International Paper 10-Q 2026-06-30

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2026

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period From to

Commission File Number 001-03157

INTERNATIONAL PAPER COMPANY

(Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code: (901) 419-9000

Securities registered pursuant to Section 12(b) of the Act:

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 ☒ 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 (paragraph 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 ☒ 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 the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

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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. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares outstanding of the registrant’s common stock, par value $1.00 per share, as of July 31, 2026 was 529,569,895.

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INDEX

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PART I. FINANCIAL INFORMATION

INTERNATIONAL PAPER COMPANY

Condensed Consolidated Statement of Operations

(Unaudited)

(In millions, except per share amounts)

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 (Loss)

(Unaudited)

(In millions)

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)

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The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included in "Financial Statements and Supplementary Data" of this Quarterly Report on Form 10-Q (this "Form 10-Q") and the Company's Annual Report on Form 10-K for the year ended December 31, 2025 (our "Annual Report"). 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 in our Annual Report and subsequent quarterly reports, particularly under "Risk Factors" and "Forward-Looking Statements" of this Form 10-Q. Please see our "Cautionary Statement Regarding Forward-Looking Statements" below.

EXECUTIVE SUMMARY

Second Quarter 2026 Financial Summary

• Net sales of $6 billion

• Loss from continuing operations of $12 million

• Adjusted EBITDA (non-GAAP) from continuing operations of $587 million (1)

• Cash provided by operating activities of $1.14 billion (2)

• Free cash flow (non-GAAP) of $87 million (1) (2)

(1) See "Non-GAAP Financial Measures" for a list of our non-GAAP financial measures and reconciliations to the most directly comparable GAAP measures.

(2) Reflects amounts for the six months ended June 30, 2026, rather than the second quarter.

Overview

The Company’s second quarter results reflect continued progress against the strategic priorities of improving execution, enhancing reliability, optimizing the cost structure, and investing in our most competitive assets. Operational performance improved across the enterprise despite a significant planned maintenance outage schedule in North America and a challenging demand environment in portions of Europe.

In North America, adjusted EBITDA was sequentially lower, but better than expected as the Company continued to benefit from commercial initiatives focused on customer engagement and market share growth. Sales volumes were higher, reflecting continued strength in our domestic business, seasonal demand patterns, and the favorable impact of one additional shipping day. Our box shipments increased approximately 1.7% on a daily basis compared with the prior year period, reflecting continued success in winning and retaining customer business. Margins improved due to faster realization of previously announced pricing actions and a more favorable product mix associated with lower export sales. Operating costs were slightly improved due to stronger mill performance, additional Ixtac insurance recoveries and the non-repeat of winter storm impacts in the first quarter. These benefits were mostly offset by costs of the Riverdale paper machine conversion and other planned reliability spending. Our mill system continued to improve with capacity utilization up approximately 5% versus 2025, reflecting the benefits of reliability initiatives, operational discipline, and ongoing investments. Planned maintenance outage spending was exceptionally heavy during the second quarter as expected, reflecting the year's peak outage spending period. Input costs were favorably impacted by the non-repeat of higher natural gas and utility costs resulting from the winter storm in the first quarter, partially offset by higher recovered fiber and freight costs.

In EMEA, adjusted EBITDA was sequentially lower, but better than expected, despite a challenging macroeconomic environment. Sales volumes declined modestly, reflecting continued softness in market demand amid ongoing geopolitical uncertainty and subdued consumer sentiment. Margins were lower as higher paper prices compressed packaging margins. Higher oil prices remained a headwind to distribution costs; however, accelerated cost-out actions helped offset a portion of the impact. Energy costs were lower while old corrugated container (“OCC”) costs remained elevated over the first quarter.

Looking ahead, we expect adjusted EBITDA to be sequentially higher in the third quarter across both regions. In North America, significantly lower planned maintenance outage spending and improved margins driven by continued realization of previously announced pricing actions are expected to offset lower export sales volumes, higher input costs and the impact of the temporary suspension of operations at our Pine Hill, Alabama mill. In EMEA, improved margins driven by higher paper and box prices, higher seasonal volumes, and ongoing cost reduction initiatives are expected to offset higher energy costs.

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Recent Strategic Portfolio Actions

International Paper executed several important strategic milestones during the second quarter of 2026.

PS NA

On June 4, 2026, we completed the acquisition of North Pacific Paper Company (“NORPAC”), a portfolio company of One Rock Capital Partners, for $368 million, subject to post-closing adjustments. Located in Longview, Washington, NORPAC enhances International Paper's ability to serve growing demand for lightweight, high-performance packaging grades, improves service levels for customers on the West Coast, and strengthens our overall system position. Shortly before closing, a tragic industrial accident occurred at the adjacent Nippon Dynawave Packaging facility resulting in multiple fatalities and injuries. The mill’s production was temporarily slowed during the investigation as the mill is partially reliant on the Nippon facility for certain utilities. We responded quickly to address the reduced steam supply from their facility and mill operations have returned to pre-incident levels.

We also completed the conversion of the No. 16 paper machine at our Riverdale Mill in Selma, Alabama, from producing uncoated freesheet paper to manufacturing containerboard. This $250 million investment is an important step in optimizing our manufacturing footprint, improving mill reliability and better servicing customers. We expect the machine to continue ramping up production throughout the remainder of the year and reach full operating capacity by first quarter 2027.

PS EMEA

The Company continues to execute strategic capital projects designed to enhance the efficiency, competitiveness, and long-term growth profile of our packaging operations.

At our mill in Lucca, Italy, we are modernizing the recycled containerboard platform through the replacement of an existing paper machine with a new lightweight machine. The investment is expected to improve fiber yield, reduce energy consumption, and enhance the mill's sustainability performance while increasing overall operating efficiency. The project is expected to strengthen our ability to serve our integrated converting network and remains on track for startup during the third quarter.

In Germany, we are advancing our cost optimization strategy by consolidating production volumes from smaller facilities into a more modern and efficient plant. This initiative is consistent with our lighthouse operating model in North America and is expected to maintain overall production capacity while improving asset utilization, reducing fixed costs, and enhancing our competitive cost position.

In Romania, we are expanding capacity within an existing operation to support customer demand and capture growth opportunities in Eastern Europe. The region continues to represent one of the fastest-growing markets within our portfolio, and the investment is expected to enhance our ability to serve customers while supporting long-term volume growth.

These strategic portfolio actions reflect the Company's ongoing efforts to strengthen its packaging netwo

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Information relating to quantitative and qualitative disclosures about market risk is shown on page 54 of International Paper’s Annual Report, which information is incorporated herein by reference. There have been no material changes in the Company’s exposure to market risk since December 31, 2025.

Evaluation of Disclosure Controls and Procedures:

Disclosure controls and procedures are controls and other procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), is recorded, processed, summarized and reported (and accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure) within the time periods specified in the SEC’s rules and forms. As of the end of the period covered by this Form 10-Q, we conducted an evaluation, under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures pursuant to Rules 13a-15 and 15d-15 of the Exchange Act. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of June 30, 2026 (the end of the period covered by this Form 10-Q).

Changes in Internal Control over Financial Reporting:

Other than the previously disclosed integration-related changes associated with the acquisition of DS Smith, there were no changes to the Company’s internal control over financial reporting during the quarter ended June 30, 2026, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1.****LEGAL PROCEEDINGS

A discussion of material developments regarding certain legal proceedings involving the Company occurring in the period covered by this Form 10-Q is found in Note 14 - Commitments and Contingencies of the Condensed Notes to the Consolidated Financial Statements in this Form 10-Q, which is incorporated by reference herein. Except as set forth in Note 14 – Commitments and Contingencies of the Condensed Notes to the Consolidated Financial Statements in this Form 10-Q, 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.

There have been no material changes from the risk factors disclosed in our Annual Report on Form 10-K (Part I, Item 1A) for the period ended December 31, 2025.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS.

(a) 31,836 shares were acquired from employees or members of our Board as a result of share withholdings to pay income taxes under the Company's 2024 Long-Term Incentive Compensation Plan, approved and effective as of May 13, 2024. During these periods, no shares were purchased under our share repurchase program, which does not have an expiration date. On October 11, 2022, our Board increased the authorization to repurchase shares up to a total of $3.35 billion shares. As of June 30, 2026, approximately $2.96 billion aggregate shares of our common stock remained authorized for repurchase under this Board authorization.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

(a) Not applicable

(b) Not applicable.

(c) During the quarter ended June 30, 2026, 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.

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ITEM 6. EXHIBITS

** Filed herewith*

*** Furnished herewith*

+ Management contract or compensatory plan or arrangement.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.