International Paper 2012 Annual Report Download - page 43

FINANCIAL GLOSSARY
Current ratio—
current assets divided by current liabilities.
Total debt to capital ratio—
long-term debt plus notes payable and current
maturities of long-term debt divided by long-
term debt, notes payable and current maturities
of long-term debt and total shareholders’ equity.
Return on shareholders’ equity—
net earnings attributable to International Paper
Company divided by average shareholders’
equity (computed monthly).
Return on investment—
the after-tax amount of earnings from continu-
ing operations before interest divided by the
average of total assets minus accounts payable
and accrued liabilities (computed monthly).
FOOTNOTES TO FIVE-YEAR FINANCIAL SUMMARY
(a) All periods presented have been restated to
reflect the Kraft Papers, Brazilian Coated Papers,
Beverage Packaging, and Wood Products busi-
nesses as discontinued operations, if applicable.
2012:
(b) Includes restructuring and other charges of $109
million before taxes ($70 million after taxes)
including pre-tax charges of $48 million ($30
million after taxes) for early debt extinguishment
costs, pre-tax charges of $44 million ($28 million
after taxes) for costs associated with the
restructuring of the Company’s xpedx oper-
ations, and pre-tax charges of $17 million ($12
million after taxes) for costs associated with the
restructuring of the Company’s Packaging busi-
ness in Europe. Also included are a pre-tax
charge of $20 million ($12 million after taxes)
related to the write-up of the Temple-Inland
inventories to fair value, pre-tax charges of $164
million ($108 million after taxes) for integration
costs associated with the acquisition of Temple-
Inland, a pre-tax charge of $62 million ($38 mil-
lion after taxes) to adjust the long-lived assets of
the Hueneme mill in Oxnard, California to their
fair value in anticipation of its divestiture, and
pre-tax charges of $29 million ($55 million after
taxes) for costs associated with the divestiture of
three containerboard mills.
(c) Includes pre-tax charges of $15 million ($9 mil-
lion after taxes) for expenses associated with
pursuing the divestiture of the Temple- Inland
Building Products business and the operating
results of the Temple-Inland Building Products
business.
(d) Includes a net tax expense of $14 million related
to internal restructurings and a $5 million
expense to adjust deferred tax assets related to
post-retirement prescription drug coverage
(Medicare Part D reimbursement).
2011:
(e) Includes restructuring and other charges of $102
million before taxes ($90 million after taxes)
including pre-tax charges of $49 million ($34
million after taxes) for costs associated with the
restructuring of the Company’s xpedx oper-
ations, pre-tax charges of $32 million ($19 mil-
lion after taxes) for early debt extinguishment
costs, pre-tax charges of $18 million ($12 million
after taxes) for costs associated with the acquis-
ition of a majority share of Andhra Pradesh
Paper Mills Limited in India, pre-tax charges of
$20 million ($12 million after taxes) for costs
associated with signing an agreement to acquire
Temple-Inland, and a pre-tax gain of $24 million
($15 million after taxes) related to the reversal of
environmental and other reserves due to the
announced repurposing of a portion of the
Franklin mill. Also included are a pre-tax charge
of $27 million ($17 million after taxes) for an
environmental reserve related to the Company’s
property in Cass Lake, Minnesota, a pre-tax
charge of $129 million ($104 million after taxes)
for a fixed-asset impairment of the North
American Shorewood business, pre-tax charges
of $78 million (a gain of $143 million after taxes)
to reduce the carrying value of the Shorewood
business based on the terms of the definitive
agreement to sell this business, and a charge of
$11 million (before and after taxes) for asset
impairment costs associated with the Inverurie,
Scotland mill which was closed in 2009.
(f) Includes a pre-tax gain of $50 million ($30 mil-
lion after taxes) for an earnout provision related
to the sale of the Company’s Kraft Papers busi-
ness completed in January 2007. Also, the
Company sold its Brazilian Coated Paper busi-
ness in the third quarter 2006. Local country tax
contingency reserves were included in the busi-
ness’ operating results in 2005 and 2006 for
which the related statute of limitations has
expired. The reserves were reversed and a tax
benefit of $15 million plus associated interest
income of $6 million ($4 million after taxes) was
recorded.
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