ý
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the fiscal year ended December 31, 2017
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to
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New York
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13-0872805
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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Title of each class
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Name of each exchange on which registered
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Common Stock, $1 per share par value
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New York Stock Exchange
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Large accelerated filer
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Accelerated filer
¨
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Non-accelerated filer
¨
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Smaller reporting company
¨
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Emerging growth company
¨
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(Do not check if a smaller reporting company)
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ITEM 7A.
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ITEM 8.
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ITEM 9.
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ITEM 9A.
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ITEM 9B.
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PART III.
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ITEM 10.
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ITEM 11.
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ITEM 12.
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ITEM 13.
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ITEM 14.
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PART IV.
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ITEM 15.
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APPENDIX I
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APPENDIX II
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In thousands of short tons (except as noted)
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2017
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2016
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2015
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|||
Industrial Packaging
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Corrugated Packaging (c)
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10,413
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10,392
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10,284
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Containerboard
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3,294
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3,091
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3,110
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Recycling
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2,257
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2,450
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2,379
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Saturated Kraft
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181
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182
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156
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Gypsum/Release Kraft
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229
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200
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171
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Bleached Kraft
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27
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24
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23
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EMEA Packaging (c) (d)
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1,518
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1,477
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1,417
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Asian Box (c) (e)
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—
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208
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426
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Brazilian Packaging (c)
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357
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371
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348
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European Coated Paperboard
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398
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393
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381
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Industrial Packaging
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18,674
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18,788
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18,695
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Global Cellulose Fibers
(
in thousands of metric tons)
(b)
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3,708
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1,870
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1,575
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Printing Papers
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U.S. Uncoated Papers
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1,915
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1,872
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1,879
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European and Russian Uncoated Papers
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1,483
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1,536
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1,493
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Brazilian Uncoated Papers
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1,167
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1,114
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1,125
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Indian Uncoated Papers
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253
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241
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241
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Printing Papers
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4,818
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4,763
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4,738
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(a)
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Includes third-party and inter-segment sales and excludes sales of equity investees.
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(b)
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Includes North American, European and Brazilian volumes and internal sales to mills. Includes sales volumes from the pulp business acquired beginning December 1, 2016.
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(c)
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Volumes for corrugated box sales reflect consumed tons sold (CTS). Board sales by these businesses reflect invoiced tons.
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(d)
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Excludes newsprint sales volumes at Madrid, Spain mill.
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(e)
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Includes sales volumes through the date of sale on June 30, 2016.
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•
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it may limit our ability to obtain additional debt or equity financing for working capital, capital expenditures, product development, dividends, share repurchases, debt service requirements, acquisitions and general corporate or other purposes;
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•
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a portion of our cash flows from operations will be dedicated to payments on indebtedness and will not be available for other purposes, including
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•
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the debt service requirements of our indebtedness could make it more difficult for us to satisfy other obligations;
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•
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our indebtedness that is subject to variable rates of interest exposes us to increased debt service obligations in the event of increased interest rates;
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•
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it may limit our ability to adjust to changing market conditions and place us at a competitive disadvantage compared to our competitors that have less debt; and
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•
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it may increase our vulnerability to a downturn in general economic conditions or in our business, and may make us unable to carry out capital spending that is important to our growth.
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•
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fires, floods, earthquakes, hurricanes or other catastrophes;
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•
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the effect of a drought or reduced rainfall on its water supply;
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•
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the effect of other severe weather conditions on equipment and facilities;
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•
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terrorism or threats of terrorism;
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•
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domestic and international laws and regulations applicable to our Company and our business partners, including joint venture partners, around the world;
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•
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unscheduled maintenance outages;
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•
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prolonged power failures;
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•
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an equipment failure;
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•
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a chemical spill or release;
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•
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explosion of a boiler or other equipment;
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•
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damage or disruptions caused by third parties operating on or adjacent to one of our manufacturing facilities;
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•
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disruptions in the transportation infrastructure, including roads, bridges, railroad tracks and tunnels;
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•
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widespread outbreak of an illness or any other communicable disease, or any other public health crisis;
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•
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labor difficulties; and
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•
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other operational problems.
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Period
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Total Number of Shares Purchased (a)
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Average Price Paid per Share
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Total Number of Shares (or Units) Purchased as Part of Publicly Announced Programs
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Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs (in billions)
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||||||
October 1, 2017 - October 31, 2017
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78
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$
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56.82
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—
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$
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0.933
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November 1, 2017 - November 30, 2017
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—
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—
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—
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0.933
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December 1, 2017 - December 31, 2017
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5,257
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56.96
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—
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0.933
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Total
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5,335
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(a)
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5,335 shares were acquired from employees from share withholdings to pay income taxes under the Company’s restricted stock programs. During these periods, no shares were purchased under our share repurchase program, which was approved by our Board of Directors and announced on July 8, 2014. Through this program, which does not have an expiration date, we were authorized to purchase, in open market transactions (including block trades), privately negotiated transactions or otherwise, up to $1.5 billion shares of our common stock. As of February 16, 2018, approximately $933 million shares of our common stock remained authorized for purchase under this program.
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(a)
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All periods presented have been restated to reflect the North American Consumer Packaging business, xpedx business, and the Temple-Inland Building Products business as discontinued operations (excluding cash flow related items) and prior period amounts have been adjusted to conform with current year presentation, if applicable.
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2017
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||||||
In millions
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Before Tax
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After Tax
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||||
Gain on sale of investment in ArborGen
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$
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(14
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)
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$
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(9
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)
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Costs associated with the pulp business acquired in 2016
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33
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|
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20
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Amortization of Weyerhaeuser inventory fair value step-up
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14
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8
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Holmen bargain purchase gain
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(6
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)
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(6
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)
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Abandoned property removal
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20
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13
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Kleen Products settlement
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354
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219
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Asia Foodservice sale
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9
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4
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Brazil Packaging wood supply accelerated amortization
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10
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7
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Debt extinguishment costs
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83
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51
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Interest income on income tax refund claims
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(5
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)
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(3
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)
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Other items
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(2
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)
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(2
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)
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Total special items
|
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$
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496
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$
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302
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Non-operating pension expense
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484
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|
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298
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|
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Total
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$
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980
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$
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600
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2017
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||||||
In millions
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Before Tax
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After Tax
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||||
North American Consumer Packaging transaction costs
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$
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17
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$
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10
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Non-operating pension expense
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45
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|
|
28
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Total
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$
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62
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$
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38
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In millions
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2017
|
||
International legal entity restructuring
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$
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34
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Income tax refund claims
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(113
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)
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Cash pension contribution
|
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38
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International Tax Law Change
|
|
9
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|
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Tax benefit of Tax Cuts and Jobs Act
|
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(1,222
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)
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Tax impact of other special items
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$
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(1,254
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)
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2016
|
||||||
In millions
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Before Tax
|
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After Tax
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||||
Riegelwood mill conversion costs
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$
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9
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|
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$
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6
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India Packaging evaluation write-off
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17
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|
|
11
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Write-off of certain regulatory pre-engineering costs
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8
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|
|
5
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|
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Early debt extinguishment costs
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|
29
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|
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18
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|
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Costs associated with the newly acquired pulp business
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31
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|
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21
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|
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Asia Box impairment / restructuring
|
|
70
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|
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58
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|
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Gain on sale of investment in Arizona Chemical
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(8
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)
|
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(5
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)
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Turkey mill closure
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|
7
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|
|
6
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|
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Amortization of Weyerhaeuser inventory fair value step-up
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|
19
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|
|
11
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|
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Total special items
|
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$
|
182
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|
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$
|
131
|
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Non-operating pension expense
|
|
610
|
|
|
375
|
|
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Total
|
|
$
|
792
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|
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$
|
506
|
|
|
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2016
|
||||||
In millions
|
|
Before Tax
|
|
After Tax
|
||||
xpedx legal settlement
|
|
$
|
8
|
|
|
$
|
5
|
|
Total
|
|
$
|
8
|
|
|
$
|
5
|
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In millions
|
|
2016
|
||
Cash pension contribution
|
|
$
|
23
|
|
U.S. Federal audit
|
|
(14
|
)
|
|
Brazil goodwill
|
|
(57
|
)
|
|
International legal entity restructuring
|
|
(6
|
)
|
|
Luxembourg tax rate change
|
|
31
|
|
|
Tax impact of other special items
|
|
$
|
(23
|
)
|
|
|
2015
|
||||||
In millions
|
|
Before Tax
|
|
After Tax
|
||||
Riegelwood mill conversion costs, net of proceeds from sale of the Carolina Coated Bristols brand
|
|
$
|
8
|
|
|
$
|
4
|
|
Timber monetization restructuring
|
|
16
|
|
|
10
|
|
||
Early debt extinguishment costs
|
|
207
|
|
|
133
|
|
||
IP-Sun JV impairment
|
|
174
|
|
|
180
|
|
||
Legal reserve adjustment
|
|
15
|
|
|
9
|
|
||
Refund and state tax credits
|
|
(4
|
)
|
|
(2
|
)
|
||
Impairment of Orsa goodwill and trade name intangible
|
|
137
|
|
|
137
|
|
||
Other items
|
|
6
|
|
|
5
|
|
||
Total special items
|
|
$
|
559
|
|
|
$
|
476
|
|
Non-operating pension expense
|
|
258
|
|
|
157
|
|
||
Total
|
|
$
|
817
|
|
|
$
|
633
|
|
In millions
|
|
2015
|
||
IP-Sun JV impairment
|
|
$
|
(67
|
)
|
Cash pension contribution
|
|
23
|
|
|
Other items
|
|
7
|
|
|
Tax impact of other special items
|
|
$
|
(37
|
)
|
|
|
2014
|
||||||
In millions
|
|
Before Tax
|
|
After Tax
|
||||
Temple-Inland integration
|
|
$
|
16
|
|
|
$
|
10
|
|
Courtland mill shutdown
|
|
554
|
|
|
338
|
|
||
Early debt extinguishment costs
|
|
276
|
|
|
169
|
|
||
India legal contingency resolution
|
|
(20
|
)
|
|
(20
|
)
|
||
Multi-employer pension plan withdrawal liability
|
|
35
|
|
|
21
|
|
||
Foreign tax amnesty program
|
|
32
|
|
|
17
|
|
||
Asia Industrial Packaging goodwill impairment
|
|
100
|
|
|
100
|
|
||
Loss on sale by investee and impairment of investment
|
|
47
|
|
|
36
|
|
||
Other items
|
|
12
|
|
|
9
|
|
||
Total special items
|
|
$
|
1,052
|
|
|
$
|
680
|
|
Non-operating pension expense
|
|
212
|
|
|
129
|
|
||
Total
|
|
$
|
1,264
|
|
|
$
|
809
|
|
|
|
2014
|
||||||
In millions
|
|
Before Tax
|
|
After Tax
|
||||
xpedx spinoff
|
|
$
|
24
|
|
|
$
|
16
|
|
Building Products divestiture
|
|
16
|
|
|
9
|
|
||
xpedx restructuring
|
|
1
|
|
|
(1
|
)
|
||
Total
|
|
$
|
41
|
|
|
$
|
24
|
|
In millions
|
|
2014
|
||
State legislative tax change
|
|
$
|
10
|
|
Internal restructuring
|
|
(90
|
)
|
|
Other items
|
|
(1
|
)
|
|
Tax impact of other special items
|
|
$
|
(81
|
)
|
|
|
2013
|
||||||
In millions
|
|
Before Tax
|
|
After Tax
|
||||
Temple-Inland integration
|
|
$
|
62
|
|
|
$
|
38
|
|
Courtland mill shutdown
|
|
118
|
|
|
72
|
|
||
Early debt extinguishment costs
|
|
25
|
|
|
16
|
|
||
Insurance reimbursement related to legal settlement
|
|
(30
|
)
|
|
(19
|
)
|
||
India Papers tradename and goodwill impairment
|
|
127
|
|
|
122
|
|
||
Fair value adjustment of company airplanes
|
|
9
|
|
|
5
|
|
||
Cass Lake environmental reserve
|
|
6
|
|
|
4
|
|
||
Bargain purchase adjustment - Turkey
|
|
(13
|
)
|
|
(13
|
)
|
||
Other items
|
|
(5
|
)
|
|
2
|
|
||
Total special items
|
|
$
|
299
|
|
|
$
|
227
|
|
Non-operating pension expense
|
|
323
|
|
|
197
|
|
||
Total
|
|
$
|
622
|
|
|
$
|
424
|
|
|
|
2013
|
||||||
In millions
|
|
Before Tax
|
|
After Tax
|
||||
xpedx spinoff
|
|
$
|
22
|
|
|
$
|
14
|
|
xpedx goodwill impairment
|
|
400
|
|
|
366
|
|
||
Building products divestiture
|
|
23
|
|
|
19
|
|
||
Shut down of paper machine at Augusta mill
|
|
45
|
|
|
28
|
|
||
xpedx restructuring
|
|
32
|
|
|
19
|
|
||
Total
|
|
$
|
522
|
|
|
$
|
446
|
|
In millions
|
|
2013
|
||
Settlement of U.S. federal tax audits
|
|
$
|
(744
|
)
|
Income tax reserve release
|
|
(31
|
)
|
|
Other items
|
|
1
|
|
|
Tax impact of other special items
|
|
$
|
(774
|
)
|
|
2017
|
2016
|
2015
|
||||||
Diluted Earnings (Loss) Attributable to Shareholders
|
$
|
2,144
|
|
$
|
904
|
|
$
|
938
|
|
Add back - Discontinued operations (gain) loss
|
(34
|
)
|
(102
|
)
|
(85
|
)
|
|||
Diluted Earnings (Loss) from Continuing Operations
|
2,110
|
|
802
|
|
853
|
|
|||
Add back - Non-operating pension (income) expense
|
484
|
|
610
|
|
258
|
|
|||
Add back - Net special items expense (income)
|
496
|
|
182
|
|
559
|
|
|||
Income tax effect - Non-operating pension and special items expense
|
(1,634
|
)
|
(309
|
)
|
(221
|
)
|
|||
Adjusted Operating Earnings (Loss) Attributable to Shareholders
|
$
|
1,456
|
|
$
|
1,285
|
|
$
|
1,449
|
|
|
2017
|
2016
|
2015
|
||||||
Diluted Earnings (Loss) Per Share Attributable to Shareholders
|
$
|
5.13
|
|
$
|
2.18
|
|
$
|
2.23
|
|
Add back - Discontinued operations (gain) loss per share
|
(0.08
|
)
|
(0.25
|
)
|
(0.20
|
)
|
|||
Diluted Earnings (Loss) Per Share from Continuing Operations
|
5.05
|
|
1.93
|
|
2.03
|
|
|||
Add back - Non-operating pension (income) expense
|
1.16
|
|
1.47
|
|
0.61
|
|
|||
Add back - Net special items expense (income)
|
1.19
|
|
0.44
|
|
1.33
|
|
|||
Income tax effect - Non-operating pension and special items expense
|
(3.91
|
)
|
(0.75
|
)
|
(0.52
|
)
|
|||
Adjusted Operating Earnings (Loss) Per Share Attributable to Shareholders
|
$
|
3.49
|
|
$
|
3.09
|
|
$
|
3.45
|
|
|
|
Three Months Ended December 31, 2017
|
|
Three Months Ended September 30, 2017
|
|
Three Months Ended December 31, 2016
|
||||||
Diluted Earnings (Loss) Attributable to Shareholders
|
|
$
|
1,460
|
|
|
$
|
395
|
|
|
$
|
218
|
|
Add back - Discontinued operations (gain) loss
|
|
8
|
|
|
(29
|
)
|
|
(24
|
)
|
|||
Diluted Earnings (Loss) from Continuing Operations
|
|
1,468
|
|
|
366
|
|
|
194
|
|
|||
Add back - Non-operating pension (income) expense
|
|
386
|
|
|
33
|
|
|
37
|
|
|||
Add back - Net special items expense (income)
|
|
106
|
|
|
23
|
|
|
45
|
|
|||
Income tax effect - Non-operating pension and special items expense
|
|
(1,430
|
)
|
|
(2
|
)
|
|
3
|
|
|||
Adjusted Operating Earnings (Loss) Attributable to Shareholders
|
|
$
|
530
|
|
|
$
|
420
|
|
|
$
|
279
|
|
|
|
Three Months Ended December 31, 2017
|
|
Three Months Ended September 30, 2017
|
|
Three Months Ended December 31, 2016
|
||||||
Diluted Earnings (Loss) Per Share Attributable to Shareholders
|
|
$
|
3.50
|
|
|
$
|
0.95
|
|
|
$
|
0.53
|
|
Add back - Discontinued operations (gain) loss per share
|
|
0.02
|
|
|
(0.07
|
)
|
|
(0.06
|
)
|
|||
Diluted Earnings (Loss) Per Share from Continuing Operations
|
|
3.52
|
|
|
0.88
|
|
|
0.47
|
|
|||
Add back - Non-operating pension (income) expense per share
|
|
0.92
|
|
|
0.08
|
|
|
0.09
|
|
|||
Add back - Net special items expense (income) per share
|
|
0.25
|
|
|
0.05
|
|
|
0.11
|
|
|||
Income tax effect per share - Non-operating pension and special items expense
|
|
(3.42
|
)
|
|
—
|
|
|
—
|
|
|||
Adjusted Operating Earnings (Loss) Per Share Attributable to Shareholders
|
|
$
|
1.27
|
|
|
$
|
1.01
|
|
|
$
|
0.67
|
|
In millions
|
2017
|
2016
|
2015
|
||||||
Cash provided by operations
|
$
|
1,757
|
|
$
|
2,478
|
|
$
|
2,580
|
|
Adjustments:
|
|
|
|
||||||
Cash invested in capital projects
|
(1,391
|
)
|
(1,348
|
)
|
(1,487
|
)
|
|||
Cash contribution to pension plan
|
1,250
|
|
750
|
|
750
|
|
|||
Cash payment for Kleen Settlement
|
354
|
|
—
|
|
—
|
|
|||
Free Cash Flow
|
$
|
1,970
|
|
$
|
1,880
|
|
$
|
1,843
|
|
In millions
|
Three Months Ended December 31, 2017
|
Three Months Ended September 30, 2017
|
Three Months Ended December 31, 2016
|
||||||
Cash provided by operations
|
$
|
1,188
|
|
$
|
(709
|
)
|
$
|
912
|
|
Adjustments:
|
|
|
|
||||||
Cash invested in capital projects
|
(456
|
)
|
(271
|
)
|
(445
|
)
|
|||
Cash contribution to pension plan
|
—
|
|
1,250
|
|
—
|
|
|||
Cash payment for Kleen Settlement
|
—
|
|
354
|
|
—
|
|
|||
Free Cash Flow
|
$
|
732
|
|
$
|
624
|
|
$
|
467
|
|
In millions
|
2017
|
2016
|
2015
|
||||||
Earnings (Loss) From Continuing Operations Attributable to International Paper Company
|
$
|
2,110
|
|
$
|
802
|
|
$
|
853
|
|
Add back (deduct)
|
|
|
|
||||||
Income tax provision (benefit)
|
(1,085
|
)
|
193
|
|
417
|
|
|||
Equity (earnings) loss, net of taxes
|
(177
|
)
|
(198
|
)
|
(117
|
)
|
|||
Noncontrolling interests, net of taxes
|
—
|
|
(2
|
)
|
(21
|
)
|
|||
Earnings (Loss) From Continuing Operations Before Income Taxes and Equity Earnings
|
848
|
|
795
|
|
1,132
|
|
|||
Interest expense, net
|
572
|
|
520
|
|
555
|
|
|||
Noncontrolling interests/equity earnings included in operations
|
(2
|
)
|
1
|
|
8
|
|
|||
Corporate items
|
91
|
|
121
|
|
96
|
|
|||
Corporate special items (income) expense
|
76
|
|
55
|
|
422
|
|
|||
Non-operating pension expense
|
484
|
|
610
|
|
258
|
|
|||
|
$
|
2,069
|
|
$
|
2,102
|
|
$
|
2,471
|
|
Business Segment Operating Profit
|
|
|
|
||||||
Industrial Packaging
|
$
|
1,547
|
|
$
|
1,741
|
|
$
|
1,938
|
|
Global Cellulose Fibers
|
65
|
|
(179
|
)
|
68
|
|
|||
Printing Papers
|
457
|
|
540
|
|
465
|
|
|||
Business Segment Operating Profit
|
$
|
2,069
|
|
$
|
2,102
|
|
$
|
2,471
|
|
•
|
Industrial Packaging’s profits of $1.5 billion were $194 million lower than in 2016 as the benefits of higher average sales price realizations and mix and higher sales volumes were partially offset by higher operating costs, higher maintenance outage costs, higher input costs and higher other costs. In addition, operating profits in 2017 included a charge of $354 million related to the agreement to settle the Kleen Products anti-trust class action lawsuit, charges of $14 million for the removal of abandoned property at our mills, a charge of $10 million for the accelerated amortization of an intangible asset in Brazil and a gain of $6 million for a net bargain purchase gain associated with the 2016 acquisition of Holmen Paper's newsprint mill in Madrid, Spain. In 2016, operating profits included a charge of $70 million for impairment and other costs associated with the sale of our corrugated packaging business in Asia and a charge of $7 million related to the closure of a mill in Turkey.
|
•
|
Global Cellulose Fibers' operating profit of $65 million was $244 million favorable versus 2016 as the benefits of higher average sales price realizations and mix, lower operating costs, lower maintenance outage costs and lower input costs were partially offset by higher other costs. Operating profits in 2017 included $33 million of costs associated with the acquisition and integration of the pulp business acquired in late 2016 from Weyerhaeuser, a charge of $14 million for the amortization of the remaining inventory fair value adjustment associated with that acquisition and a charge of $4 million for the removal of abandoned property at our mills. Results for 2017 also reflect the transaction synergies associated with the Weyerhaeuser acquisition. In 2016, the operating loss included $31 million of costs associated with the acquisition of the pulp business and $19 million
|
•
|
Printing Papers’ profits of $457 million represented a $83 million decrease in operating profits from 2016. The benefits from higher sales volumes, lower maintenance outage costs and lower other costs were more than offset by lower average sales price realizations and mix, higher operating costs and higher input costs. Op
erating profits in 2017 included charges of $2 million for the removal of abandoned property at our mills.
|
In millions
|
2017
|
|
2016
|
|
2015
|
|
||||||
Earnings from continuing operations attributable to International Paper Company
|
$
|
2,110
|
|
(a)
|
$
|
802
|
|
(b)
|
$
|
853
|
|
(c)
|
Restructuring and Other
|
|
|
|
|
|
|
||||||
In millions
|
2017
|
|
2016
|
|
2015
|
|
||||||
Business Segments
|
|
|
|
|
|
|
||||||
Turkey mill closure
|
$
|
—
|
|
|
$
|
7
|
|
(a)
|
$
|
—
|
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
|||
Corporate
|
|
|
|
|
|
|
||||||
Early debt extinguishment costs (see Note 13)
|
$
|
83
|
|
|
$
|
29
|
|
|
$
|
207
|
|
|
Gain on sale of investment in ArborGen
|
(14
|
)
|
|
—
|
|
|
—
|
|
|
|||
India Packaging business evaluation write-off
|
—
|
|
|
17
|
|
|
—
|
|
|
|||
Gain on sale of investment in Arizona Chemical
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
|||
Riegelwood mill conversion costs net of proceeds from the sale of Carolina Coated Bristols brand
|
—
|
|
|
9
|
|
|
8
|
|
|
|||
Timber monetization restructuring
|
—
|
|
|
—
|
|
|
16
|
|
|
|||
Legal liability reserve adjustment
|
—
|
|
|
—
|
|
|
15
|
|
|
|||
Other Items
|
(2
|
)
|
|
—
|
|
|
6
|
|
|
|||
|
67
|
|
|
47
|
|
|
252
|
|
|
|||
Total
|
$
|
67
|
|
|
$
|
54
|
|
|
$
|
252
|
|
|
Other Corporate Items
|
|
|
|
||||||
In millions
|
2017
|
2016
|
2015
|
||||||
Write-off of certain regulatory pre-engineering costs
|
$
|
—
|
|
$
|
8
|
|
$
|
—
|
|
Other
|
—
|
|
—
|
|
(4
|
)
|
|||
Total
|
$
|
—
|
|
$
|
8
|
|
$
|
(4
|
)
|
Industrial Packaging
|
|
|
|
||||||
In millions
|
2017
|
2016
|
2015
|
||||||
Net Sales
|
$
|
15,077
|
|
$
|
14,226
|
|
$
|
14,559
|
|
Operating Profit (Loss)
|
$
|
1,547
|
|
$
|
1,741
|
|
$
|
1,938
|
|
Asia Packaging restructuring and impairment
|
—
|
|
70
|
|
—
|
|
|||
Holmen mill bargain purchase gain
|
(6
|
)
|
—
|
|
—
|
|
|||
Kleen Products anti-trust settlement
|
354
|
|
—
|
|
—
|
|
|||
Brazil Packaging Wood Supply Accelerated Amortization
|
10
|
|
—
|
|
—
|
|
|||
Turkey mill closure
|
—
|
|
7
|
|
—
|
|
|||
Brazil Packaging goodwill and trade name impairment
|
—
|
|
—
|
|
137
|
|
|||
Other
|
14
|
|
—
|
|
—
|
|
|||
Operating Profit Before Special Items
|
$
|
1,919
|
|
$
|
1,818
|
|
$
|
2,075
|
|
North American Industrial Packaging
|
|||||||||
In millions
|
2017
|
2016
|
2015
|
||||||
Net Sales (a)
|
$
|
13,329
|
|
$
|
12,450
|
|
$
|
12,618
|
|
Operating Profit (Loss)
|
$
|
1,504
|
|
$
|
1,757
|
|
$
|
2,009
|
|
Kleen Products anti-trust settlement
|
354
|
|
—
|
|
—
|
|
|||
Other
|
14
|
|
—
|
|
—
|
|
|||
Operating Profit Before Special Items
|
$
|
1,872
|
|
$
|
1,757
|
|
$
|
2,009
|
|
EMEA Industrial Packaging
|
|
|
|
||||||
In millions
|
2017
|
2016
|
2015
|
||||||
Net Sales
|
$
|
1,334
|
|
$
|
1,227
|
|
$
|
1,114
|
|
Operating Profit (Loss)
|
$
|
6
|
|
$
|
15
|
|
$
|
13
|
|
Holmen mill net bargain purchase gain
|
(6
|
)
|
—
|
|
—
|
|
|||
Turkey Mill Closure
|
—
|
|
7
|
|
—
|
|
|||
Operating Profit Before Special Items
|
$
|
—
|
|
$
|
22
|
|
$
|
13
|
|
Brazilian Industrial Packaging
|
|
|
|
||||||
In millions
|
2017
|
2016
|
2015
|
||||||
Net Sales
|
$
|
251
|
|
$
|
232
|
|
$
|
228
|
|
Operating Profit (Loss)
|
$
|
(35
|
)
|
$
|
(43
|
)
|
$
|
(163
|
)
|
Brazil Packaging goodwill and trade name impairment
|
10
|
|
—
|
|
137
|
|
|||
Operating Profit Before Special Items
|
$
|
(25
|
)
|
$
|
(43
|
)
|
$
|
(26
|
)
|
Asian Industrial Packaging
|
|
|
|
||||||
In millions
|
2017
|
2016
|
2015
|
||||||
Net Sales
|
$
|
—
|
|
$
|
133
|
|
$
|
280
|
|
Operating Profit (Loss)
|
$
|
—
|
|
$
|
(81
|
)
|
$
|
(8
|
)
|
Asia Packaging restructuring and impairment
|
—
|
|
70
|
|
—
|
|
|||
Operating Profit Before Special Items
|
$
|
—
|
|
$
|
(11
|
)
|
$
|
(8
|
)
|
Global Cellulose Fibers
|
|
|
|
||||||
In millions
|
2017
|
2016
|
2015
|
||||||
Net Sales
|
$
|
2,551
|
|
$
|
1,092
|
|
$
|
975
|
|
Operating Profit (Loss)
|
$
|
65
|
|
$
|
(179
|
)
|
$
|
68
|
|
Acquisition costs
|
33
|
|
31
|
|
—
|
|
|||
Inventory fair value step-up amortization
|
14
|
|
19
|
|
—
|
|
|||
Other
|
4
|
|
—
|
|
—
|
|
|||
Operating Profit Before Special Items
|
$
|
116
|
|
$
|
(129
|
)
|
$
|
68
|
|
Printing Papers
|
|
|
|
||||||
In millions
|
2017
|
2016
|
2015
|
||||||
Net Sales
|
$
|
4,157
|
|
$
|
4,058
|
|
$
|
4,056
|
|
Operating Profit (Loss)
|
$
|
457
|
|
$
|
540
|
|
$
|
465
|
|
Other
|
2
|
|
—
|
|
—
|
|
|||
Operating Profit Before Special Items
|
$
|
459
|
|
$
|
540
|
|
$
|
465
|
|
North American Printing Papers
|
|
|
|
||||||
In millions
|
2017
|
2016
|
2015
|
||||||
Net Sales
|
$
|
1,833
|
|
$
|
1,890
|
|
$
|
1,942
|
|
Operating Profit (Loss)
|
$
|
132
|
|
$
|
236
|
|
$
|
179
|
|
Other
|
2
|
|
—
|
|
—
|
|
|||
Operating Profit Before Special Items
|
$
|
134
|
|
$
|
236
|
|
$
|
179
|
|
Brazilian Papers
|
|
|
|
||||||
In millions
|
2017
|
2016
|
2015
|
||||||
Net Sales (a)
|
$
|
972
|
|
$
|
897
|
|
$
|
878
|
|
Operating Profit (Loss)
|
$
|
194
|
|
$
|
173
|
|
$
|
186
|
|
European Papers
|
|
|
|
||||||
In millions
|
2017
|
2016
|
2015
|
||||||
Net Sales
|
$
|
1,187
|
|
$
|
1,109
|
|
$
|
1,064
|
|
Operating Profit (Loss)
|
$
|
136
|
|
$
|
142
|
|
$
|
111
|
|
Indian Papers
|
|
|
|
||||||
In millions
|
2017
|
2016
|
2015
|
||||||
Net Sales
|
$
|
189
|
|
$
|
167
|
|
$
|
172
|
|
Operating Profit (Loss)
|
$
|
(5
|
)
|
$
|
(11
|
)
|
$
|
(11
|
)
|
In millions
|
2017
|
2016
|
2015
|
||||||
Industrial Packaging
|
$
|
836
|
|
$
|
832
|
|
$
|
871
|
|
Global Cellulose Fibers
|
188
|
|
174
|
|
129
|
|
|||
Printing Papers
|
235
|
|
215
|
|
232
|
|
|||
Subtotal
|
1,259
|
|
1,221
|
|
1,232
|
|
|||
Corporate and other
|
21
|
|
20
|
|
78
|
|
|||
Capital Spending
|
$
|
1,280
|
|
$
|
1,241
|
|
$
|
1,310
|
|
In millions
|
2017
|
2016
|
2015
|
||||||
Debt reductions (a)
|
$
|
993
|
|
$
|
266
|
|
$
|
2,151
|
|
Pre-tax early debt extinguishment costs (b)
|
83
|
|
29
|
|
207
|
|
(a)
|
Reductions related to notes with interest rates ranging from
1.57%
to
9.38%
with original maturities from
2015
to
2030
for the years ended December 31,
2017
,
2016
and
2015
. Includes the
$630 million
payment for a portion of the Special Purpose Entity Liability for the year ended December 31, 2015 (see
Note 12 Variable Interest Entities
).
|
(b)
|
Amounts are included in Restructuring and other charges in the accompanying consolidated statements of operations.
|
In millions
|
2018
|
2019
|
2020
|
2021
|
2022
|
Thereafter
|
||||||||||||
Maturities of long-term debt (a)
|
$
|
311
|
|
$
|
126
|
|
$
|
164
|
|
$
|
440
|
|
$
|
956
|
|
$
|
9,160
|
|
Lease obligations
|
130
|
|
102
|
|
77
|
|
53
|
|
37
|
|
141
|
|
||||||
Purchase obligations (b)
|
3,415
|
|
680
|
|
583
|
|
523
|
|
463
|
|
2,197
|
|
||||||
Total (c)
|
$
|
3,856
|
|
$
|
908
|
|
$
|
824
|
|
$
|
1,016
|
|
$
|
1,456
|
|
$
|
11,498
|
|
(a)
|
Total debt includes scheduled principal payments only.
|
(b)
|
Includes
$1.6 billion
relating to fiber supply agreements entered into at the time of the 2006 Transformation Plan forestland sales and in conjunction with the 2008 acquisition of Weyerhaeuser Company’s Containerboard, Packaging and Recycling business. Also includes $1.2 billion relating to fiber supply agreements assumed in conjunction with the 2016 acquisition of Weyerhaeuser's pulp business.
|
(c)
|
Not included in the above table due to the uncertainty of the amount and timing of the payment are unrecognized tax benefits of approximately $134 million.
|
In millions
|
Benefit
Obligation |
Fair Value of
Plan Assets |
||||
U.S. qualified pension
|
$
|
12,895
|
|
$
|
11,368
|
|
U.S. nonqualified pension
|
369
|
|
—
|
|
||
U.S. postretirement
|
270
|
|
—
|
|
||
Non-U.S. pension
|
247
|
|
176
|
|
||
Non-U.S. postretirement
|
25
|
|
—
|
|
|
2017
|
2016
|
2015
|
|||
Discount rate
|
3.60
|
%
|
4.10
|
%
|
4.40
|
%
|
Rate of compensation increase
|
3.75
|
%
|
3.75
|
%
|
3.75
|
%
|
In millions
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
|||||
Pension expense
|
|
|
|
|
|
||||||||||
U.S. plans (non-cash)
|
$
|
717
|
|
$
|
809
|
|
|
$461
|
|
|
$387
|
|
|
$545
|
|
Non-U.S. plans
|
5
|
|
4
|
|
6
|
|
—
|
|
5
|
|
|||||
Postretirement expense
|
|
|
|
|
|
||||||||||
U.S. plans
|
17
|
|
13
|
|
8
|
|
7
|
|
(1
|
)
|
|||||
Non-U.S. plans
|
1
|
|
1
|
|
5
|
|
7
|
|
7
|
|
|||||
Net expense
|
$
|
740
|
|
$
|
827
|
|
|
$480
|
|
|
$401
|
|
|
$556
|
|
In millions
|
2019
|
2018
|
||||
Pension expense
|
|
|
||||
U.S. plans (non-cash)
|
$
|
30
|
|
$
|
167
|
|
Non-U.S. plans
|
5
|
|
4
|
|
||
Postretirement expense
|
|
|
||||
U.S. plans
|
14
|
|
16
|
|
||
Non-U.S. plans
|
1
|
|
1
|
|
||
Net expense
|
$
|
50
|
|
$
|
188
|
|
In millions, except per share amounts, for the years ended December 31
|
2017
|
2016
|
2015
|
||||||
NET SALES
|
$
|
21,743
|
|
$
|
19,495
|
|
$
|
20,675
|
|
COSTS AND EXPENSES
|
|
|
|
||||||
Cost of products sold
|
15,300
|
|
14,057
|
|
14,313
|
|
|||
Selling and administrative expenses
|
1,653
|
|
1,484
|
|
1,539
|
|
|||
Depreciation, amortization and cost of timber harvested
|
1,343
|
|
1,124
|
|
1,167
|
|
|||
Distribution expenses
|
1,434
|
|
1,237
|
|
1,248
|
|
|||
Taxes other than payroll and income taxes
|
169
|
|
154
|
|
158
|
|
|||
Restructuring and other charges
|
67
|
|
54
|
|
252
|
|
|||
Impairment of goodwill and other intangibles
|
—
|
|
—
|
|
137
|
|
|||
Net (gains) losses on sales and impairments of businesses
|
9
|
|
70
|
|
174
|
|
|||
Litigation settlement
|
354
|
|
—
|
|
—
|
|
|||
Net bargain purchase gain on acquisition of business
|
(6
|
)
|
—
|
|
—
|
|
|||
Interest expense, net
|
572
|
|
520
|
|
555
|
|
|||
EARNINGS (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND EQUITY EARNINGS (LOSSES)
|
848
|
|
795
|
|
1,132
|
|
|||
Income tax provision (benefit)
|
(1,085
|
)
|
193
|
|
417
|
|
|||
Equity earnings (loss), net of taxes
|
177
|
|
198
|
|
117
|
|
|||
EARNINGS (LOSS) FROM CONTINUING OPERATIONS
|
2,110
|
|
800
|
|
832
|
|
|||
Discontinued operations, net of taxes
|
34
|
|
102
|
|
85
|
|
|||
NET EARNINGS (LOSS)
|
2,144
|
|
902
|
|
917
|
|
|||
Less: Net earnings (loss) attributable to noncontrolling interests
|
—
|
|
(2
|
)
|
(21
|
)
|
|||
NET EARNINGS (LOSS) ATTRIBUTABLE TO INTERNATIONAL PAPER
COMPANY |
$
|
2,144
|
|
$
|
904
|
|
$
|
938
|
|
BASIC EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO INTERNATIONAL PAPER COMPANY COMMON SHAREHOLDERS
|
|
|
|
||||||
Earnings (loss) from continuing operations
|
$
|
5.11
|
|
$
|
1.95
|
|
$
|
2.05
|
|
Discontinued operations, net of taxes
|
0.08
|
|
0.25
|
|
0.20
|
|
|||
Net earnings (loss)
|
$
|
5.19
|
|
$
|
2.20
|
|
$
|
2.25
|
|
DILUTED EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO INTERNATIONAL PAPER COMPANY COMMON SHAREHOLDERS
|
|
|
|
||||||
Earnings (loss) from continuing operations
|
$
|
5.05
|
|
$
|
1.93
|
|
$
|
2.03
|
|
Discontinued operations, net of taxes
|
0.08
|
|
0.25
|
|
0.20
|
|
|||
Net earnings (loss)
|
$
|
5.13
|
|
$
|
2.18
|
|
$
|
2.23
|
|
AMOUNTS ATTRIBUTABLE TO INTERNATIONAL PAPER COMPANY COMMON SHAREHOLDERS
|
|
|
|
||||||
Earnings (loss) from continuing operations
|
$
|
2,110
|
|
$
|
802
|
|
$
|
853
|
|
Discontinued operations, net of taxes
|
34
|
|
102
|
|
85
|
|
|||
Net earnings (loss)
|
$
|
2,144
|
|
$
|
904
|
|
$
|
938
|
|
In millions for the years ended December 31
|
2017
|
2016
|
2015
|
||||||
NET EARNINGS (LOSS)
|
$
|
2,144
|
|
$
|
902
|
|
$
|
917
|
|
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX
|
|
|
|
||||||
Amortization of pension and postretirement prior service costs and net loss:
|
|
|
|
||||||
U.S. plans (less tax of $280, $343 and $186)
|
486
|
|
545
|
|
296
|
|
|||
Pension and postretirement liability adjustments:
|
|
|
|
||||||
U.S. plans (less tax of $69, $283 and $206)
|
56
|
|
(451
|
)
|
(329
|
)
|
|||
Non-U.S. plans (less tax of $1, $4 and $0)
|
3
|
|
3
|
|
(2
|
)
|
|||
Change in cumulative foreign currency translation adjustment
|
177
|
|
260
|
|
(1,042
|
)
|
|||
Net gains/losses on cash flow hedging derivatives:
|
|
|
|
||||||
Net gains (losses) arising during the period (less tax of $4, $3 and $3)
|
15
|
|
(6
|
)
|
(3
|
)
|
|||
Reclassification adjustment for (gains) losses included in net earnings (less tax of $2, $3 and $8)
|
(7
|
)
|
(7
|
)
|
12
|
|
|||
TOTAL OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX
|
730
|
|
344
|
|
(1,068
|
)
|
|||
Comprehensive Income (Loss)
|
2,874
|
|
1,246
|
|
(151
|
)
|
|||
Net (Earnings) Loss Attributable to Noncontrolling Interests
|
—
|
|
2
|
|
21
|
|
|||
Other Comprehensive (Income) Loss Attributable to Noncontrolling Interests
|
(1
|
)
|
2
|
|
6
|
|
|||
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO INTERNATIONAL PAPER COMPANY
|
$
|
2,873
|
|
$
|
1,250
|
|
$
|
(124
|
)
|
In millions, except per share amounts, at December 31
|
2017
|
2016
|
||||
ASSETS
|
|
|
||||
Current Assets
|
|
|
||||
Cash and temporary investments
|
$
|
1,018
|
|
$
|
1,033
|
|
Accounts and notes receivable, less allowances of $73 in 2017 and $70 in 2016
|
3,287
|
|
2,852
|
|
||
Inventories
|
2,313
|
|
2,233
|
|
||
Assets held for sale
|
1,377
|
|
361
|
|
||
Other current assets
|
282
|
|
191
|
|
||
Total Current Assets
|
8,277
|
|
6,670
|
|
||
Plants, Properties and Equipment, net
|
13,265
|
|
13,003
|
|
||
Forestlands
|
448
|
|
456
|
|
||
Investments
|
390
|
|
360
|
|
||
Financial Assets of Special Purpose Entities (Note 12)
|
7,051
|
|
7,033
|
|
||
Long-Term Assets Held for Sale
|
—
|
|
1,018
|
|
||
Goodwill
|
3,411
|
|
3,364
|
|
||
Deferred Charges and Other Assets
|
1,061
|
|
1,189
|
|
||
TOTAL ASSETS
|
$
|
33,903
|
|
$
|
33,093
|
|
LIABILITIES AND EQUITY
|
|
|
||||
Current Liabilities
|
|
|
||||
Notes payable and current maturities of long-term debt
|
$
|
311
|
|
$
|
239
|
|
Accounts payable
|
2,458
|
|
2,199
|
|
||
Accrued payroll and benefits
|
485
|
|
401
|
|
||
Liabilities held for sale
|
805
|
|
161
|
|
||
Other accrued liabilities
|
1,043
|
|
1,069
|
|
||
Total Current Liabilities
|
5,102
|
|
4,069
|
|
||
Long-Term Liabilities Held for Sale
|
—
|
|
8
|
|
||
Long-Term Debt
|
10,846
|
|
11,075
|
|
||
Nonrecourse Financial Liabilities of Special Purpose Entities (Note 12)
|
6,291
|
|
6,284
|
|
||
Deferred Income Taxes
|
2,291
|
|
3,127
|
|
||
Pension Benefit Obligation
|
1,939
|
|
3,400
|
|
||
Postretirement and Postemployment Benefit Obligation
|
326
|
|
330
|
|
||
Other Liabilities
|
567
|
|
441
|
|
||
Commitments and Contingent Liabilities (Note 11)
|
|
|
||||
Equity
|
|
|
||||
Common stock $1 par value, 2017 - 448.9 shares & 2016 – 448.9 shares
|
449
|
|
449
|
|
||
Paid-in capital
|
6,206
|
|
6,189
|
|
||
Retained earnings
|
6,180
|
|
4,818
|
|
||
Accumulated other comprehensive loss
|
(4,633
|
)
|
(5,362
|
)
|
||
|
8,202
|
|
6,094
|
|
||
Less: Common stock held in treasury, at cost, 2017 – 35.975 shares and 2016 – 37.671 shares
|
1,680
|
|
1,753
|
|
||
Total International Paper Shareholders’ Equity
|
6,522
|
|
4,341
|
|
||
Noncontrolling interests
|
19
|
|
18
|
|
||
Total Equity
|
6,541
|
|
4,359
|
|
||
TOTAL LIABILITIES AND EQUITY
|
$
|
33,903
|
|
$
|
33,093
|
|
In millions for the years ended December 31
|
2017
|
2016
|
2015
|
||||||
OPERATING ACTIVITIES
|
|
|
|
||||||
Net earnings (loss)
|
$
|
2,144
|
|
$
|
902
|
|
$
|
917
|
|
Depreciation, amortization, and cost of timber harvested
|
1,423
|
|
1,227
|
|
1,294
|
|
|||
Deferred income tax provision (benefit), net
|
(1,113
|
)
|
136
|
|
281
|
|
|||
Restructuring and other charges
|
67
|
|
54
|
|
252
|
|
|||
Pension plan contribution
|
(1,250
|
)
|
(750
|
)
|
(750
|
)
|
|||
Periodic pension expense, net
|
717
|
|
809
|
|
461
|
|
|||
Net bargain purchase gain on acquisition of business
|
(6
|
)
|
—
|
|
—
|
|
|||
Net (gains) losses on sales and impairments of businesses
|
9
|
|
70
|
|
174
|
|
|||
Ilim dividends received
|
133
|
|
58
|
|
35
|
|
|||
Equity (earnings) losses, net of taxes
|
(177
|
)
|
(198
|
)
|
(117
|
)
|
|||
Impairment of goodwill and other intangible assets
|
—
|
|
—
|
|
137
|
|
|||
Other, net
|
212
|
|
99
|
|
118
|
|
|||
Changes in current assets and liabilities
|
|
|
|
||||||
Accounts and notes receivable
|
(370
|
)
|
(94
|
)
|
7
|
|
|||
Inventories
|
(87
|
)
|
11
|
|
(131
|
)
|
|||
Accounts payable and accrued liabilities
|
114
|
|
98
|
|
(89
|
)
|
|||
Interest payable
|
1
|
|
41
|
|
(17
|
)
|
|||
Other
|
(60
|
)
|
15
|
|
8
|
|
|||
CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES
|
1,757
|
|
2,478
|
|
2,580
|
|
|||
INVESTMENT ACTIVITIES
|
|
|
|
||||||
Invested in capital projects
|
(1,391
|
)
|
(1,348
|
)
|
(1,487
|
)
|
|||
Acquisitions, net of cash acquired
|
(45
|
)
|
(2,228
|
)
|
—
|
|
|||
Proceeds from divestitures
|
4
|
|
108
|
|
23
|
|
|||
Investment in Special Purpose Entities
|
—
|
|
—
|
|
(198
|
)
|
|||
Proceeds from sale of fixed assets
|
26
|
|
19
|
|
37
|
|
|||
Other
|
15
|
|
(49
|
)
|
(114
|
)
|
|||
CASH PROVIDED BY (USED FOR) INVESTMENT ACTIVITIES
|
(1,391
|
)
|
(3,498
|
)
|
(1,739
|
)
|
|||
FINANCING ACTIVITIES
|
|
|
|
||||||
Repurchase of common stock and payments of restricted stock tax withholding
|
(47
|
)
|
(132
|
)
|
(605
|
)
|
|||
Issuance of common stock
|
—
|
|
—
|
|
2
|
|
|||
Issuance of debt
|
1,907
|
|
3,830
|
|
6,873
|
|
|||
Reduction of debt
|
(1,424
|
)
|
(1,938
|
)
|
(6,947
|
)
|
|||
Change in book overdrafts
|
26
|
|
—
|
|
(14
|
)
|
|||
Dividends paid
|
(769
|
)
|
(733
|
)
|
(685
|
)
|
|||
Debt tender premiums paid
|
(84
|
)
|
(31
|
)
|
(211
|
)
|
|||
Other
|
(8
|
)
|
(14
|
)
|
(14
|
)
|
|||
CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES
|
(399
|
)
|
982
|
|
(1,601
|
)
|
|||
Effect of Exchange Rate Changes on Cash
|
18
|
|
21
|
|
(71
|
)
|
|||
Change in Cash and Temporary Investments
|
(15
|
)
|
(17
|
)
|
(831
|
)
|
|||
Cash and Temporary Investments
|
|
|
|
||||||
Beginning of the period
|
1,033
|
|
1,050
|
|
1,881
|
|
|||
End of the period
|
$
|
1,018
|
|
$
|
1,033
|
|
$
|
1,050
|
|
|
||||||||||||||||||||||||
In millions
|
Common Stock Issued
|
Paid-in Capital
|
Retained Earnings
|
Accumulated Other Comprehensive Income (Loss)
|
Treasury Stock
|
Total International Paper Shareholders’ Equity
|
Noncontrolling Interests
|
Total Equity
|
||||||||||||||||
BALANCE, JANUARY 1, 2015
|
$
|
449
|
|
$
|
6,245
|
|
$
|
4,409
|
|
$
|
(4,646
|
)
|
$
|
1,342
|
|
$
|
5,115
|
|
$
|
148
|
|
$
|
5,263
|
|
Issuance of stock for various plans, net
|
—
|
|
35
|
|
—
|
|
—
|
|
(198
|
)
|
233
|
|
—
|
|
233
|
|
||||||||
Repurchase of stock
|
—
|
|
—
|
|
—
|
|
—
|
|
605
|
|
(605
|
)
|
—
|
|
(605
|
)
|
||||||||
Dividends
|
—
|
|
—
|
|
(698
|
)
|
—
|
|
—
|
|
(698
|
)
|
—
|
|
(698
|
)
|
||||||||
Transactions of equity method investees
|
—
|
|
(37
|
)
|
—
|
|
—
|
|
—
|
|
(37
|
)
|
—
|
|
(37
|
)
|
||||||||
Divestiture of noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(96
|
)
|
(96
|
)
|
||||||||
Comprehensive income (loss)
|
—
|
|
—
|
|
938
|
|
(1,062
|
)
|
—
|
|
(124
|
)
|
(27
|
)
|
(151
|
)
|
||||||||
BALANCE, DECEMBER 31, 2015
|
449
|
|
6,243
|
|
4,649
|
|
(5,708
|
)
|
1,749
|
|
3,884
|
|
25
|
|
3,909
|
|
||||||||
Issuance of stock for various plans, net
|
—
|
|
(6
|
)
|
—
|
|
—
|
|
(128
|
)
|
122
|
|
—
|
|
122
|
|
||||||||
Repurchase of stock
|
—
|
|
—
|
|
—
|
|
—
|
|
132
|
|
(132
|
)
|
—
|
|
(132
|
)
|
||||||||
Dividends
|
—
|
|
—
|
|
(743
|
)
|
—
|
|
—
|
|
(743
|
)
|
—
|
|
(743
|
)
|
||||||||
Transactions of equity method investees
|
—
|
|
(48
|
)
|
—
|
|
—
|
|
—
|
|
(48
|
)
|
—
|
|
(48
|
)
|
||||||||
Divestiture of noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(3
|
)
|
(3
|
)
|
||||||||
Other
|
—
|
|
—
|
|
8
|
|
—
|
|
—
|
|
8
|
|
—
|
|
8
|
|
||||||||
Comprehensive income (loss)
|
—
|
|
—
|
|
904
|
|
346
|
|
—
|
|
1,250
|
|
(4
|
)
|
1,246
|
|
||||||||
BALANCE, DECEMBER 31, 2016
|
449
|
|
6,189
|
|
4,818
|
|
(5,362
|
)
|
1,753
|
|
4,341
|
|
18
|
|
4,359
|
|
||||||||
Issuance of stock for various plans, net
|
—
|
|
42
|
|
—
|
|
—
|
|
(120
|
)
|
162
|
|
—
|
|
162
|
|
||||||||
Repurchase of stock
|
—
|
|
—
|
|
—
|
|
—
|
|
47
|
|
(47
|
)
|
—
|
|
(47
|
)
|
||||||||
Dividends
|
—
|
|
—
|
|
(782
|
)
|
—
|
|
—
|
|
(782
|
)
|
—
|
|
(782
|
)
|
||||||||
Transactions of equity method investees
|
—
|
|
(25
|
)
|
—
|
|
—
|
|
—
|
|
(25
|
)
|
—
|
|
(25
|
)
|
||||||||
Comprehensive income (loss)
|
—
|
|
—
|
|
2,144
|
|
729
|
|
—
|
|
2,873
|
|
1
|
|
2,874
|
|
||||||||
BALANCE, DECEMBER 31, 2017
|
$
|
449
|
|
$
|
6,206
|
|
$
|
6,180
|
|
$
|
(4,633
|
)
|
$
|
1,680
|
|
$
|
6,522
|
|
$
|
19
|
|
$
|
6,541
|
|
In millions, except per share amounts
|
2017
|
|
2016
|
|
2015
|
||||||
Earnings (loss) from continuing operations attributable to International Paper common shareholders
|
$
|
2,110
|
|
|
$
|
802
|
|
|
$
|
853
|
|
Weighted average common shares outstanding
|
412.7
|
|
|
411.1
|
|
|
417.4
|
|
|||
Effect of dilutive securities:
|
|
|
|
|
|
||||||
Restricted performance share plan
|
5.0
|
|
|
4.5
|
|
|
3.2
|
|
|||
Weighted average common shares outstanding – assuming dilution
|
417.7
|
|
|
415.6
|
|
|
420.6
|
|
|||
Basic earnings (loss) per share from continuing operations
|
$
|
5.11
|
|
|
$
|
1.95
|
|
|
$
|
2.05
|
|
Diluted earnings (loss) per share from continuing operations
|
$
|
5.05
|
|
|
$
|
1.93
|
|
|
$
|
2.03
|
|
In millions
|
2017
|
2016
|
2015
|
||||||
Defined Benefit Pension and Postretirement Adjustments
|
|
|
|
||||||
Balance at beginning of period
|
$
|
(3,072
|
)
|
$
|
(3,169
|
)
|
$
|
(3,134
|
)
|
Other comprehensive income (loss) before reclassifications
|
59
|
|
(448
|
)
|
(331
|
)
|
|||
Amounts reclassified from accumulated other comprehensive income
|
486
|
|
545
|
|
296
|
|
|||
Balance at end of period
|
(2,527
|
)
|
(3,072
|
)
|
(3,169
|
)
|
|||
Change in Cumulative Foreign Currency Translation Adjustments
|
|
|
|
||||||
Balance at beginning of period
|
(2,287
|
)
|
(2,549
|
)
|
(1,513
|
)
|
|||
Other comprehensive income (loss) before reclassifications
|
178
|
|
263
|
|
(1,002
|
)
|
|||
Amounts reclassified from accumulated other comprehensive income
|
(1
|
)
|
(3
|
)
|
(40
|
)
|
|||
Other Comprehensive Income (Loss) Attributable to Noncontrolling Interest
|
(1
|
)
|
2
|
|
6
|
|
|||
Balance at end of period
|
(2,111
|
)
|
(2,287
|
)
|
(2,549
|
)
|
|||
Net Gains and Losses on Cash Flow Hedging Derivatives
|
|
|
|
||||||
Balance at beginning of period
|
(3
|
)
|
10
|
|
1
|
|
|||
Other comprehensive income (loss) before reclassifications
|
15
|
|
(6
|
)
|
(3
|
)
|
|||
Amounts reclassified from accumulated other comprehensive income
|
(7
|
)
|
(7
|
)
|
12
|
|
|||
Balance at end of period
|
5
|
(3
|
)
|
10
|
|
||||
Total Accumulated Other Comprehensive Income (Loss) at End of Period
|
$
|
(4,633
|
)
|
$
|
(5,362
|
)
|
$
|
(5,708
|
)
|
|
Amount Reclassified from Accumulated Other Comprehensive Income
|
|
Location of Amount Reclassified from AOCI
|
||||||||
2017
|
2016
|
2015
|
|
||||||||
In millions
|
|
|
|
|
|
||||||
Defined benefit pension and postretirement items:
|
|
|
|
|
|
||||||
Prior-service costs
|
$
|
(33
|
)
|
$
|
(37
|
)
|
$
|
(33
|
)
|
(a)
|
Cost of products sold
|
Actuarial gains/(losses)
|
(733
|
)
|
(851
|
)
|
(449
|
)
|
(a)
|
Cost of products sold
|
|||
Total pre-tax amount
|
(766
|
)
|
(888
|
)
|
(482
|
)
|
|
|
|||
Tax (expense)/benefit
|
280
|
|
343
|
|
186
|
|
|
|
|||
Net of tax
|
(486
|
)
|
(545
|
)
|
(296
|
)
|
|
|
|||
Change in cumulative foreign currency translation adjustments:
|
|
|
|
|
|
||||||
Business acquisitions/divestiture
|
1
|
|
3
|
|
40
|
|
|
Net (gains) losses on sales and impairments of businesses
|
|||
Tax (expense)/benefit
|
—
|
|
—
|
|
—
|
|
|
|
|||
Net of tax
|
1
|
|
3
|
|
40
|
|
|
|
|||
Net gains and losses on cash flow hedging derivatives:
|
|
|
|
|
|
||||||
Foreign exchange contracts
|
9
|
|
10
|
|
(20
|
)
|
(b)
|
Cost of products sold
|
|||
Total pre-tax amount
|
9
|
|
10
|
|
(20
|
)
|
|
|
|||
Tax (expense)/benefit
|
(2
|
)
|
(3
|
)
|
8
|
|
|
|
|||
Net of tax
|
7
|
|
7
|
|
(12
|
)
|
|
|
|||
Total reclassifications for the period, net of tax
|
$
|
(478
|
)
|
$
|
(535
|
)
|
$
|
(268
|
)
|
|
|
In millions
|
|
2017
|
||
Early debt extinguishment costs (see Note 13)
|
|
$
|
83
|
|
Gain on sale of investment in ArborGen
|
|
(14
|
)
|
|
Other
|
|
(2
|
)
|
|
Total
|
|
$
|
67
|
|
In millions
|
|
2016
|
||
Early debt extinguishment costs (see Note 13)
|
|
$
|
29
|
|
India packaging evaluation write-off
|
|
17
|
|
|
Gain on sale of investment in Arizona Chemical
|
|
(8
|
)
|
|
Riegelwood mill conversion costs (a)
|
|
9
|
|
|
Turkey mill closure (b)
|
|
7
|
|
|
Total
|
|
$
|
54
|
|
(a)
|
Includes
$3 million
of accelerated depreciation,
$3 million
of inventory write-off charges and
$3 million
of other charges.
|
(b)
|
Includes
$4 million
of accelerated depreciation and
$3 million
of severance charges which is related to
85
employees.
|
In millions
|
|
2015
|
||
Early debt extinguishment costs (see Note 13)
|
|
$
|
207
|
|
Timber monetization restructuring
|
|
16
|
|
|
Legal liability reserve adjustment
|
|
15
|
|
|
Riegelwood mill conversion costs net of proceeds from the sale of Carolina Coated Bristols brand (a)
|
|
8
|
|
|
Other
|
|
6
|
|
|
Total
|
|
$
|
252
|
|
(a)
|
Includes
$5 million
of severance charges, which is related to
69
employees,
$24 million
of accelerated depreciation, sale proceeds of
$22 million
and
$1 million
of other charges.
|
In millions
|
June 30, 2017
|
||
Cash and temporary investments
|
$
|
1
|
|
Accounts and notes receivable
|
7
|
|
|
Inventory
|
3
|
|
|
Plants, properties and equipment
|
32
|
|
|
Goodwill
|
4
|
|
|
Other intangible assets
|
5
|
|
|
Deferred charges and other assets
|
4
|
|
|
Total assets acquired
|
56
|
|
|
Accounts payable and accrued liabilities
|
5
|
|
|
Long-term debt
|
11
|
|
|
Other long-term liabilities
|
2
|
|
|
Total liabilities assumed
|
18
|
|
|
Net assets acquired
|
$
|
38
|
|
In millions
|
December 1, 2016
|
|
|
Cash and temporary investments
|
$
|
12
|
|
Accounts and notes receivable
|
195
|
|
|
Inventory
|
238
|
|
|
Other current assets
|
11
|
|
|
Plants, properties and equipment
|
1,711
|
|
|
Goodwill
|
52
|
|
|
Other intangible assets
|
212
|
|
|
Deferred charges and other assets
|
6
|
|
|
Total assets acquired
|
2,437
|
|
|
Accounts payable and accrued liabilities
|
114
|
|
|
Long-term debt
|
104
|
|
|
Other long-term liabilities
|
28
|
|
|
Total liabilities assumed
|
246
|
|
|
Net assets acquired
|
$
|
2,191
|
|
In millions
|
|
Estimated
Fair Value |
Average
Remaining Useful Life |
||
Asset Class:
|
|
|
(at acquisition
date) |
||
Customer relationships and lists
|
|
$
|
95
|
|
24 years
|
Trade names, patents, trademarks and developed technology
|
|
113
|
|
8 years
|
|
Other
|
|
4
|
|
10 years
|
|
Total
|
|
$
|
212
|
|
|
In millions
|
June 30, 2016
|
||
Current assets
|
$
|
14
|
|
Equity method investments
|
14
|
|
|
Plants, properties and equipment
|
60
|
|
|
Other long-term assets
|
5
|
|
|
Total assets acquired
|
93
|
|
|
Short-term liabilities
|
9
|
|
|
Long-term liabilities
|
16
|
|
|
Total liabilities assumed
|
25
|
|
|
Net assets acquired
|
$
|
68
|
|
In millions
|
2017
|
|
2016
|
|
2015
|
|
|||
Net Sales
|
$
|
1,559
|
|
$
|
1,584
|
|
$
|
1,690
|
|
Costs and Expenses
|
|
|
|
||||||
Cost of products sold
|
1,179
|
|
1,095
|
|
1,155
|
|
|||
Selling and administrative expenses
|
110
|
|
91
|
|
106
|
|
|||
Depreciation, amortization and cost of timber harvested
|
80
|
|
103
|
|
127
|
|
|||
Distribution expenses
|
126
|
|
124
|
|
158
|
|
|||
Taxes other than payroll and income taxes
|
11
|
|
10
|
|
10
|
|
|||
Interest expense, net
|
1
|
|
—
|
|
—
|
|
|||
Earnings (Loss) Before Income Taxes and Equity Earnings
|
52
|
|
161
|
|
134
|
|
|||
Income tax provision (benefit)
|
18
|
|
54
|
|
49
|
|
|||
Discontinued Operations, Net of Taxes
|
$
|
34
|
|
$
|
107
|
|
$
|
85
|
|
In millions
|
2017
|
|
|
2016
|
|
||
Accounts and notes receivable
|
$
|
143
|
|
|
$
|
149
|
|
Inventories
|
185
|
|
|
205
|
|
||
Other current assets
|
3
|
|
|
7
|
|
||
Current assets held for sale
|
331
|
|
|
361
|
|
||
Plants, properties and equipment
|
1,021
|
|
|
987
|
|
||
Deferred charges and other assets
|
25
|
|
|
31
|
|
||
Long-term assets held for sale
|
1,046
|
|
(a)
|
1,018
|
|
||
Total Assets Held for Sale
|
$
|
1,377
|
|
|
$
|
1,379
|
|
Accounts payable
|
$
|
104
|
|
|
$
|
110
|
|
Accrued payroll and benefits
|
25
|
|
|
29
|
|
||
Other accrued liabilities
|
17
|
|
|
22
|
|
||
Current liabilities held for sale
|
146
|
|
|
161
|
|
||
Long-term debt
|
651
|
|
|
—
|
|
||
Other liabilities
|
8
|
|
|
8
|
|
||
Long-term liabilities held for sale
|
659
|
|
(a)
|
8
|
|
||
Total Liabilities Held for Sale
|
$
|
805
|
|
|
$
|
169
|
|
In millions at December 31
|
2017
|
2016
|
||||
Accounts and notes receivable:
|
|
|
||||
Trade
|
$
|
3,017
|
|
$
|
2,612
|
|
Other
|
270
|
|
240
|
|
||
Total
|
$
|
3,287
|
|
$
|
2,852
|
|
In millions at December 31
|
2017
|
2016
|
||||
Raw materials
|
$
|
274
|
|
$
|
286
|
|
Finished pulp, paper and packaging products
|
1,337
|
|
1,231
|
|
||
Operating supplies
|
615
|
|
616
|
|
||
Other
|
87
|
|
100
|
|
||
Inventories
|
$
|
2,313
|
|
$
|
2,233
|
|
In millions at December 31
|
2017
|
2016
|
||||
Pulp, paper and packaging facilities
|
$
|
32,523
|
|
$
|
30,943
|
|
Other properties and equipment
|
1,291
|
|
1,308
|
|
||
Gross cost
|
33,814
|
|
32,251
|
|
||
Less: Accumulated depreciation
|
20,549
|
|
19,248
|
|
||
Plants, properties and equipment, net
|
$
|
13,265
|
|
$
|
13,003
|
|
In millions
|
2017
|
2016
|
2015
|
||||||
Interest expense (a)
|
$
|
758
|
|
$
|
695
|
|
$
|
644
|
|
Interest income (a)
|
186
|
|
175
|
|
89
|
|
|||
Capitalized interest costs
|
25
|
|
28
|
|
25
|
|
(a)
|
Interest expense and interest income exclude approximately
$25 million
in 2015 related to investments in and borrowings from variable interest entities for which the Company has a legal right of offset (see
Note 12
).
|
In millions
|
Industrial
Packaging
|
|
Global Cellulose Fibers
|
|
Printing
Papers
|
|
Total
|
||||||||
Balance as of December 31, 2015
|
|
|
|
|
|
|
|
||||||||
Goodwill
|
$
|
3,384
|
|
|
$
|
—
|
|
|
$
|
2,124
|
|
|
$
|
5,508
|
|
Accumulated impairment losses
|
(296
|
)
|
|
—
|
|
|
(1,877
|
)
|
|
(2,173
|
)
|
||||
|
3,088
|
|
|
—
|
|
|
247
|
|
|
3,335
|
|
||||
Reclassifications and other (a)
|
(4
|
)
|
|
—
|
|
|
33
|
|
|
29
|
|
||||
Additions/reductions
|
(5
|
)
|
(b)
|
19
|
|
(c)
|
(14
|
)
|
(d)
|
—
|
|
||||
Impairment loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Balance as of December 31, 2016
|
|
|
|
|
|
|
|
||||||||
Goodwill
|
3,375
|
|
|
19
|
|
|
2,143
|
|
|
5,537
|
|
||||
Accumulated impairment losses
|
(296
|
)
|
|
—
|
|
|
(1,877
|
)
|
|
(2,173
|
)
|
||||
|
3,079
|
|
|
19
|
|
|
266
|
|
|
3,364
|
|
||||
Reclassifications and other (a)
|
3
|
|
|
—
|
|
|
8
|
|
|
11
|
|
||||
Additions/reductions
|
4
|
|
(e)
|
33
|
|
(c)
|
(1
|
)
|
|
36
|
|
||||
Impairment loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Balance as of December 31, 2017
|
|
|
|
|
|
|
|
||||||||
Goodwill
|
3,382
|
|
|
52
|
|
|
2,150
|
|
|
5,584
|
|
||||
Accumulated impairment losses
|
(296
|
)
|
|
—
|
|
|
(1,877
|
)
|
|
(2,173
|
)
|
||||
Total
|
$
|
3,086
|
|
|
$
|
52
|
|
|
$
|
273
|
|
|
$
|
3,411
|
|
(a)
|
Represents the effects of foreign currency translations and reclassifications.
|
(b)
|
Reflects a reduction from tax benefits generated by the deduction of goodwill amortization for tax purposes in the U.S.
|
(c)
|
Reflects the acquisition and purchase price adjustments of the newly acquired pulp business.
|
(d)
|
Reflects a reduction from tax benefits generated by the deduction of goodwill amortization for tax purposes in Brazil.
|
(e)
|
Reflects the acquisition of the newly acquired Moroccan box plant.
|
|
||||||||||||||||||
|
2017
|
2016
|
||||||||||||||||
In millions at December 31
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Net Intangible Assets
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Net Intangible Assets
|
||||||||||||
Customer relationships and lists
|
$
|
610
|
|
$
|
247
|
|
$
|
363
|
|
$
|
605
|
|
$
|
211
|
|
$
|
394
|
|
Non-compete agreements
|
72
|
|
72
|
|
—
|
|
69
|
|
64
|
|
5
|
|
||||||
Tradenames, patents and trademarks, and developed technology
|
172
|
|
72
|
|
100
|
|
173
|
|
56
|
|
117
|
|
||||||
Land and water rights
|
8
|
|
2
|
|
6
|
|
10
|
|
2
|
|
8
|
|
||||||
Software
|
24
|
|
23
|
|
1
|
|
21
|
|
20
|
|
1
|
|
||||||
Other
|
38
|
|
26
|
|
12
|
|
48
|
|
26
|
|
22
|
|
||||||
Total
|
$
|
924
|
|
$
|
442
|
|
$
|
482
|
|
$
|
926
|
|
$
|
379
|
|
$
|
547
|
|
In millions
|
2017
|
2016
|
2015
|
||||||
Amortization expense related to intangible assets
|
$
|
77
|
|
$
|
54
|
|
$
|
60
|
|
In millions
|
2017
|
2016
|
2015
|
||||||
Earnings (loss)
|
|
|
|
||||||
U.S.
|
$
|
297
|
|
$
|
411
|
|
$
|
1,013
|
|
Non-U.S.
|
551
|
|
384
|
|
119
|
|
|||
Earnings (loss) from continuing operations before income taxes and equity earnings
|
$
|
848
|
|
$
|
795
|
|
$
|
1,132
|
|
In millions
|
2017
|
2016
|
2015
|
||||||
Current tax provision (benefit)
|
|
|
|
||||||
U.S. federal
|
$
|
(73
|
)
|
$
|
(7
|
)
|
$
|
35
|
|
U.S. state and local
|
(23
|
)
|
(12
|
)
|
3
|
|
|||
Non-U.S.
|
112
|
|
76
|
|
111
|
|
|||
|
$
|
16
|
|
$
|
57
|
|
$
|
149
|
|
Deferred tax provision (benefit)
|
|
|
|
||||||
U.S. federal
|
$
|
(1,150
|
)
|
$
|
134
|
|
$
|
306
|
|
U.S. state and local
|
9
|
|
27
|
|
32
|
|
|||
Non-U.S.
|
40
|
|
(25
|
)
|
(70
|
)
|
|||
|
$
|
(1,101
|
)
|
$
|
136
|
|
$
|
268
|
|
Income tax provision (benefit)
|
$
|
(1,085
|
)
|
$
|
193
|
|
$
|
417
|
|
In millions
|
2017
|
2016
|
2015
|
||||||
Earnings (loss) from continuing
operations before income taxes and equity earnings |
$
|
848
|
|
$
|
795
|
|
$
|
1,132
|
|
Statutory U.S. income tax rate
|
35
|
%
|
35
|
%
|
35
|
%
|
|||
Tax expense (benefit) using statutory U.S. income tax rate
|
297
|
|
278
|
|
396
|
|
|||
State and local income taxes
|
(7
|
)
|
8
|
|
20
|
|
|||
Tax rate and permanent differences on non-U.S. earnings
|
(36
|
)
|
(26
|
)
|
(44
|
)
|
|||
Net U.S. tax on non-U.S. dividends
|
44
|
|
21
|
|
12
|
|
|||
Tax expense (benefit) on manufacturing activities
|
23
|
|
(10
|
)
|
(12
|
)
|
|||
Non-deductible business expenses
|
7
|
|
9
|
|
8
|
|
|||
Non-deductible impairments
|
—
|
|
—
|
|
109
|
|
|||
Sale of non-strategic assets
|
—
|
|
12
|
|
(61
|
)
|
|||
Tax audits
|
—
|
|
(14
|
)
|
—
|
|
|||
U.S. federal tax rate change
|
(1,451
|
)
|
—
|
|
—
|
|
|||
Foreign tax credits
|
(96
|
)
|
(11
|
)
|
—
|
|
|||
Subsidiary liquidation
|
—
|
|
(63
|
)
|
—
|
|
|||
Deemed repatriation, net of foreign tax credits
|
231
|
|
—
|
|
—
|
|
|||
General business and other tax credits
|
(86
|
)
|
(15
|
)
|
(15
|
)
|
|||
Other, net
|
(11
|
)
|
4
|
|
4
|
|
|||
Income tax provision (benefit)
|
$
|
(1,085
|
)
|
$
|
193
|
|
$
|
417
|
|
Effective income tax rate
|
(128
|
)%
|
24
|
%
|
37
|
%
|
In millions
|
2017
|
2016
|
||||
Deferred income tax assets:
|
|
|
||||
Postretirement benefit accruals
|
$
|
102
|
|
$
|
165
|
|
Pension obligations
|
516
|
|
1,344
|
|
||
Alternative minimum and other tax credits
|
416
|
|
270
|
|
||
Net operating and capital loss carryforwards
|
665
|
|
662
|
|
||
Compensation reserves
|
174
|
|
257
|
|
||
Other
|
139
|
|
251
|
|
||
Gross deferred income tax assets
|
2,012
|
|
2,949
|
|
||
Less: valuation allowance (a)
|
(429
|
)
|
(403
|
)
|
||
Net deferred income tax asset
|
$
|
1,583
|
|
$
|
2,546
|
|
Deferred income tax liabilities:
|
|
|
||||
Intangibles
|
$
|
(139
|
)
|
$
|
(231
|
)
|
Plants, properties and equipment
|
(2,000
|
)
|
(2,828
|
)
|
||
Forestlands, related installment sales, and investment in subsidiary
|
(1,454
|
)
|
(2,260
|
)
|
||
Gross deferred income tax liabilities
|
$
|
(3,593
|
)
|
$
|
(5,319
|
)
|
Net deferred income tax liability
|
$
|
(2,010
|
)
|
$
|
(2,773
|
)
|
In millions
|
2017
|
2016
|
2015
|
||||||
Balance at January 1
|
$
|
(98
|
)
|
$
|
(150
|
)
|
$
|
(158
|
)
|
(Additions) reductions based on tax positions related to current year
|
(54
|
)
|
(4
|
)
|
(6
|
)
|
|||
Additions for tax positions of prior years
|
(40
|
)
|
(3
|
)
|
(6
|
)
|
|||
Reductions for tax positions of prior years
|
4
|
|
33
|
|
7
|
|
|||
Settlements
|
6
|
|
19
|
|
2
|
|
|||
Expiration of statutes of
limitations |
1
|
|
5
|
|
4
|
|
|||
Currency translation adjustment
|
(7
|
)
|
2
|
|
7
|
|
|||
Balance at December 31
|
$
|
(188
|
)
|
$
|
(98
|
)
|
$
|
(150
|
)
|
In millions
|
2018
Through 2027 |
2028
Through 2037 |
Indefinite
|
Total
|
||||||||
U.S. federal and non-U.S. NOLs
|
$
|
65
|
|
$
|
2
|
|
$
|
432
|
|
$
|
499
|
|
State taxing jurisdiction NOLs
|
147
|
|
68
|
|
—
|
|
215
|
|
||||
U.S. federal, non-
U.S. and state tax credit carryforwards |
199
|
|
18
|
|
269
|
|
486
|
|
||||
U.S. federal and state capital loss carryforwards
|
2
|
|
—
|
|
—
|
|
2
|
|
||||
Total
|
$
|
413
|
|
$
|
88
|
|
$
|
701
|
|
$
|
1,202
|
|
In millions
|
2018
|
2019
|
2020
|
2021
|
2022
|
Thereafter
|
||||||||||||
Lease obligations
|
$
|
130
|
|
$
|
102
|
|
$
|
77
|
|
$
|
53
|
|
$
|
37
|
|
$
|
141
|
|
•
|
In March 2016, the Company and other PRPs received a special notice letter from the EPA (i) inviting participation in implementing a remedy for a portion of the site, and (ii) demanding reimbursement of EPA past costs totaling
$37 million
, including
$19 million
in past costs previously demanded by the EPA. The Company responded to the special notice letter. In December 2016, EPA issued a unilateral administrative order to the Company and other PRPs to perform the remedy. The unilateral administrative order has not yet become effective and the Company is evaluating its response.
|
•
|
In April 2016, the EPA issued a separate unilateral administrative order to the Company and certain other PRPs for a time-critical removal action (TCRA) of PCB-contaminated sediments from a different portion of the site. The Company responded to the unilateral administrative order and agreed along with two other parties to comply with the order subject to its sufficient cause defenses.
|
•
|
In October 2016, the Company and another PRP received a special notice letter from the EPA inviting participation in the remedial design component of the landfill remedy for the Allied Paper Mill. The record of decision establishing the final landfill remedy for the Allied Paper Mill was issued by the EPA in September 2016. The Company responded to the Allied Paper Mill special notice letter in late December 2016.
|
In millions
|
2017
|
2016
|
2015
|
||||||
Revenue (a)
|
$
|
95
|
|
$
|
95
|
|
$
|
43
|
|
Expense (a)
|
128
|
|
128
|
|
81
|
|
|||
Cash receipts (b)
|
95
|
|
77
|
|
21
|
|
|||
Cash payments (c)
|
128
|
|
98
|
|
71
|
|
(a)
|
The net expense related to the Company’s interest in the Entities is included in the accompanying consolidated statement of operations, as International Paper has and intends to effect its legal right to offset as discussed above. After formation of the 2015 Financing Entities, the revenue and
|
(b)
|
The cash receipts are equity distributions from the Entities to International Paper prior to the formation of the 2015 Financing Entities. After formation of the 2015 Financing Entities, cash receipts are interest received on the Financial assets of special purpose entities.
|
(c)
|
The cash payments are interest payments on the associated debt obligations discussed above. After formation of the 2015 Financing Entities, the payments represent interest paid on Nonrecourse financial liabilities of special purpose entities.
|
In millions
|
2017
|
2016
|
2015
|
||||||
Revenue (a)
|
$
|
49
|
|
$
|
37
|
|
$
|
27
|
|
Expense (b)
|
48
|
|
37
|
|
27
|
|
|||
Cash receipts (c)
|
28
|
|
15
|
|
7
|
|
|||
Cash payments (d)
|
39
|
|
27
|
|
18
|
|
(a)
|
The revenue is included in Interest expense, net in the accompanying consolidated statement of operations and includes approximately
$19 million
for the years ended December 31, 2017, 2016 and 2015, respectively, of accretion income for the amortization of the purchase accounting adjustment on the Financial assets of special purpose entities.
|
In millions
|
2017
|
2016
|
2015
|
||||||
Debt reductions (a)
|
$
|
993
|
|
$
|
266
|
|
$
|
2,151
|
|
Pre-tax early debt extinguishment costs (b)
|
83
|
|
29
|
|
207
|
|
(a)
|
Reductions related to notes with interest rates ranging from
1.57%
to
9.38%
with original maturities from
2015
to
2030
for the years ended December 31,
2017
,
2016
and
2015
. Includes the
$630 million
payment for a portion of the Special Purpose Entity Liability for the year ended
December 31, 2015
(see
Note 12 Variable Interest Entities
).
|
(b)
|
Amounts are included in Restructuring and other charges in the accompanying consolidated statements of operations.
|
In millions at December 31
|
2017
|
2016
|
||||
9 3/8% note – due 2019
|
$
|
—
|
|
$
|
295
|
|
8.7% note – due 2038
|
264
|
|
264
|
|
||
7.95% debenture – due 2018
|
—
|
|
382
|
|
||
7.5% note – due 2021
|
409
|
|
598
|
|
||
7.3% note – due 2039
|
721
|
|
721
|
|
||
6 7/8% notes – due 2023 – 2029
|
131
|
|
131
|
|
||
6.65% note – due 2037
|
4
|
|
4
|
|
||
6 5/8% note – due 2018
|
—
|
|
72
|
|
||
6.4% to 7.75% debentures due 2025 – 2027
|
143
|
|
142
|
|
||
6.0% note – due 2041
|
585
|
|
585
|
|
||
5.00% to 5.15% notes – due 2035 – 2046
|
1,281
|
|
1,280
|
|
||
4.8% note – due 2044
|
796
|
|
796
|
|
||
4.75% note – due 2022
|
817
|
|
810
|
|
||
3.00% to 4.40% notes – due 2024 – 2048
|
4,775
|
|
3,786
|
|
||
Floating rate notes – due 2017 – 2025 (a)
|
650
|
|
763
|
|
||
Environmental and industrial development
bonds – due 2017 – 2035 (b) |
585
|
|
681
|
|
||
Other (c)
|
(4
|
)
|
4
|
|
||
Total (d)
|
11,157
|
|
11,314
|
|
||
Less: current maturities
|
311
|
|
239
|
|
||
Long-term debt
|
$
|
10,846
|
|
$
|
11,075
|
|
(a)
|
The weighted average interest rate on these notes was
2.6%
in
2017
and
2.2%
in
2016
.
|
(b)
|
The weighted average interest rate on these bonds was
6.0%
in
2017
and
5.9%
in
2016
.
|
(c)
|
Includes
$70 million
and
$69 million
of debt issuance costs as of December 31, 2017 and 2016, respectively.
|
(d)
|
The fair market value was approximately
$12.3 billion
at December 31, 2017 and
$12.0 billion
at
December 31, 2016
.
|
In millions
|
December 31, 2017
|
December 31, 2016
|
||
Derivatives in Cash Flow Hedging Relationships:
|
|
|
||
Foreign exchange contracts (a)
|
329
|
|
275
|
|
Derivatives Not Designated as Hedging Instruments:
|
|
|
||
Electricity contract
|
13
|
|
6
|
|
Foreign exchange contracts
|
10
|
|
24
|
|
(a)
|
These contracts had maturities of
two years
or less as of
December 31, 2017
.
|
|
Gain (Loss)
Recognized in AOCI on Derivatives
(Effective Portion)
|
||||||||
In millions
|
2017
|
2016
|
2015
|
||||||
Foreign exchange contracts
|
$
|
15
|
|
$
|
4
|
|
$
|
(3
|
)
|
Interest rate contracts
|
—
|
|
(10
|
)
|
—
|
|
|||
Total
|
$
|
15
|
|
$
|
(6
|
)
|
$
|
(3
|
)
|
|
Gain (Loss)
Reclassified from AOCI into Income (Effective Portion) |
|
Location of Gain
(Loss) Reclassified from AOCI into Income (Effective Portion) |
||||||||||
In millions
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|
|||
Derivatives in Cash Flow Hedging Relationships:
|
|
|
|
|
|
|
|
||||||
Foreign exchange contracts
|
$
|
8
|
|
|
$
|
7
|
|
|
$
|
(12
|
)
|
|
Cost of products sold
|
Interest rate contracts
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
Interest expense, net
|
|||
Total
|
$
|
7
|
|
|
$
|
7
|
|
|
$
|
(12
|
)
|
|
|
|
Gain (Loss)
Recognized
in Income
|
|
|
Location of Gain (Loss)
in Consolidated Statement of
Operations
|
||||||||||||
In millions
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|
||||||
Derivatives in Fair Value Hedging Relationships:
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest rate contracts
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
3
|
|
|
|
Interest expense, net
|
Debt
|
—
|
|
|
|
—
|
|
|
|
(3
|
)
|
|
|
Interest expense, net
|
|||
Total
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
|
Derivatives Not Designated as Hedging Instruments:
|
|
|
|
|
|
|
|
|
|
|
||||||
Electricity Contracts
|
$
|
(10
|
)
|
|
|
$
|
—
|
|
|
|
$
|
(7
|
)
|
|
|
Cost of products sold
|
Foreign exchange contracts
|
—
|
|
|
|
—
|
|
|
|
(4
|
)
|
|
|
Cost of products sold
|
|||
Interest rate contracts
|
1
|
|
(a)
|
|
5
|
|
(b)
|
|
13
|
|
(c)
|
|
Interest expense, net
|
|||
Total
|
$
|
(9
|
)
|
|
|
$
|
5
|
|
|
|
$
|
2
|
|
|
|
|
(a)
|
Excluding gain of
$1 million
related to debt reduction recorded to Restructuring and other charges.
|
(b)
|
Excluding gain of
$2 million
related to debt reduction recorded to Restructuring and other charges.
|
(c)
|
Excluding gain of
$3 million
related to debt reduction recorded to Restructuring and other charges.
|
|
Assets
|
|
Liabilities
|
|
||||||||||||
In millions
|
December 31, 2017
|
|
December 31, 2016
|
|
December 31, 2017
|
|
December 31, 2016
|
|
||||||||
Derivatives designated as hedging instruments
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts – cash flow
|
$
|
11
|
|
(a)
|
$
|
3
|
|
(b)
|
$
|
1
|
|
(c)
|
$
|
4
|
|
(c)
|
Total derivatives designated as hedging instruments
|
11
|
|
|
3
|
|
|
1
|
|
|
4
|
|
|
||||
Derivatives not designated as hedging instruments
|
|
|
|
|
|
|
|
|
||||||||
Electricity contract
|
—
|
|
|
—
|
|
|
8
|
|
(d)
|
2
|
|
(c)
|
||||
Total derivatives not designated as hedging instruments
|
—
|
|
|
—
|
|
|
8
|
|
|
2
|
|
|
||||
Total derivatives
|
$
|
11
|
|
|
$
|
3
|
|
|
$
|
9
|
|
|
$
|
6
|
|
|
(a)
|
Includes
$10 million
recorded in Other current assets and
$1 million
recorded in Deferred charges and other assets in the accompanying consolidated balance sheet.
|
(b)
|
Included in Other current assets in the accompanying consolidated balance sheet.
|
(c)
|
Included in Other accrued liabilities in the accompanying consolidated balance sheet.
|
(d)
|
Includes
$5 million
recorded in Other accrued liabilities and
$3 million
recorded in Other liabilities in the accompanying consolidated balance sheet.
|
|
Common Stock
|
|||
In thousands
|
Issued
|
Treasury
|
||
Balance at January 1, 2015
|
448,854
|
|
28,734
|
|
Issuance of stock for various plans, net
|
62
|
|
(4,230
|
)
|
Repurchase of stock
|
—
|
|
12,272
|
|
Balance at December 31, 2015
|
448,916
|
|
36,776
|
|
Issuance of stock for various plans, net
|
—
|
|
(2,745
|
)
|
Repurchase of stock
|
—
|
|
3,640
|
|
Balance at December 31, 2016
|
448,916
|
|
37,671
|
|
Issuance of stock for various plans, net
|
—
|
|
(2,577
|
)
|
Repurchase of stock
|
—
|
|
881
|
|
Balance at December 31, 2017
|
448,916
|
|
35,975
|
|
|
2017
|
2016
|
||||||||||
In millions
|
U.S.
Plans |
Non-
U.S. Plans |
U.S.
Plans |
Non-
U.S. Plans |
||||||||
Change in projected benefit obligation:
|
|
|
|
|
||||||||
Benefit obligation, January 1
|
$
|
13,683
|
|
$
|
219
|
|
$
|
14,438
|
|
$
|
204
|
|
Service cost
|
160
|
|
4
|
|
158
|
|
4
|
|
||||
Interest cost
|
536
|
|
9
|
|
580
|
|
9
|
|
||||
Settlements
|
(1,295
|
)
|
(4
|
)
|
(1,222
|
)
|
(2
|
)
|
||||
Actuarial loss (gain)
|
913
|
|
2
|
|
495
|
|
35
|
|
||||
Acquisitions
|
—
|
|
5
|
|
1
|
|
—
|
|
||||
Divestitures
|
33
|
|
—
|
|
—
|
|
—
|
|
||||
Plan amendments
|
3
|
|
—
|
|
—
|
|
(1
|
)
|
||||
Benefits paid
|
(769
|
)
|
(8
|
)
|
(767
|
)
|
(9
|
)
|
||||
Effect of foreign currency exchange rate movements
|
—
|
|
20
|
|
—
|
|
(21
|
)
|
||||
Benefit obligation, December 31
|
$
|
13,264
|
|
$
|
247
|
|
$
|
13,683
|
|
$
|
219
|
|
Change in plan assets:
|
|
|
|
|
||||||||
Fair value of plan assets, January 1
|
$
|
10,312
|
|
$
|
153
|
|
$
|
10,923
|
|
$
|
155
|
|
Actual return on plan assets
|
1,830
|
|
10
|
|
607
|
|
17
|
|
||||
Company contributions
|
1,290
|
|
10
|
|
771
|
|
8
|
|
||||
Benefits paid
|
(769
|
)
|
(8
|
)
|
(767
|
)
|
(9
|
)
|
||||
Settlements
|
(1,295
|
)
|
(4
|
)
|
(1,222
|
)
|
(2
|
)
|
||||
Other
|
—
|
|
3
|
|
—
|
|
—
|
|
||||
Effect of foreign currency exchange rate movements
|
—
|
|
12
|
|
—
|
|
(16
|
)
|
||||
Fair value of plan assets, December 31
|
$
|
11,368
|
|
$
|
176
|
|
$
|
10,312
|
|
$
|
153
|
|
Funded status, December 31
|
$
|
(1,896
|
)
|
$
|
(71
|
)
|
$
|
(3,371
|
)
|
$
|
(66
|
)
|
Amounts recognized in the consolidated balance sheet:
|
|
|
|
|
||||||||
Non-current asset
|
$
|
—
|
|
$
|
5
|
|
$
|
—
|
|
$
|
6
|
|
Current liability
|
(30
|
)
|
(3
|
)
|
(40
|
)
|
(3
|
)
|
||||
Non-current liability
|
(1,866
|
)
|
(73
|
)
|
(3,331
|
)
|
(69
|
)
|
||||
|
$
|
(1,896
|
)
|
$
|
(71
|
)
|
$
|
(3,371
|
)
|
$
|
(66
|
)
|
Amounts recognized in accumulated other comprehensive income under ASC 715 (pre-tax):
|
|
|
|
|
||||||||
Prior service cost
|
$
|
88
|
|
$
|
(1
|
)
|
$
|
125
|
|
$
|
—
|
|
Net actuarial loss
|
3,893
|
|
67
|
|
4,757
|
|
61
|
|
||||
|
$
|
3,981
|
|
$
|
66
|
|
$
|
4,882
|
|
$
|
61
|
|
In millions
|
U.S.
Plans |
Non-
U.S. Plans |
||||
Current year actuarial (gain) loss
|
$
|
(143
|
)
|
$
|
2
|
|
Amortization of actuarial loss
|
(339
|
)
|
(2
|
)
|
||
Current year prior service cost
|
3
|
|
—
|
|
||
Amortization of prior service cost
|
(28
|
)
|
—
|
|
||
Settlements
|
(383
|
)
|
(1
|
)
|
||
Curtailments
|
(11
|
)
|
—
|
|
||
Effect of foreign currency exchange rate movements
|
—
|
|
6
|
|
||
|
$
|
(901
|
)
|
$
|
5
|
|
|
2017
|
2016
|
||||||||||
In millions
|
U.S.
Plans |
Non-U.S.
Plans |
U.S.
Plans |
Non-U.S.
Plans |
||||||||
Projected benefit obligation
|
$
|
13,264
|
|
$
|
215
|
|
$
|
13,683
|
|
$
|
190
|
|
Accumulated benefit obligation
|
13,161
|
|
200
|
|
13,535
|
|
177
|
|
||||
Fair value of plan assets
|
11,368
|
|
139
|
|
10,312
|
|
118
|
|
|
2017
|
2016
|
2015
|
|||||||||||||||
In millions
|
U.S.
Plans |
Non-
U.S. Plans |
U.S.
Plans |
Non-
U.S. Plans |
U.S.
Plans |
Non-
U.S. Plans |
||||||||||||
Service cost
|
$
|
160
|
|
$
|
4
|
|
$
|
158
|
|
$
|
4
|
|
$
|
161
|
|
$
|
6
|
|
Interest cost
|
536
|
|
9
|
|
580
|
|
9
|
|
597
|
|
10
|
|
||||||
Expected return on plan assets
|
(774
|
)
|
(11
|
)
|
(815
|
)
|
(10
|
)
|
(783
|
)
|
(11
|
)
|
||||||
Actuarial loss / (gain)
|
339
|
|
2
|
|
400
|
|
1
|
|
428
|
|
1
|
|
||||||
Amortization of prior service cost
|
28
|
|
—
|
|
41
|
|
—
|
|
43
|
|
—
|
|
||||||
Curtailment loss / (gain) (a)
|
23
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||
Settlement loss
|
383
|
|
1
|
|
445
|
|
—
|
|
15
|
|
—
|
|
||||||
Special termination benefits (a)
|
22
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||
Net periodic pension expense
|
$
|
717
|
|
$
|
5
|
|
$
|
809
|
|
$
|
4
|
|
$
|
461
|
|
$
|
6
|
|
|
2017
|
2016
|
2015
|
|||||||||
|
U.S.
Plans |
Non-
U.S. Plans |
U.S.
Plans |
Non-
U.S. Plans |
U.S.
Plans |
Non-
U.S. Plans |
||||||
Actuarial assumptions used to determine benefit obligations as of December 31:
|
|
|
|
|
|
|
||||||
Discount rate
|
3.60
|
%
|
3.59
|
%
|
4.10
|
%
|
3.88
|
%
|
4.40
|
%
|
4.64
|
%
|
Rate of compensation increase
|
3.75
|
%
|
4.06
|
%
|
3.75
|
%
|
4.20
|
%
|
3.75
|
%
|
4.12
|
%
|
Actuarial assumptions used to determine net periodic pension cost for years ended December 31:
|
|
|
|
|
|
|
||||||
Discount rate (a)
|
4.03
|
%
|
3.88
|
%
|
4.05
|
%
|
4.72
|
%
|
4.10
|
%
|
4.72
|
%
|
Expected long-term rate of return on plan assets
|
7.50
|
%
|
6.73
|
%
|
7.75
|
%
|
6.55
|
%
|
7.75
|
%
|
6.64
|
%
|
Rate of compensation increase
|
3.75
|
%
|
4.20
|
%
|
3.75
|
%
|
4.03
|
%
|
3.75
|
%
|
4.03
|
%
|
In millions
|
2018
|
||
Expense/(Income):
|
|
||
Discount rate
|
$
|
35
|
|
Expected long-term rate of return on plan assets
|
27
|
|
|
Rate of compensation increase
|
(1
|
)
|
Asset Class
|
2017
|
2016
|
Target
Allocations |
||
Equity accounts
|
49
|
%
|
51
|
%
|
42% - 53%
|
Fixed income accounts
|
36
|
%
|
27
|
%
|
32% - 44%
|
Real estate accounts
|
10
|
%
|
10
|
%
|
7% - 13%
|
Other
|
5
|
%
|
12
|
%
|
3% - 8%
|
Total
|
100
|
%
|
100
|
%
|
|
Other Investments at December 31, 2017
|
||||||||
Investment
|
Fair Value
|
Unfunded Commitments
|
Redemption Frequency
|
Remediation Notice Period
|
||||
Equities - domestic
|
$
|
708
|
|
$
|
—
|
|
Daily to monthly
|
1-5 days
|
Equities - international
|
866
|
|
—
|
|
Daily to monthly
|
1-5 days
|
||
Corporate bonds
|
66
|
|
—
|
|
Daily to monthly
|
1-5 days
|
||
Other fixed income
|
232
|
|
—
|
|
Daily to monthly
|
1-5 days
|
||
Hedge funds
|
927
|
|
—
|
|
Daily to annually
|
1 - 100 days
|
||
Private equity
|
481
|
|
262
|
|
None
|
None
|
||
Real estate
|
1,106
|
|
121
|
|
Quarterly
|
45 - 60 days
|
||
Total
|
$
|
4,386
|
|
$
|
383
|
|
|
|
Other Investments at December 31, 2016
|
||||||||
Investment
|
Fair Value
|
Unfunded Commitments
|
Redemption Frequency
|
Remediation Notice Period
|
||||
Hedge funds
|
$
|
891
|
|
$
|
—
|
|
Daily to annually
|
1 - 100 days
|
Private equity
|
472
|
|
226
|
|
None
|
None
|
||
Real estate
|
1,015
|
|
224
|
|
Quarterly
|
45 - 60 days
|
||
Risk parity funds
|
402
|
|
—
|
|
Monthly
|
5 - 15 days
|
||
Total
|
$
|
2,780
|
|
$
|
450
|
|
|
|
In millions
|
Mortgage backed securities
|
Other
fixed income |
Derivatives
|
Total
|
||||||||
Beginning balance at December 31, 2015
|
$
|
—
|
|
$
|
10
|
|
$
|
(20
|
)
|
$
|
(10
|
)
|
Actual return on plan assets:
|
|
|
|
|
||||||||
Relating to assets still held at the reporting date
|
—
|
|
1
|
|
(66
|
)
|
(65
|
)
|
||||
Relating to assets sold during the period
|
—
|
|
—
|
|
(24
|
)
|
(24
|
)
|
||||
Purchases, sales and settlements
|
1
|
|
—
|
|
39
|
|
40
|
|
||||
Transfers in and/or out of Level 3
|
—
|
|
—
|
|
—
|
|
—
|
|
||||
Ending balance at December 31, 2016
|
$
|
1
|
|
$
|
11
|
|
$
|
(71
|
)
|
$
|
(59
|
)
|
Actual return on plan assets:
|
|
|
|
|
||||||||
Relating to assets still held at the reporting date
|
—
|
|
1
|
|
94
|
|
95
|
|
||||
Relating to assets sold during the period
|
—
|
|
—
|
|
(23
|
)
|
(23
|
)
|
||||
Purchases, sales and settlements
|
—
|
|
—
|
|
16
|
|
16
|
|
||||
Transfers in and/or out of Level 3
|
—
|
|
—
|
|
—
|
|
—
|
|
||||
Ending balance at December 31, 2017
|
$
|
1
|
|
$
|
12
|
|
$
|
16
|
|
$
|
29
|
|
In millions
|
|
||
2018
|
$
|
708
|
|
2019
|
709
|
|
|
2020
|
718
|
|
|
2021
|
727
|
|
|
2022
|
735
|
|
|
2023-2027
|
3,763
|
|
In millions
|
2017
|
2016
|
2015
|
|||||||||||||||
|
U.S.
Plans |
Non-
U.S. Plans |
U.S.
Plans |
Non-
U.S. Plans |
U.S.
Plans |
Non-
U.S. Plans |
||||||||||||
Service cost
|
$
|
1
|
|
$
|
—
|
|
$
|
1
|
|
$
|
—
|
|
$
|
1
|
|
$
|
1
|
|
Interest cost
|
11
|
|
2
|
|
11
|
|
3
|
|
11
|
|
5
|
|
||||||
Actuarial loss
|
8
|
|
3
|
|
5
|
|
2
|
|
6
|
|
1
|
|
||||||
Amortization of prior service credits
|
(3
|
)
|
(4
|
)
|
(4
|
)
|
(4
|
)
|
(10
|
)
|
(2
|
)
|
||||||
Net postretirement (benefit) expense
|
$
|
17
|
|
$
|
1
|
|
$
|
13
|
|
$
|
1
|
|
$
|
8
|
|
$
|
5
|
|
|
2017
|
2016
|
||||||
|
U.S.
Plans |
Non-
U.S. Plans |
U.S.
Plans |
Non-
U.S. Plans |
||||
Discount rate
|
3.50
|
%
|
9.38
|
%
|
4.00
|
%
|
10.53
|
%
|
Health care cost trend rate assumed for next year
|
6.50
|
%
|
10.27
|
%
|
6.50
|
%
|
10.90
|
%
|
Rate that the cost trend rate gradually declines to
|
5.00
|
%
|
5.15
|
%
|
5.00
|
%
|
5.81
|
%
|
Year that the rate reaches the rate it is assumed to remain
|
2022
|
|
2028
|
|
2022
|
|
2027
|
|
In millions
|
2017
|
2016
|
||||||||||
|
U.S.
Plans |
Non-
U.S. Plans |
U.S.
Plans |
Non-
U.S. Plans |
||||||||
Change in projected benefit obligation:
|
|
|
|
|
||||||||
Benefit obligation, January 1
|
$
|
280
|
|
$
|
23
|
|
$
|
275
|
|
$
|
45
|
|
Service cost
|
1
|
|
—
|
|
1
|
|
—
|
|
||||
Interest cost
|
11
|
|
2
|
|
11
|
|
3
|
|
||||
Participants’ contributions
|
5
|
|
—
|
|
5
|
|
—
|
|
||||
Actuarial (gain) loss
|
14
|
|
2
|
|
31
|
|
5
|
|
||||
Plan amendments
|
—
|
|
—
|
|
—
|
|
(35
|
)
|
||||
Benefits paid
|
(42
|
)
|
(2
|
)
|
(44
|
)
|
(1
|
)
|
||||
Less: Federal subsidy
|
1
|
|
—
|
|
1
|
|
—
|
|
||||
Currency Impact
|
—
|
|
—
|
|
—
|
|
6
|
|
||||
Benefit obligation, December 31
|
$
|
270
|
|
$
|
25
|
|
$
|
280
|
|
$
|
23
|
|
Change in plan assets:
|
|
|
|
|
||||||||
Fair value of plan assets, January 1
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Company contributions
|
37
|
|
2
|
|
39
|
|
1
|
|
||||
Participants’ contributions
|
5
|
|
—
|
|
5
|
|
—
|
|
||||
Benefits paid
|
(42
|
)
|
(2
|
)
|
(44
|
)
|
(1
|
)
|
||||
Fair value of plan assets, December 31
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Funded status, December 31
|
$
|
(270
|
)
|
$
|
(25
|
)
|
$
|
(280
|
)
|
$
|
(23
|
)
|
Amounts recognized in the consolidated balance sheet under ASC 715:
|
|
|
|
|
||||||||
Current liability
|
$
|
(28
|
)
|
$
|
(1
|
)
|
$
|
(29
|
)
|
$
|
(2
|
)
|
Non-current liability
|
(242
|
)
|
(24
|
)
|
(251
|
)
|
(21
|
)
|
||||
|
$
|
(270
|
)
|
$
|
(25
|
)
|
$
|
(280
|
)
|
$
|
(23
|
)
|
Amounts recognized in accumulated other comprehensive income under ASC 715 (pre-tax):
|
|
|
|
|
||||||||
Net actuarial loss (gain)
|
$
|
74
|
|
$
|
19
|
|
$
|
68
|
|
$
|
21
|
|
Prior service credit
|
(6
|
)
|
(30
|
)
|
(8
|
)
|
(34
|
)
|
||||
|
$
|
68
|
|
$
|
(11
|
)
|
$
|
60
|
|
$
|
(13
|
)
|
In millions
|
U.S.
Plans |
Non-
U.S. Plans |
||||
Current year actuarial loss
|
$
|
14
|
|
$
|
1
|
|
Amortization of actuarial (loss) gain
|
(8
|
)
|
(3
|
)
|
||
Current year prior service cost
|
—
|
|
—
|
|
||
Amortization of prior service credit
|
2
|
|
4
|
|
||
Currency impact
|
—
|
|
—
|
|
||
|
$
|
8
|
|
$
|
2
|
|
In millions
|
Benefit
Payments |
Subsidy Receipts
|
Benefit
Payments |
||||||
|
U.S.
Plans |
U.S.
Plans |
Non-
U.S. Plans |
||||||
2018
|
$
|
29
|
|
$
|
1
|
|
$
|
1
|
|
2019
|
27
|
|
1
|
|
1
|
|
|||
2020
|
25
|
|
1
|
|
1
|
|
|||
2021
|
24
|
|
1
|
|
—
|
|
|||
2022
|
22
|
|
1
|
|
—
|
|
|||
2023 – 2027
|
91
|
|
5
|
|
4
|
|
|
Twelve Months Ended December 31, 2017
|
Expected volatility
|
22.75%-23.39%
|
Risk-free interest rate
|
1.10%-1.47%
|
|
Share/Units
|
Weighted
Average
Grant Date
Fair Value
|
|||
Outstanding at December 31, 2014
|
7,275,934
|
|
|
$34.98
|
|
Granted
|
1,863,623
|
|
53.25
|
|
|
Shares issued
|
(2,959,160
|
)
|
37.09
|
|
|
Forfeited
|
(322,664
|
)
|
53.97
|
|
|
Outstanding at December 31, 2015
|
5,857,733
|
|
38.69
|
|
|
Granted
|
2,617,982
|
|
37.26
|
|
|
Shares issued
|
(2,316,085
|
)
|
43.82
|
|
|
Forfeited
|
(209,500
|
)
|
43.61
|
|
|
Outstanding at December 31, 2016
|
5,950,130
|
|
35.89
|
|
|
Granted
|
2,163,912
|
|
51.78
|
|
|
Shares issued
|
(1,876,134
|
)
|
51.00
|
|
|
Forfeited
|
(438,024
|
)
|
45.96
|
|
|
Outstanding at December 31, 2017
|
5,799,884
|
|
|
$36.17
|
|
|
Shares
|
Weighted
Average
Grant Date
Fair Value
|
|||
Outstanding at December 31, 2014
|
114,599
|
|
|
$47.03
|
|
Granted
|
36,300
|
|
50.06
|
|
|
Shares issued
|
(27,365
|
)
|
45.35
|
|
|
Forfeited
|
(3,166
|
)
|
50.04
|
|
|
Outstanding at December 31, 2015
|
120,368
|
|
48.24
|
|
|
Granted
|
117,881
|
|
42.81
|
|
|
Shares issued
|
(59,418
|
)
|
47.14
|
|
|
Forfeited
|
(9,500
|
)
|
39.36
|
|
|
Outstanding at December 31, 2016
|
169,331
|
|
45.34
|
|
|
Granted
|
63,319
|
|
57.24
|
|
|
Shares issued
|
(59,650
|
)
|
47.90
|
|
|
Forfeited
|
(6,700
|
)
|
53.53
|
|
|
Outstanding at December 31, 2017
|
166,300
|
|
|
$48.63
|
|
In millions
|
2017
|
2016
|
2015
|
||||||
Total stock-based compensation expense (included in selling and administrative expense)
|
$
|
147
|
|
$
|
124
|
|
$
|
107
|
|
Income tax benefits related to stock-based compensation
|
45
|
|
34
|
|
88
|
|
In millions
|
2017
|
|
2016
|
||||
Current assets
|
$
|
689
|
|
|
$
|
774
|
|
Noncurrent assets
|
1,696
|
|
|
1,351
|
|
||
Current liabilities
|
1,039
|
|
|
402
|
|
||
Noncurrent liabilities
|
972
|
|
|
1,426
|
|
||
Noncontrolling interests
|
6
|
|
|
22
|
|
In millions
|
2017
|
|
2016
|
|
2015
|
||||||
Net sales
|
$
|
2,150
|
|
|
$
|
1,927
|
|
|
$
|
1,931
|
|
Gross profit
|
1,047
|
|
|
957
|
|
|
971
|
|
|||
Income from continuing operations
|
379
|
|
|
419
|
|
|
254
|
|
|||
Net income attributable to Ilim
|
362
|
|
|
391
|
|
|
237
|
|
In millions
|
2017
|
|
2016
|
|
2015
|
||||||
Industrial Packaging
|
$
|
15,077
|
|
|
$
|
14,226
|
|
|
$
|
14,559
|
|
Global Cellulose Fibers
|
2,551
|
|
|
1,092
|
|
|
975
|
|
|||
Printing Papers
|
4,157
|
|
|
4,058
|
|
|
4,056
|
|
|||
Corporate and Intersegment Sales (a)
|
(42
|
)
|
|
119
|
|
|
1,085
|
|
|||
Net Sales
|
$
|
21,743
|
|
|
$
|
19,495
|
|
|
$
|
20,675
|
|
In millions
|
2017
|
|
2016
|
|
2015
|
||||||
Industrial Packaging
|
$
|
1,547
|
|
|
$
|
1,741
|
|
|
$
|
1,938
|
|
Global Cellulose Fibers
|
65
|
|
|
(179
|
)
|
|
68
|
|
|||
Printing Papers
|
457
|
|
|
540
|
|
|
465
|
|
|||
Business Segment Operating Profit
|
2,069
|
|
|
2,102
|
|
|
2,471
|
|
|||
|
|
|
|
|
|
||||||
Earnings (loss) from continuing operations before income taxes and equity earnings
|
848
|
|
|
795
|
|
|
1,132
|
|
|||
Interest expense, net
|
572
|
|
|
520
|
|
|
555
|
|
|||
Noncontrolling interests / equity earnings adjustment (b)
|
(2
|
)
|
|
1
|
|
|
8
|
|
|||
Corporate items, net (a)
|
91
|
|
|
121
|
|
|
96
|
|
|||
Corporate special items, net (a)
|
76
|
|
|
55
|
|
|
422
|
|
|||
Non-operating pension expense
|
484
|
|
|
610
|
|
|
258
|
|
|||
|
$
|
2,069
|
|
|
$
|
2,102
|
|
|
$
|
2,471
|
|
In millions
|
2017
|
|
2016
|
|
2015
|
||||||
Industrial Packaging
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
—
|
|
Global Cellulose Fibers
|
—
|
|
|
—
|
|
|
—
|
|
|||
Printing Papers
|
—
|
|
|
—
|
|
|
—
|
|
|||
Corporate (c)
|
67
|
|
|
47
|
|
|
252
|
|
|||
Restructuring and Other Charges
|
$
|
67
|
|
|
$
|
54
|
|
|
$
|
252
|
|
In millions
|
2017
|
|
2016
|
||||
Industrial Packaging
|
$
|
15,354
|
|
|
$
|
14,707
|
|
Global Cellulose Fibers
|
3,913
|
|
|
3,845
|
|
||
Printing Papers
|
4,054
|
|
|
3,965
|
|
||
Corporate and other (d)
|
10,582
|
|
|
10,576
|
|
||
Assets
|
$
|
33,903
|
|
|
$
|
33,093
|
|
In millions
|
2017
|
|
2016
|
|
2015
|
||||||
Industrial Packaging
|
$
|
836
|
|
|
$
|
832
|
|
|
$
|
871
|
|
Global Cellulose Fibers
|
188
|
|
|
174
|
|
|
129
|
|
|||
Printing Papers
|
235
|
|
|
215
|
|
|
232
|
|
|||
Subtotal
|
1,259
|
|
|
1,221
|
|
|
1,232
|
|
|||
Corporate and other (e)
|
21
|
|
|
20
|
|
|
78
|
|
|||
Capital Spending
|
$
|
1,280
|
|
|
$
|
1,241
|
|
|
$
|
1,310
|
|
In millions
|
2017
|
|
2016
|
|
2015
|
||||||
Industrial Packaging
|
$
|
781
|
|
|
$
|
730
|
|
|
$
|
739
|
|
Global Cellulose Fibers
|
261
|
|
|
108
|
|
|
73
|
|
|||
Printing Papers
|
245
|
|
|
232
|
|
|
234
|
|
|||
Corporate (g)
|
56
|
|
|
54
|
|
|
121
|
|
|||
Depreciation and Amortization
|
$
|
1,343
|
|
|
$
|
1,124
|
|
|
$
|
1,167
|
|
In millions
|
2017
|
|
2016
|
|
2015
|
||||||
Industrial Packaging
|
$
|
14,946
|
|
|
$
|
14,142
|
|
|
$
|
14,496
|
|
Global Cellulose Fibers
|
2,524
|
|
|
1,090
|
|
|
986
|
|
|||
Printing Papers
|
4,142
|
|
|
4,062
|
|
|
4,082
|
|
|||
Other (h)
|
131
|
|
|
201
|
|
|
1,111
|
|
|||
Net Sales
|
$
|
21,743
|
|
|
$
|
19,495
|
|
|
$
|
20,675
|
|
In millions
|
2017
|
|
2016
|
|
2015
|
||||||
United States (j)
|
$
|
16,247
|
|
|
$
|
14,363
|
|
|
$
|
14,875
|
|
EMEA
|
3,129
|
|
|
2,852
|
|
|
2,759
|
|
|||
Pacific Rim and Asia
|
625
|
|
|
699
|
|
|
1,501
|
|
|||
Americas, other than U.S.
|
1,742
|
|
|
1,581
|
|
|
1,540
|
|
|||
Net Sales
|
$
|
21,743
|
|
|
$
|
19,495
|
|
|
$
|
20,675
|
|
In millions
|
2017
|
|
2016
|
||||
United States
|
$
|
10,545
|
|
|
$
|
10,532
|
|
EMEA
|
1,302
|
|
|
1,009
|
|
||
Pacific Rim and Asia
|
236
|
|
|
246
|
|
||
Americas, other than U.S.
|
1,630
|
|
|
1,672
|
|
||
Long-Lived Assets
|
$
|
13,713
|
|
|
$
|
13,459
|
|
(a)
|
Includes sales of
$15 million
in 2017,
$42 million
in 2016 and
$931 million
in 2015, operating profits (losses) of
$0 million
in 2017,
$(2) million
in 2016 and
$(62) million
in 2015, and corporate special items expense of
$9 million
in 2017,
$9 million
in 2016 and
$184 million
in 2015, from previously divested businesses.
|
(b)
|
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-owned. The pre-tax noncontrolling interests and equity earnings for these subsidiaries is added here to present consolidated earnings from continuing operations before income taxes and equity earnings.
|
(c)
|
Includes corporate expenses and expenses of
$9 million
in 2017,
$9 million
in 2016 and
$10 million
in 2015, from previously divested businesses.
|
(d)
|
Includes corporate assets, assets of businesses held for sale and assets of previously divested businesses.
|
(e)
|
Includes corporate assets and assets of previously divested businesses of
$0 million
in 2017,
$1 million
in 2016 and
$26 million
in 2015.
|
(f)
|
Excludes accelerated depreciation related to the closure and/or repurposing of mills.
|
(g)
|
Includes
$1 million
in 2017,
$2 million
in 2016 and
$74 million
in 2015 from previously divested businesses.
|
(h)
|
Includes
$15 million
in 2017,
$42 million
in 2016, and
$930 million
in 2015 from previously divested businesses.
|
(i)
|
Net sales are attributed to countries based on the location of the seller.
|
(j)
|
Export sales to unaffiliated customers were
$2.9 billion
in
2017
,
$1.8 billion
in
2016
and
$1.8 billion
in
2015
.
|
(k)
|
Long-Lived Assets includes Forestlands and Plants, Properties and Equipment, net.
|
In millions, except per share amounts and stock prices
|
1st
Quarter |
|
2nd
Quarter |
|
3rd
Quarter |
|
4th Quarter
|
|
Year
|
|
||||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
5,132
|
|
|
$
|
5,383
|
|
|
$
|
5,517
|
|
|
$
|
5,711
|
|
|
$
|
21,743
|
|
|
Earnings (loss) from continuing operations before income taxes and equity earnings
|
217
|
|
(a)
|
(23
|
)
|
(a)
|
457
|
|
(a)
|
197
|
|
(a)
|
848
|
|
(a)
|
|||||
Gain (loss) from discontinued operations
|
17
|
|
(b)
|
(4
|
)
|
(b)
|
29
|
|
(b)
|
(8
|
)
|
(b)
|
34
|
|
(b)
|
|||||
Net earnings (loss) attributable to International Paper Company
|
209
|
|
(a-c)
|
80
|
|
(a-c)
|
395
|
|
(a-c)
|
1,460
|
|
(a-c)
|
2,144
|
|
(a-c)
|
|||||
Basic earnings (loss) per share attributable to International Paper Company common shareholders:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings (loss) from continuing operations
|
$
|
0.47
|
|
(a)
|
$
|
0.20
|
|
(a)
|
$
|
0.89
|
|
(a)
|
$
|
3.56
|
|
(a)
|
$
|
5.11
|
|
(a)
|
Gain (loss) from discontinued operations
|
0.04
|
|
(b)
|
(0.01
|
)
|
(b)
|
0.07
|
|
(b)
|
(0.02
|
)
|
(b)
|
0.08
|
|
(b)
|
|||||
Net earnings (loss)
|
0.51
|
|
(a-c)
|
0.19
|
|
(a-c)
|
0.96
|
|
(a-c)
|
3.54
|
|
(a-c)
|
5.19
|
|
(a-c)
|
|||||
Diluted earnings (loss) per share attributable to International Paper Company common shareholders:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings (loss) from continuing operations
|
0.46
|
|
(a)
|
0.20
|
|
(a)
|
0.88
|
|
(a)
|
3.52
|
|
(a)
|
5.05
|
|
(a)
|
|||||
Gain (loss) from discontinued operations
|
0.04
|
|
(b)
|
(0.01
|
)
|
(b)
|
0.07
|
|
(b)
|
(0.02
|
)
|
(b)
|
0.08
|
|
(b)
|
|||||
Net earnings (loss)
|
0.50
|
|
(a-c)
|
0.19
|
|
(a-c)
|
0.95
|
|
(a-c)
|
3.50
|
|
(a-c)
|
5.13
|
|
(a-c)
|
|||||
Dividends per share of common stock
|
0.4625
|
|
|
0.4625
|
|
|
0.4625
|
|
|
0.4750
|
|
|
1.8625
|
|
|
|||||
Common stock prices
|
|
|
|
|
|
|
|
|
|
|
||||||||||
High
|
$
|
58.86
|
|
|
$
|
57.24
|
|
|
$
|
58.95
|
|
|
$
|
58.96
|
|
|
$
|
58.96
|
|
|
Low
|
49.62
|
|
|
49.60
|
|
|
51.28
|
|
|
53.10
|
|
|
49.60
|
|
|
|||||
2016
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
4,717
|
|
|
$
|
4,914
|
|
|
$
|
4,864
|
|
|
$
|
5,000
|
|
|
$
|
19,495
|
|
|
Earnings (loss) from continuing operations before income taxes and equity earnings
|
307
|
|
(d)
|
(76
|
)
|
(d)
|
320
|
|
(d)
|
244
|
|
(d)
|
795
|
|
(d)
|
|||||
Gain (loss) from discontinued operations
|
4
|
|
(e)
|
40
|
|
(e)
|
34
|
|
(e)
|
24
|
|
(e)
|
102
|
|
(e)
|
|||||
Net earnings (loss) attributable to International Paper Company
|
334
|
|
(d-f)
|
40
|
|
(d-f)
|
312
|
|
(d-f)
|
218
|
|
(d-f)
|
904
|
|
(d-f)
|
|||||
Basic earnings (loss) per share attributable to International Paper Company common shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Earnings (loss) from continuing operations
|
$
|
0.80
|
|
(d)
|
$
|
0.00
|
|
(d)
|
$
|
0.68
|
|
(d)
|
$
|
0.47
|
|
(d)
|
$
|
1.95
|
|
(d)
|
Gain (loss) from discontinued operations
|
0.01
|
|
(e)
|
0.10
|
|
(e)
|
0.08
|
|
(e)
|
0.06
|
|
(e)
|
0.25
|
|
(e)
|
|||||
Net earnings (loss)
|
0.81
|
|
(d-f)
|
0.10
|
|
(d-f)
|
0.76
|
|
(d-f)
|
0.53
|
|
(d-f)
|
2.20
|
|
(d-f)
|
|||||
Diluted earnings (loss) per share attributable to International Paper Company common shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Earnings (loss) from continuing operations
|
0.80
|
|
(d)
|
0.00
|
|
(d)
|
0.67
|
|
(d)
|
0.47
|
|
(d)
|
1.93
|
|
(d)
|
|||||
Gain (loss) from discontinued operations
|
0.01
|
|
(e)
|
0.10
|
|
(e)
|
0.08
|
|
(e)
|
0.06
|
|
(e)
|
0.25
|
|
(e)
|
|||||
Net earnings (loss)
|
0.81
|
|
(d-f)
|
0.10
|
|
(d-f)
|
0.75
|
|
(d-f)
|
0.53
|
|
(d-f)
|
2.18
|
|
(d-f)
|
|||||
Dividends per share of common stock
|
0.4400
|
|
|
0.4400
|
|
|
0.4400
|
|
|
0.4625
|
|
|
1.7825
|
|
|
|||||
Common stock prices
|
|
|
|
|
|
|
|
|
|
|
||||||||||
High
|
$
|
42.09
|
|
|
$
|
44.60
|
|
|
$
|
49.90
|
|
|
$
|
54.68
|
|
|
$
|
54.68
|
|
|
Low
|
32.50
|
|
|
39.24
|
|
|
41.08
|
|
|
43.55
|
|
|
32.50
|
|
|
(a)
|
Includes the following pre-tax charges (gains):
|
|
|
2017
|
||||||||||||||
In millions
|
|
Q1
|
|
|
Q2
|
|
Q3
|
|
Q4
|
|||||||
Gain on sale of investment in ArborGen
|
|
$
|
—
|
|
|
$
|
(14
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Costs associated with the pulp business acquired in 2016
|
|
4
|
|
|
5
|
|
|
6
|
|
|
18
|
|
||||
Amortization of Weyerhaeuser inventory fair value step-up
|
|
14
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Holmen bargain purchase gain
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Abandoned property removal
|
|
2
|
|
|
5
|
|
|
7
|
|
|
6
|
|
||||
Kleen Products settlement
|
|
—
|
|
|
354
|
|
|
—
|
|
|
—
|
|
||||
Asia Foodservice sale
|
|
—
|
|
|
9
|
|
|
—
|
|
|
—
|
|
||||
Brazil Packaging wood supply accelerated amortization
|
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
||||
Debt extinguishment costs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
83
|
|
||||
Interest income on income tax refund claims
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(1
|
)
|
||||
Other items
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
||||
Non-operating pension expense
|
|
31
|
|
|
34
|
|
|
33
|
|
|
386
|
|
||||
Total
|
|
$
|
45
|
|
|
$
|
387
|
|
|
$
|
56
|
|
|
$
|
492
|
|
|
|
2017
|
||||||||||||||
In millions
|
|
Q1
|
|
|
Q2
|
|
Q3
|
|
Q4
|
|||||||
North American Consumer Packaging transaction costs
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17
|
|
Non-operating pension expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45
|
|
||||
Total
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
62
|
|
|
|
2017
|
|
||||||||||||||
In millions
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
||||||||
International legal entity restructuring
|
|
$
|
15
|
|
|
$
|
—
|
|
|
$
|
19
|
|
|
$
|
—
|
|
|
Income tax refund claims
|
|
—
|
|
|
(85
|
)
|
|
—
|
|
|
(28
|
)
|
|
||||
Cash pension contribution
|
|
—
|
|
|
38
|
|
|
—
|
|
|
—
|
|
|
||||
International Tax Law Change
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
||||
Tax benefit of Tax Cuts and Jobs Act
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,222
|
)
|
|
||||
Tax impact of other special items
|
|
(8
|
)
|
|
(137
|
)
|
|
(8
|
)
|
|
(41
|
)
|
|
||||
Total
|
|
$
|
7
|
|
|
$
|
(184
|
)
|
|
$
|
11
|
|
|
$
|
(1,282
|
)
|
|
|
|
2016
|
||||||||||||||
In millions
|
|
Q1
|
|
|
Q2
|
|
Q3
|
|
Q4
|
|||||||
Riegelwood mill conversion costs
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
India Packaging evaluation write-off
|
|
—
|
|
|
—
|
|
|
17
|
|
|
—
|
|
||||
Early debt extinguishment costs
|
|
—
|
|
|
—
|
|
|
29
|
|
|
—
|
|
||||
Write-off of certain regulatory pre-engineering costs
|
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
||||
Costs associated with the newly acquired pulp business
|
|
—
|
|
|
5
|
|
|
7
|
|
|
19
|
|
||||
Asia Box impairment / restructuring
|
|
37
|
|
|
28
|
|
|
5
|
|
|
—
|
|
||||
Gain on sale of investment in Arizona Chemical
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Turkey mill closure
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
||||
Amortization of Weyerhaeuser inventory fair value step-up
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19
|
|
||||
Non-operating pension expense
|
|
44
|
|
|
487
|
|
|
42
|
|
|
37
|
|
||||
Total
|
|
$
|
82
|
|
|
$
|
520
|
|
|
$
|
108
|
|
|
$
|
82
|
|
|
|
2016
|
||||||||||||||
In millions
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
||||||||
Cash pension contribution
|
|
$
|
—
|
|
|
$
|
23
|
|
|
$
|
—
|
|
|
$
|
—
|
|
U.S. Federal audit
|
|
(14
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Brazil goodwill
|
|
(57
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
International legal entity restructuring
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
||||
Luxembourg tax rate change
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31
|
|
||||
Tax impact of other special items
|
|
(3
|
)
|
|
(10
|
)
|
|
(24
|
)
|
|
(14
|
)
|
||||
Total
|
|
$
|
(74
|
)
|
|
$
|
7
|
|
|
$
|
(24
|
)
|
|
$
|
17
|
|
•
|
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
|
•
|
provide reasonable assurance that transactions are recorded as necessary to allow for the preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors;
|
•
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our consolidated financial statements; and
|
•
|
provide reasonable assurance as to the detection of fraud.
|
(1)
|
Financial Statements – See Item 8. Financial Statements and Supplementary Data.
|
(2)
|
Financial Statement Schedules – The following additional financial data should be read in conjunction with the consolidated financial statements in Item 8. Schedules not included with this additional financial data have been omitted because they are not applicable, or the required information is shown in the consolidated financial statements or the notes thereto.
|
Consolidated Schedule: II-Valuation and Qualifying Accounts.
|
89
|
(2.1
|
)
|
|
|
|
|
(2.2
|
)
|
|
|
|
|
(3.1
|
)
|
|
|
|
|
(3.2
|
)
|
|
|
|
(4.1
|
)
|
|
|
|
|
(4.2
|
)
|
|
|
|
|
(4.3
|
)
|
|
|
|
|
(4.4
|
)
|
|
|
|
|
(4.5
|
)
|
|
|
|
|
(4.6
|
)
|
|
|
|
|
(4.7
|
)
|
|
(4.8
|
)
|
|
|
|
(4.9
|
)
|
|
|
|
|
(4.10
|
)
|
|
|
|
|
(4.11
|
)
|
In accordance with Item 601 (b) (4) (iii) (A) of Regulation S-K, certain instruments respecting long-term debt of the Company have been omitted but will be furnished to the Commission upon request.
|
|
|
|
(10.1
|
)
|
|
|
|
|
(10.2
|
)
|
|
|
|
|
(10.3
|
)
|
|
|
|
|
(10.4
|
)
|
|
|
|
|
(10.5
|
)
|
|
|
|
|
(10.6
|
)
|
|
|
|
|
(10.7
|
)
|
|
|
|
|
(10.8
|
)
|
|
|
|
|
(10.9
|
)
|
|
|
|
(10.10
|
)
|
|
|
|
|
(10.11
|
)
|
|
|
|
|
(10.12
|
)
|
|
|
|
|
(10.13
|
)
|
|
|
|
|
(10.14
|
)
|
|
|
|
|
(10.15
|
)
|
|
|
|
|
(10.16
|
)
|
|
|
|
|
(10.17
|
)
|
|
|
|
(10.18
|
)
|
|
|
|
|
(10.19
|
)
|
|
|
|
|
(10.20
|
)
|
|
|
|
|
(10.21
|
)
|
|
|
|
|
(10.22
|
)
|
|
|
|
|
(10.23
|
)
|
|
|
|
|
(10.24
|
)
|
|
|
|
|
|
|
(10.25
|
)
|
|
|
|
|
(10.26
|
)
|
|
|
|
|
(11
|
)
|
|
|
|
|
(12
|
)
|
|
|
|
|
(21
|
)
|
|
|
|
|
(23.1
|
)
|
|
|
|
|
(23.2
|
)
|
|
|
|
|
(24
|
)
|
|
|
|
|
(31.1
|
)
|
|
|
|
|
(31.2
|
)
|
|
|
|
|
(32
|
)
|
|
|
|
|
(99.1
|
)
|
|
|
|
|
|
(101.INS)
|
XBRL Instance Document *
|
|
|
(101.SCH)
|
XBRL Taxonomy Extension Schema *
|
|
|
(101.CAL)
|
XBRL Taxonomy Extension Calculation Linkbase *
|
|
|
(101.DEF)
|
XBRL Taxonomy Extension Definition Linkbase *
|
|
|
(101.LAB)
|
XBRL Taxonomy Extension Label Linkbase *
|
|
|
(101.PRE)
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XBRL Extension Presentation Linkbase *
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For the Year Ended December 31, 2017
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||||||||||||||||
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Balance at
Beginning of Period |
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Additions
Charged to Earnings |
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Additions
Charged to Other Accounts |
|
Deductions
from Reserves |
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Balance at
End of Period |
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Description
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Reserves Applied Against Specific Assets Shown on Balance Sheet:
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Doubtful accounts – current
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$
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70
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$
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5
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$
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—
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(2)(a)
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$
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73
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Restructuring reserves
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6
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—
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—
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(4)(b)
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2
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For the Year Ended December 31, 2016
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Balance at
Beginning of Period |
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Additions
Charged to Earnings |
|
Additions
Charged to Other Accounts |
|
Deductions
from Reserves |
|
Balance at
End of Period |
||||||||
Description
|
|
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|
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||||||||
Reserves Applied Against Specific Assets Shown on Balance Sheet:
|
|
|
|
|
|
|
|
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||||||||
Doubtful accounts – current
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$
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70
|
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$
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9
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$
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—
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(9)(a)
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$
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70
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Restructuring reserves
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10
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|
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3
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—
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(7)(b)
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6
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|
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For the Year Ended December 31, 2015
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||||||||||||||||
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Balance at
Beginning of Period |
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Additions
Charged to Earnings |
|
Additions
Charged to Other Accounts |
|
Deductions
from Reserves |
|
Balance at
End of Period |
||||||||
Description
|
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||||||||
Reserves Applied Against Specific Assets Shown on Balance Sheet:
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||||||||
Doubtful accounts – current
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$
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82
|
|
|
$
|
11
|
|
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$
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—
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(23)(a)
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$
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70
|
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Restructuring reserves
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16
|
|
|
5
|
|
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—
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(11)(b)
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10
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(a)
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Includes write-offs, less recoveries, of accounts determined to be uncollectible and other adjustments.
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(b)
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Includes payments and deductions for reversals of previously established reserves that were no longer required.
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February 22, 2018
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By:
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/
S
/ S
HARON
R. R
YAN
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Sharon R. Ryan
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Senior Vice President, General Counsel
and Corporate Secretary
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Signature
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Title
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Date
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/
S
/ M
ARK
S. S
UTTON
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Chairman of the Board & Chief Executive Officer and Director
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February 22, 2018
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Mark S. Sutton
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/
S
/ D
AVID
J. B
RONCZEK
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Director
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February 22, 2018
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David J. Bronczek
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/
S
/ W
ILLIAM
J. B
URNS
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Director
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February 22, 2018
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Willliam J. Burns
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/
S
/ C
HRISTOPHER
M. C
ONNOR
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Director
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February 22, 2018
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Christopher M. Connor
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S
/ A
HMET
C. D
ORDUNCU
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Director
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February 22, 2018
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Ahmet C. Dorduncu
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/
S
/ I
LENE
S. G
ORDON
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Director
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February 22, 2018
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Ilene S. Gordon
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/
S
/ J
ACQUELINE
C. H
INMAN
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Director
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February 22, 2018
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Jacqueline C. Hinman
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/
S
/ J
AY
L. J
OHNSON
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Director
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February 22, 2018
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Jay L. Johnson
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/s/ C
LINTON
A. L
EWIS, JR.
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Director
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February 22, 2018
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Clinton A. Lewis, Jr.
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/S/ K
ATHRYN
D. S
ULLIVAN
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Director
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February 22, 2018
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Kathryn D. Sullivan
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/
S
/ J
OHN
L. T
OWNSEND
III
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Director
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February 22, 2018
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John L. Townsend III
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/
S
/ J. S
TEVEN
W
HISLER
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Director
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February 22, 2018
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J. Steven Whisler
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/
S
/ R
AY
G. Y
OUNG
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Director
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February 22, 2018
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Ray G. Young
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/
S
/ G
LENN
R. L
ANDAU
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Senior Vice President and Chief Financial Officer
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February 22, 2018
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Glenn R. Landau
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/
S
/ V
INCENT
P. B
ONNOT
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Vice President – Finance and Controller
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February 22, 2018
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Vincent P. Bonnot
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PRINTING PAPERS
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Savannah, Georgia
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Tracy, California
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Cayuga, Indiana
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Golden, Colorado
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Uncoated Papers
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Cedar Rapids, Iowa
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Wheat Ridge, Colorado
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U.S.:
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Henderson, Kentucky
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Putnam, Connecticut
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Selma, Alabama (Riverdale Mill)
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Maysville, Kentucky
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Orlando, Florida
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Ticonderoga, New York
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Bogalusa, Louisiana
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Plant City, Florida
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Eastover, South Carolina
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Campti, Louisiana
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Tampa, Florida leased
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Georgetown, South Carolina
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Mansfield, Louisiana
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Columbus, Georgia
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Sumter, South Carolina
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Vicksburg, Mississippi
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Forest Park, Georgia
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Valliant, Oklahoma
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Griffin, Georgia
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International:
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Springfield, Oregon
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Kennesaw, Georgia leased
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Luiz Antônio, São Paulo, Brazil
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Orange, Texas
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Lithonia, Georgia
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Mogi Guacu, São Paulo, Brazil
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Savannah, Georgia
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Três Lagoas, Mato Grosso do Sul, Brazil
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International:
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Stone Mountain, Georgia leased
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Saillat, France
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Franco da Rocha, São Paulo, Brazil
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Tucker, Georgia
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Kadiam, India
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Nova Campina, São Paulo, Brazil
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Aurora, Illinois (3 locations)
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Rajahmundry, India
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Paulinia, São Paulo, Brazil
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Bedford Park, Illinois (2 locations) 1 leased
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Kwidzyn, Poland
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Veracruz, Mexico
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Belleville, Illinois
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Svetogorsk, Russia
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Kenitra, Morocco
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Carol Stream, Illinois
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Madrid, Spain
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Des Plaines, Illinois
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GLOBAL CELLULOSE FIBERS
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Lincoln, Illinois
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Corrugated Container
|
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Montgomery, Illinois
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Pulp
|
|
U.S.:
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Northlake, Illinois
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U.S.:
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Bay Minette, Alabama
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Rockford, Illinois
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Cantonment, Florida (Pensacola Mill)
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Decatur, Alabama
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Butler, Indiana
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Flint River, Georgia
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Dothan, Alabama leased
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Crawfordsville, Indiana
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Port Wentworth, Georgia
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Huntsville, Alabama
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Fort Wayne, Indiana
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Columbus, Mississippi
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Conway, Arkansas
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Hammond, Indiana
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New Bern, North Carolina
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Fort Smith, Arkansas (2 locations)
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Indianapolis, Indiana (2 locations)
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Riegelwood, North Carolina
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Russellville, Arkansas (2 locations)
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Saint Anthony, Indiana
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Eastover, South Carolina
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Tolleson, Arizona
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Tipton, Indiana
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Georgetown, South Carolina
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Yuma, Arizona
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Cedar Rapids, Iowa
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Franklin, Virginia
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Anaheim, California
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Waterloo, Iowa
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Buena Park, California leased
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Garden City, Kansas
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International:
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Camarillo, California
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Kansas City, Kansas
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Grand Prairie, Albert, Canada
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Carson, California
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Bowling Green, Kentucky
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Saillat, France
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Cerritos, California leased
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Lexington, Kentucky
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Gdansk, Poland
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Compton, California
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Louisville, Kentucky
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Kwidzyn, Poland
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Elk Grove, California
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Walton, Kentucky
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Svetogorsk, Russia
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Exeter, California
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Bogalusa, Louisiana
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Gilroy, California (2 locations)
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Lafayette, Louisiana
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INDUSTRIAL PACKAGING
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Los Angeles, California
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Shreveport, Louisiana
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Modesto, California
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Springhill, Louisiana
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Containerboard
|
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Ontario, California
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Auburn, Maine
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U.S.:
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Salinas, California
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Three Rivers, Michigan
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Pine Hill, Alabama
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Sanger, California
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Arden Hills, Minnesota
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Prattville, Alabama
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San Leandro, California leased
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Austin, Minnesota
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Cantonment, Florida (Pensacola Mill)
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Santa Fe Springs, California (2 locations)
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Fridley, Minnesota
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Rome, Georgia
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Stockton, California
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Minneapolis, Minnesota leased
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Shakopee, Minnesota
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Laurens, South Carolina
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Silao, Mexico
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White Bear Lake, Minnesota
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Lexington, South Carolina
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Villa Nicolas Romero, Mexico
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Houston, Mississippi
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Ashland City, Tennessee leased
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Zapopan, Mexico
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Jackson, Mississippi
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Cleveland, Tennessee
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Agadir, Morocco
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Magnolia, Mississippi leased
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Elizabethton, Tennessee leased
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Casablanca, Morocco
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Olive Branch, Mississippi
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Morristown, Tennessee
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Kenitra, Morocco
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Fenton, Missouri
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Murfreesboro, Tennessee
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Tangier, Morocco
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Kansas City, Missouri
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Amarillo, Texas
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Almeria, Spain
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Maryland Heights, Missouri
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Carrollton, Texas (2 locations)
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Barcelona, Spain
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North Kansas City, Missouri leased
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Edinburg, Texas
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Bilbao, Spain
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St. Joseph, Missouri
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El Paso, Texas
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Gandia, Spain
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St. Louis, Missouri
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Ft. Worth, Texas leased
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Las Palmas, Spain
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Omaha, Nebraska
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Grand Prairie, Texas
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Madrid, Spain
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Barrington, New Jersey
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Hidalgo, Texas
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Tenerife, Spain
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Bellmawr, New Jersey
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McAllen, Texas
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Adana, Turkey
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Milltown, New Jersey
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San Antonio, Texas (2 locations)
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Bursa. Turkey
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Spotswood, New Jersey
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Sealy, Texas
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Corlu, Turkey
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Thorofare, New Jersey
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Waxahachie, Texas
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Corum, Turkey
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Binghamton, New York
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Lynchburg, Virginia
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Gebze, Turkey
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Buffalo, New York
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Petersburg, Virginia
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Izmir, Turkey
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Rochester, New York
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Richmond, Virginia
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Scotia, New York
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Moses Lake, Washington
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Recycling
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Utica, New York
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Olympia, Washington
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U.S.:
|
Charlotte, North Carolina (2 locations) 1 leased
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Yakima, Washington
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Phoenix, Arizona
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Lumberton, North Carolina
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Fond du Lac, Wisconsin
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Fremont, California
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Manson, North Carolina
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Manitowoc, Wisconsin
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Norwalk, California
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Newton, North Carolina
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West Sacramento, California
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Statesville, North Carolina
|
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International:
|
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Itasca, Illinois
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Byesville, Ohio
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Manaus, Amazonas, Brazil
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Des Moines, Iowa
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Delaware, Ohio
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Paulinia, São Paulo, Brazil
|
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Wichita, Kansas
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Eaton, Ohio
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Rio Verde, Goias, Brazil
|
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Roseville, Minnesota
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Madison, Ohio
|
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Suzano, São Paulo, Brazil
|
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Omaha, Nebraska
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Marion, Ohio
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Rancagua, Chile
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Charlotte, North Carolina
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Marysville, Ohio leased
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Arles, France
|
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Beaverton, Oregon
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Middletown, Ohio
|
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Chalon-sur-Saone, France
|
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Springfield, Oregon leased
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Mt. Vernon, Ohio
|
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Creil, France
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Carrollton, Texas
|
Newark, Ohio
|
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LePuy, France (Espaly Box Plant)
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Salt Lake City, Utah
|
Streetsboro, Ohio
|
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Mortagne, France
|
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Richmond, Virginia
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Wooster, Ohio
|
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Guadeloupe, French West Indies
|
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Kent, Washington
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Oklahoma City, Oklahoma
|
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Bellusco, Italy
|
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Beaverton, Oregon (3 locations)
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Catania, Italy
|
|
International:
|
Hillsboro, Oregon
|
|
Pomezia, Italy
|
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Monterrey, Mexico leased
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Portland, Oregon
|
|
San Felice, Italy
|
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Xalapa, Veracruz, Mexico leased
|
Salem, Oregon leased
|
|
Apodaco (Monterrey), Mexico leased
|
|
|
Biglerville, Pennsylvania (2 locations)
|
|
Ixtaczoquitlan, Mexico
|
|
Bags
|
Eighty-four, Pennsylvania
|
|
Juarez, Mexico leased
|
|
U.S.:
|
Hazleton, Pennsylvania
|
|
Los Mochis, Mexico
|
|
Buena Park, California
|
Kennett Square, Pennsylvania
|
|
Puebla, Mexico leased
|
|
Beaverton, Oregon
|
Lancaster, Pennsylvania
|
|
Reynosa, Mexico
|
|
Grand Prairie, Texas
|
Mount Carmel, Pennsylvania
|
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San Jose Iturbide, Mexico
|
|
|
Georgetown, South Carolina
|
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Santa Catarina, Mexico
|
|
|
(in thousands of short tons except as noted)
|
U.S.
|
|
EMEA
|
|
Americas,
other than U.S. |
|
India
|
|
Total
|
|||||
Industrial Packaging
|
|
|
|
|
|
|
|
|
|
|||||
Containerboard
(a)
|
13,488
|
|
|
45
|
|
|
363
|
|
|
—
|
|
|
13,896
|
|
Coated Paperboard
|
—
|
|
|
431
|
|
|
—
|
|
|
—
|
|
|
431
|
|
Total Industrial Packaging
|
13,488
|
|
|
476
|
|
|
363
|
|
|
—
|
|
|
14,327
|
|
Global Cellulose Fibers
|
|
|
|
|
|
|
|
|
|
|||||
Dried Pulp
(in thousands of metric tons)
|
2,912
|
|
|
302
|
|
|
535
|
|
|
—
|
|
|
3,749
|
|
Printing Papers
|
|
|
|
|
|
|
|
|
|
|||||
Uncoated Freesheet & Bristols
(b)
|
1,990
|
|
|
1,193
|
|
|
1,135
|
|
|
266
|
|
|
4,584
|
|
Newsprint
|
—
|
|
|
312
|
|
|
—
|
|
|
—
|
|
|
312
|
|
Total Printing Papers
|
1,990
|
|
|
1,505
|
|
|
1,135
|
|
|
266
|
|
|
4,896
|
|
|
|
|
Forest Resources
|
|
|
We own, manage or have an interest in approximately 1.4 million acres of forestlands worldwide. These forestlands and associated acres are located in the following regions:
|
(M Acres)
|
|
Brazil
|
329
|
|
We have harvesting rights in:
|
|
|
Russia
|
1,047
|
|
Poland
|
—
|
|
Total
|
1,376
|
|
2.
|
Compliance with Law and Regulations
|
3.
|
Award of Restricted Shares
|
4.
|
Method of Earning Restricted Share Awards and Removal of Restrictions
|
(i)
|
it relates to equity securities of the Company or its successor following the change in control or another entity that is affiliated with the Company or its successor following the change in control and such equity securities are publicly traded and registered under the Securities Exchange Act of 1934;
|
(ii)
|
it has a value at least equal to the value of this Restricted Share Award as of the date of the change in control as determined by the Committee;
|
(iii)
|
it does not contain any performance goals and only vests based on the Employee’s continued service with the Company or its successor following the change in control;
|
(iv)
|
its forfeiture provisions, transfer restrictions and any other restrictions lapse based upon the original vesting period of this Restricted Share Award; provided, however, that the restrictions on the Replacement Award will be removed, and the award will vest, if within two years after the effective date of the change in control, the Employee’s employment is terminated without Cause or the Employee resigns for Good Reason; and
|
(v)
|
its other terms and conditions are not less favorable to the Employee than the terms and conditions of this Restricted Share Award (including the provisions that would apply in the event of a subsequent change in control).
|
7.
|
Non-Competition and Non-Solicitation Agreements
|
8.
|
Applicable Law and Choice of Forum
|
2.
|
Compliance with Law and Regulations
|
3.
|
Award of Restricted Stock Units
|
4.
|
Method of Earning Restricted Stock Units and Removal of Restrictions
|
(i)
|
it relates to equity securities of the Company or its successor following the change in control or another entity that is affiliated with the Company or its successor following the change in control and such equity securities are publicly traded and registered under the Securities Exchange Act of 1934;
|
(ii)
|
it has a value at least equal to the value of this Restricted Stock Unit Award as of the date of the change in control as determined by the Committee;
|
(iii)
|
it does not contain any performance goals and only vests based on the Employee’s continued service with the Company or its successor following the change in control;
|
(iv)
|
its forfeiture provisions, transfer restrictions and any other restrictions lapse based upon the original vesting period of this Restricted Stock Unit Award; provided, however, that the restrictions on the Replacement Award will be removed, and the award will vest, if within two years after the effective date of the change in control, the Employee’s employment is terminated without Cause or the Employee resigns for Good Reason; and
|
(v)
|
its other terms and conditions are not less favorable to the Employee than the terms and conditions of this Restricted Stock Unit Award (including the provisions that would apply in the event of a subsequent change in control).
|
7.
|
Non-Competition and Non-Solicitation Agreements
|
2.
|
Compliance with Law and Regulations
|
3.
|
Award of Restricted Stock Units
|
4.
|
Method of Earning Restricted Stock Units and Removal of Restrictions
|
(i)
|
it relates to equity securities of the Company or its successor following the change in control or another entity that is affiliated with the Company or its successor following the change in control and such equity securities are publicly traded and registered under the Securities Exchange Act of 1934;
|
(ii)
|
it has a value at least equal to the value of this Restricted Stock Unit Award as of the date of the change in control as determined by the Committee;
|
(iii)
|
it does not contain any performance goals and only vests based on the Employee’s continued service with the Company or its successor following the change in control;
|
(iv)
|
its forfeiture provisions, transfer restrictions and any other restrictions lapse based upon the original vesting period of this Restricted Stock Unit Award; provided, however, that the restrictions on the Replacement Award will be removed, and the award will vest, if within two years after the effective date
|
(v)
|
its other terms and conditions are not less favorable to the Employee than the terms and conditions of this Restricted Stock Unit Award (including the provisions that would apply in the event of a subsequent change in control).
|
5.
|
Designation of Beneficiary
|
7.
|
Non-Competition and Non-Solicitation Agreements
|
1.
|
Compliance with Laws and Regulations.
It is intended that this Award, and any securities issued pursuant to this Award, will comply with all provisions of federal and applicable state securities laws.
|
2.
|
Performance-Based Restricted Stock Units
|
(a)
|
All performance-based restricted stock units (“Performance Share Units” or “PSUs”) issued under this Award will be contingently awarded with respect to the specific three-year performance period (the “Performance Period”) as described in the Notice of Award set forth on the reverse. PSUs may not be sold, transferred, pledged or assigned at any time. You will be asked to file a beneficiary designation form with the Company that names the beneficiary or beneficiaries of the Award.
|
(b)
|
Payout of an Award is contingent solely upon the Company’s achievement of the performance goals over the Performance Period, and not on individual performance.
|
(c)
|
All dividend equivalent units accrued during the Performance Period will be reinvested in additional PSUs (which will be allocated to the same Performance Period and will be subject to being earned on the same basis as the original Award).
|
3.
|
Payment of Withholding Taxes.
Generally, to pay withholding taxes due on an Award upon payout, the Company will reduce the number of PSUs paid to you by an amount sufficient to pay statutorily required withholding taxes.
|
4.
|
Method of Determining Actual Award and Removal of Restrictions
|
(a)
|
As soon as practicable after the Performance Period, the number of PSUs to be paid under this Award will be determined by the Committee. The decision by the Committee will be final, conclusive and binding upon all parties, including the Company, the shareowners and you. Following the Committee’s approval of the payout, you will receive unrestricted shares of Company common stock equal to the number of PSUs payable to you.
|
(b)
|
You will receive prorated PSUs in the following events: (i) termination of your employment if you are eligible for a termination allowance (and, in the United States, you sign the Company’s termination agreement and release in connection with the payment of a termination allowance); (ii) termination of your employment as a result of the Company’s divestiture of your business; (iii) death; (iv) Disability; or (v) voluntary resignation after retirement eligibility as defined under the Retirement Plan of the Company. In these events, you (or, if applicable, your beneficiary or estate) will receive the number of PSUs that would have been earned based on actual Company performance, prorated based for your months of service during the Performance Period. Such PSUs are payable at the same time and in the same form as otherwise payable under the Plan.
|
(c)
|
Your Award will be forfeited and cancelled upon the following events: (i) termination of your employment for Cause, (ii) in the United States, your refusal to sign the Company’s termination agreement and release in connection with the payment of a termination allowance, (iii) voluntary resignation before retirement eligibility, (iv) violation of a Non-Competition, Non-Solicitation or Confidentiality Agreement, (v) failure of an Executive Officer to provide one-year’s notice of retirement, (vi) your Misconduct, or (vii) termination of your employment on or before February 15 of the first year of the three-year performance period for the Award.
|
(d)
|
Except as may be provided in a Change in Control Agreement, in the event of a Change in Control of the Company, the Award will be treated as described in the 2018 Administrative Guidelines for the Plan.
|
(e)
|
In the event the Company’s financial statements are required to be restated as a result of errors, omissions or fraud, the Company may recover all or a portion of any Award with respect to any fiscal year of the Company the financial results of which are negatively affected by such restatement.
|
5.
|
Changes in Stock.
In the event of any stock dividend, split, reclassification or other analogous change in capitalization, or any distribution (other than regular cash dividends) to holders of the Company’s common stock, the Committee will make such adjustments, if any, as it deems to be equitable in the number of PSUs awarded to you.
|
6.
|
Other Terms and Conditions
|
(a)
|
The Board or the Committee may, at any time and from time to time, amend, modify or terminate the Plan without shareowner approval, subject to certain limitations described in the plan. Further, the granting of an Award is discretionary by the Company. The Company may change the eligibility or other provisions of the Plan with Committee approval at any time.
|
(b)
|
You (or your estate or beneficiary) will promptly provide all information related to this Award that is requested by the Company for its tax returns.
|
(c)
|
You (and your surviving spouse, beneficiary, executor, administrator, heirs, successors or assigns) hereby agree to accept as binding, conclusive and final all decisions that are made by the Committee with respect to interpretations of the terms and condition of the Plan or this Award and with respect to any questions or disputes arising under the Plan or this Award.
|
(d)
|
Participation in the Plan and receipt of this Award will not give you any right to a subsequent award, or any right to continued employment by the Company for any period, nor will the granting of an Award give the Company any right to your continued services for any period. You understand that this Award is in addition to, and not a part of, your annual salary.
|
(e)
|
You agree that if execution of a Non-Competition and/or a Non-Solicitation Agreement is required, this Award will be contingent upon your execution of such agreement(s).
|
In millions, except per share amounts
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|||
Earnings (loss) from continuing operations
|
$
|
2,110
|
|
|
$
|
802
|
|
|
$
|
853
|
|
|
Discontinued operations
|
34
|
|
|
102
|
|
|
85
|
|
|
|||
Net earnings (loss)
|
2,144
|
|
|
904
|
|
|
938
|
|
|
|||
Effect of dilutive securities
|
—
|
|
|
—
|
|
|
—
|
|
|
|||
Net earnings - assuming dilution
|
$
|
2,144
|
|
|
$
|
904
|
|
|
$
|
938
|
|
|
Average common shares outstanding
|
412.7
|
|
|
411.1
|
|
|
417.4
|
|
|
|||
Effect of dilutive securities
|
|
|
|
|
|
|
||||||
Restricted stock performance share plan
|
5.0
|
|
|
4.5
|
|
|
3.2
|
|
|
|||
Average common shares outstanding - assuming dilution
|
417.7
|
|
|
415.6
|
|
|
420.6
|
|
|
|||
Earnings (loss) per common share from continuing operations
|
$
|
5.11
|
|
|
$
|
1.95
|
|
|
$
|
2.05
|
|
|
Discontinued operations
|
0.08
|
|
|
0.25
|
|
|
0.20
|
|
|
|||
Net earnings (loss) per common share
|
$
|
5.19
|
|
|
$
|
2.20
|
|
|
$
|
2.25
|
|
|
Earnings (loss) per common share from continuing operations - assuming dilution
|
$
|
5.05
|
|
|
$
|
1.93
|
|
|
$
|
2.03
|
|
|
Discontinued operations
|
0.08
|
|
|
0.25
|
|
|
0.20
|
|
|
|||
Net earnings (loss) per common share - assuming dilution
|
$
|
5.13
|
|
|
$
|
2.18
|
|
|
$
|
2.23
|
|
|
|
|
|
For the Years Ended December 31,
|
|
||||||||||||||||||
TITLE
|
|
2013
|
|
|
2014
|
|
|
2015
|
|
|
2016
|
|
|
2017
|
|
|
||||||
(A)
|
Earnings (loss) from continuing operations before income taxes and equity earnings
|
|
$
|
1,092.0
|
|
|
$
|
734.0
|
|
|
$
|
1,132.0
|
|
|
$
|
795.0
|
|
|
$
|
848.0
|
|
|
(B)
|
Noncontrolling interests, net of taxes
|
|
17.0
|
|
|
19.0
|
|
|
21.0
|
|
|
2.0
|
|
|
—
|
|
|
|||||
(C)
|
Fixed charges excluding capitalized interest
|
|
701.1
|
|
|
691.0
|
|
|
695.9
|
|
|
744.5
|
|
|
810.2
|
|
|
|||||
(D)
|
Amortization of previously capitalized interest
|
|
20.4
|
|
|
19.3
|
|
|
16.0
|
|
|
14.7
|
|
|
15.2
|
|
|
|||||
(E)
|
Distributed income of equity investees
|
|
—
|
|
|
56.1
|
|
|
35.0
|
|
|
59.7
|
|
|
136.5
|
|
|
|||||
(F)
|
Earnings (loss) from continuing operations before income taxes and fixed charges
|
|
$
|
1,830.5
|
|
|
$
|
1,519.4
|
|
|
$
|
1,899.9
|
|
|
$
|
1,615.9
|
|
|
$
|
1,809.9
|
|
|
Fixed Charges
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
(G)
|
Interest and amortization of debt expense
|
|
$
|
648.3
|
|
|
$
|
643.1
|
|
|
$
|
643.5
|
|
|
$
|
694.5
|
|
|
$
|
757.9
|
|
|
(H)
|
Interest factor attributable to rentals
|
|
52.8
|
|
|
47.9
|
|
|
52.4
|
|
|
50.0
|
|
|
52.3
|
|
|
|||||
(I)
|
Preferred dividends of subsidiaries
|
|
1.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||||
(J)
|
Capitalized interest
|
|
17.0
|
|
|
23.0
|
|
|
24.8
|
|
|
28.2
|
|
|
24.8
|
|
|
|||||
(K)
|
Total fixed charges
|
|
$
|
719.2
|
|
|
$
|
714.0
|
|
|
$
|
720.7
|
|
|
$
|
772.7
|
|
|
$
|
835.0
|
|
|
(L)
|
Ratio of earnings to fixed charges
|
|
2.55
|
|
|
2.13
|
|
|
2.64
|
|
|
2.09
|
|
|
2.17
|
|
|
Name
|
|
Jurisdiction
|
Ace Packaging Systems, Inc.
|
|
Michigan
|
Balsa Forests LLC
|
|
Delaware
|
Basswood Forests IIA LLC
|
|
Delaware
|
Basswood Forests LLC
|
|
Delaware
|
Bond Project Holdings LLC
|
|
Delaware
|
Branigar Organization, Inc., The
|
|
Illinois
|
Carton y Papel Reciclado, S.A.
|
|
Spain
|
Cartonajes International, S.L.
|
|
Spain
|
Cartonajes Union S.L.
|
|
Spain
|
Cartonnerie de Martinique SAS
|
|
France
|
Certified Forest Management LLC
|
|
Delaware
|
CircleTree Insurance Company
|
|
Vermont
|
CMCP - INTERNATIONAL PAPER S.A.S.
|
|
Morocco
|
Commercial Realty & Properties LLC
|
|
Delaware
|
Comptoir des Bois de Brive SAS
|
|
France
|
Dogal Kagit Hammaddeleri Sanayi ve Ticaret Limited Sirketi
|
|
Turkey
|
EM Xpedx, S.A. De C.V.
|
|
Mexico
|
Emballages Laurent SAS
|
|
France
|
English Oak LLC
|
|
Delaware
|
Federal Forestlands Inc.
|
|
Delaware
|
Forest Insurance Limited
|
|
Bermuda
|
Haig Point, Inc.
|
|
Delaware
|
I.P. CONTAINER HOLDINGS (SPAIN) S.L.
|
|
Spain
|
Instituto International Paper
|
|
Brazil
|
International Paper - 35, Inc.
|
|
Delaware
|
International Paper - Comércio de Papel e Participações Arapoti Ltda.
|
|
Brazil
|
International Paper - Kwidzyn Sp. Z O.O.
|
|
Poland
|
International Paper (Asia) Limited
|
|
Hong Kong
|
International Paper (Deutschland) GmbH
|
|
Germany
|
International Paper (Europe) S.à r.l.
|
|
Luxembourg
|
International Paper (India) Private Limited
|
|
India
|
International Paper (Malaysia) Sdn Bhd
|
|
Malaysia
|
International Paper (New Zealand) Limited
|
|
New Zealand
|
International Paper (Poland) Holding sp. z o.o.
|
|
Poland
|
International Paper (UK) Limited
|
|
Scotland
|
International Paper (Xianghe) Packaging Co., Ltd.
|
|
China
|
International Paper Agroflorestal Ltda.
|
|
Brazil
|
International Paper APPM Limited
|
|
India
|
International Paper Benelux SPRL
|
|
Belgium
|
International Paper Canada Pulp Holdings ULC
|
|
Alberta
|
International Paper Cartones Ltda.
|
|
Chile
|
International Paper Cellulose Fibers (Poland) sp. z o.o.
|
|
Poland
|
International Paper Cellulose Fibers Sales Sàrl
|
|
Switzerland
|
Name
|
|
Jurisdiction
|
International Paper Company Employee Relief Fund
|
|
New York
|
International Paper Company Foundation
|
|
New York
|
International Paper Company Limited
|
|
England & Wales
|
International Paper Container (France) Holding SAS
|
|
France
|
International Paper CTA (Mexico), S.A. de C.V., SOFOM, E.N.R.
|
|
Mexico
|
International Paper Czech Republic, s.r.o.
|
|
Czech Republic
|
International Paper Distribution (Shanghai) Limited
|
|
People's Republic of China
|
International Paper Distribution Group (Taiwan) Limited
|
|
Taiwan, Province Of China
|
International Paper do Brasil Ltda.
|
|
Brazil
|
INTERNATIONAL PAPER DUTCH SERVICES B.V.
|
|
Netherlands
|
International Paper Embalagens da Amazônia Ltda.
|
|
Brazil
|
International Paper Embalagens Ltda.
|
|
Brazil
|
International Paper Export Sales, Inc.
|
|
Delaware
|
International Paper Exportadora Ltda.
|
|
Brazil
|
International Paper Financial Services, Inc.
|
|
Delaware
|
International Paper Financing France SARL
|
|
France
|
International Paper Foodservice Europe Limited
|
|
United Kingdom
|
International Paper France SAS
|
|
France
|
International Paper Global Cellulose Fibers Holdings S.à r.l.
|
|
Luxembourg
|
International Paper Group (UK) Limited
|
|
England & Wales
|
International Paper Holding (Brazil) S.ar.l.
|
|
Luxembourg
|
International Paper Holdings (Luxembourg) S.à r.l.
|
|
Luxembourg
|
International Paper Hungary Kereskedelmi Kft.
|
|
Hungary
|
International Paper Industrie France SA
|
|
France
|
International Paper Investment (Shanghai) Co., Ltd.
|
|
China
|
International Paper Investments (Asia) B.V.
|
|
Netherlands
|
International Paper Investments (France) S.A.S
|
|
France
|
International Paper Investments (Luxembourg) S.à r.l.
|
|
Luxembourg
|
International Paper Italia Srl
|
|
Italy
|
International Paper Japan Limited
|
|
Japan
|
International Paper Madrid Mill, S.L.
|
|
Spain
|
International Paper Manufacturing & Distribution Limited
|
|
Hong Kong
|
International Paper Mexico Company, S. de R.L. de C.V.
|
|
Mexico
|
International Paper Nordic Sales Company Oy
|
|
Finland
|
International Paper Packaging Malaysia Sdn. Bhd.
|
|
Malaysia
|
International Paper Papiers de Bureau SARL
|
|
France
|
International Paper Peru S.R.L.
|
|
Peru
|
International Paper Polska Sp. z o.o.
|
|
Poland
|
International Paper Procurement (Shanghai) Limited
|
|
People's Republic of China
|
International Paper Professional Services Corporation
|
|
Delaware
|
International Paper Russia Holding B.V.
|
|
Netherlands
|
International Paper S.A.
|
|
France
|
International Paper Switzerland GmbH
|
|
Switzerland
|
Name
|
|
Jurisdiction
|
International Paper Trading (Shanghai) Limited
|
|
People's Republic of China
|
International Paper Ukraine SE
|
|
Ukraine
|
IP Belgian Services Company SPRL
|
|
Belgium
|
IP Canada Holdings Limited
|
|
Canada
|
IP Cartones Y Corrugados, S. de R.L. de C.V.
|
|
Mexico
|
IP CBPR Properties 2 LLC
|
|
Delaware
|
IP CBPR Properties LLC
|
|
Delaware
|
IP Celimo SAS
|
|
France
|
IP Commercial Properties LLC
|
|
Delaware
|
IP Corporate Management (Shanghai) Co. Ltd.
|
|
China
|
IP Eagle LLC
|
|
Delaware
|
IP Forest Resources Company
|
|
Delaware
|
IP India Foundation
|
|
India
|
IP International Holdings, Inc.
|
|
Delaware
|
IP Investment (Brazil) S.a r.l.
|
|
Luxembourg
|
IP Mexico Holdings S.à r.l.
|
|
Luxembourg
|
IP Mineral Holdings LLC
|
|
Delaware
|
IP Papers Holding S.a r.l.
|
|
Luxembourg
|
IP Petroleum LLC
|
|
Delaware
|
IP Realty Holdings LLC
|
|
Delaware
|
IP Singapore Holding Pte. Ltd.
|
|
Singapore
|
IP Timberlands Operating Company, Ltd.
|
|
Texas
|
IPAD Inc.
|
|
Delaware
|
Joshua Tree Forests LLC
|
|
Delaware
|
Juniper Forests LLC
|
|
Delaware
|
Lacebark LLC
|
|
Delaware
|
Lake Superior Land Company
|
|
Delaware
|
Longleaf Insurance Company
|
|
Tennessee
|
Lost Creek, Inc.
|
|
Delaware
|
Med Packaging SARL
|
|
Morocco
|
Montauban Cartons SAS
|
|
France
|
Northwest Pines, Inc.
|
|
Delaware
|
Olmuksan International Paper Ambalaj Sanayi ve Ticaret Anonim Sirketi
|
|
Turkey
|
Papeteries d'Espaly SAS
|
|
France
|
Progres Action Citoyenne Maroc SARL
|
|
Morocco
|
Przedsiebiorstwo Produkcyjno-Handlowe "Tor-Pal" Spolka z Ograniczona Odpowiedzialnoscia
|
|
Poland
|
Red Bird Receivables, LLC
|
|
Delaware
|
Sabine River & Northern Railroad Company
|
|
Texas
|
SCA (Nanjing) Packaging Co., Ltd.
|
|
China
|
Societe Guadeloupeenne de Carton Ondule SAS
|
|
France
|
Societe Mauritanienne de Cartons - SOMACAR, S.A.
|
|
Mauritania
|
Societe Mediterraneenne d'Emballages SAS
|
|
France
|
Societe Normande de Carton Ondule SAS
|
|
France
|
SP Forests L.L.C.
|
|
Delaware
|
Name
|
|
Jurisdiction
|
Supplier Finance Company, LLC
|
|
Delaware
|
Sustainable Forests L.L.C.
|
|
Delaware
|
Sycamore Forests LLC
|
|
Delaware
|
Temple Associates LLC
|
|
Texas
|
Timberlands Capital Corp. II, Inc.
|
|
Delaware
|
Timberlands Capital Corp. III, Inc.
|
|
Delaware
|
TIN Intermediate, LLC
|
|
Delaware
|
TIN Land Financing, LLC
|
|
Delaware
|
TIN Timber Financing, LLC
|
|
Delaware
|
U. C. Realty LLC
|
|
Delaware
|
Velarium Oy Ab
|
|
Finland
|
ZAO International Paper
|
|
Russia
|
ZAO Tikhvinsky Komplexny Lespromokhoz
|
|
Russia
|
1.
|
I have reviewed this annual report on Form 10-K of International Paper Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
February 22, 2018
|
|
/s/ Mark S. Sutton
|
Mark S. Sutton
|
Chairman and Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of International Paper Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
February 22, 2018
|
|
/s/ Glenn R. Landau
|
Glenn R. Landau
|
Senior Vice President and Chief
|
Financial Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Mark S. Sutton
|
Mark S. Sutton
|
Chairman and Chief Executive Officer
|
February 22, 2018
|
|
/s/ Glenn R. Landau
|
Glenn R. Landau
|
Senior Vice President and Chief Financial Officer
|
February 22, 2018
|
|
Notes
|
December 31, 2017
|
|
December 31, 2016
|
ASSETS
|
|
|
|
|
Current assets
|
|
|
|
|
Cash and cash equivalents
|
4
|
238,035
|
|
396,918
|
Accounts receivable
|
4
|
124,772
|
|
98,119
|
Accounts receivable from related parties
|
10
|
24,303
|
|
25,908
|
Value added tax receivable
|
|
38,756
|
|
31,669
|
Prepayments
|
|
23,206
|
|
17,063
|
Inventories
|
4
|
237,813
|
|
201,296
|
Other current assets
|
|
2,083
|
|
2,662
|
Total current assets
|
|
688,968
|
|
773,635
|
Non-current assets
|
|
|
|
|
Plant, properties and equipment, net
|
4
|
1,521,441
|
|
1,272,551
|
Prepayments for property, plant and equipment
|
|
93,258
|
|
28,416
|
Intangible assets
|
5
|
28,002
|
|
20,345
|
Goodwill
|
4
|
8,421
|
|
7,997
|
Deferred income tax assets
|
6
|
4,418
|
|
343
|
Other non-current assets
|
4
|
40,719
|
|
21,707
|
Total non-current assets
|
|
1,696,259
|
|
1,351,359
|
TOTAL ASSETS
|
|
2,385,227
|
|
2,124,994
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
Current liabilities
|
|
|
|
|
Current maturities of long-term debt
|
8
|
733,694
|
|
155,122
|
Accounts payable
|
|
66,890
|
|
57,484
|
Accounts payable to related parties
|
10
|
7,542
|
|
7,313
|
Accrued payroll and benefits
|
|
39,003
|
|
32,202
|
Taxes payable
|
|
35,774
|
|
21,424
|
Other accruals and liabilities
|
4
|
155,871
|
|
128,056
|
Total current liabilities
|
|
1,038,774
|
|
401,601
|
Non-current liabilities
|
|
|
|
|
Long-term debt
|
8
|
844,982
|
|
1,319,404
|
Deferred income tax liabilities
|
6
|
112,620
|
|
93,859
|
Employee benefit plan obligation
|
|
5,745
|
|
5,369
|
Other liabilities
|
|
8,586
|
|
6,921
|
Total non-current liabilities
|
|
971,933
|
|
1,425,553
|
Equity
|
|
|
|
|
Common stock (1 CHF par value; 133,582,480 shares)
|
9
|
109,341
|
|
109,341
|
Additional paid-in capital
|
|
15,939
|
|
11,141
|
Receivables from a shareholder
|
10
|
(155,091)
|
|
(156,974)
|
Retained earnings
|
|
893,321
|
|
814,992
|
Accumulated other comprehensive loss
|
3
|
(494,594)
|
|
(502,339)
|
Total Ilim Holding S.A. shareholders’ equity
|
|
368,916
|
|
276,161
|
Non-controlling interests
|
|
5,604
|
|
21,679
|
Total equity
|
|
374,520
|
|
297,840
|
TOTAL LIABILITIES AND EQUITY
|
|
2,385,227
|
|
2,124,994
|
|
Notes
|
2017
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
NET SALES
|
1, 4
|
2,150,029
|
|
1,926,567
|
|
1,931,270
|
COSTS AND EXPENSES
|
|
|
|
|
|
|
Cost of products sold, excluding depreciation and amortization
|
|
(959,001)
|
|
(854,497)
|
|
(837,597)
|
Distribution and selling costs
|
|
(279,985)
|
|
(239,761)
|
|
(233,209)
|
General and administration costs
|
|
(150,817)
|
|
(123,622)
|
|
(127,904)
|
Depreciation
|
|
(144,880)
|
|
(115,706)
|
|
(121,671)
|
Amortization
|
|
(6,205)
|
|
(5,260)
|
|
(4,904)
|
Taxes other than payroll and income taxes
|
|
(25,972)
|
|
(19,645)
|
|
(22,523)
|
Other operating expenses, net
|
4
|
(39,444)
|
|
(9,327)
|
|
(16,474)
|
Foreign exchange gain (loss)
|
|
37,179
|
|
67,141
|
|
(190,826)
|
Interest expense, net
|
4
|
(87,203)
|
|
(78,650)
|
|
(55,160)
|
EARNINGS BEFORE INCOME TAXES
|
|
493,701
|
|
547,240
|
|
321,002
|
Income tax expense
|
6
|
(115,184)
|
|
(127,900)
|
|
(73,523)
|
NET EARNINGS
|
|
378,517
|
|
419,340
|
|
247,479
|
Net earnings attributable to non-controlling interests
|
|
(16,375)
|
|
(28,132)
|
|
(17,009)
|
NET EARNINGS ATTRIBUTABLE TO ILIM HOLDING S.A.
|
|
362,142
|
|
391,208
|
|
230,470
|
|
Notes
|
2017
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
NET EARNINGS
|
|
378,517
|
|
419,340
|
|
247,479
|
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX
|
|
|
|
|
|
|
Remeasurement of defined benefit obligation (net of income tax of $99, $(14) and $(162) respectively)
|
|
396
|
|
(57)
|
|
(648)
|
Change in cumulative foreign currency translation adjustments
|
|
21,446
|
|
81,854
|
|
(98,240)
|
TOTAL OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX
|
3
|
21,842
|
|
81,797
|
|
(98,888)
|
Total comprehensive income
|
|
400,359
|
|
501,137
|
|
148,591
|
Net earnings attributable to non-controlling interests
|
|
(16,375)
|
|
(28,132)
|
|
(17,009)
|
Other comprehensive (income) loss attributable to non-controlling interests
|
|
(1,869)
|
|
945
|
|
6,981
|
COMPREHENSIVE INCOME ATTRIBUTABLE TO ILIM HOLDING S.A.
|
|
382,115
|
|
473,950
|
|
138,563
|
|
Notes
|
2017
|
|
2016
|
|
2015
|
OPERATING ACTIVITIES
|
|
|
|
|
|
|
Net earnings
|
|
378,517
|
|
419,340
|
|
247,479
|
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
|
|
|
|
|
|
Depreciation and amortization
|
|
151,085
|
|
120,966
|
|
126,575
|
Income tax expense, net
|
6
|
115,184
|
|
127,900
|
|
73,523
|
Net interest expense, net of amounts capitalized
|
4
|
87,203
|
|
78,650
|
|
55,160
|
Loss (gain) on disposal of plant, properties and equipment
|
4
|
64
|
|
(2,976)
|
|
-
|
Loss (gain) from disposal of other assets
|
4
|
2,132
|
|
(746)
|
|
1,665
|
Foreign exchange (gain) loss
|
|
(37,179)
|
|
(67,141)
|
|
190,826
|
Allowance for doubtful accounts receivable
|
|
1,059
|
|
1,694
|
|
2,348
|
Impairment of plant, properties and equipment
|
4
|
8,960
|
|
2,500
|
|
2,246
|
Write down of inventories
|
|
1,554
|
|
(170)
|
|
(1,033)
|
Other, net
|
|
11,114
|
|
(7,057)
|
|
(4,709)
|
Changes in current assets and liabilities
|
|
|
|
|
|
|
Accounts receivable
|
|
(24,260)
|
|
(13,667)
|
|
(29,732)
|
Inventories
|
|
(25,213)
|
|
(15,494)
|
|
(10,908)
|
Accounts payable and accrued liabilities
|
|
35,524
|
|
2,862
|
|
20,474
|
Taxes payable other than income tax
|
|
790
|
|
(3,405)
|
|
(1,088)
|
Interest paid
|
|
(93,086)
|
|
(81,711)
|
|
(58,594)
|
Income tax paid
|
6
|
(95,251)
|
|
(54,005)
|
|
(3,455)
|
CASH PROVIDED BY OPERATING ACTIVITIES
|
|
518,197
|
|
507,540
|
|
610,777
|
INVESTMENT ACTIVITIES
|
|
|
|
|
|
|
Invested in capital projects
|
|
(405,850)
|
|
(282,737)
|
|
(182,840)
|
Proceeds from sale of plant, properties and equipment
|
|
3,289
|
|
2,898
|
|
4,497
|
Proceeds from sale of subsidiaries, net of cash disposed
|
|
-
|
|
-
|
|
36
|
Purchases of collateralized receivables
|
4
|
-
|
|
-
|
|
(13,837)
|
Other
|
|
(8,592)
|
|
(630)
|
|
(2,865)
|
CASH USED FOR INVESTMENT ACTIVITIES
|
|
(411,153)
|
|
(280,469)
|
|
(195,009)
|
FINANCING ACTIVITIES
|
|
|
|
|
|
|
Issuance of debt
|
|
365,579
|
|
808,402
|
|
602,732
|
Repayment of debt
|
|
(285,435)
|
|
(564,393)
|
|
(832,165)
|
Loan repaid by (issued to) a shareholder, net
|
10
|
6,699
|
|
(81,818)
|
|
(75,000)
|
Purchase of non-controlling interest in JSC Ilim Group
|
|
(80,191)
|
|
(35,144)
|
|
-
|
Dividends paid
|
9
|
(260,143)
|
|
(129,960)
|
|
(70,000)
|
CASH USED FOR FINANCING ACTIVITIES
|
|
(253,491)
|
|
(2,913)
|
|
(374,433)
|
Effect of exchange rate changes on cash and cash equivalents
|
|
(12,436)
|
|
18,110
|
|
(6,156)
|
Change in cash and cash equivalents
|
|
(158,883)
|
|
242,268
|
|
35,179
|
Cash and cash equivalents
|
|
|
|
|
|
|
Beginning of the year
|
4
|
396,918
|
|
154,650
|
|
119,471
|
End of the year
|
4
|
238,035
|
|
396,918
|
|
154,650
|
|
Ilim Holding S.A. shareholders
|
|
|
|
|
|
|
||||||||
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Receivables From a Shareholder
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Loss
|
|
Total Ilim Holding S.A. Shareholders’ Equity
|
|
Non-controlling Interests
|
|
Total Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE, JANUARY 1, 2015
|
109,341
|
|
6,710
|
|
-
|
|
395,497
|
|
(486,635)
|
|
24,913
|
|
15,145
|
|
40,058
|
Dividends ($ 0.52 per share; Note 9)
|
-
|
|
-
|
|
-
|
|
(70,000)
|
|
-
|
|
(70,000)
|
|
-
|
|
(70,000)
|
Dividends paid to non-controlling interests by subsidiary (Note 9)
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(4,178)
|
|
(4,178)
|
Loan issued to a shareholder (Note 10)
|
-
|
|
6,067
|
|
(77,272)
|
|
-
|
|
-
|
|
(71,205)
|
|
-
|
|
(71,205)
|
Comprehensive income (loss) (Note 3)
|
-
|
|
-
|
|
-
|
|
230,470
|
|
(91,907)
|
|
138,563
|
|
10,028
|
|
148,591
|
BALANCE, DECEMBER 31, 2015
|
109,341
|
|
12,777
|
|
(77,272)
|
|
555,967
|
|
(578,542)
|
|
22,271
|
|
20,995
|
|
43,266
|
Dividends ($ 0.87 per share; Note 9)
|
-
|
|
-
|
|
-
|
|
(118,118)
|
|
-
|
|
(118,118)
|
|
-
|
|
(118,118)
|
Dividends paid to non-controlling interests by subsidiary (Note 9)
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(19,776)
|
|
(19,776)
|
Loan issued to a shareholder, net (Note 10)
|
-
|
|
5,074
|
|
(78,474)
|
|
-
|
|
-
|
|
(73,400)
|
|
(125)
|
|
(73,525)
|
Purchase of non-controlling interest in subsidiaries from third parties
|
-
|
|
(6,710)
|
|
(1,228)
|
|
(14,065)
|
|
(6,539)
|
|
(28,542)
|
|
(6,602)
|
|
(35,144)
|
Comprehensive income (Note 3)
|
-
|
|
-
|
|
-
|
|
391,208
|
|
82,742
|
|
473,950
|
|
27,187
|
|
501,137
|
BALANCE, DECEMBER 31, 2016
|
109,341
|
|
11,141
|
|
(156,974)
|
|
814,992
|
|
(502,339)
|
|
276,161
|
|
21,679
|
|
297,840
|
Dividends ($ 1.83 per share; Note 9)
|
-
|
|
-
|
|
-
|
|
(241,760)
|
|
-
|
|
(241,760)
|
|
-
|
|
(241,760)
|
Dividends paid to non-controlling interests by subsidiary (Note 9)
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(10,829)
|
|
(10,829)
|
Loan issued to a shareholder, net (Note 10)
|
-
|
|
4,868
|
|
4,294
|
|
-
|
|
-
|
|
9,162
|
|
(61)
|
|
9,101
|
Purchase of non-controlling interest in subsidiaries from third parties
|
-
|
|
(70)
|
|
(2,411)
|
|
(42,053)
|
|
(12,228)
|
|
(56,762)
|
|
(23,429)
|
|
(80,191)
|
Comprehensive income (Note 3)
|
-
|
|
-
|
|
-
|
|
362,142
|
|
19,973
|
|
382,115
|
|
18,244
|
|
400,359
|
BALANCE, DECEMBER 31, 2017
|
109,341
|
|
15,939
|
|
(155,091)
|
|
893,321
|
|
(494,594)
|
|
368,916
|
|
5,604
|
|
374,520
|
1.
|
SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
|
|
2017
|
|
2016
|
|
2015
|
|
|
|
|
|
|
Asia except for the Middle East
|
1,100,509
|
|
1,002,739
|
|
1,030,566
|
Russia and the Commonwealth of Independent States (CIS)
|
802,871
|
|
705,525
|
|
641,761
|
Europe
|
184,563
|
|
162,761
|
|
187,211
|
Other
|
62,086
|
|
55,542
|
|
71,732
|
Total Net sales
|
2,150,029
|
|
1,926,567
|
|
1,931,270
|
1.
|
SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
1.
|
SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
Asset category
|
Useful life (years)
|
|
|
Buildings
|
35-50
|
Plant and equipment
|
5-25
|
Other
|
3-20
|
Asset category
|
Useful life (years)
|
|
|
Management accounting system (SAP)
|
5-10
|
Other software
|
3-5
|
Licenses and patents
|
3-5
|
Other
|
3-5
|
1.
|
SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
•
|
the counterparty experiences a significant financial difficulty as evidenced by its financial information;
|
•
|
the counterparty considers bankruptcy or a financial reorganization;
|
•
|
there is an adverse change in the payment status of the counterparty as a result of changes in the national or local economic conditions that impact the counterparty.
|
1.
|
SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
1.
|
SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
•
|
assets and liabilities for each balance sheet are translated at the closing rate at the date of that balance sheet;
|
•
|
share capital and other equity components are translated at historical rates;
|
•
|
income and expenses for each statement of operations and statement of comprehensive income are translated at average monthly exchange rates that approximate the translation using the actual transaction date rates; and
|
•
|
all resulting exchange differences are recognized as a separate component of equity in other comprehensive income.
|
1.
|
SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
2.
|
RECENT ACCOUNTING DEVELOPMENTS
|
2.
|
RECENT ACCOUNTING DEVELOPMENTS (CONTINUED)
|
2.
|
RECENT ACCOUNTING DEVELOPMENTS (CONTINUED)
|
3.
|
OTHER COMPREHENSIVE LOSS
|
|
Defined Benefit Obligation Items (a)
|
|
Change in Cumulative Foreign Currency Translation Adjustments (a)
|
|
Total (a)
|
|
|
|
|
|
|
Balance at December 31, 2016
|
271
|
|
(502,610)
|
|
(502,339)
|
Other comprehensive income (loss)
|
179
|
|
21,446
|
|
21,625
|
Amounts reclassified from accumulated other comprehensive income (loss)
|
217
|
|
-
|
|
217
|
Net current period other comprehensive income (loss)
|
396
|
|
21,446
|
|
21,842
|
Other comprehensive income (loss) attributable to non-controlling interest
|
(14)
|
|
(1,855)
|
|
(1,869)
|
Adjustment due to purchase of non-controlling shares
|
-
|
|
(12,228)
|
|
(12,228)
|
Balance at December 31, 2017
|
653
|
|
(495,247)
|
|
(494,594)
|
|
Defined Benefit Obligation Items (a)
|
|
Change in Cumulative Foreign Currency Translation Adjustments (a)
|
|
Total (a)
|
|
|
|
|
|
|
Balance at December 31, 2015
|
325
|
|
(578,867)
|
|
(578,542)
|
Other comprehensive income (loss)
|
(246)
|
|
81,854
|
|
81,608
|
Amounts reclassified from accumulated other comprehensive income (loss)
|
189
|
|
-
|
|
189
|
Net current period other comprehensive income (loss)
|
(57)
|
|
81,854
|
|
81,797
|
Other comprehensive income (loss) attributable to non-controlling interest
|
3
|
|
942
|
|
945
|
Adjustment due to purchase of non-controlling shares
|
-
|
|
(6,539)
|
|
(6,539)
|
Balance at December 31, 2016
|
271
|
|
(502,610)
|
|
(502,339)
|
|
Defined Benefit Obligation Items (a)
|
|
Change in Cumulative Foreign Currency Translation Adjustments (a)
|
|
Total (a)
|
|
|
|
|
|
|
Balance at December 31, 2014
|
927
|
|
(487,562)
|
|
(486,635)
|
Other comprehensive income (loss)
|
(694)
|
|
(98,240)
|
|
(98,934)
|
Amounts reclassified from accumulated other comprehensive income (loss)
|
46
|
|
-
|
|
46
|
Net current period other comprehensive income (loss)
|
(648)
|
|
(98,240)
|
|
(98,888)
|
Other comprehensive income (loss) attributable to non-controlling interest
|
46
|
|
6,935
|
|
6,981
|
Balance at December 31, 2015
|
325
|
|
(578,867)
|
|
(578,542)
|
(a)
|
All amounts are net of tax.
|
3.
|
OTHER COMPREHENSIVE LOSS (CONTINUED)
|
|
Amounts Reclassified from Accumulated Other Comprehensive Loss (a)
|
|
Location of Amounts Reclassified from AOCI
|
||||
|
2017
|
|
2016
|
|
2015
|
|
|
Defined benefit obligation items:
|
|
|
|
|
|
|
|
Prior-service costs
|
(477)
|
|
(455)
|
|
(204)
|
(b)
|
Cost of products sold
|
Actuarial gains
|
206
|
|
219
|
|
147
|
(b)
|
Cost of products sold
|
Total pre-tax amount
|
(271)
|
|
(236)
|
|
(57)
|
|
|
Tax benefit
|
54
|
|
47
|
|
11
|
|
|
Net of tax
|
(217)
|
|
(189)
|
|
(46)
|
|
|
(a)
|
Amounts in parentheses indicate debits to earnings (loss).
|
(b)
|
These accumulated other comprehensive income components are included in the computation of net periodic defined benefit plan cost.
|
4.
|
SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION
|
|
December 31, 2017
|
|
December 31, 2016
|
|
|
|
|
Cash in current bank accounts
|
201,099
|
|
48,347
|
Bank deposits
|
36,936
|
|
348,571
|
Total
|
238,035
|
|
396,918
|
|
December 31, 2017
|
|
December 31, 2016
|
|
|
|
|
Trade receivables
|
134,245
|
|
105,938
|
Other receivables
|
1,074
|
|
2,481
|
Less: allowance for doubtful accounts
|
(11,395)
|
|
(11,475)
|
Total financial assets within trade and other receivables
|
123,924
|
|
96,944
|
Other
|
848
|
|
1,175
|
Total
|
124,772
|
|
98,119
|
4.
|
SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION (CONTINUED)
|
|
Trade receivables
|
|
Other receivables
|
|
Total
|
|
|
|
|
|
|
At January 1, 2016
|
7,777
|
|
527
|
|
8,304
|
Additions charged to Earnings
|
1,115
|
|
519
|
|
1,634
|
Deductions from allowance (a)
|
(53)
|
|
(33)
|
|
(86)
|
Translation difference
|
1,542
|
|
81
|
|
1,623
|
At December 31, 2016
|
10,381
|
|
1,094
|
|
11,475
|
Additions charged to Earnings
|
839
|
|
253
|
|
1,092
|
Deductions from allowance (a)
|
(923)
|
|
(762)
|
|
(1,685)
|
Translation difference
|
480
|
|
33
|
|
513
|
At December 31, 2017
|
10,777
|
|
618
|
|
11,395
|
(a)
|
Includes write offs, less recoveries, of uncollectible accounts.
|
|
December 31, 2017
|
|
December 31, 2016
|
|
|
|
|
Raw materials
|
115,673
|
|
106,232
|
Finished pulp, paper and packaging products
|
44,249
|
|
18,440
|
Operating supplies
|
62,006
|
|
57,767
|
Other
|
15,885
|
|
18,857
|
Total
|
237,813
|
|
201,296
|
|
December 31, 2017
|
|
December 31, 2016
|
|
|
|
|
Land and buildings
|
402,567
|
|
351,558
|
Plant and equipment
|
1,500,539
|
|
1,292,221
|
Other
|
444,489
|
|
353,787
|
Assets under construction and equipment for installation
|
228,279
|
|
153,303
|
Gross cost
|
2,575,874
|
|
2,150,869
|
Less: Accumulated depreciation
|
(1,054,433)
|
|
(878,318)
|
Plant, properties and equipment, net
|
1,521,441
|
|
1,272,551
|
|
December 31, 2017
|
|
December 31, 2016
|
|
|
|
|
Opening balance
|
7,997
|
|
-
|
Additions
|
-
|
|
7,313
|
Translation difference
|
424
|
|
684
|
Closing balance
|
8,421
|
|
7,997
|
4.
|
SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION (CONTINUED)
|
|
December 31, 2017
|
|
December 31, 2016
|
|
|
|
|
Prepayment for non-current assets other than PPE
|
16,360
|
|
-
|
Prepayment to pension fund
|
8,077
|
|
6,957
|
Non-current receivables
|
141
|
|
237
|
Other non-current assets
|
16,141
|
|
14,513
|
Total
|
40,719
|
|
21,707
|
|
December 31, 2017
|
|
December 31, 2016
|
|
|
|
|
Customer advances
|
88,064
|
|
50,668
|
Payables and accruals for plant, properties and equipment
|
30,943
|
|
29,684
|
Unused vacations
|
21,164
|
|
18,580
|
Interest payable on debt
|
1,049
|
|
1,250
|
Other accruals and liabilities
|
14,651
|
|
27,874
|
Total
|
155,871
|
|
128,056
|
|
2017
|
|
2016
|
|
2015
|
|
|
|
|
|
|
Sales of goods
|
2,122,177
|
|
1,903,618
|
|
1,910,869
|
Sales of services
|
27,852
|
|
22,949
|
|
20,401
|
Total
|
2,150,029
|
|
1,926,567
|
|
1,931,270
|
|
2017
|
|
2016
|
|
2015
|
|
|
|
|
|
|
Shipping and handling costs
|
245,492
|
|
225,267
|
|
219,850
|
|
2017
|
|
2016
|
|
2015
|
Penalties received
|
1,297
|
|
704
|
|
1,258
|
Reversal of allowance for doubtful receivables and prepayments
|
54
|
|
117
|
|
3
|
Gain from reimbursement of overpaid land tax
|
-
|
|
-
|
|
1,917
|
Gain on disposal of plant, properties and equipment
|
-
|
|
2,976
|
|
-
|
Gain on disposal of non-core materials and spare parts
|
-
|
|
746
|
|
2,140
|
Other
|
1,612
|
|
7,764
|
|
5,125
|
Total
|
2,963
|
|
12,307
|
|
10,443
|
4.
|
SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION (CONTINUED)
|
|
2017
|
|
2016
|
|
2015
|
|
|
|
|
|
|
Social costs and donations
|
12,654
|
|
6,204
|
|
4,110
|
Impairment of plant, properties and equipment
|
8,960
|
|
2,500
|
|
2,246
|
Redundancy expenses
|
2,160
|
|
2,995
|
|
2,665
|
Loss from disposal of non-core materials and spare parts
|
2,132
|
|
-
|
|
-
|
Allowance for doubtful receivables and prepayments
|
1,113
|
|
1,811
|
|
2,351
|
Penalties paid
|
554
|
|
1,035
|
|
442
|
Loss from disposal of property, plant and equipment
|
64
|
|
-
|
|
-
|
Tax obligations
|
-
|
|
1,462
|
|
2,068
|
Environmental remediation costs
|
-
|
|
-
|
|
2,697
|
Loss from disposal of other assets
|
-
|
|
-
|
|
2,334
|
Other
|
14,770
|
|
5,627
|
|
8,004
|
Total
|
42,407
|
|
21,634
|
|
26,917
|
|
2017
|
|
2016
|
|
2015
|
|
|
|
|
|
|
Interest income
|
4,485
|
|
3,333
|
|
3,502
|
Interest expense
|
(91,688)
|
|
(81,983)
|
|
(58,662)
|
Total interest expense, net
|
(87,203)
|
|
(78,650)
|
|
(55,160)
|
Capitalized interest costs
|
7,631
|
|
2,993
|
|
784
|
5.
|
INTANGIBLE ASSETS
|
|
At December 31, 2017
|
|
At December 31, 2016
|
||||
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
|
|
|
|
|
|
|
Management accounting system (SAP)
|
41,184
|
|
23,337
|
|
32,497
|
|
19,299
|
Other software
|
24,732
|
|
14,801
|
|
18,251
|
|
11,256
|
Licenses and patents
|
360
|
|
227
|
|
180
|
|
105
|
Other
|
340
|
|
249
|
|
312
|
|
235
|
Total
|
66,616
|
|
38,614
|
|
51,240
|
|
30,895
|
6.
|
INCOME TAXES
|
|
2017
|
|
2016
|
|
2015
|
Earnings
|
|
|
|
|
|
Russia
|
443,450
|
|
513,335
|
|
303,223
|
Other markets
|
50,251
|
|
33,905
|
|
17,779
|
Earnings from continuing operations before income taxes
|
493,701
|
|
547,240
|
|
321,002
|
|
2017
|
|
2016
|
|
2015
|
Current tax expense
|
|
|
|
|
|
Russia
|
(80,070)
|
|
(39,191)
|
|
(1,262)
|
Other markets
|
(26,043)
|
|
(21,712)
|
|
(5,634)
|
|
(106,113)
|
|
(60,903)
|
|
(6,896)
|
Deferred tax (expense) benefit
|
|
|
|
|
|
Russia
|
(15,380)
|
|
(66,679)
|
|
(65,452)
|
Other markets
|
6,309
|
|
(318)
|
|
(1,175)
|
|
(9,071)
|
|
(66,997)
|
|
(66,627)
|
Income tax (expense)
|
(115,184)
|
|
(127,900)
|
|
(73,523)
|
|
2017
|
|
2016
|
|
2015
|
|||
Earnings from continuing operations
before income taxes |
493,701
|
|
|
547,240
|
|
|
321,002
|
|
Statutory Russian income tax rate
|
20
|
%
|
|
20
|
%
|
|
20
|
%
|
Tax (expense) using statutory Russian income tax rate
|
(98,740)
|
|
|
(109,448)
|
|
|
(64,200)
|
|
Tax rate and permanent differences on non-Russian earnings
|
4,453
|
|
|
1,589
|
|
|
(495)
|
|
Non-deductible expenses
|
(7,451)
|
|
|
(4,861)
|
|
|
(6,148)
|
|
Tax on dividends
|
(12,619)
|
|
|
(15,668)
|
|
|
(2,670)
|
|
Other, net
|
(827)
|
|
|
488
|
|
|
(10)
|
|
Income tax (expense)
|
(115,184)
|
|
|
(127,900)
|
|
|
(73,523)
|
|
Effective income tax rate
|
23
|
%
|
|
23
|
%
|
|
23
|
%
|
|
December 31, 2017
|
|
December 31, 2016
|
Deferred income tax assets:
|
|
|
|
Net operating loss carryforwards
|
571
|
|
445
|
Inventory
|
7,484
|
|
3,043
|
Other
|
10,626
|
|
6,278
|
Deferred income tax assets
|
18,681
|
|
9,766
|
|
|
|
|
Deferred income tax liabilities:
|
|
|
|
Intangible assets
|
(5,558)
|
|
(3,900)
|
Plant, properties and equipment
|
(120,680)
|
|
(98,765)
|
Other
|
(645)
|
|
(617)
|
Deferred income tax liabilities
|
(126,883)
|
|
(103,282)
|
Net deferred income tax (liabilities)
|
(108,202)
|
|
(93,516)
|
6.
|
INCOME TAXES (CONTINUED)
|
7.
|
COMMITMENTS AND CONTINGENT LIABILITIES
|
7.
|
COMMITMENTS AND CONTINGENT LIABILITIES (CONTINUED)
|
7.
|
COMMITMENTS AND CONTINGENT LIABILITIES (CONTINUED)
|
|
December 31, 2017
|
|
December 31, 2016
|
|
|
|
|
Less than 1 year
|
13,027
|
|
6,770
|
More than 1 year and up to 5 years
|
52,108
|
|
27,081
|
More than 5 years and thereafter (up to 49 years)
|
433,907
|
|
221,408
|
Total operating lease commitments
|
499,042
|
|
255,259
|
8.
|
DEBT AND LINES OF CREDIT
|
|
Weighted average interest rates
|
Notional currency
|
|
December 31, 2017
|
|
December 31, 2016
|
|
|
|
|
|
|
|
|
|
Fixed rate long-term bank loans
|
11.03
|
%
|
RUB
|
|
513,013
|
|
509,810
|
Fixed rate long-term bank loans
|
-
|
|
US Dollar
|
|
-
|
|
21,986
|
Floating rate long-term bank loans
|
3.73
|
%
|
US Dollar
|
|
1,056,536
|
|
933,629
|
Finance lease liabilities
|
9.21
|
%
|
RUB
|
|
9,127
|
|
9,101
|
Total long-term borrowings (a)
|
|
|
|
1,578,676
|
|
1,474,526
|
|
Less: current maturities
|
|
|
|
733,694
|
|
155,122
|
|
Long-term debt
|
|
|
|
844,982
|
|
1,319,404
|
(a)
|
The estimated fair market value was approximately $ 1,591,308 at December 31, 2017 and
$ 1,477,420 at December 31, 2016. The fair values are determined on the basis of expected cash flows discounted at current interest rates for new instruments with similar credit risks and remaining maturities and were categorized to level 2 of the fair value hierarchy. |
8.
|
DEBT AND LINES OF CREDIT (CONTINUED)
|
|
Less than
1 year |
|
1-5 years
|
|
Over 5 years
|
|
Total
|
Minimum lease payments at December 31, 2017
|
1,322
|
|
5,285
|
|
8,005
|
|
14,612
|
Less: future finance charges
|
(820)
|
|
(2,750)
|
|
(1,915)
|
|
(5,485)
|
Present value of minimum
lease payments at December 31, 2017 |
502
|
|
2,535
|
|
6,090
|
|
9,127
|
|
Less than
1 year |
|
1-5 years
|
|
Over 5 years
|
|
Total
|
Minimum lease payments at December 31, 2016
|
1,255
|
|
5,019
|
|
8,857
|
|
15,131
|
Less: future finance charges
|
(821)
|
|
(2,822)
|
|
(2,387)
|
|
(6,030)
|
Present value of minimum
lease payments at December 31, 2016 |
434
|
|
2,197
|
|
6,470
|
|
9,101
|
9.
|
CAPITAL STOCK
|
10.
|
RELATED PARTY TRANSACTIONS
|
•
|
companies controlled by the Russian Shareholders;
|
•
|
International Paper Company.
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
Sales/purchases of:
|
Receivables
|
|
Payables
|
|
Receivables
|
|
Payables
|
|
|
|
|
|
|
|
|
Raw materials
|
5,184
|
|
(558)
|
|
5,237
|
|
(470)
|
Other services
|
1,258
|
|
(776)
|
|
2,579
|
|
(2,182)
|
Transport services
|
513
|
|
-
|
|
610
|
|
-
|
Operating lease
|
272
|
|
(20)
|
|
246
|
|
(3)
|
Electricity, gas, heating
|
78
|
|
-
|
|
211
|
|
-
|
Total
|
7,305
|
|
(1,354)
|
|
8,883
|
|
(2,655)
|
10.
|
RELATED PARTY TRANSACTIONS (CONTINUED)
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
Income
|
|
Expenses
|
|
Income
|
|
Expenses
|
|
Income
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Raw materials
|
46,377
|
|
(5,578)
|
|
40,023
|
|
(5,275)
|
|
41,626
|
|
(5,571)
|
Other services
|
1,682
|
|
(8,617)
|
|
1,362
|
|
(4,103)
|
|
1,387
|
|
(3,355)
|
Energy, gas, water and heat
|
1,353
|
|
-
|
|
1,350
|
|
-
|
|
1,248
|
|
-
|
Transport services
|
1,085
|
|
-
|
|
1,238
|
|
-
|
|
1,254
|
|
-
|
Operating lease
|
447
|
|
(1,580)
|
|
451
|
|
(1,254)
|
|
288
|
|
(1,294)
|
Plant, properties and equipment
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(532)
|
Total
|
50,944
|
|
(15,775)
|
|
44,424
|
|
(10,632)
|
|
45,803
|
|
(10,752)
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
Sales/purchases of:
|
Receivables
|
|
Payables
|
|
Receivables
|
|
Payables
|
|
|
|
|
|
|
|
|
Finished goods
|
16,950
|
|
(380)
|
|
16,978
|
|
(7)
|
Services
|
48
|
|
(5,808)
|
|
33
|
|
(4,651)
|
Raw materials
|
-
|
|
-
|
|
14
|
|
-
|
Plant, properties and equipment
|
-
|
|
-
|
|
-
|
|
-
|
Total
|
16,998
|
|
(6,188)
|
|
17,025
|
|
(4,658)
|
11.
|
SUBSEQUENT EVENTS
|