International Paper Company

Good morning, and thank you for standing by. Welcome to today's International Paper Third Quarter 2020 Earnings Day Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, you will have an opportunity to ask questions. To ask a question, press star 1 on your telephone keypad. To withdraw a question, press the pound key. I'd now like to turn today's conference over to Guillermo Gutierrez. Vice President, Investor Relations.

Thank you, Maria. Good morning, and thank you for joining International Papers Third Quarter 2020 Earnings Call. Our speakers this morning are Mark Sutton, Chairman and Chief Executive Officer, and Tim Nichols, Senior Vice President and Chief Financial Officer. There is important information at the beginning of our presentation on slide two, including certain legal disclaimers. For example, during the call, we will make forward-looking statements that are subject to risks and uncertainties, including the impact of COVID-19. We will also present certain non-U.S. GAAP financial information. A reconciliation of those figures to U.S. GAAP financial measures is available on our website. Our website also contains copies of the third quarter 2020 earnings press release and today's presentation slides. Relative to the Illum joint venture and graphic packaging investments, slide two also provides context around the financial information and statistical measures presented on those entities. I will now turn the call over to Mark Sutton.

Thank you, Guillermo, and good morning, everyone. We'll begin our discussion on slide three. International paper delivered solid results and robust cash flows in a dynamic environment. We generated $1.6 billion of free cash flow through the first three quarters as we continue to demonstrate the strength and resilience of our company. We're on track to generate $2 billion in free cash flow this year through our early actions and strong execution. Relative to demand, recovery trends continue to vary by business and by end-user consumer segments. Demand for our corrugated packaging accelerated in the third quarter, and that momentum continues in the fourth quarter. In flood pulp, as expected, we experienced seasonally lower demand and destocking across most regions. In papers, we're in the early stages of recovery as offices and school activities begin to restart. Against this backdrop, our commercial, supply chain, and manufacturing organizations are executing at a high level to ensure we meet our customers' changing needs, leveraging the scale and flexibility of our system and optimizing our costs. The company's solid performance in the third quarter reinforces our financial strength and commitment to our capital allocation framework. Turning now to slide four, which shows our third quarter results. Operating earnings were $0.71 per share, which included an unfavorable ILIM foreign exchange non-cash impact of $0.14 in the quarter. Sales improved sequentially and came in higher than our expectations, driven by strong demand in our North American packaging business. EBITDA increased by nearly $100 million sequentially even as planned maintenance outage expenses stepped up by about $80 million. As already mentioned, we generated robust free cash flow in the third quarter, which we continue to apply in a manner consistent with our capital allocation framework. During the third quarter, we reduced debt by about $800 million, bringing year-to-date debt reduction to $1.1 billion. Earlier this month, the Board of Directors approved the fourth quarter dividend, bringing the full-year authorizations for our dividend to $800 million. Moving to slide five, as I reflect on our performance this year, it reaffirms my admiration and appreciation for our 50,000 employees worldwide who continue to perform at a high level by taking care of each other and our customers. I'm especially grateful to our frontline teams in manufacturing and converting facilities around the world. We remain absolutely committed to our COVID-19 principles and we'll continue to focus on what we need to do to further strengthen the company for all of our stakeholders in the short term and in the long term. Now I'll turn it over to Tim, who will cover our business performance and our fourth quarter outlook. Tim?