1. Healthcare

Fourth Quarter and Full-Year 2014 Earnings | January 28, 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
Earnings Presentation | Fourth Quarter and Full-Year 2014
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
Earnings Presentation | Fourth Quarter and Full-Year 2014
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
Earnings Presentation | Fourth Quarter and Full-Year 2014
Full-Year 2014 Results
 Delivered record cash from operations and
FCF1
free cash flow of $2.1B
($MM)
 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;
$2,064
$1,831
annualized interest savings of ~$40MM
 Increased dividend by 14% to $1.60/share
$1,577
 Share buyback program purchases of
~ $1B in 2014
 Courtland closure completed
 Completed xpedx spin-off; $400MM received
2012
2013
2014
 $470MM operational EBITDA up 126% at
Ilim JV; $56MM dividend to IP
1 See
5
slide #27 for a reconciliation of cash provided by operations to free cash flow
Earnings Presentation | Fourth Quarter and Full-Year 2014
Full-Year 2014 Financial Results
$ Billion
(Except as noted)
2012
2013
2014
EBITDA1
($MM)
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
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
EBITDA Margin
1 From
$4,035
$4,143
2013
2014
$3,605
2012
continuing operations before special items and non-operating pension expense
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 #27 for a reconciliation of cash provided by operations to free cash flow
xpedx is reflected as a Discontinued Operation in all periods presented
2
6
Earnings Presentation | Fourth Quarter and Full-Year 2014
ROIC1 above our Cost of Capital | Increasing Shareholder Value
2010 – 2014
8.9% (average ROIC)
Global
Economic
Recession
10%
9.5%
9%
8%
9.3%
9.2%
2013
2014
8.3%
8.1%
7.5%
7%
6%
6.5%
6.3%
5%
5.0%
4%
4.5%
3%
2%
1%
2005
2006
2007
2008
2009
ROIC
1 ROIC
7
2010
2011
2012
WACC
= Operating Earnings before Interest / Average Invested Capital [Equity (adjusted to remove pension related amounts in OCI, net of tax) + Interest-Bearing Debt]
Earnings Presentation | Fourth Quarter and Full-Year 2014
Strong, Sustainable Free Cash Flow
Global Economic
Recession
$ Billions
$2.5
$2.0
Transformation:
$0.7 Billion (average)
$1.5
Excluding land sales:
$0.4 Billion (average)
2010 – 2014
$1.8 Billion (average)
$1.0
$0.5
$0.0
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
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 $353MM cash paid for pension plan contribution.
Free cash flow reflects cash provided by operations for 2012 – 2014.
8
Earnings Presentation | Fourth Quarter and Full-Year 2014
IP’s Balanced Use of Cash | Increasing Shareholder Value
Use of Cash
($MM)
2014
Cash from
Operations
$3.4 B
xpedx
Spin-off
$0.4 B
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
~ $1,000
Debt Reduction & Pension Contribution
~ $450
Capital Spending
~ $1,400
Selective Reinvestment
Brazil – Grupo Orsa, acquired remaining shares
9
~ $600
Earnings Presentation | Fourth Quarter and Full-Year 2014
~ $135
2014 vs. 2013 EPS
.89
(.16)
(.08)
(.01)
(.23)
.03
(.07)
(.23)
(.33)
3.06
.13
3.00
Shares
2014
FX (.53)
Ops. .20
2013
Price / Mix
Volume
Operations
& Costs
Maintenance
Outages
Input Costs
Interest
Operating Earnings
10
Earnings Presentation | Fourth Quarter and Full-Year 2014
Courtland
Closure
Tax
Ilim JV
Fourth Quarter 2014 Results
Sales ($B)
4Q13
3Q14
4Q14
 Record FCF quarter, strong
$5.8
$6.1
$5.9
 Solid performance across key
working capital management
businesses
EBIT1 ($MM)
$661
$835
$657
EPS2
$0.81
$0.95
$0.53
EPS impact of Ilim
F/X3 – IP Share
($0.01)
($0.19)
($0.40)
 Input cost headwinds began to
EBITDA1 ($MM)
$1,028
$1,193
$1,003
 $170MM of shares repurchased
16.9%
in quarter, bringing total since
September 2013 to $1.44B
EBITDA Margin1
Free Cash Flow4
($MM)
17.6%
19.7%
 Benefit of stronger demand for
N.A. box muted by weak global
conditions
moderate in quarter
 Strong operating results at Ilim;
$598
$696
$739
1 From
unfavorable F/X impact of
($0.40) EPS
continuing operations before special items and non-operating pension expense
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 #27 for a reconciliation of cash provided by operations to free cash flow
xpedx is reflected as a Discontinued Operation in all periods presented.
2 EPS
11
Earnings Presentation | Fourth Quarter and Full-Year 2014
4Q14 vs. 3Q14 EPS
.95
(.03)
.01
(.13)
(.10)
.03
(.05)
(.15)
.53
3Q14
Price / Mix
Volume
Operations
& Costs
Maintenance
Outages
Operating Earnings
12
Earnings Presentation | Fourth Quarter and Full-Year 2014
Input Costs
Corporate
& Other Items
Ilim JV
4Q14
Industrial Packaging | 4Q14 vs. 3Q14
569
(12)
0
(53)
2
484
Input Costs
4Q14
$ Million
(22)
3Q14
Price / Mix
Volume
Operations
& Costs
Segment operating profit before special items
13
Earnings Presentation | Fourth Quarter and Full-Year 2014
Maintenance
Outages
NA Industrial Packaging | Track Record of Success
Growth and Margin Expansion through Strategic Acquisitions
and Successful Integrations
TIN Acquisition
& Integration
Weyco Packaging
Acquisition & Integration
EBITDA %
24%
Global Recession
25%
22%
19%
20%
15%
10%
2.5
2.7
2.0
1.6
9%
1.3
1.3
2009
2010
0.8
0.3
2005
0.4
2006
0.5
2007
2008
IP EBITDA margins based on North American Industrial Packaging operating profit before special items
Excludes the Recycling Business and revenue from trade volumes
14
19%
15%
13%
5%
0%
18%
Business
EBITDA ($B)
15%
20%
Earnings Presentation | Fourth Quarter and Full-Year 2014
2011
2012
2013
2014
Consumer Packaging | 4Q14 vs. 3Q14
79
(2)
(15)
2
(11)
6
(4)
Input Costs
FX / Other
$ Million
55
3Q14
Price / Mix
Volume
Operations
& Costs
Maintenance
Outages
Segment operating profit before special items
15
Earnings Presentation | Fourth Quarter and Full-Year 2014
4Q14
Printing Papers | 4Q14 vs. 3Q14
19
192
(30)
(6)
(26)
(1)
155
Input Costs
FX / Other
4Q14
$ Million
7
3Q14
Price / Mix
Segment operating profit before special items
16
Volume
Operations
& Costs
Maintenance
Outages
Earnings Presentation | Fourth Quarter and Full-Year 2014
Printing Papers | 2014 vs. 2013 Change in Segment Operating Profit1 ($MM)
$2
$55
Europe
North America
Papers
$27
North America
Pulp
$10
India
Brazil
$1
1Before
17
special items
Earnings Presentation | Fourth Quarter and Full-Year 2014
Ilim Joint Venture | 4Q14 vs. 3Q14
$ Million
4Q13
3Q14
4Q14
2013
2014
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)
Sales Volume
(thousand tons)
 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
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)
18
Earnings Presentation | Fourth Quarter and Full-Year 2014
Ilim Joint Venture | Well-Positioned to Serve Growing Pulp Markets
80
Forecast1
70
Rest of
World
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
4.8 MM
50
40
China
30
China
14.7 MM
Eastern Europe
20
Western Europe
10
0
1995
North America
2000
2005
$1,000
Manufacturing Costs
($/Metric Tonne)
 China will account
Million Metric Tonnes
60
2010
2011
2015
2020
2025
2011-2025
Cash + Delivery to Beijing2
$800
Bratsk
(Pre-Project)
$600
Ust-Ilimsk
$400
Bratsk
$200
$0
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.
19
0
5,000
10,000
15,000
Cumulative Capacity (Thousand Metric Tonnes)
Earnings Presentation | Fourth Quarter and Full-Year 2014
20,000
Balance Sheet | Debt Coverage
Moody’s Target: Adjusted Debt < 3X Adjusted EBITDA
3.8x
3.3x
$4.1
Pension Gap
2.9x
$2.2
$3.9
Pension Gap
$ Billion
Pension Gap
$10.1
Balance
Sheet
Debt
[2.7x]1
$9.5
Balance
Sheet
Debt
[2.3x]2
$9.4
Balance
Sheet
Debt
[2.3x]3
 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
$1.2 Op. Lease Adj.
2012
$1.2 Op. Lease Adj.
2013
$1.1 Op. Lease Adj.
2014
 $1.9B cash balance at year end
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
20
Earnings Presentation | Fourth Quarter and Full-Year 2014
First Quarter Outlook | Changes from 4Q14
North America
EMEA & Russia
Brazil
Asia1
Paper
Stable
Seasonal
Decrease
Seasonal
Decrease
Stable
Packaging
Stable
Stable
Seasonal
Decrease
Stable
Paper
Stable
Pressure
Stable
Stable
Packaging
Stable
Pressure
Stable
Stable
Paper
Stable
Stable
Improving
Stable
Stable
Stable
Stable
Stable
Stable
Stable
Stable
Improving
Stable
Stable
Stable
Volume
Pricing / Mix
Operations
& Other
Packaging
Industrial (+)
Consumer (-)
Inputs &
Freight
Paper
Mill
Maintenance
Outages
Paper
Decrease $3MM
N/A
Decrease $5MM
N/A
Packaging
Increase $22MM
N/A
N/A
N/A
Packaging
Non-recurring currency
impact2
ILIM JV Equity Earnings
Other Items
1 Includes
21
India
2 Assumes
 Tax rate, in line with full-year outlook of 33%
 Interest, flat
 Corporate expense, ~$15MM in 1Q2015
 Operating pension expense, ~$5MM higher in 1Q2015 (~$20MM higher full year)
F/X at 4Q14 exit rate
Earnings Presentation | Fourth Quarter and Full-Year 2014
Macro View Entering 2015
Real GDP, % change on prior year
Global 2014 forecast 2.7%
2015 forecast 3.0%
China
Russia
0.4 -4.0
0.9
2.4
3.1
1.4
Euro zone
U.S.
5.9
IP 2014 EBITDA
Brazil
8%
North
America
82%
Europe
6%
Brazil
0
0.4
Russia
3%
Asia
1%
2014 2015
Source: IHS Economics & Country Risk
22
India
Earnings Presentation | Fourth Quarter and Full-Year 2014
6.7
7.3
6.5
Key Financial Metrics
Continued Strong Cash From Operations
and Cash Flow Generation
$ Million
(Except as noted)
1Before
23
2013
2014
2015 Estimate
Capital Spending
$1.2 B
$1.4 B
~ $1.5 B
Depreciation & Amortization
$1.5 B
$1.4 B
~ $1.4 B
Net Interest Expense1
$618
$601
~ $580
Corporate Items
$61
$51
~ $60
Effective Tax Rate
26%
31%
~ 33%
special items
Earnings Presentation | Fourth Quarter and Full-Year 2014
IP 2015 | Key Levers and Runway
 NA Industrial Packaging mix refinement
 System and commercial optimization
 Valliant PM 3 restart
 Remaining DOJ purchase commitments expire mid-year
 Printing Papers first full year post Courtland
 Consumer-driven demand for fiber-based food packaging
 Improvement at Brazil Industrial Packaging
 Margin expansion opportunities at Ilim
24
Earnings Presentation | Fourth Quarter and Full-Year 2014
Wrap Up & Looking Ahead
 Strong results in 2014
 2015 focus areas
 Execution
 High return capital project opportunities
 Creating value for shareholders
25
Earnings Presentation | Fourth Quarter and Full-Year 2014
Appendix
Investor Relations Contacts
Jay Royalty
901-419-1731
Michele Vargas
901-419-7287
Media Contact
Tom Ryan
26
Earnings Presentation | Fourth Quarter and Full-Year 2014
901-419-4333
Free Cash Flow
$ 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)
$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
27
Earnings Presentation | Fourth Quarter and Full-Year 2014
Maintenance Outages Expenses | 2014
$ Million
Industrial Packaging
2Q14
3Q14
4Q14
2014
$69
$91
$26
$48
$234
69
91
23
48
231
0
0
3
0
3
$31
$60
$16
$43
$150
30
35
14
32
111
Europe
1
24
1
0
26
Brazil
0
1
0
11
12
India
0
0
1
0
1
$20
$26
$1
$11
$58
20
19
1
11
51
0
7
0
0
7
$120
$177
$43
$102
$442
North America
Brazil
Printing Papers Total
North America
Consumer Packaging
North America
Europe
Total Impact
28
1Q14
Earnings Presentation | Fourth Quarter and Full-Year 2014
Maintenance Outages Expenses | 2015
$ Million
Industrial Packaging
2Q15F
3Q15F
4Q15F
2015F
$66
$99
$37
$67
$269
66
96
37
67
265
0
3
0
0
3
$35
$67
$32
$46
$180
29
43
14
39
125
Europe
0
23
17
0
40
Brazil
6
1
0
7
14
India
0
0
1
0
1
$15
$17
$11
$17
$60
15
12
4
17
48
0
5
7
0
12
$116
$183
$80
$130
$509
North America
Brazil
Printing Papers Total
North America
Consumer Packaging
North America
Europe
Total Impact
29
1Q15F
Earnings Presentation | Fourth Quarter and Full-Year 2014
North American Downtime
Uncoated Papers2
Containerboard
176
197
49
127
158 276
30
100
167
1
99
60
70
88
178 181
179
58 117
118 123
69
53
126
48
46
Thousand Tons
Thousand Tons
322
53
31
19
18
16
Coated Paperboard1
48
27
41
22
24
24
13
1
24
20
0
7
Maintenance
1Augusta
PM#2 was permanently shutdown in March 2013 (36000 tons / quarter)
shutdown of two machines in 4Q13; shutdown complete in February 2014
2Courtland
30
20
1
Market Pulp
Thousand Tons
Thousand Tons
49
58
38
Earnings Presentation | Fourth Quarter and Full-Year 2014
8
14
Market
21
15
20
2
19
12
0
Special Items Before Tax | Continuing Operations
Special Items Pre-Tax ($ Million)
Acquisition and Integration Costs
Industrial
Packaging
3Q14
4Q14
($16)
($1)
($5)
Multi-Employer Pension Plan Exit Liability
($35)
Asia Goodwill Impairment
Other
Courtland Mill Shutdown
Printing Papers
4Q13
($100)
$3
($6)
($67)
($3)
India Reserve Release
India Goodwill & Trade Name Impairment
$20
($123)
Brazil Tax Settlement
Consumer Pkg. Other
Debt Extinguishment
Corporate
($32)
($2)
($2)
($4)
($1)
($13)
($1)
ASG Loss on Sale & Impairment
($47)
Other
Total Special Items Before Tax
xpedx is reflected as a Discontinued Operation in all periods presented.
31
Earnings Presentation | Fourth Quarter and Full-Year 2014
($7)
($5)
($206)
$9
($77) ($155)
Special Items Net of Taxes
4Q14
$ Million
Earnings Before Special Items
$227
2014
EPS
$0.53
$ Million
$1,296
EPS
$3.00
Special Items Net of Taxes:
Tax items1
Debt Extinguishment Costs
ASG Loss on Sale & Impairment
Acquisition and Integration Costs
Multi-Employer Pension Plan Exit Liability
Courtland Mill Shutdown
India Reserve Release
Brazil Tax Settlement
Asia Box Goodwill Impairment
Other
$81
($169)
($36)
($10)
($21)
($338)
$20
($17)
($4)
($100)
($100)
$3
($9)
Total Special Items Net of Taxes
($52)
($0.12)
($599)
($1.39)
Non-Operating Pension Expense
($32)
($0.07)
($129)
($0.30)
($9)
($0.02)
($13)
($0.02)
$134
$0.32
$555
$1.29
Discontinued Operations Net of Taxes
Net Earnings
1 Mainly
business restructuring items
xpedx is reflected as a Discontinued Operation in all periods presented.
32
$90
($1)
($36)
($4)
Earnings Presentation | Fourth Quarter and Full-Year 2014
4Q14 EBITDA | Integrated Mill Business Margins
Operating
Profit
$ Million
D&A
Tons
$ Million
Thousand
EBITDA
per Ton
EBITDA
Margin
Industrial Packaging
North America1
$479
$177
3,441
$191
23%
($1)
$6
80
$63
6%
North America2
$37
$22
494
$119
12%
Europe & Russia3
$38
$15
3464
$153
20%4
Brazil
$53
$27
320
$250
28%
India5
($3)
$4
44
$23
3%
North America Pulp
$30
$18
362
$133
21%
North America6
$32
$42
357
$207
15%
Europe
$27
$5
101
$317
34%
Brazil
Printing Papers
Consumer Packaging
Segment operating profit before special items
1 Includes Corrugated Packaging, Saturating Kraft & Bag businesses, Gypsum & Release Kraft business; excludes Recycling business and revenue from trade volumes
2 Includes Bleached Kraft business
3 Uncoated Papers (excludes Pulp)
4 Excludes JMA sales
5 Includes adjustment for minority ownership share
6 Includes Foodservice business
33
Earnings Presentation | Fourth Quarter and Full-Year 2014
Operating Profits by Industry Segment | Continuing Operations
$ Million
3Q14
4Q14
2013
2014
Industrial Packaging
$486
$569
$484 $1,849
Printing Papers
$143
$192
$155
$512
$550
$32
$79
$55
$208
$186
$661
$840
$694 $2,569
$2,790
($134) ($152) ($142) ($618)
($601)
Consumer Packaging
Operating Profit
Net Interest Expense
Noncontrolling Interest /
Equity Earnings Adjustment
Corporate Items
Non-Operating Pension Expense
Special Items
34
4Q13
$2,054
$4
($2)
($2)
$5
($2)
($4)
($3)
($35)
($61)
($51)
($78)
($54)
($53) ($323)
($212)
($77) ($155) ($344)
($1,052)
($210)
Net Earnings from continuing operations
before income taxes, equity earnings &
noncontrolling interest
$239
$552
Equity Earnings(Loss), net of taxes
– Ilim
($12)
($70) ($136)
Earnings Presentation | Fourth Quarter and Full-Year 2014
$307 $1,228
($46)
$872
($194)
Geographic Business Segment Operating Results | Revenue
$ Million
Sales
4Q13
3Q14
4Q14
2013
2014
Industrial Packaging
North America
Europe
Brazil
Asia
Printing Papers
North America
Europe
Brazil
Asia / India
N.A. Pulp
Consumer Packaging
North America
Europe
Asia (Sun JV)
$3,115
$3,210
$3,159
$12,520
$12,663
$335
$310
$316
$1,270
$1,307
$95
$88
$79
$335
$349
$170
$146
$143
$685
$625
$600
$395
$295
$70
$210
$529
$365
$266
$58
$235
$511
$352
$288
$55
$234
$2,550
$1,475
$1,090
$275
$815
$2,055
$1,472
$1,061
$237
$895
$480
$95
$290
$528
$94
$254
$495
$95
$264
$1,950
$380
$1,105
$1,992
$365
$1,045
Does not reflect total company sales
35
Earnings Presentation | Fourth Quarter and Full-Year 2014
Geographic Business Segment Operating Results | Before Special Items
$ Million
Segment Operating Profit
4Q13
3Q14
4Q14
2013
2014
Industrial Packaging
North America
Europe
Brazil
Asia
Printing Papers
North America
Europe
Brazil
Asia / India
N.A. Pulp
Consumer Packaging
North America
Europe
Asia (Sun JV)
36
$479
$570
$479
$1,813
$2,032
$8
$4
$8
$32
$31
($1)
($2)
($1)
$2
($4)
$0
($3)
($2)
$2
($5)
$37
$36
$61
($2)
$11
$75
$44
$58
($5)
$20
$37
$38
$53
($3)
$30
$154
$167
$210
($21)
$2
$156
$140
$209
($12)
$57
$4
$25
$3
$52
$27
$0
$32
$27
($4)
$110
$100
($2)
$100
$91
($5)
Earnings Presentation | Fourth Quarter and Full-Year 2014
2014 Operating Earnings
Pre-Tax
$MM
Tax
$MM
Noncontrolling
Interest
$MM
Equity
Earnings
Net Income
$MM
Average
Shares
MM
Diluted EPS1
($127)
($166)
($208)
($158)
$4
$3
$6
$6
($33)
$41
($72)
($136)
$260
$400
$409
$227
436
432
429
425
$0.60
$0.93
$0.95
$0.53
Operating Earnings
1Q14
2Q14
3Q14
4Q14
$416
$522
$683
$515
Non-Operating Pension Expense
1Q14
2Q14
3Q14
4Q14
($44)
($61)
($54)
($53)
$17
$24
$21
$21
$0
$0
$0
$0
$0
$0
$0
$0
($27)
($37)
($33)
($32)
436
432
429
425
($0.06)
($0.09)
($0.08)
($0.07)
($511)
($309)
($77)
($155)
$190
$120
$40
$103
$0
$0
$0
$0
$0
$0
$0
$0
($321)
($189)
($37)
($52)
436
432
429
425
($0.74)
($0.44)
($0.08)
($0.12)
$4
$3
$6
$6
($33)
$41
($72)
($136)
($88)
$174
$339
$143
436
432
429
425
($0.20)
$0.40
$0.79
$0.34
Net Special Items
1Q14
2Q14
3Q14
4Q14
Net Earnings from Continuing Operations
1Q14
2Q14
3Q14
4Q14
($139)
$152
$552
$307
$80
($22)
($147)
($34)
1A
reconciliation to GAAP EPS is available at www.internationalpaper.com under the Investors tab at Webcasts and Presentations
xpedx is reflected as a Discontinued Operation in all periods presented.
37
Earnings Presentation | Fourth Quarter and Full-Year 2014
Operating Business EPS
1.01
.93
Impact of Mineral
Rights Gain
.93
.08
Final Land Sale
.83
.85
.73
.72
.76
.81
.77 .78
.77
.67
.42
.57
.52
.47 .45
.45
.40
.36
.31
.35
.95
.66 .64
.58
.61
.60
.53
.49
.49
.44
.38
.41
.29
.27
.22
.15
.12 .12
.07
.05
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
2008
2009
2010
2011
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.
38
Earnings Presentation | Fourth Quarter and Full-Year 2014
2012
2013
2014
4Q14 vs. 4Q13 EPS
.10
.03
(.06)
(.02)
(.01)
(.04)
.81
(.28)
.53
4Q13
Price / Mix
Volume
Operations
& Costs
Maintenance
Outages
Operating Earnings
39
Earnings Presentation | Fourth Quarter and Full-Year 2014
Input Costs
Corporate
& Other Items
Ilim JV
4Q14
Industrial Packaging | 4Q14 vs. 4Q13
38
18
(13)
(6)
484
Input Costs
4Q14
$ Million
486
(39)
4Q13
Price / Mix
Volume
Operations
& Costs
Segment operating profit before special items
40
Earnings Presentation | Fourth Quarter and Full-Year 2014
Maintenance
Outages
Industrial Packaging | Volume and Pricing Trends
4Q14 vs. 3Q14
Volume
Price /
Ton
Volume
Price /
Ton
N.A. Container1
4%
($1)
2%
$7
European Container
8%
(€16)
3%
(€13)
Business
Average IP volume and price realization (includes the impact of mix across all segments)
1 Corrugator plant sales on FBA shipping day basis
41
4Q14 vs. 4Q13
Earnings Presentation | Fourth Quarter and Full-Year 2014
NA Industrial Packaging Relative EBITDA Margins
25.5%
2014
23.6%
23.0%
22.7%
21.9%
21.3% 21.4% 2014
20.8%
21.3%
2014
17.0%
PCA1
IP
4Q13
3Q14
RockTenn
4Q14
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
1
42
Earnings Presentation | Fourth Quarter and Full-Year 2014
17.7%
17.8%
Consumer Packaging | 4Q14 vs. 4Q13
16
(4)
(4)
55
$ Million
15
6
(6)
Price / Mix
Volume
32
4Q13
Operations
& Costs
Maintenance
Outages
Segment operating profit before special items
43
Earnings Presentation | Fourth Quarter and Full-Year 2014
Input Costs
Other
4Q14
Consumer Packaging | Volume and Pricing Trends
4Q14 vs. 3Q14
NA Coated Paperboard
Foodservice
Volume
Price/Ton
Volume
Price/Ton
(14%)
$10
(4%)
$43
Revenue
Price
Revenue
Price
3%
NA
11%
NA
Average IP price realization (includes the impact of mix across all grades)
44
4Q14 vs. 4Q13
Earnings Presentation | Fourth Quarter and Full-Year 2014
NA Consumer Packaging Relative EBITDA Margins
18.6%
15.9%
14.9%
2014
13.6%
2014
11.6%
12.9%
8.8%
IP
MWV
4Q13
3Q14
4Q14
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
45
Earnings Presentation | Fourth Quarter and Full-Year 2014
13.3%
Printing Papers | 4Q14 vs. 4Q13
(12)
41
(15)
(16)
143
10
3
155
Other
4Q14
$ Million
1
4Q13
Price / Mix
Volume
Operations
& Costs
Maintenance
Outages
Segment operating profit before special items
46
Earnings Presentation | Fourth Quarter and Full-Year 2014
Input Costs
Courtland
Printing Papers | Volume and Pricing Trends
4Q14 vs. 3Q14
Business
Volume
Price / Ton
Volume
Price / Ton
NA Paper
(4%)
$3
(21%)
$72
NA Pulp1
2%
($16)
8%
$20
European Paper2
12%
(€14)
3%
(€21)
Average IP volume and price realization (includes the impact of mix across all grades)
1 Reflects Fluff and Market Pulp combined
2 Excludes Russia
47
4Q14 vs. 4Q13
Earnings Presentation | Fourth Quarter and Full-Year 2014
N.A. Printing Papers Relative EBITDA Margins
17.9%
14.4%
12.8%
14.5%
13.9%
TTM
2014
13.6%
12.8%
UFS
reports
2/6/15
IP
Domtar
4Q13
3Q14
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
48
Earnings Presentation | Fourth Quarter and Full-Year 2014
4Q14
Printing Papers | IP Brazil
$ Million
4Q13
3Q14
4Q14
Sales
$295
$266
$288
Earnings
$61
$58
$53
EBITDA Margin
31%
33%
28%
4Q14 vs. 3Q14
Business
Volume
Price/Ton
Volume
Price/Ton
15%
($1)
1%
$32
Domestic
25%
$6
9%
$52
Export
5%
($9)
(8%)
$5
Uncoated Freesheet
Segment operating profit before special items
IP Brazil results are reported in the Printing Papers segment
Average IP Brazil price realization (includes the impact of mix across all grades)
49
4Q14 vs. 4Q13
Earnings Presentation | Fourth Quarter and Full-Year 2014
Ilim Joint Venture | Full Year Financials
2009
2010
2011
2012
2013
2014
Sales Volume (Million short tons)
2.6
2.8
2.8
2.9
2.7
3.2
Sales ($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 ($MM)
197
516
591
291
208
470
(35)
12
(60)
39
(80)
(684)
163
528
531
330
128
(214)
EBITDA Margin
12%
28%
24%
17%
7%
(10%)
Depreciation ($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)
50
34
85
0
0
56
F/X Gain (loss)1
EBITDA ($MM)
Dividends (to IP) ($MM)
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 ~$1.3B at year end 2014)
50
Earnings Presentation | Fourth Quarter and Full-Year 2014
Ilim Joint Venture | Volume and Pricing Trends
4Q14 vs. 3Q14
Business
Pulp
4Q14 vs. 4Q13
Volume
Price/Ton
Volume
Price/Ton
14%
($23)
33%
($46)
Average Ilim JV (100%) volume and price realization (includes the impact of mix across all grades and destinations)
51
Earnings Presentation | Fourth Quarter and Full-Year 2014
Total Cash Cost Components | 4Q14 YTD
Chemicals
8%
Fiber
31%
Overhead
9%
Energy
10%
Freight
16%
Labor
12%
Materials
14%
North American mills only
52
Earnings Presentation | Fourth Quarter and Full-Year 2014
Global Input Costs vs. 3Q14 | $15MM Favorable, or $0.03/Share
By Business
By Input Type
$7
$2
$7
$6
$5
OCC
$4
Wood
Wood
($1)
Industrial
Packaging
Energy
Printing
Papers
Wood
Chemicals
Consumer
Packaging
Freight
OCC
Input costs ($MM) for continuing businesses
53
Earnings Presentation | Fourth Quarter and Full-Year 2014
Fiber
Energy Chemicals Freight
North America
Outside North America
Global Input Costs vs. 4Q13 | $9MM Unfavorable, or $0.01/Share
By Business
By Input Type
$1
$4
OCC
($4)
Wood
($5)
($6)
Wood
($2)
($6)
Industrial
Packaging
Energy
Printing
Papers
Wood
Chemicals
Consumer
Packaging
Freight
OCC
Input costs ($MM) for continuing businesses
54
Earnings Presentation | Fourth Quarter and Full-Year 2014
Fiber
Energy Chemicals Freight
North America
Outside North America
Global Input Costs vs. 2013 | $141MM Unfavorable, or $0.23/Share
By Business
By Input Type
$34
OCC
($22)
Wood
($44)
($58)
($46)
Wood
($51)
($95)
Industrial
Packaging
Printing
Papers
Consumer
Packaging
Fiber
Energy Chemicals Freight
North America
Wood
Energy
Chemicals
Freight
OCC
Input costs ($MM) for continuing businesses
55
Earnings Presentation | Fourth Quarter and Full-Year 2014
Outside North America
U.S. Mill Wood Delivered Cost Trend | Flat vs. 3Q14 Average Cost
130
125
120
115
110
105
100
95
90
2007
2008
2009
2010
Cost Indexed to January 2007 values
56
Earnings Presentation | Fourth Quarter and Full-Year 2014
2011
2012
2013 2014
U.S. OCC Delivered Cost Trend | 4% Decrease vs. 3Q14 Average Cost
200
180
160
140
120
100
80
60
2007 2008
2009 2010 2011
40
Cost Indexed to January 2007 values
57
Earnings Presentation | Fourth Quarter and Full-Year 2014
2012
2013 2014
Natural Gas Costs Trend | 4% Decrease vs. 3Q14 Average Cost
250
200
150
100
50
0
2007
2008
2009
2010
Cost Indexed to January 2007 values
NYMEX Natural Gas closing prices
58
Earnings Presentation | Fourth Quarter and Full-Year 2014
2011
2012
2013
2014
U.S. Fuel Oil Trend | 23% Decrease vs. 3Q14 Average Cost
340
290
240
190
140
90
2007
2008
2009
2010
40
Cost Indexed to January 2007 values
WTI Crude prices
59
Earnings Presentation | Fourth Quarter and Full-Year 2014
2011 2012 2013
2014
U.S. Chemical Composite Index Trend | 5% Decrease vs. 3Q14 Average Cost
200
175
150
125
100
75
2007
2008 2009 2010
2011
2012
Cost Indexed to January 2007 values
Delivered cost to U.S. facilities: includes Caustic Soda, Sodium Chlorate, Starch and Sulfuric Acid 2007 - 2008 excludes WY PKG
60
Earnings Presentation | Fourth Quarter and Full-Year 2014
2013 2014
2015 Global Consumption | Annual Purchase Estimates for Key Inputs
Commodity
Natural Gas (MM BTUs)
Energy
Non – U. S.
65,000,000 11,000,000
Fuel Oil (Barrels)
650,000
380,000
Coal (Tons)
415,000
640,000
52,000,000
8,000,000
4,600,000
630,000
Caustic Soda (Tons)
350,000
80,000
Starch (Tons)
390,000
100,000
Chemicals Sodium Chlorate (Tons)
160,000
57,000
LD Polyethylene (Tons)
37,000
-
Latex (Tons)
22,000
11,000
Wood (Tons)
Fiber
Old Corrugated Containers / DLK (Tons)
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
61
U. S.
Earnings Presentation | Fourth Quarter and Full-Year 2014