MEMPHIS, Tenn., April 30, 2025 /PRNewswire/ -- International Paper (NYSE: IP; LSE: IPC) (the "Company") today reported first quarter 2025 net earnings (loss) of $(105) million, or $(0.24) per diluted share, and adjusted operating earnings (non-GAAP) of $101 million, or $0.23 per diluted share. First quarter net sales were $5.9 billion in 2025 and $4.6 billion in 2024.

First quarter net earnings includes a pre-tax charge of $271 million for accelerated depreciation and restructuring charges related to the previously announced closure of the Company's Red River containerboard mill in Campti, Louisiana.

"Reflecting on my first year, I am proud of the International Paper team for embracing transformational change and achieving tremendous progress together," said Andy Silvernail, Chief Executive Officer. "We deployed 80/20, focusing on our most valuable customers and aligning our resources accordingly. We launched key initiatives to drive step-change improvement in our performance, and invested to grow in the most attractive markets. Most recently, we welcomed our DS Smith colleagues and outlined our strategic direction at our Investor Day."

"This year's first quarter results reflect higher sales and earnings, primarily driven by the DS Smith acquisition, sales price increases, and cost out," Silvernail added. "We also made good progress on growing our market position in our North American packaging business. Overall market demand, however, was softer than anticipated in both of our regions. As expected, our free cash flow was temporarily impacted by transformation costs and incentive compensation payout. In this uncertain macroeconomic environment, we are focusing on actions within our control as we accelerate our 80/20 execution to drive commercial excellence and cost out across the company."

                                                             
     
       
       Diluted Net EPS and Adjusted Operating EPS

                                                                          ---



                                                                                                                    First          Fourth          First
                                                                                                         Quarter          Quarter          Quarter
                                                                                                                     2025             2024            2024



     Net Earnings (Loss) Per Share                                                                               $(0.24)         $(0.42)          $0.16



     Add Back - Non-Operating Pension Expense (Income)                                                              0.01           (0.02)         (0.04)



     Add Back - Net Special Items Expense (Income)                                                                  0.57             0.52            0.05



     Income Taxes - Non-Operating Pension and Special Items                                                       (0.11)          (0.10)



     Adjusted Operating Earnings Per Share*                                                                        $0.23          $(0.02)          $0.17




                                                               
     
       
              Select Financial Measures



                                                                          ---


     (In millions)                                                                                                 First          Fourth          First
                                                                                                         Quarter          Quarter          Quarter
                                                                                                                     2025             2024            2024



     Net Sales                                                                                                    $5,901           $4,580          $4,619



     Net Earnings (Loss)                                                                                           (105)           (147)             56



       Adjusted Operating Earnings*                                                                                  101              (7)             61



     Cash Provided By (Used For) Operations                                                                        (288)             397             395



     Free Cash Flow**                                                                                              (618)             137             144

* Adjusted operating earnings and adjusted operating earnings per share are non-GAAP financial measures defined as net earnings
(loss) (a GAAP measure) excluding net special items and non-operating pension expense (income). Net earnings (loss) and
diluted earnings (loss) per share are the most directly comparable GAAP measures. The Company calculates adjusted operating
earnings (non-GAAP) by excluding the after-tax effect of non-operating pension expense (income) and net special items from
the earnings (loss) reported under U.S. GAAP. Adjusted operating earnings per share is calculated by dividing adjusted
operating earnings by the diluted average shares of common stock outstanding. Management uses these measures to focus on on-
going operations, and believes that such measures are useful to investors in assessing the operational performance of the
Company and enabling investors to perform meaningful comparisons of past and present consolidated operating results from
continuing operations. For discussion of net special items and non-operating pension expense (income), see the disclosure
under Effects of Net Special Items and Consolidated Statement of Operations and related notes included later in this release. A
reconciliation of net earnings (loss) to adjusted operating earnings and diluted earnings (loss) per share to adjusted
operating earnings per share, and an explanation of why we believe these non-GAAP financial measures provide useful
information to investors, are included later in this release.

** Free cash flow is a non-GAAP financial measure, which equals cash provided by (used for) operations (a GAAP measure) less cash
invested in capital projects. The most directly comparable GAAP measure is cash provided by (used for) operations. A
reconciliation of cash provided by (used for) operations to free cash flow and an explanation of why we believe this non-GAAP
financial measure provides useful information to investors are included later in this release.

SEGMENT INFORMATION
As a result of the completed acquisition of 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 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 previously reported Industrial Packaging business segment into the new Packaging Solutions EMEA business 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 business segment for all prior periods.

The following table presents net sales and business segment operating profit (loss), which is the Company's measure of segment profitability. Business segment operating profit (loss) is a measure reported to our management for purposes of making decisions about allocating resources to our business segments and assessing the performance of our business segments and is presented in our financial statement footnotes in accordance with ASC 280 - "Segment Reporting".First quarter 2025 net sales by business segment and operating profit (loss) by business segment compared with the fourth quarter of 2024 and the first quarter of 2024 are as follows:

                                                            
     
     
         Business Segment Results



                                                                  ---


     (In millions)                                                                      First         Fourth          First
                                                                            Quarter            Quarter         Quarter
                                                                                          2025            2024            2024



     
                Net Sales by Business Segment



     Packaging Solutions North America                                                 $3,702          $3,539          $3,486



     Packaging Solutions EMEA                                                           1,550             357             348



     Global Cellulose Fibers                                                              643             662             704



     Corporate and Inter-segment Sales                                                      6              22              81



     
                Net Sales                                                            $5,901          $4,580          $4,619



     
                Business Segment Operating Profit (Loss)



     Packaging Solutions North America                                                   $142            $228            $192



     Packaging Solutions EMEA                                                              46              19              24



     Global Cellulose Fibers                                                               17           (250)           (47)

Packaging Solutions North America business segment operating profit (loss) in the first quarter of 2025 was $142 million compared with $228 million in the fourth quarter of 2024. The first quarter of 2025 includes net sales of $127 million and business segment operating profit (loss) of $(9) million for the DS Smith North America business. For legacy IP North America Packaging, net sales were higher driven by higher sales prices for boxes partially offset by seasonally lower volumes. Cost of products sold was impacted by higher energy costs, lower recovered fiber costs and higher costs for goods and services. Selling and administrative expense was impacted by lower employee incentive compensation and medical benefit costs. Depreciation and amortization expense includes $193 million of accelerated depreciation associated with the previously announced closure of our Red River containerboard mill in Campti, Louisiana. Business segment operating profit (loss) includes an insurance reimbursement related to the Ixtac, Mexico box plant fire of $30 million in the first quarter of 2025 and $13 million in the fourth quarter of 2024.

Packaging Solutions EMEA business segment operating profit (loss) in the first quarter of 2025 was $46 million compared with $19 million in the fourth quarter of 2024. The first quarter of 2025 includes net sales of $1.2 billion and business segment operating profit (loss) of $13 million for the DS Smith EMEA business. For legacy IP EMEA Packaging, net sales were lower driven by lower sales prices. Cost of products sold was impacted by higher energy costs offset by a one-time energy credit received in the first quarter of 2025. Selling and administrative expense was impacted by lower overhead costs.

Global Cellulose Fibers business segment operating profit (loss) in the first quarter of 2025 was $17 million compared with $(250) million in the fourth quarter of 2024. Net sales were lower, reflecting lower average sales prices for fluff pulp and lower volumes for commodity pulp, partially offset by higher average sales prices for commodity pulp. Cost of products sold was impacted by lower operating costs driven by improved mill reliability, higher planned outage costs and higher energy costs. Selling and administrative expense was impacted by lower employee incentive compensation and medical benefit costs. Business segment operating profit was impacted by $215 million of accelerated depreciation expense in the fourth quarter of 2024 associated with the previously announced closure of the Georgetown, South Carolina pulp mill.

Cash used for operations during the first quarter of 2025 primarily reflects the timing of our annual incentive compensation payout and the payment of transaction costs associated with the closing of the DS Smith acquisition and other transformation related costs for a total impact of approximately $670 million. Additionally, first quarter of 2025 free cash flow reflects increased capital spending in line with our capital spending plan for 2025. The Company generated meaningful cash receipts outside of free cash flow through the sale of certain assets along with the receipt of insurance recoveries related to the Ixtac, Mexico box plant fire.

EFFECTS OF NET SPECIAL ITEMS
Net special items include items considered by management to not be reflective of the Company's underlying operations. Net special items in the first quarter of 2025 amount to a net after-tax charge of $204 million ($0.46 per diluted share) compared with a charge of $146 million ($0.42 per diluted share) in the fourth quarter of 2024 and a charge of $14 million ($0.04 per diluted share) in the first quarter of 2024. Net special items in all periods include the following charges (benefits):

                                                                 First Quarter 2025                            Fourth Quarter 2024                             First Quarter 2024



     (In millions)                                   Before Tax                    After Tax        Before Tax                    After Tax            Before Tax                After Tax



     DS Smith combination costs                            $221                          $183   (a)          $38                           $38     (a)             $5                        $4       (a)



     Severance and other costs                               83                            63   (b)          162                           122     (b)              8                         6       (b)



     Global Cellulose Fibers strategic options costs         12                             9   (a)            5                             4     (a)



     Environmental remediation adjustments                                                                  35                            26     (c)



     Legal reserve adjustments                                                                                                                                 10                         7       (d)



     Net (gain) loss on sale of fixed assets               (67)                         (51)  (e)         (58)                         (44)    (e)              5                         4       (e)



     Interest related to settlement of tax audits                                                                                                            (10)                      (7)      (f)



     
                 Total special items, net                $249                          $204               $182                          $146                    $18                       $14



     (a)   Transaction and other costs that the Company believes are not reflective of the Company's underlying operations. See notes (a),
            (b) and (d) on the Consolidated Statement of Operations.


     (b)   Severance and other costs associated with the Company's 80/20 strategic approach which includes the realignment of resources and
            mill strategic actions. See notes (c) and (e) of the Consolidated Statement of Operations.


     (c)   Environmental remediation adjustments associated with remediation work at a waste pit site at a mill acquired but never operated
            by the Company, and last utilized by the predecessor owner of the mill, and post-closure remediation work associated with mill
            strategic actions implemented in 2023.


     (d) 
     Legal reserve adjustment associated with a previously discontinued business.


     (e)   Net (gain) loss on the sale of fixed assets related to the sale of assets at our permanently closed Orange, Texas containerboard
            mill, miscellaneous land and other items that the Company does not believe are reflective of the Company's underlying
            operations. See note (f) of the Consolidated Statement of Operations.


     (f) 
     Interest income on tax overpayments in prior years associated with the settlement of certain tax audits.

EARNINGS WEBCAST
The Company will host a webcast today to discuss earnings and current market conditions, beginning at 10 a.m. ET (9 a.m. CT). All interested parties are invited to listen to the webcast via the Company's website by clicking on the Investors tab and going to the Events & Presentations page at https://www.internationalpaper.com/investors/events-presentations. A replay of the webcast will also be on the website beginning approximately two hours after the call.

Parties who wish to participate in the webcast via teleconference may dial +1 (646) 307-1963 or, within the U.S. only, (800) 715-9871, and ask to be connected to the International Paper first quarter earnings call. The conference ID number is 6499444. Participants should call in no later than 9:45 a.m. ET (8:45 a.m. CT). An audio-only replay will be available for ninety days following the call. To access the replay, dial +1 (609) 800-9909 or, within the U.S. only, (800) 770-2030 and when prompted for the conference ID, enter 6499444.

About International Paper
International Paper (NYSE: IP; LSE: IPC) is the global leader in sustainable packaging solutions. With company headquarters in Memphis, Tennessee, USA, and EMEA (Europe, Middle East and Africa) headquarters in London, UK, we employ more than 65,000 team members and serve customers around the world with operations in more than 30 countries. Together with our customers, we make the world safer and more productive, one sustainable packaging solution at a time. Net sales for 2024 were $18.6 billion. In 2025, International Paper acquired DS Smith creating an industry leader focused on the attractive and growing North American and EMEA regions. Additional information can be found by visiting internationalpaper.com.

Cautionary Statement Regarding Forward-Looking Statements
Certain statements in this press release that are not historical in nature may be considered "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements can be identified by the use of forward-looking or conditional words such as "expects," "anticipates," "believes," "estimates," "could," "should," "can," "forecast," "intend," "look," "may," "will," "remain," "confident," "commit" and "plan" or similar expressions. These statements are not guarantees of future performance and reflect management's current views and speak only as to the dates the statements are made and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in these statements. All statements, other than statements of historical fact, are forward-looking statements, including, but not limited to, statements regarding anticipated financial results, economic conditions, industry trends, future prospects and the anticipated benefits, execution and consummation of corporate transactions or contemplated acquisitions, including our acquisition of DS Smith Plc, subsequently re-registered as DS Smith Limited ("DS Smith"). Factors which could cause actual results to differ include but are not limited to: (i) our ability to consummate and achieve the benefits expected from, and other risks associated with, acquisitions, joint ventures, divestitures, spinoffs, capital investments and other corporate transactions, including, but not limited to, our business combination with DS Smith; (ii) our ability to integrate and implement our plans, forecasts, and other expectations with respect to the combined company, including in light of our increased scale and global presence; (iii) risks associated with our planned divestiture of five wholly-owned European subsidiaries required as a condition precedent to closing the DS Smith acquisition including achievement of negotiations, closing conditions and regulatory approvals and our failure to comply with the obligations associated therewith; (iv) risks with respect to climate change and global, regional, and local weather conditions, as well as risks related to our targets and goals with respect to climate change and the emission of greenhouse gases and other environmental, social and governance matters, including our ability to meet such targets and goals; (v) loss contingencies and pending, threatened or future litigation, including with respect to environmental related matters; (vi) the level of our indebtedness, including our obligations related to becoming the guarantor of the Euro Medium Term Notes (the "DSS EMTN Notes") as as result of our acquisition of DS Smith, risks associated with our variable rate debt, and changes in interest rates (including the impact of current elevated interest rate levels); (vii) the impact of global and domestic economic conditions and industry conditions, including with respect to current challenging macroeconomic conditions, inflationary pressures and changes in the cost or availability of raw materials, energy sources and transportation sources, supply chain shortages and disruptions, competition we face, cyclicality and changes in consumer preferences, demand and pricing for our products, and conditions impacting the credit, capital and financial markets; (viii) risks arising from conducting business internationally, domestic and global geopolitical conditions, military conflict (including the Russia/Ukraine conflict, the conflict in the Middle East, the further expansion of such conflicts, and the geopolitical and economic consequences associated therewith), changes in currency exchange rates, including in light of our increased proportion of assets, liabilities and earnings denominated in foreign currencies as a result of our business combination with DS Smith, trade policies (including but not limited to protectionist measures and the imposition of new or increased tariffs as well as the potential impact of retaliatory tariffs and other penalties including retaliatory policies against the United States) and global trade tensions, downgrades in our credit ratings, and/or the credit ratings of banks issuing certain letters of credit, issued by recognized credit rating organizations; (ix) the amount of our future pension funding obligations, and pension and healthcare costs; (x) the costs of compliance, or the failure to comply with, existing, evolving or new environmental (including with respect to climate change and greenhouse gas emissions), tax, trade, labor and employment, privacy, anti-bribery and anti-corruption, and other U.S. and non-U.S. governmental laws, regulations and policies (including but not limited to those in the United Kingdom and European Union); (xi) material disruption at any of our manufacturing facilities or other adverse impact on our operations due to severe weather, natural disasters, climate change or other causes; (xii) our ability to realize expected benefits and cost savings associated with restructuring initiatives; (xiii) cybersecurity and information technology risks, including as a result of security breaches and cybersecurity incidents; (xiv) our exposure to claims under our agreements with the Sylvamo Corporation; (xv) the qualification of the Sylvamo Corporation spin-off as a tax-free transaction for U.S. federal income tax purposes; (xvi) risks associated with our review of strategic options for our Global Cellulose Fibers business; (xvii) our ability to attract and retain qualified personnel and maintain good employee or labor relations; (xviii) our ability to maintain effective internal control over financial reporting; and (xix) our ability to adequately secure and protect our intellectual property rights. These and other factors that could cause or contribute to actual results differing materially from such forward-looking statements can be found in our press releases and reports filed with the U.S. Securities and Exchange Commission. In addition, other risks and uncertainties not presently known to the Company or that we currently believe to be immaterial could affect the accuracy of any forward-looking statements. The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

                                                               
              
                INTERNATIONAL PAPER COMPANY
                                                                
                Consolidated Statement of Operations
                                                                            Preliminary and Unaudited
                                                                     (In millions, except per share amounts)




                                                                                                                Three Months Ended               Three Months Ended
                                                                                                  
                March 31,                       December 31,


                                                                                          2025                                     2024                              2024


     
     
                Net Sales                                                             $5,901                                   $4,619                            $4,580


     
     
                Costs and Expenses


     
     Cost of products sold                                                               4,259                            (a)     3,424  (a)                        3,250   (a)


     
     Selling and administrative expenses                                                   530                            (b)       358  (b)                          521   (b)


     
     Depreciation and amortization                                                         571                            (c)       278  (c)                          499   (c)


     
     Distribution expenses                                                                 483                                      391                               348


     
     Taxes other than payroll and income taxes                                              93                            (d)        41                                34


     
     Restructuring charges, net                                                             83                            (e)         3  (e)                          162   (e)


     
     Net (gains) losses on sales of fixed assets                                          (67)                           (f)         5  (f)                         (58)  (f)


     
     Interest expense, net                                                                  81                                       46  (g)                           56


     
     Non-operating pension expense (income)                                                  3                                     (12)                              (8)


                    Earnings (Loss) Before Income Taxes and Equity Earnings
                     (Loss)                                                                (135)                                      85                             (224)


     
     Income tax provision (benefit)                                                       (31)                                      27                              (78)


     
     Equity earnings (loss), net of taxes                                                  (1)                                     (2)                              (1)


     
     
                Net Earnings (Loss)                                                   $(105)                                     $56                            $(147)


     
     
                Basic Earnings Per Common Share


     
     Net earnings (loss)                                                               $(0.24)                                   $0.16                           $(0.42)


                    Diluted Earnings Per Common Share


     
     Net earnings (loss)                                                               $(0.24)                                   $0.16                           $(0.42)


                    Average Shares of Common Stock Outstanding -Diluted                    437.6                                    348.5                             347.4




     The accompanying notes are an integral part of this Consolidated Statement of Operations.


                                                                                            (a) Includes a pre-tax charge of $70 million ($52 million after taxes) for the three months ended March 31, 2025 for the inventory
                                                                                                 step-up recognized in purchase accounting related to the DS Smith combination, a pre-tax charge of $10 million ($7 million
                                                                                                 after taxes) for the three months ended March 31, 2024 for a litigation reserve and a pre-tax charge of $35 million ($26
                                                                                                 million after taxes) for the three months ended December 31, 2024 for environmental remediation adjustments.


                                                                                            (b) Includes pre-tax charges of $101 million ($81 million after taxes), $5 million ($4 million after taxes) and $38 million (before
                                                                                                 and after taxes) for the three months ended March 31, 2025, March 31, 2024 and December 31, 2024, respectively, for transaction
                                                                                                 costs and integration costs associated with the DS Smith combination and pre-tax charges of $12 million ($9 million after
                                                                                                 taxes) and $5 million ($4 million after taxes) for the three months ended March 31, 2025 and December 31, 2024, respectively,
                                                                                                 for costs associated with our announced decision to explore strategic options for our Global Cellulose Fibers business.


                                                                                            (c) Includes pre-tax charges of $197 million ($148 million after taxes) and $233 million ($175 million after taxes) for the three
                                                                                                 months ended March 31, 2025 and December 31, 2024, respectively, for accelerated depreciation associated with our mill and
                                                                                                 80/20 strategic actions and a pre-tax charge of $5 million ($4 million after taxes) for the three months ended March 31, 2024
                                                                                                 for closure costs associated with our mill strategic actions.


                                                                                            (d) Includes a pre-tax charge of $50 million (before and after taxes) for the three months ended March 31, 2025 for a UK stamp tax
                                                                                                 associated with the DS Smith combination.


                                                                                            (e) Includes pre-tax charges of $83 million ($63 million after taxes), $3 million ($2 million after taxes) and $162 million ($122
                                                                                                 million after taxes) for the three months ended March 31, 2025, March 31, 2024 and December 31, 2024, respectively, for
                                                                                                 severance and other costs related to our mill strategic actions and 80/20 strategic approach.


                                                                                            (f) Includes pre-tax gains of $62 million ($47 million after taxes) and $54 million ($41 million after taxes) for the three months
                                                                                                 ended March 31, 2025 and December 31, 2024, respectively, for asset sales related to our permanently closed Orange, Texas
                                                                                                 containerboard mill and pre-tax gains of $5 million ($4 million after taxes) and $4 million ($3 million after taxes) for the
                                                                                                 three months ended March 31, 2025 and December 31, 2024, respectively, and a loss of $5 million ($4 million after taxes) for
                                                                                                 the three months ended March 31, 2024 related to miscellaneous land sales and other items.


                                                                                            (g) Includes pre-tax income of $10 million ($7 million after taxes) for the three months ended March 31, 2024 for interest income
                                                                                                 associated with the settlement of certain tax audits.

                                                
              
                INTERNATIONAL PAPER COMPANY
                                 
                Reconciliation of Net Earnings (Loss) to Adjusted Operating Earnings
                                                             Preliminary and Unaudited
                                                      (In millions, except per share amounts)




                                                                                                 Three Months Ended             Three Months Ended
                                                                                
                March 31,                  December 31,


                                                                                   2025                   2024                            2024


     
     
                Net Earnings (Loss)                                          $(105)                   $56                          $(147)


       Add back: Non-operating pension expense (income)                               3                   (12)                            (8)


       Add back: Net special items expense (income)                                 249                     18                             182


       Income taxes - Non-operating pension and special
        items                                                                      (46)                   (1)                           (34)


     
     
                Adjusted Operating Earnings                                    $101                    $61                            $(7)




                                                                                                 Three Months Ended             Three Months Ended
                                                                              
                March 31,                December 31,


                                                                                   2025                   2024                            2024


                    Diluted Earnings per Common Share as Reported               $(0.24)                 $0.16                         $(0.42)


       Add back: Non-operating pension expense (income)                            0.01                 (0.04)                         (0.02)


       Add back: Net special items expense (income)                                0.57                   0.05                            0.52


       Income taxes per share - Non-operating pension and
        special items                                                            (0.11)                                               (0.10)


                    Adjusted Operating Earnings per Share                         $0.23                  $0.17                         $(0.02)

Notes:

Adjusted Operating Earnings and Adjusted Operating Earnings Per Share are non-GAAP financial measures defined as net earnings (loss) (a GAAP measure) excluding net special items and non-operating pension expense (income). Net earnings (loss) and Diluted earnings (loss) per share are the most directly comparable
GAAP measures. The Company calculates Adjusted Operating Earnings (non-GAAP) by excluding the after-tax effect of non-operating pension expense (income) and net special items, as described in greater detail above, from the net earnings (loss) reported under U.S. GAAP. Adjusted Operating Earnings Per Share is
calculated by dividing Adjusted Operating Earnings by the diluted average shares of common stock outstanding. Management uses these non-GAAP financial measures to focus on on-going operations, and believes that such non-GAAP financial measures are useful to investors in assessing the operational performance
of the Company and enabling investors to perform meaningful comparisons of past and present consolidated operating results from continuing operations. The Company believes that these non-GAAP financial measures, viewed alongside the most directly comparable GAAP measures, provides for a more complete analysis
of the Company's results of operations.

Non-operating pension expense (income) represents amortization of prior service cost, amortization of actuarial gains/losses, expected return on assets and interest cost. The Company excludes these amounts from Adjusted Operating Earnings as the Company does not believe these items reflect ongoing operations.
These particular pension cost elements are not directly attributable to current employee service. The Company includes service cost in our non-GAAP financial measure as it is directly attributable to employee service, and the corresponding employees' compensation elements, in connection with ongoing operations.

                                                               
              
                INTERNATIONAL PAPER COMPANY
                                                                     
                Consolidated Balance Sheet
                                                                            Preliminary and Unaudited
                                                                                  (In millions)


                                                                                                                   March 31, 2025 December 31, 2024



     
                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                                                                                                                   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                                                              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 and Other Current Liabilities                                                                        6,544              4,065



     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                                             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                                                                                                            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                                                                          4,582              4,679



     Total Equity                                                                                                         18,092              8,173



     
                Total Liabilities and Equity                                                                           $41,168            $22,800

                                                                   
              
                INTERNATIONAL PAPER COMPANY
                                                                    
                Consolidated Statement of Cash Flows
                                                                                Preliminary and 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 expense (benefit), net                                                                         (74)                 (11)



     Restructuring charges, net                                                                                           83                     3



     Net (gains) losses on sales 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) Operating Activities                                                     (288)                  395



     
                Investment Activities



     Invested in capital projects                                                                                      (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 the period                                                                                           1,170                 1,113



     End of the period                                                                                                $1,156                $1,070


              
                INTERNATIONAL PAPER COMPANY
    Reconciliation of Cash Provided by Operations to Free Cash Flow
    Preliminary and Unaudited
    (In millions)




                                                                             
             
            Three Months Ended
                                                                             March 31,


                                                                                           2025                      2024



              
                Cash Provided By (Used For) Operating Activities             $(288)                     $395



              Adjustments:



              Cash invested in capital projects                                          (330)                    (251)



              
                Free Cash Flow                                               $(618)                     $144

Free cash flow is a non-GAAP financial measure which equals cash provided by (used for) operating activities less cash invested in capital projects. The most directly comparable GAAP measure is cash provided by operations. Management utilizes this measure in connection with managing our business and
believes that free cash flow is useful to investors as a liquidity measure because it measures the amount of cash generated that is available, after reinvesting in the business, to maintain a strong balance sheet, pay dividends, repurchase stock, service debt and make investments for future growth. It
should not be inferred that the entire free cash flow amount is available for discretionary expenditures.

The non-GAAP financial measures presented in this release have limitations as analytical tools and should not be considered in isolation or as a substitute for an analysis of our results calculated in accordance with GAAP. In addition, because not all companies use identical calculations, the Company's
presentation of non-GAAP financial measures in this release may not be comparable to similarly titled measures disclosed by other companies, including companies in the same industry as International Paper.

Management believes non-GAAP financial measures, when used in conjunction with information presented in accordance with GAAP, can facilitate a better understanding of the impact of various factors and trends on the Company's financial results. Management also uses these non-GAAP financial measures in
making financial, operating and planning decisions and in evaluating the Company's performance. Investors are cautioned to not place undue reliance on any non-GAAP financial measures used in this release.

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