International Paper — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net sales were $6.20 billion for the third quarter of 2026, compared to $6.22 billion in the third quarter of 2025 and $6.00 billion in the second quarter of 2026.
• Loss from continuing operations was $1.10 billion for the third quarter of 2026, compared to a loss of $426 million in the third quarter of 2025 and a loss of $12 million in the second quarter of 2026.
• Adjusted EBITDA from continuing operations was $843 million for the third quarter of 2026, compared to $859 million in the third quarter of 2025 and $587 million in the second quarter of 2026.
• Adjusted operating earnings (non-GAAP) were $197 million for the third quarter of 2026, compared to a loss of $224 million in the third quarter of 2025 and $18 million in the second quarter of 2026.
• Cash provided by operating activities was $339 million for the third quarter of 2026, compared to $605 million in the third quarter of 2025 and $526 million in the second quarter of 2026.
• Free cash flow (non-GAAP) was $(267) million for the third quarter of 2026, compared to $150 million in the third quarter of 2025 and $(7) million in the second quarter of 2026.
• Diluted earnings per share from continuing operations was $(2.07) for the third quarter of 2026, compared to $(0.81) in the third quarter of 2025 and $(0.02) in the second quarter of 2026.
• Adjusted operating earnings per share (non-GAAP) was $0.37 for the third quarter of 2026, compared to $(0.43) in the third quarter of 2025 and $0.04 in the second quarter of 2026.
• Total assets were $35.64 billion as of September 30, 2026, compared to $37.96 billion as of December 31, 2025.
• Total debt (Notes Payable, Current Maturities of Long-Term Debt, and Long-Term Debt) was $9.69 billion as of September 30, 2026, compared to $9.83 billion as of December 31, 2025.
• Cash and temporary investments were $815 million as of September 30, 2026, compared to $1.15 billion as of December 31, 2025.

Guidance and Future Outlook:

• Packaging Solutions North America Business segment operating profit guidance for the fourth quarter of 2026 is $460-$500 million.
• Packaging Solutions North America Business segment operating profit guidance for the full year 2026 is $1.3-$1.4 billion.
• Packaging Solutions North America Adjusted EBITDA (non-GAAP) guidance for the fourth quarter of 2026 is $700-$740 million.
• Packaging Solutions North America Adjusted EBITDA (non-GAAP) guidance for the full year 2026 is $2.27-$2.31 billion.
• The Company is no longer including Packaging Solutions EMEA financial guidance in its guidance framework due to the planned separation and U.K. regulatory requirements, and does not anticipate providing such guidance in the future.

Business Segments and Product Lines:

• Packaging Solutions North America net sales were $3.88 billion for the third quarter of 2026, compared to $3.90 billion in the third quarter of 2025 and $3.69 billion in the second quarter of 2026.
• Packaging Solutions North America operating profit was $427 million for the third quarter of 2026, compared to a loss of $166 million in the third quarter of 2025 and $204 million in the second quarter of 2026.
• Packaging Solutions North America sales increased reflecting higher sales prices partially offset by lower sales volumes driven by a softer demand environment.
• Packaging Solutions North America cost of products sold decreased driven by lower planned maintenance outage costs and lower sales volumes, partially offset by higher input costs for recovered fiber, energy, and fuel.
• Packaging Solutions North America results reflected improved mill performance, including the non-repeat of the Riverdale paper machine conversion, partially offset by the impact of suspended operations at Pine Hill.
• Packaging Solutions North America results included a full quarter of earnings from the NORPAC mill acquisition compared with one month of earnings in the second quarter of 2026.
• Packaging Solutions EMEA net sales were $2.28 billion for the third quarter of 2026, compared to $2.31 billion in the third quarter of 2025 and $2.29 billion in the second quarter of 2026.
• Packaging Solutions EMEA operating profit was $(73) million for the third quarter of 2026, compared to a loss of $58 million in the third quarter of 2025 and a loss of $80 million in the second quarter of 2026.
• Packaging Solutions EMEA net sales decreased slightly as higher sales prices for paper were more than offset by lower sales volumes in a continued soft market.
• Packaging Solutions EMEA packaging margins were impacted by higher paper prices not yet realized in previously published box pricing.

Market and Competitive Landscape:

• The Company noted persistent macro headwinds and a softer demand environment in North America.
• The macro environment continued to weigh on results and the pace of margin recovery in EMEA.
• The Company is advancing the separation of its EMEA packaging business into an independent company known as DS Smith plc.
• The EMEA packaging business leadership team will hold a Capital Markets Day in London on November 3, 2026, to discuss plans for the new company.

Risks and Challenges:

• A $1.38 billion non-cash goodwill impairment charge was recorded for the Packaging Solutions EMEA business segment in the third quarter of 2026.
• Net special items in the third quarter of 2026 amounted to a net after-tax charge of $1.31 billion, primarily driven by the goodwill impairment and separation costs.
• Higher input costs for recovered fiber, energy, and fuel impacted Packaging Solutions North America results.
• Higher freight costs increased distribution expenses in Packaging Solutions North America.
• Accelerated depreciation associated with cost-out actions increased expenses in Packaging Solutions EMEA.
• The Company faces risks related to the separation of its EMEA operations, including the potential for additional impairment charges and regulatory requirements.

Management Commentary and Tone:

• Chairman and CEO Andy Silvernail stated that third-quarter results reflect "meaningful progress on our strategy despite persistent macro headwinds."
• Management noted they are "executing on the core controllables in a more challenging world" and remain focused on building an advantaged cost position.
• Silvernail expressed conviction in the strategy, confidence in the ability to execute, and a clear path to becoming a stronger International Paper.
• In North America, the Company is improving operational performance, building a structurally lower-cost business, and realizing benefits of prior pricing actions.
• In EMEA, the Company executed well on ongoing restructuring and cost-out initiatives.

Other Key Points:

• The Company recorded a pre-tax, non-cash goodwill impairment charge of $1.38 billion related to the PS EMEA business segment as of September 30, 2026.

• Net special items for the third quarter of 2026 included $65 million in PS EMEA separation costs, $9 million in severance and other costs, and $2 million in NORPAC acquisition transaction costs.

• The Company plans to file its Quarterly Report on Form 10-Q with the SEC on or about November 4, 2026.

• Dividends paid for the nine months ended September 30, 2026, were $735 million.

• Capital expenditures for the nine months ended September 30, 2026, were $1.66 billion.

• Proceeds from divestitures, net of cash divested, were $1.05 billion for the nine months ended September 30, 2026.

• The Company held a webcast to discuss third quarter 2026 earnings, the separation of the EMEA packaging business, and the full-year outlook for Packaging Solutions North America.