International Paper Company

Good morning and thank you for standing by. Welcome to today's International Paper's second quarter 2023 earnings call. All lines have been placed on mute to prevent background noise. After the speaker's remarks, you will have an opportunity to ask questions. To ask a question, press 1 then 0 on your telephone keypad. To withdraw your question, press 1 then 0. As a reminder, to ask a question, press 1 then 0. Again, that is 1 then 0 on your telephone keypad. To withdraw your question, press 1 then 0. It is now my pleasure to turn the call over to Mark Nellison, Vice President, Investor Relations. Sir, the floor is yours.

Thank you, Alan. Good morning, and thank you for joining International Papers' second quarter 2023 hearings call. Our speakers this morning are Mark Sutton, Chairman and Chief Executive Officer, 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 second quarter earnings press release and 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 highlight our results. In the second quarter, our operations ran very well, and we managed our businesses effectively in a challenging demand environment while taking care of our customers. Looking at our performance, International Paper delivered $55 million of year-over-year incremental earnings benefit from our Building a Better IP initiatives. This program contributed $120 million of benefits through the first half of the year, and we were on track to exceed our full-year target for the second year in a row. Underlying demand for our products improved throughout the quarter, but remained constrained by inventory destocking as our customers and the broader supply chain worked through elevated inventories of their products. Based on discussions with our customers and trends observed across the various end-use segments for packaging and pulp products, we believe consumer priorities in the second quarter remained focused on services as well as non-discretionary goods. This trend has been influenced by the pull forward of goods during the pandemic, as well as inflationary pressures and rising interest rates. However, based on feedback from our customers, we also believe that destocking is finally coming to a close. Margins remained under pressure due to the resulting weak volumes and lower prices across our portfolio. However, this was partially offset by lower input and distribution expenses as our team worked to reduce our marginal cost. On capital allocation, we returned $200 million to shareholders in the core. And with respect to the sale of our ILM investment, I reported last quarter that the Russian buyers received an important required approval from a Russian sub-commission overseeing exits by foreign companies. They are still awaiting the approval from the Russian Competition Authority. The buyers continue to pursue this approval, and we expect to close as soon as all regulatory approvals are secured. I will now turn it over to Tim, who will provide more details about our second quarter performance and our third quarter outlook. Tim?