EX-99.2 3 dex992.htm SLIDES OF INTERNATIONAL PAPER COMPANY, DATED JANUARY 29, 2009 Slides of International Paper Company, dated January 29, 2009
Tim S. Nicholls
Senior Vice President &
Chief Financial Officer
Fourth Quarter
2008 Review
January 29, 2009
Fourth Quarter
2008 Review
January 29, 2009
John V. Faraci
Chairman &
Chief Executive Officer
Exhibit 99.2

2
Forward-Looking Statements
Forward-Looking Statements
These slides and statements made during this presentation contain 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
relate
to:
(i) the company's ability to realize anticipated profit improvement from its transformation
plan, including our ability to realize the expected benefits of our acquisition of the assets of
Weyerhaeuser Company’s containerboard, packaging and recycling business in light of
integration difficulties and other challenges; (ii) increases in
interest rates and our ability to
meet our debt service obligations; (iii) industry conditions, including but not limited to
changes
in
the
cost
or
availability
of
raw
materials
and
energy,
transportation
costs,
competition we face, the company's product mix, demand and pricing for its products; (iv)
global economic conditions and political changes, including but not limited to changes in
currency exchange rates, credit availability, the company's credit ratings issued by
recognized credit rating organizations and pension and health care costs; (v) unanticipated
expenditures related to the cost of compliance with environmental and other governmental
regulations and to actual or potential litigation; and (vi) whether we experience a material
disruption at one of our manufacturing facilities. We undertake no obligation to publicly
update any forward-looking statements, whether as a result of new information, future
events
or
otherwise.
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.

3
Statements Relating to Non-GAAP
Financial Measures
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
The World Changed
2008 –
Two Distinct Periods
The World Changed
2008 –
Two Distinct Periods
First Three
Quarters
Fourth
Quarter
Volume
Steady
Dramatic Decline
Price
Increasing
Peaking,
Decline in Pulp
Market Downtime
Limited
Significant in
UFS & KLB
Input Costs
Significant
Increase
Relief
Cost Reduction
Started Early
Progress
Operations
Good
Good

5
2008 Full-Year Results
Solid Earnings, Record Free Cash Flow
2008 Full-Year Results
Solid Earnings, Record Free Cash Flow
$2.22
$2.01
Earnings
from
continuing
operations
before
special
items;
includes
CBPR
1
Cash provided by continuing operations less capital expenditures
2007
2008
Sales
($Billion)
$21.9
$24.8
13%
EBITDA
($Million)
$2.8
$3.0
8%
Free Cash Flow
1
($Million)
$0.7
$1.7
158%
$0.69
$0.21
$1.53
$1.80
2007
2008
4Q
1Q -
3Q

6
2005
2006
2007
Diluted EPS
from Continuing Operations before Special Items
Diluted EPS
from Continuing Operations before Special Items
A
reconciliation
to
GAAP
EPS
is
available
at
www.internationalpaper.com
under
the
Investors
tab
at
presentations
Forest Products earnings percentages are based on operating income
2008
% of Operating Profit
from Forest Products
52%
37%
24%
23%
$1.33
$2.22
$0.70
$2.01

7
Global Input & Freight Costs
$856MM, or $1.38/Share Impact vs. 2007
Global Input & Freight Costs
$856MM, or $1.38/Share Impact vs. 2007
Input costs for continuing businesses; does not include CBPR
(290)
(262)
(169)
(135)
($300)
($250)
($200)
($150)
($100)
($50)
$0
Chemicals
Energy
Fiber
Freight
North America
Outside North America

8
Responding to the Economic Contraction
Decisive Actions to Weather the Storm
Responding to the Economic Contraction
Decisive Actions to Weather the Storm
Capacity
Curtailments
Cost Reductions
Cash & Liquidity
Initiatives
Containerboard
•
700,000 tons
•
Valliant #3 Shutdown
•
5 packaging plants
Uncoated Freesheet
•
140,000 tons
•
Franklin #3 Shutdown
•
Inverurie
Mill
Review
Market Pulp
•
140,000 tons
•
Bastrop Mill Shutdown
Coated Paperboard
•
14,000 tons
•
$100MM Overhead
Reduction
•
4,400 Headcount
Reduction
•
Hiring & Salary Freeze
•
Executive Compensation
up to 50% Reduction
•
$300MM 2008 Capex
Reduction
•
$300MM 2009 Capex
Reduction
•
Fund Company 401(k)
Match with Shares
•
Extend A/R Securitization
•
Ilim
Dividend
•
Working Capital Focus
Asset Sales
•
Haynesville Mineral Rights

9
IP Continues to Become a Leaner Company
10% Headcount Reduction in 2008/09
IP Continues to Become a Leaner Company
10% Headcount Reduction in 2008/09
Excludes Ilim
joint venture employees
* Includes 900 Weyerhaeuser positions that did not come to IP
113
66
62
59
CBPR
(37)
(25)
(4)*
(3)
0
20
40
60
80
100
120
2000
Divestments &
Acquisitions
Headcount
Reduction
Jun-08
Headcount
Reduction
Dec-08
2009
Headcount
Reduction
2009

10
$ / Share
$ / Share
P&C      .40
IPG        .23
CPG      .15
Eu
& Br .14
Chemicals   (.47)
Energy        (.43)
Fiber           (.27)
Freight        (.21)
2.22
Earnings
from
continuing
operations
before
special
items;
volume
includes
earnings
from
CBPR
Forest Products Earnings
2008   31.5%
2007   30%
2.01
2008 vs. 2007 EPS
Input Cost Inflation, Improved Price & Mix
2008 vs. 2007 EPS
Input Cost Inflation, Improved Price & Mix
1.48
1.35
.92
.59
.06
.13
.02
(1.38)
(.14)
(.02)
(.31)
.74
.66
$0.00
$0.25
$0.50
$0.75
$1.00
$1.25
$1.50
$1.75
$2.00
$2.25
$2.50
2007
Price
Input Costs
Cost & Mix
Volume/LOO
Corporate &
Other
Ilim
Tax
Interest
Shares
2008

11
Fourth Quarter 2008 Summary
Dramatic Economic Deceleration
Fourth Quarter 2008 Summary
Dramatic Economic Deceleration
What Changed in North America
Double-digit volume declines
Prices peaked & under pressure
Input costs peaked & declining
How We Accelerated our Actions
25% Downtime in KLB
15% Downtime in NA UFS
30% Downtime in NA Market Pulp
No inventory build in KLB & UFS
Accelerated overhead reductions
Focus on improving free cash flow
$0.69
$0.21
Earnings from continuing operations before special items
$0.41
$0.14
$0.28
$0.07
4Q07
4Q08
Forest Products EPS
Operating Business EPS

12
$
$
/
/
Share
Share
IPG        .07
P&C       .06
CPG       .05
Eu
& Br  .02
Chemicals   (.16)
Fiber           (.07)
Energy        (.05)    
Freight        (.02)
.16
Earnings
from
continuing
operations
before
special
items;
volume
includes
earnings
from
CBPR
Forest
Products
Earnings
4Q08   23%
4Q07   31%
.48
.21
.69
4Q08 vs. 4Q07 EPS
Higher Prices, Weak Volumes, Increased Input Costs
4Q08 vs. 4Q07 EPS
Higher Prices, Weak Volumes, Increased Input Costs
.41
.14
.20
.24
.05
.01
(.30)
(.27)
(.03)
(.17)
.28
.07
$0.00
$0.10
$0.20
$0.30
$0.40
$0.50
$0.60
$0.70
$0.80
4Q07
Price
Input Costs
Cost & Mix
Volume / LOO
Corporate &
Other
Vicksburg Ins.
Recov.
Tax
Interest
4Q08

13
Lack of Order Downtime
Matching Our Production to Our Customers’
Needs
Lack of Order Downtime
Matching Our Production to Our Customers’
Needs
(Thousand Tons)
819
148
53
2
34
998

14
Industrial Packaging Earnings
4Q08 vs. 4Q07
Industrial Packaging Earnings
4Q08 vs. 4Q07
1
Excludes trade volume and includes CBPR earnings
2
Includes $33 million of insurance recovery for Vicksburg mill
3
Excludes special charges of $26 million for CBPR integration costs and $8 million for Ace Packaging facility closures
1
1
3
3
2
2
109
145
42
71
21
(59)
(39)
$0
$25
$50
$75
$100
$125
$150
$175
4Q07
Price
Input Costs
Volume
Cost & Mix
Other
4Q08

15
CBPR Synergies
Achieving Higher Savings at Faster Rate
CBPR Synergies
Achieving Higher Savings at Faster Rate
$50 MM
$50 MM
$70 MM
$70 MM
$265 MM
$265 MM
2008 Target
2008 Actual
2009 Target
Box Plants
Mix
Mills
Overhead

16
* Excludes special charges of $123 million  for the permanent shutdown of the Louisiana mill and $30 million for the permanent 
shutdown of the # 3 paper  machine at the Franklin mill
Printing Papers Earnings
4Q08 vs. 4Q07
Printing Papers Earnings
4Q08 vs. 4Q07
243
NA Pulp
Earnings
NA Pulp
Earnings

17
* Excludes a special charge of $4 million related to the reorganization of Shorewood’s Canadian operations
*
*
Consumer Packaging Earnings
4Q08 vs. 4Q07
Consumer Packaging Earnings
4Q08 vs. 4Q07
15
1
32
14
(37)
(6)
(17)
$0
$10
$20
$30
$40
$50
4Q07
Price
Input Costs
Volume
Cost & Mix
Other
4Q08

18
$ Million
4Q07
3Q08
4Q08
Sales
$2,045
$2,075
$1,940
Earnings
$28
$35
$26
xpedx
Continued Operating Cost Improvements
xpedx
Continued Operating Cost Improvements
Sales down 5% vs. 4Q07
Paper & packaging volumes weakened; facility
supplies volumes remained solid
National accounts sales growth offset most of the
paper & packaging decline
Reduced headcount by 275 positions, or $17MM

19
Forest Products
Forest Products
4Q07
3Q08
4Q08
Sales ($ Million)
$190
$55*
$65
Earnings ($ Million)
$171
$305
$38
Acres Sold
61,000
33,000
30,000
Price / Acre
$2,750
$1,564
$2,106
200,000 acres remaining with NPV of up to $300MM
* Mineral rights sale is not reflected in sales but in Other Income

20
Ilim’s
results are reported on a one-quarter lag
IP’s share of Ilim’s
3Q08 & 4Q08 earnings include $4 million & $14 million unfavorable pre-tax foreign exchange
impacts respectively.
$ Million
3Q08
4Q08
Sales (100%)
$530
$530
Earnings (IP Share)
$5
$0
Business
Volume
(000 Metric
Tons)
Price / Ton
Pulp
4%
($26)
Containerboard
1%
($16)
Received $62MM Cash Dividend
Ilim
Joint Venture 4Q08 Results
Weak Demand in China & Price Declines
Ilim
Joint Venture 4Q08 Results
Weak Demand in China & Price Declines

21
Capital Expenditures
2007 -
2009
Capital Expenditures
2007 -
2009
% of Depreciation
120%
75%
45%
$1,300
$1,300
$1,000
$1,000
$700
$700
Millions
Millions
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
2007
2008
2009
Maintenance
Regulatory
Cost Reduction
Strategic
Total

22
Free Cash Flow
New Company Record
Free Cash Flow
New Company Record
Free Cash Flow
($ Billion)
2007
2008
Cash Provided by
Continuing Operations
$2.0
$2.7
$0.7
Less Capital Investment
($1.3)
($1.0)
$0.3
Free Cash Flow
$0.7
$1.7
$1.0

23
Cash & Committed Facilities
$3.6 Billion
Cash & Committed Facilities
$3.6 Billion
$ Million
Maturity
Facility
Cost
Year-End 2008 Cash
-
$1,100
-
$1.0B Accounts
Receivables Program
JAN 2010
Zero Drawn
CP Rate + 150 bps
$1.5B Corporate
Revolver 
MAR 2011
Zero Drawn
LIBOR + 50 -
60 bps
Total Cash & Committed Facilities
$3,600
-
Cost includes commitment fees

24
Debt Maturities by Quarter
2009-2011
Debt Maturities by Quarter
2009-2011
$362
paid
1.15.09
500MM
Euro
Loan
Euro denominated 500 million note due in 3Q09 assumes an exchange rate of 1.31 USD/EUR
The profile does not include Timber Monetization debt or non-US short-term credit facilities and loans

25
Progress on Debt Reduction Commitment
$1 Billion Reduction in First Six Months
Progress on Debt Reduction Commitment
$1 Billion Reduction in First Six Months
$ Billion
August 2008 Pro Forma with CBPR
$12.7
2H08 Debt Reduction
$0.6
January 2009 Debt Reduction
$0.4
Total Debt Balance
$11.7

26
Pension Update
No Cash Contribution Required in 2009
Pension Update
No Cash Contribution Required in 2009
Market value of plan assets decreased
by 23% to $6.1B
PBO increased to $9.3B* due to a lower
discount rate
* US GAAP basis

27
Goodwill Impairment Charges
Goodwill Impairment Charges
Performing annual goodwill review
Testing will be completed during 1Q09
Could record an additional 1Q09 impairment
charge in P&CP up to $1.3B
$ Million
4Q08
Total
Charge
Coated Paperboard
$438
$438
Printing & Communications Papers
$0
Up to
$1,300

28
Special Items & Discontinued Operations
4Q08
Special Items & Discontinued Operations
4Q08
($MM)
$/Share
Special Items (Net of minority interest & tax)
Goodwill Impairments
($438)
Louisiana Mill Permanent Shutdown
($75)
Franklin Mill PM #3 Shutdown
($18)
2008 Overhead Cost Reduction
($32)
CBPR Acquisition Costs
($16)
Other
($7)
Tax Adjustment
$40
Total Special Items
($546)
($1.29)
Discontinued Operations (Net of tax)
$5
$0.01

29
1Q09 Outlook
Changes from 4Q08
1Q09 Outlook
Changes from 4Q08
Selling Prices
Under Pressure
Volumes
Continued Weakness
Input & Freight Costs
Declining
Maintenance Outages
Increasing
Operations
Good, but
Impacted by Downtime

30
2008 Summary
Record Free Cash Flow
2008 Summary
Record Free Cash Flow
Record 4Q and Full-Year Free Cash Flow
Record Input Cost Inflation
Severe Demand Decline in Fourth Quarter
Rapid Integration of Acquisition
Strong Earnings Despite Headwinds
Significant
Back-Up Liquidity

31
Questions & Answers
Questions & Answers
Investor Relations Contacts
Thomas A. Cleves
901-419-7566
Ann-Marie Donaldson
901-419-4967
Emily Nix
901-419-4987
Media Contact
Kathleen Bark
901-419-4333

32
Appendix

33
2007
2008
2009
Estimate
Capital Spending
($ Billion)
$1.3
$1.0
$.7
Depreciation &
Amortization ($ Billion)
$1.1
$1.3
$1.6
Net Interest Expense
($ Million)
$297
$492
$700
Corporate
Items
($ Million)
$206
$103
$250
Effective
Tax
Rate
30%
31.5%
34%
1
Excludes discontinued operations
2
Before special items and excluding Ilim
Key Financial Statistics
Key Financial Statistics
2
2
1
1

34
Business Segment Price Realization
Business Segment Price Realization
Average Selling Price Realizations
Quarterly
Full Year
Printing Papers ($/ton)
4Q07
3Q08
4Q08
2007
2008
Uncoated Freesheet
$925
$1,013
$1,005
$907
$988
Pulp
$621
$645
$577
$598
$630
Industrial Packaging ($/ton)
4Q07
3Q08
4Q08
2007
2008
Containerboard
$536
$567
$584
$521
$563
Corrugated Boxes
$825
$864
$910
$802
$866
Average IP U.S. selling price realizations (includes the impact of mix across all grades)
Does not include CBPR

35
4Q08 vs. 4Q07
4Q08 vs. 3Q08
Business
Volume
Price / Ton
Volume
Price / Ton
N.A. Containerboard
(23%)
$48
(24%)
$17
N.A. Container
(18%)
$85
(17%)
$46
European Container
(5%)
€0
7%
(€33)
Industrial Packaging
Industrial Packaging
Volume and price exclude CBPR
Average IP price realization (includes the impact of mix across all grades)

36
Average IP price realization (includes the impact of mix across all grades)
4Q08 vs. 4Q07
4Q08 vs. 3Q08
Business
Volume
Price / Ton
Volume
Price / Ton
N.A. Paper
(19%)
$80
(15%)
($8)
N.A. Pulp
(1%)
($44)
(10%)
($68)
European Paper
(2%)
(€23)
2%
(€11)
Brazilian Paper
(5%)
$36
(1%)
$24
Printing Papers
Printing Papers

37
Average IP price realization (includes the impact of mix across all grades)
4Q08 vs. 4Q07
4Q08 vs. 3Q08
Volume
Price/Ton
Volume
Price/Ton
U.S. Coated Paperboard
(3%)
$81
(5%)
$25
Revenue
Price
Revenue
Price
Converting Businesses
0%
NA
(3%)
NA
Consumer Packaging
Consumer Packaging

38
Debt Covenants
Debt Covenants
Covenant
2008 Year-End
Debt to Total Capital
Maximum of 60%
52%
Consolidated Net Worth
Minimum of $9 Billion
$11.2 Billion

39
Debt Maturity Profile
Debt Maturity Profile
Euro denominated 500 million note due in 2009 assumes an exchange rate of 1.31 USD/EUR
The 10-year profile does not include Timber Monetization debt or non-US short-term credit facilities and loans
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
$2,000
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
US
US -
Paid
Non-US
CBPR Acquisition

40
Pension Plan Expense Information
Pension Plan Expense Information
Key Variables
2007
2008
2009E
Assumed Rate
of Return
8.5%
8.5%
8.25%
Discount Rate
5.75%
6.2%
6.0%
* U.S. plans only
Pension expense reflects service cost, interest cost, amortization of actuarial losses and expected return on plan assets
Average Annualized Returns
2008
(23.6%)
Past Five Years
4.2%
Past Ten Years
5.4%
Portfolio Asset Allocation at 12-31-08
Equity
38%
Bonds
40%
Real Estate & Other
22%
Annual Pension Expense*
210
123
245
$0
$50
$100
$150
$200
$250
$300
2007
2008
2009E

41
$ Millions
4Q08
1Q09E
2008
2009E
North America
$21
19
$122
$125
Europe
0
2
38
34
Brazil
2
4
10
8
Printing Papers Total
$23
$25
$170
$167
Industrial Packaging
$13
$53
$80
$153
Consumer Packaging
$14
$5
$38
$46
Total Impact
$50
$83
$288
$366
Dollar impact of planned maintenance outages are estimates and subject to change
2009 estimates include CBPR outages
Maintenance Outages Expenses
Maintenance Outages Expenses

42
Special Items & Discontinued Operations
Special Items & Discontinued Operations
Diluted Earnings per Share
4Q08
2008
Earnings
from
Continuing
Operations
& Before Special Items
$0.21
$2.01
Special Items
($1.29)
($1.85)
Earnings (Loss)
from Continuing Operations
($1.08)
$0.16
Discontinued Operations
$0.01
($0.03)
Net Earnings (Loss)
($1.07)
$0.13

43
2008 Special Items
2008 Special Items
($Millions)
$/Share
Special Items (Net of minority interest & tax)
Goodwill Impairments
($438)
Louisiana Mill Shutdown
($75)
Franklin Mill PM # 3 Shutdown
($18)
2008 Overhead Cost Reduction
($32)
CBPR Acquisition Costs & Supply Chain Write-off
($85)
Inverurie
Mill Asset Impairment Charge
($84)
Legal Reserves
($47)
U.S. Taxes on non-U.S. Gain
($29)
Shorewood Reorganization
($19)
Other
$2
Tax Adjustment
$40
Total Special Items
($785)
($1.85)

44
2008 EBITDA
from Continuing Operations before Special Items
2008 EBITDA
from Continuing Operations before Special Items
Operating
Profit
$ Millions
D & A
$ Millions
Tons
(000)
EBITDA / Ton
Printing Papers
North American
$435
$275
3,397
$209
European
$146
$81
1,461
$155
Brazilian
$186
$131
853
$372
U.S. Market Pulp
($33)
$28
1,604
($3)
Industrial Packaging
North American
$414
$411
8,821
$94
European
$64
$37
1,123
$90
Consumer Packaging
U.S. Coated Paperboard
$46
$138
1,591
$116
Total
$1,257
$1,101
18,850
$125

45
Operating Profits by Industry Segment
from Continuing Operations before Special Items
Operating Profits by Industry Segment
from Continuing Operations before Special Items
$ Million
4Q07
3Q08
4Q08
2007
2008
Printing Papers
$243
$210
$113
$839
$734
Industrial Packaging
$109
$153
$145
$374
$482
Consumer Packaging
$15
$6
$1
$112
$47
Distribution
$28
$35
$26
$108
$103
Forest Products & Other
$171
$305
$38
$464
$409
Operating Profit
$566
$709
$323
$1,897
$1,775
Net Interest Expense
($79)
($144)
($186)
($297)
($492)
Minority Interest / Equity Earnings
Adjustment
$4
($1)
($14)
$19
($3)
Corporate Items
($56)
($40)
($21)
($206)
($103)
Special Items
$4
($259)
($681)
$241
($991)
Earnings (Loss) from continuing
operations before income taxes, equity
earnings & minority interest
$439
$265
($579)
$1,654
$186
Equity Earnings, net of taxes -
Ilim
NA
$5
$0
NA
$54

46
Geographic Business Segment Operating Results
from Continuing Operations
Geographic Business Segment Operating Results
from Continuing Operations
Excludes Forest Products
$ Million
Sales
4Q07
3Q08
4Q08
2007
2008
Printing Papers
North American
$865
$905
$765
$3,495
$3,435
European
$415
$425
$350
$1,510
$1,655
Brazilian
$255
$255
$215
$850
$950
U.S. Market Pulp
$180
$210
$170
$655
$750
Asian
$5
$5
$5
$20
$20
Industrial Packaging
North American
$1,005
$1,935
$2,125
$3,880
$6,170
European
$300
$285
$255
$1,100
$1,170
Asian
$85
$100
$75
$265
$350
Consumer Packaging
North American
$620
$645
$635
$2,405
$2,505
European
$75
$80
$70
$280
$300
Asian
$85
$105
$95
$330
$390
Distribution
$2,045
$2,075
$1,940
$7,320
$7,970

47
Geographic Business Segment Operating Results
from Continuing Operations before Special Items
Geographic Business Segment Operating Results
from Continuing Operations before Special Items
Excludes Forest Products
$ Million
Operating Profit
4Q07
3Q08
4Q08
2007
2008
Printing Papers
North American
$101
$131
$73
$415
$435
European
$53
$29
$36
$171
$146
Brazilian
$61
$58
$44
$174
$186
U.S. Market Pulp
$27
($9)
($39)
$78
($33)
Asian
$1
$1
($1)
$1
$0
Industrial Packaging
North American
$90
$140
$130
$305
$414
European
$19
$11
$15
$67
$64
Asian
$0
$2
$0
$2
$4
Consumer Packaging
North American
$4
$7
$16
$70
$38
European
$7
$0
$5
$30
$22
Asian
$4
($1)
($20)
$12
($13)
Distribution
$28
$35
$26
$108
$103

48
1
2
2008 Earnings from Continuing Operations
2008 Earnings from Continuing Operations
1
Assuming dilution
2
A reconciliation to GAAP EPS is available at www.internationalpaper.com
under the Investors tab at presentations
Pre-Tax
$MM
Tax
$MM
Minority
Interest
$MM
Equity
Earnings
Net
Income
$MM
Estimated
Tax Rate
Average
Shares
MM
Diluted
EPS
Before Special Items
1Q08
$239
($75)
($5)
$16
$175
31.5%
423
$0.41
2Q08
$312
($100)
($7)
$30
$235
32.5%
423
$0.56
3Q08
$524
($170)
($3)
$5
$356
32.5%
423
$0.84
4Q08
$103
($24)
$12
($2)
$89
23.0%
422
$0.21
2008
$1,178
($369)
($3)
$49
$855
31.5%
425
$2.01
Special Items
1Q08
($41)
$16
$0
$0
($25)
39%
423
($0.06)
2Q08
($10)
$3
$0
$0
($7)
30%
423
($0.02)
3Q08
($259)
$52
$0
$0
($207)
20%
423
($0.49)
4Q08
($682)
$136
$0
$0
($546)
20%
422
($1.29)
2008
($992)
$207
$0
$0
($785)
21%
425
($1.85)
Earnings from Continuing Operations
1Q08
$198
($59)
($5)
$16
$150
30%
423
$0.35
2Q08
$302
($97)
($7)
$30
$228
32%
423
$0.54
3Q08
$265
($118)
($3)
$5
$149
45%
423
$0.35
4Q08
($579)
$112
$12
($2)
($457)
19%
422
($1.08)
2008
$186
($162)
($3)
$49
$70
87%
425
$0.16

49
3
2
1
2007 Earnings from Continuing Operations
2007 Earnings from Continuing Operations
1
Assuming dilution
2
A
reconciliation
to
GAAP
EPS
is
available
at
www.internationalpaper.com
under
the
Investors
tab
at
presentations
3
Not meaningful
Pre-Tax
$MM
Tax
$MM
Minority
Interest
$MM
Net
Income
$MM
Estimated
Tax Rate
Average
Shares
MM
Diluted
EPS
Before Special Items
1Q07
$308
($99)
($6)
$203
32%
448
$0.45
2Q07
$319
($91)
($5)
$223
29%
431
$0.52
3Q07
$349
($100)
($6)
$243
29%
426
$0.57
4Q07
$435
($134)
($7)
$294
31%
424
$0.69
2007
$1,411
($424)
($24)
$963
30%
433
$2.22
Special Items
1Q07
$298
($44)
$0
$254
15%
448
$0.57
2Q07
($25)
$2
$0
($23)
8%
431
($0.06)
3Q07
($34)
$11
$0
($23)
32%
426
($0.05)
4Q07
$4
$40
$0
$44
424
$0.11
2007
$243
$9
$0
$252
-4%
433
$0.59
Earnings from Continuing Operations
1Q07
$606
($143)
($6)
$457
24%
448
$1.02
2Q07
$294
($89)
($5)
$200
30%
431
$0.46
3Q07
$315
($89)
($6)
$220
28%
426
$0.52
4Q07
$439
($94)
($7)
$338
21%
424
$0.80
2007
$1,654
($415)
($24)
$1,215
25%
433
$2.81
NM

50
Total Cash Cost Components
2008
Total Cash Cost Components
2008
North American Mills Only
Does not include CBPR

51
Global Input & Freight Costs by Segment
$192 Million Global Impact vs. 4Q07
Global Input & Freight Costs by Segment
$192 Million Global Impact vs. 4Q07
Consumer
Packaging
($36)
Industrial
Packaging
($59)
Printing
Papers
($97)
($100)
($80)
($60)
($40)
($20)
$0
Fiber
Energy
Chemicals
Freight
Input costs for continuing businesses; does not include CBPR

52
Global Input & Freight Costs by Input
$192MM, or $0.30/Share Impact vs. 4Q07
Global Input & Freight Costs by Input
$192MM, or $0.30/Share Impact vs. 4Q07
Input costs for continuing businesses; does not include CBPR
(99)
(41)
(33)
(19)
($120)
($100)
($80)
($60)
($40)
($20)
$0
$20
Chemicals
Fiber
Energy
Freight
North
America
Outside North America

53
North American Input Cost Escalation
Input Cost Inflation Exceeded Price Increases
North American Input Cost Escalation
Input Cost Inflation Exceeded Price Increases
North American Papers & Packaging; does not include CBPR
$0
$100
$200
$300
$400
$500
$600
$700
1Q08 vs. 1Q07
2Q08 vs. 2Q07
3Q08 vs. 3Q07
4Q08 vs. 4Q07
Cumulative                 
2008 vs. 2007
Price Increases
Input Cost Increases

54
2005
2006
2007
NYMEX Natural Gas closing prices
Index: Jan 2005 Natural Gas Costs = 100
Natural Gas Costs
3% Decrease vs. 4Q07 Average Cost
Natural Gas Costs
3% Decrease vs. 4Q07 Average Cost
2008
0
50
100
150
200
250
Jan
Apr
Jul
Oct
Jan
Apr
Jul
Oct
Jan
Apr
Jul
Oct
Jan
Apr
Jul
Oct

55
60
80
100
120
140
160
180
200
220
Jan
Apr
Jul
Oct
Jan
Apr
Jul
Oct
Jan
Apr
Jul
Oct
2006
2007
Index: Jan 2006 Fuel Oil Costs = 100
U.S. Fuel Oil
34% Decrease vs. 4Q07 Average Cost
U.S. Fuel Oil
34% Decrease vs. 4Q07 Average Cost
2008
Delivered cost to U.S. facilities
Does not include CBPR

56
90
95
100
105
110
115
120
Jan
Apr
Jul
Oct
Jan
Apr
Jul
Oct
Jan
Apr
Jul
Oct
Jan
Apr
Jul
Oct
U.S. Mill Wood Costs
12% Increase vs. 4Q07 Average Cost
U.S. Mill Wood Costs
12% Increase vs. 4Q07 Average Cost
Index: Jan 2005 Wood Costs = 100
2005
2006
2007
2008
Delivered cost to U.S. facilities
Does not include CBPR

57
2005
2006
2007
2008
Index: Jan 2005 Caustic Soda Costs = 100
U.S. Caustic Soda Costs
107% Increase vs. 4Q07 Average Cost
U.S. Caustic Soda Costs
107% Increase vs. 4Q07 Average Cost
Delivered cost to U.S. facilities
Does not include CBPR

58
100
125
150
175
200
225
250
Jan
Apr
Jul
Oct
Jan
Apr
Jul
Oct
Jan
Apr
Jul
Oct
2006
2007
Index: Jan 2006 Starch Costs = 100
Delivered cost to U.S. facilities
Does not include CBPR
U.S. Starch Costs
17% Increase vs. 4Q07 Average Cost
U.S. Starch Costs
17% Increase vs. 4Q07 Average Cost
2008

59
Global Consumption
Annual Purchase Estimates for Key Inputs
Global Consumption
Annual Purchase Estimates for Key Inputs
Does
not
include
Asian
or
Ilim
consumption;
excludes
consumption
by permanent & indefinite machine shutdowns
Estimates are based on normal operations and may be impacted by downtime
Commodity
U. S.
Non –
U. S.
Energy
Natural Gas (MM BTUs)
50,500,000
16,000,000
Fuel Oil (Barrels)
2,100,000
500,000
Coal (Tons)
1,200,000
230,000
Fiber
Wood (Tons)
50,000,000
8,400,000
Old Corrugated Containers (Tons)
3,500,000
310,000
Chemicals
Caustic Soda (Tons)
350,000
60,000
Starch (Tons)
500,000
110,000
Sodium Chlorate (Tons)
250,000
50,000
LD Polyethylene (Tons)
50,000
-
Latex (Tons)
25,000
4,000