01—Abstract
Summary
Summary of the 10-K filed February 21, 2025. Cited figures are marked; the original filing is the authoritative source.
International Paper Company reported full-year 2024 net earnings attributable to shareholders of $557 milliona ($1.57 per diluted share), compared with $288 million ($0.82 per diluted share) in 2023.
Net sales were $18.6 billionb, down $297 million or 2% from 2023, driven by lower sales volumes partially offset by higher sales prices. Adjusted operating earnings were $400 million ($1.13 per share) versus $438 million in 2023. Cash provided by operations was $1.68 billion and free cash flow was $757 million, with capital spending of $921 million.
Management said earnings stabilized in the fourth quarter of 2024 and expects to accelerate earnings improvement in 2025. The year was dominated by the 80/20 strategic approach, a corporate overhead restructuring, the planned closure of the Georgetown, South Carolina mill, and a review of strategic options for the Global Cellulose Fibers business. Restructuring and other charges totaled $221 millionc, and net special items were $363 million pre-tax.
A net income tax benefit of $415 milliond, driven by a $416 million benefit from an internal legal entity restructuring, produced a reported effective tax rate of (282)%. The company also completed its business combination with DS Smith on January 31, 2025, issuing 178,126,631 new shares, which holders will own approximately 34.1% of after issuance. The filing also discloses a February 2025 plan to close the Campti, Louisiana containerboard mill, with approximately $357 million of expected pre-tax charges in the first quarter of 2025.
At year-end 2024 the company had approximately $5.6 billion of outstanding indebtedness, $1.9 billion of credit facilities, and long-term credit ratings of BBB (S&P) and Baa2 (Moody's), both with stable outlooks. Investors should weigh the post-merger integration risks, the two-exchange listing, and the sensitivity of earnings to pricing and mill reliability.
02—Key points
Key Highlights
- Net earnings of $557 million ($1.57 per diluted share) in 2024, up from $288 million ($0.82 per diluted share) in 2023, though adjusted operating earnings declined to $400 million ($1.13 per share) from $438 million.
- Net sales of $18.6 billion, down $297 million or 2%, as lower sales volumes were partly offset by higher sales prices.
- Completed the DS Smith business combination on January 31, 2025, issuing 178,126,631 new shares; holders of those shares own approximately 34.1% of outstanding share capital, and the purchase consideration was approximately $9.9 billion.
- Cash provided by operations of $1.68 billion and free cash flow of $757 million in 2024; capital spending was $921 million, with approximately $1.2 billion planned for 2025.
- Restructuring and other charges of $221 million and pre-tax special items of $363 million in 2024, including a $119 million charge for the Georgetown, South Carolina mill closure and a planned Campti, Louisiana mill closure expected to cost approximately $357 million in Q1 2025.
- Total indebtedness of approximately $5.6 billion, with $1.9 billion of credit facilities and no borrowings outstanding under the $1.4 billion credit agreement at December 31, 2024.
- Strategic review of the Global Cellulose Fibers business announced October 31, 2024, with no assurance that it will result in a transaction.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2024, International Paper kept $0.04.
- Revenue$15.84B100.0%
- Cost of revenue−$11.40B72.0%
- Gross profit$4.44B28.0%
- Operating costs−$3.71B23.4%
- Operating income$725.0M4.6%
- Interest, other & tax−$168.0M1.1%
- Net income$557.0M3.5%
Where FY2024 revenue went
$15.84B- Cost of revenue: $11.40B, 72% of revenue
- Other operating costs: $2.01B, 13% of revenue
- Net income: $557.0M, 3.5% of revenue
- SG&A: $1.70B, 11% of revenue
- Interest, other & tax: $168.0M, 1.1% of revenue
Kept 3.5% as net incomeInterest, other & tax $168.0M · 1.1%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2024filed February 21, 2025Financial Statements
FY2024 against FY2023
| Line item | FY2024FY2023 | Change |
|---|---|---|
| Revenue | $15.84B$16.03B | −1.2% |
| Cost of Revenue | $11.40B$11.51B | −1.0% |
| Gross Profit | $4.44B$4.52B | −1.8% |
| SG&A Expenses | $1.70B$1.26B | +35.5% |
| Operating Income | $725.00M$313.00M | +131.6% |
| Interest Expense | $432.00M$418.00M | +3.3% |
| Net Income | $557.00M$288.00M | +93.4% |
| EPS (Basic) | $1.60$0.83 | +92.8% |
| EPS (Diluted) | $1.57$0.82 | +91.5% |
| Shares Outstanding (Basic) | 347.20M346.90M | +0.1% |
| Shares Outstanding (Diluted) | 354.20M349.10M | +1.5% |
05—Questions
Frequently Asked Questions
What drove the change in International Paper's 2024 earnings?
Net earnings rose to $557 million from $288 million, largely due to a $416 million tax benefit from an internal legal entity restructuring and lower accelerated depreciation. Adjusted operating earnings fell to $400 million from $438 million, as higher selling and administrative expenses, driven by $325 million of higher incentive compensation, and higher operating costs offset gains from higher sales prices.
What is the status of the DS Smith combination and its share issuance?
The combination closed on January 31, 2025. International Paper issued 178,126,631 new shares, which holders will own approximately 34.1% of its outstanding share capital. The company now trades on the NYSE as IP and on the London Stock Exchange as IPC, and it agreed to divest plants in Mortagne, Saint-Amand, Cabourg, Ovar and Bilbao as a condition of European Commission clearance.
What cost reduction and restructuring actions is the company taking?
Under its 80/20 strategic approach, the company restructured its corporate organization, which it expects to reduce costs by approximately $120 million on a run-rate basis. Closing five box plants and the Georgetown, South Carolina mill is expected to remove roughly another $110 million of annual cost. On February 13, 2025, it announced the Campti, Louisiana containerboard mill closure, with approximately $357 million of pre-tax charges expected in the first quarter of 2025.
How strong is the company's liquidity and debt position?
At December 31, 2024, the company had approximately $5.6 billion of outstanding indebtedness and $1.9 billion of credit facilities, with no borrowings under its $1.4 billion credit agreement. Cash and temporary investments were $1.17 billion. The company holds long-term credit ratings of BBB (stable outlook) from S&P and Baa2 (stable outlook) from Moody's, and it was in compliance with all debt covenants.
What is the outlook for 2025 and what risks should investors monitor?
Management said 2025 will be a transformational year, expecting earnings to stabilize in early 2025 and progressively ramp up as commercial contract restructuring completes and 80/20 initiatives deliver value. Key risks include integrating DS Smith, operating two exchange listings with possible pricing differentials, the outcome of the Global Cellulose Fibers strategic review, and the Brazilian tax matter, where the potential liability under the Sylvamo agreement is currently estimated at approximately $210 million.
06—Continue