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Executives

Tom Cleves – VP, IR

John Faraci – Chairman and CEO

Tim Nicholls – SVP and CFO

Tom Kadien – SVP and President, Xpedx

Wayne Brafford – SVP, Printing & Communications Papers

Carol Roberts – SVP, Industrial Packaging

Mike Balduino – SVP, Consumer Packaging

Analysts

Gail Glazerman – UBS

Claudia Hueston – JP Morgan

Mark Wilde – Deutsche Bank

Richard Skidmore – Goldman Sachs

George Staphos – Merrill Lynch

Chip Dillon – Credit Suisse

Mark Weintraub – Buckingham Research

Mark Connelly [ph] – Sterne, Agee

Peter Ruschmeier – Barclays Capital

International Paper Company (IP) Q1 2009 Earnings Call Transcript April 30, 2009 10:00 AM ET

Operator

Good morning. My name is Taylor, and I will be your conference operator today. At this time, I would like to welcome everyone to the first quarter 2009 earnings review. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question-and-answer session. (Operator instructions) I would now like to turn the call over to Tom Cleves, Vice President of Investor Relations. Please go ahead, sir.

Tom Cleves

Thank you, Taylor. Good morning, everyone. And thank you for joining International Paper’s first quarter 2009 earnings conference call. Our key speakers this morning are John Faraci, Chairman and Chief Executive Officer, and Tim Nicholls, Senior Vice President and Chief Financial Officer.

During this call, we will make forward-looking statements that are subject to risks and uncertainties, and are outlined on slide two of our presentation. We will also present certain non-US GAAP financial information. Reconciliation of those figures to US GAAP financial measures is available on our Web site.

Our Web site also contains copies of the first quarter 2009 earnings press release, and today’s presentation slides. I’ll now turn the call over to John Faraci.

John Faraci

Thanks, Tom. And good morning, everybody. Thanks for joining us today. Today, Tim Nicholls and I are going to review our first quarter results and performance of our individual businesses. We’ll also discuss our outlook for the quarters going forward.

I want to start right out of the shoot in saying that International Paper continued to execute and operate well, in I think what all of us would admit, was an extremely challenging and tough environment both in North America and all around the world. Despite what I would call unprecedented levels of decline and demand, we posted positive earnings and very solid free cash flows in the quarter.

Tim will discuss each business. But I’d like to say right out front that we’re going to highlight two very strong performances of our large North American businesses, uncoated papers and industrial packaging.

North America and uncoated free sheet EBIT increased in the first quarter versus the fourth quarter, and very importantly, margins expanded by 300 basis points. In the North America industrial packaging business, we also generated strong results given the economic environment we’re competing in. In just the second full quarter of combining our industrial packaging business with the warehouse reacquisition, we improved EBITDA margins by 320 basis points versus the fourth quarter, and almost 500 basis points versus the first quarter of 2008. And we achieved those results in the quarter when we took more than 700,000 tons of lack of order down time.

Despite double-digit declines in paper and packaging demand, selling prices in North America at both businesses fell at only modest rates. Any exception really for international paper was market pulp and export prices which declined significantly. As I said earlier, their volumes are off all around the world.

Input costs did continue to decline. The first quarter annual savings rate is about $700 million or relative to 2008 levels. Our inventories remain in very good shape. They’re down in all businesses all around the world, except in Brazil where we’ve started up a new paper machine during the quarter. And the strongest part of our operations – the strongest part of our performance were our operations, our managing of controllable costs, and our realizing merger benefits.

Our operations in our mills and our converting plants were just outstanding, given that we’re already running about 70% of capacity. Our mills run extremely well. Our overhead expenses were less than 2008 levels and we realized nearly $100 million of merger benefits in the quarter alone. So the net result of all this was strong free cash flow and significant debt reduction during the quarter which Tim will discuss in more detail in a minute.

So in summary, on the next slide here, the snapshot slide, first quarter sales decreased from fourth quarter levels by 13% to $5.7 billion. Without Weyerhaeuser they would have – the impact of Weyerhaeuser revenues, they would’ve climbed by about 20%. EBITDA decreased by from $700 million in the fourth quarter to $600 million. But importantly, margins in our operating businesses expanded by 100 basis points, and free cash flow increased from $400 million in the fourth quarter to $700 million in the first quarter. And after $600 million of debt repayment during the quarter, we ended the quarter with $1 billion in cash, just about the same amount we went out of the year with.

Before Tim covers our results by business, I’d like to just give you a quick update. We can come back on this with your questions and tell you about our progress is creating the premiere industrial packaging business in North America, which was our objective when we made the acquisition of Weyerhaeuser’s corrugated business.

When we acquired Weyerhaeuser’s packaging business, we said we would generate a combined EBITDA of $1.7 billion a year within three years of August 2008. As slide six shows, our first quarter EBITDA annualizes to $1.3 billion. We’ve identified an increment of $100 million in synergies, which we’re going to get sooner. So after the first six months of combined operations, we have line-of-sight of 80% of our three-year target.

When the economy and box demand recovers and I believe it will, it’s a question of when, we’ll meet our three-year EBIT objective with 10% less volume than we had assumed. So we don’t need the market to come to what it was to get to our target. And if it does, we’re going to exceed it. So I’m very pleased with the results being generated by our industrial packaging team. Those results are having a big, positive impact on international paper.

So now I’ll turn it over to Tim, who’ll discuss the results in more detail.

Tim Nicholls

Okay. Thanks John. Good morning, everyone. I’m on slide seven and the waterfall chart here that tracks earnings from the fourth quarter to the first quarter. Fourth quarter earnings from our operating businesses were $0.14 per share versus $0.08 in the first quarter, but it excludes the one-time impact of the Vicksburg Mill insurance proceeds, which was a fourth quarter item.

First quarter earnings from our operating businesses were in line with fourth quarter levels. Excellent operations that combine with declining input costs, and more than offset the impact of reduced volumes and modest price slippage. Our domestic paper and packaging, solid prices held up well, but prices for market pulp and exports declined significantly.

Higher pension expenses contributed to a 4% increase in corporate expenses or interest expense improved earnings by $0.04, and equity earnings from the Ilim joint venture decreased earnings by 0.06% per share. Turn to slide eight, it shows the favorable impact of the declining input costs in the first quarter. Input cost reductions increased our quarterly earnings by $0.23 or $124 million. We saw reduced costs for wood and OCC that total up to $44 billion of earnings improvement, lower chemical prices increased earnings by $31 million, and energy cost reduction boosted earnings by $28 million or transportation costs that is another $21 million. So improvements all around.

On slide nine, we’ve recapped a lack of order down time for you. During the first quarter, we’ve continued had to match our production to our customers’ needs and as a result, we recorded $1.1 million tons of lack of order down time, which is more quarterly down time than we’ve taken in the history of the company. We took 700,000 tons of down time in the North American container board system, which is about 25% of our total capacity. And we took 150,000 tons of lack of order down time in the North American uncoated free sheet system or about 20% of total capacity.

We also recorded 127,000 tons of down time in the coated paper board business in North America, which again is about 25% of its total capacity. And because the accumulative cost of down time is far less than the negative impact of chasing after volume or building unneeded inventories, we will continue to manage our production to meet our customers’ immediate needs.

Now we turn to the businesses and I’m going to start with industrial packaging. The business performed extremely well in the first quarter, increasing earnings by more than 65% from $112 million in the fourth quarter to $188 million in the first quarter. We benefited from the fallen input costs, but the real story is that even with demand falling in an unprecedented level, we made up the volume shortfall and the price leakage with outstanding operations and cost management.

The price erosion reflects the lower export selling prices and we had some leakage in open market container board selling prices in North America, but those were offset by improvements in box pricing. Box pricing was a key part of our synergies, and we outlined when we announced the Weyerhaeuser transaction. And now let me turn to synergies and just take you through a reminder of where the synergies were going to come from. One was going to be around rationalizing the footprint on the box plant side, and only carrying the number of facilities we needed to support our customers. I mentioned the mix improvements and selling price improvements from the box business, which was another key part, optimization of new operations in logistics, and the final piece was the large reduction in business and corporate overhead.

During the first quarter we achieved nearly $100 million in merger synergies, which contributed strongly to our results. Using the marked synergies run rate, we are on track to achieve more than $400 million in merger synergies in 2009. In other words, just after eight months of combined operations, we’re at the annual run rate equal to the three-year synergy target.

Turn slide 12, I’ve got a few more data points on a few of the merger opportunities. We’re running the combined business with 30% fewer employees. Given the significant efficiency gains, we now believe that we will ultimately be able to run the combined business with 15% fewer total employees. By the end of the second full quarter of combined operations, we have removed 12 box plants and two sheet converting facilities. Or said in another way, we had already exceeded the three-year target of facility rationalization and expect to achieve further efficiency gains in the converting system.

Commercial improvements on the Weyerhaeuser volume have been improved those margins on Weyerhaeuser tons by almost $20 per ton. And not only are we well ahead of the three-year synergy schedule, we now believe we can achieve an incremental $100 million in annual merger benefits, and therefore has increased our three-year target to the $500 million level. And I would just mention as a sub point that we’re doing it by spending less to achieve those merger benefits. So a good story all the way round.

The results of all that are shown on slide 13. When we acquired the Weyerhaeuser packaging business we’ve set a goal of creating the premier North American Industrial Packaging business with the highest margins, and we think we’re on our way to achieving that goal. Our EBITDA margins improved from 14.3% in the fourth quarter to 17.5% the first quarter and we’re 470 basis points higher than the first quarter 2008 levels despite the significant lack of order down time that we’re taking.

So with that on industrial, let me move on to printing papers. Global printing papers earnings declined from $113 million to $101 million, while earnings on our North American Printing Papers business and North American Market Pulp businesses improved from fourth quarter levels. For North American Printing Papers, earnings were up $12 million driven by favorable input costs and strong operations that more than offset the volume decline and selling prices were flat

For North American Pulp, earnings were up $11 million driven by cost and again favorable operations offset lower selling prices. And Europe for the printing papers business we experienced higher input costs and higher maintenance outage expenses, which were partially offset by favorable volume and foreign exchange. And Brazil, we have higher maintenance outage expenses in the quarter and lower export prices as well.

I turn now to consumer packaging, earnings increased $22 million. And unlike demand in printing papers and container board, we did not experience the fall of coated paper board demand until the first quarter. The sharp reduction in demand led to significant slow down in shipments and a dramatic increase in lack of order down time, which decreased earnings by $48 million. Significant improvements in selling price and input costs and really outstanding operations added $56 million in earnings.

Turning to Xpedx, we have weak demand for printing materials and for packaging supplies that led to a decline in shipment volume at Xpedx. The impact to the weak volumes was also compounded by declining paper prices. As a result, first quarter sales revenue declined by 18%. We also experienced an increase in bad debt expense to the weak economy and tight credit markets. And for Xpedx, the focus has been and continues to be on reducing operating expense and that enabled – that focus enabled them turn to an operating profit in March. And for the quarter overall, the business did generate strong cash flow.

Forest products, earnings declined from $38 million in the fourth quarter to $2 million in the first. I think you’re aware that in the first quarter we did agree to sell 143,000 acres of land. The transaction is now expected to close in the third quarter, and when that transaction closes, the remaining land portfolio will have an expected value of somewhere between $60 and $80 million.

Slide Ilim, slide 18, and again I remind you that we report Ilim’s earnings on a one quarter lag so this would be the fourth quarter for Ilim and our first quarter’s. Sales from this joint venture declined by 25% reflecting a weak pulp market in China and weak demand for both paper and packaging in Russia. Pulp shipments declined by 9% and pulp prices dropped by $139 per ton, while container board shipment increased slightly as selling prices declined $58 per ton. Final input cost decreased earnings but more than half of the equity earnings loss was due to unfavorable foreign exchange rates on US dollar denominated debt. IP shares of the joint venture earnings declined to a loss of $26 million for the quarter.

Now we turn to free cash flow, slide 19. And in a very difficult environment, the operations generated $650 million in cash during the quarter. And we had a very strong focus on operating working capital, which contributed strongly to the cash flow generation and we also reduced capital spending money nearly $100 million. The result was free cash flow of $666 million and even excluding the cash from the alternative fuel credits, our free cash flow in the quarter was second highest of any quarter in the last five. The strong free cash flow has allowed us to make significant progress on debt reduction, so I’ll turn to that now.

During the quarter, we repaid $550 million debt, and in April we reduced debt by an instrumental $400 million. So in the nine months since completed the transaction of the Weyerhaeuser Packaging asset, we’ve reduced our pro-forma debt by $1.6 billion and we’re well ahead of our commitments to reduce long term debt by at least $2 billion within 24 months of the acquisition and continues to be very strongly committed to further strengthening our balance sheet.

Slide 21, just a reminder on our cash and committed facilities, coupled with our large cash down at the end of the first quarter, we have $2.5 billion back up liquidity consisting of the receivables securitization and also the $1.5 million (inaudible).

We turn to debt maturities now and I’ll take you through the next couple of years. We have approximately $1.3 billion of remaining debt maturities that will need to be repaid between 2009 and 2011. The cash we have on hand is sufficient to pay these maturities in 2009 and ‘10 and also some of the remaining $550 million in 2011. We also have, and you can see them in the grayed out part of the call, is we also have approximately $700 million 2009 to 2011 debt maturities that consist of about $200 million of non-recourse joint venture debt, which the joint venture intends to roll over and also the $500 million timber modernization debt, which we intend to roll over.

Just a couple of comments on pensions, we now expect that we will not be required to make a cash contribution to our pension plan until 2011. I just like to remind you that at the end of 2007, our pension plan was fully funded, in fact, that was fully funded for a good portion of last year before returns deteriorated late in the year. There’s been a recent ruling from the Internal Revenue Service, which provides a greater lee way around selecting the discount rate for value in pension liabilities in order to determine funding obligations. This ruling has allowed IP to select the discount rate that’s nearly 130 basis points prior to the original estimate resulting in somewhere between 10% and 20% reduction in our 2009 funding obligation.

So with that, let me turn you back over to John and he will take you through first quarter summary and second quarter outlook.

John Faraci

Okay, Tim. Thanks. Before I do that, I’d like to take a couple minutes and talk about the alternative fuel mixture tax credit, which I know is of interest to a lot of, if not all investors.

Let me just start off by saying, International Paper in our industry has a long history of sustainable, renewable, and largely self-sufficient energy use. At International Paper, we generate more than 70% of the energy used in our US integrated mills from renewable resources, and we’ve done so for decades long before the green energy movement began. And I guess I’d have to say all the attention that alternative fuel credits has gotten has enabled us to talk more positively about how our industry is renewable and sustainable.

Our industry is the biggest generator of renewable power among all the industries. So a large part of our renewable energy use involves our practice of converting a by-product of making paper. It comes from the tree. It’s known as black liquor where it gets fit into our process.

Since November of 2008, we’ve been mixing in a small amount of diesel fuel in order to qualify for the Alternative Fuel Mixture Tax Credit because it requires mixture. One thing we want to be clear on is, because the diesel fuel replaces fossil fuels that would otherwise have been used at any one site in the manufacturing process, International Paper is not burning any incremental fossil fuels at any location of these 20 mills where we are generating these alternative fuel credits.

This process of transforming waste into bio-energy has been an integral part of our business model for a long time. And we believe that it’s one of the most environmentally beneficial and responsible practices in any industry. And we do think existing users of renewable fuels and new users of alternative fuels ought to be treated on the same playing field.

So we believe the Alternative Fuel Mixture Tax Credit – and the IRS obviously concurs because they’ve certified us, supports a sustainable environmental practice that merits a tax treatment similar to other users of renewable energy and fuel types. There are other industries adding diesel fuel to bio-fuels to qualify tax credit. We believe that they too should be treated as we are, and we should be treated as they are.

During the first quarter we’ve received $145 million of cash in alternative fuel mixture credits. And the total tax credits received or accrued since the fourth quarter of last year, and we began mixing during the middle of the fourth quarter of last year, so the total accrued for that period of time, which is about four and a half months, is just over $550 million. At the end of the quarter, we subsequently received an additional $275 million in tax credits of the $413 million accrued as of March 31st.

So we’ll come back and talk about that if you wish, but let me turn now to sum up the quarter and talk about the outlook.

In summary, despite some very strong headwinds, I think the strongest that I’ve probably seen in my career and this company’s seen in decades, we posted solid results especially when you look at the free cash flow and the debt reductions. Shipment volumes declined and in response, we continue to match our production to our customers’ needs to avoid tying up working capital and unneeded inventories in producing more products that our customers want to buy.

We ran our operations very efficiently, generated almost $100 million integration synergies, and posted more than $30 million of overhead cost savings. In addition to that, we generated strong free cash flow which contributed to our ability to reduce our long-term debt by $600 million in the first quarter, and by, as Tim said, by $1 billion through the end of April, when we made some additional debt reduction payments. As of today, we have no material debt maturity repayment requirements remaining in 2009 and have enough cash on hand right now to satisfy all of our 2010 maturities.

So looking ahead at the second quarter, I wish I had a good crystal ball to share with you, but I don’t. But I do expect that we’re going to face challenging economic conditions. I feel that the economy is – in North America is probably reached the bottom. But we seem to be bouncing along the bottom and if we see any uptake it’s really only the inventory correction, which was severe, maybe over.

We have seen a slight uptake in volume in early April, some of it in our box business, but we don’t have clear line of sight because our customers don’t have clear line of sight on their demand. And when we look at Xpedx, we still see paper packaging shipments being weak.

So the major variables, you know what they are, are volume, lack of order down time, selling prices, and input cost. We expect input cost to decline incrementally. We think there’s more room at chemical places start to slide, and on the fiber side, energy prices and transportation prices are already pretty low, so we know our second quarter earnings will reflect a significant increase in plant outage cost. And we obviously expect to continue to run our operations as low as we did in the first quarter.

Equity earnings from Ilim joint venture we know will be less than first quarter earnings because we’re a one quarter lag. Almost all of that is related to the unfavorable foreign exchange impact on their US dollar denominated debt because of – with the weakening Ruble. So in summary, there are a lot of puts and takes, and I can’t predict at how all these variables will go, but I think it’s likely that the second quarter earnings will be less than the first quarter.

So going forward, I just want to be very clear so that you know where our priorities are. We’re laser focused on aggressive cost management and we’ve got more to do, and we’ll do more. We’re going to continue to match our production to our customers’ needs, and manage our inventories. We’re going to continue to strengthen our balance sheet by continuing to pay down debt and managing our working capital.

So with that I will turn it over to Tom Cleves, and we’ll answer your questions.

Tom Cleves

Thanks John. Thank you. We’re ready for our first question please.

Question-and-Answer Session

Operator

Thank you. (Operator instructions) Your first question comes from Gail Glazerman of UBS.

Gail Glazerman – UBS

Hi, good morning.

John Faraci

Gail.

Tom Cleves

Hi, Gail.

Gail Glazerman – UBS

Congratulations on the cash flow. John, I was hoping to get maybe a little bit more color on this demand trends that you’re seeing? Maybe taking a back to the progression in the first quarter by some of the key businesses?

John Faraci

Well, as I’ve said I think the – I’ve got some of my colleagues here, I may ask if they can comment. In North America, paper and packaging have been weak since November, and we didn’t materially see them getting any weaker in that business.

Bleach board was weaker in the first quarter than the fourth quarter. And I think it was just – our customer base there is different. And the inventory liquidation or draw down had been started later. Tom, I don’t know what – you’d want to say something about Xpedx? What you see going on in the print and packaging side of Xpedx?

Tom Kadien

Sure, John. The way I would look at it, we started seeing it significantly in December. Coming off the record third quarter, we were off 10% in December in terms of revenues per day. In January, we saw another step down of another 10%, so significant inventory de-stocking in that December-January period. And I would say that we have seen across our paper and packaging, almost a dead flat trend through the first quarter.

And to me, that means there’s some slight unique growth because we’ve experienced some real price deflation, particularly in coated grades. So I wouldn’t call it a recovery but there – I would agree with what John said, it seems like the inventory correction occurred early in the quarter and now we’re seeing relatively flat bumping along the bottom.

John Faraci

I’m so much pleasantly surprised I guess, to see consumer spending move up in the first quarter. GDP numbers that came out of consumer spending was up 2%. We’re going to see that in our orders, if that is the case, because that’s who our customers are selling to.

If you go around the world, demand in Brazil is not off as much, it’s off 5% to 10%. Demand in China is pretty healthy. Our businesses there – we’re going to ship twice as much bleach board in the month of April as we did in the last month of April, which says that the economy is so – it’s not growing at 12% but it’s growing at 6%, and the domestic economy is pretty solid.

And our volume is holding up in Western Europe, although the end of the line demand for paper is not down as much as North America, but it’s down. So I think we got all parts of the world, with the exception of China kind of caught in negative number territory. North America is probably the most severe but I think we’ve seen the worst of it. The question is how long do we bounce along the bottom?

Gail Glazerman – UBS

Okay. Would the same be true for your exports of board out of North America?

John Faraci

Pardon me?

Gail Glazerman – UBS

Your export volumes of board, is that also jumping around or is that still getting weaker?

John Faraci

It’s bouncing around the bottom. Volume is off 30% to 40% and prices are awful.

Gail Glazerman – UBS

Okay. And just changing gears a little bit. Can you talk a little bit about the sustainability kind of ex-operating items of the cash flow in the quarter? Were there any seasonal factors or swing factors that we should think about moving forward?

John Faraci

With working capital, obviously with – when your sales are down, your working capital is going to be declining. But we also see – we planned of a couple of $100 million working capital improvement in the company because we saw some opportunities in packaging with Weyerhaeuser.

So we’re getting those but we’re also getting some working capital generation from sales declines. When demand comes back, we will generate more cash from running our facilities but we’ll have to put some working capital back into the business.

So we’re not going to get – I hope we don’t get consistently $200 million a quarter working capital climbs. That’s going to – I don’t suggest these sales are under more pressure. I don’t think that’s going to happen.

Gail Glazerman – UBS

Okay. Thank you.

Operator

Your next question comes from Claudia Hueston of JP Morgan.

Claudia Hueston – JP Morgan

Thanks very much. Good morning.

John Faraci

Good morning.

Claudia Hueston – JP Morgan

I was hoping you could just provide a little bit more detail on input cost trends in the quarter, and where is the cost re-trending as you exited the quarter. Probably most interested in chemicals and fiber. Just trying to get a sense of how much more relief there is to come?

Tom Kadien

I’ll jump in here. John may have some comments to add, Claudia. But in the appendix we give you the typical progressions index. But chemicals is one category that have not come off as much, and wood is still a little bit higher ending the first quarter than where we were early last year. Of course, we’ve seen a big drop off in energy costs and transportation is a lot better. But there still seems like there’s room to go about chemicals and on virgin fiber.

John Faraci

I think it’s fair to say that we’ve got a lot of, I wouldn’t call deflation, but a lot of price coming out of everywhere in the economy. And if you think about that $2 billion of input costs, that’s not general inflation. As input costs increases, as we’ve seen over the past four years, we think we’re at run rate of $800 million, it’s hard to see we’re going to get all the way to that $2 billion in a short period of time. But I think incrementally there’s more upside there but we’ve probably got the biggest slug of it in the last six months.

Claudia Hueston – JP Morgan

Okay. And as chemical costs fall or as they fall, do you still see that pretty immediately or is there a quarter lag, the way you purchase the chemicals and stuff?

John Faraci

There’s so many chemicals. There’s starch, there’s sulfuric acid, there’s caustic, there’s specialty chemicals. There’s no more than a quarter lag and some of them are more near term.

Claudia Hueston – JP Morgan

Okay, that’s helpful. And then, given the very strong cash flow performance and the magnitude of the fuel credits that are coming in, it looks like your balance sheet will be very strong by the end of the year relative to where you started. How are you thinking about capital allocation and returning value to shareholders, if you think about the next year or two going forward given the improved cash flow position?

Tom Kadien

Well, one step at a time, Claudia. Debt reduction focused like a laser beam, so as we see the economy and where the economy is going, I think that that will definitely influence our thinking about where cash may need to be allocated. But for the current moment in the current economic environment, I think it’s focused on maturities over the next couple three years.

Claudia Hueston – JP Morgan

Okay. That’s a good answer. Thank you.

Tom Cleves

We’ll talk more about that Claudia, at Investor Day. It’s coming up.

Claudia Hueston – JP Morgan

Yes.

Operator

Your next question comes from Mark Wilde of Deutsche Bank.

Mark Wilde – Deutsche Bank

Good morning and congratulations. I think it’s a great quarter in light of everything you’ve faced. I wondered if you guys can talk a little bit about whether you think you’ve gotten smarter in terms of how you manage the down time and the cost of that. Because you seem to have done very, very well despite of taking proportionally much more down time than most of your competitors.

John Faraci

Mark, I’ve got Wayne Brafford here who runs our Print Papers business, and Carol Roberts who runs Industrial Packaging. I’ll ask them to talk briefly about what they’re doing. So you think they’re doing it differently but they’re responding to what they need to do in a way that enables them to run the business very, very well. Wayne?

Wayne Brafford

Thanks for noticing, Mark. We did change the profile on how we manage our down time, market related down time. In the fourth quarter we tended to just cover the high cost machines and balance the demand that way.

But as this persisted we began having what we call a rolling mill outage. So, we rolled two weeks outages across several mills. So that allowed us to take a lot of the back end cost off as well rather than just shutting down a paper machine. That had a very significant impact on the cash cost in the down time.

Carol Roberts

Yes, Mark. I would say we did something maybe a little different but we we're uniquely able to do with our larger footprint. We had two attacks. One was optimization of direct variable cost. And given the mill footprint that we have now and the virgin fiber versus OCC grade free mix, we've been very – worked really hard at it and have some good tools to really optimize the direct variables. And we didn't see the penalty you normally see maybe in the back end of the mill.

The other piece we've done real well is we've just optimized – minimized spending. And when you're have this much down time, you have outages, you do more straight time, you do them with your people, you don't hire contractors, you just do everything a lot smarter. And we've got the mill very fired up. And we've also done this in the box business as well. So, we're just major focused on direct variables, improved marginal economics, and then tight, tight spending control.

Mark Wilde – Deutsche Bank

Okay. And if I could just follow on that, particularly for you Carol, can you give us some thoughts on when you go from just taking down time to really re-assessing your overall footprint on the mill side of the business?

Carol Roberts

Sure. And Mark, you know from our past actions our attention to our mill footprint is something that we continually do. So, obviously with the market we're in, and with the combination of warehouses, we've been evaluating our mill footprint. The key determination, of course, is where is demand going?

And I know, obviously, short term matters and we've got to manage that. But we continue to look on where's the long term beneath the press liner. Where the export market's going? Where's US box demand going?

I can tell you, meantime the fact that we are managing it effectively, we'll continue to manage our supply to match our demand. And as soon as we see that pass forward which we're working hard on. Our past track record says that we'll move decisively when we reach that point.

Mark Wilde – Deutsche Bank

Okay. Now just finally, Carol, is it possible for you to give us some kind of metric in the first quarter on sort of your box volumes versus the industry box volumes? Because I know that you were shutting at least a bit of Weyerhaeuser – former Weyerhaeuser business.

Carol Roberts

Yes–

John Faraci

Mark, there's a slide in the appendix that our box volume, about page 35.

Carol Roberts

Actually Mark, we underperformed the industry relative to box volume. Our box volume was down from the fourth quarter 5% and we we're also down year-over-year about 17%. Now some of that is from plants that Weyerhaeuser had actually completely closed prior to the acquisition. I would say that we've made some moves in the market that we were aware of and were conscious of. So we did lose and shed some boxes in this, through the third and fourth quarter.

Our closures, we've maintained 98% of the business on our closures. But our closures have been very successful. And the other thing I'd point out as you'll see our box price actually was sequentially up from fourth to first. So we feel real good about the portfolio over the box business we have. And we're going to continue to work on building a competitive and profitable box business.

Mark Wilde – Deutsche Bank

Okay, sounds good. And, Tom, any sense on those bad debt expenses? Can we get a number on how big those might have been? And what the track would be like going forward at Xpedx?

Tom Cleves

Sure, Mark. We like to think we're pretty good at the bad debt part of our responsibilities. And I would say – well, I'll tell you it was two times what it would normally be in the first quarter. And on our size portfolio it's a fairly big number. I will say, the month of April, the month of March, it got better through the first quarter. So, it was most of the hit we took was in January, February. And it seems to slack off after February.

Mark Wilde – Deutsche Bank

Okay, sounds good. And congratulations on the cash flow and the progress on the debt reduction.

John Faraci

Thanks, Mark.

Tom Cleves

Mark, I think the numbers for us in the first quarter was $7 million of bad debt.

Mark Wilde – Deutsche Bank

Okay.

Operator

Your next question comes from Richard Skidmore of Goldman Sachs.

Richard Skidmore – Goldman Sachs

Good morning. Thank you. John, can you talk about how you see pricing? I think the – in your past slide decks you've had the chart that have where you are currently versus the prior month average. Could you just talk about how you're seeing pricing trends? And how you think the industry can maintain pricing given the rapid raw material cost declines that you're seeing?

John Faraci

I can only talk for International Paper. And we are focused on matching supply and demand, no matter what the market environment is. You could have growing demand and still have excess capacity if you don't manage the supply side.

So, the prices in North America has, our prices have slipped a bit. They haven't slipped precipitously like they have in market pulp in some of the export markets. And, you got our corded board prices have gone up. And our paper and packing prices does protect you down a bit. It's been to no acceleration. And I think it's just been a steady leakage.

Our business is not a cross push business. So, when input costs go up that doesn't mean our prices go up. And when input costs go down, it doesn't mean our prices go down because we're not a cost pass through business. We're a supply demand business. In the rest of the world things are behaving somewhat differently. You see probably more price leakage in Europe than we have in North America. But we're not a big factor in Western Europe. So, we don't have a lot of capacity to be able to manage our inventories aggressively and have, have much of an impact on overall inventories.

Richard Skidmore – Goldman Sachs

And as raw material cost come down you haven't seen some of those high cost producers that may have been taking downtime increase the volumes that they're supplying to the market?

John Faraci

There's no question that if you look across the industry is that not everybody is taking the same amount of downtime. And that's because everybody's making their own decision based on their own set of economics. And we know there are some, if you have one mill and one machine, you're not going to take any downtime because you're either in business or not in business.

So that doesn't mean that – with that situation, we have to follow up. So, no question. People are taking different amounts of downtime.

Richard Skidmore – Goldman Sachs

Can I just ask one other question on Xpedx? Sounds like April – you mentioned March, was back to profitable? And in Xpedx should we expect that things that kind of stabilize should be back to the normal kind of operating margins that you've seen there in the last couple of years?

Tim Nicholls

We've caught up with the revenue declines. In the first quarter we caught up building our cost. So we caught up and made some money in the month of March. I would say it's not correct that we've caught up with the returns that we had over the last three years. We still have more cost work to do before we can get back to that level of earnings.

John Faraci

With sales being down 20% and gross margin dollars following that, it's a hard mountain to climb back up.

Richard Skidmore – Goldman Sachs

Thank you.

Operator

Your next question comes from George Staphos of Merrill Lynch.

George Staphos – Merrill Lynch

Thanks, everyone. Good morning. Congratulations on your progress guys.

John Faraci

Hi, George.

George Staphos – Merrill Lynch

I guess the first question, the performance of the container board and industrial packaging was impressive. Congratulations on that. Can you just parse the comment a bit more about being able to hit your EBITDA goals within the business with 10% less production?

It looks like most of that's coming from the improvement in the box plant component, the synergies, is that largely being driven by headcount, by footprint, or by processes? And what are you're key macro or underlying assumptions behind that?

John Faraci

Well, we think we're going to get more merger benefits. That's covering it. We've got some of the input cost assumptions we made a year ago. Looks like there's some upside there.

And frankly, we think there's – we've gotten out very aggressively and I'll let Carol Roberts comment on this. On the box side we've got a lot of optimization to do in the middle once we can get back to a mid-cycle way of running these mills.

George Staphos – Merrill Lynch

Right.

John Faraci

I think it’s the combination of merger benefits, seeing more upside in mill optimization, and possibly a bit help on input cost. But even if we have – if input cost go back to where they were we're pretty confident we can deliver those level of earnings. And we don't need box demand to be growing at 3% to 4% a year to do it.

Carol Roberts

The only thing I would add in to John's answer is the quantification of it very well. We're very pleased with what we got on two dimensions for sure, which we expected, but it had exceeded expectations. The assets we've gotten and their capability have been very good.

Until we've found a lot of opportunity to bring how we think about things and how those folks think about things together. And that's showing up in more synergy. But the other thing we've gotten is a great group of people who are fired up, and very eager to win, and do whatever it takes to do that.

So, we've, once again there's an upside, you have upside and a middle, we really haven't had the chance to take advantage of yet. We've had tremendous upside that we found in the box business. And so, while we didn't intent to shrink, we found more, more upside to take the place of the revenue from the volume.

John Faraci

And let me make just one more comment there, George. The upside that we're going to find in these mills isn't going to result in producing more container board –

George Staphos – Merrill Lynch

I understand.

John Faraci

– than our customers need to run their business.

George Staphos – Merrill Lynch

Right.

John Faraci

The ultimate result then is will be the same amount of container board with ultimately fewer machines.

George Staphos – Merrill Lynch

Yes, that's been clear from your intent and results through the last couple of quarters. So, good work on that. I guess on the mill side, in terms of optimization, is once the area just producing fewer gray and concentrating them at various machines or mills relative to what your customers makes ultimate looks like on the box side. Is that one key areas?

Carol Roberts

Absolutely. Because each mill, and even a machine, has some different capabilities. Let's take Pensacola. Very good at running very lightweight high strength. But we could load that machine and mill up with a larger box systems need.

We can optimize medium threshold, which is something that we haven't been able to do overall. So with a bigger system and more choices, absolutely. We can move each mill to a sweet spot. And back to that comment I made about optimizing the direct variable cost, we have more choices and more often to optimize.

John Faraci

George, the logistics pieces to it is, we do (inaudible). And just think about it for a minute. Whereas nine facilities and 60 box plants shipping all those liner boards around. We had six facilities and 60 box plants. And now we're redoing the – we're taking all the miles and shipping past each other out.

And one thing else we've learned from Weyerhaeuser’s, they we're a lot better at maximizing the use of rail car loading then we were. So we've gotten on that in a real hurry and increased kind of our average load per rail car by about 10% right out of the tube. And that's huge, the number rail cars we ship everyday.

George Staphos – Merrill Lynch

Two last quick ones and then I'll turn over. First, on container board. How do you see the future trail in terms of lightweight? You obviously have Pensacola and that puts you ahead of the curve relative to the peers. But do you see the market progressively moving that way over the next five years, ten years?

And then quickly, you showed the CapEx budget for this year. We appreciate that. Now what do you think – or Tim, what do you think the CapEx is right be in a more normal environment looking at whatever number years, two years, three years?

John Faraci

Carol, why don't you comment on that last one?

Carol Roberts

Yes. I don't see a space – big change on the lightweight. And I think it will continue to progress as opportunities present themselves. So along supply chain here in the US and people would rather make sure they have a product and a box that's going to work.

But I think we'll see continued opportunities. I think the area we'll see more opportunities is going to be the continued move from RFCs to die cuts, which is about area. So I think that's where customers see a lot of opportunities to, for them say, cost for us we have to deliver value, from seek, can you shift in the product mix there.

John Faraci

On capital allocation uses, the cash George – and we take that pretty seriously. That's important to us. That’s important to investors. We had said before Weyerhaeuser, we we're going to spend about a $1 billion a year on average, over the cycle. Sometimes a little more, sometimes a lot less.

We're in a period of time now where we can do it a lot less. We have to spend – spending less capital on Weyerhaeuser facilities than we thought. We're getting the job done at $600 million, but we're not improving the business. We've got lots of cost reduction opportunities that are 40% to 50% return projects at today's input cost that we're not doing. But those will be there.

So we're also going to be very discretionary about where we spend our capital. Not every business, not every facility is going to get the same amount relative to depreciation, because there's some facilities that may not be around. Some businesses are running for cash.

George Staphos – Merrill Lynch

Thanks very much.

Operator

Your next question comes from Chip Dillon of Credit Suisse.

Chip Dillon – Credit Suisse

Hi. Good morning.

John Faraci

Hey, Chip. Welcome back.

Chip Dillon – Credit Suisse

Oh, thank you. First question is, very impressive box prize realizations you’ve pointed out, what I was going to ask you about. And could you talk a little bit about how, number one, you we're able to keep your box prices actually at a higher level sequentially? Is there a sort of a lag we should look at relative to, say some of the published pricing for liner board?

Carol Roberts

Chip, let me answer the first one. I think it's really a combination of things. One is, some of the business that we don't have anymore was not running particularly well, so that is a help in of itself. So while we may have lost some business, it wasn’t generating very good profitability.

On the second piece, we implemented some increases that we had negotiated in the early – in the fall time frame in the first quarter. We did those in January. And we just continue to push our mix so I think it’s very real as real box price due to the mix in the portfolio of the business we have.

John Faraci

Chip, I don’t think we’re in, from my perspective, we’re not selling boxes at above market prices. As Carol said we’ve gotten some business. We couldn’t get the market. Somebody else has got now. And business that wasn’t at market – we were able to get our customers to market. But we’re in the market everyday so we’re not selling above market price talk.

Chip Dillon – Credit Suisse

In what proportion roughly would you say of your domestic box sales are tied to one of the published prices for board?

Carol Roberts

That’s an easy answer. A lot.

John Faraci

Too much.

Carol Roberts

Just a fair amount. We have some mixed view obviously here, even at IP around that. Some of the bigger customers where you need something to help stoke strong their businesses, we have a fair amount. You would expect the national business would be heavily tied to that. And we’re the local business, it’s very much less so.

Chip Dillon – Credit Suisse

Okay. And then the last question is, on my math when I stripped out all the one-time items, I’m getting about a 46% tax rate. I don’t know if your numbers agree with that for the first quarter. And that to me would suggest that you probably expect the rest of the year to see proportionately a little better outside the US, and a little bit not as much from the US. Is that fair?

Tim Nicholls

I don’t know the 46%, Chip. We had a 33% ETR for the quarter.

Chip Dillon – Credit Suisse

Yes. Basically at $70 million pre-tax and when you take out the charges, and $32 million of tax expense when you take out all the tax effects. But I guess in general do you expect to see, relative to the first quarter, better proportions from outside the US versus inside the US?

Tim Nicholls

I think our crystal ball is pretty fuzzy on how we see things really all around the world. Any place I felt I got some clarity is in China. And it’s a relatively – it’s a big business. It’s a billion dollar business, but it’s relatively small in the context of international paper. But we feel pretty good at how we see demand in over the next two or three quarters there.

Chip Dillon – Credit Suisse

And a final quick one. Ilim, obviously you have a lag reporting of that. Any sign there that in real time that business is stabilizing and therefore we might see, maybe better stable or maybe better results later in the year?

John Faraci

Importantly, remember 65% to 70% of Ilim sales are export and China accounts for probably 80% of that 70%. So demand for pulp in China is firmed up. It came back after Chinese New Year. Prices are still low. They’ve moved – I think soft wood prices have moved up a bit. But they’re still way below where they were six months ago.

Demand there is, right now, is better than it was. The Russian economy is still quite weak as all of you know, but Ilim’s got more exposure to the export market and the Russian domestic market than our paper business in (inaudible) has gotten more exposure in the Russian domestic market.

Chip Dillon – Credit Suisse

So probably what you report in the third quarter will hopefully be better than the second quarter for that?

John Faraci

Well, what’s really clean is the financing side of Ilim, not the commercial side on a quarterly basis. And with our – a lot of Ilim’s debt being US dollar denominated, a weakening ruble just increases the rubles at the door.

Chip Dillon – Credit Suisse

Got you. All right. Thank you very much.

Operator

Your next question comes from Mark Weintraub of Buckingham Research.

Mark Weintraub – Buckingham Research

Thank you. First, if I could on the Container Board system. How much savings would there be if you were to shut a facility? Obviously at this point, if you’re running 70%, you don’t need anywhere near all the capacity. And I understand it’s complicated in the decision making process because you’ve got to think about the future as well. But how much savings would there be if you were to take out a mill, on an annual basis?

John Faraci

Carol, you want to answer that?

Carol Roberts

Mark, I would say that if you had spent on the mill and to take an integrated mill, it’s got most of the heaviest fixed costs to run this thing. I would say that the price of eliminating about $50 million of fixed costs that go with that capacity.

Mark Weintraub – Buckingham Research

Okay.

John Faraci

Recycled mills would be a little less.

Carol Roberts

It would be a lot less.

Mark Weintraub – Buckingham Research

Okay. So $20 million or so for recycle, $30 million?

Carol Roberts

Yes. It’s probably more like $15 million to $20 million since we’re not taking care of that back end so most of that profit’s coming in, the bail of the OCC – bailed OCC. So it’s a much smaller price from fixed costing.

Mark Weintraub – Buckingham Research

Okay. Great. Second, you’re buying about 15 or 18 MMBtu of gas each quarter billion. Was much of that hedged in the first quarter, and if so at what prices?

Tim Nicholls

Hey, Mark. It’s Tim. We’re hedged about 40% to 45% for all of 2009. And it’s closer to $8.00 in MMBtu. The hedge price.

Mark Weintraub – Buckingham Research

Okay. But it’s fairly steady from quarter-to-quarter or are we going to see a nice improvement as the year goes on as it hedges from earlier in the year roll off?

Tim Nicholls

It’s pretty steady throughout the year.

Mark Weintraub – Buckingham Research

Okay.

John Faraci

But we’ll see if you think about 2010. You’ll see a meaningful improvement in our gas cost as we go forward. If you just take the run rate and blow that out.

Mark Weintraub -Buckingham Research

Right. So are you putting in hedges right now for 2010 at these types of price levels?

Tim Nicholls

Yes.

Mark Weintraub – Buckingham Research

Okay. So we can pencil those in. And then on the black liquor, what’s your level? It would seem to be high, but what’s your level of confidence that you get to keep all the credits through the end of 2009? Are there prospects for anything in the years beyond?

John Faraci

I’m not going to try to be expert on what’s going to happen, how it’s going to happen. There are lots of discussions going on about leveling the playing field for producers of renewable power going forward in international papers than engage in that discussion. So whether it’s some kind of modified extension of what we got or no modification or something totally different, like Section 45 fuel credits.

What we want to do and what the industry wants to do is get recognition for being one of the biggest users of alternative fuels and generators among industry, which I think we’ve kind of got that issue on the radar screen now. So I don’t want to speculate that the law that was passed by Congress expires at the end of the year. And at this point in time, nothing has changed.

Mark Weintraub – Buckingham Research

Okay, great. And then lastly, you’ve obviously acted really boldly in many of your businesses and it’s showing off in your container board and your white paper business in much better resilience than maybe most people would’ve expected had we be thinking about it a couple of years ago. That doesn’t seem yet to be translating as much in the consumer packaging business. Any thoughts there?

John Faraci

Well, one of the things that we had in consumer packaging that we also inherited with Weyerhaeuser is with hind sight, a bunch of pricing decisions we probably thought were the competitive ones at that time, but didn’t turn out to be that way. That’s one issue.

We also had real structural change in the packaging side, the short width side of consumer packaging with the rapid decline in music, the collapse of home entertainment margins and basically, the shift of a huge chunk of our business out in North America.

Mike Balduino is here. I’ll just ask him to make a brief comment, he runs our consumer packaging business, about our footprint in Sherwood, North America facilities three years ago versus now.

Mike Balduino

Over the last three years we’ve reduced our costs in North America, probably about half as many plants as we did in that period. Our customers have exited North America so the focus is really a tremendous amount of overhead reduction and costing per minute. And as John said, on the coated paper board side we worked really hard to exit ourselves from some of those contracts and that’s why we saw price improvement in the first quarter, because we did a very poor job at recovering our input costs last year. So both of those things I figured have contributed to improved margins as we go forward.

John Faraci

There’s no part in our business Mark, that’s seen a bigger shift in terms of cost rebates from inside North America to outside North America other than consumer packaging now. It’s been tobacco. It’s been cosmetics, all the consumer products, golf balls.

Now we’ve been following our customers. We’ve got a joint venture in Mexico that’s engaged in tobacco. We’ve got a number of plants in Asia which are doing golf ball packaging and tobacco. But that’s been costly and it’s taking a lot of readable sales space.

Mark Weintraub – Buckingham Research

Very helpful. Thanks a lot.

Operator

Your next question comes from Mark Connelly [ph] of Sterne, Agee

Mark Connelly – Sterne, Agee

Thank you. Just a couple of quick things. John, a clarification. With respect to CapEx, if you go back to your original 2009 estimate is it safe to say that most of the reduction in the CapEx estimate is related to Weyerhaeuser?

John Faraci

I don’t think so, Mark. I’ll also say, welcome back before I forget. We’re taking $100 million out of CapEx from our original target. And I don’t think that’s all liable on Weyerhaeuser. I think that’s all around the system. We just figured out jobs, we – it just started. We’re slowing down or stopping.

Mark Connelly Sterne, Agee

Is it more likely North American than overseas?

Tim Nicholls

Yes, Mark. A big portion of it is North American.

Mark Connelly – Sterne, Agee

Okay.

John Faraci

We are not doing cost reduction projects unless they’d already started really anywhere. No new ones, because they’ll be there at another point in time. And they’re good projects, so that’s why our capital spending is not going to remain at $500 million to $600 million forever. But it’s also not going to be close to depreciation over the cycle either.

Mark Connelly – Sterne, Agee

And just one question, John. You mentioned the Brazil machine startup. Can you talk about the conditions that that machine is facing? And whether we’re going to see a normal – what will happen?

John Faraci

It’s running very well, as all these machines do when the demand is down…

Mark Connelly – Sterne, Agee

When the demand is down. Exactly.

John Faraci

And what we’re doing is – the markets in Latin America are showing better demand than markets in the more mature world. Pricing is lousy, but demand is okay. So we’re shifting around.

We export about 50% of what we make in Brazil, and that’s going all over the world. So operation is going really well. We got a great pulp price because remember, we’re not integrated there. So we’re getting pulp from our pulp supplier at very, very competitive prices which is allowing us to be profitable on that machine even at today’s export pricing.

Mark Connelly – Sterne, Agee

Okay. Thank you very much, gentlemen.

Operator

Your last question comes from Peter Ruschmeier of Barclays Capital.

Peter Ruschmeier – Barclays Capital

Thanks, good morning. And congratulations on that progress. A couple of questions, I’m curious, maybe a question for Carol, given the alternative fuel credit, I’m curious on how much ability you have to flex your operations your virgin output, reduce and recycle line and board output just to take maximum advantage of your credit?

Carol Roberts

As I’ve told you, obviously it were doing our direct (inaudible) that’s definitely a factor that we look at. You might be surprised, you might think it would create a significant swing in how we would run, and it would really more of a tweak than a significant shift. And that comes from other issues relative to gray, freight, and other variables. So I would say it has not caused a wild shift in how we intended to run more of those adjustments.

Peter Ruschmeier – Barclays Capital

Okay. And question for Tim on a cash payment, I’m curious? If you can speak to the timing of the cash tax payment you would have on the credits themselves?

Tim Nicholls

Yes, we have an NLL position that will offset a large portion of that. So I don’t see a material change in cash taxes for 2009.

Peter Ruschmeier – Barclays Capital

Okay, helpful. And then a question maybe again for Carol. I’m curious of the 20,000 some odd employees. I don’t know if you know off the top of your head that the breakdown between salary and hourly. And I guess the reason I’m asking, I’m curious to degree of what you have ability to flex your workforce if you have sustained market-related downtime just to minimize that fixed cost of the labor?

Carol Roberts

Well, I would say that it’s been three buckets of people. We’ve had a fair number of salary. About a third of the folks has been salary folks, and we did that very quickly and very aggressively. There’s a large group of folks that came from rationalizations, and that’s a big chunk.

A piece that we found but we didn’t expect, was we found higher staffing levels in the box plat than our own box plant, and attribute to the CBPR Weyerhaeuser legacy managers. They’d stepped up to that and they addressed those issues. So we have some significant reductions that were not related to the volume. And I should expect the box plant for a lot more flexible handling work force storing kind of low volume. But each one is a little bit different and unique, but we’ve been able to handle that.

Peter Ruschmeier – Barclays Capital

Okay, that’s helpful. Maybe just lastly, I’m curious, maybe for John. Back on Ilim, I’m curious on the trends that you’re seeing for fiber costs in Russia? I would think they’re coming down but maybe you can comment on that. And any color you may have and be willing to share in terms of the export duty situation that was put on hold this year?

John Faraci

Well, fiber costs are coming down for a variety of reasons. One is, demand is weak. Second is the mill that we’ve made some investments and some forest productivity which is paying off. And the export duties – they’re not going in as fast as we thought. But whatever is going on there – it’s different in the East than it is in the West – in helping our fiber cost.

But there’s some other things like demand and forest productivity and rearranging leases. We’re looking at how we can redo our concessions to improve our logistics with a big chunk of our wood cost in Russia is kind of off. So redoing our concessions at this time when we can to get wood both at Ilim and (inaudible), closer to home has a big impact.

Peter Ruschmeier – Barclays Capital

Very good. That’s helpful. Thanks very much.

John Faraci

Okay. Thank you everybody. Before we wrap up, I would just like to remind you of our Investors’ Day, June 9th in New York City. Hopefully you all got that information as to where and when.

It‘s going to be a half day meeting. We’ll be providing updates on our key businesses and our financial position, and it will give us a chance to visit with more detail, more depth, before we talk about the second quarter at the end of July. So we look forward to that day and thanks for participating in today’s call.

Operator

Thank you. This concludes today’s first quarter 2009 earnings review conference call. You may now disconnect.

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Source: International Paper Company Q1 2009 Earnings Call Transcript
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