Our transformation over the past decade has positioned us well to compete successfully in global packaging, paper and pulp markets. As the world around us changes, we must remain agile and adapt to meet the evolving and emerging needs of our stakeholders. To be the industry leader we want to be, International Paper has established six key enterprise-wide priorities for 2015. I’d like to share these priorities with you. 

Our first priority is continuing to develop a culture where every team member is accountable for his or her own safety, where team members lead by example and where they are appreciated for boldly intervening when they see unsafe behavior or conditions. Second, we must generate strong, sustainable cash flow that allows us to strategically reinvest in our businesses, maintain a healthy balance sheet and return cash to our shareowners. 

Next, we must continue to build an even more diverse and  inclusive work environment that enables us to successfully compete for and retain the most talented employees around the globe, which in turn, will lead to better overall performance for the company. Also, to be the best, all of our team members, including myself, must set stretch goals that encourage us to think beyond business as usual. On the operations side, we must ramp up our manufactur- ing excellence initiatives to generate deliberate, continuous and sustainable improvement and apply what we learn across every area of the company. Finally, we must win with the right customers—those customers who are growing profitably and want us to grow along with them. We must go out of our way to delight them with our product quality, ability to innovate, customer service and day-to-day dependability. 

As we look back, 2014 was a successful year for International Paper as we generated $2.1 billion of free cash flow, record cash from operations and record earnings from our industrial packaging business. We completed the successful spin-off of our xpedx business, from which we received more than $400 million in cash payments. Our foodservice business and Ilim joint venture each generated record revenue and our global papers business also posted much-improved year-over- year performance. 

International Paper’s ability to generate strong, sustainable free cash flow provides the foundation for our ongoing commitment to return cash to shareowners, strategically reinvest in our businesses and maintain a strong balance sheet. In 2014, we returned more cash to our shareowners with a 14 percent increase in our annual dividend and bought back approximately $1 billion in shares. 

In April, we acquired the remaining 25 percent share of Orsa International Paper Embalagens S.A. in Brazil from our joint venture partner. We are now in a position to fully optimize our system in alignment with our strategy to selectively grow our industrial packaging business globally in attractive markets. In North America, we broke ground on a 250,000 square foot expansion of our foodservice plant in Kenton, Ohio, and expect it to be operational in mid-2015. The expansion supports our customers’ organic growth in response to increasing consumer demand for renewable fiber-based packaging. We also announced an investment to restart the idled No. 3 paper machine at our Valliant, Okla., containerboard mill. The machine will provide greater flexibility in our North American containerboard system and enable us to grow in specialty markets and through our international box system. The machine should be production-ready by summer 2015. 

