filings.toolsInternational Paper 2024 10-K Annual Report
IP · CIK 51434 · Form 10-K · Fiscal year ended December 31, 2024 · Filed February 21, 2025
23 sections, 533K characters. Original on sec.gov · Markdown · JSON
Risk FactorsBusinessMD&AFinancial StatementsWhat changed vs 2023
Cover and table of contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
| ☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||||
| For the fiscal year ended | ||||||||
| 12/31/2024 | ||||||||
| or | ||||||||
| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||||
| For the transition period from - to - |
Commission File No. 1-3157
INTERNATIONAL PAPER COMPANY
(Exact name of registrant as specified in its charter)
| New York | 13-0872805 | |||||||
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
| 6400 Poplar Avenue | |||||||||||
| Memphis, | Tennessee | ||||||||||
| (Address of principal executive offices) | |||||||||||
| 38197 | |||||||||||
| (Zip Code) | |||||||||||
| Registrant's telephone number, including area code: | 901 | 419-9000 |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||||||
| Common Shares | IP | New York Stock Exchange | ||||||
| Common Shares | IPC | London Stock Exchange |
Securities Registered Pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ý No ¨
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes ¨ No ý
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ý No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | Accelerated filer | Non-accelerated filer | Smaller reporting company | Emerging growth company | ||||||||||||||||||||||
| ☒ | ☐ | ☐ | ☐ | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13 (a) of the Exchange Act. o
Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ý
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ¨
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, 2024) was approximately $14,910,126,297.
The number of shares outstanding of the Company’s common stock as of February 14, 2025 was 526,125,614.
Documents incorporated by reference:
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 2025 annual meeting of shareholders are incorporated by reference into Part III of this Form 10-K.
INTERNATIONAL PAPER COMPANY
INDEX TO ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2024
INTERNATIONAL PAPER COMPANY
INDEX TO ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2024
Item 1. BUSINESS.
International Paper Company (the "Company," "International Paper" or "IP", which may also be referred to as "we" or "us") is a global leader in sustainable packaging solutions. We produce renewable fiber-based packaging and pulp products with manufacturing operations in North America, Latin America, Europe and North Africa. We are a New York corporation, incorporated in 1941 as the successor to the New York corporation of the same name organized in 1898. You can learn more about us by visiting our website at www.internationalpaper.com.
In the United States, at December 31, 2024, the Company operated 22 pulp and packaging mills, 157 converting and packaging plants, 16 recycling plants and three bag facilities. Production facilities at December 31, 2024 in Canada, Europe, North Africa and Latin America included four pulp and packaging mills, 36 converting and packaging plants, and two recycling plants. We operate a packaging products distribution business principally through six branches in Asia. Substantially all of our businesses have experienced, and are likely to continue to experience, cycles relating to industry capacity and general economic conditions.
We are guided by our core values. We do the right things, in the right ways, for the right reasons, all of the time – this is The IP Way. Our overarching values are safety, ethics, and excellence.
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Safety – Above all else, we care about people. We look out for each other to ensure everyone returns home safely each day.
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Ethics – We act honestly and operate with integrity and respect. We promote a culture of openness and accountability.
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Excellence – We set high expectations and aim to deliver outstanding results for each other, our customers and our shareholders.
For management and financial reporting purposes, our businesses are separated into two segments: Industrial Packaging and Global Cellulose Fibers. A description of these business segments can be found on page 42 of Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
In 2024, International Paper made significant strides to further enhance our performance-driven culture that we believe will enable us to create significant
value for our employees, customers and share owners. In April 2024, International Paper announced a proposed business combination with DS Smith Plc ("DS Smith"), a global packaging, paper and recycling company and leading provider of sustainable fiber-based packaging headquartered in England in an all-stock transaction. This highly complementary business combination is designed to create a truly sustainable packaging solutions leader that can serve a broad set of customers across a wide range of attractive and growing end-markets to generate significant shareholder value. Shareholders of DS Smith and International Paper overwhelmingly approved the business combination at separate meetings in October 2024. On January 24, 2025, the Company announced plans to divest plants located in Mortagne, Saint-Amand, and Cabourg (France), Ovar (Portugal) and Bilbao (Spain) in connection with the European Commission’s clearance of the business combination. The business combination closed on January 31, 2025. Thereafter, the Company obtained a secondary listing of International Paper common stock on the London Stock Exchange (LSE: IPC) and established a Europe, Middle East and Africa ("EMEA") headquarters in DS Smith's existing main office in London. DS Smith re-registered as DS Smith Limited, a private limited company effective on February 5, 2025.
In the third quarter of 2024, the Company also began implementing an 80/20 strategic approach to drive transformational performance. The 80/20 approach suggests that 80% of our results come from 20% of efforts. As applied to our business, the approach is used to determine the most impactful areas to focus on. Through the 80/20 strategic approach, we intend to deliver profitable market share growth by striving to be the lowest-cost producer and the most reliable and innovative sustainable packaging solutions provider to our customers across North America and EMEA. As part of the Company’s 80/20 strategic approach, the Company intends to guide investments and align resources to win with our most strategic customers, while reducing complexity and cost across the Company.
To that end, the Company initiated a corporate overhead restructuring plan in the third quarter of 2024 aimed at better aligning our workforce with the needs of the business and our customers, optimizing our organizational structure and reducing operating costs. Additionally, we committed to investing to strengthen our most competitive and strategic assets and closed facilities to structurally reduce operating costs. Further, in October 2024, we announced that we are exploring strategic options for our Global Cellulose Fibers business.
These significant undertakings follow the September 2023 completion of the sale of our 50% equity interest in Ilim S.A. ("Ilim"), the sale of all of our Ilim Group shares (constituting a 2.39% stake) and divestment of other non-material residual interests associated with Ilim. Ilim was a joint venture that operated a pulp and paper business in Russia and has subsidiaries including Ilim Group. Following the completed sales, we no longer have an interest in Ilim or any of its subsidiaries, and no longer have any investments in Russia. As a result, all current and historical results of the Ilim investment reportable segment are presented as Discontinued Operations, net of taxes. See discussion in Note 10 - Equity Method Investments on page 75 of Item 8. Financial Statements and Supplementary Data.
We remain confident that the initiatives undertaken as part of our transformational journey in 2024 will unlock substantial value at IP and strengthen the Company for our employees, customers and shareholders.
From 2020 through 2024, International Paper’s capital spending approximated $4.3 billion, excluding mergers and acquisitions. These expenditures reflect our continuing efforts to use our capital strategically to improve product quality and environmental performance, as well as lower costs, maintain reliability of operations and deploy strategic capital for capacity expansion. Capital spending in 2024 was approximately $921 million and is expected to be approximately $1.2 billion in 2025. You can find more information about capital spending on page 46 of Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Discussions of acquisitions can be found in Note 7 Acquisitions on page 72 of Item 8. Financial Statements and Supplementary Data.
You can find discussions of restructuring charges and other special items on page 37 of Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Throughout this Annual Report on Form 10-K, we “incorporate by reference” certain information in parts of other documents filed with the Securities and Exchange Commission ("SEC"). The SEC permits us to disclose important information by referring you to those documents. Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and proxy statements, along with all other reports and any amendments thereto filed with or furnished to the SEC, are publicly available free of charge on the Investors section of our website at www.internationalpaper.com as soon as reasonably practicable after we electronically file such material
with, or furnish it to, the SEC. We encourage you to refer to such information.
Our website contains a significant amount of information about the Company, including our SEC filings and financial and other information for investors. The information that we post on our website could be deemed to be material information. We encourage investors, the media, and others interested in the Company to visit this website from time to time, as information is updated and new information is posted. The information contained on or connected to our website, however, is not incorporated by reference into this Annual Report on Form 10-K and should not be considered part of this or any other report that we file with or furnish to the SEC. Our internet address is included as an inactive textual reference only.
EMPLOYEES
As of December 31, 2024, we have approximately 37,000 employees, nearly 31,000 of whom are located in the United States. Of our U.S. employees, 21,000 are hourly, with unions representing approximately 13,000 employees. Of this number, 9,600 are represented by the United Steelworkers union ("USW").
International Paper, the USW, and several other unions have entered into five master agreements covering various U.S. mills and converting facilities. Four of the master agreements are with the USW and include members from the International Association of Machinists and Aerospace Workers, International Brotherhood of Electrical Workers, United Food and Commercial Workers International Union and Workers Unite at certain U.S. mills and converting facilities. The Company also has a master agreement with District Counsel 2, which is affiliated with the Printing Packaging & Production Workers Union of North America that covers additional converting facilities. Individual facilities continue to have local agreements for subjects not covered by the master agreements. If local facility agreements are not successfully negotiated at the time of expiration, under the terms of the master agreements, the local agreements will automatically renew with the same terms in effect.
SAFETY AND WELLBEING
At International Paper, we prioritize the safety and well-being of every employee and contractor. Safety is core to who we are and how we operate – at IP we strive to put safety above all else. To achieve this, we are cultivating a resilient safety culture where every team member is empowered to stop work they
believe is unsafe. We work tirelessly to anticipate and address unexpected events by incorporating layers of protection, continuously enhancing our systems and engaging all team members in learning events to prevent injuries before they take place. In 2024, we engaged an independent safety consultant firm to help the Company improve workplace safety performance through risk assessments, safety culture development and programs designed to reduce accidents and injuries. We launched a Company-wide safety culture survey in 2024 to all U.S.-based employees. Results of the survey will be analyzed in 2025 with the goal of learning, growing and aspiring to achieve our Vision 2030 goal to create a 100% injury-free workplace for our team members and contractors.
We believe workplace safety includes psychological and emotional safety. At International Paper we also care deeply about the mental, emotional, physical and professional wellbeing of our employees by providing an Employee Assistance Program (“EAP”) at no cost to employees and family members. Our EAP offers coaching and counseling sessions aimed at problem solving, achieving goals, and dealing with stress and anxiety management through resilience. We embrace a holistic wellness approach providing employees with resources on incorporating wellness habits into their daily lives.
HUMAN CAPITAL MANAGEMENT
The attraction, retention and development of our employees is critical to our success. We create a positive employee experience that begins at onboarding. Our Human Resources Talent Management Team hosts online Global New Employee Orientation for employees and each business conducts onsite new hire integration training unique to its business and/or facility. This experience continues through our continuous learning, development and performance management programs. We provide continuing education courses that are relevant to our industry and job functions within the Company, including both instructor-led and online training through our Learning Management System (“LMS”) MyLearning platform. Across the enterprise in 2024, employees completed 2.7 million learning activities through our platform.
In addition, we have created learning paths for specific positions that are designed to encourage an employee’s advancement and growth within our organization, such as our REACH (Recruit, Engage, Align College Hires) program and Global Manufacturing Training Initiative programs. Through REACH we recruit and develop early-career engineers and safety professionals for our U.S. mills, preparing them to become future leaders. We invest
in the growth and development of our employees by providing a multi-dimensional approach to learning that empowers, intellectually grows and professionally develops our employees. Our Global Manufacturing Training Initiative provides training services to hourly operations and maintenance employees in our mills in a standardized and structured manner. On the converting side of our business, more than 200 front line and future leaders participated in our multi-day in-person Leadership Application and Professional Development and Manufacturing Management Associate Programs during 2024.
We develop leaders through our IP Leadership Institute offering a broad range of LMS virtual and in person resources, courses and workshops for individual contributors, people leaders and teams. We also offer peer mentoring and leadership and career development training to support and develop our employees.
We help our employees better themselves by offering tuition reimbursement to employees to pursue additional education to prepare for other positions at the Company. We also provide student loan assistance to help employees repay qualified student loans. These resources provide employees with the skills and support they need to achieve their career goals, build management skills and become leaders within our Company.
The labor market for both hourly and salaried workers continues to be competitive. For additional information regarding risks related to the current labor market, see Item 1A. Risk Factors – We operate in a challenging market for talent and my fail to attract and retain qualified personnel, including key management personnel.
COMPENSATION AND BENEFITS
We view compensation and benefits as part of how we attract, engage and retain our talented workforce. We do so by rewarding performance while ensuring competitive compensation in our local markets around the world. We continually evaluate our compensation and benefits so that we offer optimal compensation programs and remain a leading employer of choice in the areas in which we operate.
TEAM-ORIENTED CULTURE
As a result of our recent business combination with DS Smith, the Company has significantly expanded our global footprint. The business combination not only enhances our operational capabilities but also enriches our cross-culturalism, bringing together a broader range of perspectives, experiences, and
talents. With the integration of DS Smith, we are dedicated to ensuring our efforts to embrace a team-oriented culture are effectively extended across our newly expanded organization and guided by our commitment to equal employment opportunity for all. The Company is focused on promoting a culture that leverages the talents of all employees, and implementing practices that attract, recruit and retain a broad array of talent. We believe our efforts will lead to improved business results, as teams with a broad range of perspectives drive innovation, enhance decision-making, and better reflect the markets we serve.
The Company supports enterprise-wide employee-led networking circles (“ENCs”) that are open to all employees and provide a forum to communicate and exchange ideas and build a network of relationships across the Company. Our ENCs help educate and motivate our global workforce, strengthening our business practices.
The make-up of our Board of Directors and Executive Leadership Team ("ELT") reflects our efforts to seek the most qualified board candidates with a broad range of experiences and perspectives.
Our Executive Leadership Team is currently comprised of our chief executive officer, one executive vice president and four senior vice presidents who oversee crucial functions and business units within the Company.
By virtue of the Company’s secondary listing on the London Stock Exchange, International Paper is now subject to certain board composition disclosure requirements under the UK Listing Rules (the “UKLR”) established by the UK Financial Conduct
Authority (the "FCA"). The information below is disclosed solely in order to comply with UKLR 14.3.30R and for no other purpose. The required disclosure below is set out as of December 31, 2024, and the data provided in relation to the Board and executive officers has been collected through the annual Directors and Officers’ questionnaire.
As of December 31, 2024, the Company can confirm the following in relation to each of the following reporting standards contained in the UKLR:
| UKLR Reporting Standards (the "Standards") | Result | Implementation Progress | ||||||
| At least 40% of the Board are women. | Not met | 30% of the Board were women. | ||||||
| At least one member of the Board is from an ethnic minority. | Met | There were two ethnic minority men on the Board. | ||||||
| At least one of the senior Board positions (Chair, CEO, Senior Independent Director (SID) or CFO) is a woman. | Not met | The senior Board positions of Chairman, CEO, CFO and Lead Director are currently held by men. Until the individuals in those positions retire or otherwise leave, the Company will not meet the Standards. |
An additional director David A. Robbie was appointed to the Board effective February 11, 2025. Mr. Robbie's appointment does not affect the result of any of the Standards set out above.
In accordance with UKLR 14.3.31R, and for no other purpose, numerical data on the ethnic background and the gender identity or sex of the individuals on the Company’s Board and in its executive management as of December 31, 2024 is set out below:
| Number of Board Members | Percentage of the Board | Number of senior positions on the Board (CEO, CFO, SID and Chair) 1 | Number in executive management****2 | Percentage of executive management | |||||||||||||
| Men | 7 | 70% | 3 3 | 5 | 83% | ||||||||||||
| Women | 3 | 30% | — | 1 | 17% | ||||||||||||
| Not specified/prefer not to say | — | —% | — | — | —% | ||||||||||||
| White British or other White (including minority white groups) | 8 | 80% | 2 | 6 | 100% | ||||||||||||
| Mixed multiple ethnic groups | — | —% | — | — | —% | ||||||||||||
| Asian/Asian British | — | —% | — | — | —% | ||||||||||||
| Black/African Caribbean/Black British | 2 | 20% | — | — | —% | ||||||||||||
| Other ethnic group including Arab | — | —% | — | — | —% | ||||||||||||
| Not specified/prefer not to say | — | —% | — | — | —% |
1 The Company is reporting on the positions of CEO, CFO, Chairman of the Board and Lead Director positions.
2 Executive management is defined, in accordance with the UKLR, as International Paper’s Executive Leadership Team, including the Corporate Secretary.
3 Andrew K. Silvernail holds the position of CEO and Chair. Christopher M. Connor holds the position of Lead Director. The position of CFO is not held by a member of the Board.
COMMUNITY ENGAGEMENT
We encourage our employees to support the communities in which they live and in which the Company operates. Our community engagement efforts extend across the globe and support social and educational needs. To that end, in 2024 we invested approximately $17 million to address critical needs in the communities in which we work and live. Our Vision 2030 goal is to strengthen the resilience of our communities, in numerous ways, and improve the lives of 100 million people in our communities in numerous ways, including the support of education, reducing hunger, promoting health and wellness and supporting disaster relief.
One way we lead is by addressing hunger and food security for children, families and seniors in partnership with The Global FoodBanking Network (the “GFN”) and Feeding America. The Company delivers dependable and sustainable packaging solutions that protect and transport foods to our community and customers. We also promote health and wellness through our award-winning Fighting Period Poverty in Our Communities program. Period poverty is lack of access to period products and education and affects at least 500 million women and girls globally. Period poverty leads to school truancy, reproductive issues, health risks and unnecessary shame. Through this program, we collaborate with partners to create awareness of period poverty
globally and provide period care kits to people who need them most.
Also in 2024, the Company was awarded a Leadership in Sustainability Award for Resilient U.S. Forests by the American Forest & Paper Association recognizing the positive outcomes from the Company’s longstanding Forestland Stewards partnership with the National Fish and Wildlife Foundation. Through this partnership, the Company also endeavored to support the restoration of forest ecosystems to restore critical bat habitats through oak regeneration projects in Alabama. In 2024, we received the Grassroots Innovation Award from the Public Affairs Council. Additionally, we are proud to have been named among the world’s most ethical companies by Ethisphere for 18 consecutive years.
INTELLECTUAL PROPERTY, PATENTS, AND TRADEMARKS
We rely on a combination of patent, copyright, trademark, design, trade secret, and internet domain laws to establish and protect our intellectual property rights in the United States and in foreign jurisdictions. The Company’s practice is to file applications and obtain patents for products and services we believe improve our value proposition to customers. We maintain a portfolio of trademarks and service marks registered with the U.S. Patent and Trademark Office
and in certain foreign jurisdictions, unregistered trademarks, licenses, and internet domain names that we consider important to the marketing of our products and business. These trademarks and service marks include those entity and product names that appear in this Annual Report on Form 10-K and our logo, as well as names of other products and marketing-related taglines. Our registered intellectual property has various expiration dates. The Company also relies on trade secret and other confidential information protection for manufacturing processes, product specifications, formulae, analyses, market information, forecasts, and other competitively sensitive information.
The pulp and packaging sectors are large and fragmented, and the areas into which we sell our principal products are very competitive. Our products compete with similar products produced by other forest products companies. We also compete, in some instances, with companies in other industries and against substitutes for wood-fiber products.
Many factors influence the Company’s competitive position, including price, cost, product quality and services. You can find more information about the impact of these factors on operating profits on pages 34 through 44 of Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. You can find information about the Company’s manufacturing capacities on page A-3 of Appendix II.
The Company sells products directly to end users and converters, as well as through agents, resellers and distributors.
DESCRIPTION OF PRINCIPAL PRODUCTS
The Company’s principal products are described on page 42 of Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The Company’s policy is to operate its mills and factories in compliance with all applicable laws and regulations such that it protects the environment and the health and safety of its employees. We operate our businesses and sell products globally. In each of the jurisdictions in which we operate, we are subject to a variety of laws and regulations governing various aspects of our business, including general business
regulations as well as those governing the manufacturing, production, content, handling, storage, transport, marketing and sale of our products. Our operations are also subject to forestry reserve requirements, other environmental regulations and occupational health and safety laws. Violations can result in substantial fines, administrative sanctions, criminal penalties, revocations of operating permits and/or shutdowns of our facilities, litigation, other liabilities, as well as damage to our reputation. We incur costs to comply with these requirements. For additional information regarding risks associated with environmental matters, see Item 1A. Risk Factors – We may fail to successfully integrate DS Smith and realize the anticipated benefits and operating synergies expected from the business combination, which could adversely affect our business, financial condition and operating results; We are subject to a wide variety of laws, regulations and other governmental requirements that may change in significant ways, and the cost of compliance, or the failure to comply with such requirements, could impact our business and results of operations.
Our Vision 2030 goals provide a framework to build a better future for people, the planet and the Company in the areas of healthy and abundant forests, thriving people and communities, sustainable operations and renewable solutions. Through these efforts and more, the Company tackles the toughest issues in the value chain to improve its environmental footprint and promote the long-term sustainability of natural capital.
Our approach to sustainability considers our entire value chain, from sourcing raw materials responsibly and working safely, to making renewable, recyclable products and providing a market for recovered products. To help inform and prioritize the focus of our sustainability strategy, we have engaged with internal and external stakeholders using a variety of methods, assessed key issues and associated risks and opportunities, and incorporated sustainability considerations into our processes.
The Company operations are subject to extensive and evolving federal, state, local, and international laws and regulations governing the protection of the environment and will be more so in light of our increased scale and global presence following completion of our business combination with DS Smith. Company manufacturing processes involve discharges to water, air emissions, water intake and waste handling and disposal activities, all of which are subject to a variety of environmental laws and
regulations, along with requirements of environmental permits or analogous authorizations issued by various governmental authorities. Our continuing objectives include: (i) controlling emissions and discharges from our facilities to avoid adverse impacts on the environment, and (ii) maintaining compliance with applicable laws and regulations. The Company spent approximately $20 million in 2024 for capital projects to control environmental releases into the air and water, and to assure environmentally sound management and disposal of waste. We expect to spend approximately $35 million in 2025 for environmental capital projects. Capital expenditures on environmental projects for 2026 and 2027, respectively, are anticipated to be approximately $35 million and $30 million. It is possible that our capital expenditure assumptions, estimates and project completion dates may change, and our projections are subject to change due to items such as the finalization of ongoing engineering projects, varying costs or changes in environmental laws and regulations.
The Company has been named as a potentially responsible party ("PRP") in environmental remediation actions under various federal and state laws, including the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended ("CERCLA"). For additional information regarding certain remediation actions, see Note 13 Commitments and Contingent Liabilities of Item 8. Financial Statements and Supplementary Data on pages 79 through 83. For additional information regarding risks associated with environmental matters, see Item 1A. Risk Factors – We are subject to a wide variety of laws, regulations and other governmental requirements that may change in significant ways, and the cost of compliance with such requirements, or the failure to comply with such requirements, could impact our business and results of operations.
The Company recognizes the impact of climate change on people and our planet. To manage climate-related risks, we are taking actions throughout our value chain to help advance a low-carbon economy. We aligned our annual sustainability reporting with the recommendations of the International Financial Reporting Standards S2 Climate-related Disclosures in the 2024 reporting cycle (based upon data from 2023). As part of our climate reports, we identify and report on climate-related opportunities. We identify and evaluate physical and transition climate-related risks through our enterprise risk management process.
The Company has included in its 2023 Task Force on Climate-related Financial Disclosures Report (the "TCFD Report," which can be found at www.internationalpaper.com and provides information as of December 31, 2023) climate related disclosures consistent with the four recommendations and the 11 recommended disclosures set out in the June 2017 report on the Task force on Climate-related Financial Disclosures entitled “Recommendations of the Task Force on Climate-related Financial Disclosures.” Our 2024 International Sustainability Standards Board IFRS Sustainability Disclosure Standard 2 (the "ISSB IFRS S2 Report," formerly the TCFD Report), which will be available later in 2025 at www.internationalpaper.com and which will provide information as of December 31, 2024), will contain similar consistent disclosures. For ease of review and given the detailed and technical content of these disclosures, the TCFD Report is considered to be the most appropriate location for the disclosures. This statement is provided in accordance with UKLR 14.3.24R.
We transform renewable resources into recyclable products that people depend on every day. We aim to produce low carbon products that have a positive impact on nature. To this end, we source renewable fiber from responsibly managed forests and recycled raw materials. We then use a circular manufacturing process that makes the most of resources and byproducts, while reducing the environmental impacts of our operations. At the end of use, the majority of our low-carbon fiber-based products are recycled into new products at a higher rate than any other base material. We work to advance the shift to a low-carbon, circular economy by designing products that are 100% reusable, recyclable or compostable.
Through improvements in operations, equipment, energy efficiency and fuel diversity, we are working to achieve company-wide reductions in Scope 1 and Scope 2 greenhouse gas (“GHG”) emissions. As part of our Vision 2030 goals, we targeted incremental reductions of 35% in our Scope 1, 2, and 3 GHG emissions by 2030 in comparison to 2019 levels. We intend to continue to evaluate and implement projects as we pursue this Vision 2030 GHG goal. This includes ongoing energy efficiency efforts and capital projects to phase out our most carbon intensive fuel sources (Scope 1) as well as developing GHG reduction strategies for our energy sourcing (Scope 2) and broader supply chain footprint (Scope 3). In addition, we have committed to be an early adopter of the Taskforce on Nature-related Financial Disclosures (“TNFD”) and plan to publish our first TNFD report in 2025 with 2024 data. TNFD adopters intend to make corporate reporting disclosures that are aligned with TNFD recommendations, which have been designed to (i) meet the corporate reporting requirements of
organizations across jurisdictions; (ii) be consistent with the global baseline for corporate sustainability reporting; and (iii) be aligned with the global policy goals outlined in the Kunming-Montreal Global Biodiversity Framework, which was adopted to halt and reverse nature loss by 2030.
We use carbon-neutral biomass and manufacturing residuals to generate a majority of the manufacturing energy at our mills. We believe our efforts to advance sustainable forest management and restore forest landscapes are an important lever for mitigating climate change through carbon storage in forests.
INTERNATIONAL EFFORTS
The 2015 Paris Agreement compels international efforts and voluntary commitments toward reducing the emissions of GHGs. While the United States has officially withdrawn from the 2015 Paris Agreement, IP recognizes the importance of global policy action to achieve emission reductions consistent with an increase of “well below 2 ° Celsius above pre-industrial levels and to pursue efforts to limit the temperature increase even further to 1.5 ° Celsius.” Consistent with this objective, participating countries aim to balance GHG emissions generation and sequestration in the second half of this century or, in effect, achieve net-zero global GHG emissions.
To assist member countries in meeting GHG reduction obligations, the European Union operates an Emissions Trading System ("EU ETS"). Our operations in the EU experience indirect impacts of the EU ETS through purchased power pricing. Neither the direct nor indirect impacts of the EU ETS have been material to the Company. However, these impacts could become material in the future due to (i) our recent business combination with DS Smith and the resulting increased global footprint and (ii) depending on how the 2015 Paris Agreement's non-binding commitments or allocation of, and market prices for, GHG credits under existing rules evolve over the coming years.
Additionally, the EU’s Corporate Sustainability Reporting Directive (“CSRD”), Corporate Sustainability Due Diligence Directive ("CSDDD") and Deforestation Regulation (“EUDR”), each impose additional compliance responsibilities on the Company. The CSRD requires additional reporting processes for greater accountability. The Company’s first reporting year under the CSRD is expected to be 2026. The CSRD standards replace the existing Non-Financial Reporting Directive and expands reporting requirements for companies operating in the EU. The implementation timeline varies depending on the type of entity.
The CSDDD requires reporting and documentation about due diligence systems covering company and supply chains. The CSDDD entered into force in 2024 and EU member states have two years to implement through national laws and decide on enforcement. CSDDD implementation and compliance timeline may vary based on details once finalized by each member state.
The EUDR requires companies trading in products derived from certain commodities to conduct extensive diligence on the value chain to ensure goods do not result from recent deforestation, forest degradation or breaches of local environmental and social laws. Currently, the Company is evaluating the implications of the EUDR to its business with the expected reporting date now postponed until 2026.
U.S. EFFORTS, INCLUDING STATE, REGIONAL AND LOCAL MEASURES
Responses to climate change may result in regulatory risks as new laws and regulations aimed at reducing GHG emissions come into effect. The EPA manages regulations to: (i) control GHGs from mobile sources by adopting transportation fuel efficiency standards; (ii) control GHG emissions from new Electric Generating Units (“EGUs”); (iii) control emissions from new oil and gas processing operations; and (iv) require reporting of GHGs from sources of GHGs greater than 25,000 tons per year.
Several U.S. states, including states in which we operate facilities, have enacted or are considering legal measures to require the reduction and reporting of emissions of GHGs by companies and public utilities. California, New York and Virginia have already enacted such programs, although these regulations have not had, and are not expected to have a material impact on the Company. For example, the State of California passed the Climate Corporate Data Accountability Act and the Climate-Related Financial Risk Act, which imposes climate-related reporting obligations on companies doing business in California meeting specified thresholds, including the Company. We monitor proposed programs in other states as well; however, it is unclear what impacts, if any, future state-level or local GHG rules will have on the Company’s operations, as well as the outcome of any legal challenges to these rules.
SUMMARY
Regulation related to GHGs and climate change continues to evolve in the areas of the world in which we do business and areas in which we will do business following completion of our business combination with DS Smith. However, it is unclear
what actions will be taken and when such actions will occur and at this time it is not reasonably possible to estimate the Company’s costs of compliance with rules that have not yet been adopted or implemented and may not be adopted or implemented in the future and may be undergoing legal challenges. In addition to possible direct impacts, future legislation and regulation could have indirect impacts on the Company, such as higher prices for transportation, energy and other inputs, as well as more protracted air permitting processes, causing delays and higher costs to implement capital projects. Other possible indirect impacts may include influence on competitive position due to customer and end-consumer preferences regarding low-carbon, circular products with a high recycling rate along with tax credit and funding opportunities to expand green energy production and carbon credit generation. The Company has controls and procedures in place to track GHG emissions from our facilities, as well as to stay informed about developments concerning possible climate-related laws, regulations, accords, and policies where we operate. We regularly assess whether such developments may have a material effect on the Company, its operations or financial condition, and whether we have any related disclosure obligations under applicable rules and regulations.
Moreover, compliance with legal requirements related to GHGs and/or climate change which are currently in effect or which may be effective or enacted in the future are expected to require future expenditures to meet GHG emission reduction, disclosure or other obligations. These obligations may include carbon taxes, the requirement to purchase GHG credits or the need to acquire carbon offsets. We may also incur significant expenditures in relation to our efforts to meet our internal targets or goals with respect to GHGs and climate change, including our Vision 2030 goal on GHGs as discussed above. Furthermore, in connection with complying with legal requirements and/or our efforts to meet our internal targets and goals, we have made and expect to continue to make capital and other investments to displace traditional fossil fuels, such as fuel oil and coal, with lower carbon alternatives, such as biomass and natural gas. Rather than rely on carbon offsets, we focus on reducing energy consumption as well as relative GHG emissions across our mills and manufacturing facilities. Currently, these efforts and obligations have not materially impacted the Company but such efforts and obligations may have a material impact on the Company in the future.
We believe sustainability is a key element of corporate governance promoted by our Board of Directors, committees of the Board of Directors and management.
Our Board of Directors has primary oversight of the Company's enterprise risk management program, which includes sustainability. The Board receives updates from our Chief Sustainability Officer ("CSO") and additional members of management. Our Board of Directors also conducts periodic reviews of components of the sustainability strategy and performance and reviews material key sustainability-related developments and issues. Our standing committees share responsibility on sustainability as described below:
Audit and Finance Committee
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Reviews processes and controls for external reporting of sustainability and social impact data and metrics.
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Reviews related disclosures in Annual Report on Form 10-K and other sustainability reports.
Governance Committee
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Reviews and reassesses adequacy of, and oversees compliance with, our Corporate Governance Guidelines.
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Seeks Board of Director candidates with diverse backgrounds.
Management Development and Compensation Committee ("MDCC Committee")
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Recommends approval of our Chief Executive Officer's ("CEO") sustainability-focused objectives and evaluates performance.
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Considers sustainability factors in ELT compensation and in overall compensation plan design.
Public Policy and Environment Committee ("PPE Committee")
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Reviews sustainability and social impact policies, plans and performance to ensure commitments to stewardship.
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Stays current on emerging sustainability and social impact trends and issues impacting the Company.
At the management level, ownership and governance of sustainability matters is embedded in the organization from the top down. Our CEO and ELT are responsible for corporate strategy and leadership including incorporation of our sustainability goals and standards into our daily operations and long-term business strategy. Our ELT, which is comprised of one executive vice president and four senior vice presidents who report directly to the CEO and oversee critical functions and business units within the Company, evaluates sustainability issues based on input from function-specific councils that report to
the ELT. The ELT receives several sustainability updates throughout the year from our CSO.
For additional information regarding risks associated with climate change and the evolving regulatory landscape, see Item 1A. Risk Factors – We are subject to risks associated with climate change and other sustainability matters and global, regional and local weather conditions as well as legal, regulatory and market responses to climate change and we are subject to a wide variety of laws, regulations and other government requirements that may change in significant ways, and the cost of compliance with such requirements, or the failure to comply with such requirements, could impact our business and results of operations.
Additional information regarding climate change and the Company is available in our annual Sustainability Report and ISSB IFRS S2 Report (previously TCFD), both of which can, or will be, found on our website at www.internationalpaper.com. Our 2024 Sustainability Report and 2024 ISSB IFRS S2 will be available later in 2025. The information contained in such reports is not incorporated by reference into this Annual Report on Form 10-K and should not be considered part of this or any other report that we file with or furnish to the SEC. Any targets or goals with respect to sustainability matters discussed herein or in our sustainability reports as noted above are forward-looking statements and may be aspirational. These targets or goals are not guarantees of future results and involve assumptions and known and unknown risks and uncertainties, some of which are beyond our control.
Raw materials essential to our businesses include wood fiber, purchased in the form of pulpwood, wood chips and old corrugated containers ("OCC"), and certain chemicals, including caustic soda, starch and adhesives. For further information concerning fiber supply purchase agreements, see page 46.
INFORMATION ABOUT OUR EXECUTIVE OFFICERS
The following are the executive officers of our Company as of the date of this filing.
Andrew K. Silvernail, 54, joined International Paper as chief executive officer on May 1, 2024 and became chairman of the International Paper Board of Directors on October 1, 2024. Mr. Silvernail has two decades of experience leading global companies in the manufacturing and technology sectors. He joined IP from KKR & Co., Inc., a global investment firm,
where he served as an executive advisor, and 5 Nails, LLC, a private investment advisory firm where he served as founder, chair and chief executive officer (2022-2024). Mr. Silvernail served as the chairman and chief executive officer of Madison Industries, one of the world’s largest privately held companies (2021). Prior to that, Silvernail served as chairman and chief executive officer of IDEX Corporation (NYSE: IEX) (2011-2020). Mr. Silvernail previously held executive positions at Rexnord Industries, Newell Rubbermaid (NASDAQ: NWL) and Danaher Corporation (NYSE: DHR). He serves on the board of directors of Stryker Corporation (NYSE: SYK) and Potter Global Technologies, a privately held company specializing in fire and safety solutions.
Clay R. Ellis, 54, senior vice president - Global Cellulose Fibers and IP Asia since January 2023. Mr. Ellis previously served as senior vice president - Enterprise Operational Excellence (2019-2022) and vice president - Manufacturing, Global Cellulose Fibers (2016-2019). Prior to that, he served as vice president of Pulp (2014-2016), and vice president Manufacturing, North American Papers (2012-2014). Mr. Ellis joined International Paper in 1992.
W. Thomas Hamic, 58, was appointed executive vice president and president - North American Packaging Solutions effective September 1, 2024. In this newly created role, Mr. Hamic leads the Container and Containerboard businesses in North America. Prior to this promotion, Mr. Hamic served as senior vice president - North American Container and chief commercial officer since January 2023. Mr. Hamic also served as senior vice president - Global Cellulose Fibers and Enterprise Commercial Excellence (2020-2022), senior vice president - Containerboard and Enterprise Commercial Excellence (2019-2020), vice president and general manager - Containerboard and Recycling, North American Container (2015-2019), vice president and general manager of the South Area Container the Americas (2009), and vice president, Industrial Packaging Group’s Finance and Strategy (2010). Mr. Hamic joined International Paper in 1991.
Timothy S. Nicholls, 63, has been the Company’s chief financial officer since June 2018. At completion of the DS Smith business combination, Mr. Nicholls also began serving as the interim leader of the combined Company’s Europe Middle East & Africa team responsible for leading integration planning. Mr. Nicholls previously served as senior vice president - Industrial Packaging the Americas (2017-2018), senior vice president - Industrial Packaging (2014-2016), senior vice president - Printing and Communications Papers of the Americas (2011-2014), senior vice president and chief financial officer (2007-2011), vice president and executive
project leader of IP Europe (2007), and vice president and chief financial officer - IP Europe (2005-2006). Mr. Nicholls joined International Paper in 1999 following our acquisition of Union Camp Corporation where he had worked since 1991.
Joy N. Roman, 46, was appointed as the Company’s senior vice president, chief strategy and people officer effective February 3, 2025. Ms. Roman has broad experience and a proven track record in talent development, organizational effectiveness and strategy deployment in large global companies. Ms. Roman joined the Company from Berry Global, Inc. (NYSE: BERY), a manufacturer and marketer of plastic packaging solutions, where she served as chief people and strategy officer since April 2024. Prior to this position, Roman served as group head of human resources for the technical and sustainability functions for Anglo American (LSE: AAL), a global mining company (2022-2023), and as chief human resources officer for the De Beers Group, a diamond company and joint venture of Anglo American and the government of the Republic of Botswana (2021-2022). She also spent four years as senior vice president and chief human resources officer for Toll Brothers (NYSE: TOL) (2017-2021), a builder of luxury homes, and served in various roles of increasing responsibility across the strategy and human resource functions at 3M (NYSE: MMM), a diversified technology company (2015-2017).
Joseph R. Saab, 56, has been senior vice president, general counsel and corporate secretary since July 2022 and served as interim senior vice president – Human Resources and Corporate Affairs (August 2024-February 2025). Mr. Saab previously served as vice president, deputy general counsel and assistant corporate secretary (2019-2022) and associate general counsel - Industrial Packaging North America, Europe, Middle East & Africa (2014-2019). Mr. Saab joined International Paper in 2001.
There are no family relationships, as defined by the instructions to this item, among any of the Company’s executive officers and any other executive officers or directors of the Company.
Certain statements in this Annual Report on Form 10-K that are not historical in nature may be considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements can be identified by the use of forward-looking or conditional words such as “expects,” “anticipates,” “believes,” “estimates,” “could,” “should,” “can,” “forecast,” “intend,” “look,” “may,” “will,” “remain,” “confident,” “commit” and “plan” or similar expressions. These
statements are not guarantees of future performance and reflect management’s current views and speak only as to the dates the statements are made and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in these statements. All statements, other than statements of historical fact, are forward-looking statements, including, but not limited to, statements regarding anticipated financial results, economic conditions, industry trends, future prospects, and the anticipated benefits, execution and consummation of corporate transactions or contemplated acquisitions, including our recently completed business combination with DS Smith Plc, subsequently re-registered as DS Smith Limited ("DS Smith"), which closed on January 31, 2025. Factors which could cause actual results to differ include but are not limited to: (i) our ability to consummate and achieve the benefits expected from, and other risks associated with, acquisitions, joint ventures, divestitures, spinoffs, capital investments and other corporate transactions, including, but not limited to, our business combination with DS Smith; (ii) our ability to integrate and implement our plans, forecasts, and other expectations with respect to the combined company, including in light of our increased scale and global presence; (iii) our failure to comply with the obligations associated with being a public company listed on the New York Stock Exchange and the London Stock Exchange and the costs associated therewith; (iv) risks with respect to climate change and global, regional, and local weather conditions, as well as risks related to our targets and goals with respect to climate change and the emission of greenhouse gases and other environmental, social and governance matters, including our ability to meet such targets and goals; (v) loss contingencies and pending, threatened or future litigation, including with respect to environmental related matters; (vi) the level of our indebtedness, risks associated with our variable rate debt, and changes in interest rates (including the impact of current elevated interest rate levels); (vii) the impact of global and domestic economic conditions and industry conditions, including with respect to current challenging macroeconomic conditions, recent inflationary pressures and changes in the cost or availability of raw materials, energy sources and transportation sources, supply chain shortages and disruptions, competition we face, cyclicality and changes in consumer preferences, demand and pricing for our products, and conditions impacting the credit, capital and financial markets; (viii) risks arising from conducting business internationally, domestic and global geopolitical conditions, military conflict (including the Russia/Ukraine conflict, the conflict in the Middle East, the further expansion of such conflicts, and the geopolitical and economic consequences associated therewith), changes in
currency exchange rates, including in light of our increased proportion of assets, liabilities and earnings denominated in foreign currencies as a result of our business combination with DS Smith, trade policies (including but not limited to protectionist measures and increased tariffs and retaliatory tariffs) and trade tensions, downgrades in our credit ratings, and/or the credit ratings of banks issuing certain letters of credit, issued by recognized credit rating organizations; (ix) the amount of our future pension funding obligations, and pension and healthcare costs; (x) the costs of compliance, or the failure to comply with, existing, evolving or new environmental (including with respect to climate change and greenhouse gas emissions), tax, trade, labor and employment, privacy, anti- bribery and anti-corruption, and other U.S. and non-U.S. governmental laws, regulations and policies (including but not limited to those in the United Kingdom and European Union); (xi) any material disruption at any of our manufacturing facilities or other adverse impact on our operations due to severe weather, natural disasters, climate change or other causes; (xii) our ability to realize expected benefits and cost savings associated with restructuring initiatives; (xiii) cybersecurity and information technology risks, including as a result of security breaches and cybersecurity incidents; (xiv) our exposure to claims under our agreements with Sylvamo Corporation; (xv) the qualification of such spin-off as a tax-free transaction for U.S. federal income tax purposes; (xvi) risks associated with our review of strategic options for our Global Cellulose Fibers business; (xvii) our ability to attract and retain qualified personnel and maintain good employee or labor relations; (xviii) our ability to maintain effective internal control over financial reporting; and (xix) our ability to adequately secure and protect our intellectual property rights. These and other factors that could cause or contribute to actual results differing materially from such forward-looking statements can be found in our press releases and reports filed with the U.S. Securities and Exchange Commission. In addition, other risks and uncertainties not presently known to the Company or that we currently believe to be immaterial could affect the accuracy of any forward-looking statements. The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.
Item 1A. RISK FACTORS.
The following is a summary of the material risks and uncertainties that could affect our business, financial condition and results of operations. You should read this summary together with the more detailed description of each risk factor contained below.
Risks Related to the Business Combination and the Share Issuance
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Failure to achieve the benefits and operating synergies expected from the business combination of DS Smith.
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Significant integration costs that could cause an interruption of, or loss of momentum in, the activities of the Company.
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Exposure to significant unanticipated liabilities.
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Shareholders are more exposed to currency exchange rate fluctuations.
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Failure to successfully integrate DS Smith and realize the benefits and operating synergies expected from the business combination to the extent or within the timeframes anticipated
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Adverse effects and pricing differentials arising from the maintenance of two exchange listings
Risks Related to Industry Conditions
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Fluctuations in the prices of and the demand for our products due to factors such as economic cyclicality and changes in customer or consumer preferences, and government regulations.
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Changes in the cost and availability of raw materials, energy and transportation have recently affected, and could continue to affect, our profitability.
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Competition and downward pricing pressure in the global packaging industry could negatively impact our financial results.
Risks Related to Market and Economic Factors
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Developments in general business and economic conditions could have an adverse effect on the demand for our products, our financial condition and the results of our operations.
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Changes in international conditions or other risks arising from conducting business internationally could adversely affect our business and operations.
Risks Related to Climate and Weather and Social and Environmental Impact Reporting
- We are subject to risks associated with climate change and other sustainability matters and global, regional and local weather conditions as well as by legal, regulatory, and market responses to climate change.
Risks Related to our Operations
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We are subject to cybersecurity and information technology risks related to breaches of security pertaining to sensitive company, customer, employee and vendor information as well as breaches in the technology used to manage operations and other business processes.
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We are subject to a wide variety of laws, regulations and other government requirements that may change in significant ways, and the cost of compliance with such requirements, or the failure to comply with such requirements could impact our business and results of operations.
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Material disruptions at one of our manufacturing facilities could negatively impact financial results.
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We operate in a challenging market for talent and may fail to attract and retain qualified personnel, including key management personnel.
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Our failure to maintain good employee or labor relations may affect our respective operations.
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We may be unable to realize the expected benefits and costs savings associated with restructuring initiatives, including our 80/20 strategic approach.
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We may not achieve the expected benefits from strategic acquisitions, joint ventures, divestitures, spin-offs, capital investments, capital projects and other corporate transactions that are or will be pursued.
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There are risks associated with our review of strategic options for our Global Cellulose Fibers business, and there is no assurance that this review will result in any transaction or other outcome.
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Our continued growth will depend on our ability to retain existing customers and attract new customers.
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Uninsured losses or losses in excess of our insurance coverage for various risks could have an adverse financial effect on our business.
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We may not be able to adequately secure and protect our intellectual property rights, which could harm our competitive advantage.
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We may fail to identify or leverage digital transformation initiatives.
Risks Related to Legal Proceedings and Compliance Costs
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Results of legal proceedings could have a material effect on our consolidated financial results.
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We could be exposed to liability for Brazilian taxes under our agreements with Sylvamo Corporation.
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If our spin-off of Sylvamo Corporation were to fail to qualify for non-recognition treatment for U.S. federal income tax purposes, then we may be subject to significant U.S. federal income taxes.
Risks Related to our Indebtedness
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Changes in credit ratings issued by nationally recognized statistical rating organizations could adversely affect our cost of financing and have an adverse effect on the market price of our securities.
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The level of our indebtedness could adversely affect our financial condition and impair our ability to operate our business.
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We are subject to risks associated with variable rate debt.
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Downgrades in the credit ratings of banks issuing certain letters of credit will increase our cost of maintaining certain indebtedness and may result in the acceleration of deferred taxes.
Risks Related to our Pension and Healthcare Costs
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Our pension and health care costs are subject to numerous factors which could cause these costs to change.
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Our U.S. funded pension plan is currently fully funded on a projected benefit obligation basis; however, the possibility exists that over time we may be required to make cash payments to the plan, reducing the cash available for our business.
The Company faces a variety of risks, including 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 following are material risk factors of which we are aware, including risk factors that could cause the Company’s actual results to differ materially from those contemplated in any forward-looking statement. If any of the events or circumstances described in any of the following risk factors occurs, our business, results of operations and/or financial condition could be materially and adversely affected, and our actual results may differ materially from those contemplated in any forward-looking statements we make in any public disclosures. Additional factors that could affect our business, results of operations and/or financial condition are discussed elsewhere in this Annual Report on Form 10-K (including in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations) and in the Company’s other filings with the Securities and Exchange Commission.
RISKS RELATED TO THE BUSINESS COMBINATION AND THE SHARE ISSUANCE
We may fail to successfully integrate DS Smith and realize the anticipated benefits and operating synergies expected from the business combination, which could adversely affect our business, financial condition and operating results.
On January 31, 2025, we completed the previously announced business combination with DS Smith. The success of the business combination will depend, in significant part, on our ability to successfully integrate DS Smith, grow the revenue of the combined company and realize the anticipated strategic benefits and synergies from the business combination.
The complexity and magnitude of the integration effort associated with the business combination are significant, and integrating DS Smith has resulted, and will continue to result, in significant costs. The integration process could cause an interruption of, or loss of momentum in, the other activities of the Company, and our failure to meet the challenges involved in integrating DS Smith and realize the anticipated benefits of the business combination could adversely aff
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Item 1B. UNRESOLVED STAFF COMMENTS.
Item 1C. CYBERSECURITY.
RISK MANAGEMENT AND STRATEGY
The Company’s cybersecurity risk management processes are integrated into our overall risk management system. The Company has a formalized enterprise risk management program overseen by the
Board of Directors and committees of the Board of Directors that addresses strategic, operational, financial, compliance, legal and information technologies and cybersecurity risks. In addition, the Enterprise Risk Management Council (“ERM Council”) is a management-level team comprised of senior vice presidents and other business leaders responsible for managing enterprise risks and planning and organizing the activities of our organization to minimize the effects of risk on the Company's business and financial results. The ERM Council regularly reports to the Board of Directors on areas of risk and risk management. The Chief Financial Officer serves as the ERM Council Lead. The Chief Audit Executive serves as the ERM Council Process Owner.
As part of our 80/20 strategic approach and our integration of DS Smith, the Company is evaluating how the ERM Council might operate in 2025 to ensure that our structure supports our strategic goals.
The Company has an Information Technology (“IT”) Risk Governance Program that aligns with our enterprise risk management framework and assists with fulfilling oversight responsibilities for major IT risks, including cybersecurity risks. An enterprise Cyber Governance, Risk, and Compliance function manages overall Company cyber risk, coordinating risk management functions with each business. Business and IT leaders conduct cyber risk reviews monthly within each business. These monthly reviews include the evaluation of new and evolving risks, management of risk mitigation plans, and a review of all cybersecurity incidents meeting certain criteria.
Our Risk Assessment Program
The Company has a risk assessment program in place to assess, identify and manage material risks from cybersecurity threats. Cybersecurity risks the Company faces include targeted attacks, ransomware, malware, phishing attacks, data theft, other data or security breaches, virus and intrusion software, as well as attacks to our website, financial applications, operational technology, telecommunications and human resources data. Key aspects of the Company’s cybersecurity program include the following:
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layered technical protective capabilities and detective surveillance controls;
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utilizing independent third parties to assess the Company’s practices related to, and provide expertise and assistance with, various aspects of information security, as further described below;
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courses and awareness training on information security for employees with Company email or access to Company
devices, including phishing, social engineering and other cybersecurity training as well as targeted training for specific roles based on responsibilities and risk level;
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global security and privacy policies; and
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business continuity, incident response and disaster recovery procedures, including table top exercises involving senior leaders.
The Company does not believe that risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected the Company, including its business strategy, results of operations or financial condition. For a full discussion of cybersecurity risks facing the Company, please see Part I, Item 1A. Risk Factors - We are subject to cybersecurity and information technology risks related to breaches of security pertaining to sensitive company, customer, employee and vendor information as well as breaches in technology used to manage operations and other business processes.
The Company carries cyber insurance which provides coverage in connection with cybersecurity breaches.
Engagement of Third Parties
The Company engages third parties in connection with assessing, identifying and managing its cybersecurity risks, including the following:
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Engagement of an independent third party with incident response expertise to provide intelligence-based cybersecurity solutions and services to assist the Company with preparing for, preventing, investigating, responding to and remediating cybersecurity incidents, including attacks that target on-premise, cloud, and critical infrastructure environments.
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Engagement of an independent third party to conduct an annual security program assessment of the controls, maturity and performance of the Company’s information security program and the information security risk associated with the Company’s business systems. The assessment uses the National Institute of Standards and Technology Cybersecurity Framework as its benchmark.
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Engagement of a leading third-party service provider to annually perform an external and an internal penetration assessment using industry standard tools and techniques.
Additionally, our Internal Audit team conducts annual assessments of our cyber programs and controls.
Oversight of Third Parties
The Company has processes to oversee and identify material risks from cybersecurity threats associated with the Company’s use of third-party service providers. In this regard, the Company’s cybersecurity risk management program takes into account third-party systems whereby the Company could be impacted by the compromise of the security of vendors or other business relations of the Company, and the Company has a comprehensive third-party access management system. In addition, the Company conducts risk-based due diligence on the profiles of third-party service providers with respect to cybersecurity risks prior to engagement, and providers of critical services are continuously monitored with respect to security risks. The Company also requires service providers to provide prompt notification of any actual or suspected breach impacting Company data or operations.
GOVERNANCE
Role of the Board of Directors and its Committees
International Paper has an integrated board and executive-level governance structure that oversees risks from cybersecurity threats. The Company’s Board of Directors has primary oversight of our enterprise risk management program, which includes cybersecurity risk. Moreover, the Board of Directors is supported in its oversight by the Audit and Finance Committee and PPE Committee, which share oversight responsibilities related to the Company’s information security programs. The Audit and Finance Committee reviews management’s cybersecurity and information security risk management programs and controls, including processes for management’s identification and reporting of material cybersecurity incidents. The PPE Committee reviews technology issues pertinent to the Company including those associated with information and operational technology, cybersecurity and data security and assesses related Company strategies.
Our Board of Directors, Audit and Finance Committee and PPE Committee each receives periodic updates on cybersecurity issues from management (including our Chief Information Security Officer (“CISO”)). For example, the CISO provides reports to the Audit and Finance Committee and PPE Committee at least annually regarding cybersecurity risks, as well as plans and strategies to mitigate those risks.
Furthermore, our ERM Council annually reports its activities either directly to the Board of Directors or through the Audit and Finance Committee.
Role of Management
At a management level, our cybersecurity risk management program is led by our CISO. Our current CISO has been with the Company for over 30 years, worked in Information Technology for over 25 years, and has led the Company’s security efforts since 2011. He was appointed as the Company’s first CISO in 2019. Our CISO stays current on cybersecurity issues and trends through continuing education activities such as participation at conferences and in webinars. Our CISO reports to our Chief Financial Officer. Additionally, our CISO and members of the cybersecurity team hold a number of industry recognized certifications, such as Certified Information Systems Security Professional, Certified Information Security Manager, and Certified Ethical Hacker, among others.
The Company has also adopted a cyber-incident response plan which provides for controls and procedures in connection with cybersecurity events, including escalation procedures summarized below. The cyber-incident response plan is designed to address non-operational and operational cybersecurity events. Evaluation and response to cybersecurity events is led by our Cybersecurity Incident Response Team (“CIRT”), under the direction of our CISO. The CIRT is comprised of subject matter experts representing information security, information technology, operational technology and legal. The CIRT performs an impact assessment with respect to cybersecurity incidents, gathers facts and provides a chronology of events in connection therewith, and leads remediation and recovery activities. Our General Counsel, Senior Vice President, Chief People and Strategy Officer, Chief Ethics and Compliance Officer (or their respective designees), and CISO review and assess significant non-operational data breaches. Cybersecurity events that meet specified criteria for operational impact are escalated for further review to our Business Continuity Incident Command Team (“Incident Command Team”). The Incident Command Team performs an initial assessment that includes evaluation of the cybersecurity event’s severity, response required, and estimated business cost, and leads the execution of business continuity plans to maintain Company operations. Cybersecurity events meeting certain criteria are escalated to our Disclosure Committee, General Counsel and Chief Financial Officer for further review, and, if appropriate, may be further elevated for the review of the Board of Directors. The Disclosure Committee, General Counsel and Chief Financial Officer assess and determine materiality using the facts gathered and chronology of events provided by the Incident Command Team.
Item 2. PROPERTIES.
A listing of our production facilities by segment, the vast majority of which we own, can be found in Appendix I hereto, which is incorporated herein by reference.
The Company’s facilities are in good operating condition and are suited for the purposes for which they are presently being used. We continue to study the economics of modernization or adopting other alternatives for higher cost facilities.
CAPITAL INVESTMENTS AND DISPOSITIONS
Given the size, scope and complexity of our business interests, we continually examine and evaluate a wide variety of business opportunities and planning alternatives, including possible acquisitions and sales or other dispositions of properties. You can find a discussion about the level of planned capital investments for 2025 on page 45, and dispositions and restructuring activities as of December 31, 2024, on page 37 of Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, and in Note 7 Acquisitions on page 72 of Item 8. Financial Statements and Supplementary Data.
Item 3. LEGAL PROCEEDINGS.
Information concerning certain legal proceedings of the Company is set forth in Note 13 Commitments and Contingent Liabilities on pages 79 through 83 of Item 8. Financial Statements and Supplementary Data which is incorporated herein by reference.
The Company is not subject to any administrative or judicial proceeding arising under any federal, state or local provisions that have been enacted or adopted regulating the discharge of materials into the environment or primarily for the purpose of protecting the environment that is likely to result in monetary sanctions of $1 million or more.
Item 4. MINE SAFETY DISCLOSURES.
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
As of the filing of this Annual Report on Form 10-K, the Company’s common shares are traded on the New York Stock Exchange (NYSE: IP) and on the London Stock Exchange (LSE: IPC). As of February 14, 2025, there were approximately 9,900 record holders of common stock of the Company.
We pay regular quarterly cash dividends and expect to continue to pay regular quarterly cash dividends in the foreseeable future, though each quarterly dividend payment is subject to review and approval by our Board of Directors.
The table below presents information regarding the Company’s purchases of its equity securities for the time periods presented.
PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS.
| Period | Total Number of Shares Purchased (a) | Average Price Paid per Share | Total Number of Shares (or Units) Purchased as Part of Publicly Announced Programs | Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs (in billions) | ||||||||||
| October 1, 2024 - October 31, 2024 | 11,250 | $ | 48.62 | — | $ | 2.96 | ||||||||
| November 1, 2024 - November 30, 2024 | 3,381 | 51.57 | — | 2.96 | ||||||||||
| December 1, 2024 - December 31, 2024 | 1,957 | 53.64 | — | 2.96 | ||||||||||
| Total | 16,588 |
*(a)*16,588 shares were acquired from employees or members of our Board of Directors as a result of share withholdings to pay income taxes under the Company's stock program. On October 11, 2022, our Board of Directors increased the authorization up to a total of $3.35 billion shares. This repurchase program does not have an expiration date. As of December 31, 2024, approximately $2.96 billion aggregate shares of our common stock remained authorized for repurchase.
PERFORMANCE GRAPH
The performance graph shall not be deemed "soliciting material" or to be "filed" with the Commission or subject to Regulation 14A or 14C under, or to the liabilities of Section 18 of the Securities Exchange Act of 1934, as amended, (the "Exchange Act") and will not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent
the Company specifically incorporates it by reference into such a filing.
The following line graph compares a $100 investment in Company stock on December 31, 2019 with a $100 investment in our peer group and the S&P Composite-500 Stock Index (S&P 500 Index) also made at market close on December 31, 2019. The graph portrays total return, 2019-2024, assuming reinvestment of all dividends.
1)The companies included in the Peer Group are DS Smith PLC, Klabin S.A., Mondi Group, Packaging Corporation of America, and Stora Enso Group.
2)Returns are calculated in $USD.
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10-K. In addition to historical
consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs that involve significant risks and uncertainties. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to those differences include those discussed below and elsewhere in this Annual Report on Form 10-K, particularly in “Risk Factors” and “Forward-Looking Statements.”
The following generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023. Discussion of historical items in 2022, and year-to-year comparisons between 2023 and 2022, can be found in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 16, 2024, under Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Full-year 2024 net earnings attributable to shareholders were $557 million ($1.57 per diluted share) compared with $288 million ($0.82 per diluted share) for full-year 2023.
In 2024, we initiated our strategy to deliver profitable growth as the low-cost, most reliable and innovative sustainable packaging solutions provider for our customers. Through a disciplined 80/20 approach, we restructured our corporate organization, added resources to the business, reduced structural costs through footprint actions and successfully piloted regional box plant optimization. Our earnings stabilized in the fourth quarter 2024 and we intend to accelerate earnings improvement in 2025. Our Go-to-Market value over volume reset was largely complete in 2024 and we expect the final unfavorable impacts to volume to be behind us later in 2025. There was a significant focus throughout 2024 on cost reduction. This included a zero-up approach to the corporate organization, including shifting resources to the business and reducing corporate staffing to the level required as a public company. We expect this to reduce costs by approximately $120 million on a run rate basis. Additionally, we made the challenging decision to close five box plants and our Global Cellulose Fibers Georgetown, South Carolina mill. These actions are expected to remove roughly another $110 million of annual cost on a run rate basis. Mill reliability was an issue in 2024 resulting in elevated costs throughout the year. This presents a significant cost reduction opportunity and we will continue to improve the reliability at our mills and optimize our mill and box system so that we are able to reduce structural costs. Finally, we completed the acquisition of DS Smith on January 31, 2025, creating a global leader in sustainable packaging solutions, focused on the attractive and growing North American and EMEA regions.
Comparing 2024 financial performance to 2023, sales in our North American Industrial Packaging business were relatively flat versus the prior year. This was due in part to higher price and mix driven by favorable prior index movements and the execution of our go-to-market strategy. The improved price and mix was offset by lower volumes as we worked through
customer contract restructuring. This decline was in line with our expectations. Sales in our Global Cellulose Fibers business were lower compared to prior year. This was due to lower price and mix driven by prior index movements. Volume was relatively flat versus 2023. Cost of products sold in our North American Industrial Packaging business was lower versus the prior year in line with lower sales during 2024 along with lower maintenance outage expenses. This was partially offset by higher costs associated with mill reliability issues along with increased input costs on higher recovered fiber costs. Cost of products sold in our Global Cellulose Fibers business was lower versus the prior year in line with lower sales during 2024 along with lower maintenance outage expenses and lower input costs. Cost of products sold includes higher costs associated with mill reliability issues. Selling and administrative expenses were higher in our North American Industrial Packaging and Global Cellulose Fibers businesses primarily driven by higher employee incentive compensation expense. Distribution expenses were lower in both our North American Industrial Packaging and Global Cellulose Fibers businesses primarily driven by lower freight expense on reduced sales.
Looking ahead to the first quarter 2025 in our North American Industrial Packaging business, as compared to the fourth quarter 2024 and without consideration of the DS Smith acquisition, we expect slightly lower price and mix based on lower export pricing observed to date along with an unfavorable seasonal mix impact. Volume is expected to be slightly higher in the first quarter 2025 due to two more shipping days partially offset by the near-term impact of our go-to-market strategy. Operations and costs are expected to increase earnings driven by the benefits of our box plant optimization as well as the non-repeat of the higher incentive compensation costs and other unfavorable items from the fourth quarter 2024. Maintenance outage expense is expected to be marginally lower relative to the fourth quarter 2024. Input costs are expected to be relatively flat as higher energy costs will be offset by lower recovered fiber costs. Finally, in February we announced our plan to close the containerboard mill in Campti, Louisiana with operations expected to cease by March 31, 2025. We estimate that the closure will result in aggregate pre-tax charges of approximately $357 million, including pre-tax noncash asset write-offs of approximately $311 million (of which $276 million is accelerated depreciation), and pre-tax cash severance and other shutdown charges of approximately $46 million. In our Global Cellulose Fibers business, we expect price and mix to be lower due to unfavorable prior index movements. We expect volume to be relatively flat. Operations and costs are expected to increase earnings due to
improved mill performance and reliability along with the non-repeat of the higher incentive compensation costs and other unfavorable one-time items from the fourth quarter 2024. Maintenance outage expense is expected to decrease earnings while input costs are expected to be stable relative to the fourth quarter 2024.
In closing, we believe 2025 will be a transformational year. During the first few months, we anticipate earnings will continue the stabilization trend we saw in the fourth quarter 2024. As we progress further in the year, we expect our earnings to progressively ramp up as the commercial contract restructuring is completed and the 80/20 initiatives deliver value. We have an ambitious pipeline of capital projects that we predict will facilitate the regional optimization of our box system and deliver profitable market share growth. We believe we are well on our way to building a performance-driven and customer-centric culture. We are confident we have developed the right strategy and a concrete plan that will deliver customer excellence and drive profitable growth. We believe our actions will drive transformational improvements and create significant value for our shareholders.
Acquisition of DS Smith
On January 31, 2025, the Company, through its indirect wholly owned subsid
Showing the first 8K of 87K characters. Open the full section
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
See the preceding discussion regarding market risk.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
REPORT OF MANAGEMENT ON:
Financial Statements
The management of International Paper Company is responsible for the preparation of the consolidated financial statements in this Annual Report on Form 10-K. The consolidated financial statements have been prepared using accounting principles generally accepted in the United States of America considered appropriate in the circumstances to present fairly the Company’s consolidated financial position, results of operations and cash flows on a consistent basis. Management has also prepared the other information in this Annual Report on Form 10-K and is responsible for its accuracy and consistency with the consolidated financial statements.
As can be expected in a complex and dynamic business environment, some financial statement amounts are based on estimates and judgments. Even though estimates and judgments are used, measures have been taken to provide reasonable assurance of the integrity and reliability of the financial information contained in this Annual Report on Form 10-K. We have formed a Disclosure Committee to oversee this process.
The accompanying consolidated financial statements have been audited by the independent registered public accounting firm Deloitte & Touche LLP (PCAOB ID No. 34). During its audits, Deloitte & Touche LLP was given unrestricted access to all financial records and related data, including minutes of all meetings of shareholders and the Board of Directors and all committees of the Board of Directors. Management believes that all representations made to the independent auditors during their audits were valid and appropriate.
Internal Control Over Financial Reporting
The management of International Paper Company is also responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules (13a-15(e) and 15d-15(e) under the Exchange Act). Internal control over financial reporting is the process designed by, or under the supervision of, our principal executive officer and principal financial officer, and effected by our Board of Directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes. All internal control systems have inherent limitations, including the possibility of circumvention and overriding of controls,
and therefore can provide only reasonable assurance of achieving the designed control objectives. The Company’s internal control system is supported by written policies and procedures, contains self-monitoring mechanisms, and is audited by our internal audit function. Appropriate actions are taken by management to correct deficiencies as they are identified. Our procedures for financial reporting include the active involvement of senior management, our Audit and Finance Committee and our staff of highly qualified financial and legal professionals.
The Company has assessed the effectiveness of its internal control over financial reporting as of December 31, 2024. In making this assessment, it used the criteria described in “Internal Control – Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Based on this assessment, management believes that, as of December 31, 2024, the Company’s internal control over financial reporting was effective.
The Company’s independent registered public accounting firm, Deloitte & Touche LLP, has issued its report on the effectiveness of the Company’s internal control over financial reporting. The report appears on pages 54 through 57.
Internal Control Environment And Board Of Directors Oversight
Our internal control environment includes an enterprise-wide attitude of integrity and control consciousness that establishes a positive “tone at the top.” This is exemplified by our ethics program that includes long-standing principles and policies on ethical business conduct that require employees to maintain the highest ethical and legal standards in the conduct of International Paper business, which have been distributed to all employees. The Company provides a toll-free telephone helpline whereby any employee may anonymously report suspected violations of law or International Paper’s policy; and maintains an office of ethics and business practice. The internal control system further includes careful selection and training of supervisory and management personnel, appropriate delegation of authority and division of responsibility, dissemination of accounting and business policies throughout International Paper, and an extensive program of internal audits with management follow-up.
The Board of Directors, assisted by the Audit and Finance Committee, monitors the integrity of the Company’s financial statements and financial reporting procedures, the performance of the Company’s internal audit function and independent auditors, and other matters set forth in its charter. The
Audit and Finance Committee, which consists of independent directors, meets regularly with representatives of management, and with the independent auditors and the Internal Auditor, with and without management representatives in attendance, to review their activities. The Audit and Finance Committee Charter takes into account the New York Stock Exchange rules relating to audit committees and the SEC rules and regulations promulgated as a result of the Sarbanes-Oxley Act of 2002. The Audit and Finance Committee has reviewed and discussed the consolidated financial statements for the year ended December 31, 2024, including critical accounting policies and significant management judgments, with management and the independent auditors. The Audit and Finance Committee’s report recommending the inclusion of such financial statements in this Annual Report on Form 10-K will be set forth in our Proxy Statement.
ANDREW K. SILVERNAIL
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
TIMOTHY S. NICHOLLS
SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of International Paper Company:
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of International Paper Company and subsidiaries (the "Company") as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income (loss), changes in equity, and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.
We did not audit the financial statements of Ilim S.A. for the year ended December 31, 2022. The Company’s investment in Ilim S.A. was accounted for by use of the equity method and was presented as held-for-sale and within discontinued operations as of December 31, 2022, as disclosed in Note 10. The accompanying financial statements of the Company include its equity earnings in Ilim S.A. of $296 million for the year ended December 31, 2022. The financial statements of Ilim S.A. were audited by AO Business Solutions and Technologies whose report has been furnished to us, and our opinion, insofar as it rel
Showing the first 8K of 208K characters. Open the full section
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
Item 9A. CONTROLS AND PROCEDURES.
ITEM 9A. CONTROLS AND PROCEDURES
As of December 31, 2024, an evaluation was carried out under the supervision and with the participation of the Company’s management, including our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (as that term is defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act). Based upon this evaluation, our principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures were effective as of December 31, 2024.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There have been no changes in our internal control over financial reporting during the quarter ended December 31, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
See Item 8. Financial Statements and Supplementary Data on pages 52 and 53 of this Form 10-K for management's annual report on our internal control over financial reporting and the attestation report of our independent public accounting firm.
Item 9B. OTHER INFORMATION.
Item 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.
During the quarter ended December 31, 2024, no director or Section 16 officer adopted or terminated any Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements, as defined in Item 408 of Regulation S-K.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
None.
Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Information concerning our directors is hereby incorporated by reference to our definitive proxy statement for the Annual Meeting of Shareowners (the "Proxy Statement") to be held in May 2025 that will be filed with the Securities and Exchange Commission ("SEC") within 120 days of the close of our fiscal year. The Audit and Finance Committee of
the Board of Directors has at least one member who is a financial expert, as that term is defined in Item 401(d)(5) of Regulation S-K. Further information concerning the composition of the Audit and Finance Committee is hereby incorporated by reference to the Proxy Statement. Information with respect to our executive officers is set forth on pages 10 and 11 in Part I, Item 1 of this Form 10-K under the caption, “Information About Our Executive Officers.”
Executive officers of International Paper are elected to hold office until the next annual meeting of the Board of Directors following the annual meeting of shareholders and, until the election of successors, subject to removal by the Board.
The Company’s Code of Conduct (the "Code") is applicable to all employees of the Company, including the CEO and senior financial officers, as well as the Board of Directors. We disclose any amendments to our Code and any waivers from a provision of our Code granted to our directors, CEO and senior financial officers on our website within four business days following such amendment or waiver. To date, no waivers of the Code have been granted.
We have adopted an Insider Trading Policy applicable to our directors, officers, and employees, and have implemented processes for the Company, that we believe are reasonably designed to promote compliance with insider trading laws, rules, and regulations, the UK Market Abuse Regulation, and the NYSE listing standards.
Our Insider Trading Policy prohibits our employees and related persons and entities from trading in securities of International Paper and other companies while in possession of material, non-public information. Our Insider Trading Policy also prohibits our employees from disclosing material, non-public information regarding International Paper, or any other publicly traded company, to others who may trade on the basis of that information. In addition, with regard to the Company’s trading in its own securities, it is the Company’s policy to comply with the federal securities laws and the applicable exchange listing requirements. A copy of our Insider Trading Policy is filed as Exhibit 19 to this Form 10-K.
We make our Corporate Governance Guidelines, our Code, our Insider Trading Policy and the Charters of our Audit and Finance Committee, MDCC, Governance Committee and PPE Committee available free of charge on our website (www.internationalpaper.com), and in print to any shareholder who requests them. Our Corporate Governance Statement as required under the FCA's Disclosure Guidance and Transparency Rule ("DTR") 7.2.2 is available on the Governance page of the
Investors tab of our website at internationalpaper.com under Governance Documents. In addition, requests for printed copies may be directed to the corporate
secretary at our corporate headquarters.
Please direct your request to:
International Paper Company
Attn: Mr. Joseph R. Saab, Corporate Secretary
6400 Poplar Avenue
Memphis, TN 38197
Information with respect to compliance with Section 16(a) of the Exchange Act and our corporate governance is hereby incorporated by reference to our Proxy Statement.
Item 11. EXECUTIVE COMPENSATION.
ITEM 11. EXECUTIVE COMPENSATION
Information with respect to the compensation of executives and directors of the Company is hereby incorporated by reference to our definitive proxy statement that will be filed with the SEC within 120 days of the close of our fiscal year.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
A description of the security ownership of certain beneficial owners and management and equity compensation plan information is hereby incorporated by reference to our definitive proxy statement that will be filed with the SEC within 120 days of the close of our fiscal year.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
A description of applicable information with respect to certain relationships and related transactions and director independence matters, is hereby incorporated by reference to our definitive proxy statement that will be filed with the SEC within 120 days of the close of our fiscal year.
Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Information with respect to fees paid to, and services rendered by, our independent registered public accounting firm, and our policies and procedures for pre-approving those services, is hereby incorporated by reference to our definitive proxy statement that will be filed with the SEC within 120 days of the close of our fiscal year.
Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(1)Financial Statements – See Item 8. Financial Statements and Supplementary Data.
(2)Financial Statement Schedules – The following additional financial data should be read in conjunction with the consolidated financial statements in Item 8. Financial Statements and Supplementary Data. Schedules not included with this additional financial data have been omitted because they are not applicable, or the required information is shown in the consolidated financial statements or the notes thereto.
2024, 2023 and 2022
| (97) | International Paper Company Clawback Policy. | ||||
| (99) | Report of Independent Auditors for Ilim S.A and subsidiaries as of and for the years ended December 31, 2022 and 2021. * | ||||
| (101.INS) | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the inline XBRL document. * | ||||
| (101.SCH) | XBRL Taxonomy Extension Schema * | ||||
| (101.CAL) | XBRL Taxonomy Extension Calculation Linkbase * | ||||
| (101.DEF) | XBRL Taxonomy Extension Definition Linkbase * | ||||
| (101.LAB) | XBRL Taxonomy Extension Label Linkbase * | ||||
| (101.PRE) | XBRL Extension Presentation Linkbase * | ||||
| (104) | Cover Page Interactive Data File (formatted as Inline XBRL, and contained in Exhibit 101. * |
+ Management contract or compensatory plan or arrangement.
** Filed herewith*
*** Furnished herewith*
† Confidential treatment has been granted for certain information pursuant to Rule 24b-2 under the Securities Act of 1934, as amended.
Item 16. FORM 10-K SUMMARY.
None.
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
INTERNATIONAL PAPER COMPANY
| By: | /S/ JOSEPH R. SAAB | February 21, 2025 | |||||||||
| Joseph R. Saab | |||||||||||
| Senior Vice President, General Counsel and Corporate Secretary |
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Timothy S. Nicholls, Joseph R. Saab and Amanda M. Jenkins as his or her true and lawful attorney-in-fact and agent, acting alone, with full power of substitution and resubstitution for him or her and in his or her name, place and stead, in any and all capacities, to sign any or all amendments to this annual report on Form 10-K, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact full power and authority to do and perform each and every act and thing requisite or necessary to be done, hereby ratifying and confirming all that said attorney-in-fact and agent, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:
| Signature | Title | Date | ||||||||||||
| /S/ ANDREW K. SILVERNAIL | Chairman of the Board & Chief Executive Officer and Director | February 21, 2025 | ||||||||||||
| Andrew K. Silvernail | ||||||||||||||
| /S/ JAMIE A. BEGGS | Director | February 21, 2025 | ||||||||||||
| Jamie A. Beggs | ||||||||||||||
| /S/ CHRISTOPHER M. CONNOR | Director | February 21, 2025 | ||||||||||||
| Christopher M. Connor | ||||||||||||||
| /S/ AHMET C. DORDUNCU | Director | February 21, 2025 | ||||||||||||
| Ahmet C. Dorduncu | ||||||||||||||
| /S/ ANDERS GUSTAFSSON | Director | February 21, 2025 | ||||||||||||
| Anders Gustafsson | ||||||||||||||
| /S/ JACQUELINE C. HINMAN | Director | February 21, 2025 | ||||||||||||
| Jacqueline C. Hinman |
| /s/ CLINTON A. LEWIS, JR. | Director | February 21, 2025 | ||||||||||||
| Clinton A. Lewis, Jr. | ||||||||||||||
| /S/ DAVID A. ROBBIE | Director | February 21, 2025 | ||||||||||||
| David A. Robbie | ||||||||||||||
| /s/ KATHRYN D. SULLIVAN | Director | February 21, 2025 | ||||||||||||
| Kathryn D. Sullivan | ||||||||||||||
| /s/ SCOTT A. TOZIER | Director | February 21, 2025 | ||||||||||||
| Scott A. Tozier | ||||||||||||||
| /s/ ANTON V. VINCENT | Director | February 21, 2025 | ||||||||||||
| Anton V. Vincent | ||||||||||||||
| /S/ TIMOTHY S. NICHOLLS | Senior Vice President and Chief Financial Officer | February 21, 2025 | ||||||||||||
| Timothy S. Nicholls | ||||||||||||||
| /S/ HOLLY G. GOUGHNOUR | Vice President – Finance and Corporate Controller | February 21, 2025 | ||||||||||||
| Holly G. Goughnour |
2024 LISTING OF FACILITIES
(all facilities are owned except noted otherwise)
| INDUSTRIAL PACKAGING | Modesto, California | Fridley, Minnesota | ||||||||||||
| Ontario, California | Minneapolis, Minnesota leased | |||||||||||||
| Containerboard | Salinas, California | Shakopee, Minnesota | ||||||||||||
| U.S.: | Sanger, California | White Bear Lake, Minnesota | ||||||||||||
| Pine Hill, Alabama | Santa Fe Springs, California (2 locations) | Houston, Mississippi | ||||||||||||
| Prattville, Alabama | Tracy, California | Jackson, Mississippi | ||||||||||||
| Selma, Alabama (Riverdale Mill) | Golden, Colorado | Magnolia, Mississippi leased | ||||||||||||
| Cantonment, Florida (Pensacola Mill) | Wheat Ridge, Colorado | Olive Branch, Mississippi | ||||||||||||
| Rome, Georgia | Putnam, Connecticut | Fenton, Missouri | ||||||||||||
| Savannah, Georgia | Orlando, Florida | Kansas City, Missouri (2 locations) (2) | ||||||||||||
| Cayuga, Indiana | Plant City, Florida | Maryland Heights, Missouri | ||||||||||||
| Cedar Rapids, Iowa | Tampa, Florida leased | North Kansas City, Missouri leased | ||||||||||||
| Henderson, Kentucky | Columbus, Georgia | St. Joseph, Missouri | ||||||||||||
| Maysville, Kentucky | Forest Park, Georgia | St. Louis, Missouri | ||||||||||||
| Bogalusa, Louisiana | Griffin, Georgia | Omaha, Nebraska | ||||||||||||
| Campti, Louisiana | Lithonia, Georgia | McCarran, Nevada | ||||||||||||
| Mansfield, Louisiana | Savannah, Georgia | Barrington, New Jersey | ||||||||||||
| Vicksburg, Mississippi | Tucker, Georgia | Bellmawr, New Jersey | ||||||||||||
| Valliant, Oklahoma | Aurora, Illinois (3 locations) 1 leased | Milltown, New Jersey leased | ||||||||||||
| Springfield, Oregon | Bedford Park, Illinois | Spotswood, New Jersey | ||||||||||||
| Belleville, Illinois | Thorofare, New Jersey | |||||||||||||
| Carol Stream, Illinois | Binghamton, New York | |||||||||||||
| International: | Des Plaines, Illinois | Buffalo, New York | ||||||||||||
| Veracruz, Mexico | Lincoln, Illinois | Rochester, New York | ||||||||||||
| Kenitra, Morocco | Montgomery, Illinois | Scotia, New York | ||||||||||||
| Madrid, Spain | Northlake, Illinois | Utica, New York | ||||||||||||
| Rockford, Illinois (1) | Charlotte, North Carolina (2 locations) 1 leased | |||||||||||||
| Corrugated Packaging | Butler, Indiana | Lumberton, North Carolina | ||||||||||||
| U.S.: | Crawfordsville, Indiana | Manson, North Carolina | ||||||||||||
| Bay Minette, Alabama | Fort Wayne, Indiana | Newton, North Carolina | ||||||||||||
| Decatur, Alabama | Indianapolis, Indiana (3 locations) | Statesville, North Carolina (1) | ||||||||||||
| Dothan, Alabama leased | Saint Anthony, Indiana | Byesville, Ohio | ||||||||||||
| Huntsville, Alabama | Tipton, Indiana | Delaware, Ohio | ||||||||||||
| Conway, Arkansas | Cedar Rapids, Iowa | Eaton, Ohio | ||||||||||||
| Fort Smith, Arkansas (2 locations) | Waterloo, Iowa | Madison, Ohio | ||||||||||||
| Russellville, Arkansas (2 locations) | Garden City, Kansas | Marion, Ohio | ||||||||||||
| Tolleson, Arizona | Bowling Green, Kentucky | Marysville, Ohio leased | ||||||||||||
| Yuma, Arizona | Lexington, Kentucky | Middletown, Ohio | ||||||||||||
| Anaheim, California | Louisville, Kentucky | Mt. Vernon, Ohio | ||||||||||||
| Buena Park, California leased | Walton, Kentucky | Newark, Ohio | ||||||||||||
| Camarillo, California | Bogalusa, Louisiana | Streetsboro, Ohio | ||||||||||||
| Carson, California | Lafayette, Louisiana | Wooster, Ohio | ||||||||||||
| Cerritos, California leased | Shreveport, Louisiana | Oklahoma City, Oklahoma | ||||||||||||
| Compton, California | Springhill, Louisiana | Beaverton, Oregon | ||||||||||||
| Elk Grove, California | Auburn, Maine | Hillsboro, Oregon | ||||||||||||
| Exeter, California | Three Rivers, Michigan | Portland, Oregon | ||||||||||||
| Gilroy, California (2 locations) | Arden Hills, Minnesota | Salem, Oregon leased | ||||||||||||
| Los Angeles, California | Austin, Minnesota | Atglen, Pennsylvania |
A-1
| Biglerville, Pennsylvania (2 locations) | Puebla, Mexico leased | Bags | ||||||||||||
| Eighty-four, Pennsylvania | Reynosa, Mexico | U.S.: | ||||||||||||
| Hazleton, Pennsylvania | San Jose Iturbide, Mexico | Buena Park, California | ||||||||||||
| Kennett Square, Pennsylvania | Santa Catarina, Mexico | Beaverton, Oregon | ||||||||||||
| Lancaster, Pennsylvania | Silao, Mexico | Grand Prairie, Texas | ||||||||||||
| Mount Carmel, Pennsylvania | Toluca, Mexico | |||||||||||||
| Georgetown, South Carolina | Zapopan, Mexico | GLOBAL CELLULOSE FIBERS | ||||||||||||
| Laurens, South Carolina | Agadir, Morocco | |||||||||||||
| Lexington, South Carolina | Casablanca, Morocco | Pulp | ||||||||||||
| Ashland City, Tennessee leased | Tangier, Morocco | U.S.: | ||||||||||||
| Cleveland, Tennessee (1) | Ovar, Portugal | Flint River, Georgia | ||||||||||||
| Elizabethton, Tennessee leased | Barcelona, Spain | Port Wentworth, Georgia | ||||||||||||
| Morristown, Tennessee | Bilbao, Spain | Columbus, Mississippi (2 locations) | ||||||||||||
| Murfreesboro, Tennessee | Gandia, Spain | New Bern, North Carolina | ||||||||||||
| Amarillo, Texas | Grinon, Spain | Riegelwood, North Carolina | ||||||||||||
| Carrollton, Texas (2 locations) | Las Palmas, Spain | Georgetown, South Carolina (1) | ||||||||||||
| Edinburg, Texas | Madrid, Spain | Franklin, Virginia | ||||||||||||
| El Paso, Texas | Montblanc, Spain | |||||||||||||
| Ft. Worth, Texas leased | Tavernes de la Valldigna, Spain | |||||||||||||
| Grand Prairie, Texas | Tenerife, Spain | International: | ||||||||||||
| Hidalgo, Texas | Valls, Spain | Grande Prairie, Alberta, Canada | ||||||||||||
| McAllen, Texas | Gdansk, Poland | |||||||||||||
| San Antonio, Texas (2 locations) (3) | Recycling | |||||||||||||
| Sealy, Texas | U.S.: | DISTRIBUTION | ||||||||||||
| Waxahachie, Texas | Phoenix, Arizona | |||||||||||||
| Lynchburg, Virginia | Fremont, California | International: | ||||||||||||
| Petersburg, Virginia | Norwalk, California | Guangzhou, China leased | ||||||||||||
| Richmond, Virginia | West Sacramento, California | Hong Kong, China leased | ||||||||||||
| Moses Lake, Washington | Itasca, Illinois | Shanghai, China leased | ||||||||||||
| Olympia, Washington | Des Moines, Iowa | Japan leased | ||||||||||||
| Yakima, Washington | Wichita, Kansas | Korea leased | ||||||||||||
| Fond du Lac, Wisconsin | Roseville, Minnesota | Singapore leased | ||||||||||||
| Manitowoc, Wisconsin | Omaha, Nebraska | |||||||||||||
| Charlotte, North Carolina | ||||||||||||||
| International: | Beaverton, Oregon | |||||||||||||
| Rancagua, Chile | Springfield, Oregon leased | 1) Closed December 2024 | ||||||||||||
| Cabourg, France | Carrollton, Texas | 2) Closed one location December 2024 | ||||||||||||
| Chalon, France | Salt Lake City, Utah | 3) Closed one location November 2024 | ||||||||||||
| Espaly, France | Richmond, Virginia | 4) Closed March 2024 | ||||||||||||
| Mortagne, France | Kent, Washington | |||||||||||||
| Saint Amand, France | ||||||||||||||
| Bellusco, Italy | International: | |||||||||||||
| Catania, Italy | Monterrey, Mexico leased | |||||||||||||
| Pomezia, Italy | Xalapa, Veracruz, Mexico leased | |||||||||||||
| San Felice, Italy | ||||||||||||||
| Apodaco, Mexico leased | ||||||||||||||
| Ixtaczoquitlan, Mexico (4) | ||||||||||||||
| Juarez, Mexico leased (2 locations) | ||||||||||||||
| Los Mochis, Mexico | ||||||||||||||
A-2
2024 CAPACITY INFORMATION
| (in thousands of short tons except as noted) | U.S. | EMEA | Americas, other than U.S. | Total | |||||||||||||||||||
| Industrial Packaging | |||||||||||||||||||||||
| Containerboard (a) | 12,984 | 560 | 27 | 13,571 | |||||||||||||||||||
| Global Cellulose Fibers | |||||||||||||||||||||||
| Dried Pulp (in thousands of metric tons) | 2,341 | — | 384 | 2,725 |
(a) In addition to Containerboard, this also includes saturated kraft, kraft bag and gypsum. 2024 U.S capacity includes Campti, Louisiana mill, which will be permanently closed in 2025.
A-3