International Paper : FY 2024 Annual Report

Published: 2025-04-01 10:21:10 ET IP

2024 Annual Report

A message from our CEO

Dear Shareholders,

2024 was a transformative year for International Paper. I was graciously welcomed by the team in May and together we embarked on a journey to reshape our company by embracing a customer-centric strategy to drive profitable growth and enhance our position as the leader in sustainable packaging solutions. We adopted a disciplined 80/20 performance system and began focusing on what matters most-reducing complexity, removing costs and aligning resources to delight our customers. Grounded in our values of safety, ethics and excellence, we restructured our corporate organization, optimized operations, executed our box go-to-market strategy and made targeted investments to improve reliability and better serve our customers.

Our 2024 results reflect our strategic focus on customer excellence and profitable growth. Our customer service performance improved significantly as we operationalized reliability improvements. We launched 80/20 "lighthouses" at select box plants to pilot new ways of operating our facilities. To date, these lighthouses have achieved 20% productivity gains, positively impacting our service reliability and cost position. We will expand and scale this approach to approximately 60 box plants in 2025. We expect these improvements will be foundational to drive future results.

Looking ahead, we will continue our transformational journey in 2025, both in North America and Europe. Earlier this year, we welcomed DS Smith to the IP family, which expanded our capabilities and increased our presence with customers in North America and EMEA. We expect that our combination will result in significant opportunities for driving innovation and service, and for achieving efficiencies for an advantaged cost position. We have an ambitious pipeline of capital projects planned that will optimize our box system, improve mill reliability and drive market share growth. We will aim to achieve these goals while accelerating synergies from the DS Smith acquisition. We also continue to explore strategic options for our Global Cellulose Fibers business.

I am proud of our team's progress and believe we have the right strategy to thrive through the inevitable fluctuations in the economic landscape.

We have the people, assets, and position to win in an attractive market that thrives on innovation and service. Through our sustainable packaging solutions, we help make the world safer and more productive. Ultimately the underlying stability of our industry and the need for sustainable packaging across the globe will continue to generate ongoing demand.

International Paper has an exceptional team dedicated to winning. As we execute with excellence, I am confident that our actions in 2025 will drive improvements that create significant value for our employees, customers and shareholders.

Thank you for your continued support.

Sincerely,

Andy Silvernail

Chairman and CEO International Paper

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

☒

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

For the fiscal year ended 12/31/2024 or

☐

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

For the transition period from - to -

Commission File No. 1-3157

INTERNATIONAL PAPER COMPANY

(Exact name of registrant as specified in its charter)

New York

13-0872805

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

6400 Poplar Avenue Memphis, Tennessee

(Address of principal executive offices)

38197

(Zip Code)

Registrant's telephone number, including area code: 901 419-9000

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

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Common Shares

New York Stock Exchange

Common Shares

IPC

London Stock Exchange

Securities Registered Pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ý No ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes ¨ No ý

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒

Accelerated filer Non-accelerated filer Smaller reporting company Emerging growth company ☐ ☐ ☐ ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13 (a) of the Exchange Act. o

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

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

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ¨

The aggregate market value of the Company's outstanding common stock held by non-affiliates of the registrant, computed by reference to the closing price as reported on the New York Stock Exchange, as of the last business day of the registrant's most recently completed second fiscal quarter (June 30, 2024) was approximately $14,910,126,297.

The number of shares outstanding of the Company's common stock as of February 14, 2025 was 526,125,614.

Documents incorporated by reference:

Portions of the registrant's proxy statement filed within 120 days of the close of the registrant's fiscal year in connection with registrant's 2025 annual meeting of shareholders are incorporated by reference into Part III of this Form 10-K.

PART I.

ITEM 1.

BUSINESS.

General

Human Capital

Competition and Costs

Marketing and Distribution

Description of Principal Products

Government Regulation

Environmental Protection

Climate Change

Raw Materials

Information About Our Executive Officers

Forward-looking Statements

ITEM 1A.

RISK FACTORS.

ITEM 1B.

UNRESOLVED STAFF COMMENTS.

ITEM 1C.

CYBERSECURITY.

ITEM 2.

PROPERTIES.

Mills and Plants

Capital Investments and Dispositions

ITEM 3.

LEGAL PROCEEDINGS.

ITEM 4.

MINE SAFETY DISCLOSURES.

PART II.

ITEM 5.

MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED

STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY

SECURITIES.

ITEM 6.

RESERVED

ITEM 7.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS.

Executive Summary

Results of Operations

Description of Business Segments

Business Segment Results

Liquidity and Capital Resources

Critical Accounting Policies and Significant Accounting Estimates

Legal Proceedings

Recent Accounting Developments

Effect of Inflation

Foreign Currency Effects

Market Risk

ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET

RISK.

ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Report of Management on Financial Statements, Internal Control over

Financial Reporting and Internal Control Environment and Board of

Directors Oversight

Reports of Deloitte & Touche LLP, Independent Registered Public

Accounting Firm

Consolidated Statement of Operations

Consolidated Statement of Comprehensive Income

Consolidated Balance Sheet

Consolidated Statement of Cash Flows

Consolidated Statement of Changes in Equity

Notes to Consolidated Financial Statements

ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON

ACCOUNTING AND FINANCIAL DISCLOSURE.

ITEM 9A.

CONTROLS AND PROCEDURES.

ITEM 9B.

OTHER INFORMATION.

ITEM 9C.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT

INSPECTIONS.

PART III.

ITEM 10.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

ITEM 11.

EXECUTIVE COMPENSATION.

ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND

MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND

DIRECTOR INDEPENDENCE.

ITEM 14.

PRINCIPAL ACCOUNTANT FEES AND SERVICES.

PART IV.

ITEM 15.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

Additional Financial Data

ITEM 16.

FORM 10-K SUMMARY.

104

SIGNATURES.

105

APPENDIX I

2024 LISTING OF FACILITIES.

A-1

APPENDIX II

2024 CAPACITY INFORMATION.

A-3

PART I.

ITEM 1. BUSINESS

GENERAL

International Paper Company (the "Company," "International Paper" or "IP", which may also be referred to as "we" or "us") is a global leader in sustainable packaging solutions. We produce renewable fiber-based packaging and pulp products with manufacturing operations in North America, Latin America, Europe and North Africa. We are a New York corporation, incorporated in 1941 as the successor to the New York corporation of the same name organized in 1898. You can learn more about us by visiting our website atwww.internationalpaper.com.

In the United States, at December 31, 2024, the Company operated 22 pulp and packaging mills, 157 converting and packaging plants, 16 recycling plants and three bag facilities. Production facilities at December 31, 2024 in Canada, Europe, North Africa and Latin America included four pulp and packaging mills, 36 converting and packaging plants, and two recycling plants. We operate a packaging products distribution business principally through six branches in Asia. Substantially all of our businesses have experienced, and are likely to continue to experience, cycles relating to industry capacity and general economic conditions.

We are guided by our core values. We do the right things, in the right ways, for the right reasons, all of the time - this is The IP Way. Our overarching values are safety, ethics, and excellence.

• Safety - Above all else, we care about people. We look out for each other to ensure everyone returns home safely each day.

• Ethics - We act honestly and operate with integrity and respect. We promote a culture of openness and accountability.

• Excellence - We set high expectations and aim to deliver outstanding results for each other, our customers and our shareholders.

For management and financial reporting purposes, our businesses are separated into two segments: Industrial Packaging and Global Cellulose Fibers. A description of these business segments can be found on page 42 of Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

In 2024, International Paper made significant strides to further enhance our performance-driven culture that we believe will enable us to create significant value for our employees, customers and share owners. In April 2024, International Paper announced a proposed business combination with DS Smith Plc ("DS Smith"), a global packaging, paper and recycling company and leading provider of sustainable fiber-based packaging headquartered in England in an all-stock transaction. This highly complementary business combination is designed to create a truly sustainable packaging solutions leader that can serve a broad set of customers across a wide range of attractive and growing end-markets to generate significant shareholder value. Shareholders of DS Smith and International Paper overwhelmingly approved the business combination at separate meetings in October 2024. On January 24, 2025, the Company announced plans to divest plants located in Mortagne, Saint-Amand, and Cabourg (France), Ovar (Portugal) and Bilbao (Spain) in connection with the European Commission's clearance of the business combination. The business combination closed on January 31, 2025. Thereafter, the Company obtained a secondary listing of International Paper common stock on the London Stock Exchange (LSE: IPC) and established a Europe, Middle East and Africa ("EMEA") headquarters in DS Smith's existing main office in London. DS Smith re-registered as DS Smith Limited, a private limited company effective on February 5, 2025.

In the third quarter of 2024, the Company also began implementing an 80/20 strategic approach to drive transformational performance. The 80/20 approach suggests that 80% of our results come from 20% of efforts. As applied to our business, the approach is used to determine the most impactful areas to focus on. Through the 80/20 strategic approach, we intend to deliver profitable market share growth by striving to be the lowest-cost producer and the most reliable and innovative sustainable packaging solutions provider to our customers across North America and EMEA. As part of the Company's 80/20 strategic approach, the Company intends to guide investments and align resources to win with our most strategic customers, while reducing complexity and cost across the Company.

To that end, the Company initiated a corporate overhead restructuring plan in the third quarter of 2024 aimed at better aligning our workforce with the needs of the business and our customers, optimizing our organizational structure and reducing operating costs. Additionally, we committed to investing to strengthen our most competitive and strategic assets and closed facilities to structurally reduce operating costs. Further, in October 2024, we announced that we are exploring strategic options for our Global Cellulose Fibers business.

These significant undertakings follow the September 2023 completion of the sale of our 50% equity interest in Ilim S.A. ("Ilim"), the sale of all of our Ilim Group shares (constituting a 2.39% stake) and divestment of other non-material residual interests associated with Ilim. Ilim was a joint venture that operated a pulp and paper business in Russia and has subsidiaries including Ilim Group. Following the completed sales, we no longer have an interest in Ilim or any of its subsidiaries, and no longer have any investments in Russia. As a result, all current and historical results of the Ilim investment reportable segment are presented as Discontinued Operations, net of taxes. See discussion in Note 10 - Equity Method Investments on page 75 of Item 8. Financial Statements and Supplementary Data.

We remain confident that the initiatives undertaken as part of our transformational journey in 2024 will unlock substantial value at IP and strengthen the Company for our employees, customers and shareholders.

From 2020 through 2024, International Paper's capital spending approximated $4.3 billion, excluding mergers and acquisitions. These expenditures reflect our continuing efforts to use our capital strategically to improve product quality and environmental performance, as well as lower costs, maintain reliability of operations and deploy strategic capital for capacity expansion. Capital spending in 2024 was approximately $921 million and is expected to be approximately $1.2 billion in 2025. You can find more information about capital spending on page 46 of Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

Discussions of acquisitions can be found in Note 7 Acquisitions on page 72 of Item 8. Financial Statements and Supplementary Data.

You can find discussions of restructuring charges and other special items on page 37 of Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

Throughout this Annual Report on Form 10-K, we "incorporate by reference" certain information in parts of other documents filed with the Securities and Exchange Commission ("SEC"). The SEC permits us to disclose important information by referring you to those documents. Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and proxy statements, along with all other reports and any amendments thereto filed with or furnished to the SEC, are publicly available free of charge on the Investors section of our website atwww.internationalpaper.comas soon as reasonably practicable after we electronically file such material

with, or furnish it to, the SEC. We encourage you to refer to such information.

Our website contains a significant amount of information about the Company, including our SEC filings and financial and other information for investors. The information that we post on our website could be deemed to be material information. We encourage investors, the media, and others interested in the Company to visit this website from time to time, as information is updated and new information is posted. The information contained on or connected to our website, however, is not incorporated by reference into this Annual Report on Form 10-K and should not be considered part of this or any other report that we file with or furnish to the SEC. Our internet address is included as an inactive textual reference only.

HUMAN CAPITAL

EMPLOYEES

As of December 31, 2024, we have approximately 37,000 employees, nearly 31,000 of whom are located in the United States. Of our U.S. employees, 21,000 are hourly, with unions representing approximately 13,000 employees. Of this number, 9,600 are represented by the United Steelworkers union ("USW").

International Paper, the USW, and several other unions have entered into five master agreements covering various U.S. mills and converting facilities. Four of the master agreements are with the USW and include members from the International Association of Machinists and Aerospace Workers, International Brotherhood of Electrical Workers, United Food and Commercial Workers International Union and Workers Unite at certain U.S. mills and converting facilities. The Company also has a master agreement with District Counsel 2, which is affiliated with the Printing Packaging & Production Workers Union of North America that covers additional converting facilities. Individual facilities continue to have local agreements for subjects not covered by the master agreements. If local facility agreements are not successfully negotiated at the time of expiration, under the terms of the master agreements, the local agreements will automatically renew with the same terms in effect.

SAFETY AND WELLBEING

At International Paper, we prioritize the safety and well-being of every employee and contractor. Safety is core to who we are and how we operate - at IP we strive to put safety above all else. To achieve this, we are cultivating a resilient safety culture where every team member is empowered to stop work they

believe is unsafe. We work tirelessly to anticipate and address unexpected events by incorporating layers of protection, continuously enhancing our systems and engaging all team members in learning events to prevent injuries before they take place. In 2024, we engaged an independent safety consultant firm to help the Company improve workplace safety performance through risk assessments, safety culture development and programs designed to reduce accidents and injuries. We launched a Company-wide safety culture survey in 2024 to all U.S.-based employees. Results of the survey will be analyzed in 2025 with the goal of learning, growing and aspiring to achieve our Vision 2030 goal to create a 100% injury-free workplace for our team members and contractors.

We believe workplace safety includes psychological and emotional safety. At International Paper we also care deeply about the mental, emotional, physical and professional wellbeing of our employees by providing an Employee Assistance Program ("EAP") at no cost to employees and family members. Our EAP offers coaching and counseling sessions aimed at problem solving, achieving goals, and dealing with stress and anxiety management through resilience. We embrace a holistic wellness approach providing employees with resources on incorporating wellness habits into their daily lives.

HUMAN CAPITAL MANAGEMENT

The attraction, retention and development of our employees is critical to our success. We create a positive employee experience that begins at onboarding. Our Human Resources Talent Management Team hosts online Global New Employee Orientation for employees and each business conducts onsite new hire integration training unique to its business and/or facility. This experience continues through our continuous learning, development and performance management programs. We provide continuing education courses that are relevant to our industry and job functions within the Company, including both instructor-led and online training through our Learning Management System ("LMS") MyLearning platform. Across the enterprise in 2024, employees completed 2.7 million learning activities through our platform.

In addition, we have created learning paths for specific positions that are designed to encourage an employee's advancement and growth within our organization, such as our REACH (Recruit, Engage, Align College Hires) program and Global Manufacturing Training Initiative programs. Through REACH we recruit and develop early-career engineers and safety professionals for our U.S. mills, preparing them to become future leaders. We invest in the growth and development of our employees by providing a multi-dimensional approach to learning that empowers, intellectually grows and professionally develops our employees. Our Global Manufacturing Training Initiative provides training services to hourly operations and maintenance employees in our mills in a standardized and structured manner. On the converting side of our business, more than 200 front line and future leaders participated in our multi-day in-person Leadership Application and Professional Development and Manufacturing Management Associate Programs during 2024.

We develop leaders through our IP Leadership Institute offering a broad range of LMS virtual and in person resources, courses and workshops for individual contributors, people leaders and teams. We also offer peer mentoring and leadership and career development training to support and develop our employees.

We help our employees better themselves by offering tuition reimbursement to employees to pursue additional education to prepare for other positions at the Company. We also provide student loan assistance to help employees repay qualified student loans. These resources provide employees with the skills and support they need to achieve their career goals, build management skills and become leaders within our Company.

The labor market for both hourly and salaried workers continues to be competitive. For additional information regarding risks related to the current labor market, see Item 1A. Risk Factors - We operate in a challenging market for talent and my fail to attract and retain qualified personnel, including key management personnel.

COMPENSATION AND BENEFITS

We view compensation and benefits as part of how we attract, engage and retain our talented workforce. We do so by rewarding performance while ensuring competitive compensation in our local markets around the world. We continually evaluate our compensation and benefits so that we offer optimal compensation programs and remain a leading employer of choice in the areas in which we operate.

TEAM-ORIENTED CULTURE

As a result of our recent business combination with DS Smith, the Company has significantly expanded our global footprint. The business combination not only enhances our operational capabilities but also enriches our cross-culturalism, bringing together a broader range of perspectives, experiences, and

talents. With the integration of DS Smith, we are dedicated to ensuring our efforts to embrace a team-oriented culture are effectively extended across our newly expanded organization and guided by our commitment to equal employment opportunity for all. The Company is focused on promoting a culture that leverages the talents of all employees, and implementing practices that attract, recruit and retain a broad array of talent. We believe our efforts will lead to improved business results, as teams with a broad range of perspectives drive innovation, enhance decision-making, and better reflect the markets we serve.

The Company supports enterprise-wide employee-led networking circles ("ENCs") that are open to all employees and provide a forum to communicate and exchange ideas and build a network of relationships across the Company. Our ENCs help educate and motivate our global workforce, strengthening our business practices.

The make-up of our Board of Directors and Executive Leadership Team ("ELT") reflects our efforts to seek the most qualified board candidates with a broad range of experiences and perspectives.

Our Executive Leadership Team is currently comprised of our chief executive officer, one executive vice president and four senior vice presidents who oversee crucial functions and business units within the Company.

By virtue of the Company's secondary listing on the London Stock Exchange, International Paper is now subject to certain board composition disclosure requirements under the UK Listing Rules (the "UKLR") established by the UK Financial Conduct Authority (the "FCA"). The information below is disclosed solely in order to comply with UKLR 14.3.30R and for no other purpose. The required disclosure below is set out as of December 31, 2024, and the data provided in relation to the Board and executive officers has been collected through the annual Directors and Officers' questionnaire.

As of December 31, 2024, the Company can confirm the following in relation to each of the following reporting standards contained in the UKLR:

UKLR Reporting Standards (the "Standards") Implementation Result

Progress

At least 40% of the Board are women.

Not met

30% of the Board were women.

At least one member of the Board is from an ethnic minority.

Met There were two ethnic minority men on the Board.

At least one of the senior Board positions (Chair, CEO, Senior Independent Director (SID) or CFO) is a woman.

Not met

The senior Board positions of Chairman, CEO, CFO and Lead Director are currently held by men. Until the individuals in those positions retire or otherwise leave, the Company will not meet the Standards.

An additional director David A. Robbie was appointed to the Board effective February 11, 2025. Mr. Robbie's appointment does not affect the result of any of the Standards set out above.

Disclaimer

International Paper Company published this content on April 01, 2025, and is solely responsible for the information contained herein. Distributed via , unedited and unaltered, on April 01, 2025 at 14:20 UTC.