New York | 13-0872805 | |
(State or other jurisdiction of incorporation) | (IRS Employer Identification No.) |
6400 Poplar Avenue, Memphis, Tennessee | 38197 | |
(Address of principal executive offices) | (ZIP Code) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Exhibit Number | Description | |
99.1 | Press Release of International Paper Company dated January 31, 2019. |
Exhibit Number | Description | |
99.1 |
International Paper Company | |||
Date: January 31, 2019 | By: | /s/ Vincent P. Bonnot | |
Name: | Vincent P. Bonnot | ||
Title: | Vice President - Finance and Controller |
Fourth Quarter 2018 | Third Quarter 2018 | Fourth Quarter 2017 | Full-Year 2018 | Full-Year 2017 | ||||||||||||||||
Net Earnings | $ | 0.78 | $ | 1.37 | $ | 3.50 | $ | 4.85 | $ | 5.13 | ||||||||||
Less – Discontinued Operations (Gain) Loss | — | — | 0.02 | (0.83 | ) | (0.08 | ) | |||||||||||||
Net Earnings (Loss) from Continuing Operations | 0.78 | 1.37 | 3.52 | 4.02 | 5.05 | |||||||||||||||
Add Back – Non-Operating Pension Expense | 0.79 | 0.05 | 0.57 | 0.90 | 0.72 | |||||||||||||||
Add Back – Net Special Items Expense (Income) | 0.08 | 0.14 | (2.82 | ) | 0.40 | (2.28 | ) | |||||||||||||
Adjusted Operating Earnings* | $ | 1.65 | $ | 1.56 | $ | 1.27 | $ | 5.32 | $ | 3.49 |
* | Adjusted operating earnings (non-GAAP) is defined as net earnings attributable to International Paper Company (GAAP) excluding discontinued operations, special items and non-operating pension expense. Management uses this measure to focus on on-going operations, and believes that it is useful to investors because it enables them to perform meaningful comparisons of past and present operating results. For discussion on non-operating pension expense, see the footnotes to the Consolidated Statement of Operations. |
Three Months Ended December 31, | Three Months Ended September 30, | Twelve Months Ended December 31, | |||||||||||||||||||
2018 | 2017 | 2018 | 2018 | 2017 | |||||||||||||||||
Net Sales | $ | 5,951 | $ | 5,711 | $ | 5,901 | $ | 23,306 | $ | 21,743 | |||||||||||
Costs and Expenses | |||||||||||||||||||||
Cost of products sold | 3,798 | (a) | 3,702 | (f) | 3,887 | (a) | 15,555 | (a) | 14,802 | (f) | |||||||||||
Selling and administrative expenses | 446 | 434 | (g) | 405 | 1,723 | (n) | 1,621 | (g) | |||||||||||||
Depreciation, amortization and cost of timber harvested | 338 | (b) | 339 | 335 | (b) | 1,328 | (b) | 1,343 | (p) | ||||||||||||
Distribution expenses | 401 | 373 | 397 | 1,567 | 1,434 | ||||||||||||||||
Taxes other than payroll and income taxes | 41 | 45 | 44 | 171 | 169 | ||||||||||||||||
Restructuring and other charges, net | (19 | ) | (c) | 83 | (h) | — | 29 | (c) | 67 | (h) | |||||||||||
Net (gains) losses on sales and impairment of businesses | — | — | 122 | (m) | 122 | (m) | 9 | (q) | |||||||||||||
Litigation settlement | — | — | — | — | 354 | (r) | |||||||||||||||
Net bargain purchase gain on acquisition of business | — | — | — | — | (6 | ) | (s) | ||||||||||||||
Interest expense, net | 135 | 141 | (i) | 133 | 536 | 572 | (i) | ||||||||||||||
Non-operating pension expense | 429 | (d) | 397 | (j) | 25 | 494 | (d) | 530 | (j) | ||||||||||||
Earnings (Loss) From Continuing Operations Before Income Taxes and Equity Earnings | 382 | 197 | 553 | 1,781 | 848 | ||||||||||||||||
Income tax provision (benefit) | 143 | (e) | (1,207 | ) | (k) | 83 | (e) | 445 | (e) | (1,085 | ) | (k) | |||||||||
Equity earnings (loss), net of taxes | 79 | 64 | 92 | 336 | 177 | ||||||||||||||||
Earnings (Loss) From Continuing Operations | 318 | 1,468 | 562 | 1,672 | 2,110 | ||||||||||||||||
Discontinued operations, net of taxes | — | (8 | ) | (l) | — | 345 | (o) | 34 | (l) | ||||||||||||
Net Earnings (Loss) | 318 | 1,460 | 562 | 2,017 | 2,144 | ||||||||||||||||
Less: Net earnings (loss) attributable to noncontrolling interests | 2 | — | — | 5 | — | ||||||||||||||||
Net Earnings (Loss) Attributable to International Paper Company | $ | 316 | $ | 1,460 | $ | 562 | $ | 2,012 | $ | 2,144 | |||||||||||
Basic Earnings Per Common Share Attributable to International Paper Common Shareholders | |||||||||||||||||||||
Earnings (loss) from continuing operations | $ | 0.79 | $ | 3.56 | $ | 1.38 | $ | 4.07 | $ | 5.11 | |||||||||||
Discontinued operations | — | (0.02 | ) | — | 0.84 | 0.08 | |||||||||||||||
Net earnings (loss) | $ | 0.79 | $ | 3.54 | $ | 1.38 | $ | 4.91 | $ | 5.19 | |||||||||||
Diluted Earnings Per Common Share Attributable to International Paper Common Shareholders | |||||||||||||||||||||
Earnings (loss) from continuing operations | $ | 0.78 | $ | 3.52 | $ | 1.37 | $ | 4.02 | $ | 5.05 | |||||||||||
Discontinued operations | — | (0.02 | ) | — | 0.83 | 0.08 | |||||||||||||||
Net earnings (loss) | $ | 0.78 | $ | 3.50 | $ | 1.37 | $ | 4.85 | $ | 5.13 | |||||||||||
Average Shares of Common Stock Outstanding - Diluted | 406.6 | 417.8 | 411.4 | 414.2 | 417.7 | ||||||||||||||||
Cash Dividends Per Common Share | $ | 0.5000 | $ | 0.4750 | $ | 0.4750 | $ | 1.9250 | $ | 1.8625 | |||||||||||
Amounts Attributable to International Paper Common Shareholders | |||||||||||||||||||||
Earnings (loss) from continuing operations, net of tax | $ | 316 | $ | 1,468 | $ | 562 | $ | 1,667 | $ | 2,110 | |||||||||||
Discontinued operations, net of tax | — | (8 | ) | — | 345 | 34 | |||||||||||||||
Net earnings | $ | 316 | $ | 1,460 | $ | 562 | $ | 2,012 | $ | 2,144 |
(a) | Includes pre-tax charges of $8 million ($6 million after taxes), $6 million ($4 million after taxes) and $32 million ($24 million after taxes) for the three months ended December 31, 2018 and September 30, 2018 and the twelve months ended December 31, 2018, respectively, for the removal of abandoned property at our mills, pre-tax income of $5 million ($4 million after taxes) for the three months and twelve months ended December 31, 2018 for a litigation settlement recovery, a pre-tax charge of $9 million ($7 million after taxes) for the three months ended September 30, 2018 and the twelve months ended December 31, 2018 for an environmental remediation reserve adjustment and a pre-tax charge of $9 million ($7 million after taxes) for the twelve months ended December 31, 2018 for a legal settlement. |
(b) | Includes pre-tax charges of $1 million (before and after taxes), $5 million ($4 million after taxes) and $6 million ($5 million after taxes) for the three months ended December 31, 2018 and September 30, 2018 and the twelve months ended December 31, 2018, respectively, for accelerated depreciation associated with the announced conversion of a paper machine at our Riverdale mill to containerboard production. |
(c) | Includes a pre-tax gain of $31 million ($23 million after taxes) for the three months and twelve months ended December 31, 2018 related to the sale of our investment in Liaison Technologies, a pre-tax charge of $10 million ($7 million after taxes) for the three months and twelve months ended December 31, 2018 for debt extinguishment costs, a pre-tax charge of $3 million ($2 million after taxes) for the three months and twelve months ended December 31, 2018 for severance associated with the Riverdale mill conversion and income of $1 million (before and after taxes) and a pre-tax charge of $47 million ($34 million after taxes) for the three months and twelve months ended December 31, 2018, respectively, related to the optimization of our EMEA Packaging business. |
(d) | Includes a pre-tax charge of $424 million ($318 million after taxes) for the three months and twelve months ended December 31, 2018 for a settlement accounting charge associated with an annuity purchase and transfer of pension obligations for approximately 23,000 retirees. |
(e) | Includes tax expense of $19 million for the three months and twelve months ended December 31, 2018 related to international investment restructuring, tax expense of $25 million for the three months and twelve months ended December 31, 2018 related to foreign tax audits, a tax benefit of $36 million for the three months ended September 30, 2018 and the twelve months ended December 31, 2018 related to the Tax Cuts and Jobs Act and tax expense of $9 million for the twelve months ended December 31, 2018 related to state income tax legislative changes. |
(f) | Includes pre-tax charges of $6 million ($4 million after taxes) and $20 million ($13 million after taxes) for the three months and twelve months ended December 31, 2017, respectively, for the removal of abandoned property at our mills and a pre-tax charge of $14 million ($8 million after taxes) for the twelve months ended December 31, 2017 for the amortization of inventory fair value step-up for the pulp business acquired in December 2016. |
(g) | Includes pre-tax charges of $18 million ($11 million after taxes) and $33 million ($20 million after taxes) for the three months and twelve months ended December 31, 2017, respectively, for costs associated with the acquisition and integration of the pulp business acquired in December 2016. |
(h) | Includes a pre-tax charge of $83 million ($51 million after taxes) for the three months and twelve months ended December 31, 2017 for debt extinguishment costs, a pre-tax gain of $14 million ($9 million after taxes) for the twelve months ended December 31, 2017 related to the sale of our investment in ArborGen and a gain of $2 million (before and after taxes) for the twelve months ended December 31, 2017 for other items. |
(i) | Includes pre-tax income of $1 million (before and after taxes) and $5 million ($3 million after taxes) for the three months and twelve months ended December 31, 2017, respectively, for interest income related to income tax refund claims. |
(j) | Includes a pre-tax charge of $376 million ($232 million after taxes) for the three months and twelve months ended December 31, 2017 for a settlement accounting charge associated with an annuity purchase and transfer of pension obligations for approximately 45,000 retirees. |
(k) | Includes a provisional net tax benefit of $1.2 billion for the three months and twelve months ended December 31, 2017 related to the enactment of the Tax Cuts and Jobs Act, tax benefits of $28 million and $113 million for the three months and twelve months ended December 31, 2017, respectively, related to income tax refund claims, tax expense of $9 million for the three months and twelve months ended December 31, 2017 related to an international tax law change, tax expense of $34 million for the twelve months ended December 31, 2017 related to international investment restructuring, and tax expense of $38 million for the twelve months ended December 31, 2017 associated with a 2017 cash pension contribution. |
(l) | Includes a pre-tax charge of $17 million ($10 million after taxes) for the three months and twelve months ended December 31, 2017 for transaction costs associated with the transfer of the North American Consumer Packaging business and a pre-tax charge of $45 million ($28 million after taxes) for non-operating pension expenses related to curtailment charges and termination benefits. |
(m) | Includes a pre-tax charge of $122 million ($81 million after taxes) for the three months ended September 30, 2018 and the twelve months ended December 31, 2018 related to the impairment of fixed assets and an intangible asset in our Brazil Packaging business. |
(n) | Includes a pre-tax charge of $12 million ($9 million after taxes) associated with our proposal to acquire Smurfit Kappa. |
(o) | Includes pre-tax income of $488 million ($364 million after taxes) for the gain on the transfer of the North American Consumer Packaging business and a pre-tax charge of $25 million ($19 million after taxes) for transaction costs to transfer the North American Consumer Packaging business. |
(p) | Includes a pre-tax charge of $10 million ($7 million after taxes) for accelerated amortization of a Brazil Packaging intangible asset. |
(q) | Includes a pre-tax charge of $9 million ($4 million after taxes) for the impairment of the assets of our Foodservice business in Asia. |
(r) | Includes a pre-tax charge of $354 million ($219 million after taxes) related to the settlement of the Kleen Products anti-trust class action lawsuit. |
(s) | Includes a net bargain purchase gain of $6 million (before and after taxes) associated with the June 2016 acquisition of Holmen Paper's newsprint mill in Madrid, Spain. |
Three Months Ended December 31, | Three Months Ended September 30, | Twelve Months Ended December 31, | |||||||||||||||||||
2018 | 2017 | 2018 | 2018 | 2017 | |||||||||||||||||
Net Earnings (Loss) Attributable to International Paper Company | $ | 316 | $ | 1,460 | $ | 562 | $ | 2,012 | $ | 2,144 | |||||||||||
Less: Discontinued operations (gain) loss | — | 8 | — | (345 | ) | (34 | ) | ||||||||||||||
Earnings (Loss) from Continuing Operations, including non-controlling interest | 316 | 1,468 | 562 | 1,667 | 2,110 | ||||||||||||||||
Add back: Non-operating pension expense | 322 | 238 | 19 | 371 | 298 | ||||||||||||||||
Add back: Special items expense (income) | 32 | (1,176 | ) | 60 | 166 | (952 | ) | ||||||||||||||
Adjusted Operating Earnings | $ | 670 | $ | 530 | $ | 641 | $ | 2,204 | $ | 1,456 | |||||||||||
Three Months Ended December 31, | Three Months Ended September 30, | Twelve Months Ended December 31, | |||||||||||||||||||
2018 | 2017 | 2018 | 2018 | 2017 | |||||||||||||||||
Diluted Earnings per Common Share as Reported | $ | 0.78 | $ | 3.50 | $ | 1.37 | $ | 4.85 | $ | 5.13 | |||||||||||
Less: Discontinued operations (gain) loss | — | 0.02 | — | (0.83 | ) | (0.08 | ) | ||||||||||||||
Continuing Operations | 0.78 | 3.52 | 1.37 | 4.02 | 5.05 | ||||||||||||||||
Add back: Non-operating pension expense | 0.79 | 0.57 | 0.05 | 0.90 | 0.72 | ||||||||||||||||
Add back: Special items expense (income) | 0.08 | (2.82 | ) | 0.14 | 0.40 | (2.28 | ) | ||||||||||||||
Adjusted Operating Earnings per Share | $ | 1.65 | $ | 1.27 | $ | 1.56 | $ | 5.32 | $ | 3.49 |
Three Months Ended December 31, | Three Months Ended September 30, | Twelve Months Ended December 31, | |||||||||||||||||||
2018 | 2017 | 2018 | 2018 | 2017 | |||||||||||||||||
Industrial Packaging | $ | 4,017 | $ | 3,893 | $ | 4,034 | $ | 15,900 | $ | 15,077 | |||||||||||
Global Cellulose Fibers | 736 | 721 | 714 | 2,819 | 2,551 | ||||||||||||||||
Printing Papers | 1,160 | 1,106 | 1,102 | 4,375 | 4,157 | ||||||||||||||||
Corporate and Inter-segment Sales (l) | 38 | (9 | ) | 51 | 212 | (42 | ) | ||||||||||||||
Net Sales | $ | 5,951 | $ | 5,711 | $ | 5,901 | $ | 23,306 | $ | 21,743 | |||||||||||
Operating Profit by Business Segment | |||||||||||||||||||||
Three Months Ended December 31, | Three Months Ended September 30, | Twelve Months Ended December 31, | |||||||||||||||||||
2018 | 2017 | 2018 | 2018 | 2017 | |||||||||||||||||
Industrial Packaging | $ | 647 | (a) | $ | 609 | (f) | $ | 472 | (a) | $ | 2,093 | (a) | $ | 1,547 | (f) | ||||||
Global Cellulose Fibers | 91 | (b) | 79 | (g) | 83 | (b) | 251 | (b) | 65 | (g) | |||||||||||
Printing Papers | 192 | (c) | 136 | 183 | (c) | 533 | (c) | 457 | (h) | ||||||||||||
Total Business Segment Operating Profit | $ | 930 | $ | 824 | $ | 738 | $ | 2,877 | $ | 2,069 | |||||||||||
Earnings (Loss) From Continuing Operations Before Income Taxes and Equity Earnings | $ | 382 | $ | 197 | $ | 553 | $ | 1,781 | $ | 848 | |||||||||||
Interest expense, net | 135 | 141 | (i) | 133 | 536 | 572 | (i) | ||||||||||||||
Noncontrolling interest/equity earnings adjustment (m) | (3 | ) | (1 | ) | (2 | ) | (10 | ) | (2 | ) | |||||||||||
Corporate items (l) | 8 | 18 | 20 | 67 | 91 | ||||||||||||||||
Corporate special items, net | (21 | ) | (d) | 83 | (j) | 9 | (d) | 9 | (d) | 76 | (j) | ||||||||||
Non-operating pension expense | 429 | (e) | 386 | (k) | 25 | 494 | (e) | 484 | (k) | ||||||||||||
Adjusted Operating Profit | $ | 930 | $ | 824 | $ | 738 | $ | 2,877 | $ | 2,069 | |||||||||||
Equity Earnings (Loss) in Ilim S.A., Net of Taxes | $ | 67 | $ | 64 | $ | 74 | $ | 290 | $ | 183 | |||||||||||
Equity Earnings (Loss) in Graphic Packaging LLC | $ | 10 | $ | — | $ | 19 | $ | 46 | $ | — |
(a) | Includes a charge of $122 million for the three months ended September 30, 2018 and the twelve months ended December 31, 2018 for the impairment of fixed assets and an intangible asset in our Brazil Packaging business, income of $1 million and a charge of $47 million for the three months and twelve months ended December 31, 2018, respectively, related to the optimization of our EMEA Packaging business, income of $5 million for the three months and twelve months ended December 31, 2018 for a litigation settlement recovery and charges of $5 million, $4 million and $20 million for the three months ended December 31, 2018 and September 30, 2018, and the twelve months ended December 31, 2018, respectively, for the removal of abandoned property at our mills. |
(b) | Includes charges of $2 million, $2 million and $11 million for the three months ended December 31, 2018 and September 30, 2018 and the twelve months ended December 31, 2018, respectively, for the removal of abandoned property at our mills. |
(c) | Includes charges of $4 million, $5 million and $9 million for the three months ended December 31, 2018 and September 30, 2018 and the twelve months ended December 31, 2018, respectively, for accelerated depreciation and severance charges associated with the announced conversion of a paper machine at our Riverdale mill to containerboard production and a charge of $1 million for the three months and twelve months ended December 31, 2018 for the removal of abandoned property at our mills. |
(d) | Includes a gain of $31 million for the three months and twelve months ended December 31, 2018 related to the sale of our investment in Liaison Technologies, a charge of $12 million for the twelve months ended December 31, 2018 associated with our proposal to acquire Smurfit Kappa, a charge of $10 million for the three months and twelve months ended December 31, 2018 for debt extinguishment costs, a charge of $9 million for the twelve months ended December 31, 2018 for a legal settlement and a charge of $9 million for the three months ended September 30, 2018 and the twelve months ended December 31, 2018 for an environmental remediation reserve adjustment. |
(e) | Includes a charge of $424 million for the three months and twelve months ended December 31, 2018 for a settlement accounting charge associated with an annuity purchase and transfer of pension obligations for approximately 23,000 retirees. |
(f) | Includes a charge of $354 million for the twelve months ended December 31, 2017 related to the settlement of the Kleen Products anti-trust class action lawsuit, |
(g) | Includes charges of $18 million and $33 million for the three months and twelve months ended December 31, 2017, respectively, for costs associated with the acquisition and integration of the pulp business acquired in December 2016, a charge of $14 million for the twelve months ended December 31, 2017 for the amortization of the inventory fair value step-up for that business and charges of $1 million and $4 million for the three months and twelve months ended December 31, 2017, respectively, for the removal of abandoned property at our mills and other costs. |
(h) | Includes a charge of $2 million for the twelve months ended December 31, 2017 for the removal of abandoned property at our mills and other costs. |
(i) | Includes income of $1 million and $5 million for the three months and twelve months ended December 31, 2017, respectively, for interest income associated with income tax refund claims. |
(j) | Includes a charge of $83 million for the three months and twelve months ended December 31, 2017 for debt extinguishment costs, a gain of $14 million for the twelve months ended December 31, 2017 related to the sale of our investment in ArborGen, a charge of $9 million for the twelve months ended December 31, 2017 for the impairment of the assets of our Foodservice business in Asia and a gain of $2 million for the twelve months ended December 31, 2017 for other items. |
(k) | Includes a charge of $376 million for the three months and twelve months ended December 31, 2017 for a settlement accounting charge associated with an annuity purchase and transfer of pension obligations for approximately 45,000 retirees. |
(l) | Includes sales and operating profits of previously divested businesses. |
(m) | Operating profits for business 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 interest and equity earnings for these subsidiaries are adjusted here to present consolidated earnings before income taxes and equity earnings. |
Three Months Ended December 31, 2018 | ||||||||||||||||
Industrial Packaging | Global Cellulose Fibers | Printing Papers | Total | |||||||||||||
Operating Profit (Loss) as Reported | $ | 647 | $ | 91 | $ | 192 | $ | 930 | ||||||||
Special Items Expense (Income) (a) | (1 | ) | 2 | 5 | 6 | |||||||||||
Operating Profit (Loss) Before Special Items | $ | 646 | $ | 93 | $ | 197 | $ | 936 | ||||||||
Three Months Ended December 31, 2017 | ||||||||||||||||
Industrial Packaging | Global Cellulose Fibers | Printing Papers | Total | |||||||||||||
Operating Profit (Loss) as Reported | $ | 609 | $ | 79 | $ | 136 | $ | 824 | ||||||||
Special Items Expense (Income) (b) | 5 | 19 | — | 24 | ||||||||||||
Operating Profit (Loss) Before Special Items | $ | 614 | $ | 98 | $ | 136 | $ | 848 | ||||||||
Three Months Ended September 30, 2018 | ||||||||||||||||
Industrial Packaging | Global Cellulose Fibers | Printing Papers | Total | |||||||||||||
Operating Profit (Loss) as Reported | $ | 472 | $ | 83 | $ | 183 | $ | 738 | ||||||||
Special Items Expense (Income) (a) | 126 | 2 | 5 | 133 | ||||||||||||
Operating Profit (Loss) Before Special Items | $ | 598 | $ | 85 | $ | 188 | $ | 871 | ||||||||
Twelve Months Ended December 31, 2018 | ||||||||||||||||
Industrial Packaging | Global Cellulose Fibers | Printing Papers | Total | |||||||||||||
Operating Profit (Loss) as Reported | $ | 2,093 | $ | 251 | $ | 533 | $ | 2,877 | ||||||||
Special Items Expense (Income) (a) | 184 | 11 | 10 | 205 | ||||||||||||
Operating Profit (Loss) Before Special Items | $ | 2,277 | $ | 262 | $ | 543 | $ | 3,082 | ||||||||
Twelve Months Ended December 31, 2017 | ||||||||||||||||
Industrial Packaging | Global Cellulose Fibers | Printing Papers | Total | |||||||||||||
Operating Profit (Loss) as Reported | $ | 1,547 | $ | 65 | $ | 457 | $ | 2,069 | ||||||||
Special Items Expense (Income) (c) | 372 | 51 | 2 | 425 | ||||||||||||
Operating Profit (Loss) Before Special Items | $ | 1,919 | $ | 116 | $ | 459 | $ | 2,494 |
(a) | See footnotes (a) - (c) on Sales and Earnings by Business Segment |
(b) | See footnotes (f) - (g) on Sales and Earnings by Business Segment |
(c) | See footnotes (f) - (h) on Sales and Earnings by Business Segment |
Three Months Ended December 31, | Three Months Ended September 30, | Twelve Months Ended December 31, | |||||||||||||
2018 | 2017 | 2018 | 2018 | 2017 | |||||||||||
Industrial Packaging (In thousands of short tons) | |||||||||||||||
Corrugated Packaging (c) | 2,655 | 2,629 | 2,666 | 10,624 | 10,413 | ||||||||||
Containerboard | 793 | 856 | 853 | 3,229 | 3,294 | ||||||||||
Recycling | 582 | 573 | 566 | 2,282 | 2,257 | ||||||||||
Saturated Kraft | 47 | 49 | 51 | 196 | 181 | ||||||||||
Gypsum /Release Kraft | 51 | 64 | 56 | 227 | 229 | ||||||||||
Bleached Kraft | 7 | 7 | 8 | 31 | 27 | ||||||||||
EMEA Packaging (c) (d) | 363 | 394 | 329 | 1,476 | 1,518 | ||||||||||
Brazilian Packaging (c) | 88 | 91 | 92 | 351 | 357 | ||||||||||
European Coated Paperboard | 106 | 102 | 98 | 390 | 398 | ||||||||||
Industrial Packaging | 4,692 | 4,765 | 4,719 | 18,806 | 18,674 | ||||||||||
Global Cellulose Fibers (In thousands of metric tons) (b) | 908 | 1,002 | 886 | 3,573 | 3,708 | ||||||||||
Printing Papers (In thousands of short tons) | |||||||||||||||
U.S. Uncoated Papers | 471 | 464 | 461 | 1,886 | 1,915 | ||||||||||
European & Russian Uncoated Papers | 374 | 379 | 363 | 1,440 | 1,483 | ||||||||||
Brazilian Uncoated Papers | 307 | 335 | 293 | 1,125 | 1,167 | ||||||||||
Indian Uncoated Papers | 68 | 67 | 62 | 263 | 253 | ||||||||||
Printing Papers | 1,220 | 1,245 | 1,179 | 4,714 | 4,818 |
(a) | Sales volumes include third party and inter-segment sales and exclude sales of equity investees. | ||||||
(b) | Includes North American, European and Brazilian volumes and internal sales to mills. | ||||||
(c) | Volumes for corrugated box sales reflect consumed tons sold (CTS). Board sales by these businesses reflect invoiced tons. | ||||||
(d) | Excludes newsprint sales volumes at the Madrid, Spain mill through Q3 2017. |
December 31, 2018 | December 31, 2017 | |||||||
Assets | ||||||||
Current Assets | ||||||||
Cash and Temporary Investments | $ | 589 | $ | 1,018 | ||||
Accounts and Notes Receivable, Net | 3,521 | 3,287 | ||||||
Contract Assets | 395 | — | ||||||
Inventories | 2,241 | 2,313 | ||||||
Assets Held for Sale | — | 1,377 | ||||||
Other | 250 | 282 | ||||||
Total Current Assets | 6,996 | 8,277 | ||||||
Plants, Properties and Equipment, Net | 13,067 | 13,265 | ||||||
Forestlands | 402 | 448 | ||||||
Investments | 1,648 | 390 | ||||||
Financial Assets of Special Purpose Entities | 7,070 | 7,051 | ||||||
Goodwill | 3,374 | 3,411 | ||||||
Deferred Charges and Other Assets | 1,019 | 1,061 | ||||||
Total Assets | $ | 33,576 | $ | 33,903 | ||||
Liabilities and Equity | ||||||||
Current Liabilities | ||||||||
Notes Payable and Current Maturities of Long-Term Debt | $ | 639 | $ | 311 | ||||
Accounts Payable and Accrued Liabilities | 4,055 | 3,986 | ||||||
Liabilities Held for Sale | — | 805 | ||||||
Total Current Liabilities | 4,694 | 5,102 | ||||||
Long-Term Debt | 10,015 | 10,846 | ||||||
Nonrecourse Financial Liabilities of Special Purpose Entities | 6,298 | 6,291 | ||||||
Deferred Income Taxes | 2,600 | 2,291 | ||||||
Pension Benefit Obligation | 1,762 | 1,939 | ||||||
Postretirement and Postemployment Benefit Obligation | 264 | 326 | ||||||
Other Liabilities | 560 | 567 | ||||||
Equity | ||||||||
Invested Capital, Net of Treasury Stock | (103 | ) | 342 | |||||
Retained Earnings | 7,465 | 6,180 | ||||||
Total International Paper Shareholders’ Equity | 7,362 | 6,522 | ||||||
Noncontrolling Interests | 21 | 19 | ||||||
Total Equity | 7,383 | 6,541 | ||||||
Total Liabilities and Equity | $ | 33,576 | $ | 33,903 |
Twelve Months Ended December 31, | ||||||||
2018 | 2017 | |||||||
Operating Activities | ||||||||
Net earnings (loss) | $ | 2,017 | $ | 2,144 | ||||
Depreciation, amortization and cost of timber harvested | 1,328 | 1,423 | ||||||
Deferred income tax expense (benefit), net | 133 | (1,113 | ) | |||||
Restructuring and other charges, net | 29 | 67 | ||||||
Pension plan contributions | — | (1,250 | ) | |||||
Net gain on transfer of North American Consumer Packaging business | (488 | ) | — | |||||
Net bargain purchase gain on acquisition of business | — | (6 | ) | |||||
Net (gains) losses on sales and impairments of businesses | 122 | 9 | ||||||
Equity method dividends received | 153 | 133 | ||||||
Equity (earnings) loss, net | (336 | ) | (177 | ) | ||||
Periodic pension expense, net | 632 | 717 | ||||||
Other, net | 75 | 212 | ||||||
Changes in current assets and liabilities | ||||||||
Accounts and notes receivable | (342 | ) | (370 | ) | ||||
Contract assets | (32 | ) | — | |||||
Inventories | (236 | ) | (87 | ) | ||||
Accounts payable and accrued liabilities | 151 | 114 | ||||||
Interest payable | (8 | ) | 1 | |||||
Other | 28 | (60 | ) | |||||
Cash Provided By (Used For) Operating Activities | 3,226 | 1,757 | ||||||
Investment Activities | ||||||||
Invested in capital projects | (1,572 | ) | (1,391 | ) | ||||
Acquisitions, net of cash acquired | (8 | ) | (45 | ) | ||||
Net settlement on transfer of North American Consumer Packaging business | (40 | ) | — | |||||
Proceeds from divestitures, net of cash divested | — | 4 | ||||||
Proceeds from sale of fixed assets | 23 | 26 | ||||||
Other | 28 | 15 | ||||||
Cash Provided By (Used For) Investment Activities | (1,569 | ) | (1,391 | ) | ||||
Financing Activities | ||||||||
Repurchases of common stock and payments of restricted stock tax withholding | (732 | ) | (47 | ) | ||||
Issuance of debt | 490 | 1,907 | ||||||
Reduction of debt | (1,008 | ) | (1,424 | ) | ||||
Change in book overdrafts | (1 | ) | 26 | |||||
Dividends paid | (789 | ) | (769 | ) | ||||
Net debt tender premiums paid | (6 | ) | (84 | ) | ||||
Other | — | (8 | ) | |||||
Cash Provided By (Used for) Financing Activities | (2,046 | ) | (399 | ) | ||||
Effect of Exchange Rate Changes on Cash | (40 | ) | 18 | |||||
Change in Cash and Temporary Investments | (429 | ) | (15 | ) | ||||
Cash and Temporary Investments | ||||||||
Beginning of the period | 1,018 | 1,033 | ||||||
End of the period | $ | 589 | $ | 1,018 |
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Cash provided by (used for) Operating Activities | $ | 821 | $ | 1,188 | $ | 3,226 | $ | 1,757 | |||||||
Adjustments: | |||||||||||||||
Cash invested in capital projects | (286 | ) | (456 | ) | (1,572 | ) | (1,391 | ) | |||||||
Cash contribution to pension plan | — | — | — | 1,250 | |||||||||||
Cash payment for Kleen Settlement | — | — | — | 354 | |||||||||||
Free Cash Flow | $ | 535 | $ | 732 | $ | 1,654 | $ | 1,970 |
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