International Paper Reports Record Earnings
MEMPHIS, Tenn., Oct. 27 /PRNewswire-FirstCall/ — International Paper (NYSE: IP) today reported third -quarter 2010 net earnings attributable to common shareholders totaling $397 million ($0.91 per share) compared with $93 million ($0.21 per share) in the second quarter of 2010 and $371 million ($0.87 per share) in the third quarter of 2009. Amounts include the impact of special items in the second quarter of 2010 and the third quarter of 2009.
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Diluted Earnings Per Share Attributable to International Paper
Shareholders
--------------------------------------------------------------
Third Second Third
Quarter Quarter Quarter
2010 2010 2009
---- ---- ----
Net Earnings $0.91 $0.21 $0.87
Add Back - Net Special Items Expense
(Income) $0.00 $0.21 ($0.50)
----- ----- ------
Earnings Before Special Items $0.91 $0.42 $0.37
===== ===== =====
Quarterly net sales were $6.7 billion compared with $6.1 billion in the second quarter of 2010 and $5.9 billion in the third quarter of 2009.
Operating profits before special items were $752 million in the third quarter of 2010, up from $466 million in the second quarter of 2010 and $443 million in the third quarter of 2009.
“Our paper and packaging businesses delivered strong results, which led to record earnings,” said John Faraci, chairman and chief executive officer. “We continued to realize our announced price increases, realize restructuring benefits, operate well and improve our mix of business which led to strong margin expansion. As a result, free cash flow in the quarter was outstanding. We are well positioned to generate strong results in the fourth quarter and into 2011.”
SEGMENT INFORMATION
To measure the performance of the company’s business segments from quarter to quarter without variations caused by special items, management focuses on business segment operating profits excluding those items. Third quarter 2010 business segment operating profits and business trends compared with the prior quarter are as follows (special items were immaterial in the 2010 third quarter):
Industrial Packaging operating profits rose to $332 million versus $193 million ($192 million after special items) in the second quarter of 2010. Our North American operations generated record quarterly earnings, reflecting the realization of announced price increases for boxes and linerboard, fewer mill outages, improved input costs, and continued strong mill operations.
Printing Papers operating profits were $278 million versus $158 million ($47 million after special items) in the second quarter of 2010. Earnings for North American printing papers represent the second best quarterly earnings on record. Results were positively impacted by favorable pulp and paper pricing, reduced fixed costs, fewer mill outages, bad debt recovery, and increased shipments in the U.S. and Europe.
Consumer Packaging operating profits increased to $71 million compared with $49 million ($48 million after special items) in the second quarter of 2010. Our North American coated paperboard business generated record quarterly earnings. Results benefited from higher volumes, further realization of announced price increases, and fewer maintenance outages.
xpedx, the company’s distribution business, reported operating profits of $22 million, down from $26 million in the second quarter of 2010. Higher sales volumes were offset by lower margins and increased overhead costs.
Forest Products earnings were $49 million, up from $40 million in the second quarter due to the sale of the majority of our remaining land portfolio.
Net corporate expenses totaled $58 million for the 2010 third quarter, essentially in line with the $54 million in the 2010 second quarter.
Effective Tax Rate
The effective third quarter tax rate was 31 percent, compared with an effective tax rate before special items of 31 percent in the second quarter of 2010 and 30 percent in the third quarter of 2009.
Effects of Special Items
Special items in the second quarter of 2010 included a pre-tax charge of $144 million ($88 million after taxes) for restructuring and other charges. Restructuring and other charges included a $111 million pre-tax charge ($68 million after taxes) associated with the closure of the Franklin mill (including $46 million of accelerated depreciation charges and $36 million related to environmental reserves), an $18 million pre-tax charge ($11 million after taxes) for early debt extinguishment costs, a pre-tax charge of $11 million ($7 million after taxes) for an Ohio Commercial Activity tax adjustment and pre-tax charges of $4 million ($2 million after taxes) for other items.
Special items in the third quarter of 2009 included a $525 million pre-tax credit ($320 million after taxes) for alternative fuel mixture credits earned under 2007 legislation enacted to provide a tax credit for companies that use alternative fuel mixtures to produce renewable energy to operate their businesses, an $18 million pre-tax charge ($11 million after taxes) for integration costs associated with the Industrial Packaging business integration, and a pre-tax charge of $151 million ($95 million after taxes) for restructuring and other charges. Restructuring and other charges included a pre-tax charge of $102 million ($62 million after taxes) for early debt extinguishment costs, a $39 million pre-tax charge ($24 million after taxes) for severance and benefit costs associated with the company’s 2008 overhead reduction program, and a $10 million pre-tax charge ($9 million after taxes) for facility closure costs.
Earnings Webcast
The company will host a webcast to discuss earnings and current market conditions at 9 a.m. EDT (8 a.m. CDT) today. All interested parties are invited to listen to the webcast via the company’s Internet site at http://www.internationalpaper.com by clicking on the Investors tab and going to the Webcasts and Presentations page. A replay of the webcast will also be on the Web site 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 Third Quarter Earnings Call. The conference ID number is 11919083. Participants should call in no later than 8:45 a.m. EDT (7:45 a.m. CDT). An audio-only replay will be available for four weeks following the call. To access the replay, dial +1 (706) 645-9291 or, within the U.S. only, (800) 642-1687, and when prompted for the conference ID, enter “11919083.”
International Paper (NYSE: IP) is a global paper and packaging company with manufacturing operations in North America, Europe, Latin America, Russia, Asia and North Africa. Its businesses include uncoated papers and industrial and consumer packaging, complemented by xpedx, the company’s North American distribution company. Headquartered in Memphis, Tenn., the company employs about 60,000 people in more than 20 countries and serves customers worldwide. 2009 net sales were more than $23 billion. For more information about International Paper, its products and stewardship efforts, visit internationalpaper.com.
This press release contains 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 relate to: (i) increases in interest rates; (ii) industry conditions, including but not limited to changes in the cost or availability of raw materials, energy and transportation costs, competition we face, cyclicality and changes in consumer preferences, demand and pricing for its 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 environmental and other governmental regulations and to actual or potential litigation; and (v) whether we experience a material disruption at one of our manufacturing facilities and risks inherent in conducting business through a joint venture. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. These and other factors that could cause or contribute to actual results differing materially from such forward looking statements are discussed in greater detail in the company’s Securities and Exchange Commission filings.
INTERNATIONAL PAPER COMPANY
Consolidated Statement of Operations
Preliminary and Unaudited
(In millions, except per share amounts)
Three Months Ended
September 30,
2010 2009 Notes
---- -----
Net Sales $6,720 $5,919
Costs and Expenses
Cost of products sold 4,758 3,758 (a)
Selling and administrative expenses 504 527 (b)
Depreciation, amortization and cost of
timber harvested 362 378
Distribution expenses 339 299
Taxes other than payroll and income
taxes 58 48
Restructuring and other charges - 151 (c)
Net losses on sales and impairments of
businesses - -
Interest expense, net 152 169
Earnings From Continuing Operations
Before Income Taxes and
Equity Earnings
547 589 (a-c)
Income tax provision 170 212
Equity earnings (losses), net of taxes 22 -
Net Earnings $399 $377 (a-c)
Less: Net earnings attributable to
noncontrolling interests 2 6
--- ---
Net Earnings Attributable to
International Paper Company $397 $371 (a-c)
Basic Earnings Per Common Share
Attributable to
International Paper Common
Shareholders $0.92 $0.87 (a-c)
Diluted Earnings Per Common Share
Attributable to
International Paper Common
Shareholders $0.91 $0.87 (a-c)
Average Shares of Common Stock
Outstanding -Diluted 433.8 428.7
Cash Dividends Per Common Share $0.125 $0.025
------------------------------- ------ ------
Three Months
Ended
June 30,
Notes 2010
----- ----
Net Sales $6,121
Costs and Expenses
Cost of products sold 4,490
Selling and administrative expenses 472
Depreciation, amortization and cost of
timber harvested 363
Distribution expenses 330
Taxes other than payroll and income
taxes 47
Restructuring and other charges 144 (d)
Net losses on sales and impairments of
businesses -
Interest expense, net 157
Earnings From Continuing Operations
Before Income Taxes and
Equity Earnings
118 (d)
Income tax provision 25
Equity earnings (losses), net of taxes 7
Net Earnings $100 (d)
Less: Net earnings attributable to
noncontrolling interests 7
Net Earnings Attributable to
International Paper Company $93 (d)
Basic Earnings Per Common Share
Attributable to
International Paper Common
Shareholders $0.22 (d)
Diluted Earnings Per Common Share
Attributable to
International Paper Common
Shareholders $0.21 (d)
Average Shares of Common Stock
Outstanding -Diluted 433.4
Cash Dividends Per Common Share $0.125
------------------------------- ------
Nine Months Ended
September 30,
2010 2009 Notes
---- ---- -----
Net Sales $18,648 $17,389
Costs and Expenses
Cost of products sold 13,712 11,270 (g)
Selling and administrative
expenses 1,397 1,535 (h)
Depreciation, amortization
and cost of timber harvested 1,096 1,088
Distribution expenses 986 857
Taxes other than payroll and
income taxes 150 145
Restructuring and other
charges 359 (e) 313 (i)
Net losses on sales and
impairments of businesses - 48 (j)
Interest expense, net 458 506
Earnings From Continuing
Operations Before Income
Taxes and
Equity Earnings
490 (e) 1,627 (g-j)
Income tax provision 171 (f) 790 (k)
Equity earnings (losses), net
of taxes 27 (59)
Net Earnings $346 (e,f) $778 (g-k)
Less: Net earnings
attributable to
noncontrolling interests 18 14
Net Earnings Attributable to
International Paper Company $328 (e,f) $764 (g-k)
Basic Earnings Per Common
Share Attributable to
International Paper Common
Shareholders $0.76 (e,f) $1.80 (g-k)
Diluted Earnings Per Common
Share Attributable to
International Paper Common
Shareholders $0.76 (e,f) $1.79 (g-k)
Average Shares of Common
Stock Outstanding -Diluted 433.8 426.6
Cash Dividends Per Common
Share $0.275 $0.300
------------------------- ------ ------
The accompanying notes are an integral part of this consolidated
statement of operations.
(a) Includes a pre-tax gain of $525 million ($320 million after taxes)
related to alternative fuel mixture credits.
(b) Includes a pre-tax charge of $18 million ($11 million after taxes)
for integration costs associated with the Containerboard, Packaging and
Recycling business (CBPR) acquired from Weyerhaeuser Company in August
2008.
(c) Includes a pre-tax charge of $39 million ($24 million after taxes) for
severance and benefit costs associated with the Company's 2008 overhead
cost reduction initiative, a pre-tax charge of $102 million ($62 million
after taxes) for early debt extinguishment costs, a charge of $7 million
(before and after taxes) for costs associated with the planned closure of
the Etienne mill in France and a pre-tax charge of $3 million ($2 million
after taxes) for other items.
(d) Includes a pre-tax charge of $111 million ($68 million after taxes)
for shutdown costs for the Franklin mill (including $46 million of
accelerated depreciation and $36 million of environmental closure costs),
a pre-tax charge of $18 million ($11 million after taxes) for early debt
extinguishment costs, a pre-tax charge of $11 million ($7 million after
taxes) for an Ohio Commercial Activity tax adjustment and pre-tax charges
of $4 million ($2 million after taxes) for other items.
(e) Includes a pre-tax charge of $315 million ($192 million after taxes)
for shutdown costs for the Franklin mill (including $236 million of
accelerated depreciation and $36 million of environmental closure costs),
a pre-tax charge of $22 million ($13 million after taxes) for early debt
extinguishment costs, a pre-tax charge of $11 million ($7 million after
taxes) for an Ohio Commercial Activity tax adjustment, a pre-tax charge of
$4 million ($2 million after taxes) for costs associated with the
reorganization of the Company's Shorewood operations and charges of $7
million ($6 million after taxes) for other items.
(f) Includes a $14 million tax expense and a $32 million tax expense for incentive compensation and Medicare Part D deferred tax write-offs, respectively.
(g) Includes a pre-tax gain of $1.5 billion ($944 million after taxes)
related to alternative fuel mixture credits.
(h) Includes a pre-tax charge of $72 million ($44 million after taxes)
for integration costs associated with the CBPR business.
(i) Includes a pre-tax charge of $125 million ($77 million after taxes)
for severance and benefit costs associated with the Company's 2008
overhead cost reduction initiative, a pre-tax charge of $23 million ($28
million after taxes) for closure costs associated with the Inverurie,
Scotland mill, a pre-tax charge of $127 million ($78 million after taxes)
for early debt extinguishment costs, a charge of $22 million (before and
after taxes) for severance and other costs associated with the planned
closure of the Etienne mill, and a pre-tax charge of $16 million ($10 million after taxes) for other items.
(j) Includes a charge of $48 million (before and after taxes) to write
down the assets at the Etienne mill to estimated fair value.
(k) Includes a $156 million tax expense for the write off of deferred tax
assets in France and a $26 million tax benefit related to the closing of
the 2004 and 2005 U.S. federal income tax audit, and related state income
tax effects.
International Paper Company
Reconciliation of Earnings Before Special Items to Net Earnings
Attributable to International Paper Company
Preliminary and Unaudited
(In millions except for per share amounts)
Three Months Ended Three Months Ended Nine Months Ended
September 30, June 30, September 30,
------------- -------------
2010 2009 2010 2010 2009
---- ---- ---- ---- ----
Earnings Before
Special Items $397 $157 $181 $594 $277
Restructuring and
other charges - (95) (88) (220) (215)
CBPR business
integration costs - (11) - - (44)
Alternative fuel
mixture credits - 320 - - 944
Net losses on
sales and
impairments of
businesses - - - - (48)
Income tax
adjustments - - - (46) (150)
Net Earnings as
Reported $397 $371 $93 $328 $764
==== ==== === ==== ====
Three Months Ended Three Months Ended Nine Months Ended
September 30, June 30, September 30,
------------- -------------
Diluted Earnings
per Common
Share 2010 2009 2010 2010 2009
---- ---- ---- ---- ----
Earnings Per Share
Before Special
Items 91 $0.37 $0.42 $1.37 $0.65
Restructuring and
other charges - (0.22) (0.21) (0.51) (0.50)
CBPR business
integration costs - (0.03) - - (0.11)
Alternative fuel
mixture credits - 0.75 - - 2.21
Net losses on
sales and
impairments of
businesses - - - - (0.11)
Income tax
adjustments - - - (0.10) (0.35)
Diluted Earnings
per Common Share
as Reported $0.91 $0.87 $0.21 $0.76 $1.79
===== ===== ===== ===== =====
Notes:
(1) The Company calculates Earnings Before Special Items by excluding
the after-tax effect of items considered by management to be
unusual from the earnings reported under U.S. generally accepted
accounting principles ("GAAP"). Management uses this measure to
focus on on-going operations, and believes that it is useful to
investors because it enables them to perform meaningful comparisons
of past and present operating results. International Paper believes
that using this information, along with net earnings, provides for a
more complete analysis of the results of operations by quarter. Net
earnings is the most directly comparable GAAP measure.
(2) Since diluted earnings per share are computed independently for
each period, nine-month per share amounts may not equal the sum of
the respective quarters.
International Paper
Sales and Earnings by Industry Segment
Preliminary and Unaudited
(In Millions)
Sales by Industry Segment
Three
Three Months Months
Ended Ended
September 30, June 30,
-------------
2010 2009 2010
---- ---- ----
Industrial Packaging $2,610 $2,230 $2,440
Printing Papers 1,550 1,470 1,445
Consumer Packaging 870 790 845
Distribution 1,755 1,665 1,630
Forest Products 205 5 5
Corporate and Inter-
segment Sales (270) (241) (244)
---- ---- ----
Net Sales $6,720 $5,919 $6,121
====== ====== ======
Sales by Industry Segment
Nine Months
Ended
September 30,
-------------
2010 2009
---- ----
Industrial Packaging $7,270 $6,680
Printing Papers 4,400 4,155
Consumer Packaging 2,520 2,275
Distribution 4,965 4,850
Forest Products 220 20
Corporate and Inter-segment Sales (727) (591)
---- ----
Net Sales $18,648 $17,389
======= =======
Operating Profit by Industry Segment
Three
Three Months Months
Ended Ended
September 30, June 30,
-------------
2010 2009 2010
---- ---- ----
Industrial Packaging $332 $410 (2,3,4) $192 (7)
Printing Papers 278 363 (2,5) 47 (8)
Consumer Packaging 71 144 (2,6) 48 (6)
Distribution 22 21 26
Forest Products 49 2 40
--- --- ---
Operating Profit (1) 752 940 353
Interest expense, net (152) (169) (157)
Noncontrolling
interest/equity
earnings adjustment
(9) 5 5 7
Corporate items, net (58) (46) (54)
Restructuring and
other charges - (141) (31)
--- ---- ---
Earnings From
Continuing
Operations
Before Income Taxes
and Equity Earnings $547 $589 $118
==== ==== ====
Equity Earnings
(Loss) in Ilim
Holdings S.A.,
Net of Taxes (1) $22 $ - $5
=== === ===
Nine Months
Ended
September 30,
-------------
2010 2009
---- ----
Industrial Packaging $565 (7) $1,152 (2,3,4)
Printing Papers 247 (8) 954 (2,5)
Consumer Packaging 147 (6) 370 (2,6)
Distribution 69 24
Forest Products 97 7
--- ---
Operating Profit (1) 1,125 2,507
Interest expense, net (458) (506)
Noncontrolling interest/equity
earnings adjustment (9) 20 19
Corporate items, net (163) (141)
Restructuring and other charges (34) (252)
--- ----
Earnings From Continuing Operations
Before Income Taxes and Equity
Earnings $490 $1,627
==== ======
Equity Earnings (Loss) in Ilim
Holdings S.A.,
Net of Taxes (1) $24 $(56)
=== ====
(1) In addition to the operating profits shown above, International Paper
recorded equity earnings, net of taxes, of $22 million, $0 million
and $5 million for the three months ended September 30, 2010,
September 30, 2009 and June 30, 2010, respectively, and $24 million
for the nine months ended September 30, 2010; and equity losses, net
of taxes, of $56 million for the nine months ended September 30,
2009, related to the equity investment in Ilim Holdings S.A., a
separate reportable industry segment.
(2) Includes gains of $221 million in the Industrial Packaging segment,
$226 million in the Printing Papers segment, and $78 million in the
Consumer Packaging segment for the three months ended September 30,
2009, and gains of $637 million in the Industrial Packaging segment,
$663 million in the Printing Papers segment, and $247 million in the
Consumer Packaging segment for the nine months ended September 30,
2009, relating to alternative fuel mixture credits.
(3) Includes charges of $18 million for the three months ended September
30, 2009, and $72 million for the nine months ended September 30,
2009, for CBPR integration costs.
(4) Includes charges of $7 million and $22 million for the three and
nine months ended September 30, 2009, respectively, for severance
and other costs related to the planned closure of the Etienne mill
and $48 million for the nine months ended September 30, 2009 to
write down the assets at the Etienne mill in France to estimated
fair value.
(5) Includes charges of $1 million and $11 million for the three and nine
months ended September 30, 2009, respectively, for shutdown costs
for the Louisiana mill and the Franklin lumber mill, sheet
converting plant and converting innovations center, and a charge of
$23 million for the nine months ended September 30, 2009 for the
closure of the Inverurie, Scotland mill.
(6) Includes charges of $2 million and $1 million for the three months
ended September 30, 2009 and June 30, 2010, respectively, and $4
million and $5 million for the nine months ended September 30, 2010
and September 30, 2009, respectively, related to the reorganization
of the Company's Shorewood operations.
(7) Includes charges of $1 million and $3 million for additional closure
costs for the Etienne mill in France for the three and nine months
ended June 30, 2010 and September 30, 2010, respectively; and $3
million of additional closure costs for U.S. mills for the nine
months ended September 30, 2010.
(8) Includes charges of $111 million and $315 million for the three and
nine months ended June 30, 2010 and September 30, 2010,
respectively, for shutdown costs for the Franklin mill.
(9) 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 interest and equity earnings for these subsidiaries
are adjusted here to present consolidated earnings before income
taxes and equity earnings.
International Paper Company
Reconciliation of Operating Profit to Operating Profit Before Special
Items
(In millions)
Three Months Ended September 30, 2010
-------------------------------------
Industrial Printing Consumer Forest
Packaging Papers Packaging Distribution Products Total
--------- ------ --------- ------------ -------- -----
Operating
Profit as
Reported 332 278 71 22 49 752
Restructuring
and other
charges - - - - - -
Operating
Profit
Before
Special
Items 332 278 71 22 49 752
=== === === === === ===
Three Months Ended June 30, 2010
--------------------------------
Industrial Printing Consumer Forest
Packaging Papers Packaging Distribution Products Total
--------- ------ --------- ------------ -------- -----
Operating
Profit as
Reported 192 47 48 26 40 353
Restructuring
and other
charges 1 111 1 - - 113
Operating
Profit
Before
Special
Items 193 158 49 26 40 466
=== === === === === ===
Three Months Ended September 30, 2009
-------------------------------------
Industrial Printing Consumer Forest
Packaging Papers Packaging Distribution Products Total
--------- ------ --------- ------------ -------- -----
Operating
Profit
as
Reported 410 363 144 21 2 940
Restructuring
and
other
charges 7 1 2 - - 10
Alternative
fuel
mixture
credits (221) (226) (78) (525)
CBPR
business
integration
costs 18 18
Operating
Profit
Before
Special
Items 214 138 68 21 2 443
=== === === === === ===
International Paper
Sales Volume by Product (1)
Preliminary and Unaudited
International Paper Consolidated
Three
Three Months Months Nine Months
Ended Ended Ended
September 30, June 30, September 30,
------------- -------- -------------
2010 2009 2010 2010 2009
---- ---- ---- ---- ----
Industrial
Packaging (In
thousands of
short tons)
Corrugated
Packaging 1,928 1,856 1,956 5,693 5,531
Containerboard 634 580 602 1,867 1,581
Recycling 636 566 644 1,860 1,759
Saturated Kraft 45 33 50 136 83
Bleached Kraft 23 22 21 66 52
European
Industrial
Packaging 251 252 259 768 790
Asian Box 114 43 44 197 109
Asian
Distribution 87 157 82 270 318
--- --- --- --- ---
Industrial
Packaging 3,718 3,509 3,658 10,857 10,223
----- ----- ----- ------ ------
Printing Papers
(In thousands
of short tons)
U.S. Uncoated
Papers 684 753 667 2,051 2,148
European &
Russian
Uncoated Papers 311 304 310 929 1,006
Brazilian
Uncoated Papers 262 282 282 792 696
Asian Uncoated
Papers 24 25 19 75 40
--- --- --- ---
Uncoated Papers 1,281 1,364 1,278 3,847 3,890
----- ----- ----- ----- -----
Market Pulp (2) 385 422 317 1,053 1,114
--- --- --- ----- -----
Consumer
Packaging (In
thousands of
short tons)
U.S. Coated
Paperboard 364 324 354 1,057 932
European Coated
Paperboard 88 86 86 264 265
Asian Coated
Paperboard 213 221 217 651 628
Other Consumer
Packaging 45 42 44 129 130
--- --- --- --- ---
Consumer
Packaging 710 673 701 2,101 1,955
--- --- --- ----- -----
(1) Sales volumes include third party and inter-segment sales and
exclude sales of equity investees.
(2) Includes internal sales to mills.
INTERNATIONAL PAPER COMPANY
Consolidated Balance Sheet
Preliminary and Unaudited
(In Millions)
September 30, December 31,
2010 2009
---- ----
Assets
Current Assets
Cash and Temporary Investments $1,429 $1,892
Accounts and Notes Receivable, Net 3,310 2,695
Inventories 2,336 2,179
Deferred Income Tax Assets 330 368
Other 403 417
--- ---
Total Current Assets 7,808 7,551
----- -----
Plants, Properties and Equipment,
Net 12,030 12,688
Forestlands 730 757
Investments 1,065 1,077
Goodwill 2,285 2,290
Deferred Charges and Other Assets 1,171 1,185
----- -----
Total Assets $25,089 $25,548
======= =======
Liabilities and Equity
Current Liabilities
Notes Payable and Current
Maturities
of Long-Term Debt $312 $304
Accounts Payable and Accrued
Liabilities 4,206 3,708
----- -----
Total Current Liabilities 4,518 4,012
----- -----
Long-Term Debt 8,428 8,729
Deferred Income Taxes 2,759 2,425
Pension Benefit Obligation 1,607 2,765
Postretirement and Postemployment
Benefit Obligation 517 538
Other Liabilities 622 824
Equity
Invested Capital 4,234 4,074
Retained Earnings 2,154 1,949
----- -----
Total Shareholders' Equity 6,388 6,023
----- -----
Non-controlling interests 250 232
--- ---
Total Equity 6,638 6,255
----- -----
Total Liabilities and Equity $25,089 $25,548
======= =======
INTERNATIONAL PAPER COMPANY
Consolidated Statement of Cash Flows
Preliminary and Unaudited
(In Millions)
Nine Months Ended
September 30,
-------------
2010 2009
---- ----
Operating Activities
Net earnings $346 $778
Depreciation, amortization and cost of timber
harvested 1,096 1,088
Cost of timberlands sold 143 -
Deferred income tax expense, net 397 585
Restructuring and other charges 359 313
Payments related to restructuring and legal
reserves (2) (35)
Pension plan contribution (1,150) -
Net losses on sales and impairments of
businesses - 48
Equity (earnings) loss, net (27) 59
Periodic pension expense, net 174 160
Alternative fuel mixture credits receivable - (251)
Other, net (57) 140
Changes in current assets and liabilities
Accounts and notes receivable (555) 466
Inventories (181) 262
Accounts payable and accrued liabilities 126 (38)
Interest payable 49 21
Other (131) (26)
---- ---
Cash Provided by Operations 587 (1) 3,570
--- -----
Investment Activities
Invested in capital projects (457) (367)
Acquisitions, net of cash received (152) (17)
Other (2) (59)
--- ---
Cash Used for Investment Activities (611) (443)
---- ----
Financing Activities
Repurchases of common stock and payments of
restricted stock tax withholding (26) (10)
Issuance of debt 177 2,490
Reduction of debt (505) (4,911)
Change in book overdrafts 80 (5)
Dividends paid (120) (129)
Other (24) (113)
--- ----
Cash Used for Financing Activities (418) (2,678)
Effect of Exchange Rate Changes on Cash (21) 59
--- ---
Change in Cash and Temporary Investments (463) 508
Cash and Temporary Investments
Beginning of the period 1,892 1,144
----- -----
End of the period $1,429 $1,652
====== ======
(1) Includes $132 million and $1.3 billion of cash received from
alternative fuel mixture credits in the nine months ended September
30, 2010 and 2009, respectively.
SOURCE International Paper