International Paper 2015 Annual Report Download - page 18

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PART I.
ITEM 1. BUSINESS
GENERAL
International Paper Company (the “Company” or
“International Paper,” which may also be referred to as
“we” or “us”) is a global paper and packaging company
with primary markets and manufacturing operations in
North America, Europe, Latin America, Russia, Asia,
Africa and the Middle East. We are a New York
corporation, incorporated in 1941 as the successor to
the New York corporation of the same name organized
in 1898. Our home page on the Internet is
www.internationalpaper.com. You can learn more about
us by visiting that site.
In the United States, at December 31, 2015, the
Company operated 24 pulp, paper and packaging mills,
169 converting and packaging plants, 16 recycling
plants and three bag facilities. Production facilities at
December 31, 2015 in Europe, Asia, Africa, India, Latin
America and South America included 16 pulp, paper
and packaging mills, 67 converting and packaging
plants, and two recycling plants. We operate a printing
and packaging products distribution business
principally through 12 branches in Asia. At
December 31, 2015, we owned or managed
approximately 335,000 acres of forestland in Brazil and
had, through licenses and forest management
agreements, harvesting rights on government-owned
forestlands in Russia. Substantially all of our
businesses have experienced, and are likely to
continue to experience, cycles relating to industry
capacity and general economic conditions.
For management and financial reporting purposes, our
businesses are separated into three segments:
Industrial Packaging; Printing Papers; and Consumer
Packaging. A description of these business segments
can be found on pages 24 and 25 of Item 7.
Management’s Discussion and Analysis of Financial
Condition and Results of Operations. The Company’s
50% equity interest in Ilim Holding S.A. is also a
separate reportable industry segment.
From 2011 through 2015, International Paper’s capital
expenditures approximated $6.6 billion, excluding
mergers and acquisitions. These expenditures reflect
our continuing efforts to improve product quality and
environmental performance, as well as lower costs and
maintain reliability of operations. Capital spending in
2015 was approximately $1.5 billion and is expected to
be approximately $1.3 billion in 2016. You can find more
information about capital expenditures on page 31 of
Item 7. Management’s Discussion and Analysis of
Financial Condition and Results of Operations.
Discussions of acquisitions can be found on pages 31
and 32 of Item 7. Management’s Discussion and
Analysis of Financial Condition and Results of
Operations.
You can find discussions of restructuring charges and
other special items on pages 22 through 24 of Item 7.
Management’s Discussion and Analysis of Financial
Condition and Results of Operations.
Throughout this Annual Report on Form 10-K, we
“incorporate by reference” certain information in parts
of other documents filed with the Securities and
Exchange Commission (SEC). The SEC permits us to
disclose important information by referring to it in that
manner. Please refer to such information. Our annual
reports on Form 10-K, quarterly reports on Form 10-Q
and current reports on Form 8-K, along with all other
reports and any amendments thereto filed with or
furnished to the SEC, are publicly available free of
charge on the Investor Relations section of our Internet
Web site at www.internationalpaper.com as soon as
reasonably practicable after we electronically file such
material with, or furnish it to, the SEC. The information
contained on or connected to our Web site is not
incorporated by reference into this Form 10-K and
should not be considered part of this or any other report
that we filed with or furnished to the SEC.
FINANCIAL INFORMATION CONCERNING
INDUSTRY SEGMENTS
The financial information concerning segments is set
forth in Note 19 Financial Information by Industry
Segment and Geographic Area on pages 81 and 82 of
Item 8. Financial Statements and Supplementary Data.
FINANCIAL INFORMATION ABOUT
INTERNATIONAL AND U.S. OPERATIONS
The financial information concerning international and
U.S. operations and export sales is set forth in Note 19
Financial Information by Industry Segment and
Geographic Area on page 82 of Item 8. Financial
Statements and Supplementary Data.
COMPETITION AND COSTS
The markets in the pulp, paper and packaging product
lines are large and fragmented. The major markets,
both U.S. and non-U.S., in which the Company sells its
principal products are very competitive. Our products
compete with similar products produced by other forest
products companies. We also compete, in some
instances, with companies in other industries and
against substitutes for wood-fiber products.
Many factors influence the Company’s competitive
position, including price, cost, product quality and
services. You can find more information about the
impact of these factors on operating profits on pages
17 through 30 of Item 7. Management’s Discussion and
Analysis of Financial Condition and Results of