International Paper Company

Good morning and thank you for standing by. Welcome to today's International Papers first quarter 2022 earnings 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 one in your telephone keypad. To withdraw a question, press the pound key. I would now like to turn today's conference over To Guillermo Gutierrez, Vice President, Investor Relations. You go ahead, sir.

Thank you, Charm. Good morning, and thank you for joining International Paper's first quarter 2022 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 this call, we will make forward-looking statements that are subject to risks and uncertainties. We will also present certain non-U.S. GAAP financial information. A reconciliation of those figures to U.S. GAAP financial measures is also available in our website. Our website also contains copies of our first quarter of 2022 earnings press release and today's presentation slides. I will now turn the call over to Mark Sutton.

Mark Sutton Thank you, Guillermo, and good morning, everyone. We will begin our discussion on slide three. International paper's first quarter earnings were better than we had outlook, driven by strong price realization and solid operations to overcome significantly higher input costs, especially for energy, chemicals, and distribution. We also delivered strong cash from operations. We delivered strong year-over-year and sequential revenue growth in the first quarter driven by price realization from prior increases in our two business segments. Omicron-related constraints impacted volume in our packaging business in January. Our shipments recovered as expected throughout the quarter with demand normalizing at elevated levels as we enter into the second quarter. Our mills and converting system performed well. as we managed through continued logistics constraints, which negatively impacted operating costs. We executed our highest maintenance outage quarter of the year very well, and we expect to complete about 70 percent of our planned maintenance in the first half of the year. We achieved $40 million of earnings through our Building a Better IP initiatives, and we are confident in our four-year target of $200 to $225 million of gross incremental earnings in 2022. We are excited by the opportunities we have to materially lower our cost structure and to accelerate profitable growth. Later on in our presentation, Tim will walk you through our first quarter progress. On capital allocation, in the first quarter, we returned $580 million to shareholders, including $406 million of share repurchases. This highlights the choices that our strong balance provide for us. Before we continue, I'd like to share some perspective on something that's top of mind. First and foremost, our thoughts and prayers are with the people of Ukraine. The stories, images and reports coming out of the country continue to be both tragic and troubling. Many of our own employees, especially those in Europe, have friends and family who are directly affected. As a way to help all the people impacted, we have continued to donate to support humanitarian relief efforts. With respect to our ELIM joint venture, we announced last month that we were exploring options, including selling our 50 percent interest. We are pursuing the completion of this work with urgency, from engaging external advisors to having discussions with interested parties. The complexity of our JV structure may impact the pace of reaching a resolution, but it will not affect the urgency of our efforts. As we move through this process, we will continue to comply with all regulations and sanctions, and we will update our stakeholders when there is more information to share. Turning to first quarter results on slide four, revenue increased by 14 percent year over year, driven by strong price realization in our two business segments. Operating earnings per share improved by just over 50 percent versus last year, and we generated strong cash from operations. Margins in the first quarter were impacted by higher input costs and the execution of our highest maintenance outage quarter of the year. We do expect margins to expand in the second quarter with further expansion in the second half of the year as price realization outpaces higher input costs and as we step down from higher maintenance outage quarters later in the year. I will now turn it over to Tim who will cover our business performance and our outlook.