EX-99.2 3 dex992.htm SLIDES OF INTERNATIONAL PAPER COMPANY, DATED FEBRUARY 2, 2006 Slides of International Paper Company, dated February 2, 2006
Fourth Quarter
2005 Review
February 2, 2006
Fourth Quarter
2005 Review
February 2, 2006
John V. Faraci
Chairman & CEO
Marianne M. Parrs
EVP & CFO
John V. Faraci
Chairman & CEO
Marianne M. Parrs
EVP & CFO
Exhibit 99.2

2
Forward-Looking Statements
These
slides
contain
forward-looking
statements.
These
statements
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
relate
to
(i)
market
and
economic
factors, including changes in the cost or availability of raw materials and energy,
competition, demand and pricing for the Company's products, the level of housing starts,
changes in international economic conditions, specifically in Brazil, Russia, Poland and
China, changes in currency exchange rates, changes in credit ratings issued by
nationally recognized statistical rating organizations, pension and healthcare costs and
natural disasters, such as hurricanes, (ii) the Company's transformation plan, including
the
ability
to
accomplish
the
transformation
plan,
the
impact
of
the
plan
on
the
Company's
relationship
with
its
employees,
customers
and
vendors
and
the
ability
to
realize anticipated profit improvement from the plan, and (iii) results of legal proceedings
and compliance costs, including unanticipated expenditures related to the cost of
compliance
with
environmental
and
other
governmental
regulations
and
the
uncertainty
of
the
costs
and
other
effects
of
pending
litigation.
We
undertake
no
obligation
to
publicly
update
any
forward-looking
statements,
whether
as
a
result
of
new
information,
future events or otherwise. These and other factors that could cause or contribute to
actual results differing materially from such forward looking statements are discussed in
greater detail in the company's Securities and Exchange Commission filings.

3
During
the
course
of
this
presentation,
certain
non-
U.S. GAAP financial information will be presented.
A reconciliation of those numbers to U.S. GAAP
financial measures is available on the company’s
website at www.internationalpaper.com
under
Investors.
Statements Relating to
Non-GAAP Financial Measures

4
Agenda
Fourth Quarter 2005 Review
First Quarter 2006 Outlook
Transformation Plan Update
Fourth Quarter 2005 Review
First Quarter 2006 Outlook
Transformation Plan Update

5
Fourth Quarter 2005 Summary
Volume increased in uncoated paper and
packaging
Pricing lower
overall, with improvement at
quarter end
Manufacturing operations performed well
Raw material costs skyrocketed to peak 2005
levels
Volume increased in uncoated paper and
packaging
Pricing lower
overall, with improvement at
quarter end
Manufacturing operations performed well
Raw material costs skyrocketed to peak 2005
levels

6
(700)
(600)
(500)
(400)
(300)
(200)
(100)
0
4Q'05 vs. 3Q'05
4Q'05 vs. 4Q'04
2005 vs. 2004
(700)
(600)
(500)
(400)
(300)
(200)
(100)
0
4Q'05 vs. 3Q'05
4Q'05 vs. 4Q'04
2005 vs. 2004
(585)
(199)
(95)
EBIT ($MM)
Energy
Wood
Caustic Soda
Other
Higher Raw Material Costs
EBIT impact by period

7
Higher Raw Material Costs
EBIT impact 2005 vs. 2002
(500)
(400)
(300)
(200)
(100)
0
(500)
(400)
(300)
(200)
(100)
0
Caustic
Soda
Energy
Other
EBIT ($MM)
(430)
(395)
(125)
(100)
Wood
Total of $1.1 billion or $1.60 per share
negative impact in 2005 versus 2002

8
Diluted EPS from Continuing Operations
and Before Special Items
*
A
reconciliation
to
GAAP
EPS
is
available
at
www.internationalpaper.com
under
Investors
.04
.12
.13
.15
.13
.33
.27
.29
.14
.20
.21
.14
.12
.41
.32
.42
.36
2001
2002
2003
2004
2005
1Q
1Q
3Q
1Q
3Q
2Q
4Q
2Q
4Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
.31
.29
3Q
4Q
.12

9
$0.00
$0.10
$0.20
$0.30
$0.40
3Q'05
Price
Volume /
Downtime
Cost / 
Mix
Raw
Material
Land
Sales
Corporate
Items
Tax
Interest
Other
4Q'05
4Q’05 vs. 3Q’05
EPS $ / Share
EPS from cont. ops before special items
$.29
$.08
($.15)
($.03)
$.12
$.02
($.04)
$.05
($.02)
Energy            ($.09)
Wood Costs    ($.03)
Other              ($.03)
3Q05 Tax rate  33%
4Q05 Tax rate  22%
($.05)
Packaging      ($.02)
Lumber          ($.02)
Land & Realty Sales  ($0.02)
($.03)
Paper            $.06
Packaging     $.03
Other            ($.01)

10
0
4
8
12
16
20
0
4
8
12
16
20
2000
June
2001
Dec
2002
Dec
2003
Dec
2004
Dec
2005
Dec
17.9
15.2
14.8
15.5
14.6
12.2
$ Billion
Reduced total debt by  
$6 billion since June 2000
Committed to Reducing Debt
Except for December 2005 and January 2006, all periods include Carter Holt Harvey debt on IP’s balance sheet
11.9
2006E
Jan

11
12M’05 vs. 12M’04
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
12M'04
Price
Volume /
Downtime
Cost / 
Mix
Raw
Material
Land
Sales
Corporate
Items
Interest
Tax
Other
12M'05
$.24
EPS $ / Share
$1.26
($.37)
($.87)
EPS from cont. ops before special items
$.71
$1.08
($.03)
$.35
($.19)
($.11)
$.09
Energy               ($.37)
Wood Cost     
($.30)  
Caustic Soda  
($.13)
Other               
($.07)
Paper             $.55                   
Packaging      $.17
2004 Tax rate 26%  
2005 Tax rate 27.5%
Pension         ($.18)                  
Other             ($.01)
Land Sales  $.13
IP Realty      $.11
FX                 ($.04)                  
Divestitures   ($.05)
Paper           ($.25)
Packaging    ($.08)
Other            ($.04)

12
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
Containerboard
Uncoated Papers
Pulp
Coated Papers
Bleached Board
European Papers
*Includes indefinitely closed uncoated papers capacity at Pensacola, FL, Bastrop, LA and Jay, ME in 2Q05
(72,000 tons), 3Q05 (108,000 tons) and 4Q’05 (108,000 tons).  Permanently closed at end of 4Q’05.
215
65
50
270
Lack of Order Downtime
70
90
240
185
5
10
5
35
95
M  Short Tons
2002
2003
2004
2005
275*
270*
3Q05
4Q05
European Papers
15
10
Bleached Board
20
40
Uncoated Papers
185
130
Containerboard     
50
0
Coated Papers
0
15
195*

13
Printing Papers
2
U.S. operations only. Uncoated excludes Fine Paper   
$  2,010 
88
Sales
Earnings
4Q’05
3Q’05
$ Millions
$ Millions
Uncoated
2
Coated
2
Pulp
2
Europe
3
(uncoated)
Flat
Flat     
($5)     
€5
Volume
Realizations/ton
$  1,970
132
1
4Q’05 Change vs 3Q’05:
4Q’05 Change vs 3Q’05:
2%
(9%)
12%
5%
1
Includes special charge of $6 million for severance and other charges
related to the indefinite shutdowns of 3 U.S. paper machines, and     
$3 million for Riegelwood environmental reserves
3
Europe is average commodity cut-size price, excluding Russia   
Average IP realization (includes the impact of mix across all grades)

14
Industrial Packaging
Average IP realization (includes the impact of mix across all grades)
$  1,180
11    
Sales
Earnings
4Q’05
3Q’05
$ Millions
$ Millions
Containerboard
U.S. Container
Flat
($20)
Volume
Realizations/ton
$  1,115
33
1
4Q’05 Change vs 3Q’05:
4Q’05 Change vs 3Q’05:
20%
2%
1
Includes special charge of $4 million to adjust reserves previously provided

15
Consumer Packaging
Average IP realization (includes the impact of mix across all grades)
$  730
21     
Sales
Earnings
4Q’05
3Q’05
$ Millions
$ Millions
Bleached
Board
2
$10
Volume
Realizations/ton
$  685
37
1
4Q’05 Change vs 3Q’05:
4Q’05 Change vs 3Q’05:
1%
Converting Businesses
3
Sales Revenue
4%
2
U.S. operations only
3
Excludes IPPM
1
Includes special charge of $1 million for environmental reserve

16
Forest Products
Average IP realization (includes the impact of mix across all grades)
$  660 
257
Sales
Earnings
4Q’05
3Q’05
$ Millions
Lumber (mbf)
Plywood (msf)
($30)
$5
Volume
Realizations/unit
$   700
272
1
4Q’05 Change vs 3Q’05:
4Q’05 Change vs 3Q’05:
(5%)
(11%)
1
Includes special charge of $2 million in the third quarter for costs associated with relocations
of Forest Products headquarters to Memphis

17
Higher Raw Material Costs
4Q’05 vs. 3Q’05 EBIT impact by business 
(60)
(50)
(40)
(30)
(20)
(10)
0
(60)
(50)
(40)
(30)
(20)
(10)
0
Forest
Products
Paper
EBIT ($MM)
(44)
(21)
(8)
Industrial        
Packaging
Total of $95 million or $0.15 per share
negative impact in 4Q’05 versus 3Q’05
Energy
Wood
Caustic Soda
Other
(22)
Consumer        
Packaging

18
Special Items –
After Tax
•
Restructuring, Reserve                (142)
Adjustments & Other
•
Divestitures
(30)
•
Insurance Recoveries
21 
•
Tax Adjustments                             11
Special Items Total
(140)
($0.29)
Special Items –
After Tax
•
Restructuring, Reserve                (142)
Adjustments & Other
•
Divestitures
(30)
•
Insurance Recoveries
21 
•
Tax Adjustments                             11
Special Items Total
(140)
($0.29)
$MM
Diluted EPS
Special Items 4Q’05

19
Earnings from Continuing Operations
and Before Special Items
$0.12
Special Items
(0.29)
Loss from Continuing Operations
(0.17)
Discontinued Operations
0.01
Net Loss
($0.16)
Earnings from Continuing Operations
and Before Special Items
$0.12
Special Items
(0.29)
Loss from Continuing Operations
(0.17)
Discontinued Operations
0.01
Net Loss
($0.16)
Reconciliation to 4Q’05
Diluted
Earnings Per Share
Diluted EPS

20
Special Items –
After Tax
•
Restructuring, Reserve                (222)
Adjustments & Other
•
Divestitures
(73)
•
Insurance Recoveries
151 
•
Tax Adjustments                           446
•
Interest Income
33
Special Items Total
335
$0.66
Special Items –
After Tax
•
Restructuring, Reserve                (222)
Adjustments & Other
•
Divestitures
(73)
•
Insurance Recoveries
151 
•
Tax Adjustments                           446
•
Interest Income
33
Special Items Total
335
$0.66
$MM
Diluted EPS
Special Items 2005

21
Earnings from Continuing Operations
and Before Special Items
$1.08
Special Items
0.66
Earnings from Continuing Operations
1.74
Discontinued Operations
0.47
Net Earnings
$2.21
Earnings from Continuing Operations
and Before Special Items
$1.08
Special Items
0.66
Earnings from Continuing Operations
1.74
Discontinued Operations
0.47
Net Earnings
$2.21
Reconciliation to 2005
Diluted
Earnings Per Share
Diluted EPS

22
Capital Spending
Depreciation & Amort.
Net Interest Expense
3
Corporate Items
Effective Tax Rate
3
Capital Spending
Depreciation & Amort.
Net Interest Expense
3
Corporate Items
Effective Tax Rate
3
$ 1.2 B
$ 1.4 B
$ 600 MM
$ 750-800 MM
30%
2006 Est.
2
Key Financial Statistics
$ 1.2 B
$ 1.4 B
$ 650 MM
$ 595 MM
27.5%
2005
1
$ 1.2 B
$ 1.4 B
$ 710 MM
$ 470 MM    
26%
2004
1
1
Excludes Carter Holt Harvey results
2
Includes impact of all businesses for entire year
3
Before special items

23
First Quarter 2006 Outlook
Volume –
seasonally slow start, but some
positive signs
Average prices improving
•
Implementing IP’s announced price increases in paper
and packaging
Continued progress in improving operations
Input costs mixed, but flat overall
Lower land sales
Businesses under evaluation included in first
quarter results
Volume –
seasonally slow start, but some
positive signs
Average prices improving
•
Implementing IP’s announced price increases in paper
and packaging
Continued progress in improving operations
Input costs mixed, but flat overall
Lower land sales
Businesses under evaluation included in first
quarter results

24
Transformation Plan Update
Process on track -
sales books distributed for five
of the businesses under evaluation
Debt reduction of $2.4 billion in 2005
Maintaining focus on improving key platform
operations –
fewer, bigger, better strategy
Reinvestment plan -
taking a disciplined approach
Process on track -
sales books distributed for five
of the businesses under evaluation
Debt reduction of $2.4 billion in 2005
Maintaining focus on improving key platform
operations –
fewer, bigger, better strategy
Reinvestment plan -
taking a disciplined approach

25
Q & A
Q & A

26
Appendix
Appendix

27
Earnings by Industry Segment
Earnings by Industry Segment
Printing Papers
$88
$141
$196
578
$581
Industrial Packaging
11
37
131
238
380
Consumer Packaging
21
38
39
123
165
Distribution
25
23
22
84
87
Forest Products
257
274
176
943
793
Other Businesses
(5)
5
7
17
38
Operating Profit
397
518
571
1,983
2,044
Interest Expense
(151)
(163)
(169)
(647)
(710)
Minority Interest
(1)
0
3
0
5
Corporate Items, net
(167)
(142)
(156)
(597)
(469)
Earnings from continuing operations
before income taxes, minority
interest & special items
$78
$213
$249
$739
$870
Earnings by Industry Segment
Printing Papers
$88
$141
$196
578
$581
Industrial Packaging
11
37
131
238
380
Consumer Packaging
21
38
39
123
165
Distribution
25
23
22
84
87
Forest Products
257
274
176
943
793
Other Businesses
(5)
5
7
17
38
Operating Profit
397
518
571
1,983
2,044
Interest Expense
(151)
(163)
(169)
(647)
(710)
Minority Interest
(1)
0
3
0
5
Corporate Items, net
(167)
(142)
(156)
(597)
(469)
Earnings from continuing operations
before income taxes, minority
interest & special items
$78
$213
$249
$739
$870
$ Millions
3Q’05
3Q’05
4Q’04
4Q’04
4Q’05
4Q’05
2005
2005
2004
2004
Before special items

28
Before Special Items
Q1
223
(46)
(2)
175
21%
488.9
0.36
Q2
225
(70)
(3)
152
31%
487.4
0.31
Q3
213
(71)
(3)
139³
33%
507.1
0.29
Q4
78
(16)
(4)
58
22%
486.0
0.12
Full Year Total
739
(203)
(12)
524
27.5%
509.7
1.08
Special Items
Q1
(103)
36
-
(67)
35%
488.9
(0.14)
Q2
34
(95)    
-
(61)
NM
487.4
(0.12)
Q3
159
444
-
603
NM
507.1
1.19
Q4
(243)
103
-
(140)
42%
486.0
(0.29)
Full Year Total
(153)
488
-
335
NM
509.7
0.66
Earnings from Continuing Operations
Q1
120
(10)
(2)
108
8%
488.9
0.22
Q2
259
(165)
(3)
91
64%
487.4
0.19
Q3
372
373
(3)
742³
NM
507.1
1.48
Q4
(165)
87
(4)
(82)
53%
486.0
(0.17)
Full Year Total
586
285
(12)
859³
NM
509.7
1.74
2005 Earnings from Continuing
Operations
Pre-Tax 
Tax
MI
Net
ETR          Average
Diluted
Shares
2
EPS
1
$ MM
MM Shares
$/Share
$ MM
$ MM
$ MM
MI
–
Minority
Interest;
Net
–
Net
Income;
ETR
–
Effective
Tax
Rate;
EPS
–
Earnings
per
Share;
NM
–
Not
Meaningful
1
A
reconciliation
to
GAAP
EPS
is
available
at
www.internationalpaper.com
under
Investor
Information
2
Assuming dilution
3
Does not include impact of additional $7 million in 3Q and $27 million for full year of income related to dilutive securities

29
Before Special Items
Q1
99
(34)
(8)
57
34%
487.4
0.12
Q2
234
(71)
(8)
155
30%
488.2
0.32
Q3
288
(82)
(5)
201
28%
509.0
0.41
Q4
249
(39)
(5)
205
16%
488.9
0.42
Full Year Total
870
(226)
(26)
618
26%
488.4
1.26
Special Items
Q1
(14)
5
-
(9)
36%
487.4
(0.02)
Q2
(122)
4
-
(118)
3%
488.2
(0.24)
Q3
45
(31)
-
14
69%
509.0                  0.03
Q4
(55)
6
-
(49)
11%
488.9                 (0.10)
Full Year Total
(146)
(16)
-
(162)
-11%
488.4
(0.33)
Earnings from Operations
Q1
85
(29)
(8)
48
34%
487.4
0.10
Q2
112
(67)
(8)
37
60%
488.2
0.08
Q3
333
(113)
(5)
215
34%
509.0
0.44
Q4
194
(33)
(5)
156
17%
488.9
0.32
Full Year Total
724
(242)
(26)
456
33%
488.4
0.93
2004 Earnings from Continuing
Operations
$ MM
MM Shares
$/Share
$ MM
$ MM
$ MM
Pre-Tax 
Tax
MI
Net
ETR          Average
Diluted
Shares
2
EPS
1
MI
–
Minority
Interest;
Net
–
Net
Income;
ETR
–
Effective
Tax
Rate;
EPS
–
Earnings
per
Share
1
A
reconciliation
to
GAAP
EPS
is
available
at
www.internationalpaper.com
under
Investor
Information
2
Assuming
dilution

30
* U.S. only.
Average IP realization (includes the impact of mix across all grades)
Average Sales Realizations
Forest
Products
$/ton
Packaging
$/ton
Printing
Papers
Segments
297
391
663
405
482
860
811
3Q’05
Average Sales Realizations
282
342
702
456
453
773
811
4Q’04
284
346
651
425
470
862
816
Dec 05
Plywood, $/MSF
Lumber, $/MBF
Corrugated boxes*
Containerboard
Pulp
Coated
Uncoated
Grades
301
362
644
402
476
860
813
4Q’05
292
336
702
448
454
781
804
Dec 04
321
355
661
419
458
740
811
2004
263
322
661
384
425
732
761
2003
299
382
674
426
485
841
817
2005

31
Forest Resources 
Earnings Sources –
Gross Margin
•
Sales of Forestlands
$462
$315
$400
•
Harvest & Recreational Income
268
281
269
Forestland Expenses
(157)
(178)
(146)
Land Utilization (real estate),
Net of Expenses
71
124
198
Total EBIT
$644
$542
$721
Earnings Sources –
Gross Margin
•
Sales of Forestlands
$462
$315
$400
•
Harvest & Recreational Income
268
281
269
Forestland Expenses
(157)
(178)
(146)
Land Utilization (real estate),
Net of Expenses
71
124
198
Total EBIT
$644
$542
$721
$ Millions
2004
2004
2005
2005
2003
2003

32
Forest Resources
Earnings Sources –
Gross Margin
•
Sales of Forestlands
$139
$125
$65
•
Harvest & Recreational Income
75
63
81
Forestland Expenses
(30)
(43)
(55)
Land Utilization (real estate),
Net of Expenses
40
65
55
Total EBIT
$224
$210
$146
Earnings Sources –
Gross Margin
•
Sales of Forestlands
$139
$125
$65
•
Harvest & Recreational Income
75
63
81
Forestland Expenses
(30)
(43)
(55)
Land Utilization (real estate),
Net of Expenses
40
65
55
Total EBIT
$224
$210
$146
$ Millions
3Q’05
3Q’05
4Q’04
4Q’04
4Q’05
4Q’05

33
Forest Resources  
2003
2003
2004
2004
* Excludes sales of Champion forestlands  over last 3 years  which generated $550+ million of cash and the 12/31/04
sale of 1.1 million acres of forestland in Maine and New Hampshire
* Excludes sales of Champion forestlands  over last 3 years  which generated $550+ million of cash and the 12/31/04
sale of 1.1 million acres of forestland in Maine and New Hampshire
Average sales price/acre
Number of acres sold (M)
% of appraised value
$967
627
130%
$967
627
130%
$1,008
372
145%
$1,008
372
145%
Forestland prices per acre are increasing in both
absolute terms and versus appraised values
2005
2005
$1,423
285
165%
$1,423
285
165%

34
Pension Returns
Average annualized returns
•
2005
11.7%
•
Past 5 years
7.9%
•
Past 10 years
9.8%
Portfolio asset allocation
(at 12/31/05)
•
61%
Equity
•
28%
Debt
•
11%
Real estate & other

35
(500)
(400)
(300)
(200)
(100)
0
5.50
5.75
6.00
Discount
Rate (%)
8.50
8.50
8.75
Rate of
Return (%)
2006E
2005
2004
$ Millions
2004
2005
2006E
Annual Pension Expense*
Key Variables
Pension Expense
*U.S. plans only.  Pension expense reflects service cost, interest cost,
amortization of actuarial losses and expected return on plan assets
(110)
(240)
(370)

36
Higher Raw Material Costs
EBIT impact 4Q’05 vs. 3Q’05
Total of $95 million or $0.15 per share
negative impact in 4Q’05 versus 3Q’05
(80)
(60)
(40)
(20)
0
(80)
(60)
(40)
(20)
0
Energy
Wood
Other
EBIT ($MM)
(63)
(21)
(11)

37
Higher Raw Material Costs
EBIT impact 4Q’05 vs. 4Q’04
Total of $199 million or $0.32 per share
negative impact in 4Q’05 versus 4Q’04
(150)
(125)
(100)
(75)
(50)
(25)
0
(150)
(125)
(100)
(75)
(50)
(25)
0
Energy
Wood
Caustic
Soda
EBIT ($MM)
(112)
(46)
(16)
(25)
Other

38
Higher Raw Material Costs
4Q’05 vs. 3Q’05 EBIT impact by business 
(400)
(300)
(200)
(100)
0
(400)
(300)
(200)
(100)
0
Forest
Products
Paper
EBIT ($MM)
Industrial        
Packaging
Energy
Wood
Caustic Soda
Other
Consumer        
Packaging
(312)
(103)
(50)
(120)
Total of $585 million or $0.87 per share
negative impact 2005 versus 2004

39
Higher Raw Material Costs
EBIT impact 2005 vs. 2004
(300)
(250)
(200)
(150)
(100)
(50)
0
(300)
(250)
(200)
(150)
(100)
(50)
0
Caustic
Soda
Energy
Other
EBIT ($MM)
(242)
(191)
(65)
(87)
Wood
Total of $585 million or $0.87 per share
negative impact in 2005 versus 2004

40
0
50
100
150
200
250
300
Jan
Apr
July
Oct
Jan
Apr
July
Oct
Jan
Apri
July
Oct
Jan
Index: Jan 2003 Natural Gas Costs = 100
2003
2004
Natural gas costs           
peaked in October
Natural Gas Costs
2005
Trended higher in 4Q’05

41
U.S. Mill Wood Costs
90
100
110
120
Jan
Apr
July
Oct
Jan
Apr
July
Oct
Jan
Apr
July
Oct
Jan
Index: Jan 2003 Wood Costs = 100
2003
2004
* Delivered cost to  U.S. pulp & paper mills
Trended higher in 4Q’05
2005
4Q’05 U.S. mill wood
costs at 3-year highs

42
0
100
200
300
Jan
Apr
July
Oct
Jan
Apr
July
Oct
Jan
Apr
July
Oct
Jan
Index: Jan 2003 Caustic Soda Costs = 100
2003
2004
Caustic soda costs are
up
45%
versus 1Q’03
Caustic Soda Costs
2005
Trended higher in 4Q’05

43
Energy
54
28
45
40
$8.71
$3.45
$5.80
$6.47
0
20
40
60
80
2002
2003
2004
2005
0
2
4
6
8
10
Trillion BTUs
$/MMBTU
Natural Gas Consumed
Natural Gas Cost per unit
U.S. mills natural gas consumption
Natural gas consumption at
current U.S. pulp & paper mills
has decreased 49% since 2002
Total US Mill Energy Purchases before Natural Gas Hedges  -
$MM
$580                  $740                  $780                
$910

44
8
9
9
10
31
24
21
17
10
10
13
11
16
19
24
25
22
23
13
16
19
20
16
14
0%
100%
2002
2003
2004
2005
Energy
Natural gas as a % of total U.S. mills
MMBTU purchases is decreasing
% of Total
Natural Gas
Coal
Wood Waste
Fuel Oil
Other*
Electricity
$8.71
$2.88
$1.84
$6.70
$14.30
$5.51
2005 Avg
Cost per mmbtu
Substitute lower cost energy
*Other includes shredded tires, recycled oil, purchased steam and any other fossil fuels

45
0
2
4
6
8
10
12
14
2000
2005
Gas
Coal
Oil
Electricity
Steam
Other*
Reducing U.S. mill consumption per ton
MM BTU/Ton
Energy
Natural gas consumed per ton of paper
produced in 2005 fell 55% and total energy
consumed per ton fell about 12% since 2000
* Other fuel category includes purchased bark, shredded tires & recycled motor oil
4.4
2.0
55%
12%
Natural Gas
Coal
Fuel Oil
Electricity
Steam
Other

46
Domestic Facilities
Key input indicative purchase levels
Natural Gas
MMbtus
38,000,000
2
# 6 Fuel Oil
BBLs
5,200,000
2
Coal
Tons
1,500,000
2
Wood
Tons
65,000,000
OCC
1
Tons
600,000
Caustic Soda
Tons
400,000
Sodium Chlorate
Tons
300,000
LD Polyethylene
Tons
100,000
Latex
Tons
45,000
Energy
Energy
Fiber
Fiber
Chemicals
Chemicals
Units
Units
Annual Purchases
Annual Purchases
1
Old corrugated containers
2
2005
Run Rate

47