investor roadshow | 1q 2016s1.q4cdn.com/597881801/files/doc_downloads/roadshow/2016/... · 2016. 3....

Investor Roadshow | 1Q 2016

Investor Roadshow | March 17, 2016 2

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 changes 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; (vii) the execution

of a definitive agreement to sell our corrugated box business in China and South East Asia, and the

successful closing of the transaction within the estimated timeframe; and (viii) 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.


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.


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.”

Investment Thesis


IP Investment Thesis | Why IP Will Outperform

Vision

Leadership position

Advantaged markets

Low-cost assets

Generating…

Strong FCF

Returns above cost-of-capital

• Global packaging and paper platforms

• Advantaged positions in scale businesses

• Operational excellence

• Operate in key markets where we can grow profitably

ROIC Consistently >WACC FCF Strong Sustainable Improving Capital Allocation

✔ Create Value

✔ 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

Investor Roadshow | March 17, 2016

Capital Allocation | IP’s Balanced Use of Cash

8

Systematically Return Cash to Shareholders

Trough-Tested Sustainable Dividend

Opportunistic Share Repurchases

Cash From

Operations Maintain Strong

Balance Sheet

& Credit Rating

Appropriate Liquidity & Debt Coverage

Prudent Contributions to Pension Plan

Selective Reinvestment

Value Creating-Healthy Spread

Above Cost of Capital

Improving Competitive Position

Effective Capital Spending

Maintenance & Regulatory Needs

High Return, Cost Reduction Projects

8


Delivering on Our Commitments For Value Creation

Strategically

Reinvest in Business Return Cash to

Shareholders

Maintain Strong

Balance Sheet

Robust Capital Allocation Strategy

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

$1.05 $1.20

$1.40

$1.60 $1.76

4Q11 4Q12 4Q13 4Q14 4Q15


Global

Economic

Recession

10

Expanded Spread of ROIC1 Above Cost of Capital | Increasing Shareholder Value

4.5%

6.3%

7.5%

6.5%

5.0%

8.1%

9.5%

8.3%

9.3% 9.2%

11.0%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

5-Year Average

9.5%

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

WACC: 8%


Global Economic

Recession

$1.7 $1.6

$1.8

$2.1

$1.8

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

$ B

illi

on

s

11

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. Free Cash Flow reflects

cash provided by operations for 2012 onward.

Excludes net cash pension contributions impacting 2006, 2010, 2011, 2013, 2014 & 2015, 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. 2015 excludes $750MM cash paid for pension plan contribution.

Transformation:

$0.5 Billion (average)

5-Year Average

$1.8 Billion


Potential Value Drivers

Strategically

Consistent,

Accretive M&A

High Return

Capital Projects

Profitable Growth in

Target Markets

Continued Optimization

of Strong NA Platforms

Valliant PM3 Start-up

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.

14

Franklin

Fluff Pulp

Conversion

TIN Bldg.

Products

Sale

xpedx Spin-Off

Riegelwood

Fluff Pulp

Conversion

Valliant PM3

Sun JV

Sale


North America

Brazil

EMEA & Russia

India

Asia2

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

$1.1B Net Sales

$2.6B Net Sales

$1.3B Net

Sales

$0.2B Net Sales

Full-year 2015 net sales data 1 Ilim JV total sales are not consolidated (IP owns 50% of JV) 2 Sun JV sold in October 2015

International Paper | 2015 Global Portfolio in Packaging and Paper

$1.9B1 Ilim JV

Total Sales


Repositioned & Well-Positioned | Leading Global Positions

16

1st in NORTH AMERICA in corrugated packaging

2nd in NORTH AMERICA in uncoated freesheet & coated paperboard

1st in LATIN AMERICA in uncoated freesheet

PULP

1st in RUSSIA in paper & pulp

Source: RISI


Global Segment Profile | 2015 EBITDA1

Printing

Papers

21%

Industrial

Packaging

70%

Consumer

Packaging

9%

North America

85%

Brazil 7%

Europe 5%

Russia 3%

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

Does not reflect equity earnings from Ilim JV

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


Global

Recession

0.3 0.4 0.5

0.8

1.3 1.3 1.6

2.0

2.5 2.7 2.7

9%

13% 15% 15%

19% 18%

20% 19%

22% 24% 24%

0%

5%

10%

15%

20%

25%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

N.A. Industrial Packaging | Track Record of Success

18

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


Full-Year 2015 Financial Results

$ Billion (Except as noted)

2013 2014 2015

Sales $23.5 $23.6 $22.4

EBIT1 $2.5 $2.7 $2.6

EPS2 $3.06 $3.00 $3.65

EPS impact of Ilim F/X3 – IP Share

($0.07) ($0.63) ($0.18)

EBITDA1 $4.0 $4.1 $3.9

EBITDA Margin 17.2% 17.5% 17.6%

FCF4 $1.8 $2.1 $1.8

Year-End Debt $9.5 $9.4 $9.3

Cash Balance $1.8 $1.9 $1.0

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 ~$700MM at year end 2015) 4 See slide #66 for a reconciliation of cash provided by operations to Free Cash Flow

xpedx is reflected as a Discontinued Operation in all periods presented

$3.06 $3.00

$3.65

2013 2014 2015

EPS


Fourth Quarter 2015 Results

4Q14 3Q15 4Q15

Sales ($B) $5.9 $5.7 $5.4

EBIT1 ($MM) $657 $757 $616

EPS2 $0.53 $0.97 $0.87

EPS impact of Ilim F/X3 – IP Share

($0.40) ($0.15) ($0.05)

EBITDA1 ($MM) $1,003 $1,086 $930

EBITDA Margin1 16.9% 19.1% 17.1%

Free Cash Flow4

($MM) $739 $512 $501

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 ~$700MM at year end 2015) 4 See slide #66 for a reconciliation of cash provided by operations to Free Cash Flow

xpedx is reflected as a Discontinued Operation in all periods presented

FCF generation of $501MM

Solid N.A. Industrial Packaging

results supported by steady box

demand, impacted by the cost of

additional downtime

N.A. domestic prices generally

stable across businesses

Seasonally higher volumes and

price increases in Brazil, Russia

and Europe

Strong sales and production

results at Ilim; unfavorable F/X

impact of ($0.05) EPS

Appendix


Appendix - Table of Contents

Industrial Packaging……………….……………………………………..23-34

Consumer Packaging……….….………………………….……………..35-42

Printing Papers & Pulp..……….………………………………………...43-60

IP Russia & Ilim Group.………….….……………………………………61-64

Financial & Other………………….……………………………………....65-84

Contact Information……………….………………………………………….85

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%

WRK 20%

GP 10%

PCA 9%

Kapstone 4%

Others 25%

23


IP North American Industrial Packaging | Balanced Global Strategy

IP’s market access provides choices for maximizing value

N.A. 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

Source: IP analysis

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

25


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

nt

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

Riv

er

Cam

pti

Ro

me

Pin

e H

ill

Bo

ga

lus

a

Ora

ng

e

26

IP N.A. Containerboard Mill System | 13 Million Tons Capacity

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


$0

$200

$400

$600

$800

$1,000

$1,200

0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000

Ma

nu

fac

turi

ng

Co

sts

($

/To

n)

Cumulative Annual Production (Thousand Tons)

Cash Costs + Delivery to Chicago

Vicksburg

Linerboard Global Cost Curve | 94% of IP N.A. Capacity in 1st Cost Quartile

Source: FisherSolve™ 4Q15 data

Prattville

Orange

Henderson

Valliant

Savannah

Rome

Mansfield

Springfield

Campti

Pensacola

Bogalusa

Cedar River

Pine Hill

27

Maysville


N.A. Industrial Packaging Relative EBITDA Margins

22.7%

21.4%

17.7%

25.2%

22.4%

20.1%

22.0% 22.0%

17.7%

IP PCA WestRock

4Q14 3Q15 4Q15

23.6%

21.4%

17.9%

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

2015

2015

2015


Note: IP Mix, 2015. Industry Mix, 2014.

Source: IP Analysis

IP Well-Positioned in Attractive Customer Segments

57%

22%

21%

IP Box Shipments by Segment

29

Market Segment IP

Mix

Industry

Mix

Food & Beverage 57% 50%

Processed Food

Protein

Produce

Beverage

Other Non-Durable Goods 22% 30%

Paper Products

Chemicals & Pharma

Other Non-Durables

Durable Goods & Distribution 21% 20%

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

30

$200

$300

$400

$500

$600

$700

$800

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


Economic Indicators and U.S. Box Demand

Source: IHS Economics & Country Risk, US Short Term Forecast, Feb 2016; RISI North America Containerboard 5-year Forecast, December 2015

70

80

90

100

110

120

130

140

20

01

20

02

20

03

2004

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

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

369 373

380

389 398

408

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

20

20

Sh

ipm

en

ts (

BS

F)

U.S. Corrugated Packaging | Forecast

32

Historical Data Source: Fibre Box Association

2016-2020: 2.3% CAGR (RISI – Mar 2016 5-yr forecast)

RISI 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

2014

33

2013

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

2015


Brazil Industrial Packaging | Overview

34

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

2015 Sales of US $228 Million

Three Containerboard Mills

Four Box Plants

~340 Thousand Tons of Containerboard

Capacity

Sustainable Fiber Supply

Corrugated Domestic Supply Position ~7%

3.8MM

tons¹

1: 2014 Brazilian Board Association (ABPO)

Klabin 17%

WRK 8%

IP 7%

Trombini 6%

Irani 6% Penha

5%

Smurfit Kappa

4%

Others 47%


IP Global Coated Paperboard Footprint | Total of 1.6 Million Tons

Coated paperboard mill

North America1

1.2 Million Tons

Europe/Russia

370,000 Tons

35

1Reflects repurposing of Riegelwood mill to pulp


24%

38%

4%

39% 17%

9%

15% 24%

20% 12%

60%

9%

5%

21%

2% 1%

Folding 2.1 MM tons

Cupstock 1.0 MM tons

Liquid 1.3 MM tons

Supply Position by Segment

North American Solid Bleached Sulphate Capacity

Folding includes tobacco; Liquid Packaging includes Aseptic

Source: 2015 RISI Capacity with IP Riegelwood excluded; AF&PA; IP Analysis

CAGR Flat CAGR +1.8% CAGR (1%)

IP 21%

WRK 31%

GP 14%

Rank Group 13%

Clearwater 13%

Weyco 5%

Coated Paperboard 2015 Supply Position (SBS)

36

5.7MM

Tons


North American Consumer Packaging at a Glance

• 2015 Sales: $1.2 B

• 1.2MM external

SBS sales tons

• 2015 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

Packaging

N.A. Consumer Packaging Business

Coated Paperboard

Foodservice Business

Quick Service

Food Service

Coated Paperboard mill Foodservice plant

37

Packaging includes folding carton, liner and liquid; Foodservice includes cupstock and platestock

2015 Coated Paperboard data includes Riegelwood


$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

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

Ma

nu

fac

turi

ng

Co

sts

$/T

on


Cash Cost + Delivery to Chicago

Coated Paperboard Global Cost Curve | IP N.A. Capacity in 1st Cost Quartile

Source: FisherSolve™ 4Q15 data

Texarkana

Augusta

38

Riegelwood


N.A. Coated Paperboard Historical Financials

219 200 187 211

251

358

254 203 205 203

15%

13%

11%

15% 16%

22%

17%

13% 13% 14%

0%

5%

10%

15%

20%

25%

0

50

100

150

200

250

300

350

400

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

EBITDA

$ MM

EBITDA

%

Segment operating profit before special items

39


N.A. Consumer Packaging Relative EBITDA Margins

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

Competitor EBITDA margin estimates obtained from public filings

14.9%

12.6%

15.2% 15.6%

12.0%

14.2%

IP WestRock

4Q14 3Q15 4Q15

13.8% 14.0% 2015

2015


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

41


U.S. Cup Market

42

• Paper hot cups & food containers continue to experience growth, in part due to

the foam-to-paper conversion

• Consumers making different beverage choices

– Decrease in soda consumption in both fountain & bottle beverages

– Growth in juice & smoothie beverages, bottled sports drinks, tea & coffee, as

well as regular, flavored & carbonated waters

Sources: Technomic Disposables Report 2014; IP Analysis; Huffington Post; Forbes

34% 29% 23%

17% 20% 23%

49% 51% 54%

0

20

40

60

80

100

120

2010 2014 2018

U.S. Cup Demand Market Segmentation

Foam Plastic Paper

Single-Use Foodservice Cup Demand

(Billions) 2010 2014F 2018F

2014-18

CAGR

Paper 52 54 58 1.6%

Hot 15 18 23 6.6%

Cold 37 36 35 (1.1%)

Plastic 18 21 25 4.4%

Foam 36 31 25 (4.7%)

TOTAL 106 106 108 0.5%


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


Domtar 35%

IP 22%

PCA 10%

GP 10%

Other 23%

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%

2016 Producer Position Top 2 = 57%

Top 3 = 67%

Note: 2016 producer position adjusted for Domtar Ashdown,

1998, 2016 Source: Poyry Consulting, Fisher International, IP analysis

N.A. Uncoated Freesheet Supply | Supply Positions

44


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 | 3.6MM Tons Capacity

1 Non UFS includes Kraft Bag and Uncoated Bristols 2 IP announced plans in March 2015 to expand fluff pulp production by mid-year 2016

Source: IP analysis

Paper

(M Tons) 650 300 730 320 0 0 0

Pulp

(M Tons) 0 0 110 360 320 660 190

Tenant Mill

Cap

ac

ity

45


$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

0 10,000 20,000 30,000 40,000 50,000

Man

ufa

ctu

rin

g C

osts

$/T

on


Cash Costs+ Delivery to Chicago

Uncoated Freesheet Global Cost Curve | 83% of IP N.A. Capacity in 1st & 2nd Cost Quartiles

Source: FisherSolve ™ 4Q15 data

Georgetown

Riverdale

Ticonderoga

46

Eastover


314

575

657 657

513 539

598

499

310 253 261

10%

16%

19% 19% 18%

20%

22%

18%

12% 12% 13%

0%

5%

10%

15%

20%

25%

0

200

400

600

800

1,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

EBITDA %

EBITDA $ MM Papers Only

N.A. Printing Papers | Margin History


47

Tons (MM)

4.0 4.1 3.9 3.5 3.0 2.8 2.7 2.7 2.6 2.0 2.0


N.A. Papers & Pulp Relative EBITDA Margins

14.4%

15.8%

18.9%

12.9%

11.0%

15.6%

IP Domtar

4Q14 3Q15 4Q15

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

Competitor EBITDA margin estimates obtained from public filings and IP analysis

13.4%

2015

13.4%

2015


U.S. Uncoated Freesheet Demand

Historical Data Source: AF&PA

2016 – 2020: -1.8% CAGR (RISI Feb 2016 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

8.0 7.9 7.7 7.5 7.4 7.3 7.2

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 20

Mil

lio

n T

on

s

UFS Demand and RISI Forecast

49

RISI Forecast


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

50


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 LatAm

Thousand Short Tons

Demand

Capacity

Latin America is a Net Exporter

Demand Capacity @

91% Op. Rate* Net Exports

2.8 MM 3.0 MM 0.2 MM

Supply & Demand

51

* Excluding Mexico

Source: Ibá / AFCP / RISI / Fisher / IP Estimates

Top 6 Producers > 80%

Others

Smurfit

Kappa

Ledesma

Celulosa

Argentina

Propal

IP

Suzano

35%

30%

6%

4%

4%

3%

18% IP

Suzano

3.3MM

tons


IP Brazil Uncoated Freesheet | At a Glance

Mogi Guacu Luiz Antonio Três Lagoas IP Brazil

UFS Paper

Machines 4 2 1 7

UFS Capacity (thousand tons)

463 408 259 1,130

Market Pulp (thousand tons)

33 110 0 143

52


IP Brazil | Historical Financials

53

280

317

228

296 320

293

334 326

275

33% 33%

24%

27% 27% 26%

31% 31% 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 2014 2015

EBITDA

US$ MM EBITDA

Margin


Tons

(MM) 0.9 1.0 1.2 1.2 1.3 1.3 1.3 1.3 1.2


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

2015 2019

Mil

lio

n T

on

s

2015 – 2019

CAGR

1.1%

2.4%

2.6%

(1.4%)

(0.8%)

(0.2%)

Source: PPPC

Global Demand = 26.8 → 27.7MM tpy

CAGR = 0.8%

55


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

8

2015 2019

Mil

lio

n T

on

s

2015 – 2019

CAGR

5.2%

5.6%

1.6%

2.0%

1.3%

2.8%

Source: IP analysis

Global Demand = 5.8 → 6.8MM tpy

CAGR = 3.8%

56


Pulp mill

57

IP Global Pulp Capacity | Total of 2.3 Million Short Tons1

Ilim JV

1.8 MM

Europe / Russia

0.3 MM N. America

1.8 MM

L. America

0.2 MM

1 Does not include llim JV


Global Fluff Pulp Industry | Trade Flows – 2015

Net Import Locations Net Export Locations

Global Demand = 5.8MM stpy

Import

(1.0)MM

87.0% Export

5.1 MM

Import

(0.5)MM

Import

(0.8)MM

Import

(2.4)MM

Source: PPPC, IP Analysis; Units shown in short tons


59

Riegelwood & N.A. Pulp System Update

Growing Pulp business

Riegelwood Mill conversion underway

Additional 400,000 tons of capacity on

line by mid-year 2016

Flexibility to produce softwood market pulp

while fluff demand ramps up

Post conversion, IP will have 1.7MM tons of

pulp capacity in NA (~1.5MM tons of which

can be fluff)

2007 2009 2013 Post Conversion

Fully Ramped

IP’s Total Fluff Pulp Capacity

~1,500

Th

ou

sa

nd

To

ns

World Demand for Fluff Pulp

~400k

400

~800k

PM15 PM18 PM20 PM15 PM18* PM20

Coated Pulp (SBSK/Fluff)

Post Conversion Capacity

~350 k Tons Shut

Jan’16

2015 Capacity

50%

~

50%

*Shut Dec’15 and convert by May’16

Riegelwood Mill Conversion

50%

~

50%

Source: Poyry World Fibre Outlook up to 2030


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

60


IP Russia & Ilim JV | Manufacturing Overview

Ilim JV Production1 2014 2015

Bratsk Mill

Total 995 1,163

• Softwood bleached pulp 525 672

• Hardwood bleached pulp 270 293

• KLB 200 198

Koryazhma Mill

Total 1,335 1,353

• PM7 paper 195 188

• PM7 CFS 20 50

• Pulp (BHKP, UKP) 320 311

• KLB and others 800 804

Ust-Ilimsk Mill

Pulp (BSKP, UKP) Total 865 857

IP Russia Production1

Svetogorsk 2015

Total 699

• Coated Paperboard 114

• Pulp (soft/hardwood) 175

• Fine Papers 410

1 Volumes shown in thousand short tons

Koryazhma

Bratsk Ust-Ilimsk

China

Kazakhstan Mongolia

Svetogorsk

Well-Positioned to Serve Target Markets

61


$0

$200

$400

$600

$800

$1,000

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

Man

ufa

ctu

rin

g C

osts

($

/To

n)

Cumulative Capacity (Thousand Tons)

Cash Cost + Delivery to Beijing

62

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

China will account

for more than 60% of

world’s incremental

market pulp growth

1st quartile cost positions

with favorable access to

China NBSK market

Access to significant

Russian wood basket

2014 - 2030

China

13 MM

Rest of

World

8 MM

1 Source: Poyry World Fibre Outlook up to 2030 (Metric Tonnes) 2 Source: FisherSolve™ 4Q15 data

Ust-Ilimsk

Bratsk

2

Bratsk

(Pre-Project)


2009 2010 2011 2012 2013 2014 2015

Sales Volume (Million short tons) 2.6 2.8 2.8 2.9 2.7 3.2 3.3

Sales ($B) 1.3 1.9 2.2 2.0 1.9 2.1 1.9

Debt ($B) 0.4 0.5 0.9 1.2 1.5 1.4 1.2

Operating EBITDA ($MM) 197 516 591 291 208 470 724

F/X Gain (loss)1 (35) 12 (60) 39 (80) (684) (218)

EBITDA ($MM) 163 528 531 330 128 (214) 506

Depreciation ($MM) 120 121 124 134 177 193 240

EBIT ($MM) 43 407 406 196 (49) (408) 266

Interest Expense ($MM) 28 18 7 6 39 69 53

Net Income (loss) ($MM) (19) 266 299 132 (72) (362) 150

IP Equity Earnings (loss) ($MM) (27) 103 134 56 (46) (194) 131

Dividends (to IP) ($MM) 50 34 85 0 0 56 35

Ilim JV results are IFRS basis.

IP Equity Earnings (loss) on US GAAP basis. 1Represents F/X impact primarily related to Ilim JV USD-denominated net debt (balance of ~$700MM at year end 2015)

63

Ilim Joint Venture | Full Year Financials


Ilim Joint Venture | 4Q15 vs. 3Q15

$ Million 4Q14 3Q15 4Q15 2014 2015

Sales Volume (thousand tons)

859 828 891 3,188 3,350

Sales $520 $477 $492 $2,139 $1,931

Operational EBITDA1 $143 $194 $191 $470 $724

F/X (Impact of USD Net Debt2) ($432) ($176) ($60) ($684) ($218)

IP Equity Earnings(Loss)3 ($136) ($9) $34 ($194) $131

Continued strong operational and financial results through optimization and leveraging

advantaged export position

Achieved $724MM operational EBITDA in 2015

Expect continued strong operations offset by softwood pulp price pressure and normal

seasonality for 1Q’16

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 4Q15 mainly driven by Ilim JV USD-denominated net debt balance of ~$700MM; 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 4Q14, 3Q15, and 4Q15 include after-tax f/x losses (primarily on USD-denominated net debt) of $(171)MM, $(65)MM, and $(19)MM,

respectively; FY14 and FY15 include after-tax f/x losses of $(269)MM and $(75)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 onward

.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

.84

.97 .97

.87

.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 1Q 2Q 3Q 4Q

2005 2006 2007 2010 2008

Impact of Mineral

Rights Gain

2009

.83

2011

.93 Final Land Sale

2012 2013 2014 2015


$ Million 2013 4Q14 2014 1Q15 2Q15 3Q15 4Q15 2015

Cash Provided by Operations

$3,0291 $1,144 $3,4302 $638 $8653 $837 $990 $3,3303

Less Capital Investment

($1,198) ($405) ($1,366) ($319) ($354) ($325) ($489) ($1,487)

Free Cash Flow $1,831 $739 $2,064 $319 $511 $512 $501 $1,843

66

Free Cash Flow

1 Excludes $31MM cash paid for pension plan contribution and $30MM cash received from Guaranty Bank insurance reimbursements 2 Excludes $353MM cash paid for pension plan contribution 3 Excludes $750MM cash paid for pension plan contribution


Balance Sheet | Financial Strength $

Bill

ion

2.9x

$9.5 Balance

Sheet

Debt

$1.1 Op. Lease Adj. $0.8 Op. Lease Adj.

$3.9 Pension Gap

[2.3x]1

2014 2013 2015

3.2x

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

Adjusted EBITDA of $4.2B incorporates pension and lease expense adjustments (Moody’s Methodology) 1 Simple Debt Coverage: Balance Sheet Debt / 2013 Reported EBITDA of $4.1B 2 Simple Debt Coverage: Balance Sheet Debt / 2014 Reported EBITDA of $4.1B 3 Simple Debt Coverage: Balance Sheet Debt / 2015 Reported EBITDA of $3.9B

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

Pension gap decreased by $0.3B

Made $750MM voluntary pension

contribution

Significant debt restructuring mid-2015

Bond issue and tender offer

successfully reduced debt towers

Raised dividend 10% to $1.76/share

Continued share buybacks of ~$500MM

$1.0B cash balance at year end

$9.4 Balance

Sheet

Debt

[2.3x]2

$0.5 Op. Lease Adj.

$2.2 Pension Gap

3.2x

$9.3 Balance

Sheet

Debt

$3.6 Pension Gap

[2.4x]3

2015 Highlights


$0

$200

$400

$600

$800

$1,000

2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046

Mil

lio

n

Debt Maturities Other Debt

1 Primarily foreign debt (intended to be rolled over or refinanced).

Debt Maturity Profile | Maturities as of December 31, 2015

1

68


25%

50%

75%

100%

125%

$0

$300

$600

$900

$1,200

$1,500

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016E

Maintenance Regulatory Strategic Cost Reduction % of Depreciation

$ Million % of

Depreciation

Reflects continuing operations

Capital Spending

69

~$1,300


Pension Plan Update | As of December 31, 2015

• No contribution 1960-2005;

$2.6B contribution 2006-2013

• $1.1B contribution made in

2014-2015

• No contribution required in

2016

($3.2)

($2.8)

($1.5)

($2.4)

($2.7)

($4.1)

($2.2)

($3.9)

($3.6)

Billio

n

Year-End Funded Status1

70

1 Reflects status as of December 31


Pension Plan Update1 | As of December 31, 2015

195

342

545

387

447

364

$0

$150

$300

$450

$600

2011 2012 2013 2014 2015 2016E

Millio

n

Annual Pension Expense2 Key Variables 2014 2015 2016E

Assumed Rate of Return

7.6% 7.75% 7.75%

Discount Rate 4.9% 4.1% 4.4%

Average Annualized Returns3

2015 1.3%

Past Five Years 7.8%

Past Ten Years 7.1%

Portfolio Asset Allocation at 12-31-15

Target Actual

Equity 43% - 54% 48%

Bonds 25% - 35% 33%

Real Estate 7% – 13% 10%

Other 8% - 17% 9% 1 2013 and onward include Temple-Inland pension plan 2 Non-cash expense for U.S. plans only 3 Through December 2015

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 approx 200 observations

71


Maintenance Outages Expenses | 2015

$ Million 1Q15A 2Q15A 3Q15A 4Q15A 2015A

Industrial Packaging $63 $95 $27 $63 $248

North America 63 93 27 63 246

Brazil 0 2 0 0 2

Printing Papers Total $33 $63 $32 $37 $165


Europe 0 22 14 1 37

Brazil 6 0 2 0 8

India 0 0 1 0 1

Consumer Packaging $15 $12 $7 $14 $48


Europe 0 2 5 0 7

Total Impact $111 $170 $66 $114 $461

72


Maintenance Outages Expenses | 2016 Forecast

73

$ Million 1Q16F 2Q16F 3Q16F 4Q16F 2016F

Industrial Packaging $84 $93 $58 $50 $284


Brazil 0 2 0 0 2

Printing Papers Total $67 $54 $29 $55 $205


Europe 0 8 11 14 33

Brazil 0 6 0 1 7

India 0 0 1 0 1

Consumer Packaging $18 $4 $3 $19 $44


Europe 0 4 3 2 9

Total Impact $169 $151 $90 $124 $534


North American Downtime

74

46

118 123

48 93

140 146

72 92

276

60 58

69

53

55

78

230

Maintenance Economic

24 24 20

7 18 12 15

41 13

4 29

31

58

16 20

1

31

13

29

0

30

2

15 19

12 0

18 15

12

4

Containerboard Uncoated Papers1

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

1Courtland shutdown of two machines in 4Q13; shutdown complete in February 2014

146 150

322

178 181

117

0

48

Coated Paperboard

201

31

16

322

46


Total Cash Cost Components | FY 2015

75

Fiber 32%

Freight 16%

Materials 15%

Labor 12%

Energy 8%

Overhead 9%

Chemicals 8%

North American mills only


90

95

100

105

110

115

120

125

130

2012 2013 2014 2015 2011 2010 2008 2009 2007

76

U.S. Mill Wood Delivered Cost Trend | Flat vs. 3Q15 Average Cost

Cost Indexed to January 2007 values


40

60

80

100

120

140

160

180

200

2012 2013 2014 2015 2011 2010 2008 2009 2007


77

U.S. OCC Delivered Cost Trend | 1% Decrease vs. 3Q15 Average Cost


2007 2008 2009 2010 2011 0

50

100

150

200

250

2012 2013 2014 2015

NYMEX Natural Gas closing prices

78

Natural Gas Costs Trend | 16% Decrease vs. 3Q15 Average Cost



2007 2008 2009 2010 2011 40

90

140

190

240

290

340

2012 2013 2014 2015

79

U.S. Fuel Oil Trend | Flat vs. 3Q15 Average Cost


WTI Crude prices


2007 2008 2009 2010 2011 75

100

125

150

175

200

2012 2013 2014 2015

80

U.S. Chemical Composite Index Trend | Flat vs. 3Q15 Average Cost


Delivered cost to U.S. facilities: includes Caustic Soda, Sodium Chlorate, Starch and Sulfuric Acid 2007 - 2008 excludes WY PKG


2016 Global Consumption | Annual Purchase Estimates for Key Inputs

Commodity U. S. Non – U. S.

Energy

Natural Gas (MM BTUs) 73,000,000 10,000,000

Fuel Oil (Barrels) 440,000 350,000

Coal (Tons) 250,000 580,000

Fiber Wood (Tons) 52,000,000 7,600,000

Old Corrugated Containers / DLK (Tons) 4,800,000 420,000

Chemicals

Caustic Soda (Tons) 340,000 70,000

Starch (Tons) 380,000 100,000

Sodium Chlorate (Tons) 160,000 50,000

LD Polyethylene (Tons) 40,000 -

Latex (Tons) 10,000 6,000

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


Corporate Social Responsibility | Mission

The IP Way: To be one of the most respected

and successful companies in the world

Our Corporate Social Responsibility Mission

Use all resources responsibly

Enable sustainable growth

Strengthen people and communities


Corporate Social Responsibility | Planet

83

Water

Developing a global water stewardship strategy to use water sustainably

Generating more than 70% of energy needs from renewable fuels Improved energy efficiency by 6.1% since 2010 Reduced GHG emissions by 8.3% since 2010

Increased third-party certified fiber by 28% since 2010 IP only accepts fiber that is legally harvested and has known origins

GHG Emissions Forest Stewardship


Corporate Social Responsibility | People

84

Safety

Reduced serious injuries by 68% since 2010

Reduced Lost Work Day Incident Rate by 25% since 2010

Named for the tenth consecutive year as one of the World’s Most Ethical Companies® by the Ethisphere Institute

Stakeholder dialogue allows us to collaborate with communities and continue to improve

Ethics & Compliance Stakeholder

Engagement

For more information visit

internationalpaper.com/sustainability


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]

85

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