8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

October 28, 2009

(Date of Report)

October 28, 2009

(Date of earliest event reported)

INTERNATIONAL PAPER COMPANY

(Exact name of registrant as specified in its charter)

NEW YORK	1-3157	13-0872805
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

6400 Poplar Avenue

Memphis, Tennessee 38197

(Address and zip code of principal executive offices)

(901) 419-7000

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On October 28, 2009, International Paper Company issued a press release reporting preliminary earnings for the third quarter of 2009 and held a webcast and conference call to discuss earnings and current market conditions. A copy of the press release is being furnished as Exhibit 99.1 and a copy of the slides presented at the webcast and discussed in the conference call is being furnished as Exhibit 99.2 to this Form 8-K.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit 99.1	Press release of International Paper Company, dated October 28, 2009.
Exhibit 99.2	Slides of International Paper Company, dated October 28, 2009.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

INTERNATIONAL PAPER COMPANY
(Registrant)
By:	/s/ Maura Abeln Smith
	Name:	Maura Abeln Smith
	Title:	Senior Vice President, General Counsel and Corporate Secretary

Date: October 28, 2009

Exhibit Index

Exhibit 99.1	Press release of International Paper Company, dated October 28, 2009.
Exhibit 99.2	Slides of International Paper Company, dated October 28, 2009.

EX-99.1

INTERNATIONAL PLACE

6400 POPLAR AVENUE

MEMPHIS, TN 38197

News Release Exhibit 99.1

International Paper Reports Solid Third-Quarter Earnings

MEMPHIS, Tenn. – Oct. 28, 2009 – International Paper (NYSE: IP) today reported preliminary 2009 third-quarter net earnings attributable to common shareholders of $371 million ($0.87 per share) compared with $136 million ($0.32 per share) in the second quarter of 2009 and $149 million ($0.35 per share) in the third quarter of 2008. Amounts in all periods include special items.

Diluted Earnings Per Share Attributable to International Paper Shareholders

	Third Quarter 2009	Second Quarter 2009	Third Quarter 2008
Net Earnings	$0.87	$0.32	$0.35
Add Back – Net Special Items Expense (Income)	(0.50)	(0.12)	0.49
Earnings from Continuing Operations and Before     Special Items	$0.37	$0.20	$0.84

Earnings from continuing operations and before special items in the 2009 third quarter totaled $157 million ($0.37 per share), compared with $86 million ($0.20 per share) in the second quarter of 2009 and $356 million ($0.84 per share) in the third quarter of 2008.

Quarterly net sales were $5.9 billion in the third quarter compared with $5.8 billion in the second quarter of 2009 and $6.8 billion reported in the third quarter of 2008.

Operating profits in the 2009 third quarter were $940 million, up from $788 million in the second quarter of 2009 and $536 million in the third quarter of 2008.

At the end of the 2009 third quarter, International Paper had $4.2 billion in cash and committed liquidity facilities. The company generated $1.3 billion of free cash flow (cash provided by operations less capital expenditures) during the quarter, reflecting its continued focus on reducing costs, managing capacity and working capital, and continued reduced capital spending, as well as cash received from alternative fuel mixture credits. The company also repaid $1.3 billion of debt during the quarter.

“At the end of the third quarter, we began to see some modest improvements in demand in some segments of our paper and packaging businesses,” said Chairman and CEO John Faraci. “We expanded margins year-over-year and continued to deliver strong cash flow and pay down debt, and I’m confident we’re in position to benefit as the economy continues to slowly recover.”

Page 1

SEGMENT INFORMATION

To measure the performance of the company’s business segments from quarter to quarter without variations caused by special or unusual items, management focuses on business segment operating profits excluding those items. Third-quarter 2009 segment operating profits and business trends, excluding special items, compared with the prior quarter are as follows:

Industrial Packaging operating profits were $214 million, down from $255 million in the second quarter of 2009 as lower annual maintenance outages and modest volume improvement were offset by lower box prices.

Printing Papers had operating profits of $138 million compared with operating profits of $86 million in the second quarter of 2009. Improved volume, lower input costs and favorable operations offset unfavorable mix as export sales increased.

Consumer Packaging had operating profits of $68 million, up from $38 million in the previous quarter as lower annual maintenance outages, modest volume improvements and favorable input costs and operations offset pricing pressure.

The company’s distribution business, xpedx, reported operating profits of $21 million, up from $10 million in the previous quarter, due to improved volumes and cost reductions.

Forest Products operating profits totaled $2 million, down from $3 million in the second quarter of 2009. The pending sale of 143,000 acres is not expected to close in the fourth quarter of 2009 although interested parties are continuing their due diligence efforts.

Net corporate expenses totaled $46 million for the 2009 third quarter compared with $44 million in the 2009 second quarter and $40 million in the third quarter of 2008. The slight increase versus the 2009 second quarter was due to slightly higher pension expense, while the increase from the 2008 third quarter reflects higher pension expense, partially offset by lower supply chain initiative costs.

EFFECTIVE TAX RATE

The effective tax rate from continuing operations and before special items was 30 percent for the 2009 third quarter, lower than 33 percent in the second quarter of 2009 and 32.5 percent in the third quarter of 2008. The lower rate in the 2009 third quarter reflects adjustments of prior-year income tax estimates upon the filing of the company’s 2008 income tax return.

EFFECTS OF SPECIAL ITEMS

Special items in the third quarter of 2009 included a $525 million pre-tax credit ($320 million after taxes) for alternative fuel mixture credits earned under 2007 legislation enacted to provide a tax credit for companies that use alternative fuel mixtures to produce renewable energy to operate their businesses, a $18 million pre-tax charge ($11 million after taxes) for integration costs associated with the Industrial Packaging business integration, and a pre-tax charge of $151 million ($95 million after taxes) for restructuring and other charges. Restructuring and other charges included a pre-tax charge of $102 million ($62 million after taxes) for early debt extinguishment costs, a $39 million pre-tax charge ($24 million after taxes) for severance and benefit costs associated with the company’s 2008 overhead reduction program, and a $10 million pre-tax charge ($9 million after taxes) for facility closure costs.

Page 2

Special items in the second quarter of 2009 included a $482 million pre-tax credit ($294 million after taxes) for alternative fuel mixture credits, a $48 million before and after-tax charge to write down the assets of the Etienne mill in France to estimated fair value, an $18 million pre-tax charge ($11 million after taxes) for integration costs associated with the Industrial Packaging business integration, and a pre-tax charge of $79 million ($55 million after taxes) for restructuring and other charges. Restructuring and other charges included a $34 million charge before taxes ($21 million after taxes) for severance and benefit costs associated with the Company’s 2008 overhead reduction program, a $25 million charge before taxes ($16 million after taxes) for early debt extinguishment costs, a $15 million before and after-tax charge for severance and other costs related to the Company’s Etienne mill in France, and a $5 million charge before taxes ($3 million after taxes) for other closure costs. Additionally, the second-quarter income tax provision included a $156 million charge to establish a valuation allowance for net operating loss carryforwards in France, and a $26 million credit related to the closing of the 2004 and 2005 U.S. federal income tax audit and related state income tax effects.

Special items in the third quarter of 2008 included a $107 million pre-tax charge ($84 million after taxes) to write down the assets of the Inverurie, Scotland, mill to its estimated fair value, a $155 million pre-tax charge ($96 million after taxes) for restructuring and other charges, a $3 million pre-tax credit ($2 million after taxes) for adjustments to estimated transaction costs accrued in connection with 2006 transformation plan forestland sales, and a $29 million income tax charge relating to estimated U.S. taxes on a gain in the company’s Ilim joint venture.

EARNINGS WEBCAST

The company will hold a webcast to review earnings at 10 a.m. EDT / 9 a.m. CDT today. All interested parties are invited to listen to the webcast live via the company’s Internet site at http://www.internationalpaper.com by clicking on the Investors tab and going to the Presentations page. A replay of the webcast will also be available on the Web site beginning approximately two hours after the call. Parties who wish to participate in the webcast via teleconference may dial +1 (706) 679-8242 or, within the U.S. only, (877) 316-2541 and ask to be connected to the International Paper Third-Quarter Earnings Call. The conference ID number is 31381047. Participants should call in no later than 9:45 a.m. EDT/8:45 a.m. CDT. An audio-only replay will be available for four weeks following the call. To access the replay, dial +1 (706) 645-9291 or, within the U.S. only, (800) 642-1687, and when prompted for the conference ID, enter 31381047.

About International Paper

International Paper (NYSE: IP) is a global paper and packaging company with manufacturing operations in North America, Europe, Latin America, Russia, Asia and North Africa. Its businesses include uncoated papers and industrial and consumer packaging, complemented by xpedx, the company’s North American distribution company. Headquartered in Memphis, Tenn., the company employs approximately 58,000 people in more than 20 countries and serves customers worldwide. 2008 net sales were approximately $25 billion. For more information about International Paper, its products and stewardship efforts, visit www.internationalpaper.com.

This press release contains 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; (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 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.

###

Contacts:

Media: Kathleen Bark, 901-419-4333; Investors: Thomas A. Cleves, 901-419-7566; and Emily Nix, 901-419-4987.

Page 3

INTERNATIONAL PAPER COMPANY

Consolidated Statement of Operations

Preliminary and Unaudited

(In millions, except per share amounts)

	Three Months Ended September 30,						Three Months Ended June 30,			Nine Months Ended September 30,
	2009			2008			2009			2009			2008
Net Sales	$	5,919		$	6,808		$	5,802		$	17,389		$	18,283
Costs and Expenses
Cost of products sold		3,758	(a)		5,154	(d)		3,781	(i)		11,270	(n)		13,720	(d)
Selling and administrative expenses		527	(b)		507	(e)		508	(j)		1,535	(o)		1,438	(e)
Depreciation, amortization and cost of timber harvested		378			374			367			1,088			965
Distribution expenses		299			376			279			857			962
Taxes other than payroll and income taxes		48			48			47			145			136
Restructuring and other charges		151	(c)		97	(f)		79	(k)		313	(p)		152	(q)
Gain on sale of mineral rights		-			(261)			-			-			(261)
Forestland sales		-			(3)	(g)		-			-			(6)	(g)
Net losses on sales and impairments of businesses		-			107	(h)		48	(l)		48	(l)		106	(h)
Interest expense, net		169			144			173			506			306
Earnings From Continuing Operations Before Income Taxes and Equity Earnings		589	(a-c)		265	(d-h)		520	(i-l)		1,627	(l,n-p)		765	(d,e,g,h,q)
Income tax provision		212			118			348	(m)		790	(m)		274
Equity earnings (losses), net of taxes		-			5			(32)			(59)			51
Earnings From Continuing Operations		377	(a-c)		152	(d-h)		140	(i-m)		778	(l-p)		542	(d,e,g,h,q)
Discontinued operations, net of taxes		-			-			-			-			(18)	(r)
Net Earnings	$	377	(a-c)	$	152	(d-h)	$	140	(i-m)	$	778	(l-p)	$	524
Less: Net earnings attributable to noncontrolling interests		6			3			4			14			15
Net Earnings Attributable to International Paper Company	$	371	(a-c)	$	149	(d-h)	$	136	(i-m)	$	764	(l-p)	$	509	(d,e,g,h,q,r)
Basic Earnings Per Common Share Attributable to International Paper Common Shareholders
Earnings from continuing operations	$	0.87	(a-c)	$	0.35	(d-h)	$	0.32	(i-m)	$	1.80	(l-p)	$	1.25	(d,e,g,h,q)
Discontinued operations		-			-			-			-			(0.04)	(r)
Net earnings	$	0.87	(a-c)	$	0.35	(d-h)	$	0.32	(i-m)	$	1.80	(l-p)	$	1.21	(d,e,g,h,q,r)
Diluted Earnings Per Common Share Attributable to International Paper Common Shareholders
Earnings from continuing operations	$	0.87	(a-c)	$	0.35	(d-h)	$	0.32	(i-m)	$	1.79	(l-p)	$	1.24	(d,e,g,h,q)
Discontinued operations		-			-			-			-			(0.04)	(r)
Net earnings	$	0.87	(a-c)	$	0.35	(d-h)	$	0.32	(i-m)	$	1.79	(l-p)	$	1.20	(d,e,g,h,q,r)
Average Shares of Common Stock Outstanding - Diluted		428.7			423.4			425.4			426.6			424.2
Cash Dividends Per Common Share	$	0.025		$	0.25		$	0.025		$	0.300		$	0.75
Amounts Attributable to International Paper Common Shareholders
Earnings from continuing operations, net of tax	$	371		$	149		$	136		$	764		$	527
Discontinued operations, net of tax		-			-			-			-			(18)
Net Earnings	$	371		$	149		$	136		$	764		$	509

The accompanying notes are an integral part of this consolidated statement of operations.

(a) Includes a pre-tax gain of $525 million ($320 million after taxes) related to alternative fuel mixture credits.

(b) Includes a pre-tax charge of $18 million ($11 million after taxes) for integration costs associated with the Containerboard, Packaging and Recycling business (CBPR) acquired from Weyerhaeuser Company in August 2008.

(c) Includes a pre-tax charge of $39 million ($24 million after taxes) for severance and benefit costs associated with the Company's 2008 overhead cost reduction initiative, a pre-tax charge of $102 million ($62 million after taxes) for early debt extinguishment costs, a charge of $7 million (before and after taxes) for costs associated with the planned closure of the Etienne mill in France and a pre-tax charge of $3 million ($2 million after taxes) for other items.

(d) Includes a pre-tax charge of $39 million ($24 million after taxes) relating to the write-up of inventory to fair value in connection with the CBPR acquisition.

(e) Includes a pre-tax charge of $19 million ($12 million after taxes) for integration costs associated with the CBPR acquisition.

(f) Includes a pre-tax charge of $35 million ($22 million after taxes) for an adjustment to legal reserves, a pre-tax charge of $8 million ($5 million after taxes) for costs associated with the reorganization of the Company's Shorewood operations in Canada, a pre-tax charge of $53 million ($33 million after taxes) to write off deferred supply chain initiative development costs for U.S. container operations that will not be implemented due to the CBPR acquisition, and a pre-tax charge of $1 million ($0 million after taxes) for severance costs associated with the Company's Transformation Plan.

(g) Reflects adjustments of estimated transaction costs accrued in connection with the 2006 Transformation Plan forestland sales.

(h) Includes a pre-tax charge of $107 million ($84 million after taxes) to write down the assets at the Inverurie, Scotland mill to estimated fair value.

(i) Includes a pre-tax gain of $482 million ($294 million after taxes) related to alternative fuel mixture credits.

(j) Includes a pre-tax charge of $18 million ($11 million after taxes) for integration costs associated with the CBPR business.

(k) Includes a pre-tax charge of $34 million ($21 million after taxes) for severance and benefit costs associated with the Company's 2008 overhead cost reduction initiative, a pre-tax charge of $25 million ($16 million after taxes) for early debt extinguishment costs, a charge of $15 million (before and after taxes) for severance and other costs associated with the planned closure of the Etienne mill in France, and a pre-tax charge of $5 million ($3 million after taxes) for other items.

(l) Includes a pre-tax charge of $48 million (before and after taxes) to write down the assets at the Etienne mill to estimated fair value.

(m) Includes a $156 million tax expense for the write off of deferred tax assets in France and a $26 million tax benefit related to the closing of the 2004 and 2005 U.S. federal income tax audit, and related state income tax effects.

(n) Includes a pre-tax gain of $1.5 billion ($944 million after taxes) related to alternative fuel mixture credits.

(o) Includes a pre-tax charge of $72 million ($44 million after taxes) for integration costs associated with the CBPR business.

(p) Includes a pre-tax charge of $125 million ($77 million after taxes) for severance and benefit costs associated with the Company's 2008 overhead cost reduction initiative, a pre-tax charge of $23 million ($28 million after taxes) for closure costs associated with the Inverurie, Scotland mill, a pre-tax charge of $127 million ($78 million after taxes) for early debt extinguishment costs, a charge of $22 million (before and after taxes) for severance and other costs associated with the planned closure of the Etienne mill, and a pre-tax charge of $16 million ($10 million after taxes) for other items.

(q) Includes a $75 million pre-tax charge ($47 million after taxes) for adjustments to legal reserves, a pre-tax charge of $26 million ($17 million after taxes) for costs associated with the reorganization of the Company's Shorewood operations in Canada, a pre-tax charge of $53 million ($33 million after taxes) to write off deferred supply chain initiative development costs for U.S. container operations that will not be implemented due to the CBPR acquisition, and a gain of $2 million (before and after taxes) for adjustments to previously recorded reserves and other charges associated with the Company's Transformation Plan.

(r) Includes a pre-tax charge of $25 million ($16 million after taxes) for the settlement of a post-closing adjustment on the sale of the beverage packaging business, and the operating results of certain wood products facilities.

International Paper Company

Reconciliation of Earnings Before Special Items to Net Earnings

Attributable to International Paper Company

(In millions except for per share amounts)

	Three Months Ended September 30,				Three Months Ended June 30, 2009		Nine Months Ended September 30,
	2009		2008				2009		2008
Earnings Before Special Items	$	157	$	356	$	86	$	277	$	766
Restructuring and other charges		(95)		(84)		(55)		(215)		(119)
CBPR business integration costs		(11)		(12)		(11)		(44)		(12)
Alternative fuel mixture credits		320		-		294		944		-
Forestland sales		-		2		-		-		4
Net losses on sales and impairments of businesses		-		(84)		(48)		(48)		(83)
Income tax adjustments		-		(29)		(130)		(150)		(29)
Earnings from Continuing Operations		371		149		136		764		527
Discontinued operations		-		-		-		-		(18)
Net Earnings as Reported	$	371	$	149	$	136	$	764	$	509
Diluted Earnings per Common Share	Three Months Ended September 30,				Three Months Ended June 30, 2009		Nine Months Ended September 30,
	2009		2008				2009		2008
Earnings Per Share Before Special Items	$	0.37	$	0.84	$	0.20	$	0.65	$	1.80
Restructuring and other charges		(0.22)		(0.20)		(0.13)		(0.50)		(0.28)
CBPR business integration costs		(0.03)		(0.03)		(0.03)		(0.11)		(0.03)
Alternative fuel mixture credits		0.75		-		0.69		2.21		-
Forestland sales		-		-		-		-		0.01
Net losses on sales and impairments of businesses		-		(0.20)		(0.11)		(0.11)		(0.19)
Income tax adjustments		-		(0.06)		(0.30)		(0.35)		(0.07)
Earnings Per Common Share from Continuing Operations		0.87		0.35		0.32		1.79		1.24
Discontinued operations		-		-		-		-		(0.04)
Diluted Earnings per Common Share	$	0.87	$	0.35	$	0.32	$	1.79	$	1.20

Notes:

(1) The Company calculates Earnings Before Special Items by excluding the after-tax effect of items considered by management to be unusual from the earnings reported under U.S. generally accepted accounting principles ("GAAP"). Management uses this measure to focus on on-going operations, and believes that it is useful to investors because it enables them to perform meaningful comparisons of past and present operating results. International Paper believes that using this information, along with net earnings, provides for a more complete analysis of the results of operations by quarter. Net earnings is the most directly comparable GAAP measure.

(2) Diluted earnings per common share reflect the inclusion of contingently convertible securities in the computation.

(3) Since diluted earnings per share are computed independently for each period, nine-month per share amounts may not equal the sum of the respective quarters.

International Paper

Sales and Earnings by Industry Segment

Preliminary and Unaudited

(In Millions)

Sales by Industry Segment

		Three Months Ended September 30,						Three Months Ended June 30, 2009			Nine Months Ended September 30,
		2009			2008						2009			2008
Industrial Packaging	$	2,230		$	2,320		$	2,270		$	6,680		$	5,235
Printing Papers		1,470			1,800			1,360			4,155			5,305
Consumer Packaging		790			830			770			2,275			2,395
Distribution		1,665			2,075			1,595			4,850			6,030
Forest Products		5			55			10			20			135
Corporate and Inter-segment Sales		(241)			(272)			(203)			(591)			(817)
Net Sales	$	5,919		$	6,808		$	5,802		$	17,389		$	18,283
Operating Profit by Industry Segment
		Three Months Ended September 30,						Three Months Ended June 30, 2009			Nine Months Ended September 30,
		2009			2008						2009			2008
Industrial Packaging	$	410	(2,3,4)	$	95	(5)	$	382	(2,3,4)	$	1,152	(2,3,4)	$	279	(5)
Printing Papers		363	(2,6)		103	(7)		279	(2,6)		954	(2,6)		514	(7)
Consumer Packaging		144	(2,8)		(2)	(8)		114	(2,8)		370	(2,8)		20	(8)
Distribution		21			35			10			24			77
Forest Products		2			305			3			7			371
Operating Profit (1)		940			536			788			2,507			1,261
Interest expense, net		(169)			(144)			(173)			(506)			(306)
Noncontrolling interest/equity earnings adjustment (9)		5			(1)			8			19			11
Corporate items, net		(46)			(40)			(44)			(141)			(82)
Restructuring and other charges		(141)			(89)			(59)			(252)			(126)
Sale of forestlands		-			3			-			-			6
Net gains on sales and impairments of businesses		-			-			-			-			1
Earnings From Continuing Operations Before Income Taxes and Equity Earnings	$	589		$	265		$	520		$	1,627		$	765
Equity Earnings (Loss) in Ilim Holdings S.A., Net of Taxes (1)	$	-		$	5		$	(30)		$	(56)		$	54

(1) In addition to the operating profits shown above, International Paper recorded equity earnings, net of taxes, of $0 million for the three months ended September 30, 2009, equity losses, net of taxes, of $30 million for the three months ended June 30, 2009 and $56 million for the nine months ended September 30, 2009, and equity earnings, net of taxes, of $5 million for the three months ended September 30, 2008 and $54 million for the nine months ended September 30, 2008, related to its equity investment in Ilim Holdings S.A., a separate reportable industry segment.

(2) Includes gains of $221 million and $208 million in the Industrial Packaging segment, $226 million and $197 million in the Printing Papers segment, and $78 million and $77 million in the Consumer Packaging segment for the three months ended September 30, 2009 and June 30, 2009, respectively, and gains of $637 million in the Industrial Packaging segment, $663 million in the Printing Papers segment, and $247 million in the Consumer Packaging segment for the nine months ended September 30, 2009, relating to alternative fuel mixture credits.

(3) Includes charges of $18 million for both the three months ended September 30, 2009 and June 30, 2009, and $72 million for the nine months ended September 30, 2009, for CBPR integration costs.

(4) Includes charges of $7 million and $15 million for the three months ended September 30, 2009 and June 30, 2009, respectively, for severance and other costs related to the planned closure of the Etienne mill in France, and $48 million for the three months ended June 30, 2009 to write down the assets at the Etienne mill to estimated fair value.

(5) Includes a charge of $39 million relating to the write-up of inventory to fair value in connection with the CBPR acquisition, and a charge of $19 million for CBPR integration costs.

(6) Includes charges of $1 million and $4 million for the three months ended September 30, 2009 and June 30, 2009, and $11 million for the nine months ended September 30, 2009, for shutdown costs for the Louisiana mill and the Franklin lumber mill, sheet converting plant and converting innovations center, and a charge of $23 million for the nine months ended September 30, 2009 for the closure of the Inverurie, Scotland mill.

(7) Includes a charge of $107 million to write down the assets of the Inverurie, Scotland mill to estimated fair value.

(8) Includes charges of $2 million, $8 million, and $1 million for the three months ended September 30, 2009, September 30, 2008 and June 30, 2009, respectively, and $5 million and $26 million for the nine months ended September 30, 2009 and 2008, respectively, related to the reorganization of the Company's Shorewood operations.

(9) Operating profits for industry segments include each segment’s percentage share of the profits of subsidiaries included in that segment that are less than wholly owned. The pre-tax noncontrolling interest and equity earnings for these subsidiaries are adjusted here to present consolidated earnings before income taxes and equity earnings.

International Paper

Sales Volume by Product (1) (2)

Preliminary and Unaudited

International Paper Consolidated

	Three Months Ended September 30,		Three Months Ended June 30, 2009	Nine Months Ended September 30,
	2009	2008		2009	2008
Industrial Packaging (In thousands of short tons)
Corrugated Packaging (4)	1,856	1,641	1,899	5,531	3,419
Containerboard (4)	580	686	530	1,581	1,686
Recycling (4)	566	397	598	1,759	397
Saturated Kraft	33	45	29	83	130
Bleached Kraft	22	24	17	52	65
European Industrial Packaging	252	261	268	790	844
Asian Industrial Packaging	200	154	139	427	443
Industrial Packaging	3,509	3,208	3,480	10,223	6,984
Printing Papers (In thousands of short tons)
U.S. Uncoated Papers	753	875	702	2,148	2,653
European & Russian Uncoated Papers	304	355	332	1,006	1,101
Brazilian Uncoated Papers	282	217	234	696	638
Asian Uncoated Papers	25	6	12	40	21
Uncoated Papers	1,364	1,453	1,280	3,890	4,413
Market Pulp (3)	422	448	375	1,114	1,218
Consumer Packaging (In thousands of short tons)
U.S. Coated Paperboard	324	403	318	932	1,202
European Coated Paperboard	86	81	92	265	235
Asian Coated Paperboard	221	138	218	628	386
Other Consumer Packaging	42	48	42	130	136
Consumer Packaging	673	670	670	1,955	1,959

(1) Sales volumes include third party and inter-segment sales and exclude sales of equity investees.

(2) Sales volumes for divested businesses are included through the date of sale, except for discontinued operations.

(3) Includes internal sales to mills.

(4) Includes CBPR volumes from date of acquisition.

INTERNATIONAL PAPER COMPANY

Consolidated Balance Sheet

Preliminary and Unaudited

(In Millions)

	September 30, 2009		December 31, 2008
Assets
Current Assets
Cash and Temporary Investments	$	1,652	$	1,144
Accounts and Notes Receivable, Net		3,080		3,288
Inventories		2,278		2,495
Deferred Income Tax Assets		207		261
Other		300		172
Total Current Assets		7,517		7,360
Plants, Properties and Equipment, Net		13,699		14,202
Forestlands		749		594
Investments		1,102		1,274
Goodwill		2,288		2,027
Deferred Charges and Other Assets		1,326		1,456
Total Assets	$	26,681	$	26,913
Liabilities and Equity
Current Liabilities
Notes Payable and Current Maturities of Long-Term Debt	$	369	$	828
Accounts Payable and Accrued Liabilities		3,947		3,927
Total Current Liabilities		4,316		4,755
Long-Term Debt		9,253		11,246
Deferred Income Taxes		2,514		1,957
Pension Benefit Obligation		3,303		3,260
Postretirement and Postemployment Benefit Obligation		632		663
Other Liabilities		779		631
Equity
Invested Capital		3,583		2,739
Retained Earnings		2,062		1,430
Total Shareholders’ Equity		5,645		4,169
Noncontrolling interests		239		232
Total Equity		5,884		4,401
Total Liabilities and Equity	$	26,681	$	26,913

INTERNATIONAL PAPER COMPANY

Consolidated Statement of Cash Flows

Preliminary and Unaudited

(In Millions)

	Nine Months Ended September 30,
	2009		2008
Operating Activities
Net earnings attributable to International Paper Company	$	764	$	509
Noncontrolling interests		14		15
Discontinued operations, net of taxes and noncontrolling interests		-		18
Earnings from continuing operations		778		542
Depreciation, amortization and cost of timber harvested		1,088		965
Deferred income tax expense (benefit), net		585		(51)
Restructuring and other charges		313		152
Payments related to restructuring and legal reserves		(35)		(71)
Net losses on sales and impairments of businesses		48		106
Gains on sales of forestlands		-		(3)
Equity loss (earnings), net		59		(51)
Periodic pension expense, net		160		89
Alternative fuel mixture credits receivable		(251)		-
Other, net		140		65
Changes in current assets and liabilities
Accounts and notes receivable		466		(12)
Inventories		262		(104)
Accounts payable and accrued liabilities		(38)		255
Interest payable		21		(12)
Other		(26)		86
Cash Provided by Operations		3,570		1,956
Investment Activities
Invested in capital projects		(367)		(732)
Acquisitions, net of cash received		(17)		(6,086)
Proceeds from divestitures		-		14
Equity investment in Ilim		-		(21)
Other		(59)		(147)
Cash Used for Investment Activities		(443)		(6,972)
Financing Activities
Repurchases of common stock and payments of restricted stock tax withholding		(10)		(47)
Issuance of common stock		-		1
Issuance of debt		2,490		6,011
Reduction of debt		(4,911)		(627)
Change in book overdrafts		(5)		(45)
Dividends paid		(129)		(321)
Other		(113)		(69)
Cash (Used for) Provided by Financing Activities		(2,678)		4,903
Effect of Exchange Rate Changes on Cash		59		(21)
Change in Cash and Temporary Investments		508		(134)
Cash and Temporary Investments
Beginning of the period		1,144		905
End of the period	$	1,652	$	771

EX-99.2

Third Quarter

2009 Review

October 28, 2009

Third Quarter

2009 Review

October 28, 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; (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 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

Third Quarter 2009

Solid Results

Third Quarter 2009

Solid Results

Stabilized Volumes

Continued Margin Expansion

$1.3 Billion in Free Cash Flow*

$1.3 Billion Debt Reduction

Earnings from continuing operations before special items

•

* Cash provided by continuing operations less capital expenditures,

including alternative fuel mixture credits

5

3Q09 Financial Snapshot

3Q09 Financial Snapshot

•

Earnings from continuing operations before special items

•

*

Cash provided by continuing operations less capital expenditures, excluding alternative fuel credits of

$0.7B

in

2Q09

and

$0.5B

in

3Q09

and

cash

received

under

European

accounts

receivable

securitization

•

of

$0.2B in 3Q09

$ Billion

3Q08

2Q09

3Q09

Sales

$6.8

$5.8

$5.9

EBITDA

$1.0

$0.7

$0.8

Free Cash Flow

$0.7

$0.6*

$0.6*

Debt

$12.7

$10.9

$9.6

Cash Balance

$0.8

$1.7

$1.7

6

Overcoming Economic Challenges

EBITDA Margin Expansion in Difficult Markets

Overcoming Economic Challenges

EBITDA Margin Expansion in Difficult Markets

Operating profit before special items

Excludes Forest Products earnings

EBITDA Margins

EBITDA Margins exc. xpedx

7

Free Cash Flow

Free Cash Flow

$ Million

3Q08

2Q09

3Q09

Cash from Operations

$946

$707

$713*

Alternative Fuel Mixture

Tax Credits

-

$688

$463

Cash Provided by

Continuing Operations

$946

$1,395

$1,381

Less Capital Investment

($250)

($131)

($108)

Free Cash Flow

$696

$1,264

$1,273

* Excludes $205MM cash received under European accounts receivable securitization

8

Debt Reduction Progress

$3.1 Billion Reduction since Acquisition

Debt Reduction Progress

$3.1 Billion Reduction since Acquisition

1

Excludes

the

debt

repayment

of

$1B

from

the

proceeds

of

our

May

bond

issuance:

$1B

9.375%

notes

due

2019

2

Excludes the debt repayment of $1B from the proceeds of our August bond issuance: $1B 7.5% notes due 2021

9

1,056

676

459

97

97

97

100

192

97

903

35

60

72

50

3Q08

4Q08

1Q09

2Q09

3Q09

Maintenance

Valliant #3 LOO

Lack-of-Order

N.A. Lack of Order & Maintenance Downtime

15% of Capacity in 3Q, Down from 29% Peak in 1Q

N.A. Lack of Order & Maintenance Downtime

15% of Capacity in 3Q, Down from 29% Peak in 1Q

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

Paperboard.  See Appendix slide 33 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)

as

of

September

30,

2009

107

1,013

1,253

965

653

10

Capacity Management Summary

Adjusting

Mill

Capacity

to

Meet

our

Customers’

Needs

Capacity Management Summary

Adjusting

Mill

Capacity

to

Meet

our

Customers’

Needs

Mill

Products

Annual

Capacity

(Tons)

Number

of

Machines

% of IP

Capacity

Estimated

Closure

Franklin,

VA

Uncoated

Freesheet

600,000

1

3

19%

Spring

2010

Coated

Paperboard

140,000

1

7%

By 2009

Year-End

Albany,

OR

Containerboard

580,000

2

12%

Mid-

December

Pineville,

LA

Containerboard

390,000

1

Valliant,

OK

Containerboard

430,000

2

1

•

1

Does not include 150,000-ton capacity of #3 machine previously closed in November 2008

•

2

Capacity of #3 machine previously indefinitely idled in November 2008

11

80

58

66

(8)

WY

PKG

(4)

(24)

0

15

30

45

60

75

90

2005

Headcount*

Divestments

& Acquisitions

Headcount

Reduction

June

2008

Headcount

Reduction

September

2009

Aggressive Restructuring

& Cost Reduction

28% Headcount Reduction

Aggressive Restructuring

& Cost Reduction

28% Headcount Reduction

* At January 1, 2005

Excludes Ilim

joint venture employees

12

.20

.37

.09

.03

.03

.11

.02

.07

(.12)

(.06)

$0.00

$0.05

$0.10

$0.15

$0.20

$0.25

$0.30

$0.35

$0.40

2Q09

Volume/

LOO

Price

Input

Costs

Operations/

Costs

Mix

Maintenance

Outages

Tax

Ilim JV

3Q09

Earnings before special items.

3Q09 vs. 2Q09 EPS

Volumes Improved, Strong Cost Management, Ilim

Recovery

3Q09 vs. 2Q09 EPS

Volumes Improved, Strong Cost Management, Ilim

Recovery

13

255

214

12

42

(74)

(9)

(3)

(9)

$0

$50

$100

$150

$200

$250

$300

2Q09

Volume/

LOO

Price

Input

Costs

Maintenance

Outages

Operations/

Costs

Mix

3Q09

Industrial Packaging

Earnings

3Q09 vs. 2Q09

Industrial Packaging

Earnings

3Q09 vs. 2Q09

Includes ($7MM) cost

of fire at Savannah Mill

Earnings before special items

14

N.A. Industrial Packaging

Relative EBITDA Margins

Outperforming Competitors in 2009

N.A. Industrial Packaging

Relative EBITDA Margins

Outperforming Competitors in 2009

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

Competitor

EBITDA

margin

estimates

obtained

from

public

filings

and

IP

analysis

15

86

138

27

3

19

22

6

4

(29)

$0

$25

$50

$75

$100

$125

$150

$175

2Q09

Volume/

LOO

Price

Input

Costs

Operations/

Costs

Maintenance

Outages

Mix

Other

3Q09

Printing

Papers Earnings

3Q09 vs. 2Q09

Printing

Papers Earnings

3Q09 vs. 2Q09

Earnings Before Special Items

16

86

138

31

12

13

(4)

$0

$25

$50

$75

$100

$125

$150

2Q09

NA Paper

NA Pulp

Europe

Brazil

3Q09

Printing Papers Earnings

3Q09 vs. 2Q09

Printing Papers Earnings

3Q09 vs. 2Q09

Earnings Before Special Items

17

38

68

8

7

6

19

(8)

(2)

$0

$15

$30

$45

$60

$75

2Q09

Volume/

LOO

Price

Input

Costs

Operations/

Costs

Maintenance

Outages

Mix

3Q09

Consumer Packaging

Earnings

3Q09 vs. 2Q09

Consumer Packaging

Earnings

3Q09 vs. 2Q09

Earnings before special items

18

$ Million

3Q08

2Q09

3Q09

Sales

$2,075

$1,595

$1,665

Earnings

$35

$10

$21

xpedx

3Q09 vs. 2Q09

xpedx

3Q09 vs. 2Q09

Sales revenue up 5% vs. 2Q09

Cost savings driving the bottom line

Volume improvements in all segments

Printing, Packaging & Facility Supplies

Winning new business in National Accounts

19

$ Million

3Q08

2Q09

3Q09

Sales (100%)

$530

$290

$305

Earnings (IP Share)

$5

($30)

$0

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

IP’s shares of Ilim’s 3Q08, 2Q09 & 3Q09 earnings includes after-tax foreign exchange losses of

$3 million and $22 million, and an after-tax foreign exchange gain of $10 million, respectively

Ilim Joint Venture

Ilim Joint Venture

3Q09 vs. 2Q09

3Q09 vs. 3Q08

Business

Volume

Price /

Ton

Volume

Price /

Ton

Pulp

3%

$5

(4%)

($304)

Containerboard

7%

($26)

6%

($222)

20

IP Asia –

Building

Breadth & Scale

Surpassed $1 Billion Revenue Run Rate

IP Asia –

Building

Breadth & Scale

Surpassed $1 Billion Revenue Run Rate

Consumer Packaging -

Sun Joint Venture

•

3 machines with 900,000 tons capacity

•

#1 in coated paperboard

Shorewood & Foodservice

•

4 facilities

Industrial Packaging

•

12 corrugated plants

Printing & Communications Papers

•

UFS sales revenue up 50% over 2Q

Distribution

•

Sales volume up 50% over 2Q

Corrugator

Plant

Sheet Plant

Shorewood/ foodservice plant

IP-Sun JV

China

India

Korea

Thai

Indonesia

Beijing

Chengdu

Guangzhou

Shenyang

Chongqing

Shanghai

Tianjin

Dongguan

Yanzhou

Dalian

Wuxi

Guangzhou

Foshan

Sacheon

International Paper’s  Asian results are reported in the Industrial Packaging, Consumer Packaging and Printing Papers segments

21

IP Asia

Strong Growth

IP Asia

Strong Growth

International Paper’s  Asian results are reported in the Industrial Packaging, Consumer Packaging and Printing Papers segments.

$680

$845

$1,150

2007

2008

3Q09

Run-Rate

$15

$62

($27)

2007

2008

3Q09

Run-Rate

Sales

Change in Earnings

Contribution to IP

22

$ Million

3Q08

2Q09

3Q09

Sales

$255

$215

$275

Earnings

$58

$23

$36

EBITDA Margin

35%

24%

25%

IP Brazil results are reported in the Printing Papers segment

IP Brazil

IP Brazil

3Q09 vs. 2Q09

3Q09 vs. 3Q08

Business

Volume

(000 Metric

Tons) 

Price /

Ton

Volume

(000 Metric

Tons)

Price /

Ton

Uncoated Freesheet

21%

($37)

31%

($110)

Domestic

16%

($25)

2%

$16

Export

25%

($48)

69%

($211)

23

Third Quarter Summary

Solid Results Despite Recession

Third Quarter Summary

Solid Results Despite Recession

Stabilized Volumes

Margin Expansion

Strong Free Cash Flow

Accelerated Debt Reduction

24

Biomass Crop Assistance Program &

Cellulosic Ethanol Tax Credits

Biomass Crop Assistance Program &

Cellulosic Ethanol Tax Credits

Biomass

Crop

Assistance

Program

•

Investigating the program

•

Need final, written regulations to understand

•

Believe that the definition of biomass should be narrowly

defined to ensure level playing field for paper industry

•

Encourage implementation of Phase II to increase

biomass supply

Cellulosic

Ethanol

Tax

Credits

•

We believe that pulp & paper producers do not qualify

25

Fourth Quarter Outlook

Changes from 3Q09

Fourth Quarter Outlook

Changes from 3Q09

North America

Europe

Brazil

Russia -

Svetogorsk

Asia

Volume

Paper

Seasonally

Soft

Stable

Seasonal

Increase

Increasing

Stable

Packaging

Seasonal

Decrease

Seasonal

Increase

Stable

Pricing

Paper

Pulp Increasing,

Paper Stable

Improving

Stable

Stable

Stable

Packaging

Box Pricing

Margin

Pressure

Stable

Maintenance

Outages

$31MM

Unfavorable

$10MM

Favorable

Flat

Flat

Input & Freight

Costs

Increasing

Increasing

Flat

Increasing

Pulp Up

xpedx

Stable

Ilim

Joint

Venture

Improving

Forest

Products

Flat

26

Priorities

Priorities

Realize Restructuring & Cost Reduction

Benefits

Match our Supply to our Customers’

Needs

Optimize Industrial Packaging Business

Continue Debt Reduction

27

Appendix

Investor Relations Contacts

Thomas A. Cleves

901-419-7566

Emily Nix

901-419-4987

Media Contact

Kathleen Bark

901-419-4333

28

Special Items Net of Taxes

3Q09

Special Items Net of Taxes

3Q09

$ Million

EPS

Earnings Before Special Items

$157

$0.37

Special Items Net of Taxes:

Alternative Fuel Mixture Credits

$320

Debt Extinguishment Costs

($63)

Overhead Reduction Initiative

($24)

Integration Costs

($11)

Other Previously Announced Closures*

($8)

Total Special Items Net of Taxes

$214

$0.50

Net Earnings

$371

$0.87

*

Does not include closures announced on October 22, 2009

29

$ 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%

30-32%

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

30

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

Debt Maturities

Monetization & Other

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 Quarter-End

Debt Maturity Profile

Maturities as of Quarter-End

31

Cash & Committed Facilities

$4.2 Billion

Cash & Committed Facilities

$4.2 Billion

$ Billion

Maturity

Facility

Cost

Quarter-End Cash

-

$1.7

-

$1.0B

1

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

$942 million available at quarter-end based on eligible receivable balances

2

Conduit’s rate

32

Debt Covenants & Credit Ratings

Debt Covenants & Credit Ratings

Covenant

As of 9/30

Maximum Debt-to-Total Capital

60%

44.7%

Minimum Consolidated Net Worth

$9B

$11.9B

Rating

Outlook

Standard & Poor’s

BBB

Negative

Moody’s

Baa3

Negative

33

N.A. Lack of Order & Maintenance Downtime

15% of Capacity in 3Q, Improved from 22% in 2Q

N.A. Lack of Order & Maintenance Downtime

15% of Capacity in 3Q, Improved from 22% in 2Q

LOO

downtime

excludes

capacity

from

mills

or

machines

that

have

been

permanently

shutdown

(Franklin

#3

-

32,000

tons

and

Louisiana

mill

-

120,000

tons)

as

of

September

30,

2009

34

$ Millions

1Q09

2Q09

3Q09

4Q09E

Industrial Packaging

$44

$46

$4

$26

North America

19

33

34

25

Europe

7

19

10

0

Brazil

5

0

2

0

Printing Papers Total

$31

$52

$46

$25

Consumer Packaging

$4

$20

$1

$19

Total Impact

$79

$118

$51

$70

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

Maintenance Outages Expenses

Maintenance Outages Expenses

35

Forest Products

3Q09

vs. 2Q09

Forest Products

3Q09

vs. 2Q09

3Q08

2Q09

3Q09

Sales ($ Million)

$55*

$10

$5

Earnings ($ Million)

$305

$3

$2

Acres Sold

33,000

2,900

3,200

Price / Acre

$1,564

$2,649

$1,994

The pending sale of 143,000 acres not expected to close in 4Q09.

Interested parties are continuing their due diligence efforts and

we will have a better view on this transaction later in 4Q09.

* Mineral rights sale is not reflected in sales but in Other Income

36

3Q09 vs. 2Q09

3Q09 vs. 3Q08

Business

Volume

Price /

Ton

Volume

Price /

Ton

N.A. Container

(2%)

($33)

(15%)

*

($15)

*

European Container

(6%)

(€14)

(4%)

(€92)

Industrial Packaging

Industrial Packaging

*

Estimate based on IP legacy plus WY PKG history

37

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

3Q09 vs. 2Q09

3Q09 vs. 3Q08

Business

Volume

Price / Ton

Volume

Price / Ton

N.A. Paper

8%

($24)

*

(13%)

($79)

N.A. Pulp

15%

$2

(8%)

($131)

European Paper

(8%)

(€18)

(14%)

(€101)

Printing

Papers

Printing

Papers

* The average selling price for 20# cut-size remained flat during the third quarter

38

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

3Q09 vs. 2Q09

3Q09 vs. 3Q08

Volume

Price/Ton

Volume

Price/Ton

U.S. Coated Paperboard

2%

($23)

(19%)

$31

Revenue

Price

Revenue

Price

Converting Businesses

0%

NA

(9%)

NA

Consumer Packaging

Consumer Packaging

39

Special Items

Special Items

Special Items Pre-Tax:

3Q08

2Q09

3Q09

Industrial

Packaging

Alternative Fuel Mixture Credits

$208

$221

Integration Costs

($58)

($18)

($18)

Facility Closure Costs*

($63)

($7)

Printing

Papers

Alternative Fuel Mixture Credits

$197

$226

Facility Closure Costs*

($107)

($4)

($1)

Consumer

Packaging

Alternative Fuel Mixture Credits

$77

$78

Reorganization

($8)

($1)

($2)

Corporate

Restructuring & Other Charges

($89)

($59)

($141)

Sale of Forestlands

$3

Total Special Items Pre-Tax

($259)

$337

$356

* Does not include closures announced on October 22, 2009

40

3Q09 EBITDA

before Special Items

3Q09 EBITDA

before Special Items

Operating

Profit

$ Million

D & A

$ Million

Tons

Thousand

EBITDA

$ per Ton

EBITDA

Margin %

Industrial Packaging

North America

$201

$156

2,469

$145

19.8%

Europe

$13

$8

252

$83

8.8%

Printing Papers

North America

$92

$58

775

$194

20.7%

Western Europe

($5)

$5

68

$0

0%

Eastern

Europe

&

Russia

$43

$15

236

$246

28.7%

Brazil

$36

$32

282

$241

24.8%

U.S. Market Pulp

($18)

$10

301

($27)

(5.2%)

Consumer Packaging

U.S. Coated Paperboard

$46

$35

324

$250

22.9%

1

Excludes Recycling & Bag businesses; includes Saturating Kraft business

2

Includes Bleached Kraft business

3

Excludes Market Pulp

3

3

2

1

41

Operating

Profits by Industry Segment

Operating

Profits by Industry Segment

$ Million

3Q08

2Q09

3Q09

Industrial Packaging

$153

$255

$214

Printing Papers

$210

$86

$138

Consumer Packaging

$6

$38

$68

Distribution

$35

$10

$21

Forest Products

$305

$3

$2

Operating Profit

$709

$392

$443

Net Interest Expense

($144)

($173)

($169)

Noncontrolling Interest /

Equity Earnings Adjustment

($1)

$8

$5

Corporate Items

($40)

($44)

($46)

Special Items

($259)

$337

$356

Earnings from continuing operations before income

taxes,

equity

earnings

&

noncontrolling

interest

$265

$520

$589

Equity Earnings, net of taxes -

Ilim

$5

($30)

$0

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

3Q08

2Q09

3Q09

3Q08

2Q09

3Q09

Industrial Packaging

North American

$1,935

$1,955

$1,890

$140

$241

$201

European

$285

$240

$240

$11

$14

$14

Asian

$100

$75

$100

$2

$0

$0

Printing Papers

North American

$905

$685

$725

$131

$61

$92

European

$425

$315

$300

$29

$16

$28

Brazilian

$255

$215

$275

$58

$23

$36

U.S. Market Pulp

$210

$135

$155

($9)

($14)

($18)

Asian

$5

$10

$15

$1

$0

$0

Consumer Packaging

North American

$645

$565

$565

$7

$17

$44

European

$80

$80

$80

$1

$14

$17

Asian

$105

$125

$145

($2)

$7

$7

Distribution

$2,075

$1,595

$1,665

$35

$10

$21

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

3Q09

$233

($70)

($6)

$0

$157

30%

429

$0.37

Special Items

1Q09

$421

($198)

$0

$0

$223

47%

423

$0.53

2Q09

$337

($287)

$0

$0

$50

85%

425

$0.12

3Q09

$356

($142)

$0

$0

$214

40%

429

$0.50

Earnings

1Q09

$518

($230)

($4)

($27)

$257

44%

423

$0.61

2Q09

$520

($348)

($4)

($32)

$136

67%

425

$0.32

3Q09

$589

($212)

($6)

$0

$371

36%

429

$0.87

2009 Earnings

2009 Earnings

2

1

44

Earnings

from

continuing

operations

before

special

items;

volume

includes

earnings

from

WY

PKG

3Q09 vs. 3Q08 EPS

3Q09 vs. 3Q08 EPS

.48

45

153

214

144

7

99

(73)

(93)

(23)

$0

$50

$100

$150

$200

$250

$300

3Q08

Input

Costs

Price

Volume/

LOO

Mix

Maintenance

Outages

Operations/

Costs

3Q09

Industrial Packaging

Earnings

3Q09 vs. 3Q08

Industrial Packaging

Earnings

3Q09 vs. 3Q08

Earnings before special items

46

210

138

88

11

9

14

(141)

(32)

(21)

$0

$25

$50

$75

$100

$125

$150

$175

$200

$225

$250

$275

$300

$325

3Q08

Input

Costs

Price

Volume/

LOO

Mix

Maintenance

Outages

Operations/

Costs

Other

3Q09

Printing

Papers Earnings

3Q09 vs. 3Q08

Printing

Papers Earnings

3Q09 vs. 3Q08

Earnings before special items

47

6

68

58

18

12

9

4

(35)

(4)

$0

$15

$30

$45

$60

$75

$90

3Q08

Input

Costs

Price

Volume/

LOO

Mix

Maintenance

Outages

Operations/

Costs

Other

3Q09

Consumer Packaging

Earnings

3Q09 vs. 3Q08

Consumer Packaging

Earnings

3Q09 vs. 3Q08

Earnings before special items

48

Total Cash Cost Components

3Q09 YTD

Total Cash Cost Components

3Q09 YTD

North American Mills Only

Fiber

28%

Materials

14%

Labor

14%

Chemicals

12%

Freight

12%

Energy

11%

Overhead

9%

49

Global Input Costs by Segment

$17 Million, or $0.03/Share Favorable vs. 2Q09

Global Input Costs by Segment

$17 Million, or $0.03/Share Favorable vs. 2Q09

By Business

By Input Type

50

97

68

66

59

($5)

$10

$25

$40

$55

$70

$85

$100

Energy

Fiber

Chemicals

Freight

Global Input Costs by Input

$290MM, or $0.47/Share Favorable vs. 3Q08

Global Input Costs by Input

$290MM, or $0.47/Share Favorable vs. 3Q08

Input costs for continuing businesses; does not include WY PKG

51

0

50

100

150

200

250

Jan

Apr

Jul

Oct

Jan

Apr

Jul

Oct

Jan

Apr

Jul

Oct

Jan

Apr

Jul

Oct

Jan

Apr

Jul

2005

2006

2007

NYMEX Natural Gas closing prices

Index: Jan 2005 Natural Gas Costs = 100

Natural Gas Costs

3% Decrease vs. 2Q09 Average Cost

Natural Gas Costs

3% Decrease vs. 2Q09 Average Cost

2008

2009

52

90

95

100

105

110

115

120

125

Jan

Apr

Jul

Oct

Jan

Apr

Jul

Oct

Jan

Apr

Jul

Oct

Jan

Apr

Jul

Oct

Jan

Apr

Jul

U.S. Mill Wood Costs

Flat vs. 2Q09 Average Cost

U.S. Mill Wood Costs

Flat vs. 2Q09 Average Cost

Index: Jan 2005 Wood Costs = 100

2005

2006

2007

2009

Delivered cost to U.S. facilities

2008

53

Index: Jan 2005 OCC Costs = 100

U.S. Old Corrugated Containers Costs

36% Increase vs. 2Q09 Average Cost

U.S. Old Corrugated Containers Costs

36% Increase vs. 2Q09 Average Cost

2005-2007 represents WY PKG delivered costs; 2008-2009 represents the integrated system

54

Index: Jan 2006 Fuel Oil Costs = 100

U.S. Fuel Oil

5% Increase vs. 2Q09 Average Cost

U.S. Fuel Oil

5% Increase vs. 2Q09 Average Cost

WTI Crude prices

55

2005

2006

2007

2009

Index: 1Q05 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

21% Decrease vs. 2Q09 Average Cost

U.S. Chemical Composite Index

21% Decrease vs. 2Q09 Average Cost

56

Global Consumption

Annual Purchase Estimates for Key Inputs

Global Consumption

Annual Purchase Estimates for Key Inputs

Does

not

include

Asian

or

Ilim

consumption

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)

45,000

-

Latex (Tons)

25,000

4,000