New York | 13-0872805 | |
(State or other jurisdiction of incorporation) | (IRS Employer Identification No.) |
6400 Poplar Avenue, Memphis, Tennessee | 38197 | |
(Address of principal executive offices) | (ZIP Code) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||
Common Stock, $1 per share par value | IP | New York Stock Exchange |
Exhibit Number | Description | |
99.1 | Press Release of International Paper Company dated July 25, 2019. |
Exhibit Number | Description | |
99.1 |
International Paper Company | |||
Date: July 25, 2019 | By: | /s/ Vincent P. Bonnot | |
Name: | Vincent P. Bonnot | ||
Title: | Vice President - Finance and Controller |
• | Second quarter net earnings attributable to International Paper of $292 million ($0.73 per diluted share) compared with $424 million ($1.05 per diluted share) in the first quarter of 2019 and $405 million ($0.97 per diluted share) in the second quarter of 2018 |
• | Second quarter adjusted operating earnings* (non-GAAP) of $460 million ($1.15 per diluted share) compared with $447 million ($1.11 per diluted share) in the first quarter of 2019 and $498 million ($1.19 per diluted share) in the second quarter of 2018 |
• | Second quarter equity earnings of $80 million compared with $70 million in the second quarter of 2018 |
• | Second quarter cash provided by operations of $1.1 billion and year-to-date of $1.8 billion compared with $1.5 billion year-to-date in the same period of 2018 |
• | Second quarter share repurchases of $231 million, bringing the trailing 12 month total to $811 million |
Second Quarter 2019 | First Quarter 2019 | Second Quarter 2018 | |||||||||||
Net Earnings | $ | 0.73 | $ | 1.05 | $ | 0.97 | |||||||
Less – Discontinued Operations (Gain) Loss | — | — | 0.05 | ||||||||||
Net Earnings (Loss) from Continuing Operations | 0.73 | 1.05 | 1.02 | ||||||||||
Add Back – Non-Operating Pension Expense | 0.01 | 0.02 | 0.07 | ||||||||||
Add Back – Net Special Items Expense (Income) | 0.41 | 0.04 | 0.10 | ||||||||||
Adjusted Operating Earnings* | $ | 1.15 | $ | 1.11 | $ | 1.19 |
* | Adjusted operating earnings (non-GAAP) is defined as net earnings from continuing operations attributable to International Paper Company (GAAP) excluding special items and non-operating pension expense. Management uses this measure to focus on on-going operations, and believes that it is useful to investors because it enables them to perform meaningful comparisons of past and present consolidated operating results. For discussion of special items, net and non-operating pension expense, see the footnotes to the Consolidated Statement of Operations. |
(In millions) | Second Quarter 2019 | First Quarter 2019 | Second Quarter 2018 | ||||||||||
Net Sales | $ | 5,667 | $ | 5,643 | $ | 5,833 | |||||||
Net Earnings Attributable to International Paper | 292 | 424 | 405 | ||||||||||
Business Segment Operating Profit | 472 | 579 | 697 | ||||||||||
Adjusted Operating Earnings | 460 | 447 | 498 | ||||||||||
Cash Provided By (Used For) Operations | 1,067 | 733 | 801 | ||||||||||
Free Cash Flow | 732 | 440 | 361 |
(In millions) | Second Quarter 2019 | First Quarter 2019 | Second Quarter 2018 | ||||||||||
Net Sales by Business Segment | |||||||||||||
Industrial Packaging | $ | 3,864 | $ | 3,832 | $ | 4,022 | |||||||
Global Cellulose Fibers | 661 | 689 | 692 | ||||||||||
Printing Papers | 1,088 | 1,065 | 1,060 | ||||||||||
Corporate and Inter-segment Sales | 54 | 57 | 59 | ||||||||||
Net Sales | $ | 5,667 | $ | 5,643 | $ | 5,833 | |||||||
Operating Profit by Business Segment | |||||||||||||
Industrial Packaging | $ | 507 | $ | 404 | $ | 537 | |||||||
Global Cellulose Fibers | (2 | ) | 32 | 66 | |||||||||
Printing Papers | (33 | ) | 143 | 94 | |||||||||
Total Business Segment Operating Profit | $ | 472 | $ | 579 | $ | 697 |
Second Quarter 2019 | First Quarter 2019 | Second Quarter 2018 | ||||||||||||||||||||
(In millions) | Before Tax | After Tax | Before Tax | After Tax | Before Tax | After Tax | ||||||||||||||||
Restructuring and other charges, net: | ||||||||||||||||||||||
EMEA Packaging business optimization | — | — | — | — | 26 | 18 | ||||||||||||||||
Total restructuring and other charges, net | — | — | — | — | 26 | 18 | ||||||||||||||||
India impairment | 145 | 143 | — | — | — | — | ||||||||||||||||
Multi-employer pension plan exit liability | — | — | 16 | 12 | — | — | ||||||||||||||||
Gain on sale of EMEA Packaging box plant | — | — | (7 | ) | (6 | ) | — | — | ||||||||||||||
Abandoned property removal | 11 | 8 | 11 | 8 | 9 | 7 | ||||||||||||||||
Smurfit-Kappa acquisition proposal costs | — | — | — | — | 12 | 9 | ||||||||||||||||
Other | 2 | 2 | 1 | 1 | — | — | ||||||||||||||||
Tax expense, net | — | 9 | — | — | — | 9 | ||||||||||||||||
Total special items, net | $ | 158 | $ | 162 | $ | 21 | $ | 15 | $ | 47 | $ | 43 |
Three Months Ended June 30, | Three Months Ended March 31, | Six Months Ended June 30, | |||||||||||||||||||
2019 | 2018 | 2019 | 2019 | 2018 | |||||||||||||||||
Net Sales | $ | 5,667 | $ | 5,833 | $ | 5,643 | $ | 11,310 | $ | 11,454 | |||||||||||
Costs and Expenses | |||||||||||||||||||||
Cost of products sold | 3,901 | (a) | 3,922 | (g) | 3,929 | (a) | 7,830 | (a) | 7,870 | (g) | |||||||||||
Selling and administrative expenses | 402 | 451 | (h) | 413 | 815 | 872 | (h) | ||||||||||||||
Depreciation, amortization and cost of timber harvested | 321 | (b) | 330 | 315 | (b) | 636 | (b) | 655 | |||||||||||||
Distribution expenses | 384 | 403 | 389 | 773 | 769 | ||||||||||||||||
Taxes other than payroll and income taxes | 43 | 42 | 43 | 86 | 86 | ||||||||||||||||
Restructuring and other charges, net | — | 26 | (i) | — | — | 48 | (i) | ||||||||||||||
Net (gains) losses on sales and impairments of businesses | 152 | (c) | — | (7 | ) | (c) | 145 | (c) | — | ||||||||||||
Interest expense, net | 122 | (d) | 133 | 133 | 255 | (d) | 268 | ||||||||||||||
Non-operating pension expense | 8 | 36 | 10 | 18 | 40 | ||||||||||||||||
Earnings (Loss) From Continuing Operations Before Income Taxes and Equity Earnings | 334 | 490 | 418 | 752 | 846 | ||||||||||||||||
Income tax provision (benefit) | 128 | (e) | 130 | (j) | 106 | 234 | (e) | 219 | (j) | ||||||||||||
Equity earnings (loss), net of taxes | 80 | 70 | 114 | 194 | 165 | ||||||||||||||||
Earnings (Loss) From Continuing Operations | 286 | 430 | 426 | 712 | 792 | ||||||||||||||||
Discontinued operations, net of taxes | — | (23 | ) | (k) | — | — | 345 | (k) | |||||||||||||
Net Earnings (Loss) | 286 | 407 | 426 | 712 | 1,137 | ||||||||||||||||
Less: Net earnings (loss) attributable to noncontrolling interests | (6 | ) | (f) | 2 | 2 | (4 | ) | (f) | 3 | ||||||||||||
Net Earnings (Loss) Attributable to International Paper Company | $ | 292 | $ | 405 | $ | 424 | $ | 716 | $ | 1,134 | |||||||||||
Basic Earnings Per Common Share Attributable to International Paper Common Shareholders | |||||||||||||||||||||
Earnings (loss) from continuing operations | $ | 0.74 | $ | 1.03 | $ | 1.06 | $ | 1.80 | $ | 1.91 | |||||||||||
Discontinued operations | — | (0.05 | ) | — | — | 0.83 | |||||||||||||||
Net earnings (loss) | $ | 0.74 | $ | 0.98 | $ | 1.06 | $ | 1.80 | $ | 2.74 | |||||||||||
Diluted Earnings Per Common Share Attributable to International Paper Common Shareholders | |||||||||||||||||||||
Earnings (loss) from continuing operations | $ | 0.73 | $ | 1.02 | $ | 1.05 | $ | 1.78 | $ | 1.88 | |||||||||||
Discontinued operations | — | (0.05 | ) | — | — | 0.83 | |||||||||||||||
Net earnings (loss) | $ | 0.73 | $ | 0.97 | $ | 1.05 | $ | 1.78 | $ | 2.71 | |||||||||||
Average Shares of Common Stock Outstanding - Diluted | 398.2 | 417.7 | 403.2 | 401.4 | 418.8 |
(a) | Includes pre-tax charges of $11 million ($8 million after taxes) for each of the three months ended June 30, 2019 and March 31, 2019 and $22 million ($16 million after taxes) for the six months ended June 30, 2019 for the removal of abandoned property at our mills and a pre-tax charge of $16 million ($12 million after taxes) for the three months and six months ended March 31, 2019 and June 30, 2019 for costs associated with a multi-employer pension plan exit liability. |
(b) | Includes charges of $1 million (before and after taxes) for each of the three months ended June 30, 2019 and March 31, 2019 and $2 million (before and after taxes) for the six months ended June 30, 2019 for accelerated depreciation associated with the announced conversion of a paper machine at our Riverdale mill to containerboard production. |
(c) | Includes a loss of $95 million (before and after taxes) for the three months and six months ended June 30, 2019 related to the foreign currency cumulative translation adjustment resulting from the classification of the net assets of our India Papers business as held for sale, a pre-tax loss of $57 million ($55 million after taxes) for the three months and six months ended June 30, 2019 for the impairment of the net assets of our India Papers business and a pre-tax gain of $7 million ($6 million after taxes) for the three months ended March 31, 2019 and six months ended June 30, 2019 related to the sale of a box plant in our EMEA Packaging business. |
(d) | Includes a charge of $1 million (before and after taxes) for the three months and six months ended June 30, 2019 for interest expense associated with foreign tax audits. |
(e) | Includes tax expense of $9 million for the three months and six months ended June 30, 2019 related to a tax rate change in Luxembourg, tax expense of $3 million for the three months and six months ended June 30, 2019 related to foreign tax audits and a tax benefit of $3 million for the three months and six months ended June 30, 2019 related to state income tax legislative changes. |
(f) | Includes the allocation of loss to noncontrolling interest of $7 million (before and after taxes) for the three months and six months ended June 30, 2019 associated with the impairment of the net assets of our India Papers business. |
(g) | Includes pre-tax charges of $9 million ($7 million after taxes) for the three months ended June 30, 2018 and $18 million ($14 million after taxes) for the six months ended June 30, 2018 for the removal of abandoned property at our mills and a pre-tax charge of $9 million ($7 million after taxes) for the six months ended June 30, 2018 for a legal settlement. |
(h) | Includes a pre-tax charge of $12 million ($9 million after taxes) for the three months and six months ended June 30, 2018 associated with our proposal to acquire Smurfit Kappa. |
(i) | Includes pre-tax charges of $26 million ($18 million after taxes) and $48 million ($35 million after taxes) for the three months and six months ended June 30, 2018, respectively, related to the optimization of our EMEA Packaging business. |
(j) | Includes tax expense of $9 million for the three months and six months ended June 30, 2018 related to state income tax legislative changes. |
(k) | Includes a pre-tax charge of $28 million ($21 million after taxes) and pre-tax income of $488 million ($364 million after taxes) for the three months and six months ended June 30, 2018, respectively, for the gain on the transfer of the North American Consumer Packaging business. Also includes charges of $2 million (before and after taxes) and pre-tax charges of $25 million ($19 million after taxes) for the three months and six months ended June 30, 2018, respectively, for transaction costs to transfer the North American Consumer Packaging business. |
Three Months Ended June 30, | Three Months Ended March 31, | Six Months Ended June 30, | |||||||||||||||||||
2019 | 2018 | 2019 | 2019 | 2018 | |||||||||||||||||
Net Earnings (Loss) Attributable to International Paper Company | $ | 292 | $ | 405 | $ | 424 | $ | 716 | $ | 1,134 | |||||||||||
Less: Discontinued operations (gain) loss | — | 23 | — | — | (345 | ) | |||||||||||||||
Earnings (Loss) from Continuing Operations, including non-controlling interest | 292 | 428 | 424 | 716 | 789 | ||||||||||||||||
Add back: Non-operating pension expense | 6 | 27 | 8 | 14 | 30 | ||||||||||||||||
Add back: Special items expense (income) | 162 | 43 | 15 | 177 | 74 | ||||||||||||||||
Adjusted Operating Earnings | $ | 460 | $ | 498 | $ | 447 | $ | 907 | $ | 893 | |||||||||||
Three Months Ended June 30, | Three Months Ended March 31, | Six Months Ended June 30, | |||||||||||||||||||
2019 | 2018 | 2019 | 2019 | 2018 | |||||||||||||||||
Diluted Earnings per Common Share as Reported | $ | 0.73 | $ | 0.97 | $ | 1.05 | $ | 1.78 | $ | 2.71 | |||||||||||
Less: Discontinued operations (gain) loss | — | 0.05 | — | — | (0.83 | ) | |||||||||||||||
Continuing Operations | 0.73 | 1.02 | 1.05 | 1.78 | 1.88 | ||||||||||||||||
Add back: Non-operating pension expense | 0.01 | 0.07 | 0.02 | 0.03 | 0.07 | ||||||||||||||||
Add back: Special items expense (income) | 0.41 | 0.10 | 0.04 | 0.45 | 0.18 | ||||||||||||||||
Adjusted Operating Earnings per Share | $ | 1.15 | $ | 1.19 | $ | 1.11 | $ | 2.26 | $ | 2.13 |
Three Months Ended June 30, | Three Months Ended March 31, | Six Months Ended June 30, | |||||||||||||||||||
2019 | 2018 | 2019 | 2019 | 2018 | |||||||||||||||||
Industrial Packaging | $ | 3,864 | $ | 4,022 | $ | 3,832 | $ | 7,696 | $ | 7,849 | |||||||||||
Global Cellulose Fibers | 661 | 692 | 689 | 1,350 | 1,369 | ||||||||||||||||
Printing Papers | 1,088 | 1,060 | 1,065 | 2,153 | 2,113 | ||||||||||||||||
Corporate and Inter-segment Sales | 54 | 59 | 57 | 111 | 123 | ||||||||||||||||
Net Sales | $ | 5,667 | $ | 5,833 | $ | 5,643 | $ | 11,310 | $ | 11,454 | |||||||||||
Operating Profit by Business Segment | |||||||||||||||||||||
Three Months Ended June 30, | Three Months Ended March 31, | Six Months Ended June 30, | |||||||||||||||||||
2019 | 2018 | 2019 | 2019 | 2018 | |||||||||||||||||
Industrial Packaging | $ | 507 | (a) | $ | 537 | (f) | $ | 404 | (a) | $ | 911 | (a) | $ | 974 | (f) | ||||||
Global Cellulose Fibers | (2 | ) | (b) | 66 | (g) | 32 | (b) | 30 | (b) | 77 | (g) | ||||||||||
Printing Papers | (33 | ) | (c) | 94 | 143 | (c) | 110 | (c) | 158 | ||||||||||||
Total Business Segment Operating Profit | $ | 472 | $ | 697 | $ | 579 | $ | 1,051 | $ | 1,209 | |||||||||||
Earnings (Loss) From Continuing Operations Before Income Taxes and Equity Earnings | $ | 334 | $ | 490 | $ | 418 | $ | 752 | $ | 846 | |||||||||||
Interest expense, net | 122 | (d) | 133 | 133 | 255 | (d) | 268 | ||||||||||||||
Noncontrolling interest/equity earnings adjustment (i) | 5 | (e) | (4 | ) | (3 | ) | 2 | (e) | (5 | ) | |||||||||||
Corporate expenses, net | 3 | 30 | 21 | 24 | 39 | ||||||||||||||||
Corporate special items, net | — | 12 | (h) | — | — | 21 | (h) | ||||||||||||||
Non-operating pension expense | 8 | 36 | 10 | 18 | 40 | ||||||||||||||||
Adjusted Operating Profit | $ | 472 | $ | 697 | $ | 579 | $ | 1,051 | $ | 1,209 | |||||||||||
Equity Earnings (Loss) in Ilim S.A., Net of Taxes | $ | 67 | $ | 57 | $ | 101 | $ | 168 | $ | 149 | |||||||||||
Equity Earnings (Loss) in Graphic Packaging International Partners, LLC | $ | 14 | $ | 15 | $ | 13 | $ | 27 | $ | 17 |
(a) | Includes charges of $8 million for each of the three months ended June 30, 2019 and March 31, 2019 and $16 million for the six months ended June 30, 2019 for the removal of abandoned property at our mills, a charge of $16 million for the three months ended March 31, 2019 and six months ended June 30, 2019 for costs associated with a multi-employer pension plan exit liability and a gain of $7 million for the three months ended March 31, 2019 and the six months ended June 30, 2019 related to the sale of a box plant in our EMEA Packaging business. |
(b) | Includes charges of $2 million, $3 million and $5 million for the three months ended June 30, 2019 and March 31, 2019 and the six months ended June 30, 2019, respectively, for the removal of abandoned property at our mills. |
(c) | Includes a loss of $95 million for the three months and six months ended June 30, 2019 related to the foreign currency cumulative translation adjustment resulting from the classification of the net assets of our India Papers business as held for sale, a loss of $57 million, partially offset by the allocation of loss to noncontrolling interest of $7 million, for the three months and six months ended June 30, 2019 for the impairment of the net assets of our India Papers business, a charge of $1 million for each of the three months ended June 30, 2019 and March 31, 2019 and $2 million for the six months ended June 30, 2019 for accelerated depreciation associated with the announced conversion of a paper machine at our Riverdale mill to containerboard production and a charge of $1 million for the three months and six months ended June 30, 2019 for the removal of abandoned property at our mills. |
(d) | Includes a charge of $1 million for the three months and six months ended June 30, 2019 for interest expense associated with foreign tax audits. |
(e) | Includes the allocation of loss to noncontrolling interest of $7 million for the three months and six months ended June 30, 2019 associated with the impairment of the net assets of our India Papers business. |
(f) | Includes charges of $26 million and $48 million for the three months and six months ended June 30, 2018, respectively, related to the optimization of our EMEA Packaging business and charges of $6 million and $11 million for the three months and six months ended June 30, 2018, respectively, for the removal of abandoned property at our mills and other costs. |
(g) | Includes charges of $3 million and $7 million for the three months and six months ended June 30, 2018, respectively, for the removal of abandoned property at our mills and other costs. |
(h) | Includes charges of $12 million for the three months and six months ended June 30, 2018 associated with our proposal to acquire Smurfit Kappa and a charge of $9 million for the six months ended June 30, 2018 for a legal settlement. |
(i) | Operating profits for business segments include each segment's percentage share of the profits of subsidiaries included in that segment that are less than wholly owned. The pre-tax noncontrolling interest and equity earnings for these subsidiaries are adjusted here to present consolidated earnings before income taxes and equity earnings. |
Three Months Ended June 30, 2019 | ||||||||||||||||
Industrial Packaging | Global Cellulose Fibers | Printing Papers | Total | |||||||||||||
Operating Profit (Loss) as Reported | $ | 507 | $ | (2 | ) | $ | (33 | ) | $ | 472 | ||||||
Special Items Expense (Income) (a) | 8 | 2 | 147 | 157 | ||||||||||||
Operating Profit (Loss) Before Special Items | $ | 515 | $ | — | $ | 114 | $ | 629 | ||||||||
Three Months Ended June 30, 2018 | ||||||||||||||||
Industrial Packaging | Global Cellulose Fibers | Printing Papers | Total | |||||||||||||
Operating Profit (Loss) as Reported | $ | 537 | $ | 66 | $ | 94 | $ | 697 | ||||||||
Special Items Expense (Income) (b) | 32 | 3 | — | 35 | ||||||||||||
Operating Profit (Loss) Before Special Items | $ | 569 | $ | 69 | $ | 94 | $ | 732 | ||||||||
Three Months Ended March 31, 2019 | ||||||||||||||||
Industrial Packaging | Global Cellulose Fibers | Printing Papers | Total | |||||||||||||
Operating Profit (Loss) as Reported | $ | 404 | $ | 32 | $ | 143 | $ | 579 | ||||||||
Special Items Expense (Income) (a) | 17 | 3 | 1 | 21 | ||||||||||||
Operating Profit (Loss) Before Special Items | $ | 421 | $ | 35 | $ | 144 | $ | 600 | ||||||||
Six Months Ended June 30, 2019 | ||||||||||||||||
Industrial Packaging | Global Cellulose Fibers | Printing Papers | Total | |||||||||||||
Operating Profit (Loss) as Reported | $ | 911 | $ | 30 | $ | 110 | $ | 1,051 | ||||||||
Special Items Expense (Income) (a) | 25 | 5 | 148 | 178 | ||||||||||||
Operating Profit (Loss) Before Special Items | $ | 936 | $ | 35 | $ | 258 | $ | 1,229 | ||||||||
Six Months Ended June 30, 2018 | ||||||||||||||||
Industrial Packaging | Global Cellulose Fibers | Printing Papers | Total | |||||||||||||
Operating Profit (Loss) as Reported | $ | 974 | $ | 77 | $ | 158 | $ | 1,209 | ||||||||
Special Items Expense (Income) (b) | 59 | 7 | — | 66 | ||||||||||||
Operating Profit (Loss) Before Special Items | $ | 1,033 | $ | 84 | $ | 158 | $ | 1,275 |
(a) | See footnotes (a) - (c) on Sales and Earnings by Business Segment | ||||||||
(b) | See footnotes (f) - (g) on Sales and Earnings by Business Segment |
The Company calculates Operating Profit Before Special Items (non-GAAP) by excluding the pre-tax effect of items considered by management to be unusual from the earnings reported under U.S. generally accepted accounting principles (“GAAP”). Management uses this measure to focus on on-going operations, and believes that it is useful to investors because it enables them to perform meaningful comparisons of past and present operating results. International Paper believes that using this information, along with net earnings, provides for a more complete analysis of the results of operations by quarter. Net earnings attributable to International Paper is the most directly comparable GAAP measure. |
Three Months Ended June 30, | Three Months Ended March 31, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2019 | 2018 | ||||||||||||
Industrial Packaging (In thousands of short tons) | ||||||||||||||||
Corrugated Packaging (c) | 2,624 | 2,724 | 2,535 | 5,159 | 5,303 | |||||||||||
Containerboard | 707 | 800 | 697 | 1,404 | 1,583 | |||||||||||
Recycling | 625 | 597 | 609 | 1,234 | 1,134 | |||||||||||
Saturated Kraft | 52 | 52 | 41 | 93 | 98 | |||||||||||
Gypsum /Release Kraft | 49 | 67 | 51 | 100 | 120 | |||||||||||
Bleached Kraft | 5 | 9 | 7 | 12 | 16 | |||||||||||
EMEA Packaging (c) | 379 | 387 | 370 | 749 | 784 | |||||||||||
Brazilian Packaging (c) | 91 | 85 | 85 | 176 | 171 | |||||||||||
European Coated Paperboard | 102 | 90 | 104 | 206 | 186 | |||||||||||
Industrial Packaging | 4,634 | 4,811 | 4,499 | 9,133 | 9,395 | |||||||||||
Global Cellulose Fibers (In thousands of metric tons) (b) | 869 | 884 | 859 | 1,728 | 1,779 | |||||||||||
Printing Papers (In thousands of short tons) | ||||||||||||||||
U.S. Uncoated Papers | 441 | 484 | 448 | 889 | 954 | |||||||||||
European & Russian Uncoated Papers | 367 | 342 | 354 | 721 | 703 | |||||||||||
Brazilian Uncoated Papers | 283 | 265 | 244 | 527 | 525 | |||||||||||
Indian Uncoated Papers | 66 | 66 | 68 | 134 | 133 | |||||||||||
Printing Papers | 1,157 | 1,157 | 1,114 | 2,271 | 2,315 |
(a) | Sales volumes include third party and inter-segment sales and exclude sales of equity investees. |
(b) | Includes North American, European and Brazilian volumes and internal sales to mills. |
(c) | Volumes for corrugated box sales reflect consumed tons sold (CTS). Board sales by these businesses reflect invoiced tons. |
June 30, 2019 | December 31, 2018 | |||||||
Assets | ||||||||
Current Assets | ||||||||
Cash and Temporary Investments | $ | 787 | $ | 589 | ||||
Accounts and Notes Receivable, Net | 3,477 | 3,521 | ||||||
Contract Assets | 399 | 395 | ||||||
Inventories | 2,224 | 2,241 | ||||||
Assets Held for Sale | 286 | — | ||||||
Other | 215 | 250 | ||||||
Total Current Assets | 7,388 | 6,996 | ||||||
Plants, Properties and Equipment, Net | 12,962 | 13,067 | ||||||
Forestlands | 405 | 402 | ||||||
Investments | 1,646 | 1,648 | ||||||
Financial Assets of Variable Interest Entities | 7,079 | 7,070 | ||||||
Goodwill | 3,441 | 3,374 | ||||||
Right of Use Assets | 408 | — | ||||||
Deferred Charges and Other Assets | 1,018 | 1,019 | ||||||
Total Assets | $ | 34,347 | $ | 33,576 | ||||
Liabilities and Equity | ||||||||
Current Liabilities | ||||||||
Notes Payable and Current Maturities of Long-Term Debt | $ | 676 | $ | 639 | ||||
Accounts Payable and Other Current Liabilities | 4,123 | 4,055 | ||||||
Liabilities Held for Sale | 250 | — | ||||||
Total Current Liabilities | 5,049 | 4,694 | ||||||
Long-Term Debt | 10,050 | 10,015 | ||||||
Nonrecourse Financial Liabilities of Variable Interest Entities | 6,302 | 6,298 | ||||||
Deferred Income Taxes | 2,624 | 2,600 | ||||||
Pension Benefit Obligation | 1,694 | 1,762 | ||||||
Postretirement and Postemployment Benefit Obligation | 257 | 264 | ||||||
Long-Term Lease Obligations | 281 | — | ||||||
Other Liabilities | 591 | 560 | ||||||
Equity | ||||||||
Invested Capital, Net of Treasury Stock | (820 | ) | (103 | ) | ||||
Retained Earnings | 8,302 | 7,465 | ||||||
Total International Paper Shareholders’ Equity | 7,482 | 7,362 | ||||||
Noncontrolling interests | 17 | 21 | ||||||
Total Equity | 7,499 | 7,383 | ||||||
Total Liabilities and Equity | $ | 34,347 | $ | 33,576 |
Six Months Ended June 30, | ||||||||
2019 | 2018 | |||||||
Operating Activities | ||||||||
Net earnings (loss) | $ | 712 | $ | 1,137 | ||||
Depreciation, amortization and cost of timber harvested | 636 | 655 | ||||||
Deferred income tax expense (benefit), net | 50 | 196 | ||||||
Restructuring and other charges, net | — | 48 | ||||||
Net gain on transfer of North American Consumer Packaging business | — | (488 | ) | |||||
Net (gains) losses on sales and impairments of businesses | 145 | — | ||||||
Equity method dividends received | 251 | 122 | ||||||
Equity (earnings) losses, net | (194 | ) | (165 | ) | ||||
Periodic pension expense, net | 47 | 115 | ||||||
Other, net | 55 | 57 | ||||||
Changes in current assets and liabilities | ||||||||
Accounts and notes receivable | 48 | (333 | ) | |||||
Contract assets | (4 | ) | (17 | ) | ||||
Inventories | 48 | (26 | ) | |||||
Accounts payable and accrued liabilities | 2 | 142 | ||||||
Interest payable | 1 | 2 | ||||||
Other | 3 | 19 | ||||||
Cash Provided By (Used For) Operating Activities | 1,800 | 1,464 | ||||||
Investment Activities | ||||||||
Invested in capital projects | (628 | ) | (929 | ) | ||||
Acquisitions, net of cash acquired | (99 | ) | — | |||||
Net settlement on transfer of North American Consumer Packaging business | — | (40 | ) | |||||
Proceeds from divestitures, net of cash divested | 17 | — | ||||||
Proceeds from sale of fixed assets | 4 | 2 | ||||||
Other | (9 | ) | 3 | |||||
Cash Provided By (Used For) Investment Activities | (715 | ) | (964 | ) | ||||
Financing Activities | ||||||||
Repurchases of common stock and payments of restricted stock tax withholding | (460 | ) | (331 | ) | ||||
Issuance of debt | 444 | 411 | ||||||
Reduction of debt | (452 | ) | (73 | ) | ||||
Change in book overdrafts | (14 | ) | (24 | ) | ||||
Dividends paid | (398 | ) | (393 | ) | ||||
Net debt tender premiums paid | 4 | — | ||||||
Cash Provided By (Used for) Financing Activities | (876 | ) | (410 | ) | ||||
Cash Included in Assets Held for Sale | (21 | ) | — | |||||
Effect of Exchange Rate Changes on Cash | 10 | (35 | ) | |||||
Change in Cash and Temporary Investments | 198 | 55 | ||||||
Cash and Temporary Investments | ||||||||
Beginning of the period | 589 | 1,018 | ||||||
End of the period | $ | 787 | $ | 1,073 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Cash Provided By (Used For) Operating Activities | $ | 1,067 | $ | 801 | $ | 1,800 | $ | 1,464 | |||||||
Adjustments: | |||||||||||||||
Cash invested in capital projects | (335 | ) | (440 | ) | (628 | ) | (929 | ) | |||||||
Free Cash Flow | $ | 732 | $ | 361 | $ | 1,172 | $ | 535 |
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