------

R. Michael Lempke....... 47 1997 Senior Vice President and Treasurer
John F. Lundgren........ 48 1995 President, European Consumer Products
Daniel J. McCarty....... 48 1998 President, North American Commercial Business
Joseph W. McGarr........ 48 1996 Executive Vice President and Chief Financial Officer
Andrei A. Mikhalevsky... 45 1998 Senior Vice President, Sales
Joe R. Neil............. 61 1996 President, Communications Papers
William Schultz......... 38 1998 Executive Vice President, Dixie

ITEM 11. EXECUTIVE COMPENSATION

See "Compensation of Directors" on page 5, "Executive Compensation" on pages
7 through 14, and "Performance Graph" on page 15, of the Company's 2000 Proxy
Statement, which information is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

See "Stock Ownership of Directors and Executive Officers" and "Principal
Shareholders" on pages 6 and 7, respectively, of the Company's 2000 Proxy
Statement, which information is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

See "Information on Nominees" on pages 2 and 3 of the Company's 2000 Proxy
Statement, which information is incorporated herein by reference.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) Documents Filed as Part of This Report:

1) Financial Statements:

The Consolidated Financial Statements of Fort James Corporation, the Notes
to Consolidated Financial Statements, and the Report of Independent
Accountants listed below are incorporated herein by reference from pages 34
through 56 of the Company's 1999 Annual Report. With the exception of the
aforementioned information and the information incorporated by reference in
numbered Items 1, 3, 5, 6, 7, 7a, 8, and 10, no other data appearing in the
1999 Annual Report is deemed to be "filed" as part of this Form 10-K Annual
Report.

"Consolidated Statements of Operations" for each of the three fiscal years
in the period ended December 26, 1999 (see page 34 of the 1999 Annual
Report)

"Consolidated Balance Sheets" as of December 26, 1999 and December 27, 1998
(see page 35 of the 1999 Annual Report)

"Consolidated Statements of Cash Flows" for each of the three fiscal years
in the period ended December 26, 1999 (see page 36 of the 1999 Annual
Report)

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"Consolidated Statements of Shareholders' Equity" for each of the three
fiscal years in the period ended December 26, 1999 (see page 37 of the 1999
Annual Report)

"Notes to Consolidated Financial Statements" (see pages 38 through 55 of
the 1999 Annual Report)

"Report of Independent Accountants" with respect to the financial
statements listed above (see page 56 of the 1999 Annual Report)

2) Financial Statement Schedules:

Report of Independent Accountants on Financial Statement Schedule

The following information is filed as part of this Form 10-K and should be
read in conjunction with the financial statements contained in the 1999
Annual Report to Shareholders.

[Download Table]

Schedule II Valuation and Qualifying Accounts

All other schedules have been omitted because they were not applicable or
because the required information has been included in the financial
statements or notes thereto.

3) Exhibits:

Each Exhibit is listed according to the number assigned to it in the
Exhibit Table of Item 601 of Regulation S-K. The Exhibits identified with
an asterisk (*) are management contracts or compensatory plans available to
certain key employees or directors.

[Download Table]

Exhibit
Number Description Section
------- ----------- -------

2(a) Asset Purchase Agreement Among Fort James Corporation, ACX
Technologies, Inc. and Graphic Packaging Corporation, dated
April 25, 1999 (schedules omitted). Schedules relating to
assets and liabilities to be transferred financial
statements of the Packaging business; and significant
contracts, leases, and employee benefit and labor
agreements have been omitted, but will be furnished
supplementary to the Securities and Exchange Commission
upon request (incorporated by reference to Exhibit 2 to the
Company's Quarterly Report on Form 10-Q for the quarter
ended June 27, 1999).
3(a) Amended and Restated Articles of Incorporation as of August
25, 1999 as filed herein. E-1
3(b) Amended and Restated Bylaws of Fort James Corporation as of
April 23, 1998 (incorporated by reference to Exhibit 3(a)
to the Company's Quarterly Report on Form 10-Q for the
quarter ended March 29, 1998).
4(a) Rights Agreement dated February 26, 1999, between Fort
James Corporation and Norwest Bank of Minnesota, N.A., as
Rights Agent (incorporated by reference to Exhibit 4 to the
Company's Form 8A-12B dated February 26, 1999).
4(b) Fort James Corporation $2,500,000,000 Credit Agreement
dated as of August 13, 1997, amended and restated as of
October 31, 1997 (incorporated by reference to Exhibit
10(g) to the Company's Quarterly Report on Form 10-Q for
the quarter ended September 28, 1997).
4(c) In reliance upon Item 601(b)(4)(iii)(A) of Regulation S-K,
various other instruments defining the rights of holders of
long-term debt of the Registrant and its subsidiaries are
not being filed because the total amount of securities
authorized and outstanding under each such instrument does
not exceed 10% of the total assets of the Registrant and
its subsidiaries on a consolidated basis. The Registrant
hereby agrees to furnish a copy of any such instrument to
the Commission upon request.

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[Download Table]

Exhibit
Number Description Section
------- ----------- -------

10(a)* James River Corporation of Virginia Deferred Compensation
Plan for Outside Directors, amended and restated effective
as of July 1, 1989 (incorporated by reference to Exhibit
10(c) to the Company's Annual Report on Form 10-K for the
year ended April 30, 1989).
10(b)* Fort James Corporation Stock Option Plan for Outside
Directors, amended and restated February 18, 1999,
(incorporated by reference to Exhibit 10(b) of the
Company's Annual Report on Form 10-K for the year ended
December 27, 1998.
10(c)* James River Corporation of Virginia Director Stock
Ownership Plan, effective April 25, 1996 (incorporated by
reference to Exhibit B to the Company's Proxy Statement
dated March 13, 1996).
10(d)* James River Corporation of Virginia 1987 Stock Option Plan,
1993 Amendment and Restatement, effective as of December
16, 1993 (incorporated by reference to Exhibit 10(j) to the
Company's Annual Report on Form 10-K for the year ended
December 26, 1993).
10(e)* James River Corporation of Virginia 1996 Stock Incentive
Plan, effective April 25, 1996 (incorporated by reference
to Exhibit 99.1 to the Company's Registration Statement on
Form S-8 (No. 333-02217) filed April 3, 1996).
10(f)* Amendment to Fort James Corporation 1996 Stock Incentive
Plan, dated as of August 12, 1997 (incorporated by
reference to Exhibit 99.2 to the Company's Registration
Statement on Form S-8 (No. 333-35013) filed September 5,
1997).
10(g)* James River Corporation of Virginia Supplemental Deferral
Plan, 1993 Amendment and Restatement, effective as of
January 1, 1994 (incorporated by reference to Exhibit 10(m)
to the Company's Annual Report on Form 10-K for the year
ended December 26, 1993).
10(h)* James River Corporation of Virginia Management Incentive
Plan, effective as of January 25, 1996 (incorporated by
reference to Exhibit 10(l) to the Company's Annual Report
on Form 10-K for the year ended December 31, 1995).
10(i)* Fort James Corporation MIP Bonus Deferral Plan effective as
of September 1, 1998 (incorporated by reference to Exhibit
99.1 to the Company's filing of Form S-8 dated November 8,
1998).
10(j)* James River Corporation of Virginia Supplemental Benefit
Plan, amended and restated effective June 1, 1991
(incorporated by reference to Exhibit 10(m) to the
Company's Annual Report on Form 10-K for the year ended
December 29, 1991).
10(k)* 1994 Amendment to the James River Corporation of Virginia
Supplemental Benefit Plan, dated March 1, 1994
(incorporated by reference to Exhibit 10(q) to the
Company's Annual Report on Form 10-K for the year ended
December 25, 1994).
10(l)* Fort James Corporation Supplemental Retirement Plan for
Miles L. Marsh, (incorporated by reference to Exhibit 10 to
the Company's Quarterly Report on Form 10-Q for the quarter
ended June 28, 1998).
10(m)* Form of Employment Agreement between the Fort James
Corporation and executive officers of the Company
(incorporated by reference to Exhibit 10.6 to the Company's
filing of Form S-4 dated June 26, 1997).
10(n)* Separation Agreement and Mutual Release between Fort James
Corporation and William A. Paterson (incorporated by
reference to Exhibit 10(A) to the Company's Quarterly
Report on Form 10-Q for the quarter ended September 26,
1999).
10(o)* Separation Agreement and Mutual Release between Fort James E-2
Corporation and B. Gregory Stroh, filed herewith.

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[Download Table]

Exhibit
Number Description Section
------- ----------- -------

10(p)* Form of Employment Agreement between Fort James Corporation E-3
and executive officers of the Company, filed herewith.
10(q)* Employment Agreement between Fort James Corporation and E-4
Miles L. Marsh, filed herewith.
12 Computation of Ratio of Earnings to Fixed Charges, filed E-5
herewith.
13 Certain sections of the Fort James Corporation Annual E-6
Report to Shareholders for the year ended December 26,
1999, filed herewith.
21 Subsidiaries of the Company as of December 26, 1999, filed E-7
herewith.
23 Consent of Independent Accountants, filed herewith. E-8
27 Financial Data Schedules for the year ended December 26, E-9
1999 (filed electronically only).
99 Unaudited pro forma condensed consolidated balance sheet as
of June 27, 1999 and the pro forma consolidated statements
of operations for the six months ended June 27, 1999 and
the year ended December 27, 1998 to give pro forma effect
to the sale of the Packaging business (incorporated by
reference to Exhibit 99 to the Company's Quarterly Report
on Form 10-Q for the quarter ended June 27, 1999).

(b) Reports on Form 8-K:

The Company filed no Current Reports on Form 8-K during the last quarter of
1999 and subsequent thereto.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

[Download Table]

Date Signature and Title
---- -------------------

/s/ Fort James Corporation
____________________________________
Registrant

March 25, 2000 /s/ Joseph W. McGarr
____________________________________
Joseph W. McGarr
Executive Vice President and Chief
Financial Officer
(Principal Financial Officer)

March 25, 2000 /s/ Catherine M. Freeman
____________________________________
Catherine M. Freeman
Vice President and Corporate
Controller
(Principal Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

[Download Table]

Date Signature and Title
---- -------------------

March 25, 2000 /s/ Miles L. Marsh
____________________________________
Miles L. Marsh
Chairman and
Chief Executive Officer

March 25, 2000 /s/ Joseph W. McGarr
____________________________________
Joseph W. McGarr
Executive Vice President and Chief
Financial Officer
(Principal Financial Officer)

March 25, 2000 /s/ Catherine M. Freeman
____________________________________
Catherine M. Freeman
Vice President and Corporate
Controller
(Principal Accounting Officer)

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Pursuant to General Instruction D to Form 10-K, this report has been signed
below by a majority of the Board of Directors:

[Download Table]

Signature Date
--------- ----

___________________________________________
Barbara L. Bowles

/s/ William E. Bradford March 25, 2000
___________________________________________
William E. Bradford

/s/ William T. Burgin March 25, 2000
___________________________________________
William T. Burgin

/s/ Dr. James L. Burke March 25, 2000
___________________________________________
Dr. James L. Burke

/s/ Worley H. Clark, Jr. March 25, 2000
___________________________________________
Worley H. Clark, Jr.

/s/ Gary P. Coughlan March 25, 2000
___________________________________________
Gary P. Coughlan

/s/ William V. Daniel March 25, 2000
___________________________________________
William V. Daniel

/s/ Ernst A. Haberli March 25, 2000
___________________________________________
Ernst A. Haberli

/s/ Miles L. Marsh March 25, 2000
___________________________________________
Miles L. Marsh

/s/ Robert M. O'Neil March 25, 2000
___________________________________________
Robert M. O'Neil

/s/ Richard L. Sharp March 25, 2000
___________________________________________
Richard L. Sharp

/s/ Anne Marie Whittemore March 25, 2000
___________________________________________
Anne Marie Whittemore

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Report of Independent Accountants on Financial Statement Schedule

To the Board of Directors and Shareholders of Fort James Corporation

Our audits of the consolidated financial statements referred to in our
report dated January 26, 2000 appearing in the 1999 Annual Report to
Shareholders of Fort James Corporation (which report and consolidated
financial statements are incorporated by reference in this Annual Report on
Form 10-K) also included an audit of the financial statement schedule listed
in Item 14(a)(2) of this Form 10-K. In our opinion, the financial statement
schedule presents fairly, in all material respects, the information set forth
therein when read in conjunction with the related consolidated financial
statements.

/s/ PRICEWATERHOUSECOOPERS LLP

Chicago, Illinois
January 26, 2000

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Schedule II

FORT JAMES CORPORATION and SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 26, 1999, DECEMBER 27, 1998, AND DECEMBER 28, 1997
(in millions)

[Download Table]

Balance at Charged to Charged to Balance at
Beginning of Costs and Other Cash End of
Description Period Expenses Accounts (a) Payments Period
----------- ------------ ---------- ------------ -------- ----------

December 26, 1999:
Restructure accrual... $ 71.9 $(10.4) $(44.4) $(17.1) $ --
December 27, 1998:
Restructure accrual... 263.2 (37.3) (69.0) (85.0) 71.9
December 28, 1997:
Restructure accrual... -- 263.2 -- -- 263.2

--------
(a) Reclassifications to more appropriately reflect the carrying amounts of
assets and liabilities in the balance sheet

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Dates Referenced Herein and Documents Incorporated by Reference

		Referenced-On Page
This ‘10-K405’ Filing	Date	First	Last	Other Filings

	4/27/00	1	13	DEF 14A
Filed on:	3/27/00
	3/25/00	18	19
	2/28/00	12
	2/27/00	1
	1/31/00	3		5
	1/26/00	20
	1/15/00	4
For Period End:	12/26/99	1	21	5
	9/26/99	16		10-Q
	8/25/99	15
	6/27/99	15	17	10-Q
	4/25/99	15
	2/26/99	15		8-A12B
	2/18/99	16
	12/27/98	8	21	10-K, 5
	11/8/98	16
	9/1/98	16
	6/28/98	16		10-Q
	4/23/98	15		DEF 14A
	3/29/98	15		10-Q
	12/28/97	21		10-K, 5, 8-K
	10/31/97	15
	9/28/97	15		10-Q
	9/5/97	16		S-8
	8/13/97	15		3, 4, 8-K
	8/12/97	16		8-K, S-8
	6/26/97	16
	4/25/96	16		DEF 14A
	4/3/96	16		S-8
	3/13/96	16
	1/25/96	16
	12/31/95	16		10-K, 11-K
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Filing Submission 0000950131-00-002041 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

Fort James Corp – ‘10-K405’ for 12/26/99

On: Monday, 3/27/00 · For: 12/26/99 · Accession #: 950131-0-2041 · File #: 1-07911

Annual Report — [x] Reg. S-K Item 405 — Form 10-KFiling Table of Contents

10-K405 — Form 10-KDocument Table of Contents

Dates Referenced Herein and Documents Incorporated by Reference

Annual Report — [x] Reg. S-K Item 405 — Form 10-K
Filing Table of Contents

10-K405 — Form 10-K
Document Table of Contents