Slides of International Paper Company

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) industry conditions, including but not limited to changes in the cost or

availability of 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

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

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 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.

First Quarter 2008 Results Summary

Volumes

–

Weakened in North America

–

Held up outside North America

Prices

–

Improved globally

Input Costs

–

Escalated globally

Improved free cash flow

Lower Forest Products earnings

Ilim’s 4Q07 earnings on track

$0.30

$0.41

$0.37

$0.15

$0.28

$0.04

1Q07

4Q07

1Q08

Forest Products EPS

Operating Business EPS

$0.45

$0.41

$0.69

Earnings from continuing operations before special items

0.37

.45

.21

.01

.07

0.04

(.24)

(.03)

.01

$0.00

$0.10

$0.20

$0.30

$0.40

$0.50

$0.60

$0.70

1Q '07

Price

Volume

Cost/Mix

Materials &

Freight

Interest

Ilim

1Q '08

$ / Share

IPG .05

CPG .02

P&C .09

Europe .05

Fiber (.06)

Chemicals (.08)

Energy (.08)

Freight (.02)

NA Papers .03

Outages .04

1Q08 vs. 1Q07 EPS

Higher Costs,

Higher Prices,

Lower Forest Products Earnings

1Q08 vs. 1Q07 EPS

Higher Costs,

Higher Prices,

Lower Forest Products Earnings

.30

.15

.04

Earnings from continuing operations before special items

Forest Products Earnings

.41

Increasing Global Input

& Freight Costs

$161MM, or $0.24/Share

Impact

vs. 1Q07

Increasing Global Input

& Freight Costs

$161MM, or $0.24/Share

Impact

vs. 1Q07

Input costs for continuing businesses

Percentage change reflects North American input costs

N.A.

24% 26% 3%

(16)

(40)

(52)

(53)

($60)

($50)

($40)

($30)

($20)

($10)

Energy

Chemicals

Fiber

Freight

North America

Outside North America

Recovering North American Input Cost Increases

Recovered via Price Increases

Recovering North American Input Cost Increases

Recovered via Price Increases

North American Papers & Packaging

($200)

($100)

$100

$200

$300

$400

$500

2003 vs. 2002

2004 vs. 2003

2005 vs. 2004

2006 vs. 2005

2007 vs. 2006

1Q08 vs. 1Q07

Price Increases / Decreases

Input Cost Increases

Global Input & Freight Costs by Segment

$161 Million Global Impact 1Q08 vs. 1Q07

Global Input & Freight Costs by Segment

$161 Million Global Impact 1Q08 vs. 1Q07

Consumer

Packaging

($27)

Industrial

Packaging

($45)

Printing

Papers

($89)

($90)

($80)

($70)

($60)

($50)

($40)

($30)

($20)

($10)

Wood

Energy

Chemicals

Freight

OCC

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

$28

€44

$69

$62

Price/ton

46%

(1%)

(5%)

(7%)

Volume

1Q08 vs. 1Q07

Price/ton

1Q08 vs. 4Q07

(7%)

(14%)

(1%)

Volume

($20)

Brazilian Uncoated Papers

(€7)

European Uncoated Papers

$26

U.S. Pulp

$24

N.A. Uncoated Papers

Business

$185

$1,715

1Q08

$243

$1,720

4Q07

$167

$1,540

1Q07

Earnings

Sales

$ Million

Printing Papers

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

€63

$47

$43

Price / Ton

(4%)

Flat

29%

Volume

1Q08 vs. 1Q07

€4

European Container

1Q08 vs. 4Q07

(2%)

10%

Volume

$21

N.A. Container

$19

N.A. Containerboard

Price / Ton

Business

$97

$1,445

1Q08

$109

$1,390

4Q07

$73

$1,235

1Q07

Earnings

Sales

$ Million

Industrial Packaging

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

*Excludes a special item of ($5) million related to the reorganization of Shorewood’s Canadian operations

Price

$31

Price/Ton

Revenue

Volume

1Q08 vs. 1Q07

Price

Revenue

Business

1Q08 vs. 4Q07

(7%)

Volume

Converting Businesses

$12

U.S. Coated Paperboard

Price/Ton

Business

$14*

$770

1Q08

$15

$780

4Q07

$40

$715

1Q07

Earnings

Sales

$ Million

Consumer Packaging

$10

$20

$30

$40

$50

$60

1Q '07

Price

Volume

Cost / Mix

Materials

& Freight

Other

1Q '08

Consumer Packaging Earnings

1Q08 vs. 1Q07

Consumer Packaging Earnings

1Q08 vs. 1Q07

(13)

14*

(27)

(2)

*Excludes a special item of ($5) million related to the reorganization of Shorewood’s Canadian operations

Cost (6)

Mix (6)

Outages (1)

Ilim Joint Venture 4Q07 Results

IP’s Share: $17MM or $0.04 EPS

Ilim Joint Venture 4Q07 Results

IP’s Share: $17MM or $0.04 EPS

Strong end-use markets in Russia & China

–

Solid economic growth

–

Growing demand for pulp, paper & packaging

–

Increasing pricing

Business performing ahead of plan

–

Shipments of 663,000 MT

–

Producing at full capacity

–

20%+ EBITDA margins

Ilim board of directors has approved $350 million

2008 capital plan

•

IP’s share of the earnings includes a ($6) million one-time fair market value adjustment to work-in-process and finished goods

inventories

•

Ilim EBITDA margin is on a 100% basis before IP adjustments and IP NA margins excludes Forest Products and xpedx

Weyerhaeuser CBPR Acquisition Update

Creating the Premier Global Supplier

Weyerhaeuser CBPR Acquisition Update

Creating the Premier Global Supplier

Compelling Valuation

Well-Maintained, Quality Assets

Consistent with Transformation Plan

Significant Synergies

Good Strategic Fit

Higher EBITDA Margins and Cash Flow

Low Integration Risk

Improves Core Business

Weyerhaeuser CBPR Acquisition Update

Improving the Quality of our Earnings

Weyerhaeuser CBPR Acquisition Update

Improving the Quality of our Earnings

2005

EBITDA -

$2.8B

2007 Pro Forma with

Weyerhaeuser Assets

EBITDA -

$3.9B

(1)

Printing

Papers

Packaging

Forest

Products

Distribution

Arizona Chemical

Coated Papers

Wood Products

Beverage Packaging

Printing

Papers

Packaging

Forest

Products

Distribution

(1)

Includes $400 million in run rate synergies

EBITDA = Operating profit plus depreciation and amortization less special items

2Q08 Outlook

Changes from 1Q08

2Q08 Outlook

Changes from 1Q08

Non-North

America

North America

Uncertain

Better

Slight Increase

Increase

Flat

Improving

Better

Operations

Volume

Pricing

Flat

Packaging

Improving

Paper

Uncertain

Input & Freight Costs

Increase

Maintenance Outages

Slight Decrease

Flat

Paper

Packaging

0.37

.41

0.07

.05

.04

(.04)

(.02)

(.14)

$0.00

$0.10

$0.20

$0.30

$0.40

$0.50

$0.60

$0.70

4Q '07

Price

Volume

Cost/Mix

Materials &

Freight

Corporate /

Other

Ilim

1Q '08

$ / Share

Papers .03

Packaging .02

Cost (.01)

Outages (.01)

Energy (.07)

Chemicals (.04)

Wood (.02)

Freight (.01)

1Q08 vs. 4Q07 EPS

Lower Forest Products Earnings & Increasing Input Costs

1Q08 vs. 4Q07 EPS

Lower Forest Products Earnings & Increasing Input Costs

.28

.04

.41

.69

Earnings from continuing operations before special items

Forest Products Earnings

109

(23)

(8)

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

$110

$120

$130

4Q '07

Price

Volume*

Cost / Mix

Materials

& Freight

Other

1Q '08

Industrial Packaging Earnings

1Q08 vs. 4Q07

Industrial Packaging Earnings

1Q08 vs. 4Q07

Cost 15

Mix 3

Outages (16)

*Excludes trade volume

$10

$15

$20

4Q '07

Price

Volume

Cost / Mix

Materials &

Freight

Other

1Q '08

Consumer Packaging Earnings

1Q08 vs. 4Q07

Consumer Packaging Earnings

1Q08 vs. 4Q07

14*

(4)

(12)

Outages 14

Cost (8)

Mix (5)

*Excludes a special item of ($5) million related to the reorganization of Shorewood’s Canadian operations

Global Sales Volumes

1Q08 vs. 4Q07

Global Sales Volumes

1Q08 vs. 4Q07

500

1,000

1,500

2,000

2,500

Printing

Papers

Pulp

Container

board

Coated

Paperboard

Container

xpedx

Revenue

4Q07

1Q08

(1%)

(7%)

(2%) (3%)

Containerboard includes the addition of Pensacola linerboard capacity

xpedx includes the addition of Central Lewmar revenues

Increasing Global

Input & Freight Costs

$90MM, or $0.14/Share Impact

vs. 4Q07

Increasing Global

Input & Freight Costs

$90MM, or $0.14/Share Impact

vs. 4Q07

Input costs for continuing businesses

Percentage change reflects North American input costs

N.A.

12% 11% 2%

(9)

(15)

(25)

(41)

($50)

($40)

($30)

($20)

($10)

Energy

Chemicals

Fiber

Freight

North America

Outside North America

.16

.30

.34

.27

.20

.17

.04

.12

.30

.47

.45

.52

.57

.69

.41

.45

.02

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

$0.82

$0.70

$1.33

$2.22

2008

Special Items & Discontinued Operations

1Q08

Special Items & Discontinued Operations

1Q08

Earnings

per Share

$ Million

Special Items (net of tax & minority interest)

($3)

Shorewood Canadian Reorganization

($25)

Legal Reserves

Restructuring & Corporate

($0.06)

($25)

Total Special Items

($1)

Wood Products

($16)

Beverage Packaging

($0.04)

($17)

Total Discontinued Operations

Earnings

per Share

$ Million

Discontinued Operations (net of tax)

30%

$206

$297

$1.1

$1.3

2007

32 -

33%

$140 -

$160

$340 -

$360

$1.1

2008

Estimate

29%

$276

$521

$1.2

$1.1

2006

Effective Tax Rate

Corporate Items

($ Million)

Net Interest Expense

($ Million)

Depreciation & Amortization

($ Billion)

Capital Spending

($ Billion)

Excludes discontinued operations and Coated Papers

Before special items and excluding Ilim

Not including Weyerhaeuser

Key Financial Statistics

($60)

($10)

($26)

($24)

Impact

($ Million)

Total Impact

Consumer Packaging

Industrial Packaging

Printing Papers

2Q08 Forecast vs.

1Q08 Actual

(85,000)

(5,000)

(55,000)

(25,000)

in Maintenance

Outages (Tons)

Maintenance

outages

and

dollar

impacts

are

estimated

and

are

subject

change

Incremental Maintenance Outages

$732

$206

$13

$38

$86

$127

$262

2007

Other

$188

$56

$10

$22

$31

$66

3Q07

$746

$276

$47

$31

$79

$122

$183

2006

$164

$37

$21

$30

$64

1Q07

$201

$56

$11

$25

$35

$71

4Q07

$63

$61

Printing Papers

$179

$57

$18

$31

2Q07

$21

Unallocated Corporate

Items

$11

Distribution

Forest Products

$148

Total

$30

Industrial Packaging

$21

Consumer Packaging

1Q08

$ Million

Corporate Items

Revised Allocations for 2006 & 2007

Corporate Items

Revised Allocations for 2006 & 2007

Operating Profits by Industry Segment

from Continuing Operations before Special Items

Operating Profits by Industry Segment

from Continuing Operations before Special Items

$198

$439

$606

Earnings from continuing operations before income

taxes, equity earnings & minority interest

$17

Equity Earnings, net of taxes -

Ilim

($21)

($56)

($37)

Corporate Items

$296

($61)

$403

$97

$20

$40

$73

$167

1Q07

($41)

($81)

$337

$25

$16

$14

$97

$185

1Q08

Special Items

Other Businesses

$566

Operating Profit

($79)

Net Interest Expense

Minority Interest / Equity Earnings Adjustment

$171

$28

$15

$109

$243

4Q07

Forest Products

Distribution

Consumer Packaging

Industrial Packaging

Printing Papers

Million

Geographic Business Segment Operating

Results

from Continuing Operations before Special Items

Geographic Business Segment Operating

Results

from Continuing Operations before Special Items

Operating Profit

Sales

$ Million

$28

$19

$90

$27

$61

$53

$101

4Q07

$20

$14

$25

$15

$57

$15

$18

$40

$94

1Q07

$95

$85

$75

Asian

$16

$18

$79

$33

$42

$106

1Q08

$1,985

$75

$600

$80

$315

$1,050

$165

$225

$435

$885

1Q08

$2,045

$75

$620

$85

$300

$1,005

$180

$255

$415

$865

4Q07

$1,675

$70

$570

$45

$265

$925

$155

$140

$355

$885

1Q07

Asian

Industrial Packaging

North American

European

Asian

Distribution

European

North American

Consumer Packaging

U.S. Market Pulp

Brazilian

European

North American

Printing Papers

Excludes Forest Products

2008 Earnings from Continuing Operations

Assuming dilution

reconciliation

GAAP

EPS

available

www.internationalpaper.com

under

the

Investors

tab

presentations

$16

Equity

Earnings

$0.35

($0.06)

$0.41

Diluted

EPS²

423

39%

($25)

$16

($41)

1Q08

Earnings from Continuing Operations

423

30%

$150

($5)

($59)

$198

1Q08

$175

Net

Income

$MM

31.5%

Estimated

Tax Rate

($5)

Minority

Interest

$MM

Special Items

$239

Pre-Tax

$MM

423

($75)

1Q08

Before Special Items

Average

Shares¹

Tax

$MM

Business Segment Price Realization

$846

$554

1Q08

$646

$950

1Q08

$825

$536

4Q07

$621

$925

4Q07

$799

$511

1Q07

$577

$888

1Q07

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)

110,000

350,000

Corn Starch (Tons)

Chemicals

Fiber

Energy

50,000

240,000

Sodium Chlorate (Tons)

40,000

LD Polyethylene (Tons)

4,000

24,000

Latex (Tons)

230,000

1,300,000

Coal (Tons)

8,200,000

43,000,000

Wood (Tons)

60,000

300,000

Caustic Soda (Tons)

310,000

600,000

Old Corrugated Containers (Tons)

Commodity

500,000

15,000,000

Non –

U. S.

3,000,000

6 Fuel Oil (Barrels)

28,000,000

Natural Gas (MM BTUs)

U. S.

Global Consumption

Annual Purchase Estimates for Key Inputs

Global Consumption

Annual Purchase Estimates for Key Inputs

Includes only continuing businesses; does not include Asian consumption