ý | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the fiscal year ended December 31, 2015 |
¨ | 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 | 2015 | 2014 | 2013 | |||
Industrial Packaging | ||||||
North American Corrugated Packaging | 10,284 | 10,355 | 10,393 | |||
North American Containerboard | 3,110 | 3,035 | 3,273 | |||
North American Recycling | 2,379 | 2,459 | 2,379 | |||
North American Saturated Kraft | 156 | 186 | 176 | |||
North American Gypsum/Release Kraft | 171 | 168 | 157 | |||
North American Bleached Kraft | 23 | 26 | 132 | |||
EMEA Industrial Packaging | 1,417 | 1,379 | 1,342 | |||
Asian Box | 359 | 408 | 416 | |||
Brazilian Packaging | 305 | 318 | 297 | |||
Industrial Packaging | 18,204 | 18,334 | 18,565 | |||
Printing Papers | ||||||
U.S. Uncoated Papers | 1,879 | 1,968 | 2,508 | |||
European and Russian Uncoated Papers | 1,493 | 1,531 | 1,413 | |||
Brazilian Uncoated Papers | 1,125 | 1,141 | 1,150 | |||
Indian Uncoated Papers | 241 | 231 | 232 | |||
Uncoated Papers | 4,738 | 4,871 | 5,303 | |||
Market Pulp (2) | 1,736 | 1,776 | 1,711 | |||
Consumer Packaging | ||||||
North American Consumer Packaging | 1,425 | 1,486 | 1,556 | |||
European and Russian Coated Paperboard | 381 | 354 | 355 | |||
Asian Coated Paperboard | 958 | 1,358 | 1,430 | |||
Consumer Packaging | 2,764 | 3,198 | 3,341 |
(1) | Includes third-party and inter-segment sales and excludes sales of equity investees. |
(2) | Includes North American, European and Brazilian volumes and 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; |
• | widespread outbreak of an illness or any other communicable disease, or any other public health crisis; |
• | 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, 2015 - October 31, 2015 | — | $— | — | $1.13 | |||||
November 1, 2015 - November 30, 2015 | 2,028,004 | 41.05 | 2,027,636 | 1.05 | |||||
December 1, 2015 - December 31, 2015 | 404,562 | 41.80 | 402,163 | 1.03 | |||||
Total | 2,432,566 |
(a) | 2,767 shares were acquired from employees from share withholdings to pay income taxes under the Company’s restricted stock programs. The remainder were purchased under a share repurchase program that was approved by our Board of Directors and announced on July 8, 2014. Through this program, which does not have an expiration date, we were authorized to purchase, in open market transactions (including block trades), privately negotiated transactions or otherwise, up to $1.5 billion of shares of our common stock. As of February 19, 2016, approximately $933 million of shares of our common stock remained authorized for purchase under our share repurchase programs. |
Dollar amounts in millions, except per share amounts and stock prices | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||
RESULTS OF OPERATIONS | ||||||||||||||||||||
Net sales | $ | 22,365 | $ | 23,617 | $ | 23,483 | $ | 21,852 | $ | 19,464 | ||||||||||
Costs and expenses, excluding interest | 20,544 | 22,138 | 21,643 | 20,214 | 17,528 | |||||||||||||||
Earnings (loss) from continuing operations before income taxes and equity earnings | 1,266 | (b) | 872 | (d) | 1,228 | (g) | 967 | (j) | 1,395 | (m) | ||||||||||
Equity earnings (loss), net of taxes | 117 | (200 | ) | (39 | ) | 61 | 140 | |||||||||||||
Discontinued operations, net of taxes | — | (13 | ) | (e) | (309 | ) | (h) | 77 | (k) | 82 | (n) | |||||||||
Net earnings (loss) | 917 | (b-c) | 536 | (d-f) | 1,378 | (g-i) | 799 | (j-l) | 1,336 | (m-o) | ||||||||||
Noncontrolling interests, net of taxes | (21 | ) | (19 | ) | (17 | ) | 5 | 14 | ||||||||||||
Net earnings (loss) attributable to International Paper Company | 938 | (b-c) | 555 | (d-f) | 1,395 | (g-i) | 794 | (j-l) | 1,322 | (m-o) | ||||||||||
FINANCIAL POSITION | ||||||||||||||||||||
Current assets less current liabilities | $ | 2,553 | $ | 3,050 | $ | 3,898 | $ | 3,907 | $ | 5,718 | ||||||||||
Plants, properties and equipment, net | 11,980 | 12,728 | 13,672 | 13,949 | 11,817 | |||||||||||||||
Forestlands | 366 | 507 | 557 | 622 | 660 | |||||||||||||||
Total assets | 30,587 | 28,684 | 31,528 | 32,153 | 27,018 | |||||||||||||||
Notes payable and current maturities of long-term debt | 426 | 742 | 661 | 444 | 719 | |||||||||||||||
Long-term debt | 8,900 | 8,631 | 8,827 | 9,696 | 9,189 | |||||||||||||||
Total shareholders’ equity | 3,884 | 5,115 | 8,105 | 6,304 | 6,645 | |||||||||||||||
BASIC EARNINGS PER SHARE ATTRIBUTABLE TO INTERNATIONAL PAPER COMPANY COMMON SHAREHOLDERS | ||||||||||||||||||||
Earnings (loss) from continuing operations | $ | 2.25 | $ | 1.33 | $ | 3.85 | $ | 1.65 | $ | 2.87 | ||||||||||
Discontinued operations | — | (0.03 | ) | (0.70 | ) | 0.17 | 0.19 | |||||||||||||
Net earnings (loss) | 2.25 | 1.30 | 3.15 | 1.82 | 3.06 | |||||||||||||||
DILUTED EARNINGS PER SHARE ATTRIBUTABLE TO INTERNATIONAL PAPER COMPANY COMMON SHAREHOLDERS | ||||||||||||||||||||
Earnings (loss) from continuing operations | $ | 2.23 | $ | 1.31 | $ | 3.80 | $ | 1.63 | $ | 2.84 | ||||||||||
Discontinued operations | — | (0.02 | ) | (0.69 | ) | 0.17 | 0.19 | |||||||||||||
Net earnings (loss) | 2.23 | 1.29 | 3.11 | 1.80 | 3.03 | |||||||||||||||
Cash dividends | 1.640 | 1.450 | 1.250 | 1.088 | 0.975 | |||||||||||||||
Total shareholders’ equity | 9.43 | 12.18 | 18.57 | 14.33 | 15.21 | |||||||||||||||
COMMON STOCK PRICES | ||||||||||||||||||||
High | $ | 57.90 | $ | 55.73 | $ | 50.33 | $ | 39.88 | $ | 33.01 | ||||||||||
Low | 36.76 | 44.24 | 39.47 | 27.29 | 21.55 | |||||||||||||||
Year-end | 37.70 | 53.58 | 49.03 | 39.84 | 29.60 | |||||||||||||||
FINANCIAL RATIOS | ||||||||||||||||||||
Current ratio | 1.7 | 1.6 | 1.8 | 1.8 | 2.2 | |||||||||||||||
Total debt to capital ratio | 0.71 | 0.65 | 0.54 | 0.62 | 0.60 | |||||||||||||||
Return on shareholders’ equity | 20.0 | % | (b-c) | 7.7 | % | (d-f) | 20.2 | % | (g-i) | 11.6 | % | (j-l) | 17.9 | % | (m-o) | |||||
CAPITAL EXPENDITURES | $ | 1,487 | $ | 1,366 | $ | 1,198 | $1,383 | $1,159 | ||||||||||||
NUMBER OF EMPLOYEES | 56,000 | 58,000 | 64,000 | 65,000 | 56,000 |
(a) | All periods presented have been restated to reflect the xpedx business and the Temple-Inland Building Products business as discontinued operations, if applicable. |
In millions | 2015 | |||
Riegelwood mill conversion costs, net of proceeds from sale of Carolina Coated Bristols brand | $ | 8 | ||
Timber monetization restructuring | 16 | |||
Early debt extinguishment costs | 207 | |||
IP-Sun JV impairment | 174 | |||
Brazil Packaging impairment | 137 | |||
Legal liability reserve adjustment | 15 | |||
Refund of state tax credits | (4 | ) | ||
Other items | 6 | |||
Total | $ | 559 |
In millions | 2015 | |||
IP-Sun JV impairment | $ | (67 | ) | |
Cash pension contribution | 23 | |||
Other items | 7 | |||
Total | $ | (37 | ) |
In millions | 2014 | |||
Temple-Inland integration | $ | 16 | ||
Courtland mill shutdown | 554 | |||
Early debt extinguishment costs | 276 | |||
India legal contingency resolution | (20 | ) | ||
Multi-employer pension plan withdrawal liability | 35 | |||
Foreign tax amnesty program | 32 | |||
Asia Industrial Packaging goodwill impairment | 100 | |||
Loss on sale by investee and impairment of investment | 47 | |||
Other items | 12 | |||
Total | $ | 1,052 |
In millions | 2014 | |||
xpedx spinoff | $ | 16 | ||
Building Products divestiture | 9 | |||
xpedx restructuring | (1 | ) | ||
Total | $ | 24 |
In millions | 2014 | |||
State legislative tax change | $ | 10 | ||
Internal restructuring | (90 | ) | ||
Other items | (1 | ) | ||
Total | $ | (81 | ) |
In millions | 2013 | |||
Temple-Inland integration | $ | 62 | ||
Courtland mill shutdown | 118 | |||
Early debt extinguishment costs | 25 | |||
Insurance reimbursement related to legal settlement | (30 | ) | ||
Shut down of paper machine at Augusta mill | 45 | |||
India Papers tradename and goodwill impairment | 127 | |||
Fair value adjustment of company airplanes | 9 | |||
Cass Lake environmental reserve | 6 | |||
Bargain purchase adjustment - Turkey | (13 | ) | ||
Other items | (5 | ) | ||
Total | $ | 344 |
In millions | 2013 | |||
xpedx spinoff | $ | 14 | ||
xpedx goodwill impairment | 366 | |||
Building Products divestiture | 19 | |||
xpedx restructuring | 19 | |||
Total | $ | 418 |
In millions | 2013 | |||
Settlement of U.S. federal tax audits | $ | (744 | ) | |
Income tax reserve release | (31 | ) | ||
Other items | 1 | |||
Total | $ | (774 | ) |
In millions | 2012 | |||
Temple-Inland integration | $ | 164 | ||
Early debt extinguishment costs | 48 | |||
EMEA packaging business restructuring | 17 | |||
Temple-Inland inventory fair value adjustment | 20 | |||
Hueneme mill long-lived asset fair value adjustment | 62 | |||
Containerboard mill divestitures | 29 | |||
Total | $ | 340 |
In millions | 2012 | |||
Building Products divestiture | $ | 9 | ||
xpedx restructuring | 28 | |||
Total | $ | 37 |
In millions | 2012 | |||
Internal restructuring | $ | 14 | ||
Deferred tax asset adjustment related to Medicare Part D reimbursement | 5 | |||
Total | $ | 19 |
In millions | 2011 | |||
Temple-Inland acquisition costs | $ | 20 | ||
Early debt extinguishment costs | 32 | |||
APPM acquisition costs | 18 | |||
Reversal of environmental and other reserves related to repurposing at Franklin mill | (24 | ) | ||
Cass Lake environmental reserve | 27 | |||
North American Shorewood business fixed asset impairment | 129 | |||
Shorewood business impairment | 78 | |||
Inverurie, Scotland mill asset impairment | 11 | |||
Total | $ | 291 |
In millions | 2011 | |||
Gain for earnout provision - sale of Kraft Papers business | $ | (30 | ) | |
Tax benefit - Brazilian Coated Papers business sale | (15 | ) | ||
Interest income on tax benefit - Brazilian Coated Papers business sale | (4 | ) | ||
xpedx restructuring | 34 | |||
Total | $ | (15 | ) |
In millions | 2011 | |||
Internal restructuring | $ | 24 | ||
Tax benefit related to reduction of the carrying value of the Shorewood business and write-off of the associated deferred tax liability | (222 | ) | ||
Tax expense for APPM acquisitions costs | 9 | |||
Release of deferred tax asset valuation allowance | 13 | |||
Other items | 2 | |||
Total | $ | (174 | ) |
2015 | 2014 | 2013 | |||||||
Operating Earnings (Loss) Per Share Attributable to Shareholders | $ | 3.65 | $ | 3.00 | $ | 3.06 | |||
Non-operating pension expense | (0.38 | ) | (0.30 | ) | (0.44 | ) | |||
Special items | (1.04 | ) | (1.39 | ) | 1.18 | ||||
Diluted Earnings (Loss) Per Share from Continuing Operations | 2.23 | 1.31 | 3.80 | ||||||
Discontinued operations | — | (0.02 | ) | (0.69 | ) | ||||
Diluted Earnings (Loss) Per Share Attributable to Shareholders | $ | 2.23 | $ | 1.29 | $ | 3.11 |
Three Months Ended December 31, 2015 | Three Months Ended September 30, 2015 | Three Months Ended December 31, 2014 | ||||||||||
Operating Earnings (Loss) Per Share Attributable to Shareholders | $ | 0.87 | $ | 0.97 | $ | 0.53 | ||||||
Non-operating pension expense | (0.09 | ) | (0.11 | ) | (0.07 | ) | ||||||
Special items | (0.35 | ) | (0.33 | ) | (0.12 | ) | ||||||
Diluted Earnings (Loss) Per Share from Continuing Operations | 0.43 | 0.53 | 0.34 | |||||||||
Discontinued operations | — | — | (0.02 | ) | ||||||||
Diluted Earnings (Loss) Per Share Attributable to Shareholders | $ | 0.43 | $ | 0.53 | $ | 0.32 |
In millions | 2015 | 2014 | 2013 | ||||||
Net Earnings (Loss) Attributable to International Paper Company | $ | 938 | $ | 555 | $ | 1,395 | |||
Deduct – Discontinued operations: | |||||||||
(Earnings) from operations | — | (11 | ) | (109 | ) | ||||
Special items (gain) loss | — | 24 | 418 | ||||||
Earnings (Loss) From Continuing Operations Attributable to International Paper Company | 938 | 568 | 1,704 | ||||||
Add back (deduct): | |||||||||
Income tax provision | 466 | 123 | (498 | ) | |||||
Equity (earnings) loss, net of taxes | (117 | ) | 200 | 39 | |||||
Net earnings (loss) attributable to noncontrolling interests | (21 | ) | (19 | ) | (17 | ) | |||
Earnings (Loss) From Continuing Operations Before Income Taxes and Equity Earnings | 1,266 | 872 | 1,228 | ||||||
Interest expense, net | 555 | 601 | 612 | ||||||
Noncontrolling interests / equity earnings included in operations | 8 | 2 | (1 | ) | |||||
Corporate items | 36 | 51 | 61 | ||||||
Special items: | |||||||||
Restructuring and other charges | 238 | 282 | 10 | ||||||
Net losses (gains) on sales and impairments of businesses | — | 38 | — | ||||||
Non-Operating Pension Expense | 258 | 212 | 323 | ||||||
$ | 2,361 | $ | 2,058 | $ | 2,233 | ||||
Industry Segment Operating Profit | |||||||||
Industrial Packaging | $ | 1,853 | $ | 1,896 | $ | 1,801 | |||
Printing Papers | 533 | (16 | ) | 271 | |||||
Consumer Packaging | (25 | ) | 178 | 161 | |||||
Total Industry Segment Operating Profit | $ | 2,361 | $ | 2,058 | $ | 2,233 |
• | Industrial Packaging’s profits of $1.9 billion were $43 million lower than in 2014 as the benefit of lower input costs was offset by lower average sales price realizations and mix, lower sales volumes, higher operating costs and higher maintenance outage costs. In addition, 2015 operating profits included a goodwill and trade name impairment charge of $137 million related to our Brazil Packaging business. Operating profits in 2014 included $16 million of costs associated with the integration of Temple-Inland, a goodwill impairment charge of $100 million related to our Asia Industrial Packaging business, a charge of $35 million for costs associated with a multi-employer pension plan withdrawal liability and a net charge of $7 million for other items. |
• | Printing Papers’ profits of $533 million represented a $549 million increase in operating profits from 2014. The benefits from lower input costs, lower costs associated with the closure of our Courtland, Alabama mill and lower foreign exchange impact were offset by lower average sales price realizations and mix, lower sales volumes, higher operating costs and higher maintenance outage costs. The 2014 operating loss included a special items charge of $554 million for costs associated with the shutdown of our Courtland, Alabama mill, a gain of $20 million for the resolution of a legal contingency in India and a charge of $32 million for costs associated with a foreign tax amnesty program. |
• | Consumer Packaging’s operating loss of $25 million represented a $203 million reduction in operating profits from 2014. The benefits from higher sales volumes, lower planned maintenance downtime costs and lower input costs were offset by lower average sales price realizations and mix, higher operating costs, and higher foreign exchange and other expenses. In addition, 2015 operating profits included an asset impairment charge of $174 million |
• | a $207 million charge before taxes ($133 million after taxes) for premiums paid on a cash tender offer on outstanding debt (see Note 13 Debt and Lines of Credit on pages 66 and 67 of Item 8. Financial Statements and Supplementary Data), |
• | a $16 million charge before taxes ($10 million after taxes) for costs related to the restructuring of our 2006 timber monetization, |
• | a $15 million charge before taxes ($9 million after taxes) for legal reserve adjustments, and |
• | a $4 million charge before taxes ($3 million after taxes) for other items. |
• | an $8 million net charge before taxes ($4 million after taxes) related to costs associated with the conversion of the Riegelwood, North Carolina facility to 100% pulp production, net of proceeds from the sale of the Carolina Coated Bristols brand, and |
• | a $2 million charge (before and after taxes) for other items. |
• | a $276 million charge before taxes ($169 million after taxes) for costs related to the early extinguishment of debt (see Note 13 Debt and Lines of Credit on pages 66 and 67 of Item 8. Financial Statements and Supplementary Data) |
• | a $554 million charge before taxes ($338 million after taxes) for costs related to the shutdown of the Courtland, Alabama mill, and |
• | a $15 million charge before taxes ($11 million after taxes) for other items. |
• | 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 66 and 67 of Item 8. Financial Statements and Supplementary Data), 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 $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. |
Industrial Packaging | |||||||||
In millions | 2015 | 2014 | 2013 | ||||||
Sales | $ | 14,484 | $ | 14,944 | $ | 14,810 | |||
Operating Profit | 1,853 | 1,896 | 1,801 |
Printing Papers | |||||||||
In millions | 2015 | 2014 | 2013 | ||||||
Sales | $ | 5,031 | $ | 5,720 | $ | 6,205 | |||
Operating Profit (Loss) | 533 | (16 | ) | 271 |
Consumer Packaging | |||||||||
In millions | 2015 | 2014 | 2013 | ||||||
Sales | $ | 2,940 | $ | 3,403 | $ | 3,435 | |||
Operating Profit (Loss) | (25 | ) | 178 | 161 |
In millions | 2015 | 2014 | 2013 | ||||||
Cash provided by operations | $ | 2,580 | $ | 3,077 | $ | 3,028 | |||
(Less)/Add: | |||||||||
Cash invested in capital projects | (1,487 | ) | (1,366 | ) | (1,198 | ) | |||
Cash contribution to pension plan | 750 | 353 | 31 | ||||||
Insurance reimbursement for Guaranty Bank settlement | — | — | (30 | ) | |||||
Free Cash Flow | $ | 1,843 | $ | 2,064 | $ | 1,831 |
In millions | Three Months Ended December 31, 2015 | Three Months Ended September 30, 2015 | Three Months Ended December 31, 2014 | ||||||
Cash provided by operations | $ | 990 | $ | 837 | $ | 1,144 | |||
(Less)/Add: | |||||||||
Cash invested in capital projects | (489 | ) | (325 | ) | (405 | ) | |||
Free Cash Flow | $ | 501 | $ | 512 | $ | 739 |
In millions | 2015 | 2014 | 2013 | ||||||
Industrial Packaging | $ | 858 | $ | 754 | $ | 629 | |||
Printing Papers | 361 | 318 | 294 | ||||||
Consumer Packaging | 216 | 233 | 208 | ||||||
Distribution | — | — | 9 | ||||||
Subtotal | 1,435 | 1,305 | 1,140 | ||||||
Corporate and other | 52 | 61 | 58 | ||||||
Total | $ | 1,487 | $ | 1,366 | $ | 1,198 |
In millions | 2015 | 2014 | 2013 | ||||||
Debt reductions (a) | $ | 2,151 | $ | 1,625 | $ | 574 | |||
Pre-tax early debt extinguishment costs (b) | 207 | 276 | 25 |
(a) | Reductions related to notes with interest rates ranging from 2.00% to 9.38% with original maturities from 2014 to 2031 for the years ended December 31, 2015, 2014 and 2013. Includes the $630 million payment for a portion of the Special Purpose Entity Liability (see Note 12 Variable Interest Entities on pages 64 through 66 of Item 8. Financial Statements and Supplementary Data ). |
(b) | Amounts are included in Restructuring and other charges in the accompanying consolidated statements of operations. |
In millions | 2015 | 2016 | 2017 | 2018 | 2019 | Thereafter | ||||||||||||
Maturities of long-term debt (a) | $ | 426 | $ | 43 | $ | 811 | $ | 427 | $ | 183 | $ | 7,436 | ||||||
Lease obligations | 118 | 95 | 72 | 55 | 41 | 128 | ||||||||||||
Purchase obligations (b) | 3,001 | 541 | 447 | 371 | 358 | 1,579 | ||||||||||||
Total (c) | $ | 3,545 | $ | 679 | $ | 1,330 | $ | 853 | $ | 582 | $ | 9,143 |
(a) | Total debt includes scheduled principal payments only. |
(b) | Includes $2.1 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. |
(c) | 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 $101 million. |
In millions | Benefit Obligation | Fair Value of Plan Assets | ||||
U.S. qualified pension | $ | 14,092 | $ | 10,923 | ||
U.S. nonqualified pension | 347 | — | ||||
U.S. postretirement | 275 | — | ||||
Non-U.S. pension | 204 | 155 | ||||
Non-U.S. postretirement | 45 | — |
2015 | 2014 | 2013 | ||||
Discount rate | 4.40 | % | 4.10 | % | 4.90 | % |
Rate of compensation increase | 3.75 | % | 3.75 | % | 3.75 | % |
2015 | 2014 | |||
Health care cost trend rate assumed for next year | 7.00 | % | 7.00 | % |
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 | 2022 | 2022 |
Year | Return | Year | Return | ||
2015 | 1.3 | % | 2010 | 15.1 | % |
2014 | 6.4 | % | 2009 | 23.8 | % |
2013 | 14.1 | % | 2008 | (23.6 | )% |
2012 | 14.1 | % | 2007 | 9.6 | % |
2011 | 2.5 | % | 2006 | 14.9 | % |
In millions | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||
Pension expense | |||||||||||||||
U.S. plans (non-cash) | $ | 461 | $ | 387 | $ | 545 | $ | 342 | $ | 195 | |||||
Non-U.S. plans | 6 | — | 5 | 3 | 1 | ||||||||||
Postretirement expense | |||||||||||||||
U.S. plans | 8 | 7 | (1 | ) | (4 | ) | 7 | ||||||||
Non-U.S. plans | 5 | 7 | 7 | 1 | 2 | ||||||||||
Net expense | $ | 480 | $ | 401 | $ | 556 | $ | 342 | $ | 205 |
In millions | 2017 (1) | 2016 (1) | ||||
Pension expense | ||||||
U.S. plans (non-cash) | $ | 278 | $ | 364 | ||
Non-U.S. plans | 4 | 5 | ||||
Postretirement expense | ||||||
U.S. plans | 14 | 14 | ||||
Non-U.S. plans | 8 | 5 | ||||
Net expense | $ | 304 | $ | 388 |
(1) | Based on assumptions at December 31, 2015. |
In millions, except per share amounts, for the years ended December 31 | 2015 | 2014 | 2013 | ||||||
NET SALES | $ | 22,365 | $ | 23,617 | $ | 23,483 | |||
COSTS AND EXPENSES | |||||||||
Cost of products sold | 15,468 | 16,254 | 16,282 | ||||||
Selling and administrative expenses | 1,645 | 1,793 | 1,796 | ||||||
Depreciation, amortization and cost of timber harvested | 1,294 | 1,406 | 1,531 | ||||||
Distribution expenses | 1,406 | 1,521 | 1,583 | ||||||
Taxes other than payroll and income taxes | 168 | 180 | 178 | ||||||
Restructuring and other charges | 252 | 846 | 156 | ||||||
Impairment of goodwill and other intangibles | 137 | 100 | 127 | ||||||
Net (gains) losses on sales and impairments of businesses | 174 | 38 | 3 | ||||||
Net bargain purchase gain on acquisition of business | — | — | (13 | ) | |||||
Interest expense, net | 555 | 607 | 612 | ||||||
EARNINGS (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND EQUITY EARNINGS | 1,266 | 872 | 1,228 | ||||||
Income tax provision (benefit) | 466 | 123 | (498 | ) | |||||
Equity earnings (loss), net of taxes | 117 | (200 | ) | (39 | ) | ||||
EARNINGS (LOSS) FROM CONTINUING OPERATIONS | 917 | 549 | 1,687 | ||||||
Discontinued operations, net of taxes | — | (13 | ) | (309 | ) | ||||
NET EARNINGS (LOSS) | 917 | 536 | 1,378 | ||||||
Less: Net earnings (loss) attributable to noncontrolling interests | (21 | ) | (19 | ) | (17 | ) | |||
NET EARNINGS (LOSS) ATTRIBUTABLE TO INTERNATIONAL PAPER COMPANY | $ | 938 | $ | 555 | $ | 1,395 | |||
BASIC EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO INTERNATIONAL PAPER COMPANY COMMON SHAREHOLDERS | |||||||||
Earnings (loss) from continuing operations | $ | 2.25 | $ | 1.33 | $ | 3.85 | |||
Discontinued operations, net of taxes | — | (0.03 | ) | (0.70 | ) | ||||
Net earnings (loss) | $ | 2.25 | $ | 1.30 | $ | 3.15 | |||
DILUTED EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO INTERNATIONAL PAPER COMPANY COMMON SHAREHOLDERS | |||||||||
Earnings (loss) from continuing operations | $ | 2.23 | $ | 1.31 | $ | 3.80 | |||
Discontinued operations, net of taxes | — | (0.02 | ) | (0.69 | ) | ||||
Net earnings (loss) | $ | 2.23 | $ | 1.29 | $ | 3.11 | |||
AMOUNTS ATTRIBUTABLE TO INTERNATIONAL PAPER COMPANY COMMON SHAREHOLDERS | |||||||||
Earnings (loss) from continuing operations | $ | 938 | $ | 568 | $ | 1,704 | |||
Discontinued operations, net of taxes | — | (13 | ) | (309 | ) | ||||
Net earnings (loss) | $ | 938 | $ | 555 | $ | 1,395 |
In millions for the years ended December 31 | 2015 | 2014 | 2013 | ||||||
NET EARNINGS (LOSS) | $ | 917 | $ | 536 | $ | 1,378 | |||
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX | |||||||||
Amortization of pension and postretirement prior service costs and net loss: | |||||||||
U.S. plans (less tax of $186, $154 and $195) | 296 | 242 | 307 | ||||||
Pension and postretirement liability adjustments: | |||||||||
U.S. plans (less tax of $206, $798 and $756) | (329 | ) | (1,253 | ) | 1,188 | ||||
Non-U.S. plans (less tax of $0, $5 and $3) | (2 | ) | (18 | ) | (4 | ) | |||
Change in cumulative foreign currency translation adjustment | (1,042 | ) | (876 | ) | (426 | ) | |||
Net gains/losses on cash flow hedging derivatives: | |||||||||
Net gains (losses) arising during the period (less tax of $3, $3 and $2) | (3 | ) | 10 | — | |||||
Reclassification adjustment for (gains) losses included in net earnings (less tax of $8, $1 and $3) | 12 | (4 | ) | (7 | ) | ||||
TOTAL OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX | (1,068 | ) | (1,899 | ) | 1,058 | ||||
Comprehensive Income (Loss) | (151 | ) | (1,363 | ) | 2,436 | ||||
Net (Earnings) Loss Attributable to Noncontrolling Interests | 21 | 19 | 17 | ||||||
Other Comprehensive (Income) Loss Attributable to Noncontrolling Interests | 6 | 12 | 23 | ||||||
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO INTERNATIONAL PAPER COMPANY | $ | (124 | ) | $ | (1,332 | ) | $ | 2,476 |
In millions, except per share amounts, at December 31 | 2015 | 2014 | ||||
ASSETS | ||||||
Current Assets | ||||||
Cash and temporary investments | $ | 1,050 | $ | 1,881 | ||
Accounts and notes receivable, less allowances of $70 in 2015 and $82 in 2014 | 2,675 | 3,083 | ||||
Inventories | 2,228 | 2,424 | ||||
Deferred income tax assets | 312 | 331 | ||||
Other current assets | 212 | 240 | ||||
Total Current Assets | 6,477 | 7,959 | ||||
Plants, Properties and Equipment, net | 11,980 | 12,728 | ||||
Forestlands | 366 | 507 | ||||
Investments | 228 | 248 | ||||
Financial Assets of Special Purpose Entities (Note 12) | 7,014 | 2,145 | ||||
Goodwill | 3,335 | 3,773 | ||||
Deferred Charges and Other Assets | 1,187 | 1,324 | ||||
TOTAL ASSETS | $ | 30,587 | $ | 28,684 | ||
LIABILITIES AND EQUITY | ||||||
Current Liabilities | ||||||
Notes payable and current maturities of long-term debt | $ | 426 | $ | 742 | ||
Accounts payable | 2,078 | 2,664 | ||||
Accrued payroll and benefits | 434 | 477 | ||||
Other accrued liabilities | 986 | 1,026 | ||||
Total Current Liabilities | 3,924 | 4,909 | ||||
Long-Term Debt | 8,900 | 8,631 | ||||
Nonrecourse Financial Liabilities of Special Purpose Entities (Note 12) | 6,277 | 2,050 | ||||
Deferred Income Taxes | 3,231 | 3,063 | ||||
Pension Benefit Obligation | 3,548 | 3,819 | ||||
Postretirement and Postemployment Benefit Obligation | 364 | 396 | ||||
Other Liabilities | 434 | 553 | ||||
Commitments and Contingent Liabilities (Note 11) | ||||||
Equity | ||||||
Common stock $1 par value, 2015 & 2014 – 448.9 shares | 449 | 449 | ||||
Paid-in capital | 6,243 | 6,245 | ||||
Retained earnings | 4,649 | 4,409 | ||||
Accumulated other comprehensive loss | (5,708 | ) | (4,646 | ) | ||
5,633 | 6,457 | |||||
Less: Common stock held in treasury, at cost, 2015 – 36.776 shares and 2014 – 28.734 shares | 1,749 | 1,342 | ||||
Total Shareholders’ Equity | 3,884 | 5,115 | ||||
Noncontrolling interests | 25 | 148 | ||||
Total Equity | 3,909 | 5,263 | ||||
TOTAL LIABILITIES AND EQUITY | $ | 30,587 | $ | 28,684 |
In millions for the years ended December 31 | 2015 | 2014 | 2013 | ||||||
OPERATING ACTIVITIES | |||||||||
Net earnings (loss) | $ | 917 | $ | 536 | $ | 1,378 | |||
Depreciation, amortization, and cost of timber harvested | 1,294 | 1,414 | 1,547 | ||||||
Deferred income tax provision (benefit), net | 281 | (135 | ) | 146 | |||||
Restructuring and other charges | 252 | 881 | 210 | ||||||
Pension plan contribution | (750 | ) | (353 | ) | (31 | ) | |||
Net bargain purchase gain on acquisition of business | — | — | (13 | ) | |||||
Periodic pension expense, net | 461 | 387 | 545 | ||||||
Net (gains) losses on sales and impairments of businesses | 174 | 38 | 3 | ||||||
Equity (earnings) losses, net of taxes | (117 | ) | 200 | 39 | |||||
Release of tax reserves | — | — | (775 | ) | |||||
Impairment of goodwill and other intangible assets | 137 | 100 | 527 | ||||||
Other, net | 153 | 167 | (62 | ) | |||||
Changes in current assets and liabilities | |||||||||
Accounts and notes receivable | 7 | (97 | ) | (134 | ) | ||||
Inventories | (131 | ) | (103 | ) | (114 | ) | |||
Accounts payable and accrued liabilities | (89 | ) | (18 | ) | (110 | ) | |||
Interest payable | (17 | ) | (18 | ) | (57 | ) | |||
Other | 8 | 78 | (71 | ) | |||||
CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES | 2,580 | 3,077 | 3,028 | ||||||
INVESTMENT ACTIVITIES | |||||||||
Invested in capital projects | (1,487 | ) | (1,366 | ) | (1,198 | ) | |||
Acquisitions, net of cash acquired | — | — | (505 | ) | |||||
Proceeds from divestitures | 23 | — | 726 | ||||||
Proceeds from spinoff | — | 411 | — | ||||||
Investment in Special Purpose Entities | (198 | ) | — | — | |||||
Proceeds from sale of fixed assets | 37 | 61 | 65 | ||||||
Other | (114 | ) | 34 | 85 | |||||
CASH PROVIDED BY (USED FOR) INVESTMENT ACTIVITIES | (1,739 | ) | (860 | ) | (827 | ) | |||
FINANCING ACTIVITIES | |||||||||
Repurchase of common stock and payments of restricted stock tax withholding | (605 | ) | (1,062 | ) | (512 | ) | |||
Issuance of common stock | 2 | 66 | 298 | ||||||
Issuance of debt | 6,873 | 1,982 | 241 | ||||||
Reduction of debt | (6,947 | ) | (2,095 | ) | (845 | ) | |||
Change in book overdrafts | (14 | ) | 30 | (123 | ) | ||||
Dividends paid | (685 | ) | (620 | ) | (554 | ) | |||
Acquisition of redeemable noncontrolling interest | — | (114 | ) | — | |||||
Debt tender premiums paid | (211 | ) | (269 | ) | — | ||||
Redemption of securities | — | — | (150 | ) | |||||
Other | (14 | ) | (4 | ) | (43 | ) | |||
CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES | (1,601 | ) | (2,086 | ) | (1,688 | ) | |||
Effect of Exchange Rate Changes on Cash | (71 | ) | (52 | ) | (13 | ) | |||
Change in Cash and Temporary Investments | (831 | ) | 79 | 500 | |||||
Cash and Temporary Investments | |||||||||
Beginning of the period | 1,881 | 1,802 | 1,302 | ||||||
End of the period | $ | 1,050 | $ | 1,881 | $ | 1,802 |
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, 2013 | $ | 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 | |||||||||||||||
Issuance of stock for various plans, net | 2 | 69 | — | — | (212 | ) | 283 | — | 283 | |||||||||||||||
Repurchase of stock | — | — | — | — | 1,062 | (1,062 | ) | — | (1,062 | ) | ||||||||||||||
xpedx spinoff | — | (287 | ) | — | — | — | (287 | ) | — | (287 | ) | |||||||||||||
Dividends | — | — | (633 | ) | — | — | (633 | ) | — | (633 | ) | |||||||||||||
Acquisition of redeemable noncontrolling interests | — | — | 46 | — | — | 46 | — | 46 | ||||||||||||||||
Remeasurement of redeemable noncontrolling interest | — | — | (5 | ) | — | — | (5 | ) | — | (5 | ) | |||||||||||||
Comprehensive income (loss) | — | — | 555 | (1,887 | ) | — | (1,332 | ) | (31 | ) | (1,363 | ) | ||||||||||||
BALANCE, DECEMBER 31, 2014 | 449 | 6,245 | 4,409 | (4,646 | ) | 1,342 | 5,115 | 148 | 5,263 | |||||||||||||||
Issuance of stock for various plans, net | — | 35 | — | — | (198 | ) | 233 | — | 233 | |||||||||||||||
Repurchase of stock | — | — | — | — | 605 | (605 | ) | — | (605 | ) | ||||||||||||||
Dividends | — | — | (698 | ) | — | — | (698 | ) | — | (698 | ) | |||||||||||||
Transactions of equity method investees | — | (37 | ) | — | — | — | (37 | ) | — | (37 | ) | |||||||||||||
Divestiture of noncontrolling interests | — | — | — | — | — | — | (96 | ) | (96 | ) | ||||||||||||||
Comprehensive income (loss) | — | — | 938 | (1,062 | ) | — | (124 | ) | (27 | ) | (151 | ) | ||||||||||||
BALANCE, DECEMBER 31, 2015 | $ | 449 | $ | 6,243 | $ | 4,649 | $ | (5,708 | ) | $ | 1,749 | $ | 3,884 | $ | 25 | $ | 3,909 |
In millions, except per share amounts | 2015 | 2014 | 2013 | ||||||||
Earnings (loss) from continuing operations | $ | 938 | $ | 568 | $ | 1,704 | |||||
Effect of dilutive securities (a) | — | — | — | ||||||||
Earnings (loss) from continuing operations – assuming dilution | $ | 938 | $ | 568 | $ | 1,704 | |||||
Average common shares outstanding | 417.4 | 427.7 | 443.3 | ||||||||
Effect of dilutive securities (a): | |||||||||||
Restricted performance share plan | 3.2 | 4.2 | 4.5 | ||||||||
Stock options (b) | — | 0.1 | 0.3 | ||||||||
Average common shares outstanding – assuming dilution | 420.6 | 432.0 | 448.1 | ||||||||
Basic earnings (loss) per share from continuing operations | $ | 2.25 | $ | 1.33 | $ | 3.85 | |||||
Diluted earnings (loss) per share from continuing operations | $ | 2.23 | $ | 1.31 | $ | 3.80 |
(a) | Securities are not included in the table in periods when antidilutive. |
(b) | Options to purchase shares were not included in the computation of diluted common shares outstanding if 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 December 31, 2014 | $ | (3,134 | ) | $ | (1,513 | ) | $ | 1 | $ | (4,646 | ) | |
Other comprehensive income (loss) before reclassifications | (331 | ) | (1,002 | ) | (3 | ) | (1,336 | ) | ||||
Amounts reclassified from accumulated other comprehensive income | 296 | (40 | ) | 12 | 268 | |||||||
Net Current Period Other Comprehensive Income | (35 | ) | (1,042 | ) | 9 | (1,068 | ) | |||||
Other Comprehensive Income (Loss) Attributable to Noncontrolling Interest | — | 6 | — | 6 | ||||||||
Balance as of December 31, 2015 | $ | (3,169 | ) | $ | (2,549 | ) | $ | 10 | $ | (5,708 | ) |
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 December 31, 2013 | $ | (2,105 | ) | $ | (649 | ) | $ | (5 | ) | $ | (2,759 | ) |
Other comprehensive income (loss) before reclassifications | (1,271 | ) | (863 | ) | 10 | (2,124 | ) | |||||
Amounts reclassified from accumulated other comprehensive income | 242 | (13 | ) | (4 | ) | 225 | ||||||
Net Current Period Other Comprehensive Income | (1,029 | ) | (876 | ) | 6 | (1,899 | ) | |||||
Other Comprehensive Income (Loss) Attributable to Noncontrolling Interest | — | 12 | — | 12 | ||||||||
Balance as of December 31, 2014 | $ | (3,134 | ) | $ | (1,513 | ) | $ | 1 | $ | (4,646 | ) |
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 December 31, 2012 | $ | (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 | ) |
Details About Accumulated Other Comprehensive Income Components | Amount Reclassified from Accumulated Other Comprehensive Income (a) | Location of Amount Reclassified from AOCI | |||||||||
2015 | 2014 | 2013 | |||||||||
In millions | |||||||||||
Defined benefit pension and postretirement items: | |||||||||||
Prior-service costs | $ | (33 | ) | $ | (17 | ) | $ | (9 | ) | (b) | Cost of products sold |
Actuarial gains/(losses) | (449 | ) | (379 | ) | (493 | ) | (b) | Cost of products sold | |||
Total pre-tax amount | (482 | ) | (396 | ) | (502 | ) | |||||
Tax (expense)/benefit | 186 | 154 | 195 | ||||||||
Net of tax | (296 | ) | (242 | ) | (307 | ) | |||||
Change in cumulative foreign currency translation adjustments: | |||||||||||
Business acquisition/divestiture | 40 | 13 | (17 | ) | Net (gains) losses on sales and impairments of businesses or Retained earnings | ||||||
Tax (expense)/benefit | — | — | — | ||||||||
Net of tax | 40 | 13 | (17 | ) | |||||||
Net gains and losses on cash flow hedging derivatives: | |||||||||||
Foreign exchange contracts | (20 | ) | 3 | 10 | (c) | Cost of products sold | |||||
Total pre-tax amount | (20 | ) | 3 | 10 | |||||||
Tax (expense)/benefit | 8 | 1 | (3 | ) | |||||||
Net of tax | (12 | ) | 4 | 7 | |||||||
Total reclassifications for the period | $ | (268 | ) | $ | (225 | ) | $ | (317 | ) |
In millions | 2015 | |||
Early debt extinguishment costs (see Note 13) | $ | 207 | ||
Timber monetization restructuring | 16 | |||
Legal liability reserve adjustment | 15 | |||
Riegelwood mill conversion costs net of proceeds from the sale of Carolina Coated Bristols brand (a) | 8 | |||
Other | 6 | |||
Total | $ | 252 |
(a) | Includes $5 million of severance charges, $24 million of accelerated depreciation, sale proceeds of $22 million and $1 million of other charges. |
In millions | 2014 | |||
Early debt extinguishment costs (see Note 13) | $ | 276 | ||
Courtland mill shutdown (a) | 554 | |||
Other (b) | 16 | |||
Total | $ | 846 |
In millions | 2013 | |||
Early debt extinguishment costs (see Note 13) | $ | 25 | ||
Courtland mill shutdown (a) | 118 | |||
Box plant closures | (13 | ) | ||
Augusta paper machine shutdown (b) | 45 | |||
Insurance reimbursements | (30 | ) | ||
Other (c) | 11 | |||
Total | $ | 156 |
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 | ||||
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 | 2014 | 2013 | ||||||
Net Sales | $ | 2,604 | $ | 5,597 | ||||
Costs and Expenses | ||||||||
Cost of products sold | 2,309 | 4,941 | ||||||
Selling and administrative expenses | 191 | 409 | ||||||
Depreciation, amortization and cost of timber harvested | 9 | 16 | ||||||
Distribution expenses | 69 | 149 | ||||||
Restructuring and other charges | 25 | 54 | ||||||
Impairment of goodwill and other intangibles | — | 400 | ||||||
Other, net | 3 | 7 | ||||||
Earnings (Loss) Before Income Taxes and Equity Earnings | (2 | ) | (379 | ) | ||||
Income tax provision (benefit) | (1 | ) | (25 | ) | ||||
Discontinued Operations, Net of Taxes (a) | $ | (1 | ) | $ | (354 | ) |
In millions at December 31 | 2015 | 2014 | ||||
Temporary Investments | $ | 738 | $ | 1,480 |
In millions at December 31 | 2015 | 2014 | ||||
Accounts and notes receivable: | ||||||
Trade | $ | 2,480 | $ | 2,860 | ||
Other | 195 | 223 | ||||
Total | $ | 2,675 | $ | 3,083 |
In millions at December 31 | 2015 | 2014 | ||||
Raw materials | $ | 339 | $ | 494 | ||
Finished pulp, paper and packaging products | 1,248 | 1,273 | ||||
Operating supplies | 563 | 562 | ||||
Other | 78 | 95 | ||||
Inventories | $ | 2,228 | $ | 2,424 |
In millions at December 31 | 2015 | 2014 | ||||
Pulp, paper and packaging facilities | $ | 31,466 | $ | 31,805 | ||
Other properties and equipment | 1,242 | 1,263 | ||||
Gross cost | 32,708 | 33,068 | ||||
Less: Accumulated depreciation | 20,728 | 20,340 | ||||
Plants, properties and equipment, net | $ | 11,980 | $ | 12,728 |
In millions | 2015 | 2014 | 2013 | ||||||
Depreciation expense | $ | 1,213 | $ | 1,308 | $ | 1,415 |
In millions | 2015 | 2014 | 2013 | ||||||
Interest payments | $ | 680 | $ | 718 | $ | 751 |
In millions | 2015 | 2014 | 2013 | ||||||
Interest expense (a) | $ | 644 | $ | 677 | $ | 669 | |||
Interest income (a) | 89 | 70 | 57 | ||||||
Capitalized interest costs | 25 | 23 | 17 |
(a) | Interest expense and interest income exclude approximately $25 million, $38 million and $45 million in 2015, 2014 and 2013, 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 | Total | |||||||||||
Balance as of January 1, 2015 | |||||||||||||||
Goodwill | $3,396 | $2,234 | $1,784 | $7,414 | |||||||||||
Accumulated impairment losses (a) | (100 | ) | (1,877 | ) | (1,664 | ) | (3,641 | ) | |||||||
3,296 | 357 | 120 | 3,773 | ||||||||||||
Reclassifications and other (b) | (70 | ) | (95 | ) | (3 | ) | (168 | ) | |||||||
Additions/reductions | (1 | ) | (15 | ) | (c) | (117 | ) | (d) | (133 | ) | |||||
Impairment loss | (137 | ) | (e) | — | — | (137 | ) | ||||||||
Balance as of December 31, 2015 | |||||||||||||||
Goodwill | 3,325 | 2,124 | 1,664 | 7,113 | |||||||||||
Accumulated impairment losses (a) | (237 | ) | (1,877 | ) | (1,664 | ) | (3,778 | ) | |||||||
Total | $3,088 | $247 | $— | $3,335 |
(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 a reduction from tax benefits generated by the deduction of goodwill amortization for tax purposes in Brazil. |
(d) | Reduction due to the sale and de-consolidation of Shandong Sun joint venture in Asia. |
(e) | Reflects a charge for goodwill impairment related to our Brazil Industrial Packaging business. |
In millions | Industrial Packaging | Printing Papers | Consumer Packaging | Distribution | Total | ||||||||||||||
Balance as of January 1, 2014 | |||||||||||||||||||
Goodwill | $3,430 | $2,311 | $1,787 | $400 | $7,928 | ||||||||||||||
Accumulated impairment losses (a) | — | (1,877 | ) | (1,664 | ) | (400 | ) | (3,941 | ) | ||||||||||
3,430 | 434 | 123 | — | 3,987 | |||||||||||||||
Reclassifications and other (b) | (34 | ) | (57 | ) | (3 | ) | — | (94 | ) | ||||||||||
Additions/reductions | — | (20 | ) | (c) | — | — | (20 | ) | |||||||||||
Impairment loss | (100 | ) | (d) | — | — | — | (100 | ) | |||||||||||
Write off of goodwill | — | — | — | (400 | ) | (400 | ) | ||||||||||||
Write off of accumulated impairment loss | — | — | — | 400 | 400 | ||||||||||||||
Balance as of December 31, 2014 | |||||||||||||||||||
Goodwill | 3,396 | 2,234 | 1,784 | — | 7,414 | ||||||||||||||
Accumulated impairment losses (a) | (100 | ) | (1,877 | ) | (1,664 | ) | — | (3,641 | ) | ||||||||||
Total | $3,296 | $357 | $120 | $— | $3,773 |
(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 a reduction from tax benefits generated by the deduction of goodwill amortization for tax purposes in Brazil. |
(d) | Reflects a charge of $100 million for goodwill impairment related to our Asia Industrial Packaging business. |
2015 | 2014 | |||||||||||
In millions at December 31 | Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | ||||||||
Customer relationships and lists | $ | 495 | $ | 166 | $ | 561 | $ | 157 | ||||
Non-compete agreements | 69 | 56 | 74 | 53 | ||||||||
Tradenames, patents and trademarks | 61 | 54 | 61 | 44 | ||||||||
Land and water rights | 33 | 6 | 81 | 9 | ||||||||
Software | 22 | 20 | 23 | 22 | ||||||||
Other | 46 | 29 | 48 | 24 | ||||||||
Total | $ | 726 | $ | 331 | $ | 848 | $ | 309 |
In millions | 2015 | 2014 | 2013 | ||||||
Amortization expense related to intangible assets | $ | 60 | $ | 73 | $ | 79 |
In millions | 2015 | 2014 | 2013 | ||||||
Earnings (loss) | |||||||||
U.S. | $ | 1,147 | $ | 565 | $ | 775 | |||
Non-U.S. | 119 | 307 | 453 | ||||||
Earnings (loss) from continuing operations before income taxes and equity earnings | $ | 1,266 | $ | 872 | $ | 1,228 |
In millions | 2015 | 2014 | 2013 | ||||||
Current tax provision (benefit) | |||||||||
U.S. federal | $ | 62 | $ | 175 | $ | (663 | ) | ||
U.S. state and local | 12 | 9 | (98 | ) | |||||
Non-U.S. | 111 | 74 | 95 | ||||||
$ | 185 | $ | 258 | $ | (666 | ) | |||
Deferred tax provision (benefit) | |||||||||
U.S. federal | $ | 321 | $ | (67 | ) | $ | 206 | ||
U.S. state and local | 30 | 5 | (18 | ) | |||||
Non-U.S. | (70 | ) | (73 | ) | (20 | ) | |||
$ | 281 | $ | (135 | ) | $ | 168 | |||
Income tax provision (benefit) | $ | 466 | $ | 123 | $ | (498 | ) |
In millions | 2015 | 2014 | 2013 | ||||||
Earnings (loss) from continuing operations before income taxes and equity earnings | $ | 1,266 | $ | 872 | $ | 1,228 | |||
Statutory U.S. income tax rate | 35 | % | 35 | % | 35 | % | |||
Tax expense (benefit) using statutory U.S. income tax rate | 443 | 305 | 430 | ||||||
State and local income taxes | 27 | 10 | (2 | ) | |||||
Tax rate and permanent differences on non-U.S. earnings | (44 | ) | (72 | ) | (90 | ) | |||
Net U.S. tax on non-U.S. dividends | 12 | 16 | (15 | ) | |||||
Tax benefit on manufacturing activities | (14 | ) | (46 | ) | (27 | ) | |||
Non-deductible business expenses | 8 | 7 | 4 | ||||||
Non-deductible impairments | 109 | 35 | 37 | ||||||
Sale of non-strategic assets | (61 | ) | — | — | |||||
Tax audits | — | — | (770 | ) | |||||
Subsidiary liquidation | — | (85 | ) | — | |||||
Retirement plan dividends | (5 | ) | (5 | ) | (5 | ) | |||
Tax basis adjustments | — | — | (33 | ) | |||||
Tax credits | (15 | ) | (34 | ) | (23 | ) | |||
Other, net | 6 | (8 | ) | (4 | ) | ||||
Income tax provision (benefit) | $ | 466 | $ | 123 | $ | (498 | ) | ||
Effective income tax rate | 37 | % | 14 | % | (41 | )% |
In millions | 2015 | 2014 | ||||
Deferred income tax assets: | ||||||
Postretirement benefit accruals | $ | 172 | $ | 189 | ||
Pension obligations | 1,403 | 1,517 | ||||
Alternative minimum and other tax credits | 283 | 342 | ||||
Net operating and capital loss carryforwards | 732 | 672 | ||||
Compensation reserves | 265 | 280 | ||||
Other | 244 | 266 | ||||
Gross deferred income tax assets | 3,099 | 3,266 | ||||
Less: valuation allowance | (430 | ) | (415 | ) | ||
Net deferred income tax asset | $ | 2,669 | $ | 2,851 | ||
Deferred income tax liabilities: | ||||||
Intangibles | $ | (271 | ) | $ | (316 | ) |
Plants, properties and equipment | (2,727 | ) | (2,707 | ) | ||
Forestlands, related installment sales, and investment in subsidiary | (2,253 | ) | (2,290 | ) | ||
Gross deferred income tax liabilities | $ | (5,251 | ) | $ | (5,313 | ) |
Net deferred income tax liability | $ | (2,582 | ) | $ | (2,462 | ) |
In millions | 2015 | 2014 | 2013 | ||||||
Balance at January 1 | $ | (158 | ) | $ | (161 | ) | $ | (972 | ) |
(Additions) reductions based on tax positions related to current year | (6 | ) | (15 | ) | (22 | ) | |||
Additions for tax positions of prior years | (6 | ) | (1 | ) | (29 | ) | |||
Reductions for tax positions of prior years | 7 | 9 | 824 | ||||||
Settlements | 2 | — | 26 | ||||||
Expiration of statutes of limitations | 4 | 2 | 11 | ||||||
Currency translation adjustment | 7 | 8 | 1 | ||||||
Balance at December 31 | $ | (150 | ) | $ | (158 | ) | $ | (161 | ) |
In millions | 2015 | 2014 | 2013 | ||||||
Special items | $ | (84 | ) | $ | (372 | ) | $ | (95 | ) |
Tax-related adjustments: | |||||||||
Return to accrual | 23 | — | — | ||||||
Internal restructurings | (62 | ) | (90 | ) | (4 | ) | |||
Settlement of tax audits and legislative changes | — | 10 | (770 | ) | |||||
Medicare D deferred income tax write-off | — | — | — | ||||||
Other tax adjustments | 2 | (1 | ) | — | |||||
Income tax provision (benefit) related to special items | $ | (121 | ) | $ | (453 | ) | $ | (869 | ) |
In millions | 2016 Through 2025 | 2026 Through 2035 | Indefinite | Total | ||||||||
U.S. federal and non-U.S. NOLs | $ | 76 | $ | — | $ | 519 | $ | 595 | ||||
State taxing jurisdiction NOLs | 147 | 57 | — | 204 | ||||||||
U.S. federal, non- U.S. and state tax credit carryforwards | 144 | 32 | 241 | 417 | ||||||||
U.S. federal and state capital loss carryforwards | 23 | — | — | 23 | ||||||||
Total | $ | 390 | $ | 89 | $ | 760 | $ | 1,239 |
In millions | 2016 | 2017 | 2018 | 2019 | 2020 | Thereafter | ||||||||||||
Lease obligations | $ | 118 | $ | 95 | $ | 72 | $ | 55 | $ | 41 | $ | 128 | ||||||
Purchase obligations (a) | 3,001 | 541 | 447 | 371 | 358 | 1,579 | ||||||||||||
Total | $ | 3,119 | $ | 636 | $ | 519 | $ | 426 | $ | 399 | $ | 1,707 |
(a) | Includes $2.1 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 | 2015 | 2014 | 2013 | ||||||
Revenue (a) | $ | 43 | $ | 38 | $ | 45 | |||
Expense (a) | 81 | 72 | 79 | ||||||
Cash receipts (b) | 21 | 22 | 33 | ||||||
Cash payments (c) | 71 | 73 | 84 |
(a) | The net expense related to the Company’s interest in the Entities is included in the accompanying consolidated statement of operations, as International Paper has and intends to effect its legal right to offset as discussed above. After formation of the 2015 Financing Entities, the revenue and expense are included in Interest expense, net in the accompanying consolidated statement of operations. |
(b) | The cash receipts are equity distributions from the Entities to International Paper prior to the formation of the 2015 Financing Entities. After formation of the 2015 Financing Entities, cash receipts are interest received on the Financial assets of special purpose entities. |
(c) | The cash payments are interest payments on the associated debt obligations discussed above. After formation of the 2015 Financing Entities, the payments represent interest paid on Nonrecourse financial liabilities of special purpose entities. |
In millions | 2015 | 2014 | 2013 | ||||||
Revenue (a) | $ | 27 | $ | 26 | $ | 27 | |||
Expense (b) | 27 | 25 | 29 | ||||||
Cash receipts (c) | 7 | 7 | 8 | ||||||
Cash payments (d) | 18 | 18 | 21 |
(a) | The revenue is included in Interest expense, net in the accompanying consolidated statement of operations and includes approximately $19 million, $19 million and $19 million for the years ended December 31, 2015, 2014 and 2013, respectively, of accretion income for the amortization of the purchase accounting adjustment on 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 approximately $7 million, $7 million and $7 million for the years ended December 31, 2015, 2014 and 2013, 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 | 2015 | 2014 | 2013 | ||||||
Debt reductions (a) | $ | 2,151 | $ | 1,625 | $ | 574 | |||
Pre-tax early debt extinguishment costs (b) | 207 | 276 | 25 |
(a) | Reductions related to notes with interest rates ranging from 2.00% to 9.38% with original maturities from 2014 to 2031 for the years ended December 31, 2015, 2014 and 2013. Includes the $630 million payment for a portion of the Special Purpose Entity Liability (see Note 12 Variable Interest Entities). |
(b) | Amounts are included in Restructuring and other charges in the accompanying consolidated statements of operations. |
In millions at December 31 | 2015 | 2014 | ||||
8.7% note – due 2038 | $ | 264 | $ | 264 | ||
9 3/8% note – due 2019 | 295 | 420 | ||||
7.95% debentures – due 2018 | 648 | 903 | ||||
7.5% note – due 2021 | 603 | 979 | ||||
7.3% notes – due 2039 | 721 | 721 | ||||
6 7/8% notes – due 2023 – 2029 | 131 | 131 | ||||
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 | 185 | 358 | ||||
6.0% notes – due 2041 | 585 | 585 | ||||
5.25% to 5.3% notes – due 2015 – 2016 | 261 | 457 | ||||
5.00% to 5.15% – due 2035 – 2046 | 1,280 | — | ||||
4.8% notes - due 2044 | 796 | 796 | ||||
4.75% notes – due 2022 | 817 | 896 | ||||
3.65% to 3.80% notes – due 2024 – 2026 | 1,490 | 797 | ||||
Floating rate notes – due 2015 – 2025 (a) | 438 | 271 | ||||
Environmental and industrial development bonds – due 2015 – 2035 (b) | 594 | 950 | ||||
Short-term notes (c) | 5 | 424 | ||||
Other (d) | 67 | 275 | ||||
Total (e) | 9,326 | 9,373 | ||||
Less: current maturities | 426 | 742 | ||||
Long-term debt | $ | 8,900 | $ | 8,631 |
(a) | The weighted average interest rate on these notes was 2.9% in 2015 and 2.8% in 2014. |
(b) | The weighted average interest rate on these bonds was 5.8% in 2015 and 5.7% in 2014. |
(c) | The weighted average interest rate was 2.2% in 2015 and 2.6% in 2014. Includes $5 million at December 31, 2015 and $91 million at December 31, 2014 related to non-U.S. denominated borrowings with a weighted average interest rate of 2.2% in 2015 and 7.2% in 2014. |
(d) | Includes $8 million at December 31, 2015 and $20 million at December 31, 2014 related to the unamortized gain on interest rate swap unwinds (see Note 14 Derivatives and Hedging Instruments). |
(e) | The fair market value was approximately $9.9 billion at December 31, 2015 and $10.6 billion at December 31, 2014. |
In millions | December 31, 2015 | December 31, 2014 | ||
Derivatives in Cash Flow Hedging Relationships: | ||||
Foreign exchange contracts (Sell / Buy; denominated in sell notional): (a) | ||||
Brazilian real / U.S. dollar - Forward | — | 166 | ||
British pounds / Brazilian real - Forward | — | 5 | ||
European euro / Brazilian real - Forward | — | 9 | ||
European euro / Polish zloty - Forward | 260 | 280 | ||
Mexican peso / U.S. dollar - Forward | 136 | — | ||
U.S. dollar / Brazilian real - Forward | — | 125 | ||
Derivatives in Fair Value Hedging Relationships: | ||||
Interest rate contracts (in USD) | 17 | 230 | ||
Derivatives Not Designated as Hedging Instruments: | ||||
Electricity contract (in Megawatt Hours) | 1 | — | ||
Foreign exchange contracts (Sell / Buy; denominated in sell notional): | ||||
European euro / British pounds | 25 | — | ||
Indian rupee / U.S. dollar | 49 | 43 | ||
Mexican peso / U.S. dollar | 131 | 187 | ||
U.S. dollar / Brazilian real | — | 11 | ||
Interest rate contracts (in USD) | 38 | — |
(a) | These contracts had maturities of three years or less as of December 31, 2015. |
Gain (Loss) Recognized in AOCI on Derivatives (Effective Portion) | |||||||||
In millions | 2015 | 2014 | 2013 | ||||||
Foreign exchange contracts | $ | (3 | ) | $ | 10 | $ | — | ||
Total | $ | (3 | ) | $ | 10 | $ | — |
Gain (Loss) Reclassified from AOCI into Income (Effective Portion) | Location of Gain (Loss) Reclassified from AOCI into Income (Effective Portion) | ||||||||||
In millions | 2015 | 2014 | 2013 | ||||||||
Derivatives in Cash Flow Hedging Relationships: | |||||||||||
Foreign exchange contracts | $ | (12 | ) | $ | 4 | $ | 7 | Cost of products sold | |||
Total | $ | (12 | ) | $ | 4 | $ | 7 |
Gain (Loss) Recognized in Income | Location of Gain (Loss) in Consolidated Statement of Operations | |||||||||||||||
In millions | 2015 | 2014 | 2013 | |||||||||||||
Derivatives in Fair Value Hedging Relationships: | ||||||||||||||||
Interest rate contracts | $ | 3 | $ | 1 | $ | (1 | ) | Interest expense, net | ||||||||
Debt | (3 | ) | (1 | ) | 1 | Interest expense, net | ||||||||||
Total | $ | — | $ | — | $ | — | ||||||||||
Derivatives Not Designated as Hedging Instruments: | ||||||||||||||||
Electricity Contracts | $ | (7 | ) | $ | (2 | ) | $ | 4 | Cost of products sold | |||||||
Embedded derivatives | — | — | (1 | ) | Interest expense, net | |||||||||||
Foreign exchange contracts | (4 | ) | (1 | ) | (5 | ) | Cost of products sold | |||||||||
Interest rate contracts | 13 | (a) | 12 | (b) | 21 | Interest expense, net | ||||||||||
Total | $ | 2 | $ | 9 | $ | 19 |
(a) | Excluding gain of $3 million related to debt reduction recorded to Restructuring and other charges. |
(b) | Excluding gain of $7 million, net related to debt issuance and debt reduction recorded to Restructuring and other charges. |
2015 | 2014 | |||||||||||||||||||||||
In millions | Issued | Terminated | Undesignated | Issued | Terminated | Undesignated | ||||||||||||||||||
Second Quarter | $ | — | $ | 175 | $ | 38 | $ | — | $ | — | $ | — | ||||||||||||
First Quarter | — | — | — | 55 | — | — | ||||||||||||||||||
Total | $ | — | $ | 175 | $ | 38 | $ | 55 | $ | — | $ | — |
Assets | Liabilities | |||||||||||||||
In millions | December 31, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2014 | ||||||||||||
Derivatives designated as hedging instruments | ||||||||||||||||
Foreign exchange contracts – cash flow | $ | 5 | (a) | $ | 16 | (b) | $ | 1 | (c) | $ | 14 | (c) | ||||
Total derivatives designated as hedging instruments | $ | 5 | $ | 16 | $ | 1 | $ | 14 | ||||||||
Derivatives not designated as hedging instruments | ||||||||||||||||
Electricity contract | $ | — | $ | — | $ | 7 | (d) | $ | 2 | (c) | ||||||
Foreign exchange contracts | — | 1 | (a) | — | 2 | (c) | ||||||||||
Total derivatives not designated as hedging instruments | $ | — | $ | 1 | $ | 7 | $ | 4 | ||||||||
Total derivatives | $ | 5 | $ | 17 | $ | 8 | $ | 18 |
(a) | Included in Other current assets in the accompanying consolidated balance sheet. |
(b) | Includes $14 million recorded in Other current assets and $2 million recorded in Deferred charges and other assets in the accompanying consolidated balance sheet. |
(c) | Included in Other accrued liabilities in the accompanying consolidated balance sheet. |
(d) | Includes $4 million recorded in Other accrued liabilities and $3 million recorded in Other liabilities in the accompanying consolidated balance sheet. |
Common Stock | ||||
In thousands | Issued | Treasury | ||
Balance at January 1, 2013 | 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 | ||
Issuance of stock for various plans, net | 1,632 | (4,668 | ) | |
Repurchase of stock | — | 22,534 | ||
Balance at December 31, 2014 | 448,854 | 28,734 | ||
Issuance of stock for various plans, net | 62 | (4,230 | ) | |
Repurchase of stock | — | 12,272 | ||
Balance at December 31, 2015 | 448,916 | 36,776 |
2015 | 2014 | |||||||||||
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 | $ | 14,741 | $ | 233 | $ | 12,903 | $ | 228 | ||||
Service cost | 161 | 6 | 145 | 5 | ||||||||
Interest cost | 597 | 10 | 600 | 13 | ||||||||
Curtailments | — | — | — | (4 | ) | |||||||
Settlements | (43 | ) | (12 | ) | — | — | ||||||
Actuarial loss (gain) | (254 | ) | (1 | ) | 1,755 | 12 | ||||||
Divestitures | — | — | (23 | ) | — | |||||||
Other | — | — | — | 12 | ||||||||
Plan amendments | — | — | 133 | — | ||||||||
Benefits paid | (764 | ) | (7 | ) | (772 | ) | (13 | ) | ||||
Effect of foreign currency exchange rate movements | — | (25 | ) | — | (20 | ) | ||||||
Benefit obligation, December 31 | $ | 14,438 | $ | 204 | $ | 14,741 | $ | 233 | ||||
Change in plan assets: | ||||||||||||
Fair value of plan assets, January 1 | $ | 10,918 | $ | 180 | $ | 10,706 | $ | 181 | ||||
Actual return on plan assets | (1 | ) | 4 | 593 | 13 | |||||||
Company contributions | 813 | 9 | 391 | 8 | ||||||||
Benefits paid | (764 | ) | (7 | ) | (772 | ) | (13 | ) | ||||
Settlements | (43 | ) | (12 | ) | — | — | ||||||
Other | — | — | — | 6 | ||||||||
Effect of foreign currency exchange rate movements | — | (19 | ) | — | (15 | ) | ||||||
Fair value of plan assets, December 31 | $ | 10,923 | $ | 155 | $ | 10,918 | $ | 180 | ||||
Funded status, December 31 | $ | (3,515 | ) | $ | (49 | ) | $ | (3,823 | ) | $ | (53 | ) |
Amounts recognized in the consolidated balance sheet: | ||||||||||||
Non-current asset | $ | — | $ | 7 | $ | — | $ | 8 | ||||
Current liability | (22 | ) | (2 | ) | (62 | ) | (3 | ) | ||||
Non-current liability | (3,493 | ) | (54 | ) | (3,761 | ) | (58 | ) | ||||
$ | (3,515 | ) | $ | (49 | ) | $ | (3,823 | ) | $ | (53 | ) |
Amounts recognized in accumulated other comprehensive income under ASC 715 (pre-tax): | ||||||||||||
Prior service cost | $ | 166 | $ | — | $ | 209 | $ | — | ||||
Net actuarial loss | 4,899 | 42 | 4,812 | 40 | ||||||||
$ | 5,065 | $ | 42 | $ | 5,021 | $ | 40 |
In millions | U.S. Plans | Non- U.S. Plans | ||||
Current year actuarial (gain) loss | $ | 530 | $ | 5 | ||
Amortization of actuarial loss | (428 | ) | (1 | ) | ||
Amortization of prior service cost | (43 | ) | — | |||
Settlements | (15 | ) | — | |||
Effect of foreign currency exchange rate movements | — | (2 | ) | |||
$ | 44 | $ | 2 |
2015 | 2014 | |||||||||||
In millions | U.S. Plans | Non-U.S. Plans | U.S. Plans | Non-U.S. Plans | ||||||||
Projected benefit obligation | $ | 14,438 | $ | 182 | $ | 14,741 | $ | 196 | ||||
Accumulated benefit obligation | 14,282 | 168 | 14,559 | 176 | ||||||||
Fair value of plan assets | 10,923 | 126 | 10,918 | 135 |
2015 | 2014 | 2013 | ||||||||||||||||
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 | $ | 161 | $ | 6 | $ | 145 | $ | 5 | $ | 188 | $ | 4 | ||||||
Interest cost | 597 | 10 | 600 | 13 | 576 | 11 | ||||||||||||
Expected return on plan assets | (783 | ) | (11 | ) | (762 | ) | (14 | ) | (738 | ) | (11 | ) | ||||||
Actuarial loss / (gain) | 428 | 1 | 374 | — | 485 | 1 | ||||||||||||
Amortization of prior service cost | 43 | — | 30 | — | 34 | — | ||||||||||||
Curtailment gain | — | — | — | (4 | ) | — | — | |||||||||||
Settlement loss | 15 | — | — | — | — | — | ||||||||||||
Net periodic pension expense (a) | $ | 461 | $ | 6 | $ | 387 | $ | — | $ | 545 | $ | 5 |
2015 | 2014 | 2013 | ||||||||||
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 | 4.40 | % | 4.64 | % | 4.10 | % | 4.72 | % | 4.90 | % | 5.07 | % |
Rate of compensation increase | 3.75 | % | 4.12 | % | 3.75 | % | 4.03 | % | 3.75 | % | 4.13 | % |
Actuarial assumptions used to determine net periodic pension cost for years ended December 31: | ||||||||||||
Discount rate (a) | 4.10 | % | 4.72 | % | 4.65 | % | 5.07 | % | 4.10 | % | 4.96 | % |
Expected long-term rate of return on plan assets (b) | 7.75 | % | 6.64 | % | 7.75 | % | 7.53 | % | 8.00 | % | 7.04 | % |
Rate of compensation increase | 3.75 | % | 4.03 | % | 3.75 | % | 4.13 | % | 3.75 | % | 3.17 | % |
(b) | Represents the expected rate of return for International Paper's qualified pension plan for 2014 and 2013. The weighted average rate for the Temple-Inland Retirement Plan was 7.00% and 6.16% for 2014 and 2013, respectively. |
In millions | 2016 | ||
Expense/(Income): | |||
Discount rate | $ | 36 | |
Expected long-term rate of return on plan assets | 27 | ||
Rate of compensation increase | (2 | ) |
Asset Class | 2015 | 2014 | Target Allocations | ||
Equity accounts | 48 | % | 47 | % | 43% - 54% |
Fixed income accounts | 33 | % | 33 | % | 25% - 35% |
Real estate accounts | 10 | % | 10 | % | 7% - 13% |
Other | 9 | % | 10 | % | 8% - 17% |
Total | 100 | % | 100 | % |
Fair Value Measurement at December 31, 2015 | ||||||||||||
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 | $ | 2,150 | $ | 1,382 | $ | 768 | $ | — | ||||
Equities – international | 2,563 | 1,818 | 745 | — | ||||||||
Corporate bonds | 1,286 | — | 1,286 | — | ||||||||
Government securities | 518 | — | 518 | — | ||||||||
Mortgage backed securities | 217 | — | 217 | — | ||||||||
Other fixed income | 275 | — | 265 | 10 | ||||||||
Commodities | 118 | — | 118 | — | ||||||||
Hedge funds | 894 | — | — | 894 | ||||||||
Private equity | 492 | — | — | 492 | ||||||||
Real estate | 1,094 | — | — | 1,094 | ||||||||
Risk parity funds | 341 | — | 1 | 340 | ||||||||
Cash and cash equivalents | 975 | 975 | — | — | ||||||||
Total Investments | $ | 10,923 | $ | 4,175 | $ | 3,918 | $ | 2,830 |
Fair Value Measurement at December 31, 2014 | ||||||||||||
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 | $ | 2,268 | $ | 1,380 | $ | 888 | $ | — | ||||
Equities – international | 2,397 | 1,815 | 582 | — | ||||||||
Corporate bonds | 1,230 | — | 1,230 | — | ||||||||
Government securities | 1,282 | — | 1,282 | — | ||||||||
Mortgage backed securities | 172 | — | 172 | — | ||||||||
Other fixed income | 207 | — | 197 | 10 | ||||||||
Commodities | 170 | — | 170 | — | ||||||||
Hedge funds | 867 | — | — | 867 | ||||||||
Private equity | 519 | — | — | 519 | ||||||||
Real estate | 1,101 | — | — | 1,101 | ||||||||
Risk parity funds | 376 | — | — | 376 | ||||||||
Cash and cash equivalents | 329 | 329 | — | — | ||||||||
Total Investments | $ | 10,918 | $ | 3,524 | $ | 4,521 | $ | 2,873 |
In millions | Other fixed income | Hedge funds | Private equity | Real estate | Risk parity funds | Total | ||||||||||||
Beginning balance at December 31, 2014 | $ | 10 | $ | 867 | $ | 519 | $ | 1,101 | $ | 376 | $ | 2,873 | ||||||
Actual return on plan assets: | ||||||||||||||||||
Relating to assets still held at the reporting date | — | 27 | 27 | 41 | (39 | ) | 56 | |||||||||||
Relating to assets sold during the period | — | 3 | (9 | ) | 27 | (7 | ) | 14 | ||||||||||
Purchases, sales and settlements | — | (3 | ) | (45 | ) | (75 | ) | 10 | (113 | ) | ||||||||
Transfers in and/or out of Level 3 | — | — | — | — | — | — | ||||||||||||
Ending balance at December 31, 2015 | $ | 10 | $ | 894 | $ | 492 | $ | 1,094 | $ | 340 | $ | 2,830 |
In millions | |||
2016 | $ | 782 | |
2017 | 792 | ||
2018 | 803 | ||
2019 | 818 | ||
2020 | 832 | ||
2021 – 2025 | 4,365 |
In millions | 2015 | 2014 | 2013 | |||||||||||||||
U.S. Plans | Non- U.S. Plans | U.S. Plans | Non- U.S. Plans | U.S. Plans | Non- U.S. Plans | |||||||||||||
Service cost | $ | 1 | $ | 1 | $ | 1 | $ | 1 | $ | 2 | $ | 2 | ||||||
Interest cost | 11 | 5 | 14 | 6 | 14 | 5 | ||||||||||||
Actuarial loss | 6 | 1 | 5 | 1 | 7 | — | ||||||||||||
Amortization of prior service credits | (10 | ) | (2 | ) | (13 | ) | (1 | ) | (24 | ) | — | |||||||
Net postretirement (benefit) expense (a) | $ | 8 | $ | 5 | $ | 7 | $ | 7 | $ | (1 | ) | $ | 7 |
2015 | 2014 | 2013 | ||||||||||
U.S. Plans | Non- U.S. Plans | U.S. Plans | Non- U.S. Plans | U.S. Plans | Non- U.S. Plans | |||||||
Discount rate | 3.90 | % | 11.52 | % | 4.50 | % | 11.94 | % | 3.70 | % | 8.43 | % |
2015 | 2014 | |||||||
U.S. Plans | Non- U.S. Plans | U.S. Plans | Non- U.S. Plans | |||||
Discount rate | 4.20 | % | 12.23 | % | 3.90 | % | 11.52 | % |
Health care cost trend rate assumed for next year | 7.00 | % | 11.41 | % | 7.00 | % | 11.38 | % |
Rate that the cost trend rate gradually declines to | 5.00 | % | 5.94 | % | 5.00 | % | 6.11 | % |
Year that the rate reaches the rate it is assumed to remain | 2022 | 2026 | 2022 | 2025 |
In millions | 2015 | 2014 | ||||||||||
U.S. Plans | Non- U.S. Plans | U.S. Plans | Non- U.S. Plans | |||||||||
Change in projected benefit obligation: | ||||||||||||
Benefit obligation, January 1 | $ | 306 | $ | 59 | $ | 322 | $ | 72 | ||||
Service cost | 1 | 1 | 1 | 1 | ||||||||
Interest cost | 11 | 5 | 14 | 6 | ||||||||
Participants’ contributions | 12 | — | 15 | — | ||||||||
Actuarial (gain) loss | — | (1 | ) | 14 | 19 | |||||||
Other | — | — | — | (26 | ) | |||||||
Plan amendments | — | 1 | — | (7 | ) | |||||||
Benefits paid | (57 | ) | (1 | ) | (62 | ) | (1 | ) | ||||
Less: Federal subsidy | 2 | — | 2 | — | ||||||||
Currency Impact | — | (19 | ) | — | (5 | ) | ||||||
Benefit obligation, December 31 | $ | 275 | $ | 45 | $ | 306 | $ | 59 | ||||
Change in plan assets: | ||||||||||||
Fair value of plan assets, January 1 | $ | — | $ | — | $ | — | $ | — | ||||
Company contributions | 45 | 1 | 47 | 1 | ||||||||
Participants’ contributions | 12 | — | 15 | — | ||||||||
Benefits paid | (57 | ) | (1 | ) | (62 | ) | (1 | ) | ||||
Fair value of plan assets, December 31 | $ | — | $ | — | $ | — | $ | — | ||||
Funded status, December 31 | $ | (275 | ) | $ | (45 | ) | $ | (306 | ) | $ | (59 | ) |
Amounts recognized in the consolidated balance sheet under ASC 715: | ||||||||||||
Current liability | $ | (29 | ) | $ | (2 | ) | $ | (33 | ) | $ | (2 | ) |
Non-current liability | (246 | ) | (43 | ) | (273 | ) | (57 | ) | ||||
$ | (275 | ) | $ | (45 | ) | $ | (306 | ) | $ | (59 | ) | |
Amounts recognized in accumulated other comprehensive income under ASC 715 (pre-tax): | ||||||||||||
Net actuarial loss (gain) | $ | 42 | $ | 15 | $ | 44 | $ | 23 | ||||
Prior service credit | (12 | ) | (2 | ) | (22 | ) | (5 | ) | ||||
$ | 30 | $ | 13 | $ | 22 | $ | 18 |
In millions | U.S. Plans | Non- U.S. Plans | ||||
Current year actuarial gain | $ | 4 | $ | — | ||
Amortization of actuarial (loss) gain | (6 | ) | (1 | ) | ||
Current year prior service cost | — | 1 | ||||
Amortization of prior service credit | 10 | 2 | ||||
Currency impact | — | (7 | ) | |||
$ | 8 | $ | (5 | ) |
In millions | Benefit Payments | Subsidy Receipts | Benefit Payments | ||||||
U.S. Plans | U.S. Plans | Non- U.S. Plans | |||||||
2016 | $ | 31 | $ | 1 | $ | 2 | |||
2017 | 28 | 1 | 2 | ||||||
2018 | 27 | 1 | 2 | ||||||
2019 | 25 | 1 | 2 | ||||||
2020 | 24 | 1 | 3 | ||||||
2021 – 2025 | 98 | 6 | 21 |
Options (a,b) | Weighted Average Exercise Price | Weighted Average Remaining Life (years) | Aggregate Intrinsic Value (thousands) | ||||||
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 | |||||
Granted | 3,247 | 49.13 | |||||||
Exercised | (1,634,858 | ) | 39.80 | ||||||
Expired | (49,286 | ) | 41.50 | ||||||
Outstanding at December 31, 2014 | 71,892 | 39.03 | 0.18 | 1,046 | |||||
Granted | — | — | |||||||
Exercised | (62,477 | ) | 39.05 | ||||||
Expired | (9,415 | ) | 38.92 | ||||||
Outstanding at December 31, 2015 | — | $— | 0.00 | $— |
(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, 2015 | |
Expected volatility | 19.01%-36.02% |
Risk-free interest rate | 0.21%-1.10% |
Share/Units | Weighted Average Grant Date Fair Value | ||||
Outstanding at December 31, 2012 | 8,660,855 | $28.37 | |||
Granted | 3,148,445 | 40.76 | |||
Shares issued | (3,262,760 | ) | 32.48 | ||
Forfeited | (429,051 | ) | 34.58 | ||
Outstanding at December 31, 2013 | 8,117,489 | 31.20 | |||
Granted | 3,682,663 | 46.82 | |||
Shares issued | (4,025,111 | ) | 37.18 | ||
Forfeited | (499,107 | ) | 43.10 | ||
Outstanding at December 31, 2014 | 7,275,934 | 34.98 | |||
Granted | 1,863,623 | 53.25 | |||
Shares issued | (2,959,160 | ) | 37.09 | ||
Forfeited | (322,664 | ) | 53.97 | ||
Outstanding at December 31, 2015 | 5,857,733 | $38.69 |
Shares | Weighted Average Grant Date Fair Value | ||||
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 | |||
Granted | 89,500 | 48.19 | |||
Shares issued | (83,275 | ) | 33.78 | ||
Forfeited | (4,000 | ) | 45.88 | ||
Outstanding at December 31, 2014 | 114,599 | 47.03 | |||
Granted | 36,300 | 50.06 | |||
Shares issued | (27,365 | ) | 45.35 | ||
Forfeited | (3,166 | ) | 50.04 | ||
Outstanding at December 31, 2015 | 120,368 | $48.24 |
In millions | 2015 | 2014 | 2013 | ||||||
Total stock-based compensation expense (included in selling and administrative expense) | $ | 114 | $ | 118 | $ | 137 | |||
Income tax benefits related to stock-based compensation | 88 | 92 | 74 |
In millions | 2015 | 2014 | |||||
Current assets | $ | 455 | $ | 458 | |||
Noncurrent assets | 968 | 1,223 | |||||
Current liabilities | 665 | 899 | |||||
Noncurrent liabilities | 715 | 742 | |||||
Noncontrolling interests | 21 | 15 |
In millions | 2015 | 2014 | 2013 | ||||||||
Net sales | $ | 1,931 | $ | 2,138 | $ | 1,897 | |||||
Gross profit | 971 | 772 | 562 | ||||||||
Income from continuing operations | 254 | (387 | ) | (76 | ) | ||||||
Net income attributable to Ilim | 237 | (360 | ) | (71 | ) |
In millions | 2015 | 2014 | 2013 | ||||||||
Industrial Packaging | $ | 14,484 | $ | 14,944 | $ | 14,810 | |||||
Printing Papers | 5,031 | 5,720 | 6,205 | ||||||||
Consumer Packaging | 2,940 | 3,403 | 3,435 | ||||||||
Corporate and Intersegment Sales | (90 | ) | (450 | ) | (967 | ) | |||||
Net Sales | $ | 22,365 | $ | 23,617 | $ | 23,483 |
In millions | 2015 | 2014 | 2013 | ||||||||
Industrial Packaging | $ | 1,853 | $ | 1,896 | $ | 1,801 | |||||
Printing Papers | 533 | (16 | ) | 271 | |||||||
Consumer Packaging | (25 | ) | 178 | 161 | |||||||
Operating Profit | 2,361 | 2,058 | 2,233 | ||||||||
Interest expense, net | (555 | ) | (601 | ) | (612 | ) | |||||
Noncontrolling interests / equity earnings adjustment (a) | (8 | ) | (2 | ) | 1 | ||||||
Corporate items, net | (36 | ) | (51 | ) | (61 | ) | |||||
Restructuring and other charges | (238 | ) | (282 | ) | (10 | ) | |||||
Net gains (losses) on sales and impairments of businesses | — | (38 | ) | — | |||||||
Non-operating pension expense | (258 | ) | (212 | ) | (323 | ) | |||||
Earnings (Loss) From Continuing Operations Before Income Taxes and Equity Earnings | $ | 1,266 | $ | 872 | $ | 1,228 |
In millions | 2015 | 2014 | 2013 | ||||||||
Industrial Packaging | $ | — | $ | 7 | $ | (2 | ) | ||||
Printing Papers | — | 554 | 118 | ||||||||
Consumer Packaging | 10 | 8 | 45 | ||||||||
Corporate | 242 | 277 | (5 | ) | |||||||
Restructuring and Other Charges | $ | 252 | $ | 846 | $ | 156 |
In millions | 2015 | 2014 | |||||
Industrial Packaging | $ | 14,483 | $ | 14,852 | |||
Printing Papers | 4,696 | 5,393 | |||||
Consumer Packaging | 2,115 | 3,249 | |||||
Corporate and other (b) | 9,293 | 5,190 | |||||
Assets | $ | 30,587 | $ | 28,684 |
In millions | 2015 | 2014 | 2013 | ||||||||
Industrial Packaging | $ | 858 | $ | 754 | $ | 629 | |||||
Printing Papers | 361 | 318 | 294 | ||||||||
Consumer Packaging | 216 | 233 | 208 | ||||||||
Distribution (c) | — | — | 9 | ||||||||
Subtotal | 1,435 | 1,305 | 1,140 | ||||||||
Corporate and other (b) | 52 | 61 | 58 | ||||||||
Total | $ | 1,487 | $ | 1,366 | $ | 1,198 |
In millions | 2015 | 2014 | 2013 | ||||||||
Industrial Packaging | $ | 725 | $ | 775 | $ | 805 | |||||
Printing Papers | 307 | 367 | 446 | ||||||||
Consumer Packaging | 215 | 223 | 206 | ||||||||
Corporate | 47 | 41 | 74 | ||||||||
Depreciation and Amortization | $ | 1,294 | $ | 1,406 | $ | 1,531 |
In millions | 2015 | 2014 | 2013 | ||||||||
Industrial Packaging | $ | 14,421 | $ | 14,837 | $ | 14,729 | |||||
Printing Papers | 4,919 | 5,360 | 5,443 | ||||||||
Consumer Packaging | 2,907 | 3,307 | 3,311 | ||||||||
Other | 118 | 113 | — | ||||||||
Net Sales | $ | 22,365 | $ | 23,617 | $ | 23,483 |
In millions | 2015 | 2014 | 2013 | ||||||||
United States (f) | $ | 16,554 | $ | 16,645 | $ | 16,371 | |||||
EMEA | 2,770 | 3,273 | 3,250 | ||||||||
Pacific Rim and Asia | 1,501 | 1,951 | 2,114 | ||||||||
Americas, other than U.S. | 1,540 | 1,748 | 1,748 | ||||||||
Net Sales | $ | 22,365 | $ | 23,617 | $ | 23,483 |
In millions | 2015 | 2014 | |||||
United States | $ | 9,683 | $ | 9,476 | |||
EMEA | 827 | 926 | |||||
Pacific Rim and Asia | 353 | 897 | |||||
Americas, other than U.S. | 1,085 | 1,553 | |||||
Corporate | 398 | 383 | |||||
Long-Lived Assets | $ | 12,346 | $ | 13,235 |
(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) | The xpedx business, which historically represented the Company's Distribution reportable segment, was spun off July 1, 2014. |
(d) | Excludes accelerated depreciation related to the closure and/or repurposing of mills. |
(e) | Net sales are attributed to countries based on the location of the seller. |
(f) | Export sales to unaffiliated customers were $2.0 billion in 2015, $2.3 billion in 2014 and $2.4 billion in 2013. |
(g) | 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 | |||||||||||||||
2015 | ||||||||||||||||||||
Net sales | $ | 5,517 | $ | 5,714 | $ | 5,691 | $ | 5,443 | $ | 22,365 | ||||||||||
Gross margin (a) | 1,673 | 1,746 | 1,800 | 1,678 | 6,897 | |||||||||||||||
Earnings (loss) from continuing operations before income taxes and equity earnings | 406 | 266 | (b) | 329 | (b) | 265 | (b) | 1,266 | (b) | |||||||||||
Gain (loss) from discontinued operations | — | — | — | — | — | |||||||||||||||
Net earnings (loss) attributable to International Paper Company | 313 | 227 | (b,c) | 220 | (b,c) | 178 | (b,c) | 938 | (b,c) | |||||||||||
Basic earnings (loss) per share attributable to International Paper Company common shareholders: | ||||||||||||||||||||
Earnings (loss) from continuing operations | $ | 0.74 | $ | 0.54 | (b) | $ | 0.53 | (b) | $ | 0.43 | (b) | $ | 2.25 | (b) | ||||||
Gain (loss) from discontinued operations | — | — | — | — | — | |||||||||||||||
Net earnings (loss) | 0.74 | 0.54 | (b,c) | 0.53 | (b,c) | 0.43 | (b,c) | 2.25 | (b,c) | |||||||||||
Diluted earnings (loss) per share attributable to International Paper Company common shareholders: | ||||||||||||||||||||
Earnings (loss) from continuing operations | 0.74 | 0.54 | (b) | 0.53 | (b) | 0.43 | (b) | 2.23 | (b) | |||||||||||
Gain (loss) from discontinued operations | — | — | — | — | — | |||||||||||||||
Net earnings (loss) | 0.74 | 0.54 | (b,c) | 0.53 | (b,c) | 0.43 | (b,c) | 2.23 | (b,c) | |||||||||||
Dividends per share of common stock | 0.4000 | 0.4000 | 0.4000 | 0.4400 | 1.6400 | |||||||||||||||
Common stock prices | ||||||||||||||||||||
High | $ | 57.90 | $ | 56.49 | $ | 49.49 | $ | 44.83 | $ | 57.90 | ||||||||||
Low | 51.35 | 47.39 | 37.11 | 36.76 | 36.76 | |||||||||||||||
2014 | ||||||||||||||||||||
Net sales | $ | 5,724 | $ | 5,899 | $ | 6,051 | $ | 5,943 | $ | 23,617 | ||||||||||
Gross margin (a) | 1,690 | 1,839 | 1,996 | 1,838 | 7,363 | |||||||||||||||
Earnings (loss) from continuing operations before income taxes and equity earnings | (139 | ) | (d) | 152 | (d) | 552 | (d) | 307 | (d) | 872 | (d) | |||||||||
Gain (loss) from discontinued operations | (7 | ) | (e) | (13 | ) | (e) | 16 | (e) | (9 | ) | (e) | (13 | ) | (e) | ||||||
Net earnings (loss) attributable to International Paper Company | (95 | ) | (d-f) | 161 | (d-f) | 355 | (d-f) | 134 | (d-f) | 555 | (d-f) | |||||||||
Basic earnings (loss) per share attributable to International Paper Company common shareholders: | ||||||||||||||||||||
Earnings (loss) from continuing operations | $ | (0.20 | ) | (d) | $ | 0.40 | (d) | $ | 0.80 | (d) | $ | 0.34 | (d) | $ | 1.33 | (d) | ||||
Gain (loss) from discontinued operations | (0.01 | ) | (e) | (0.03 | ) | (e) | 0.04 | (e) | (0.02 | ) | (e) | (0.03 | ) | (e) | ||||||
Net earnings (loss) | (0.21 | ) | (d-f) | 0.37 | (d-f) | 0.84 | (d-f) | 0.32 | (d-f) | 1.30 | (d-f) | |||||||||
Diluted earnings (loss) per share attributable to International Paper Company common shareholders: | ||||||||||||||||||||
Earnings (loss) from continuing operations | (0.20 | ) | (d) | 0.40 | (d) | 0.79 | (d) | 0.34 | (d) | 1.31 | (d) | |||||||||
Gain (loss) from discontinued operations | (0.01 | ) | (e) | (0.03 | ) | (e) | 0.04 | (e) | (0.02 | ) | (e) | (0.02 | ) | (e) | ||||||
Net earnings (loss) | (0.21 | ) | (d-f) | 0.37 | (d-f) | 0.83 | (d-f) | 0.32 | (d-f) | 1.29 | (d-f) | |||||||||
Dividends per share of common stock | 0.3500 | 0.3500 | 0.3500 | 0.4000 | 1.4500 | |||||||||||||||
Common stock prices | ||||||||||||||||||||
High | $ | 49.71 | $ | 50.65 | $ | 51.98 | $ | 55.73 | $ | 55.73 | ||||||||||
Low | 44.43 | 44.24 | 46.77 | 44.50 | 44.24 |
(a) | Gross margin represents net sales less cost of products sold, excluding depreciation, amortization and cost of timber harvested. |
(b) | Includes the following pre-tax charges (gains): |
2015 | ||||||||||||||||
In millions | Q1 | Q2 | Q3 | Q4 | ||||||||||||
Riegelwood mill conversion costs, net of proceeds from sale of the Carolina Coated Bristols brand | $ | — | $ | (14 | ) | $ | 7 | $ | 15 | |||||||
Timber monetization restructuring | — | — | 17 | (1 | ) | |||||||||||
Early debt extinguishment costs | — | 207 | — | — | ||||||||||||
Refund and state tax credits | — | (4 | ) | — | — | |||||||||||
IP-Sun JV impairment | — | — | 186 | (12 | ) | |||||||||||
Legal reserve adjustment | — | — | — | 15 | ||||||||||||
Impairment of Orsa goodwill and trade name intangible | — | — | — | 137 | ||||||||||||
Other items | — | 1 | 1 | 4 | ||||||||||||
Total | $ | — | $ | 190 | $ | 211 | $ | 158 |
2015 | ||||||||||||||||
Q1 | Q2 | Q3 | Q4 | |||||||||||||
Tax expense for cash pension | $ | — | $ | 23 | $ | — | $ | — | ||||||||
Tax benefit related to IP-Sun JV | — | — | (67 | ) | — | |||||||||||
Other items | — | 5 | — | 2 | ||||||||||||
Total | $ | — | $ | 28 | $ | (67 | ) | $ | 2 |
2014 | ||||||||||||||||
Q1 | Q2 | Q3 | Q4 | |||||||||||||
Temple-Inland integration | $ | 12 | $ | 2 | $ | 1 | $ | 1 | ||||||||
Courtland mill shutdown | 495 | 49 | 3 | 7 | ||||||||||||
Early debt extinguishment costs | — | 262 | 13 | 1 | ||||||||||||
India legal contingency resolution | — | — | (20 | ) | — | |||||||||||
Multi-employer pension plan withdrawal liability | — | — | 35 | — | ||||||||||||
Foreign tax amnesty program | — | — | 32 | — | ||||||||||||
Asia Industrial Packaging goodwill impairment | — | — | — | 100 | ||||||||||||
Loss on sale by investee and impairment of investment | — | — | — | 47 | ||||||||||||
Other items | 4 | (4 | ) | 13 | (1 | ) | ||||||||||
Total | $ | 511 | $ | 309 | $ | 77 | $ | 155 |
2014 | ||||||||||||||||
Q1 | Q2 | Q3 | Q4 | |||||||||||||
xpedx spinoff | $ | 10 | $ | 20 | $ | (14 | ) | $ | — | |||||||
Building Products divestiture | 2 | — | (2 | ) | 9 | |||||||||||
xpedx restructuring | — | (1 | ) | — | — | |||||||||||
Total | $ | 12 | $ | 19 | $ | (16 | ) | $ | 9 |
2014 | ||||||||||||||||
Q1 | Q2 | Q3 | Q4 | |||||||||||||
State legislative tax change | $ | 10 | $ | — | $ | — | $ | — | ||||||||
Internal restructuring | — | — | — | (90 | ) | |||||||||||
Other items | (1 | ) | — | — | — | |||||||||||
Total | $ | 9 | $ | — | $ | — | $ | (90 | ) |
• | 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 statements in Item 8. Schedules not included with this additional financial data have been omitted because they are not applicable, or the required information is shown in the consolidated financial statements or the notes thereto. |
Consolidated Schedule: II-Valuation and Qualifying Accounts. | 90 |
(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 February 9, 2016 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K dated February 8, 2016). |
(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 | ) | Supplemental Indenture (including the form of Notes), dated as of June 10, 2014, 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 June 10, 2014). |
(4.8 | ) | Supplemental Indenture (including the form of Notes), dated as of May 26, 2015, 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 May 26, 2015). |
(4.9 | ) | 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 (ICP) (incorporated by reference to Exhibit 99.1 to the Company's Current Report on Form 8-K dated February 10, 2014). + |
(10.2 | ) | 2015 Management Incentive Plan (incorporated by reference to Exhibit 10.2 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014). + |
(10.3 | ) | 2016 Management Incentive Plan (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K dated February 8, 2016) + |
(10.4 | ) | Amended and Restated 2009 Executive Management Incentive Plan, including 2015 Exhibits thereto (incorporated by reference to Exhibit 10.4 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014). + |
(10.5 | ) | 2016 Exhibits to the Amended and Restated 2009 Executive Management Incentive Plan. * + |
(10.6 | ) | 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). + |
(10.7 | ) | Form of Restricted Stock Award Agreement. (incorporated by reference to Exhibit 10.8 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013). + |
(10.8 | ) | Form of Restricted Stock Unit Award Agreement (cash settled). (incorporated by reference to Exhibit 10.9 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013). + |
(10.9 | ) | Form of Restricted Stock Unit Award Agreement (stock settled). (incorporated by reference to Exhibit 10.10 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013). + |
(10.10 | ) | Form of Performance Share Plan award certificate. * + |
(10.11 | ) | 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). + |
(10.12 | ) | 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). + |
(10.13 | ) | 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). + |
(10.14 | ) | 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). + |
(10.15 | ) | 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). + |
(10.16 | ) | 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). + |
(10.17 | ) | 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). + |
(10.18 | ) | 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). + |
(10.19 | ) | 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). + |
(10.20 | ) | 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). + |
(10.21 | ) | 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). + |
(10.22 | ) | 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). + |
(10.23 | ) | 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). + |
(10.24 | ) | 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). + |
(10.25 | ) | 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). + |
(10.26 | ) | Time Sharing Agreement, dated October 17, 2014 (and effective November 1, 2014), by and between Mark S. Sutton and International Paper Company (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K dated October 14, 2014). + |
(10.27 | ) | Five-Year Credit Agreement dated as of August 5, 2014, among International Paper Company, JPMorgan Chase Bank, N.A., individually and as administrative agent, and certain lenders (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014). |
(10.28 | ) | Equity Transfer Agreement dated October 7, 2015, between International Paper Investment (Shanghai) Co., Ltd. and Shandong Sun Holding Group Co., Ltd. * |
(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, 2015). * |
(31.1 | ) | Certification by Mark S. Sutton, 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, 2015 | |||||||||||||||||
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 | $ | 82 | $ | 11 | $ | — | (23)(a) | $ | 70 | ||||||||
Restructuring reserves | 16 | 5 | — | (11)(b) | 10 |
For the Year Ended December 31, 2014 | |||||||||||||||||
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 | $ | 109 | $ | 11 | $ | — | (38)(a) | $ | 82 | ||||||||
Restructuring reserves | 51 | 41 | — | (76)(b) | 16 |
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 | $ | 38 | $ | — | (48)(a) | $ | 109 | ||||||||
Restructuring reserves | 17 | 46 | — | (12)(b) | 51 |
(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 25, 2016 | |||
By: | /S/ SHARON R. RYAN | ||
Sharon R. Ryan | |||
Senior Vice President, General Counsel and Corporate Secretary |
Signature | Title | Date | ||
/S/ MARK S. SUTTON | Chairman of the Board & Chief Executive Officer and Director | February 25, 2016 | ||
Mark S. Sutton | ||||
/S/ DAVID J. BRONCZEK | Director | February 25, 2016 | ||
David J. Bronczek | ||||
/S/ WILLIAM J. BURNS | Director | February 25, 2016 | ||
Willliam J. Burns | ||||
/S/ AHMET C. DORDUNCU | Director | February 25, 2016 | ||
Ahmet C. Dorduncu | ||||
/S/ ILENE S. GORDON | Director | February 25, 2016 | ||
Ilene S. Gordon | ||||
/S/ JAY L. JOHNSON | Director | February 25, 2016 | ||
Jay L. Johnson | ||||
/S/ STACEY J. MOBLEY | Director | February 25, 2016 | ||
Stacey J. Mobley | ||||
/S/ JOAN E. SPERO | Director | February 25, 2016 | ||
Joan E. Spero |
/S/ JOHN L. TOWNSEND III | Director | February 25, 2016 | ||
John L. Townsend III | ||||
/S/ WILLIAM G. WALTER | Director | February 25, 2016 | ||
William G. Walter | ||||
/S/ J. STEVEN WHISLER | Director | February 25, 2016 | ||
J. Steven Whisler | ||||
/S/ RAY G. YOUNG | Director | February 25, 2016 | ||
Ray G. Young | ||||
/S/ CAROL L. ROBERTS | Senior Vice President and Chief Financial Officer | February 25, 2016 | ||
Carol L. Roberts | ||||
/S/ TERRI L. HERRINGTON | Vice President – Finance and Controller | February 25, 2016 | ||
Terri L. Herrington |
PRINTING PAPERS | Paulinia, São Paulo, Brazil | Stone Mountain, Georgia leased | ||
Yanzhou City, China (2) | Tucker, Georgia | |||
Uncoated Papers and Pulp | Veracruz, Mexico | Aurora, Illinois (3 locations) | ||
U.S.: | Kenitra, Morocco | Bedford Park, Illinois (2 locations) 1 leased | ||
Selma, Alabama (Riverdale Mill) | Edirne, Turkey | Belleville, Illinois | ||
Cantonment, Florida (Pensacola Mill) | Corum, Turkey (1) | Carroll Stream, Illinois | ||
Ticonderoga, New York | Des Plaines, Illinois | |||
Riegelwood, North Carolina | Corrugated Container | Lincoln, Illinois | ||
Eastover, South Carolina | U.S.: | Montgomery, Illinois | ||
Georgetown, South Carolina | Bay Minette, Alabama | Northlake, Illinois | ||
Sumter, South Carolina | Decatur, Alabama | Rockford, Illinois | ||
Franklin, Virginia | Dothan, Alabama leased | Butler, Indiana | ||
Huntsville, Alabama | Crawfordsville, Indiana | |||
International: | Conway, Arkansas (2 locations) | Fort Wayne, Indiana | ||
Luiz Antônio, São Paulo, Brazil | Fort Smith, Arkansas (2 locations) | Hammond, Indiana | ||
Mogi Guacu, São Paulo, Brazil | Russellville, Arkansas (2 locations) | Indianapolis, Indiana (3 locations) | ||
Três Lagoas, Mato Grosso do Sul, Brazil | Phoenix (Tolleson), Arizona | Saint Anthony, Indiana | ||
Saillat, France | Yuma, Arizona | Tipton, Indiana | ||
Kadiam, India | Anaheim, California | Cedar Rapids, Iowa | ||
Rajahmundry, India | Buena Park, California leased | Waterloo, Iowa | ||
Kwidzyn, Poland | Camarillo, California | Garden City, Kansas | ||
Svetogorsk, Russia | Carson, California | Bowling Green, Kentucky | ||
Compton, California | Lexington, Kentucky | |||
INDUSTRIAL PACKAGING | Elk Grove, California | Louisville, Kentucky | ||
Exeter, California | Walton (Richwood), Kentucky | |||
Containerboard | Gilroy, California (2 locations) | Bogalusa, Louisiana | ||
U.S.: | Los Angeles, California leased | Lafayette, Louisiana | ||
Pine Hill, Alabama | Modesto, California | Shreveport, Louisiana | ||
Prattville, Alabama | Ontario, California | Springhill, Louisiana | ||
Cantonment, Florida (Pensacola Mill) | Salinas, California | Auburn, Maine | ||
Rome, Georgia | Sanger, California | Three Rivers, Michigan | ||
Savannah, Georgia | San Leandro, California leased | Arden Hills, Minnesota | ||
Cayuga, Indiana | Santa Fe Springs, California (2 locations) | Austin, Minnesota | ||
Cedar Rapids, Iowa | Stockton, California | Fridley, Minnesota | ||
Henderson, Kentucky | Tracy, California | Minneapolis, Minnesota leased | ||
Maysville, Kentucky | Golden, Colorado | Shakopee, Minnesota | ||
Bogalusa, Louisiana | Wheat Ridge, Colorado | White Bear Lake, Minnesota | ||
Campti, Louisiana | Putnam, Connecticut | Houston, Mississippi | ||
Mansfield, Louisiana | Orlando, Florida | Jackson (Richland), Mississippi | ||
Vicksburg, Mississippi | Plant City, Florida | Magnolia, Mississippi leased | ||
Valliant, Oklahoma | Tampa, Florida leased | Olive Branch, Mississippi | ||
Springfield, Oregon | Columbus, Georgia | Fenton, Missouri | ||
Orange, Texas | Forest Park, Georgia | Kansas City, Missouri | ||
Griffin, Georgia | Maryland Heights, Missouri | |||
International: | Kennesaw, Georgia leased | North Kansas City, Missouri leased | ||
Franco da Rocha, São Paulo, Brazil | Lithonia, Georgia | St. Joseph, Missouri | ||
Nova Campina, São Paulo, Brazil | Savannah, Georgia | St. Louis, Missouri |
Omaha, Nebraska | Amarillo, Texas | Bellusco, Italy | ||
Barrington, New Jersey | Carrollton, Texas (2 locations) | Catania, Italy | ||
Bellmawr, New Jersey | Edinburg, Texas | Pomezia, Italy | ||
Milltown, New Jersey | El Paso, Texas | San Felice, Italy | ||
Spotswood, New Jersey | Ft. Worth, Texas leased | Kuala Lumpur, Malaysia | ||
Thorofare, New Jersey | Grand Prairie, Texas | Juhor, Malaysia | ||
Binghamton (Conklin), New York | Hidalgo, Texas | Apodaco (Monterrey), Mexico leased | ||
Buffalo, New York | McAllen, Texas | Ixtaczoquitlan, Mexico | ||
Rochester, New York | San Antonio, Texas (2 locations) | Juarez, Mexico leased | ||
Scotia, New York | Sealy, Texas | Los Mochis, Mexico | ||
Utica, New York | Waxahachie, 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 | Villa Nicolas Romero, Mexico | ||
Statesville, North Carolina | Yakima, Washington | Zapopan, Mexico | ||
Byesville, Ohio | Fond du Lac, Wisconsin | Agadir, Morocco | ||
Delaware, Ohio | Manitowoc, Wisconsin | Casablanca, Morocco | ||
Eaton, Ohio | Singapore, Singapore | |||
Kenton, Ohio | International: | Almeria, Spain | ||
Madison, Ohio | Manaus, Amazonas, Brazil | Barcelona, Spain | ||
Marion, Ohio | Paulinia, São Paulo, Brazil | Bilbao, Spain | ||
Marysville, Ohio leased | Rio Verde, Goias, Brazil | Gandia, Spain | ||
Middletown, Ohio | Suzano, São Paulo, Brazil | Madrid, Spain | ||
Mt. Vernon, Ohio | Las Palmas, Canary Islands | Bangkok, Thailand | ||
Newark, Ohio | Tenerife, Canary Islands | Adana, Turkey | ||
Streetsboro, Ohio | Rancagua, Chile | Bursa, Turkey | ||
Wooster, Ohio | Baoding, China | Corlu, Turkey | ||
Oklahoma City, Oklahoma | Beijing, China | Corum, Turkey | ||
Beaverton, Oregon (2 locations) | Chengdu, China | Gebze, Turkey | ||
Hillsboro, Oregon | Dalian, China | Izmir, Turkey | ||
Portland, Oregon | Dongguan, China | |||
Salem, Oregon leased | Guangzhou, China (2 locations) | |||
Biglerville, Pennsylvania (2 locations) | Hohhot, China | Recycling | ||
Eighty-four, Pennsylvania | Nanjing China | U.S.: | ||
Hazleton, Pennsylvania | Shanghai, China (2 locations) | Phoenix, Arizona | ||
Kennett Square (Toughkenamon), Pennsylvania | Shenyang, China | Fremont, California | ||
Lancaster, Pennsylvania | Suzhou, China | Norwalk, California | ||
Mount Carmel, Pennsylvania | Tianjin, China (2 locations) | West Sacramento, California | ||
Georgetown, South Carolina | Wuhan, China | Denver, Colorado (1) | ||
Laurens, South Carolina | Arles, France | Itasca, Illinois | ||
Lexington, South Carolina | Chalon-sur-Saone, France | Des Moines, Iowa | ||
Ashland City, Tennessee leased | Creil, France | Wichita, Kansas | ||
Cleveland, Tennessee | LePuy, France (Espaly Box Plant) | Roseville, Minnesota | ||
Elizabethton, Tennessee leased | Mortagne, France | Omaha, Nebraska | ||
Morristown, Tennessee | Guadeloupe, French West Indies | Charlotte, North Carolina | ||
Murfreesboro, Tennessee | Batam, Indonesia | Beaverton, Oregon |
Eugene, Oregon leased | DISTRIBUTION | |||
Memphis, Tennessee leased (1) | ||||
Carrollton, Texas | IP Asia | |||
Salt Lake City, Utah | International: | |||
Richmond, Virginia | China (8 locations) | |||
Kent, Washington | Malaysia | |||
Taiwan | ||||
International: | Thailand | |||
Monterrey, Mexico leased | Vietnam | |||
Xalapa, Veracruz, Mexico leased | ||||
FOREST PRODUCTS | ||||
Bags | ||||
U.S.: | Forest Resources | |||
Buena Park, California | International: | |||
Beaverton, Oregon | Approximately 335,000 acres in Brazil | |||
Grand Prairie, Texas | ||||
CONSUMER PACKAGING | ||||
Coated Paperboard | ||||
Augusta, Georgia | ||||
Riegelwood, North Carolina | ||||
Prosperity, South Carolina | ||||
Texarkana, Texas | ||||
Foodservice | ||||
U.S.: | ||||
Visalia, California | ||||
Shelbyville, Illinois | ||||
Kenton, Ohio | ||||
International: | ||||
Shanghai, China | ||||
Beijing, China | ||||
Bogota, Colombia | ||||
Cheshire, England leased | ||||
(1) Closed March 2015 | ||||
(2) Closed October 2015 | ||||
(in thousands of short tons) | U.S. | EMEA | Americas, other than U.S. | Asia | India | Total | |||||||||||
Industrial Packaging | |||||||||||||||||
Containerboard (a) | 13,131 | 48 | 360 | — | — | 13,539 | |||||||||||
Printing Papers | |||||||||||||||||
Uncoated Freesheet | 1,808 | 1,150 | 1,135 | — | 258 | 4,351 | |||||||||||
Bristols | 165 | — | — | — | — | 165 | |||||||||||
Uncoated Papers and Bristols | 1,973 | 1,150 | 1,135 | — | 258 | 4,516 | |||||||||||
Dried Pulp | 1,335 | 346 | 140 | — | — | 1,821 | |||||||||||
Newsprint | — | 124 | — | — | — | 124 | |||||||||||
Total Printing Papers | 3,308 | 1,620 | 1,275 | — | 258 | 6,461 | |||||||||||
Consumer Packaging | |||||||||||||||||
Coated Paperboard | 1,568 | 379 | — | 1,413 | (b) | — | 3,360 |
Forest Resources | ||
We own, manage or have an interest in approximately 1.4 million acres of forestlands worldwide. These forestlands and associated acres are located in the following regions: | (M Acres) | |
Brazil | 335 | |
We have harvesting rights in: | ||
Russia | 1,047 | |
Poland | — | |
Total | 1,382 |
Mark S. Sutton | Chairman and Chief Executive Officer |
W. Michael Amick, Jr. | SVP – North American Papers, Pulp & |
Consumer Packaging | |
C, Cato Ealy | SVP – Corporate Development |
William P. Hoel | SVP – Container The Americas |
Tommy S. Joseph | SVP – Manufacturing, Technology, EHS&S |
& Global Sourcing | |
Thomas G. Kadien | SVP – Human Resources, Communications & |
Global Government Relations | |
Glenn R. Landau | SVP – President, IP Latin America |
Tim S. Nicholls | SVP – Industrial Packaging |
Jean-Michel Ribieras | SVP – President, IP Europe, Middle East, |
Africa & Russia | |
Carol L. Roberts | SVP – Chief Financial Officer |
Sharon R. Ryan | SVP – General Counsel & Corporate |
Secretary | |
Any other individual elected to the position of Senior Vice President or above during 2016 | |
Plan Element | 162(m) Limit Approved by Committee |
Company Business Objective: | • Positive EBITDA Before Special Items |
Intermediate Performance Objectives: | • Same as 2016 Management Incentive Plan objectives |
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 (and, in the United States, 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) in the United States, 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 an Executive Officer to provide one-year’s notice of retirement, (vi) your Misconduct, or (vii) termination of your employment on or before February 1 of the first year of the three-year performance period for the award. |
(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. |
(e) | You agree that if execution of a Non-Competition and/or a Non-Solicitation Agreement is required, this Award will be contingent upon your execution of such agreement(s). |
INTERNATIONAL PAPER INVESTMENT (SHANGHAI) CO., LTD. (AS THE SELLER) AND SHANDONG SUN HOLDING GROUP CO., LTD. (AS THE BUYER) | |||
EQUITY TRANSFER AGREEMENT for the transfer of fifty five percent (55%) equity interest in INTERNATIONAL PAPER & SUN CARTONBOARD CO., LTD., SHANDONG INTERNATIONAL PAPER & SUN COATED PAPERBOARD CO., LTD., AND SHANDONG IP & SUN FOOD PACKAGING CO., LTD. |
520140-4-25-v7.1 | 03-40603029 |
CLIFFORD CHANCE DEUTSCHLAND LLP | |
Draft Date: 27 November 2014 |
CONTENTS | |
Clause | Page |
520140-4-25-v7.1 | 03-40603029 |
CLIFFORD CHANCE DEUTSCHLAND LLP | |
Draft Date: 27 November 2014 |
(1) | INTERNATIONAL PAPER INVESTMENT (SHANGHAI) CO., LTD., a company duly established and validly existing under the laws of the PRC (registered no. 310000400629687), whose legal address is at Unit 1801, 600 Middle Longhua Road, Xuhui District, Shanghai (the "Seller"); and |
(1) | SHANDONG SUN HOLDING GROUP CO., LTD., a company duly established and validly existing under the laws of PRC (registered no. 370882228000354), whose legal address is at Town Station of Xinglong Village, Yanzhou District, Jining (the "Buyer"). |
(A) | International Paper & Sun Cartonboard Co., Ltd. (万国纸业太阳白卡纸有限公司) ("JV1") is a Sino-foreign cooperative joint venture company duly established and validly existing under the laws of the PRC (registered no. 370000400003006), whose legal address is at 66 Xiguan Avenue, Yanzhou District, Jining, Shandong Province. |
(B) | Shandong International Paper & Sun Coated Paperboard Co., Ltd. (山东国际纸业太阳纸板有限公司) ("JV2") is a Sino-foreign cooperative joint venture company duly established and validly existing under the laws of the PRC (registered no. 370000400003389), whose legal address is at 66 Xiguan Avenue, Yanzhou District, Jining, Shandong Province. JV2 has a wholly owned subsidiary called International Paper & Sun (Hong Kong) Trading Limited (the "Trading Subsidiary"). |
(C) | Shandong IP & Sun Food Packaging Co., Ltd. (山东万国太阳食品包装材料有限公司) ("JV3") is a Sino-foreign cooperative joint venture company duly established and validly existing under the laws of the PRC (registered no. 370000400006730), whose legal address is at 66 Xiguan Avenue, Yanzhou District, Jining, Shandong Province. |
(D) | The Target Companies were originally established by the Seller's Affiliate and the Buyer's Affiliate. As of the date of this Agreement, the Seller holds fifty-five (55%) equity interests in each Target Company. |
(E) | Upon friendly discussion, the Buyer proposes to acquire, and the Seller agrees to transfer, the Seller's entire equity interests in the Target Companies. |
520140-4-25-v7.1 | 03-40603029 |
CLIFFORD CHANCE DEUTSCHLAND LLP | |
Draft Date: 27 November 2014 |
1. | DEFINITIONS |
2. | SALE AND PURCHASE |
2.1 | Sale and Purchase |
2.1.1 | In accordance with the terms and conditions of this Agreement, the Seller shall sell to the Buyer, and the Buyer shall acquire from the Seller, the entire equity interest held by the Seller in each Target Company (representing fifty-five per cent (55%) of the total equity interest of each Target Company), together with all rights and obligations accruing or attached thereto as at the MOFCOM Approval Date (as defined in Clause 4.2) (each "JV1 Target Equity Interest", "JV2 Target Equity Interest" and "JV3 Target Equity Interest" respectively, and collectively the "Target Equity Interests"). |
2.1.2 | The transfer of the JV1 Target Equity Interest, the JV2 Target Equity Interest and the JV3 Target Equity Interest shall be conducted simultaneously and the completion of the transfer of the Target Equity Interests in respect of any Target Company shall be conditional upon the completion of the transfer of the Target Equity Interests in respect of the other Target Companies. The afore-mentioned transaction is hereinafter referred to as the "Transaction". |
2.2 | Purchase Price |
2.2.1 | The purchase price for the Target Equity Interests is RMB 149 million (in words: Renminbi one hundred and forty nine million) (the "Purchase Price"). |
2.2.2 | The Purchase Price shall be apportioned to the Target Equity Interests in respect of each Target Company as follows: |
(a) | RMB44,174,932 (in words: Renminbi forty-four million one-hundred seventy-four thousand nine-hundred and thirty-two) for the JV1 Target Equity Interest; |
(b) | RMB 85,048,862 (in words: Renminbi eighty-five million forty-eight thousand eight hundred and sixty-two) for the JV2 Target Equity Interest; and |
(c) | RMB19,776,206 (in words: Renminbi nineteen million seven hundred seventy-six thousand two hundred and six) for the JV3 Target Equity Interest. |
2.2.3 | For the avoidance of doubt, there shall be no adjustment to the Purchase Price after the date of this Agreement. |
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2.3 | Payment of Purchase Price |
2.3.1 | The Purchase Price shall be paid by the Buyer into the Seller's Bank Account, without any deduction, withholding, set-off or counterclaim whatsoever, in the following manner: |
(d) | twenty percent (20%) of the Purchase Price ("First Payment") shall be paid within five (5) Business Days from the date of this Agreement; |
(e) | thirty percent (30%) of the Purchase Price ("Second Payment") shall be paid within five (5) Business Days from the MOFCOM Approval Date; |
(f) | fifty percent (50%) of the Purchase Price ("Final Payment") shall be paid within five (5) Business Days from the SAIC Registration Date (as defined in Clause 5). |
2.3.2 | Without prejudice to the Seller's rights under other provisions of this Agreement and the laws of the PRC, if the Buyer fails to pay any portion of the Purchase Price in accordance with Clause 2.3.1, a late-payment interest shall accrue and be payable by the Buyer to the Seller in respect of the default amount, for the period starting from the day following the expiry of the payment period mentioned above in respect of such portion until the day on which the default amount is paid, at the interest rate of 4.85% per annum. |
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3. | ANTI-TRUST FILING |
3.1 | Within ten (10) Business Days after the date of this Agreement, the Buyer shall make a notification to the Anti-monopoly Bureau of the Ministry of Commerce of the PRC ("AMB") in respect of the Transaction. For the purpose of anti-trust filing, the Buyer shall be responsible for preparing the documents and materials as may be required under the laws of the PRC or AMB and the Seller shall provide reasonable assistance to the Buyer by providing the Buyer with access to necessary information of the Target Companies which is in the possession of the Seller. The Buyer shall use its best endeavours to obtain the PRC anti-trust clearance for the Transaction as soon as practicable after the date of this Agreement. |
3.2 | Anti-trust clearance for the Transaction is deemed to be obtained upon the issuance of a notice by the Ministry of Commerce clearing the Transaction for merger control purposes pursuant to the Anti-Monopoly Law or the expiry of the statutory clearance period under the Anti-Monopoly Law and no objection having been raised by the Ministry of Commerce with respect to the Transaction. |
4. | MOFCOM APPROVAL DATE |
4.1 | Within five (5) Business Days of the receipt of the First Payment in the Seller's Bank Account, the Parties shall, and shall procure the Target Companies to, submit this Agreement together with all the other necessary documents to MOFCOM for approval of the Transaction (i.e. the transfer of the Target Equity Interests in each Target Company) as a whole. |
4.2 | With effect from the day on which MOFCOM issues an approval letter/approval letters approving the Transaction (i.e. the transfer of the Target Equity Interests in each Target Company) ("MOFCOM Approval Date"), |
4.2.1 | the Buyer shall assume all the rights and obligations in respect of the Target Equity Interests of the Target Companies; |
4.2.2 | the JV Contracts shall be terminated, and neither Party shall have any further responsibility or liability to the other Party or their Affiliates in respect of its obligations under the JV Contracts (unless the relevant obligations are explicitly provided under the relevant JV Contract to survive, subject to the terms and conditions thereof, after the termination of that JV Contract); |
4.2.3 | the director(s) and supervisor(s) appointed by the Seller in each Target Company shall be automatically released from their responsibilities as the director or supervisor (as the case may be) of that Target Company. |
5. | SAIC REGISTRATION DATE |
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5.1.4 | change of shareholder(s) of each Target Company so that the Seller will no longer be recorded as a shareholder of such Target Company; and |
5.1.5 | change of the directors and supervisors of each Target Company so that the persons appointed by the Seller will no longer be recorded as the directors or supervisors of such Target Company. |
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6. | MUTUAL COVENANT |
6.1 | For the avoidance of doubt, from the date of this Agreement and until the MOFCOM Approval Date, the JV Contract in respect of each Target Company shall remain in full force and effect and the Parties shall fully respect and comply with the arrangements thereunder. Subject to the preceding provision, at any time after the receipt by the Seller of the First Payment in the Seller's Bank Account, the Buyer may appoint a deputy general manager in the Target Companies who shall report to the general manager of the Target Companies and may participate in the management and monitoring of the business operation of the Target Companies. For the avoidance of doubt, the position of the deputy general manager shall be cancelled if this Agreement is terminated in accordance with Clause 9. Separately, the Seller undertakes to the Buyer that it will procure that, between the date of this Agreement and the MOFCOM Approval Date, the general manager of the Target Companies will not take any action that is out of the ordinary course of business without the consent of the Buyer. |
6.2 | In addition to the obligations provided under Clause 3, Clause 4 and Clause 5 above, each Party agrees to perform (or procure the performance of) all such acts and things and/or to execute and deliver (or procure the execution and delivery of) all such documents, as may be required by PRC law or as may be necessary or reasonably requested by the other Party to implement the Transaction in accordance with this Agreement. |
6.3 | Each Party shall, as applicable, keep the other Party reasonably informed of the progress of the anti-trust filing, MOFCOM approval and SAIC registration in relation to the Transaction. The Buyer shall immediately notify the Seller of the obtaining of the anti-trust clearance for the Transaction, the MOFCOM Approval and the Revised Business License of any Target Company, as the case may be. |
7. | WARRANTIES |
7.1 | Each Party warrants to the other Party that: |
7.1.1 | it has the right, power and authority to enter into this Agreement and to perform its obligations under this Agreement; and |
7.1.2 | its obligations under this Agreement are valid, legal, binding and enforceable in accordance with the terms of this Agreement. |
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7.2 | The Seller warrants to the Buyer that the Seller legally and beneficially owns the Target Equity Interests, free from any Encumbrance. |
7.3 | The Buyer acknowledges and agrees that other than those warranties set out in Clause and 7.2, no representations or warranties are, or shall be deemed as having been, explicitly or impliedly made by the Seller to the Buyer in relation to any Target Company, the Target Equity Interests or the Transaction. |
8. | FURTHER AGREEMENT |
8.1 | Discussion with the Relevant Banks |
8.2 | No acceleration of Shareholder Loan |
8.2.1 | The Buyer agrees to procure that: |
(a) | Shandong Sun Paper Industry Joint Stock Co., Ltd. ("Sun ListCo") shall not, after the date of this Agreement, demand repayment by JV2 of the Sun ListCo Loan (or the relevant part thereof) prior to the scheduled maturity date of the same as provided under the Sun ListCo Shareholder Loan Agreement, as a result of or in connection with the Transaction; and |
(b) | JV2 shall not, after the date of this Agreement, repay to the Sun ListCo the Sun ListCo Loan (or the relevant part thereof) prior to the scheduled maturity date of the same as provided under the Sun ListCo Shareholder Loan Agreement. |
8.2.2 | The Seller agrees that it will not, after the date of this Agreement, demand repayment by JV2 of the IP Loan (or the relevant part thereof) prior to the scheduled maturity date of the same as provided under the IP Shareholder Loan Agreement, as a result of or in connection with the Transaction, provided that༚ |
(a) | Sun ListCo will not demand the early repayment of the Sun ListCo Shareholder Loan (as described in Clause above), and |
(b) | JV2 will not voluntarily prepay the Sun ListCo Loan (as described in 8.2.1(b)). |
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8.3 | Scheduled Repayment of IP Loan |
8.4 | Intellectual Property |
8.4.1 | On the MOFCOM Approval Date, International Paper Company will give a written termination notice to JV1 in respect of the Trademark License Agreement between International Paper Company and JV1 dated 21 October 2006 ("Trademark License Agreement"), pursuant to which the Trademark License Agreement will terminate in accordance with the terms thereof in one-hundred and twenty (120) days after the date of the written termination notice. The rights and obligations of the parties to the Trademark License Agreement in connection with the termination shall be dealt with in accordance with the terms of the Trademark License Agreement. |
8.4.2 | The Buyer shall procure that the Target Companies and the Trading Subsidiary shall: |
(a) | within twelve (12) months after the MOFCOM Approval Date, remove "International Paper" (in English) from any corporate, enterprise, trading names of the Trading Subsidiary (as the case may be) (and the Trading Subsidiary can only use "International Paper" (in English) always as part of its full company name before the afore-mentioned change of the Trading Subsidiary's corporate, enterprise and trading names is completed); and |
(b) | within six (6) months after the MOFCOM Approval Date, unless otherwise allowed by the Seller, remove any brand, trademark, logo belonging to International Paper Company or its Affiliates, including "International Paper" (in English) and "国际纸业" or "万国纸业" (as the case may be) (in Chinese) which are separately used, from all brands, labels, packaging and/or promotional materials, trademarks, trade names, service marks, trade dress, and logos used by the Target Companies or the Trading Subsidiary and stop exploiting any other intellectual property belonging to International Paper Company or its Affiliates. |
8.4.3 | Subject to Clause 8.4.2 and without prejudice to the rights of International Paper Company or its Affiliates to take any actions to protect and/or preserve their intellectual property rights, the Target Companies may keep their current company names (as described in Clause 8.4.4), provided however that: |
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(a) | JV1 and JV2 can only use "International Paper" (in English), "国际纸业" or "万国纸业" (as the case may be) (in Chinese) always as part of their respective full company name; and |
(b) | this Clause 8.4.3 shall not be interpreted in any way to indicate or imply any conveyance by the Seller, the International Paper Company or its Affiliates to the Buyer, any Target Company or the Trading Subsidiary of any intellectual property belonging to International Paper Company or its Affiliates concerning "International Paper" (in English), "国际纸业" or "万国纸业" (as the case may be) (in Chinese). |
8.4.4 | For the purpose of Clause 8.4.3, both Parties acknowledge that, as of the date of this Agreement: |
(a) | The name of JV1 is: "万国纸业太阳白卡纸有限公司" (in Chinese) and "International Paper & Sun Cartonboard Co., Ltd." (in English); |
(b) | The name of JV2 is: "山东国际纸业太阳纸板有限公司" (in Chinese) and "Shandong International Paper & Sun Coated Paperboard Co., Ltd." (in English); and |
(c) | The name of JV3 is: "山东万国太阳食品包装材料有限公司" (in Chinese) and "Shandong IP & Sun Food Packaging Co., Ltd." (in English). |
8.4.5 | Without prejudice to the rights of International Paper Company or its Affiliates to take any actions to protect and/or preserve their intellectual property rights, for the avoidance of doubt, both Parties acknowledge that the Target Companies may keep and use the trademarks which are legally owned by them and have been duly registered by them with the PRC Trademark Office as of the date of this Agreement. |
9. | TERMINATION |
9.1 | Termination of this Agreement |
9.1.3 | Upon the occurrence of any of the following events or circumstances, either Party (the "Terminating Party") may elect to terminate this Agreement by issuing a notice in writing to the other Party: |
(a) | the AMB prohibits the completion of the Transaction (provided that the Buyer has used its best endeavours to obtain the PRC anti-trust clearance for the Transaction); |
(b) | the MOFCOM approval (as described in Clause ) is not obtained within nine (9) months after the date of this Agreement, provided that a Party shall not be entitled to terminate this Agreement under this clause if the above is due to its failure to perform any of its obligations under this Agreement or is otherwise attributable to it; |
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(c) | at any time prior to the MOFCOM Approval Date, the other Party (the "Default Party") is in material breach of any provision of this Agreement and such default (i) fails to be rectified, to the reasonable satisfaction of the Terminating Party, within thirty (30) days after notification by the Terminating Party to the Default Party of the default or (ii) is not capable of being cured, in the reasonable opinion of the Terminating Party. |
9.1.4 |
(c) |
(d) | if the Buyer or a Target Company fails to submit to the SAIC all the necessary documentation required to complete the SAIC registration (as described in Clause 5) within thirty (30) days from the MOFCOM Approval Date. |
9.1.5 | In addition to Clause 9.1.1 and notwithstanding Clause 4.2, the Buyer may (at its sole discretion) elect to terminate this Agreement by issuing a notice in writing to the Seller if the Seller fails to provide any document which is required to be provided by the Seller under PRC applicable laws for the purpose of submission to MOFCOM (as described in Clause 4.1) or SAIC (as described in Clause 5) and the Seller fails to rectify within thirty (30) days from the date on which the Buyer requires in writing such document and provides in reasonable detail the statutory basis for requiring such document. |
9.1.6 | For the avoidance of doubt, nothing in this Clause 9.1 shall be interpreted in any manner to prejudice the either Party's right to demand specific performance by the other Party of any of its obligation under this Agreement. |
9.2 | Effect of Termination |
9.2.1 |
9.2.2 | Without prejudice to the Seller's rights under other provisions of this Agreement and the laws of the PRC, if the Seller elects to terminate this Agreement pursuant to Clause 9.1 due to a breach of this Agreement by the Buyer: |
(d) | the Seller shall be entitled to the First Payment and the Buyer shall be deemed to have forfeited it; and |
(e) | the Buyer shall, on demand of the Seller, indemnify the Seller against (i) all the costs incurred by the Seller relating to the negotiation, preparation, |
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9.2.3 | If this Agreement is terminated pursuant to Clause 9.1.1(a) or Clause 9.1.2, upon the demand of the Seller (at the Seller's sole discretion), the Buyer shall, and the Parties shall ensure that the Target Companies shall, take all necessary actions and sign all necessary documents to re-transfer/re-instate the Target Equity Interests back to the Seller, at nil consideration to the Seller, as soon as possible after such termination and, if necessary, apply to MOFCOM for its revocation of the MOFCOM approval letter(s) (as described in Clause 4.2) ("Equity Re-transfer"); in such case, the Buyer shall also be responsible for and indemnify the Seller against all the costs incurred by the Seller arising out of or in connection with the Equity Re-transfer. |
9.2.4 | Without prejudice to the Buyer's rights under other provisions of this Agreement and the laws of the PRC, if the Buyer elects to terminate this Agreement pursuant to Clause 9.1.3, the Seller shall pay twenty percent (20%) of the Purchase Price as liquidated damages to the Buyer. |
10. | CONFIDENTIAL INFORMATION AND DISCLOSURE |
10.1 | Confidential information |
10.2 | Disclosure |
11. | MISCELLANEOUS |
11.1 | Costs |
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11.2 | Taxes |
11.3 | Amendment |
11.4 | Waiver |
11.5 | Severability |
11.6 | Counterparts |
12. | ENTIRE AGREEMENT |
13. | ASSIGNMENT |
14. | NOTICES |
14.1 | Format of notice |
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14.2 | Deemed delivery of notice |
14.3 | Address and fax number |
Name of Party | Address | Fax No. | Marked for the attention of |
Seller | 17-18 F, West Building, Greenland Center, 600 Middle Longhua Road, Shanghai 200032 | 86-21-61133201 | Cecilia Ho |
Buyer | No. 1, Youyi Road, Yanzhou District, Jining City, Shandong Province | + | Li Hongxin |
14.4 | Any Notice form the Buyer to the Seller shall copy International Paper Company at the following address and fax number: |
Name | Address | Fax No. | Marked for the attention of |
International Paper Company | 6420 Poplar Avenue, Tower III, Memphis, TN 38197 | 1-901-214-9875 | C. Cato Ealy |
15. | GOVERNING LAW AND JURISDICTION |
15.1 | Governing law |
15.2 | Arbitration |
15.2.1 | The Buyer and the Seller agree that any dispute, controversy or claim arising out of or in connection with this Agreement, including any question regarding its existence, validity, interpretation, breach or termination, shall be referred to China International Economic and Trade Arbitration Commission ("CIETAC") |
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15.2.2 | The hearing of the arbitration shall take place in Shanghai. |
15.2.3 | The arbitration tribunal shall consist of three (3) arbitrators. Each Party shall appoint one (1) arbitrator, and the two (2) arbitrators thus appointed shall appoint the third arbitrator. If within thirty (30) days of a request from the other Party to do so a Party fails to appoint an arbitrator, or if the two (2) arbitrators fail to agree on the third arbitrator within thirty (30) days after the appointment of the second arbitrator, the appointment shall be made, upon request of a party, by the Chairman of CIETAC in accordance with the Rules, as amended herein. |
15.2.4 | The languages of the arbitration proceedings shall be in Chinese and English. Any arbitration award shall be made in writing and shall be final and binding on the Parties from the day it is made. The parties undertake to carry out each and every arbitral award without delay. |
16. | GOVERNING LANGUAGE |
17. | COPY FOR SUBMISSION |
17.1 |
17.2 | Should MOFCOM or SAIC require submission of a separate equity transfer agreement ("By-entity SPA") in respect of the transfer of the JV1 Target Equity Interest, the JV2 Target Equity Interest and the JV3 Target Equity Interest respectively, the Parties shall prepare a By-entity SPA in respect of each Target Company on the basis of this Agreement, provided further that: |
17.2.1 | unless otherwise agreed between the Parties, to the extent practicable, the provisions of each By-entity SPA shall be substantially similar to the provisions of this Agreement; |
17.2.2 | the rights and obligations of the Parties under the By-entity SPAs shall be the same as those under this Agreement; |
17.2.3 | all the By-entity SPAs shall be simultaneously submitted to MOFCOM (as described in Clause 4) and the Parties shall use their best efforts to procure that MOFCOM shall approve the transactions contemplated under all the By-entity SPAs as a package deal; in the event that MOFCOM fails to approve the equity transfer transaction concerning any Target Company, the Parties shall apply to MOFCOM for the withdrawal of the approvals (if issued) for the equity transfer transactions concerning the other Target Companies; |
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17.2.4 | if any By-entity SPA is terminated in accordance with the terms thereunder, the other By-entity SPAs shall be terminated as well (and a Party that commits a breach under any By-entity SPA shall be deemed to have committed a breach under this Agreement), in which case the provisions of Clause 9 shall apply mutatis mutandis; |
17.2.5 | this Agreement shall be the governing agreement in respect of the Transaction as a whole and, in the event of any discrepancy between any provision of any By-entity SPA and any provision of this Agreement, between the Parties the provision of this Agreement shall prevail. |
18. | EFFECTIVENSS |
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Beneficiary Name | International Paper Investment (Shanghai) Co., Ltd. 英特奈国际纸业投资༈上海༉有限公司 |
Beneficiary Bank | Citi Bank, Shanghai Branch 花旗银行上海分行 |
Beneficiary Account | 1,755,667,214 |
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In millions, except per share amounts | 2015 | 2014 | 2013 | |||||||||
Earnings (loss) from continuing operations | $ | 938 | $ | 568 | $ | 1,704 | ||||||
Discontinued operations | — | (13 | ) | (309 | ) | |||||||
Net earnings (loss) | 938 | 555 | 1,395 | |||||||||
Effect of dilutive securities (a) | — | — | — | |||||||||
Net earnings - assuming dilution | $ | 938 | $ | 555 | $ | 1,395 | ||||||
Average common shares outstanding | 417.4 | 427.7 | 443.3 | |||||||||
Effect of dilutive securities (a) | ||||||||||||
Restricted stock performance share plan | 3.2 | 4.2 | 4.5 | |||||||||
Stock options (b) | — | 0.1 | 0.3 | |||||||||
Average common shares outstanding - assuming dilution | 420.6 | 432.0 | 448.1 | |||||||||
Earnings (loss) per common share from continuing operations | $ | 2.25 | $ | 1.33 | $ | 3.85 | ||||||
Discontinued operations | — | (0.03 | ) | (0.70 | ) | |||||||
Net earnings (loss) per common share | $ | 2.25 | $ | 1.30 | $ | 3.15 | ||||||
Earnings (loss) per common share from continuing operations - assuming dilution | $ | 2.23 | $ | 1.31 | $ | 3.80 | ||||||
Discontinued operations | — | (0.02 | ) | (0.69 | ) | |||||||
Net earnings (loss) per common share - assuming dilution | $ | 2.23 | $ | 1.29 | $ | 3.11 |
For the Years Ended December 31, | ||||||||||||||||||||||
TITLE | 2011 | 2012 | 2013 | 2014 | 2015 | |||||||||||||||||
(A) | Earnings (loss) from continuing operations before income taxes and equity earnings | $ | 1,395.0 | $ | 967.0 | $ | 1,228.0 | $ | 872.0 | $ | 1,266.0 | |||||||||||
(B) | Noncontrolling interests, net of taxes | (14.0 | ) | (5.0 | ) | 17.0 | 19.0 | 21.0 | ||||||||||||||
(C) | Fixed charges excluding capitalized interest | 661.8 | 782.0 | 705.5 | 694.2 | 700.2 | ||||||||||||||||
(D) | Amortization of previously capitalized interest | 29.2 | 24.2 | 24.7 | 23.9 | 20.7 | ||||||||||||||||
(E) | Distributed income of equity investees | 85.6 | — | — | 56.1 | 35.0 | ||||||||||||||||
(F) | Earnings (loss) from continuing operations before income taxes and fixed charges | $ | 2,157.6 | $ | 1,768.2 | $ | 1,975.2 | $ | 1,665.2 | $ | 2,042.9 | |||||||||||
Fixed Charges | ||||||||||||||||||||||
(G) | Interest and amortization of debt expense | $ | 602.0 | $ | 714.7 | $ | 648.3 | $ | 642.9 | $ | 643.5 | |||||||||||
(H) | Interest factor attributable to rentals | 54.4 | 61.6 | 56.1 | 51.3 | 56.7 | ||||||||||||||||
(I) | Preferred dividends of subsidiaries | 5.4 | 5.7 | 1.1 | — | — | ||||||||||||||||
(J) | Capitalized interest | 21.6 | 36.6 | 17.0 | 23.2 | 24.8 | ||||||||||||||||
(K) | Total fixed charges | $ | 683.4 | $ | 818.6 | $ | 722.5 | $ | 717.4 | $ | 725.0 | |||||||||||
(L) | Ratio of earnings to fixed charges | 3.16 | 2.16 | 2.73 | 2.32 | 2.82 |
Name | Jurisdiction | |
Ace Packaging Systems, Inc. | Michigan | |
Alexander Plantation, LLC | Delaware | |
Balsa Forests LLC | Delaware | |
Baoding International Paper Packaging Co., Ltd. | China | |
Basswood Forests II LLC | Delaware | |
Basswood Forests IIA LLC | Delaware | |
Basswood III Forests LLC | Delaware | |
Beech Forests II LLC | Delaware | |
Beech Forests LLC | Delaware | |
Beijing Golden Eagle Package & Production Co., Ltd. | China | |
Birch Forests II LLC | Delaware | |
Birch Forests LLC | Delaware | |
Branigar Organization, Inc., The | Illinois | |
Cartonajes International, S.L. | Spain | |
Cartonajes Union S.L. | Spain | |
Cartonnerie de Martinique SAS | France | |
Castell Management Limited Liability Company | Delaware | |
Castell, L.P. (DBA Texcorr) | Delaware | |
Certified Forest Management LLC | Delaware | |
Champion Realty Corporation | Delaware | |
CircleTree Insurance Company | Vermont | |
CMCP - INTERNATIONAL PAPER S.A.S. | Morocco | |
Commercial Realty & Properties LLC | Delaware | |
Comptoir des Bois de Brive SAS | France | |
CP Packaging Sdn. Bhd. | Malaysia | |
Dogal Kagit Hammaddeleri Sanayi ve Ticaret Limited Sirketi | Turkey | |
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 | |
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 | |
Inland Paper Company Inc. | Indiana | |
Instituto International Paper | Brazil | |
International Paper - 26, Inc. | Delaware | |
International Paper - 35, Inc. | Delaware |
Name | Jurisdiction | |
International Paper - Comércio de Papel e Participações Arapoti Ltda. | Brazil | |
International Paper - Kwidzyn Sp. Z O.O. | Poland | |
International Paper (Asia) Limited | Hong Kong | |
International Paper (Beijing) Packaging Co., Ltd. | Beijing, China | |
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 (Europe) S.a r.l | 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 (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 (Xianghe) Packaging Co., Ltd. | China | |
International Paper Agroflorestal Ltda. | Brazil | |
International Paper APPM Limited | India | |
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 CTA (Mexico), S.A. de C.V., SOFOM, E.N.R. | Mexico | |
International Paper Czech Republic, s.r.o. | Czech Republic | |
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 Dutch Services B.V. | Netherlands | |
International Paper Embalagens Industriais Ltda. | Brazil |
Name | Jurisdiction | |
International Paper Embalagens Ltda. | Brazil | |
International Paper Exportadora Ltda. | Brazil | |
International Paper Finance (Luxembourg) S.a r.l. | Luxembourg | |
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 Group (UK) Limited | United Kingdom | |
International Paper Holdings (Luxembourg) S.à r.l. | Luxembourg | |
International Paper Hungary Kereskedelmi Kft. | Hungary | |
International Paper Industrie France SA | France | |
International Paper Investment (Shanghai) Co., Ltd. | China | |
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 Investments Asia Pte Ltd | Singapore | |
International Paper Italia Srl | Italy | |
International Paper Japan Limited | Japan | |
International Paper Latin America Investments, LLC | Delaware | |
International Paper Manufacturing and Distribution Ltd. | Hong Kong | |
International Paper Mexico Company, 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 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 Shengdao (Dalian) Packaging Industries Co., Ltd. | China | |
International Paper Switzerland GmbH | Switzerland | |
International Paper Trading (Shanghai) Limited | People's Republic of China | |
International Paper Ukraine SE | Ukraine | |
IP Belgian Services Company SPRL | Belgium |
Name | Jurisdiction | |
IP Canada Holdings Limited | 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 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 International Holdings, Inc. | Delaware | |
IP Mexico Holdings S.a.r.l. | Luxembourg | |
IP Mineral Holdings LLC | Delaware | |
IP Pacific Timberlands, Inc. | Delaware | |
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 | |
Joshua Tree Forests LLC | Delaware | |
Juniper Forests LLC | Delaware | |
Lacebark LLC | Delaware | |
Lake Superior Land Company | Delaware | |
Long-Bell Petroleum Company, Inc.,The | Louisiana | |
Longleaf Insurance Company | Tennessee | |
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 | |
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 | |
Papeteries d'Espaly SAS | France | |
Papeteries Etienne SAS | France | |
Pines II, Inc. | Delaware | |
Progres Action Citoyenne Maroc SARL | Morocco | |
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 |
Name | Jurisdiction | |
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 | |
Supplier Finance Company, LLC | Delaware | |
Sustainable Forests L.L.C. | Delaware | |
Sycamore Forests LLC | 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 | |
TinCorr S.A. | Uruguay | |
TIN Inc. | Delaware | |
TIN Intermediate, LLC | Delaware | |
TIN Land Financing, LLC | Delaware | |
TIN Timber Financing, LLC | Delaware | |
Transtates Properties Incorporated | Delaware | |
U. C. Realty Corp. | Delaware | |
Velarium Oy Ab | Finland | |
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 25, 2016 |
/s/ Mark S. Sutton |
Mark S. Sutton |
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 25, 2016 |
/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/ Mark S. Sutton |
Mark S. Sutton |
Chairman and Chief Executive Officer |
February 25, 2016 |
/s/ Carol L. Roberts |
Carol L. Roberts |
Senior Vice President and Chief Financial Officer |
February 25, 2016 |
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