International Paper 2015 Annual Report Download - page 76

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the xpedx business (Distribution segment). Effective July
1, 2014, the Company completed the spinoff of its xpedx
business which had historically represented the
Company's Distribution reportable segment. Following the
spinoff of xpedx, the assets and liabilities of this business
have been adjusted off of the consolidated balance sheet
and are not included in balances as of December 31, 2014.
OTHER INTANGIBLES
Identifiable intangible assets comprised the following:
2015 2014
In millions at
December 31
Gross
Carrying
Amount
Accumulated
Amortization
Gross
Carrying
Amount
Accumulated
Amortization
Customer relationships and lists $ 495 $ 166 $ 561 $ 157
Non-compete agreements 69 56 74 53
Tradenames, patents and
trademarks 61 54 61 44
Land and water rights 33 6 81 9
Software 22 20 23 22
Other 46 29 48 24
Total $ 726 $ 331 $ 848 $ 309
The Company recognized the following amounts as
amortization expense related to intangible assets:
In millions 2015 2014 2013
Amortization expense related to
intangible assets $60$73$79
Based on current intangibles subject to amortization,
estimated amortization expense for each of the succeeding
years is as follows: 2016 – $46 million, 2017 – $44 million,
2018 – $35 million, 2019 – $33 million, 2020 – $32 million,
and cumulatively thereafter – $199 million.
NOTE 10 INCOME TAXES
The components of International Paper’s earnings from
continuing operations before income taxes and equity
earnings by taxing jurisdiction were as follows:
In millions 2015 2014 2013
Earnings (loss)
U.S. $1,147 $ 565 $ 775
Non-U.S. 119 307 453
Earnings (loss) from continuing
operations before income taxes
and equity earnings $1,266 $ 872 $ 1,228
The provision (benefit) for income taxes (excluding
noncontrolling interests) by taxing jurisdiction was as
follows:
In millions 2015 2014 2013
Current tax provision (benefit)
U.S. federal $62$ 175 $ (663)
U.S. state and local 12 9(98)
Non-U.S. 111 74 95
$ 185 $ 258 $ (666)
Deferred tax provision (benefit)
U.S. federal $ 321 $(67)$206
U.S. state and local 30 5(18)
Non-U.S. (70) (73) (20)
$ 281 $(135)$ 168
Income tax provision (benefit) $ 466 $ 123 $ (498)
The Company’s deferred income tax provision (benefit)
includes a $3 million provision, a $13 million benefit and
a $7 million provision for 2015, 2014 and 2013,
respectively, for the effect of changes in non-U.S. and
U.S. state tax rates.
International Paper made income tax payments, net of
refunds, of $149 million, $172 million and $291 million
in 2015, 2014 and 2013, respectively.
A reconciliation of income tax expense using the
statutory U.S. income tax rate compared with the actual
income tax provision follows:
In millions 2015 2014 2013
Earnings (loss) from continuing
operations before income taxes
and equity earnings $ 1,266 $872 $
1,228
Statutory U.S. income tax rate 35% 35% 35 %
Tax expense (benefit) using
statutory U.S. income tax rate 443 305 430
State and local income taxes 27 10 (2)
Tax rate and permanent
differences on non-U.S. earnings (44) (72) (90)
Net U.S. tax on non-U.S.
dividends 12 16 (15)
Tax benefit on manufacturing
activities (14) (46) (27)
Non-deductible business
expenses 874
Non-deductible impairments 109 35 37
Sale of non-strategic assets (61) ——
Tax audits ——(770)
Subsidiary liquidation —(85) —
Retirement plan dividends (5) (5) (5)
Tax basis adjustments ——(33)
Tax credits (15) (34) (23)
Other, net 6(8) (4)
Income tax provision (benefit) $ 466 $123 $
(498)
Effective income tax rate 37% 14% (41)%