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Supply Chain COMPANY OVERVIEW 2015 MAKING PRODUCTS PEOPLE DEPEND ON EVERY DAY PERFORMANCE PEOPLE PLANET International Paper is a global leader in packaging, paper, and pulp. We use renewable resources responsibly to make recyclable products that people depend on every day. We are unified around shared commitments to strengthen our people and communities, provide solutions for our customers, and ensure the sustainability of our company and our planet. Our fiber sourcing policies promote healthy and productive forests for generations to come In 2015, 93% of our facilities operated without a serious injury $15.5 million donated to address critical community needs and improve MAKING our planet PRODUCTS PEOPLE DEPEND ON CONTENTS EVERY DAY 2 2015 Highlights 3 CEO Comments 4 Businesses 6 Performance 12 People $22.4 billion 20 Planet net sales in 2015 28 Awards & Recognitions 29 Vision 2020 Goals International Paper Company Overview 2015 2 65% 13% 22% REVENUE Industrial Consumer Paper 2015 GLOBAL HIGHLIGHTS Packaging Packaging and Pulp We use renewable resources responsibly to make recyclable products people depend on every day. BY BUSINESS $2.6 billion net sales Manufacturing operations in 24 countries EMEA*/ Russia North Asia ** America $1.3 billion net sales Global 55,000 India $17.2 billion Headquarters: employees globally net sales Memphis, Tenn. $0.2 billion Latin net sales America 44,000 $1.1 billion volunteer hours net sales *Europe, Middle East, Africa worked by employees **Includes the net sales of the International Paper Sun joint venture through around the globe in 2015 October 13, 2015, the effective date of the sale of our interest in the business Fortune Magazine “World’s Most Every International Paper job of the energy used Ethisphere Institute’s 70 percent Admired Companies®” for the ® in our global mill system is generated supports 3.25 additional “World’s Most Ethical Companies ” th from renewable, carbon-neutral biomass 13 time supplier industry jobs 10 consecutive years according to Economic Policy Institute For more information about International Paper, our products, and our global citizenship efforts, visit internationalpaper.com. International Paper Company Overview 2015 3 WE DO THE RIGHT THINGS, IN We do business THE RIGHT WAYS, FOR THE RIGHT THE IP REASONS—THIS IS THE IP WAY. WAY The IP Way governs everything we do: from our relationships with people and communities, to our impact on the environment, to how we ensure our businesses will be successful for generations to come. In 2015, we built on this legacy of leadership, integrity, and continuous improvement in three key areas: PERFORMANCE PLANET We delivered a solid performance in a tough In the last five years we have made significant economic environment. We consider this a great progress toward our Vision 2020 Goals: we’ve reflection of the very strong portfolio of businesses reduced greenhouse gas emissions and waste that we’ve built and our focus on the things we to landfills, worked toward improving water quality control—meeting our customers’ needs, running and energy efficiency, and increased transparency in safely and reliably, and controlling our spending. our supply chain. These projects not only improve our By investing in and strengthening our business global environmental impact, but also help us reduce and global workforce, we demonstrated that we cost and mitigate risk. We will continue to improve can operate safely and sustainably, maintain our impact and promote the long-term sustainability leadership positions in attractive markets, and of both natural capital and our business. generate substantial free cash flow. Looking ahead, I am confident our long-term PEOPLE strategy will continue to create value for our Our most important responsibility is to employees, customers, communities, ensure the safety of our employees, contractors, shareowners, and our planet. and communities. I cannot emphasize that enough. Around the world, we are committed to providing a safe work environment, supporting and strengthening our workforce, and developing leaders at all levels. We also enhanced our global citizenship efforts, which means not only being a good neighbor and providing jobs in local communities, but also addressing critical community needs in the places where our employees live and work. Mark Sutton | Chairman and CEO International Paper Company Overview 2015 4 | 45 BUSINESSES Industrial Packaging Consumer Packaging Paper and Pulp International Paper is the world’s premier International Paper’s global coated paperboard International Paper’s global papers businesses manufacturer of containerboard and business is a premier producer of high-quality manufacture a wide variety of uncoated papers for corrugated packaging. Our containerboard coated paperboard used for a wide variety commercial printing, imaging, and converting customers. mills, box plants, and converting operations of packaging and foodservice applications. Customers rely on our signature brands including across the globe allow us to sustainably In addition to coated paperboard, consumer Accent®, Chamex®, Hammermill®, Pol™, Reflection™, meet the most challenging customer sales, packaging includes our foodservice business, and Rey® to communicate, advertise, educate, and inform. shipping, storage, and display requirements. which produces paper cups, food containers, and lids. International Paper’s pulp business produces fluff Industrial packaging also includes our pulp for absorbent hygiene products like baby diapers, North American recycling business, which Our consumer packaging business collaborates feminine care, adult incontinence, and other non-woven recovers, processes, and sells several with customers across a wide range of market products. These products serve diverse consumers who million tons of corrugated packaging segments to meet consumer-driven demand for share a common need for confidence in the quality and and paper annually. high-quality, sustainable, and innovative products. convenience of personal hygiene products. Customer segments: Customer segments: Customer segments: • Beverages • Pharmaceuticals • Specialty coffee • Consumers • Office products • Fruit and vegetables • Health and beauty • Grocery and • Schools • Retail packaging and convenience stores labeling applications • Protein and processed foods • Packaged food • Businesses • Hospitality • Absorbent • Consumer and industrial goods • General • Commercial printing hygiene products consumer goods • Shipping and distribution • Book publishing • Wipes, tabletop, and • Quick-service • eCommerce • Advertising medical non-wovens restaurants • Direct mail, bills, and statements International Paper Company Overview 2015 5 We make renewable products that people depend on every day. Our current investment to increase North American fluff pulp capacity will position International Paper to continue to meet the growing needs of our global customers. We are one of the largest recyclers of corrugated packaging and paper in the world. DELIVERING VALUE TO CUSTOMERS AND SHAREOWNERS We invest to strengthen our global businesses so we can meet market demand and adapt to the changing needs of our customers and the markets we serve. As an industry leader, we will continue to maintain our focus on execution, leadership, and delivering value, without ever sacrificing our responsibility to people and the planet. This focus creates long-term value for our customers and our shareowners. 7 $14.5 BILLION NET SALES $5 BILLION NET SALES INDUSTRIAL PACKAGING $22.4 billion PAPER AND PULP net sales $2.9 BILLION NET SALES CONSUMER PACKAGING PERFORMANCE International Paper Company Overview 2015 PERFORMANCE 8 2015 FINANCIAL SUMMARY We performed well despite a challenging global environment where demand for our products was mixed, the strong U.S. dollar hindered our ability to compete in export markets, the Brazilian economy was in recession, and China’s economy weakened significantly. Despite these challenges, we delivered: RECORD STRONG BEST return on free cash earnings per share invested capital flow in 20 years “Technology has enabled us to understand our processes to a greater degree; however, technology alone does not address all opportunities. The STRONG MARGINS AND EARNINGS in North American Industrial Packaging Manufacturing Excellence STRONG PERFORMANCE by Ilim joint venture approach provides the methods and tools for effective collaboration of diverse, cross-functional teams Annualized Dividend Per Share to drive improvements. I am continually amazed at the creativity 2013 $1.40 we achieve when we engage 2014 $1.60 people using the ME tools.” —Whitney Beall, Manufacturing Excellence Leadership Consultant ME Blackbelt 2015 $1.76 Loveland, Ohio, 16 years with International Paper International Paper Company Overview 2015 PERFORMANCE 9 MANUFACTURING EXCELLENCE A systematic approach to problem solving and achieving excellence Manufacturing Excellence (ME) is the underlying principle that helps us to meet our objectives. Company-wide use of ME is the key to continuous, deliberate improvement and sustained year-over-year success. Increasing customer A team, lead by ME green belts, utilized systematic approaches to address an ink-smearing issue at one of our European Mills. satisfaction via The team worked with the customer to investigate, analyze, and Manufacturing provide solutions that significantly improved communication between International Paper and the customer, increased customer Excellence satisfaction, and saved International Paper
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