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	•	THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON NOVEMBER 30, 2006, UNLESS WE EXTEND THE OFFER.
	•	Tenders of outstanding unregistered notes may be withdrawn at any time before 5:00 p.m. on the date the exchange offer expires.
	•	All outstanding unregistered notes that are validly tendered and not validly withdrawn will be exchanged.
	•	The terms of the exchange notes to be issued are substantially similar to the unregistered notes, except they are registered under the Securities Act, do not have any transfer restrictions and do not have registration rights or rights to additional interest.
	•	The exchange of unregistered notes for exchange notes will not be a taxable event for U.S. federal income tax purposes.
	•	P. H. Glatfelter Company will not receive any proceeds from the exchange offer.
	•	The exchange notes will not be listed on any exchange.

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		Page
Prospectus Summary			1
Risk Factors			13
Forward-Looking Statements			23
Ratio of Earnings to Fixed Charges			24
Use of Proceeds			24
Capitalization			25
Description of Other Indebtedness			26
Selected Consolidated Financial Data			28
The Exchange Offer			30
Description of the Exchange Notes			40
United States Federal Income Tax Considerations			78
Plan of Distribution			82
Legal Matters			83
Experts			83
Where You Can Find Additional Information			83

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	Our business and financial performance may be adversely affected by downturns in the target markets that we serve.

	Our industry is highly competitive and increased competition could reduce our sales and profitability.

	•	the entry of new competitors into the markets we serve, including foreign producers;

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	•	the willingness of commodity-based paper producers to enter our specialty markets when they are unable to compete or when demand softens in their traditional markets;
	•	the aggressiveness of our competitors’ pricing strategies, which could force us to decrease prices in order to maintain market share;
	•	our failure to anticipate and respond to changing customer preferences;
	•	our inability to develop new, improved or enhanced products; and
	•	our inability to maintain the cost efficiency of our facilities.

	The cost of raw materials and energy used to manufacture our products could increase.

	We are subject to substantial costs and potential liability for environmental matters.

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	We may not successfully integrate Chillicothe and execute the related production transition plans and may not achieve our anticipated synergies at Chillicothe.

	We may not achieve our anticipated financial benefits from our acquisition of the Lydney mill.

	We are dependent on NewPage for the provision of essential services to Chillicothe.

	We have operations in a politically and economically unstable location.

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	We may not be able to develop new products acceptable to our customers.

	•	anticipate and properly identify our customers’ needs and industry trends;
	•	price our products competitively;
	•	develop and commercialize new products and applications in a timely manner, particularly in the event that demand for our existing products declines or, as in the case of carbonless paper, continues to decline;
	•	differentiate our products from our competitors’ products; and
	•	invest in research and development activities efficiently.

	Our international operations pose certain risks that may adversely affect sales and earnings.

	Foreign currency exchange rate fluctuations could adversely affect our results of operations.

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	We may be unable to generate sufficient cash flow to simultaneously fund our operations, finance capital expenditures and satisfy obligations.

	We may be unable to achieve expected proceeds from a sale of our timberlands.

	We may be unable to maintain our relationships with organized labor unions.

	If we fail to maintain satisfactory relationships with our larger customers, our business may be harmed.

	Several long-term Chillicothe customer agreements may limit the flexibility of that business.

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	Our indebtedness could adversely affect our financial health and prevent us from fulfilling our obligations under the notes.

	•	make it more difficult for us to satisfy our obligations with respect to the notes;
	•	increase our vulnerability to adverse economic and industry conditions;
	•	require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures and other general corporate purposes;
	•	limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;
	•	place us at a disadvantage compared to our competitors that have less debt; and
	•	limit our ability to borrow additional funds, including for future acquisitions, to meet our operating expenses and for other purposes.

	Despite our current level of indebtedness, we and our subsidiaries may still be able to incur substantially more debt.

	To service our indebtedness, we will require a significant amount of cash. Our ability to generate cash depends on many factors beyond our control.

	•	our financial condition at the time;
	•	restrictions in the agreements governing our indebtedness, including the indenture governing the notes; and
	•	the condition of the financial markets and the industry in which we operate.

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	The agreements that govern our new credit facility and the notes contain various covenants that limit our discretion in the operation of our business.

	•	incur more debt;
	•	pay dividends, purchase company stock or make other distributions;
	•	make certain investments;
	•	create certain liens;
	•	enter into transactions with affiliates;
	•	make acquisitions;
	•	merge or consolidate; and
	•	transfer or sell assets.

	•	will not be required to lend any additional amounts to us;
	•	could elect to declare all of our outstanding borrowings, together with accrued and unpaid interest and fees, to be immediately due and payable; and
	•	could effectively require us to apply all of our available cash to repay our borrowings even if they do not accelerate the borrowings,

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	We may not have the ability to raise the funds necessary to finance, and may also be prohibited from making, the change of control offer required by the indenture governing the notes and our new credit facility.

	Federal and state statutes allow courts, under specific circumstances, to void guarantees and require note holders to return payments received from our subsidiary guarantors.

	•	received less than reasonably equivalent value or fair consideration for entering into the guarantee; and
	•	either:

	•	was insolvent or rendered insolvent by reason of entering into a guarantee; or
	•	was engaged in a business or transaction for which the subsidiary guarantor’s remaining assets constituted unreasonably small capital; or
	•	intended to incur, or believed that it would incur, debts or contingent liabilities beyond its ability to pay such debts or contingent liabilities as they become due.

	•	the sum of its debts, including contingent liabilities, were greater than the fair saleable value of all of its assets; or
	•	the present fair saleable value of its assets were less than the amount that would be required to pay its probable liability on its existing debts, including contingent liabilities, as they become absolute and mature; or
	•	it could not pay its debts or contingent liabilities as they become due.

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	We may not have access to the cash flow and other assets of our non-guarantor subsidiaries that may be needed to make payments on the notes.

	The notes are be effectively subordinated to all liabilities and claims of creditors of our current and future non-guarantor subsidiaries.

	There may be no active trading market for the notes, and, if one develops, it may not be liquid.

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	•	our operating performance and financial condition;
	•	our ability to complete the offer to exchange the unregistered notes for the exchange notes;
	•	the interest of securities dealers in making a market; and
	•	the market for similar securities.

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	•	variations in demand for, or pricing of, our products;
	•	changes in the cost or availability of raw materials we use, in particular pulpwood, market pulp, pulp substitutes and abaca fiber, and changes in energy-related costs;
	•	our ability to develop new, higher-value-added products;
	•	the impact of competition, changes in industry paper production capacity, including the construction of new mills, the closing of mills and incremental changes due to capital expenditures or productivity increases;
	•	costs and other effects of environmental compliance, cleanup, damages, remediation or restoration, or personal injury or property damages related thereto, such as the costs of natural resource restoration or damages related to the presence of polychlorinated biphenyls, or PCBs, in the lower Fox River on which our Neenah, Wisconsin facility is located, and the costs of environmental matters at our former Ecusta paper facility located in North Carolina;
	•	the gain or loss of significant customers and/or the ongoing viability of such customers;
	•	risks associated with our international operations, including local economic and political environments and fluctuations in currency exchange rates;
	•	geopolitical events, including war and terrorism;
	•	enactment of adverse state, federal or foreign tax or other legislation or changes in government policy or regulation;
	•	adverse results in litigation;
	•	disruptions in production and/or increased costs due to labor disputes;
	•	the completion of the European Commission’s review of our Lydney mill acquisition;
	•	our ability to successfully implement the European Restructuring and Optimization Program;
	•	our ability to successfully execute our timberland strategy to realize the value of our timberlands;
	•	our ability to execute the planned shutdown of our Neenah facility in an orderly manner;
	•	our ability to finance, consummate and integrate acquisitions;
	•	our ability to achieve the anticipated synergies from our acquisition of the carbonless business operations of NewPage Corporation, which is more fully described in this prospectus, and the related shutdown of our Neenah facility; and
	•	all other risk factors described in the section entitled “Risk Factors.”

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		Year Ended December 31,
																						Six Months Ended
		2001				2002				2003				2004				2005				June 30, 2006
Ratio of earnings to fixed charges			1.69	x			4.63	x			2.32	x			7.27	x			5.28	x			(1	)

(1)	For the six months ended June 30, 2006 the deficit in earnings to fixed charges totaled $32.6 million.

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					As of June 30,
					2006
Cash and cash equivalents					$	23,801
Long-term debt:
	Revolving credit facility				$	52,893
	New term loan facility					99,440
	71/8 notes due 2016					200,000
	SunTrust note payable					34,000
Shareholders’ equity:
	Common stock					544
	Capital in excess of par value					41,620
	Retained earnings					507,203
	Accumulated other comprehensive income (loss)					(2,049	)
	Treasury stock					(143,007	)
		Total shareholders’ equity				404,311
			Total capitalization		$	790,644

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																									Six Months
					Year Ended December 31																				Ended June 30
					2001				2002				2003				2004				2005				2005				2006
					In thousands
Income Statement Data:
Net sales					$	632,602			$	540,347			$	533,193			$	543,524			$	579,121			$	289,179			$	440,326
Energy sales — net						9,661				9,814				10,040				9,953				10,078				5,259				5,304
	Total revenues					642,263				550,161				543,233				553,477				589,199				294,438				445,630
Cost of products sold						501,142				423,880				463,687				461,063				492,023				246,011				419,632
	Gross profit					141,121				126,281				79,546				92,414				97,176				48,427				25,998
Selling, general and administrative expenses						60,225				53,699				59,146				59,939				67,633				34,364				41,737
Shut down and restructuring charges						—				4,249				6,983				20,375				1,564				—				25,955
Unusual items						60,908				(2,008	)			11,501				—				—				—				—
Gains on disposition of plant, equipment and timberlands, net						(2,015	)			(1,304	)			(32,334	)			(58,509	)			(22,053	)			(81	)			(1,085	)
Insurance recoveries						—				—				—				(32,785	)			(20,151	)			(2,200	)			(205	)
			Operating income (loss)			22,003				71,645				34,250				103,394				70,183				16,344				(40,404	)
Other nonoperating income (expense)
	Interest expense					(15,628	)			(15,103	)			(14,269	)			(13,385	)			(13,083	)			(6,550	)			(10,563	)
	Interest income					3,589				1,571				1,820				2,012				2,012				1,057				1,792
	Other — net					1,558				1,016				(1,385	)			(1,258	)			1,028				236				(1,546	)
		Total other nonoperating expenses				(10,481	)			(12,516	)			(13,834	)			(12,631	)			(10,043	)			(5,257	)			(10,317	)
Income (loss) from continuing operations before income taxes						11,522				59,129				20,416				90,763				60,140				11,087				(50,721	)
Income tax provision (benefit)						4,693				21,492				7,430				34,661				21,531				3,088				(18,134	)
		Income (loss) from continuing operations				6,829				37,637				12,986				56,102				38,609				7,999				(32,587	)
Discontinued operations
	Income (loss) from discontinued operations					198				(64	)			(513	)			—				—				—				—
	Income tax provision (benefit)					69				(22	)			(188	)			—				—				—				—
	Income (loss) from discontinued operations					129				(42	)			(325	)			—				—				—				—
			Net income (loss)		$	6,958			$	37,595			$	12,661			$	56,102			$	38,609			$	7,999			$	(32,587	)

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																								Six Months
				Year Ended December 31																				Ended June 30
				2001				2002				2003				2004				2005				2005				2006
				Dollars in thousands
Cash Flow Data:
	Cash provided (used) by continuing operations:
		Operating activities		$	64,437			$	77,706			$	46,996			$	39,584			$	42,868			$	4,911			$	(31,534	)
		Investing activities			(30,536	)			(49,610	)			(62,367	)			42,109				(8,029	)			(13,875	)			(175,763	)
		Financing activities			(48,710	)			(84,605	)			(2,462	)			(59,753	)			(15,158	)			(6,460	)			172,282
Balance Sheet Data (at end of period):
	Cash and cash equivalents			$	95,407			$	32,219			$	15,566			$	39,951			$	57,442							$	23,801
	Working capital(1)				32,213				88,140				59,232				94,445				83,679								177,428
	Total assets				966,604				953,202				1,027,019				1,052,270				1,044,977								1,281,332
	Total debt				277,155				220,532				254,275				211,226				207,073								389,475
	Shareholders’ equity				353,469				373,833				371,431				420,370				432,312								404,311

(1)	Working capital is defined as current assets less current liabilities.

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	(1) within 120 days after the date on which the unregistered notes were issued, to file a registration statement with the SEC with respect to the exchange offer to exchange the unregistered notes for exchange notes of the Company identical in all material respects to the unregistered notes (except that the exchange notes will not contain terms with respect to transfer restrictions);
	(2) to use our reasonable best efforts to cause the registration statement to be declared effective under the Securities Act within 180 days after the date on which the unregistered notes were issued;
	(3) as soon as practicable after the effectiveness of the registration statement to offer the exchange notes in exchange for surrender of the unregistered notes; and
	(4) to use our reasonable best efforts to keep the exchange offer open for not less than 30 days (or longer if required by applicable law) after the date notice of the exchange offer is mailed to the holders of the notes.

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	(1) applicable interpretations of the staff of the SEC do not permit us to effect such an exchange offer;
	(2) for any other reason we do not consummate the exchange offer within 220 days of the date on which the unregistered shares are issued;
	(3) an initial purchaser shall notify us following consummation of the exchange offer that unregistered notes held by it are not eligible to be exchanged for exchange notes in the exchange offer; or
	(4) certain holders are prohibited by law or SEC policy from participating in the exchange offer or may not resell the exchange notes acquired by them in the exchange offer to the public without delivering a prospectus.

	(5) promptly file a shelf registration statement with the SEC covering resales of the unregistered notes or the exchange notes, as the case may be;
	(6) (A) in the case of clause (1) immediately above, use our reasonable best efforts to cause the shelf registration statement to be declared effective under the Securities Act on or prior to the 180th day after the date on which the unregistered notes were issued and (B) in the case of clause (2), (3) or (4) above, use our reasonable best efforts to cause the shelf registration statement to be declared effective under the Securities Act on or prior to the 40th day after the date on which the shelf registration statement was required to be filed; and
	(7) keep the shelf registration statement effective until the earliest of (A) the time when the unregistered notes covered by the shelf registration statement can be sold pursuant to Rule 144 without any limitations under clauses (c), (e), (f) and (h) of Rule 144, (B) two years from the date on which the unregistered notes were issued and (C) the date on which all notes registered thereunder are disposed of in accordance therewith.

	(1) if the we fail to file an registration statement with the SEC on or prior to the 120th day after the date on which the unregistered notes were issued,

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	(2) if the registration statement is not declared effective by the SEC on or prior to the 180th day after the date on which the unregistered notes were issued or, if obligated to file a shelf registration statement pursuant to clause (6)(A) above, a shelf registration statement is not declared effective by the SEC on or prior to the 180th day after the date on which the unregistered notes were issued,
	(3) if the exchange offer is not consummated on or before the 40th day after the registration statement is declared effective,
	(4) if obligated to file the shelf registration statement pursuant to clause (6)(B) above, we fail to file the shelf registration statement with the SEC on or prior to the 40th day after the date on which the obligation to file a shelf registration statement arises,
	(5) if obligated to file a shelf registration statement pursuant to clause (6)(B) above, the shelf registration statement is not declared effective on or prior to the 40th day after the registration statement was required to be filed, or
	(6) after the registration statement or the shelf registration statement, as the case may be, is declared effective, such registration statement or shelf registration statement thereafter ceases to be effective or usable (subject to certain exceptions) (each such event referred to in the preceding clauses (1) through (6), a “registration default”);

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	•	the exchange offer, or the making of any exchange by a holder of unregistered notes, violates applicable law or any applicable interpretation of the staff of the SEC;
	•	any action or proceeding shall have been instituted with respect to the exchange offer which, in our reasonable judgment, would impair our ability to proceed with the exchange offer; and
	•	any laws, rules or regulations or applicable interpretations of the staff of the SEC have been issued or promulgated, which, in our good faith determination, does not permit us to effect the exchange offer.

	•	delay accepting any unregistered note;
	•	waive any condition of the exchange offer; and
	•	amend the terms of the exchange offer in any manner.

	•	refuse to accept any unregistered notes and return any unregistered notes that have been tendered to the holders;

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	•	extend the exchange offer and retain all unregistered notes tendered prior to the expiration of the exchange offer, subject to the rights of the holders of tendered unregistered notes to withdraw their tendered unregistered notes; or
	•	waive the termination event with respect to the exchange offer and accept all properly tendered unregistered notes that have not been withdrawn.

	•	any exchange notes to be received by you will be acquired in the ordinary course of your business;
	•	you are not engaged in, do not intend to engage in and have no arrangements or understandings with any person to participate in, the distribution of the unregistered notes or exchange notes;
	•	you are not an “affiliate” (as defined in Rule 405 under the Securities Act) of ours or, if you are such an affiliate, you will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable;
	•	if you are a broker-dealer, you have not entered into any arrangement or understanding with us or any of our “affiliates” to distribute the exchange notes; and
	•	you are not acting on behalf of any person or entity that could not truthfully make these representations.

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	•	holders of unregistered notes that are DTC participants may follow the procedures for book-entry transfer as provided for below under “— Book-Entry Transfer” and in the letter of transmittal.

	•	the exchange agent must receive any corresponding certificate or certificates representing unregistered notes along with the letter of transmittal;
	•	the exchange agent must receive, before expiration of the exchange offer, a timely confirmation of book-entry transfer of unregistered notes into the exchange agent’s account at DTC according to standard operating procedures for electronic tenders described below and a properly transmitted agent’s message described below; or
	•	the holder must comply with the guaranteed delivery procedures described below.

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	•	make appropriate arrangements to register ownership of the unregistered notes in your name; or
	•	obtain a properly completed bond power from the registered holder.

	•	by a registered holder who has not completed the box entitled “Special Registration Instructions” or “Special Delivery Instructions” in the letter of transmittal; or
	•	for the account of an eligible institution.

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	•	the tender is made through an eligible institution;
	•	before expiration of the exchange offer, the exchange agent receives from the eligible institution either a properly completed and duly executed notice of guaranteed delivery in the form accompanying this prospectus, by facsimile transmission, mail or hand delivery, or a properly transmitted agent’s message in lieu of notice of guaranteed delivery:

	•	setting forth the name and address of the holder and the registered number(s), the certificate number or numbers of the unregistered notes tendered and the principal amount of unregistered notes tendered;
	•	stating that the tender offer is being made by guaranteed delivery; and
	•	guaranteeing that, within three (3) business days after expiration of the exchange offer, the letter of transmittal, or facsimile of the letter of transmittal, together with the unregistered notes tendered and any other documents required by the letter of transmittal or, alternatively, a book-entry confirmation will be deposited by the eligible institution with the exchange agent; and

	•	the exchange agent receives the properly completed and executed letter of transmittal, or facsimile of the letter of transmittal, as well as all tendered unregistered notes in proper form for transfer and all other documents required by the letter of transmittal or, alternatively, a book-entry confirmation, within three (3) business days after expiration of the exchange offer.

	•	the exchange agent must receive a written notice, which may be by telegram, telex, facsimile transmission or letter, of withdrawal at the address set forth below under “Exchange Agent”; or
	•	for DTC participants, holders must comply with their respective standard operating procedures for electronic tenders and the exchange agent must receive an electronic notice of withdrawal from DTC.

	•	specify the name of the person who tendered the unregistered notes to be withdrawn;
	•	identify the unregistered notes to be withdrawn, including the certificate number or numbers and principal amount of the unregistered notes to be withdrawn;

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	•	be signed by the person who tendered the unregistered notes in the same manner as the original signature on the letter of transmittal, including any required signature guarantees; and
	•	specify the name in which the unregistered notes are to be re-registered, if different from that of the withdrawing holder.

	•	may be resold only if (i) registered pursuant to the Securities Act, (ii) an exemption from registration is available or (iii) neither registration nor an exemption is required by law; and
	•	shall continue to bear a legend restricting transfer in the absence of registration or an exemption therefrom.

By Facsimile:		By Registered or Certified Mail:		By Hand/Overnight Delivery:
		U.S. Bank National Association		U.S. Bank National Association
(804) 782-7855		Mail Code CS-HDQ-5310 919 East Main Street Richmond, VA 23219		Mail Code CS-HDQ-5310 919 East Main Street Richmond, VA 23219
Confirm by Telephone:
(804) 782-5170		Attn: Pat Welling, Vice President, Corporate Trust Services		Attn: Pat Welling, Vice President, Corporate Trust Services

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	•	certificates representing exchange notes or unregistered notes for principal amounts not tendered or accepted for exchange are to be delivered to, or are to be registered or issued in the name of, any person other than the registered holder of unregistered notes tendered;
	•	tendered unregistered notes are registered in the name of any person other than the person signing the letter of transmittal; or
	•	a transfer tax is imposed for any reason other than the exchange of unregistered notes under the exchange offer.

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	•	are unsecured senior obligations of the Company;
	•	are senior in right of payment to any future Subordinated Obligations of the Company; and
	•	are guaranteed by each Subsidiary Guarantor.

Period		Redemption Price
2011			103.563%
2012			102.375%
2013			101.188%
2014 and thereafter			100.000%

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	(1) at least 65% of such aggregate principal amount of notes (which includes Additional Notes, if any) remains outstanding immediately after the occurrence of each such redemption (other than notes held, directly or indirectly, by the Company or its Affiliates); and
	(2) each such redemption occurs within 90 days after the date of the related Equity Offering.

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	(1) the sale or other disposition (including by way of consolidation or merger) of a Subsidiary Guarantor, including the sale or disposition of Capital Stock of a Subsidiary Guarantor following which such Subsidiary Guarantor is no longer a Subsidiary; or
	(2) the sale or disposition of all or substantially all the assets of a Subsidiary Guarantor;

	(1) upon the designation of such Subsidiary Guarantor as an Unrestricted Subsidiary;
	(2) at such time as such Subsidiary Guarantor does not have any Indebtedness outstanding that would have required such Subsidiary Guarantor to enter into a Guarantee Agreement pursuant to the covenant described under “— Certain Covenants — Future Subsidiary Guarantors”;
	(3) in connection with any sale or other disposition of all of the Capital Stock of a Subsidiary Guarantor to a Person that is not the Company or (either before or after giving effect to such transaction) an Affiliate of the Company, if the sale of all such Capital Stock of the Subsidiary Guarantor complies with the covenant described under “— Certain Covenants — Limitation on Sales of Assets and Subsidiary Stock”; and
	(4) if we exercise our legal defeasance option or our covenant defeasance option as described under “— Defeasance” or if our obligations under the Indenture are discharged in accordance with the terms of the Indenture.

	Senior Indebtedness versus Notes

	(1) the Company’s Senior Indebtedness was approximately $386.3 million and
	(2) the Senior Indebtedness of our Domestic Restricted Subsidiaries was approximately $341.6 million, which includes Senior Indebtedness of the Company guaranteed by one or more Domestic Restricted Subsidiaries.

	Liabilities of Subsidiaries versus Notes

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	(1) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that for purposes of this clause (1) such person shall be deemed to have “beneficial ownership” of all shares that any such person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 35% of the total voting power of the Voting Stock of the Company;
	(2) individuals who on the Issue Date constituted the Board of Directors (together with any new directors whose election by such Board of Directors or whose nomination for election by the shareholders of the Company was approved by a vote of a majority of the directors of the Company then still in office who were either directors on the Issue Date or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board of Directors then in office;
	(3) the adoption of a plan relating to the liquidation or dissolution of the Company; or
	(4) the merger or consolidation of the Company with or into another Person or the merger of another Person with or into the Company, or the sale of all or substantially all the assets of the Company (determined on a consolidated basis) to another Person other than a transaction, following which (A) in the case of a merger or consolidation transaction, holders of securities that represented 100% of the Voting Stock of the Company immediately prior to such transaction (or other securities into which such securities are converted as part of such merger or consolidation transaction) own directly or indirectly at least a majority of the voting power of the Voting Stock of the surviving Person in such merger or consolidation transaction immediately after such transaction and in substantially the same proportion as before the transaction, and (B) in the case of a sale of assets transaction, each transferee becomes an obligor in respect of the notes and a Subsidiary of the transferor of such assets.

	(1) that a Change of Control has occurred and that such Holder has the right to require us to purchase such Holder’s notes at a purchase price in cash equal to 101% of the principal amount thereof on the date of purchase, plus accrued and unpaid interest, if any, to the date of purchase (subject to the right of Holders of record on the relevant record date to receive interest on the relevant interest payment date);
	(2) the circumstances and relevant facts regarding such Change of Control (including information with respect to pro forma historical income, cash flow and capitalization, in each case after giving effect to such Change of Control);

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	(3) the purchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed); and
	(4) the instructions, as determined by us, consistent with the covenant described hereunder, that a Holder must follow in order to have its notes purchased.

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	(1) the notes have an Investment Grade Rating from both of the Rating Agencies, and
	(2) no Default has occurred and is continuing under the Indenture,

	(1) “— Limitation on Indebtedness,”
	(2) “— Limitation on Restricted Payments,”
	(3) “— Limitation on Restrictions on Distributions from Restricted Subsidiaries,”
	(4) “— Limitation on Sales of Assets and Subsidiary Stock,”
	(5) clause (3) under “— Limitation on Sale/Leaseback Transactions,”
	(6) clauses (a)(2) and (a)(3) of the first paragraph under “— Merger and Consolidation,”
	(7) “— Limitation on Affiliate Transactions” and
	(8) “— Future Subsidiary Guarantors”

	Limitation on Indebtedness

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	(1) Indebtedness Incurred by the Company or any Restricted Subsidiary pursuant to any Credit Facilities; provided, however, that, immediately after giving effect to any such Incurrence, the aggregate principal amount of all Indebtedness Incurred under this clause (1) and then outstanding does not exceed the greater of (i) $300 million and (ii) the sum of (x) 60% of the inventory of the Company and its Restricted Subsidiaries and (y) 85% of the book value of the accounts receivables of the Company and its Restricted Subsidiaries;
	(2) Indebtedness owed to and held by the Company or a Restricted Subsidiary; provided, however, that (A) any subsequent issuance or transfer of any Capital Stock which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of such Indebtedness (other than to the Company or a Restricted Subsidiary) shall be deemed, in each case, to constitute the Incurrence of such Indebtedness by the obligor thereon, (B) if the Company is the obligor on such Indebtedness, such Indebtedness is expressly subordinated to the prior payment in full in cash of all obligations with respect to the notes and (C) if a Subsidiary Guarantor is the obligor on such Indebtedness, such Indebtedness is expressly subordinated to the prior payment in full in cash of all obligations of such Subsidiary Guarantor with respect to its Subsidiary Guarantee;
	(3) the unregistered notes and the exchange notes;
	(4) Indebtedness outstanding on the Issue Date (other than Indebtedness described in clause (1), (2) or (3) of this covenant);
	(5) Indebtedness of a Restricted Subsidiary Incurred and outstanding on or prior to the date on which such Subsidiary became a Restricted Subsidiary or was acquired by the Company (other than Indebtedness Incurred in connection with, or to provide all or any portion of the funds or credit support utilized to consummate, the transaction or series of related transactions pursuant to which such Subsidiary became a Restricted Subsidiary or was acquired by the Company); provided, however, that on the date such Subsidiary became a Restricted Subsidiary or was acquired by the Company and after giving pro forma effect thereto, the Company would have been entitled to Incur at least $1.00 of additional Indebtedness pursuant to paragraph (a) of this covenant;
	(6) Refinancing Indebtedness in respect of Indebtedness Incurred pursuant to paragraph (a) or pursuant to clause (3), (4) or (5) or this clause (6); provided, however, that to the extent such Refinancing Indebtedness directly or indirectly Refinances Indebtedness of a Restricted Subsidiary Incurred pursuant to clause (5), such Refinancing Indebtedness shall be Incurred only by such Restricted Subsidiary;
	(7) Hedging Obligations incurred in the ordinary course of business with a bona fide intention to limit interest rate risk, exchange rate risk or commodity price risk;
	(8) Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, performance bonds, bid bonds, appeal bonds and surety bonds or other similar bonds or obligations, and any Guarantees or letters of credit functioning as or supporting any of the foregoing;
	(9) Indebtedness arising from any agreement providing for indemnities, Guarantees, purchase price adjustments, holdbacks, contingency payment obligations based on the performance of the acquired or disposed assets or similar obligations (other than Guarantees of Indebtedness) Incurred by any Person in connection with the acquisition or disposition of assets;
	(10) Indebtedness of Foreign Subsidiaries for purposes of financing working capital in an aggregate principal amount at any one time outstanding not to exceed $30.0 million;
	(11) Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, Incurred for the purpose of financing all or any part of the purchase price, cost of construction or improvement or carrying cost of assets used in the business of the Company and its Restricted Subsidiaries and related financing costs, and Refinancing Indebtedness Incurred to Refinance any Indebtedness Incurred pursuant to this clause, in an aggregate principal amount at any one time outstanding not to exceed $30.0 million;

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	(12) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within five Business Days of its Incurrence;
	(13) Indebtedness consisting of the Subsidiary Guarantee of a Subsidiary Guarantor and any Guarantee by a Subsidiary Guarantor of Indebtedness Incurred pursuant to paragraph (a) or pursuant to clause (1), (2), (3) or (4) or pursuant to clause (6) to the extent the Refinancing Indebtedness Incurred thereunder directly or indirectly Refinances Indebtedness Incurred pursuant to paragraph (a) or pursuant to clause (3) or (4); and
	(14) Indebtedness of the Company or of any Subsidiary Guarantor in an aggregate principal amount which, when taken together with all other Indebtedness of the Company and its Restricted Subsidiaries outstanding on the date of such Incurrence (other than Indebtedness permitted by clauses (1) through (13) above or paragraph (a)), does not exceed the greater of (i) $50 million and (ii) 5% of Consolidated Net Tangible Assets, as determined as of the most recent practical date (as adjusted for any significant dispositions of assets since such date).

	(1) any Indebtedness remaining outstanding under the Credit Agreement after the application of the net proceeds from the sale of the notes will be treated as Incurred on the Issue Date under clause (1) of paragraph (b) above;
	(2) in the event that an item of Indebtedness (or any portion thereof) meets the criteria of more than one of the types of Indebtedness described above, the Company, in its sole discretion, will classify such item of Indebtedness (or any portion thereof) at the time of Incurrence and will only be required to include the amount and type of such Indebtedness in one of the above clauses;
	(3) the Company will be entitled to divide and classify an item of Indebtedness in more than one of the types of Indebtedness described above; and
	(4) the Company may, at any time, change the classification of an item of Indebtedness or any portion thereof (except for Indebtedness Incurred under clause (1) of paragraph (b) above) to any other clause of paragraph (b) above or to paragraph (a) above; provided, however, that the Company or the applicable Restricted Subsidiary, as the case may be, would be permitted to Incur such item of Indebtedness or portion thereof pursuant to such other clause or paragraph (a), as the case may be, at time of such reclassification.

	Limitation on Restricted Payments

	(1) a Default shall have occurred and be continuing (or would result therefrom);
	(2) the Company is not entitled to Incur an additional $1.00 of Indebtedness pursuant to paragraph (a) of the covenant described under “— Limitation on Indebtedness”; or
	(3) the aggregate amount of such Restricted Payment and all other Restricted Payments since the Issue Date would exceed the sum of (without duplication):

	(A) 50% of the Consolidated Net Income accrued during the period (treated as one accounting period) from the beginning of the fiscal quarter immediately following the fiscal quarter during which the Issue Date occurs to the end of the most recent fiscal quarter ending at least 45 days

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	prior to the date of such Restricted Payment (or, in case such Consolidated Net Income shall be a deficit, minus 100% of such deficit); plus
	(B) 100% of the aggregate Net Cash Proceeds, or the fair market value of property other than cash, received by the Company from the issuance or sale of its Capital Stock (other than Disqualified Stock) subsequent to the Issue Date (other than an issuance or sale to a Subsidiary of the Company and other than an issuance or sale to an employee stock ownership plan or to a trust established by the Company or any of its Subsidiaries for the benefit of their employees) and 100% of any cash, or the fair market value of property other than cash, received as a capital contribution by the Company from its shareholders subsequent to the Issue Date; plus
	(C) the amount by which Indebtedness of the Company is reduced on the Company’s balance sheet upon the conversion or exchange subsequent to the Issue Date of any Indebtedness of the Company convertible or exchangeable for Capital Stock (other than Disqualified Stock) of the Company (less the amount of any cash, or the fair value of any other property, distributed by the Company upon such conversion or exchange); provided, however, that the foregoing amount shall not exceed the Net Cash Proceeds received by the Company or any Restricted Subsidiary from the sale of such Indebtedness (excluding Net Cash Proceeds from sales to a Subsidiary of the Company or to an employee stock ownership plan or to a trust established by the Company or any of its Subsidiaries for the benefit of their employees); plus
	(D) an amount equal to the sum of (i) the net reduction in the Investments (other than Permitted Investments) made by the Company or any Restricted Subsidiary in any Person resulting from repurchases, repayments or redemptions of such Investments by such Person, proceeds realized on the sale of such Investment and proceeds representing the return of capital (excluding dividends and distributions), in each case received by the Company or any Restricted Subsidiary, and (ii) to the extent such Person is an Unrestricted Subsidiary, the portion (proportionate to the Company’s equity interest in such Subsidiary) of the fair market value of the net assets of such Unrestricted Subsidiary at the time such Unrestricted Subsidiary is designated a Restricted Subsidiary; provided, however, that the foregoing sum shall not exceed, in the case of any such Person or Unrestricted Subsidiary, the amount of Investments (excluding Permitted Investments) previously made (and treated as a Restricted Payment) by the Company or any Restricted Subsidiary in such Person or Unrestricted Subsidiary.

	(1) any Restricted Payment made out of the Net Cash Proceeds of the substantially concurrent sale of, or made by exchange for, Capital Stock of the Company (other than Disqualified Stock and other than Capital Stock issued or sold to a Subsidiary of the Company or an employee stock ownership plan or to a trust established by the Company or any of its Subsidiaries for the benefit of their employees) or a substantially concurrent cash capital contribution received by the Company from its shareholders; provided, however, that (A) such Restricted Payment shall be excluded in the calculation of the amount of Restricted Payments and (B) the Net Cash Proceeds from such sale or such cash capital contribution (to the extent so used for such Restricted Payment) shall be excluded from the calculation of amounts under clause (3)(B) of paragraph (a) above;
	(2) any purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of Subordinated Obligations of the Company or a Subsidiary Guarantor made by exchange for, or out of the proceeds of the substantially concurrent Incurrence of, Indebtedness of such Person which is permitted to be Incurred pursuant to the covenant described under “— Limitation on Indebtedness”; provided, however, that such purchase, repurchase, redemption, defeasance or other acquisition or retirement for value shall be excluded in the calculation of the amount of Restricted Payments;
	(3) dividends paid within 60 days after the date of declaration thereof if at such date of declaration such dividend would have complied with this covenant; provided, however, that at the time of payment of such dividend, no other Default shall have occurred and be continuing (or result therefrom); provided

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	further, however, that such dividend shall be included in the calculation of the amount of Restricted Payments;
	(4) so long as no Default has occurred and is continuing, the purchase, redemption or other acquisition of shares of Capital Stock of the Company or any of its Subsidiaries from employees, former employees, directors or former directors of the Company or any of its Subsidiaries (or permitted transferees of such employees, former employees, directors or former directors), pursuant to the terms of the agreements (including employment agreements) or plans (or amendments thereto) approved by the Board of Directors under which such individuals purchase or sell or are granted the option to purchase or sell, shares of such Capital Stock; provided, however, that the aggregate amount of such Restricted Payments (excluding amounts representing cancelation of Indebtedness) shall not exceed $1.0 million in any calendar year; provided further, however, that such repurchases and other acquisitions shall be excluded in the calculation of the amount of Restricted Payments;
	(5) the declaration and payments of dividends on Disqualified Stock issued pursuant to the covenant described under “— Limitation on Indebtedness”; provided, however, that at the time of payment of such dividend, no Default shall have occurred and be continuing (or result therefrom); provided further, however, that such dividends shall be excluded in the calculation of the amount of Restricted Payments;
	(6) repurchases of Capital Stock deemed to occur upon exercise of stock options if such Capital Stock represents a portion of the exercise price of such options; provided, however, that such Restricted Payments shall be excluded in the calculation of the amount of Restricted Payments;
	(7) cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of the Company; provided, however, that any such cash payment shall not be for the purpose of evading the limitation of the covenant described under this subheading; provided further, however, that such payments shall be excluded in the calculation of the amount of Restricted Payments;
	(8) in the event of a Change of Control, and if no Default shall have occurred and be continuing, the payment, purchase, redemption, defeasance or other acquisition or retirement of Subordinated Obligations of the Company or any Subsidiary Guarantor, in each case, at a purchase price not greater than 101% of the principal amount of such Subordinated Obligations, plus any accrued and unpaid interest thereon; provided, however, that prior to such payment, purchase, redemption, defeasance or other acquisition or retirement, the Company (or a third party to the extent permitted by the Indenture) has made a Change of Control Offer with respect to the notes as a result of such Change of Control and has repurchased all notes validly tendered and not withdrawn in connection with such Change of Control Offer; provided further, however, that such payments, purchases, redemptions, defeasances or other acquisitions or retirements shall be included in the calculation of the amount of Restricted Payments;
	(9) payments of intercompany subordinated Indebtedness, the Incurrence of which was permitted under clause (2) of paragraph (b) of the covenant described under “— Limitation on Indebtedness”; provided, however, that no Default has occurred and is continuing or would otherwise result therefrom; provided further, however, that such payments shall be excluded in the calculation of the amount of Restricted Payments;
	(10) the payment of ordinary quarterly dividends on the common stock of the Company at a rate no greater than $0.09 per share (as adjusted for stock splits and other similar changes to such common stock); provided, however, the aggregate amount of such dividends in any year shall not exceed $17.5 million; provided further, however, that such payments shall be included in the calculation of the amount of Restricted Payments; and
	(11) Restricted Payments in an amount which, when taken together with all Restricted Payments made pursuant to this clause (11), does not exceed $35.0 million; provided, however, that (A) at the time of each such Restricted Payment, no Default shall have occurred and be continuing (or result therefrom) and (B) such Restricted Payments shall be excluded in the calculation of the amount of Restricted Payments.

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	Limitation on Restrictions on Distributions from Restricted Subsidiaries

	(1) with respect to clauses (a), (b) and (c),

	(A) any encumbrance or restriction pursuant to an agreement in effect at or entered into on the Issue Date;
	(B) any encumbrance or restriction contained in the terms of any Indebtedness Incurred pursuant to clause (b)(1) of the covenant described under “— Limitation on Indebtedness” or any agreement pursuant to which such Indebtedness was issued if (i) either (x) the encumbrance or restriction applies only in the event of and during the continuance of a payment default or a default with respect to a financial covenant contained in such Indebtedness or agreement or (y) the Company determines at the time any such Indebtedness is Incurred (and at the time of any modification of the terms of any such encumbrance or restriction) that any such encumbrance or restriction will not materially affect the Company’s ability to make principal or interest payments on the notes and any other Indebtedness that is an obligation of the Company and (ii) the encumbrance or restriction is not materially more disadvantageous to the holders of the notes than is customary in comparable financings or agreements (as determined by the Company in good faith);
	(C) any encumbrance or restriction with respect to a Restricted Subsidiary pursuant to an agreement relating to any Indebtedness Incurred by such Restricted Subsidiary on or prior to the date on which such Restricted Subsidiary was acquired by the Company (other than Indebtedness Incurred as consideration in, or to provide all or any portion of the funds or credit support utilized to consummate, the transaction or series of related transactions pursuant to which such Restricted Subsidiary became a Restricted Subsidiary or was acquired by the Company) and outstanding on such date;
	(D) any encumbrance or restriction pursuant to an agreement effecting a Refinancing of Indebtedness Incurred pursuant to an agreement referred to in clause (A) or (B) of clause (1) of this covenant or this clause (D) or contained in any amendment to an agreement referred to in clause (A) or (B) of clause (1) of this covenant or this clause (D); provided, however, that the encumbrances and restrictions with respect to such Restricted Subsidiary contained in any such refinancing agreement or amendment are no less favorable to the Holders than encumbrances and restrictions with respect to such Restricted Subsidiary contained in such predecessor agreements;
	(E) with respect to any Foreign Subsidiary, any encumbrance or restriction contained in the terms of any Indebtedness, or any agreement pursuant to which such Indebtedness was Incurred;
	(F) Liens permitted to be incurred under the provisions of the covenant described under “— Limitation on Liens” that limit the right of the debtor to dispose of the assets subject to such Liens;
	(G) encumbrances or restrictions contained in agreements entered into in connection with Hedging Obligations permitted from time to time under the Indenture;
	(H) restrictions on cash or other deposits or net worth requirements imposed by customers or required by insurance, surety or bonding companies, in each case, under contracts entered into in the ordinary course of business;
	(I) existing under, by reason of or with respect to applicable law, rule, regulation or order;
	(J) with respect to any Person or the property or assets of a Person acquired by the Company or any of its Restricted Subsidiaries existing at the time of such acquisition, which encumbrance or restriction is not applicable to any Person or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired and any amendments, modifications,

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	restatements, renewals, increases, extensions, supplements, refundings, replacements or refinancings thereof, provided that the encumbrances and restrictions in any such amendments, modifications, restatements, renewals, increases, extensions, supplements, refundings, replacements or refinancings are, in the reasonable good faith judgment of the Chief Executive Officer and the Chief Financial Officer of the Company, no more restrictive, taken as a whole, than those in effect on the date of the acquisition; and
	(K) any encumbrance or restriction with respect to a Restricted Subsidiary imposed pursuant to an agreement entered into for the sale or disposition of all or substantially all the Capital Stock or assets of such Restricted Subsidiary pending the closing of such sale or disposition; and

	(2) with respect to clause (c) only,

	(A) any encumbrance or restriction consisting of customary nonassignment provisions in leases governing leasehold interests to the extent such provisions restrict the transfer of the lease or the property leased thereunder;
	(B) any encumbrance or restriction contained in credit agreements, security agreements or mortgages securing Indebtedness of a Restricted Subsidiary to the extent such encumbrance or restriction restricts the transfer of the property subject to such credit agreements, security agreements or mortgages; and
	(C) customary restrictions contained in asset sale agreements limiting the transfer of such assets pending the closing of such sale.

	Limitation on Sales of Assets and Subsidiary Stock

	(1) the Company or such Restricted Subsidiary receives consideration at the time of such Asset Disposition at least equal to the fair market value (including as to the value of all non-cash consideration), as determined in good faith by the Board of Directors (or, in the case of any sale of timberland pursuant to a Pre-Approved Timberland Sale Initiative, as determined in good faith by an executive officer of the Company), of the shares and assets subject to such Asset Disposition;
	(2) at least 75% of the consideration thereof received by the Company or such Restricted Subsidiary is in the form of (A) cash or cash equivalents or (B) Additional Assets; and
	(3) an amount equal to 100% of the Net Available Cash from such Asset Disposition is applied by the Company (or such Restricted Subsidiary, as the case may be)

	(A) first, to the extent the Company elects, to acquire Additional Assets within one year from the later of the date of such Asset Disposition or the receipt of such Net Available Cash;
	(B) second, to the extent of the balance of such Net Available Cash after application in accordance with clause (A), to the extent the Company elects (or is required by the terms of any Indebtedness), to prepay, repay, redeem or purchase Senior Indebtedness of the Company or Indebtedness (other than any Disqualified Stock) of a Restricted Subsidiary (in each case other than Indebtedness owed to the Company or an Affiliate of the Company) within one year from the later of the date of such Asset Disposition or the receipt of such Net Available Cash; and
	(C) third, to the extent of the balance of such Net Available Cash after application in accordance with clauses (A) and (B), to make an offer to the holders of the notes (and to holders of other Senior Indebtedness of the Company designated by the Company) to purchase notes (and such other Senior Indebtedness of the Company) pursuant to and subject to the conditions contained in the Indenture;

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	(1) the assumption or discharge of Indebtedness of the Company (other than obligations in respect of Disqualified Stock of the Company) or any Restricted Subsidiary (other than obligations in respect of Disqualified Stock or Preferred Stock of a Subsidiary Guarantor) and the release of the Company or such Restricted Subsidiary from all liability on such Indebtedness in connection with such Asset Disposition; and
	(2) securities received by the Company or any Restricted Subsidiary from the transferee that are promptly converted by the Company or such Restricted Subsidiary into cash (including, in the case of any installment note received by the Company or any Restricted Subsidiary in respect of any Asset Disposition of timberland pursuant to a Pre-Approved Timberland Sale Initiative, the receipt of cash in respect of any loan secured solely by a pledge of such installment note and, if applicable, the pledge or assignment of a letter of credit or similar instrument provided by such transferee), to the extent of cash received in that conversion.

	Limitation on Affiliate Transactions

	(1) the terms of the Affiliate Transaction are no less favorable to the Company or such Restricted Subsidiary than those that could be obtained at the time of the Affiliate Transaction in arm’s-length dealings with a Person who is not an Affiliate;
	(2) if such Affiliate Transaction involves an amount in excess of $15.0 million, the terms of the Affiliate Transaction are set forth in writing and a majority of the non-employee directors of the Company disinterested with respect to such Affiliate Transaction have determined in good faith that the

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	criteria set forth in clause (1) are satisfied and have approved the relevant Affiliate Transaction as evidenced by a resolution of the Board of Directors; and
	(3) if such Affiliate Transaction involves an amount in excess of $30.0 million, the Board of Directors shall also have received a written opinion from an Independent Qualified Party to the effect that such Affiliate Transaction is fair, from a financial standpoint, to the Company and its Restricted Subsidiaries or is not less favorable to the Company and its Restricted Subsidiaries than could reasonably be expected to be obtained at the time in an arm’s-length transaction with a Person who was not an Affiliate.

	(1) any Investment (other than a Permitted Investment) or other Restricted Payment, in each case permitted to be made pursuant to (but only to the extent included in the calculation of the amount of Restricted Payments made pursuant to paragraph (a)(3) of) the covenant described under “— Limitation on Restricted Payments”;
	(2) any issuance of securities, or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment arrangements, stock options and stock ownership plans approved by the Board of Directors;
	(3) loans or advances to employees in the ordinary course of business in accordance with the past practices of the Company or its Restricted Subsidiaries, but in any event not to exceed $5.0 million in the aggregate outstanding at any one time;
	(4) the payment of fees to directors of the Company and its Restricted Subsidiaries who are not employees of the Company or its Restricted Subsidiaries;
	(5) any transaction with the Company, a Restricted Subsidiary or joint venture or similar entity which would constitute an Affiliate Transaction solely because the Company or a Restricted Subsidiary owns an equity interest in or otherwise controls such Restricted Subsidiary, joint venture or similar entity;
	(6) the issuance or sale of any Capital Stock (other than Disqualified Stock) of the Company;
	(7) pledges of Capital Stock of Unrestricted Subsidiaries for the benefit of lenders of Unrestricted Subsidiaries; and
	(8) any agreement as in effect on the Issue Date or any renewals or extensions of any such agreement (so long as such renewals or extensions are not less favorable to the Company or the Restricted Subsidiaries) and the transactions evidenced thereby.

	Limitation on Liens

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	Limitation on Sale/ Leaseback Transactions

	(1) the Company or such Restricted Subsidiary would be entitled to (A) Incur Indebtedness in an amount equal to the Attributable Debt with respect to such Sale/Leaseback Transaction pursuant to the covenant described under “— Limitation on Indebtedness” and (B) create a Lien on such property securing such Attributable Debt without equally and ratably securing the Notes pursuant to the covenant described under “— Limitation on Liens”;
	(2) the net proceeds received by the Company or any Restricted Subsidiary in connection with such Sale/Leaseback Transaction are at least equal to the fair market value (as determined by the Board of Directors) of such property; and
	(3) the Company applies the proceeds of such transaction in compliance with the covenant described under “— Limitation on Sale of Assets and Subsidiary Stock.”

	Merger and Consolidation

	(1) the resulting, surviving or transferee Person (the “Successor Company”) shall be a Person organized and existing under the laws of the United States of America, any State thereof or the District of Columbia and the Successor Company (if not the Company) shall expressly assume, by an indenture supplemental thereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, all the obligations of the Company under the notes and the Indenture;
	(2) immediately after giving pro forma effect to such transaction (and treating any Indebtedness which becomes an obligation of the Successor Company or any Subsidiary as a result of such transaction as having been Incurred by such Successor Company or such Subsidiary at the time of such transaction), no Default shall have occurred and be continuing;
	(3) immediately after giving pro forma effect to such transaction, the Successor Company would be able to Incur an additional $1.00 of Indebtedness pursuant to paragraph (a) of the covenant described under “— Limitation on Indebtedness”; and
	(4) the Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture (if any) comply with the Indenture.

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	(1) except in the case of a Subsidiary Guarantor (x) that has been disposed of in its entirety to another Person (other than to the Company or an Affiliate of the Company), whether through a merger, consolidation or sale of Capital Stock or assets or (y) that, as a result of the disposition of all or a portion of its Capital Stock, ceases to be a Subsidiary, in both cases, if in connection therewith the Company (A) complies with its obligations under the covenant described under “— Limitation on Sales of Assets and Subsidiary Stock” in respect of such disposition, (B) the resulting, surviving or transferee Person (if not such Subsidiary) shall be a Person organized and existing under the laws of the jurisdiction under which such Subsidiary was organized or under the laws of the United States of America, or any State thereof or the District of Columbia, and (C) such Person shall expressly assume, by a Guarantee Agreement, in a form satisfactory to the Trustee, all the obligations of such Subsidiary, if any, under its Subsidiary Guarantee;
	(2) immediately after giving effect to such transaction or transactions on a pro forma basis (and treating any Indebtedness which becomes an obligation of the resulting, surviving or transferee Person as a result of such transaction as having been issued by such Person at the time of such transaction), no Default shall have occurred and be continuing; and
	(3) the Company delivers to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such Guarantee Agreement, if any, complies with the Indenture.

	Future Subsidiary Guarantors

	(1) such Indebtedness is Incurred by such Restricted Subsidiary pursuant to clause (2), (4), (5), (6) (with respect to Refinancing Indebtedness of Indebtedness initially Incurred under clause (4) or (5) only), (7), (8), (9), (11) or (12) of paragraph (b) of the covenant described under “— Limitation on Indebtedness”;
	(2) such Restricted Subsidiary is a Subsidiary Guarantor; or
	(3) such Restricted Subsidiary simultaneously executes and delivers a Subsidiary Guarantee and becomes a Subsidiary Guarantor.

	SEC Reports

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	(1) a default in the payment of interest on the notes when due, continued for 30 days;
	(2) a default in the payment of principal of any note when due at its Stated Maturity, upon optional redemption, upon required purchase, upon declaration of acceleration or otherwise;
	(3) the failure by the Company to comply with its obligations in paragraph (a) of the covenant described above under “— Certain Covenants — Merger and Consolidation”;
	(4) the failure by the Company to comply for 30 days after notice with any of its obligations in the covenants described above under “Change of Control” (other than a failure to purchase notes) or under “— Certain Covenants” under “— Limitation on Indebtedness,” “— Limitation on Restricted Payments,” “— Limitation on Restrictions on Distributions from Restricted Subsidiaries,” “— Limitation on Sales of Assets and Subsidiary Stock” (other than a failure to purchase Notes), “— Limitation on Affiliate Transactions,” “— Limitation on Liens,” “— Limitation on Sale/ Leaseback Transactions,” “— Certain Covenants — Merger and Consolidation” (other than a failure to comply with paragraph (a) thereof), “— Future Subsidiary Guarantors” or “— SEC Reports”;
	(5) the failure by the Company or any Subsidiary Guarantor to comply for 60 days after notice with its other agreements contained in the Indenture;
	(6) Indebtedness of the Company, any Subsidiary Guarantor or any Significant Subsidiary is not paid within any applicable grace period after final maturity or is accelerated by the holders thereof because of a default and the total amount of such Indebtedness unpaid or accelerated exceeds $15.0 million (the “cross acceleration provision”);
	(7) certain events of bankruptcy, insolvency or reorganization of the Company, a Subsidiary Guarantor or any Significant Subsidiary (the “bankruptcy provisions”);
	(8) any judgment or decree for the payment of money in excess of $15.0 million is entered against the Company, a Subsidiary Guarantor or any Significant Subsidiary, remains outstanding for a period of 60 consecutive days following such judgment and is not discharged, waived or stayed (the “judgment default provision”); or
	(9) a Subsidiary Guarantee ceases to be in full force and effect (other than in accordance with the terms of the Indenture or such Subsidiary Guarantee) or a Subsidiary Guarantor denies or disaffirms its obligations under its Subsidiary Guarantee.

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	(1) such Holder has previously given the Trustee notice that an Event of Default is continuing;
	(2) Holders of at least 25% in principal amount of the outstanding notes have requested the Trustee to pursue the remedy;
	(3) such Holders have offered the Trustee reasonable security or indemnity against any loss, liability or expense;
	(4) the Trustee has not complied with such request within 60 days after the receipt thereof and the offer of security or indemnity; and
	(5) holders of a majority in principal amount of the outstanding notes have not given the Trustee a direction inconsistent with such request within such 60-day period.

	(1) reduce the amount of notes whose Holders must consent to an amendment;
	(2) reduce the rate of or extend the time for payment of interest on any note;
	(3) reduce the principal of or change the Stated Maturity of any note;
	(4) reduce the amount payable upon the redemption of any note or change the time at which any note may be redeemed as described under “— Optional Redemption” above;
	(5) make any note payable in money other than that stated in the note;
	(6) impair the right of any Holder of the notes to receive payment of principal of and interest on such holder’s notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such Holder’s notes;
	(7) make any change in, the amendment provisions which require each Holder’s consent or in the waiver provisions;
	(8) make any change in the ranking or priority of any note that would adversely affect the Noteholders; or

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	(9) other than in accordance with the Indenture, make any change in or release any Subsidiary Guarantee that would adversely affect the Noteholders.

	(1) to cure any ambiguity, omission, defect or inconsistency;
	(2) to provide for the assumption by a successor corporation of the obligations of the Company, or any Subsidiary Guarantor under the Indenture;
	(3) to provide for uncertificated notes in addition to or in place of certificated notes (provided that the uncertificated notes are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated notes are described in Section 163(f)(2)(B) of the Code);
	(4) to add Guarantees with respect to the notes, including any Subsidiary Guarantees, or to secure the notes;
	(5) to add to the covenants of the Company or a Subsidiary Guarantor for the benefit of the holders of the notes or to surrender any right or power conferred upon the Company or a Subsidiary Guarantor;
	(6) to make any change that does not adversely affect the rights of any Holder of the notes;
	(7) to comply with any requirement of the SEC in connection with the qualification of the Indenture under the Trust Indenture Act; or
	(8) to make any amendment to the provisions of the Indenture relating to the transfer and legending of notes; provided, however, that (a) compliance with the Indenture as so amended would not result in notes being transferred in violation of the Securities Act or any other applicable securities law and (b) such amendment does not materially and adversely affect the rights of Holders to transfer notes.

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	(1) any property, plant or equipment used in a Related Business;
	(2) the Capital Stock of a Person that becomes a Restricted Subsidiary as a result of the acquisition of such Capital Stock by the Company or another Restricted Subsidiary; or
	(3) Capital Stock constituting a minority interest in any Person that at such time is a Restricted Subsidiary;

	(1) any shares of Capital Stock of a Restricted Subsidiary (other than directors’ qualifying shares or shares required by applicable law to be held by a Person other than the Company or a Restricted Subsidiary),
	(2) all or substantially all the assets of any division or line of business of the Company or any Restricted Subsidiary, or
	(3) any other assets of the Company or any Restricted Subsidiary outside of the ordinary course of business of the Company or such Restricted Subsidiary;

	(A) a disposition by a Restricted Subsidiary to the Company or by the Company or a Restricted Subsidiary to a Restricted Subsidiary;
	(B) for purposes of the covenant described under “— Certain Covenants — Limitation on Sales of Assets and Subsidiary Stock” only, (i) a disposition that constitutes a Restricted Payment (or would constitute a Restricted Payment but for the exclusions from the definition thereof) and that is not prohibited by the covenant described under “— Certain Covenants — Limitation on Restricted Payments” and (ii) a disposition of all or substantially all the assets of the Company in accordance with the covenant described under “— Certain Covenants — Merger and Consolidation”;
	(C) a disposition of assets with a fair market value of less than $2.5 million;
	(D) a disposition of cash or Temporary Cash Investments;
	(E) dispositions (including without limitation surrenders and waivers) of accounts receivable or other contract rights in connection with the compromise, settlement or collection thereof;
	(F) any sale or disposition of any property or equipment that has become damaged, worn out or obsolete or pursuant to a program for the maintenance or upgrading of such property or equipment;

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	(G) the creation of a Lien (but not the sale or other disposition of the property subject to such Lien); and
	(H) any disposition of assets that constitutes a Change of Control to the extent the Company has complied with the provisions under “Change of Control.”

	(1) the sum of the products of the numbers of years from the date of determination to the dates of each successive scheduled principal payment of or redemption or similar payment with respect to such Indebtedness multiplied by the amount of such payment by
	(2) the sum of all such payments.

	(1) if the Company or any Restricted Subsidiary has Incurred any Indebtedness since the beginning of such period that remains outstanding or if the transaction giving rise to the need to calculate the Consolidated Coverage Ratio is an Incurrence of Indebtedness, or both, EBITDA and Consolidated Interest Expense for such period shall be calculated after giving effect on a pro forma basis to such Indebtedness as if such Indebtedness had been Incurred on the first day of such period;
	(2) if the Company or any Restricted Subsidiary has repaid, repurchased, defeased or otherwise discharged any Indebtedness since the beginning of such period or if any Indebtedness is to be repaid, repurchased, defeased or otherwise discharged (in each case other than Indebtedness Incurred under any revolving credit facility unless such Indebtedness has been permanently repaid and has not been

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	replaced) on the date of the transaction giving rise to the need to calculate the Consolidated Coverage Ratio, EBITDA and Consolidated Interest Expense for such period shall be calculated on a pro forma basis as if such discharge had occurred on the first day of such period and as if the Company or such Restricted Subsidiary had not earned the interest income actually earned during such period in respect of cash or Temporary Cash Investments used to repay, repurchase, defease or otherwise discharge such Indebtedness;
	(3) if since the beginning of such period the Company or any Restricted Subsidiary shall have made any Asset Disposition, EBITDA for such period shall be reduced by an amount equal to EBITDA (if positive) directly attributable to the assets which are the subject of such Asset Disposition for such period, or increased by an amount equal to EBITDA (if negative), directly attributable thereto for such period and Consolidated Interest Expense for such period shall be reduced by an amount equal to the Consolidated Interest Expense directly attributable to any Indebtedness of the Company or any Restricted Subsidiary repaid, repurchased, defeased or otherwise discharged with respect to the Company and its continuing Restricted Subsidiaries in connection with such Asset Disposition for such period (or, if the Capital Stock of any Restricted Subsidiary is sold, the Consolidated Interest Expense for such period directly attributable to the Indebtedness of such Restricted Subsidiary to the extent the Company and its continuing Restricted Subsidiaries are no longer liable for such Indebtedness after such sale);
	(4) if since the beginning of such period the Company or any Restricted Subsidiary (by merger or otherwise) shall have made an Investment in any Restricted Subsidiary (or any Person which becomes a Restricted Subsidiary) or an acquisition of assets, including any acquisition of assets occurring in connection with a transaction requiring a calculation to be made hereunder, which constitutes all or substantially all of an operating unit of a business, EBITDA and Consolidated Interest Expense for such period shall be calculated after giving pro forma effect thereto (including the Incurrence of any Indebtedness) as if such Investment or acquisition had occurred on the first day of such period; and
	(5) if since the beginning of such period any Person (that subsequently became a Restricted Subsidiary or was merged with or into the Company or any Restricted Subsidiary since the beginning of such period) shall have made any Asset Disposition, any Investment or acquisition of assets that would have required an adjustment pursuant to clause (3) or (4) above if made by the Company or a Restricted Subsidiary during such period, EBITDA and Consolidated Interest Expense for such period shall be calculated after giving pro forma effect thereto as if such Asset Disposition, Investment or acquisition had occurred on the first day of such period.

	(1) all intercompany items between the Company and any Restricted Subsidiary; and
	(2) all current maturities of long-term Indebtedness, all as determined in accordance with GAAP consistently applied.

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	(1) interest expense attributable to Capital Lease Obligations;
	(2) amortization of debt discount and debt issuance cost;
	(3) capitalized interest;
	(4) non-cash interest expense;
	(5) commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing;
	(6) net payments pursuant to Hedging Obligations;
	(7) dividends accrued in respect of all Disqualified Stock of the Company and all Preferred Stock of any Restricted Subsidiary, in each case held by Persons other than the Company or a Wholly Owned Subsidiary (other than dividends payable solely in Capital Stock (other than Disqualified Stock) of the Company); provided, however, that such dividends will be multiplied by a fraction the numerator of which is one and the denominator of which is one minus the effective combined tax rate of the issuer of such Preferred Stock (expressed as a decimal) for such period (as estimated by the chief financial officer of the Company in good faith);
	(8) interest incurred in connection with Investments in discontinued operations;
	(9) interest accruing on any Indebtedness of any other Person to the extent such Indebtedness is Guaranteed by (or secured by the assets of) the Company or any Restricted Subsidiary; and
	(10) the cash contributions to any employee stock ownership plan or similar trust to the extent such contributions are used by such plan or trust to pay interest or fees to any Person (other than the Company) in connection with Indebtedness Incurred by such plan or trust.

	(1) any net income of any Person (other than the Company) if such Person is not a Restricted Subsidiary, except that:

	(A) subject to the exclusion contained in clause (4) below, the Company’s equity in the net income of any such Person for such period shall be included in such Consolidated Net Income up to the aggregate amount of cash actually distributed by such Person during such period to the Company or a Restricted Subsidiary as a dividend or other distribution (subject, in the case of a dividend or other distribution paid to a Restricted Subsidiary, to the limitations contained in clause (3) below); and
	(B) the Company’s equity in a net loss of any such Person for such period shall be included in determining such Consolidated Net Income;

	(2) any net income (or loss) of any Person acquired by the Company or a Subsidiary in a pooling of interests transaction (or any transaction accounted for in a manner similar to a pooling of interests) for any period prior to the date of such acquisition;
	(3) any net income of any Restricted Subsidiary if such Restricted Subsidiary is subject to restrictions, directly or indirectly, on the payment of dividends or the making of distributions by such Restricted Subsidiary, directly or indirectly, to the Company, except that:

(A) subject to the exclusion contained in clause (4) below, the Company’s equity in the net income of any such Restricted Subsidiary for such period shall be included in such Consolidated Net Income up to the aggregate amount of cash actually distributed by such Restricted Subsidiary during such period to the Company or another Restricted Subsidiary as a dividend or other distribution (subject, in the case of a dividend or other distribution paid to another Restricted Subsidiary, to the limitation contained in this clause); and

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	(B) the Company’s equity in a net loss of any such Restricted Subsidiary for such period shall be included in determining such Consolidated Net Income;

	(4) any gain (or loss) realized upon the sale or other disposition of any assets of the Company, its consolidated Subsidiaries or any other Person (including pursuant to any sale-and-leaseback arrangement) which is not sold or otherwise disposed of in the ordinary course of business and any gain (or loss) realized upon the sale or other disposition of any Capital Stock of any Person;
	(5) extraordinary gains or losses; and
	(6) the cumulative effect of a change in accounting principles,

	(1) minority interests in consolidated Subsidiaries held by Persons other than the Company or a Restricted Subsidiary;
	(2) excess of cost over fair value of assets of businesses acquired, as determined in good faith by the Board of Directors;
	(3) any revaluation or other write-up in book value of assets subsequent to the Issue Date as a result of a change in the method of valuation in accordance with GAAP consistently applied;
	(4) unamortized debt discount and expenses and other unamortized deferred charges, goodwill, patents, trademarks, service marks, trade names, copyrights, licenses, organization or developmental expenses and other intangible items;
	(5) treasury stock;
	(6) cash set apart and held in a sinking or other analogous fund established for the purpose of redemption or other retirement of Capital Stock to the extent such obligation is not reflected in Consolidated Current Liabilities; and
	(7) Investments in and assets of Unrestricted Subsidiaries.

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	(1) matures or is mandatorily redeemable (other than redeemable only for Capital Stock of such Person which is not itself Disqualified Stock) pursuant to a sinking fund obligation or otherwise;
	(2) is convertible or exchangeable at the option of the holder for Indebtedness or Disqualified Stock; or
	(3) is mandatorily redeemable or must be purchased upon the occurrence of certain events or otherwise, in whole or in part;

	(i) the “asset sale” or “change of control” provisions applicable to such Capital Stock are not more favorable to the holders of such Capital Stock than the terms applicable to the notes and described under “— Certain Covenants — Limitation on Sales of Assets and Subsidiary Stock” and “— Certain Covenants — Change of Control”; and
	(ii) any such requirement only becomes operative after compliance with such terms applicable to the notes, including the purchase of any notes tendered pursuant thereto.

	(1) all income tax expense of the Company and its consolidated Restricted Subsidiaries;
	(2) Consolidated Interest Expense;
	(3) depreciation and amortization expense of the Company and its consolidated Restricted Subsidiaries (excluding amortization expense attributable to a prepaid item that was paid in cash in a prior period);
	(4) all other non-cash charges of the Company and its consolidated Restricted Subsidiaries (excluding any such non-cash charge to the extent that it represents an accrual of or reserve for cash

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	expenditures in any future period) less all non-cash items of income of the Company and its consolidated Restricted Subsidiaries (other than accruals of revenue by the Company and its consolidated Restricted Subsidiaries in the ordinary course of business); and
	(5) to the extent not included in clauses (1) through (4) above, Permitted EBITDA Add-Backs;

	(1) the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants;
	(2) statements and pronouncements of the Financial Accounting Standards Board;
	(3) such other statements by such other entity as approved by a significant segment of the accounting profession; and
	(4) the rules and regulations of the SEC governing the inclusion of financial statements (including pro forma financial statements) in periodic reports required to be filed pursuant to Section 13 of the Exchange Act, including opinions and pronouncements in staff accounting bulletins and similar written statements from the accounting staff of the SEC.

	(1) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness of such Person (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services, to take-or-pay or to maintain financial statement conditions or otherwise); or
	(2) entered into for the purpose of assuring in any other manner the obligee of such Indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part);

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	(1) amortization of debt discount or the accretion of principal with respect to a non-interest bearing or other discount security;
	(2) the payment of regularly scheduled interest in the form of additional Indebtedness of the same instrument or the payment of regularly scheduled dividends on Capital Stock in the form of additional Capital Stock of the same class and with the same terms; and
	(3) the obligation to pay a premium in respect of Indebtedness arising in connection with the issuance of a notice of redemption or making of a mandatory offer to purchase such Indebtedness

	(1) the principal in respect of (A) indebtedness of such Person for money borrowed and (B) indebtedness evidenced by notes, debentures, bonds or other similar instruments for the payment of which such Person is responsible or liable, including, in each case, any premium on such indebtedness to the extent such premium has become due and payable;
	(2) all Capital Lease Obligations of such Person and all Attributable Debt in respect of Sale/ Leaseback Transactions entered into by such Person;
	(3) all obligations of such Person issued or assumed as the deferred purchase price of property, all conditional sale obligations of such Person and all obligations of such Person under any title retention agreement (but excluding any accounts payable or other liability to trade creditors arising in the ordinary course of business);
	(4) all obligations of such Person for the reimbursement of any obligor on any letter of credit, bankers’ acceptance or similar credit transaction (other than obligations with respect to letters of credit securing obligations (other than obligations described in clauses (1) through (3) above) entered into in the ordinary course of business of such Person to the extent such letters of credit are not drawn upon or, if and to the extent drawn upon, such drawing is reimbursed no later than the tenth Business Day following payment on the letter of credit);
	(5) the amount of all obligations of such Person with respect to the redemption, repayment or other repurchase of any Disqualified Stock of such Person or, with respect to any Preferred Stock of any Subsidiary of such Person, the principal amount of such Preferred Stock to be determined in accordance with the Indenture (but excluding, in each case, any accrued dividends);
	(6) all obligations of the type referred to in clauses (1) through (5) of other Persons and all dividends of other Persons for the payment of which, in either case, such Person is responsible or liable, directly or indirectly, as obligor, guarantor or otherwise, including by means of any Guarantee;
	(7) all obligations of the type referred to in clauses (1) through (6) of other Persons secured by any Lien on any property or asset of such Person (whether or not such obligation is assumed by such Person), the amount of such obligation being deemed to be the lesser of the fair market value of such property or assets and the amount of the obligation so secured; and
	(8) to the extent not otherwise included in this definition, Hedging Obligations of such Person.

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	(1) “Investment” shall include the portion (proportionate to the Company’s equity interest in such Subsidiary) of the fair market value of the net assets of any Subsidiary of the Company at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided, however, that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Company shall be deemed to continue to have a permanent “Investment” in an Unrestricted Subsidiary equal to an amount (if positive) equal to (A) the Company’s “Investment” in such Subsidiary at the time of such redesignation less (B) the portion (proportionate to the Company’s equity interest in such Subsidiary) of the fair market value of the net assets of such Subsidiary at the time of such redesignation; and
	(2) any property transferred to or from an Unrestricted Subsidiary shall be valued at its fair market value at the time of such transfer, in each case as determined in good faith by the Board of Directors.

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	(1) all legal, title and recording tax expenses, commissions and other fees and expenses incurred, and all Federal, state, provincial, foreign and local taxes required to be accrued as a liability under GAAP, as a consequence of such Asset Disposition;
	(2) all payments made on any Indebtedness which is secured by any assets subject to such Asset Disposition, in accordance with the terms of any Lien upon or other security agreement of any kind with respect to such assets, or which must by its terms, or in order to obtain a necessary consent to such Asset Disposition, or by applicable law, be repaid out of the proceeds from such Asset Disposition;
	(3) all distributions and other payments required to be made to minority interest holders in Restricted Subsidiaries as a result of such Asset Disposition;
	(4) the deduction of appropriate amounts provided by the seller as a reserve, in accordance with GAAP, against any liabilities associated with the property or other assets disposed in such Asset Disposition and retained by the Company or any Restricted Subsidiary after such Asset Disposition; and
	(5) any portion of the purchase price from an Asset Disposition placed in escrow, whether as a reserve for adjustment of the purchase price, for satisfaction of indemnities in respect of such Asset Disposition or otherwise in connection with that Asset Disposition; provided, however, that upon the termination of that escrow, Net Available Cash will be increased by any portion of funds in the escrow that are released to the Company or any Restricted Subsidiary.

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	(1) the Company, a Restricted Subsidiary or a Person that will, upon the making of such Investment, become a Restricted Subsidiary; provided, however, that the primary business of such Restricted Subsidiary is a Related Business;
	(2) another Person if, as a result of such Investment, such other Person is merged or consolidated with or into, or transfers or conveys all or substantially all its assets to, the Company or a Restricted Subsidiary; provided, however, that such Person’s primary business is a Related Business;
	(3) cash and Temporary Cash Investments;
	(4) receivables owing to the Company or any Restricted Subsidiary if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms; provided, however, that such trade terms may include such concessionary trade terms as the Company or any such Restricted Subsidiary deems reasonable under the circumstances;
	(5) payroll, travel and similar advances to cover matters that are expected at the time of such advances ultimately to be treated as expenses for accounting purposes and that are made in the ordinary course of business;
	(6) loans or advances to employees made in the ordinary course of business consistent with past practices of the Company or such Restricted Subsidiary;
	(7) stock, obligations or securities received in settlement of debts created in the ordinary course of business and owing to the Company or any Restricted Subsidiary or in satisfaction of judgments;
	(8) any Person to the extent such Investment represents the non-cash portion of the consideration received for (A) an Asset Disposition as permitted pursuant to the covenant described under “— Certain Covenants — Limitation on Sales of Assets and Subsidiary Stock” or (B) a disposition of assets not constituting an Asset Disposition;
	(9) any Person where such Investment was acquired by the Company or any of its Restricted Subsidiaries (A) in exchange for any other Investment or accounts receivable held by the Company or any such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the issuer of such other Investment or accounts receivable or (B) as a result of a foreclosure by the Company or any of its Restricted Subsidiaries with respect to any secured Investment or other transfer of title with respect to any secured Investment in default;
	(10) any Person to the extent such Investments consist of prepaid expenses, negotiable instruments held for collection and lease, utility and workers’ compensation, performance and other similar deposits made in the ordinary course of business by the Company or any Restricted Subsidiary;
	(11) any Person to the extent such Investments consist of Hedging Obligations otherwise permitted under the covenant described under “— Certain Covenants — Limitation on Indebtedness”;
	(12) any Person to the extent such Investment exists on the Issue Date, and any extension, modification or renewal of any such Investments existing on the Issue Date, but only to the extent not involving additional advances, contributions or other Investments of cash or other assets or other increases thereof (other than as a result of the accrual or accretion of interest or original issue discount or the issuance of pay-in-kind securities, in each case, pursuant to the terms of such Investment as in effect on the Issue Date;
	(13) Investments in Permitted Joint Ventures, when taken together with all other Investments made pursuant to this clause (13), do not exceed $35.0 million;
	(14) obligations of one or more officers, directors or employees of the Company or any of its Restricted Subsidiaries in connection with such individual’s acquisition of shares of Capital Stock of the Company (and refinancings of the principal thereof and accrued interest thereon) so long as no net cash or other assets of the Company and its Restricted Subsidiaries are paid by the Company or any of its Restricted Subsidiaries to such individuals in connection with the acquisition of any such obligations;

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	(15) Investments in prepaid expenses, negotiable instruments held for collection or deposit and lease, utility and workers compensation, performance and similar deposits entered into as a result of the operations of the business in the ordinary course of business; and
	(16) Persons to the extent such Investments, when taken together with all other Investments made pursuant to this clause (16) and outstanding on the date such Investment is made, do not exceed the greater of (i) $35 million and (ii) 3.0% of Consolidated Net Tangible Assets.

	(1) pledges or deposits by such Person under worker’s compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure public or statutory obligations of such Person or deposits of cash or United States government bonds to secure surety or appeal bonds to which such Person is a party, or deposits as security for contested taxes or import duties or for the payment of rent, in each case Incurred in the ordinary course of business;
	(2) Liens imposed by law, such as carriers’, warehousemen’s and mechanics’ Liens, in each case for sums not yet due or being contested in good faith by appropriate proceedings or other Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with an appeal or other proceedings for review and Liens arising solely by virtue of any statutory or common law provision relating to banker’s Liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a creditor depository institution; provided, however, that (A) such deposit account is not a dedicated cash collateral account and is not subject to restrictions against access by the Company in excess of those set forth by regulations promulgated by the Federal Reserve Board and (B) such deposit account is not intended by the Company or any Restricted Subsidiary to provide collateral to the depository institution;
	(3) Liens for taxes, assessments or governmental charges not yet subject to penalties for non-payment or which are being contested in good faith by appropriate proceedings;
	(4) Liens in favor of issuers of surety bonds or letters of credit issued pursuant to the request of and for the account of such Person in the ordinary course of its business; provided, however, that such letters of credit do not constitute Indebtedness;
	(5) minor survey exceptions, minor encumbrances, easements or reservations of, or rights of others for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions as to the use of real property or Liens incidental to the conduct of the business of such Person or to the ownership of its properties which were not Incurred in connection with Indebtedness and which do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person;
	(6) Liens securing Indebtedness Incurred to finance the construction, purchase or lease of, or repairs, improvements or additions to, property, plant or equipment of such Person; provided, however, that the Lien may not extend to any other property owned by such Person or any of its Restricted Subsidiaries at the time the Lien is Incurred (other than assets and property affixed or appurtenant thereto), and the Indebtedness (other than any interest thereon) secured by the Lien may not be Incurred more than 180 days after the later of the acquisition, completion of construction, repair, improvement, addition or commencement of full operation of the property subject to the Lien;
	(7) Liens to secure Indebtedness permitted under the provisions described in clause (b)(1) under “— Certain Covenants — Limitation on Indebtedness” (including, during any Suspension Period, Indebtedness of the type and in the amounts specified under such clause);
	(8) Liens existing on the Issue Date;
	(9) Liens on property or shares of Capital Stock of another Person at the time such other Person becomes a Subsidiary of such Person; provided, however, that the Liens may not extend to any other

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	property owned by such Person or any of its Restricted Subsidiaries (other than assets and property affixed or appurtenant thereto);
	(10) Liens on property at the time such Person or any of its Subsidiaries acquires the property, including any acquisition by means of a merger or consolidation with or into such Person or a Subsidiary of such Person; provided, however, that the Liens may not extend to any other property owned by such Person or any of its Restricted Subsidiaries (other than assets and property affixed or appurtenant thereto);
	(11) Liens securing Indebtedness or other obligations of a Subsidiary of such Person owing to such Person or a Restricted Subsidiary of such Person;
	(12) Liens securing Hedging Obligations so long as such Hedging Obligations are permitted to be Incurred under the Indenture;
	(13) Liens to secure Indebtedness permitted under the provisions described in clause (b)(11) under “— Certain Covenants — Limitation on Indebtedness” (including, during any Suspension Period, Indebtedness of the type and in the amounts specified under such clause); provided, however, such Liens are limited to the assets that are the subject of such Indebtedness and the proceeds thereof;
	(14) Liens in favor of the Company or any Subsidiary Guarantor; and
	(15) Liens to secure any Refinancing (or successive Refinancings) as a whole, or in part, of any Indebtedness secured by any Lien referred to in the foregoing clause (6), (8), (9, (10) or (13); provided, however, that:

	(A) such new Lien shall be limited to all or part of the same property and assets that secured or, under the written agreements pursuant to which the original Lien arose, could secure the original Lien (plus improvements and accessions to, such property or proceeds or distributions thereof); and
	(B) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (i) the outstanding principal amount or, if greater, committed amount of the Indebtedness described under clause (6), (8), (9),(10) or (13) at the time the original Lien became a Permitted Lien and (ii) an amount necessary to pay any fees and expenses, including premiums, related to such refinancing, refunding, extension, renewal or replacement.

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	(1) such Refinancing Indebtedness has a Stated Maturity no earlier than the Stated Maturity of the Indebtedness being Refinanced;
	(2) such Refinancing Indebtedness has an Average Life at the time such Refinancing Indebtedness is Incurred that is equal to or greater than the Average Life of the Indebtedness being Refinanced;
	(3) such Refinancing Indebtedness has an aggregate principal amount (or if Incurred with original issue discount, an aggregate issue price) that is equal to or less than the aggregate principal amount (or if Incurred with original issue discount, the aggregate accreted value) then outstanding (plus fees and expenses, including any premium and defeasance costs) under the Indebtedness being Refinanced; and
	(4) if the Indebtedness being Refinanced is subordinated in right of payment to the notes, such Refinancing Indebtedness is subordinated in right of payment to the notes at least to the same extent as the Indebtedness being Refinanced;

	(1) the declaration or payment of any dividends or any other distributions of any sort in respect of its Capital Stock (including any payment in connection with any merger or consolidation involving such Person) or similar payment to the direct or indirect holders of its Capital Stock (other than (A) dividends or distributions payable solely in its Capital Stock (other than Disqualified Stock), (B) dividends or distributions payable solely to the Company or a Restricted Subsidiary and (C) pro rata dividends or other distributions made by a Subsidiary that is not a Wholly Owned Subsidiary to minority stockholders (or owners of an equivalent interest in the case of a Subsidiary that is an entity other than a corporation));
	(2) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of any Capital Stock of the Company held by any Person (other than by a Restricted Subsidiary) or of any Capital Stock of a Restricted Subsidiary held by any Affiliate of the Company (other than by a Restricted Subsidiary), including in connection with any merger or consolidation and including the exercise of any option to exchange any Capital Stock (other than into Capital Stock of the Company that is not Disqualified Stock);
	(3) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value, prior to scheduled maturity, scheduled repayment or scheduled sinking fund payment of any Subordinated Obligations of the Company or any Subsidiary Guarantor (other than (A) from the Company or a Restricted Subsidiary or (B) the purchase, repurchase, redemption, defeasance or other acquisition or retirement of Subordinated Obligations purchased in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of such purchase, repurchase, redemption, defeasance or other acquisition or retirement); or

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	(4) the making of any Investment (other than a Permitted Investment) in any Person.

	(1) Indebtedness of such Person, whether outstanding on the Issue Date or thereafter Incurred; and
	(2) all other Obligations of such Person (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to such Person whether or not post-filing interest is allowed in such proceeding) in respect of Indebtedness described in clause (1) above

	(i) any obligation of such Person to the Company or any Subsidiary of the Company;
	(ii) any liability for Federal, state, local or other taxes owed or owing by such Person;
	(iii) any accounts payable or other liability to trade creditors arising in the ordinary course of business;
	(iv) any Indebtedness or other Obligation of such Person which is subordinate or junior in any respect to any other Indebtedness or other Obligation of such Person; or
	(v) that portion of any Indebtedness which at the time of Incurrence is Incurred in violation of the Indenture.

	(1) such Person;
	(2) such Person and one or more Subsidiaries of such Person; or
	(3) one or more Subsidiaries of such Person.

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	(1) any investment in direct obligations of the United States of America or any agency thereof or obligations guaranteed by the United States of America or any agency thereof;
	(2) investments in demand and time deposit accounts, certificates of deposit and money market deposits maturing within 180 days of the date of acquisition thereof issued by a bank or trust company which is organized under the laws of the United States of America, any State thereof or any foreign country recognized by the United States of America, and which bank or trust company has capital, surplus and undivided profits aggregating in excess of $50.0 million (or the foreign currency equivalent thereof) and has outstanding debt which is rated “A” (or such similar equivalent rating) or higher by at least one nationally recognized statistical rating organization (as defined in Rule 436 under the Securities Act) or any money-market fund sponsored by a registered broker dealer or mutual fund distributor;
	(3) repurchase obligations with a term of not more than 30 days for underlying securities of the types described in clause (1) above entered into with a bank meeting the qualifications described in clause (2) above;
	(4) investments in commercial paper, maturing not more than 90 days after the date of acquisition, issued by a corporation (other than an Affiliate of the Company) organized and in existence under the laws of the United States of America or any foreign country recognized by the United States of America with a rating at the time as of which any investment therein is made of “P-1” (or higher) according to Moody’s or “A-1” (or higher) according to Standard and Poor’s;
	(5) investments in securities with maturities of six months or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States of America, or by any political subdivision or taxing authority thereof, and rated at least “A” by Standard & Poor’s or “A” by Moody’s; and
	(6) investments in money market funds that invest substantially all their assets in securities of the types described in clauses (1) through (5) above.

	(1) any Subsidiary of the Company that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors in the manner provided below; and
	(2) any Subsidiary of an Unrestricted Subsidiary.

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	•	a citizen or resident alien individual of the United States;
	•	a corporation or other entity taxable as a corporation created or organized in or under the laws of the United States, any State thereof or the District of Columbia;
	•	an estate the income of which is subject to United States federal income tax regardless of its source; or
	•	a trust, if a United States court can exercise primary supervision over the administration of the trust and one or more United States persons can control all substantial trust decisions, or if the trust was in existence on August 20, 1996 and has elected to continue to be treated as a United States person.

	Exchange of Unregistered Notes in the Exchange Offer

	Interest

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	Sale or Other Taxable Disposition of the Notes

	Backup Withholding

	•	fails to furnish its taxpayer identification number (“TIN”), which, for an individual, ordinarily is his or her social security number;
	•	furnishes an incorrect TIN;
	•	is notified by the IRS that the United States Holder has failed to properly report payments of interest or dividends; or
	•	fails to certify, under penalties of perjury, that the United States Holder is a United States person, has furnished a correct TIN and that the IRS has not notified the United States Holder that it is subject to backup withholding.

	Exchange of Unregistered Notes in the Exchange Offer

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	Interest Payments and Gains from Dispositions

	Interest on the Notes

	•	such non-United States Holder does not own, actually or constructively, 10% or more of the combined voting power of all classes of our stock entitled to vote; and
	•	such non-United States Holder is not a “controlled foreign corporation” that is related to us.

	Disposition of Notes

	•	the gain is effectively connected with the conduct by you of a United States trade or business (and in the case of an applicable income tax treaty, is attributable to your permanent establishment in the United States); or
	•	you are an individual who has been present in the United States for 183 days or more in the taxable year of disposition and certain other requirements are met.

	Income or Gain Effectively Connected with a United States Trade or Business

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	Backup Withholding and Information Reporting

	•	a United States person;
	•	a controlled foreign corporation for United States federal income tax purposes:
	•	a foreign person 50% or more of whose gross income is effectively connected with a United States trade or business for a specified three-year period; or
	•	a foreign partnership, if at any time during its tax year, one or more of its partners are United States persons, as defined in Treasury regulations, who in the aggregate hold more than 50% of the income or capital interest in the partnership or if, at any time during its tax year, the foreign partnership is engaged in a United States trade or business;

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	1.	Our current reports on Form 8-K, filed February 3, 2006, February 27, 2006, March 1, 2006, March 14, 2006, April 6, 2006, April 7, 2006, May 3, 2006, May 30, 2006, June 13, 2006, June 26, 2006, June 29, 2006; and September 20, 2006;
	2.	Our quarterly report on Form 10-Q/A Amendment No. 1 for the quarterly period ended June 30, 2006, except for “Part I, Item 1. Financial Statements,” which financial statements are included on pages F-43 through F-66 of this prospectus;
	3.	Our annual report on Form 10-K for the fiscal year ended December 31, 2005, except for “Item 8. Financial Statements and Supplementary Data,” which financial statements are included on pages F-2 through F-42 of this prospectus.

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Management’s Report on Internal Control Over Financial Reporting			F-2
Report of Independent Registered Public Accounting Firm			F-3
Report of Independent Registered Public Accounting Firm			F-4
Consolidated Statements of Income for the Years Ended December 31, 2005, 2004 and 2003			F-5
Consolidated Balance Sheets as of December 31, 2005 and 2004			F-6
Consolidated Statements of Cash Flows for the Years Ended December 31, 2005, 2004 and 2003			F-7
Consolidated Statements of Shareholders’ Equity for the Years Ended December 31, 2005, 2004 and 2003			F-8
Notes to Consolidated Financial Statements			F-9
Schedule II			F-42

Condensed Consolidated Statements of Income for the Three Months and Six Months Ended June 30, 2006 and 2005			F-43
Condensed Consolidated Balance Sheets as of June 30, 2006 and December 31, 2005			F-44
Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2006 and 2005			F-45
Notes to Condensed Consolidated Financial Statements			F-46

F-1

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F-2

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Table of Contents

F-3

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F-4

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								Year Ended December 31
								2005				2004				2003
								(In thousands, except
								per share amounts)
Net sales								$	579,121			$	543,524			$	533,193
Energy sales — net									10,078				9,953				10,040
	Total revenues								589,199				553,477				543,233
Costs of products sold									492,023				461,063				463,687
	Gross profit								97,176				92,414				79,546
Selling, general and administrative expenses									67,633				59,939				59,146
Restructuring charges									1,564				20,375				6,983
Unusual items									—				—				11,501
Gains on disposition of plant, equipment and timberlands, net									(22,053	)			(58,509	)			(32,334	)
Insurance recoveries									(20,151	)			(32,785	)			—
	Total								26,993				(10,980	)			45,296
		Operating income							70,183				103,394				34,250
Other nonoperating income (expense)
	Interest expense								(13,083	)			(13,385	)			(14,269	)
	Interest income								2,012				2,012				1,820
	Other — net								1,028				(1,258	)			(1,385	)
		Total other nonoperating expense							(10,043	)			(12,631	)			(13,834	)
			Income from continuing operations before income taxes						60,140				90,763				20,416
			Income tax provision						21,531				34,661				7,430
				Income from continuing operations					38,609				56,102				12,986
			Discontinued operations
				Loss from discontinued operations					—				—				(513	)
				Income tax benefit					—				—				(188	)
					Loss from discontinued operations				—				—				(325	)
						Net income		$	38,609			$	56,102			$	12,661
Basic earnings per share
	Income from continuing operations							$	0.88			$	1.28			$	0.30
	Loss from discontinued operations								—				—				(0.01	)
		Net income						$	0.88			$	1.28			$	0.29
Diluted earnings per share
	Income from continuing operations							$	0.87			$	1.27			$	0.30
	Loss from discontinued operations								—				—				(0.01	)
		Net income						$	0.87			$	1.27			$	0.29

F-5

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				December 31
				2005				2004
				(Dollars in thousands,
				except par values)
ASSETS
Current assets
Cash and cash equivalents				$	57,442			$	39,951
Accounts receivable (less allowance for doubtful accounts: 2005 — $931; 2004 — $2,364)					62,524				60,900
Inventories					81,248				78,836
Prepaid expenses and other current assets					22,343				18,765
	Total current assets				223,557				198,452
Plant, equipment and timberlands — net					478,828				520,412
Other assets					342,592				333,406
		Total assets		$	1,044,977			$	1,052,270
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Current portion of long-term debt				$	19,650			$	446
Short-term debt					3,423				3,503
Accounts payable					31,132				30,174
Dividends payable					3,972				3,955
Environmental liabilities					7,575				7,715
Other current liabilities					74,126				58,214
	Total current liabilities				139,878				104,007
Long-term debt					184,000				207,277
Deferred income taxes					206,269				212,074
Other long-term liabilities					82,518				108,542
	Total liabilities				612,665				631,900
Commitments and contingencies					—				—
Shareholders’ equity
Common stock, $.01 par value; authorized — 120,000,000 shares; issued — 54,361,980 shares (including shares in treasury: 2005 — 10,229,734 — 2004 — 10,412,222)					544				544
Capital in excess of par value					43,450				41,828
Retained earnings					547,810				525,056
Deferred compensation					(2,295	)			(1,275	)
Accumulated other comprehensive income (loss)					(5,343	)			8,768
					584,166				574,921
Less cost of common stock in treasury					(151,854	)			(154,551	)
	Total shareholders’ equity				432,312				420,370
		Total liabilities and shareholders’ equity		$	1,044,977			$	1,052,270

F-6

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					Year Ended December 31
					2005				2004				2003
					(In thousands)
Operating activities
Net income					$	38,609			$	56,102			$	12,661
Loss from discontinued operations						—				—				(325	)
	Income from continuing operations					38,609				56,102				12,986
Adjustments to reconcile to net cash provided by continuing operations:
	Depreciation, depletion and amortization					50,647				51,598				56,029
	Pension income					(16,517	)			(17,342	)			(17,149	)
	Restructuring charges and unusual items					1,564				16,483				17,640
	Deferred income tax provision					3,020				17,364				7,779
	Gains on dispositions of plant, equipment and timberlands, net					(22,053	)			(58,509	)			(32,334	)
	Other					630				655				745
Change in operating assets and liabilities
	Accounts receivable					(5,876	)			470				4,399
	Inventories					(6,195	)			(4,276	)			3,060
	Other assets and prepaid expenses					3,995				(12,721	)			(359	)
	Liabilities					(4,956	)			(10,240	)			(5,800	)
		Net cash provided by continuing operations				42,868				39,584				46,996
		Net cash used by discontinued operations				—				—				(244	)
			Net cash provided by operating activities			42,868				39,584				46,752
Investing activities
Purchase of plant, equipment and timberlands						(31,024	)			(18,587	)			(66,758	)
Proceeds from disposal of plant, equipment and timberlands						22,450				60,171				2,892
Proceeds from sale of subsidiary, net of cash divested						545				525				1,499
		Net cash (used) provided by investing activities of continuing operations				(8,029	)			42,109				(62,367	)
		Net cash used by investing activities of discontinued operations				—				—				(60	)
			Net cash (used) provided by investing activities			(8,029	)			42,109				(62,427	)
Financing activities
Net repayments from revolving credit facility						(733	)			(44,888	)			(10,124	)
Proceeds from borrowing from SunTrust Financial						—				—				34,000
Payment of dividends						(15,839	)			(15,782	)			(26,879	)
Proceeds from stock options exercised						1,414				917				541
		Net cash used by financing activities				(15,158	)			(59,753	)			(2,462	)
Effect of exchange rate changes on cash						(2,190	)			2,445				1,484
	Net increase (decrease) in cash and cash equivalents					17,491				24,385				(16,653	)
		Cash and cash equivalents at the beginning of period				39,951				15,566				32,219
		Cash and cash equivalents at the end of period			$	57,442			$	39,951			$	15,566
Supplemental cash flow information
Cash paid (received) for
	Interest expense				$	12,378			$	11,713			$	13,767
	Income taxes					17,443				3,256				(1,575	)

F-7

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																					Accumulated
																					Other
																					Compre-
									Capital in								Deferred				hensive								Total
					Common				Excess of				Retained				Compen-				Income				Treasury				Shareholders’
					Stock				Par Value				Earnings				sation				(Loss)				Stock				Equity
					(In thousands, except shares outstanding)
Balance at January 1, 2003					$	544			$	40,798			$	495,278			$	—			$	(3,708	)		$	(159,079	)		$	373,833
Comprehensive income
	Net income													12,661																12,661
	Other comprehensive income
	Foreign currency translation adjustments																					6,398
		Other comprehensive income																				6,398								6,398
			Comprehensive income																											19,059
Tax effect on employee stock options exercised										13																				13
Cash dividends declared														(23,183	)															(23,183	)
Delivery of treasury shares
	Performance shares									(13	)															124				111
	401(k) plans									(207	)															1,188				981
	Director compensation									(21	)															97				76
	Employee stock options exercised — net									(101	)															642				541
		Balance at December 31, 2003				544				40,469				484,756				—				2,690				(157,028	)			371,431
Comprehensive income
	Net income													56,102																56,102
	Other comprehensive income
	Foreign currency translation adjustments																					6,078
		Other comprehensive income																				6,078								6,078
			Comprehensive income																											62,180
Tax effect on employee stock options exercised										38																				38
Cash dividends declared														(15,802	)															(15,802	)
Issuance of restricted stock units, net										1,725								(1,275	)											450
Delivery of treasury shares
	Restricted stock awards									(57	)															275				218
	401(k) plans									(170	)															1,015				845
	Director compensation									(12	)															105				93
	Employee stock options exercised — net									(165	)															1,082				917
		Balance at December 31, 2004				544				41,828				525,056				(1,275	)			8,768				(154,551	)			420,370
Comprehensive income
	Net income													38,609																38,609
	Other comprehensive income
		Foreign currency translation adjustments																				(9,619	)
		Additional minimum pension liability, net of tax benefits of $2,831																				(4,492	)
		Other comprehensive income																				(14,111	)							(14,111	)
			Comprehensive income																											24,498
Tax effect on employee stock options exercised										76																				76
Cash dividends declared														(15,855	)															(15,855	)
Issuance of restricted stock units, net										1,894								(1,020	)											874
Delivery of treasury shares
	401(k) plans									(84	)															917				833
	Director compensation									(21	)															123				102
	Employee stock options exercised — net									(243	)															1,657				1,414
		Balance at December 31, 2005			$	544			$	43,450			$	547,810			$	(2,295	)		$	(5,343	)		$	(151,854	)		$	432,312

F-8

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Buildings		10 — 45 Years
Machinery and equipment		7 — 35 Years
Other		4 — 40 Years

F-9

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F-10

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		2004				2003
Risk-free interest rate			4.50	%			3.47	%
Expected dividend yield			3.17				5.74
Expected volatility			35.0				38.9
Expected life			6.5 yrs				6.5 yrs

F-11

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			Year Ended December 31
			2005				2004				2003
			(In thousands, except per share)
Net income as reported			$	38,609			$	56,102			$	12,661
Add: stock-based compensation expense included in reported net income, net of tax				757				16				346
Less: stock-based compensation expense determined under fair value based method for all awards, net of tax				(786	)			(339	)			(1,808	)
Pro forma			$	38,580			$	55,779			$	11,199
Basic earnings per share
	Reported		$	0.88			$	1.28			$	0.29
	Pro forma			0.88				1.27				0.26
Diluted earnings per share
	Reported			0.87				1.27				0.29
	Pro forma			0.87				1.27				0.26

		2005				2004
		Carrying				Carrying
		Value		Fair Value		Value		Fair Value
Long-term debt		$203,650		$206,652		$207,723		$215,402

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			Year Ended
			December 31
			2005				2004
			(In thousands)
Beginning balance			$	60			$	—
Amounts accrued								17,187
Payments made				(60	)			(644	)
To be paid:
	From pension plan assets							(11,255	)
	As OPEB benefits							(5,228	)
Ending balance			$	—			$	60

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			Year Ended
			December 31
			2004				2003
			(In thousands)
Contract modification fee			$	3,000			$	—
Depreciation on abandoned equipment				—				5,974
Severance and benefit continuation				188				1,874
Pension and other retirement benefits				—				4,878
Other				—				768
	Total		$	3,188			$	13,494

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7.	GAIN ON DISPOSITIONS OF PLANT, EQUIPMENT AND TIMBERLANDS

			Acres				Proceeds				Gain/(Loss)
			(Dollars in thousands)
2005
Timberlands				2,488			$	21,000			$	20,327
Other				n/a				1,778				1,726
	Total						$	22,778			$	22,053
2004
Timberlands				4,482			$	56,586			$	55,355
Corporate Aircraft				n/a				2,861				2,554
Other				n/a				724				600
	Total						$	60,171			$	58,509
2003
Timberlands				25,500			$	37,850			$	31,234
Other				n/a				2,892				1,100
	Total						$	40,742			$	32,334

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			2005				2004				2003
			(In thousands, except per share)
Income from continuing operations			$	38,609			$	56,102			$	12,986
Loss from discontinued operations				—				—				(325	)
	Net income		$	38,609			$	56,102			$	12,661
Weighted average common shares outstanding used in basic EPS				44,013				43,856				43,731
Common shares issuable upon exercise of dilutive stock options, restricted stock awards and performance awards				330				167				29
Weighted average common shares outstanding and common share equivalents used in diluted EPS				44,343				44,023				43,760
Basic EPS
Income from continuing operations			$	0.88			$	1.28			$	0.30
Loss from discontinued operations				—				—				(0.01	)
	Net income		$	0.88			$	1.28			$	0.29
Diluted EPS
Income from continuing operations			$	0.87			$	1.27			$	0.30
Loss from discontinued operations				—				—				(0.01	)
	Net income		$	0.87			$	1.27			$	0.29

		2005				2004		2003
		(In thousands)
Potential common shares			758			1,664		1,846

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			Year Ended December 31
			2005				2004				2003
			(In thousands)
Current taxes
	Federal		$	14,881			$	8,982			$	(723	)
	State			3,145				5,262				27
	Foreign			485				3,053				347
				18,511				17,297				(349	)
Deferred taxes
	Federal			3,239				14,292				1,562
	State			(1,905	)			101				2,950
	Foreign			1,686				2,971				3,267
				3,020				17,364				7,779
	Total provision for income taxes from continuing operations		$	21,531			$	34,661			$	7,430

			Year Ended December 31
			2005				2004				2003
			(In thousands)
United States			$	55,865			$	78,627			$	16,968
Foreign				4,275				12,136				3,448
	Total pretax income		$	60,140			$	90,763			$	20,416

		Year Ended
		December 31
		2005				2004				2003
		(In thousands)
Federal income tax provision at statutory rate			35.0	%			35.0	%			35.0	%
State income taxes, net of federal income tax benefit			1.3				3.9				3.7
Tax effect of bargain sale			—				—				(19.6	)
Tax effect of tax credits			(2.2	)			(4.1	)			(7.3	)
Valuation allowance			(0.8	)			3.4				29.7
Provision for (resolution of) tax matters			2.2				—				(2.7	)
Other			0.3				—				(2.4	)
Total provision for income taxes from continuing operations			35.8	%			38.2	%			36.4	%

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		2005								2004
						Non-								Non-
		Current				current				Current				current
		Asset				Asset				Asset				Asset
		(Liability)				(Liability)				(Liability)				(Liability)
		(In thousands)
Reserves		$	6,082			$	8,817			$	6,291			$	10,106
Compensation			1,134				2,832				1,070				2,274
Post-retirement benefits			1,992				10,683				1,992				10,591
Property			—				(117,492	)			—				(124,651	)
Pension			(430	)			(98,261	)			(478	)			(94,373	)
Installment Sale			—				(10,897	)			—				(12,521	)
Inventories			(45	)			—				368				—
Other			2,285				(4,315	)			176				(2,688	)
Tax carry forwards			—				20,467				(1,519	)			25,858
Subtotal			11,018				(188,166	)			7,900				(185,404	)
Valuation allowance			(26	)			(18,103	)			—				(20,037	)
Total		$	10,992			$	(206,269	)		$	7,900			$	(205,441	)

		Year Ended December 31
		2005				2004
		(In thousands)
Prepaid expenses and other current assets		$	11,209			$	8,910
Other current liabilities			217				1,010
Other non-current assets			—				6,633
Deferred income taxes			206,269				212,074

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		Compensation
		Expense
		(In thousands)
2005		$	705
2004			(443	)
2003			533

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		2005								2004								2003
						Weighted-								Weighted-								Weighted-
						Average								Average								Average
		Shares				Exercise Price				Shares				Exercise Price				Shares				Exercise Price
Outstanding at beginning of year			2,098,612			$	14.65				2,304,339			$	14.71				2,828,529			$	15.00
Granted			—				—				51,250				11.18				40,990				11.75
Exercised			(111,542	)			12.67				(72,850	)			12.61				(43,287	)			12.60
Canceled			(433,861	)			17.30				(184,127	)			15.51				(521,893	)			16.47
Outstanding at end of year			1,553,209				14.06				2,098,612				14.65				2,304,339				14.71
Exercisable at end of year			1,547,422			$	14.07				1,956,439			$	15.17				1,410,614			$	15.45

		Options Outstanding												Options Exercisable
						Weighted-
						Average				Weighted-								Weighted-
						Remaining				Average				Number				Average
		Shares				Contractual Life				Exercise Price				Outstanding				Exercise Price
$10.78 to $12.41			368,037				4.0			$	12.09				362,250			$	11.48
12.95 to 14.44			640,812				5.4				13.29				640,812				13.29
15.44 to 17.16			394,800				5.6				15.55				394,800				15.55
17.54 to 18.78			149,560				2.3				18.26				149,560				18.26
			1,553,209				4.8								1,547,422

12.	RETIREMENT PLANS AND OTHER POST-RETIREMENT BENEFITS

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		Pension Benefits								Other Benefits
		2005				2004				2005				2004
		(In millions)
Change in Benefit Obligation
Balance at beginning of year		$	295.2			$	267.2			$	46.7			$	39.7
Service Cost			3.7				3.9				1.1				1.0
Interest Cost			16.3				16.1				2.7				2.4
Plan amendments			—				0.2				(1.4	)
Actuarial loss			21.6				15.9				3.4				2.0
Benefits paid			(20.5	)			(18.4	)			(4.2	)			(3.6	)
Impact of curtailments			—				(0.5	)			—				5.1
Impact of special termination benefits			—				10.8				—				0.1
Balance at end of year		$	316.3			$	295.2			$	48.3			$	46.7
Change in Plan Assets
Fair value of plan assets at beginning of year		$	465.6			$	445.7			$	—			$	—
Actual return on plan assets			24.2				35.8				—				—
Employer contributions			2.3				2.5				4.2				3.6
Benefits paid			(20.5	)			(18.4	)			(4.2	)			(3.6	)
Fair value of plan assets at end of year		$	471.6			$	465.6			$	—			$	—
Reconciliation of Funded Status
Funded Status		$	155.3			$	170.4			$	(48.3	)		$	(46.7	)
Unrecognized transition assets			—				—				—				—
Unrecognized prior service cost			19.6				21.7				(7.5	)			(6.8	)
Unrecognized loss			70.4				33.4				23.2				21.1
Net amount recognized		$	245.3			$	225.5			$	(32.6	)		$	(32.4	)

		Pension Benefits								Other Benefits
		2005				2004				2005				2004
		(In millions)
Prepaid benefit cost		$	264.7			$	245.4			$	—			$	—
Accrued benefit liability			(28.6	)			(19.9	)			(32.6	)			(32.4	)
Intangible asset			1.9				—				—				—
Other comprehensive income, pre-tax			7.3				—				—				—
Net amount recognized		$	245.3			$	225.5			$	(32.6	)		$	(32.4	)

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										Other
		Pension Benefits								Benefits
		2005				2004				2005				2004
Discount rate — benefit obligation			5.50	%			5.75	%			5.50	%			5.75	%
Future compensation growth rate			4.0				4.0				—				—

		2005				2004
		(In millions)
Projected benefit obligation		$	30.3			$	23.1
Accumulated benefit obligation			28.6				21.8
Fair value of plan assets			—				—

		Year Ended December 31
		2005				2004				2003
		(In millions)
Pension Benefits
Service cost		$	3.7			$	3.9			$	3.7
Interest cost			16.3				16.1				16.3
Expected return on plan assets			(39.4	)			(39.4	)			(38.7	)
Amortization of transition asset			—				(0.8	)			(1.3	)
Amortization of prior service cost			2.3				2.4				2.8
Recognized actuarial loss			0.5				0.4				0.0
Net periodic benefit (income) cost			(16.6	)			(17.4	)			(17.2	)
Special termination benefits			—				—				5.4
Curtailment and settlement			—				11.4				—
Total net periodic benefit (income) cost		$	(16.6	)		$	(6.0	)		$	(11.8	)
Other Benefits
Service cost		$	1.1			$	1.0			$	1.0
Interest cost			2.7				2.4				2.5
Amortization of prior service cost			(0.7	)			(0.7	)			(0.8	)
Recognized actuarial loss			1.3				1.2				1.1
Net periodic benefit (income) cost			4.4				3.9				3.8
Special termination benefits			—				5.2				(0.5	)
Plan amendments			—				—				(0.7	)
Total net periodic benefit cost		$	4.4			$	9.1			$	2.6

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		Year Ended
		December 31
		2005				2004				2003
		(In millions)
Pension Benefits
Discount rate — benefit expense			5.75	%			6.25	%			6.75	%
Future compensation growth rate			4.0				4.0				4.0
Expected long-term rate of return on plan assets			8.5				8.5				8.5
Other Benefits
Discount rate — benefit expense			5.75	%			6.25	%			6.75	%
Future compensation growth rate			—				—				—
Expected long-term rate of return on plan assets			—				—				—

		2005				2004
Health care cost trend rate assumed for next year			11.0	%			11.5	%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)			5.0				5.0
Year that the rate reaches the ultimate rate			2013				2014

			One Percentage
			Point
			Increase				Decrease
			(In thousands)
Effect on:
	Post-retirement benefit obligation		$	4,267			$	(3,774	)
	Total of service and interest cost components			407				(353	)

			2005				2004
Asset Category Equity securities				70	%			66	%
Debt securities				30				30
Cash and real estate				—				4
	Total			100	%			100	%

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		Minimum				Target				Maximum
Equity			60	%			70	%			80	%
Fixed Income & Other			20				30				40

		(In
		thousands)
Nonqualified pension plans		$	2,145
Other benefit plans			5,079

		Pension Benefits
		Qualified				Non-Qualified				Other
		Plans				Plans				Benefits
		(In thousands)
2006		$	18,048			$	2,145			$	5,079
2007			17,842				2,079				4,826
2008			17,534				2,061				4,334
2009			17,265				2,052				4,119
2010			17,345				1,725				3,801
2011 through 2015			93,617				8,893				18,296

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			2005				2004
			(In thousands)
Raw materials			$	16,392			$	14,974
In-process and finished				39,930				39,327
Supplies				24,926				24,535
	Total		$	81,248			$	78,836

		2005				2004
		(In thousands)
Land and buildings		$	132,962			$	137,668
Machinery and equipment			888,660				902,835
Other			82,098				85,891
Accumulated depreciation			(641,070	)			(611,852	)
			462,650				514,542
Construction in progress			13,940				3,219
Timberlands, less depletion			2,238				2,651
Plant, equipment and timberlands — net		$	478,828			$	520,412

			December 31
			2005				2004
			(In thousands)
Accrued payroll and benefits			$	18,828			$	19,525
Other accrued compensation and retirement benefits				6,320				8,838
Income taxes payable				15,480				14,307
Cross currency rate swap				16,370				—
Other accrued expenses				17,128				15,544
	Total		$	74,126			$	58,214

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			December 31
			2005				2004
			(In thousands)
Revolving credit facility, due June 2006			$	19,650			$	23,277
67/8% Notes, due July 2007				150,000				150,000
Note payable — SunTrust, due March 2008				34,000				34,000
Other notes, various				—				446
	Total long-term debt			203,650				207,723
	Less current portion			(19,650	)			(446	)
Long-term debt, excluding current portion			$	184,000			$	207,277

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			Year Ended December 31
			2005				2004				2003
			(In thousands)
Shares outstanding at beginning of year				43,950				43,782				43,644
Treasury shares issued for:
	Restricted stock performance awards							19				8
	401(k) plan			62				69				80
	Director compensation			9				7				7
	Employee stock options exercised			111				73				43
Shares outstanding at end of year				44,132				43,950				43,782

		Leases				Other
		(In thousands)
2006		$	2,191			$	21,740
2007			1,886				12,632
2008			1,238				12,668
2009			794				12,488
2010			624				7,840

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		Ecusta
		Environmental				Workers’
		Matters				Comp				Other				Total
		(In thousands)
Balance, Jan. 1, 2003		$	—			$	2,200			$	1,393			$	3,593
Accruals			7,600				—				—				7,600
Payments			—				—				—				—
Balance, Dec. 31, 2003			7,600				2,200				1,393				11,193
Accruals			—				—				1,907				1,907
Payments			(1,209	)			(56	)			—				(1,265	)
Balance, Dec. 31, 2004			6,391				2,144				3,300				11,835
Accruals			2,700				—				—				2,700
Payments			(986	)			(231	)			—				(1,217	)
Balance, Dec. 31, 2005		$	8,105			$	1,913			$	3,300			$	13,318

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	i. mercury and certain other contamination on and around the site;
	ii. potentially hazardous conditions existing in the sediment and water column of the site’s water treatment and aeration and sedimentation basin (the “ASB”); and
	iii. contamination associated with two additional landfills on the site that were not used by us.

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			December 31,
			2005				2004
			(In millions)
Recorded as:
Environmental liabilities			$	7.6			$	7.7
Other long-term liabilities				9.2				13.9
	Total		$	16.8			$	21.6

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F-35

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			Specialty Papers												Composite Fibers												Other and Unallocated												Total
			2005				2004				2003				2005				2004				2003				2005				2004				2003				2005				2004				2003
			(In thousands)
Net sales			$	380,923			$	337,436			$	357,989			$	198,137			$	205,232			$	165,389			$	61			$	856			$	9,815			$	579,121			$	543,524			$	533,193
Energy sales, net				10,078				9,953				10,040				—				—				—				—				—				—				10,078				9,953				10,040
	Total revenue			391,001				347,389				368,029				198,137				205,232				165,389				61				856				9,815				589,199				553,477				543,233
Cost of products sold				340,629				312,136				325,897				166,153				163,843				130,838				84				1,021				15,448				506,866				477,000				472,183
	Gross profit			50,372				35,253				42,132				31,984				41,389				34,551				(23	)			(165	)			(5,633	)			82,333				76,477				71,050
SG&A				39,876				36,617				44,494				21,282				23,067				16,669				8,149				1,660				125				69,307				61,344				61,288
Pension income				—				—				—				—				—				—				(16,517	)			(17,342	)			(17,149	)			(16,517	)			(17,342	)			(17,149	)
Restructuring recorded as component of COS				—				—				—				—				—				—				—				—				6,511								—				6,511
Restructuring charges				—				—				—				—				—				—				1,564				20,375				6,983				1,564				20,375				6,983
Unusual items				—				—				—				—				—				—				—				—				11,501								—				11,501
Gains on dispositions of plant, equipment and timberlands				—				—				—				—				—				—				(22,053	)			(58,509	)			(32,334	)			(22,053	)			(58,509	)			(32,334	)
Gain on insurance recoveries				—				—				—				—				—				—				(20,151	)			(32,785	)			—				(20,151	)			(32,785	)			—
Total operating income (loss)				10,496				(1,364	)			(2,362	)			10,702				18,322				17,882				48,985				86,436				18,730				70,183				103,394				34,250
Nonoperating income (expense)				—				—				—				—				—				—				(10,043	)			(12,631	)			(13,834	)			(10,043	)			(12,631	)			(13,834	)
Income from continuing operations before income taxes			$	10,496			$	(1,364	)		$	(2,362	)		$	10,702			$	18,322			$	17,882			$	38,942			$	73,805			$	4,896			$	60,140			$	90,763			$	20,416
Supplemental Data
Plant, equipment and timberlands, net			$	335,745			$	351,086			$	377,182			$	143,083			$	169,326			$	165,778				—				—				—			$	478,828			$	520,412			$	542,960
Depreciation expense				35,781				37,186				44,216				14,866				14,412				11,813				—				—				—				50,647				51,598				56,029

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			2005								2004								2003
							Plant,								Plant,								Plant,
							Equipment and								Equipment and								Equipment and
			Net Sales				Timberlands — Net				Net Sales				Timberlands — Net				Net Sales				Timberlands — Net
			(In thousands)
United States			$	399,705			$	335,745			$	353,284			$	351,086			$	367,903			$	377,182
Germany				143,227				123,685				156,337				149,513				138,630				147,651
Other				36,189				19,398				33,903				19,813				26,660				18,127
	Total		$	579,121			$	478,828			$	543,524			$	520,412			$	533,193			$	542,960

																										Diluted Earnings
		Net Sales								Gross Profit								Net Income								Per Share
		2005				2004				2005				2004				2005				2004				2005				2004
		(In thousands, except per share)
First		$	143,896			$	132,078			$	28,594			$	20,499			$	6,290			$	36,258			$	0.14			$	0.83
Second			145,283				129,029				19,833				16,042				1,709				(1,629	)			0.04				(0.04	)
Third			146,780				143,075				25,616				27,042				3,663				2,199				0.08				0.05
Fourth			143,162				139,342				23,133				28,831				26,947				19,274				0.61				0.44

										Gains on Sales of
										Plant, Equipment and
		Restructuring Charges								Timberlands, and
		and Unusual Items								Other Asset Sales								Insurance Recoveries
		2005				2004				2005				2004				2005				2004
		(In thousands)
First		$	—			$	—			$	—			$	19,559			$	—			$	15,221
Second			—				(524	)			—				—				1,430				181
Third			—				(10,249	)			259				947				—				5,908
Fourth			(1,017	)			(1,950	)			11,517				13,558				11,289				—

F-37

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F-38

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Table of Contents

							Parent												Adjustments/
							Company				Guarantors				Non-Guarantors				Eliminations				Consolidated
							In thousands
Net sales							$	380,906			$	34,334			$	198,254			$	(34,373	)		$	579,121
Energy sales — net								10,078				—				—				—				10,078
		Total revenues						390,984				34,334				198,254				(34,373	)			589,199
Costs of products sold								326,433				33,101				167,157				(34,668	)			492,023
		Gross profit						64,551				1,233				31,097				295				97,176
Selling, general and administrative expenses								44,381				1,798				21,454				—				67,633
Shutdown and restructuring charges								—				—				1,564				—				1,564
Gains on dispositions of plant, equipment and timberlands, net								(881	)			(21,213	)			41				—				(22,053	)
Gains from insurance recoveries								(20,151	)			—				—				—				(20,151	)
		Operating income						41,202				20,648				8,038				295				70,183
		Nonoperating income (expense)
				Interest expense				(10,730	)			—				(2,353	)			—				(13,083	)
				Other income (expense) — net				4,957				41,773				(1,330	)			(42,360	)			3,040
			Total other income (expense)					(5,773	)			41,773				(3,683	)			(42,360	)			(10,043	)
	Income before income taxes							35,429				62,421				4,355				(42,065	)			60,140
	Income tax provision (benefit)							(3,180	)			23,695				1,808				(792	)			21,531
					Net income		$	38,609			$	38,726			$	2,547			$	(41,273	)		$	38,609

	Condensed Consolidating Statement of Income for the year ended December 31, 2004

						Parent												Adjustments/
						Company				Guarantors				Non-Guarantors				Eliminations				Consolidated
						In thousands
Net sales						$	337,416			$	33,798			$	206,203			$	(33,893	)		$	543,524
Energy sales — net							9,953				—				—				—				9,953
Total revenues							347,369				33,798				206,203				(33,893	)			553,477
Costs of products sold							299,150				30,116				165,151				(33,354	)			461,063
		Gross profit					48,219				3,682				41,052				(539	)			92,414
Selling, general and administrative expenses							34,492				2,181				24,154				(888	)			59,939
Shutdown and restructuring charges							19,704				671				1				(1	)			20,375
(Gains) losses on dispositions of plant, equipment and timberlands, net							(3,356	)			(55,630	)			477				—				(58,509	)
Gains from insurance recoveries							(32,785	)			—				—				—				(32,785	)
		Operating income					30,164				56,460				16,420				350				103,394
		Nonoperating income (expense)
				Interest expense			(10,875	)			—				(2,510	)			—				(13,385	)
				Other income (expense) — net			31,074				33,364				(1,378	)			(62,306	)			754
			Total other income (expense)				20,199				33,364				(3,888	)			(62,306	)			(12,631	)
	Income before income taxes						50,363				89,824				12,532				(61,956	)			90,763
	Income tax provision (benefit)						(5,739	)			34,715				6,313				(628	)			34,661
				Net income		$	56,102			$	55,109			$	6,219			$	(61,328	)		$	56,102

						Parent												Adjustments/
						Company				Guarantors				Non-Guarantors				Eliminations				Consolidated
						In thousands
Net sales						$	357,688			$	29,669			$	175,426			$	(29,590	)		$	533,193
Energy sales — net							10,040				—				—				—				10,040
		Total revenues					367,728				29,669				175,426				(29,590	)			543,233
Costs of products sold							321,684				28,181				143,302				(29,480	)			463,687
		Gross profit					46,044				1,488				32,124				(110	)			79,546
Selling, general and administrative expenses							36,427				2,313				20,404				2				59,146
Shutdown and restructuring charges							18,484				—				1				(1	)			18,484
(Gains) losses on dispositions of plant, equipment and timberlands, net							625				(32,101	)			(858	)			—				(32,334	)
		Operating income					(9,492	)			31,276				12,577				(111	)			34,250
		Nonoperating income (expense)
				Interest expense			(11,080	)			—				(3,188	)			(1	)			(14,269	)
				Other income (expense) — net			18,641				28,977				(4,670	)			(42,513	)			435
			Total other income (expense)				7,561				28,977				(7,858	)			(42,514	)			(13,834	)
	Income (loss) before income taxes						(1,931	)			60,253				4,719				(42,625	)			20,416
	Income tax provision (benefit)						(14,592	)			21,304				1,216				(498	)			7,430
			Income from continuing operations				12,661				38,949				3,503				(42,127	)			12,986
		Discontinued operations
			Loss from discontinued operations				—				—				(513	)			—				(513	)
			Income tax benefit				—				—				188				—				188
			Loss from discontinued operations				—				—				(325	)			—				(325	)
				Net income		$	12,661			$	38,949			$	3,178			$	(42,127	)		$	12,661

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			Parent								Non-				Adjustments/
			Company				Guarantors				Guarantors				Eliminations				Consolidated
			In thousands, except per share
ASSETS
Cash and cash equivalents			$	14,404			$	30,615			$	12,390			$	33			$	57,442
Other current assets				90,964				1,936				76,118				(2,903	)			166,115
Plant, equipment and timberlands — net				322,208				13,537				143,083				—				478,828
Other assets				1,065,934				746,701				14,677				(1,484,720	)			342,592
	Total assets		$	1,493,510			$	792,789			$	246,268			$	(1,487,590	)		$	1,044,977
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities			$	75,465			$	2,772			$	61,629			$	12			$	139,878
Long term debt				150,000				—				34,000				—				184,000
Deferred income taxes				174,854				10,585				24,003				(3,173	)			206,269
Other long term liabilities				660,879				36,581				85,441				(700,383	)			82,518
	Total liabilities			1,061,198				49,938				205,073				(703,544	)			612,665
Shareholders’ equity				432,312				742,851				41,195				(784,046	)			432,312
	Total liabilities and shareholders’ equity		$	1,493,510			$	792,789			$	246,268			$	(1,487,590	)		$	1,044,977

				Parent								Non-				Adjustments/
				Company				Guarantors				Guarantors				Eliminations				Consolidated
				In thousands, except per share
ASSETS
Cash and cash equivalents				$	20,399			$	412			$	18,881			$	259			$	39,951
Other current assets					84,279				506				73,970				(254	)			158,501
Plant, equipment and timberlands — net					336,741				14,046				169,625				—				520,412
Other assets					1,009,150				799,379				(50,815	)			(1,424,308	)			333,406
	Total assets			$	1,450,569			$	814,343			$	211,661			$	(1,424,303	)		$	1,052,270
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities				$	66,933			$	7,922			$	29,137			$	15			$	104,007
Long term debt					150,000				—				57,277				—				207,277
Deferred income taxes					176,139				11,218				24,716				1				212,074
Other long term liabilities					637,127				94,546				47,459				(670,590	)			108,542
	Total liabilities				1,030,199				113,686				158,589				(670,574	)			631,900
Shareholders’ equity					420,370				700,657				53,072				(753,729	)			420,370
		Total liabilities and shareholders’ equity		$	1,450,569			$	814,343			$	211,661			$	(1,424,303	)		$	1,052,270

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				Parent												Adjustments/
				Company				Guarantors				Non-Guarantors				Eliminations				Consolidated
				In thousands
Net cash provided (used) by
	Operating Activities			$	28,694			$	42,318			$	(12,497	)		$	(15,647	)		$	42,868
	Investing Activities
		Purchase of plant, equipment and timberlands			(20,319	)			(1,094	)			(9,611	)			—				(31,024	)
		Proceeds from disposal of plant, equipment and timberlands			55				981				21,414				—				22,450
		Proceeds from sale of subsidiary, net of cash divested			—				—				545				—				545
	Total Investing Activities				(20,264	)			(113	)			12,348				—				(8,029	)
	Financing Activities
		Net (repayments of) proceeds from indebtedness			—				—				(4,153	)			3,420				(733	)
		Payment of Dividends			(15,839	)			(12,001	)			0				12,001				(15,839	)
		Proceeds from Stock Options exercised			1,414				—				—				—				1,414
	Total Financing Activities				(14,425	)			(12,001	)			(4,153	)			15,421				(15,158	)
Effect of Exchange Rate on Cash					—				(1	)			(2,189	)			—				(2,190	)
Net Increase (decrease in cash)					(5,995	)			30,203				(6,491	)			(226	)			17,491
Cash at the beginning of period					20,399				412				18,881				259				39,951
Cash at the end of period				$	14,404			$	30,615			$	12,390			$	33			$	57,442

				Parent												Adjustments/
				Company				Guarantors				Non-Guarantors				Eliminations				Consolidated
				In thousands
Net cash provided (used) by
	Operating Activities			$	73,396			$	(5,540	)		$	25,630			$	(53,902	)		$	39,584
	Investing Activities
		Purchase of plant, equipment and timberlands			(10,847	)			(1,123	)			(6,617	)			—				(18,587	)
		Proceeds from disposal of plant, equipment and timberlands			3,826				56,121				224				—				60,171
		Proceeds from sale of subsidiary, net of cash divested			—				—				525				—				525
	Total Investing Activities				(7,021	)			54,998				(5,868	)			—				42,109
	Financing Activities
		Net repayments of indebtedness			(30,000	)			—				(13,049	)			(1,839	)			(44,888	)
		Payment of Dividends			(15,782	)			(56,000	)			—				56,000				(15,782	)
		Proceeds from Stock Options exercised			917				—				—				—				917
	Total Financing Activities				(44,865	)			(56,000	)			(13,049	)			54,161				(59,753	)
Effect of Exchange Rate on Cash					—				—				2,445				—				2,445
Net Increase (decrease in cash)					21,510				(6,542	)			9,158				259				24,385
Cash at the beginning of period					(1,111	)			6,954				9,723				—				15,566
Cash at the end of period				$	20,399			$	412			$	18,881			$	259			$	39,951

	Condensed Consolidating Statement of Cash Flow for the year ended December 31, 2003

				Parent												Adjustments/
				Company				Guarantors				Non- Guarantors				Eliminations				Consolidated
				In thousands
Net cash provided (used) by
	Operating Activities			$	24,089			$	(7,845	)		$	54,785			$	(24,033	)		$	46,996
	Investing Activities
		Purchase of plant, equipment and timberlands			(31,444	)			(1,190	)			(34,124	)			—				(66,758	)
		Proceeds from disposal of plant, equipment and timberlands			1,577				1,263				52				—				2,892
		Proceeds from sale of subsidiary, net of cash divested			—				—				1,499				—				1,499
	Total Investing Activities				(29,867	)			73				(32,573	)			—				(62,367	)
	Financing Activities
		Net (repayments of) proceeds from indebtedness			30,000				—				3,743				(9,867	)			23,876
		Payment of Dividends			(26,879	)			—				(33,900	)			33,900				(26,879	)
		Proceeds from Stock Options exercised			541				—				—				—				541
	Total Financing Activities				3,662				—				(30,157	)			24,033				(2,462	)
	Discontinued Operations				—				—				(304	)			—				(304	)
Effect of Exchange Rate on Cash					—				—				1,484				—				1,484
Net Increase (decrease in cash)					(2,116	)			(7,772	)			(6,765	)			—				(16,653	)
Cash at the beginning of period					1,005				14,726				16,488				—				32,219
Cash at the end of period				$	(1,111	)		$	6,954			$	9,723			$	—			$	15,566

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		Allowance For
														Sales Discounts
		Doubtful Accounts												and Deductions
		2005				2004				2003				2005				2004				2003
		In thousands
Balance, beginning of year		$	2,364			$	3,115			$	2,211			$	2,217			$	2,038			$	1,662
Other(a)			(89	)			24				168				(249	)			162				266
Provision			382				868				1,098				2,788				3,964				1,604
Write-offs, recoveries and discounts allowed			(1,726	)			(1,643	)			(362	)			(2,711	)			(3,947	)			(1,494	)
Balance, end of year		$	931			$	2,364			$	3,115			$	2,045			$	2,217			$	2,038

(a)		Relates primarily to changes in currency exchange rates.

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						Three Months Ended								Six Months Ended
						June 30								June 30
						2006				2005				2006				2005
						(In thousands, except per share)
Net sales						$	279,720			$	145,283			$	440,326			$	289,179
Energy sales — net							2,847				2,715				5,304				5,259
		Total revenues					282,567				147,998				445,630				294,438
Costs of products sold							276,834				128,165				419,632				246,011
		Gross profit					5,733				19,833				25,998				48,427
Selling, general and administrative expenses							25,040				16,974				41,737				34,364
Shutdown and restructuring charges							6,657				—				25,955				—
Gains on dispositions of plant, equipment and timberlands, net							(1,095	)			(21	)			(1,085	)			(81	)
Gains from insurance recoveries							(205	)			(2,200	)			(205	)			(2,200	)
		Operating income (loss)					(24,664	)			5,080				(40,404	)			16,344
Non-operating income (expense)
		Interest expense					(7,170	)			(3,290	)			(10,563	)			(6,550	)
		Interest income					1,126				559				1,792				1,057
		Other — net					(1,896	)			(25	)			(1,546	)			236
			Total other income (expense)				(7,940	)			(2,756	)			(10,317	)			(5,257	)
		Income (loss) before income taxes					(32,604	)			2,324				(50,721	)			11,087
		Income tax provision (benefit)					(11,882	)			615				(18,134	)			3,088
				Net income (loss)		$	(20,722	)		$	1,709			$	(32,587	)		$	7,999
Earnings (loss) per share
	Basic and diluted					$	(0.46	)		$	0.04			$	(0.73	)		$	0.18
Cash dividends declared per common share						$	0.09			$	0.09			$	0.18			$	0.18
Weighted average shares outstanding
	Basic						44,571				43,983				44,392				43,972
	Diluted						44,571				44,294				44,392				44,267

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				June 30				December 31
				2006				2005
				(In thousands)
ASSETS
Current assets
Cash and cash equivalents				$	23,801			$	57,442
Accounts receivable — net					131,206				62,524
Inventories					189,214				81,248
Prepaid expenses and other current assets					35,668				22,343
	Total current assets				379,889				223,557
Plant, equipment and timberlands — net					525,780				478,828
Other assets					375,663				342,592
		Total assets		$	1,281,332			$	1,044,977
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Current portion of long-term debt				$	7,500			$	19,650
Short-term debt					3,142				3,423
Accounts payable					79,849				31,132
Dividends payable					4,025				3,972
Environmental liabilities					4,720				7,575
Other current liabilities					103,225				74,126
	Total current liabilities				202,461				139,878
Long-term debt					378,833				184,000
Deferred income taxes					203,545				206,269
Other long-term liabilities					92,182				82,518
	Total liabilities				877,021				612,665
Commitments and contingencies					—				—
Shareholders’ equity
Common stock					544				544
Capital in excess of par value					41,620				43,450
Retained earnings					507,203				547,810
Deferred compensation					—				(2,295	)
Accumulated other comprehensive loss					(2,049	)			(5,343	)
					547,318				584,166
Less cost of common stock in treasury					(143,007	)			(151,854	)
	Total shareholders’ equity				404,311				432,312
		Total liabilities and shareholders’ equity		$	1,281,332			$	1,044,977

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				Six Months Ended
				June 30
				2006				2005
				(In thousands)
Operating activities
Net income (loss)				$	(32,587	)		$	7,999
Adjustments to reconcile to net cash provided (used) by operations:
	Depreciation, depletion and amortization				24,645				25,656
	Pension income				(7,965	)			(8,246	)
	Shutdown and restructuring charges				50,823				—
	Deferred income tax provision				(8,817	)			2,504
	Gains on dispositions of plant, equipment and timberlands, net				(1,095	)			(81	)
	Expense related to 401(k) plans and other				426				319
Change in operating assets and liabilities
	Accounts receivable				(21,901	)			(6,879	)
	Inventories				(5,274	)			(6,746	)
	Other assets and prepaid expenses				(14,181	)			(2,251	)
	Accounts payable and other liabilities				(15,608	)			(7,364	)
		Net cash (used) provided by operating activities			(31,534	)			4,911
Investing activities
Purchases of plant, equipment and timberlands					(25,250	)			(14,005	)
Proceeds from disposals of plant, equipment and timberlands					1,092				130
Acquisition of Lydney mill and Chillicothe					(151,605	)			—
		Net cash used by investing activities			(175,763	)			(13,875	)
Financing activities
Net borrowings under revolving credit facility					30,901				1,338
Net proceeds from term loan facility					98,269				—
Net proceeds from 71/8% note offering					196,440				—
Repayment of 67/8% notes					(152,675	)			—
Payment of dividends					(7,967	)			(7,914	)
Proceeds from stock options exercised					7,314				116
	Net cash provided (used) by financing activities				172,282				(6,460	)
	Effect of exchange rate changes on cash				1,374				(1,878	)
	Net decrease in cash and cash equivalents				(33,641	)			(17,302	)
	Cash and cash equivalents at the beginning of period				57,442				39,951
	Cash and cash equivalents at the end of period			$	23,801			$	22,649
Supplemental cash flow information
Cash paid for
	Interest expense			$	11,648			$	6,327
	Income taxes				17,057				12,198

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			(In thousands)
Assets acquired:
Inventory			$	9,131
Property and equipment				56,252
Intangibles and other assets				3,537
				68,920
Less acquisition related liabilities				(1,020	)
	Total		$	67,900

			(In thousands)
Assets acquired:
Accounts Receivable			$	44,456
Inventory				93,082
Other current assets				982
Other non-current assets				12,626
				151,146
Less acquisition related liabilities, including accounts payable and accrued expenses				(63,803	)
	Total		$	87,343

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							Expected in the
							Third & Fourth
			Six Months				Quarters of 2006
			Ended
			June 30, 2006				LOW				HIGH
			(In thousands)
Accelerated depreciation			$	22,457
Inventory write-down				2,411
Severance and benefit continuation				6,592
Pension curtailments and other retirement benefit charges				7,675
Contract termination costs				11,386
Other				222			$	2,500			$	4,000
	Total		$	50,743			$	2,500			$	4,000

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			Three Months Ended
			June 30
			2006				2005
			(In thousands, except
			per share)
Net (loss) income			$	(20,722	)		$	1,709
Weighted average common shares outstanding used in basic EPS				44,571				43,983
Common shares issuable upon exercise of dilutive stock options, restricted stock awards and performance awards				—				311
Weighted average common shares outstanding and common share equivalents used in diluted EPS				44,571				44,294
Earnings (loss) per share
	Basic and diluted		$	(0.46	)		$	0.04

			Six Months Ended
			June 30
			2006				2005
			(In thousands, except
			per share)
Net (loss) income			$	(32,587	)		$	7,999
Weighted average common shares outstanding used in basic EPS				44,392				43,972
Common shares issuable upon exercise of dilutive stock options, restricted stock awards and performance awards				—				295
Weighted average common shares outstanding and common share equivalents used in diluted EPS				44,392				44,267
Earnings (loss) per share
	Basic and diluted		$	(0.73	)		$	0.18

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		Three Months Ended
		June 30
		2006				2005
		(In thousands)
Pension Benefits
Service cost		$	1,650			$	817
Interest cost			5,402				4,149
Expected return on plan assets			(11,846	)			(9,966	)
Amortization of prior service cost			433				922
Recognized actuarial (gain) loss			117				(288	)
			(4,244	)			(4,366	)
Curtailment charge			1,372				—
Net periodic benefit income		$	(2,872	)		$	(4,366	)
Other Benefits
Service cost		$	449			$	279
Interest cost			780				699
Amortization of prior service cost			(167	)			(186	)
Recognized actuarial (gain) loss			329				351
Net periodic benefit cost		$	1,391			$	1,143

		Six Months Ended
		June 30
		2006				2005
		(In thousands)
Pension Benefits
Service cost		$	2,679			$	1,864
Interest cost			9,648				8,309
Expected return on plan assets			(21,766	)			(19,707	)
Amortization of prior service cost			916				1,035
Recognized actuarial (gain) loss			558				253
			(7,965	)			(8,246	)
Curtailment charge			4,403				—
Net periodic benefit income		$	(3,562	)		$	(8,246	)
Other Benefits
Service cost		$	754			$	568
Interest cost			1,434				1,347
Amortization of prior service cost			(375	)			(370	)
Amortization of unrecognized loss			648				664
			2,461				2,209
Special termination charge			3,273				—
Net periodic benefit cost		$	5,734			$	2,209

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		Three Months Ended
		June 30
		2006				2005
		(In thousands)
Net income (loss)		$	(20,722	)		$	1,709
Foreign currency translation adjustment			1,383				(5,602	)
Comprehensive loss		$	(19,339	)		$	(3,893	)

		Six Months Ended
		June 30
		2006				2005
		(In thousands)
Net income (loss)		$	(32,587	)		$	7,999
Foreign currency translation adjustment			3,294				(8,841	)
Comprehensive loss		$	(29,293	)		$	(842	)

			June 30,				December 31,
			2006				2005
			(In thousands)
Raw materials			$	32,650			$	16,392
In-process and finished				108,968				39,930
Supplies				47,596				24,926
	Total		$	189,214			$	81,248

		June 30,				December 31,
		2006				2005
		(In thousands)
New revolving credit facility, due April 2011		$	52,893			$	—
Term loan, due April 2011			99,440				—
Revolving credit facility, due June 2006			—				19,650
71/8% Notes, due May 2016			200,000				—
67/8% Notes, due July 2007			—				150,000
Note payable — SunTrust, due March 2008			34,000				34,000
Total long-term debt			386,333				203,650
Less current portion			(7,500	)			(19,650	)
Long-term debt, excluding current portion		$	378,833			$	184,000

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		(In thousands)
2006		$	—
2007			15,000
2008			54,000
2009			25,000
2010			25,000
Thereafter			267,333

			Ecusta
			Environmental				Workers’
			Matters				Comp				Other				Total
							(In thousands)
Balance, Jan. 1, 2005			$	6,391			$	2,144			$	3,300			$	11,835
Accruals				—				—				—				—
Payments				(591	)			(14	)			—				(605	)
Other Adjustments				—				—				—				—
	Balance, June 30, 2005		$	5,800			$	2,130			$	3,300			$	11,230
Balance, Jan. 1, 2006			$	8,105			$	1,913			$	3,300			$	13,318
Accruals				—				—				—				—
Payments				(478	)			(152	)			—				(630	)
Other Adjustments				16				—				—				16
	Balance, June 30, 2006		$	7,643			$	1,761			$	3,300			$	12,704

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	i. mercury and certain other contamination on and around the site;
	ii. potentially hazardous conditions existing in the sediment and water column of the site’s water treatment and aeration and sedimentation basin (the “ASB”); and
	iii. contamination associated with two additional landfills on the site that were not used by us.

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			June 30,				December 31,
			2006				2005
			(In millions)
Recorded as:
Environmental liabilities			$	4.7			$	7.6
Other long-term liabilities				7.2				9.2
	Total		$	11.9			$	16.8

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			For The Three Months Ended June 30,
											Composite								Other and
			Specialty Papers								Fibers								Unallocated								Total
Business Unit Performance			2006				2005				2006				2005				2006				2005				2006				2005
			(In thousands)
Net sales			$	203,461			$	94,497			$	76,263			$	50,779			$	(4	)		$	7			$	279,720			$	145,283
Energy sales, net				2,847				2,715				—				—				—				—				2,847				2,715
	Total revenue			206,308				97,212				76,263				50,779				(4	)			7				282,567				147,998
Cost of products sold				197,459				89,202				66,693				42,831				12,682				(3,868	)			276,834				128,165
	Gross profit (loss)			8,849				8,010				9,570				7,948				(12,686	)			3,875				5,733				19,833
SG&A				14,705				9,707				6,504				6,125				3,831				1,142				25,040				16,974
Shutdown and restructuring charges				—				—				—				—				6,657				—				6,657				—
Gains on dispositions of plant, equipment and timberlands				—				—				—				—				(1,095	)			(21	)			(1,095	)			(21	)
Gain on insurance recoveries				—				—				—				—				(205	)			(2,200	)			(205	)			(2,200	)
	Total operating income (loss)			(5,856	)			(1,697	)			3,066				1,823				(21,874	)			4,954				(24,664	)			5,080
Nonoperating income (expense)				—				—				—				—				(7,940	)			(2,756	)			(7,940	)			(2,756	)
Income (loss) before income taxes			$	(5,856	)		$	(1,697	)		$	3,066			$	1,823			$	(29,814	)		$	2,198			$	(32,604	)		$	2,324
Supplementary Data
Net tons sold				188,854				111,205				17,667				12,048				10				2				206,531				123,255
Depreciation expense			$	7,679			$	9,000			$	4,493			$	3,790				—				—			$	12,172			$	12,790

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			For The Six Months Ended June 30,
																			Other and
			Specialty Papers								Composite Fibers								Unallocated								Total
Business Unit Performance			2006				2005				2006				2005				2006				2005				2006				2005
			(In thousands)
Net sales			$	305,810			$	187,227			$	134,516			$	101,924			$	—			$	28			$	440,326			$	289,179
Energy sales, net				5,304				5,259				—				—				—				—				5,304				5,259
	Total revenue			311,114				192,486				134,516				101,924				—				28				445,630				294,438
Cost of products sold				286,493				169,353				115,722				84,041				17,417				(7,383	)			419,632				246,011
	Gross profit (loss)			24,621				23,133				18,794				17,883				(17,417	)			7,411				25,998				48,427
SG&A				23,987				20,069				12,585				12,270				5,165				2,025				41,737				34,364
Shutdown and restructuring charges				—				—				—				—				25,955				—				25,955				—
Gains on dispositions of plant, equipment and timberlands				—				—				—				—				(1,085	)			(81	)			(1,085	)			(81	)
Gain on insurance recoveries				—				—				—				—				(205	)			(2,200	)			(205	)			(2,200	)
	Total operating income (loss)			634				3,064				6,209				5,613				(47,247	)			7,667				(40,404	)			16,344
Nonoperating income (expense)				—				—				—				—				(10,317	)			(5,257	)			(10,317	)			(5,257	)
Income (loss) before income taxes			$	634			$	3,064			$	6,209			$	5,613			$	(57,564	)		$	2,410			$	(50,721	)		$	11,087
Supplementary Data
Net tons sold				307,940				221,943				32,552				23,727				10				7				340,502				245,677
Depreciation expense			$	16,354			$	17,869			$	8,291			$	7,787				—				—			$	24,645			$	25,656

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						Parent								Non				Adjustments/
						Company				Guarantors				Guarantors				Eliminations				Consolidated
						(In thousands)
Net sales						$	203,462			$	8,567			$	76,258			$	(8,567	)		$	279,720
Energy sales — net							2,847				—				—				—				2,847
		Total revenues					206,309				8,567				76,258				(8,567	)			282,567
Costs of products sold							210,588				7,822				66,875				(8,451	)			276,834
		Gross profit					(4,279	)			745				9,383				(116	)			5,733
Selling, general and administrative expenses							17,487				987				6,566				—				25,040
Shutdown and restructuring charges							6,616				—				41				—				6,657
Gains on dispositions of plant, equipment and timberlands, net							34				(1,129	)			—				—				(1,095	)
Gains from insurance recoveries							(205	)			—				—				—				(205	)
		Operating income					(28,211	)			887				2,776				(116	)			(24,664	)
	Non-operating income (expense)
			Interest expense				(6,154	)			(463	)			(553	)			—				(7,170	)
			Other income (expense) — net				(3,328	)			13,968				(1,229	)			(10,181	)			(770	)
		Total other income (expense)					(9,482	)			13,505				(1,782	)			(10,181	)			(7,940	)
	Income (loss) before income taxes						(37,693	)			14,392				994				(10,297	)			(32,604	)
	Income tax provision (benefit)						(16,971	)			5,198				287				(396	)			(11,882	)
				Net income (loss)		$	(20,722	)		$	9,194			$	707			$	(9,901	)		$	(20,722	)

						Parent								Non				Adjustments/
						Company				Guarantors				Guarantors				Eliminations				Consolidated
						(In thousands)
Net sales						$	94,489			$	8,626			$	50,816			$	(8,648	)		$	145,283
Energy sales — net							2,715				—				—				—				2,715
		Total revenues					97,204				8,626				50,816				(8,648	)			147,998
Costs of products sold							85,369				8,300				42,956				(8,460	)			128,165
		Gross profit					11,835				326				7,860				(188	)			19,833
Selling, general and administrative expenses							10,287				520				6,167				—				16,974
Shutdown and restructuring charges							—				—				—				—				—
Gains on dispositions of plant, equipment and timberlands, net							8				(68	)			39				—				(21	)
Gains from insurance recoveries							(2,200	)			—				—				—				(2,200	)
		Operating income					3,740				(126	)			1,654				(188	)			5,080
	Non-operating income (expense)
			Interest expense				(2,703	)			—				(587	)			—				(3,290	)
			Other income (expense) — net				(1,824	)			9,940				(355	)			(7,227	)			534
		Total other income (expense)					(4,527	)			9,940				(942	)			(7,227	)			(2,756	)
	Income (loss) before income taxes						(787	)			9,814				712				(7,415	)			2,324
	Income tax provision (benefit)						(2,496	)			3,372				230				(491	)			615
				Net income		$	1,709			$	6,442			$	482			$	(6,924	)		$	1,709

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						Parent								Non				Adjustments/
						Company				Guarantors				Guarantors				Eliminations				Consolidated
						(In thousands)
Net sales						$	305,809			$	18,207			$	134,517			$	(18,207	)		$	440,326
Energy sales — net							5,304				—				—				—				5,304
		Total revenues					311,113				18,207				134,517				(18,207	)			445,630
Costs of products sold							305,406				16,199				115,998				(17,971	)			419,632
		Gross profit					5,707				2,008				18,519				(236	)			25,998
Selling, general and administrative expenses							27,248				1,426				13,063				—				41,737
Shutdown and restructuring charges							25,875				—				80				—				25,955
Gains on dispositions of plant, equipment and timberlands, net							80				(1,202	)			37				—				(1,085	)
Gains from insurance recoveries							(205	)			—				—				—				(205	)
		Operating income					(47,291	)			1,784				5,339				(236	)			(40,404	)
	Non-operating income (expense)
			Interest expense				(8,956	)			(463	)			(1,144	)			—				(10,563	)
			Other income (expense) — net				(4,245	)			25,861				(1,926	)			(19,444	)			246
		Total other income (expense)					(13,201	)			25,398				(3,070	)			(19,444	)			(10,317	)
	Income (loss) before income taxes						(60,492	)			27,182				2,269				(19,680	)			(50,721	)
	Income tax provision (benefit)						(27,905	)			9,750				779				(758	)			(18,134	)
				Net income (loss)		$	(32,587	)		$	17,432			$	1,490			$	(18,922	)		$	(32,587	)

						Parent								Non				Adjustments/
						Company				Guarantors				Guarantors				Eliminations				Consolidated
						(In thousands)
Net sales						$	187,211			$	17,726			$	102,007			$	(17,765	)		$	289,179
Energy sales — net							5,259				—				—				—				5,259
		Total revenues					192,470				17,726				102,007				(17,765	)			294,438
Costs of products sold							162,687				16,653				84,572				(17,901	)			246,011
		Gross profit					29,783				1,073				17,435				136				48,427
Selling, general and administrative expenses							20,992				1,014				12,358				—				34,364
Shutdown and restructuring charges							—				—				—				—				—
Gains on dispositions of plant, equipment and timberlands, net							18				(129	)			30				—				(81	)
Gains from insurance recoveries							(2,200	)			—				—				—				(2,200	)
		Operating income					10,973				188				5,047				136				16,344
	Non-operating income (expense)
			Interest expense				(5,395	)			—				(1,155	)			—				(6,550	)
			Other income (expense) — net				(2,223	)			19,639				(619	)			(15,504	)			1,293
		Total other income (expense)					(7,618	)			19,639				(1,774	)			(15,504	)			(5,257	)
	Income (loss) before income taxes						3,355				19,827				3,273				(15,368	)			11,087
	Income tax provision (benefit)						(4,644	)			6,926				1,184				(378	)			3,088
				Net income (loss)		$	7,999			$	12,901			$	2,089			($	14,990	)		$	7,999

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			Parent								Non				Adjustments/
			Company				Guarantors				Guarantors				Eliminations				Consolidated
			(In thousands)
ASSETS
Current assets
Cash and cash equivalents			$	(3	)		$	701			$	23,103			$	—			$	23,801
Other current assets				235,286				9,337				103,176				8,289				356,088
Plant, equipment and timberlands — net				306,070				13,510				206,200				—				525,780
Other assets				1,246,280				905,255				(64,917	)			(1,710,955	)			375,663
	Total assets		$	1,787,633			$	928,803			$	267,562			$	(1,702,666	)		$	1,281,332
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities			$	164,111			$	4,080			$	34,270			$	—			$	202,461
Long-term debt				300,075				—				78,758				—				378,833
Deferred income taxes				176,729				13,972				22,774				(9,930	)			203,545
Other long-term liabilities				742,407				68,350				89,843				(808,418	)			92,182
	Total liabilities			1,383,322				86,402				225,645				(818,348	)			877,021
Shareholders’ equity				404,311				842,401				41,917				(884,318	)			404,311
	Total liabilities and shareholders’ equity		$	1,787,633			$	928,803			$	267,562			$	(1,702,666	)		$	1,281,332

				Parent								Non				Adjustments/
				Company				Guarantors				Guarantors				Eliminations				Consolidated
				(In thousands)
ASSETS
Current assets
Cash and cash equivalents				$	14,404			$	30,615			$	12,390			$	33			$	57,442
Other current assets					90,964				1,936				76,118				(2,903	)			166,115
Plant, equipment and timberlands — net					322,208				13,537				143,083				—				478,828
Other assets					1,065,934				746,701				14,677				(1,484,720	)			342,592
		Total assets		$	1,493,510			$	792,789			$	246,268			$	(1,487,590	)		$	1,044,977
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities				$	75,465			$	2,772			$	61,629			$	12			$	139,878
Long-term debt					150,000				—				34,000				—				184,000
Deferred income taxes					174,854				10,585				24,003				(3,173	)			206,269
Other long-term liabilities					660,879				36,581				85,441				(700,383	)			82,518
	Total liabilities				1,061,198				49,938				205,073				(703,544	)			612,665
Shareholders’ equity					432,312				742,851				41,195				(784,046	)			432,312
		Total liabilities and shareholders’ equity		$	1,493,510			$	792,789			$	246,268			$	(1,487,590	)		$	1,044,977

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				Parent								Non				Adjustments/
				Company				Guarantors				Guarantors				Eliminations				Consolidated
				(In thousands)
Net cash provided (used) by
	Operating Activities			$	(57,332	)		$	36,535			$	(12,954	)		$	2,217			$	(31,534	)
	Investing Activities
		Purchase of plant, equipment and timberlands			(22,233	)			(480	)			(2,537	)							(25,250	)
		Proceeds from disposal plant, equipment and timberlands			14				1,075				3				—				1,092
		Acquisition of Lydney mill and Chillicothe			(84,561	)			(67,044	)			—				—				(151,605	)
	Total Investing Activities				(106,780	)			(66,449	)			(2,534	)			—				(175,763	)
	Financing Activities
		Net (repayments of) proceeds from indebtedness			150,358				—				24,827				(2,250	)			172,935
		Payment of Dividends			(7,967	)			—				—				—				(7,967	)
		Proceeds from Stock Options exercised			7,314				—				—				—				7,314
	Total Financing Activities				149,705				—				24,827				(2,250	)			172,282
Effect of Exchange Rate on Cash					—				—				1,374				—				1,374
Net Increase (decrease) in cash					(14,407	)			(29,914	)			10,713				(33	)			(33,641	)
Cash at the beginning of period					14,404				30,615				12,390				33				57,442
Cash at the end of period				$	(3	)		$	701			$	23,103			$	—			$	23,801

				Parent								Non				Adjustments/
				Company				Guarantors				Guarantors				Eliminations				Consolidated
				(In thousands)
Net cash provided (used) by
	Operating Activities			$	480			$	371			$	7,575			$	(3,515	)		$	4,911
	Investing Activities
		Purchase of plant, equipment and timberlands			(8,180	)			(638	)			(5,187	)			—				(14,005	)
		Proceeds from disposal plant, equipment and timberlands			130				—				—				—				130
		Acquisition of Lydney mill and Chillicothe			—				—				—				—				—
	Total Investing Activities				(8,050	)			(638	)			(5,187	)			—				(13,875	)
	Financing Activities
		Net (repayments of) proceeds from indebtedness			—				—				(1,918	)			3,256				1,338
		Payment of Dividends			(7,914	)			—				—				—				(7,914	)
		Proceeds from Stock Options exercised			116				—				—				—				116
	Total Financing Activities				(7,798	)			—				(1,918	)			3,256				(6,460	)
Effect of Exchange Rate on Cash					—				—				(1,878	)			—				(1,878	)
Net decrease in cash					(15,368	)			(267	)			(1,408	)			(259	)			(17,302	)
Cash at the beginning of period					20,399				412				18,881				259				39,951
Cash at the end of period				$	5,031			$	145			$	17,473			$	—			$	22,649

F-66