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Management Side
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International Paper Commences Share Repurchase
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Memphis, Tennessee, USA, 15 August 2006 -- /PRNewswire/ -- International Paper (NYSE:IP) today announced that it is commencing a tender offer to purchase up to approximately 41.7 million shares, or approximately 8.4% of its currently outstanding shares.

Under the modified "Dutch Auction" tender offer, the company will repurchase up to USD 1.5 billion of its common stock at a price that is not less than USD 32.50 and not greater than USD 36 per share. The tender offer is scheduled to be completed on 13 September 2006.

On 13 July, the company announced that its board of directors authorized a share repurchase program to acquire up to USD 3 billion of the company's stock through the end of 2007 as part of International Paper's transformation plan, launched in 2005. The tender offer announced today commences the company's share repurchase program.

"When we announced our transformation strategy last year, we committed to a balanced and disciplined use of proceeds from divestitures, including returning value to shareowners. We believe this share repurchase, combined with strengthening our balance sheet and strategic reinvestment in our global platform businesses, will generate the best performance for International Paper and provide the strongest returns to its shareowners," said John Faraci, chairman and chief executive officer.

Tender ofer

The modified "Dutch Auction" tender offer for shares of the company's common stock will commence on 16 August 2006, and expire on 13 September 2006, at midnight, Eastern time, unless extended by the company.

Under the terms of the tender offer, the company is offering to purchase for cash up to 41,666,667 shares of its common stock at a purchase price not greater than USD 36 or less than USD 32.50 per share. The offer is not conditioned on any minimum number of shares being tendered. The offer is, however, subject to certain other conditions described in the offer to purchase and related documents. Shareowners can choose to tender their shares, specifying a target share price, within the designated range, at which they would sell.

After the tender offer expires, the company will examine the prices chosen by shareowners and then select the lowest price per share within the specified price range that will allow the company to purchase 41,666,667 shares or, if a lesser number of shares are properly tendered, all shares that are properly tendered. If shareowners tender more than 41,666,667 shares at or below the determined purchase price per share, the company will purchase those shares at the determined price per share, on a pro rata basis, based upon the number of shares each shareowner tenders, subject to certain exceptions. Shareowners whose shares are purchased in the tender offer will be paid the determined purchase price per share in cash, less any applicable withholding taxes and without interest after expiration of the tender offer. All shares purchased in the tender offer will be purchased at the same purchase price, regardless of whether the shareowner tendered at a lower price. Shares tendered but not purchased will be returned promptly following the expiration of the tender offer.

Subject to certain limitations and legal requirements, the company may purchase in the tender offer up to an additional 2% of its outstanding shares (or approximately 9.9 million shares) without extending the offer.

Goldman, Sachs & Co. and UBS Securities LLC will serve as dealer managers for the tender offer. D.F. King & Co., Inc. will serve as information agent and Mellon Investor Services will serve as the depositary.

While International Paper's board of directors has authorized the share repurchase program, it does not, nor does the company, the dealer managers, the information agent or the depositary make any recommendation to shareowners as to whether to tender or refrain from tendering their shares or as to the price or prices at which they may choose to tender their shares. Shareowners must make their own decision as to whether to tender their shares and, if so, how many shares to tender and the price or prices at which they will tender them. In doing so, shareowners should read carefully the information in, or incorporated by reference in, the offer to purchase and in the related letter of transmittal, including the purposes and effects of the offer. Shareowners should discuss their decision with their tax advisors, financial advisors and/or brokers.

The solicitation of offers to buy shares of the company's common stock will be made only pursuant to the offer to purchase and related materials that the company will send to its shareowners shortly. Shareowners should read those materials carefully because they will contain important information, including the various terms of, and conditions to, the tender offer. Shareowners will be able to obtain the offer to purchase and related materials at no charge at the SEC's website at http://www.sec.gov/, or the company's website at http://www.internationalpaper.com/, or from the information agent, D. F. King & Co., Inc. Shareowners are urged to read those materials carefully prior to making any decisions with respect to the tender offer.

About International Paper's Transformation Plan

Today's announcement is part of the transformation plan International Paper announced in July 2005 to strengthen the company by:

* focusing on two global platform businesses (uncoated papers and
packaging, along with xpedx, its merchant distribution business) and
improving profitability of those key businesses;

* exploring strategic options, including possible sale or spin-off, for
certain assets or businesses; and

* using proceeds from divestitures to return value to shareowners,
strengthen the company's balance sheet, and selectively reinvest in its
two global platform businesses.

Details about the transformation plan, and more specific information concerning the progress of the divestitures is contained in the company's Securities and Exchange Commission filings.

About International Paper

Headquartered in the United States, International Paper has been a leader in the forest products industry for more than 100 years. The company is currently transforming its operations to focus on its global uncoated papers and packaging businesses, which operate and serve customers in the United States, Europe, South America, and Asia. These businesses are complemented by an extensive North American merchant distribution system. International Paper is committed to environmental, economic and social sustainability, and has a long-standing policy of using no wood from endangered forests. To learn more, visit http://www.internationalpaper.com/.



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