International Paper 2012 Annual Report Download - page 48

The following table presents a reconciliation of net
earnings (loss) attributable to International Paper
Company to its total industry segment operating
profit:
In millions 2012 2011 2010
Net Earnings (Loss) Attributable to
International Paper Company $ 794 $1,322 $ 691
Deduct – Discontinued operations:
(Earnings) from operations (54) ——
(Gain) loss on sales or impairment 9(49) —
Earnings (Loss) From Continuing
Operations Attributable to International
Paper Company 749 1,273 691
Add back (deduct):
Income tax provision 331 311 221
Equity (earnings) loss, net of taxes (61) (140) (111)
Net earnings attributable to
noncontrolling interests 514 21
Earnings (Loss) From Continuing
Operations Before Income Taxes and
Equity Earnings 1,024 1,458 822
Interest expense, net 672 541 608
Noncontrolling interests / equity earnings
included in operations —(10) (15)
Corporate items 51 102 142
Special items:
Restructuring and other charges 51 82 70
Net losses (gains) on sales and
impairments of businesses (2) — (25)
Non-Operating Pension Expense $ 159 $43 $84
$1,955 $2,216 $1,686
Industry Segment Operating Profit
Industrial Packaging $1,066 $1,147 $ 826
Printing Papers 599 872 481
Consumer Packaging 268 163 207
Distribution 22 34 78
Forest Products ——94
Total Industry Segment Operating Profit $1,955 $2,216 $1,686
Industry segment operating profits of $2.0 billion in
2012 included a net loss from special items of $335
million compared with $253 million in 2011 and $344
million in 2010. Operationally, compared with 2011,
the impacts of Temple-Inland volumes and synergies
($379 million) and lower input costs ($113 million)
were offset by higher costs associated with Temple-
Inland step-up depreciation and the impact of divest-
ing three containerboard mills ($141 million), lower
average sales price realizations and an unfavorable
mix ($313 million), higher operating costs ($186 mil-
lion) and higher mill maintenance outage costs ($31
million).
Segment Operating Profit
(in millions)
$2,216
$379 ($141) ($313)
($186) ($31) $113 ($82) $1,955
$0
$300
$600
$900
$1,200
$1,500
$1,800
$2,100
$2,400
$2,700
2011
TIN Volume & Synergies
TIN Step-Up Depn & Divested Mills
Price & Mix
Operations & Costs
Maintenance Outages
Input Costs
Special Items
2012
The principal changes in operating profit by
segment were as follows:
• Industrial Packaging’s profits of $1.1 billion were
$81 million higher as the benefits of Temple-
Inland sales volumes and synergies and lower
input costs were partially offset by additional
costs associated with Temple-Inland step-up
depreciation and the impact of the divestiture of
three containerboard mills, lower average sales
price realizations and unfavorable mix, higher
operating costs and higher maintenance outage
costs. In addition, 2012 operating profits
included $184 million of costs associated with
the integration of Temple-Inland, a $62 million
charge to adjust the long-lived assets of the
Hueneme mill to their fair value, and $29 million
of costs associated with the divestiture of three
containerboard mills. Operating profits in 2011
included $20 million of costs associated with the
signing of an agreement to purchase Temple-
Inland.
• Printing Papers’ profits of $599 million were
$273 million lower than in 2011. The benefits of
higher sales volumes were more than offset by
lower sales price realizations, higher operating
costs, higher maintenance outage costs, higher
raw material and freight costs and other items.
Operating profits in 2011 included a gain of $21
million related to the reversal of environmental
reserves due to the announced repurposing of
the Franklin, Virginia mill and $11 million of
asset impairment costs associated with the
Inverurie, Scotland mill which was closed in
2009.
• Consumer Packaging’s profits of $268 mil-
lion, were $105 million higher than in 2011.
The benefits from lower raw material and
freight costs, lower maintenance outage
costs and lower other items were more
than offset by lower sales price
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