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

July 28, 2010 (Date of Report)

July 28, 2010 (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 July 28, 2010, International Paper Company issued a press release reporting preliminary earnings for the second quarter of 2010 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 July 28, 2010.
Exhibit 99.2	Slides of International Paper Company, dated July 28, 2010.

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: July 28, 2010

Exhibit Index

Exhibit 99.1	Press release of International Paper Company, dated July 28, 2010.
Exhibit 99.2	Slides of International Paper Company, dated July 28, 2010.

EX-99.1

INTERNATIONAL PLACE

6400 POPLAR AVENUE

MEMPHIS, TN 38197

Exhibit 99.1

News Release

International Paper Reports Significantly Improved Second-Quarter Earnings

Solid Revenue Growth, Significant Margin Expansion, Strong Free Cash Flow

MEMPHIS, Tenn. – July 28, 2010 – International Paper (NYSE: IP) today reported preliminary second-quarter 2010 net earnings attributable to common shareholders totaling $93 million ($0.21 per share) compared with a net loss of $162 million ($0.38 per share) in the first quarter of 2010 and net earnings of $136 million ($0.32 per share) in the second quarter of 2009. Amounts in all periods include special items.

Diluted Earnings Per Share Attributable to International Paper Shareholders

	Second Quarter 2010		First Quarter 2010			Second Quarter 2009
Net Earnings (Loss)	$	0.21	($	0.38	)	$	0.32
Add Back – Net Special Items Expense (Income)		0.21		0.42			(0.12	)
Earnings Before Special Items	$	0.42	$	0.04		$	0.20

Earnings before special items in the 2010 second quarter totaled $181 million ($0.42 per share), compared with $16 million ($0.04 per share) in the first quarter of 2010 and $86 million ($0.20 per share) in the second quarter of 2009.

Quarterly net sales were $6.1 billion compared with $5.8 billion in the first quarter of 2010 and $5.8 billion reported in the second quarter of 2009.

Operating profits in the second quarter were $353 million, up from $20 million in the first quarter of 2010. Both amounts reflect the inclusion of special items.

“Each of our businesses posted strong results in the second quarter, leading to the significant increase in earnings per share and solid free cash flow,” said John Faraci, chairman and chief executive officer. “Operating rates are strong, inventories are low, and input costs are moderating. All of these factors position us well for a stronger third quarter.”

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SEGMENT INFORMATION

To measure the performance of the company’s business segments from quarter to quarter without variations caused by special items, management focuses on business segment operating profits excluding those items. Second quarter 2010 business segment operating profits and business trends compared with the prior quarter are as follows:

Industrial Packaging operating profits (excluding special items) increased to $193 million as compared with $46 million in the first quarter of 2010. Earnings improved mainly from increases in linerboard and North America box demand, fewer mill outages and further realization of announced price increases. Operating profits after special items were $192 million in the second quarter of 2010 compared with $41 million in the first quarter of 2010.

Printing Papers had an operating profit (excluding special items) of $158 million as compared with $126 million in the first quarter of 2010. Results were positively impacted by favorable pulp and paper pricing, and improved operations more than offsetting higher mill outage costs. Operating profits after special items were $47 million in the second quarter of 2010 compared with a loss of $78 million in the first quarter of 2010.

Consumer Packaging had an operating profit (excluding special items) of $49 million compared with $31 million in the first quarter of 2010. Results were positively impacted by higher volumes, further realization of announced coated paperboard price increases and stronger operations, partially offset by planned maintenance outages and relatively higher input costs. Operating profits after special items were $48 million in the second quarter of 2010 compared with $28 million in the first quarter of 2010.

The company’s distribution business, xpedx, reported operating profits of $26 million, up from $21 million in the first quarter of 2010. The earnings improvement was primarily driven by stronger volumes, lower costs and improved margins. There were no special items recorded in either quarter.

Forest Products operating profits totaled $40 million, up from $8 million in the prior quarter due to a mineral rights sale. There were no special items recorded in either quarter.

Net corporate expenses totaled $54 million for the 2010 second quarter, essentially in line with the $51 million recorded in the 2010 first quarter.

EFFECTIVE TAX RATE

The effective tax rate before special items for the second quarter of 2010 was 31 percent, compared with 32 percent in the first quarter of 2010. The tax rate in the second quarter of 2010 is representative of the forecasted annual effective tax rate.

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EFFECTS OF SPECIAL ITEMS

Special items in the second quarter of 2010 included a pre-tax charge of $144 million ($88 million after taxes) for restructuring and other charges. Restructuring and other charges included a $111 million pre-tax charge ($68 million after taxes) associated with the closure of the Franklin mill (including $46 million of accelerated depreciation charges and $36 million related to environmental reserves), an $18 million pre-tax charge ($11 million after taxes) for early debt extinguishment costs, a pre-tax charge of $11 million ($7 million after taxes) for an Ohio Commercial Activity tax adjustment and pre-tax charges of $4 million ($2 million after taxes) for other items.

Special items in the first quarter of 2010 included a pre-tax charge of $215 million ($132 million after taxes) for restructuring and other charges and a $46 million after-tax expense to reduce deferred tax assets related to incentive compensation ($14 million) and post-retirement prescription drug coverage (Medicare Part D reimbursements) ($32 million). Restructuring and other charges included a $204 million pre-tax charge ($124 million after taxes) associated with the closure of the Franklin mill (including $190 million of accelerated depreciation), a $4 million pre-tax charge ($2 million after taxes) for early debt extinguishment costs, a $3 million pre-tax charge ($2 million after taxes) associated with the reorganization of the Company’s Shorewood operations, and charges of $4 million (before and after taxes) for other items.

Special items in the second quarter of 2009 included a credit of $482 million before taxes ($294 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 energy to operate their businesses, a $48 million before and after-tax charge to write down the assets of the Etienne mill in France to estimated fair value, 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 $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 carry forwards 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.

EARNINGS WEBCAST

The company will host a webcast to discuss earnings and current market conditions at 9 a.m. EDT (8 a.m. CDT) today. All interested parties are invited to listen to the webcast via the company’s Internet site at http://www.internationalpaper.com by clicking on the Investors tab and going to the Webcasts and Presentations page. A replay of the webcast will also be 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 Second Quarter Earnings Call. The conference ID number is 82825401. Participants should call in no later than 8:45 a.m. EDT (7:45 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 “82825401.”

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 about 60,000 people in more than 20 countries and serves customers worldwide. 2009 net sales were more than $23 billion. For more information about International Paper, its products and stewardship efforts, visit internationalpaper.com.

Page 3

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: Patricia L. Neuhoff, 901-419-4052

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

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International Paper Company

Consolidated Statement of Operations

Preliminary and Unaudited

(In millions, except per share amounts)

	Three Months Ended June 30,							Three Months Ended March 31,				Six Months Ended June 30,
	2010			2009				2010				2010				2009
Net Sales	$	6,121		$	5,802			$	5,807			$	11,928			$	11,470
Costs and Expenses
Cost of products sold		4,490			3,781		(b)		4,464				8,954				7,512		(j)
Selling and administrative expenses		472			508		(c)		421				893				1,008		(k)
Depreciation, amortization and cost of timber harvested		363			367				371				734				710
Distribution expenses		330			279				317				647				558
Taxes other than payroll and income taxes		47			47				45				92				97
Restructuring and other charges		144	(a)		79		(d)		215		(g)		359		(i)		162		(l)
Net losses on sales and impairments of businesses		—			48		(e)		—				—				48		(e)
Interest expense, net		157			173				149				306				337
Earnings (Loss) From Continuing Operations Before Income Taxes and Equity Earnings		118	(a)		520		(b-e)		(175	)	(g)		(57	)	(i)		1,038		(e,j-l)
Income tax provision (benefit)		25			348		(f)		(24	)	(h)		1		(h)		578		(f)
Equity earnings (losses), net of taxes		7			(32	)			(2	)			5				(59	)
Net Earnings (Loss)	$	100	(a)	$	140		(b-f)	$	(153	)	(g,h)	$	(53	)	(h,i)	$	401		(e,f,j-l)
Less: Net earnings attributable to noncontrolling interests		7			4				9				16				8
Net Earnings (Loss) Attributable to International Paper Company	$	93	(a)	$	136			$	(162	)	(g,h)	$	(69	)	(h,i)	$	393		(e,f,j-l)
Basic Earnings (Loss) Per Common Share Attributable to International Paper Common Shareholders	$	0.22	(a)	$	0.32		(b-f)	$	(0.38	)	(g,h)	$	(0.16	)	(h,i)	$	0.93		(e,f,j-l)
Diluted Earnings (Loss) Per Common Share Attributable to International Paper Common Shareholders	$	0.21	(a)	$	0.32		(b-f)	$	(0.38	)	(g,h)	$	(0.16	)	(h,i)	$	0.93		(e,f,j-l)
Average Shares of Common Stock Outstanding - Diluted		433.4			425.4				428.8				429.2				424.2
Cash Dividends Per Common Share	$	0.125		$	0.025			$	0.025			$	0.150			$	0.275

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

(a) Includes a pre-tax charge of $111 million ($68 million after taxes) for shutdown costs for the Franklin mill (including $46 million of accelerated depreciation and $36 million of environmental closure costs), a pre-tax charge of $18 million ($11 million after taxes) for early debt extinguishment costs, a pre-tax charge of $11 million ($7 million after taxes) for an Ohio Commercial Activity tax adjustment and charges of $4 million ($2 million after taxes) for other items.

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

(c) 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.

(d) 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.

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

(f) 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.

(g) Includes a pre-tax charge of $204 million ($124 million after taxes) for shutdown costs for the Franklin mill (including $190 million of accelerated depreciation), a pre-tax charge of $4 million ($2 million after taxes) for early debt extinguishment costs, a pre-tax charge of $3 million ($2 million after taxes) for costs associated with the reorganization of the Company’s Shorewood operations and charges of $4 million (before and after taxes) for other items.

(h) Includes a $14 million tax expense and a $32 million tax expense for incentive compensation and Medicare Part D deferred tax write-offs, respectively.

(i) Includes a pre-tax charge of $315 million ($192 million after taxes) for shutdown costs for the Franklin mill (including $236 million of accelerated depreciation and $36 million of environmental closure costs), a pre-tax charge of $22 million ($13 million after taxes) for early debt extinguishment costs, a pre-tax charge of $11 million ($7 million after taxes) for an Ohio Commercial Activity tax adjustment, a pre-tax charge of $4 million ($2 million after taxes) for costs associated with the reorganization of the Company’s Shorewood operations and charges of $7 million ($6 million after taxes) for other items.

(j) Includes a pre-tax gain of $1 billion ($624 million after taxes) related to alternative fuel mixture credits.

(k) Includes a pre-tax charge of $54 million ($33 million after taxes) for integration costs associated with the CBPR business.

(l) Includes a pre-tax charge of $86 million ($53 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 $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 Etienne mill, and a pre-tax charge of $13 million ($8 million after taxes) for other items.

Page 5

International Paper Company

Reconciliation of Earnings Before Special Items to Net Earnings

Attributable to International Paper Company

Preliminary and Unaudited

(In millions except for per share amounts)

	Three Months Ended June 30,						Three Months Ended March 31,			Six Months Ended June 30,
	2010			2009			2010			2010			2009
Earnings Before Special Items	$	181		$	86		$	16		$	197		$	120
Restructuring and other charges		(88	)		(55	)		(132	)		(220	)		(120	)
CBPR business integration costs		—			(11	)		—			—			(33	)
Alternative fuel mixture credits		—			294			—			—			624
Net losses on sales and impairments of businesses		—			(48	)		—			—			(48	)
Income tax adjustments		—			(130	)		(46	)		(46	)		(150	)
Net Earnings (Loss) as Reported	$	93		$	136		$	(162	)	$	(69	)	$	393
	Three Months Ended June 30,						Three Months Ended March 31,			Six Months Ended June 30,
Diluted Earnings per Common Share	2010			2009			2010			2010			2009
Earnings Per Share Before Special Items	$	0.42		$	0.20		$	0.04		$	0.46		$	0.28
Restructuring and other charges		(0.21	)		(0.13	)		(0.31	)		(0.51	)		(0.28	)
CBPR business integration costs		—			(0.03	)		—			—			(0.08	)
Alternative fuel mixture credits		—			0.69			—			—			1.47
Net losses on sales and impairments of businesses		—			(0.11	)		—			—			(0.11	)
Income tax adjustments		—			(0.30	)		(0.11	)		(0.11	)		(0.35	)
Diluted Earnings (Loss) per Common Share as Reported	$	0.21		$	0.32		$	(0.38	)	$	(0.16	)	$	0.93

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

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International Paper

Sales and Earnings by Industry Segment

Preliminary and Unaudited

(In Millions)

Sales by Industry Segment

	Three Months Ended						Three Months Ended			Six Months Ended
	June 30,						March 31,			June 30,
	2010			2009			2010			2010			2009
Industrial Packaging	$	2,440		$	2,270		$	2,220		$	4,660		$	4,450
Printing Papers		1,445			1,360			1,405			2,850			2,685
Consumer Packaging		845			770			805			1,650			1,485
Distribution		1,630			1,595			1,580			3,210			3,185
Forest Products		5			10			10			15			15
Corporate and Inter-segment Sales		(244	)		(203	)		(213	)		(457	)		(350	)
Net Sales	$	6,121		$	5,802		$	5,807		$	11,928		$	11,470

Operating Profit by Industry Segment

	Three Months Ended June 30,						Three Months Ended March 31,			Six Months Ended June 30,
	2010			2009			2010			2010			2009
Industrial Packaging	$	192	(2)	$	382	(4,5,6)	$	41	(2)	$	233	(2)	$	742	(4,5,6)
Printing Papers		47	(3)		279	(4,7)		(78	)(3)		(31	)(3)		591	(4,7)
Consumer Packaging		48	(8)		114	(4,8)		28	(8)		76	(8)		226	(4,8)
Distribution		26			10			21			47			3
Forest Products		40			3			8			48			5
Operating Profit (1)		353			788			20			373			1,567
Interest expense, net		(157	)		(173	)		(149	)		(306	)		(337	)
Noncontrolling interest/equity earnings adjustment (9)		7			8			8			15			14
Corporate items, net		(54	)		(44	)		(51	)		(105	)		(95	)
Restructuring and other charges		(31	)		(59	)		(3	)		(34	)		(111	)
Earnings (Loss) From Continuing Operations
Before Income Taxes and Equity Earnings	$	118		$	520		$	(175	)	$	(57	)	$	1,038
Equity Earnings (Loss) in Ilim Holdings S.A.,
Net of Taxes (1)	$	5		$	(30	)	$	(3	)	$	2		$	(56	)

(1) In addition to the operating profits shown above, International Paper recorded equity earnings, net of taxes, of $5 million and $2 million for the three months and six months ended June 30, 2010, respectively; and equity losses, net of taxes, of $30 million and $3 million for the three months ended June 30, 2009 and March 31, 2010, respectively; and $56 million for the six months ended June 30, 2009, related to the equity investment in Ilim Holdings S.A., a separate reportable industry segment.

(2) Includes charges of $1 million and $2 million for additional closure costs for the Etienne mill in France for the three months ended June 30, 2010 and March 31, 2010, respectively; and $3 million of additional closure costs for U.S. mills for the three months ended March 31, 2010.

(3) Includes charges of $111 million and $204 million for the three months ended June 30, 2010 and March 31, 2010, respectively, for shutdown costs for the Franklin mill.

(4) Includes gains of $208 million and $416 million in the Industrial Packaging segment, $197 million and $437 million in the Printing Papers segment, and $77 million and $169 million in the Consumer Packaging segment relating to alternative fuel mixture credits for the three months ended June 30, 2009 and the six months ended June 30, 2009, respectively.

(5) Includes charges of $48 million to write down the assets at the Etienne mill in France to estimated fair value and $15 million for severance and other costs related to the Etienne mill.

(6) Includes charges of $18 million and $54 million for the three and six months ended June 30, 2009 respectively, for CBPR integration costs.

(7) Includes charges of $4 million and $10 million for the three and six months ended June 30, 2009 respectively, for shutdown costs for the Louisiana mill and Franklin lumber mill, sheet converting plant and converting innovations center and a charge of $23 million for the six months ended June 30, 2009 for the closure of the Inverurie, Scotland mill.

(8) Includes charges of $1 million, $1 million and $3 million for the three months ended June 30, 2010, June 30, 2009 and March 31, 2010, respectively; and $4 million and $3 million for the six months ended June 30, 2010 and June 30, 2009, 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.

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International Paper Company

Reconciliation of Segment Operating Profit to Segment Operating Profit Before Special Items

(In millions)

	Three Months Ended June 30, 2010
	Industrial Packaging	Printing Papers		Consumer Packaging	Distribution	Forest Products	Total
Segment Operating Profit as Reported	192	47		48	26	40	353
Restructuring and other charges	1	111		1	—	—	113
Segment Operating Profit Before Special Items	193	158		49	26	40	466
	Three Months Ended March 31, 2010
	Industrial Packaging	Printing Papers		Consumer Packaging	Distribution	Forest Products	Total
Segment Operating Profit as Reported	41	(78	)	28	21	8	20
Restructuring and other charges	5	204		3	—	—	212
Segment Operating Profit Before Special Items	46	126		31	21	8	232

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International Paper Company

Sales Volume by Product (1)

Preliminary and Unaudited

International Paper Consolidated

	Three Months Ended June 30,		Three Months Ended March 31,	Six Months Ended June 30,
	2010	2009	2010	2010	2009
Industrial Packaging (In thousands of short tons)
Corrugated Packaging	1,956	1,899	1,809	3,765	3,675
Containerboard	602	530	631	1,233	1,001
Recycling	644	598	580	1,224	1,193
Saturated Kraft	50	29	41	91	50
Bleached Kraft	21	17	22	43	30
European Industrial Packaging	259	268	258	517	538
Asian Industrial Packaging	126	139	140	266	227
Industrial Packaging	3,658	3,480	3,481	7,139	6,714
Printing Papers (In thousands of short tons)
U.S. Uncoated Papers	667	702	700	1,367	1,395
European & Russian Uncoated Papers	310	332	308	618	702
Brazilian Uncoated Papers	282	234	248	530	414
Asian Uncoated Papers	19	12	32	51	15
Uncoated Papers	1,278	1,280	1,288	2,566	2,526
Market Pulp (2)	317	375	351	668	692
Consumer Packaging (In thousands of short tons)
U.S. Coated Paperboard	354	318	339	693	608
European Coated Paperboard	86	92	90	176	179
Asian Coated Paperboard	217	218	221	438	407
Other Consumer Packaging	44	42	40	84	88
Consumer Packaging	701	670	690	1,391	1,282

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

(2) Includes internal sales to mills.

Page 9

International Paper Company

Consolidated Balance Sheet

Preliminary and Unaudited

(In Millions)

	June 30, 2010		December 31, 2009
Assets
Current Assets
Cash and Temporary Investments	$	1,871	$	1,892
Accounts and Notes Receivable, Net		3,033		2,695
Inventories		2,212		2,179
Deferred Income Tax Assets		328		368
Other		285		417
Total Current Assets		7,729		7,551
Plants, Properties and Equipment, Net		12,008		12,688
Forestlands		729		757
Investments		1,101		1,077
Goodwill		2,283		2,290
Deferred Charges and Other Assets		1,197		1,185
Total Assets	$	25,047	$	25,548
Liabilities and Equity
Current Liabilities
Notes Payable and Current Maturities of Long-Term Debt	$	357	$	304
Accounts Payable and Accrued Liabilities		3,809		3,708
Total Current Liabilities		4,166		4,012
Long-Term Debt		8,574		8,729
Deferred Income Taxes		2,355		2,425
Pension Benefit Obligation		2,772		2,765
Postretirement and Postemployment Benefit Obligation		516		538
Other Liabilities		723		824
Equity
Invested Capital		3,881		4,074
Retained Earnings		1,812		1,949
Total Shareholders’ Equity		5,693		6,023
Non-controlling interests		248		232
Total Equity		5,941		6,255
Total Liabilities and Equity	$	25,047	$	25,548

Page 10

International Paper Company

Consolidated Statement of Cash Flows

Preliminary and Unaudited

(In Millions)

	Six Months Ended June 30,
	2010			2009
Operating Activities
Net earnings (loss)	$	(53	)	$	401
Depreciation, amortization and cost of timber harvested		734			710
Deferred income tax expense (benefit), net		62			539
Restructuring and other charges		359			162
Payments related to restructuring and legal reserves		(2	)		(24	)
Net losses on sales and impairments of businesses		—			48
Equity (earnings) loss, net		(5	)		59
Periodic pension expense, net		116			107
Alternative fuel mixture credits receivable		—			(189	)
Other, net		(75	)		107
Changes in current assets and liabilities
Accounts and notes receivable		(324	)		195
Inventories		(111	)		310
Accounts payable and accrued liabilities		43			(165	)
Interest payable		(8	)		(32	)
Other		64			(39	)
Cash Provided by Operations		800			2,189
Investment Activities
Invested in capital projects		(273	)		(259	)
Acquisitions, net of cash received		(155	)		(8	)
Other		(32	)		(59	)
Cash Used for Investment Activities		(460	)		(326	)
Financing Activities
Repurchases of common stock and payments of restricted stock tax withholding		(26	)		(10	)
Issuance of common stock		—			—
Issuance of debt		166			1,476
Reduction of debt		(309	)		(2,617	)
Change in book overdrafts		(35	)		(72	)
Dividends paid		(66	)		(118	)
Other		(22	)		(35	)
Cash Used for Financing Activities		(292	)		(1,376	)
Effect of Exchange Rate Changes on Cash		(69	)		23
Change in Cash and Temporary Investments		(21	)		510
Cash and Temporary Investments
Beginning of the period		1,892			1,144
End of the period	$	1,871		$	1,654

Page 11

EX-99.2

Second Quarter

2010 Review

July 28, 2010

Second Quarter

2010 Review

July 28, 2010

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 our

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 and changes in 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 2010

Headlines

Second Quarter 2010

Headlines

Revenue Growth

Margin Expansion

Strong Free Cash Flow Generation

All businesses posted strong results

5

Second Quarter 2010

Significant Earnings Improvement

Second Quarter 2010

Significant Earnings Improvement

Balanced Global Results

Record Earnings

European Paper

European Packaging

Asia

Strong Operations

Continued Cost Reduction

Declining (but Elevated) Fiber Costs

Highest Maintenance Outages of Year

Earnings from continuing operations before

special items

Earnings per Share

$0.20

$0.04

$0.42

2Q09

1Q10

2Q10

6

2Q10 Financial Snapshot

2Q10 Financial Snapshot

2Q09

1Q10

2Q10

Sales ($B)

$5.8

$5.8

$6.1

EBITDA

1

($MM)

$723

$560

$782

Free Cash Flow

2

($MM)

$576

$39

$356

Debt ($B)

$10.9

$9.0

$8.9

Cash Balance ($B)

$1.7

$1.7

$1.9

1

Earnings from continuing operations before special items

2

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

$688 MM in 2Q09 and $132 MM in 2Q10

7

Earnings before special items

2Q10 vs. 1Q10 EPS

Price Realization, Improved Volumes

2Q10 vs. 1Q10 EPS

Price Realization, Improved Volumes

.04

.42

(.03)

(.02)

(.05)

.05

.29

.04

.02

.05

.01

.02

$0.00

$0.10

$0.20

$0.30

$0.40

$0.50

1Q10

Volume

Price

Operations

& Costs

Maintenance

Outages

Input

Costs

Mix

Forest

Products

Bad Debt

Tax

Ilim

JV

2Q10

8

Earnings from continuing operations before special items

1H10 vs. 1H09 EPS

Improved Volumes & Operations, Higher Fiber Costs

1H10 vs. 1H09 EPS

Improved Volumes & Operations, Higher Fiber Costs

.28

.46

(.10)

(.05)

(.45)

(.04)

(.05)

(.04)

.37

.26

.07

.05

.14

.02

$0.00

$0.10

$0.20

$0.30

$0.40

$0.50

$0.60

$0.70

$0.80

$0.90

1H09

Volume

/ LOO

Price

Operations

& Costs

Maintenance

Outages

Input

Costs

Mix

Forest

Products

Bad Debt

Corporate

& Other

Interest

Ilim

JV

Tax

1H10

9

Total IP EBITDA & Margin

Improving EBITDA Annualized Run Rate

Total IP EBITDA & Margin

Improving EBITDA Annualized Run Rate

$ Billion

1Q10 Run Rate (9.5% EBITDA)

2Q10 Run Rate

(13% EBITDA)

2009 Actual

(12% EBITDA)

10

Global Input Costs vs. 1Q10

$12 MM, or $0.02/Share Unfavorable

Global Input Costs vs. 1Q10

$12 MM, or $0.02/Share Unfavorable

By Business

By Input Type

$5

($6)

($11)

Industrial

Packaging

Printing

Papers

Consumer

Packaging

Wood

Energy

Chemicals

Freight

($13)

($9)

($4)

$14

Fiber

Freight

Chemicals

Energy

Outside North America

North America

OCC

11

Index

U.S. Mill Wood Delivered Cost Trends

3% Decrease vs. 1Q10 Average Cost

U.S. Mill Wood Delivered Cost Trends

3% Decrease vs. 1Q10 Average Cost

Wood Costs Declining, But Still Elevated

Declining Wood

Demand

Poor Harvesting Conditions

& Higher Wood Demand

Normal

Harvesting

Conditions

12

U.S. OCC Delivered Cost Trends

3% Decrease vs. 1Q10 Average Cost

U.S. OCC Delivered Cost Trends

3% Decrease vs. 1Q10 Average Cost

Index

2005-2007 represents WY PKG delivered costs; 2008-2010 represents delivered costs to the integrated system

OCC Costs Declining, But Still Elevated

13

IP Europe, Middle East & Africa

1H10: 11% of IP Sales & 18% of IP EBITDA

IP Europe, Middle East & Africa

1H10: 11% of IP Sales & 18% of IP EBITDA

EBITDA margins increased

from 12% to 19%

Record Paper Earnings

Record Container Earnings

Cost-of-Capital Returns in

Paper & Packaging

Inverurie

& Etienne mill

shutdowns completed

$158

$245

1H09

1H10

Coated Paperboard

Container

Papers

14

46

193

(2)

(6)

21

99

5

30

$0

$25

$50

$75

$100

$125

$150

$175

$200

$225

1Q10

Volume

Price

& Mix

Input

Costs

Operations

& Costs

Maintenance

Outages

Other

2Q10

Industrial Packaging Earnings

2Q10 vs. 1Q10

Industrial Packaging Earnings

2Q10 vs. 1Q10

Earnings before special items

Operations

LIFO, Other Costs  (33)

31

15

N.A. Industrial Packaging Relative EBITDA Margins

N.A. Industrial Packaging Relative EBITDA Margins

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

16

$0.5

$0.8

$1.3

$1.0

$1.5

2007

2008

2009

1H10

Run Rate

June 2010

Run Rate

Progress on Industrial Packaging Integration

Approaching Cost-of-Capital Returns

Progress on Industrial Packaging Integration

Approaching Cost-of-Capital Returns

June Run Rate of $1.5 Billion EBITDA and 8% ROI

Earnings before special items

17

Printing Papers Earnings

2Q10 vs.

1Q10

Printing Papers Earnings

2Q10 vs.

1Q10

Earnings before special items

126

158

(2)

(6)

(32)

(33)

72

23

10

$0

$50

$100

$150

$200

$250

1Q10

Volume

Price

& Mix

Input

Costs

Operations

& Costs

Maintenance

Outages

Bad Debt

Other

2Q10

18

Consumer Packaging Earnings

2Q10 vs.

1Q10

Consumer Packaging Earnings

2Q10 vs.

1Q10

Earnings before special items

31

49

(10)

(14)

10

19

11

2

$0

$15

$30

$45

$60

$75

1Q10

Volume

Price

& Mix

Input

Costs

Operations

& Costs

Maintenance

Outages

Other

2Q10

19

Progress on Fixed Cost Reductions

All Fixed Cost Reductions Achieved by 2Q

Progress on Fixed Cost Reductions

All Fixed Cost Reductions Achieved by 2Q

$ Million

Mill

2

nd

-Quarter Annualized

Run-Rate Fixed Cost

Savings

Industrial Packaging

Albany,

Pineville

$60

Printing & Communications Papers

Franklin

$90

Coated Paperboard

Franklin

$20

In

addition,

the

closure

of

the

Inverurie

&

Etienne

mills

have

been

completed,

and

the

associated

operating

losses

have

been

eliminated.

20

$ Million

2Q09

1Q10

2Q10

Sales

$1,595

$1,580

$1,630

Earnings

$10

$21

$26

xpedx

Improvement from 1Q10

xpedx

Improvement from 1Q10

Revenues up 3%

from 1Q10

Strong year-over-year earnings growth driven

by aggressive operating cost management

* Facility supplies daily sales change reflects the loss of a large national account; daily sales rate up 9.1% excluding this impact

Daily Sales Change

vs. 1Q10

Printing

1.6%

Packaging

2.6%

Facility Supplies*

(2.1%)

21

Forest Products

Mineral Rights Sale; Land Sale Agreement

Forest Products

Mineral Rights Sale; Land Sale Agreement

Mineral rights sale to Natural Resource Partners in June

$43 MM revenue

$39 MM operating profit

Agreement to sell 163,000 acres to Rock Creek Capital

$200 MM sales price plus ongoing profits interest

Expect $50 MM in 3Q operating profit

Expected to close in 3Q10

Completion of land sales program

22

Sun Joint Venture

Record EBIT in 2Q10

Sun Joint Venture

Record EBIT in 2Q10

2009: 4 MM tons of coated paperboard demand in China

Projected 2010 –

2013 Demand CAGR: 8% -

9%

3 existing board machines

915,000 tons of capacity

Sold out since March 2009

New 4

th

board machine approved by Sun & IP boards

550,000-ton annual capacity

~$300 MM investment ($55 MM of IP cash)

Yanzhou, China

Start up in 1Q12

5

th

board machine in planning stage

23

$ Million

2Q09

1Q10

2Q10

Sales (100%)

$290

$395

$435

Earnings (IP Share)

($30)

($3)

$5

Ilim’s

results are reported on a one-quarter lag

IP’s shares of Ilim’s

2Q09 & 1Q10 earnings includes an after-tax foreign exchange loss of $22 MM and $2 MM, respectively.

The foreign exchange impact in 2Q10 was minimal.

Ilim

Joint Venture

Ilim

Joint Venture

2Q10 vs. 1Q10

2Q10 vs. 2Q09

Business

Volume

Price /

Ton

Volume

Price /

Ton

Pulp

4%

$56

14%

$202

Containerboard

1%

$22

15%

$54

24

Ilim Joint Venture Update

Ilim Joint Venture Update

Stabilized Russian Economy

Improved Results after Russian Crisis

Siberian pulp business continues to improve

Koryazhma mill improving with domestic market

Ilim JV Paid Cash Dividends of $330 Million

IP received $152 million, or ~ 25% of capital invested

Resuming Capital Projects to Strengthen Ilim

Focus on value-added paper products for Ilim West

Leverage competitive advantage of Siberian pulp mills

25

Ilim Joint Venture

Resuming Capital Investment Plan

Ilim Joint Venture

Resuming Capital Investment Plan

1.

Expand Siberian pulp business

790,000-ton NBSK pulp line at Bratsk

550,00-ton net increase in capacity

$700 MM in capital

Recovery boiler start-up in 3Q11

Pulp line start-up in 2Q12

2.

Integrate Koryazhma pulp into domestic market

Install paper machine at Koryazhma

165,000 tons of UFS; 55,000 tons of coating base

$270 MM in capital

Shift from export pulp to uncoated freesheet

Evaluating 75,000-ton off-line coater

Paper machine start-up in 2012

26

Balanced Capital Allocation

to Increase Shareowner Value

Balanced Capital Allocation

to Increase Shareowner Value

27

Current Macroeconomic Conditions

Current Macroeconomic Conditions

28

Third Quarter Outlook

Changes from 2Q10

Third Quarter Outlook

Changes from 2Q10

North America

Europe

Brazil

Asia

Volume

Paper

Growth at

Slower Rate

Stable

Stable

Packaging

Growth at

Slower Rate

Seasonal

Decrease

Stable

Pricing

Paper

Continued

Realization

Stable

Increasing

Packaging

Significant

Increase

Stable

CPB Decreasing,

Box Stable

Maintenance Outages

~$77 MM

Decrease

~$4 MM

Increase

Stable

Input & Freight Costs

Moderating

Linerboard

Increasing

Stable

Pulp Decreasing,

Linerboard

Increasing

xpedx

Slight

Decrease

Ilim

Increase

Other Costs

Significant

Increase

29

Summary

Significant Earnings & Cash Flow

Summary

Significant Earnings & Cash Flow

2Q10 Summary

Volume recovery

Significant price increase

realization

Strong operations

Declining fiber costs

3Q10 Outlook

N.A. demand growing at

slower rate

Further realization of

announced price increases

Moderating wood costs

Uncertain OCC costs

Significant reduction in

maintenance outages

30

Appendix

Investor Relations Contacts

Thomas A. Cleves

901-419-7566

Emily Nix

901-419-4987

Media Contact

Patty Neuhoff

901-419-4052

31

$ Million

2008

2009

2010

Estimate

Capital Spending

$1,002

$534

$800

Depreciation &

Amortization

$1,347

$1,472

$1,450

Net Interest Expense

$492

$669

$600 -

$625

Corporate Items

$103

$181

$200 -

$225

Effective Tax Rate

31.5%

30%

30-32%

Before special items and excluding Ilim

Key Financial Statistics

Key Financial Statistics

32

Free Cash Flow

Free Cash Flow

$ Million

2Q09

1Q10

2Q10

Cash from Operations

$707

$159

$509

Cash Received from Alternative Fuel

Mixture Tax Credits (AFMTC)

$688

$0

$132

Cash Provided by Continuing

Operations

$1,395

$159

$641

Less Capital Investment

($131)

($120)

($153)

Free Cash Flow

$1,264

$39

$488

Free Cash Flow Excluding AFMTC

$576

$39

$356

33

Debt Reduction Progress

$3.8 Billion Reduction since Acquisition

Debt Reduction Progress

$3.8 Billion Reduction since Acquisition

1

Excludes the debt repayment of $1 B from the proceeds of our May bond issuance: $1 B 9.375% notes due 2019

2

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

3

Excludes the debt repayment of $750 MM from the proceeds of our November bond issuance: $750 MM 7.3% notes due 2039

$12.7

$8.9

$0.6

$0.6

$0.6

$1.3

$0.6

$0.1

$8

$9

$10

$11

$12

$13

August

2008 Pro

Forma with

Acquisition

2H08

1Q09

2Q09

3Q09

4Q09

1H10

2Q Balance

34

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

Debt Maturity Profile

Maturities as of Quarter-End

Debt Maturity Profile

Maturities as of Quarter-End

35

North American Downtime

5% of Capacity in 2Q

North American Downtime

5% of Capacity in 2Q

•

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

Paperboard.  See the following slide for detail by business.

Lack of order downtime excludes capacity from mills or machines that have been permanently shutdown

1,253

965

653

617

220

172

36

133

77

15

1Q10

2Q10

Capacity Reductions

and Mix Changes

North American Downtime

North American Downtime

•

Lack of order downtime excludes capacity from mills or machines that have been permanently shutdown

16

35

2

1Q10

2Q10

Maintenance

Containerboard

Uncoated Papers

Market Pulp

Coated

Paperboard

148

42

33

21

18

37

$ Million

1Q10

2Q10

3Q10E

4Q10E

2010E

Industrial Packaging

$70

$41

$4

$24

$139

North America

$27

$45

$24

$21

$117

Europe

0

10

14

16

$40

Brazil

0

5

5

0

$10

Printing Papers Total

$27

$60

$43

$37

$167

Consumer Packaging

$6

$19

$0

$17

$42

Total Impact

$103

$120

$47

$78

$348

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

Maintenance Outages Expenses

Maintenance Outages Expenses

38

Rock Creek Capital Agreement

Rock Creek Capital Agreement

$ Millions

Acres

Cash Value

Potential Value of

Partnership

Interest

Total Value

Original 2009 Sale

Agreement

143,000

$220

$55

$275

Rock Creek Capital

Agreement

163,000

$200

$35

$235

•

10,000

acres

of

the

land

in

the

Original

2009

Sale

Agreement

was

subsequently

sold

for

$25 MM

•

30,000 acres worth $36 MM were added to the Rock Creek Capital Agreement

•

Lower total value of the Rock Creek Capital Agreement reflects the different land mix

and the change in market value driven by a later and slower recovery in real estate

•

Competitive bidding process indicated that land value had declined by ~15% over the

last 12 –

18 months

After the Rock Creek transaction, IP will have ~24,000 acres of land worth up to $15 million

39

2Q10 vs. 1Q10

2Q10 vs. 2Q09

Business

Volume

Price /

Ton

Volume

Price /

Ton

N.A. Container

8%

$43

3%

($6)

European Container*

1%

€26

9%

(€3)

Industrial Packaging

Industrial Packaging

N.A. Price Improvement per Ton

vs. December 2009 Price

June 2010

Price

Corrugated Boxes

$70

* European Container volumes reflect box shipments only, including the shipments by the non-consolidated joint venture in

Turkey

40

Average

IP

price

realization

(includes

the

impact

of

mix

across

all

grades)

2Q10 vs. 1Q10

2Q10 vs. 2Q09

Business

Volume

Price / Ton

Volume

Price / Ton

N.A. Paper

(5%)

$39

(4%)

$27

N.A. Pulp

(13%)

$106

(18%)

$228

European Paper

1%

€28

(7%)

€0

Printing Papers

Printing Papers

41

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

2Q10 vs. 1Q10

2Q10 vs. 2Q09

Volume

Price/Ton

Volume

Price/Ton

U.S. Coated Paperboard

4%

$28

12%

($7)

Revenue

Price

Revenue

Price

Converting Businesses

4%

NA

(6%)

NA

Consumer Packaging

Consumer Packaging

42

Special Items Pre-Tax

from Continuing Operations

Special Items Pre-Tax

from Continuing Operations

Special Items Pre-Tax ($Million)

2Q09

1Q10

2Q10

Industrial

Packaging

Alternative Fuel Mixture Credits

$208

Facility & Machine Closure Costs

($18)

($5)

($1)

Integration Costs

($63)

Printing

Papers

Alternative Fuel Mixture Credits

$197

Facility Closure Costs

($4)

($204)

($111)

Consumer

Packaging

Alternative Fuel Mixture Credits

$77

Reorganization

($1)

($3)

($1)

Corporate

Restructuring & Other Charges

($59)

($3)

($31)

Total Special Items Pre-Tax

$337

($215)

($144)

43

Special Items Net of Taxes

from Continuing Operations

Special Items Net of Taxes

from Continuing Operations

2Q10

$ Million

EPS

Earnings Before Special Items

$181

$0.42

Special Items Net of Taxes:

Franklin Mill Shutdown

($68)

Debt Extinguishment

($11)

Tax Adjustment

($7)

Other

($2)

Total Special Items Net of Taxes

($88)

($0.21)

Net Earnings

$93

$0.21

44

2Q10 EBITDA

before Special Items

2Q10 EBITDA

before Special Items

Operating

Profit

$ Million

D & A

$ Million

Tons

Thousand

EBITDA

per Ton

EBITDA

Margin

Industrial Packaging

North America

1

$171

$143

2,608

$120

15.8%

Europe

$19

$7

259

$100

11.2%

Printing Papers

North America

2

$46

$51

688

$141

14.3%

Western Europe

3

$7

$5

70

$171

16.2%

Eastern Europe & Russia

3

$39

$13

240

$217

26.3%

Brazil

$39

$34

282

$259

26.6%

U.S. Market Pulp

$18

$13

215

$144

19.5%

Consumer Packaging

U.S. Coated Paperboard

$14

$35

354

$138

12.5%

1

Excludes Recycling & Bag businesses; includes Saturating Kraft business

2

Includes Bleached Kraft business

3

Excludes Market Pulp

45

Operating Profits by Industry Segment

Operating Profits by Industry Segment

$ Million

2Q09

1Q10

2Q10

Industrial Packaging

$255

$46

$193

Printing Papers

$86

$126

$158

Consumer Packaging

$38

$31

$49

Distribution

$10

$21

$26

Forest Products

$3

$8

$40

Operating Profit

$392

$232

$466

Net Interest Expense

($173)

($149)

($157)

Noncontrolling Interest / Equity Earnings Adjustment

$8

$8

$7

Corporate Items

($44)

($51)

($54)

Special Items

$337

($215)

($144)

Earnings (Loss) from continuing operations before

income taxes, equity earnings & noncontrolling interest

$520

($175)

$118

Equity Earnings (Loss), net of taxes -

Ilim

($30)

($3)

$5

46

Geographic Business Segment Operating Results

Before Special Items

Geographic Business Segment Operating Results

Before Special Items

$ Million

Sales

Operating Profit

2Q09

1Q10

2Q10

2Q09

1Q10

2Q10

Industrial Packaging

North American

$1,955

$1,890

$2,120

$241

$23

$172

European

$240

$245

$235

$14

$24

$19

Asian

$75

$85

$85

$0

($1)

$2

Printing Papers

North American

$685

$685

$675

$61

$70

$46

European

$315

$315

$320

$16

$48

$55

Brazilian

$215

$225

$275

$23

$11

$39

U.S. Market Pulp

$135

$155

$160

($14)

($3)

$18

Asian

$10

$25

$15

$0

$0

$0

Consumer Packaging

North American

$565

$550

$580

$17

($1)

$17

European

$80

$85

$80

$14

$20

$19

Asian

$125

$170

$185

$7

$12

$13

Distribution

$1,595

$1,580

$1,630

$10

$21

$26

Excludes Forest Products

47

1

Assuming dilution

2

A

reconciliation

to

GAAP

EPS

is

available

at

www.internationalpaper.com

under

the

Investors

tab

at

Webcasts

and

Presentations

Pre-Tax

$MM

Tax

$MM

Non-

controlling

Interest

$MM

Equity

Earnings

Net

Income

$MM

Estimated

Tax Rate

Average

Shares

MM

Diluted

EPS

Before Special Items

1Q10

$40

($13)

($9)

($2)

$16

32%

429

$0.04

2Q10

$262

($81)

($7)

$7

$181

31%

433

$0.42

Special Items

1Q10

($215)

$37

$0

$0

($178)

17%

429

($0.42)

2Q10

($144)

$56

$0

$0

($88)

39%

434

($0.21)

Earnings

1Q10

($175)

$24

($9)

($2)

($162)

14%

429

($0.38)

2Q10

$118

($25)

($7)

$7

$93

21%

433

$0.21

2010 Earnings from Continuing Operations

2010 Earnings from Continuing Operations

2

1

48

Earnings from continuing operations before special items

2Q10 vs. 2Q09 EPS

2Q10 vs. 2Q09 EPS

.20

.42

(.31)

(.05)

.13

.19

.09

.01

.06

.01

.08

.01

$0.00

$0.10

$0.20

$0.30

$0.40

$0.50

$0.60

$0.70

2Q09

Volume

/ LOO

Price

Operations

& Costs

Input

Costs

Mix

Forest

Products

Bad Debt

Corporate

& Other

Ilim

JV

Tax

2Q10

49

255

193

(130)

(2)

20

27

18

5

$0

$50

$100

$150

$200

$250

$300

2Q09

Input

Costs

Volume

LOO

Price

& Mix

Operations

& Costs

Maintenance

Outages

2Q10

Industrial Packaging Earnings

2Q10 vs. 2Q09

Industrial Packaging Earnings

2Q10 vs. 2Q09

Earnings before special items

Operations                32

LIFO, Other Costs  (34)

50

Printing Papers Earnings

2Q10 vs. 2Q09

Printing Papers Earnings

2Q10 vs. 2Q09

Earnings before special items

86

158

(25)

(6)

(33)

77

5

54

$0

$25

$50

$75

$100

$125

$150

$175

$200

2Q09

Input

Costs

Price

& Mix

Volume

Maintenance

Outages

Operations

& Costs

Bad Debt

2Q10

51

$ Million

2Q09

1Q10

2Q10

Sales

$215

$225

$275

Earnings

$23

$11

$39

EBITDA Margin

24%

20%

27%

IP Brazil results are reported in the Printing Papers segment

IP Brazil

IP Brazil

2Q10 vs. 1Q10

2Q10 vs. 2Q09

Business

Volume

Price /

Ton

Volume

Price /

Ton

Uncoated Freesheet

14%

$43

20%

($9)

Domestic

3%

$54

(7%)

($37)

Export

21%

$36

44%

$6

52

Consumer Packaging Earnings

2Q10 vs. 2Q09

Consumer Packaging Earnings

2Q10 vs. 2Q09

Earnings before special items

38

49

(45)

22

17

13

1

3

$0

$20

$40

$60

$80

$100

2Q09

Price

& Mix

Volume

/ LOO

Input

Costs

Operations

& Costs

Maintenance

Outages

Other

2Q10

53

Total Cash Cost Components

2Q10 YTD

Total Cash Cost Components

2Q10 YTD

North American Mills Only

54

Global Input & Freight Costs vs. 1H09

$287 MM, or $0.45/Share Unfavorable

Global Input & Freight Costs vs. 1H09

$287 MM, or $0.45/Share Unfavorable

Input costs for continuing businesses

76

(17)

(36)

(310)

($350)

($250)

($150)

($50)

$50

Fiber

Freight

Energy

Chemicals

Outside North America

North America

55

Global Input & Freight Costs vs. 2Q09

$200 MM, or $0.32/Share Unfavorable

Global Input & Freight Costs vs. 2Q09

$200 MM, or $0.32/Share Unfavorable

Input costs for continuing businesses

(179)

(26)

(14)

19

($200)

($150)

($100)

($50)

$0

$50

Fiber

Freight

Energy

Chemicals

North America

Outside North America

56

NYMEX Natural Gas closing prices

Index: Jan 2005 Natural Gas Costs = 100

Natural Gas Costs

23% Decrease vs. 1Q10 Average Cost

Natural Gas Costs

23% Decrease vs. 1Q10 Average Cost

57

U.S. Fuel Oil

2% Increase vs. 1Q10 Average Cost

U.S. Fuel Oil

2% Increase vs. 1Q10 Average Cost

Index: Jan 2006 Fuel Oil Costs = 100

WTI Crude prices

58

U.S. Chemical Composite Index

4% Increase vs. 1Q10 Average Cost

U.S. Chemical Composite Index

4% Increase vs. 1Q10 Average Cost

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

Chlorate, Starch and Sulfuric Acid

2005 -

2008 excludes WY PKG

Index: 1Q05 Chemical Composite= 100

59

2010 Global Consumption

Annual Purchase Estimates for Key Inputs

2010 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)

42,000,000

13,000,000

Fuel Oil (Barrels)

1,500,000

500,000

Coal (Tons)

860,000

260,000

Fiber

Wood (Tons)

44,200,000

8,800,000

Old Corrugated Containers (Tons)

3,000,000

310,000

Chemicals

Caustic Soda (Tons)

250,000

70,000

Starch (Tons)

394,000

96,000

Sodium Chlorate (Tons)

180,000

40,000

LD Polyethylene (Tons)

39,000

-

Latex (Tons)

22,000

4,000