8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): September 26, 2017

International Paper Company

(Exact name of registrant as specified in its charter)

Commission file number 1-3157

New York	13-0872805
(State or other jurisdiction of incorporation)	(IRS Employer
	Identification No.)
6400 Poplar Avenue, Memphis, Tennessee	38197
(Address of principal executive offices)	(ZIP Code)

Registrant’s telephone number, including area code: (901) 419-7000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

EXPLANATORY NOTE

The information in Item 7.01 of this Report, including the exhibit, is being furnished pursuant to Item 7.01 of Form 8-K and General Instruction B.2 thereunder. Such information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.

SECTION 1. REGISTRANT’S BUSINESS AND OPERATIONS.

Item 1.01. Entry into a Material Definitive Agreement.

On September 26, 2017, International Paper Company (the “Company”) entered into an agreement (the “Agreement”) with The Prudential Insurance Company of America (“Prudential”) relating to the Retirement Plan of International Paper Company (the “Plan”).

Under the Agreement, the Company will purchase a group annuity contract from Prudential and transfer to Prudential the future benefit obligations and annuity administration for certain retirees (or their beneficiaries) under the Plan (“Transferred Participants”).

Upon issuance of the group annuity contract, the pension benefit obligations and annuity administration for approximately 45,000 Transferred Participants will be irrevocably transferred to Prudential, which will irrevocably guarantee the pension benefits of the Transferred Participants. By transferring these obligations to Prudential, the Company will reduce its approximate $14 billion in U.S. qualified pension plan liabilities by approximately $1.3 billion, or 9%. The purchase of the group annuity contract will be funded directly by the Plan’s assets.

The transactions contemplated by the Agreement are subject to closing conditions that are customary for transactions of this nature, including certain termination clauses. Assuming all of the closing conditions are met, the Company expects the transactions to be completed on October 3, 2017. All Transferred Participants will continue to receive their benefits from the Plan until the end of 2017, at which time Prudential will assume responsibility for administrative and customer service support, including distribution of payments to the Transferred Participants.

As a result of the transactions contemplated by the Agreement, the Company expects to recognize a non-cash pension settlement charge of approximately $400 million before tax ($247 million after tax) in the fourth quarter of 2017.

The foregoing summary of the Agreement is qualified in its entirety by reference to the text of the Agreement, a copy of which will be filed as an exhibit to the Company’s quarterly report on Form 10-Q for the fiscal quarter ended September 30, 2017.

Certain statements in this Current Report on Form 8-K are or may be considered forward-looking statements, such as statements relating to the financial impact of the transactions contemplated by the Agreement. These statements reflect Company management’s current views

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and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in these statements. Factors which could cause actual results to differ include but are not limited to (i) the successful fulfillment or waiver of all closing conditions contained in the Agreement without unexpected delays or conditions; (ii) the successful closing of the transactions contemplated by the Agreement within the estimated timeframe; (iii) the failure to realize the expected benefits from the transaction or delay in realization thereof; (iv) the amount and timing of the expected settlement charge; and (v) other factors that can be found in the Company’s press releases and Securities and Exchange Commission filings. The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

SECTION 7. REGULATION FD.

Item 7.01. Regulation FD Disclosure.

On October 2, 2017, the Company issued a press release announcing the Agreement described above under Item 1.01. Attached as Exhibit 99.1 and incorporated herein by reference is a copy of the press release.

SECTION 9. FINANCIAL STATEMENTS AND EXHIBITS.

Item 9.01. Financial Statements and Exhibits.

(d)     Exhibits.

Exhibit Number	Description
99.1	Press Release of International Paper Company dated October 2, 2017.

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EXHIBIT INDEX

Exhibit Number	Description
99.1	Press Release of International Paper Company dated October 2, 2017.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	International Paper Company
Date: October 2, 2017	By:	/s/ SHARON R. RYAN
		Name: Sharon R. Ryan
		Title: Senior Vice President, General Counsel and
		Corporate Secretary

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EX-99.1

Exhibit 99.1

INTERNATIONAL PAPER PLAZA

6400 POPLAR AVENUE

MEMPHIS, TN 38197

News Release

International Paper to Reduce Pension Liabilities by $1.3 Billion

Company to Transfer Obligations and Related Assets to a Leader in Retirement Benefits

Transaction Designed to Reduce Risk Related to Company’s Long-Term Pension Obligations

MEMPHIS, Tenn. – October 2, 2017— International Paper (NYSE: IP) today announced it has entered into an agreement with The Prudential Insurance Company of America (NYSE: PRU) to purchase a group annuity contract and transfer approximately $1.3 billion of International Paper’s U.S. qualified pension plan projected benefit obligations.

The transaction will be funded with pension plan assets, and at the end of 2017, Prudential will assume responsibility for pension benefits and annuity administration for approximately 45,000 former employees or their beneficiaries receiving less than $450 in monthly benefit payments from the plan. The transaction is expected to close on October 3, 2017, subject to customary closing conditions.

There will be no change to the pension benefits for any plan participants as a result of the transaction. Retirees and beneficiaries who will be covered by this transaction will be receiving individualized information packages with further details and answers to frequently asked questions.

“First and foremost we are committed to ensuring our retirees’ benefits are secure and maintained. This transaction achieves that goal, while at the same time enabling International Paper to better manage future costs associated with our pension plan,” said Glenn R. Landau, Senior Vice President and Chief Financial Officer. “We have carefully selected a highly-rated, experienced retirement benefits provider, and our retirees should feel good about this transaction.”

As a result of the transaction, the Company expects to recognize a non-cash pension settlement charge of approximately $400 million before tax ($247 million after tax) in the fourth quarter of 2017.

ABOUT INTERNATIONAL PAPER

International Paper (NYSE: IP) is a leading global producer of renewable fiber-based packaging, pulp and paper products with manufacturing operations in North America, Latin America, Europe, North Africa and Russia. We produce packaging products that protect and promote goods, and enable world-wide commerce; pulp for diapers, tissue and other personal hygiene products that promote health and Wellness; papers that facilitate education and communication; and paper bags, cups and food containers that provide convenience and portability. We are headquartered in Memphis, Tenn., and employ approximately 55,000 colleagues located in more than 24 countries. Net sales for 2016 were $21 billion. For more information about International Paper, our products and global citizenship efforts, please visit internationalpaper.com.

Certain statements in this press release are or may be considered forward-looking statements, such as statements relating to the financial impact of the transactions contemplated by the Agreement. These statements reflect Company management’s current views and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in these statements. Factors which could cause actual results to differ include but are not limited to (i) the successful fulfillment or waiver of all closing conditions contained in the Agreement without unexpected delays or conditions; (ii) the successful closing of the transactions contemplated by the Agreement within the estimated timeframe; (iii) the failure to realize the expected benefits from the transaction or delay in realization thereof; (iv) the amount and timing of the expected settlement charge; and (v) other factors that can be found in the Company’s press releases and Securities and Exchange Commission filings. The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

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Contacts:

Media: Thomas J. Ryan, 901-419-4333; Investors: Guillermo Gutierrez, 901-419-1731 and Michele Vargas, 901-419-7287.