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What changed in International Paper's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of International Paper's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+535 added−578 removedSource: 10-K (2026-02-27) vs 10-K (2025-02-21)

Top changes in International Paper's 2025 10-K

535 paragraphs added · 578 removed · 222 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeRobbie's appointment does not affect the result of any of the Standards set out above. 4 Table of Contents In accordance with UKLR 14.3.31R, and for no other purpose, numerical data on the ethnic background and the gender identity or sex of the individuals on the Company’s Board and in its executive management as of December 31, 2024 is set out below: Number of Board Members Percentage of the Board Number of senior positions on the Board (CEO, CFO, SID and Chair) 1 Number in executive management 2 Percentage of executive management Men 7 70% 3 3 5 83% Women 3 30% — 1 17% Not specified/prefer not to say — —% — — —% White British or other White (including minority white groups) 8 80% 2 6 100% Mixed multiple ethnic groups — —% — — —% Asian/Asian British — —% — — —% Black/African Caribbean/Black British 2 20% — — —% Other ethnic group including Arab — —% — — —% Not specified/prefer not to say — —% — — —% 1 The Company is reporting on the positions of CEO, CFO, Chairman of the Board and Lead Director positions. 2 Executive management is defined, in accordance with the UKLR, as International Paper’s Executive Leadership Team, including the Corporate Secretary. 3 Andrew K.
Biggest changeIn accordance with UKLR 14.3.31R, numerical data on the ethnic background and sex of the individuals on the Company’s Board and in its executive management as of December 31, 2025 is set out below: 6 Table of Contents Number of Board Members Percentage of the Board 1 Number of senior positions on the Board (CEO, CFO, SID and Chair) 2 Number in executive management 3 Percentage of executive management Men 7 70% 2 4 5 5 100% Women 3 30% 6 — 0 7 —% Not specified/prefer not to say — —% — — —% White British or other White (including minority white groups) 8 80% 2 5 100% Mixed multiple ethnic groups — —% — — —% Asian/Asian British — —% — — —% Black/African Caribbean/Black British 2 20% — — —% Other ethnic group including Arab — —% — — —% Not specified/prefer not to say — —% — — —% 1 Information presented in this column reflects only our non-employee directors and does not include our CEO. 2 The Company is reporting on the positions of CEO, CFO, Chairman of the Board and Lead Director. 3 Executive management is defined, in accordance with the UKLR, as International Paper’s Executive Leadership Team, which includes our Corporate Secretary. 4 Andrew K.
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.
ITEM 1. BUSINESS GENERAL DESCRIPTION OF BUSINESS 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 products with manufacturing operations in North America, Latin America, Europe and North Africa.
Company manufacturing processes involve discharges to water, air emissions, water intake and waste handling and disposal activities, all of which are subject to a variety of environmental laws and 6 Table of Contents regulations, along with requirements of environmental permits or analogous authorizations issued by various governmental authorities.
Company manufacturing processes involve discharges to water, air emissions, water intake and waste handling and disposal activities, all of which are subject to a variety of environmental laws and regulations, along with requirements of environmental permits or analogous authorizations issued by various governmental authorities.
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.
AVAILABLE INFORMATION Throughout this Annual Report on Form 10-K, we “incorporate by reference” certain information in parts of other documents filed with the U.S. Securities and Exchange Commission ("SEC"). The SEC permits us to disclose important information by referring you to those documents.
In each of the jurisdictions in which we operate, we are subject to a variety of laws and regulations governing various aspects of our business, including general business regulations as well as those governing the manufacturing, production, content, handling, storage, transport, marketing and sale of our products.
We operate our businesses and sell products globally. In each of the jurisdictions in which we operate, we are subject to a variety of laws and regulations governing various aspects of our business, including general business regulations as well as those governing the manufacturing, production, content, handling, storage, transport, marketing and sale of our products.
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.
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.
We maintain a portfolio of trademarks and service marks registered with the U.S. Patent and Trademark Office 5 Table of Contents and in certain foreign jurisdictions, unregistered trademarks, licenses, and internet domain names that we consider important to the marketing of our products and business.
We maintain a portfolio of trademarks and service marks registered with the U.S. Patent and Trademark Office and in certain foreign jurisdictions, unregistered trademarks, licenses, and internet domain names that we consider important to the marketing of our products and business.
The Company has been named as a potentially responsible party ("PRP") in environmental remediation actions under various federal and state laws, including the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended ("CERCLA"). For additional information regarding certain remediation actions, see Note 13 Commitments and Contingent Liabilities of Item 8.
The Company has been named as a potentially responsible party ("PRP") in environmental remediation actions under various federal and state laws, including the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended ("CERCLA"). For additional information regarding certain remediation actions, see 8 Table of Contents Note 14 Commitments and Contingent Liabilities of Item 8.
The Company also relies on trade secret and other confidential information protection for manufacturing processes, product specifications, formulae, analyses, market information, forecasts, and other competitively sensitive information. COMPETITION AND COSTS The pulp and packaging sectors are large and fragmented, and the areas into which we sell our principal products are very competitive.
The Company also relies on trade secret and other confidential information protection for manufacturing processes, product specifications, formulae, analyses, market information, forecasts, and other competitively sensitive information. COMPETITION AND COSTS The packaging sector is large and fragmented, and the areas into which we sell our principal products are very competitive.
To help inform and prioritize the focus of our sustainability strategy, we have engaged with internal and external stakeholders using a variety of methods, assessed key issues and associated risks and opportunities, and incorporated sustainability considerations into our processes.
To help inform and prioritize the focus of our sustainability strategy, we have engaged with internal and external stakeholders, assessed key issues, associated risks and opportunities, and incorporated sustainability considerations into our processes.
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.
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 2025, employees completed nearly 830,000 learning activities through our platform.
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.
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 At International Paper, we strive to create a high-trust, high-performance culture.
Financial Statements and Supplementary Data on pages 79 through 83. For additional information regarding risks associated with environmental matters, see
Financial Statements and Supplementary Data . For additional information regarding risks associated with environmental matters, see
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.
We look out for each other to ensure everyone is physically and emotionally safe. • Ethics – We act honestly and operate with integrity and respect. We promote a culture of transparency and accountability. • Excellence – We set high expectations and deliver outstanding results for each other, our customers and our shareholders.
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.
We support enterprise-wide employee-led resource groups (“ERGs”) 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 ERGs are designed to help educate and motivate our global workforce, strengthening our business practices.
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.
By virtue of our 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 required under UKLR 14.3.30R.
Our products compete with similar products produced by other forest products companies. We also compete, in some instances, with companies in other industries and against substitutes for wood-fiber products. Many factors influence the Company’s competitive position, including price, cost, product quality and services.
Our products compete with similar products produced by other forest products companies. We also compete, in some instances, with companies in other industries and against substitutes for wood-fiber products. Many factors influence the Company’s competitive position, including price, cost, product quality and services. You can find more information about the impact of these factors on operating profits in Item 7.
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.
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.
MARKETING AND DISTRIBUTION The Company sells products directly to end users and converters, as well as through agents, resellers and distributors. DESCRIPTION OF PRINCIPAL PRODUCTS The Company’s principal products are described on page 42 of Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations .
Management’s Discussion and Analysis of Financial Condition and Results of Operations . 7 Table of Contents MARKETING AND DISTRIBUTION The Company sells products directly to end users and converters, as well as through agents, resellers and distributors. DESCRIPTION OF PRINCIPAL PRODUCTS The Company’s principal products fall into several categories as described below and also in Item 7.
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.
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 may 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.
The Company operations are subject to extensive and evolving federal, state, local, and international laws and regulations governing the protection of the environment and will be more so in light of our increased scale and global presence following completion of our business combination with DS Smith.
The Company’s operations are subject to extensive and evolving federal, state, local, and international laws and regulations governing the protection of the environment and became more so in 2025 in light of our increased scale and global presence.
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.
We encourage investors, the media, and other interested parties to visit this website regularly for updates. The information contained on or connected to our website 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.
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.
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.
International Paper, the USW, and several other unions have entered into five master agreements covering various U.S. mills and converting facilities.
Of this number, 8,622 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.
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.
The required disclosure below is set out as of December 31, 2025 and the data provided in relation to the Board and executive officers has been collected through the annual Directors and Officers’ questionnaire. UKLR Reporting Standards (the "Standards") Result Further notes At least 40% of the Board are women. Not met 30% of the Board were women.
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 .
You can find more information about capital expenditures in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations . Discussions of acquisitions can be found in Note 7 Acquisitions of Item 8. Financial Statements and Supplementary Data . You can find discussions of restructuring charges and other special items in Item 7.
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.
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.
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.
We also offer peer mentoring and leadership and career development training to support and develop our employees. 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. 5 Table of Contents The labor market for both hourly and salaried workers continues to be competitive.
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.
The make-up of our Board of Directors reflects our efforts to seek the most qualified board candidates with a broad range of experiences and perspectives. Our Executive Leadership Team ("ELT") is currently comprised of our chief executive officer, two executive vice presidents and three senior vice presidents who oversee crucial functions and business units within the Company.
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 holistic approach to wellness also includes tools and guidance for incorporating wellness habits into daily life, ensuring our employees have the support they need to thrive. TALENT MANAGEMENT The attraction, retention and development of our employees is critical to our success. We strive to create a positive employee experience that begins at onboarding.
GOVERNMENTAL REGULATION The Company’s policy is to operate its mills and factories in compliance with all applicable laws and regulations such that it protects the environment and the health and safety of its employees. We operate our businesses and sell products globally.
These products support customers in industries such as food and beverage, agriculture, industrial manufacturing, personal care pharmaceuticals and consumer goods. GOVERNMENTAL REGULATION The Company’s policy is to operate its mills and plants in compliance with all applicable laws and regulations such that it protects the environment and the health and safety of its employees.
Through these efforts and more, the Company tackles the toughest issues in the value chain to improve its environmental footprint and promote the long-term sustainability of natural capital. Our approach to sustainability considers our entire value chain, from sourcing raw materials responsibly and working safely, to making renewable, recyclable products and providing a market for recovered products.
Our approach to sustainability considers our entire value chain, from sourcing raw materials responsibly and working safely, to making renewable, recyclable products and providing a market for recovered products.
Risk Factors – We may fail to successfully integrate DS Smith and realize the anticipated benefits and operating synergies expected from the business combination, which could adversely affect our business, financial condition and operating results; We are subject to a wide variety of laws, regulations and other governmental requirements that may change in significant ways, and the cost of compliance, or the failure to comply with such requirements, could impact our business and results of operations.
For additional information regarding risks associated with environmental matters, see Item 1A. Risk Factors – We are subject to a wide variety of laws, regulations and other governmental requirements that may change in significant ways, and the cost of compliance, or the failure to comply with such requirements, could impact our business and results of operations.
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.
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 expenditures in 2025 were approximately $1.9 billion and are expected to be approximately $2.0 billion to $2.1 billion in 2026 .
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 you to refer to such information. You can learn more about us by visiting our website at www.internationalpaper.com, which includes information about the Company, our SEC filings, financial and other information for investors. Information on our website could be deemed to be material information.
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.
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, nearly 100 front line and future leaders participated in our multi-day in-person Leadership Application and Professional Development and Manufacturing Management Associate Programs during 2025.
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.
Substantially all our businesses have experienced, and are likely to continue to experience, cycles relating to industry capacity and general economic conditions. VALUES We are guided by our Company values: • Safety – Above all else, we care about people.
Our continuing objectives include: (i) controlling emissions and discharges from our facilities to avoid adverse impacts on the environment, and (ii) maintaining compliance with applicable laws and regulations. The Company spent approximately $20 million in 2024 for capital projects to control environmental releases into the air and water, and to assure environmentally sound management and disposal of waste.
Our continuing objectives include: (i) controlling emissions and discharges from our facilities to avoid adverse impacts on the environment, and (ii) maintaining compliance with applicable laws and regulations.
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.
Until the individuals in those positions retire or otherwise leave, the Company will not meet the Standards.
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.
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.
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 develop leaders through a broad range of LMS virtual and in-person resources, courses and workshops for individual contributors, people leaders and teams. In 2025, 44 senior leaders participated in the first offering of a multi-part workshop series developed in partnership with The Aspen Institute.
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 .
SEGMENTS We operate under two divisions, which form the basis for the two segments we report, Packaging Solutions North America and Packaging Solutions EMEA. A description of these business segments can be found in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations .
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.
CURRENT BUSINESS OVERVIEW In the United States, as of the date of this filing, the Company operated 15 packaging mills, 159 converting and packaging plants and 15 recycling plants. Additionally, production facilities in Europe, North Africa and Latin America included 14 containerboard mills, 159 converting and packaging plants and 20 recycling plants.
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").
Our internet address is included as an inactive textual reference only. 3 Table of Contents HUMAN CAPITAL EMPLOYEES As of December 31, 2025 , we have approximately 62,602 employees, nearly 30,421 of whom are in the United States. Of our U.S. employees, 20,705 are hourly, with unions representing approximately 11,498 employees.
Silvernail holds the position of CEO and Chair. Christopher M. Connor holds the position of Lead Director. The position of CFO is not held by a member of the Board. COMMUNITY ENGAGEMENT We encourage our employees to support the communities in which they live and in which the Company operates.
Silvernail holds the position of CEO and Chair. Christopher M. Connor holds the position of Lead Director, which is the equivalent of the SID.
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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 at www.internationalpaper.com.
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We are a New York corporation, incorporated in 1941 as the successor to the New York corporation of the same name organized in 1898. In recent years, the Company has undergone significant transformation designed to simplify our operations, strengthen performance and position the business for long-term value creation. STRATEGY At International Paper, we follow the IP 80/20 performance system.
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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.
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The 80/20 approach is a disciplined, data-driven operating model focused on simplification, segmentation, resourcing and growth.
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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.
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In recent years the Company has taken actions to drive meaningful operational improvement and increase strategic flexibility across our global portfolio, including: Simplify Segment Resource Grow Focusing on our core business: sustainable packaging solutions Concentrating on the right geographies within each region Tailoring investment and capital allocation strategies to meet distinct needs Winning with customers and providing superior customer experiences Exiting non-core businesses Planning to separate into two independent, publicly traded companies in North America and EMEA (announced Jan 2026) Investing in greenfield packaging facilities; plans for two new plants announced in 2025 Enhancing investor base in both North America and EMEA Optimizing internal processes and organizational structures to reduce complexity Prioritizing the right customer segments and product offerings Investing in our talent and putting the right people in the right roles to create value Focusing on achieving an advantaged cost position We remain confident that the initiatives undertaken as part of our transformational journey will unlock substantial value at IP and strengthen the Company for our employees, customers and shareholders. 2025 Highlights • Financial: Net sales in 2025 totaled $23.63 billion and cash provided by operating activities totaled $1.7 billion. • Strategic Acquisition: Completed the acquisition of DS Smith Ltd.
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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.
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(“DS Smith”), advanced regional integration and implemented the 80/20 performance system within the new teams; enabled cross-business sharing of best practices. • Strategic Divestiture: Sold our Global Cellulose Fibers business for $1.5 billion to American Industrial Partners (completed January 2026). • Portfolio Rationalizations: Exited non-core businesses and markets, streamlined our footprint and redeployed resources where needed. • Organizational Improvements: Streamlined our organizational structure to eliminate redundancies created by the acquisition, further decentralized our teams, outsourced some functional areas and better resourced high value-creation areas. • Shareholder Returns: Returned $977 million to shareholders in dividends. • Packaging Focused Company: Took actions to position IP as a pure play company dedicated exclusively to sustainable packaging. 2026 Focus In 2026, we will continue to drive sustainable value creation and advance our company.
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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.
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Through the application of our 80/20 performance system, we will execute our strategy with a sharp focus on achieving an advantaged cost position, delivering superior customer experience and capturing a high relative supply position in the right geographies, with the right customers and the right product offerings.
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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.
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A critical priority will be the execution of the strategic separation to create two independent, publicly traded companies in North America and EMEA, which we aim to complete near the end of 2026 or early 2027.
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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.
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In North America, the business will continue strengthening its 2 Table of Contents position in the region, focusing on customers and leading on innovation with an advantaged cost position.
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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.
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In EMEA, we will prepare the business to stand alone as an independent, publicly traded entity following the separation with the goal of becoming the leading provider of innovative, sustainable packaging solutions in EMEA. From 2021 through 2025, International Paper’s capital expenditures totaled approximately $5.4 billion , excluding mergers and acquisitions.
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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.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations . For further discussion on our business strategies, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations .
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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.
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In addition to our U.S. labor agreements, we operate manufacturing facilities across EMEA, where labor relations are governed by local laws, works councils, national unions, and country specific collective bargaining frameworks.
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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.
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Labor practices, employment protections, and negotiation processes in these regions can differ significantly from those in the U.S. and may impose additional requirements related to consultation, employee representation, and changes in operations.
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Additionally, we committed to investing to strengthen our most competitive and strategic assets and closed facilities to structurally reduce operating costs.
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The Company works collaboratively with these local bodies and employee representatives, but labor related regulations, negotiations, or disruptions in any of these jurisdictions could impact operations, costs, or workforce flexibility. SAFETY AND WELLBEING At International Paper, we value safety above all else. The safety and well-being of our employees, visitors and business partners is fundamental to how we operate.
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Further, in October 2024, we announced that we are exploring strategic options for our Global Cellulose Fibers business. 1 Table of Contents These significant undertakings follow the September 2023 completion of the sale of our 50% equity interest in Ilim S.A.
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In 2025, we reinforced our commitment to safety performance and further implemented our Safety Excellence strategy, which is designed to strengthen our safety culture across all operations.
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("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.
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Our Board of Directors has oversight of our safety strategy, and in 2025 began receiving updates on our Safety Excellence efforts at every Board meeting, elevating safety as a standing governance priority and reinforcing accountability at the highest levels of the Company.
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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.
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In addition, in 2026 the Board participated in an intensive, in- person safety training led by our third-party safety consultant alongside senior management, further strengthening alignment on our Safety Excellence objectives and modeling the leadership behaviors we expect throughout the organization. Through our Safety Excellence efforts, we are building a culture guided by five key attributes: 1.
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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.
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We speak up and take action – every time, without fear. 2. We show up where the work happens and listen with intent. 3. We lead with humility and curiosity. 4. We proactively eliminate risk and invest in what matters. 5. We create a culture of care, trust, and accountability.
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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.
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To ensure lasting impact, in 2025 we continued engagement of a leading safety consultant and initiated comprehensive, top-down training and cascading through every level of leadership. Members of our executive teams actively participated in safety leadership training, personal coaching and in-field demonstrations, reinforcing accountability and modeling the behaviors we expect across the organization.
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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.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeFactors 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) our failure to comply with the obligations associated with being a public company listed on the New York Stock Exchange and the London Stock Exchange and the costs 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, 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, recent 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 11 Table of Contents 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 increased tariffs and retaliatory tariffs) and 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) any 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 Sylvamo Corporation; (xv) the qualification of such 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.
Biggest changeFactors 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 our plans to separate our North America and Europe, Middle East and Africa (“EMEA”) operations into two independent public companies and other acquisitions, joint ventures, divestitures, spinoffs, capital investments and other corporate transactions on a timely basis or at all including the risk that an impairment charge may be recorded for goodwill or other intangible assets, which could lead to decreased assets and reduced net earnings; (ii) our ability to complete regional integration and implement our plans, forecasts, the internal control framework of DS Smith, including assessment of its internal control over financial reporting; (iii) risks associated with our strategic business decisions including facility closures, business exits, operational changes, restructuring initiatives and portfolio rationalizations intended to support the Company’s 80/20 approach for long-term growth; (iv) our failure to comply with the obligations associated with being a public company listed on the New York Stock Exchange and the London Stock Exchange and the costs associated therewith; (v) 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 sustainability matters, including our ability to meet such targets and goals; (vi) loss contingencies and pending, threatened or future litigation, including with respect to environmental and antitrust related matters; (vii) the level of our indebtedness, including our obligations related to becoming the guarantor of the DS Smith Euro Medium Term Notes programme, risks associated with our variable rate debt, and changes in interest rates (including the impact of currently elevated, but moderating, interest rate levels); (viii) 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; (ix) 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 as well as broader geopolitical tensions involving major global actors, including those related to China and Venezuela), changes in currency exchange rates, including in light of our increased proportion of assets, liabilities and earnings denominated in foreign currencies, trade policies (including but not limited to protectionist measures and the imposition of new or increased tariffs; the effects of the U.S.
Our standing committees share responsibility on sustainability as described below: Audit and Finance Committee • Reviews processes and controls for external reporting of sustainability and social impact data and metrics. • Reviews related disclosures in Annual Report on Form 10-K and other sustainability reports.
Our standing committees share responsibility for sustainability as described below: Audit and Finance Committee • Reviews processes and controls for external reporting of sustainability and social impact data and metrics. • Reviews related disclosures in Annual Report on Form 10-K and other sustainability reports.
Risk Factors – We are subject to risks associated with climate change and other sustainability matters and global, regional and local weather conditions as well as legal, regulatory and market responses to climate change and we are subject to a wide variety of laws, regulations and other government requirements that may change in significant ways, and the cost of compliance with such requirements, or the failure to comply with such requirements, could impact our business and results of operations.
Risk Factors – We are subject to risks associated with climate change and other sustainability matters and global, regional and local weather conditions as well as legal, regulatory and market responses to climate change; We are subject to a wide variety of laws, regulations and other government requirements that may change in significant ways, and the cost of compliance with such requirements, or the failure to comply with such requirements, could impact our business and results of operations.
The EPA manages regulations to: (i) control GHGs from mobile sources by adopting transportation fuel efficiency standards; (ii) control GHG emissions from new Electric Generating Units (“EGUs”); (iii) control emissions from new oil and gas processing operations; and (iv) require reporting of GHGs from sources of GHGs greater than 25,000 tons per year.
The EPA manages regulations to: (i) control GHGs from mobile sources by adopting transportation fuel efficiency standards; (ii) control GHG emissions from new Electric Generating Units; (iii) control emissions from new oil and gas processing operations; and (iv) require reporting of GHGs from sources of GHGs greater than 25,000 tons per year.
Other possible indirect impacts may include influence on competitive position due to customer and end-consumer preferences regarding low-carbon, circular products with a high recycling rate along with tax credit and funding opportunities to expand green energy production and carbon credit generation.
Other possible indirect impacts include influence on competitive position due to customer and end-consumer preferences regarding low-carbon, circular products with a high recycling rate along with tax credit and funding opportunities to expand green energy production and carbon credit generation.
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.
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,” “outlook,” “intend,” “look,” “may,” “will,” “remain,” “confident,” “commit” and “plan” or similar expressions.
We may also incur significant expenditures in relation to our efforts to meet our internal targets or goals with respect to GHGs and climate change, including our Vision 2030 goal on GHGs as discussed above.
We may also incur significant expenditures in relation to our efforts to meet our internal targets or goals with respect to GHGs and climate change, including our 2030 goal on GHGs as discussed above.
Moreover, compliance with legal requirements related to GHGs and/or climate change which are currently in effect or which may be effective or enacted in the future are expected to require future expenditures to meet GHG emission reduction, disclosure or other obligations. These obligations may include carbon taxes, the requirement to purchase GHG credits or the need to acquire carbon offsets.
Moreover, compliance with legal requirements related to GHGs and/or climate change currently in effect or enacted in the future are expected to require future expenditures to meet GHG emission reduction, disclosure or other obligations. These obligations may include carbon taxes, the requirement to purchase GHG credits or the need to acquire carbon offsets.
Risks Related to our Pension and Healthcare Costs • Our pension and health care costs are subject to numerous factors which could cause these costs to change. • Our U.S. funded pension plan is currently fully funded on a projected benefit obligation basis; however, the possibility exists that over time we may be required to make cash payments to the plan, reducing the cash available for our business.
Risks Related to our Pension and Healthcare Costs • Our pension and health care costs are subject to numerous factors which could cause these costs to change. • Our pension plans are currently fully funded on a projected benefit obligation basis; however, the possibility exists that over time we may be required to make cash payments to the plan, reducing the cash available for our business.
The Company has controls and procedures in place to track GHG emissions from our facilities, as well as to stay informed about developments concerning possible climate-related laws, regulations, accords, and policies where we operate.
The Company has controls and procedures in place designed to track GHG emissions from our facilities and stay informed about developments concerning possible climate-related laws, regulations, accords, and policies where we operate.
The CSDDD entered into force in 2024 and EU member states have two years to implement through national laws and decide on enforcement. CSDDD implementation and compliance timeline may vary based on details once finalized by each member state.
The CSDDD became effective in 2024 and EU member states have two years to implement through national laws and decide on enforcement. The CSDDD implementation and compliance timeline may vary based on details once finalized by each member state.
The EUDR requires companies trading in products derived from certain commodities to conduct extensive diligence on the value chain to ensure goods do not result from recent deforestation, forest degradation or breaches of local environmental and social laws. Currently, the Company is evaluating the implications of the EUDR to its business with the expected reporting date now postponed until 2026.
The EUDR requires companies trading in products derived from certain commodities to conduct extensive diligence on the value chain to ensure goods do not result from recent deforestation, forest degradation or breaches of local environmental and social laws. The Company is evaluating the implications of the EUDR to its business with expected reporting to begin after December 30, 2026.
Risks Related to Climate and Weather and Social and Environmental Impact Reporting • We are subject to risks associated with climate change and other sustainability matters and global, regional and local weather conditions as well as by legal, regulatory, and market responses to climate change. 12 Table of Contents Risks Related to our Operations • We are subject to cybersecurity and information technology risks related to breaches of security pertaining to sensitive company, customer, employee and vendor information as well as breaches in the technology used to manage operations and other business processes. • We are subject to a wide variety of laws, regulations and other government requirements that may change in significant ways, and the cost of compliance with such requirements, or the failure to comply with such requirements could impact our business and results of operations. • Material disruptions at one of our manufacturing facilities could negatively impact financial results. • We operate in a challenging market for talent and may fail to attract and retain qualified personnel, including key management personnel. • Our failure to maintain good employee or labor relations may affect our respective operations. • We may be unable to realize the expected benefits and costs savings associated with restructuring initiatives, including our 80/20 strategic approach. • We may not achieve the expected benefits from strategic acquisitions, joint ventures, divestitures, spin-offs, capital investments, capital projects and other corporate transactions that are or will be pursued. • There are risks associated with our review of strategic options for our Global Cellulose Fibers business, and there is no assurance that this review will result in any transaction or other outcome. • Our continued growth will depend on our ability to retain existing customers and attract new customers. • Uninsured losses or losses in excess of our insurance coverage for various risks could have an adverse financial effect on our business. • We may not be able to adequately secure and protect our intellectual property rights, which could harm our competitive advantage. • We may fail to identify or leverage digital transformation initiatives.
Risks Related to our Operations • We are subject to a wide variety of laws, regulations and other government requirements that may change in significant ways, and the cost of compliance with such requirements, or the failure to comply with such requirements could impact our business and results of operations. • Material disruptions at one of our manufacturing facilities could negatively impact financial results. • We operate in a challenging market for talent and may fail to attract and retain qualified personnel, including key management personnel. • Our failure to maintain good employee or labor relations may affect our respective operations. • We may be unable to realize the expected benefits and costs savings associated with restructuring initiatives, including our 80/20 approach. • We may not achieve the expected benefits from strategic acquisitions, joint ventures, divestitures, spin-offs, capital investments, capital projects and other corporate transactions that are or will be pursued. • We are subject to cybersecurity and information technology risks related to breaches of security pertaining to sensitive company, customer, employee and vendor information as well as breaches in the technology used to manage operations and other business processes. • Our continued growth will depend on our ability to retain existing customers and attract new customers. • Uninsured losses or losses in excess of our insurance coverage for various risks could have an adverse financial effect on our business. 14 Table of Contents • We may not be able to adequately secure and protect our intellectual property rights, which could harm our competitive advantage. • We may fail to identify or leverage digital transformation initiatives.
Additional information regarding climate change and the Company is available in our annual Sustainability Report and ISSB IFRS S2 Report (previously TCFD), both of which can, or will be, found on our website at www.internationalpaper.com. Our 2024 Sustainability Report and 2024 ISSB IFRS S2 will be available later in 2025.
Additional information regarding climate change and the Company is available in our annual Sustainability Report and Climate Report, both of which can, or will be, found on our website at www.internationalpaper.com. Our 2025 Sustainability Report and 2025 Climate Report will be available later in 2026.
The ELT receives several sustainability updates throughout the year from our CSO. For additional information regarding risks associated with climate change and the evolving regulatory landscape, see Item 1A.
The ELT receives several sustainability updates from our CSO. 11 Table of Contents For additional information regarding risks associated with climate change and the evolving regulatory landscape, see Item 1A.
RAW MATERIALS Raw materials essential to our businesses include wood fiber, purchased in the form of pulpwood, wood chips and old corrugated containers ("OCC"), and certain chemicals, including caustic soda, starch and adhesives. For further information concerning fiber supply purchase agreements, see page 46.
RAW MATERIALS Raw materials essential to our businesses include wood fiber, mainly purchased in the form of pulpwood, wood chips and old corrugated containers ("OCC"), and certain chemicals, including caustic soda, starch and adhesives. For further information concerning fiber supply purchase agreements, see Liquidity and Capital Resources of Part II, Item 7.
In addition to possible direct impacts, future legislation and regulation could have indirect impacts on the Company, such as higher prices for transportation, energy and other inputs, as well as more protracted air permitting processes, causing delays and higher costs to implement capital projects.
In addition to possible direct impacts, future legislation and regulation could indirectly impact the Company. For example, higher prices for transportation, energy and other inputs, as well as more protracted air permitting processes, could cause delays and higher costs to implement capital projects.
While the United States has officially withdrawn from the 2015 Paris Agreement, IP recognizes the importance of global policy action to achieve emission reductions consistent with an increase of “well below 2 ° Celsius above pre-industrial levels and to pursue efforts to limit the temperature increase even further to 1.5 ° Celsius.” Consistent with this objective, participating countries aim to balance GHG emissions generation and sequestration in the second half of this century or, in effect, achieve net-zero global GHG emissions.
Although the United States has withdrawn from the 2015 Paris Agreement, IP recognizes the importance of global policy action to achieve emission reductions consistent with an increase of “well below 2 ° Celsius above pre-industrial levels and to pursue efforts to limit the temperature increase even further to 1.5 ° Celsius.” Consistent with this objective, participating countries aim to balance GHG emissions generation and sequestration in the second half of this century or, in effect, achieve net-zero global GHG emissions. 9 Table of Contents To assist member countries in meeting GHG reduction obligations, the European Union operates an Emissions Trading System ("EU ETS").
The CSRD standards replace the existing Non-Financial Reporting Directive and expands reporting requirements for companies operating in the EU. The implementation timeline varies depending on the type of entity. The CSDDD requires reporting and documentation about due diligence systems covering company and supply chains.
The Company’s first reporting year under the CSRD is expected to be 2028. The CSRD standards replace the existing Non-Financial Reporting Directive and expand reporting requirements for companies operating in the EU. The implementation timeline varies depending on the type of entity. The CSDDD requires reporting and documentation about due diligence systems covering company and supply chains.
Risks Related to Market and Economic Factors • Developments in general business and economic conditions could have an adverse effect on the demand for our products, our financial condition and the results of our operations. • Changes in international conditions or other risks arising from conducting business internationally could adversely affect our business and operations.
Risks Related to Market and Economic Factors • Maintenance of two exchange listings may adversely affect liquidity in the market for our shares of common stock and result in pricing differentials of shares of common stock between two exchanges. • Developments in general business and economic conditions could have an adverse effect on the demand for our products, our financial condition and the results of our operations. • Changes in international conditions or other risks arising from conducting business internationally could adversely affect our business and operations.
TNFD adopters intend to make corporate reporting disclosures that are aligned with TNFD recommendations, which have been designed to (i) meet the corporate reporting requirements of 7 Table of Contents organizations across jurisdictions; (ii) be consistent with the global baseline for corporate sustainability reporting; and (iii) be aligned with the global policy goals outlined in the Kunming-Montreal Global Biodiversity Framework, which was adopted to halt and reverse nature loss by 2030.
We published our first TNFD report in 2025 with 2024 data that aligns with TNFD recommendations, which have been designed to (i) meet the corporate reporting requirements of organizations across jurisdictions; (ii) be consistent with the global baseline for corporate sustainability reporting; and (iii) be aligned with the global policy goals outlined in the Kunming-Montreal Global Biodiversity Framework, which was adopted to halt and reverse nature loss by 2030.
Our ELT, which is comprised of one executive vice president and four senior vice presidents who report directly to the CEO and oversee critical functions and business units within the Company, evaluates sustainability issues based on input from function-specific councils that report to 9 Table of Contents the ELT.
Our ELT, which is comprised of two executive vice presidents and three senior vice presidents who report directly to the CEO and oversee critical functions and business units within the Company, evaluates sustainability issues based on input from the businesses.
Thomas Hamic, 58, was appointed executive vice president and president - North American Packaging Solutions effective September 1, 2024. In this newly created role, Mr. Hamic leads the Container and Containerboard businesses in North America. Prior to this promotion, Mr. Hamic served as senior vice president - North American Container and chief commercial officer since January 2023. Mr.
In this role, Mr. Hamic leads the Container and Containerboard businesses in North America. Prior to this promotion, Mr. Hamic served as senior vice president - North American Container and chief commercial officer (January 2023-2024). Mr.
CLIMATE CHANGE The Company recognizes the impact of climate change on people and our planet. To manage climate-related risks, we are taking actions throughout our value chain to help advance a low-carbon economy.
CLIMATE CHANGE The Company recognizes the impact of climate change on people and our planet. To manage climate-related risks, we are taking actions throughout our value chain to help advance a low-carbon economy. We aligned our annual sustainability reporting with the recommendations of the International Financial Reporting Standards S2 Climate- related Disclosures in the 2024 reporting cycle.
We believe sustainability is a key element of corporate governance promoted by our Board of Directors, committees of the Board of Directors and management. Our Board of Directors has primary oversight of the Company's enterprise risk management program, which includes sustainability. The Board receives updates from our Chief Sustainability Officer ("CSO") and additional members of management.
We believe sustainability is a key element of corporate governance with oversight of management's initiatives and efforts provided by our Board of Directors and committees of the Board of Directors. Our Board of Directors has primary oversight of the Company's enterprise risk management program, which includes sustainability.
However, it is unclear 8 Table of Contents what actions will be taken and when such actions will occur and at this time it is not reasonably possible to estimate the Company’s costs of compliance with rules that have not yet been adopted or implemented and may not be adopted or implemented in the future and may be undergoing legal challenges.
Because it remains unclear what actions regulators may take or when such actions may occur, it is not reasonably possible at this time to estimate the Company’s costs of compliance with rules that have not yet been adopted or implemented, may never be adopted or implemented or may be subject to legal challenge.
Our Board of Directors also conducts periodic reviews of components of the sustainability strategy and performance and reviews material key sustainability-related developments and issues.
The Board receives updates from our Chief Sustainability Officer ("CSO") and additional members of management. Our Board also conducts periodic reviews of components of the sustainability strategy and performance and reviews material key sustainability-related developments and issues.
Silvernail has two decades of experience leading global companies in the manufacturing and technology sectors. He joined IP from KKR & Co., Inc., a global investment firm, where he served as an executive advisor, and 5 Nails, LLC, a private investment advisory firm where he served as founder, chair and chief executive officer (2022-2024). Mr.
He joined IP from KKR & Co., Inc., a global investment firm, where he served as an executive advisor, and 5 Nails, LLC, a private investment advisory firm where he served as founder, chair and chief executive officer (2022-2024). Prior to this role, Mr.
We intend to continue to evaluate and implement projects as we pursue this Vision 2030 GHG goal. This includes ongoing energy efficiency efforts and capital projects to phase out our most carbon intensive fuel sources (Scope 1) as well as developing GHG reduction strategies for our energy sourcing (Scope 2) and broader supply chain footprint (Scope 3).
This includes ongoing energy efficiency efforts and capital projects to phase out our most carbon intensive fuel sources (Scope 1) as well as developing GHG reduction strategies for our energy sourcing (Scope 2) and broader supply chain footprint (Scope 3). In addition, we were an early adopter of the Taskforce on Nature-related Financial Disclosures (“TNFD”).
Several U.S. states, including states in which we operate facilities, have enacted or are considering legal measures to require the reduction and reporting of emissions of GHGs by companies and public utilities. California, New York and Virginia have already enacted such programs, although these regulations have not had, and are not expected to have a material impact on the Company.
Several U.S. states have enacted or are considering legal measures requiring the reduction and reporting of GHG emissions by companies and public utilities. While current regulations in these jurisdictions have not had, and are not expected to have, a material impact on the Company, we continue to monitor developments closely.
To assist member countries in meeting GHG reduction obligations, the European Union operates an Emissions Trading System ("EU ETS"). Our operations in the EU experience indirect impacts of the EU ETS through purchased power pricing. Neither the direct nor indirect impacts of the EU ETS have been material to the Company.
Our operations in the EU experience indirect impacts of the EU ETS through purchased power pricing. To date, neither the direct nor indirect impacts of the EU ETS have been material to the Company.
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 recently completed business combination with DS Smith Plc, subsequently re-registered as DS Smith Limited ("DS Smith"), which closed on January 31, 2025.
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 strategic corporate transactions.
U.S. EFFORTS, INCLUDING STATE, REGIONAL AND LOCAL MEASURES Responses to climate change may result in regulatory risks as new laws and regulations aimed at reducing GHG emissions come into effect.
However, following the planned separation of our EMEA business into an independent public company, International Paper will review its obligations to report under these requirements. U.S. EFFORTS, INCLUDING STATE, REGIONAL AND LOCAL MEASURES Responses to climate change may result in regulatory risks as new laws and regulations aimed at reducing GHG emissions come into effect.
We monitor proposed programs in other states as well; however, it is unclear what impacts, if any, future state-level or local GHG rules will have on the Company’s operations, as well as the outcome of any legal challenges to these rules.
It is unclear what impacts, if any, future state-level or local GHG rules will have on the Company’s operations, as well as the outcome of any legal challenges to these rules. 10 Table of Contents SUMMARY Regulation related to GHGs and climate change continues to evolve in the areas of the world in which we do business.
He serves on the board of directors of Stryker Corporation (NYSE: SYK) and Potter Global Technologies, a privately held company specializing in fire and safety solutions. Clay R. Ellis, 54, senior vice president - Global Cellulose Fibers and IP Asia since January 2023. Mr.
He serves on the board of directors of Stryker Corporation (NYSE: SYK) and Potter Global Technologies, a privately held company specializing in fire and safety solutions. Melissa S. Flores , 43, senior vice president, chief human resources officer since January 5, 2026. Ms. Flores leads the human resources function. Ms.
We aim to produce low carbon products that have a positive impact on nature. To this end, we source renewable fiber from responsibly managed forests and recycled raw materials. We then use a circular manufacturing process that makes the most of resources and byproducts, while reducing the environmental impacts of our operations.
We transform renewable resources into recyclable products that people depend on every day. We aim to produce low carbon products that have a positive impact on nature. To this end, we source renewable fiber from responsibly managed forests and recycled raw materials.
The Company faces a variety of risks, including risks in the normal course of business and through global, regional, and local events that could have an adverse impact on its reputation, operations, and financial performance. 13 Table of Contents The following are material risk factors of which we are aware, including risk factors that could cause the Company’s actual results to differ materially from those contemplated in any forward-looking statement.
The Company faces a variety of risks, including risks in the normal course of business and through global, regional, and local events that could have an adverse impact on its reputation, operations, and financial performance.
We aligned our annual sustainability reporting with the recommendations of the International Financial Reporting Standards S2 Climate-related Disclosures in the 2024 reporting cycle (based upon data from 2023). As part of our climate reports, we identify and report on climate-related opportunities. We identify and evaluate physical and transition climate-related risks through our enterprise risk management process.
As part of our climate reports, we identify and report on climate- related opportunities. We identify and evaluate physical and transition climate-related risks through our enterprise risk management process.
There are no family relationships, as defined by the instructions to this item, among any of the Company’s executive officers and any other executive officers or directors of the Company.
Saab previously served as vice president, deputy general counsel and assistant corporate secretary (2019-2022) and in other leadership roles with the Company since joining International Paper in 2001. There are no family relationships, as defined by the instructions to this item, among any of the Company’s executive officers and any other executive officers or directors of the Company.
At the end of use, the majority of our low-carbon fiber-based products are recycled into new products at a higher rate than any other base material. We work to advance the shift to a low-carbon, circular economy by designing products that are 100% reusable, recyclable or compostable.
We then use a circular manufacturing process that makes the most of resources and byproducts, while reducing the environmental impacts of our operations. At the end of use, the majority of our low-carbon fiber-based products are recycled into new products at a higher rate than any other base material.
Risks Related to the Business Combination and the Share Issuance • Failure to achieve the benefits and operating synergies expected from the business combination of DS Smith. • Significant integration costs that could cause an interruption of, or loss of momentum in, the activities of the Company. • Exposure to significant unanticipated liabilities. • Shareholders are more exposed to currency exchange rate fluctuations. • Failure to successfully integrate DS Smith and realize the benefits and operating synergies expected from the business combination to the extent or within the timeframes anticipated • Adverse effects and pricing differentials arising from the maintenance of two exchange listings Risks Related to Industry Conditions • Fluctuations in the prices of and the demand for our products due to factors such as economic cyclicality and changes in customer or consumer preferences, and government regulations. • Changes in the cost and availability of raw materials, energy and transportation have recently affected, and could continue to affect, our profitability. • Competition and downward pricing pressure in the global packaging industry could negatively impact our financial results.
Risks Related to Industry Conditions • Fluctuations in the prices of and the demand for our products due to factors such as economic cyclicality and changes in customer or consumer preferences, and government regulations. • Changes in the cost and availability of raw materials, energy and transportation have recently affected, and could continue to affect, our profitability. • Competition and downward pricing pressure in the global packaging industry could negatively impact our financial results.
Additionally, the EU’s Corporate Sustainability Reporting Directive (“CSRD”), Corporate Sustainability Due Diligence Directive ("CSDDD") and Deforestation Regulation (“EUDR”), each impose additional compliance responsibilities on the Company. The CSRD requires additional reporting processes for greater accountability. The Company’s first reporting year under the CSRD is expected to be 2026.
In 2025, many countries failed to submit updated climate targets, which has contributed to continued uncertainty in the allocation and market pricing of GHG credits. Additionally, the EU’s Corporate Sustainability Reporting Directive (“CSRD”), Corporate Sustainability Due Diligence Directive ("CSDDD") and Deforestation Regulation (“EUDR”), each impose additional compliance responsibilities on the Company. The CSRD requires additional reporting processes for greater accountability.
For ease of review and given the detailed and technical content of these disclosures, the TCFD Report is considered to be the most appropriate location for the disclosures. This statement is provided in accordance with UKLR 14.3.24R. We transform renewable resources into recyclable products that people depend on every day.
For ease of review and given the detailed and technical content of these disclosures, the Climate Report is considered to be the most appropriate location for the disclosures. This statement is provided in accordance with UKLR 14.3.24R. Our corporate sustainability reports, including our 2024 and 2025 Climate Report, are or will be available at www.internationalpaper.com/reports.
Through improvements in operations, equipment, energy efficiency and fuel diversity, we are working to achieve company-wide reductions in Scope 1 and Scope 2 greenhouse gas (“GHG”) emissions. As part of our Vision 2030 goals, we targeted incremental reductions of 35% in our Scope 1, 2, and 3 GHG emissions by 2030 in comparison to 2019 levels.
As part of our 2030 goals, we targeted incremental reductions of 35% in our Scope 1, 2, and 3 GHG emissions by 2030 in comparison to 2019 levels. We intend to continue to evaluate and implement projects as we pursue this 2030 GHG goal.
Risks Related to Legal Proceedings and Compliance Costs • Results of legal proceedings could have a material effect on our consolidated financial results. • We could be exposed to liability for Brazilian taxes under our agreements with Sylvamo Corporation. • If our spin-off of Sylvamo Corporation were to fail to qualify for non-recognition treatment for U.S. federal income tax purposes, then we may be subject to significant U.S. federal income taxes.
Risks Related to Legal Proceedings and Compliance Costs • Results of legal proceedings could have a material effect on our consolidated financial results. • We could be exposed to liability for Brazilian taxes under our agreements with Sylvamo Corporation. • Failure to remediate a material weakness in DS Smith’s internal control over financial reporting could adversely affect our business and results of operations.
INFORMATION ABOUT OUR EXECUTIVE OFFICERS The following are the executive officers of our Company as of the date of this filing. Andrew K. Silvernail, 54, joined International Paper as chief executive officer on May 1, 2024 and became chairman of the International Paper Board of Directors on October 1, 2024. Mr.
Silvernail, 55, joined International Paper as chief executive officer on May 1, 2024 and became chairman of the International Paper Board of Directors on October 1, 2024. Mr. Silvernail has two decades of experience leading global companies in the manufacturing and technology sectors.
The Company has included in its 2023 Task Force on Climate-related Financial Disclosures Report (the "TCFD Report," which can be found at www.internationalpaper.com and provides information as of December 31, 2023) climate related disclosures consistent with the four recommendations and the 11 recommended disclosures set out in the June 2017 report on the Task force on Climate-related Financial Disclosures entitled “Recommendations of the Task Force on Climate-related Financial Disclosures.” Our 2024 International Sustainability Standards Board IFRS Sustainability Disclosure Standard 2 (the "ISSB IFRS S2 Report," formerly the TCFD Report), which will be available later in 2025 at www.internationalpaper.com and which will provide information as of December 31, 2024), will contain similar consistent disclosures.
Our 2025 Climate Report, which will be available later in 2026, will provide climate related disclosures as of December 31, 2025, consistent with the four core recommendations and 11 recommended disclosures set out in the Final 2017 TCFD Report.
Saab, 56, has been senior vice president, general counsel and corporate secretary since July 2022 and served as interim senior vice president – Human Resources and Corporate Affairs (August 2024-February 2025). Mr.
In addition to leading all Legal functions for the Company, Mr. Saab also has responsibility for Corporate Security and served as the interim senior vice president – Human Resources twice during leadership changes (August 2024-February 2025; June 2025-January 2026). Mr.
Governance Committee • Reviews and reassesses adequacy of, and oversees compliance with, our Corporate Governance Guidelines. • Seeks Board of Director candidates with diverse backgrounds. Management Development and Compensation Committee ("MDCC Committee") • Recommends approval of our Chief Executive Officer's ("CEO") sustainability-focused objectives and evaluates performance. • Considers sustainability factors in ELT compensation and in overall compensation plan design.
Governance Committee • Reviews and reassesses adequacy of, and oversees compliance with, our Corporate Governance Guidelines. • Seeks Board of Director candidates with a broad range of skills, experiences and perspectives.
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In addition, we have committed to be an early adopter of the Taskforce on Nature-related Financial Disclosures (“TNFD”) and plan to publish our first TNFD report in 2025 with 2024 data.
Added
The Company's 2024 Climate Report (which, prior to 2024, was referred to as the Company's Task Force on Climate-related Financial Disclosures Report or "TCFD Report") provides climate related disclosures as of December 31, 2024, consistent with the four core recommendations and 11 recommended disclosures set out in the June 2017 Final Report published by the TCFD (the "Final 2017 TCFD Report)".
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However, these impacts could become material in the future due to (i) our recent business combination with DS Smith and the resulting increased global footprint and (ii) depending on how the 2015 Paris Agreement's non-binding commitments or allocation of, and market prices for, GHG credits under existing rules evolve over the coming years.
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We work to advance the shift to a low-carbon, circular economy by designing products that are 100% reusable, recyclable or compostable. Through improvements in operations, equipment, energy efficiency and fuel diversity, we are working to achieve company-wide reductions in Scope 1 and Scope 2 greenhouse gas (“GHG”) emissions.
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For example, the State of California passed the Climate Corporate Data Accountability Act and the Climate-Related Financial Risk Act, which imposes climate-related reporting obligations on companies doing business in California meeting specified thresholds, including the Company.
Added
We continue to evaluate potential future impacts in light of (i) our plans to separate our EMEA packaging business into an independent public company and (ii) ongoing developments in the global climate-policy frameworks, including the evolution of the 2015 Paris Agreement's non-binding national commitments and transparency framework. or allocation of, and market prices for, GHG credits.
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SUMMARY Regulation related to GHGs and climate change continues to evolve in the areas of the world in which we do business and areas in which we will do business following completion of our business combination with DS Smith.
Added
In particular, the State of California has enacted two laws that introduce expanded climate-related disclosure obligations: • California Climate Corporate Data Accountability Act (SB 253) requires annual public reporting of Scope 1 and Scope 2 GHG emissions, beginning with fiscal-year 2025 data to be disclosed by August 2026. • California Climate-Related Financial Risk Act (SB 261) mandates disclosure of climate-related reporting obligations on companies doing business in California meeting specified thresholds, subject to the resolution of ongoing legal challenges.
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Ellis previously served as senior vice president - Enterprise Operational Excellence (2019-2022) and vice president - Manufacturing, Global Cellulose Fibers (2016-2019). Prior to that, he served as vice president of Pulp (2014-2016), and vice president Manufacturing, North American Papers (2012-2014). Mr. Ellis joined International Paper in 1992. W.
Added
In 2026, IP voluntarily self-reported under SB 261 using our 2024 Climate Report. The Company is actively preparing to meet the upcoming requirements of SB 261 and will continue to monitor state- level climate legislation, evaluate its implications on our operations and update disclosures as laws take effect and regularity clarity evolves.
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Hamic also served as senior vice president - Global Cellulose Fibers and Enterprise Commercial Excellence (2020-2022), senior vice president - Containerboard and Enterprise Commercial Excellence (2019-2020), vice president and general manager - Containerboard and Recycling, North American Container (2015-2019), vice president and general manager of the South Area Container the Americas (2009), and vice president, Industrial Packaging Group’s Finance and Strategy (2010).
Added
Management's Discussion and Analysis of Financial Condition and Results of Operations . INFORMATION ABOUT OUR EXECUTIVE OFFICERS The following are the executive officers of our Company as of the date of this filing. Andrew K.
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Mr. Hamic joined International Paper in 1991. Timothy S. Nicholls, 63, has been the Company’s chief financial officer since June 2018. At completion of the DS Smith business combination, Mr. Nicholls also began serving as the interim leader of the combined Company’s Europe Middle East & Africa team responsible for leading integration planning. Mr.
Added
Flores previously served as chief human resources officer for IDEX Corporation (NYSE: IEX) (2021-2025). Prior to that, she served in various other leadership roles at IDEX including Group Vice President of Talent (2019-2021) and Group Vice President of Human Resources. W. Thomas Hamic , 59, executive vice president and president - Packaging Solutions North America since September 1, 2024.
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Nicholls previously served as senior vice president - Industrial Packaging the Americas (2017-2018), senior vice president - Industrial Packaging (2014-2016), senior vice president - Printing and Communications Papers of the Americas (2011-2014), senior vice president and chief financial officer (2007-2011), vice president and executive 10 Table of Contents project leader of IP Europe (2007), and vice president and chief financial officer - IP Europe (2005-2006).
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Hamic also served as senior vice president - Global Cellulose Fibers and Enterprise Commercial Excellence (2020-2022) as well as various other leadership roles at the Company since joining International Paper in 1991. Lance T. Loeffler , 48, senior vice president, chief financial officer of the Company since April 1, 2025.
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Mr. Nicholls joined International Paper in 1999 following our acquisition of Union Camp Corporation where he had worked since 1991. Joy N. Roman , 46, was appointed as the Company’s senior vice president, chief strategy and people officer effective February 3, 2025. Ms.
Added
In this role, he has leadership responsibilities for the Company’s global financial strategy and finance functions. Before joining IP, Mr. Loeffler worked for Halliburton (NYSE: HAL) where he most recently served as senior vice president, Middle East and North Africa (2022-2024). Prior to this role, Mr.
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Roman has broad experience and a proven track record in talent development, organizational effectiveness and strategy deployment in large global companies. Ms. Roman joined the Company from Berry Global, Inc. (NYSE: BERY), a manufacturer and marketer of plastic packaging solutions, where she served as chief people and strategy officer since April 2024.
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Loeffler held other positions at Halliburton including executive vice president and chief financial officer (2018-2022). 12 Table of Contents Timothy S. Nicholls , 64, executive vice president and president – Packaging Solutions EMEA effective April 1, 2025. Prior to this role, he served two separate terms as the Company’s chief financial officer – from 2007-2011, and again from 2018-2025.
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Prior to this position, Roman served as group head of human resources for the technical and sustainability functions for Anglo American (LSE: AAL), a global mining company (2022-2023), and as chief human resources officer for the De Beers Group, a diamond company and joint venture of Anglo American and the government of the Republic of Botswana (2021-2022).
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At completion of the DS Smith business combination, Mr. Nicholls began serving in his current position leading the EMEA business. Mr. Nicholls previously served in various leadership roles at the Company since joining International Paper in 1999. Joseph R. Saab , 57, senior vice president, general counsel and corporate secretary since July 2022.
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She also spent four years as senior vice president and chief human resources officer for Toll Brothers (NYSE: TOL) (2017-2021), a builder of luxury homes, and served in various roles of increasing responsibility across the strategy and human resource functions at 3M (NYSE: MMM), a diversified technology company (2015-2017). Joseph R.
Added
Supreme Court’s recent decision striking down certain previously imposed tariffs and creating uncertainty regarding potential tariff refunds and the future scope of U.S. tariff authority; and the impact of new executive orders that may restructure or reauthorize tariff measures through alternative legal mechanisms, as well 13 Table of Contents 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; (x) the amount of our future pension funding obligations, and pension and healthcare costs; (xi) 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); (xii) any 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; (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 Sylvamo Corporation; (xv) our ability to attract and retain qualified personnel and maintain good employee or labor relations; (xvi) our ability to maintain effective internal control over financial reporting; and (xvii) our ability to adequately secure and protect our intellectual property rights.
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Saab previously served as vice president, deputy general counsel and assistant corporate secretary (2019-2022) and associate general counsel - Industrial Packaging North America, Europe, Middle East & Africa (2014-2019). Mr. Saab joined International Paper in 2001.
Added
Risks Related to the Separation • The proposed separation of our EMEA packaging business may not be completed, on the currently contemplated timeline or at all.
Added
Risks Related to Climate and Weather and Social and Environmental Impact Reporting • We are subject to risks associated with climate change and other sustainability matters and global, regional and local weather conditions as well as by legal, regulatory, and market responses to climate change.
Added
The following are material risk factors of which we are aware, including risk factors that could cause the Company’s actual results to differ materially from those contemplated in any forward-looking statement.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeGOVERNANCE Role of the Board of Directors and its Committees International Paper has an integrated board and executive-level governance structure that oversees risks from cybersecurity threats. The Company’s Board of Directors has primary oversight of our enterprise risk management program, which includes cybersecurity risk.
Biggest changeThese measures are designed to mitigate risks associated with use of third parties including outsourcing of non- core IT functions overseas while maintaining compliance with applicable regulatory requirements and protecting the integrity of the Company’s systems and data. 33 Table of Contents CYBERSECURITY GOVERNANCE Role of the Board of Directors and its Committees International Paper has an integrated board and executive-level governance structure that oversees risks from cybersecurity threats.
Our Risk Assessment Program The Company has a risk assessment program in place to assess, identify and manage material risks from cybersecurity threats.
Our Cybersecurity Risk Assessment Program The Company has a risk assessment program in place to assess, identify and manage material risks from cybersecurity threats.
Key aspects of the Company’s cybersecurity program include the following: • layered technical protective capabilities and detective surveillance controls; • utilizing independent third parties to assess the Company’s practices related to, and provide expertise and assistance with, various aspects of information security, as further described below; • courses and awareness training on information security for employees with Company email or access to Company devices, including phishing, social engineering and other cybersecurity training as well as targeted training for specific roles based on responsibilities and risk level; • global security and privacy policies; and • business continuity, incident response and disaster recovery procedures, including table top exercises involving senior leaders.
Key aspects of the Company’s cybersecurity program include the following: • layered technical protective capabilities and detective surveillance controls; • using independent third parties to assess the Company’s practices related to, and provide expertise and assistance with, various aspects of information security, as further described below; • courses and awareness training on information security for employees with Company email or access to Company devices, including phishing, social engineering and other cybersecurity training as well as targeted training for specific roles based on responsibilities and risk level; • global security and privacy policies; and • business continuity, incident response and disaster recovery procedures, including table top exercises involving senior leaders.
The assessment uses the National Institute of Standards and Technology Cybersecurity Framework as its benchmark. • Engagement of a leading third-party service provider to annually perform an external and an internal penetration assessment using industry standard tools and techniques.
The assessment uses the National Institute of Standards and Technology Cybersecurity Framework as its benchmark. • Engagement of a leading third-party service provider to periodically perform an external and an internal penetration assessment using industry standard tools and techniques.
ITEM 1C. CYBERSECURITY RISK MANAGEMENT AND STRATEGY The Company’s cybersecurity risk management processes are integrated into our overall risk management system. The Company has a formalized enterprise risk management program overseen by the 29 Table of Contents Board of Directors and committees of the Board of Directors that addresses strategic, operational, financial, compliance, legal and information technologies and cybersecurity risks.
ITEM 1C. CYBERSECURITY RISK MANAGEMENT AND STRATEGY The Company’s cybersecurity risk management processes are integrated into our overall risk management system. The Company has a formalized enterprise risk management program overseen by the Board of Directors and committees of the Board of Directors that addresses strategic, operational, financial, compliance, legal and information technologies and cybersecurity risks.
Additionally, our Internal Audit team conducts annual assessments of our cyber programs and controls. 30 Table of Contents Oversight of Third Parties The Company has processes to oversee and identify material risks from cybersecurity threats associated with the Company’s use of third-party service providers.
Additionally, our Internal Audit team conducts annual assessments of our cyber programs and controls. Oversight of Third Parties The Company has processes to oversee and identify material risks from cybersecurity threats associated with the Company’s use of third-party service providers.
Additionally, our CISO and members of the cybersecurity team hold a number of industry recognized certifications, such as Certified Information Systems Security Professional, Certified Information Security Manager, and Certified Ethical Hacker, among others. The Company has also adopted a cyber-incident response plan which provides for controls and procedures in connection with cybersecurity events, including escalation procedures summarized below.
Additionally, our CISO and members of the cybersecurity team hold several industry recognized certifications, such as Certified Information Systems Security Professional, Certified Information Security Manager, and Certified Ethical Hacker, among others. The Company has adopted a global cyber-incident response plan which provides for controls and procedures in connection with cybersecurity events, including escalation procedures summarized below.
Cybersecurity events that meet specified criteria for operational impact are escalated for further review to our Business Continuity Incident Command Team (“Incident Command Team”). The Incident Command Team performs an initial assessment that includes evaluation of the cybersecurity event’s severity, response required, and estimated business cost, and leads the execution of business continuity plans to maintain Company operations.
Cybersecurity events that meet specified criteria for operational impact are escalated for further review to our Business Continuity Incident Command Teams (“Incident Command Teams”). The Incident Command Teams perform an initial assessment that includes evaluation of the cybersecurity event’s severity, response required, and estimated business cost, and leads the execution of business continuity plans to maintain Company operations.
Role of Management At a management level, our cybersecurity risk management program is led by our CISO. Our current CISO has been with the Company for over 30 years, worked in Information Technology for over 25 years, and has led the Company’s security efforts since 2011. He was appointed as the Company’s first CISO in 2019.
Role of Management At a management level, our cybersecurity risk management program is led by our CISO . Our current CISO has been with the Company for over 30 years, worked in Information Technology for over 25 years, and has led the Company’s security efforts since 2011.
Our CISO stays current on cybersecurity issues and trends through continuing education activities such as participation at conferences and in webinars. Our CISO reports to our Chief Financial Officer.
Appointed as the Company’s first CISO in 2019, our CISO stays current on cybersecurity issues and trends through continuing education activities such as participation at conferences and in webinars. Our CISO reports to our Chief Financial Officer.
The CIRT performs an impact assessment with respect to cybersecurity incidents, gathers facts and provides a chronology of events in connection therewith, and leads remediation and recovery activities. Our General Counsel, Senior Vice President, Chief People and Strategy Officer, Chief Ethics and Compliance Officer (or their respective designees), and CISO review and assess significant non-operational data breaches.
The CIRTs perform an impact assessment with respect to cybersecurity incidents, gathers facts and provides a chronology of events in connection therewith, and lead remediation and recovery activities. Our General Counsel, Senior Vice President, Chief Human Resources Officer, Chief Ethics and Compliance Officer (or their respective designees), Global Chief Privacy Officer and CISO review and assess significant non-operational data breaches.
Risk Factors - We are subject to cybersecurity and information technology risks related to breaches of security pertaining to sensitive company, customer, employee and vendor information as well as breaches in technology used to manage operations and other business processes. The Company carries cyber insurance which provides coverage in connection with cybersecurity breaches.
Risk Factors - We are subject to cybersecurity and information technology risks related to breaches of security pertaining to sensitive company, customer, employee and vendor information as well as breaches in technology used to manage operations and other business processes.
Engagement of Third Parties The Company engages third parties in connection with assessing, identifying and managing its cybersecurity risks, including the following: • Engagement of an independent third party with incident response expertise to provide intelligence-based cybersecurity solutions and services to assist the Company with preparing for, preventing, investigating, responding to and remediating cybersecurity incidents, including attacks that target on-premise, cloud, and critical infrastructure environments. • Engagement of an independent third party to conduct an annual security program assessment of the controls, maturity and performance of the Company’s information security program and the information security risk associated with the Company’s business systems.
All of the following activities were conducted in both regions in 2025, except for the annual security program assessment which was completed in North America and is planned for EMEA in 2026: • Engagement of an independent third party with incident response expertise to provide intelligence-based cybersecurity solutions and services to assist the Company with preparing for, preventing, investigating, responding to and remediating cybersecurity incidents, including attacks that target on-premise, cloud, and critical infrastructure environments. • Engagement of an independent third party to conduct an annual security program assessment of the controls, maturity and performance of the Company’s information security program and the information security risk associated with the Company’s business systems.
The cyber-incident response plan is designed to address non-operational and operational cybersecurity events. Evaluation and response to cybersecurity events is led by our Cybersecurity Incident Response Team (“CIRT”), under the direction of our CISO. The CIRT is comprised of subject matter experts representing information security, information technology, operational technology and legal.
The cyber-incident response plan captures our North America and EMEA operations and is designed to address non-operational and operational cybersecurity events. Evaluation and response to cybersecurity events is led by our Cybersecurity Incident Response Teams (“CIRTs”), under the direction of our CISO. The CIRTs are made up of subject matter experts representing information security, information technology, operational technology and legal.
In addition, the Company conducts risk-based due diligence on the profiles of third-party service providers with respect to cybersecurity risks prior to engagement, and providers of critical services are continuously monitored with respect to security risks. The Company also requires service providers to provide prompt notification of any actual or suspected breach impacting Company data or operations.
In addition, the Company conducts risk-based due diligence on the profiles of third- party service providers with respect to cybersecurity risks prior to engagement, and providers of critical and outsourced services are continuously monitored with respect to security risks, including periodic audits and compliance reviews.
Moreover, the Board of Directors is supported in its oversight by the Audit and Finance Committee and PPE Committee, which share oversight responsibilities related to the Company’s information security programs. The Audit and Finance Committee reviews management’s cybersecurity and information security risk management programs and controls, including processes for management’s identification and reporting of material cybersecurity incidents.
The Company’s Board of Directors has primary oversight of our enterprise risk management program, which includes cybersecurity risk. Moreover, the Board of Directors is supported in its oversight by the Audit and Finance Committee and Public Policy and Environment Committee ("PPE Committee"), which share oversight responsibilities related to the Company’s information security programs.
The PPE Committee reviews technology issues pertinent to the Company including those associated with information and operational technology, cybersecurity and data security and assesses related Company strategies. Our Board of Directors, Audit and Finance Committee and PPE Committee each receives periodic updates on cybersecurity issues from management (including our Chief Information Security Officer (“CISO”)).
The Audit and Finance Committee reviews management’s cybersecurity and information security risk management programs and controls, including processes for management’s identification and reporting of material cybersecurity incidents. The PPE Committee reviews technology issues pertinent to the Company including those associated with information and operational technology, cybersecurity and data security and assesses related Company strategies.
For example, the CISO provides reports to the Audit and Finance Committee and PPE Committee at least annually regarding cybersecurity risks, as well as plans and strategies to mitigate those risks. Furthermore, our ERM Council annually reports its activities either directly to the Board of Directors or through the Audit and Finance Committee.
Our Board of Directors, Audit and Finance Committee and PPE Committee each receive periodic updates on cybersecurity issues from management (including our Chief Information Security Officer (“CISO”)). For example, the CISO provides reports to the Audit and Finance Committee and PPE Committee annually regarding cybersecurity risks, as well as plans and strategies to mitigate those risks.
The Disclosure Committee, General Counsel and Chief Financial Officer assess and determine materiality using the facts gathered and chronology of events provided by the Incident Command Team. 31 Table of Contents
The Disclosure Committee, General Counsel and Chief Financial Officer assess and determine materiality using the facts gathered and chronology of events provided by the Incident Command Team. If deemed material, the event will be timely reported on a Current Report on Form 8-K in accordance with applicable SEC rules.
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In addition, the Enterprise Risk Management Council (“ERM Council”) is a management-level team comprised of senior vice presidents and other business leaders responsible for managing enterprise risks and planning and organizing the activities of our organization to minimize the effects of risk on the Company's business and financial results.
Added
Each year, the Chief Audit Executive provides the Board of Directors and members of the ELT with a comprehensive update on the Company’s risk management activities. This update includes a structured, collaborative review through which key risks are examined and prioritized. In 2025, the Board of Directors identified seven priority risks for the Company, including cybersecurity.
Removed
The ERM Council regularly reports to the Board of Directors on areas of risk and risk management. The Chief Financial Officer serves as the ERM Council Lead. The Chief Audit Executive serves as the ERM Council Process Owner.
Added
The Company carries cyber insurance which provides coverage in connection with cybersecurity breaches. 32 Table of Contents Engagement of Third Parties The Company engages third parties in connection with assessing, identifying and managing its cybersecurity risks.
Removed
As part of our 80/20 strategic approach and our integration of DS Smith, the Company is evaluating how the ERM Council might operate in 2025 to ensure that our structure supports our strategic goals.
Added
In 2025, the Company began transitioning to a strategic outsourcing model for certain North America IT functions to enhance efficiency and resilience.
Added
The Company has employed the following processes to oversee and identify material risks from cybersecurity threats associated with the Company’s use of third-party service providers in North America and EMEA including the following: • The Company’s cybersecurity risk management program takes into account third-party systems whereby the Company could be impacted by the compromise of the security of vendors or other business relations of the Company, and the Company has a comprehensive third-party access management system. • The Company conducts risk-based due diligence on the profiles of third-party service providers with respect to cybersecurity risks prior to engagement. • Providers of critical and outsourced services are continuously monitored with respect to security risks, including periodic audits and compliance reviews. • The Company also requires service providers to adhere to the Company’s cybersecurity standards, maintain robust security controls, and provide prompt notification of any actual or suspected breach impacting Company data or operations.
Added
These measures are designed to mitigate risks associated with use of third parties including outsourcing of non- core IT functions overseas while maintaining compliance with applicable regulatory requirements and protecting the integrity of the Company’s systems and data. We expect the transition to be finalized in the second quarter of 2026.
Added
The Company also requires service providers to adhere to the Company’s cybersecurity standards, maintain robust security controls, and provide prompt notification of any actual or suspected breach impacting Company data or operations.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeYou can find a discussion about the level of planned capital investments for 2025 on page 45, and dispositions and restructuring activities as of December 31, 2024, on page 37 of Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations , and in Note 7 Acquisitions on page 72 of Item 8.
Biggest changeYou can find a discussion about the level of planned capital investments for 2026 and dispositions and restructuring activities as of December 31, 2025 in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and in Note 7 Acquisitions of Item 8. Financial Statements and Supplementary Data .
We continue to study the economics of modernization or adopting other alternatives for higher cost facilities. CAPITAL INVESTMENTS AND DISPOSITIONS Given the size, scope and complexity of our business interests, we continually examine and evaluate a wide variety of business opportunities and planning alternatives, including possible acquisitions and sales or other dispositions of properties.
We continue to study the economics of modernization or adopting other alternatives for higher cost facilities. 34 Table of Contents CAPITAL INVESTMENTS AND DISPOSITIONS Given the size, scope and complexity of our business interests, we continually examine and evaluate a wide variety of business opportunities and planning alternatives, including possible acquisitions and sales or other dispositions of properties.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS Information concerning certain legal proceedings of the Company is set forth in Note 13 Commitments and Contingent Liabilities on pages 79 through 83 of Item 8. Financial Statements and Supplementary Data which is incorporated herein by reference.
Biggest changeITEM 3. LEGAL PROCEEDINGS Information concerning certain legal proceedings of the Company is set forth in Note 14 Commitments and Contingent Liabilities of Item 8. Financial Statements and Supplementary Data which is incorporated herein by reference.
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.
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. ITEM 4.
Added
MINE SAFETY DISCLOSURES Not applicable. 35 Table of Contents PART II.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+218 added−1 removed1 unchanged
Biggest changeAs of December 31, 2024, approximately $2.96 billion aggregate shares of our common stock remained authorized for repurchase. 33 Table of Contents PERFORMANCE GRAPH The performance graph shall not be deemed "soliciting material" or to be "filed" with the Commission or subject to Regulation 14A or 14C under, or to the liabilities of Section 18 of the Securities Exchange Act of 1934, as amended, (the "Exchange Act") and will not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent the Company specifically incorporates it by reference into such a filing.
Biggest changePERFORMANCE GRAPH The performance graph shall not be deemed "soliciting material" or to be "filed" with the Commission or subject to Regulation 14A or 14C under, or to the liabilities of Section 18 of the Securities Exchange Act of 1934, as amended, (the "Exchange Act") and will not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent the Company specifically incorporates it by reference into such a filing. 36 Table of Contents The following line graph compares a $100 investment in Company stock on December 31, 2020 with a $100 investment in our peer group and the S&P Composite-500 Stock Index (S&P 500 Index) also made at market close on December 31, 2020.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES As of the filing of this Annual Report on Form 10-K, the Company’s common shares are traded on the New York Stock Exchange (NYSE: IP) and on the London Stock Exchange (LSE: IPC).
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES As of the filing of this Annual Report on Form 10-K, the Company’s common stock is traded on the New York Stock Exchange (NYSE: IP) and the London Stock Exchange (LSE: IPC).
As of February 14, 2025, there were approximately 9,900 record holders of common stock of the Company. We pay regular quarterly cash dividends and expect to continue to pay regular quarterly cash dividends in the foreseeable future, though each quarterly dividend payment is subject to review and approval by our Board of Directors.
As of February 20, 2026 , there were approximately 9,994 record holders of common stock of the Company. We pay regular quarterly cash dividends and currently expect to continue to pay regular quarterly cash dividends in the foreseeable future, though each quarterly dividend payment is subject to review and approval by our Board of Directors.
The graph portrays total return, 2019-2024, assuming reinvestment of all dividends. 1) The companies included in the Peer Group are DS Smith PLC, Klabin S.A., Mondi Group, Packaging Corporation of America, and Stora Enso Group. 2) Returns are calculated in $USD.
The graph portrays total return, 2020-2025, assuming reinvestment of all dividends. 1) The companies included in the Peer Group are Klabin S.A., Mondi Group, Packaging Corporation of America and Stora Enso Group. 2) Returns are calculated in $USD. ITEM 6. RESERVED ITEM 7.
On October 11, 2022, our Board of Directors increased the authorization up to a total of $3.35 billion shares. This repurchase program does not have an expiration date.
On October 11, 2022, our Board of Directors increased the authorization up to a total of $3.35 billion shares. This repurchase program does not have an expiration date. As of December 31, 2025 , approximately $2.96 billion aggregate shares of our common stock remained authorized for repurchase.
Period Total Number of Shares Purchased (a) Average Price Paid per Share Total Number of Shares (or Units) Purchased as Part of Publicly Announced Programs Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs (in billions) October 1, 2024 - October 31, 2024 11,250 $ 48.62 — $ 2.96 November 1, 2024 - November 30, 2024 3,381 51.57 — 2.96 December 1, 2024 - December 31, 2024 1,957 53.64 — 2.96 Total 16,588 (a) 16,588 shares were acquired from employees or members of our Board of Directors as a result of share withholdings to pay income taxes under the Company's stock program.
Period Total Number of Shares Purchased (a) Average Price Paid per Share Total Number of Shares (or Units) Purchased as Part of Publicly Announced Programs Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs (in billions) October 1, 2025 - October 31, 2025 7,562 $ 46.97 — $ 2.96 November 1, 2025 - November 30, 2025 12,146 45.27 — 2.96 December 1, 2025 - December 31, 2025 2,718 41.93 — 2.96 Total 22,426 (a) 22,426 shares were acquired from employees or members of our Board of Directors as a result of share withholdings to pay income taxes under the Company's stock program.
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The following line graph compares a $100 investment in Company stock on December 31, 2019 with a $100 investment in our peer group and the S&P Composite-500 Stock Index (S&P 500 Index) also made at market close on December 31, 2019.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included in “ Item 8. Financial Statements and Supplementary Data ” of this Annual Report on Form 10-K.
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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.
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Factors that could cause or contribute to those differences include those discussed below and elsewhere in this Annual Report on Form 10-K, particularly in Item 1A “Risk Factors” and “Forward-Looking Statements.” The following generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024 .
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Discussion of historical items in 2023 , and year-to-year comparisons between 2024 and 2023 , can be found in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 , filed with the SEC on February 21, 2025, under Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations. 37 Table of Contents EXECUTIVE SUMMARY 2025 Financial Summary • Net sales of $23.63 billion • Loss from continuing operations of $(2.84) billion includes the following: ◦ $2.47 billion pre-tax non-cash goodwill impairment charge ◦ $958 million non-cash accelerated depreciation associated with asset rationalization decisions ◦ $626 million of restructuring charges • Adjusted EBITDA (non-GAAP) from continuing operations of $2.98 billion (1) • Cash provided by operating activities of $1.70 billion • Free cash flow (non-GAAP) of $(159) million (1) (1) See " Non-GAAP Financial Measures " for a list of our non-GAAP financial measures and reconciliations to the most directly comparable GAAP measures.
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Overview Throughout 2025, we continued to execute a multi‑year transformation designed to simplify our portfolio, sharpen our regional focus and improve underlying earnings power. The Company undertook significant strategic and operational changes driven largely by our 80/20 performance system, the integration of DS Smith and the divestiture of our Global Cellulose Fibers ("GCF") business.
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The Company acquired DS Smith in early 2025 for an enterprise value of approximately $9.9 billion. The acquisition expanded our geographic reach across both the North America and EMEA regions, enabling advantaged cost positions, superior customer experiences and improved supply positions.
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Integration progressed rapidly during 2025, with teams applying the 80/20 performance system across both regions to streamline combined operations, optimize production footprints, and realize supply chain and commercial synergies. By year‑end, we had executed approximately $710 million of full run‑rate cost‑out actions, including synergy benefits attributable to the DS Smith combination.
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In North America, we continued to leverage 80/20 to simplify our business operations and focus our resources to accelerate growth. In our packaging business, we exited non-strategic export and specialty markets and rationalized higher cost capacity to better align with profitable customer demand.
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We achieved approximately $510 million of run-rate cost savings in 2025 with the closures of several mills and plants, allowing us to increase investment in our remaining assets. We also entered into a definitive agreement to divest our GCF business, positioning the company as a pure play leading sustainable packaging solutions company.
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Parallel with our efforts in North America, the Company advanced its integration and transformation strategy in EMEA, where it launched the 80/20 performance system with approximately $200 million of run-rate cost-out actions and synergy benefits actioned in 2025.
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Early adoption from teams across the regions has supported a smooth rollout as the Company positions the EMEA business for its next phase of operational focus and regional alignment. In the first quarter of 2026, we completed the sale of our GCF business to American Industrial Partners for $1.5 billion.
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We intend to use proceeds from the transaction to support strategic reinvestment in our packaging business, reduce debt to improve our credit profile and preserve financial flexibility and maintenance of a strong investment- grade credit rating.
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On January 29, 2026, the Company announced plans to separate into two independent, publicly traded companies: International Paper will be comprised of its current business in North America including both legacy IP and DS Smith assets, and the EMEA packaging business will be comprised of both legacy DS Smith and IP assets in EMEA.
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The separation is expected to be structured as a spinoff of the EMEA business to shareholders, with International Paper retaining a meaningful ownership stake. The transaction is expected to be completed within 12 to 15 months, subject to customary approvals, including final approval by IP’s Board of Directors, filing and effectiveness of registration statement with the U.S.
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SEC and publication of prospectus approved by the U.K. Financial Conduct Authority. No assurance can be provided regarding the ultimate timing or structure of the proposed separation or its eventual completion. The Company expects that creating two regionally focused businesses will allow each to tailor strategies to their distinct markets, enhance management focus, and support long-term value creation.
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In 2026, the Company expects 38 Table of Contents to continue advancing its transformation strategy through the planned strategic separation, targeted investment agendas, and continued operational improvements across its regional platforms. This strategic action represents the next phase of our transformation and is designed to advance long‑term value creation for customers and shareholders.
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Following the separation, International Paper plans to intensify its focus on its North American operations, with an emphasis on targeted capital allocation, investments in productivity and innovation, and disciplined strategic acquisitions.
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As previously disclosed, IP intends to retain a meaningful ownership stake in the EMEA packaging business, which is expected to be listed on both London Stock Exchange and the New York Stock Exchange. For additional information about the separation, including process steps and anticipated impacts, please see Note 22 Subsequent Events of Item 8.
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Financial Statements and Supplementary Data and Part I, Item 1A. Risk Factors - Risks Related to the Separation. Market Conditions Throughout 2025, the Company operated in challenging demand environments across both North America and EMEA.
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In North America, market demand was weaker than expected throughout most of the year as economic uncertainty from tariffs, slower housing starts, weaker consumer sentiment and lower industrial production negatively impacted box demand.
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Although industry growth was subdued throughout 2025, we grew above market in the second half of the year as we gained commercial momentum through our focused customer service and reliability efforts.
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In EMEA, overall demand remained relatively soft throughout 2025 as macroeconomic uncertainty and volatility persisted, influenced by trade uncertainty, geopolitical tensions in the Middle East and the Russia- Ukraine conflict. 39 Table of Contents Non-GAAP Financial Measures The non-GAAP financial measures presented in this Form 10-K as referenced below 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.
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In addition, because not all companies utilize identical calculations, the Company's presentation of non-GAAP measures in this Form 10-K may not be comparable to similarly titled measures disclosed by other companies, including companies in the same industry as the Company. Users are cautioned not to place undue reliance on any non-GAAP financial measures presented in this Form 10-K.
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Below are the Company’s key non‑GAAP financial measures and their definitions: Adjusted operating earnings (loss) and adjusted operating earnings (loss) per share are defined as earnings (loss) from continuing operations (a GAAP measure) excluding net special items and non-operating pension expense (income).
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Earnings (loss) from continuing operations and diluted earnings (loss) from continuing operations per share are the most directly comparable GAAP measures. The Company calculates adjusted operating earnings (loss) by excluding the after-tax effect of non-operating pension expense (income) and net special items, as described in greater detail below, from earnings (loss) from continuing operations reported under GAAP.
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Adjusted operating earnings (loss) per share is calculated by dividing adjusted operating earnings (loss) by diluted average shares of common stock outstanding.
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Management uses these non-GAAP financial measures to focus on ongoing 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.
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The Company believes that using these non-GAAP financial measures, along with the most directly comparable GAAP measures, provides for a more complete analysis of the Company's results of operations.
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Adjusted EBITDA from continuing operations is defined as earnings (loss) from continuing operations before income taxes and equity earnings (loss), interest expense, net, net special items, non-operating pension expense (income) and depreciation and amortization. Earnings (loss) from continuing operations before income taxes and equity earnings (loss) is the most directly comparable GAAP measure.
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Beginning in 2025, management is also using this measure to focus on on-going operations and believes this measure is useful to investors.
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This change reflects investor feedback and management's view that Adjusted EBITDA from continuing operations provides a meaningful measure of the operating performance of the Company and helps enable investors to perform meaningful comparisons of past and present consolidated operating results from continuing operations.
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Free cash flow is defined as cash provided by (used for) operations less capital expenditures, and the most directly comparable GAAP measure is cash provided by (used for) operations.
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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.
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It should not be inferred that the entire free cash flow amount is available for discretionary expenditures. Operational income tax provision and operational effective income tax rate are calculated by adjusting the earnings (loss) from continuing operations before income taxes and equity earnings (loss), income tax provision (benefit) and rate to exclude net special items and non-operating pension expense (income).
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The most directly comparable GAAP measures are the reported income tax provision and effective income tax rate, respectively.
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Management believes that this presentation provides useful information to investors by providing a meaningful comparison of the income tax rate between past and present periods. 40 Table of Contents Below are reconciliations of the non‑GAAP financial measures noted above to their most directly comparable GAAP measures: Non-operating pension expense (income) represents amortization of prior service cost, amortization of actuarial gains/losses, expected return on assets and interest cost.
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The Company excludes these amounts from our adjusted operating earnings (loss) as the Company does not believe these items reflect ongoing operations. These particular pension cost elements are not directly attributable to current employee service.
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The Company includes service cost in our non-GAAP measure as it is directly attributable to employee service, and the corresponding employees’ other compensation elements, in connection with ongoing operations. See Effects of Special Items Expense (Income) for additional detail regarding the net special items expense (income) referenced in the tables below.
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Reconciliation of Earnings (loss) from continuing operations to Adjusted operating earnings (loss) In millions 2025 2024 Earnings (Loss) from Continuing Operations $ (2,838) $ 725 Add back - Non-operating pension expense (income) (12) (42) Add back - Net special items expense (income) 3,237 235 Income tax effect - Non-operating pension and special items (a) (487) (447) Adjusted Operating Earnings (Loss) $ (100) $ 471 (a) For the year ended December 31, 2025, this amount includes tax benefits of $271 million related to the EMEA goodwill impairment and $62 million related to capital losses associated with the announced agreement to sell our GCF business.
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This amount also includes tax expense of $3 million on the non-operating pension income and a tax benefit of $157 million associated with other special items. For the year ended December 31, 2024, this amount includes a tax benefit of $416 million related to internal legal entity restructuring.
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This amount also includes tax expense of $10 million on the non-operating pension income and a tax benefit of $41 million associated with other special items.
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Reconciliation of Earnings (loss) from continuing operations to Adjusted operating earnings (loss) on a per share basis 2025 2024 Diluted Earnings (Loss) Per Share from Continuing Operations $ (5.61) $ 2.05 Add back - Non-operating pension expense (income) per share (0.02) (0.12) Add back - Net special items expense (income) per share 6.40 0.66 Income tax effect per share - Non-operating pension and special items (0.97) (1.26) Adjusted Operating Earnings (Loss) Per Share $ (0.20) $ 1.33 Reconciliation of Earnings (loss) from continuing operations to Adjusted EBITDA from continuing operations In millions 2025 2024 Earnings (Loss) from Continuing Operations $ (2,838) $ 725 Add back: Income tax provision (benefit) (533) (361) Less: Equity earnings (loss), net of taxes (3) (5) Earnings (Loss) from Continuing Operations Before Income Taxes and Equity Earnings (Loss) (3,368) 369 Interest expense, net 372 214 Special items 3,237 245 Non-operating pension expense (income) (12) (42) Depreciation and amortization 2,747 850 Adjusted EBITDA from Continuing Operations $ 2,976 $ 1,636 41 Table of Contents Reconciliation of Cash provided by operations to Free cash flow In millions 2025 2024 Cash provided by operations $ 1,698 $ 1,678 Adjustments: Capital expenditures (1,857) (921) Free Cash Flow $ (159) $ 757 Reconciliation of Income tax provision (benefit) to Operational tax provision (benefit) and the reported effective income tax rate to the operational effective tax rate In millions 2025 2024 Provision (Benefit) Rate Provision (Benefit) Rate Income tax provision (benefit) and reported effective income tax rate $ (533) 16 % $ (361) (98) % Income tax effect - non-operating pension (income) expense and special items 487 447 Operational Tax Provision (Benefit) and Operational Effective Tax Rate $ (46) 32 % $ 86 15 % Effects of Net Special Items Expense (Income) Pre-tax special items included in continuing operations totaling $3.24 billion and $235 million were recorded in 2025 and 2024 , respectively.
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Details of these charges were as follows: Special Items In millions 2025 2024 PS EMEA goodwill impairment $ 2,467 (a) $ — Severance and other costs 626 (b) 104 (b) DS Smith combination costs 237 (c) 86 (c) Net (gains) losses on sales and impairments of businesses (25) (d) — Net (gains) losses on sales and impairments of assets (70) (e) (59) (e) Environmental remediation adjustments 2 (f) 60 (f) Strategic advisory fees — 37 (c) Third-party warehouse fire — 13 (g) Italy antitrust — (6) (h) Legal reserve adjustments — 10 (i) Interest related to settlement of tax audits — (10) (j) Total Pre-Tax Special Items $ 3,237 $ 235 (a) Non-cash goodwill impairment related to the Company's PS EMEA business segment recorded in impairment of goodwill.
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(b) Severance and other costs associated with the Company's 80/20 approach which includes the realignment of resources and mill strategic actions recorded primarily in restructuring and other charges, net.
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(c) Transaction related costs that the Company believes are not reflective of the Company's underlying operations. 2025 includes $29 million recorded in cost of products sold, $158 million recorded in selling and administrative expenses and $50 million recorded in taxes other than payroll and income taxes. 2024 includes $123 million recorded in selling and administrative expenses.
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(d) Includes a charge related to the sale of the Company's kraft paper bag business and a net gain related to the sale of five European box plants in Mortagne, Saint-Amand and Cabourg (France), Ovar (Portugal) and Bilbao (Spain) to satisfy regulatory commitments in connection with the DS Smith combination.
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(e) Includes gains on assets sales related to our permanently closed Courtland, Alabama paper mill and Orange, Texas containerboard mill and charges associated with the sale of the Company's aircraft and other assets.
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(f) Environmental remediation adjustments associated with remediation work at sites that have been closed/divested that the Company believes are not reflective of the Company's underlying operations recorded in cost of products sold. (g) The Company's cost for third-party damages associated with a warehouse fire in Morocco recorded in cost of products sold.
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(h) Settlement associated with an Italian antitrust matter initially recorded as a special item in 2019 recorded in cost of products sold. (i) Legal reserve adjustment associated with a previously discontinued business recorded in cost of products sold.
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(j) Interest income on tax overpayments in prior years associated with the settlement of certain tax audits recorded in interest expense, net. 42 Table of Contents RESULTS OF OPERATIONS The following summarizes our results from operations for the year ended December 31, 2025 compared with the year ended December 31, 2024 : In millions 2025 2024 Change Net sales $ 23,634 $ 15,835 $ 7,799 Cost of products sold 16,637 11,397 5,240 Selling and administrative expenses 2,050 1,703 347 Depreciation and amortization 2,747 851 1,896 Distribution expenses 2,000 1,180 820 Taxes other than payroll and income taxes 210 119 91 Restructuring charges, net (a) 626 103 Impairment of goodwill (a) 2,467 — Net (gains) losses on sales and impairments of businesses (a) (25) — Net (gains) losses on sales and impairments of assets (a) (70) (59) Interest expense, net 372 214 158 Non-operating pension (income) expense (12) (42) Earnings from continuing operations before income taxes and equity earnings (loss) (3,368) 369 Income tax provision (benefit) (533) (361) Equity earnings (loss), net of taxes (3) (5) Earnings (loss) from continuing operations (2,838) 725 Discontinued operations, net of taxes (678) (168) Net earnings (loss) $ (3,516) $ 557 (a) Refer to special items discussion on page 41 .
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TWELVE MONTHS ENDED DECEMBER 31, 2025 COMPARED TO THE TWELVE MONTHS ENDED DECEMBER 31, 2024 The following is a discussion of International Paper’s consolidated results of operations for the year ended December 31, 2025 , and the major factors affecting these results compared to 2024 .
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Refer to the Effects of Net Special Items Expense (Income) section for details of net special items expense (income) discussed below. Net sales Compared to the year ended December 31, 2024 , net sales for the year ended December 31, 2025 increased by $7.8 billion . DS Smith accounted for $7.8 billion of net sales in 2025.
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For IP legacy, the increase of $46 million was driven by higher sales prices partially offset by lower sales volumes. Additional details on net sales are provided in the Business Segment Results section below.
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Cost of products sold Compared to the year ended December 31, 2024 , cost of products sold for the year ended December 31, 2025 increased by $5.2 billion .
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DS Smith accounted for $5.8 billion of total cost of products sold in 2025 and net special items charges of $31 million were included in 2025 compared to $77 million in 2024.
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For IP legacy, cost of products sold was impacted by lower raw materials and operating materials of $542 million, partially offset by increases in fuel and utility expenses of $111 million. Selling and administrative expenses Compared to the year ended December 31, 2024 , selling and administrative expenses for the year ended December 31, 2025 increased by $347 million .
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DS Smith accounted for $442 million of total selling and administrative expenses in 2025 and net special items charges of $158 million were included in 2025 compared to $123 million in 2024.
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For IP legacy, selling and administrative expenses were impacted by decreases in incentive compensation of $148 million and increases in other costs of $21 million. 43 Table of Contents Depreciation and amortization Compared to the year ended December 31, 2024 , depreciation and amortization for the year ended December 31, 2025 increased by $1.9 billion .
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DS Smith accounted for $1.3 billion of depreciation and amortization in 2025, including $403 million of accelerated depreciation associated with mill and other strategic actions. For IP legacy, the increase compared to 2024 was due to an increase of $553 million in accelerated depreciation related to mill and other strategic actions in 2025.
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Distribution expenses Compared to the year ended December 31, 2024 , distribution expenses for the year ended December 31, 2025 increased by $820 million . DS Smith accounted for $858 million of distribution expenses in 2025. For IP legacy, distribution expenses were impacted by lower freight costs and lower sales volumes compared to 2024.
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Taxes other than payroll and income taxes Compared to the year ended December 31, 2024 , taxes other than payroll and income taxes for the year ended December 31, 2025 increased by $91 million . DS Smith accounted for $33 million of taxes other than payroll and income taxes in 2025.
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Net special items charges of $50 million were included in taxes other than payroll and income taxes in 2025. For IP legacy, taxes other than payroll and income taxes were impacted by higher real estate taxes compared to 2024.
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Interest expense, net Compared to the year ended December 31, 2024 , interest expense, net for the year ended December 31, 2025 increased by $158 million . DS Smith accounted for $160 million of interest expense, net in 2025 and net special items income of $10 million was included in interest expense, net in 2024.
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For IP legacy, interest expense, net was impacted by higher interest income. Income tax provision (benefit) A net income tax benefit from continuing operations of $533 million was recorded for 2025 and the reported effective income tax rate was 16%.
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This includes a tax benefit of $271 million related to the EMEA goodwill impairment and a tax benefit of $62 million related to capital losses associated with the announced agreement to sell our GCF business, which closed in January 2026.
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Excluding these items, a $157 million net tax benefit for other special items and $3 million tax expense related to non-operating pension income, the operational tax provision (benefit) (non- GAAP) for 2025 was $46 million, or 32% of pre-tax earnings before equity earnings.
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A net income tax benefit from continuing operations of $361 million was recorded for 2024 and the reported effective income tax rate was (98)%. This includes a tax benefit of $416 million related to internal legal entity restructuring.
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Excluding these items, a $41 million net tax benefit for other special items and $10 million tax expense related to non-operating pension income, the operational tax provision (non-GAAP) for 2024 was $86 million, or 15% of pre- tax earnings before equity earnings.
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Compared to the year ended December 31, 2024 , the operational effective tax rate increased by 17% in 2025. DS Smith accounted for a significant increase in the foreign taxes driving up the operational effective tax rate in the year.
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Refer to " Non-GAAP Financial Measures " for a reconciliation of the net income tax provision (benefit) (GAAP) to the operational income tax provision (benefit) (non-GAAP) and the reported effective income tax rate (GAAP) to the operational effective income tax rate (non-GAAP).
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Discontinued operations, net of taxes On August 21, 2025, the Company announced that it had reached a definitive agreement with American Industrial Partners ("AIP") to sell its GCF business. All current and historical operating results of the GCF business are presented as Discontinued Operations, net of taxes, in the consolidated statements of operations.
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All current and historical assets and liabilities of the GCF business are classified as Assets held for sale and Long-Term Assets Held For Sale and Liabilities held for sale and Long-Term Liabilities Held For Sale in the accompanying consolidated balance sheets. See Note 8 - Divestiture of Item 8.
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Financial Statements and Supplementary Data for further 44 Table of Contents details. Discontinued operations, net of taxes for 2025 and 2024 includes the operating earnings of the GCF business.

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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ITEM 6. RESERVED ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included in “ Item 8. Financial Statements and Supplementary Data ” of this Annual Report on Form 10-K.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. 36 Executive Summary 37 Results of Operations 42 Description of Business Segments 44 Business Segment Results 44 Liquidity and Capital Resources 45 Critical Accounting Policies and Significant Accounting Estimates 49 Legal Proceedings 53 Recent Accounting Developments 53 Effect of Inflation 53 Foreign Currency Effects 53 Market Risk 54 Table of Contents INTERNATIONAL PAPER COMPANY INDEX TO ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2025
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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.
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Factors that could cause or contribute to those differences include those discussed below and elsewhere in this Annual Report on Form 10-K, particularly in “Risk Factors” and “Forward-Looking Statements.” 34 Table of Contents The following generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
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Discussion of historical items in 2022, and year-to-year comparisons between 2023 and 2022, can be found in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 16, 2024, under Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations.
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EXECUTIVE SUMMARY Full-year 2024 net earnings attributable to shareholders were $557 million ($1.57 per diluted share) compared with $288 million ($0.82 per diluted share) for full-year 2023. In 2024, we initiated our strategy to deliver profitable growth as the low-cost, most reliable and innovative sustainable packaging solutions provider for our customers.
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Through a disciplined 80/20 approach, we restructured our corporate organization, added resources to the business, reduced structural costs through footprint actions and successfully piloted regional box plant optimization. Our earnings stabilized in the fourth quarter 2024 and we intend to accelerate earnings improvement in 2025.
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Our Go-to-Market value over volume reset was largely complete in 2024 and we expect the final unfavorable impacts to volume to be behind us later in 2025. There was a significant focus throughout 2024 on cost reduction.
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This included a zero-up approach to the corporate organization, including shifting resources to the business and reducing corporate staffing to the level required as a public company. We expect this to reduce costs by approximately $120 million on a run rate basis.
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Additionally, we made the challenging decision to close five box plants and our Global Cellulose Fibers Georgetown, South Carolina mill. These actions are expected to remove roughly another $110 million of annual cost on a run rate basis. Mill reliability was an issue in 2024 resulting in elevated costs throughout the year.
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This presents a significant cost reduction opportunity and we will continue to improve the reliability at our mills and optimize our mill and box system so that we are able to reduce structural costs.
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Finally, we completed the acquisition of DS Smith on January 31, 2025, creating a global leader in sustainable packaging solutions, focused on the attractive and growing North American and EMEA regions. Comparing 2024 financial performance to 2023, sales in our North American Industrial Packaging business were relatively flat versus the prior year.
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This was due in part to higher price and mix driven by favorable prior index movements and the execution of our go-to-market strategy. The improved price and mix was offset by lower volumes as we worked through customer contract restructuring. This decline was in line with our expectations.
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Sales in our Global Cellulose Fibers business were lower compared to prior year. This was due to lower price and mix driven by prior index movements. Volume was relatively flat versus 2023.
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Cost of products sold in our North American Industrial Packaging business was lower versus the prior year in line with lower sales during 2024 along with lower maintenance outage expenses. This was partially offset by higher costs associated with mill reliability issues along with increased input costs on higher recovered fiber costs.
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Cost of products sold in our Global Cellulose Fibers business was lower versus the prior year in line with lower sales during 2024 along with lower maintenance outage expenses and lower input costs. Cost of products sold includes higher costs associated with mill reliability issues.
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Selling and administrative expenses were higher in our North American Industrial Packaging and Global Cellulose Fibers businesses primarily driven by higher employee incentive compensation expense. Distribution expenses were lower in both our North American Industrial Packaging and Global Cellulose Fibers businesses primarily driven by lower freight expense on reduced sales.
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Looking ahead to the first quarter 2025 in our North American Industrial Packaging business, as compared to the fourth quarter 2024 and without consideration of the DS Smith acquisition, we expect slightly lower price and mix based on lower export pricing observed to date along with an unfavorable seasonal mix impact.
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Volume is expected to be slightly higher in the first quarter 2025 due to two more shipping days partially offset by the near-term impact of our go-to-market strategy.
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Operations and costs are expected to increase earnings driven by the benefits of our box plant optimization as well as the non-repeat of the higher incentive compensation costs and other unfavorable items from the fourth quarter 2024. Maintenance outage expense is expected to be marginally lower relative to the fourth quarter 2024.
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Input costs are expected to be relatively flat as higher energy costs will be offset by lower recovered fiber costs. Finally, in February we announced our plan to close the containerboard mill in Campti, Louisiana with operations expected to cease by March 31, 2025.
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We estimate that the closure will result in aggregate pre-tax charges of approximately $357 million, including pre-tax noncash asset write-offs of approximately $311 million (of which $276 million is accelerated depreciation), and pre-tax cash severance and other shutdown charges of approximately $46 million.
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In our Global Cellulose Fibers business, we expect price and mix to be lower due to unfavorable prior index movements. We expect volume to be relatively flat.
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Operations and costs are expected to increase earnings due to 35 Table of Contents improved mill performance and reliability along with the non-repeat of the higher incentive compensation costs and other unfavorable one-time items from the fourth quarter 2024.
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Maintenance outage expense is expected to decrease earnings while input costs are expected to be stable relative to the fourth quarter 2024. In closing, we believe 2025 will be a transformational year. During the first few months, we anticipate earnings will continue the stabilization trend we saw in the fourth quarter 2024.
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As we progress further in the year, we expect our earnings to progressively ramp up as the commercial contract restructuring is completed and the 80/20 initiatives deliver value. We have an ambitious pipeline of capital projects that we predict will facilitate the regional optimization of our box system and deliver profitable market share growth.
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We believe we are well on our way to building a performance-driven and customer-centric culture. We are confident we have developed the right strategy and a concrete plan that will deliver customer excellence and drive profitable growth. We believe our actions will drive transformational improvements and create significant value for our shareholders.
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Acquisition of DS Smith On January 31, 2025, the Company, through its indirect wholly owned subsidiary, International Paper UK Holdings Limited, completed the closing (the “Closing”) of its previously announced business combination of the entire issued and to be issued ordinary shares of DS Smith plc, a public limited company registered in England and Wales that has since been re-registered as DS Smith Limited, a private limited company (“DS Smith”).
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The business combination was effected by means of a court-sanctioned scheme of arrangement between DS Smith and shareholders of DS Smith under Part 26 of the UK Companies Act 2006, as amended.
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The consummation followed the Company’s April 16, 2024 announcement pursuant to Rule 2.7 of the United Kingdom City Code on Takeovers and Mergers disclosing the terms of the business combination (the “Rule 2.7 Announcement”), pursuant to which, for each ordinary share of DS Smith (the “DS Smith Shares”), DS Smith shareholders would receive 0.1285 of a new share of common stock of the Company, par value $1.00 per share (the “Company Common Stock”), resulting in the issuance of 178,126,631 new shares of Company Common Stock (the “New Company Common Stock”).
Removed
On January 24, 2025, the European Commission issued its Phase I clearance of the business combination, conditional on International Paper entering into commitments to divest its plants in Mortagne, Saint-Amand, and Cabourg (France), Over (Portugal) and Bilbao (Spain). As such, the Company has agreed to divest these locations.
Removed
On February 4, 2025, the DS Smith Shares were delisted from the London Stock Exchange (the “LSE”) and the shares of New Company Common Stock began trading on the New York Stock Exchange under the symbol “IP” and the shares of Company Common Stock, including the shares of New Company Common Stock, began trading on the LSE via a secondary listing under the symbol “IPC.” Reconciliation of Net earnings (loss) to Adjusted operating earnings (loss) Adjusted Operating Earnings and Adjusted Operating Earnings Per Share are non-GAAP measures defined as net earnings (loss) (a GAAP measure) excluding discontinued operations, net special items and non-operating pension expense (income).
Removed
Net earnings (loss) and Diluted earnings (loss) per share are the most directly comparable GAAP measures. The Company calculates Adjusted Operating Earnings by excluding the after-tax effect of discontinued operations, non-operating pension expense (income) and net special items, as described in greater detail below, from net earnings (loss) reported under GAAP.
Removed
Adjusted Operating Earnings Per Share is calculated by dividing Adjusted Operating Earnings by diluted average shares of common stock outstanding.
Removed
Management uses these non-GAAP measures to focus on ongoing operations and believes that such non-GAAP 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.
Removed
The Company believes that using these non-GAAP measures, along with 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.
Removed
The Company excludes these amounts from our 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.
Removed
The Company includes service cost in our non-GAAP measure as it is directly attributable to employee service, and the corresponding employees’ other compensation elements, in connection with ongoing operations. 36 Table of Contents The following is a reconciliation of Net earnings (loss) to Adjusted operating earnings (loss) on a total basis.
Removed
Additional detail is provided below regarding the net special items expense (income) referenced in the charts below.
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In millions 2024 2023 Net Earnings (Loss) $ 557 $ 288 Less - Discontinued operations, net of taxes (gain) loss — 14 Earnings (Loss) from Continuing Operations 557 302 Add back - Non-operating pension expense (income) (42) 54 Add back - Net special items expense (income) (a) 363 150 Income tax effect - Non-operating pension and special items (b) (478) (68) Adjusted Operating Earnings (Loss) $ 400 $ 438 (a) Adjusted operating earnings (non-GAAP), and adjusted operating earnings per share (non-GAAP) for the year ended December 31, 2023, included in this Annual Report on Form 10-K have been adjusted to include the pre-tax charge of $422 million for accelerated depreciation related to mill strategic actions in the year ended December 31, 2023.
Removed
This charge was previously treated as a special item and excluded from these non-GAAP earnings measures. (b) Special items for the year ended December 31, 2024 include a tax benefit of $416 million related to internal legal entity restructuring.
Removed
This amount also includes tax expense of $10 million on the non-operating pension income and a tax benefit of $72 million associated with special items. Special items for the year ended December 31, 2023 includes a tax benefit of $23 million for the settlement of tax audits and tax expense of $4 million related to internal legal entity restructuring.
Removed
This amount also includes tax benefit of $13 million on the non-operating pension expense and a tax benefit of $36 million associated with special items.
Removed
In millions Three Months Ended December 31, 2024 Three Months Ended September 30, 2024 Three Months Ended December 31, 2023 Net Earnings (Loss) $ (147) $ 150 $ (284) Less - Discontinued operations, net of taxes (gain) loss — — — Earnings (Loss) from Continuing Operations (147) 150 (284) Add back - Non-operating pension expense (income) (8) (12) 14 Add back - Net special items expense (income) 182 114 124 Income tax effect - Non-operating pension and special items (a) (34) (99) (29) Adjusted Operating Earnings (Loss) $ (7) $ 153 $ (175) (a) This amount for the three months ended December 31, 2024 includes tax expense of $2 million on the non-operating pension income and a tax benefit of $36 million associated with special items.
Removed
Special items for the three months ended September 30, 2024 include a tax benefit of $78 million related to internal legal entity restructuring. This amount also includes tax expense of $3 million on the non-operating pension income and a tax benefit of $24 million associated with special items.
Removed
Special items for the three months ended December 31, 2023 include tax expense of $4 million related to internal legal entity restructuring. This amount also includes tax benefit of $3 million on the non-operating pension expense and a tax benefit of $30 million associated with special items.
Removed
Effects of Net Special Items Expense (Income) Pre-tax special items included in continuing operations totaling $363 million and $150 million were recorded in 2024 and 2023, respectively.
Removed
Details of these charges were as follows: Special Items In millions 2024 2023 Mill closure costs $ 121 (a) $ 118 (a) Severance and other costs 105 (b) (19) (j) DS Smith combination costs 86 (c) — Environmental remediation reserve adjustments 60 (d) 36 (d) Strategic advisory fees 37 (c) — Third-party warehouse fire 13 (e) — Legal reserve adjustments 10 (f) — Global Cellulose Fibers strategic options costs 5 (c) Net (gains) on sales of fixed assets (58) (g) — Italy antitrust (6) (h) — Equity method investment impairment — 18 (k) Interest related to settlement of tax audits (10) (i) (6) (i) Interest related to the timber monetization settlement — 3 (l) Total Pre-Tax Special Items $ 363 $ 150 (a) Severance and other closure costs associated with our mill strategic actions recorded in restructuring and other charges, net.
Removed
(b) Severance and other costs associated with the Company's 80/20 strategic approach which includes the realignment of resources recorded in restructuring and other charges, net. (c) Transaction related costs that the Company believes are not reflective of the Company's underlying operations recorded in selling and administrative expenses.
Removed
(d) Environmental remediation adjustments associated with remediation work at sites that have been closed/divested that the Company believes are not reflective of the Company's underlying operations recorded in cost of products sold. (e) The Company's cost for third-party damages associated with a warehouse fire in Morocco recorded in cost of products sold.
Removed
(f) Legal reserve adjustment associated with a previously discontinued business recorded in cost of products sold.
Removed
(g) Net gains related to the sale of a building at our permanently closed Orange, Texas containerboard mill, miscellaneous land sales and other items that the Company does not believe are reflective of the Company's underlying operations recorded in net (gains) losses on fixed assets.
Removed
(h) Settlement associated with an Italian antitrust matter initially recorded as a special item in 2019 recorded in cost of products sold. (i) Interest income on tax overpayments in prior years associated with the settlement of certain tax audits recorded in interest expense, net.
Removed
(j) Revision of severance estimates related to the Company's Build a Better IP initiative recorded in restructuring and other charges, net. 37 Table of Contents (k) Other-than-temporary impairment of an equity method investment recorded in equity earnings (loss), net of taxes. (l) Interest income related to the settlement of the timber monetization restructuring tax matter recorded in interest expense, net.
Removed
The following is a reconciliation of Net earnings (loss) to Adjusted operating earnings (loss) on a per share basis. 2024 2023 Diluted Earnings (Loss) Per Share $ 1.57 $ 0.82 Less - Discontinued operations, net of taxes (gain) loss per share — 0.04 Diluted Earnings (Loss) Per Share from Continuing Operations 1.57 0.86 Add back - Non-operating pension expense (income) per share (0.12) 0.15 Add back - Net special items expense (income) per share 1.02 0.43 Income tax effect per share - Non-operating pension and special items (1.34) (0.19) Adjusted Operating Earnings (Loss) Per Share $ 1.13 $ 1.25 Three Months Ended December 31, 2024 Three Months Ended September 30, 2024 Three Months Ended December 31, 2023 Diluted Earnings (Loss) Per Share $ (0.42) $ 0.42 $ (0.82) Less - Discontinued operations, net of taxes (gain) loss per share — — — Diluted Earnings (Loss) Per Share from Continuing Operations (0.42) 0.42 (0.82) Add back - Non-operating pension expense (income) per share (0.02) (0.03) 0.04 Add back - Net special items expense (income) per share 0.52 0.33 0.36 Income tax effect per share - Non-operating pension and special items (0.10) (0.28) (0.09) Adjusted Operating Earnings (Loss) Per Share $ (0.02) $ 0.44 $ (0.51) Cash provided by operations, including discontinued operations, totaled approximately $1.7 billion and $1.8 billion for 2024 and 2023, respectively.
Removed
The Company generated free cash flow of approximately $757 million in 2024 and $692 million in 2023. Free cash flow is a non-GAAP measure, which equals cash provided by operations less cash invested in capital projects, and the most directly comparable GAAP measure is cash provided by (used for) operations.
Removed
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.
Removed
It should not be inferred that the entire free cash flow amount is available for discretionary expenditures.
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The following are reconciliations of free cash flow to cash provided by operations: In millions 2024 2023 Cash provided by operations $ 1,678 $ 1,833 Adjustments: Cash invested in capital projects (921) (1,141) Free Cash Flow $ 757 $ 692 In millions Three Months Ended December 31, 2024 Three Months Ended September 30, 2024 Three Months Ended December 31, 2023 Cash provided by operations $ 397 $ 521 $ 492 Adjustments: Cash invested in capital projects (260) (212) (305) Free Cash Flow $ 137 $ 309 $ 187 The non-GAAP financial measures presented in this Annual Report on Form 10-K as referenced above 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.
Removed
In addition, because not all companies utilize identical calculations, the Company's presentation of non-GAAP measures in this Annual Report on Form 10-K may not be comparable to similarly titled measures disclosed by other companies, including companies in the same industry as the Company.
Removed
Investors are cautioned not to place undue reliance on any non-GAAP financial measures used in this Annual Report on Form 10-K. LIQUIDITY AND CAPITAL RESOURCES International Paper generated $1.7 billion of cash flow from operations for the year ended December 31, 2024, compared with $1.8 billion, including discontinued operations, in 2023.
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Capital spending for 2024 totaled $921 million, or 71% of depreciation and amortization expense. Our liquidity position remains strong, supported by approximately $1.9 billion of credit facilities.
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RESULTS OF OPERATIONS While the operating results for International Paper’s various business segments are driven by a number of business-specific factors, changes in International Paper’s operating results are closely tied to changes in general economic conditions in North America, 38 Table of Contents Europe, Latin America, North Africa and the Middle East.
Removed
Factors that impact the demand for our products include industrial non-durable goods production, consumer preferences, consumer spending and movements in currency exchange rates. Product prices are affected by a variety of factors including general economic trends, inventory levels, currency exchange rate movements and worldwide capacity utilization.
Removed
In addition to these revenue-related factors, net earnings are impacted by various cost drivers, the more significant of which include changes in raw material costs, principally wood, recovered fiber and chemical costs; energy costs; freight costs; mill outage costs; salary and benefits costs, including pensions; and manufacturing conversion costs.
Removed
The following summarizes our results from continuing operations for the year ended December 31, 2024 compared with the year ended December 31, 2023: In millions 2024 2023 Net sales $ 18,619 $ 18,916 Cost of products sold 13,376 13,629 Selling and administrative expenses 1,840 1,360 Depreciation and amortization 1,305 1,432 Distribution expenses 1,475 1,575 Taxes other than payroll and income taxes 147 154 Restructuring and other charges, net 221 99 Net (gains) losses on sales of fixed assets (58) — Interest expense, net 208 231 Non-operating pension (income) expense (42) 54 Earnings from continuing operations before income taxes and equity earnings (loss) 147 382 Income tax provision (benefit) (415) 59 Equity earnings (loss), net of taxes (5) (21) Earnings (loss) from continuing operations $ 557 $ 302 TWELVE MONTHS ENDED DECEMBER 31, 2024 COMPARED TO THE TWELVE MONTHS ENDED DECEMBER 31, 2023 The following is a discussion of International Paper’s consolidated results of operations for the year ended December 31, 2024, and the major factors affecting these results compared to 2023.
Removed
Refer to the Effects of Net Special Items Expense (Income) section beginning on page 37 for details of net special items expense (income) discussed below. Net sales Net sales for the year ended December 31, 2024 decreased by $297 million or 2% compared to the year ended December 31, 2023.
Removed
The decrease was driven by lower sales volumes partially offset by higher sales prices. International net sales (based on the location of the seller and including U.S. exports) totaled $5.2 billion or 28% of total sales in 2024. This compares with international net sales of $5.3 billion in 2023 or 28% of total sales.
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Additional details on net sales are provided in the Business Segment Results section below. Cost of products sold Compared to the year ended December 31, 2023, cost of products sold for the year ended December 31, 2024 decreased by $253 million or 2%.
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Net special items includes charges of $77 million and $36 million in the year ended December 31, 2024 and the year ended December 31, 2023, respectively, in cost of products sold.
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Additionally, there were decreases of $368 million driven by lower sales and lower fuel and packaging expense, partially offset by an increase in raw materials, maintenance and other expenses of $75 million.
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Selling and administrative expenses Compared to the year ended December 31, 2023, selling and administrative expenses for the year ended December 31, 2024 increased by $480 million or 35%. Net special items includes charges of $128 million for the year ended December 31, 2024 in selling and administrative expenses.
Removed
There were no special items included in selling and administrative expense for the year ended December 31, 2023. The increase in 2024 compared to the 2023 was primarily driven by higher incentive compensation of $325 million.
Removed
Depreciation and amortization Compared to the year ended December 31, 2023, depreciation and amortization for the year ended December 31, 2024 decreased by $127 million or 9%. Depreciation expense includes $233 million and $422 million for the years ended December 31, 2024 and December 31, 2023, respectively, for accelerated depreciation related to mill and other 80/20 strategic actions.
Removed
The decrease in 2024 compared to 2023 was primarily driven by less accelerated depreciation, partially offset by the write-down of fixed assets for the Ixtac, Mexico box plant fire in 2024. 39 Table of Contents Distribution expenses Compared to the year ended December 31, 2023, distribution expenses for the year ended December 31, 2024 decreased by $100 million or 6%, primarily driven by lower freight expense of $76 million reflecting lower sales volumes.
Removed
Taxes other than payroll and income taxes Compared to the year ended December 31, 2023, taxes other than payroll and income taxes for the year ended December 31, 2024 decreased by $7 million or 5%, primarily driven by lower real estate tax expense of $8 million due to the divestiture of real estate.
Removed
Interest expense, net Compared to the year ended December 31, 2023, interest expense, net for the year ended December 31, 2024 decreased by $23 million or 10%. Net special items includes income of $10 million and $3 million for the years ended December 31, 2024 and December 31, 2023, respectively, in interest expense, net.
Removed
The decrease in 2024 compared to 2023 was primarily driven by higher interest income of $22 million in 2024. Income tax provision (benefit) Refer to Income Taxes section on pages 41 and 42 for discussion on income tax provision (benefit) and income tax rates.
Removed
Net earnings (loss) and earnings (loss) from continuing operations Full year 2024 net earnings totaled $557 million ($1.57 per diluted share), compared with net earnings of $288 million ($0.82 per diluted share) in 2023. Amounts in 2023 include the results of discontinued operations.
Removed
Earnings from continuing operations after taxes in 2024 and 2023 were as follows: In millions 2024 2023 Earnings from continuing operations $ 557 (a) $ 302 (b) (a) Includes $125 million of net special items income and $32 million of non-operating pension income. (b) Includes $95 million of net special items charges and $41 million of non-operating pension expense.

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Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

99 edited+40 added−69 removed82 unchanged
Biggest changeOur expenditures on capital projects could be higher than anticipated, the projects may experience unanticipated disruptions or delays in completing the projects and the desired benefits from those projects may not be achieved, including as a result of a deterioration in macroeconomic conditions, the unavailability of capital equipment or related materials, delays in obtaining permits or other requisite approvals or changes in laws and regulations.
Biggest changeThese risks include a deterioration in macroeconomic conditions, shortages or higher costs of capital equipment or materials, delays in obtaining permits or other required approvals, changes in laws and regulations or operational challenges. Our ability to advance capital investments depends on the availability of cash flow.
The desire to maintain an investment grade rating may cause us to take certain actions designed to improve our respective cash flow, including a sale of assets, suspension or reduction of dividends and reductions in capital expenditures and working capital. Certain of our debt agreements provide for an interest rate increase in case of a credit rating downgrade.
The desire to maintain an investment grade rating may cause us to take certain actions designed to improve our respective cash flow, including the sale of assets, suspension or reduction of dividends and reductions in capital expenditures and working capital. Certain of our debt agreements provide for an interest rate increase in case of a credit rating downgrade.
We are subject to the risk that a bank with currently issued irrevocable letters of credit supporting installment notes in connection with Temple Inland’s 2007 sales of forestlands, may be downgraded below a required rating. Prior to 2013, certain banks had fallen below the required ratings threshold and were successfully replaced, or waivers were obtained regarding their replacement.
We are subject to the risk that a bank with currently issued irrevocable letters of credit supporting installment notes in connection with Temple Inland’s 2007 sales of forestlands, may be downgraded below the required rating. Prior to 2013, certain banks had fallen below the required ratings threshold and were successfully replaced, or waivers were obtained regarding their replacement.
We work with a large number of third-party vendors, suppliers, platforms, software, applications, and technologies, each of which may be subject to a cybersecurity incident or information technology failure that impacts our business or operations. We may be required to spend significant resources to verify the implementation of cybersecurity controls by our vendors and suppliers.
We work with a large and increasing number of third-party vendors, suppliers, platforms, software, applications, and technologies, each of which may be subject to a cybersecurity incident or information technology failure that impacts our business or operations. We may be required to spend significant resources to verify the implementation of cybersecurity controls by our vendors and suppliers.
We rely heavily on the use of certain raw materials (principally virgin wood fiber, recycled fiber, caustic soda, starch and adhesives), energy sources (principally biomass, natural gas, electricity and fuel oil) and third-party transport companies. The market price of virgin wood fiber varies based upon availability, demand, quality, and source.
We rely heavily on the use of certain raw materials (principally virgin wood fiber, recycled fiber, caustic soda, starch and adhesives), energy sources (principally biomass, natural gas, electricity and fuel oil) and third-party transport companies. The market price of virgin wood fiber varies based on availability, demand, quality, and source.
The costs associated to comply with these laws and regulations are substantial and possible future laws and regulations or changes to existing laws and regulations (including the imposition of higher taxes) could require us to incur additional expenses or capital expenditures or result in restrictions on or suspensions of operations.
The costs associated with these laws and regulations are substantial and possible future laws and regulations or changes to existing laws and regulations (including the imposition of higher taxes) could require us to incur additional expenses or capital expenditures or result in restrictions on or suspensions of operations.
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.
Through the 80/20 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.
RISKS RELATED TO LEGAL PROCEEDINGS AND COMPLIANCE COSTS Results of legal proceedings could have a material effect on our consolidated financial results. We are a party to various legal, regulatory and governmental proceedings and other related matters, including with respect to environmental matters.
RISKS RELATED TO LEGAL PROCEEDINGS AND COMPLIANCE COSTS Results of legal proceedings could have a material effect on our consolidated financial results. We are a party to various legal, regulatory and governmental proceedings and other related matters, including with respect to antitrust and environmental matters.
RISKS RELATED TO OUR OPERATIONS We are subject to cybersecurity and information technology risks related to breaches of security pertaining to sensitive company, customer, employee and vendor information as well as breaches in the technology used to manage operations and other business processes.
We are subject to cybersecurity and information technology risks related to breaches of security pertaining to sensitive company, customer, employee and vendor information as well as breaches in the technology used to manage operations and other business processes.
General economic conditions may adversely affect industrial non-durable goods production, consumer confidence and spending, and employment levels, all of which impact demand for our products, or otherwise adversely affect our business.
General economic conditions may adversely affect industrial non-durable goods production, consumer confidence and spending, and employment levels, all which impact demand for our products, or otherwise adversely affect our business.
Any of our manufacturing facilities 22 Table of Contents or any machines within an otherwise operational facility, could cease operations unexpectedly due to a number of events, including: • adverse weather events like fires, floods, earthquakes, hurricanes, winter storms and extreme temperatures, or other catastrophes (including adverse weather conditions that may be intensified by climate change); • the effect of a drought or reduced rainfall on its water supply; • disruption in the supply of raw materials or other manufacturing inputs; • terrorism or threats of terrorism; • information system disruptions or failures due to any number of causes, including cyber-attacks; • domestic and international laws and regulations applicable to us and any of our respective business partners, including joint venture partners, around the world; • unscheduled maintenance outages; • prolonged power failures; • an equipment failure; • a chemical spill or release; • explosion of a boiler or other equipment; • damage or disruptions caused by third parties operating on or adjacent to a manufacturing facility; • disruptions in the transportation infrastructure, including roads, bridges, railroad tracks and tunnels; • a widespread outbreak of an illness or any other communicable disease, or any other public health crisis or any impacts related to government regulation as a result thereof; • failure of third-party service providers and business partners to satisfactorily fulfill their commitments and responsibilities in a timely manner and in accordance with agreed upon terms; • labor difficulties; and • other operational problems.
Any of our manufacturing facilities or any machines within an otherwise operational facility, could cease operations unexpectedly due to a number of events, including: • adverse weather events like fires, floods, earthquakes, hurricanes, winter storms and extreme temperatures, or other catastrophes (including adverse weather conditions that may be intensified by climate change); • the effect of a drought or reduced rainfall on its water supply; • disruption in the supply of raw materials or other manufacturing inputs; • terrorism or threats of terrorism, security incidents or other threats to employee safety; • information system disruptions or failures due to any number of causes, including cyber-attacks; • domestic and international laws and regulations applicable to us and any of our respective business partners, including joint venture partners, around the world; • unscheduled maintenance outages; • prolonged power failures; • an equipment failure; 21 Table of Contents • a chemical spill or release; • explosion of a boiler or other equipment; • damage or disruptions caused by third parties operating on or adjacent to a manufacturing facility; • disruptions in the transportation infrastructure, including roads, bridges, railroad tracks and tunnels; • a widespread outbreak of an illness or any other communicable disease, or any other public health crisis or any impacts related to government regulation as a result thereof; • failure of third-party service providers and business partners to satisfactorily fulfill their commitments and responsibilities in a timely manner and in accordance with agreed upon terms; • labor difficulties; and • other operational problems.
Should an unfavorable outcome occur in connection with the legal, regulatory or governmental proceedings or our other loss contingencies or we become subject to any such loss contingencies in the future, there could be a material adverse impact on our financial results. See Note 13 - Commitments and Contingent Liabilities of Item 8.
Should an unfavorable outcome occur in connection with the legal, regulatory or governmental proceedings or our other loss contingencies or we become subject to any such loss contingencies in the future, there could be a material adverse impact on our financial results. See Note 14 - Commitments and Contingent Liabilities of Item 8.
Our continued growth will depend on our ability to retain existing customers and attract new customers. Our future growth will depend on our ability to retain existing customers, attract new customers as well as make existing customers and new customers increase their volume commitments.
Our future growth will depend on our ability to retain existing customers, attract new customers as well as make existing customers and new customers increase their volume commitments.
Such tariffs and any further legislation or actions taken by the U.S. federal government that restrict trade, such as additional tariffs, trade barriers, and other protectionist or retaliatory measures taken by governments in Europe, Asia, and other countries, could adversely impact our ability to sell products and services in our international markets.
If lasting, such tariffs and any further legislation or actions taken by the U.S. federal government that restrict trade, such as additional tariffs, trade barriers, and other protectionist or retaliatory measures taken by governments in Europe, Asia, and other countries, could adversely impact our ability to sell products and services in our international markets.
If we were found liable to pay such amounts, this could have an adverse effect on our business, financial condition, results of operations and/or cash flow. See Note 13 - Commitments and Contingent Liabilities of Item 8. Financial Statements and Supplementary Data for further information.
If we were found liable to pay such amounts, this could have an adverse effect on our business, financial condition, results of operations and/or cash flow. See Note 14 - Commitments and Contingent Liabilities of Item 8. Financial Statements and Supplementary Data for further information.
By virtue of our secondary listing on the LSE, we are now subject to the listing requirements of the LSE, the Market Abuse Regulation and Disclosure Guidance and Transparency Rules. The Exchange Act requires that we file annual and other reports with respect to our business, financial condition and results of operations.
By virtue of our secondary listing on the LSE, we are also subject to the listing requirements of the LSE, the Market Abuse Regulation and Disclosure Guidance and Transparency Rules. The Exchange Act requires that we file annual and other reports with respect to our business, financial condition and results of operations.
We are subject to the risk that the expected benefits from such transactions may not be achieved. This failure could require an impairment charge to be recorded for goodwill or other intangible assets, which could lead to decreased assets and reduced net earnings.
We are subject to the risk that the expected benefits from such transactions and capital investments may not be achieved. This failure could require an impairment charge to be recorded for goodwill or other intangible assets, which could lead to decreased assets and reduced net earnings.
Our operations are subject to regulation under a wide variety of domestic and international laws, regulations and other government requirements, including, among others, those relating to the environment, health and safety, labor and employment, data privacy, tax, trade and health care.
Our operations are subject to regulation under a wide variety of domestic and international laws, regulations and other government requirements, including, among others, those relating to the environment, health and safety, labor and employment, data privacy, tax, trade, competition and corruption and health care.
Uncertainty in the legal regulatory regime relating to AI may require significant resources to modify and maintain business practices to comply with international laws, the nature of which cannot be determined at this time. Several jurisdictions, including Europe, the U.S. federal government, and certain U.S. states, have already proposed or enacted laws, regulations, and other requirements governing AI.
Uncertainty in the global and legal regulatory regime relating to AI may require significant resources to modify and maintain business practices to comply with international laws, the nature of which cannot be determined at this time. Multiple jurisdictions, including Europe, the U.S. federal government, and certain U.S. states, have already proposed or enacted laws, regulations, and other requirements governing AI.
Specifically, the U.S. federal government has implemented tariffs on certain foreign goods and may implement additional tariffs on foreign goods.
Specifically, the U.S. federal government implemented tariffs on certain foreign goods and may implement additional tariffs on foreign goods.
This, along with the current competitive labor market and ongoing inflationary conditions, has led to higher labor costs. In addition, we rely on our key executive and management personnel to manage our business efficiently and effectively. The unanticipated departure of key executive and management employees, particularly in a challenging market for attracting and retaining employees, could adversely affect our business.
This, along with the current competitive labor market and ongoing cost-pressured conditions, has led to higher labor costs. In addition, we rely on our key executive and management personnel to manage our business efficiently and effectively. The unanticipated departure of key executive and management employees, particularly in a challenging market for attracting and retaining employees, could adversely affect our business.
A downgrade of ratings below investment grade will likely eliminate our ability to access the commercial paper market, may limit access to the capital markets, have an adverse effect on the market price of our securities, increase borrowing costs and require us to 27 Table of Contents post collateral for derivatives in a net liability position.
A downgrade of ratings below investment grade will likely eliminate our ability to access the commercial paper market, may limit access to the capital markets, have an adverse effect on the market price of our securities, increase borrowing costs and require us to post collateral for derivatives in a net liability position.
Material disruptions at one of our manufacturing facilities could negatively impact financial results. We operate facilities in compliance with applicable rules and regulations and take measures to minimize the risks of disruption. A material disruption at our corporate headquarters, a manufacturing facility or key mill could prevent us from meeting customer demand, reduce sales and/or negatively impact our financial condition.
We operate facilities in compliance with applicable rules and regulations and take measures to minimize the risks of disruption. A material disruption at our corporate headquarters, a manufacturing facility or key mill could prevent us from meeting customer demand, reduce sales and/or negatively impact our financial condition.
As a global producer of renewable fiber-based packaging and pulp products, we operate in many different countries. As a result, we are vulnerable to risks related to our international operations.
As a global producer of renewable fiber-based packaging products, we operate in many different countries. As a result, we are vulnerable to risks related to our international operations.
Changes in interest rates impacts the earnings on our short-term cash investments, the interest rate payable on our variable rate debt and credit agreements, the cost of supply chain financing and the refinance rate on our short-term debt.
Changes in interest rates impact the earnings on our short-term cash investments, the interest rate payable on our variable rate debt and credit agreements, the cost of supply chain financing and the refinance rate on our short-term debt.
Any uninsured losses could have a material adverse effect on our business, financial condition, results of operations and/or future prospects. We may not be able to adequately secure and protect our intellectual property rights, which could harm our competitive advantage.
Any uninsured losses could have a material adverse effect on our business, financial condition, results of operations and/or future prospects. 25 Table of Contents We may not be able to adequately secure and protect our intellectual property rights, which could harm our competitive advantage.
Future health pandemics could also adversely impact portions of our business to varying degrees, including as the result of lower demand for certain products, supply chain and labor disruptions, and higher costs. These effects could have a material impact on our business, results of operations, cash flow, liquidity, or financial condition.
Future health epidemics or pandemics could also adversely impact portions of our business to varying degrees, including as the result of change in demand for certain products, supply chain and labor disruptions, and higher costs. These effects could have a material impact on our business, results of operations, cash flow, liquidity, or financial condition.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations ) and in the Company’s other filings with the Securities and Exchange Commission.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations ) and in the Company’s other filings with the U.S. Securities and Exchange Commission.
Any of these possibilities could have a material adverse effect on our business, financial condition, results of operations and/or future prospects. We may fail to identify or leverage digital and/or AI transformation initiatives.
Any of these possibilities could have a material adverse effect on our business, financial condition, results of operations and/or future prospects. We may fail to identify, prioritize or implement digital and/or AI transformation initiatives.
The current cyber threat environment presents increased risk for all companies, including those in 19 Table of Contents our industry. Like other global companies, our systems are subject to recurring attempts by third parties to access information, manipulate data or disrupt operations.
The current cyber threat environment presents increased risk for all companies, including those in our industry. Like other global companies, our systems are subject to recurring attempts by third parties to access information, manipulate data or disrupt operations.
The downgrade of one or more of these banks may subject us to additional costs of securing a replacement letter-of-credit bank or could result in an acceleration of payments of up to $486 million in deferred income taxes if replacement banks cannot be obtained.
The downgrade of one or more of these banks may subject us to additional costs of securing a replacement letter-of-credit bank or could result in an acceleration of deferred income taxes of $487 million if replacement banks cannot be obtained.
In Europe, we have collective agreements in place with trade unions, and also have agreements in place with a European Works Council, which brings together employee representatives from the different European countries in which we operate and provides a forum for information sharing and consultation.
In Europe, we have collective agreements in place with trade unions, and also have agreements in place with the European Works Council, which brings together employee representatives from the different European countries in which we operate and provides a forum 22 Table of Contents for information sharing and consultation.
Financial Statements and Supplementary Data for further information. For example, we (through both International Paper and our newly acquired DS Smith subsidiaries operating in Italy) are among a number of companies operating in the paper packaging industry subject to a decision by the Italian Competition Authority concerning anti-competitive behavior in Italy.
Financial Statements and Supplementary Data for further information. For example, we (through both International Paper and our DS Smith legacy subsidiaries operating in Italy) are among several of companies operating in the paper packaging industry subject to a decision by the Italian Competition Authority concerning anti-competitive behavior in Italy.
We may also be adversely affected by catastrophic or other unforeseen events, including health epidemics or pandemics, natural disasters, geopolitical events, military conflicts, terrorism, port and canal blockages and similar disruptions, political, financial or social instability, or civil or social unrest.
We may also be adversely affected by catastrophic or other unforeseen events, natural disasters, geopolitical events, military conflicts, terrorism, port and canal blockages and similar disruptions, political, financial or social instability, or civil or social unrest.
Trade protection measures in favor of local producers of competing products, including governmental subsidies, tax benefits and other measures giving local producers a competitive advantage may also adversely impact our operating results and our business prospects in these countries.
Trade protection measures in favor of local producers of competing products, including governmental subsidies, tariffs, tax benefits and other measures may give local producers a competitive advantage and adversely impact our operating results and our business prospects in these countries.
Moreover, other states and governmental authorities around the world have introduced or passed, or are considering, similar legislation which may impose varying standards and 21 Table of Contents requirements on data collection, use and processing activities.
Moreover, other states and governmental authorities around the world have introduced or passed, or are considering, similar legislation which may impose varying standards and requirements on data collection, use and processing activities.
Our global operations are subject to complex and evolving domestic and international data privacy laws and regulations, such as the European Union’s General Data Protection Regulation, the UK's General Data Protection Regulation, any supplemental applicable European Union member state or UK national data protection laws, China’s Personal Information Protection Law and comprehensive privacy laws in many U.S. states, including California, Connecticut, Colorado, Utah, and Virginia.
Our global operations are subject to complex and evolving domestic and international data privacy laws and regulations, such as the European Union’s General Data Protection Regulation, the UK's General Data Protection Regulation, any supplemental applicable European Union member state or UK national data protection laws, China’s Personal Information Protection Law and comprehensive privacy laws in many U.S. states.
As such, tax controversy matters may result in previously unrecorded tax expenses, accelerated cash tax payments, higher future tax expenses, or the assessment of interest and penalties. As with many technological innovations, AI presents risks and challenges that could affect its adoption, and therefore our business.
As such, tax controversy matters may result in previously unrecorded tax expenses, accelerated cash tax payments, higher future tax expenses, or the assessment of interest and penalties. AI continues to evolve rapidly, and, as with many technological innovations, it presents risks and challenges that could affect its adoption and our business.
These Brazilian tax matters relate to assessments for the tax years 2007-2015 of approximately $95 million in tax (adjusted for variation in currency exchange rates) and approximately $235 million in interest, penalties, and fees (adjusted for variation in currency exchange rates).
These Brazilian tax matters relate to assessments for the tax years 2007-2015 of approximately $106 million in tax (adjusted for variation in currency exchange rates) and approximately $288 million in interest, penalties, and fees (adjusted for variation in currency exchange rates).
In addition, we are and may become subject to other loss contingencies, both known and unknown, which 26 Table of Contents may relate to past, present and future facts, events, circumstances and occurrences.
In addition, we are and may become subject to other loss contingencies, both known and unknown, which may relate to past, present and future facts, events, circumstances and occurrences.
We have employed and expect to continue to employ, strategies and tools to reduce the volatility of energy costs and ensure a degree of certainty over future energy costs. However, there can be no certainty that those strategies and tools will continue to manage such impact in the future.
We have employed and expect to continue to employ, strategies, including hedging a portion of our energy costs, and risk mitigation tools to reduce the volatility of energy costs and ensure a degree of certainty over future energy costs. However, there can be no certainty that those strategies and tools will continue to manage such impact in the future.
The level of our indebtedness could have important consequences to our financial condition, operating results and business, including the following: • it may limit our ability to obtain additional debt or equity financing for working capital, capital expenditures, product development, dividends, share repurchases, debt service requirements, acquisitions and general corporate or other purposes; • a portion of our cash flows from operations will be dedicated to payments on indebtedness and will not be available for other purposes, including operations, capital expenditures and future business opportunities; • the debt service requirements of our indebtedness could make it more difficult for us to satisfy other obligations; • it may limit our ability to adjust to changing market conditions, including to take actions in connection with changes in interest rates (such as in the current elevated interest rate environment), and place us at a competitive disadvantage compared to our competitors that have less debt; • it may increase our exposure to risks related to fluctuations in foreign currency as we earn profits in a variety of currencies around the world and our debt is denominated in U.S. dollars; • it may increase our exposure to the risk of increased interest rates insofar as we are compelled to refinance indebtedness at higher interest rates, which risk is heightened by the current high interest rate environment; and • it may increase our vulnerability to a downturn in general economic conditions or in our business, and may make us unable to carry out capital spending that is important to our growth.
The level of our indebtedness could have important consequences to our financial condition, operating results and business, including the following: • it may limit our ability to obtain additional debt or equity financing for working capital, capital expenditures, product development, dividends, share repurchases, debt service requirements, acquisitions and general corporate or other purposes; • a portion of our cash flows from operations will be dedicated to payments on indebtedness and will not be available for other purposes, including operations, capital expenditures and future business opportunities; • the debt service requirements of our indebtedness could make it more difficult for us to satisfy other obligations; • it may limit our ability to adjust to changing market conditions, including taking actions in connection with changes in interest rates (such as in the current elevated interest rate environment), and place us at a competitive disadvantage compared to our competitors that have less debt; • it may increase our exposure to risks related to fluctuations in foreign currency as we earn profits in a variety of currencies around the world and our debt is denominated in U.S. dollars, British pounds and Euros; • it may increase our exposure to the risk of increased interest rates insofar as we are compelled to refinance indebtedness in an environment where rates, despite moderating in 2025, remain elevated and subject to ongoing volatility; and 27 Table of Contents • it may increase our vulnerability to a downturn in general economic conditions or in our business and may make us unable to carry out capital spending that is important to our growth.
Accordingly, the assessments total approximately $330 million (adjusted for variation in currency exchange rates), although interest, penalties and fees continue to accrue over time. Under the tax matters agreement, our potential liability for such assessments would currently be approximately $210 million (adjusted for variation in currency exchange rates).
Accordingly, the assessments total approximately $394 million (adjusted for variation in currency exchange rates), although interest, penalties and fees continue to accrue. Under the tax matters agreement, our potential liability for such assessments would currently be approximately $274 million (adjusted for variation in currency exchange rates).
Improper handling and disclosure of or access to personal data in violation of other data privacy and protection laws could cause reputational harm and loss of consumer confidence and subject us to government enforcement actions (including fines), or result in private litigation, which could result in loss of revenue, increased costs, liability for monetary damages, fines and/or criminal prosecution, all of which could negatively affect our business and operating results.
Any such unauthorized access, use or disclosure in violation of applicable privacy and data protection laws could cause reputational harm and loss of consumer confidence and subject us to government enforcement actions (including fines), or result in private litigation, which could result in loss of revenue, increased costs, liability for monetary damages, fines and/or criminal prosecution, all of which could negatively affect our business and operating results.
Corporate transactions of this nature that we may pursue involve a number of special risks, including with respect to the inability to realize business goals with such transactions as noted above, including our acquisition assumptions, the focus of management’s attention on these transactions and the assimilation of acquired businesses into existing operations, the demands on financial, operational and information technology systems resulting from acquired businesses, our ability to integrate personnel, labor models, financials, customer relationships, supply chain and logistics, IT and other systems successfully, business culture compatibility, the possibility of becoming responsible for substantial contingent or unanticipated legal liabilities as the result of acquisitions or other corporate transactions, and increasing the scope geographic diversity and complexity of our operations.
Corporate transactions of this nature that we may pursue involve a number of special risks, including with respect to the inability to realize business goals with such transactions as noted above, including our assumptions, the focus of management’s attention on these transactions, the assimilation or separation of businesses, the demands on financial, operational and information technology systems, our ability to integrate and separate personnel, labor models, financials, customer relationships, supply chain and logistics, IT and other systems successfully, business culture compatibility, the possibility of becoming responsible for substantial contingent or unanticipated legal liabilities as the result of corporate transactions, and changes in our geographic footprint and in the complexity of our operations.
The changing laws, regulations and standards relating to corporate governance, ESG matters and public disclosures in various jurisdictions create uncertainty for public companies, increase legal and compliance costs and make activities more time consuming.
The changing laws, regulations and standards relating to corporate governance, sustainability matters and public disclosures in various jurisdictions create uncertainty for public 19 Table of Contents companies, increase legal and compliance costs and make activities more time consuming.
Among the benefits expected from potential as well as completed acquisitions and joint ventures are synergies, cost savings, growth opportunities and access to new markets (or a combination thereof), and in the case of divestitures, the realization of proceeds from the sale of businesses and assets to purchasers who place a higher strategic value on such businesses and assets.
Among the benefits expected from the strategic separation of our EMEA packaging business, as well as completed acquisitions and joint ventures are synergies, cost savings, growth 23 Table of Contents opportunities and access to new markets (or a combination thereof), and in the case of divestitures, the realization of proceeds from the sale of businesses and assets to purchasers who place a higher strategic value on such businesses and assets.
Given the early stages of these claims and our intention to defend robustly against such claims, it is too early to predict or reasonably estimate the overall outcome or ultimate potential liability (if any) that might be incurred in connection therewith, and there can be no guarantee that the aggregate of possible damages could not have a material impact on our financial condition.
It is too early to predict or reasonably estimate the overall outcome or ultimate potential liability (if any) that might be incurred in connection therewith, and there can be no guarantee that the aggregate of possible damages could not have a material impact on our financial condition.
As part of our 80/20 strategic approach, we intend to guide investments and align resources to win with customers, while reducing complexity and cost across the Company. To that end, we have been implementing restructuring initiatives.
As part of our 80/20 approach, we intend to guide investments and align resources to win with customers, while reducing complexity and cost across the Company. To that end, we have been implementing restructuring initiatives. To that end, we have incurred, and expect to incur, charges in connection with our restructuring initiatives.
Competition and downward pricing pressure in the global packaging industry could negatively impact our financial results. We operate in a competitive international environment in all operating segments. Our products compete with products produced by other forest products companies.
Competition and downward pricing pressure in the global packaging industry could negatively impact our financial results. We operate in a competitive international environment. Our products compete with other forest products and packaging companies in the markets where we operate.
Any cybersecurity attack, data or security breach, other security incident, compromise, damage, disruption, outage or shutdown to our or the information technology systems or networks, or those of any businesses with which we interact could result in lost sales, business delays, negative publicity or reputational impact, and a loss of customer confidence, and have a material adverse effect on our business or financial results.
In addition, cybersecurity-related threats may remain undetected for an extended period of time. 24 Table of Contents Any cybersecurity attack, data or security breach, other security incident, compromise, damage, disruption, outage or shutdown to our or the information technology systems or networks, or those of any businesses with which we interact could result in lost sales, business delays, negative publicity or reputational impact, and a loss of customer confidence, and have a material adverse effect on our business or financial results.
For example, the Organization for Economic Cooperation and Development (the “OECD”), the EU and various countries (including countries in which we operate) have enacted or committed to enact a 15% global minimum tax applied on a country-by-country basis (the “Pillar Two rule”).
For example, the Organization for Economic Cooperation and Development (the “OECD”) has issued a framework pursuant to which EU and non-EU countries (including countries in which we operate) have enacted a 15% global minimum tax applied on a country- by-country basis (the “Pillar Two rule”).
Any failure by us to retain existing customers, attract new customers, and increase revenue from both new and existing customers could have a material adverse effect on our business, results of operations, financial condition and/or future prospects.
Furthermore, customers can and do switch purchases between competing packaging providers. Any failure by us to retain existing customers, attract new customers, and increase revenue from both new and existing customers could have a material adverse effect on our business, results of operations, financial condition and/or future prospects.
This applies to agreements governing approximately $539 million of our debt as of December 31, 2024. As a result, a downgrade in credit rating may lead to an increase in interest expenses.
This applies to agreements governing approximately $4.0 billion of our debt as of December 31, 2025. As a result, a downgrade in credit rating may lead to an increase in interest expenses.
In addition, changes to economic sanctions programs, such as in response to the conflict between Russia and Ukraine, could put us at risk of violating sanctions as a result of an existing presence in a newly sanctioned jurisdiction or relationship with a newly sanctioned entity if we fail or are unable to end such presence or relationship in a timely manner.
In addition, changes to economic sanctions programs, could put us at risk of violating sanctions because of an existing presence in a newly sanctioned jurisdiction or relationship with a newly sanctioned entity if we fail or are unable to end such presence or relationship in a timely manner.
Our environmental expenditures include, among other areas, those related to air and water quality, waste disposal and the cleanup of soil and groundwater, including situations where we have been identified as a potentially responsible party.
These investments may lead to higher operating expenses as the cost of compliance increases. Our environmental expenditures include, among other areas, those related to air and water quality, waste disposal and the cleanup of soil and groundwater, including situations where we have been identified as a potentially responsible party.
Further, following completion of our business combination with DS Smith, we are subject to an increasing number of cybersecurity reporting obligations in different jurisdictions that vary in their scope and application, which may add complexities in providing complete and reliable information about cybersecurity incidents to customers, counterparties, and regulators, as well as the public.
Further, we are subject to an increasing number of cybersecurity reporting obligations in different jurisdictions that vary in their scope and application, which may add complexities in providing complete and reliable information about cybersecurity incidents to customers, counterparties, and regulators, as well as the public. Corporate actions may impact our cybersecurity risk profile.
Further, labor disputes or other problems could lead to a substantial interruption to our business and have a material adverse effect on our business, financial condition, results of operations and/or future prospects. 23 Table of Contents Following the completion of our business combination with DS Smith, a significant number of our employees are represented by unions, trade unions and national works councils.
Further, labor disputes or other problems could lead to a substantial interruption to our business and have a material adverse effect on our business, financial condition, results of operations and/or future prospects. A significant number of our employees located outside of the U.S. are represented by unions, trade unions and national works councils.
Volatile and increasing energy prices, including as a consequence of the conflict between Russia and Ukraine and other geopolitical conflicts, or a failure to effectively implement such strategies and tools could have a material adverse effect on our business, financial condition, results of operations and/or future prospects.
Volatile and increasing energy prices, including as a consequence of the conflict between Russia and Ukraine as well as heightened geopolitical tensions in regions such as the Middle East, China, and recent events in Venezuela, or a failure to effectively implement such strategies and tools could have a material adverse effect on our business, financial condition, results of operations and/or future prospects.
RISKS RELATED TO MARKET AND ECONOMIC FACTORS We are affected by adverse developments in general business and economic conditions, which could have an adverse effect on the demand for our products, our financial condition and the results of our operations.
We are affected by developments in general business and economic conditions, which could have an adverse effect on the demand for our products, our financial condition and the results of our operations including our ability to pay a cash dividend.
Moreover, changing demographics and labor work force trends, including remote work and changing work-life balance expectations, may make it difficult for us to replace retiring or departing employees.
Moreover, changing demographics and labor work-force trends, including evolving expectations around remote and hybrid work, work-life balance expectations and increased return-to-office requirements, may make it difficult for us to attract, retain or replace retiring or departing employees.
Moreover, the hardware, software or applications we use may have inherent vulnerabilities or defects of design, manufacture or operations or could be inadvertently or intentionally implemented or used in a manner that could compromise information security. In addition, cybersecurity-related threats may remain undetected for an extended period of time.
Moreover, the hardware, software or applications we use may have inherent vulnerabilities or defects of design, manufacture or operations or could be inadvertently or intentionally implemented or used in a manner that could compromise information security.
Our strategy for long-term growth, productivity and profitability depends, in part, on our ability to accomplish prudent acquisitions, joint ventures, divestitures, spin-offs, and other corporate transactions and to realize the benefits expected from such transactions, including the acquisition of DS Smith as set forth above.
Our strategy for long-term growth, productivity and profitability depends, in part, on our ability to accomplish prudent acquisitions, joint ventures, divestitures, spin-offs, and other strategic corporate transactions and to realize the benefits expected from such transactions, including the planned separation of our EMEA packaging business.
Taking into account ongoing inflationary conditions in domestic and global markets, we have experienced, and may continue to experience, a significant increase in various costs, including recycled fiber, energy, freight, chemical, and other supply chain costs, which has adversely affected, and may continue to adversely affect, our operations. 15 Table of Contents Moreover, the availability of labor and the market price for fuel may affect third-party transportation costs.
Taking into account ongoing inflationary conditions in domestic and global markets, we have experienced, and may continue to experience, a significant increase in various costs, including recycled fiber, energy, freight, chemical, and other supply chain costs, which has adversely affected, and may continue to adversely affect, our operations.
Further, changes in customer or consumer preferences may increase or decrease the demand for fiber-based products and non-fiber substitutes. Customer and consumer preferences change based on, among other factors, cost, convenience, health concerns and perceptions and an increased awareness of sustainability considerations. In some areas, customers have increasingly shown interest in environmentally-friendly products such as fiber-based packaging.
Customer and consumer 15 Table of Contents preferences change based on, among other factors, cost, convenience, health concerns and perceptions and an increased awareness of sustainability considerations. In some areas, customers have increasingly shown interest in environmentally friendly products such as fiber-based packaging.
Moreover, negative economic conditions or other adverse developments with respect to our business have resulted in, and may in the future result in impairment charges which could be material.
Moreover, negative economic conditions or other adverse developments with respect to our business have resulted in and may in the future result in impairment charges, including impairments related to divested or acquired businesses whose carrying values may not be recoverable, any of which could be material.
There can be no assurance that future remediation requirements and compliance with existing and new laws and requirements will not require significant expenditures, or that existing reserves for specific matters will be adequate to cover future costs.
Following the separation of our EMEA packaging business, we will evaluate our exposure to international climate regulations. There can be no assurance that future remediation requirements and compliance with existing and new laws and requirements will not require significant expenditures, or that existing reserves for specific matters will be adequate to cover future costs.
We may be unable to realize the expected benefits and cost savings associated with restructuring initiatives, including our 80/20 strategic approach. We have restructured portions of our operations from time to time and have current restructuring initiatives taking place, and it is likely that we will engage in restructuring activities in the future.
We may be unable to realize the expected benefits and cost savings associated with restructuring initiatives, including our 80/20 approach. We have restructured portions of our operations from time to time and have current restructuring initiatives taking place and planned for North America and EMEA.
Additionally, the current U.S. presidential administration has indicated a desire to significantly increase the rates and broaden the scope of tariffs imposed on goods imported into the U.S., such as from China, which may strain international trade relations and increase the risk that foreign governments implement retaliatory tariffs on goods imported from the United States.
Additionally, the U.S. government in 2025 increased certain rates and broadened the scope of certain tariffs imposed on goods imported into the U.S., such as from China, which may strain international trade relations and increase the risk that foreign governments implement retaliatory tariffs on goods imported from the United States.
We have incurred, and, following completion of our business combination with DS Smith, expect to continue to incur and invest resources, significant capital, operating and other expenditures complying with applicable and forthcoming environmental laws and regulations, including with respect to GHG emissions and other climate-related matters. These investments may lead to higher operating expenses as the cost of compliance increases.
We have incurred, and, following completion of our planned separation of the EMEA packaging business, expect to continue to incur and invest resources, significant capital, operating and other expenditures complying with applicable and forthcoming environmental laws and regulations, including with respect to GHG emissions and other climate-related matters.
Substantially all of our business has experienced, and is expected to continue to experience, cycles relating to industry capacity, customer demand, and general economic conditions. The length and magnitude of these cycles have varied over time and by product.
Substantially all of our business has experienced, and is expected to continue to experience, cycles relating to industry capacity, customer demand, and general economic conditions. The length and magnitude of these cycles have varied over time and by product. Product prices and sales volumes have fallen in the past, and there can be no assurance that this will not recur.
We have variable rate debt in the aggregate amount of approximately $908 million as of December 31, 2024. Interest rates rose significantly during 2022 and 2023 28 Table of Contents with adjustments made by the Federal Reserve in 2024 to address economic conditions. Interest rates could remain volatile in 2025.
We have variable rate debt in the aggregate amount of approximately $2.1 billion as of December 31, 2025. Interest rates rose significantly during 2022-2024 but declined in 2025 following adjustments made by the Federal Reserve in response to economic conditions. Interest rates could remain volatile in 2026.
Negotiations between us and the United Steelworkers union (the “USW”) regarding the mill master collective bargaining agreement and related mill joint pension council master agreement resulted in new agreements which will expire August 2027 and September 2027, respectively.
The mill master collective bargaining agreement and related mill joint pension council master agreement with the United Steelworkers union (the "USW") will expire in August 2027 and September 2027, respectively. The converting master collective bargaining agreements and related converting joint pension council master agreement which will expire in April and September 2028, respectively.
In addition, our products compete with companies that produce substitutes for wood-fiber products, such as plastics and various types of metal. Customer shifts away from wood-fiber products toward such substitute products may adversely affect our business and financial results. Further, we depend on critical suppliers and key customers.
Customer shifts away from wood-fiber products toward such substitute products may adversely affect our business and financial results. Further, we depend on critical suppliers and key customers.
Tariffs could increase the cost of our products and the components and raw materials that go into making them. These increased costs could adversely impact the profit margin that we earn on our products, which could make our products less competitive and reduce consumer demand.
Tariffs have increased the cost of certain capital items, including materials and equipment used in our capital investments. These increased costs could adversely impact the profit margin that we earn on our products, which could make our products less competitive and reduce consumer demand.
Moreover, effective internal controls are necessary to provide reliable and accurate financial reports, and the integration of businesses may create complexity in our financial systems and internal controls and make them more difficult to manage. Integration of businesses into our internal control system could cause us to fail to meet our financial reporting obligations.
Moreover, effective internal controls are necessary to provide reliable and accurate financial reports, and the planned separation of our North America and EMEA businesses may create complexity in our financial systems and internal controls and make them more difficult to manage.
As of December 31, 2024, we had approximately $5.6 billion of outstanding indebtedness.
As of December 31, 2025, we had approximately $9.8 billion of outstanding indebtedness.
Any decrease in the price of shares of common stock on the NYSE could cause a decrease in the trading price of shares of common stock on the LSE and vice versa.
The trading prices of shares of common stock on these two exchanges may at times differ due to these and other factors. Any decrease in the price of shares of common stock on the NYSE could cause a decrease in the trading price of shares of common stock on the LSE and vice versa.
Additionally, while insurance coverage designed to address certain aspects of cyber risks may be in place, such insurance coverage may be insufficient to cover all losses or all types of claims that may arise in connection with such incidents. 20 Table of Contents We are subject to a wide variety of laws, regulations and other government requirements that may change in significant ways, and the cost of compliance with such requirements, or the failure to comply with such requirements, could impact our business and results of operations.
RISKS RELATED TO OUR OPERATIONS We are subject to a wide variety of laws, regulations and other government requirements that may change in significant ways, and the cost of compliance with such requirements, or the failure to comply with such requirements, could impact our business and results of operations.
The integration process could cause an interruption of, or loss of momentum in, the other activities of the Company, and our failure to meet the challenges involved in integrating DS Smith and realize the anticipated benefits of the business combination could adversely affect our business, financial condition and results of operations.
The restructuring and regional integration processes could cause an interruption of, or loss of momentum in, the other activities of the Company, and our failure to meet the challenges involved in successfully restructuring and regionally integrating legacy DS Smith and International Paper businesses in North America and EMEA, respectively, could adversely affect the ability to separate and our business financial condition, results of operations, and cash flows.

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