1 Nicholls 07-11

Tim Nicholls Chief Financial Officer, Senior Vice President

Southern Legislative Conf. July 17, 2011

Poised to Take Off? U.S. Economy in 2011

and Beyond . . .

2 Nicholls 07-11

International Paper: A Global Perspective

Leading global paper & packaging company

$25 billion in revenues

Nearly 60,000 employees

Manufacturing operations in 24 countries

Fortune’s most admired company in industry – eight years

Worldwide presence and customer base

3 Nicholls 07-11

Streamlined Business Portfolio Improved Positions in more Profitable Segments

Segment Position

Market Segment 2004 2010

U.S. Industrial Packaging #3 #1

U.S. Uncoated Papers #1 #2

U.S. Coated Paperboard #1 #1

Global Market Pulp Secondary #4

U.S. Coated Papers Secondary Exited

U.S. Wood Products Secondary Exited

U.S. Forestland #2 Exited

U.S. Kraft Paper Secondary Exited

U.S. Chemicals Secondary Exited

U.S. Beverage Packaging Secondary Exited

4 Nicholls 07-11

Pressure Testing the Transformation Plan

Experienced the longest and deepest recession in 60 years

Maintained strong earnings and free cash flow

Entered recovery phase without excess inventory

Recovered recession price erosion quickly

(13%)

(19%)

(11%)

CorrugatedBoxes

UncoatedFreesheet

CoatedPaperboard

Recession Impact on U. S. Industry Demand

Source: RISI, 2008 & 2009 cumulative shipment changes.

5 Nicholls 07-11

Real GDP By Geographic Region

Source: Global Insight, World Overview tables

0

5,000

10,000

15,000

20,000

25,000

North America China Europe Latin America Rest of World

2003 2010

Billion $

6 Nicholls 07-11

Global Containerboard Industry

Source: RISI Forecast Tables (World)

2003-2010

Containerboard

CAGR

-2%

0%

2%

4%

6%

8%

10%

12%

14%

16%

China Latin America Europe Rest of World North America

7 Nicholls 07-11

Global Containerboard Industry Box Demand

Source: RISI Forecast Tables (World)

0

5

10

15

20

25

30

35

40

45

North America China Europe Latin America Rest of World

2003 2010

Million

Short Tons

8 Nicholls 07-11

The Advancing China Market

9 Nicholls 07-11

Brownfield Installation of 200,000 TPY UFS Paper Machine

Region Total Capex

(USD 000’s)

Capex

Per Installed

Annual Ton

(USD)

Duration

(Conceptual

to Start-Up)

(months)

Execution

Complexity

North America 345 1,725 24-28

Brazil 270 1,350 28-32

China 150 750 18-20

No major hindrances

Moderate difficulty

10 Nicholls 07-11

Our Southern Footprint

70+ of our mills, plants and facilities

40% of our U.S. mfg footprint

30% of our global mfg footprint

20,000+ employees . . . . 1/3 of our population

Nearly $9 billion capital employed in the south

$750 million additional capital spent in 2011

11 Nicholls 07-11

373 378

390 396

405 401

380 379 380

391 391 395 390

374

345

357 361

250

275

300

325

350

375

400

425

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

2011 – Demand Still Recovering

Source: Fibre Box Association

2011 1Q Run Rate

U.S. Box Shipments BSF