International Paper 2015 Annual Report Download - page 27

Download and view the complete annual report

Please find page 27 of the 2015 International Paper annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 117

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117

10
and employment laws and regulations that could
significantly increase our operating costs and reduce
our operational flexibility.
RESULTS OF LEGAL PROCEEDINGS COULD HAVE
A MATERIAL EFFECT ON OUR CONSOLIDATED
FINANCIAL STATEMENTS. The costs and other
effects of pending litigation against us cannot be
determined with certainty. Although we do not believe
that the outcome of any pending or threatened lawsuits
or claims will have a material effect on our business or
consolidated financial statements, there can be no
assurance that the outcome of any lawsuit or claim will
be as expected.
RISKS RELATING TO OUR OPERATIONS
MATERIAL DISRUPTIONS AT ONE OF OUR
MANUFACTURING FACILITIES COULD
NEGATIVELY IMPACT OUR FINANCIAL RESULTS.
We operate our facilities in compliance with applicable
rules and regulations and take measures to minimize
the risks of disruption at our facilities. A material
disruption at our corporate headquarters or one of our
manufacturing facilities could prevent us from meeting
customer demand, reduce our sales and/or negatively
impact our financial condition. Any of our manufacturing
facilities, or any of our machines within an otherwise
operational facility, could cease operations
unexpectedly due to a number of events, including:
• fires, floods, earthquakes, hurricanes or other
catastrophes;
• the effect of a drought or reduced rainfall on its
water supply;
• the effect of other severe weather conditions on
equipment and facilities;
• terrorism or threats of terrorism;
• domestic and international laws and regulations
applicable to our Company and our business
partners, including joint venture partners, around
the world;
• unscheduled maintenance outages;
• prolonged power failures;
• an equipment failure;
• a chemical spill or release;
• explosion of a boiler;
• damage or disruptions caused by third parties
operating on or adjacent to one of our
manufacturing facilities;
• disruptions in the transportation infrastructure,
including roads, bridges, railroad tracks and
tunnels;
• widespread outbreak of an illness or any other
communicable disease, or any other public health
crisis;
• labor difficulties; and
• other operational problems.
Any such downtime or facility damage could prevent us
from meeting customer demand for our products and/
or require us to make unplanned expenditures. If one
of these machines or facilities were to incur significant
downtime, our ability to meet our production targets and
satisfy customer requirements could be impaired,
resulting in lower sales and having a negative effect on
our business and financial results.
WE ARE SUBJECT TO INFORMATION
TECHNOLOGY RISKS RELATED TO BREACHES
OF SECURITY PERTAINING TO SENSITIVE
COMPANY, CUSTOMER, EMPLOYEE AND VENDOR
INFORMATION AS WELL AS BREACHES IN THE
TECHNOLOGY USED TO MANAGE OPERATIONS
AND OTHER BUSINESS PROCESSES. Our business
operations rely upon secure information technology
systems for data capture, processing, storage and
reporting. Despite careful security and controls design,
implementation, updating and independent third party
verification, our information technology systems, and
those of our third party providers, could become subject
to employee error or malfeasance, cyber attacks, or
natural disasters. Network, system, application and
data breaches could result in operational disruptions or
information misappropriation including, but not limited
to, interruption to systems availability, denial of access
to and misuse of applications required by our customers
to conduct business with International Paper. Access
to internal applications required to plan our operations,
source materials, manufacture and ship finished goods
and account for orders could be denied or misused.
Theft of intellectual property or trade secrets, and
inappropriate disclosure of confidential company,
employee, customer or vendor information, could stem
from such incidents. Any of these operational
disruptions and/or misappropriation of information
could result in lost sales, business delays, negative
publicity and could have a material effect on our
business.
CERTAIN OPERATIONS ARE CONDUCTED BY
JOINT VENTURES THAT WE CANNOT OPERATE
SOLELY FOR OUR BENEFIT. Certain operations in
Russia are carried on by a joint venture, Ilim. In joint
ventures, we share ownership and management of a
company with one or more parties who may or may not
have the same goals, strategies, priorities or resources