International Paper (IP) 10-K risk factor changes: FY2018 vs FY2017

| ý | | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the fiscal year ended December 31, [removed: 2017] [added: 2018] |

Indicate by check mark whether the registrant has submitted electronically [removed: and posted on its corporate Website, if any,] every Interactive Data File required to be submitted [removed: and posted] pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit [removed: and post] such files).

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (section [removed: 229.405)] [added: 229.405 of this chapter)] is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated [removed: filer or] [added: filer,] a smaller reporting [added: company or an emerging growth] company.

See definitions of “large accelerated filer,” “accelerated [removed: filer” and] [added: filer,”] “smaller reporting [removed: company”] [added: company,” and "emerging growth company"] in Rule 12b-2 of the Exchange Act.

The aggregate market value of the Company’s outstanding common stock held by non-affiliates of the registrant, computed by reference to the closing price as reported on the New York Stock Exchange, as of the last business day of the registrant’s most recently completed second fiscal quarter (June 30, [removed: 2017)] [added: 2018)] was approximately [removed: $23,247,397,657.][added: $21,249,006,136.]

The number of shares outstanding of the Company’s common stock as of February [removed: 16, 2018] [added: 15, 2019] was [removed: 412,940,532.][added: 400,236,119.]

Portions of the registrant’s proxy statement filed within 120 days of the close of the registrant’s fiscal year in connection with registrant’s [removed: 2018] [added: 2019] annual meeting of shareholders are incorporated by reference into Part III of this Form 10-K.

FOR THE YEAR ENDED DECEMBER 31, [removed: 2017][added: 2018]

| ITEM 1. | [removed: [BUSINESS.](#s62974B48D044FDD5D0B5149D6C667E87)] [added: [BUSINESS.](#sBDD83C6D92A65EA28CCDA18E32570417)] | [removed: [1](#s62974B48D044FDD5D0B5149D6C667E87)] [added: [1](#sBDD83C6D92A65EA28CCDA18E32570417)] |

| | [Competition and [removed: Costs](#s0F63BA0172D2A3AB2814149D6D2114F4)] [added: Costs](#s1DB4AD09290B566E87D71B07C5DC02B7)] | [removed: [1](#s0F63BA0172D2A3AB2814149D6D2114F4)] [added: [1](#s1DB4AD09290B566E87D71B07C5DC02B7)] |

| | [Marketing and [removed: Distribution](#s38EDB7E844EA22C222BA149D6D40F977)] [added: Distribution](#s23309035195C580D854CB037291B5C70)] | [removed: [2](#s38EDB7E844EA22C222BA149D6D40F977)] [added: [1](#s23309035195C580D854CB037291B5C70)] |

| | [Description of Principal [removed: Products](#sA9818ACE5B8B06191C90149D6D6FB101)] [added: Products](#s9A526804EF2A5D8EA7D7F1C27CD1E901)] | [removed: [2](#sA9818ACE5B8B06191C90149D6D6FB101)] [added: [1](#s9A526804EF2A5D8EA7D7F1C27CD1E901)] |

| | [Sales Volumes by [removed: Product](#sE4C28E6A87F5F840106B149D62679143)] [added: Product](#s9F86A766FBD858D7BC6915B35A6CF14C)] | [removed: [2](#sE4C28E6A87F5F840106B149D62679143)] [added: [2](#s9F86A766FBD858D7BC6915B35A6CF14C)] |

| | [Research and [removed: Development](#sA00EF1DA36E7CCFC05C4149D6DBD676B)] [added: Development](#s5D0C353B84DC5E779EF3B754842349F4)] | [removed: [3](#sA00EF1DA36E7CCFC05C4149D6DBD676B)] [added: [2](#s5D0C353B84DC5E779EF3B754842349F4)] |

| | [Environmental [removed: Protection](#s9015AE2902A6CC0E6C79149D6DDC770F)] [added: Protection](#s17952E9A5DC75D12B51D5F7BAFE0F9A8)] | [removed: [3](#s9015AE2902A6CC0E6C79149D6DDC770F)] [added: [3](#s17952E9A5DC75D12B51D5F7BAFE0F9A8)] |

| | [Climate [removed: Change](#s559ED22D6647BA877445149D6E1AAA8E)] [added: Change](#s915D79FCC30E5430A2308A0432683B52)] | [removed: [3](#s559ED22D6647BA877445149D6E1AAA8E)] [added: [3](#s915D79FCC30E5430A2308A0432683B52)] |

| | [Executive Officers of the [removed: Registrant](#sFEBC1D90EB01AF4E8465149D6E686F22)] [added: Registrant](#s9E0B77AEF081540AADE51FE964424A17)] | [removed: [5](#sFEBC1D90EB01AF4E8465149D6E686F22)] [added: [4](#s9E0B77AEF081540AADE51FE964424A17)] |

| | [Raw [removed: Materials](#s89CA8E48E58629733FE2149D6E88F439)] [added: Materials](#s9C555B7D731A53D7B671A27370020D3C)] | [removed: [6](#s89CA8E48E58629733FE2149D6E88F439)] [added: [5](#s9C555B7D731A53D7B671A27370020D3C)] |

| | [Forward-looking [removed: Statements](#s1764D7F1DAE3824AD108149D6EB63B98)] [added: Statements](#s9982E81FEC80599AA8D635AB16A702B6)] | [removed: [6](#s1764D7F1DAE3824AD108149D6EB63B98)] [added: [5](#s9982E81FEC80599AA8D635AB16A702B6)] |

| ITEM 1A. | [RISK [removed: FACTORS.](#sD129D40EAB2F61B6958D149D6ED60B7C)] [added: FACTORS.](#sB9F4A1BBF6A15AAAA69289E9A3FC519E)] | [removed: [7](#sD129D40EAB2F61B6958D149D6ED60B7C)] [added: [6](#sB9F4A1BBF6A15AAAA69289E9A3FC519E)] |

| ITEM 1B. | [UNRESOLVED STAFF [removed: COMMENTS.](#s19B0F834B06AC51C4420149D6F04DB9C)] [added: COMMENTS.](#s02D8D7AE3B29537C875FC03B9CC91AE4)] | [removed: [11](#s19B0F834B06AC51C4420149D6F04DB9C)] [added: [10](#s02D8D7AE3B29537C875FC03B9CC91AE4)] |

| ITEM 2. | [removed: [PROPERTIES.](#s25842F2933EC138468E7149D6F33E907)] [added: [PROPERTIES.](#s6DECC16FFEC4564AA36FBF8BFFC753E7)] | [removed: [11](#s25842F2933EC138468E7149D6F33E907)] [added: [10](#s6DECC16FFEC4564AA36FBF8BFFC753E7)] |

| | [Mills and [removed: Plants](#s3337372147C2DFA10385149D6F81E474)] [added: Plants](#sA6BE83C9F957523BB6A5DB8925F00045)] | [removed: [11](#s3337372147C2DFA10385149D6F81E474)] [added: [11](#sA6BE83C9F957523BB6A5DB8925F00045)] |

| | [Capital Investments and [removed: Dispositions](#s7D3A95345FBCB2CE8F22149D6FB07749)] [added: Dispositions](#sF5477B88DC1751F5B86A673825CF7D33)] | [removed: [11](#s7D3A95345FBCB2CE8F22149D6FB07749)] [added: [11](#sF5477B88DC1751F5B86A673825CF7D33)] |

| ITEM 3. | [LEGAL [removed: PROCEEDINGS.](#sABB0CF4C50C85637809A149D6FDFAD44)] [added: PROCEEDINGS.](#s0EDC233F6E5255F3B9F2F5B87BEE9BE8)] | [removed: [11](#sABB0CF4C50C85637809A149D6FDFAD44)] [added: [11](#s0EDC233F6E5255F3B9F2F5B87BEE9BE8)] |

| ITEM 4. | [MINE SAFETY [removed: DISCLOSURES.](#s194D617E473395FA21C5149D700E9EA9)] [added: DISCLOSURES.](#sBC48ACBBE7675E1C8815C855FC44B6DB)] | [removed: [11](#s194D617E473395FA21C5149D700E9EA9)] [added: [11](#sBC48ACBBE7675E1C8815C855FC44B6DB)] |

| PART II. | | [removed: [12](#s12881C628959C91A7B71149D702DAE9C)] [added: [11](#sA82F72DB5F925DE4879922AD045439FF)] |

| ITEM 5. | [MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY [removed: SECURITIES.](#sBE18846D631C3E02134F149D705C0808)] [added: SECURITIES.](#s80A069BB7D155A6FA318A5EC19030D00)] | [removed: [12](#sBE18846D631C3E02134F149D705C0808)] [added: [11](#s80A069BB7D155A6FA318A5EC19030D00)] |

| ITEM 6. | [SELECTED FINANCIAL [removed: DATA.](#s7E2FD5E819ECD5C9E169149D612FDDD1)] [added: DATA.](#s8BBB226B29515C79A0D5B048B7E7E3E6)] | [removed: [14](#s7E2FD5E819ECD5C9E169149D612FDDD1)] [added: [13](#s8BBB226B29515C79A0D5B048B7E7E3E6)] |

| ITEM 7. | [MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF [removed: OPERATIONS.](#s0F28FB50E27675CAC6CF149D71468C47)] [added: OPERATIONS.](#sBE734AA823055715BB48961CEF1ED6CB)] | [removed: [17](#s0F28FB50E27675CAC6CF149D71468C47)] [added: [17](#sBE734AA823055715BB48961CEF1ED6CB)] |

| | [Executive [removed: Summary](#sB99BFA1E634CE1ABD7B7149D64F6445F)] [added: Summary](#s2074DAB86D305420A9AC57C560058529)] | [removed: [17](#sB99BFA1E634CE1ABD7B7149D64F6445F)] [added: [17](#s2074DAB86D305420A9AC57C560058529)] |

| | [Results of [removed: Operations](#sE221436ED19037E79F62149D6757801D)] [added: Operations](#s85AE34BE01135B41A9ACCF5F9E0FB7AE)] | [removed: [20](#sE221436ED19037E79F62149D6757801D)] [added: [20](#s85AE34BE01135B41A9ACCF5F9E0FB7AE)] |

| | [Liquidity and Capital [removed: Resources](#s83C88A784A9415CC771F149D60C2D402)] [added: Resources](#s07BB0398713E550FA4F16B0AE0C11A23)] | [removed: [27](#s83C88A784A9415CC771F149D60C2D402)] [added: [28](#s07BB0398713E550FA4F16B0AE0C11A23)] |

| | [Critical Accounting Policies and Significant Accounting [removed: Estimates](#s20E827B67AF926D3286B149D61EA9428)] [added: Estimates](#s73AC5C634789504E82264808BFD8ABA3)] | [removed: [31](#s20E827B67AF926D3286B149D61EA9428)] [added: [32](#s73AC5C634789504E82264808BFD8ABA3)] |

| | [Recent Accounting [removed: Developments](#sF0662F648BEF470ED0FC149D72EB725B)] [added: Developments](#s4698C9532F435CDA8F1D0B4437DCB4F0)] | [removed: [35](#sF0662F648BEF470ED0FC149D72EB725B)] [added: [34](#s4698C9532F435CDA8F1D0B4437DCB4F0)] |

| | [Legal [removed: Proceedings](#s2E90DECF87FCED8A5F2E149D72EBCB2D)] [added: Proceedings](#s71CC03C877005C6D8E3E22155E38328F)] | [removed: [35](#s2E90DECF87FCED8A5F2E149D72EBCB2D)] [added: [34](#s71CC03C877005C6D8E3E22155E38328F)] |

| | [Effect of [removed: Inflation](#s7F88296846636B91ACD3149D731A1B1A)] [added: Inflation](#sE99CDB0A2DC95517918B794D746A6E69)] | [removed: [35](#s7F88296846636B91ACD3149D731A1B1A)] [added: [34](#sE99CDB0A2DC95517918B794D746A6E69)] |

| | [Foreign Currency [removed: Effects](#s99430F587C5D5DD9445D149D7348CF23)] [added: Effects](#sCA5B71A859355A938382A5FFDB5E6C06)] | [removed: [35](#s99430F587C5D5DD9445D149D7348CF23)] [added: [35](#sCA5B71A859355A938382A5FFDB5E6C06)] |

| | [Market [removed: Risk](#sE115A9505E276D52C022149D7368E391)] [added: Risk](#s5DC6633005465A1EAA937BBA2DCE0A1F)] | [removed: [35](#sE115A9505E276D52C022149D7368E391)] [added: [35](#s5DC6633005465A1EAA937BBA2DCE0A1F)] |

10-K 1 a10-k123118.htm 10-K

| | | | | | | | | |

| PART I. | | [1](#s94CC072AFE6654D08153F4D26F64D83C) |

| | [General](#sEFD92E0764E150248A49671212F77E00) | [1](#sEFD92E0764E150248A49671212F77E00) |

| | [Employees](#sE150243BE5E15AA8B6C5FCD9AA0AB5A3) | [4](#sE150243BE5E15AA8B6C5FCD9AA0AB5A3) |

| | [Forestlands](#s8CAFB85C7C4B5F0682082F3C84E9FD58) | [10](#s8CAFB85C7C4B5F0682082F3C84E9FD58) |

| | [Description of Business Segments](#s5323F2674F8352F8892E63F0D415BABF) | [23](#s5323F2674F8352F8892E63F0D415BABF) |

| | [Business Segment Results](#sF2B7603531015B45A7CDEE9FFE5BDD12) | [24](#sF2B7603531015B45A7CDEE9FFE5BDD12) |

FOR THE YEAR ENDED DECEMBER 31, 2018

| | [SIGNATURES](#s6A40500C8EBC50A5B907CF6939018A0F) | [89](#s6A40500C8EBC50A5B907CF6939018A0F) |

[PART I.](#s94CC072AFE6654D08153F4D26F64D83C)

BUSINESS](#sBDD83C6D92A65EA28CCDA18E32570417)

[GENERAL](#sEFD92E0764E150248A49671212F77E00)

Management’s Discussion and Analysis of Financial Condition and Results of Operations](#sBE734AA823055715BB48961CEF1ED6CB).

Management’s Discussion and Analysis of Financial Condition and Results of Operations](#sBE734AA823055715BB48961CEF1ED6CB).

Management’s Discussion and Analysis of Financial Condition and Results of Operations](#sBE734AA823055715BB48961CEF1ED6CB).

Management’s Discussion and Analysis of Financial Condition and Results of Operations](#sBE734AA823055715BB48961CEF1ED6CB).

Management’s Discussion and Analysis of Financial Condition and Results of Operations](#sBE734AA823055715BB48961CEF1ED6CB).

manufacturing operations; innovations and improvement of products; and development of various new products.

Since 2016, lawsuits challenging all or portions of the Boiler MACT regulations have resulted in the U.S. Court of Appeals for the D.C. Circuit remanding certain portions of the Boiler MACT regulations to the EPA for reconsideration of certain standards in the regulations.

We have not identified any additional Boiler MACT capital project expenditures that might result from the outcome of the remands to the EPA.

Consistent with this objective, participating countries aim to balance GHG

considered by Washington.

should not be considered part of this or any other report that we file with or furnish to the SEC.

[EMPLOYEES](#sE150243BE5E15AA8B6C5FCD9AA0AB5A3)

Ms. Ryan previously served as vice president, acting general counsel & corporate secretary from May 2011

For further information concerning fiber supply purchase agreements, see page 30.

These statements are often identified by the words, “will,” “may,” “should,”

The Company faces risks in the normal course of business and through global, regional, and local events that could have an adverse impact on its reputation, operations, and financial performance.

The Board of Directors exercises oversight of the Company’s enterprise risk management program, which includes strategic, operational and financial matters, as well as compliance and legal risks.

The Audit and Finance Committee coordinates the risk oversight role exercised by the Board’s standing committees and management, and it receives updates on the risk management processes twice per year.

actual results to differ materially from those projected in any forward-looking statement.

The global supply and demand for recycled fiber may be affected by trade policies between countries, individual governments' legislation and regulations, as well as changes in the global economy.

The availability of labor and the market price for diesel fuel may affect our costs for third-party transportation.

| • | our indebtedness that is subject to variable rates and, in the instance such variable rates use the London Interbank Offered Rate (LIBOR) as a benchmark, exposes us to a possible increase in debt service obligations in the event that the method for determining LIBOR changes, LIBOR is replaced by an alternative reference rate or LIBOR is phased out altogether; |

EFFECT ON THE MARKET PRICE OF OUR SECURITIES.

[12, Income Taxes](#s70695E26F2E05FAAACE167167DF73DD1), on pages 58 through 62, in [Item 8.

Retirement Plans](#s68EBB519288C5CE595C80B554CAB7A58), on pages 70 through 77, in [Item 8.

Financial Statements and Supplementary Data](#sC047FFBBDAD454A1AE2B6784670E1ADA)) and substantially all hourly and union employees regardless of hire date.

The Company has frozen participation under these plans for U.S. salaried employees, including credited services and compensation on or after January 1, 2019; however, the pension freeze does not affect benefits accrued through December 31, 2018.

10-K 1 ip10-k123117.htm 10-K

| | | | | (Do not check if a smaller reporting company) | | | | |

| PART I. | | [1](#sE0F3691F05D601207A18149D6C66A475) |

| | [General](#sE3FCDE1C5B8D7EC464EC149D6C942D9E) | [1](#sE3FCDE1C5B8D7EC464EC149D6C942D9E) |

| | [Financial Information Concerning Industry Segments](#s61D74C1D790FFBF779D3149D6CC3FFC7) | [1](#s61D74C1D790FFBF779D3149D6CC3FFC7) |

| | [Financial Information About International and U.S. Operations](#s127036428E9880EF1C24149D6CE24A04) | [1](#s127036428E9880EF1C24149D6CE24A04) |

| | [Employees](#s22E10C8A62EA316807C7149D6E2AF7BF) | [5](#s22E10C8A62EA316807C7149D6E2AF7BF) |

| | [Forestlands](#s598EC7DEBBEAD38B30BD149D6F62E76B) | [11](#s598EC7DEBBEAD38B30BD149D6F62E76B) |

| | [Description of Industry Segments](#s010F0073676E03743615149D71F199A9) | [23](#s010F0073676E03743615149D71F199A9) |

| | [Industry Segment Results](#sEDE4E59FC5DE6CE2B258149D60456CD6) | [24](#sEDE4E59FC5DE6CE2B258149D60456CD6) |

| | [Schedule II – Valuation and Qualifying Accounts](#s2999A3EA4DB51E0A79A8149D54C1153D) | [89](#s2999A3EA4DB51E0A79A8149D54C1153D) |

| | [SIGNATURES](#s79A16C45571BFA134CE1149D7D271D06) | [90](#s79A16C45571BFA134CE1149D7D271D06) |

[PART I.](#sE0F3691F05D601207A18149D6C66A475)

BUSINESS](#s62974B48D044FDD5D0B5149D6C667E87)

[GENERAL](#sE3FCDE1C5B8D7EC464EC149D6C942D9E)

Our home page on the Internet is www.internationalpaper.com.

[FINANCIAL INFORMATION CONCERNING INDUSTRY SEGMENTS](#s61D74C1D790FFBF779D3149D6CC3FFC7)

[FINANCIAL INFORMATION ABOUT INTERNATIONAL AND U.S. OPERATIONS](#s127036428E9880EF1C24149D6CE24A04)

The financial information concerning international and U.S. operations and export sales is set forth in [Note 19 Financial Information by Industry Segment and Geographic Area](#s27FC9FDC66F95BA78CE5149D53F644C6) on page 80 of [Item 8.

The markets in the pulp, paper and packaging product lines are large and fragmented.

Capital

Several lawsuits were filed to challenge all or portions of the Boiler MACT regulations.

On December 23, 2016, the U.S. Court of Appeals for the D.C. Circuit remanded the Boiler MACT regulations to the EPA requiring the agency to revise emission standards for boiler subcategories that had been affected by flawed calculations.

The Court determined that the existing MACT standards should remain in place while the revised standards are being developed, but did not establish a deadline for the EPA to complete the rulemaking.

The Company has completed its Boiler MACT capital projects to meet the existing regulations.

We are not able to project any additional Boiler MACT capital project expenditures as it is uncertain to what extent the EPA will revise Boiler MACT standards that are subject to the remand.

On

U.S. Efforts

The 2017 change in leadership of the U.S. executive branch may result in significant revisions to or rescission of the EPA's GHG regulations.

It is unclear what impacts, if any, the EPA's GHG regulatory revisions and any other future revisions will have on the Company’s operations.

In 2015, EPA promulgated the Clean Power Plan (CPP) rule to address climate change by reducing carbon dioxide (CO2) and other designated greenhouse gas pollutant emissions from utility EGUs.

In response, states were to develop and begin implementing programs to reduce GHGs from EGUs by about 32 percent by the 2022 to 2033 timeframe as compared to 2005 baseline levels.

In October 2017, the EPA issued a regulatory action to withdraw the CPP in its entirety.

Notwithstanding the withdrawal of the CPP, some states have remained committed to reaching the reduction targets set out in the CPP.

These GHG reduction plans,

if implemented, could pose potential cost increases for electricity purchased by the Company.

The magnitude of cost increases to the Company, if any, are not possible to estimate reliably at this time.

Further state measures are under substantive review as they respond to the withdrawal of the EPA’s CPP.

This cycle begins with

[EMPLOYEES](#s22E10C8A62EA316807C7149D6E2AF7BF)

Financial Statements and Supplementary [removed: Data](#s77A48FB747C7B5C2CF1B149D73C5D3D5).][added: Data](#sC047FFBBDAD454A1AE2B6784670E1ADA)).]

[added: As of] the filing of this Annual Report on Form 10-K, the Company’s common shares are traded on the New York Stock [removed: Exchange.][added: Exchange (NYSE: IP).]

As of February [removed: 16, 2018,] [added: 15, 2019,] there were approximately [removed: 11,766] [added: 11,316] record holders of common stock of the Company.

The table below presents information regarding the Company’s [removed: purchase] [added: purchases] of its equity securities for the time periods presented.

| Total | [removed: 5,335] | [removed: | | | | | |] [added: $] | [added: 17] | |

| (a) | [removed: 5,335] [added: 13,385] shares were acquired from employees from share withholdings to pay income taxes under the Company’s restricted stock programs. During these periods, [removed: no] [added: 4,412,530] shares were purchased under our share repurchase program, which was approved by our Board of Directors and announced on July 8, [removed: 2014.] [added: 2014 and October 9, 2018.] 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 [removed: $1.5] [added: $3.5] billion [added: aggregate amount of] shares of our common stock. As of February [removed: 16, 2018,] [added: 15, 2019,] approximately [removed: $933 million] [added: $2.19 billion aggregate amount of] shares of our common stock remained authorized for purchase under this program. |

The following graph compares a $100 investment in Company stock on December 31, [removed: 2012] [added: 2013] with a $100 investment in our Return on Invested Capital (ROIC) Peer Group and the S&P 500 also made at market close on December 31, [removed: 2012.][added: 2013.]

The graph portrays total return, [removed: 2012–2017,] [added: 2013–2018,] assuming reinvestment of dividends.

[removed: ][added: ]

[removed: Note 1:] The companies included in the ROIC Peer Group are Domtar Inc., Fibria Celulose S.A., Graphic Packaging Holding Company, Klabin S.A., Metsa Board Corporation, Mondi Group, Packaging Corporation of America, Smurfit Kappa Group, Stora Enso Group, and UPM-Kymmene Corp. MeadWestvaco Corp. and Rock-Tenn Company are included in the ROIC Peer Group results through 2014 and subsequently, after the merger of those companies, WestRock was added to the Peer group beginning in 2015.

[added: |] Note [removed: 2:] [added: 2. |] Returns are calculated in $USD. [added: |]

SELECTED FINANCIAL [removed: DATA](#s7E2FD5E819ECD5C9E169149D612FDDD1)][added: DATA](#s8BBB226B29515C79A0D5B048B7E7E3E6)]

| Dollar amounts in millions, except per share amounts and stock prices | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | | | [removed: 2013] [added: 2014] | | | |

| Net sales | $ | [removed: 21,743] [added: 23,306] | | | $ | [removed: 19,495] [added: 21,743] | | | $ | [removed: 20,675] [added: 19,495] | | | $ | [removed: 21,889] [added: 20,675] | | | $ | [removed: 21,244] [added: 21,889] | | |

| Costs and expenses, excluding interest | [removed: 20,323] [added: 20,989] | | | | [removed: 18,180] [added: 20,323] | | | | [removed: 18,988] [added: 18,180] | | | | [removed: 20,548] [added: 18,988] | | | | [removed: 19,540] [added: 20,548] | | | |

| Earnings (loss) from continuing operations before income taxes and equity earnings | [removed: 848] [added: 1,781] | | | (b) | [removed: 795] [added: 848] | | | (e) | [removed: 1,132] [added: 795] | | | (h) | [removed: 734] [added: 1,132] | | | (k) | [removed: 1,092] [added: 734] | | | (n) |

| Equity earnings (loss), net of taxes | [removed: 177] [added: 336] | | | | [removed: 198] [added: 177] | | | | [removed: 117] [added: 198] | | | | [removed: (200] [added: 117] | | [removed: )] | | [removed: (39] [added: (200] | | ) | |

| Discontinued operations, net of taxes | [removed: 34] [added: 345] | | | (c) | [removed: 102] [added: 34] | | | (f) | [removed: 85] [added: 102] | | | (i) | [removed: 77] [added: 85] | | | (l) | [removed: (215] [added: 77] | | [removed: )] | (o) |

| Net earnings (loss) | [removed: 2,144] [added: 2,017] | | | (b-d) | [removed: 902] [added: 2,144] | | | (e-g) | [removed: 917] [added: 902] | | | (h-j) | [removed: 536] [added: 917] | | | (k-m) | [removed: 1,378] [added: 536] | | | (n-p) |

| Noncontrolling interests, net of taxes | [removed: —] [added: 5] | | | | [removed: (2] [added: —] | | [removed: )] | | [removed: (21] [added: (2] | | ) | | [removed: (19] [added: (21] | | ) | | [removed: (17] [added: (19] | | ) | |

| Net earnings (loss) attributable to International Paper Company | [removed: 2,144] [added: 2,012] | | | (b-d) | [removed: 904] [added: 2,144] | | | (e-g) | [removed: 938] [added: 904] | | | (h-j) | [removed: 555] [added: 938] | | | (k-m) | [removed: 1,395] [added: 555] | | | (n-p) |

| Current assets less current liabilities | $ | [removed: 3,175] [added: 2,302] | | | $ | [removed: 2,601] [added: 3,175] | | | $ | [removed: 2,244] [added: 2,601] | | | $ | [removed: 2,719] [added: 2,244] | | | $ | [removed: 3,597] [added: 2,719] | | |

| Plants, properties and equipment, net | [removed: 13,265] [added: 13,067] | | | | [removed: 13,003] [added: 13,265] | | | | [removed: 11,000] [added: 13,003] | | | | [removed: 11,794] [added: 11,000] | | | | [removed: 12,745] [added: 11,794] | | | |

| Forestlands | [removed: 448] [added: 402] | | | | [removed: 456] [added: 448] | | | | [removed: 366] [added: 456] | | | | [removed: 507] [added: 366] | | | | [removed: 557] [added: 507] | | | |

| Total assets | [removed: 33,903] [added: 33,576] | | | | [removed: 33,093] [added: 33,903] | | | | [removed: 30,271] [added: 33,093] | | | | [removed: 28,369] [added: 30,271] | | | | [removed: 31,242] [added: 28,369] | | | |

| Notes payable and current maturities of long-term debt | [removed: 311] [added: 639] | | | | [removed: 239] [added: 311] | | | | [removed: 426] [added: 239] | | | | [removed: 742] [added: 426] | | | | [removed: 661] [added: 742] | | | |

| Long-term debt | [removed: 10,846] [added: 10,015] | | | | [removed: 11,075] [added: 10,846] | | | | [removed: 8,844] [added: 11,075] | | | | [removed: 8,584] [added: 8,844] | | | | [removed: 8,787] [added: 8,584] | | | |

| Total shareholders’ equity | [removed: 6,522] [added: 7,362] | | | | [removed: 4,341] [added: 6,522] | | | | [removed: 3,884] [added: 4,341] | | | | [removed: 5,115] [added: 3,884] | | | | [removed: 8,105] [added: 5,115] | | | |

| Earnings (loss) from continuing operations | $ | [removed: 5.11] [added: 4.07] | | | $ | [removed: 1.95] [added: 5.11] | | | $ | [removed: 2.05] [added: 1.95] | | | $ | [removed: 1.12] [added: 2.05] | | | $ | [removed: 3.63] [added: 1.12] | | |

| Discontinued operations | [removed: 0.08] [added: 0.84] | | | | [removed: 0.25] [added: 0.08] | | | | [removed: 0.20] [added: 0.25] | | | | [removed: 0.18] [added: 0.20] | | | | [removed: (0.48] [added: 0.18] | | [removed: )] | |

| Net earnings (loss) | [removed: 5.19] [added: 4.91] | | | | [removed: 2.20] [added: 5.19] | | | | [removed: 2.25] [added: 2.20] | | | | [removed: 1.30] [added: 2.25] | | | | [removed: 3.15] [added: 1.30] | | | |

| Earnings (loss) from continuing operations | $ | [removed: 5.05] [added: 4.02] | | | $ | [removed: 1.93] [added: 5.05] | | | $ | [removed: 2.03] [added: 1.93] | | | $ | [removed: 1.10] [added: 2.03] | | | $ | [removed: 3.59] [added: 1.10] | | |

| Discontinued operations | [removed: 0.08] [added: 0.83] | | | | [removed: 0.25] [added: 0.08] | | | | [removed: 0.20] [added: 0.25] | | | | [removed: 0.19] [added: 0.20] | | | | [removed: (0.48] [added: 0.19] | | [removed: )] | |

| Net earnings (loss) | [removed: 5.13] [added: 4.85] | | | | [removed: 2.18] [added: 5.13] | | | | [removed: 2.23] [added: 2.18] | | | | [removed: 1.29] [added: 2.23] | | | | [removed: 3.11] [added: 1.29] | | | |

| Cash dividends | [removed: 1.863] [added: 1.925] | | | | [removed: 1.783] [added: 1.863] | | | | [removed: 1.640] [added: 1.783] | | | | [removed: 1.450] [added: 1.640] | | | | [removed: 1.250] [added: 1.450] | | | |

| High | $ | [removed: 58.96] [added: 66.94] | | | $ | [removed: 54.68] [added: 58.96] | | | $ | [removed: 57.90] [added: 54.68] | | | $ | [removed: 55.73] [added: 57.90] | | | $ | [removed: 50.33] [added: 55.73] | | |

| Low | [removed: 49.60] [added: 37.55] | | | | [removed: 32.50] [added: 49.60] | | | | [removed: 36.76] [added: 32.50] | | | | [removed: 44.24] [added: 36.76] | | | | [removed: 39.47] [added: 44.24] | | | |

| Year-end | [removed: 57.94] [added: 40.36] | | | | [removed: 53.06] [added: 57.94] | | | | [removed: 37.70] [added: 53.06] | | | | [removed: 53.58] [added: 37.70] | | | | [removed: 49.03] [added: 53.58] | | | |

| Current ratio | [removed: 1.6] [added: 1.5] | | | | 1.6 | | | | 1.6 | | | | [removed: 1.5] [added: 1.6] | | | | [removed: 1.7] [added: 1.5] | | | |

| Total debt to capital ratio | [removed: 0.63] [added: 0.59] | | | | [removed: 0.72] [added: 0.63] | | | | [removed: 0.70] [added: 0.72] | | | | [removed: 0.65] [added: 0.70] | | | | [removed: 0.54] [added: 0.65] | | | |

| October 1, 2018 - October 31, 2018 | 2,225,310 | | $ | 44.94 | | 2,225,188 | | $ | 2.33 | |

| November 1, 2018 - November 30, 2018 | 1,475,242 | | 45.79 | | | 1,474,900 | | 2.27 | | |

| December 1, 2018 - December 31, 2018 | 725,363 | | 45.51 | | | 712,442 | | 2.23 | | |

| Total | 4,425,915 | | | | | | | | | |

Note 1.

| Smurfit-Kappa acquisition proposal costs | | 12 | | | | 9 | | |

| Litigation settlement recovery | | (5 | | ) | | (4 | | ) |

| Environmental remediation reserve adjustment | | 9 | | | | 7 | | |

| EMEA Packaging optimization | | 47 | | | | 34 | | |

| Abandoned property removal | | 32 | | | | 24 | | |

| Brazil Packaging impairment | | 122 | | | | 81 | | |

| North American Consumer Packaging transaction costs | | 25 | | | | 19 | | |

| North American Consumer Packaging gain on transfer | | (488 | | ) | | (364 | | ) |

| Total | | $ | (463 | ) | | $ | (345 | ) |

| State income tax legislative changes | | $ | 9 | |

| Tax benefit of Tax Cuts and Jobs Act | | (36 | | ) |

| Foreign tax audits | | 25 | | |

Full-year 2018 net earnings were $2.0 billion ($4.85 per diluted share) compared with net earnings of $2.1 billion ($5.13 per diluted share) for full-year 2017.

Full-year 2017 net earnings included a provisional net tax benefit of $1.2 billion ($2.93 per diluted share) related to the U.S. enactment of the Tax Cuts and Jobs Act of 2017 reported as a special item.

Business segment operating profit improved by approximately $800 million to $2.9 billion in 2018, driven primarily by price and mix improvements, with revenue growth of 7.2%.

The Company made strategic investments to strengthen our businesses.

Among these, we completed the final phase of our multi-year North American containerboard mill system optimization projects, which gives us the added flexibility we need around capacity, products and geographies.

We also invested in our North American corrugated packaging system to enhance our capabilities and strengthen our position with the fastest growing segments.

In our EMEA Packaging business, we completed the conversion of the Madrid, Spain mill and started production of high-performance, lightweight recycled containerboard to capture the integrated margin with our EMEA box system.

International Paper continued to deliver strong cash generation in 2018, which we used to strengthen our balance sheet and return cash to shareholders.

We decreased balance sheet debt by about $500 million, and we returned $1.5 billion to shareholders through dividends of about $800 million and share repurchases of about $700 million.

The Company increased its dividend for the seventh consecutive year and reduced shares outstanding by 3%.

The Company’s 2018 results include significant price and mix improvements driven by price realization across our three business segments.

Improved mix contributed to the Company’s strong performance, particularly in our Global Cellulose Fibers business where we continued to grow fluff pulp volume.

Weather events in North America and startup costs associated with the Madrid, Spain mill negatively impacted operations, and planned maintenance outages were higher.

Equity earnings increased

by $159 million to $336 million in 2018, driven by excellent commercial and operational performance in our Ilim joint venture and first-year equity earnings from Graphic Packaging International Partners, LLC (GPIP).

In total, our equity investments provided $153 million in cash dividends to International Paper in 2018.

Looking ahead to the first quarter 2019, domestic industry conditions remain healthy.

We anticipate lower seasonal demand in North America Industrial Packaging and Brazil Papers, as well as lower export volume in Industrial Packaging, as customer destocking continues.

In Global Cellulose Fibers we anticipate lower volume due to slower growth in developing markets and customer destocking, as well as a temporary setback in fluff pulp volume resulting from poor execution of a mix improvement plan.

Consequently, we expect downward pressure on export price and mix in Industrial Packaging and Global Cellulose Fibers during the first quarter.

Operating costs are expected to increase in our three business segments due to lower volume, higher seasonal energy consumption and timing of spending.

In addition, planned maintenance outage expense is expected to increase significantly as we move from a low-outage fourth quarter to a heavy-outage first quarter, with first-half 2019 representing nearly 80% of total planned maintenance outage expense in 2019.

Input costs are expected to be stable in Industrial Packaging and Global Cellulose Fibers and increase modestly in Printing Papers, mainly due to higher wood costs in North America.

Dividend per share data on the Company’s common stock and the high and low sales prices for the Company’s common stock for each of the four quarters in 2017 and 2016 are set forth on page 81 of [Item 8.

As of

| October 1, 2017 - October 31, 2017 | 78 | | $ | 56.82 | | — | | $ | 0.933 | |

| November 1, 2017 - November 30, 2017 | — | | — | | | — | | 0.933 | | |

| December 1, 2017 - December 31, 2017 | 5,257 | | 56.96 | | | — | | 0.933 | | |

| Total shareholders’ equity | 15.79 | | | | 10.56 | | | | 9.43 | | | | 12.18 | | | | 18.57 | | | |

| COMMON STOCK PRICES | | | | | | | | | | | | | | | | | | | | |

| | | | | |

| --- | --- | --- | --- | --- |

2015:

| In millions | | 2015 | | |

| Tax impact of other special items | | $ | (81 | ) |

2013:

| | | 2013 | | | | | | |

| Temple-Inland integration | | $ | 62 | | | $ | 38 | |

| Courtland mill shutdown | | 118 | | | | 72 | | |

| 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 | | ) |

| Total | | $ | 622 | | | $ | 424 | |

| 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 | | ) |

| Tax impact of other special items | | $ | (774 | ) |

Our Global Cellulose Fibers business is on track to achieve the estimated transaction synergies.

We made substantial progress in further strengthening our portfolio during 2017.

We accelerated strategic investments for growth in the Industrial Packaging business, providing the Company with the flexibility we need around capacity, products and geography to support our customers.

Finally, we generated strong free cash flow which enabled us to increase our annual dividend for the sixth consecutive year.

Our 2017 results reflect significant pricing and mix improvement, which accelerated throughout the year.

The improvement in price and mix was primarily driven by price realization on price increases announced in prior quarters in our North American Industrial Packaging and Global Cellulose Fibers businesses.

Operations were negatively impacted by hurricanes and the Pensacola event earlier in the year; however, 2017 was a lower maintenance outage year.

Input costs were higher compared to 2016, driven by significantly higher recovered fiber costs, as well as, higher energy and transportation costs during the latter part of the year.

Our Ilim joint venture delivered solid operational and financial results, driven by pricing and strong volume, and provided more than $130 million in cash dividends to International Paper in 2017.