Industry Press Releases

International Paper Reports First Quarter 2017 Earnings

Friday, Apr 28, 2017

International Paper today reported first quarter 2017 net earnings attributable to International Paper of $209 million ($0.50 per share) compared with net earnings of $218 million ($0.53 per share) for the fourth quarter of 2016 and net earnings of $334 million ($0.81 per share) in the first quarter of 2016. Net earnings in all periods include the impact of special items, if any, non-operating pension expense and discontinued operations.

Diluted Net EPS Attributable to International Paper Shareholders and Adjusted Operating EPS

   

First Quarter 2017

 

Fourth Quarter 2016

 

First Quarter 2016

Net Earnings

 

$

0.50

   

$

0.53

   

$

0.81

 

Add Back – Discontinued Operations (Gain) Loss

 

   

   

0.01

 

Net Earnings (Loss) from Continuing Operations

 

0.50

   

0.53

   

0.82

 

Add Back – Non-Operating Pension Expense

 

0.05

   

0.05

   

0.07

 

Add Back – Net Special Items Expense (Income)

 

0.05

   

0.15

   

(0.09)

 

Adjusted Operating Earnings*

 

$

0.60

   

$

0.73

   

$

0.80

 

*    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 operating results.

Adjusted operating earnings in the first quarter of 2017 were $249 million ($0.60 per share) compared with $303 million ($0.73 per share) in the fourth quarter of 2016 and $330 million ($0.80 per share) in the first quarter of 2016.

Quarterly net sales were $5.5 billion in the first quarter of 2017 compared with $5.4 billion in the fourth quarter of 2016 and  $5.1 billion in the first quarter of 2016. The year-over-year revenue increase was primarily due to the pulp business that was acquired in late 2016.

Business segment operating profits in the first quarter of 2017 were $428 million, compared with $464 million in the fourth quarter of 2016 and $497 million in the first quarter of 2016.

Cash provided by operations was $633 million in the first quarter of 2017 and $620 million in the first quarter of 2016.  Free cash flow (non-GAAP) was $259 million for the first quarter of 2017 and $311 million in the first quarter of 2016.   

"International Paper delivered a solid first quarter in the face of several challenges, including the digester incident at our Pensacola mill and higher input costs driven by a significant rise in OCC prices," said Mark Sutton, Chairman and Chief Executive Officer.  "Given the market fundamentals across most of our businesses in combination with several IP commercial and operational initiatives, we expect improved results pointing to a particularly strong second half as well as positive momentum entering 2018.  I remain very confident in IP's ability to generate significant year-over-year earnings growth and continued strong cash flow in 2017."

SEGMENT INFORMATION

The performance of the Company's business segments is measured quarter to quarter without variations caused by special items, as management focuses on business segment operating profits excluding those items (non-GAAP).  The combination of IP's legacy pulp business with the acquired pulp business in 2016, will now be called Global Cellulose Fibers and reported as a separate business segment (previously reported in Printing Papers).  Prior periods have been restated to reflect this change.  First quarter 2017 business segment operating profits and business trends compared with the prior quarter are as follows:

Industrial Packaging operating profits in the first quarter of 2017 were $365 million ($360 million excluding special items) compared with $372 million ($379 million excluding special items) in the fourth quarter of 2016.  In North America, sales price increase realizations for containerboard and boxes were more than offset by seasonally lower box demand, higher OCC costs and higher mill outage expenses, along with the impact from the Pensacola mill digester incident.   

Global Cellulose Fibers operating profits in the first quarter of 2017 were a loss of $70 million (a loss of $51 million excluding special items) compared with a loss of $70 million (a loss of $32 million excluding special items) in the fourth quarter of 2016.  Results for the quarter reflect $50 million in maintenance outage expenses, which include a major energy optimization project at the Port Wentworth mill. Operations and costs were impacted by the Pensacola mill digester incident and a delayed start up at Port Wentworth following its outage.  The business is beginning to see benefits from announced price increases, along with synergies of $14 million in the quarter from the pulp business acquisition.

Printing Papers operating profits were $100 million in the first quarter of 2017 versus $121 million in the fourth quarter of 2016. Earnings in North America were impacted by higher input costs and maintenance outage expenses. Seasonally lower domestic sales volumes and an associated unfavorable mix led to lower earnings in Brazil. Operating profits in EMEA were higher due to lower maintenance outage expenses and lower operating costs, partially offset by seasonally lower sales volumes and higher wood costs in Russia.

Consumer Packaging operating profits were $33 million in the first quarter of 2017 compared with $41 million in the fourth quarter of 2016.  The earnings decrease in North America reflects modestly lower sales prices and a less favorable mix, partially offset by seasonally higher volume and lower planned maintenance outage expense.

International Paper recorded Ilim joint venture equity earnings of $50 million in the first quarter of 2017 compared with $45 million in the fourth quarter of 2016.  Operationally, sales volumes were seasonally lower, but average sales prices increased. The Company recognized a non-cash after-tax foreign exchange gain of $23 million in the first quarter of 2017 ($0.06 per share), compared with a gain of $6 million in the fourth quarter of 2016 ($0.01 per share), primarily due to Ilim's U.S. dollar denominated net debt.

CORPORATE EXPENSES

Net corporate expenses, excluding non-operating pension expense, were $11 million for the first quarter of 2017, compared with $11 million in the fourth quarter of 2016.

EFFECTIVE TAX RATE

The reported effective tax rate for the first quarter of 2017 was 34.0% compared to a 2016 fourth quarter effective tax rate of 38.6%. Excluding special items and non-operating pension expense, the effective tax rate for the first quarter of 2017 was 30.5%, compared with an effective tax rate of 29.0% in the fourth quarter of 2016.  The lower rate of 29.0% in the fourth quarter was due to the inclusion of a decrease in the Company's valuation allowance for state income taxes.

EFFECTS OF SPECIAL ITEMS

Special items in the first quarter of 2017 included a pre-tax charge of $14 million ($8 million after taxes) to amortize the inventory fair value step-up of the pulp business acquired in December 2016, pre-tax charges of $4 million ($2 million after taxes) for costs associated with the acquisition of that business, a net bargain purchase gain of $6 million (before and after taxes) on the June 2016 acquisition of the Holmen Paper newsprint mill in Madrid, Spain and a charge of $2 million (before and after taxes) for other items.  Also included in special items is a $15 million tax expense associated with an international investment restructuring.

Special items in the fourth quarter of 2016 included a pre-tax charge of $7 million ($6 million after taxes) for Restructuring and other charges for costs associated with the closure of a mill in Turkey.  Special items also included a pre-tax charge of $19 million ($14 million after taxes) for costs associated with the newly acquired pulp business, a pre-tax charge of $19 million ($11 million after taxes) to amortize the acquired pulp business inventory fair value step-up and a tax expense of $31 million associated with a tax rate change in Luxembourg.

Special items in the first quarter of 2016 included a loss of $1 million (before and after taxes) for Restructuring and other charges. Included within Restructuring and other charges were a pre-tax charge of $9 million ($6 million after taxes) related to costs associated with the conversion of the Riegelwood, North Carolina facility to 100% pulp production and a pre-tax gain of $8 million ($5 million after taxes) for the sale of our remaining investment in Arizona Chemical. Special items also included a pre-tax charge of $37 million ($34 million after taxes) for an impairment of the assets of our Asia Box business and costs associated with the sale of the business, a tax benefit of $57 million associated with the legal restructuring of our Brazil Packaging business and a tax benefit of $14 million related to the closure of a U.S. federal income tax audit.

DISCONTINUED OPERATIONS

Discontinued operations in the first quarter of 2016 included a pre-tax charge of $8 million ($5 million after taxes) for a legal settlement related to the xpedx business which was spun off in the third quarter of 2014.

EARNINGS WEBCAST

The company will host a webcast to discuss earnings and current market conditions, beginning at 10 a.m. ET (9 a.m. CT). All interested parties are invited to listen to the webcast via the company's Internet site at http://www.internationalpaper.com by clicking on the Performance/Investors tab and going to the Presentations and Events/Webcasts page. A replay of the webcast will also be on the web site beginning approximately two hours after the call. Parties who wish to participate in the webcast via teleconference may dial +1 (706) 679-8242 or, within the U.S. only, (877) 316-2541, and ask to be connected to the International Paper first-quarter earnings call. The conference ID number is 3134070.  Participants should call in no later than 9:45 a.m. ET (8:45 a.m. CT).  An audio-only replay will be available for ninety days following the call.  To access the replay, dial +1 (404) 537-3406 or, within the U.S. only, (855) 859-2056 or (800) 585-8367, and when prompted for the conference ID, enter 3134070.

ABOUT INTERNATIONAL PAPER

International Paper (NYSE: IP) is a leading global producer of renewable fiber-based packaging, pulp and paper products with manufacturing operations in North America, Latin America, Europe, North Africa, Asia and Russia.  We produce packaging products that protect and promote goods, and enable world-wide commerce; pulp for diapers, tissue and other personal hygiene products that promote health and wellness; papers that facilitate education and communication; and paper bags, cups and food containers that provide convenience and portability. We are headquartered in Memphis, Tenn., and employ approximately 55,000 colleagues located in more than 24 countries.  Net sales for 2016 were $21 billion.  For more information about International Paper, our products and global citizenship efforts, please visit internationalpaper.com.

Certain statements in this press release may be considered forward-looking statements. These statements reflect management's current views and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in these statements. Factors which could cause actual results to differ include but are not limited to: (i) the level of our indebtedness and changes in interest rates; (ii) industry conditions, including but not limited to changes in the cost or availability of raw materials, energy and transportation costs, competition we face, cyclicality and changes in consumer preferences, demand and pricing for our products; (iii) global economic conditions and political changes, including but not limited to the impairment of financial institutions, changes in currency exchange rates, credit ratings issued by recognized credit rating organizations, the amount of our future pension funding obligation, changes in tax laws and pension and health care costs; (iv) unanticipated expenditures related to the cost of compliance with existing and new environmental and other governmental regulations and to actual or potential litigation; (v) changes in our estimates for the costs and insurance coverage associated with the January 2017 incident at our Pensacola, Florida mill; (vi) whether we experience a material disruption at one of our other manufacturing facilities; (vii) risks inherent in conducting business through joint ventures; (viii) the failure to realize the expected synergies and cost-savings from our purchase of the pulp business of Weyerhaeuser Company or delay in realization thereof; and (ix) our ability to achieve the benefits we expect from all other strategic acquisitions, divestitures and restructurings. These and other factors that could cause or contribute to actual results differing materially from such forward-looking statements are discussed in greater detail in the Company's Securities and Exchange Commission filings. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

 

INTERNATIONAL PAPER COMPANY
Consolidated Statement of Operations

Preliminary and Unaudited
(In millions, except per share amounts)

                 
     

Three Months Ended
March 31,

 

Three Months

Ended
December 31,

 
     

2017

 

2016

 

2016

 
 

Net Sales

 

$   5,511

 

$    5,110

 

$               5,381

 
 

Costs and Expenses

             
 

Cost of products sold

 

3,940

(a)

3,611

 

3,807

(i)

 

Selling and administrative expenses

 

422

(b)

376

 

433

(j)

 

Depreciation, amortization and cost of timber harvested

 

345

 

284

 

328

 
 

Distribution expenses

 

379

 

320

 

349

 
 

Taxes other than payroll and income taxes

 

45

 

41

 

41

 
 

Restructuring and other charges

 

 

1

(e)

7

(k)

 

Net (gains) losses on sales and impairment of businesses

 

 

37

(f)

 
 

Net bargain purchase gain on acquisition of business

 

(6)

(c)

 

 
 

Interest expense, net

 

142

 

123

 

136

 
 

Earnings (Loss) From Continuing Operations Before Income Taxes and Equity Earnings

 

244

(a-c)

317

(e,f)

280

(i-k)

 

Income tax provision (benefit)

 

83

(d)

41

(g)

108

(l)

 

Equity earnings (loss), net of taxes

 

48

 

63

 

47

 
 

Earnings (Loss) From Continuing Operations

 

209

(a-d)

339

(e-g)

219

(i-l)

 

Discontinued operations, net of taxes

 

 

(5)

(h)

 
 

Net Earnings (Loss)

 

209

(a-d)

334

(e-h)

219

(i-l)

 

Less: Net earnings (loss) attributable to noncontrolling interests

 

 

 

1

 
 

Net Earnings (Loss) Attributable to International Paper Company

 

$      209

(a-d)

$       334

(e-h)

$                  218

(i-l)

 

Basic Earnings Per Common Share Attributable to International Paper Common Shareholders

             
 

Earnings (loss) from continuing operations

 

$     0.51

(a-d)

$      0.82

(e-g)

$                 0.53

(i-l)

 

Discontinued operations

 

 

(0.01)

(h)

 
 

Net earnings (loss)

 

$     0.51

(a-d)

$      0.81

(e-h)

$                 0.53

(i-l)

 

Diluted Earnings Per Common Share Attributable to International Paper Common Shareholders

             
 

Earnings (loss) from continuing operations

 

$     0.50

(a-d)

$      0.82

(e-g)

$                 0.53

(i-l)

 

Discontinued operations

 

 

(0.01)

(h)

 
 

Net earnings (loss)

 

$     0.50

(a-d)

$      0.81

(e-h)

$                 0.53

(i-l)

 

Average Shares of Common Stock Outstanding - Diluted

 

416.0

 

414.0

 

415.6

 
 

Cash Dividends Per Common Share

 

$0.4625

 

$  0.4400

 

$             0.4625

 
 

Amounts Attributable to International Paper Common Shareholders

             
 

Earnings (loss) from continuing operations, net of tax

 

$      209

(a-d)

$       339

(e-g)

$                  218

(i-l)

 

Discontinued operations, net of tax

 

 

(5)

(h)

 
 

Net earnings

 

$      209

(a-d)

$       334

(e-h)

$                  218

(i-l)

                 

The accompanying notes are an integral part of this consolidated statement of operations.

(a)

Includes a pre-tax charge of $14 million ($8 million after taxes) to amortize the inventory fair value step-up for the pulp business acquired in December 2016 and charges of $2 million (before and after taxes) for other costs.

(b)

Includes a pre-tax charge of $4 million ($2 million after taxes) for costs associated with the pulp business acquisition in December 2016.

(c)

Includes a net bargain purchase gain of $6 million (before and after taxes) associated with the June 2016 Holmen Paper mill acquisition in Madrid, Spain.

(d)

Includes a tax expense of $15 million for international investment restructuring.

(e)

Includes a gain of $8 million ($5 million after taxes) related to the sale of our investment in Arizona Chemical, and a pre-tax charge of $9 million ($6 million after taxes) for costs associated with the Riegelwood mill conversion to 100% pulp production.

(f)

Includes a pre-tax charge of $37 million ($34 million after taxes) for the impairment of the assets of our Asia corrugated packaging business and costs associated with the sale of that business.

(g)

Includes a tax benefit of $57 million related to the legal restructuring of our Brazil Packaging business and a tax benefit of $14 million related to the closure of a U.S. federal tax audit.

(h)

Includes a pre-tax charge of $8 million ($5 million after taxes) for a legal settlement associated with the xpedx business.

(i)

Includes a pre-tax charge of $19 million ($11 million after taxes) to amortize the inventory fair value step-up for the pulp business acquired in December 2016 and charges of $3 million (before and after taxes) for other costs associated with the acquisition.

(j)

Includes a pre-tax charge of $16 million ($11 million after taxes) for costs associated with the pulp business acquisition in December 2016.

(k)

Includes a pre-tax charge of $7 million ($6 million after taxes) for costs associated with the closure of a mill in Turkey.

(l)

Includes a tax expense of $31 million associated with a tax rate change in Luxembourg.

 

 

INTERNATIONAL PAPER COMPANY
Reconciliation of Net Earnings (Loss) Attributable to International Paper Company to Adjusted Operating Earnings

Preliminary and Unaudited
(In millions except for per share amounts)

                 
     

Three Months Ended
March 31,

 

Three Months

Ended
December 31,

 
     

2017

 

2016

 

2016

 
 

Net Earnings (Loss) Attributable to International Paper Company

 

$              209

 

$                334

 

$                218

 
 

Add back: Discontinued operations (gain) loss

 

 

5

(b)

 
 

Earnings (Loss) from Continuing Operations, including non-controlling interest

 

209

 

339

 

218

 
 

Add back: Non-operating pension expense

 

19

 

27

 

23

 
 

Add back: Special items expense (gain)

 

21

(a)

(36)

(c)

62

(d)

 

Adjusted Operating Earnings

 

$              249

 

$                330

 

$                303

 
       
     

Three Months Ended
March 31,

 

Three Months

Ended
December 31,

 
     

2017

 

2016

 

2016

 
 

Diluted Earnings per Common Share as Reported

 

$             0.50

 

$               0.81

 

$               0.53

 
 

Add back: Discontinued operations (gain) loss

 

 

0.01

 

 
 

Continuing Operations

 

0.50

 

0.82

 

0.53

 
 

Add back: Non-operating pension expense

 

0.05

 

0.07

 

0.05

 
 

Add back: Special items expense (gain)

 

0.05

 

(0.09)

 

0.15

 
 

Adjusted Operating Earnings per Share

 

$             0.60

 

$               0.80

 

$               0.73

 
                 

Notes:

             

(a)

See footnotes (a) - (d) on the Consolidated Statement of Operations

(b)

See footnote (h) on the Consolidated Statement of Operations

(c)

See footnotes (e) - (g) on the Consolidated Statement of Operations

(d)

See footnotes (i) - (l) on the Consolidated Statement of Operations

   
   
   

(1)

The Company calculates Adjusted Operating Earnings (non-GAAP) by excluding the after-tax effect of non-operating pension expense and items considered by management to be unusual from the earnings reported under U.S. generally accepted accounting principles ("GAAP"). Management uses this measure to focus on on-going operations, and believes that it is useful to investors because it enables them to perform meaningful comparisons of past and present operating results. International Paper believes that using this information, along with net earnings, provides for a more complete analysis of the results of operations by quarter. Net earnings attributable to International Paper is the most directly comparable GAAP measure.

 

INTERNATIONAL PAPER COMPANY
Sales and Earnings by Business Segment

Preliminary and Unaudited
(In millions)

 

Sales by Business Segment

             
     

Three Months Ended
March 31,

 

Three Months

Ended
December 31,

 
     

2017

 

2016

 

2016

 
 

Industrial Packaging

 

$       3,499

 

$         3,452

 

$                3,559

 
 

Global Cellulose Fibers

 

564

 

212

 

379

 
 

Printing Papers

 

995

 

972

 

1,055

 
 

Consumer Packaging

 

466

 

495

 

464

 
 

Corporate and Inter-segment Sales

 

(13)

 

(21)

 

(76)

 
 

Net Sales

 

$       5,511

 

$         5,110

 

$                5,381

 
 

Operating Profit by Business Segment

             
     

Three Months Ended
March 31,

 

Three Months Ended
December 31,

 
     

2017

 

2016

 

2016

 
 

Industrial Packaging

 

$           365

(a)

$            396

(c)

$                   372

(e)

 

Global Cellulose Fibers

 

(70)

(b)

(50)

 

(70)

(f)

 

Printing Papers

 

100

 

135

 

121

 
 

Consumer Packaging

 

33

 

16

(d)

41

 
 

Total Business Segment Operating Profit

 

$           428

 

$            497

 

$                   464

 
                 
 

Earnings (Loss) From Continuing Operations
Before Income Taxes and Equity Earnings

 

$           244

 

$            317

 

$                   280

 
 

Interest expense, net

 

142

 

123

 

136

 
 

Noncontrolling interest/equity earnings adjustment (g)

 

 

 

 
 

Corporate items, net

 

11

 

21

 

11

 
 

Special items, net

 

 

(8)

 

 
 

Non-operating pension expense

 

31

 

44

 

37

 
 

Adjusted Operating Profit

 

$           428

 

$            497

 

$                   464

 
 

Equity Earnings (Loss) in Ilim Holdings S.A., Net of Taxes

 

$             50

 

$              62

 

$                     45

 
                 
                 

(a)

Includes a gain of $6 million for the three months ended March 31, 2017 for a net bargain purchase gain associated with the June 2016 acquisition of Holmen Paper's newsprint mill in Madrid, Spain and a charge of $1 million for other items.

(b)

Includes a charge of $14 million for the amortization of the inventory fair value step-up for the pulp business acquired in December 2016, charges of $4 million for costs associated with the acquisition of that business and a charge of $1 million for other items.

(c)

Includes a charge of $37 million for the three months ended March 31, 2016 for the impairment of the assets of our corrugated packaging business in Asia and costs associated with the sale of that business.

(d)

Includes a charge of $9 million for the three months ended March 31, 2016 for costs associated with the Riegelwood mill conversion to 100% pulp production.

(e)

Includes a charge of $7 million for the three months ended December 31, 2016 for costs associated with the closure of a mill in Turkey.

(f)

Includes a charge of $19 million for the three months ended December 31, 2016 for costs associated with the  December 2016 pulp business acquisition and a charge of $19 million for the three months ended December 31, 2016 for the amortization of the newly acquired pulp business inventory fair value step-up.

(g)

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.

 

INTERNATIONAL PAPER COMPANY
Reconciliation of Operating Profit to Operating Profit Before Special Items

Preliminary and Unaudited
(In millions)

       
     

Three Months Ended March 31, 2017

     

Industrial Packaging

 

Global Cellulose Fibers

 

Printing Papers

 

Consumer Packaging

 

Total

 

Operating Profit (Loss) as Reported

 

$          365

 

$           (70)

 

$          100

 

$             33

 

$          428

 

Special Items Expense (Income) (a)

 

(5)

 

19

 

 

 

14

 

Operating Profit (Loss) Before Special Items

 

$          360

 

$           (51)

 

$          100

 

$             33

 

$          442

     
     

Three Months Ended March 31, 2016

     

Industrial Packaging

 

Global Cellulose Fibers

 

Printing Papers

 

Consumer Packaging

 

Total

 

Operating Profit (Loss) as Reported

 

$            396

 

$            (50)

 

$            135

 

$              16

 

$            497

 

Special Items Expense (Income) (b)

 

37

 

 

 

9

 

46

 

Operating Profit (Loss) Before Special Items

 

$            433

 

$            (50)

 

$            135

 

$              25

 

$            543

     
     

Three Months Ended December 31, 2016

     

Industrial Packaging

 

Global Cellulose Fibers

 

Printing Papers

 

Consumer

Packaging

 

Total

 

Operating Profit (Loss) as Reported

 

$            372

 

$            (70)

 

$            121

 

$              41

 

$            464

 

Special Items Expense (Income) (c)

 

7

 

38

 

 

 

45

 

Operating Profit (Loss) Before Special Items

 

$            379

 

$            (32)

 

$            121

 

$              41

 

$            509

                       
                       

(a)

See footnotes (a) - (b) on Sales and Earnings by Business Segment

(b)

See footnotes (c) - (d) on Sales and Earnings by Business Segment

(c)

See footnotes (e) - (f) on Sales and Earnings by Business Segment

   

(1)

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.

 

 

INTERNATIONAL PAPER COMPANY
Sales Volume by Product (a)

Preliminary and Unaudited

 

International Paper Consolidated

             
     

Three Months Ended
March 31,

 

Three Months

Ended
December 31,

 
     

2017

 

2016

 

2016

 
 

Industrial Packaging (In thousands of short tons)

             
 

Corrugated Packaging (c)

 

2,537

 

2,519

 

2,591

 
 

Containerboard

 

813

 

740

 

780

 
 

Recycling

 

950

 

928

 

977

 
 

Saturated Kraft

 

46

 

47

 

40

 
 

Gypsum /Release Kraft

 

53

 

46

 

58

 
 

Bleached Kraft

 

7

 

6

 

6

 
 

EMEA Packaging (c) (d)

 

374

 

374

 

386

 
 

Asian Box (c) (e)

 

 

103

 

 
 

Brazilian Packaging  (c)

 

86

 

77

 

117

 
 

Industrial Packaging

 

4,866

 

4,840

 

4,955

 
 

Global Cellulose Fibers (In thousands of metric tons) (b)

 

877

 

367

 

626

 
 

Printing Papers (In thousands of short tons)

             
 

U.S. Uncoated Papers

 

489

 

475

 

470

 
 

European & Russian Uncoated Papers

 

359

 

373

 

417

 
 

Brazilian Uncoated Papers

 

264

 

254

 

314

 
 

Indian Uncoated Papers

 

61

 

63

 

66

 
 

Uncoated Papers

 

1,173

 

1,165

 

1,267

 
 

Consumer Packaging (In thousands of short tons)

             
 

North American Consumer Packaging

 

291

 

308

 

274

 
 

European Coated Paperboard

 

99

 

94

 

95

 
 

Consumer Packaging

 

390

 

402

 

369

 
                 

(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. Includes sales volumes from the newly acquired pulp business beginning December 1, 2016

(c)

Volumes for corrugated box sales reflect consumed tons sold (CTS). Board sales by these businesses reflect invoiced tons.

(d)

Excludes newsprint sales volumes at Madrid, Spain mill.

             

(e)

Includes sales volumes through the date of sale on June 30, 2016.

 

 

INTERNATIONAL PAPER COMPANY
Consolidated Balance Sheet

Preliminary and Unaudited
(In millions)

   

March 31, 2017

 

December 31, 2016

Assets

       

Current Assets

       

Cash and Temporary Investments

 

$                        998

 

$                      1,033

Accounts and Notes Receivable, Net

 

3,078

 

3,001

Inventories

 

2,394

 

2,438

Other

 

251

 

198

Total Current Assets

 

6,721

 

6,670

Plants, Properties and Equipment, Net

 

14,049

 

13,990

Forestlands

 

471

 

456

Investments

 

311

 

360

Financial Assets of Special Purpose Entities

 

7,037

 

7,033

Goodwill

 

3,402

 

3,364

Deferred Charges and Other Assets

 

1,310

 

1,220

Total Assets

 

$                  33,301

 

$                    33,093

Liabilities and Equity

       

Current Liabilities

       

Notes Payable and Current Maturities of Long-Term Debt

 

$                        454

 

$                         239

Accounts Payable and Accrued Liabilities

 

3,813

 

3,830

Total Current Liabilities

 

4,267

 

4,069

Long-Term Debt

 

10,823

 

11,075

Nonrecourse Financial Liabilities of Special Purpose Entities

 

6,286

 

6,284

Deferred Income Taxes

 

3,185

 

3,127

Pension Benefit Obligation

 

3,375

 

3,400

Postretirement and Postemployment Benefit Obligation

 

325

 

330

Other Liabilities

 

446

 

449

Equity

       

Invested Capital

 

(257)

 

(477)

Retained Earnings

 

4,832

 

4,818

Total Shareholders' Equity

 

4,575

 

4,341

Noncontrolling interests

 

19

 

18

Total Equity

 

4,594

 

4,359

Total Liabilities and Equity

 

$                  33,301

 

$                    33,093

 

INTERNATIONAL PAPER COMPANY
Consolidated Statement of Cash Flows

Preliminary and Unaudited
(In millions)

   

Three Months Ended
March 31,

   

2017

 

2016

Operating Activities

       

Net earnings (loss)

 

$                 209

 

$                   334

Depreciation, amortization and cost of timber harvested

 

345

 

284

Deferred income tax expense (benefit), net

 

7

 

(37)

Restructuring and other charges

 

 

1

Net bargain purchase gain on acquisition of business

 

(6)

 

Net (gains) losses on sales and impairments of businesses

 

 

37

Ilim dividends received

 

127

 

Equity (earnings) loss, net

 

(48)

 

(63)

Periodic pension expense, net

 

78

 

91

Other, net

 

45

 

27

Changes in current assets and liabilities

       

Accounts and notes receivable

 

(57)

 

(7)

Inventories

 

(15)

 

(9)

Accounts payable and accrued liabilities

 

22

 

(26)

Interest payable

 

(18)

 

32

Other

 

(56)

 

(44)

Cash Provided By (Used For) Operating Activities

 

633

 

620

Investment Activities

       

Invested in capital projects

 

(374)

 

(309)

Proceeds from sale of fixed assets

 

1

 

8

Other

 

(27)

 

(63)

Cash Provided By (Used For) Investment Activities

 

(400)

 

(364)

Financing Activities

       

Repurchases of common stock and payments of restricted stock tax withholding

 

(46)

 

(131)

Issuance of debt

 

186

 

467

Reduction of debt

 

(227)

 

(322)

Change in book overdrafts

 

(6)

 

3

Dividends paid

 

(191)

 

(181)

Cash Provided By (Used for) Financing Activities

 

(284)

 

(164)

Cash Included in Assets Held for Sale

 

 

(12)

Effect of Exchange Rate Changes on Cash

 

16

 

25

Change in Cash and Temporary Investments

 

(35)

 

105

Cash and Temporary Investments

       

Beginning of the period

 

1,033

 

1,050

End of the period

 

$                 998

 

$                1,155

 

INTERNATIONAL PAPER COMPANY
Reconciliation of Cash Provided by Operations to Free Cash Flow

Preliminary and Unaudited
(In millions)

   
 

Three Months Ended
March 31,

 

2017

 

2016

Cash provided by (used for) Operating Activities

$

633

 

$

620

Adjustments:

     

Cash invested in capital projects

(374)

 

(309)

Free Cash Flow

$

259

 

$

311

       

(1) Free cash flow is a non-GAAP measure and the most directly comparable GAAP measure is cash provided by operations. Management believes that free cash flow is useful to investors as a liquidity measure because it measures the amount of cash generated that is available, after reinvesting in the business, to maintain a strong balance sheet, pay dividends, repurchase stock, service debt and make investments for future growth. It should not be inferred that the entire free cash flow amount is available for discretionary expenditures. By adjusting for certain items that are not indicative of the Company's ongoing performance, free cash flow also enables investors to perform meaningful comparisons between past and present periods.

 

Source: prnewswire.com

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