International Paper Company (NYSE:IP) Q1 2018 Earnings Conference Call - Final Transcript
Apr 26, 2018 • 10:00 am ET
Good morning. My name is Sarah, and I will be your conference operator today. At this time, I would like to welcome everyone to the First Quarter 2018 International Paper Earnings Call. (Operator Instructions)
Thank you. Guillermo Gutierrez, you may begin.
Thank you, Sarah. Good morning, and thank you for joining International Paper's First Quarter 2018 Earnings Conference Call. Our key speakers this morning are Mark Sutton, Chairman and Chief Executive Officer; and Glenn Landau, Senior Vice President and Chief Financial Officer. There's important information at the beginning of our presentation that you should take time to read, including certain legal disclaimers on slides two through seven.
(Forward-Looking Cautionary Statements)
We will also present certain non-U.S. GAAP financial information. As noted on slide three, 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 2018 press release and today's presentation slides.
Relative to the Ilim joint venture and Graphic Packaging investments, slide four provides context around the financial information and statistical measures presented on those entities. As indicated by the information on slides five through seven, International Paper's proposal to acquire Smurfit Kappa is governed by the Irish Takeover Rules. Under Irish Takeover Rules, International Paper management is prohibited from discussing any material information or significant new opinion that has not been publicly announced. Any person interested in shares in International Paper or Smurfit Kappa is encouraged to consult his or her professional adviser.
With that, I will now turn the call over to Mark Sutton.
Thanks, Guillermo, and good morning, everyone. We'll begin the presentation on slide eight. International Paper delivered solid first quarter performance and strong year-over-year earnings growth. We continue to see healthy demand and solid fundamentals across our global businesses. Price realization momentum continues across all 3 of our businesses and we remain focused on delivering differentiated and innovative solutions to the right segments and the right customers.
Operationally, we executed well on a heavy maintenance outage quarter and managed through weather-related disruptions and other unusual events. We completed approximately 35% of our scheduled maintenance outages in the first quarter, and we expect to have 75% of our total maintenance outages complete by the end of the second quarter. Transportation and other input costs were a headwind in the quarter with higher wood, chemicals and energy, more than offsetting the lower recovered fibers or OCC cost. And on equity earnings, our Ilim joint venture in Russia delivered record performance.
Turning to the financial results on slide nine. Revenue increased by nearly 10% year-over-year, reflecting strong commercial performance and solid global demand. This includes record first quarter shipments of fluff and specialties in our Global Cellulose Fibers business. EBITDA improved 19% year-over-year. This performance reflects the solid business fundamentals and margin expansion across our businesses.
In fact, we had record first quarter EBITDA in Industrial Packaging. Total equity earnings were $95 million, including our Ilim joint venture as well as our 20.5% ownership interest