EX-99.2 3 dex992.htm SLIDES OF INTERNATIONAL PAPER COMPANY Slides of International Paper Company
First Quarter
2009 Review
April 30, 2009
First Quarter
2009 Review
April 30, 2009
John V. Faraci
Chairman &
Chief Executive Officer
Tim S. Nicholls
Senior Vice President &
Chief Financial 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)  increases in interest rates and our ability to meet our debt service obligations; (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
its
products;
(iii)
global
economic
conditions
and political changes, including but not limited to the impairment of financial institutions,
changes in currency exchange rates, credit availability, credit ratings issued by recognized
credit rating organizations, the amount of our future pension funding obligation and
pension and health care costs; (iv) unanticipated expenditures related to the cost of
compliance
with
environmental
and
other
governmental
regulations
and
to
actual
or
potential litigation; and (v) whether we experience a material disruption at one of our
manufacturing facilities and risks inherent in conducting business through a joint venture.
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
First Quarter 2009 Results Summary
Solid Results Despite Weak Economy
First Quarter 2009 Results Summary
Solid Results Despite Weak Economy
Solid Results
Input Cost Relief
Excellent Operations
Integration Synergies
Reduced Overhead Expenses
Strong Free Cash Flow
Debt Refinancing & Reduction
$0.37
$0.14
$0.08
$0.04
$0.07
1Q08
4Q08
1Q09
Forest Products EPS
Operating Business EPS
Earnings from continuing operations before special items
$0.21
$0.41

5
1Q09 Financial Snapshot
1Q09 Financial Snapshot
Earnings
from
continuing
operations
before
special
items;
4Q08
&
1Q09
includes
CBPR
1
Cash provided by continuing operations less capital expenditures
$ Billion
1Q08
4Q08
1Q09
Sales
$5.7
$6.5
$5.7
EBITDA
$0.6
$0.7
$0.6
Free
Cash
Flow
$0.2
$0.4
$0.7
Cash Balance
$0.9
$1.1
$1.0
1

6
Industrial Packaging Integration Progress
On Track Despite Economic Recession
Industrial Packaging Integration Progress
On Track Despite Economic Recession

7
$ / Share
$ / Share
Earnings from continuing operations before special items
.48
1Q09 vs. 4Q08 EPS
Weak Volume , Input Cost Relief & Strong Operations
1Q09 vs. 4Q08 EPS
Weak Volume , Input Cost Relief & Strong Operations
Forest
Products
Earnings

8
20
81
23
$0
$15
$30
$45
$60
$75
$90
Fiber
Energy
Chemicals
Freight
OCC
Global Input & Freight Costs by Segment
$124MM, or $0.23/Share Favorable vs. 4Q08
Global Input & Freight Costs by Segment
$124MM, or $0.23/Share Favorable vs. 4Q08
Consumer
Packaging
Industrial
Packaging
Printing
Papers
Input costs for continuing businesses

9
Lack of Order Downtime
1.1 Million Tons in 1Q09
Lack of Order Downtime
1.1 Million Tons in 1Q09
(Thousand Tons)
None of the businesses recorded LOO downtime in 1Q08.
1Q09 LOO downtime excludes capacity from mills or machines that have been permanently or indefinitely shut down: 
Valliant  #3 (97,000 tons), Franklin  #3  (32,000 tons) and Louisiana mill (120,000 tons)

10
Industrial Packaging Earnings
1Q09 vs. 4Q08
Industrial Packaging Earnings
1Q09 vs. 4Q08
1
Excludes trade volume
Earnings before special items
1
1
145
Vicksburg
Insurance
Settlement

11
Industrial Packaging Synergies
Achieved Three-Year Run Rate after 8 Months
Industrial Packaging Synergies
Achieved Three-Year Run Rate after 8 Months
$96 MM
$96 MM
$220 MM
$220 MM
$405 MM
$405 MM
$400 MM
$400 MM

12
Industrial Packaging Merger Benefits
Achieving Higher Savings at a Faster Rate
Industrial Packaging Merger Benefits
Achieving Higher Savings at a Faster Rate
Total  IPG
Employees
# of Box
Plants
Commercial
Improvements
per CBPR Ton
Total
Synergies
$MM
Base
23,700
120
--
--
Planned
21,900
109
+$23
$400
Current Run Rate
20,700
108
+$19
$405
New 2010 Target
20,100
<108
+$23
$500*
* Excludes $80 million of procurement savings

13
Industrial Packaging Relative Performance
Outperforming Competitors in 1Q09
Industrial Packaging Relative Performance
Outperforming Competitors in 1Q09
IP EBITDA margins based on North American Industrial Packaging operating profit before special items
Competitor EBITDA margins obtained from public filings and IP analysis

14
Printing Papers Earnings
1Q09 vs. 4Q08
Printing Papers Earnings
1Q09 vs. 4Q08
Earnings Before Special Items

15
Consumer Packaging Earnings
1Q09 vs. 4Q08
Consumer Packaging Earnings
1Q09 vs. 4Q08
Earnings Before Special Items

16
$ Million
1Q08
4Q08
1Q09
Sales
$1,985
$1,940
$1,590
Earnings
$16
$26
($7)
xpedx
xpedx
Weak paper and packaging demand
Declining prices & gross margin dollars for coated
freesheet
& coated groundwood
(>60% of total
paper sales)
Reduced headcount by 4%, or 270 positions
Solid free cash flow

17
Forest Products
Forest Products
1Q08
4Q08
1Q09
Sales ($ Million)
$25
$65
$5
Earnings ($ Million)
$25
$38
$2
Acres Sold
13,000
30,000
2,000
Price / Acre
$1,871
$2,106
$2,108
Pending sale of 143,000 acres now expected to close in
3Q09.  When that transaction closes, remaining NPV of land
portfolio will be $60 -
$80 million

18
$ Million
1Q08
4Q08
1Q09
Sales (100%)
$530
$530
$395
Earnings (IP Share)
$17
$0
($26)
Ilim’s
results are reported on a one-quarter lag
IP’s
share
of
Ilim’s
1Q08,
4Q08
&
1Q09
earnings
includes
$4
million,
$11
million
and
$15
million
of
after-tax
foreign
exchange
losses,
respectively
Ilim
Joint Venture
1Q09
Ilim
Joint Venture
1Q09
1Q09 vs. 4Q08
1Q09 vs. 1Q08
Business
Volume
(000 Metric
Tons) 
Price /
Ton
Volume
(000 Metric
Tons)
Price /
Ton
Pulp
(9%)
($139)
(12%)
($103)
Containerboard
2%
($58)
3%
($5)

19
Free Cash Flow
Free Cash Flow
($ Million)
1Q08
4Q08
1Q09
Cash from Operations
$434
$713
$649
Alternative Fuel Mixture
Tax Credits
-
-
$145
Cash Provided by
Continuing Operations
$434
$713
$794
Less Capital Investment
($215)
($270)
($128)
Free Cash Flow
$219
$443
$666

20
Debt Reduction Progress
$1.6 Billion in 9 Months
Debt Reduction Progress
$1.6 Billion in 9 Months
Billion

21
Cash & Committed Facilities
$3.5 Billion
Cash & Committed Facilities
$3.5 Billion
$ Billion
Maturity
Facility
Cost
Quarter-End Cash
-
$1.0
-
$1.0B
Accounts
Receivables Program
JAN 2010
Zero Drawn
CP
Rate
+
150
bps
$1.5B Corporate
Revolver 
MAR 2011
Zero Drawn
LIBOR + 50 to 60 bps
Total Cash & Committed Facilities
$3.5
-
Cost includes commitment fees
1
$871 million available at quarter-end based on eligible receivable balances
2
Conduit’s rate
1
2

22
Debt Maturities by Quarter
2009 -
2011
Debt Maturities by Quarter
2009 -
2011
U.S. debt as of April 30; foreign debt as of March 31
Monetization & Other: Intend to rollover or refinance timber monetization debt, Sun JV debt and other foreign subsidiary debt
$50
$680
$550

23
Pension Funding Update
No Cash Contributions Expected in 2009/10
Pension Funding Update
No Cash Contributions Expected in 2009/10
December 2008 Legislation Funding Requirements
–
94% of liability for 2009
–
96% of liability for 2010
–
100% of liability beyond 2010
–
Allows asset smoothing which defers investment loss
March 2009 Regulatory Relief
–
Provided relief in yield curve determination
–
Select
discount
rate
between
August
2008 –
December
2008
–
Estimated 10 -
20% reduction in 2009 liability
Impact of Relief
–
IP credit balance likely to satisfy any 2009/10 funding requirements
–
No required cash contributions likely until 2011

24
Alternative Fuel Mixture Tax Credits
Alternative Fuel Mixture Tax Credits
IP generates >70% of integrated mill energy needs from
renewable bio-fuels
Transforming pulping waste into bio-energy is environmentally
beneficial
IP is not burning additional fossil fuel to qualify for these
credits
Black liquor energy is sustainable & merits tax treatment similar
to other renewable energy sources

25
Alternative Fuel Mixture Tax Credits
$558 Million Pre-Tax in 4Q08 & 1Q09
Alternative Fuel Mixture Tax Credits
$558 Million Pre-Tax in 4Q08 & 1Q09
Tax Credit Claims
$ Millions
Received in 1Q09
$145
Accrued in 1Q09
$413
Total Credits 4Q08 –
1Q09
$558*
* Before $18 million of associated expenses and $210 million of taxes

26
First Quarter Summary
Solid Results Despite Recession
First Quarter Summary
Solid Results Despite Recession
Solid Results in Challenging Environment
1.1MM tons of Lack of Order Downtime
Excellent Operations
$96 Million in Integration Synergies
$30 Million in Overhead Expense Reduction
$124 Million Input Cost Relief
$666 Million Free Cash Flow
$600 Million Debt Reduction

27
Second Quarter Outlook
Second Quarter Outlook
Challenging Economic Environment
Major Variables -
Volume, Downtime, &
Pricing
Increased Maintenance Outages
Lower Ilim
Equity Earnings

28
Priorities
Priorities
Aggressively Manage Cost
Match Supply to Customers’
Needs
Strengthen Balance Sheet

29
Questions & Answers
Questions & Answers
Investor Relations Contacts
Thomas A. Cleves
901-419-7566
Emily Nix
901-419-4987
Media Contact
Kathleen Bark
901-419-4333

30
Appendix

31
Special Items Net of Taxes
1Q09
Special Items Net of Taxes
1Q09
$ Million
EPS
Earnings from Continuing Operations
& Before Special Items
$34
$0.08
Special Items Net of Taxes:
Alternative Fuel Mixture Credits
$330
Facilities Closure Costs
($33)
Overhead Reduction Initiative
($32)
Integration Costs
($22)
Tax Adjustments
($20)
Total Special Items Net of Taxes
$223
$0.53
Net Earnings
$257
$0.61

32
$ Billion
2007
1
2008
2009
Estimate
Capital Spending
$1.3
$1.0
$0.6
Depreciation &
Amortization
$1.1
$1.3
$1.5
3
Net Interest Expense
$0.3
$0.5
$0.7
Corporate
Items
2
$0.2
$0.1
$0.25
Effective
Tax
Rate
2
30%
31.5%
32% -
34%
1
Excludes discontinued operations
2
Before special items and excluding Ilim
3
Estimated depreciation impacted by extensive lack-of-order downtime
Key Financial Statistics
Key Financial Statistics

33
$ Millions
1Q09
2Q09E
3Q09E
4Q09E
North America
19
38
39
28
Europe
7
19
13
0
Brazil
5
0
3
0
Printing Papers Total
$31
$57
$55
$28
Industrial Packaging
$44
$58
$6
$43
Consumer Packaging
$4
$22
$11
$9
Total Impact
$79
$137
$72
$80
Dollar impact of planned maintenance outages are estimates and subject to change
Includes CBPR outages
Maintenance Outages Expenses
$58 Million Seasonal Increase
Maintenance Outages Expenses
$58 Million Seasonal Increase

34
Business Segment Price Realization
Business Segment Price Realization
Average Selling Price Realizations
Industrial Packaging ($/ton)  
1Q08
4Q08
1Q09
Containerboard
$545E
$584
$551
Corrugated Boxes
$785E
$836
$846
Printing Papers ($/ton)
1Q08
4Q08
1Q09
Uncoated Freesheet
$950
$1,005
$996
Pulp
$646
$577
$538
Average IP U.S. selling price realizations (includes the impact of mix across all grades)
Industrial Packaging price realizations include CBPR

35
1Q09 vs. 4Q08
1Q09 vs. 1Q08
Business
Volume
Price /
Ton
Volume
Price /
Ton
N.A. Containerboard
(23%)
($32)
(49%)E
$8E
N.A. Container
(5%)
$10
(17%)E
$61E
European Container
(3%)
(€21)
(9%)
(€26)
Industrial Packaging
Industrial Packaging
Average IP price realization (includes the impact of mix across all grades)
Includes CBPR

36
Average IP price realization (includes the impact of mix across all grades)
1Q09 vs. 4Q08
1Q09 vs. 1Q08
Business
Volume
Price / Ton
Volume
Price / Ton
N.A. Paper
(7%)
($10)
(24%)
$46
N.A. Pulp
(21%)
($39)
(9%)
($108)
European Paper
3%
(€56)
(1%)
(€72)
Brazilian Paper
(16%)
($39)
(15%)
$19
Printing Papers
Printing Papers

37
Average IP price realization (includes the impact of mix across all grades)
1Q09 vs. 4Q08
1Q09 vs. 1Q08
Volume
Price/Ton
Volume
Price/Ton
U.S. Coated Paperboard
(25%)
$38
(28%)
$107
Revenue
Price
Revenue
Price
Converting Businesses
(10%)
NA
(3%)
NA
Consumer Packaging
Consumer Packaging

38
Special Items
Special Items
Special Items Pre-Tax:
1Q08
4Q08
1Q09
Printing
Papers
Alternative Fuel Mixture Credits
$240
Facility Closure Costs
($153)
($29)
Industrial
Packaging
Alternative Fuel Mixture Credits
$208
Integration Costs
($26)
($36)
Facility Closure Costs
($8)
Consumer
Packaging
Alternative Fuel Mixture Credits
$92
Reorganization
($5)
($4)
($2)
Corporate
Restructuring & Other Charges
($36)
($53)
($52)
Impairments of Goodwill
($1,777)
Total Special Items Pre-Tax
($41)
($2,021)
$421

39
Debt Covenants
Debt Covenants
Covenant
1Q09
Maximum Debt-to-Total Capital
60%
50.3%
Minimum Consolidated Net Worth
$9B
$11.4B

40
1Q09 EBITDA
from Continuing Operations before Special Items
1Q09 EBITDA
from Continuing Operations before Special Items
Operating
Profit
$ Millions
D & A
$ Millions
Tons
(000)
EBITDA per
Ton
Industrial Packaging
North American
$175
$156
2,863
$116
European
$13
$8
270
$78
Printing Papers
North American
$84
$51
706
$191
European
$25
$22
370
$127
Brazilian
$20
$24
180
$244
U.S. Market Pulp
($28)
$6
317
($69)
Consumer Packaging
U.S. Coated Paperboard
$6
$28
290
$117
Total
$295
$295
4,996
$118

41
Operating Profits by Industry Segment
from Continuing Operations before Special Items
Operating Profits by Industry Segment
from Continuing Operations before Special Items
$ Million
1Q08
4Q08
1Q09
Industrial Packaging
$97
$145
$188
Printing Papers
$185
$113
$101
Consumer Packaging
$14
$1
$22
Distribution
$16
$26
($7)
Forest Products
$25
$38
$2
Operating Profit
$337
$323
$306
Net Interest Expense
($81)
($186)
($164)
Noncontrolling Interest /
Equity Earnings Adjustment
$4
($13)
$6
Corporate Items
($21)
($21)
($51)
Special Items
($41)
($2,021)
$421
Earnings (Loss) from continuing operations before
income taxes, equity earnings & minority interest
$198
($1,918)
$518
Equity Earnings, net of taxes -
Ilim
$17
$0
($26)

42
Geographic Business Segment Operating Results
from Continuing Operations before Special Items
Geographic Business Segment Operating Results
from Continuing Operations before Special Items
$ Million
Sales
Operating Profit
1Q08
4Q08
1Q09
1Q08
4Q08
1Q09
Industrial Packaging
North American
$1,050
$2,125
$1,885
$79
$130
$175
European
$315
$255
$240
$18
$15
$13
Asian
$80
$75
$55
$0
$0
$0
Printing Papers
North American
$885
$765
$705
$106
$73
$84
European
$435
$350
$325
$42
$36
$25
Brazilian
$225
$215
$170
$33
$44
$20
U.S. Market Pulp
$165
$170
$125
$4
($39)
($28)
Asian
$5
$5
$0
$0
($1)
$0
Consumer Packaging
North American
$600
$635
$530
$2
$16
$4
European
$75
$70
$70
$9
$5
$14
Asian
$95
$95
$115
$3
($20)
$4
Distribution
$1,985
$1,940
$1,590
$16
$26
($7)
Excludes Forest Products

43
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
Shares¹
MM
Diluted
EPS
Before Special Items
1Q09
$97
($32)
($4)
($27)
$34
32%
423
$0.08
Special Items
1Q09
$421
($198)
$0
$0
$223
47%
423
$0.53
Earnings from Continuing Operations
1Q09
$518
($230)
($4)
($27)
$257
44%
423
$0.61
2009 Earnings from Continuing Operations
2009 Earnings from Continuing Operations
2

44
Total Cash Cost Components
1Q09
Total Cash Cost Components
1Q09
North American Mills Only

45
Global Input & Freight Costs by Input
$124MM, or $0.23/Share Positive Impact vs. 4Q08
Global Input & Freight Costs by Input
$124MM, or $0.23/Share Positive Impact vs. 4Q08
Input costs for continuing businesses

46
Global Input & Freight Costs by Input
$28MM, or $0.05/Share Negative Impact vs. 1Q08
Global Input & Freight Costs by Input
$28MM, or $0.05/Share Negative Impact vs. 1Q08
Input costs for continuing businesses; does not include CBPR

47
$ / Share
$ / Share
Earnings from continuing operations before special items; volume
includes earnings from CBPR
.48
1Q09 vs. 1Q08 EPS
1Q09 vs. 1Q08 EPS
.04
.37
Forest
Products
Earnings

48
Industrial Packaging Earnings
1Q09 vs. 1Q08
Industrial Packaging Earnings
1Q09 vs. 1Q08
1
Excludes trade volume and includes CBPR earnings
Earnings Before Special Items
1
1

49
Printing Papers Earnings
1Q09 vs. 1Q08
Printing Papers Earnings
1Q09 vs. 1Q08
Earnings Before Special Items

50
Consumer Packaging Earnings
1Q09 vs. 1Q08
Consumer Packaging Earnings
1Q09 vs. 1Q08
Earnings Before Special Items

51
2005
2006
2007
NYMEX Natural Gas closing prices
Index: Jan 2005 Natural Gas Costs = 100
Natural Gas Costs
28% Decrease vs. 4Q08 Average Cost
Natural Gas Costs
28% Decrease vs. 4Q08 Average Cost
2008
2009

52
2006
2007
Index: Jan 2006 Fuel Oil Costs = 100
U.S. Fuel Oil
17% Decrease vs. 4Q08 Average Cost
U.S. Fuel Oil
17% Decrease vs. 4Q08 Average Cost
2008
Delivered cost to U.S. facilities
2009

53
U.S. Mill Wood Costs
9% Decrease vs. 4Q08 Average Cost
U.S. Mill Wood Costs
9% Decrease vs. 4Q08 Average Cost
Index: Jan 2005 Wood Costs = 100
2005
2006
2007
2009
Delivered cost to U.S. facilities
2008

54
2005
2006
2007
2009
Index: Q1’05 Chemical Composite= 100
U.S. Chemical Composite Index
7% Decrease vs. 4Q08 Average Cost
U.S. Chemical Composite Index
7% Decrease vs. 4Q08 Average Cost
2008
Delivered cost to U.S. facilities; includes Caustic Soda, Sodium Chlorate, Starch and Sulfuric Acid
2005 -
2008 excludes CBPR

55
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)
1,100,000
230,000
Fiber
Wood (Tons)
50,000,000
8,400,000
Old Corrugated Containers (Tons)
3,500,000
310,000
Chemicals
Caustic Soda (Tons)
330,000
60,000
Starch (Tons)
490,000
110,000
Sodium Chlorate (Tons)
225,000
50,000
LD Polyethylene (Tons)
50,000
-
Latex (Tons)
25,000
4,000