Item 1. [FINANCIAL STATEMENTS](#i82dc34bdbaed41c593264f398e382efd16)

INTERNATIONAL PAPER COMPANY

Condensed Consolidated Statement of Operations

(Unaudited)

(In millions, except per share amounts)

			Three Months Ended March 31,
			2025						2024
Net Sales			$	5,901					$	4,619
Costs and Expenses
Cost of products sold			4,259						3,424
Selling and administrative expenses			530						358
Depreciation and amortization			571						278
Distribution expenses			483						391
Taxes other than payroll and income taxes			93						41
Restructuring charges, net			83						3
Net (gains) losses on sales of fixed assets			(67)						5
Interest expense, net			81						46
Non-operating pension expense (income)			3						(12)
Earnings (Loss) Before Income Taxes and Equity Earnings (Loss)			(135)						85
Income tax provision (benefit)			(31)						27
Equity earnings (loss), net of taxes			(1)						(2)
Net Earnings (Loss)			$	(105)					$	56
Basic Earnings (Loss) Per Share
Net earnings (loss)			$	(0.24)					$	0.16
Diluted Earnings (Loss) Per Share
Net earnings (loss)			$	(0.24)					$	0.16
Average Shares of Common Stock Outstanding – assuming dilution			437.6						348.5

The accompanying notes are an integral part of these condensed financial statements.

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INTERNATIONAL PAPER COMPANY

Condensed Consolidated Statement of Comprehensive Income

(Unaudited)

(In millions)

			Three Months Ended March 31,
			2025						2024
Net Earnings (Loss)			$	(105)					$	56
Other Comprehensive Income (Loss), Net of Tax:
Amortization of pension and post-retirement prior service costs and net loss:
U.S. plans			16						17
Pension and postretirement adjustments:
U.S. plans			8						—
Change in cumulative foreign currency translation adjustment			410						(10)
Net gains/losses on cash flow hedging derivatives:
Net gains/(losses) on cash flow hedging derivatives			(52)						—
Reclassification adjustment for (gains) losses included in net earnings (loss)			(1)						—
Total Other Comprehensive Income (Loss), Net of Tax			381						7
Comprehensive Income (Loss)			276						63

The accompanying notes are an integral part of these condensed financial statements.

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INTERNATIONAL PAPER COMPANY

Condensed Consolidated Balance Sheet

(In millions)

			March 31, 2025						December 31, 2024
			(unaudited)
Assets
Current Assets
Cash and temporary investments			$	1,156					$	1,170
Accounts and notes receivable, net			4,565						2,966
Contract assets			443						396
Inventories			2,590						1,784
Assets held for sale			174						—
Other current assets			360						108
Total Current Assets			9,288						6,424
Plants, Properties and Equipment, net			16,026						9,658
Goodwill			7,242						3,038
Intangibles, net			4,585						145
Long-Term Financial Assets of Variable Interest Entities (Note 14)			2,335						2,331
Right of Use Assets			695						433
Overfunded Pension Plan Assets			199						92
Deferred Charges and Other Assets			798						679
Total Assets			$	41,168					$	22,800
Liabilities and Equity
Current Liabilities
Notes payable and current maturities of long-term debt			$	444					$	193
Accounts payable			4,224						2,316
Accrued payroll and benefits			596						749
Other current liabilities			1,724						1,000
Total Current Liabilities			6,988						4,258
Long-Term Debt			9,175						5,368
Deferred Income Taxes			2,532						1,072
Long-Term Nonrecourse Financial Liabilities of Variable Interest Entities (Note 14)			2,122						2,120
Long-Term Lease Obligations			477						292
Underfunded Pension Benefit Obligation			310						233
Postretirement and Postemployment Benefit Obligation			130						133
Other Liabilities			1,342						1,151
Equity
Common stock, $1 par value, 2025 – 627.0 shares and 2024 – 448.9 shares			627						449
Paid-in capital			14,350						4,732
Retained earnings			9,038						9,393
Accumulated other comprehensive loss			(1,341)						(1,722)
			22,674						12,852
Less: Common stock held in treasury, at cost, 2025 – 99.2 shares and 2024 – 101.5 shares			4,582						4,679
Total Equity			18,092						8,173
Total Liabilities and Equity			$	41,168					$	22,800

The accompanying notes are an integral part of these condensed financial statements.

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INTERNATIONAL PAPER COMPANY

Condensed Consolidated Statement of Cash Flows

(Unaudited)

(In millions)

			Three Months Ended March 31,
			2025						2024
Operating Activities
Net earnings (loss)			$	(105)					$	56
Depreciation and amortization			571						278
Deferred income tax provision (benefit), net			(74)						(11)
Restructuring charges, net			83						3
Net (gains) losses on sales of fixed assets			(67)						5
Periodic pension (income) expense, net			13						(2)
Other, net			(87)						34
Changes in operating assets and liabilities
Accounts and notes receivable			(178)						7
Contract assets			(47)						2
Inventories			22						76
Accounts payable and other liabilities			(370)						(44)
Interest payable			23						17
Other			(72)						(26)
Cash Provided By (Used For) Operations			(288)						395
Investment Activities
Capital expenditures			(330)						(251)
Acquisitions, net of cash acquired			415						—
Proceeds from sale of fixed assets			83						1
Proceeds from insurance recoveries			28						—
Other			41						3
Cash Provided By (Used For) Investment Activities			237						(247)
Financing Activities
Issuance of debt			239						—
Reduction of debt			(6)						(3)
Change in book overdrafts			94						(5)
Repurchases of common stock and payments of restricted stock tax withholding			(62)						(22)
Dividends paid			(244)						(161)
Cash Provided By (Used For) Financing Activities			21						(191)
Cash Included in Assets Held for Sale			(2)						—
Effect of Exchange Rate Changes on Cash and Temporary Investments			18						—
Change in Cash and Temporary Investments			(14)						(43)
Cash and Temporary Investments
Beginning of period			1,170						1,113
End of period			$	1,156					$	1,070

The accompanying notes are an integral part of these condensed financial statements.

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INTERNATIONAL PAPER COMPANY

Condensed Notes to Consolidated Financial Statements

(Unaudited)

NOTE 1 - BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States and in accordance with the instructions to Form 10-Q and, in the opinion of management, include all adjustments that are necessary for the fair presentation of International Paper Company’s ("International Paper's," "the Company’s," "IP's" or "our") financial position, results of operations, and cash flows for the interim periods presented. Except as disclosed herein, such adjustments are of a normal, recurring nature. Results for the first three months of the year may not necessarily be indicative of full year results. You should read these unaudited condensed financial statements in conjunction with the audited financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (the "Annual Report"), which have previously been filed with the U.S. Securities and Exchange Commission ("SEC").

As a result of the completed acquisition of DS Smith Plc, subsequently re-registered as DS Smith Limited ("DS Smith") on January 31, 2025, the Chief Operating Decision Maker ("CODM") now reviews and manages the financial results and operations of the following segments on the basis of the new organizational structure, Packaging Solutions North America, Packaging Solutions Europe, Middle East and Africa ("EMEA") and Global Cellulose Fibers. The Packaging Solutions EMEA segment includes the Company's legacy EMEA Industrial Packaging business and the newly acquired EMEA DS Smith business. As such, amounts related to the Company's legacy EMEA Industrial Packaging business have been recast out of the Industrial Packaging segment into the new Packaging Solutions EMEA segment for all prior periods. The newly acquired North America DS Smith business has been included in the Packaging Solutions North America segment. Amounts related to the Company's legacy North America Industrial Packaging business have been reported in the Packaging Solutions North America segment for all prior periods.

Additionally, certain amounts from prior year in the condensed consolidated balance sheet have been reclassified to conform with the current year financial statement presentation.

These unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States that require the use of management’s estimates. Actual results could differ from management’s estimates.

NOTE 2 - RECENT ACCOUNTING DEVELOPMENTS

Recently Adopted Accounting Pronouncements

Income Taxes

In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures." This guidance requires companies to enhance income tax disclosures, particularly around rate reconciliations and income taxes paid information. This guidance is effective for annual reporting periods beginning after December 15, 2024. Early adoption of these amendments is permitted and amendments should be applied prospectively. The Company adopted this guidance as of January 1, 2025 and will update disclosures within the Company's 2025 annual filing.

Recently Issued Accounting Pronouncements Not Yet Adopted

Disaggregation of Income Statement Expenses

In November 2024, the FASB issued ASU 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40)." This guidance requires companies to provide more detailed information of certain income statement expenses within the footnotes to the financial statements. This guidance is effective for annual reporting periods beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the provisions of this guidance.

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NOTE 3 - REVENUE RECOGNITION

Generally, the Company recognizes revenue on a point-in-time basis when the customer takes title to the goods and assumes the risks and rewards for the goods. For customized goods where the Company has a legally enforceable right to payment for the goods, the Company recognizes revenue over time which, generally, is as the goods are produced.

Disaggregated Revenue

						Three Months Ended March 31, 2025
In millions						Packaging Solutions North America						Packaging Solutions EMEA						Global Cellulose Fibers						Corporate & Intersegment						Total
Primary Geographical Markets (a)
United States						$	3,498					$	—					$	619					$	6					$	4,123
Europe, Middle East and Africa						—						1,550						23						—						1,573
Pacific Rim and Asia						11						—						1						—						12
Americas, other than U.S.						193						—						—						—						193
Total						$	3,702					$	1,550					$	643					$	6					$	5,901

(a) Net sales are attributed to countries based on the location of the seller.

						Three Months Ended March 31, 2024
In millions						Packaging Solutions North America						Packaging Solutions EMEA						Global Cellulose Fibers						Corporate & Intersegment						Total
Primary Geographical Markets (a)
United States						$	3,265					$	—					$	650					$	81					$	3,996
Europe, Middle East and Africa						—						348						20						—						368
Pacific Rim and Asia						14						—						34						—						48
Americas, other than U.S.						207						—						—						—						207
Total						$	3,486					$	348					$	704					$	81					$	4,619

(a) Net sales are attributed to countries based on the location of the seller.

Revenue Contract Balances

A contract asset is created when the Company recognizes revenue on its customized products prior to having an unconditional right to payment from the customer, which generally does not occur until title and risk of loss passes to the customer.

A contract liability is created when customers prepay for goods prior to the Company transferring those goods to the customer. The contract liability is reduced once control of the goods is transferred to the customer. The majority of our customer prepayments are received during the fourth quarter each year for goods that will be transferred to customers over the following twelve months. Contract liabilities of $33 million and $30 million are included in Other current liabilities in the accompanying condensed consolidated balance sheet as of March 31, 2025 and December 31, 2024, respectively. The Company also recorded a contract liability of $115 million related to a previous acquisition. The balance of this contract liability was $82 million and $84 million at March 31, 2025 and December 31, 2024, respectively, and is recorded in Other current liabilities and Other Liabilities in the accompanying condensed consolidated balance sheet.

The difference between the opening and closing balances of the Company's contract assets and contract liabilities primarily results from the difference between the price and quantity at comparable points in time for goods for which we have an unconditional right to payment or receive prepayment from the customer, respectively.

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NOTE 4 - EQUITY

A summary of the changes in equity for the three months ended March 31, 2025 and 2024 is provided below:

			Three Months Ended March 31, 2025
In millions, except per share amounts			Common Stock Issued						Paid-in Capital						Retained Earnings			Accumulated Other Comprehensive Income (Loss)						Common Stock Held In Treasury, At Cost						Total Equity
Balance, January 1			$	449					$	4,732					$	9,393		$	(1,722)					$	4,679					$	8,173
Issuance of stock for various plans, net			—						(113)						—			—						(159)						46
Issuance of stock for DS Smith acquisition			178						9,731						—			—						—						9,909
Repurchase of stock			—						—						—			—						62						(62)
Common stock dividends ($0.4625 per share)			—						—						(250)			—						—						(250)
Comprehensive income (loss)			—						—						(105)			381						—						276
Ending Balance, March 31			$	627					$	14,350					$	9,038		$	(1,341)					$	4,582					$	18,092

			Three Months Ended March 31, 2024
In millions, except per share amounts			Common Stock Issued						Paid-in Capital						Retained Earnings			Accumulated Other Comprehensive Income (Loss)						Common Stock Held In Treasury, At Cost						Total Equity
Balance, January 1			$	449					$	4,730					$	9,491		$	(1,565)					$	4,750					$	8,355
Issuance of stock for various plans, net			—						(67)						—			—						(89)						22
Repurchase of stock			—						—						—			—						22						(22)
Common stock dividends ($0.4625 per share)			—						—						(161)			—						—						(161)
Comprehensive income (loss)			—						—						56			7						—						63
Ending Balance, March 31			$	449					$	4,663					$	9,386		$	(1,558)					$	4,683					$	8,257

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NOTE 5 - OTHER COMPREHENSIVE INCOME

The following table presents changes in Accumulated Other Comprehensive Income (Loss) ("AOCI"), net of tax, for the three months ended March 31, 2025 and 2024:

			Three Months Ended March 31,
In millions			2025						2024
Defined Benefit Pension and Postretirement Adjustments
Balance at beginning of period			$	(1,312)					$	(1,276)
Amounts reclassified from accumulated other comprehensive income			24						17
Balance at end of period			(1,288)						(1,259)
Change in Cumulative Foreign Currency Translation Adjustments
Balance at beginning of period			(402)						(281)
Other comprehensive income (loss) before reclassifications			410						(10)
Balance at end of period			8						(291)
Net Gains and Losses on Cash Flow Hedging Derivatives
Balance at beginning of period			(8)						(8)
Other comprehensive income (loss) before reclassifications			(52)						—
Amounts reclassified from accumulated other comprehensive income			(1)						—
Balance at end of period			(61)						(8)
Total Accumulated Other Comprehensive Income (Loss) at End of Period			$	(1,341)					$	(1,558)

The following table presents details of the reclassifications out of AOCI for the three months ended March 31, 2025 and 2024:

In millions:			Amount Reclassified from Accumulated Other Comprehensive Income												Location of Amount Reclassified from AOCI
Three Months Ended March 31,
2025						2024
Defined benefit pension and postretirement items:
Prior-service costs			$	(4)					$	(3)		(a)			Non-operating pension expense (income)
Actuarial gains (losses)			(18)						(19)			(a)			Non-operating pension expense (income)
Settlement charge			(8)						—			(a)			Non-operating pension expense (income)
Total pre-tax amount			(30)						(22)
Tax (expense) benefit			6						5
Net of tax			(24)						(17)
Net gains and losses on cash flow hedging derivatives:
Commodity contracts			1						—			(b)			Cost of products sold
Total pre-tax amount			1						—
Tax (expense)/benefit			—						—
Net of tax			1						—
Total reclassifications for the period			$	(23)					$	(17)

(a)These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see Note 17 for additional details).

(b)This accumulated other comprehensive income component is included in our derivatives and hedging activities (see Note 16 for additional details).

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NOTE 6 - EARNINGS PER SHARE

Basic earnings per share is computed by dividing earnings by the weighted average number of common shares outstanding. Diluted earnings per share is computed assuming that all potentially dilutive securities were converted into common shares. There are no adjustments required to be made to net income for purposes of computing basic and diluted earnings per share. A reconciliation of the amounts included in the computation of basic earnings (loss) per share and diluted earnings (loss) per share is as follows:

			Three Months Ended March 31,
In millions, except per share amounts			2025						2024
Net earnings (loss)			$	(105)					$	56
Weighted average common shares outstanding			437.6						346.7
Effect of dilutive securities (a)
Restricted performance share plan			—						1.8
Weighted average common shares outstanding – assuming dilution			437.6						348.5
Basic earnings (loss) per share			$	(0.24)					$	0.16
Diluted earnings (loss) per share			$	(0.24)					$	0.16

(a) 6.1 million of securities were anti-dilutive for the three months ended March 31, 2025 and were not included in the table.

NOTE 7 - RESTRUCTURING CHARGES, NET

During the three months ended March 31, 2025, the Company recorded restructuring charges of $78 million for costs associated with the permanent closure of our Red River containerboard mill in Campti, Louisiana. Included in the $78 million of restructuring charges was $17 million of severance charges recorded in Accrued payroll and benefits in the accompanying condensed consolidated balance sheet, $22 million of inventory charges recorded in Inventories in the accompanying condensed consolidated balance sheet and $39 million of other costs recorded in Other current liabilities and Other Liabilities in the accompanying condensed consolidated balance sheet. The majority of the severance charges will be paid in 2025.

Additionally, during the three months ended March 31, 2025, the Company recorded restructuring charges of $5 million in Accrued payroll and benefits in the accompanying condensed balance sheet for other costs related to our 80/20 strategic approach.

NOTE 8 - ACQUISITIONS

On January 31, 2025, the Company completed its acquisition of the entire issued and to be issued share capital of DS Smith. Upon closing, IP issued 0.1285 shares for each DS Smith share, resulting in the issuance of 178,126,631 new shares of IP common stock ("New Company Common Stock"). As a result of the share issuance, the holders of the New Company Common Stock own approximately 34.1% of the Company's outstanding share capital. Based on the issuance of 178,126,631 new shares and the closing price of $55.63 on the close of January 31, 2025, the total purchase consideration for the completed acquisition was approximately $9.9 billion. Acquisition-related costs were $87 million and $5 million for the three months ended March 31, 2025 and March 31, 2024, respectively, and were recorded in Selling and administrative expenses and Taxes other than payroll and income taxes in the accompanying condensed consolidated statement of operations. On February 4, 2025, the Company began trading the New Company Common Stock and continues to be listed on the New York Stock Exchange under the trading symbol "IP" and via a secondary listing on the London Stock Exchange under the trading symbol "IPC." The headquarters of the combined company is based in Memphis, Tennessee, and the EMEA headquarters has been established at DS Smith's existing main office in London.

The Company is accounting for the acquisition under ASC 805, "Business Combinations" and the results of operations have been included in International Paper's financial statements beginning with the date of acquisition.

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The following table summarizes the provisional fair value assigned to assets and liabilities acquired as of January 31, 2025:

In millions
Cash and temporary investments						$	448
Accounts and notes receivable, net						1,386
Inventories						852
Other current assets						147
Plants, properties and equipment						6,429
Intangibles						4,327
Goodwill						4,048
Overfunded pension plan assets						79
Right of use assets						257
Deferred charges and other assets						56
Total assets acquired						18,029
Notes payable and current maturities of long-term debt						60
Accounts payable						1,654
Accrued payroll and benefits						240
Other current liabilities						608
Long-term debt						3,634
Deferred income taxes						1,520
Underfunded pension benefit obligation						78
Long-term lease obligations						177
Other liabilities						149
Total liabilities assumed						8,120
Net assets acquired						$	9,909

The purchase price and related allocation are preliminary and could be revised as a result of adjustments made to the purchase price, additional information obtained regarding assets acquired and liabilities assumed, review of contracts and revisions of provisional estimates of fair values, including, but not limited to, the completion of independent appraisals and valuations related to inventory, property, plant and equipment, acquired intangible assets, leases, taxes, contract assets and derivatives. Adjustments to provisional amounts will be finalized as new information becomes available, but within the adjustment period of up to one year from the acquisition date. Goodwill is not deductible for local income tax purposes and is primarily related to the value of new customers through expansion opportunities not reflected in the fair value of the existing customers relationships and the value of the intellectual property beyond selected life for trade names.

Since the date of acquisition, Net sales of $1.3 billion and Net earnings (loss) of $(107) million have been included in the Company's condensed consolidated statement of operations for the three months ended March 31, 2025.

The identifiable intangible assets acquired in connection with the acquisition of DS Smith included the following:

In millions			Estimated Fair Value			Average Useful Life
Customer relationships and lists			$	3,843		18 years
Tradenames, patents and trademarks, and developed technology			379			15 years
Software (a)			90			3 - 5 years
Other			15			Indefinite lived
Total			$	4,327

(a) Of this balance, $57 million has been placed in service and $33 million is in development.

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Below are the consolidated results on an unaudited pro forma basis assuming the acquisition of DS Smith had closed on January 1, 2024:

			Three Months Ended March 31,
In millions			2025 (Unaudited)			2024 (Unaudited)
Net Sales			$	6,636		$	6,726
Net Earnings (Loss)			(107)			11

The unaudited pro forma information for the three months ended March 31, 2025 includes adjustments for additional amortization expense on identifiable intangible assets of $9 million and adjustments for additional depreciation expense on identifiable fixed assets of $6 million and eliminates the write-off of the estimated fair value of inventory of $70 million and the non-recurring integration costs associated with the acquisition of $65 million.

The unaudited pro forma information for the three months ended March 31, 2024 includes adjustments for additional amortization expense on identifiable intangible assets of $27 million, additional depreciation expense on identifiable fixed assets of $19 million, incremental expense of $70 million associated with the write-off of the estimated fair value of inventory and non-recurring integration costs associated with the acquisition of $65 million.

The unaudited pro forma consolidated financial information was prepared for comparative purposes only and includes certain adjustments, as noted above. The adjustments are estimates based on currently available information and actual amounts may have differed materially from these estimates. They do not reflect the effect of costs or synergies that would have been expected to result from the integration of the acquisition. The pro forma information does not purport to represent International Paper's actual results of operation as if the transaction described above would have occurred as of January 1, 2024, nor is it necessarily an indicator of future results.

In connection with the DS Smith acquisition, the European Commission issued its Phase I clearance of the business combination between International Paper and DS Smith on January 31, 2025, with the condition that International Paper commit to divest five European plants in Mortagne, Saint-Amand, and Cabourg (France), Ovar (Portugal) and Bilbao (Spain). The Company agreed to divest these locations and all assets and liabilities at March 31, 2025 related to these locations have been recorded as held for sale in the accompanying condensed consolidated balance sheet. On April 14, 2025, the Company announced it had entered into exclusive negotiations with Palm Group of Germany after receiving an irrevocable offer for the purchase of the European plants. The closing is expected by the end of the second quarter of 2025.

NOTE 9 - SUPPLEMENTAL FINANCIAL STATEMENT INFORMATION

Temporary Investments

Temporary investments with an original maturity of three months or less and money market funds with greater than three month maturities but with the right to redeem without notices are treated as cash equivalents and stated at cost. Temporary investments totaled $545 million and $990 million at March 31, 2025 and December 31, 2024, respectively.

Accounts and Notes Receivable, Net

In millions			March 31, 2025						December 31, 2024
Trade (less allowances of $66 and $30, respectively)			$	3,959					$	2,703
Other			606						263
Total			$	4,565					$	2,966

As a result of the DS Smith acquisition, IP has a trade receivable factoring program that allows the Company to sell trade receivables without recourse.

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Inventories

In millions			March 31, 2025						December 31, 2024
Raw materials			$	481					$	188
Finished pulp, paper and packaging			1,250						934
Operating supplies			753						623
Other			106						39
Total			$	2,590					$	1,784

The last-in, first-out inventory method is used to value most of International Paper's U.S. inventories. Approximately 58% of total raw materials and finished products inventories were valued using this method. The last-in, first-out inventory reserve was $341 million and $336 million at March 31, 2025 and December 31, 2024, respectively.

Plants, Properties and Equipment

Accumulated depreciation was $19.9 billion and $19.6 billion at March 31, 2025 and December 31, 2024, respectively. Depreciation expense was $519 million and $268 million for the three months ended March 31, 2025 and 2024, respectively. Depreciation expense for the three months ended March 31, 2025 includes $197 million of accelerated depreciation related to mill strategic actions and other 80/20 strategic actions.

Non-cash additions to plants, properties and equipment included within accounts payable were $120 million and $110 million at March 31, 2025 and December 31, 2024, respectively.

Accounts Payable

Under supplier finance programs, International Paper agrees to pay the relevant banks the stated amount of confirmed invoices from its designated suppliers on the original maturity dates of the invoices. International Paper or the relevant banks may terminate the agreement on notice periods from 28 to 90 days. The supplier invoices that have been confirmed as valid under the program require payment in full on the due date with no terms exceeding 180 days. The accounts payable balance included $369 million and $115 million of supplier finance program liabilities as of March 31, 2025 and December 31, 2024, respectively.

Interest

Interest payments made during the three months ended March 31, 2025 and 2024 were $95 million and $94 million, respectively.

Amounts related to interest were as follows:

			Three Months Ended March 31,
In millions			2025						2024
Interest expense			$	133					$	109
Interest income			52						63
Capitalized interest costs			5						2

Asset Retirement Obligations

The Company recorded liabilities in Other Liabilities in the accompanying condensed consolidated balance sheet of $152 million and $128 million related to asset retirement obligations at March 31, 2025 and December 31, 2024, respectively.

NOTE 10 - LEASES

International Paper leases various real estate, including certain operating facilities, warehouses, office space and land. The Company also leases material handling equipment, vehicles, and certain other equipment. The Company's leases have a remaining lease term of up to 28 years. Total lease costs were $106 million and $79 million for the three months ended March 31, 2025 and 2024, respectively.

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Supplemental Balance Sheet Information Related to Leases

In millions						Classification						March 31, 2025						December 31, 2024
Assets
Operating lease assets						Right-of-use assets						$	695					$	433
Finance lease assets						Plants, properties and equipment, net (a)						82						39
Total leased assets												$	777					$	472
Liabilities
Current
Operating						Other current liabilities						$	232					$	156
Finance						Notes payable and current maturities of long-term debt						19						11
Noncurrent
Operating						Long-term lease obligations						477						292
Finance						Long-term debt						68						38
Total lease liabilities												$	796					$	497

(a)Finance leases are recorded net of accumulated amortization of $70 million as of both March 31, 2025 and December 31, 2024.

Maturity of Lease Liabilities

In millions						Operating Leases						Financing Leases						Total
2025						$	199					$	21					$	220
2026						209						22						231
2027						149						18						167
2028						92						14						106
2029						49						11						60
Thereafter						94						16						110
Total lease payments						792						102						894
Less imputed interest						83						15						98
Present value of lease liabilities						$	709					$	87					$	796

NOTE 11 - GOODWILL AND OTHER INTANGIBLES

Goodwill

The following table presents changes in goodwill balances as allocated to each business segment for the three months ended March 31, 2025:

In millions			Packaging Solutions North America						Packaging Solutions EMEA						Global Cellulose Fibers						Total
Balance as of January 1, 2025
Goodwill			$	3,334					$	76					$	52					$	3,462
Accumulated impairment losses			(296)						(76)						(52)						(424)
Total			3,038						—						—						3,038
Goodwill additions/reductions (a)			336			(c)			3,712			(c)			—						4,048
Currency translation and other (b)			—						156						—						156
Balance as of March 31, 2025
Goodwill			3,433						3,944						52						7,429
Accumulated impairment losses			(59)						(76)						(52)						(187)
Total			$	3,374					$	3,868					$	—					$	7,242

(a) Includes write-offs of previously impaired goodwill of $237 million and accumulated impairment losses of $(237) million.

(b) Represents the effects of foreign currency translations and reclassifications.

(c) Reflects the acquisition of DS Smith. See Note 8 for further details.

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Other Intangibles

Identifiable intangible assets comprised of the following:

			March 31, 2025																		December 31, 2024
In millions			Gross Carrying Amount						Accumulated Amortization						Net Intangible Assets						Gross Carrying Amount						Accumulated Amortization						Net Intangible Assets
Customer relationships and lists			$	4,458					$	392					$	4,066					$	489					$	360					$	129
Tradenames, patents and trademarks, and developed technology			564						171						393						170						162						8
Software			118						14						104			(a)			12						12						—
Land and water rights			8						2						6						8						2						6
Other			21						5						16						7						5						2
Total			$	5,169					$	584					$	4,585					$	686					$	541					$	145

(a) Of this balance, $65 million has been placed in service and $39 million is in development.

The Company recognized the following amounts as amortization expense related to intangible assets:

			Three Months Ended March 31,
In millions			2025						2024
Amortization expense related to intangible assets			$	51					$	9

Based on current intangibles subject to amortization, estimated amortization expense for each of the succeeding years is as follows:

In millions			Amortization Expense
2025			$	216
2026			287
2027			268
2028			265
2029			252
Thereafter			3,276
Total			$	4,564

NOTE 12 - INCOME TAXES

International Paper made income tax payments, net of refunds, of $45 million and $5 million for the three months ended March 31, 2025 and 2024, respectively.

The Company currently estimates that, as a result of ongoing discussions, pending tax settlements and expirations of statutes of limitations, the amount of unrecognized tax benefits could be reduced by approximately $8 million during the next 12 months.

The Organization for Economic Cooperation and Development has proposed a 15% global minimum tax applied on a country-by-country basis (the "Pillar Two rule"), and many countries, including countries in which we operate, have enacted or begun the process of enacting laws adopting the Pillar Two rule. The first component of the Pillar Two rule became effective as of January 1, 2024, and did not have a material impact on the Company’s effective tax rate. With the DS Smith acquisition on January 31, 2025, the evaluation of the impact of the second component of Pillar Two is ongoing but is not expected to have a material impact on the Company's effective tax rate for 2025.

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NOTE 13 - COMMITMENTS AND CONTINGENCIES

General

The Company is involved in various inquiries, administrative proceedings and litigation relating to environmental and safety matters, personal injury, product liability, labor and employment, contracts, sales of property, intellectual property, tax, and other matters, that arise in the normal course of business. These matters may raise difficult and complicated legal issues and may be subject to many uncertainties and complexities. Moreover, some of these matters allege substantial or indeterminate monetary damages.

International Paper reviews inquiries, administrative proceedings and litigation, including with respect to environmental matters, on an ongoing basis and establishes an estimated liability for specific legal proceedings and other loss contingencies when it determines that the likelihood of an unfavorable outcome is probable, and the amount of the loss can be reasonably estimated. In addition, if the likelihood of an unfavorable outcome with respect to material loss contingencies is reasonably possible and International Paper is able to determine an estimate of the possible loss or range of loss, whether in excess of a related accrued liability of where there is no accrued liability, International Paper will disclose the estimate of the possible loss or range of loss. When no amount in a range of loss is more likely than any other amount in the range, the low end of the range is used as the estimate of the possible loss. International Paper’s assessment of whether a loss is probable is based on management’s assessment of the ultimate outcome of the matter.

Assessments of lawsuits and claims and the estimates reflected herein, are subject to significant judgments about future events, rely heavily on estimates and assumptions, and are otherwise subject to significant known and unknown uncertainties. The matters underlying such estimates may change from time to time and actual losses may vary significantly from current estimates. Additionally, the estimated liability for loss contingencies does not include matters or losses that are not reasonably estimable and probable.

Based on information currently known to International Paper, management believes that loss contingencies arising from pending matters, including the matters described herein, will not have a material adverse effect on the consolidated financial position or liquidity of the Company. However, in light of the inherent uncertainties involved in such matters, some of which are beyond the Company's control, and the large or indeterminate damages sought in some of these matters, a future adverse ruling, settlement, unfavorable development, or increase in accruals with respect to these matters could result in future charges that could be materially adverse to the Company's results of operations or cash flows in any particular reporting period.

Environmental

The Company has been named as a potentially responsible party ("PRP") in environmental remediation actions under various U.S.federal and state laws, including the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended ("CERCLA"). Many of these proceedings involve the cleanup of hazardous substances at large commercial landfills that received waste from many different sources. While joint and several liability is authorized under CERCLA and equivalent state laws, as a practical matter, liability for CERCLA cleanups is typically allocated among the many PRPs. There are other remediation costs typically associated with the cleanup of hazardous substances at the Company’s current, closed and formerly-owned facilities, and recorded as liabilities in the balance sheet.

Remediation costs are recorded in the consolidated financial statements when they become probable and reasonably estimable. International Paper has estimated the probable liability associated with these environmental remediation matters, including those described herein, to be approximately $284 million and $279 million in the aggregate as of March 31, 2025 and December 31, 2024, respectively.

Cass Lake: One of the matters included above arises out of a closed wood-treatment facility located in Cass Lake, Minnesota. In June 2011, the U.S. Environmental Protection Agency ("EPA") selected and published a proposed soil remedy at the site. In April 2020, the EPA issued a final plan concerning clean-up standards at a portion of the site. The Company is performing RA and continues to cooperate with the EPA on the remaining remediation goals at the site. The estimated liability for the Cass Lake superfund site was $48 million as of both March 31, 2025 and December 31, 2024.

Kalamazoo River: The Company is a PRP with respect to the Allied Paper, Inc./Portage Creek/Kalamazoo River Superfund Site in Michigan. The EPA asserts that the site is contaminated by polychlorinated biphenyls primarily as a result of discharges from various paper mills located along the Kalamazoo River, including a paper mill formerly owned by St. Regis Paper Company ("St. Regis"). The Company is a successor in interest to St. Regis.

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• Operable Unit 5, Area 1: In March 2016, the Company received a special notice letter from the EPA (i) inviting participation in implementing a remedy for a portion of the site known as Operable Unit 5 ("OU5"), Area 1, and (ii) demanding reimbursement of EPA past costs totaling $37 million. In December 2016, the EPA issued a unilateral administrative order ("UAO") to the Company and other PRPs to perform the remedy. The Company responded to the UAO, agreeing to comply with the order subject to its sufficient cause defenses. The Company continues to comply with the UAO in performing remediation activities at OU5, Area 1.

• Operable Unit 1 ("OU1"): In October 2016, the Company and another PRP received a special notice letter from the EPA inviting participation in the remedial design ("RD") component of the landfill remedy for the Allied Paper Mill, which is also known as Operable Unit 1. A Record of Decision ("ROD") establishing the final landfill remedy for the Allied Paper Mill was issued by the EPA in September 2016. The Company responded to the Allied Paper Mill special notice letter in December 2016 denying liability for OU1. In 2021, the EPA initiated RA activities. In October 2022, the Company received a unilateral administrative order to perform the RA. The Company began performing the RA in 2023 and established a $27 million reserve to account for this liability in the fourth quarter of 2022. In the fourth quarter of 2024, the Company increased the reserve by $27 million to account for the reasonably estimable costs for the next phases of the RA, following an EPA approved design modification in October to the original remedial design.

The total reserve for the combined liabilities for OU5, Area 1 and OU1 at the Kalamazoo River superfund site was $29 million as of both March 31, 2025 and December 31, 2024.

The Company was named as a defendant by Georgia-Pacific Consumer Products LP, Fort James Corporation and Georgia Pacific LLC (collectively, "GP") in a contribution and cost recovery action for alleged pollution at the site related to the Company's potential CERCLA liability. NCR Corporation and Weyerhaeuser Company were also named as defendants. The lawsuit seeks contribution under CERCLA for costs purportedly expended by plaintiffs ($79 million as of the filing of the complaint) and for future remediation costs. In June 2018, the District Court issued its Final Judgment and Order, which fixed the past cost amount at approximately $50 million (plus interest to be determined) and allocated to the Company a 15% share of responsibility for those past costs. The District Court did not address responsibility for future costs in its decision. In July 2018, the Company and each of the other parties filed notices appealing the Final Judgment and prior orders incorporated into the Final Judgment. In April 2022, the Sixth Circuit Court of Appeals (the "Sixth Circuit") reversed the Final Judgment of the Court, finding that the lawsuit against the Company was time-barred by the applicable statute of limitations. In May 2022, GP filed a petition for rehearing with the Sixth Circuit, which was denied in July 2022. In November 2022, GP filed a petition for writ of certiorari with the U.S. Supreme Court. In October 2023, the U.S. Supreme Court denied GP's writ petition, thus rendering final the Sixth Circuit's decision that GP's lawsuit against the Company was time-barred. In January 2024 GP requested that the District Court’s final order declare that each party is jointly and severally liable for future costs, arguing that the Sixth Circuit decision only applies to past costs. On April 9, 2024, the District Court entered Final Judgment After Remand, declaring, consistent with the Sixth Circuit's decision, that GP’s past costs are time-barred by the applicable statute of limitations. The District Court also entered Final Judgment on Remand that all three parties, including the Company, are jointly and severally liable for future response costs at the site. The Company believes the District Court’s Final Judgment on Remand regarding liability for future costs is in error and has appealed the Final Judgment on Remand on future costs liability to the Sixth Circuit.

Harris County: International Paper and McGinnis Industrial Maintenance Corporation ("MIMC"), a subsidiary of Waste Management, Inc. ("WMI"), are PRPs at the San Jacinto River Waste Pits Superfund Site in Harris County, Texas. The PRPs have been actively participating in the activities at the site and share the costs of these activities.

In October 2017, the EPA issued a ROD selecting the final remedy for the site: removal and relocation of the waste material from both the northern and southern impoundments.

In April 2018, the PRPs entered into an Administrative Order on Consent ("AOC") with the EPA, agreeing to work together to develop the RD for the northern impoundment. The AOC does not include any agreement to perform waste removal or other construction activity at the site.

In 2020, the Company reserved the following estimated liability amounts in relation to remediation at this site: (a) $10 million for the southern impoundment; and (b) $55 million for the northern impoundment, which represented the Company's 50% share of our estimate of the low end of the range of probable remediation costs.

The Company submitted the Final Design Package for the southern impoundment to the EPA, and the EPA approved the plan in May 2021. The EPA issued a Unilateral Administrative Order for RA of the southern impoundment in August 2021. An

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addendum to the Final 100% RD (Amended April 2021) was submitted to the EPA for the southern impoundment in June 2022. The Company substantially completed the RA for the southern impoundment in 2024.

With respect to the northern impoundment, the PRPs submitted a Final 100% RD to EPA in July 2024. EPA provided comments at the end of October and a Revised Final 100% RD was submitted at the end of November 2024. The total estimated liability for the southern and northern impoundment was $98 million as of both March 31, 2025 and December 31, 2024. The current reserve is primarily for the Company’s 50% share of our estimate of the low end of the range of probable costs to implement the RD. Because of ongoing questions regarding cost effectiveness, timing and gathering other technical data, additional losses in excess of our recorded liability are possible.

Versailles Pond: The Company is a responsible party for the investigation and remediation of Versailles Pond, a 57-acre dammed river impoundment that historically received paperboard mill wastewater in Sprague, Connecticut. A comprehensive investigation has determined that Versailles Pond is contaminated with polychlorinated biphenyls, mercury, and metals. A preliminary remediation plan was prepared in the third quarter of 2023. Negotiations with state and federal governmental officials are ongoing regarding the scope and timing of the remediation. The total estimated liability for Versailles Pond was $29 million and $30 million as of March 31, 2025 and December 31, 2024,

Asbestos-Related Matters

We have been named as a defendant in various asbestos-related personal injury litigation, in both U.S. state and federal court, primarily in relation to the prior operations of certain companies previously acquired by the Company. The Company's total recorded liability with respect to pending and future asbestos-related claims was $100 million net of insurance recoveries as of both March 31, 2025 and December 31, 2024. While it is reasonably possible that the Company may incur losses in excess of its recorded liability with respect to asbestos-related matters, we are unable to estimate any loss or range of loss in excess of such liability, and do not believe additional material losses are probable.

Antitrust

In March 2017, the Italian Competition Authority ("ICA") commenced an investigation into the Italian packaging industry to determine whether producers of corrugated sheets and boxes violated the applicable European competition law. In April 2019, the ICA concluded its investigation and issued initial findings alleging that over 30 producers, including our Italian packaging subsidiary ("IP Italy") and, prior to completion of the business combination certain subsidiaries of DS Smith operating in Italy ("DS Smith Italy"), improperly coordinated the production and sale of corrugated sheets and boxes. In August 2019, the ICA issued its decision and assessed IP Italy a fine of €29 million (approximately $31 million at the then-current exchange rates) for participation in the boxes coordination, which was recorded in the third quarter of 2019. We appealed the ICA decision, and our appeal was denied in May 2021. We further appealed the decision to the Italian Council of State ("Council of State"), and in March 2023 the Council of State largely upheld the ICA’s findings, but referred the calculation of IP Italy’s fine back to the ICA, finding that it was disproportionately high based on the conduct found. Given the failure of the Council of State to address certain arguments brought by IP, we further appealed the Council of State decision to uphold the ICA’s findings. In March 2024, the Council of State published its decision holding that its earlier decision should be interpreted as accepting many of IP Italy’s earlier arguments and that the ICA should reduce IP Italy’s fine accordingly. Notwithstanding these decisions by the Council of State, in March 2024 the ICA served IP Italy with its redetermination decision leaving IP Italy’s fine unchanged. IP appealed the ICA's redetermination decision as inconsistent with the Council of State's 2024 and 2023 decision. In July 2024, the Council of State partially annulled the ICA redetermination decision, reducing IP Italy's fine by $6 million (€6 million). As of March 31, 2025, after giving effect to this development, the Company did not have any remaining liability related to IP Italy's fine. IP Italy has further appealed the Council of State's July 2024 decision seeking further reduction. DS Smith Italy was also subject to the ICA decision but not fined, given its position as leniency applicant. IP Italy, DS Smith Italy, and other producers also have been named in lawsuits, and we have received other claims, by a number of customers for damages associated with the alleged anticompetitive conduct. Given the early stages of these claims and the intention of the Company to defend robustly against such claims, it is too early to predict with any real degree of certainty, the precise overall outcome and ultimate potential liability (if any) that might be incurred in connection therewith, and there can be no guarantee that the aggregate of possible damages against IP Italy and DS Smith Italy could not, together, have a material impact on the Company’s financial condition.

Guarantees

In connection with sales of businesses, property, equipment, forestlands and other assets, International Paper commonly makes representations and warranties relating to such businesses or assets, and may agree to indemnify buyers with respect to tax and environmental liabilities, breaches of representations and warranties, and other matters. Where liabilities for such matters are

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determined to be probable and reasonably estimable, accrued liabilities are recorded at the time of sale as a cost of the transaction.

Brazil Goodwill Tax Matter: The Brazilian Federal Revenue Service has challenged the deductibility of goodwill amortization generated in a 2007 acquisition by Sylvamo do Brasil Ltda. ("Sylvamo Brazil"), which was a wholly owned subsidiary of the Company until the October 1, 2021 spin-off of the Printing Papers business, after which it became a subsidiary of Sylvamo Corporation ("Sylvamo"). Sylvamo Brazil received assessments for the tax years 2007-2015 totaling approximately $103 million (adjusted for variation in currency exchange rates) in tax, plus interest, penalties and fees. The interest, penalties and fees currently total approximately $260 million (adjusted for variation in currency exchange rates). Accordingly, the assessments currently total approximately $363 million (adjusted for variation in currency exchange rates). After an initial favorable ruling challenging the basis for these assessments, Sylvamo Brazil received subsequent unfavorable decisions from the Brazilian Administrative Council of Tax Appeals. Sylvamo Brazil appealed these decisions. On October 11, 2024, the federal regional court issued a ruling favorable to Sylvamo Brazil in the first stage of judicial review on the assessments for tax years 2007 and 2008-2012, comprising approximately $230 million of the total $363 million as of March 31, 2025. On December 18, 2024, the Brazilian Federal Revenue Service appealed this ruling. This tax litigation matter may take many years to resolve. Sylvamo Brazil and International Paper believe the transaction underlying these assessments was appropriately evaluated, and that Sylvamo Brazil's tax position should be sustained, based on Brazilian tax law.

This matter pertains to a business that was conveyed to Sylvamo on October 1, 2021, as part of our spin-off transaction. Pursuant to the terms of the tax matters agreement entered into between the Company and Sylvamo, the Company will pay 60% and Sylvamo will pay 40%, on up to $300 million of any assessment related to this matter, and the Company will pay all amounts of the assessment over $300 million. Under the terms of the tax matters agreement, decisions concerning the conduct of the litigation related to this matter, including strategy, settlement, pursuit and abandonment, will be made by the Company. Sylvamo thus has no control over any decision related to this ongoing litigation. The Company intends to vigorously defend this historical tax position against the current assessments and any similar assessments that may be issued for tax years subsequent to 2015. The Brazilian government may enact a tax amnesty program that would allow Sylvamo Brazil to resolve this dispute for less than the assessed amount. As of October 1, 2021, in connection with the recording of the distribution of assets and liabilities resulting from the spin-off transaction, the Company established a liability representing the initial fair value of the contingent liability under the tax matters agreement. The contingent liability was determined in accordance with ASC 460 "Guarantees" based on the probability weighting of various possible outcomes. The initial fair value estimate and recorded liability as of December 31, 2021 was $48 million and remains this amount at March 31, 2025. This liability will not be increased in subsequent periods unless facts and circumstances change such that an amount greater than the initial recognized liability becomes probable and estimable.

NOTE 14 - VARIABLE INTEREST ENTITIES

Variable Interest Entities

As of March 31, 2025, the fair value of the Timber Notes and Extension Loans for the 2007 Financing Entities was $2.4 billion and $2.1 billion, respectively. The Timber Notes and Extension Loans are classified as Level 2 within the fair value hierarchy, which is further defined in Note 1 in the Company’s Annual Report.

The Timber Notes of $2.3 billion and the Extension Loans of $2.1 billion both mature in 2027 and are shown in Long-term nonrecourse financial assets of variable interest entities and Long-term nonrecourse financial liabilities of variable interest entities, respectively, on the accompanying condensed consolidated balance sheet.

Activity between the Company and the 2007 Financing Entities was as follows:

			Three Months Ended March 31,
In millions			2025						2024
Revenue (a)			$	33					$	39
Expense (b)			29						35
Cash receipts (c)			30						34
Cash payments (d)			30						34

(a)The revenue is included in interest expense, net in the accompanying statement of operations and includes approximately $5 million for both the three months ended March 31, 2025 and 2024 of accretion income for the amortization of the basis difference adjustment on the Long-term financial assets of variable interest entities.

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(b)The expense is included in interest expense, net in the accompanying statement of operations and includes approximately $2 million for both the three months ended March 31, 2025 and 2024 of accretion expense for the amortization of the basis difference adjustment on the Long-term nonrecourse financial liabilities of variable interest entities.

(c)The cash receipts are interest received on the Long-term financial assets of variable interest entities.

(d)The cash payments are interest paid on Long-term nonrecourse financial liabilities of variable interest entities.

NOTE 15 - DEBT

The borrowing capacity of the Company's commercial paper program is $1.0 billion supported by its $1.4 billion credit agreement. Under the terms of the program, individual maturities on borrowings may vary, but not exceed one year from the date of issue. Interest bearing notes may be issued either as fixed or floating rate notes. During the first quarter of 2025, the Company borrowed, and had outstanding, $175 million under the program.

At March 31, 2025, International Paper’s USD denominated credit facilities totaled $1.9 billion. The credit facilities generally provide for interest rates at a floating rate index plus a pre-determined margin dependent upon International Paper’s credit rating. The credit facilities included a $1.4 billion contractually committed bank facility with a maturity date of June 2028. The liquidity facilities also include up to $500 million of uncommitted financings based on eligible receivables balances under a receivables securitization program that expires in June 2025. At March 31, 2025, the Company had no borrowings outstanding under the receivables securitization program.

Following the DS Smith acquisition, International Paper assumed foreign denominated debt in various currencies with an approximated value of $3.6 billion. The assumed foreign credit facilities include a £1.25 billion contractually committed bank facility, a €200 million credit facility, a €60 million committed credit facility and a £50 million uncommited bank facility. The £1.25 billion contractually committed credit facility has a May 2027 maturity date. In March 2025, the Company amended and restated its credit facility agreement to, among other things (i) replace its obligation to prepare audited and unaudited consolidated accounts and instead provide International Paper’s account information, on the same terms as International Paper’s existing credit facilities, (ii) amend the financial covenant in the credit facility agreement to align with financial covenants given by International Paper in its existing credit facilities, (iii) amend certain events of default, and undertakings to align more closely with certain equivalent provisions included in the documentation relating to the existing financings of International Paper and to allow additional flexibility for potential reorganization of DS Smith’s subsidiaries, if required, now that DS Smith and its subsidiaries are part of the International Paper group. The multi-currency credit facility allows for GBP, EUR and USD borrowings and provides for interest rates at a floating rate index plus a pre-determined margin. Credit facility borrowings are denominated in the currency that aligns with the Company's cashflows. At March 31, 2025, the Company had $909 million outstanding under this facility.

At March 31, 2025, the Company had €200 million borrowings outstanding under the €200 million credit facility agreement with maturity dates from June 2025 through March 2029. In April 2025, the Company amended and restated this credit facility agreement to, among other things (i) replace its obligation to prepare audited and unaudited consolidated accounts and instead provide International Paper’s account information, on the same terms as International Paper’s existing credit facilities, (ii) amend the financial covenant in the credit facility agreement to align with financial covenants given by International Paper in its existing credit facilities, (iii) amend certain events of default, and undertakings to align more closely with certain equivalent provisions included in the documentation relating to the existing financings of International Paper and to allow additional flexibility for potential reorganization of DS Smith’s subsidiaries, if required, now that DS Smith and its subsidiaries are part of the International Paper group. The credit facility agreement provides for interest rates at a fixed rate. The Company’s credit facility agreement is not subject to any restrictive covenants other than that International Paper must comply with the same negative covenants as per its existing credit facilities.

The Company's €60 million committed bank facility matures in December 2026. In April 2025, the Company amended and restated this credit facility agreement to, among other things (i) replace its obligation to prepare audited and unaudited consolidated accounts and instead provide International Paper’s account information, on the same terms as International Paper’s existing credit facilities, (ii) amend the financial covenant in the credit facility agreement to align with financial covenants given by International Paper in its existing credit facilities, (iii) amend certain events of default, and undertakings to align more closely with certain equivalent provisions included in the documentation relating to the existing financings of International Paper and to allow additional flexibility for potential reorganization of DS Smith’s subsidiaries, if required, now that DS Smith and its subsidiaries are part of the International Paper group. The multi-currency credit facility allows for GBP, EUR and USD borrowings. At March 31, 2025, there were no borrowings outstanding under this agreement.

The Company has a £50 million uncommitted bank facility. At March 31, 2025 the Company had $63 million of translated borrowings outstanding under this agreement with no capacity remaining.

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During the first quarter of 2025, the Company borrowed a USD equivalent $64 million under these foreign denominated credit facilities.

In the first quarter of 2025, International Paper entered into agreements to guarantee the outstanding notes of DS Smith. This included €600 million 0.8750% Notes due September 12, 2026; €850 million 4.375% Notes due July 27, 2027; £250 million 2.875% Notes due July 26, 2029; and €650 million 4.500% Notes due July 27, 2030.

At March 31, 2025, contractual obligations for future payments of debt maturities (including finance lease liabilities disclosed in Note 10 - Leases and excluding the timber monetization structure disclosed in Note 14 - Variable Interest Entities) by calendar year were as follows: $428 million in 2025; $905 million in 2026; $2.3 billion in 2027; $717 million in 2028; $344 million in 2029 and $4.9 billion thereafter.

The Company’s financial covenants require the maintenance of a minimum net worth, as defined in our debt agreements, of $9 billion and a total debt-to-capital ratio of less than 60%. Net worth is defined as the sum of common stock, paid-in capital and retained earnings, less treasury stock plus any cumulative goodwill impairment charges. The calculation also excludes accumulated other comprehensive income/loss and both the current and long-term Nonrecourse Financial Liabilities of Variable Interest Entities. The total debt-to-capital ratio is defined as total debt divided by the sum of total debt plus net worth. As of March 31, 2025, we were in compliance with our debt covenants.

At March 31, 2025, the fair value of International Paper’s $9.6 billion of debt was approximately $9.3 billion. The fair value of the Company’s long-term debt is estimated based on the quoted market prices for the same or similar issues. International Paper’s long-term debt is classified as Level 2 within the fair value hierarchy, which is further defined in Note 1 in the Company’s Annual Report.

NOTE 16 - DERIVATIVES AND HEDGING ACTIVITIES

As a multinational company, International Paper is exposed to market risks, such as changes in interest rates, currency exchange rates and commodity prices.

International Paper periodically uses derivatives and other financial instruments to hedge exposures to interest rate, commodity and currency risks. International Paper does not hold or issue financial instruments for trading purposes. For hedges that meet the hedge accounting criteria at inception, International Paper formally designates and documents the instrument as a fair value hedge, a cash flow hedge or a net investment hedge of a specific underlying exposure.

Derivative and Hedging Accounting Policy

The Company and its subsidiaries are exposed to certain risks relating to its ongoing financial arrangements. The Company uses derivative financial instruments, primarily commodity swaps and forward contracts, to manage currency and commodity risks associated with the Company’s underlying business activities and the financing of these activities. As a matter of policy, we do not use financial instruments for speculative purposes.

ASC 815 requires entities to recognize all derivative instruments as either assets or liabilities in the statement of financial position at fair value. The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedge accounting relationship and, further, on the type of hedge accounting relationship.

For those derivative or nonderivative instruments that are designated and qualify as hedging instruments under ASC 815, a company must designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge, cash flow hedge, or a net investment hedge.

Gains or losses on cash flow hedges are deferred as a component of AOCI or losses and are reclassified into earnings at the time the hedged item affects earnings, presented in the same income statement line item as the underlying hedged item (i.e., in “cost of products sold” when the hedged transactions are commodity cash flows associated with energy purchases to facilitate operations). If it becomes probable that a forecasted transaction will not occur, previously deferred gains and losses related to those forecasted transactions would be recognized in earnings in the current period.

Gains and losses on net investment hedges are recorded in the cumulative translation adjustment component of AOCI, offsetting the translation adjustment of the net investment being hedged. Any deferred gains or losses previously recorded in the cumulative translation adjustment component of AOCI will remain in AOCI until the hedged net investment is sold or

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substantially liquidated, at which time the cumulative deferred gains or losses are reclassified into earnings as a component of gain or loss on the sale of the hedged net investment.

To qualify for hedge accounting, a specified level of hedge effectiveness between the hedging instrument and the item being hedged must be achieved at inception and maintained throughout the hedged period. We formally document our risk management objectives, our strategies for undertaking the hedge transactions, the nature of and relationships between the hedging instruments and hedged items, and the method for assessing hedge effectiveness. Additionally, for qualified hedges of forecasted transactions, we specifically identify the significant characteristics and expected terms of the forecasted transactions.

Our designated derivative contracts include commodity swap contracts and forward contracts. Commodity swap contracts effectively modify the Company’s exposure to changes in natural gas and electricity prices by allowing the Company to purchase energy on a fixed-rate basis. Forward contracts effectively modify the Company’s exposure to fluctuations in the cost of carbon credits by allowing the Company to purchase carbon credits on a fixed-rate basis. These agreements involve the receipt of floating-rate amounts in exchange for fixed-rate amounts over the life of the agreements.

Commodity Risk Management

The Company has entered into commodity swap and commodity forward contracts which have been designated as cash flow hedges of commodity price risk associated with forecasted purchases and sales of various commodities used in the Company’s operations. These commodity contracts are used to manage exposure to changes in natural gas, electricity, and carbon credit prices. Individual commodity contracts are entered into up to three years prior to the occurrence of the hedged transactions.

Foreign Currency Risk Management

The Company and its subsidiaries periodically use non-derivative, foreign currency denominated loans to hedge the Company’s foreign currency exposure related to the translation of its net investment in foreign subsidiaries. Certain of these loans are designated as net investment hedges.

The component of the gains and losses on our net investment in these designated foreign operations, driven by changes in foreign exchange rates, are economically offset by remeasurements of our foreign-currency denominated debt.

The notional amounts of financial instruments used in hedging transactions were as follows:

In millions			March 31, 2025						December 31, 2024
Derivatives in Cash Flow Hedging Relationships:
Electricity contract (MWh)			0.7						—
Natural gas contracts (MWh)			6.2						—
Carbon credit contracts (tons)			0.7						—
Derivatives in Net Investment Hedging Relationships:
External debt (EUR)			€	3,198					€	—
Derivatives Not Designated as Hedging Instruments:
Electricity contract (MWh)			0.2						0.3

The following table shows gains or losses recognized in AOCI, net of tax, related to derivative instruments:

			Gain (Loss) Recognized in AOCI on Derivatives
			Three Months Ended March 31,
In millions			2025						2024
Derivatives in Cash Flow Hedging Relationships:
Commodity contacts			$	(52)					$	—
Derivatives in Net Investment Hedging Relationships:
External debt			$	8					$	—

Based on our valuation at March 31, 2025, and assuming market rates remain constant through contract maturities, we expect transfers to earnings of the existing gain or losses reported in AOCI on cash flow hedges during the next 12 months to correspond with the current assets and liabilities portion of the derivative as disclosed below.

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The amounts of gains and losses recognized in the statement of operations on financial instruments used in hedging transactions were as follows:

			Gain (Loss) Reclassified from AOCI Into Income												Location of Gain (Loss) Reclassified from AOCI
			Three Months Ended March 31,
In millions			2025						2024
Derivatives in Cash Flow Hedging Relationships:
Commodity contracts			$	1					$	—					Cost of products sold

			Gain (Loss) Recognized in Income												Location of Gain (Loss) In Statement of Operations
			Three Months Ended March 31,
In millions			2025						2024
Derivatives in Cash Flow Hedging Relationships:
Commodity contracts			$	5					$	—					Cost of products sold
Derivatives Not Designated as Hedging Instruments:
Electricity contract			—						(9)						Cost of products sold
Commodity contracts			(6)						—						Cost of products sold
Total			$	(1)					$	(9)

Fair Value Measurements

The Company has not changed its valuation techniques for measuring the fair value of any financial assets or liabilities during the year. Transfers between levels, if any, are recognized at the end of the reporting period. International Paper’s derivatives are classified as Level 2 within the fair value hierarchy. Fair value hierarchies are further defined in Note 1 in the Company’s Annual Report.

The following table provides a summary of the impact of our derivative instruments in the balance sheet:

			Assets												Liabilities
In millions			March 31, 2025						December 31, 2024						March 31, 2025						December 31, 2024
Derivatives designated as hedging instruments
Commodity contracts – cash flow			$	12					$	—					$	38					$	—
Derivatives not designated as hedging instruments
Electricity contract			1						3						—						—
Commodity contract			35						—						42						—
Total derivatives not designated as hedging instruments			36						3						42						—
Total derivatives			$	48		(a)			$	3		(b)			$	80		(c)			$	—

(a)Includes $35 million recorded in Other current assets and $13 million recorded in Deferred charges and other assets in the accompanying condensed consolidated balance sheet.

(b)Includes $3 million recorded in Other current assets in the accompanying condensed consolidated balance sheet.

(c)Includes $64 million recorded in Other current liabilities and $16 million recorded in Other liabilities in the accompanying condensed consolidated balance sheet.

The above contracts are subject to enforceable master netting arrangements that provide rights of offset with each counterparty when amounts are payable on the same date in the same currency or in the case of certain specified defaults. Management has made an accounting policy election to not offset the fair value of recognized derivative assets and derivative liabilities in the balance sheet. The amounts owed to the counterparties and owed to the Company are considered immaterial with respect to each counterparty and in the aggregate with all counterparties.

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NOTE 17 - RETIREMENT PLANS

International Paper operates both defined benefit and defined contribution pension plans as well as other post retirement benefit plans throughout our operations in accordance with local conditions and practice.

We sponsor and maintain the Retirement Plan of International Paper Company (the "Pension Plan"), a tax-qualified defined benefit pension plan that provides retirement benefits to substantially all hourly and union employees who work at a participating business unit. The Pension Plan was frozen as of January 1, 2019 for salaried participants.

The Pension Plan provides defined pension benefits based on years of credited service and either final average earnings (salaried employees and hourly employees receiving salaried benefits), hourly job rates or specified benefit rates (hourly and union employees).

In connection with our acquisition, International Paper acquired the existing DS Smith Group Pension plan (the "Group Plan"), a UK funded defined benefit plan providing pension benefits and lump sum benefits to members and dependents. The Group Plan closed to new entrants and future accruals as of April 30, 2011.

Net periodic pension expense (income) for our qualified and nonqualified defined benefit plans and the Group Plan, comprised the following:

			Three Months Ended March 31,
In millions			2025						2024
Service cost			$	10					$	13
Interest cost			124						111
Expected return on plan assets			(151)						(148)
Actuarial loss			18						19
Amortization of prior service cost			4						3
Settlement			8						—
Net periodic pension expense (income)			$	13					$	(2)

The components of net periodic pension expense (income) other than the Service cost component are included in Non-operating pension expense (income) in the condensed consolidated statement of operations.

The Company’s funding policy for our pension plans is to contribute amounts sufficient to meet legal funding requirements, plus any additional amounts that the Company may determine to be appropriate considering the funded status of the plan, tax deductibility, the cash flows generated by the Company, and other factors. The Company made no voluntary cash contributions to the qualified pension plan in the first three months of 2025 or 2024. The nonqualified defined benefit plans are funded to the extent of benefit payments, which totaled $33 million and $5 million for the three months ended March 31, 2025 and 2024, respectively.

NOTE 18 - STOCK-BASED COMPENSATION

International Paper's 2024 Long-term Incentive Compensation Plan (the "2024 LTICP') authorizes grants of restricted stock, restricted or deferred stock units, performance awards payable in cash or stock upon the attainment of specified performance goals, dividend equivalents, options, stock appreciation rights, other stock-based awards and cash-based awards at the discretion of the Management Development and Compensation Committee of the Board of Directors (the “MDCC”). On December 9, 2024, the MDCC approved the 2025 Long-Term Incentive Plan (the "2025 LTIP"), pursuant to the 2024 LTICP, approving a sole performance metric of 100% relative total shareholder return ("TSR") for performance stock unit awards, effective January 1, 2025. As of March 31, 2025, 7.0 million shares were available for grant under the LTICP.

Subsequent to the acquisition of DS Smith, the Company agreed to provide equity transition awards to DS Smith employees who became employees of the Company after closing of the transaction. The transition awards, which were granted in March 2025, consisted of time-based restricted stock units. The transition awards replaced the unvested portion of the 2024 DS Smith Performance Share Plan award granted to DS Smith employees in July 2024.

Stock-based compensation expense and related income tax benefits were as follows:

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			Three Months Ended March 31,
In millions			2025						2024
Total stock-based compensation expense (selling and administrative)			$	32					$	9
Income tax benefits related to stock-based compensation			38						13

At March 31, 2025, $150 million, net of estimated forfeitures, of compensation cost related to time-based and performance-based shares and restricted stock attributable to future service had not yet been recognized. This amount will be recognized in expense over a weighted-average period of 1.9 years.

During the first three months of 2025, the Company granted 1.0 million performance units at an average grant date fair value of $66.30 and 0.9 million time-based units at an average grant date fair value of $54.17.

NOTE 19 - BUSINESS SEGMENT INFORMATION

As a result of the completed acquisition of DS Smith on January 31, 2025, the CODM now reviews and manages the financial results and operations of the following segments on the basis of the new organizational structure, Packaging Solutions North America, Packaging Solutions EMEA and Global Cellulose Fibers. The Packaging Solutions EMEA segment includes the Company's legacy EMEA Industrial Packaging business and the newly acquired EMEA DS Smith business. As such, amounts related to the Company's legacy EMEA Industrial Packaging business have been recast out of the Industrial Packaging segment into the new Packaging Solutions EMEA segment for all prior periods. The newly acquired North America DS Smith business has been included in the Packaging Solutions North America segment. Amounts related to the Company's legacy North America Industrial Packaging business have been reported in the Packaging Solutions North America segment for all prior periods.

Packaging Solutions North America and Packaging Solutions EMEA are primarily focused on producing fiber-based packaging. We produce linerboard, medium, whitetop, recycled linerboard, recycled medium and saturating kraft of which a majority of our production is converted into corrugated packaging and other packaging. The revenue for our Packaging Solutions North America and Packaging Solutions EMEA segments are derived from selling these products to our customers.

Global Cellulose Fibers primarily focuses on producing cellulose fibers which is a renewable raw material used in a variety of products people depend on every day such as diapers, towel and tissue products, feminine care, incontinence and other personal care products. In addition, our innovative specialty pulps serve as a sustainable raw material used in textiles, construction materials, paints, coatings and more. The revenue for our Global Cellulose Fibers segment is derived from selling these products to our customers.

The CODM assesses performance for these segments and decides how to allocate resources based on business segment operating profit. Business segment operating profits (losses) are also used by International Paper's CODM to measure the earnings performance of its businesses and to focus on on-going operations.

INFORMATION BY BUSINESS SEGMENT

The following tables illustrate reportable segment revenue, significant segment expenses, and measures of a segment’s profit or loss for the three months ended March 31, 2025 and 2024. The table also reconciles these amounts to Earnings (loss) before income taxes and equity earnings.

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						Three Months Ended March 31, 2025
In millions						Packaging Solutions North America						Packaging Solutions EMEA						Global Cellulose Fibers						Total
Net Sales						$	3,702					$	1,550					$	643					$	5,895
Corporate and Intrasegment Sales																								6
Total Net Sales																								5,901
Less:
Cost of products sold						2,569						1,147						460
Selling and administrative expenses						282						93						42
Depreciation and amortization						413						107						51
Distribution expenses						266						151						66
Other segment items (a)						30						6						7
Business Segment Operating Profit (Loss)						142						46						17						205
Interest Expense, net																								81
Adjustment for less than wholly owned subsidiaries (b)																								(1)
Corporate expenses, net																								8
Net special items (i)																								249
Non-operating pension (income) expense																								3
Earnings (loss) before income taxes and equity earnings (loss)																								$	(135)

(i)Includes a charge of $221 million for transaction and other costs related to the DS Smith acquisition, a charge of $78 million for severance and other costs related to the closure of our Red River containerboard mill in Campti, LA, a net gain of $67 million related to sale of fixed assets primarily associated with our permanently closed Orange, TX containerboard mill and a net charge of $17 million for other items.

						Three Months Ended March 31, 2024
In millions						Packaging Solutions North America						Packaging Solutions EMEA						Global Cellulose Fibers						Total
Net Sales						$	3,486					$	348					$	704					$	4,538
Corporate and Intrasegment Sales																								81
Total Net Sales																								4,619
Less:
Cost of products sold						2,488						260						550
Selling and administrative expenses						284						25						58
Depreciation and amortization						203						16						54
Distribution expenses						288						22						82
Other segment items (a)						31						1						7
Business Segment Operating Profit (Loss)						192						24						(47)						169
Interest Expense, net																								46
Adjustment for less than wholly owned subsidiaries (b)																								(2)
Corporate expenses, net																								24
Net special items																								28
Non-operating pension (income) expense																								(12)
Earnings (loss) before income taxes and equity earnings (loss)																								$	85

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Assets

In millions						March 31, 2025						December 31, 2024
Packaging Solutions North America						$	16,564					$	14,501
Packaging Solutions EMEA						17,689						1,276
Global Cellulose Fibers						2,836						2,857
Corporate and other						4,079						4,166
Assets						$	41,168					$	22,800

Capital Expenditures

In millions						March 31, 2025						March 31, 2024
Packaging Solutions North America						$	182					$	193
Packaging Solutions EMEA						106						18
Global Cellulose Fibers						36						34
Subtotal						324						245
Corporate and other						6						6
Capital Expenditures						$	330					$	251

External Sales By Segment (c)

In millions						March 31, 2025						March 31, 2024
Packaging Solutions North America						$	3,668					$	3,460
Packaging Solutions EMEA						1,550						348
Global Cellulose Fibers						637						704
Other						46						107
Net Sales						$	5,901					$	4,619

*(a)*Other segment items includes Taxes other than payroll.

*(b)*Operating profits for industry segments include each segment’s percentage share of the profits of subsidiaries included in that segment that are less than wholly-owned. The pre-tax earnings for these subsidiaries is added here to present consolidated earnings from continuing operations before income taxes and equity earnings.

*(c)*External sales by segment are defined as those made to parties outside International Paper’s consolidated group, whereas sales by segment in the Net Sales table are determined using a management approach and include intersegment sales.

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