International Paper 2012 Annual Report Download - page 4

baby diapers for customers in emerging markets. And we describe International Paper’s distribution unit,
xpedx, and its progress in improving buy, handle and sell processes.
Our improvement runway is equally evident around the globe. In China, the construction of a new paper
machine in the International Paper/Sun Paper joint venture expands our capability to profitably serve the
world’s largest marketplace. The new biomass boiler at our Mogi Guaçu Mill in Brazil will significantly
reduce energy costs and fossil fuel usage—while the expansion of our industrial packaging platform to
Brazil and Turkey will strengthen and extend our geographic reach. IP India also stands poised for double
digit volume and earnings growth over the next several years.
Finally, the Ilim joint venture in Russia is close to completing the largest build out in the Russian pulp and
paper industry in the last 30 years—and the largest project in the history of International Paper. With the
joint venture we have made solid progress on a one billion dollar-plus upgrade of facilities in northwest
Russia and Siberia. By installing a new paper machine in northwest Russia (Koryazhma) and a softwood
pulp line in Siberia (Bratsk), International Paper will be able to grow in-step with paper demand in western
Russia and meet rising pulp demand in China.
2012 was an important transition year for International Paper. I believe no other company in our industry
is as well-positioned to create value for our shareowners on a global scale—or compete as successfully
in our domestic market in both packaging and paper. And, as we carve Our Path Forward, we continue
to be guided by a long-standing mission to improve the world today and for generations to come.
In 2012, we earned a Climate Leadership Award from the U.S. Environmental Protection Agency for
excellence in greenhouse gas management. Along those same lines, we also earned two major industry
awards from the American Forest and Paper Association—one award for reducing workplace accidents
by 70 percent over 10 years, and the second, for progress toward reducing energy consumption and
greenhouse gas emissions. Sustainability is something we take seriously, as it affects so much that we
do. To that end, we established this year a set of tough but achievable sustainability goals to build upon
our progress and our legacy of forest stewardship.
Reflecting our commitment to the highest of ethical standards, International Paper received its seventh
straight award from the Ethisphere Institute as one of the World’s Most Ethical Companies. On a similar
note, we were recently named No. 1 by FORTUNE Magazine’s The World’s Most Admired Companies in
the Forest and Paper Product industry for the 10th time over the last 11 years.
All of the pieces are in place for significant and sustained growth in our free cash flow—a key metric for
International Paper. We will use the cash to keep International Paper competitive and create value for our
investors. We have re-positioned our global enterprise and stand well-positioned to meet the needs of
global markets. This is the direct result of International Paper’s leadership team, our Board of Directors
and our 70,000 employees around the world. On that note, International Paper’s Board of Directors wel-
comed Ilene Gordon, Chairman, President and CEO of Ingredion, who was elected to the Board in June.
And after a combined 11 years of dedicated service, Alberto Weisser and Lynn Elsenhans both retired.
We wish Alberto and Lynn well in their future ventures.
In 2013, International Paper will celebrate its 115th year in operation—a benchmark that few companies
achieve. As we look toward the future, I am confident that International Paper will continue to win by
doing the right things, in the right way, with the right people and above all, perform as a company of
substance. Thank you for your continued support and confidence.
John V. Faraci
Chairman and Chief Executive Officer
International Paper