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International Paper to Reduce Pension Liabilities by $1.3 Billion

Press release from the issuing company

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. - International Paper today announced it has entered into an agreement with The Prudential Insurance Company of America 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.



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