![]() Fourth Quarter 2007 Review February 7, 2008 Fourth Quarter 2007 Review February 7, 2008 Tim S. Nicholls Senior Vice President & Chief Financial Officer John V. Faraci Chairman & Chief Executive Officer |
![]() 2 Forward-Looking Statements Forward-Looking Statements These slides and statements made during this presentation 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) industry conditions, including but not limited to changes in the cost or availability of raw materials and energy, transportation costs, the company's product mix, demand and pricing for its products; (ii) global economic conditions and political changes, particularly in Latin America, Russia, Europe and Asia, including but not limited to changes in currency exchange rates, credit availability, and the company's credit ratings issued by recognized credit rating organizations; (iii) natural disasters, such as hurricanes and earthquakes; (iv) the company's ability to realize anticipated profit improvement from its transformation plan, and (v) unanticipated expenditures related to the cost of compliance with environmental and other governmental regulations and to actual or potential 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 internationalpaper.com under Investors. Statements Relating to Non-GAAP Financial Measures Statements Relating to Non-GAAP Financial Measures |
![]() 4 2007 annual profits up 52% 2007 EPS up 67% Transformation plan on track Continuing trend of margin expansion Steady & balanced NA paper & packaging demand Record earnings growth outside North America IP Fourth-Quarter Profits up 21% From continuing operations and before special items |
![]() 5 Operating Profit Expansion Improvement in all Operating Businesses (31%) Forest Products 11% Operating Profits 15% Consumer Packaging 14% Distribution 30% Industrial Packaging 44% Printing Papers 2007 vs. 2006 ($MM) From continuing operations before special items |
![]() 6 2003 2004 2005 2006 2007 Diluted EPS from Continuing Operations before Special Items Diluted EPS from Continuing Operations before Special Items A reconciliation to GAAP EPS is available at www.internationalpaper.com under the Investors tab at presentations $0.41 $0.82 $0.70 $1.33 $2.22 FY .15 .11 .03 .02 .16 .30 .34 .27 .20 .04 .12 .30 .45 .47 .45 .52 .57 .69 .11 .17 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q |
![]() 7 1.1% 5.8% 3.4% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 2005 2006 2007 EBIT Margins Expansion in Operating Businesses EBIT Margins Expansion in Operating Businesses Includes unallocated expenses Excludes special items, Forest Products and divested businesses +230 BP +470 BP |
![]() 8 .69 .57 .13 .02 .04 .11 (.02) (.03) (.04) (.07) (.02) $0.25 $0.35 $0.45 $0.55 $0.65 $0.75 $0.85 3Q '07 Price Volume Cost/Mix Pensacola Land Sales Input & Distrib.Costs Unallocated Expenses Labor Agreements Tax 4Q '07 $ / Share $ / Share Packaging .02 Papers .02 Containerboard .06 P&C .03 Europe .02 Cost/Mix Outages Wood (.02) Energy (.02) Chemicals (.02) Freight (.01) 4Q ’07 ETR 31% 3Q ’07 ETR 29% 4Q07 vs. 3Q07 EPS from Continuing Operations before Special Items 4Q07 vs. 3Q07 EPS from Continuing Operations before Special Items (.04) .02 |
![]() 9 2.22 1.33 .05 .69 .37 .02 .66 (.02) (.35) (.15) (.30) (.08) $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 12M '06 Price Volume Cost/Mix Pensacola Input & Distrib.Costs Land Sales Cash Redeployment DivestituresUnallocated Expenses / Other Tax 12M '07 $ / Share $ / Share IPG .12 Coated Paperboard .07 P&C .32 Europe .15 Wood (.14) Chemicals (.09) Energy (.02) Freight (.05) Interest .33 Shares .22 Reinvest. .14 Cost/Mix .44 Outages (.07) 2007 ETR 30% 2006 ETR 29% 2007 vs. 2006 EPS from Continuing Operations before Special Items 2007 vs. 2006 EPS from Continuing Operations before Special Items |
![]() 10 (10) (77) (85) (33) ($90) ($80) ($70) ($60) ($50) ($40) ($30) ($20) ($10) $0 Wood Chemicals Freight Energy $205 million, or $0.30/share, negative $205 million, or $0.30/share, negative purchase price variance in 2007 vs. 2006 purchase price variance in 2007 vs. 2006 Increasing Input & Distribution Costs Global EBIT Impact 2007 vs. 2006 Increasing Input & Distribution Costs Global EBIT Impact 2007 vs. 2006 Costs for continuing businesses |
![]() 11 U.S Mills Wood Cost Significant Increases in the West Region U.S Mills Wood Cost Significant Increases in the West Region (7) (63) (65) 5 ($70) ($60) ($50) ($40) ($30) ($20) ($10) $0 $10 East Central West Total IP West Region Mills: Mansfield & Pineville (containerboard), Texarkana (coated paperboard), Louisiana (uncoated freesheet) 100% 25% 29% 46% % of Total Volume Purchase price variance for delivered wood costs |
![]() 12 U.S. Total Purchased Energy Consumption Reduced 27% per/ton since 2001 U.S. Total Purchased Energy Consumption Reduced 27% per/ton since 2001 Mills only “Other” includes purchased electricity and steam, coal, purchased wood waste, and other materials The annual savings from the reduction in The annual savings from the reduction in consumption and change in fuel mix is $285 million consumption and change in fuel mix is $285 million 0 2 4 6 8 10 12 14 2001 2002 2003 2004 2005 2006 2007 Gas & Oil Other |
![]() 13 Improved Overall Equipment Efficiency Reducing Manufacturing Costs Improved Overall Equipment Efficiency Reducing Manufacturing Costs 75% 79% 80% 81% 82% 83% 84% 75% 76% 77% 78% 79% 80% 81% 82% 83% 84% 85% 2001 2002 2003 2004 2005 2006 2007 The cumulative savings from OEE The cumulative savings from OEE improvements is $270 million improvements is $270 million All IP mills |
![]() 14 Non-Price Improvement Update $400 Million Target Non-Price Improvement Update $400 Million Target $270* $130 $125 $15 2007 $330 Total Non-Price Improvement $145 Cost Reduction $45 Mix $140 Volume 2006 $ Millions * Excludes Pensacola start-up costs |
![]() 15 ($200) $0 $200 $400 $600 $800 $1,000 $1,200 2003 vs. 2002 2004 vs. 2003 2005 vs. 2004 2006 vs. 2005 2007 vs. 2006 2002 - 2007 Price Increases / Decreases Input Cost Increases Recovering Input Cost Increases Recovered via Price Increases Recovering Input Cost Increases Recovered via Price Increases North American Papers & Packaging |
![]() 16 Quarterly Operating Profit Growth from Continuing Operations before Special Items Quarterly Operating Profit Growth from Continuing Operations before Special Items $10 European Industrial Packaging $75 Forest Products $20 European Paper $9 Brazilian Paper $9 Pulp 4Q07 vs. 3Q07 ($31) North American Paper ($1) ($9) $18 $ Million Distribution Consumer Packaging North American Industrial Packaging |
![]() 17 Printing Papers * Excludes a $128 million special charge Average IP price realization (includes the impact of mix across all grades) $4 1% Brazilian Uncoated Papers €7 5% European Uncoated Papers $16 11% U.S. Pulp $13 (2%) N.A. Uncoated Papers Price Realization per Ton Volume Business 4Q07 vs. 3Q07 $314 $1,720 4Q07 $307 $1,660 3Q07 $319* $1,475 4Q06 Earnings Sales $ Million |
![]() 18 Printing Papers Earnings 4Q07 vs. 3Q07 Printing Papers Earnings 4Q07 vs. 3Q07 314 307 10 4 30 (21) (6) (10) $250 $270 $290 $310 $330 $350 $370 3Q07 Price Volume Cost / Mix Materials & Freight Labor Agreements FX 4Q07 Cost (18) Mix 3 Outages 19 |
![]() 19 Industrial Packaging Average IP price realization (includes the impact of mix across all grades) * Total 3Q07 and 4Q07 domestic containerboard price realization was $35/ton; DEC exit rate reflected full realization of the $40 increase $33 (1%) N.A. Container $14* (1%) N.A. Containerboard Price Realization per Ton Volume Business 4Q07 vs. 3Q07 $144 $1,390 4Q07 $115 $1,305 3Q07 $130 $1,265 4Q06 Earnings Sales $ Million |
![]() 20 144 115 13 30 10 (5) (4) (15) $70 $80 $90 $100 $110 $120 $130 $140 $150 $160 $170 3Q '07 Price Volume Cost / Mix Materials & Freight Labor Agreements Others 4Q '07 Industrial Packaging Earnings 4Q07 vs. 3Q07 Industrial Packaging Earnings 4Q07 vs. 3Q07 |
![]() 21 Consumer Packaging Average IP price realization (includes the impact of mix across all grades) (1%) Converting Businesses $11/ton (1%) U.S. Coated Paperboard Price Realization Volume Business 4Q07 vs. 3Q07 $40 $780 4Q07 $49 $775 3Q07 $27 $735 4Q06 Earnings Sales $ Million |
![]() 22 Distribution Continued Strong xpedx Performance $39 $2,045 4Q07 $40 $1,880 3Q07 $31 $1,715 4Q06 Earnings Sales $ Million • Record 4Q07 earnings • Record full-year sales and earnings • 2007 full-year earnings up 14% vs. 2006 |
![]() 23 xpedx Margin Improvement xpedx Margin Improvement Operating Expenses % of Gross Profit 80% 81% 82% 83% 84% 85% 86% 87% 88% 89% 90% 2002 2003 2004 2005 2006 2007 Revenue Per Warehouse Square Foot $0.50 $0.55 $0.60 $0.65 $0.70 $0.75 2002 2003 2004 2005 2006 2007 • • 400 BP improvement since 2002 400 BP improvement since 2002 • • Each 100 BP improvement increases profits Each 100 BP improvement increases profits by $13 million by $13 million • • 34% increase in productivity since 2002 34% increase in productivity since 2002 • • 12% decrease in total warehouse space 12% decrease in total warehouse space |
![]() 24 Forest Products $2,130 207,000 2006 $2,655 Price / Acre 165,000 Acres Sold 2007 $174 $190 4Q07 $99 $120 3Q07 $162 $190 4Q06 Earnings Sales $ Million |
![]() 25 Replacing Land Sales Earnings Confident in our Ability Replacing Land Sales Earnings Confident in our Ability $1,734 $639 ‘02 – ‘06 Average $2,423 Total International Paper Operating Profit $185-$275 2008 Budget $471 Forest Products Operating Profit 2007 ($ Million) Excludes special items and discontinued operations |
![]() 26 Strategic Projects Good Progress on all Projects Strategic Projects Good Progress on all Projects Pensacola Lightweight Linerboard Riegelwood Fluff Pulp Svetogorsk BCTMP Sun Coated Paperboard Machine Tres Lagoas Paper Machine Tres Lagoas PM Pensacola No. 5 PM Sun Coated Paperboard PM |
![]() 27 Ilim Joint Venture Proceeding According to Plan Ilim Joint Venture Proceeding According to Plan Reporting IP’s 50% share of Ilim Holding SA earnings with a 90-day lag using the equity method of accounting Continuing healthy economic conditions in Russia & China Strong demand growth Operations performed well Focus on cost reduction, quality improvement, and capacity expansion |
![]() 28 Geographic Operating Profit Growth from Continuing Operations before Special Items Geographic Operating Profit Growth from Continuing Operations before Special Items 380% $19 Asia 20% $223 Total North America 2007 vs. 2006 11% $55 Printing Papers $273 $130 $124 $18 $56 $14 $80 $ Million 102% Brazil 62% Europe 80% Total Outside North America 14% 117% 11% 24% % Distribution U.S. Market Pulp Consumer Packaging Industrial Packaging Excludes Forest Products and other businesses |
![]() 29 2007 $1.9B 30% 70% 2006 $1.5B 20% 80% Operating Profit Growth Outside North America Diversifying our Earnings Capacity Operating Profit Growth Outside North America Diversifying our Earnings Capacity Operating profits excluding special items, Forest Products and other businesses North America Non-North America |
![]() 30 Free Cash Flow Improvement Up $700 million in 2007 Free Cash Flow Improvement Up $700 million in 2007 $0.6 ($0.1) Free Cash Flow ($1.3) $1.9 2007 ($1.1) Less Capital Investment $1.0 Cash Provided by Continuing Operations 2006 2007 Free Cash Flow ($ Billion) |
![]() 31 Working Capital Management 200 Basis Point Improvement since 1Q05 Working Capital Management 200 Basis Point Improvement since 1Q05 13.5% 14.0% 14.5% 15.0% 15.5% 16.0% 16.5% 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 |
![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() 32 Transformation Plan Scorecard On Track Through Year Two Transformation Plan Scorecard On Track Through Year Two G G G G R R G G G G G G Y G G G G Improve Existing Businesses Return Value to Shareholders EPS Improve Pricing Improve Balance Sheet Divestitures Input Cost / Transportation Selective Reinvestment |
![]() 33 1.33 2.22 .86 .33 .22 (.15) (.35) (.02) $0.75 $0.95 $1.15 $1.35 $1.55 $1.75 $1.95 $2.15 $2.35 12M '06 Core Business EBIT Land Sales Divestitures* Interest Shares Tax 12M '07 Transformation Plan Yielding Results Transformation Plan Yielding Results EPS from continuing operations before special items * Includes Harvest and Recreation income, Coated Papers and Arizona Chemical |
![]() 34 Outlook Current IP Business Conditions Outlook Current IP Business Conditions North America Steady demand Inventories in good shape Realizing announced paper & packaging price increases Increasing input costs Europe Some inventory building Increasing input costs Brazil Economy is strong Paper demand growing at GDP rate Increasing energy costs |
![]() 35 Looking Forward to 1Q08 Looking Forward to 1Q08 Accretive Ilim Group 4Q07 Earnings IP Pricing Volume Slight Increase Packaging Steady Paper 1Q08 Earnings Outlook Increase Input & Distribution Costs Decrease Land Sales Earnings Slight Increase Planned Maintenance Outages Slight Increase Steady Paper Packaging |
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![]() 37 Questions & Answers Questions & Answers Investor Relations Contacts Tom Cleves 901-419-7566 Ann-Marie Donaldson 901-419-4967 Media Contact Amy Sawyer 901-419-4312 |
![]() 38 Appendix |
![]() 39 Special Items & Discontinued Operations $0.78 ($0.02) $0.80 $0.11 $0.69 4Q07 $2.70 Net Earnings ($0.11) Discontinued Operations $2.81 Earnings from Continuing Operations $0.59 Special Items $2.22 Earnings from Continuing Operations & Before Special Items 2007 Diluted Earnings per Share |
![]() 40 Special Items & Discontinued Operations - ($3) Weldwood 2007 4Q07 ($0.02) $0.11 $/Share ($47) $4 $4 ($16) ($39) $252 ($58) $38 $113 $159 ($MM) ($0.11) $0.59 $/Share ($2) Wood Products - Kraft Papers $41 Tax Adjustments ($6) Restructuring & Corporate ($11) Total Discontinued Operations - Other ($6) Beverage Packaging Discontinued Operations (Net of tax) $44 Total Special Items $9 Divestitures - Brazil Asset Exchange Special Items (Net of minority interest & tax) ($MM) |
![]() 41 30% $732 $297 $1.1 $1.3 2007 1 32 - 33% $650 - $675 $340 - $360 $1.1 $1.1 2008 Estimate 29% $746 $521 $1.2 $1.1 2006 1 Effective Tax Rate 2 Unallocated Expenses ($ Million) Net Interest Expense ($ Million) Depreciation & Amortization ($ Billion) Capital Spending ($ Billion) 20% $607 $595 $1.2 $1.1 2005 1 1 Excludes discontinued operations and Coated Papers 2 Before special items and excluding Ilim Key Financial Statistics Key Financial Statistics |
![]() 42 Includes indefinitely closed uncoated papers capacity at Pensacola, FL, Bastrop, LA and Jay, ME in 2Q05 (72,000 tons), 3Q05 (108,000 tons) and 4Q05 (108,000 tons) which we permanently closed at end of 4Q05. Lack of Order Downtime Lack of Order Downtime 59 90 236 173 5 10 5 35 95 M Short Tons 2003 2004 2005 274* 270* 180* 25 2006 25 28 70 2007 35 4 7 7 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Containerboard Uncoated Papers Pulp Coated Paperboard European Papers 59 90 236 173 5 5 10 35 95 25 25 28 70 35 4 7 7 274* 270* 180* |
![]() 43 ($11) $9 ($16) ($4) Impact ($ Million) Total Impact Consumer Packaging Industrial Packaging Printing Papers 1Q08 Forecast vs. 4Q07 (20,000) 13,000 (26,000) (7,000) in Maintenance Outages (Tons) Maintenance outages and dollar impacts are estimated and are subject to change Incremental Maintenance Outages Incremental Maintenance Outages |
![]() 44 Operating Profits by Industry Segment from Continuing Operations before Special Items Operating Profits by Industry Segment from Continuing Operations before Special Items $924 ($746) $8 ($527) $2,189 $61 $678 $128 $172 $386 $764* 2006 $304 ($166) $3 ($86) $553 $12 $162 $31 $27 $130 $191 4Q06 $435 ($201) $4 ($79) $711 - $174 $39 $40 $144 $314 4Q07 ($732) ($188) Net Unallocated Expenses $6 - Other Businesses $2,423 $610 Operating Profit ($297) ($77) Net Interest Expense $19 $4 Minority Interest $1,413 $471 $146 $198 $501 $1,101 2007 $349 $99 $40 $49 $115 $307 3Q07 Earnings from continuing operations before income taxes, minority interest & special items Forest Products Distribution Consumer Packaging Industrial Packaging Printing Papers ($ Million) Industry segment information has been reclassified to conform with minor changes in 2006 organizational structure *Includes $75 million for the Coated and Supercalendered papers business sold in 2006. |
![]() 45 Geographic Business Segment Operating Results from Continuing Operations before Special Items Geographic Business Segment Operating Results from Continuing Operations before Special Items $6,785 $50 $230 $2,405 $180 $1,020 $3,725 $10 $510 $495 $1,250 $4,430* 2006 $330 $85 $85 $50 Asian $7,320 $280 $2,405 $265 $1,100 $3,880 $20 $655 $850 $1,510 $3,495 2007 $2,045 $75 $620 $85 $300 $1,005 $5 $180 $255 $415 $865 4Q07 $1,880 $70 $620 $65 $265 $975 $5 $165 $250 $370 $870 3Q07 $1,715 $70 $615 $45 $275 $945 $5 $125 $130 $345 $870 4Q06 Sales Asian $ Million Industrial Packaging North American European Asian Distribution European North American Consumer Packaging U.S. Market Pulp Brazilian European North American Printing Papers *Includes $920 million for the Coated and Supercalendered papers business sold in 2006. |
![]() 46 Geographic Business Segment Operating Results From Continuing Operations before Special Items Geographic Business Segment Operating Results From Continuing Operations before Special Items $128 $2 $41 $129 $3 $56 $327 $48 $122 $112 $482* 2006 $18 $6 $5 $2 Asian $146 $37 $143 $6 $88 $407 $104 $246 $214 $537 2007 $39 $9 $25 $2 $25 $117 $34 $81 $65 $134 4Q07 $40 $5 $39 $1 $15 $99 $25 $72 $45 $165 3Q07 $31 $10 $15 $1 $15 $114 $16 $18 $42 $115 4Q06 Operating Profit $ Million Industrial Packaging North American European Asian Distribution European North American Consumer Packaging U.S. Market Pulp Brazilian European North American Printing Papers *Includes $75 million for the Coated and Supercalendered papers business sold in 2006 |
![]() 47 2007 Earnings from Continuing Operations 2007 Earnings from Continuing Operations 1 Assuming dilution 2 A reconciliation to GAAP EPS is available at www.internationalpaper.com 3 Not meaningful $0.59 433 -4% $252 $0 $9 $243 Full Year Total $2.22 433 30% $963 ($24) ($424) $1,411 Full Year Total $0.80 424 21% $338 ($7) ($94) $439 4Q07 $0.52 426 28% $220 ($6) ($89) $315 3Q07 ($0.05) 426 32% ($23) $0 $11 ($34) 3Q07 $0.11 424 NM 3 $44 $0 $40 $4 4Q07 $0.57 426 29% $243 ($6) ($100) $349 3Q07 $2.81 $0.46 $1.02 ($0.06) $0.57 $0.69 $0.52 $0.45 Diluted EPS 2 448 15% $254 $0 ($44) $298 1Q07 431 8% ($23) $0 $2 ($25) 2Q07 Earnings from Continuing Operations 433 25% $1,215 ($24) ($415) $1,654 Full Year Total 431 30% $200 ($5) ($89) $294 2Q07 448 24% $457 ($6) ($143) $606 1Q07 $294 $223 $203 Net Income $MM 31% 29% 32% Estimated Tax Rate ($7) ($5) ($6) Minority Interest $MM Special Items $435 $319 $308 Pre-Tax $MM 424 ($134) 4Q07 431 ($91) 2Q07 448 ($99) 1Q07 Before Special Items Average Shares 1 MM Tax $MM under the Investors tab at presentations |
![]() 48 2006 Earnings from Continuing Operations 2006 Earnings from Continuing Operations 1 Assuming dilution 2 A reconciliation to GAAP EPS is available at www.internationalpaper.com under the Investors tab at presentations $1.32 489 71% $647 $0 ($1,617) $2,264 Full Year Total $1.33 489 29% $635 ($17) ($272) $924 Full Year Total $4.53 451 45% $2,047 ($3) ($1,668) $3,718 4Q06 $0.80 485 34% $385 ($5) ($204) $594 3Q06 $0.35 485 41% $169 $0 ($117) $286 3Q06 $4.06 451 46% $1,831 $0 ($1,583) $3,414 4Q06 $0.45 485 28% $216 ($5) ($87) $308 3Q06 $2.65 $0.13 ($2.49) ($0.17) ($2.61) $0.47 $0.30 $0.12 Diluted EPS 2 486 3% ($1,270) $0 $38 ($1,308) 1Q06 487 35% ($83) $0 $45 ($128) 2Q06 Earnings from Continuing Operations 489 59% $1,282 ($17) ($1,889) $3,188 Full Year Total 487 33% $62 ($4) ($33) $99 2Q06 486 1% ($1,212) ($5) $16 ($1,223) 1Q06 $216 $145 $58 Net Income $MM 28% 34% 26% Estimated Tax Rate ($3) ($4) ($5) Minority Interest $MM Special Items $304 $227 $85 Pre-Tax $MM 451 ($85) 4Q06 487 ($78) 2Q06 486 ($22) 1Q06 Before Special Items Average Shares 1 MM Tax $MM |
![]() 49 Business Segment Price Realization Business Segment Price Realization $763 $483 2006 $533 $862 2006 Full Year $802 $521 2007 $598 $907 2007 $825 $536 4Q07 $621 $925 4Q07 $792 $521 3Q07 $605 $912 3Q07 $787 $509 4Q06 $566 $898 4Q06 Quarterly Average Selling Price Realizations Industrial Packaging ($/ton) Printing Papers ($/ton) Containerboard Corrugated Boxes Pulp Uncoated Freesheet Average IP U.S. selling price realizations (includes the impact of mix across all grades) |
![]() 50 Pension Returns Pension Returns 10% Real Estate & Other 31% Bonds 59% Equity Portfolio Asset Allocation at 12/31/07 9.3% Past Ten Years 15.1% Past Five Years 9.6% 2007 Average Annualized Returns |
![]() 51 Annual Pension Expense* 377 210 115 $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 2006 2007 2008E Key Variables 6.2% 5.75% 5.5% Discount Rate 8.5% 8.5% 8.5% Rate of Return 2008E 2007 2006 Pension Expense * U.S. plans only. Pension expense reflects service cost, interest cost, amortization of actuarial losses and expected return on plan assets |
![]() 52 (5) (11) (18) (7) ($20) ($15) ($10) ($5) $0 Wood Energy Freight Chemicals $41 million, or $0.07 $41 million, or $0.07 per share, negative per share, negative purchase price variance in 4Q07 versus 3Q07 purchase price variance in 4Q07 versus 3Q07 Increasing Input & Distribution Costs Global EBIT Impact 4Q07 vs. 3Q07 Increasing Input & Distribution Costs Global EBIT Impact 4Q07 vs. 3Q07 Costs for continuing businesses |
![]() 53 0 50 100 150 200 250 Jan Apr July Oct Jan Apr July Oct Jan Apr July Oct Jan Apr Jul Oct Jan 2004 2005 2006 2007 Natural Gas Costs NYMEX Natural Gas closing prices Index: Jan 2004 Natural Gas Costs = 100 |
![]() 54 90 95 100 105 Jan Apr July Oct Jan Apr July Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan U.S. Mill Wood Costs U.S. Mill Wood Costs Index: Jan 2004 Wood Costs = 100 2004 2005 Delivered cost to U.S. pulp & paper ongoing mills 2006 2007 |
![]() 55 0 50 100 150 200 250 300 350 Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan 2004 2005 2006 2007 U.S. Caustic Soda Costs Index: Jan 2004 Caustic Soda Costs = 100 Delivered cost to U.S. facilities |
![]() 56 40 60 80 100 120 140 160 180 200 220 Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan 2006 2007 U.S. Corn Starch Costs Index: Jan 2006 Corn Starch Costs = 100 Delivered cost to U.S. facilities |
![]() 57 Chemicals Fiber Energy 50,000 215,000 Sodium Chlorate (Ton) - 40,000 LD Polyethylene (Ton) 4,000 24,000 Latex (Ton) 230,000 1,300,000 Coal (Ton) 8,200,000 40,000,000 Wood (Ton) 60,000 340,000 Caustic Soda (Ton) 310,000 600,000 Old Corrugated Containers (Ton) Commodity 500,000 15,000,000 Non – U. S. 4,000,000 #6 Fuel Oil (Barrel) 28,000,000 Natural Gas (MM BTU) U. S. Global Consumption Annual Purchase Estimates for Key Inputs Global Consumption Annual Purchase Estimates for Key Inputs 2007 Run Rate Estimates Includes only continuing businesses |
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