Slides of International Paper Company, dated February 7, 2008

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

implied

these

statements.

Factors

which

could

cause

actual

results

differ

relate

to:

(i)

industry

conditions,

including

but

not

limited

changes

the

cost

availability

raw

materials and energy, transportation costs, the company's product mix, demand and

pricing for its products; (ii) global economic conditions and political changes, particularly in

Latin America, Russia, Europe and Asia, including but not limited to changes in currency

exchange rates, credit availability, and the company's credit ratings issued by recognized

credit rating organizations; (iii) natural disasters, such as hurricanes and earthquakes; (iv)

the company's ability to realize anticipated profit improvement from its transformation plan,

and (v) unanticipated expenditures related to the cost of compliance with environmental

and other governmental regulations and to actual or potential litigation. We undertake no

obligation to publicly update any forward-looking statements, whether as a result of new

information,

future

events

otherwise.

These

and

other

factors

that

could

cause

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.

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.

Statements Relating to Non-GAAP

Financial Measures

Statements Relating to Non-GAAP

Financial Measures

2003

2004

2005

2006

2007

Diluted EPS

from Continuing Operations before Special Items

Diluted EPS

from Continuing Operations before Special Items

reconciliation

GAAP

EPS

available

www.internationalpaper.com

under

the

Investors

tab

presentations

$0.41

$0.82

$0.70

$1.33

$2.22

.15

.11

.03

.02

.16

.30

.34

.27

.20

.04

.12

.30

.45

.47

.45

.52

.57

.69

.11

.17

.69

.57

.13

.02

.04

.11

(.02)

(.03)

(.04)

(.07)

(.02)

$0.25

$0.35

$0.45

$0.55

$0.65

$0.75

$0.85

3Q '07

Price

Volume

Cost/Mix

Pensacola

Land Sales

Input &

Distrib.Costs

Unallocated

Expenses

Labor

Agreements

Tax

4Q '07

$ / Share

Packaging .02

Papers

.02

Containerboard .06

P&C .03

Europe .02

Cost/Mix

Outages

Wood (.02)

Energy (.02)

Chemicals (.02)

Freight (.01)

4Q ’07 ETR 31%

3Q ’07 ETR 29%

4Q07 vs. 3Q07 EPS

from Continuing Operations before Special Items

4Q07 vs. 3Q07 EPS

from Continuing Operations before Special Items

(.04)

.02

2.22

1.33

.05

.69

.37

.02

.66

(.02)

(.35)

(.15)

(.30)

(.08)

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

12M '06

Price

Volume

Cost/Mix

Pensacola

Input &

Distrib.Costs

Land Sales

Cash

Redeployment

DivestituresUnallocated

Expenses /

Other

Tax

12M '07

$ / Share

IPG .12

Coated Paperboard .07

P&C .32

Europe .15

Wood (.14)

Chemicals (.09)

Energy (.02)

Freight (.05)

Interest .33

Shares .22

Reinvest. .14

Cost/Mix .44

Outages (.07)

2007 ETR 30%

2006 ETR 29%

2007 vs. 2006 EPS

from Continuing Operations before Special Items

2007 vs. 2006 EPS

from Continuing Operations before Special Items

(10)

(77)

(85)

(33)

($90)

($80)

($70)

($60)

($50)

($40)

($30)

($20)

($10)

Wood

Chemicals

Freight

Energy

$205 million, or $0.30/share, negative

purchase price variance in 2007 vs. 2006

Increasing Input & Distribution Costs

Global EBIT Impact 2007 vs. 2006

Increasing Input & Distribution Costs

Global EBIT Impact 2007 vs. 2006

Costs for continuing businesses

U.S Mills Wood Cost

Significant Increases in the West Region

U.S Mills Wood Cost

Significant Increases in the West Region

(7)

(63)

(65)

($70)

($60)

($50)

($40)

($30)

($20)

($10)

$10

East

Central

West

Total

West

Region

Mills:

Mansfield

Pineville

(containerboard),

Texarkana

(coated

paperboard),

Louisiana (uncoated freesheet)

100%

25%

29%

46%

% of Total

Volume

Purchase price variance for delivered wood costs

U.S. Total Purchased Energy Consumption

Reduced 27% per/ton since 2001

U.S. Total Purchased Energy Consumption

Reduced 27% per/ton since 2001

Mills only

“Other”

includes purchased electricity and steam, coal, purchased wood waste, and other materials

The annual savings from the reduction in

consumption and change in fuel mix is $285 million

2001

2002

2003

2004

2005

2006

2007

Gas & Oil

Other

Improved Overall Equipment Efficiency

Reducing Manufacturing Costs

Improved Overall Equipment Efficiency

Reducing Manufacturing Costs

75%

79%

80%

81%

82%

83%

84%

75%

76%

77%

78%

79%

80%

81%

82%

83%

84%

85%

2001

2002

2003

2004

2005

2006

2007

The cumulative savings from OEE

improvements is $270 million

All IP mills

($200)

$200

$400

$600

$800

$1,000

$1,200

2003 vs.

2002

2004 vs.

2003

2005 vs.

2004

2006 vs.

2005

2007 vs.

2006

2002 - 2007

Price Increases / Decreases

Input Cost Increases

Recovering Input Cost Increases

Recovered via Price Increases

Recovering Input Cost Increases

Recovered via Price Increases

North American Papers & Packaging

Quarterly Operating Profit Growth

from Continuing Operations before Special Items

Quarterly Operating Profit Growth

from Continuing Operations before Special Items

$10

European Industrial Packaging

$75

Forest Products

$20

European Paper

Brazilian Paper

Pulp

4Q07 vs. 3Q07

($31)

North American Paper

($1)

($9)

$18

$ Million

Distribution

Consumer Packaging

North American Industrial Packaging

Printing Papers

* Excludes a $128 million special charge

Average IP price realization (includes the impact of mix across all grades)

Brazilian Uncoated Papers

€7

European Uncoated Papers

$16

11%

U.S. Pulp

$13

(2%)

N.A. Uncoated Papers

Price Realization

per Ton

Volume

Business

4Q07 vs. 3Q07

$314

$1,720

4Q07

$307

$1,660

3Q07

$319*

$1,475

4Q06

Earnings

Sales

$ Million

Industrial Packaging

Average IP price realization (includes the impact of mix across all grades)

* Total 3Q07 and 4Q07 domestic containerboard price realization was $35/ton; DEC exit rate reflected full realization of the $40

increase

$33

(1%)

N.A. Container

$14*

(1%)

N.A. Containerboard

Price Realization

per Ton

Volume

Business

4Q07 vs. 3Q07

$144

$1,390

4Q07

$115

$1,305

3Q07

$130

$1,265

4Q06

Earnings

Sales

$ Million

xpedx

Margin Improvement

xpedx

Margin Improvement

Operating Expenses

% of Gross Profit

80%

81%

82%

83%

84%

85%

86%

87%

88%

89%

90%

2002

2003

2004

2005

2006

2007

Revenue Per

Warehouse Square Foot

$0.50

$0.55

$0.60

$0.65

$0.70

$0.75

2002

2003

2004

2005

2006

2007

•

400 BP improvement since 2002

•

Each 100 BP improvement increases profits

by $13 million

•

34% increase in productivity since 2002

•

12% decrease in total warehouse space

Replacing Land Sales Earnings

Confident in our Ability

Replacing Land Sales Earnings

Confident in our Ability

$1,734

$639

‘02 –

‘06

Average

$2,423

Total International

Paper Operating Profit

$185-$275

2008

Budget

$471

Forest Products

Operating Profit

2007

($ Million)

Excludes special items and discontinued operations

Ilim Joint Venture

Proceeding According to Plan

Ilim Joint Venture

Proceeding According to Plan

Reporting IP’s 50% share of Ilim Holding SA earnings

with a 90-day lag using the equity method of accounting

Continuing healthy economic conditions in Russia &

China

Strong demand growth

Operations performed well

Focus on cost reduction, quality improvement, and

capacity expansion

Geographic Operating Profit Growth

from Continuing Operations before Special Items

Geographic Operating Profit Growth

from Continuing Operations before Special Items

380%

$19

Asia

20%

$223

Total North America

2007 vs. 2006

11%

$55

Printing Papers

$273

$130

$124

$18

$56

$14

$80

$ Million

102%

Brazil

62%

Europe

80%

Total Outside North America

14%

117%

11%

24%

Distribution

U.S. Market Pulp

Consumer Packaging

Industrial Packaging

Excludes Forest Products and other businesses

2007

$1.9B

30%

70%

2006

$1.5B

20%

80%

Operating Profit Growth Outside North America

Diversifying our Earnings Capacity

Operating Profit Growth Outside North America

Diversifying our Earnings Capacity

Operating profits excluding special items, Forest Products and other businesses

North America

Non-North America

Transformation Plan Scorecard

On Track Through Year Two

Transformation Plan Scorecard

On Track Through Year Two

Improve Existing Businesses

Return Value to Shareholders

EPS

Improve Pricing

Improve Balance Sheet

Divestitures

Input Cost / Transportation

Selective Reinvestment

1.33

2.22

.86

.33

.22

(.15)

(.35)

(.02)

$0.75

$0.95

$1.15

$1.35

$1.55

$1.75

$1.95

$2.15

$2.35

12M '06

Core

Business

EBIT

Land Sales

Divestitures*

Interest

Tax

12M '07

Transformation Plan

Yielding Results

Transformation Plan

Yielding Results

EPS from continuing operations before special items

* Includes Harvest and Recreation income, Coated Papers and Arizona Chemical

Outlook

Current IP Business Conditions

Outlook

Current IP Business Conditions

North America

Steady demand

Inventories in good shape

Realizing announced paper & packaging price increases

Increasing input costs

Europe

Some inventory building

Increasing input costs

Brazil

Economy is strong

Paper demand growing at GDP rate

Increasing energy costs

Looking Forward to 1Q08

Accretive

Ilim Group 4Q07 Earnings

IP Pricing

Volume

Slight Increase

Packaging

Steady

Paper

1Q08 Earnings Outlook

Increase

Input & Distribution Costs

Decrease

Land Sales Earnings

Slight Increase

Planned Maintenance Outages

Slight Increase

Steady

Paper

Packaging

Special Items & Discontinued Operations

($3)

Weldwood

2007

4Q07

($0.02)

$0.11

$/Share

($47)

($16)

($39)

$252

($58)

$38

$113

$159

($MM)

($0.11)

$0.59

$/Share

($2)

Wood Products

Kraft Papers

$41

Tax Adjustments

($6)

Restructuring & Corporate

($11)

Total Discontinued Operations

Other

($6)

Beverage Packaging

Discontinued

Operations (Net of tax)

$44

Total Special Items

Divestitures

Brazil Asset Exchange

Special Items (Net of minority interest & tax)

($MM)

30%

$732

$297

$1.1

$1.3

2007

32 -

33%

$650 -

$675

$340 -

$360

$1.1

2008 Estimate

29%

$746

$521

$1.2

$1.1

2006

Effective Tax Rate

Unallocated Expenses

($ Million)

Net Interest Expense

($ Million)

Depreciation &

Amortization ($ Billion)

Capital Spending

($ Billion)

20%

$607

$595

$1.2

$1.1

2005

Excludes discontinued operations and Coated Papers

Before special items and excluding Ilim

Key Financial Statistics

Includes indefinitely closed uncoated papers capacity at Pensacola, FL, Bastrop, LA and Jay, ME in 2Q05

(72,000 tons), 3Q05 (108,000 tons) and 4Q05 (108,000 tons) which

we permanently closed at end of 4Q05.

Lack of Order Downtime

236

173

M Short Tons

2003

2004

2005

274*

270*

180*

2006

2007

Containerboard

Uncoated Papers

Pulp

Coated Paperboard

European Papers

236

173

274*

270*

180*

($11)

($16)

($4)

Impact

($ Million)

Total Impact

Consumer Packaging

Industrial Packaging

Printing Papers

1Q08 Forecast vs. 4Q07

(20,000)

13,000

(26,000)

(7,000)

Maintenance

Outages (Tons)

Maintenance

outages

and

dollar

impacts

are

estimated

and

are

subject

change

Incremental Maintenance Outages

Operating Profits by Industry Segment

from Continuing Operations before Special Items

Operating Profits by Industry Segment

from Continuing Operations before Special Items

$924

($746)

($527)

$2,189

$61

$678

$128

$172

$386

$764*

2006

$304

($166)

($86)

$553

$12

$162

$31

$27

$130

$191

4Q06

$435

($201)

($79)

$711

$174

$39

$40

$144

$314

4Q07

($732)

($188)

Net Unallocated Expenses

Other Businesses

$2,423

$610

Operating Profit

($297)

($77)

Net Interest Expense

$19

Minority Interest

$1,413

$471

$146

$198

$501

$1,101

2007

$349

$99

$40

$49

$115

$307

3Q07

Earnings from continuing

operations before income taxes,

minority interest & special items

Forest Products

Distribution

Consumer Packaging

Industrial Packaging

Printing Papers

($ Million)

Industry segment information has been reclassified to conform with minor changes in 2006 organizational structure

*Includes $75 million for the Coated and Supercalendered papers business sold in 2006.

Geographic Business Segment Operating

Results

from Continuing Operations before Special Items

Geographic Business Segment Operating

Results

from Continuing Operations before Special Items

$6,785

$50

$230

$2,405

$180

$1,020

$3,725

$10

$510

$495

$1,250

$4,430*

2006

$330

$85

$50

Asian

$7,320

$280

$2,405

$265

$1,100

$3,880

$20

$655

$850

$1,510

$3,495

2007

$2,045

$75

$620

$85

$300

$1,005

$180

$255

$415

$865

4Q07

$1,880

$70

$620

$65

$265

$975

$165

$250

$370

$870

3Q07

$1,715

$70

$615

$45

$275

$945

$125

$130

$345

$870

4Q06

Sales

Asian

$ Million

Industrial Packaging

North American

European

Asian

Distribution

European

North American

Consumer Packaging

U.S. Market Pulp

Brazilian

European

North American

Printing Papers

*Includes

$920

million

for

the

Coated

and

Supercalendered

papers

business

sold

2006.

Geographic Business Segment Operating

Results

From Continuing Operations before Special Items

Geographic Business Segment Operating

Results

From Continuing Operations before Special Items

$128

$41

$129

$56

$327

$48

$122

$112

$482*

2006

$18

Asian

$146

$37

$143

$88

$407

$104

$246

$214

$537

2007

$39

$25

$117

$34

$81

$65

$134

4Q07

$40

$39

$15

$99

$25

$72

$45

$165

3Q07

$31

$10

$15

$114

$16

$18

$42

$115

4Q06

Operating Profit

$ Million

Industrial Packaging

North American

European

Asian

Distribution

European

North American

Consumer Packaging

U.S. Market Pulp

Brazilian

European

North American

Printing Papers

*Includes $75 million for the Coated and Supercalendered papers business sold in 2006

2007 Earnings from Continuing Operations

Assuming dilution

reconciliation

GAAP

EPS

available

www.internationalpaper.com

Not meaningful

$0.59

433

-4%

$252

$243

Full Year Total

$2.22

433

30%

$963

($24)

($424)

$1,411

Full Year Total

$0.80

424

21%

$338

($7)

($94)

$439

4Q07

$0.52

426

28%

$220

($6)

($89)

$315

3Q07

($0.05)

426

32%

($23)

$11

($34)

3Q07

$0.11

424

$44

$40

4Q07

$0.57

426

29%

$243

($6)

($100)

$349

3Q07

$2.81

$0.46

$1.02

($0.06)

$0.57

$0.69

$0.52

$0.45

Diluted

EPS

448

15%

$254

($44)

$298

1Q07

431

($23)

($25)

2Q07

Earnings from Continuing Operations

433

25%

$1,215

($24)

($415)

$1,654

Full Year Total

431

30%

$200

($5)

($89)

$294

2Q07

448

24%

$457

($6)

($143)

$606

1Q07

$294

$223

$203

Net Income

$MM

31%

29%

32%

Estimated

Tax Rate

($7)

($5)

($6)

Minority

Interest

$MM

Special Items

$435

$319

$308

Pre-Tax

$MM

424

($134)

4Q07

431

($91)

2Q07

448

($99)

1Q07

Before Special Items

Average

Tax

$MM

under

the

Investors

tab

presentations

2006 Earnings from Continuing Operations

Assuming dilution

reconciliation

GAAP

EPS

available

www.internationalpaper.com

under

the

Investors

tab

presentations

$1.32

489

71%

$647

($1,617)

$2,264

Full Year Total

$1.33

489

29%

$635

($17)

($272)

$924

Full Year Total

$4.53

451

45%

$2,047

($3)

($1,668)

$3,718

4Q06

$0.80

485

34%

$385

($5)

($204)

$594

3Q06

$0.35

485

41%

$169

($117)

$286

3Q06

$4.06

451

46%

$1,831

($1,583)

$3,414

4Q06

$0.45

485

28%

$216

($5)

($87)

$308

3Q06

$2.65

$0.13

($2.49)

($0.17)

($2.61)

$0.47

$0.30

$0.12

Diluted

EPS

486

($1,270)

$38

($1,308)

1Q06

487

35%

($83)

$45

($128)

2Q06

Earnings from Continuing Operations

489

59%

$1,282

($17)

($1,889)

$3,188

Full Year Total

487

33%

$62

($4)

($33)

$99

2Q06

486

($1,212)

($5)

$16

($1,223)

1Q06

$216

$145

$58

Net Income

$MM

28%

34%

26%

Estimated

Tax Rate

($3)

($4)

($5)

Minority

Interest

$MM

Special Items

$304

$227

$85

Pre-Tax

$MM

451

($85)

4Q06

487

($78)

2Q06

486

($22)

1Q06

Before Special Items

Average

Tax

$MM

Business Segment Price Realization

$763

$483

2006

$533

$862

2006

Full Year

$802

$521

2007

$598

$907

2007

$825

$536

4Q07

$621

$925

4Q07

$792

$521

3Q07

$605

$912

3Q07

$787

$509

4Q06

$566

$898

4Q06

Quarterly

Average Selling Price Realizations

Industrial Packaging ($/ton)

Printing Papers ($/ton)

Containerboard

Corrugated Boxes

Pulp

Uncoated Freesheet

Average IP U.S. selling price realizations (includes the impact of mix across all grades)

Annual Pension Expense*

377

210

115

$50

$100

$150

$200

$250

$300

$350

$400

$450

2006

2007

2008E

Key Variables

6.2%

5.75%

5.5%

Discount

Rate

8.5%

Rate of

Return

2008E

2007

2006

Pension Expense

* U.S. plans only. Pension expense reflects service cost, interest cost, amortization of actuarial losses and

expected return on plan assets

(5)

(11)

(18)

(7)

($20)

($15)

($10)

($5)

Wood

Energy

Freight

Chemicals

$41 million, or $0.07

per share, negative

purchase price variance in 4Q07 versus 3Q07

Increasing Input & Distribution Costs

Global EBIT Impact 4Q07 vs. 3Q07

Increasing Input & Distribution Costs

Global EBIT Impact 4Q07 vs. 3Q07

Costs for continuing businesses

Chemicals

Fiber

Energy

50,000

215,000

Sodium Chlorate (Ton)

40,000

LD Polyethylene (Ton)

4,000

24,000

Latex (Ton)

230,000

1,300,000

Coal (Ton)

8,200,000

40,000,000

Wood (Ton)

60,000

340,000

Caustic Soda (Ton)

310,000

600,000

Old Corrugated Containers (Ton)

Commodity

500,000

15,000,000

Non –

U. S.

4,000,000

#6 Fuel Oil (Barrel)

28,000,000

Natural Gas (MM BTU)

U. S.

Global Consumption

Annual Purchase Estimates for Key Inputs

Global Consumption

Annual Purchase Estimates for Key Inputs

2007 Run Rate Estimates

Includes only continuing businesses