International Paper : Third Quarter 2023 Earnings Presentation

Third Quarter 2023 Earnings

October 26, 2023

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-lookingstatements. 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) 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 green house gases and other environmental, social and governance matters; (ii) the level of our indebtedness and changes in interest rates (including the impact of current elevated interest rate levels); (iii) the impact of global and domestic economic conditions and industry conditions, including with respect to current negative macroeconomic conditions, inflationary pressures and changes in the cost or availability of raw materials, energy sources and transportation sources, supply chain shortages and disruptions, competition we face, cyclicality and changes in consumer preferences, demand and pricing for our products, and conditions impacting the credit, capital and financial markets, including possible instability in such markets and/or disruptions to the banking system due to potential or actual bank failures; (iv) domestic and global geopolitical conditions, military conflict (including the Russia/Ukraine conflict, the conflict in Israel and surrounding areas, the possible expansion of such conflicts, and the potential geopolitical and economic consequences associated therewith), 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; (v) the amount of our future pension funding obligations, and pension and healthcare costs; (vi) unanticipated expenditures or other adverse developments related to compliance with existing and new environmental, tax, labor and employment, privacy, anti-briberyand anti-corruption,and other U.S. and non-U.S.governmental laws and regulations; (vii) 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; (viii) risks inherent in conducting business through joint ventures; (ix) our ability to achieve the benefits expected from, and other risks associated with, acquisitions, joint ventures, divestitures, spinoffs and other corporate transactions, (x) cybersecurity and information technology risks, including as a result of security breaches and cybersecurity incidents; (xi) loss contingencies and pending, threatened or future litigation, including with respect to environmental related matters; (xii) our exposure to claims under our agreements with Sylvamo Corporation; (xiii) our failure to realize the anticipated benefits of the spin-offof Sylvamo Corporation and the qualification of such spin-offas a tax-freetransaction for U.S. federal income tax purposes; and (xiv) our ability to attract and retain qualified personnel, particularly in light of current labor market conditions. These and other factors that could cause or contribute to actual results differing materially from such forward-lookingstatements can be found in our press releases and reports filed with the U.S. Securities and Exchange Commission. 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 https://www.internationalpaper.com/investors/financial- reports/quarterly-results.

Discontinued Operations

As a result of the spin-offof our global Printing Papers business on October 1, 2021, the Printing Papers business segment has been eliminated. Historical results have been adjusted to reflect this business as a discontinued operation. In addition, as previously announced, the Company sold its interest in the Ilim joint venture on September 18, 2023. Current and historical results have been adjusted to reflect Ilim as a discontinued operation.

Ilim JV and Sylvamo Corporation Investment Information

All financial information and statistical measures regarding our prior 50/50 ownership in the Ilim joint venture in Russia ("Ilim") and our prior 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.

See footnotes beginning on page 33 for footnoted material throughout the presentation

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Third Quarter 2023 Highlights

• Taking actions while navigating challenging macro environment
• • Accelerating marginal cost reduction
  • Exceeded FY target for Building a Better IP initiatives
  • Optimizing our mill system to reduce fixed cost
• Solid mill operating performance
• Demand recovery continued
• Completed sale of Ilim

Adjusted Operating EPS1

$0.64

3Q23

$0.59

2Q23

$0.83

3Q22

All periods have been adjusted to reflect the Ilim JV as discontinued operations

Third Quarter 2023 Earnings 10/26/2023	3

Third Quarter 2023 Financials

	3Q22	2Q23	3Q23
Sales ($B)	$5.4	$4.7	$4.6
Adjusted EBIT1 ($MM)	$450	$326	$332
Adjusted Operating EPS2	$0.83	$0.59	$0.64
Adjusted EBITDA1 ($MM)	$711	$570	$590
Adjusted EBITDA Margin1	13.2%	12.2%	12.8%
Free Cash Flow3 ($MM)	$197	$261	$240

All periods have been adjusted to reflect the prior Ilim JV as discontinued operations

Adjusted EBITDA1 ($MM)

$590

3Q23

$570

2Q23

$711

3Q22

Third Quarter 2023 Earnings 10/26/2023	4

3Q23 vs 2Q23 Adjusted Operating EPS1

							0.8
							0.7
				.08	(.02)	.02	.64
.59	(.35)		.30
						0.6
							0.5
							0.4
		.02					0.3
							0.2
							0.1
							0
2Q'23	Price/Mix	Volume	Operations	Maintenance	Input Costs	Corporate	3Q'23
			& Costs	Outages		& Other Items

Third Quarter 2023 Earnings 10/26/2023	5

Industrial Packaging 3Q23 vs 2Q23 Adjusted EBIT1

				34	(12)	325
304	(103)
	103
		(1)
$ Million
2Q'23	Price/Mix	Volume	Operations	Maintenance	Input Costs	3Q'23
			& Costs	Outages

Lower price/mix from index movement and exports

One less shipping day QoQ

IP U.S. box shipments -4.0% YoY (daily) Export channel demand improved Strong mill operating performance

Effective cost management, lower cost of company paid benefits, and less economic downtime

Higher energy and OCC, partially offset by lower chemical costs

Third Quarter 2023 Earnings 10/26/2023	6

Global Cellulose Fibers 3Q23 vs 2Q23 Adjusted EBIT1

30 (54)

527

362

$ Million

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2Q'23	Price/Mix	Volume	Operations	Maintenance	Input Costs	3Q'23
			& Costs	Outages

Lower price/mix from index movement

Higher fluff volume, partially offset by reduction in commodity pulp

Strong mill operating performance

Effective cost management, improved supply chain cost, and lower cost of company paid benefits

Lower wood and chemical costs

Third Quarter 2023 Earnings 10/26/2023	7

Fourth Quarter Earnings Outlook

Changes from 3Q23

Industrial Packaging		Cellulose Fibers

Price & Mix

Volume

Ops & Costs

Maintenance

Outages

Inputs & Freight

Prior index movement

& lower export pricing to date

Seasonality & improving demand (+)

N.A. 1 less day (-)

Non-repeats(-)

Lower unabsorbed fixed costs

$21MM lower

Higher OCC

Prior index movement

Improving mix

Improving demand, less commodity

Non-repeats & timing of spend (-)

Lower unabsorbed fixed costs

$28MM higher

Lower

Other

• 4Q23 corporate expense of $(15)MM
• 4Q23 interest expense of $(50)MM
• FY23 tax rate outlook of ~22%

Third Quarter 2023 Earnings 10/26/2023	8

Building a Better IP

Exceeded Full Year Target

Incremental Annual Earnings Growth Target

$ Millions

				$150
				to
	YTD Actual = $195	$125
		$150
		to
Actual = $250		$125

						$225
						to
		-$95				$200			2023		2024
	Dis-synergies	2022

YTD

80%

15%

5%

5-Year

Average

YoY Achievement

$75MM 3Q23 / $195MM YTD

Strategy Acceleration

• Value capture
• Profitable growth

Process Optimization

• Leverage advanced technology & data analytics
• Optimize customer order scheduling & transportation planning
• Mill monitoring & process control
• Sourcing opportunities

Lean Effectiveness (significant improvement in '22)

• Streamline the organization
• Overhead spend reduction

Third Quarter 2023 Earnings 10/26/2023	9

Industrial Packaging

Taking Actions to Drive Profitable Growth

Commercial Excellence

Operational Excellence

Investment Excellence

•	Improving customer & segment mix	•	Reducing fixed & marginal costs	•	Expanding capabilities
•	Capturing additional value	•	Leveraging advanced technology	•	Improving productivity
•	Leveraging data analytics to	•	Developing workforce skillsets	•	Optimizing system flexibility
	improve margins			•	Strengthening box system
•	Growing specialty businesses			•	Building talent

• Innovation

Third Quarter 2023 Earnings 10/26/2023

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