Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

REPORT OF MANAGEMENT ON:

Financial Statements

The management of International Paper Company is responsible for the preparation of the consolidated financial statements in this Annual Report on Form 10-K. The consolidated financial statements have been prepared using accounting principles generally accepted in the United States of America considered appropriate in the circumstances to present fairly the Company’s consolidated financial position, results of operations and cash flows on a consistent basis. Management has also prepared the other information in this Annual Report on Form 10-K and is responsible for its accuracy and consistency with the consolidated financial statements.

As can be expected in a complex and dynamic business environment, some financial statement amounts are based on estimates and judgments. Even though estimates and judgments are used, measures have been taken to provide reasonable assurance of the integrity and reliability of the financial information contained in this Annual Report on Form 10-K. We have formed a Disclosure Committee to oversee this process.

The accompanying consolidated financial statements have been audited by the independent registered public accounting firm Deloitte & Touche LLP (PCAOB ID No. 34). During its audits, Deloitte & Touche LLP was given unrestricted access to all financial records and related data, including minutes of all meetings of shareholders and the Board of Directors and all committees of the Board of Directors. Management believes that all representations made to the independent auditors during their audits were valid and appropriate.

Internal Control Over Financial Reporting

The management of International Paper Company is also responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules (13a-15(e) and 15d-15(e) under the Exchange Act). Internal control over financial reporting is the process designed by, or under the supervision of, our principal executive officer and principal financial officer, and effected by our Board of Directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes. All internal control systems have inherent limitations, including the possibility of circumvention and overriding of controls,

and therefore can provide only reasonable assurance of achieving the designed control objectives. The Company’s internal control system is supported by written policies and procedures, contains self-monitoring mechanisms, and is audited by our internal audit function. Appropriate actions are taken by management to correct deficiencies as they are identified. Our procedures for financial reporting include the active involvement of senior management, our Audit and Finance Committee and our staff of highly qualified financial and legal professionals.

The Company has assessed the effectiveness of its internal control over financial reporting as of December 31, 2024. In making this assessment, it used the criteria described in “Internal Control – Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Based on this assessment, management believes that, as of December 31, 2024, the Company’s internal control over financial reporting was effective.

The Company’s independent registered public accounting firm, Deloitte & Touche LLP, has issued its report on the effectiveness of the Company’s internal control over financial reporting. The report appears on pages 54 through 57.

Internal Control Environment And Board Of Directors Oversight

Our internal control environment includes an enterprise-wide attitude of integrity and control consciousness that establishes a positive “tone at the top.” This is exemplified by our ethics program that includes long-standing principles and policies on ethical business conduct that require employees to maintain the highest ethical and legal standards in the conduct of International Paper business, which have been distributed to all employees. The Company provides a toll-free telephone helpline whereby any employee may anonymously report suspected violations of law or International Paper’s policy; and maintains an office of ethics and business practice. The internal control system further includes careful selection and training of supervisory and management personnel, appropriate delegation of authority and division of responsibility, dissemination of accounting and business policies throughout International Paper, and an extensive program of internal audits with management follow-up.

The Board of Directors, assisted by the Audit and Finance Committee, monitors the integrity of the Company’s financial statements and financial reporting procedures, the performance of the Company’s internal audit function and independent auditors, and other matters set forth in its charter. The

Audit and Finance Committee, which consists of independent directors, meets regularly with representatives of management, and with the independent auditors and the Internal Auditor, with and without management representatives in attendance, to review their activities. The Audit and Finance Committee Charter takes into account the New York Stock Exchange rules relating to audit committees and the SEC rules and regulations promulgated as a result of the Sarbanes-Oxley Act of 2002. The Audit and Finance Committee has reviewed and discussed the consolidated financial statements for the year ended December 31, 2024, including critical accounting policies and significant management judgments, with management and the independent auditors. The Audit and Finance Committee’s report recommending the inclusion of such financial statements in this Annual Report on Form 10-K will be set forth in our Proxy Statement.

ANDREW K. SILVERNAIL

CHAIRMAN AND CHIEF EXECUTIVE OFFICER

TIMOTHY S. NICHOLLS

SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of International Paper Company:

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of International Paper Company and subsidiaries (the "Company") as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income (loss), changes in equity, and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

We did not audit the financial statements of Ilim S.A. for the year ended December 31, 2022. The Company’s investment in Ilim S.A. was accounted for by use of the equity method and was presented as held-for-sale and within discontinued operations as of December 31, 2022, as disclosed in Note 10. The accompanying financial statements of the Company include its equity earnings in Ilim S.A. of $296 million for the year ended December 31, 2022. The financial statements of Ilim S.A. were audited by AO Business Solutions and Technologies whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for Ilim S.A. for the year ended December 31, 2022, is based solely on the report of AO Business Solutions and Technologies.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 21, 2025, expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public

accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the Audit and Finance Committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Retirement Plans — Fair value of other investments — Refer to Note 17 to the financial statements

Critical Audit Matter Description

As of December 31, 2024, the Company’s qualified Pension Plan held approximately $2.4 billion in investments whose reported value is determined based on net asset value (“NAV”). The strategic asset allocation policy prescribed by the Company’s qualified Pension Plan includes permissible investments in certain hedge funds, private equity funds, and real estate funds whose reported values

are determined based on the estimated NAV of each investment.

These NAVs are generally determined by the qualified Pension Plan’s third-party administrators or fund managers and are subject to review and oversight by management of the Company and its third-party investment advisors.

Given a lack of a readily determinable value of these investments and the subjective nature of the valuation methodologies and unobservable inputs used in these methodologies, auditing the NAV associated with these investments requires a high degree of auditor judgment and an increased extent of effort.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the determination of NAV associated with the Company’s qualified Pension Plan’s investments in hedge funds, private equity funds, and real estate funds included the following, among others:

• We tested the effectiveness of controls over the Company’s determination and evaluation of NAV, including those related to the reliability of NAVs reported by third-party administrators and fund managers.

• We inquired of management and the investment advisors regarding changes to the investment portfolio and investment strategies.

• We obtained a confirmation from the third-party custodian as of December 31, 2024 of all individual investments held in trust for the qualified Pension Plan to confirm the existence of each individual asset held in trust.

• For selected investment funds with a fiscal year end of December 31, we performed a retrospective review in which we compared the estimated fair value recorded by the Company in the December 31, 2023 financial statements, to the actual fair value of the fund (using the per-share NAV disclosed in the fund’s subsequently issued audited financial statements), to evaluate the appropriateness of management’s estimation process.

• We rolled forward the valuation from selected funds’ most recently audited financial statements to December 31, 2024. This roll forward procedure included consideration of the Company’s transactions in the fund

during the period, as well as an estimate of the funds’ returns based on an appropriate, independently obtained benchmark or index. We then compared our independent fund valuation estimate to the December 31, 2024, balance recorded by the Company. For certain selected funds, our roll forward procedures included alternative procedures, such as inspecting trust statements for observable transactions near year-end to compare to the estimated fair value.

• For certain investments, we inquired of management to understand year-over-year changes in the fund manager’s estimate of NAV and compared the fund’s return on investment to other available qualitative and quantitative information.

Income taxes — Legal entity restructuring — Refer to Note 12 to the financial statements

Critical Audit Matter Description

During 2024, the Company completed a legal entity restructuring for which a tax benefit was recognized for U.S. federal tax purposes. The tax benefit was derived from the associated tax basis and the fair value of the legal entities subject to the restructuring.

Given the complexity of the legal entity restructuring, including the interpretation of relevant tax regulations, tax authority rulings and the determination of both the associated tax basis and fair values of the legal entities involved, we identified the resulting U.S. federal tax benefit as a critical audit matter. Evaluating the reasonableness of the legal entity restructuring plan and determination of the tax basis requires a high degree of expertise and increased extent of audit effort, including the need to involve our tax specialists. In addition, evaluating the reasonableness of management's estimate of fair value of the legal entities requires a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the reasonableness of the U.S. federal tax benefit recorded in association with the legal entity restructuring included the following procedures, among others:

• We tested the effectiveness of controls over management's evaluation of the U.S. federal tax benefit, including those over the determination of the tax basis and the determination of the fair value of the

Company’s legal entities, such as controls related to management's evaluation of the forecast of revenue and EBITDA, as well as the selection of fair value assumptions, including discount rates and long-term growth rates.

• We evaluated the experience, qualifications, and objectivity of management's experts.

• With the assistance of our tax specialists, we evaluated the reasonableness of the tax basis by:

• Evaluating the underlying transactions that created the tax basis in the legal entities, on a sample basis.

• Evaluating the completeness of the tax basis adjustments.

• Evaluating management's interpretation of relevant tax regulations and tax authority rulings.

• We evaluated key business assumptions, such as revenues and EBITDA forecasts used in the fair value discounted cash flow model by:

• Performing a sensitivity analysis of the revenue and EBITDA forecasts, and their impact to fair value.

• For certain legal entities, we evaluated the reasonableness of management's forecasts of revenue and EBITDA by comparing the forecasts to historical information and information included in third-party macroeconomic benchmarking reports.

• With the assistance of our fair value specialists, we evaluated the reasonableness of the valuation methodology and valuation assumptions, for certain entities, including, discount rates, and long-term growth rates by:

• Testing the source information underlying the determination of discount rates and long-term growth rates, including the mathematical accuracy of the calculations.

• Comparing the long-term growth rates to third-party macroeconomic benchmarking reports.

• Developing a range of independent estimates for the selection of discount rates and comparing the discount rates selected by management to those ranges.

• Performing a sensitivity analysis of the discount rates and long-term growth rates used in the fair value cash flow models, and their impact to fair value.

/s/ Deloitte & Touche LLP

Memphis, Tennessee

February 21, 2025

We have served as the Company's auditor since 2002.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of International Paper Company:

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of International Paper Company and subsidiaries (the “Company”) as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2024, of the Company and our report dated February 21, 2025, expressed an unqualified opinion on those financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Report of Management on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and

regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Deloitte & Touche LLP

Memphis, Tennessee

February 21, 2025

CONSOLIDATED STATEMENT OF OPERATIONS

In millions, except per share amounts, for the years ended December 31			2024			2023			2022
NET SALES			$	18,619		$	18,916		$	21,161
COSTS AND EXPENSES
Cost of products sold			13,376			13,629			15,143
Selling and administrative expenses			1,840			1,360			1,293
Depreciation and amortization			1,305			1,432			1,040
Distribution expenses			1,475			1,575			1,783
Taxes other than payroll and income taxes			147			154			148
Restructuring and other charges, net			221			99			89
Net (gains) losses on sales and impairments of businesses			—			—			76
Net (gains) losses on sales of equity method investments			—			—			10
Net (gains) losses on sales of fixed assets			(58)			—			—
Net (gains) losses on mark to market investments			—			—			(65)
Interest expense, net			208			231			325
Non-operating pension (income) expense			(42)			54			(192)
EARNINGS (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND EQUITY EARNINGS (LOSSES)			147			382			1,511
Income tax provision (benefit)			(415)			59			(236)
Equity earnings (loss), net of taxes			(5)			(21)			(6)
EARNINGS (LOSS) FROM CONTINUING OPERATIONS			557			302			1,741
Discontinued operations, net of taxes			—			(14)			(237)
NET EARNINGS (LOSS)			557			288			1,504
BASIC EARNINGS (LOSS) PER SHARE
Earnings (loss) from continuing operations			$	1.60		$	0.87		$	4.79
Discontinued operations, net of taxes			—			(0.04)			(0.65)
Net earnings (loss)			$	1.60		$	0.83		$	4.14
DILUTED EARNINGS (LOSS) PER SHARE
Earnings (loss) from continuing operations			$	1.57		$	0.86		$	4.74
Discontinued operations, net of taxes			—			(0.04)			(0.64)
Net earnings (loss)			$	1.57		$	0.82		$	4.10

The accompanying notes are an integral part of these financial statements.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS)

In millions for the years ended December 31			2024			2023			2022
NET EARNINGS (LOSS)			$	557		$	288		$	1,504
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX
Amortization of pension and postretirement prior service costs and net loss:
U.S. plans (less tax of $22, $29 and $28)			69			87			85
Non-U.S. plans (less tax of $0, $0 and $0)			—			(1)			1
Pension and postretirement liability adjustments:
U.S. plans (less tax of $(33), $(56) and $(109))			(102)			(170)			(327)
Non-U.S. plans (less tax of $1, $0 and $1)			(3)			3			8
Change in cumulative foreign currency translation adjustment (less tax of $0, $0 and $0)			(121)			441			(28)
Net gains/losses on cash flow hedging derivatives (less tax of $0, $0 and $1)			—			—			2
TOTAL OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX			(157)			360			(259)
COMPREHENSIVE INCOME (LOSS)			400			648			1,245

The accompanying notes are an integral part of these financial statements.

CONSOLIDATED BALANCE SHEET

In millions, except per share amounts, at December 31			2024			2023
ASSETS
Current Assets
Cash and temporary investments			$	1,170		$	1,113
Accounts and notes receivable (less allowances of $30 in 2024 and $34 in 2023)			2,966			3,059
Contract assets			396			433
Inventories			1,784			1,889
Other current assets			108			114
Total Current Assets			6,424			6,608
Plants, Properties and Equipment, net			9,658			10,150
Investments			160			163
Long-Term Financial Assets of Variable Interest Entities (Note 14)			2,331			2,312
Goodwill			3,038			3,041
Overfunded Pension Plan Assets			92			118
Right of Use Assets			433			448
Deferred Charges and Other Assets			664			421
TOTAL ASSETS			$	22,800		$	23,261
LIABILITIES AND EQUITY
Current Liabilities
Notes payable and current maturities of long-term debt			$	193		$	138
Accounts payable			2,316			2,442
Accrued payroll and benefits			749			397
Other current liabilities			1,000			982
Total Current Liabilities			4,258			3,959
Long-Term Debt			5,368			5,455
Long-Term Nonrecourse Financial Liabilities of Variable Interest Entities (Note 14)			2,120			2,113
Deferred Income Taxes			1,072			1,552
Underfunded Pension Benefit Obligation			233			280
Postretirement and Postemployment Benefit Obligation			133			140
Long-Term Lease Obligations			292			312
Other Liabilities			1,151			1,095
Commitments and Contingent Liabilities (Note 13)
Equity
Common stock $1 par value, 2024 - 448.9 shares and 2023 - 448.9 shares			449			449
Paid-in capital			4,732			4,730
Retained earnings			9,393			9,491
Accumulated other comprehensive loss			(1,722)			(1,565)
			12,852			13,105
Less: Common stock held in treasury, at cost, 2024 – 101.5 shares and 2023 – 102.9 shares			4,679			4,750
Total Equity			8,173			8,355
TOTAL LIABILITIES AND EQUITY			$	22,800		$	23,261

The accompanying notes are an integral part of these financial statements.

CONSOLIDATED STATEMENT OF CASH FLOWS

In millions for the years ended December 31			2024			2023			2022
OPERATING ACTIVITIES
Net earnings (loss)			$	557		$	288		$	1,504
Depreciation and amortization			1,305			1,432			1,040
Deferred income tax provision (benefit), net			(473)			(156)			(773)
Restructuring and other charges, net			221			99			89
Periodic pension (income) expense, net			1			94			(116)
Net (gains) losses on mark to market investments			—			—			(65)
Net (gains) losses on sales and impairments of businesses			—			—			76
Net (gains) losses on sales and impairments of equity method investments			—			153			543
Net (gains) losses on sales of fixed assets			(58)			—			—
Equity method dividends received			—			13			204
Equity (earnings) losses, net			5			(108)			(291)
Other, net			130			20			108
Changes in operating assets and liabilities
Accounts and notes receivable			59			255			(59)
Contract assets			36			48			(103)
Inventories			12			73			(162)
Accounts payable and other liabilities			(140)			(402)			110
Interest payable			16			(19)			41
Other			7			43			28
CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES			1,678			1,833			2,174
INVESTMENT ACTIVITIES
Invested in capital projects			(921)			(1,141)			(931)
Proceeds from sales of equity method investments, net of transaction costs			—			472			—
Proceeds from exchange of equity securities			—			—			311
Proceeds from insurance recoveries			25			—			—
Proceeds from sale of fixed assets			91			4			13
Other			(3)			(3)			(1)
CASH PROVIDED BY (USED FOR) INVESTMENT ACTIVITIES			(808)			(668)			(608)
FINANCING ACTIVITIES
Repurchases of common stock and payments of restricted stock tax withholding			(23)			(218)			(1,284)
Issuance of debt			102			783			1,011
Reduction of debt			(141)			(780)			(1,017)
Change in book overdrafts			(69)			(8)			1
Dividends paid			(643)			(642)			(673)
Net debt tender premiums paid			—			—			(89)
Other			(1)			(1)			(3)
CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES			(775)			(866)			(2,054)
Effect of Exchange Rate Changes on Cash			(38)			10			(3)
Change in Cash and Temporary Investments			57			309			(491)
Cash and Temporary Investments
Beginning of the period			1,113			804			1,295
End of the period			$	1,170		$	1,113		$	804

The accompanying notes are an integral part of these financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

In millions			Common Stock Issued			Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Common Stock Held In Treasury, At Cost									Total Equity
BALANCE, JANUARY 1, 2022			$	449		$	4,668		$	9,029		$	(1,666)		$	3,398								$	9,082
Issuance of stock for various plans, net			—			57			—			—			(75)									132
Repurchase of stock			—			—			—			—			1,284									(1,284)
Dividends ($1.850 per share)			—			—			(678)			—			—									(678)
Comprehensive income (loss)			—			—			1,504			(259)			—									1,245
BALANCE, DECEMBER 31, 2022			449			4,725			9,855			(1,925)			4,607									8,497
Issuance of stock for various plans, net			—			5			—			—			(77)									82
Repurchase of stock			—			—			—			—			220									(220)
Dividends ($1.850 per share)			—			—			(652)			—			—									(652)
Comprehensive income (loss)			—			—			288			360			—									648
BALANCE, DECEMBER 31, 2023			449			4,730			9,491			(1,565)			4,750									8,355
Issuance of stock for various plans, net			—			2			—			—			(94)									96
Repurchase of stock			—			—			—			—			23									(23)
Dividends ($1.850 per share)			—			—			(655)			—			—									(655)
Comprehensive income (loss)			—			—			557			(157)			—									400
BALANCE, DECEMBER 31, 2024			$	449		$	4,732		$	9,393		$	(1,722)		$	4,679								$	8,173

The accompanying notes are an integral part of these financial statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

NATURE OF BUSINESS

International Paper (the "Company") is a global producer of renewable fiber-based packaging and pulp products with primary markets and manufacturing operations in North America and Europe and additional markets and manufacturing operations in Latin America, North Africa and Asia. Substantially all of our businesses have experienced, and are likely to continue to experience, cycles relating to available industry capacity and general economic conditions.

FINANCIAL STATEMENTS

These consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States that require the use of management’s estimates. Actual results could differ from management’s estimates. Certain amounts from prior year have been reclassified to conform with the current year financial statement presentation.

DISCONTINUED OPERATIONS

A discontinued operation may include a component or a group of components of the Company's operations. A disposal of a component or a group of components is reported in discontinued operations if the disposal represents a strategic shift that has or will have a major effect on the Company's operations and financial results when the following occurs: (1) a component (or group of components) meets the criteria to be classified as held for sale; (2) the component or group of components is disposed of by sale; or (3) the component or group of components is disposed of other than by sale (for example, by abandonment or in a distribution to owners in a spin-off). For any component classified as held for sale or disposed of by sale or other than by sale, qualifying for presentation as a discontinued operation, the Company reports the results of operations of the discontinued operations (including any gain or loss recognized on the disposal or loss recognized on classification as held for sale of a discontinued operation), less applicable income taxes (benefit), as a separate component in the consolidated statement of operations for current and all prior periods presented. The Company also reports assets and liabilities associated with discontinued operations as separate line items on the consolidated balance sheet. The Company recorded discontinued

operations for the years ended December 31, 2023 and 2022 in connection with the sale of its equity method investment in Ilim. See Note 10 for further details.

CONSOLIDATION

The consolidated financial statements include the accounts of International Paper and subsidiaries for which we have a controlling financial interest, including variable interest entities for which we are the primary beneficiary. All significant intercompany balances and transactions are eliminated.

EQUITY METHOD INVESTMENTS

The equity method of accounting is applied for investments when the Company has significant influence over the investee’s operations, or when the investee is structured with separate capital accounts. Our material equity method investments are described in Note 10.

OTHER-THAN-TEMPORARY IMPAIRMENT

The Company evaluates our equity method investments for other-than-temporary impairment ("OTTI") when circumstances indicate the investment may be impaired. When a decline in fair value is deemed to be an OTTI, an impairment is recognized to the extent that the fair value is less than the carrying value of the investment. We consider various factors in determining whether a loss in value of an investment is other than temporary including: the length of time and the extent to which the fair value has been below cost, the financial condition of the investee, and our intent and ability to retain the investment for a period of time sufficient to allow for recovery of value. Management makes certain judgments and estimates in its assessment including but not limited to: identifying if circumstances indicate a decline in value is other than temporary, expectations about operations, as well as industry, financial, regulatory and market factors.

BUSINESS COMBINATIONS

The Company allocates the total consideration of the assets acquired and liabilities assumed based on their estimated fair value as of the business combination date. In developing estimates of fair values for long-lived assets, including identifiable intangible assets, the Company utilizes a variety of inputs including forecasted cash flows, anticipated growth rates, discount rates, estimated replacement costs and depreciation and obsolescence factors. Determining the fair value for specifically identified intangible assets such as customer lists and developed technology involves judgment. We may refine our estimates and make adjustments to the

assets acquired and liabilities assumed over a measurement period, not to exceed one year. Upon the conclusion of the measurement period or the final determination of the values of assets acquired and liabilities assumed, whichever comes first, any subsequent adjustments are charged to the consolidated statement of operations. Subsequent actual results of the underlying business activity supporting the specifically identified intangible assets could change, requiring us to record impairment charges or adjust their economic lives in future periods. See Note 7 for further details.

RESTRUCTURING LIABILITIES AND COSTS

For operations to be closed or restructured, a liability and related expense is recorded in the period when operations cease. For termination costs associated with employees covered by a written or substantive plan, a liability is recorded when it is probable that employees will be entitled to benefits and the amount can be reasonably estimated. For termination costs associated with employees not covered by a written and broadly communicated policy covering involuntary termination benefits (severance plan), a liability is recorded for costs to terminate employees (one-time termination benefits) when the termination plan has been approved and committed to by management, the employees to be terminated have been identified, the termination plan benefit terms are communicated, the employees identified in the plan have been notified and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. The timing and amount of an accrual is dependent upon the type of benefits granted, the timing of communication and other provisions that may be provided in the benefit plan. The accounting for each termination is evaluated individually. See Note 6 for further details.

REVENUE RECOGNITION

Generally, the Company recognizes revenue on a point-in-time basis when the Company transfers control of the goods to the customer. For customized goods where the Company has a legally enforceable right to payment for the goods, the Company recognizes revenue over time, which generally is, as the goods are produced.

The Company’s revenue is primarily derived from fixed consideration; however, we do have contract terms that give rise to variable consideration, primarily volume rebates, early payment discounts and other customer refunds. The Company estimates its volume rebates at the individual customer level based on the most likely amount method outlined in ASC 606 "Revenue from Contracts with Customers".

The Company estimates early payment discounts and other customer refunds based on the historical experience across the Company's portfolio of customers to record reductions in revenue that is consistent with the expected value method outlined in ASC 606. Management has concluded that these methods result in the best estimate of the consideration the Company will be entitled to from its customers.

The Company has elected to present all sales taxes on a net basis, account for shipping and handling activities as fulfillment activities, recognize the incremental costs of obtaining a contract as expense when incurred if the amortization period of the asset the Company would recognize is one year or less, and not record interest income or interest expense when the difference in timing of control or transfer and customer payment is one year or less. See Note 3 for further details.

TEMPORARY INVESTMENTS

Temporary investments with an original maturity of three months or less and money market funds with greater than three-month maturities but with the right to redeem without notice are treated as cash equivalents and are stated at cost, which approximates market value. See Note 8 for further details.

INVENTORIES

Inventories include all costs directly associated with manufacturing products: materials, labor, and manufacturing overhead. In the United States, costs of raw materials and finished pulp and paper products are generally determined using the last-in, first-out method. These inventories are measured at the lower of cost or market. Other inventories are valued using the first-in, first-out or average cost methods. These inventories are measured at the lower of cost or net realizable value. See Note 8 for further details.

LEASED ASSETS

Operating lease right of use ("ROU") assets and liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term. The Company's leases may include options to extend or terminate the lease. These options to extend are included in the lease term when it is reasonably certain that we will exercise that option. Some leases have variable payments, however, because they are not based on an index or rate, they are not included in the ROU assets and liabilities. Variable payments for real estate leases primarily relate to common area maintenance, insurance, taxes and utilities. Variable payments for equipment, vehicles, and leases within

supply agreements primarily relate to usage, repairs and maintenance. As the implicit rate is not readily determinable for most of the Company's leases, the Company applies a portfolio approach using an estimated incremental borrowing rate to determine the initial present value of lease payments over the lease terms on a collateralized basis over a similar term, which is based on market and company specific information. We use the unsecured borrowing rate and risk-adjust that rate to approximate a collateralized rate, and apply the rate based on the currency of the lease, which is updated on a quarterly basis for measurement of new lease liabilities. Leases having a lease term of twelve months or less are not recorded on the balance sheet and the related lease expense is recognized on a straight-line basis over the term of the lease. In addition, the Company has applied the practical expedient to account for the lease and non-lease components as a single lease component for all of the Company's leases except for certain gas and chemical agreements. See Note 9 for further details.

PLANTS, PROPERTIES AND EQUIPMENT

Plants, properties and equipment are stated at cost, less accumulated depreciation. Expenditures for betterments are capitalized, whereas normal repairs and maintenance are expensed as incurred. The units-of-production method of depreciation is used for pulp and paper mills, and the straight-line method is used for other plants and equipment. If a decision is made to abandon plants, properties or equipment before the end of its useful life, depreciation expense is revised to reflect the shortened useful life. See Note 8 for further details.

GOODWILL

Annual evaluation for possible goodwill impairment is performed as of the beginning of the fourth quarter of each year, with additional interim evaluation performed when management believes that it is more likely than not, that events or circumstances have occurred that would result in the impairment of a reporting unit’s goodwill.

The Company has the option to evaluate goodwill for impairment by first performing a qualitative assessment of events and circumstances to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, the Company determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amounts, then the quantitative goodwill impairment test is not required to be performed. If the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, or if the

Company does not elect the option to perform an initial qualitative assessment, the Company is required to perform the quantitative goodwill impairment test. In performing this evaluation, the Company estimates the fair value of its reporting unit using a weighted approach based on discounted future cash flows, market multiples and transaction multiples. The determination of fair value using the discounted cash flow approach requires management to make significant estimates and assumptions related to forecasts of future revenues, operating profit margins, and discount rates. The determination of fair value using market multiples and transaction multiples requires management to make significant assumptions related to revenue multiples and adjusted earnings before interest, taxes, depreciation, and amortization ("EBITDA") multiples. For reporting units whose carrying amount is in excess of their estimated fair value, the reporting unit will record an impairment charge by the amount that the carrying amount exceeds the reporting unit's fair value, not to exceed the total amount of goodwill allocated to the reporting unit.

IMPAIRMENT OF LONG-LIVED ASSETS

Long-lived assets are reviewed for impairment upon the occurrence of events or changes in circumstances that indicate that the carrying value of the assets may not be recoverable. A recoverability test is performed by comparing the undiscounted cash flows to carrying value of the assets. The inputs related to the undiscounted cash flows requires judgments as to whether assets are held and used or held for sale, the weighting of operational alternatives being considered by management and estimates of the amount and timing of expected future cash flows from the use of the long-lived assets generated by their use. If the carrying amount is less than the undiscounted cash flows, the fair value of the assets is compared to the carrying value to determine if they are impaired. We estimate fair value using discounted cash flows and other valuation techniques as needed. Impaired assets are recorded at their estimated fair value.

INCOME TAXES

International Paper uses the asset and liability method of accounting for income taxes whereby deferred income taxes are recorded for the future tax consequences attributable to differences between the financial statement and tax bases of assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets and liabilities are remeasured to reflect new tax rates in the periods rate changes are enacted.

International Paper records its global tax provision based on the respective tax rules and regulations for the jurisdictions in which it operates. Where the Company believes that a tax position is supportable for income tax purposes, the item is included in its income tax returns. Where treatment of a position is uncertain, liabilities are recorded based upon the Company’s evaluation of the “more likely than not” outcome considering technical merits of the position based on specific tax regulations and facts of each matter. Changes to recorded liabilities are only made when an identifiable event occurs that changes the likely outcome, such as settlement with the relevant tax authority, the expiration of statutes of limitation for the subject tax year, change in tax laws, or recent court cases that are relevant to the matter. Accrued interest related to these uncertain tax positions is recorded in our consolidated statement of operations in Interest expense, net.

The judgments and estimates made by the Company are based on management’s evaluation of the technical merits of a matter, assisted as necessary by consultation with outside consultants, historical experience and other assumptions that management believes are appropriate and reasonable under current circumstances. Actual resolution of these matters may differ from recorded estimated amounts, resulting in adjustments that could materially affect future financial statements. See Note 12 for further details.

Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. Significant judgment is required in assessing the need for and magnitude of appropriate valuation allowances against deferred tax assets. This assessment is completed by tax jurisdiction and relies on both positive and negative evidence available, with significant weight placed on recent financial results. Cumulative reported pre-tax income is considered objectively verifiable positive evidence of our ability to generate positive pre-tax income in the future. In accordance with GAAP, when there is a recent history of pre-tax losses, there is little or no weight placed on forecasts for purposes of assessing the recoverability of our deferred tax assets. When necessary, we use systematic and logical methods to estimate when deferred tax liabilities will reverse and generate taxable income and when deferred tax assets will reverse and generate tax deductions. Assumptions, judgment, and the use of estimates are required when scheduling the reversal of deferred tax assets and liabilities, and the exercise is inherently complex and subjective. The realization of these assets is dependent on generating future taxable income, as well as

successful implementation of various tax planning strategies.

International Paper uses the flow-through method to account for investment tax credits earned on eligible open-loop biomass facilities and combined heat and power system expenditures. Under this method, the investment tax credits are recognized as a reduction to income tax expense in the year they are earned rather than a reduction in the asset basis.

ENVIRONMENTAL REMEDIATION COSTS

Costs associated with environmental remediation obligations are accrued when such costs are probable and reasonably estimable. Such accruals are adjusted as further information develops or circumstances change. See Note 13 for further details.

TRANSLATION OF FINANCIAL STATEMENTS

Balance sheets of international operations are translated into U.S. dollars at year-end exchange rates, while statements of operations are translated at average rates. Adjustments resulting from financial statement translations are included as cumulative translation adjustments in Accumulated other comprehensive income (loss).

FAIR VALUE MEASUREMENTS

The guidance for fair value measurements and disclosures sets out a fair value hierarchy that groups fair value measurement inputs into the following three classifications:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market-based inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3: Unobservable inputs for the asset or liability reflecting the reporting entity’s own assumptions or external inputs from inactive markets.

Transfers between levels are recognized at the end of the reporting period.

NOTE 2 RECENT ACCOUNTING DEVELOPMENTS

Other than as described below, no new accounting pronouncement issued or effective during the fiscal year has had or is expected to have a material impact on the consolidated financial statements.

RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS

Reference Rate Reform

In March 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting." This guidance provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued. This guidance is effective upon issuance and generally can be applied through December 31, 2024. The Company has applied this guidance to account for contract modifications due to changes in reference rates as those modifications occurred. This guidance has not had a material impact on our consolidated financial statements and related disclosures.

Segment Reporting

In November 2023, the FASB issued ASU 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures." This guidance requires companies to disclose incremental segment information on an annual and interim basis. This guidance is effective for annual reporting periods beginning after December 15, 2023 and interim periods within those years beginning after December 15, 2024. Amendments are required to be applied retrospectively to all prior periods presented in the financial statements. The Company adopted this guidance as of January 1, 2024 which only impacted the related disclosure - see Note 20 - Financial Information by Business Segment and Geographic Area.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED

Disaggregation of Income Statement Expenses

In November 2024, the FASB issued ASU 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40)." This guidance requires companies to provide more detailed information of certain income statement expenses within the footnotes to the financial statements. This guidance is effective for annual reporting periods beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted and should be applied prospectively. The Company is currently evaluating the provisions of this guidance.

Income Taxes

In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures." This guidance requires companies to enhance income tax disclosures, particularly around rate reconciliations and income taxes paid information. This guidance is effective for annual reporting periods beginning after December 15, 2024. Early adoption of these amendments is permitted and amendments should be applied prospectively. The Company plans to adopt this guidance as of January 1, 2025 and will update disclosures within the Company's 2025 annual filing.

NOTE 3 REVENUE RECOGNITION

DISAGGREGATED REVENUE

						2024
Reportable Segments						Industrial Packaging						Global Cellulose Fibers						Corporate & Intersegment						Total
Primary Geographical Markets (a)
United States						$	13,386					$	2,623					$	291					$	16,300
EMEA						1,355						77						—						1,432
Pacific Rim and Asia						63						93						1						157
Americas, other than U.S.						730						—						—						730
Total						$	15,534					$	2,793					$	292					$	18,619
Operating Segments
North American Industrial Packaging						$	14,293					$	—					$	—					$	14,293
EMEA Industrial Packaging						1,355						—						—						1,355
Global Cellulose Fibers						—						2,793						—						2,793
Intrasegment Eliminations						(114)						—						—						(114)
Corporate & Intersegment Sales						—						—						292						292
Total						$	15,534					$	2,793					$	292					$	18,619

(a) Net sales are attributed to countries based on the location of the reportable segment making the sale.

						2023
Reportable Segments						Industrial Packaging						Global Cellulose Fibers						Corporate & Intersegment						Total
Primary Geographical Markets (a)
United States						$	13,340					$	2,570					$	430					$	16,340
EMEA						1,398						96						—						1,494
Pacific Rim and Asia						37						224						—						261
Americas, other than U.S.						821						—						—						821
Total						$	15,596					$	2,890					$	430					$	18,916
Operating Segments
North American Industrial Packaging						$	14,293					$	—					$	—					$	14,293
EMEA Industrial Packaging						1,398						—						—						1,398
Global Cellulose Fibers						—						2,890						—						2,890
Intrasegment Eliminations						(95)						—						—						(95)
Corporate & Intersegment Sales						—						—						430						430
Total						$	15,596					$	2,890					$	430					$	18,916

(a) Net sales are attributed to countries based on the location of the reportable segment making the sale.

						2022
Reportable Segments						Industrial Packaging						Global Cellulose Fibers						Corporate & Intersegment						Total
Primary Geographical Markets (a)
United States						$	14,970					$	3,032					$	480					$	18,482
EMEA						1,572						121						—						1,693
Pacific Rim and Asia						46						74						3						123
Americas, other than U.S.						863						—						—						863
Total						$	17,451					$	3,227					$	483					$	21,161
Operating Segments
North American Industrial Packaging						$	16,011					$	—					$	—					$	16,011
EMEA Industrial Packaging						1,572						—						—						1,572
Global Cellulose Fibers						—						3,227						—						3,227
Intrasegment Eliminations						(132)						—						—						(132)
Corporate & Intersegment Sales						—						—						483						483
Total						$	17,451					$	3,227					$	483					$	21,161

(a) Net sales are attributed to countries based on the location of the reportable segment making the sale.

REVENUE CONTRACT BALANCES

A contract asset is created when the Company recognizes revenue on its customized products prior to having an unconditional right to payment from the customer, which generally does not occur until title and risk of loss passes to the customer.

A contract liability is created when customers prepay for goods prior to the Company transferring those goods to the customer. The contract liability is reduced once control of the goods is transferred to the customer. The majority of our customer prepayments are received during the fourth quarter each year for goods that will be transferred to customers over the following twelve months. Current liabilities of $30 million and $32 million are included in Other current liabilities in the accompanying consolidated balance sheet as of December 31, 2024 and 2023, respectively. The Company also recorded a contract liability of $115 million related to a previous acquisition. The balance of this contract liability was $84 million and $92 million at December 31, 2024 and 2023, respectively, and is recorded in Other current liabilities and Other Liabilities in the accompanying consolidated balance sheet.

The difference between the opening and closing balances of the Company's contract assets and contract liabilities primarily results from the difference between the price and quantity at comparable points in time for goods which we have an unconditional right to payment or receive prepayment from the customer, respectively.

PERFORMANCE OBLIGATIONS AND SIGNIFICANT JUDGMENTS

International Paper's principal business is to manufacture and sell fiber-based packaging and pulp goods. As a general rule, none of our businesses provide equipment installation or other ancillary services outside of producing and shipping packaging and pulp products to customers.

The nature of the Company's contracts can vary based on the business, customer type and region; however, in all instances it is International Paper's customary business practice to receive a valid order from the customer, in which each parties' rights and related payment terms are clearly identifiable.

Contracts or purchase orders with customers could include a single type of product or it could include multiple types/grades of products. Regardless, the contracted price with the customer is agreed to at the individual product level outlined in the customer contracts or purchase orders. The Company does not

bundle prices; however, we do negotiate with customers on pricing and rebates for the same products based on a variety of factors (e.g. level of contractual volume, geographical location, etc.).

Management has concluded that the prices negotiated with each individual customer are representative of the stand-alone selling price of the product.

NOTE 4 EARNINGS PER SHARE ATTRIBUTABLE TO INTERNATIONAL PAPER COMPANY COMMON SHAREHOLDERS

Basic earnings per share is computed by dividing earnings by the weighted average number of common shares outstanding. Diluted earnings per share is computed assuming that all potentially dilutive securities were converted into common shares.

There are no adjustments required to be made to net income for purposes of computing basic and diluted earnings per share.

A reconciliation of the amounts included in the computation of basic earnings (loss) per share from continuing operations, and diluted earnings (loss) per share from continuing operations is as follows:

In millions, except per share amounts			2024						2023						2022
Earnings (loss) from continuing operations attributable to International Paper common shareholders			$	557					$	302					$	1,741
Weighted average common shares outstanding			347.2						346.9						363.5
Effect of dilutive securities:
Restricted performance share plan			7.0						2.2						3.5
Weighted average common shares outstanding – assuming dilution			354.2						349.1						367.0
Basic earnings (loss) per share from continuing operations			$	1.60					$	0.87					$	4.79
Diluted earnings (loss) per share from continuing operations			$	1.57					$	0.86					$	4.74

NOTE 5 OTHER COMPREHENSIVE INCOME

The following table presents changes in Accumulated Other Comprehensive Loss ("AOCI"), net of tax, reported in the consolidated financial statements for the years ended December 31:

In millions			2024			2023			2022
Defined Benefit Pension and Postretirement Adjustments
Balance at beginning of period			$	(1,276)		$	(1,195)		$	(962)
Other comprehensive income (loss) before reclassifications			(105)			(167)			(319)
Amounts reclassified from accumulated other comprehensive loss			69			86			86
Balance at end of period			(1,312)			(1,276)			(1,195)
Change in Cumulative Foreign Currency Translation Adjustments
Balance at beginning of period			(281)			(722)			(694)
Other comprehensive income (loss) before reclassifications			(121)			(76)			(38)
Amounts reclassified from accumulated other comprehensive loss			—			517			10
Balance at end of period			(402)			(281)			(722)
Net Gains and Losses on Cash Flow Hedging Derivatives
Balance at beginning of period			(8)			(8)			(10)
Amounts reclassified from accumulated other comprehensive loss			—			—			2
Balance at end of period			(8)			(8)			(8)
Total Accumulated Other Comprehensive Income (Loss) at End of Period			$	(1,722)		$	(1,565)		$	(1,925)

Reclassifications out of AOCI for the three years ended December 31 were as follows:

			Amount Reclassified from Accumulated Other Comprehensive Loss												Location of Amount Reclassified from AOCI
2024			2023			2022
In millions
Defined benefit pension and postretirement items:
Prior-service costs			$	(13)		$	(23)		$	(23)		(a)			Non-operating pension expense
Actuarial gains/(losses)			(78)			(92)			(91)			(a)			Non-operating pension expense
Total pre-tax amount			(91)			(115)			(114)
Tax (expense)/benefit			22			29			28
Net of tax			(69)			(86)			(86)
Change in cumulative foreign currency translation adjustments:
Business divestiture			—			(517)			(10)			(b)			Net (gains) losses on sales of equity method investments and Discontinued Operations, net of taxes
Tax (expense)/benefit			—			—			—
Net of tax			—			(517)			(10)
Net gains and losses on cash flow hedging derivatives:
Cash flow hedges			—			—			(3)						Interest expense, net
Total pre-tax amount			—			—			(3)
Tax (expense)/benefit			—			—			1
Total, net of tax			—			—			(2)
Total reclassifications for the period, net of tax			$	(69)		$	(603)		$	(98)

(a) These accumulated other comprehensive income (loss) components are included in the computation of net periodic pension cost (see Note 17 - Retirement Plans for additional details).

(b) See Note 10 - Equity Method Investments for additional details for 2023 amounts.

NOTE 6 RESTRUCTURING AND OTHER CHARGES, NET

2024: During 2024, restructuring and other charges, net, totaling $221 million before taxes were recorded. The charges included:

In millions						2024
80/20 strategic approach (a)						$	105
Georgetown mill closure costs (b)						119
Other restructuring items						(3)
Total						$	221

(a) Severance and other costs related to the resource alignment component of our 80/20 strategic approach. These severance and other costs include $61 million, $42 million and $2 million in the Corporate, Industrial Packaging and Global Cellulose Fibers segments, respectively. The severance charges are recorded in Accrued payroll and benefits and Other Liabilities in the accompanying consolidated balance sheet. The majority of these charges will be paid in 2025.

(b) Includes $39 million of severance charges recorded in Accrued payroll and benefits in the accompanying consolidated balance sheet, $34 million of inventory charges recorded in Inventories in the accompanying consolidated balance sheet and $46 million of other costs recorded in Other current liabilities and Other Liabilities in the accompanying consolidated balance sheet, associated with the permanent closure of our Georgetown, South Carolina mill. The majority of the severance charges will be paid in 2025.

2023: During 2023, restructuring and other charges, net, totaling $99 million before taxes were recorded. The charges included:

In millions						2023
Orange, Texas mill closure costs (a)						$	81
Pensacola mill and Riegelwood mill pulp machine shutdowns (b)						37
Building a Better IP (c)						(19)
Total						$	99

(a) Includes $25 million of severance charges, $30 million of inventory charges and $26 million of other costs associated with the closure of our containerboard mill in Orange, Texas. The majority of the severance charges were paid in 2024.

(b) Includes $21 million of severance charges, $12 million of inventory charges and $4 million of other costs associated with the permanent shutdown of pulp machines at our Riegelwood, North Carolina and Pensacola, Florida mills. The majority of the severance charges were paid in 2024.

(c) Revision of severance estimates related to our Building a Better IP initiative.

2022: During 2022, restructuring and other charges, net, totaling $89 million before taxes were recorded. These charges included:

In millions						2022
Early debt extinguishment costs (see Note 16)						$	93
Other restructuring items						(4)
Total						$	89

NOTE 7 ACQUISITIONS

COMPLETED BUSINESS COMBINATION OF DS SMITH

2024: On April 16, 2024, the Company issued an announcement, pursuant to Rule 2.7 of the United Kingdom City Code on Takeovers and Mergers, disclosing the terms of a recommended offer by the Company to acquire the entire issued and to be issued share capital of DS Smith Plc, a public limited company incorporated in England and Wales (“DS Smith”), in an all-stock transaction (the “Business Combination”). Costs related to the transaction were $86 million for the year ended December 31, 2024 and were recorded in selling and administrative expenses in the accompanying consolidated statement of operations.

On January 24, 2025, the European Commission issued its Phase I clearance of the business combination, conditional on International Paper entering into commitments to divest its plants in Mortagne, Saint-Amand, and Cabourg (France), Over (Portugal) and Bilbao (Spain). As such, the Company has agreed to divest these locations.

On January 31, 2025, the Company closed on the acquisition of the entire issued and to be issued share capital of DS Smith. Upon closing of the acquisition, IP issued 0.1285 shares for each DS Smith share, resulting in the issuance of 178,126,631 new shares of IP common stock ("New Company Common Stock"). As a result of the share issuance, the holders of the New Company Common Stock own approximately 34.1% of the Company's outstanding share capital. Based on the issuance of 178,126,631 new shares and the closing price of $55.63 on the close of January 31, 2025, the total purchase consideration for the completed acquisition was approximately $9.9 billion. On February 4, 2025, the Company began trading the New Company Common Stock and continues to be listed on the New York Stock Exchange under the symbol "IP" and via a secondary listing on the London Stock Exchange under the symbol "IPC". The headquarters of the combined company is based in Memphis, Tennessee, and the EMEA headquarters has been established at DS Smith's existing main office in London.

NOTE 8 SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION

TEMPORARY INVESTMENTS

Temporary investments totaled $990 million and $950 million at December 31, 2024 and 2023, respectively.

ACCOUNTS AND NOTES RECEIVABLE

Accounts and notes receivable, net, by classification were:

In millions at December 31			2024			2023
Accounts and notes receivable:
Trade (less allowances of $30 in 2024 and $34 in 2023)			$	2,703		$	2,841
Other			263			218
Total			$	2,966		$	3,059

INVENTORIES

In millions at December 31			2024			2023
Raw materials			$	188		$	229
Finished pulp and packaging products			934			975
Operating supplies			623			622
Other			39			63
Inventories			$	1,784		$	1,889

The last-in, first-out inventory method is used to value most of International Paper’s U.S. inventories. Approximately 81% of total raw materials and finished products inventories were valued using this method. The last-in, first-out inventory reserve was $336 million and $343 million at December 31, 2024 and 2023, respectively.

PLANTS, PROPERTIES AND EQUIPMENT

In millions at December 31			2024			2023
Pulp and packaging facilities			$	28,249		$	28,661
Other properties and equipment			1,031			1,050
Gross cost			29,280			29,711
Less: Accumulated depreciation			19,622			19,561
Plants, properties and equipment, net			$	9,658		$	10,150

Non-cash additions to plants, properties and equipment included within accounts payable were $110 million, $141 million and $185 million at December 31, 2024, 2023 and 2022, respectively.

Annual straight-line depreciable lives generally are, for buildings - 20 to 40 years, and for machinery and equipment - 3 to 20 years. Depreciation expense was $1.3 billion, $1.4 billion and $996 million for the years ended December 31, 2024, 2023 and 2022. Depreciation expense for the years ended December 31, 2024 and December 31, 2023, includes $233 million and $422 million, respectively,

of accelerated depreciation related to mill strategic actions and other 80/20 strategic actions. Cost of products sold excludes depreciation and amortization expense.

ACCOUNTS PAYABLE

Under a supplier finance program, International Paper agrees to pay a bank the stated amount of confirmed invoices from its designated suppliers on the original maturity dates of the invoices. International Paper or the bank may terminate the agreement upon at least 90 days’ notice. The supplier invoices that have been confirmed as valid under the program require payment in full on the due date with no terms exceeding 180 days. The accounts payable balance included $115 million and $122 million of supplier finance program liabilities as of December 31, 2024 and 2023, respectively.

The following table presents supplier finance program obligations confirmed and paid for the years ended December 31, 2024 and 2023:

In millions
Confirmed obligations outstanding at December 31, 2022			$	122
Invoiced confirmed during the year			594
Confirmed invoices paid during the year			(594)
Confirmed obligations outstanding at December 31, 2023			122
Invoiced confirmed during the year			516
Confirmed invoices paid during the year			(523)
Confirmed obligations outstanding at December 31, 2024			$	115

INTEREST

Interest payments of $437 million, $463 million and $380 million were made during the years ended December 31, 2024, 2023 and 2022, respectively.

Amounts related to interest were as follows:

In millions			2024			2023			2022
Interest expense			$	430		$	421		$	403
Interest income			222			190			78
Capitalized interest costs			21			22			18

ASSET RETIREMENT OBLIGATIONS

At December 31, 2024 and 2023, we had recorded liabilities of $128 million and $103 million, respectively, related to asset retirement obligations.

In connection with potential future closures or redesigns of certain production facilities, it is possible that the Company may be required to take steps to remove certain materials from these facilities.

Applicable regulations and standards provide that the removal of certain materials would only be required if

the facility were to be demolished or underwent major renovations. At this time, any such obligations have an indeterminate settlement date, and the Company believes that adequate information does not exist to apply an expected-present-value technique to estimate any such potential obligations. Accordingly, the Company does not record a liability for such remediation until a decision is made that allows reasonable estimation of the timing of such remediation.

NOTE 9 LEASES

International Paper leases various real estate, including certain operating facilities, warehouses, office space and land. The Company also leases material handling equipment, vehicles, and certain other equipment. The Company's leases have remaining lease terms of up to 29 years.

COMPONENTS OF LEASE EXPENSE

In millions			2024			2023			2022
Operating lease costs, net			$	188		$	177		$	153
Variable lease costs			52			39			39
Short-term lease costs, net			74			71			57
Finance lease cost
Amortization of lease assets			11			12			11
Interest on lease liabilities			3			3			3
Total lease cost, net			$	328		$	302		$	263

SUPPLEMENTAL BALANCE SHEET INFORMATION RELATED TO LEASES

In millions			Classification			2024			2023
Assets
Operating lease assets			Right of use assets			$	433		$	448
Finance lease assets			Plants, properties and equipment, net (a)			39			47
Total leased assets						$	472		$	495
Liabilities
Current
Operating			Other current liabilities			$	156		$	153
Finance			Notes payable and current maturities of long-term debt			11			11
Noncurrent
Operating			Long-term lease obligations			292			312
Finance			Long-term debt			38			44
Total lease liabilities						$	497		$	520

(a) Finance leases are recorded net of accumulated amortization of $70 million and $67 million at December 31, 2024 and 2023, respectively.

LEASE TERM AND DISCOUNT RATE

In millions			2024			2023
Weighted average remaining lease term (years)
Operating leases			3.6 years			4.0 years
Finance leases			7.2 years			7.7 years
Weighted average discount rate
Operating leases			4.34		%	3.99		%
Finance leases			4.93		%	4.78		%

SUPPLEMENTAL CASH FLOW INFORMATION RELATED TO LEASES

In millions			2024			2023			2022
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows related to operating leases			$	202		$	180		$	160
Operating cash flows related to financing leases			3			3			3
Financing cash flows related to finance leases			9			13			10
Right of use assets obtained in exchange for lease liabilities
Operating leases			185			216			221
Finance leases			6			12			6

MATURITY OF LEASE LIABILITIES

In millions			Operating Leases			Financing Leases			Total
2025			$	175		$	13		$	188
2026			133			12			145
2027			94			10			104
2028			49			8			57
2029			21			7			28
Thereafter			21			13			34
Total lease payments			493			63			556
Less imputed interest			45			14			59
Present value of lease liabilities			$	448		$	49		$	497

NOTE 10 EQUITY METHOD INVESTMENTS

The Company accounts for the following investments under the equity method of accounting.

ILIM S.A. ("Ilim")

On September 18, 2023, pursuant to a previously announced agreement, the Company completed the

sale of its 50% equity interest in Ilim S.A. ("Ilim"), which was a joint venture that operated a pulp and paper business in Russia and its subsidiaries including Ilim Group, to its joint venture partners for $484 million in cash. The Company also completed the sale of all of its Ilim Group shares (constituting a

2.39% stake) for $24 million, and divested other non-material residual interests associated with Ilim, to its joint venture partners. Following the completed sales, the Company no longer has an interest in Ilim or any of its subsidiaries. Additionally, we incurred transaction fees of $36 million in the third quarter of 2023 in connection with the sale of our investment.

The Company reclassified currency translation adjustments in AOCI of $517 million to the investment at the completion of the transaction.

All historical results of the Ilim investment are presented as Discontinued Operations, net of taxes in the consolidated statement of operations.

The following summarizes the items comprising Equity Earnings, Impairment Charges, Tax Expense (Benefit), Discontinued Operations and Dividends related to the sale of our equity interest in Ilim:

In millions			Equity Earnings						Impairment Charges						Tax Expense (Benefit)						Discontinued Operations, net of tax (a)						Dividends
Year Ended December 31, 2022			$	296					$	533					$	—					$	(237)					$	204
Year Ended December 31, 2023			$	112					$	135					$	(9)					$	(14)					$	13

(a) Discontinued operations, net of tax is Equity Earnings less Impairment Charges and Tax Expense (Benefit).

The Company's remaining equity method investments are not material.

NOTE 11 GOODWILL AND OTHER INTANGIBLES

GOODWILL

The following table presents changes in the goodwill balances as allocated to each reportable business segment for the years ended December 31, 2024 and 2023:

In millions			Industrial Packaging						Global Cellulose Fibers						Total
Balance as of December 31, 2022
Goodwill			$	3,413					$	52					$	3,465
Accumulated impairment losses			(372)						(52)						(424)
			3,041						—						3,041
Balance as of December 31, 2023
Goodwill			3,413						52						3,465
Accumulated impairment losses			(372)						(52)						(424)
			3,041						—						3,041
Currency translation and other (a)			(3)						—						(3)
Balance as of December 31, 2024
Goodwill			3,410						52						3,462
Accumulated impairment losses			(372)						(52)						(424)
Total			$	3,038					$	—					$	3,038

(a) Represents the effects of foreign currency translations and reclassifications.

The Company performed its annual goodwill impairment testing by applying the quantitative goodwill impairment test to its North America Industrial Packaging reporting unit as of October 1, 2024. This was performed by comparing the carrying amount of the North America Industrial Packaging reporting unit to its estimated fair value. The estimated fair value of the reporting unit was calculated using a weighted approach based on discounted future cash flows, market multiples and transaction multiples which are classified as Level 2 and Level 3 within the fair value hierarchy. The determination of fair value using the discounted cash flow approach requires management to make significant estimates and assumptions related to forecasts of future revenues, operating profit margins, and discount rates. The determination of fair value using market multiples and transaction multiples requires management to make significant assumptions related to revenue multiples and adjusted earnings before interest, taxes, depreciation,

and amortization ("EBITDA") multiples. The results of our quantitative goodwill impairment test indicated that the carrying amount did not exceed the estimated fair value of the North America Industrial Packaging reporting unit.

In the fourth quarter of 2022, the Company performed the quantitative goodwill impairment test related to its EMEA Industrial Packaging reporting unit and estimated fair value in the same manner noted above. The results of our quantitative goodwill impairment test indicated that the carrying amount exceeded the estimated fair value of the EMEA Industrial Packaging reporting unit and it was determined that all of the goodwill in the reporting unit, totaling $76 million, was impaired. The decline in the fair value of EMEA Industrial Packaging and resulting impairment charge was due to the impacts of certain negative macroeconomic conditions, including the impacts from inflation and the geopolitical environment to the reporting unit.

OTHER INTANGIBLES

Identifiable intangible assets are recorded in Deferred Charges and Other Assets in the accompanying consolidated balance sheet and comprised the following:

			2024									2023
In millions at December 31			Gross Carrying Amount			Accumulated Amortization			Net Intangible Assets			Gross Carrying Amount			Accumulated Amortization			Net Intangible Assets
Customer relationships and lists			$	489		$	360		$	129		$	494		$	335		$	159
Tradenames, patents and trademarks, and developed technology			170			162			8			170			154			16
Land and water rights			8			2			6			8			2			6
Other			19			17			2			21			19			2
Total			$	686		$	541		$	145		$	693		$	510		$	183

The Company recognized the following amounts as amortization expense related to intangible assets:

In millions			2024			2023			2022
Amortization expense related to intangible assets			$	37		$	37		$	44

Based on current intangibles subject to amortization, estimated amortization expense for each of the succeeding years is as follows: 2025 – $38 million, 2026 – $29 million, 2027 – $10 million, 2028 – $8 million, 2029 – $7 million, and cumulatively thereafter – $47 million.

NOTE 12 INCOME TAXES

The components of International Paper’s earnings from continuing operations before income taxes and equity earnings by taxing jurisdiction were as follows:

In millions			2024			2023			2022
Earnings (loss)
U.S.			$	(140)		$	129		$	1,469
Non-U.S.			287			253			42
Earnings (loss) from continuing operations before income taxes and equity earnings (losses)			$	147		$	382		$	1,511

The provision (benefit) for income taxes from continuing operations (excluding noncontrolling interests) by taxing jurisdiction was as follows:

In millions			2024			2023			2022
Current tax provision (benefit)
U.S. federal			$	(4)		$	157		$	454
U.S. state and local			20			16			56
Non-U.S.			42			42			27
			$	58		$	215		$	537
Deferred tax provision (benefit)
U.S. federal			$	(367)		$	(164)		$	(775)
U.S. state and local			(98)			3			(39)
Non-U.S.			(8)			5			41
			$	(473)		$	(156)		$	(773)
Income tax provision (benefit)			$	(415)		$	59		$	(236)

The Company’s deferred income tax provision (benefit) includes a $1 million expense, a $6 million benefit and an $3 million benefit for 2024, 2023 and 2022, respectively, for the effect of various changes in non-U.S. and U.S. federal and state tax rates.

International Paper made income tax payments, net of refunds, of $394 million, $340 million and $345 million in 2024, 2023 and 2022, respectively.

A reconciliation of income tax expense using the statutory U.S. income tax rate compared with the actual income tax provision follows:

In millions			2024			2023			2022
Earnings (loss) from continuing operations before income taxes and equity earnings			$	147		$	382		$	1,511
Statutory U.S. income tax rate			21		%	21		%	21		%
Tax expense (benefit) using statutory U.S. income tax rate			31			80			317
State and local income taxes			(62)			2			44
Impact of rate differential on non-U.S. permanent differences and earnings			(26)			(10)			1
Foreign valuation allowance			—			—			45
Tax expense (benefit) on exchange of Sylvamo shares			—			—			(56)
Non-taxable income			(4)			(2)			(2)
Non-deductible business expenses			21			7			2
Non-deductible impairments			—			—			16
Non-deductible compensation			8			7			13
Tax audits			—			(4)			6
Timber Monetization Audit Settlement			—			—			(604)
Foreign derived intangible income deduction			—			2			(8)
US tax on non-U.S. earnings (GILTI and Subpart F)			32			—			27
Foreign tax credits			7			8			8
General business and other tax credits			(31)			(38)			(43)
Tax expense (benefit) on equity earnings			(1)			(4)			(1)
Legal entity restructuring expense (benefit)			(391)			4			—
Other, net			1			7			(1)
Income tax provision (benefit)			$	(415)		$	59		$	(236)
Effective income tax rate			(282)		%	15		%	(16)		%

The tax effects of significant temporary differences, representing deferred income tax assets and liabilities at December 31, 2024 and 2023, were as follows:

In millions			2024			2023
Deferred income tax assets:
Postretirement benefit accruals			$	72		$	67
Pension obligations			63			61
Tax credits			183			182
Net operating and capital loss carryforwards			1,181			699
Compensation reserves			224			146
Lease obligations			112			116
Environmental reserves			131			114
Investments			4			—
Research and development expenditures			240			162
Other			203			157
Gross deferred income tax assets			$	2,413		$	1,704
Less: valuation allowance (a)			(1,201)			(848)
Net deferred income tax asset			$	1,212		$	856
Deferred income tax liabilities:
Intangibles			$	(133)		$	(141)
Investments			—			3
Right of use assets			(112)			(116)
Plants, properties and equipment			(1,528)			(1,650)
Forestlands, related installment sales, and investment in subsidiary			(486)			(485)
Gross deferred income tax liabilities			$	(2,259)		$	(2,389)
Net deferred income tax liability			$	(1,047)		$	(1,533)

(a) The net change in the total valuation allowance for the years ended December 31, 2024 and 2023 was an increase of $353 million and a increase of $171 million, respectively.

Deferred income tax assets and liabilities are recorded in the accompanying consolidated balance sheet under the captions Deferred charges and other assets and Deferred income taxes, respectively. The $486 million of deferred tax liabilities for forestlands, related installment sales, and investment in subsidiary is attributable to a 2007 Temple-Inland installment sale of forestlands (see Note 14 - Variable Interest Entities).

During 2024, the Company completed an internal legal entity restructuring for which a capital loss was recognized for U.S. federal and state income tax purposes resulting in a tax benefit of $416 million. The Company intends to carry back a portion of the loss to prior years and has set up a non-current receivable in the amount of $279 million. The remaining capital loss will be carried forward to offset future capital gains, and, as such, the Company recorded a deferred tax asset in the amount of $137 million for the year ended December 31, 2024.

A reconciliation of the beginning and ending amount of unrecognized tax benefits recorded in Other Liabilities in the accompanying consolidated balance

sheet for the years ended December 31, 2024, 2023 and 2022 is as follows:

In millions			2024			2023			2022
Balance at January 1			$	(173)		$	(177)		$	(166)
(Additions) reductions for tax positions related to current year			(10)			(13)			(7)
(Additions) for tax positions related to prior years			(40)			(11)			(10)
Reductions for tax positions related to prior years			7			1			3
Settlements			4			17			1
Expiration of statutes of limitations			6			11			1
Currency translation adjustment			2			(1)			1
Balance at December 31			$	(204)		$	(173)		$	(177)

If the Company were to prevail on the unrecognized tax benefits recorded, substantially all of the balances at December 31, 2024, 2023 and 2022 would benefit the effective tax rate. Pending audit settlements and the expiration of statutes of limitation are not expected to reduce uncertain tax positions during the next twelve months.

The Company accrues interest on unrecognized tax benefits as a component of interest expense. Penalties, if incurred, are recognized as a component of income tax expense. The Company had approximately $50 million and $34 million accrued for the payment of estimated interest and penalties associated with unrecognized tax benefits at December 31, 2024 and 2023, respectively.

The Company is currently subject to audits in the United States and other taxing jurisdictions around the world. Generally, tax years 2012 through 2023 remain open and subject to examination by the relevant tax authorities. The Company frequently faces challenges regarding the amount of taxes due. These challenges include positions taken by the Company related to the timing, nature, and amount of deductions and the allocation of income among various tax jurisdictions.

On September 3, 2024, the Company received the Unagreed Revenue Agent Report from the Internal Revenue Service relating to investment tax credits for the 2017-2019 years that currently are under examination. The estimated net incremental tax liability associated with the proposed adjustments would be approximately $50 million. The Company disagrees with the proposed adjustments and initiated the administrative appeals process on October 30, 2024 with the filing of our Protest of the proposed adjustments. An unfavorable resolution in the administrative appeals process or future tax litigation could result in cash tax payments and could adversely impact the effective tax rate.

The Organization for Economic Cooperation and Development has proposed a 15% global minimum tax applied on a country-by-country basis (the "Pillar Two rule"), and many countries, including countries in which we operate, have enacted or begun the process of enacting laws adopting the Pillar Two rule. The first component of the Pillar Two rule became effective as of January 1, 2024 and did not have a material impact on the Company’s effective tax rate. The second component is expected to go into effect in 2025.

The Company provides for foreign withholding taxes and any applicable U.S. state income taxes on earnings intended to be repatriated from non-U.S. subsidiaries, which we believe will be limited in the future to each year's current earnings. No provision for these taxes on approximately $1.1 billion of undistributed earnings of non-U.S. subsidiaries as of December 31, 2024 has been made, as these earnings are considered indefinitely invested. Determination of the amount of taxes that might be paid on these undistributed earnings if eventually remitted in a taxable manner is not practicable.

If management decided to monetize the Company’s foreign investments, we would recognize the tax cost related to the excess of the book value over the tax basis of those investments. This would include foreign withholding taxes and any applicable U.S. Federal and state income taxes. Determination of the

tax cost that would be incurred upon monetization of the Company’s foreign investments is not practicable; however, we do not believe it would be material.

The following details the scheduled expiration dates of the Company’s net operating loss and income tax credit and capital loss carryforwards:

In millions			2025 Through 2034			2035 Through 2044			Indefinite			Total
U.S. federal and non-U.S. NOLs			$	3		$	603		$	397		$	1,003
State taxing jurisdiction NOLs (a)			28			9			—			37
U.S. federal, non- U.S. and state tax credit carryforwards (a)			73			14			96			183
U.S. federal and state capital loss carryforwards (a)			141			—			—			141
Total			$	245		$	626		$	493		$	1,364
Less: valuation allowance (a)			(58)			(612)			(449)			(1,119)
Total, net			$	187		$	14		$	44		$	245

(a) State amounts are presented net of federal benefit.

NOTE 13 COMMITMENTS AND CONTINGENT LIABILITIES

GENERAL

The Company is involved in various inquiries, administrative proceedings and litigation relating to environmental and safety matters, personal injury, product liability, labor and employment, contracts, sales of property, intellectual property, tax, and other matters, that arise in the normal course of business. These matters may raise difficult and complicated legal issues and may be subject to many uncertainties and complexities. Moreover, some of these matters allege substantial or indeterminate monetary damages.

International Paper reviews inquiries, administrative proceedings and litigation, including with respect to environmental matters, on an ongoing basis and establishes an estimated liability for specific legal proceedings and other loss contingencies when it determines that the likelihood of an unfavorable outcome is probable, and the amount of the loss can be reasonably estimated. In addition, if the likelihood of an unfavorable outcome with respect to material loss contingencies is reasonably possible and International Paper is able to determine an estimate of the possible loss or range of loss, whether in excess of a related accrued liability of where there is no accrued liability, International Paper will disclose the estimate of the possible loss or range of loss. When no amount in a range of loss is more likely than any other amount in the range, the low end of the range is used as the estimate of the possible loss. International Paper’s assessment of whether a loss is probable is based on management’s assessment of the ultimate outcome of the matter.

Assessments of lawsuits and claims and the estimates reflected herein, are subject to significant judgments about future events, rely heavily on estimates and assumptions, and are otherwise subject to significant known and unknown uncertainties. The matters underlying such estimates may change from time to time and actual losses may vary significantly from current estimates. Additionally, the estimated liability for loss contingencies does not include matters or losses that are not reasonably estimable and probable.

Based on information currently known to International Paper, management believes that loss contingencies arising from pending matters, including the matters described herein, will not have a material adverse effect on the consolidated financial position or liquidity of the Company. However, in light of the inherent uncertainties involved in such matters, some of which are beyond the Company's control, and the large or

indeterminate damages sought in some of these matters, a future adverse ruling, settlement, unfavorable development, or increase in accruals with respect to these matters could result in future charges that could be materially adverse to the Company's results of operations or cash flows in any particular reporting period.

ENVIRONMENTAL AND LEGAL PROCEEDINGS

Environmental

The Company has been named as a potentially responsible party ("PRP") in environmental remediation actions under various federal and state laws, including the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended ("CERCLA"). Many of these proceedings involve the cleanup of hazardous substances at large commercial landfills that received waste from many different sources. While joint and several liability is authorized under CERCLA and equivalent state laws, as a practical matter, liability for CERCLA cleanups is typically allocated among the many PRPs. There are other remediation costs typically associated with the cleanup of hazardous substances at the Company’s current, closed and formerly-owned facilities, and recorded as liabilities in the balance sheet.

Remediation costs are recorded in the consolidated financial statements when they become probable and reasonably estimable. International Paper has estimated the probable liability associated with these environmental remediation matters, including those described herein, to be approximately $279 million and $251 million in the aggregate as of December 31, 2024 and December 31, 2023, respectively. Other than as described below, completion of required environmental remedial actions ("RAs") is not expected to have a material effect on our consolidated financial statements.

Cass Lake: One of the matters included above arises out of a closed wood-treatment facility located in Cass Lake, Minnesota. In June 2011, the U.S. Environmental Protection Agency ("EPA") selected and published a proposed soil remedy at the site. In April 2020, the EPA issued a final plan concerning clean-up standards at a portion of the site. The Company is performing RA and continues to cooperate with the EPA on the remaining remediation goals at the site. The estimated liability for the Cass Lake superfund site was $48 million and $46 million as of December 31, 2024 and December 31, 2023, respectively.

Kalamazoo River: The Company is a PRP with respect to the Allied Paper, Inc./Portage Creek/Kalamazoo River Superfund Site in Michigan. The

EPA asserts that the site is contaminated by polychlorinated biphenyls primarily as a result of discharges from various paper mills located along the Kalamazoo River, including a paper mill formerly owned by St. Regis Paper Company ("St. Regis"). The Company is a successor in interest to St. Regis.

• Operable Unit 5, Area 1: In March 2016, the Company received a special notice letter from the EPA (i) inviting participation in implementing a remedy for a portion of the site known as Operable Unit 5 ("OU5"), Area 1, and (ii) demanding reimbursement of EPA past costs totaling $37 million. In December 2016, the EPA issued a unilateral administrative order ("UAO") to the Company and other PRPs to perform the remedy. The Company responded to the UAO, agreeing to comply with the order subject to its sufficient cause defenses. The Company continues to comply with the UAO in performing remediation activities at OU5, Area 1.

• Operable Unit 1 ("OU1"): In October 2016, the Company and another PRP received a special notice letter from the EPA inviting participation in the remedial design ("RD") component of the landfill remedy for the Allied Paper Mill, which is also known as Operable Unit 1. A Record of Decision ("ROD") establishing the final landfill remedy for the Allied Paper Mill was issued by the EPA in September 2016. The Company responded to the Allied Paper Mill special notice letter in December 2016 denying liability for OU1. In 2021, the EPA initiated RA activities. In October 2022, the Company received a unilateral administrative order to perform the RA. The Company began performing the RA in 2023 and established a $27 million reserve to account for this liability in the fourth quarter of 2022. In the fourth quarter of 2024, the Company increased the reserve by $27 million to account for the reasonably estimable costs for the next phases of the RA, following an EPA approved design modification in October to the original remedial design.

The total reserve for the combined liabilities for OU5, Area 1 and OU1 at the Kalamazoo River superfund site was $29 million and $27 million as of December 31, 2024 and 2023, respectively.

The Company was named as a defendant by Georgia-Pacific Consumer Products LP, Fort James Corporation and Georgia Pacific LLC (collectively, "GP") in a contribution and cost recovery action for alleged pollution at the site related to the Company's potential CERCLA liability. NCR Corporation and Weyerhaeuser Company were also named as defendants. The lawsuit seeks contribution under CERCLA for costs purportedly expended by plaintiffs

($79 million as of the filing of the complaint) and for future remediation costs. In June 2018, the District Court issued its Final Judgment and Order, which fixed the past cost amount at approximately $50 million (plus interest to be determined) and allocated to the Company a 15% share of responsibility for those past costs. The District Court did not address responsibility for future costs in its decision. In July 2018, the Company and each of the other parties filed notices appealing the Final Judgment and prior orders incorporated into the Final Judgment. In April 2022, the Sixth Circuit Court of Appeals (the "Sixth Circuit") reversed the Final Judgment of the Court, finding that the lawsuit against the Company was time-barred by the applicable statute of limitations. In May 2022, GP filed a petition for rehearing with the Sixth Circuit, which was denied in July 2022. In November 2022, GP filed a petition for writ of certiorari with the U.S. Supreme Court. In October 2023, the U.S. Supreme Court denied GP's writ petition, thus rendering final the Sixth Circuit's decision that GP's lawsuit against the Company was time-barred. In January 2024 GP requested that the District Court’s final order declare that each party is jointly and severally liable for future costs, arguing that the Sixth Circuit decision only applies to past costs. On April 9, 2024, the District Court entered Final Judgment After Remand, declaring, consistent with the Sixth Circuit's decision, that GP’s past costs are time-barred by the applicable statute of limitations. The District Court also entered Final Judgment on Remand that all three parties, including the Company, are jointly and severally liable for future response costs at the site. The Company believes the District Court’s Final Judgment on Remand regarding liability for future costs is in error and has appealed the Final Judgment on Remand on future costs liability to the Sixth Circuit.

Harris County: International Paper and McGinnis Industrial Maintenance Corporation ("MIMC"), a subsidiary of Waste Management, Inc. ("WMI"), are PRPs at the San Jacinto River Waste Pits Superfund Site in Harris County, Texas. The PRPs have been actively participating in the activities at the site and share the costs of these activities.

In October 2017, the EPA issued a ROD selecting the final remedy for the site: removal and relocation of the waste material from both the northern and southern impoundments.

In April 2018, the PRPs entered into an Administrative Order on Consent ("AOC") with the EPA, agreeing to work together to develop the RD for the northern impoundment. The AOC does not include any agreement to perform waste removal or other construction activity at the site.

In 2020, the Company reserved the following estimated liability amounts in relation to remediation at this site: (a) $10 million for the southern impoundment; and (b) $55 million for the northern impoundment, which represented the Company's 50% share of our estimate of the low end of the range of probable remediation costs.

The Company submitted the Final Design Package for the southern impoundment to the EPA, and the EPA approved the plan in May 2021. The EPA issued a Unilateral Administrative Order for RA of the southern impoundment in August 2021. An addendum to the Final 100% RD (Amended April 2021) was submitted to the EPA for the southern impoundment in June 2022. The Company substantially completed the RA for the southern impoundment in 2024.

With respect to the northern impoundment, the PRPs submitted a Final 100% RD to EPA in July 2024. EPA provided comments at the end of October and a Revised Final 100% RD was submitted at the end of November 2024. The total estimated liability for the southern and northern impoundment was $98 million and $83 million as of December 31, 2024 and 2023, respectively. The current reserve is primarily for the Company’s 50% share of our estimate of the low end of the range of probable costs to implement the RD. Because of ongoing questions regarding cost effectiveness, timing and gathering other technical data, additional losses in excess of our recorded liability are possible.

Versailles Pond: The Company is a responsible party for the investigation and remediation of Versailles Pond, a 57-acre dammed river impoundment that historically received paperboard mill wastewater in Sprague, Connecticut. A comprehensive investigation has determined that Versailles Pond is contaminated with polychlorinated biphenyls, mercury, and metals. A preliminary remediation plan was prepared in the third quarter of 2023. Negotiations with state and federal governmental officials are ongoing regarding the scope and timing of the remediation. The total estimated liability for Versailles Pond was $30 million as of both December 31, 2024 and December 31, 2023.

Asbestos-Related Matters

We have been named as a defendant in various asbestos-related personal injury litigation, in both state and federal court, primarily in relation to the prior operations of certain companies previously acquired by the Company. The Company's total recorded liability with respect to pending and future asbestos-related claims was $100 million and $97 million, both net of insurance recoveries as of

December 31, 2024 and December 31, 2023, respectively. While it is reasonably possible that the Company may incur losses in excess of its recorded liability with respect to asbestos-related matters, we are unable to estimate any loss or range of loss in excess of such liability, and do not believe additional material losses are probable.

Antitrust

In March 2017, the Italian Competition Authority ("ICA") commenced an investigation into the Italian packaging industry to determine whether producers of corrugated sheets and boxes violated the applicable European competition law. In April 2019, the ICA concluded its investigation and issued initial findings alleging that over 30 producers, including our Italian packaging subsidiary ("IP Italy") and, prior to completion of the business combination certain subsidiaries of DS Smith operating in Italy ("DS Smith Italy"), improperly coordinated the production and sale of corrugated sheets and boxes. In August 2019, the ICA issued its decision and assessed IP Italy a fine of €29 million (approximately $31 million at the then-current exchange rates) for participation in the boxes coordination, which was recorded in the third quarter of 2019. We appealed the ICA decision, and our appeal was denied in May 2021. We further appealed the decision to the Italian Council of State ("Council of State"), and in March 2023 the Council of State largely upheld the ICA’s findings, but referred the calculation of IP Italy’s fine back to the ICA, finding that it was disproportionately high based on the conduct found. Given the failure of the Council of State to address certain arguments brought by IP, we further appealed the Council of State decision to uphold the ICA’s findings. In March 2024, the Council of State published its decision holding that its earlier decision should be interpreted as accepting many of IP Italy’s earlier arguments and that the ICA should reduce IP Italy’s fine accordingly. Notwithstanding these decisions by the Council of State, in March 2024 the ICA served IP Italy with its redetermination decision leaving IP Italy’s fine unchanged. IP appealed the ICA's redetermination decision as inconsistent with the Council of State's 2024 and 2023 decision. In July 2024, the Council of State partially annulled the ICA redetermination decision, reducing IP Italy's fine by $6 million (€6 million). As of December 31, 2024, after giving effect to this development, the Company did not have any remaining liability related to IP Italy's fine. IP Italy has further appealed the Council of State's July 2024 decision seeking further reduction. DS Smith Italy was also subject to the ICA decision but not fined, given its position as leniency applicant. IP Italy, DS Smith Italy, and other producers also have been named in lawsuits, and we have received other claims, by a number of customers for damages

associated with the alleged anticompetitive conduct. Given the early stages of these claims and the intention of the Company to defend robustly against such claims, it is too early to predict with any real degree of certainty, the precise overall outcome and ultimate potential liability (if any) that might be incurred in connection therewith, and there can be no guarantee that the aggregate of possible damages against IP Italy and DS Smith Italy could not, together, have a material impact on the Company’s financial condition.

GUARANTEES

In connection with sales of businesses, property, equipment, forestlands and other assets, International Paper commonly makes representations and warranties relating to such businesses or assets, and may agree to indemnify buyers with respect to tax and environmental liabilities, breaches of representations and warranties, and other matters. Where liabilities for such matters are determined to be probable and reasonably estimable, accrued liabilities are recorded at the time of sale as a cost of the transaction.

Brazil Goodwill Tax Matter**:** The Brazilian Federal Revenue Service has challenged the deductibility of goodwill amortization generated in a 2007 acquisition by Sylvamo do Brasil Ltda. ("Sylvamo Brazil"), which was a wholly owned subsidiary of the Company until the October 1, 2021 spin-off of the Printing Papers business, after which it became a subsidiary of Sylvamo Corporation ("Sylvamo"). Sylvamo Brazil received assessments for the tax years 2007-2015 totaling approximately $95 million (adjusted for variation in currency exchange rates) in tax, plus interest, penalties and fees. The interest, penalties and fees currently total approximately $235 million (adjusted for variation in currency exchange rates). Accordingly, the assessments currently total approximately $330 million (adjusted for variation in currency exchange rates). After an initial favorable ruling challenging the basis for these assessments, Sylvamo Brazil received subsequent unfavorable decisions from the Brazilian Administrative Council of Tax Appeals. Sylvamo Brazil appealed these decisions. On October 11, 2024, the federal regional court issued a ruling favorable to Sylvamo Brazil in the first stage of judicial review on the assessments for tax years 2007 and 2008-2012, comprising approximately $210 million of the total $330 million as of December 31, 2024. On December 18, 2024, the Brazilian Federal Revenue Service appealed this ruling. This tax litigation matter may take many years to resolve. Sylvamo Brazil and International Paper believe the transaction underlying these assessments was appropriately evaluated, and that Sylvamo

Brazil's tax position should be sustained, based on Brazilian tax law.

This matter pertains to a business that was conveyed to Sylvamo on October 1, 2021, as part of our spin-off transaction. Pursuant to the terms of the tax matters agreement entered into between the Company and Sylvamo, the Company will pay 60% and Sylvamo will pay 40%, on up to $300 million of any assessment related to this matter, and the Company will pay all amounts of the assessment over $300 million. Under the terms of the tax matters agreement, decisions concerning the conduct of the litigation related to this matter, including strategy, settlement, pursuit and abandonment, will be made by the Company. Sylvamo thus has no control over any decision related to this ongoing litigation. The Company intends to vigorously defend this historical tax position against the current assessments and any similar assessments that may be issued for tax years subsequent to 2015. The Brazilian government may enact a tax amnesty program that would allow Sylvamo Brazil to resolve this dispute for less than the assessed amount. As of October 1, 2021, in connection with the recording of the distribution of assets and liabilities resulting from the spin-off transaction, the Company established a liability representing the initial fair value of the contingent liability under the tax matters agreement. The contingent liability was determined in accordance with ASC 460 "Guarantees" based on the probability weighting of various possible outcomes. The initial fair value estimate and recorded liability as of December 31, 2021 was $48 million and remains this amount at December 31, 2024. This liability will not be increased in subsequent periods unless facts and circumstances change such that an amount greater than the initial recognized liability becomes probable and estimable.

NOTE 14 VARIABLE INTEREST ENTITIES

In connection with the acquisition of Temple-Inland in February 2012, two special purpose entities became wholly-owned subsidiaries of International Paper. The use of the two wholly-owned special purpose entities discussed below preserved the tax deferral that resulted from the 2007 Temple-Inland timberlands sales. As of December 31, 2024, this deferred tax liability was $486 million, which will be settled with the maturity of the notes in 2027.

In October 2007, Temple-Inland sold 1.55 million acres of timberland for $2.4 billion. The total consideration consisted almost entirely of notes due in 2027 issued by the buyer of the timberland, which Temple-Inland contributed to two wholly-owned, bankruptcy-remote special purpose entities. The notes are shown in Long-term financial assets of

variable interest entities in the accompanying consolidated balance sheet and are supported by $2.4 billion of irrevocable letters of credit issued by three banks, which are required to maintain minimum credit ratings on their long-term debt.

In December 2007, Temple-Inland's two wholly-owned special purpose entities borrowed $2.1 billion which is shown in Long-term nonrecourse financial liabilities of variable interest entities. The loans are repayable in 2027 and are secured by the $2.4 billion of notes and the irrevocable letters of credit securing the notes, and are nonrecourse to us. The loan agreements provide that if a credit rating of any of the banks issuing the letters of credit is downgraded below the specified threshold, the letters of credit issued by that bank must be replaced within 30 days with letters of credit from another qualifying financial institution.

As of both December 31, 2024 and 2023, the fair value of the notes receivable was $2.3 billion. As of both December 31, 2024 and 2023, the fair value of this debt was $2.1 billion. The notes receivable and debt are classified as Level 2 within the fair value hierarchy.

Activity between the Company and the 2007 financing entities was as follows:

In millions			2024			2023			2022
Revenue (a)			$	152		$	146		$	65
Expense (b)			136			136			58
Cash receipts (c)			135			122			28
Cash payments (d)			130			123			40

*(a)*The revenue is included in Interest expense, net, in the accompanying consolidated statement of operations and includes approximately $19 million for the years ended December 31, 2024, 2023 and 2022, respectively, of accretion income for the amortization of the purchase accounting adjustment on the Financial assets of variable interest entities.

(b) The expense is included in Interest expense, net, in the accompanying consolidated statement of operations and includes approximately $7 million for the years ended December 31, 2024, 2023 and 2022 respectively, of accretion expense for the amortization of the purchase accounting adjustment on the Long-term nonrecourse financial liabilities of variable interest entities.

(c) The cash receipts are interest received on the Financial assets of special purpose entities.

(d) The cash payments are interest paid on Nonrecourse financial liabilities of special purpose entities.

In connection with the 2006 sale of approximately 5.6 million acres of forestlands, International Paper received installment notes (the "Timber Notes") totaling approximately $4.8 billion. The Timber Notes were used as collateral for borrowings from third party lenders, which effectively monetized the Timber Notes through the creation of newly formed special

purposes entities (the "Entities"). The monetization structure preserved the tax deferral that resulted from the 2006 forestlands sales. During 2015, International Paper initiated a series of actions to extend the 2006 monetization structure and maintain the long-term nature of the deferred tax liability. The Entities, with assets and liabilities primarily consisting of the Timber Notes and third-party bank loans (the "Extension Loans"), were restructured which resulted in the formation of wholly-owned, bankruptcy-remote special purpose entities (the "2015 Financing Entities").

In August 2021, the Timber Notes of $4.8 billion and the Extension Loans of $4.2 billion related to the 2015 Financing Entities both matured. We settled the Extension Loans at their maturity with the proceeds from the Timber Notes. This resulted in cash proceeds of approximately $630 million representing our equity in the variable interest entities. Maturity of the installment notes and termination of the monetization structure also resulted in a $72 million tax liability that was paid in the fourth quarter of 2021.

On September 2, 2022, the Company and the Internal Revenue Service agreed to settle the previously disclosed timber monetization restructuring tax matter involving the 2015 Financing Entities. Under this agreement, the Company was required to fully resolve the matter and pay $252 million in U.S. federal income taxes. As a result, interest was charged upon closing of the audit. The amount of interest expense recognized in 2022 was $58 million. As of December 31, 2023, $252 million in U.S. federal income taxes and $58 million in interest expense have been paid as a result of the settlement agreement. The Company paid $163 million in U.S. federal income taxes and $30 million in interest during the first quarter of 2023 and fully satisfied the payment terms of the settlement agreement regarding the 2015 Financing Entities timber monetization restructuring tax matter during the second quarter of 2023. The reversal of the Company’s remaining deferred tax liability associated with the 2015 Financing Entities of $604 million was recognized as a one-time tax benefit in the third quarter of 2022.

NOTE 15 DEBT AND LINES OF CREDIT

Amounts related to early debt extinguishment during the years ended December 31, 2024, 2023 and 2022 were as follows:

In millions			2024			2023			2022
Early debt reductions (a)			$	—		$	—		$	503
Pre-tax early debt extinguishment costs (b)			—			—			93

*(a)*Reductions related to notes with interest rates ranging from 4.35% to 8.70% with original maturities from 2023 to 2048 for the year ended December 31, 2022.

*(b)*Amounts are included in Restructuring and other charges in the accompanying consolidated statements of operations.

The Company had debt reductions of $141 million in 2024, related primarily to $14 million of capital leases and $127 million of environmental development bonds ("EDB"). The Company also had debt issuances of $102 million of EDBs.

The Company had debt issuances in 2023 of $600 million of term loan agreements and $183 million of EDBs.

The Company had debt issuances in 2022 of $354 million of term loan agreements, $410 million of commercial paper and $248 million of EDBs.

The borrowing capacity of the Company's commercial paper program is $1.0 billion supported by its $1.4 billion credit agreement. Under the terms of this program, individual maturities on borrowings may vary, but not exceed one year from the date of issue. Interest bearing notes may be issued either as fixed or floating rate notes. The Company had no borrowings outstanding as of December 31, 2024 and December 31, 2023 under this program.

At December 31, 2024, the Company's credit facilities totaled $1.9 billion. The credit facilities generally provide for interest rates at a floating rate index plus a pre-determined margin dependent upon International Paper's credit rating. The credit facilities previously included a $1.5 billion contractually committed bank facility with a maturity date of June 2026. In June 2023, the Company amended and restated its credit agreement to, among other things, (i) reduce the size of the contractually committed bank facility from $1.5 billion to $1.4 billion, (ii) extend the maturity date from June 2026 to June 2028, and (iii) replace the LIBOR-based rate with a SOFR-based rate. The liquidity facilities also include up to $500 million of uncommitted financings based on eligible receivables balances under a receivable securitization program that expires in June 2025. As of December 31, 2024 and December 31, 2023, the Company had no borrowings outstanding under the program.

A summary of long-term debt follows:

In millions at December 31			2024			2023
7.350% notes – due 2025			$	39		$	39
7.750% notes – due 2025			22			22
7.200% notes – due 2026			58			58
6.400% notes – due 2026			5			5
7.150% notes – due 2027			7			7
6.875% notes – due 2029			10			10
5.000% notes – due 2035			407			407
6.650% notes – due 2037			3			3
8.700% notes – due 2038			86			86
7.300% notes – due 2039			453			453
6.000% notes – due 2041			585			585
4.800% notes – due 2044			686			686
5.150% notes – due 2046			449			449
4.400% notes – due 2047			647			647
4.350% notes – due 2048			740			740
Floating rate notes – due 2027 – 2030 (a)			308			308
Environmental and industrial development bonds – due 2025 – 2031 (b)			394			419
Floating rate term loan - due 2028			600			600
Total principal			5,499			5,524
Capitalized leases			49			55
Premiums, discounts, and debt issuance costs			(39)			(41)
Terminated interest rate swaps			51			54
Other			1			1
Total (c)			5,561			5,593
Less: current maturities			193			138
Long-term debt			$	5,368		$	5,455

*(a)*The weighted average interest rate on these notes was 4.6% in 2024 and 5.4% in 2023.

*(b)*The weighted average interest rate on these bonds was 2.8% in 2024 and 2.4% in 2023.

*(c)*The fair market value was approximately $5.2 billion at December 31, 2024 and $5.5 billion at December 31, 2023. Debt fair value measurements use Level 2 inputs.

At December 31, 2024, contractual obligations for future payments of debt maturities (including finance lease liabilities disclosed in Note 9 - Leases and excluding the timber monetization structures disclosed in Note 14 - Variable Interest Entities) by calendar year were as follows over the next five years: 2025 – $193 million; 2026 – $142 million; 2027 – $346 million; 2028 – $672 million; and 2029 – $18 million.

The Company’s financial covenants require the maintenance of a minimum net worth, as defined in our debt agreements, of $9 billion and a total debt-to-capital ratio of less than 60%. Net worth is defined as the sum of common stock, paid-in capital and retained earnings, less treasury stock plus any cumulative goodwill impairment charges. The calculation also excludes accumulated other comprehensive income/loss and both the current and long-term Nonrecourse Financial Liabilities of Variable Interest Entities. The total debt-to-capital ratio is defined as total debt divided by the sum of total debt plus net worth. As of December 31, 2024, we were in compliance with our debt covenants.

NOTE 16 CAPITAL STOCK

The authorized capital stock at both December 31, 2024 and 2023, consisted of 990,850,000 shares of common stock, $1 par value; 400,000 shares of cumulative $4 preferred stock, without par value (stated value $100 per share); and 8,750,000 shares of serial preferred stock, $1 par value. The serial preferred stock is issuable in one or more series by the Board of Directors without further shareholder action.

The following is a roll forward of shares of common stock for the three years ended December 31, 2024, 2023 and 2022:

			Common Stock
In thousands			Issued			Treasury
Balance at January 1, 2022			448,916			70,362
Issuance of stock for various plans, net			—			(1,569)
Repurchase of stock			—			29,839
Balance at December 31, 2022			448,916			98,632
Issuance of stock for various plans, net			—			(1,647)
Repurchase of stock			—			5,894
Balance at December 31, 2023			448,916			102,879
Issuance of stock for various plans, net			—			(2,028)
Repurchase of stock			—			648
Balance at December 31, 2024			448,916			101,499

NOTE 17 RETIREMENT PLANS

International Paper sponsors and maintains the Retirement Plan of International Paper Company (the "Pension Plan"), a tax-qualified defined benefit pension plan that provides retirement benefits to certain employees.

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 specified benefit rates (hourly and union employees).

The Company also has two unfunded nonqualified defined benefit pension plans: the Pension Restoration Plan that provides retirement benefits based on eligible compensation in excess of limits set by the Internal Revenue Service, and the Unfunded Supplemental Retirement Plan 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 $23 million, $22 million and $29 million in 2024, 2023 and 2022, respectively, and which are expected to be $49 million in 2025.

Effective January 1, 2019, the Company froze participation, including credited service and compensation, for salaried employees under the Pension Plan, the Pension Restoration Plan and the SERP. This change does not affect benefits accrued through December 31, 2018. For service after December 31, 2018, employees affected by the freeze receive a Company contribution to their individual Retirement Savings Account as described later in this Note 17.

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 2024 and 2023 and the plans’ funded status.

			2024						2023
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			$	8,982		$	58		$	8,816		$	54
Service cost			53			3			48			4
Interest cost			447			3			459			3
Actuarial loss (gain)			(547)			5			225			(3)
Plan amendments			16			—			26			—
Curtailments			—			(4)			—			—
Settlements			—			(2)			—			—
Benefits paid			(609)			(3)			(593)			(3)
Special termination benefits			3			—			1			—
Effect of foreign currency exchange rate movements			—			(4)			—			3
Benefit obligation, December 31			$	8,345		$	56		$	8,982		$	58
Change in plan assets:
Fair value of plan assets, January 1			$	8,836		$	20		$	8,845		$	18
Actual return on plan assets			(57)			1			562			1
Company contributions			23			4			22			3
Benefits paid			(609)			(2)			(593)			(3)
Settlements			—			(2)			—			—
Transfer Payments			(4)			—			—			—
Effect of foreign currency exchange rate movements			—			(1)			—			1
Fair value of plan assets, December 31			$	8,189		$	20		$	8,836		$	20
Funded status, December 31			$	(156)		$	(36)		$	(146)		$	(38)
Amounts recognized in the consolidated balance sheet:
Overfunded pension plan assets			$	92		$	—		$	118		$	—
Underfunded pension benefit obligation - current			(49)			(2)			(20)			(2)
Underfunded pension benefit obligation - non-current			(199)			(34)			(244)			(36)
			$	(156)		$	(36)		$	(146)		$	(38)

Amounts recognized in accumulated other comprehensive income (loss) under ASC 715 (pre-tax):
Prior service cost (credit)			$	94		$	—		$	91		$	—
Net actuarial loss (gain)			1,691			(5)			1,663			(10)
			$	1,785		$	(5)		$	1,754		$	(10)

The non-current asset for the qualified plan is included in the accompanying consolidated balance sheet under Overfunded Pension Plan Assets. The non-current portion of the liability is included with the pension liability under Underfunded Pension Benefit Obligation.

The largest contributor to the actuarial loss affecting the benefit obligation was the increase in the discount rate from 5.10% at December 31, 2023 to 5.68% at December 31, 2024.

The components of the $31 million and $5 million related to U.S. plans and non-U.S. plans, respectively, in the amounts recognized in other comprehensive income ("OCI") during 2024 consisted of:

In millions			U.S. Plans			Non- U.S. Plans
Current year actuarial (gain) loss			$	106		$	—
Amortization of actuarial loss			(78)			—
Current year prior service cost			16			—
Amortization of prior service cost			(13)			—
Settlements/curtailments			—			4
Effect of foreign currency exchange rate movements			—			1
			$	31		$	5

The portion of the change in the funded status that was recognized in net periodic benefit cost and OCI for the U.S. plans was $32 million, $197 million and $474 million in 2024, 2023 and 2022, respectively. The portion of the change in funded status for the non-U.S. plans was $11 million, $2 million, and $(6) million in 2024, 2023 and 2022, respectively.

The accumulated benefit obligation at December 31, 2024 and 2023 was $8.3 billion and $9.0 billion, respectively, for our U.S. defined benefit plans and $46 million and $49 million, respectively, at December 31, 2024 and 2023 for our non-U.S. defined benefit plans.

The following table summarizes information for pension plans with an accumulated benefit obligation in excess of plan assets at December 31, 2024 and 2023:

			2024						2023
In millions			U.S. Plans			Non-U.S. Plans			U.S. Plans			Non-U.S. Plans
Projected benefit obligation			$	248		$	55		$	264		$	57
Accumulated benefit obligation			248			46			264			49
Fair value of plan assets			—			20			—			20

ASC 715, “Compensation – Retirement Benefits” provides for delayed recognition of actuarial gains and losses, including amounts arising from changes in the estimated projected plan benefit obligation due to changes in the assumed discount rate, differences

between the actual and expected return on plan assets and other assumption changes. These net gains and losses are recognized prospectively over a period that approximates the average remaining service period of active employees expected to receive benefits under the plans to the extent that they are not offset by gains in subsequent years.

NET PERIODIC PENSION EXPENSE

Service cost is the actuarial present value of benefits attributed by the plans’ benefit formula to services rendered by employees during the year. Interest cost represents the increase in the projected benefit obligation, which is a discounted amount, due to the passage of time. The expected return on plan assets reflects the computed amount of current-year earnings from the investment of plan assets using an estimated long-term rate of return.

Net periodic pension expense for qualified and nonqualified U.S. and non-U.S. defined benefit plans comprised the following:

			2024						2023						2022
In millions			U.S. Plans			Non- U.S. Plans			U.S. Plans			Non- U.S. Plans			U.S. Plans			Non- U.S. Plans
Service cost			$	53		$	3		$	48		$	4		$	85		$	3
Interest cost			447			3			459			3			338			2
Expected return on plan assets			(593)			—			(530)			(1)			(649)			(1)
Actuarial loss (gain)			78			—			93			(1)			87			1
Amortization of prior service cost			13			—			23			—			23			—
Special termination benefits			3			—			1			—			—			—
Net periodic pension (income) expense			$	1		$	6		$	94		$	5		$	(116)		$	5

The components of net periodic pension expense other than the Service cost component are included in Non-operating pension (income) expense in the Consolidated Statement of Operations.

The decrease in 2024 pension expense primarily reflects higher asset returns, lower interest cost due to a lower discount rate, and lower actuarial loss.

ASSUMPTIONS

International Paper evaluates its actuarial assumptions annually as of December 31 (the measurement date) and considers changes in these long-term factors based upon market conditions and the requirements for employers’ accounting for

pensions. These assumptions are used to calculate benefit obligations as of December 31 of the current year and pension expense to be recorded in the following year (i.e., the discount rate used to determine the benefit obligation as of December 31, 2024 is also the discount rate used to determine net pension expense for the 2025 year).

Major actuarial assumptions used in determining the benefit obligations and net periodic pension cost for our defined benefit plans are presented in the following table:

			2024						2023						2022
			U.S. Plans			Non- U.S. Plans			U.S. Plans			Non- U.S. Plans			U.S. Plans			Non- U.S. Plans
Actuarial assumptions used to determine benefit obligations as of December 31:
Discount rate			5.68		%	4.99		%	5.10		%	5.88		%	5.40		%	5.31		%
Rate of compensation increase			3.00		%	3.37		%	3.00		%	3.40		%	3.00		%	3.36		%
Actuarial assumptions used to determine net periodic pension cost for years ended December 31:
Discount rate (a)			5.10		%	5.88		%	5.40		%	5.31		%	2.90		%	2.59		%
Expected long-term rate of return on plan assets (a)			7.00		%	3.79		%	6.50		%	3.83		%	6.00		%	3.66		%
Rate of compensation increase			3.00		%	3.40		%	3.00		%	3.36		%	3.00		%	2.92		%

(a) Represents the weighted average rate for the U.S. qualified plans in 2021 due to the spin-off remeasurement.

The expected long-term rate of return on plan assets is based on projected rates of return for current asset classes in the plan’s investment portfolio. Projected rates of return are developed through an asset/liability study in which projected returns for each of the plan’s asset classes are determined after analyzing historical experience and future expectations of returns and volatility of the various asset classes.

Based on the target asset allocation for each asset class, the overall expected rate of return for the portfolio is developed considering the effects of active portfolio management and expenses paid from plan assets. The discount rate assumption was determined from a universe of high-quality corporate bonds. A settlement portfolio is selected and matched to the present value of the plan’s projected benefit payments. To calculate pension expense for 2025, the Company will use an expected long-term rate of return on plan assets of 7.00% for the Retirement Plan of International Paper, a discount rate of 5.68% and an assumed rate of compensation increase of 3.00%. The Company estimates that it will record net pension expense of approximately $36 million for its U.S. defined benefit plans in 2025, compared to expense of $1 million in 2024.

For non-U.S. pension plans, assumptions reflect economic assumptions applicable to each country.

The following illustrates the effect on pension expense for 2025 of a 25 basis point decrease in the above assumptions:

In millions			2025
Expense (Income):
Discount rate			$	14
Expected long-term rate of return on plan assets			20

PLAN ASSETS

International Paper’s Board of Directors has appointed a Fiduciary Review Committee that is responsible for fiduciary oversight of the U.S. Pension Plan, approving investment policy and reviewing the management and control of plan assets. Pension Plan assets are invested to maximize returns within prudent levels of risk.

The Pension Plan maintains a strategic asset allocation policy that designates target allocations by asset class. Investments are diversified across classes and within each class to minimize the risk of large losses. Derivatives, including swaps, forward and futures contracts, may be used as asset class substitutes or for hedging or other risk management purposes. Periodic reviews are made of investment

policy objectives and investment manager performance. For non-U.S. plans, assets consist principally of common stock and fixed income securities.

International Paper’s U.S. pension allocations by type of fund at December 31, 2024 and 2023 and target allocations were as follows:

Asset Class			2024			2023			Target Allocations
Hedging assets			62		%	66		%	61% - 72%
Return seeking assets (a)			38		%	34		%	28% - 39%
Total			100		%	100		%

(a) Return seeking assets include Real Estate (8% for 2024 and 9% for 2023) and Private Equity (7% and 7% for 2024 and 2023, respectively).

The fair values of International Paper’s pension plan assets at December 31, 2024 and 2023 by asset class are shown below. Hedge funds disclosed in the following table are allocated to hedging assets for target allocation purposes.

Fair Value Measurement at December 31, 2024
Asset Class			Total			Quoted Prices in Active Markets For Identical Assets (Level 1)			Significant Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
In millions
Equities			$	1,537		$	972		$	565		$	—
Fixed income			4,227			—			4,220			7
Derivatives			9			—			—			9
Cash and cash equivalents			(20)			(20)			—			—
Other investments:
Hedge funds			1,148
Private equity			599
Real estate funds			689
Total Investments			$	8,189		$	952		$	4,785		$	16

Fair Value Measurement at December 31, 2023
Asset Class			Total			Quoted Prices in Active Markets For Identical Assets (Level 1)			Significant Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
In millions
Equities			$	1,336		$	835		$	501		$	—
Fixed income			4,691			—			4,684			7
Derivatives			71			—			—			71
Cash and cash equivalents			49			49			—			—
Other investments:
Hedge funds			1,293
Private equity			644
Real estate funds			752
Total Investments			$	8,836		$	884		$	5,185		$	78

In accordance with accounting standards, certain investments that are measured at NAV are not classified in the fair value hierarchy.

Other Investments at December 31, 2024
Investment			Fair Value			Unfunded Commitments			Redemption Frequency			Remediation Notice Period
In millions
Hedge funds			$	1,148		$	93		Quarterly to semi-annually			45 - 60 days
Private equity			599			50			(a)			None
Real estate funds			689			79			Quarterly			45 - 60 days
Total			$	2,436		$	222

(a) A private equity fund investment ("partnership interest") is contractually locked up for the life of the private equity fund by the partnership agreement. Limited partners do not have the option to redeem partnership interests.

Other Investments at December 31, 2023
Investment			Fair Value			Unfunded Commitments			Redemption Frequency			Remediation Notice Period
In millions
Hedge funds			$	1,293		$	103		Quarterly to semi-annually			45 - 60 days
Private equity			644			81			(a)			None
Real estate funds			752			94			Quarterly			45 - 60 days
Total			$	2,689		$	278

(a) A private equity fund investment ("partnership interest") is contractually locked up for the life of the private equity fund by the partnership agreement. Limited partners do not have the option to redeem partnership interests.

Equity securities consist primarily of publicly traded U.S. companies and international companies. Publicly traded equities are valued at the closing prices reported in the active market in which the individual securities are traded.

Fixed income consists of government securities, mortgage-backed securities, corporate bonds, common collective funds and other fixed income investments. Government securities are valued by third-party pricing sources. Mortgage-backed security holdings consist primarily of agency-rated holdings. The fair value estimates for mortgage securities are calculated by third-party pricing sources chosen by the custodian’s price matrix. Corporate bonds are valued using either the yields currently available on comparable securities of issuers with similar credit ratings or using a discounted cash flows approach that utilizes observable inputs, such as current yields of similar instruments, but includes adjustments for certain risks that may not be observable, such as credit and liquidity risks. Common collective funds are valued at the net asset value per share multiplied by the number of shares held as of the measurement date.

Derivative investments such as futures, forward contracts, options and swaps are used to help manage risks. Derivatives are generally employed as asset class substitutes (such as when employed in a portable alpha strategy), for managing asset/liability mismatches, or bona fide hedging or other

appropriate risk management purposes. Derivative instruments are generally valued by the investment managers or in certain instances by third-party pricing sources.

The following tables summarize derivative holdings as of December 31, 2024 and 2023, respectively:

Derivatives at December 31, 2024
In millions			Gross Asset			Gross Liability			Total
Collateral			$	17		$	(1)		$	16
Credit Default Swap			3			—			3
Interest Rate Swap			7			—			7
Bond/Equity Swap			—			(17)			(17)
Total			$	27		$	(18)		$	9

Derivatives at December 31, 2023
In millions			Gross Asset			Gross Liability			Total
Collateral			$	7		$	(7)		$	—
Credit Default Swap			2			—			2
Interest Rate Swap			4			—			4
Bond/Equity Swap			65			—			65
Total			$	78		$	(7)		$	71

Hedge funds are investment structures for managing private, loosely-regulated investment pools that can pursue a diverse array of investment strategies with a

wide range of different securities and derivative instruments. These investments are made through funds-of-funds (commingled, multi-manager fund structures) and through direct investments in individual hedge funds. Hedge funds are primarily valued by each fund’s third-party administrator based upon the valuation of the underlying securities and instruments and primarily by applying a market or income valuation methodology as appropriate depending on the specific type of security or instrument held. Funds-of-funds are valued based upon the net asset values of the underlying investments in hedge funds.

Private equity consists of interests in partnerships that invest in U.S. and non-U.S. debt and equity securities. Partnership interests are valued using the most recent general partner statement of fair value, updated for any subsequent partnership interest cash flows.

Real estate funds include commercial properties, land and timberland, and generally include, but are not limited to, retail, office, industrial, multifamily and hotel properties. Real estate fund values are primarily reported by the fund manager and are based on valuation of the underlying investments which include inputs such as cost, discounted cash flows, independent appraisals and market based comparable data.

The following is a reconciliation of the assets that are classified using significant unobservable inputs (Level 3) at December 31, 2024:

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

In millions						Other fixed income			Derivatives			Total
Beginning balance at December 31, 2022						$	7		$	25		$	32
Actual return on plan assets:
Relating to assets still held at the reporting date						—			57			57
Relating to assets sold during the period						—			48			48
Purchases, sales and settlements						—			(59)			(59)
Transfers in and/or out of Level 3						—			—			—
Ending balance at December 31, 2023						$	7		$	71		$	78
Actual return on plan assets:
Relating to assets still held at the reporting date						—			(80)			(80)
Relating to assets sold during the period						—			31			31
Purchases, sales and settlements						—			(13)			(13)
Transfers in and/or out of Level 3						—			—			—
Ending balance at December 31, 2024						$	7		$	9		$	16

FUNDING AND CASH FLOWS

The Company’s funding policy for the Pension Plan is to contribute amounts sufficient to meet legal funding requirements, plus any additional amounts that the Company may determine to be appropriate considering the funded status of the plans, tax deductibility, cash flow generated by the Company, and other factors. The Company continually reassesses the amount and timing of any discretionary contributions. No voluntary contributions were made in 2022, 2023 or 2024. Generally, International Paper’s non-U.S. pension plans are funded using the projected benefit as a target, except in certain countries where funding of benefit plans is not required.

At December 31, 2024, projected future pension benefit payments, excluding any termination benefits, were as follows:

In millions
2025			$	663
2026			638
2027			639
2028			638
2029			637
2030-2034			3,135

OTHER U.S. PLANS

International Paper sponsors the International Paper Company Salaried Savings Plan and the International Paper Company Hourly Savings Plan, both of which

are tax-qualified defined contribution 401(k) savings plans. Substantially all U.S. salaried and certain hourly employees are eligible to participate and may make elective deferrals to such plans to save for retirement. International Paper makes matching contributions to participant accounts on a specified percentage of employee deferrals as determined by the provisions of each plan. The Company makes Retirement Savings Account contributions equal to a percentage of an eligible employee’s pay. Beginning in 2019, as a result of the freeze for salaried employees under the Pension Plan, all salaried employees are eligible for the contribution to the Retirement Savings Account.

The Company also sponsors the International Paper Company Deferred Compensation Savings Plan, which is an unfunded nonqualified defined contribution plan. This plan permits eligible employees to continue to make deferrals and receive company matching contributions (and Retirement Savings Account contributions) when their contributions to the International Paper Salaried Savings Plan are stopped due to limitations under U.S. tax law. Participant deferrals and Company contributions are not invested in a separate trust, but are paid directly from International Paper’s general assets at the time benefits become due and payable. Company contributions to the plans totaled approximately $177 million, $160 million and $159 million for the plan years ended in 2024, 2023 and 2022, respectively.

NOTE 18 POSTRETIREMENT BENEFITS

U.S. POSTRETIREMENT BENEFITS

International Paper provides certain retiree health care and life insurance benefits covering certain U.S. salaried and hourly employees. These employees are generally eligible for benefits upon retirement and completion of a specified number of years of creditable service. International Paper does not fund these benefits prior to payment and has the right to modify or terminate certain of these plans in the future.

In addition to the U.S. plan, certain Moroccan employees are eligible for retiree health care and life insurance benefits.

The components of postretirement benefit expense in 2024, 2023 and 2022 were as follows:

In millions			2024						2023						2022
			U.S. Plans			Non- U.S. Plans			U.S. Plans			Non- U.S. Plans			U.S. Plans			Non- U.S. Plans
Interest cost			$	6		$	—		$	7		$	—		$	5		$	—
Actuarial loss			1			—			—			—			3			—
Net postretirement expense			$	7		$	—		$	7		$	—		$	8		$	—

International Paper evaluates its actuarial assumptions annually as of December 31 (the measurement date) and considers changes in these long-term factors based upon market conditions and the requirements of employers’ accounting for postretirement benefits other than pensions. The discount rate assumption was determined based on a hypothetical settlement portfolio selected from a universe of high-quality corporate bonds.

The discount rates used to determine net U.S. and non-U.S. postretirement benefit cost for the years ended December 31, 2024, 2023 and 2022 were as follows:

			2024						2023						2022
			U.S. Plans			Non- U.S. Plans			U.S. Plans			Non- U.S. Plans			U.S. Plans			Non- U.S. Plans
Discount rate			5.20		%	6.10		%	5.50		%	5.70		%	2.90		%	5.20		%

The weighted average assumptions used to determine the benefit obligation at December 31, 2024 and 2023 were as follows:

			2024						2023
			U.S. Plans			Non- U.S. Plans			U.S. Plans			Non- U.S. Plans
Discount rate			5.67		%	5.70		%	5.20		%	6.10		%
Health care cost trend rate assumed for next year			6.75		%	4.00		%	7.00		%	4.00		%
Rate that the cost trend rate gradually declines to			5.00		%	4.00		%	5.00		%	4.00		%
Year that the rate reaches the rate it is assumed to remain			2032			2024			2032			2023

The plans are only funded in an amount equal to benefits paid. The following table presents the changes in benefit obligation and plan assets for 2024 and 2023:

In millions			2024						2023
			U.S. Plans			Non- U.S. Plans			U.S. Plans			Non- U.S. Plans
Change in projected benefit obligation:
Benefit obligation, January 1			$	118		$	4		$	125		$	4
Interest cost			6			—			7			—
Participants’ contributions			1			1			2			—
Actuarial (gain) loss			15			(1)			8			—
Benefits paid			(22)			—			(24)			—
Benefit obligation, December 31			$	118		$	4		$	118		$	4
Change in plan assets:
Fair value of plan assets, January 1			$	—		$	—		$	—		$	—
Company contributions			21			—			22			—
Participants’ contributions			1			—			2			—
Benefits paid			(22)			—			(24)			—
Fair value of plan assets, December 31			$	—		$	—		$	—		$	—
Funded status, December 31			$	(118)		$	(4)		$	(118)		$	(4)
Amounts recognized in the consolidated balance sheet under ASC 715:
Current liability			$	(14)		$	—		$	(13)		$	—
Non-current liability			(104)			(4)			(105)			(4)
			$	(118)		$	(4)		$	(118)		$	(4)
Amounts recognized in accumulated other comprehensive income (loss) under ASC 715 (pre-tax):
Net actuarial loss (gain)			$	16		$	(2)		$	2		$	(1)
			$	16		$	(2)		$	2		$	(1)

The non-current portion of the liability is included with the postemployment liability in the accompanying consolidated balance sheet under Postretirement and postemployment benefit obligation.

The components of the $14 million and ($1) million change in the amounts recognized in OCI during 2024 for U.S. and non-U.S. plans, respectively, consisted of:

In millions			U.S. Plans			Non- U.S. Plans
Current year actuarial (gain) loss			$	15		$	(1)
Amortization of actuarial (loss) gain			(1)			—
			$	14		$	(1)

The portion of the change in the funded status that was recognized in net periodic benefit cost and OCI for the U.S. plans was $(7) million, $(2) million and $44 million in 2024, 2023 and 2022, respectively. The portion of the change in funded status for the non-U.S. plans was $(1) million, $0 million, and $0 million in 2024, 2023 and 2022, respectively.

At December 31, 2024, estimated total future postretirement benefit payments, net of participant contributions and estimated future Medicare Part D subsidy receipts, were as follows:

In millions			Benefit Payments			Subsidy Receipts			Benefit Payments
			U.S. Plans			U.S. Plans			Non- U.S. Plans
2025			$	14		$	1		$	—
2026			14			1			—
2027			13			1			—
2028			12			1			—
2029			11			1			—
2030– 2034			47			2			1

NOTE 19 INCENTIVE PLANS

On February 13, 2024, the Company's Board of Directors, upon recommendation of the Management Development and Compensation Committee (the "MDCC"), authorized adoption of a 2024 Long-Term Incentive Compensation Plan (the "2024 LTICP") to replace the 2009 Amended and Restated Incentive Compensation Plan (the "2009 Plan"), subject to shareholder approval at the Company's annual meeting of shareholders held on May 13, 2024. The 2024 LTICP became effective following approval by shareholders at the May 13, 2024 annual meeting and replaced the 2009 Plan. The 2024 LTICP authorized up to 9,250,000 shares of our Class A common stock, par value $1.00 per share, available for future grants in the form of restricted stock,

restricted or deferred stock units, performance awards payable in cash or stock upon the attainment of specified performance goals, dividend equivalents, options, stock appreciation rights, other stock-based awards and cash-based awards at the discretion of the Committee. The LTICP is administered by the Committee.

Additionally, restricted stock, which may be deferred into RSUs, may be awarded under a Restricted Stock and Deferred Compensation Plan for Non-Employee Directors.

LONG-TERM INCENTIVE PLAN

Effective January 1, 2023, the MDCC renamed the Performance Share Plan ("PSP") to the Long-Term Incentive Plan ("LTIP") and began incorporating RSUs into its annual grant process as a complement to PSUs to better align with market and aid in our recruitment and retention efforts. Under the LTIP, contingent awards of International Paper common stock are granted by the MDCC.

The maximum aggregate number of shares of the Company’s common stock that may be issued pursuant to awards under the LTICP shall not exceed 9,250,000 shares. Shares for which payment is in cash, including the shares withheld to cover associate payroll taxes, as well as shares that expire, terminate, or are canceled or forfeited, may be awarded or granted again under the LTICP.

Performance Stock Units

PSU awards are earned over a three-year period based on the achievement of pre-established performance goals of Return on Invested Capital ("ROIC") measured against our internal benchmark and our relative performance in Total Shareholder Return ("TSR") compared to the TSR peer group. The 2022-2024, 2023-2025 and 2024-2026 Awards are weighted 50% ROIC and 50% TSR for all participants. The ROIC component of the PSU awards is valued at the 20-trading day average closing price immediately prior to the grant date. As the ROIC component contains a performance condition, compensation expense, net of estimated forfeitures, is recorded over the requisite service period based on the most probable number of awards expected to vest. The TSR component of the PSU awards is valued using the same methodology as the RSUs but then adjusted using a factor derived from a Monte Carlo simulation as the TSR component contains a market condition. The Monte Carlo simulation estimates the fair value of the TSR component based on the expected term of the award, a risk-free rate, expected dividends, and the expected volatility for the Company and its competitors. The

expected term is estimated based on the vesting period of the awards, the risk-free rate is based on the yield on U.S. Treasury securities matching the vesting period, and the volatility is based on the Company’s historical volatility over the expected term. PSUs are payable in cash or shares at the Company's discretion.

Restricted Stock Units

Time-based RSU awards granted under the LTIP are expected to vest in three equal installments commencing on February 1st following the first anniversary of the grant date over a 3-year service period, subject to forfeiture and transfer restrictions. RSUs are payable in cash or shares at the Company’s discretion.

Generally, the requisite service period is the vesting period. In the case of retirement (eligibility for which is based on the associate's age and years of service as provided in the relevant award agreement), awards vest pro-rata based on length of service during the award period, subject to continued employment and paid upon termination.

Dividend equivalents are generally accrued on PSUs and RSUs outstanding as of the record date. These dividend equivalents are paid only on PSUs and RSUs that ultimately vest.

The following table sets forth the assumptions used to determine compensation cost for the market condition component of the LTIP plan:

			Twelve Months Ended December 31, 2024
Expected volatility			27.09% - 37.11%
Risk-free interest rate			0.97% - 4.79%

The following summarizes LTIP activity for the three years ended December 31, 2024:

			Share/Units			Weighted Average Grant Date Fair Value
Outstanding at December 31, 2021			5,926,142			$35.43
Granted			1,899,211			50.32
Shares issued			(1,130,236)			40.23
Forfeited			(1,382,637)			42.03
Outstanding at December 31, 2022			5,312,480			38.01
Granted - LTIP PSU			1,619,481			37.78
Granted - LTIP RSU			1,411,042			34.63
Shares issued - LTIP PSU			(972,563)			40.44
Shares issued - LTIP RSU			(15,161)			34.63
Forfeited			(1,234,328)			45.38
Outstanding at December 31, 2023			6,120,951			35.31
Granted - LTIP PSU			2,039,725			35.28
Granted - LTIP RSU			1,414,316			36.15
Shares issued - LTIP PSU			(851,962)			53.32
Shares issued - LTIP RSU			(446,582)			34.63
Shares issued - LTIP RSU			(8,060)			36.15
Forfeited			(1,350,063)			45.58
Outstanding at December 31, 2024			6,918,325			$31.29

RECOGNITION AWARD PROGRAM

The Recognition Award Program ("RA Program") is service-based and designed for recruitment, retention and special recognition purposes. It provides for awards of RSUs to key employees.

The following summarizes the activity of the RA Program for the three years ended December 31, 2024:

			Shares			Weighted Average Grant Date Fair Value
Outstanding at December 31, 2021			103,769			$49.03
Granted			132,200			43.38
Shares issued			(104,177)			44.53
Forfeited			(5,400)			47.78
Outstanding at December 31, 2022			126,392			46.88
Granted			123,454			35.51
Shares issued			(81,629)			45.40
Forfeited			(11,643)			39.77
Outstanding at December 31, 2023			156,574			39.22
Granted			115,200			43.26
Shares issued			(85,236)			37.53
Forfeited			(6,700)			38.30
Outstanding at December 31, 2024			179,838			$42.64

At December 31, 2024, 2023 and 2022 a total of 9.1 million, 5.5 million and 7.3 million shares, respectively, were available for grant under the LTICP.

Stock-based compensation expense and related income tax benefits were as follows:

In millions			2024			2023			2022
Total stock-based compensation expense (included in selling and administrative expense)			$	82		$	58		$	124
Income tax benefits related to stock-based compensation			14			12			13

At December 31, 2024, $72 million of compensation cost, net of estimated forfeitures, related to unvested restricted stock unit awards, performance stock unit awards and restricted stock attributable to future performance had not yet been recognized. This amount will be recognized in expense over a weighted-average period of 1.7 years.

NOTE 20 FINANCIAL INFORMATION BY BUSINESS SEGMENT AND GEOGRAPHIC AREA

International Paper operates in two segments: Industrial Packaging and Global Cellulose Fibers.

Industrial Packaging is primarily focused on producing fiber-based packaging. We produce linerboard, medium, whitetop, recycled linerboard, recycled medium and saturating kraft of which approximately 75% of our production is converted into corrugated packaging and other packaging. The revenue for our Industrial Packaging segment is derived from selling these products to our customers.

Global Cellulose Fibers primarily focus on producing cellulose fibers which is a renewable raw material used in a variety of products people depend on every day such as diapers, towel and tissue products, feminine care, incontinence and other personal care products. In addition, our innovative specialty pulps serve as a sustainable raw material used in textiles, construction materials, paints, coatings and more. The revenue for our Global Cellulose Fibers segment is derived from selling these products to our customers.

The accounting policies of the Industrial Packaging and Global Cellulose Fibers segments are the same as those described in the summary of significant accounting policies.

The chief operating decision maker ("CODM") assesses performance for these segments and decides how to allocate resources based on business segment operating profit. Business segment operating profits (losses) are also used by International Paper's CODM to measure the earnings performance of its businesses and to focus on on-going operations. During 2024, business segment operating profits (losses) used by the CODM were adjusted to include accelerated depreciation as part of the measure of business performance. As such, results for the year ended December 31, 2023 have been recast to reflect $422 million for accelerated depreciation related to mill strategic actions in business segment operating profit (losses).

International Paper's reportable segments are strategic business units that offer different products. They are managed separately because each business requires different resources and strategies.

International Paper’s CODM is the chief executive officer.

External sales by major product is determined by aggregating sales from each segment based on similar products or services. External sales are defined as those that are made to parties outside International Paper’s consolidated group, whereas sales by segment in the Net Sales table are determined using a management approach and include intersegment sales.

INFORMATION BY BUSINESS SEGMENT

The following tables illustrate reportable segment revenue, significant segment expenses, and measures of a segment’s profit or loss for the years ended December 31, 2024, 2023 and 2022. The table also reconciles these amounts to Earnings (loss) from continuing operations before income taxes and equity earnings.

2024:

In millions			Industrial Packaging						Global Cellulose Fibers						Total
Net Sales			$	15,534					$	2,793					$	18,327
Corporate and Intrasegment Sales															292
Total Net Sales															18,619
Less:
Cost of products sold			10,985						1,983
Selling and administrative expenses			1,451						262
Depreciation and amortization			850						450
Distribution expenses			1,179						295
Other segment items (a)			118						29
Business Segment Operating Profit (Losses)			951						(226)						725
Interest Expense, net															208
Adjustment for less than wholly owned subsidiaries (b)															(5)
Corporate expenses, net															44
Corporate net special items															251
Business net special items															122
Non-operating pension (income) expense															(42)
Earnings (losses) from continuing operations before income taxes and equity earnings (losses)															$	147

2023:

In millions			Industrial Packaging						Global Cellulose Fibers						Total
Net Sales			$	15,596					$	2,890					$	18,486
Corporate and Intrasegment Sales															430
Total Net Sales															18,916
Less:
Cost of products sold			11,093						2,121
Selling and administrative expenses			1,078						211
Depreciation and amortization			1,144						286
Distribution expenses			1,240						335
Other segment items (a)			122						29
Business Segment Operating Profit (Losses)			919						(92)						827
Interest Expense, net															231
Adjustment for less than wholly owned subsidiaries (b)															(2)
Corporate expenses, net															27
Corporate net special items															28
Business net special items															107
Non-operating pension (income) expense															54
Earnings (losses) from continuing operations before income taxes and equity earnings (losses)															$	382

2022:

In millions			Industrial Packaging						Global Cellulose Fibers						Total
Net Sales			$	17,451					$	3,227					$	20,678
Corporate and Intrasegment Sales															483
Total Net Sales															21,161
Less:
Cost of products sold			12,509						2,183
Selling and administrative expenses			983						189
Depreciation and amortization			783						255
Distribution expenses			1,315						468
Other segment items (a)			119						26
Business Segment Operating Profit (Losses)			1,742						106						1,848
Interest Expense, net															325
Adjustment for less than wholly owned subsidiaries (b)															(5)
Corporate expenses, net															34
Corporate net special items															99
Business net special items															76
Non-operating pension (income) expense															(192)
Earnings (losses) from continuing operations before income taxes and equity earnings (losses)															$	1,511

Assets

In millions			2024						2023
Industrial Packaging			$	15,805					$	16,060
Global Cellulose Fibers			2,857						3,369
Corporate and other			4,138						3,832
Assets			$	22,800					$	23,261

Capital Spending

In millions			2024						2023						2022
Industrial Packaging			$	763					$	928					$	762
Global Cellulose Fibers			133						177						143
Subtotal			896						1,105						905
Corporate and other			25						36						26
Capital Spending			$	921					$	1,141					$	931

External Sales By Major Product

In millions			2024						2023						2022
Industrial Packaging			$	15,533					$	15,596					$	17,441
Global Cellulose Fibers			2,784						2,883						3,219
Other			302						437						501
Net Sales			$	18,619					$	18,916					$	21,161

INFORMATION BY GEOGRAPHIC AREA

Net Sales (c)

In millions			2024						2023						2022
United States (d)			$	16,300					$	16,340					$	18,482
EMEA			1,432						1,494						1,693
Pacific Rim and Asia			157						261						123
Americas, other than U.S.			730						821						863
Net Sales			$	18,619					$	18,916					$	21,161

Long-Lived Assets (e)

In millions			2024						2023
United States			$	8,617					$	9,021
EMEA			706						757
Americas, other than U.S.			352						390
Long-Lived Assets			$	9,675					$	10,168

*(a)*Other segment items includes Taxes other than payroll.

*(b)*Operating profits for industry segments include each segment’s percentage share of the profits of subsidiaries included in that segment that are less than wholly-owned. The pre-tax earnings for these subsidiaries is added here to present consolidated earnings from continuing operations before income taxes and equity earnings.

*(c)*Net sales are attributed to countries based on the location of the seller.

*(d)*Export sales to unaffiliated customers were $2.9 billion in 2024, $2.7 billion in 2023 and $3.2 billion in 2022.

*(e)*Long-Lived Assets includes Forestlands and Plants, Properties and Equipment, net.

NOTE 21 SUBSEQUENT EVENT

On February 13, 2025, the Company announced the permanent closure of its Red River containerboard mill in Campti, Louisiana with operations expected to cease by March 31, 2025. The Company expects to recognize costs associated with the closure in the first quarter of 2025, including accelerated depreciation, pre-tax cash severance and other shutdown charges.

For discussion of the DS Smith acquisition that was completed subsequent to December 31, 2024, refer to Note 7.