International Paper 2015 Annual Report Download - page 40

Download and view the complete annual report

Please find page 40 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

23
In addition, restructuring and other charges totaling
$569 million before taxes ($349 million after taxes) were
recorded in the Industrial Packaging, Printing Papers
and Consumer Packaging industry segments including:
• a $554 million charge before taxes ($338 million
after taxes) for costs related to the shutdown of
the Courtland, Alabama mill, and
• a $15 million charge before taxes ($11 million after
taxes) for other items.
2013: During 2013, corporate restructuring and other
charges totaling a gain of $5 million before taxes ($3
million after taxes) were recorded. These charges
included:
• a $25 million charge before taxes ($16 million after
taxes) for costs related to the early extinguishment
of debt (see Note 13 Debt and Lines of Credit on
pages 66 and 67 of Item 8. Financial Statements
and Supplementary Data), and
• a $30 million gain before taxes ($19 million after
taxes) for insurance reimbursements related to
the Guaranty Bank legal settlement.
In addition, restructuring and other charges totaling
$161 million before taxes ($101 million after taxes) were
recorded in the Industrial Packaging, Printing Papers
and Consumer Packaging industry segments including:
• a $118 million charge before taxes ($72 million
after taxes) for costs related to the shutdown of
the Courtland, Alabama mill,
• a $45 million charge before taxes ($28 million after
taxes) for costs related to the shutdown of a paper
machine at the Augusta, Georgia mill, and
• a $2 million gain before taxes (loss of $1 million
after taxes) for other items.
Impairments of Goodwill
In the fourth quarter of 2015, in conjunction with the
annual testing of its reporting units for possible goodwill
impairments, the Company calculated the estimated
fair value of its Brazil Packaging business using the
discounted future cash flows and determined that all of
the goodwill in the business, totaling $137 million,
should be written off. The decline in the fair value of the
Brazil Packaging business and resulting impairment
charge was due to the negative impacts on the cash
flows of the business caused by the continued decline
of the overall Brazilian economy.
In the fourth quarter of 2014, in conjunction with the
annual testing of its reporting units for possible goodwill
impairments, the Company calculated the estimated
fair value of its Asia Industrial Packaging business using
expected discounted future cash flows and determined
that due to a change in the strategic outlook, all of the
goodwill of this business, totaling $100 million, should
be written off. The decline in the fair value of the Asia
Industrial Packaging business and resulting impairment
charge was due to a change in the strategic outlook for
the business.
In the fourth quarter of 2013, in conjunction with the
annual testing of its reporting units for possible goodwill
impairments, the Company calculated the estimated
fair value of its India Papers business using the
discounted future cash flows and determined that all of
the goodwill of this business, totaling $112 million,
should be written off. The decline in the fair value of the
India Papers reporting unit and resulting impairment
charge was due to a change in the strategic outlook for
the India Papers operations.
Also in the fourth quarter of 2013, the Company
calculated the estimated fair value of its xpedx business
using the discounted future cash flows and wrote off all
of the goodwill of its xpedx business, totaling $400
million, which has been included in Discontinued
operations in the accompanying consolidated
statement of operations. The decline in the fair value of
the xpedx reporting unit and resulting impairment
charge was due to a significant decline in earnings and
a change in the strategic outlook for the xpedx
operations.
Also during 2013, the Company recorded a pre-tax
charge of $15 million ($7 million after taxes and
noncontrolling interest) for the impairment of a trade
name intangible asset related to our India Papers
business.
Net Losses on Sales and Impairments of Businesses
Net losses on sales and impairments of businesses
included in special items totaled a pre-tax loss of $174
million ($113 million after taxes) in 2015, a pre-tax loss
of $38 million ($31 million after taxes) in 2014 and a
pre-tax loss of $3 million ($1 million after taxes) in 2013.
The principal components of these losses were:
2015: On October 13, 2015, the Company finalized the
sale of its 55% interest in IP Asia Coated Paperboard
(IP-Sun JV) business, within the Company's Consumer
Packaging segment, to its Chinese coated board joint
venture partner, Shandong Sun Holding Group Co., Ltd.
for RMB 149 million (approximately USD $23 million).
During the third quarter of 2015, a determination was
made that the current book value of the asset group
exceeded its estimated fair value of $23 million, which
was the agreed upon selling price. The 2015 loss
includes the pre-tax impairment charge of $174 million
($113 million after taxes). A pre-tax charge of $186