First Quarter 2014 Earnings April 30, 2014
Forward-Looking Statements Certain statements in these slides and made during this presentation may be considered 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 include but are not limited to: (i) the level of our indebtedness and increases in interest rates; (ii) industry conditions, including but not limited to changes in the cost or availability of raw materials, energy and transportation costs, competition we face, cyclicality and changes in consumer preferences, demand and pricing for our products; (iii) global economic conditions and political changes, including but not limited to the impairment of financial institutions, changes in currency exchange rates, credit ratings issued by recognized credit rating organizations, the amount of our future pension funding obligation, changes in tax laws and pension and health care costs; (iv) unanticipated expenditures related to the cost of compliance with existing and new environmental and other governmental regulations and to actual or potential litigation; (v) whether we experience a material disruption at one of our manufacturing facilities; (vi) risks inherent in conducting business through a joint venture; (vii) the receipt of governmental and other approvals and favorable rulings associated with the agreed-upon transaction combining xpedx with Unisource, the successful fulfillment or waiver of all other closing conditions for such transaction without unexpected delays or conditions, and the successful closing of such transaction within the estimated timeframe; and (viii) our ability to achieve the benefits we expect from all strategic acquisitions, divestitures and restructurings. 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 our Securities and Exchange Commission filings. We undertake no obligation to publicly update any forwardlooking statements, whether as a result of new information, future events or otherwise. 2
Statements Relating to Non-GAAP Financial Measures 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. 3
Ilim JV Information All financial information and statistical measures regarding our 50/50 Ilim joint venture in Russia ( Ilim ), other than historical International Paper Equity Earnings and dividends received by International Paper, have been prepared by the management of Ilim. Ilim management has indicated that the financial information was prepared in accordance with International Financial Reporting Standards and extracted from Ilim s financial statements, but International Paper has not verified or audited any of this information. Any projected financial information and statistical measures reflect the current views of Ilim management and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such projections. See Forward-Looking Statements. 4
First Quarter 2014 Results $549 EBIT 1 ($MM) $676 $568 Solid results despite NA weather impact in quarter (~$60MM) Higher pricing momentum in most global businesses Record 1Q results in NA Industrial Packaging Good execution on maintenance outages Courtland closure complete; costs ramping down xpedx spin progressing toward early 3Q close Significantly improved Ilim operational EBITDA Share buyback program well ahead of plan 1Q13 4Q13 1Q14 1 From continuing operations before special items and non-operating pension expense 5
1Q14 Financial Results 1Q13 4Q13 1Q14 EBITDA 1 ($MM) Sales ($B) $7.1 $7.2 $7.0 EBIT 1 ($MM) $549 $676 $568 EPS 2 $0.65 $0.83 $0.61 EBITDA 1 ($MM) $928 $1,047 $920 $928 $1,047 $920 EBITDA Margin 1 13.1% 14.4% 13.1% Free Cash Flow 3 ($MM) $300 $595 $254 1Q13 4Q13 1Q14 1 From continuing operations before special items and non-operating pension expense 2 EPS based on Operating Earnings (defined as Net Earnings (GAAP) from continuing operations before special items and non-operating pension expense) 3 See slide #27 for a reconciliation of cash provided by continuing operations to free cash flow 6
1Q14 vs. 4Q13 EPS.83.09 (.04).01 (.05) (.04) (.05) (.04) (.10).61 4Q13 Price / Mix Volume Operations & Costs Maintenance Outages Input Costs Corporate & Other Items Ilim JV Weather 1Q14 Operating Earnings 7
1Q14 vs. 1Q13 EPS.65.35 (.04) (.05) (.09).04 (.09).05 (.07) (.04) (.10).61 Courtland (.05) FX (.08) Ops.04 1Q13 Price / Mix Volume Maintenance Outages Input Costs Interest Corporate & Other Items Tax Operations & Costs Ilim JV Weather 1Q14 Operating Earnings 8
Global Input Costs vs. 4Q13 $39MM Unfavorable, or $0.06 per Share By Business By Input Type $4 OCC Wood ($1) ($11) ($9) ($9) NA Weather ($19) Industrial Packaging Energy Wood Freight Printing Papers Consumer Packaging Energy (NA Weather) Chemicals OCC ($33) Fiber Freight Energy Chemicals North America Outside North America Input costs ($MM) for continuing businesses 9
$ Million Industrial Packaging 1Q14 vs. 4Q13 486 27 32 7 (35) (7) (1) (42) 467 4Q13 Price / Mix Volume Operations & Costs Maintenance Outages Input Costs Other Weather 1Q14 Segment operating profit before special items 10
NA Industrial Packaging Relative EBITDA Margins 19.2% 23.0% 22.5% 2013 21.9% 21.2% 1 2013 22.3% 20.9% 19.4% 16.9% 13.9% 15.2% 2013 17.5% IP PCA RockTenn 1Q13 4Q13 1Q14 1 Reflects Company s change in accounting method beginning in 1Q14 IP EBITDA margins based on North American Industrial Packaging operating profit before special items Excludes the Recycling Business and revenue from trade volumes Competitor EBITDA margin estimates obtained from public filings and IP analysis 11
MSF Sold per Day IP U.S. Corrugated Shipments Trend Improving on Per Day Basis April 2014 Volume +3% vs 1Q14 Avg +2% vs April 2013 1Q14 Avg/Day April '13 April '14 (Estimate) 12
$ Million Consumer Packaging 1Q14 vs. 4Q13 7 (9) 32 3 (3) 0 (3) (9) 18 4Q13 Price / Mix Volume Operations & Costs Maintenance Outages Input Costs Other Weather 1Q14 Segment operating profit before special items 13
Consumer Packaging Earnings Runway Market Fundamentals NA SBS industry backlogs remain strong at 5 weeks, up over 20% vs. a year ago Continued realization of $50/ton March 1 price increase IP continues to capitalize on the growing shift from foam-based cups to paper cups (benefits Coated Paperboard and Foodservice businesses) Kenton, OH foodservice facility expansion complete by mid-2015 $60-70MM investment Adding 250,000 sq. feet and 125 jobs 2014 U.S. Cup Demand (Billions of Units) Plastic 21 Paper Hot 18 Every 1 Billion Foam & Plastic Cups Converted to Paper = 15 25 Thousand Tons of Coated Paperboard Demand Foam 31 Paper Cold 38 Kwidzyn, Poland investment in coated paperboard machine completed 1 st quarter. Enhances product quality and service platform for regional folding boxboard market 14
$ Million Printing Papers 1Q14 vs. 4Q13 24 (42) 143 (14) (4) (10) (5) (7) 85 4Q13 Price / Mix Volume Operations & Costs Segment operating profit before special items Maintenance Outages Input Costs FX Weather 1Q14 15
NA Printing Papers Update Courtland Shutdown Complete; Good Progress on Transition of Business All machines down early Feb Sheeters down in March Inventory to be depleted by late May Paper qualification trials 95% complete A significant number of employees have found jobs internally/externally Some cost impacts will continue into 2Q14 and beyond 16
Distribution 1Q14 vs. 4Q13 $ Million 1Q13 4Q13 1Q14 Sales $1,385 $1,415 $1,302 Earnings $2 $5 $7 Daily Sales Change vs. 1Q13 vs. 4Q13 Printing (4%) (8%) Packaging 1% (4%) Facility Solutions (15%) (16%) Slightly improved margins and lower costs more than offset weaker sales Sales negatively impacted by unfavorable weather Spin/Merge expected to be completed early 3Q14 Segment operating profit before special items 17 xpedx
Ilim Joint Venture 1Q14 vs. 4Q13 Sales Volume (thousand tons) $ Million 1Q13 4Q13 1Q14 647 677 781 Sales $462 $482 $554 Operational EBITDA 1 $38 $61 $115 F/X (Impact of USD Debt 2 ) ($27) ($15) ($114) IP Equity Earnings 3 ($11) ($12) ($31) Operational EBITDA improvement due to higher volume, pulp pricing and operational performance Unfavorable non-cash F/X impact due to Ruble weakening on the JV s USD debt Ilim JV results are on an IFRS basis with the exception of IP Equity Earnings which is US GAAP 1 Before F/X impact 2 1Q14 Ilim JV USD-denominated debt balance of ~$1.4B; Ilim Group s functional currency is the Ruble (RUB); Non-functional-denominated currency balances are measured monthly using the month-end exchange rate 3 IP Equity Earnings for 1Q13, 4Q13, and 1Q14 include after-tax f/x losses of $11MM, $6MM, and $45MM, respectively. 18
% of Capacity Ilim Joint Venture Projects Complete Bratsk Mill Project ramp continues; Expect to achieve full production by end of 2014 Total Mill Production Koryazhma Mill Production levels at 100% of project expectations in March PM-7 Production 4Q13 1Q14 2Q14F 4Q13 Jan '14 Feb '14 March '14 19
Second Quarter Outlook Changes from 1Q14 North America EMEA & Russia Brazil Asia 1 Volume Pricing / Mix Operations & Other Inputs & Freight Paper Stable Modestly lower Stable Stable Packaging Seasonal increase Stable Improving Stable Paper Increasing Modestly lower Increasing Stable Packaging CPG improving Stable Increasing Stable Paper Courtland wind down Stable Stable Stable Packaging Stable Stable Stable Stable Paper Stable Increasing wood costs Stable Stable Packaging Stable Stable Stable Stable Mill Maintenance Outages Paper Packaging 1Q14 Weather Events xpedx Earnings ILIM JV Equity Earnings 1 Includes India 2 Assumes stable F/X Increase $9MM Increase $19MM Non-recurring $60MM Stable Increase $23MM Increase $1MM None scheduled Increase $8MM None scheduled None scheduled Non-recurring currency impact 2 20
2Q14 Outlook Summary Continuing to run our businesses well Improved volume in NA Industrial Packaging Continued price increase implementation in NA Papers, NA Pulp, NA Consumer Packaging, Brazil Papers and Brazil Packaging Lower transitional costs as Courtland winds down Non-repeat of severe weather impacts in NA Heaviest maintenance outage quarter of year ($60MM higher vs. 1Q) NA Industrial Packaging mix normalizes Tax rate expected to be approximately 32% for the year Interest expense non-repeat of 1Q favorable item 21
Delivering on Our Commitments Running our businesses well and generating higher levels of FCF; Returns consistently above cost of capital Strengthening Balance Sheet Reduced balance sheet debt ~$2.5B since 1Q12 Achieved Moody s debt coverage target of <3X adjusted EBITDA as of year end 2013 Returning more cash to shareholders Increasing dividend over time 4Q12 $1.05 $1.20/share ~14% increase 4Q13 $1.20 $1.40/share ~17% increase Buying back shares $1.5B share buyback program 22
Annualized Dividend Payout Dividend Potential Continuing Growth $ Millions $1,000 $900 $800 $660-$880 1 $700 $600 $530 $615 $500 $460 $400 ~$1.60 $2.00/share $300 $200 $1.05/share $1.20/share $1.40/share $100 $0 4Q11 4Q12 4Q13 Potential 2 1 Total annual dollars based on 30%-40% of mid-cycle potential FCF of $2.2B as shared at May 2012 Investor Day 2 Based on potential post buyback share count (~420MM shares) 23
IP s Balanced Use of Cash Return Cash to Shareowners $1.5B Share Buyback Program Authorized September 10, 2013 Since 4Q13 call (Feb. 4) purchased ~$460MM (~10MM shares at average price of ~$46) Total program purchases through April 29 of ~$992MM (~21.7MM shares at average price of $45.80) 24
What Makes IP Different? Key Levers and Runway Enterprise North America Global Manufacturing expertise with low-cost assets People Capability EBITDA growth based on IP specific initiatives Ramping dividend and sizeable share repurchase program Attractive FCF yield with improving FCF Strong positions best margins Industrial Packaging optimization Consumer Packaging foam to paper cup conversions Papers repositioning post Courtland xpedx spin Leveraging global platform for profitable growth Coated Paperboard quality project at Kwidzyn Packaging synergies at Orsa Ilim ramp up 25
Appendix Investor Relations Contacts Jay Royalty 901-419-1731 Michele Vargas 901-419-7287 Media Contact Tom Ryan 901-419-4333 26
Free Cash Flow $ Million 1Q13 4Q13 1Q14 Cash Provided by Continuing Operations $516 $1,034 $531 1 Less Capital Investment ($216) ($439) ($277) Free Cash Flow $300 $595 $254 1 Excludes $58MM cash paid for pension plan contribution 27
Maintenance Outages Expenses 2014 $ Million 1Q14 2Q14F 3Q14F 4Q14F 2014F Industrial Packaging $69 $88 $28 $43 $228 North America 69 88 25 43 225 Brazil 0 0 3 0 3 Printing Papers Total $31 $64 $28 $46 $169 North America 30 39 12 38 118 Europe 1 24 1 0 26 Brazil 0 1 12 8 21 India 0 0 3 0 3 Consumer Packaging $20 $28 $0 $14 $62 North America 20 20 0 14 54 Europe 0 8 0 0 8 Total Impact $120 $180 $56 $103 $459 28
Thousand Tons Thousand Tons Thousand Tons Thousand Tons North American Downtime Containerboard 319 322 Uncoated Papers 237 207 78 143 300 129 94 19 197 176 30 49 100 1 158 70 127 167 99 88 276 46 178 60 118 14 52 2 38 18 53 19 58 16 Coated Paperboard 1 59 Market Pulp 49 36 18 53 27 15 18 6 22 24 13 1 24 24 15 18 1 8 14 21 20 2 15 Maintenance Market 1 Augusta PM#2 was permanently shutdown in March 2013 (36000 tons / quarter) 29
Special Items Before Tax Continuing Operations Industrial Packaging Printing Papers Consumer Pkg. xpedx Corporate Special Items Pre-Tax ($ Million) 1Q13 4Q13 1Q14 Acquisition and Integration Costs ($12) ($16) ($14) Box Plant Closures $5 Other ($2) ($2) Courtland Mill Shutdown ($67) ($495) India Goodwill & Trade Name Impairment Augusta PM Shutdown ($44) ($123) Other ($2) ($1) Reorganization ($7) ($2) ($2) Goodwill Impairment ($400) Debt Extinguishment ($6) ($1) Interest Income $6 xpedx Spinoff ($8) ($16) Other ($1) Total Special Items Before Tax ($65) ($616) ($529) 30
Special Items Net of Taxes 1Q14 $ Million EPS Earnings Before Special Items $265 $0.61 Special Items Net of Taxes: Tax Items ($9) Acquisition and Integration Costs ($8) Courtland Mill Shutdown ($302) xpedx Spinoff ($10) Other ($2) Total Special Items Net of Taxes ($331) ($0.76) Non-Operating Pension Expense ($27) ($0.06) Discontinued Operations Net of Taxes ($2) ($0.00) Net Earnings ($95) ($0.21) 31 Earnings Presentation First Quarter 2014
1Q14 EBITDA Integrated Mill Business Margins Industrial Packaging Operating Profit $ Million D & A $ Million Tons Thousand EBITDA per Ton EBITDA Margin North America 1 $460 $172 3,346 $189 23% Brazil 2 ($2) $5 59 $51 5% Printing Papers North America 3 $11 $28 506 $77 8% Europe & Russia 4 $37 $15 375 $139 15% Brazil $45 $29 271 $273 30% India 2 ($2) $5 44 $69 9% North American Pulp ($7) $16 327 $28 4% Consumer Packaging North America 5 ($6) $40 351 $97 7% Europe $26 $4 84 $357 33% Segment operating profit before special items 1 Includes Corrugated Packaging, Saturating Kraft & Bag businesses, Gypsum & Release Kraft business; excludes Recycling business and revenue from trade volumes 2 Includes adjustment for minority ownership share 3 Includes Bleached Kraft business 4 Uncoated Papers (excludes Pulp) 5 Includes Foodservice business 32
Operating Profits by Industry Segment Continuing Operations $ Million 1Q13 4Q13 1Q14 Industrial Packaging $369 $486 $467 Printing Papers $149 $143 $85 Consumer Packaging $51 $32 $18 Distribution $2 $5 $7 Operating Profit $571 $666 $577 Net Interest Expense ($170) ($133) ($142) Noncontrolling Interest / Equity Earnings Adjustment $0 $4 $0 Corporate Items ($22) $6 ($9) Non-Operating Pension Expense ($84) ($78) ($44) Special Items ($65) ($620) ($529) Net Earnings from continuing operations before income taxes, equity earnings & noncontrolling interest $230 ($155) ($147) Equity Earnings, net of taxes - Ilim ($11) ($12) ($31) 33
Geographic Business Segment Operating Results Revenue $ Million Sales Operating Profit 1Q13 4Q13 1Q14 1Q13 4Q13 1Q14 Industrial Packaging North America $3,025 $3,115 $3,084 $350 $479 $460 Europe $320 $335 $342 $18 $8 $9 Brazil $45 $95 $85 $1 ($1) ($2) Asia $170 $170 $182 $0 $0 $0 Printing Papers North American $645 $600 $515 $63 $37 $11 Europe $365 $395 $375 $54 $36 $38 Brazil $260 $295 $245 $45 $61 $45 Asia / India $75 $70 $64 ($4) ($2) ($2) N.A. Pulp $195 $210 $207 ($9) $11 ($7) Consumer Packaging North America $460 $480 $464 $22 $4 ($6) Europe $95 $95 $91 $32 $25 $26 Asia (Sun JV) $275 $290 $274 ($3) $3 ($2) xpedx $1,385 $1,415 $1,302 $2 $5 $7 Does not reflect total company sales 34
2014 Operating Earnings Pre-Tax $MM Tax $MM Noncontrolling Interest $MM Equity Earnings Net Income $MM Average Shares MM Diluted EPS 1 Operating Earnings 1Q14 $426 ($132) $4 ($33) $265 436 $0.61 Non-Operating Pension Expense 1Q14 ($44) $17 $0 $0 ($27) 436 ($0.06) Net Special Items 1Q14 ($529) $198 $0 $0 ($331) 436 ($0.76) Net Earnings from Continuing Operations 1Q14 ($147) $83 $4 ($33) ($93) 436 ($0.21) 1 A reconciliation to GAAP EPS is available at www.internationalpaper.com under the Investors tab at Webcasts and Presentations 35
Operating Business EPS 1.05.97.36.31.29.35.40.47.45.52 Impact of Mineral Rights Gain.57.73.45.49.83.42.41 Final Land Sale.38.27.22.49.08.89.78.81.83.74.73.63.53.81.69.65.64.83.61.12.12.15.07.09 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2005 2006 2007 2008 2009 2010 2005-2006 as originally reported 2007-2011 adjusted for elimination of the Ilim JV reporting lag 2005-2010 Net Earnings from continuing operations and before special items; 2010 onward reflects Operating Earnings 2011 2012 2013 36
$ Million Industrial Packaging 1Q14 vs. 1Q13 145 7 1 0 (12) (1) (42) 467 369 1Q13 Price / Mix Volume Operations & Costs Segment operating profit before special items Maintenance Outages Input Costs Other Weather 1Q14 37
Industrial Packaging Volume and Pricing Trends 1Q14 vs. 4Q13 1Q14 vs. 1Q13 Business Volume Price / Ton Volume Price / Ton U.S. Container 1 (4%) $9 (2%) $58 European Container 2% 4 4% 0 Average IP volume and price realization (includes the impact of mix across all segments) 1 Corrugator plant sales on FBA shipping day basis 38
$ Million Consumer Packaging 1Q14 vs. 1Q13 17 0 (3) (20) 51 (15) (3) (9) 18 1Q13 Price / Mix Volume Operations & Costs Maintenance Outages Input Costs Other Weather 1Q14 Segment operating profit before special items 39
Consumer Packaging Volume and Pricing Trends 1Q14 vs. 4Q13 1Q14 vs.1q13 Volume Price/Ton Volume Price/Ton NA Coated Paperboard (4%) $4 (5%) $29 Revenue Price Revenue Price Foodservice (2%) NA 11% NA Average IP price realization (includes the impact of mix across all grades) 40
NA Consumer Packaging EBITDA Margins 13.0% 8.8% 7.3% 2013 13.5% 8.4% 11.6% 2013 11.0% MWV reports 4/30 IP 1Q13 4Q13 1Q14 MWV IP EBITDA margins based on North American Consumer Packaging operating profit before special items Competitor adjusted EBITDA margins obtained from public filings and IP analysis; reflects Food & Beverage segment 41
$ Million Printing Papers 1Q14 vs. 1Q13 37 (21) 149 (52) (6) (22) 7 (7) 85 1Q13 Price / Mix Volume Operations & Costs Segment operating profit before special items Maintenance Outages Input Costs FX Weather 1Q14 42
Printing Papers Volume and Pricing Trends 1Q14 vs. 4Q13 1Q14 vs. 1Q13 Business Volume Price / Ton Volume Price / Ton NA Paper (19%) $56 (23%) $41 NA Pulp 1 (3%) $5 (2%) $35 European Paper Flat ( 4) 17% ( 34) Average IP volume and price realization (includes the impact of mix across all grades) 1 Reflects Fluff and Market Pulp combined 43
N.A. Printing Papers Relative EBITDA Margins 13.2% 12.8% 14.9% 13.4% 13.0% 2013 2013 11.4% 12.0% 6.6% IP 1Q13 4Q13 1Q14 Domtar IP EBITDA margins based on operating profit from continuing operations before special items Competitor EBITDA margin estimates obtained from public filings and IP analysis EBITDA margins reflect the Printing Papers and Pulp businesses 44
Printing Papers IP Brazil $ Million 1Q13 4Q13 1Q14 Sales $260 $295 $245 Earnings $45 $61 $45 EBITDA Margin 30% 31% 30% 1Q14 vs. 4Q13 1Q14 vs. 1Q13 Business Volume Price/Ton Volume Price/Ton Uncoated Freesheet (15%) $8 4% $31 Domestic (19%) $19 7% $83 Export (11%) ($2) 1% ($19) Segment operating profit before special items IP Brazil results are reported in the Printing Papers segment Average IP Brazil price realization (includes the impact of mix across all grades) 45
Ilim Joint Venture Pro Forma View As Shared on February 4th Earnings Call $ Million 09-12 Average 2013 2014 Depreciation $125 $177 ~$225 Interest Expense $15 $39 ~$75 EBITDA Ramp-Up $MM ~$550 - $600* $388 $128 $270 $350 - $400* ~$20-$40 IP Equity Earnings* ~$100-$120 IP Equity Earnings* '09 - '12 Average 2013 2H2013 Annualized 2014E Fully Ramped Potential Ilim JV figures are on an IFRS basis with the exception of IP Equity Earnings which is US GAAP. IP position in joint venture is 50%. * Assumes stable FX & current pulp prices 46
Ilim Joint Venture Volume and Pricing Trends 1Q14 vs. 4Q13 1Q14 vs. 1Q13 Business Volume Price/Ton Volume Price/Ton Pulp 21% $14 19% $61 Containerboard (5%) ($27) (8%) ($18) Average Ilim JV (100%) volume and price realization (includes the impact of mix across all grades and destinations) 47
Total Cash Cost Components 1Q14 YTD Overhead 8% Fiber 31% Chemicals 8% North American mills only Energy 11% Labor 12% Freight 15% Materials 15% 48
Global Input Costs vs. 1Q13 $67MM Unfavorable, or $0.12/Share By Business By Input Type $13 ($4) ($15) Wood ($29) Industrial Packaging ($23) Printing Papers Consumer Packaging Wood ($40) Fiber NA Weather OCC ($36) Energy Chemicals Freight Energy Wood Freight Energy (NA Weather) Chemicals OCC North America Outside North America Input costs ($MM) for continuing businesses 49
U.S. Mill Wood Delivered Cost Trend 2% Increase vs. 4Q13 Average Cost 130 125 120 115 110 105 100 95 90 2007 2008 2009 2010 2011 2012 2013 2014 Cost Indexed to January 2007 values 50
U.S. OCC Delivered Cost Trend 2% Decrease vs. 4Q13 Average Cost 200 180 160 140 120 100 80 60 40 2007 2008 2009 2010 2011 2012 2013 2014 Cost Indexed to January 2007 values 51
Natural Gas Costs Trend 37% Increase vs. 4Q13 Average Cost 250 200 150 100 50 0 2007 2008 2009 2010 2011 2012 2013 2014 Cost Indexed to January 2007 values NYMEX Natural Gas closing prices 52
U.S. Fuel Oil Trend 3% Increase vs. 4Q13 Average Cost 340 290 240 190 140 90 40 2007 2008 2009 2010 2011 2012 2013 2014 Cost Indexed to January 2007 values WTI Crude prices 53
U.S. Chemical Composite Index Trend 2% Decrease vs. 4Q13 Average Cost 200 175 150 125 100 75 2007 2008 2009 2010 2011 2012 2013 2014 Cost Indexed to January 2007 values Delivered cost to U.S. facilities: includes Caustic Soda, Sodium Chlorate, Starch and Sulfuric Acid 2006-2008 excludes WY PKG 54
2014 Global Consumption Annual Purchase Estimates for Key Inputs Commodity U. S. Non U. S. Natural Gas (MM BTUs) 65,000,000 11,000,000 Energy Fuel Oil (Barrels) 880,000 400,000 Coal (Tons) 490,000 700,000 Fiber Wood (Tons) 52,000,000 9,000,000 Old Corrugated Containers / DLK (Tons) 4,500,000 430,000 Caustic Soda (Tons) 400,000 130,000 Starch (Tons) 430,000 102,000 Chemicals Sodium Chlorate (Tons) 180,000 45,000 LD Polyethylene (Tons) 40,000 - Latex (Tons) 16,000 5,000 Does not include Asia or volume consumed by joint ventures (Sun JV, Ilim JV) Estimates are based on normal operations and may be impacted by downtime Excludes consumption related to Courtland operations terminated in 1Q14 55