Consumer PackagingConsumer Packaging

Mike BalduinoMike Balduino

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Converting Businesses Integrated to IP’s Coated Paperboard DivisionConverting Businesses Integrated to IP’s Coated Paperboard DivisionShorewood Packaging

High end packaging manufacturer $700MM in salesInnovative packaging for Home Entertainment, Tobacco and Consumer Products marketsCreative talent, advanced manufacturing techniques

Foodservice BusinessLeading producer of foodservice disposable products with over $400MM in sales– Quick-serve restaurants– Theaters– Convenience stores– Specialty coffee chains

World class graphics capability, global engineering support and equipment manufacture

ConsumerPackaging

33

14 Plants11 Sales Offices

5 Plants4 Sales Offices

2 Plants 2 Sales Offices

1 Plant1 Sales Offices

Shorewood Packaging Foodservice Business

2 Plants 1 Sales Offices

2 Plant3 Sales Offices

Europe

Americas Australasia

Middle East1 Plant1 Sales Office

ConsumerPackagingGlobal Customers Are Looking

for Global PartnersGlobal Customers Are Lookingfor Global Partners

44

Foodservice Strength: Providing Value-Added Packaging to Major Chains in Fastest Growing Segments

Foodservice Strength: Providing Value-Added Packaging to Major Chains in Fastest Growing Segments

Focus:QSR’s: outstanding quality, service and innovationTheaters / convenience stores: drive food / beverage purchases through graphics and production designSpecialty coffee: Selectively grow with industry leaders with product performance

Challenges:Higher input costs, contract management, capacity utilization / seasonality

FoodserviceBusiness

“Focus on Core Products Line to Key Customers” Strategy ““Focus on Core Products Line to Key CustomersFocus on Core Products Line to Key Customers”” Strategy Strategy

55

Our CustomersOur Customers FoodserviceBusiness

66

Base Case3Q06

Annualized

Market Growth Customer ValueDevelopment

ContractFlexibility

OperationalExcellence

Inflation Year 2009@Current

Price/Cost

Foodservice – Path ForwardFoodservice – Path Forward FoodserviceBusiness

* Component symbols used for illustrative purposes only, proportions not indicative of actual EBIT impact

ROCE

Sales $410MM $500MMROCE 3% 7%

77

Shorewood Strength: Innovative Solutions to Major Multinational CustomersShorewood Strength: Innovative Solutions to Major Multinational Customers

Focus:Home entertainment: specialty & collectible items, new substrates technologiesTobacco: migration from soft to hard pack, privatization of tobacco industry in AsiaConsumer products: selective target segments, integrated packaging solutions

Challenges:Customer consolidation, higher input costs, Asian migration

ShorewoodPackaging

“Position Assets to Serve Key Customers” Strategy““Position Assets to Serve Key CustomersPosition Assets to Serve Key Customers”” StrategyStrategy

88

We Are Proud to Support Leading Global BrandsWe Are Proud to Support Leading Global Brands

ShorewoodPackaging

99

Strategic Fit Within IP: Providing Integrated Solutions to CustomersStrategic Fit Within IP: Providing Integrated Solutions to Customers

Unilever – one of Shorewood’s top 5 accountsSupplying integrate value added solution from folding cartons and POP displays to container, papers and distributionOne voice to the customer, collaborative innovation

ShorewoodPackaging

Shorewood65%

Papers, xpedx, etc.15%

Container U.S., Europe & Asia

20%

1010

Base Case3Q06

Annualized

Customers /Markets

OperationalExcellence

S&A Reduction SelectiveGrowth

Inflation Year 2009@Current Price /

Cost

ROCE

Shorewood – Path ForwardShorewood – Path Forward ShorewoodPackaging

Sales $690MM $1,040MMROCE 0% 6%

* Component symbols used for illustrative purposes only, proportions not indicative of actual EBIT impact

1111

Consumer Packaging Moving ForwardConsumer Packaging Moving Forward

Foodservice:Profitable share growthContract redesign / margin improvementPlanning for Starbucks business

Shorewood:Top line growth outside NARestructuring plans / cost reductionProcess improvement / business simplification

ShorewoodPackaging

2007 Priorities 2007 Priorities 2007 Priorities

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A Stronger, More Valuable IPA Stronger, More Valuable IP