International Paper Reports Fourth-Quarter and 2012 Earnings
International Paper Reports Fourth-Quarter and 2012 Earnings
Record Cash Generation from Operations
Temple-Inland Acquisition Delivering Results
PR Newswire
MEMPHIS, Tenn., Jan. 29, 2013
MEMPHIS, Tenn., Jan. 29, 2013 /PRNewswire/ -- International Paper (NYSE: IP)
reported preliminary full-year 2012 net earnings attributable to common
shareholders totaling $794 million ($1.80 per share) compared with $1.3
billion ($3.03 per share) in full-year 2011. In the fourth quarter of 2012,
the company reported net earnings of $235 million ($0.53 per share) compared
with $281 million ($0.65 per share) in the fourth quarter of 2011. Amounts in
all periods include special items and non-operating pension expense.
(Logo: http://photos.prnewswire.com/prnh/20020701/IPLOGO )
Diluted Earnings Per Share Attributable to International Paper Shareholders
Fourth Fourth Full Full
Quarter Quarter Year Year
2012 2011 2012 2011
Net Earnings $0.53 $0.65 $1.80 $3.03
Less – Discontinued Operations Gain (0.02) - (0.10) (0.11)
Net Earnings from Continuing $0.51 $0.65 $1.70 $2.92
Operations
Add Back – Net Special Items Expense 0.11 0.07 0.69 0.14
Add Back – Non-Operating Pension 0.07 0.01 0.26 0.06
Expense
Operating Earnings* $0.69 $0.73 $2.65 $3.12
* Operating Earnings is defined as net earnings from continuing operations
(GAAP) excluding special items and non-operating pension expense.
Full-year 2012 Operating Earnings were $1.2 billion ($2.65 per share) compared
with $1.4 billion ($3.12 per share) in 2011. Operating Earnings in the fourth
quarter of 2012 totaled $305 million ($0.69 per share) compared with $319
million ($0.73 per share) in the fourth quarter of 2011.
Annual sales totaled $27.8 billion in 2012 compared with $26.0 billion in
2011. Quarterly net sales were $7.1 billion in the fourth quarter compared
with $6.4 billion in the fourth quarter of 2011.
Full-year 2012 business segment operating profits were $2.0 billion compared
with $2.2 billion in 2011. Business segment operating profits in the fourth
quarter were $528 million compared with $577 million in 2011, both of which
included special items.
"Our success capturing merger benefits from the Temple-Inland acquisition
contributed to our fourth quarter results and IP's record cash generation from
operations in 2012," said John Faraci, Chairman and Chief Executive Officer.
"Given our runway levers and ability to execute, we are positioned to deliver
a step-change in earnings as we move through 2013."
SEGMENT INFORMATION
The performance of the company's business segments are measured quarter to
quarter without variations caused by special items, as management focuses on
business segment operating profits excluding those items. Fourth quarter 2012
business segment operating profits and business trends compared with the prior
quarter are as follows:
Industrial Packaging operating profits in the fourth quarter of 2012 were $368
million ($336 million including special items) compared with $342 million
($255 million including special items) in the third quarter of 2012. The
profit increase in North America was the result of improved pricing, partially
offset by higher planned outage-related maintenance expenses and input costs.
Profits for the segment also benefited from seasonally higher sales volumes in
Europe and an insurance settlement related to the earthquake that occurred in
Northern Italy.
Printing Papers operating profits were $147 million (before and after special
items) in the fourth quarter of 2012 versus $201 million ($202 million
including special items) in the third quarter of 2012. North American
operations were impacted by higher planned outage-related maintenance
expenses, seasonally lower sales and lower average sales price for paper,
particularly in export markets. Europe's results were stronger quarter over
quarter mainly from lower planned maintenance expenses.
Consumer Packaging operating profits were $39 million ($41 million including
special items) in the fourth quarter of 2012 compared with $67 million (before
and after special items) in the third quarter of 2012. Earnings were impacted
by higher outage-related maintenance expenses and lower average sales price
primarily due to mix, along with cost associated with the start-up of the
coated paper machine in China.
xpedx, the company's North American distribution business, reported operating
profits of $11 million ($4 million including special items) in the fourth
quarter of 2012 compared with $24 million ($15 million including special
items) in the third quarter of 2012, reflecting higher operating expenses in
the fourth quarter.
International Paper recorded Ilim joint venture equity earnings of $8 million
in the fourth quarter of 2012, compared with equity earnings of $33 million in
the third quarter of 2012. Fourth quarter results were lower as modestly
higher average prices did not offset increases in input costs. In addition,
the after-tax impact of favorable foreign exchange gains was $15 million less
in the fourth quarter compared with the third quarter. The gains in both
quarters were due to non-cash adjustments associated with the Ilim joint
venture's U.S. dollar denominated debt.
Net corporate expenses, excluding non-operating pension expense, for the 2012
fourth quarter were $15 million compared with $1 million in the third quarter
of 2012 and $20 million in the fourth quarter of 2011.
Effective Tax Rate
The effective tax rate before special items for the fourth quarter of 2012 was
22 percent, compared with an effective tax rate before special items of 31
percent in the third quarter of 2012. The lower rate in the 4th quarter is
attributable to the release of a $29 million valuation allowance previously
imposed on state income tax attributes which the Company now foresees
utilizing. The 2012 full year rate was 29 percent compared with 32 percent
for the 2011 full year.
Effects of Special Items
Special items in the fourth quarter of 2012 included pre-tax charges of $21
million ($14 million after taxes) for restructuring and other charges, pre-tax
charges of $28 million ($19 million after taxes) for integration costs related
to the Temple-Inland acquisition, and a gain of $3 million (before and after
taxes) for other items. Also included are a net tax expense of $14 million
related to internal restructurings and a tax expense of $5 million to adjust
deferred tax assets related to post-retirement prescription drug coverage
(Medicare Part D reimbursements). Restructuring and other charges included
pre-tax charges of $9 million ($6 million after taxes) for debt extinguishment
costs, pre-tax charges of $7 million ($4 million after taxes) for costs
associated with the restructuring of our xpedx operations, and pre-tax charges
of $5 million ($4 million after taxes) for other items.
Special items in the third quarter of 2012 included pre-tax charges of $33
million ($24 million after taxes) for restructuring and other charges, pre-tax
charges of $58 million ($34 million after taxes) for integration costs related
to the Temple-Inland acquisition, and pre-tax charges of $19 million ($49
million after taxes) for costs associated with the divestiture of three
containerboard mills. Restructuring and other charges included pre-tax charges
of $13 million ($8 million after taxes) for debt extinguishment costs, pre-tax
charges of $8 million ($4 million after taxes) for costs associated with the
restructuring of our xpedx operations, pre-tax charges of $16 million ($11
million after taxes) for costs associated with the restructuring of our
Packaging business in Europe, and a net pre-tax gain of $4 million (a charge
of $1 million after taxes) for other items.
Special items in the fourth quarter of 2011 included a pre-tax charge of $18
million ($13 million after taxes) for restructuring and other charges, a
pre-tax gain of $4 million ($3 million after taxes) for an adjustment to the
loss on the sale of our Shorewood business, a net tax expense of $22 million
and charges of $6 million ($5 million after taxes) for other items.
Restructuring and other charges included a pre-tax charge of $14 million ($11
million after taxes) for costs associated with the restructuring of our xpedx
operations, pre-tax charges of $12 million ($7 million after taxes) for costs
associated with the signing of an agreement to acquire Temple-Inland, and net
pre-tax gains of $8 million ($5 million after taxes) for other items. The net
tax expense of $22 million included a $24 million expense related to internal
restructurings, a $9 million expense for costs associated with our acquisition
of a majority interest in Andhra Pradesh Paper Mills Limited, a $13 million
benefit related to the release of a deferred tax asset valuation allowance,
and $2 million of expense for other items. In addition, a gain of $6 million
(before and after taxes) was recorded for interest associated with a tax
claim.
Discontinued Operations
Discontinued operations in both the fourth and third quarters of 2012 included
the Operating Earnings of Temple-Inland's Building Products business. Also
included are pre-tax charges of $13 million ($8 million after taxes) and $2
million ($1 million after taxes) in the fourth quarter of 2012 and the third
quarter of 2012, respectively, for expenses associated with pursuing the
divestiture of this business.
EARNINGS WEBCAST
The company will hold a webcast to review earnings at 9:00 a.m. EST / 8:00
a.m. CST today. All interested parties are invited to listen to the webcast
live and view the slides to be presented at the webcast via the company's
Internet site at http://www.internationalpaper.com by clicking on the
Investors tab and going to the presentations page. A replay of the webcast
will also be available beginning approximately two hours after the call.
Parties in the U.S. who wish to participate in the webcast via teleconference
may dial (877) 316-2541. Those outside the U.S. should dial +1 (706) 679-8242
and ask to be connected to the International Paper fourth-quarter and 2012
earnings call. The conference ID number is 82052223. Participants should call
in no later than 8:45 a.m. EST/7:45 a.m. CST. An audio-only replay will be
available for four weeks following the call. To access the replay, dial +1
(404) 537-3406 or, within the U.S. only, (855) 859-2056, and when prompted for
the conference ID, enter 82052223.
International Paper (NYSE: IP) is a global leader in packaging and paper with
manufacturing operations in North America, Europe, Latin America, Russia, Asia
and North Africa. Its businesses include industrial and consumer packaging and
uncoated papers, complemented by xpedx, the company's North American
distribution company. Headquartered in Memphis, Tenn., the company employs
approximately 68,000 people and is strategically located in more than 24
countries serving customers worldwide. International Paper net sales for 2012
were $28 billion. For more information about International Paper, its
products and stewardship efforts, 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 increases 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 a joint
venture; (vii) the failure to realize synergies and cost savings from the
Temple-Inland transaction or delay in realization thereof; and (viii) 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 Three Months Twelve Months Ended
Ended
December 31, September 30, December 31,
2012 2011 2012 2012 2011
Net Sales $ $ $ $ $
7,075 6,367 7,026 27,833 26,034
Costs and
Expenses
Cost of 5,193 4,662 (e) 5,140 (j) 20,587 (n) 18,960 (r)
products sold
Selling and
administrative 578 (a) 441 527 (k) 2,092 (o) 1,887
expenses
Depreciation,
amortization 375 321 383 1,486 1,332
and cost of
timber
harvested
Distribution 413 337 403 1,611 1,390
expenses
Taxes other
than payroll 42 35 39 166 146
and income
taxes
Restructuring 21 (b) 18 (f) 33 (l) 109 (p) 102 (s)
and other
charges
Net (gains)
losses on
sales and (3) (c) (1) (g) 18 (m) 86 (q) 218 (t)
impairments of
businesses
Interest 169 138 (h) 163 672 541 (h)
expense, net
Earnings From
Continuing
Operations
Before Income
Taxes and
Equity 287 (a-c) 416 (e-h) 320 (j-m) 1,024 (n-q) 1,458 (h,r-t)
Earnings
Income tax
(benefit) 74 (d) 154 (i) 130 331 (d) 311 (u)
provision
Equity
earnings 9 23 34 61 140
(loss), net of
taxes
Earnings From (d, (h,
Continuing 222 (a-d) 285 (e-i) 224 (j-m) 754 n-q) 1,287 r-u)
Operations
Discontinued
operations, 10 - 14 45 49
net of taxes
Net Earnings $ (a-d) $ (e-i) $ (j-m) $ (d, $ (h,
232 285 238 799 n-q) 1,336 r-u)
Less: Net
earnings
(loss)
attributable (3) 4 1 5 14 (v)
to
noncontrolling
interests
Net Earnings
Attributable $ $ $ $ (d, $ (h,
to 235 (a-d) 281 (e-i) 237 (j-m) 794 n-q) 1,322 r-v)
International
Paper Company
Basic Earnings
Per Common
Share
Attributable
to
International
Paper Common
Shareholders
Earnings
from $ (a-d) $ (e-i) $ (j-m) $ (d, $ (h,
continuing 0.52 0.65 0.51 1.72 n-q) 2.95 r-v)
operations
Discontinued 0.02 - 0.03 0.10 0.11
operations
Net earnings $ (a-d) $ (e-i) $ (j-m) $ (d, $ (h,
0.54 0.65 0.54 1.82 n-q) 3.06 r-v)
Diluted
Earnings Per
Common Share
Attributable
to
International
Paper Common
Shareholders
Earnings
from $ (a-d) $ (e-i) $ (j-m) $ (d, $ (h,
continuing 0.51 0.65 0.51 1.70 n-q) 2.92 r-v)
operations
Discontinued 0.02 - 0.03 0.10 0.11
operations
Net $ (a-d) $ (e-i) $ (j-m) $ (d, $ (h,
earnings 0.53 0.65 0.54 1.80 n-q) 3.03 r-v)
Average Shares
of Common
Stock 441.5 436.3 439.8 440.2 437.0
Outstanding -
Diluted
Cash Dividends $ $ $ $ $
Per Common 0.3000 0.2625 0.2625 1.0875 0.9750
Share
Amounts
Attributable
to
International
Paper Common
Shareholders
Earnings
from $ $ $ $ (d, $ (h,
continuing 225 (a-d) 281 (e-i) 223 (j-m) 749 n-q) 1,273 r-v)
operations,
net of tax
Discontinued
operations, 10 - 14 45 49
net of tax
Net $ (a-d) $ (e-i) $ (j-m) $ (d, $ (h,
Earnings 235 281 237 794 n-q) 1,322 r-v)
The accompanying notes are an integral part of this consolidated statement of operations.
(a) Includes a pre-tax charge of $28 million ($19 million after taxes) for integration
costs associated with the acquisition of Temple-Inland.
(b) Includes a pre-tax charge of $9 million ($6 million after taxes) for debt
extinguishment costs, a pre-tax charge of $7 million ($4 million after taxes) for costs
associated with the restructuring of our xpedx operations, and pre-tax charges of $5
million ($4 million after taxes) for other items.
(c) Includes a gain of $2 million (before and after taxes) for proceeds associated with the
2010 sale of the Arizona Chemical business, a gain of $2 million (before and after taxes)
for the sale of the Company's Shorewood operations, and a charge of $1 million (before and
after taxes) for costs associated with the containerboard mill divestitures.
(d) Includes a net expense of $14 million related to internal restructurings and a $5
million expense to adjust deferred tax assets related to post-retirement prescription drug
coverage (Medicare Part D reimbursements).
(e) Includes a pre-tax charge of $3 million ($2 million after taxes) for an inventory
write-off related to the xpedx reorganization.
(f) Includes a pre-tax charge of $14 million ($11 million after taxes) for severance and
other costs associated with the restructuring of the Company's xpedx operations, a pre-tax
charge of $12 million ($7 million after taxes) for costs associated with the signing of an
agreement to acquire Temple-Inland, a gain of $4 million (before and after taxes) for the
reversal of a reserve related to an asset exchange in Brazil in 2007, and net pre-tax gains
of $4 million ($1 million after taxes) for other items.
(g) Includes a pre-tax gain of $4 million ($3 million after taxes) for an adjustment to the
previously recorded loss to reduce the carrying value of the Company's Shorewood business
and a charge of $3 million (before and after taxes) for asset impairment charges at our
Inverurie, Scotland mill which was closed in 2009.
(h) Includes a gain of $6 million (before and after taxes) for interest associated with a
tax claim.
(i) Includes $24 million of expense related to internal restructurings, $9 million of
expense for costs associated with our acquisition of a majority interest in Andhra Pradesh
Paper Mills Limited, $13 million of benefit related to the release of a deferred tax asset
valuation allowance, and $2 million of expense for other items.
(j) Includes a charge of $1 million (before and after taxes) for an inventory
write-off related to the xpedx reorganization.
(k) Includes a pre-tax charge of $58 million ($34 million after taxes) for integration
costs associated with the acquisition of Temple-Inland.
(l) Includes a pre-tax charge of $13 million ($8 million after taxes) for debt
extinguishment costs, a pre-tax charge of $8 million ($4 million after taxes) for costs
associated with the restructuring of our xpedx operations, a pre-tax charge of $16 million
($11 million after taxes) for costs associated with the restructuring of the Company's
Packaging business in Europe, and a pre-tax gain of $4 million (a loss of $1 million after
taxes) for other items.
(m) Includes a pre-tax charge of $19 million ($49 million after taxes) for costs associated
with the containerboard mill divestitures and a gain of $1 million (before and after taxes)
for other items.
(n) Includes a pre-tax charge of $20 million ($12 million after taxes) related to the
write-up of the Temple-Inland inventories to fair value and a charge of $5 million (before
and after taxes) for an inventory write-off related to the xpedx reorganization.
(o) Includes a pre-tax charge of $164 million ($108 million after taxes) for integration
costs associated with the acquisition of Temple-Inland.
(p) Includes a pre-tax charge of $48 million ($30 million after taxes) for debt
extinguishment costs, a pre-tax charge of $44 million ($28 million after taxes) for costs
associated with the restructuring of our xpedx operations, a pre-tax charge of $17 million
($12 million after taxes) for costs associated with the restructuring of the Company's
Packaging business in Europe, and net pre-tax charges of $0 million ($4 million after taxes)
for other items.
(q) Includes a pre-tax charge of $62 million ($38 million after taxes) to adjust the
long-lived assets of the Hueneme mill in Oxnard, California to their fair value in
anticipation of its divestiture, a pre-tax charge of $29 million ($55 million after taxes)
for costs associated with the containerboard mill divestitures, a gain of $2 million (before
and after taxes) for proceeds associated with the 2010 sale of the Arizona Chemical
business, a gain of $2 million (before and after taxes) for the sale of the Company's
Shorewood operations, and a pre-tax gain of $1 million ($2 million after taxes) for other
items.
(r) Includes a pre-tax charge of $27 million ($17 million after taxes) for an environmental
reserve related to the Company's property in Cass Lake, Minnesota and a pre-tax charge of $3
million ($2 million after taxes) for an inventory write-off related to the reorganization of
the Company's xpedx business.
(s) Includes a pre-tax charge of $49 million ($34 million after taxes) for severance and
other costs associated with the restructuring of the Company's xpedx operations, a pre-tax
charge of $32 million ($19 million after taxes) for early debt extinguishment costs, a
pre-tax charge of $16 million ($10 million after taxes) for costs associated with the
acquisition of a majority share of Andhra Pradesh Paper Mills Limited in India, a pre-tax
charge of $20 million ($12 million after taxes) for costs associated with signing an
agreement to acquire Temple-Inland, a pre-tax charge of $6 million ($4 million after taxes)
for costs associated with the sale of the Company's Shorewood operations, a pre-tax gain of
$21 million ($13 million after taxes) related to the reversal of environmental reserves due
to the announced repurposing of a portion of the Franklin mill, a gain of $4 million (before
and after taxes) for the reversal of a reserve related to an asset exchange in Brazil in
2007, and a charge of $4 million (before and after taxes) for other items.
(t) Includes a pre-tax charge of $129 million ($104 million after taxes) for a fixed-asset
impairment of the North American Shorewood business, a pre-tax charge of $78 million (a gain
of $143 million after taxes) to reduce the carrying value of the Shorewood business based on
the terms of the definitive agreement to sell this business, and a charge of $11 million
(before and after taxes) for asset impairment costs associated with the Inverurie, Scotland
mill which was closed in 2009.
(u) Includes $222 million of benefit related to the reduction of the carrying value of the
Shorewood business and the write-off of a deferred tax liability associated with Shorewood,
$24 million of expense related to internal restructurings, $9 million of expense for costs
associated with our acquisition of a majority interest in Andhra Pradesh Paper Mills
Limited, $13 million of benefit related to the release of a deferred tax asset valuation
allowance, and $2 million of expense for other items.
(v) Includes noncontrolling interest income of $8 million (before and after taxes)
associated with the fixed asset impairment of Shorewood Mexico.
International Paper Company
Reconciliation of Operating Earnings to Net Earnings
Attributable to International Paper Company
Preliminary and Unaudited
(In millions except for per share amounts)
Three Months Ended Three Months Twelve Months
Ended Ended
December 31, September 30, December 31,
2012 2011 2012 2012 2011
Operating Earnings $ $ $ $ $
305 319 358 1,167 1,365
Non-Operating Pension (31) (7) (28) (113) (29)
Restructuring and (33) (15) (59) (199) (85)
other charges
Net gains/(losses) on
sales/impairments of 3 - (48) (87) 36
businesses
Interest income - 6 - 6
Income tax (19) (22) - (19) (27)
adjustments
Bargain purchase
price adjustment - - - - 7
recorded in equity
earnings
Earnings from 225 281 223 749 1,273
Continuing Operations
Discontinued 10 - 14 45 49
operations
Net Earnings as $ $ $ $ $
Reported 235 281 237 794 1,322
Three Months Ended Three Months Twelve Months
Ended Ended
December 31, September 30, December 31,
Diluted Earnings per 2012 2011 2012 2012 2011
Common Share
Operating Earnings $ $ $ $ $
Per Share 0.69 0.73 0.81 2.65 3.12
Non-Operating Pension (0.07) (0.01) (0.06) (0.26) (0.06)
Restructuring and (0.08) (0.03) (0.13) (0.45) (0.19)
other charges
Net gains/(losses) on
sales/impairments of 0.01 - (0.11) (0.20) 0.08
businesses
Interest income - 0.01 - 0.01
Income tax (0.04) (0.05) - (0.04) (0.06)
adjustments
Bargain purchase
price adjustment - - - - 0.02
recorded in equity
earnings
Diluted Earnings Per
Common Share from
Continuing 0.51 0.65 0.51 1.70 2.92
Operations
Discontinued 0.02 - 0.03 0.10 0.11
operations
Diluted Earnings per $ $ $ $ $
Common Share as 0.53 0.65 0.54 1.80 3.03
Reported
Notes:
(1) The Company calculates Operating Earnings 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 is the most directly comparable GAAP measure.
(2) Since diluted earnings per share are computed independently for each
period, twelve-month per share amounts may not equal the sum of the respective
quarters.
International Paper
Sales and Earnings by Industry Segment
Preliminary and Unaudited
(In Millions)
Sales by
Industry Segment
Three Months Three Twelve Months
Months
Ended Ended Ended
December 31, September December 31,
30,
2012 2011 2012 2012 2011
Industrial $ 3,380 $ 2,510 $ 3,335 $ 13,280 $ 10,430
Packaging
Printing Papers 1,580 1,550 1,580 6,230 6,215
Consumer 815 905 765 3,170 3,710
Packaging
Distribution 1,530 1,625 1,535 6,040 6,630
Corporate and
Inter-segment (230) (223) (189) (887) (951)
Sales
Net Sales $ 7,075 $ 6,367 $ 7,026 $ 27,833 $ 26,034
Operating Profit
by Industry
Segment
Three Months Three Twelve Months
Months
Ended Ended Ended
December 31, September December 31,
30,
2012 2011 2012 2012 2011
Industrial $ 336 (1) $ 306 (5) $ 255 (1) $ 1,066 (1) $ 1,147 (5)
Packaging
Printing Papers 147 189 (6) 202 (2) 599 (2) 872 (6)
Consumer 41 (3) 66 (7) 67 268 (3) 163 (7)
Packaging
Distribution 4 (4) 16 (8) 15 (4) 22 (4) 34 (8)
Operating 528 577 539 1,955 2,216
Profit
Interest (169) (138) (9) (163) (672) (541) (9)
expense, net
Noncontrolling
interest/equity (8) 4 - - 10
earnings
adjustment (10)
Corporate (15) (20) (1) (51) (102)
items, net
Restructuring
and other (11) 4 (15) (51) (82)
charges
Net gains
(losses) on
sales and 2 - - 2 -
impairments of
businesses
Non-operating (40) (11) (40) (159) (43)
pension expense
Earnings From
Continuing
Operations
Before Income
Taxes and $ 287 $ 416 $ 320 $ 1,024 $ 1,458
Equity Earnings
Equity Earnings
in Ilim
Holdings S.A.,
Net of Taxes $ 8 $ 25 $ 33 $ 56 $ 134
Includes charges of $28 million for the three months ended December 31, 2012, $58
million for the three months ended September 30, 2012 and $164 million for the
twelve months ended December 31, 2012 for integration costs associated with the
Temple-Inland acquisition, charges of $1 million for the three months ended
December 31, 2012, $19 million for the three months ended September 30, 2012 and
$29 million for the twelve months ended December 31, 2012 for costs associated with
the divestiture of three containerboard mills, charges of $1 million for the three
(1) months ended December 31, 2012, $16 million for the three months ended September
30, 2012, and $17 million for the twelve months ended December 31, 2012 for costs
associated with the restructuring of our Packaging business in Europe, a charge of
$62 million for the twelve months ended December 31, 2012 to adjust the value of
the long-lived assets of the Hueneme mill in Oxnard, California to their fair
value, a charge of $20 million for the twelve months ended December 31, 2012
related to the write-up of the Temple-Inland inventory to fair value and a gain of
$3 million for the twelve months ended December 31, 2012 for other items.
Includes a gain of $1 million for the three months ended September 30, 2012, and a
(2) net gain of $0 million for the twelve months ended December 31, 2012 related to the
acquisition of Andhra Pradesh Paper Mills Limited.
Includes a gain of $2 million and a gain of $3 million for the three months and
(3) twelve months ended December 31, 2012, respectively, for adjustments related to the
sale of the Shorewood business.
Includes charges of $7 million for the three months ended December 31, 2012, $9
(4) million for the three months ended September 30, 2012, and $49 million for the
twelve months ended December 31, 2012 for costs associated with the restructuring
of the Company's xpedx operation.
Includes charges of $12 million for the three months ended December 31, 2011 and
$20 million for the twelve months ended December 31, 2011 for costs associated with
signing an agreement to acquire Temple-Inland, a gain of $2 million for the three
(5) months and twelve months ended December 31, 2011 for an adjustment to the Albany
mill shutdown reserve, a gain of $7 million for the twelve months ended December
31, 2011 for a bargain purchase price adjustment on an acquisition by our joint
venture in Turkey, and costs of $2 million for the twelve months ended December 31,
2011 for additional closure costs for the Etienne mill in France.
Includes gains of $2 million for the three months ended December 31, 2011 and $24
million for the twelve months ended December 31, 2011 related to the repurposing of
(6) the Franklin mill, and charges of $3 million and $11 million for the three months
and twelve months ended December 31, 2011, respectively, for asset impairment costs
associated with the Inverurie mill.
Includes a gain of $4 million for the three months ended December 31, 2011, and a
charge of $78 million for the twelve months ended December 31, 2011 to reduce the
carrying value of the Shorewood business to fair market value, a charge of $129
million for the twelve months ended December 31, 2011 for a fixed asset impairment
(7) for the North American Shorewood business, an $8 million gain for the twelve months
ended December 31, 2011 for noncontrolling interest related to the fixed asset
impairment at Shorewood Mexico, and a charge of $2 million for the twelve months
ended December 31, 2011 for costs associated with the reorganization of the
Company's Shorewood operations.
Includes charges of $17 million for the three months ended December 31, 2011, and
(8) $52 million for the twelve months ended December 31, 2011 associated with the
restructuring of the Company's xpedx operations.
(9) Includes a gain of $6 million for the three months and twelve months ended December
31, 2011 for interest associated with a tax claim.
Operating profits for industry segments include each segment's percentage share of
the profits of subsidiaries included in that segment that are less than wholly
(10) 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
(In millions)
Three Months Ended December 31, 2012
Industrial Printing Consumer
Packaging Papers Packaging Distribution Total
Operating Profit $ $ $
Before Special $ 368 $ 147 39 11 565
Items
Restructuring and (31) - - (7) (38)
other charges
Net gains (losses)
on sales and (1) - 2 - 1
impairments of
businesses
Operating Profit as $ 336 $ 147 $ $ $
Reported 41 4 528
Three Months Ended December 31, 2011
Industrial Printing Consumer
Packaging Papers Packaging Distribution Total
Operating Profit $ $ $
Before Special $ 316 $ 190 62 33 601
Items
Restructuring and (10) 2 - (17) (25)
other charges
Net gains (losses)
on sales and - (3) 4 - 1
impairments of
businesses
Operating Profit as $ 306 $ 189 $ $ $
Reported 66 16 577
Three Months Ended September 30, 2012
Industrial Printing Consumer
Packaging Papers Packaging Distribution Total
Operating Profit $ $ $
Before Special $ 342 $ 201 67 24 634
Items
Restructuring and (69) 1 - (9) (77)
other charges
Net gains (losses)
on sales and (18) - - - (18)
impairments of
businesses
Operating Profit as $ 255 $ 202 $ $ $
Reported 67 15 539
Twelve Months Ended December 31, 2012
Industrial Printing Consumer
Packaging Papers Packaging Distribution Total
Operating Profit $ $ $
Before Special $ 1,355 $ 599 265 71 2,290
Items
Restructuring and (198) - - (49) (247)
other charges
Net gains (losses)
on sales and (91) - 3 - (88)
impairments of
businesses
Operating Profit as $ 1,066 $ 599 $ $ $
Reported 268 22 1,955
Twelve Months Ended December 31, 2011
Industrial Printing Consumer
Packaging Papers Packaging Distribution Total
Operating Profit $ $ $
Before Special $ 1,160 $ 859 364 86 2,469
Items
Restructuring and (20) 24 (2) (52) (50)
other charges
Net gains (losses)
on sales and - (11) (199) - (210)
impairments of
businesses
Bargain purchase
price adjustment 7 - - - 7
recorded in equity
earnings
Operating Profit as $ 1,147 $ 872 $ $ $
Reported 163 34 2,216
(1) The Company calculates Operating Profit Before Special Items 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 is the most directly comparable GAAP measure.
(2) The Company has substantially completed its land sales and earnings for
future land sales are expected to be insignificant. Beginning in 2011, Forest
Products is no longer reported as a separate industry segment.
International Paper
Sales Volume by Product (1)
Preliminary and Unaudited
International Paper
Consolidated
Three Months Three Twelve Months
Months
Ended Ended Ended
December 31, September December 31,
30,
2012 2011 2012 2012 2011
Industrial Packaging (In
thousands of short tons)
Corrugated Packaging (2) 2,602 1,806 2,665 10,523 7,424
Containerboard (2) 828 582 823 3,228 2,371
Recycling 595 575 620 2,349 2,435
Saturated Kraft 36 39 47 166 161
Gypsum/Release Kraft 38 - 37 127 -
Bleached Kraft 29 20 30 114 95
European Industrial 262 264 244 1,032 1,047
Packaging
Asian Box 103 107 108 410 444
Industrial Packaging 4,493 3,393 4,574 17,949 13,977
Printing Papers (In thousands of
short tons)
U.S. Uncoated Papers 627 641 668 2,617 2,616
European & Russian Uncoated 338 311 326 1,286 1,218
Papers
Brazilian Uncoated Papers 306 315 290 1,165 1,141
Indian Uncoated Papers (3) 61 49 59 246 49
Uncoated Papers 1,332 1,316 1,343 5,314 5,024
Market Pulp (4) 438 358 414 1,593 1,410
Consumer Packaging (In thousands
of short tons)
North American Consumer 368 352 378 1,507 1,560
Packaging
European Coated Paperboard 94 88 93 372 332
Asian Coated Paperboard 340 261 242 1,059 998
Consumer Packaging 802 701 713 2,938 2,890
(1) Sales volumes include third party and inter-segment sales and exclude
sales of equity investees.
(2) Includes Temple-Inland volumes from date of acquisition in February 2012.
(3) Includes APPM volumes from date of acquisition in October 2011.
(4) Includes North American, European and Brazilian volumes and internal sales
to mills.
INTERNATIONAL PAPER COMPANY
Consolidated Balance Sheet
Preliminary and Unaudited
(In Millions)
December 31, December 31,
2012 2011
Assets
Current Assets
Cash and Temporary Investments $ 1,302 $ 3,994
Accounts and Notes Receivable, Net 3,562 3,486
Inventories 2,730 2,320
Deferred Income Tax Assets 323 296
Assets held for sale 759 196
Other 229 164
Total Current Assets 8,905 10,456
Plants, Properties and Equipment, Net 13,949 11,817
Forestlands 622 660
Investments 887 657
Financial Assets of Special Purpose 2,108 -
Entities
Goodwill 4,315 2,346
Deferred Charges and Other Assets 1,367 1,082
Total Assets $ 32,153 $ 27,018
Liabilities and Equity
Current Liabilities
Notes Payable and Current
Maturities
of Long-Term Debt $ 444 $ 719
Liabilities held for sale 44 43
Accounts Payable and Accrued 4,510 3,976
Liabilities
Total Current Liabilities 4,998 4,738
Long-Term Debt 9,696 9,189
Nonrecourse Financial Liabilities of 2,036 -
Special Purpose Entities
Deferred Income Taxes 3,026 2,497
Pension Benefit Obligation 4,115 2,375
Postretirement and Postemployment 466 476
Benefit Obligation
Other Liabilities 1,180 758
Equity
Invested Capital 2,642 3,290
Retained Earnings 3,662 3,355
Total Shareholders' Equity 6,304 6,645
Noncontrolling interests 332 340
Total Equity 6,636 6,985
Total Liabilities and Equity $ 32,153 $ 27,018
INTERNATIONAL PAPER COMPANY
Consolidated Statement of Cash Flows
Preliminary and Unaudited
(In Millions)
Twelve Months Ended
December 31,
2012 2011
Operating Activities
Net earnings $ 794 $ 1,322
Discontinued operations, net of taxes and noncontrolling (40) (35)
interests
Earnings from continuing operations $ 754 $ 1,287
Depreciation, amortization and cost of timber harvested 1,486 1,332
Deferred income tax expense (benefit), net 211 317
Restructuring and other charges 109 102
Pension plan contribution (44) (300)
Net losses on sales and impairments of businesses 86 218
Equity (earnings) loss, net (61) (140)
Periodic pension expense, net 342 195
Other, net (7) 169
Changes in current assets and liabilities
Accounts and notes receivable 377 (128)
Inventories (28) (56)
Accounts payable and accrued liabilities (273) (389)
Interest payable 30 6
Other (22) 62
Cash provided by operations - Continuing Operations 2,960 2,675
Cash used for operations - Discontinued Operations 7 -
Cash Provided by Operations 2,967 2,675
Investment Activities
Invested in capital projects - continuing operations (1,383) (1,159)
Acquisitions, net of cash acquired (3,734) (379)
Proceeds from divestitures 474 50
Equity investment in Ilim (45) -
Escrow arrangement - (25)
Other (80) 26
Cash used for investment activities - Continuing (4,768) (1,487)
Operations
Cash used for investment activities - Discontinued (90) -
Operations
Cash Used for Investment Activities (4,858) (1,487)
Financing Activities
Repurchases of common stock and payments of restricted (35) (30)
stock tax withholding
Issuance of common stock 108 -
Issuance of debt 2,132 1,766
Reduction of debt (2,488) (517)
Change in book overdrafts 11 (29)
Dividends paid (476) (427)
Other (47) (21)
Cash Provided by (Used for) Financing Activities (795) 742
Effect of Exchange Rate Changes on Cash (6) (9)
Change in Cash and Temporary Investments (2,692) 1,921
Cash and Temporary Investments
Beginning of the period 3,994 2,073
End of the period $ 1,302 $ 3,994
SOURCE International Paper
Website: http://www.internationalpaper.com
Contact: Media, Thomas J. Ryan, +1-901-419-4333, or Investors, Glenn Landau,
+1-901-419-1731, or Michele Vargas, +1-901-419-7287
Sponsored Links
Advertisement
Advertisements
Sponsored Links
Advertisement
Rate this Page