<b>Big Quarterly Drop for IP</b>

International Paper reported first-quarter earnings of $24 million before special and extraordinary items. Earnings for the same period a year earlier were $249 million before special and extraordinary items.

After special and extraordinary items, International Paper reported a net loss of $44 million in the first quarter of 2001, compared with net earnings of $378 million in the first-quarter of 2000 after special and extraordinary items. The company reported a net loss of $371 million ($.85 per share) in the fourth quarter of 2000 after special and extraordinary items.

First-quarter net sales were $6.9 billion, compared to $6.4 billion in the first-quarter 2000.

The continuation of a dramatic slow down of orders due to a very weak U.S. economy and strong U.S. dollar hammered domestic profitability and export competitiveness. Also influencing earnings this quarter were higher energy costs, lower volumes and downward pressure on pricing. In addition, several of the company's larger facilities did not operate well early in the quarter. The company does not expect those operating issues to have a significant impact on performance in the second quarter.

During the quarter, International Paper took approximately 490,000 tons of market-related downtime.

Earnings in Consumer Packaging were affected by weakened bleached board demand and an increasingly competitive marketplace. Prices, however, remained steady. Industrial Packaging earnings were affected by taking significant downtime -- about 270,000 tons, or 20 percent of our system capacity -- to match our production with our customer orders. In addition, prices for containerboard were down slightly.