UNITED STATES
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FORM
CURRENT REPORT
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Item 2.05. Costs Associated with Exit or Disposal Activities.
On October 15, 2024, International Paper Company (the “Company”) announced a corporate overhead restructuring plan aimed at reducing operating costs, optimizing its organizational structure, and better aligning its workforce with the needs of the business and its customers. The majority of the corporate overhead restructuring plan is expected to be substantially implemented in the fourth quarter of 2024.
Under the corporate overhead restructuring plan, the Company plans to reduce its workforce by approximately 650 employees. Impacted employees are eligible to receive certain severance payments and other employee termination benefits under the Company’s Salaried Employee Severance Plan including outplacement services. Payment of severance and employee termination benefits are contingent upon the employee’s execution (and non-revocation) of a separation agreement, which includes a general release of claims against the Company.
In connection with the restructuring, the Company estimates it will incur aggregate pre-tax restructuring charges of approximately $80 million to $100 million related to one-time severance payments and other employee termination benefits, with approximately $50 million of such charges recorded in the third quarter of 2024 and approximately $30 million to $50 million of such charges anticipated to be recorded in the fourth quarter of 2024. Substantially all of the charges noted above will involve cash payments, and it is contemplated that the majority of these cash payments will be paid during the first quarter of 2025.
The estimated charges disclosed above in connection with this corporate overhead restructuring are subject to assumptions and actual results may differ materially.
This Current Report on Form 8-K (the “Current Report”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, including statements regarding the expected charges associated with the corporate overhead restructuring, the expected reduction in annual operating costs associated with the corporate overhead restructuring, the timing of charges and cash payments associated with the corporate overhead restructuring, and the potential for the Company to undertake and implement additional restructuring and cost reduction measures and incur additional restructuring charges in connection therewith. These forward-looking statements reflect management’s current views and are subject to risks and uncertainties that could cause actual results and the timing of events to differ materially from those expressed or implied in these forward-looking statements. Factors which could cause actual results to differ from such forward-looking statements include, but are not limited to, industry, global, economic and other conditions. These forward-looking statements are also subject to the risks and uncertainties relating to the business of the Company contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the U.S. Securities and Exchange Commission (“SEC”) on February 16, 2024, the Company’s Quarterly Report on Form 10-Q for the three months ended June 30, 2024 filed with the SEC on July 26, 2024, and subsequent reports filed with the SEC. In addition, other risks and uncertainties not presently known to the Company or that we currently believe to be immaterial could affect the accuracy of any forward-looking statements. The Company undertakes no obligation to publicly update any forward-looking statements contained in this Current Report, whether as a result of new information, future events or changes in expectations.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| International Paper Company | ||||||
| Date: October 21, 2024 | By: | /s/ Joseph R. Saab | ||||
| Name: | Joseph R. Saab | |||||
| Title: | Senior Vice President, General Counsel and Corporate Secretary | |||||
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