International Paper Reports Solid Q4 Results, Record Operating Earnings
Effective Tax Rate
The effective tax rate before special items for the fourth quarter of 2013 was 31 percent, compared with an effective tax rate before special items of 24 percent in the third quarter of 2013. The higher rate in the fourth quarter is primarily attributable to a one-time inclusion in the third quarter of a $30 million benefit related to the adjustment of the tax basis in certain of the Company's fixed assets. The 2013 full year rate was 27 percent compared with 29 percent for the 2012 full year.
Effects of Special Items
Special items in the fourth quarter of 2013 included a net pre-tax loss of $79 million ($50 million after taxes) for restructuring and other charges, pre-tax charges of $12 million ($7 million after taxes) for integration costs related to the Temple-Inland acquisition and a pre-tax charge of $2 million ($1 million after taxes) for other items. Also included in special items is a pre-tax charge of $127 million ($119 million after a $5 million tax benefit and a gain of $3 million related to non-controlling interest) for the impairment of goodwill and a trade name intangible asset of the Company's India Papers business and a pre-tax charge of $400 million ($366 million after taxes) for the impairment of goodwill of the Company's xpedx business. In addition, a tax benefit of $651 million related to the closing of a U.S. federal income tax audit and a net tax benefit of $3 million for other tax items were recorded. Restructuring and other charges included a pre-tax charge of $67 million ($41 million after taxes) for costs associated with the announced closure of our Courtland, Alabama mill, pre-tax charges of $8 million ($5 million after taxes) for costs associated with the announced spin-off of our xpedx operations, and a net charge of $4 million (before and after taxes) for other items.