ý | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the fiscal year ended December 31, 2016 |
¨ | 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 (except as noted) | 2016 | 2015 | 2014 | |||
Industrial Packaging | ||||||
North American Corrugated Packaging (3) | 10,392 | 10,284 | 10,355 | |||
North American Containerboard | 3,091 | 3,110 | 3,035 | |||
North American Recycling | 2,402 | 2,379 | 2,459 | |||
North American Saturated Kraft | 182 | 156 | 186 | |||
North American Gypsum/Release Kraft | 200 | 171 | 168 | |||
North American Bleached Kraft | 24 | 23 | 26 | |||
EMEA Industrial Packaging (3) (4) | 1,477 | 1,417 | 1,379 | |||
Asian Box (3) (5) | 208 | 426 | 407 | |||
Brazilian Packaging | 371 | 348 | 362 | |||
Industrial Packaging | 18,347 | 18,314 | 18,377 | |||
Cellulose Fibers (in thousands of metric tons) (2) | 1,870 | 1,575 | 1,612 | |||
Printing Papers | ||||||
U.S. Uncoated Papers | 1,872 | 1,879 | 1,968 | |||
European and Russian Uncoated Papers | 1,536 | 1,493 | 1,531 | |||
Brazilian Uncoated Papers | 1,114 | 1,125 | 1,141 | |||
Indian Uncoated Papers | 241 | 241 | 231 | |||
Uncoated Papers | 4,763 | 4,738 | 4,871 | |||
Consumer Packaging | ||||||
North American Consumer Packaging | 1,189 | 1,425 | 1,486 | |||
European and Russian Coated Paperboard | 393 | 381 | 354 | |||
Asian Coated Paperboard (6) | — | 958 | 1,358 | |||
Consumer Packaging | 1,582 | 2,764 | 3,198 |
(1) | Includes third-party and inter-segment sales and excludes sales of equity investees. |
(2) | Includes North American, European and Brazilian volumes and internal sales to mills. Includes sales volumes from the newly acquired pulp business beginning December 1, 2016. |
(3) | Volumes for corrugated box sales reflect consumed tons sold (CTS). Board sales by these businesses reflect invoiced tons. |
(4) | Excludes newsprint sales volumes at Madrid, Spain mill. |
(5) | Includes sales volumes through the date of sale on June 30, 2016. |
(6) | Includes sales volumes through the date of sale in October 2015. |
• | 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 or other equipment; |
• | 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, 2016 - October 31, 2016 | — | $— | — | $0.933 | |||||
November 1, 2016 - November 30, 2016 | 9,096 | 45.03 | — | 0.933 | |||||
December 1, 2016 - December 31, 2016 | 2,642 | 52.29 | — | 0.933 | |||||
Total | 11,738 |
(a) | 11,738 shares were acquired from employees from share withholdings to pay income taxes under the Company’s restricted stock programs. During these periods, no shares were purchased under our share repurchase program, which was was approved by our Board of Directors and announced on July 8, 2014. Through this program, which does not have an expiration date, we were authorized to purchase, in open market transactions (including block trades), privately negotiated transactions or otherwise, up to $1.5 billion of shares of our common stock. As of February 17, 2017, approximately $933 million of shares of our common stock remained authorized for purchase under this program. |
Dollar amounts in millions, except per share amounts and stock prices | 2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||
RESULTS OF OPERATIONS | ||||||||||||||||||||
Net sales | $ | 21,079 | $ | 22,365 | $ | 23,617 | $ | 23,483 | $ | 21,852 | ||||||||||
Costs and expenses, excluding interest | 19,603 | 20,544 | 22,138 | 21,643 | 20,214 | |||||||||||||||
Earnings (loss) from continuing operations before income taxes and equity earnings | 956 | (b) | 1,266 | (e) | 872 | (g) | 1,228 | (j) | 967 | (m) | ||||||||||
Equity earnings (loss), net of taxes | 198 | 117 | (200 | ) | (39 | ) | 61 | |||||||||||||
Discontinued operations, net of taxes | (5 | ) | (c) | — | (13 | ) | (h) | (309 | ) | (k) | 77 | (n) | ||||||||
Net earnings (loss) | 902 | (b-d) | 917 | (e-f) | 536 | (g-i) | 1,378 | (j-l) | 799 | (m-o) | ||||||||||
Noncontrolling interests, net of taxes | (2 | ) | (21 | ) | (19 | ) | (17 | ) | 5 | |||||||||||
Net earnings (loss) attributable to International Paper Company | 904 | (b-d) | 938 | (e-f) | 555 | (g-i) | 1,395 | (j-l) | 794 | (m-o) | ||||||||||
FINANCIAL POSITION | ||||||||||||||||||||
Current assets less current liabilities | $ | 2,897 | $ | 2,553 | $ | 3,050 | $ | 3,898 | $ | 3,907 | ||||||||||
Plants, properties and equipment, net | 13,990 | 11,980 | 12,728 | 13,672 | 13,949 | |||||||||||||||
Forestlands | 456 | 366 | 507 | 557 | 622 | |||||||||||||||
Total assets | 33,345 | 30,531 | 28,637 | 31,488 | 32,106 | |||||||||||||||
Notes payable and current maturities of long-term debt | 239 | 426 | 742 | 661 | 444 | |||||||||||||||
Long-term debt | 11,075 | 8,844 | 8,584 | 8,787 | 9,649 | |||||||||||||||
Total shareholders’ equity | 4,341 | 3,884 | 5,115 | 8,105 | 6,304 | |||||||||||||||
BASIC EARNINGS PER SHARE ATTRIBUTABLE TO INTERNATIONAL PAPER COMPANY COMMON SHAREHOLDERS | ||||||||||||||||||||
Earnings (loss) from continuing operations | $ | 2.21 | $ | 2.25 | $ | 1.33 | $ | 3.85 | $ | 1.65 | ||||||||||
Discontinued operations | (0.01 | ) | — | (0.03 | ) | (0.70 | ) | 0.17 | ||||||||||||
Net earnings (loss) | 2.20 | 2.25 | 1.30 | 3.15 | 1.82 | |||||||||||||||
DILUTED EARNINGS PER SHARE ATTRIBUTABLE TO INTERNATIONAL PAPER COMPANY COMMON SHAREHOLDERS | ||||||||||||||||||||
Earnings (loss) from continuing operations | $ | 2.19 | $ | 2.23 | $ | 1.31 | $ | 3.80 | $ | 1.63 | ||||||||||
Discontinued operations | (0.01 | ) | — | (0.02 | ) | (0.69 | ) | 0.17 | ||||||||||||
Net earnings (loss) | 2.18 | 2.23 | 1.29 | 3.11 | 1.80 | |||||||||||||||
Cash dividends | 1.783 | 1.640 | 1.450 | 1.250 | 1.088 | |||||||||||||||
Total shareholders’ equity | 10.56 | 9.43 | 12.18 | 18.57 | 14.33 | |||||||||||||||
COMMON STOCK PRICES | ||||||||||||||||||||
High | $ | 54.68 | $ | 57.90 | $ | 55.73 | $ | 50.33 | $ | 39.88 | ||||||||||
Low | 32.50 | 36.76 | 44.24 | 39.47 | 27.29 | |||||||||||||||
Year-end | 53.06 | 37.70 | 53.58 | 49.03 | 39.84 | |||||||||||||||
FINANCIAL RATIOS | ||||||||||||||||||||
Current ratio | 1.7 | 1.7 | 1.6 | 1.8 | 1.8 | |||||||||||||||
Total debt to capital ratio | 0.72 | 0.70 | 0.65 | 0.54 | 0.62 | |||||||||||||||
Return on shareholders’ equity | 22.1 | % | (b-d) | 20.0 | % | (e-f) | 7.7 | % | (g-i) | 20.2 | % | (j-l) | 11.6 | % | (m-o) | |||||
CAPITAL EXPENDITURES | $ | 1,348 | $ | 1,487 | $ | 1,366 | $1,198 | $1,383 | ||||||||||||
NUMBER OF EMPLOYEES | 55,000 | 56,000 | 58,000 | 64,000 | 65,000 |
(a) | All periods presented have been restated to reflect the xpedx business and the Temple-Inland Building Products business as discontinued operations and prior period amounts have been adjusted to conform with current year presentation, if applicable. |
2016 | ||||||||
In millions | Before Tax | After Tax | ||||||
Riegelwood mill conversion costs | $ | 9 | $ | 6 | ||||
India Packaging evaluation write-off | 17 | 11 | ||||||
Write-off of certain regulatory pre-engineering costs | 8 | 5 | ||||||
Early debt extinguishment costs | 29 | 18 | ||||||
Costs associated with the newly acquired pulp business | 31 | 21 | ||||||
Asia Box impairment / restructuring | 70 | 58 | ||||||
Gain on sale of investment in Arizona Chemical | (8 | ) | (5 | ) | ||||
Turkey mill closure | 7 | 6 | ||||||
Amortization of Weyerhaeuser inventory fair value step-up | 19 | 11 | ||||||
Total special items | $ | 182 | $ | 131 | ||||
Non-operating pension expense | 610 | 375 | ||||||
Total | $ | 792 | $ | 506 |
In millions | 2016 | |||
Cash pension contribution | $ | 23 | ||
U.S. Federal audit | (14 | ) | ||
Brazil goodwill | (57 | ) | ||
International legal entity restructuring | (6 | ) | ||
Luxembourg tax rate change | 31 | |||
Total | $ | (23 | ) |
2015 | ||||||||
In millions | Before Tax | After Tax | ||||||
Riegelwood mill conversion costs, net of proceeds from sale of the Carolina Coated Bristols brand | $ | 8 | $ | 4 | ||||
Timber monetization restructuring | 16 | 10 | ||||||
Early debt extinguishment costs | 207 | 133 | ||||||
IP-Sun JV impairment | 174 | 180 | ||||||
Legal reserve adjustment | 15 | 9 | ||||||
Refund and state tax credits | (4 | ) | (2 | ) | ||||
Impairment of Orsa goodwill and trade name intangible | 137 | 137 | ||||||
Other items | 6 | 5 | ||||||
Total special items | $ | 559 | $ | 476 | ||||
Non-operating pension expense | 258 | 157 | ||||||
Total | $ | 817 | $ | 633 |
In millions | 2015 | |||
IP-Sun JV impairment | $ | (67 | ) | |
Cash pension contribution | 23 | |||
Other items | 7 | |||
Total | $ | (37 | ) |
2014 | ||||||||
In millions | Before Tax | After Tax | ||||||
Temple-Inland integration | $ | 16 | $ | 10 | ||||
Courtland mill shutdown | 554 | 338 | ||||||
Early debt extinguishment costs | 276 | 169 | ||||||
India legal contingency resolution | (20 | ) | (20 | ) | ||||
Multi-employer pension plan withdrawal liability | 35 | 21 | ||||||
Foreign tax amnesty program | 32 | 17 | ||||||
Asia Industrial Packaging goodwill impairment | 100 | 100 | ||||||
Loss on sale by investee and impairment of investment | 47 | 36 | ||||||
Other items | 12 | 9 | ||||||
Total special items | $ | 1,052 | $ | 680 | ||||
Non-operating pension expense | 212 | 129 | ||||||
Total | $ | 1,264 | $ | 809 |
2014 | ||||||||
In millions | Before Tax | After Tax | ||||||
xpedx spinoff | $ | 24 | $ | 16 | ||||
Building Products divestiture | 16 | 9 | ||||||
xpedx restructuring | 1 | (1 | ) | |||||
Total | $ | 41 | $ | 24 |
In millions | 2014 | |||
State legislative tax change | $ | 10 | ||
Internal restructuring | (90 | ) | ||
Other items | (1 | ) | ||
Total | $ | (81 | ) |
2013 | ||||||||
In millions | Before Tax | After Tax | ||||||
Temple-Inland integration | $ | 62 | $ | 38 | ||||
Courtland mill shutdown | 118 | 72 | ||||||
Early debt extinguishment costs | 25 | 16 | ||||||
Insurance reimbursement related to legal settlement | (30 | ) | (19 | ) | ||||
Shut down of paper machine at Augusta mill | 45 | 28 | ||||||
India Papers tradename and goodwill impairment | 127 | 122 | ||||||
Fair value adjustment of company airplanes | 9 | 5 | ||||||
Cass Lake environmental reserve | 6 | 4 | ||||||
Bargain purchase adjustment - Turkey | (13 | ) | (13 | ) | ||||
Other items | (5 | ) | 2 | |||||
Total | $ | 344 | $ | 255 | ||||
Non-operating pension expense | 323 | 197 | ||||||
Total | $ | 667 | $ | 452 |
2013 | ||||||||
In millions | Before Tax | After Tax | ||||||
xpedx spinoff | $ | 22 | $ | 14 | ||||
xpedx goodwill impairment | 400 | 366 | ||||||
Building Products divestiture | 23 | 19 | ||||||
xpedx restructuring | 32 | 19 | ||||||
Total | $ | 477 | $ | 418 |
In millions | 2013 | |||
Settlement of U.S. federal tax audits | $ | (744 | ) | |
Income tax reserve release | (31 | ) | ||
Other items | 1 | |||
Total | $ | (774 | ) |
2012 | ||||||||
In millions | Before Tax | After Tax | ||||||
Temple-Inland integration | $ | 164 | $ | 105 | ||||
Early debt extinguishment costs | 48 | 30 | ||||||
EMEA packaging business restructuring | 17 | 12 | ||||||
Temple-Inland inventory fair value adjustment | 20 | 12 | ||||||
Hueneme mill long-lived asset fair value adjustment | 62 | 38 | ||||||
Containerboard mill divestitures | 29 | 55 | ||||||
Other | (5 | ) | (5 | ) | ||||
Total | $ | 335 | $ | 247 | ||||
Non-operating pension expense | 159 | 113 | ||||||
Total | $ | 494 | $ | 360 |
2012 | ||||||||
In millions | Before Tax | After Tax | ||||||
Building Products divestiture | $ | 15 | $ | 9 | ||||
xpedx restructuring | 44 | 28 | ||||||
Total | $ | 59 | $ | 37 |
In millions | 2012 | |||
Internal restructuring | $ | 14 | ||
Deferred tax asset adjustment related to Medicare Part D reimbursement | 5 | |||
Other | 6 | |||
Total | $ | 25 |
2016 | 2015 | 2014 | |||||||
Diluted Earnings (Loss) Attributable to Shareholders | $ | 904 | $ | 938 | $ | 555 | |||
Add back - Discontinued operations (gain) loss | 5 | — | 13 | ||||||
Diluted Earnings (Loss) from Continuing Operations | 909 | 938 | 568 | ||||||
Add back - Non-operating pension (income) expense | 610 | 258 | 212 | ||||||
Add back - Net special items expense (income) | 182 | 559 | 1,052 | ||||||
Income tax effect - Non-operating pension and special items expense | (309 | ) | (221 | ) | (536 | ) | |||
Adjusted Operating Earnings (Loss) Attributable to Shareholders | $ | 1,392 | $ | 1,534 | $ | 1,296 |
2016 | 2015 | 2014 | |||||||
Diluted Earnings (Loss) Per Share Attributable to Shareholders | $ | 2.18 | $ | 2.23 | $ | 1.29 | |||
Add back - Discontinued operations (gain) loss per share | 0.01 | — | 0.02 | ||||||
Diluted Earnings (Loss) Per Share from Continuing Operations | 2.19 | 2.23 | 1.31 | ||||||
Add back - Non-operating pension (income) expense | 1.47 | 0.61 | 0.49 | ||||||
Add back - Net special items expense (income) | 0.44 | 1.33 | 2.44 | ||||||
Income tax effect - Non-operating pension and special items expense | (0.75 | ) | (0.52 | ) | (1.24 | ) | |||
Adjusted Operating Earnings (Loss) Per Share Attributable to Shareholders | $ | 3.35 | $ | 3.65 | $ | 3.00 |
Three Months Ended December 31, 2016 | Three Months Ended September 30, 2016 | Three Months Ended December 31, 2015 | ||||||||||
Diluted Earnings (Loss) Attributable to Shareholders | $ | 218 | $ | 312 | $ | 178 | ||||||
Add back - Discontinued operations (gain) loss | — | — | — | |||||||||
Diluted Earnings (Loss) from Continuing Operations | 218 | 312 | 178 | |||||||||
Add back - Non-operating pension (income) expense | 37 | 42 | 60 | |||||||||
Add back - Net special items expense (income) | 45 | 66 | 158 | |||||||||
Income tax effect - Non-operating pension and special items expense | 3 | (40 | ) | (35 | ) | |||||||
Adjusted Operating Earnings (Loss) Attributable to Shareholders | $ | 303 | $ | 380 | $ | 361 |
Three Months Ended December 31, 2016 | Three Months Ended September 30, 2016 | Three Months Ended December 31, 2015 | ||||||||||
Diluted Earnings (Loss) Per Share Attributable to Shareholders | $ | 0.53 | $ | 0.75 | $ | 0.43 | ||||||
Add back - Discontinued operations (gain) loss per share | — | — | — | |||||||||
Diluted Earnings (Loss) Per Share from Continuing Operations | 0.53 | 0.75 | 0.43 | |||||||||
Add back - Non-operating pension (income) expense per share | 0.09 | 0.10 | 0.14 | |||||||||
Add back - Net special items expense (income) per share | 0.11 | 0.16 | 0.38 | |||||||||
Income tax effect per share - Non-operating pension and special items expense | — | (0.10 | ) | (0.08 | ) | |||||||
Adjusted Operating Earnings (Loss) Per Share Attributable to Shareholders | $ | 0.73 | $ | 0.91 | $ | 0.87 |
In millions | 2016 | 2015 | 2014 | ||||||
Earnings (Loss) From Continuing Operations Attributable to International Paper Company | $ | 909 | $ | 938 | $ | 568 | |||
Add back (deduct) | |||||||||
Income tax provision (benefit) | 247 | 466 | 123 | ||||||
Equity (earnings) loss, net of taxes | (198 | ) | (117 | ) | 200 | ||||
Noncontrolling interests, net of taxes | (2 | ) | (21 | ) | (19 | ) | |||
Earnings (Loss) From Continuing Operations Before Income Taxes and Equity Earnings | 956 | 1,266 | 872 | ||||||
Interest expense, net | 520 | 555 | 601 | ||||||
Noncontrolling interests/equity earnings included in operations | 1 | 8 | 2 | ||||||
Corporate items | 69 | 36 | 51 | ||||||
Corporate special items (income) expense | 46 | 238 | 320 | ||||||
Non-operating pension expense | 610 | 258 | 212 | ||||||
Earnings (Loss) From Continuing Operations Before Income Taxes and Equity Earnings | $ | 2,202 | $ | 2,361 | $ | 2,058 | |||
Business Segment Operating Profit | |||||||||
Industrial Packaging | $ | 1,651 | $ | 1,853 | $ | 1,896 | |||
Global Cellulose Fibers | (180 | ) | 68 | 61 | |||||
Printing Papers | 540 | 465 | (77 | ) | |||||
Consumer Packaging | 191 | (25 | ) | 178 | |||||
Total Business Segment Operating Profit | $ | 2,202 | $ | 2,361 | $ | 2,058 |
• | Industrial Packaging’s profits of $1.7 billion were $202 million lower than in 2015 as the benefits of higher sales volumes, lower maintenance outage costs and lower input costs were more than offset by lower average sales price realizations and mix, higher operating costs and higher other costs. In addition, operating profits in 2016 included a charge of $70 million for impairment and other costs associated with the sale of our corrugated packaging business in Asia and a charge of $7 million related to the closure of a mill in Turkey. In 2015, operating profits included a goodwill and trade name impairment charge of $137 million related to our Brazil Packaging business. |
• | Global Cellulose Fibers' operating loss of $180 million was $248 million unfavorable versus 2015 as the benefits of higher sales volumes, lower input costs, lower other costs and the earnings from the newly acquired business were more than offset by lower average sales price realizations and mix, higher operating costs and higher maintenance outage costs. The operating loss in 2016 included $31 million of costs associated with the acquisition of the pulp business and a charge of $19 million to amortize the newly acquired pulp business inventory fair value adjustment. |
• | Printing Papers’ profits of $540 million represented a $75 million increase in operating profits from 2015. The benefits from higher sales volumes, higher average sales price realizations and mix, lower operating costs, lower maintenance outage costs and lower input costs were partially offset by higher other costs. |
• | Consumer Packaging’s operating profit of $191 million represented a $216 million increase in operating profits from 2015. The benefits from lower operating costs, lower maintenance outage costs, |
In millions | 2016 | 2015 | 2014 | |||||||||
Earnings from continuing operations attributable to International Paper Company | $ | 909 | (a) | $ | 938 | (b) | $ | 568 | (c) |
Restructuring and Other | ||||||||||||
In millions | 2016 | 2015 | 2014 | |||||||||
Business Segments | ||||||||||||
Riegelwood mill conversion costs net of proceeds from the sale of Carolina Coated Bristols brand | $ | 9 | (a) | $ | 8 | (a) | $ | — | ||||
Turkey mill closure | 7 | (b) | — | — | ||||||||
Courtland mill shutdown | — | — | 554 | (c) | ||||||||
Other items | — | 2 | (a) | 15 | (d) | |||||||
16 | 10 | 569 | ||||||||||
Corporate | ||||||||||||
Early debt extinguishment costs (see Note 13) | $ | 29 | 207 | 276 | ||||||||
India Packaging business evaluation write-off | 17 | — | — | |||||||||
Gain on sale of investment in Arizona Chemical | (8 | ) | — | — | ||||||||
Timber monetization restructuring | — | 16 | — | |||||||||
Legal liability reserve adjustment | — | 15 | — | |||||||||
Other Items | — | 4 | 1 | |||||||||
38 | 242 | 277 | ||||||||||
Total | $ | 54 | $ | 252 | $ | 846 |
Other Corporate Items | |||||||||
In millions | 2016 | 2015 | 2014 | ||||||
Write-off of certain regulatory pre-engineering costs | $ | 8 | $ | — | $ | — | |||
Sale of investment by ASG and impairment of that investment | — | — | 47 | ||||||
Other | — | (4 | ) | (4 | ) | ||||
Total | $ | 8 | $ | (4 | ) | $ | 43 |
Industrial Packaging | |||||||||
In millions | 2016 | 2015 | 2014 | ||||||
Net Sales | $ | 14,191 | $ | 14,484 | $ | 14,944 | |||
Operating Profit (Loss) | $ | 1,651 | $ | 1,853 | $ | 1,896 | |||
Turkey mill closure | 7 | — | — | ||||||
Asia Packaging restructuring and impairment | 70 | — | 7 | ||||||
Brazil Packaging goodwill and trade name impairment | — | 137 | — | ||||||
Temple-Inland acquisition | — | — | 16 | ||||||
Multi-employer pension withdrawal liability | — | — | 35 | ||||||
Box plant closures | — | — | (5 | ) | |||||
EMEA Packaging restructuring | — | — | 5 | ||||||
Turkey acquisition | — | — | 1 | ||||||
Brazil Packaging integration costs | — | — | (1 | ) | |||||
Asia Packaging goodwill impairment | — | — | 100 | ||||||
Operating Profit Before Special Items | $ | 1,728 | $ | 1,990 | $ | 2,054 |
North American Industrial Packaging | |||||||||
In millions | 2016 | 2015 | 2014 | ||||||
Net Sales | $ | 12,227 | $ | 12,541 | $ | 12,663 | |||
Operating Profit (Loss) | $ | 1,757 | $ | 2,009 | $ | 1,986 | |||
Temple-Inland acquisition | — | — | 16 | ||||||
Multi-employer pension withdrawal liability | — | — | 35 | ||||||
Box plant closures | — | — | (5 | ) | |||||
Operating Profit Before Special Items | $ | 1,757 | $ | 2,009 | $ | 2,032 |
EMEA Industrial Packaging | |||||||||
In millions | 2016 | 2015 | 2014 | ||||||
Net Sales | $ | 1,227 | $ | 1,114 | $ | 1,307 | |||
Operating Profit (Loss) | $ | 15 | $ | 13 | $ | 25 | |||
Turkey Mill Closure | 7 | — | — | ||||||
EMEA Packaging restructuring | — | — | 5 | ||||||
Turkey acquisition | — | — | 1 | ||||||
Operating Profit Before Special Items | $ | 22 | $ | 13 | $ | 31 |
Brazilian Industrial Packaging | |||||||||
In millions | 2016 | 2015 | 2014 | ||||||
Net Sales | $ | 232 | $ | 228 | $ | 349 | |||
Operating Profit (Loss) | $ | (43 | ) | $ | (163 | ) | $ | (3 | ) |
Brazil Packaging goodwill and trade name impairment | — | 137 | — | ||||||
Brazil Packaging integration costs | — | — | (1 | ) | |||||
Operating Profit Before Special Items | $ | (43 | ) | $ | (26 | ) | $ | (4 | ) |
Asian Industrial Packaging | |||||||||
In millions | 2016 | 2015 | 2014 | ||||||
Net Sales | $ | 505 | $ | 601 | $ | 625 | |||
Operating Profit (Loss) | $ | (78 | ) | $ | (6 | ) | $ | (112 | ) |
Asia Packaging restructuring and impairment | 70 | — | 7 | ||||||
Asia Packaging goodwill impairment | — | — | 100 | ||||||
Operating Profit Before Special Items | $ | (8 | ) | $ | (6 | ) | $ | (5 | ) |
Global Cellulose Fibers | |||||||||
In millions | 2016 | 2015 | 2014 | ||||||
Net Sales | $ | 1,092 | $ | 975 | $ | 1,046 | |||
Operating Profit (Loss) | $ | (180 | ) | $ | 68 | $ | 61 | ||
Acquisition costs | 31 | — | — | ||||||
Inventory fair value step-up amortization | 19 | — | — | ||||||
Operating Profit Before Special Items | $ | (130 | ) | $ | 68 | $ | 61 |
Printing Papers | |||||||||
In millions | 2016 | 2015 | 2014 | ||||||
Net Sales | $ | 4,058 | $ | 4,056 | $ | 4,674 | |||
Operating Profit (Loss) | $ | 540 | $ | 465 | $ | (77 | ) | ||
Courtland mill closure | — | — | 554 | ||||||
Brazil tax amnesty | — | — | 32 | ||||||
India legal contingency | — | — | (20 | ) | |||||
Operating Profit Before Special Items | $ | 540 | $ | 465 | $ | 489 |
North American Printing Papers | |||||||||
In millions | 2016 | 2015 | 2014 | ||||||
Net Sales | $ | 1,890 | $ | 1,942 | $ | 2,055 | |||
Operating Profit (Loss) | $ | 236 | $ | 179 | $ | (398 | ) | ||
Courtland mill closure | — | — | 554 | ||||||
Operating Profit Before Special Items | $ | 236 | $ | 179 | $ | 156 |
Brazilian Papers | |||||||||
In millions | 2016 | 2015 | 2014 | ||||||
Net Sales | $ | 897 | $ | 878 | $ | 1,061 | |||
Operating Profit (Loss) | $ | 173 | $ | 186 | $ | 177 | |||
Brazil tax amnesty | — | — | 32 | ||||||
Operating Profit Before Special Items | $ | 173 | $ | 186 | $ | 209 |
European Papers | |||||||||
In millions | 2016 | 2015 | 2014 | ||||||
Net Sales | $ | 1,109 | $ | 1,064 | $ | 1,321 | |||
Operating Profit (Loss) | $ | 142 | $ | 111 | $ | 136 |
Indian Papers | |||||||||
In millions | 2016 | 2015 | 2014 | ||||||
Net Sales | $ | 167 | $ | 172 | $ | 178 | |||
Operating Profit (Loss) | $ | (11 | ) | $ | (11 | ) | $ | 8 | |
India legal contingency | — | — | (20 | ) | |||||
Operating Profit Before Special Items | $ | (11 | ) | $ | (11 | ) | $ | (12 | ) |
Consumer Packaging | |||||||||
In millions | 2016 | 2015 | 2014 | ||||||
Net Sales | $ | 1,955 | $ | 2,940 | $ | 3,403 | |||
Operating Profit (Loss) | $ | 191 | $ | (25 | ) | $ | 178 | ||
Riegelwood conversion costs net of proceeds from the sale of the Carolina coated bristols brand | 9 | 8 | — | ||||||
Asia Coated Paperboard goodwill and PP&E impairment | — | 174 | — | ||||||
NA Coated Paperboard sheet plant closures | — | 2 | 8 | ||||||
Operating Profit Before Special Items | $ | 200 | $ | 159 | $ | 186 |
North American Consumer Packaging | |||||||||
In millions | 2016 | 2015 | 2014 | ||||||
Net Sales | $ | 1,628 | $ | 1,939 | $ | 1,993 | |||
Operating Profit (Loss) | $ | 98 | $ | 81 | $ | 92 | |||
Riegelwood conversion costs net of proceeds from the sale of the Carolina coated bristols brand | 9 | 8 | — | ||||||
NA Coated Paperboard sheet plant closures | — | 2 | 8 | ||||||
Operating Profit Before Special Items | $ | 107 | $ | 91 | $ | 100 |
European Consumer Packaging | |||||||||
In millions | 2016 | 2015 | 2014 | ||||||
Net Sales | $ | 327 | $ | 319 | $ | 365 | |||
Operating Profit (Loss) | $ | 93 | $ | 87 | $ | 91 |
Asian Consumer Packaging | |||||||||
In millions | 2016 | 2015 | 2014 | ||||||
Net Sales | $ | — | $ | 682 | $ | 1,045 | |||
Operating Profit (Loss) | $ | — | $ | (193 | ) | $ | (5 | ) | |
Asia Coated Paperboard goodwill and PP&E impairment | — | 174 | — | ||||||
Operating Profit Before Special Items | $ | — | $ | (19 | ) | $ | (5 | ) |
In millions | 2016 | 2015 | 2014 | ||||||
Cash provided by operations | $ | 2,478 | $ | 2,580 | $ | 3,077 | |||
Adjustments: | |||||||||
Cash invested in capital projects | (1,348 | ) | (1,487 | ) | (1,366 | ) | |||
Cash contribution to pension plan | 750 | 750 | 353 | ||||||
Free Cash Flow | $ | 1,880 | $ | 1,843 | $ | 2,064 |
In millions | Three Months Ended December 31, 2016 | Three Months Ended September 30, 2016 | Three Months Ended December 31, 2015 | ||||||
Cash provided by operations | $ | 912 | $ | 341 | $ | 990 | |||
Adjustments: | |||||||||
Cash invested in capital projects | (445 | ) | (266 | ) | (489 | ) | |||
Cash contribution to pension plan | — | 500 | — | ||||||
Free Cash Flow | $ | 467 | $ | 575 | $ | 501 |
In millions | 2016 | 2015 | 2014 | ||||||
Industrial Packaging | $ | 816 | $ | 858 | $ | 754 | |||
Global Cellulose Fibers | 174 | 129 | 75 | ||||||
Printing Papers | 215 | 232 | 243 | ||||||
Consumer Packaging | 124 | 216 | 233 | ||||||
Subtotal | 1,329 | 1,435 | 1,305 | ||||||
Corporate and other | 19 | 52 | 61 | ||||||
Capital Spending | $ | 1,348 | $ | 1,487 | $ | 1,366 |
In millions | 2016 | 2015 | 2014 | ||||||
Debt reductions (a) | $ | 266 | $ | 2,151 | $ | 1,625 | |||
Pre-tax early debt extinguishment costs (b) | 29 | 207 | 276 |
(a) | Reductions related to notes with interest rates ranging from 2.00% to 9.38% with original maturities from 2015 to 2030 for the years ended December 31, 2016, 2015 and 2014. Includes the $630 million payment for a portion of the Special Purpose Entity Liability for the year ended December 31, 2015 (see Note 12 Variable Interest Entities on pages 64 through 67 of Item 8. Financial Statements and Supplementary Data). |
(b) | Amounts are included in Restructuring and other charges in the accompanying consolidated statements of operations. |
In millions | 2017 | 2018 | 2019 | 2020 | 2021 | Thereafter | ||||||||||||
Maturities of long-term debt (a) | $ | 239 | $ | 690 | $ | 433 | $ | 179 | $ | 612 | $ | 9,161 | ||||||
Lease obligations | 119 | 91 | 69 | 51 | 38 | 125 | ||||||||||||
Purchase obligations (b) | 3,165 | 635 | 525 | 495 | 460 | 2,332 | ||||||||||||
Total (c) | $ | 3,523 | $ | 1,416 | $ | 1,027 | $ | 725 | $ | 1,110 | $ | 11,618 |
(a) | Total debt includes scheduled principal payments only. |
(b) | Includes $2 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. Also includes $1.1 billion relating to fiber supply agreements assumed in conjunction with the 2016 acquisition of Weyerhaeuser's pulp business. |
(c) | Not included in the above table due to the uncertainty as to the amount and timing of the payment are unrecognized tax benefits of approximately $77 million. |
In millions | Benefit Obligation | Fair Value of Plan Assets | ||||
U.S. qualified pension | $ | 13,307 | $ | 10,312 | ||
U.S. nonqualified pension | 376 | — | ||||
U.S. postretirement | 280 | — | ||||
Non-U.S. pension | 219 | 153 | ||||
Non-U.S. postretirement | 23 | — |
2016 | 2015 | 2014 | ||||
Discount rate | 4.10 | % | 4.40 | % | 4.10 | % |
Rate of compensation increase | 3.75 | % | 3.75 | % | 3.75 | % |
2016 | 2015 | |||
Health care cost trend rate assumed for next year | 6.50 | % | 7.00 | % |
Rate that the cost trend rate gradually declines to | 5.00 | % | 5.00 | % |
Year that the rate reaches the rate it is assumed to remain | 2022 | 2022 |
Year | Return | Year | Return | ||
2016 | 7.1 | % | 2011 | 2.5 | % |
2015 | 1.3 | % | 2010 | 15.1 | % |
2014 | 6.4 | % | 2009 | 23.8 | % |
2013 | 14.1 | % | 2008 | (23.6 | )% |
2012 | 14.1 | % | 2007 | 9.6 | % |
In millions | 2016 | 2015 | 2014 | 2013 | 2012 | ||||||||||
Pension expense | |||||||||||||||
U.S. plans (non-cash) | $ | 809 | $ | 461 | $ | 387 | $ | 545 | $ | 342 | |||||
Non-U.S. plans | 4 | 6 | — | 5 | 3 | ||||||||||
Postretirement expense | |||||||||||||||
U.S. plans | 13 | 8 | 7 | (1 | ) | (4 | ) | ||||||||
Non-U.S. plans | 1 | 5 | 7 | 7 | 1 | ||||||||||
Net expense | $ | 827 | $ | 480 | $ | 401 | $ | 556 | $ | 342 |
In millions | 2018 (1) | 2017 (1) | ||||
Pension expense | ||||||
U.S. plans (non-cash) | $ | 252 | $ | 310 | ||
Non-U.S. plans | 3 | 4 | ||||
Postretirement expense | ||||||
U.S. plans | 15 | 18 | ||||
Non-U.S. plans | 1 | 1 | ||||
Net expense | $ | 271 | $ | 333 |
(1) | Based on assumptions at December 31, 2016. |
In millions, except per share amounts, for the years ended December 31 | 2016 | 2015 | 2014 | ||||||
NET SALES | $ | 21,079 | $ | 22,365 | $ | 23,617 | |||
COSTS AND EXPENSES | |||||||||
Cost of products sold | 15,152 | 15,468 | 16,254 | ||||||
Selling and administrative expenses | 1,575 | 1,645 | 1,793 | ||||||
Depreciation, amortization and cost of timber harvested | 1,227 | 1,294 | 1,406 | ||||||
Distribution expenses | 1,361 | 1,406 | 1,521 | ||||||
Taxes other than payroll and income taxes | 164 | 168 | 180 | ||||||
Restructuring and other charges | 54 | 252 | 846 | ||||||
Impairment of goodwill and other intangibles | — | 137 | 100 | ||||||
Net (gains) losses on sales and impairments of businesses | 70 | 174 | 38 | ||||||
Interest expense, net | 520 | 555 | 607 | ||||||
EARNINGS (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND EQUITY EARNINGS (LOSSES) | 956 | 1,266 | 872 | ||||||
Income tax provision (benefit) | 247 | 466 | 123 | ||||||
Equity earnings (loss), net of taxes | 198 | 117 | (200 | ) | |||||
EARNINGS (LOSS) FROM CONTINUING OPERATIONS | 907 | 917 | 549 | ||||||
Discontinued operations, net of taxes | (5 | ) | — | (13 | ) | ||||
NET EARNINGS (LOSS) | 902 | 917 | 536 | ||||||
Less: Net earnings (loss) attributable to noncontrolling interests | (2 | ) | (21 | ) | (19 | ) | |||
NET EARNINGS (LOSS) ATTRIBUTABLE TO INTERNATIONAL PAPER COMPANY | $ | 904 | $ | 938 | $ | 555 | |||
BASIC EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO INTERNATIONAL PAPER COMPANY COMMON SHAREHOLDERS | |||||||||
Earnings (loss) from continuing operations | $ | 2.21 | $ | 2.25 | $ | 1.33 | |||
Discontinued operations, net of taxes | (0.01 | ) | — | (0.03 | ) | ||||
Net earnings (loss) | $ | 2.20 | $ | 2.25 | $ | 1.30 | |||
DILUTED EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO INTERNATIONAL PAPER COMPANY COMMON SHAREHOLDERS | |||||||||
Earnings (loss) from continuing operations | $ | 2.19 | $ | 2.23 | $ | 1.31 | |||
Discontinued operations, net of taxes | (0.01 | ) | — | (0.02 | ) | ||||
Net earnings (loss) | $ | 2.18 | $ | 2.23 | $ | 1.29 | |||
AMOUNTS ATTRIBUTABLE TO INTERNATIONAL PAPER COMPANY COMMON SHAREHOLDERS | |||||||||
Earnings (loss) from continuing operations | $ | 909 | $ | 938 | $ | 568 | |||
Discontinued operations, net of taxes | (5 | ) | — | (13 | ) | ||||
Net earnings (loss) | $ | 904 | $ | 938 | $ | 555 |
In millions for the years ended December 31 | 2016 | 2015 | 2014 | ||||||
NET EARNINGS (LOSS) | $ | 902 | $ | 917 | $ | 536 | |||
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX | |||||||||
Amortization of pension and postretirement prior service costs and net loss: | |||||||||
U.S. plans (less tax of $343, $186 and $154) | 545 | 296 | 242 | ||||||
Pension and postretirement liability adjustments: | |||||||||
U.S. plans (less tax of $283, $206 and $798) | (451 | ) | (329 | ) | (1,253 | ) | |||
Non-U.S. plans (less tax of $4, $0 and $5) | 3 | (2 | ) | (18 | ) | ||||
Change in cumulative foreign currency translation adjustment | 260 | (1,042 | ) | (876 | ) | ||||
Net gains/losses on cash flow hedging derivatives: | |||||||||
Net gains (losses) arising during the period (less tax of $3, $3 and $3) | (6 | ) | (3 | ) | 10 | ||||
Reclassification adjustment for (gains) losses included in net earnings (less tax of $3, $8 and $1) | (7 | ) | 12 | (4 | ) | ||||
TOTAL OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX | 344 | (1,068 | ) | (1,899 | ) | ||||
Comprehensive Income (Loss) | 1,246 | (151 | ) | (1,363 | ) | ||||
Net (Earnings) Loss Attributable to Noncontrolling Interests | 2 | 21 | 19 | ||||||
Other Comprehensive (Income) Loss Attributable to Noncontrolling Interests | 2 | 6 | 12 | ||||||
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO INTERNATIONAL PAPER COMPANY | $ | 1,250 | $ | (124 | ) | $ | (1,332 | ) |
In millions, except per share amounts, at December 31 | 2016 | 2015 | ||||
ASSETS | ||||||
Current Assets | ||||||
Cash and temporary investments | $ | 1,033 | $ | 1,050 | ||
Accounts and notes receivable, less allowances of $70 in 2016 and $70 in 2015 | 3,001 | 2,675 | ||||
Inventories | 2,438 | 2,228 | ||||
Deferred income tax assets | 299 | 312 | ||||
Other current assets | 198 | 212 | ||||
Total Current Assets | 6,969 | 6,477 | ||||
Plants, Properties and Equipment, net | 13,990 | 11,980 | ||||
Forestlands | 456 | 366 | ||||
Investments | 360 | 228 | ||||
Financial Assets of Special Purpose Entities (Note 12) | 7,033 | 7,014 | ||||
Goodwill | 3,364 | 3,335 | ||||
Deferred Charges and Other Assets | 1,173 | 1,131 | ||||
TOTAL ASSETS | $ | 33,345 | $ | 30,531 | ||
LIABILITIES AND EQUITY | ||||||
Current Liabilities | ||||||
Notes payable and current maturities of long-term debt | $ | 239 | $ | 426 | ||
Accounts payable | 2,309 | 2,078 | ||||
Accrued payroll and benefits | 430 | 434 | ||||
Other accrued liabilities | 1,094 | 986 | ||||
Total Current Liabilities | 4,072 | 3,924 | ||||
Long-Term Debt | 11,075 | 8,844 | ||||
Nonrecourse Financial Liabilities of Special Purpose Entities (Note 12) | 6,284 | 6,277 | ||||
Deferred Income Taxes | 3,376 | 3,231 | ||||
Pension Benefit Obligation | 3,400 | 3,548 | ||||
Postretirement and Postemployment Benefit Obligation | 330 | 364 | ||||
Other Liabilities | 449 | 434 | ||||
Commitments and Contingent Liabilities (Note 11) | ||||||
Equity | ||||||
Common stock $1 par value, 2016 - 448.9 shares & 2015 – 448.9 shares | 449 | 449 | ||||
Paid-in capital | 6,189 | 6,243 | ||||
Retained earnings | 4,818 | 4,649 | ||||
Accumulated other comprehensive loss | (5,362 | ) | (5,708 | ) | ||
6,094 | 5,633 | |||||
Less: Common stock held in treasury, at cost, 2016 – 37.671 shares and 2015 – 36.776 shares | 1,753 | 1,749 | ||||
Total Shareholders’ Equity | 4,341 | 3,884 | ||||
Noncontrolling interests | 18 | 25 | ||||
Total Equity | 4,359 | 3,909 | ||||
TOTAL LIABILITIES AND EQUITY | $ | 33,345 | $ | 30,531 |
In millions for the years ended December 31 | 2016 | 2015 | 2014 | ||||||
OPERATING ACTIVITIES | |||||||||
Net earnings (loss) | $ | 902 | $ | 917 | $ | 536 | |||
Depreciation, amortization, and cost of timber harvested | 1,227 | 1,294 | 1,414 | ||||||
Deferred income tax provision (benefit), net | 136 | 281 | (135 | ) | |||||
Restructuring and other charges | 54 | 252 | 881 | ||||||
Pension plan contribution | (750 | ) | (750 | ) | (353 | ) | |||
Periodic pension expense, net | 809 | 461 | 387 | ||||||
Net (gains) losses on sales and impairments of businesses | 70 | 174 | 38 | ||||||
Equity (earnings) losses, net of taxes | (198 | ) | (117 | ) | 200 | ||||
Impairment of goodwill and other intangible assets | — | 137 | 100 | ||||||
Other, net | 157 | 153 | 167 | ||||||
Changes in current assets and liabilities | |||||||||
Accounts and notes receivable | (94 | ) | 7 | (97 | ) | ||||
Inventories | 11 | (131 | ) | (103 | ) | ||||
Accounts payable and accrued liabilities | 98 | (89 | ) | (18 | ) | ||||
Interest payable | 41 | (17 | ) | (18 | ) | ||||
Other | 15 | 8 | 78 | ||||||
CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES | 2,478 | 2,580 | 3,077 | ||||||
INVESTMENT ACTIVITIES | |||||||||
Invested in capital projects | (1,348 | ) | (1,487 | ) | (1,366 | ) | |||
Acquisitions, net of cash acquired | (2,228 | ) | — | — | |||||
Proceeds from divestitures | 108 | 23 | — | ||||||
Proceeds from spinoff | — | — | 411 | ||||||
Investment in Special Purpose Entities | — | (198 | ) | — | |||||
Proceeds from sale of fixed assets | 19 | 37 | 61 | ||||||
Other | (49 | ) | (114 | ) | 34 | ||||
CASH PROVIDED BY (USED FOR) INVESTMENT ACTIVITIES | (3,498 | ) | (1,739 | ) | (860 | ) | |||
FINANCING ACTIVITIES | |||||||||
Repurchase of common stock and payments of restricted stock tax withholding | (132 | ) | (605 | ) | (1,062 | ) | |||
Issuance of common stock | — | 2 | 66 | ||||||
Issuance of debt | 3,830 | 6,873 | 1,982 | ||||||
Reduction of debt | (1,938 | ) | (6,947 | ) | (2,095 | ) | |||
Change in book overdrafts | — | (14 | ) | 30 | |||||
Dividends paid | (733 | ) | (685 | ) | (620 | ) | |||
Acquisition of redeemable noncontrolling interest | — | — | (114 | ) | |||||
Debt tender premiums paid | (31 | ) | (211 | ) | (269 | ) | |||
Other | (14 | ) | (14 | ) | (4 | ) | |||
CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES | 982 | (1,601 | ) | (2,086 | ) | ||||
Effect of Exchange Rate Changes on Cash | 21 | (71 | ) | (52 | ) | ||||
Change in Cash and Temporary Investments | (17 | ) | (831 | ) | 79 | ||||
Cash and Temporary Investments | |||||||||
Beginning of the period | 1,050 | 1,881 | 1,802 | ||||||
End of the period | $ | 1,033 | $ | 1,050 | $ | 1,881 |
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, 2014 | $ | 447 | $ | 6,463 | $ | 4,446 | $ | (2,759 | ) | $ | 492 | $ | 8,105 | $ | 179 | $ | 8,284 | |||||||
Issuance of stock for various plans, net | 2 | 69 | — | — | (212 | ) | 283 | — | 283 | |||||||||||||||
Repurchase of stock | — | — | — | — | 1,062 | (1,062 | ) | — | (1,062 | ) | ||||||||||||||
xpedx spinoff | — | (287 | ) | — | — | — | (287 | ) | — | (287 | ) | |||||||||||||
Dividends | — | — | (633 | ) | — | — | (633 | ) | — | (633 | ) | |||||||||||||
Acquisition of redeemable noncontrolling interests | — | — | 46 | — | — | 46 | — | 46 | ||||||||||||||||
Remeasurement of redeemable noncontrolling interest | — | — | (5 | ) | — | — | (5 | ) | — | (5 | ) | |||||||||||||
Comprehensive income (loss) | — | — | 555 | (1,887 | ) | — | (1,332 | ) | (31 | ) | (1,363 | ) | ||||||||||||
BALANCE, DECEMBER 31, 2014 | 449 | 6,245 | 4,409 | (4,646 | ) | 1,342 | 5,115 | 148 | 5,263 | |||||||||||||||
Issuance of stock for various plans, net | — | 35 | — | — | (198 | ) | 233 | — | 233 | |||||||||||||||
Repurchase of stock | — | — | — | — | 605 | (605 | ) | — | (605 | ) | ||||||||||||||
Dividends | — | — | (698 | ) | — | — | (698 | ) | — | (698 | ) | |||||||||||||
Transactions of equity method investees | — | (37 | ) | — | — | — | (37 | ) | — | (37 | ) | |||||||||||||
Divestiture of noncontrolling interests | — | — | — | — | — | — | (96 | ) | (96 | ) | ||||||||||||||
Comprehensive income (loss) | — | — | 938 | (1,062 | ) | — | (124 | ) | (27 | ) | (151 | ) | ||||||||||||
BALANCE, DECEMBER 31, 2015 | 449 | 6,243 | 4,649 | (5,708 | ) | 1,749 | 3,884 | 25 | 3,909 | |||||||||||||||
Issuance of stock for various plans, net | — | (6 | ) | — | — | (128 | ) | 122 | — | 122 | ||||||||||||||
Repurchase of stock | — | — | — | — | 132 | (132 | ) | — | (132 | ) | ||||||||||||||
Dividends | — | — | (743 | ) | — | — | (743 | ) | — | (743 | ) | |||||||||||||
Transactions of equity method investees | — | (48 | ) | — | — | — | (48 | ) | — | (48 | ) | |||||||||||||
Divestiture of noncontrolling interests | — | — | — | — | — | — | (3 | ) | (3 | ) | ||||||||||||||
Other | — | — | 8 | — | — | 8 | — | 8 | ||||||||||||||||
Comprehensive income (loss) | — | — | 904 | 346 | — | 1,250 | (4 | ) | 1,246 | |||||||||||||||
BALANCE, DECEMBER 31, 2016 | $ | 449 | $ | 6,189 | $ | 4,818 | $ | (5,362 | ) | $ | 1,753 | $ | 4,341 | $ | 18 | $ | 4,359 |
In millions, except per share amounts | 2016 | 2015 | 2014 | ||||||||
Earnings (loss) from continuing operations | $ | 909 | $ | 938 | $ | 568 | |||||
Effect of dilutive securities | — | — | — | ||||||||
Earnings (loss) from continuing operations – assuming dilution | $ | 909 | $ | 938 | $ | 568 | |||||
Average common shares outstanding | 411.1 | 417.4 | 427.7 | ||||||||
Effect of dilutive securities: | |||||||||||
Restricted performance share plan | 4.5 | 3.2 | 4.2 | ||||||||
Stock options (a) | — | — | 0.1 | ||||||||
Average common shares outstanding – assuming dilution | 415.6 | 420.6 | 432.0 | ||||||||
Basic earnings (loss) per share from continuing operations | $ | 2.21 | $ | 2.25 | $ | 1.33 | |||||
Diluted earnings (loss) per share from continuing operations | $ | 2.19 | $ | 2.23 | $ | 1.31 |
(a) | Options to purchase shares were not included in the computation of diluted common shares outstanding if their exercise price exceeded the average market price of the Company’s common stock for each respective reporting date. |
In millions | Defined Benefit Pension and Postretirement Items (a) | Change in Cumulative Foreign Currency Translation Adjustments (a) | Net Gains and Losses on Cash Flow Hedging Derivatives (a) | Total (a) | ||||||||
Balance as of December 31, 2015 | $ | (3,169 | ) | $ | (2,549 | ) | $ | 10 | $ | (5,708 | ) | |
Other comprehensive income (loss) before reclassifications | (448 | ) | 263 | (6 | ) | (191 | ) | |||||
Amounts reclassified from accumulated other comprehensive income | 545 | (3 | ) | (7 | ) | 535 | ||||||
Net Current Period Other Comprehensive Income | 97 | 260 | (13 | ) | 344 | |||||||
Other Comprehensive Income (Loss) Attributable to Noncontrolling Interest | — | 2 | — | 2 | ||||||||
Balance as of December 31, 2016 | $ | (3,072 | ) | $ | (2,287 | ) | $ | (3 | ) | $ | (5,362 | ) |
In millions | Defined Benefit Pension and Postretirement Items (a) | Change in Cumulative Foreign Currency Translation Adjustments (a) | Net Gains and Losses on Cash Flow Hedging Derivatives (a) | Total (a) | ||||||||
Balance as of December 31, 2014 | $ | (3,134 | ) | $ | (1,513 | ) | $ | 1 | $ | (4,646 | ) | |
Other comprehensive income (loss) before reclassifications | (331 | ) | (1,002 | ) | (3 | ) | (1,336 | ) | ||||
Amounts reclassified from accumulated other comprehensive income | 296 | (40 | ) | 12 | 268 | |||||||
Net Current Period Other Comprehensive Income | (35 | ) | (1,042 | ) | 9 | (1,068 | ) | |||||
Other Comprehensive Income (Loss) Attributable to Noncontrolling Interest | — | 6 | — | 6 | ||||||||
Balance as of December 31, 2015 | $ | (3,169 | ) | $ | (2,549 | ) | $ | 10 | $ | (5,708 | ) |
In millions | Defined Benefit Pension and Postretirement Items (a) | Change in Cumulative Foreign Currency Translation Adjustments (a) | Net Gains and Losses on Cash Flow Hedging Derivatives (a) | Total (a) | ||||||||
Balance as of December 31, 2013 | $ | (2,105 | ) | $ | (649 | ) | $ | (5 | ) | $ | (2,759 | ) |
Other comprehensive income (loss) before reclassifications | (1,271 | ) | (863 | ) | 10 | (2,124 | ) | |||||
Amounts reclassified from accumulated other comprehensive income | 242 | (13 | ) | (4 | ) | 225 | ||||||
Net Current Period Other Comprehensive Income | (1,029 | ) | (876 | ) | 6 | (1,899 | ) | |||||
Other Comprehensive Income (Loss) Attributable to Noncontrolling Interest | — | 12 | — | 12 | ||||||||
Balance as of December 31, 2014 | $ | (3,134 | ) | $ | (1,513 | ) | $ | 1 | $ | (4,646 | ) |
Details About Accumulated Other Comprehensive Income Components | Amount Reclassified from Accumulated Other Comprehensive Income (a) | Location of Amount Reclassified from AOCI | |||||||||
2016 | 2015 | 2014 | |||||||||
In millions | |||||||||||
Defined benefit pension and postretirement items: | |||||||||||
Prior-service costs | $ | (37 | ) | $ | (33 | ) | $ | (17 | ) | (b) | Cost of products sold |
Actuarial gains/(losses) | (851 | ) | (449 | ) | (379 | ) | (b) | Cost of products sold | |||
Total pre-tax amount | (888 | ) | (482 | ) | (396 | ) | |||||
Tax (expense)/benefit | 343 | 186 | 154 | ||||||||
Net of tax | (545 | ) | (296 | ) | (242 | ) | |||||
Change in cumulative foreign currency translation adjustments: | |||||||||||
Business acquisition/divestiture | 3 | 40 | 13 | Net (gains) losses on sales and impairments of businesses or Retained earnings | |||||||
Tax (expense)/benefit | — | — | — | ||||||||
Net of tax | 3 | 40 | 13 | ||||||||
Net gains and losses on cash flow hedging derivatives: | |||||||||||
Foreign exchange contracts | 10 | (20 | ) | 3 | (c) | Cost of products sold | |||||
Total pre-tax amount | 10 | (20 | ) | 3 | |||||||
Tax (expense)/benefit | (3 | ) | 8 | 1 | |||||||
Net of tax | 7 | (12 | ) | 4 | |||||||
Total reclassifications for the period | $ | (535 | ) | $ | (268 | ) | $ | (225 | ) |
In millions | 2016 | |||
Early debt extinguishment costs (see Note 13) | $ | 29 | ||
India packaging evaluation write-off | 17 | |||
Gain on sale of investment in Arizona Chemical | (8 | ) | ||
Riegelwood mill conversion costs (a) | 9 | |||
Turkey mill closure (b) | 7 | |||
Total | $ | 54 |
(a) | Includes $3 million of accelerated depreciation, $3 million of inventory write-off charges and $3 million of other charges. |
(b) | Includes $4 million of accelerated depreciation and $3 million of severance charges which is related to 85 employees. |
In millions | 2015 | |||
Early debt extinguishment costs (see Note 13) | $ | 207 | ||
Timber monetization restructuring | 16 | |||
Legal liability reserve adjustment | 15 | |||
Riegelwood mill conversion costs net of proceeds from the sale of Carolina Coated Bristols brand (a) | 8 | |||
Other | 6 | |||
Total | $ | 252 |
(a) | Includes $5 million of severance charges, which is related to 69 employees, $24 million of accelerated depreciation, sale proceeds of $22 million and $1 million of other charges. |
In millions | 2014 | |||
Early debt extinguishment costs (see Note 13) | $ | 276 | ||
Courtland mill shutdown (a) | 554 | |||
Other (b) | 16 | |||
Total | $ | 846 |
In millions | |||
Cash and temporary investments | $ | 12 | |
Accounts and notes receivable | 195 | ||
Inventory | 254 | ||
Other current assets | 11 | ||
Plants, properties and equipment | 1,711 | ||
Goodwill | 19 | ||
Other intangible assets | 212 | ||
Deferred charges and other assets | 6 | ||
Total assets acquired | 2,420 | ||
Accounts payable and accrued liabilities | 111 | ||
Long-term debt | 104 | ||
Other long-term liabilities | 22 | ||
Total liabilities assumed | 237 | ||
Net assets acquired | $ | 2,183 |
In millions | Estimated Fair Value | Average Remaining Useful Life | |||
Asset Class: | (at acquisition date) | ||||
Customer relationships and lists | $ | 95 | 24 years | ||
Trade names, patents, trademarks and developed technology | 113 | 8 years | |||
Other | 4 | 10 years | |||
Total | $ | 212 |
In millions | 2014 | |||
Net Sales | $ | 2,604 | ||
Costs and Expenses | ||||
Cost of products sold | 2,309 | |||
Selling and administrative expenses | 191 | |||
Depreciation, amortization and cost of timber harvested | 9 | |||
Distribution expenses | 69 | |||
Restructuring and other charges | 25 | |||
Impairment of goodwill and other intangibles | — | |||
Other, net | 3 | |||
Earnings (Loss) Before Income Taxes and Equity Earnings | (2 | ) | ||
Income tax provision (benefit) | (1 | ) | ||
Discontinued Operations, Net of Taxes (a) | $ | (1 | ) |
In millions at December 31 | 2016 | 2015 | ||||
Accounts and notes receivable: | ||||||
Trade | $ | 2,759 | $ | 2,480 | ||
Other | 242 | 195 | ||||
Total | $ | 3,001 | $ | 2,675 |
In millions at December 31 | 2016 | 2015 | ||||
Raw materials | $ | 296 | $ | 339 | ||
Finished pulp, paper and packaging products | 1,381 | 1,248 | ||||
Operating supplies | 661 | 563 | ||||
Other | 100 | 78 | ||||
Inventories | $ | 2,438 | $ | 2,228 |
In millions at December 31 | 2016 | 2015 | ||||
Pulp, paper and packaging facilities | $ | 34,259 | $ | 31,466 | ||
Other properties and equipment | 1,311 | 1,242 | ||||
Gross cost | 35,570 | 32,708 | ||||
Less: Accumulated depreciation | 21,580 | 20,728 | ||||
Plants, properties and equipment, net | $ | 13,990 | $ | 11,980 |
In millions | 2016 | 2015 | 2014 | ||||||
Interest expense (a) | $ | 695 | $ | 644 | $ | 677 | |||
Interest income (a) | 175 | 89 | 70 | ||||||
Capitalized interest costs | 28 | 25 | 23 |
(a) | Interest expense and interest income exclude approximately $25 million and $38 million in 2015 and 2014, 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 | Global Cellulose Fibers | Printing Papers | Consumer Packaging | Total | ||||||||||||||
Balance as of January 1, 2016 | |||||||||||||||||||
Goodwill | $3,325 | $— | $2,124 | $1,664 | $7,113 | ||||||||||||||
Accumulated impairment losses (a) | (237 | ) | — | (1,877 | ) | (1,664 | ) | (3,778 | ) | ||||||||||
3,088 | — | 247 | — | 3,335 | |||||||||||||||
Reclassifications and other (b) | (4 | ) | — | 33 | — | 29 | |||||||||||||
Additions/reductions | (5 | ) | (c) | 19 | (d) | (14 | ) | (e) | — | — | |||||||||
Impairment loss | — | — | — | — | — | ||||||||||||||
Balance as of December 31, 2016 | |||||||||||||||||||
Goodwill | 3,316 | 19 | 2,143 | 1,664 | 7,142 | ||||||||||||||
Accumulated impairment losses (a) | (237 | ) | — | (1,877 | ) | (1,664 | ) | (3,778 | ) | ||||||||||
Total | $3,079 | $19 | $266 | $— | $3,364 |
(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 the U.S. |
(d) | Reflects the acquisition of the newly acquired pulp business. |
(e) | Reflects a reduction from tax benefits generated by the deduction of goodwill amortization for tax purposes in Brazil. |
In millions | Industrial Packaging | Global Cellulose Fibers | Printing Papers | Consumer Packaging | Total | ||||||||||||||
Balance as of January 1, 2015 | |||||||||||||||||||
Goodwill | $3,396 | $— | $2,234 | $1,784 | $7,414 | ||||||||||||||
Accumulated impairment losses (a) | (100 | ) | — | (1,877 | ) | (1,664 | ) | (3,641 | ) | ||||||||||
3,296 | — | 357 | 120 | 3,773 | |||||||||||||||
Reclassifications and other (b) | (70 | ) | — | (95 | ) | (3 | ) | (168 | ) | ||||||||||
Additions/reductions | (1 | ) | — | (15 | ) | (c) | (117 | ) | (d) | (133 | ) | ||||||||
Impairment loss | (137 | ) | (e) | — | — | — | (137 | ) | |||||||||||
Balance as of December 31, 2015 | |||||||||||||||||||
Goodwill | 3,325 | — | 2,124 | 1,664 | 7,113 | ||||||||||||||
Accumulated impairment losses (a) | (237 | ) | — | (1,877 | ) | (1,664 | ) | (3,778 | ) | ||||||||||
Total | $3,088 | $— | $247 | $— | $3,335 |
(a) | Represents accumulated goodwill impairment charges since the adoption of ASC 350, “Intangibles – Goodwill and Other” in 2002. |
(b) | Represents the effects of foreign currency translations and reclassifications. |
(c) | Reflects a reduction from tax benefits generated by the deduction of goodwill amortization for tax purposes in Brazil. |
(d) | Reduction due to the sale and de-consolidation of Shandong Sun joint venture in Asia. |
(e) | Reflects a charge for goodwill impairment related to our Brazil Industrial Packaging business. |
2016 | 2015 | |||||||||||
In millions at December 31 | Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | ||||||||
Customer relationships and lists | $ | 605 | $ | 211 | $ | 495 | $ | 166 | ||||
Non-compete agreements | 69 | 64 | 69 | 56 | ||||||||
Tradenames, patents and trademarks, and developed technology | 173 | 56 | 61 | 54 | ||||||||
Land and water rights | 10 | 2 | 33 | 6 | ||||||||
Software | 21 | 20 | 22 | 20 | ||||||||
Other | 48 | 26 | 46 | 29 | ||||||||
Total | $ | 926 | $ | 379 | $ | 726 | $ | 331 |
In millions | 2016 | 2015 | 2014 | ||||||
Amortization expense related to intangible assets | $ | 54 | $ | 60 | $ | 73 |
In millions | 2016 | 2015 | 2014 | ||||||
Earnings (loss) | |||||||||
U.S. | $ | 573 | $ | 1,147 | $ | 565 | |||
Non-U.S. | 383 | 119 | 307 | ||||||
Earnings (loss) from continuing operations before income taxes and equity earnings | $ | 956 | $ | 1,266 | $ | 872 |
In millions | 2016 | 2015 | 2014 | ||||||
Current tax provision (benefit) | |||||||||
U.S. federal | $ | 35 | $ | 62 | $ | 175 | |||
U.S. state and local | — | 12 | 9 | ||||||
Non-U.S. | 76 | 111 | 74 | ||||||
$ | 111 | $ | 185 | $ | 258 | ||||
Deferred tax provision (benefit) | |||||||||
U.S. federal | $ | 138 | $ | 321 | $ | (67 | ) | ||
U.S. state and local | 23 | 30 | 5 | ||||||
Non-U.S. | (25 | ) | (70 | ) | (73 | ) | |||
$ | 136 | $ | 281 | $ | (135 | ) | |||
Income tax provision (benefit) | $ | 247 | $ | 466 | $ | 123 |
In millions | 2016 | 2015 | 2014 | ||||||
Earnings (loss) from continuing operations before income taxes and equity earnings | $ | 956 | $ | 1,266 | $ | 872 | |||
Statutory U.S. income tax rate | 35 | % | 35 | % | 35 | % | |||
Tax expense (benefit) using statutory U.S. income tax rate | 335 | 443 | 305 | ||||||
State and local income taxes | 15 | 27 | 10 | ||||||
Tax rate and permanent differences on non-U.S. earnings | (27 | ) | (44 | ) | (72 | ) | |||
Net U.S. tax on non-U.S. dividends | 21 | 12 | 16 | ||||||
Tax benefit on manufacturing activities | (12 | ) | (14 | ) | (46 | ) | |||
Non-deductible business expenses | 9 | 8 | 7 | ||||||
Non-deductible impairments | — | 109 | 35 | ||||||
Sale of non-strategic assets | 12 | (61 | ) | — | |||||
Tax audits | (14 | ) | — | — | |||||
Subsidiary liquidation | (63 | ) | — | (85 | ) | ||||
Retirement plan dividends | (6 | ) | (5 | ) | (5 | ) | |||
Tax credits | (28 | ) | (15 | ) | (34 | ) | |||
Other, net | 5 | 6 | (8 | ) | |||||
Income tax provision (benefit) | $ | 247 | $ | 466 | $ | 123 | |||
Effective income tax rate | 26 | % | 37 | % | 14 | % |
In millions | 2016 | 2015 | ||||
Deferred income tax assets: | ||||||
Postretirement benefit accruals | $ | 165 | $ | 172 | ||
Pension obligations | 1,344 | 1,403 | ||||
Alternative minimum and other tax credits | 270 | 283 | ||||
Net operating and capital loss carryforwards | 662 | 732 | ||||
Compensation reserves | 257 | 265 | ||||
Other | 251 | 244 | ||||
Gross deferred income tax assets | 2,949 | 3,099 | ||||
Less: valuation allowance | (403 | ) | (430 | ) | ||
Net deferred income tax asset | $ | 2,546 | $ | 2,669 | ||
Deferred income tax liabilities: | ||||||
Intangibles | $ | (231 | ) | $ | (271 | ) |
Plants, properties and equipment | (2,828 | ) | (2,727 | ) | ||
Forestlands, related installment sales, and investment in subsidiary | (2,260 | ) | (2,253 | ) | ||
Gross deferred income tax liabilities | $ | (5,319 | ) | $ | (5,251 | ) |
Net deferred income tax liability | $ | (2,773 | ) | $ | (2,582 | ) |
In millions | 2016 | 2015 | 2014 | ||||||
Balance at January 1 | $ | (150 | ) | $ | (158 | ) | $ | (161 | ) |
(Additions) reductions based on tax positions related to current year | (4 | ) | (6 | ) | (15 | ) | |||
Additions for tax positions of prior years | (3 | ) | (6 | ) | (1 | ) | |||
Reductions for tax positions of prior years | 33 | 7 | 9 | ||||||
Settlements | 19 | 2 | — | ||||||
Expiration of statutes of limitations | 5 | 4 | 2 | ||||||
Currency translation adjustment | 2 | 7 | 8 | ||||||
Balance at December 31 | $ | (98 | ) | $ | (150 | ) | $ | (158 | ) |
In millions | 2016 | 2015 | 2014 | ||||||
Special items | $ | (51 | ) | $ | (84 | ) | $ | (372 | ) |
Tax-related adjustments: | |||||||||
Return to accrual | 23 | 23 | — | ||||||
Internal restructurings | (63 | ) | (62 | ) | (90 | ) | |||
Settlement of tax audits and legislative changes | (14 | ) | — | 10 | |||||
Tax rate changes | 23 | — | — | ||||||
Other tax adjustments | 8 | 2 | (1 | ) | |||||
Income tax provision (benefit) related to special items | $ | (74 | ) | $ | (121 | ) | $ | (453 | ) |
In millions | 2017 Through 2026 | 2027 Through 2036 | Indefinite | Total | ||||||||
U.S. federal and non-U.S. NOLs | $ | 67 | $ | 9 | $ | 455 | $ | 531 | ||||
State taxing jurisdiction NOLs | 139 | 52 | — | 191 | ||||||||
U.S. federal, non- U.S. and state tax credit carryforwards | 176 | 21 | 183 | 380 | ||||||||
U.S. federal and state capital loss carryforwards | 22 | — | — | 22 | ||||||||
Total | $ | 404 | $ | 82 | $ | 638 | $ | 1,124 |
In millions | 2017 | 2018 | 2019 | 2020 | 2021 | Thereafter | ||||||||||||
Lease obligations | $ | 119 | $ | 91 | $ | 69 | $ | 51 | $ | 38 | $ | 125 | ||||||
Purchase obligations (a) | 3,165 | 635 | 525 | 495 | 460 | 2,332 | ||||||||||||
Total | $ | 3,284 | $ | 726 | $ | 594 | $ | 546 | $ | 498 | $ | 2,457 |
(a) | Includes $2.0 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. Also includes $1.1 billion relating to fiber supply agreements assumed in conjunction with the 2016 acquisition of Weyerhaeuser's pulp business. |
• | In March 2016, the Company and other PRPs received a special notice letter from the EPA (i) inviting participation in implementing a remedy for a portion of the site, and (ii) demanding reimbursement of EPA past costs totaling $37 million, including $19 million in past costs previously demanded by the EPA. The Company responded to the special notice letter. In December 2016, EPA issued a unilateral administrative order to the Company and other PRPs to perform the remedy. The unilateral administrative order has not yet become effective and the Company is evaluating its response. |
• | In April 2016, the EPA issued a separate unilateral administrative order to the Company and certain other PRPs for a time-critical removal action (TCRA) of PCB-contaminated sediments from a different portion of the site. The Company responded to the unilateral administrative order and agreed along with |
• | In October 2016, the Company and another PRP received a special notice letter from the EPA inviting participation in the remedial design component of the landfill remedy for the Allied Paper Mill. The record of decision establishing the final landfill remedy for the Allied Paper Mill was issued by the EPA in September 2016. The Company responded to the Allied Paper Mill special notice letter in late December 2016. |
In millions | 2016 | 2015 | 2014 | ||||||
Revenue (a) | $ | 95 | $ | 43 | $ | 38 | |||
Expense (a) | 128 | 81 | 72 | ||||||
Cash receipts (b) | 77 | 21 | 22 | ||||||
Cash payments (c) | 98 | 71 | 73 |
(a) | The net expense related to the Company’s interest in the Entities is included in the accompanying consolidated statement of operations, as International Paper has and intends to effect its legal right to offset as discussed above. After formation of the 2015 Financing Entities, the revenue and expense are included in Interest expense, net in the accompanying consolidated statement of operations. |
(b) | The cash receipts are equity distributions from the Entities to International Paper prior to the formation of the 2015 Financing Entities. After formation of the 2015 Financing Entities, cash receipts are interest received on the Financial assets of special purpose entities. |
(c) | The cash payments are interest payments on the associated debt obligations discussed above. After formation of the 2015 Financing Entities, the payments represent interest paid on Nonrecourse financial liabilities of special purpose entities. |
In millions | 2016 | 2015 | 2014 | ||||||
Revenue (a) | $ | 37 | $ | 27 | $ | 26 | |||
Expense (b) | 37 | 27 | 25 | ||||||
Cash receipts (c) | 15 | 7 | 7 | ||||||
Cash payments (d) | 27 | 18 | 18 |
(a) | The revenue is included in Interest expense, net in the accompanying consolidated statement of operations and includes approximately $19 million for the years ended December 31, 2016, 2015 and 2014, respectively, of accretion income for the amortization of the purchase accounting adjustment on the Financial assets of special purpose entities. |
(b) | The expense is included in Interest expense, net in the accompanying consolidated statement of operations and includes approximately $7 million for the years ended |
(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 | 2016 | 2015 | 2014 | ||||||
Debt reductions (a) | $ | 266 | $ | 2,151 | $ | 1,625 | |||
Pre-tax early debt extinguishment costs (b) | 29 | 207 | 276 |
(a) | Reductions related to notes with interest rates ranging from 2.00% to 9.38% with original maturities from 2015 to 2030 for the years ended December 31, 2016, 2015 and 2014. Includes the $630 million payment for a portion of the Special Purpose Entity Liability for the year ended December 31, 2015 (see Note 12 Variable Interest Entities). |
(b) | Amounts are included in Restructuring and other charges in the accompanying consolidated statements of operations. |
In millions at December 31 | 2016 | 2015 | ||||
8.7% note – due 2038 | $ | 264 | $ | 264 | ||
9 3/8% note – due 2019 | 295 | 295 | ||||
7.95% debenture – due 2018 | 382 | 648 | ||||
7.5% note – due 2021 | 598 | 603 | ||||
7.3% note – due 2039 | 721 | 721 | ||||
6 7/8% notes – due 2023 – 2029 | 131 | 131 | ||||
6.65% note – due 2037 | 4 | 4 | ||||
6.4% to 7.75% debentures due 2025 – 2027 | 142 | 142 | ||||
6 5/8% note – due 2018 | 72 | 185 | ||||
6.0% note – due 2041 | 585 | 585 | ||||
5.25% note – due 2016 | — | 261 | ||||
5.00% to 5.15% notes – due 2035 – 2046 | 1,280 | 1,280 | ||||
4.8% note - due 2044 | 796 | 796 | ||||
4.75% note – due 2022 | 810 | 817 | ||||
3.00% to 4.40% notes – due 2024 – 2047 | 3,786 | 1,490 | ||||
Floating rate notes – due 2016 – 2025 (a) | 763 | 438 | ||||
Environmental and industrial development bonds – due 2016 – 2035 (b) | 681 | 594 | ||||
Short-term notes (c) | — | 5 | ||||
Other (d) | 4 | 11 | ||||
Total (e) | 11,314 | 9,270 | ||||
Less: current maturities | 239 | 426 | ||||
Long-term debt | $ | 11,075 | $ | 8,844 |
(a) | The weighted average interest rate on these notes was 2.2% in 2016 and 2.9% in 2015. |
(b) | The weighted average interest rate on these bonds was 5.9% in 2016 and 5.8% in 2015. |
(c) | The weighted average interest rate was 2.2% in 2015. Includes$5 million at December 31, 2015 related to non-U.S. denominated borrowings with a weighted average interest rate of 2.2% in 2015. |
(d) | Includes $2 million at December 31, 2016 and $8 million at December 31, 2015 related to the unamortized gain on interest rate swap unwinds (see Note 14 Derivatives and Hedging Instruments). |
(e) | The fair market value was approximately $12.0 billion at December 31, 2016 and $9.9 billion at December 31, 2015. |
In millions | December 31, 2016 | December 31, 2015 | ||
Derivatives in Cash Flow Hedging Relationships: | ||||
Foreign exchange contracts (a) | 275 | 290 | ||
Derivatives in Fair Value Hedging Relationships: | ||||
Interest rate contracts | — | 17 | ||
Derivatives Not Designated as Hedging Instruments: | ||||
Electricity contract | 6 | 16 | ||
Foreign exchange contracts | 24 | 35 | ||
Interest rate contracts | — | 38 |
(a) | These contracts had maturities of two years or less as of December 31, 2016. |
Gain (Loss) Recognized in AOCI on Derivatives (Effective Portion) | |||||||||
In millions | 2016 | 2015 | 2014 | ||||||
Foreign exchange contracts | $ | 4 | $ | (3 | ) | $ | 10 | ||
Interest rate contracts | (10 | ) | — | — | |||||
Total | $ | (6 | ) | $ | (3 | ) | $ | 10 |
Gain (Loss) Reclassified from AOCI into Income (Effective Portion) | Location of Gain (Loss) Reclassified from AOCI into Income (Effective Portion) | ||||||||||
In millions | 2016 | 2015 | 2014 | ||||||||
Derivatives in Cash Flow Hedging Relationships: | |||||||||||
Foreign exchange contracts | $ | 7 | $ | (12 | ) | $ | 4 | Cost of products sold | |||
Total | $ | 7 | $ | (12 | ) | $ | 4 |
Gain (Loss) Recognized in Income | Location of Gain (Loss) in Consolidated Statement of Operations | |||||||||||||||
In millions | 2016 | 2015 | 2014 | |||||||||||||
Derivatives in Fair Value Hedging Relationships: | ||||||||||||||||
Interest rate contracts | $ | — | $ | 3 | $ | 1 | Interest expense, net | |||||||||
Debt | — | (3 | ) | (1 | ) | Interest expense, net | ||||||||||
Total | $ | — | $ | — | $ | — | ||||||||||
Derivatives Not Designated as Hedging Instruments: | ||||||||||||||||
Electricity Contracts | $ | — | $ | (7 | ) | $ | (2 | ) | Cost of products sold | |||||||
Foreign exchange contracts | — | (4 | ) | (1 | ) | Cost of products sold | ||||||||||
Interest rate contracts | 5 | (a) | 13 | (b) | 12 | (c) | Interest expense, net | |||||||||
Total | $ | 5 | $ | 2 | $ | 9 |
(a) | Excluding gain of $2 million related to debt reduction recorded to Restructuring and other charges. |
(b) | Excluding gain of $3 million related to debt reduction recorded to Restructuring and other charges. |
(c) | Excluding gain of $7 million, net related to debt issuance and debt reduction recorded to Restructuring and other charges. |
2016 | 2015 | |||||||||||||||||||||||
In millions | Issued | Terminated | Undesignated | Issued | Terminated | Undesignated | ||||||||||||||||||
Second Quarter | $ | — | $ | — | $ | — | $ | — | $ | 175 | $ | 38 | ||||||||||||
First Quarter | — | 55 | — | — | — | — | ||||||||||||||||||
Total | $ | — | $ | 55 | $ | — | $ | — | $ | 175 | $ | 38 |
Assets | Liabilities | |||||||||||||||
In millions | December 31, 2016 | December 31, 2015 | December 31, 2016 | December 31, 2015 | ||||||||||||
Derivatives designated as hedging instruments | ||||||||||||||||
Foreign exchange contracts – cash flow | $ | 3 | (a) | $ | 5 | (a) | $ | 4 | (b) | $ | 1 | (b) | ||||
Total derivatives designated as hedging instruments | $ | 3 | $ | 5 | $ | 4 | $ | 1 | ||||||||
Derivatives not designated as hedging instruments | ||||||||||||||||
Electricity contract | $ | — | $ | — | $ | 2 | (b) | $ | 7 | (c) | ||||||
Total derivatives not designated as hedging instruments | $ | — | $ | — | $ | 2 | $ | 7 | ||||||||
Total derivatives | $ | 3 | $ | 5 | $ | 6 | $ | 8 |
(a) | Included in Other current assets in the accompanying consolidated balance sheet. |
(b) | Included in Other accrued liabilities in the accompanying consolidated balance sheet. |
(c) | Includes $4 million recorded in Other accrued liabilities and $3 million recorded in Other liabilities in the accompanying consolidated balance sheet. |
Common Stock | ||||
In thousands | Issued | Treasury | ||
Balance at January 1, 2014 | 447,222 | 10,868 | ||
Issuance of stock for various plans, net | 1,632 | (4,668 | ) | |
Repurchase of stock | — | 22,534 | ||
Balance at December 31, 2014 | 448,854 | 28,734 | ||
Issuance of stock for various plans, net | 62 | (4,230 | ) | |
Repurchase of stock | — | 12,272 | ||
Balance at December 31, 2015 | 448,916 | 36,776 | ||
Issuance of stock for various plans, net | — | (2,745 | ) | |
Repurchase of stock | — | 3,640 | ||
Balance at December 31, 2016 | 448,916 | 37,671 |
2016 | 2015 | |||||||||||
In millions | U.S. Plans | Non- U.S. Plans | U.S. Plans | Non- U.S. Plans | ||||||||
Change in projected benefit obligation: | ||||||||||||
Benefit obligation, January 1 | $ | 14,438 | $ | 204 | $ | 14,741 | $ | 233 | ||||
Service cost | 158 | 4 | 161 | 6 | ||||||||
Interest cost | 580 | 9 | 597 | 10 | ||||||||
Settlements | (1,222 | ) | (2 | ) | (43 | ) | (12 | ) | ||||
Actuarial loss (gain) | 495 | 35 | (254 | ) | (1 | ) | ||||||
Acquisitions | 1 | — | — | — | ||||||||
Plan amendments | — | (1 | ) | — | — | |||||||
Benefits paid | (767 | ) | (9 | ) | (764 | ) | (7 | ) | ||||
Effect of foreign currency exchange rate movements | — | (21 | ) | — | (25 | ) | ||||||
Benefit obligation, December 31 | $ | 13,683 | $ | 219 | $ | 14,438 | $ | 204 | ||||
Change in plan assets: | ||||||||||||
Fair value of plan assets, January 1 | $ | 10,923 | $ | 155 | $ | 10,918 | $ | 180 | ||||
Actual return on plan assets | 607 | 17 | (1 | ) | 4 | |||||||
Company contributions | 771 | 8 | 813 | 9 | ||||||||
Benefits paid | (767 | ) | (9 | ) | (764 | ) | (7 | ) | ||||
Settlements | (1,222 | ) | (2 | ) | (43 | ) | (12 | ) | ||||
Effect of foreign currency exchange rate movements | — | (16 | ) | — | (19 | ) | ||||||
Fair value of plan assets, December 31 | $ | 10,312 | $ | 153 | $ | 10,923 | $ | 155 | ||||
Funded status, December 31 | $ | (3,371 | ) | $ | (66 | ) | $ | (3,515 | ) | $ | (49 | ) |
Amounts recognized in the consolidated balance sheet: | ||||||||||||
Non-current asset | $ | — | $ | 6 | $ | — | $ | 7 | ||||
Current liability | (40 | ) | (3 | ) | (22 | ) | (2 | ) | ||||
Non-current liability | (3,331 | ) | (69 | ) | (3,493 | ) | (54 | ) | ||||
$ | (3,371 | ) | $ | (66 | ) | $ | (3,515 | ) | $ | (49 | ) |
Amounts recognized in accumulated other comprehensive income under ASC 715 (pre-tax): | ||||||||||||
Prior service cost | $ | 125 | $ | — | $ | 166 | $ | — | ||||
Net actuarial loss | 4,757 | 61 | 4,899 | 42 | ||||||||
$ | 4,882 | $ | 61 | $ | 5,065 | $ | 42 |
In millions | U.S. Plans | Non- U.S. Plans | ||||
Current year actuarial (gain) loss | $ | 703 | $ | 27 | ||
Amortization of actuarial loss | (400 | ) | (1 | ) | ||
Current year prior service cost | — | (1 | ) | |||
Amortization of prior service cost | (41 | ) | — | |||
Settlements | (445 | ) | — | |||
Effect of foreign currency exchange rate movements | — | (6 | ) | |||
$ | (183 | ) | $ | 19 |
2016 | 2015 | |||||||||||
In millions | U.S. Plans | Non-U.S. Plans | U.S. Plans | Non-U.S. Plans | ||||||||
Projected benefit obligation | $ | 13,683 | $ | 190 | $ | 14,438 | $ | 182 | ||||
Accumulated benefit obligation | 13,535 | 177 | 14,282 | 168 | ||||||||
Fair value of plan assets | 10,312 | 118 | 10,923 | 126 |
2016 | 2015 | 2014 | ||||||||||||||||
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 | $ | 158 | $ | 4 | $ | 161 | $ | 6 | $ | 145 | $ | 5 | ||||||
Interest cost | 580 | 9 | 597 | 10 | 600 | 13 | ||||||||||||
Expected return on plan assets | (815 | ) | (10 | ) | (783 | ) | (11 | ) | (762 | ) | (14 | ) | ||||||
Actuarial loss / (gain) | 400 | 1 | 428 | 1 | 374 | — | ||||||||||||
Amortization of prior service cost | 41 | — | 43 | — | 30 | — | ||||||||||||
Curtailment loss / (gain) | — | — | — | — | — | (4 | ) | |||||||||||
Settlement loss | 445 | — | 15 | — | — | — | ||||||||||||
Net periodic pension expense (a) | $ | 809 | $ | 4 | $ | 461 | $ | 6 | $ | 387 | $ | — |
2016 | 2015 | 2014 | ||||||||||
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 | % | 3.88 | % | 4.40 | % | 4.64 | % | 4.10 | % | 4.72 | % |
Rate of compensation increase | 3.75 | % | 4.20 | % | 3.75 | % | 4.12 | % | 3.75 | % | 4.03 | % |
Actuarial assumptions used to determine net periodic pension cost for years ended December 31: | ||||||||||||
Discount rate (a) | 4.05 | % | 4.72 | % | 4.10 | % | 4.72 | % | 4.65 | % | 5.07 | % |
Expected long-term rate of return on plan assets (b) | 7.75 | % | 6.55 | % | 7.75 | % | 6.64 | % | 7.75 | % | 7.53 | % |
Rate of compensation increase | 3.75 | % | 4.03 | % | 3.75 | % | 4.03 | % | 3.75 | % | 4.13 | % |
(b) | Represents the expected rate of return for International Paper's qualified pension plan for 2014. The weighted average rate for the Temple-Inland Retirement Plan was 7.00% for 2014. |
In millions | 2017 | ||
Expense/(Income): | |||
Discount rate | $ | 33 | |
Expected long-term rate of return on plan assets | 26 | ||
Rate of compensation increase | (1 | ) |
Asset Class | 2016 | 2015 | Target Allocations | ||
Equity accounts | 51 | % | 48 | % | 43% - 54% |
Fixed income accounts | 27 | % | 33 | % | 25% - 35% |
Real estate accounts | 10 | % | 10 | % | 7% - 13% |
Other | 12 | % | 9 | % | 8% - 17% |
Total | 100 | % | 100 | % |
Fair Value Measurement at December 31, 2016 | ||||||||||||
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 | $ | 2,208 | $ | 1,380 | $ | 828 | $ | — | ||||
Equities – international | 2,575 | 1,806 | 769 | — | ||||||||
Corporate bonds | 1,018 | — | 1,018 | — | ||||||||
Government securities | 870 | — | 870 | — | ||||||||
Mortgage backed securities | 41 | — | 40 | 1 | ||||||||
Other fixed income | 245 | — | 234 | 11 | ||||||||
Commodities | 324 | — | 324 | — | ||||||||
Hedge funds | — | — | — | — | ||||||||
Private equity | — | — | — | — | ||||||||
Real estate | — | — | — | — | ||||||||
Derivatives | (71 | ) | — | — | (71 | ) | ||||||
Cash and cash equivalents | 322 | 322 | — | — | ||||||||
Other investments: (a) | ||||||||||||
Hedge funds | 891 | |||||||||||
Private equity | 472 | |||||||||||
Real estate | 1,015 | |||||||||||
Risk parity funds | 402 | |||||||||||
Total Investments | $ | 10,312 | $ | 3,508 | $ | 4,083 | $ | (59 | ) |
Fair Value Measurement at December 31, 2015 | ||||||||||||
Asset Class | Total | Quoted Prices in Active Markets For Identical Assets (Level 1) | Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||
In millions | ||||||||||||
Equities – domestic | $ | 2,150 | $ | 1,382 | $ | 768 | $ | — | ||||
Equities – international | 2,563 | 1,818 | 745 | — | ||||||||
Corporate bonds | 1,286 | — | 1,286 | — | ||||||||
Government securities | 518 | — | 518 | — | ||||||||
Mortgage backed securities | 217 | — | 217 | — | ||||||||
Other fixed income | 275 | — | 265 | 10 | ||||||||
Commodities | 118 | — | 118 | — | ||||||||
Hedge funds | — | — | — | — | ||||||||
Private equity | — | — | — | — | ||||||||
Real estate | — | — | — | — | ||||||||
Derivatives | (19 | ) | — | 1 | (20 | ) | ||||||
Cash and cash equivalents | 975 | 975 | — | — | ||||||||
Other investments: (a) | ||||||||||||
Hedge funds | 894 | |||||||||||
Private equity | 492 | |||||||||||
Real estate | 1,094 | |||||||||||
Risk parity funds | 360 | |||||||||||
Total Investments | $ | 10,923 | $ | 4,175 | $ | 3,918 | $ | (10 | ) |
Other Investments at December 31, 2016 | ||||||||
Investment | Fair Value | Unfunded Commitments | Redemption Frequency | Remediation Notice Period | ||||
Hedge funds | $ | 891 | $ | — | Daily to annually | 1 - 100 days | ||
Private equity | 472 | 226 | None | None | ||||
Real estate | 1,015 | 224 | Quarterly | 45 - 60 days | ||||
Risk parity funds | 402 | — | Monthly | 5 - 15 days | ||||
Total | $ | 2,780 | $ | 450 |
Other Investments at December 31, 2015 | ||||||||
Investment | Fair Value | Unfunded Commitments | Redemption Frequency | Remediation Notice Period | ||||
Hedge funds | $ | 894 | $ | — | Daily to annually | 1 - 100 days | ||
Private equity | 492 | 102 | None | None | ||||
Real estate | 1,094 | 59 | Quarterly | 45 - 60 days | ||||
Risk parity funds | 360 | — | Monthly | 5 - 15 days | ||||
Total | $ | 2,840 | $ | 161 |
In millions | Mortgage backed securities | Other fixed income | Derivatives | Total | ||||||||
Beginning balance at December 31, 2015 | $ | — | $ | 10 | $ | (20 | ) | $ | (10 | ) | ||
Actual return on plan assets: | ||||||||||||
Relating to assets still held at the reporting date | — | 1 | (66 | ) | (65 | ) | ||||||
Relating to assets sold during the period | — | — | (24 | ) | (24 | ) | ||||||
Purchases, sales and settlements | 1 | — | 39 | 40 | ||||||||
Transfers in and/or out of Level 3 | — | — | — | — | ||||||||
Ending balance at December 31, 2016 | $ | 1 | $ | 11 | $ | (71 | ) | $ | (59 | ) |
In millions | |||
2017 | $ | 800 | |
2018 | 788 | ||
2019 | 796 | ||
2020 | 804 | ||
2021 | 812 | ||
2022 – 2026 | 4,137 |
In millions | 2016 | 2015 | 2014 | |||||||||||||||
U.S. Plans | Non- U.S. Plans | U.S. Plans | Non- U.S. Plans | U.S. Plans | Non- U.S. Plans | |||||||||||||
Service cost | $ | 1 | $ | — | $ | 1 | $ | 1 | $ | 1 | $ | 1 | ||||||
Interest cost | 11 | 3 | 11 | 5 | 14 | 6 | ||||||||||||
Actuarial loss | 5 | 2 | 6 | 1 | 5 | 1 | ||||||||||||
Amortization of prior service credits | (4 | ) | (4 | ) | (10 | ) | (2 | ) | (13 | ) | (1 | ) | ||||||
Net postretirement (benefit) expense | $ | 13 | $ | 1 | $ | 8 | $ | 5 | $ | 7 | $ | 7 |
2016 | 2015 | 2014 | ||||||||||
U.S. Plans | Non- U.S. Plans | U.S. Plans | Non- U.S. Plans | U.S. Plans | Non- U.S. Plans | |||||||
Discount rate | 4.20 | % | 12.23 | % | 3.90 | % | 11.52 | % | 4.50 | % | 11.94 | % |
2016 | 2015 | |||||||
U.S. Plans | Non- U.S. Plans | U.S. Plans | Non- U.S. Plans | |||||
Discount rate | 4.00 | % | 10.53 | % | 4.20 | % | 12.23 | % |
Health care cost trend rate assumed for next year | 6.50 | % | 10.90 | % | 7.00 | % | 11.41 | % |
Rate that the cost trend rate gradually declines to | 5.00 | % | 5.81 | % | 5.00 | % | 5.94 | % |
Year that the rate reaches the rate it is assumed to remain | 2022 | 2027 | 2022 | 2026 |
In millions | 2016 | 2015 | ||||||||||
U.S. Plans | Non- U.S. Plans | U.S. Plans | Non- U.S. Plans | |||||||||
Change in projected benefit obligation: | ||||||||||||
Benefit obligation, January 1 | $ | 275 | $ | 45 | $ | 306 | $ | 59 | ||||
Service cost | 1 | — | 1 | 1 | ||||||||
Interest cost | 11 | 3 | 11 | 5 | ||||||||
Participants’ contributions | 5 | — | 12 | — | ||||||||
Actuarial (gain) loss | 31 | 5 | — | (1 | ) | |||||||
Plan amendments | — | (35 | ) | — | 1 | |||||||
Benefits paid | (44 | ) | (1 | ) | (57 | ) | (1 | ) | ||||
Less: Federal subsidy | 1 | — | 2 | — | ||||||||
Currency Impact | — | 6 | — | (19 | ) | |||||||
Benefit obligation, December 31 | $ | 280 | $ | 23 | $ | 275 | $ | 45 | ||||
Change in plan assets: | ||||||||||||
Fair value of plan assets, January 1 | $ | — | $ | — | $ | — | $ | — | ||||
Company contributions | 39 | 1 | 45 | 1 | ||||||||
Participants’ contributions | 5 | — | 12 | — | ||||||||
Benefits paid | (44 | ) | (1 | ) | (57 | ) | (1 | ) | ||||
Fair value of plan assets, December 31 | $ | — | $ | — | $ | — | $ | — | ||||
Funded status, December 31 | $ | (280 | ) | $ | (23 | ) | $ | (275 | ) | $ | (45 | ) |
Amounts recognized in the consolidated balance sheet under ASC 715: | ||||||||||||
Current liability | $ | (29 | ) | $ | (2 | ) | $ | (29 | ) | $ | (2 | ) |
Non-current liability | (251 | ) | (21 | ) | (246 | ) | (43 | ) | ||||
$ | (280 | ) | $ | (23 | ) | $ | (275 | ) | $ | (45 | ) | |
Amounts recognized in accumulated other comprehensive income under ASC 715 (pre-tax): | ||||||||||||
Net actuarial loss (gain) | $ | 68 | $ | 21 | $ | 42 | $ | 15 | ||||
Prior service credit | (8 | ) | (34 | ) | (12 | ) | (2 | ) | ||||
$ | 60 | $ | (13 | ) | $ | 30 | $ | 13 |
In millions | U.S. Plans | Non- U.S. Plans | ||||
Current year actuarial loss | $ | 31 | $ | 5 | ||
Amortization of actuarial (loss) gain | (5 | ) | (2 | ) | ||
Current year prior service cost | — | (34 | ) | |||
Amortization of prior service credit | 4 | 4 | ||||
Currency impact | — | 1 | ||||
$ | 30 | $ | (26 | ) |
In millions | Benefit Payments | Subsidy Receipts | Benefit Payments | ||||||
U.S. Plans | U.S. Plans | Non- U.S. Plans | |||||||
2017 | $ | 31 | $ | 2 | $ | 2 | |||
2018 | 29 | 1 | 2 | ||||||
2019 | 27 | 1 | 1 | ||||||
2020 | 26 | 1 | 1 | ||||||
2021 | 24 | 1 | — | ||||||
2022 – 2026 | 99 | 6 | 3 |
Options (a) | Weighted Average Exercise Price | Weighted Average Remaining Life (years) | Aggregate Intrinsic Value (thousands) | ||||||
Outstanding at December 31, 2013 | 1,752,789 | $39.80 | 0.67 | $16,175 | |||||
Granted | 3,247 | 49.13 | |||||||
Exercised | (1,634,858 | ) | 39.80 | ||||||
Expired | (49,286 | ) | 41.50 | ||||||
Outstanding at December 31, 2014 | 71,892 | 39.03 | 0.18 | 1,046 | |||||
Granted | — | — | |||||||
Exercised | (62,477 | ) | 39.05 | ||||||
Expired | (9,415 | ) | 38.92 | ||||||
Outstanding at December 31, 2015 | — | — | 0.00 | — | |||||
Granted | — | — | |||||||
Exercised | — | — | |||||||
Expired | — | — | |||||||
Outstanding at December 31, 2016 | — | $— | 0.00 | $— |
(a) | The table includes options outstanding under an acquired company plan under which options may no longer be granted. |
Twelve Months Ended December 31, 2016 | |
Expected volatility | 22.36%-30.84% |
Risk-free interest rate | 0.67%-1.31% |
Share/Units | Weighted Average Grant Date Fair Value | ||||
Outstanding at December 31, 2013 | 8,117,489 | $31.20 | |||
Granted | 3,682,663 | 46.82 | |||
Shares issued | (4,025,111 | ) | 37.18 | ||
Forfeited | (499,107 | ) | 43.10 | ||
Outstanding at December 31, 2014 | 7,275,934 | 34.98 | |||
Granted | 1,863,623 | 53.25 | |||
Shares issued | (2,959,160 | ) | 37.09 | ||
Forfeited | (322,664 | ) | 53.97 | ||
Outstanding at December 31, 2015 | 5,857,733 | 38.69 | |||
Granted | 2,617,982 | 37.26 | |||
Shares issued | (2,316,085 | ) | 43.82 | ||
Forfeited | (209,500 | ) | 43.61 | ||
Outstanding at December 31, 2016 | 5,950,130 | $35.89 |
Shares | Weighted Average Grant Date Fair Value | ||||
Outstanding at December 31, 2013 | 112,374 | $36.24 | |||
Granted | 89,500 | 48.19 | |||
Shares issued | (83,275 | ) | 33.78 | ||
Forfeited | (4,000 | ) | 45.88 | ||
Outstanding at December 31, 2014 | 114,599 | 47.03 | |||
Granted | 36,300 | 50.06 | |||
Shares issued | (27,365 | ) | 45.35 | ||
Forfeited | (3,166 | ) | 50.04 | ||
Outstanding at December 31, 2015 | 120,368 | 48.24 | |||
Granted | 117,881 | 42.81 | |||
Shares issued | (59,418 | ) | 47.14 | ||
Forfeited | (9,500 | ) | 39.36 | ||
Outstanding at December 31, 2016 | 169,331 | $45.34 |
In millions | 2016 | 2015 | 2014 | ||||||
Total stock-based compensation expense (included in selling and administrative expense) | $ | 129 | $ | 114 | $ | 118 | |||
Income tax benefits related to stock-based compensation | 34 | 88 | 92 |
In millions | 2016 | 2015 | |||||
Current assets | $ | 774 | $ | 455 | |||
Noncurrent assets | 1,351 | 968 | |||||
Current liabilities | 406 | 665 | |||||
Noncurrent liabilities | 1,422 | 715 | |||||
Noncontrolling interests | 22 | 21 |
In millions | 2016 | 2015 | 2014 | ||||||||
Net sales | $ | 1,927 | $ | 1,931 | $ | 2,138 | |||||
Gross profit | 957 | 971 | 772 | ||||||||
Income from continuing operations | 419 | 254 | (387 | ) | |||||||
Net income attributable to Ilim | 391 | 237 | (360 | ) |
In millions | 2016 | 2015 | 2014 | ||||||||
Industrial Packaging | $ | 14,191 | $ | 14,484 | $ | 14,944 | |||||
Global Cellulose Fibers | 1,092 | 975 | 1,046 | ||||||||
Printing Papers | 4,058 | 4,056 | 4,674 | ||||||||
Consumer Packaging | 1,954 | 2,940 | 3,403 | ||||||||
Corporate and Intersegment Sales | (216 | ) | (90 | ) | (450 | ) | |||||
Net Sales | $ | 21,079 | $ | 22,365 | $ | 23,617 |
In millions | 2016 | 2015 | 2014 | ||||||||
Industrial Packaging | $ | 1,651 | $ | 1,853 | $ | 1,896 | |||||
Global Cellulose Fibers | (180 | ) | 68 | 61 | |||||||
Printing Papers | 540 | 465 | (77 | ) | |||||||
Consumer Packaging | 191 | (25 | ) | 178 | |||||||
Operating Profit | 2,202 | 2,361 | 2,058 | ||||||||
Earnings (loss) from continuing operations before income taxes and equity earnings | 956 | 1,266 | 872 | ||||||||
Interest expense, net | 520 | 555 | 601 | ||||||||
Noncontrolling interests / equity earnings adjustment (a) | 1 | 8 | 2 | ||||||||
Corporate items, net | 69 | 36 | 51 | ||||||||
Corporate special items, net | 46 | 238 | 320 | ||||||||
Non-operating pension expense | 610 | 258 | 212 | ||||||||
Adjusted Operating Profit | $ | 2,202 | $ | 2,361 | $ | 2,058 |
In millions | 2016 | 2015 | 2014 | ||||||||
Industrial Packaging | $ | 7 | $ | — | $ | 7 | |||||
Global Cellulose Fibers | — | — | — | ||||||||
Printing Papers | — | — | 554 | ||||||||
Consumer Packaging | 9 | 10 | 8 | ||||||||
Corporate | 38 | 242 | 277 | ||||||||
Restructuring and Other Charges | $ | 54 | $ | 252 | $ | 846 |
In millions | 2016 | 2015 | |||||
Industrial Packaging | $ | 14,565 | $ | 14,483 | |||
Global Cellulose Fibers | 3,789 | 983 | |||||
Printing Papers | 3,958 | 3,713 | |||||
Consumer Packaging | 1,736 | 2,115 | |||||
Corporate and other (b) | 9,297 | 9,237 | |||||
Assets | $ | 33,345 | $ | 30,531 |
In millions | 2016 | 2015 | 2014 | ||||||||
Industrial Packaging | $ | 816 | $ | 858 | $ | 754 | |||||
Global Cellulose Fibers | 174 | 129 | 75 | ||||||||
Printing Papers | 215 | 232 | 243 | ||||||||
Consumer Packaging | 124 | 216 | 233 | ||||||||
Subtotal | 1,329 | 1,435 | 1,305 | ||||||||
Corporate and other (b) | 19 | 52 | 61 | ||||||||
Capital Spending | $ | 1,348 | $ | 1,487 | $ | 1,366 |
In millions | 2016 | 2015 | 2014 | ||||||||
Industrial Packaging | $ | 715 | $ | 725 | $ | 775 | |||||
Global Cellulose Fibers | 108 | 73 | 76 | ||||||||
Printing Papers | 232 | 234 | 291 | ||||||||
Consumer Packaging | 121 | 215 | 223 | ||||||||
Corporate | 51 | 47 | 41 | ||||||||
Depreciation and Amortization | $ | 1,227 | $ | 1,294 | $ | 1,406 |
In millions | 2016 | 2015 | 2014 | ||||||||
Industrial Packaging | $ | 14,095 | $ | 14,421 | $ | 14,837 | |||||
Global Cellulose Fibers | 934 | 873 | 947 | ||||||||
Printing Papers | 4,028 | 4,046 | 4,413 | ||||||||
Consumer Packaging | 1,934 | 2,907 | 3,307 | ||||||||
Other | 88 | 118 | 113 | ||||||||
Net Sales | $ | 21,079 | $ | 22,365 | $ | 23,617 |
In millions | 2016 | 2015 | 2014 | ||||||||
United States (e) | $ | 15,918 | $ | 16,554 | $ | 16,645 | |||||
EMEA | 2,862 | 2,770 | 3,273 | ||||||||
Pacific Rim and Asia | 718 | 1,501 | 1,951 | ||||||||
Americas, other than U.S. | 1,581 | 1,540 | 1,748 | ||||||||
Net Sales | $ | 21,079 | $ | 22,365 | $ | 23,617 |
In millions | 2016 | 2015 | |||||
United States | $ | 11,158 | $ | 9,683 | |||
EMEA | 1,004 | 827 | |||||
Pacific Rim and Asia | 246 | 353 | |||||
Americas, other than U.S. | 1,663 | 1,085 | |||||
Corporate | 375 | 398 | |||||
Long-Lived Assets | $ | 14,446 | $ | 12,346 |
(a) | Operating profits for industry segments include each segment’s percentage share of the profits of subsidiaries included in that segment that are less than wholly-owned. The pre-tax noncontrolling interests and equity earnings for these subsidiaries is added here to present consolidated earnings from continuing operations before income taxes and equity earnings. |
(b) | Includes corporate assets and assets of businesses held for sale. |
(c) | Excludes accelerated depreciation related to the closure and/or repurposing of mills. |
(d) | Net sales are attributed to countries based on the location of the seller. |
(e) | Export sales to unaffiliated customers were $2.0 billion in 2016, $2.0 billion in 2015 and $2.3 billion in 2014. |
(f) | 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 | |||||||||||||||
2016 | ||||||||||||||||||||
Net sales | $ | 5,110 | $ | 5,322 | $ | 5,266 | $ | 5,381 | $ | 21,079 | ||||||||||
Earnings (loss) from continuing operations before income taxes and equity earnings | 317 | (a) | (14 | ) | (a) | 373 | (a) | 280 | (a) | 956 | (a) | |||||||||
Gain (loss) from discontinued operations | (5 | ) | (b) | — | — | — | (5 | ) | (b) | |||||||||||
Net earnings (loss) attributable to International Paper Company | 334 | (a-c) | 40 | (a,c) | 312 | (a,c) | 218 | (a,c) | 904 | (a-c) | ||||||||||
Basic earnings (loss) per share attributable to International Paper Company common shareholders: | ||||||||||||||||||||
Earnings (loss) from continuing operations | $ | 0.82 | (a) | $ | 0.10 | (a) | $ | 0.76 | (a) | $ | 0.53 | (a) | $ | 2.21 | (a) | |||||
Gain (loss) from discontinued operations | (0.01 | ) | (b) | — | — | — | (0.01 | ) | (b) | |||||||||||
Net earnings (loss) | 0.81 | (a-c) | 0.10 | (a,c) | 0.76 | (a,c) | 0.53 | (a,c) | 2.20 | (a-c) | ||||||||||
Diluted earnings (loss) per share attributable to International Paper Company common shareholders: | ||||||||||||||||||||
Earnings (loss) from continuing operations | 0.82 | (a) | 0.10 | (a) | 0.75 | (a) | 0.53 | (a) | 2.19 | (a) | ||||||||||
Gain (loss) from discontinued operations | (0.01 | ) | (b) | — | — | — | (0.01 | ) | (b) | |||||||||||
Net earnings (loss) | 0.81 | (a-c) | 0.10 | (a,c) | 0.75 | (a,c) | 0.53 | (a,c) | 2.18 | (a-c) | ||||||||||
Dividends per share of common stock | 0.4400 | 0.4400 | 0.4400 | 0.4625 | 1.7825 | |||||||||||||||
Common stock prices | ||||||||||||||||||||
High | $ | 42.09 | $ | 44.60 | $ | 49.90 | $ | 54.68 | $ | 54.68 | ||||||||||
Low | 32.50 | 39.24 | 41.08 | 43.55 | 32.50 | |||||||||||||||
2015 | ||||||||||||||||||||
Net sales | $ | 5,517 | $ | 5,714 | $ | 5,691 | $ | 5,443 | $ | 22,365 | ||||||||||
Earnings (loss) from continuing operations before income taxes and equity earnings | 406 | 266 | (d) | 329 | (d) | 265 | (d) | 1,266 | (d) | |||||||||||
Gain (loss) from discontinued operations | — | — | — | — | — | |||||||||||||||
Net earnings (loss) attributable to International Paper Company | 313 | 227 | (d,e) | 220 | (d,e) | 178 | (d,e) | 938 | (d,e) | |||||||||||
Basic earnings (loss) per share attributable to International Paper Company common shareholders: | ||||||||||||||||||||
Earnings (loss) from continuing operations | $ | 0.74 | $ | 0.54 | (d) | $ | 0.53 | (d) | $ | 0.43 | (d) | $ | 2.25 | (d) | ||||||
Gain (loss) from discontinued operations | — | — | — | — | — | |||||||||||||||
Net earnings (loss) | 0.74 | 0.54 | (d,e) | 0.53 | (d,e) | 0.43 | (d,e) | 2.25 | (d,e) | |||||||||||
Diluted earnings (loss) per share attributable to International Paper Company common shareholders: | ||||||||||||||||||||
Earnings (loss) from continuing operations | 0.74 | 0.54 | (d) | 0.53 | (d) | 0.43 | (d) | 2.23 | (d) | |||||||||||
Gain (loss) from discontinued operations | — | — | — | — | — | |||||||||||||||
Net earnings (loss) | 0.74 | 0.54 | (d,e) | 0.53 | (d,e) | 0.43 | (d,e) | 2.23 | (d,e) | |||||||||||
Dividends per share of common stock | 0.4000 | 0.4000 | 0.4000 | 0.4400 | 1.6400 | |||||||||||||||
Common stock prices | ||||||||||||||||||||
High | $ | 57.90 | $ | 56.49 | $ | 49.49 | $ | 44.83 | $ | 57.90 | ||||||||||
Low | 51.35 | 47.39 | 37.11 | 36.76 | 36.76 |
(a) | Includes the following pre-tax charges (gains): |
2016 | ||||||||||||||||
In millions | Q1 | Q2 | Q3 | Q4 | ||||||||||||
Riegelwood mill conversion costs | $ | 9 | $ | — | $ | — | $ | — | ||||||||
India Packaging evaluation write-off | — | — | 17 | — | ||||||||||||
Early debt extinguishment costs | — | — | 29 | — | ||||||||||||
Write-off of certain regulatory pre-engineering costs | — | — | 8 | — | ||||||||||||
Costs associated with the newly acquired pulp business | — | 5 | 7 | 19 | ||||||||||||
Asia Box impairment / restructuring | 37 | 28 | 5 | — | ||||||||||||
Gain on sale of investment in Arizona Chemical | (8 | ) | — | — | — | |||||||||||
Turkey mill closure | — | — | — | 7 | ||||||||||||
Amortization of Weyerhaeuser inventory fair value step-up | — | — | — | 19 | ||||||||||||
Total | $ | 38 | $ | 33 | $ | 66 | $ | 45 |
2016 | ||||||||||||||||
Q1 | Q2 | Q3 | Q4 | |||||||||||||
Cash pension contribution | $ | — | $ | 23 | $ | — | $ | — | ||||||||
U.S. Federal audit | (14 | ) | — | — | — | |||||||||||
Brazil goodwill | (57 | ) | — | — | — | |||||||||||
International legal entity restructuring | — | (6 | ) | — | — | |||||||||||
Luxembourg tax rate change | — | — | — | 31 | ||||||||||||
Tax impact of other special items | (3 | ) | (10 | ) | (24 | ) | (14 | ) | ||||||||
Total | $ | (74 | ) | $ | 7 | $ | (24 | ) | $ | 17 |
2015 | ||||||||||||||||
In millions | Q1 | Q2 | Q3 | Q4 | ||||||||||||
Riegelwood mill conversion costs, net of proceeds from sale of the Carolina Coated Bristols brand | $ | — | $ | (14 | ) | $ | 7 | $ | 15 | |||||||
Timber monetization restructuring | — | — | 17 | (1 | ) | |||||||||||
Early debt extinguishment costs | — | 207 | — | — | ||||||||||||
Refund and state tax credits | — | (4 | ) | — | — | |||||||||||
IP-Sun JV impairment | — | — | 186 | (12 | ) | |||||||||||
Legal reserve adjustment | — | — | — | 15 | ||||||||||||
Impairment of Orsa goodwill and trade name intangible | — | — | — | 137 | ||||||||||||
Other items | — | 1 | 1 | 4 | ||||||||||||
Total | $ | — | $ | 190 | $ | 211 | $ | 158 |
2015 | ||||||||||||||||
Q1 | Q2 | Q3 | Q4 | |||||||||||||
Tax expense for cash pension | $ | — | $ | 23 | $ | — | $ | — | ||||||||
Tax benefit related to IP-Sun JV | — | — | (67 | ) | — | |||||||||||
Other items | — | 5 | — | 2 | ||||||||||||
Tax impact of other special items | — | (67 | ) | (3 | ) | (13 | ) | |||||||||
Total | $ | — | $ | (39 | ) | $ | (70 | ) | $ | (11 | ) |
• | pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; |
• | provide reasonable assurance that transactions are recorded as necessary to allow for the preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; |
• | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our consolidated financial statements; and |
• | provide reasonable assurance as to the detection of fraud. |
(1) | Financial Statements – See Item 8. Financial Statements and Supplementary Data. |
(2) | Financial Statement Schedules – The following additional financial data should be read in conjunction with the consolidated financial statements in Item 8. Schedules not included with this additional financial data have been omitted because they are not applicable, or the required information is shown in the consolidated financial statements or the notes thereto. |
Consolidated Schedule: II-Valuation and Qualifying Accounts. | 90 |
(3.1 | ) | Restated Certificate of Incorporation of International Paper Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K dated May 13, 2013). |
(3.2 | ) | By-laws of International Paper Company, as amended through February 9, 2016 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K dated February 8, 2016). |
(4.1 | ) | Indenture, dated as of April 12, 1999, between International Paper and The Bank of New York, as Trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K dated June 29, 2000). |
(4.2 | ) | Supplemental Indenture (including the form of Notes), dated as of June 4, 2008, between International Paper Company and The Bank of New York, as Trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K dated June 4, 2008). |
(4.3 | ) | Supplemental Indenture (including the form of Notes), dated as of May 11, 2009, between International Paper Company and The Bank of New York Mellon, as trustee (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K dated May 11, 2009). |
(4.4 | ) | Supplemental Indenture (including the form of Notes), dated as of August 10, 2009, between International Paper Company and The Bank of New York Mellon, as trustee (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K dated August 10, 2009). |
(4.5 | ) | Supplemental Indenture (including the form of Notes), dated as of December 7, 2009, between International Paper Company and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K dated December 7, 2009). |
(4.6 | ) | Supplemental Indenture (including the form of Notes), dated as of November 16, 2011, between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K dated November 16, 2011). |
(4.7 | ) | Supplemental Indenture (including the form of Notes), dated as of June 10, 2014, between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K dated June 10, 2014). |
(4.8 | ) | Supplemental Indenture (including the form of Notes), dated as of May 26, 2015, between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K dated May 26, 2015). |
(4.9 | ) | Supplemental Indenture (including the form of Notes), dated as of August 11, 2016, 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 August 11, 2016). |
(4.10 | ) | 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 | ) | 2016 Management Incentive Plan (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K dated February 8, 2016). + |
(10.3 | ) | 2017 Management Incentive Plan. * + |
(10.4 | ) | Amended and Restated 2009 Executive Management Incentive Plan, including 2015 Exhibits thereto (incorporated by reference to Exhibit 10.4 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014). + |
(10.5 | ) | 2017 Exhibits to the Amended and Restated 2009 Executive Management Incentive Plan. * + |
(10.6 | ) | Restricted Stock and Deferred Compensation Plan for Non-Employee Directors, Amended and Restated as of May 10, 2010 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2010). + |
(10.7 | ) | Form of Restricted Stock Award Agreement. (incorporated by reference to Exhibit 10.8 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013). + |
(10.8 | ) | Form of Restricted Stock Unit Award Agreement (cash settled). (incorporated by reference to Exhibit 10.9 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013). + |
(10.9 | ) | Form of Restricted Stock Unit Award Agreement (stock settled). (incorporated by reference to Exhibit 10.10 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013). + |
(10.10 | ) | Form of Performance Share Plan award certificate. * + |
(10.11 | ) | Pension Restoration Plan for Salaried Employees (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2009). + |
(10.12 | ) | Unfunded Supplemental Retirement Plan for Senior Managers, as amended and restated effective January 1, 2008 (incorporated by reference to Exhibit 10.21 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007). + |
(10.13 | ) | Amendment No. 1 to the International Paper Company Unfunded Supplemental Retirement Plan for Senior Managers, effective October 13, 2008 (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K dated October 17, 2008). + |
(10.14 | ) | Amendment No. 2 to the International Paper Company Unfunded Supplemental Retirement Plan for Senior Managers, effective October 14, 2008 (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K dated October 17, 2008). + |
(10.15 | ) | Amendment No. 3 to the International Paper Company Unfunded Supplemental Retirement Plan for Senior Managers, effective December 8, 2008 (incorporated by reference to Exhibit 10.20 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008). + |
(10.16 | ) | Amendment No. 4 to the International Paper Company Unfunded Supplemental Retirement Plan for Senior Managers, effective January 1, 2009 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2009). + |
(10.17 | ) | Amendment No. 5 to the International Paper Company Unfunded Supplemental Retirement Plan for Senior Managers, effective October 31, 2009 (incorporated by reference to Exhibit 10.17 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009). + |
(10.18 | ) | Amendment No. 6 to the International Paper Company Unfunded Supplemental Retirement Plan for Senior Managers, effective January 1, 2012 (incorporated by reference to Exhibit 10.21 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2011). + |
(10.19 | ) | Form of Non-Competition Agreement, entered into by certain Company employees (including named executive officers) who have received restricted stock (incorporated by reference to Exhibit 10.22 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008). + |
(10.20 | ) | Form of Non-Solicitation Agreement, entered into by certain Company employees (including named executive officers) who have received restricted stock (incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2006). + |
(10.21 | ) | Form of Change-in-Control Agreement - Tier I, for the Chief Executive Officer and all "grandfathered" senior vice presidents elected prior to 2012 (all named executive officers) - approved September 2013 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2013). + |
(10.22 | ) | Form of Change-in-Control Agreement - Tier II, for all future senior vice presidents and all "grandfathered" vice presidents elected prior to February 2008 - approved September 2013 (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2013). + |
(10.23 | ) | Form of Indemnification Agreement for Directors (incorporated by reference to Exhibit 10.13 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2003). + |
(10.24 | ) | Board Policy on Severance Agreements with Senior Executives (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 18, 2005). + |
(10.25 | ) | Board Policy on Change of Control Agreements (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on October 18, 2005). + |
(10.26 | ) | Time Sharing Agreement, dated October 17, 2014 (and effective November 1, 2014), by and between Mark S. Sutton and International Paper Company (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K dated October 14, 2014). + |
(10.27 | ) | Five-Year Credit Agreement dated as of August 5, 2014, among International Paper Company, JPMorgan Chase Bank, N.A., individually and as administrative agent, and certain lenders (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014). |
(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. * |
(23.1 | ) | Consent of Independent Registered Public Accounting Firm. * |
(23.2 | ) | Consent of Independent Auditors. * |
(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, 2016). * |
(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.* |
(99.1 | ) | Audited Financial Statements for Ilim Holding S.A. and its subsidiaries as of and for the year ended December 31, 2016 and 2015. * |
(101.INS) | XBRL Instance Document * | |
(101.SCH) | XBRL Taxonomy Extension Schema * | |
(101.CAL) | XBRL Taxonomy Extension Calculation Linkbase * | |
(101.DEF) | XBRL Taxonomy Extension Definition Linkbase * | |
(101.LAB) | XBRL Taxonomy Extension Label Linkbase * | |
(101.PRE) | XBRL Extension Presentation Linkbase * | |
For the Year Ended December 31, 2016 | |||||||||||||||||
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 | $ | 70 | $ | 9 | $ | — | (9)(a) | $ | 70 | ||||||||
Restructuring reserves | 10 | 3 | — | (7)(b) | 6 |
For the Year Ended December 31, 2015 | |||||||||||||||||
Balance at Beginning of Period | Additions Charged to Earnings | Additions Charged to Other Accounts | Deductions from Reserves | Balance at End of Period | |||||||||||||
Description | |||||||||||||||||
Reserves Applied Against Specific Assets Shown on Balance Sheet: | |||||||||||||||||
Doubtful accounts – current | $ | 82 | $ | 11 | $ | — | (23)(a) | $ | 70 | ||||||||
Restructuring reserves | 16 | 5 | — | (11)(b) | 10 |
For the Year Ended December 31, 2014 | |||||||||||||||||
Balance at Beginning of Period | Additions Charged to Earnings | Additions Charged to Other Accounts | Deductions from Reserves | Balance at End of Period | |||||||||||||
Description | |||||||||||||||||
Reserves Applied Against Specific Assets Shown on Balance Sheet: | |||||||||||||||||
Doubtful accounts – current | $ | 109 | $ | 11 | $ | — | (38)(a) | $ | 82 | ||||||||
Restructuring reserves | 51 | 41 | — | (76)(b) | 16 |
(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 22, 2017 | |||
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 22, 2017 | ||
Mark S. Sutton | ||||
/S/ DAVID J. BRONCZEK | Director | February 22, 2017 | ||
David J. Bronczek | ||||
/S/ WILLIAM J. BURNS | Director | February 22, 2017 | ||
Willliam J. Burns | ||||
/S/ AHMET C. DORDUNCU | Director | February 22, 2017 | ||
Ahmet C. Dorduncu | ||||
/S/ ILENE S. GORDON | Director | February 22, 2017 | ||
Ilene S. Gordon | ||||
/S/ JAY L. JOHNSON | Director | February 22, 2017 | ||
Jay L. Johnson | ||||
/S/ STACEY J. MOBLEY | Director | February 22, 2017 | ||
Stacey J. Mobley | ||||
/S/ JOHN L. TOWNSEND III | Director | February 22, 2017 | ||
John L. Townsend III | ||||
/S/ WILLIAM G. WALTER | Director | February 22, 2017 | ||
William G. Walter | ||||
/S/ J. STEVEN WHISLER | Director | February 22, 2017 | ||
J. Steven Whisler | ||||
/S/ RAY G. YOUNG | Director | February 22, 2017 | ||
Ray G. Young | ||||
/S/ CAROL L. ROBERTS | Senior Vice President and Chief Financial Officer | February 22, 2017 | ||
Carol L. Roberts | ||||
/S/ VINCENT P. BONNOT | Vice President – Finance and Controller | February 22, 2017 | ||
Vincent P. Bonnot |
PRINTING PAPERS | Cedar Rapids, Iowa | Tracy, California | ||
U.S.: | Henderson, Kentucky | Golden, Colorado | ||
Selma, Alabama (Riverdale Mill) | Maysville, Kentucky | Wheat Ridge, Colorado | ||
Ticonderoga, New York | Bogalusa, Louisiana | Putnam, Connecticut | ||
Eastover, South Carolina | Campti, Louisiana | Orlando, Florida | ||
Georgetown, South Carolina | Mansfield, Louisiana | Plant City, Florida | ||
Sumter, South Carolina | Vicksburg, Mississippi | Tampa, Florida leased | ||
Valliant, Oklahoma | Columbus, Georgia | |||
International: | Springfield, Oregon | Forest Park, Georgia | ||
Luiz Antônio, São Paulo, Brazil | Orange, Texas | Griffin, Georgia | ||
Mogi Guacu, São Paulo, Brazil | Kennesaw, Georgia leased | |||
Três Lagoas, Mato Grosso do Sul, Brazil | International: | Lithonia, Georgia | ||
Saillat, France | Franco da Rocha, São Paulo, Brazil | Savannah, Georgia | ||
Kadiam, India | Nova Campina, São Paulo, Brazil | Stone Mountain, Georgia leased | ||
Rajahmundry, India | Paulinia, São Paulo, Brazil | Tucker, Georgia | ||
Kwidzyn, Poland | Veracruz, Mexico | Aurora, Illinois (3 locations) | ||
Svetogorsk, Russia | Kenitra, Morocco | Bedford Park, Illinois (2 locations) 1 leased | ||
Madrid, Spain | Belleville, Illinois | |||
GLOBAL CELLULOSE FIBERS | Edirne, Turkey (2) | Carroll Stream, Illinois | ||
U.S.: | Des Plaines, Illinois | |||
Cantonment, Florida (Pensacola Mill) | Corrugated Container | Lincoln, Illinois | ||
Augusta, Georgia | U.S.: | Montgomery, Illinois | ||
Flint River, Georgia | Bay Minette, Alabama | Northlake, Illinois | ||
Port Wentworth, Georgia | Decatur, Alabama | Rockford, Illinois | ||
Columbus, Mississippi | Dothan, Alabama leased | Butler, Indiana | ||
New Bern, North Carolina | Huntsville, Alabama | Crawfordsville, Indiana | ||
Riegelwood, North Carolina | Conway, Arkansas | Fort Wayne, Indiana | ||
Eastover, South Carolina | Fort Smith, Arkansas (2 locations) | Hammond, Indiana | ||
Georgetown, South Carolina | Russellville, Arkansas (2 locations) | Indianapolis, Indiana (2 locations) | ||
Franklin, Virginia | Tolleson, Arizona | Saint Anthony, Indiana | ||
Yuma, Arizona | Tipton, Indiana | |||
International: | Anaheim, California | Cedar Rapids, Iowa | ||
Grand Prairie, Alberta, Canada | Buena Park, California leased | Waterloo, Iowa | ||
Saillat, France | Camarillo, California | Garden City, Kansas | ||
Gdansk, Poland | Carson, California | Kansas City, Kansas | ||
Kwidzyn, Poland | Cerritos, California leased | Bowling Green, Kentucky | ||
Svetogorsk, Russia | Compton, California | Lexington, Kentucky | ||
Elk Grove, California | Louisville, Kentucky | |||
INDUSTRIAL PACKAGING | Exeter, California | Walton, Kentucky | ||
Gilroy, California (2 locations) | Bogalusa, Louisiana | |||
Containerboard | Los Angeles, California | Lafayette, Louisiana | ||
U.S.: | Modesto, California | Shreveport, Louisiana | ||
Pine Hill, Alabama | Ontario, California | Springhill, Louisiana | ||
Prattville, Alabama | Salinas, California | Auburn, Maine | ||
Cantonment, Florida (Pensacola Mill) | Sanger, California | Three Rivers, Michigan | ||
Rome, Georgia | San Leandro, California leased | Arden Hills, Minnesota | ||
Savannah, Georgia | Santa Fe Springs, California (2 locations) | Austin, Minnesota | ||
Cayuga, Indiana | Stockton, California | Fridley, Minnesota |
Minneapolis, Minnesota leased | Hazleton, Pennsylvania | Nanjing China (1) | ||
Shakopee, Minnesota | Kennett Square, Pennsylvania | Shanghai, China (2 locations) (1) | ||
White Bear Lake, Minnesota | Lancaster, Pennsylvania | Shenyang, China (1) | ||
Houston, Mississippi | Mount Carmel, Pennsylvania | Suzhou, China (1) | ||
Jackson, Mississippi | Georgetown, South Carolina | Tianjin, China (2 locations) (1) | ||
Magnolia, Mississippi leased | Laurens, South Carolina | Wuhan, China (1) | ||
Olive Branch, Mississippi | Lexington, South Carolina | Arles, France | ||
Fenton, Missouri | Ashland City, Tennessee leased | Chalon-sur-Saone, France | ||
Kansas City, Missouri | Cleveland, Tennessee | Creil, France | ||
Maryland Heights, Missouri | Elizabethton, Tennessee leased | LePuy, France (Espaly Box Plant) | ||
North Kansas City, Missouri leased | Morristown, Tennessee | Mortagne, France | ||
St. Joseph, Missouri | Murfreesboro, Tennessee | Guadeloupe, French West Indies | ||
St. Louis, Missouri | Amarillo, Texas | Batam, Indonesia (1) | ||
Omaha, Nebraska | Carrollton, Texas (2 locations) | Bellusco, Italy | ||
Barrington, New Jersey | Edinburg, Texas | Catania, Italy | ||
Bellmawr, New Jersey | El Paso, Texas | Pomezia, Italy | ||
Milltown, New Jersey | Ft. Worth, Texas leased | San Felice, Italy | ||
Spotswood, New Jersey | Grand Prairie, Texas | Kuala Lumpur, Malaysia (1) | ||
Thorofare, New Jersey | Hidalgo, Texas | Juhor, Malaysia (1) | ||
Binghamton, New York | McAllen, Texas | Apodaco (Monterrey), Mexico leased | ||
Buffalo, New York | San Antonio, Texas (2 locations) | Ixtaczoquitlan, Mexico | ||
Rochester, New York | Sealy, Texas | Juarez, Mexico leased | ||
Scotia, New York | Waxahachie, Texas | Los Mochis, Mexico | ||
Utica, New York | Lynchburg, Virginia | Puebla, Mexico leased | ||
Charlotte, North Carolina (2 locations) 1 leased | Petersburg, Virginia | Reynosa, Mexico | ||
Lumberton, North Carolina | Richmond, Virginia | San Jose Iturbide, Mexico | ||
Manson, North Carolina | Moses Lake, Washington | Santa Catarina, Mexico | ||
Newton, North Carolina | Olympia, Washington | Silao, Mexico | ||
Statesville, North Carolina | Yakima, Washington | Villa Nicolas Romero, Mexico | ||
Byesville, Ohio | Fond du Lac, Wisconsin | Zapopan, Mexico | ||
Delaware, Ohio | Manitowoc, Wisconsin | Agadir, Morocco | ||
Eaton, Ohio | Casablanca, Morocco | |||
Madison, Ohio | International: | Kenitra, Morocco | ||
Marion, Ohio | Manaus, Amazonas, Brazil | Singapore, Singapore (1) | ||
Marysville, Ohio leased | Paulinia, São Paulo, Brazil | Almeria, Spain | ||
Middletown, Ohio | Rio Verde, Goias, Brazil | Barcelona, Spain | ||
Mt. Vernon, Ohio | Suzano, São Paulo, Brazil | Bilbao, Spain | ||
Newark, Ohio | Las Palmas, Canary Islands | Gandia, Spain | ||
Streetsboro, Ohio | Tenerife, Canary Islands | Madrid, Spain | ||
Wooster, Ohio | Rancagua, Chile | Bangkok, Thailand (1) | ||
Oklahoma City, Oklahoma | Baoding, China (1) | Adana, Turkey | ||
Beaverton, Oregon (3 locations) | Beijing, China (1) | Bursa, Turkey | ||
Hillsboro, Oregon | Chengdu, China (1) | Corlu, Turkey | ||
Portland, Oregon | Dalian, China (1) | Corum, Turkey | ||
Salem, Oregon leased | Dongguan, China (1) | Gebze, Turkey | ||
Biglerville, Pennsylvania (2 locations) | Guangzhou, China (2 locations) (1) | Izmir, Turkey | ||
Eighty-four, Pennsylvania | Hohhot, China (1) |
Recycling | International: | |||
U.S.: | Kwidzyn, Poland | |||
Phoenix, Arizona | Svetogorsk, Russia | |||
Fremont, California | ||||
Norwalk, California | Foodservice | |||
West Sacramento, California | U.S.: | |||
Itasca, Illinois | Visalia, California | |||
Des Moines, Iowa | Shelbyville, Illinois | |||
Wichita, Kansas | Kenton, Ohio | |||
Roseville, Minnesota | ||||
Omaha, Nebraska | International: | |||
Charlotte, North Carolina | Shanghai, China | |||
Beaverton, Oregon | Tianjin, China | |||
Eugene, Oregon leased | Bogota, Colombia | |||
Carrollton, Texas | Cheshire, England leased | |||
Salt Lake City, Utah | ||||
Richmond, Virginia | DISTRIBUTION | |||
Kent, Washington | ||||
IP Asia | ||||
International: | International: | |||
Monterrey, Mexico leased | China (8 locations) | |||
Xalapa, Veracruz, Mexico leased | Malaysia | |||
Taiwan | ||||
Bags | Thailand | |||
U.S.: | Vietnam | |||
Buena Park, California | ||||
Beaverton, Oregon | Forest Resources | |||
Grand Prairie, Texas | International: | |||
Approximately 329,400 acres in Brazil | ||||
CONSUMER PACKAGING | ||||
Coated Paperboard | ||||
Augusta, Georgia | ||||
Prosperity, South Carolina | ||||
Texarkana, Texas | ||||
(1) Closed June 2016 | ||||
(2) Closed January 2017 | ||||
(in thousands of short tons except as noted) | U.S. | EMEA | Americas, other than U.S. | India | Total | |||||||||
Industrial Packaging | ||||||||||||||
Containerboard (a) | 13,305 | 44 | 366 | — | 13,715 | |||||||||
Global Cellulose Fibers | ||||||||||||||
Dried Pulp (in thousands of metric tons) | 2,912 | 297 | 535 | — | 3,744 | |||||||||
Printing Papers | ||||||||||||||
Uncoated Freesheet | 1,808 | 1,153 | 1,135 | 266 | 4,362 | |||||||||
Bristols | 165 | — | — | — | 165 | |||||||||
Uncoated Papers and Bristols | 1,973 | 1,153 | 1,135 | 266 | 4,527 | |||||||||
Newsprint | — | 285 | — | — | 285 | |||||||||
Total Printing Papers | 1,973 | 1,438 | 1,135 | 266 | 4,812 | |||||||||
Consumer Packaging | ||||||||||||||
Coated Paperboard | 1,206 | 395 | — | — | 1,601 |
Forest Resources | ||
We own, manage or have an interest in approximately 1.4 million acres of forestlands worldwide. These forestlands and associated acres are located in the following regions: | (M Acres) | |
Brazil | 329 | |
We have harvesting rights in: | ||
Russia | 1,047 | |
Poland | — | |
Total | 1,376 |
• | Executive Officer |
A. | Performance Objectives – Funding the Total MIP Award Pool |
Performance | Award % |
Greater than Operating Plan and up to 20% above Operating Plan | +0.125% for each $1MM improvement greater than Operating Plan up to 20% above Operating Plan |
Operating Plan | 100% |
From 75% of Operating Plan to less than Operating Plan | -0.05% for each $1MM drop below Operating Plan down to 75% of Operating Plan |
Performance | Award % |
Greater than Operating Plan and up to 30% above Operating Plan | '+ 3.33% for each 0.1% improvement greater than Operating Plan up to 30% above Operating Plan |
Operating Plan | 100% |
From 75% of Operating Plan to less than Operating Plan | '-2.0% for each 0.1% drop below Operating Plan down to 75% of Operating Plan |
| 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 payable under the terms of the Plan. The Calculated Award will not be reduced for the period of temporary layoff. |
• | 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 an Executive Officer 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 * (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* (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* (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)* | |||
34 33 | 70% 65% | $403,100 $342,700 | |||
32 | 65 | % | $313,400 | ||
31 | 60 | % | $264,900 | ||
30 | 55 | % | $229,000 | ||
29 | 50 | % | $188,500 | ||
28 | 50 | % | $174,700 | ||
27 | 45 | % | $143,800 | ||
26 | 45 | % | $131,500 | ||
25 | 40 | % | $106,900 | ||
24 | 40 | % | $100,000 | ||
23 | 35 | % | $80,000 | ||
22 | 30 | % | $62,700 | ||
21 | 30 | % | $57,400 | ||
20 | 25 | % | $43,900 | ||
19 | 25 | % | $40,800 | ||
18 | 20 | % | $30,300 | ||
17 | 20 | % | $28,300 | ||
16 | 20 | % | $26,200 | ||
15 | 15 | % | $18,200 | ||
14 | 15 | % | $16,900 |
Mark S. Sutton | Chairman and Chief Executive Officer |
W. Michael Amick, Jr. | SVP – Papers The Americas |
C. Cato Ealy | SVP – Corporate Development |
William P. Hoel* | SVP – Container The Americas |
Tommy S. Joseph | SVP – Manufacturing, Technology, EH&S |
& Global Sourcing | |
Thomas G. Kadien | SVP – Human Resources, Government |
Relations & Global Citizenship | |
Glenn R. Landau | SVP – Finance (Chief Financial Officer-Elect) |
Tim S. Nicholls | SVP – Industrial Packaging The Americas |
Jean-Michel Ribieras | SVP – Global Cellulose Fibers |
Carol L. Roberts* | SVP – Chief Financial Officer |
Sharon R. Ryan | SVP – General Counsel & Corporate |
Secretary | |
John V. Sims | SVP – President, IP Europe, Middle East, |
Africa & Russia | |
Catherine I. Slater | SVP – Consumer Packaging |
Gregory T. Wanta | SVP – North American Container |
Any other individual elected to the position of Senior Vice President or above during 2017. *NOTE: Executives in italics will be retiring as of March 31, 2017, but remain eligible to receive a prorated 2017 MIP based on the plan guidelines. | |
Plan Element | 162(m) Limit Approved by Committee |
Company Business Objective: | • Positive EBITDA Before Special Items |
Intermediate Performance Objectives: | • Same as 2017 Management Incentive Plan objectives |
1. | Compliance with Laws and Regulations. It is intended that this Award, and any securities issued pursuant to this Award, will comply with all provisions of federal and applicable state securities laws. |
2. | Performance-Based Restricted Stock Units |
(a) | All performance-based restricted stock units (“Performance Share Units” or “PSUs”) issued under this Award will be contingently awarded with respect to the specific three-year performance period (the “Performance Period”) as described in the Notice of Award set forth on the reverse. PSUs may not be sold, transferred, pledged or assigned at any time. You will be asked to file a beneficiary designation form with the Company that names the beneficiary or beneficiaries of the Award. |
(b) | Payout of an Award is contingent solely upon the Company’s achievement of the performance goals over the Performance Period, and not on individual performance. |
(c) | All dividend equivalent units accrued during the Performance Period will be reinvested in additional PSUs (which will be allocated to the same Performance Period and will be subject to being earned on the same basis as the original Award). |
3. | Payment of Withholding Taxes. Generally, to pay withholding taxes due on an Award upon payout, the Company will reduce the number of PSUs paid to you by an amount sufficient to pay statutorily required withholding taxes. |
4. | Method of Determining Actual Award and Removal of Restrictions |
(a) | As soon as practicable after the Performance Period, the number of PSUs to be paid under this Award will be determined by the Committee. The decision by the Committee will be final, conclusive and binding upon all parties, including the Company, the shareowners and you. Following the Committee’s approval of the payout, you will receive unrestricted shares of Company common stock equal to the number of PSUs payable to you. |
(b) | You will receive prorated PSUs in the following events: (i) termination of your employment if you are eligible for a termination allowance (and, in the United States, you sign the Company’s termination agreement and release in connection with the payment of a termination allowance); (ii) termination of your employment as a result of the divestiture of your business (iii) death; (iv) Disability; or (v) voluntary resignation after retirement eligibility as defined under the Retirement Plan of the Company. In these events, you (or, if applicable, your beneficiary or estate) will receive the number of PSUs that would have been earned based on actual Company performance, prorated based for your months of service during the Performance Period. Such PSUs are payable at the same time and in the same form as otherwise payable under the Plan. |
(c) | Your award will be forfeited and cancelled upon the following events: (i) termination of your employment for Cause, (ii) in the United States, your refusal to sign the Company’s termination agreement and release in connection with the payment of a termination allowance, (iii) voluntary resignation before retirement eligibility, (iv) violation of a Non-Competition Agreement or Non-Solicitation Agreement, (v) failure of an Executive Officer to provide one-year’s notice of retirement, (vi) your Misconduct, or (vii) termination of your employment on or before February 1 of the first year of the three-year performance period for the award. |
(d) | Except as may be provided in a Change in Control Agreement, in the event of Change in Control of the Company, the Award will be treated as described in the Administrative Guidelines for the Plan. |
(e) | In the event the Company’s financial statements are required to be restated as a result of errors, omissions or fraud, the Company may recover all or a portion of any Award with respect to any fiscal year of the Company the financial results of which are negatively affected by such restatement. |
5. | Changes in Stock. In the event of any stock dividend, split, reclassification or other analogous change in capitalization, or any distribution (other than regular cash dividends) to holders of the Company’s common stock, the Committee will make such adjustments, if any, as it deems to be equitable in the number of PSUs awarded you. |
6. | Other Terms and Conditions |
(a) | The Board or the Committee may, at any time and from time to time, amend, modify or terminate the Plan without shareowner approval, subject to certain limitations described in the plan. Further, the granting of an Award is discretionary by the Company. The Company may change the eligibility or other provisions of the Plan with Committee approval at any time. |
(b) | You (or your estate or beneficiary) will promptly provide all information related to this Award that is requested by the Company for its tax returns. |
(c) | You (and your surviving spouse, beneficiary, executor, administrator, heirs, successors or assigns) hereby agree to accept as binding, conclusive and final all decisions that are made by the Committee with respect to interpretations of the terms and condition of the Plan or this Award and with respect to any questions or disputes arising under the Plan or this Award. |
(d) | Participation in the Plan and receipt of this Award will not give you any right to a subsequent award, or any right to continued employment by the Company for any period, nor will the granting of an award give the Company any right to your continued services for any period. You understand that this Award is in addition to, and not a part of, your annual salary. |
(e) | You agree that if execution of a Non-Competition and/or a Non-Solicitation Agreement is required, this Award will be contingent upon your execution of such agreement(s). |
In millions, except per share amounts | 2016 | 2015 | 2014 | |||||||||
Earnings (loss) from continuing operations | $ | 909 | $ | 938 | $ | 568 | ||||||
Discontinued operations | (5 | ) | — | (13 | ) | |||||||
Net earnings (loss) | 904 | 938 | 555 | |||||||||
Effect of dilutive securities | — | — | — | |||||||||
Net earnings - assuming dilution | $ | 904 | $ | 938 | $ | 555 | ||||||
Average common shares outstanding | 411.1 | 417.4 | 427.7 | |||||||||
Effect of dilutive securities | ||||||||||||
Restricted stock performance share plan | 4.5 | 3.2 | 4.2 | |||||||||
Stock options (a) | — | — | 0.1 | |||||||||
Average common shares outstanding - assuming dilution | 415.6 | 420.6 | 432.0 | |||||||||
Earnings (loss) per common share from continuing operations | $ | 2.21 | $ | 2.25 | $ | 1.33 | ||||||
Discontinued operations | (0.01 | ) | — | (0.03 | ) | |||||||
Net earnings (loss) per common share | $ | 2.20 | $ | 2.25 | $ | 1.30 | ||||||
Earnings (loss) per common share from continuing operations - assuming dilution | $ | 2.19 | $ | 2.23 | $ | 1.31 | ||||||
Discontinued operations | (0.01 | ) | — | (0.02 | ) | |||||||
Net earnings (loss) per common share - assuming dilution | $ | 2.18 | $ | 2.23 | $ | 1.29 |
For the Years Ended December 31, | ||||||||||||||||||||||
TITLE | 2012 | 2013 | 2014 | 2015 | 2016 | |||||||||||||||||
(A) | Earnings (loss) from continuing operations before income taxes and equity earnings | $ | 967.0 | $ | 1,228.0 | $ | 872.0 | $ | 1,266.0 | $ | 956.0 | |||||||||||
(B) | Noncontrolling interests, net of taxes | (5.0 | ) | 17.0 | 19.0 | 21.0 | 2.0 | |||||||||||||||
(C) | Fixed charges excluding capitalized interest | 782.0 | 705.5 | 694.2 | 700.2 | 748.2 | ||||||||||||||||
(D) | Amortization of previously capitalized interest | 24.2 | 24.7 | 23.9 | 20.7 | 19.5 | ||||||||||||||||
(E) | Distributed income of equity investees | — | — | 56.1 | 35.0 | 59.7 | ||||||||||||||||
(F) | Earnings (loss) from continuing operations before income taxes and fixed charges | $ | 1,768.2 | $ | 1,975.2 | $ | 1,665.2 | $ | 2,042.9 | $ | 1,785.4 | |||||||||||
Fixed Charges | ||||||||||||||||||||||
(G) | Interest and amortization of debt expense | $ | 714.7 | $ | 648.3 | $ | 642.9 | $ | 643.5 | $ | 694.5 | |||||||||||
(H) | Interest factor attributable to rentals | 61.6 | 56.1 | 51.3 | 56.7 | 53.7 | ||||||||||||||||
(I) | Preferred dividends of subsidiaries | 5.7 | 1.1 | — | — | — | ||||||||||||||||
(J) | Capitalized interest | 36.6 | 17.0 | 23.2 | 24.8 | 28.2 | ||||||||||||||||
(K) | Total fixed charges | $ | 818.6 | $ | 722.5 | $ | 717.4 | $ | 725.0 | $ | 776.4 | |||||||||||
(L) | Ratio of earnings to fixed charges | 2.16 | 2.73 | 2.32 | 2.82 | 2.30 |
Name | Jurisdiction | |
Ace Packaging Systems, Inc. | Michigan | |
Balsa Forests LLC | Delaware | |
Basswood Forests IIA LLC | Delaware | |
Basswood Forests LLC | Delaware | |
Branigar Organization, Inc., The | Illinois | |
Carton y Papel Reciclado, S.A. | Spain | |
Cartonajes International, S.L. | Spain | |
Cartonajes Union S.L. | Spain | |
Cartonnerie de Martinique SAS | France | |
Certified Forest Management LLC | Delaware | |
CircleTree Insurance Company | Vermont | |
CMCP - INTERNATIONAL PAPER S.A.S. | Morocco | |
Commercial Realty & Properties LLC | Delaware | |
Comptoir des Bois de Brive SAS | France | |
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 | |
Haig Point, Inc. | Delaware | |
I.P. CONTAINER HOLDINGS (SPAIN) S.L. | Spain | |
Instituto International Paper | Brazil | |
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 (Asia) Limited | Hong Kong | |
International Paper (Deutschland) GmbH | Germany | |
International Paper (Europe) S.à r.l. | Luxembourg | |
International Paper (India) Private Limited | India | |
International Paper (Malaysia) Sdn Bhd | Malaysia | |
International Paper (New Zealand) Limited | New Zealand | |
International Paper (Poland) Holding sp. z o.o. | Poland | |
International Paper (UK) Limited | Scotland | |
International Paper (Xianghe) Packaging Co., Ltd. | China | |
International Paper Agroflorestal Ltda. | Brazil | |
International Paper APPM Limited | India | |
International Paper Benelux SPRL | Belgium | |
International Paper Canada Pulp Holdings ULC | Alberta | |
International Paper Cartones Ltda. | Chile | |
International Paper Cellulose Fibers Sales Sàrl | Switzerland | |
International Paper Company | Delaware | |
International Paper Company Employee Relief Fund | New York |
Name | Jurisdiction | |
International Paper Company Foundation | New York | |
International Paper Company Limited | England & Wales | |
International Paper Container (France) Holding SAS | France | |
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 do Brasil Ltda. | Brazil | |
INTERNATIONAL PAPER DUTCH SERVICES B.V. | Netherlands | |
International Paper Embalagens da Amazônia Ltda. | Brazil | |
International Paper Embalagens Ltda. | Brazil | |
International Paper Export Sales, Inc. | Delaware | |
International Paper Exportadora Ltda. | Brazil | |
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 Global Cellulose Fibers Holdings S.à r.l. | Luxembourg | |
International Paper Group (UK) Limited | England & Wales | |
International Paper Holdings (Luxembourg) S.à r.l. | Luxembourg | |
International Paper Hungary Kereskedelmi Kft. | Hungary | |
International Paper Industrie France SA | France | |
International Paper Investment (Shanghai) Co., Ltd. | China | |
International Paper Investments (Asia) B.V. | Netherlands | |
International Paper Investments (France) S.A.S | France | |
International Paper Investments (Holland) B.V. | Netherlands | |
International Paper Investments (Luxembourg) S.à r.l. | Luxembourg | |
International Paper Italia Srl | Italy | |
International Paper Japan Limited | Japan | |
International Paper Madrid Mill, S.L. | Spain | |
International Paper Manufacturing & Distribution Limited | Hong Kong | |
International Paper Mexico Company, S. de R.L. de C.V. | Mexico | |
International Paper Nordic Sales Company Oy | Finland | |
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 |
Name | Jurisdiction | |
International Paper Russia Holding B.V. | Netherlands | |
International Paper S.A. | France | |
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 | |
IP Canada Holdings Limited | Canada | |
IP Cartones Y Corrugados, S. de R.L. de C.V. | Mexico | |
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 Forest Resources Company | Delaware | |
IP Holding Asia Singapore Pte. Ltd. | Singapore | |
IP India Foundation | India | |
IP International Holdings, Inc. | Delaware | |
IP Mexico Holdings S.à r.l. | Luxembourg | |
IP Mineral Holdings LLC | Delaware | |
IP Petroleum Company, Inc. | Delaware | |
IP Realty Holdings LLC | Delaware | |
IP Singapore Holding Pte. Ltd. | Singapore | |
IP Timberlands Operating Company, Ltd. | Texas | |
IPAD Inc. | Delaware | |
Joshua Tree Forests LLC | Delaware | |
Juniper Forests LLC | Delaware | |
Lacebark LLC | Delaware | |
Lake Superior Land Company | Delaware | |
Longleaf Insurance Company | Tennessee | |
Longview, Portland & Northern Railway Company (LP&N Railway) | Washington | |
Lost Creek, Inc. | Delaware | |
Montauban Cartons SAS | France | |
Northwest Pines, Inc. | Delaware | |
Olmuksan International Paper Ambalaj Sanayi ve Ticaret Anonim Sirketi | Turkey | |
Papeteries d'Espaly SAS | France | |
Papeteries Etienne SAS | France | |
Pines II, Inc. | Delaware | |
Progres Action Citoyenne Maroc SARL | Morocco | |
Przedsiebiorstwo Produkcyjno-Handlowe "Tor-Pal" Spolka z Ograniczona Odpowiedzialnoscia | Poland | |
Red Bird Receivables, LLC | Delaware | |
Sabine River & Northern Railroad Company | Texas | |
Societe Guadeloupeenne de Carton Ondule SAS | France |
Name | Jurisdiction | |
Societe Mauritanienne de Cartons - SOMACAR, S.A. | Mauritania | |
Societe Mediterraneenne d'Emballages SAS | France | |
Societe Normande de Carton Ondule SAS | France | |
SP Forests L.L.C. | Delaware | |
Supplier Finance Company, LLC | Delaware | |
Sustainable Forests L.L.C. | Delaware | |
Sycamore Forests LLC | Delaware | |
Temple Associates, Inc. | Texas | |
Temple-Inland LLC | Delaware | |
Timberlands Capital Corp. II, Inc. | Delaware | |
Timberlands Capital Corp. III, Inc. | Delaware | |
TIN Intermediate, LLC | Delaware | |
TIN Land Financing, LLC | Delaware | |
TIN LLC | Delaware | |
TIN Timber Financing, LLC | Delaware | |
U. C. Realty Corp. | Delaware | |
Velarium Oy Ab | Finland | |
Weyerhaeuser Poland Sp. z o.o. | Poland | |
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 22, 2017 |
/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 22, 2017 |
/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 22, 2017 |
/s/ Carol L. Roberts |
Carol L. Roberts |
Senior Vice President and Chief Financial Officer |
February 22, 2017 |
Notes | December 31, 2016 | December 31, 2015 | ||
ASSETS | ||||
Current assets | ||||
Cash and cash equivalents | 4 | 396,918 | 154,650 | |
Accounts receivable | 4 | 98,119 | 78,807 | |
Accounts receivable from related parties | 10 | 25,908 | 13,116 | |
Value added tax receivable | 31,669 | 27,879 | ||
Prepayments | 17,063 | 11,906 | ||
Inventories | 4 | 201,296 | 164,199 | |
Deferred income tax assets | 6 | 343 | 1,793 | |
Other current assets | 2,662 | 2,690 | ||
Total current assets | 773,978 | 455,040 | ||
Non-current assets | ||||
Plant, properties and equipment, net | 4 | 1,272,551 | 913,230 | |
Prepayments for property, plant and equipment | 28,416 | 11,671 | ||
Intangible assets | 5 | 20,345 | 15,048 | |
Goodwill | 4 | 7,997 | - | |
Other non-current assets | 4 | 21,707 | 28,008 | |
Total non-current assets | 1,351,016 | 967,957 | ||
TOTAL ASSETS | 2,124,994 | 1,422,997 | ||
LIABILITIES AND EQUITY | ||||
Current liabilities | ||||
Current maturities of long-term debt | 8 | 155,122 | 461,147 | |
Accounts payable | 57,484 | 50,861 | ||
Accounts payable to related parties | 10 | 7,313 | 6,528 | |
Accrued payroll and benefits | 32,202 | 23,142 | ||
Taxes payable | 21,424 | 12,254 | ||
Deferred income tax liabilities | 6 | 3,954 | 4,673 | |
Other accruals and liabilities | 4 | 128,056 | 106,561 | |
Total current liabilities | 405,555 | 665,166 | ||
Non-current liabilities | ||||
Long-term debt | 8 | 1,319,404 | 691,179 | |
Deferred income tax liabilities | 6 | 89,905 | 13,090 | |
Employee benefit plan obligation | 5,369 | 4,003 | ||
Other liabilities | 6,921 | 6,293 | ||
Total non-current liabilities | 1,421,599 | 714,565 | ||
Equity | ||||
Common stock | 9 | 109,341 | 109,341 | |
Additional paid-in capital | 11,141 | 12,777 | ||
Receivables from a shareholder | 10 | (156,974) | (77,272) | |
Retained earnings | 814,992 | 555,967 | ||
Accumulated other comprehensive loss | 3 | (502,339) | (578,542) | |
Total Ilim Holding S.A. shareholders’ equity | 276,161 | 22,271 | ||
Non-controlling interests | 21,679 | 20,995 | ||
Total equity | 297,840 | 43,266 | ||
TOTAL LIABILITIES AND EQUITY | 2,124,994 | 1,422,997 |
Notes | 2016 | 2015 | 2014 | |||
NET SALES | 4 | 1,926,567 | 1,931,270 | 2,138,236 | ||
COSTS AND EXPENSES | ||||||
Cost of products sold | (854,497) | (837,597) | (1,180,129) | |||
Distribution and selling costs | (239,761) | (233,209) | (281,765) | |||
General and administration costs | (123,622) | (127,904) | (158,863) | |||
Depreciation | (115,706) | (121,671) | (180,854) | |||
Amortization | (5,260) | (4,904) | (7,485) | |||
Taxes other than payroll and income taxes | (19,645) | (22,523) | (37,233) | |||
Other operating expenses, net | 4 | (9,327) | (16,474) | (20,570) | ||
Foreign exchange gain/ (loss) | 67,141 | (190,826) | (674,434) | |||
Interest expense, net | 4 | (78,650) | (55,160) | (68,565) | ||
EARNINGS/(LOSS) BEFORE INCOME TAXES | 547,240 | 321,002 | (471,662) | |||
Income tax (expense)/benefit | 6 | (127,900) | (73,523) | 85,168 | ||
NET EARNINGS/(LOSS) | 419,340 | 247,479 | (386,494) | |||
Net (earnings)/loss attributable to non-controlling interests | (28,132) | (17,009) | 27,323 | |||
NET EARNINGS/(LOSS) ATTRIBUTABLE TO ILIM HOLDING S.A. | 391,208 | 230,470 | (359,171) |
Notes | 2016 | 2015 | 2014 | |||
NET EARNINGS/(LOSS) | 419,340 | 247,479 | (386,494) | |||
OTHER COMPREHENSIVE INCOME/(LOSS), NET OF TAX | ||||||
Remeasurement of defined benefit obligation (net of income tax of $(14), $(162) and $187, respectively) | (57) | (648) | 805 | |||
Change in cumulative foreign currency translation adjustment | 81,854 | (98,240) | (284,246) | |||
TOTAL OTHER COMPREHENSIVE INCOME/(LOSS), NET OF TAX | 3 | 81,797 | (98,888) | (283,441) | ||
Total comprehensive income/(loss) | 501,137 | 148,591 | (669,935) | |||
Net (earnings)/loss attributable to non-controlling interests | (28,132) | (17,009) | 27,323 | |||
Other comprehensive loss attributable to non-controlling interests | 945 | 6,981 | 20,464 | |||
COMPREHENSIVE INCOME/(LOSS) ATTRIBUTABLE TO ILIM HOLDING S.A. | 473,950 | 138,563 | (622,148) |
Notes | 2016 | 2015 | 2014 | |||
OPERATING ACTIVITIES | ||||||
Net earnings/(loss) | 419,340 | 247,479 | (386,494) | |||
Adjustments to reconcile net earnings/(loss) to net cash provided by operating activities: | ||||||
Depreciation and amortization | 120,966 | 126,575 | 188,339 | |||
Income tax expense/(benefit), net | 6 | 127,900 | 73,523 | (85,168) | ||
Net interest expense, net of amounts capitalized | 4 | 78,650 | 55,160 | 68,565 | ||
Gain on disposal of plant, properties and equipment | (2,976) | - | (155) | |||
(Gain)/loss from disposal of other assets | (746) | 1,665 | 6,199 | |||
Foreign exchange (gain)/loss | (67,141) | 190,826 | 674,434 | |||
Allowance for doubtful accounts receivable | 1,694 | 2,348 | 3,261 | |||
Impairment of plant, properties and equipment | 4 | 2,500 | 2,246 | 1,823 | ||
Write down of inventories | (170) | (1,033) | 4,889 | |||
Other, net | (7,057) | (4,709) | 6,681 | |||
Changes in current assets and liabilities | ||||||
Accounts receivable | (13,667) | (29,732) | (25,368) | |||
Inventories | (15,494) | (10,908) | 20,391 | |||
Accounts payable and accrued liabilities | 2,862 | 20,474 | 1,038 | |||
Taxes payable other than income tax | (3,405) | (1,088) | 3,888 | |||
Interest paid | (81,711) | (58,594) | (72,601) | |||
Income tax paid | 6 | (54,005) | (3,455) | (7,962) | ||
CASH PROVIDED BY OPERATING ACTIVITIES | 507,540 | 610,777 | 401,760 | |||
INVESTMENT ACTIVITIES | ||||||
Invested in capital projects | (282,737) | (182,840) | (135,179) | |||
Proceeds from sale of plant, properties and equipment | 2,898 | 4,497 | 6,721 | |||
Proceeds from sale of subsidiaries, net of cash disposed | - | 36 | - | |||
Purchases of collateralized receivables | 4 | - | (13,837) | - | ||
Other | (630) | (2,865) | 1,781 | |||
CASH USED FOR INVESTMENT ACTIVITIES | (280,469) | (195,009) | (126,677) | |||
FINANCING ACTIVITIES | ||||||
Issuance of debt | 808,402 | 602,732 | 297,498 | |||
Repayment of debt | (564,393) | (832,165) | (386,246) | |||
Loan issued to a shareholder, net | 10 | (81,818) | (75,000) | - | ||
Purchase of minority interest in OJSC Ilim Group | (35,144) | - | - | |||
Dividends paid | 9 | (129,960) | (70,000) | (112,236) | ||
CASH USED FOR FINANCING ACTIVITIES | (2,913) | (374,433) | (200,984) | |||
Effect of exchange rate changes on cash and cash equivalents | 18,110 | (6,156) | (41,621) | |||
Change in cash and cash equivalents | 242,268 | 35,179 | 32,478 | |||
Cash and cash equivalents | ||||||
Beginning of the year | 4 | 154,650 | 119,471 | 86,993 | ||
End of the year | 4 | 396,918 | 154,650 | 119,471 |
Ilim Holding S.A. shareholders | |||||||||||||||
Common Stock | Additional Paid-in Capital | Receivables From a Shareholder | Retained Earnings | Accumulated Other Comprehen-sive Loss | Total Ilim Holding S.A. Shareholders’ Equity | Non-controlling Interests | Total Equity | ||||||||
BALANCE, JANUARY 1, 2014 | 109,341 | 6,710 | - | 867,238 | (223,658) | 759,631 | 62,932 | 822,563 | |||||||
Dividends (Note 9) | - | - | - | (112,570) | - | (112,570) | - | (112,570) | |||||||
Comprehensive loss (Note 3) | - | - | - | (359,171) | (262,977) | (622,148) | (47,787) | (669,935) | |||||||
BALANCE, DECEMBER 31, 2014 | 109,341 | 6,710 | - | 395,497 | (486,635) | 24,913 | 15,145 | 40,058 | |||||||
Dividends (Note 9) | - | - | - | (70,000) | - | (70,000) | - | (70,000) | |||||||
Dividends paid to non-controlling interests by subsidiary (Note 9) | - | - | - | - | - | - | (4,178) | (4,178) | |||||||
Loan issued to a shareholder (Note 10) | - | 6,067 | (77,272) | - | - | (71,205) | - | (71,205) | |||||||
Comprehensive income/(loss) (Note 3) | - | - | - | 230,470 | (91,907) | 138,563 | 10,028 | 148,591 | |||||||
BALANCE, DECEMBER 31, 2015 | 109,341 | 12,777 | (77,272) | 555,967 | (578,542) | 22,271 | 20,995 | 43,266 | |||||||
Dividends (Note 9) | - | - | - | (118,118) | - | (118,118) | - | (118,118) | |||||||
Dividends paid to non-controlling interests by subsidiary (Note 9) | - | - | - | - | - | - | (19,776) | (19,776) | |||||||
Loan issued to a shareholder, net (Note 10) | 5,074 | (78,474) | - | - | (73,400) | (125) | (73,525) | ||||||||
Purchase of minority interest in subsidiaries from third parties | - | (6,710) | (1,228) | (14,065) | (6,539) | (28,542) | (6,602) | (35,144) | |||||||
Comprehensive income/(loss) (Note 3) | - | - | - | 391,208 | 82,742 | 473,950 | 27,187 | 501,137 | |||||||
BALANCE, DECEMBER 31, 2016 | 109,341 | 11,141 | (156,974) | 814,992 | (502,339) | 276,161 | 21,679 | 297,840 |
1. |
Ownership Percentage and Voting Rights | |||||||||
Entity | Principal activity | Country of incorporation | December 31, 2016 | December 31, 2015 | |||||
OJSC ILIM Group | Manufacturing of pulp, paper and linerboard | Russia | 94.04 | % | 92.84 | % | |||
LLC Fintrans GL | Transportation of cargo | Russia | 94.04 | % | 92.84 | % | |||
LLC Gofra-Dmitrov | Corrugated packaging | Russia | 94.04 | % | - | ||||
Ilim Trading S.A. | Trading company | Switzerland | 100.00 | % | 100.00 | % |
2016 | 2015 | 2014 | |||
Asia except for the Middle East | 1,002,739 | 1,030,566 | 1,059,527 | ||
Russia and the Commonwealth of Independent States (CIS) | 705,525 | 641,761 | 768,677 | ||
Europe | 162,761 | 187,211 | 197,840 | ||
Other | 55,542 | 71,732 | 112,192 | ||
Total Net sales | 1,926,567 | 1,931,270 | 2,138,236 |
1. |
1. |
Asset category | Useful life (years) |
Buildings | 35-50 |
Plant and equipment | 5-25 |
Other | 3-20 |
Asset category | Useful life (years) |
Management accounting system (SAP) | 5-10 |
Other software | 3-5 |
Licenses and patents | 3-5 |
Other | 3-5 |
1. |
• | the counterparty experiences a significant financial difficulty as evidenced by its financial information; |
• | the counterparty considers bankruptcy or a financial reorganization; |
• | there is an adverse change in the payment status of the counterparty as a result of changes in the national or local economic conditions that impact the counterparty. |
1. |
1. |
• | assets and liabilities for each balance sheet are translated at the closing rate at the date of that balance sheet; |
• | share capital and other equity components are translated at historical rates; |
• | income and expenses for each statement of operations and statement of comprehensive income are translated at average monthly exchange rates that approximate the translation using the actual transaction date rates; and |
• | all resulting exchange differences are recognized as a separate component of equity in other comprehensive income. |
1. |
2. |
2. | RECENT ACCOUNTING DEVELOPMENTS (CONTINUED) |
• | ASU 2016-12, “Revenue from Contracts with Customers,” which clarifies how an entity should identify the unit of accounting for the principal versus agent evaluation and how it should apply the control principle to certain types of arrangements. The amendments also reframe the indicators to focus on evidence that an entity is acting as a principal rather than as an agent. |
• | ASU 2016-11, “Revenue Recognition and Derivatives and Hedging,” which rescinds certain SEC guidance from the FASB's Accounting Standards Codification in response to announcements made by the SEC staff at the EITF’s March 3, 2016, meeting. |
• | ASU 2016-10, “Revenue from Contracts with Customers.” The amendments in this Update clarify the following two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. |
• | ASU 2016-08, “Revenue from Contracts with Customers.” This guidance amends the principal-versus-agent implementation guidance and illustrations in ASU 2014-09. This ASU clarifies that an entity should evaluate whether it is the principal or the agent for each specified good or service promised in a contract with a customer. |
3. | OTHER COMPREHENSIVE LOSS |
Defined Benefit Obligation Items (a) | Change in Cumulative Foreign Currency Translation Adjustments (a) | Total (a) | |||
Balance as of December 31, 2015 | 325 | (578,867) | (578,542) | ||
Other comprehensive income (loss) | (246) | 81,854 | 81,608 | ||
Amounts reclassified from accumulated other comprehensive income (loss) | 189 | - | 189 | ||
Net current period other comprehensive income (loss) | (57) | 81,854 | 81,797 | ||
Other comprehensive income (loss) attributable to non-controlling interest | 3 | 942 | 945 | ||
Adjustment due to purchase of minority shares | - | (6,539) | (6,539) | ||
Balance as of December 31, 2016 | 271 | (502,610) | (502,339) |
Defined Benefit Obligation Items (a) | Change in Cumulative Foreign Currency Translation Adjustments (a) | Total (a) | |||
Balance as of December 31, 2014 | 927 | (487,562) | (486,635) | ||
Other comprehensive income (loss) | (694) | (98,240) | (98,934) | ||
Amounts reclassified from accumulated other comprehensive income (loss) | 46 | - | 46 | ||
Net current period other comprehensive income (loss) | (648) | (98,240) | (98,888) | ||
Other comprehensive income (loss) attributable to non-controlling interest | 46 | 6,935 | 6,981 | ||
Balance as of December 31, 2015 | 325 | (578,867) | (578,542) |
Defined Benefit Obligation Items (a) | Change in Cumulative Foreign Currency Translation Adjustments (a) | Total (a) | |||
Balance as of December 31, 2013 | 180 | (223,838) | (223,658) | ||
Other comprehensive income (loss) | 647 | (284,246) | (283,599) | ||
Amounts reclassified from accumulated other comprehensive income (loss) | 158 | - | 158 | ||
Net current period other comprehensive income (loss) | 805 | (284,246) | (283,441) | ||
Other comprehensive income (loss) attributable to non-controlling interest | (58) | 20,522 | 20,464 | ||
Balance as of December 31, 2014 | 927 | (487,562) | (486,635) |
(a) | All amounts are net of tax. |
3. | OTHER COMPREHENSIVE LOSS (CONTINUED) |
Amounts Reclassified from Accumulated Other Comprehensive Loss (a) | Location of Amounts Reclassified from AOCI | ||||||
2016 | 2015 | 2014 | |||||
Defined benefit obligation items: | |||||||
Prior-service costs | (455) | (204) | (370) | (b) | Cost of products sold | ||
Actuarial gains | 219 | 147 | 172 | (b) | Cost of products sold | ||
Total pre-tax amount | (236) | (57) | (198) | ||||
Tax benefit | 47 | 11 | 40 | ||||
Net of tax | (189) | (46) | (158) |
(a) | Amounts in parentheses indicate debits to earnings/loss. |
(b) | These accumulated other comprehensive income components are included in the computation of net periodic defined benefit plan cost. |
4. |
December 31, 2016 | December 31, 2015 | ||
Cash in current bank accounts | 48,347 | 75,954 | |
Bank deposits | 348,571 | 78,696 | |
Total | 396,918 | 154,650 |
December 31, 2016 | December 31, 2015 | ||
Trade receivables | 105,938 | 83,360 | |
Other receivables | 2,481 | 3,447 | |
Less: allowance for doubtful accounts | (11,475) | (8,304) | |
Total financial assets within trade and other receivables | 96,944 | 78,503 | |
Other | 1,175 | 304 | |
Total | 98,119 | 78,807 |
4. | SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION (CONTINUED) |
December 31, 2016 | December 31, 2015 | ||
Russia and the CIS | 85,025 | 55,337 | |
Asia except for the Middle East | 19,907 | 17,780 | |
Europe | 8,009 | 17,647 | |
Other | 9,911 | 855 | |
Total | 122,852 | 91,619 |
December 31, 2016 | December 31, 2015 | ||||||
Gross receivable | Allowance for doubtful accounts | Gross receivable | Allowance for doubtful accounts | ||||
Not past due | 117,096 | - | 84,726 | - | |||
Past due 0-90 days | 7,645 | (2,052) | 7,719 | (1,615) | |||
Past due 90-180 days | 1,123 | (1,016) | 912 | (729) | |||
Past due 180-360 days | 4,907 | (4,851) | 3,825 | (3,746) | |||
Past due more than 360 days | 3,556 | (3,556) | 2,741 | (2,214) | |||
Total | 134,327 | (11,475) | 99,923 | (8,304) |
Trade receivables | Other receivables | Total | |||
At January 1, 2015 | 8,365 | 187 | 8,552 | ||
Additions charged to Earnings | 1,639 | 485 | 2,124 | ||
Deductions from allowance (a) | (62) | (27) | (89) | ||
Translation difference | (2,165) | (118) | (2,283) | ||
At December 31, 2015 | 7,777 | 527 | 8,304 | ||
Additions charged to Earnings | 1,115 | 519 | 1,634 | ||
Deductions from allowance (a) | (53) | (33) | (86) | ||
Translation difference | 1,542 | 81 | 1,623 | ||
At December 31, 2016 | 10,381 | 1,094 | 11,475 |
(a) | Includes write offs, less recoveries, of uncollectible accounts. |
December 31, 2016 | December 31, 2015 | ||
Cash and cash equivalents (Note 4) | 396,918 | 154,650 | |
Financial assets within accounts receivable | 122,852 | 91,619 | |
Prepayment to the pension fund | 6,957 | 5,251 | |
Total | 526,727 | 251,520 |
4. | SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION (CONTINUED) |
December 31, 2016 | December 31, 2015 | ||
Raw materials | 106,232 | 70,331 | |
Finished pulp, paper and packaging products | 18,440 | 33,803 | |
Operating supplies | 57,767 | 44,927 | |
Other | 18,857 | 15,138 | |
Total | 201,296 | 164,199 |
December 31, 2016 | December 31, 2015 | ||
Land and buildings | 351,558 | 267,665 | |
Plant and equipment | 1,292,221 | 971,153 | |
Other | 353,787 | 241,535 | |
Assets under construction and equipment for installation | 153,303 | 69,528 | |
Gross cost | 2,150,869 | 1,549,881 | |
Less: Accumulated depreciation | (878,318) | (636,651) | |
Plant, properties and equipment, net | 1,272,551 | 913,230 |
December 31, 2016 | December 31, 2015 | ||
Prepayment to pension fund | 6,957 | 5,251 | |
Non-current receivables | 237 | 273 | |
Acquired collateralized receivables | - | 13,065 | |
Other non-current assets | 14,513 | 9,419 | |
Total | 21,707 | 28,008 |
4. | SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION (CONTINUED) |
December 31, 2016 | December 31, 2015 | ||
Customer advances | 50,668 | 52,564 | |
Payables and accruals for plant, properties and equipment | 29,684 | 26,266 | |
Unused vacations | 18,580 | 11,698 | |
Interest payable on debt | 1,250 | 1,290 | |
Other accruals and liabilities | 27,874 | 14,743 | |
Total | 128,056 | 106,561 |
2016 | 2015 | 2014 | |||
Sales of goods | 1,903,618 | 1,910,869 | 2,104,315 | ||
Sales of services | 22,949 | 20,401 | 33,921 | ||
Total | 1,926,567 | 1,931,270 | 2,138,236 |
2016 | 2015 | 2014 | |||
Shipping and handling costs | 225,267 | 219,850 | 262,691 |
2016 | 2015 | 2014 | |||
Gain on disposal of plant, properties and equipment | 2,976 | - | 155 | ||
Gain on disposal of non-core materials and spare parts | 746 | 2,140 | 1,065 | ||
Penalties received | 704 | 1,258 | 2,904 | ||
Reversal of allowance for doubtful receivables and prepayments | 117 | 3 | 42 | ||
Gain from reimbursement of overpaid land tax | - | 1,917 | - | ||
Other | 7,764 | 5,125 | 7,987 | ||
Total | 12,307 | 10,443 | 12,153 |
2016 | 2015 | 2014 | |||
Social costs and donations | 6,204 | 4,110 | 9,145 | ||
Redundancy expenses | 2,995 | 2,665 | 1,782 | ||
Impairment of plant, properties and equipment | 2,500 | 2,246 | 1,823 | ||
Allowance for doubtful receivables and prepayments | 1,811 | 2,351 | 3,303 | ||
Tax obligations | 1,462 | 2,068 | - | ||
Penalties paid | 1,035 | 442 | 673 | ||
Environmental remediation costs | - | 2,697 | - | ||
Loss from disposal of plant, properties and equipment and other assets | - | 2,334 | 6,199 | ||
Other | 5,627 | 8,004 | 9,798 | ||
Total | 21,634 | 26,917 | 32,723 |
4. | SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION (CONTINUED) |
2016 | 2015 | 2014 | |||
Interest income | 3,333 | 3,502 | 2,883 | ||
Interest expense | (81,983) | (58,662) | (71,448) | ||
Total Interest expense, net | (78,650) | (55,160) | (68,565) | ||
Capitalized interest costs | 2,993 | 784 | 979 |
6. | INCOME TAXES |
2016 | 2015 | 2014 | |||
Earnings / (loss) | |||||
Russia | 513,335 | 303,223 | (466,850) | ||
Other markets | 33,905 | 17,779 | (4,812) | ||
Earnings / (loss) from continuing operations before income taxes | 547,240 | 321,002 | (471,662) |
6. | INCOME TAXES (CONTINUED) |
2016 | 2015 | 2014 | |||
Current tax expense | |||||
Russia | (39,191) | (1,262) | (6,007) | ||
Other markets | (21,712) | (5,634) | (1,912) | ||
(60,903) | (6,896) | (7,919) | |||
Deferred tax (expense)/benefit | |||||
Russia | (66,679) | (65,452) | 91,587 | ||
Other markets | (318) | (1,175) | 1,500 | ||
(66,997) | (66,627) | 93,087 | |||
Income tax (expense)/benefit | (127,900) | (73,523) | 85,168 |
2016 | 2015 | 2014 | ||||||
Earnings/(loss) from continuing operations before income taxes | 547,240 | 321,002 | (471,662) | |||||
Statutory Russian income tax rate | 20 | % | 20 | % | 20 | % | ||
Tax (expense)/benefit using statutory Russian income tax rate | (109,448) | (64,200) | 94,332 | |||||
Tax rate and permanent differences on non-Russian earnings | 1,589 | (495) | (1,440) | |||||
Non-deductible expenses | (4,861) | (6,148) | (8,542) | |||||
Tax on dividends | (15,668) | (2,670) | - | |||||
Other, net | 488 | (10) | 818 | |||||
Income tax (expense)/benefit | (127,900) | (73,523) | 85,168 | |||||
Effective income tax rate | 23 | % | 23 | % | 18 | % |
December 31, 2016 | December 31, 2015 | ||
Deferred income tax assets: | |||
Net operating loss carryforwards | 445 | 53,805 | |
Other | 9,321 | 4,674 | |
Deferred income tax assets | 9,766 | 58,479 | |
Deferred income tax liabilities: | |||
Intangible assets | (3,900) | (2,826) | |
Plant, properties and equipment | (98,765) | (71,125) | |
Other | (617) | (498) | |
Deferred income tax liabilities | (103,282) | (74,449) | |
Net deferred income tax (liabilities)/asset | (93,516) | (15,970) |
6. | INCOME TAXES (CONTINUED) |
7. |
7. | COMMITMENTS AND CONTINGENT LIABILITIES (CONTINUED) |
7. | COMMITMENTS AND CONTINGENT LIABILITIES (CONTINUED) |
December 31, 2016 | December 31, 2015 | ||
Less than 1 year | 6,770 | 4,689 | |
More than 1 year and up to 5 years | 27,081 | 18,756 | |
More than 5 years and thereafter (up to 49 years) | 221,408 | 147,037 | |
Total operating lease commitments | 255,259 | 170,482 |
8. |
Weighted average interest rates | Notional currency | December 31, 2016 | December 31, 2015 | ||||
Fixed rate long-term bank loans | 12.00 | % | RUB | 509,810 | 294,899 | ||
Fixed rate long-term bank loans | 5.50 | % | US Dollar | 21,986 | 70,290 | ||
Floating rate long-term bank loans | 3.55 | % | US Dollar | 933,629 | 779,233 | ||
Finance lease liabilities | 9.21 | % | RUB | 9,101 | 7,904 | ||
Total long-term borrowings (a) | 1,474,526 | 1,152,326 | |||||
Less: current maturities | 155,122 | 461,147 | |||||
Long-term debt | 1,319,404 | 691,179 |
(a) | The estimated fair market value was approximately $ 1,477,420 at December 31, 2016 and $ 1,160,078 at December 31, 2015. The fair values are determined on the basis of expected cash flows discounted at current interest rates for new instruments with similar credit risks and remaining maturities and were categorized to level 2 of the fair value hierarchy. |
8. | DEBT AND LINES OF CREDIT (CONTINUED) |
Less than 1 year | 1-5 years | Over 5 years | Total | ||||
Minimum lease payments at December 31, 2016 | 1,255 | 5,019 | 8,857 | 15,131 | |||
Less: future finance charges | (821) | (2,822) | (2,387) | (6,030) | |||
Present value of minimum lease payments at December 31, 2016 | 434 | 2,197 | 6,470 | 9,101 |
Less than 1 year | 1-5 years | Over 5 years | Total | ||||
Minimum lease payments at December 31, 2015 | 1,044 | 4,177 | 8,415 | 13,636 | |||
Less: future finance charges | (714) | (2,509) | (2,509) | (5,732) | |||
Present value of minimum lease payments at December 31, 2015 | 330 | 1,668 | 5,906 | 7,904 |
9. |
10. | RELATED PARTY TRANSACTIONS |
• | Companies controlled by the Russian Shareholders; |
• | International Paper Company. |
December 31, 2016 | December 31, 2015 | ||||||
Sales/purchases of: | Receivables | Payables | Receivables | Payables | |||
Raw materials | 5,237 | (470) | 3,023 | (231) | |||
Other services | 2,579 | (2,182) | 49 | (1,059) | |||
Transport services | 610 | - | 436 | - | |||
Operating lease | 246 | (3) | 186 | (3) | |||
Electricity, gas, heating | 211 | - | 21 | - | |||
Prepayments | - | - | - | (9) | |||
Total | 8,883 | (2,655) | 3,715 | (1,302) |
2016 | 2015 | 2014 | |||||||||
Income | Expenses | Income | Expenses | Income | Expenses | ||||||
Raw materials | 40,023 | (5,275) | 41,626 | (5,571) | 59,732 | (9,283) | |||||
Other services | 1,362 | (4,103) | 1,387 | (3,355) | 1,617 | (6,548) | |||||
Energy, gas, water and heat | 1,350 | - | 1,248 | - | 1,862 | - | |||||
Transport services | 1,238 | - | 1,254 | - | 2,968 | (2) | |||||
Operating lease | 451 | (1,254) | 288 | (1,294) | 437 | (1,906) | |||||
Plant, properties and equipment | - | - | - | (532) | - | (8,188) | |||||
Total | 44,424 | (10,632) | 45,803 | (10,752) | 66,616 | (25,927) |
10. | RELATED PARTY TRANSACTIONS (CONTINUED) |
December 31, 2016 | December 31, 2015 | ||||||
Sales/purchases of: | Receivables | Payables | Receivables | Payables | |||
Finished goods | 16,978 | (7) | 9,401 | (383) | |||
Services | 33 | (4,651) | - | (4,406) | |||
Raw materials | 14 | - | - | - | |||
Plant, properties and equipment | - | - | - | (437) | |||
Total | 17,025 | (4,658) | 9,401 | (5,226) |
2016 | 2015 | 2014 | |||||||||
Sales | Purchases | Sales | Purchases | Sales | Purchases | ||||||
Finished goods | 200,500 | (47) | 178,217 | (19) | 211,269 | (49) | |||||
Services | - | (214) | 3 | (1,336) | 5 | (5,267) | |||||
Total | 200,500 | (261) | 178,220 | (1,355) | 211,274 | (5,316) |
11. | SUBSEQUENT EVENTS |
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