PART II.
EXHIBIT 99.1
FIVE-YEAR FINANCIAL SUMMARY (a)
Dollar amounts in millions, except per share amounts and stock prices | 2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||
RESULTS OF OPERATIONS | ||||||||||||||||||||
Net sales | $ | 21,079 | $ | 22,365 | $ | 23,617 | $ | 23,483 | $ | 21,852 | ||||||||||
Costs and expenses, excluding interest | 19,603 | 20,544 | 22,138 | 21,643 | 20,214 | |||||||||||||||
Earnings (loss) from continuing operations before income taxes and equity earnings | 956 | (b) | 1,266 | (e) | 872 | (g) | 1,228 | (j) | 967 | (m) | ||||||||||
Equity earnings (loss), net of taxes | 198 | 117 | (200 | ) | (39 | ) | 61 | |||||||||||||
Discontinued operations, net of taxes | (5 | ) | (c) | — | (13 | ) | (h) | (309 | ) | (k) | 77 | (n) | ||||||||
Net earnings (loss) | 902 | (b-d) | 917 | (e-f) | 536 | (g-i) | 1,378 | (j-l) | 799 | (m-o) | ||||||||||
Noncontrolling interests, net of taxes | (2 | ) | (21 | ) | (19 | ) | (17 | ) | 5 | |||||||||||
Net earnings (loss) attributable to International Paper Company | 904 | (b-d) | 938 | (e-f) | 555 | (g-i) | 1,395 | (j-l) | 794 | (m-o) | ||||||||||
FINANCIAL POSITION | ||||||||||||||||||||
Current assets less current liabilities | $ | 2,601 | $ | 2,244 | $ | 2,719 | $ | 3,597 | $ | 3,585 | ||||||||||
Plants, properties and equipment, net | 13,990 | 11,980 | 12,728 | 13,672 | 13,949 | |||||||||||||||
Forestlands | 456 | 366 | 507 | 557 | 622 | |||||||||||||||
Total assets | 33,093 | 30,271 | 28,369 | 31,242 | 31,829 | |||||||||||||||
Notes payable and current maturities of long-term debt | 239 | 426 | 742 | 661 | 444 | |||||||||||||||
Long-term debt | 11,075 | 8,844 | 8,584 | 8,787 | 9,649 | |||||||||||||||
Total shareholders’ equity | 4,341 | 3,884 | 5,115 | 8,105 | 6,304 | |||||||||||||||
BASIC EARNINGS PER SHARE ATTRIBUTABLE TO INTERNATIONAL PAPER COMPANY COMMON SHAREHOLDERS | ||||||||||||||||||||
Earnings (loss) from continuing operations | $ | 2.21 | $ | 2.25 | $ | 1.33 | $ | 3.85 | $ | 1.65 | ||||||||||
Discontinued operations | (0.01 | ) | — | (0.03 | ) | (0.70 | ) | 0.17 | ||||||||||||
Net earnings (loss) | 2.20 | 2.25 | 1.30 | 3.15 | 1.82 | |||||||||||||||
DILUTED EARNINGS PER SHARE ATTRIBUTABLE TO INTERNATIONAL PAPER COMPANY COMMON SHAREHOLDERS | ||||||||||||||||||||
Earnings (loss) from continuing operations | $ | 2.19 | $ | 2.23 | $ | 1.31 | $ | 3.80 | $ | 1.63 | ||||||||||
Discontinued operations | (0.01 | ) | — | (0.02 | ) | (0.69 | ) | 0.17 | ||||||||||||
Net earnings (loss) | 2.18 | 2.23 | 1.29 | 3.11 | 1.80 | |||||||||||||||
Cash dividends | 1.783 | 1.640 | 1.450 | 1.250 | 1.088 | |||||||||||||||
Total shareholders’ equity | 10.56 | 9.43 | 12.18 | 18.57 | 14.33 | |||||||||||||||
COMMON STOCK PRICES | ||||||||||||||||||||
High | $ | 54.68 | $ | 57.90 | $ | 55.73 | $ | 50.33 | $ | 39.88 | ||||||||||
Low | 32.50 | 36.76 | 44.24 | 39.47 | 27.29 | |||||||||||||||
Year-end | 53.06 | 37.70 | 53.58 | 49.03 | 39.84 | |||||||||||||||
FINANCIAL RATIOS | ||||||||||||||||||||
Current ratio | 1.6 | 1.6 | 1.5 | 1.7 | 1.7 | |||||||||||||||
Total debt to capital ratio | 0.72 | 0.70 | 0.65 | 0.54 | 0.62 | |||||||||||||||
Return on shareholders’ equity | 22.1 | % | (b-d) | 20.0 | % | (e-f) | 7.7 | % | (g-i) | 20.2 | % | (j-l) | 11.6 | % | (m-o) | |||||
CAPITAL EXPENDITURES | $ | 1,348 | $ | 1,487 | $ | 1,366 | $1,198 | $1,383 | ||||||||||||
NUMBER OF EMPLOYEES | 55,000 | 56,000 | 58,000 | 64,000 | 65,000 |
1
FINANCIAL GLOSSARY
Current ratio—
current assets divided by current liabilities.
Total debt to capital ratio—
long-term debt plus notes payable and current maturities of long-term debt divided by long-term debt, notes payable and current maturities of long-term debt and total shareholders’ equity.
Return on shareholders’ equity—
net earnings attributable to International Paper Company divided by average shareholders’ equity (computed monthly).
FOOTNOTES TO FIVE-YEAR FINANCIAL SUMMARY
(a) | All periods presented have been restated to reflect the xpedx business and the Temple-Inland Building Products business as discontinued operations and prior period amounts have been adjusted to conform with current year presentation, if applicable. |
2016:
(b) Includes the following charges (gains):
2016 | ||||||||
In millions | Before Tax | After Tax | ||||||
Riegelwood mill conversion costs | $ | 9 | $ | 6 | ||||
India Packaging evaluation write-off | 17 | 11 | ||||||
Write-off of certain regulatory pre-engineering costs | 8 | 5 | ||||||
Early debt extinguishment costs | 29 | 18 | ||||||
Costs associated with the newly acquired pulp business | 31 | 21 | ||||||
Asia Box impairment / restructuring | 70 | 58 | ||||||
Gain on sale of investment in Arizona Chemical | (8 | ) | (5 | ) | ||||
Turkey mill closure | 7 | 6 | ||||||
Amortization of Weyerhaeuser inventory fair value step-up | 19 | 11 | ||||||
Total special items | $ | 182 | $ | 131 | ||||
Non-operating pension expense | 610 | 375 | ||||||
Total | $ | 792 | $ | 506 |
(c) Includes a pre-tax charge of $8 million ($5 million after taxes) for a legal settlement associated with the xpedx business.
(d) Includes the following tax expenses (benefits):
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 | |||
Total | $ | (23 | ) |
2015:
(e) Includes the following charges (gains):
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 |
(f) Includes the following tax expenses (benefits):
In millions | 2015 | |||
IP-Sun JV impairment | $ | (67 | ) | |
Cash pension contribution | 23 | |||
Other items | 7 | |||
Total | $ | (37 | ) |
2
2014:
(g) Includes the following charges (gains):
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 |
(h) Includes the operating earnings of the xpedx business prior to the spin-off and the following charges (gains):
2014 | ||||||||
In millions | Before Tax | After Tax | ||||||
xpedx spinoff | $ | 24 | $ | 16 | ||||
Building Products divestiture | 16 | 9 | ||||||
xpedx restructuring | 1 | (1 | ) | |||||
Total | $ | 41 | $ | 24 |
(i) Includes the following tax expenses (benefits):
In millions | 2014 | |||
State legislative tax change | $ | 10 | ||
Internal restructuring | (90 | ) | ||
Other items | (1 | ) | ||
Total | $ | (81 | ) |
2013:
(j) Includes the following charges (gains):
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 | ) | ||||
Shut down of paper machine at Augusta mill | 45 | 28 | ||||||
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 | $ | 344 | $ | 255 | ||||
Non-operating pension expense | 323 | 197 | ||||||
Total | $ | 667 | $ | 452 |
(k) Includes the operating earnings of the xpedx business for the full year and the Temple-Inland Building Products business through the date of sale in July 2013. Also includes the following charges (gains):
2013 | ||||||||
In millions | Before Tax | After Tax | ||||||
xpedx spinoff | $ | 22 | $ | 14 | ||||
xpedx goodwill impairment | 400 | 366 | ||||||
Building Products divestiture | 23 | 19 | ||||||
xpedx restructuring | 32 | 19 | ||||||
Total | $ | 477 | $ | 418 |
(l) Includes the following tax expenses (benefits):
In millions | 2013 | |||
Settlement of U.S. federal tax audits | $ | (744 | ) | |
Income tax reserve release | (31 | ) | ||
Other items | 1 | |||
Total | $ | (774 | ) |
3
2012:
(m) Includes the following charges (gains):
2012 | ||||||||
In millions | Before Tax | After Tax | ||||||
Temple-Inland integration | $ | 164 | $ | 105 | ||||
Early debt extinguishment costs | 48 | 30 | ||||||
EMEA packaging business restructuring | 17 | 12 | ||||||
Temple-Inland inventory fair value adjustment | 20 | 12 | ||||||
Hueneme mill long-lived asset fair value adjustment | 62 | 38 | ||||||
Containerboard mill divestitures | 29 | 55 | ||||||
Other | (5 | ) | (5 | ) | ||||
Total | $ | 335 | $ | 247 | ||||
Non-operating pension expense | 159 | 113 | ||||||
Total | $ | 494 | $ | 360 |
(n) Includes the operating earnings of the xpedx business and the Temple-Inland Building Products business for the full year. Also includes the following charges (gains):
2012 | ||||||||
In millions | Before Tax | After Tax | ||||||
Building Products divestiture | $ | 15 | $ | 9 | ||||
xpedx restructuring | 44 | 28 | ||||||
Total | $ | 59 | $ | 37 |
(o) Includes the following tax expenses (benefits):
In millions | 2012 | |||
Internal restructuring | $ | 14 | ||
Deferred tax asset adjustment related to Medicare Part D reimbursement | 5 | |||
Other | 6 | |||
Total | $ | 25 |
4