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 28, 2015. |
International Paper Company | |||
Date: January 28, 2015 | By: | /s/ TERRI L. HERRINGTON | |
Name: | Terri L. Herrington | ||
Title: | Vice President - Finance and Controller |
Exhibit Number | Description | |
99.1 | Press Release of International Paper Company dated January 28, 2015. |
Fourth Quarter 2014 | Fourth Quarter 2013 | Full-Year 2014 | Full-Year 2013 | |||||||||||||
Net Earnings | $ | 0.32 | $ | 0.98 | $ | 1.29 | $ | 3.11 | ||||||||
Less – Discontinued Operations (Gain) Loss | 0.02 | 0.80 | 0.02 | 0.69 | ||||||||||||
Net Earnings (Loss) from Continuing Operations | 0.34 | 1.78 | 1.31 | 3.80 | ||||||||||||
Add Back – Net Special Items Expense | 0.12 | (1.08 | ) | 1.39 | (1.18 | ) | ||||||||||
Add Back – Non-Operating Pension Expense | 0.07 | 0.11 | 0.30 | 0.44 | ||||||||||||
Operating Earnings* | $ | 0.53 | $ | 0.81 | $ | 3.00 | $ | 3.06 |
* | Operating Earnings is defined as net earnings from continuing operations attributable to International Paper Company (GAAP) excluding special items and non-operating pension expense. |
Three Months Ended December 31, | Three Months Ended September 30, | Twelve Months Ended December 31, | |||||||||||||||||||
2014 | 2013 | 2014 | 2014 | 2013 | |||||||||||||||||
Net Sales | $ | 5,943 | $ | 5,848 | $ | 6,051 | $ | 23,617 | $ | 23,483 | |||||||||||
Costs and Expenses | |||||||||||||||||||||
Cost of products sold | 4,105 | 4,040 | 4,055 | (n) | 16,254 | (n) | 16,282 | (w) | |||||||||||||
Selling and administrative expenses | 462 | (a) | 444 | (g) | 467 | (o) | 1,793 | (s) | 1,796 | (x) | |||||||||||
Depreciation, amortization and cost of timber harvested | 346 | 367 | 358 | 1,406 | 1,531 | (y) | |||||||||||||||
Distribution expenses | 384 | 386 | 394 | 1,521 | 1,583 | ||||||||||||||||
Taxes other than payroll and income taxes | 43 | 40 | 43 | 180 | 178 | ||||||||||||||||
Restructuring and other charges | 16 | (b) | 69 | (h) | 24 | (p) | 846 | (t) | 156 | (z) | |||||||||||
Net losses on sales and impairment of businesses | 38 | (c) | 2 | (i) | — | 38 | (c) | 3 | (aa) | ||||||||||||
Impairment of goodwill and other intangibles | 100 | (d) | 127 | (j) | — | 100 | (d) | 127 | (j) | ||||||||||||
Net bargain purchase gain on acquisition of business | — | — | — | — | (13 | ) | (ab) | ||||||||||||||
Interest expense, net | 142 | 134 | 158 | (q) | 607 | (q) | 612 | (ac) | |||||||||||||
Earnings (Loss) From Continuing Operations Before Income Taxes and Equity Earnings | 307 | (a-d) | 239 | (g-j) | 552 | (n-q) | 872 | (c,d,n,q,s,t) | 1,228 | (j,w-ac) | |||||||||||
Income tax provision (benefit) | 34 | (e) | (559 | ) | (k) | 147 | 123 | (u) | (498 | ) | (ad) | ||||||||||
Equity earnings (loss), net of taxes | (136 | ) | (9 | ) | (72 | ) | (200 | ) | (39 | ) | |||||||||||
Earnings (Loss) From Continuing Operations | 137 | (a-e) | 789 | (g-k) | 333 | (n-q) | 549 | (c,d,n,q,s-u) | 1,687 | (j,w-ad) | |||||||||||
Discontinued operations, net of taxes | (9 | ) | (f) | (359 | ) | (l) | 16 | (r) | (13 | ) | (v) | (309 | ) | (ae) | |||||||
Net Earnings (Loss) | 128 | (a-f) | 430 | (g-l) | 349 | (n-r) | 536 | (c,d,n,q,s-v) | 1,378 | (j,w-ae) | |||||||||||
Less: Net earnings (loss) attributable to noncontrolling interests | (6 | ) | (6 | ) | (m) | (6 | ) | (19 | ) | (17 | ) | ||||||||||
Net Earnings (Loss) Attributable to International Paper Company | $ | 134 | (a-f) | $ | 436 | (g-m) | $ | 355 | (n-r) | $ | 555 | (c,d,n,q,s-v) | $ | 1,395 | (j,m,w-ae) | ||||||
Basic Earnings Per Common Share Attributable to International Paper Common Shareholders | |||||||||||||||||||||
Earnings (loss) from continuing operations | $ | 0.34 | (a-e) | $ | 1.80 | (g-k,m) | $ | 0.80 | (n-q) | $ | 1.33 | (c,d,n,q,s-u) | $ | 3.85 | (j,m,w-ad) | ||||||
Discontinued operations | (0.02 | ) | (f) | (0.81 | ) | (l) | 0.04 | (r) | (0.03 | ) | (v) | (0.70 | ) | (ae) | |||||||
Net earnings (loss) | $ | 0.32 | (a-f) | $ | 0.99 | (g-m) | $ | 0.84 | (n-r) | $ | 1.30 | (c,d,n,q,s-v) | $ | 3.15 | (j,m,w-ae) | ||||||
Diluted Earnings Per Common Share Attributable to International Paper Common Shareholders | |||||||||||||||||||||
Earnings (loss) from continuing operations | $ | 0.34 | (a-e) | $ | 1.78 | (g-k,m) | $ | 0.79 | (n-q) | $ | 1.31 | (c,d,n,q,s-u) | $ | 3.80 | (j,m,w-ad) | ||||||
Discontinued operations | (0.02 | ) | (f) | (0.80 | ) | (l) | 0.04 | (r) | (0.02 | ) | (v) | (0.69 | ) | (ae) | |||||||
Net earnings (loss) | $ | 0.32 | (a-f) | $ | 0.98 | (g-m) | $ | 0.83 | (n-r) | $ | 1.29 | (c,d,n,q,s-v) | $ | 3.11 | (j,m,w-ae) | ||||||
Average Shares of Common Stock Outstanding - Diluted | 424.9 | 445.3 | 428.6 | 432.0 | 448.1 | ||||||||||||||||
Cash Dividends Per Common Share | $ | 0.4000 | $ | 0.3500 | $ | 0.3500 | $ | 1.4500 | $ | 1.2500 | |||||||||||
Amounts Attributable to International Paper Common Shareholders | |||||||||||||||||||||
Earnings (loss) from continuing operations, net of tax | $ | 143 | (a-e) | $ | 795 | (g-k,m) | $ | 339 | (n-q) | $ | 568 | (c,d,n,q,s-u) | $ | 1,704 | (j,m,w-ad) | ||||||
Discontinued operations, net of tax | (9 | ) | (f) | (359 | ) | (l) | 16 | (r) | (13 | ) | (v) | (309 | ) | (ae) | |||||||
Net earnings | $ | 134 | (a-f) | $ | 436 | (g-m) | $ | 355 | (n-r) | $ | 555 | (c,d,n,q,s-v) | $ | 1,395 | (j,m,w-ae) |
(a) | Includes a charge of $1 million (before and after taxes) for integration costs associated with the acquisition of Temple-Inland. |
(b) | Includes a pre-tax charge of $7 million ($4 million after taxes) for costs associated with the shutdown of our Courtland mill, a pre-tax charge of $4 million ($3 million after taxes) for integration costs associated with our Brazil Packaging business, and a net pre-tax charge of $5 million ($3 million after taxes) for other items. |
(c) | Includes a pre-tax charge of $47 million ($36 million after taxes) for a loss on the sale of a business by ASG, in which we hold an investment, and the resulting impairment of our ASG investment, and a pre-tax gain of $9 million ($5 million after taxes) related to the sale of an investment. |
(d) | Includes a charge of $100 million (before and after taxes) for a goodwill impairment charge related to our Asia Industrial Packaging business. |
(e) | Includes a tax benefit of $90 million associated with internal restructuring. |
(f) | Includes a pre-tax loss of $14 million ($9 million after taxes) related to the Building Products divestiture. |
(g) | Includes a pre-tax charge of $12 million ($7 million after taxes) for integration costs associated with the acquisition of Temple-Inland. |
(h) | Includes a pre-tax charge of $67 million ($41 million after taxes) for costs associated with the shutdown of our Courtland mill, a pre-tax charge of $4 million ($3 million after taxes) for costs associated with the restructuring of the Asia Box operations, and a net pre-tax gain of $2 million ($0 million after taxes) for other items. |
(i) | Includes a pre-tax charge of $2 million ($1 million after taxes) for an adjustment associated with the Company's divestiture of the Shorewood operations. |
(j) | Includes a pre-tax charge of $127 million ($122 million after taxes) for the impairment of goodwill and a trade name intangible asset of the Company's India Papers business. |
(k) | Includes a tax benefit of $651 million associated with the closing of a U.S. federal tax audit and a net tax benefit of $3 million for other items. |
(l) | Includes the operating earnings of the xpedx business, a pre-tax charge of $400 million ($366 million after taxes) for the impairment of goodwill of the xpedx business, a pre-tax gain of $18 million ($11 million after taxes) related to the divestiture of the Building Products business, a pre-tax charge of $8 million ($5 million after taxes) for costs associated with the spin-off of the xpedx business, and charges of $2 million ($1 million after taxes) for other items. |
(m) | Includes pre-tax noncontrolling interest income of $4 million ($3 million after taxes) associated with the write-off of a trade name intangible asset in our India Papers business. |
(n) | Includes a pre-tax charge of $5 million ($3 million after taxes) for a refund of previously claimed state tax credits. |
(o) | Includes a gain of $18 million (before and after taxes) for the resolution of a legal contingency in India, a pre-tax charge of $35 million ($21 million after taxes) for costs associated with a multi-employer pension plan withdrawal liability, a pre-tax charge of $24 million ($13 million after taxes) for costs associated with a foreign tax amnesty program and charges of $1 million (before and after taxes) for other items. |
(p) | Includes a pre-tax charge of $13 million ($8 million after taxes) for debt extinguishment costs, a pre-tax charge of $3 million ($2 million after taxes) for costs associated with the shutdown of our Courtland mill, a pre-tax charge of $5 million ($3 million after taxes) for costs associated with the restructuring of the Company's Packaging business in Europe, and a net pre-tax loss of $3 million ($2 million after taxes) for other items. |
(q) | Includes interest income of $2 million (before and after taxes) associated with the resolution of a legal contingency in India, and a pre-tax expense of $8 million ($4 million after taxes) associated with a foreign tax amnesty program. |
(r) | Includes a net pre-tax gain of $11 million ($14 million after taxes) for the recovery of costs related to the spin-off of the xpedx business and a $2 million tax benefit associated with the Building Products divestiture. |
(s) | Includes a gain of $18 million (before and after taxes) for the resolution of a legal contingency in India, a pre-tax charge of $35 million ($21 million after taxes) for costs associated with a multi-employer pension plan withdrawal liability, a pre-tax charge of $24 million ($13 million after taxes) for costs associated with a foreign tax amnesty program, and a pre-tax charge of $16 million ($10 million after taxes) for integration costs associated with the acquisition of Temple-Inland. |
(t) | Includes a pre-tax charge of $276 million ($169 million after taxes) for debt extinguishment costs, a pre-tax charge of $554 million ($338 million after taxes) for costs associated with the shutdown of our Courtland mill, and a pre-tax charge of $16 million ($11 million after taxes) for other items. |
(u) | Includes a tax expense of $10 million associated with a state legislative change, a tax benefit of $90 million associated with internal restructuring, and a tax benefit of $1 million for other items. |
(v) | Includes the operating earnings of the xpedx business through the date of the spin-off on July 1, 2014, net pre-tax charges of $24 million ($16 million after taxes) for costs associated with the spin-off of the xpedx business, pre-tax charges of $1 million (a gain of $1 million after taxes) for costs associated with the restructuring of xpedx and pre-tax charges of $16 million ($9 million after taxes) associated with the Building Products divestiture. |
(w) | Includes a pre-tax charge of $6 million ($4 million after taxes) for an environmental reserve related to the Company's property in Cass Lake, Minnesota. |
(x) | Includes a pre-tax charge of $62 million ($38 million after taxes) for integration costs associated with the acquisition of Temple-Inland. |
(y) | Includes a pre-tax charge of $9 million ($5 million after taxes) to adjust the value of two Company airplanes to fair value. |
(z) | Includes a pre-tax charge of $25 million ($16 million after taxes) for debt extinguishment costs, pre-tax charges of $118 million ($72 million after taxes) for costs associated with the shutdown of our Courtland mill, a pre-tax charge of $45 million ($28 million after taxes) for costs associated with the permanent shutdown of a paper machine at our Augusta mill, a pre-tax gain of $30 million ($19 million after taxes) for insurance reimbursements related to the 2012 Guaranty Bank legal settlement, and a net pre-tax gain of $2 million (a loss of $1 million after taxes) for other items |
(aa) | Includes a pre-tax charge of $2 million ($1 million after taxes) for an adjustment associated with the Company's divestiture of the Shorewood operations, a pre-tax charge of $2 million ($1 million after taxes) for costs associated with the divestiture of three containerboard mills in 2012 and a gain of $1 million (before and after taxes) related to a bargain purchase adjustment on the first-quarter 2013 acquisition of a majority share of our operations in Turkey. |
(ab) | Includes a gain of $13 million (before and after taxes) related to a bargain purchase adjustment on the first-quarter 2013 acquisition of a majority share of our operations in Turkey. |
(ac) | Includes interest income of $6 million ($4 million after taxes) related to the closing of a U.S. federal income tax audit. |
(ad) | Includes a tax benefit of $744 million associated with the closings of U.S. federal tax audits, a tax benefit of $31 million for an income tax reserve release, and a net tax loss of $1 million for other items. In addition, the first quarter tax rate includes a benefit of approximately $35 million related to the enactment into law of The American Taxpayer Relief Act of 2012 in January 2013, and the third quarter tax rate includes a $30 million benefit related to the adjustment of the tax basis in certain of the Company's fixed assets. |
(ae) | Includes the operating results of the xpedx business for the full year and for the Building Products business through the date of sale in July 2013. Also includes pre-tax charges of $23 million ($19 million after taxes) for expenses associated with the divestiture of the Building Products business, pre-tax charges of $32 million ($19 million after taxes) for costs associated with the restructuring of the xpedx business, pre-tax charges of $22 million ($14 million after taxes) for costs associated with the spin-off of the xpedx business, a pre-tax goodwill impairment charge of $400 million ($366 million after taxes) related to our xpedx business. |
Three Months Ended December 31, | Three Months Ended September 30, | Twelve Months Ended December 31, | |||||||||||||||||||
2014 | 2013 | 2014 | 2014 | 2013 | |||||||||||||||||
Operating Earnings | $ | 227 | $ | 359 | $ | 409 | $ | 1,296 | $ | 1,373 | |||||||||||
Non-Operating Pension | (32 | ) | (47 | ) | (33 | ) | (129 | ) | (197 | ) | |||||||||||
Special Items | (52 | ) | (a) | 483 | (b) | (37 | ) | (c) | (599 | ) | (d) | 528 | (e) | ||||||||
Earnings (Loss) from Continuing Operations, including non-controlling interest | 143 | 795 | 339 | 568 | 1,704 | ||||||||||||||||
Discontinued operations | (9 | ) | (f) | (359 | ) | (g) | 16 | (h) | (13 | ) | (i) | (309 | ) | (j) | |||||||
Net Earnings (Loss) as Reported Attributable to International Paper Company | $ | 134 | $ | 436 | $ | 355 | $ | 555 | $ | 1,395 | |||||||||||
Three Months Ended December 31, | Three Months Ended September 30, | Twelve Months Ended December 31, | |||||||||||||||||||
Diluted Earnings per Common Share | 2014 | 2013 | 2014 | 2014 | 2013 | ||||||||||||||||
Operating Earnings Per Share | $ | 0.53 | $ | 0.81 | $ | 0.95 | $ | 3.00 | $ | 3.06 | |||||||||||
Non-Operating Pension | (0.07 | ) | (0.11 | ) | (0.08 | ) | (0.30 | ) | (0.44 | ) | |||||||||||
Special Items | (0.12 | ) | 1.08 | (0.08 | ) | (1.39 | ) | 1.18 | |||||||||||||
Continuing Operations | 0.34 | 1.78 | 0.79 | 1.31 | 3.80 | ||||||||||||||||
Discontinued operations | (0.02 | ) | (0.80 | ) | 0.04 | (0.02 | ) | (0.69 | ) | ||||||||||||
Diluted Earnings per Common Share as Reported | $ | 0.32 | $ | 0.98 | $ | 0.83 | $ | 1.29 | $ | 3.11 |
(a) | See footnotes (a) - (e) on the Consolidated Statement of Operations |
(b) | See footnotes (g) - (k), (m) on the Consolidated Statement of Operations |
(c) | See footnotes (n) - (q) on the Consolidated Statement of Operations |
(d) | See footnotes (c), (d), (n), (q), (s), (t), (u) on the Consolidated Statement of Operations |
(e) | See footnotes (j), (w) - (ad) on the Consolidated Statement of Operations |
(f) | See footnote (f) on the Consolidated Statement of Operations |
(g) | See footnote (l) on the Consolidated Statement of Operations |
(h) | See footnote (r) on the Consolidated Statement of Operations |
(i) | See footnote (v) on the Consolidated Statement of Operations |
(j) | See footnote (ae) on the Consolidated Statement of Operations |
(1) | The Company calculates Operating Earnings by excluding the after-tax effect of non-operating pension expense and items considered by management to be unusual from the earnings reported under U.S. generally accepted accounting principles (“GAAP”). 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. International Paper believes that using this information, along with net earnings, provides for a more complete analysis of the results of operations by quarter. Net earnings is the most directly comparable GAAP measure. |
(2) | Since diluted earnings per share are computed independently for each period, nine-month per share amounts may not equal the sum of the respective quarters. |
Three Months Ended December 31, | Three Months Ended September 30, | Twelve Months Ended December 31, | |||||||||||||||||||
2014 | 2013 | 2014 | 2014 | 2013 | |||||||||||||||||
Industrial Packaging | $ | 3,697 | $ | 3,715 | $ | 3,754 | $ | 14,944 | $ | 14,810 | |||||||||||
Printing Papers | 1,440 | 1,570 | 1,453 | 5,720 | 6,205 | ||||||||||||||||
Consumer Packaging | 855 | 865 | 876 | 3,403 | 3,435 | ||||||||||||||||
Corporate and Inter-segment Sales | (49 | ) | (302 | ) | (32 | ) | (450 | ) | (967 | ) | |||||||||||
Net Sales | $ | 5,943 | $ | 5,848 | $ | 6,051 | $ | 23,617 | $ | 23,483 | |||||||||||
Operating Profit by Industry Segment | |||||||||||||||||||||
Three Months Ended December 31, | Three Months Ended September 30, | Twelve Months Ended December 31, | |||||||||||||||||||
2014 | 2013 | 2014 | 2014 | 2013 | |||||||||||||||||
Industrial Packaging | $ | 379 | (a) | $ | 473 | (d) | $ | 527 | (a) | $ | 1,896 | (a) | $ | 1,801 | (d) | ||||||
Printing Papers | 148 | (b) | (47 | ) | (e) | 177 | (b) | (16 | ) | (b) | 271 | (e) | |||||||||
Consumer Packaging | 51 | (c) | 30 | (f) | 77 | (c) | 178 | (c) | 161 | (f) | |||||||||||
Operating Profit | 578 | 456 | 781 | 2,058 | 2,233 | ||||||||||||||||
Interest expense, net | (142 | ) | (134 | ) | (152 | ) | (g) | (601 | ) | (g) | (612 | ) | (h) | ||||||||
Noncontrolling interest/equity earnings adjustment (i) | (2 | ) | 0 | (2 | ) | (2 | ) | 1 | |||||||||||||
Corporate items, net | (35 | ) | (4 | ) | (3 | ) | (51 | ) | (61 | ) | |||||||||||
Restructuring and other charges | (1 | ) | (1 | ) | (18 | ) | (282 | ) | (10 | ) | |||||||||||
Gain (loss) on sales/ impairment of businesses | (38 | ) | — | — | (38 | ) | — | ||||||||||||||
Non-operating pension expense | (53 | ) | (78 | ) | (54 | ) | (212 | ) | (323 | ) | |||||||||||
Earnings (Loss) From Continuing Operations Before Income Taxes and Equity Earnings | $ | 307 | $ | 239 | $ | 552 | $ | 872 | $ | 1,228 | |||||||||||
Equity Earnings (Loss) in Ilim Holdings S.A., Net of Taxes | $ | (136 | ) | $ | (12 | ) | $ | (70 | ) | $ | (194 | ) | $ | (46 | ) |
(a) | Includes a charge of $100 million for the three months and twelve months ended December 31, 2014 for a goodwill impairment related to our Asia Industrial Packaging operations, charges of $1 million and $1 million for the three months ended December 31, 2014 and September 30, 2014, respectively, and a charge of $16 million for the twelve months ended December 31, 2014 for integration costs associated with the acquisition of Temple-Inland, charges of $4 million for the three months ended December 31, 2014 and a net gain of $1 million for the twelve months ended December 31, 2014 associated with our Brazil Packaging business, a charge of $35 million for the three months and twelve months ended September 30, 2014 and December 31, 2014, respectively, for costs associated with a multi-employer pension plan withdrawal liability, charges of $5 million for the three months and twelve months ended September 30, 2014 and December 31, 2014, respectively, for costs related to the restructuring of our EMEA packaging business, charges of $3 million and $2 million for the three months ended December 31, 2014 and September 30, 2014, respectively, and a charge of $7 million for the twelve months ended December 31, 2014 related to the restructuring of our Asia box operations, and a gain of $3 million and $1 million for the three months ended December 31, 2014 and September 30, 2014, respectively, and a net gain of $4 million for the twelve months ended December 31, 2014 for other items. |
(b) | Includes charges of $7 million and $3 million for the three months ended December 31, 2014 and September 30, 2014, respectively, and a charge of $554 million for the twelve months ended December 31, 2014 for costs associated with the shutdown of our Courtland Mill, a gain of $20 million (including $2 million of interest income) for the three months and twelve months ended September 30, 2014 and December 31, 2014, respectively, for the resolution of a legal contingency for India, and charges of $32 million (including $8 million of interest expense) for the three months and twelve months ended September 30, 2014 and December 31, 2014, respectively for costs associated with a foreign tax amnesty program. |
(c) | Includes charges of $4 million and $2 million for the three months ended December 31, 2014 and September 30, 2014, respectively, and a charge of $8 million for the twelve months ended December 31, 2014 for costs associated with the Coated Paperboard sheet plant closures. |
(d) | Includes charges of $12 million for the three months ended December 31, 2013, and a charge of $62 million for the twelve months ended December 31, 2013 for integration costs associated with the acquisition of Temple-Inland, a gain of $14 million for the twelve months ended December 31, 2013 for a bargain purchase adjustment on the first quarter 2013 acquisition of a majority share of our operations in Turkey, a gain of $9 million for the twelve months ended December 31, 2013 related to the sale of the box plant facility in Bellevue, Washington, charges of $4 million for the three months and twelve months ended December 31, 2013 for costs associated with the restructuring of the Asia Box operations, and a net gain of $3 million for the three months ended December 31, 2013, and a net charge of $5 million for the twelve months ended December 31, 2013 for other items. |
(e) | Includes charges of $67 million for the three months ended December 31, 2013, and a charge of $118 million for the twelve months ended December 31, 2013 for costs associated with the shutdown of our Courtland mill, and charges of $127 million, partially offset by $4 million of noncontrolling interest income, for the three months and twelve months ended December 31, 2013 for the impairment of goodwill and a trade name intangible asset of the Company's India Papers business. |
(f) | Includes charges of $45 million for the twelve months ended December 30, 2013 for costs associated with the permanent shutdown of a paper machine at our Augusta mill, and charges of $2 million for the three months and twelve months ended December 31, 2013 for costs associated with the divestiture of the Shorewood business. |
(g) | Excludes net interest expense of $6 million that is included in the Printing Papers segment operating profit for the three months ended September 30, 2014. |
(h) | Includes a gain of $6 million for interest related to the settlement of an IRS tax audit for the twelve months ended December 30, 2013. |
(i) | 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 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, 2014 | ||||||||||||||||
Industrial Packaging | Printing Papers | Consumer Packaging | Total | |||||||||||||
Operating Profit Before Special Items | $ | 484 | $ | 155 | $ | 55 | $ | 694 | ||||||||
Special Items (a) | (105 | ) | (7 | ) | (4 | ) | (116 | ) | ||||||||
Operating Profit as Reported | $ | 379 | $ | 148 | $ | 51 | $ | 578 | ||||||||
Three Months Ended December 31, 2013 | ||||||||||||||||
Industrial Packaging | Printing Papers | Consumer Packaging | Total | |||||||||||||
Operating Profit Before Special Items | $ | 486 | $ | 143 | $ | 32 | $ | 661 | ||||||||
Special Items (a) | (13 | ) | (190 | ) | (2 | ) | (205 | ) | ||||||||
Operating Profit as Reported | $ | 473 | $ | (47 | ) | $ | 30 | $ | 456 | |||||||
Three Months Ended September 30, 2014 | ||||||||||||||||
Industrial Packaging | Printing Papers | Consumer Packaging | Total | |||||||||||||
Operating Profit Before Special Items | $ | 569 | $ | 192 | $ | 79 | $ | 840 | ||||||||
Special Items (a) | (42 | ) | (15 | ) | (2 | ) | (59 | ) | ||||||||
Operating Profit as Reported | $ | 527 | $ | 177 | $ | 77 | $ | 781 | ||||||||
Twelve Months Ended December 31, 2014 | ||||||||||||||||
Industrial Packaging | Printing Papers | Consumer Packaging | Total | |||||||||||||
Operating Profit Before Special Items | $ | 2,054 | $ | 550 | $ | 186 | $ | 2,790 | ||||||||
Special Items (a) | (158 | ) | (566 | ) | (8 | ) | (732 | ) | ||||||||
Operating Profit as Reported | $ | 1,896 | $ | (16 | ) | $ | 178 | $ | 2,058 | |||||||
Twelve Months Ended December 31, 2013 | ||||||||||||||||
Industrial Packaging | Printing Papers | Consumer Packaging | Total | |||||||||||||
Operating Profit Before Special Items | $ | 1,849 | $ | 512 | $ | 208 | $ | 2,569 | ||||||||
Special Items (a) | (48 | ) | (241 | ) | (47 | ) | (336 | ) | ||||||||
Operating Profit as Reported | $ | 1,801 | $ | 271 | $ | 161 | $ | 2,233 | ||||||||
(a) | See footnotes (1) - (3) on Sales and Earnings by Industry Segment |
(b) | See footnotes (4) - (6) on Sales and Earnings by Industry Segment |
(1) | The Company calculates Operating Profit Before Special Items by excluding the pre-tax effect of items considered by management to be unusual from the earnings reported under U.S. generally accepted accounting principles (“GAAP”). 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. International Paper believes that using this information, along with net earnings, provides for a more complete analysis of the results of operations by quarter. Net earnings is the most directly comparable GAAP measure. |
Three Months Ended December 31, | Three Months Ended September 30, | Twelve Months Ended December 31, | |||||||||||||
2014 | 2013 | 2014 | 2014 | 2013 | |||||||||||
Industrial Packaging (In thousands of short tons) | |||||||||||||||
Corrugated Packaging | 2,588 | 2,556 | 2,618 | 10,355 | 10,393 | ||||||||||
Containerboard | 771 | 753 | 755 | 3,035 | 3,273 | ||||||||||
Recycling | 609 | 615 | 537 | 2,459 | 2,379 | ||||||||||
Saturated Kraft | 43 | 38 | 49 | 186 | 176 | ||||||||||
Gypsum /Release Kraft | 39 | 44 | 49 | 168 | 157 | ||||||||||
Bleached Kraft | 5 | 22 | 7 | 26 | 132 | ||||||||||
EMEA Industrial Packaging | 356 | 346 | 331 | 1,379 | 1,342 | ||||||||||
Asian Box | 113 | 104 | 102 | 408 | 416 | ||||||||||
Brazilian Packaging (b) | 80 | 89 | 76 | 318 | 297 | ||||||||||
Industrial Packaging | 4,604 | 4,567 | 4,524 | 18,334 | 18,565 | ||||||||||
Printing Papers (In thousands of short tons) | |||||||||||||||
U.S. Uncoated Papers | 489 | 604 | 506 | 1,968 | 2,508 | ||||||||||
European & Russian Uncoated Papers | 409 | 386 | 362 | 1,531 | 1,413 | ||||||||||
Brazilian Uncoated Papers | 320 | 319 | 278 | 1,141 | 1,150 | ||||||||||
Indian Uncoated Papers | 58 | 62 | 58 | 231 | 232 | ||||||||||
Uncoated Papers | 1,276 | 1,371 | 1,204 | 4,871 | 5,303 | ||||||||||
Market Pulp (c) | 464 | 439 | 471 | 1,776 | 1,711 | ||||||||||
Consumer Packaging (In thousands of short tons) | |||||||||||||||
North American Consumer Packaging | 357 | 368 | 396 | 1,486 | 1,556 | ||||||||||
European Coated Paperboard | 101 | 87 | 91 | 354 | 355 | ||||||||||
Asian Coated Paperboard | 351 | 367 | 332 | 1,358 | 1,430 | ||||||||||
Consumer Packaging | 809 | 822 | 819 | 3,198 | 3,341 |
(a) | Sales volumes include third party and inter-segment sales and exclude sales of equity investees. |
(b) | Includes volumes for Brazil Packaging from date of acquisition in mid-January 2013. |
(c) | Includes North American, European and Brazilian volumes and internal sales to mills. |
December 31, 2014 | December 31, 2013 | |||||||
Assets | ||||||||
Current Assets | ||||||||
Cash and Temporary Investments | $ | 1,881 | $ | 1,802 | ||||
Accounts and Notes Receivable, Net | 3,083 | 3,756 | ||||||
Inventories | 2,424 | 2,825 | ||||||
Deferred Income Tax Assets | 331 | 302 | ||||||
Other | 240 | 340 | ||||||
Total Current Assets | 7,959 | 9,025 | ||||||
Plants, Properties and Equipment, Net | 12,728 | 13,672 | ||||||
Forestlands | 507 | 557 | ||||||
Investments | 248 | 733 | ||||||
Financial Assets of Special Purpose Entities | 2,145 | 2,127 | ||||||
Goodwill | 3,773 | 3,987 | ||||||
Deferred Charges and Other Assets | 1,324 | 1,427 | ||||||
Total Assets | $ | 28,684 | $ | 31,528 | ||||
Liabilities and Equity | ||||||||
Current Liabilities | ||||||||
Notes Payable and Current Maturities of Long-Term Debt | $ | 742 | $ | 661 | ||||
Accounts Payable and Accrued Liabilities | 4,167 | 4,466 | ||||||
Total Current Liabilities | 4,909 | 5,127 | ||||||
Long-Term Debt | 8,631 | 8,827 | ||||||
Nonrecourse Financial Liabilities of Special Purpose Entities | 2,050 | 2,043 | ||||||
Deferred Income Taxes | 3,063 | 3,765 | ||||||
Pension Benefit Obligation | 3,819 | 2,205 | ||||||
Postretirement and Postemployment Benefit Obligation | 396 | 412 | ||||||
Other Liabilities | 553 | 702 | ||||||
Redeemable Noncontrolling Interest | — | 163 | ||||||
Equity | ||||||||
Invested Capital | 706 | 3,659 | ||||||
Retained Earnings | 4,409 | 4,446 | ||||||
Total Shareholders’ Equity | 5,115 | 8,105 | ||||||
Noncontrolling interests | 148 | 179 | ||||||
Total Equity | 5,263 | 8,284 | ||||||
Total Liabilities and Equity | $ | 28,684 | $ | 31,528 |
Twelve Months Ended December 31, | ||||||||
2014 | 2013 | |||||||
Operating Activities | ||||||||
Net earnings (loss) | $ | 536 | $ | 1,378 | ||||
Depreciation, amortization and cost of timber harvested | 1,414 | 1,547 | ||||||
Deferred income tax expense (benefit), net | (135 | ) | 146 | |||||
Restructuring and other charges | 881 | 210 | ||||||
Pension plan contributions | (353 | ) | (31 | ) | ||||
Net (gains) losses on sales and impairments of businesses | 38 | 3 | ||||||
Net bargain purchase gain on acquisition of business | — | (13 | ) | |||||
Release of tax reserves | — | (775 | ) | |||||
Impairment of goodwill and other intangible assets | 100 | 527 | ||||||
Equity (earnings) loss, net | 200 | 39 | ||||||
Periodic pension expense, net | 387 | 545 | ||||||
Other, net | 167 | (62 | ) | |||||
Changes in current assets and liabilities | ||||||||
Accounts and notes receivable | (97 | ) | (134 | ) | ||||
Inventories | (103 | ) | (114 | ) | ||||
Accounts payable and accrued liabilities | (18 | ) | (110 | ) | ||||
Interest payable | (18 | ) | (57 | ) | ||||
Other | 78 | (71 | ) | |||||
Cash Provided By (Used For) Operations | 3,077 | 3,028 | ||||||
Investment Activities | ||||||||
Invested in capital projects | (1,366 | ) | (1,198 | ) | ||||
Acquisitions, net of cash acquired | — | (505 | ) | |||||
Proceeds from divestitures | — | 726 | ||||||
Proceeds from spinoff | 411 | — | ||||||
Proceeds from sale of fixed assets | 61 | 65 | ||||||
Other | 34 | 85 | ||||||
Cash Provided By (Used For) Investment Activities | (860 | ) | (827 | ) | ||||
Financing Activities | ||||||||
Repurchases of common stock and payments of restricted stock tax withholding | (1,062 | ) | (512 | ) | ||||
Issuance of common stock | 66 | 298 | ||||||
Issuance of debt | 1,982 | 241 | ||||||
Reduction of debt | (2,095 | ) | (845 | ) | ||||
Change in book overdrafts | 30 | (123 | ) | |||||
Dividends paid | (620 | ) | (554 | ) | ||||
Acquisition of redeemable noncontrolling interest | (114 | ) | — | |||||
Debt tender premiums paid | (269 | ) | — | |||||
Redemption of securities | — | (150 | ) | |||||
Other | (4 | ) | (43 | ) | ||||
Cash Provided By (Used for) Financing Activities | (2,086 | ) | (1,688 | ) | ||||
Effect of Exchange Rate Changes on Cash | (52 | ) | (13 | ) | ||||
Change in Cash and Temporary Investments | 79 | 500 | ||||||
Cash and Temporary Investments | ||||||||
Beginning of the period | 1,802 | 1,302 | ||||||
End of the period | $ | 1,881 | $ | 1,802 |
Twelve Months Ended December 31, 2014 | ||||
Cash provided by operations | $ | 3,077 | ||
Adjustments: | ||||
Cash invested in capital projects | (1,366 | ) | ||
Cash contribution to pension plan | 353 | |||
Free Cash Flow | $ | 2,064 |
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