MEMPHIS, Tenn., Oct. 31, 2019 /PRNewswire/ -- International
Paper (NYSE: IP) today reported third quarter 2019 financial
results.
HIGHLIGHTS
- Third quarter net earnings attributable to International
Paper of $344 million ($0.87 per diluted share) compared with
$292 million ($0.73 per diluted share) in the second quarter of
2019 and $562 million ($1.37 per diluted share) in the third quarter of
2018
- Third quarter adjusted operating earnings* (non-GAAP) of
$431 million ($1.09 per diluted share) compared with
$460 million ($1.15 per diluted share) in the second quarter of
2019 and $641 million ($1.56 per diluted share) in the third quarter of
2018
- Third quarter cash provided by operations of $882 million and year-to-date of $2.7 billion compared with $2.4 billion year-to-date in the same period of
2018
- Strong operating performance and cost management
- Third quarter debt repayment of $383
million
- Third quarter share repurchases of $74 million, bringing the trailing 12 month total
to $685 million
"International Paper delivered another quarter of solid earnings
and strong cash generation," said Mark
Sutton, Chairman and Chief Executive Officer. "We continue
to demonstrate the strength and resilience of our cash engine and
our ability to perform well in a challenging global environment.
Looking ahead to the fourth quarter, we will continue to maximize
performance by optimizing our full value chain from fiber to the
customer."
|
Diluted Net EPS
Attributable to International Paper Shareholders and Adjusted
Operating EPS
|
|
|
|
Third
Quarter
2019
|
|
Second
Quarter
2019
|
|
Third
Quarter
2018
|
|
Net Earnings
|
|
$
|
0.87
|
|
$
|
0.73
|
|
$
|
1.37
|
|
Less –
Discontinued Operations (Gain) Loss
|
|
—
|
|
—
|
|
—
|
|
Net Earnings (Loss)
from Continuing Operations
|
|
0.87
|
|
0.73
|
|
1.37
|
|
Add Back –
Non-Operating Pension Expense
|
|
0.02
|
|
0.01
|
|
0.05
|
|
Add Back – Net Special
Items Expense (Income)
|
|
0.20
|
|
0.41
|
|
0.14
|
|
Adjusted Operating
Earnings*
|
|
$
|
1.09
|
|
$
|
1.15
|
|
$
|
1.56
|
|
|
|
*
|
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.
|
|
Key Financial
Measures
|
|
|
(In
millions)
|
|
Third
Quarter
2019
|
|
Second
Quarter
2019
|
|
Third
Quarter
2018
|
|
Net Sales
|
|
$
|
5,568
|
|
$
|
5,667
|
|
$
|
5,901
|
|
Net Earnings
Attributable to International Paper
|
|
344
|
|
292
|
|
562
|
|
Business Segment
Operating Profit
|
|
655
|
|
472
|
|
738
|
|
Adjusted Operating
Earnings
|
|
431
|
|
460
|
|
641
|
|
Cash Provided By
(Used For) Operations
|
|
882
|
|
1,067
|
|
941
|
|
Free Cash
Flow
|
|
597
|
|
732
|
|
584
|
SEGMENT INFORMATION
Business segment operating profits
are used by International Paper's management to measure the
earnings performance of its businesses. Third quarter 2019 business
segment net sales and operating profits compared with the second
quarter of 2019 and the third quarter of 2018 are as follows:
|
Business Segment
Results
|
|
|
(In
millions)
|
|
Third
Quarter
2019
|
|
Second
Quarter
2019
|
|
Third
Quarter
2018
|
|
Net Sales by
Business Segment
|
|
|
|
|
|
|
|
Industrial
Packaging
|
|
$
|
3,820
|
|
$
|
3,864
|
|
$
|
4,034
|
|
Global Cellulose
Fibers
|
|
624
|
|
661
|
|
714
|
|
Printing
Papers
|
|
1,071
|
|
1,088
|
|
1,102
|
|
Corporate and
Inter-segment Sales
|
|
53
|
|
54
|
|
51
|
|
Net
Sales
|
|
$
|
5,568
|
|
$
|
5,667
|
|
$
|
5,901
|
|
Operating Profit
by Business Segment
|
|
|
|
|
|
|
|
Industrial
Packaging
|
|
$
|
510
|
|
$
|
507
|
|
$
|
472
|
|
Global Cellulose
Fibers
|
|
(3)
|
|
(2)
|
|
83
|
|
Printing
Papers
|
|
148
|
|
(33)
|
|
183
|
|
Total Business
Segment Operating Profit
|
|
$
|
655
|
|
$
|
472
|
|
$
|
738
|
Industrial Packaging operating profits in the third
quarter of 2019 were $510 million
($535 million excluding special
items) compared with $507 million
($515 million excluding special
items) in the second quarter of 2019. In North America, earnings increased due to
improved demand for boxes and export containerboard, lower planned
maintenance outage expenses and lower input costs, primarily for
recycled containerboard and wood. Earnings were negatively impacted
by lower export containerboard prices and seasonally higher
manufacturing operations. In Europe, earnings improved driven by higher
average margins and favorable manufacturing operations which
benefited from continued improved performance at the Madrid, Spain mill, partially offset by
seasonally lower volumes, primarily in Morocco.
Global Cellulose Fibers operating profits in the third
quarter of 2019 were $(3) million
($4 million excluding special items)
compared with $(2) million
($0 million excluding special items)
in the second quarter of 2019. Lower planned maintenance outage
expenses and input costs, primarily for energy, chemicals and wood
were mostly offset by lower average sales prices for fluff and
market pulp and increased economic downtime.
Printing Papers operating profits in the third
quarter of 2019 were $148 million
($162 million excluding special
items) versus $(33) million
($114 million excluding special
items) in the second quarter of 2019. Earnings in both periods were
negatively affected by the net impairment of our India Papers
business, included as a special item below. In North America, earnings increased due to
improved manufacturing operations and lower planned maintenance
outage expenses. Average sales margins were slightly lower,
primarily due to an unfavorable geographic mix. In Brazil, earnings increased due to seasonally
stronger demand and a favorable geographic mix, partially offset by
unfavorable export average sales prices. In Europe and Russia, earnings increased primarily due to
lower planned maintenance outages in both regions.
EQUITY METHOD INVESTMENTS
Ilim joint
venture equity earnings were $18
million in the third quarter of 2019 compared with
$67 million in the second quarter of
2019. Operationally, earnings decreased driven by lower export
sales prices for hardwood pulp, softwood pulp and containerboard to
China and other export markets.
Sales volumes also decreased due to planned outages at the Bratsk,
Koryazhma and Ust-Ilimsk mills. The Company recognized a non-cash
after-tax foreign exchange loss of $4
million in the third quarter of 2019 ($0.01 per diluted share), compared with a gain of
$7 million in the second quarter of
2019 ($0.02 per diluted share),
primarily due to Ilim's U.S. dollar denominated net debt.
Graphic Packaging equity earnings on our 21.6% ownership
position were $10 million in the
third quarter of 2019, compared with $14
million in the second quarter of 2019.
CORPORATE EXPENSES
Corporate expenses were
$21 million for the third quarter of
2019, compared with $3 million in the
second quarter of 2019.
EFFECTIVE TAX RATE
The reported effective tax rate for
the third quarter of 2019 was 30%, which reflects the impact of
certain non-deductible special items noted below, and adjustments
to the U.S. Federal tax provision after the finalization of the
2018 tax return, compared to a 2019 second quarter reported
effective tax rate of 38%. The higher reported effective tax rate
in the second quarter reflects the impact of certain non-deductible
special items and other tax expense noted below as special
items.
Excluding special items and non-operating pension expense, the
operational effective tax rate for the third quarter of 2019 was
27%, compared with 25% for the second quarter of 2019. The higher
effective tax rate in the third quarter is primarily due to the
U.S. taxation of foreign earnings and related adjustments to the
U.S. Federal tax provision after the finalization of the 2018 tax
return.
EFFECTS OF SPECIAL ITEMS
Special items in the third
quarter of 2019 amount to a net after-tax charge of $80 million ($0.20
per diluted share) compared with $162
million ($0.41 per diluted
share) in the second quarter of 2019 and $60
million ($0.14 per diluted
share) in the third quarter of 2018. Special items in all
periods include the following charges (gains):
|
|
Third Quarter
2019
|
|
Second Quarter
2019
|
|
Third Quarter
2018
|
|
(In
millions)
|
|
Before
Tax
|
|
After
Tax
|
|
Before
Tax
|
|
After
Tax
|
|
Before
Tax
|
|
After
Tax
|
|
Restructuring
and other charges, net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Overhead cost
reduction initiative
|
|
$
|
21
|
|
$
|
16
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Total
restructuring and other charges, net
|
|
21
|
|
16
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Italian antitrust
fine
|
|
32
|
|
32
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Litigation
reserves
|
|
22
|
|
17
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Gain on sale of
previously closed Oregon mill site
|
|
(9)
|
|
(7)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Multi-employer
pension plan exit liability adjustment
|
|
(7)
|
|
(6)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
India
impairment
|
|
6
|
|
6
|
|
145
|
|
143
|
|
—
|
|
—
|
|
Environmental
remediation reserve adjustment
|
|
15
|
|
11
|
|
—
|
|
—
|
|
9
|
|
7
|
|
Brazil Packaging
impairment
|
|
—
|
|
—
|
|
—
|
|
—
|
|
122
|
|
81
|
|
Abandoned property
removal
|
|
13
|
|
10
|
|
11
|
|
8
|
|
6
|
|
4
|
|
Other
|
|
1
|
|
1
|
|
2
|
|
2
|
|
5
|
|
4
|
|
Tax benefit of Tax
Cuts and Jobs Act
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(36)
|
|
Other tax expense,
net
|
|
—
|
|
—
|
|
—
|
|
9
|
|
—
|
|
—
|
|
Total special
items, net
|
|
$
|
94
|
|
$
|
80
|
|
$
|
158
|
|
$
|
162
|
|
$
|
142
|
|
$
|
60
|
EARNINGS WEBCAST
The company will host a webcast
today 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 website at
internationalpaper.com by clicking on the Performance tab and going
to the Presentations and Events/Webcasts page. A replay of the
webcast will also be on the website 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 third quarter earnings call. The conference ID
number is 4985646. 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 4985646.
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 and Russia. We
produce corrugated 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;
and papers that facilitate education and communication. We are
headquartered in Memphis, Tenn.,
employ more than 50,000 colleagues and serve more than 25,000
customers in 150 countries. Net sales for 2018 were $23 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. Words such as "expects", "anticipates",
"believes", "estimates" and similar expressions identify
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) whether we
experience a material disruption at one of our manufacturing
facilities; (vi) risks inherent in conducting business through
joint ventures; (vii) our ability to achieve the benefits we expect
from strategic acquisitions, divestitures, restructurings and
capital investments; and (viii) other factors that can be found in
International Paper's press releases and U.S. Securities and
Exchange Commission (the "SEC") filings. 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 SEC 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
September 30,
|
|
Three Months
Ended
June 30,
|
|
Nine Months
Ended
September 30,
|
|
|
|
|
2019
|
|
2018
|
|
2019
|
|
2019
|
|
2018
|
|
|
Net
Sales
|
|
$
5,568
|
|
$
5,901
|
|
$
5,667
|
|
$
16,878
|
|
$
17,355
|
|
|
Costs and
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of products
sold
|
|
3,772
|
(a)
|
3,887
|
(g)
|
3,901
|
(a)
|
11,602
|
(a)
|
11,757
|
(g)
|
|
Selling and
administrative expenses
|
|
387
|
|
405
|
|
402
|
|
1,202
|
|
1,277
|
(m)
|
|
Depreciation,
amortization and cost of timber
harvested
|
|
327
|
(b)
|
335
|
(h)
|
321
|
(b)
|
963
|
(b)
|
990
|
(h)
|
|
Distribution
expenses
|
|
395
|
|
397
|
|
384
|
|
1,168
|
|
1,166
|
|
|
Taxes other than
payroll and income taxes
|
|
42
|
|
44
|
|
43
|
|
128
|
|
130
|
|
|
Restructuring and
other charges, net
|
|
21
|
(c)
|
—
|
|
—
|
|
21
|
(c)
|
48
|
(n)
|
|
Net (gains) losses on
sales and impairments of businesses
|
|
8
|
(d)
|
122
|
(i)
|
152
|
(d)
|
153
|
(d)
|
122
|
(i)
|
|
Antitrust
fines
|
|
32
|
(e)
|
—
|
|
—
|
|
32
|
(e)
|
—
|
|
|
Interest expense,
net
|
|
123
|
|
133
|
|
122
|
(k)
|
378
|
(k)
|
401
|
|
|
Non-operating pension
expense
|
|
9
|
|
25
|
|
8
|
|
27
|
|
65
|
|
|
Earnings (Loss)
From Continuing Operations Before Income Taxes
and Equity Earnings
|
|
452
|
|
553
|
|
334
|
|
1,204
|
|
1,399
|
|
|
Income tax provision
(benefit)
|
|
137
|
|
83
|
(j)
|
128
|
(l)
|
371
|
(l)
|
302
|
(j)
|
|
Equity earnings
(loss), net of taxes
|
|
27
|
|
92
|
|
80
|
|
221
|
|
257
|
|
|
Earnings (Loss)
From Continuing Operations
|
|
342
|
|
562
|
|
286
|
|
1,054
|
|
1,354
|
|
|
Discontinued
operations, net of taxes
|
|
—
|
|
—
|
|
—
|
|
—
|
|
345
|
(o)
|
|
Net Earnings
(Loss)
|
|
342
|
|
562
|
|
286
|
|
1,054
|
|
1,699
|
|
|
Less: Net earnings
(loss) attributable to noncontrolling interests
|
|
(2)
|
(f)
|
—
|
|
(6)
|
(f)
|
(6)
|
(f)
|
3
|
|
|
Net Earnings
(Loss) Attributable to International Paper Company
|
|
$
344
|
|
$
562
|
|
$
292
|
|
$
1,060
|
|
$
1,696
|
|
|
Basic Earnings Per
Common Share Attributable to International
Paper Common Shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) from
continuing operations
|
|
$
0.88
|
|
$
1.38
|
|
$
0.74
|
|
$
2.67
|
|
$
3.28
|
|
|
Discontinued
operations
|
|
—
|
|
—
|
|
—
|
|
—
|
|
0.84
|
|
|
Net earnings
(loss)
|
|
$
0.88
|
|
$
1.38
|
|
$
0.74
|
|
$
2.67
|
|
$
4.12
|
|
|
Diluted Earnings
Per Common Share Attributable to International
Paper Common Shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) from
continuing operations
|
|
$
0.87
|
|
$
1.37
|
|
$
0.73
|
|
$
2.65
|
|
$
3.25
|
|
|
Discontinued
operations
|
|
—
|
|
—
|
|
—
|
|
—
|
|
0.83
|
|
|
Net earnings
(loss)
|
|
$
0.87
|
|
$
1.37
|
|
$
0.73
|
|
$
2.65
|
|
$
4.08
|
|
|
Average Shares of
Common Stock Outstanding - Diluted
|
|
395.4
|
|
411.4
|
|
398.2
|
|
399.6
|
|
416.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying
notes are an integral part of this consolidated statement of
operations.
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Includes pre-tax
charges of $13 million ($10 million after taxes), $11 million ($8
million after taxes) and $35 million ($26 million after taxes) for
three months ended September 30, 2019 and June 30, 2019 and the
nine months ended September 30, 2019, respectively, for the removal
of abandoned property at our mills, pre-tax income of $7 million
($6 million after taxes) and a pre-tax charge of $9 million ($6
million after taxes) for the three months and nine months ended
September 30, 2019, respectively, for costs associated with a
multi-employer pension plan exit liability, a pre-tax gain of $9
million ($7 million after taxes) for the three months and nine
months ended September 30, 2019 for the sale of a previously closed
Oregon mill site, a pre-tax charge of $22 million ($17 million
after taxes) for the three months and nine months ended September
30, 2019 for litigation reserves and a pre-tax charge of $15
million ($11 million after taxes) for the three months and nine
months ended September 30, 2019 for an environmental remediation
reserve adjustment.
|
|
|
|
(b)
|
Includes charges of
$1 million (before and after taxes) for each of the three months
ended September 30, 2019 and June 30, 2019 and $3 million (before
and after taxes) for the nine months ended September 30, 2019 for
accelerated depreciation associated with the announced conversion
of a paper machine at our Riverdale mill to containerboard
production.
|
|
|
|
(c)
|
Includes a pre-tax
charge of $21 million ($16 million after taxes) for the three
months and nine months ended September 30, 2019 related to an
overhead cost reduction initiative.
|
|
|
|
(d)
|
Includes a loss of $2
million (before and after taxes), $95 million (before and after
taxes), and $97 million (before and after taxes) for the three
months ended September 30, 2019 and June 30, 2019 and the nine
months ended September 30, 2019, respectively, 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 $6 million (before and after taxes), a
pre-tax loss of $57 million ($55 million after taxes) and a pre-tax
loss of $63 million ($55 million after taxes) for the three months
ended September 30, 2019 and June 30, 2019 and the nine months
ended September 30, 2019, respectively, 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 nine months ended
September 30, 2019 related to the sale of a box plant in our EMEA
Packaging business.
|
|
|
|
(e)
|
Includes a charge of
$32 million (before and after taxes) for the three months and nine
months ended September 30, 2019 related to an Italian antitrust
fine.
|
|
|
|
(f)
|
Includes the
allocation of loss to noncontrolling interest of $2 million (before
and after taxes), $7 million (before and after taxes) and $9
million (before and after taxes) for the three months ended
September 30, 2019 and June 30, 2019 and the nine months ended
September 30, 2019, respectively, associated with the impairment of
the net assets of our India Papers business.
|
|
|
|
(g)
|
Includes pre-tax
charges of $6 million ($4 million after taxes) and $24 million ($18
million after taxes) for the three months and nine months ended
September 30, 2018, respectively, for the removal of abandoned
property at our mills, a pre-tax charge of $9 million ($7 million
after taxes) for the three months and nine months ended September
30, 2018 for an environmental remediation reserve adjustment and a
pre-tax charge of $9 million ($7 million after taxes) for the nine
months ended September 30, 2018 for a legal settlement.
|
|
|
|
(h)
|
Includes a pre-tax
charge of $5 million ($4 million after taxes) for the three months
and nine months ended September 30, 2018 for accelerated
depreciation associated with the announced conversion of a paper
machine at our Riverdale mill to containerboard
production.
|
|
|
|
(i)
|
Includes a pre-tax
charge of $122 million ($81 million after taxes) for the three
months and nine months ended September 30, 2018 related to the
impairment of fixed assets and an intangible asset in our Brazil
Packaging business.
|
|
|
|
(j)
|
Includes a tax
benefit of $36 million for the three months and nine months ended
September 30, 2018 related to the Tax Cuts and Jobs Act and tax
expense of $9 million for the nine months ended September 30, 2018
related to state income tax legislative changes.
|
|
|
|
(k)
|
Includes a charge of
$1 million (before and after taxes) for the three months ended June
30, 2019 and the nine months ended September 30, 2019 for interest
expense associated with foreign tax audits.
|
|
|
|
(l)
|
Includes tax expense
of $9 million for the three months ended June 30, 2019 and the nine
months ended September 30, 2019 related to a tax rate change in
Luxembourg, tax expense of $3 million for the three months ended
June 30, 2019 and the nine months ended September 30, 2019 related
to foreign tax audits and a tax benefit of $3 million for the three
months ended June 30, 2019 and the nine months ended September 30,
2019 related to state income tax legislative changes.
|
|
|
|
(m)
|
Includes a pre-tax
charge of $12 million ($9 million after taxes) for the nine months
ended September 30, 2018 associated with our proposal to acquire
Smurfit Kappa.
|
|
|
|
(n)
|
Includes pre-tax
charges of $48 million ($35 million after taxes) for the nine
months ended September 30, 2018 related to the optimization of our
EMEA Packaging business.
|
|
|
|
(o)
|
Includes pre-tax
income of $488 million ($364 million after taxes) for the nine
months ended September 30, 2018 for the gain on the transfer of the
North American Consumer Packaging business. Also includes
pre-tax charges of $25 million ($19 million after taxes) for the
nine months ended September 30, 2018 for transaction costs to
transfer the North American Consumer Packaging business.
|
|
INTERNATIONAL
PAPER COMPANY
Reconciliation of Net Earnings (Loss)
Attributable to International Paper Company to Adjusted Operating
Earnings
Preliminary and Unaudited
(In millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Three Months
Ended
June 30,
|
|
Nine Months
Ended
September 30,
|
|
|
|
|
2019
|
|
2018
|
|
2019
|
|
2019
|
|
2018
|
|
|
Net Earnings
(Loss) Attributable to International Paper Company
|
|
$
344
|
|
$
562
|
|
$
292
|
|
$
1,060
|
|
$
1,696
|
|
|
Less: Discontinued
operations (gain) loss
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(345)
|
|
|
Earnings (Loss)
from Continuing Operations, including non-controlling
interest
|
|
344
|
|
562
|
|
292
|
|
1,060
|
|
1,351
|
|
|
Add back:
Non-operating pension expense
|
|
7
|
|
19
|
|
6
|
|
21
|
|
49
|
|
|
Add back: Special
items expense (income)
|
|
80
|
|
60
|
|
162
|
|
257
|
|
134
|
|
|
Adjusted Operating
Earnings
|
|
$
431
|
|
$
641
|
|
$
460
|
$
1,338
|
|
$
1,534
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Three Months
Ended
June 30,
|
|
Nine Months
Ended
September 30,
|
|
|
|
|
2019
|
|
2018
|
|
2019
|
|
2019
|
|
2018
|
|
|
Diluted Earnings
per Common Share as Reported
|
|
$
0.87
|
|
$
1.37
|
|
$
0.73
|
|
$
2.65
|
|
$
4.08
|
|
|
Less: Discontinued
operations (gain) loss
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(0.83)
|
|
|
Continuing
Operations
|
|
0.87
|
|
1.37
|
|
0.73
|
|
2.65
|
|
3.25
|
|
|
Add back:
Non-operating pension expense
|
|
0.02
|
|
0.05
|
|
0.01
|
|
0.05
|
|
0.11
|
|
|
Add back: Special
items expense (income)
|
|
0.20
|
|
0.14
|
|
0.41
|
|
0.65
|
|
0.32
|
|
|
Adjusted Operating
Earnings per Share
|
|
$
1.09
|
|
$
1.56
|
|
$
1.15
|
|
$
3.35
|
|
$
3.68
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company
calculates Adjusted Operating Earnings (non-GAAP) by excluding the
after-tax effect of non-operating pension expense, items considered
by management to be unusual as reflected in the notes to the
Consolidated Statement of Operations and discontinued operations
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 consolidated 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.
|
|
|
|
|
|
Since diluted
earnings per share are computed independently for each period,
nine-month per share amounts may not equal the sum of respective
quarters.
|
|
|
INTERNATIONAL
PAPER COMPANY
Sales and Earnings by Business
Segment
Preliminary and Unaudited
(In millions)
|
|
|
Net Sales by
Business Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Three Months
Ended
June 30,
|
|
Nine Months
Ended
September 30,
|
|
|
|
|
2019
|
|
2018
|
|
2019
|
|
2019
|
|
2018
|
|
|
Industrial
Packaging
|
|
$
3,820
|
|
$
4,034
|
|
$
3,864
|
|
$
11,516
|
|
$
11,883
|
|
|
Global Cellulose
Fibers
|
|
624
|
|
714
|
|
661
|
|
1,974
|
|
2,083
|
|
|
Printing
Papers
|
|
1,071
|
|
1,102
|
|
1,088
|
|
3,224
|
|
3,215
|
|
|
Corporate and
Inter-segment Sales
|
|
53
|
|
51
|
|
54
|
|
164
|
|
174
|
|
|
Net
Sales
|
|
$
5,568
|
|
$
5,901
|
|
$
5,667
|
|
$
16,878
|
|
$
17,355
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Profit
by Business Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Three Months
Ended
June 30,
|
|
Nine Months
Ended
September 30,
|
|
|
|
|
2019
|
|
2018
|
|
2019
|
|
2019
|
|
2018
|
|
|
Industrial
Packaging
|
|
$
510
|
(a)
|
$
472
|
(f)
|
$
507
|
(a)
|
$
1,421
|
(a)
|
$
1,446
|
(f)
|
|
Global Cellulose
Fibers
|
|
(3)
|
(b)
|
83
|
(g)
|
(2)
|
(b)
|
27
|
(b)
|
160
|
(g)
|
|
Printing
Papers
|
|
148
|
(c)
|
183
|
(h)
|
(33)
|
(c)
|
258
|
(c)
|
341
|
(h)
|
|
Total Business
Segment Operating Profit
|
|
$
655
|
|
$
738
|
|
$
472
|
|
$
1,706
|
|
$
1,947
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (Loss)
From Continuing Operations Before Income
Taxes and Equity Earnings
|
|
$
452
|
|
$
553
|
|
$
334
|
|
$
1,204
|
|
$
1,399
|
|
|
Interest expense,
net
|
|
123
|
|
133
|
|
122
|
(j)
|
378
|
(j)
|
401
|
|
|
Noncontrolling
interest/equity earnings adjustment (k)
|
|
2
|
(d)
|
(2)
|
|
5
|
(d)
|
4
|
(d)
|
(7)
|
|
|
Corporate expenses,
net
|
|
21
|
|
20
|
|
3
|
|
45
|
|
59
|
|
|
Corporate special
items, net
|
|
48
|
(e)
|
9
|
(i)
|
—
|
|
48
|
(e)
|
30
|
(i)
|
|
Non-operating pension
expense
|
|
9
|
|
25
|
|
8
|
|
27
|
|
65
|
|
|
Adjusted Operating
Profit
|
|
$
655
|
|
$
738
|
|
$
472
|
|
$
1,706
|
|
$
1,947
|
|
|
Equity Earnings
(Loss) in Ilim S.A., Net of Taxes
|
|
$
18
|
|
$
74
|
|
$
67
|
|
$
186
|
|
$
223
|
|
|
Equity Earnings
(Loss) in Graphic Packaging International
Partners, LLC
|
|
$
10
|
|
$
19
|
|
$
14
|
|
$
37
|
|
$
36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Includes charges of
$9 million, $8 million and $25 million for the three months ended
September 30, 2019 and June 30, 2019 and the nine months ended
September 30, 2019, respectively, for the removal of abandoned
property at our mills, income of $7 million for the three months
ended September 30, 2019 and a charge of $9 million for the nine
months ended September 30, 2019 for costs associated with a
multi-employer pension plan exit liability, a gain of $9 million
for the three months and nine months ended September 30, 2019 on
the sale of a previously closed Oregon mill site, a charge of $32
million for the three months and nine months ended September 30,
2019 related to an Italian antitrust fine and a gain of $7 million
for the nine months ended September 30, 2019 related to the sale of
a box plant in our EMEA Packaging business.
|
|
|
|
(b)
|
Includes charges of
$3 million, $2 million and $8 million for the three months ended
September 30, 2019 and June 30, 2019 and the nine months ended
September 30, 2019, respectively, for the removal of abandoned
property at our mills and a charge of $4 million for the three
months and nine months ended September 30, 2019 related to an
overhead cost reduction initiative.
|
|
|
|
(c)
|
Includes a loss of $2
million, $95 million and $97 million for the three months ended
September 30, 2019 and June 30, 2019 and the nine months ended
September 30, 2019, respectively, 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 $6 million, $57 million and $63 million, partially offset
by the allocation of loss to noncontrolling interest of $2 million,
$7 million and $9 million for the three months ended September 30,
2019 and June 30, 2019 and the nine months ended September 30,
2019, respectively, for the impairment of the net assets of our
India Papers business, a charge of $1 million for each of the three
months ended September 30, 2019 and June 30, 2019 and $3 million
for the nine months ended September 30, 2019 for accelerated
depreciation associated with the announced conversion of a paper
machine at our Riverdale mill to containerboard production, a
charge of $1 million for each of the three months ended September
30, 2019 and June 30, 2019 and $2 million for the nine months ended
September 30, 2019 for the removal of abandoned property at our
mills, and a charge of $6 million for the three months and nine
months ended September 30, 2019 related to an overhead cost
reduction initiative.
|
|
|
|
(d)
|
Includes the
allocation of loss to noncontrolling interest of $2 million, $7
million and $9 million for the three months ended September 30,
2019 and June 30, 2019 and the nine months ended September 30,
2019, respectively, associated with the impairment of the net
assets of our India Papers business.
|
|
|
|
(e)
|
Includes a charge of
$22 million for the three months and nine months ended September
30, 2019 for litigation reserves, a charge of $15 million for the
three months and nine months ended September 30, 2019 for an
environmental remediation reserve adjustment, and a charge of $11
million for the three months and nine months ended September 30,
2019 related to an overhead cost reduction
initiative.
|
|
|
|
(f)
|
Includes a charge of
$122 million for the three months and nine months ended September
30, 2018 for the impairment of fixed assets and an intangible asset
in our Brazil Packaging business, charges of $48 million for the
nine months ended September 30, 2018 related to the optimization of
our EMEA Packaging business and charges of $4 million and $15
million for the three months and nine months ended September 30,
2018, respectively, for the removal of abandoned property at our
mills.
|
|
|
|
(g)
|
Includes charges of
$2 million and $9 million for the three months and nine months
ended September 30, 2018, respectively, for the removal of
abandoned property at our mills.
|
|
|
|
(h)
|
Includes a charge of
$5 million for the three months and nine months ended September 30,
2018 for accelerated depreciation associated with the announced
conversion of a paper machine at our Riverdale mill to
containerboard production.
|
|
|
|
(i)
|
Includes a charge of
$9 million for the three months and nine months ended September 30,
2018 for an environmental remediation reserve adjustment, a charge
of $12 million for the nine months ended September 30, 2018
associated with our proposal to acquire Smurfit Kappa, and a charge
of $9 million for the nine months ended September 30, 2018 for a
legal settlement.
|
|
|
|
(j)
|
Includes a charge of
$1 million for the three months ended June 30, 2019 and the nine
months ended September 30, 2019 for interest expense associated
with foreign tax audits.
|
|
|
|
(k)
|
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
September 30, 2019
|
|
|
|
Industrial
Packaging
|
|
Global
Cellulose
Fibers
|
|
Printing
Papers
|
|
Total
|
|
Operating Profit
(Loss) as Reported
|
|
$
510
|
|
$
(3)
|
|
$
148
|
|
$
655
|
|
Special Items Expense
(Income) (a)
|
|
25
|
|
7
|
|
14
|
|
46
|
|
Operating Profit
(Loss) Before Special Items
|
|
$
535
|
|
$
4
|
|
$
162
|
|
$
701
|
|
|
|
|
|
|
Three Months Ended
September 30, 2018
|
|
|
|
Industrial
Packaging
|
|
Global
Cellulose
Fibers
|
|
Printing
Papers
|
|
Total
|
|
Operating Profit
(Loss) as Reported
|
|
$
472
|
|
$
83
|
|
$
183
|
|
$
738
|
|
Special Items Expense
(Income) (b)
|
|
126
|
|
2
|
|
5
|
|
133
|
|
Operating Profit
(Loss) Before Special Items
|
|
$
598
|
|
$
85
|
|
$
188
|
|
$
871
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30, 2019
|
|
|
|
Industrial
Packaging
|
|
Global
Cellulose
Fibers
|
|
Printing
Papers
|
|
Total
|
|
Operating Profit
(Loss) as Reported
|
|
$
1,421
|
|
$
27
|
|
$
258
|
|
$
1,706
|
|
Special Items Expense
(Income) (a)
|
|
50
|
|
12
|
|
162
|
|
224
|
|
Operating Profit
(Loss) Before Special Items
|
|
$
1,471
|
|
$
39
|
|
$
420
|
|
$
1,930
|
|
|
|
|
|
|
Nine Months Ended
September 30, 2018
|
|
|
|
Industrial
Packaging
|
|
Global
Cellulose
Fibers
|
|
Printing
Papers
|
|
Total
|
|
Operating Profit
(Loss) as Reported
|
|
$
1,446
|
|
$
160
|
|
$
341
|
|
$
1,947
|
|
Special Items Expense
(Income) (b)
|
|
185
|
|
9
|
|
5
|
|
199
|
|
Operating Profit
(Loss) Before Special Items
|
|
$
1,631
|
|
$
169
|
|
$
346
|
|
$
2,146
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
See footnotes (a) -
(c) on Sales and Earnings by Business Segment
|
|
(b)
|
See footnotes (f) -
(h) 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.
|
|
INTERNATIONAL
PAPER COMPANY
Sales Volume by Product (a)
Preliminary and
Unaudited
|
|
International
Paper Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Three Months
Ended
June 30,
|
|
Nine Months
Ended
September 30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2019
|
|
2018
|
|
Industrial Packaging
(In thousands of short tons)
|
|
|
|
|
|
|
|
|
|
|
Corrugated Packaging
(b)
|
2,651
|
|
2,666
|
|
2,624
|
|
7,810
|
|
7,969
|
|
Containerboard
|
736
|
|
853
|
|
707
|
|
2,140
|
|
2,436
|
|
Recycling
|
556
|
|
566
|
|
625
|
|
1,790
|
|
1,700
|
|
Saturated
Kraft
|
47
|
|
51
|
|
52
|
|
140
|
|
149
|
|
Gypsum /Release
Kraft
|
49
|
|
56
|
|
49
|
|
149
|
|
176
|
|
Bleached
Kraft
|
5
|
|
8
|
|
5
|
|
17
|
|
24
|
|
EMEA Packaging
(b)
|
375
|
|
329
|
|
379
|
|
1,124
|
|
1,113
|
|
Brazilian
Packaging (b)
|
96
|
|
92
|
|
91
|
|
272
|
|
263
|
|
European Coated
Paperboard
|
106
|
|
98
|
|
102
|
|
312
|
|
284
|
|
Industrial
Packaging
|
4,621
|
|
4,719
|
|
4,634
|
|
13,754
|
|
14,114
|
|
Global Cellulose
Fibers (In thousands of metric tons) (c)
|
878
|
|
886
|
|
869
|
|
2,606
|
|
2,665
|
|
Printing Papers (In
thousands of short tons)
|
|
|
|
|
|
|
|
|
|
|
U.S. Uncoated
Papers
|
451
|
|
461
|
|
441
|
|
1,340
|
|
1,415
|
|
European &
Russian Uncoated Papers
|
352
|
|
363
|
|
367
|
|
1,073
|
|
1,066
|
|
Brazilian Uncoated
Papers
|
301
|
|
293
|
|
283
|
|
828
|
|
818
|
|
Indian Uncoated
Papers
|
49
|
|
62
|
|
66
|
|
183
|
|
195
|
|
Printing
Papers
|
1,153
|
|
1,179
|
|
1,157
|
|
3,424
|
|
3,494
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Sales volumes include
third party and inter-segment sales and exclude sales of equity
investees.
|
|
(b)
|
Volumes for
corrugated box sales reflect consumed tons sold (CTS). Board sales
by these businesses reflect invoiced tons.
|
|
(c)
|
Includes North
American, European and Brazilian volumes and internal sales to
mills.
|
|
|
|
|
INTERNATIONAL
PAPER COMPANY
Consolidated Balance
Sheet
Preliminary and Unaudited
(In millions)
|
|
|
|
September 30,
2019
|
|
December 31,
2018
|
|
Assets
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
Cash and Temporary
Investments
|
|
$
697
|
|
$
589
|
|
Accounts and Notes
Receivable, Net
|
|
3,305
|
|
3,521
|
|
Contract
Assets
|
|
388
|
|
395
|
|
Inventories
|
|
2,194
|
|
2,241
|
|
Assets Held for
Sale
|
|
278
|
|
—
|
|
Other
|
|
189
|
|
250
|
|
Total Current
Assets
|
|
7,051
|
|
6,996
|
|
Plants, Properties
and Equipment, Net
|
|
12,845
|
|
13,067
|
|
Forestlands
|
|
378
|
|
402
|
|
Investments
|
|
1,651
|
|
1,648
|
|
Financial Assets of
Variable Interest Entities
|
|
7,084
|
|
7,070
|
|
Goodwill
|
|
3,412
|
|
3,374
|
|
Right of Use
Assets
|
|
425
|
|
—
|
|
Deferred Charges and
Other Assets
|
|
1,002
|
|
1,019
|
|
Total
Assets
|
|
$
33,848
|
|
$
33,576
|
|
Liabilities and
Equity
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
Notes Payable and
Current Maturities of Long-Term Debt
|
|
$
402
|
|
$
639
|
|
Accounts Payable and
Other Current Liabilities
|
|
4,079
|
|
4,055
|
|
Liabilities Held for
Sale
|
|
248
|
|
—
|
|
Total Current
Liabilities
|
|
4,729
|
|
4,694
|
|
Long-Term
Debt
|
|
9,957
|
|
10,015
|
|
Nonrecourse Financial
Liabilities of Variable Interest Entities
|
|
6,303
|
|
6,298
|
|
Deferred Income
Taxes
|
|
2,643
|
|
2,600
|
|
Pension Benefit
Obligation
|
|
1,653
|
|
1,762
|
|
Postretirement and
Postemployment Benefit Obligation
|
|
248
|
|
264
|
|
Long-Term Lease
Obligations
|
|
292
|
|
—
|
|
Other
Liabilities
|
|
567
|
|
560
|
|
Equity
|
|
|
|
|
|
Invested Capital, Net
of Treasury Stock
|
|
(1,006)
|
|
(103)
|
|
Retained
Earnings
|
|
8,447
|
|
7,465
|
|
Total International
Paper Shareholders' Equity
|
|
7,441
|
|
7,362
|
|
Noncontrolling
interests
|
|
15
|
|
21
|
|
Total
Equity
|
|
7,456
|
|
7,383
|
|
Total Liabilities
and Equity
|
|
$
33,848
|
|
$
33,576
|
|
INTERNATIONAL
PAPER COMPANY
Consolidated Statement of Cash
Flows
Preliminary and Unaudited
(In millions)
|
|
|
|
Nine Months Ended
September 30,
|
|
|
2019
|
|
2018
|
|
Operating
Activities
|
|
|
|
|
|
Net earnings
(loss)
|
|
$
1,054
|
|
$
1,699
|
|
Depreciation,
amortization and cost of timber harvested
|
|
963
|
|
990
|
|
Deferred income tax
expense (benefit), net
|
|
68
|
|
163
|
|
Restructuring and
other charges, net
|
|
21
|
|
48
|
|
Net gain on transfer
of North American Consumer Packaging business
|
|
—
|
|
(488)
|
|
Net (gains) losses on
sales and impairments of businesses
|
|
153
|
|
122
|
|
Antitrust
fines
|
|
32
|
|
—
|
|
Equity method
dividends received
|
|
260
|
|
130
|
|
Equity (earnings)
losses, net
|
|
(221)
|
|
(257)
|
|
Periodic pension
expense, net
|
|
70
|
|
172
|
|
Other, net
|
|
106
|
|
75
|
|
Changes in current
assets and liabilities
|
|
|
|
|
|
Accounts and notes
receivable
|
|
168
|
|
(441)
|
|
Contract
assets
|
|
6
|
|
(20)
|
|
Inventories
|
|
(9)
|
|
(120)
|
|
Accounts payable and
accrued liabilities
|
|
(11)
|
|
301
|
|
Interest
payable
|
|
(31)
|
|
(33)
|
|
Other
|
|
53
|
|
64
|
|
Cash Provided By
(Used For) Operating Activities
|
|
2,682
|
|
2,405
|
|
Investment
Activities
|
|
|
|
|
|
Invested in capital
projects
|
|
(913)
|
|
(1,286)
|
|
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
|
|
15
|
|
12
|
|
Other
|
|
(14)
|
|
4
|
|
Cash Provided By
(Used For) Investment Activities
|
|
(994)
|
|
(1,310)
|
|
Financing
Activities
|
|
|
|
|
|
Repurchases of common
stock and payments of restricted stock tax withholding
|
|
(535)
|
|
(532)
|
|
Issuance of
debt
|
|
381
|
|
349
|
|
Reduction of
debt
|
|
(772)
|
|
(242)
|
|
Change in book
overdrafts
|
|
(29)
|
|
(33)
|
|
Dividends
paid
|
|
(595)
|
|
(588)
|
|
Other
|
|
3
|
|
—
|
|
Cash Provided By
(Used for) Financing Activities
|
|
(1,547)
|
|
(1,046)
|
|
Cash Included in
Assets Held for Sale
|
|
(19)
|
|
—
|
|
Effect of Exchange
Rate Changes on Cash
|
|
(14)
|
|
(41)
|
|
Change in Cash and
Temporary Investments
|
|
108
|
|
8
|
|
Cash and Temporary
Investments
|
|
|
|
|
|
Beginning of the
period
|
|
589
|
|
1,018
|
|
End of the
period
|
|
$
697
|
|
$
1,026
|
|
INTERNATIONAL
PAPER COMPANY
Reconciliation of Cash Provided by
Operations to Free Cash Flow
Preliminary and Unaudited
(In millions)
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
Cash Provided By
(Used For) Operating Activities
|
$
882
|
|
$
941
|
|
$
2,682
|
|
$
2,405
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Cash invested
in capital projects
|
(285)
|
|
(357)
|
|
(913)
|
|
(1,286)
|
|
Free Cash
Flow
|
$
597
|
|
$
584
|
|
$
1,769
|
|
$
1,119
|
|
|
|
|
|
|
|
|
|
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.
|
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SOURCE International Paper