International Paper 2012 Annual Report Download - page 47

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generated in the 2011 fourth quarter (see reconcilia-
tion on page 33).
Operating Earnings is a non-GAAP measure. Diluted
earnings (loss) per share attributable to International
Paper Company common shareholders is the most
direct comparable GAAP measure. The Company
calculates Operating Earnings by excluding the after-
tax effect of items considered by management to be
unusual from the earnings reported under GAAP,
and non-operating pension expense. Management
uses this measure to focus on on-going operations,
and believes that it is useful to investors because it
enables them to perform meaningful comparisons of
past and present operating results. The Company
believes that using this information, along with the
most direct comparable GAAP measure, provides for
a more complete analysis of the results of oper-
ations. The following are reconciliations of Operating
Earnings per share attributable to International Paper
Company common shareholders to diluted earnings
(loss) per share attributable to International Paper
Company common shareholders.
2012 2011 2010
Operating Earnings (Loss) Per Share
Attributable to Shareholders $ 2.65 $ 3.12 $ 2.30
Non-operating pension expense (0.26) (0.06) (0.14)
Restructuring and other charges (0.45) (0.19) (0.59)
Net gains (losses) on sales and
impairments of businesses (0.20) 0.08 0.03
Interest income —0.01 —
Income tax adjustments (0.04) (0.06) (0.01)
Bargain purchase price adjustment —0.02 —
Diluted Earnings (Loss) Per Share from
Continuing Operations 1.70 2.92 1.59
Discontinued operations 0.10 0.11 —
Diluted Earnings (Loss) Per Share
Attributable to Shareholders $ 1.80 $ 3.03 $ 1.59
Three
Months
Ended
December 31,
2012
Three
Months
Ended
September 30,
2012
Three
Months
Ended
December 31,
2011
Operating Earnings (Loss)
Per Share Attributable to
Shareholders $ 0.69 $ 0.81 $ 0.73
Non-operating pension expense (0.07) (0.06) (0.01)
Restructuring and other charges (0.08) (0.13) (0.03)
Net gains (losses) on sales and
impairments of businesses 0.01 (0.11) —
Interest income ——0.01
Income tax adjustments (0.04) — (0.05)
Diluted Earnings (Loss) Per
Share from Continuing
Operations 0.51 0.51 0.65
Discontinued operations 0.02 0.03 —
Diluted Earnings (Loss) Per
Share Attributable to
Shareholders $ 0.53 $ 0.54 $ 0.65
Results of Operations
Industry segment operating profits are used by Inter-
national Paper’s management to measure the earn-
ings performance of its businesses. Management
believes that this measure allows a better under-
standing of trends in costs, operating efficiencies,
prices and volumes. Industry segment operating
profits are defined as earnings before taxes, equity
earnings, noncontrolling interests, interest expense,
corporate items and corporate special items.
Industry segment operating profits are defined by
the Securities and Exchange Commission as a non-
GAAP financial measure, and are not GAAP alter-
natives to net income or any other operating
measure prescribed by accounting principles gen-
erally accepted in the United States.
International Paper operates in four segments:
Industrial Packaging, Printing Papers, Consumer
Packaging and Distribution. Effective January 1,
2011, the Forest Products Business is no longer
being reported by the Company as a separate
industry segment due to the immateriality of the
results of the remaining business on the Company’s
consolidated financial statements.
20