International Paper 2015 Annual Report Download - page 41

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million was recorded during the third quarter in the
Company's Consumer Packaging segment to write
down the long-lived assets of this business to their
estimated fair value. In the fourth quarter of 2015, upon
the sale and corresponding deconsolidation of IP-Sun
JV from the Company's consolidated balance sheet,
final adjustments were made resulting in a reduction
of the impairment of $12 million. The amount of pre-tax
losses related to noncontrolling interest of the IP-Sun
JV included in the Company's consolidated statement
of operations for the years ended December 31, 2015,
2014 and 2013 were $19 million, $12 million and $8
million, respectively. The amount of pre-tax losses
related to the IP-Sun JV included in the Company's
consolidated statement of operations for the years
ended December 31, 2015, 2014 and 2013 were $226
million, $51 million and $41 million, respectively.
The net 2015 loss totaling $174 million related to the
impairment of Sun-JV is included in Net (gains) losses
on sales and impairments of businesses in the
accompanying consolidated statement of operations.
2014: During 2014, the Company recorded net pre-tax
charges of $47 million ($36 million after taxes) for a loss
on the sale of a business by ASG (formerly referred to
as AGI-Shorewood), in which we hold an investment
and the subsequent partial impairment of our ASG
investment, and a pre-tax gain of $9 million ($5 million
after taxes) related to the sale of an investment.
2013: During 2013, the Company recorded net pre-tax
charges of $3 million ($1 million after taxes) for
adjustments related to the divestiture of three
containerboard mills in 2012 and the sale of the
Shorewood business.
Industry Segment Operating Profits
Industry segment operating profits of $2.4 billion in 2015
decreased from $2.1 billion in 2014. The benefit from
lower input costs ($232 million) was offset by lower
average sales price realizations and mix ($226 million),
lower sales volumes ($38 million), higher operating
costs ($16 million), higher maintenance outage costs
($37 million) and higher other costs ($23 million).
Special items were a $321 million net loss in 2015
compared with a net loss of $732 million in 2014.
Market-related downtime in 2015 increased to
approximately 440,000 tons from approximately
281,000 tons in 2014.
DESCRIPTION OF INDUSTRY SEGMENTS
International Paper’s industry segments discussed
below are consistent with the internal structure used to
manage these businesses. All segments are
differentiated on a common product, common customer
basis consistent with the business segmentation
generally used in the forest products industry.
Industrial Packaging
International Paper is the largest manufacturer of
containerboard in the United States. Our U.S.
production capacity is over 13 million tons annually. Our
products include linerboard, medium, whitetop,
recycled linerboard, recycled medium and saturating
kraft. About 80% of our production is converted
domestically into corrugated boxes and other
packaging by our 165 U.S. container plants.
Additionally, we recycle approximately one million tons
of OCC and mixed and white paper through our 18
recycling plants. In EMEA, our operations include two
recycled fiber containerboard mills in Morocco and
Turkey and 26 container plants in France, Italy, Spain,
Morocco and Turkey. In Brazil our operations include
three containerboard mills and four box plants. In Asia,
our operations include 16 container plants in China and
additional container plants in Indonesia, Malaysia,
Singapore, and Thailand. Our container plants are
supported by regional design centers, which offer total
packaging solutions and supply chain initiatives.
Printing Papers
International Paper is one of the world’s leading
producers of printing and writing papers. Products in
this segment include uncoated papers and pulp.
Uncoated Papers: This business produces papers for use
in copiers, desktop and laser printers and digital
imaging. End use applications include advertising and
promotional materials such as brochures, pamphlets,
greeting cards, books, annual reports and direct mail.
Uncoated papers also produces a variety of grades that
are converted by our customers into envelopes, tablets,
business forms and file folders. Uncoated papers are
sold under private label and International Paper brand
names that include Hammermill, Springhill,
Williamsburg, Postmark, Accent, Great White,
Chamex, Ballet, Rey, Pol, and Svetocopy. The mills
producing uncoated papers are located in the United
States, France, Poland, Russia, Brazil and India. The
mills have uncoated paper production capacity of
approximately 4 million tons annually. Brazilian
operations function through International Paper do
Brasil, Ltda, which owns or manages approximately
335,000 acres of forestlands in Brazil.