International Paper Company (NYSE:IP) Files An 8-K Regulation FD DisclosureItem 1.01 of this Report, including the exhibit, is being furnished to Item 1.01 of Form 8-K and General Instruction B.2 thereunder. Such information shall not be deemed “filed” for purposes of Section18 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 September26, 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 $14billion in U.S. qualified pension plan liabilities by approximately $1.3billion, 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 October3, 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 $400million before tax ($247million 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 September30, 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 1.01. Regulation FD Disclosure.
On October2, 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 1.01. Financial Statements and Exhibits.
(d) Exhibits.
|
Exhibit Number |
Description |
| 99.1 |
Press Release of International Paper Company dated October2, 2017. |
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EXHIBIT INDEX
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INTERNATIONAL PAPER CO /NEW/ ExhibitEX-99.1 2 d468499dex991.htm EX-99.1 EX-99.1 Exhibit 99.1 INTERNATIONAL PAPER PLAZA 6400 POPLAR AVENUE MEMPHIS,…To view the full exhibit click here
About International Paper Company (NYSE:IP)
International Paper Company (International Paper) is a paper and packaging company with primary markets and manufacturing operations in North America, Europe, Latin America, Russia, Asia, Africa and the Middle East. The Company operates in three segments: Industrial Packaging, Printing Papers and Consumer Packaging. It is a manufacturer of containerboard in the United States. Its products include whitetop, recycled linerboard and saturating kraft. It is the producer of printing and writing papers. The products in Printing Papers segment include uncoated papers and pulp. Its uncoated papers engage in the business of producing papers for use in copiers, desktop and laser printers and digital imaging. Its uncoated papers are sold under private label and International Paper brand names that include Hammermill, Springhill, Ballet, Pol and Svetocopy. Its Everest, Fortress, and Starcote brands are used in packaging applications for everyday products, such as food and tobacco products.