Investor Roadshow January 27, 2022
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Investor Roadshow January 27, 2022
Forward-Looking Statements Certain statements in this presentation that are not historical in nature may be considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “expects,” “anticipates,” “believes,” “estimates” and similar expressions identify forward-looking statements. These statements are not guarantees of future performance and 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) developments related to the COVID-19 pandemic, including the severity, magnitude and duration of the pandemic, the spread of new variants of the virus (including potential variants that may be more resistant to currently available vaccines and treatment), the effectiveness, acceptance and availability of vaccines, booster shots and medications, and associated levels of vaccination impacts of actions that may be taken by governmental authorities and private businesses in response to the pandemic, including vaccine mandates, impacts of the pandemic on global and domestic economic conditions, including with respect to commercial activity, our customers and business partners, consumer preferences and demand, supply chain shortages and disruptions, inflationary pressures and disruptions in the credit, capital or financial markets; (ii) risks with respect to climate change and global, regional, and local weather conditions, as well as risks related to our ability to meet targets and goals with respect to climate change and the emission of GHGs and other environmental, social and governance matters, (iii) the level of our indebtedness and changes in interest rates; (iv) industry conditions, including but not limited to changes in the cost or availability of raw materials, energy sources and transportation sources, the availability of labor and competitive labor market conditions, competition we face, cyclicality and changes in consumer preferences, demand and pricing for our products (including any such changes resulting from the COVID-19 pandemic); (v) domestic and global economic conditions and political changes, changes in currency exchange rates, trade protectionist policies, downgrades in our credit ratings, and/or the credit ratings of banks issuing certain letters of credit, issued by recognized credit rating organizations; (vi) the amount of our future pension funding obligations, and pension and healthcare costs; (vii) unanticipated expenditures or other adverse developments related to compliance with existing and new environmental, tax, labor and employment, privacy, anti-bribery and anti-corruption, and other U.S. and non-U.S. governmental laws and regulations (including new legal requirements arising from the COVID-19 pandemic); (viii) any material disruption at any of our manufacturing facilities or other adverse impact on our operations due to severe weather, natural disasters, climate change or other causes; (ix) risks inherent in conducting business through joint ventures; (x) our ability to achieve the benefits expected from, and other risks associated with, acquisitions, joint ventures, divestitures, spinoffs and other corporate transactions, (xi) cybersecurity and information technology risks; (xii) loss contingencies and pending, threatened or future litigation, including with respect to environmental related matters; (xiii) our exposure to claims from Sylvamo Corporation under our agreements with Sylvamo Corporation; (xiv) our failure to realize the anticipated benefits of the spin-off of Sylvamo Corporation and the qualification of such spin-off as a tax-free transaction for U.S. federal income tax purposes; and (xv) our ability to attract and retain qualified personnel. These and other factors that could cause or contribute to actual results differing materially from such forward-looking statements can be found in our press releases and SEC filings. In addition, other risks and uncertainties not presently known to the Company or that we currently believe to be immaterial could affect the accuracy of any forward-looking statements. The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. Statements Relating to Non-U.S. GAAP Measures While the Company reports its financial results in accordance with accounting principles generally accepted in the United States (GAAP), during the course of this presentation, certain non-GAAP financial measures are presented. Management believes non-GAAP financial measures, when used in conjunction with information presented in accordance with GAAP, can facilitate a better understanding of the impact of various factors and trends on the Company’s financial condition and results of operations. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company’s performance. The non-GAAP financial measures in this presentation have limitations as analytical tools and should not be considered in isolation or as a substitute for an analysis of our results calculated in accordance with GAAP. In addition, because not all companies use identical calculations, our presentation of non-GAAP financial measures in this presentation may not be comparable to similarly titled measures disclosed by other companies, including companies in our industry. A reconciliation of all presented non-GAAP measures (and their components) to GAAP financial measures is available on IP’s website at http://www.internationalpaper.com/performance/presentations-events/webcasts-presentations. Printing Papers Discontinued Operations As a result of the spin-off of our global Printing Papers business on October 1, 2021, the Printing Papers business segment has been eliminated. Amounts from 2019 to 2021 have been adjusted to reflect this business as a discontinued operation. Ilim JV and Sylvamo Corporation Investment Information All financial information and statistical measures regarding our 50/50 Ilim joint venture in Russia (“Ilim”), and our 19.9% ownership interest in Sylvamo Corporation, other than historical International Paper Equity Earnings and dividends received by International Paper, have been prepared by the management of Ilim and Sylvamo Corporation, respectively. Any projected financial information and statistical measures reflect the current views of Ilim and Sylvamo Corporation 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” above. Investor Roadshow I January 27, 2022 2
Table of Contents
Investment Thesis…………………………………………………………...4-19
Building a Better IP………………………………………………………...20-25
Business Overview………………………………………………………...26-29
Appendix………………………………………………………………………...30
Industrial Packaging …………………………………………………31-39
Global Cellulose Fibers……………………………………………...40-45
Ilim Joint Venture……………………………………………………..46-49
Other Financial Information………………………………………...50-65
Footnotes ………………………………………………………………66-69
Contact Information………………………………………………………70
Investor Roadshow I January 27, 2022 3
Investment Thesis
IP Investment Thesis
Our Vision is to be among the most successful, sustainable
and responsible companies in the world.
Our Mission is to improve people’s lives, the planet and our
company’s performance by transforming renewable resources
into products people depend on every day.
Investor Roadshow I January 27, 2022 5
Investment Thesis | About Us
Who We are one of the world’s leading producers of fiber-based
We Are corrugated packaging and absorbent pulp
We transform renewable resources into recyclable products
What
people depend on every day
We Do
How We do the right things, in the right ways, for the right reasons,
We Do It all of the time
Investor Roadshow I January 27, 2022 6
IP Investment Thesis | The IP Way Forward
The IP Way Forward is our
strategic framework for
achieving our vision and creating value
for all stakeholders
for generations to come
Investor Roadshow I January 27, 2022 7
Investor Roadshow I January 27, 2022 8
Vision 2030 | Building a Better Future for People, the Planet and our Company Investor Roadshow I January 27, 2022 9
International Paper Awards & Recognitions
International Paper Awards & Recognitions1
Ethisphere Institute Member of the
Fortune Magazine 1 World’s Most Ethical FTSE4Good Index Series
World’s Most Admired Companies® 2022 for for demonstrating strong
Companies® 2022 for 16 consecutive years Environmental, Social
19 years and Governance
(ESG) practices
Women’s Choice Award® Forbes 2021 The
2021 Woman’s Choice Award Best Employers
Best Companies to Work For for Diversity
Diversity & Millennials
Investor Roadshow I January 27, 2022 10IP Investment Thesis | Strategic Framework
Strategy Fiber-based Corrugated Packaging and
Absorbent Pulp
Advantaged Positions Attractive Markets Shareholder Value
Low cost, competitive assets Good market growth rates Delivers strong and
sustainable free cash flows
Operational excellence Customers and markets that
value our products and Increases intrinsic value with
Availability and access to low cost, innovations return spreads above our
sustainable fiber cost of capital (ROIC >
Strong growing supply positions WACC)
Capability to provide differentiated and
innovative value propositions Access to the best global Supports policies to return
customers and segments cash to shareholders
Opportunity for optimization and
productivity gains Maintain strong balance
sheet
Renewable Natural Resources
Investor Roadshow I January 27, 2022 11Capital Allocation Framework | Maximize Value Creation
Debt / EBITDA1
(Target 2.5 – 2.8x)
2.8x
2.8x
$1.8
$1.6 2.9x
Investment
Invest to Excellence $1.1
2.5x
Strategic Fit | Compelling Value | Disciplined $10.7 $9.8
$8.1
$5.6
Cost reduction capex
Strategic capex
Return Cash to Shareholders 2018 2019 2020 2021
Selective M&A Balance Sheet Debt Pension Gap Op. Leases
Sustainable dividend at 40 – 50% of FCF
Share repurchases
Cash to Shareowners
($ Billions)
$0.7 $0.8
Maintain Strong Balance Sheet $0.5
1
Target debt to EBITDA 2.5x to 2.8x
Pension plan fully funded $0.8 $0.8 $0.8 $0.8
2018 2019 2020 2021
Dividends Share Repurchase
Investor Roadshow I January 27, 2022 12Free Cash Flow1 | Strong, Sustainable Free Cash Flow
5-Year
Average
$2.0
$2.3 $2.3
$2.2
$2.1
$2.0
$1.8 $1.8 $1.9
$1.7 $1.7
$1.7 $1.7
$1.6 2
$1.5
Billion
$1.0
22021 Free Cash Flow includes tax payments
$0.7 of ~$0.5B related to monetization transactions
and CARES Act payroll tax deferral
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Investor Roadshow I January 27, 2022 13Expanded Spread of Adj. ROIC1 Above Cost of Capital
3-Year
Average
8.9%
13.2%
11.4%
9.7% 10.0% 9.9% 9.6% 9.8%
9.5% 9.2%
8.1% 8.3%
7.5% 7.4%
6.3% 6.5%
2021 WACC
5.0%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Printing Papers business segment has been eliminated and amounts from 2019 to 2021 have been adjusted to reflect this business as a discontinued operation.
Investor Roadshow I January 27, 2022 14Full-Year 2021 Results
10% revenue growth and 50% earnings per share growth
Adjusted Operating EPS1
Highly challenging operating environment
Serviced strong customer demand while managing through
significant operational and supply chain constraints
$3.20
Substantial cost pressure from inputs and distribution 2021
Operated with sub-optimized system
Strong Ilim JV performance with Adjusted EBITDA2 of $1.1B
$2.14
Executed our capital allocation framework 2020
Focused our portfolio
Reduced debt by $2.5B
$3.09
Returned $1.6B to shareowners 2019
Initiated meaningful actions to materially lower cost structure
and accelerate profitable growth
Investor Roadshow I January 27, 2022 15Full-Year 2021 Financials
2019 2020 2021 Adjusted EBITDA1 ($MM)
Sales ($B) $18.4 $17.6 $19.4
2
Adjusted EBIT ($MM) $1.9 $1.5 $1.5 $2.6
3
2021
Adjusted Operating EPS $3.09 $2.14 $3.20
1
Adjusted EBITDA ($MM) $2.9 $2.6 $2.6
1 $2.6
Adjusted EBITDA Margin 16.0% 14.6% 13.4% 2020
Equity Earnings ($MM) $250 $77 $313
4
Free Cash Flow ($MM) $2.3 $2.3 $1.5 $2.9
2019
Investor Roadshow I January 27, 2022 16Fourth Quarter 2021 Financials
4Q21 Highlights
Continued strong revenue growth in a
4Q20 3Q21 4Q21 solid demand environment
Sales ($B) $4.4 $4.9 $5.1 Volume and operating costs impacted
1 by labor and supply chain constraints
Adjusted EBIT ($MM) $301 $478 $368 related to Omicron
2
Adjusted Operating EPS $0.53 $1.10 $0.78 Input and distribution costs higher than
Adjusted EBITDA
1
($MM) $582 $758 $645 anticipated
1 Free cash flow impacted by cash taxes
Adjusted EBITDA Margin 13.1% 15.4% 12.7%
of ~$0.3B related to asset monetizations
Equity Earnings ($MM) $64 $94 $66 and CARES Act
3 Capital allocation:
Free Cash Flow ($MM) $695 $519 $(94)
Debt reduction of $1.4B
Dividends of $178MM
Share repurchases of $413MM
Investor Roadshow I January 27, 2022 172022 Outlook | Accelerating Value Creation
$ Billions 2022
2021 Assumptions
(Unless Noted Otherwise) Outlook
Demand growth normalizes post-Omicron
Adjusted EBITDA1 $2.6 $3.1 - $3.4
Includes only the impact of previously published price
increases
Capex $0.5 $1.1 Optimize mill and box system from 2021 disruptions
$200 - $225MM gross benefits from Building a Better IP
Input and distribution costs remain elevated
2
Free Cash Flow $1.5 $1.3 - $1.5
Maintenance outage expense of $572MM
Targeting $1.1B capex contingent on equipment and
Net Interest Expense $337MM $290MM labor availability
Corporate Expense $134MM $80MM
2021 FCF includes ~$0.3B generated by Printing Papers
Effective Tax Rate 19% 25%
Investor Roadshow I January 27, 2022 18Select Financial Metrics1
$ Million 2020 2021 2022F
Maintenance Outage Expense $378 $531 $572
Maintenance & Regulatory $430 $415
Capex
Targeting
Cost Reduction $30 $10 $1,100
Strategic $290 $125
Depreciation & Amortization $1,090 $1,097 $1,145
Net Interest Expense $447 $337 $290
Corporate Expense $62 $134 $80
Effective Tax Rate 25% 19% 25%
Investor Roadshow I January 27, 2022 19Building a Better IP
Creating Value Through Focus
HIGHLY ADVANTAGED POSITION IP TO BUILD FOUNDATION
CORRUGATED PACKAGING ACCELERATE VALUE FOR LONG-TERM
FOCUSED COMPANY CREATION SUCCESS
– – –
Tailored solutions delivered by our Building on strength of our Agile organizational and operating
superior converting capabilities industrial packaging business model
and the broadest geographic
Taking meaningful actions Commitment to capital allocation
reach in North America
to grow earnings and cash framework and investment
World-class, low-cost and flexible generation excellence
mill system with unmatched suite
of fiber, basis weight and print
surface options
Investor Roadshow I January 27, 2022 21Building a Better IP | Creating Value Through Focus
IP 2021
1st Global
Russia Cellulose
1st 1st* Ilim JV Pulp
Fibers 14%
14%
Revenue by
Business2
86%
86% Industrial
Packaging
North America EMEA
Targeted Positions
in Mediterranean Region
$19.4B Sales1
4%
96%
~20,000 Customers
28 Mills | 221 Converting Facilities
Investor Roadshow I January 27, 2022 22IP | Highly Advantaged Corrugated Packaging Company
Industrial Packaging
–
• Strong strategic profile
• Unmatched capabilities and scale
• Significant earnings growth catalysts
• Low-cost and flexible mill system
$16.3B Sales1
~20,000 Customers
20 Mills | 219 Converting Facilities IP Containerboard Mill
IP Converting Facility
Investor Roadshow I January 27, 2022 23IP | Building on Strength of Corrugated Packaging Business
Unmatched capabilities and scale Low-cost and flexible mill system
219 converting facilities 20 mills with ~90% of capacity 1st quartile cost
~20,000 ~2 million ~350 ~1,000 ~3,500
active packaging formers at
customers unique box designs designers
innovation ideas customer locations
Investor Roadshow I January 27, 2022 24Building a Better IP | Accelerating Value Creation
Incremental Annual Earnings Growth
$ Millions Initiatives deliver a net ~$350 to $430MM
incremental earnings in 2024
$150
to Streamline and simplify IP
$125
Drive process optimization savings
$150
to Scale new tools and approaches
$125
Leverage advanced technology and data
analytics
$225
to Accelerate profitable growth
$200 2023 2024 Build on strength of corrugated packaging
-$95
business
Dis-synergies 2022 Drive meaningful improvement in GCF
Cumulative performance
Earnings $105 to $130 $230 to $280 $350 to $430
Growth
Investor Roadshow I January 27, 2022 25Business Overview
International Paper | 2021 Sales in Packaging and Pulp
Positioned in attractive markets with low-cost assets that generate strong free
cash flow and returns above our cost-of-capital
14%
Global
$1.5B $2.7B1 Cellulose 86%
Net Sales Fibers
Total Sales 14%
$17.7B EMEA
Net Sales Ilim JV
Revenue by 86%
Business2
North America Industrial
Packaging
Investor Roadshow I January 27, 2022 Full-year 2021 net sales data; does not reflect total company sales
27IP N.A. Exports | Leveraging Strategic Export Opportunities
Fluff Pulp1
~40%
(~90% of N.A. production) Asia
~45%
EMEA ~15%
Containerboard
(~10% of N.A. production) ~45%
Latin America ~15%
~40%
% of export volume
shipped to select regions
Investor Roadshow I January 27, 2022 28N.A. Industrial Packaging
Weyco Packaging TIN Acquisition &
Acquisition & Integration Integration
25% 24% 24% 23%
Thousands
22% 22% 22% 22%
20% 20%
20% 19% 19%
18%
17%
Adj. EBITDA1 ($B)
3.0
15% 15% 2.8
2.7 2.7
15%
Business
13% 2.5 2.6 2.5
2.4
Adj. EBITDA1 %
2.3
2.0
10%
1.6
1.3 1.3
5%
0.8
0.4 0.5
0%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Investor Roadshow I January 27, 2022 29Appendix
N.A. Containerboard | Supply Positions
Stone
13%
Others
26% IP
Smurfit 30%
7%
1995 Producer GP 2022 Producer
Others 9%
Position Pratt
Position
50%
4%
WY
7% GP
9%
IP WRK
7% PCA 21%
TIN 10%
7%
Source: 2022 estimated effective containerboard capacity based on RISI Capacity Reports, SEC Filings, and IP data and analysis
Investor Roadshow I January 27, 2022 31N.A. Industrial Packaging Channels
IP’s channels to market provide choices for maximizing value
N.A. Mill System Capacity Other Uses1
~13.9 Million Tons ~0.4 Million Tons
Containerboard
~13.5 Million Tons
IP Box Plants Open Market
~80% ~20%
U.S. Non-U.S. Domestic Export
~95% ~5% ~55% ~45%
EMEA Lat Am Asia
~45% ~40% ~15%
Investor Roadshow I January 27, 2022 Source: 2022 estimates based on IP data and analysis
32Global Containerboard Industry | Total Containerboard Trade Flows
Europe
8.5MM
Europe
5.0MM Asia
6.2MM
N America
Estimated 2022 5.1MM
Global Demand
Africa Asia
= 208MM tons C America 1.4MM 8.7MM
Mid East
0.9MM
0.2MM
Countries with Kraftliner Net Import Oceania
S America
or Export greater than 100M tons… S America 0.7MM
1.4MM Africa
Net Export, Tons 0.2MM
Net Import, Tons 0.2MM
Investor Roadshow I January 27, 2022 Source: 2022 RISI trade estimates and IP analysis
33N.A. Containerboard Mill System | ~13.9MM Tons Capacity
1,800
1,600 Kraft Linerboard Mill
Recycled Containerboard Mill
1,400 (#) Paper Machines (31)
1,200
Thousand Tons
1,000
800
600
400
200
0
Rome (2)
Prattville (2)
Valliant (3)
Pine Hill (2)
Orange (2)
Savannah (3)
Vicksburg (1)
Pensacola (1)
Red River (2)
Bogalusa (2)
Springfield (1)
Xalapa (1)
Maysville (1)
Newport (1)
Henderson (1)
Mansfield (3)
Cedar River (2)
Riverdale (1)
Source: 2022 estimates based on IP data and analysis;
Investor Roadshow I January 27, 2022 chart includes Saturating Kraft & Gypsum liner 34Linerboard Global Cost Curve | 94% of Capacity in 1st Quartile
$1,200
Kraft Linerboard Mill
Cash Costs + Delivery to Chicago
Recycled Containerboard Mill
$1,000
Manufacturing Costs ($/Ton)
$800
Bogalusa
$600 Valliant
Pine Hill Vicksburg
Orange Savannah
Prattville
Rome
Newport
$400
Mansfield Springfield Xalapa
Pensacola
Henderson
$200 Riverdale Red River
Maysville
Cedar River
$0
0 20,000 40,000 60,000 80,000 100,000
Cumulative Annual Production (Thousand Tons)
Investor Roadshow I January 27, 2022 Source: FisherSolve ™ 4Q20 data
35Well-Positioned in Attractive Customer Segments
Customer Segment Industry IP
Food & Beverage ~45%
Processed Food
Fresh Produce
Protein (Meat & Poultry)
Beverage
Other Non-Durables ~30%
Chemicals & Pharmaceuticals
Paper, Towels & Tissue
Other Non-Durables
Durable Goods & Distribution ~25%
E-commerce, Shipping & Distribution
Durable Goods
Fastest Growth
Investor Roadshow I January 27, 2022 36200
300
400
500
600
700
800
900
Jan-06 $/short ton
Apr-06
Jul-06
Oct-06
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Apr-08
Jul-08
Investor Roadshow I January 27, 2022
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Oct-12
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jul-14
Oct-14
Jan-15
Apr-15
$200
$300
$400
$600
$700
$800
$500
Jul-15
Oct-15
Jan-16
Apr-16
Containerboard Pricing
Jul-16
Oct-16
Jan-17
Apr-17
Jul-17
Oct-17
U.S. Containerboard | Industry Statistics
Jan-18
Apr-18
Jul-18
Oct-18
Jan-19
Source: RISI As of Jan 2022, RISI only reports, OMP = Open Market Price
Apr-19
Jul-19
Oct-19
Jan-20
Apr-20
Jul-20
Oct-20
Jan-21
Apr-21
Jul-21
Oct-21
Jan-22
200
300
400
500
600
700
800
900
$/short ton
Medium (OMP)
Linerboard (OMP)
Medium (List Price)
Linerboard (List Price)
37Economic Indicators and U.S. Box Demand
160
150
Indexed 100 = 2001
140
130
120
110
100
90
80
70
US Box Shipments US Nondurable Industrial Production US GDP US Industrial Production
Source: Oxford Economics; RISI North
America Containerboard Historical Data
Investor
Investor Roadshow
Roadshow I January
I April 27, 2022
29, 2021 38U.S. Corrugated Packaging Shipments
RISI Forecast
457
448
Shipments (BSF)
439
430
418 423
405 401 407
390 396 391 391 395 390 386 392 394
373 378 380 379 380 374 376
369
357 359 360 360 364
345
Historical Data Source: Fibre Box Association
Investor Roadshow I January 27, 2022 2022-2026: 1.9% CAGR (RISI – February 2022, 5-yr forecast) 39Global Cellulose Fibers | Business Overview
Grande Prairie,
Alberta
Franklin, VAVA
Franklin, Market Pulp Mill
Eastover SC
NewNew
Bern, NC NC Gdansk,
Bern, Fluff Pulp Mill
Poland
Riegelwood, NC
Riegelwood, NC
Columbus, MSMS
Columbus,
Georgetown,
Georgetown,SCSC Converting facilities
Port Wentworth, GA
Port Wentworth, GA
Pensacola, FLFL Flint River,
Flint GAGA
River,
Pensacola,
Market Pulp ~20%
Current
Product Mix1
Total Capacity ~3.3MM MTPY Targeted Mix
Fluff Pulp & Specialties 2.7MM 83% ~80% Fluff Pulp &
Specialties
Market Pulp 0.6MM 17%
Investor Roadshow I January 27, 2022 40Absorbent Hygiene Products (AHP) Outlook | Demand & Growth
AHP demand linked to disposable incomes in emerging markets
10,000
8,000
Disposable Incomes
USD per capita
6,000
4,000
2,000
0
2000 2010 2020 2024 2030
Middle East & Africa Latin America Asia Pacific China
Investor Roadshow I January 27, 2022 Source: Euromonitor
41Global Market Pulp Demand Outlook | Bleached Softwood
2021 – 2025
25.1MM MTPY CAGR = 2.0% 27.2MM MTPY CAGR
30
Rest of World 3.3%
25 Rest of World
20 4.0%
Asia
Asia
15
Eastern Europe Eastern Europe 1.4%
10
(1.7)%
Western Europe Western Europe
5 Latin America Latin America 0.9%
North America North America 0.7%
0
2021 2025
Investor Roadshow I January 27, 2022 Source: PPPC November 2021 Chemical Market Pulp Forecast SRN
42Global Cellulose Fibers | Advantaged Position in Attractive Markets
Fluff Demand by Region and End Use
Demand
~6MM MTPY
2020 - 2025 2020 - 2025
CAGR CAGR
MEA and Airlaid 12% 1-2%
3 - 4%
Other Asia
Japan (4) – (3)%
1-2%
Feminine Care
China 5 - 6% 24%
Well positioned to serve
LatAm 1 - 2% Adult
Incontinence 3-4% growing demand with global,
32% strategic customers
Europe 1 - 2%
Baby Diapers (1)-0%
North America 0 - 1% 32%
Investor Roadshow I January 27, 2022 Source: IP analysis, Hawkins Wright
43IP Global Pulp Capacity | Total of 3.3MM MTPY1
Ilim JV
2.2 MM
North America
3.3 MM
Pulp mill
Investor Roadshow I January 27, 2022 441,000
1,200
1,400
1,600
1,800
0
200
400
600
800
Jan-06
USD/admt
Apr-06
Jul-06
Oct-06
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Apr-08
Jul-08
Investor Roadshow I January 27, 2022
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Pulp | Industry Statistics
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Source: RISI
Oct-12
Jan-13
Apr-13
Jul-13
Oct-13
Units shown in metric tons
Jan-14
Apr-14
Jul-14
Oct-14
Global Pulp Prices
Jan-15
Apr-15
Jul-15
Oct-15
Global pulp prices delivered to Northern Europe;
Jan-16
Apr-16
Jul-16
Oct-16
NBSK (dne)
Jan-17
Apr-17
Jul-17
Oct-17
Jan-18
Apr-18
Jul-18
Oct-18
Jan-19
BEK (dne)
Apr-19
Jul-19
Oct-19
Jan-20
Apr-20
Jul-20
Oct-20
Jan-21
Fluff (dne)
Apr-21
Jul-21
Oct-21
Jan-22
45ILIM Joint Venture | Production Overview
Well Positioned to Serve Target Markets
Ilim JV Production tonnes1 2021
Bratsk Mill
Total 1,294
Softwood bleached pulp 723
Koryazhma
Hardwood bleached pulp 267
KLB 304
Ust-Ilimsk
Bratsk Koryazhma Mill
Total 1,368
Kazakhstan Mongolia PM7 paper 173
PM7 CFS 73
China
Pulp (BHKP, UKP) 325
KLB and others 797
Ust-Ilimsk Mill
Total 847
Pulp (BSKP, UKP) Total 847
Hardwood bleached pulp -
Investor Roadshow I January 27, 2022 46ILIM JV | Well Positioned to Serve Growing Pulp and Packaging Markets
China will account for more than 38% of world’s incremental
market pulp growth
Cost positions with favorable access to China NBSK customers
Ust-Ilimsk new kraftliner PM expected to start up 2H22
~600,000 tonnes of containerboard capacity
Access to significant Russian wood basket
$1,000
Cash Cost + Delivery to Beijing, China
$800
Manufacturing Costs
$600
($/Ton)
Ust-Ilimsk
$400
$200
Bratsk
$0
0 5,000 10,000 15,000 20,000
Cumulative Capacity (Thousand Tons)
Investor Roadshow I January 27, 2022 Source: FisherSolve™ 3Q20 data
47ILIM Joint Venture | Full Year Financials
2013 2014 2015 2016 2017 2018 2019 2020 2021
Sales Volume (Million metric tonnes) 2.4 2.9 3.0 3.2 3.1 3.3 3.2 3.5 3.4
Sales ($B) 1.9 2.1 1.9 1.9 2.2 2.7 2.2 2.0 2.7
Debt ($B) 1.5 1.4 1.2 1.5 1.6 1.6 2.2 2.2 2.5
Adj. Operating EBITDA ($MM) 203 459 694 680 695 1,207 706 519 1,091
F/X Gain (Loss)1 ($MM) (80) (674) (188) 63 37 (204) 79 (131) 22
EBITDA ($MM) 123 (215) 506 743 732 1,003 785 388 1,113
Depreciation ($MM) 176 188 128 121 151 156 134 161 173
EBIT ($MM) (53) (403) 378 622 581 847 651 227 822
Interest Expense ($MM) 39 69 52 81 88 70 82 85 118
Net Income / (Loss) ($MM) (72) (359) 237 385 362 571 424 113 613
IP Equity Earnings / (Loss) ($MM) (46) (194) 131 199 183 290 207 48 311
Dividends (to IP) ($MM) 0 56 35 60 134 128 246 141 154
Investor Roadshow I January 27, 2022 48ILIM Joint Venture | 4Q21 vs. 3Q21
$ Million 4Q20 3Q21 4Q21 2020 2021
Sales Volume 932 833 829 3,460 3,365
(thousand metric tonnes)
Sales $541 $729 $699 $2,015 $2,692
1
EBITDA $201 $318 $273 $388 $1,113
F/X (Impact
2
of USD Net
$50 $0 $0 $(131) $0
Debt)
Adj. Operating Outstanding YoY earnings growth
3 $151 $318 $273 $519 $1,113
EBITDA 4Q21 volume and costs impacted by distribution
IP Equity Earnings constraints
4 $53 $95 $66 $48 $311
(Loss) 4Q21 EBITDA margin 39%
See footnote 5 for Ilim Group Net Debt at December 31, 2021
Received dividend of $10MM in 4Q21, bringing
full-year dividends from Ilim to $154MM
Investor Roadshow I January 27, 2022 49Adj. Operating EPS1
1.65
1.56
1.27
1.19
1.10
1.01
.93 .91 .94 .88
.90 .91
.87 .87 .84 .82
.79 .82 .83 .81
.76 .77 .78 .77 .78 .78
.72 .74 .78
.72 .69
.67 .66 .67 .66
.58 .58 .59 .56 .56 .53
.49 .52 .50
.44 .46
.34
.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
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Printing Papers reflected as
Discontinued Ops. 2019 - 2021
Investor Roadshow I January 27, 2022 50Free Cash Flow
$ Million 2019 4Q20 2020 3Q21 4Q21 2021
Cash Provided by
$3,610 $789 $3,063 $645 $1071 $2,0302
Operations
Cash Invested in
Capital Projects, Net of $(1,276) $(94) $(751) $(126) $(201) $(549)
Insurance Recoveries
Free Cash Flow $2,334 $695 $2,312 $519 $(94) $1,481
14Q21 cash provided by operations includes tax payments of ~$0.3B related to monetization transactions and CARES Act payroll tax deferral
22021 cash provided by operations includes tax payments of ~$0.5B related to monetization transactions and CARES Act payroll tax deferral
Investor Roadshow I January 27, 2022 51Balance Sheet | Financial Strength
Debt / EBITDA1
(Target 2.5 – 2.8x)
2.8x
2.8x
$2.0 2.9x 2021 Highlights
$1.8
$1.6 Pension Gap
2.5x Reduced balance
Pension Gapsheet debt by $2.5B
$1.1 Pension Gap
Pension Gap
2.5x Limited near-term maturities
$11.2 $10.7
$9.8 Qualified Pension plan 105% funded status
$8.1
$5.6
$1.3B cash balance
Balance at year-end
Balance
Sheet Sheet
Debt Debt
2017 2018 2019 2020 2021
Balance Sheet Debt Pension Gap Op. Leases
Investor Roadshow I January 27, 2022 52Debt Maturity Profile | Maturities as of December 31, 2021
$800
$700
$600
$500
$ Million
$400
$300
$200
$100
$0
2037
2041
2045
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2038
2039
2040
2042
2043
2044
2046
2047
2048
Investor Roadshow I January 27, 2022 53Pension Plan Update1 | As of December 31, 2021
Key Variables 2019 2020 2021
Assumed Rate of
7.25% 7.00% 6.40%
Annual Pension Expense2 Return
545
Discount Rate 3.40% 2.60% 2.90%
447
Average Annualized Returns3
387
364 2021 7.7%
290 Past Five Years 14.0%
Million
209 Past Ten Years 11.3%
93 Portfolio Asset Allocation
32 2021 12-31-2021 12-31-2020
2021 Target Actual Actual
2013 2014 2015 2016 2017 2018 2019 2020 2021 Equity 14% - 25% 18% 40%
(112) Bonds 62% - 78% 68% 48%
Real Estate 4% - 10% 8% 7%
Other 2% - 7% 6% 5%
Investor Roadshow I January 27, 2022 54Capital Spending
% of Depreciation
$1,600 125%
$1,400
$1,200 ~$1,100 100%
$1,000
Million
$800 75%
$600
$400 50%
$200
$0 25%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022E
Maintenance Regulatory Strategic Cost Reduction % of Depreciation
Investor Roadshow I January 27, 2022 Reflects continuing operations
552022 Capital Investment
Maintenance & Cost Reduction Strategic
Regulatory
Creating value through pipeline
Maintaining world-class, Reinvesting in core businesses
of high return projects
low-cost, advantaged assets with higher growth profile
≥ 30% IRR
$0.2B $0.4B
$1,200
Cash Cost (Delivered to Chicago)
IP N.A. Containerboard Mills
$1,000
$800
$600
Pennsylvania
$400
$200
$0
0 50,000 100,000
Existing IP Box Plants
Cumulative Annual Containerboard
Global Production (Thousand Tons)
New IP Box Plant – Atglen, PA
Investor Roadshow I January 27, 2022 Source: IP Analysis, FisherSolve™ 4Q20 data
56Maintenance Outages Expenses | 2022 Forecast
$ Million 1Q22F 2Q22F 3Q22F 4Q22F 2022F
Industrial Packaging $165 $102 $59 $69 $395
North America $150 $102 $56 $68 $376
Riverdale Papers $15 - - - $15
EMEA - - $3 $1 $4
Global Cellulose Fibers $71 $41 $25 $40 $177
North America $56 $41 $25 $40 $162
Georgetown Papers $15 - - - $15
Total Impact $236 $143 $84 $109 $572
Investor Roadshow I January 27, 2022 57North America Downtime
Containerboard Cellulose Fibers
Thousand Tons
Thousand Tons
47
66 9
83 3 270 60 63
104 123 15 41 50 48 45 2
1 117
86 105 68 70 18
7 36 63 14 1 15
Economic
Maintenance
Investor Roadshow I January 27, 2022 58Total Cash Components | 2021
Energy
9%
Fiber
40%
Chemicals
6%
Overhead
12%
Labor Materials
13% 19%
Investor Roadshow I January 27, 2022 North American mills only
59U.S. Mill Wood Delivered Cost Trend | 4Q21 Average Cost Up 5% vs. 3Q21
130
125
120
115
110
105
100
95
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
90
Investor Roadshow I January 27, 2022 IP data, cost Indexed to January 2007 values
60U.S. OCC Delivered Cost Trend | 4Q21 Average Cost Up 2% vs. 3Q21
290
240
190
140
90
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
40
IP data, cost Indexed to January 2007 values
Investor Roadshow I January 27, 2022 61U.S. Natural Gas Cost Trend | 4Q21 Average Cost Up 26% vs. 3Q21
250
200
150
100
50
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
0
IP data, cost Indexed to January 2007 values
Investor Roadshow I January 27, 2022 NYMEX Natural Gas closing prices 62U.S. Fuel Oil Cost Trend | 4Q21 Average Cost Up 9% vs. 3Q21
300
250
200
150
100
50
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
0
IP data, cost Indexed to January 2007 values
Investor Roadshow I January 27, 2022 WTI Crude prices 63U.S. Chemical Composite Cost Trend | 4Q21 Average Cost Up 6% vs. 3Q21
200
175
150
125
100
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
75
IP data, cost Indexed to January 2007 values
Delivered cost to US facilities: includes Caustic Soda, Sodium Chlorate, Starch and Sulfuric Acid 2007 - 2008 excludes WY PKG
Investor Roadshow I January 27, 2022 64Global Consumption | Annual Purchases for Key Inputs
Commodity North America Non – North America
Natural Gas (MMBTUs) 90,000,000 1,700,000
Energy Fuel Oil (Barrels) 230,000 0
Coal (Tons) 60,000 0
Wood (Tons) 48,600,000 0
Fiber
Old Corrugated Containers / DLK (Tons) 5,100,000 500,000
Caustic Soda (Tons) 370,000 2,000
Chemicals Starch (Tons) 240,000 30,000
Sodium Chlorate (Tons) 140,000 0
Investor Roadshow I January 27, 2022 65Footnotes Slide 10 1 ©2022 International Paper Company. All rights reserved. International Paper logo Is a registered trademarks of International Paper Company. From FORTUNE Magazine, February 2022, ©2022 Fortune pMedia IP Limited. FORTUNE and The World’s Most Admired Companies are registered trademarks of Fortune Media IP Limited and are used under license. FORTUNE and Fortune Media IP Limited are not affiliated with, and do not endorse the products or services of, International Paper Company. “World’s Most Ethical Companies” and “Ethisphere” names and marks are registered trademarks of Ethisphere LLC. FTSE Russell (the trading name of FTSE International Limited and Frank Russell Company) confirms that International Paper has been independently assessed according to the FTSE4Good criteria, and has satisfied the requirements to become a constituent of the FTSE4Good Index Series. Created by the global index provider FTSE Russell, the FTSE4Good Index Series is designed to measure the performance of companies demonstrating strong Environmental, Social and Governance (ESG) practices. The FTSE4Good indices are used by a wide variety of market participants to create and assess responsible investment funds and other products. All product names, logos and brands are property of their respective owners. Slide 12 1 Moody’s methodology is used to calculate Adjusted Debt to EBITDA ratio. Moody’s adjusts debt to include balance sheet debt, operating leases/deferred tax liability and debt issuance expense, and pension gap. EBITDA is adjusted to include lease and pension adjustments (non-GAAP). Slide 13 Free Cash Flow, a non-GAAP financial measure, reflects cash provided by continuing operations for 2006 – 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, 2016 & 2017, 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 $30MM cash received from Guaranty Bank insurance reimbursements. 1 For 2019 onward, see slide #51 for a reconciliation of cash provided by operations to Free Cash Flow, a non-GAAP financial measure Slide 14 Years 2006-2012 are as reported in the 10-K for each year at time of filing. Years 2013-2017 restated to reflect N.A. Consumer Packaging and xpedx as discontinued operations. Years 2019-2021 restated to reflect Printing Papers as discontinued operations. 1 Adjusted ROIC, a non-GAAP financial measure, based on Adjusted Operating Earnings before Interest / Average Invested Capital [Equity (adjusted to remove pension related amounts in OCI, net of tax) + Interest- bearing Debt] Slide 15 1 Adjusted operating EPS, a non-GAAP financial measure based on Adjusted Operating Earnings (defined as Net Earnings Attributable to International Paper (GAAP) before special items and non-operating pension expense (income)) 2 Before special items and non-operating pension expense (income) (non-GAAP) Investor Roadshow I January 27, 2022 66
Footnotes Slide 16 1 Before special items and non-operating pension expense (income) (non-GAAP) 2 Adjusted EBIT is Business Segment Operating Profit defined as earnings (loss) before income taxes and equity earnings, but including the impact of non-controlling interests, and excluding interest expense, net, corporate expenses, net, corporate net special items, business net special items and non-operating pension expense. Business segment operating profit is a measure reported to our management for purposes of making decisions about allocating resources to our business segments and assessing the performance of our business segments and is presented in our financial statement footnotes in accordance with ASC 280. 3 Adjusted operating EPS, a non-GAAP financial measure based on Adjusted Operating Earnings (defined as Net Earnings Attributable to International Paper (GAAP) before special items and non-operating pension expense (income)) 4 See slide #51 for a reconciliation of cash provided by operations to Free Cash Flow, a non-GAAP financial measure Slide 17 1 Before special items and non-operating pension expense (income) (non-GAAP) 2 Adjusted operating EPS, a non-GAAP financial measure based on Adjusted Operating Earnings (defined as Net Earnings from Continuing Operations Attributable to International Paper (GAAP) before net special items and non operating pension expense (income)) 3 See slide #51 for a reconciliation of cash provided by operations to Free Cash Flow, a non-GAAP financial measure Slide 18 1 Before special items and non-operating pension expense (income) (non-GAAP) 2 See slide #51 for a reconciliation of cash provided by operations to Free Cash Flow, a non-GAAP financial measure Slide 19 1 Before special items Slide 22 1 Based on 2021 sales; excludes corporate and intercompany eliminations 2 Based on 2021 Adj. EBITDA; before special items and non-operating pension expense (income) (non-GAAP); does not reflect equity earnings from Ilim JV Slide 23 1 2021 full-year sales Investor Roadshow I January 27, 2022 67
Footnotes Slide 27 1 Ilim JV total sales are not consolidated (IP owns 50% of JV) 2 Based on 2021 sales, excludes corporate and intercompany eliminations Slide 28 1 Includes modified absorbent products Slide 29 Excludes the Recycling Business and revenue from trade volumes 1 IP Adjusted EBITDA margins based on North American Industrial Packaging operating profit before special items Slide 32 1 Includes Saturating Kraft /Gypsum Liner Slide 40 1 North American production. Combined businesses, with Riegelwood PM18 running SW market pulp. Slide 44 1 Does not include llim JV Slide 46 1 Volumes shown in thousand metric tons Slide 48 Ilim JV results are US GAAP basis 1 Represents F/X impact including amounts related to Ilim Group USD-denominated net debt (balance of ~$0MM at year end 2021) Investor Roadshow I January 27, 2022 68
Footnotes Slide 49 Ilim JV results are on U.S. GAAP basis 1 A non-GAAP financial measure 2 Represents F/X impact primarily related to Ilim Group USD-denominated net debt balance; Ilim Group’s functional currency is the Ruble (RUB); Non-functional-denominated currency balances are measured monthly using the month-end exchange rate 3 Before F/X impact primarily related to USD-denominated net debt 4 IP Equity Earnings (Loss) for 4Q20 and FY2020 include after-tax F/X loss (primarily on USD-denominated net debt) of $22MM and $(50)MM, respectively 5 At December 31, 2021, Ilim Group had net debt of USD 2.1 billion. Substantially all of Ilim’s debt is in Rubles. The USD net debt is calculated using a RUB/USD exchange rate of 74.29 at December 31, 2021. Slide 50 2010-2011 adjusted for elimination of the Ilim JV reporting lag xpedx is reflected as a Discontinued Operation in all periods N.A. Consumer Packaging is reflected as a Discontinued Operation from 2013 onward Printing Papers is reflected as a Discontinued Operation from 2019 onward 1 Adjusted operating EPS, a non-GAAP financial measure based on Adjusted Operating Earnings (defined as Net Earnings from Continuing Operations Attributable to International Paper (GAAP) before net special items and non operating pension expense (income)) Slide 52 1 Moody’s methodology is used to calculate Adjusted Debt to EBITDA ratio. Moody’s adjusts debt to include balance sheet debt, operating leases/deferred tax liability and debt issuance expense, and pension gap. EBITDA is adjusted to include lease and pension adjustments (non-GAAP). Slide 54 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 approximately 200 observations 1 2013 and onward include Temple-Inland pension plan 2 Non-cash expense for U.S. plans only 3 Through December 2021 Investor Roadshow I January 27, 2022 69
Contact Information
Investor Relations
• Guillermo Gutierrez
+1-901-419-1731
guillermo.gutierrez@ipaper.com
• Michele Vargas
+1-901-419-7287
michele.vargas@ipaper.com
Media
• Amy Simpson
+1-901-419-4964
amy.simpson@ipaper.com
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