International Paper to Sharpen Focus on Industrial Packaging

International Paper announced a plan to pursue a spin-off of the Company's Printing Papers segment into a standalone, publicly traded company ("SpinCo"). The transaction will result in two streamlined, leading companies well positioned for long-term success. Upon completion of the transaction, International Paper and SpinCo will each be well positioned to create long-term value. The Company expects the separation to be tax-free for the Company's shareowners for U.S. federal income tax purposes and plans to complete the spin-off late in the third quarter of 2021.

"We remain committed to producing sustainable products that people depend on every day and accelerating value creation for International Paper and our shareowners. This transaction represents a logical next step as we continue to build a better IP," said Mark Sutton, Chairman and Chief Executive Officer.

"International Paper will be a more-focused corrugated packaging and absorbent cellulose fibers company serving attractive segments, well-positioned to increase earnings and cash generation. I am confident that our plans will create value for our shareowners, employees, customers and other stakeholders.

" International Paper, an Advantaged Corrugated Packaging Company

International Paper intends to accelerate profitable growth in Industrial Packaging in North America and Europe, the Middle East and Africa and improve the returns of its Global Cellulose Fibers business.International Paper will continue its joint venture with Ilim Holdings in Russia.

The company intends to reduce its cost structure and accelerate earnings. International Paper will be a streamlined, more-agile organization and expects to generate an additional $350 - $400 million of annual earnings by the end of 2023, including $50 - $100 million in annual incremental earnings growth and $300 million in structural cost reductions. International Paper remains committed to its current capital allocation framework, which is the foundation for driving shareowner value.

SpinCo intends to raise debt in order to pay a dividend to International Paper, which will be used to pay down outstanding debt.

Following the completion of the transaction, International Paper expects to have approximately:

$17 billion in sales, 85% in Industrial Packaging and 15% in Global Cellulose Fibers

20,000 customers 20 containerboard mills with 14.5 million tons of annual capacity

8 pulp mills with 3.2 million metric tons of annual capacity 220 converting facilities

350 packaging designers

3,500 packaging formers at customer locations