# EDGAR Filing Document

**Accession Number:** 0000051434
**File Stem:** 0000051434-25-000048
**Filing Date:** 2025-8
**Character Count:** 257617
**Document Hash:** 5072a2e5ac0c6ea203ef0938ed3cc721
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000051434-25-000048.hdr.sgml**: 20250807

**ACCESSION NUMBER**: 0000051434-25-000048

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 101

**CONFORMED PERIOD OF REPORT**: 20250630

**FILED AS OF DATE**: 20250807

**DATE AS OF CHANGE**: 20250807

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** INTERNATIONAL PAPER CO /NEW/
- **CENTRAL INDEX KEY:** 0000051434
- **STANDARD INDUSTRIAL CLASSIFICATION:** PAPER MILLS [2621]
- **ORGANIZATION NAME:** 04 Manufacturing
- **EIN:** 130872805
- **STATE OF INCORPORATION:** NY
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-03157
- **FILM NUMBER:** 251193596

**BUSINESS ADDRESS:**
- **STREET 1:** 6400 POPLAR AVENUE
- **CITY:** MEMPHIS
- **STATE:** TN
- **ZIP:** 38197
- **BUSINESS PHONE:** 901-419-7000

**MAIL ADDRESS:**
- **STREET 1:** 6400 POPLAR AVENUE
- **CITY:** MEMPHIS
- **STATE:** TN
- **ZIP:** 38197

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** INTERNATIONAL PAPER & POWER CORP
- **DATE OF NAME CHANGE:** 19710527

?xml version='1.0' encoding='ASCII'? ip-20250630

**<u>[**Table of Contents**](#i23e23e74ffae4467b99480730e23722f_10)</u>**

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

**FORM 10-Q** 

☒ **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the Quarterly Period Ended June 30, 2025** 

☐ **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the Transition Period From &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; to &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**

_________________________________________

**Commission File Number 001-03157** 

**INTERNATIONAL PAPER COMPANY** 

**(Exact name of registrant as specified in its charter)**

---

| | |
|:---|:---|
| **New York** | **13-0872805** |
| (State or other jurisdiction of incorporation) | (I.R.S. Employer Identification No.) |
| **6400 Poplar Avenue, Memphis, Tennessee** | **38197** |
| **(Address of Principal Executive Offices)** | **(Zip Code)** |

---

**Registrant's telephone number, including area code: (901) 419-9000** 

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| Common Shares | IP | New York Stock Exchange |
| Common Shares | IPC | London Stock Exchange |

---

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.&nbsp;&nbsp;&nbsp;&nbsp;Yes ☒&nbsp;&nbsp;&nbsp;&nbsp;No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (paragraph 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).&nbsp;&nbsp;&nbsp;&nbsp;Yes ☒ No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

---

| | | | |
|:---|:---|:---|:---|
| Large accelerated filer | ☒ | Accelerated filer | ☐ |
| Non-accelerated filer | ☐ | Smaller reporting company | ☐ |
| | | Emerging growth company | ☐ |

---

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13 (a) of the Exchange

Act. ◻

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).&nbsp;&nbsp;&nbsp;&nbsp;Yes ☐&nbsp;&nbsp;&nbsp;&nbsp;No ☒

The number of shares outstanding of the registrant's common stock, par value $1.00 per share, as of August 1, 2025 was 527,982,095.

------

**<u>[**Table of Contents**](#i23e23e74ffae4467b99480730e23722f_10)</u>**

**INDEX**

---

| | | |
|:---|:---|:---|
| | | **PAGE NO.** |
| | **<u>[PART I. FINANCIAL INFORMATION](#i23e23e74ffae4467b99480730e23722f_13)</u>** | |
| <u>[Item 1.](#i23e23e74ffae4467b99480730e23722f_16)</u> | <u>[Financial Statements](#i23e23e74ffae4467b99480730e23722f_16)</u> |  |
|  | <u>Condensed Consolidated Statement of Operations - Three Months and Six Months Ended June 30, 2025 and 2024</u> | <u>[1](#i23e23e74ffae4467b99480730e23722f_19)</u> |
|  | <u>Condensed Consolidated Statement of Comprehensive Income - Three Months and Six Months Ended June 30, 2025 and 2024</u> | <u>[2](#i23e23e74ffae4467b99480730e23722f_22)</u> |
|  | <u>Condensed Consolidated Balance Sheet - June 30, 2025 and December 31, 2024</u> | <u>[3](#i23e23e74ffae4467b99480730e23722f_25)</u> |
|  | <u>Condensed Consolidated Statement of Cash Flows - Six Months Ended June 30, 2025 and 2024</u> | <u>[4](#i23e23e74ffae4467b99480730e23722f_28)</u> |
|  | <u>[Condensed Notes to Consolidated Financial Statements](#i23e23e74ffae4467b99480730e23722f_31)</u> | <u>[5](#i23e23e74ffae4467b99480730e23722f_31)</u> |
| <u>[Item 2.](#i23e23e74ffae4467b99480730e23722f_91)</u> | <u>[Management's Discussion and Analysis of Financial Condition and Results of Operations](#i23e23e74ffae4467b99480730e23722f_91)</u> | <u>[30](#i23e23e74ffae4467b99480730e23722f_91)</u> |
| <u>[Item 3.](#i23e23e74ffae4467b99480730e23722f_103)</u> | <u>[Quantitative and Qualitative Disclosures About Market Risk](#i23e23e74ffae4467b99480730e23722f_103)</u> | <u>[42](#i23e23e74ffae4467b99480730e23722f_103)</u> |
| <u>[Item 4.](#i23e23e74ffae4467b99480730e23722f_106)</u> | <u>[Controls and Procedures](#i23e23e74ffae4467b99480730e23722f_106)</u> | <u>[42](#i23e23e74ffae4467b99480730e23722f_106)</u> |
|  | **<u>[PART II. OTHER INFORMATION](#i23e23e74ffae4467b99480730e23722f_109)</u>** |  |
| <u>[Item 1.](#i23e23e74ffae4467b99480730e23722f_112)</u> | <u>[Legal Proceedings](#i23e23e74ffae4467b99480730e23722f_112)</u> | <u>[43](#i23e23e74ffae4467b99480730e23722f_112)</u> |
| <u>[Item 1A.](#i23e23e74ffae4467b99480730e23722f_115)</u> | <u>[Risk Factors](#i23e23e74ffae4467b99480730e23722f_115)</u> | <u>[43](#i23e23e74ffae4467b99480730e23722f_115)</u> |
| <u>[Item 2.](#i23e23e74ffae4467b99480730e23722f_118)</u> | <u>[Unregistered Sales of Equity Securities and Use of Proceeds](#i23e23e74ffae4467b99480730e23722f_118)</u> | <u>[44](#i23e23e74ffae4467b99480730e23722f_118)</u> |
| <u>[Item 3.](#i23e23e74ffae4467b99480730e23722f_121)</u> | <u>[Defaults Upon Senior Securities](#i23e23e74ffae4467b99480730e23722f_121)</u> | <u>[44](#i23e23e74ffae4467b99480730e23722f_118)</u> |
| <u>[Item 4.](#i23e23e74ffae4467b99480730e23722f_124)</u> | <u>[Mine Safety Disclosures](#i23e23e74ffae4467b99480730e23722f_124)</u> | <u>[44](#i23e23e74ffae4467b99480730e23722f_118)</u> |
| <u>[Item 5.](#i23e23e74ffae4467b99480730e23722f_127)</u> | <u>[Other Information](#i23e23e74ffae4467b99480730e23722f_127)</u> | <u>[44](#i23e23e74ffae4467b99480730e23722f_118)</u> |
| <u>[Item 6.](#i23e23e74ffae4467b99480730e23722f_130)</u> | <u>[Exhibits](#i23e23e74ffae4467b99480730e23722f_130)</u> | <u>[47](#i23e23e74ffae4467b99480730e23722f_130)</u> |
| <u>[Signatures](#i23e23e74ffae4467b99480730e23722f_133)</u> | <u>[Signatures](#i23e23e74ffae4467b99480730e23722f_133)</u> | <u>[48](#i23e23e74ffae4467b99480730e23722f_133)</u> |

---

------

**<u>[**Table of Contents**](#i23e23e74ffae4467b99480730e23722f_10)</u>**

**<u>[PART I. FINANCIAL INFORMATION](#i23e23e74ffae4467b99480730e23722f_13)</u>**

**ITEM 1.<u>[FINANCIAL STATEMENTS](#i23e23e74ffae4467b99480730e23722f_16)</u>**

**INTERNATIONAL PAPER COMPANY**

**<u>[Condensed Consolidated Statement of Operations](#i23e23e74ffae4467b99480730e23722f_19)</u>**

**(Unaudited)**

**(In millions, except per share amounts)** 

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended<br>June 30,** | **Three Months Ended<br>June 30,** | **Six Months Ended<br>June 30,** | **Six Months Ended<br>June 30,** |
| | **2025** | **2024** | **2025** | **2024** |
| **Net Sales** | $**6767** | $4734 | $**12668** | $9353 |
| **Costs and Expenses** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cost of products sold | **4876** | 3360 | **9135** | 6784 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Selling and administrative expenses | **578** | 453 | **1108** | 811 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | **480** | 261 | **1051** | 539 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Distribution expenses | **578** | 379 | **1061** | 770 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Taxes other than payroll and income taxes | **49** | 35 | **142** | 76 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restructuring charges, net | **39** |  | **122** | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net (gains) losses on sales and impairments of businesses | **(51)** |  | **(51)** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net (gains) losses on sales of fixed assets | **—** | (5) | **(67)** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest expense, net | **107** | 55 | **188** | 101 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-operating pension expense (income) | **(5)** | (10) | **(2)** | (22) |
| **Earnings (Loss) Before Income Taxes and Equity Earnings (Loss)** | **116** | 206 | **(19)** | 291 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income tax provision (benefit) | **40** | (293) | **9** | (266) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Equity earnings (loss), net of taxes | **(1)** | (1) | **(2)** | (3) |
| **Net Earnings (Loss)** | $**75** | $498 | $**(30)** | $554 |
| **Basic Earnings (Loss) Per Share** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net earnings (loss) | $**0.14** | $1.43 | $**(0.06)** | $1.59 |
| **Diluted Earnings (Loss) Per Share** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net earnings (loss) | $**0.14** | $1.41 | $**(0.06)** | $1.57 |
| **Average Shares of Common Stock Outstanding – assuming dilution** | **532.6** | 352.8 | **483.0** | 352.7 |

---

The accompanying notes are an integral part of these condensed financial statements.

------

**<u>[**Table of Contents**](#i23e23e74ffae4467b99480730e23722f_10)</u>**

**INTERNATIONAL PAPER COMPANY**

**<u>[Condensed Consolidated Statement of Comprehensive Income](#i23e23e74ffae4467b99480730e23722f_22)</u>**

**(Unaudited)**

**(In millions)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended<br>June 30,** | **Three Months Ended<br>June 30,** | **Six Months Ended<br>June 30,** | **Six Months Ended<br>June 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| **Net Earnings (Loss)** | $**75** | $498 | $**(30)** | $554 |
| **Other Comprehensive Income (Loss), Net of Tax:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of pension and post-retirement prior service costs and net loss: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;U.S. plans | **16** | 17 | **32** | 34 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pension and postretirement adjustments: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;U.S. plans | **—** |  | **8** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in cumulative foreign currency translation adjustment | **645** | (39) | **1055** | (49) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net gains/losses on cash flow hedging derivatives: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net gains/(losses) on cash flow hedging derivatives | **—** |  | **(52)** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reclassification adjustment for (gains) losses included in net earnings (loss) | **8** |  | **7** |  |
| **Total Other Comprehensive Income (Loss), Net of Tax** | **669** | (22) | **1050** | (15) |
| **Comprehensive Income (Loss)** | $**744** | $476 | $**1020** | $539 |

---

The accompanying notes are an integral part of these condensed financial statements.

------

**<u>[**Table of Contents**](#i23e23e74ffae4467b99480730e23722f_10)</u>**

**INTERNATIONAL PAPER COMPANY**

**<u>[Condensed Consolidated Balance Sheet](#i23e23e74ffae4467b99480730e23722f_25)</u>**

**(In millions)**

---

| | | |
|:---|:---|:---|
| | **June 30,<br>2025** | **December 31,<br>2024** |
| | **(unaudited)** | |
| **Assets** | | |
| Current Assets |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and temporary investments | $**1135** | $1170 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts and notes receivable, net | **4767** | 2966 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contract assets | **451** | 396 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories | **2658** | 1784 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Assets held for sale | **58** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other current assets | **430** | 108 |
| Total Current Assets | **9499** | 6424 |
| Plants, Properties and Equipment, net | **16876** | 9658 |
| Goodwill | **7531** | 3038 |
| Intangibles, net | **4406** | 145 |
| Long-Term Financial Assets of Variable Interest Entities (Note 14) | **2340** | 2331 |
| Right of Use Assets | **712** | 433 |
| Overfunded Pension Plan Assets | **218** | 92 |
| Deferred Charges and Other Assets | **794** | 679 |
| **Total Assets** | $**42376** | $22800 |
| **Liabilities and Equity** |  |  |
| Current Liabilities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notes payable and current maturities of long-term debt | $**225** | $193 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | **4336** | 2316 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued payroll and benefits | **675** | 749 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other current liabilities | **1885** | 1000 |
| Total Current Liabilities | **7121** | 4258 |
| Long-Term Debt | **9694** | 5368 |
| Deferred Income Taxes | **2589** | 1072 |
| Long-Term Nonrecourse Financial Liabilities of Variable Interest Entities (Note 14) | **2124** | 2120 |
| Long-Term Lease Obligations | **475** | 292 |
| Underfunded Pension Benefit Obligation | **308** | 233 |
| Postretirement and Postemployment Benefit Obligation | **126** | 133 |
| Other Liabilities | **1322** | 1151 |
| Equity |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Common stock, $1 par value, 2025 – 627.0 shares and 2024 – 448.9 shares | **627** | 449 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Paid-in capital | **14374** | 4732 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Retained earnings | **8865** | 9393 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss | **(672)** | (1722) |
|  | **23194** | 12852 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Less: Common stock held in treasury, at cost, 2025 – 99.1 shares and 2024 – 101.5 shares | **4577** | 4679 |
| Total Equity | **18617** | 8173 |
| **Total Liabilities and Equity** | $**42376** | $22800 |

---

The accompanying notes are an integral part of these condensed financial statements.

------

**<u>[**Table of Contents**](#i23e23e74ffae4467b99480730e23722f_10)</u>**

**INTERNATIONAL PAPER COMPANY**

**<u>[Condensed Consolidated Statement of Cash Flows](#i23e23e74ffae4467b99480730e23722f_28)</u>**

**(Unaudited)**

**(In millions)**

---

| | | |
|:---|:---|:---|
| | **Six Months Ended<br>June 30,** | **Six Months Ended<br>June 30,** |
| | **2025** | **2024** |
| **Operating Activities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net earnings (loss) | $**(30)** | $554 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | **1051** | 539 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred income tax provision (benefit), net | **(95)** | (427) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restructuring charges, net | **122** | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net (gains) losses on sales and impairments of businesses | **(51)** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net (gains) losses on sales of fixed assets | **(67)** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Periodic pension (income) expense, net | **16** | (1) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other, net | **(75)** | 80 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts and notes receivable | **(211)** | (161) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contract assets | **(53)** | (3) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories | **28** | 112 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and other liabilities | **(348)** | 90 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest payable | **49** | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other | **(148)** | (30) |
| **Cash Provided By (Used For) Operations** | **188** | 760 |
| **Investment Activities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Capital expenditures | **(752)** | (449) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Acquisitions, net of cash acquired | **419** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from divestitures, net of transaction costs | **138** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from sale of fixed assets | **93** | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from insurance recoveries | **28** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other | **36** | (1) |
| **Cash Provided By (Used For) Investment Activities** | **(38)** | (446) |
| **Financing Activities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Issuance of debt | **349** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reduction of debt | **(149)** | (8) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in book overdrafts | **99** | (14) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repurchases of common stock and payments of restricted stock tax withholding | **(63)** | (22) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dividends paid | **(488)** | (321) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other | **(1)** |  |
| **Cash Provided By (Used For) Financing Activities** | **(253)** | (365) |
| **Effect of Exchange Rate Changes on Cash and Temporary Investments** | **68** | (13) |
| **Change in Cash and Temporary Investments** | **(35)** | (64) |
| **Cash and Temporary Investments** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Beginning of period | **1170** | 1113 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;End of period | $**1135** | $1049 |

---

The accompanying notes are an integral part of these condensed financial statements.

------

**<u>[**Table of Contents**](#i23e23e74ffae4467b99480730e23722f_10)</u>**

**INTERNATIONAL PAPER COMPANY**

**<u>[Condensed Notes to Consolidated Financial Statements](#i23e23e74ffae4467b99480730e23722f_31)</u>**

**(Unaudited)**

**<u>[NOTE 1 -](#i23e23e74ffae4467b99480730e23722f_34)[BASIS OF PRESENTATION](#i23e23e74ffae4467b99480730e23722f_34)</u>**

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States and in accordance with the instructions to Form 10-Q and, in the opinion of management, include all adjustments that are necessary for the fair presentation of International Paper Company's ("International Paper's," "the Company's," "IP's" or "our") financial position, results of operations, and cash flows for the interim periods presented. Except as disclosed herein, such adjustments are of a normal, recurring nature. Results for the first six months of the year may not necessarily be indicative of full year results. You should read these unaudited condensed financial statements in conjunction with the audited financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024 (the "Annual Report"), which have previously been filed with the U.S. Securities and Exchange Commission (the "SEC").

Following the completed acquisition of DS Smith Plc, subsequently re-registered as DS Smith Limited ("DS Smith") on January 31, 2025, the Chief Operating Decision Maker ("CODM") reviews and manages the financial results and operations of the following segments on the basis of the new organizational structure, Packaging Solutions North America, Packaging Solutions Europe, Middle East and Africa ("EMEA") and Global Cellulose Fibers. The Packaging Solutions EMEA segment includes the Company's legacy EMEA Industrial Packaging business and the EMEA DS Smith business acquired in the first quarter of 2025. As such, amounts related to the Company's legacy EMEA Industrial Packaging business have been recast out of the Industrial Packaging segment into the new Packaging Solutions EMEA segment for all prior periods. The acquired North America DS Smith business has been included in the Packaging Solutions North America segment. Amounts related to the Company's legacy North America Industrial Packaging business have been reported in the Packaging Solutions North America segment for all prior periods.

Additionally, certain amounts from prior year in the condensed consolidated balance sheet have been reclassified to conform with the current year financial statement presentation.

These unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States that require the use of management's estimates. Actual results could differ from management's estimates.

**<u>[NOTE 2 -](#i23e23e74ffae4467b99480730e23722f_37)[RECENT ACCOUNTING DEVELOPMENTS](#i23e23e74ffae4467b99480730e23722f_37)</u>**

**Recently Adopted Accounting Pronouncements**

***Income Taxes***

In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures." This guidance requires companies to enhance income tax disclosures, particularly around rate reconciliations and income taxes paid information. This guidance is effective for annual reporting periods beginning after December 15, 2024. Early adoption of these amendments is permitted and amendments should be applied prospectively. The Company adopted this guidance as of January 1, 2025 and will update disclosures within the Company's 2025 annual filing.

**Recently Issued Accounting Pronouncements Not Yet Adopted**

***Disaggregation of Income Statement Expenses***

In November 2024, the FASB issued ASU 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40)." This guidance requires companies to provide more detailed information of certain income statement expenses within the footnotes to the financial statements. This guidance is effective for annual reporting periods beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the provisions of this guidance.

------

**<u>[**Table of Contents**](#i23e23e74ffae4467b99480730e23722f_10)</u>**

**<u>[NOTE 3 -](#i23e23e74ffae4467b99480730e23722f_40)[REVENUE RECOGNITION](#i23e23e74ffae4467b99480730e23722f_40)</u>**

Generally, the Company recognizes revenue on a point-in-time basis when the customer takes title to the goods and assumes the risks and rewards for the goods. For customized goods where the Company has a legally enforceable right to payment for the goods, the Company recognizes revenue over time which, generally, is as the goods are produced.

***Disaggregated Revenue***

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended June 30, 2025** | **Three Months Ended June 30, 2025** | **Three Months Ended June 30, 2025** | **Three Months Ended June 30, 2025** | **Three Months Ended June 30, 2025** |
| ***In millions*** | **Packaging Solutions North America** | **Packaging Solutions EMEA** | **Global Cellulose Fibers** | **Corporate & Intersegment** | **Total** |
| **Primary Geographical Markets (a)** | | | | | |
| United States | $**3664** | $**—** | $**607** | $**(12)** | $**4259** |
| Europe, Middle East and Africa | **—** | **2291** | **21** | **—** | **2312** |
| Pacific Rim and Asia | **9** | **—** | **—** | **—** | **9** |
| Americas, other than U.S. | **187** | **—** | **—** | **—** | **187** |
| Total | $**3860** | $**2291** | $**628** | $**(12)** | $**6767** |

---

&nbsp;&nbsp;&nbsp;&nbsp;(a) Net sales are attributed to countries based on the location of the seller.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended June 30, 2024** | **Three Months Ended June 30, 2024** | **Three Months Ended June 30, 2024** | **Three Months Ended June 30, 2024** | **Three Months Ended June 30, 2024** |
| ***In millions*** | **Packaging Solutions North America** | **Packaging Solutions EMEA** | **Global Cellulose Fibers** | **Corporate & Intersegment** | **Total** |
| **Primary Geographical Markets (a)** | | | | | |
| United States | $3424 | $— | $669 | $61 | $4154 |
| Europe, Middle East and Africa |  | 328 | 17 |  | 345 |
| Pacific Rim and Asia | 19 |  | 31 |  | 50 |
| Americas, other than U.S. | 185 |  |  |  | 185 |
| Total | $3628 | $328 | $717 | $61 | $4734 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(a) Net sales are attributed to countries based on the location of the seller.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Six Months Ended June 30, 2025** | **Six Months Ended June 30, 2025** | **Six Months Ended June 30, 2025** | **Six Months Ended June 30, 2025** | **Six Months Ended June 30, 2025** |
| ***In millions*** | **Packaging Solutions North America** | **Packaging Solutions EMEA** | **Global Cellulose Fibers** | **Corporate & Intersegment** | **Total** |
| **Primary Geographical Markets (a)** | | | | | |
| United States | $**7162** | $**—** | $**1226** | $**(6)** | $**8382** |
| Europe, Middle East and Africa | **—** | **3841** | **44** | **—** | **3885** |
| Pacific Rim and Asia | **20** | **—** | **1** | **—** | **21** |
| Americas, other than U.S. | **380** | **—** | **—** | **—** | **380** |
| Total | $**7562** | $**3841** | $**1271** | $**(6)** | $**12668** |

---

&nbsp;&nbsp;&nbsp;&nbsp;(a) Net sales are attributed to countries based on the location of the seller.

------

**<u>[**Table of Contents**](#i23e23e74ffae4467b99480730e23722f_10)</u>**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Six Months Ended June 30, 2024** | **Six Months Ended June 30, 2024** | **Six Months Ended June 30, 2024** | **Six Months Ended June 30, 2024** | **Six Months Ended June 30, 2024** |
| ***In millions*** | **Packaging Solutions North America** | **Packaging Solutions EMEA** | **Global Cellulose Fibers** | **Corporate & Intersegment** | **Total** |
| **Primary Geographical Markets (a)** | | | | | |
| United States | $6689 | $— | $1319 | $142 | $8150 |
| Europe, Middle East and Africa |  | 676 | 37 |  | 713 |
| Pacific Rim and Asia | 33 |  | 65 |  | 98 |
| Americas, other than U.S. | 392 |  |  |  | 392 |
| Total | $7114 | $676 | $1421 | $142 | $9353 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(a) Net sales are attributed to countries based on the location of the seller.

***Revenue Contract Balances***

A contract asset is created when the Company recognizes revenue on its customized products prior to having an unconditional right to payment from the customer, which generally does not occur until title and risk of loss passes to the customer.

A contract liability is created when customers prepay for goods prior to the Company transferring those goods to the customer. The contract liability is reduced once control of the goods is transferred to the customer. The majority of our customer prepayments are received during the fourth quarter each year for goods that will be transferred to customers over the following twelve months. Contract liabilities of $23 million and $30 million are included in Other current liabilities in the accompanying condensed consolidated balance sheet as of June 30, 2025 and December 31, 2024, respectively. The Company also recorded a contract liability of $115 million related to a previous acquisition. The balance of this contract liability was $80 million and $84 million at June 30, 2025 and December 31, 2024, respectively, and is recorded in Other current liabilities and Other Liabilities in the accompanying condensed consolidated balance sheet.

The difference between the opening and closing balances of the Company's contract assets and contract liabilities primarily results from the difference between the price and quantity at comparable points in time for goods for which we have an unconditional right to payment or receive prepayment from the customer, respectively.

**<u>[NOTE 4 -](#i23e23e74ffae4467b99480730e23722f_43)[EQUITY](#i23e23e74ffae4467b99480730e23722f_43)</u>**

A summary of the changes in equity for the three months and six months ended June 30, 2025 and 2024 is provided below:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended June 30, 2025** | **Three Months Ended June 30, 2025** | **Three Months Ended June 30, 2025** | **Three Months Ended June 30, 2025** | **Three Months Ended June 30, 2025** | **Three Months Ended June 30, 2025** |
| ***In millions, except per share amounts*** | **Common Stock Issued** | **Paid-in Capital** | **Retained Earnings** | **Accumulated Other Comprehensive Income (Loss)** | **Common Stock Held In Treasury, At Cost** | **Total<br>Equity** |
| Balance, April 1 | $**627** | $**14350** | $**9038** | $**(1341)** | $**4582** | $**18092** |
| Issuance of stock for various plans, net | **—** | **24** | **—** | **—** | **(7)** | **31** |
| Repurchase of stock | **—** | **—** | **—** | **—** | **2** | **(2)** |
| Common stock dividends <br>($0.4625 per share) | **—** | **—** | **(248)** | **—** | **—** | **(248)** |
| Comprehensive income (loss) | **—** | **—** | **75** | **669** | **—** | **744** |
| Ending Balance, June 30 | $**627** | $**14374** | $**8865** | $**(672)** | $**4577** | $**18617** |

---

------

**<u>[**Table of Contents**](#i23e23e74ffae4467b99480730e23722f_10)</u>**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Six Months Ended June 30, 2025** | **Six Months Ended June 30, 2025** | **Six Months Ended June 30, 2025** | **Six Months Ended June 30, 2025** | **Six Months Ended June 30, 2025** | **Six Months Ended June 30, 2025** |
| ***In millions, except per share amounts*** | **Common Stock Issued** | **Paid-in Capital** | **Retained Earnings** | **Accumulated Other Comprehensive Income (Loss)** | **Common Stock Held In Treasury, At Cost** | **Total<br>Equity** |
| Balance, January 1 | $**449** | $**4732** | $**9393** | $**(1722)** | $**4679** | $**8173** |
| Issuance of stock for various plans, net | **—** | **(89)** | **—** | **—** | **(165)** | **76** |
| Issuance of stock for DS Smith acquisition | **178** | **9731** | **—** | **—** | **—** | **9909** |
| Repurchase of stock | **—** | **—** | **—** | **—** | **63** | **(63)** |
| Common stock dividends <br>($0.9250 per share) | **—** | **—** | **(498)** | **—** | **—** | **(498)** |
| Comprehensive income (loss) | **—** | **—** | **(30)** | **1050** | **—** | **1020** |
| Ending Balance, June 30 | $**627** | $**14374** | $**8865** | $**(672)** | $**4577** | $**18617** |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended June 30, 2024** | **Three Months Ended June 30, 2024** | **Three Months Ended June 30, 2024** | **Three Months Ended June 30, 2024** | **Three Months Ended June 30, 2024** | **Three Months Ended June 30, 2024** |
| ***In millions, except per share amounts*** | **Common Stock Issued** | **Paid-in Capital** | **Retained Earnings** | **Accumulated Other Comprehensive Income (Loss)** | **Common Stock Held In Treasury, At Cost** | **Total<br>Equity** |
| Balance, April 1 | $449 | $4663 | $9386 | $(1558) | $4683 | $8257 |
| Issuance of stock for various plans, net |  | 25 |  |  | (2) | 27 |
| Common stock dividends <br>($0.4625 per share) |  |  | (165) |  |  | (165) |
| Comprehensive income (loss) |  |  | 498 | (22) |  | 476 |
| Ending Balance, June 30 | $449 | $4688 | $9719 | $(1580) | $4681 | $8595 |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Six Months Ended June 30, 2024** | **Six Months Ended June 30, 2024** | **Six Months Ended June 30, 2024** | **Six Months Ended June 30, 2024** | **Six Months Ended June 30, 2024** | **Six Months Ended June 30, 2024** |
| ***In millions, except per share amounts*** | **Common Stock Issued** | **Paid-in Capital** | **Retained Earnings** | **Accumulated Other Comprehensive Income (Loss)** | **Common Stock Held In Treasury, At Cost** | **Total<br>Equity** |
| Balance, January 1 | $449 | $4730 | $9491 | $(1565) | $4750 | $8355 |
| Issuance of stock for various plans, net |  | (42) |  |  | (91) | 49 |
| Repurchase of stock |  |  |  |  | 22 | (22) |
| Common stock dividends <br>($0.9250 per share) |  |  | (326) |  |  | (326) |
| Comprehensive income (loss) |  |  | 554 | (15) |  | 539 |
| Ending Balance, June 30 | $449 | $4688 | $9719 | $(1580) | $4681 | $8595 |

---

------

**<u>[**Table of Contents**](#i23e23e74ffae4467b99480730e23722f_10)</u>**

**<u>[N](#i23e23e74ffae4467b99480730e23722f_46)[OTE 5 -](#i23e23e74ffae4467b99480730e23722f_46)[OTHER COMPREHENSIVE INCOME](#i23e23e74ffae4467b99480730e23722f_46)</u>**

The following table presents changes in Accumulated Other Comprehensive Income (Loss) ("AOCI"), net of tax, for the three months and six months ended June 30, 2025 and 2024:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended<br>June 30,** | **Three Months Ended<br>June 30,** | **Six Months Ended<br>June 30,** | **Six Months Ended<br>June 30,** |
| ***In millions*** | **2025** | **2024** | **2025** | **2024** |
| **Defined Benefit Pension and Postretirement Adjustments** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Balance at beginning of period | $**(1288)** | $(1259) | $**(1312)** | $(1276) |
| &nbsp;&nbsp;&nbsp;Amounts reclassified from accumulated other comprehensive income | **16** | 17 | **40** | 34 |
| &nbsp;&nbsp;&nbsp;Balance at end of period | **(1272)** | (1242) | **(1272)** | (1242) |
| **Change in Cumulative Foreign Currency Translation Adjustments** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Balance at beginning of period | **8** | (291) | **(402)** | (281) |
| &nbsp;&nbsp;&nbsp;Other comprehensive income (loss) before reclassifications | **645** | (39) | **1055** | (49) |
| &nbsp;&nbsp;&nbsp;Balance at end of period | **653** | (330) | $**653** | $(330) |
| **Net Gains and Losses on Cash Flow Hedging Derivatives** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Balance at beginning of period | **(61)** | (8) | **(8)** | (8) |
| &nbsp;&nbsp;&nbsp;Other comprehensive income (loss) before reclassifications | **—** |  | **(52)** |  |
| &nbsp;&nbsp;&nbsp;Amounts reclassified from accumulated other comprehensive income | **8** |  | **7** |  |
| &nbsp;&nbsp;&nbsp;Balance at end of period | **(53)** | (8) | **(53)** | (8) |
| **Total Accumulated Other Comprehensive Income (Loss) at End of Period** | $**(672)** | $(1580) | $**(672)** | $(1580) |

---

The following table presents details of the reclassifications out of AOCI for the three months and six months ended June 30, 2025 and 2024:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| ***In millions:*** | **Amount Reclassified from Accumulated Other Comprehensive Income (Loss)** | **Amount Reclassified from Accumulated Other Comprehensive Income (Loss)** | **Amount Reclassified from Accumulated Other Comprehensive Income (Loss)** | **Amount Reclassified from Accumulated Other Comprehensive Income (Loss)** | | **Location of Amount Reclassified from AOCI** |
| ***In millions:*** | **Three Months Ended<br>June 30,** | **Three Months Ended<br>June 30,** | **Six Months Ended<br>June 30,** | **Six Months Ended<br>June 30,** | | **Location of Amount Reclassified from AOCI** |
| ***In millions:*** | **2025** | **2024** | **2025** | **2024** |  | **Location of Amount Reclassified from AOCI** |
| Defined benefit pension and postretirement items: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Prior-service costs | $**(4)** | $(3) | $**(8)** | $(6) | (a) | Non-operating pension expense (income) |
| &nbsp;&nbsp;&nbsp;Actuarial gains (losses) | **(18)** | (20) | **(36)** | (39) | (a) | Non-operating pension expense (income) |
| &nbsp;&nbsp;&nbsp;Settlement charge | **—** |  | **(8)** |  | (a) | Non-operating pension expense (income) |
| Total pre-tax amount | **(22)** | (23) | **(52)** | (45) |  |  |
| &nbsp;&nbsp;&nbsp;Tax (expense) benefit | **6** | 6 | **12** | 11 |  |  |
| Net of tax | **(16)** | (17) | **(40)** | (34) |  |  |
| Net gains and losses on cash flow hedging derivatives: |  |  |  |  |  |  |
| &nbsp;&nbsp;Interest rate contracts | **(1)** | **—** | **(1)** | **—** | (b) | Interest expense, net |
| &nbsp;&nbsp;Commodity contracts | **(9)** | **—** | **(8)** |  | (b) | Cost of products sold |
| Total pre-tax amount | **(10)** | **—** | **(9)** |  |  |  |
| &nbsp;&nbsp;Tax (expense)/benefit | **2** | **—** | **2** | **—** |  |  |
| Net of tax | **(8)** |  | **(7)** |  |  |  |
| Total reclassifications for the period | $**(24)** | $(17) | $**(47)** | $(34) |  |  |

---

&nbsp;&nbsp;&nbsp;&nbsp;(a)These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see <u>[Note 17 - Retirement Plans](#i23e23e74ffae4467b99480730e23722f_82)</u> for additional details).

&nbsp;&nbsp;&nbsp;&nbsp;(b)This accumulated other comprehensive income component is included in our derivatives and hedging activities (see <u>[Note 16 - Derivatives and Hedging Activities](#i23e23e74ffae4467b99480730e23722f_79)</u> for additional details).

------

**<u>[**Table of Contents**](#i23e23e74ffae4467b99480730e23722f_10)</u>**

**<u>[NOTE 6 -](#i23e23e74ffae4467b99480730e23722f_49)[EARNINGS PER SHARE](#i23e23e74ffae4467b99480730e23722f_49)</u>**

Basic earnings per share is computed by dividing earnings by the weighted average number of common shares outstanding. Diluted earnings per share is computed assuming that all potentially dilutive securities were converted into common shares. There are no adjustments required to be made to net income for purposes of computing basic and diluted earnings per share. A reconciliation of the amounts included in the computation of basic earnings (loss) per share and diluted earnings (loss) per share is as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended<br>June 30,** | **Three Months Ended<br>June 30,** | **Six Months Ended<br>June 30,** | **Six Months Ended<br>June 30,** |
| ***In millions, except per share amounts*** | **2025** | **2024** | **2025** | **2024** |
| Net earnings (loss) | $**75** | $498 | $**(30)** | $554 |
| Weighted average common shares outstanding | **527.9** | 347.3 | **483.0** | 347.0 |
| Effect of dilutive securities (a) |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restricted performance share plan | **4.7** | 5.5 | **—** | 5.7 |
| Weighted average common shares outstanding – assuming dilution | **532.6** | 352.8 | **483.0** | 352.7 |
| Basic earnings (loss) per share | $**0.14** | $1.43 | $**(0.06)** | $1.59 |
| Diluted earnings (loss) per share | $**0.14** | $1.41 | $**(0.06)** | $1.57 |

---

(a) 5.4 million of securities were anti-dilutive for the six months ended June 30, 2025 and were not included in the table.

**<u>[NOTE 7 -](#i23e23e74ffae4467b99480730e23722f_52)[RESTRUCTURING CHARGES, NET](#i23e23e74ffae4467b99480730e23722f_52)</u>**

During the three months and six months ended June 30, 2025, the Company recorded restructuring charges of $7 million and $85 million, respectively, for costs associated with the permanent closure of our Red River containerboard mill in Campti, Louisiana. Included in the restructuring charges were severance charges of $17 million for the six months ended June 30, 2025, the majority of which have been paid, inventory charges of $3 million and $25 million for the three months and six months ended June 30, 2025, respectively, and other costs of $4 million and $43 million for the three months and six months ended June 30, 2025, respectively.

Additionally, the Company recorded restructuring charges of $32 million and $37 million during the three months and six months ended June 30, 2025, respectively, for other costs related to our 80/20 strategic approach.

**<u>[NOTE 8 -](#i23e23e74ffae4467b99480730e23722f_55)[ACQUISITIONS](#i23e23e74ffae4467b99480730e23722f_55)</u>**

As previously disclosed, on January 31, 2025, the Company completed its acquisition of the entire issued and to be issued share capital of DS Smith. Upon closing, IP issued 0.1285 shares for each DS Smith share, resulting in the issuance of 178,126,631 new shares of IP common stock ("New Company Common Stock"). As a result of the share issuance, the holders of the New Company Common Stock own approximately 34.1% of the Company's outstanding share capital. Based on the issuance of 178,126,631 new shares and the closing price of $55.63 on the close of January 31, 2025, the total purchase consideration for the completed acquisition was approximately $9.9 billion. Acquisition-related costs were $3 million and $90 million for the three months and six months ended June 30, 2025, respectively, and $17 million and $22 million for the three months and six months ended June 30, 2024, respectively, and were recorded in Selling and administrative expenses and Taxes other than payroll and income taxes in the accompanying condensed consolidated statement of operations. On February 4, 2025, the Company began trading the New Company Common Stock and continues to be listed on the New York Stock Exchange under the trading symbol "IP" and via a secondary listing on the London Stock Exchange under the trading symbol "IPC." The headquarters of the combined company is based in Memphis, Tennessee, and the EMEA headquarters has been established at DS Smith's existing main office in London.

The Company is accounting for the acquisition under ASC 805, "Business Combinations" and the results of operations have been included in International Paper's financial statements beginning with the date of acquisition.

------

**<u>[**Table of Contents**](#i23e23e74ffae4467b99480730e23722f_10)</u>**

The following table summarizes the provisional fair value assigned to assets and liabilities acquired as of January 31, 2025:

---

| | |
|:---|:---|
| ***In millions*** | ***In millions*** |
| Cash and temporary investments | $**453** |
| Accounts and notes receivable, net | **1375** |
| Inventories | **851** |
| Other current assets | **223** |
| Plants, properties and equipment | **6732** |
| Intangibles | **3998** |
| Goodwill | **4091** |
| Overfunded pension plan assets | **79** |
| Right of use assets | **252** |
| Deferred charges and other assets | **91** |
| **Total assets acquired** | **18145** |
| Notes payable and current maturities of long-term debt | **60** |
| Accounts payable | **1664** |
| Accrued payroll and benefits | **224** |
| Other current liabilities | **725** |
| Long-term debt | **3640** |
| Deferred income taxes | **1501** |
| Underfunded pension benefit obligation | **78** |
| Long-term lease obligations | **174** |
| Other liabilities | **170** |
| **Total liabilities assumed** | **8236** |
| **Net assets acquired** | $**9909** |

---

The provisional fair value assigned to the assets and liabilities acquired above were measured using Level 2 and Level 3 inputs, which are further defined in Note 1 in the Company's Annual Report. The estimated fair value of inventory was determined using the Comparative Sales and Replacement Cost methods. Fair value estimates related to the trade name and patents identified intangible assets were determined using the Relief from Royalty method. The fair value estimates related to customer relationships identified intangible assets were determined using the Multi-Period Excess Earnings method. The property, plant and equipment, specifically the machinery and equipment and buildings and improvements, were valued using either the indirect or direct methods of the Cost Approach, while the land was valued using the Sales Comparison Approach. The purchase price and related allocation are preliminary and could be revised as a result of adjustments made to the purchase price, additional information obtained regarding assets acquired and liabilities assumed, review of contracts and revisions of provisional estimates of fair values, including, but not limited to, the completion of independent appraisals and valuations related to inventory, property, plant and equipment, acquired intangible assets, leases, taxes, contract assets and derivatives. Adjustments to provisional amounts will be finalized as new information becomes available, but within the adjustment period of up to one year from the acquisition date. Goodwill is not deductible for local income tax purposes and is primarily related to the value of new customers through expansion opportunities not reflected in the fair value of the existing customers relationships and the value of the intellectual property beyond selected life for trade names. During the second quarter of 2025, we recorded adjustments to the preliminary purchase price allocation. These adjustments resulted in an approximately $300 million increase in property, plant and equipment due to additional information received during the measurement period. The change in property, plant and equipment also impacted intangible assets and goodwill resulting in a decrease of approximately $330 million of intangible assets and an increase of approximately $40 million in goodwill.

Since acquisition, Net sales of $2.1 billion and $3.5 billion and Net earnings (loss) of $(82) million and $(189) million have been included in the Company's condensed consolidated statement of operations for the three months and six months ended June 30, 2025, respectively.

------

**<u>[**Table of Contents**](#i23e23e74ffae4467b99480730e23722f_10)</u>**

The identifiable intangible assets acquired in connection with the acquisition of DS Smith included the following:

---

| | | |
|:---|:---|:---|
| *In millions* | **Estimated Fair Value** | **Average Useful Life** |
| Customer relationships and lists | $**3514** | 19 years |
| Tradenames, patents and trademarks, and developed technology | **379** | 15 years |
| Software (a) | **90** | 3 - 5 years |
| Other | **15** | Indefinite lived |
| **Total** | $**3998** |  |

---

(a) Of this balance, $57 million has been placed in service and $33 million is in development.

Below are the consolidated results on an unaudited pro forma basis assuming the DS Smith acquisition had closed on January 1, 2024:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended<br>June 30,** | **Three Months Ended<br>June 30,** | **Six Months Ended<br>June 30,** | **Six Months Ended<br>June 30,** |
| *In millions* | **2025<br>(Unaudited)** | **2024<br>(Unaudited)** | **2025<br>(Unaudited)** | **2024<br>(Unaudited)** |
| Net Sales | $**6767** | $6831 | $**13403** | $13557 |
| Net Earnings (Loss) | **104** | 475 | **(16)** | 453 |

---

The unaudited pro forma information for the three months ended June 30, 2025 excludes the non-recurring integration costs associated with the acquisition of $29 million. The unaudited pro forma information for the six months ended June 30, 2025 includes additional amortization expense on identifiable intangible assets of $13 million and additional depreciation expense on identifiable fixed assets of $13 million and excludes the write-off of the estimated fair value of inventory of $70 million and the non-recurring integration costs associated with the acquisition of $94 million.

The unaudited pro forma information for the three months ended June 30, 2024 includes additional amortization expense on identifiable intangible assets of $40 million, additional depreciation expense on identifiable fixed assets of $40 million and non-recurring integration costs associated with the acquisition of $29 million. The unaudited pro forma information for the six months ended June 30, 2024 includes additional amortization expense on identifiable intangible assets of $80 million, additional depreciation expense on identifiable fixed assets of $80 million, incremental expense of $70 million associated with the write-off of the estimated fair value of inventory and non-recurring integration costs associated with the acquisition of $94 million.

The unaudited pro forma consolidated financial information was prepared for comparative purposes only and includes certain adjustments, as noted above. The adjustments are estimates based on currently available information and actual amounts may have differed materially from these estimates. They do not reflect the effect of costs or synergies that would have been expected to result from the integration of the acquisition. The pro forma information does not purport to represent International Paper's actual results of operations as if the transaction described above would have occurred as of January 1, 2024, nor is it necessarily an indicator of future results.

In connection with the DS Smith acquisition, the European Commission issued its Phase I clearance of the business combination between International Paper and DS Smith on January 31, 2025, with the condition that International Paper commit to divest five European plants in Mortagne, Saint-Amand, and Cabourg (France), Ovar (Portugal) and Bilbao (Spain). On June 30, 2025, the Company completed the sale of these locations to Palm Group of Germany for €125 million (approximately $147 million at the June 30, 2025 exchange rate) in cash and recorded a net gain of $(51) million in Net (gains) losses on sales of businesses in the accompanying condensed consolidated statement of operations during the three months and six months ended June 30, 2025.

**<u>[NOTE 9 -](#i23e23e74ffae4467b99480730e23722f_58)[SUPPLEMENTAL FINANCIAL STATEMENT INFORMATION](#i23e23e74ffae4467b99480730e23722f_58)</u>**

***Temporary Investments*** 

Temporary investments with an original maturity of three months or less and money market funds with greater than three month maturities but with the right to redeem without notices are treated as cash equivalents and stated at cost. Temporary investments totaled $561 million and $990 million at June 30, 2025 and December 31, 2024, respectively.

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***Accounts and Notes Receivable, Net***

---

| | | |
|:---|:---|:---|
| ***In millions*** | **June 30, 2025** | **December 31, 2024** |
| Trade (less allowances of $70 and $30, respectively) | $**4151** | $2703 |
| Other | **616** | 263 |
| Total | $**4767** | $2966 |

---

As a result of the DS Smith acquisition, IP has a trade receivable factoring program that allows the Company to sell trade receivables without recourse.

***Inventories***

---

| | | |
|:---|:---|:---|
| ***In millions*** | **June 30, 2025** | **December 31, 2024** |
| Raw materials | $**522** | $188 |
| Finished pulp, paper and packaging | **1255** | 934 |
| Operating supplies | **761** | 623 |
| Other | **120** | 39 |
| Total | $**2658** | $1784 |

---

The last-in, first-out inventory method is used to value most of International Paper's U.S. inventories. Approximately 56% of total raw materials and finished products inventories were valued using this method. The last-in, first-out inventory reserve was $355 million and $336 million at June 30, 2025 and December 31, 2024, respectively.

***Plants, Properties and Equipment***

Accumulated depreciation was $20.3 billion and $19.6 billion at June 30, 2025 and December 31, 2024, respectively. Depreciation expense was $409 million and $251 million for the three months ended June 30, 2025 and 2024, respectively, and $928 million and $519 million for the six months ended June 30, 2025 and 2024, respectively. Depreciation expense for the six months ended June 30, 2025 includes $197 million of accelerated depreciation related to mill strategic actions and other 80/20 strategic actions.

Non-cash additions to plants, properties and equipment included within accounts payable were $196 million and $110 million at June 30, 2025 and December 31, 2024, respectively.

***Accounts Payable***

Under supplier finance programs, International Paper agrees to pay the relevant banks the stated amount of confirmed invoices from its designated suppliers on the original maturity dates of the invoices. International Paper or the relevant banks may terminate the agreement on notice periods from 28 to 90 days. The supplier invoices that have been confirmed as valid under the program require payment in full on the due date with no terms exceeding 180 days. The accounts payable balance included $438 million and $115 million of supplier finance program liabilities as of June 30, 2025 and December 31, 2024, respectively.

***Interest***

Interest payments made during both the six months ended June 30, 2025 and 2024 were $222 million.

Amounts related to interest were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended<br>June 30,** | **Three Months Ended<br>June 30,** | **Six Months Ended<br>June 30,** | **Six Months Ended<br>June 30,** |
| ***In millions*** | **2025** | **2024** | **2025** | **2024** |
| Interest expense | $**143** | $107 | $**276** | $216 |
| Interest income | **36** | 52 | **88** | 115 |
| Capitalized interest costs | **6** | 6 | **11** | 8 |

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***Asset Retirement Obligations***

The Company recorded liabilities in Other Liabilities in the accompanying condensed consolidated balance sheet of $151 million and $128 million related to asset retirement obligations at June 30, 2025 and December 31, 2024, respectively.

**<u>[NOTE 10 -](#i23e23e74ffae4467b99480730e23722f_61)[LEASES](#i23e23e74ffae4467b99480730e23722f_61)</u>**

International Paper leases various real estate, including certain operating facilities, warehouses, office space and land. The Company also leases material handling equipment, vehicles, and certain other equipment. The Company's leases have a remaining lease term of up to 28 years. Total lease costs were $126 million and $79 million for the three months ended June 30, 2025 and 2024, respectively, and $232 million and $158 million for the six months ended June 30, 2025 and 2024, respectively.

**Supplemental Balance Sheet Information Related to Leases**

---

| | | | |
|:---|:---|:---|:---|
| ***In millions*** | **Classification** | **June 30, 2025** | **December 31, 2024** |
| **Assets** | | | |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating lease assets | Right-of-use assets | $**712** | $433 |
| &nbsp;&nbsp;&nbsp;&nbsp;Finance lease assets | Plants, properties and equipment, net (a) | **80** | 39 |
| Total leased assets |  | $**792** | $472 |
| **Liabilities** |  |  |  |
| &nbsp;&nbsp;&nbsp;Current |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating | Other current liabilities | $**247** | $156 |
| &nbsp;&nbsp;&nbsp;&nbsp;Finance | Notes payable and current maturities of long-term debt | **18** | 11 |
| &nbsp;&nbsp;&nbsp;Noncurrent |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating | Long-term lease obligations | **475** | 292 |
| &nbsp;&nbsp;&nbsp;&nbsp;Finance | Long-term debt | **71** | 38 |
| Total lease liabilities |  | $**811** | $497 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(a)Finance leases are recorded net of accumulated amortization of $75 million and $70 million as of June 30, 2025 and December 31, 2024, respectively.

**Maturity of Lease Liabilities**

---

| | | | |
|:---|:---|:---|:---|
| ***In millions*** | **Operating Leases** | **Financing Leases** | **Total** |
| 2025 (six months) | $**142** | $**16** | $**158** |
| 2026 | **231** | **29** | **260** |
| 2027 | **168** | **17** | **185** |
| 2028 | **107** | **14** | **121** |
| 2029 | **56** | **10** | **66** |
| Thereafter | **103** | **15** | **118** |
| Total lease payments | **807** | **101** | **908** |
| Less imputed interest | **85** | **12** | **97** |
| Present value of lease liabilities | $**722** | $**89** | $**811** |

---

**<u>[NOTE 11 -](#i23e23e74ffae4467b99480730e23722f_64)[GOODWILL AND OTHER INTANGIBLES](#i23e23e74ffae4467b99480730e23722f_64)</u>**

***Goodwill***

The following table presents changes in goodwill balances as allocated to each business segment for the six months ended June 30, 2025:

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---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| ***In millions*** | **Packaging Solutions North America** | | **Packaging Solutions EMEA** | | **Global Cellulose Fibers** | **Total** |
| Balance as of January 1, 2025 |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Goodwill | $3334 |  | $76 |  | $52 | $3462 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accumulated impairment losses | (296) |  | (76) |  | (52) | (424) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | 3038 |  |  |  |  | 3038 |
| Goodwill additions/reductions (a) | **374** | **(c)** | **3717** | **(c)** | **—** | **4091** |
| Currency translation and other (b) | **1** |  | **401** |  | **—** | **402** |
| Balance as of June 30, 2025 |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Goodwill | **3472** |  | **4194** |  | **52** | **7718** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accumulated impairment losses | **(59)** |  | **(76)** |  | **(52)** | **(187)** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $**3413** |  | $**4118** |  | $**—** | $**7531** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Includes write-offs of previously impaired goodwill of $237 million and accumulated impairment losses of $(237) million.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Represents the effects of foreign currency translations and reclassifications.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Reflects the acquisition of DS Smith. See <u>[Note 8 - Acquisitions](#i23e23e74ffae4467b99480730e23722f_55)</u> for further details.

***Other Intangibles***

Identifiable intangible assets comprised of the following:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** | | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
| ***In millions*** | **Gross<br>Carrying<br>Amount** | **Accumulated<br>Amortization** | **Net Intangible Assets** | | **Gross<br>Carrying<br>Amount** | **Accumulated<br>Amortization** | **Net Intangible Assets** |
| Customer relationships and lists | $**4319** | $**452** | $**3867** |  | $489 | $360 | $129 |
| Tradenames, patents and trademarks, and developed technology | **589** | **178** | **411** |  | 170 | 162 | 8 |
| Software | **121** | **16** | **105** | **(a)** | 12 | 12 |  |
| Land and water rights | **8** | **2** | **6** |  | 8 | 2 | 6 |
| Other | **24** | **7** | **17** |  | 7 | 5 | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $**5061** | $**655** | $**4406** |  | $686 | $541 | $145 |

---

(a) Of this balance, $68 million has been placed in service and $37 million is in development.

The Company recognized the following amounts as amortization expense related to intangible assets:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended<br>June 30,** | **Three Months Ended<br>June 30,** | **Six Months Ended<br>June 30,** | **Six Months Ended<br>June 30,** |
| ***In millions*** | **2025** | **2024** | **2025** | **2024** |
| Amortization expense related to intangible assets | $**72** | $9 | $**123** | $19 |

---

Based on current intangibles subject to amortization, estimated amortization expense for each of the succeeding years is as follows:

---

| | |
|:---|:---|
| ***In millions*** | **Amortization Expense** |
| 2025 (six months) | $142 |
| 2026 | 284 |
| 2027 | 266 |
| 2028 | 261 |
| 2029 | 251 |
| Thereafter | 3181 |
| **Total** | $4385 |

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**<u>[NOTE 12 -](#i23e23e74ffae4467b99480730e23722f_67)[INCOME TAXES](#i23e23e74ffae4467b99480730e23722f_67)</u>**

International Paper made income tax payments, net of refunds, of $142 million and $153 million for the six months ended June 30, 2025 and 2024, respectively.

The Company currently estimates that, as a result of ongoing discussions, pending tax settlements and expirations of statutes of limitations, the amount of unrecognized tax benefits could be reduced by approximately $8 million during the next 12 months.

The Organization for Economic Cooperation and Development has proposed a 15% global minimum tax applied on a country-by-country basis (the "Pillar Two rule"), and many countries, including countries in which we operate, have enacted or begun the process of enacting laws adopting the Pillar Two rule. The first component of the Pillar Two rule became effective as of January 1, 2024, and did not have a material impact on the Company's effective tax rate. Following completion of the DS Smith acquisition on January 31, 2025, the evaluation of the impact of the second component of Pillar Two is ongoing but is not expected to have a material impact on the Company's effective tax rate for 2025.

The enactment of the One Big Beautiful Bill Act ("OBBBA") enacted in July 2025 introduced a wide range of tax policy changes. Key provisions include the extension of select elements of the Tax Cuts and Jobs Act, updates to the international tax framework, and the reinstatement of favorable treatment for certain business-related deductions. With staggered effective dates beginning in 2025 and extending through 2027, the Company is actively evaluating the OBBBA's potential implications on its consolidated financial statements.

**<u>[NOTE 13 -](#i23e23e74ffae4467b99480730e23722f_70)[COMMITMENTS AND CONTINGENCIES](#i23e23e74ffae4467b99480730e23722f_70)</u>**

***General***

The Company is involved in various inquiries, administrative proceedings and litigation relating to environmental and safety matters, personal injury, product liability, labor and employment, contracts, sales of property, intellectual property, tax, and other matters, that arise in the normal course of business. These matters may raise difficult and complicated legal issues and may be subject to many uncertainties and complexities. Moreover, some of these matters allege substantial or indeterminate monetary damages.

International Paper reviews inquiries, administrative proceedings and litigation, including with respect to environmental matters, on an ongoing basis and establishes an estimated liability for specific legal proceedings and other loss contingencies when it determines that the likelihood of an unfavorable outcome is probable, and the amount of the loss can be reasonably estimated. In addition, if the likelihood of an unfavorable outcome with respect to material loss contingencies is reasonably possible and International Paper is able to determine an estimate of the possible loss or range of loss, whether in excess of a related accrued liability of where there is no accrued liability, International Paper will disclose the estimate of the possible loss or range of loss. When no amount in a range of loss is more likely than any other amount in the range, the low end of the range is used as the estimate of the possible loss. International Paper's assessment of whether a loss is probable is based on management's assessment of the ultimate outcome of the matter.

Assessments of lawsuits and claims and the estimates reflected herein, are subject to significant judgments about future events, rely heavily on estimates and assumptions, and are otherwise subject to significant known and unknown uncertainties. The matters underlying such estimates may change from time to time and actual losses may vary significantly from current estimates. Additionally, the estimated liability for loss contingencies does not include matters or losses that are not reasonably estimable and probable.

Based on information currently known to International Paper, management believes that loss contingencies arising from pending matters, including the matters described herein, will not have a material adverse effect on the consolidated financial position or liquidity of the Company. However, in light of the inherent uncertainties involved in such matters, some of which are beyond the Company's control, and the large or indeterminate damages sought in some of these matters, a future adverse ruling, settlement, unfavorable development, or increase in accruals with respect to these matters could result in future charges that could be materially adverse to the Company's results of operations or cash flows in any particular reporting period.

***Environmental***

The Company has been named as a potentially responsible party ("PRP") in environmental remediation actions under various U.S. federal and state laws, including the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as

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amended ("CERCLA"). Many of these proceedings involve the cleanup of hazardous substances at large commercial landfills that received waste from many different sources. While joint and several liability is authorized under CERCLA and equivalent state laws, as a practical matter, liability for CERCLA cleanups is typically allocated among the many PRPs. There are other remediation costs typically associated with the cleanup of hazardous substances at the Company's current, closed and formerly-owned facilities, and recorded as liabilities in the balance sheet.

Remediation costs are recorded in the consolidated financial statements when they become probable and reasonably estimable. International Paper has estimated the probable liability associated with these environmental remediation matters, including those described herein, to be approximately $282 million and $279 million in the aggregate as of June 30, 2025 and December 31, 2024, respectively.

**Cass Lake:** One of the matters included above arises out of a closed wood-treatment facility located in Cass Lake, Minnesota. In June 2011, the U.S. Environmental Protection Agency ("EPA") selected and published a proposed soil remedy at the site. In April 2020, the EPA issued a final plan concerning clean-up standards at a portion of the site. The Company is performing remedial action ("RA") and continues to cooperate with the EPA on the remaining remediation goals at the site. The estimated liability for the Cass Lake superfund site was $48 million as of both June 30, 2025 and December 31, 2024.

**Kalamazoo River:** The Company is a PRP with respect to the Allied Paper, Inc./Portage Creek/Kalamazoo River Superfund Site in Michigan. The EPA asserts that the site is contaminated by polychlorinated biphenyls primarily as a result of discharges from various paper mills located along the Kalamazoo River, including a paper mill formerly owned by St. Regis Paper Company ("St. Regis"). The Company is a successor in interest to St. Regis.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Operable Unit 5, Area 1: In March 2016, the Company received a special notice letter from the EPA (i) inviting participation in implementing a remedy for a portion of the site known as Operable Unit 5 ("OU5"), Area 1, and (ii) demanding reimbursement of EPA past costs totaling $37 million. In December 2016, the EPA issued a unilateral administrative order ("UAO") to the Company and other PRPs to perform the remedy. The Company responded to the UAO, agreeing to comply with the order subject to its sufficient cause defenses. The Company continues to comply with the UAO in performing remediation activities at OU5, Area 1.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Operable Unit 1 ("OU1"): In October 2016, the Company and another PRP received a special notice letter from the EPA inviting participation in the remedial design ("RD") component of the landfill remedy for the Allied Paper Mill, which is also known as Operable Unit 1. A Record of Decision ("ROD") establishing the final landfill remedy for the Allied Paper Mill was issued by the EPA in September 2016. The Company responded to the Allied Paper Mill special notice letter in December 2016 denying liability for OU1. In 2021, the EPA initiated RA activities. In October 2022, the Company received a unilateral administrative order to perform the RA. The Company began performing the RA in 2023 and established a $27 million reserve to account for this liability in the fourth quarter of 2022. In the fourth quarter of 2024, the Company increased the reserve by $27 million to account for the reasonably estimable costs for the next phases of the RA, following an EPA approved design modification in October 2024 to the original remedial design. The Company continues to comply with the UAO in performing remediation activities at OU1.

The total reserve for the combined liabilities for OU5, Area 1 and OU1 at the Kalamazoo River superfund site was $25 million and $29 million as of June 30, 2025 and December 31, 2024, respectively.

The Company was named as a defendant by Georgia-Pacific Consumer Products LP, Fort James Corporation and Georgia Pacific LLC (collectively, "GP") in a contribution and cost recovery action for alleged pollution at the site related to the Company's potential CERCLA liability. NCR Corporation and Weyerhaeuser Company were also named as defendants. The lawsuit seeks contribution under CERCLA for costs purportedly expended by plaintiffs ($79 million as of the filing of the complaint) and for future remediation costs. In June 2018, the District Court issued its Final Judgment and Order, which fixed the past cost amount at approximately $50 million (plus interest to be determined) and allocated to the Company a 15% share of responsibility for those past costs. The District Court did not address responsibility for future costs in its decision. In July 2018, the Company and each of the other parties filed notices appealing the Final Judgment and prior orders incorporated into the Final Judgment. In April 2022, the Sixth Circuit Court of Appeals (the "Sixth Circuit") reversed the Final Judgment of the Court, finding that the lawsuit against the Company was time-barred by the applicable statute of limitations. In May 2022, GP filed a petition for rehearing with the Sixth Circuit, which was denied in July 2022. In November 2022, GP filed a petition for writ of certiorari with the U.S. Supreme Court. In October 2023, the U.S. Supreme Court denied GP's writ petition, thus rendering final the Sixth Circuit's decision that GP's lawsuit against the Company was time-barred. In January 2024 GP requested that the District Court's final order declare that each party is jointly and severally liable for future costs, arguing that the Sixth Circuit decision only applies to past costs. On April 9, 2024, the District Court entered Final Judgment After Remand, declaring, consistent with the Sixth Circuit's decision, that GP's past costs are time-barred by the applicable statute of limitations. The District Court also entered Final Judgment on Remand that all three parties, including the Company, are jointly

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and severally liable for future response costs at the site. The Company believes that the District Court's Final Judgment on Remand regarding liability for future costs was in error and subsequently appealed the Final Judgment on Remand on future costs liability to the Sixth Circuit. On May 12, 2025, the Sixth Circuit issued its ruling, granting the Company's appeal and vacating the District Court's Final Judgment on Remand. GP's deadline to file a petition for writ of certiorari with the U.S. Supreme Court is August 10, 2025.

**Harris County:** International Paper and McGinnis Industrial Maintenance Corporation ("MIMC"), a subsidiary of Waste Management, Inc. ("WMI"), are PRPs at the San Jacinto River Waste Pits Superfund Site in Harris County, Texas. The PRPs have been actively participating in the activities at the site and share the costs of these activities.

In October 2017, the EPA issued a ROD selecting the final remedy for the site: removal and relocation of the waste material from both the northern and southern impoundments.

In April 2018, the PRPs entered into an Administrative Order on Consent ("AOC") with the EPA, agreeing to work together to develop the RD for the northern impoundment. The AOC does not include any agreement to perform waste removal or other construction activity at the site.

In 2020, the Company reserved the following estimated liability amounts in relation to remediation at this site: (a) $10 million for the southern impoundment; and (b) $55 million for the northern impoundment, which represented the Company's 50% share of our estimate of the low end of the range of probable remediation costs.

The Company submitted the Final Design Package for the southern impoundment to the EPA, and the EPA approved the plan in May 2021. The EPA issued a Unilateral Administrative Order for RA of the southern impoundment in August 2021. An addendum to the Final 100% RD (amended April 2021) was submitted to the EPA for the southern impoundment in June 2022. The Company substantially completed the RA for the southern impoundment in 2024.

With respect to the northern impoundment, the PRPs submitted a Final 100% RD to EPA in July 2024. The EPA provided comments at the end of October 2024, and a Revised Final 100% RD was submitted by the PRPs at the end of November 2024. In April 2025, the EPA provided comments on the Revised Final 100% RD and the PRPs submitted their responses to the EPA's comments in May 2025. The total estimated liability for the southern and northern impoundment was $98 million as of both June 30, 2025 and December 31, 2024. The current reserve is primarily for the Company's 50% share of our estimate of the low end of the range of probable costs to implement the RD. Because of ongoing questions regarding cost effectiveness, timing and gathering other technical data, additional losses in excess of our recorded liability are possible.

**Versailles Pond:** The Company is a responsible party for the investigation and remediation of Versailles Pond, a 57-acre dammed river impoundment that historically received paperboard mill wastewater in Sprague, Connecticut. A comprehensive investigation has determined that Versailles Pond is contaminated with polychlorinated biphenyls, mercury, and metals. A preliminary remediation plan was prepared in the third quarter of 2023. Negotiations with state and federal governmental officials are ongoing regarding the scope and timing of the remediation. The total estimated liability for Versailles Pond was $30 million as of both June 30, 2025 and December 31, 2024.

***Asbestos-Related Matters***

We have been named as a defendant in various asbestos-related personal injury litigation, in both U.S. state and federal court, primarily in relation to the prior operations of certain companies previously acquired by the Company. The Company's total recorded liability with respect to pending and future asbestos-related claims was $99 million and $100 million net of insurance recoveries as of June 30, 2025 and December 31, 2024, respectively. While it is reasonably possible that the Company may incur losses in excess of its recorded liability with respect to asbestos-related matters, we are unable to estimate any loss or range of loss in excess of such liability, and do not believe additional material losses are probable.

***Antitrust***

In March 2017, the Italian Competition Authority ("ICA") commenced an investigation into the Italian packaging industry to determine whether producers of corrugated sheets and boxes violated the applicable European competition law. In April 2019, the ICA concluded its investigation and issued initial findings alleging that over 30 producers, including our Italian packaging subsidiary ("IP Italy") and, prior to completion of the business combination certain subsidiaries of DS Smith operating in Italy ("DS Smith Italy"), improperly coordinated the production and sale of corrugated sheets and boxes. In August 2019, the ICA issued its decision and assessed IP Italy a fine of €29 million (approximately $31 million at the then-current exchange rates) for participation in the boxes coordination, which was recorded in the third quarter of 2019. We appealed the ICA decision, and our

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appeal was denied in May 2021. We further appealed the decision to the Italian Council of State ("Council of State"), and in March 2023 the Council of State largely upheld the ICA's findings, but referred the calculation of IP Italy's fine back to the ICA, finding that it was disproportionately high based on the conduct found. Given the failure of the Council of State to address certain arguments brought by IP, we further appealed the Council of State decision to uphold the ICA's findings. In March 2024, the Council of State published its decision holding that its earlier decision should be interpreted as accepting many of IP Italy's earlier arguments and that the ICA should reduce IP Italy's fine accordingly. Notwithstanding these decisions by the Council of State, in March 2024 the ICA served IP Italy with its redetermination decision leaving IP Italy's fine unchanged. IP appealed the ICA's redetermination decision as inconsistent with the Council of State's 2024 and 2023 decision. In July 2024, the Council of State partially annulled the ICA redetermination decision, reducing IP Italy's fine by $6 million (€6 million). As of June 30, 2025, after giving effect to this development, the Company did not have any remaining liability related to IP Italy's fine. IP Italy has further appealed the Council of State's July 2024 decision seeking further reduction. DS Smith Italy was also subject to the ICA decision but not fined, given its position as leniency applicant. IP Italy, DS Smith Italy, and other producers also have been named in lawsuits, and we have received other claims, by a number of customers for damages associated with the alleged anticompetitive conduct. Given the early stages of these claims and the intention of the Company to defend robustly against such claims, it is too early to predict with any real degree of certainty, the overall outcome and ultimate potential liability (if any) that might be incurred in connection therewith, and there can be no guarantee that the aggregate of possible damages against IP Italy and DS Smith Italy could not, together, have a material impact on the Company's financial condition.

***Guarantees***

In connection with sales of businesses, property, equipment, forestlands and other assets, International Paper commonly makes representations and warranties relating to such businesses or assets, and may agree to indemnify buyers with respect to tax and environmental liabilities, breaches of representations and warranties, and other matters. Where liabilities for such matters are determined to be probable and reasonably estimable, accrued liabilities are recorded at the time of sale as a cost of the transaction.

***Brazil Goodwill Tax Matter:*** The Brazilian Federal Revenue Service has challenged the deductibility of goodwill amortization generated in a 2007 acquisition by Sylvamo do Brasil Ltda. ("Sylvamo Brazil"), which was a wholly owned subsidiary of the Company until the October 1, 2021 spin-off of the Printing Papers business, after which it became a subsidiary of Sylvamo Corporation ("Sylvamo"). Sylvamo Brazil received assessments for the tax years 2007-2015 totaling approximately $108 million (adjusted for variation in currency exchange rates) in tax, plus interest, penalties and fees. The interest, penalties and fees currently total approximately $278 million (adjusted for variation in currency exchange rates). Accordingly, the assessments currently total approximately $386 million (adjusted for variation in currency exchange rates). After an initial favorable ruling challenging the basis for these assessments, Sylvamo Brazil received subsequent unfavorable decisions from the Brazilian Administrative Council of Tax Appeals. Sylvamo Brazil appealed these decisions. On October 11, 2024, the federal regional court issued a ruling favorable to Sylvamo Brazil in the first stage of judicial review on the assessments for tax years 2007 and 2008-2012, comprising approximately $245 million of the total $386 million as of June 30, 2025. On December 18, 2024, the Brazilian Federal Revenue Service appealed this ruling. This tax litigation matter may take many years to resolve. Sylvamo Brazil and International Paper believe the transaction underlying these assessments was appropriately evaluated, and that Sylvamo Brazil's tax position should be sustained, based on Brazilian tax law.

This matter pertains to a business that was conveyed to Sylvamo on October 1, 2021, as part of our spin-off transaction. Pursuant to the terms of the tax matters agreement entered into between the Company and Sylvamo, the Company will pay 60% and Sylvamo will pay 40%, on up to $300 million of any assessment related to this matter, and the Company will pay all amounts of the assessment over $300 million. Under the terms of the tax matters agreement, decisions concerning the conduct of the litigation related to this matter, including strategy, settlement, pursuit and abandonment, will be made by the Company. Sylvamo thus has no control over any decision related to this ongoing litigation. The Company intends to vigorously defend this historical tax position against the current assessments and any similar assessments that may be issued for tax years subsequent to 2015. The Brazilian government may enact a tax amnesty program that would allow Sylvamo Brazil to resolve this dispute for less than the assessed amount. As of October 1, 2021, in connection with the recording of the distribution of assets and liabilities resulting from the spin-off transaction, the Company established a liability representing the initial fair value of the contingent liability under the tax matters agreement. The contingent liability was determined in accordance with ASC 460 "Guarantees" based on the probability weighting of various possible outcomes. The initial fair value estimate and recorded liability as of December 31, 2021 was $48 million and remains this amount at June 30, 2025. This liability will not be increased in subsequent periods unless facts and circumstances change such that an amount greater than the initial recognized liability becomes probable and estimable.

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**<u>[**Table of Contents**](#i23e23e74ffae4467b99480730e23722f_10)</u>**

**<u>[NOTE 14 -](#i23e23e74ffae4467b99480730e23722f_73)[VARIABLE INTEREST ENTITIES](#i23e23e74ffae4467b99480730e23722f_73)</u>**

***Variable Interest Entities***

As of June 30, 2025, the fair value of the Timber Notes and Extension Loans for the 2007 Financing Entities was $2.4 billion and $2.1 billion, respectively. The Timber Notes and Extension Loans are classified as Level 2 within the fair value hierarchy, which is further defined in Note 1 in the Company's Annual Report.

The Timber Notes of $2.3 billion and the Extension Loans of $2.1 billion both mature in 2027 and are shown in Long-term nonrecourse financial assets of variable interest entities and Long-term nonrecourse financial liabilities of variable interest entities, respectively, on the accompanying condensed consolidated balance sheet.

Activity between the Company and the 2007 Financing Entities was as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended<br>June 30,** | **Three Months Ended<br>June 30,** | **Six Months Ended<br>June 30,** | **Six Months Ended<br>June 30,** |
| ***In millions*** | **2025** | **2024** | **2025** | **2024** |
| Revenue (a) | $**32** | $38 | $**65** | $77 |
| Expense (b) | **30** | 35 | **59** | 70 |
| Cash receipts (c) | **27** | 34 | **57** | 68 |
| Cash payments (d) | **26** | 32 | **56** | 66 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(a)The revenue is included in interest expense, net in the accompanying statement of operations and includes approximately $4 million and $9 million for both the three months and six months ended June 30, 2025 and 2024 of accretion income for the amortization of the basis difference adjustment on the Long-term financial assets of variable interest entities.

&nbsp;&nbsp;&nbsp;&nbsp;(b)The expense is included in interest expense, net in the accompanying statement of operations and includes approximately $1 million and $3 million for both the three months and six months ended June 30, 2025 and 2024 of accretion expense for the amortization of the basis difference adjustment on the Long-term nonrecourse financial liabilities of variable interest entities.

&nbsp;&nbsp;&nbsp;&nbsp;(c)The cash receipts are interest received on the Long-term financial assets of variable interest entities.

&nbsp;&nbsp;&nbsp;&nbsp;(d)The cash payments are interest paid on Long-term nonrecourse financial liabilities of variable interest entities.

**<u>[NOTE 15 -](#i23e23e74ffae4467b99480730e23722f_76)[DEBT](#i23e23e74ffae4467b99480730e23722f_76)</u>**

The borrowing capacity of the Company's commercial paper program is $1.0 billion supported by its $1.4 billion credit agreement. Under the terms of the program, individual maturities on borrowings may vary, but not exceed one year from the date of issue. Interest bearing notes may be issued either as fixed or floating rate notes. During the second quarter of 2025, the Company repaid the $175 million of commercial paper borrowed during the first quarter. There were no borrowings outstanding as of June 30, 2025 under the program.

At June 30, 2025, International Paper's USD denominated credit facilities totaled $1.9 billion, excluding the DS Smith credit facilities discussed below. The credit facilities generally provide for interest rates at a floating rate index plus a pre-determined margin dependent upon International Paper's credit rating. The credit facilities included a $1.4 billion contractually committed bank facility with a maturity date of June 2028. The liquidity facilities also include up to $500 million of uncommitted financings based on eligible receivables balances under a receivables securitization program that expires in June 2026. At June 30, 2025, the Company had no borrowings outstanding under the receivables securitization program.

Following the DS Smith acquisition, International Paper assumed foreign denominated debt of DS Smith in various currencies with an approximated value of $3.6 billion. In March 2025, the Company amended and restated DS Smith's credit facility agreements and entered into agreements to guarantee the outstanding notes of DS Smith.

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**<u>[**Table of Contents**](#i23e23e74ffae4467b99480730e23722f_10)</u>**

Below is a table of the Company's foreign denominated debt:

---

| | | |
|:---|:---|:---|
| *In millions* | **June 30, 2025** | **June 30, 2025** |
|  | **Borrowings Outstanding** | **USD Equivalent Outstanding** |
| Euro fixed rate instruments: |  |  |
| &nbsp;&nbsp;0.875% Notes - due 2026 | 600 | $707 |
| &nbsp;&nbsp;4.375% Notes - due 2027 | 850 | $1002 |
| &nbsp;&nbsp;4.500% Notes - due 2030 | 650 | 766 |
| GBP fixed rate instruments: |  |  |
| &nbsp;&nbsp;2.875% Notes - due 2029 | £250 | $343 |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| *In millions* |  |  | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** |
| **Credit Facilities** | **Borrowing Currency** | **Capacity** | **Borrowings Outstanding** | **Borrowings Outstanding** | **USD Equivalent Outstanding** |
| 2.834% Amortizing credit facility - due 2025-2029 | EUR | 200 | € | 188 | $221 |
| Floating rate instruments: |  |  |  |  |  |
| &nbsp;&nbsp;Committed bank facility maturing May 2027 | GBP, EUR, USD | £1250 | € | 970 | $1143 |
| &nbsp;&nbsp;Uncommitted facility | GBP, EUR, USD | £50 | € | 55 | $65 |
| &nbsp;&nbsp;Committed bank facility maturing December 2026  | GBP, EUR, USD | 60 | € |  | $— |

---

During the first quarter of 2025, the Company borrowed $64 million under these foreign denominated credit facilities.

During the second quarter of 2025, the Company borrowed $120 million under these foreign denominated credit facilities. The Company also reduced the outstanding balance of the amortizing credit facility by $15 million.

During the second quarter of 2025, the Company issued approximately $95 million of industrial development bonds (IDBs) with an interest rate of 4.2% and maturity date of May 1, 2034. The proceeds were used to repay approximately $95 million of IDBs with interest rates of 1.38% that matured on June 16, 2025. The Company had an additional issuance of an approximately $70 million IDB with an interest rate of 4.0% and a maturity date of September 1, 2032. The Company had debt reductions related to environmental development bonds (EDBs) that matured on June 16, 2025, of $7 million with an interest rate of 1.6% and $20 million with an interest rate of 1.38%.

At June 30, 2025, contractual obligations for future payments of debt maturities (including finance lease liabilities disclosed in <u>[Note 10 - Leases](#i23e23e74ffae4467b99480730e23722f_61)</u> and excluding the timber monetization structure disclosed in <u>[Note 14 - Variable Interest Entities](#i23e23e74ffae4467b99480730e23722f_73)</u>) by calendar year were as follows: $112 million in 2025; $1.0 billion in 2026; $2.6 billion in 2027; $737 million in 2028; $381 million in 2029 and $5.1 billion thereafter.

The Company's financial covenants require the maintenance of a minimum net worth, as defined in our debt agreements, of $9 billion and a total debt-to-capital ratio of less than 60%. Net worth is defined as the sum of common stock, paid-in capital and retained earnings, less treasury stock plus any cumulative goodwill impairment charges. The calculation also excludes accumulated other comprehensive income/loss and both the current and long-term Nonrecourse Financial Liabilities of Variable Interest Entities. The total debt-to-capital ratio is defined as total debt divided by the sum of total debt plus net worth. As of June 30, 2025, we were in compliance with our debt covenants.

At June 30, 2025, the fair value of International Paper's $9.9 billion of debt was approximately $9.6 billion. The fair value of the Company's long-term debt is estimated based on the quoted market prices for the same or similar issues. International Paper's long-term debt is classified as Level 2 within the fair value hierarchy, which is further defined in Note 1 in the Company's Annual Report.

**<u>[NOTE 16 -](#i23e23e74ffae4467b99480730e23722f_82)[DERIVATIVES AND HEDGING ACTIVITIES](#i23e23e74ffae4467b99480730e23722f_82)</u>**

As a multinational company, International Paper is exposed to market risks, such as changes in interest rates, currency exchange rates and commodity prices.

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**<u>[**Table of Contents**](#i23e23e74ffae4467b99480730e23722f_10)</u>**

International Paper periodically uses derivatives and other financial instruments to hedge exposures to interest rate, commodity and currency risks. International Paper does not hold or issue financial instruments for trading purposes. For hedges that meet the hedge accounting criteria at inception, International Paper formally designates and documents the instrument as a fair value hedge, a cash flow hedge or a net investment hedge of a specific underlying exposure.

 ***Derivative and Hedging Accounting Policy***

The Company and its subsidiaries are exposed to certain risks relating to its ongoing financial arrangements. The Company uses derivative financial instruments, primarily commodity swaps and forward contracts, to manage currency and commodity risks associated with the Company's underlying business activities and the financing of these activities. As a matter of policy, we do not use financial instruments for speculative purposes.

ASC 815 requires entities to recognize all derivative instruments as either assets or liabilities in the statement of financial position at fair value. The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedge accounting relationship and, further, on the type of hedge accounting relationship.

For those derivative or nonderivative instruments that are designated and qualify as hedging instruments under ASC 815, a company must designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge, cash flow hedge, or a net investment hedge.

Gains or losses on cash flow hedges are deferred as a component of AOCI or losses and are reclassified into earnings at the time the hedged item affects earnings, presented in the same income statement line item as the underlying hedged item (i.e., in "cost of products sold" when the hedged transactions are commodity cash flows associated with energy purchases to facilitate operations). If it becomes probable that a forecasted transaction will not occur, previously deferred gains and losses related to those forecasted transactions would be recognized in earnings in the current period.

Gains and losses on net investment hedges are recorded in the cumulative translation adjustment component of AOCI, offsetting the translation adjustment of the net investment being hedged. Any deferred gains or losses previously recorded in the cumulative translation adjustment component of AOCI will remain in AOCI until the hedged net investment is sold or substantially liquidated, at which time the cumulative deferred gains or losses are reclassified into earnings as a component of gain or loss on the sale of the hedged net investment.

To qualify for hedge accounting, a specified level of hedge effectiveness between the hedging instrument and the item being hedged must be achieved at inception and maintained throughout the hedged period. We formally document our risk management objectives, our strategies for undertaking the hedge transactions, the nature of and relationships between the hedging instruments and hedged items, and the method for assessing hedge effectiveness. Additionally, for qualified hedges of forecasted transactions, we specifically identify the significant characteristics and expected terms of the forecasted transactions. Our designated derivative contracts include commodity swap contracts and forward contracts. Commodity swap contracts effectively modify the Company's exposure to changes in natural gas and electricity prices by allowing the Company to purchase energy on a fixed-rate basis. Forward contracts effectively modify the Company's exposure to fluctuations in the cost of carbon credits by allowing the Company to purchase carbon credits on a fixed-rate basis. These agreements involve the receipt of floating-rate amounts in exchange for fixed-rate amounts over the life of the agreements.

***Commodity Risk Management***

The Company has entered into commodity swap and commodity forward contracts which have been designated as cash flow hedges of commodity price risk associated with forecasted purchases and sales of various commodities used in the Company's operations. These commodity contracts are used to manage exposure to changes in natural gas, electricity, and carbon credit prices. Individual commodity contracts are entered into up to three years prior to the occurrence of the hedged transactions.

***Foreign Currency Risk Management***

The Company and its subsidiaries periodically use non-derivative, foreign currency denominated loans to hedge the Company's foreign currency exposure related to the translation of its net investment in foreign subsidiaries. Certain of these loans are designated as net investment hedges.

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**<u>[**Table of Contents**](#i23e23e74ffae4467b99480730e23722f_10)</u>**

The component of the gains and losses on our net investment in these designated foreign operations, driven by changes in foreign exchange rates, are economically offset by remeasurements of our foreign-currency denominated debt.

The notional amounts of financial instruments used in hedging transactions were as follows:

---

| | | | |
|:---|:---|:---|:---|
| ***In millions*** | **June 30, 2025** | **June 30, 2025** | **December 31, 2024** |
| &nbsp;&nbsp;&nbsp;Electricity contracts (MWh) | **0.7** | **0.7** | 0.3 |
| &nbsp;&nbsp;Natural gas contracts (MWh) | **6.9** | **6.9** |  |
| &nbsp;&nbsp;Carbon credit contracts (tons) | **0.8** | **0.8** |  |
| &nbsp;&nbsp;&nbsp;External debt (EUR) | **€** | **3313** | € |

---

The following table shows gains or losses recognized in AOCI, net of tax, related to derivative instruments:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Gain (Loss) Recognized in AOCI on Derivatives** | **Gain (Loss) Recognized in AOCI on Derivatives** | **Gain (Loss) Recognized in AOCI on Derivatives** | **Gain (Loss) Recognized in AOCI on Derivatives** |
| | **Three Months Ended<br>June 30,** | **Three Months Ended<br>June 30,** | **Six Months Ended<br>June 30,** | **Six Months Ended<br>June 30,** |
| ***In millions*** | **2025** | **2024** | **2025** | **2024** |
| Derivatives in Cash Flow Hedging Relationships: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Commodity contracts | $**—** | $— | $**(52)** | $— |
| Derivatives in Net Investment Hedging Relationships: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;External debt | $**(85)** | $— | $**(77)** | $— |

---

Based on our valuation at June 30, 2025, and assuming market rates remain constant through contract maturities, we expect transfers to earnings of the existing gain or losses reported in AOCI on cash flow hedges during the next 12 months to correspond with the current assets and liabilities portion of the derivative as disclosed below.

The amounts of gains and losses recognized in the statement of operations on financial instruments used in hedging transactions were as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Gain (Loss) Reclassified from AOCI Into Income** | **Gain (Loss) Reclassified from AOCI Into Income** | **Gain (Loss) Reclassified from AOCI Into Income** | **Gain (Loss) Reclassified from AOCI Into Income** | **Location of Gain (Loss)<br>Reclassified from AOCI** |
|  | **Three Months Ended<br>June 30,** | **Three Months Ended<br>June 30,** | **Six Months Ended<br>June 30,** | **Six Months Ended<br>June 30,** |  |
| ***In millions*** | **2025** | **2024** | **2025** | **2024** |  |
| Derivatives in Cash Flow Hedging Relationships: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commodity contracts | $**(7)** | $— | $**(6)** | $— | Cost of products sold |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest rate contract | **(1)** |  | **(1)** |  | Interest expense, net |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $**(8)** | $— | $**(7)** | $— |  |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Gain (Loss) Recognized in Income** | **Gain (Loss) Recognized in Income** | **Gain (Loss) Recognized in Income** | **Gain (Loss) Recognized in Income** | **Location of Gain (Loss)<br>In Statement<br>of Operations** |
| | **Three Months Ended<br>June 30,** | **Three Months Ended<br>June 30,** | **Six Months Ended<br>June 30,** | **Six Months Ended<br>June 30,** | |
| ***In millions*** | **2025** | **2024** | **2025** | **2024** |  |
| Derivatives in Cash Flow Hedging Relationships: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commodity contracts | $**(28)** | $— | $**(23)** | $— | Cost of products sold |
| Derivatives Not Designated as Hedging Instruments: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commodity contracts | **20** | (2) | **14** | (11) | Cost of products sold |

---

***Fair Value Measurements***

The Company has not changed its valuation techniques for measuring the fair value of any financial assets or liabilities during the year. Transfers between levels, if any, are recognized at the end of the reporting period. International Paper's derivatives are classified as Level 2 within the fair value hierarchy. Fair value hierarchies are further defined in Note 1 in the Company's Annual Report.

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**<u>[**Table of Contents**](#i23e23e74ffae4467b99480730e23722f_10)</u>**

The following table provides a summary of the impact of our derivative instruments in the balance sheet:

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Assets** | **Assets** | **Assets** | | **Liabilities** | **Liabilities** | **Liabilities** |
| ***In millions*** | **June 30, 2025** | | **December 31, 2024** | | **June 30, 2025** | | **December 31, 2024** |
| Derivatives designated as hedging instruments |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commodity contracts – cash flow | $**8** |  | $— |  | $**49** |  | $— |
| Derivatives not designated as hedging instruments |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commodity contracts | **50** |  | 3 |  | **42** |  |  |
| Total derivatives | $**58** | **(a)** | $3 | (b) | $**91** | **(c)** | $— |

---

&nbsp;&nbsp;&nbsp;&nbsp;(a)Includes $33 million recorded in Other current assets and $25 million recorded in Deferred charges and other assets in the accompanying condensed consolidated balance sheet.

&nbsp;&nbsp;&nbsp;&nbsp;(b)Includes $3 million recorded in Other current assets in the accompanying condensed consolidated balance sheet.

&nbsp;&nbsp;&nbsp;&nbsp;(c)Includes $75 million recorded in Other current liabilities and $16 million recorded in Other liabilities in the accompanying condensed consolidated balance sheet.

The above contracts are subject to enforceable master netting arrangements that provide rights of offset with each counterparty when amounts are payable on the same date in the same currency or in the case of certain specified defaults. Management has made an accounting policy election to not offset the fair value of recognized derivative assets and derivative liabilities in the balance sheet. The amounts owed to the counterparties and owed to the Company are considered immaterial with respect to each counterparty and in the aggregate with all counterparties.

**<u>[NOTE 17 -](#i23e23e74ffae4467b99480730e23722f_82)[RETIREMENT PLANS](#i23e23e74ffae4467b99480730e23722f_82)</u>**

International Paper operates both defined benefit and defined contribution pension plans as well as other post retirement benefit plans throughout our operations in accordance with local conditions and practice.

We sponsor and maintain the Retirement Plan of International Paper Company (the "Pension Plan"), a tax-qualified defined benefit pension plan that provides retirement benefits to substantially all hourly and union employees who work at a participating business unit. The Pension Plan was frozen as of January 1, 2019 for salaried participants.

The Pension Plan provides defined pension benefits based on years of credited service and either final average earnings (salaried employees and hourly employees receiving salaried benefits), hourly job rates or specified benefit rates (hourly and union employees).

In connection with our acquisition, International Paper acquired the existing DS Smith Group Pension plan (the "Group Plan"), a UK funded defined benefit plan providing pension benefits and lump sum benefits to members and dependents. The Group Plan closed to new entrants and future accruals as of April 30, 2011.

Net periodic pension expense (income) for our qualified and nonqualified defined benefit plans and the Group Plan, is comprised of the following:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended<br>June 30,** | **Three Months Ended<br>June 30,** | **Six Months Ended<br>June 30,** | **Six Months Ended<br>June 30,** |
| ***In millions*** | **2025** | **2024** | **2025** | **2024** |
| Service cost | $**11** | $14 | $**21** | $27 |
| Interest cost | **126** | 112 | **250** | 223 |
| Expected return on plan assets | **(157)** | (148) | **(308)** | (296) |
| Actuarial loss | **17** | 20 | **35** | 39 |
| Amortization of prior service cost | **4** | 3 | **8** | 6 |
| Settlement | **—** |  | **8** |  |
| Termination benefits | **2** |  | **2** |  |
| Net periodic pension expense (income) | $**3** | $1 | $**16** | $(1) |

---

The components of net periodic pension expense (income) other than the Service cost component are included in Non-operating pension expense (income) in the condensed consolidated statement of operations.

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**<u>[**Table of Contents**](#i23e23e74ffae4467b99480730e23722f_10)</u>**

The Company's funding policy for our pension plans is to contribute amounts sufficient to meet legal funding requirements, plus any additional amounts that the Company may determine to be appropriate considering the funded status of the plan, tax deductibility, the cash flows generated by the Company, and other factors. The Company made no voluntary cash contributions to the qualified pension plan in the first six months of 2025 or 2024. The nonqualified defined benefit plans are funded to the extent of benefit payments, which totaled $38 million and $11 million for the six months ended June 30, 2025 and 2024, respectively.

**<u>[NOTE 18 -](#i23e23e74ffae4467b99480730e23722f_85)[STOCK-BASED COMPENSATION](#i23e23e74ffae4467b99480730e23722f_85)</u>**

International Paper's 2024 Long-Term Incentive Compensation Plan (the "2024 LTICP') authorizes grants of restricted stock, restricted or deferred stock units, performance awards payable in cash or stock upon the attainment of specified performance goals, dividend equivalents, options, stock appreciation rights, other stock-based awards and cash-based awards at the discretion of the Management Development and Compensation Committee of the Board of Directors (the "MDCC"). On December 9, 2024, the MDCC approved the 2025 Long-Term Incentive Plan (the "2025 LTIP"), pursuant to the 2024 LTICP, approving a sole performance metric of 100% relative total shareholder return ("TSR") for performance stock unit awards, effective January 1, 2025. As of June 30, 2025, 7.0 million shares were available for grant under the LTICP.

Subsequent to the acquisition of DS Smith, the Company agreed to provide equity transition awards to DS Smith employees who became employees of the Company after closing of the transaction. The transition awards, which were granted in March 2025, consisted of time-based restricted stock units. The transition awards replaced the unvested portion of the 2024 DS Smith Performance Share Plan award granted to DS Smith employees in July 2024.

Stock-based compensation expense and related income tax benefits were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended<br>June 30,** | **Three Months Ended<br>June 30,** | **Six Months Ended<br>June 30,** | **Six Months Ended<br>June 30,** |
| ***In millions*** | **2025** | **2024** | **2025** | **2024** |
| Total stock-based compensation expense (selling and administrative) | $**27** | $26 | $**59** | $35 |
| Income tax benefits related to stock-based compensation | **—** |  | **38** | 13 |

---

At June 30, 2025, $123 million, net of estimated forfeitures, of compensation cost related to time-based and performance-based shares and restricted stock attributable to future service had not yet been recognized. This amount will be recognized in expense over a weighted-average period of 1.7 years.

During the first six months of 2025, the Company granted 1.0 million performance units at an average grant date fair value of $66.59 and 0.9 million time-based units at an average grant date fair value of $54.17.

**<u>[NOTE 19 -](#i23e23e74ffae4467b99480730e23722f_88)[BUSINESS SEGMENT INFORMATION](#i23e23e74ffae4467b99480730e23722f_88)</u>**

As a result of the completed acquisition of DS Smith on January 31, 2025, the CODM reviews and manages the financial results and operations of the following segments on the basis of the new organizational structure: Packaging Solutions North America, Packaging Solutions EMEA and Global Cellulose Fibers. The Packaging Solutions EMEA segment includes the Company's legacy EMEA Industrial Packaging business and the EMEA DS Smith business. As such, amounts related to the Company's legacy EMEA Industrial Packaging business have been recast out of the Industrial Packaging segment into the new Packaging Solutions EMEA segment for all prior periods. The North America DS Smith business has been included in the Packaging Solutions North America segment. Amounts related to the Company's legacy North America Industrial Packaging business have been reported in the Packaging Solutions North America segment for all prior periods.

Packaging Solutions North America and Packaging Solutions EMEA are primarily focused on producing fiber-based packaging. We produce linerboard, medium, whitetop, recycled linerboard, recycled medium and saturating kraft of which a majority of our production is converted into corrugated packaging and other packaging. The revenue for our Packaging Solutions North America and Packaging Solutions EMEA segments are derived from selling these products to our customers.

Global Cellulose Fibers primarily focuses on producing cellulose fibers which is a renewable raw material used in a variety of products people depend on every day such as diapers, towel and tissue products, feminine care, incontinence and other personal care products. In addition, our innovative specialty pulps serve as a sustainable raw material used in textiles, construction materials, paints, coatings and more. The revenue for our Global Cellulose Fibers segment is derived from selling these products to our customers.

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**<u>[**Table of Contents**](#i23e23e74ffae4467b99480730e23722f_10)</u>**

The CODM assesses performance for these segments and decides how to allocate resources based on business segment operating profit. Business segment operating profits (losses) are also used by International Paper's CODM to measure the earnings performance of its businesses and to focus on on-going operations.

**INFORMATION BY BUSINESS SEGMENT**

The following tables illustrate reportable segment revenue, significant segment expenses, and measures of a segment's profit or loss for the three months and six months ended June 30, 2025 and 2024. The table also reconciles these amounts to Earnings (loss) before income taxes and equity earnings (loss).

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended June 30, 2025** | **Three Months Ended June 30, 2025** | **Three Months Ended June 30, 2025** | **Three Months Ended June 30, 2025** |
| *In millions* | **Packaging Solutions North America** | **Packaging Solutions EMEA** | **Global Cellulose Fibers** | **Total** |
| Net Sales | $**3860** | $**2291** | $**628** | **6779** |
| Corporate and Intrasegment Sales |  |  |  | **(12)** |
| **Total Net Sales** |  |  |  | **6767** |
| Less: |  |  |  |  |
| Cost of products sold | **2695** | **1699** | **457** |  |
| Selling and administrative expenses | **340** | **154** | **56** |  |
| Depreciation and amortization | **236** | **195** | **49** |  |
| Distribution expenses | **281** | **235** | **63** |  |
| Other segment items (a) | **31** | **9** | **7** |  |
| **Business Segment Operating Profit (Loss)** | **277** | **(1)** | **(4)** | **272** |
| Interest Expense, net |  |  |  | **107** |
| Adjustment for less than wholly owned subsidiaries (b) |  |  |  | **—** |
| Corporate expenses, net |  |  |  | **19** |
| Net special items (i) |  |  |  | **35** |
| Non-operating pension (income) expense |  |  |  | **(5)** |
| **Earnings (loss) before income taxes and equity earnings (loss)** | **Earnings (loss) before income taxes and equity earnings (loss)** | **Earnings (loss) before income taxes and equity earnings (loss)** | **Earnings (loss) before income taxes and equity earnings (loss)** | $**116** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Includes a charge of $55 million for transaction and other costs related to the DS Smith acquisition, a charge of $7 million for costs related to the closure of our Red River containerboard mill in Campti, Louisiana, a net gain of $51 million related to the sale of EMEA plants and a net charge of $24 million for other items.

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**<u>[**Table of Contents**](#i23e23e74ffae4467b99480730e23722f_10)</u>**

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Six Months Ended June 30, 2025** | **Six Months Ended June 30, 2025** | **Six Months Ended June 30, 2025** | **Six Months Ended June 30, 2025** |
| *In millions* | **Packaging Solutions North America** | **Packaging Solutions EMEA** | **Global Cellulose Fibers** | **Total** |
| Net Sales | $**7562** | $**3841** | $**1271** | $**12674** |
| Corporate and Intrasegment Sales |  |  |  | **(6)** |
| **Total Net Sales** |  |  |  | **12668** |
| Less: |  |  |  |  |
| Cost of products sold | **5264** | **2846** | **917** |  |
| Selling and administrative expenses | **622** | **247** | **98** |  |
| Depreciation and amortization | **649** | **302** | **100** |  |
| Distribution expenses | **547** | **386** | **129** |  |
| Other segment items (a) | **61** | **15** | **14** |  |
| **Business Segment Operating Profit (Loss)** | **419** | **45** | **13** | **477** |
| Interest Expense, net |  |  |  | **188** |
| Adjustment for less than wholly owned subsidiaries (b) |  |  |  | **(1)** |
| Corporate expenses, net |  |  |  | **27** |
| Net special items (i) |  |  |  | **284** |
| Non-operating pension (income) expense |  |  |  | **(2)** |
| **Earnings (loss) before income taxes and equity earnings (loss)** | **Earnings (loss) before income taxes and equity earnings (loss)** | **Earnings (loss) before income taxes and equity earnings (loss)** | **Earnings (loss) before income taxes and equity earnings (loss)** | $**(19)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Includes a charge of $276 million for transaction and other costs related to the DS Smith acquisition, a charge of $85 million for severance and other costs related to the closure of our Red River containerboard mill in Campti, Louisiana, a net gain of $51 million related to the sale of EMEA plants, a net gain of $67 million related to the sale of fixed assets primarily associated with our permanently closed Orange, Texas containerboard mill and a net charge of $41 million for other items.

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended June 30, 2024** | **Three Months Ended June 30, 2024** | **Three Months Ended June 30, 2024** | **Three Months Ended June 30, 2024** |
| *In millions* | **Packaging Solutions North America** | **Packaging Solutions EMEA** | **Global Cellulose Fibers** | **Total** |
| Net Sales | $3628 | $328 | $717 | $4673 |
| Corporate and Intrasegment Sales |  |  |  | 61 |
| **Total Net Sales** |  |  |  | 4734 |
| Less: |  |  |  |  |
| Cost of products sold | 2538 | 252 | 483 |  |
| Selling and administrative expenses | 316 | 25 | 61 |  |
| Depreciation and amortization | 186 | 16 | 59 |  |
| Distribution expenses | 281 | 23 | 75 |  |
| Other segment items (a) | 26 | 2 | 8 |  |
| **Business Segment Operating Profit (Loss)** | 281 | 10 | 31 | 322 |
| Interest Expense, net |  |  |  | 55 |
| Adjustment for less than wholly owned subsidiaries (b) |  |  |  | (1) |
| Corporate expenses, net |  |  |  | 23 |
| Net special items |  |  |  | 49 |
| Non-operating pension (income) expense |  |  |  | (10) |
| **Earnings (loss) before income taxes and equity earnings (loss)** | **Earnings (loss) before income taxes and equity earnings (loss)** | **Earnings (loss) before income taxes and equity earnings (loss)** | **Earnings (loss) before income taxes and equity earnings (loss)** | $206 |

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**<u>[**Table of Contents**](#i23e23e74ffae4467b99480730e23722f_10)</u>**

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Six Months Ended June 30, 2024** | **Six Months Ended June 30, 2024** | **Six Months Ended June 30, 2024** | **Six Months Ended June 30, 2024** |
| *In millions* | **Packaging Solutions North America** | **Packaging Solutions EMEA** | **Global Cellulose Fibers** | **Total** |
| Net Sales | $7114 | $676 | $1421 | $9211 |
| Corporate and Intrasegment Sales |  |  |  | 142 |
| **Total Net Sales** |  |  |  | 9353 |
| Less: |  |  |  |  |
| Cost of products sold | 5026 | 512 | 1033 |  |
| Selling and administrative expenses | 600 | 50 | 119 |  |
| Depreciation and amortization | 389 | 32 | 113 |  |
| Distribution expenses | 569 | 45 | 157 |  |
| Other segment items (a) | 57 | 3 | 15 |  |
| **Business Segment Operating Profit (Loss)** | 473 | 34 | (16) | 491 |
| Interest Expense, net |  |  |  | 101 |
| Adjustment for less than wholly owned subsidiaries (b) |  |  |  | (3) |
| Corporate expenses, net |  |  |  | 47 |
| Net special items |  |  |  | 77 |
| Non-operating pension (income) expense |  |  |  | (22) |
| **Earnings (loss) before income taxes and equity earnings (loss)** | **Earnings (loss) before income taxes and equity earnings (loss)** | **Earnings (loss) before income taxes and equity earnings (loss)** | **Earnings (loss) before income taxes and equity earnings (loss)** | $291 |

---

***Assets***

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| | | |
|:---|:---|:---|
| *In millions* | **June 30, 2025** | **December 31, 2024** |
| Packaging Solutions North America | $**16688** | $14501 |
| Packaging Solutions EMEA | **18789** | 1276 |
| Global Cellulose Fibers | **2800** | 2857 |
| Corporate and other | **4099** | 4166 |
| **Assets** | $**42376** | $22800 |

---

***Capital Expenditures***

---

| | | |
|:---|:---|:---|
| *In millions* | **Six Months Ended<br> June 30, 2025** | **Six Months Ended<br> June 30, 2024** |
| Packaging Solutions North America | $**401** | $343 |
| Packaging Solutions EMEA | **265** | 25 |
| Global Cellulose Fibers | **70** | 68 |
| Subtotal | **736** | 436 |
| Corporate and other | **16** | 13 |
| **Capital Expenditures** | $**752** | $449 |

---

***External Sales By Segment (c)***

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended<br>June 30,** | **Three Months Ended<br>June 30,** | **Six Months Ended<br>June 30,** | **Six Months Ended<br>June 30,** |
| *In millions* | **2025** | **2024** | **2025** | **2024** |
| Packaging Solutions North America | $**3803** | $3603 | $**7471** | $7063 |
| Packaging Solutions EMEA | **2291** | 328 | **3841** | 676 |
| Global Cellulose Fibers | **624** | 715 | **1261** | 1419 |
| Other | **49** | 88 | **95** | 195 |
| **Net Sales** | $**6767** | $4734 | $**12668** | $9353 |

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**<u>[**Table of Contents**](#i23e23e74ffae4467b99480730e23722f_10)</u>**

*(a)Other segment items includes Taxes other than payroll.*

*(b)Operating profits for industry segments include each segment's percentage share of the profits of subsidiaries included in that segment that are less than wholly-owned. The pre-tax earnings for these subsidiaries is added here to present consolidated earnings from continuing operations before income taxes and equity earnings.*

*(c)External sales by segment are defined as those made to parties outside International Paper's consolidated group, whereas sales by segment in the Net Sales table are determined using a management approach and include intersegment sales.*

**<u>[NOTE 20 -](#i23e23e74ffae4467b99480730e23722f_1169)[SUBSEQUENT EVENTS](#i23e23e74ffae4467b99480730e23722f_1169)</u>**

On July 29, 2025, 12 containerboard producers, including International Paper, were named as defendants in a purported class action complaint that alleges a civil violation of Sections 1 and 3 of the Sherman Act. The suit is captioned *Artuso Pastry Foods Corp v. Packaging Corp. of America (N.D. Ill.).* The complaint alleges that the defendants, beginning in November 1, 2020 through the time of filing, conspired to fix, raise, maintain, and/or stabilize prices of containerboard products and finished packaging products made from containerboard. The alleged class is formed from persons who purchased containerboard products directly from one or more defendants for use or delivery in the United States during the period November 1, 2020 to the present. The complaint seeks to recover an unspecified amount of treble damages, injunctive relief, attorneys' fees and actual damages on behalf of the purported class.

Given the early stage of the claim and our intention to defend robustly against such claim, it is too early to predict or reasonably estimate the overall outcome or ultimate potential liability (if any) that might be incurred. There can be no guarantee that the aggregate of possible damages could not have a material impact on our financial condition.

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**<u>[**Table of Contents**](#i23e23e74ffae4467b99480730e23722f_10)</u>**

**ITEM 2.<u>[MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](#i23e23e74ffae4467b99480730e23722f_91)</u>**

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included in "Financial Statements and Supplementary Data" of this Quarterly Report on Form 10-Q (this "Form 10-Q") and the Company's Annual Report on Form 10-K for the year ended December 31, 2024 (our "Annual Report"). In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs that involve significant risks and uncertainties. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to those differences include those discussed below and in our Annual Report, particularly under "Risk Factors" and "Forward-Looking Statements" of this Form 10-Q and our Annual Report. Please see our "Cautionary Statement Regarding Forward-Looking Statements" below.

**EXECUTIVE SUMMARY**

Net earnings (loss) were $75 million ($0.14 per diluted share) in the second quarter of 2025, compared with $(105) million ($(0.24) per diluted share) in the first quarter of 2025 and $498 million ($1.41 per diluted share) in the second quarter of 2024. The Company generated Adjusted operating earnings (a non-GAAP measure defined below) of $105 million ($0.20 per diluted share) in the second quarter of 2025, compared with $101 million ($0.23 per diluted share) in the first quarter of 2025 and $193 million ($0.55 per diluted share) in the second quarter of 2024.

International Papers' second quarter results, compared to the first quarter of 2025, reflect higher sales and earnings through the successful execution of sales price increases along with favorable volume in our Packaging Solutions North America segment ("PS NA"). The second quarter of 2025 reflects one additional month of DS Smith activity in both our PS NA and Packaging Solutions EMEA ("PS EMEA") segments. Industry demand in North America has been relatively stable, but softer than last year as economic uncertainty from tariffs continues to impact industrial production and box demand across the manufacturing sector. In our PS EMEA segment, weaker market demand driven by macroeconomic volatility was a headwind in the second quarter of 2025. Box shipments slowed sequentially in the second quarter by approximately 1%, primarily driven by softness in April and May although we saw signs of volume recovery in June. We continue to actively monitor recent changes in trade policy, particularly newly implemented tariffs affecting goods imported in the United States. While the full scope of the financial impact remains under evaluation, our risk management and supply chain teams are engaged in contingency planning to mitigate potential disruptions. We continued to make progress in our commercial efforts through a focus on our customers and growing the business in attractive markets. We also took several cost-out actions in the second quarter, including announced facility closures in North America and EMEA, as part of our overall effort to reduce complexity and minimize costs, which enables us to reinvest to build an advantaged cost position. We remain committed to the pursuit and execution of our commercial and cost-out actions.

The following is a discussion, by segment, of the second quarter of 2025 performance compared to the first quarter of 2025 as well as the third quarter of 2025 outlook. Second quarter of 2025 operating profit in our PS NA segment was $277 million versus $142 million in the first quarter of 2025. Price and mix was higher from the realization of prior index movements, especially in local accounts and we expect this to continue in the third quarter of 2025. Volume was seasonally higher in the second quarter of 2025 and we expect this trend to continue in the third quarter of 2025 as we onboard our strategic wins. Operations and costs in the second quarter of 2025 was unfavorable sequentially, primarily driven by the non-repeat of favorable items from the first quarter of 2025 along with additional costs associated with footprint and business optimization actions, inventory valuation adjustments and increased employee benefit costs in the second quarter of 2025. Operations and costs also included unplanned costs from the natural gas curtailment we experienced at our Valliant, Oklahoma mill. These unfavorable costs were partially offset by footprint optimization benefits from the Campti, Louisiana mill closure and other prior cost-out initiatives. For the third quarter, operations and costs are anticipated to be favorable due to the non-repeat of unfavorable items in the second quarter, continued benefits from cost-out actions and focused performance improvement. Planned maintenance outage costs were sequentially higher with the second quarter being the heaviest outage quarter of 2025 and are expected to be lower in the third quarter coming off the peak activity. Input costs were lower in the second quarter of 2025 due to lower energy and fiber costs but we expect higher input costs in the third quarter due to increased energy costs. Depreciation and amortization was lower in the second quarter of 2025 associated with the non-repeat of the accelerated depreciation from the Campti, Louisiana mill closure, offset by an additional month of depreciation for DS Smith North American assets and updates to DS Smith purchase price accounting values.

Second quarter 2025 operating loss in our PS EMEA business was $1 million versus operating profit of $46 million in the first quarter of 2025. Price and mix was sequentially higher in the second quarter of 2025 due to prior index movements and higher external paper sales. We expect price and mix to be higher in the third quarter of 2025 on continued realization of prior index

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**<u>[**Table of Contents**](#i23e23e74ffae4467b99480730e23722f_10)</u>**

movements. Volume was lower in the second quarter of 2025 due to the overall soft demand environment. We expect improved volume in the third quarter of 2025 due to an improving demand environment along with the benefits of confirmed strategic wins. Operations and costs in the second quarter of 2025 were sequentially higher driven by the non-repeat of favorable first quarter of 2025 items, including energy credits recognized in the prior quarter. In the region, input costs were higher in the second quarter driven by higher fiber costs that were offset by lower energy costs. Operations and costs are expected to be lower in the third quarter of 2025 as we realize the benefits of cost- out initiatives. Input costs were sequentially flat versus the first quarter of 2025, and we expect some improvement in the third quarter of 2025 on lower fiber costs. Depreciation and amortization was higher in the second quarter of 2025 associated with an additional month of depreciation for DS Smith EMEA assets and updates to DS Smith purchase price accounting values.

Second quarter of 2025 operating loss in our Global Cellulose Fibers business was $4 million versus operating profit of $17 million in the first quarter of 2025. Price and mix was higher versus the first quarter of 2025 on the realization of prior index movements. We expect price and mix to be lower in the third quarter of 2025 on lower price realization from prior index movements and lower energy credits sales compared to the first half of 2025. Volume was sequentially lower in the second quarter of 2025 due to higher maintenance outage activity. We expect volumes to be higher in the third quarter of 2025 in response to lower outage activity in the quarter. Operations and costs were sequentially higher in the second quarter of 2025 due to the timing of spend on turbine maintenance, partially offset by improved mill reliability. We expect improved operations and costs in the third quarter on the non-repeat of the second quarter turbine maintenance and continued mill reliability improvement. Planned maintenance outage costs were higher in the second quarter of 2025 as we have now completed 80% of planned outages which will result in lower maintenance outage costs in the third quarter of 2025. Finally, input costs were lower in the second quarter of 2025 on lower energy costs which are expected to increase in the third quarter of 2025. We are pursuing strategic options for our Global Cellulose Fibers business. There is no assurance that this process will result in any transaction or other outcome. See "<u>[Item 1A Risk Factors](#i23e23e74ffae4467b99480730e23722f_115)</u> - *There are risks associated with our pursuit of strategic options of our Global Cellulose Fibers business, and there is no assurance that this process will result in any transactions or other outcome*."

***Divestiture of European Corrugated Box Plants***

On June 30, 2025, the Company completed the sale of five corrugated box plants in Europe as part of its remedy package for the previously disclosed acquisition of DS Smith. The divested assets include (i) three plants in Normandy, France (namely, one box plant in Saint-Amand, one box plant in Mortagne, and one sheet plant in Cabourg); (ii) one box plant in Ovar, Portugal; and (iii) one box plant in Bilbao, Spain. The sale of these plants was agreed to with the European Commission as a remedy for IP's acquisition of DS Smith, as published on the European Commission's website on January 24, 2025.

This divestiture follows the Company's acquisition of DS Smith, which closed on January 31, 2025. As part of the transaction, IP issued 0.1285 shares for each DS Smith share, resulting in the issuance of approximately 178 million new shares of IP common stock. Holders of these shares owned roughly 34.1% of the Company's outstanding share capital post-closing. The total purchase consideration was approximately $9.9 billion, based on the closing share price of $55.63. Subsequently, on February 4, 2025, the new shares began trading under the symbol "IP" on the New York Stock Exchange and under "IPC" on the London Stock Exchange via a secondary listing. The combined Company's global headquarters remains in Memphis, Tennessee, with its EMEA headquarters established at DS Smith's London office.

***Macroeconomic and Market Conditions***

In the second quarter, the Company navigated a dynamic macroeconomic environment marked by cost pressures, shifting consumer demand, elevated interest rates and evolving global trade policies. These factors, along with heightened geopolitical tensions, are contributing to broader consumer uncertainty and impacting industrial demand.

We continue to actively monitor recent changes in trade policy, particularly newly implemented tariffs affecting goods imported into the United States. Economic uncertainty from tariffs continues to impact industrial production and box demand across the manufacturing sector.

The OBBBA enacted in July 2025 introduced a wide range of tax policy changes. Key provisions include the extension of select elements of the Tax Cuts and Jobs Act, updates to the international tax framework, and the reinstatement of favorable treatment for certain business-related deductions. With staggered effective dates beginning in 2025 and extending through 2027, the Company is actively evaluating the OBBBA's potential implications on its consolidated financial statements.

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**<u>[**Table of Contents**](#i23e23e74ffae4467b99480730e23722f_10)</u>**

***Reconciliation of Net earnings (loss) to Adjusted operating earnings (loss)***

Adjusted Operating Earnings and Adjusted Operating Earnings Per Share are non-GAAP measures defined as net earnings (loss) (a GAAP measure) excluding net special items and non-operating pension expense (income). Net earnings (loss) and Diluted earnings (loss) per share are the most directly comparable GAAP measures. The Company calculates Adjusted Operating Earnings by excluding the after-tax effect of non-operating pension expense (income) and net special items, as described in greater detail below, from net earnings (loss) reported under GAAP. Adjusted Operating Earnings Per Share is calculated by dividing Adjusted Operating Earnings by diluted average shares of common stock outstanding. Management uses these non-GAAP measures to focus on ongoing operations and believes that such non-GAAP measures are useful to investors in assessing the operational performance of the Company and enabling investors to perform meaningful comparisons of past and present consolidated operating results. The Company believes that using these non-GAAP measures, along with the most directly comparable GAAP measures, provides for a more complete analysis of the Company's results of operations.

Non-operating pension expense (income) represents amortization of prior service cost, amortization of actuarial gains/losses, expected return on assets and interest cost. The Company excludes these amounts from our Adjusted Operating Earnings as the Company does not believe these items reflect ongoing operations. These particular pension cost elements are not directly attributable to current employee service. The Company includes service cost in our non-GAAP measure as it is directly attributable to employee service, and the corresponding employees' other compensation elements, in connection with ongoing operations.

The following is a reconciliation of Net earnings (loss) to Adjusted operating earnings (loss) on a total basis. Additional detail is provided below regarding the net special items expense (income) referenced in the charts below.

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| | | | |
|:---|:---|:---|:---|
| | **Three Months Ended<br>June 30,** | **Three Months Ended<br>June 30,** | **Three Months Ended March 31,** |
| ***In millions*** | **2025** | **2024** | **2025** |
| Net earnings (loss) | $**75** | $498 | $(105) |
| Add back - Non-operating pension expense (income) | **(5)** | (10) | 3 |
| Add back - Net special items expense (income) | **35** | 49 | 249 |
| Income taxes - Non-operating pension and special items (a) | **—** | (344) | (46) |
| Adjusted operating earnings (loss) | $**105** | $193 | $101 |

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&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;For the three months ended June 30, 2025, this amount includes a tax expense of $1 million on the non-operating pension expense and a tax benefit of $1 million associated with special items. The three months ended June 30, 2024 include a tax benefit of $338 million related to internal legal entity restructuring. This amount also includes a tax expense of $2 million on the non-operating pension incomes and a tax benefit of $8 million associated with special items. The three months ended March 31, 2025 includes a tax benefit of $1 million on the non-operating pension expense and a tax benefit of $45 million associated with special items.

***Effects of Net Special Items Expense (Income)***

Details of net special items expense (income) included in continuing operations for the three months ended are as follows:

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| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** |
| | **June 30,** | **June 30,** | **June 30,** | **June 30,** | **June 30,** | | **March 31,** | **March 31,** | |
| | **2025** | **2025** | | **2024** | **2024** | | **2025** | **2025** | |
| ***In millions*** | **Before Tax** | **After Tax** |  | **Before Tax** | **After Tax** |  | **Before Tax** | **After Tax** |  |
| &nbsp;&nbsp;&nbsp;DS Smith combination costs | $**32** | $**29** | **(a)** | $17 | $17 | (a) | $221 | $183 | (a) |
| &nbsp;&nbsp;&nbsp;Severance and other costs | **39** | **34** | **(b)** |  |  |  | 83 | 63 | (b) |
| &nbsp;&nbsp;&nbsp;Global Cellulose Fibers strategic options costs | **15** | **11** | **(a)** |  |  |  | 12 | 9 | (a) |
| &nbsp;&nbsp;&nbsp;Strategic advisory fees | **—** | **—** |  | 12 | 9 | (a) |  |  |  |
| &nbsp;&nbsp;&nbsp;Environmental remediation adjustments | **—** | **—** |  | 25 | 19 | (d) |  |  |  |
| &nbsp;&nbsp;&nbsp;Legal reserve adjustments | **—** | **—** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Net (gain) loss on sale of business | **(51)** | **(40)** | **(c)** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Net (gain) loss on sale of fixed assets | **—** | **—** |  | (5) | (4) | (e) | (67) | (51) | (e) |
| **Total** | **35** | **34** |  | 49 | 41 |  | 249 | 204 |  |
| **Tax expense (benefit)** |  |  |  |  |  |  |  |  |  |
| Tax benefit related to internal legal entity restructuring | **—** | **—** |  |  | (338) | (f) |  |  |  |
| **Tax Total** |  |  |  |  | (338) |  |  |  |  |
| **Total Net Special Items** | $**35** | $**34** |  | $49 | $(297) |  | $249 | $204 |  |

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**<u>[**Table of Contents**](#i23e23e74ffae4467b99480730e23722f_10)</u>**

(a) Transaction and other costs that the Company believes are not reflective of the Company's underlying operations recorded in cost of products sold, selling and administrative expenses and taxes other than payroll and income taxes.

(b) Severance and other costs associated with the Company's 80/20 strategic approach which includes the realignment of resources and mill strategic actions recorded in restructuring charges, net.

(c) Gain on the sale of five European box plants in Mortagne, Saint-Amand, and Cabourg (France), Ovar (Portugal) and Bilbao (Spain) to satisfy regulatory commitments in connection with the DS Smith combination.

(d) Environmental remediation adjustments associated with remediation work at a waste pit site at a mill acquired but never operated by the Company, and last utilized by the predecessor owner of the mill.

(e) Net (gain) loss on the sale of fixed assets related to the sale of assets at our permanently closed Orange, Texas containerboard mill, miscellaneous land and other items that the Company does not believe are reflective of the Company's underlying operations.

(f) Tax benefit related to internal legal entity restructuring.

The following is a reconciliation of Net earnings (loss) to Adjusted operating earnings (loss) on a per share basis:

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| | | | |
|:---|:---|:---|:---|
| | **Three Months Ended<br>June 30,** | **Three Months Ended<br>June 30,** | **Three Months Ended March 31,** |
| | **2025** | **2024** | **2025** |
| Diluted earnings (loss) per share | $**0.14** | $1.41 | $(0.24) |
| Add back - Non-operating pension expense (income) per share | **—** | (0.02) | 0.01 |
| Add back - Net special items expense (income) per share | **0.06** | 0.14 | 0.57 |
| Income taxes per share - Non-operating pension and special items | **—** | (0.98) | (0.11) |
| Adjusted operating earnings (loss) per share | $**0.20** | $0.55 | $0.23 |

---

Cash provided by (used for) operations totaled $188 million and $760 million for the first six months of 2025 and 2024, respectively. Free cash flow in the first six months of 2025 and 2024 was $(564) million and $311 million, respectively. Free cash flow is a non-GAAP measure, which equals cash provided by operations less capital expenditures, and the most directly comparable GAAP measure is cash provided by (used for) operations. Management utilizes this measure in connection with managing our business and believes that free cash flow is useful to investors as a liquidity measure because it measures the amount of cash generated that is available, after reinvesting in the business, to maintain a strong balance sheet, pay dividends, repurchase stock, service debt and make investments for future growth. It should not be inferred that the entire free cash flow amount is available for discretionary expenditures.

The following is a reconciliation of cash provided by operations to free cash flow:

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| | | |
|:---|:---|:---|
| | **Six Months Ended<br>June 30,** | **Six Months Ended<br>June 30,** |
| ***In millions*** | **2025** | **2024** |
| Cash provided by operations | $**188** | $760 |
| Adjustments: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Capital expenditures | **(752)** | (449) |
| Free Cash Flow | $**(564)** | $311 |

---

The non-GAAP financial measures presented in this Form 10-Q as referenced above have limitations as analytical tools and should not be considered in isolation or as a substitute for an analysis of our results calculated in accordance with GAAP. In addition, because not all companies utilize identical calculations, the Company's presentation of non-GAAP measures in this Form 10-Q may not be comparable to similarly titled measures disclosed by other companies, including companies in the same industry as the Company. Investors are cautioned not to place undue reliance on any non-GAAP financial measures used in this Form 10-Q.

**<u>[RESULTS OF OPERATIONS](#i23e23e74ffae4467b99480730e23722f_94)</u>**

The following summarizes our results of operations for second quarter of 2025 compared with the first quarter of 2025 and the second quarter of 2024:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended<br>June 30,** | **Three Months Ended<br>June 30,** | **Three Months Ended March 31,** | **Change Compared to March 31, 2025** | **Change Compared to June 30, 2024** |
| ***In millions*** | **2025** | **2024** | **2025** | $**%** | $**%** |
| Net sales | $**6767** | $4734 | $5901 | 15% | 43% |
| Cost of products sold | **4876** | 3360 | 4259 | 14% | 45% |
| Selling and administrative expenses | **578** | 453 | 530 | 9% | 28% |
| Depreciation and amortization | **480** | 261 | 571 | (16)% | 84% |
| Distribution expenses | **578** | 379 | 483 | 20% | 53% |
| Taxes other than payroll and income taxes | **49** | 35 | 93 | (47)% | 40% |
| Restructuring charges, net | **39** |  | 83 |  |  |
| Net (gains) losses on sales and impairments of businesses | **(51)** |  |  |  |  |
| Net (gains) losses on sale of fixed assets | **—** | (5) | (67) |  |  |
| Interest expense, net | **107** | 55 | 81 | 32% | 95% |
| Non-operating pension expense (income) | **(5)** | (10) | 3 |  |  |
| Earnings (loss) before income taxes and equity earnings (loss) | **116** | 206 | (135) |  |  |
| Income tax provision (benefit) | **40** | (293) | (31) |  |  |
| Equity earnings (loss), net of taxes | **(1)** | (1) | (1) |  |  |
| Net earnings (loss) | $**75** | $498 | $(105) |  |  |
| Diluted earnings (loss) per share | $**0.14** | $1.41 | $(0.24) |  |  |

---

**Three Months Ended June 30, 2025 Compared to the Three Months Ended March 31, 2025 and the Three Months Ended June 30, 2024**

Refer to the Effects of Net Special Items Expense (Income) section on page <u>[32](#idb406cab0ce34c06bd83c88a35c70340_16364)</u> for details of net special items expense (income) discussed below.

***Net sales***

The increase in the second quarter of 2025 compared to the first quarter of 2025 and the second quarter of 2024 was primarily driven by the addition of the DS Smith business and the three months of activity in the second quarter of 2025 compared to two months of activity in the first quarter of 2025. Additional details on net sales are provided in the <u>[Business Segment Operating Results](#i23e23e74ffae4467b99480730e23722f_97)</u> section below.

***Cost of products sold***

Net special items charges of $25 million and $70 million in the second quarter of 2024 and the first quarter of 2025, respectively, are included in cost of products sold. The second quarter of 2025 includes $1.6 billion for DS Smith and the first quarter of 2025 includes $1.09 billion for DS Smith (including $70 million of special items charges). Cost of products sold includes three months of DS Smith activity in the second quarter of 2025 compared to two months in the first quarter of 2025. For legacy IP, compared to the first quarter of 2025, there were increases of $55 million in raw materials and $109 million in maintenance and labor expense, offset by decreases of $52 million in fuel and other expenses. Compared to the second quarter of 2024, cost of products sold was impacted by decreases in raw materials and operating materials of $218 million, offset by an increase of $182 million in maintenance and fuel expense.

***Selling and administrative expenses***

Net special items charges of $47 million, $29 million and $113 million in the second quarter of 2025 and 2024 and the first quarter of 2025, respectively, are included in selling and administrative expenses. The second quarter of 2025 includes $144 million for DS Smith (including $15 million of special items charges) and the first quarter of 2025 includes $123 million for DS Smith (including $49 million of special items charges). Selling and administrative expenses includes three months of DS Smith activity in the second quarter of 2025 compared to two months in the first quarter of 2025. For legacy IP, compared to the first quarter of 2025, there were increases in incentive compensation of $10 million and medical benefit costs of $15 million. Compared to the second quarter of 2024, there were decreases in medical benefit costs of $10 million and incentive compensation of $45 million.

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**<u>[**Table of Contents**](#i23e23e74ffae4467b99480730e23722f_10)</u>**

***Depreciation and amortization***

Depreciation expense for the first quarter of 2025 includes $197 million for accelerated depreciation related to the Campti, Louisiana mill closure and other 80/20 strategic actions. The second quarter of 2025 and the first quarter of 2025 includes $214 million and $107 million, respectively, for DS Smith. Depreciation and amortization includes three months of DS Smith activity in the second quarter of 2025 compared to two months in the first quarter of 2025. Depreciation and amortization expense in the second quarter of 2025 is higher primarily due to the changes in the valuation of intangible assets and property plant, and equipment along with changes to estimated lives associated with the acquisition accounting of DS Smith. Depreciation and amortization expense is based on an estimate of asset fair values and will be updated throughout the calendar year as we complete the purchase price allocation.

***Distribution expenses***

The second quarter of 2025 includes $228 million compared to $140 million in the first quarter of 2025 for DS Smith. Distribution expenses includes three months of DS Smith activity in the second quarter of 2025 compared to two months in the first quarter of 2025. For legacy IP, compared to the first quarter of 2025, there was an increase in freight expense of $8 million and compared to the second quarter of 2024, there were decreases in freight expense and warehousing expense of $29 million.

***Taxes other than payroll and income taxes***

Net special items charges of $50 million in the first quarter of 2025 are included in taxes other than payroll and income taxes. The second quarter of 2025 includes $10 million compared to $5 million in the first quarter of 2025 for DS Smith. For legacy IP, taxes other than payroll and income taxes includes three months of DS Smith activity in the second quarter of 2025 compared to two months in the first quarter of 2025.

***Interest expense, net***

The second quarter of 2025 includes $45 million compared to $24 million in the first quarter of 2025 for DS Smith. Interest expense, net includes three months of DS Smith activity in the second quarter of 2025 compared to two months in the first quarter of 2025.

***Income tax provision (benefit)***

An income tax provision of $40 million was recorded for the second quarter of 2025 and the reported effective income tax rate was 34%. Excluding a benefit of $1 million related to the tax effects of net special items and an expense of $1 million related to the tax effects of non-operating pension income, the operational effective income tax rate was 27% for the second quarter of 2025.

An income tax benefit of $31 million was recorded for the first quarter of 2025 and the reported effective income tax rate was 23%. Excluding a benefit of $45 million related to the tax effects of net special items and benefit of $1 million related to the tax effects of non-operating pension expense, the operational effective income tax rate was 13% for the first quarter of 2025. The operational and reported effective income tax rates were higher in the second quarter of 2025 than in the first quarter of 2025 primarily due to decreased tax expense related to equity-based compensation that occurred in the first quarter.

An income tax benefit of $293 million was recorded for the second quarter of 2024 and the reported effective income tax rate was (142)%. Excluding a benefit of $346 million related to the tax effects of net special items and expense of $2 million related to the tax effects of non-operating pension income, the operational effective income tax rate was 21% for the second quarter of 2024.

The following is a reconciliation of the net income tax provision (benefit) to the operational income tax provision (a non-GAAP financial measure) and the reported effective income tax rate to the operational effective income tax rate (a non-GAAP financial measure):

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | |
| | **June 30,** | **June 30,** | **June 30,** | **June 30,** | **March 31,** | **March 31,** |
|<br>***In millions (except rates)*** | **2025** | **2025** | **2024** | **2024** | **2025** | **2025** |
|  | **Provision (Benefit)** | **Rate** | **Provision (Benefit)** | **Rate** | **Provision (Benefit)** | **Rate** |
| Income tax provision (benefit) and reported effective income tax rate | $**40** | **34%** | $(293) | (142)% | $(31) | 23% |
| Income tax effect - non-operating pension (income) expense and special items | **—** |  | 344 |  | 46 |  |
| **Operational Tax Provision and Operational Effective Tax Rate** | $**40** | **27%** | $51 | 21% | $15 | 13% |

---

The operational income tax provision and operational effective income tax rate are non-GAAP financial measures and are calculated by adjusting the earnings (loss) before income taxes and equity earnings (loss), income tax provision (benefit) and rate to exclude net special items and non-operating pension expense (income). The most directly comparable GAAP measures are the reported income tax provision and effective income tax rate, respectively. Management believes that this presentation provides useful information to investors by providing a meaningful comparison of the income tax rate between past and present periods.

**<u>[BUSINESS SEGMENT OPERATING RESULTS](#i23e23e74ffae4467b99480730e23722f_97)</u>**

The Company currently operates in three segments: Packaging Solutions North America (PS NA), Packaging Solutions EMEA (PS EMEA) and Global Cellulose Fibers.

The following tables present net sales and business segment operating profit (loss), which is the Company's measure of segment profitability. Business segment operating profit (loss) is a measure reported to our management for purposes of making decisions about allocating resources to our business segments and assessing the performance of our business segments and is presented in our financial statement footnotes in accordance with ASC 280 - "Segment Reporting." For additional information regarding business segment operating profit (loss), including a description of the manner in which business segment operating profit (loss) is calculated, see <u>[Note 19 - Business Segment Information](#i23e23e74ffae4467b99480730e23722f_88)</u> to the <u>[Condensed Notes to the Consolidated Financial Statements](#i23e23e74ffae4467b99480730e23722f_31)</u>.

***PS NA***

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **2025** | **2025** | **2025** | **2024** | **2024** | **2024** |
| ***In millions*** | **2nd Quarter** | **1st Quarter** | **Six Months** | **2nd Quarter** | **1st Quarter** | **Six Months** |
| **Sales** | $**3860** | $3702 | $7562 | $3628 | $3486 | $7114 |
| **Business Segment Operating Profit (Loss)** | $**277** | $142 | $419 | $281 | $192 | $473 |

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***PS NA*** results include sales of $173 million and business segment operating profit (loss) of $(33) million for the legacy DS Smith North America business in the second quarter of 2025 compared with sales of $127 million and business segment operating profit (loss) of $(9) million in the first quarter of 2025. The financial results of the PS NA segment include three months in the second quarter compared with two months in the first quarter for the DS Smith North America business. For legacy IP PS NA, sales were higher compared to the first quarter of 2025 driven by higher average sales prices for boxes and export containerboard reflecting prior index movements and seasonally higher box volumes. Cost of products sold increased by $84 million and was impacted by higher manufacturing costs, including planned maintenance downtime costs, partially offset by lower input costs. Depreciation and amortization expense decreased by $196 million driven by the non-repeat of $193 million of accelerated depreciation associated with the previously announced closure of our Red River containerboard mill in Campti, Louisiana. Selling and administrative expenses increased by $55 million driven by higher overhead costs, including the non-repeat of favorable employee medical costs in the first quarter of 2025.

Compared with the second quarter of 2024, IP legacy PS NA sales in the second quarter of 2025 were higher driven by higher sales prices, partially offset by lower sales volumes reflecting the impact of our box go-to-market strategy. Cost of products sold increased by $12 million as the impact of higher manufacturing costs, including planned maintenance downtime costs and input costs, was partially offset by lower sales volumes. Selling and administrative expenses increased by $17 million and was impacted by higher overhead costs. Distribution expense decreased by $17 million and was impacted by lower sales volumes.

Entering the third quarter of 2025, sales volumes are expected to be seasonally higher compared to the second quarter of 2025. Sales are also expected to be impacted by prior index movements. Operating costs are expected to be lower. Planned

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maintenance downtime costs are expected to be lower in the third quarter of 2025 compared with the second quarter of 2025. Input costs are expected to be higher driven by energy costs.

***PS EMEA***

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **2025** | **2025** | **2025** | **2024** | **2024** | **2024** |
| ***In millions*** | **2nd Quarter** | **1st Quarter** | **Six Months** | **2nd Quarter** | **1st Quarter** | **Six Months** |
| **Sales** | $**2291** | $1550 | $3841 | $328 | $348 | $676 |
| **Business Segment Operating Profit (Loss)** | $**(1)** | $46 | $45 | $10 | $24 | $34 |

---

***PS EMEA*** results include sales of $1.9 billion and business segment operating profit (loss) of $(10) million for the legacy DS Smith EMEA business in the second quarter of 2025 compared with sales of $1.2 billion and business segment operating profit (loss) of $13 million in the first quarter of 2025. The financial results of the PS EMEA segment include three months in the second quarter compared with two months in the first quarter for the DS Smith EMEA business. Compared with the first quarter of 2025, sales were higher driven by higher sales prices reflecting prior price increases and higher external paper sales, partially offset by lower volumes reflecting seasonality and a soft demand environment. Cost of products sold increased and was impacted by higher fiber costs partially offset by lower energy costs and higher planned maintenance downtime costs. Selling and administrative expenses increased driven by higher overhead costs. Depreciation and amortization expense in the second quarter of 2025 is higher primarily due to the changes in the valuation of intangible assets and property, plant and equipment along with changes to estimated lives associated with the acquisition accounting of DS Smith. Depreciation and amortization expense is based on an estimate of asset fair values and will be updated throughout the calendar year as we complete the purchase price allocation.

Compared with the second quarter of 2024, legacy IP PS EMEA sales in the second quarter of 2025 were higher driven by higher sales prices for paper. Cost of products sold were slightly higher, reflecting higher input costs. Selling and administrative expenses were $8 million higher compared to the first quarter of 2024 driven by higher overhead costs.

Looking ahead to the third quarter of 2025, sales are expected to be higher. Operating costs are expected to be lower. Input costs are expected to be lower, driven by fiber costs. Planned maintenance downtime costs are expected to be higher in the third quarter of 2025.

***Global Cellulose Fibers***

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **2025** | **2025** | **2025** | **2024** | **2024** | **2024** |
| ***In millions*** | **2nd Quarter** | **1st Quarter** | **Six Months** | **2nd Quarter** | **1st Quarter** | **Six Months** |
| **Sales** | $**628** | $643 | $1271 | $717 | $704 | $1421 |
| **Business Segment Operating Profit (Loss)** | $**(4)** | $17 | $13 | $31 | $(47) | $(16) |

---

***Global Cellulose Fibers*** sales were lower for the second quarter of 2025 compared with the first quarter of 2025, as higher sales prices from prior index movements were more than offset by lower volumes driven by the heavy outage quarter. Cost of products sold was slightly lower and was impacted by lower sales volumes and lower energy costs offset by planned maintenance downtime costs. Selling and administrative expenses increased $13 million driven by higher overhead costs, including the non-repeat of favorable employee medical costs in the first quarter of 2025. Distribution costs were lower reflecting lower sales volumes.

Compared with the second quarter of 2024, sales in the second quarter of 2025 were lower, as higher average sales prices and an improved product mix were more than offset by lower commodity volumes driven by the mill strategic actions taken in the fourth quarter of 2024. Cost of products sold decreased $25 million and was impacted by lower sales volumes partially offset by higher planned maintenance downtime costs. Selling and administrative expense was $5 million lower driven by lower overhead costs. Distribution costs were $13 million lower reflecting lower sales volumes.

Entering the third quarter of 2025, sales are expected to be lower. Planned maintenance downtime costs in the third quarter of 2025 are expected to be lower compared with the second quarter of 2025. Operating costs are expected to be lower. Input costs are expected to be higher driven by energy costs.

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**<u>[LIQUIDITY AND CAPITAL RESOURCES](#i23e23e74ffae4467b99480730e23722f_100)</u>**

Cash provided by (used for) operations totaled $188 million and $760 million for the first six months of 2025 and 2024, respectively. Cash provided by (used for) working capital components (accounts receivable, contract assets and inventory less accounts payable and accrued liabilities, interest payable and other) totaled $(683) million for the six months ended June 30, 2025 compared with cash provided by (used for) working capital components of $12 million for the six months ended June 30, 2024. The change in cash provided by operations in the first six months of 2025 compared to the comparable 2024 six-month period was primarily due to significant payments made in the first quarter of 2025 that impacted operating cash flow by approximately $670 million, including $240 million of DS Smith transaction costs and $80 million of severance payments, as well as incentive compensation and other benefit payments.

Cash provided by (used for) investment activities totaled $(38) million in the first six months of 2025 compared with $(446) million in the first six months of 2024. The increase in cash provided by investment activities is mainly due to proceeds from the sale of fixed assets of $89 million, proceeds from divestitures, net of transaction costs of $138 million, proceeds from insurance recoveries of $28 million and net cash acquired from acquisitions of $419 million, offset by higher capital expenditures of $303 million.

Capital expenditures totaled $752 million in the first six months of 2025, compared to $449 million in the first six months of 2024. Full-year 2025 capital expenditures are currently expected to be approximately $1.8 billion to $1.9 billion, or 90% to 95% of depreciation and amortization.

Financing activities for the first six months of 2025 included a $200 million net increase in debt versus a $8 million net decrease in debt during the comparable 2024 six-month period.

During the second quarter of 2025, the Company had no borrowings outstanding under its commercial paper program and its USD denominated committed bank facility.

See <u>[Note 15 - Debt](#i23e23e74ffae4467b99480730e23722f_76)</u> to the <u>[Condensed Notes to the Consolidated Financial Statements](#i23e23e74ffae4467b99480730e23722f_31)</u> for a discussion of various debt-related actions taken by the Company during the six months ended June 30, 2025.

Maintaining an investment-grade credit rating is an important element of International Paper's financing strategy. At June 30, 2025, the Company held long-term credit ratings of BBB (stable outlook) and Baa2 (stable outlook) by S&P and Moody's, respectively. In addition, the Company held short-term credit ratings of A2 and P2 by S&P and Moody's, respectively, for borrowings under the Company's commercial paper program.

At June 30, 2025, International Paper's USD denominated credit facilities totaled $1.9 billion, which is comprised of the $1.4 billion contractually committed bank credit agreement and up to $500 million under the receivables securitization program. Management believes that the Company's credit agreements are adequate to cover expected operating cash flow variability during the current economic cycle. The credit agreements generally provide for interest rates at a floating rate index plus a pre-determined margin dependent upon International Paper's credit rating. At June 30, 2025, the Company had no borrowings outstanding under the $1.4 billion credit agreement or the $500 million receivables securitization program. The Company's credit agreements are not subject to any restrictive covenants other than the financial covenants as disclosed in <u>[Note 15 - Debt](#i23e23e74ffae4467b99480730e23722f_76)</u> to the <u>[Condensed Notes to the Consolidated Financial Statements](#i23e23e74ffae4467b99480730e23722f_31)</u>, and the borrowings under the receivables securitization program being limited by eligible receivables. The Company was in compliance with all its debt covenants at June 30, 2025, and was well below the thresholds stipulated under the covenants as defined in the credit agreements. The financial covenants do not restrict any borrowings under the credit agreements.

In addition to the $1.4 billion capacity under the Company's credit agreements, International Paper has a commercial paper program with a borrowing capacity of $1.0 billion supported by its $1.4 billion credit agreement. Under the terms of the program, individual maturities on borrowings may vary, but not exceed one year from the date of issue. Interest bearing notes may be issued either as fixed or floating rate notes. As of June 30, 2025, the Company had no borrowings outstanding under the commercial paper program.

On February 14, 2025, DS Smith, a wholly owned subsidiary of International Paper, announced separate invitations (each such invitation, a "Consent Solicitation") to eligible holders of its outstanding (i) €600 million 0.875 percent Notes due September 12, 2026 (the "2026 Notes"); (ii) €850 million 4.375 percent Notes due July 27, 2027 (the "2027 Notes"); (iii) £250 million 2.875 percent Notes due July 26, 2029 (the "2029 Notes"); and (iv) €650 million 4.500 percent Notes due July 27, 2030 (the "2030 Notes"), in each case issued by DS Smith under its Euro-Medium Term Note Programme (each a "Series" and, together, the "Notes") to consent to, amongst other things, certain modifications to the terms and conditions (the "Conditions") of, and

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the trust deed (the "Trust Deed") for, the relevant Series to provide for (i) the removal of the obligation for DS Smith to prepare audited and unaudited consolidated accounts; (ii) the amendment of certain events of default to align more closely with certain equivalent provisions included in the documentation relating to debt securities issued by International Paper and to allow additional flexibility for potential reorganization of DS Smith's subsidiaries, if required, now that DS Smith and its subsidiaries are part of the International Paper group; and (iii) certain consequential modifications to the applicable Conditions and Trust Deed for the relevant Series in relation to items (i) and (ii) above (together, the "Proposed Amendments"). As consideration for the holders of the Notes consenting to the Proposed Amendments, it was proposed that DS Smith procure a guarantee from International Paper, to guarantee the payment obligations of DS Smith under the Notes. The full principal amount of each Series of Notes issued by DS Smith remains outstanding as of the date hereof. On March 10, 2025, DS Smith has executed and delivered a Supplemental Trust Deed in respect of each Series to implement the Proposed Amendments, and International Paper has executed and delivered a deed of guarantee in respect of each Series to guarantee the payment obligations of DS Smith under such Series.

In March 2025, the Company amended and restated its £1.25 billion credit facility agreement to, among other things (i) replace its obligation to prepare audited and unaudited consolidated accounts and instead provide International Paper's account information, on the same terms as International Paper's existing credit facilities, (ii) amend the financial covenant in the credit facility agreement to align with financial covenants given by International Paper in its existing credit facilities, (iii) amend certain events of default, and undertakings to align more closely with certain equivalent provisions included in the documentation relating to the existing financings of International Paper and to allow additional flexibility for potential reorganization of DS Smith's subsidiaries, if required, now that DS Smith and its subsidiaries are part of the International Paper group. The multi-currency credit facility allows for GBP, EUR and USD borrowings and provides for interest rates at a floating rate index plus a pre-determined margin. Credit facility borrowings are denominated in the currency that aligns with the Company's cashflows. At June 30, 2025, the Company had €970 million (approximately $1.1 billion) borrowings outstanding under the credit facility. The Company's credit facility agreement is not subject to any restrictive covenants other than that International Paper must comply with the same negative covenants as per its existing credit facilities. IP was in compliance with all its debt covenants at June 30, 2025, and was well below the thresholds stipulated under the covenants as defined in the credit facility agreement. Further the financial covenants do not restrict any borrowings under the credit facility agreement.

In April 2025, the Company amended and restated its credit facility agreement to, among other things (i) replace its obligation to prepare audited and unaudited consolidated accounts and instead provide International Paper's account information, on the same terms as International Paper's existing credit facilities, (ii) amend the financial covenant in the credit facility agreement to align with financial covenants given by International Paper in its existing credit facilities, (iii) amend certain events of default, and undertakings to align more closely with certain equivalent provisions included in the documentation relating to the existing financings of International Paper and to allow additional flexibility for potential reorganization of DS Smith's subsidiaries, if required, now that DS Smith and its subsidiaries are part of the International Paper group. The credit facility agreement provides for interest rates at a fixed rate for each facility. At June 30, 2025, the Company had €188 million (approximately $221 million) borrowings outstanding under the €200 million credit facility agreement. The Company's credit facility agreement is not subject to any restrictive covenants other than that International Paper must comply with the same negative covenants as per its existing credit facilities. IP was in compliance with all its debt covenants at June 30, 2025, and was well below the thresholds stipulated under the covenants as defined in the credit facility agreement. Further the financial covenants do not restrict any borrowings under the credit facility agreement.

The Company also has a €60 million committed bank facility that matures in December 2026. In April 2025, the Company amended and restated its credit facility agreement to, among other things (i) replace its obligation to prepare audited and unaudited consolidated accounts and instead provide International Paper's account information, on the same terms as International Paper's existing credit facilities, (ii) amend the financial covenant in the credit facility agreement to align with financial covenants given by International Paper in its existing credit facilities, (iii) amend certain events of default, and undertakings to align more closely with certain equivalent provisions included in the documentation relating to the existing financings of International Paper and to allow additional flexibility for potential reorganization of DS Smith's subsidiaries, if required, now that DS Smith and its subsidiaries are part of the International Paper group. The multi-currency credit facility allows for GBP, EUR and USD borrowings. At June 30, 2025, there were no borrowings outstanding under this agreement. The Company has a £50 million uncommitted bank facility. At June 30, 2025 the Company had €55 million (approximately $65 million) borrowings outstanding under this agreement.

International Paper expects to meet projected capital expenditures, service existing debt, meet working capital and dividend payments and make common stock and/or debt repurchases for the next 12 months and for the foreseeable future thereafter with current cash balances and cash from operations, supplemented as required by its existing credit facilities. The Company will continue to rely on debt and capital markets for the majority of any necessary long-term funding not provided by operating cash flows. Funding decisions will be guided by our capital structure planning objectives. The primary goals of the Company's

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capital structure planning are to maximize financial flexibility and maintain appropriate levels of liquidity to meet our needs while managing balance sheet debt and interest expense. We have repurchased, and may continue to repurchase, our common stock (under our existing share repurchase program) and debt (including in open market purchases) to the extent consistent with this capital structure planning, and subject to prevailing market conditions, our liquidity requirements, applicable securities laws requirements, and other factors. The majority of International Paper's debt is accessed through global public capital markets where we have a wide base of investors.

During the first six months of 2025, International Paper used 3.5 million shares of treasury stock for various incentive plans. International Paper also acquired 1.1 million shares of treasury stock, related to restricted stock tax withholdings during the first six months of 2025. Payments of restricted stock withholding taxes totaled $63 million during this period. Our current share repurchase program approved by our Board of Directors ("Board") on October 11, 2022, does not have an expiration date and has approximately $2.96 billion aggregate amount of shares of common stock remaining authorized for purchase as of June 30, 2025. During the six months ended June 30, 2025, no shares of common stock were repurchased under our share repurchase program.

During the first six months of 2024, International Paper used approximately 2.0 million shares of treasury stock for various incentive plans. International Paper also acquired 0.6 million shares of treasury stock, related to restricted stock tax withholding during the first three months of 2024. Payments of restricted stock withholding taxes totaled $22 million. During the six months ended June 30, 2024, no shares of common stock were repurchased under our share repurchase program.

Cash dividend payments related to common stock totaled $488 million and $321 million for the first six months of 2025 and 2024, respectively. Dividends were $0.9250 per share for the first six months of 2025 and 2024.

Our U.S. and U.K. qualified pension plans are currently fully funded.

**CRITICAL ACCOUNTING POLICIES AND SIGNIFICANT ACCOUNTING ESTIMATES**

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires International Paper to establish accounting policies and to make estimates that affect both the amounts and timing of the recording of assets, liabilities, revenues and expenses. Some of these estimates require judgments about matters that are inherently uncertain.

Accounting policies whose application may have a significant effect on the reported results of operations and financial position of International Paper, and that may require judgments by management that affect their application, include accounting for contingencies, impairment or disposal of long-lived assets, goodwill and other intangible assets, pensions and income taxes.

The Company has included in its Annual Report a discussion of these critical accounting policies, which are important to the portrayal of the Company's financial condition and results of operations and may require management's judgments. Except as described below, the Company has not made any changes in these critical accounting policies during the first six months of 2025.

***Business Combinations***

The Company's acquisitions of businesses are accounted for in accordance with ASC 805, "Business Combinations." We allocate the total purchase price of the assets acquired and liabilities assumed based on their estimated fair value as of the business combination date. In developing estimates of fair values for long-lived assets, including identifiable intangible assets, the Company utilizes a variety of inputs including forecasted cashflows, anticipated growth rates, discount rates, appraisals, market valuations, estimated replacement costs and depreciation, and obsolescence factors. Determining the fair value for specifically identified intangible assets such as customer relationships and lists and tradenames, patents, trademarks and developed technology involves judgment. We may refine our estimates and make adjustments to the assets acquired and liabilities assumed over a measurement period, not to exceed one year. Upon the conclusion of the measurement period or the final determination of the values of assets acquired and liabilities assumed, whichever comes first, any subsequent adjustments are charged to the consolidated statements of earnings. Subsequent actual results of the underlying business activity supporting the goodwill and specifically identified intangible assets could change, requiring us to record impairment charges or adjust their economic lives in future periods.

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**<u>[**Table of Contents**](#i23e23e74ffae4467b99480730e23722f_10)</u>**

**CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS**

Certain statements in this Quarterly Report on Form 10-Q that are not historical in nature may be considered "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements can be identified by the use of forward-looking or conditional words such as "expects," "anticipates," "believes," "estimates," "could," "should," "can," "forecast," "outlook," "intend," "look," "may," "will," "remain," "confident," "commit" and "plan" or similar expressions. These statements are not guarantees of future performance and reflect management's current views and speak only as to the dates the statements are made and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in these statements. All statements, other than statements of historical fact, are forward-looking statements, including, but not limited to, statements regarding anticipated financial results, economic conditions, industry trends, future prospects, and the anticipated benefits, execution and consummation of corporate transactions or contemplated acquisitions, including our completed business combination with DS Smith Limited ("DS Smith"). Factors which could cause actual results to differ include but are not limited to: (i) our ability to consummate and achieve the benefits expected from, and other risks associated with, acquisitions, joint ventures, divestitures, spinoffs, capital investments and other corporate transactions, including, but not limited to, our business combination with DS Smith; (ii) our ability to integrate and implement our plans, forecasts, the internal control framework of DS Smith, including assessment of its internal control over financial reporting, and other expectations with respect to the combined company, including in light of our increased scale and global presence; (iii) risks associated with our strategic business decisions including facility closures, business exits, operational changes, and portfolio rationalizations intended to support the Company's 80/20 strategic approach for long-term growth; (iv) our failure to comply with the obligations associated with being a public company listed on the New York Stock Exchange and the London Stock Exchange and the costs associated therewith; (v) risks with respect to climate change and global, regional, and local weather conditions, as well as risks related to our targets and goals with respect to climate change and the emission of greenhouse gases and other environmental, social and governance matters, including our ability to meet such targets and goals; (vi) loss contingencies and pending, threatened or future litigation, including with respect to environmental and antitrust related matters; (vii) the level of our indebtedness, including our obligations related to becoming the guarantor of the Euro Medium Term Notes as a result of our acquisition of DS Smith, risks associated with our variable rate debt, and changes in interest rates (including the impact of current elevated interest rate levels); (viii) the impact of global and domestic economic conditions and industry conditions, including with respect to current challenging macroeconomic conditions, inflationary pressures and changes in the cost or availability of raw materials, energy sources and transportation sources, supply chain shortages and disruptions, competition we face, cyclicality and changes in consumer preferences, demand and pricing for our products, and conditions impacting the credit, capital and financial markets; (ix) risks arising from conducting business internationally, domestic and global geopolitical conditions, military conflict (including the Russia/Ukraine conflict, the conflict in the Middle East, the further expansion of such conflicts, and the geopolitical and economic consequences associated therewith), changes in currency exchange rates, including in light of our increased proportion of assets, liabilities and earnings denominated in foreign currencies as a result of our business combination with DS Smith, trade policies (including but not limited to protectionist measures and the imposition of new or increased tariffs as well as the potential impact of retaliatory tariffs and other penalties including retaliatory policies against the United States) and global trade tensions, downgrades in our credit ratings, and/or the credit ratings of banks issuing certain letters of credit, issued by recognized credit rating organizations; (x) the amount of our future pension funding obligations, and pension and healthcare costs; (xi) the costs of compliance, or the failure to comply with, existing, evolving or new environmental (including with respect to climate change and greenhouse gas emissions), tax, trade, labor and employment, privacy, anti-bribery and anti-corruption, and other U.S. and non-U.S. governmental laws, regulations and policies (including but not limited to those in the United Kingdom and European Union); (xii) any material disruption at any of our manufacturing facilities or other adverse impact on our operations due to severe weather, natural disasters, climate change or other causes; (xiii) our ability to realize expected benefits and cost savings associated with restructuring initiatives; (xiv) cybersecurity and information technology risks, including as a result of security breaches and cybersecurity incidents; (xv) our exposure to claims under our agreements with Sylvamo Corporation; (xvi) the qualification of the Sylvamo Corporation spin-off as a tax-free transaction for U.S. federal income tax purposes; (xvii) risks associated with our pursuit of strategic options for our Global Cellulose Fibers business, including the costs and expenses related to a potential transaction, the diversion of management's attention, our ability to identify and attract potential buyers and negotiate definitive transaction documentation, the completion of any such transaction, and the possibility of asset impairment charges arising from or in connection with any such transaction; (xviii) our ability to attract and retain qualified personnel and maintain good employee or labor relations; (xix) our ability to maintain effective internal control over financial reporting; and (xx) our ability to adequately secure and protect our intellectual property rights. These and other factors that could cause or contribute to actual results differing materially from such forward-looking statements can be found in our press releases and reports filed with the U.S. Securities and Exchange Commission. In addition, other risks and uncertainties not presently known to the Company or that we currently believe to be immaterial could affect the accuracy of any forward-looking statements. The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

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**<u>[**Table of Contents**](#i23e23e74ffae4467b99480730e23722f_10)</u>**

**ITEM 3.<u>[QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](#i23e23e74ffae4467b99480730e23722f_103)</u>**

Information relating to quantitative and qualitative disclosures about market risk is shown on pages 50-51 of International Paper's Annual Report, which information is incorporated herein by reference. There have been no material changes in the Company's exposure to market risk since December 31, 2024.

**ITEM 4.<u>[CONTROLS AND PROCEDURES](#i23e23e74ffae4467b99480730e23722f_106)</u>**

***Evaluation of Disclosure Controls and Procedures:***

Disclosure controls and procedures are controls and other procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), is recorded, processed, summarized and reported (and accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure) within the time periods specified in the SEC's rules and forms. As of the end of the period covered by this Form 10-Q, we conducted an evaluation, under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures pursuant to Rules 13a-15 and 15d-15 of the Exchange Act. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective as of June 30, 2025 (the end of the period covered by this Form 10-Q).

***Changes in Internal Control over Financial Reporting:***

As previously disclosed, on January 31, 2025, we completed the acquisition of the entire issued and to be issued share capital of DS Smith. See <u>[Note 8 - Acquisitions](#i23e23e74ffae4467b99480730e23722f_55)</u> to the Condensed Consolidated Financial Statements for additional information. We are in the process of integrating DS Smith into our systems and control environment, including an assessment of DS Smith's internal controls over financial reporting. This ongoing integration process may result in changes in our internal control over financial reporting.

Except as described above, there have been no changes in our internal control over financial reporting during the quarter ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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**<u>[**Table of Contents**](#i23e23e74ffae4467b99480730e23722f_10)</u>**

**<u>[PART II. OTHER INFORMATION](#i23e23e74ffae4467b99480730e23722f_109)</u>**

**ITEM 1.<u>[LEGAL PROCEEDINGS](#i23e23e74ffae4467b99480730e23722f_112)</u>**

A discussion of material developments regarding certain legal proceedings involving the Company occurring in the period covered by this Form 10-Q is found in <u>[Note 13 - Commitments and Contingencies](#i23e23e74ffae4467b99480730e23722f_70)</u> of the <u>[Condensed Notes to the Consolidated Financial Statements](#i23e23e74ffae4467b99480730e23722f_31)</u> in this Form 10-Q, which is incorporated by reference herein. Except as set forth in <u>[Note 13 – Commitments and Contingencies](#i23e23e74ffae4467b99480730e23722f_70)</u> of the <u>[Condensed Notes to the Consolidated Financial Statements](#i23e23e74ffae4467b99480730e23722f_31)</u> and <u>[N](#i23e23e74ffae4467b99480730e23722f_1169)[ote 20](#i23e23e74ffae4467b99480730e23722f_1169)[-](#i23e23e74ffae4467b99480730e23722f_1169)[Subsequent Events](#i23e23e74ffae4467b99480730e23722f_1169)</u> in this Form 10-Q, the Company is not subject to any administrative or judicial proceeding arising under any Federal, State or local provisions that have been enacted or adopted regulating the discharge of materials into the environment or primarily for the purpose of protecting the environment that is likely to result in monetary sanctions of $1 million or more.

**ITEM 1A.<u>[RISK FACTORS](#i23e23e74ffae4467b99480730e23722f_115)</u>**

There have been no material changes from the risk factors disclosed in our Annual Report on Form 10-K (Part I, Item 1A) for the period ended December 31, 2024 and in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 (Part II, Item 1A), other than as described below.

**RISKS RELATED TO LEGAL PROCEEDINGS AND COMPLIANCE COSTS**

***Results of legal proceedings could have a material effect on our consolidated financial results.***

We are a party to various legal, regulatory and governmental proceedings and other related matters, including with respect to antitrust and environmental matters. In addition, we are and may become subject to other loss contingencies, both known and unknown, which may relate to past, present and future facts, events, circumstances and occurrences. Should an unfavorable outcome occur in connection with the legal, regulatory or governmental proceedings or our other loss contingencies or we become subject to any such loss contingencies in the future, there could be a material adverse impact on our financial results. See <u>[Note 13 - Commitments and Contingent Liabilities](#i23e23e74ffae4467b99480730e23722f_70)</u> to the <u>[Condensed Notes to the Consolidated Financial Statements](#i23e23e74ffae4467b99480730e23722f_31)</u> for further information.

For example, we (through both International Paper and our DS Smith subsidiaries operating in Italy) are among a number of companies operating in the paper packaging industry subject to a decision by the Italian Competition Authority concerning anti-competitive behavior in Italy. We are further subject to a number of actual and threatened claims for compensation arising out of or relating to the decision by the Italian Competition Authority. In addition, International Paper has been named as a defendant in a purported class action complaint that alleges civil violation of Sections 1 and 3 of the Sherman Act. The complaint alleges that the defendants, beginning in November 1, 2020 through the time of filing, conspired to fix, raise, maintain, and/or stabilize prices of containerboard products and finished packaging products and seeks to recover treble damages, injunctive relief, attorneys' fees and actual damages.

Given the early stage of the claim and our intention to defend robustly against such claim, it is too early to predict or reasonably estimate the overall outcome or ultimate potential liability (if any) that might be incurred in connection therewith, and there can be no guarantee that the aggregate of possible damages could not have a material impact on our financial condition.

***There are risks associated with our review of strategic options for our Global Cellulose Fibers business, and there is no assurance that this review will result in any transaction or other outcome.***

We are pursuing strategic options for our Global Cellulose Fibers business following our strategic review of the business. There can be no assurance that this process will result in any kind of transaction or other outcome, or, if any transaction or other outcome occurs, the timing or terms thereof. Moreover, our ability to affect any transaction or other outcome may be dependent on a number of factors that may be beyond our control, such as market conditions, industry trends, regulatory approvals, and the availability of financing on favorable terms. In addition, even if this review ultimately results in a transaction or other outcome, there can be no assurance that such transaction or other outcome will have a positive effect on shareholder value. Further, any transaction related to our Global Cellulose Fibers business, changes in the macroeconomic environment or the impact of tariffs could result in asset impairment charges.

There can also be no assurance that this process will not cause the diversion of management's attention, interfere with our ability to retain or attract key personnel, disrupt our business, adversely impact important business relationships, adversely impact our financial results, or expose us to litigation.

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In addition, we may incur significant costs and expenses in connection with this process. It is also possible that speculation and perceived uncertainties regarding any developments related to this review could cause the market price of our common stock to fluctuate significantly or to decline.

**<u>[ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](#i23e23e74ffae4467b99480730e23722f_118)</u>**

**PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS.**

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Period** | **Total Number of Shares Purchased (a)** | **Average Price Paid per Share** | **Total Number of Shares Purchased as Part of a Publicly Announced Plan or Program** | **Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs (in billions)** |
| April 1, 2025 - April 30, 2025 | 14573 | $53.35 |  | $2.96 |
| May 1, 2025 - May 31, 2025 | 3708 | 46.96 |  | 2.96 |
| June 1, 2025 - June 30, 2025 | 467 | 50.14 |  | 2.96 |
| **Total** | 18748 |  |  |  |

---

&nbsp;&nbsp;&nbsp;&nbsp;(a) 18,748 shares were acquired from employees or members of our Board as a result of share withholdings to pay income taxes under the Company's 2024 Long-Term Incentive Compensation Plan (the "2024 LTICP"), approved and effective as of May 13, 2024. The 2024 LTICP replaced the Amended and Restated 2009 Incentive Compensation Plan. During these periods, no shares were purchased under our share repurchase program, which does not have an expiration date. On October 11, 2022, our Board increased the authorization to repurchase shares up to a total of $3.35 billion shares. As of June 30, 2025, approximately $2.96 billion aggregate shares of our common stock remained authorized for repurchase under this Board authorization.

**<u>[ITEM 3. DEFAULTS UPON SENIOR SECURITIES](#i23e23e74ffae4467b99480730e23722f_121)</u>**

Not applicable.

**<u>[ITEM 4. MINE SAFETY DISCLOSURES](#i23e23e74ffae4467b99480730e23722f_124)</u>**

Not applicable.

**<u>[ITEM 5. OTHER INFORMATION](#i23e23e74ffae4467b99480730e23722f_127)</u>**

(a) The Company amends and restates its Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission on February 28, 2025.

*Chief Financial Officer Promoted to New Role*

On February 25, 2025, the Board of Directors (the "Board"), upon recommendation from the Management Development and Compensation Committee (the "Committee") of International Paper Company (the "Company"), appointed Timothy S. Nicholls, 63, as executive vice president and president – DS Smith, an International Paper company, leading our business in Europe, Middle East and Africa ("EMEA"), effective April 1, 2025. This is a newly created role at the Company. In his new role, Mr. Nicholls will play a pivotal role in leading integration efforts and drive growth in the attractive EMEA region. Mr. Nicholls will oversee all operations within the EMEA region, ensure seamless integration into the Company's existing infrastructure, and leverage synergies to enhance operational efficiency and drive strategic initiatives.

Mr. Nicholls brings a wealth of experience and knowledge having served as senior vice president and chief financial officer twice, from 2007 to 2011 and since 2018. Mr. Nicholls previously served as senior vice president - Industrial Packaging of the Americas (2017-2018), senior vice president - Industrial Packaging (2014-2016), senior vice president - Printing and Communications Papers of the Americas (2011-2014), vice president and executive project leader of IP Europe (2007), and vice president and chief financial officer - IP Europe (2005-2006). Mr. Nicholls joined International Paper in 1999 following our acquisition of Union Camp Corporation, where he had worked since 1991. He will continue reporting directly to Andrew K. Silvernail, chief executive officer and chairman of the Board.

The Company has not entered into any agreements with Mr. Nicholls or made any changes to the compensation payable to Mr. Nicholls in connection with his appointment to this new position. As previously disclosed in a Current Report on Form 8-K filed on December 13, 2024, the Committee approved an ordinary course salary increase for Mr. Nicholls in accordance with its customary incentive review practices on December 9, 2024. Additional details on Mr. Nicholls's compensation are set forth in

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the *Compensation Discussion & Analysis* section of the Company's 2024 proxy statement filed with the U.S. Securities and Exchange Commission on April 2, 2024.

There are no arrangements or understandings between Mr. Nicholls and any other persons pursuant to which he was selected as executive vice president and president – DS Smith. There are also no family relationships between Mr. Nicholls and any director or executive officer of the Company, and he has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.

*New Chief Financial Officer Appointed*

Also upon recommendation from the Committee, the Board on February 25, 2025, appointed Lance T. Loeffler, 48, as senior vice president and chief financial officer of the Company, effective April 1, 2025. Mr. Loeffler succeeds Mr. Nicholls in this role. He will report directly to Mr. Silvernail.

Mr. Loeffler joins the Company from Halliburton (NYSE: HAL), provider of services and products to the energy industry, where he most recently served as senior vice president, Middle East and North Africa (2022-2024). Prior to this role, Mr. Loeffler held other positions at Halliburton including executive vice president and chief financial officer (2018-2022), vice president, investor relations (2016-2018) and vice president, corporate development (2014-2016). Prior to his employment with Halliburton, Mr. Loeffler was a director at Deutsche Bank Securities (2010-2014).

The Company entered an employment offer letter dated February 26, 2025 (the "Offer Letter"), with Mr. Loeffler. The Offer Letter has no specified term and Mr. Loeffler's employment with the Company will be on an at-will basis. The material terms of the Offer Letter are summarized below. The summary does not purport to be complete and is qualified in its entirety by reference to the Offer Letter, a copy of which is attached as Exhibit 10.1 and incorporated herein by reference.

*Base Salary and Bonus.* Mr. Loeffler will receive an annual base salary of $850,000 and will be eligible for an annual bonus under the Company's Annual Incentive Plan ("AIP") with a target amount of 100% of his annual base salary. For 2025, Mr. Loeffler will receive a pro-rata portion of his bonus under the AIP, subject to achievement of the applicable performance metrics on the same terms and conditions as the Company's Executive Leadership Team.

*One-Time Inducement Equity Grant.* Mr. Loeffler will receive a one-time, special "inducement grant" of restricted stock units ("RSUs") with a grant date fair market value of $1,700,000 ("2025 Inducement RSU Award"). The target number of RSUs will be determined by dividing $1,700,000 by the Company's closing stock price on the business day immediately preceding the grant date. The RSUs will vest ratably over three years commencing on the first anniversary of the grant date, subject to continued service on each applicable vesting date and will vest in full upon an involuntary termination of Mr. Loeffler's employment by the Company without cause or by Mr. Loeffler for good reason (each, a "Qualifying Termination") or due to Mr. Loeffler's death or disability.

*Long-Term Incentive Plan.* Mr. Loeffler will receive a Long-Term Incentive Plan grant of performance stock units ("PSUs") for 2025 with a grant date fair value of $3,500,000. The target number of PSUs will be determined by utilizing the closing stock price of the business day immediately preceding the grant date. The PSUs will be eligible to vest on the third anniversary of the grant date, subject to achievement of the applicable performance metrics and Mr. Loeffler's continued service on such date.

*Severance Terms*. In the event Mr. Loeffler experiences a Qualifying Termination, he will be entitled to the payments and benefits set forth in the Company's Executive Severance Plan for Tier II Participants, including (i) a lump sum cash severance payment equal to one and a half times the sum of his base salary and target bonus under the AIP, (ii) a pro-rata annual bonus based on actual performance in the year of termination, (iii) health and welfare benefit continuation for a period of 18 months and (iv) outplacement services for a period of 12 months. In addition, in the event Mr. Loeffler's employment is terminated by the Company due to a Qualifying Termination or due to divestiture, death, disability, or retirement after reaching age 65, Mr. Loeffler's (i) outstanding and unvested PSUs will vest pro-rata based on the number of months Mr. Loeffler was in active service during the applicable performance period and subject to the achievement of the applicable performance metrics and (ii) outstanding and unvested RSUs will vest in full.

In the event that Mr. Loeffler experiences a Qualifying Termination, dies, becomes disabled or retires within two years of a change in control of the Company, Mr. Loeffler's cash severance will be two times the sum of his base salary and target AIP and he will receive two years of Company-subsidized health and welfare benefits continuation and outplacement services.

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*Other Benefits.* Mr. Loeffler will be eligible to participate in the benefit programs available to executive officers of the Company, including, without limitation, participation in the Company's 401(k) plan and nonqualified deferred compensation savings plan. Mr. Loeffler will also be provided with the Company's standard relocation benefits.

There are no arrangements or understandings between Mr. Loeffler and any other persons pursuant to which he was selected as chief financial officer. There are also no family relationships between Mr. Loeffler and any director or executive officer of the Company, and he has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.

Except as set forth above, the Company has not entered into any agreements with Mr. Loeffler in connection with his appointment.

For further details, Mr. Loeffler's Employment Offer Letter dated February 26, 2025 is filed as Exhibit 10.3 in Part II, Item 6 (Exhibits) of this Form 10-Q.

(b) Not applicable.

(c) During the quarter ended June 30, 2025, no director or Section 16 officer adopted or terminated any Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements, as defined in Item 408 of Regulation S-K.

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**<u>[ITEM 6. EXHIBITS](#i23e23e74ffae4467b99480730e23722f_130)</u>**

---

| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;10.1\* | <u>[Notice of Termination of Time Sharing Agreement for Andrew K. Silvernail dated May 13, 2025. +](ip-20250630exhibit101.htm)</u> |
| &nbsp;&nbsp;&nbsp;10.2\* | <u>[Time Sharing Agreement dated June 13, 2025 by and between Andrew K Silvernail and International Paper Company. +](ip-20250630exhibit102.htm)</u> |
| &nbsp;&nbsp;&nbsp;10.3\* | <u>[Employment Offer Letter dated February 26, 2025, between International Paper Company and Lance T. Loeffler dated February 26, 2025. +](ip-20250630exhibit103.htm)</u> |
| &nbsp;&nbsp;&nbsp;31.1\* | <u>[Certification of principal executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.](ip-6302025xex311certificat.htm)</u> |
| &nbsp;&nbsp;&nbsp;31.2\* | <u>[Certification of principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.](ip-6302025xex312certificat.htm)</u> |
| &nbsp;&nbsp;&nbsp;32\* | <u>[Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.](ip-6302025xex32certificati.htm)</u> |
| 101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the inline XBRL document. |
| 101.SCH | XBRL Taxonomy Extension Schema. |
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase. |
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase. |
| 101.LAB | XBRL Taxonomy Extension Label Linkbase. |
| 101.PRE | XBRL Extension Presentation Linkbase. |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL, and contained in Exhibit 101). |

---

*\* Filed herewith*

*\*\* Furnished herewith*

*+ Management contract or compensatory plan or arrangement.*

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**<u>[SIGNATURES](#i23e23e74ffae4467b99480730e23722f_133)</u>**

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

---

| | | |
|:---|:---|:---|
| | **INTERNATIONAL PAPER COMPANY<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Registrant)&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** | **INTERNATIONAL PAPER COMPANY<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Registrant)&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** |
| August 7, 2025 | By | /s/ Lance T. Loeffler |
|  |  | Lance T. Loeffler |
|  |  | Senior Vice President and Chief Financial Officer |
| August 7, 2025 | By | /s/ Holly G. Goughnour |
|  |  | Holly G. Goughnour |
|  |  | Vice President and Chief Accounting Officer |

---

## Exhibit 10.1

![image_0.jpg](image_0.jpg)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exhibit 10.1

May 13, 2025

Andrew K. Silvernail

6400 Poplar Avenue

Memphis, TN 38917

RE: Notice of Termination of Time Sharing Agreement

Dear Mr. Silvernail,

This letter serves as notice of termination pursuant to <u>Section 2</u> of that certain Time Sharing Agreement entered into on May 1, 2024 between you and International Paper Company (the "Company"). This termination is effective as of June 14, 2025 (*i.e.,* 30 days from date of this notice of termination).

The decision to terminate is due to the Company's decision to dispose of its corporate aircraft and enter into lease agreements for fractional use of aircraft provided by a third-party service provider. You will continue to have access to aircraft services for business and personal use through a third-party service provider and will be provided with a new Time Sharing Agreement for acceptance on or before June 14, 2025. Consistent with your offer of employment, you remain required to reimburse the Company for the incremental cost to the Company of personal use above $150,000 per year. The value of such use up to $150,000 will continue to result in imputed taxable income to you and will not be grossed up for taxes.

We appreciate your cooperation and understanding in this matter. Should you have any questions or require further clarification, please do not hesitate to contact me.

Sincerely,

/s/ Joseph R. Saab

Joseph R. Saab

Senior Vice President, General Counsel and Corporate Secretary

## Exhibit 10.2

Exhibit 10.2

**<u>TIME SHARING AGREEMENT</u>**

This Time Sharing Agreement (this "Agreement"), is made and entered into this 13<sup>th</sup> day of June, 2025, by and between International Paper Company, a New York corporation (the "Company"), and Andrew K. Silvernail, Chief Executive Officer and Chairman of the Board of Directors of the Company (the "Board"), with a primary residence in Memphis, Tennessee ("Timesharee").

<u>W I T N E S S E T H</u>:

WHEREAS, Company is a registered owner of an undivided percent interest in certain aircraft noted on Schedule A (the "Aircraft") to be used for business travel purposes by employees and non-employee directors of Company in accordance with Part 91 of the Federal Aviation Regulations and Company's policy regarding the use of corporate aircraft; and

WHEREAS, pursuant to a Fractional Program Agreement dated February 27, 2025, between Company and NetJets Aviation, Inc. (the "Manager"), Company employs a management company to manage and maintain the Aircraft with a fully qualified crew; and

WHEREAS, the Aircraft are subject to an Aircraft Lease Agreement dated February 27, 2025, (the "Lease Agreement"), among Company and Manager; and

WHEREAS, Company has the right and lawful authority to enter into time sharing agreements, as provided in §91.501 of the Federal Aviation Regulations ("FARs") to provide the Timesharee with personal travel consistent with the Terms and Conditions of Offer of Employment as Chief Executive Officer letter dated March 14, 2024, by and between the Timesharee and Company (the "Offer Letter"); and

WHEREAS, Section FAR 91-501(b)(10) authorizes fractional owners to enter into time sharing agreements authorized by Section 91-501(b)(6).

WHEREAS, Manager has agreed to make the Aircraft, with flight crew available to Timesharee for Timesharee's personal travel in accordance with the Offer Letter on a non-exclusive time-sharing basis in accordance with §91.501 of the FARs; and

WHEREAS, the Timesharee agrees to reimburse Company for all personal use of the Aircraft as permitted under the FARs and pursuant to the terms of this Agreement.

NOW THEREFORE, Company and Timesharee, declaring their intention to enter into and be bound by this Agreement, and for the good and valuable consideration set forth below, hereby covenant and agree as follows:

1.<u>Provision of Aircraft and Crew</u>. Company agrees to provide to Timesharee the Aircraft and flight crew on a time sharing basis in accordance with the provisions of FAR Part 91, including §§ 91.501(b)(6), 91.501(c)(1) and 91.501(d) of the FARs. Manager shall provide, at its sole expense, qualified flight crew for all flight operations under this Agreement. If Manager is no longer the owner or operator of any of the Aircraft, Schedule A shall be deemed amended to delete any reference to such Aircraft and this Agreement shall be terminated as to such Aircraft but shall remain in full force and effect with respect to each of the other Aircraft identified thereon, if any. No such termination shall affect any of the rights and

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obligations of the parties accrued or incurred prior to such termination. If Manager becomes the owner or operator of any aircraft not listed on Schedule A hereto, Schedule A shall be modified to include such aircraft as an Aircraft covered by this Agreement, and thereafter this Agreement shall remain in full force and effect with respect to such Aircraft and each of the other Aircraft identified thereon, if any.

2.<u>Term</u>. The term of this Agreement (the "Term") shall commence on the date hereof and shall continue until terminated by either party on written notice to the other party, such termination to become effective 30 days from the date of the notice, <u>provided</u> that this Agreement may be terminated immediately upon the termination of the Lease Agreement in accordance with the terms of the Lease Agreement. This Agreement shall terminate immediately in the event that Timesharee is no longer either the Chief Executive Officer or the Chairman of the Board. Notwithstanding the foregoing, any provisions directly or indirectly related to Timesharee's payment obligations for flights under Section 3 completed prior to the date of termination and the limitation of liability provisions in Section 10 shall survive the termination of this Agreement.

3.<u>Reimbursement of Expenses</u>. For each Trip or Round Trip (as such terms are defined below) conducted under this Agreement, Timesharee shall pay Company an amount (as determined by Manager) equal to the actual expenses of operating such Trip (excluding non-occupied legs, or "dead-head" flights, needed by Manager to position the Aircraft for business use), not to exceed the sum of the following expenses as permitted pursuant to FAR 91.501(d), in excess of the amount allowed pursuant to the Offer Letter, as may be amended from time to time by the Board:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Fuel, oil, lubricants, and other additives;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Travel expenses of the crew, including food, lodging, and ground transportation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Hangar and tie-down costs away from the Aircraft's base of operation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Insurance obtained for the specific flight as per Section 8.(b);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)Landing fees, airport taxes, and similar assessments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)Customs, foreign permit, and similar fees directly related to the flight;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)In-flight food and beverages;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)Passenger ground transportation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Flight planning and weather contract services; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)An additional charge equal to one hundred percent (100%) of the expenses listed in subsection (a) above.

The term "Trip" shall mean a personal flight from a departure point to a single destination. A "Round Trip" shall mean a personal flight from a departure point to one destination and back to the same departure point. In the event that Timesharee travels from a departure point to multiple destinations, Manager will provide a separate invoice for each Trip.

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4.<u>Invoicing and Payment</u>. All payments to be made to Company by Timesharee hereunder shall be paid in the manner set forth in this Section 4. Manager will pay, or cause to be paid, all expenses related to the operation of the Aircraft hereunder in the ordinary course. Within 30 days of the end of each Trip or Round Trip, Manager shall provide or cause to be provided to Company and Timesharee an invoice showing all personal use of the Aircraft by Timesharee pursuant to this Agreement during that Trip or Round Trip and a complete accounting detailing all amounts that are payable by Timesharee pursuant to Section 3 for that Trip or Round Trip (plus applicable domestic or international air transportation excise taxes, and any other fees, taxes or charges assessed on passengers by and remitted to a government agency or airport authority). Timesharee shall pay all amounts due under the invoice in a manner reasonably acceptable to Company not later than 30 days after receipt thereof. In the event Manager has not received all supplier invoices for reimbursable charges relating to such Trip or Round Trip prior to such invoicing, Manager shall issue a supplemental invoice(s) for such charge(s) to Company and Timesharee, and Timesharee shall pay each supplemental invoice within 30 days after receipt thereof.

5.<u>Flight Requests</u>. Timesharee shall provide Manager with Trip or Round Trip requests to be undertaken pursuant to this Agreement and proposed flight schedules as far in advance of Timesharee's desired departure as possible, and at least 24 hours prior to Timesharee's planned departure or as may be required by law. The advance notice requirement in this Section 5 may be waived by Manager in its discretion. All Trip or Round Trip requests under this Agreement shall be in accordance with all reasonable policies established by Manager. Trip or Round Trip requests shall be in writing on a form that is provided by Manager to the Timesharee. Manager shall have sole and exclusive authority over the scheduling of the Aircraft. Manager shall not be liable to Timesharee or any other person for loss, injury, or damage occasioned by the delay or failure to furnish the Aircraft and crew pursuant to this Agreement for any reason. In addition to requested schedules and departure times for each Trip or Round Trip, Timesharee shall provide at least the following information for each proposed flight reasonably in advance of the desired departure time as required by Manager or its flight crew:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)desired departure point, destination and date and time of flight;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)names and personal contact information of anticipated passengers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)nature and extent of luggage and/or cargo expected to be carried;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)date and time of return flight, if any; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)any other information concerning the proposed flight that may be pertinent to or required by Manager, its flight crew, or governmental entities.

6.<u>Operational Authority and Control</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Manager shall be responsible for the physical and technical operation of the Aircraft and the safe performance of all flights under this Agreement, and shall retain full authority and control, including exclusive operational control and exclusive possession, command and control of the Aircraft for all flights under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Manager shall furnish, at its expense, a fully qualified flight crew with appropriate credentials to conduct each flight undertaken under this Agreement and included on the insurance policies that Manager is required to maintain hereunder. In accordance with applicable FARs, the qualified flight crew provided by Manager will exercise all required and/or appropriate duties and responsibilities in

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regard to the safety of each flight conducted hereunder. The pilot-in-command shall have absolute discretion in all matters concerning the preparation of the Aircraft for flight and the flight itself, the load carried and its distribution, the decision whether or not a flight shall be undertaken, the route to be flown, the locations at which landings shall be made, and all other matters relating to operation of the Aircraft. Timesharee specifically agrees that the flight crew shall have final and complete authority to delay or cancel any Trip or Round Trip for any reason or condition that in the sole judgment of the pilot-in-command could compromise the safety of the flight, and to take any other action that in the sole judgment of the pilot-in-command is necessitated by considerations of safety. No such action of the pilot-in-command shall create or support any liability to Timesharee or any other person for loss, injury, damage or delay. Manager's operation of the Aircraft hereunder shall be strictly within the guidelines and policies established by Manager and FAR Part 91.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Subject to Aircraft and crew availability, Manager shall use its good faith efforts, consistent with its approved policies, to accommodate Timesharee's needs and avoid conflicts in scheduling. Although every good faith effort shall be made to avoid its occurrence, any flights scheduled under this Agreement are subject to cancellation by either party without incurring liability to the other party. In the event of a cancellation, the canceling party shall provide the maximum notice reasonably practicable.

7.<u>Aircraft Maintenance</u>. Manager shall, at its own expense, cause the Aircraft to be inspected, maintained, serviced, repaired, overhauled, and tested in accordance with FAR Part 91 so that the Aircraft will remain in good operating condition and in a condition consistent with its airworthiness certification and shall take such requirements into account in scheduling the Aircraft hereunder, including but not limited compliance with applicable airworthiness directives and service bulletins. Performance of maintenance, preventive maintenance or inspection shall not be delayed or postponed for the purpose of conducting Trips or Round Trips unless such maintenance or inspection can safely be conducted at a later time in compliance with applicable laws, regulations and requirements, and such delay or postponement is consistent with the sound discretion of the pilot-in-command. In the event that any non-standard maintenance is required during the term and will interfere with Timesharee's requested or scheduled Trips or Round Trips, Manager, or Manager's pilot-in-command, shall notify Timesharee of the maintenance required, the effect on the ability to comply with Timesharee's requested or scheduled Trips or Round Trips and the manner in which the parties will proceed with the performance of such maintenance and conduct of such flight(s). In no event shall Manager be liable to Timesharee or any other person for loss, injury or damage occasioned by the delay or failure to furnish the Aircraft under this Agreement, whether or not maintenance-related.

8.<u>Insurance</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Manager, at its expense, will maintain or cause to be maintained in full force and effect throughout the Term an aviation liability and physical damage insurance policy including: aviation liability insurance against bodily injury and property damage claims arising out of the use of the Aircraft in an amount not less than $400 million for each occurrence; and physical damage insurance for the Aircraft in amounts determined by Manager at its sole discretion. The aviation liability coverage shall include Timesharee as an insured, and include a severability of interest provision providing that the insurance shall apply separately to each insured against whom a claim is made, except as respects the limits of liability. The aviation liability and hull insurance coverage shall include provisions whereby the insurer(s) waive all rights of subrogation they may have or acquire against Timesharee and shall permit the use of the Aircraft by Manager for compensation or hire as provided in §91.501 of the FARs.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Manager shall use reasonable commercial efforts to provide such additional insurance for specific flights under this Agreement as Timesharee may reasonably request. Timesharee acknowledges that any Trips or Round Trips scheduled to areas not currently covered by existing policies may require Manager to purchase additional insurance to comply with applicable regulations, and Manager shall be required to maintain or cause to be maintained such additional insurance. The cost of all flight-specific insurance shall be borne by Timesharee as provided in Section 3(d).

9.<u>Use of Aircraft</u>. Timesharee warrants that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)He has all necessary powers to enter into the transactions contemplated in this Agreement and has taken actions required to authorize and approve this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)He will use the Aircraft under this Agreement for and only for his own business and personal use, including the carriage of his guests, and will not use the Aircraft for the purpose of providing transportation of passengers or cargo for compensation or hire or for common carriage;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)He will not permit as guests on the Aircraft any appointed or elected government official, or any candidates for any such offices.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)He will not permit any lien, security interest or other charge or encumbrance to attach against the Aircraft as a result of his actions or inactions, and shall not attempt to convey, mortgage, assign, lease or in any way alienate the Aircraft or Manager's rights hereunder or create any kind of lien or security interest involving the Aircraft or do anything or take any action that might mature into such a lien; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)During the Term, he will abide by and conform to all such laws, governmental and airport orders, rules, and regulations as shall from time to time be in effect relating in any way to the operation or use of the Aircraft by the lessee under a time sharing arrangement and all applicable policies of Manager.

10.<u>Limitation of Liability</u>. **COMPANY DOES NOT MAKE, NOR SHALL BE DEEMED TO MAKE OR HAVE MADE ANY WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, WRITTEN OR ORAL, WITH RESPECT TO ANY AIRCRAFT TO BE USED HEREUNDER OR ANY ENGINE OR COMPONENT THEREOF INCLUDING, WITHOUT LIMITATION, ANY WARRANTY AS TO DESIGN, COMPLIANCE WITH SPECIFICATIONS, QUALITY OF MATERIALS OR WORKMANSHIP, MERCHANTABILITY, FITNESS FOR ANY PURPOSE, USE OR OPERATION, AIRWORTHINESS, SAFETY, PATENT, TRADEMARK OR COPYRIGHT INFRINGEMENT OR TITLE.** 

**IN NO EVENT SHALL COMPANY BE LIABLE FOR OR HAVE ANY DUTY FOR INDEMNIFICATION OR CONTRIBUTION TO TIMESHAREE, HIS EMPLOYEES, AGENTS OR GUESTS FOR ANY CLAIMED INDIRECT, SPECIAL, CONSEQUENTIAL, OR PUNITIVE DAMAGES, REGARDLESS OF WHETHER IT KNEW OR SHOULD HAVE KNOWN OF THE POSSIBILITY OF SUCH DAMAGE, LOSS OR EXPENSE.** 

The provisions of this Section 10 shall survive the termination or expiration of this Agreement.

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11.<u>Base of Operations</u>. For purposes of this Agreement, the base of operation of the Aircraft is Memphis, Tennessee, provided that such base may be changed at Company's sole discretion upon notice from Company to Timesharee.

12.<u>Notices and Communications</u>. All notices and other communications under this Agreement shall be in writing (except as permitted in Section 5) and shall be given (and shall be deemed to have been duly given upon receipt or refusal to accept receipt) by personal delivery, by electronic mail (with a simultaneous confirmation copy sent by first class mail properly addressed and postage prepaid), or by a reputable overnight courier service, addressed as follows:

If to the Company:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;International Paper Company

6400 Poplar Avenue<br>Memphis, TN 38197<br>Attn: Joseph R. Saab, Senior Vice President, General Counsel and Corporate Secretary

E-mail: joseph.saab@ipaper.com

If to Timesharee:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Andrew K. Silvernail, Chief Executive Officer

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;International Paper Company<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6400 Poplar Avenue<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Memphis, TN 38197

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E-mail: andy.silvernail@ipaper.com

Or, to such other person or address as either party may from time to time designate in writing to the other party.

13.<u>Entire Agreement</u>. This Agreement constitutes the entire understanding between the parties with respect to its subject matter, and there are no representations, warranties, rights, obligations, liabilities, conditions, covenants, or agreements relating to such subject matter that are not expressly set forth herein. There are no third-party beneficiaries of this Agreement.

14.<u>Further Acts</u>. Company and Timesharee shall from time to time perform such other and further acts and execute such other and further instruments as may be required by law or may be reasonably necessary (i) to carry out the intent and purpose of this Agreement, and (ii) to establish, maintain and protect the respective rights and remedies of the other party.

15.<u>Successors and Assigns</u>. Timesharee shall not have the right to assign, transfer or pledge this Agreement. This Agreement shall be binding on the parties hereto and their respective heirs, executors, administrators, successors and assigns, and shall inure to the benefit of the parties hereto, and, except as otherwise provided herein, their respective heirs, executors, administrators, other legal representatives, successors and permitted assigns.

16.<u>Taxes</u>. Timesharee shall be responsible for paying, and Company shall be responsible for collecting from Timesharee and paying over to the appropriate authorities, all applicable Federal excise taxes imposed under IRC §4261 and all sales, use and other excise taxes imposed by any authority in connection with the use of the Aircraft by Timesharee hereunder.

17.<u>Governing Law and Consent to Jurisdiction</u>. This Agreement shall be governed by the laws of the State of Tennessee, without regard to its choice of law principles. The parties hereby consent and agree to

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submit to the exclusive jurisdiction and venue of any state or federal court in Memphis, Tennessee in any proceedings hereunder, and each hereby waives any objection to any such proceedings based on improper venue or forum non-conveniens or similar principles. The parties hereto hereby further consent and agree to the exercise of such personal jurisdiction over them by such courts with respect to any such proceedings, waive any objection to the assertion or exercise of such jurisdiction and consent to process being served in any such proceedings in the manner provided for the giving of notices hereunder.

18.<u>Severability</u>. If any provision of this Agreement is held to be illegal, invalid or unenforceable, the legality, validity and enforceability of the remaining provisions shall not be affected or impaired.

19.<u>Amendment or Modification</u>. This Agreement may be amended, modified or terminated only in writing duly executed by the parties hereto.

20.<u>Counterparts</u>. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, and all of which shall constitute one and the same Agreement, binding on all the parties notwithstanding that all the parties are not signatories to the same counterpart. Each party may transmit its signature by facsimile, and any faxed counterpart of this Agreement shall have the same force and effect as a manually-executed original.

21.<u>Truth-in-Leasing Compliance</u>. Company, on behalf of Timesharee, shall (i) deliver a copy of this Agreement to the Federal Aviation Administration, Aircraft Registration Branch, Attn: Technical Section, P.O. Box 25724, Oklahoma City, Oklahoma 73125 within 24 hours of its execution, (ii) notify the appropriate Flight Standards District Office at least 48 hours prior to the first flight under this Agreement of the registration number of the Aircraft, and the location of the airport of departure and departure time for such flight, and (iii) carry a copy of this Agreement onboard the Aircraft at all times when the Aircraft is being operated under this Agreement.

22.<u>TRUTH-IN-LEASING STATEMENT PURSUANT TO SECTION 91.23 OF THE FEDERAL AVIATION REGULATIONS</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)**THE AIRCRAFT NOTED ON SCHEDULE A HAVE BEEN MAINTAINED AND INSPECTED UNDER FAR PART 91.490(f)(3) AND PART 135 DURING THE 12 MONTH PERIOD PRECEDING THE DATE OF THIS LEASE.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)**COMPANY CERTIFIES THAT (BASED ON THE REPRESENTATION OF MANAGER OF THE AIRCRAFT) THAT EACH OF THE AIRCRAFT NOTED ON SCHEDULE A IS IN COMPLIANCE WITH ALL APPLICABLE MAINTENANCE AND INSPECTION REQUIREMENTS FOR ALL OPERATIONS TO BE CONDUCTED UNDER THE LEASE AGREEMENT.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)**COMPANY AGREES, CERTIFIES AND ACKNOWLEDGES, AS EVIDENCED BY ITS SIGNATURE BELOW, THAT WHENEVER ANY OF THE AIRCRAFT IS OPERATED UNDER THIS AGREEMENT, COMPANY SHALL BE KNOWN AS, CONSIDERED, AND SHALL IN FACT BE THE** RESPONSIBLE FOR OPERATIONAL CONTROL OF THE AIRCRAFT IDENTIFIED AND TO BE OPERATED UNDER THIS LEASE. EACH PARTY CERTIFIES THAT IT UNDERSTANDS ITS RESPECTIVE RESPONSIBILITIES, IF ANY, FOR COMPLIANCE WITH APPLICABLE FEDERAL AVIATION REGULATIONS. I, THE UNDERSIGNED, JOY N. ROMAN, AS SENIOR VICE PRESIDENT, CHIEF PEOPLE AND STRATEGY OFFICER OF COMPANY, CERTIFY THAT COMPANY IS RESPONSIBLE FOR

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OPERATIONAL CONTROL OF THE AIRCRAFT FOR OPERATIONS TO BE CONDUCTED UNDER THIS LEASE AND THAT IT UNDERSTANDS ITS RESPONSIBILITIES FOR COMPLIANCE WITH APPLICABLE FEDERAL AVIATION REGULATIONS.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)**THE PARTIES UNDERSTAND THAT AN EXPLANATION OF FACTORS BEARING ON OPERATIONAL CONTROL AND PERTINENT FEDERAL AVIATION REGULATIONS BEARING ON OPERATIONAL CONTROL CAN BE OBTAINED FROM THE NEAREST FAA FLIGHT STANDARDS DISTRICT OFFICE**.

[Remainder of page intentionally left blank]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on the day and year first above written. The persons signing below warrant their authority to sign.

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| | | | | |
|:---|:---|:---|:---|:---|
| INTERNATIONAL PAPER COMPANY | INTERNATIONAL PAPER COMPANY | INTERNATIONAL PAPER COMPANY |  |  |
|  |  | /s/ Joy N. Roman |  | /s/ Andrew K. Silvernail |
| By: |  |  | By: |  |
|  | Name: | <br>Joy N. Roman  |  | <br>Name: Andrew K. Silvernail |
|  | Title: | Senior Vice President, Chief People and Strategy Officer |  | Title: Chairman of the Board and Chief Executive Officer |

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**<u>A legible copy of this Agreement shall be kept in the Aircraft for all operations conducted hereunder.</u>** 

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SCHEDULE A

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| | | | |
|:---|:---|:---|:---|
| <u>Type of Aircraft</u> | <u>U.S. Registration Number</u> | <u>Percentage Interest</u> | <u>Manufacturer Serial Number</u> |
| Leased 2013 2025 Bombardier Inc BD-700-1A11 (Global 5500) | N109QS | 18.75 | 9589 |
| Leased Textron Aviation Inc. 680A (Citation Latitude) temporarily on a 2015 Embraer Executive Aircraft, Inc. EMB-505 (Phenom 300)\* *the corresponding information is for the temporary Phenom 300* | N371QS | 25% | 50500279 |
| Leased 2019 Embraer Executive Aircraft, Inc. EMB-505 (Phenom 300E) | N432QS | 37.5% | 50500508 |

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## Exhibit 10.3

![image_0a.jpg](image_0a.jpg)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Exhibit 10.3**

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| | |
|:---|:---|
| **ANDY SILVERNAIL**<br>CHIEF EXECUTIVE OFFICER<br>AND CHAIRMAN OF THE BOARD | 6400 POPLAR AVENUE <br>MEMPHIS, TN 38197<br>**T** 901-419-7206 |

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February 24, 2025

Mr. Lance T. Loeffler

Dear Lance:

On behalf of International Paper, I am pleased to extend an offer of employment to you for the position of Senior Vice President, Chief Financial Officer at a salary of **$850,000** per year, paid once per month at **$70,833** per pay period. You will also receive five (5) weeks of vacation upon your start date.

You will receive a one-time 2025 Inducement Restricted Stock Unit Award with a grant date fair market value of $1,700,000 to be granted as soon as administratively practical following your start date. The target number of units will be determined by dividing $1,700,000 by the closing stock price of the business day immediately preceding the grant date. The award will be earned ratably over three years commencing on the first anniversary of the grant, subject to continued service, with accelerated vesting upon an involuntary termination without cause, voluntary termination for good reason<sup>1</sup>, death, or disability. <br>

You will be eligible to participate in International Paper's short-term cash incentive plan, the Annual Incentive Plan (AIP). The 2025 annual target award for your position is **$850,000**. The actual award is determined at the end of each year based on company performance and your individual performance. Your eligibility for an award, as well as the exact amount, will be reviewed each year by the Management Development and Compensation Committee with a determination made based on market positioning, individual and company performance and other factors deemed relevant, all in a timing and manner consistent with other members of the Executive Leadership Team. The 2025 AIP goals will be approved in 2025 and the final earned award will be paid in February 2026. For 2025, you will receive a pro-rata portion of the AIP, subject to performance metrics on the same terms and conditions as the International Paper Executive Leadership Team.

You also will be eligible to participate in International Paper's Long-Term Incentive Plan (LTIP), our long-term, equity-based incentive compensation plan. For 2025, you will receive a grant of Performance Stock Units (PSUs) with a grant date fair value of **$3,500,000,** subject to performance metrics on the same terms and conditions as the Executive Leadership Team. This

<sup>1</sup> *As defined in Change-in-Control agreement.* 

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Lance Loeffler

Offer Letter

February 24, 2025

grant will be awarded as soon as administratively practical following your start date. The target number of units will be determined utilizing the closing stock price of the business day immediately preceding the grant date. &nbsp;&nbsp;&nbsp;&nbsp;

You will be provided with current employee relocation benefits in accordance with International Paper's applicable relocation practices.

In the event of a qualifying termination, which includes involuntary termination without cause and voluntary termination for good reason, and subject to your execution and delivery of a release of claims in the form customarily used by the International Paper (the "Release Condition"), you will be entitled to receive a lump sum severance payment equal to 1.5 times the sum of your then current base salary and target AIP opportunity for the then applicable plan year. You shall also receive (i) a pro-rated bonus for your services in the year of termination, based on actual performance, as determined in accordance with the applicable terms and conditions of the AIP for such plan year (other than any continued service obligation), with actual performance determined in a manner no less favorable than that applicable to members of International Paper's Executive Leadership Team generally and with any subjective or individual performance metrics deemed fully satisfied, (ii) health and welfare benefit plan continuation for a period of 18 months following your termination, on the same terms and conditions (including employer subsidy) as though you continued to be employed and (iii) outplacement services in accordance with the our practices for senior executives. Notwithstanding the foregoing, in the event that your employment is terminated with International Paper upon or within two years following the occurrence of a Change in Control by International Paper without Cause or by you voluntarily for Good Reason (as each such term is defined in our form of Change in Control Agreement for senior officers), and subject to your compliance with the Release Condition, you shall receive a lump sum severance payment equal to 2 times the sum of your then current base salary and target AIP opportunity for the applicable plan year, and health and welfare benefit plan continuation for a period of two years following your termination of employment. To the extent that any such health or welfare benefit continuation cannot be provided under applicable law or without a substantial penalty to International Paper and/or its affiliates or the other participants in the applicable plan, program or arrangement, International Paper shall either provide you with a substantially equivalent benefit or pay you an amount equal to the cost of providing such coverage, without any associated tax gross-up.

<br>In the event of your termination of employment for any reason, treatment of any outstanding equity awards (including with respect to a termination occurring following a Change in Control of International Paper, as defined in the immediately preceding paragraph) will be determined in accordance with the applicable terms and conditions of the applicable award, which will be the same as applies generally to awards to other members of the our Executive Leadership Team, *except* to the extent specifically provided above with respect to the 2025 Inducement Restricted Stock Unit Award.

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Lance Loeffler

Offer Letter

February 24, 2025

You will also be subject to such share ownership requirements established by the Board or the MDCC, as shall be in effect from time to time. Currently, the share ownership requirement for a Senior Vice President is ownership of shares of the International Paper common stock having a market value equal to three times your annual base salary, as in effect from time to time.

This offer of employment is contingent upon (i) the Management Development and Compensation Committee approving your compensation package; (ii) the Board of Directors, upon recommendation from the Governance Committee, appointing you as a Section 16 officer and Executive Officer of the Company and (ii) successful completion of a drug screen, background investigation, and the verification of your eligibility for employment, and (iii) your willingness to sign both a non-compete and non-solicitation agreement.

All new employees are required by federal law to complete an I-9 Employment Eligibility Verification Form. To comply with this requirement, International Paper participates in the federal E-Verify program, which is an electronic system established by the Department of Homeland Security and the Social Security Administration to verify identity and employment eligibility. Upon employment, you will receive an e-mail from the company's external vendor, Sterling Info Systems, Inc., with a personal login, password, and instructions that will enable you to complete Section 1 of the I-9 Form.

You must use E-Verify to complete Section 1 of the I-9 form on-line before your start date, or on your first day of employment. On your first day of work but no later than three days after you start, you will need to present originals of acceptable documentation (e.g., U.S. passport, permanent resident alien card, drivers' license) to verify your identity and eligibility to work in the United States. A complete list of acceptable documents will be provided to you with the I-9 Form.

You and International Paper agree that this offer (together with the other agreements referred to herein) constitutes the entire agreement and supersedes all prior agreements or understandings, whether oral or written, between you and International Paper with respect to this offer. Any modifications to this offer must be in writing and signed by you and an authorized employee or agent of International Paper. This offer may be signed in counterparts with the same effect as if the signatures hereto and thereto were upon the same instrument. This offer may be transmitted and/or signed by facsimile, digital, or electronic transmission and/or signature. This offer is governed by and will be construed in accordance with the laws of the State of Tennessee.

Please take the time to review this offer Letter and address any questions you may have to me. To confirm your acceptance of our offer, please sign the original copy of this letter and return it to me by February 26, 2025. Please retain a copy of this offer for your files.

------

Lance Loeffler

Offer Letter

February 24, 2025

I am delighted that you are considering employment with International Paper, and I believe that you will find this opportunity to work with us to be personally and professionally rewarding.

Sincerely,

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| |
|:---|
| /s/ Andy Silvernail |
| Andy Silvernail<br>Chief Executive Officer<br>and Chairman Of The Board |

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**Enclosures:**

IP Current Employee Relocation Policy August 2023

Benefits Overview

Healthcare Guide

2025 Rates and Contributions

<u>/s/ Lance T. Loeffler</u>

Confirmation of Acceptance &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Date February 26, 2025

Lance T. Loeffler

## Exhibit 31.1

**Exhibit 31.1** 

**CERTIFICATION** 

I, Andrew K. Silvernail, certify that:

1. I have reviewed this quarterly report on Form 10-Q of International Paper Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| |
|:---|
| August 7, 2025 |
| /s/ Andrew K. Silvernail |
| Andrew K. Silvernail |
| Chairman of the Board and Chief Executive Officer |

---

## Exhibit 31.2

**Exhibit 31.2** 

**CERTIFICATION** 

I, Lance T. Loeffler, certify that:

1. I have reviewed this quarterly report on Form 10-Q of International Paper Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| |
|:---|
| August 7, 2025 |
| /s/ Lance T. Loeffler |
| Lance T. Loeffler |
| Senior Vice President and Chief Financial Officer |

---

## Ex-32

**Exhibit 32** 

**CERTIFICATION PURSUANT TO** 

**18 U.S.C. SECTION 1350,** 

**AS ADOPTED PURSUANT TO** 

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002** 

The certification set forth below is being submitted in connection with the Quarterly Report of International Paper Company (the "Company") on Form 10-Q for the quarterly period ended June 30, 2025 for the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 (the "Exchange Act") and Section 1350 of Chapter 63 of Title 18 of the United States Code. Andrew K. Silvernail, Chief Executive Officer of the Company, and Lance T. Loeffler, Chief Financial Officer of the Company, each certify that, to the best of his or her knowledge:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| |
|:---|
| /s/ Andrew K. Silvernail |
| Andrew K. Silvernail |
| Chairman of the Board and Chief Executive Officer |
| August 7, 2025 |
| /s/ Lance T. Loeffler |
| Lance T. Loeffler |
| Senior Vice President and Chief Financial Officer |
| August 7, 2025 |

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