International Paper Reports 2015 4Q, Full-Year Earnings

International Paper reported full-year 2015 net earnings attributable to International Paper of $938 million ($2.23 per share) compared with $555 million ($1.29 per share) in full-year 2014. In the fourth quarter 2015, the company reported net earnings of $178 million ($0.43 per share) compared with $134 million ($0.32 per share) in the fourth quarter of 2014.

Full-year 2015 operating earnings were $1.5 billion ($3.65 per share) compared with $1.3 billion ($3.00 per share) in 2014. Operating earnings in the fourth quarter of 2015 totaled $361 million ($0.87 per share) compared with $227 million ($0.53 per share) in the fourth quarter of 2014.

Annual net sales totaled $22.4 billion in 2015 compared with $23.6 billion in 2014. Quarterly net sales were $5.4 billion in the fourth quarter of 2015 compared with $5.9 billionin the fourth quarter of 2014. Revenues continue to be negatively impacted by foreign exchange translation.

Full-year 2015 business segment operating profits were $2.7 billion compared with $2.8 billion in 2014. Business segment operating profits in the fourth quarter of 2015 were $623 million, compared with $694 million in the fourth quarter of 2014.

Free cash flow was $1.8 billion for the full-year 2015 and $501 million in the fourth quarter. Cash from operations was $2.6 billion ($3.3 billion excluding the pension contribution) for the full-year 2015 and $990 million for the fourth quarter of 2015.

“International Paper finished the year strong with record ROIC of 11%, which was well above our cost of capital and the highest earnings per share in 20 years primarily due to robust performance in our NA Industrial Packaging business and from our Ilim JV,” said Mark Sutton, chairman and CEO. “As we move into 2016, we remain confident in our ability to execute well, generate strong free cash flow and deploy capital to create shareholder value.”

Industrial Packaging operating profits in the fourth quarter of 2015 were $441 million ($304 million including special items) compared with $553 million in the third quarter of 2015. In North America, box shipments were down due to three fewer shipping days, but this was partially offset by seasonally stronger daily shipments. Volume and price for containerboard exports were also lower. Higher planned maintenance outage costs impacted earnings as well, partially offset by lower input costs.

Printing Papers operating profits were $144 million in the fourth quarter of 2015 versus $179 million in the third quarter of 2015. North America earnings were lower mostly due to higher maintenance outage spending, costs associated with severe flooding in the Southeast, and seasonally lower sales volumes. In Brazil, earnings improved primarily due to seasonal volume increases and mix improvements. Earnings in Europe improved mainly due to lower planned maintenance outage costs.

Consumer Packaging operating profits were $38 million ($35 million including special items) in the fourth quarter of 2015 compared with $41 million (a loss of $153 millionincluding special items) in the third quarter of 2015. In North America, higher planned maintenance outage costs and a seasonally weaker market were partially offset by lower input costs. Earnings in Europe were slightly higher due to favorable pricing, input costs and lower planned maintenance outage costs. The sale of our Sun JV interest was completed at the start of the fourth quarter.

International Paper recorded Ilim joint venture equity earnings of $34 million in the fourth quarter of 2015 compared with an equity loss of $9 million in the third quarter of 2015. Primarily due to Ilim’s U.S. dollar denominated net debt, the company recognized a non-cash after-tax foreign exchange loss of $19 million in the fourth quarter of 2015 ($0.05 per share), compared with an after-tax loss of $65 million in the third quarter of 2015 ($0.15 per share). The JV recorded solid operational EBITDA results for the quarter due to increased volumes on export sales and strong operational performance.