Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

Schedule of Income Before Income Tax, Domestic and Foreign [Table Text Block]

The components of International Paper’s earnings from continuing operations before income taxes and equity earnings by taxing jurisdiction were as follows:



In millions	2018		2017		2016
Earnings (loss)
U.S.	$	1,450	$	297	$	411
Non-U.S.	331		551		384
Earnings (loss) from continuing operations before income taxes and equity earnings	$	1,781	$	848	$	795

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

The provision (benefit) for income taxes from continuing operations (excluding noncontrolling interests) by taxing jurisdiction was as follows:



In millions	2018			2017			2016
Current tax provision (benefit)
U.S. federal	$	227		$	(73	)	$	(7	)
U.S. state and local	37			(23		)	(12		)
Non-U.S.	165			112			76
	$	429		$	16		$	57
Deferred tax provision (benefit)
U.S. federal	$	12		$	(1,150	)	$	134
U.S. state and local	50			9			27
Non-U.S.	(46		)	40			(25		)
	$	16		$	(1,101	)	$	136
Income tax provision (benefit)	$	445		$	(1,085	)	$	193

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

A reconciliation of income tax expense using the statutory U.S. income tax rate compared with the actual income tax provision follows:



In millions	2018			2017			2016
Earnings (loss) from continuing operations before income taxes and equity earnings	$	1,781		$	848		$	795
Statutory U.S. income tax rate	21		%	35		%	35		%
Tax expense (benefit) using statutory U.S. income tax rate	374			297			278
State and local income taxes	72			(7		)	8
Impact of rate differential on non-U.S. permanent differences and earnings	35			(36		)	(26		)
Tax expense (benefit) on manufacturing activities	(1		)	23			(10		)
Non-deductible business expenses	27			7			9
Sale of non-strategic assets	—			—			12
Tax audits	28			—			(14		)
Subsidiary liquidation	—			—			(63		)
Deemed repatriation, net of foreign tax credits	(25		)	231			—
U.S. federal tax rate change	(13		)	(1,451		)	—
Foreign derived intangible income deduction	(25		)	—			—
US tax on non-U.S. earnings (GILTI and Subpart F)	19			44			21
Foreign tax credits	(15		)	(96		)	(11		)
General business and other tax credits	(26		)	(86		)	(15		)
Other, net	(5		)	(11		)	4
Income tax provision (benefit)	$	445		$	(1,085	)	$	193
Effective income tax rate	25		%	(128		)%	24		%

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

The tax effects of significant temporary differences, representing deferred income tax assets and liabilities at December 31, 2018 and 2017, were as follows:



In millions	2018			2017
Deferred income tax assets:
Postretirement benefit accruals	$	89		$	102
Pension obligations	465			516
Alternative minimum and other tax credits	291			416
Net operating and capital loss carryforwards	594			665
Compensation reserves	191			174
Other	164			139
Gross deferred income tax assets	1,794			2,012
Less: valuation allowance (a)	(441		)	(429		)
Net deferred income tax asset	$	1,353		$	1,583
Deferred income tax liabilities:
Intangibles	$	(152	)	$	(139	)
Investments	(255		)	—
Plants, properties and equipment	(1,826		)	(2,000		)
Forestlands, related installment sales, and investment in subsidiary	(1,453		)	(1,454		)
Gross deferred income tax liabilities	$	(3,686	)	$	(3,593	)
Net deferred income tax liability	$	(2,333	)	$	(2,010	)

Schedule of Unrecognized Tax Benefits Rollforward [Table Text Block]

A reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended December 31, 2018, 2017 and 2016 is as follows:



In millions	2018			2017			2016
Balance at January 1	$	(188	)	$	(98	)	$	(150	)
(Additions) reductions based on tax positions related to current year	(7		)	(54		)	(4		)
(Additions) for tax positions of prior years	(37		)	(40		)	(3		)
Reductions for tax positions of prior years	5			4			33
Settlements	2			6			19
Expiration of statutes of limitations	2			1			5
Currency translation adjustment	3			(7		)	2
Balance at December 31	$	(220	)	$	(188	)	$	(98	)

Summary of Operating Loss and Tax Credit Carryforwards [Table Text Block]

The following details the scheduled expiration dates of the Company’s net operating loss and income tax credit carryforwards:



In millions	2019 Through 2028			2029 Through 2038			Indefinite			Total
U.S. federal and non-U.S. NOLs	$	53		$	—		$	417		$	470
State taxing jurisdiction NOLs (a)	80			42			—			122
U.S. federal, non- U.S. and state tax credit carryforwards (a)	162			11			118			291
U.S. federal and state capital loss carryforwards (a)	2			—			—			2
Total	$	297		$	53		$	535		$	885
Less: valuation allowance (a)	(192		)	(8		)	(198		)	(398		)
Total, net	$	105		$	45		$	337		$	487

(a) State amounts are presented net of federal benefit.