Second Quarter

2009 Review

July 30, 2009

Second Quarter

2009 Review

July 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, changes in tax laws 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

Second Quarter 2009

Outstanding Results

Second Quarter 2009

Outstanding Results

150% Earnings Increase

180 BPS EBITDA Margin Increase

$1.3 Billion in Free Cash Flow

$600 Million Debt Reduction

Exceeded $400 Million Run Rate

in WY PKG Integration Synergies

Two Years Ahead of Plan

Earnings from continuing operations before special items

$0.56

5

2Q09 Financial Snapshot

2Q09 Financial Snapshot

Earnings

from

continuing

operations

before

special

items;

1Q09

&

2Q09

includes

WY

PKG

1

Cash provided by continuing operations less capital expenditures

2

Excludes $3.0B proceeds from WY PKG bond issuance

$ Billion

2Q08

1Q09

2Q09

Sales

$5.8

$5.7

$5.8

EBITDA

$0.7

$0.6

$0.7

Free

Cash

Flow

$0.3

$0.7

$1.3

Cash Balance

$1.0

$1.0

$1.7

1

2

6

N.A. Industrial Packaging

Integration Progress

Earnings Well Ahead of Plan

N.A. Industrial Packaging

Integration Progress

Earnings Well Ahead of Plan

North American earnings before special items

7

.08

.20

.20

.12

.12

(.01)

(.01)

(.19)

(.05)

(.06)

$0.00

$0.05

$0.10

$0.15

$0.20

$0.25

$0.30

$0.35

1Q09

Volume

& LOO

Price

Input

Costs

Cost

Reduction

Mix

Outages

Interest

Ilim JV

2Q09

Earnings before special items

2Q09 vs. 1Q09 EPS

Volume Stabilized, Price Slippage, Input Cost Relief

2Q09 vs. 1Q09 EPS

Volume Stabilized, Price Slippage, Input Cost Relief

8

IP Transformation

28% Headcount Reduction

IP Transformation

28% Headcount Reduction

* At January 1, 2005

Excludes Ilim joint venture employees

8

Achieved year-end headcount goal during 2Q

9

Global

Input

&

Freight

Costs

by

Segment

$77

Million,

or

$0.12/Share

Favorable

vs.

1Q09

Global

Input

&

Freight

Costs

by

Segment

$77

Million,

or

$0.12/Share

Favorable

vs.

1Q09

By Business

By Input Type

10

N.A. Lack of Order & Maintenance Downtime

20% of Capacity in 2Q, Down from 27% in 1Q

N.A. Lack of Order & Maintenance Downtime

20% of Capacity in 2Q, Down from 27% in 1Q

Lack-of-order & maintenance downtime for North American Containerboard, Uncoated Papers, Market Pulp, & Coated    

Paperboard.  See Appendix slide 32 for detail by business.

2009

LOO

downtime

excludes

capacity

from

mills

or

machines

that

have

been

permanently

shutdown

(Franklin

#3

-

32,000

tons

and

Louisiana

mill

-

120,000

tons)

or

indefinitely

shut

down

(Valliant

#3

-

97,000

tons)

1,156

868

1,013

107

11

Industrial Packaging

Earnings

2Q09 vs. 1Q09

Industrial Packaging

Earnings

2Q09 vs. 1Q09

1

Excludes trade volume

Earnings before special items

1

12

N.A. Industrial Packaging

Performance

N.A. Industrial Packaging

Performance

Box shipments up 5.8%

vs. prior quarter

Domestic containerboard prices stabilized

Continued strong operations combined with

cost reduction

Some input cost pressure –

OCC increasing

Lean

inventories

13

N.A. Industrial Packaging

Synergies

Exceeded Year-Three Run Rate

N.A. Industrial Packaging

Synergies

Exceeded Year-Three Run Rate

$118 MM

$118 MM

$220 MM

$220 MM

$490 MM

$490 MM

$400 MM

$400 MM

14

N.A. Industrial Packaging

Relative Performance

Outperforming

Competitors in 2009

N.A. Industrial Packaging

Relative Performance

Outperforming

Competitors in 2009

IP EBITDA margins based on North American Industrial Packaging operating profit before special items

Competitor EBITDA margins obtained from public filings and IP analysis

15

Printing

Papers Earnings

2Q09 vs. 1Q09

Printing

Papers Earnings

2Q09 vs. 1Q09

Earnings Before Special Items

16

Consumer Packaging

Earnings

2Q09 vs. 1Q09

Consumer Packaging

Earnings

2Q09 vs. 1Q09

Earnings Before Special Items

17

$ Million

2Q08

1Q09

2Q09

Sales

$1,970

$1,590

$1,595

Earnings

$26

($7)

$10

xpedx

xpedx

Unit sales up, but offset by coated paper price deflation

National accounts segment continues to outperform

competition

Continued cost reductions

Position eliminations

Warehouse space reduction

Inventory reduction

18

$ Million

2Q08

1Q09

2Q09

Sales (100%)

$555

$395

$290

Earnings (IP Share)

$32

($26)

($30)

Ilim’s results are reported on a one-quarter lag

IP’s shares of Ilim’s 2Q08, 1Q09 & 2Q09 earnings includes an after-tax foreign exchange gain of $14 million,

and after-tax foreign exchange losses of $15 million and $22 million, respectively

Ilim Joint Venture

Ilim Joint Venture

2Q09 vs. 1Q09

2Q09 vs. 2Q08

Business

Volume

(000 Metric

Tons) 

Price /

Ton

Volume

(000 Metric

Tons)

Price /

Ton

Pulp

(1%)

($148)

(12%)

($292)

Containerboard

(5%)

($110)

(4%)

($128)

19

International Operations

Highlights

International Operations

Highlights

New Brazilian UFS machine production seven

months ahead of ramp-up plan

Improved

mix

on

Svetogorsk

coated

paperboard

+$200

per

ton

on

60,000

tons

Strong

performance

at

Kwidzyn

Sun JV coated paperboard shipments up 75%

over 2Q08 levels

20

Free Cash Flow

Free Cash Flow

$ Million

2Q08

1Q09

2Q09

Cash from Operations

$576

$649

$707

Alternative Fuel Mixture

Tax Credits

-

$145

$688

Cash Provided by

Continuing Operations

$576

$794

$1,395

Less Capital Investment

($267)

($128)

($131)

Free Cash Flow

$309

$666

$1,264

21

Debt Reduction Progress

Projecting $3.2 Billion Minimum Reduction

Debt Reduction Progress

Projecting $3.2 Billion Minimum Reduction

22

22

20

325

75

570

$0

$200

$400

$600

$800

$1,000

2009

2010

2011

2012

Debt Maturities

Monetization & Other

Debt maturity profile as of May 31, 2009

Monetization & Other: Intend to rollover or refinance timber monetization debt, Sun JV debt and other foreign subsidiary debt

Debt Profile

Maturities as of July Month-end

Debt Profile

Maturities as of July Month-end

23

Second Quarter Summary

Solid Results Despite Recession

Second Quarter Summary

Solid Results Despite Recession

180 BPS EBITDA Margin Expansion

$120 Million in Integration Synergies

$1.3 Billion Free Cash Flow

$600 Million Debt Reduction in 2Q plus

$600 Million Reduction in July

24

Third Quarter Outlook

Changes from 2Q09

Third Quarter Outlook

Changes from 2Q09

North America

Europe

Brazil

Russia -

Svetogorsk

Asia

Volume

Paper

Flat

Flat

Increase

Flat

Flat

Packaging

Export Increase

Decrease

Increase

Pricing

Paper

Flat

Under

Pressure

Flat

Flat

Flat

Packaging

Decrease

Under

Pressure

Increase

Maintenance Outages

$65 Million

Decrease

Slight

Decrease

Flat

Significant

Decrease

Input & Freight Costs

OCC Up

Flat

Flat

Slight

Decrease

Slight

Increase

Pulp Up

Ilim

Joint Venture

Improved Equity Earnings

25

Priorities

Priorities

Maximize Free Cash Flow

Match

our Supply

to

our Customers’

Needs

Continue Cost Reductions

Continue Debt Reduction

26

Appendix

Investor Relations Contacts

Thomas A. Cleves

901-419-7566

Emily Nix

901-419-4987

Media Contact

Kathleen Bark

901-419-4333

27

Special Items Net of Taxes

2Q09

Special Items Net of Taxes

2Q09

$ Million

EPS

Earnings Before Special Items

$86

$0.20

Special Items Net of Taxes:

Alternative Fuel Mixture Credits

$294

Tax Adjustments

($130)

Etienne Impairment & Severance Costs

($63)

Overhead Reduction Initiative

($21)

Debt Extinguishment Costs

($16)

Integration Costs

($11)

Other Previously Announced Closures

($3)

Total Special Items Net of Taxes

$50

$0.12

Net Earnings

$136

$0.32

28

$ 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

$0.2

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

29

29

Monetization & Other: Intend to rollover or refinance timber monetization debt, Sun JV debt and other foreign subsidiary debt

Preferred Annual

Debt Ceiling

Debt Maturity Profile

Maturities as of July Month-end

Debt Maturity Profile

Maturities as of July Month-end

30

Cash & Committed Facilities

$4.2 Billion

Cash & Committed Facilities

$4.2 Billion

$ Billion

Maturity

Facility

Cost

Quarter-End Cash

-

$1.7

-

$1.0B

Accounts

Receivables Program

JAN 2010

Zero Drawn

CP Rate

2

+ 150 bps

$1.5B Corporate

Revolver 

MAR 2011

Zero Drawn

LIBOR + 50 to 60 bps

Total Cash & Committed Facilities

$4.2

-

Cost includes commitment fees

1

$890 million available at quarter-end based on eligible receivable balances

2

Conduit’s rate

1

31

Debt Covenants & Credit Ratings

Debt Covenants & Credit Ratings

Covenant

2Q09

Maximum Debt-to-Total Capital

60%

48.6%

Minimum Consolidated Net Worth

$9B

$11.5B

Rating

Outlook

Standard & Poor’s

BBB

Negative

Moody’s

Baa3

Negative

32

N.A. Lack of Order & Maintenance Downtime

20% of Capacity in 2Q, Down from 27% in 1Q

N.A. Lack of Order & Maintenance Downtime

20% of Capacity in 2Q, Down from 27% in 1Q

•

LOO

downtime

excludes

capacity

from

mills

or

machines

that

have

been

permanently

shutdown

(Franklin

#3

-

32,000

tons

and

Louisiana

mill

-

120,000

tons)

or

indefinitely

shut

down

(Valliant

#3

-

97,000

tons)

3

127

82

27

1Q09

2Q09

9

34

152

132

1Q09

2Q09

Containerboard

Uncoated Papers

Market Pulp

Coated

Paperboard

806

582

161

166

59

11

130

109

33

$ Millions

1Q09

2Q09

3Q09E

4Q09E

Industrial Packaging

$44

$46

$6

$43

North America

19

33

17

44

Europe

7

19

13

0

Brazil

5

0

3

0

Printing Papers Total

$31

$52

$33

$44

Consumer Packaging

$4

$20

$11

$9

Total Impact

$79

$118

$50

$96

Dollar impact of planned maintenance outages are estimates and subject to change

Includes WY PKG outages

Maintenance Outages Expenses

Maintenance Outages Expenses

34

Forest Products

Forest Products

2Q08

1Q09

2Q09

Sales ($ Million)

$55

$5

$10

Earnings ($ Million)

$41

$2

$3

Acres Sold

30,000

2,000

2,900

Price / Acre

$1,872

$2,108

$2,649

Pending sale of 143,000 acres now expected to close in

4Q09, at the earliest.  When that transaction closes,

remaining

NPV

of

land

portfolio

will

be

$60

-

$80

million.

35

Business Segment Price Realization

Business Segment Price Realization

Average Selling Price Realizations

Industrial Packaging ($/ton)

2Q08

1Q09

2Q09

Containerboard

$551 

$551

$494

Corrugated Boxes

$794

$846

$818

Printing Papers ($/ton)

2Q08

1Q09

2Q09

Uncoated Freesheet

$988

$996

$959

Pulp

$651

$538

$511

1

Estimate based on IP legacy plus WY PKG history

Average

IP

U.S.

selling

price

realizations

(includes

the

impact

of

mix

across

all

grades)

1

1

36

2Q09 vs. 1Q09

2Q09 vs. 2Q08

Business

Volume

Price /

Ton

Volume

Price /

Ton

N.A. Containerboard

13%

($57)

(37%)

($57)

N.A. Container

7%

($28)

(16%)

$24

European Container

(1%)

(€24)

(7%)

(€55)

Industrial Packaging

Industrial Packaging

1

Estimate

based

on

IP

legacy

plus

WY

PKG

history

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

1

1

1

1

37

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

2Q09 vs. 1Q09

2Q09 vs. 2Q08

Business

Volume

Price / Ton

Volume

Price / Ton

N.A. Paper

2%

($37)

(19%)

($30)

N.A. Pulp

13%

($27)

(16%)

($140)

European Paper

(10%)

(€16)

(11%)

(€91)

Brazilian Paper

31%

($50)

11%

($59)

Printing

Papers

Printing

Papers

38

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

2Q09 vs. 1Q09

2Q09 vs. 2Q08

Volume

Price/Ton

Volume

Price/Ton

U.S. Coated Paperboard

11%

($9)

(20%)

$84

Revenue

Price

Revenue

Price

Converting Businesses

5%

NA

(5%)

NA

Consumer Packaging

Consumer Packaging

39

Special Items

Special Items

Special Items Pre-Tax:

2Q08

1Q09

2Q09

Industrial

Packaging

Alternative Fuel Mixture Credits

$208

$208

Integration Costs

($36)

($18)

Facility Closure Costs

($63)

Printing

Papers

Alternative Fuel Mixture Credits

$240

$197

Facility Closure Costs

($29)

($4)

Consumer

Packaging

Alternative Fuel Mixture Credits

$92

$77

Reorganization

($13)

($2)

($1)

Corporate

Restructuring & Other Charges

($52)

($59)

Sale of Forestlands

$3

Total Special Items Pre-Tax

($10)

$421

$337

40

2Q09 EBITDA

before Special Items

2Q09 EBITDA

before Special Items

Operating

Profit

$ Million

D & A

$ Million

Tons

Thousand

EBITDA

$ per Ton

EBITDA

Margin %

Industrial Packaging

North

American

$241

$164

3,056

$133

20.7%

European

$14

$9

268

$86

9.6%

Printing Papers

North

American

$61

$53

719

$159

16.5%

European & Russian

$16

$19

332

$105

11.3%

Brazilian

$23

$29

234

$222

23.9%

U.S. Market Pulp

($14)

$9

263

($15)

(3.5%)

Consumer Packaging

U.S. Coated Paperboard

$11

$30

318

$129

11.7%

1

Includes Recycling & Saturating Kraft businesses

2

Includes Bleached Kraft business

1

2

41

Operating

Profits by Industry Segment

Operating

Profits by Industry Segment

$ Million

2Q08

1Q09

2Q09

Industrial Packaging

$87

$188

$255

Printing Papers

$226

$101

$86

Consumer Packaging

$26

$22

$38

Distribution

$26

($7)

$10

Forest Products

$41

$2

$3

Operating Profit

$406

$306

$392

Net Interest Expense

($81)

($164)

($173)

Noncontrolling

Interest

/

Equity Earnings Adjustment

$8

$6

$8

Corporate Items

($21)

($51)

($44)

Special Items

($10)

$421

$337

Earnings

from

continuing

operations

before

income

taxes, equity earnings & minority interest

$302

$518

$520

Equity

Earnings,

net

of

taxes

-

Ilim

$32

($26)

($30)

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

2Q08

1Q09

2Q09

2Q08

1Q09

2Q09

Industrial Packaging

North American

$1,060

$1,885

$1,955

$65

$175

$241

European

$315

$240

$240

$20

$13

$14

Asian

$95

$55

$75

$2

$0

$0

Printing Papers

North American

$880

$705

$685

$125

$84

$61

European

$445

$325

$315

$39

$25

$16

Brazilian

$255

$170

$215

$51

$20

$23

U.S. Market Pulp

$205

$125

$135

$11

($28)

($14)

Asian

$5

$0

$10

$0

$0

$0

Consumer Packaging

North American

$625

$530

$565

$13

$4

$17

European

$75

$70

$80

$8

$14

$14

Asian

$95

$115

$125

$5

$4

$7

Distribution

$1,970

$1,590

$1,595

$26

($7)

$10

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

Shares

MM

Diluted

EPS

Before Special Items

1Q09

$97

($32)

($4)

($27)

$34

33%

423

$0.08

2Q09

$183

($61)

($4)

($32)

$86

33%

425

$0.20

Special Items

1Q09

$421

($198)

$0

$0

$223

47%

423

$0.53

2Q09

$337

($287)

$0

$0

$50

85%

425

$0.12

Earnings

1Q09

$518

($230)

($4)

($27)

$257

44%

423

$0.61

2Q09

$520

($348)

($4)

($32)

$136

67%

425

$0.32

2009 Earnings

2009 Earnings

1

2

44

Total Cash Cost Components

2Q09

Total Cash Cost Components

2Q09

North American Mills Only

45

Global Input & Freight Costs by Input

$129MM, or $0.21/Share Favorable Impact vs. 2Q08

Global Input & Freight Costs by Input

$129MM, or $0.21/Share Favorable Impact vs. 2Q08

Input costs for continuing businesses; does not include WY PKG

46

.20

.50

.18

.21

(.15)

(.06)

(.15)

(.04)

(.05)

(.24)

.06

$0.00

$0.20

$0.40

$0.60

$0.80

2Q08

Volume

& LOO

Price

Input

Costs

Cost

Reduction

Mix

Interest

Corporate

& Other

Ilim JV

2Q09

.56

Earnings

from

continuing

operations

before

special

items;

volume

includes

earnings

from

WY

PKG

.48

2Q09 vs. 2Q08 EPS

2Q09 vs. 2Q08 EPS

Forest

Products

Earnings

47

Industrial Packaging

Earnings

2Q09 vs. 2Q08

Industrial Packaging

Earnings

2Q09 vs. 2Q08

1

Excludes trade volume and includes WY PKG earnings

Earnings Before Special Items

1

1

48

Printing

Papers Earnings

2Q09 vs. 2Q08

Printing

Papers Earnings

2Q09 vs. 2Q08

Earnings Before Special Items

49

Consumer Packaging

Earnings

2Q09 vs. 2Q08

Consumer Packaging

Earnings

2Q09 vs. 2Q08

Earnings Before Special Items

50

2005

2006

2007

NYMEX Natural Gas closing prices

Index: Jan 2005 Natural Gas Costs = 100

Natural Gas Costs

28% Decrease vs. 1Q09 Average Cost

Natural Gas Costs

28% Decrease vs. 1Q09 Average Cost

2008

2009

51

U.S. Mill Wood Costs

6% Decrease vs. 1Q09 Average Cost

U.S. Mill Wood Costs

6% Decrease vs. 1Q09 Average Cost

Index: Jan 2005 Wood Costs = 100

2005

2006

2007

2009

Delivered cost to U.S. facilities

2008

52

2006

2007

Index: Jan 2006 Fuel Oil Costs = 100

U.S. Fuel Oil

32% Increase vs. 1Q09 Average Cost

U.S. Fuel Oil

32% Increase vs. 1Q09 Average Cost

2008

Delivered cost to U.S. facilities

2009

53

2005

2006

2007

2009

Index: Q1’05 Chemical Composite= 100

2008

Delivered cost to U.S. facilities; includes Caustic Soda, Sodium

Chlorate, Starch and Sulfuric Acid

2005 -

2008 excludes WY PKG

U.S. Chemical Composite Index

20% Decrease vs. 1Q09 Average Cost

U.S. Chemical Composite Index

20% Decrease vs. 1Q09 Average Cost

54

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