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 27, 2010

(Date of Report)

October 27, 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 October 27, 2010, International Paper Company issued a press release reporting preliminary earnings for the third 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 October 27, 2010.
Exhibit 99.2	Slides of International Paper Company, dated October 27, 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: October 27, 2010

Exhibit Index

Exhibit 99.1	Press release of International Paper Company, dated October 27, 2010.
Exhibit 99.2	Slides of International Paper Company, dated October 27, 2010.

EX-99.1

Exhibit 99.1

News Release

International Paper Reports Record Earnings

Increased Revenues, Significant Margin Expansion, Strong Free Cash Flow

MEMPHIS, Tenn. – October 27th, 2010 – International Paper (NYSE: IP) today reported third quarter 2010 net earnings attributable to common shareholders totaling $397 million ($0.91 per share) compared with $93 million ($0.21 per share) in the second quarter of 2010 and $371 million ($0.87 per share) in the third quarter of 2009. Amounts include the impact of special items in the second quarter of 2010 and the third quarter of 2009.

Diluted Earnings Per Share Attributable to International Paper Shareholders

	Third Quarter 2010		Second Quarter 2010		Third Quarter 2009
Net Earnings	$	0.91	$	0.21	$	0.87
Add Back – Net Special Items Expense (Income)	$	0.00	$	0.21	($	0.50	)
Earnings Before Special Items	$	0.91	$	0.42	$	0.37

Quarterly net sales were $6.7 billion compared with $6.1 billion in the second quarter of 2010 and $5.9 billion in the third quarter of 2009.

Operating profits before special items were $752 million in the third quarter of 2010, up from $466 million in the second quarter of 2010 and $443 million in the third quarter of 2009.

“Our paper and packaging businesses delivered strong results, which led to record earnings,” said John Faraci, chairman and chief executive officer. “We continued to realize our announced price increases, realize restructuring benefits, operate well and improve our mix of business which led to strong margin expansion. As a result, free cash flow in the quarter was outstanding. We are well positioned to generate strong results in the fourth quarter and into 2011.”

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. Third quarter 2010 business segment operating profits

and business trends compared with the prior quarter are as follows (special items were immaterial in the 2010 third quarter):

Industrial Packaging operating profits rose to $332 million versus $193 million ($192 million after special items) in the second quarter of 2010. Our North American operations generated record quarterly earnings, reflecting the realization of announced price increases for boxes and linerboard, fewer mill outages, improved input costs, and continued strong mill operations.

Printing Papers operating profits were $278 million versus $158 million ($47 million after special items) in the second quarter of 2010. Earnings for North American printing papers represent the second best quarterly earnings on record. Results were positively impacted by favorable pulp and paper pricing, reduced fixed costs, fewer mill outages, bad debt recovery, and increased shipments in the U.S. and Europe.

Consumer Packaging operating profits increased to $71 million compared with $49 million ($48 million after special items) in the second quarter of 2010. Our North American coated paperboard business generated record quarterly earnings. Results benefited from higher volumes, further realization of announced price increases, and fewer maintenance outages.

xpedx, the company’s distribution business, reported operating profits of $22 million, down from $26 million in the second quarter of 2010. Higher sales volumes were offset by lower margins and increased overhead costs.

Forest Products earnings were $49 million, up from $40 million in the second quarter due to the sale of the majority of our remaining land portfolio.

Net corporate expenses totaled $58 million for the 2010 third quarter, essentially in line with the $54 million in the 2010 second quarter.

Effective Tax Rate

The effective third quarter tax rate was 31 percent, compared with an effective tax rate before special items of 31 percent in the second quarter of 2010 and 30 percent in the third quarter of 2009.

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 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, 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 $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.

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 Third Quarter Earnings Call. The conference ID number is 11919083. 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 “11919083.”

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.

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: Tom Ryan, 901-419-4333

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

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,
	2010		2009			2010			2010			2009
Net Sales	$	6,720	$	5,919		$	6,121		$	18,648		$	17,389
Costs and Expenses
Cost of products sold		4,758		3,758	(a)		4,490			13,712			11,270	(g)
Selling and administrative expenses		504		527	(b)		472			1,397			1,535	(h)
Depreciation, amortization and cost of timber harvested		362		378			363			1,096			1,088
Distribution expenses		339		299			330			986			857
Taxes other than payroll and income taxes		58		48			47			150			145
Restructuring and other charges		—		151	(c)		144	(d)		359	(e)		313	(i)
Net losses on sales and impairments of businesses		—		—			—			—			48	(j)
Interest expense, net		152		169			157			458			506
Earnings From Continuing Operations Before Income Taxes and Equity Earnings		547		589	(a-c)		118	(d)		490	(e)		1,627	(g-j)
Income tax provision		170		212			25			171	(f)		790	(k)
Equity earnings (losses), net of taxes		22		—			7			27			(59	)
Net Earnings	$	399	$	377	(a-c)	$	100	(d)	$	346	(e,f)	$	778	(g-k)
Less: Net earnings attributable to noncontrolling interests		2		6			7			18			14
Net Earnings Attributable to International Paper Company	$	397	$	371	(a-c)	$	93	(d)	$	328	(e,f)	$	764	(g-k)
Basic Earnings Per Common Share Attributable to International Paper Common Shareholders	$	0.92	$	0.87	(a-c)	$	0.22	(d)	$	0.76	(e,f)	$	1.80	(g-k)
Diluted Earnings Per Common Share Attributable to International Paper Common Shareholders	$	0.91	$	0.87	(a-c)	$	0.21	(d)	$	0.76	(e,f)	$	1.79	(g-k)
Average Shares of Common Stock Outstanding - Diluted		433.8		428.7			433.4			433.8			426.6
Cash Dividends Per Common Share	$	0.125	$	0.025		$	0.125		$	0.275		$	0.300

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 $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 pre-tax charges of $4 million ($2 million after taxes) for other items.

(e) 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.

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

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

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

(i) 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.

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

(k) 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.

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 September 30,					Three Months Ended June 30,			Nine Months Ended September 30,
	2010		2009			2010			2010			2009
Earnings Before Special Items	$	397	$	157		$	181		$	594		$	277
Restructuring and other charges		—		(95	)		(88	)		(220	)		(215	)
CBPR business integration costs		—		(11	)		—			—			(44	)
Alternative fuel mixture credits		—		320			—			—			944
Net losses on sales and impairments of businesses		—		—			—			—			(48	)
Income tax adjustments		—		—			—			(46	)		(150	)
Net Earnings as Reported	$	397	$	371		$	93		$	328		$	764
	Three Months Ended September 30,					Three Months Ended June 30,			Nine Months Ended September 30,
Diluted Earnings per Common Share	2010		2009			2010			2010			2009
Earnings Per Share Before Special Items	$	0.91	$	0.37		$	0.42		$	1.37		$	0.65
Restructuring and other charges		—		(0.22	)		(0.21	)		(0.51	)		(0.50	)
CBPR business integration costs		—		(0.03	)		—			—			(0.11	)
Alternative fuel mixture credits		—		0.75			—			—			2.21
Net losses on sales and impairments of businesses		—		—			—			—			(0.11	)
Income tax adjustments		—		—			—			(0.10	)		(0.35	)
Diluted Earnings per Common Share as Reported	$	0.91	$	0.87		$	0.21		$	0.76		$	1.79

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, 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,			Nine Months Ended September 30,
	2010			2009			2010			2010			2009
Industrial Packaging	$	2,610		$	2,230		$	2,440		$	7,270		$	6,680
Printing Papers		1,550			1,470			1,445			4,400			4,155
Consumer Packaging		870			790			845			2,520			2,275
Distribution		1,755			1,665			1,630			4,965			4,850
Forest Products		205			5			5			220			20
Corporate and Inter-segment Sales		(270	)		(241	)		(244	)		(727	)		(591	)
Net Sales	$	6,720		$	5,919		$	6,121		$	18,648		$	17,389
Operating Profit by Industry Segment
	Three Months Ended September 30,						Three Months Ended June 30,			Nine Months Ended September 30,
	2010			2009			2010			2010			2009
Industrial Packaging	$	332		$	410	(2,3,4)	$	192	(7)	$	565	(7)	$	1,152	(2,3,4)
Printing Papers		278			363	(2,5)		47	(8)		247	(8)		954	(2,5)
Consumer Packaging		71			144	(2,6)		48	(6)		147	(6)		370	(2,6)
Distribution		22			21			26			69			24
Forest Products		49			2			40			97			7
Operating Profit (1)		752			940			353			1,125			2,507
Interest expense, net		(152	)		(169	)		(157	)		(458	)		(506	)
Noncontrolling interest/equity earnings adjustment (9)		5			5			7			20			19
Corporate items, net		(58	)		(46	)		(54	)		(163	)		(141	)
Restructuring and other charges		—			(141	)		(31	)		(34	)		(252	)
Earnings From Continuing Operations Before Income Taxes and Equity Earnings	$	547		$	589		$	118		$	490		$	1,627
Equity Earnings (Loss) in Ilim Holdings S.A., Net of Taxes (1)	$	22		$	—		$	5		$	24		$	(56	)

(1) In addition to the operating profits shown above, International Paper recorded equity earnings, net of taxes, of $22 million, $0 million and $5 million for the three months ended September 30, 2010, September 30, 2009 and June 30, 2010, respectively, and $24 million for the nine months ended September 30, 2010; and equity losses, net of taxes, of $56 million for the nine months ended September 30, 2009, related to the equity investment in Ilim Holdings S.A., a separate reportable industry segment.

(2) Includes gains of $221 million in the Industrial Packaging segment, $226 million in the Printing Papers segment, and $78 million million in the Consumer Packaging segment for the three months ended September 30, 2009, 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 the three months ended September 30, 2009, and $72 million for the nine months ended September 30, 2009, for CBPR integration costs.

(4) Includes charges of $7 million and $22 million for the three and nine months ended September 30, 2009, respectively, for severance and other costs related to the planned closure of the Etienne mill and $48 million for the nine months ended September 30, 2009 to write down the assets at the Etienne mill in France to estimated fair value.

(5) Includes charges of $1 million and $11 million for the three and nine months ended September 30, 2009, respectively, 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.

(6) Includes charges of $2 million and $1 million for the three months ended September 30, 2009 and June 30, 2010, respectively, and $4 million and $5 million for the nine months ended September 30, 2010 and September 30, 2009, respectively, related to the reorganization of the Company’s Shorewood operations.

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

(8) Includes charges of $111 million and $315 million for the three and nine months ended June 30, 2010 and September 30, 2010, respectively, for shutdown costs for the Franklin mill.

(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 Company

Reconciliation of Operating Profit to Operating Profit Before Special Items

(In millions)

	Three Months Ended September 30, 2010
	Industrial Packaging			Printing Papers			Consumer Packaging			Distribution		Forest Products		Total
Operating Profit as Reported		332			278			71			22		49		752
Restructuring and other charges		—			—			—			—		—		—
Operating Profit Before Special Items		332			278			71			22		49		752
	Three Months Ended June 30, 2010
	Industrial Packaging			Printing Papers			Consumer Packaging			Distribution		Forest Products		Total
Operating Profit as Reported		192			47			48			26		40		353
Restructuring and other charges		1			111			1			—		—		113
Operating Profit Before Special Items		193			158			49			26		40		466
	Three Months Ended September 30, 2009
	Industrial Packaging			Printing Papers			Consumer Packaging			Distribution		Forest Products		Total
Operating Profit as Reported		410			363			144			21		2		940
Restructuring and other charges		7			1			2			—		—		10
Alternative fuel mixture credits		(221	)		(226	)		(78	)						(525	)
CBPR business integration costs		18													18
Operating Profit Before Special Items		214			138			68			21		2		443

International Paper

Sales Volume by Product (1)

Preliminary and Unaudited

International Paper Consolidated

	Three Months Ended September 30,				Three Months Ended June 30,		Nine Months Ended September 30,
	2010		2009		2010		2010		2009
Industrial Packaging (In thousands of short tons)
Corrugated Packaging		1,928		1,856		1,956		5,693		5,531
Containerboard		634		580		602		1,867		1,581
Recycling		636		566		644		1,860		1,759
Saturated Kraft		45		33		50		136		83
Bleached Kraft		23		22		21		66		52
European Industrial Packaging		251		252		259		768		790
Asian Box		114		43		44		197		109
Asian Distribution		87		157		82		270		318
Industrial Packaging		3,718		3,509		3,658		10,857		10,223
Printing Papers (In thousands of short tons)
U.S. Uncoated Papers		684		753		667		2,051		2,148
European & Russian Uncoated Papers		311		304		310		929		1,006
Brazilian Uncoated Papers		262		282		282		792		696
Asian Uncoated Papers		24		25		19		75		40
Uncoated Papers		1,281		1,364		1,278		3,847		3,890
Market Pulp (2)		385		422		317		1,053		1,114
Consumer Packaging (In thousands of short tons)
U.S. Coated Paperboard		364		324		354		1,057		932
European Coated Paperboard		88		86		86		264		265
Asian Coated Paperboard		213		221		217		651		628
Other Consumer Packaging		45		42		44		129		130
Consumer Packaging		710		673		701		2,101		1,955

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

(2) Includes internal sales to mills.

INTERNATIONAL PAPER COMPANY

Consolidated Balance Sheet

Preliminary and Unaudited

(In Millions)

	September 30, 2010		December 31, 2009
Assets
Current Assets
Cash and Temporary Investments	$	1,429	$	1,892
Accounts and Notes Receivable, Net		3,310		2,695
Inventories		2,336		2,179
Deferred Income Tax Assets		330		368
Other		403		417
Total Current Assets		7,808		7,551
Plants, Properties and Equipment, Net		12,030		12,688
Forestlands		730		757
Investments		1,065		1,077
Goodwill		2,285		2,290
Deferred Charges and Other Assets		1,171		1,185
Total Assets	$	25,089	$	25,548
Liabilities and Equity
Current Liabilities
Notes Payable and Current Maturities of Long-Term Debt	$	312	$	304
Accounts Payable and Accrued Liabilities		4,206		3,708
Total Current Liabilities		4,518		4,012
Long-Term Debt		8,428		8,729
Deferred Income Taxes		2,759		2,425
Pension Benefit Obligation		1,607		2,765
Postretirement and Postemployment Benefit Obligation		517		538
Other Liabilities		622		824
Equity
Invested Capital		4,234		4,074
Retained Earnings		2,154		1,949
Total Shareholders’ Equity		6,388		6,023
Non-controlling interests		250		232
Total Equity		6,638		6,255
Total Liabilities and Equity	$	25,089	$	25,548

INTERNATIONAL PAPER COMPANY

Consolidated Statement of Cash Flows

Preliminary and Unaudited

(In Millions)

	Nine Months Ended September 30,
	2010			2009
Operating Activities
Net earnings	$	346		$	778
Depreciation, amortization and cost of timber harvested		1,096			1,088
Cost of timberlands sold		143			—
Deferred income tax expense, net		397			585
Restructuring and other charges		359			313
Payments related to restructuring and legal reserves		(2	)		(35	)
Pension plan contribution		(1,150	)		—
Net losses on sales and impairments of businesses		—			48
Equity (earnings) loss, net		(27	)		59
Periodic pension expense, net		174			160
Alternative fuel mixture credits receivable		—			(251	)
Other, net		(57	)		140
Changes in current assets and liabilities
Accounts and notes receivable		(555	)		466
Inventories		(181	)		262
Accounts payable and accrued liabilities		126			(38	)
Interest payable		49			21
Other		(131	)		(26	)
Cash Provided by Operations		587	(1)		3,570	(1)
Investment Activities
Invested in capital projects		(457	)		(367	)
Acquisitions, net of cash received		(152	)		(17	)
Other		(2	)		(59	)
Cash Used for Investment Activities		(611	)		(443	)
Financing Activities
Repurchases of common stock and payments of restricted stock tax withholding		(26	)		(10	)
Issuance of debt		177			2,490
Reduction of debt		(505	)		(4,911	)
Change in book overdrafts		80			(5	)
Dividends paid		(120	)		(129	)
Other		(24	)		(113	)
Cash Used for Financing Activities		(418	)		(2,678	)
Effect of Exchange Rate Changes on Cash		(21	)		59
Change in Cash and Temporary Investments		(463	)		508
Cash and Temporary Investments
Beginning of the period		1,892			1,144
End of the period	$	1,429		$	1,652

(1) Includes $132 million and $1.3 billion of cash received from alternative fuel mixture credits in the nine months ended September 30, 2010 and 2009, respectively.

EX-99.2

Third Quarter

2010 Review

October 27, 2010

Third Quarter

2010 Review

October 27, 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

Third Quarter 2010

Headlines

Third Quarter 2010

Headlines

Outstanding Earnings

All global segments

More than double 2Q

Strong Free Cash Flow

More than double 2Q

Cost-of-Capital Returns

$1.2 B Pension Contribution

& $200 MM Debt Reduction

5

Third Quarter 2010

Significant Earnings Improvement

Third Quarter 2010

Significant Earnings Improvement

Excellent Earnings in All Three

U.S. Mill Businesses

Continued Strong Earnings in

EMEA Paper and Packaging

Strong Contribution from Ilim

Joint Venture

Restructuring Benefits

Incremental Price Increase

Realization

Continued Strong Operations

Earnings from continuing operations before

special items

6

3Q10 Financial Snapshot

Strong EBITDA & Free Cash Flow

3Q10 Financial Snapshot

Strong EBITDA & Free Cash Flow

3Q09

2Q10

3Q10

Sales ($B)

$5.9

$6.1

$6.7

EBITDA

1

($MM)

$780

$782

$1,061

EBITDA Margin

13%

13%

16%

Free Cash Flow

2

($MM)

$605

$356

$753

Debt ($B)

$9.6

$8.9

$8.7

Cash Balance ($B)

$1.7

$1.9

$1.4

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 $463 MM in 3Q09, $132 MM in 2Q10, cash received under European accounts receivable securitization

of $0.2B in 3Q09, and cash paid for voluntary pension contributions of $1.2 B in 3Q10.

7

Transformation Enabling Improved Returns

Recovering from Global Recession

Transformation Enabling Improved Returns

Recovering from Global Recession

Cost of Capital

8

Operating EPS

Record Quarterly Earnings

Operating EPS

Record Quarterly Earnings

2003

2004

2005

2006

2007

2010

2002

2000

2001

2008

Impact of Mineral

Rights Gain

2009

Earnings from continuing operations before special items as reported at the time

Transformation

9

EBITDA Momentum Accelerating

EBITDA Momentum Accelerating

EBITDA

and

EBITDA

Margins

before

special

items,

excluding

Forest

Products

10

Earnings before special items

3Q10 vs. 2Q10 EPS

Price Realization, Improved Volumes, Strong Operations

3Q10 vs. 2Q10 EPS

Price Realization, Improved Volumes, Strong Operations

Reflects the delta between a $33 MM charge

in 2Q and $16 MM recovered in 3Q

11

Earnings from continuing operations before special items

9M10 vs. 9M09 EPS

Higher

Prices, Improved Volumes, Elevated Fiber Costs

9M10 vs. 9M09 EPS

Higher

Prices, Improved Volumes, Elevated Fiber Costs

12

Stable Global Input Costs vs. 2Q10

$1 MM Favorable, or $0.00/Share

Stable Global Input Costs vs. 2Q10

$1 MM Favorable, or $0.00/Share

By Business

By Input Type

13

Industrial Packaging Earnings

3Q10 vs. 2Q10

Industrial Packaging Earnings

3Q10 vs. 2Q10

Earnings before special items

14

3Q10 vs. 2Q10

3Q10 vs. 3Q09

Business

Volume

Price /

Ton

Volume

Price /

Ton

N.A. Container

(1%)

$38

4%

$72

European Container*

(4%)

€36

6%

€47

Industrial Packaging

Volume Recovery, Price Increase Realization

Industrial Packaging

Volume Recovery, Price Increase Realization

N.A. Price Improvement per Ton

vs. December 2009 Price

Sept 2010

Price / Ton

Corrugated Boxes

$95

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

Turkey

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

Printing Papers Earnings

3Q10 vs. 2Q10

Printing Papers Earnings

3Q10 vs. 2Q10

Earnings before special items

17

Consumer Packaging Earnings

3Q10 vs. 2Q10

Consumer Packaging Earnings

3Q10 vs. 2Q10

Earnings before special items

18

$ Million

3Q09

2Q10

3Q10

Sales

$1,665

$1,630

$1,755

Earnings

$21

$26

$22

xpedx

3Q10 vs. 2Q10

xpedx

3Q10 vs. 2Q10

Revenues up 8% from 2Q10

Daily sales rate best since 4Q08

Daily Sales Change

vs. 2Q10

Printing

8.6%

Packaging

7.0%

Facility Supplies

4.4%

19

Forest Products

Substantial

Completion of Land Sales

Forest Products

Substantial

Completion of Land Sales

Rock Creek Transaction Closed

Sales Price

$199MM

Retained Profit Interest in Partnership

20%

Cash Received at Closing

$160MM

To Be Received within 3 Years

$39MM

(plus Interest)

IP

has

minimal

land

remaining

for

sale

and

will

no

longer

report

land

sales

separately

after

4Q10

$ Million

3Q09

2Q10

3Q10

Earnings

$2

$40

$49

20

$ Million

3Q09

2Q10

3Q10

Sales (100%)

$305

$435

$465

Earnings (IP Share)

$0

$5

$22

Ilim’s

results are reported on a one-quarter lag

IP’s shares of Ilim’s

reported earnings for 3Q09 & 3Q10 include an after-tax foreign exchange gain of $10 MM and an after-tax foreign

exchange loss of $6 MM, respectively.  The foreign exchange impact in 2Q10 was minimal.

Ilim

Joint Venture

3Q10 vs. 2Q10

Ilim

Joint Venture

3Q10 vs. 2Q10

3Q10 vs. 2Q10

3Q10 vs. 3Q09

Business

Volume

Price /

Ton

Volume

Price /

Ton

Pulp

(7%)

$131

3%

$327

Containerboard

(6%)

$61

1%

$141

21

IP Europe, Middle East & Africa

9M10: 10% of IP Sales & 15% of IP EBITDA

IP Europe, Middle East & Africa

9M10: 10% of IP Sales & 15% of IP EBITDA

On Pace for Record

Annual Earnings

Continued Demand Recovery

Price Increases Realized

Solid Operations

Return on Investment

9M10

European Papers, excl. Russia

19%

Russian Papers

15%

EMEA Container

11%

22

Cellulosic Biofuel

Tax Credit

Analyzing the Potential Benefit to IP

Cellulosic Biofuel

Tax Credit

Analyzing the Potential Benefit to IP

CBTC is $1.01/gallon credit against taxable

income (excess may be carried forward until

2015)

OCT 5

th

–

IRS rules companies may qualify

for AFMTC and CBTC within 2009

Companies can pick & choose in order to

maximize benefit

To claim higher CBTC credit, companies

would have to repay cash received for

AFMTC & file amended tax returns

IP cannot quantify the value of CBTC

because it depends on future taxable

earnings, but it could be significant

IP produced

3.5 billion

gallons of

black liquor

in 2009

23

Balanced Capital Allocation

to Increase Shareowner Value

Balanced Capital Allocation

to Increase Shareowner Value

24

Fourth Quarter Outlook

Changes from 3Q10

Fourth Quarter Outlook

Changes from 3Q10

North America

Europe

Brazil

Asia

Volume

Paper

Seasonal

Decrease

Stable

Stable

Packaging

Seasonal

Decrease

Seasonal

Increase

Stable

Pricing

Paper

Paper Stable;

Pulp Decrease

Stable

Stable

Packaging

Stable

Improving

Stable

Maintenance Outages

~$37MM

Increase

Stable

~$6MM

Decrease

Input & Freight Costs

Higher OCC

& Chemicals

Stable

Stable

Stable

xpedx

Seasonal

Decrease

Ilim

Stable

Forest

Products

$50MM

Decrease

25

3Q Summary & 4Q Outlook

Strong, but Seasonally Lower, 4Q EPS & FCF

3Q Summary & 4Q Outlook

Strong, but Seasonally Lower, 4Q EPS & FCF

3Q10 Summary

Volume ended strong as

quarter progressed

Incremental price increase

realizations

Strong operations

Flat input costs

4Q10 Outlook

Seasonal demand declines

Stable prices

Higher maintenance outages

Increasing OCC & chemicals

costs

No more Forest Products

earnings

Strong 3Q Earnings

& Free Cash Flow

Strong, but Seasonally

Lower,  4Q EPS & FCF

26

Appendix

Investor Relations Contacts

Thomas A. Cleves

901-419-7566

Emily Nix

901-419-4987

Media Contact

Tom Ryan

901-419-4333

27

$ 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

28

Free Cash Flow

Free Cash Flow

$ Million

3Q09

2Q10

3Q10

Cash from Operations

$713

$509

$937

Cash Received from Alternative Fuel

Mixture Tax Credits (AFMTC)

$463

$132

$0

Cash Provided by Operations,

as Adjusted

$1,381

$641

$937

Less Capital Investment

($108)

($153)

($184)

Free Cash Flow

$1,273

$488

$753

Free Cash Flow Excluding AFMTC

$605

$356

$753

1

Excludes $205 MM cash received under European accounts receivable securitization in 3Q09

2

Excludes $1.2 B cash paid for voluntary pension contributions.

1

2

29

Balance Sheet Debt Reduction Progress

$4 Billion Reduction since Acquisition

Balance Sheet Debt Reduction Progress

$4 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

1

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

1

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

30

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

31

$ Million

1Q10

2Q10

3Q10

4Q10E

2010E

Industrial Packaging

$70

$41

$3

$26

$140

Printing Papers Total

$27

$60

$52

$44

$183

North America

$27

$45

$30

$28

$130

Europe

0

10

14

14

$38

Brazil

0

5

8

2

$15

Consumer Packaging

$6

$19

$0

$16

$41

Total Impact

$103

$120

$55

$86

$364

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

Maintenance Outages Expenses

Maintenance Outages Expenses

32

Average

IP

price

realization

(includes

the

impact

of

mix

across

all

grades)

3Q10 vs. 2Q10

3Q10 vs. 3Q09

Business

Volume

Price / Ton

Volume

Price / Ton

N.A. Paper

3%

$21

(9%)

$72

N.A. Pulp

30%

$19

(7%)

$244

European Paper

0%

€34

2%

€53

Printing Papers

Printing Papers

33

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

3Q10 vs. 2Q10

3Q10 vs. 3Q09

Volume

Price/Ton

Volume

Price/Ton

U.S. Coated Paperboard

3%

$37

12%

$53

Revenue

Price

Revenue

Price

Converting Businesses

5%

NA

(1%)

NA

Consumer Packaging

Consumer Packaging

34

3Q10 EBITDA

3Q10 EBITDA

Operating

Profit

$ Million

D & A

$ Million

Tons

Thousand

EBITDA

per Ton

EBITDA

Margin

Industrial Packaging

North America

$319

$138

2,607

$175

21.9%

Europe

$14

$7

251

$84

8.9%

Printing Papers

North America

$125

$49

707

$246

24.4%

Western Europe

$6

$5

62

$177

15.3%

Eastern Europe & Russia

$44

$14

249

$233

27.2%

Brazil

$46

$33

262

$302

28.7%

U.S. Market Pulp

$49

$14

279

$226

29.9%

Consumer Packaging

U.S. Coated Paperboard

$56

$38

364

$258

22.4%

1

Excludes Recycling & Bag businesses; includes Saturating Kraft business

2

Includes Bleached Kraft business

3

Excludes Market Pulp

1

2

3

3

35

Operating Profits by Industry Segment

Operating Profits by Industry Segment

$ Million

3Q09

2Q10

3Q10

Industrial Packaging

$214

$193

$332

Printing Papers

$138

$158

$278

Consumer Packaging

$68

$49

$71

Distribution

$21

$26

$22

Forest Products

$2

$40

$49

Operating Profit

$443

$466

$752

Net Interest Expense

($169)

($157)

($152)

Noncontrolling Interest / Equity Earnings Adjustment

$5

$7

$5

Corporate Items

($46)

($54)

($58)

Special Items

$356

($144)

$0

Earnings from continuing operations before income

taxes, equity earnings & noncontrolling interest

$589

$118

$547

Equity Earnings, net of taxes -

Ilim

$0

$5

$22

36

Geographic Business Segment Operating Results

Before Special Items

Geographic Business Segment Operating Results

Before Special Items

$ Million

Sales

Operating Profit

3Q09

2Q10

3Q10

3Q09

2Q10

3Q10

Industrial Packaging

North American

$1,890

$2,120

$2,210

$201

$172

$320

European

$240

$235

$235

$13

$18

$14

Asian

$100

$85

$165

$0

$2

($2)

Printing Papers

North American

$725

$675

$715

$92

$46

$125

European

$300

$320

$325

$28

$55

$58

Brazilian

$275

$275

$275

$36

$39

$46

U.S. Market Pulp

$155

$160

$210

($18)

$18

$49

Asian

$15

$15

$25

$0

$0

$0

Consumer Packaging

North American

$565

$580

$615

$44

$17

$51

European

$80

$80

$85

$17

$19

$17

Asian

$145

$185

$170

$7

$13

$3

Distribution

$1,665

$1,630

$1,755

$21

$26

$22

Excludes Forest Products

37

1

2

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

3Q10

$547

($170)

($2)

$22

$397

31%

434

$0.91

Special Items

1Q10

($215)

$37

$0

$0

($178)

17%

429

($0.42)

2Q10

($144)

$56

$0

$0

($88)

39%

433

($0.21)

3Q10

$0

$0

$0

$0

$0

0%

434

$0

Earnings

1Q10

($175)

$24

($9)

($2)

($162)

14%

429

($0.38)

2Q10

$118

($25)

($7)

$7

$93

21%

433

$0.21

3Q10

$547

($170)

($2)

$22

$397

31%

434

$0.91

2010 Earnings from Continuing Operations

2010 Earnings from Continuing Operations

1

2

Assuming dilution 

A

reconciliation to GAAP EPS is available at www.internationalpaper.com under the Investors tab at Webcasts and Presentations

38

Earnings from continuing operations before special items

3Q10 vs. 3Q09 EPS

3Q10 vs. 3Q09 EPS

39

Industrial Packaging Earnings

3Q10 vs. 3Q09

Industrial Packaging Earnings

3Q10 vs. 3Q09

Earnings before special items

40

Printing Papers Earnings

3Q10 vs. 3Q09

Printing Papers Earnings

3Q10 vs. 3Q09

Earnings before special items

41

$ Million

3Q09

2Q10

3Q10

Sales

$275

$275

$275

Earnings

$36

$39

$46

EBITDA Margin

25%

27%

29%

IP Brazil results are reported in the Printing Papers segment

IP Brazil

IP Brazil

3Q10 vs. 2Q10

3Q10 vs. 3Q09

Business

Volume

Price /

Ton

Volume

Price /

Ton

Uncoated Freesheet

(7%)

$58

(7%)

$80

Domestic

17%

$5

(6%)

($10)

Export

(21%)

$102

(8%)

$153

42

Consumer Packaging Earnings

3Q10 vs. 3Q09

Consumer Packaging Earnings

3Q10 vs. 3Q09

Earnings before special items

43

Total Cash Cost Components

3Q10 YTD

Total Cash Cost Components

3Q10 YTD

North American Mills Only

44

Global Input & Freight Costs vs. 9M09

$476 MM Unfavorable, or $0.76/Share

Global Input & Freight Costs vs. 9M09

$476 MM Unfavorable, or $0.76/Share

Input costs for continuing businesses

45

Global Input & Freight Costs vs. 3Q09

$189 MM Unfavorable, or $0.31/Share

Global Input & Freight Costs vs. 3Q09

$189 MM Unfavorable, or $0.31/Share

Input costs for continuing businesses

46

U.S. Mill Wood Delivered Cost Trends

7% Decrease vs. 2Q10 Average Cost

U.S. Mill Wood Delivered Cost Trends

7% Decrease vs. 2Q10 Average Cost

Declining Wood

Demand

Poor Harvesting Conditions &

Higher Wood Demand

Normal

Harvesting

Conditions

47

U.S. OCC Delivered Cost Trends

9% Decrease vs. 2Q10 Average Cost

U.S. OCC Delivered Cost Trends

9% Decrease vs. 2Q10 Average Cost

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

Reduced

OCC Demand

Reduced

China

Demand

Increasing Demand in China & in

U.S. as Wood Substitute

48

NYMEX Natural Gas closing prices

Natural Gas Costs

7% Increase vs. 2Q10 Average Cost

Natural Gas Costs

7% Increase vs. 2Q10 Average Cost

49

U.S. Fuel Oil

3% Decrease vs. 2Q10 Average Cost

U.S. Fuel Oil

3% Decrease vs. 2Q10 Average Cost

WTI Crude prices

50

U.S. Chemical Composite Index

5% Increase vs. 2Q10 Average Cost

U.S. Chemical Composite Index

5% Increase vs. 2Q10 Average Cost

Delivered

cost

to

U.S.

facilities;

includes

Caustic

Soda,

Sodium

Chlorate,

Starch

and

Sulfuric

Acid

2005 -

2008 excludes WY PKG

51

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