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International Paper Reports First Quarter 2019 Results

MEMPHIS, Tenn., April 25, 2019 /PRNewswire/ -- International Paper (IP) today reported first quarter 2019 financial results.

International Paper logo. (PRNewsfoto/International Paper)

HIGHLIGHTS

  • First quarter net earnings attributable to International Paper of $424 million ($1.05 per diluted share) compared with $316 million ($0.78 per diluted share) in the fourth quarter of 2018 and $729 million ($1.74 per diluted share) in the first quarter of 2018
  • First quarter adjusted operating earnings* (non-GAAP) of $447 million ($1.11 per diluted share) compared with $670 million ($1.65 per diluted share) in the fourth quarter of 2018 and $395 million ($0.94 per diluted share) in the first quarter of 2018
  • First quarter equity earnings of $114 million compared with $95 million in the first quarter of 2018
  • First quarter share repurchases of $180 million, bringing the trailing 12 month total to $880 million

"International Paper delivered solid earnings and generated strong cash from operations in the first quarter," said Mark Sutton, Chairman and Chief Executive Officer. "Operational performance was strong; we managed costs well and leveraged the strength and flexibility of our manufacturing system. In the first quarter, we also returned nearly $400 million to shareholders through dividends and share repurchases. Looking ahead to the second quarter, we anticipate improved seasonal demand and we are well positioned to continue generating strong cash flows in 2019."

Diluted Net EPS Attributable to International Paper Shareholders and Adjusted Operating EPS




First
Quarter
2019


Fourth
Quarter
2018


First
Quarter
2018


Net Earnings


$

1.05



$

0.78



$

1.74



Less – Discontinued Operations (Gain) Loss






(0.88)



Net Earnings (Loss) from Continuing Operations


1.05



0.78



0.86



Add Back – Non-Operating Pension Expense


0.02



0.79



0.01



Add Back – Net Special Items Expense (Income)


0.04



0.08



0.07



Adjusted Operating Earnings*


$

1.11



$

1.65



$

0.94




*

Adjusted operating earnings (non-GAAP) is defined as net earnings from continuing operations attributable to International Paper Company (GAAP) excluding special items and non-operating pension expense. Management uses this measure to focus on on-going operations, and believes that it is useful to investors because it enables them to perform meaningful comparisons of past and present operating results. For discussion of special items, net and non-operating pension expense, see the footnotes to the Consolidated Statement of Operations.

 

Key Financial Measures


(In millions)


First
Quarter
2019


Fourth
Quarter
2018


First
Quarter
2018


Net Sales


$

5,643



$

5,951



$

5,621



Business Segment Operating Profit


579



930



512



Adjusted Operating Earnings


447



670



395



Cash Provided By (Used For) Operations


733



821



663



Free Cash Flow


440



535



174



SEGMENT INFORMATION
Business segment operating profits are used by International Paper's management to measure the earnings performance of its businesses. First quarter 2019 business segment net sales and operating profits compared with the fourth quarter of 2018 and the first quarter of 2018 are as follows:

Business Segment Results


(In millions)


First
Quarter
2019


Fourth
Quarter
2018


First
Quarter
2018


Net Sales by Business Segment








Industrial Packaging


$

3,832



$

4,017



$

3,827



Global Cellulose Fibers


689



736



677



Printing Papers


1,065



1,160



1,053



Corporate and Inter-segment Sales


57



38



64



Net Sales


$

5,643



$

5,951



$

5,621



Operating Profit by Business Segment








Industrial Packaging


$

404



$

647



$

437



Global Cellulose Fibers


32



91



11



Printing Papers


143



192



64



Total Business Segment Operating Profit


$

579



$

930



$

512



Industrial Packaging operating profits in the first quarter of 2019 were $404 million ($421 million excluding special items) compared with $647 million ($646 million excluding special items) in the fourth quarter of 2018. In North America, earnings decreased due to lower demand for boxes and export containerboard, increased economic downtime and higher planned maintenance outage expenses. Input costs were slightly favorable. In Europe, earnings decreased driven by lower sales prices and volumes due to weaker economic conditions, primarily in Turkey and unfavorable foreign currency impacts.

Global Cellulose Fibers operating profits in the first quarter of 2019 were $32 million ($35 million excluding special items) compared with $91 million ($93 million excluding special items) in the fourth quarter of 2018. Earnings decreased due to lower fluff pulp volume and lower average sales prices for market pulp. In addition, planned maintenance outage expenses, manufacturing operating costs and economic downtime increased.

Printing Papers operating profits in the first quarter of 2019 were $143 million ($144 million excluding special items) versus $192 million ($197 million excluding special items) in the fourth quarter of 2018. In North America, decreased volumes were partially offset by improved sales prices and mix. Manufacturing operating costs increased primarily due to seasonality and inflation. In Brazil, earnings decreased due to seasonally lower demand and unfavorable geographic mix, slightly offset by improved domestic sales prices. In Europe and Russia, earnings benefited from higher sales prices for uncoated freesheet paper and lower input costs. Sales volumes increased in Europe but were lower in Russia.

EQUITY METHOD INVESTMENTS
Ilim joint venture equity earnings were $101 million in the first quarter of 2019 compared with $67 million in the fourth quarter of 2018. Operationally, earnings decreased due to significantly lower export sales prices for hardwood and softwood pulp to China. The Company recognized a non-cash after-tax foreign exchange gain of $21 million in the first quarter of 2019 ($0.05 per diluted share), compared with a loss of $19 million in the fourth quarter of 2018 ($0.05 per diluted share), primarily due to Ilim's U.S. dollar denominated net debt.

Graphic Packaging equity earnings on our 20.5% ownership position were $13 million in the first quarter of 2019, compared with $10 million in the fourth quarter of 2018.

CORPORATE EXPENSES
Corporate expenses were $21 million for the first quarter of 2019, compared with $8 million in the fourth quarter of 2018.

EFFECTIVE TAX RATE
The reported effective tax rate for the first quarter of 2019 was 25%, compared to a 2018 fourth quarter reported effective tax rate of 37%. In the fourth quarter of 2018, the Company recorded, as special items, tax expense of $25 million related to foreign tax audits and tax expense of $19 million related to international investment restructuring.

Excluding special items, non-operating pension expense and discontinued operations, the effective tax rate for the first quarter of 2019 was 25%, compared with an effective tax rate of 26% in the fourth quarter of 2018.

EFFECTS OF SPECIAL ITEMS
Special items in the first quarter of 2019 amount to a net after-tax charge of $15 million ($0.04 per diluted share) compared with $32 million ($0.08 per diluted share) in the fourth quarter of 2018 and $31 million ($0.07 per diluted share) in the first quarter of 2018.  Special items in all periods include the following charges (gains):



First Quarter
2019


Fourth Quarter
2018


First Quarter
2018


(In millions)


Before
Tax

After Tax


Before
Tax

After Tax


Before
Tax

After Tax


Restructuring and other charges, net:











Gain on sale of investment in Liaison Technologies


$


$



$

(31)


$

(23)



$


$



Debt extinguishment costs





10


7






Riverdale mill conversion severance





3


2






EMEA Packaging business optimization





(1)


(1)



22


17



Total restructuring and other charges, net





(19)


(15)



22


17



Multi-employer pension plan exit liability


16


12









Gain on sale of EMEA Packaging box plant


(7)


(6)









Abandoned property removal


11


8



8


6



9


7



Legal settlement








9


7



Other


1


1



(4)


(3)






Tax expense related to foreign tax audits






25






Tax expense related to international investment restructuring






19






Total special items, net


$

21


$

15



$

(15)


$

32



$

40


$

31



DISCONTINUED OPERATIONS
Discontinued operations in the first quarter of 2018 included a pre-tax gain on the 2017 transfer of the North American Consumer Packaging business of $516 million ($385 million after taxes) and pre-tax charges of $23 million ($17 million after taxes) for costs associated with the transfer.

EARNINGS WEBCAST
The company will host a webcast today to discuss earnings and current market conditions, beginning at 10 a.m. ET (9 a.m. CT). All interested parties are invited to listen to the webcast via the company's website at internationalpaper.com by clicking on the Performance tab and going to the Presentations and Events/Webcasts page. A replay of the webcast will also be on the website beginning approximately two hours after the call. Parties who wish to participate in the webcast via teleconference may dial +1 (706) 679-8242 or, within the U.S. only, (877) 316-2541, and ask to be connected to the International Paper first quarter earnings call. The conference ID number is 9573956. Participants should call in no later than 9:45 a.m. ET (8:45 a.m. CT).  An audio-only replay will be available for ninety days following the call.  To access the replay, dial +1 (404) 537-3406 or, within the U.S. only, (855) 859-2056 or (800) 585-8367, and when prompted for the conference ID, enter 9573956.

About International Paper
International Paper (IP) is a leading global producer of renewable fiber-based packaging, pulp and paper products with manufacturing operations in North America, Latin America, Europe, North Africa, India and Russia. We produce corrugated packaging products that protect and promote goods, and enable world-wide commerce; pulp for diapers, tissue and other personal hygiene products that promote health and wellness; and papers that facilitate education and communication. We are headquartered in Memphis, Tenn., employ more than 52,000 colleagues and serve more than 25,000 customers in 150 countries. Net sales for 2018 were $23 billion. For more information about International Paper, our products and global citizenship efforts, please visit internationalpaper.com.

Certain statements in this press release may be considered forward-looking statements. Words such as "expects", "anticipates", "believes", "estimates" and similar expressions identify forward-looking statements. These statements reflect management's current views and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in these statements. Factors which could cause actual results to differ include but are not limited to: (i) the level of our indebtedness and changes in interest rates; (ii) industry conditions, including but not limited to changes in the cost or availability of raw materials, energy and transportation costs, competition we face, cyclicality and changes in consumer preferences, demand and pricing for our products; (iii) global economic conditions and political changes, including but not limited to the impairment of financial institutions, changes in currency exchange rates, credit ratings issued by recognized credit rating organizations, the amount of our future pension funding obligation, changes in tax laws and pension and health care costs; (iv) unanticipated expenditures related to the cost of compliance with existing and new environmental and other governmental regulations and to actual or potential litigation; (v) whether we experience a material disruption at one of our manufacturing facilities; (vi) risks inherent in conducting business through joint ventures; (vii) our ability to achieve the benefits we expect from strategic acquisitions, divestitures, restructurings and capital investments; and (viii) other factors that can be found in International Paper's press releases and U.S. Securities and Exchange Commission (the "SEC") filings. These and other factors that could cause or contribute to actual results differing materially from such forward-looking statements are discussed in greater detail in the Company's SEC filings. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

 

INTERNATIONAL PAPER COMPANY
Consolidated Statement of Operations
Preliminary and Unaudited
(In millions, except per share amounts)













Three Months Ended
March 31,


Three Months
Ended
December 31,





2019


2018


2018



Net Sales


$   5,643


$   5,621


$                5,951



Costs and Expenses









Cost of products sold


3,929

(a)

3,948

(a)

3,798

(a)


Selling and administrative expenses


413


421


446



Depreciation, amortization and cost of timber harvested


315

(b)

325


338

(b)


Distribution expenses


389


366


401



Taxes other than payroll and income taxes


43


44


41



Restructuring and other charges, net



22

(d)

(19)

(d)


Net (gains) losses on sales and impairments of businesses


(7)

(c)




Interest expense, net


133


135


135



Non-operating pension expense


10


4


429

(f)


Earnings (Loss) From Continuing Operations Before Income Taxes and Equity Earnings


418


356


382



Income tax provision (benefit)


106


89


143

(g)


Equity earnings (loss), net of taxes


114


95


79



Earnings (Loss) From Continuing Operations


426


362


318



Discontinued operations, net of taxes



368

(e)



Net Earnings (Loss)


426


730


318



Less: Net earnings (loss) attributable to noncontrolling interests


2


1


2



Net Earnings (Loss) Attributable to International Paper Company


$       424


$      729


$                   316



Basic Earnings Per Common Share Attributable to International Paper Common Shareholders









Earnings (loss) from continuing operations


$      1.06


$     0.87


$                  0.79



Discontinued operations



0.89




Net earnings (loss)


$      1.06


$     1.76


$                  0.79



Diluted Earnings Per Common Share Attributable to International Paper Common Shareholders









Earnings (loss) from continuing operations


$      1.05


$     0.86


$                  0.78



Discontinued operations



0.88




Net earnings (loss)


$      1.05


$     1.74


$                  0.78



Average Shares of Common Stock Outstanding - Diluted


403.2


418.2


406.6



Cash Dividends Per Common Share


$ 0.5000


$ 0.4750


$              0.5000



Amounts Attributable to International Paper Common Shareholders









Earnings (loss) from continuing operations, net of tax


$       424


$      361


$                   316



Discontinued operations, net of tax



368




Net earnings (loss)


$       424


$      729


$                   316











The accompanying notes are an integral part of this consolidated statement of operations.

(a)

Includes pre-tax charges of $11 million ($8 million after taxes), $9 million ($7 million after taxes) and $8 million ($6 million after taxes) for the three months ended March 31, 2019, March 31, 2018 and December 31, 2018, respectively, for the removal of abandoned property at our mills, a pre-tax charge of $16 million ($12 million after taxes) for the three months ended March 31, 2019 for costs associated with a multi-employer pension plan exit liability, a pre-tax charge of $9 million ($7 million after taxes) for the three months ended March 31, 2018 for a legal settlement and pre-tax income of $5 million ($4 million after taxes) for the three months ended December 31, 2018 for a litigation settlement recovery.

(b)

Includes charges of $1 million (before and after taxes) for both the three months ended March 31, 2019 and December 31, 2018 for accelerated depreciation associated with the announced conversion of a paper machine at our Riverdale mill to containerboard production.

(c)

Includes a pre-tax gain of $7 million ($6 million after taxes) for the three months ended March 31, 2019 related to the sale of a box plant in our EMEA Packaging business.

(d)

Includes a pre-tax charge of $22 million ($17 million after taxes) and income of $1 million (before and after taxes) for the three months ended March 31, 2018 and December 31, 2018, respectively, related to the optimization of our EMEA Packaging business, a pre-tax gain of $31 million ($23 million after taxes) for the three months ended December 31, 2018 related to the sale of our investment in Liaison Technologies, a pre-tax charge of $10 million ($7 million after taxes) for the three months ended December 31, 2018 for debt extinguishment costs and a pre-tax charge of $3 million ($2 million after taxes) for the three months ended December 31, 2018 for severance associated with the Riverdale mill conversion.

(e)

Includes pre-tax income of $516 million ($385 million after taxes) for the gain on the transfer of the North American Consumer Packaging business and a pre-tax charge of $23 million ($17 million after taxes) for transaction costs to transfer the North American Consumer Packaging business for the three months ended March 31, 2018.

(f)

Includes a pre-tax charge of $424 million ($318 million after taxes) for the three months ended December 31, 2018 for a settlement accounting charge associated with an annuity purchase and transfer of pension obligations for approximately 23,000 retirees.

(g)

Includes tax expense of $19 million for the three months ended December 31, 2018 related to international investment restructuring and tax expense of $25 million for the three months ended December 31, 2018 related to foreign tax audits.

 


INTERNATIONAL PAPER COMPANY
Reconciliation of Net Earnings (Loss) Attributable to International Paper Company to Adjusted Operating Earnings
Preliminary and Unaudited
(In millions, except per share amounts)













Three Months Ended
March 31,


Three Months
Ended
December 31,





2019


2018


2018



Net Earnings (Loss) Attributable to International Paper Company


$    424


$     729


$                 316



Less: Discontinued operations (gain) loss



(368)




Earnings (Loss) from Continuing Operations, including non-controlling interest


424


361


316



Add back: Non-operating pension expense


8


3


322



Add back: Special items expense (income)


15


31


32



Adjusted Operating Earnings


$    447


$     395


$                 670









Three Months Ended
March 31,


Three Months
Ended
December 31,





2019


2018


2018



Diluted Earnings per Common Share as Reported


$   1.05


$    1.74


$                0.78



Less: Discontinued operations (gain) loss



(0.88)




Continuing Operations


1.05


0.86


0.78



Add back: Non-operating pension expense


0.02


0.01


0.79



Add back: Special items expense (income)


0.04


0.07


0.08



Adjusted Operating Earnings per Share


$   1.11


$    0.94


$                1.65











Notes:











The Company calculates Adjusted Operating Earnings (non-GAAP) by excluding the after-tax effect of non-operating pension expense, items considered by management to be unusual as reflected in the notes to the Consolidated Statement of Operations and discontinued operations from the earnings reported under U.S. generally accepted accounting principles ("GAAP"). Management uses this measure to focus on on-going operations, and believes that it is useful to investors because it enables them to perform meaningful comparisons of past and present operating results. International Paper believes that using this information, along with net earnings, provides for a more complete analysis of the results of operations by quarter. Net earnings attributable to International Paper is the most directly comparable GAAP measure.


 

INTERNATIONAL PAPER COMPANY
Sales and Earnings by Business Segment
Preliminary and Unaudited
(In millions)











Net Sales by Business Segment











Three Months Ended
March 31,


Three Months
Ended
December 31,





2019


2018


2018



Industrial Packaging


$ 3,832


$ 3,827


$              4,017



Global Cellulose Fibers


689


677


736



Printing Papers


1,065


1,053


1,160



Corporate and Inter-segment Sales


57


64


38



Net Sales


$ 5,643


$ 5,621


$              5,951





Operating Profit by Business Segment











Three Months Ended
March 31,


Three Months
Ended
December 31,





2019


2018


2018



Industrial Packaging


$    404

(a)

$    437

(a)

$                 647

(a)


Global Cellulose Fibers


32

(b)

11

(b)

91

(b)


Printing Papers


143

(c)

64


192

(c)


Total Business Segment Operating Profit


$    579


$    512


$                 930












Earnings (Loss) From Continuing Operations
Before Income Taxes and Equity Earnings


$    418


$    356


$                 382



Interest expense, net


133


135


135



Noncontrolling interest/equity earnings adjustment (f)


(3)


(1)


(3)



Corporate expenses, net


21


9


8



Corporate special items, net



9

(d)

(21)

(d)


Non-operating pension expense


10


4


429

(e)


Adjusted Operating Profit


$    579


$    512


$                 930



Equity Earnings (Loss) in Ilim S.A., Net of Taxes


$    101


$      92


$                   67



Equity Earnings (Loss) in Graphic Packaging International Partners, LLC


$      13


$        2


$                   10











(a)

Includes a charge of $16 million for the three months ended March 31, 2019 for costs associated with a multi-employer pension plan exit liability, a gain of $7 million for the three months ended March 31, 2019 related to the sale of a box plant in our EMEA Packaging business, a charge of $22 million and income of $1 million for the three months ended March 31, 2018 and December 31, 2018, respectively, related to the optimization of our EMEA Packaging business, income of $5 million for the three months ended December 31, 2018 for a litigation settlement recovery and charges of $8 million, $5 million and $5 million for the three months ended March 31, 2019, March 31, 2018 and December 31, 2018, respectively, for the removal of abandoned property at our mills.

(b)

Includes charges of $3 million, $4 million and $2 million for the three months ended March 31, 2019, March 31, 2018 and December 31, 2018, respectively, for the removal of abandoned property at our mills.

(c)

Includes charges of $1 million and $4 million for the three months ended March 31, 2019 and December 31, 2018, respectively, for accelerated depreciation and severance charges associated with the announced conversion of a paper machine at our Riverdale mill to containerboard production and a charge of $1 million for the three months ended December 31, 2018 for the removal of abandoned property at our mills.

(d)

Includes a charge of $9 million for the three months ended March 31, 2018 for a legal settlement, a gain of $31 million for the three months ended December 31, 2018 related to the sale of our investment in Liaison Technologies and a charge of $10 million for the three months ended December 31, 2018 for debt extinguishment costs.

(e)

Includes a charge of $424 million for the three months ended December 31, 2018 for a settlement accounting charge associated with an annuity purchase and transfer of pension obligations for approximately 23,000 retirees.

(f)

Operating profits for business segments include each segment's percentage share of the profits of subsidiaries included in that segment that are less than wholly owned. The pre-tax noncontrolling interest and equity earnings for these subsidiaries are adjusted here to present consolidated earnings before income taxes and equity earnings.

 

INTERNATIONAL PAPER COMPANY
Reconciliation of Operating Profit to Operating Profit Before Special Items
Preliminary and Unaudited
(In millions)








Three Months Ended March 31, 2019




Industrial
Packaging


Global
Cellulose
Fibers


Printing
Papers


Total


Operating Profit (Loss) as Reported


$        404


$          32


$        143


$        579


Special Items Expense (Income) (a)


17


3


1


21


Operating Profit (Loss) Before Special Items


$        421


$          35


$        144


$        600







Three Months Ended March 31, 2018




Industrial
Packaging


Global
Cellulose
Fibers


Printing
Papers


Total


Operating Profit (Loss) as Reported


$        437


$          11


$          64


$        512


Special Items Expense (Income) (a)


27


4



31


Operating Profit (Loss) Before Special Items


$        464


$          15


$          64


$        543







Three Months Ended December 31, 2018




Industrial
Packaging


Global
Cellulose
Fibers


Printing
Papers


Total


Operating Profit (Loss) as Reported


$        647


$          91


$        192


$        930


Special Items Expense (Income) (a)


(1)


2


5


6


Operating Profit (Loss) Before Special Items


$        646


$          93


$        197


$        936































(a)

See footnotes (a) - (c) on Sales and Earnings by Business Segment












The Company calculates Operating Profit Before Special Items (non-GAAP) by excluding the pre-tax effect of items considered by management to be unusual from the earnings reported under U.S. generally accepted accounting principles ("GAAP"). Management uses this measure to focus on on-going operations, and believes that it is useful to investors because it enables them to perform meaningful comparisons of past and present operating results. International Paper believes that using this information, along with net earnings, provides for a more complete analysis of the results of operations by quarter. Net earnings attributable to International Paper is the most directly comparable GAAP measure.

 

INTERNATIONAL PAPER COMPANY
Sales Volume by Product (a)
Preliminary and Unaudited


International Paper Consolidated











Three Months
Ended
March 31,


Three Months
Ended
December 31,





2019


2018


2018



Industrial Packaging (In thousands of short tons)









Corrugated Packaging (c)


2,535


2,579


2,655



Containerboard


697


783


793



Recycling


609


537


582



Saturated Kraft


41


46


47



Gypsum /Release Kraft


51


53


51



Bleached Kraft


7


7


7



EMEA Packaging (c)


370


397


363



Brazilian Packaging  (c)


85


86


88



European Coated Paperboard


104


96


106



Industrial Packaging


4,499


4,584


4,692



Global Cellulose Fibers (In thousands of metric tons) (b)


859


895


908



Printing Papers (In thousands of short tons)









U.S. Uncoated Papers


448


470


471



European & Russian Uncoated Papers


354


361


374



Brazilian Uncoated Papers


244


260


307



Indian Uncoated Papers


68


67


68



Printing Papers


1,114


1,158


1,220











(a)

Sales volumes include third party and inter-segment sales and exclude sales of equity investees.

(b)

Includes North American, European and Brazilian volumes and internal sales to mills.

(c)

Volumes for corrugated box sales reflect consumed tons sold (CTS). Board sales by these businesses reflect invoiced tons.

 

INTERNATIONAL PAPER COMPANY
Consolidated Balance Sheet
Preliminary and Unaudited
(In millions)



March 31, 2019


December 31, 2018

Assets





Current Assets





Cash and Temporary Investments


$                       641


$                       589

Accounts and Notes Receivable, Net


3,493


3,521

Contract Assets


410


395

Inventories


2,301


2,241

Other


217


250

Total Current Assets


7,062


6,996

Plants, Properties and Equipment, Net


13,071


13,067

Forestlands


401


402

Investments


1,770


1,648

Financial Assets of Special Purpose Entities


7,074


7,070

Goodwill


3,393


3,374

Right of Use Assets


415


Deferred Charges and Other Assets


992


1,019

Total Assets


$                  34,178


$                  33,576

Liabilities and Equity





Current Liabilities





Notes Payable and Current Maturities of Long-Term Debt


$                       809


$                       639

Accounts Payable and Other Current Liabilities


4,144


4,055

Total Current Liabilities


4,953


4,694

Long-Term Debt


9,965


10,015

Nonrecourse Financial Liabilities of Special Purpose Entities


6,300


6,298

Deferred Income Taxes


2,634


2,600

Pension Benefit Obligation


1,727


1,762

Postretirement and Postemployment Benefit Obligation


260


264

Long-term Lease Obligations


281


Other Liabilities


589


560

Equity





Invested Capital, Net of Treasury Stock


(765)


(103)

Retained Earnings


8,211


7,465

Total International Paper Shareholders' Equity


7,446


7,362

Noncontrolling interests


23


21

Total Equity


7,469


7,383

Total Liabilities and Equity


$                  34,178


$                  33,576

 

INTERNATIONAL PAPER COMPANY
Consolidated Statement of Cash Flows
Preliminary and Unaudited
(In millions)



Three Months Ended March 31,



2019


2018

Operating Activities





Net earnings (loss)


$                       426


$                            730

Depreciation, amortization and cost of timber harvested


315


325

Deferred income tax expense (benefit), net


22


157

Restructuring and other charges, net



22

Net gain on transfer of North American Consumer Packaging business



(516)

Net (gains) losses on sales and impairments of businesses


(7)


Equity method dividends received


6


116

Equity (earnings) losses, net


(114)


(95)

Periodic pension expense, net


26


42

Other, net


46


14

Changes in current assets and liabilities





Accounts and notes receivable


26


(122)

Contract assets


(15)


(22)

Inventories


(22)


21

Accounts payable and accrued liabilities


34


11

Interest payable


(25)


(34)

Other


15


14

Cash Provided By (Used For) Operating Activities


733


663

Investment Activities





Invested in capital projects


(293)


(489)

Acquisitions, net of cash acquired


(17)


Net settlement on transfer of North American Consumer Packaging business



1

Proceeds from divestitures, net of cash divested


17


Proceeds from sale of fixed assets


3


1

Other


(4)


(2)

Cash Provided By (Used For) Investment Activities


(294)


(489)

Financing Activities





Repurchases of common stock and payments of restricted stock tax withholding


(229)


(31)

Issuance of debt


208


223

Reduction of debt


(142)


(34)

Change in book overdrafts


(25)


(17)

Dividends paid


(201)


(197)

Cash Provided By (Used for) Financing Activities


(389)


(56)

Effect of Exchange Rate Changes on Cash


2


5

Change in Cash and Temporary Investments


52


123

Cash and Temporary Investments





Beginning of the period


589


1,018

End of the period


$                       641


$                         1,141

 

INTERNATIONAL PAPER COMPANY
Reconciliation of Cash Provided by Operations to Free Cash Flow
Preliminary and Unaudited
(In millions)










Three Months Ended
March 31,




2019


2018


Cash provided by (used for) Operating Activities


$

733


$

663


Adjustments:






Cash invested in capital projects


(293)


(489)


Free Cash Flow


$

440


$

174








Free cash flow is a non-GAAP measure and the most directly comparable GAAP measure is cash provided by operations. Management believes that free cash flow is useful to investors as a liquidity measure because it measures the amount of cash generated that is available, after reinvesting in the business, to maintain a strong balance sheet, pay dividends, repurchase stock, service debt and make investments for future growth. It should not be inferred that the entire free cash flow amount is available for discretionary expenditures. By adjusting for certain items that are not indicative of the Company's ongoing performance, free cash flow also enables investors to perform meaningful comparisons between past and present periods.



 

Cision

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