ý | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the fiscal year ended December 31, 2014 |
¨ | 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 | 2014 | 2013 | 2012 | |||
Industrial Packaging | ||||||
North American Corrugated Packaging (2) | 10,355 | 10,393 | 10,523 | |||
North American Containerboard (2) | 3,035 | 3,273 | 3,228 | |||
North American Recycling | 2,459 | 2,379 | 2,349 | |||
North American Saturated Kraft | 186 | 176 | 166 | |||
North American Gypsum/Release Kraft (2) | 168 | 157 | 135 | |||
North American Bleached Kraft | 26 | 132 | 114 | |||
EMEA Industrial Packaging (3) | 1,379 | 1,342 | 1,032 | |||
Asian Box | 408 | 416 | 410 | |||
Brazilian Packaging (4) | 318 | 297 | — | |||
Industrial Packaging | 18,334 | 18,565 | 17,957 | |||
Printing Papers | ||||||
U.S. Uncoated Papers | 1,968 | 2,508 | 2,617 | |||
European and Russian Uncoated Papers | 1,531 | 1,413 | 1,286 | |||
Brazilian Uncoated Papers | 1,141 | 1,150 | 1,165 | |||
Indian Uncoated Papers | 231 | 232 | 246 | |||
Uncoated Papers | 4,871 | 5,303 | 5,314 | |||
Market Pulp (5) | 1,776 | 1,711 | 1,593 | |||
Consumer Packaging | ||||||
North American Consumer Packaging | 1,486 | 1,556 | 1,507 | |||
European and Russian Coated Paperboard | 354 | 355 | 372 | |||
Asian Coated Paperboard | 1,358 | 1,430 | 1,059 | |||
Consumer Packaging | 3,198 | 3,341 | 2,938 |
(1) | Includes third-party and inter-segment sales and excludes sales of equity investees. |
(2) | Includes Temple-Inland volumes from date of acquisition in February 2012. |
(3) | Includes Turkish box plants beginning in Q1 2013 when a majority ownership was acquired. |
(4) | Includes Brazil Packaging from date of acquisition in mid- January 2013. |
(5) | Includes 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, 2014 - October 31, 2014 | 2,825,448 | $46.80 | 2,825,448 | $1.59 | |||||
November 1, 2014 - November 30, 2014 | 177,532 | 52.68 | 177,300 | 1.58 | |||||
December 1, 2014 - December 31, 2014 | 545,681 | 53.84 | 533,340 | 1.56 | |||||
Total | 3,548,661 |
(a) | 12,573 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 September 10, 2013, and through which we were authorized to purchase, in open market transactions (including block trades), privately negotiated transactions or otherwise, up to $1.5 billion of our common stock by December 31, 2016. Another repurchase program was approved by our Board of Directors and announced on July 8, 2014, to supplement the former program. Through the latter 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 additional shares of our common stock. As of February 20, 2015, approximately $1.54 billion 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 | 2014 | 2013 | 2012 | 2011 | 2010 | |||||||||||||||
RESULTS OF OPERATIONS | ||||||||||||||||||||
Net sales | $ | 23,617 | $ | 23,483 | $ | 21,852 | $ | 19,464 | $ | 18,496 | ||||||||||
Costs and expenses, excluding interest | 22,138 | 21,643 | 20,214 | 17,528 | 17,169 | |||||||||||||||
Earnings (loss) from continuing operations before income taxes and equity earnings | 872 | (b) | 1,228 | (e) | 967 | (h) | 1,395 | (k) | 719 | (n) | ||||||||||
Equity earnings (loss), net of taxes | (200 | ) | (39 | ) | 61 | 140 | 111 | |||||||||||||
Discontinued operations, net of taxes | (13 | ) | (c) | (309 | ) | (f) | 77 | (i) | 82 | (l) | 65 | (o) | ||||||||
Net earnings (loss) | 536 | (b-d) | 1,378 | (e-g) | 799 | (h-j) | 1,336 | (k-m) | 712 | (n-p) | ||||||||||
Noncontrolling interests, net of taxes | (19 | ) | (17 | ) | 5 | 14 | 21 | |||||||||||||
Net earnings (loss) attributable to International Paper Company | 555 | (b-d) | 1,395 | (e-g) | 794 | (h-j) | 1,322 | (k-m) | 691 | (n-p) | ||||||||||
FINANCIAL POSITION | ||||||||||||||||||||
Current assets less current liabilities | $ | 3,050 | $ | 3,898 | $ | 3,907 | $ | 5,718 | $ | 3,525 | ||||||||||
Plants, properties and equipment, net | 12,728 | 13,672 | 13,949 | 11,817 | 12,002 | |||||||||||||||
Forestlands | 507 | 557 | 622 | 660 | 747 | |||||||||||||||
Total assets | 28,684 | 31,528 | 32,153 | 27,018 | 25,409 | |||||||||||||||
Notes payable and current maturities of long-term debt | 742 | 661 | 444 | 719 | 313 | |||||||||||||||
Long-term debt | 8,631 | 8,827 | 9,696 | 9,189 | 8,358 | |||||||||||||||
Total shareholders’ equity | 5,115 | 8,105 | 6,304 | 6,645 | 6,875 | |||||||||||||||
BASIC EARNINGS PER SHARE ATTRIBUTABLE TO INTERNATIONAL PAPER COMPANY COMMON SHAREHOLDERS | ||||||||||||||||||||
Earnings (loss) from continuing operations | $ | 1.33 | $ | 3.85 | $ | 1.65 | $ | 2.87 | $ | 1.46 | ||||||||||
Discontinued operations | (0.03 | ) | (0.70 | ) | 0.17 | 0.19 | 0.15 | |||||||||||||
Net earnings (loss) | 1.30 | 3.15 | 1.82 | 3.06 | 1.61 | |||||||||||||||
DILUTED EARNINGS PER SHARE ATTRIBUTABLE TO INTERNATIONAL PAPER COMPANY COMMON SHAREHOLDERS | ||||||||||||||||||||
Earnings (loss) from continuing operations | $ | 1.31 | $ | 3.80 | $ | 1.63 | $ | 2.84 | $ | 1.44 | ||||||||||
Discontinued operations | (0.02 | ) | (0.69 | ) | 0.17 | 0.19 | 0.15 | |||||||||||||
Net earnings (loss) | 1.29 | 3.11 | 1.80 | 3.03 | 1.59 | |||||||||||||||
Cash dividends | 1.4500 | 1.2500 | 1.088 | 0.975 | 0.400 | |||||||||||||||
Total shareholders’ equity | 12.18 | 18.57 | 14.33 | 15.21 | 15.71 | |||||||||||||||
COMMON STOCK PRICES | ||||||||||||||||||||
High | $ | 55.73 | $ | 50.33 | $ | 39.88 | $ | 33.01 | $ | 29.25 | ||||||||||
Low | 44.24 | 39.47 | 27.29 | 21.55 | 19.33 | |||||||||||||||
Year-end | 53.58 | 49.03 | 39.84 | 29.60 | 27.24 | |||||||||||||||
FINANCIAL RATIOS | ||||||||||||||||||||
Current ratio | 1.6 | 1.8 | 1.8 | 2.2 | 1.8 | |||||||||||||||
Total debt to capital ratio | 0.65 | 0.54 | 0.62 | 0.60 | 0.56 | |||||||||||||||
Return on shareholders’ equity | 7.7 | % | (b-d) | 20.2 | % | (e-g) | 11.6 | % | (h-j) | 17.9 | % | (k-m) | 11.4 | % | (n-p) | |||||
CAPITAL EXPENDITURES | $ | 1,366 | $ | 1,198 | $ | 1,383 | $1,159 | $775 | ||||||||||||
NUMBER OF EMPLOYEES | 58,000 | 64,000 | 65,000 | 56,000 | 53,000 |
(a) | All periods presented have been restated to reflect the xpedx business and the Temple-Inland Building Products business as discontinued operations, if applicable. |
(b) | Includes restructuring and other charges of $846 million before taxes ($518 million after taxes) including pre-tax charges of $276 million ($169 million after taxes) for early debt extinguishment costs, pre-tax charges of $554 million ($338 million after taxes for costs associated with the shutdown of our Courtland, Alabama mill and a net pre-tax charge of $16 million ($11 million after taxes) for other items. Also included are 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 subsequent partial impairment of our ASG investment, a goodwill impairment charge of $100 million (before and after taxes) related to our Asia Industrial Packaging business, pre-tax charges of $35 million ($21 million after taxes) for a multi-employer pension withdrawal liability, a pre-tax charge of $32 million ($17 million after taxes) for costs associated with a foreign tax amnesty program, a gain of $20 million (before and after taxes) for the resolution of a legal contingency in India, pre-tax charges of $16 million ($10 million after taxes) for costs associated with the integration of Temple-Inland, and a net gain of $4 million ($2 million after taxes) for other items. |
(c) | 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) for costs associated with the Building Products divestiture. |
(d) | Includes a tax benefit of $90 million related to internal restructurings and a net tax expense of $9 million for other items. |
(e) | Includes restructuring and other charges of $156 million before taxes ($98 million after taxes) including pre-tax charges of $25 million ($16 million after taxes) for early debt extinguishment costs, pre-tax charges of $118 million ($72 million after taxes) for costs associated with the shutdown of our Courtland, Alabama mill, a pre-tax gain of $30 million ($19 million after taxes) for insurance reimbursements related to the 2012 Guaranty Bank legal settlement, a pre-tax charge of $45 million ($28 million after taxes) for costs associated with the permanent shutdown of a paper machine at our Augusta, Georgia mill and a net pre-tax gain of $2 million (a loss of $1 million after taxes) for other items. Also included are a pre-tax goodwill and trade name intangible asset impairment of $127 million ($122 million after taxes) related to our India Papers business, pre-tax charges of $9 million ($5 million after taxes) to adjust the value of two Company airplanes to fair value, pre-tax charges of $62 million ($38 million after taxes) for integration costs associated with the acquisition of Temple-Inland, pre-tax charges of $6 million ($4 million after taxes) for an environmental reserve related to the Company's property in Cass Lake, Minnesota, and a gain of $13 million (before and after taxes) related to a bargain purchase adjustment on the acquisition of a majority share of our operations in Turkey. |
(f) | Includes the operating results of the xpedx business for the full year and the Temple-Inland Building Products business through the date of sale in July 2013. Also includes pre-tax charges of $32 million ($19 million after taxes) for costs associated with the restructuring of the Company's xpedx operations, pre-tax charges of $22 million ($14 million after taxes) for costs associated with the spin-off of our xpedx operations, a pre-tax goodwill impairment charge of $400 million ($366 million after taxes) related to our xpedx business and pre-tax charges of $23 million ($19 million after taxes) for expenses associated with the divestiture of the Temple-Inland Building Products business. |
(g) | 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. |
(h) | Includes restructuring and other charges of $65 million before taxes ($46 million after taxes) including pre-tax charges of $48 million ($30 million after taxes) for early debt extinguishment costs, pre-tax charges of $17 million ($12 million after taxes) for costs associated with the restructuring of the Company's Packaging business in EMEA. Also included are a pre-tax charge of $20 million ($12 million after taxes) related to the write-up of the Temple-Inland inventories to fair value, pre-tax charges of $164 million ($108 million after taxes) for integration costs associated with the acquisition of Temple-Inland, a pre-tax charge of $62 million ($38 million after taxes) to adjust the long-lived assets of the Hueneme mill in Oxnard, California to their fair value in anticipation of its divestiture, and pre-tax charges of $29 million ($55 million after taxes) for costs associated with the divestiture of three containerboard mills. |
(i) | Includes the operating earnings of the xpedx business and the Temple-Inland Building Products business, pre-tax charges of $44 million ($28 million after taxes) for costs associated with the restructuring of the Company's xpedx operations and pre-tax charges of $15 million ($9 million after taxes) for expenses associated with pursuing the divestiture of the Temple-Inland Building Products business. |
(j) | Includes a net tax expense of $14 million related to internal restructurings and a $5 million expense to adjust deferred tax assets related to post-retirement prescription drug coverage (Medicare Part D reimbursement). |
(k) | Includes restructuring and other charges of $53 million before taxes ($32 million after taxes) including pre-tax charges of $32 million ($19 million after taxes) for early debt extinguishment costs, pre-tax charges of $18 million ($12 million after taxes) for costs associated with the acquisition of a majority share of Andhra Pradesh Paper Mills Limited in India, pre-tax charges of $20 million ($12 million after taxes) for costs associated with signing an agreement to acquire Temple-Inland, and a pre-tax gain of $24 million ($15 million after taxes) related to the reversal of environmental and other reserves due to the announced repurposing of a portion of the Franklin mill. Also included are a pre-tax charge of $27 million ($17 million after taxes) for an environmental reserve related to the Company’s property in Cass Lake, Minnesota, a pre-tax charge of $129 million ($104 million after |
(l) | Includes a pre-tax gain of $50 million ($30 million after taxes) for an earnout provision related to the sale of the Company’s Kraft Papers business completed in January 2007. Also, the Company sold its Brazilian Coated Paper business in the third quarter 2006. Local country tax contingency reserves were included in the business’ operating results in 2005 and 2006 for which the related statute of limitations has expired. The reserves were reversed and a tax benefit of $15 million plus associated interest income of $6 million ($4 million after taxes) was recorded. Also included are the operating results of our xpedx business and pre-tax charges of $49 million ($34 million after taxes) for costs associated with the restructuring of the Company's xpedx business. |
(m) | Includes a tax benefit of $222 million related to the reduction of the carrying value of the Shorewood business and the write-off of a deferred tax liability associated with Shorewood, a $24 million tax expense related to internal restructurings, a $9 million tax expense for costs associated with our acquisition of a majority share of Andhra Pradesh Paper Mills Limited in India, a $13 million tax benefit related to the release of a deferred tax asset valuation allowance, and a $2 million tax expense for other items. |
(n) | Includes restructuring and other charges of $390 million before taxes ($239 million after taxes) including pre-tax charges of $315 million ($192 million after taxes) for shutdown costs related to the Franklin, Virginia mill, a pre-tax charge of $35 million ($21 million after taxes) for early debt extinguishment costs, pre-tax charges of $7 million ($4 million after taxes) for closure costs related to the Bellevue, Washington container plant, a pre-tax charge of $11 million ($7 million after taxes) for an Ohio Commercial Activity tax adjustment, a pre-tax charge of $2 million ($1 million after taxes) for severance and benefit costs associated with the Company’s S&A reduction initiative, and a pre-tax charge of $8 million ($5 million after taxes) for costs associated with the reorganization of the Company’s Shorewood operations. Also included are a pre-tax charge of $18 million ($11 million after |
(o) | Includes the operating results of the Company's xpedx business. |
(p) | Includes tax expense of $14 million and $32 million for tax adjustments related to incentive compensation and Medicare Part D deferred tax write-offs, respectively, and a $40 million tax benefit related to cellulosic bio-fuel tax credits. |
2014 | 2013 | 2012 | |||||||
Operating Earnings (Loss) Per Share Attributable to Shareholders | $ | 3.00 | $ | 3.06 | $ | 2.51 | |||
Non-operating pension expense | (0.30 | ) | (0.44 | ) | (0.26 | ) | |||
Special items | (1.39 | ) | 1.18 | (0.62 | ) | ||||
Diluted Earnings (Loss) Per Share from Continuing Operations | 1.31 | 3.80 | 1.63 | ||||||
Discontinued operations | (0.02 | ) | (0.69 | ) | 0.17 | ||||
Diluted Earnings (Loss) Per Share Attributable to Shareholders | $ | 1.29 | $ | 3.11 | $ | 1.80 |
Three Months Ended December 31, 2014 | Three Months Ended September 30, 2014 | Three Months Ended December 31, 2013 | ||||||||||
Operating Earnings (Loss) Per Share Attributable to Shareholders | $ | 0.53 | $ | 0.95 | $ | 0.81 | ||||||
Non-operating pension expense | (0.07 | ) | (0.08 | ) | (0.11 | ) | ||||||
Special items | (0.12 | ) | (0.08 | ) | 1.08 | |||||||
Diluted Earnings (Loss) Per Share from Continuing Operations | 0.34 | 0.79 | 1.78 | |||||||||
Discontinued operations | (0.02 | ) | 0.04 | (0.80 | ) | |||||||
Diluted Earnings (Loss) Per Share Attributable to Shareholders | $ | 0.32 | $ | 0.83 | $ | 0.98 |
In millions | 2014 | 2013 | 2012 | ||||||
Net Earnings (Loss) Attributable to International Paper Company | $ | 555 | $ | 1,395 | $ | 794 | |||
Deduct – Discontinued operations: | |||||||||
(Earnings) from operations | (11 | ) | (109 | ) | (120 | ) | |||
Special items (gain) loss | 24 | 418 | 43 | ||||||
Earnings (Loss) From Continuing Operations Attributable to International Paper Company | 568 | 1,704 | 717 | ||||||
Add back (deduct): | |||||||||
Income tax provision | 123 | (498 | ) | 306 | |||||
Equity (earnings) loss, net of taxes | 200 | 39 | (61 | ) | |||||
Net earnings (loss) attributable to noncontrolling interests | (19 | ) | (17 | ) | 5 | ||||
Earnings (Loss) From Continuing Operations Before Income Taxes and Equity Earnings | 872 | 1,228 | 967 | ||||||
Interest expense, net | 601 | 612 | 671 | ||||||
Noncontrolling interests / equity earnings included in operations | 2 | (1 | ) | — | |||||
Corporate items | 51 | 61 | 87 | ||||||
Special items: | |||||||||
Restructuring and other charges | 282 | 10 | 51 | ||||||
Net losses (gains) on sales and impairments of businesses | 38 | — | (2 | ) | |||||
Non-Operating Pension Expense | 212 | 323 | 159 | ||||||
$ | 2,058 | $ | 2,233 | $ | 1,933 | ||||
Industry Segment Operating Profit | |||||||||
Industrial Packaging | $ | 1,896 | $ | 1,801 | $ | 1,066 | |||
Printing Papers | (16 | ) | 271 | 599 | |||||
Consumer Packaging | 178 | 161 | 268 | ||||||
Total Industry Segment Operating Profit | $ | 2,058 | $ | 2,233 | $ | 1,933 |
• | Industrial Packaging’s profits of $1.9 billion were $95 million higher than in 2013 as the net benefit of higher average sales price realizations and mix were partially offset by lower sales volumes, higher operating costs, higher maintenance outage costs and higher input costs. In addition, 2014 operating profits 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. Operating profits in 2013 included $62 million of costs associated with the integration of Temple-Inland and a $13 million gain for a bargain purchase adjustment on the acquisition of a majority share of our operations in Turkey. |
• | Printing Papers’ operating loss of $16 million represented a $287 million reduction in operating profits from 2013. The benefits of higher average sales price realizations and a more favorable mix, lower maintenance outage costs, the absence of a provision for bad debt related to a large envelope customer that was booked in 2013, and lower foreign exchange and other costs were more than offset by lower sales volumes, higher operating costs, higher input costs and higher costs associated with the closure of our Courtland, Alabama mill. The 2014 operating loss also 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. Operating profits in 2013 included $118 million of costs associated with the shutdown of our Courtland, Alabama mill and net charges of $123 million for the |
• | Consumer Packaging’s profits of $178 million were $17 million higher than in 2013. The benefits from higher average sales price realizations and a favorable mix were more than offset by lower sales volumes, higher operating costs, higher planned maintenance downtime costs, higher input costs and higher other expenses. Operating profits in 2014 included $8 million of sheet plant closure costs. Operating profits in 2013 included costs of $45 million associated with the permanent shutdown of a paper machine at our Augusta, Georgia mill. |
• | 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 69 and 70 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 69 and 70 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. |
• | a $48 million charge before taxes ($30 million after taxes) for costs related to the early extinguishment of debt (see Note 13 Debt and Lines of Credit on pages 69 and 70 of Item 8. Financial Statements and Supplementary Data), and |
• | a $3 million charge before taxes ($5 million after taxes) for other items. |
• | a $17 million charge before taxes ($12 million after taxes) related to the restructuring of our Packaging business in EMEA, and |
• | a $3 million gain before taxes ($1 million after taxes) for other items. |
Industrial Packaging | |||||||||
In millions | 2014 | 2013 | 2012 | ||||||
Sales | $ | 14,944 | $ | 14,810 | $ | 13,280 | |||
Operating Profit | 1,896 | 1,801 | 1,066 |
Printing Papers | |||||||||
In millions | 2014 | 2013 | 2012 | ||||||
Sales | $ | 5,720 | $ | 6,205 | $ | 6,230 | |||
Operating Profit (Loss) | (16 | ) | 271 | 599 |
Consumer Packaging | |||||||||
In millions | 2014 | 2013 | 2012 | ||||||
Sales | $ | 3,403 | $ | 3,435 | $ | 3,170 | |||
Operating Profit | 178 | 161 | 268 |
In millions | 2014 | 2013 | 2012 | ||||||
Cash provided by operations | $ | 3,077 | $ | 3,028 | $ | 2,967 | |||
(Less)/Add: | |||||||||
Cash invested in capital projects | (1,366 | ) | (1,198 | ) | (1,383 | ) | |||
Cash contribution to pension plan | 353 | 31 | 44 | ||||||
Cash received from unwinding a timber monetization | — | — | (251 | ) | |||||
Change in control payments related to Temple-Inland acquisition | — | — | 120 | ||||||
Insurance reimbursement for Guaranty Bank settlement | — | (30 | ) | 80 | |||||
Free Cash Flow | $ | 2,064 | $ | 1,831 | $ | 1,577 |
In millions | Three Months Ended December 31, 2014 | Three Months Ended September 30, 2014 | Three Months Ended December 31, 2013 | ||||||
Cash provided by operations | $ | 1,144 | $ | 933 | $ | 1,037 | |||
(Less)/Add: | |||||||||
Cash invested in capital projects | (405 | ) | (327 | ) | (439 | ) | |||
Cash contribution to pension plan | — | 90 | — | ||||||
Free Cash Flow | $ | 739 | $ | 696 | $ | 598 |
In millions | 2014 | 2013 | 2012 | ||||||
Industrial Packaging | $ | 754 | $ | 629 | $ | 565 | |||
Printing Papers | 318 | 294 | 449 | ||||||
Consumer Packaging | 233 | 208 | 296 | ||||||
Distribution | — | 9 | 10 | ||||||
Subtotal | 1,305 | 1,140 | 1,320 | ||||||
Corporate and other | 61 | 58 | 63 | ||||||
Total | $ | 1,366 | $ | 1,198 | $ | 1,383 |
In millions | 2014 | 2013 | 2012 | ||||||
Debt reductions (a) | $ | 1,625 | $ | 574 | $ | 1,272 | |||
Pre-tax early debt extinguishment costs (b) | 276 | 25 | 48 |
(a) | Reductions related to notes with interest rates ranging from 1.63% to 9.38% with original maturities from 2014 to 2041 for the years ended December 31, 2014, 2013 and 2012. |
(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) | $ | 742 | $ | 543 | $ | 71 | $ | 1,229 | $ | 605 | $ | 6,184 | ||||||
Debt obligations with right of offset (b) | — | 5,202 | — | — | — | — | ||||||||||||
Lease obligations | 142 | 106 | 84 | 63 | 45 | 91 | ||||||||||||
Purchase obligations (c) | 3,266 | 761 | 583 | 463 | 422 | 1,690 | ||||||||||||
Total (d) | $ | 4,150 | $ | 6,612 | $ | 738 | $ | 1,755 | $ | 1,072 | $ | 7,965 |
(a) | Total debt includes scheduled principal payments only. |
(b) | Represents debt obligations borrowed from non-consolidated variable interest entities for which International Paper has, and intends to effect, a legal right to offset these obligations with investments held in the entities. Accordingly, in its consolidated balance sheet at December 31, 2014, International Paper has offset approximately $5.2 billion of interests in the entities against this $5.3 billion of debt obligations held by the entities (see Note 12 Variable Interest Entities and Preferred Securities of Subsidiaries on pages 67 through 69 in Item 8. Financial Statements and Supplementary Data). |
(c) | Includes $2.3 billion relating to fiber supply agreements entered into at the time of the 2006 Transformation Plan forestland sales and in conjunction with the 2008 acquisition of Weyerhaeuser Company’s Containerboard, Packaging and Recycling business. |
(d) | Not included in the above table due to the uncertainty as to the amount and timing of the payment are unrecognized tax benefits of approximately $119 million. |
In millions | Benefit Obligation | Fair Value of Plan Assets | ||||
U.S. qualified pension | $ | 14,343 | $ | 10,918 | ||
U.S. nonqualified pension | 398 | — | ||||
U.S. postretirement | 306 | — | ||||
Non-U.S. pension | 233 | 180 | ||||
Non-U.S. postretirement | 59 | — |
2014 | 2013 | 2012 | ||||
Discount rate | 4.10 | % | 4.90 | % | 4.10 | % |
Rate of compensation increase | 3.75 | % | 3.75 | % | 3.75 | % |
2014 | 2013 | |||
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 | 2017 |
Year | Return | Year | Return | ||
2014 | 6.4 | % | 2009 | 23.8 | % |
2013 | 14.1 | % | 2008 | (23.6 | )% |
2012 | 14.1 | % | 2007 | 9.6 | % |
2011 | 2.5 | % | 2006 | 14.9 | % |
2010 | 15.1 | % | 2005 | 11.7 | % |
In millions | 2014 | 2013 | 2012 | 2011 | 2010 | ||||||||||
Pension expense | |||||||||||||||
U.S. plans (non-cash) | $ | 387 | $ | 545 | $ | 342 | $ | 195 | $ | 231 | |||||
Non-U.S. plans | — | 5 | 3 | 1 | — | ||||||||||
Postretirement expense | |||||||||||||||
U.S. plans | 7 | (1 | ) | (4 | ) | 7 | 6 | ||||||||
Non-U.S. plans | 7 | 7 | 1 | 2 | 1 | ||||||||||
Net expense | $ | 401 | $ | 556 | $ | 342 | $ | 205 | $ | 238 |
In millions | 2016 (1) | 2015 (1) | ||||
Pension expense | ||||||
U.S. plans (non-cash) | $ | 390 | $ | 488 | ||
Non-U.S. plans | 6 | 7 | ||||
Postretirement expense | ||||||
U.S. plans | 13 | 9 | ||||
Non-U.S. plans | 7 | 6 | ||||
Net expense | $ | 416 | $ | 510 |
(1) | Based on assumptions at December 31, 2014. |
In millions, except per share amounts, for the years ended December 31 | 2014 | 2013 | 2012 | ||||||
NET SALES | $ | 23,617 | $ | 23,483 | $ | 21,852 | |||
COSTS AND EXPENSES | |||||||||
Cost of products sold | 16,254 | 16,282 | 15,287 | ||||||
Selling and administrative expenses | 1,793 | 1,796 | 1,674 | ||||||
Depreciation, amortization and cost of timber harvested | 1,406 | 1,531 | 1,473 | ||||||
Distribution expenses | 1,521 | 1,583 | 1,470 | ||||||
Taxes other than payroll and income taxes | 180 | 178 | 159 | ||||||
Restructuring and other charges | 846 | 156 | 65 | ||||||
Impairment of goodwill and other intangibles | 100 | 127 | — | ||||||
Net (gains) losses on sales and impairments of businesses | 38 | 3 | 86 | ||||||
Net bargain purchase gain on acquisition of business | — | (13 | ) | — | |||||
Interest expense, net | 607 | 612 | 671 | ||||||
EARNINGS (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND EQUITY EARNINGS | 872 | 1,228 | 967 | ||||||
Income tax provision (benefit) | 123 | (498 | ) | 306 | |||||
Equity earnings (loss), net of taxes | (200 | ) | (39 | ) | 61 | ||||
EARNINGS (LOSS) FROM CONTINUING OPERATIONS | 549 | 1,687 | 722 | ||||||
Discontinued operations, net of taxes | (13 | ) | (309 | ) | 77 | ||||
NET EARNINGS (LOSS) | 536 | 1,378 | 799 | ||||||
Less: Net earnings (loss) attributable to noncontrolling interests | (19 | ) | (17 | ) | 5 | ||||
NET EARNINGS (LOSS) ATTRIBUTABLE TO INTERNATIONAL PAPER COMPANY | $ | 555 | $ | 1,395 | $ | 794 | |||
BASIC EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO INTERNATIONAL PAPER COMPANY COMMON SHAREHOLDERS | |||||||||
Earnings (loss) from continuing operations | $ | 1.33 | $ | 3.85 | $ | 1.65 | |||
Discontinued operations, net of taxes | (0.03 | ) | (0.70 | ) | 0.17 | ||||
Net earnings (loss) | $ | 1.30 | $ | 3.15 | $ | 1.82 | |||
DILUTED EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO INTERNATIONAL PAPER COMPANY COMMON SHAREHOLDERS | |||||||||
Earnings (loss) from continuing operations | $ | 1.31 | $ | 3.80 | $ | 1.63 | |||
Discontinued operations, net of taxes | (0.02 | ) | (0.69 | ) | 0.17 | ||||
Net earnings (loss) | $ | 1.29 | $ | 3.11 | $ | 1.80 | |||
AMOUNTS ATTRIBUTABLE TO INTERNATIONAL PAPER COMPANY COMMON SHAREHOLDERS | |||||||||
Earnings (loss) from continuing operations | $ | 568 | $ | 1,704 | $ | 717 | |||
Discontinued operations, net of taxes | (13 | ) | (309 | ) | 77 | ||||
Net earnings (loss) | $ | 555 | $ | 1,395 | $ | 794 |
In millions for the years ended December 31 | 2014 | 2013 | 2012 | ||||||
NET EARNINGS (LOSS) | $ | 536 | $ | 1,378 | $ | 799 | |||
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX | |||||||||
Amortization of pension and post-retirement prior service costs and net loss: | |||||||||
U.S. plans (less tax of $154, $195 and $124) | 242 | 307 | 195 | ||||||
Pension and postretirement liability adjustments: | |||||||||
U.S. plans (less tax of $798, $756 and $583) | (1,253 | ) | 1,188 | (914 | ) | ||||
Non-U.S. plans (less tax of $5, $3 and $9) | (18 | ) | (4 | ) | (25 | ) | |||
Change in cumulative foreign currency translation adjustment | (876 | ) | (426 | ) | (131 | ) | |||
Net gains/losses on cash flow hedging derivatives: | |||||||||
Net gains (losses) arising during the period (less tax of $3, $2 and $1) | 10 | — | 15 | ||||||
Reclassification adjustment for (gains) losses included in net earnings (less tax of $1, $3 and $13) | (4 | ) | (7 | ) | 22 | ||||
TOTAL OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX | (1,899 | ) | 1,058 | (838 | ) | ||||
Comprehensive Income (Loss) | (1,363 | ) | 2,436 | (39 | ) | ||||
Net (Earnings) Loss Attributable to Noncontrolling Interests | 19 | 17 | (5 | ) | |||||
Other Comprehensive (Income) Loss Attributable to Noncontrolling Interests | 12 | 23 | 3 | ||||||
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO INTERNATIONAL PAPER COMPANY | $ | (1,332 | ) | $ | 2,476 | $ | (41 | ) |
In millions, except per share amounts, at December 31 | 2014 | 2013 | ||||
ASSETS | ||||||
Current Assets | ||||||
Cash and temporary investments | $ | 1,881 | $ | 1,802 | ||
Accounts and notes receivable, less allowances of $82 in 2014 and $109 in 2013 | 3,083 | 3,756 | ||||
Inventories | 2,424 | 2,825 | ||||
Deferred income tax assets | 331 | 302 | ||||
Other current assets | 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 (Note 12) | 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 | 2,664 | 2,900 | ||||
Accrued payroll and benefits | 477 | 511 | ||||
Other accrued liabilities | 1,026 | 1,055 | ||||
Total Current Liabilities | 4,909 | 5,127 | ||||
Long-Term Debt | 8,631 | 8,827 | ||||
Nonrecourse Financial Liabilities of Special Purpose Entities (Note 12) | 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 | ||||
Commitments and Contingent Liabilities (Note 11) | ||||||
Equity | ||||||
Common stock $1 par value, 2014 – 448.9 shares and 2013 – 447.2 shares | 449 | 447 | ||||
Paid-in capital | 6,245 | 6,463 | ||||
Retained earnings | 4,409 | 4,446 | ||||
Accumulated other comprehensive loss | (4,646 | ) | (2,759 | ) | ||
6,457 | 8,597 | |||||
Less: Common stock held in treasury, at cost, 2014 – 28.734 shares and 2013 – 10.868 shares | 1,342 | 492 | ||||
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 |
In millions for the years ended December 31 | 2014 | 2013 | 2012 | ||||||
OPERATING ACTIVITIES | |||||||||
Net earnings (loss) | $ | 536 | $ | 1,378 | $ | 799 | |||
Depreciation, amortization, and cost of timber harvested | 1,414 | 1,547 | 1,486 | ||||||
Deferred income tax provision (benefit), net | (135 | ) | 146 | 204 | |||||
Restructuring and other charges | 881 | 210 | 109 | ||||||
Pension plan contribution | (353 | ) | (31 | ) | (44 | ) | |||
Net bargain purchase gain on acquisition of business | — | (13 | ) | — | |||||
Periodic pension expense, net | 387 | 545 | 342 | ||||||
Net (gains) losses on sales and impairments of businesses | 38 | 3 | 86 | ||||||
Equity (earnings) losses, net of taxes | 200 | 39 | (61 | ) | |||||
Release of tax reserves | — | (775 | ) | — | |||||
Impairment of goodwill and other intangible assets | 100 | 527 | — | ||||||
Other, net | 167 | (62 | ) | (38 | ) | ||||
Changes in current assets and liabilities | |||||||||
Accounts and notes receivable | (97 | ) | (134 | ) | 377 | ||||
Inventories | (103 | ) | (114 | ) | (28 | ) | |||
Accounts payable and accrued liabilities | (18 | ) | (110 | ) | (273 | ) | |||
Interest payable | (18 | ) | (57 | ) | 30 | ||||
Other | 78 | (71 | ) | (22 | ) | ||||
CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES | 3,077 | 3,028 | 2,967 | ||||||
INVESTMENT ACTIVITIES | |||||||||
Invested in capital projects | (1,366 | ) | (1,198 | ) | (1,383 | ) | |||
Acquisitions, net of cash acquired | — | (505 | ) | (3,734 | ) | ||||
Proceeds from divestitures | — | 726 | 474 | ||||||
Proceeds from spinoff | 411 | — | — | ||||||
Equity investment in Ilim | — | — | (45 | ) | |||||
Proceeds from sale of fixed assets | 61 | 65 | — | ||||||
Other | 34 | 85 | (170 | ) | |||||
CASH PROVIDED BY (USED FOR) INVESTMENT ACTIVITIES | (860 | ) | (827 | ) | (4,858 | ) | |||
FINANCING ACTIVITIES | |||||||||
Repurchase of common stock and payments of restricted stock tax withholding | (1,062 | ) | (512 | ) | (35 | ) | |||
Issuance of common stock | 66 | 298 | 108 | ||||||
Issuance of debt | 1,982 | 241 | 2,132 | ||||||
Reduction of debt | (2,095 | ) | (845 | ) | (2,488 | ) | |||
Change in book overdrafts | 30 | (123 | ) | 11 | |||||
Dividends paid | (620 | ) | (554 | ) | (476 | ) | |||
Acquisition of redeemable noncontrolling interest | (114 | ) | — | — | |||||
Debt tender premiums paid | (269 | ) | — | — | |||||
Redemption of securities | — | (150 | ) | — | |||||
Other | (4 | ) | (43 | ) | (47 | ) | |||
CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES | (2,086 | ) | (1,688 | ) | (795 | ) | |||
Effect of Exchange Rate Changes on Cash | (52 | ) | (13 | ) | (6 | ) | |||
Change in Cash and Temporary Investments | 79 | 500 | (2,692 | ) | |||||
Cash and Temporary Investments | |||||||||
Beginning of the period | 1,802 | 1,302 | 3,994 | ||||||
End of the period | $ | 1,881 | $ | 1,802 | $ | 1,302 |
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, 2012 | $ | 439 | $ | 5,908 | $ | 3,355 | $ | (3,005 | ) | $ | 52 | $ | 6,645 | $ | 340 | $ | 6,985 | |||||||
Issuance of stock for various plans, net | 1 | 134 | — | — | (87 | ) | 222 | — | 222 | |||||||||||||||
Repurchase of stock | — | — | — | — | 35 | (35 | ) | — | (35 | ) | ||||||||||||||
Dividends | — | — | (487 | ) | — | — | (487 | ) | — | (487 | ) | |||||||||||||
Dividends paid to noncontrolling interests by subsidiary | — | — | — | — | — | — | (6 | ) | (6 | ) | ||||||||||||||
Noncontrolling interests of acquired entities | — | — | — | — | — | — | (4 | ) | (4 | ) | ||||||||||||||
Comprehensive income (loss) | — | — | 794 | (835 | ) | — | (41 | ) | 2 | (39 | ) | |||||||||||||
BALANCE, DECEMBER 31, 2012 | 440 | 6,042 | 3,662 | (3,840 | ) | — | 6,304 | 332 | 6,636 | |||||||||||||||
Issuance of stock for various plans, net | 7 | 421 | — | — | (20 | ) | 448 | — | 448 | |||||||||||||||
Repurchase of stock | — | — | — | — | 512 | (512 | ) | — | (512 | ) | ||||||||||||||
Dividends | — | — | (567 | ) | — | — | (567 | ) | — | (567 | ) | |||||||||||||
Dividends paid to noncontrolling interests by subsidiary | — | — | — | — | — | — | (1 | ) | (1 | ) | ||||||||||||||
Noncontrolling interests of acquired entities | — | — | (44 | ) | — | — | (44 | ) | (112 | ) | (156 | ) | ||||||||||||
Comprehensive income (loss) | — | — | 1,395 | 1,081 | — | 2,476 | (40 | ) | 2,436 | |||||||||||||||
BALANCE, DECEMBER 31, 2013 | 447 | 6,463 | 4,446 | (2,759 | ) | 492 | 8,105 | 179 | 8,284 | |||||||||||||||
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 interest | — | — | 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 |
In millions, except per share amounts | 2014 | 2013 | 2012 | ||||||||
Earnings (loss) from continuing operations | $ | 568 | $ | 1,704 | $ | 717 | |||||
Effect of dilutive securities (a) | — | — | — | ||||||||
Earnings (loss) from continuing operations – assuming dilution | $ | 568 | $ | 1,704 | $ | 717 | |||||
Average common shares outstanding | 427.7 | 443.3 | 435.2 | ||||||||
Effect of dilutive securities (a): | |||||||||||
Restricted performance share plan | 4.2 | 4.5 | 5.0 | ||||||||
Stock options (b) | 0.1 | 0.3 | — | ||||||||
Average common shares outstanding – assuming dilution | 432.0 | 448.1 | 440.2 | ||||||||
Basic earnings (loss) per share from continuing operations | $ | 1.33 | $ | 3.85 | $ | 1.65 | |||||
Diluted earnings (loss) per share from continuing operations | $ | 1.31 | $ | 3.80 | $ | 1.63 |
(a) | Securities are not included in the table in periods when antidilutive. |
(b) | Options to purchase 0.0 million, 0.0 million and 9.1 million shares for the years ended December 31, 2014, 2013 and 2012, respectively, were not included in the computation of diluted common shares outstanding because their exercise price exceeded the average market price of the Company’s common stock for each respective reporting date. |
In millions | Defined Benefit Pension and Postretirement Items (a) | Change in Cumulative Foreign Currency Translation Adjustments (a) | Net Gains and Losses on Cash Flow Hedging Derivatives (a) | Total (a) | ||||||||
Balance as of 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 | ) |
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, 2011 | $ | (2,852 | ) | $ | (118 | ) | $ | (35 | ) | $ | (3,005 | ) |
Other comprehensive income (loss) before reclassifications | (939 | ) | (96 | ) | 15 | (1,020 | ) | |||||
Amounts reclassified from accumulated other comprehensive income | 195 | (35 | ) | 22 | 182 | |||||||
Net Current Period Other Comprehensive Income | (744 | ) | (131 | ) | 37 | (838 | ) | |||||
Other Comprehensive Income (Loss) Attributable to Noncontrolling Interest | — | 3 | — | 3 | ||||||||
Balance as of December 31, 2012 | $ | (3,596 | ) | $ | (246 | ) | $ | 2 | $ | (3,840 | ) |
Details About Accumulated Other Comprehensive Income Components | Amount Reclassified from Accumulated Other Comprehensive Income (a) | Location of Amount Reclassified from AOCI | |||||||||
2014 | 2013 | 2012 | |||||||||
In millions | |||||||||||
Defined benefit pension and postretirement items: | |||||||||||
Prior-service costs | $ | (17 | ) | $ | (9 | ) | $ | (2 | ) | (b) | Cost of products sold |
Actuarial gains/(losses) | (379 | ) | (493 | ) | (317 | ) | (b) | Cost of products sold | |||
Total pre-tax amount | (396 | ) | (502 | ) | (319 | ) | |||||
Tax (expense)/benefit | 154 | 195 | 124 | ||||||||
Net of tax | (242 | ) | (307 | ) | (195 | ) | |||||
Change in cumulative foreign currency translation adjustments: | |||||||||||
Business acquisition/divestiture | 13 | (17 | ) | 48 | Net (gains) losses on sales and impairments of businesses or Retained earnings | ||||||
Tax (expense)/benefit | — | — | (13 | ) | |||||||
Net of tax | 13 | (17 | ) | 35 | |||||||
Net gains and losses on cash flow hedging derivatives: | |||||||||||
Foreign exchange contracts | 3 | 10 | (24 | ) | (c) | Cost of products sold | |||||
Natural gas contracts | — | — | (11 | ) | (c) | Cost of products sold | |||||
Total pre-tax amount | 3 | 10 | (35 | ) | |||||||
Tax (expense)/benefit | 1 | (3 | ) | 13 | |||||||
Net of tax | 4 | 7 | (22 | ) | |||||||
Total reclassifications for the period | $ | (225 | ) | $ | (317 | ) | $ | (182 | ) |
In millions | Before-Tax Charges | After-Tax Charges | ||||||
Early debt extinguishment costs (see Note 13) | $ | 276 | $ | 169 | ||||
Courtland mill shutdown (a) | 554 | 338 | ||||||
Other (b) | 16 | 11 | ||||||
Total | $ | 846 | $ | 518 |
In millions | Severance and Other | |||
Additions and adjustments | $ | 41 | ||
Cash payments in 2014 | (29 | ) | ||
Balance, December 31, 2014 | $ | 12 |
In millions | Before-Tax Charges | After-Tax Charges | ||||||
Early debt extinguishment costs (see Note 13) | $ | 25 | $ | 16 | ||||
Courtland mill shutdown (a) | 118 | 72 | ||||||
Box plant closures | (13 | ) | (8 | ) | ||||
Augusta paper machine shutdown (b) | 45 | 28 | ||||||
Insurance reimbursements | (30 | ) | (19 | ) | ||||
Other (c) | 11 | 9 | ||||||
Total | $ | 156 | $ | 98 |
In millions | Severance and Other | |||
Additions and adjustments | $ | 46 | ||
Cash payments in 2013 | (5 | ) | ||
Cash payments in 2014 | (41 | ) | ||
Balance, December 31, 2014 | $ | — |
In millions | Before-Tax Charges | After-Tax Charges | ||||||
Early debt extinguishment costs (see Note 13) | $ | 48 | $ | 30 | ||||
EMEA packaging restructuring (a) | 17 | 12 | ||||||
Other | — | 4 | ||||||
Total | $ | 65 | $ | 46 |
In millions | Severance and Other | |||
Additions and adjustments | $ | 17 | ||
Cash payments in 2012 | (3 | ) | ||
Cash payments in 2013 | (4 | ) | ||
Cash payments in 2014 | (6 | ) | ||
Balance, December 31, 2014 | $ | 4 |
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 | ||||
Accounts and notes receivable | $ | 466 | ||
Inventory | 484 | |||
Deferred income tax assets – current | 140 | |||
Other current assets | 57 | |||
Plants, properties and equipment | 2,911 | |||
Financial assets of special purpose entities | 2,091 | |||
Goodwill | 2,139 | |||
Other intangible assets | 693 | |||
Deferred charges and other assets | 54 | |||
Total assets acquired | 9,035 | |||
Notes payable and current maturities of long-term debt | 130 | |||
Accounts payable and accrued liabilities | 704 | |||
Long-term debt | 527 | |||
Nonrecourse financial liabilities of special purpose entities | 2,030 | |||
Deferred income tax liability | 1,252 | |||
Pension benefit obligation | 338 | |||
Postretirement and postemployment benefit obligation | 99 | |||
Other liabilities | 221 | |||
Total liabilities assumed | 5,301 | |||
Net assets acquired | $ | 3,734 |
In millions | Estimated Fair Value | Average Remaining Useful Life | |||
Asset Class: | (at acquisition date) | ||||
Customer relationships | $ | 536 | 12-17 years | ||
Developed technology | 8 | 5-10 years | |||
Tradenames | 109 | Indefinite | |||
Favorable contracts | 14 | 4-7 years | |||
Non-compete agreement | 26 | 2 years | |||
Total | $ | 693 |
In millions, except per share amounts | 2012 | ||
Net sales | $ | 28,125 | |
Earnings (loss) from continuing operations (a) | 805 | ||
Net earnings (loss) (a) | 845 | ||
Diluted earnings (loss) from continuing operations per share (a) | 1.82 | ||
Diluted net earnings (loss) per share (a) | 1.92 |
In millions | 2014 | 2013 | 2012 | |||||||||
Net Sales | $ | 2,604 | $ | 5,597 | $ | 5,981 | ||||||
Costs and Expenses | ||||||||||||
Cost of products sold | 2,309 | 4,941 | 5,300 | |||||||||
Selling and administrative expenses | 191 | 409 | 418 | |||||||||
Depreciation, amortization and cost of timber harvested | 9 | 16 | 13 | |||||||||
Distribution expenses | 69 | 149 | 141 | |||||||||
Restructuring and other charges | 25 | 54 | 44 | |||||||||
Impairment of goodwill and other intangibles | — | 400 | — | |||||||||
Other, net | 3 | 7 | 8 | |||||||||
Earnings (Loss) Before Income Taxes and Equity Earnings | (2 | ) | (379 | ) | 57 | |||||||
Income tax provision (benefit) | (1 | ) | (25 | ) | 25 | |||||||
Discontinued Operations, Net of Taxes (a) | $ | (1 | ) | $ | (354 | ) | $ | 32 |
In millions at December 31 | 2014 | 2013 | ||||
Temporary Investments | $ | 1,480 | $ | 1,398 |
In millions at December 31 | 2014 | 2013 | ||||
Accounts and notes receivable: | ||||||
Trade | $ | 2,860 | $ | 3,497 | ||
Other | 223 | 259 | ||||
Total | $ | 3,083 | $ | 3,756 |
In millions at December 31 | 2014 | 2013 | ||||
Raw materials | $ | 494 | $ | 372 | ||
Finished pulp, paper and packaging products | 1,273 | 1,834 | ||||
Operating supplies | 562 | 572 | ||||
Other | 95 | 47 | ||||
Inventories | $ | 2,424 | $ | 2,825 |
In millions at December 31 | 2014 | 2013 | ||||
Pulp, paper and packaging facilities | $ | 31,805 | $ | 32,268 | ||
Other properties and equipment | 1,263 | 1,478 | ||||
Gross cost | 33,068 | 33,746 | ||||
Less: Accumulated depreciation | 20,340 | 20,074 | ||||
Plants, properties and equipment, net | $ | 12,728 | $ | 13,672 |
In millions | 2014 | 2013 | 2012 | ||||||
Depreciation expense | $ | 1,308 | $ | 1,415 | $ | 1,390 |
In millions | 2014 | 2013 | 2012 | ||||||
Interest payments | $ | 718 | $ | 751 | $ | 740 |
In millions | 2014 | 2013 | 2012 | ||||||
Interest expense (a) | $ | 677 | $ | 669 | $ | 742 | |||
Interest income (a) | 70 | 57 | 71 | ||||||
Capitalized interest costs | 23 | 17 | 37 |
(a) | Interest expense and interest income exclude approximately $38 million, $45 million and $49 million in 2014, 2013 and 2012, respectively, related to investments in and borrowings from variable interest entities for which the Company has a legal right of offset (see Note 12). |
In millions | Industrial Packaging | Printing Papers | Consumer Packaging | Distribution | Total | ||||||||||||||
Balance as of January 1, 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. |
In millions | Industrial Packaging | Printing Papers | Consumer Packaging | Distribution | Total | ||||||||||||||
Balance as of January 1, 2013 | |||||||||||||||||||
Goodwill | $ | 3,165 | $ | 2,396 | $ | 1,783 | $ | 400 | $ | 7,744 | |||||||||
Accumulated impairment losses (a) | — | (1,765 | ) | (1,664 | ) | — | (3,429 | ) | |||||||||||
3,165 | 631 | 119 | 400 | 4,315 | |||||||||||||||
Reclassifications and other (b) | (28 | ) | (63 | ) | 3 | — | (88 | ) | |||||||||||
Additions/reductions | 293 | (c) | (22 | ) | (d) | 1 | — | 272 | |||||||||||
Impairment loss | — | (112 | ) | (e) | — | (400 | ) | (e) | (512 | ) | |||||||||
Balance as of December 31, 2013 | |||||||||||||||||||
Goodwill | 3,430 | 2,311 | 1,787 | 400 | 7,928 | ||||||||||||||
Accumulated impairment losses (a) | — | (1,877 | ) | (1,664 | ) | (400 | ) | (3,941 | ) | ||||||||||
Total | $ | 3,430 | $ | 434 | $ | 123 | $ | — | $ | 3,987 |
(a) | Represents accumulated goodwill impairment charges since the adoption of ASC 350, “Intangibles – Goodwill and Other” in 2002. |
(b) | Represents the effects of foreign currency translations and reclassifications. |
(c) | Reflects $260 million for Orsa IP, the newly formed joint venture in Brazil and the adjustment of $54 million ($33 million after-tax) previously included as a trade name intangible asset in Deferred Charges and Other Assets on the balance sheet. |
(d) | Reflects a reduction from tax benefits generated by the deduction of goodwill amortization for tax purposes in Brazil. |
(e) | Represents the impairment of goodwill for the India Papers business and xpedx. |
2014 | 2013 | ||||||||||||
In millions at December 31 | Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | |||||||||
Customer relationships and lists | $ | 561 | $ | 157 | $ | 602 | $ | 139 | |||||
Non-compete agreements | 74 | 53 | 76 | (a) | 46 | ||||||||
Tradenames, patents and trademarks | 61 | 44 | 67 | 33 | |||||||||
Land and water rights | 81 | 9 | 76 | 5 | |||||||||
Fuel and power agreements | 5 | 3 | 7 | 2 | |||||||||
Software | 23 | 22 | 17 | 15 | |||||||||
Other | 43 | 21 | 75 | 32 | |||||||||
Total | $ | 848 | $ | 309 | $ | 920 | $ | 272 |
(a) | Includes $15 million recorded to write-off a tradename intangible asset of the Company's India Papers business. This amount is included in Impairment of goodwill and other intangibles in the accompanying consolidated statement of operations. |
In millions | 2014 | 2013 | 2012 | ||||||
Amortization expense related to intangible assets | $ | 73 | $ | 79 | $ | 54 |
In millions | 2014 | 2013 | 2012 | ||||||
Earnings (loss) | |||||||||
U.S. | $ | 565 | $ | 775 | $ | 419 | |||
Non-U.S. | 307 | 453 | 548 | ||||||
Earnings (loss) from continuing operations before income taxes and equity earnings | $ | 872 | $ | 1,228 | $ | 967 |
In millions | 2014 | 2013 | 2012 | ||||||
Current tax provision (benefit) | |||||||||
U.S. federal | $ | 175 | $ | (663 | ) | $ | (3 | ) | |
U.S. state and local | 9 | (98 | ) | 12 | |||||
Non-U.S. | 74 | 95 | 100 | ||||||
$ | 258 | $ | (666 | ) | $ | 109 | |||
Deferred tax provision (benefit) | |||||||||
U.S. federal | $ | (67 | ) | $ | 206 | $ | 220 | ||
U.S. state and local | 5 | (18 | ) | 5 | |||||
Non-U.S. | (73 | ) | (20 | ) | (28 | ) | |||
$ | (135 | ) | $ | 168 | $ | 197 | |||
Income tax provision (benefit) | $ | 123 | $ | (498 | ) | $ | 306 |
In millions | 2014 | 2013 | 2012 | ||||||
Earnings (loss) from continuing operations before income taxes and equity earnings | $ | 872 | $ | 1,228 | $ | 967 | |||
Statutory U.S. income tax rate | 35 | % | 35 | % | 35 | % | |||
Tax expense (benefit) using statutory U.S. income tax rate | 305 | 430 | 338 | ||||||
State and local income taxes | 10 | (2 | ) | 9 | |||||
Tax rate and permanent differences on non-U.S. earnings | (72 | ) | (90 | ) | (116 | ) | |||
Net U.S. tax on non-U.S. dividends | 16 | (15 | ) | 48 | |||||
Tax benefit on manufacturing activities | (46 | ) | (27 | ) | (15 | ) | |||
Non-deductible business expenses | 7 | 4 | 7 | ||||||
Non-deductible goodwill | 35 | 37 | 34 | ||||||
Tax audits | — | (770 | ) | — | |||||
Subsidiary liquidation | (85 | ) | — | — | |||||
Retirement plan dividends | (5 | ) | (5 | ) | (5 | ) | |||
Tax basis adjustments | — | (33 | ) | — | |||||
Tax credits | (34 | ) | (23 | ) | — | ||||
Medicare subsidy | — | — | 5 | ||||||
Other, net | (8 | ) | (4 | ) | 1 | ||||
Income tax provision (benefit) | $ | 123 | $ | (498 | ) | $ | 306 | ||
Effective income tax rate | 14 | % | (41 | )% | 32 | % |
In millions | 2014 | 2013 | ||||
Deferred income tax assets: | ||||||
Postretirement benefit accruals | $ | 189 | $ | 193 | ||
Pension obligations | 1,517 | 725 | ||||
Alternative minimum and other tax credits | 342 | 515 | ||||
Net operating and capital loss carryforwards | 672 | 610 | ||||
Compensation reserves | 280 | 281 | ||||
Other | 266 | 284 | ||||
Gross deferred income tax assets | 3,266 | 2,608 | ||||
Less: valuation allowance | (415 | ) | (413 | ) | ||
Net deferred income tax asset | $ | 2,851 | $ | 2,195 | ||
Deferred income tax liabilities: | ||||||
Intangibles | $ | (316 | ) | $ | (304 | ) |
Plants, properties and equipment | (2,707 | ) | (2,919 | ) | ||
Forestlands and related installment sales | (2,290 | ) | (2,307 | ) | ||
Gross deferred income tax liabilities | $ | (5,313 | ) | $ | (5,530 | ) |
Net deferred income tax liability | $ | (2,462 | ) | $ | (3,335 | ) |
In millions | 2014 | 2013 | 2012 | ||||||
Balance at January 1 | $ | (161 | ) | $ | (972 | ) | $ | (857 | ) |
(Additions) reductions based on tax positions related to current year | (15 | ) | (22 | ) | 12 | ||||
Additions for tax positions of prior years | (1 | ) | (29 | ) | (140 | ) | |||
Reductions for tax positions of prior years | 9 | 824 | 6 | ||||||
Settlements | — | 26 | 2 | ||||||
Expiration of statutes of limitations | 2 | 11 | 7 | ||||||
Currency translation adjustment | 8 | 1 | (2 | ) | |||||
Balance at December 31 | $ | (158 | ) | $ | (161 | ) | $ | (972 | ) |
In millions | 2014 | 2013 | 2012 | ||||||
Special items | $ | (372 | ) | $ | (95 | ) | $ | (82 | ) |
Tax-related adjustments: | |||||||||
Internal restructurings | (90 | ) | (4 | ) | 14 | ||||
Settlement of tax audits and legislative changes | 10 | (770 | ) | — | |||||
Medicare D deferred income tax write-off | — | — | 5 | ||||||
Other tax adjustments | (1 | ) | — | — | |||||
Income tax provision (benefit) related to special items | $ | (453 | ) | $ | (869 | ) | $ | (63 | ) |
In millions | 2015 Through 2024 | 2025 Through 2034 | Indefinite | Total | ||||||||
U.S. federal and non-U.S. NOLs | $ | 28 | $ | 3 | $ | 462 | $ | 493 | ||||
State taxing jurisdiction NOLs | 140 | 76 | — | 216 | ||||||||
U.S. federal, non- U.S. and state tax credit carryforwards | 146 | 23 | 275 | 444 | ||||||||
U.S. federal and state capital loss carryforwards | 58 | — | — | 58 | ||||||||
Total | $ | 372 | $ | 102 | $ | 737 | $ | 1,211 |
In millions | 2015 | 2016 | 2017 | 2018 | 2019 | Thereafter | ||||||||||||
Lease obligations | $ | 142 | $ | 106 | $ | 84 | $ | 63 | $ | 45 | $ | 91 | ||||||
Purchase obligations (a) | 3,266 | 761 | 583 | 463 | 422 | 1,690 | ||||||||||||
Total | $ | 3,408 | $ | 867 | $ | 667 | $ | 526 | $ | 467 | $ | 1,781 |
(a) | Includes $2.3 billion relating to fiber supply agreements entered into at the time of the Company’s 2006 Transformation Plan forestland sales and in conjunction with the 2008 acquisition of Weyerhaeuser Company’s Containerboard, Packaging and Recycling business. |
In millions | 2014 | 2013 | 2012 | ||||||
Revenue (loss) (a) | $ | 38 | $ | 45 | $ | 49 | |||
Expense (a) | 72 | 79 | 90 | ||||||
Cash receipts (b) | 22 | 33 | 36 | ||||||
Cash payments (c) | 73 | 84 | 87 |
(a) | The net expense related to the Company’s interest in the Entities is included in Interest expense, net in the accompanying consolidated statement of operations, as International Paper has and intends to effect its legal right to offset as discussed above. |
(b) | The cash receipts are equity distributions from the Entities to International Paper. |
(c) | The semi-annual payments are related to interest on the associated debt obligations discussed above. |
In millions | 2014 | 2013 | 2012 | ||||||
Revenue (loss) (a) | $ | 26 | $ | 27 | $ | 28 | |||
Expense (b) | 25 | 29 | 28 | ||||||
Cash receipts (c) | 7 | 8 | 12 | ||||||
Cash payments (d) | 18 | 21 | 22 |
(a) | The revenue is included in Interest expense, net in the accompanying consolidated statement of operations and includes approximately $19 million, $19 million and $17 million for the years ended December 31, 2014, 2013 and 2012, respectively, of accretion income for the amortization of the purchase accounting adjustment of the Financial assets of special purpose entities. |
(b) | The expense is included in Interest expense, net in the accompanying consolidated statement of operations and includes $7 million, $7 million and $6 million for the years ended December 31, 2014, 2013 and 2012, respectively, of accretion expense for the amortization of the purchase accounting adjustment on the Nonrecourse financial liabilities of special purpose entities. |
(c) | The cash receipts are interest received on the Financial assets of special purpose entities. |
(d) | The cash payments are interest paid on Nonrecourse financial liabilities of special purpose entities. |
In millions | 2014 | 2013 | 2012 | ||||||
Debt reductions (a) | $ | 1,625 | $ | 574 | $ | 1,272 | |||
Pre-tax early debt extinguishment costs (b) | 276 | 25 | 48 |
(a) | Reductions related to notes with interest rates ranging from 1.63% to 9.38% with original maturities from 2014 to 2041 for the years ended December 31, 2014, 2013 and 2012. |
(b) | Amounts are included in Restructuring and other charges in the accompanying consolidated statements of operations. |
In millions at December 31 | 2014 | 2013 | ||||
8.7% note – due 2038 | $ | 264 | $ | 264 | ||
9 3/8% note – due 2019 | 420 | 848 | ||||
7.95% debentures – due 2018 | 903 | 1,429 | ||||
7.5% note – due 2021 | 979 | 999 | ||||
7.3% notes – due 2039 | 721 | 721 | ||||
6 7/8% notes – due 2023 – 2029 | 131 | 130 | ||||
6.65% note – due 2037 | 4 | 4 | ||||
6.4% to 7.75% debentures due 2025 – 2027 | 142 | 142 | ||||
6 3/8% to 6 5/8% notes – due 2016 – 2018 | 358 | 364 | ||||
6.0% notes – due 2041 | 585 | 585 | ||||
5.25% to 5.3% notes – due 2015 – 2016 | 457 | 657 | ||||
4.8% notes - due 2044 | 796 | — | ||||
4.75% notes – due 2022 | 896 | 899 | ||||
3.65% notes - due 2024 | 797 | — | ||||
Floating rate notes – due 2014 – 2019 (a) | 271 | 269 | ||||
Environmental and industrial development bonds – due 2014 – 2035 (b) | 950 | 1,487 | ||||
Short-term notes (c) | 424 | 386 | ||||
Other (d) | 275 | 304 | ||||
Total (e) | 9,373 | 9,488 | ||||
Less: current maturities | 742 | 661 | ||||
Long-term debt | $ | 8,631 | $ | 8,827 |
(a) | The weighted average interest rate on these notes was 2.8% in 2014 and 2.6% in 2013. |
(b) | The weighted average interest rate on these bonds was 5.7% in 2014 and 5.5% in 2013. |
(c) | The weighted average interest rate was 2.6% in 2014 and 2.8% in 2013. Includes $91 million at December 31, 2014 and |
(d) | Includes $20 million at December 31, 2014 and $41 million at December 31, 2013, related to the unamortized gain on interest rate swap unwinds (see Note 14). |
(e) | The fair market value was approximately $10.6 billion at December 31, 2014 and $10.7 billion at December 31, 2013. |
In millions | December 31, 2014 | December 31, 2013 | |||
Derivatives in Cash Flow Hedging Relationships: | |||||
Foreign exchange contracts (Sell / Buy; denominated in sell notional): (a) | |||||
Brazilian real / U.S. dollar - Forward | 166 | 502 | |||
British pounds / Brazilian real - Forward | 5 | 17 | |||
European euro / Brazilian real - Forward | 9 | 27 | |||
European euro / Polish zloty - Forward | 280 | 252 | |||
U.S. dollar / Brazilian real - Forward | 125 | 290 | |||
U.S. dollar / Brazilian real - Zero-cost collar | — | 18 | |||
Derivatives in Fair Value Hedging Relationships: | |||||
Interest rate contracts (in USD) | 230 | 175 | |||
Derivatives Not Designated as Hedging Instruments: | |||||
Foreign exchange contracts (Sell / Buy; denominated in sell notional): | |||||
Indian rupee / U.S. dollar | 43 | 157 | |||
Mexican peso / U.S. dollar | 187 | — | |||
U.S. dollar / Brazilian real | 11 | — |
(a) | These contracts had maturities of three years or less as of December 31, 2014. |
Gain (Loss) Recognized in AOCI on Derivatives (Effective Portion) | |||||||||
In millions | 2014 | 2013 | 2012 | ||||||
Foreign exchange contracts | $ | 10 | $ | — | $ | 16 | |||
Natural gas contracts | — | — | (1 | ) | |||||
Total | $ | 10 | $ | — | $ | 15 |
Gain (Loss) Reclassified from AOCI into Income (Effective Portion) | Location of Gain (Loss) Reclassified from AOCI into Income (Effective Portion) | ||||||||||
In millions | 2014 | 2013 | 2012 | ||||||||
Derivatives in Cash Flow Hedging Relationships: | |||||||||||
Foreign exchange contracts | $ | 4 | $ | 7 | $ | (15 | ) | Cost of products sold | |||
Natural gas contracts | — | — | (7 | ) | Cost of products sold | ||||||
Total | $ | 4 | $ | 7 | $ | (22 | ) |
Gain (Loss) Recognized in Income | Location of Gain (Loss) in Consolidated Statement of Operations | |||||||||||||||
In millions | 2014 | 2013 | 2012 | |||||||||||||
Derivatives in Fair Value Hedging Relationships: | ||||||||||||||||
Interest rate contracts | $ | 1 | $ | (1 | ) | $ | — | Interest expense, net | ||||||||
Debt | (1 | ) | 1 | — | Interest expense, net | |||||||||||
Total | $ | — | $ | — | $ | — | ||||||||||
Derivatives Not Designated as Hedging Instruments: | ||||||||||||||||
Electricity Contracts | $ | (2 | ) | $ | 4 | $ | (4 | ) | Cost of products sold | |||||||
Embedded derivatives | — | (1 | ) | (4 | ) | Interest expense, net | ||||||||||
Foreign exchange contracts | (1 | ) | (5 | ) | — | Cost of products sold | ||||||||||
Interest rate contracts | 12 | (a) | 21 | 22 | Interest expense, net | |||||||||||
Total | $ | 9 | $ | 19 | $ | 14 |
2014 | 2013 | |||||||||||||||||||||||
In millions | Issued | Terminated | Undesignated | Issued | Terminated | Undesignated | ||||||||||||||||||
Fourth Quarter | $ | — | $ | — | $ | — | $ | 175 | $ | — | $ | — | ||||||||||||
First Quarter | 55 | — | — | — | — | — | ||||||||||||||||||
Total | $ | 55 | $ | — | $ | — | $ | 175 | $ | — | $ | — |
Assets | Liabilities | |||||||||||||||
In millions | December 31, 2014 | December 31, 2013 | December 31, 2014 | December 31, 2013 | ||||||||||||
Derivatives designated as hedging instruments | ||||||||||||||||
Foreign exchange contracts – cash flow | $ | 16 | (a) | $ | 37 | (c) | $ | 14 | (d) | $ | 33 | (e) | ||||
Interest rate contracts - fair value | — | — | — | 1 | (f) | |||||||||||
Total derivatives designated as hedging instruments | $ | 16 | $ | 37 | $ | 14 | $ | 34 | ||||||||
Derivatives not designated as hedging instruments | ||||||||||||||||
Electricity contract | $ | — | $ | 2 | (b) | $ | 2 | (d) | $ | — | ||||||
Foreign exchange contracts | 1 | (b) | — | 2 | (d) | — | ||||||||||
Total derivatives not designated as hedging instruments | $ | 1 | $ | 2 | $ | 4 | $ | — | ||||||||
Total derivatives | $ | 17 | $ | 39 | $ | 18 | $ | 34 |
(a) | Includes $14 million recorded in Other current assets and $2 million recorded in Deferred charges and other assets in the accompanying consolidated balance sheet. |
(b) | Included in Other current assets in the accompanying consolidated balance sheet. |
(c) | Includes $23 million recorded in Other current assets and $14 million recorded in Deferred charges and other assets in the accompanying consolidated balance sheet. |
(d) | Included in Other accrued liabilities in the accompanying consolidated balance sheet. |
(e) | Includes $24 million recorded in Other accrued liabilities and $9 million recorded in Other liabilities in the accompanying consolidated balance sheet. |
(f) | Included in Other liabilities in the accompanying consolidated balance sheet. |
Common Stock | ||||
In thousands | Issued | Treasury | ||
Balance at January 1, 2012 | 438,872 | 1,921 | ||
Issuance of stock for various plans, net | 1,022 | (2,994 | ) | |
Repurchase of stock | — | 1,086 | ||
Balance at December 31, 2012 | 439,894 | 13 | ||
Issuance of stock for various plans, net | 7,328 | (533 | ) | |
Repurchase of stock | — | 11,388 | ||
Balance at December 31, 2013 | 447,222 | 10,868 | ||
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 |
2014 | 2013 | |||||||||||
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 | $ | 12,903 | $ | 228 | $ | 14,201 | $ | 223 | ||||
Service cost | 145 | 5 | 188 | 4 | ||||||||
Interest cost | 600 | 13 | 576 | 11 | ||||||||
Curtailments | — | (4 | ) | (14 | ) | — | ||||||
Settlements | — | — | (5 | ) | (4 | ) | ||||||
Actuarial loss (gain) | 1,755 | 12 | (1,309 | ) | — | |||||||
Divestitures | (23 | ) | — | — | — | |||||||
Other | — | 12 | — | 3 | ||||||||
Plan amendments | 133 | — | — | — | ||||||||
Special termination benefits | — | — | 8 | — | ||||||||
Benefits paid | (772 | ) | (13 | ) | (742 | ) | (8 | ) | ||||
Effect of foreign currency exchange rate movements | — | (20 | ) | — | (1 | ) | ||||||
Benefit obligation, December 31 | $ | 14,741 | $ | 233 | $ | 12,903 | $ | 228 | ||||
Change in plan assets: | ||||||||||||
Fair value of plan assets | $ | 10,706 | $ | 181 | $ | 10,111 | $ | 171 | ||||
Actual return on plan assets | 593 | 13 | 1,283 | 15 | ||||||||
Company contributions | 391 | 8 | 59 | 8 | ||||||||
Benefits paid | (772 | ) | (13 | ) | (742 | ) | (8 | ) | ||||
Settlements | — | — | (5 | ) | (4 | ) | ||||||
Other | — | 6 | — | — | ||||||||
Effect of foreign currency exchange rate movements | — | (15 | ) | — | (1 | ) | ||||||
Fair value of plan assets, December 31 | $ | 10,918 | $ | 180 | $ | 10,706 | $ | 181 | ||||
Funded status, December 31 | $ | (3,823 | ) | $ | (53 | ) | $ | (2,197 | ) | $ | (47 | ) |
Amounts recognized in the consolidated balance sheet: | ||||||||||||
Non-current asset | $ | — | $ | 8 | $ | — | $ | 9 | ||||
Current liability | (62 | ) | (3 | ) | (46 | ) | (2 | ) | ||||
Non-current liability | (3,761 | ) | (58 | ) | (2,151 | ) | (54 | ) | ||||
$ | (3,823 | ) | $ | (53 | ) | $ | (2,197 | ) | $ | (47 | ) |
Amounts recognized in accumulated other comprehensive income under ASC 715 (pre-tax): | ||||||||||||
Prior service cost | $ | 209 | $ | — | $ | 107 | $ | — | ||||
Net actuarial loss | 4,812 | 40 | 3,285 | 29 | ||||||||
$ | 5,021 | $ | 40 | $ | 3,392 | $ | 29 |
In millions | U.S. Plans | Non- U.S. Plans | ||||
Current year actuarial (gain) loss | $ | 1,924 | $ | 13 | ||
Amortization of actuarial loss | (374 | ) | — | |||
Current year prior service cost | 133 | — | ||||
Amortization of prior service cost | (30 | ) | — | |||
Curtailments | (1 | ) | 4 | |||
Restructuring Effects | (23 | ) | — | |||
Effect of foreign currency exchange rate movements | — | (6 | ) | |||
$ | 1,629 | $ | 11 |
2014 | 2013 | |||||||||||
In millions | U.S. Plans | Non-U.S. Plans | U.S. Plans | Non-U.S. Plans | ||||||||
Projected benefit obligation | $ | 14,741 | $ | 196 | $ | 12,903 | $ | 181 | ||||
Accumulated benefit obligation | 14,559 | 176 | 12,560 | 168 | ||||||||
Fair value of plan assets | 10,918 | 135 | 10,706 | 125 |
2014 | 2013 | 2012 | ||||||||||||||||
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 | $ | 145 | $ | 5 | $ | 188 | $ | 4 | $ | 152 | $ | 3 | ||||||
Interest cost | 600 | 13 | 576 | 11 | 604 | 12 | ||||||||||||
Expected return on plan assets | (762 | ) | (14 | ) | (738 | ) | (11 | ) | (753 | ) | (12 | ) | ||||||
Actuarial loss / (gain) | 374 | — | 485 | 1 | 307 | — | ||||||||||||
Amortization of prior service cost | 30 | — | 34 | — | 32 | — | ||||||||||||
Curtailment gain | — | (4 | ) | — | — | — | — | |||||||||||
Net periodic pension expense (a) | $ | 387 | $ | — | $ | 545 | $ | 5 | $ | 342 | $ | 3 |
2014 | 2013 | 2012 | |||||||||||
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 | 4.10 | % | 4.72 | % | 4.90 | % | 5.07 | % | 4.10 | % | 4.96 | % | |
Rate of compensation increase | 3.75 | % | 4.03 | % | 3.75 | % | 4.13 | % | 3.75 | % | 3.17 | % | |
Actuarial assumptions used to determine net periodic pension cost for years ended December 31: | |||||||||||||
Discount rate | 4.65 | % | (a) | 5.07 | % | 4.10 | % | 4.96 | % | 5.10 | % | 5.98 | % |
Expected long-term rate of return on plan assets (b) | 7.75 | % | 7.53 | % | 8.00 | % | 7.04 | % | 8.00 | % | 7.62 | % | |
Rate of compensation increase | 3.75 | % | 4.13 | % | 3.75 | % | 3.17 | % | 3.75 | % | 3.12 | % |
(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%, 6.16% and 5.70% for 2014, 2013 and 2012, respectively. |
In millions | 2015 | ||
Expense/(Income): | |||
Discount rate | $ | 36 | |
Expected long-term rate of return on plan assets | 25 | ||
Rate of compensation increase | (1 | ) |
Asset Class | 2014 | 2013 | Target Allocations | ||
Equity accounts | 47 | % | 49 | % | 43% - 54% |
Fixed income accounts | 33 | % | 32 | % | 25% - 35% |
Real estate accounts | 10 | % | 10 | % | 7% - 13% |
Other | 10 | % | 9 | % | 8% - 17% |
Total | 100 | % | 100 | % |
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 | ||||||||
Derivatives | 376 | — | — | 376 | ||||||||
Cash and cash equivalents | 329 | 329 | — | — | ||||||||
Total Investments | $ | 10,918 | $ | 3,524 | $ | 4,521 | $ | 2,873 |
Fair Value Measurement at December 31, 2013 | ||||||||||||
Asset Class | Total | Quoted Prices in Active Markets For Identical Assets (Level 1) | Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||
In millions | ||||||||||||
Equities – domestic | $ | 2,466 | $ | 1,175 | $ | 1,290 | $ | 1 | ||||
Equities – international | 2,313 | 1,470 | 843 | — | ||||||||
Corporate bonds | 1,248 | — | 1,248 | — | ||||||||
Government securities | 1,097 | — | 1,097 | — | ||||||||
Mortgage backed securities | 143 | — | 143 | — | ||||||||
Other fixed income | 74 | (1 | ) | 65 | 10 | |||||||
Commodities | 193 | — | 193 | — | ||||||||
Hedge funds | 831 | — | — | 831 | ||||||||
Private equity | 484 | — | — | 484 | ||||||||
Real estate | 1,038 | — | — | 1,038 | ||||||||
Derivatives | 313 | — | — | 313 | ||||||||
Cash and cash equivalents | 506 | (10 | ) | 516 | — | |||||||
Total Investments | $ | 10,706 | $ | 2,634 | $ | 5,395 | $ | 2,677 |
In millions | Equities- Domestic | Other Fixed Income | Hedge Funds | Private Equity | Real Estate | Derivatives | Total | ||||||||||||||
Beginning balance at December 31, 2013 | $ | 1 | $ | 10 | $ | 831 | $ | 484 | $ | 1,038 | $ | 313 | $ | 2,677 | |||||||
Actual return on plan assets: | |||||||||||||||||||||
Relating to assets still held at the reporting date | (1 | ) | — | 37 | 17 | 88 | 18 | 159 | |||||||||||||
Relating to assets sold during the period | 1 | — | 4 | (1 | ) | 14 | 76 | 94 | |||||||||||||
Purchases, sales and settlements | (1 | ) | — | (5 | ) | (13 | ) | (7 | ) | (260 | ) | (286 | ) | ||||||||
Transfers in and/or out of Level 3 (a) | — | — | — | 32 | (32 | ) | 229 | 229 | |||||||||||||
Ending balance at December 31, 2014 | $ | — | $ | 10 | $ | 867 | $ | 519 | $ | 1,101 | $ | 376 | $ | 2,873 |
In millions | |||
2015 | $ | 802 | |
2016 | 769 | ||
2017 | 781 | ||
2018 | 795 | ||
2019 | 811 | ||
2020 – 2024 | 4,279 |
In millions | 2014 | 2013 | 2012 | |||||||||||||||
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 | $ | 2 | $ | 2 | $ | 3 | $ | — | ||||||
Interest cost | 14 | 6 | 14 | 5 | 20 | 1 | ||||||||||||
Actuarial loss | 5 | 1 | 7 | — | 10 | — | ||||||||||||
Amortization of prior service credits | (13 | ) | (1 | ) | (24 | ) | — | (30 | ) | — | ||||||||
Curtailment gain | — | — | — | — | (7 | ) | — | |||||||||||
Net postretirement (benefit) expense (a) | $ | 7 | $ | 7 | $ | (1 | ) | $ | 7 | $ | (4 | ) | $ | 1 |
2014 | 2013 | 2012 | ||||||||||
U.S. Plans | Non- U.S. Plans | U.S. Plans | Non- U.S. Plans | U.S. Plans | Non- U.S. Plans | |||||||
Discount rate | 4.50 | % | 11.94 | % | 3.70 | % | 8.43 | % | 4.40 | % | 7.73 | % |
2014 | 2013 | |||||||
U.S. Plans | Non- U.S. Plans | U.S. Plans | Non- U.S. Plans | |||||
Discount rate | 3.90 | % | 11.52 | % | 4.50 | % | 11.94 | % |
Health care cost trend rate assumed for next year | 7.00 | % | 11.38 | % | 7.00 | % | 11.43 | % |
Rate that the cost trend rate gradually declines to | 5.00 | % | 6.11 | % | 5.00 | % | 6.12 | % |
Year that the rate reaches the rate it is assumed to remain | 2022 | 2025 | 2017 | 2024 |
In millions | 2014 | 2013 | ||||||||||
U.S. Plans | Non- U.S. Plans | U.S. Plans | Non- U.S. Plans | |||||||||
Change in projected benefit obligation: | ||||||||||||
Benefit obligation, January 1 | $ | 322 | $ | 72 | $ | 449 | $ | 22 | ||||
Service cost | 1 | 1 | 2 | 2 | ||||||||
Interest cost | 14 | 6 | 14 | 5 | ||||||||
Participants’ contributions | 15 | — | 19 | — | ||||||||
Actuarial (gain) loss | 14 | 19 | (80 | ) | 12 | |||||||
Other | — | (26 | ) | — | 38 | |||||||
Plan amendments | — | (7 | ) | — | — | |||||||
Benefits paid | (62 | ) | (1 | ) | (82 | ) | (1 | ) | ||||
Less: Federal subsidy | 2 | — | 2 | — | ||||||||
Curtailment | — | — | (2 | ) | — | |||||||
Currency Impact | — | (5 | ) | — | (6 | ) | ||||||
Benefit obligation, December 31 | $ | 306 | $ | 59 | $ | 322 | $ | 72 | ||||
Change in plan assets: | ||||||||||||
Fair value of plan assets, January 1 | $ | — | $ | — | $ | — | $ | — | ||||
Company contributions | 47 | 1 | 63 | 1 | ||||||||
Participants’ contributions | 15 | — | 19 | — | ||||||||
Benefits paid | (62 | ) | (1 | ) | (82 | ) | (1 | ) | ||||
Fair value of plan assets, December 31 | $ | — | $ | — | $ | — | $ | — | ||||
Funded status, December 31 | $ | (306 | ) | $ | (59 | ) | $ | (322 | ) | $ | (72 | ) |
Amounts recognized in the consolidated balance sheet under ASC 715: | ||||||||||||
Current liability | $ | (33 | ) | $ | (2 | ) | $ | (39 | ) | $ | (2 | ) |
Non-current liability | (273 | ) | (57 | ) | (283 | ) | (70 | ) | ||||
$ | (306 | ) | $ | (59 | ) | $ | (322 | ) | $ | (72 | ) | |
Amounts recognized in accumulated other comprehensive income under ASC 715 (pre-tax): | ||||||||||||
Net actuarial loss (gain) | $ | 44 | $ | 23 | $ | 31 | $ | 11 | ||||
Prior service credit | (22 | ) | (5 | ) | (35 | ) | — | |||||
$ | 22 | $ | 18 | $ | (4 | ) | $ | 11 |
In millions | U.S. Plans | Non- U.S. Plans | ||||
Current year actuarial gain | $ | 18 | $ | 14 | ||
Amortization of actuarial (loss) gain | (5 | ) | (1 | ) | ||
Current year prior service credit | — | (7 | ) | |||
Amortization of prior service credit | 13 | 1 | ||||
$ | 26 | $ | 7 |
In millions | Benefit Payments | Subsidy Receipts | Benefit Payments | ||||||
U.S. Plans | U.S. Plans | Non- U.S. Plans | |||||||
2015 | $ | 35 | $ | 2 | $ | 2 | |||
2016 | 31 | 2 | 2 | ||||||
2017 | 30 | 2 | 2 | ||||||
2018 | 28 | 2 | 3 | ||||||
2019 | 27 | 2 | 3 | ||||||
2020 – 2024 | 112 | 8 | 24 |
Options (a,b) | Weighted Average Exercise Price | Weighted Average Remaining Life (years) | Aggregate Intrinsic Value (thousands) | ||||||
Outstanding at December 31, 2011 | 15,556,786 | $38.13 | 1.55 | $— | |||||
Granted | 2,513 | 35.94 | |||||||
Exercised | (3,200,642 | ) | 33.62 | ||||||
Expired | (3,222,597 | ) | 40.71 | ||||||
Outstanding at December 31, 2012 | 9,136,060 | 38.79 | 1.15 | 1,077 | |||||
Granted | 4,744 | 48.11 | |||||||
Exercised | (7,317,825 | ) | 38.57 | ||||||
Expired | (70,190 | ) | 37.15 | ||||||
Outstanding at December 31, 2013 | 1,752,789 | 39.80 | 0.67 | 16,175 | |||||
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 |
(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, 2014 | |
Expected volatility | 19.01%-55.33% |
Risk-free interest rate | 0.13% - 0.78% |
Share/Units | Weighted Average Grant Date Fair Value | ||||
Outstanding at December 31, 2011 | 8,060,059 | $22.83 | |||
Granted | 3,641,911 | 31.57 | |||
Shares issued | (2,871,367 | ) | 16.83 | ||
Forfeited | (169,748 | ) | 28.89 | ||
Outstanding at December 31, 2012 | 8,660,855 | 28.37 | |||
Granted | 3,148,445 | 40.76 | |||
Shares issued | (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 (a) | (4,025,111 | ) | 37.18 | ||
Forfeited | (499,107 | ) | 43.10 | ||
Outstanding at December 31, 2014 | 7,275,934 | $34.98 |
(a) | Includes 488,676 units related to retirements or terminations that are held for payout until the end of the performance period. |
Shares | Weighted Average Grant Date Fair Value | ||||
Outstanding at December 31, 2011 | 128,917 | $27.86 | |||
Granted | 88,715 | 31.91 | |||
Shares issued | (61,083 | ) | 27.13 | ||
Forfeited | (5,000 | ) | 28.91 | ||
Outstanding at December 31, 2012 | 151,549 | 30.49 | |||
Granted | 67,100 | 44.41 | |||
Shares issued | (88,775 | ) | 32.30 | ||
Forfeited | (17,500 | ) | 37.75 | ||
Outstanding at December 31, 2013 | 112,374 | 36.24 | |||
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 |
In millions | 2014 | 2013 | 2012 | ||||||
Total stock-based compensation expense (included in selling and administrative expense) | $ | 118 | $ | 137 | $ | 116 | |||
Income tax benefits related to stock-based compensation | 92 | 74 | 48 |
In millions | 2014 | 2013 | |||||
Current assets | $ | 458 | $ | 595 | |||
Noncurrent assets | 1,223 | 2,124 | |||||
Current liabilities | 899 | 560 | |||||
Noncurrent liabilities | 742 | 1,335 | |||||
Noncontrolling interests | 15 | 63 |
In millions | 2014 | 2013 | 2012 | ||||||||
Net sales | $ | 2,138 | $ | 1,897 | $ | 1,972 | |||||
Gross profit | 772 | 562 | 678 | ||||||||
Income from continuing operations | (387 | ) | (76 | ) | 140 | ||||||
Net income attributable to Ilim | (360 | ) | (71 | ) | 131 |
In millions | 2014 | 2013 | 2012 | ||||||||
Industrial Packaging | $ | 14,944 | $ | 14,810 | $ | 13,280 | |||||
Printing Papers | 5,720 | 6,205 | 6,230 | ||||||||
Consumer Packaging | 3,403 | 3,435 | 3,170 | ||||||||
Corporate and Intersegment Sales | (450 | ) | (967 | ) | (828 | ) | |||||
Net Sales | $ | 23,617 | $ | 23,483 | $ | 21,852 |
In millions | 2014 | 2013 | 2012 | ||||||||
Industrial Packaging | $ | 1,896 | $ | 1,801 | $ | 1,066 | |||||
Printing Papers | (16 | ) | 271 | 599 | |||||||
Consumer Packaging | 178 | 161 | 268 | ||||||||
Operating Profit | 2,058 | 2,233 | 1,933 | ||||||||
Interest expense, net | (601 | ) | (612 | ) | (671 | ) | |||||
Noncontrolling interests / equity earnings adjustment (a) | (2 | ) | 1 | — | |||||||
Corporate items, net | (51 | ) | (61 | ) | (87 | ) | |||||
Restructuring and other charges | (282 | ) | (10 | ) | (51 | ) | |||||
Net gains (losses) on sales and impairments of businesses | (38 | ) | — | 2 | |||||||
Non-operating pension expense | (212 | ) | (323 | ) | (159 | ) | |||||
Earnings (Loss) From Continuing Operations Before Income Taxes and Equity Earnings | $ | 872 | $ | 1,228 | $ | 967 |
In millions | 2014 | 2013 | 2012 | ||||||||
Industrial Packaging | $ | 7 | $ | (2 | ) | $ | 14 | ||||
Printing Papers | 554 | 118 | — | ||||||||
Consumer Packaging | 8 | 45 | — | ||||||||
Corporate | 277 | (5 | ) | 51 | |||||||
Restructuring and Other Charges | $ | 846 | $ | 156 | $ | 65 |
In millions | 2014 | 2013 | |||||
Industrial Packaging | $ | 14,852 | $ | 15,083 | |||
Printing Papers | 5,393 | 6,574 | |||||
Consumer Packaging | 3,249 | 3,222 | |||||
Distribution (b) | — | 1,186 | |||||
Corporate and other (c) | 5,190 | 5,463 | |||||
Assets | $ | 28,684 | $ | 31,528 |
In millions | 2014 | 2013 | 2012 | ||||||||
Industrial Packaging | $ | 754 | $ | 629 | $ | 565 | |||||
Printing Papers | 318 | 294 | 449 | ||||||||
Consumer Packaging | 233 | 208 | 296 | ||||||||
Distribution (b) | — | 9 | 10 | ||||||||
Subtotal | 1,305 | 1,140 | 1,320 | ||||||||
Corporate and other (c) | 61 | 58 | 63 | ||||||||
Total | $ | 1,366 | $ | 1,198 | $ | 1,383 |
In millions | 2014 | 2013 | 2012 | ||||||||
Industrial Packaging | $ | 775 | $ | 805 | $ | 755 | |||||
Printing Papers | 367 | 446 | 450 | ||||||||
Consumer Packaging | 223 | 206 | 196 | ||||||||
Corporate | 41 | 74 | 72 | ||||||||
Depreciation and Amortization | $ | 1,406 | $ | 1,531 | $ | 1,473 |
In millions | 2014 | 2013 | 2012 | ||||||||
Industrial Packaging | $ | 14,837 | $ | 14,729 | $ | 13,223 | |||||
Printing Papers | 5,360 | 5,443 | 5,483 | ||||||||
Consumer Packaging | 3,307 | 3,311 | 3,146 | ||||||||
Other | 113 | — | — | ||||||||
Net Sales | $ | 23,617 | $ | 23,483 | $ | 21,852 |
In millions | 2014 | 2013 | 2012 | ||||||||
United States (f) | $ | 16,645 | $ | 16,371 | $ | 15,689 | |||||
EMEA | 3,273 | 3,250 | 2,886 | ||||||||
Pacific Rim and Asia | 1,951 | 2,114 | 1,816 | ||||||||
Americas, other than U.S. | 1,748 | 1,748 | 1,461 | ||||||||
Net Sales | $ | 23,617 | $ | 23,483 | $ | 21,852 |
In millions | 2014 | 2013 | |||||
United States | $ | 9,476 | $ | 10,056 | |||
EMEA | 926 | 1,126 | |||||
Pacific Rim and Asia | 897 | 946 | |||||
Americas, other than U.S. | 1,553 | 1,772 | |||||
Corporate | 383 | 329 | |||||
Long-Lived Assets | $ | 13,235 | $ | 14,229 |
(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) | The xpedx business, which historically represented the Company's Distribution reportable segment, was spun off July 1, 2014 and the related assets of this business were adjusted off the consolidated balance sheet. |
(c) | Includes corporate assets and assets of businesses held for sale. |
(d) | Excludes accelerated depreciation related to closure of mills. |
(e) | Net sales are attributed to countries based on the location of the seller. |
(f) | Export sales to unaffiliated customers were $2.3 billion in 2014, $2.4 billion in 2013 and $2.2 billion in 2012. |
(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 | |||||||||||||||
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 | ) | (b) | 152 | (e) | 552 | (g) | 307 | (i) | 872 | (b,e,g,i) | |||||||||
Gain (loss) from discontinued operations | (7 | ) | (c) | (13 | ) | (f) | 16 | (h) | (9 | ) | (j) | (13 | ) | (c,f,h,j) | ||||||
Net earnings (loss) attributable to International Paper Company | (95 | ) | (b,c,d) | 161 | (e,f) | 355 | (g,h) | 134 | (i,j,k) | 555 | (b-k) | |||||||||
Basic earnings (loss) per share attributable to International Paper Company common shareholders: | ||||||||||||||||||||
Earnings (loss) from continuing operations | $ | (0.20 | ) | (b) | $ | 0.40 | (e) | $ | 0.80 | (g) | $ | 0.34 | (i) | $ | 1.33 | (b,e,g,i) | ||||
Gain (loss) from discontinued operations | (0.01 | ) | (c) | (0.03 | ) | (f) | 0.04 | (h) | (0.02 | ) | (j) | (0.03 | ) | (c,f,h,j) | ||||||
Net earnings (loss) | (0.21 | ) | (b,c,d) | 0.37 | (e,f) | 0.84 | (g,h) | 0.32 | (i,j,k) | 1.30 | (b-k) | |||||||||
Diluted earnings (loss) per share attributable to International Paper Company common shareholders: | ||||||||||||||||||||
Earnings (loss) from continuing operations | (0.20 | ) | (b) | 0.40 | (e) | 0.79 | (g) | 0.34 | (i) | 1.31 | (b,e,g,i) | |||||||||
Gain (loss) from discontinued operations | (0.01 | ) | (c) | (0.03 | ) | (f) | 0.04 | (h) | (0.02 | ) | (j) | (0.02 | ) | (c,f,h,j) | ||||||
Net earnings (loss) | (0.21 | ) | (b,c,d) | 0.37 | (e,f) | 0.83 | (g,h) | 0.32 | (i,j,k) | 1.29 | (b-k) | |||||||||
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 | |||||||||||||||
2013 | ||||||||||||||||||||
Net sales | $ | 5,716 | $ | 5,944 | $ | 5,975 | $ | 5,848 | $ | 23,483 | ||||||||||
Gross margin (a) | 1,709 | 1,757 | 1,927 | 1,808 | 7,201 | |||||||||||||||
Earnings (loss) from continuing operations before income taxes and equity earnings | 227 | (l) | 359 | (o) | 403 | (q) | 239 | (t) | 1,228 | (l,o,q,t) | ||||||||||
Gain (loss) from discontinued operations | 28 | (m) | 27 | (p) | (5 | ) | (r) | (359 | ) | (u) | (309 | ) | (m,p,r,u) | |||||||
Net earnings (loss) attributable to International Paper Company | 318 | (l,m,n) | 259 | (o,p) | 382 | (q,r,s) | 436 | (t,u,v,w) | 1,395 | (l-w) | ||||||||||
Basic earnings (loss) per share attributable to International Paper Company common shareholders: | ||||||||||||||||||||
Earnings (loss) from continuing operations | $ | 0.66 | (l) | $ | 0.52 | (o) | $ | 0.87 | (q) | $ | 1.80 | (t) | $ | 3.85 | (l,o,q,t) | |||||
Gain (loss) from discontinued operations | 0.06 | (m) | 0.06 | (p) | (0.01 | ) | (r) | (0.81 | ) | (u) | (0.70 | ) | (m,p,r,u) | |||||||
Net earnings (loss) | 0.72 | (l,m,n) | 0.58 | (o,p) | 0.86 | (q,r,s) | 0.99 | (t,u,v,w) | 3.15 | (l-w) | ||||||||||
Diluted earnings (loss) per share attributable to International Paper Company common shareholders: | ||||||||||||||||||||
Earnings (loss) from continuing operations | 0.65 | (l) | 0.52 | (o) | 0.86 | (q) | 1.78 | (t) | 3.80 | (l,o,q,t) | ||||||||||
Gain (loss) from discontinued operations | 0.06 | (m) | 0.05 | (p) | (0.01 | ) | (r) | (0.80 | ) | (u) | (0.69 | ) | (m,p,r,u) | |||||||
Net earnings (loss) | 0.71 | (l,m,n) | 0.57 | (o,p) | 0.85 | (q,r,s) | 0.98 | (t,u,v,w) | 3.11 | (l-w) | ||||||||||
Dividends per share of common stock | 0.3000 | 0.3000 | 0.3000 | 0.3500 | 1.2500 | |||||||||||||||
Common stock prices | ||||||||||||||||||||
High | $ | 47.25 | $ | 49.10 | $ | 50.33 | $ | 49.52 | $ | 50.33 | ||||||||||
Low | 39.47 | 42.36 | 43.95 | 42.92 | 39.47 |
(a) | Gross margin represents net sales less cost of products sold, excluding depreciation, amortization and cost of timber harvested. |
(b) | Includes a pre-tax charge of $12 million ($7 million after taxes) for integration costs associated with the acquisition of Temple-Inland, a pre-tax charge of $495 million ($302 million after taxes) for costs associated with the shutdown of our Courtland mill, and a pre-tax charge of $4 million ($3 million after taxes) for other items. |
(c) | Includes the operating earnings of the xpedx business, a pre-tax charge of $16 million ($10 million after taxes) for costs associated with the spin-off of the xpedx operations, a pre-tax charge of $2 million ($0 million after taxes) for costs associated with the restructuring of our xpedx operations and a charge of $2 million (before and after taxes) for costs associated with the Building Products divestiture. |
(d) | Includes a tax expense of $10 million associated with a state legislative change and a tax benefit of $1 million for other items. |
(e) | Includes a pre-tax charge of $2 million ($1 million after taxes) for integration costs associated with the acquisition of Temple-Inland, a pre-tax charge of $262 million ($160 million after taxes) for debt extinguishment costs, a pre-tax charge of $49 million ($30 million after taxes) for costs associated with the shutdown of our Courtland mill, a pre-tax gain of $7 million ($5 million after taxes) associated with our Brazil Packaging business and net charges of $3 million (before and after taxes) for other items. |
(f) | Includes the operating earnings of the xpedx business, a pre-tax charge of $18 million ($20 million after taxes) for costs associated with the spin-off of our xpedx operations, and a gain of $1 million (before and after taxes) related to the xpedx restructuring. |
(g) | Includes a pre-tax charge of $5 million ($3 million after taxes) for a refund of previously claimed state tax credits, a gain of $20 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 $32 million ($17 million after taxes) for costs associated with a foreign tax amnesty program, 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 charge of $1 million (before and after taxes) for integration costs associated with the acquisition of Temple-Inland, 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. |
(h) | 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. |
(i) | Includes a charge of $100 million (before and after taxes) for a goodwill impairment charge related to our Asian Industrial Packaging business, a charge of $1 million (before and after taxes) for integration costs associated with the acquisition of Temple-Inland, 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, 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, a pre-tax gain of $9 million ($5 million after taxes) related to the sale of an investment, and a net pre-tax charge of $5 million ($3 million after taxes) for other items. |
(j) | Includes a pre-tax loss of $14 million ($9 million after taxes) related to the Building Products divestiture. |
(k) | Includes a tax benefit of $90 million associated with internal restructuring. |
(l) | Includes a pre-tax charge of $12 million ($8 million after taxes) for integration costs associated with the acquisition of Temple-Inland, a pre-tax charge of $44 million ($27 million after taxes) for costs associated with the permanent shutdown of a paper machine at our Augusta mill, a pre-tax charge of $6 million ($4 million after taxes) for debt extinguishment costs, interest income of $6 million ($4 million after taxes) related to the closing of a U.S. federal income tax audit, and pre-tax charges of $2 million ($1 million after taxes) for other items. |
(m) | Includes the operating earnings of the xpedx and Building Products businesses, a pre-tax charge of $7 million ($4 million after taxes) for costs associated with the restructuring of our xpedx operations, and a pretax charge of $4 million ($3 million after taxes) for costs associated with the Building Products divestiture. |
(n) | Includes a tax benefit of $93 million associated with the closing of a U.S. federal income tax audit and a net tax expense of $2 million related to internal restructurings. In addition, the first quarter tax rate includes a benefit of approximately $35 million related to the enactment into law of The American Taxpayer Relief Act of 2012 in January 2013. |
(o) | Includes a pre-tax charge of $6 million ($4 million after taxes) for an environmental reserve related to the Company's property in Cass Lake, Minnesota, a pre-tax charge of $14 million ($8 million after taxes) for integration costs associated with the acquisition of Temple-Inland, a pre-tax charge of $9 million ($5 million after taxes) to adjust the value of two Company airplanes to market value, a pre-tax gain of $30 million ($19 million after taxes) for insurance reimbursements related to the 2012 Guaranty Bank legal settlement, a pre-tax charge of $3 million ($2 million after taxes) for debt extinguishment costs, a gain of $13 million (before and after taxes) related to a bargain purchase adjustment on the first-quarter 2013 acquisition of a majority share of our operations in Turkey, and charges of $3 million (before and after taxes) for other items. |
(p) | Includes the operating earnings of the xpedx and Building Products businesses, a pre-tax charge of $17 million ($10 million after taxes) for costs associated with the restructuring of our xpedx operations, a pre-tax charge of $3 million ($2 million after taxes) for costs associated with the spin-off of the xpedx operations, and a pre-tax charge of $13 million ($8 million after taxes) for costs associated with the divestiture of Building Products. |
(q) | Includes a pre-tax charge of $24 million ($15 million after taxes) for integration costs associated with the acquisition of Temple-Inland, a pre-tax charge of $51 million ($31 million after taxes) for costs associated with the shutdown of our Courtland mill, a pre-tax charge of $15 million ($9 million after taxes) for debt extinguishment costs, a pre-tax gain of $9 million ($6 million after taxes) associated with the sale of the Bellevue box plant facility which was closed in 2010, a pre-tax charge of $1 million ($0 million after taxes) for costs associated with the divestiture of three containerboard mills in 2012 and charges of $2 million (before and after taxes) for other items. |
(r) | Includes the operating earnings of the xpedx business, a pre-tax charge of $6 million ($4 million after taxes) for costs associated with the restructuring of our xpedx operations, a pre-tax charge of $11 million ($7 million after taxes) for costs associated with the spin-off of the xpedx operations, and a pre-tax charge of $24 million ($15 million after taxes) for costs associated with the Building Products divestiture. |
(s) | Includes a tax benefit of $31 million for an income tax reserve release. In addition, the third quarter tax rate includes a $30 million benefit related to the adjustment of the tax basis in certain of the Company's fixed assets. |
(t) | Includes a pre-tax charge of $12 million ($7 million after taxes) for integration costs associated with the acquisition of Temple-Inland, a pre-tax charge of $67 million ($41 million after taxes) for costs associated with the 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, a pre-tax charge of $127 million ($122 million after taxes) for the impairment of goodwill and a trade name intangible asset of the Company's India Papers business, a pre- tax charge of $2 million ($1 million after taxes) for an adjustment associated with the Company's divestiture of the Shorewood operations, and a net pre-tax gain of $2 million ($0 million after taxes) for other items. |
(u) | Includes the operating earnings of the xpedx business, a pre-tax charge of $8 million ($5 million after taxes) for costs associated with the spin-off of the xpedx operations, a pre-tax charge of $400 million ($366 million after taxes) for the impairment of goodwill in the Company's xpedx business, a net pre-tax loss of $2 million ($1 million after taxes) for costs associated with the restructuring of the xpedx operations, and a pre-tax gain of $18 million ($6 million after taxes) related to the Building Products divestiture. |
(v) | 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. |
(w) | 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. |
• | 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. | 97 |
(3.1 | ) | Restated Certificate of Incorporation of International Paper Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K dated May 13, 2013). |
(3.2 | ) | By-laws of International Paper Company, as amended through May 17, 2013 (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K dated May 13, 2013). |
(4.1 | ) | Indenture, dated as of April 12, 1999, between International Paper and The Bank of New York, as Trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K dated June 29, 2000). |
(4.2 | ) | Supplemental Indenture (including the form of Notes), dated as of June 4, 2008, between International Paper Company and The Bank of New York, as Trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K dated June 4, 2008). |
(4.3 | ) | Supplemental Indenture (including the form of Notes), dated as of May 11, 2009, between International Paper Company and The Bank of New York Mellon, as trustee (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K dated May 11, 2009). |
(4.4 | ) | Supplemental Indenture (including the form of Notes), dated as of August 10, 2009, between International Paper Company and The Bank of New York Mellon, as trustee (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K dated August 10, 2009). |
(4.5 | ) | Supplemental Indenture (including the form of Notes), dated as of December 7, 2009, between International Paper Company and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K dated December 7, 2009). |
(4.6 | ) | Supplemental Indenture (including the form of Notes), dated as of November 16, 2011, between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K dated November 16, 2011). |
(4.7 | ) | 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 | ) | 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 | ) | 2014 Management Incentive Plan (incorporated by reference to Exhibit 10.3 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013). + |
(10.3 | ) | 2015 Management Incentive Plan. * + |
(10.4 | ) | Amended and Restated 2009 Executive Management Incentive Plan, including 2015 Exhibits thereto. * + |
(10.5 | ) | 2014 Exhibits to the Amended and Restated 2009 Executive Management Incentive Plan (incorporated by reference to Exhibit 10.6 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013). + |
(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. (incorporated by reference to Exhibit 10.11 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013). + |
(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 | ) | IP Debt Security, dated December 7, 2006, issued by International Paper Company to Basswood Forests LLC (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K dated December 13, 2006). |
(10.29 | ) | IP Hickory Note, dated December 7, 2006, issued by International Paper Company to Hickory Forests LLC (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K dated December 13, 2006). |
(10.30 | ) | Credit Agreement, dated as of February 13, 2012, by and among the Company, UBS AG, Stamford Branch, as administrative agent; BNP Paribas Securities Corp., as syndication agent; Deutsche Bank Securities Inc., HSBC Securities (USA) Inc. and The Royal Bank of Scotland PLC, as co-documentation agents; UBS Securities LLC, BNP Paribas Securities Corp., CoBank, ACB, Deutsche Bank Securities Inc., HSBC Securities (USA) Inc. and RBS Securities Inc., as joint lead arrangers; and the lenders party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated February 13, 2012). |
(10.31 | ) | Loan Agreement dated December 3, 2007, by and among TIN Land Financing, LLC, Citibank, N.A., Citicorp North America, Inc., as Agent, and the other Lenders named therein (incorporated by reference to Exhibit 10.1 to Temple-Inland's Current Report on Form 8-K filed with the Commission on December 4, 2007). |
(10.32 | ) | Amendment No. 1 dated August 11, 2011 to Loan Agreement dated December 3, 2007, by and among TIN Land Financing, LLC, Citibank, N.A., Citicorp North America, Inc., as Agent, and the other Lenders named therein (incorporated by reference to Exhibit 10.1 to Temple-Inland's Quarterly Report on Form 10-Q for the quarter ended October 1, 2011, and filed with the Commission on November 7, 2011). |
(10.33 | ) | Loan Agreement dated December 3, 2007, by and among TIN Timber Financing, LLC, Citibank, N.A., Citicorp North America, Inc., as Agent, and the other Lenders named therein (incorporated by reference to Exhibit 10.2 to Temple-Inland's Current Report on Form 8-K filed with the Commission on December 4, 2007). |
(10.34 | ) | Amendment No. 1 dated August 11, 2011 to Loan Agreement dated December 3, 2007, by and among TIN Timber Financing, LLC, Citibank, N.A., Citicorp North America, Inc., as Agent, and the other Lenders named therein (incorporated by reference to Exhibit 10.2 to Temple-Inland's Quarterly Report on Form 10-Q for the quarter ended October 1, 2011, and filed with the Commission on November 7, 2011). |
(10.35 | ) | Form of Timber Note Receivable (incorporated by reference to Exhibit 10.1 to Temple-Inland's Quarterly Report on Form 10-Q for the quarter ended July 3, 2010, and filed with the Commission on August 9, 2010).The Company agrees to furnish supplementally a copy of any omitted schedule or exhibit to the staff of the Securities and Exchange Commission upon request. |
(10.36 | ) | Form of Letter of Credit (incorporated by reference to Exhibit 10.2 to Temple-Inland's Quarterly Report on Form 10-Q for the quarter ended July 3, 2010, and filed with the Commission on August 9, 2010). |
(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, 2014). * |
(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.* |
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(101.SCH) | XBRL Taxonomy Extension Schema * |
(101.CAL) | XBRL Taxonomy Extension Calculation Linkbase * |
(101.DEF) | XBRL Taxonomy Extension Definition Linkbase * |
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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 |
For the Year Ended December 31, 2012 | |||||||||||||||||
Balance at Beginning of Period | Additions Charged to Earnings | Additions Charged to Other Accounts | Deductions from Reserves | Balance at End of Period | |||||||||||||
Description | |||||||||||||||||
Reserves Applied Against Specific Assets Shown on Balance Sheet: | |||||||||||||||||
Doubtful accounts – current | $ | 126 | $ | 11 | $ | — | (18)(a) | $ | 119 | ||||||||
Restructuring reserves | 8 | 17 | — | (8)(b) | 17 |
(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 26, 2015 | |||
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 26, 2015 | ||
Mark S. Sutton | ||||
/S/ DAVID J. BRONCZEK | Director | February 26, 2015 | ||
David J. Bronczek | ||||
/S/ AHMET C. DORDUNCU | Director | February 26, 2015 | ||
Ahmet C. Dorduncu | ||||
/S/ ILENE S. GORDON | Director | February 26, 2015 | ||
Ilene S. Gordon | ||||
/S/ JAY L. JOHNSON | Director | February 26, 2015 | ||
Jay L. Johnson | ||||
/S/ STACEY J. MOBLEY | Director | February 26, 2015 | ||
Stacey J. Mobley | ||||
/S/ JOAN E. SPERO | Director | February 26, 2015 | ||
Joan E. Spero | ||||
/S/ JOHN L. TOWNSEND III | Director | February 26, 2015 | ||
John L. Townsend III | ||||
/S/ WILLIAM G. WALTER | Director | February 26, 2015 | ||
William G. Walter | ||||
/S/ J. STEVEN WHISLER | Director | February 26, 2015 | ||
J. Steven Whisler | ||||
/S/ RAY G. YOUNG | Director | February 26, 2015 | ||
Ray G. Young | ||||
/S/ CAROL L. ROBERTS | Senior Vice President and Chief Financial Officer | February 26, 2015 | ||
Carol L. Roberts | ||||
/S/ TERRI L. HERRINGTON | Vice President – Finance and Controller | February 26, 2015 | ||
Terri L. Herrington |
PRINTING PAPERS | Nova Campina, São Paulo, Brazil | Griffin, Georgia | ||
Paulinia, São Paulo, Brazil | Kennesaw, Georgia leased | |||
Uncoated Papers and Pulp | Yanzhou City, China | Lithonia, Georgia | ||
U.S.: | Veracruz, Mexico | Savannah, Georgia | ||
Courtland, Alabama (1) | Kenitra, Morocco | Stone Mountain, Georgia | ||
Selma, Alabama (Riverdale Mill) | Edirne, Turkey | Tucker, Georgia | ||
Cantonment, Florida (Pensacola Mill) | Corum, Turkey | Aurora, Illinois (2 locations) | ||
Ticonderoga, New York | Bedford Park, Illinois (2 locations) 1 leased | |||
Riegelwood, North Carolina | Corrugated Container | Belleville, Illinois | ||
Eastover, South Carolina | U.S.: | Carroll Stream, Illinois | ||
Georgetown, South Carolina | Bay Minette, Alabama | Chicago, Illinois | ||
Sumter, South Carolina | Decatur, Alabama | Des Plaines, Illinois | ||
Franklin, Virginia | Dothan, Alabama leased | Lincoln, Illinois | ||
Huntsville, Alabama | Montgomery, Illinois | |||
International: | Bentonville, Arkansas | Northlake, Illinois | ||
Luiz Antônio, São Paulo, Brazil | Conway, Arkansas | Rockford, Illinois | ||
Mogi Guacu, São Paulo, Brazil | Fort Smith, Arkansas (2 locations) | Butler, Indiana | ||
Três Lagoas, Mato Grosso do Sul, Brazil | Russellville, Arkansas (2 locations) | Crawfordsville, Indiana | ||
Saillat, France | Tolleson, Arizona | Fort Wayne, Indiana | ||
Kadiam, India | Yuma, Arizona | Hammond, Indiana | ||
Rajahmundry, India | Anaheim, California | Indianapolis, Indiana (2 locations) | ||
Kwidzyn, Poland | Bell, California | Saint Anthony, Indiana | ||
Svetogorsk, Russia | Buena Park, California leased | Tipton, Indiana | ||
Camarillo, California | Cedar Rapids, Iowa | |||
INDUSTRIAL PACKAGING | Carson, California | Waterloo, Iowa | ||
Cerritos, California leased | Garden City, Kansas | |||
Containerboard | Compton, California | Bowling Green, Kentucky | ||
U.S.: | Elk Grove, California | Lexington, Kentucky | ||
Pine Hill, Alabama | Exeter, California | Louisville, Kentucky | ||
Prattville, Alabama | Gilroy, California (2 locations) 1 leased | Walton, Kentucky | ||
Cantonment, Florida (Pensacola Mill) | Los Angeles, California leased | Lafayette, Louisiana | ||
Rome, Georgia | Modesto, California | Bogalusa, Louisiana | ||
Savannah, Georgia | Ontario, California | Shreveport, Louisiana | ||
Cayuga, Indiana | Salinas, California | Springhill, Louisiana | ||
Cedar Rapids, Iowa | Sanger, California | Auburn, Maine | ||
Henderson, Kentucky | San Leandro, California leased | Three Rivers, Michigan | ||
Maysville, Kentucky | Santa Fe Springs, California (2 locations) 1 leased | Arden Hills, Minnesota | ||
Bogalusa, Louisiana | Stockton, California | Austin, Minnesota | ||
Campti, Louisiana | Tracy, California | Fridley, Minnesota | ||
Mansfield, Louisiana | Golden, Colorado | Minneapolis, Minnesota leased | ||
Vicksburg, Mississippi | Wheat Ridge, Colorado | Shakopee, Minnesota | ||
Valliant, Oklahoma | Putnam, Connecticut | White Bear Lake, Minnesota | ||
Springfield, Oregon | Orlando, Florida | Houston, Mississippi | ||
Orange, Texas | Plant City, Florida | Jackson, Mississippi | ||
Tampa, Florida leased | Magnolia, Mississippi leased | |||
International: | Columbus, Georgia | Olive Branch, Mississippi | ||
Franco da Rocha, São Paulo, Brazil | Forest Park, Georgia | Fenton, Missouri |
Kansas City, Missouri | Laurens, South Carolina | Wuhan, China | ||
Maryland Heights, Missouri | Lexington, South Carolina | Arles, France | ||
North Kansas City, Missouri leased | Ashland City, Tennessee leased | Chalon-sur-Saone, France | ||
St. Joseph, Missouri | Cleveland, Tennessee | Creil, France | ||
St. Louis, Missouri | Elizabethton, Tennessee leased | LePuy, France (Espaly Box Plant) | ||
Omaha, Nebraska | Morristown, Tennessee | Mortagne, France | ||
Barrington, New Jersey | Murfreesboro, Tennessee | Guadeloupe, French West Indies | ||
Bellmawr, New Jersey | Amarillo, Texas | Batam, Indonesia | ||
Milltown, New Jersey | Carrollton, Texas (2 locations) | Bellusco, Italy | ||
Spotswood, New Jersey | Edinburg, Texas (2 locations) (7) | Catania, Italy | ||
Thorofare, New Jersey | El Paso, Texas | Pomezia, Italy | ||
Binghamton, New York | Ft. Worth, Texas leased | San Felice, Italy | ||
Buffalo, New York | Grand Prairie, Texas | Kuala Lumpur, Malaysia | ||
Rochester, New York | Hidalgo, Texas | Juhor, Malaysia | ||
Scotia, New York | McAllen, Texas | Apodaco (Monterrey), Mexico leased | ||
Utica, New York | San Antonio, Texas (2 locations) | Ixtaczoquitlan, Mexico | ||
Charlotte, North Carolina (2 locations) | Sealy, Texas | Juarez, Mexico leased | ||
1 leased | Waxahachie, Texas | Los Mochis, Mexico | ||
Lumberton, North Carolina | Lynchburg, Virginia | Puebla, Mexico leased | ||
Manson, North Carolina | Petersburg, Virginia | Reynosa, Mexico | ||
Newton, North Carolina | Richmond, Virginia | San Jose Iturbide, Mexico | ||
Statesville, North Carolina | Moses Lake, Washington | Santa Catarina, Mexico | ||
Byesville, Ohio | Olympia, Washington | Silao, Mexico | ||
Delaware, Ohio | Yakima, Washington | Villa Nicolas Romero, Mexico | ||
Eaton, Ohio | Fond du Lac, Wisconsin | Zapopan, Mexico | ||
Kenton, Ohio | Manitowoc, Wisconsin | Agadir, Morocco | ||
Madison, Ohio | Casablanca, Morocco | |||
Marion, Ohio | International: | Kenitra, Morocco | ||
Marysville, Ohio leased | Manaus, Amazonas, Brazil | Singapore, Singapore | ||
Middletown, Ohio | Paulinia, São Paulo, Brazil | Almeria, Spain | ||
Mt. Vernon, Ohio | Rio Verde, Goias, Brazil | Barcelona, Spain | ||
Newark, Ohio | Suzano, São Paulo, Brazil | Bilbao, Spain | ||
Streetsboro, Ohio | Las Palmas, Canary Islands | Gandia, Spain | ||
Wooster, Ohio | Tenerife, Canary Islands | Madrid, Spain | ||
Oklahoma City, Oklahoma | Rancagua, Chile | Valladolid, Spain (2) | ||
Beaverton, Oregon (2 locations) | Baoding, China | Bangkok, Thailand | ||
Hillsboro, Oregon | Beijing, China (2 locations) (8) | Adana, Turkey | ||
Portland, Oregon | Chengdu, China | Bursa, Turkey | ||
Salem, Oregon leased | Dalian, China | Corlu, Turkey | ||
Biglerville, Pennsylvania | Dongguan, China | Corum, Turkey | ||
Eighty-four, Pennsylvania | Guangzhou, China (2 locations) | Gebze, Turkey | ||
Hazleton, Pennsylvania | Hohhot, China | Izmir, Turkey | ||
Kennett Square, Pennsylvania | Nanjing China | |||
Lancaster, Pennsylvania | Shanghai, China (2 locations) | Recycling | ||
Littlestown, Pennsylvania (4) | Shenyang, China | U.S.: | ||
Mount Carmel, Pennsylvania | Suzhou, China | Phoenix, Arizona leased | ||
Georgetown, South Carolina | Tianjin, China (2 locations) | Fremont, California leased |
Norwalk, California | Riegelwood, North Carolina | |||
West Sacramento, California | Hazelton, Pennsylvania (6) | |||
Denver, Colorado | (C & D Center) | |||
Itasca, Illinois | Prosperity, South Carolina | |||
Des Moines, Iowa | Texarkana, Texas | |||
Wichita, Kansas | ||||
Roseville, Minnesota | Foodservice | |||
Omaha, Nebraska leased | U.S.: | |||
Charlotte, North Carolina | Visalia, California | |||
Beaverton, Oregon | Shelbyville, Illinois | |||
Eugene, Oregon leased | Kenton, Ohio | |||
Memphis, Tennessee leased | ||||
Carrollton, Texas | International: | |||
Salt Lake City, Utah | Shanghai, China | |||
Richmond, Virginia | Beijing, China | |||
Kent, Washington | Bogota, Colombia | |||
Cheshire, England leased | ||||
International: | ||||
Monterrey, Mexico leased | DISTRIBUTION | |||
Xalapa, Veracruz, Mexico leased | ||||
IP Asia | ||||
Bags | International: | |||
U.S.: | China (8 locations) | |||
Buena Park, California | Malaysia | |||
Beaverton, Oregon | Taiwan | |||
Grand Prairie, Texas | Thailand | |||
Vietnam | ||||
CONSUMER PACKAGING | ||||
FOREST PRODUCTS | ||||
Coated Paperboard | ||||
Ontario, California leased (3) | Forest Resources | |||
(C & D Center) | International: | |||
Augusta, Georgia | Approximately 334,000 acres in Brazil | |||
Springhill, Louisiana (5) | ||||
(C & D Center) | ||||
Sturgis, Michigan (6) | ||||
(C & D Center) | ||||
Greensboro, North Carolina (6) | ||||
(C & D Center) | ||||
(1) Closed February 2014 | (5) Closed December 2014 | |||
(2) Closed March 2014 | (6) Sold October 2014 | |||
(3) Closed June 2014 | (7) 1 location closed February 2014 | |||
(4) Closed July 2014 | (8) 1 location sold December 2014 | |||
(in thousands of short tons) | U.S. | EMEA | Americas, other than U.S. | Asia | India | Total | |||||||||||
Industrial Packaging | |||||||||||||||||
Containerboard | 13,001 | 38 | 366 | — | — | 13,405 | |||||||||||
Printing Papers | |||||||||||||||||
Uncoated Freesheet | 1,771 | 1,150 | 1,135 | — | 256 | 4,312 | |||||||||||
Bristols | 169 | — | — | — | — | 169 | |||||||||||
Uncoated Papers and Bristols | 1,940 | 1,150 | 1,135 | — | 256 | 4,481 | |||||||||||
Dried Pulp | 1,307 | 328 | 140 | — | — | 1,775 | |||||||||||
Newsprint | — | 124 | — | — | — | 124 | |||||||||||
Total Printing Papers | 3,247 | 1,602 | 1,275 | — | 256 | 6,380 | |||||||||||
Consumer Packaging | |||||||||||||||||
Coated Paperboard | 1,566 | 352 | — | 1,413 | — | 3,331 |
Forest Resources | ||
We own, manage or have an interest in approximately 1.2 million acres of forestlands worldwide. These forestlands and associated acres are located in the following regions: | (M Acres) | |
Brazil | 334 | |
We have harvesting rights in: | ||
Russia | 882 | |
Poland | 3 | |
Total | 1,219 |
• | Executive Officer |
A. | Performance Objectives – Funding the Total MIP Award Pool |
Performance | Award % |
Greater than $3,200 MM and up to $3,800 MM | 0.1667% for each $1MM improvement greater than $3,200 MM up to $3,800 MM |
$3,200 MM | 100% |
From $2,400 MM to less than $3,200 MM | 0.0625% for each $1MM drop below $3,200 MM down to $2,400 MM |
Performance | Award % |
Greater than 11.2% and up to 14.6% | 2.941% for each 0.1% improvement greater than 11.2% up to 14.6% |
11.2% | 100% |
From 8.4% to less than 11.2% | 1.786% for each 0.1% drop below 11.2% down to 8.4% |
Ù | Performance Objective Rating |
B. | Approval by the Committee of the Total MIP Award Pool |
A. | Individual Award Recommendations |
B. | Payout of Individual Awards |
C. | Impact of Temporary Layoff for Salaried Employees |
• | Layoff of three months or less followed by return to active employment for Company: The Participant will be eligible for his or her Calculated Award |
• | Layoff of three months or less followed by termination of employment: The Participant will be eligible for his or her Calculated Award payable under the terms of the Plan. The Participant’s eligibility for an award will be determined under Section VII(E) and (F). The award payable, if any, will not be reduced for the period of temporary layoff. |
D. | Impact of Leave of Absence for Salaried Employees |
E. | Cancellation of Award Upon Certain Events Prior to Payout |
• | Voluntary resignation before retirement eligibility; |
• | Termination for Cause; |
• | Violation of a Non-Compete, Non-Solicitation or Confidentiality Agreement, as applicable; |
• | Failure by the participant in the Company’s Unfunded Supplemental Retirement Plan for Senior Managers (“SERP”) to submit notice of retirement one year in advance of the effective date of his or her retirement, except in the event of death, disability or waiver by the Management Development and Compensation Committee; and |
• | Misconduct. The determination of whether a Participant has engaged in Misconduct shall be made by the Senior Vice President, Human Resources, or by the Management Development and Compensation Committee with regard to employees of the Company in a position designated as Senior Vice President or above, or by the Board of Directors for a determination with regard to the Chief Executive Officer. |
F. | Proration Upon Certain Events |
TERMINATION SCENARIO | DATE OF TERMINATION | AMOUNT TO BE PAID | TIME OF PAYMENT |
For All MIP-eligible Employees other than Senior Vice Presidents & CEO | |||
DURING PLAN YEAR | |||
• Death • Long-Term Disability • Eligible for Termination Allowance under Company Salaried Employee Severance Plan* (see Note) • Divestiture of Participant’s Business | 1/1 through 12/31 | Pro rata Target Award | As soon as practical following termination |
• Retirement eligible | 1/1 through 11/30 | Pro rata Target Award | As soon as practical following termination |
Month of December | Full Calculated Award based on Actual performance | At time of normal MIP payout | |
AFTER PLAN YEAR BUT BEFORE MIP PAYOUT |
• Death • Long-Term Disability • Eligible for Termination Allowance under Company Salaried Employee Severance Plan* (see Note) • Divestiture of Participant’s Business • Retirement eligible | 1/1 (of year following plan year) through MIP payout date | Full prior year Calculated Award based on Actual performance AND Pro rata Target Award for year of termination | Calculated Award is paid at time of normal MIP payout AND Pro rata Target Award is paid as soon as practical following termination |
For Senior Vice Presidents and CEO | |||
• Death • Long-Term Disability | 1/1 through 12/31 | Pro rata Target Award | As soon as practical following termination |
• Retirement eligible • Eligible for Termination Allowance under Company Salaried Employee Severance Plan* (see Note) • Divestiture of Participant’s Business | 1/1 through 12/31 | Pro rata Calculated Award based on Actual performance | At time of normal MIP payout |
VIII. | Allocation of MIP Award Pool among Business Units and Corporate Staff Organizations |
A. | Type of Payment |
B. | Time of Payment |
Position Level | Target Award (% of Midpoint)* | Target Award (Value)* | |
33 | 65 | % | $323,800 |
32 | 65 | % | $296,100 |
31 | 60 | % | $250,300 |
30 | 55 | % | $216,300 |
29 | 50 | % | $178,100 |
28 | 50 | % | $165,000 |
27 | 45 | % | $135,900 |
26 | 45 | % | $124,200 |
25 | 40 | % | $101,000 |
24 | 40 | % | $94,500 |
23 | 35 | % | $75,600 |
22 | 30 | % | $59,300 |
21 | 30 | % | $54,200 |
20 | 25 | % | $41,400 |
19 | 25 | % | $38,500 |
18 | 20 | % | $28,600 |
17 | 20 | % | $26,700 |
16 | 20 | % | $24,700 |
15 | 15 | % | $17,100 |
14 | 15 | % | $15,900 |
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 |
Plan Element | 162(m) Limit Approved by Committee |
Company Business Objective: | • Positive EBITDA Before Special Items |
Intermediate Performance Objectives: | • Same as 2015 Management Incentive Plan objectives |
In millions, except per share amounts | 2014 | 2013 | 2012 | |||||||||
Earnings (loss) from continuing operations | $ | 568 | $ | 1,704 | $ | 717 | ||||||
Discontinued operations | (13 | ) | (309 | ) | 77 | |||||||
Net earnings (loss) | 555 | 1,395 | 794 | |||||||||
Effect of dilutive securities (a) | — | — | — | |||||||||
Net earnings - assuming dilution | $ | 555 | $ | 1,395 | $ | 794 | ||||||
Average common shares outstanding | 427.7 | 443.3 | 435.2 | |||||||||
Effect of dilutive securities (a) | ||||||||||||
Restricted stock performance share plan | 4.2 | 4.5 | 5.0 | |||||||||
Stock options (b) | 0.1 | 0.3 | — | |||||||||
Average common shares outstanding - assuming dilution | 432.0 | 448.1 | 440.2 | |||||||||
Earnings (loss) per common share from continuing operations | $ | 1.33 | $ | 3.85 | $ | 1.65 | ||||||
Discontinued operations | (0.03 | ) | (0.70 | ) | 0.17 | |||||||
Net earnings (loss) per common share | $ | 1.30 | $ | 3.15 | $ | 1.82 | ||||||
Earnings (loss) per common share from continuing operations - assuming dilution | $ | 1.31 | $ | 3.80 | $ | 1.63 | ||||||
Discontinued operations | (0.02 | ) | (0.69 | ) | 0.17 | |||||||
Net earnings (loss) per common share - assuming dilution | $ | 1.29 | $ | 3.11 | $ | 1.80 |
For the Years Ended December 31, | ||||||||||||||||||||||
TITLE | 2010 | 2011 | 2012 | 2013 | 2014 | |||||||||||||||||
(A) | Earnings (loss) from continuing operations before income taxes and equity earnings | $ | 719.0 | $ | 1,395.0 | $ | 967.0 | $ | 1,228.0 | $ | 872.0 | |||||||||||
(B) | Noncontrolling interests, net of taxes | (21.0 | ) | (14.0 | ) | (5.0 | ) | 17.0 | 19.0 | |||||||||||||
(C) | Fixed charges excluding capitalized interest | 700.4 | 661.8 | 782.0 | 705.5 | 694.2 | ||||||||||||||||
(D) | Amortization of previously capitalized interest | 30.4 | 29.2 | 24.2 | 24.7 | 23.9 | ||||||||||||||||
(E) | Distributed income of equity investees | 33.0 | 85.6 | — | — | 56.1 | ||||||||||||||||
(F) | Earnings (loss) from continuing operations before income taxes and fixed charges | $ | 1,461.8 | $ | 2,157.6 | $ | 1,768.2 | $ | 1,975.2 | $ | 1,665.2 | |||||||||||
Fixed Charges | ||||||||||||||||||||||
(G) | Interest and amortization of debt expense | $ | 643.4 | $ | 602.0 | $ | 714.7 | $ | 648.3 | $ | 642.9 | |||||||||||
(H) | Interest factor attributable to rentals | 51.5 | 54.4 | 61.6 | 56.1 | 51.3 | ||||||||||||||||
(I) | Preferred dividends of subsidiaries | 5.5 | 5.4 | 5.7 | 1.1 | — | ||||||||||||||||
(J) | Capitalized interest | 14.0 | 21.6 | 36.6 | 17.0 | 23.2 | ||||||||||||||||
(K) | Total fixed charges | $ | 714.4 | $ | 683.4 | $ | 818.6 | $ | 722.5 | $ | 717.4 | |||||||||||
(L) | Ratio of earnings to fixed charges | 2.05 | 3.16 | 2.16 | 2.73 | 2.32 |
Name | Jurisdiction | |
Ace Packaging Systems, Inc. | Michigan | |
Alexander Plantation, LLC | Delaware | |
Baoding International Paper Packaging Co., Ltd. | China | |
Basswood Forests II LLC | Delaware | |
Basswood Forests LLC | Delaware | |
Beech Forests LLC | Delaware | |
Beijing Golden Eagle Package & Production Co., Ltd. | China | |
Birch Forests LLC | Delaware | |
Branigar Organization, Inc., The | Illinois | |
Cartonajes International, S.L. | Spain | |
Cartonajes Union S.L. | Spain | |
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 | |
Chocolate Bayou Water Company | Delaware | |
CircleTree Insurance Company | Vermont | |
CMCP - INTERNATIONAL PAPER S.A.S. | Morocco | |
Commercial Realty & Properties LLC | Delaware | |
Comptoir des Bois de Brive SAS | France | |
ECHO Easement Corridor, LLC | Delaware | |
El Morro Corrugated Box Corporation | Puerto Rico | |
EM Xpedx, S.A. De C.V. | Mexico | |
Emballages Laurent SAS | France | |
English Oak LLC | Delaware | |
Federal Forestlands Inc. | Delaware | |
Forest Insurance Limited | Bermuda | |
GCO Minerals LLC | Texas | |
Groveton Paper Board, Inc. | New Hampshire | |
Haig Point, Inc. | Delaware | |
Hawthorn Forests LLC | Delaware | |
Hazelnut Forests LLC | Delaware | |
Hickory Forests LLC | Delaware | |
I.P. CONTAINER HOLDINGS (SPAIN) S.L. | Spain | |
Inland Paper Company Inc. | Indiana | |
Instituto International Paper | Brazil | |
International Paper - 26, Inc. | Delaware | |
International Paper - 35, Inc. | Delaware | |
International Paper - Comércio de Papel e Participações Arapoti Ltda. | Brazil | |
International Paper - Kwidzyn Sp. Z O.O. | Poland | |
International Paper & Sun (Hong Kong) Trading Limited | Hong Kong | |
International Paper & Sun Cartonboard Co., Ltd. | People's Republic of China |
Name | Jurisdiction | |
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 (Espana), S. L. | Spain | |
International Paper (Europe) Sarl | Luxembourg | |
International Paper (Guangzhou Panyu) Packaging Co.Ltd | China | |
International Paper (Guangzhou) Packaging Co., Ltd. | Guangzhou, China | |
International Paper (Hohhot) Packaging Co., Ltd. | China | |
International Paper (India) Private Limited | India | |
International Paper (Malaysia) Sdn Bhd | Malaysia | |
International Paper (Nanjing) Packaging Co., Ltd. | China | |
International Paper (New Zealand) Limited | New Zealand | |
International Paper (Poland) Holding sp. z o.o. | Poland | |
International Paper (Shanghai Minhang) Packaging Co., Ltd | China | |
International Paper (Shenyang) Packaging Co., Ltd. | People's Republic of China | |
International Paper (Suzhou) Packaging Co., Ltd. | China | |
International Paper (Tianjin) Packaging Co., Ltd. | China | |
International Paper (UK) Limited | Scotland | |
International Paper (Wuhan) Packaging Co., Ltd. | China | |
International Paper Agroflorestal Ltda. | Brazil | |
International Paper APPM Limited | India | |
International Paper 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 | |
International Paper Embalagens Ltda. | Brazil | |
International Paper Exportadora Ltda. | Brazil |
Name | Jurisdiction | |
International Paper Finance (Luxembourg) SARL | 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 Holdings Chile Comercial Ltda. | Chile | |
International Paper Hungary Kereskedelmi Kft. | Hungary | |
International Paper Industrie France SA | France | |
International Paper Investment (Shanghai) Co., Ltd. | China | |
International Paper Investments Asia Pte Ltd | Singapore | |
International Paper Investments (Asia) B.V. | Netherlands | |
International Paper Investments (France) S.A.S | France | |
International Paper Investments (Holland) B.V. | Netherlands | |
International Paper Investments (Luxembourg) S.à.r.l. | Luxembourg | |
International Paper Italia Srl | Italy | |
International Paper Japan Limited | Japan | |
International Paper Latin America Investments, LLC | Delaware | |
International Paper Latin America Ltda. | Chile | |
International Paper Manufacturing and Distribution Ltd. | Hong Kong | |
International Paper 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 | |
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 | |
Przedsiebiorstwo Produkcyjno-Handlowe "Tor-Pal" Spolka z Ograniczona Odpowiedzialnoscia | Poland | |
PT International Paper Packaging Indonesia Batam | Indonesia | |
Red Bird Receivables, LLC | Delaware | |
Sabine River & Northern Railroad Company | Texas | |
Shandong International Paper & Sun Coated Paperboard Co., Ltd. | People's Republic of China | |
Shandong IP & Sun Food Packaging Co., Ltd. | China |
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 | |
Templar Essex Inc. | Delaware | |
Temple Associates, Inc. | Texas | |
Temple-Inland Funding Corporation | Nevada | |
Temple-Inland Inc. | Delaware | |
Temple-Inland Resource Company | Nevada | |
Tianjin Bohai International Paper Packaging Co., Ltd. | China | |
Timberlands Capital Corp. II, Inc. | Delaware | |
Timberlands Capital Corp. III, Inc. | Delaware | |
TIN Inc. | Delaware | |
TIN Intermediate, LLC | Delaware | |
TIN Land Financing, LLC | Delaware | |
TIN Timber Financing, LLC | Delaware | |
TinCorr S.A. | Uruguay | |
Transtates Properties Incorporated | Delaware | |
U. C. Realty Corp. | Delaware | |
Velarium Oy Ab | Finland | |
Xianghe International Paper Packaging Co., Ltd. | China | |
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 26, 2015 |
/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 26, 2015 |
/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 26, 2015 |
/s/ Carol L. Roberts |
Carol L. Roberts |
Senior Vice President and Chief Financial Officer |
February 26, 2015 |
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