International Paper Reports Third Quarter 2022 Results
International Paper reported its third quarter 2022 results, revealing net earnings of $951 million ($2.64 per diluted share), marking an increase from $511 million in Q2 2022. Adjusted operating earnings were $364 million ($1.01 per diluted share), down from $459 million in the previous quarter. The revenue grew 10% year-over-year due to strong price realization, with cash operations at $435 million. Despite macroeconomic challenges and higher costs, the company returned $434 million to shareholders. CEO Mark Sutton highlighted ongoing demand stabilization and a focus on cost reduction initiatives.
- Net earnings increased to $951 million from $511 million in Q2 2022.
- 10% year-over-year revenue growth attributed to strong price realization.
- $70 million of earnings from 'Building a Better IP' initiatives, totaling $175 million year-to-date.
- $434 million returned to shareholders through repurchases and dividends, $1.6 billion year-to-date.
- Adjusted operating earnings declined to $364 million from $459 million in Q2 2022.
- Lower demand for packaging due to reduced consumer spending and retail inventory destocking.
- Significantly higher energy and distribution costs affecting overall profitability.
MEMPHIS, Tenn., Oct. 27, 2022 /PRNewswire/ -- International Paper (NYSE: IP) today reported third quarter 2022 financial results.
THIRD QUARTER 2022 HIGHLIGHTS
- Third quarter net earnings (loss) attributable to International Paper of
$951 million ($2.64 per diluted share) compared with$511 million ($1.38 per diluted share) in the second quarter of 2022 and$864 million ($2.20 per diluted share) in the third quarter of 2021. Third quarter 2022 net earnings include a net after-tax benefit of$563 million ($1.56 per diluted share) related to the settlement of the previously announced timber monetization restructuring tax matter. Third quarter 2021 net earnings include a net after-tax gain of$350 million ($0.89 per diluted share) on the sale of our Kwidzyn, Poland mill. - Third quarter adjusted operating earnings* (non-GAAP) of
$364 million ($1.01 per diluted share) compared with$459 million ($1.24 per diluted share) in the second quarter of 2022 and$431 million ($1.10 per diluted share) in the third quarter of 2021. 10% year-over-year revenue growth based on strong price realization$70 million of earnings achieved from Building a Better IP initiatives, bringing year-to-date to$175 million - Cash provided by operations of
$435 million , bringing year-to-date to$1.4 billion - Returned
$434 million to shareholders through share repurchases of$269 million and dividends of$165 million , bringing year-to-date to$1.6 billion
"Our third quarter earnings were significantly impacted by the challenging macro environment," said Mark Sutton, Chairman and Chief Executive Officer. "Lower consumer spending for goods and retail inventory destocking drove lower demand for packaging, and we also experienced significantly higher energy and distribution costs. As we enter the fourth quarter, we see packaging demand stabilizing at these lower levels and input costs providing some relief; however, we also expect seasonally higher operating costs. And for the year, we expect to exceed our
Sutton added, "Looking ahead, while there is considerable geopolitical and macroeconomic uncertainty ahead of us, I am confident in our ability to navigate through various environments. We have a great team and a large system of mills and box plants that enables us to take care of our customers while optimizing our operations to reduce high marginal costs. We will also continue to invest in attractive cost reduction projects and accelerate our improvement initiatives to create value."
Diluted Net EPS Attributable to International Paper Shareholders and Adjusted Operating EPS | ||||||
Third | Second | Third | ||||
Net Earnings (Loss) Attributable to International Paper | $ 2.64 | $ 1.38 | $ 2.20 | |||
Less – Discontinued Operations (Gain) Loss | — | — | (1.10) | |||
Net Earnings (Loss) from Continuing Operations | 2.64 | 1.38 | 1.10 | |||
Add Back – Non-Operating Pension Expense (Income) | (0.13) | (0.13) | (0.12) | |||
Add Back – Net Special Items Expense (Income) | 0.32 | 0.05 | 0.12 | |||
Income Tax Effect - Non-Operating Pension and Net Special Items Expense | (1.82) | (0.06) | — | |||
Adjusted Operating Earnings* | $ 1.01 | $ 1.24 | $ 1.10 | |||
* | Adjusted operating earnings (non-GAAP) is defined as net earnings attributable to International Paper Company (GAAP) excluding discontinued operations, net special items and non-operating pension expense (income). 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 discontinued operations, net special items and non-operating pension expense (income), see the disclosure under Effects of Net Special Items, Discontinued Operations and Consolidated Statement of Operations and related notes included later in this release. | |||||
Select Financial Measures | ||||||
(In millions) | Third | Second | Third | |||
Net Sales | $ 5,402 | $ 5,389 | $ 4,914 | |||
Net Earnings (Loss) Attributable to International Paper | 951 | 511 | 864 | |||
Business Segment Operating Profit | 464 | 585 | 490 | |||
Adjusted Operating Earnings | 364 | 459 | 431 | |||
Cash Provided By (Used For) Operations | 435 | 390 | 645 | |||
Free Cash Flow* | 197 | 204 | 519 | |||
* | Free cash flow is a non-GAAP financial measure. A reconciliation of free cash flow to the most comparable GAAP measure, cash provided by (used for) operations, and disclosure regarding why we believe that free cash flow provides useful information to investors, is included later in this release. | |||||
SEGMENT INFORMATION
Business segment operating profits are used by International Paper's management to measure the earnings performance of its businesses and is calculated as set forth in footnote (g) below under "Sales and Earnings by Business Segment". As a result of the spin-off of our global Printing Papers business on October 1, 2021, the Printing Papers business segment has been eliminated and all prior year amounts have been adjusted to reflect this business as a discontinued operation. For discussion of discontinued operations, see the disclosure under Discontinued Operations included later in this release. Third quarter 2022 net sales by business segment and operating profit (loss) by business segment compared with the second quarter of 2022 and the third quarter of 2021 are as follows:
Business Segment Results | ||||||
(In millions) | Third | Second | Third | |||
Net Sales by Business Segment | ||||||
Industrial Packaging | $ 4,385 | $ 4,491 | $ 4,111 | |||
Global Cellulose Fibers | 887 | 788 | 740 | |||
Corporate and Inter-segment Sales | 130 | 110 | 63 | |||
Net Sales | $ 5,402 | $ 5,389 | $ 4,914 | |||
Operating Profit (Loss) by Business Segment | ||||||
Industrial Packaging | $ 369 | $ 560 | $ 414 | |||
Global Cellulose Fibers | 95 | 25 | 76 | |||
Total Business Segment Operating Profit | $ 464 | $ 585 | $ 490 | |||
Industrial Packaging operating profits (losses) in the third quarter of 2022 were
Global Cellulose Fibers operating profits (losses) in the third quarter of 2022 were
EQUITY METHOD INVESTMENTS
Ilim joint venture equity earnings (losses) were
CORPORATE EXPENSES
Corporate expenses were
EFFECTIVE TAX RATE
The reported effective tax rate for the third quarter of 2022 was (184)%, compared to a 2022 second quarter reported effective tax rate of
Excluding special items and non-operating pension expense, the operational effective tax rate for the third quarter of 2022 was
EFFECTS OF SPECIAL ITEMS
Net special items in the third quarter of 2022 amount to a net after-tax gain of
Third Quarter 2022 | Second Quarter 2022 | Third Quarter 2021 | ||||||||||
(In millions) | Before Tax | After Tax | Before Tax | After Tax | Before Tax | After Tax | ||||||
Restructuring and other charges, net: | ||||||||||||
Debt extinguishment costs | $ 93 | $ 70 | $ — | $ — | $ 35 | $ 26 | ||||||
Other | — | — | — | — | 4 | 3 | ||||||
Total restructuring and other charges, net | 93 | 70 | — | — | 39 | 29 | ||||||
Environmental remediation reserve adjustment | — | — | 15 | 11 | 5 | 4 | ||||||
Sylvamo investment (a) | (16) | (12) | (3) | (2) | — | — | ||||||
Legal settlement | (15) | (11) | — | — | — | — | ||||||
Tax benefit related to timber monetization settlement, net of interest (b) | 55 | (563) | — | — | — | — | ||||||
Tax benefit related to exchange of Sylvamo shares (c) | — | (35) | — | (31) | — | — | ||||||
Other | — | — | 6 | 5 | 5 | 4 | ||||||
Total special items, net | $ 117 | $ (551) | $ 18 | $ (17) | $ 49 | $ 37 | ||||||
(a) | See note (c) on the Consolidated Statement of Operations included later in this release. |
(b) | See notes (d) and (e) on the Consolidated Statement of Operations included later in this release. |
(c) | See note (e) on the Consolidated Statement of Operations included later in this release. |
DISCONTINUED OPERATIONS
Discontinued operations include the operating earnings of our former Printing Papers segment and EMEA Coated Paperboard and Pulp business including the Kwidzyn, Poland mill, divested in the third quarter of 2021. Discontinued operations also includes the following special items charges (gains):
Third Quarter 2021 | ||||
(In millions) | Before Tax | After Tax | ||
Printing Papers spin-off | 52 | 47 | ||
Foreign value-added tax credit (including interest) | 15 | 10 | ||
Gain on sale of Kwidzyn, Poland mill | (360) | (350) | ||
Gain on sale of La Mirada, CA distribution center | (86) | (65) | ||
Foreign and state taxes related to Printing Papers spin-off | — | 27 | ||
Total | $ (379) | $ (331) | ||
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 and Presentations 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 (234) 720-6995 or, within the U.S. only, (844) 291-6362, and ask to be connected to the International Paper third quarter earnings call. The conference ID number is 1238959. 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 (402) 970-0847 or, within the U.S. only, (866) 207-1041 and when prompted for the access code, enter 5558024.
About International Paper
International Paper (NYSE: IP) is a leading global supplier of renewable fiber-based products. We produce corrugated packaging products that protect and promote goods, and enable worldwide commerce, and pulp for diapers, tissue and other personal care products that promote health and wellness. Headquartered in Memphis, Tenn., we employ approximately 38,000 colleagues globally. We serve customers worldwide, with manufacturing operations in North America, Latin America, North Africa and Europe. Net sales for 2021 were
Certain statements in this press release that are not historical in nature may be considered "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "expects," "anticipates," "believes," "estimates" and similar expressions identify forward-looking statements. These statements are not guarantees of future performance and 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) risks with respect to climate change and global, regional, and local weather conditions, as well as risks related to our ability to meet targets and goals with respect to climate change and the emission of GHGs and other environmental, social and governance matters; (ii) the impact of the conflict involving Russia and Ukraine, including in connection with related escalated sanctions imposed by the United States, the European Union, G7 and other countries and possible actions by the Russian government, and the impact of such developments on domestic and global economic and geopolitical conditions in general and on us and our Ilim joint venture, which could be materially and adversely affected by such developments, and our inability to predict the full impact of the Russian invasion of Ukraine, current or future sanctions, geopolitical instability and the possibility of broadened military conflict on our Ilim joint venture and on our receipt of dividends from our Ilim joint venture; (iii) the level of our indebtedness and changes in interest rates; (iv) the impact of global and domestic economic conditions and industry conditions, including with respect to commercial activity, inflationary pressures and changes in the cost or availability of raw materials, energy sources and transportation sources, supply chain shortages and disruptions, the availability of labor, particularly in light of current labor market conditions which are exceptionally tight, competition we face, cyclicality and changes in consumer preferences, demand and pricing for our products, and conditions impacting the credit, capital and financial markets; (v) domestic and global geopolitical conditions, changes in currency exchange rates, trade protectionist policies, downgrades in our credit ratings, and/or the credit ratings of banks issuing certain letters of credit, issued by recognized credit rating organizations; (vi) the amount of our future pension funding obligations, and pension and healthcare costs; (vii) unanticipated expenditures or other adverse developments related to compliance with existing and new environmental, tax, labor and employment, privacy, anti-bribery and anti-corruption, and other U.S. and non-U.S. governmental laws and regulations; (viii) any material disruption at any of our manufacturing facilities or other adverse impact on our operations due to severe weather, natural disasters, climate change or other causes; (ix) risks inherent in conducting business through joint ventures; (x) our ability to achieve the benefits expected from, and other risks associated with, acquisitions, joint ventures, divestitures, spinoffs and other corporate transactions, (xi) cybersecurity and information technology risks; (xii) loss contingencies and pending, threatened or future litigation, including with respect to environmental related matters; (xiii) our exposure to claims under our agreements with Sylvamo Corporation; (xiv) our failure to realize the anticipated benefits of the spin-off of Sylvamo Corporation and the qualification of such spin-off as a tax-free transaction for U.S. federal income tax purposes; and (xv) our ability to attract and retain qualified personnel. These and other factors that could cause or contribute to actual results differing materially from such forward-looking statements can be found in our press releases and SEC filings. In addition, other risks and uncertainties not presently known to the Company or that we currently believe to be immaterial could affect the accuracy of any forward-looking statements. The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.
INTERNATIONAL PAPER COMPANY | |||||||||||
Three Months Ended | Three Months Ended | Nine Months Ended | |||||||||
2022 | 2021 | 2022 | 2022 | 2021 | |||||||
Net Sales | $ 5,402 | $ 4,914 | $ 5,389 | $ 16,028 | $ 14,277 | ||||||
Costs and Expenses | |||||||||||
Cost of products sold | 3,830 | (a) | 3,423 | (f) | 3,806 | (a) | 11,475 | (a) | 10,173 | (f) | |
Selling and administrative expenses | 337 | 343 | (g) | 300 | 978 | 1,041 | (g) | ||||
Depreciation, amortization and cost of timber harvested | 261 | 280 | 267 | 789 | 820 | ||||||
Distribution expenses | 471 | 365 | 442 | 1,337 | 1,042 | ||||||
Taxes other than payroll and income taxes | 38 | 35 | 36 | 110 | 106 | ||||||
Restructuring and other charges, net | 93 | (b) | 39 | (h) | — | 93 | (b) | 243 | (h) | ||
Net (gains) losses on sales and impairments of businesses | — | — | — | — | (7) | (i) | |||||
Net (gains) losses on sales of equity method investments | — | — | — | — | (204) | (j) | |||||
Net (gains) losses on mark to market investments | (16) | (c) | — | (3) | (c) | (65) | (c) | — | |||
Interest expense, net | 123 | (d) | 82 | 74 | 266 | (d) | 261 | ||||
Non-operating pension expense (income) | (48) | (50) | (47) | (144) | (153) | ||||||
Earnings (Loss) From Continuing Operations Before Income Taxes and Equity Earnings | 313 | 397 | 514 | 1,189 | 955 | ||||||
Income tax provision (benefit) | (575) | (e) | 59 | 96 | (e) | (384) | (e) | 193 | |||
Equity earnings (loss), net of taxes | 63 | 94 | 93 | 249 | 247 | ||||||
Earnings (Loss) From Continuing Operations | 951 | 432 | 511 | 1,822 | 1,009 | ||||||
Discontinued operations, net of taxes | — | 432 | (k) | — | — | 638 | (k) | ||||
Net Earnings (Loss) | 951 | 864 | 511 | 1,822 | 1,647 | ||||||
Less: Net earnings (loss) attributable to noncontrolling interests | — | — | — | — | 2 | (l) | |||||
Net Earnings (Loss) Attributable to International Paper Company | $ 951 | $ 864 | $ 511 | $ 1,822 | $ 1,645 | ||||||
Basic Earnings Per Common Share Attributable to International Paper Common Shareholders | |||||||||||
Earnings (loss) from continuing operations | $ 2.66 | $ 1.11 | $ 1.39 | $ 4.97 | $ 2.58 | ||||||
Discontinued operations | — | 1.11 | — | — | 1.63 | ||||||
Net earnings (loss) | $ 2.66 | $ 2.22 | $ 1.39 | $ 4.97 | $ 4.21 | ||||||
Diluted Earnings Per Common Share Attributable to International Paper Common Shareholders | |||||||||||
Earnings (loss) from continuing operations | $ 2.64 | $ 1.10 | $ 1.38 | $ 4.92 | $ 2.55 | ||||||
Discontinued operations | — | 1.10 | — | — | 1.61 | ||||||
Net earnings (loss) | $ 2.64 | $ 2.20 | $ 1.38 | $ 4.92 | $ 4.16 | ||||||
Average Shares of Common Stock Outstanding - Diluted | 360.4 | 392.6 | 370.7 | 370.7 | 395.3 | ||||||
The accompanying notes are an integral part of this consolidated statement of operations. | |||||||||||
(a) | Includes pre-tax income of | ||||||||||
(b) | Includes a pre-tax charge of | ||||||||||
(c) | Includes pre-tax net gains of | ||||||||||
(d) | Includes a pre-tax charge of | ||||||||||
(e) | Includes a tax benefit of | ||||||||||
(f) | Includes pre-tax charges of | ||||||||||
(g) | Includes pre-tax charges of | ||||||||||
(h) | Includes pre-tax charges of | ||||||||||
(i) | Includes a net pre-tax gain of | ||||||||||
(j) | Includes a pre-tax gain of | ||||||||||
(k) | Includes a net pre-tax gain of | ||||||||||
(l) | Includes the allocation of income to noncontrolling interest of | ||||||||||
INTERNATIONAL PAPER COMPANY | ||||||||||
Three Months Ended | Three Months Ended | Nine Months Ended | ||||||||
2022 | 2021 | 2022 | 2022 | 2021 | ||||||
Net Earnings (Loss) Attributable to International Paper Company | $ 951 | $ 864 | $ 511 | $ 1,822 | $ 1,645 | |||||
Less: Discontinued operations (gain) loss | — | (432) | — | — | (638) | |||||
Earnings (Loss) from Continuing Operations Attributable to International Paper Company | 951 | 432 | 511 | 1,822 | 1,007 | |||||
Add back: Non-operating pension expense (income) | (48) | (50) | (47) | (144) | (153) | |||||
Add back: Net special items expense (income) | 117 | 49 | 18 | 89 | 76 | |||||
Income tax effect - Non-operating pension and net special items expense | (656) | — | (23) | (656) | 24 | |||||
Adjusted Operating Earnings | $ 364 | $ 431 | $ 459 | $ 1,111 | $ 954 | |||||
Three Months Ended | Three Months Ended | Nine Months Ended | ||||||||
2022 | 2021 | 2022 | 2022 | 2021 | ||||||
Diluted Earnings per Common Share as Reported | $ 2.64 | $ 2.20 | $ 1.38 | $ 4.92 | $ 4.16 | |||||
Less: Discontinued operations (gain) loss | — | (1.10) | — | — | (1.61) | |||||
Continuing Operations | 2.64 | 1.10 | 1.38 | 4.92 | 2.55 | |||||
Add back: Non-operating pension expense (income) | (0.13) | (0.12) | (0.13) | (0.39) | (0.39) | |||||
Add back: Net special items expense (income) | 0.32 | 0.12 | 0.05 | 0.24 | 0.19 | |||||
Income tax effect per share - Non-operating pension and net special items expense | (1.82) | — | (0.06) | (1.77) | 0.06 | |||||
Adjusted Operating Earnings per Share | $ 1.01 | $ 1.10 | $ 1.24 | $ 3.00 | $ 2.41 | |||||
Notes: | ||||||||||
The Company calculates Adjusted Operating Earnings (non-GAAP) by excluding the after-tax effect of discontinued operations, non-operating pension expense (income) and items considered by management to be unusual or otherwise not reflective of on-going operations (net special items) as reflected in the Consolidated Statement of Operations and related notes included in this release 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. The Company believes that using this information, along with net earnings, provides for a more complete analysis of the results of operations by quarter. Net earnings (loss) 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 | |||||||||||||||||||||||
Net Sales by Business Segment | |||||||||||||||||||||||
Three Months Ended | Three Months Ended | Nine Months Ended | |||||||||||||||||||||
2022 | 2021 | 2022 | 2022 | 2021 | |||||||||||||||||||
Industrial Packaging | $ 4,385 | $ 4,111 | $ 4,491 | $ 13,282 | $ 12,071 | ||||||||||||||||||
Global Cellulose Fibers | 887 | 740 | 788 | 2,385 | 2,015 | ||||||||||||||||||
Corporate and Inter-segment Sales | 130 | 63 | 110 | 361 | 191 | ||||||||||||||||||
Net Sales | $ 5,402 | $ 4,914 | $ 5,389 | $ 16,028 | $ 14,277 | ||||||||||||||||||
Operating Profit (Loss) by Business Segment | |||||||||||||||||||||||
Three Months Ended | Three Months Ended | Nine Months Ended | |||||||||||||||||||||
2022 | 2021 | 2022 | 2022 | 2021 | |||||||||||||||||||
Industrial Packaging | $ 369 | $ 414 | $ 560 | $ 1,326 | $ 1,224 | ||||||||||||||||||
Global Cellulose Fibers | 95 | 76 | 25 | 71 | (4) | ||||||||||||||||||
Total Business Segment Operating Profit | $ 464 | $ 490 | $ 585 | $ 1,397 | $ 1,220 | ||||||||||||||||||
Earnings (Loss) Before Income Taxes and Equity Earnings | 313 | 397 | 514 | 1,189 | 955 | ||||||||||||||||||
Interest expense, net | 123 | (a) | 82 | 74 | 266 | (a) | 261 | ||||||||||||||||
Adjustment for less than wholly owned subsidiaries (f) | (1) | (1) | (1) | (2) | (3) | (c) | |||||||||||||||||
Corporate expenses, net | 15 | 13 | 27 | 54 | 85 | ||||||||||||||||||
Corporate net special items | 62 | (b) | 49 | (d) | 18 | (b) | 34 | (b) | 70 | (d) | |||||||||||||
Business net special items | — | — | — | — | 5 | (e) | |||||||||||||||||
Non-operating pension expense (income) | (48) | (50) | (47) | (144) | (153) | ||||||||||||||||||
Business Segment Operating Profit (g) | $ 464 | $ 490 | $ 585 | $ 1,397 | $ 1,220 | ||||||||||||||||||
Equity Earnings (Loss) in Ilim S.A., Net of Taxes | $ 64 | $ 95 | $ 95 | $ 252 | $ 245 | ||||||||||||||||||
Equity Earnings (Loss) in Graphic Packaging International Partners, LLC | $ — | $ — | $ — | $ — | $ 4 | ||||||||||||||||||
(a) | Includes a charge of | ||||||||||||||||||||||
(b) | Includes a charge of | ||||||||||||||||||||||
(c) | Includes the allocation of income to noncontrolling interest of | ||||||||||||||||||||||
(d) | Includes charges of | ||||||||||||||||||||||
(e) | Related to Industrial Packaging, includes a net gain of | ||||||||||||||||||||||
(f) | 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 earnings for these subsidiaries is adjusted here to present consolidated earnings before income taxes and equity earnings. | ||||||||||||||||||||||
(g) | As set forth in the chart above, business segment operating profit is defined as earnings (loss) from continuing operations before income taxes and equity earnings, but including the impact of less than wholly owned subsidiaries, and excluding interest expense, net, corporate expenses, net, corporate net special items, business net special items and non-operating pension expense. Business segment operating profit is a measure reported to our management for purposes of making decisions about allocating resources to our business segments and assessing the performance of our business segments and is presented in our financial statement footnotes in accordance with ASC 280. | ||||||||||||||||||||||
INTERNATIONAL PAPER COMPANY | ||||||||||
International Paper Consolidated | ||||||||||
Three Months Ended | Three Months Ended | Nine Months Ended | ||||||||
2022 | 2021 | 2022 | 2022 | 2021 | ||||||
Industrial Packaging (In thousands of short tons) | ||||||||||
Corrugated Packaging (b) | 2,522 | 2,689 | 2,619 | 7,759 | 8,106 | |||||
Containerboard | 677 | 710 | 707 | 2,096 | 2,118 | |||||
Recycling | 546 | 521 | 535 | 1,645 | 1,647 | |||||
Saturated Kraft | 51 | 45 | 51 | 146 | 140 | |||||
Gypsum /Release Kraft | 66 | 56 | 64 | 184 | 179 | |||||
EMEA Packaging (b) | 297 | 334 | 354 | 1,019 | 1,179 | |||||
Industrial Packaging | 4,159 | 4,355 | 4,330 | 12,849 | 13,369 | |||||
Global Cellulose Fibers (In thousands of metric tons) (c) | 750 | 748 | 720 | 2,182 | 2,246 | |||||
(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 volumes and internal sales to mills. | |||||||||
INTERNATIONAL PAPER COMPANY | ||||
September 30, 2022 | December 31, 2021 | |||
Assets | ||||
Current Assets | ||||
Cash and Temporary Investments | $ 511 | $ 1,295 | ||
Accounts and Notes Receivable, Net | 3,453 | 3,232 | ||
Contract Assets | 514 | 378 | ||
Inventories | 1,976 | 1,814 | ||
Current Investments | — | 245 | ||
Other | 168 | 132 | ||
Total Current Assets | 6,622 | 7,096 | ||
Plants, Properties and Equipment, Net | 10,219 | 10,441 | ||
Investments | 926 | 751 | ||
Long-Term Financial Assets of Variable Interest Entities | 2,289 | 2,275 | ||
Goodwill | 3,116 | 3,130 | ||
Overfunded Pension Plan Assets | 772 | 595 | ||
Right of Use Assets | 387 | 365 | ||
Deferred Charges and Other Assets | 534 | 590 | ||
Total Assets | $ 24,865 | $ 25,243 | ||
Liabilities and Equity | ||||
Current Liabilities | ||||
Notes Payable and Current Maturities of Long-Term Debt | $ 616 | $ 196 | ||
Accounts Payable and Other Current Liabilities | 4,189 | 3,948 | ||
Total Current Liabilities | 4,805 | 4,144 | ||
Long-Term Debt | 4,766 | 5,383 | ||
Long-Term Nonrecourse Financial Liabilities of Variable Interest Entities | 2,105 | 2,099 | ||
Deferred Income Taxes | 1,806 | 2,618 | ||
Underfunded Pension Benefit Obligation | 359 | 377 | ||
Postretirement and Postemployment Benefit Obligation | 189 | 205 | ||
Long-Term Lease Obligations | 251 | 236 | ||
Other Liabilities | 1,096 | 1,099 | ||
Equity | ||||
Common Stock | 449 | 449 | ||
Paid-in Capital | 4,702 | 4,668 | ||
Retained Earnings | 10,340 | 9,029 | ||
Accumulated Other Comprehensive Loss | (1,586) | (1,666) | ||
13,905 | 12,480 | |||
Less: Common Stock Held in Treasury, at Cost | 4,417 | 3,398 | ||
Total Equity | 9,488 | 9,082 | ||
Total Liabilities and Equity | $ 24,865 | $ 25,243 | ||
INTERNATIONAL PAPER COMPANY | |||
Nine Months Ended | |||
2022 | 2021 | ||
Operating Activities | |||
Net earnings (loss) | $ 1,822 | $ 1,647 | |
Depreciation, amortization and cost of timber harvested | 789 | 933 | |
Deferred income tax expense (benefit), net | (816) | (151) | |
Restructuring and other charges, net | 93 | 243 | |
Net (gains) losses on mark to market investments | (65) | — | |
Net (gains) losses on sales and impairments of businesses | — | (367) | |
Net (gains) losses on sales of equity method investments | — | (205) | |
Net (gains) losses on sales of fixed assets | — | (86) | |
Equity method dividends received | 204 | 149 | |
Equity (earnings) losses, net | (249) | (247) | |
Periodic pension (income) expense, net | (87) | (84) | |
Other, net | 126 | 129 | |
Changes in current assets and liabilities | |||
Accounts and notes receivable | (294) | (510) | |
Contract assets | (138) | (74) | |
Inventories | (217) | (133) | |
Accounts payable and accrued liabilities | 218 | 716 | |
Interest payable | 50 | 9 | |
Other | (23) | (46) | |
Cash Provided By (Used For) Operating Activities | 1,413 | 1,923 | |
Investment Activities | |||
Invested in capital projects, net of insurance recoveries | (609) | (348) | |
Acquisitions, net of cash acquired | — | (80) | |
Proceeds from sales of equity method investments | — | 843 | |
Proceeds from sales of businesses, net of cash divested | — | 827 | |
Proceeds from exchange of equity securities | 311 | — | |
Proceeds from settlement of Variable Interest Entity installment notes | — | 4,850 | |
Proceeds from sale of fixed assets | 11 | 95 | |
Other | (6) | (3) | |
Cash Provided By (Used For) Investment Activities | (293) | 6,184 | |
Financing Activities | |||
Repurchases of common stock and payments of restricted stock tax withholding | (1,093) | (425) | |
Issuance of debt | 752 | 1,511 | |
Reduction of debt | (954) | (1,132) | |
Change in book overdrafts | — | 29 | |
Dividends paid | (509) | (602) | |
Net debt tender premiums paid | (89) | (221) | |
Reduction of Variable Interest Entity loans | — | (4,220) | |
Other | (2) | (14) | |
Cash Provided By (Used for) Financing Activities | (1,895) | (5,074) | |
Effect of Exchange Rate Changes on Cash and Temporary Investments | (9) | (7) | |
Change in Cash and Temporary Investments | (784) | 3,026 | |
Cash and Temporary Investments | |||
Beginning of the period | 1,295 | 595 | |
End of the period | $ 511 | $ 3,621 | |
INTERNATIONAL PAPER COMPANY | ||||||||
Three Months Ended | Nine Months Ended | |||||||
2022 | 2021 | 2022 | 2021 | |||||
Cash Provided By (Used For) Operating Activities | $ 435 | $ 645 | $ 1,413 | $ 1,923 | ||||
Adjustments: | ||||||||
Cash invested in capital projects, net of insurance recoveries | (238) | (126) | (609) | (348) | ||||
Free Cash Flow | $ 197 | $ 519 | $ 804 | $ 1,575 | ||||
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. | ||||||||
The non-GAAP financial measures presented in this release have limitations as analytical tools and should not be considered in isolation or as a substitute for an analysis of our results calculated in accordance with GAAP. In addition, because not all companies use identical calculations, the Company's presentation of non-GAAP measures in this release may not be comparable to similarly titled measures disclosed by other companies, including companies in the same industry as International Paper. | ||||||||
Management believes non-GAAP financial measures, when used in conjunction with information presented in accordance with GAAP, can facilitate a better understanding of the impact of various factors and trends on the Company's financial condition and results of operations. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company's performance. | ||||||||
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SOURCE International Paper
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