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

Basic earnings per common share is computed by dividing earnings by the weighted average number of common shares outstanding. Diluted earnings per common share is computed assuming that all potentially dilutive securities, including "in-the-money" stock options, were converted into common shares at the beginning of each period. A reconciliation of the amounts included in the computation of earnings (loss) per common share, and diluted earnings (loss) per common share is as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
In millions, except per share amounts	2011		2010		2011		2010
Earnings (loss) from continuing operations	$	224	$	93	$	517	$	(69	)
Effect of dilutive securities (a)		0		0		0		0

Earnings (loss) from continuing operations – assuming dilution	$	224	$	93	$	517	$	(69	)

Average common shares outstanding		428.6		429.6		429.4		429.2
Effect of dilutive securities (a)
Restricted stock performance share plan		1.9		3.8		4.0		0
Stock options (b)		0		0		0		0

Average common shares outstanding – assuming dilution		430.5		433.4		433.4		429.2

Basic earnings (loss) from continuing operations per common share	$	0.52	$	0.22	$	1.20	$	(0.16	)

Diluted earnings (loss) from continuing operations per common share	$	0.52	$	0.21	$	1.19	$	(0.16	)

(a)	Securities are not included in the table in periods when antidilutive.

(b)

Options to purchase 17.0 million shares and 19.9 million shares for the three months ended June 30, 2011 and 2010, respectively, and options to purchase 17.0 million shares and 19.9 million shares for the six months ended June 30, 2011 and 2010, respectively, were not included in the computation of diluted common shares outstanding because their exercise price exceeded the average market price of the Company's common stock for each respective reporting period.