ý | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the fiscal year ended December 31, 2013 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to |
New York | 13-0872805 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of each class | Name of each exchange on which registered | |
Common Stock, $1 per share par value | New York Stock Exchange |
Large accelerated filer x | Accelerated filer | Non-accelerated filer | Smaller reporting company | |||
(Do not check if a smaller reporting company) |
PART I. | ||
ITEM 1. | ||
ITEM 1A. | ||
ITEM 1B. | ||
ITEM 2. | ||
ITEM 3. | ||
ITEM 4. | ||
PART II. | ||
ITEM 5. | ||
ITEM 6. | ||
ITEM 7. | ||
ITEM 7A. | ||
ITEM 8. | ||
ITEM 9. | ||
ITEM 9A. | ||
ITEM 9B. | ||
PART III. | ||
ITEM 10. | ||
ITEM 11. | ||
ITEM 12. | ||
ITEM 13. | ||
ITEM 14. | ||
PART IV. | ||
ITEM 15. | ||
APPENDIX I | ||
APPENDIX II |
In thousands of short tons | 2013 | 2012 | 2011 | |||
Industrial Packaging | ||||||
North American Corrugated Packaging (2) | 10,393 | 10,523 | 7,424 | |||
North American Containerboard (2) | 3,273 | 3,228 | 2,371 | |||
North American Recycling | 2,379 | 2,349 | 2,435 | |||
North American Saturated Kraft | 176 | 166 | 161 | |||
North American Gypsum/Release Kraft (2) | 157 | 135 | — | |||
North American Bleached Kraft | 132 | 114 | 95 | |||
EMEA Industrial Packaging (3) | 1,342 | 1,032 | 1,047 | |||
Asian Box | 416 | 410 | 444 | |||
Brazilian Packaging (4) | 297 | — | — | |||
Industrial Packaging | 18,565 | 17,957 | 13,977 | |||
Printing Papers | ||||||
U.S. Uncoated Papers | 2,508 | 2,617 | 2,616 | |||
European and Russian Uncoated Papers | 1,413 | 1,286 | 1,218 | |||
Brazilian Uncoated Papers | 1,150 | 1,165 | 1,141 | |||
Indian Uncoated Papers | 232 | 246 | 49 | |||
Uncoated Papers | 5,303 | 5,314 | 5,024 | |||
Market Pulp (5) | 1,711 | 1,593 | 1,410 | |||
Consumer Packaging | ||||||
North American Consumer Packaging | 1,556 | 1,507 | 1,560 | |||
European and Russian Coated Paperboard | 355 | 372 | 332 | |||
Asian Coated Paperboard | 1,430 | 1,059 | 998 | |||
Consumer Packaging | 3,341 | 2,938 | 2,890 |
(1) | Includes third-party and inter-segment sales and excludes sales of equity investees. |
(2) | Includes Temple-Inland volumes from date of acquisition in February 2012. |
(3) | Includes Turkish box plants beginning in Q1 2013 when a majority ownership was acquired. |
(4) | Includes Brazil Packaging from date of acquisition in mid- January 2013. |
(5) | Includes internal sales to mills. |
• | it may limit our ability to obtain additional debt or equity financing for working capital, capital expenditures, product development, dividends, share repurchases, debt service requirements, acquisitions and general corporate or other purposes; |
• | a portion of our cash flows from operations will be dedicated to payments on indebtedness and will not be available for other purposes, including operations, capital expenditures and future business opportunities; |
• | the debt service requirements of our indebtedness could make it more difficult for us to satisfy other obligations; |
• | our indebtedness that is subject to variable rates of interest exposes us to increased debt service obligations in the event of increased interest rates; |
• | it may limit our ability to adjust to changing market conditions and place us at a competitive disadvantage compared to our competitors that have less debt; and |
• | it may increase our vulnerability to a downturn in general economic conditions or in our business, and may make us unable to carry out capital spending that is important to our growth. |
• | fires, floods, earthquakes, hurricanes or other catastrophes; |
• | the effect of a drought or reduced rainfall on its water supply; |
• | the effect of other severe weather conditions on equipment and facilities; |
• | terrorism or threats of terrorism; |
• | domestic and international laws and regulations applicable to our Company and our business partners, including joint venture partners, around the world; |
• | unscheduled maintenance outages; |
• | prolonged power failures; |
• | an equipment failure; |
• | a chemical spill or release; |
• | explosion of a boiler; |
• | damage or disruptions caused by third parties operating on or adjacent to one of our manufacturing facilities; |
• | disruptions in the transportation infrastructure, including roads, bridges, railroad tracks and tunnels; |
• | labor difficulties; and |
• | other operational problems. |
Period | Total Number of Shares Purchased (a) | Average Price Paid per Share | Total Number of Shares (or Units) Purchased as Part of Publicly Announced Programs | Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs (in billions) | |||||
October 1, 2013 - October 31, 2013 | 2,718,467 | $44.54 | 2,717,984 | $1.36 | |||||
November 1, 2013 - November 30, 2013 | 4,855,900 | 44.67 | 4,855,900 | 1.14 | |||||
December 1, 2013 - December 31, 2013 | 2,230,207 | 46.93 | 2,228,534 | 1.04 | |||||
Total | 9,804,574 |
(a) | 2,156 shares were acquired from employees from share withholdings to pay income taxes under the Company’s restricted stock programs. The remainder were purchased under the Company's $1.5 Billion Share Repurchase Program announced on September 10, 2013. |
Dollar amounts in millions, except per share amounts and stock prices | 2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||
RESULTS OF OPERATIONS | ||||||||||||||||||||
Net sales | $ | 29,080 | $ | 27,833 | $ | 26,034 | $ | 25,179 | $ | 23,366 | ||||||||||
Costs and expenses, excluding interest | 27,619 | 26,137 | 24,035 | 23,749 | 21,498 | |||||||||||||||
Earnings (loss) from continuing operations before income taxes and equity earnings | 849 | (b) | 1,024 | (e) | 1,458 | (h) | 822 | (k) | 1,199 | (m) | ||||||||||
Equity earnings (loss), net of taxes | (39 | ) | 61 | 140 | 111 | (26 | ) | |||||||||||||
Discontinued operations, net of taxes | 45 | (c) | 45 | (f) | 49 | (i) | — | — | ||||||||||||
Net earnings (loss) | 1,378 | (b-d) | 799 | (e-g) | 1,336 | (h-j) | 712 | (k-l) | 704 | (m-n) | ||||||||||
Noncontrolling interests, net of taxes | (17 | ) | 5 | 14 | 21 | 18 | ||||||||||||||
Net earnings (loss) attributable to International Paper Company | 1,395 | (b-d) | 794 | (e-g) | 1,322 | (h-j) | 691 | (k-l) | 686 | (m-n) | ||||||||||
FINANCIAL POSITION | ||||||||||||||||||||
Working capital | $ | 3,898 | $ | 3,907 | $ | 5,718 | $ | 3,525 | $ | 3,539 | ||||||||||
Plants, properties and equipment, net | 13,672 | 13,949 | 11,817 | 12,002 | 12,688 | |||||||||||||||
Forestlands | 557 | 622 | 660 | 747 | 757 | |||||||||||||||
Total assets | 31,528 | 32,153 | 27,018 | 25,409 | 25,543 | |||||||||||||||
Notes payable and current maturities of long-term debt | 661 | 444 | 719 | 313 | 304 | |||||||||||||||
Long-term debt | 8,827 | 9,696 | 9,189 | 8,358 | 8,729 | |||||||||||||||
Total shareholders’ equity | 8,105 | 6,304 | 6,645 | 6,875 | 6,018 | |||||||||||||||
BASIC EARNINGS PER SHARE ATTRIBUTABLE TO INTERNATIONAL PAPER COMPANY COMMON SHAREHOLDERS | ||||||||||||||||||||
Earnings (loss) from continuing operations | $ | 3.05 | $ | 1.72 | $ | 2.95 | $ | 1.61 | $ | 1.61 | ||||||||||
Discontinued operations | 0.10 | 0.10 | 0.11 | — | — | |||||||||||||||
Net earnings (loss) | 3.15 | 1.82 | 3.06 | 1.61 | 1.61 | |||||||||||||||
DILUTED EARNINGS PER SHARE ATTRIBUTABLE TO INTERNATIONAL PAPER COMPANY COMMON SHAREHOLDERS | ||||||||||||||||||||
Earnings (loss) from continuing operations | $ | 3.01 | $ | 1.70 | $ | 2.92 | $ | 1.59 | $ | 1.61 | ||||||||||
Discontinued operations | 0.10 | 0.10 | 0.11 | — | — | |||||||||||||||
Net earnings (loss) | 3.11 | 1.80 | 3.03 | 1.59 | 1.61 | |||||||||||||||
Cash dividends | 1.2500 | 1.0875 | 0.975 | 0.400 | 0.33 | |||||||||||||||
Total shareholders’ equity | 18.57 | 14.33 | 15.21 | 15.71 | 13.90 | |||||||||||||||
COMMON STOCK PRICES | ||||||||||||||||||||
High | $ | 50.33 | $ | 39.88 | $ | 33.01 | $ | 29.25 | $ | 27.79 | ||||||||||
Low | 39.47 | 27.29 | 21.55 | 19.33 | 3.93 | |||||||||||||||
Year-end | 49.03 | 39.84 | 29.60 | 27.24 | 26.78 | |||||||||||||||
FINANCIAL RATIOS | ||||||||||||||||||||
Current ratio | 1.8 | 1.8 | 2.2 | 1.8 | 1.9 | |||||||||||||||
Total debt to capital ratio | 0.54 | 0.62 | 0.60 | 0.56 | 0.60 | |||||||||||||||
Return on shareholders’ equity | 20.2 | % | (b-d) | 11.6 | % | (e-g) | 17.9 | % | (h-j) | 11.4 | % | (k-l) | 14.1 | % | (m-n) | |||||
Return on capital employed from continuing operations attributable to International Paper Company | 7.2 | % | (b-d) | 4.8 | % | (e-g) | 7.5 | % | (h-j) | 5.3 | % | (k-l) | 5.1 | % | (m-n) | |||||
CAPITAL EXPENDITURES | $ | 1,198 | $ | 1,383 | $ | 1,159 | $775 | $534 | ||||||||||||
NUMBER OF EMPLOYEES | 69,000 | 70,000 | 61,500 | 59,500 | 56,100 |
(a) | All periods presented have been restated to reflect the Temple-Inland Building Products business as discontinued operations, if applicable. |
(b) | Includes restructuring and other charges of $210 million before taxes ($131 million after taxes) including pre-tax charges of $25 million ($16 million after taxes) for early debt extinguishment costs, pre-tax charges of $32 million ($19 million after taxes) for costs associated with the restructuring of the Company's xpedx operations, pre-tax charges of $118 million ($72 million after taxes) for costs associated with the announced shutdown of our Courtland, Alabama mill, a pre-tax gain of $30 million ($19 million after taxes) for insurance reimbursements related to the 2012 Guaranty Bank legal settlement, a pre-tax charge of $45 million ($28 million after taxes) for costs associated with the permanent shutdown of a paper machine at our Augusta, Georgia mill, pre-tax charges of $22 million ($14 million after taxes) for costs associated with the spin-off of our xpedx operations and a net pre-tax gain of $2 million (a loss of $1 million after taxes) for other items. Also included are a pre-tax goodwill impairment charge of $400 million ($366 million after taxes) related to our xpedx business, a pre-tax goodwill and trade name intangible asset impairment of $127 million ($122 million after taxes) related to our India Papers business, pre-tax charges of $9 million ($5 million ) to adjust the value of two Company airplanes to fair value, pre-tax charges of $62 million ($38 million after taxes) for integration costs associated with the acquisition of Temple-Inland, pre-tax charges of $6 |
(c) | Includes the operating results of the Temple-Inland Building Products business through the date of sale in July 2013 and pre-tax charges of $24 million ($19 million after taxes) for expenses associated with the divestiture of the Temple-Inland Building Products business. |
(d) | Includes a tax benefit of $744 million associated with the closings of U.S. federal tax audits, a tax benefit of $31 million for an income tax reserve release and a net tax loss of $1 million for other items. |
(e) | Includes restructuring and other charges of $109 million before taxes ($70 million after taxes) including pre-tax charges of $48 million ($30 million after taxes) for early debt extinguishment costs, pre-tax charges of $44 million ($28 million after taxes) for costs associated with the restructuring of the Company's xpedx operations, and pre-tax charges of $17 million ($12 million after taxes) for costs associated with the restructuring of the Company's Packaging business in EMEA. Also included are a pre-tax charge of $20 million ($12 million after taxes) related to the write-up of the Temple-Inland inventories to fair value, pre-tax charges of $164 million ($108 million after taxes) for integration costs associated with the acquisition of Temple-Inland, a pre-tax charge of $62 million ($38 million after taxes) to adjust the long-lived assets of the Hueneme mill in Oxnard, California to their fair value in anticipation of its divestiture, and pre-tax charges of $29 million ($55 million after taxes) for costs associated with the divestiture of three containerboard mills. |
(f) | Includes pre-tax charges of $15 million ($9 million after taxes) for expenses associated with pursuing the divestiture of the Temple-Inland Building Products business and the operating results of the Temple-Inland Building Products business. |
(g) | Includes a net tax expense of $14 million related to internal restructurings and a $5 million expense to adjust deferred tax assets related to post-retirement prescription drug coverage (Medicare Part D reimbursement). |
(h) | Includes restructuring and other charges of $102 million before taxes ($90 million after taxes) including pre-tax charges of $49 million ($34 million after taxes) for costs associated with the restructuring of the Company’s xpedx operations, pre-tax charges of $32 million ($19 million after taxes) for early debt extinguishment costs, pre-tax charges of $18 million ($12 million after taxes) for costs associated with the acquisition of a majority share of Andhra Pradesh Paper Mills Limited in India, pre-tax charges of $20 million ($12 million after taxes) for costs associated with signing an agreement to acquire Temple-Inland, and a pre-tax gain of $24 million ($15 million after taxes) related to the reversal of environmental and other reserves due to the announced repurposing of a portion of the Franklin mill. Also included are a pre-tax charge of $27 million ($17 million after taxes) for an environmental reserve related to the Company’s property in Cass Lake, Minnesota, a pre-tax charge of $129 million ($104 million after taxes) for a fixed-asset impairment of the North American Shorewood business, pre-tax charges of $78 million (a gain of $143 million after taxes) to reduce the carrying value of the Shorewood business based on the terms of the definitive agreement to sell this business, and a charge of $11 million (before and after taxes) for asset impairment costs associated with the Inverurie, Scotland mill which was closed in 2009. |
(i) | Includes a pre-tax gain of $50 million ($30 million after taxes) for an earnout provision related to the sale of the Company’s Kraft Papers business completed in January 2007. Also, the Company sold its Brazilian Coated Paper business in the third quarter 2006. Local country tax contingency reserves were included in the business’ operating results in 2005 and 2006 for which the related statute of limitations has expired. The reserves were reversed and a tax benefit of $15 million plus associated interest income of $6 million ($4 million after taxes) was recorded. |
(j) | Includes a tax benefit of $222 million related to the reduction of the carrying value of the Shorewood business and the write-off of a deferred tax liability associated with Shorewood, a $24 million tax expense related to internal restructurings, a $9 million tax expense for costs associated with our acquisition of a majority share of Andhra Pradesh Paper Mills Limited in India, a $13 million tax benefit related to the release of a deferred tax asset valuation allowance, and a $2 million tax expense for other items. |
(k) | Includes restructuring and other charges of $394 million before taxes ($242 million after taxes) including pre-tax charges of $315 million ($192 million after taxes) for shutdown costs related to the Franklin, Virginia mill, a pre-tax charge of $35 million ($21 million after taxes) for early debt extinguishment costs, pre-tax charges of $7 million ($4 million after taxes) for closure costs related to the Bellevue, Washington container plant, a pre-tax charge of $11 million ($7 million after taxes) for an Ohio Commercial Activity tax adjustment, a pre-tax charge of $6 million ($4 million after taxes) for severance and benefit costs associated with the Company’s S&A reduction initiative, and a pre-tax charge of $8 million ($5 million after taxes) for costs associated with the reorganization of the Company’s Shorewood operations. Also included are a pre-tax charge of $18 million ($11 million after taxes) for an environmental reserve related to the Company’s property in Cass Lake, Minnesota, and a pre-tax gain of $25 million ($15 million after taxes) related to the partial redemption of the Company’s interests in Arizona Chemical. |
(l) | Includes tax expense of $14 million and $32 million for tax adjustments related to incentive compensation and Medicare Part D deferred tax write-offs, respectively, and a $40 million tax benefit related to cellulosic bio-fuel tax credits. |
(m) | Includes restructuring and other charges of $1.4 billion before taxes ($853 million after taxes), including pre-tax charges of $469 million ($286 million after taxes), $290 million ($177 million after taxes), and $102 million ($62 million after taxes) for shutdown costs for the Albany, Oregon, Franklin, Virginia and Pineville, Louisiana mills, respectively, a pre-tax charge of $82 million ($50 million after taxes) for costs related to the shutdown of a paper machine at the Valliant, Oklahoma mill, a pre-tax charge of $148 million ($92 million after taxes) for severance and benefit costs associated with the Company’s 2008 overhead cost reduction initiative, a pre-tax charge of $185 million ($113 million after taxes) for early debt extinguishment costs, a pre-tax charge of $23 million ($28 million after taxes) for closure costs associated with the Inverurie, Scotland mill, and a charge of $31 million, before and after taxes, for severance and other costs associated with the planned closure of the Etienne mill in France, and a pre-tax charge of $23 million ($14 million after taxes) for other items. Also included are a pre-tax gain of $2.1 billion ($1.4 billion after taxes) related to alternative fuel mixture credits, a pre-tax charge of $87 million ($54 million |
(n) | Includes a $156 million tax expense for the write-off of deferred tax assets in France, a $15 million tax expense for the write-off of a deferred tax asset for a recycling credit in the state of Louisiana and a $26 million tax benefit related to the settlement of the 2004 and 2005 U.S. federal income tax audit and related state income tax effects. |
2013 | 2012 | 2011 | |||||||
Operating Earnings (Loss) Per Share Attributable to Shareholders | $ | 3.16 | $ | 2.65 | $ | 3.12 | |||
Non-operating pension expense | (0.44 | ) | (0.26 | ) | (0.06 | ) | |||
Special items | 0.29 | (0.69 | ) | (0.14 | ) | ||||
Diluted Earnings (Loss) Per Share from Continuing Operations | 3.01 | 1.70 | 2.92 | ||||||
Discontinued operations | 0.10 | 0.10 | 0.11 | ||||||
Diluted Earnings (Loss)Per Share Attributable to Shareholders | $ | 3.11 | $ | 1.80 | $ | 3.03 |
Three Months Ended December 31, 2013 | Three Months Ended September 30, 2013 | Three Months Ended December 31, 2012 | ||||||||||
Operating Earnings (Loss) Per Share Attributable to Shareholders | $ | 0.83 | $ | 1.05 | $ | 0.69 | ||||||
Non-operating pension expense | (0.11 | ) | (0.11 | ) | (0.07 | ) | ||||||
Special items | 0.25 | (0.07 | ) | (0.11 | ) | |||||||
Diluted Earnings (Loss) Per Share from Continuing Operations | 0.97 | 0.87 | 0.51 | |||||||||
Discontinued operations | 0.01 | (0.02 | ) | 0.02 | ||||||||
Diluted Earnings (Loss) Per Share Attributable to Shareholders | $ | 0.98 | $ | 0.85 | $ | 0.53 |
In millions | 2013 | 2012 | 2011 | ||||||
Net Earnings (Loss) Attributable to International Paper Company | $ | 1,395 | $ | 794 | $ | 1,322 | |||
Deduct – Discontinued operations: | |||||||||
(Earnings) from operations | (64 | ) | (54 | ) | — | ||||
(Gain) loss on sales or impairment | 19 | 9 | (49 | ) | |||||
Earnings (Loss) From Continuing Operations Attributable to International Paper Company | 1,350 | 749 | 1,273 | ||||||
Add back (deduct): | |||||||||
Income tax provision | (523 | ) | 331 | 311 | |||||
Equity (earnings) loss, net of taxes | 39 | (61 | ) | (140 | ) | ||||
Net earnings attributable to noncontrolling interests | (17 | ) | 5 | 14 | |||||
Earnings (Loss) From Continuing Operations Before Income Taxes and Equity Earnings | 849 | 1,024 | 1,458 | ||||||
Interest expense, net | 612 | 672 | 541 | ||||||
Noncontrolling interests / equity earnings included in operations | (1 | ) | — | (10 | ) | ||||
Corporate items | 29 | 51 | 102 | ||||||
Special items: | |||||||||
Restructuring and other charges | 32 | 51 | 82 | ||||||
Net losses (gains) on sales and impairments of businesses | — | (2 | ) | — | |||||
Non-Operating Pension Expense | 323 | 159 | 43 | ||||||
$ | 1,844 | $ | 1,955 | $ | 2,216 | ||||
Industry Segment Operating Profit | |||||||||
Industrial Packaging | $ | 1,801 | $ | 1,066 | $ | 1,147 | |||
Printing Papers | 271 | 599 | 872 | ||||||
Consumer Packaging | 161 | 268 | 163 | ||||||
Distribution | (389 | ) | 22 | 34 | |||||
Total Industry Segment Operating Profit | $ | 1,844 | $ | 1,955 | $ | 2,216 |
• | Industrial Packaging’s profits of $1.8 billion were $735 million higher than in 2012 as the net benefit of higher average sales price realizations and unfavorable mix were partially offset by lower sales volumes, higher operating costs and higher maintenance outage costs. In addition, 2013 operating profits included $62 million of costs associated with the integration of Temple-Inland and a $13 million gain for a bargain purchase adjustment on the acquisition of a majority share of our operations in Turkey. Operating profits in 2012 included $184 million of costs associated with the integration of Temple-Inland, a $62 million charge to adjust the long-lived assets of the Hueneme mill to their fair value, and $29 million of costs associated with the divestiture of three containerboard mills. |
• | Printing Papers’ profits of $271 million were $328 million lower than in 2012. The benefits of lower operating costs and maintenance outage costs were more than offset by lower average sales price realizations, lower sales volumes, higher input costs and higher other costs. Operating profits in 2013 included $118 million of costs associated with the announced shutdown of our Courtland, Alabama mill and net charges of $123 million for the impairment of the goodwill and a trade name intangible asset of the Company's India Papers business. |
• | Consumer Packaging’s profits of $161 million were $107 million lower than in 2012. The benefits from higher sales volumes were more than offset by lower average sales price realizations, an unfavorable mix, higher operating costs and higher input costs. Operating profits in 2013 included costs of $45 million associated with the permanent shutdown of a paper machine at our Augusta, Georgia mill. |
• | Distribution’s loss of $389 million was lower than the operating profit of $22 million in 2012. The benefits from lower operating costs were more than offset by lower sales volumes and lower average sales price realizations. Operating profits in 2013 included a $400 million charge for the impairment of goodwill in the Company's xpedx business. In addition, reorganization expenses were $32 million in 2013 and $49 million in 2012. |
• | a $25 million charge before taxes ($16 million after taxes) for costs related to the early extinguishment of debt (see Note 13 Debt and Lines of Credit on pages 75 and 76 of Item 8. Financial Statements and Supplementary Data), |
• | a $22 million charge before taxes ($14 million after taxes) for costs associated with the evaluation of the spin-off of our xpedx operations, and |
• | a $30 million gain before taxes ($19 million after taxes) for insurance reimbursements related to the Guaranty Bank legal settlement. |
• | a $118 million charge before taxes ($72 million after taxes) for costs related to the shutdown of the Courtland, Alabama mill, |
• | a $32 million charge before taxes ($19 million after taxes) for restructuring costs related to the Company's xpedx business, |
• | a $45 million charge before taxes ($28 million after taxes) for costs related to the shutdown of a paper machine at the Augusta, Georgia mill, and |
• | a $2 million gain before taxes (loss of $1 million after taxes) for other items. |
• | a $48 million charge before taxes ($30 million after taxes) for costs related to the early extinguishment of debt (see Note 13 Debt and Lines of Credit on pages 75 and 76 of Item 8. Financial Statements and Supplementary Data), and |
• | a $3 million charge before taxes ($5 million after taxes) for other items. |
• | a $17 million charge before taxes ($12 million after taxes) related to the restructuring of our Packaging business in EMEA, |
• | a $44 million charge before taxes ($28 million after taxes) for restructuring costs related to the Company's xpedx business, and |
• | a $3 million gain before taxes ($1 million after taxes) for other items. |
• | a $32 million charge before taxes ($19 million after taxes) for costs related to the early extinguishment of debt (see Note 13 Debt and Lines of Credit on pages 75 and 76 of Item 8. Financial Statements and Supplementary Data), |
• | an $18 million charge before taxes ($12 million after taxes) related to International Paper's acquisition of a majority share of APPM in India, and |
• | a $5 million charge before taxes ($2 million after taxes) for other items. |
• | a $20 million charge before taxes ($12 million after taxes) for costs associated with the signing of an agreement to acquire Temple-Inland, |
• | a $24 million gain before taxes ($15 million after taxes) related to a change in the estimate of closure costs related to the Franklin, Virginia mill due to the Company’s decision to repurpose a portion of the mill to produce fluff pulp, |
• | a $49 million charge before taxes ($34 million after taxes) for restructuring costs related to the Company’s xpedx business, and |
• | a $2 million charge before taxes ($2 million after taxes) for other items. |
Industrial Packaging | |||||||||
In millions | 2013 | 2012 | 2011 | ||||||
Sales | $ | 14,810 | $ | 13,280 | $ | 10,430 | |||
Operating Profit | 1,801 | 1,066 | 1,147 |
Printing Papers | |||||||||
In millions | 2013 | 2012 | 2011 | ||||||
Sales | $ | 6,205 | $ | 6,230 | $ | 6,215 | |||
Operating Profit | 271 | 599 | 872 |
Consumer Packaging | |||||||||
In millions | 2013 | 2012 | 2011 | ||||||
Sales | $ | 3,435 | $ | 3,170 | $ | 3,710 | |||
Operating Profit | 161 | 268 | 163 |
Distribution | |||||||||
In millions | 2013 | 2012 | 2011 | ||||||
Sales | $ | 5,650 | $ | 6,040 | $ | 6,630 | |||
Operating Profit | (389 | ) | 22 | 34 |
In millions | 2011 | |||
Equity earnings (loss), net of taxes | $ | (19 | ) | |
Earnings (loss) from continuing operations | (19 | ) | ||
Net earnings (loss) attributable to International Paper Company | (19 | ) | ||
Basic earnings (loss) per share from continuing operations | (0.04 | ) | ||
Basic net earnings (loss) per share | (0.04 | ) | ||
Diluted earnings (loss) per share from continuing operations | (0.04 | ) | ||
Diluted net earnings (loss) per share | (0.04 | ) |
In millions | 2013 | 2012 | 2011 | ||||||
Cash provided by operations | $ | 2,998 | $ | 2,960 | $ | 2,675 | |||
(Less)/Add: | |||||||||
Cash invested in capital projects | (1,198 | ) | (1,383 | ) | (1,159 | ) | |||
Cash contribution to pension plan, net of tax refunds | 31 | 44 | 300 | ||||||
Cash (received from) used for European accounts receivable securitization program | — | — | 209 | ||||||
Tax receivable collected related to pension contributions | — | — | (123 | ) | |||||
Cash received from unwinding a timber monetization | — | (251 | ) | (175 | ) | ||||
Change in control payments related to Temple-Inland acquisition | — | 120 | — | ||||||
Insurance reimbursement for Guaranty Bank settlement | (30 | ) | 80 | — | |||||
Free Cash Flow | $ | 1,801 | $ | 1,570 | $ | 1,727 |
In millions | Three Months Ended December 31, 2013 | Three Months Ended September 30, 2013 | Three Months Ended December 31, 2012 | ||||||
Cash provided by operations | $ | 1,034 | $ | 725 | $ | 686 | |||
(Less)/Add: | |||||||||
Cash invested in capital projects | (439 | ) | (271 | ) | (382 | ) | |||
Cash paid for Guaranty Bank settlement | — | — | 80 | ||||||
Free Cash Flow | $ | 595 | $ | 454 | $ | 384 |
In millions | 2013 | 2012 | 2011 | ||||||
Industrial Packaging | $ | 629 | $ | 565 | $ | 426 | |||
Printing Papers | 294 | 449 | 364 | ||||||
Consumer Packaging | 208 | 296 | 310 | ||||||
Distribution | 9 | 10 | 8 | ||||||
Subtotal | 1,140 | 1,320 | 1,108 | ||||||
Corporate and other | 58 | 63 | 51 | ||||||
Total from Continuing Operations | $ | 1,198 | $ | 1,383 | $ | 1,159 |
In millions | 2013 | 2012 | 2011 | ||||||
Debt reductions (a) | $ | 574 | $ | 1,272 | $ | 129 | |||
Pre-tax early debt extinguishment costs (b) | 25 | 48 | 32 |
(a) | Reductions related to notes with interest rates ranging from 1.625% to 9.375% with original maturities from 2012 to 2041 for the years ended December 31, 2013, 2012 and 2011. |
(b) | Amounts are included in Restructuring and other charges in the accompanying consolidated statements of operations. |
In millions | 2014 | 2015 | 2016 | 2017 | 2018 | Thereafter | ||||||||||||
Maturities of long-term debt (a) | $ | 661 | $ | 498 | $ | 571 | $ | 285 | $ | 1,837 | $ | 5,636 | ||||||
Debt obligations with right of offset (b) | — | — | 5,185 | — | — | — | ||||||||||||
Lease obligations | 171 | 133 | 97 | 74 | 59 | 162 | ||||||||||||
Purchase obligations (c) | 3,170 | 770 | 642 | 529 | 453 | 2,404 | ||||||||||||
Total (d) | $ | 4,002 | $ | 1,401 | $ | 6,495 | $ | 888 | $ | 2,349 | $ | 8,202 |
(a) | Total debt includes scheduled principal payments only. |
(b) | Represents debt obligations borrowed from non-consolidated variable interest entities for which International Paper has, and intends to effect, a legal right to offset these obligations with investments held in the entities. Accordingly, in its consolidated balance sheet at December 31, 2013, International Paper has offset approximately $5.2 billion of interests in the entities against this $5.2 billion of debt obligations held by the entities (see Note 12 Variable Interest Entities and Preferred Securities of Subsidiaries on pages 72 through 75 in Item 8. Financial Statements and Supplementary Data). |
(c) | Includes $3.3 billion relating to fiber supply agreements entered into at the time of the 2006 Transformation Plan forestland sales and in conjunction with the 2008 acquisition of Weyerhaeuser Company’s Containerboard, Packaging and Recycling business. |
(d) | Not included in the above table due to the uncertainty as to the amount and timing of the payment are unrecognized tax benefits of approximately $146 million. |
In millions | Benefit Obligation | Fair Value of Plan Assets | ||||
U.S. qualified pension | $ | 12,496 | $ | 10,706 | ||
U.S. nonqualified pension | 407 | — | ||||
U.S. postretirement | 322 | — | ||||
Non-U.S. pension | 228 | 181 | ||||
Non-U.S. postretirement | 72 | — |
2013 | 2012 | 2011 | ||||
Discount rate | 4.90 | % | 4.10 | % | 5.10 | % |
Rate of compensation increase | 3.75 | % | 3.75 | % | 3.75 | % |
2013 | 2012 | |||
Health care cost trend rate assumed for next year | 7.00 | % | 7.50 | % |
Rate that the cost trend rate gradually declines to | 5.00 | % | 5.00 | % |
Year that the rate reaches the rate it is assumed to remain | 2017 | 2017 |
Year | Return | Year | Return | ||
2013 | 14.1 | % | 2008 | (23.6 | )% |
2012 | 14.1 | % | 2007 | 9.6 | % |
2011 | 2.5 | % | 2006 | 14.9 | % |
2010 | 15.1 | % | 2005 | 11.7 | % |
2009 | 23.8 | % | 2004 | 14.1 | % |
In millions | 2013 | 2012 | 2011 | 2010 | 2009 | ||||||||||
Pension expense | |||||||||||||||
U.S. plans (non-cash) | $ | 545 | $ | 342 | $ | 195 | $ | 231 | $ | 213 | |||||
Non-U.S. plans | 5 | 3 | 1 | — | 3 | ||||||||||
Postretirement expense | |||||||||||||||
U.S. plans | (1 | ) | (4 | ) | 7 | 6 | 27 | ||||||||
Non-U.S. plans | 7 | 1 | 2 | 1 | 3 | ||||||||||
Net expense | $ | 556 | $ | 342 | $ | 205 | $ | 238 | $ | 246 |
In millions | 2015 (1) | 2014 (1) | ||||
Pension expense | ||||||
U.S. plans (non-cash) | $ | 304 | $ | 366 | ||
Non-U.S. plans | 3 | 3 | ||||
Postretirement expense | ||||||
U.S. plans | 8 | 7 | ||||
Non-U.S. plans | 12 | 11 | ||||
Net expense | $ | 327 | $ | 387 |
(1) | Based on assumptions at December 31, 2013. |
In millions, except per share amounts, for the years ended December 31 | 2013 | 2012 | 2011 | ||||||
NET SALES | $ | 29,080 | $ | 27,833 | $ | 26,034 | |||
COSTS AND EXPENSES | |||||||||
Cost of products sold | 21,223 | 20,587 | 18,960 | ||||||
Selling and administrative expenses | 2,205 | 2,092 | 1,887 | ||||||
Depreciation, amortization and cost of timber harvested | 1,547 | 1,486 | 1,332 | ||||||
Distribution expenses | 1,732 | 1,611 | 1,390 | ||||||
Taxes other than payroll and income taxes | 185 | 166 | 146 | ||||||
Restructuring and other charges | 210 | 109 | 102 | ||||||
Impairment of goodwill and other intangibles | 527 | — | — | ||||||
Net (gains) losses on sales and impairments of businesses | 3 | 86 | 218 | ||||||
Net bargain purchase gain on acquisition of business | (13 | ) | — | — | |||||
Interest expense, net | 612 | 672 | 541 | ||||||
EARNINGS (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND EQUITY EARNINGS | 849 | 1,024 | 1,458 | ||||||
Income tax provision (benefit) | (523 | ) | 331 | 311 | |||||
Equity earnings (loss), net of taxes | (39 | ) | 61 | 140 | |||||
EARNINGS (LOSS) FROM CONTINUING OPERATIONS | 1,333 | 754 | 1,287 | ||||||
Discontinued operations, net of taxes | 45 | 45 | 49 | ||||||
NET EARNINGS (LOSS) | 1,378 | 799 | 1,336 | ||||||
Less: Net earnings (loss) attributable to noncontrolling interests | (17 | ) | 5 | 14 | |||||
NET EARNINGS (LOSS) ATTRIBUTABLE TO INTERNATIONAL PAPER COMPANY | $ | 1,395 | $ | 794 | $ | 1,322 | |||
BASIC EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO INTERNATIONAL PAPER COMPANY COMMON SHAREHOLDERS | |||||||||
Earnings (loss) from continuing operations | $ | 3.05 | $ | 1.72 | $ | 2.95 | |||
Discontinued operations, net of taxes | 0.10 | 0.10 | 0.11 | ||||||
Net earnings (loss) | $ | 3.15 | $ | 1.82 | $ | 3.06 | |||
DILUTED EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO INTERNATIONAL PAPER COMPANY COMMON SHAREHOLDERS | |||||||||
Earnings (loss) from continuing operations | $ | 3.01 | $ | 1.70 | $ | 2.92 | |||
Discontinued operations, net of taxes | 0.10 | 0.10 | 0.11 | ||||||
Net earnings (loss) | $ | 3.11 | $ | 1.80 | $ | 3.03 | |||
AMOUNTS ATTRIBUTABLE TO INTERNATIONAL PAPER COMPANY COMMON SHAREHOLDERS | |||||||||
Earnings (loss) from continuing operations | $ | 1,350 | $ | 749 | $ | 1,273 | |||
Discontinued operations, net of taxes | 45 | 45 | 49 | ||||||
Net earnings (loss) | $ | 1,395 | $ | 794 | $ | 1,322 |
In millions for the years ended December 31 | 2013 | 2012 | 2011 | ||||||
NET EARNINGS (LOSS) | $ | 1,378 | $ | 799 | $ | 1,336 | |||
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX | |||||||||
Amortization of pension and post-retirement prior service costs and net loss: | |||||||||
U.S. plans (less tax of $195, $124 and $88) | 307 | 195 | 139 | ||||||
Pension and postretirement liability adjustments: | |||||||||
U.S. plans (less tax of $756, $583 and $498) | 1,188 | (914 | ) | (783 | ) | ||||
Non-U.S. plans (less tax of $3, $9 and $3) | (4 | ) | (25 | ) | (5 | ) | |||
Change in cumulative foreign currency translation adjustment | (426 | ) | (131 | ) | (492 | ) | |||
Net gains/losses on cash flow hedging derivatives: | |||||||||
Net gains (losses) arising during the period (less tax of $2, $1 and $17) | — | 15 | (43 | ) | |||||
Reclassification adjustment for (gains) losses included in net earnings (less tax of $3, $13 and $8) | (7 | ) | 22 | 8 | |||||
TOTAL OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX | 1,058 | (838 | ) | (1,176 | ) | ||||
Comprehensive Income (Loss) | 2,436 | (39 | ) | 160 | |||||
Net (Earnings) Loss Attributable to Noncontrolling Interests | 17 | (5 | ) | (14 | ) | ||||
Other Comprehensive (Income) Loss Attributable to Noncontrolling Interests | 23 | 3 | (4 | ) | |||||
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO INTERNATIONAL PAPER COMPANY | $ | 2,476 | $ | (41 | ) | $ | 142 |
In millions, except per share amounts, at December 31 | 2013 | 2012 | ||||
ASSETS | ||||||
Current Assets | ||||||
Cash and temporary investments | $ | 1,802 | $ | 1,302 | ||
Accounts and notes receivable, less allowances of $109 in 2013 and $119 in 2012 | 3,756 | 3,562 | ||||
Inventories | 2,825 | 2,730 | ||||
Deferred income tax assets | 302 | 323 | ||||
Assets of businesses held for sale | — | 759 | ||||
Other current assets | 340 | 229 | ||||
Total Current Assets | 9,025 | 8,905 | ||||
Plants, Properties and Equipment, net | 13,672 | 13,949 | ||||
Forestlands | 557 | 622 | ||||
Investments | 733 | 887 | ||||
Financial Assets of Special Purpose Entities (Note 12) | 2,127 | 2,108 | ||||
Goodwill | 3,987 | 4,315 | ||||
Deferred Charges and Other Assets | 1,427 | 1,367 | ||||
TOTAL ASSETS | $ | 31,528 | $ | 32,153 | ||
LIABILITIES AND EQUITY | ||||||
Current Liabilities | ||||||
Notes payable and current maturities of long-term debt | $ | 661 | $ | 444 | ||
Accounts payable | 2,900 | 2,775 | ||||
Accrued payroll and benefits | 511 | 508 | ||||
Liabilities of businesses held for sale | — | 44 | ||||
Other accrued liabilities | 1,055 | 1,227 | ||||
Total Current Liabilities | 5,127 | 4,998 | ||||
Long-Term Debt | 8,827 | 9,696 | ||||
Nonrecourse Financial Liabilities of Special Purpose Entities (Note 12) | 2,043 | 2,036 | ||||
Deferred Income Taxes | 3,765 | 3,026 | ||||
Pension Benefit Obligation | 2,205 | 4,112 | ||||
Postretirement and Postemployment Benefit Obligation | 412 | 473 | ||||
Other Liabilities | 702 | 1,176 | ||||
Redeemable Noncontrolling Interest | 163 | — | ||||
Commitments and Contingent Liabilities (Note 11) | ||||||
Equity | ||||||
Common stock $1 par value, 2013 – 447.2 shares and 2012 – 439.9 shares | 447 | 440 | ||||
Paid-in capital | 6,463 | 6,042 | ||||
Retained earnings | 4,446 | 3,662 | ||||
Accumulated other comprehensive loss | (2,759 | ) | (3,840 | ) | ||
8,597 | 6,304 | |||||
Less: Common stock held in treasury, at cost, 2013 – 10.868 shares and 2012 – 0.013 shares | 492 | — | ||||
Total Shareholders’ Equity | 8,105 | 6,304 | ||||
Noncontrolling interests | 179 | 332 | ||||
Total Equity | 8,284 | 6,636 | ||||
TOTAL LIABILITIES AND EQUITY | $ | 31,528 | $ | 32,153 |
In millions for the years ended December 31 | 2013 | 2012 | 2011 | ||||||
OPERATING ACTIVITIES | |||||||||
Net earnings (loss) | $ | 1,378 | $ | 799 | $ | 1,336 | |||
Discontinued operations, net of taxes | (45 | ) | (45 | ) | (49 | ) | |||
Earnings (loss) from continuing operations | 1,333 | 754 | 1,287 | ||||||
Depreciation, amortization, and cost of timber harvested | 1,547 | 1,486 | 1,332 | ||||||
Deferred income tax provision (benefit), net | 146 | 204 | 317 | ||||||
Restructuring and other charges | 210 | 109 | 102 | ||||||
Pension plan contribution | (31 | ) | (44 | ) | (300 | ) | |||
Net bargain purchase gain on acquisition of business | (13 | ) | — | — | |||||
Periodic pension expense, net | 545 | 342 | 195 | ||||||
Net (gains) losses on sales and impairments of businesses | 3 | 86 | 218 | ||||||
Equity (earnings) losses, net of taxes | 39 | (61 | ) | (140 | ) | ||||
Release of tax reserves | (775 | ) | — | — | |||||
Impairment of goodwill and other intangible assets | 527 | — | — | ||||||
Other, net | (47 | ) | — | 169 | |||||
Changes in current assets and liabilities | |||||||||
Accounts and notes receivable | (134 | ) | 377 | (128 | ) | ||||
Inventories | (114 | ) | (28 | ) | (56 | ) | |||
Accounts payable and accrued liabilities | (110 | ) | (273 | ) | (389 | ) | |||
Interest payable | (57 | ) | 30 | 6 | |||||
Other | (71 | ) | (22 | ) | 62 | ||||
Cash provided by (used for) operating activities - continuing operations | 2,998 | 2,960 | 2,675 | ||||||
Cash provided by (used for) operating activities - discontinued operations | 30 | 7 | — | ||||||
CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES | 3,028 | 2,967 | 2,675 | ||||||
INVESTMENT ACTIVITIES | |||||||||
Invested in capital projects | (1,198 | ) | (1,383 | ) | (1,159 | ) | |||
Acquisitions, net of cash acquired | (505 | ) | (3,734 | ) | (379 | ) | |||
Proceeds from divestitures | 726 | 474 | 50 | ||||||
Equity investment in Ilim | — | (45 | ) | — | |||||
Proceeds from sale of fixed assets | 65 | — | — | ||||||
Escrow arrangement | — | — | (25 | ) | |||||
Other | 84 | (80 | ) | 26 | |||||
Cash provided by (used for) investment activities - continuing operations | (828 | ) | (4,768 | ) | (1,487 | ) | |||
Cash provided by (used for) investment activities - discontinued operations | 1 | (90 | ) | — | |||||
CASH PROVIDED BY (USED FOR) INVESTMENT ACTIVITIES | (827 | ) | (4,858 | ) | (1,487 | ) | |||
FINANCING ACTIVITIES | |||||||||
Repurchase of common stock and payments of restricted stock tax withholding | (512 | ) | (35 | ) | (30 | ) | |||
Issuance of common stock | 298 | 108 | — | ||||||
Issuance of debt | 241 | 2,132 | 1,766 | ||||||
Reduction of debt | (845 | ) | (2,488 | ) | (517 | ) | |||
Change in book overdrafts | (123 | ) | 11 | (29 | ) | ||||
Dividends paid | (554 | ) | (476 | ) | (427 | ) | |||
Redemption of securities | (150 | ) | — | — | |||||
Other | (43 | ) | (47 | ) | (21 | ) | |||
CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES | (1,688 | ) | (795 | ) | 742 | ||||
Effect of Exchange Rate Changes on Cash | (13 | ) | (6 | ) | (9 | ) | |||
Change in Cash and Temporary Investments | 500 | (2,692 | ) | 1,921 | |||||
Cash and Temporary Investments | |||||||||
Beginning of the period | 1,302 | 3,994 | 2,073 | ||||||
End of the period | $ | 1,802 | $ | 1,302 | $ | 3,994 |
In millions | Common Stock Issued | Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Total International Paper Shareholders’ Equity | Noncontrolling Interests | Total Equity | ||||||||||||||||
BALANCE, JANUARY 1, 2011 | $ | 439 | $ | 5,829 | $ | 2,460 | $ | (1,825 | ) | $ | 28 | $ | 6,875 | $ | 250 | $ | 7,125 | |||||||
Issuance of stock for various plans, net | — | 79 | — | — | (6 | ) | 85 | — | 85 | |||||||||||||||
Repurchase of stock | — | — | — | — | 30 | (30 | ) | — | (30 | ) | ||||||||||||||
Dividends | — | — | (427 | ) | — | — | (427 | ) | — | (427 | ) | |||||||||||||
Dividends paid to noncontrolling interests by subsidiary | — | — | — | — | — | — | (5 | ) | (5 | ) | ||||||||||||||
Noncontrolling interests of acquired entities | — | — | — | — | — | — | 37 | 37 | ||||||||||||||||
Acquisition of noncontrolling interests | — | — | — | — | — | — | 40 | 40 | ||||||||||||||||
Comprehensive income (loss) | — | — | 1,322 | (1,180 | ) | — | 142 | 18 | 160 | |||||||||||||||
BALANCE, DECEMBER 31, 2011 | 439 | 5,908 | 3,355 | (3,005 | ) | 52 | 6,645 | 340 | 6,985 | |||||||||||||||
Issuance of stock for various plans, net | 1 | 134 | — | — | (87 | ) | 222 | — | 222 | |||||||||||||||
Repurchase of stock | — | — | — | — | 35 | (35 | ) | — | (35 | ) | ||||||||||||||
Dividends | — | — | (487 | ) | — | — | (487 | ) | — | (487 | ) | |||||||||||||
Dividends paid to noncontrolling interests by subsidiary | — | — | — | — | — | — | (6 | ) | (6 | ) | ||||||||||||||
Noncontrolling interests of acquired entities | — | — | — | — | — | — | (4 | ) | (4 | ) | ||||||||||||||
Comprehensive income (loss) | — | — | 794 | (835 | ) | — | (41 | ) | 2 | (39 | ) | |||||||||||||
BALANCE, DECEMBER 31, 2012 | 440 | 6,042 | 3,662 | (3,840 | ) | — | 6,304 | 332 | 6,636 | |||||||||||||||
Issuance of stock for various plans, net | 7 | 421 | — | — | (20 | ) | 448 | — | 448 | |||||||||||||||
Repurchase of stock | — | — | — | — | 512 | (512 | ) | — | (512 | ) | ||||||||||||||
Dividends | — | — | (567 | ) | — | — | (567 | ) | — | (567 | ) | |||||||||||||
Dividends paid to noncontrolling interests by subsidiary | — | — | — | — | — | — | (1 | ) | (1 | ) | ||||||||||||||
Noncontrolling interests of acquired entities | — | — | (44 | ) | — | — | (44 | ) | (112 | ) | (156 | ) | ||||||||||||
Comprehensive income (loss) | — | — | 1,395 | 1,081 | — | 2,476 | (40 | ) | 2,436 | |||||||||||||||
BALANCE, DECEMBER 31, 2013 | $ | 447 | $ | 6,463 | $ | 4,446 | $ | (2,759 | ) | $ | 492 | $ | 8,105 | $ | 179 | $ | 8,284 |
In millions | 2011 | |||
Equity earnings (loss), net of taxes | $ | (19 | ) | |
Earnings (loss) from continuing operations | (19 | ) | ||
Net earnings (loss) attributable to International Paper Company | (19 | ) | ||
Basic earnings (loss) per share from continuing operations | (0.04 | ) | ||
Basic net earnings (loss) per share | (0.04 | ) | ||
Diluted earnings (loss) per share from continuing operations | (0.04 | ) | ||
Diluted net earnings (loss) per share | (0.04 | ) |
In millions, except per share amounts | 2013 | 2012 | 2011 | ||||||||
Earnings (loss) from continuing operations | $ | 1,350 | $ | 749 | $ | 1,273 | |||||
Effect of dilutive securities (a) | — | — | — | ||||||||
Earnings (loss) from continuing operations –assuming dilution | $ | 1,350 | $ | 749 | $ | 1,273 | |||||
Average common shares outstanding | 443.3 | 435.2 | 432.2 | ||||||||
Effect of dilutive securities (a): | |||||||||||
Restricted performance share plan | 4.5 | 5.0 | 4.8 | ||||||||
Stock options (b) | 0.3 | — | — | ||||||||
Average common shares outstanding – assuming dilution | 448.1 | 440.2 | 437.0 | ||||||||
Basic earnings (loss) per share from continuing operations | $ | 3.05 | $ | 1.72 | $ | 2.95 | |||||
Diluted earnings (loss) per share from continuing operations | $ | 3.01 | $ | 1.70 | $ | 2.92 |
(a) | Securities are not included in the table in periods when antidilutive. |
(b) | Options to purchase 0.0 million, 9.1 million and 15.6 million shares for the years ended December 31,2013, 2012 and 2011, respectively, were not included in the computation of diluted common shares outstanding because their exercise price exceeded the average market price of the Company’s common stock for each respective reporting date. |
In millions | Defined Benefit Pension and Postretirement Items (a) | Change in Cumulative Foreign Currency Translation Adjustments (a) | Net Gains and Losses on Cash Flow Hedging Derivatives (a) | Total (a) | ||||||||
Balance as of January 1, 2013 | $ | (3,596 | ) | $ | (246 | ) | $ | 2 | $ | (3,840 | ) | |
Other comprehensive income (loss) before reclassifications | 1,184 | (443 | ) | — | 741 | |||||||
Amounts reclassified from accumulated other comprehensive income | 307 | 17 | (7 | ) | 317 | |||||||
Net Current Period Other Comprehensive Income | 1,491 | (426 | ) | (7 | ) | 1,058 | ||||||
Other Comprehensive Income (Loss) Attributable to Noncontrolling Interest | — | 23 | — | 23 | ||||||||
Balance as of December 31, 2013 | $ | (2,105 | ) | $ | (649 | ) | $ | (5 | ) | $ | (2,759 | ) |
In millions | Defined Benefit Pension and Postretirement Items (a) | Change in Cumulative Foreign Currency Translation Adjustments (a) | Net Gains and Losses on Cash Flow Hedging Derivatives (a) | Total (a) | ||||||||
Balance as of January 1, 2012 | $ | (2,852 | ) | $ | (118 | ) | $ | (35 | ) | $ | (3,005 | ) |
Other comprehensive income (loss) before reclassifications | (939 | ) | (96 | ) | 15 | (1,020 | ) | |||||
Amounts reclassified from accumulated other comprehensive income | 195 | (35 | ) | 22 | 182 | |||||||
Net Current Period Other Comprehensive Income | (744 | ) | (131 | ) | 37 | (838 | ) | |||||
Other Comprehensive Income (Loss) Attributable to Noncontrolling Interest | — | 3 | — | 3 | ||||||||
Balance as of December 31, 2012 | $ | (3,596 | ) | $ | (246 | ) | $ | 2 | $ | (3,840 | ) |
In millions | Defined Benefit Pension and Postretirement Items (a) | Change in Cumulative Foreign Currency Translation Adjustments (a) | Net Gains and Losses on Cash Flow Hedging Derivatives (a) | Total (a) | ||||||||
Balance as of January 1, 2011 | $ | (2,203 | ) | $ | 378 | $ | — | $ | (1,825 | ) | ||
Other comprehensive income (loss) before reclassifications | (788 | ) | (492 | ) | (43 | ) | (1,323 | ) | ||||
Amounts reclassified from accumulated other comprehensive income | 139 | — | 8 | 147 | ||||||||
Net Current Period Other Comprehensive Income | (649 | ) | (492 | ) | (35 | ) | (1,176 | ) | ||||
Other Comprehensive Income (Loss) Attributable to Noncontrolling Interest | — | (4 | ) | — | (4 | ) | ||||||
Balance as of December 31, 2011 | $ | (2,852 | ) | $ | (118 | ) | $ | (35 | ) | $ | (3,005 | ) |
Details About Accumulated Other Comprehensive Income Components | Amount Reclassified from Accumulated Other Comprehensive Income (a) | Location of Amount Reclassified from AOCI | |||||||||
2013 | 2012 | 2011 | |||||||||
In millions | |||||||||||
Defined benefit pension and postretirement items: | |||||||||||
Prior-service costs | $ | (9 | ) | $ | (2 | ) | $ | (6 | ) | (b) | Cost of products sold |
Actuarial gains/(losses) | (493 | ) | (317 | ) | (221 | ) | (b) | Cost of products sold | |||
Total pre-tax amount | (502 | ) | (319 | ) | (227 | ) | |||||
Tax (expense)/benefit | 195 | 124 | 88 | ||||||||
Net of tax | (307 | ) | (195 | ) | (139 | ) | |||||
Change in cumulative foreign currency translation adjustments: | |||||||||||
Business acquisition/divestiture | (17 | ) | 48 | — | Net (gains) losses on sales and impairments of businesses | ||||||
Tax (expense)/benefit | — | (13 | ) | — | |||||||
Net of tax | (17 | ) | 35 | — | |||||||
Net gains and losses on cash flow hedging derivatives: | |||||||||||
Foreign exchange contracts | 10 | (24 | ) | 10 | (c) | Cost of products sold | |||||
Fuel oil contracts | — | — | 6 | (c) | Cost of products sold | ||||||
Natural gas contracts | — | (11 | ) | (32 | ) | (c) | Cost of products sold | ||||
Total pre-tax amount | 10 | (35 | ) | (16 | ) | ||||||
Tax (expense)/benefit | (3 | ) | 13 | 8 | |||||||
Net of tax | 7 | (22 | ) | (8 | ) | ||||||
Total reclassifications for the period | $ | (317 | ) | $ | (182 | ) | $ | (147 | ) |
In millions | Before-Tax Charges | After-Tax Charges | ||||||
Early debt extinguishment costs (see Note 13) | $ | 25 | $ | 16 | ||||
xpedx restructuring (a) | 32 | 19 | ||||||
xpedx transaction costs | 22 | 14 | ||||||
Courtland mill shutdown (b) | 118 | 72 | ||||||
Box plant closures | (13 | ) | (8 | ) | ||||
Augusta paper machine shutdown (c) | 45 | 28 | ||||||
Insurance reimbursements | (30 | ) | (19 | ) | ||||
Other (d) | 11 | 9 | ||||||
Total | $ | 210 | $ | 131 |
In millions | Severance and Other | |||
Additions and adjustments | $ | 63 | ||
Cash charges in 2013 | (21 | ) | ||
Balance, December 31, 2013 | $ | 42 |
In millions | Before-Tax Charges | After-Tax Charges | ||||||
Early debt extinguishment costs (see Note 13) | $ | 48 | $ | 30 | ||||
xpedx restructuring (a) | 44 | 28 | ||||||
EMEA packaging restructuring (b) | 17 | 12 | ||||||
Other | — | 4 | ||||||
Total | $ | 109 | $ | 74 |
In millions | Severance and Other | |||
Additions and adjustments | $ | 31 | ||
Cash charges in 2012 | (15 | ) | ||
Cash charges in 2013 | (6 | ) | ||
Balance, December 31, 2013 | $ | 10 |
In millions | Before-Tax Charges | After-Tax Charges | ||||||
xpedx restructuring (a) | $ | 49 | $ | 34 | ||||
Early debt extinguishment costs (see Note 13) | 32 | 19 | ||||||
Temple-Inland merger agreement | 20 | 12 | ||||||
APPM acquisition | 18 | 12 | ||||||
Franklin, Virginia mill – closure costs (b) | (24 | ) | (15 | ) | ||||
Other | 7 | 4 | ||||||
Total | $ | 102 | $ | 66 |
(a) | Includes $19 million of severance charges. |
(b) | Includes a $21 million credit related to the reversal of an environmental reserve. |
In millions | Severance and Other | |||
Additions and adjustments | $ | 25 | ||
Cash charges in 2011 | (16 | ) | ||
Cash charges in 2012 | (8 | ) | ||
Cash charges in 2013 | (1 | ) | ||
Balance, December 31, 2013 | $ | — |
In millions | ||||
Cash and temporary investments | $ | 5 | ||
Accounts and notes receivable | 72 | |||
Inventory | 31 | |||
Other current assets | 2 | |||
Plants, properties and equipment | 106 | |||
Investments | 11 | |||
Total assets acquired | 227 | |||
Notes payable and current maturities of long-term debt | 17 | |||
Accounts payable and accrued liabilities | 27 | |||
Deferred income tax liability | 4 | |||
Postretirement and postemployment benefit obligation | 6 | |||
Total liabilities assumed | 54 | |||
Noncontrolling interest | 18 | |||
Net assets acquired | $ | 155 |
In millions | ||||
Accounts and notes receivable | $ | 466 | ||
Inventory | 484 | |||
Deferred income tax assets – current | 140 | |||
Other current assets | 57 | |||
Plants, properties and equipment | 2,911 | |||
Financial assets of special purpose entities | 2,091 | |||
Goodwill | 2,139 | |||
Other intangible assets | 693 | |||
Deferred charges and other assets | 54 | |||
Total assets acquired | 9,035 | |||
Notes payable and current maturities of long-term debt | 130 | |||
Accounts payable and accrued liabilities | 704 | |||
Long-term debt | 527 | |||
Nonrecourse financial liabilities of special purpose entities | 2,030 | |||
Deferred income tax liability | 1,252 | |||
Pension benefit obligation | 338 | |||
Postretirement and postemployment benefit obligation | 99 | |||
Other liabilities | 221 | |||
Total liabilities assumed | 5,301 | |||
Net assets acquired | $ | 3,734 |
In millions | Estimated Fair Value | Average Remaining Useful Life | |||
Asset Class: | (at acquisition date) | ||||
Customer relationships | $ | 536 | 12-17 years | ||
Developed technology | 8 | 5-10 years | |||
Tradenames | 109 | Indefinite | |||
Favorable contracts | 14 | 4-7 years | |||
Non-compete agreement | 26 | 2 years | |||
Total | $ | 693 |
In millions, except per share amounts | 2012 | ||
Net sales | $ | 28,125 | |
Earnings (loss) from continuing operations (a) | 805 | ||
Net earnings (loss) (a) | 845 | ||
Diluted earnings (loss) from continuing operations per share (a) | 1.82 | ||
Diluted net earnings (loss) per share (a) | 1.92 |
In millions | ||||
Cash and temporary investments | $ | 3 | ||
Accounts and notes receivable | 7 | |||
Inventory | 43 | |||
Other current assets | 13 | |||
Plants, properties and equipment | 352 | |||
Goodwill | 138 | |||
Deferred income tax asset | 4 | |||
Other intangible assets | 91 | |||
Other long-term assets | 1 | |||
Total assets acquired | 652 | |||
Accounts payable and accrued liabilities | 67 | |||
Long-term debt | 47 | |||
Other liabilities | 11 | |||
Deferred income tax liability | 90 | |||
Total liabilities assumed | 215 | |||
Noncontrolling interest | 37 | |||
Net assets acquired | $ | 400 |
In millions | Estimated Fair Value | Average Remaining Useful Life | |||
Asset Class: | (at acquisition date) | ||||
Non-compete agreement | $ | 58 | 6 years | ||
Tradenames | 20 | Indefinite | |||
Fuel supply agreements | 5 | 2 years | |||
Power purchase arrangements | 5 | 5 years | |||
Wholesale distribution network | 3 | 18 years | |||
Total | $ | 91 |
In millions | ||||
Cash and temporary investments | $ | 16 | ||
Accounts and notes receivable | 5 | |||
Inventory | 27 | |||
Plants, properties and equipment | 290 | |||
Goodwill | 260 | |||
Other intangible assets | 110 | |||
Other long-term assets | 2 | |||
Total assets acquired | 710 | |||
Accounts payable and accrued liabilities | 68 | |||
Deferred income tax liability | 37 | |||
Total liabilities assumed | 105 | |||
Noncontrolling interest | 134 | |||
Net assets acquired | $ | 471 |
In millions | Estimated Fair Value | Average Remaining Useful Life | |||
Asset Class: | (at acquisition date) | ||||
Customer relationships | $ | 88 | 12 years | ||
Trademark | 3 | 6 years | |||
Wood supply agreement | 19 | 25 years | |||
Total | $ | 110 |
In millions at December 31 | 2013 | 2012 | ||||
Temporary Investments | $ | 1,398 | $ | 934 |
In millions at December 31 | 2013 | 2012 | ||||
Accounts and notes receivable: | ||||||
Trade | $ | 3,497 | $ | 3,316 | ||
Other | 259 | 246 | ||||
Total | $ | 3,756 | $ | 3,562 |
In millions at December 31 | 2013 | 2012 | ||||
Raw materials | $ | 372 | $ | 360 | ||
Finished pulp, paper and packaging products | 1,834 | 1,728 | ||||
Operating supplies | 572 | 588 | ||||
Other | 47 | 54 | ||||
Inventories | $ | 2,825 | $ | 2,730 |
In millions at December 31 | 2013 | 2012 | ||||
Pulp, paper and packaging facilities | ||||||
Mills | $ | 22,105 | $ | 23,625 | ||
Packaging plants | 10,163 | 7,184 | ||||
Other plants, properties and equipment | 1,478 | 2,074 | ||||
Gross cost | 33,746 | 32,883 | ||||
Less: Accumulated depreciation | 20,074 | 18,934 | ||||
Plants, properties and equipment, net | $ | 13,672 | $ | 13,949 |
In millions | 2013 | 2012 | 2011 | ||||||
Depreciation expense | $ | 1,423 | $ | 1,399 | $ | 1,263 |
In millions | 2013 | 2012 | 2011 | ||||||
Interest payments | $ | 751 | $ | 740 | $ | 629 |
In millions | 2013 | 2012 | 2011 | ||||||
Interest expense (a) | $ | 669 | $ | 743 | $ | 596 | |||
Interest income (a) | 57 | 71 | 55 | ||||||
Capitalized interest costs | 17 | 37 | 22 |
(a) | Interest expense and interest income exclude approximately $45 million, $49 million and $49 million in 2013, 2012 and 2011, respectively, related to investments in and borrowings from variable interest entities for which the Company has a legal right of offset (see Note 12). |
In millions | Industrial Packaging | Printing Papers | Consumer Packaging | Distribution | Total | ||||||||||||||
Balance as of January 1, 2013 | |||||||||||||||||||
Goodwill | $ | 3,165 | $ | 2,396 | $ | 1,783 | $ | 400 | $ | 7,744 | |||||||||
Accumulated impairment losses (a) | — | (1,765 | ) | (1,664 | ) | — | (3,429 | ) | |||||||||||
3,165 | 631 | 119 | 400 | 4,315 | |||||||||||||||
Reclassifications and other (b) | (28 | ) | (63 | ) | 3 | — | (88 | ) | |||||||||||
Additions/reductions | 293 | (c) | (22 | ) | (d) | 1 | — | 272 | |||||||||||
Impairment loss | — | (112 | ) | (e) | — | (400 | ) | (e) | (512 | ) | |||||||||
Balance as of December 31, 2013 | |||||||||||||||||||
Goodwill | 3,430 | 2,311 | 1,787 | 400 | 7,928 | ||||||||||||||
Accumulated impairment losses (a) | — | (1,877 | ) | (1,664 | ) | (400 | ) | (3,941 | ) | ||||||||||
Total | $ | 3,430 | $ | 434 | $ | 123 | $ | — | $ | 3,987 |
(a) | Represents accumulated goodwill impairment charges since the adoption of ASC 350, “Intangibles – Goodwill and Other” in 2002. |
(b) | Represents the effects of foreign currency translations and reclassifications. |
(c) | Reflects $260 million for Orsa IP, the newly formed joint venture in Brazil and the adjustment of $54 million ($33 million after-tax) previously included as a trade name intangible asset in Deferred Charges and Other Assets on the balance sheet. |
(d) | Reflects a reduction from tax benefits generated by the deduction of goodwill amortization for tax purposes in Brazil. |
(e) | Represents the impairment of goodwill for the India Papers business and xpedx. |
In millions | Industrial Packaging | Printing Papers | Consumer Packaging | Distribution | Total | |||||||||||||
Balance as of January 1, 2012 | ||||||||||||||||||
Goodwill | $ | 1,157 | $ | 2,439 | $ | 1,779 | $ | 400 | $ | 5,775 | ||||||||
Accumulated impairment losses (a) | — | (1,765 | ) | (1,664 | ) | — | (3,429 | ) | ||||||||||
1,157 | 674 | 115 | 400 | 2,346 | ||||||||||||||
Reclassifications and other (b) | 1 | (40 | ) | 1 | — | (38 | ) | |||||||||||
Additions/reductions | 2,007 | (c) | (3 | ) | (d) | 3 | (e) | — | 2,007 | |||||||||
Balance as of December 31, 2012 | ||||||||||||||||||
Goodwill | 3,165 | 2,396 | 1,783 | 400 | 7,744 | |||||||||||||
Accumulated impairment losses (a) | — | (1,765 | ) | (1,664 | ) | — | (3,429 | ) | ||||||||||
Total | $ | 3,165 | $ | 631 | $ | 119 | $ | 400 | $ | 4,315 |
(a) | Represents accumulated goodwill impairment charges since the adoption of ASC 350, “Intangibles – Goodwill and Other” in 2002. |
(b) | Represents the effects of foreign currency translations and reclassifications. |
(c) | Reflects the acquisition of Temple-Inland, net of amounts written off related to the divestiture of two Temple-Inland mills (Ontario, California and New Johnsonville, Tennessee) and one International Paper mill (Oxnard, (Hueneme), California). Also excludes the goodwill for Building Products which was reclassified to Businesses Held for Sale. |
(d) | Reflects an increase related to a purchase price adjustment of Andhra Pradesh Paper Mills in India partially offset by a reduction from tax benefits generated by the deduction of goodwill amortization for tax purposes in Brazil. |
(e) | Represents the impact of the change in estimate of the contributed land in the Shandong IP & Sun Food Packaging Co., Ltd. joint venture in China entered into in 2011. |
2013 | 2012 | ||||||||||||
In millions at December 31 | Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | |||||||||
Customer relationships and lists | $ | 602 | $ | 139 | $ | 644 | $ | 112 | |||||
Non-compete agreements | 76 | 46 | 83 | 30 | |||||||||
Tradenames, patents and trademarks | 67 | (a) | 33 | 144 | 16 | ||||||||
Land and water rights | 76 | 5 | 87 | 6 | |||||||||
Fuel and power agreements | 7 | 2 | 17 | 12 | |||||||||
Software | 17 | 15 | 22 | 19 | |||||||||
Other | 75 | 32 | 83 | 19 | |||||||||
Total | $ | 920 | $ | 272 | $ | 1,080 | $ | 214 |
(a) | Includes $15 million recorded to write-off a tradename intangible asset of the Company's India Papers business. This amount is included in Impairment of goodwill and other intangibles in the accompanying consolidated statement of operations. |
In millions | 2013 | 2012 | 2011 | ||||||
Amortization expense related to intangible assets | $ | 87 | $ | 58 | $ | 32 |
In millions | 2013 | 2012 | 2011 | ||||||
Earnings (loss) | |||||||||
U.S. | $ | 394 | $ | 478 | $ | 874 | |||
Non-U.S. | 455 | 546 | 584 | ||||||
Earnings (loss) from continuing operations before income taxes and equity earnings | $ | 849 | $ | 1,024 | $ | 1,458 |
In millions | 2013 | 2012 | 2011 | ||||||
Current tax provision (benefit) | |||||||||
U.S. federal | $ | (697 | ) | $ | 14 | $ | (78 | ) | |
U.S. state and local | (95 | ) | 11 | (19 | ) | ||||
Non-U.S. | 123 | 102 | 91 | ||||||
$ | (669 | ) | $ | 127 | $ | (6 | ) | ||
Deferred tax provision (benefit) | |||||||||
U.S. federal | $ | 186 | $ | 226 | $ | 207 | |||
U.S. state and local | (21 | ) | 6 | 46 | |||||
Non-U.S. | (19 | ) | (28 | ) | 64 | ||||
$ | 146 | $ | 204 | $ | 317 | ||||
Income tax provision | $ | (523 | ) | $ | 331 | $ | 311 |
In millions | 2013 | 2012 | 2011 | ||||||
Earnings (loss) from continuing operations before income taxes and equity earnings | $ | 849 | $ | 1,024 | $ | 1,458 | |||
Statutory U.S. income tax rate | 35 | % | 35 | % | 35 | % | |||
Tax expense (benefit) using statutory U.S. income tax rate | 297 | 358 | 510 | ||||||
State and local income taxes | (4 | ) | 11 | 16 | |||||
Tax rate and permanent differences on non-U.S. earnings | (90 | ) | (116 | ) | (34 | ) | |||
Net U.S. tax on non-U.S. dividends | (15 | ) | 48 | 23 | |||||
Tax benefit on manufacturing activities | (27 | ) | (15 | ) | (8 | ) | |||
Non-deductible business expenses | 4 | 7 | 6 | ||||||
Non-deductible goodwill | 147 | 34 | — | ||||||
Tax Audits | (770 | ) | — | — | |||||
Sales of non-strategic businesses | — | — | (195 | ) | |||||
Retirement plan dividends | (5 | ) | (5 | ) | (5 | ) | |||
Tax basis adjustments | (33 | ) | — | — | |||||
Tax credits | (23 | ) | — | (7 | ) | ||||
Medicare subsidy | — | 5 | — | ||||||
Other, net | (4 | ) | 4 | 5 | |||||
Income tax provision | $ | (523 | ) | $ | 331 | $ | 311 | ||
Effective income tax rate | (62 | )% | 32 | % | 21 | % |
In millions | 2013 | 2012 | ||||
Deferred income tax assets: | ||||||
Postretirement benefit accruals | $ | 193 | $ | 229 | ||
Pension obligations | 725 | 1,620 | ||||
Alternative minimum and other tax credits | 515 | 752 | ||||
Net operating loss carryforwards | 610 | 579 | ||||
Compensation reserves | 281 | 242 | ||||
Other | 284 | 406 | ||||
Gross deferred income tax assets | 2,608 | 3,828 | ||||
Less: valuation allowance | (413 | ) | (400 | ) | ||
Net deferred income tax asset | $ | 2,195 | $ | 3,428 | ||
Deferred income tax liabilities: | ||||||
Intangibles | $ | (304 | ) | $ | (378 | ) |
Plants, properties and equipment | (2,919 | ) | (3,126 | ) | ||
Forestlands and related installment sales | (2,307 | ) | (2,511 | ) | ||
Gross deferred income tax liabilities | $ | (5,530 | ) | $ | (6,015 | ) |
Net deferred income tax liability | $ | (3,335 | ) | $ | (2,587 | ) |
In millions | 2013 | 2012 | 2011 | ||||||
Balance at January 1 | $ | (972 | ) | $ | (857 | ) | $ | (199 | ) |
(Additions) reductions based on tax positions related to current year | (22 | ) | 12 | (2 | ) | ||||
Additions for tax positions of prior years | (29 | ) | (140 | ) | (719 | ) | |||
Reductions for tax positions of prior years | 824 | 6 | 29 | ||||||
Settlements | 26 | 2 | 2 | ||||||
Expiration of statutes of limitations | 11 | 7 | 25 | ||||||
Currency translation adjustment | 1 | (2 | ) | 7 | |||||
Balance at December 31 | $ | (161 | ) | $ | (972 | ) | $ | (857 | ) |
In millions | 2013 | 2012 | 2011 | ||||||
Special items | $ | (151 | ) | $ | (104 | ) | $ | (293 | ) |
Tax-related adjustments: | |||||||||
Internal restructurings | (4 | ) | 14 | 24 | |||||
India deal costs | — | — | 9 | ||||||
IP UK valuation allowance release | — | — | (13 | ) | |||||
Settlement of tax audits and legislative changes | (770 | ) | — | 5 | |||||
Medicare D deferred income tax write-off | — | 5 | — | ||||||
Other tax adjustments | 1 | — | 2 | ||||||
Income tax provision (benefit) related to special items | $ | (924 | ) | $ | (85 | ) | $ | (266 | ) |
In millions | 2014 Through 2023 | 2024 Through 2033 | Indefinite | Total | ||||||||
U.S. federal and non-U.S. NOLs | $ | 21 | $ | 3 | $ | 400 | $ | 424 | ||||
State taxing jurisdiction NOLs | 152 | 120 | — | 272 | ||||||||
U.S. federal, non- U.S. and state tax credit carryforwards | 117 | 31 | 454 | 602 | ||||||||
State capital loss carryforwards | 23 | — | — | 23 | ||||||||
Total | $ | 313 | $ | 154 | $ | 854 | $ | 1,321 |
In millions | 2014 | 2015 | 2016 | 2017 | 2018 | Thereafter | ||||||||||||
Lease obligations | $ | 171 | $ | 133 | $ | 97 | $ | 74 | $ | 59 | $ | 162 | ||||||
Purchase obligations (a) | 3,170 | 770 | 642 | 529 | 453 | 2,404 | ||||||||||||
Total | $ | 3,341 | $ | 903 | $ | 739 | $ | 603 | $ | 512 | $ | 2,566 |
(a) | Includes $3.3 billion relating to fiber supply agreements entered into at the time of the Company’s 2006 Transformation Plan forestland sales and in conjunction with the 2008 acquisition of Weyerhaeuser Company’s Containerboard, Packaging and Recycling business. |
In millions | 2013 | 2012 | 2011 | ||||||
Revenue (loss) (a) | $ | 45 | $ | 49 | $ | 49 | |||
Expense (a) | 79 | 90 | 79 | ||||||
Cash receipts (b) | 33 | 36 | 28 | ||||||
Cash payments (c) | 84 | 87 | 79 |
(a) | The net expense related to the Company’s interest in the Entities is included in Interest expense, net in the accompanying consolidated statement of operations, as International Paper has and intends to effect its legal right to offset as discussed above. |
(b) | The cash receipts are equity distributions from the Entities to International Paper. |
(c) | The semi-annual payments are related to interest on the associated debt obligations discussed above. |
In millions | 2013 | 2012 | 2011 | ||||||
Revenue (loss) (a) | $ | — | $ | — | $ | 2 | |||
Expense (b) | — | — | 3 | ||||||
Cash receipts (c) | — | 252 | 192 | ||||||
Cash payments (d) | — | 159 | 244 |
(a) | The revenue is included in Equity earnings (loss), net of tax in the accompanying consolidated statement of operations. |
(b) | The expense is included in Interest expense, net in the accompanying consolidated statement of operations. |
(c) | The cash receipts are equity distributions from the 2002 financing entities to International Paper and cash receipts from the maturity of the 2002 Monetized Notes. |
(d) | The cash payments include both interest and principal on the associated debt obligations. |
In millions | 2013 | 2012 | 2011 | ||||||
Revenue (loss) (a) | $ | 27 | $ | 28 | $ | — | |||
Expense (b) | 29 | 28 | — | ||||||
Cash receipts (c) | 8 | 12 | — | ||||||
Cash payments (d) | 21 | 22 | — |
(a) | The revenue is included in Interest expense, net in the accompanying consolidated statement of operations and includes approximately $19 million and $17 million for the years ended December 31, 2013 and 2012, respectively, of accretion income for the amortization of the purchase accounting adjustment of the Financial assets of special purpose entities. |
(b) | The expense is included in Interest expense, net in the accompanying consolidated statement of operations and includes $7 million and $6 million for the years ended December 31, 2013 and 2012, respectively, of accretion expense for the amortization of the purchase accounting adjustment on the Nonrecourse financial liabilities of special purpose entities. |
(c) | The cash receipts are interest received on the Financial assets of special purpose entities. |
(d) | The cash payments are interest paid on Nonrecourse financial liabilities of special purpose entities. |
In millions | 2013 | 2012 | 2011 | ||||||
Debt reductions (a) | $ | 574 | $ | 1,272 | $ | 129 | |||
Pre-tax early debt extinguishment costs (b) | 25 | 48 | 32 |
(a) | Reductions related to notes with interest rates ranging from 1.625% to 9.375% with original maturities from 2012 to 2041 for the years ended December 31, 2013, 2012 and 2011. |
(b) | Amounts are included in Restructuring and other charges in the accompanying consolidated statements of operations. |
In millions at December 31 | 2013 | 2012 | ||||
8.7% note – due 2038 | $ | 264 | $ | 263 | ||
9 3/8% note – due 2019 | 848 | 846 | ||||
7.95% debentures – due 2018 | 1,429 | 1,462 | ||||
7.5% note – due 2021 | 999 | 999 | ||||
7.4% debentures – due 2014 | — | 303 | ||||
7.3% notes – due 2039 | 721 | 721 | ||||
6 7/8% notes – due 2023 – 2029 | 130 | 130 | ||||
6.65% note – due 2037 | 4 | 4 | ||||
6.4% to 7.75% debentures due 2025 – 2027 | 142 | 142 | ||||
6 3/8% to 6 5/8% notes – due 2016 – 2018 | 364 | 373 | ||||
6.0% notes – due 2041 | 585 | 585 | ||||
5.25% to 5.5% notes – due 2014 – 2016 | 657 | 701 | ||||
4.75% notes – due 2022 | 899 | 899 | ||||
Floating rate notes – due 2013 – 2017 (a) | 269 | 314 | ||||
Environmental and industrial development bonds – due 2013 – 2035 (b) | 1,487 | 1,812 | ||||
Short-term notes (c) | 386 | 255 | ||||
Other (d) | 304 | 331 | ||||
Total (e) | 9,488 | 10,140 | ||||
Less: current maturities | 661 | 444 | ||||
Long-term debt | $ | 8,827 | $ | 9,696 |
(a) | The weighted average interest rate on these notes was 2.6% in 2013 and 2.6% in 2012. |
(b) | The weighted average interest rate on these bonds was 5.5% in 2013 and 5.6% in 2012. |
(c) | The weighted average interest rate was 2.8% in 2013 and 2.2% in 2012. Includes $93 million at December 31, 2013 and $29 million at December 31, 2012 related to non-U.S. denominated borrowings with a weighted average interest rate of 5.8% in 2013 and 5.6% in 2012. |
(d) | Includes $41 million at December 31, 2013 and $61 million at December 31, 2012, related to the unamortized gain on interest rate swap unwinds (see Note 14). |
(e) | The fair market value was approximately $10.7 billion at December 31, 2013 and $12.3 billion at December 31, 2012. |
In millions | December 31, 2013 | December 31, 2012 | |||
Derivatives in Cash Flow Hedging Relationships: | |||||
Foreign exchange contracts (Sell / Buy; denominated in sell notional): (a) | |||||
Brazilian real / U.S. dollar - Forward | 502 | — | |||
British pounds / Brazilian real - Forward | 17 | 13 | |||
European euro / Brazilian real - Forward | 27 | 13 | |||
European euro / Polish zloty - Forward | 252 | 149 | |||
U.S. dollar / Brazilian real - Forward | 290 | 238 | |||
U.S. dollar / Brazilian real - Zero-cost collar | 18 | 18 | |||
Derivatives in Fair Value Hedging Relationships: | |||||
Interest rate contracts (in USD) | 175 | — | |||
Derivatives Not Designated as Hedging Instruments: | |||||
Embedded derivative (in USD) | — | 150 | |||
Foreign exchange contracts (Sell / Buy; denominated in sell notional): | |||||
Indian rupee / U.S. dollar | 157 | 140 | |||
Thai baht / U.S. dollar | — | 261 | |||
U.S. dollar / Turkish lira | — | 56 | |||
Interest rate contracts (in USD) | — | 150 | (b) |
(a) | These contracts had maturities of three years or less as of December 31, 2013. |
(b) | Includes $150 million floating-to-fixed interest rate swap notional to offset the embedded derivative. |
Gain (Loss) Recognized in AOCI on Derivatives (Effective Portion) | |||||||||
In millions | 2013 | 2012 | 2011 | ||||||
Foreign exchange contracts | $ | — | $ | 16 | $ | (39 | ) | ||
Fuel oil contracts | — | — | 2 | ||||||
Natural gas contracts | — | (1 | ) | (6 | ) | ||||
Total | $ | — | $ | 15 | $ | (43 | ) |
Gain (Loss) Reclassified from AOCI into Income (Effective Portion) | Location of Gain (Loss) Reclassified from AOCI into Income (Effective Portion) | ||||||||||
In millions | 2013 | 2012 | 2011 | ||||||||
Derivatives in Cash Flow Hedging Relationships: | |||||||||||
Foreign exchange contracts | $ | 7 | $ | (15 | ) | $ | 8 | Cost of products sold | |||
Fuel oil contracts | — | — | 4 | Cost of products sold | |||||||
Natural gas contracts | — | (7 | ) | (20 | ) | Cost of products sold | |||||
Total | $ | 7 | $ | (22 | ) | $ | (8 | ) |
Gain (Loss) Recognized in Income | Location of Gain (Loss) in Consolidated Statement of Operations | |||||||||||||||
In millions | 2013 | 2012 | 2011 | |||||||||||||
Derivatives in Fair Value Hedging Relationships: | ||||||||||||||||
Interest rate contracts | $ | (1 | ) | $ | — | $ | (10 | ) | Interest expense, net | |||||||
Debt | 1 | — | 10 | Interest expense, net | ||||||||||||
Total | $ | — | $ | — | $ | — | ||||||||||
Derivatives Not Designated as Hedging Instruments: | ||||||||||||||||
Electricity Contracts | $ | 4 | $ | (4 | ) | $ | — | Cost of products sold | ||||||||
Embedded derivatives | (1 | ) | (4 | ) | (3 | ) | Interest expense, net | |||||||||
Foreign exchange contracts | (5 | ) | — | (14 | ) | (a) | Cost of products sold | |||||||||
Interest rate contracts | 21 | 22 | 3 | Interest expense, net | ||||||||||||
Total | $ | 19 | $ | 14 | $ | (14 | ) |
2013 | 2012 | |||||||||||||||||||||||
In millions | Issued | Terminated | Undesignated | Issued | Terminated | Undesignated | ||||||||||||||||||
Fourth Quarter | $ | 175 | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Total | $ | 175 | $ | — | $ | — | $ | — | $ | — | $ | — |
Assets | Liabilities | |||||||||||||||
In millions | December 31, 2013 | December 31, 2012 | December 31, 2013 | December 31, 2012 | ||||||||||||
Derivatives designated as hedging instruments | ||||||||||||||||
Foreign exchange contracts – cash flow | $ | 37 | (a) | $ | 7 | (c) | $ | 33 | (d) | $ | 21 | (f) | ||||
Interest rate contracts - fair value | — | — | 1 | (e) | — | |||||||||||
Total derivatives designated as hedging instruments | $ | 37 | $ | 7 | $ | 34 | $ | 21 | ||||||||
Derivatives not designated as hedging instruments | ||||||||||||||||
Electricity contract | $ | 2 | (b) | $ | — | $ | — | $ | 1 | (g) | ||||||
Embedded derivatives | — | 1 | (b) | — | — | |||||||||||
Foreign exchange contracts | — | 1 | (b) | — | — | |||||||||||
Interest rate contracts | — | — | — | 1 | (g) | |||||||||||
Total derivatives not designated as hedging instruments | $ | 2 | $ | 2 | $ | — | $ | 2 | ||||||||
Total derivatives | $ | 39 | $ | 9 | $ | 34 | $ | 23 |
(a) | Includes $23 million recorded in Other current assets and $14 million recorded in Deferred charges and other assets in the accompanying consolidated balance sheet. |
(b) | Included in Other current assets in the accompanying consolidated balance sheet. |
(c) | Includes $3 million recorded in Other current assets and $4 million recorded in Deferred charges and other assets in the accompanying consolidated balance sheet. |
(d) | Includes $24 million recorded in Other accrued liabilities and $9 million recorded in Other liabilities in the accompanying consolidated balance sheet. |
(e) | Included in Other liabilities in the accompanying consolidated balance sheet. |
(f) | Includes $20 million recorded in Other accrued liabilities and $1 million recorded in Other liabilities in the accompanying consolidated balance sheet. |
(g) | Included in Other accrued liabilities in the accompanying consolidated balance sheet. |
Common Stock | ||||
In thousands | Issued | Treasury | ||
Balance at January 1, 2011 | 438,871 | 1,234 | ||
Issuance of stock for various plans, net | 1 | (326 | ) | |
Repurchase of stock | — | 1,013 | ||
Balance at December 31, 2011 | 438,872 | 1,921 | ||
Issuance of stock for various plans, net | 1,022 | (2,994 | ) | |
Repurchase of stock | — | 1,086 | ||
Balance at December 31, 2012 | 439,894 | 13 | ||
Issuance of stock for various plans, net | 7,328 | (533 | ) | |
Repurchase of stock | — | 11,388 | ||
Balance at December 31, 2013 | 447,222 | 10,868 |
2013 | 2012 | |||||||||||
In millions | U.S. Plans | Non- U.S. Plans | U.S. Plans | Non- U.S. Plans | ||||||||
Change in projected benefit obligation: | ||||||||||||
Benefit obligation, January 1 | $ | 14,201 | $ | 223 | $ | 10,555 | $ | 183 | ||||
Service cost | 188 | 4 | 152 | 3 | ||||||||
Interest cost | 576 | 11 | 604 | 12 | ||||||||
Curtailments | (14 | ) | — | — | — | |||||||
Settlements | (5 | ) | (4 | ) | — | (3 | ) | |||||
Actuarial loss (gain) | (1,309 | ) | — | 1,923 | 30 | |||||||
Acquisitions | — | 3 | 1,749 | 3 | ||||||||
Plan amendments | — | — | 20 | — | ||||||||
Special termination benefits | 8 | — | — | — | ||||||||
Benefits paid | (742 | ) | (8 | ) | (802 | ) | (8 | ) | ||||
Effect of foreign currency exchange rate movements | — | (1 | ) | — | 3 | |||||||
Benefit obligation, December 31 | $ | 12,903 | $ | 228 | $ | 14,201 | $ | 223 | ||||
Change in plan assets: | ||||||||||||
Fair value of plan assets | $ | 10,111 | $ | 171 | $ | 8,185 | $ | 155 | ||||
Actual return on plan assets | 1,283 | 15 | 1,183 | 18 | ||||||||
Company contributions | 59 | 8 | 139 | 8 | ||||||||
Benefits paid | (742 | ) | (8 | ) | (802 | ) | (8 | ) | ||||
Settlements | (5 | ) | (4 | ) | — | (3 | ) | |||||
Acquisitions | — | — | 1,406 | — | ||||||||
Effect of foreign currency exchange rate movements | — | (1 | ) | — | 1 | |||||||
Fair value of plan assets, December 31 | $ | 10,706 | $ | 181 | $ | 10,111 | $ | 171 | ||||
Funded status, December 31 | $ | (2,197 | ) | $ | (47 | ) | $ | (4,090 | ) | $ | (52 | ) |
Amounts recognized in the consolidated balance sheet: | ||||||||||||
Non-current asset | $ | — | $ | 9 | $ | — | $ | 4 | ||||
Current liability | (46 | ) | (2 | ) | (32 | ) | (2 | ) | ||||
Non-current liability | (2,151 | ) | (54 | ) | (4,058 | ) | (54 | ) | ||||
$ | (2,197 | ) | $ | (47 | ) | $ | (4,090 | ) | $ | (52 | ) |
Amounts recognized in accumulated other comprehensive income under ASC 715 (pre-tax): | ||||||||||||
Prior service cost | $ | 107 | $ | — | $ | 144 | $ | — | ||||
Net actuarial loss | 3,285 | 29 | 5,640 | 34 | ||||||||
$ | 3,392 | $ | 29 | $ | 5,784 | $ | 34 |
In millions | U.S. Plans | Non- U.S. Plans | ||||
Current year actuarial (gain) loss | $ | (1,854 | ) | $ | (4 | ) |
Amortization of actuarial loss | (485 | ) | (1 | ) | ||
Current year prior service cost | — | — | ||||
Amortization of prior service cost | (34 | ) | — | |||
Curtailments | (19 | ) | — | |||
$ | (2,392 | ) | $ | (5 | ) |
2013 | 2012 | |||||||||||
In millions | U.S. Plans | Non-U.S. Plans | U.S. Plans | Non-U.S. Plans | ||||||||
Projected benefit obligation | $ | 12,903 | $ | 181 | $ | 14,201 | $ | 200 | ||||
Accumulated benefit obligation | 12,560 | 168 | 13,772 | 188 | ||||||||
Fair value of plan assets | 10,706 | 125 | 10,111 | 143 |
2013 | 2012 | 2011 | ||||||||||||||||
In millions | U.S. Plans | Non- U.S. Plans | U.S. Plans | Non- U.S. Plans | U.S. Plans | Non- U.S. Plans | ||||||||||||
Service cost | $ | 188 | $ | 4 | $ | 152 | $ | 3 | $ | 121 | $ | 2 | ||||||
Interest cost | 576 | 11 | 604 | 12 | 544 | 12 | ||||||||||||
Expected return on plan assets | (738 | ) | (11 | ) | (753 | ) | (12 | ) | (713 | ) | (12 | ) | ||||||
Actuarial loss / (gain) | 485 | 1 | 307 | — | 212 | — | ||||||||||||
Amortization of prior service cost | 34 | — | 32 | — | 31 | — | ||||||||||||
Settlement gain | — | — | — | — | — | (1 | ) | |||||||||||
Net periodic pension expense | $ | 545 | $ | 5 | $ | 342 | $ | 3 | $ | 195 | $ | 1 |
2013 | 2012 | 2011 | ||||||||||
U.S. Plans | Non- U.S. Plans | U.S. Plans | Non- U.S. Plans | U.S. Plans | Non- U.S. Plans | |||||||
Actuarial assumptions used to determine benefit obligations as of December 31: | ||||||||||||
Discount rate | 4.90 | % | 5.07 | % | 4.10 | % | 4.96 | % | 5.10 | % | 5.98 | % |
Rate of compensation increase | 3.75 | % | 4.13 | % | 3.75 | % | 3.17 | % | 3.75 | % | 3.12 | % |
Actuarial assumptions used to determine net periodic pension cost for years ended December 31: | ||||||||||||
Discount rate | 4.10 | % | 4.96 | % | 5.10 | % | 5.98 | % | 5.60 | % | 6.01 | % |
Expected long-term rate of return on plan assets (a) | 8.00 | % | 7.04 | % | 8.00 | % | 7.62 | % | 8.25 | % | 7.79 | % |
Rate of compensation increase | 3.75 | % | 3.17 | % | 3.75 | % | 3.12 | % | 3.75 | % | 3.07 | % |
(a) | Represents the expected rate of return for International Paper's qualified pension plan. The weighted average rate for the Temple-Inland Retirement Plan was 6.16% and 5.70% for 2013 and 2012, respectively. |
In millions | 2014 | ||
Expense/(Income): | |||
Discount rate | $ | 35 | |
Expected long-term rate of return on plan assets | 25 | ||
Rate of compensation increase | (5 | ) |
Asset Class | 2013 | 2012 | Target Allocations | ||
Equity accounts | 49 | % | 41 | % | 42% - 53% |
Fixed income accounts | 32 | % | 38 | % | 30% - 40% |
Real estate accounts | 10 | % | 10 | % | 6% - 12% |
Other | 9 | % | 11 | % | 3% - 15% |
Total | 100 | % | 100 | % |
Fair Value Measurement at December 31, 2013 | ||||||||||||
Asset Class | Total | Quoted Prices in Active Markets For Identical Assets (Level 1) | Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||
In millions | ||||||||||||
Equities – domestic | $ | 2,466 | $ | 1,175 | $ | 1,290 | $ | 1 | ||||
Equities – international | 2,313 | 1,470 | 843 | — | ||||||||
Corporate bonds | 1,248 | — | 1,248 | — | ||||||||
Government securities | 1,097 | — | 1,097 | — | ||||||||
Mortgage backed securities | 143 | — | 143 | — | ||||||||
Other fixed income | 74 | (1 | ) | 65 | 10 | |||||||
Commodities | 193 | — | 193 | — | ||||||||
Hedge funds | 831 | — | — | 831 | ||||||||
Private equity | 484 | — | — | 484 | ||||||||
Real estate | 1,038 | — | — | 1,038 | ||||||||
Derivatives | 313 | — | — | 313 | ||||||||
Cash and cash equivalents | 506 | (10 | ) | 516 | — | |||||||
Total Investments | $ | 10,706 | $ | 2,634 | $ | 5,395 | $ | 2,677 |
Fair Value Measurement at December 31, 2012 | ||||||||||||
Asset Class | Total | Quoted Prices in Active Markets For Identical Assets (Level 1) | Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||
In millions | ||||||||||||
Equities – domestic | $ | 2,171 | $ | 1,241 | $ | 927 | $ | 3 | ||||
Equities – international | 1,513 | 1,145 | 368 | — | ||||||||
Common collective funds – fixed income | 180 | — | 180 | — | ||||||||
Corporate bonds | 1,539 | — | 1,539 | — | ||||||||
Government securities | 1,593 | — | 1,593 | — | ||||||||
Mortgage backed securities | 127 | — | 127 | — | ||||||||
Other fixed income | 75 | — | 67 | 8 | ||||||||
Commodities | 216 | — | 216 | — | ||||||||
Hedge funds | 492 | — | — | 492 | ||||||||
Private equity | 503 | — | — | 503 | ||||||||
Real estate | 1,037 | — | — | 1,037 | ||||||||
Derivatives | 354 | — | — | 354 | ||||||||
Cash and cash equivalents | 311 | (15 | ) | 326 | — | |||||||
Total Investments | $ | 10,111 | $ | 2,371 | $ | 5,343 | $ | 2,397 |
In millions | Equities- Domestic | Other Fixed Income | Hedge Funds | Private Equity | Real Estate | Derivatives | Total | ||||||||||||||
Beginning balance at December 31, 2012 | $ | 3 | $ | 8 | $ | 492 | $ | 503 | $ | 1,037 | $ | 354 | $ | 2,397 | |||||||
Actual return on plan assets: | |||||||||||||||||||||
Relating to assets still held at the reporting date | (1 | ) | 1 | 11 | 41 | 62 | (20 | ) | 94 | ||||||||||||
Relating to assets sold during the period | 2 | — | 47 | 1 | 32 | 137 | 219 | ||||||||||||||
Purchases, sales and settlements | (3 | ) | — | 281 | (61 | ) | (93 | ) | (158 | ) | (34 | ) | |||||||||
Transfers in and/or out of Level 3 | — | 1 | — | — | — | — | 1 | ||||||||||||||
Ending balance at December 31, 2013 | $ | 1 | $ | 10 | $ | 831 | $ | 484 | $ | 1,038 | $ | 313 | $ | 2,677 |
In millions | |||
2014 | $ | 767 | |
2015 | 759 | ||
2016 | 767 | ||
2017 | 779 | ||
2018 | 791 | ||
2019 – 2023 | 4,165 |
In millions | 2013 | 2012 | 2011 | |||||||||||||||
U.S. Plans | Non- U.S. Plans | U.S. Plans | Non- U.S. Plans | U.S. Plans | Non- U.S. Plans | |||||||||||||
Service cost | $ | 2 | $ | 2 | $ | 3 | $ | — | $ | 2 | $ | — | ||||||
Interest cost | 14 | 5 | 20 | 1 | 21 | 2 | ||||||||||||
Actuarial loss | 7 | — | 10 | — | 9 | — | ||||||||||||
Amortization of prior service credits | (24 | ) | — | (30 | ) | — | (25 | ) | — | |||||||||
Curtailment gain | — | — | (7 | ) | — | — | — | |||||||||||
Net postretirement (benefit) expense (a) | $ | (1 | ) | $ | 7 | $ | (4 | ) | $ | 1 | $ | 7 | $ | 2 |
2013 | 2012 | 2011 | |||||||||||
U.S. Plans | Non- U.S. Plans | U.S. Plans | Non- U.S. Plans | U.S. Plans | Non- U.S. Plans | ||||||||
Discount rate | 3.70 | % | 8.43 | % | 4.40 | % | (a) | 7.73 | % | 5.30 | % | 7.72 | % |
(a) | Represents the weighted average rate for the IP plan for 2012 due to the remeasurement. The weighted average rate used for Temple-Inland in 2012 was 4.19%. |
2013 | 2012 | |||||||
U.S. Plans | Non- U.S. Plans | U.S. Plans | Non- U.S. Plans | |||||
Discount rate | 4.50 | % | 11.94 | % | 3.70 | % | 8.43 | % |
Health care cost trend rate assumed for next year | 7.00 | % | 11.43 | % | 7.50 | % | 7.18 | % |
Rate that the cost trend rate gradually declines to | 5.00 | % | 6.12 | % | 5.00 | % | 7.18 | % |
Year that the rate reaches the rate it is assumed to remain | 2017 | 2024 | 2017 | 2013 |
In millions | 2013 | 2012 | ||||||||||
U.S. Plans | Non- U.S. Plans | U.S. Plans | Non- U.S. Plans | |||||||||
Change in projected benefit obligation: | ||||||||||||
Benefit obligation, January 1 | $ | 449 | $ | 22 | $ | 425 | $ | 23 | ||||
Service cost | 2 | 2 | 3 | — | ||||||||
Interest cost | 14 | 5 | 20 | 1 | ||||||||
Participants’ contributions | 19 | — | 34 | 1 | ||||||||
Actuarial (gain) loss | (80 | ) | 12 | 44 | 10 | |||||||
Acquisitions | — | 38 | 108 | — | ||||||||
Plan amendments | — | — | (63 | ) | — | |||||||
Benefits paid | (82 | ) | (1 | ) | (107 | ) | (2 | ) | ||||
Less: Federal subsidy | 2 | — | 7 | — | ||||||||
Restructuring | — | — | (17 | ) | — | |||||||
Curtailment | (2 | ) | — | (5 | ) | (11 | ) | |||||
Currency Impact | — | (6 | ) | — | — | |||||||
Benefit obligation, December 31 | $ | 322 | $ | 72 | $ | 449 | $ | 22 | ||||
Change in plan assets: | ||||||||||||
Fair value of plan assets, January 1 | $ | — | $ | — | $ | — | $ | — | ||||
Company contributions | 63 | 1 | 73 | 1 | ||||||||
Participants’ contributions | 19 | — | 34 | 1 | ||||||||
Benefits paid | (82 | ) | (1 | ) | (107 | ) | (2 | ) | ||||
Fair value of plan assets, December 31 | $ | — | $ | — | $ | — | $ | — | ||||
Funded status, December 31 | $ | (322 | ) | $ | (72 | ) | $ | (449 | ) | $ | (22 | ) |
Amounts recognized in the consolidated balance sheet under ASC 715: | ||||||||||||
Current liability | $ | (39 | ) | $ | (2 | ) | $ | (59 | ) | $ | (2 | ) |
Non-current liability | (283 | ) | (70 | ) | (390 | ) | (20 | ) | ||||
$ | (322 | ) | $ | (72 | ) | $ | (449 | ) | $ | (22 | ) | |
Amounts recognized in accumulated other comprehensive income under ASC 715 (pre-tax): | ||||||||||||
Net actuarial loss (gain) | $ | 31 | $ | 11 | $ | 115 | $ | (1 | ) | |||
Prior service credit | (35 | ) | — | (65 | ) | — | ||||||
$ | (4 | ) | $ | 11 | $ | 50 | $ | (1 | ) |
In millions | U.S. Plans | Non- U.S. Plans | ||||
Curtailment | $ | 5 | $ | — | ||
Current year actuarial gain | (76 | ) | — | |||
Amortization of actuarial (loss) gain | (7 | ) | 12 | |||
Amortization of prior service credit | 24 | — | ||||
$ | (54 | ) | $ | 12 |
In millions | Benefit Payments | Subsidy Receipts | Benefit Payments | ||||||
U.S. Plans | U.S. Plans | Non- U.S. Plans | |||||||
2014 | $ | 42 | $ | 3 | $ | 2 | |||
2015 | 35 | 3 | 3 | ||||||
2016 | 32 | 3 | 3 | ||||||
2017 | 30 | 3 | 4 | ||||||
2018 | 28 | 3 | 4 | ||||||
2019 – 2023 | 120 | 11 | 31 |
Options (a,b) | Weighted Average Exercise Price | Weighted Average Remaining Life (years) | Aggregate Intrinsic Value (thousands) | ||||||
Outstanding at December 31, 2010 | 18,245,253 | $37.73 | 2.30 | $— | |||||
Exercised | (1,850 | ) | 32.54 | ||||||
Forfeited | (21,070 | ) | 35.21 | ||||||
Expired | (2,665,547 | ) | 35.45 | ||||||
Outstanding at December 31, 2011 | 15,556,786 | 38.13 | 1.55 | — | |||||
Granted | 2,513 | 35.94 | |||||||
Exercised | (3,200,642 | ) | 33.62 | ||||||
Expired | (3,222,597 | ) | 40.71 | ||||||
Outstanding at December 31, 2012 | 9,136,060 | 38.79 | 1.15 | 1,077 | |||||
Granted | 4,744 | 48.11 | |||||||
Exercised | (7,317,825 | ) | 38.57 | ||||||
Expired | (70,190 | ) | 37.15 | ||||||
Outstanding at December 31, 2013 | 1,752,789 | $39.80 | 0.67 | $16,175 |
(a) | The table does not include Continuity Award tandem stock options described below. No fair market value is assigned to these options under ASC 718. The tandem restricted shares accompanying these options are expensed over their vesting period. |
(b) | The table includes options outstanding under an acquired company plan under which options may no longer be granted. |
Twelve Months Ended December 31, 2013 | |
Expected volatility | 25.30%-62.58% |
Risk-free interest rate | 0.13% - 0.99% |
Share/Units | Weighted Average Grant Date Fair Value | ||||
Outstanding at December 31, 2010 | 6,812,594 | $23.31 | |||
Granted | 4,314,376 | 28.04 | |||
Shares issued | (2,565,971 | ) | 32.43 | ||
Forfeited | (500,940 | ) | 25.07 | ||
Outstanding at December 31, 2011 | 8,060,059 | 22.83 | |||
Granted | 3,641,911 | 31.57 | |||
Shares issued | (2,871,367 | ) | 16.83 | ||
Forfeited | (169,748 | ) | 28.89 | ||
Outstanding at December 31, 2012 | 8,660,855 | 28.37 | |||
Granted | 3,148,445 | 40.76 | |||
Shares issued (a) | (3,262,760 | ) | 32.48 | ||
Forfeited | (429,051 | ) | 34.58 | ||
Outstanding at December 31, 2013 | 8,117,489 | $31.20 |
(a) | Includes 356,542 units related to retirements or terminations that are held for payout until the end of the performance period. |
Shares | Weighted Average Grant Date Fair Value | ||||
Outstanding at December 31, 2010 | 167,500 | $26.95 | |||
Granted | 21,500 | 27.01 | |||
Shares issued | (55,083 | ) | 24.84 | ||
Forfeited | (5,000 | ) | 26.78 | ||
Outstanding at December 31, 2011 | 128,917 | 27.86 | |||
Granted | 88,715 | 31.91 | |||
Shares issued | (61,083 | ) | 27.13 | ||
Forfeited | (5,000 | ) | 28.91 | ||
Outstanding at December 31, 2012 | 151,549 | 30.49 | |||
Granted | 67,100 | 44.41 | |||
Shares issued | (88,775 | ) | 32.30 | ||
Forfeited | (17,500 | ) | 37.75 | ||
Outstanding at December 31, 2013 | 112,374 | $36.24 |
In millions | 2013 | 2012 | 2011 | ||||||
Total stock-based compensation expense (included in selling and administrative expense) | $ | 137 | $ | 116 | $ | 84 | |||
Income tax benefits related to stock-based compensation | 74 | 48 | 34 |
In millions | 2013 | 2012 | 2011 | ||||||||
Industrial Packaging | $ | 14,810 | $ | 13,280 | $ | 10,430 | |||||
Printing Papers | 6,205 | 6,230 | 6,215 | ||||||||
Consumer Packaging | 3,435 | 3,170 | 3,710 | ||||||||
Distribution | 5,650 | 6,040 | 6,630 | ||||||||
Corporate and Intersegment Sales | (1,020 | ) | (887 | ) | (951 | ) | |||||
Net Sales | $ | 29,080 | $ | 27,833 | $ | 26,034 |
In millions | 2013 | 2012 | 2011 | ||||||||
Industrial Packaging | $ | 1,801 | $ | 1,066 | $ | 1,147 | |||||
Printing Papers | 271 | 599 | 872 | ||||||||
Consumer Packaging | 161 | 268 | 163 | ||||||||
Distribution | (389 | ) | 22 | 34 | |||||||
Operating Profit | 1,844 | 1,955 | 2,216 | ||||||||
Interest expense, net | (612 | ) | (672 | ) | (541 | ) | |||||
Noncontrolling interests / equity earnings adjustment (a) | 1 | — | 10 | ||||||||
Corporate items, net | (29 | ) | (51 | ) | (102 | ) | |||||
Restructuring and other charges | (32 | ) | (51 | ) | (82 | ) | |||||
Net gains (losses) on sales and impairments of businesses | — | 2 | — | ||||||||
Non-operating pension expense | (323 | ) | (159 | ) | (43 | ) | |||||
Earnings (Loss) From Continuing Operations Before Income Taxes and Equity Earnings | $ | 849 | $ | 1,024 | $ | 1,458 |
In millions | 2013 | 2012 | 2011 | ||||||||
Industrial Packaging | $ | (2 | ) | $ | 14 | $ | 20 | ||||
Printing Papers | 118 | — | (24 | ) | |||||||
Consumer Packaging | 45 | — | 2 | ||||||||
Distribution | 32 | 44 | 49 | ||||||||
Corporate | 17 | 51 | 55 | ||||||||
Restructuring and Other Charges | $ | 210 | $ | 109 | $ | 102 |
In millions | 2013 | 2012 | |||||
Industrial Packaging | $ | 15,083 | $ | 13,353 | |||
Printing Papers | 6,574 | 7,198 | |||||
Consumer Packaging | 3,222 | 3,123 | |||||
Distribution | 1,186 | 1,639 | |||||
Corporate and other (b) | 5,463 | 6,840 | |||||
Assets | $ | 31,528 | $ | 32,153 |
In millions | 2013 | 2012 | 2011 | ||||||||
Industrial Packaging | $ | 629 | $ | 565 | $ | 426 | |||||
Printing Papers | 294 | 449 | 364 | ||||||||
Consumer Packaging | 208 | 296 | 310 | ||||||||
Distribution | 9 | 10 | 8 | ||||||||
Subtotal | 1,140 | 1,320 | 1,108 | ||||||||
Corporate and other | 58 | 63 | 51 | ||||||||
Total from Continuing Operations | $ | 1,198 | $ | 1,383 | $ | 1,159 |
In millions | 2013 | 2012 | 2011 | ||||||||
Industrial Packaging | $ | 805 | $ | 755 | $ | 513 | |||||
Printing Papers | 446 | 450 | 486 | ||||||||
Consumer Packaging | 206 | 196 | 217 | ||||||||
Distribution | 16 | 13 | 14 | ||||||||
Corporate | 74 | 72 | 102 | ||||||||
Depreciation and Amortization | $ | 1,547 | $ | 1,486 | $ | 1,332 |
In millions | 2013 | 2012 | 2011 | ||||||||
Industrial Packaging | $ | 14,729 | $ | 13,223 | $ | 10,376 | |||||
Printing Papers | 5,443 | 5,483 | 5,510 | ||||||||
Consumer Packaging | 3,311 | 3,146 | 3,577 | ||||||||
Distribution | 5,597 | 5,981 | 6,571 | ||||||||
Net Sales | $ | 29,080 | $ | 27,833 | $ | 26,034 |
In millions | 2013 | 2012 | 2011 | ||||||||
United States (e) | $ | 21,854 | $ | 21,523 | $ | 19,434 | |||||
EMEA | 3,284 | 2,935 | 3,183 | ||||||||
Pacific Rim and Asia | 2,112 | 1,816 | 1,807 | ||||||||
Americas, other than U.S. | 1,830 | 1,559 | 1,610 | ||||||||
Net Sales | $ | 29,080 | $ | 27,833 | $ | 26,034 |
In millions | 2013 | 2012 | |||||
United States | $ | 10,056 | $ | 10,484 | |||
EMEA | 1,126 | 1,022 | |||||
Pacific Rim and Asia | 946 | 982 | |||||
Americas, other than U.S. | 1,772 | 1,773 | |||||
Corporate | 329 | 310 | |||||
Long-Lived Assets | $ | 14,229 | $ | 14,571 |
(a) | Operating profits for industry segments include each segment’s percentage share of the profits of subsidiaries included in that segment that are less than wholly-owned. The pre-tax noncontrolling interests and equity earnings for these subsidiaries is added here to present consolidated earnings from continuing operations before income taxes and equity earnings. |
(b) | Includes corporate assets and assets of businesses held for sale. |
(c) | Excludes accelerated depreciation related to closure of mills. |
(d) | Net sales are attributed to countries based on the location of the seller. |
(e) | Export sales to unaffiliated customers were $2.4 billion in 2013, $2.2 billion in 2012 and $2.1 billion in 2011. |
(f) | Long-Lived Assets includes Forestlands and Plants, Properties and Equipment, net. |
In millions, except per share amounts and stock prices | 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | Year | |||||||||||||||
2013 | ||||||||||||||||||||
Net sales | $ | 7,090 | $ | 7,335 | $ | 7,406 | $ | 7,249 | $ | 29,080 | ||||||||||
Gross margin (a) | 1,870 | 1,921 | 2,093 | 1,973 | 7,857 | |||||||||||||||
Earnings (loss) from continuing operations before income taxes and equity earnings | 230 | (b) | 363 | (d) | 411 | (e) | (155 | ) | (g) | 849 | (b,d,e,g) | |||||||||
Gain (loss) from discontinued operations | 26 | 24 | (10 | ) | 5 | 45 | ||||||||||||||
Net earnings (loss) attributable to International Paper Company | 318 | (b,c) | 259 | (d) | 382 | (e,f) | 436 | (g,h,i) | 1,395 | (b-i) | ||||||||||
Basic earnings (loss) per share attributable to International Paper Company common shareholders: | ||||||||||||||||||||
Earnings (loss) from continuing operations | $ | 0.66 | (b) | $ | 0.53 | (d) | $ | 0.88 | (e) | $ | 0.98 | (g) | $ | 3.05 | (b,d,e,g) | |||||
Gain (loss) from discontinued operations | 0.06 | 0.05 | (0.02 | ) | 0.01 | 0.10 | ||||||||||||||
Net earnings (loss) | 0.72 | (b,c) | 0.58 | (d) | 0.86 | (e,f) | 0.99 | (g,h,i) | 3.15 | (b-i) | ||||||||||
Diluted earnings (loss) per share attributable to International Paper Company common shareholders: | ||||||||||||||||||||
Earnings (loss) from continuing operations | 0.65 | (b) | 0.52 | (d) | 0.87 | (e) | 0.97 | (g) | 3.01 | (b,d,e,g) | ||||||||||
Gain (loss) from discontinued operations | 0.06 | 0.05 | (0.02 | ) | 0.01 | 0.10 | ||||||||||||||
Net earnings (loss) | 0.71 | (b,c) | 0.57 | (d) | 0.85 | (e,f) | 0.98 | (g,h, i) | 3.11 | (b-i) | ||||||||||
Dividends per share of common stock | 0.3000 | 0.3000 | 0.3000 | 0.3500 | 1.2500 | |||||||||||||||
Common stock prices | ||||||||||||||||||||
High | $ | 47.25 | $ | 49.10 | $ | 50.33 | $ | 49.52 | $ | 50.33 | ||||||||||
Low | 39.47 | 42.36 | 43.95 | 42.92 | 39.47 | |||||||||||||||
2012 | ||||||||||||||||||||
Net sales | $ | 6,655 | $ | 7,077 | $ | 7,026 | $ | 7,075 | $ | 27,833 | ||||||||||
Gross margin (a) | 1,671 | 1,807 | 1,886 | 1,882 | 7,246 | |||||||||||||||
Earnings (loss) from continuing operations before income taxes and equity earnings | 213 | (j) | 204 | (k) | 320 | (l) | 287 | (m) | 1,024 | (j-m) | ||||||||||
Gain from discontinued operations | 5 | 16 | 14 | 10 | 45 | |||||||||||||||
Net earnings (loss) attributable to International Paper Company | 188 | (j) | 134 | (k) | 237 | (l) | 235 | (m,n) | 794 | (j-n) | ||||||||||
Basic earnings (loss) per share attributable to International Paper Company common shareholders: | ||||||||||||||||||||
Earnings (loss) from continuing operations | $ | 0.42 | (j) | $ | 0.27 | (k) | $ | 0.51 | (l) | $ | 0.52 | (m) | $ | 1.72 | (j-m) | |||||
Gain from discontinued operations | 0.01 | 0.04 | 0.03 | 0.02 | 0.10 | |||||||||||||||
Net earnings (loss) | 0.43 | (j) | 0.31 | (k) | 0.54 | (l) | 0.54 | (m,n) | 1.82 | (j-n) | ||||||||||
Diluted earnings (loss) per share attributable to International Paper Company common shareholders: | ||||||||||||||||||||
Earnings (loss) from continuing operations | 0.42 | (j) | 0.27 | (k) | 0.51 | (l) | 0.51 | (m) | 1.70 | (j-m) | ||||||||||
Gain from discontinued operations | 0.01 | 0.04 | 0.03 | 0.02 | 0.10 | |||||||||||||||
Net earnings (loss) | 0.43 | (j) | 0.31 | (k) | 0.54 | (l) | 0.53 | (m,n) | 1.80 | (j-n) | ||||||||||
Dividends per share of common stock | 0.2625 | 0.2625 | 0.2625 | 0.3000 | 1.0875 | |||||||||||||||
Common stock prices | ||||||||||||||||||||
High | $ | 36.50 | $ | 35.59 | $ | 37.25 | $ | 39.88 | $ | 39.88 | ||||||||||
Low | 29.45 | 27.29 | 28.29 | 32.95 | 27.29 |
(a) | Gross margin represents net sales less cost of products sold, excluding depreciation, amortization and cost of timber harvested. |
(b) | Includes a pre-tax charge of $12 million ($8 million after taxes) for integration costs associated with the acquisition of Temple-Inland, a pre-tax charge of $44 million ($27 million after taxes) for costs associated with the permanent shutdown of a paper machine at our Augusta mill, a pre-tax charge of $6 million ($4 million after taxes) for debt extinguishment costs, a pre-tax charge of $7 million ($4 million after taxes) for costs associated with the restructuring of our xpedx operations, interest income of $6 million ($4 million after taxes) related to the closing of a U.S. federal income tax audit, and pre-tax charges of $2 million ($1 million after taxes) for other items. |
(c) | Includes a tax benefit of $93 million associated with the closing of a U.S. federal income tax audit and a net tax expense of $2 million related to internal restructurings. In addition, the first quarter tax rate includes a benefit of approximately $35 million related to the enactment into law of The American Taxpayer Relief Act of 2012 in January 2013. |
(d) | Includes a pre-tax charge of $6 million ($4 million after taxes) for an environmental reserve related to the Company's property in Cass Lake, Minnesota, a pre-tax charge of $14 million ($8 million after taxes) for integration costs associated with the acquisition of Temple-Inland, a pre-tax charge of $9 million ($5 million after taxes) to adjust the value of two Company airplanes to market value, a pre-tax gain of $30 million ($19 million after taxes) for insurance reimbursements related to the 2012 Guaranty Bank legal settlement, a pre-tax charge of $3 million ($2 million after taxes) for debt extinguishment costs, a pre-tax charge of $17 million ($10 million after taxes) for costs associated with the restructuring of our xpedx operations, a pre-tax charge of $3 million ($2 million after taxes) for costs associated with the spin-off of the xpedx operations, a gain of $13 million (before and after taxes) related to a bargain purchase adjustment on the first-quarter 2013 acquisition of a majority share of our operations in Turkey, and charges of $3 million (before and after taxes) for other items. |
(e) | Includes a pre-tax charge of $24 million ($15 million after taxes) for integration costs associated with the acquisition of Temple-Inland, a pre-tax charge of $51 million ($31 million after taxes) for costs associated with the announced shutdown of our Courtland mill, a pre-tax charge of $15 million ($9 million after taxes) for debt extinguishment costs, a pre-tax charge of $6 million ($4 million after taxes for costs associated with the restructuring of our xpedx operations, a pre-tax charge of $11 million ($7 million after taxes) for costs associated with the spin-off of the xpedx operations, a pre-tax gain of $9 million ($6 million after taxes) associated with the sale of the Bellevue box plant facility which was closed in 2010, a pre-tax charge of $1 million ($0 million after taxes) for costs associated with the divestiture of three containerboard mills in 2012 and charges of $2 million (before and after taxes) for other items. |
(f) | Includes a tax benefit of $31 million for an income tax reserve release. In addition, the third quarter tax rate includes a $30 million benefit related to the adjustment of the tax basis in certain of the Company's fixed assets. |
(g) | Includes a pre-tax charge of $12 million ($7 million after taxes) for integration costs associated with the acquisition of Temple-Inland, a pre-tax charge of $67 million ($41 million after taxes) for costs associated with the announced shutdown of our Courtland mill, a pre-tax charge of $8 million ($5 million after taxes) for costs associated with the spin-off of the xpedx operations, a pre-tax charge of $4 million ($3 million after taxes) for costs associated with the restructuring of the Asia Box operations, a pre-tax charge of $400 million ($366 million after taxes) for the impairment of goodwill in the Company's xpedx business, a pre-tax charge of $127 million ($122 million after taxes) for the impairment of goodwill and a trade name intangible asset of the Company's India Papers business, a pre- tax charge of $2 million ($1 million after taxes) for an adjustment associated with the Company's divestiture of the Shorewood operations, and a net pre-tax loss of $0 million ($1 million after taxes) for other items. |
(h) | Includes a tax benefit of $651 million associated with the closing of a U.S. federal tax audit and a net tax benefit of $3 million for other items. |
(i) | Includes pre-tax noncontrolling interest income of $4 million ($3 million after taxes) associated with the write-off of a trade name intangible asset in our India Papers business. |
(l) | Includes a pre-tax charge of $9 million ($5 million after taxes) for an inventory write-off, severance and other charges related to the restructuring of the Company's xpedx operations, a pre-tax charge of $58 million ($34 million after taxes) for integration costs associated with the acquisition of Temple-Inland, a pre-tax charge of $13 million ($8 million after taxes) for debt extinguishment costs, a pre-tax charge of $16 million ($11 million after taxes) for costs associated with the restructuring of the Company's Packaging business in EMEA, a pre-tax charge of $19 million ($49 million after taxes) for costs associated with the containerboard mill divestitures and a pre-tax gain of $5 million ($0 million after taxes) for other items. |
• | pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; |
• | provide reasonable assurance that transactions are recorded as necessary to allow for the preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; |
• | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our consolidated financial statements; and |
• | provide reasonable assurance as to the detection of fraud. |
(1) | Financial Statements – See Item 8. Financial Statements and Supplementary Data. |
(2) | Financial Statement Schedules – The following additional financial data should be read in conjunction with the consolidated financial |
Consolidated Schedule: II-Valuation and Qualifying Accounts. | 101 |
(2.1 | ) | Agreement and Plan of Merger, dated as of January 28, 2014, among International Paper Company, xpedx Holding Company, xpedx Intermediate, LLC, xpedx, LLC, UWW Holdings, LLC, UWW Holdings, Inc. and Unisource Worldwide, Inc. (incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K dated February 3, 2014). |
(2.2 | ) | Contribution and Distribution Agreement, dated as of January 28, 2014, among International Paper Company, xpedx Holding Company, UWW Holdings, Inc. and solely for purposes of Article VI and Article X, UWW Holdings, LLC (incorporated by reference to Exhibit 2.2 to the Company's Current Report on Form 8-K dated February 3, 2014). |
(3.1 | ) | Restated Certificate of Incorporation of International Paper Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K dated May 13, 2013). |
(3.2 | ) | By-laws of International Paper Company, as amended through May 17, 2013 (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K dated May 13, 2013). |
(4.1 | ) | Indenture, dated as of April 12, 1999, between International Paper and The Bank of New York, as Trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K dated June 29, 2000). |
(4.2 | ) | Supplemental Indenture (including the form of Notes), dated as of June 4, 2008, between International Paper Company and The Bank of New York, as Trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K dated June 4, 2008). |
(4.3 | ) | Supplemental Indenture (including the form of Notes), dated as of May 11, 2009, between International Paper Company and The Bank of New York Mellon, as trustee (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K dated May 11, 2009). |
(4.4 | ) | Supplemental Indenture (including the form of Notes), dated as of August 10, 2009, between International Paper Company and The Bank of New York Mellon, as trustee (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K dated August 10, 2009). |
(4.5 | ) | Supplemental Indenture (including the form of Notes), dated as of December 7, 2009, between International Paper Company and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K dated December 7, 2009). |
(4.6 | ) | Supplemental Indenture (including the form of Notes), dated as of November 16, 2011, between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K dated November 16, 2011). |
(4.7 | ) | In accordance with Item 601 (b) (4) (iii) (A) of Regulation S-K, certain instruments respecting long-term debt of the Company have been omitted but will be furnished to the Commission upon request. |
(10.1 | ) | Amended and Restated 2009 Incentive Compensation Plan (the "LTICP") (incorporated by reference to Exhibit 99.1 to the Company's Current Report on Form 8-K dated February 10, 2014). + |
(10.2 | ) | 2013 Management Incentive Plan (incorporated by reference to Exhibit 10.3 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012). + |
(10.3 | ) | 2014 Management Incentive Plan. * + |
(10.4 | ) | 2009 Executive Management Incentive Plan (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K dated May 12, 2009). + |
(10.5 | ) | 2013 Exhibits to the 2009 Executive Management Incentive Plan (incorporated by reference to Exhibit 10.6 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012). + |
(10.6 | ) | 2014 Exhibits to the 2009 Executive Management Incentive Plan.*+ |
(10.7 | ) | Restricted Stock and Deferred Compensation Plan for Non-Employee Directors, Amended and Restated as of May 10, 2010 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2010). + |
(10.08 | ) | Form of Restricted Stock Award Agreement. * + |
(10.09 | ) | Form of Restricted Stock Unit Award Agreement (cash settled). * + |
(10.10 | ) | Form of Restricted Stock Unit Award Agreement (stock settled). * + |
(10.11 | ) | Form of Performance Share Plan award certificate. * + |
(10.12 | ) | Pension Restoration Plan for Salaried Employees (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2009). + |
(10.13 | ) | Unfunded Supplemental Retirement Plan for Senior Managers, as amended and restated effective January 1, 2008 (incorporated by reference to Exhibit 10.21 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007). + |
(10.14 | ) | Amendment No. 1 to the International Paper Company Unfunded Supplemental Retirement Plan for Senior Managers, effective October 13, 2008 (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K dated October 17, 2008). + |
(10.15 | ) | Amendment No. 2 to the International Paper Company Unfunded Supplemental Retirement Plan for Senior Managers, effective October 14, 2008 (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K dated October 17, 2008). + |
(10.16 | ) | Amendment No. 3 to the International Paper Company Unfunded Supplemental Retirement Plan for Senior Managers, effective December 8, 2008 (incorporated by reference to Exhibit 10.20 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008). + |
(10.17 | ) | Amendment No. 4 to the International Paper Company Unfunded Supplemental Retirement Plan for Senior Managers, effective January 1, 2009 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2009). + |
(10.18 | ) | Amendment No. 5 to the International Paper Company Unfunded Supplemental Retirement Plan for Senior Managers, effective October 31, 2009 (incorporated by reference to Exhibit 10.17 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009). + |
(10.19 | ) | Amendment No. 6 to the International Paper Company Unfunded Supplemental Retirement Plan for Senior Managers, effective January 1, 2012 (incorporated by reference to Exhibit 10.21 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2011). + |
(10.20 | ) | Form of Non-Competition Agreement, entered into by certain Company employees (including named executive officers) who have received restricted stock (incorporated by reference to Exhibit 10.22 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008). + |
(10.21 | ) | Form of Non-Solicitation Agreement, entered into by certain Company employees (including named executive officers) who have received restricted stock (incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2006). + |
(10.22 | ) | Form of Change-in-Control Agreement - Tier I, for the Chief Executive Officer and all "grandfathered" senior vice presidents elected prior to 2012 (all named executive officers) - approved September 2013 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2013). + |
(10.23 | ) | Form of Change-in-Control Agreement - Tier II, for all future senior vice presidents and all "grandfathered" vice presidents elected prior to February 2008 - approved September 2013 (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2013). + |
(10.24 | ) | Form of Indemnification Agreement for Directors (incorporated by reference to Exhibit 10.13 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2003). + |
(10.25 | ) | Board Policy on Severance Agreements with Senior Executives (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 18, 2005). + |
(10.26 | ) | Board Policy on Change of Control Agreements (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on October 18, 2005). + |
(10.27 | ) | Amended and Restated Time Sharing Agreement, dated May 31, 2012, by and between John V. Faraci and International Paper Company (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012). + |
(10.28 | ) | Five-Year Credit Agreement dated as of August 26, 2011, among International Paper Company, JPMorgan Chase Bank, N.A., individually and as administrative agent, and certain lenders (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K dated August 26, 2011). |
(10.29 | ) | IP Debt Security, dated December 7, 2006, issued by International Paper Company to Basswood Forests LLC (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K dated December 13, 2006). |
(10.30 | ) | IP Hickory Note, dated December 7, 2006, issued by International Paper Company to Hickory Forests LLC (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K dated December 13, 2006). |
(10.31 | ) | Credit Agreement, dated as of February 13, 2012, by and among the Company, UBS AG, Stamford Branch, as administrative agent; BNP Paribas Securities Corp., as syndication agent; Deutsche Bank Securities Inc., HSBC Securities (USA) Inc. and The Royal Bank of Scotland PLC, as co-documentation agents; UBS Securities LLC, BNP Paribas Securities Corp., CoBank, ACB, Deutsche Bank Securities Inc., HSBC Securities (USA) Inc. and RBS Securities Inc., as joint lead arrangers; and the lenders party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated February 13, 2012). |
(10.32 | ) | Loan Agreement dated December 3, 2007, by and among TIN Land Financing, LLC, Citibank, N.A., Citicorp North America, Inc., as Agent, and the other Lenders named therein (incorporated by reference to Exhibit 10.1 to Temple-Inland's Current Report on Form 8-K filed with the Commission on December 4, 2007). |
(10.33 | ) | Amendment No. 1 dated August 11, 2011 to Loan Agreement dated December 3, 2007, by and among TIN Land Financing, LLC, Citibank, N.A., Citicorp North America, Inc., as Agent, and the other Lenders named therein (incorporated by reference to Exhibit 10.1 to Temple-Inland's Quarterly Report on Form 10-Q for the quarter ended October 1, 2011, and filed with the Commission on November 7, 2011). |
(10.34 | ) | Loan Agreement dated December 3, 2007, by and among TIN Timber Financing, LLC, Citibank, N.A., Citicorp North America, Inc., as Agent, and the other Lenders named therein (incorporated by reference to Exhibit 10.2 to Temple-Inland's Current Report on Form 8-K filed with the Commission on December 4, 2007). |
(10.35 | ) | Amendment No. 1 dated August 11, 2011 to Loan Agreement dated December 3, 2007, by and among TIN Timber Financing, LLC, Citibank, N.A., Citicorp North America, Inc., as Agent, and the other Lenders named therein (incorporated by reference to Exhibit 10.2 to Temple-Inland's Quarterly Report on Form 10-Q for the quarter ended October 1, 2011, and filed with the Commission on November 7, 2011). |
(10.36 | ) | Form of Timber Note Receivable (incorporated by reference to Exhibit 10.1 to Temple-Inland's Quarterly Report on Form 10-Q for the quarter ended July 3, 2010, and filed with the Commission on August 9, 2010).The Company agrees to furnish supplementally a copy of any omitted schedule or exhibit to the staff of the Securities and Exchange Commission upon request. |
(10.37 | ) | Form of Letter of Credit (incorporated by reference to Exhibit 10.2 to Temple-Inland's Quarterly Report on Form 10-Q for the quarter ended July 3, 2010, and filed with the Commission on August 9, 2010). |
(10.38 | ) | Commitment Letter, dated January 28, 2014, by and among xpedx Holding Company, Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Wells Fargo Bank, N.A., SunTrust Bank and SunTrust Robinson Humphrey, Inc. (incorporated by reference to Exhibit 2.3 to the Company's Current Report on Form 8-K dated February 3, 2014). |
(11 | ) | Statement of Computation of Per Share Earnings.* |
(12 | ) | Computation of Ratio of Earnings to Fixed Charges and Preferred Stock Dividends. * |
(21 | ) | List of Subsidiaries of Registrant. * |
(23 | ) | Consent of Independent Registered Public Accounting Firm. * |
(24 | ) | Power of Attorney (contained on the signature page to the Company’s Annual Report on Form 10-K for the year ended December 31, 2013). |
(31.1 | ) | Certification by John V. Faraci, Chairman and Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. * |
(31.2 | ) | Certification by Carol L. Roberts, Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. * |
(32 | ) | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.* |
(101.INS) | XBRL Instance Document * | |
(101.SCH) | XBRL Taxonomy Extension Schema * | |
(101.CAL) | XBRL Taxonomy Extension Calculation Linkbase * | |
(101.DEF) | XBRL Taxonomy Extension Definition Linkbase * | |
(101.LAB) | XBRL Taxonomy Extension Label Linkbase * | |
(101.PRE) | XBRL Extension Presentation Linkbase * |
For the Year Ended December 31, 2013 | |||||||||||||||||
Balance at Beginning of Period | Additions Charged to Earnings | Additions Charged to Other Accounts | Deductions from Reserves | Balance at End of Period | |||||||||||||
Description | |||||||||||||||||
Reserves Applied Against Specific Assets Shown on Balance Sheet: | |||||||||||||||||
Doubtful accounts – current | $ | 119 | $ | 45 | $ | — | (55)(a) | $ | 109 | ||||||||
Restructuring reserves | 19 | 63 | — | (30)(b) | 52 |
For the Year Ended December 31, 2012 | |||||||||||||||||
Balance at Beginning of Period | Additions Charged to Earnings | Additions Charged to Other Accounts | Deductions from Reserves | Balance at End of Period | |||||||||||||
Description | |||||||||||||||||
Reserves Applied Against Specific Assets Shown on Balance Sheet: | |||||||||||||||||
Doubtful accounts – current | $ | 126 | $ | 17 | $ | — | (24)(a) | $ | 119 | ||||||||
Restructuring reserves | 15 | 31 | — | (27)(b) | 19 |
For the Year Ended December 31, 2011 | |||||||||||||||||
Balance at Beginning of Period | Additions Charged to Earnings | Additions Charged to Other Accounts | Deductions from Reserves | Balance at End of Period | |||||||||||||
Description | |||||||||||||||||
Reserves Applied Against Specific Assets Shown on Balance Sheet: | |||||||||||||||||
Doubtful accounts – current | $ | 129 | $ | 18 | $ | — | (21)(a) | $ | 126 | ||||||||
Restructuring reserves | 14 | 25 | — | (24)(b) | 15 |
(a) | Includes write-offs, less recoveries, of accounts determined to be uncollectible and other adjustments. |
(b) | Includes payments and deductions for reversals of previously established reserves that were no longer required. |
February 27, 2014 | |||
By: | /S/ SHARON R. RYAN | ||
Sharon R. Ryan | |||
Senior Vice President, General Counsel and Corporate Secretary |
Signature | Title | Date | ||
/S/ JOHN V. FARACI | Chairman of the Board, Chief Executive Officer and Director | February 27, 2014 | ||
John V. Faraci | ||||
/S/ DAVID J. BRONCZEK | Director | February 27, 2014 | ||
David J. Bronczek | ||||
/S/ AHMET C. DORDUNCU | Director | February 27, 2014 | ||
Ahmet C. Dorduncu | ||||
/S/ ILENE S. GORDON | Director | February 27, 2014 | ||
Ilene S. Gordon | ||||
/S/ JAY L. JOHNSON | Director | February 27, 2014 | ||
Jay L. Johnson | ||||
/S/ STACEY J. MOBLEY | Director | February 27, 2014 | ||
Stacey J. Mobley | ||||
/S/ JOAN E. SPERO | Director | February 27, 2014 | ||
Joan E. Spero | ||||
/S/ JOHN L. TOWNSEND III | Director | February 27, 2014 | ||
John L. Townsend III | ||||
/S/ JOHN F. TURNER | Director | February 27, 2014 | ||
John F. Turner | ||||
/S/ WILLIAM G. WALTER | Director | February 27, 2014 | ||
William G. Walter | ||||
/S/ J. STEVEN WHISLER | Director | February 27, 2014 | ||
J. Steven Whisler | ||||
/S/ CAROL L. ROBERTS | Senior Vice President and Chief Financial Officer | February 27, 2014 | ||
Carol L. Roberts | ||||
/S/ TERRI L. HERRINGTON | Vice President – Finance and Controller | February 27, 2014 | ||
Terri L. Herrington |
PRINTING PAPERS | Nova Campina, São Paulo, Brazil | Tampa, Florida leased | ||
Paulinia, São Paulo, Brazil | Columbus, Georgia | |||
Uncoated Papers and Pulp | Yanzhou City, China | Forest Park, Georgia | ||
U.S.: | Veracruz, Mexico | Griffin, Georgia | ||
Courtland, Alabama | Kenitra, Morocco | Kennesaw, Georgia leased | ||
Selma, Alabama (Riverdale Mill) | Edirne, Turkey | Lithonia, Georgia | ||
Cantonment, Florida (Pensacola Mill) | Corum, Turkey | Savannah, Georgia | ||
Ticonderoga, New York | Tucker, Georgia | |||
Riegelwood, North Carolina | Corrugated Container | Aurora, Illinois (2 locations) | ||
Eastover, South Carolina | U.S.: | Bedford Park, Illinois (2 locations) 1 leased | ||
Georgetown, South Carolina | Bay Minette, Alabama | Belleville, Illinois | ||
Sumter, South Carolina | Decatur, Alabama | Carroll Stream, Illinois | ||
Franklin, Virginia | Dothan, Alabama leased | Chicago, Illinois (2 locations) | ||
Huntsville, Alabama | Des Plaines, Illinois | |||
International: | Bentonville, Arkansas | Elgin, Illinois | ||
Luiz Antônio, São Paulo, Brazil | Conway, Arkansas | Lincoln, Illinois | ||
Mogi Guacu, São Paulo, Brazil | Fort Smith, Arkansas (2 locations) | Montgomery, Illinois | ||
Três Lagoas, Mato Grosso do Sul, Brazil | Russellville, Arkansas (2 locations) | Northlake, Illinois | ||
Saillat, France | Tolleson, Arizona | Rockford, Illinois | ||
Kadiam, India | Yuma, Arizona | Butler, Indiana | ||
Rajahmundry, India | Anaheim, California | Crawfordsville, Indiana | ||
Kwidzyn, Poland | Bell, California | Evansville, Indiana (1) | ||
Svetogorsk, Russia | Buena Park, California leased | Fort Wayne, Indiana | ||
Camarillo, California | Hammond, Indiana | |||
INDUSTRIAL PACKAGING | Carson, California | Indianapolis, Indiana (2 locations) | ||
Cerritos, California leased | Saint Anthony, Indiana | |||
Containerboard | Compton, California | Tipton, Indiana | ||
U.S.: | El Centro, California (4) | Cedar Rapids, Iowa | ||
Pine Hill, Alabama | Elk Grove, California | Waterloo, Iowa | ||
Prattville, Alabama | Exeter, California | Garden City, Kansas | ||
Cantonment, Florida (Pensacola Mill) | Gilroy, California (2 locations) 2 leased | Kansas City, Kansas (3) | ||
Rome, Georgia | Los Angeles, California (leased) | Bowling Green, Kentucky | ||
Savannah, Georgia | Modesto, California | Lexington, Kentucky | ||
Cayuga, Indiana | Ontario, California | Louisville, Kentucky | ||
Cedar Rapids, Iowa | Salinas, California | Walton, Kentucky | ||
Henderson, Kentucky | Sanger, California | Lafayette, Louisiana | ||
Maysville, Kentucky | San Leandro, California leased | Bogalusa, Louisiana | ||
Bogalusa, Louisiana | Santa Fe Springs, California (2 locations) 1 leased | Shreveport, Louisiana | ||
Campti, Louisiana | Stockton, California | Springhill, Louisiana | ||
Mansfield, Louisiana | Tracy, California | Auburn, Maine | ||
Vicksburg, Mississippi | Golden, Colorado | Three Rivers, Michigan | ||
Valliant, Oklahoma | Wheat Ridge, Colorado | Arden Hills, Minnesota | ||
Springfield, Oregon | Putnam, Connecticut | Austin, Minnesota | ||
Orange, Texas | Jacksonville, Florida leased (3) | Fridley, Minnesota | ||
Lake Wales, Florida (2) | Minneapolis, Minnesota leased | |||
International: | Orlando, Florida | Shakopee, Minnesota | ||
Franco da Rocha, São Paulo, Brazil | Plant City, Florida | White Bear Lake, Minnesota |
Houston, Mississippi | Lancaster, Pennsylvania | Shenyang, China | ||
Jackson, Mississippi | Littlestown, Pennsylvania | Suzhou, China | ||
Magnolia, Mississippi leased | Mount Carmel, Pennsylvania | Tianjin, China (2 locations) | ||
Olive Branch, Mississippi | Georgetown, South Carolina | Wuhan, China | ||
Fenton, Missouri | Laurens, South Carolina | Arles, France | ||
Kansas City, Missouri | Lexington, South Carolina | Chalon-sur-Saone, France | ||
Maryland Heights, Missouri | Ashland City, Tennessee leased | Creil, France | ||
North Kansas City, Missouri leased | Cleveland, Tennessee | LePuy, France (Espaly Box Plant) | ||
St. Joseph, Missouri | Elizabethton, Tennessee leased | Mortagne, France | ||
St. Louis, Missouri | Morristown, Tennessee | Guadeloupe, French West Indies | ||
Omaha, Nebraska | Murfreesboro, Tennessee | Batam, Indonesia | ||
Barrington, New Jersey | Amarillo, Texas | Bellusco, Italy | ||
Bellmawr, New Jersey | Carrollton, Texas (2 locations) | Catania, Italy | ||
Milltown, New Jersey | Edinburg, Texas (2 locations) | Pomezia, Italy | ||
Spotswood, New Jersey | El Paso, Texas | San Felice, Italy | ||
Thorofare, New Jersey | Ft. Worth, Texas leased | Kuala Lumpur, Malaysia | ||
Binghamton, New York | Grand Prairie, Texas | Juhor, Malaysia | ||
Buffalo, New York | Hidalgo, Texas | Ixtaczoquitlan, Mexico | ||
Rochester, New York | McAllen, Texas | Juarez, Mexico leased | ||
Scotia, New York | San Antonio, Texas (2 locations) | Los Mochis, Mexico | ||
Utica, New York | Sealy, Texas | Puebla, Mexico leased | ||
Charlotte, North Carolina (2 locations) | Lynchburg, Virginia | Reynosa, Mexico | ||
1 leased | Petersburg, Virginia | San Jose Iturbide, Mexico | ||
Lumberton, North Carolina | Richmond, Virginia | Santa Catarina, Mexico | ||
Manson, North Carolina | Moses Lake, Washington | Silao, Mexico | ||
Newton, North Carolina | Olympia, Washington | Tijuana, Mexico (2 locations) | ||
Statesville, North Carolina | Yakima, Washington | Villa Nicolas Romero, Mexico | ||
Byesville, Ohio | Fond du Lac, Wisconsin | Zapopan, Mexico | ||
Delaware, Ohio | Manitowoc, Wisconsin | Agadir, Morocco | ||
Eaton, Ohio | Casablanca, Morocco | |||
Kenton, Ohio | International: | Kenitra, Morocco | ||
Madison, Ohio | Manaus, Amazonas, Brazil | Monterrey, Nuevo Leon leased | ||
Marion, Ohio | Paulinia, São Paulo, Brazil | Singapore, Singapore | ||
Middletown, Ohio | Rio Verde, Goias, Brazil | Alcala, Spain leased (3) | ||
Mt. Vernon, Ohio | Suzano, São Paulo, Brazil | Almeria, Spain | ||
Newark, Ohio | Las Palmas, Canary Islands | Barcelona, Spain | ||
Streetsboro, Ohio | Tenerife, Canary Islands | Bilbao, Spain | ||
Wooster, Ohio | Rancagua, Chile | Gandia, Spain | ||
Oklahoma City, Oklahoma | Baoding, China | Madrid, Spain | ||
Beaverton, Oregon (2 locations) | Beijing, China (2 locations) | Valladolid, Spain | ||
Hillsboro, Oregon | Chengdu, China | Bangkok, Thailand | ||
Portland, Oregon | Dalian, China | Adana, Turkey | ||
Salem, Oregon leased | Dongguan, China | Bursa, Turkey | ||
Biglerville, Pennsylvania | Guangzhou, China (2 locations) | Corlu, Turkey | ||
Eighty-four, Pennsylvania | Huhot, China | Corum, Turkey | ||
Hazleton, Pennsylvania | Nanjing China | Gebze, Turkey | ||
Kennett Square, Pennsylvania | Shanghai, China (2 locations) | Izmir, Turkey |
Recycling | Riegelwood, North Carolina | BUILDING PRODUCTS (5) | ||
U.S.: | Hazelton, Pennsylvania | U.S.: | ||
Phoenix, Arizona leased | (C & D Center) | Monroeville, Alabama | ||
Fremont, California leased | Prosperity, South Carolina | El Dorado, Arkansas (owned by Del-Tin Fiber L.L.C) | ||
Norwalk, California | Texarkana, Texas | Hope, Arkansas | ||
West Sacramento, California | West Memphis, Arkansas | |||
Denver, Colorado | Foodservice | Rome, Georgia | ||
Itasca, Illinois | U.S.: | Thomson, Georgia | ||
Des Moines, Iowa | Visalia, California | DeQuincy, Louisiana | ||
Wichita, Kansas | Shelbyville, Illinois | Fletcher, Oklahoma | ||
Roseville, Minnesota | Kenton, Ohio | Mt. Jewett, Pennsylvania | ||
Omaha, Nebraska leased | Buna, Texas | |||
Charlotte, North Carolina | International: | Diboll, Texas (3 locations) | ||
Beaverton, Oregon | Shanghai, China | McQueeney, Texas | ||
Eugene, Oregon leased | Beijing, China | Pineland, Texas | ||
Memphis, Tennessee leased | Bogota, Colombia | Cumberland City, Tennessee | ||
Carrollton, Texas | Cheshire, England leased | |||
Salt Lake City, Utah | ||||
Richmond, Virginia | DISTRIBUTION | |||
Kent, Washington | ||||
xpedx | ||||
International: | U.S.: | |||
Monterrey, Mexico leased | Wholesale | |||
Xalapa, Veracruz, Mexico leased | Loveland, Ohio | |||
81 locations nationwide | ||||
Bags | 69 leased | |||
U.S.: | ||||
Buena Park, California | International: | |||
Beaverton, Oregon | Mexico (5 locations) all leased | |||
Grand Prairie, Texas | ||||
IP Asia | ||||
CONSUMER PACKAGING | International: | |||
China (8 locations) | ||||
Coated Paperboard | Malaysia | |||
Ontario, California leased | Taiwan | |||
(C & D Center) | Thailand | |||
Augusta, Georgia | Vietnam | |||
Springhill, Louisiana | ||||
(C & D Center) | FOREST PRODUCTS | |||
Sturgis, Michigan | ||||
(C & D Center) | Forest Resources | |||
Greensboro, North Carolina | International: | |||
(C & D Center) | Approximately 332,000 acres in Brazil | |||
(1) Closed March 2013 | (4) Closed December 2013 | |||
(2) Closed May 2013 | (5) Sold July 2013 | |||
(3) Closed June 2013 |
(in thousands of short tons) | U.S. | EMEA | Americas, other than U.S. | Asia | India | Total | |||||||||||
Industrial Packaging | |||||||||||||||||
Containerboard | 13,035 | 43 | 373 | — | — | 13,451 | |||||||||||
Printing Papers | |||||||||||||||||
Uncoated Freesheet | 2,500 | 1,150 | 1,135 | — | 266 | 5,051 | |||||||||||
Bristols | 200 | — | — | — | — | 200 | |||||||||||
Uncoated Papers and Bristols | 2,700 | 1,150 | 1,135 | — | 266 | 5,251 | |||||||||||
Dried Pulp | 1,190 | 329 | 140 | — | — | 1,659 | |||||||||||
Newsprint | — | 125 | — | — | — | 125 | |||||||||||
Total Printing Papers | 3,890 | 1,604 | 1,275 | — | 266 | 7,035 | |||||||||||
Consumer Packaging | |||||||||||||||||
Coated Paperboard | 1,559 | 371 | — | 1,421 | — | 3,351 |
Forest Resources | ||
We own, manage or have an interest in approximately 1.2 million acres of forestlands worldwide. These forestlands and associated acres are located in the following regions: | (M Acres) | |
Brazil | 332 | |
We have harvesting rights in: | ||
Russia | 896 | |
Total | 1,228 |
A. | Performance Objectives – Funding the Total MIP Award Pool |
Performance | Award % |
Greater than $3,300 MM and up to $4,000 MM | + .1429% for each $1MM improvement greater than $3,300 MM up to $4,000 MM |
$3,300 MM | 100% |
From $2,500 MM to less than $3,300 MM | - .0625% for each $1MM drop below $3,300 MM down to $2,500 MM |
Performance | Award % |
Greater than 10.7% and up to 13.9% | + 3.125% for each 0.1% improvement greater than 10.7% up to 13.9% |
10.7% | 100% |
From 8.0% to less than 10.7% | -1.852% for each 0.1% drop below 10.7% down to 8.0% |
Ù | Performance Objective Rating |
B. | Approval by the Committee of the Total MIP Award Pool |
A. | Individual Award Recommendations |
B. | Payout of Individual Awards |
C. | Impact of Temporary Layoff for Salaried Employees |
• | Layoff of three months or less followed by return to active employment for Company: The Participant will be eligible for his or her Calculated Award payable under the terms of the Plan. The Calculated Award will not be reduced for the period of temporary layoff. |
• | Layoff of three months or less followed by termination of employment: The Participant will be eligible for his or her Calculated Award payable under the terms of the Plan. The Participant’s eligibility for an award will be determined under Section VII(E) and (F). The award payable, if any, will not be reduced for the period of temporary layoff. |
D. | Impact of Leave of Absence for Salaried Employees |
E. | Cancellation of Award Upon Certain Events Prior to Payout |
• | Voluntary resignation before retirement eligibility; |
• | Termination for Cause; |
• | Violation of a Non-Compete, Non-Solicitation or Confidentiality Agreement, as applicable; |
• | Failure by the participant in the Company’s Unfunded Supplemental Retirement Plan for Senior Managers (“SERP”) to submit notice of retirement one year in advance of the effective date of his or her retirement, except in the event of death, disability or waiver by the Management Development and Compensation Committee; and |
• | Misconduct. The determination of whether a Participant has engaged in Misconduct shall be made by the Senior Vice President, Human Resources and Communications, or by the Management Development and Compensation Committee with regard to employees of the Company in a |
F. | Proration Upon Certain Events |
TERMINATION SCENARIO | DATE OF TERMINATION | AMOUNT TO BE PAID | TIME OF PAYMENT |
For All MIP-eligible Employees other than Senior Vice Presidents & CEO | |||
DURING PLAN YEAR | |||
•Death •Long-Term Disability •Eligible for Termination Allowance under Company Salaried Employee Severance Plan* (see Note) •Divestiture of Participant’s Business | 1/1 through 12/31 | Pro rata Target Award | As soon as practical following termination |
•Retirement eligible | 1/1 through 11/30 | Pro rata Target Award | As soon as practical following termination |
Month of December | Full Calculated Award based on Actual performance | At time of normal MIP payout | |
AFTER PLAN YEAR BUT BEFORE MIP PAYOUT |
•Death •Long-Term Disability •Eligible for Termination Allowance under Company Salaried Employee Severance Plan* (see Note) •Divestiture of Participant’s Business•Retirement eligible | 1/1 (of year following plan year) through MIP payout date | Full prior year Calculated Award based on Actual performance AND Pro rata Target Award for year of termination | Calculated Award is paid at time of normal MIP payout AND Pro rata Target Award is paid as soon as practical following termination |
For Senior Vice Presidents and CEO | |||
•Death •Long-Term Disability | 1/1 through 12/31 | Pro rata Target Award | As soon as practical following termination |
•Retirement eligible •Eligible for Termination Allowance under Company Salaried Employee Severance Plan* (see Note) •Divestiture of Participant’s Business | 1/1 through 12/31 | Pro rata Calculated Award based on Actual performance | At time of normal MIP payout |
VIII. | Allocation of MIP Award Pool among Business Units and Corporate Staff Organizations |
A. | Type of Payment |
B. | Time of Payment |
Position Level | Target Award (% of Midpoint)* | Target Award (Value)* | |
43 | 145 | % | $2,109,000 |
42 | 90 | % | $1,029,600 |
41 | 85 | % | $884,100 |
40 | 85 | % | $803,700 |
39 | 80 | % | $687,600 |
38 | 80 | % | $625,000 |
37 | 75 | % | $532,700 |
36 | 75 | % | $488,300 |
35 | 70 | % | $416,600 |
34 | 70 | % | $380,900 |
33 | 65 | % | $323,800 |
32 | 65 | % | $296,100 |
31 | 60 | % | $250,300 |
30 | 55 | % | $216,300 |
29 | 50 | % | $178,100 |
28 | 50 | % | $165,000 |
27 | 45 | % | $135,900 |
26 | 45 | % | $124,200 |
25 | 40 | % | $101,000 |
24 | 40 | % | $94,500 |
23 | 35 | % | $75,600 |
22 | 30 | % | $59,300 |
21 | 30 | % | $54,200 |
20 | 25 | % | $41,400 |
19 | 25 | % | $38,500 |
18 | 20 | % | $28,600 |
17 | 20 | % | $26,700 |
16 | 20 | % | $24,700 |
15 | 15 | % | $17,100 |
14 | 15 | % | $15,900 |
John V. Faraci | Chairman and Chief Executive Officer |
C. Cato Ealy | SVP, Corporate Development |
William P. Hoel | SVP, Container the Americas |
Tommy S. Joseph | SVP, Manufacturing, Technology, EHS&S and Global Sourcing |
Thomas G. Kadien | SVP, Consumer Packaging and IP Asia |
Paul J. Karre | SVP, Human Resources and Communications |
Mary A. Laschinger | SVP and President, xpedx |
Tim S. Nicholls | SVP, Printing & Communications Papers the Americas |
Jean-Michel Ribieras | SVP and President, IP Europe, Middle East, Africa and Russia |
Carol L. Roberts | SVP and Chief Financial Officer |
Sharon R. Ryan | SVP, General Counsel and Corporate Secretary |
Mark S. Sutton | SVP, Industrial Packaging |
Any other individual elected to the position of Senior Vice President during 2014 |
Plan Element | 162(m) Limit Approved by MDCC |
Company Business Objective: | Positive EBITDA Before Special Items |
INTERMEDIATE PERFORMANCE OBJECTIVES: | SAME AS 2014 MANAGEMENT INCENTIVE PLAN OBJECTIVES |
2. | Compliance with Law and Regulations |
3. | Award of Restricted Shares |
4. | Method of Earning Restricted Share Awards and Removal of Restrictions |
(i) | it relates to equity securities of the Company or its successor following the change in control or another entity that is affiliated with the Company or its successor following the change in control and such equity securities are publicly traded and registered under the Securities Exchange Act of 1934; |
(ii) | it has a value at least equal to the value of this Restricted Share Award as of the date of the change in control as determined by the Committee; |
(iii) | it does not contain any performance goals and only vests based on the Employee’s continued service with the Company or its successor following the change in control; |
(iv) | its forfeiture provisions, transfer restrictions and any other restrictions lapse based upon the original vesting period of this Restricted Share Award; provided, however, that the restrictions on the Replacement Award will be removed, and the award will vest, if within two years after the effective date of the change in control, the Employee’s employment is terminated without Cause or the Employee resigns for Good Reason; and |
(v) | its other terms and conditions are not less favorable to the Employee than the terms and conditions of this Restricted Share Award (including the provisions that would apply in the event of a subsequent change in control). |
2. | Compliance with Law and Regulations |
3. | Award of Restricted Stock Units |
4. | Method of Earning Restricted Stock Units and Removal of Restrictions |
(i) | it relates to equity securities of the Company or its successor following the change in control or another entity that is affiliated with the Company or its successor following the change in control and such equity securities are publicly traded and registered under the Securities Exchange Act of 1934; |
(ii) | it has a value at least equal to the value of this Restricted Stock Unit Award as of the date of the change in control as determined by the Committee; |
(iii) | it does not contain any performance goals and only vests based on the Employee’s continued service with the Company or its successor following the change in control; |
(iv) | its forfeiture provisions, transfer restrictions and any other restrictions lapse based upon the original vesting period of this Restricted Stock Unit Award; provided, however, that the restrictions on the Replacement Award will be removed, and the award will vest, if within two years after the effective date of the change in control, the Employee’s employment is terminated without Cause or the Employee resigns for Good Reason; and |
(v) | its other terms and conditions are not less favorable to the Employee than the terms and conditions of this Restricted Stock Unit Award (including the provisions that would apply in the event of a subsequent change in control). |
7. | Non-Competition and Non-Solicitation Agreements |
2. | Compliance with Law and Regulations |
3. | Award of Restricted Stock Units |
4. | Method of Earning Restricted Stock Units and Removal of Restrictions |
(i) | it relates to equity securities of the Company or its successor following the change in control or another entity that is affiliated with the Company or its successor following the change in control and such equity securities are publicly traded and registered under the Securities Exchange Act of 1934; |
(ii) | it has a value at least equal to the value of this Restricted Stock Unit Award as of the date of the change in control as determined by the Committee; |
(iii) | it does not contain any performance goals and only vests based on the Employee’s continued service with the Company or its successor following the change in control; |
(iv) | its forfeiture provisions, transfer restrictions and any other restrictions lapse based upon the original vesting period of this Restricted Stock Unit Award; provided, however, that the restrictions on the Replacement Award will be removed, and the award will vest, if within two years after the effective date |
(v) | its other terms and conditions are not less favorable to the Employee than the terms and conditions of this Restricted Stock Unit Award (including the provisions that would apply in the event of a subsequent change in control). |
5. | Designation of Beneficiary |
7. | Non-Competition and Non-Solicitation Agreements |
1. | Compliance with Laws and Regulations. It is intended that this Award, and any securities issued pursuant to this Award, will comply with all provisions of federal and applicable state securities laws. |
2. | Performance-Based Restricted Stock Units |
(a) | All performance-based restricted stock units (“Performance Share Units” or “PSUs”) issued under this Award will be contingently awarded with respect to the specific three-year performance period (the “Performance Period”) as described in the Notice of Award set forth on the reverse. PSUs may not be sold, transferred, pledged or assigned at any time. You will be asked to file a beneficiary designation form with the Company that names the beneficiary or beneficiaries of the Award. |
(b) | Payout of an Award is contingent solely upon the Company’s achievement of the performance goals over the Performance Period, and not on individual performance. |
(c) | All dividend equivalent units accrued during the Performance Period will be reinvested in additional PSUs (which will be allocated to the same Performance Period and will be subject to being earned on the same basis as the original Award). |
3. | Payment of Withholding Taxes. Generally, to pay withholding taxes due on an Award upon payout, the Company will reduce the number of PSUs paid to you by an amount sufficient to pay statutorily required withholding taxes. |
4. | Method of Determining Actual Award and Removal of Restrictions |
(a) | As soon as practicable after the Performance Period, the number of PSUs to be paid under this Award will be determined by the Committee. The decision by the Committee will be final, conclusive and binding upon all parties, including the Company, the shareowners and you. Following the Committee’s approval of the payout, you will receive unrestricted shares of Company common stock equal to the number of PSUs payable to you. |
(b) | You will receive prorated PSUs in the following events: (i) termination of your employment if you are eligible for a termination allowance under the Company’s Salaried Employee Severance Plan (and you sign the Company’s termination agreement and release in connection with the payment of a termination allowance); (ii) termination of your employment as a result of the divestiture of your business (iii) death; (iv) Disability; or (v) voluntary resignation after retirement eligibility as defined under the Retirement Plan of the Company. In these events, you (or, if applicable, your beneficiary or estate) will receive the number of PSUs that would have been earned based on actual Company performance, prorated based for your months of service during the Performance Period. Such PSUs are payable at the same time and in the same form as otherwise payable under the Plan. |
(c) | Your award will be forfeited and cancelled upon the following events: (i) termination of your employment for Cause, (ii) your refusal to sign the Company’s termination agreement and release in connection with the payment of a termination allowance (iii) voluntary resignation before retirement eligibility, (iv) violation of a Non-Competition Agreement or Non-Solicitation Agreement, (v) failure of a participant in the Company’s Unfunded Supplemental Retirement Plan for Senior Managers (“SERP”) to provide one-year’s notice of retirement, or (vi) your Misconduct. |
(d) | Except as may be provided in a Change in Control Agreement, in the event of Change in Control of the Company, the Award will be treated as described in the Administrative Guidelines for the Plan. |
(e) | In the event the Company’s financial statements are required to be restated as a result of errors, omissions or fraud, the Company may recover all or a portion of any Award with respect to any fiscal year of the Company the financial results of which are negatively affected by such restatement. |
5. | Changes in Stock. In the event of any stock dividend, split, reclassification or other analogous change in capitalization, or any distribution (other than regular cash dividends) to holders of the Company’s common stock, the Committee will make such adjustments, if any, as it deems to be equitable in the number of PSUs awarded you. |
6. | Other Terms and Conditions |
(a) | The Board or the Committee may, at any time and from time to time, amend, modify or terminate the Plan without shareowner approval, subject to certain limitations described in the plan. Further, the granting of an Award is discretionary by the Company. The Company may change the eligibility or other provisions of the Plan with Committee approval at any time. |
(b) | You (or your estate or beneficiary) will promptly provide all information related to this Award that is requested by the Company for its tax returns. |
(c) | You (and your surviving spouse, beneficiary, executor, administrator, heirs, successors or assigns) hereby agree to accept as binding, conclusive and final all decisions that are made by the Committee with respect to interpretations of the terms and condition of the Plan or this Award and with respect to any questions or disputes arising under the Plan or this Award. |
(d) | Participation in the Plan and receipt of this Award will not give you any right to a subsequent award, or any right to continued employment by the Company for any period, nor will the granting of an award give the Company any right to your continued services for any period. You understand that this Award is in addition to, and not a part of, your annual salary. |
In millions, except per share amounts | 2013 | 2012 | 2011 | |||||||||
Earnings (loss) from continuing operations | $ | 1,350 | $ | 749 | $ | 1,273 | ||||||
Discontinued operations | 45 | 45 | 49 | |||||||||
Net earnings (loss) | 1,395 | 794 | 1,322 | |||||||||
Effect of dilutive securities (a) | — | — | — | |||||||||
Net earnings - assuming dilution | $ | 1,395 | $ | 794 | $ | 1,322 | ||||||
Average common shares outstanding | 443.3 | 435.2 | 432.2 | |||||||||
Effect of dilutive securities (a) | ||||||||||||
Restricted stock performance share plan | 4.5 | 5.0 | 4.8 | |||||||||
Stock options (b) | 0.3 | — | — | |||||||||
Average common shares outstanding - assuming dilution | 448.1 | 440.2 | 437.0 | |||||||||
Earnings (loss) per common share from continuing operations | $ | 3.05 | $ | 1.72 | $ | 2.95 | ||||||
Discontinued operations | 0.10 | 0.10 | 0.11 | |||||||||
Net earnings (loss) per common share | $ | 3.15 | $ | 1.82 | $ | 3.06 | ||||||
Earnings (loss) per common share from continuing operations - assuming dilution | $ | 3.01 | $ | 1.70 | $ | 2.92 | ||||||
Discontinued operations | 0.10 | 0.10 | 0.11 | |||||||||
Net earnings (loss) per common share - assuming dilution | $ | 3.11 | $ | 1.80 | $ | 3.03 |
For the Years Ended December 31, | ||||||||||||||||||||||
TITLE | 2009 | 2010 | 2011 | 2012 | 2013 | |||||||||||||||||
(A) | Earnings (loss) from continuing operations before income taxes and equity earnings | $ | 1,199.0 | $ | 822.0 | $ | 1,458.0 | $ | 1,024.0 | $ | 849.0 | |||||||||||
(B) | Noncontrolling interests, net of taxes | (18.0 | ) | (21.0 | ) | (14.0 | ) | (5.0 | ) | 17.0 | ||||||||||||
(C) | Fixed charges excluding capitalized interest | 780.6 | 718.8 | 680.7 | 797.4 | 721.1 | ||||||||||||||||
(D) | Amortization of previously capitalized interest | 31.3 | 30.4 | 29.2 | 24.2 | 24.7 | ||||||||||||||||
(E) | Equity in undistributed earnings of affiliates | — | — | — | — | — | ||||||||||||||||
(F) | Distributed income of equity investees | 51.0 | 33.0 | 85.6 | — | — | ||||||||||||||||
(G) | Earnings (loss) from continuing operations before income taxes and fixed charges | $ | 2,043.9 | $ | 1,583.2 | $ | 2,239.5 | $ | 1,840.6 | $ | 1,611.8 | |||||||||||
Fixed Charges | ||||||||||||||||||||||
(H) | Interest and amortization of debt expense | $ | 702.3 | $ | 643.4 | $ | 602.0 | $ | 714.7 | $ | 648.3 | |||||||||||
(I) | Interest factor attributable to rentals | 72.0 | 69.9 | 73.3 | 77.0 | 71.7 | ||||||||||||||||
(J) | Preferred dividends of subsidiaries | 6.3 | 5.5 | 5.4 | 5.7 | 1.1 | ||||||||||||||||
(K) | Capitalized interest | 12.1 | 14.0 | 21.6 | 36.6 | 17.0 | ||||||||||||||||
(L) | Total fixed charges | $ | 792.7 | $ | 732.8 | $ | 702.3 | $ | 834.0 | $ | 738.1 | |||||||||||
(M) | Ratio of earnings to fixed charges | 2.16 | 3.19 | 2.21 | 2.18 | |||||||||||||||||
(N) | Deficiency in earnings necessary to cover fixed charges | $ | 1,251.2 |
Name | Jurisdiction | |
Ace Packaging Systems, Inc. | Michigan | |
Alexander Plantation, LLC | Delaware | |
Baoding International Paper Packaging Co., Ltd. | China | |
Basswood Forests II LLC | Delaware | |
Basswood Forests LLC | Delaware | |
Beech Forests LLC | Delaware | |
Beijing Golden Eagle Package & Production Co., Ltd. | China | |
Birch Forests LLC | Delaware | |
Branigar Organization, Inc., The | Illinois | |
Cartonajes International, S.L. | Spain | |
Cartonajes Union S.L. | Spain | |
Certified Forest Management LLC | Delaware | |
Champion Realty Corporation | Delaware | |
Chocolate Bayou Water Company | Delaware | |
CircleTree Insurance Company | Vermont | |
CMCP - INTERNATIONAL PAPER S.A.S. | Morocco | |
Commercial Realty & Properties LLC | Delaware | |
Comptoir des Bois de Brive SAS | France | |
ECHO Easement Corridor, LLC | Delaware | |
El Morro Corrugated Box Corporation | Puerto Rico | |
EM Xpedx, S.A. De C.V. | Mexico | |
Emballages Laurent SAS | France | |
English Oak LLC | Delaware | |
Federal Forestlands Inc. | Delaware | |
Forest Insurance Limited | Bermuda | |
GCO Minerals LLC | Texas | |
Groveton Paper Board, Inc. | New Hampshire | |
Haig Point, Inc. | Delaware | |
Hawthorn Forests LLC | Delaware | |
Hazelnut Forests LLC | Delaware | |
Hickory Forests LLC | Delaware | |
I.P. CONTAINER HOLDINGS (SPAIN) S.L. | Spain | |
Inducar S.L. | Spain | |
Inland Paper Company Inc. | Indiana | |
Instituto International Paper | Brazil | |
International Paper - 26, Inc. | Delaware | |
International Paper - 35, Inc. | Delaware | |
International Paper - Comércio de Papel e Participações Arapoti Ltda. | Brazil | |
International Paper - Kwidzyn Sp. Z O.O. | Poland | |
International Paper & Sun (Hong Kong) Trading Limited | Hong Kong | |
International Paper & Sun Cartonboard Co., Ltd. | People's Republic of China | |
International Paper (Asia) Limited | Hong Kong | |
International Paper (Beijing) Packaging Co., Ltd. | Beijing, China |
Name | Jurisdiction | |
International Paper (Chengdu) Packaging Co., Ltd. | Chengdu, China | |
International Paper (Chongqing) Packaging Co., Ltd | China | |
International Paper (Deutschland)GmbH | Germany | |
International Paper (Dongguan) Packaging Co., Ltd. | Dongguan, China | |
International Paper (Espana), S. L. | Spain | |
International Paper (Europe) Sarl | Luxembourg | |
International Paper (Guangzhou Panyu) Packaging Co.Ltd | China | |
International Paper (Guangzhou) Packaging Co., Ltd. | Guangzhou, China | |
International Paper (Hohhot) Packaging Co., Ltd. | China | |
International Paper (India) Private Limited | India | |
International Paper (Malaysia) Sdn Bhd | Malaysia | |
International Paper (Nanjing) Packaging Co., Ltd. | China | |
International Paper (Netherlands) B. V. | Netherlands | |
International Paper (New Zealand) Limited | New Zealand | |
International Paper (Poland) Holding sp. z o.o. | Poland | |
International Paper (Shanghai Minhang) Packaging Co., Ltd | China | |
International Paper (Shenyang) Packaging Co., Ltd. | People's Republic of China | |
International Paper (Suzhou) Packaging Co., Ltd. | China | |
International Paper (Tianjin) Packaging Co., Ltd. | China | |
International Paper (UK) Limited | Scotland | |
International Paper (Wuhan) Packaging Co., Ltd. | China | |
International Paper Agroflorestal Ltda. | Brazil | |
International Paper APPM Limited | India | |
International Paper Baja, S de R.L. de C.V. | Mexico | |
International Paper Benelux SPRL | Belgium | |
International Paper Cartones Ltda. | Chile | |
International Paper Celulose Ltda. | Brazil | |
International Paper Company (Delaware) | Delaware | |
International Paper Company Employee Relief Fund | New York | |
International Paper Company Foundation | New York | |
International Paper Company Limited | United Kingdom | |
International Paper Container (France) Holding SAS | France | |
International Paper Container (Shanghai) Limited | Shanghai, China | |
International Paper Corrugados, S. de R.L. de C.V. | Mexico | |
International Paper Czech Republic, s.r.o. | Czech Republic | |
International Paper de Mexico, S. de R.L. de C.V. | Mexico | |
International Paper Distribution (Shanghai) Limited | People's Republic of China | |
International Paper Distribution Group (Taiwan) Limited | Taiwan, Province Of China | |
International Paper Distribution Limited | British Virgin Islands | |
International Paper do Brasil Ltda. | Brazil | |
International Paper Embalagens Industriais Ltda. | Brazil | |
International Paper Embalagens Ltda. | Brazil | |
International Paper Empaques Industriales de Mexico S. de R.L. de C.V. | Mexico |
Name | Jurisdiction | |
International Paper Exportadora Ltda. | Brazil | |
International Paper Financial Services, Inc. | Delaware | |
International Paper Financing France SARL | France | |
International Paper Foodservice (Shanghai) Co., Ltd. | China | |
International Paper Foodservice (Tianjin) Co., Ltd | China | |
International Paper Foodservice Europe Limited | United Kingdom | |
International Paper France SAS | France | |
International Paper Frontera, S. de R.L. de C.V. | Mexico | |
International Paper Group (UK) Limited | United Kingdom | |
International Paper Group, S. de R.L. de C.V. | Mexico | |
International Paper Holdings (Luxembourg) S.à.r.l. | Luxembourg | |
International Paper Holdings Chile Comercial Ltda. | Chile | |
International Paper Hungary Kereskedelmi Kft. | Hungary | |
International Paper Industrie France SA | France | |
International Paper Investment (Shanghai) Co., Ltd. | China | |
International Paper Investments Asia Pte Ltd | Singapore | |
International Paper Investments (Asia) B.V. | Netherlands | |
International Paper Investments (France) S.A.S | France | |
International Paper Investments (Holland) B.V. | Netherlands | |
International Paper Investments (Luxembourg) S.à.r.l. | Luxembourg | |
International Paper Italia Srl | Italy | |
International Paper Japan Limited | Japan | |
International Paper Latin America Investments, LLC | Delaware | |
International Paper Latin America Ltda. | Chile | |
International Paper Manufacturing and Distribution Ltd. | Hong Kong | |
International Paper Monterrey, S. de R.L. de C.V. | Mexico | |
International Paper Nordic Sales Company Oy | Finland | |
International Paper Packaging (Thailand) Co., Ltd. | Thailand | |
International Paper Packaging Malaysia (Johor) Sdn. Bhd. | Malaysia | |
International Paper Packaging Malaysia (Kuala Lumpur) Sdn. Bhd. | Malaysia | |
International Paper Packaging Malaysia Sdn. Bhd. | Malaysia | |
International Paper Packaging Singapore (Jurong) Pte Ltd | Singapore | |
International Paper Papiers de Bureau SARL | France | |
International Paper Peru S.R.L. | Peru | |
International Paper Polska Sp. z o.o. | Poland | |
International Paper Procurement (Shanghai) Limited | People's Republic of China | |
International Paper Professional Services Corporation | Delaware | |
International Paper Realty Corporation | Delaware | |
International Paper Russia Holding B.V. | Netherlands | |
International Paper S.A. | France | |
International Paper Servicios Tijuana, S de R.L. de C.V. | Mexico | |
International Paper Shengdao (Dalian) Packaging Industries Co., Ltd. | China | |
International Paper Switzerland GmbH | Switzerland | |
International Paper Tecnologia en Empaque, S.A. de C.V. | Mexico |
Name | Jurisdiction | |
International Paper Trading (Shanghai) Limited | People's Republic of China | |
International Paper Ukraine SE | Ukraine | |
IP Belgian Services Company SPRL | Belgium | |
IP Canada Holdings Limited | Canada | |
IP Canadian Packaging Operations Inc. | Canada | |
IP Cartones Y Corrugados, S. de R.L. de C.V. | Mexico | |
IP Castell, Inc. | Delaware | |
IP CBPR Properties 2 LLC | Delaware | |
IP CBPR Properties LLC | Delaware | |
IP Celimo SAS | France | |
IP Commercial Properties Inc. | Delaware | |
IP Corporate Management (Shanghai) Co. Ltd. | China | |
IP Eagle LLC | Delaware | |
IP EMPAQUES DE MEXICO, S. DE R.L. DE C.V. | Mexico | |
IP Farms, Inc. | Delaware | |
IP Forest Resources Company | Delaware | |
IP Holding Asia Singapore Pte. Ltd. | Singapore | |
IP India Foundation | India | |
IP Inland Holdings LLC | Delaware | |
IP Inland Mexico Holdings LLC | Delaware | |
IP International Holdings, Inc. | Delaware | |
IP Mexico Holdings S.a.r.l. | Luxembourg | |
IP Mineral Holdings LLC | Delaware | |
IP Pacific Timberlands, Inc. | Delaware | |
IP Paper Servicios, S. de R.L. de C.V. | Mexico | |
IP Papier et Carton SAS | France | |
IP Petroleum Company, Inc. | Delaware | |
IP Realty Holdings LLC | Delaware | |
IP Singapore Holding Pte. Ltd. | Singapore | |
IP Timberlands Operating Company, Ltd. | Texas | |
IPAD Inc. | Delaware | |
Lacebark LLC | Delaware | |
Lake Superior Land Company | Delaware | |
Long-Bell Petroleum Company, Inc.,The | Louisiana | |
Longview, Portland & Northern Railway Company (LP&N Railway) | Washington | |
Lost Creek, Inc. | Delaware | |
Montauban Cartons SAS | France | |
Northwest Crossings Corporation | Delaware | |
Northwest Pines, Inc. | Delaware | |
Oficina Central de Servicios, S. A. de C. V. | Mexico | |
Olmuksan International Paper Ambalaj Sanayi ve Ticaret Anonim Sirketi | Turkey | |
Orsa International Paper Embalagens da Amazônia Ltda. | Brazil | |
Orsa International Paper Embalagens S.A. | Brazil |
Name | Jurisdiction | |
Papelera Kif de Mexico, S. A. de C. V. | Mexico | |
Papeteries d'Espaly SAS | France | |
Papeteries Etienne SAS | France | |
Pines II, Inc. | Delaware | |
Przedsiebiorstwo Produkcyjno-Handlowe "Tor-Pal" Spolka z Ograniczona Odpowiedzialnoscia | Poland | |
PT International Paper Packaging Indonesia Batam | Indonesia | |
Red Bird Receivables, LLC | Delaware | |
Sabine River & Northern Railroad Company | Texas | |
Shandong International Paper & Sun Coated Paperboard Co., Ltd. | People's Republic of China | |
Shandong IP & Sun Food Packaging Co., Ltd. | China | |
Shanghai International Paper Packaging Co., Ltd. | China | |
Societe Guadeloupeenne de Carton Ondule SAS | France | |
Societe Mauritanienne de Cartons - SOMACAR, S.A. | Mauritania | |
Societe Mediterraneenne d'Emballages SAS | France | |
Societe Normande de Carton Ondule SAS | France | |
Southland Energy Company | Texas | |
SP Forests L.L.C. | Delaware | |
Sunbelt Insurance Company | Texas | |
Supplier Finance Company, LLC | Delaware | |
Sustainable Forests L.L.C. | Delaware | |
Templar Essex Inc. | Delaware | |
Temple Associates, Inc. | Texas | |
Temple-Inland Funding Corporation | Nevada | |
Temple-Inland Inc. | Delaware | |
Temple-Inland Resource Company | Nevada | |
Tianjin Bohai International Paper Packaging Co., Ltd. | China | |
Timberlands Capital Corp. II, Inc. | Delaware | |
Timberlands Capital Corp. III, Inc. | Delaware | |
TIN Inc. | Delaware | |
TIN Land Financing, LLC | Delaware | |
TIN Timber Financing, LLC | Delaware | |
TinCorr S.A. | Uruguay | |
Transtates Properties Incorporated | Delaware | |
U. C. Realty Corp. | Delaware | |
Velarium Oy Ab | Finland | |
Xianghe International Paper Packaging Co., Ltd. | China | |
xpedx Holding Company | Delaware | |
xpedx International Inc. | Delaware | |
xpedx, S.A. de C.V. | Mexico | |
ZAO International Paper | Russia | |
ZAO Tikhvinsky Komplexny Lespromokhoz | Russia |
1. | I have reviewed this annual report on Form 10-K of International Paper Company; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
February 27, 2014 |
/s/ John V. Faraci |
John V. Faraci |
Chairman and Chief Executive Officer |
1. | I have reviewed this annual report on Form 10-K of International Paper Company; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
February 27, 2014 |
/s/ Carol L. Roberts |
Carol L. Roberts |
Senior Vice President and Chief |
Financial Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ John V. Faraci |
John V. Faraci |
Chairman and Chief Executive Officer |
February 27, 2014 |
/s/ Carol L. Roberts |
Carol L. Roberts |
Senior Vice President and Chief Financial Officer |
February 27, 2014 |
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