Document
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Table of Contents

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, 2019
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period From              to             
 _________________________________________
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
(I.R.S. Employer
incorporation of organization)
Identification No.)
 
 
6400 Poplar Avenue, Memphis, TN
38197
(Address of principal executive offices)
(Zip Code)
Registrant’s telephone number, including area code: (901419-7000
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
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.    Yes  ☒    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).    Yes  ☒   No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting 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).    Yes  ¨    No  
The number of shares outstanding of the registrant’s common stock, par value $1.00 per share, as of July 26, 2019 was 392,836,359.


Table of Contents

INDEX
 
 
 
PAGE NO.
 
 
 
 
 
 
 
 
 
 
Condensed Consolidated Statement of Operations - Three Months and Six Months Ended June 30, 2019 and 2018
 
 
 
 
Condensed Consolidated Statement of Comprehensive Income - Three Months and Six Months Ended June 30, 2019 and 2018
 
 
 
 
Condensed Consolidated Balance Sheet - June 30, 2019 and December 31, 2018
 
 
 
 
Condensed Consolidated Statement of Cash Flows - Six Months Ended June 30, 2019 and 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Table of Contents

PART I. FINANCIAL INFORMATION
 
ITEM 1.
INTERNATIONAL PAPER COMPANY
Condensed Consolidated Statement of Operations
(Unaudited)
(In millions, except per share amounts) 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2019
 
2018
 
2019
 
2018
Net Sales
$
5,667

 
$
5,833

 
$
11,310

 
$
11,454

Costs and Expenses
 
 
 
 
 
 
 
Cost of products sold
3,901

 
3,922

 
7,830

 
7,870

Selling and administrative expenses
402

 
451

 
815

 
872

Depreciation, amortization and cost of timber harvested
321

 
330

 
636

 
655

Distribution expenses
384

 
403

 
773

 
769

Taxes other than payroll and income taxes
43

 
42

 
86

 
86

Restructuring and other charges, net

 
26

 

 
48

Net (gains) losses on sales and impairments of businesses
152

 

 
145

 

Interest expense, net
122

 
133

 
255

 
268

Non-operating pension expense
8

 
36

 
18

 
40

Earnings (Loss) From Continuing Operations Before Income Taxes and Equity Earnings
334

 
490

 
752

 
846

Income tax provision (benefit)
128

 
130

 
234

 
219

Equity earnings (loss), net of taxes
80

 
70

 
194

 
165

Earnings (Loss) From Continuing Operations
286

 
430

 
712

 
792

Discontinued operations, net of taxes

 
(23
)
 

 
345

Net Earnings (Loss)
286

 
407

 
712

 
1,137

Less: Net earnings (loss) attributable to noncontrolling interests
(6
)
 
2

 
(4
)
 
3

Net Earnings (Loss) Attributable to International Paper Company
$
292

 
$
405

 
$
716

 
$
1,134

Basic Earnings (Loss) Per Share Attributable to International Paper Company Common Shareholders
 
 
 
 
 
 
 
Earnings (loss) from continuing operations
$
0.74

 
$
1.03

 
$
1.80

 
$
1.91

Discontinued operations, net of taxes

 
(0.05
)
 

 
0.83

Net earnings (loss)
$
0.74

 
$
0.98

 
$
1.80

 
$
2.74

Diluted Earnings (Loss) Per Share Attributable to International Paper Company Common Shareholders
 
 
 
 
 
 
 
Earnings (loss) from continuing operations
$
0.73

 
$
1.02

 
$
1.78

 
$
1.88

Discontinued operations, net of taxes

 
(0.05
)
 

 
0.83

Net earnings (loss)
$
0.73

 
$
0.97

 
$
1.78

 
$
2.71

Average Shares of Common Stock Outstanding – assuming dilution
398.2

 
417.7

 
401.4

 
418.8

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

1

Table of Contents

INTERNATIONAL PAPER COMPANY
Condensed Consolidated Statement of Comprehensive Income
(Unaudited)
(In millions)
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2019
 
2018
 
2019
 
2018
Net Earnings (Loss)
$
286

 
$
407

 
$
712

 
$
1,137

Other Comprehensive Income (Loss), Net of Tax:
 
 
 
 
 
 
 
Amortization of pension and post-retirement prior service costs and net loss:
 
 
 
 
 
 
 
U.S. plans
40

 
85

 
81

 
151

Change in cumulative foreign currency translation adjustment
61

 
(422
)
 
73

 
(380
)
Net gains/losses on cash flow hedging derivatives:
 
 
 
 
 
 
 
Net gains (losses) arising during the period
4

 
(18
)
 
4

 
(21
)
Reclassification adjustment for (gains) losses included in net earnings (loss)

 
2

 
1

 

Total Other Comprehensive Income (Loss), Net of Tax
105

 
(353
)
 
159

 
(250
)
Comprehensive Income (Loss)
391

 
54

 
871

 
887

Net (earnings) loss attributable to noncontrolling interests
6

 
(2
)
 
4

 
(3
)
Other comprehensive (income) loss attributable to noncontrolling interests

 
2

 

 
2

Comprehensive Income (Loss) Attributable to International Paper Company
$
397

 
$
54

 
$
875

 
$
886

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

2

Table of Contents

INTERNATIONAL PAPER COMPANY
Condensed Consolidated Balance Sheet
(In millions)
 
June 30,
2019
 
December 31,
2018
 
(unaudited)
 
 
Assets
 
 
 
Current Assets
 
 
 
Cash and temporary investments
$
787

 
$
589

Accounts and notes receivable, net
3,477

 
3,521

Contract assets
399

 
395

Inventories
2,224

 
2,241

Assets held for sale
286

 

Other current assets
215

 
250

Total Current Assets
7,388

 
6,996

Plants, Properties and Equipment, net
12,962

 
13,067

Forestlands
405

 
402

Investments
1,646

 
1,648

Financial Assets of Variable Interest Entities (Note 16)
7,079

 
7,070

Goodwill
3,441

 
3,374

Right of Use Assets
408

 

Deferred Charges and Other Assets
1,018

 
1,019

Total Assets
$
34,347

 
$
33,576

Liabilities and Equity
 
 
 
Current Liabilities
 
 
 
Notes payable and current maturities of long-term debt
$
676

 
$
639

Accounts payable
2,498

 
2,413

Accrued payroll and benefits
404

 
535

Liabilities held for sale
250

 

Other current liabilities
1,221

 
1,107

Total Current Liabilities
5,049

 
4,694

Long-Term Debt
10,050

 
10,015

Nonrecourse Financial Liabilities of Variable Interest Entities (Note 16)
6,302

 
6,298

Deferred Income Taxes
2,624

 
2,600

Pension Benefit Obligation
1,694

 
1,762

Postretirement and Postemployment Benefit Obligation
257

 
264

Long-Term Lease Obligations
281

 

Other Liabilities
591

 
560

Equity
 
 
 
Common stock, $1 par value, 2019 – 448.9 shares and 2018 – 448.9 shares
449

 
449

Paid-in capital
6,229

 
6,280

Retained earnings
8,302

 
7,465

Accumulated other comprehensive loss
(4,870
)
 
(4,500
)
 
10,110

 
9,694

Less: Common stock held in treasury, at cost, 2019 – 55.0 shares and 2018 – 48.3 shares
2,628

 
2,332

Total International Paper Shareholders’ Equity
7,482

 
7,362

Noncontrolling interests
17

 
21

Total Equity
7,499

 
7,383

Total Liabilities and Equity
$
34,347

 
$
33,576

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

3

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INTERNATIONAL PAPER COMPANY
Condensed Consolidated Statement of Cash Flows
(Unaudited)
(In millions)
 
Six Months Ended
June 30,
 
2019
 
2018
Operating Activities
 
 
 
Net earnings (loss)
$
712

 
$
1,137

Depreciation, amortization and cost of timber harvested
636

 
655

Deferred income tax provision (benefit), net
50

 
196

Restructuring and other charges, net

 
48

Net gain on transfer of North American Consumer Packaging business

 
(488
)
Net (gains) losses on sales and impairments of businesses
145

 

Equity method dividends received
251

 
122

Equity (earnings) losses, net
(194
)
 
(165
)
Periodic pension expense, net
47

 
115

Other, net
55

 
57

Changes in current assets and liabilities
 
 
 
Accounts and notes receivable
48

 
(333
)
Contract assets
(4
)
 
(17
)
Inventories
48

 
(26
)
Accounts payable and accrued liabilities
2

 
142

Interest payable
1

 
2

Other
3

 
19

Cash Provided By (Used For) Operations
1,800

 
1,464

Investment Activities
 
 
 
Invested in capital projects
(628
)
 
(929
)
Acquisitions, net of cash acquired
(99
)
 

Net settlement on transfer of North American Consumer Packaging business

 
(40
)
Proceeds from divestitures, net of cash divested
17

 

Proceeds from sale of fixed assets
4

 
2

Other
(9
)
 
3

Cash Provided By (Used For) Investment Activities
(715
)
 
(964
)
Financing Activities
 
 
 
Repurchases of common stock and payments of restricted stock tax withholding
(460
)
 
(331
)
Issuance of debt
444

 
411

Reduction of debt
(452
)
 
(73
)
Change in book overdrafts
(14
)
 
(24
)
Dividends paid
(398
)
 
(393
)
Net debt tender premiums paid
4

 

Cash Provided By (Used For) Financing Activities
(876
)
 
(410
)
Cash Included in Assets Held for Sale
(21
)
 

Effect of Exchange Rate Changes on Cash
10

 
(35
)
Change in Cash and Temporary Investments
198

 
55

Cash and Temporary Investments
 
 
 
Beginning of period
589

 
1,018

End of period
$
787

 
$
1,073


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

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Table of Contents

INTERNATIONAL PAPER COMPANY
Condensed Notes to Consolidated Financial Statements
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION

The accompanying unaudited condensed 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 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. It is suggested that these condensed financial statements be read 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, 2018, which have previously been filed with the Securities and Exchange Commission.

NOTE 2 - RECENT ACCOUNTING DEVELOPMENTS

Recently Adopted Accounting Pronouncements

Leases

In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)." The Company adopted the provisions of this guidance effective January 1, 2019, using the modified retrospective optional transition method. Therefore, the standard was applied beginning January 1, 2019 and prior periods were not restated. The adoption of the standard did not result in a cumulative-effect adjustment to the opening balance of Retained earnings. The Company elected the package of practical expedients and implemented internal controls and system functionality to enable the preparation of financial information upon adoption.
The adoption of the new standard resulted in the recognition of a right of use asset and short-term and long-term liabilities recorded on the Company's consolidated balance sheet related to operating leases. Accounting for finance leases remained substantially unchanged. In addition, the adoption of the standard did not have a material impact on the Company's results of operations or cash flows.

Comprehensive Income

In February 2018, the FASB issued ASU 2018-02, "Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income." This guidance gives entities the option to reclassify stranded tax effects caused by the newly-enacted U.S. Tax Cuts and Jobs Act from accumulated other comprehensive income to retained earnings. As a result, the Company adopted this guidance effective January 1, 2019, and recorded a net increase to opening Retained earnings and a decrease to opening Accumulated other comprehensive income of $529 million, due to the cumulative impact of adopting the new guidance.

Recently Issued Accounting Pronouncements Not Yet Adopted

Intangibles

In August 2018, the FASB issued ASU 2018-15, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract." The guidance aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license). The accounting for the service element of a hosting arrangement that is a service contract is not affected by the amendments in this guidance. This guidance is effective for annual reporting periods beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the provisions of this guidance.

In January 2017, the FASB issued ASU 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment." This guidance eliminates the requirement to calculate the implied fair value of goodwill under Step 2 of today's goodwill impairment test to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit's carrying amount over its fair value. This guidance should be applied prospectively and is effective for annual reporting periods beginning after December 15, 2019, for any impairment test performed in 2020. Early adoption is

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permitted for annual and interim goodwill impairment testing dates after January 1, 2017. The Company is currently evaluating the provisions of this guidance; however, we do not anticipate adoption having a material impact on the financial statements.

Financial Instruments - Credit Losses

In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments." This guidance replaces the current incurred loss impairment method with a method that reflects expected credit losses. This guidance is effective for annual reporting periods beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. This guidance should be applied using the modified-retrospective approach. In May 2019, the FASB issued ASU 2019-05, "Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief." The amendments in this Update provide entities with targeted transition relief that is intended to increase comparability of financial statement information for some entities that otherwise would have measured similar financial instruments using different measurement methodologies. The amendments also decrease costs for some financial statement preparers while providing financial statement users with decision-useful information. For entities that have not yet adopted the amendments in Update 2016-13, the effective date and transition methodology for the amendments in this Update are the same as in Update 2016-13. The Company is currently evaluating the provisions of this guidance and plans to adopt this guidance and the related amendments on its effective date of January 1, 2020, by recognizing the cumulative effect of initially applying the new standard as an adjustment to the opening balance of Retained earnings.

NOTE 3 - REVENUE RECOGNITION

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

A geographic disaggregation of revenues across our company segmentation in the following tables provide information to assist in evaluating the nature, timing and uncertainty of revenue and cash flows and how they may be impacted by economic factors.
 
 
Three Months Ended June 30, 2019
In millions
 
Industrial Packaging
 
Global Cellulose Fibers
 
Printing Papers
 
Corporate and Inter-segment Sales
 
Total
Primary Geographical Markets (a)
 
 
 
 
 
 
 
 
 
 
United States
 
$
3,205

 
$
551

 
$
474

 
$
58

 
$
4,288

EMEA
 
420

 
64

 
341

 
(5
)
 
820

Pacific Rim and Asia
 
12

 
46

 
61

 
2

 
121

Americas, other than U.S.
 
227

 

 
212

 
(1
)
 
438

Total
 
$
3,864

 
$
661

 
$
1,088

 
$
54

 
$
5,667

 
 
 
 
 
 
 
 
 
 
 
Operating Segments
 
 
 
 
 
 
 
 
 
 
North American Industrial Packaging
 
$
3,414

 
$

 
$

 
$

 
$
3,414

EMEA Industrial Packaging
 
331

 

 

 

 
331

Brazilian Industrial Packaging
 
58

 

 

 

 
58

European Coated Paperboard
 
92

 

 

 

 
92

Global Cellulose Fibers
 

 
661

 

 

 
661

North American Printing Papers
 

 

 
486

 

 
486

Brazilian Papers
 

 

 
240

 

 
240

European Papers
 

 

 
321

 

 
321

Indian Papers
 

 

 
53

 

 
53

Intra-segment Eliminations
 
(31
)
 

 
(12
)
 

 
(43
)
Corporate & Inter-segment Sales
 


 

 


 
54

 
54

Total
 
$
3,864

 
$
661

 
$
1,088

 
$
54

 
$
5,667




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

 
 
Six Months Ended June 30, 2019
In millions
 
Industrial Packaging
 
Global Cellulose Fibers
 
Printing Papers
 
Corporate and Inter-segment Sales
 
Total
Primary Geographical Markets (a)
 
 
 
 
 
 
 
 
 
 
United States
 
$
6,351

 
$
1,121

 
$
962

 
$
118

 
$
8,552

EMEA
 
848

 
145

 
671

 
(7
)
 
1,657

Pacific Rim and Asia
 
30

 
84

 
120

 
6

 
240

Americas, other than U.S.
 
467

 

 
400

 
(6
)
 
861

Total
 
$
7,696

 
$
1,350

 
$
2,153

 
$
111

 
$
11,310

 
 
 
 
 
 
 
 
 
 
 
Operating Segments
 
 
 
 
 
 
 
 
 
 
North American Industrial Packaging
 
$
6,790

 
$

 
$

 
$

 
$
6,790

EMEA Industrial Packaging
 
670

 

 

 

 
670

Brazilian Industrial Packaging
 
115

 

 

 

 
115

European Coated Paperboard
 
183

 

 

 

 
183

Global Cellulose Fibers
 

 
1,350

 

 

 
1,350

North American Printing Papers
 

 

 
982

 

 
982

Brazilian Papers
 

 

 
455

 

 
455

European Papers
 

 

 
630

 

 
630

Indian Papers
 

 

 
106

 

 
106

Intra-segment Eliminations
 
(62
)
 

 
(20
)
 

 
(82
)
Corporate & Inter-segment Sales
 


 

 

 
111

 
111

Total
 
$
7,696

 
$
1,350

 
$
2,153

 
$
111

 
$
11,310


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



7

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Three Months Ended June 30, 2018
In millions
 
Industrial Packaging
 
Global Cellulose Fibers
 
Printing Papers
 
Corporate & Intersegment
 
Total
Primary Geographical Markets (a)
 
 
 
 
 
 
 
 
 
 
United States
 
$
3,336

 
$
573

 
$
477

 
$
53

 
$
4,439

EMEA
 
427

 
70

 
324

 
(4
)
 
817

Pacific Rim and Asia
 
36

 
48

 
59

 
13

 
156

Americas, other than U.S.
 
223

 
1

 
200

 
(3
)
 
421

Total
 
$
4,022

 
$
692

 
$
1,060

 
$
59

 
$
5,833

 
 
 
 
 
 
 
 
 
 
 
Operating Segments
 
 
 
 
 
 
 
 
 
 
North American Industrial Packaging
 
$
3,582

 
$

 
$

 
$

 
$
3,582

EMEA Industrial Packaging
 
344

 

 

 

 
344

Brazilian Industrial Packaging
 
56

 

 

 

 
56

European Coated Paperboard
 
86

 

 

 

 
86

Global Cellulose Fibers
 

 
692

 

 

 
692

North American Printing Papers
 

 

 
493

 

 
493

Brazilian Papers
 

 

 
222

 

 
222

European Papers
 

 

 
302

 

 
302

Indian Papers
 

 

 
51

 

 
51

Intra-segment Eliminations
 
(46
)
 

 
(8
)
 

 
(54
)
Corporate & Inter-segment Sales
 

 

 

 
59

 
59

Total
 
$
4,022

 
$
692

 
$
1,060

 
$
59

 
$
5,833


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


8

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Six Months Ended June 30, 2018
In millions
 
Industrial Packaging
 
Global Cellulose Fibers
 
Printing Papers
 
Corporate & Intersegment
 
Total
Primary Geographical Markets (a)
 
 
 
 
 
 
 
 
 
 
United States
 
$
6,438

 
$
1,118

 
$
917

 
$
111

 
$
8,584

EMEA
 
879

 
145

 
660

 
(9
)
 
1,675

Pacific Rim and Asia
 
70

 
105

 
123

 
29

 
327

Americas, other than U.S.
 
462

 
1

 
413

 
(8
)
 
868

Total
 
$
7,849

 
$
1,369

 
$
2,113

 
$
123

 
$
11,454

 
 
 
 
 
 
 
 
 
 
 
Operating Segments
 
 
 
 
 
 
 
 
 
 
North American Industrial Packaging
 
$
6,951

 
$

 
$

 
$

 
$
6,951

EMEA Industrial Packaging
 
706

 

 

 

 
706

Brazilian Industrial Packaging
 
118

 

 

 

 
118

European Coated Paperboard
 
178

 

 

 

 
178

Global Cellulose Fibers
 

 
1,369

 

 

 
1,369

North American Printing Papers
 

 

 
951

 

 
951

Brazilian Papers
 

 

 
451

 

 
451

European Papers
 

 

 
621

 

 
621

Indian Papers
 

 

 
103

 

 
103

Intra-segment Eliminations
 
(104
)
 

 
(13
)
 

 
(117
)
Corporate & Inter-segment Sales
 

 

 

 
123

 
123

Total
 
$
7,849

 
$
1,369

 
$
2,113

 
$
123

 
$
11,454


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

Revenue Contract Balances

The opening and closing balances of the Company's contract assets and current contract liabilities are as follows:
In millions
 
Contract Assets (Short-Term)
 
Contract Liabilities (Short-Term)
Beginning Balance - January 1, 2019
 
$
395

 
$
56

Ending Balance - June 30, 2019
 
399

 
40

Increase / (Decrease)
 
$
4

 
$
(16
)


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.

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 pre-payment from the customer, respectively.

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Table of Contents

NOTE 4 - EQUITY

A summary of the changes in equity for the three months and six months ended June 30, 2019 and 2018 is provided below:
 
Three Months Ended June 30, 2019
In millions, except per share amounts
Common Stock Issued
 
Paid-in Capital
 
Retained Earnings
Accumulated Other Comprehensive Income (Loss)
 
Treasury Stock
 
Total
International
Paper
Shareholders’
Equity
 
Noncontrolling
Interests
 
Total
Equity
 
Balance, April 1
$
449

 
$
6,159

 
$
8,211

$
(4,975
)
 
$
2,398

 
$
7,446

 
$
23

 
$
7,469

 
Issuance of stock for various plans, net

 
34

 


 
(1
)
 
35

 

 
35

 
Repurchase of stock

 

 


 
231

 
(231
)
 

 
(231
)
 
Common stock dividends
($.5000 per share)

 

 
(201
)

 

 
(201
)
 

 
(201
)
 
Transactions of equity method investees

 
36

 


 

 
36

 

 
36

 
Comprehensive income (loss)

 

 
292

105

 

 
397

 
(6
)
 
391

 
Ending Balance, June 30
$
449

 
$
6,229

 
$
8,302

$
(4,870
)
 
$
2,628

 
$
7,482

 
$
17

 
$
7,499

 


 
Six Months Ended June 30, 2019
In millions, except per share amounts
Common Stock Issued
 
Paid-in Capital
 
Retained Earnings
Accumulated Other Comprehensive Income (Loss)
 
Treasury Stock
 
Total
International
Paper
Shareholders’
Equity
 
Noncontrolling
Interests
 
Total
Equity
 
Balance, January 1
$
449

 
$
6,280

 
$
7,465

$
(4,500
)
 
$
2,332

 
$
7,362

 
$
21

 
$
7,383

 
Adoption of ASU 2018-02 reclassification of stranded tax effects resulting from Tax Reform

 

 
529

(529
)
 

 

 

 

 
Issuance of stock for various plans, net

 
(84
)
 


 
(164
)
 
80

 

 
80

 
Repurchase of stock

 

 


 
460

 
(460
)
 

 
(460
)
 
Common stock dividends
($1.0000 per share)

 

 
(408
)

 

 
(408
)
 

 
(408
)
 
Transactions of equity method investees

 
33

 


 

 
33

 

 
33

 
Comprehensive income (loss)

 

 
716

159

 

 
875

 
(4
)
 
871

 
Ending Balance, June 30
$
449

 
$
6,229

 
$
8,302

$
(4,870
)
 
$
2,628

 
$
7,482

 
$
17

 
$
7,499

 



 
Three Months Ended June 30, 2018
In millions, except per share amounts
Common Stock Issued
 
Paid-in Capital
 
Retained Earnings
Accumulated Other Comprehensive Income (Loss)
 
Treasury Stock
 
Total
International
Paper
Shareholders’
Equity
 
Noncontrolling
Interests
 
Total
Equity
 
Balance, April 1
$
449

 
$
6,175

 
$
6,783

$
(4,530
)
 
$
1,632

 
$
7,245

 
$
20

 
$
7,265

 
Issuance of stock for various plans, net

 
36

 


 
(1
)
 
37

 

 
37

 
Repurchase of stock

 

 


 
300

 
(300
)
 

 
(300
)
 
Common stock dividends ($.4750 per share)

 

 
(200
)

 

 
(200
)
 

 
(200
)
 
Transactions of equity method investees

 
8

 


 

 
8

 

 
8

 
Comprehensive income (loss)

 

 
405

(351
)
 

 
54

 

 
54

 
Ending Balance, June 30
$
449

 
$
6,219

 
$
6,988

$
(4,881
)
 
$
1,931

 
$
6,844

 
$
20

 
$
6,864

 


10

Table of Contents

 
Six Months Ended June 30, 2018
In millions, except per share amounts
Common Stock Issued
 
Paid-in Capital
 
Retained Earnings
Accumulated Other Comprehensive Income (Loss)
 
Treasury Stock
 
Total
International
Paper
Shareholders’
Equity
 
Noncontrolling
Interests
 
Total
Equity
 
Balance, January 1
$
449