International Paper Company

Ladies and gentlemen, good morning. Thank you for standing by. At this time, we would like to welcome everyone to the International Paper's first quarter 2023 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press 1, then 0 on your telephone keypad. To withdraw a question, please press one, then zero. We do ask that you limit yourself to one question and one follow-up question. It is now my pleasure to turn the call over to Mark Nellison, Vice President, Investor Relations. Sir, the floor is yours.

Thank you, Leah. Good morning, and thank you for joining International Paper's first quarter 2023 earnings call. Our speakers this morning are Mark Sutton, Chairman and Chief Executive Officer of and Tim Nichols, Senior Vice President and Chief Financial Officer. There's 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 available on our website. Our website also contains copies of the first quarter earnings press release in today's presentation slides. I will now turn the call over to Mark Sutton.

Thank you, Mark, and good morning, everyone. We will begin our discussion on slide three where I will touch on our first quarter results. Let me begin the discussion by saying how proud and appreciative I am of all the hard work of our employees and for our strong customer relationships as we manage through a dynamic and challenging macro environment. Looking at our performance, International Paper delivered $65 million of year-over-year incremental earnings benefits from our Building a Better IP initiatives. And our mill system continued to perform very well as we successfully executed our highest planned maintenance outage quarter of the year and continued to optimize our system while taking care of our customers. On capital allocation, we returned $319 million to share owners during the quarter, including $157 million of share repurchases. We continue to navigate a challenging demand environment as our customers and the broader supply chain work through elevated inventories of their products. We also believe consumer priorities remain focused on services as well as non-discretionary goods, which has been influenced by inflationary pressures, rising interest rates, and the pull forward of goods during the pandemic. Margins were also under pressure from lower prices across our portfolio, partially offset by additional benefits from lower input costs. Now I'll turn to slide four and talk more about the current operating environment, as well as our ongoing commitments going forward. As we entered the year, we recognized there were macroeconomic uncertainties ahead of us, and our businesses are not immune to these risks. These macro trends shifted in the quarter, resulting in a weaker than expected demand environment through the first part of this year. Much of this was influenced by greater inventory destocking across the whole supply chain, weaker export markets, and unfavorable weather impacts on the fresh produce segment. In addition, Lower prices across our portfolio today have put additional pressure on margins relative to what we expected in our full-year outlook. Although we believe most of the destocking through the retail channel has been resolved, the destocking continues throughout the rest of the supply chain, especially with manufacturers and many of our customers. We believe this will run its course through the second quarter resulting in an improved demand environment in the second half of the year. I want to reinforce that our teams at International Paper know what it takes to successfully manage through a business cycle by leveraging the wide range of options and capabilities across our large system of mills, box plants, and supply chain to really variabilize our costs while continuing to take care of our customers' needs. We've demonstrated our ability to do this in prior business cycles. And our ongoing commitment is to continue operating our company the IC way. We remain focused on our key priorities of taking care of our employees, our customers, and maximizing value for our shareholders. This includes preserving our strong financial foundation and maintaining our dividend. Before I turn it over to Tim, I also want to provide an update on ILM. We have made good progress toward closing the sale of our ILM investment. Buyers received an important required approval from the Russian Sub-Commission overseeing exits by foreign companies, but we are still awaiting the approval of the Russian Competition Authority. We are optimistic that this final required approval will be received soon, and we plan to close shortly thereafter. I will now turn it over to Tim, who will provide more details about our first quarter performance as well as our outlook. Tim?