Exult Signs $600 Million HR Outsourcing Agreement with International Paper

Business Wire, Oct 18, 2001

Business Editors

IRVINE, Calif.--(BUSINESS WIRE)--Oct. 18, 2001

Exult, Inc. (NASDAQ:EXLT), the leading provider of integrated services designed to manage human resources functions for large, multinational corporations, today announced that it has signed a ten-year HR process management contract with International Paper (NYSE:IP).

Exult will apply its business process expertise to refine the transactional and administrative systems used in delivering HR services to approximately 70,000 International Paper U.S. employees covered under the scope of the contract. Exult's Service Delivery Model(SM) is designed to streamline HR processes, reduce costs and improve service to employees through self-service and increased efficiencies.

Under the terms of the agreement, Exult will assume responsibility for managing key core administrative HR services for International Paper, including payroll, benefits administration, service delivery (human resources call center management), HR information services and systems support. Exult will also assume responsibility for various third-party providers related to these processes. The transaction is expected to generate revenues to Exult of approximately $600 million over the life of the contract.

The agreement will result in significant annual cost savings to International Paper for the administrative functions to be directly managed by Exult.

"This agreement supports International Paper's focus on finding innovative ways to introduce business efficiencies, thus allowing us to better focus on strategic HR business issues," said Jerry Carter, senior vice president, Human Resources for International Paper. "IP has made a significant investment in building and successfully transforming our HR service delivery platform. Partnering with Exult allows us to continue improving the HR services available to our employees, while providing flexibility required in today's dynamic business environment."

"We are very pleased to provide International Paper with a comprehensive HR process management solution that can extend its excellence in the provision of HR services, while supporting the company's strategic business objectives," said Exult's chairman and CEO, Jim Madden. "We look forward to working with International Paper to develop an expansive, mutually beneficial business partnership."

"Exult has established itself as a focused HR BPO provider, and in the past two years has validated its model by signing several contracts with global corporations," said Allie Young, chief analyst Gartner Dataquest IT Services.

"International Paper, in this major move into business process outsourcing, has made a strategic business decision to outsource administrative HR, payroll, and employee call center functions to Exult. Gartner Dataquest sees a growing trend among the largest global corporations to outsource their critical, but non-core business processes to accomplish broad business objectives," said Young.

In connection with the on-site contract, Exult will operate International Paper's HR service center facility in Memphis, Tennessee and will extend employment offers to all of the more than 200 affected HR and IT professionals from International Paper. Exult expects to leverage the acquired assets and personnel across additional clients while continuing to serve International Paper.

In particular, International Paper's strong expertise in SAP is expected to significantly strengthen Exult's overall capabilities relating to that platform. Initial transition is expected to be completed by December 31, 2001, at which time Exult will assume responsibility for managing the various processes included in the scope of the contract.

Exult CEO Jim Madden and CFO Mike Henn will host a conference call today at 3:00 p.m. EDT (12:00 p.m. PDT) to discuss the contract with International Paper. This call will be broadcast live over the Internet and can be accessed by interested parties at www.vcall.com. To listen to the live call, please go to the Website at least 15 minutes prior to the start of the call to register, download and install any necessary audio software. A replay of the call will be available on the Vcall site for 90 days.

About International Paper: International Paper (http://www.internationalpaper.com) is the world's largest paper and forest products company. Businesses include paper, packaging, and forest products. As one of the largest private forest landowners in the world, the company manages its forests under the principles of the Sustainable Forestry Initiative (SFISM) program, a system that ensures the perpetual planting, growing and harvesting of trees while protecting wildlife, plants, soil, air and water quality. Headquartered in the United States, at Stamford, Conn., International Paper has operations in nearly 50 countries and exports its products to more than 130 nations.

About Exult: Focused on serving the Global 500, Exult, Inc. is the market leader in HR business process outsourcing. With headquarters in Irvine, California and client service centers in the U.S. and Europe, Exult offers Exult eHR(SM); a comprehensive service designed to manage the entire human resource departments for Global 500 corporations. Exult's strategy is to transform Global 500 HR departments by implementing the Exult Service Delivery Model(SM) and operating scalable process management solutions. Exult uses its HR best practice expertise, shared client service centers, expert HR process consulting capabilities and its myHR(SM) web-enabled applications to help Global 500 corporations enhance human capital productivity, reduce costs, streamline processes, and provide superior HR services to their employees. Visit Exult's web site at www.exult.net.