Investor Roadshow February 4, 2021
Transcript of Investor Roadshow February 4, 2021
Investor Roadshow
February 4, 2021
2
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. These
statements are often identified by the words “will,” “may,” “should,” “continue,” “anticipate,” “believe,” “expect,” “plan,” “appear,” “project,” “estimate,” “intend” and words of a similar nature. These statements are
not guarantees of future performance and reflect management’s current views with respect to future events, which 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 development, availability and effectiveness of treatments and vaccines, negative global economic conditions arising from the pandemic, impacts of governments’
responses to the pandemic on our operations, impacts of the pandemic on commercial activity, our customers and business partners and consumer preferences and demand, supply chain disruptions, and
disruptions in the credit or financial markets; (ii) the level of indebtedness and changes in interest rates; (iii) industry conditions, including but not limited to changes in the cost or availability of raw materials,
energy and transportation costs, competition International Paper faces, cyclicality and changes in consumer preferences, demand and pricing for International Paper products (including changes resulting from
the COVID-19 pandemic); (iv) domestic and global economic conditions and political changes, changes in currency exchange rates, trade protectionist policies, downgrades in International Paper’s credit ratings,
and/or the credit ratings of banks issuing certain letters of credit, issued by recognized credit rating organizations; (v) the amount of International Paper’s future pension funding obligations, and pension and
health care costs; (vi) unanticipated expenditures or other adverse developments related to the cost of compliance with existing and new environmental, tax, labor and employment, privacy and other U.S. and
non-U.S. governmental laws and regulations (including new legal requirements arising from the COVID-19 pandemic); (vii) any material disruption at any of International Paper’s manufacturing facilities due to
severe weather, natural disasters or other causes (including as the result of the COVID-19 pandemic); (viii) risks inherent in conducting business through joint ventures; (ix) International Paper’s ability to achieve
the benefits expected from, and other risks associated with, acquisitions, joint ventures, divestitures and other corporate transactions, (x) information technology risks, (xi) loss contingencies and pending,
threatened or future litigation, including with respect to environmental related matters, (xii) the receipt of regulatory approvals relating to the spinoff transaction without unexpected delays or conditions; (xiii)
International Paper’s ability to successfully separate the SpinCo business and realize the anticipated benefits of the spinoff transaction; (xiv) the ability to satisfy any necessary conditions to consummate the
spinoff transaction within the estimated timeframes or at all; and (xv) the final terms and conditions of any spinoff transaction, including the amount of any dividend by SpinCo to International Paper and the terms
of any ongoing commercial agreements and arrangements between International Paper and SpinCo following any such transaction, the costs of any such transaction, the nature and amount of indebtedness
incurred by SpinCo, the qualification of the spin-off transaction as a tax-free transaction for U.S. federal income tax purposes (including whether an IRS ruling will be obtained), diversion of management’s
attention and the impact on relationships with customers, suppliers, employees and other business counterparties, and the impact of any such transaction on the businesses of International Paper and SpinCo
and the relationship between the two companies following any such transaction. These and other factors that could cause or contribute to actual results differing materially from such forward-looking statements
can be found in International Paper’s press releases and U.S. Securities and Exchange Commission filings. In addition, other risks and uncertainties not presently known to International Paper or that it currently
believes to be immaterial could affect the accuracy of any forward-looking statements. International Paper 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 ("U.S. GAAP"), during the course of this presentation, certain non-U.S. GAAP
financial measures are presented. Management believes certain non-U.S. GAAP financial measures, when used in conjunction with information presented in accordance with U.S. 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-U.S. 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-U.S. GAAP measures (and their
components) to U.S. GAAP financial measures is available on IP’s website at http://www.internationalpaper.com/performance/presentations-events/webcasts-presentations.
Ilim JV and Graphic Packaging Investment Information
All financial information and statistical measures regarding our 50/50 Ilim joint venture in Russia (“Ilim”) and our 7.4% ownership interest in a subsidiary of Graphic Packaging Holding Company, other than
historical International Paper Equity Earnings and dividends received by International Paper, have been prepared by the management of Ilim and Graphic Packaging Holding Company, respectively. Any
projected financial information and statistical measures reflect the current views of Ilim and Graphic Packaging Holding Company 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 February 4, 2021
Investment Thesis
4
Investment Thesis | About Us
Investor Roadshow I February 4, 2021
We are one of the world’s leading producers of fiber-based
packaging, pulp and paper
We transform renewable resources into recyclable products
people depend on every day
We do the right things, in the right ways, for the right reasons,
all of the time
Who
We Are
What
We Do
How
We Do It
5
IP Investment Thesis | The IP Way Forward
“The IP Way Forward is how
we go beyond just doing the
right things; it’s how we create
long-term value for all IP
stakeholders.”
Mark S. Sutton,
Chairman and Chief Executive Officer
6
Global Citizenship
Investor Roadshow I February 4, 2021
7
WATER STEWARDSHIP
SUPPLY CHAIN
Evolved Supplier Code of Conduct
to Third Party Code of Conduct to
include all third parties across
supply chain and expanded risk
monitoring processes
AIR EMISSIONS
49%
GHG EMISSIONS
22% reduction in greenhouse
gas emissions
FIBER EFFICIENCY
0.63%reduction from
reporting mills
ENERGY EFFICIENCY
5%RECYCLING
FIBER CERTIFICATION
47%
63%
SAFETY
65%
COMMUNITY ENGAGEMENT
$134M
WATER QUALITY
28%
SOLID WASTE
19%
Vision 2020 Goals
increase in certified
fiber volume
increase in
recovery of OCC
reduction in serious
safety incidents
donated to charitable
organizations since 2010,
Including more than
$24 million in 2019
improvement in purchased
energy efficiency
reduction in air emissions
(PM, SO2, NOx)
decrease in oxygen-
depleting substances
reduction in manufacturing
waste to landfills
Updated water risk framework and
continued annual facility
assessments. Seventy percent of
mills engaging local stakeholders on
water
More than
Investor Roadshow I February 4, 2021
8
Vision 2030 | Four Goals. Eight Targets.
BUILDING A BETTER FUTURE FOR PEOPLE, THE PLANET AND OUR COMPANY
Investor Roadshow I February 4, 2021
9
International Paper Brazil
Graphic Paper
Manufacture 2015
International Paper
Russia Corporate
Social Responsibility
Award 2015
Ethisphere Institute
World’s Most Ethical
Companies® 2020 for
15 consecutive years
1 From FORTUNE Magazine, March 1, 2020. © 2020 Time Inc. Used under license.
Fortune Magazine1
World’s Most Admired
Companies® 2020 for 17
years
Member of the
FTSE4Good Index Series
for demonstrating strong
Environmental, Social
and Governance
(ESG) practices
International Paper Awards & Recognitions
Women’s Choice Award®
2021 Woman’s Choice Award
Best Companies to Work For
Diversity & Millennials
International Paper Awards & Recognitions
IDG’s Computerworld
“100 Best Places to
Work in IT” 2020
Investor Roadshow I February 4, 2021
Reprinted with permission of
The Wall Street Journal
10
Delivers strong and
sustainable free cash flows
Increases intrinsic value with
return spreads above our
cost of capital (ROIC >
WACC)
Supports policies to return
cash to shareholders
Maintain strong balance
sheet
Fiber-based Packaging, Pulp and Paper
Good market growth rates
Customers and markets that
value our products and
innovations
Strong growing supply positions
Access to the best global
customers and segments
Low cost, competitive assets
Operational excellence
Availability and access to low cost,
sustainable fiber
Capability to provide differentiated and
innovative value propositions
Opportunity for optimization and
productivity gains
Strategy
Advantaged Positions Attractive Markets Shareholder Value
IP Investment Thesis | Strategic Framework
Renewable Natural Resources
Investor Roadshow I February 4, 2021
11
Capital Allocation Framework | Maximize Value Creation
Sustainable dividend at 40 – 50% of FCF
Share repurchases
Target debt to EBITDA1
2.5x to 2.8x
Pension plan sufficiently funded
Invest to
Strategic Fit | Compelling Value | Disciplined
Cost reduction capex
Strategic capex
Selective M&A
Return Cash to Shareholders
Investment Excellence
Maintain Strong Balance Sheet
$11.3 $11.2 $10.7 $9.8$8.1
$3.4$2.0 $1.8
$1.6
$1.1
4.0x3.3x
2.8x2.9x
2.9x
2016 2017 2018 2019 2020
Billio
n
Op. Leases Balance Sheet Debt Pension Gap
Debt / EBITDA1
(Target 2.5 – 2.8x)
$733 $769 $789 $796 $806
$100
$701$486
$14
2016 2017 2018 2019 2020
Millio
n
Cash to Shareowners
Dividend Share Repurchases
Investor Roadshow I February 4, 2021
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$1.0
$0.7
$1.7
$2.2
$1.7 $1.7$1.6
$1.8
$2.1
$1.8 $1.9$2.0
$1.7
$2.3 $2.3
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Bil
lio
nFree Cash Flow1 | Strong Execution of Cash Levers
Investor Roadshow I February 4, 2021
5-Year
Average
$2.0
13
6.3%
7.5%6.5%
5.0%
8.1%
9.5%
8.3%
9.7%9.2%
11.4%
10.0% 9.9%
13.2%
10.8%
7.7%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Expanded Spread of Adj. ROIC1 Above Cost of Capital
Investor Roadshow I February 4, 2021
2020 WACC
5-Year
Average
10.0%
14
Solid performance and outstanding cash generation in a
dynamic environment
$3.1B Adjusted EBITDA1
$2.3B Free Cash Flow2
generation
11th consecutive year above cost of capital
Strong execution to support customer needs
Strong and resilient operational performance
Outstanding cost management
Executed our capital allocation framework to enhance our
financial strength
Initiated meaningful actions to Build a Better IP
to grow earnings and cash generation
Investor Roadshow I February 4, 2021
Full-Year 2020 Results
$1.7
$2.3
$2.3
Free Cash Flow2 ($B)
2018
2020
2019
15
$ Billion (except as noted)
2018 2019 2020
Sales $23.3 $22.4 $20.6
Adjusted EBIT1
$3.0 $2.6 $1.8
Adjusted Operating EPS2
$5.32 $4.43 $2.80
Adjusted EBITDA1
$4.3 $3.9 $3.1
Adjusted EBITDA Margin1
18.7% 17.2% 15.1%
Equity Earnings ($MM) $336 $250 $77
Free Cash Flow3
$1.7 $2.3 $2.3
Investor Roadshow I February 4, 2021
Full-Year 2020 Financials
$5.32
$4.43
$2.80
Adjusted Operating EPS2
2019
2018
2020
16
Accelerate value creation for our shareowners
Take care of our employees
Deliver superior solutions that create value
for our customers
Support the needs in our communities
CEO Perspective | Building a Better IP
Investor Roadshow I February 4, 2021
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Select Financial Metrics1
Investor Roadshow I February 4, 2021
$ Million 2019 2020 2021F
Maintenance Outage Expense $518 $454 $609
Maintenance & Regulatory $750 $430
Cost Reduction $150 $30 ≤ $800
Strategic $400 $290
Depreciation & Amortization $1,301 $1,286 $1,310
Net Interest Expense $493 $446 $390
Corporate Expense $54 $(7) $60
Effective Tax Rate 26% 25% 26%
Ca
pex
18
Keep People Safe | Take Care of Customers | Maintain Financial Strength
Containment Recovery
Managing each phase of pandemic with a view toward the short-term and long-term success
and sustainability of the company for all stakeholders
Committed to the health and safety of our employees and contractors
Ensuring business continuity with customers and suppliers
Maintaining financial strength to manage economic uncertainty
Supporting critical needs in our communities
Navigating COVID-19 | Principled Leadership in Essential Business
Investor Roadshow I February 4, 2021
Recognition and appreciation
bonus to employees totaling
~$25 million in 4Q20
Building a Better IP
20
Strategic Rationale | Creating Value Through Focus
CREATE TWO FOCUSED,
LEADING COMPANIES
–IP: Highly advantaged packaging focused company
SpinCo: Well-positioned global paper company
BUILD FOUNDATION
FOR LONG-TERM
SUCCESS
–Agile organizational and
operating model
Commitment to capital allocation framework and investment excellence
POSITION IP TO
ACCELERATE VALUE
CREATION
–Building on strength of our
industrial packaging business
Taking meaningful actions
to grow earnings and cash
generation
Investor Roadshow I February 4, 2021
21
Creating Two Focused, Leading Companies
IP–Highly advantaged corrugated
packaging-focused company
• Strong strategic profile
• Significant earnings growth catalysts
• Commitment to capital allocation
framework
SpinCo–Well-positioned global paper
company
• Talented team
• Scale and capabilities
• Capital structure with potential to
unlock strategic value
$17B Sales1
~20,000 Customers
28 Mills | 220 Converting Facilities
$3B Sales1
Leading Brands across key markets
7 Mills
Investor Roadshow I February 4, 2021
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Value Drivers
IP | Taking Meaningful Action to Grow Earnings and Cash Generation
N.A. Industrial
Packaging
EMEA Industrial
Packaging
Global Cellulose
Fibers
Ilim
Partnership
Executing
Value-Creating Plan
Highly advantaged
Portfolio aligned with IP
+$300MM
Structural Cost Reduction
Lean effectiveness (~30%)
Process optimization (~40%)
Asset optimization (~30%)
$50 - $100MM
Incremental Annual
Profitable Growth
Commercial execution
Investment excellence
$350 - $400MM
Incremental earnings growth by end of 2023
Investor Roadshow I February 4, 2021
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SpinCo | Global Paper Company Positioned for Success
Strong leadership and talented team
Substantial scale with global capabilities
Competitive cost positions across
geographies
Leading brands across key markets
Significant potential to unlock
strategic options
7 Mills with Paper Capacity of 2.5MM Metric Tons
Brazil 1.0MM
Luiz Antônio, São Paulo
Mogi, Guacu, São Paulo
Três Lagoas, Mato Grosso do Sul
Europe 0.2MM
Saillat, France
United States 0.8MM
Ticonderoga, New York
Eastover, South Carolina
Russia 0.4MM
Svetogorsk, Russia
Coated Board Capacity (MT)
Russia 0.1MM
Investor Roadshow I February 4, 2021
Business Overview
25
TransformationGlobal Economic
RecessionSustainable Returns Above Cost of Capital
N.A. Weyco Pkg.
Acquisition
India APPM
Acquisition
$11B Divestitures
Investments:
China Sun JV
Brazil VCP Land/Mill Swap
Russia Ilim JV (2007)
Asia Pkg.
Acquisition
Brazil Pkg.
Acquisition
N.A. TIN
Acquisition
Turkey Pkg.
Acquisition
Franklin Fluff Pulp
Conversion
xpedx Spin-Off
Riegelwood
Fluff Pulp
Conversion
Valliant PM3
Containerboard
Startup
Sun JV
& Asia Pkg.
Sale
Madrid Mill
Conversion
Weyco Pulp
Business
Acquisition
2005-2007 2011+2008-2010
Path to Value Creation
N.A. Consumer
Packaging
Transfer to GPK
N.A. Ind. Pkg.
Containerboard Mill
Optimization
GPK
Monetization
India APPM Sale
Brazil
Packaging
Sale
Investor Roadshow I February 4, 2021
26
International Paper | 2020 Global Portfolio in Packaging, Pulp and Paper
North America
Brazil
EMEA & Russia
$17.0BNet Sales
$0.1BNet Sales
$2.8BNet Sales
Full-year 2020 net sales data; does not reflect total company sales
$2.0B1
Positioned in attractive markets with low-cost assets that generate strong free
cash flow and returns that exceed our cost-of-capital
Total Sales
Ilim JV
Investor Roadshow I February 4, 2021
27
Industrial Packaging
Printing Papers
Global CelluloseFibers
Revenue by
Business1
NorthAmerica
Brazil
EMEA
Russia
% Total
Adjusted
EBITDA2
Strong Domestic Positions
1st
1st
2nd
1st 1st
*Fluff pulp capacity based on Poyry
1st*
North America
Latin America
EMEA
Russia
Ilim
Pulp
73%12%
15%
84%
5%
7%
4%
Investor Roadshow I February 4, 2021
28
IP N.A. Exports | Leveraging Strategic Export Opportunities
Investor Roadshow I February 4, 2021
% of export volume
shipped to select regions
Latin America
EMEA
Asia~45%
~20%
~10%
~45%
~40%
~40%
Fluff Pulp1
(~90% of N.A. production)
Containerboard(~10% of N.A. production)
29
Brazil & Russia Exports | Leveraging Strategic Export Opportunities
~55%
% of export volume
shipped to select regions~30%
Latin America
EMEA Asia~70%
~30% ~15%
Softwood Pulp(~50% of production)
Uncoated Freesheet(~50% of Brazil production)
Ilim
Pulp
Investor Roadshow I February 4, 2021
30
0.4 0.5
0.8
1.3 1.31.6
2.0
2.52.7 2.7
2.42.6
3.02.8
2.513%15% 15%
19%18%
20%19%
22%24% 24%
22% 22%23%
22%
20%
0%
5%
10%
15%
20%
25%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Th
ou
san
ds
Bu
sin
es
s
Ad
j. EB
ITD
A1
($B
)
Weyco Packaging
Acquisition & Integration
Ad
j. E
BIT
DA
1%
TIN Acquisition &
Integration
N.A. Industrial Packaging | Track Record of Success
Global Economic
Recession
Investor Roadshow I February 4, 2021
Appendix
32
Appendix | Table of Contents
Industrial Packaging……………….………………………………….…..33-41
Global Cellulose Fibers……………………………………………….......42-47
Printing Papers..……….……………………………………………………48-56
IP Russia & Ilim Group.………….….……………………………….…….57-60
Other Financial Information…..………………………………….….......61-78
Footnotes…………………….…..………………………………….….......79-82
Contact Information……………….………………………………….…..83
Investor Roadshow I February 4, 2021
33
IP31%
WRK21%
GP9%
PCA10%
Pratt5%
Others24%
N.A. Containerboard | Supply Positions
Source: 2021 estimated effective containerboard capacity based on RISI Capacity Reports, SEC Filings, and IP data and analysis
2021 Producer
Position
Stone13%
Smurfit7%
GP9%
WY7%
IP7%
TIN7%
Others50%
1995 Producer
Position
Investor Roadshow I February 4, 2021
34
IP N.A. Industrial Packaging | Balanced Global Strategy
Investor Roadshow I February 4, 2021
Non-U.S.~10%
IP Box Plants~85%
Open Market~15%
U.S.~90%
Export~60%
Domestic~40%
EMEA~40%
Lat Am~40%
Asia~20%
N.A. Mill System Capacity~13.9 MillionTons
Containerboard~13.5 MillionTons
Other Uses1
~0.4 MillionTons
Source: 2020 estimates based on IP data and analysis
IP’s channels to market provide choices for maximizing value
35
Global Containerboard Industry | Total Containerboard Trade Flows
Estimated 2021
Global Demand
= 191MM tons
Net Export, Tons
Net Import, Tons
Countries with Net Import or Export
greater than 100M tons…
Source: 2021 RISI trade estimates and IP analysis
Europe
6.5MM
Europe
4.3MM
N America
5.1MM
Africa
1.5MM
S America
0.5MM
S America
1.0MM
C America
2.6MM
Africa
0.3MM
Mid East
0.7MM
Asia
3.0MM
Oceania
0.7MM
Investor Roadshow I February 4, 2021
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IP N.A. Containerboard Mill System | ~13.9MM Tons Capacity1
Investor Roadshow I February 4, 2021
Source: 2020 estimates based on IP data and
analysis; chart includes Saturating Kraft & Gypsum
liner
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
Ma
ns
field
Vallia
nt
Pra
ttv
ille
Sava
nn
ah
Ced
ar
Riv
er
Pin
eH
ill
Ro
me
Bo
galu
sa
Red
Riv
er
Ora
ng
e
Sp
rin
gfi
eld
Vic
ks
bu
rg
Ma
ysv
ille
Pen
sa
co
la
Riv
erd
ale
PM
15
New
po
rt
Hen
de
rso
n
Xala
pa
Th
ou
sa
nd
To
ns
37
Linerboard Global Cost Curve | 93% of Capacity in 1st Quartile
$0
$200
$400
$600
$800
$1,000
$1,200
0 20,000 40,000 60,000 80,000 100,000
Ma
nu
fac
turi
ng
Co
sts
($
/To
n)
Cumulative Annual Production (Thousand Tons)
Cash Costs + Delivery to Chicago
Newport
Source: FisherSolve ™ 3Q19 data
Cedar Rapids
Henderson
Maysville
Mansfield
Bogalusa
Orange
Pine Hill
Red River
Valliant
Vicksburg
Prattville
Rome
Savannah
Pensacola
Springfield
Xalapa
Investor Roadshow I February 4, 2021
38
Well-Positioned in Attractive Customer Segments
Investor Roadshow I February 4, 2021
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
39
U.S. Containerboard | Industry Statistics
Source: RISI
As of Jan 2015, RISI only reports
OMP = Open Market Price
200
300
400
500
600
700
800
200
300
400
500
600
700
800
Jan
-06
Ap
r-06
Jul-
06
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06
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Ap
r-07
Jul-
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Oct-
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r-08
Jul-
08
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-09
Ap
r-09
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Ap
r-10
Jul-
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Oct-
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Ap
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-12
Ap
r-12
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Jan
-13
Ap
r-13
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Ap
r-14
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-20
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r-20
Jul-
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-21
$/short ton
Containerboard Pricing
Linerboard (List Price)
Medium (List Price)
Linerboard (OMP)
Medium (OMP)
$200
$300
$400
$500
$600
$700
$800
$/short ton
Investor Roadshow I February 4, 2021
40
Economic Indicators and U.S. Box Demand
Source: Oxford Economics; RISI North
America Containerboard Historical Data
70
80
90
100
110
120
130
140
150
Ind
ex
ed
10
0 =
20
01
US Box Shipments US Nondurable Industrial Production US GDP US Industrial Production
Investor Roadshow I February 4, 2021Investor Roadshow I February 4, 2021
41
373 378390 396
405 401
380 379 380391 391 395 390
374
345357 359 360 360 364 369
376386 392 394
407415 420 426
438448
Sh
ipm
en
ts (
BS
F)
U.S. Corrugated Packaging Shipments
Historical Data Source: Fibre Box Association
2021-2025: 1.9% CAGR (RISI – February 2021, 5-yr forecast)
RISI Forecast
Investor Roadshow I February 4, 2021
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Global Cellulose Fibers | Business Overview
Investor Roadshow I February 4, 2021
~75%
~25%
Current Product Mix1
Total Capacity ~3.6MM MTPY Targeted Mix
Fluff Pulp & Specialties 2.7MM 85%
Market Pulp 0.9MM 15%
Franklin, VA
New Bern, NC
Riegelwood, NC
Georgetown, SC
Port Wentworth, GA
Flint River, GA
Eastover SC
Pensacola, FL
Columbus, MS
Saillat, France
Kwidzyn,
PolandGdansk,
Poland
Svetogorsk, Russia
Fluff Pulp &
Specialties
Market Pulp
Market Pulp Mill
Fluff Pulp Mill
Converting facilities
Grand Prairie,
Alberta
Franklin, VA
Georgetown, SC
Flint River, GA
Eastover SC
Pensacola, FL
Columbus, MS
New Bern, NC
Riegelwood, NC
Port Wentworth, GA
43Source: Euromonitor
Absorbent Hygiene Products (AHP) Outlook | Demand & Growth
AHP demand linked to disposable incomes in emerging markets
Investor Roadshow I February 4, 2021
0
2,000
4,000
6,000
8,000
10,000
2000 2010 2020 2024 2030
Dis
posable
Incom
es
US
D p
er
capita
Middle East & Africa Latin America Asia Pacific China
44
Global Market Pulp Demand Outlook | Bleached Softwood
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
2018 2023
Source: PPPC November 2019 Chemical Market Pulp Forecast SRN
24.8MM MTPY 26.5MM MTPYCAGR = 1.3% 2019 – 2023
CAGR
1.0%
3.1%
2.6%
(2.2)%
0.7%
0.1%
Investor Roadshow I February 4, 2021
45
Global Cellulose Fibers | Advantaged Position in Attractive Markets
North America
Latin America
EMEA
Asia
2018 - 2023
CAGR
1.1%
2.8%
7.7%
0.8%Airlaid 12%
Adult
Incontinence 32%
Feminine Care23%
Baby Diapers33%
Fluff Demand by Region and End Use
2.0%
3.4%
5.1%
1.4%
2018 - 2023
CAGR
Well positioned to serve
growing demand with global,
strategic customers
2018 Demand
5.9MM MTPY
Source: CAGR, Region and End Use – Price Hanna 2019 Outlook for Absorbent Products;
2018 Demand – IP analysisInvestor Roadshow I February 4, 2021
46
IP Global Pulp Capacity | Total of 3.9MM MTPY1
2.0 MM
North America
Latin America
Europe/RussiaIlim JV
0.2 MM
3.4 MM
0.3 MM
Pulp mill
Investor Roadshow I February 4, 2021
47
Pulp | Industry Statistics
0
200
400
600
800
1,000
1,200
1,400
1,600
Jan
-06
Ap
r-06
Jul-
06
Oct-
06
Jan
-07
Ap
r-07
Jul-
07
Oct-
07
Jan
-08
Ap
r-08
Jul-
08
Oct-
08
Jan
-09
Ap
r-09
Jul-
09
Oct-
09
Jan
-10
Ap
r-10
Jul-
10
Oct-
10
Jan
-11
Ap
r-11
Jul-
11
Oct-
11
Jan
-12
Ap
r-12
Jul-
12
Oct-
12
Jan
-13
Ap
r-13
Jul-
13
Oct-
13
Jan
-14
Ap
r-14
Jul-
14
Oct-
14
Jan
-15
Ap
r-15
Jul-
15
Oct-
15
Jan
-16
Ap
r-16
Jul-
16
Oct-
16
Jan
-17
Ap
r-17
Jul-
17
Oct-
17
Jan
-18
Ap
r-18
Jul-
18
Oct-
18
Jan
-19
Ap
r-19
Jul-
19
Oct-
19
Jan
-20
Ap
r-20
Jul-
20
Oct-
20
Jan
-21
USD/admt Global Pulp Prices
NBSK (dne) BEK (dne) Fluff (dne)
Source: RISI
Global pulp prices delivered to Northern Europe;
Units shown in metric tonsInvestor Roadshow I February 4, 2021
48
Europe
0.8 MM
IP Global Papers Footprint | Total of 4.0MM Short Tons1
Investor Roadshow I February 4, 2021
0.4 MM
North America
Brazil
Ilim JV
1.1 MM
1.7 MM
Russia
0.4 MM
Uncoated paper mill
49
Domtar34%
IP24%
PCA10%
Pixelle7%
Other 24%
GP15%
IP13%
Champion
10%
Boise10%Willamette
9%
WY9%
Union Camp
9%
Other 25%
1998 Producer
Position
2019 Producer
Position
1998, 2018 Source: Poyry Consulting, RISI, IP analysis
2019 Producer Position based off of 3Q 2019 Capacity
N.A. Uncoated Freesheet Supply | Capacity Positions
Investor Roadshow I February 4, 2021
50
0%
20%
40%
60%
80%
100%
Riverdale PM16 Ticonderoga Eastover Georgetown
% G
rad
e / M
ix
Uncoated Freesheet Non UFS Pulp1
N.A. Papers Mill System | 1.7MM Short Ton Capacity
Paper
(M Tons) 350 280 750 290
Pulp
(M Tons) 0 0 95 340C
ap
ac
ity
Source: IP AnalysisInvestor Roadshow I February 4, 2021
51
$0
$400
$800
$1,200
$1,600
$2,000
$2,400
$2,800
$3,200
$3,600
0 10,000 20,000 30,000 40,000 50,000
Ma
nu
fac
turi
ng
Co
sts
$/T
on
Cumulative Annual Production (Thousand Tons)
Cash Costs + Delivery to Chicago
Uncoated Freesheet Global Cost Curve |
Source: FisherSolve ™ 3Q19 data
Georgetown
Ticonderoga
Eastover
Riverdale PM16
Investor Roadshow I February 4, 2021
IP N.A. Capacity in 1st
Cost Quartile
52
314
575
657 657
513539
598 499
310253 261 316
213254
295
124
10%
16%
19% 19%
18%20%
22%
18%
12% 12%13%
17%
12%13%
15%
7%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
0%
5%
10%
15%
20%
25%
Bu
sin
es
sA
dj. E
BIT
DA
1($
MM
)
Ad
j. E
BIT
DA
1%
N.A. Printing Papers | Margin History
Tons
Sold (MM) 4.0 4.1 3.9 3.5 3.0 2.8 2.7 2.7 2.6 2.0 2.0 1.9 1.9 1.9 1.8 1.3
Investor Roadshow I February 4, 2021
53
U.S. Uncoated Freesheet Demand
Historical Data Source: AF&PA
2021 – 2025: (3.0%) CAGR (RISI February 2021: 5-yr Forecast)
11.612.212.4
13.313.013.2
13.713.614.013.9
12.612.412.312.612.012.3
11.9
10.9
9.7 9.6 9.38.9 8.8
8.0 8.0 7.9 7.6 7.46.6
5.36.1 6.0 5.8 5.6 5.4
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 21 22 23 24 25
Mil
lio
n T
on
s
RISI Forecast
Investor Roadshow I February 4, 2021
54
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
Jan
-06
Ap
r-06
Jul-
06
Oct-
06
Jan
-07
Ap
r-07
Jul-
07
Oct-
07
Jan
-08
Ap
r-08
Jul-
08
Oct-
08
Jan
-09
Ap
r-09
Jul-
09
Oct-
09
Jan
-10
Ap
r-10
Jul-
10
Oct-
10
Jan
-11
Ap
r-11
Jul-
11
Oct-
11
Jan
-12
Ap
r-12
Jul-
12
Oct-
12
Jan
-13
Ap
r-13
Jul-
13
Oct-
13
Jan
-14
Ap
r-14
Jul-
14
Oct-
14
Jan
-15
Ap
r-15
Jul-
15
Oct-
15
Jan
-16
Ap
r-16
Jul-
16
Oct-
16
Jan
-17
Ap
r-17
Jul-
17
Oct-
17
Jan
-18
Ap
r-18
Jul-
18
Oct-
18
Jan
-19
Ap
r-19
Jul-
19
Oct-
19
Jan
-20
Ap
r-20
Jul-
20
Oct-
20
Jan
-21
$/short ton
Uncoated Freesheet Pricing Trends
RISI 20# Cutsize RISI 50# Offset
Source: RISIInvestor Roadshow I February 4, 2021
55
Latin America Uncoated Freesheet Market
Latin America is a Net Exporter
DemandCapacity @
88% Op. RateNet Exports
2.5 MM 2.7 MM 0.2 MM
38%
30%
7%
4%
4%
3%
14%
0 500 1,000 1,500 2,000 2,500
Brazil
Argentina
Colombia
Chile
Peru
Other LatAm
Thousand Short Tons
Demand Capacity
Supply & DemandLatin America Capacity
LatAm analysis excludes Mexico
Source: Ibá / AFCP / RISI / Fisher / IP Estimates
Smurfit
Kappa
Ledesma
Celulosa
Argentina
Propal
IP
Others
Suzano
3.0MM
tons
Investor Roadshow I February 4, 2021
56
IP Brazil Papers | Historical Financials
280 317
228 296
320 293 334 326
275 264297
329
251
149
33% 33%
24%
27%27%
26%
31% 31% 31%29%
31%34%
26%24%
0%
5%
10%
15%
20%
25%
30%
35%
40%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
-
50
100
150
200
250
300
350
400
Ad
j. E
BIT
DA
1% B
us
ine
ss
A
dj. E
BIT
DA
1($
MM
)
Tons
Sold
(MM) 0.9 1.0 1.2 1.2 1.3 1.3 1.3 1.3 1.2 1.2 1.3 1.2 1.3 0.9
Investor Roadshow I February 4, 2021
Ilim JV Production tonnes1 2019
Bratsk Mill
Total 1,108
Softwood bleached pulp 685
Hardwood bleached pulp 324
KLB 98
Koryazhma Mill
Total 1,334
PM7 paper 186
PM7 CFS 58
Pulp (BHKP, UKP) 314
KLB and others 776
Ust-Ilimsk Mill
Total 677
Pulp (BSKP, UKP) Total 628
Hardwood bleached pulp 49
IP Russia Production1
Svetogorsk 2019
Total 654
Coated Paperboard 113
Pulp (soft/hardwood) 150
Fine Papers 391
Koryazhma
BratskUst-Ilimsk
China
Kazakhstan Mongolia
Svetogorsk
Well Positioned to Serve Target Markets
57
IP Russia & ILIM JV | Production Overview
Investor Roadshow I February 4, 2021
58
China will account for more than 60% of world’s incremental
market pulp growth
Cost positions with favorable access to China NBSK customers
Access to significant Russian wood basket
Source: FisherSolve™ 3Q19 data
$0
$200
$400
$600
$800
$1,000
0 5,000 10,000 15,000 20,000
Ma
nu
factu
rin
g C
osts
($/T
on
)
Cumulative Capacity (Thousand Tons)
Cash Cost + Delivery to Beijing, China
Ust-Ilimsk
Bratsk
ILIM Joint Venture | Well Positioned to Serve Growing Pulp Markets
Investor Roadshow I February 4, 2021
2013 2014 2015 2016 2017 2018 2019
Sales Volume (Million metric tonnes) 2.4 2.9 3.0 3.2 3.1 3.3 3.2
Sales ($B) 1.9 2.1 1.9 1.9 2.2 2.7 2.2
Debt ($B) 1.5 1.4 1.2 1.5 1.6 1.6 2.2
Adj. Operating EBITDA ($MM) 203 459 694 680 695 1,207 706
F/X Gain (Loss)1 ($MM) (80) (674) (188) 63 37 (204) 79
EBITDA ($MM) 123 (215) 506 743 732 1,003 785
Depreciation ($MM) 176 188 128 121 151 156 134
EBIT ($MM) (53) (403) 378 622 581 847 651
Interest Expense ($MM) 39 69 52 81 88 70 82
Net Income / (Loss) ($MM) (72) (359) 237 385 362 571 424
IP Equity Earnings / (Loss) ($MM)(46) (194) 131 199 183 290 207
Dividends (to IP) ($MM) 0 56 35 60 134 128 246
ILIM Joint Venture | Full Year Financials
Investor Roadshow I February 4, 2021 59
Investor Roadshow I February 4, 2021 60
$ Million 4Q19 3Q20 4Q20 2019 2020
Sales Volume (thousand metric tonnes)
802 878 932 3,162 3,460
Sales $495 $498 $541 $2,188 $2,015
EBITDA1
$138 $(21) $206 $785 $393
F/X (Impact of USD Net
Debt)2 $21 $(138) $55 $79 $(126)
Adj. Operating EBITDA
3 $117 $117 $151 $706 $519
IP Equity Earnings (Loss)
4 $21 $(33) $53 $207 $48
Strong demand for softwood pulp in China
Price/mix improvement driven by higher softwood
pulp pricing
IP dividends of $141 million in 2020
F/X gain (non-cash) of $0.05 EPS primarily on
USD-denominated net debt in 4Q20
ILIM Joint Venture | 4Q20 vs. 3Q20
61
Adj. Operating EPS1
Investor Roadshow I February 4, 2021
2006 2007 20102008 2009 2011 2012 2013 2014 2015 2016 2017 2018
.12
.35.40
.47.45
.52.57
.73
.45.49
.15
.07
.27
.38
.22
.05
.44
.72.76.77.78
.67
.58.49
.77
.66
.58.52
.91
.78
.59
.87.87
.46
.79
.90.91.84
.78.82.83
.67
.56
.66
1.01
1.27
.94
1.19
1.56
1.65
1.111.15
1.09
.57
.77.71.75
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
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
.83
.93
2019
1.09Impact of Mineral
Rights Gain.42 .08 Final Land Sale
2020
62
$ Million 4Q19 2019 1Q20 2Q20 3Q20 4Q20 2020
Cash Provided by Operations
$928 $3,610 $649 $890 $735 $789 $3,063
Cash Invested in Capital Projects, Net of Insurance Recoveries
$(363) $(1,276) $(286) $(252) $(119) $(94) $(751)
Free Cash Flow $565 $2,334 $363 $638 $616 $695 $2,312
Investor Roadshow I February 4, 2021
Free Cash Flow
63
Balance Sheet | Financial Strength
Pension Gap
Balance
Sheet
Debt
Balance
Sheet
Debt
Pension Gap
Pension GapPension Gap
$9.3$11.3 $11.2 $10.7
$9.8$8.1
$3.6
$3.4$2.0
$1.8$1.6
$1.1
2015 2016 2017 2018 2019 2020
Bill
ion
Op Lease Adj Balance Sheet Debt Pension Gap
2.8x3.3x
2.9x
Target 2.5 – 2.8x1
4.0x
3.2x
2.9x
Investor Roadshow I February 4, 2021
Reduced balance sheet debt by $1.7B
Limited near-term maturities
Pension plan sufficiently funded
$0.6B cash balance at year-end
2020 Highlights
64
Debt Maturity Profile | Maturities as of September 30, 2020
$0
$200
$400
$600
$800
$1,000
$1,200
2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048
Mil
lio
n
Investor Roadshow I February 4, 2021
65
Pension Plan Update1 | As of December 31, 2020
342
545
387
447
364
290
209
93
$0
$150
$300
$450
$600
2012 2013 2014 2015 2016 2017 2018 2019
Millio
n
Annual Pension Expense2
Key Variables 2018 2019 2020
Assumed Rate of Return
7.50% 7.25% 7.00%
Discount Rate 4.30% 3.40% 2.60%
Average Annualized Returns3
2020 24.7%
Past Five Years 13.9%
Past Ten Years 10.7%
Portfolio Asset Allocation at 12-31-20
Target Actual
Equity 32% - 43% 40%
Bonds 44% - 56% 48%
Real Estate 5% - 11% 7%
Other 3% - 8% 5%
Investor Roadshow I February 4, 2021
66
Proactively Managing Pension Plan
2016
Voluntary term-vested buy
out program reduced plan
size by ~10% and introduced
new LDI1 policy
Contributions2014
$353MM
2015
$750MM
2016
$750MM
2017
$1.25B
2017+
Continue to assess if
there are attractive
opportunities to further
de-risk pension plan on
a structural basis
Pension plan sufficiently funded
Changed the plan's asset allocation to emphasize more fixed income
Reallocated the plan’s fixed income investments to longer duration maturities
Expanded certain hedging strategies
Transferred ~$2.9B of pension benefit obligations to Prudential ($1.3B in 2017; $1.6B in 2018)
Took definitive actions to de-risk pension plan and further reduce
exposure to interest rate variability on a structural basis
1960-2005
$0
2006-2013
$2.5B
2019
Defined Benefit Pension Plan
frozen as of 12/31/18
2004
Defined Benefit Pension Plan
closed to new entrants
Investor Roadshow I February 4, 2021
67
25%
50%
75%
100%
125%
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021E
Maintenance Regulatory Strategic Cost Reduction % of Depreciation
Millio
n
% of Depreciation
Reflects continuing operations
~$800
Capital Spending
Investor Roadshow I February 4, 2021
68
2021 Capital Investment
$0
$200
$400
$600
$800
$1,000
$1,200
0 50,000 100,000
Cumulative Annual Containerboard Global Production (Thousand Tons)
IP N.A. Containerboard Mills
Cash Cost (Delivered to Chicago)
Maintenance &
Regulatory
Maintaining world-class,
low-cost, advantaged assets
Madrid Mill Conversion
$0.2B $0.4B
Cost Reduction Strategic
Creating value through pipeline
of high return projects
≥ 30% IRR
Reinvesting in core businesses
with higher growth profile
Source: IP Analysis, FisherSolve™ 3Q19 dataInvestor Roadshow I February 4, 2021
69
$ Million 1Q20A 2Q20A 3Q20A 4Q20A 2020A
Industrial Packaging $75 $44 $70 $28 $217
North America $74 $40 $60 $28 $202
Europe $1 - $3 - $4
Europe Coated Paperboard - $4 $7 - $11
Brazil - - - - -
Global Cellulose Fibers $30 $3 $46 $54 $133North America $30 $1 $44 $52 $127
Europe - $2 $2 $2 $6
Printing Papers $36 $23 $31 $14 $104
North America $36 $12 $13 $11 $72
Europe - $8 $16 $3 $27
Brazil - $3 $2 - $5
Total Impact $141 $70 $147 $96 $454
Investor Roadshow I February 4, 2021
Maintenance Outages Expenses | 2020
70
$ Million 1Q21F 2Q21F 3Q21F 4Q21F 2021F
Industrial Packaging $115 $135 $59 $29 $338
North America $115 $129 $56 $28 $328
Europe - - $2 $1 $3
Europe Coated Paperboard - $6 $1 - $7
Global Cellulose Fibers $48 $57 $11 $55 $171North America $48 $54 $10 $44 $156
Europe - $3 $1 $11 $15
Printing Papers $16 $40 $14 $30 $100
North America $15 $28 $8 $19 $70
Europe $1 $12 $1 $11 $25
Brazil - - $5 - $5
Total Impact $179 $232 $84 $114 $609
Investor Roadshow I February 4, 2021
Maintenance Outages Expenses | 2021 Forecast
71
North American DowntimeT
ho
usa
nd
To
ns
Cellulose FibersContainerboard
Maintenance
Economic
11
2636
68
18 14
41
1
50 48
74 9
66
15
47
9
Th
ou
sa
nd
To
ns
9 10
33
167
43
14 15 13
2
27
30
76
40
Uncoated Papers
205
722 110202
91 7 86 36105 63
410328
190104 83
1233
1
Th
ou
sa
nd
To
ns
Investor Roadshow I February 4, 2021
72
Total Cash Components | 2019
Fiber37%
Materials19%Labor
15%
Overhead14%
Chemicals7%
Energy8%
North American mills only Investor Roadshow I February 4, 2021
73
U.S. Mill Wood Delivered Cost Trend |
IP data, cost Indexed to January 2007 values
90
95
100
105
110
115
120
125
130
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Investor Roadshow I February 4, 2021
4Q20 Average Cost Up 1% vs. 3Q20
74
U.S. OCC Delivered Cost Trend | 4Q20 Average Cost Up 5% vs. 3Q20
IP data, cost Indexed to January 2007
values
40
60
80
100
120
140
160
180
200
220
20192008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2020
Investor Roadshow I February 4, 2021
75
U.S. Natural Gas Cost Trend | 4Q20 Average Cost Up 28% vs. 3Q20
IP data, cost Indexed to January 2007 values
NYMEX Natural Gas closing prices
0
50
100
150
200
250
20172008 2009 2010 2011 2012 2013 2014 2015 2016 2018 2019 2020
Investor Roadshow I February 4, 2021
76
U.S. Fuel Oil Cost Trend | 4Q20 Average Cost Up 5% vs. 3Q20
IP data, cost Indexed to January 2007 values
WTI Crude prices
0
50
100
150
200
250
300
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Investor Roadshow I February 4, 2021
77
U.S. Chemical Composite Cost Trend |
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
75
100
125
150
175
200
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
4Q20 Average Cost Flat
vs. 3Q20
Investor Roadshow I February 4, 2021
78
2019 Global Consumption | Annual Purchases for Key Inputs
Commodity North America Non – North America
Energy
Natural Gas (MMBTUs) 80,000,000 13,000,000
Fuel Oil (Barrels) 300,000 400,000
Coal (Tons) 80,000 400,000
FiberWood (Tons) 53,000,000 9,000,000
Old Corrugated Containers / DLK (Tons) 4,400,000 500,000
Chemicals
Caustic Soda (Tons) 400,000 60,000
Starch (Tons) 320,000 140,000
Sodium Chlorate (Tons) 160,000 40,000
Investor Roadshow I February 4, 2021
79
Slide 111 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 12
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 #63 for a reconciliation of cash provided by operations to Free Cash Flow, a non-GAAP financial measure
Slide 13
Years 2013-2017 restated to reflect N.A. Consumer Packaging and xpedx as discontinued operations. Years 2006-2012 are as reported in the 10-K for each year at time of filing1 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 141 Before special items and non-operating pension expense (income) (non-GAAP)2 See slide #63 for a reconciliation of cash provided by operations to Free Cash Flow, a non-GAAP financial measure
Slide 141 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 Attributable to International Paper (GAAP) before special items and non-operating pension
expense (income))3 See slide #63 for a reconciliation of cash provided by operations to Free Cash Flow, a non-GAAP financial measure
Slide 171 Before special items
Slide 211 2020 full-year estimates
Slide 261 Ilim JV total sales are not consolidated (IP owns 50% of JV)
Footnotes
Investor Roadshow I February 4, 2021
80
FootnotesSlide 271 Based on 2020 sales, excludes corporate and intercompany eliminations 2 Based on 2020 Adj. EBITDA; before special items and non-operating pension expense (income) (non-GAAP); does not reflect equity earnings from Ilim JV
Slide 281 Includes modified absorbent products
Slide 311 IP Adjusted EBITDA margins based on North American Industrial Packaging operating profit before special items
Excludes the Recycling Business and revenue from trade volumes
Slide 341 Includes Saturating Kraft /Gypsum Liner
Slide 361 Includes Riverdale’s run-rate capacity post-conversion
Slide 421 North American production. Combined businesses, with Riegelwood PM18 running SW market pulp
Slide 461 Does not include llim JV
Slide 481 Does not include llim JV
Slide 501 Non UFS includes Specialty and Uncoated Bristols; 2020 Short Ton capacity
Slide 521 Before special items and non-operating pension expense (income) (non-GAAP)
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FootnotesSlide 561 Before special items and non-operating pension expense (income) (non-GAAP)
Slide 571 Volumes shown in thousand metric tons
Slide 59
Ilim JV results are US GAAP basis 1 Represents F/X impact including that related to Ilim Group JV USD-denominated net debt (balance of ~$0.4B at year end 2019)
Slide 60
Ilim JV results are on U.S. GAAP basis 1 A non-GAAP financial measure2 Represents F/X impact including amounts related to Ilim Group USD-denominated net debt (balance of ~$90MM as of December 31, 2020); Ilim Group’s functional currency is the Ruble (RUB); Non-functional-denominated
currency balances are measured monthly using the month-end exchange rate3 Before F/X impact including USD-denominated net debt4 IP Equity Earnings (Loss) for 4Q19, FY2019, 3Q20, 4Q20 and FY2020 include after-tax F/X gains (losses) (primarily on USD-denominated net debt) of $8MM, $32MM, $(55)MM, $22MM and $50MM, respectively
Slide 61
2006 as originally reported
2007-2011 adjusted for elimination of the Ilim JV reporting lag
2006-2010 Net Earnings from continuing operations and before special items; 2010 onward reflects Operating Earnings
xpedx is reflected as a Discontinued Operation from 2010 onward
N.A. Consumer Packaging is reflected as a Discontinued Operation from 2013 onward
Slide 631 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)
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FootnotesSlide 65
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 observations1 2013 and onward include Temple-Inland pension plan2 Non-cash expense for U.S. plans only3 Through December 2019
Slide 661 Liability Driven Investment
Investor Roadshow I February 4, 2021
Contact Information
Investor Roadshow I February 4, 2021
Investor Relations
• Guillermo Gutierrez
+1-901-419-1731
• Michele Vargas
+1-901-419-7287
Media
• Thomas Ryan
+1-901-419-4333