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Investor Roadshow | 1Q 2015

Investor Roadshow | March 18, 2015

Forward-Looking Statements

Certain statements in these slides and made during this presentation may be considered 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 include but are not limited to: (i) the level of our

indebtedness and 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, changes in tax laws and pension and health care costs; (iv) unanticipated

expenditures related to the cost of compliance with existing and new environmental and other governmental

regulations and to actual or potential litigation; (v) whether we experience a material disruption at one of our

manufacturing facilities; (vi) risks inherent in conducting business through joint ventures; and (vii) our ability

to achieve the benefits we expect from all strategic acquisitions, divestitures and restructurings. 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 our Securities and Exchange Commission filings. We undertake

no obligation to publicly update any forward-looking statements, whether as a result of new information,

future events or otherwise.

2


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.

3


Ilim JV Information

All financial information and statistical measures regarding our 50/50 Ilim joint

venture in Russia (“Ilim”), other than historical International Paper Equity Earnings

and dividends received by International Paper, have been prepared by the

management of Ilim. Ilim management has indicated that the financial information

was prepared in accordance with International Financial Reporting Standards and

extracted from Ilim’s financial statements, but International Paper has not verified or

audited any of this information. Any projected financial information and statistical

measures reflect the current views of Ilim management and are subject to risks and

uncertainties that could cause actual results to differ materially from those

expressed or implied by such projections. See “Forward-Looking Statements.”

4

Investment Thesis

Investor Roadshow | March 18, 2015 6

IP Investment Thesis | Why IP Will Outperform

Vision

Leadership position

Attractive markets

Low-cost assets

Generating…

Strong FCF

Returns above cost-of-capital

• Global packaging and paper platforms

• Leadership positions in scale businesses

• Operational excellence

• Operate in key markets where we can grow profitably

ROIC Consistently >WACC FCF Strong Sustainable Improving Capital Allocation ✔ Value Creation ✔ Return Cash to Shareholders

Strategy Shareholder Value


Why Invest in IP?

Strong Management Team

ROIC Above WACC

with Further Margin Expansion

Strong, Healthy Balance Sheet Enables Greater

Commitment to Return Cash to Shareholders

Robust, Improving Free Cash Flow Generation

Less Cyclical Business Results

from Refocused Portfolio


Global

Economic

Recession

ROIC1 above our Cost of Capital | Increasing Shareholder Value

8

4.5%

6.3%

7.5%

6.5%

5.0%

8.1%

9.5%

8.3%

9.3% 9.2%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

ROIC WACC

2010 – 2014

8.9% (average ROIC)

1 ROIC = Operating Earnings before Interest / Average Invested Capital [Equity (adjusted to remove pension related amounts in OCI, net of tax) + Interest-Bearing Debt]


Global Economic

Recession

Strong, Sustainable Free Cash Flow

Free cash flow reflects cash provided by continuing operations for 2005 – 2011, based on data in the 10-K for each year at the time of filing.

Excludes net cash pension contributions impacting 2006, 2010, 2011, 2013 & 2014, cash flows under European accounts receivable securitization beginning in 2009

and ending in 2011, and cash received from Black Liquor Tax Credits in 2009 and 2010. 2012 excludes $120MM cash paid for Temple-Inland change-in-control

agreements, $251MM cash received from unwinding a timber monetization, $44MM cash paid for Temple-Inland pension plan contribution, and $80MM cash paid for

Guaranty Bank settlement. 2013 excludes $31MM cash paid for pension plan contribution and $30MM cash received from Guaranty Bank insurance reimbursements.

2014 excludes $353MM cash paid for pension plan contribution.

Free cash flow reflects cash provided by operations for 2012 – 2014.

Transformation:

$0.7 Billion (average)

Excluding land sales:


2010 – 2014


$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

$ B

illi

on

s

9


Delivering Results

2012 2013 2014 Near-term

Target

EBITDA ($Billion) 3.6 4.0 4.1 5.1

Free Cash Flow1,2,3 ($Billion)

1.6 1.8 2.1 2.2

ROIC 8% 9% 9% 12%

From continuing operations before special items and non-operating pension expense 1 2012 excludes $120MM cash paid for Temple-Inland change-in-control agreements, $44MM cash paid for Temple-Inland pension plan contribution, $80MM

cash paid for Guaranty Bank settlement, and $251MM cash received from unwinding a timber monetization. 2 2013 excludes $31MM cash paid for pension plan contribution and $30MM cash received from Guaranty Bank insurance reimbursements. 3 2014 excludes $353MM cash paid for pension plan contribution

Near-term Target as of Investor Day 2012 excludes similar items.

xpedx is reflected as a Discontinued Operation in all periods presented.


Long-Term Runway

Strategically

Consistent,

Accretive M&A

High Return

Capital Projects

Profitable Growth in

Target Markets

Continued Optimization

of Strong NA Platforms

Valliant PM3 Start-up


Delivering on Our Commitments

Strategically

Reinvest in Business Return Cash to

Shareholders

Maintain a Strong

Balance Sheet

Disciplined Capital Allocation Strategy

$1.05 $1.20

$1.40

$1.60

4Q11 4Q12 4Q13 4Q14

Annualized Dividend Share Buybacks

$1.5B share buyback (September 2013)

Additional $1.5B

authorization (July 2014)

Running our businesses well and generating strong FCF;

Returns consistently above cost of capital


What Makes IP Different? | Key Levers and Runway

Enterprise

• Manufacturing expertise with low-cost assets

• People capability

• EBITDA growth based on IP specific initiatives

• Ramping dividend and sizeable share repurchase program

• Attractive FCF yield

• Strong positions – best margins

• Industrial Packaging optimization

• Consumer Packaging – Increasing demand for fiber-based food packaging

• Papers – new footprint

• Fluff pulp growth

• Leveraging global platform for profitable growth

• Improvement at Brazil Industrial Packaging

• Ilim growth and margin expansion

North America Global

Business Overview


2005 - 2007 2008 - 2010

2011+

IP Transformation Timeline/Plan

Transformation Plan

Divestitures & Strategic

Reinvestment

Global Recession IP Achieves Cost of Capital Returns

NA Weyco Pkg.

Acquisition

Russia

Ilim JV

India APPM

Acquisition China

Sun JV

Brazil

VCP Land / Mill Swap

Coated Papers

Wood Products

Forestland

Kraft Paper

Chemicals

Beverage Pkg.

$11B

Asset Sales

China

SCA Pkg.

Brazil

Grupo Orsa Pkg.

NA TIN

Acquisition

Turkey

Olmuksan Pkg.

15

Franklin

Fluff Pulp

Conversion

TIN Bldg.

Products

Sale

xpedx

Spin-Off


North America

Brazil

EMEA & Russia

India

Asia

North America

Recognized Leader in Core Segments:

Corrugated Pkg. Uncoated Papers

Coated Paperboard

Emerging Markets Build Leading Positions in Fiber-based Packaging

& Paper Segments in High-Growth Markets

Positioned in attractive markets with low-cost assets that can generate strong free cash flow and returns that can exceed our cost-of-capital

$17.2B Net Sales

$1.4B Net Sales

$3.1B Net Sales

$1.7B Net Sales

$0.2B Net Sales

Full-year 2014 net sales data 1 Ilim JV total sales are not consolidated (IP owns 50% of JV)

International Paper | Global Portfolio in Packaging and Paper

$2.1B1 Ilim JV Total Sales


Repositioned & Well-Positioned | Leading Global Positions

17

1st in NORTH AMERICA in corrugated packaging & coated paperboard

2nd in NORTH AMERICA in uncoated freesheet

1st in LATIN AMERICA in uncoated freesheet

PULP

1st in RUSSIA in paper & pulp

Source: RISI


EBITDA Margin

2005 2014

Industrial Packaging

North America1 9% 24%

Brazil – 5%

Printing Papers


Europe & Russia3 16% 15%

Brazil 33% 31%

Consumer Packaging


Europe 26% 30%

Segment operating profit before special items 1 Includes Corrugated Packaging, Saturating Kraft & Bag businesses; excludes Recycling business and revenue from trade volumes 2 Includes Bleached Kraft ; reflects the Printing Papers and Pulp businesses 3 Uncoated Papers (excludes Pulp) 4 Includes Foodservice business

18

Repositioned & Well-Positioned | Primary Integrated Mill Business Margins


Global Segment Profile | 2014 EBITDA1

Printing

Papers

22%

Industrial

Packaging

69%

Consumer

Packaging

9%

North America

82% Brazil 8%

Europe 6%

Russia 3%

Asia 1%

1 From continuing operations before special items and non-operating pension expense

Does not reflect equity earnings from Ilim JV



Global Recession

NA Industrial Packaging | Track Record of Success

20

0.3 0.4 0.5

0.8

1.3 1.3 1.6

2.0

2.5 2.7

9%

13% 15% 15%

19% 18%

20% 19%

22% 24%

0%

5%

10%

15%

20%

25%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Bu

sin

ess

EB

ITD

A ($

B)

Weyco Packaging

Acquisition & Integration

TIN Acquisition

& Integration EBITDA %

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

Excludes the Recycling Business and revenue from trade volumes

Growth and Margin Expansion through Strategic Acquisitions

and Successful Integrations


$1,577

$1,831 $2,064

2012 2013 2014

FCF1 ($MM)

Full-Year 2014 Results

1 See slide #75 for a reconciliation of cash provided by operations to free cash flow

21

Delivered record cash from operations and

free cash flow of $2.1B

N.A. Industrial Packaging achieved EBITDA

of $2.7B and 24% margins

ROIC above the cost of capital for fifth

consecutive year

Margin expansion across key businesses

Successful debt restructuring program;

annualized interest savings of ~$40MM

Increased dividend by 14% to $1.60/share

Share buyback program purchases of

~ $1B in 2014

Courtland closure completed

Completed xpedx spin-off; $400MM received

$470MM operational EBITDA up 126% at

Ilim JV; $56MM dividend to IP


Full-Year 2014 Financial Results

$ Billion

(Except as noted) 2012 2013 2014

Sales $21.9 $23.5 $23.6

EBIT1 $2.1 $2.5 $2.7

EPS2 $2.51 $3.06 $3.00

EPS impact of Ilim F/X3 – IP Share

$0.04 ($0.07) ($0.63)

EBITDA1 $3.6 $4.0 $4.1

EBITDA Margin 16.5% 17.2% 17.5%

FCF4 $1.6 $1.8 $2.1

Year-End Debt $10.1 $9.5 $9.4

Cash Balance $1.3 $1.8 $1.9

1 From continuing operations before special items and non-operating pension expense 2 EPS based on Operating Earnings (defined as Net Earnings (GAAP) from continuing operations before special items and non-operating pension expense) 3 Represents F/X impact primarily related to Ilim JV USD-denominated net debt (balance of ~$1.3B at year end 2014) 4 See slide #75 for a reconciliation of cash provided by operations to free cash flow

xpedx is reflected as a Discontinued Operation in all periods presented

22

$3,605

$4,035 $4,143

2012 2013 2014

EBITDA1 ($MM)


IP’s Balanced Use of Cash | Increasing Shareholder Value

Return Cash to Shareowners

14% Dividend increase to $1.60/share

Share Buyback Program

• $1.5B program authorized September 2013

• Additional $1.5B program authorized July

2014

Selective Reinvestment

Brazil – Grupo Orsa, acquired remaining shares

Use of Cash ($MM)

~ $600

~ $1,000

~ $450

~ $1,400

~ $135

Debt Reduction & Pension Contribution

2014 Cash from Operations

$3.4 B

Capital Spending xpedx

Spin-off

$0.4 B

23


Fourth Quarter 2014 Results

4Q13 3Q14 4Q14

Sales ($B) $5.8 $6.1 $5.9

EBIT1 ($MM) $661 $835 $657

EPS2 $0.81 $0.95 $0.53

EPS impact of Ilim F/X3 – IP Share

($0.01) ($0.19) ($0.40)

EBITDA1 ($MM) $1,028 $1,193 $1,003

EBITDA Margin1 17.6% 19.7% 16.9%

Free Cash Flow4

($MM) $598 $696 $739

1 From continuing operations before special items and non-operating pension expense 2 EPS based on Operating Earnings (defined as Net Earnings (GAAP) from continuing operations before special items and non-operating pension expense) 3 Represents F/X impact primarily related to Ilim JV USD-denominated net debt (balance of ~$1.3B at year end 2014) 4 See slide #75 for a reconciliation of cash provided by operations to free cash flow


24

Record FCF quarter, strong

working capital management

Solid performance across key

businesses

Benefit of stronger demand for

N.A. box muted by weak global

conditions

Input cost headwinds began to

moderate in quarter

$170MM of shares repurchased

in quarter, bringing total since

September 2013 to $1.44B

Strong operating results at Ilim;

unfavorable F/X impact of

($0.40) EPS


Summary

Runway from current initiatives

(NA and Global)

Strong FCF and Healthy Balance Sheet drives

increased Capital Allocation opportunities

Pipeline of High Return Capital Projects

Less Cyclical Earnings with Higher Returns

Progress toward near-term goals of

$5.1B EBITDA and $2.2B FCF

Appendix


Appendix - Table of Contents

Industrial Packaging……………….……………………………………..28-39

Consumer Packaging……….….………………………….……………..40-47

Printing Papers & Pulp..……….………………………………………...48-66

Ilim Group.…………………………….……………………………………67-70

Financial & Other………………….……………………………………....71-83

Contact Information……………….………………………………………….84

Slides


North American Containerboard | Supply Positions

Stone 13%

Smurfit 7%

GP 9%

WY 7%

IP 7% TIN 7%

Others 50%

Source: SEC Filings, RISI Capacity Reports

1995 Producer Position

Top 5 = 43%

2014 Producer Position

Top 5 = 75%

IP 32%

RKT 20%

GP 10%

PCA 9%

Kapstone 4%

Others 25%

28


IP North American Industrial Packaging | Balanced Global Strategy

IP’s market access provides choices for maximizing value

NA Mill System Capacity ~13 Million Tons

IP Box Plants ~80%

Open Market ~20%

U.S. ~93%

Non-U.S. ~7%

Export ~55%

Domestic ~45%

EMEA

~40% Lat Am ~40%

Asia ~20%

1 Includes Saturating Kraft /Gypsum Liner

2 Estimated 2015 outside purchases from divested mills and others

Source: IP analysis

Outside Purchases2

~350M tons

Containerboard ~12.6 Million Tons

Other Uses1 ~0.4 Million Tons


Global Containerboard Industry | Total Containerboard Trade Flows

Net Import Locations Net Export Locations Source: RISI, PPPC, IP analysis

Estimated 2014 Global Demand = 168MM tons

Import

(3.2)MM

Import

(1.2)MM

5.2% Export

0.2 MM

15.9% Export

5.0 MM

8.3% Export

0.3 MM

21.8% Export

0.4 MM

Import

(1.0)MM

30


0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

Th

ou

sa

nd

To

ns

Va

llia

nt1

Ma

nsfi

eld

Hen

de

rso

n

Xa

lap

a

Pra

ttvil

le

Sa

va

nn

ah

New

po

rt

Sp

rin

gfi

eld

Ma

ys

vil

le

Vic

ks

bu

rg

Pe

nsa

co

la

Ce

da

r

Rap

ids

Cam

pti

Ro

me

Pin

e H

ill

Bo

ga

lus

a

Ora

ng

e

31

IP NA Containerboard Mill System | 13 Million Tons Capacity

1 Valliant includes full-year machine capacity of PM3, scheduled to go-live 2Q15

Source: IP analysis, chart includes Saturating Kraft & Gypsum liner


$0

$100

$200

$300

$400

$500

$600

$700

$800

$900

$1,000

0 5,000 10,000 15,000 20,000 25,000 30,000

Ma

nu

fac

turi

ng

Co

sts

($

/To

n)

Cumulative Annual Capacity (Thousand Tons)

Cash Costs + Delivery to Chicago

Rome 2

Global Cost Curve | 85% of Capacity in 1st & 2nd Cost Quartiles

Source: Poyry 2014 Costrac model at 3rd Quarter, 2014, prices and exchange rates 42# Global Kraft Linerboard cash cost per ton delivered to Chicago

Prattville 1

Orange 2

Prattville 2

Mansfield 3

Cedar

Rapids 2

Savannah 8

Valliant 1

Savannah 6 Campti 2

Mansfield 1

Springfield 2

Vicksburg 6

Rome 1

Campti 1

Pensacola 5

Bogalusa 7

Maysville 1

Pine Hill 1

Henderson 1

Bogalusa 8

32

Orange 1


NA Industrial Packaging Relative EBITDA Margins

1 Reflects Company’s change in accounting method beginning in 2014

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

Excludes the Recycling Business and revenue from trade volumes

Competitor EBITDA margin estimates obtained from public filings and IP analysis

23.0% 21.9%

17.0%

25.5%

21.3% 20.8% 22.7% 21.4%

17.7%

IP PCA RockTenn

4Q13 3Q14 4Q14

23.6%

21.3%

17.8%

2014

2014

2014

33

1


Note: IP Mix, 2013. Industry Mix, 2012.

Source: IP Analysis

IP Well-Positioned in Attractive Customer Segments

58% 27%

15%

IP Box Shipments by Segment

34

Market Segment IP

Mix

Industry

Mix

Food & Beverage 58% 47%

Processed Food

Protein

Produce

Beverage

Other Non-Durable Goods 27% 36%

Paper Products

Chemicals & Pharma

Other Non-Durables

Durable Goods & Distribution 15% 16%

Building Materials

Other Durables

Shipping & Distribution


U.S. Containerboard | Industry Statistics

200

300

400

500

600

700

800

$/short ton

Containerboard Pricing

Linerboard (List Price) Medium (List Price) Linerboard (OMP) Medium (OMP)

Source: RISI

As of Jan 2015 RISI only reports OMP = Open Market Price

35

$200

$300

$400

$500

$600

$700

$800

Jan-90 Jan-95 Jan-00 Jan-05 Jan-10 Jan-15


Economic indicators and US box demand

Source: IHS Economics & Country Risk, US Short Term Forecast, Jan 2015; RISI North America Containerboard 5-year Forecast, November 2014

70

80

90

100

110

120

130

2001

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

2010

20

11

20

12

20

13

20

14

Indexed 1

00 =

2001

US Box Shipments US Nondurable Industrial Production US GDP US Industrial Production


373 378

390 396

405 401

380 379 380

391 391 395 390

374

345

357 359 360 360 364

369 376 379

387

397

225

250

275

300

325

350

375

400

425

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

BS

F

RISI Forecast

U.S. Corrugated Packaging | Forecast

37

Historical Data Source: Fibre Box Association

2015-2019: 1.8% CAGR (RISI – March 2015 5-yr forecast)


Wood / OCC Fiber Breakeven

25

50

75

100

125

150

175

200

225

25 30 35 40 45 50 55 60 65

OCC Cost Delivered 1

$/ton

Wood Chip Cost Delivered 2

$/ton

Wood Advantaged

OCC Advantaged

2012

2Q14 1Q14

3Q14

4Q14

38

2013

1 RISI national average OCC price, adjusted for delivery 2 Forest2Market chip equivalent basis index price


Brazil Industrial Packaging | Overview

39

Paulinia Mill

Manaus Box Plant

Box plant

Mill

Rio Verde Box Plant

Paulinia Box Plant Suzano Box Plant Franco da Rocha Mill

Nova Campina Mill

2014 Sales of US$349 Million

Three Containerboard Mills

Four Box Plants

~350 Thousand Tons of Containerboard

Capacity

Sustainable Fiber Supply

Corrugated Supply Position ~7%

Klabin 16%

MWV 8%

IP 7%

Irani 7%

Trombini 6%

Penha 4% INPA

4%

Others 49%

3.7MM

tons

Source: ABPO


IP Global Coated Paperboard Footprint | Total of 3.5 Million Tons

Coated paperboard mill

North America

1.6 Million Tons

Europe/Russia

370,000 Tons

Asia Sun Paper JV

1.5 Million Tons

40


25%

38%

51%

4%

24%

11%

27%

9%

14% 22%

10%

60%

19%

12%

5% 5%

15%

8%

21% 5%

3% 12%

1%

Folding 2.2 MM tons

Cupstock 1.0 MM tons

Coated Bristols

0.4 MM tons

Liquid 1.4 MM tons

Supply Position by Segment

North American Solid Bleached Sulphate Capacity

Folding includes tobacco; Liquid Packaging includes Aseptic

Source: 2014 RISI Capacity (includes Ctd. Bristols); AF&PA; IP Analysis

CAGR Flat CAGR +1.6% CAGR (5%) CAGR (1%)

IP 25%

MWV 23%

GP 13%

Rank Group 12%

Clearwater 12%

RKT 6%

Weyco 4%

Coated Paperboard 2014 Supply Position (SBS)

41

6.2MM

Tons


North American Consumer Packaging at a Glance

• 2014 Sales: $1.53 B

• 1.5 MM SBS sales tons

• 84% external

• 2014 Sales: $0.7 B

• Consumes over 0.2 MM tons

of IP’s Coated Paperboard

• Hot and cold cups

• Food buckets & containers

• Lids

Specialty Coffee

Theater, Convenience,

Hospitality

Folding Carton

550m tons

Cupstock 400m tons

NA Consumer Packaging Business

Coated Paperboard

Foodservice Business

Quick Service

Commercial Printing

240m tons

Coated Paperboard mill Foodservice plant

42


$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

0 2,500 5,000 7,500 10,000 12,500 15,000

Man

ufa

ctu

rin

g C

osts

$/T

on

Cumulative Annual Capacity (Thousand Tons)

Cash + Delivery to Chicago

Coated Paperboard Global Cost Curve | IP NA Capacity in 1st Quartile

Based on Poyry’s 2014 CostTrac model at 3rd Quarter, 2014, Prices and Exchange Rates. 57# Folding Carton Board

Augusta 3 Texarkana 1

Augusta 1

Riegelwood 15

43

Riegelwood 18


NA Coated Paperboard Historical Financials

219 200 187 211

251

358

254 203 205

15%

13%

11%

15% 16%

22%

17%

13% 13%

0%

5%

10%

15%

20%

25%

0

50

100

150

200

250

300

350

400

2006 2007 2008 2009 2010 2011 2012 2013 2014

EBITDA

$ MM

EBITDA

%

Segment operating profit before special items

44


NA Consumer Packaging Relative EBITDA Margins

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

Competitor adjusted EBITDA margins obtained from public filings and IP analysis; reflects Food & Beverage segment

8.8%

11.6%

18.6%

15.9% 14.9%

12.9%

IP MWV

4Q13 3Q14 4Q14

45

13.6% 13.3%

2014 2014


U.S. Coated Paperboard | Industry Statistics

$450

$550

$650

$750

$850

$950

$1,050

$1,150

$1,250

$/short ton Folding Cartonboard Prices

Bleached Unbleached Recycled

Source: RISI

46


Paper Cups Replacing Foam | Environmental Benefits of Paper Driving Demand

47

Every 1 Billion Foam & Plastic Cups

Converted to Paper = 15 – 25 Thousand Tons of

Coated Paperboard Demand

Foam 31

Plastic 21

Paper Hot 18

Paper Cold

38

2014 U.S. Cup Demand (Billions of Units)

Source: Technomic 2012 Disposables Study, RISI, AF&PA, IP analysis

Hold&Go®

Individually

Wrapped Cup

ecotainer®


IP Global Papers Footprint | Total of 4.4 Million Tons1

1 Does not include llim JV

Brazil

1.1 MM

N. America

2.0 MM

Europe

0.7 MM

Russia

0.4 MM

Uncoated paper mill

India

0.2 MM

ILIM

0.3 MM


Printing Papers | 2014 vs. 2013 Change in Segment Operating Profit1 ($MM)

1Before special items

Europe

$27

North America

Pulp

$55

North America

Papers

$2

Brazil

$1

India

$10


Domtar 36%

IP 20%

PCA 10%

GP 10%

Other 24%

GP 15%

IP 13%

Champion 10%

Boise 10% Willamette

9%

WY 9%

Union Camp

9%

Other 25%

1998 Producer Position Top 2 = 28%

Top 4 = 48%

2015 Producer Position Top 2 = 56%

Top 3 = 66%

Note: 2015 producer position adjusted for GP Crossett, Boise International Falls, Lincoln Paper, and IP Courtland.

1998, 2015 Source: Poyry Consulting, Fisher International, IP analysis

NA Uncoated Freesheet Supply | Supply Positions

50


0%

20%

40%

60%

80%

100%

Riverdale Ticonderoga Eastover Georgetown Franklin Riegelwood Pensacola

% G

rad

e / M

ix

Pulp Non UFS Uncoated Freesheet Coated Paperboard Containerboard 1

Printing Papers & Pulp Mill System | 3.4MM Tons Capacity

1 Non UFS includes Kraft Bag and Uncoated Bristols

Source: IP analysis

Paper

(M Tons) 650 300 730 320 0 0 0

Pulp

(M Tons) 0 0 110 360 320 400 190

Tenant Mills

Cap

ac

ity

51


Uncoated Freesheet Global Cost Curve | 95% of Capacity in 1st & 2nd Cost Quartiles

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

0 2,500 5,000 7,500 10,000 12,500 15,000 17,500 20,000 22,500 25,000 27,500 30,000 32,500 35,000

Ma

nu

fac

turi

ng

Co

sts

$/T

on

Cumulative Capacity (Thousand Tons)

Cash + Delivery to Chicago

Ticonderoga 7

Based on Poyry’s 2014 CostTrac model at 3rd Quarter, 2014, Prices and Exchange Rates.

Eastover 2

Eastover 1

Riverdale 15

Riverdale 16

Georgetown 1

Ticonderoga 8

50# Roll Offset

52


317

575

657 657

513 539

598

499

310 253

10%

16%

19% 19% 18%

20%

22%

18%

12% 12%

0%

5%

10%

15%

20%

25%

0

200

400

600

800

1,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

EBITDA %

EBITDA $ MM Paper Only

North American Printing Papers | Attractive Margins & Cash Flow

Tons (MM)

4.0 4.1 3.9 3.5 3.0 2.8 2.7 2.7 2.6 2.0


53


N.A. Printing Papers Relative EBITDA Margins

12.8% 13.9%

17.9%

14.5% 14.4%

15.8%

IP Domtar

4Q13 3Q14 4Q14

IP EBITDA margins based on operating profit from continuing operations before special items

Competitor EBITDA margin estimates obtained from public filings and IP analysis

EBITDA margins reflect the Printing Papers and Pulp businesses

12.8%

2014

2014

14.0%

54


U.S. Uncoated Freesheet Demand

Historical Data Source: AF&PA

2015 – 2019: -2.6% CAGR (RISI Feb 2015 5-yr Forecast)

11.6

12.2 12.4

13.3 13.0 13.2

13.7 13.6 14.0 13.9

12.6 12.4 12.3 12.6

12.0 12.3

11.9

10.9

9.7 9.6 9.3

8.9 8.8 8.3 8.1 7.9

7.6 7.4 7.3

91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

RISI Forecast

Mil

lio

n T

on

s

UFS Demand and RISI Forecast

55


U.S. Uncoated Freesheet | Industry Statistics

$500

$600

$700

$800

$900

$1,000

$1,100

$1,200

$500

$600

$700

$800

$900

$1,000

$1,100

$1,200

$/short ton

UFS Pricing Trends

RISI 20# Cutsize RISI 50# Offset

Source: RISI

56


35%

30%

6%

4%

4%

3%

18%

Latin American Uncoated Freesheet Market

0

50

0

1,0

00

1,5

00

2,0

00

2,5

00

Brazil

Argentina

Colombia

Chile

Peru

Venezuela

Other …

Thousand Metric Tonnes

Demand

Capacity

Latin America is a Net Exporter

Demand Capacity @

91% Op. Rate* Net Exports

2.7 MM 2.8 MM 0.1 MM * Excluding Mexico

Supply & Demand

57

Source: Bracelpa/ AFCP / RISI/ Fisher/ IP Estimates; Units shown in metric tonnes

Top 6 Producers > 80%

Others

Smurfit

Kappa

Ledesma

Celulosa

Argentina

Propal

IP

Suzano


IP do Brasil | At a Glance

Mogi Guacu Luiz Antonio Três Lagoas IP Brazil

Paper

Machines 4 2 1 7

UFS

Capacity (Thousand MT)

424 367 234 1,025

Market Pulp (Thousand MT)

8 103 0 111

58

Units shown in metric tonnes


IP do Brasil | Historical Financials

59

280

320

230

300 320

293

334

33% 33%

24%

27% 27% 26%

31%

0%

5%

10%

15%

20%

25%

30%

35%

0

50

100

150

200

250

300

350

400

450

2007 2008 2009 2010 2011 2012 2013

EBITDA

US$ MM EBITDA

Margin


Tons (MM)

0.9 1.0 1.2 1.2 1.3 1.3 1.3


Margin Improvement From Geography Shift

60

Europe & Others Other Latin America Brazil

~3.5X

~1.8X

Improve Geographic Mix from 75% to 100% in Latin America

2013

U.S. $

EBITDA / ton Avg FX 2.15

U.S. $132 U.S. $252 U.S. $455


IP India Printing Papers | APPM

Hyderabad

Rajahmundry

Kadiyam

Corporate Office

UFS Paper Mill

IP owns 75% of Andhra Pradesh

Paper Mills (APPM); Remaining

25% shares listed in India

Two uncoated freesheet paper

mills with combined capacity of

~250,000 tons

Significant and fast growing

emerging market

Located in the heart of India’s fiber

basket

Successful farm forestry program

IP leaders on ground with APPM

management team to assist with

optimization of assets

Platform for potential growth in

paper and packaging


Global Market Pulp | Bleached Softwood Pulp

North America North America

Latin America Latin America

Western Europe Western Europe

Eastern Europe Eastern Europe

Asia Asia

Rest of World Rest of World

0

5

10

15

20

25

30

2014 2018

Mil

lio

n M

etr

ic T

on

ne

s

2014 – 2018

CAGR

0.9%

3.0%

1.4%

(1.6%)

(1.0%)

0.8%

Source: PPPC; Units shown in metric tonnes

Global Demand = 24.0 → 24.9MM mtpy

CAGR = 0.9%

62


Global Market Pulp | Fluff Pulp Demand

North America North America

Latin America Latin America

Western Europe Western Europe

Eastern Europe Eastern Europe

Asia

Asia

Other

Other

0

1

2

3

4

5

6

7

2014 2018

Mil

lio

n M

etr

ic T

on

ne

s

2014 – 2018

CAGR

4.3%

5.2%

2.5%

1.6%

1.2%

2.4%

Source: IP analysis; Units shown in metric tonnes

Global Demand = 5.2 → 5.9MM mtpy

CAGR = 3.4%

63


Pulp mill

64

IP Global Pulp Capacity | Total of 3.2 Million Metric Tonnes

Ilim JV

1.6 MM

Europe / Russia

0.3 MM N. America

1.2 MM

L. America

0.1 MM


Global Fluff Pulp Industry | Trade Flows – 2014

Net Import Locations Net Export Locations

Global Demand = 5.2MM mtpy

Import

(0.9)MM

86.0% Export

4.3 MM

Import

(0.4)MM

Import

(0.6)MM

Import

(2.1)MM

Source: PPPC, IP Analysis; Units shown in metric tonnes


Pulp | Industry Statistics

0

200

400

600

800

1,000

1,200

USD/admt Global Pulp Prices

NBSK (dne) BEK (dne) Fluff (dne)

Source: RISI

Global pulp prices delivered to Northern Europe; Units shown in metric tonnes

66


IP Russia & Ilim JV | Manufacturing Overview

Ilim JV Production1 2013 Post-project ,

Fully Ramped

Bratsk Mill

Total 740 1,150

• Softwood bleached pulp 300 670

• Hardwood bleached pulp 250 220

• KLB 190 260

Koryazhma Mill

Total 1,245 1,335

• PM7 paper 100 165

• PM7 CFS 0 80

• Pulp (BHKP, UKP) 365 315

• KLB and others 780 775

Ust-Ilimsk Mill

Pulp (BSKP, UKP) Total 830

IP Russia Production1

Svetogorsk 2013

Total 710

• Coated Paperboard 105

• Pulp (soft/hardwood) 190

• Fine Papers 415

1 Volumes shown in thousand short tons

Koryazhma

Bratsk Ust-Ilimsk

China

Kazakhstan Mongolia

Svetogorsk

Well-Positioned to Serve Target Markets

67


Ilim Joint Venture | Well-Positioned to Serve Growing Pulp Markets

China will account

for 75% of world’s

incremental market pulp

growth

1st quartile cost positions

with favorable access to

China NBSK market

Access to significant

Russian wood basket

0

10

20

30

40

50

60

70

80

1995 2000 2005 2010 2011 2015 2020 2025

Mil

lio

n M

etr

ic T

on

nes

Western Europe

North America

China

Eastern Europe

Forecast1

2011-2025

China

14.7 MM

Rest of

World

4.8 MM

Units shown in metric tonnes 1 Source: Poyry World Fibre Outlook 2012 2 Based on Poyry’s 2014 CostTrac model at 3rd Quarter, 2014, prices and exchange rates.

$0

$200

$400

$600

$800

$1,000

0 5,000 10,000 15,000 20,000

Man

ufa

ctu

rin

g C

osts

($

/Me

tric

To

nn

e)

Cumulative Capacity (Thousand Metric Tonnes)

Cash + Delivery to Beijing

Ust-Ilimsk

Bratsk

(Pre-Project)

Bratsk

2


2009 2010 2011 2012 2013 2014

Sales Volume (Million short tons) 2.6 2.8 2.8 2.9 2.7 3.2

Sales ($B) 1.3 1.9 2.2 2.0 1.9 2.1

Capital Employed ($B) 1.2 1.2 1.6 2.1 2.4 1.4

Debt ($B) 0.4 0.5 0.9 1.2 1.5 1.4

Operating EBITDA ($MM) 197 516 591 291 208 470

F/X Gain (loss)1 (35) 12 (60) 39 (80) (684)

EBITDA ($MM) 163 528 531 330 128 (214)

EBITDA Margin 12% 28% 24% 17% 7% (10%)

Depreciation ($MM) 120 121 124 134 177 193

EBIT ($MM) 43 407 406 196 (49) (408)

Interest Expense ($MM) 28 18 7 6 39 69

Net Income (loss) ($MM) (19) 266 299 132 (72) (362)

IP Equity Earnings (loss) ($MM) (27) 103 134 56 (46) (194)

Dividends (to IP) 2 ($MM) 50 34 85 0 0 56

Ilim JV results are IFRS basis; IP Equity Earnings (loss) on US GAAP basis 1 Represents F/X impact primarily related to Ilim JV USD-denominated net debt (balance of ~$1.3B at year end 2014) 2 In 2008, IP received dividends of $67MM

69

Ilim Joint Venture | Full Year Financials


Ilim Joint Venture | As Shared on January 28th Earnings Call

$ Million 4Q13 3Q14 4Q14 2013 2014

Sales Volume (thousand tons)

677 766 859 2,679 3,188

Sales $482 $520 $520 $1,897 $2,139

Operational EBITDA1 $61 $100 $143 $208 $470

F/X (Impact of USD Net Debt2) ($15) ($210) ($432) ($80) ($684)

IP Equity Earnings(Loss)3 ($12) ($70) ($136) ($46) ($194)

Continued improvement in operational EBITDA and record volumes

following major JV-funded capital projects and efficiency improvements

4Q14 operational EBITDA run rate approaching $600MM target

Significant unfavorable non-cash F/X impact on debt; however, ruble

devaluation has positioned JV as lowest cost NBSK in the world

70

Ilim JV results are on an IFRS basis with the exception of IP Equity Earnings which is US GAAP 1 Before F/X impact on USD-denominated net debt 2 4Q14 mainly driven by Ilim JV USD-denominated net debt balance of ~$1.3B; Ilim Group’s functional currency is the Ruble (RUB); Non-functional-denominated

currency balances are measured monthly using the month-end exchange rate

3 IP Equity Earnings(Loss) for 4Q13, 3Q14, and 4Q14 include after-tax f/x losses (primarily on USD-denominated net debt) of $(6)MM, $(82)MM, and $(171)MM,

respectively; FY13 and FY14 include after-tax f/x losses of $(32)MM and $(269)MM respectively (US GAAP)


Operating Business EPS

2005-2006 as originally reported

2007-2011 adjusted for elimination of the Ilim JV reporting lag

2005-2010 Net Earnings from continuing operations and before special items; 2010 onward reflects Operating Earnings

xpedx is reflected as a Discontinued Operation from 2010 forward.

71

.36 .31

.29

.12 .12

.35

.40

.47 .45

.52

.57

.73

.45 .49

.41

.15

.07

.27

.38

.22

.05

.44

.85

.72 .76 .77 .78

.67

.58

.49

.77

.66 .64 .61

1.01

.81

.60

.93 .95

.53

.42

.08

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

2005 2006 2007 2010 2008

Impact of Mineral

Rights Gain

2009

.83

2011

.93

Final Land Sale

2012 2013 2014


$ Million 2012 4Q13 2013 1Q14 2Q14 3Q14 4Q14 2014

Cash Provided by Operations

$2,9601 $1,037 $3,0292 $5293 $7344 $1,0235 $1,144 $3,4306

Less Capital Investment

($1,383) ($439) ($1,198) ($277) ($357) ($327) ($405) ($1,366)

Free Cash Flow $1,577 $598 $1,831 $252 $377 $696 $739 $2,064

Free Cash Flow

1 Excludes $120MM cash paid for Temple-Inland change-in-control agreements, $251MM cash received from unwinding a timber monetization, $44MM cash paid for

Temple-Inland pension plan contribution, and $80MM cash paid for Guaranty Bank settlement. 2 Excludes $31MM cash paid for pension plan contribution and $30MM cash received from Guaranty Bank insurance reimbursements 3 Excludes $58MM cash paid for pension plan contribution 4 Excludes $205MM cash paid for pension plan contribution 5 Excludes $90MM cash paid for pension plan contribution 6 Excludes $353MM cash paid for pension plan contribution

72


Balance Sheet | Debt Coverage $ B

illio

n

$4.1 Pension Gap

3.8x

2.9x

$10.1 Balance

Sheet

Debt

$9.5 Balance

Sheet

Debt

$1.2 Op. Lease Adj. $1.2 Op. Lease Adj.

$3.9 Pension Gap

[2.7x]1 [2.3x]2

2013 2012 2014 Adjusted Debt reflects gross balance sheet debt plus pension gap and operating leases (Moody’s Methodology)

Adjusted EBITDA of $4.4B incorporates pension and lease expense adjustments (Moody’s Methodology) 1 Simple Debt Coverage: Balance Sheet Debt / 2012 Reported EBITDA of $3.7B 2 Simple Debt Coverage: Balance Sheet Debt / 2013 Reported EBITDA of $4.1B 3 Simple Debt Coverage: Balance Sheet Debt / 2014 Reported EBITDA of $4.1B 4 AA Corporate Bond Rate

Moody’s Target: Adjusted Debt < 3X Adjusted EBITDA

Pension Gap increased by $1.7B

primarily due to discount rate4

decrease and updated mortality

assumptions

Significant debt restructuring in

mid-2014

Bond issue and tender offer

successfully reduced 2018

and 2019 debt towers

Lowered annualized interest

expense ~$40MM

Made ~$350MM pension

contribution in 2014

$1.9B cash balance at year end

$9.4 Balance

Sheet

Debt

[2.3x]3

$1.1 Op. Lease Adj.

$2.2 Pension Gap

3.3x


25%

50%

75%

100%

125%

$0

$300

$600

$900

$1,200

$1,500

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E

Maintenance Regulatory Strategic Cost Reduction % of Depreciation

$ Million % of

Depreciation

Reflects continuing operations

Capital Spending

74

~$1,500


Pension Plan Update | As of December 31, 2014

• No contribution 1960-2005;

$2.6B contribution 2006-2013

• $353MM contribution made

in 2014

• Pension contribution of

~$100MM in 2015

($0.2)

($3.2)

($2.8)

($1.5)

($2.4)

($2.7)

($4.1)

($2.2)

($3.9)

Billio

n

Year-End Funded Status1

75

1 Reflects status as of December 31


Pension Plan Update1 | As of December 31, 2014

231 195

342

545

387

488

$0

$150

$300

$450

$600

2010 2011 2012 2013 2014 2015E

Millio

n

Annual Pension Expense2 Key Variables 2013 2014 2015E

Assumed Rate of Return

8.0% 7.6% 7.8%

Discount Rate 4.1% 4.9% 4.1%

Average Annualized Returns3

2014 6.4%

Past Five Years 10.5%

Past Ten Years 8.2%

Portfolio Asset Allocation at 12-31-14

Target Actual

Equity 42% - 53% 47%

Bonds 30% - 40% 33%

Real Estate 6% – 12% 10%

Other 3% - 15% 10%

1 2013 and onward include Temple-Inland pension plan 2 Non-cash expense for U.S. plans only 3 Through December 2014

Pension expense reflects service cost, interest cost, amortization of actuarial losses and expected return on plan assets

For the past 10 years, IP Pension Plan performance ranked in the top decile of the State Street Bank Corporate and Public Master Trust Universe of 239 observations

76


Maintenance Outages Expenses | 2014

$ Million 1Q14 2Q14 3Q14 4Q14 2014

Industrial Packaging $69 $91 $26 $48 $234

North America 69 91 23 48 231

Brazil 0 0 3 0 3

Printing Papers Total $31 $60 $16 $43 $150


Europe 1 24 1 0 26

Brazil 0 1 0 11 12

India 0 0 1 0 1

Consumer Packaging $20 $26 $1 $11 $58


Europe 0 7 0 0 7

Total Impact $120 $177 $43 $102 $442

77


Maintenance Outages Expenses | 2015

$ Million 1Q15F 2Q15F 3Q15F 4Q15F 2015F

Industrial Packaging $66 $99 $37 $67 $269


Brazil 0 3 0 0 3

Printing Papers Total $35 $67 $32 $46 $180


Europe 0 23 17 0 40

Brazil 6 1 0 7 14

India 0 0 1 0 1

Consumer Packaging $15 $17 $11 $17 $60


Europe 0 5 7 0 12

Total Impact $116 $183 $80 $130 $509

78


127 167

99 88 46

118 123

48

126

49 30

1 70

276

60 58

69

53

Maintenance Market

Coated Paperboard1

22 13 1

24 24 20

7

27

24

41

38

18

53

19

58

16 20 1

31

North American Downtime

8 14

21 20 2

15 19

12 0

Containerboard Uncoated Papers2

Market Pulp

Th

ou

sa

nd

To

ns

Th

ou

sa

nd

To

ns

Th

ou

sa

nd

To

ns

Th

ou

sa

nd

To

ns

1Augusta PM#2 was permanently shutdown in March 2013 (36000 tons / quarter) 2Courtland shutdown of two machines in 4Q13; shutdown complete in February 2014

179

49

176

79

197

100

158

322

178 181

117

0

48


Total Cash Cost Components | 4Q14 YTD

Fiber 31%

Freight 16%

Materials 14%

Labor 12%

Energy 10%

Overhead 9%

Chemicals 8%

80

North American mills only


2007 2008 2009 2010 2011 90

95

100

105

110

115

120

125

130

2012 2013 2014

U.S. Mill Wood Delivered Cost Trend | Flat vs. 3Q14 Average Cost

Cost Indexed to January 2007 values

81


2007 2008 2009 2010 2011 40

60

80

100

120

140

160

180

200

2012 2013 2014

Cost Indexed to January 2007 values

U.S. OCC Delivered Cost Trend | 4% Decrease vs. 3Q14 Average Cost

82


2015 Global Consumption | Annual Purchase Estimates for Key Inputs

Commodity U. S. Non – U. S.

Energy

Natural Gas (MM BTUs) 65,000,000 11,000,000

Fuel Oil (Barrels) 650,000 380,000

Coal (Tons) 415,000 640,000

Fiber Wood (Tons) 52,000,000 8,000,000

Old Corrugated Containers / DLK (Tons) 4,600,000 630,000

Chemicals

Caustic Soda (Tons) 350,000 80,000

Starch (Tons) 390,000 100,000

Sodium Chlorate (Tons) 160,000 57,000

LD Polyethylene (Tons) 37,000 -

Latex (Tons) 22,000 11,000

Does not include Asia or volume consumed by joint ventures (Sun JV, Ilim JV) Estimates are based on normal operations and may be impacted by downtime Excludes annual consumption related to Courtland operations terminated in 1Q14

83


Investor Relations | Contact Information

Jay Royalty • Vice President, Investor Relations

901-419-1731

[email protected]

Michele Vargas • Director, Investor Relations

901-419-7287

[email protected]

Betty Groom • Financial & Administrative Analyst

901-419-4250

[email protected]

84

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