International Paper Reports Third Quarter 2026 Results
• Loss from continuing operations of $1.10 billion includes a $1.38 billion non- cash goodwill impairment charge for our Packaging Solutions EMEA business segment
Packaging Solutions North America Business segment operating profit of $427 million
(1) As a result of the planned separation of the EMEA packaging business and the subsequent U.K. regulatory requirements, the Company is no longer including our existing Packaging Solutions EMEA financial guidance in our guidance framework and does not anticipate providing such guidance in the future.
MEMPHIS, Tenn. – October 28, 2026 – International Paper (NYSE: IP; LSE: IPC) (the "Company") today announced results for the quarter ended September 30, 2026. “Our third-quarter results reflect meaningful progress on our strategy despite persistent macro headwinds,” said International Paper Chairman and CEO Andy Silvernail. “In North America, we are improving our operational performance, building a structurally lower-cost business and realizing the benefits of prior pricing actions, while continuing to create value for our customers. In EMEA, we executed well on our ongoing restructuring and cost-out initiatives, while the macro environment continued to weigh on results and pace of margin recovery.”
“We are executing on the core controllables in a more challenging world. We remain focused on building an advantaged cost position, delivering a superior customer experience and strengthening our relative supply position,” Silvernail added. “At the same time, we are advancing the separation of our EMEA packaging business. We have conviction in our strategy, confidence in our ability to execute and a clear path to becoming a stronger International Paper that delivers value for all stakeholders.”
The preliminary third quarter 2026 results discussed in this release will be finalized in our Quarterly Report on Form 10-Q, which we intend to file with the U.S. Securities and Exchange Commission on or about November 4, 2026. This release refers to certain non-GAAP financial measures, which are defined below.
Third Quarter Third Quarter Second Quarter 2026 2025 2026 ────────────────────────────────────────────────────────────────────────────── Diluted Earnings (Loss) Per $ -2.07 $ -0.81 $ -0.02 Share from Continuing Operations Add Back – Non-Operating Pension -0.03 -0.01 -0.03 Expense (Income) Add Back – Net Special 2.70 0.67 0.10 Items Expense (Income) Income Taxes - Non-Operating -0.23 -0.28 -0.01 Pension and Special Items Adjusted Operating Earnings $ 0.37 $ -0.43 $ 0.04 (Loss) Per Share (non-GAAP)
The Company believes that these non-GAAP financial measures, when viewed alongside the most directly comparable GAAP measures, provides for a more complete analysis of the Company's results from continuing operations. Reconciliations to the most directly comparable GAAP measures and an explanation of why management believes these non-GAAP financial measures provide useful information to investors are included later in this release.
is defined as earnings (loss) from continuing operations (a GAAP measure) before income taxes, equity earnings (loss), interest expense, net, net special items, non-operating pension expense (income) and depreciation and amortization. The most directly comparable GAAP measure is earnings (loss) from continuing operations.
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). The Company calculates adjusted operating earnings (loss) (non-GAAP) by excluding the after-tax effect of non-operating pension expense (income) and net special items from the earnings (loss) from continuing operations reported under U.S. GAAP. Adjusted operating earnings (loss) per share is calculated by dividing adjusted operating earnings (loss) by the diluted average shares of common stock outstanding. The most directly comparable GAAP measures are earnings (loss) from continuing operations and diluted earnings (loss) per share from continuing operations.
is defined as cash provided by (used for) operating activities (a GAAP measure) less capital expenditures. The most directly comparable GAAP measure is cash provided by (used for) operations.
is a non-GAAP financial measure defined as business segment operating profit before depreciation and amortization and excluding the Recycling business adjusted EBITDA. Business segment operating profit is defined as earnings (loss) before income taxes and equity earnings, but including the impact of less than wholly owned subsidiaries, and excluding interest expense, net, net special items and non-operating pension expense. Business segment operating profit at a segment level is a measure reported to our management for purposes of making decisions about allocating resources to our business segments and assessing the performance of our business segments and is presented in our financial statement footnotes in accordance with ASC 280. The most directly comparable GAAP measure is business segment operating profit (loss).
For discussion of net special items and non-operating pension expense (income), see the disclosure that follows Effects of Net Special Items and Consolidated Statement of Operations and related notes included later in this release.
The following table presents net sales by business segment and business segment operating profit (loss), which is the Company's measure of segment profitability. Business segment operating profit (loss) is a measure reported to our management for purposes of making decisions about allocating resources to our business segments and assessing the performance of our business segments. Third quarter 2026 net sales by business segment and business segment operating profit (loss) compared with the second quarter of 2026 and the third quarter of 2025 are as follows:
(In millions) Net Sales by Third Third Second Business Quarter Quarter Quarter Segment 2026 2025 2026 ────────────────────────────────────────────────────────────────────────────── Packaging Solutions $ 3,880 $ 3,898 $ 3,688 North America Packaging Solutions 2,280 2,310 2,287 EMEA Corporate and 37 14 29 Inter-seg… Sales Net Sales $ 6,197 $ 6,222 $ 6,004 Business Segment Operating Profit (Loss) Packaging Solutions $ 427 $ -166 $ 204 North America Packaging Solutions -73 -58 -80 EMEA
business segment operating profit (loss) in the third quarter of 2026 was $427 million compared with $204 million in the second quarter of 2026. In the third quarter of 2026, net sales increased reflecting higher sales prices partially offset by lower sales volumes driven by a softer demand environment. Cost of products sold decreased driven by lower planned maintenance outage costs and lower sales volumes, partially offset by higher input costs for recovered fiber, energy and fuel. Improved mill performance drove lower operating costs including the non-repeat of the Riverdale paper machine conversion. This was partially offset by the impact of suspended operations at Pine Hill. Depreciation and amortization expense increased due to two additional months of depreciation expense in the third quarter compared to the second quarter for the NORPAC mill and additional box system investments. Distribution expense increased due to higher freight costs. Results also reflected a full quarter of earnings from the NORPAC mill acquisition compared with one month of earnings in the second quarter of 2026.
business segment operating profit (loss) in the third quarter of 2026 was $(73) million compared with $(80) million in the second quarter of 2026. Net sales decreased slightly in the third quarter of 2026 compared with the second quarter of 2026, as higher sales prices for paper were more than offset by lower sales volumes in a continued soft market. Cost of products sold decreased driven by lower sales volumes and continued cost-out actions partially offset by higher input costs for energy. Packaging margins were impacted by higher paper prices not yet realized in previously published box pricing. Depreciation and amortization increased due to higher accelerated depreciation associated with cost-out actions. Selling and administrative expenses were lower driven by lower overhead and incentive compensation expense.
Net special items include items considered by management to not be reflective of the Company's underlying operations. Net special items in the third quarter of 2026 amount to a net after-tax charge of $1.31 billion ($2.46 per diluted share) compared with a net after-tax charge of $205 million ($0.39 per diluted share) in the third quarter of 2025 and a net after-tax charge of $42 million ($0.08 per diluted share) in the second quarter of 2026. Net special items in all periods include the following charges (benefits):
In conjunction with management's evaluation of goodwill, we measured the current fair value of PS EMEA business segment relative to its carrying value. Based on the results of this analysis and in (a) accordance with U.S. GAAP, the company recorded a pre-tax, non-cash goodwill impairment charge of $1.38 billion as of September 30, 2026 related to the PS EMEA business segment. See note (d) of the Consolidated Statement of Operations. Transaction, integration, separation and other costs/benefits that (b) the Company believes are not reflective of the Company's underlying operations. See notes (a), (j) and (k) of the Consolidated Statement of Operations. Severance and other costs associated with the Company's 80/20 (c) strategic approach which includes the realignment of resources and mill strategic actions. See notes (c) and (n) of the Consolidated Statement of Operations. Includes the sale of assets of the previously closed box plant in (d) Compton, California and charges associated with the Company's subsequently sold aircraft assets. See notes (f) and (p) of the Consolidated Statement of Operations. Includes a tax benefit associated with the settlement of tax audits (e) and a decrease in the valuation against capital losses. See notes (h) and (q) of the Consolidated Statement of Operations. Includes amounts related to the sale of our kraft paper bag business (f) and the sale of the Company's box plant in Chile. See notes (e) and (o) of the Consolidated Statement of Operations. Environmental remediation adjustments associated with remediation (g) work at a waste pit site at a mill acquired but never operated by the Company, and last utilized by the predecessor owner of the mill. See note (j) on the Consolidated Statement of Operations.
The Company has made significant progress preparing to separate its EMEA packaging business into an independent company which will be known as DS Smith plc. As a result of the planned separation of the EMEA packaging business and the subsequent U.K. regulatory requirements, the Company is no longer including our existing Packaging Solutions EMEA financial guidance in our guidance framework and does not anticipate providing such guidance in the future.
The EMEA packaging business leadership team will hold a Capital Markets Day in London on November 3, 2026, 13:00-17:00 GMT (8:00 a.m.-12:00 p.m. ET). The team will discuss plans for the new company and its position as an enhanced pure-play packaging leader within the European market. The team will also provide details about the business model, growth strategy and financial outlook post separation. The event will be available via webcast, and a recording will be provided on DS Smith's website following the event.
The Company will host a webcast today where management will discuss third quarter 2026 earnings, progress on the planned separation of the EMEA packaging business and market conditions as well as the full-year outlook for Packaging Solutions North America, beginning at 10 a.m. ET (9 a.m. CT). All interested parties are invited to listen to the webcast via the Company’s website by clicking on the Investors tab and going to the Events & Presentations page at https://www.internationalpaper.com/investors/events-presentations. A replay of the webcast will also be on the website beginning approximately two hours after the call.
Parties who wish to participate in the webcast via teleconference may dial +1 (646) 307-1963 or, within the U.S. only, (800) 715-9871, and ask to be connected to the International Paper third quarter 2026 earnings call. The conference ID number is 8855052. Participants should call in no later than 9:45 a.m. ET (8:45 a.m. CT). An audio-only replay will be available for ninety days following the call. To access the replay, dial +1 (609) 800-9909 or, within the U.S. only, (800) 770-2030 and when prompted for the conference ID, enter 8855052.
International Paper creates sustainable packaging solutions that enable our customers, teammates and shareowners to thrive in an ever-changing world. We are a leader in corrugated packaging, partnering with customers across industries to protect what matters most, strengthen supply chains and create lasting value. Learn more at internationalpaper.com.
Certain statements in this press release that are not historical in nature may be considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements can be identified by the use of forward-looking or conditional words such as “expects,” “anticipates,” “believes,” “estimates,” “could,” “should,” “can,” “forecast,” “outlook,” “intend,” “look,” “may,” “will,” “remain,” “confident,” “commit,” “plan,” and “preliminary” or similar expressions. These statements are not guarantees of future performance and reflect management’s current views and speak only as to the dates the statements are made and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in these statements. All statements, other than statements of historical fact, are forward-looking statements, including, but not limited to, statements regarding anticipated financial results, economic conditions, industry trends, future prospects, and the anticipated benefits, execution and consummation of strategic corporate transactions. Factors which could cause actual results to differ include but are not limited to: (i) our ability to consummate and achieve the benefits expected from, and other risks, costs and expenses associated with, our plans to separate our North America and Europe, Middle East and Africa (“EMEA”) operations into two independent companies 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 may lead to decreased assets and reduced net earnings; (ii) the possibility that, following evaluation of strategic alternatives, the separation of our EMEA operations may be effected in a different form than initially contemplated; (iii) our ability to successfully integrate and realize anticipated synergies, cost savings and profit opportunities from corporate transactions; (iv) risks associated with our strategic business decisions including facility closures, business exits, operational changes, corporate restructurings and portfolio rationalizations intended to support the Company’s 80/20 strategic approach for long-term growth; (v) 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; (vi) 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; (vii) loss contingencies and pending, threatened or future litigation or investigations, including with respect to environmental and antitrust related matters; (viii) the level of our indebtedness, risks associated with our variable rate debt and changes in interest rates; (ix) 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 price increases or shortages in 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; (x) risks arising from conducting business internationally, domestic and global geopolitical conditions and tensions involving military conflict (including major global actors such as Russia, the Middle East, the further expansion of such conflicts and the geopolitical and economic consequences associated therewith), as well as broader geopolitical tensions, changes in currency exchange rates, including in light of our assets, liabilities and earnings denominated in foreign currencies as we proceed with the planned separation of our North America and EMEA packaging business, trade policies (including but not limited to protectionist measures and the imposition of new or increased tariffs as well as the potential impact of retaliatory tariffs and other penalties including retaliatory policies against the United States) and global trade tensions, downgrades in our credit ratings, and/or the credit ratings of banks issuing certain letters of credit, issued by recognized credit rating organizations; (xi) the amount of our future pension funding obligations, and pension and healthcare costs; (xii) 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); (xiii) a 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; (xiv) cybersecurity and information technology risks, including as a result of security breaches and cybersecurity incidents; (xv) our exposure to claims under our agreements with Sylvamo Corporation; (xvi) our ability to attract and retain qualified personnel and maintain good employee or labor relations; (xvii) our ability to maintain effective internal control over financial reporting; and (xviii) our ability to adequately secure and protect our intellectual property rights. These and other factors that could cause or contribute to actual results differing materially from such forward-looking statements can be found in our press releases and reports filed with the U.S. Securities and Exchange Commission. In addition, other risks and uncertainties not presently known to the Company or that we currently believe to be immaterial could affect the accuracy of any forward-looking statements. The Company undertakes no
obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. ### Contacts:
Media: newsroom@ipaper.com Investors: Mandi Gilliland; 901-419-4595; Michele Vargas, 901-419-7287.
The accompanying notes are an integral part of this Consolidated Statement of Operations (preliminary and unaudited).
Includes pre-tax charges of $65 million ($52 million after taxes), $43 million ($32 million after taxes) and $119 million ($92 million after taxes) for the three months ended September 30, 2026 and June 30, 2026 and the nine months ended September 30, 2026, respectively, for costs associated with the announced separation of our PS EMEA business, pre-tax charges of $2 million (before and after taxes), $5 (a) million ($4 million after taxes) and $7 million ($6 million after taxes) for the three months ended September 30, 2026 and June 30, 2026 and the nine months ended September 30, 2026, respectively, for costs associated with the NORPAC acquisition and pre-tax charges of $8 million ($7 million after taxes) and $11 million ($9 million after taxes) for the three months ended June 30,2026 and the nine months ended September 30, 2026, respectively, for other costs. Includes pre-tax charges of $33 million, $23 million and $72 million (b) for the three months ended September 30, 2026 and June 30, 2026 and the nine months ended September 30, 2026, respectively, for accelerated deprecation associated with our site closures. Includes pre-tax charges of $9 million ($8 million after taxes), $9 million ($7 million after taxes) and $41 million ($32 million after (c) taxes) for the three months ended September 30, 2026 and June 30, 2026 and the nine months ended September 30, 2026, respectively, for severance and other costs related to our mill closures and 80/20 strategic actions. Includes a charge of $1.38 billion (before and after taxes) for the (d) three months and nine months ended September 30, 2026 for the non-cash impairment of goodwill in our PS EMEA business. Includes a pre-tax gain of $11 million ($8 million after taxes) for (e) the three months ended June 30, 2026 and the nine months ended September 30, 2026 related to the completed sale of our box plant in Chile. Includes a pre-tax gain of $30 million ($23 million after taxes) for the three months and nine months ended September 30, 2026 for the (f) sale of assets at our permanently closed Compton, California box plant and a pre-tax charge of $7 million ($5 million after taxes) for the three months and nine months ended September 30, 2026 for other items.
Includes pre-tax income of $11 million ($8 million after taxes) for the nine months ended September 30, 2026 for interest income related to an income tax refund. Includes tax benefits of $78 million and $38 million for the three months and nine months ended September 30, 2026 related to the settlement of tax audits and a decrease in the valuation allowance against capital losses, respectively. Includes the results for the former Global Cellulose Fibers business which was sold on January 23, 2026. Includes a pre-tax benefit of $41 million ($30 million after taxes) and a pre-tax charge of $29 million ($22 million after taxes) for the three months and nine months ended September 30, 2025, respectively, (g) for the inventory step-up recognized in purchase accounting related (h) to the DS Smith combination and a pre-tax charge of $7 million ($5 (i) million after taxes) for the three months and nine months ended (j) September 30, 2025 for environmental remediation adjustments. ──────────────────────────────────────────────────────────────────────────────
Includes pre-tax charges of $15 million ($12 million net of tax) and (k) $148 million ($122 million after taxes) for the three months and nine months ended September 30, 2025, respectively, for transaction costs and integration costs associated with the DS Smith combination. Includes pre-tax charges of $675 million and $872 million for the (l) three months and nine months ended September 30, 2025, respectively, for accelerated depreciation associated with our mill and 80/20 strategic actions. Includes a pre-tax charge of $50 million (before and after taxes) for (m) the nine months ended September 30, 2025 for a UK stamp tax associated with the DS Smith combination. Includes pre-tax charges of $342 million ($257 million after taxes) (n) and $464 million ($354 million after taxes) for the three months and nine months ended September 30, 2025, respectively, for severance and other costs related to our mill closures and 80/20 strategic actions. Includes a pre-tax charge of $16 million ($12 million after taxes) for the three months and nine months ended September 30, 2025 for the impairment of our kraft paper bag business and a pre-tax gain of $51 (o) million ($40 million after taxes) for the nine months ended September 30, 2025 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. Includes a pre-tax charge of $15 million ($11 million after taxes) for the three months and nine months ended September 30, 2025 related to the impairment of subsequently sold aircraft assets, a pre-tax (p) gain of $62 million ($47 million after taxes) for the nine months ended September 30, 2025 for asset sales related to our permanently closed Orange, Texas containerboard mill and a pre-tax gain of $5 million ($4 million after taxes) for the nine months ended September 30, 2025 related to miscellaneous land sales and other items. Includes a tax benefit of $62 million for the three months and nine (q) months ended September 30, 2025 related to capital losses associated with the sale of our Global Cellulose Fibers business.
Reconciliation of Earnings (Loss) from Continuing Operations to Adjusted Operating Earnings (Loss)
Notes: Management uses adjusted operating earnings (loss) and adjusted operating earnings (loss) per share (non-GAAP financial measures) to focus on on-going operations and believes that such non-GAAP financial measures are useful to investors in assessing the operational performance of the Company and enabling investors to perform meaningful comparisons of past and present consolidated operating results from continuing operations. The Company believes that these non-GAAP financial measures, viewed alongside the most directly comparable GAAP measures, provides for a more complete analysis of the Company's results from continuing operations. See the section Non-GAAP Financial Measures for the definitions of adjusted operating earnings and adjusted operating earnings per share and the 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. The Company excludes these amounts from 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. The Company includes service cost in our non-GAAP financial measure as it is directly attributable to employee service, and the corresponding employees' compensation elements, in connection with ongoing operations. Since diluted earnings per share are computed independently for each period, nine-month per share amounts may not equal the sum of the respective quarters.
Notes: Management also uses adjusted EBITDA from continuing operations (a non-GAAP financial measure) to focus on on-going operations and believes this measure is useful to investors in assessing the operational performance of the Company and enabling investors to perform meaningful comparisons of past and present consolidated operating results from continuing operations. The Company believes that adjusted EBITDA from continuing operations, viewed alongside the most directly comparable GAAP measure, provides for a more complete analysis of the Company's results from continuing operations. See the section titled Non-GAAP Financial Measures for the definition of adjusted EBITDA from continuing operations and the most directly comparable GAAP measure.
Reconciliation of Packaging Solutions North America (PS NA) Adjusted EBITDA Outlook
Management also uses PS NA adjusted EBITDA (a non-GAAP financial measure) to focus on on-going operations and believes this measure is 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. The company believes that PS NA adjusted EBITDA, viewed alongside the directly comparable GAAP measure, provides for a more complete analysis of the Company's results. See the section titled Non-GAAP Financial Measures for the definition of PS NA adjusted EBITDA and the most directly comparable GAAP measure.
As a result of the planned separation of the EMEA packaging business and the subsequent U.K. regulatory requirements, the Company is no longer including our existing Packaging Solutions EMEA financial guidance as part of our guidance framework and does not anticipate providing such guidance in the future.
September 30, 2026 December 31, 2025 ────────────────────────────────────────────────────────────────────────────── Assets Current Assets Cash and Temporary $ 815 $ 1,145 Investments Accounts and Notes 4,324 3,791 Receivable, Net Contract Assets 640 635 Assets Held for Sale — 1,800 Inventories 2,119 2,012 Other 813 723 Total Current Assets 8,711 10,106 Plants, Properties and 14,880 14,443 Equipment, Net Goodwill 3,910 5,326 Intangibles, Net 3,852 4,043 Long-Term Financial Assets of Variable 2,363 2,349 Interest Entities Right of Use Assets 644 697 Overfunded Pension Plan 564 486 Assets Deferred Charges and Other 713 514 Assets Total Assets $ 35,637 $ 37,964 Liabilities and Equity Current Liabilities Notes Payable and Current Maturities of $ 1,963 $ 992 Long-Term Debt Liabilities Held for Sale — 502 Accounts Payable and Other Current 6,625 6,405 Liabilities Total Current Liabilities 8,588 7,899 Long-Term Debt 7,728 8,839 Deferred Income Taxes 1,938 1,898 Long-Term Nonrecourse Financial Liabilities of Variable 2,132 2,127 Interest Entities Long-Term Lease Obligations 449 486 Underfunded Pension Benefit 294 316 Obligation Postretirement and Postemployment 126 133 Benefit Obligation Other Liabilities 1,236 1,439 Equity Common Stock 627 627 Paid-in Capital 14,395 14,414 Retained Earnings 3,066 4,885 Accumulated Other -444 -528 Comprehensive Loss 17,644 19,398 Less: Common Stock Held in 4,498 4,571 Treasury, at Cost Total Equity 13,146 14,827 Total Liabilities and $ 35,637 $ 37,964 Equity
Nine Months Ended September 30, Operating Activities 2026 2025 ────────────────────────────────────────────────────────────────────────────── Net earnings (loss) $ -1,078 $ -1,132 Depreciation and 1,503 2,184 amortization Deferred income tax expense (benefit), -68 -738 net Restructuring charges, 41 459 net Impairment of goodwill 1,377 — Net (gains) losses on sales and 30 973 impairments of businesses Net (gains) losses on sales and -23 -52 impairments of assets Periodic pension -1 20 (income) expense, net Other, net -108 -54 Changes in operating assets and liabilities Accounts and notes -337 -166 receivable Contract assets -9 -62 Inventories -116 -53 Accounts payable 373 -182 Other current -205 -280 liabilities Other current assets 97 -124 Cash Provided By (Used For) Operating 1,476 793 Activities Investment Activities Capital expenditures -1,656 -1,207 Acquisitions, net of -457 414 cash acquired Proceeds from divestitures, net of 1,045 138 cash divested Proceeds from sale of 103 108 fixed assets Proceeds from insurance 65 33 recoveries Other -7 36 Cash Provided By (Used For) Investment -907 -478 Activities Financing Activities Issuance of debt 789 422 Reduction of debt -829 -193 Change in book -85 14 overdrafts Repurchases of common stock and payments -31 -64 of restricted stock tax withholding Dividends paid -735 -733 Other -7 -1 Cash Provided By (Used for) Financing -898 -555 Activities Effect of Exchange Rate Changes on Cash -17 75 and Temporary Investments Change in Cash and -346 -165 Temporary Investments Cash and Temporary Investments Beginning of the period 1,161 1,170 End of the period $ 815 $ 1,005
Management uses free cash flow (a non-GAAP financial measure) in connection with managing our business and believes that free cash flow is useful to investors as a liquidity measure because it measures the amount of cash generated that is available, after reinvesting in the business, to maintain a strong balance sheet, pay dividends, repurchase stock, service debt and make investments for future growth. It should not be inferred that the entire free cash flow amount is available for discretionary expenditures. See the section titled Non-GAAP Financial Measures for the definition of free cash flow and the most directly comparable GAAP measure.
The preliminary non-GAAP financial measures presented in this release have limitations as analytical tools and should not be considered in isolation or as a substitute for an analysis of our results calculated in accordance with GAAP. In addition, because not all companies use identical calculations, the Company’s presentation of preliminary non-GAAP financial measures in this release may not be comparable to similarly titled measures disclosed by other companies, including companies in the same industry as International Paper.
Management believes non-GAAP financial measures, when used in conjunction with information presented in accordance with GAAP, can facilitate a better understanding of the impact of various factors and trends on the Company’s financial results. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company’s performance. Investors are cautioned not to place undue reliance on the non-GAAP financial measures presented in this release.
Full text with the tables
Exhibit 99.1
News Release
International Paper Reports Third Quarter 2026 Results
THIRD QUARTER 2026 FINANCIAL SUMMARY
•
Net sales of $6.20 billion
• Loss from continuing operations of $1.10 billion includes a $1.38 billion non-
cash goodwill impairment charge for our Packaging Solutions EMEA business
segment
•
Adjusted EBITDA (non-GAAP) from continuing operations of $843 million
•
Packaging Solutions North America Business segment operating profit of $427
million
•
Cash provided by operating activities of $339 million
•
Free cash flow (non-GAAP) of $(267) million
FINANCIAL TARGETS
(1)
•
Packaging Solutions North America Business segment operating profit:
◦
Fourth quarter 2026: $460-$500 million
◦
Full-Year 2026: $1.3-$1.4 billion
•
Packaging Solutions North America Adjusted EBITDA (non-GAAP):
◦
Fourth quarter 2026: $700-$740 million
◦
Full-Year 2026: $2.27-$2.31 billion
(1) As a result of the planned separation of the EMEA packaging business and the
subsequent U.K. regulatory requirements, the Company is no longer including our
existing Packaging Solutions EMEA financial guidance in our guidance framework
and does not anticipate providing such guidance in the future.
MEMPHIS, Tenn. – October 28, 2026 – International Paper (NYSE: IP; LSE: IPC)
(the "Company") today announced results for the quarter ended September 30,
2026.
“Our third-quarter results reflect meaningful progress on our strategy despite
persistent macro headwinds,” said International Paper Chairman and CEO Andy
Silvernail. “In North America, we are improving our operational performance,
building a structurally lower-cost business and realizing the benefits of prior
pricing actions, while continuing to create value for our customers. In EMEA, we
executed well on our ongoing restructuring and cost-out initiatives, while the
macro environment continued to weigh on results and pace of margin recovery.”
“We are executing on the core controllables in a more challenging world. We
remain focused on building an advantaged cost position, delivering a superior
customer experience and strengthening our relative supply position,” Silvernail
added. “At the same time, we are advancing the separation of our EMEA packaging
business. We have conviction in our strategy, confidence in our ability to
execute and a clear path to becoming a stronger International Paper that
delivers value for all stakeholders.”
Select Financial Measures
The preliminary third quarter 2026 results discussed in this release will be
finalized in our Quarterly Report on Form 10-Q, which we intend to file with the
U.S. Securities and Exchange Commission on or about November 4, 2026. This
release refers to certain non-GAAP financial measures, which are defined below.
Third Third
(In Quarter Quarter Second
millions) 2026 2025 Quarter 2026
──────────────────────────────────────────────────────────────────────────────
Net Sales $ 6,197 $ 6,222 $ 6,004
Earnings
(Loss)
from -1,097 -426 -12
Continuing
Operations
Adjusted
EBITDA
from 843 859 587
Continuing
Operations
(non-GAAP)
Adjusted
Operating
Earnings 197 -224 18
(Loss)
(non-GAAP)
Cash
Provided
By (Used 339 605 526
For)
Operating
Activities
Free Cash
Flow -267 150 -7
(non-GAAP)
Diluted EPS from Continuing Operations and Adjusted Operating EPS
Third Quarter Third Quarter Second Quarter
2026 2025 2026
──────────────────────────────────────────────────────────────────────────────
Diluted
Earnings
(Loss) Per $ -2.07 $ -0.81 $ -0.02
Share from
Continuing
Operations
Add Back –
Non-Operating
Pension -0.03 -0.01 -0.03
Expense
(Income)
Add Back –
Net Special 2.70 0.67 0.10
Items Expense
(Income)
Income Taxes
-
Non-Operating -0.23 -0.28 -0.01
Pension and
Special Items
Adjusted
Operating
Earnings $ 0.37 $ -0.43 $ 0.04
(Loss) Per
Share
(non-GAAP)
NON-GAAP FINANCIAL MEASURES
The Company believes that these non-GAAP financial measures, when viewed
alongside the most directly comparable GAAP measures, provides for a more
complete analysis of the Company's results from continuing operations.
Reconciliations to the most directly comparable GAAP measures and an explanation
of why management believes these non-GAAP financial measures provide useful
information to investors are included later in this release.
Adjusted EBITDA from continuing operations
is defined as earnings (loss) from continuing operations (a GAAP measure) before
income taxes, equity earnings (loss), interest expense, net, net special items,
non-operating pension expense (income) and depreciation and amortization. The
most directly comparable GAAP measure is earnings (loss) from continuing
operations.
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). The
Company calculates adjusted operating earnings (loss) (non-GAAP) by excluding
the after-tax effect of non-operating pension expense (income) and net special
items from the earnings (loss) from continuing operations reported under U.S.
GAAP. Adjusted operating earnings (loss) per share is calculated by dividing
adjusted operating earnings (loss) by the diluted average shares of common stock
outstanding. The most directly comparable GAAP measures are earnings (loss) from
continuing operations and diluted earnings (loss) per share from continuing
operations.
Free cash flow
is defined as cash provided by (used for) operating activities (a GAAP measure)
less capital expenditures. The most directly comparable GAAP measure is cash
provided by (used for) operations.
Packaging Solutions North America Adjusted EBITDA
is a non-GAAP financial measure defined as business segment operating profit
before depreciation and amortization and excluding the Recycling business
adjusted EBITDA. Business segment operating profit is defined as earnings (loss)
before income taxes and equity earnings, but including the impact of less than
wholly owned subsidiaries, and excluding interest expense, net, net special
items and non-operating pension expense. Business segment operating profit at a
segment level is a measure reported to our management for purposes of making
decisions about allocating resources to our business segments and assessing the
performance of our business segments and is presented in our financial statement
footnotes in accordance with ASC 280. The most directly comparable GAAP measure
is business segment operating profit (loss).
For discussion of net special items and non-operating pension expense (income),
see the disclosure that follows Effects of Net Special Items and Consolidated
Statement of Operations and related notes included later in this release.
SEGMENT INFORMATION
The following table presents net sales by business segment and business segment
operating profit (loss), which is the Company's measure of segment
profitability. Business segment operating profit (loss) is a measure reported to
our management for purposes of making decisions about allocating resources to
our business segments and assessing the performance of our business segments.
Third quarter 2026 net sales by business segment and business segment operating
profit (loss) compared with the second quarter of 2026 and the third quarter of
2025 are as follows:
Business Segment Results
(In
millions)
Net Sales
by Third Third Second
Business Quarter Quarter Quarter
Segment 2026 2025 2026
──────────────────────────────────────────────────────────────────────────────
Packaging
Solutions $ 3,880 $ 3,898 $ 3,688
North
America
Packaging
Solutions 2,280 2,310 2,287
EMEA
Corporate
and 37 14 29
Inter-seg…
Sales
Net Sales $ 6,197 $ 6,222 $ 6,004
Business
Segment
Operating
Profit
(Loss)
Packaging
Solutions $ 427 $ -166 $ 204
North
America
Packaging
Solutions -73 -58 -80
EMEA
Packaging Solutions North America (PS NA)
business segment operating profit (loss) in the third quarter of 2026 was $427
million compared with $204 million in the second quarter of 2026. In the third
quarter of 2026, net sales increased reflecting higher sales prices partially
offset by lower sales volumes driven by a softer demand environment. Cost of
products sold decreased driven by lower planned maintenance outage costs and
lower sales volumes, partially offset by higher input costs for recovered fiber,
energy and fuel. Improved mill performance drove lower operating costs including
the non-repeat of the Riverdale paper machine conversion. This was partially
offset by the impact of suspended operations at Pine Hill. Depreciation and
amortization expense increased due to two additional months of depreciation
expense in the third quarter compared to the second quarter for the NORPAC mill
and additional box system investments. Distribution expense increased due to
higher freight costs. Results also reflected a full quarter of earnings from the
NORPAC mill acquisition compared with one month of earnings in the second
quarter of 2026.
Packaging Solutions EMEA (PS EMEA)
business segment operating profit (loss) in the third quarter of 2026 was $(73)
million compared with $(80) million in the second quarter of 2026. Net sales
decreased slightly in the third quarter of 2026 compared with the second quarter
of 2026, as higher sales prices for paper were more than offset by lower sales
volumes in a continued soft market. Cost of products sold decreased driven by
lower sales volumes and continued cost-out actions partially offset by higher
input costs for energy. Packaging margins were impacted by higher paper prices
not yet realized in previously published box pricing. Depreciation and
amortization increased due to higher accelerated depreciation associated with
cost-out actions. Selling and administrative expenses were lower driven by lower
overhead and incentive compensation expense.
EFFECTS OF NET SPECIAL ITEMS
Continuing Operations
Net special items include items considered by management to not be reflective of
the Company's underlying operations. Net special items in the third quarter of
2026 amount to a net after-tax charge of $1.31 billion ($2.46 per diluted share)
compared with a net after-tax charge of $205 million ($0.39 per diluted share)
in the third quarter of 2025 and a net after-tax charge of $42 million ($0.08
per diluted share) in the second quarter of 2026. Net special items in all
periods include the following charges (benefits):
T… T… …
Q… Q… …
2… 2… …
… B… A… B… A… … …
… T… T… T… T… … …
──────────────────────────────────────────────────────────────────────────────
…
… $ 1… $ 1… -a $ — $ — $ — $ —
…
…
…
… 65 52 -b — — 43 32 …
…
…
…
… 9 8 -c 3… 2… -c 9 7 …
…
…
…
… 2 2 -b — — 5 4 …
…
…
…
…
… — — -… -… -b — —
…
…
…
…
…
…
… -… -… -d 15 11 -d — —
…
…
…
…
…
…
…
…
… — — 16 12 -f -… -8 …
…
…
…
…
…
… — — 7 5 -g — —
…
…
…
…
… — -… -e — — — —
…
…
…
…
…
…
… — -… -e — -… -e — —
…
…
…
… — — — — 8 7
…
… $ 1… $ 1… $ 3… $ 2… $ 54 $ 42
…
…
In conjunction with management's evaluation of goodwill, we measured
the current fair value of PS EMEA business segment relative to its
carrying value. Based on the results of this analysis and in
(a) accordance with U.S. GAAP, the company recorded a pre-tax, non-cash
goodwill impairment charge of $1.38 billion as of September 30, 2026
related to the PS EMEA business segment. See note (d) of the
Consolidated Statement of Operations.
Transaction, integration, separation and other costs/benefits that
(b) the Company believes are not reflective of the Company's underlying
operations. See notes (a), (j) and (k) of the Consolidated Statement
of Operations.
Severance and other costs associated with the Company's 80/20
(c) strategic approach which includes the realignment of resources and
mill strategic actions. See notes (c) and (n) of the Consolidated
Statement of Operations.
Includes the sale of assets of the previously closed box plant in
(d) Compton, California and charges associated with the Company's
subsequently sold aircraft assets. See notes (f) and (p) of the
Consolidated Statement of Operations.
Includes a tax benefit associated with the settlement of tax audits
(e) and a decrease in the valuation against capital losses. See notes (h)
and (q) of the Consolidated Statement of Operations.
Includes amounts related to the sale of our kraft paper bag business
(f) and the sale of the Company's box plant in Chile. See notes (e) and
(o) of the Consolidated Statement of Operations.
Environmental remediation adjustments associated with remediation
(g) work at a waste pit site at a mill acquired but never operated by the
Company, and last utilized by the predecessor owner of the mill. See
note (j) on the Consolidated Statement of Operations.
PACKAGING SOLUTIONS EMEA SEPARATION UPDATE
The Company has made significant progress preparing to separate its EMEA
packaging business into an independent company which will be known as DS Smith
plc. As a result of the planned separation of the EMEA packaging business and
the subsequent U.K. regulatory requirements, the Company is no longer including
our existing Packaging Solutions EMEA financial guidance in our guidance
framework and does not anticipate providing such guidance in the future.
The EMEA packaging business leadership team will hold a Capital Markets Day in
London on November 3, 2026, 13:00-17:00 GMT (8:00 a.m.-12:00 p.m. ET). The team
will discuss plans for the new company and its position as an enhanced pure-play
packaging leader within the European market. The team will also provide details
about the business model, growth strategy and financial outlook post separation.
The event will be available via webcast, and a recording will be provided on DS
Smith's website following the event.
EARNINGS WEBCAST
The Company will host a webcast today where management will discuss third
quarter 2026 earnings, progress on the planned separation of the EMEA packaging
business and market conditions as well as the full-year outlook for Packaging
Solutions North America, beginning at 10 a.m. ET (9 a.m. CT). All interested
parties are invited to listen to the webcast via the Company’s website by
clicking on the Investors tab and going to the Events & Presentations page at
https://www.internationalpaper.com/investors/events-presentations. A replay of
the webcast will also be on the website beginning approximately two hours after
the call.
Parties who wish to participate in the webcast via teleconference may dial +1
(646) 307-1963 or, within the U.S. only, (800) 715-9871, and ask to be connected
to the International Paper third quarter 2026 earnings call. The conference ID
number is 8855052. Participants should call in no later than 9:45 a.m. ET (8:45
a.m. CT). An audio-only replay will be available for ninety days following the
call. To access the replay, dial +1 (609) 800-9909 or, within the U.S. only,
(800) 770-2030 and when prompted for the conference ID, enter 8855052.
ABOUT INTERNATIONAL PAPER (NYSE: IP; LSE: IPC)
International Paper creates sustainable packaging solutions that enable our
customers, teammates and shareowners to thrive in an ever-changing world. We are
a leader in corrugated packaging, partnering with customers across industries to
protect what matters most, strengthen supply chains and create lasting value.
Learn more at internationalpaper.com.
Cautionary Statement Regarding Forward-Looking Statements
Certain statements in this press release that are not historical in nature may
be considered “forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995, as amended. Forward-looking statements
can be identified by the use of forward-looking or conditional words such as
“expects,” “anticipates,” “believes,” “estimates,” “could,” “should,” “can,”
“forecast,” “outlook,” “intend,” “look,” “may,” “will,” “remain,” “confident,”
“commit,” “plan,” and “preliminary” or similar expressions. These statements are
not guarantees of future performance and reflect management’s current views and
speak only as to the dates the statements are made and are subject to risks and
uncertainties that could cause actual results to differ materially from those
expressed or implied in these statements. All statements, other than statements
of historical fact, are forward-looking statements, including, but not limited
to, statements regarding anticipated financial results, economic conditions,
industry trends, future prospects, and the anticipated benefits, execution and
consummation of strategic corporate transactions. Factors which could cause
actual results to differ include but are not limited to: (i) our ability to
consummate and achieve the benefits expected from, and other risks, costs and
expenses associated with, our plans to separate our North America and Europe,
Middle East and Africa (“EMEA”) operations into two independent companies 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 may lead to decreased assets and reduced net earnings; (ii) the
possibility that, following evaluation of strategic alternatives, the separation
of our EMEA operations may be effected in a different form than initially
contemplated; (iii) our ability to successfully integrate and realize
anticipated synergies, cost savings and profit opportunities from corporate
transactions; (iv) risks associated with our strategic business decisions
including facility closures, business exits, operational changes, corporate
restructurings and portfolio rationalizations intended to support the Company’s
80/20 strategic approach for long-term growth; (v) 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;
(vi) 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; (vii) loss contingencies and pending, threatened or future
litigation or investigations, including with respect to environmental and
antitrust related matters; (viii) the level of our indebtedness, risks
associated with our variable rate debt and changes in interest rates; (ix) 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 price increases or shortages in 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;
(x) risks arising from conducting business internationally, domestic and global
geopolitical conditions and tensions involving military conflict (including
major global actors such as Russia, the Middle East, the further expansion of
such conflicts and the geopolitical and economic consequences associated
therewith), as well as broader geopolitical tensions, changes in currency
exchange rates, including in light of our assets, liabilities and earnings
denominated in foreign currencies as we proceed with the planned separation of
our North America and EMEA packaging business, trade policies (including but not
limited to protectionist measures and the imposition of new or increased tariffs
as well as the potential impact of retaliatory tariffs and other penalties
including retaliatory policies against the United States) and global trade
tensions, downgrades in our credit ratings, and/or the credit ratings of banks
issuing certain letters of credit, issued by recognized credit rating
organizations; (xi) the amount of our future pension funding obligations, and
pension and healthcare costs; (xii) 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); (xiii) a 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; (xiv)
cybersecurity and information technology risks, including as a result of
security breaches and cybersecurity incidents; (xv) our exposure to claims under
our agreements with Sylvamo Corporation; (xvi) our ability to attract and retain
qualified personnel and maintain good employee or labor relations; (xvii) our
ability to maintain effective internal control over financial reporting; and
(xviii) our ability to adequately secure and protect our intellectual property
rights. These and other factors that could cause or contribute to actual results
differing materially from such forward-looking statements can be found in our
press releases and reports filed with the U.S. Securities and Exchange
Commission. In addition, other risks and uncertainties not presently known to
the Company or that we currently believe to be immaterial could affect the
accuracy of any forward-looking statements. The Company undertakes no
obligation to publicly update any forward-looking statements, whether as a
result of new information, future events or otherwise.
###
Contacts:
Media: newsroom@ipaper.com Investors: Mandi Gilliland; 901-419-4595; Michele
Vargas, 901-419-7287.
INTERNATIONAL PAPER COMPANY
Condensed Consolidated Statement of Operations
Preliminary and Unaudited
(In millions, except per share amounts)
T… T… …
M… M… …
E… E… …
S… J… …
2… 3… 2… … 3… 2… … …
──────────────────────────────────────────────────────────────────────────────
… $ 6… $ 6… $ 6… $ … $ 1…
…
…
…
…
…
… 4… 4… -j 4… … 1… …
…
…
…
… 5… -a 4… -k 5… … … -a 1… …
…
…
…
… 5… -b 1… -l 4… … … -b 2… …
…
… 5… 5… 5… … 1…
…
…
…
…
… 41 40 42 … 1… …
…
…
…
…
… 9 -c 3… -n 9 … … -c 4… …
…
…
… 1… -d — — … -d —
…
…
…
…
…
… — 16 -o -… … … -e -… …
…
…
…
…
…
…
…
…
… -… -f 15 -p — … -f -… …
…
…
…
…
…
… 96 85 87 … -g 2…
…
…
… -… -4 -… … -6
…
…
…
…
…
…
…
… -… -… -… … -…
…
…
…
…
…
…
…
… -… -h -… -q -… … -h -… …
…
…
…
…
… — -1 -1 … -3
…
…
…
…
…
… -… -… -… … -…
…
…
…
…
… -… -i -… -i — … -i -… …
…
…
…
… $ -… $ -… $ -… $ … $ -…
…
…
…
…
…
…
…
…
…
… $ -… $ -… $ -… $ … $ -…
…
…
… -… -… — … -…
…
…
… $ -… $ -… $ -… $ … $ -…
…
…
…
…
…
…
…
…
…
… $ -… $ -… $ -… $ … $ -…
…
…
… -… -… — … -…
…
…
… $ -… $ -… $ -… $ … $ -…
…
…
…
…
… 5… 5… 5… … 4…
…
…
-
…
The accompanying notes are an integral part of this Consolidated Statement of
Operations (preliminary and unaudited).
Includes pre-tax charges of $65 million ($52 million after taxes),
$43 million ($32 million after taxes) and $119 million ($92 million
after taxes) for the three months ended September 30, 2026 and June
30, 2026 and the nine months ended September 30, 2026, respectively,
for costs associated with the announced separation of our PS EMEA
business, pre-tax charges of $2 million (before and after taxes), $5
(a) million ($4 million after taxes) and $7 million ($6 million after
taxes) for the three months ended September 30, 2026 and June 30,
2026 and the nine months ended September 30, 2026, respectively, for
costs associated with the NORPAC acquisition and pre-tax charges of
$8 million ($7 million after taxes) and $11 million ($9 million after
taxes) for the three months ended June 30,2026 and the nine months
ended September 30, 2026, respectively, for other costs.
Includes pre-tax charges of $33 million, $23 million and $72 million
(b) for the three months ended September 30, 2026 and June 30, 2026 and
the nine months ended September 30, 2026, respectively, for
accelerated deprecation associated with our site closures.
Includes pre-tax charges of $9 million ($8 million after taxes), $9
million ($7 million after taxes) and $41 million ($32 million after
(c) taxes) for the three months ended September 30, 2026 and June 30,
2026 and the nine months ended September 30, 2026, respectively, for
severance and other costs related to our mill closures and 80/20
strategic actions.
Includes a charge of $1.38 billion (before and after taxes) for the
(d) three months and nine months ended September 30, 2026 for the
non-cash impairment of goodwill in our PS EMEA business.
Includes a pre-tax gain of $11 million ($8 million after taxes) for
(e) the three months ended June 30, 2026 and the nine months ended
September 30, 2026 related to the completed sale of our box plant in
Chile.
Includes a pre-tax gain of $30 million ($23 million after taxes) for
the three months and nine months ended September 30, 2026 for the
(f) sale of assets at our permanently closed Compton, California box
plant and a pre-tax charge of $7 million ($5 million after taxes) for
the three months and nine months ended September 30, 2026 for other
items.
Includes pre-tax income of $11 million ($8 million after taxes) for
the nine months ended September 30, 2026 for interest income related
to an income tax refund.
Includes tax benefits of $78 million and $38 million for the three
months and nine months ended September 30, 2026 related to the
settlement of tax audits and a decrease in the valuation allowance
against capital losses, respectively.
Includes the results for the former Global Cellulose Fibers business
which was sold on January 23, 2026.
Includes a pre-tax benefit of $41 million ($30 million after taxes)
and a pre-tax charge of $29 million ($22 million after taxes) for the
three months and nine months ended September 30, 2025, respectively,
(g) for the inventory step-up recognized in purchase accounting related
(h) to the DS Smith combination and a pre-tax charge of $7 million ($5
(i) million after taxes) for the three months and nine months ended
(j) September 30, 2025 for environmental remediation adjustments.
──────────────────────────────────────────────────────────────────────────────
Includes pre-tax charges of $15 million ($12 million net of tax) and
(k) $148 million ($122 million after taxes) for the three months and nine
months ended September 30, 2025, respectively, for transaction costs
and integration costs associated with the DS Smith combination.
Includes pre-tax charges of $675 million and $872 million for the
(l) three months and nine months ended September 30, 2025, respectively,
for accelerated depreciation associated with our mill and 80/20
strategic actions.
Includes a pre-tax charge of $50 million (before and after taxes) for
(m) the nine months ended September 30, 2025 for a UK stamp tax
associated with the DS Smith combination.
Includes pre-tax charges of $342 million ($257 million after taxes)
(n) and $464 million ($354 million after taxes) for the three months and
nine months ended September 30, 2025, respectively, for severance and
other costs related to our mill closures and 80/20 strategic actions.
Includes a pre-tax charge of $16 million ($12 million after taxes)
for the three months and nine months ended September 30, 2025 for the
impairment of our kraft paper bag business and a pre-tax gain of $51
(o) million ($40 million after taxes) for the nine months ended September
30, 2025 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.
Includes a pre-tax charge of $15 million ($11 million after taxes)
for the three months and nine months ended September 30, 2025 related
to the impairment of subsequently sold aircraft assets, a pre-tax
(p) gain of $62 million ($47 million after taxes) for the nine months
ended September 30, 2025 for asset sales related to our permanently
closed Orange, Texas containerboard mill and a pre-tax gain of $5
million ($4 million after taxes) for the nine months ended September
30, 2025 related to miscellaneous land sales and other items.
Includes a tax benefit of $62 million for the three months and nine
(q) months ended September 30, 2025 related to capital losses associated
with the sale of our Global Cellulose Fibers business.
INTERNATIONAL PAPER COMPANY
Reconciliation of Earnings (Loss) from Continuing Operations to Adjusted
Operating Earnings (Loss)
Preliminary and Unaudited
(In millions, except per share amounts)
Thr… Three Nine
Mon… Mont… Mont…
End… Ended Ended
Sep… June Sept…
2026 30, 2025 2026 30, 2026 30, 2025
──────────────────────────────────────────────────────────────────────────────
Ea…
(L…
fr… $ -1,… $ -426 $ -12 $ -1,0… $ -475
Co…
Op…
Add
ba…
No… -15 -4 -16 -49 -6
pe…
ex…
(i…
Add
ba…
Net
sp… 1,4… 354 54 1,510 611
it…
ex…
(i…
In…
ta…
-
No… -121 -148 -8 -132 -187
pe…
and
sp…
it…
Ad…
Op…
Ea… $ 197 $ -224 $ 18 $ 296 $ -57
(L…
(n…
Thr… Thr… Nine
Mon… Mon… Mon…
End… End… End…
Sep… June Sep…
30, 30, 30,
2026 2025 2026 2026 2025
Di…
Ea…
(L…
per
Co… $ -2.… $ -0.81 $ -0.02 $ -1.95 $ -0.…
Sh…
fr…
Co…
Op…
Add
ba…
No… -0.… -0.01 -0.03 -0.09 -0.…
pe…
ex…
(i…
Add
ba…
Net
sp… 2.70 0.67 0.10 2.85 1.23
it…
ex…
(i…
In…
ta…
per
sh…
- -0.… -0.28 -0.01 -0.25 -0.…
No…
pe…
and
sp…
it…
Ad…
Op…
Ea…
(L… $ 0.37 $ -0.43 $ 0.04 $ 0.56 $ -0.…
per
Sh…
(n…
Notes:
Management uses adjusted operating earnings (loss) and adjusted operating
earnings (loss) per share (non-GAAP financial measures) to focus on on-going
operations and believes that such non-GAAP financial measures are useful to
investors in assessing the operational performance of the Company and enabling
investors to perform meaningful comparisons of past and present consolidated
operating results from continuing operations. The Company believes that these
non-GAAP financial measures, viewed alongside the most directly comparable GAAP
measures, provides for a more complete analysis of the Company's results from
continuing operations. See the section Non-GAAP Financial Measures for the
definitions of adjusted operating earnings and adjusted operating earnings per
share and the 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. The Company excludes these amounts from 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. The Company includes service cost in our non-GAAP
financial measure as it is directly attributable to employee service, and the
corresponding employees' compensation elements, in connection with ongoing
operations.
Since diluted earnings per share are computed independently for each period,
nine-month per share amounts may not equal the sum of the respective quarters.
INTERNATIONAL PAPER COMPANY
Reconciliation of Adjusted EBITDA from Continuing Operations
Preliminary and Unaudited
(In millions)
Thr… Thr… Nine
Mon… Mon… Mont…
End… End… Ended
Sep… June Sept…
2026 30, 2025 2026 30, 2026 30, 2025
──────────────────────────────────────────────────────────────────────────────
Ear…
(Lo…
From $ -1,… $ -426 $ -12 $ -1,0… $ -475
Con…
Ope…
Add
bac…
Inc… -97 -250 -15 -95 -242
tax
pro…
(be…
Les…
Equ…
ear…
(lo… — -1 -1 -1 -3
net
of
tax…
Ear…
(Lo…
From
Con…
Ope…
Bef… -1,… -675 -26 -1,1… -714
Inc…
Tax…
and
Equ…
Ear…
(Lo…
Int…
exp… 96 85 87 259 277
net
Spe… 1,4… 354 54 1,521 611
ite…
Non…
pen… -15 -4 -16 -49 -6
exp…
(in…
Dep…
and 526 1,099 488 1,503 2,0…
amo…
Adj…
EBI…
from $ 843 $ 859 $ 587 $ 2,107 $ 2,2…
Con…
Ope…
(no…
Notes:
Management also uses adjusted EBITDA from continuing operations (a non-GAAP
financial measure) to focus on on-going operations and believes this measure is
useful to investors in assessing the operational performance of the Company and
enabling investors to perform meaningful comparisons of past and present
consolidated operating results from continuing operations. The Company believes
that adjusted EBITDA from continuing operations, viewed alongside the most
directly comparable GAAP measure, provides for a more complete analysis of the
Company's results from continuing operations. See the section titled Non-GAAP
Financial Measures for the definition of adjusted EBITDA from continuing
operations and the most directly comparable GAAP measure.
INTERNATIONAL PAPER COMPANY
Reconciliation of Packaging Solutions North America (PS NA) Adjusted EBITDA
Outlook
Preliminary and Unaudited
(In millions)
Three Months Twelve Months
Ended Ended
December 31, December 31,
2026 2026
──────────────────────────────────────────────────────────────────────────────
Business
Segment $460-$500 $1,345-$1,385
Operating
Profit
Add back:
Depreciation 245 943
and
amortization
Less:
Recycling 5 18
Business
EBITDA
PS NA
Adjusted $700-$740 $2,270-$2,310
EBITDA
Notes:
Management also uses PS NA adjusted EBITDA (a non-GAAP financial measure) to
focus on on-going operations and believes this measure is 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. The company believes that PS NA adjusted EBITDA, viewed alongside the
directly comparable GAAP measure, provides for a more complete analysis of the
Company's results. See the section titled Non-GAAP Financial Measures for the
definition of PS NA adjusted EBITDA and the most directly comparable GAAP
measure.
As a result of the planned separation of the EMEA packaging business and the
subsequent U.K. regulatory requirements, the Company is no longer including our
existing Packaging Solutions EMEA financial guidance as part of our guidance
framework and does not anticipate providing such guidance in the future.
INTERNATIONAL PAPER COMPANY
Condensed Consolidated Balance Sheet
Preliminary and Unaudited
(In millions)
September 30, 2026 December 31, 2025
──────────────────────────────────────────────────────────────────────────────
Assets
Current Assets
Cash and Temporary $ 815 $ 1,145
Investments
Accounts and Notes 4,324 3,791
Receivable, Net
Contract Assets 640 635
Assets Held for Sale — 1,800
Inventories 2,119 2,012
Other 813 723
Total Current Assets 8,711 10,106
Plants, Properties and 14,880 14,443
Equipment, Net
Goodwill 3,910 5,326
Intangibles, Net 3,852 4,043
Long-Term Financial Assets
of Variable 2,363 2,349
Interest Entities
Right of Use Assets 644 697
Overfunded Pension Plan 564 486
Assets
Deferred Charges and Other 713 514
Assets
Total Assets $ 35,637 $ 37,964
Liabilities and Equity
Current Liabilities
Notes Payable and Current
Maturities of $ 1,963 $ 992
Long-Term Debt
Liabilities Held for Sale — 502
Accounts Payable and Other
Current 6,625 6,405
Liabilities
Total Current Liabilities 8,588 7,899
Long-Term Debt 7,728 8,839
Deferred Income Taxes 1,938 1,898
Long-Term Nonrecourse
Financial
Liabilities of Variable 2,132 2,127
Interest
Entities
Long-Term Lease Obligations 449 486
Underfunded Pension Benefit 294 316
Obligation
Postretirement and
Postemployment 126 133
Benefit Obligation
Other Liabilities 1,236 1,439
Equity
Common Stock 627 627
Paid-in Capital 14,395 14,414
Retained Earnings 3,066 4,885
Accumulated Other -444 -528
Comprehensive Loss
17,644 19,398
Less:
Common Stock Held in 4,498 4,571
Treasury, at Cost
Total Equity 13,146 14,827
Total Liabilities and $ 35,637 $ 37,964
Equity
INTERNATIONAL PAPER COMPANY
Condensed Consolidated Statement of Cash Flows
Preliminary and Unaudited
(In millions)
Nine Months Ended
September 30,
Operating Activities 2026 2025
──────────────────────────────────────────────────────────────────────────────
Net earnings (loss) $ -1,078 $ -1,132
Depreciation and 1,503 2,184
amortization
Deferred income tax
expense (benefit), -68 -738
net
Restructuring charges, 41 459
net
Impairment of goodwill 1,377 —
Net (gains) losses on
sales and 30 973
impairments of
businesses
Net (gains) losses on
sales and -23 -52
impairments of assets
Periodic pension -1 20
(income) expense, net
Other, net -108 -54
Changes in operating
assets and
liabilities
Accounts and notes -337 -166
receivable
Contract assets -9 -62
Inventories -116 -53
Accounts payable 373 -182
Other current -205 -280
liabilities
Other current assets 97 -124
Cash Provided By (Used
For) Operating 1,476 793
Activities
Investment Activities
Capital expenditures -1,656 -1,207
Acquisitions, net of -457 414
cash acquired
Proceeds from
divestitures, net of 1,045 138
cash
divested
Proceeds from sale of 103 108
fixed assets
Proceeds from insurance 65 33
recoveries
Other -7 36
Cash Provided By (Used
For) Investment -907 -478
Activities
Financing Activities
Issuance of debt 789 422
Reduction of debt -829 -193
Change in book -85 14
overdrafts
Repurchases of common
stock and payments -31 -64
of restricted stock tax
withholding
Dividends paid -735 -733
Other -7 -1
Cash Provided By (Used
for) Financing -898 -555
Activities
Effect of Exchange Rate
Changes on Cash -17 75
and Temporary
Investments
Change in Cash and -346 -165
Temporary Investments
Cash and Temporary
Investments
Beginning of the period 1,161 1,170
End of the period $ 815 $ 1,005
INTERNATIONAL PAPER COMPANY
Reconciliation of Cash Provided by Operations to Free Cash Flow
Preliminary and Unaudited
(In millions)
Three Nine
Months Months
Ended Ended
September September
2026 30, 2025 2026 30, 2025
──────────────────────────────────────────────────────────────────────────────
Cash
Provided
By (Used $ 339 $ 605 $ 1,476 $ 793
For)
Operati…
Activit…
Adjustm…
Capital -606 -455 -1,656 -1,207
expendi…
Free
Cash $ -267 $ 150 $ -180 $ -414
Flow
(non-GA…
Management uses free cash flow (a non-GAAP financial measure) in connection with
managing our business and believes that free cash flow is useful to investors as
a liquidity measure because it measures the amount of cash generated that is
available, after reinvesting in the business, to maintain a strong balance
sheet, pay dividends, repurchase stock, service debt and make investments for
future growth. It should not be inferred that the entire free cash flow amount
is available for discretionary expenditures. See the section titled Non-GAAP
Financial Measures for the definition of free cash flow and the most directly
comparable GAAP measure.
The preliminary non-GAAP financial measures presented in this release have
limitations as analytical tools and should not be considered in isolation or as
a substitute for an analysis of our results calculated in accordance with GAAP.
In addition, because not all companies use identical calculations, the Company’s
presentation of preliminary non-GAAP financial measures in this release may not
be comparable to similarly titled measures disclosed by other companies,
including companies in the same industry as International Paper.
Management believes non-GAAP financial measures, when used in conjunction with
information presented in accordance with GAAP, can facilitate a better
understanding of the impact of various factors and trends on the Company’s
financial results. Management also uses these non-GAAP financial measures in
making financial, operating and planning decisions and in evaluating the
Company’s performance. Investors are cautioned not to place undue reliance on
the non-GAAP financial measures presented in this release.