International Paper 2012 Annual Report Download - page 105

Common Stock
In thousands Issued Treasury
Balance at January 1, 2010 437,022 3,862
Issuance of stock for various plans, net 1,849 (3,796)
Repurchase of stock — 1,168
Balance at December 31, 2010 438,871 1,234
Issuance of stock for various plans, net 1 (326)
Repurchase of stock — 1,013
Balance at December 31, 2011 438,872 1,921
Issuance of stock for various plans, net 1,022 (2,994)
Repurchase of stock — 1,086
Balance at December 31, 2012 439,894 13
NOTE 15 RETIREMENT PLANS
International Paper sponsors and maintains the
Retirement Plan of International Paper Company (the
“Pension Plan”), a tax-qualified defined benefit pen-
sion plan that provides retirement benefits to sub-
stantially all U.S. salaried employees and hourly
employees (receiving salaried benefits) hired prior to
July 1, 2004, and substantially all other U.S. hourly
and union employees who work at a participating
business unit regardless of hire date. These employ-
ees generally are eligible to participate in the Pen-
sion Plan upon attaining 21 years of age and
completing one year of eligibility service. U.S. sal-
aried employees and hourly employees (receiving
salaried benefits) hired after June 30, 2004 are not
eligible to participate in the Pension Plan, but receive
a company contribution to their individual savings
plan accounts (see Other U.S. Plans). The Pension
Plan provides defined pension benefits based on
years of credited service and either final average
earnings (salaried employees and hourly employees
receiving salaried benefits), hourly job rates or speci-
fied benefit rates (hourly and union employees).
In connection with the Temple-Inland acquisition in
February 2012, International Paper assumed admin-
istrative responsibility for the Temple-Inland Retire-
ment Plan, a defined benefit plan which covers
substantially all employees of Temple-Inland.
The Company also has three unfunded nonqualified
defined benefit pension plans: a Pension Restoration
Plan available to employees hired prior to July 1,
2004 that provides retirement benefits based on
eligible compensation in excess of limits set by the
Internal Revenue Service, and two supplemental
retirement plans for senior managers (SERP), which
is an alternative retirement plan for salaried
employees who are senior vice presidents and above
or who are designated by the chief executive officer
as participants. These nonqualified plans are only
funded to the extent of benefits paid, which totaled
$95 million, $19 million and $37 million in 2012, 2011
and 2010, respectively, and which are expected to be
$32 million in 2013. Many non-U.S. employees are
covered by various retirement benefit arrangements,
some of which are considered to be defined benefit
pension plans for accounting purposes.
OBLIGATIONS AND FUNDED STATUS
The following table shows the changes in the benefit
obligation and plan assets for 2012 and 2011 , and
the plans’ funded status. The U.S. combined benefit
obligation as of December 31, 2012 increased by $3.6
billion , as a result of a decrease in the discount rate
assumption used in computing the estimated benefit
obligation as well as the acquisition of Temple-
Inland. U.S. plan assets increased by $1.9 billion ,
reflecting the acquisition of the Temple-Inland
Retirement Plan, favorable investment results and a
$44 million voluntary contribution in 2012 offset by
benefit payments.
2012 2011
In millions
U.S.
Plans
Non-
U.S.
Plans
U.S.
Plans
Non-
U.S.
Plans
Change in projected benefit
obligation:
Benefit obligation, January 1 $10,555 $183 $ 9,824 $183
Service cost 152 3 121 2
Interest cost 604 12 544 12
Settlements —(3) —(2)
Actuarial loss 1,923 30 692 —
Acquisitions 1,749 3 —4
Plan merger —— 5—
Plan amendments 20 — ——
Benefits paid (802) (8) (631) (9)
Effect of foreign currency
exchange rate movements —3 —(7)
Benefit obligation, December 31 $14,201 $223 $10,555 $183
Change in plan assets:
Fair value of plan assets $ 8,185 $155 $ 8,344 $156
Actual return on plan assets 1,183 18 152 4
Company contributions 139 8 319 12
Benefits paid (802) (8) (631) (9)
Settlements —(3) —(2)
Acquisitions 1,406 — ——
Plan merger —— 1—
Effect of foreign currency
exchange rate movements —1 —(6)
Fair value of plan assets,
December 31 $10,111 $171 $ 8,185 $155
Funded status, December 31 $ (4,090) $ (52) $ (2,370) $ (28)
Amounts recognized in the
consolidated balance sheet:
Non-current asset $—$4$—$11
Current liability (32) (2) (32) (2)
Non-current liability (4,058) (54) (2,338) (37)
$ (4,090) $ (52) $ (2,370) $ (28)
Amounts recognized in
accumulated other
comprehensive income under
ASC 715 (pre-tax):
Prior service cost $ 144 $ — $ 156 $ —
Net actuarial loss 5,640 34 4,453 10
$5,784 $34 $4,609 $10
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