The acquisition of DS Smith Plc on January 31, 2025, significantly expanded the company's Packaging Solutions EMEA and North America segments. This strategic move aims to build an 'advantaged cost position' and grow the business in attractive markets, despite incurring substantial transaction costs.

As a remedy for the DS Smith acquisition, the Company completed the sale of five European corrugated box plants for €125 million (approximately $147 million) on June 30, 2025. This divestiture resulted in a net gain of $(51) million on sales of businesses for the six months ended June 30, 2025.

Management explicitly stated they are 'pursuing strategic options' for the Global Cellulose Fibers business. This indicates a potential divestiture or restructuring of this segment, with no assurance of a positive outcome or transaction.

The company recorded restructuring charges of $85 million for the six months ended June 30, 2025, primarily for the permanent closure of the Red River containerboard mill in Campti, Louisiana. These actions are part of an 'overall effort to reduce complexity and minimize costs' and 'reinvest to build an advantaged cost position.'

Timothy S. Nicholls, former CFO, was appointed Executive Vice President and President – DS Smith (EMEA) to lead integration efforts and drive growth in the EMEA region. Lance T. Loeffler was appointed as the new Senior Vice President and Chief Financial Officer, indicating a focus on leadership for the newly expanded operations.

The Global Cellulose Fibers segment reported an operating loss of $(4) million in Q2 2025, down from a $17 million profit in Q1 2025, primarily due to lower volumes from heavy maintenance outage activity. Management expects volumes to be higher in Q3 2025 due to lower outage activity.

A subsequent event disclosure on July 29, 2025, reveals International Paper was named a defendant in a class action alleging price-fixing of containerboard products from November 1, 2020, to the present. The complaint seeks unspecified treble damages, and while early stage, management cannot guarantee it won't materially impact financial condition.

The total estimated liability for environmental remediation matters increased to approximately $282 million as of June 30, 2025, from $279 million at December 31, 2024. Specifically, the Kalamazoo River superfund site reserve increased by $27 million in Q4 2024 for next phases of remedial action, indicating ongoing and potentially growing environmental obligations.

The company is 'pursuing strategic options' for its Global Cellulose Fibers business, acknowledging risks such as diversion of management's attention, business disruption, adverse impact on financial results, asset impairment charges, and potential litigation, with no assurance of a positive outcome.

The completed acquisition of DS Smith significantly increases International Paper's scale and global presence, particularly in the Packaging Solutions EMEA and North America segments, strengthening its competitive position in fiber-based packaging markets.

The Packaging Solutions North America segment saw higher average sales prices for boxes and export containerboard in Q2 2025, driven by prior index movements. Management expects this trend to continue in Q3 2025, suggesting sustained pricing power in this key market.

The Packaging Solutions EMEA segment experienced weaker market demand and lower volumes in Q2 2025 due to 'macroeconomic volatility.' This indicates a challenging competitive environment in the region, despite higher sales prices from prior index movements.

Restructuring charges of $85 million for the six months ended June 30, 2025, include severance and other costs associated with the permanent closure of the Red River containerboard mill and the 80/20 strategic approach, signaling ongoing efforts to streamline the cost structure and improve efficiency.

For legacy IP, cost of products sold increased by $84 million sequentially in Q2 2025, impacted by higher manufacturing costs, including planned maintenance downtime costs and labor expense. This suggests some near-term pressure on operational efficiency despite cost-out initiatives.

Depreciation and amortization expense increased significantly to $480 million in Q2 2025 from $261 million in Q2 2024, primarily due to changes in the valuation of intangible assets and property, plant, and equipment, along with changes to estimated lives associated with the DS Smith acquisition accounting.

The DS Smith acquisition added $3,998 million in identifiable intangible assets, including $3,514 million in customer relationships, $379 million in tradenames, patents, and developed technology, and $90 million in software. This significantly enhances the company's technological capabilities and intellectual property portfolio.

While the acquisition brought in 'developed technology' as an intangible asset, the 10-Q does not provide specific details on new R&D investments or digital transformation efforts for the current period, making it difficult to assess organic innovation initiatives.

The DS Smith acquisition included $90 million in software assets, with $57 million already placed in service and $33 million in development. These assets are expected to support the combined company's operations and infrastructure.

Capital expenditures for the first six months of 2025 totaled $752 million, a substantial increase from $449 million in the comparable 2024 period. Full-year 2025 capital expenditures are projected to be $1.8 billion to $1.9 billion, indicating significant investment in the combined business.

Following the DS Smith acquisition, International Paper assumed foreign-denominated debt of approximately $3.6 billion. The company also had a $200 million net increase in debt for the first six months of 2025, reflecting the financing of the acquisition and ongoing operations.

Cash dividend payments related to common stock totaled $488 million for the first six months of 2025, compared to $321 million in 2024, with dividends per share remaining at $0.9250. This demonstrates a commitment to shareholder returns despite the significant acquisition and operational adjustments.

The company's estimated probable liability for environmental remediation matters, including Superfund sites like Cass Lake and Kalamazoo River, was approximately $282 million as of June 30, 2025. This indicates a continued significant financial commitment to addressing past environmental impacts.

The forward-looking statements highlight risks related to 'climate change and global, regional, and local weather conditions, as well as risks related to our targets and goals with respect to climate change and the emission of greenhouse gases and other environmental, social and governance matters.' However, specific initiatives or progress metrics are not disclosed in this filing.

Beyond the ongoing environmental liabilities and general risk factor disclosures, the 10-Q does not provide specific updates on new environmental commitments, social responsibility programs, or governance practices beyond what was previously disclosed, suggesting no material new ESG initiatives in the current quarter.

Management noted navigating a 'dynamic macroeconomic environment marked by cost pressures, shifting consumer demand, elevated interest rates and evolving global trade policies.' This environment is contributing to 'broader consumer uncertainty and impacting industrial demand,' particularly in the PS EMEA segment.

The company is actively monitoring 'newly implemented tariffs affecting goods imported in the United States' and notes that 'economic uncertainty from tariffs continues to impact industrial production and box demand across the manufacturing sector.' This poses a risk to future sales volumes and profitability.

The 'One Big Beautiful Bill Act' (OBBBA), enacted in July 2025, introduced wide-ranging tax policy changes with staggered effective dates through 2027. The company is 'actively evaluating the OBBBA's potential implications on its consolidated financial statements,' introducing regulatory uncertainty.