John V. Faraci

Chairman &

Chief Executive Officer

Vertical Research Partners

Global Packaging & Paper

Conference

March 7, 2012

2

Forward-Looking Statements

Certain statements in these slides and made during this presentation may be considered

forward-looking statements. These statements reflect management's current views and are

subject to risks and uncertainties that could cause actual results to differ materially from those

expressed or implied in these statements. Factors which could cause actual results to differ

include but are not limited to: (i) the level of our indebtedness and increases in interest rates; (ii)

industry conditions, including but not limited to changes in the cost or availability of raw

materials, energy and transportation costs, competition we face, cyclicality and changes in

consumer preferences, demand and pricing for our products; (iii) global economic conditions and

political changes, including but not limited to the impairment of financial institutions, changes in

currency exchange rates, credit ratings issued by recognized credit rating organizations, the

amount of our future pension funding obligation, changes in tax laws and pension and health

care costs; (iv) unanticipated expenditures related to the cost of compliance with existing and

new environmental and other governmental regulations and to actual or potential litigation; (v)

whether we experience a material disruption at one of our manufacturing facilities and risks

inherent in conducting business through a joint venture; (vi) risk and uncertainties associated

with the divestitures required by the U.S. Department of Justice consent decree that allowed the

Temple-Inland Inc. (“Temple-Inland”) transaction to proceed; (vii) the failure to realize synergies

and cost savings from the Temple-Inland transaction or delay in realization thereof; and (viii) our

ability to achieve the benefits we expect from all other strategic acquisitions, divestitures and

restructurings. These and other factors that could cause or contribute to actual results differing

materially from such forward-looking statements are discussed in greater detail in the company’s

Securities and Exchange Commission filings. We undertake no obligation to publicly update any

forward-looking statements, whether as a result of new information, future events or otherwise.

3

Statements Relating to Non-GAAP Financial Measures

During the course of this presentation, certain non-U.S. GAAP financial information will be presented.

A reconciliation of those numbers to U.S. GAAP financial measures is available on the company’s website at internationalpaper.com under Investors.

4

Committed to Continuous Improvement in Shareholder Value

AGENDA

Repositioned and Well-Positioned

Strong Full-Year 2011 Results

Structural Improvements in IP’s N.A. Businesses

Step-Change in Financial Performance

Balanced Capital Allocation

Earnings Growth Runway

1Q & 2012 Outlook

Step-Change Summary - Roadmap

5

Industrial Packaging

50%

Printing Papers

35%

Consumer Packaging

13%

Distribution 2%

Who We Are: 2012 Snapshot Repositioned and Well-Positioned

1 Excludes cash contributed to pension plan of $300 million, an increase in working capital related to the cessation of the European A/R securitization program of $209 million, cash received from unwinding a timber monetization of $175 million and a tax receivable collected related to pension contributions of $123 million.

2 Dividend Yield based on closing share price at December 30 3 TIN reflects 9M11 actual results annualized

4 Includes ($0.1) billion of mill divestitures and $0.3 billion in run rate synergies, net of taxes 5 Based on 2011 EBITDA before special items; Russia includes the Svetogorsk mill and IP’s share of Ilim JV equity earnings; Printing Papers segment includes Ilim JV;

IP’s share of Ilim JV equity earnings reflect approximate proportional adjustments for interest & tax

EBITDA by Region5 Leading Global Provider of Paper and Packaging

($ Billions) IP

2011

TIN

20113

IP + TIN

2011

Pro Forma

Revenue $26.0 $4.0 $30.0

EBITDA (before special items)

$3.7 $0.4 $4.34

EBITDA Margins 14% 10% 14%4

Free Cash Flow $1.71 $0.1 $1.94

Shareholder Return

Dividends Paid $0.43

Dividend Yield 3.5%2

Employees ~59,500 ~10,000 ~70,000

Countries >24 3 >24

EBITDA by Segment5

North America

75% Russia

9%

Europe 8%

Brazil 7%

Asia 1%

6

$2.05

$3.10

2010 2011

Earnings per Share

Strong Full-Year 2011 Results

Margin Expansion and Emerging Market

Growth Driving Earnings Improvement

Price Increase Realization

Strong Operations and Cost

Management

Outstanding Results from Ilim JV

Offset Input Cost Headwinds

Excellent Cash Generation

Return on Investment at Eight Percent

Earnings from continuing operations before special items

7

$500

$600

$700

$800

$900

$1,000

$1,100

$1,200

$700

$800

$900

$1,000

$1,100

$1,200

$/short ton UFS Pricing Trends RISI 20# Cutsize RISI 50# Offset

70%

75%

80%

85%

90%

95%

100%

105%

2,100 2,200 2,300 2,400 2,500 2,600 2,700 2,800 2,900 3,000 3,100 3,200

Operating Rate

Thousand Tons

U.S. Production/Capacity Capacity Shipments Operating Rate

65%

75%

85%

95%

105%

700

800

900

1,000

1,100

1,200

1,300

Operating Rate

Thousand Tons N.A. Shipments / Capacity

N.A. Cap NA Ship NA OpRt

N.A. Paper & Packaging Structural Change in IP Results

UNCOATED FREESHEET CONTAINERBOARD

IP Industrial Packaging 2005

2011

EBITDA Margin 8% 20%

ROI (before special items) 2% 10%

$350

$400

$450

$500

$550

$600

$650

$700

$/short ton Containerboard Pricing Linerboard Medium

Source: RISI

IP Printing Papers 2005

2011

EBITDA Margin 10% 22%

ROI (before special items) 0.6% 13%

2006 2011 2006 2011

Source: AF&PA Source: PPPC, RISI

2011 Excludes Recycling businesses; includes Saturating Kraft & Bag business

2006 2011 2006 2011

8

N. A. Coated Paperboard Relative EBITDA Margins

8 IP EBITDA margins based on North American Coated Paperboard operating profit before special items Competitor EBITDA margin estimate obtained from public filings and IP analysis

15.9%

12.4%

21.5%

13.6%

IP (North America) Competitor A

2010 2011

9

2.8

3.72

(0.6)

(0.8)

1.2

0.4

0.4 0.2

0.1

0.61

2005 Divested Businesses

Forest Products

N.A. Industrial Packaging

International Operations

N.A. Printing Papers

N.A. Coated Paperboard

Corporate & Other

Proforma with TIN

Step-Change in EBITDA Driven by the Transformation Plan

Earnings before special items 1 TIN reflects 9M11 actual results annualized of $0.4 billion plus $0.3 billion of annual run-rate synergies less $100 million of expected mill divestitures 2 Reflects IP’s 2011 EBITDA

TIN

4.3

$ B

illi

on

s

10

Step-Change Improvement in Free Cash Flow

$0

$500

$1,000

$1,500

$2,000

$2,500

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

2000 – 2004 Average

$0.9 Billion

2008 – 2011 Average

$1.8 Billion

Transformation

Free cash flow, based on data in the 10-K for each year at the time of filing.

Excludes net cash pension contributions impacting 2006, 2010 & 2011 cash flows under European accounts receivable securitization beginning in 2009 and

ending in 1Q11, and cash received from AFMTC & CBTC in 2009 and 2010.

11

Improving Returns on Invested Capital Transformation Driving ROI

4%

5%

6%

7%

4%

6%

8%

0%

2%

4%

6%

8%

2000 - 2005 Avg

2006 2007 3Q08 Run Rate

2009 2010 2011

RO

I

Global Economic Recession

Based on earnings from continuing operations before special items

12

3X EBITDA

$12.1 $12.0 $3.12

$0.3

$3.3

$6

$7

$8

$9

$10

$11

$12

$13

$14

$15

$16

2008 2009 2010 2011 + TIN Acquisition

Debt

December 2011 Pro Forma

with Acquisition

Billi

on

$2.93 Pension Gap

$3.21 Pension Gap

$15.3 $14.9

Strong Balance Sheet Target: Adjusted Debt < 3X EBITDA

Adjusted Debt reflects gross balance sheet debt plus pension gap

3X EBITDA based on 2008 actual EBITDA of $3.0 B and 2013 First Call EBITDA of $4.4 B 1 Pension gap as of 12/31/08 2 Excludes debt repayments of $2.75 B from the proceeds of bonds issuances of $2.75 B 3 IP + TIN pension gap as of 12/31/11

Contributed $0.3 B to

pension plan

Contributed $1.2 B to

pension plan

3X EBITDA

13

Strong balance sheet

Increased exposure to structurally stronger areas of the industry

(Paper & Packaging)

Better positioned geographically (U.S. + BRIC)

Acquired low cost, efficient assets while optimizing existing assets

Industry leading margins in core, global businesses

Growth outlook significantly enhanced by recent investments and

capital expansions (Temple-Inland / Franklin Fluff / Ilim JV &

Sun JV Investments / APPM)

Repositioned & Well Positioned

14

Improve Liquidity & Debt Coverage

Reduce Net Debt

Prudent Contributions

to Pension Plan

14

Return Cash to

Shareholders

Optimize Business Portfolio

Selective Reinvestment

Protect Balance Sheet

Systematically Return Cash to Shareholders Increased Dividend to Above Pre-Recession Levels Strategic Share Repurchases

Optimize Structural Capacity & Reduce Fixed Costs

Maintenance & Regulatory

Capital Expenditures

Investment in High Return Capital

Projects

High Return Strategic Acquisitions Track Record of Exceeding Synergy Goals Capitalizing on Global Demand Growth

Balanced Capital Allocation Priorities

15

Cycle Average Capital Spending 2012 Estimate: $1.45 Billion Including TIN

25%

50%

75%

100%

125%

$0

$300

$600

$900

$1,200

$1,500

2005 2006 2007 2008 2009 2010 2011 2012E AVG 2008- 2012E

Maintenance Regulatory Strategic

Cost Reduction TIN Acquisition % of Depreciation

$ Million % of

Depreciation

Reflects continuing operations

2012E includes estimated step-up depreciation for TIN

16

Strong Pipeline of High Return Cost Reduction Capital Projects

Savings Drivers – 55% Energy

– 15% Fiber

– 10% Chemicals

– 20% Other (labor, freight, reliability)

0

50

100

150

200

250

0%

20%

40%

60%

80%

100%

2010 2011 2012E 2013E 2014-15E

Cap

ex (

$M

M)

IRR

Capex Wtd Avg IRR

~$190MM

17

Earnings Growth Runway

India

Brazil Brazil

China (Sun JV)

Eastern Europe

North America

(Temple-Inland)

North America

(Franklin + xpedx)

Russia

EB

ITD

A

TIME

Today 2012

Near Term Next 2-3 Years

Medium Term Next 3+ Years

18 18

Temple-Inland

Acquisition

• Continue to Strengthen Core N.A. Packaging Business

• Increase cash generation

• > $300 million of synergies

1Q12-2013

Franklin, VA

Pulp Mill

Conversion

• Opportunistically Repurpose Existing Asset

• Low-cost position, growing global Fluff Pulp demand

2H12-2013

xpedx

Transformation

• Achieve Cost of Capital Returns in Distribution

• Target growth markets; improve buy, handle & sell processes

2H12-2013

IP-Sun JV

CPB Capital

Expansion

• Build Capacity to Grow with Market (China)

• Leverage existing low cost position 2013

Ilim JV

NBSK (China)

& UFS (Russia)

• Build Capacity to Grow with Market (Russia / China)

• Strong domestic market position with attractive fiber base

• Leverage existing low cost Softwood Pulp export position

2013

APPM

Acquisition

– IP India

• Platform for Future Growth in Paper and Packaging (India)

• Secured low-cost capacity

• Significant and Fast growing emerging market

Next 3-5 yrs

Major Earnings Runway Drivers

19

TIN Acquisition Strengthening Our Packaging Business

IP North

American

Industrial

Packaging

TIN

Packaging

Business1

Mill

Divestitures

Run Rate

Synergies

IP + TIN

after Divestitures

& Run Rate

Synergies

2011

Sales

($ Billion)

$8.6 $3.3 - - $11.9

2011

EBITDA

($ Billion)

$1.6 $0.4 ($0.1)2 $0.3 $2.2

2011

EBITDA

Margin

18% 12% - - 18%

Capacity

(000 TPY) 10,000 4,000 (970) - 13,030

Earnings from continuing operations before special items

1 TIN reflects 9M11 actual results annualized; EBITDA includes overhead allocation

2 Mill divesture estimate reflects EBITDA associated with 970M tons at avg. EBITDA/Ton

20

Significant Targeted Synergies Reaffirm at Least $300 Million

S G & A Eliminate Duplication

Mills Grade / Machine Mix Optimization

Efficiency Improvements

Supply Chain Logistics Optimization

Purchasing Consolidation

Box Plants System Streamlining

Customer and Segment Optimization

21

At least $300MM of Synergies Intact Headroom Offsets Divestiture Losses

EX

PE

CT

ED

S

YN

ER

GIE

S

$300MM Target

Modest Supply Chain Impact

Planned Upside: Mill Efficiency Improvements Box Plant Customer & Segment Optimization

Reduction due to Divestitures

Identified Headroom

$300MM Target

Reaffirmed

22

Franklin, VA Fluff Pulp Conversion Woodyard Reopened in January, 2012

Franklin, VA Mill to be repurposed as a dedicated Fluff Pulp Mill

Annual Volume of 270M tons of high quality Fluff Pulp

Start-up mid-year 2012 – Schedule & Financials On Target

Key Features: Pulp engineered to be adaptable across a wide

variety of market segments and fiberizers

Close proximity to 3rd largest U.S. East Coast Port

Sustainability Focus; Incorporates all Environmental & Quality Cert. Programs important to customers

Investment $83MM / Projected return >20%

22

23

xpedx Executing Over Three Years

$0

$10

$20

$30

$40

$50

1Q11 2Q11 3Q11 4Q11 Quarterly Goal

$ M

illi

on

Quarterly EBIT

Sell / Grow

Handle

Buy

Building Executing

Building Executing

Building Executing

Earnings from continuing operations before special items

Three YearExit Rate

24

IP-Sun Joint Venture Coated Paperboard Capital Expansion

Yanzhou, China

915M tons of existing Coated

Paperboard capacity, three

board machines

Fourth board machine

approved by Sun & IP boards

Construction underway

550M tons annual capacity

~$300 MM investment

4Q12 Start-up on schedule

Projected return > 12%

IP-Sun JV,

Yanzhou

25

Ilim Joint Venture Capital Expansion Update

Bratsk Mill Koryazhma Mill

New NBSK pulp line

550 M ton net capacity increase

Start-up in 2012

New recovery boiler

$700 MM capital

Projected return > 20%

Install paper machine

165 M tons of uncoated freesheet

55 M tons of coating base

Start-up in 2012

$270 MM capital

Projected return > 20%

26

APPM Acquisition – IP India

Completed acquisition of 75% stake

in APPM on October 14th

Initial entry into India – platform for

paper and packaging growth

Well-positioned with high-quality

assets in a low-cost, high-demand

growth market

Two uncoated freesheet mills with

combined capacity of 250M tons

IP management will assist the current team

with optimization of assets

Opportunity to build upon existing

relationships with suppliers and customers

Hyderabad IP India HQ

Successful Farm Forestry Program

27

EBITDA & ROI Runway

2005

~ $6.0

Cost of Capital 8% - 9%

~ $5.0

~ $3.7-$4.0

2011 Mid-Cycle Peak Trough

$2.8

EBITDA $ Billion

$3.7

EBITDA before special items

Medium Term, Next 3+ Years

28

1Q & 2012 Outlook Positive Trend After Tough 1Q

1Q12 Outlook

Improving volumes in pkg.

Lower export prices

(Pulp, CB, Papers)

Seasonally higher

consumption and input

costs

One-time costs associated

with strategic projects

Higher pension, interest and

tax expense

TIN step-up impact

(non-cash)

January operational issues

2012 Outlook

U.S. economic recovery

Modest demand growth in

most IP business segments

driven by emerging markets

Input costs mixed but stable

in aggregate

Inventories in good shape

Realization of high return

cost reduction projects

Major earnings runway

drivers ramp-up in 2H

Most significant being

TIN related synergies

29

Step Change Summary - Roadmap

• Exited non-strategic businesses

• Completed strategic acquisitions

• Reduced structural capacity & fixed costs

• Achieved industry-leading margins

• Significantly improved balance sheet and FCF

What We’ve Done

What We’ll Do

• Continue to grow strong, sustainable FCF

• Expand margins & earnings in all businesses

• Achieve cycle-average ROI above cost-of-capital

• Maintain strong balance sheet

• Continue balanced cash allocation

• Increase dividend over time

What We’re Doing

• Managing our supply to meet customer demand

• Maintaining strong balance sheet & Increasing FCF

• Capitalizing on global demand growth

• Investing in high return projects and strategic acquisitions

• Returning cash to shareholders