International Paper, USW Reach Agreement on Mill Bargaining

Memphis, Tennessee, USA, 24 August 2007 -- /PRNewswire/ -- International Paper (NYSE: IP) today announced it has reached a four-year agreement with the United Steelworkers of America that lays a new framework for bargaining future local labor contracts at 14 of its U.S. pulp, paper, and packaging mills. This agreement will contribute to a stronger working relationship between International Paper and the USW and to the company's long-term success.

The agreement, which was ratified by union members on 23 August, continues quality healthcare benefits, enhances company contributions to its retiree medical savings plan, and offers to improve employees' pension benefits. The agreement also defines hourly wage increases over the four-year extension of each local contract and establishes a separate wage structure for new hires. Additionally, the agreement lays the groundwork for increased collaboration on employee health and safety as well as on public policy issues.

The agreement prohibits labor strikes and lock-outs during the term of the current mill contracts and their four-year extensions. International Paper will continue to bargain local mill labor contracts as each nears expiration. Contract expiration dates are staggered over a four-year cycle.

"We are encouraged by the open and productive dialogue that led to this agreement. The outcome addresses the issues most important to our employees while also enabling International Paper to continue managing operating costs over the long term. This is a very positive step that will help the company's profitable growth for the benefit of all stakeholders, including our employees," said Jerry Carter, International Paper senior vice president of Human Resources and Communications.

Carter added that International Paper has made great progress in implementing the transformation plan that is strengthening the financial performance of the company. He also said that a strong, competitive company is the best source of jobs in a rapidly changing global economy.

The new agreement is the result of year-long discussions with the international leadership of the United Steelworkers of America union. The USW, which merged with the Paper, Allied-Industrial, Chemical and Energy Workers International Union (PACE) in 2005, now represents about 8200 of the company's paper, pulp, and packaging mill employees. Additional unions that are parties to agreements at some of these locations are currently voting on similar agreements.

About International Paper

International Paper (NYSE: IP), founded in 1898, is a global uncoated paper and packaging company with primary markets and manufacturing operations in North America, Europe, Russia, Latin America, Asia, and North Africa. Its uncoated papers and packaging businesses are complemented by xpedx, North America's largest distributor of printing papers and graphics supplies and equipment. Headquartered in the United States, International Paper employs approximately 54,000 people in more than 20 countries, and serves customers worldwide. Annual sales are about USD 22 billion. International Paper partners with customers and environmental, academic, civic, and governmental organizations, as well as landowners and harvesting professionals, to encourage responsible forest stewardship, improve the health and productivity of forestlands, and increase recovery of recyclable products. The company has a long-standing policy of using no wood from endangered forests. To learn more about International Paper, its products and commitment to economic, social, and environmental sustainability, visit www.internationalpaper.com.