Jay Royalty - VP, Investor Relations Mark Sutton - Chairman & CEO Carol Roberts - SVP & CFO Mike Amick - SVP, North American Papers, Pulp and Consumer Packaging Tom Kadien - SVP, Human Resources, Communications & Government Relations.

George Staphos - Bank of America/Merrill Lynch Mark Weintraub - Buckingham Research Gail Glazerman - UBS Philip Ng - Jefferies Al Kabili - Macquarie Securities Mark Wilde - Bank of Montreal Ontario Alex Ovshey - Goldman Sachs Adam Josephson - KeyBanc Capital Markets Chip Dillon - Vertical Research Partners Chris Manuel - Wells Fargo Securities Steve Chercover - D.A.

Davidson Scott Gaffner - Barclays Capital Paul Quinn - RBC Capital Markets. Debbie Jones - Deutsche Bank Anthony Pettinari - Citigroup.

Good morning and welcome to the Fourth Quarter and Full-Year 2014 International Paper Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. I’ll now the transfer this call over to your host, Jay Royalty, Vice President, Investor Relations.

Please go ahead. .

Thanks, Stephanie. Good morning everyone. And thank you for joining International Paper's Fourth Quarter and Full-Year 2014 Earnings Conference Call. Our key speakers this morning are Mark Sutton, Chairman and Chief Executive Officer; and Carol Roberts, Senior Vice President and Chief Financial Officer.

During this call, we will make forward-looking statements that are subject to risks and uncertainties, which are outlined on slide two of our presentation. We will also present certain non-U.S. GAAP financial information. A reconciliation of those figures to U.S. GAAP financial measures are available on our website.

Our website also contains copies of the Fourth Quarter and 2014 earnings press release and today's presentation slides. Lastly relative to the Ilim JV, slide four provides context around the joint ventures, financial information and statistical measures. With that, I'll now turn the call over to Mark Sutton. .

Thank you, Jay and good morning everyone and thank you for joining our call. What I would like to do is quickly go over the format that we’ll follow this morning. In the beginning, I’ll review our Full Year 2014 results, and then turn it over to Carol Roberts to speak to the fourth quarter and the performances of our individual businesses.

And then we’ll come back and cover the first quarter and 2015 outlook before opening it up to questions. So I am on slide five looking at 2014 full-year results. International Paper completed a strong year in 2014. We delivered record cash flow from operations of $3.4 billion along with free cash flow of $2.1 billion.

North American Industrial Packaging results were significant with the business achieving $2.7 billion in EBITDA and margins of 24%. Return on Invested Capital was 9.2% making this the fifth consecutive year that our returns have exceeded our cost of capital. And additionally we saw margin expansion across all of our key businesses in 2014.

We conducted a successful debt restructuring program in which we pushed out a billion dollars of debt from 2018 and 2019. And we achieved more than $40 million in annualized interest savings as a result. In the fall, we increased our dividend by 14% to $1.60 per share, which was the third year in a row of double-digit dividend increases.

For the year we bought back roughly $1 billion of IP stocks at a little over $47 a share. We completed the closure of the Courtland Alabama printing papers mill, which, as we’ve mentioned was very difficult for us to do, especially with the impact on our employees.

But we believe, it was necessary given the ongoing decline in North American uncoated free sheet demands. We completed the spinoff of our North American Distribution business xpedx and received $400 million as it became part of the new publicly traded company Veritiv.

And the Russian JV, Ilim, which we own 50% had a solid year improving operational EBITDA by a 126% to $470 million for the full year. And we received a dividend of $56 million in 2014 from Ilim. Turning to the full-year financial results, IP achieved solid improvement across the board.

Full year earnings-per-share finished at $3 per share and included in this figure is $0.63 of Ilim FX negative impact. Absent this impact our EPS was up 20% year-over-year and we’ll talk more about that in a minute. Turning to slide seven, which is a history of our Return on Invested Capital.

As I mentioned for 2014 our return was 9.2%, again the fifth year in a row that we're above cost of capital. We continue to deliver on our commitment to create value for our shareholders.

I’d also note that if you consider the impact to the equity earnings of the Ilim FX charge I mentioned earlier, which was a non-cash charge, our ROIC would have been over 10% for 2014 and that would have been a best ever mark for the company.

Turning to slide eight, 2014’s free cash flow of $2.1 billion continued a strong trend of free cash flow results since 2008. Beyond strong earnings from the businesses, our cash flow performance in 2014 benefited from strong working capital management in the fourth quarter.

As we look to 2015 and beyond, we remain confident that IP can continue to deliver strong free cash flow in the years ahead. And turning to the uses of that cash, we continue to do what we said we would do. In total, we returned $1.6 billion or more than 75% of our free cash flow to shareholders throughout 2014.

And additionally, we finished the year with a cash balance of $1.9 billion. And with that overview of the full year, I’ll turn it over to Carol and then I'll return later to talk about the outlook and then we’ll open it up for questions.

Carol?.

Thanks, Mark and good morning everyone. Turning to slide ten, looking at the year-over-year bridge for 2014, you can see year-over-year price improvement was significant at $0.89 with about 60% of this coming from our North American Industrial Packaging business, 30% from Printing Papers and the balance came from our Consumer Packaging segment.

In aggregate volume was down and this was mostly due to the volume decline in North American Printing Papers as Mark said largely driven by the Courtland mill shutdown. Overall our operations performed well for the year.

Looking at input costs, they were a $141 million higher due to the stubbornly and consistently high wood costs that we saw throughout the year.

Energy costs were higher as well, largely driven by the very low levels that we saw in 2013 and also impacted by the significant weather that we experienced in the first quarter of 14, and the lingering impact that, that had on energy costs through the first half of the year. These were partially offset by lower chemical costs.

Taxes were higher in 2014 by about 5% and that was due to fewer tax benefits in 14 versus what we experienced in 2013. And finally we had a significant non-cash Ilim FX hit in 2014 as Mark pointed out of $0.63 per share. But most importantly we saw a substantial improvement in the business, in the operations as you can see in the call-out box.

And this is attributable to the continued post project ramp up as well other efficiency improvements and margin expansion that resulted in operational EBITDA more than doubling from the prior year. So as Mark stated when you exclude the Ilim non-cash FX charge we enjoyed an EPS improvement of more than 20% in 2014.

Turning to the results for the fourth quarter, as Mark said IP delivered record free cash flow for the year and it was no different in the quarter with $739 million of free cash flow. And this came from solid performance across all our key businesses, as well as strong working capital management in the quarter.

We benefited from stronger North American Box demand, but this was muted by weaker global conditions in a number of our segments. We did see some benefit from lower input costs in the quarter and operating results at the Ilim JV were strong.

Although as we said the JV did experience a large non-cash FX charge of $0.40 in the quarter itself, and this reduced our fourth-quarter EPS to $0.53 per share. Additionally, we repurchased a 170 million of our shares in the fourth quarter bringing the total purchases since September of 2013 to $1.44 billion.

Moving to slide twelve, taking a look at the quarter-over-quarter bridge I’ll highlight a few key items. On volume, results were better for the quarter as the North American Box volume exceeded our expectations on stronger daily demand.

Operations and cost were unfavorable quarter-over-quarter largely due to some isolated issues at a few of our mills in the US. The issue we had at our mill in France and an issue we had at one of our mills in Brazil.

Additionally the fourth quarter is typically a more expensive operating quarter due to the onset of colder weather and some other seasonal costs that we see. Transportation rates across all our North American businesses were higher due to tight rail and truck markets. And year end true-up expenses were higher in the quarter as well.

Regarding corporate expenses there was a non-cash FX charge for the administrative restructuring of an international entity for which we took a one-time hit. As I said Ilim operational results improved in the quarter while we also experienced the large negative non-cash FX charge associated with JV US denominated debt.

As I mentioned on the prior slide, EPS for the quarter would have been $0.40 higher in the absence of this non-cash FX impact. So turning to Industrial Packaging on slide thirteen, despite three fewer shipping days in the quarter volume was flat as the daily rate for box demand was at its strongest level of the year.

Pricing and aggregate was down slightly, primarily driven by pressure on exports due to seasonality and a weaker euro. Operations were unfavorable for the quarter primarily driven by isolated issues at our Orange, Texas and Newport, Indiana mills.

And as I mentioned transportation costs were higher as well as truck and rail rates increased due to pretty -- a very tight market condition. We also experienced higher benefit costs and other expenses due to some year-end true ups, and we had several one-off expenses that at our Brazil Packaging business.

Maintenance outage expenses were higher as well, but we had clearly expected that. And then finally on input costs, they were modestly lower as we saw lower expenses for energy, OCC and diesel that were offset by some higher utility costs.

And we had a major event at the steam provider for our Newport, Indiana mill that resulted in our need to pay some premium pricing for energy to sustain mill operations throughout the quarter.

I think slide fourteen is just a great picture which shows the track record of results that we've been able to achieve in our North American Industrial Packaging business for the last ten years. In 2014 the business achieved $2.7 billion in EBITDA, 24% margins.

We're very proud of this business and of all of our colleagues in the Industrial Packaging business, and the job they have done to achieve, sustain, and build on these industry-leading results.

And this has really been done through delivering real value to our customers, great operating performance and quite honestly a commitment to excellence and to continue to improve.

Moving to Consumer Packaging, seasonally lower demand in solid operating performance and a desire to manage our inventories very closely resulted in the need for some market-related downtime in the quarter to match production to our customers’ demand.

Results were also impacted by higher maintenance outage expenses and some unfavorable FX impact in our European and China business. The business did see some benefit from lower input costs for wood, energy and fuel. Moving on to Printing Papers on slide sixteen, volume was seasonally stronger in Brazil and Russia.

Pricing and mix were slightly unfavorable for the quarter as less favorable pulp mix and pricing pressure in Europe were partially offset by a seasonally stronger mix in Brazil.

Maintenance outages were higher as expected and operations were unfavorable due to higher operating expenses in North American papers, and higher costs associated with reliability issues at our Mogi Guaçu mill in Brazil and our Saillat mill in France. Higher year-end benefit costs in Brazil impacted our results as well.

And once again as in the other businesses input costs were favorable on our Paper segment. Slide seventeen kind of highlights IP’s year-over-year change in operating profits by region for the Printing Papers business.

In North America Printing Papers improved by $2 million which you have to point out is significant when you consider the $40 million charge of additional expenses that we incurred in 2014 related to the Courtland closure.

The North American Pulp business had a good year with improved earnings of $55 million driven by higher volume, improved operations and improved pricing and mix associated with a higher percentage of Fluff Pulp. Brazil was flat, really not surprising given the economic headwinds we’ve experienced there.

And Europe was down $27 million on less favorable pricing and mix, higher input costs partially offset by lower outage expenses. Earnings in India improved $10 million year-over-year driven by improved pricing and lower operational and maintenance outage expenses.

Now turning to the Ilim JV on slide eighteen, a good quarter of operating and margin performance which was offset by the large non-cash FX charge related to the JV’s US dollar-denominated debt. Volume was up 12% for the quarter, operational EBITDA increased to a $143 million.

When looking at the full-year results, volume was up 19% to almost 3.2 million tons. Operational EBITDA improved from $208 million in 2013 to $470 million in 2014.

These improvements were largely attributable to the ramp-up of the major JV funded capital projects of both at the Koryazhma mill and the Bratsk mill as well as other efficiency improvements made by the Ilim team.

Due to the significant devaluation of the ruble, which we saw late in the fourth quarter, the JV expects to see further margin expansion in the first quarter. And again simply put, most of our costs, 95% of our costs are in rubles, and 65% of our sales are in dollars, which gives us this opportunity for margin expansion.

It is worth noting that with that devaluation of the currency, we will see rising inflation in 2015 and that also has a potential to create some pressure on pulp pricing. So it will be very important for the team at Ilim to closely manage operations and costs as they go into 2015.

As we step back and look at the many reasons we like our investment in Ilim, our partnership with Ilim at the top of the list is how the JV is so well positioned to serve the most significant and fastest growing pulp market in the world, China.

The JV’s pulp operations in Siberia are uniquely located with favorable access to the vast Russian wood basket and importantly with access to mainland China by rail, a straight south from where the mill sits.

The JV will benefit from the recent significant devaluation in the ruble which has positioned the softwood pulp operation as the lowest cost on the globe. And there's more potential as we continue to improve the operational performance of the business. So before I turn to the outlook I’d like to give you an update on our balance sheet.

And some of the impacts that we've had are due to the lower discount rates along with a change to mortality tables that came about last year and that we’ve implemented into our liability accounting. We did see our pension gap grow to $3.9 billion as of the end of 2014. In the year we made roughly a $350 million in required pension contributions.

And this contribution looks to be maybe about a $100 million in 2015, not yet totally decided but certainly much less than what we had previously anticipated.

As you recall, we executed a significant bond issue and tender offer that Mark mentioned this year that enabled us to move out about a billion dollars of debt from 18 and 19 which were our largest towers along with realizing roughly a $40 million annualized interest saving. And we ended the year with a cash balance of $1.9 billion.

So on twenty one, turning to the outlook for the first quarter. Volume will be largely flat across most of our businesses with the exception of Russia and Brazil, where there is a normal seasonal decrease. The seasonal decrease in Brazil is coming off of the strongest quarter of the year, which is the fourth quarter.

And this typically will result in about a third less volume for Brazil domestically, so about a $30 million negative swing quarter-over-quarter. We expect pricing to be fairly stable across most geographies with the exception of Europe, where pressure continues in the paper side due to continued economic challenges.

We expect improved operating performance in North American Industrial Packaging as the isolated issues we experienced in the fourth quarter are behind us. And we have a similar expectation for improved performance at our Mogi Guaçu mill in Brazil as well as the Saillat mill in France.

We do expect some modest offsets from North American Consumer Package as operation and costs move back to a more typical first-quarter level.

Input costs should trend favorably due to lower energy and fuel costs, but we are seeing some offset of that due to increasing transportation rates, due to the tight conditions both in the rail and the truck markets. And energy consumption in North America will be higher as well due to the normal winter condition.

Maintenance outage expenses are expected to increase in the quarter, $14 million. We assume operations at the Ilim JV will continue to perform favorably and as usual we are not attempting to forecast the ruble. The assumption of flat FX coming out of the fourth quarter would result in a $0.40 positive swing for the first quarter.

But based upon what we're seeing to date, there's likely some additional negative impact in the first quarter depending on how the ruble ends the quarter. And we expect the tax rate to increase modestly to 33% on higher US earnings in the absence of tax extenders which we saw in the fourth quarter of 14.

And finally we expect corporate expense to return to the normalized rate of roughly $15 million in the quarter. So with that, let me turn it back over to Mark. .

Thank you, Carol. I am on slide twenty two now and what I would like to do is make a couple of comments about how we see 2015 as we enter the year. You know I’d like to turn your attention to the slide, and it’s a lot of information on the slide.

Basically what we're trying to do here is take a look at growth rates, GDP rates in the regions that we operate comparing them, 15 to 14. And as you can see from the chart we see a few more headwinds and tailwinds. But a reminder, 80% plus of our EBITDA is generated in the US, and we see a stronger US market.

So that really helps a lot in North America. This is the market that drives our results, and we saw in a number of businesses some improved demand environment as we exited 2014. In the markets that are most challenged as we enter 2015, Carol spoke about Russia and the challenges domestically in Russia.

However, with our leverage as an exporter we think we can navigate that environment. We didn’t talk a lot about Brazil, but Brazil is in a difficult position right now. Again our paper businesses in Brazil is well positioned to win in those markets. We provide product in Brazil, but also in the region.

Our packaging business is mostly about Brazil and of course that will be more impacted, but we do see some improvement opportunities there. And the bottom line is we’ve built a company that's got exposure in a number of markets.

We're nimble, we're ready and able to deal with a variety of macro conditions that might occur in any given year and we will work very hard to offset headwinds in one area with hopefully tailwinds in another.

As we turn to our expectations for 2015, we see continued progress and strong results despite the macro environment that I just described as remaining challenging. As we showed earlier in the presentation deck, we delivered consistently strong results in both ROIC and free cash flow for the last several years.

And I believe we will do the same again in 2015. We see the opportunity to grow our EBITDA by roughly 5% by executing the plans we currently have in place for our key businesses.

Along with this expected increase in EBITDA, free cash flow is likely to be impacted by things like higher cash taxes as a result of higher earnings from the US operations I talked about, also as a result of changing and lower tax credits and a few non-repeat deductible events.

Relative to how we're thinking about CapEx, our target for 2015 is 1.5 billion. The intent is to continue to find a higher percentage of our high-return projects that will enable IP to continue to grow earnings, free cash flow and our returns.

Some recent examples of these higher return projects are our foodservice expansion in Kenton, Ohio and the restart of our Valliant number three paper machine which we shared with you in a prior quarter. So thinking about the key leverage that will enable the EBITDA growth for 2015, here are a few I’d like to highlight and I am on slide twenty four.

We’ve a great opportunity to continue to optimize the North American Industrial Packaging system with the ramp down of our DOJ required purchases from the mills that we divested as part of the Temple-Inland acquisition, and the restart of the Valliant machines.

Those two events allow us to optimize our system even further and again we mentioned this before but I’ll restate it. It’s not about volume growth as much as it is about enhanced flexibility across a very large system which will enable us to serve the customer needs we’ve at a lower total delivered cost.

So we’ve opportunities to grow kraft liner through our international box system. We’ve talked about that in prior discussions.

We still see opportunity there in specialty applications like paper that's required for gypsum board, which we also make in our containerboard system is growing and all of this flexibility allows us to bring the best revenue stream in through the asset base we’ve.

The Courtland shutdown and transition are complete and we’ll realize the benefits of this repositioning for the North American Printing Papers business while the costs are largely behind us from 2014.

There is a growing trend in demand for fiber-based food packaging that we see in the move from foam to paper cups as an example, and the growing plate segment, just to name a few. And we're well-positioned to benefit from these demand trends. And we expect to see solid improvement in results in our Brazil Industrial Packaging business.

We're well-positioned to benefit from continued margin expansion that Carol outlined in our Ilim JV. So before we go to questions, I would just like to conclude by saying you know 2014 was a strong year for IP and a lot was accomplished. I feel good about how we performed and the momentum we’ve going into 2015.

We again delivered strong results and created value for our shareholders and that's our commitment. We're off to a good start in 2015. I am excited about the prospects for another strong year. We’ve every opportunity to deliver on the outlook I just shared with you, and our team is engaged in committing to doing it.

2015 is all about execution and that's something we pride ourselves on really continuing to improve on. In addition, we intend to focus more resources on high-return capital projects within our core businesses that can drive additional earnings growth.

And finally our team is committed to continue to find ways to deliver the most value for shareholders. And as such, we will continue to evaluate all of our businesses as well as our capital allocation strategy. We feel good about where we’ve come from and what we've accomplished, but we're far from satisfied at this point.

We expect to deliver more value in the future. And on that note, I'd like to give you a quick update on where we are with the Master Limited Partnership evaluation process. We continue to look and work diligently on this project with our tax, financial and legal advisors.

And the real question is evaluating whether the MLP structure is the best vehicle to create value for IP and our shareholders. We continue to be interested in the opportunity. While we said before it’s complicated, we haven’t seen anything that would say that we need to shut down the analysis so that it’s a no-go.

By the same token, we haven't reached a conclusion either. But since our last call we’ve filed a request with the IRS to get a private letter ruling and it remains a little unclear on how that might proceed, but we will stay tuned.

Our primary goal is to create value for our shareholders and we're evaluating the MLP opportunity because it has the potential to be part of our value creation strategy. As we’ve more information to share we will keep everyone informed. With that I think we're ready for questions. .

Question-and:.

[Operator Instructions]. And your first question is from the line of George Staphos from Bank of America. .

A few questions. You know Mark, you know, you mentioned that or the company mentioned that you expect to grow EBITDA this year about 5%, and we wish you well in that regard. And you talked to some of the drivers of that performance on slide twenty four.

Would it be possible to perhaps parse how much of that growth comes from those drivers when considering in 2014 you know looking at your slides, you didn't grow EBITDA quite 5%. And that was the year where you had much more pricing tailwinds and you're likely to have in 15 at least given current trends.

So you know if you could talk to those points and I had a couple of quick follow-ons. .

Yeah I think the outline on slide twenty four are the key drivers. I mean part of it is as I mentioned in internal execution.

We still don't have a robust volume outlook in our plan, but I think we've got the opportunities in the points I made on that slide that gives us a good chance to grow that EBITDA in really internal initiatives and some of the execution issues that we have in front of us.

And there is a long list of high-return capital projects that improve our quality and lower our costs that we’ve discovered in the number of businesses, most recently in our -- in North American Industrial Packaging business that we plan on working on. .

Okay, but other than that and general [indiscernible] we appreciate you might not want to get into the details at this juncture not willing to parse that any further on this call?.

I’d rather not, thank you. .

No, I understand, I understand. Secondly on pension, I think you mentioned that funding is now a $100 million for 15 and we understand why, obviously with the growth and the pension gap.

At this juncture, Carol is it possible to talk about what the implications are going forward past 15? So simplistically, should we extrapolate a 100 million into the future or you know could there be some offsets that we should consider as we model out?.

George, actually the honest truth of it is, is you really don't know your total cash required contributions until June, because there's some more that has to be done. And so as we sit, it’s not really much of a change from where we were before.

It’s in that range, and it all comes back to -- and very close to your funding target attainment number and you are right around 100%. If you go a little below that, you’ve to put a little bit more money in. If you are above it, you don’t. So it’s just that we're very close to that edge is why I qualify it with a 100.

But there's no real change even with the growing gap in the liability. .

My last question and I’ll turn it over. I noticed, I think from the slide deck that you are projecting maintenance spending to be up, I think around $60 million in 15 versus 14.

Can you comment to what the drivers are there and you know how important is that in terms of the overall execution, you know imperative if you will in 15 in terms of how you get that 5% EBITDA growth? Thanks and good luck in the quarter. .

Yes, George this is Carol. I’ll take that. Actually what’s happening in 2015 and it will happen again in 2016, is there is some significant outages for the [indiscernible] implementation that requires some extra work. And so if you look at I think the numbers that are in there is $444 million of outage expense in 14 increasing to about 500.

The biggest driver of that increase is the very specific work that has to go on around some of the mills that's more extensive than we normally would be see. .

Your next question is from the line of Mark Weintraub, Buckingham Research. .

Thank you, I had two questions.

First I just wanted to know, are you continuing to see the strength in corrugated demand domestically as we go into January that you're seeing in the fourth quarter? And do you have any visibility as to how sustainable it is at that point?.

Hi, Mark. We're are seeing January starting off with a continuation of the trend we saw in November and December. So across a number of segments you know we're sort of in every segment given our scale, but we do see that continuing. I wish I could answer your second question, I would say we hope so.

Some of it seems to be underpinned by the behavior of the American consumer and everything we read about with respect to the impact of lower fuel prices and you know consumer sentiment in general being better. But it’s you know a couple of months, maybe not a trend yet but we are cautiously optimistic. .

Thank you and then if I could try and just translate, if there is 5% growth in EBITDA, in terms of thinking about EPS is it fair for us to take this $3 and presumably, hopefully we don't have the Ilim FX issue, so we're really starting at $3.63. Then if we think about 5% is roughly 200 million, that's about another $0.30.

I guess there's some movements in tax rate and interest expense and corporate, but is that kind of directionally the way to think about translating the EBITDA to an EPS number or are there other significant variables to be keeping in mind?.

No, Mark I think that's it. Of course you know we’ve the Ilim FX issue, so that's in both, now it’s in the 14, it will be something in 15. And you hit it, we gave some information on where we view the tax rate going and also the interest expense. So yes, you are directionally thinking about it correctly. .

Your next question is from the line of Gail Glazerman, UBS. .

You took another big charge in Asia this quarter and you took a big one in India, you know within the last year.

I am just wondering, does that have any -- to what extent does that reflect on how you are viewing the business potential moving forward? And also how it may or may not impact your thinking in terms of further growth and investments in the region?.

Yes Gail, I’ll just comment on the charge. So I think it’s listed in our special charges. We did take the write-off of the goodwill that was associated with our Asian Box business, the converting business. And as you pointed out, we wrote off the goodwill associated with India in the prior year.

And so relative to the comments about the business and the portfolio, I’ll turn that over to Mark. .

Thanks Carol. Good morning, Gail. Now the charges are really as Carol described. Our view on the businesses, in any of these kind of emerging markets is, it’s a long view. It’s a difficult time in Asia right now for a number of reasons, namely capacity issues. You know we're very small in India and we still see some potential there.

So I think we do have a long view on these markets, but as we said before, and I said in my earlier comments we will continue to evaluate as time goes on almost on a continuous basis. The portfolio we're in and geographies and businesses, all against the backdrop of trying to do the things that create the most value long term.

So you know we're going to continue to look at our emerging markets. Sometimes, you’ve to weather some storms, and I think that's what we're going through right now. .

Okay, and in terms of the coated paperboard business, can you talk about where you think we are in that process of conversion away from foam? You know are we in the third inning, the eighth inning? And just taking kind of a broader global view, you kind of just referenced some of the challenges in Asia.

But anything else as you look at the business globally that gives you any concerns?.

Gail, Mike Amick is here and he’s [indiscernible] our Consumer Packaging business and our Printing Papers business. And I’ll let Mike take a shot at your question and then see if we get everything you are looking for.

Mike?.

Good morning, Gail. It’s a good question. I like the analogy to the baseball. I am not sure exactly what inning, I would say we're probably early in the process. We continue to see you know very strong momentum in this space. We had a good year in foodservice and the overall demand associated with that business.

But I would probably characterize it as you know, we're kind of early, you know early on in this game and probably in the first three innings. We expect to see continued improvement in this space as a result of kind of the sustainability story associated with our product line. .

I think Gail, on the global part of that question, you know we’ve seen a lot of customer acceptance of higher grade fiber-based packaging. So we make this new product at our Kwidzyn Mill. It’s been very well received. Now we are in segments of the Consumer Packaging market from a board manufacturing standpoint, not every segment.

And the ones that we're in, you know we think still have some runway and still have a lot of interest by customers. .

Okay and maybe that's like a little bit of a segway in my last question. Obviously earlier in [indiscernible] week we saw a big deal announced particularly perhaps in the Consumer Packaging space.

Do you think it’s important for you or would you consider expanding beyond into other substrates? Is that something that you feel is holding you back at all in your business?.

Well it’s something -- it’s a great question. It’s something we evaluate constantly around whether or not a fuller line of products and really any of our business brings value to customers. And sometimes the best place to ask that question is in where the customer sits.

And so it’s something Gail we always evaluate and you will probably see from time to time that we expand our offering. You know we did it in our corrugated packaging business. But I don't see that we're in a particular disadvantaged spot right now.

But it’s definitely something we continue to look at as we should, as a value-creating opportunity for the company. .

Your next question is from the line of Philip Ng, Jefferies. .

Can you talk a little bit about inventory levels in containerboard? You know November was pretty lean and demand trends from most of the public companies that I have reported suggested pretty strong flow-through on the demand side in the early part of year.

So can you give us a little color on that trend?.

Philip, I would be happy to. You know demand in a quarter, expected inventory needs to service customers in the next quarter, and in the case of the first quarter you start getting the annual outages. And just how we ran and how we operate, all factor into where our inventories end up despite our best efforts on planning where we want them to be.

And I think with all that said, I believe we're in good shape from an inventory standpoint. Going into 2015, our inventories went down in the quarter and we believe we’ve got the systems in place to operate in the first quarter without any interruptions because our inventory is too low.

The one dynamic that we are dealing with and I think a lot of people are dealing with is the transportation network continues to be a little less flexible than it has been in the past. So that influences where we might need to see inventory levels that might be different from what they were in the past. But I think we like where we are right now. .

Okay and Mark, you kind of referenced you know part of that [indiscernible] on 5% EBITDA type growth for 15 is partly driven by some of the high-return projects that you have going forward.

Can you talk about it, if it’s mostly cost takeout, is it more growth related, is it domestic, is it international? Can you give us some color on that front?.

I think it’s a bit of -- some of the projects definitely, some projects that we’ve already started in 14 that will benefit us in 15. And I think it’s a mix across domestic and the outside the US businesses. But given the scale of our business, obviously most of the driver is coming from some opportunities in our North American system.

There is a little bit of volume or growth I would say in there. And it’s areas where we think we have the ability because of our customer portfolio to grow even in a flat-market environment. So, but the big driver is the first thing you mentioned, which is improving our cost structure and cost takeout. .

Okay and just one final question for Carol. Can you give us some color on how you are thinking about free cash flow? I know you gave us some moving pieces on CapEx and D&A and pension contribution.

But directionally, should we expect free cash flow to be roughly flat, up, down, some color on that front would be helpful?.

Yeah I think the -- [indiscernible] the EBITDA number out there. I think the areas you are going to see more cash used is in cash taxes. We had a number of one-off events that happened in 14 that helped lower the cash taxes that are non-repeatable. So I think we’ll see more there and then we talked about the CapEx going from 1.4 to 1.5.

But again if you step back from it, it’s going to be another strong year of free cash flow for the company. .

Your next question is from the line of Al Kabili with Macquarie. .

And I guess a question for Carol or maybe even Tim, if he is there. It’s just, you mentioned some operational issues in the Industrial Packaging side in a mill in Texas, I think in Indiana.

And I was just wondering if you maybe can quantify or help us out with you know the extra costs related to that, that hopefully don't repeat there?.

Yeah this is Carol. Unfortunately Tim is home sick, so we got the flu running around here in Memphis. But, so I’ll take a shot at it and I’ll see if my colleagues can add to it? So if you think about Orange, Texas we had an outage in December.

We found some issues that we chose to spend a little extra money on, and then we had a little difficulty coming up out of the outage which cost us a little production.

So you’ve got that item and then you take our Indiana mill where we had our supplier, our steam supplier there had a catastrophic failure at their facility, which meant that we had to pay more for both electricity and steam. And that problem was with us most of the fourth quarter and is moderating and I am looking at my colleagues.

I think the swing on all of this is about $10 million to $15 million should be a pickup that we get heading from the fourth to the first. .

Okay, thank you Carol, I appreciate that.

And also in the context of the 5% EBITDA growth that we're targeting for 15, how do you -- how has inflationary expectations embedded in that? Do you see yeah, low oil prices materially you know factoring in that and helping on the inflationary front?.

You know that's a great question. You know we take a look at a year like 14 that we would say felt like a moderately low inflation year and yet, you know we still saw a $141 million of headwinds, so it’s a big system and small moves can matter a lot. So the things that are helping us of course are energy, pull through into chemicals, diesel.

Wood costs has been stubbornly high, but you know we’ve got our fingers crossed. Maybe we’ll see it turn there and you know OTC will depend on global economic conditions. The headwinds we have though are transportation costs are going up.

And so we’ve kind of have put some cakes, so it’s hard to say if it’s going to be you know like a 100 headwind or a 100 tailwind. It’s hard to predict how it will turn out. If the economic conditions stay strong, the likelihood of it being a little bit of a headwind is probably more likely and that would be a good problem.

And so, we’ll just have to see, so that's a round answer Al, but that's about what it feels like right now. .

Your next question is from the line of Mark Wilde, Bank of Montreal. .

Mark, I wondered -- just kind of a broad question here.

But I wondered if we could get your thoughts on the impact of FX across your portfolio as we move into 15?.

Yeah, that's a great question, Mark. And I think what I’ll do is I’ll ask Carol to kind of give you a high-level puts and takes across the company. .

Yeah Mark, you know if you look at the business and you know us well, the primary impact of FX is going to be less around the accounting conversion of profits from euro to dollars, all of that stuff.

It's going to have the bigger impact, it’s going to be around really the economic implications of what it does to trade flows, cost competitiveness and where people sell their products, and what we can charge for our products in different regions. If you step back from it, clearly the biggest impact is the strengthening US dollar.

For us, a stronger US dollar net-net will cost us, you know it will lower our earnings. And I don't know that we've kind of given this number out before, but if you think about you know a 10% depreciation in the dollar, it could be a 15 millionish round number just from the accounting side of it.

And that doesn’t speak to any of the economic implications of it. So we're hedged in a lot of places. You know we’ve weakening currency in Brazil and Russia, but we’ve a lot of dollars sales. But the biggest impact of course is you know we export a lot from a lot of places and it will be trade flows that has the biggest impact. .

Just another question on a couple of the foreign operations. I wondered if you're able to give us some timeline and improvement down at Orsa.

And I also wonder over at Ilim whether it’s possible to give a sort of a longer-term EBITDA margin target of that business?.

Mark, I think on Orsa you know what I mentioned earlier is we made a lot of operational improvements as we went through the year and we expect to continue that.

Where we've been challenged really is on the commercial side, and so I think we're going to take advantage of whatever the market gives us, but we expect a difficult commercial environment in the Box business in Brazil through 2015, at least with what we can see now.

But there are opportunities, continued opportunities to improve the operation of our recycle bills there and our box plans. And so I think when and I know it will happen, when the market improves we will be well positioned to take advantage of it.

So I think you'll see internal improvements through 2015 and commercial improvements as the economy improves. .

Relative to Ilim, we still target and believe that under you know normal conditions, $600 million EBITDA is the target for the footprint and the platform we build out. And depending upon the margin on that, it’s probably in your upper 20s, 28ish percent approximately. .

Okay that's helpful.

The last question I had, any updated thoughts on Courtland and whether there is any potential to repurpose any portion of that mill, maybe similar to what you did at Franklin a few years ago?.

Mark, you know as we always do look exhaustedly at different opportunities for that asset and there's nothing major that has come out of that work there or maybe a couple of small opportunities that are still alive. But I don't see anything right now in the scale of Franklin. .

Your next question is from the line of Alex Ovshey, Goldman Sachs. .

Mark, first on the EBITDA guidance improvement of 5%, I think you had mentioned that it doesn't reflect much of [indiscernible] improvement.

Would you be able to clarify for us, you know what you are factoring in for your volumes in the North American Industrial business within your guidance for 15?.

I think what we've been looking at in terms of our plan and the backdrop against what I was talking about our earnings growth is about a 1% North American Box market growth rate. .

Got it, and then on the cost side, you know a lot of talk about the inflationary pressure in freight.

Can you just size the total cost for the company for securing rail and truck? And you know what is the inflationary percentage that you are sort of seeing on that cost base in 15 versus 14?.

You know we looked across our transportation spend really from rate increases, we're looking at about a $40 million year-over-year cost increase. And then we obviously go and look to -- that's about somewhere in the 3-5%, whether you are talking rail or truck. And we are looking at ways to you know optimize supply chain systems to chip away at that.

So we usually typically don't experience the full impact of the rate increases we're able to compensate. But $40 million is probably the number that we would, that we plan for this year. .

And just last one for me on Ilim. Can you say how much free cash flow the business generated in 14 and what the uses were? I know you guys picked up a $56 million dividend which is great to see. But I just wanted to know what the total free cash flow generation was.

And then maybe in terms of 15, if we do you know put up $600 million EBITDA in that business, how much free cash flow does that equate to and how much of that could come back to the company?.

So let me give you a couple of numbers and I am going to let Jay kind of look for it. And so this is more of a pro forma than it is an actual number right now. But if you think about a business that's got $600 million of EBITDA, think about sustained CapEx is around $200 million.

Okay and then you’ve got taxes and I think taxes in Russia is, the tax rate is 20ish percent. And then you’ve got to service your debt and so that's the question of how that will come over time and how much leverage do we want to keep on the business. So you can see that it’s going to be a very nice cash flow generator if you kind of do that math.

And the interest that we had in 14 was like $70 million, so a lot of nice cash. And then the question is what do you want to do with that cash, dividends to the shareowners or further reinvestment in the business are the options. .

Your next question is from the line of Adam Josephson with KeyBanc Capital Markets. .

A couple of questions on the containerboard export situation, Mark or Carol. One, you know exports are obviously up substantially in the December quarter despite the strengthening dollar and weakness in economies elsewhere.

Do you have any thoughts as to why that happened and can you shed any light on how much of that export surge was attributable to your sending board to European box plants?.

You know Adam, I think the real driver of why the exports are up is most of what’s exported is Kraft Liner. And that's what we export and we saw actually improved demand for our Kraft Liner segment.

So while at the macro level some of the markets were soft in some of the Kraft Liner segments tends to be in some of the fresh food and humidity-proof kind of segments. We saw improvement, and so we had more customer demand and a good percentage of that goes to our own box business in Europe. .

Okay and just get along similar lines, Mark. You know the trade press talked about the gap between domestic prices and export prices to Europe being unusually wide at the moment, about a $170 a ton.

I mean do you think that gap is sustainable, or would you expect a convergence over time between the two for whatever reason?.

Well I think the gap between you know kind of a dollar pricing between domestic containerboard and export containerboard does have a normal control range based on -- a lot of it’s based on FX effects and how containerboard is sold in different parts of the world. So in Latin America for example it’s sold in dollars, no big change in Europe.

Some of it’s sold in euros but I think our view is, you know we’ve been doing this for a long, long time before the euro even came into existence. We’ve sold containerboards successfully at $0.84 and we’ve sold it successfully at $1.45. And we're in it for the long-term, so I think that gap will move around.

But it seems like it’s in the normal band that you would see when currency moves around. And the bottom line is the customers that we have need Kraft Liner and we're going to supply it to them for those needs. And we will make more money in some periods of time, we’ll make less money in other periods of time, but it’s a strategic segment for us. .

Your next question is from the line of Chip Dillon, Vertical Research Partners. .

Yeah first question, I was just having trouble with my phone, is really more for Carol. And it’s interesting, I noticed the tax rate going up from 26 to 31 to 33% and I would suppose that increase has a lot to do with the mix of earnings, especially with the weaker currencies overseas.

Is there anything going on that would make us think that that tax rate would continue to move up in future years, or do you think this is a fair place to be, or in fact could it be lower in future years you know if let’s say Brazil comes back?.

Yeah, I think the 26 was unusually low because we had the double year of two helpings of extenders and legislations. The 31 was more normal as you would expect. And then the 33 goes up, because as you stated you know we're going to have more US earnings.

And with more US earnings the marginal rate on that is higher and so it’s just going to change the ratio. Well I think for us, 33 is probably a good number to plan again. And then of course we will you know work well within the bounds to you know manage our ETR and our taxes and do the things we can best to pay what we need to pay. .

Got you, and then a quick one on Ilim. I think before we were using $1.5 billion of net debt and now you are saying 1.3 and I might be wrong on that.

Did you actually pay off some of the debt that had been accrued there during the project?.

No, that's around the dollars that we’ve got flowing in because of these great operations and margins we’ve got. So we’ve got dollars that are sitting in the bank. .

I got you, okay. And then on the leverage, I noticed that with the pension and the adjustment for the operating leases, it’s you know 3.3 times, which is a bit above your long run I guess target with the ratings agencies.

Do you think that's going to necessarily cause you to slow down your share repurchases in 2015, you know all things being equal or not?.

You know, I don’t think so. I think to say once again, we’ve got a great reputation with the rating agencies. You know we’ve got really incredibly low discount rates, so rates go up. You know we’ll make that liability to mark it again at the end of 15, so we’ll be talking to the agencies about our situation.

But I don’t think that it will cause a significant shift in our strategy or our capita allocation at this point. .

And then one last quick one. You know I think there was -- and I don’t know who interviewed -- if this was accurate. But I saw a quote somewhere this morning that, it seemed like Mark you had suggested that growing in the containerboard internationally is something that that is important to IP or certainly a potential avenue of growth.

And I don’t know, if you could just talk a little bit about how you view the paperboard segment broadly defined in the US and containerboard not outside the US in terms of how those could be opportunities for IP to grow through acquisition?.

Sure, Chip. I think what you saw was, I think an interview and we were talking about opportunities to grow our packaging business. And the question was about North America and I said in North America, our primary opportunities are in our box business given where our position is in containerboard.

And then I used an example of Orsa as a containerboard and box move in a market where we can do that. And obviously, as we said we're interested in generating shareholder return by doing what we do well and that may include growing our packaging business globally. So that was the context of what I think you're referring to.

And I think you know consumer packaging is definitely interesting for us, which I think is what you are talking about when you said paperboard. And industrial packaging of course is our driver for the company right now and those are businesses we believe, we have more opportunity and we will continue to evaluate those opportunities. .

Your next question is from the line of Chris Manuel, Wells Fargo. .

I wanted to ask a question and I am going to try to be careful how I ask this. But you know if we look at and kind of dissect what you’ve laid out here thus far in the call, is I look at you know where you’ve outlined significant amounts of inflation or headwinds, both you know what you had in 14 and what's looking forward to 15.

I think of areas you mentioned like wood inflation, wages, regulatory costs with [boiler mac], healthcare, utilities, transportation, etcetera. It strikes me that it’s been almost two years since we’ve had any sort of recovery for inflation or any components.

As you know sit today, how do you feel about the potential environment? We’ve demand that's seemingly much better with opportunity to potentially you know recover some of these higher costs that you're seeing and have to work through the system?.

Chris, that was very carefully asked. But you know obviously we never speculate on what we might do on pricing to recover our cost. It’s obviously a fundamental in business that you need to think about those things.

And, we're talking about what we might do in the future, what we’ve always talked about is the conditions that would need to be present for and that's much more complicated than just demand. .

Okay fair enough. Let me flip gears for a second to the coated paperboard business. It looks like you took almost as much downtime in 4Q as you’ve over the last couple of years.

Can you talk a little bit about you know where you are set up today there? Do you feel that you’ve kind of got your -- you know are you for inventory levels or are you comfortable that you got what you need done there and you can operate more maybe in line with demand on a go-forward basis?.

Hey Chris, this is Mike Amick, a good question. Yeah, we took some [LLO] in Q4. But you know, we typically see a seasonal downturn in Q4, and obviously we're working to match our supply to our customer demand. You know overall we feel good about our inventory levels.

You can see what's happened with the industry inventory levels as well from the publication. So we feel pretty good about that. We’ve seen as we expect to see in the first quarter, a little bit of a pickup you know in demand over the course of the last couple of weeks.

And so, we’ll continue to you know again to manage our supply to our demand, but you know we feel pretty good right now. .

Your next question is from the line of Steve Chercover with D.A. Davidson. .

I know it’s hard to call a bottom on a currency or a stock for that matter, but does it make sense to maybe hedge the ruble impact at some stage on the joint venture debt or is the natural hedge with your operation sufficient?.

It’s the natural hedge, Steve and you know the way we say it is we borrow dollars and they are still the same dollars. So there is the non-cash and so when you start hedging non-cash accounting things, you are incurring a cost without necessarily an economic benefit [indiscernible]. .

That's fine.

I suppose your JV partners have never been happier to get US dollar dividends?.

Yeah. .

And then similarly I see that you know China, this has been touched on, but that's not listed as you know something that's going to be getting better in 2015, or at least not on page twenty four.

I mean how long are you going to tolerate that, is it much of a distraction to management?.

That's a good question, Steve. You know we’ve got a good team in China. They manage the business. It’s not a distraction to management at all. And again, you know we wouldn’t speculate on what we would do in all of our businesses. We evaluate them for the near-term, midterm and long-term, and we look at China beyond what we just have in China.

We view China as an important market for IP. Carol talked about you know a big portion of the rationale for Ilim is all about China. We import products from the US to China, that they need like fluff pulp and containerboard, and we’ve operations in China.

So when we think about China, we think about from the IP side, we think about all of those activities. And it’s an important market and we’ve tried to address it in different ways. So I think we will continue to look at that and all of those kinds of ways to serve that market and continue to evaluate it as we go forward. .

Thank you and then one other perhaps oddball question. We're well aware that Styrofoam cups are being phased out and it appears that you know all kinds of Styrofoam products are actually you know on the wane.

So I'm wondering beyond Bleached Board, are there other substrates where you can win, you know perhaps even molded pulp for take-out containers?.

Well I think that's to my earlier answer to a similar question that, you know extending our products and know-how into new uses is something we look at constantly and to see if we can create value. And then going into adjacent spaces, where maybe we look at combining materials like fiber and something else to make a better product.

Again most of those markets have valid competitors who are really good at what they do. So if we think about doing it we think about it because we believe we can have a competitive advantage and that maybe complementary offerings with what we already do would be a better solution for the customer.

So yes it’s on the table, almost on a continuous basis. It’s part of our business planning and strategic inputs to our strategic plan that we do from our marketing teams. .

Your next question is from the line of Scott Gaffner with Barclays. .

Mark, just looking at the EBITDA guidance for 2015, you are talking about 5% growth off of the $4.1 billion in 2014. And sort of just compound that in getting to you know $5 billion EBITDA for the company. You know you are talking about 4 to 5 years until you actually reach, if you maintain growth at that 5% rate, so you can get to 5 billion.

Is there something in the next few years where you see the potential for acceleration in EBITDA growth within any other businesses that could shorten that timeframe?.

Well, that's obviously what we work on every day and we're not satisfied with our path toward our 5 billion. And we talked about this before and one of the biggest misses is we had a slightly better economic environment during that period.

And we called it a mid-cycle target, mid-cycle demand, mid-cycle cost and we probably haven’t seen the demand side really. So a small amount of demand improvement really ratchets that performance up pretty quickly. And then you know we've got more opportunities and some internal improvements that we can pull forward.

But we really probably need a little bit better economic set of conditions to accelerate it in a meaningful way lacking, you know changing the company in some way. But with what we’ve today is what we said we're focused on getting the 5 billion with the IP we’ve today. .

Sure and a couple of questions on the corrugated business, specifically I mean you talked about for the FX impact on exports. It sounds like minimal impact to your export business or within the normal range.

But when you look back historically FX and the impact potentially on imports, is there a dollar strength level where you actually start to see imports incentivized into the US potentially disrupting you know some of the supply-demand balance that we’ve today?.

Imports of containerboard have a lot more issues to manage than just the economic piece. So the US market, given the way it's constructed, who makes the boxes and those types of things makes importing containerboard a bit of a challenge. So I don't know if there's a number, I guess there’s always a number.

But I don't think we see imports of containerboard in the US being a major, a major issue. .

Okay and then just lastly around e-commerce and the impact on the box business in North America.

Any sort of additional work you've done to sort of measure the impact of e-commerce, how that might have impacted the fourth quarter, where it is as a percentage of sales etcetera?.

Well I think as a market that segment is still pretty small as a segment of the US Box market. I think it’s 2 to 3% or something in that range, but it’s growing at an impressive rate. You know our business in that segment has been one of our high points and you know in the 15 to 20% growth range.

And I think that's how much the segment is growing as well in addition to our numbers. But I believe that's going to continue, but again there’s so many boxes in the US used for other things. And it'll be a while before it’s maybe a major segment, but the growth rate is exciting.

And corrugated gets to show its full value to the market in that kind of supply chain, and so we're excited to be participating in that segment. .

Your next question is from the line of Paul Quinn, RBC Capital Markets. .

Two easy questions.

One, whether you could comment on last week, there was a filing by four of your paper competitors on looking for antidumping duties, if you could comment on that? And just you referenced the fluff pulp mix improvement, just if you could give a couple of comments on your outlook for fluff as well as NBSK from Ilim going forward?.

Okay Paul, I’ll take the question on the antidumping case, and then I’ll ask Mike Amick to update you on our pulp business. He has the pulp business in our paper sector. On the antidumping case, you know obviously we're aware of it. Our set of kind of conditions are different than a lot of the other players.

We’ve a global footprint in uncoated free sheet and you know we rely on the flexibility of that network. So our view on that is probably a little different than some of the other companies that are named in the complaint.

But largely we make the printing papers around the world that we make for the local markets or the regional markets and import virtually nothing to the US. So that's not made in the US from our own operations. .

Hey Paul, this is Mike Amick. On your second question on fluff pulp, obviously you saw from the slide that you know the pulp business had a nice year-over-year improvement. And we feel pretty good about the pulp business, the mix has been a large part of that lever as we’ve taken you know our mix up to, close to three quarters of our pulp.

And we will continue to you know to drive that improvement lever and feel you know pretty good about 2015. .

Your next question is from the line of Debbie Jones with Deutsche Bank. .

If I could go back to your Brazil business, you know you are pointing to stable pricing and cost in Q1.

I was just curious if there is a concern you know however that electricity prices could impact your paper and packaging business down there in the region for 2015?.

Yes definitely, Debbie it’s definitely something we're watching. The electricity prices are very dependant on rainfall and water reservoir levels and we dealt with those issues throughout 2014. It’s not completely behind us by any stretch of the imagination, so you know it’s a potential.

We don’t plan for everything that could go wrong going wrong, but we are watching it, and putting contingency plans in for that exact potential. .

Okay and then there has been a discussion on the call about you know further expansion into you know packaging outside the US and I am just wondering if Brazil, you did mention this before.

If there are any opportunities down there for you that you would see that might be attractive?.

You know we like what we’ve started in Brazil. It’s not performing to our expectations, but we think we know how to fix it. And I think if we can show that we can do that, we would like to look at opportunities. Brazil is an interesting packaging market.

There is opportunities to do organic moves and there is opportunities to potentially make small acquisitions. There are no large, large players or anything like that. So you’ve to build the business in a different way, but it is something we’ve interest in and you know we’ll only do it if we think we can create value doing it. .

Your last question is from the line of Anthony Pettinari with Citigroup. .

Just a couple of quick questions on domestic box markets. You know we saw some consolidation by independent coordinators last year and early this year and some capacity coming online.

I guess my first question is, are you seeing increased competitive pressure in any of the regional box markets where you compete? And then a related question, you know given price declines in OCC, you know are customers coming to you in any meaningful way and saying that they want you know more test liner and less kraft liner or are you seeing any kind of mix shift there?.

Anthony, I think on the first part of your question. You know we’ve seen kind of a normal level of competitive activity regionally as you mentioned based on some new capacity being absorbed. I don’t think anything has really changed in the third quarter or fourth quarter. We just kind of navigated through that process.

It’s obviously pushed some product probably to the export markets from the US, but we see that is kind of stable and no real change as the year went on. And again a little bit of growth probably helped in the fourth quarter and would definitely help get that capacity to market in the 2015 period.

And there's no discussions about you know normal input costs like OCC that would drive our customers to test liner. Our customers really talk to us about you know working collaboratively on what the best solution is. And sometimes I wouldn’t call it test liner in the US as much as I would call it a recycled blend of paper.

But the performance specs are really what matter, and that's what the customers are interested in. .

Okay that's very helpful and then may be just one follow-up. I mean OCC prices have been weak for maybe a little bit longer than some of us had expected.

And as you think about your 2015 you know kind of internal projections, do you expect OCC to stay at these levels for the year or do you expect some kind of recovery in OCC?.

Well Anthony, that is obviously an important question. Every time we try to answer it, we're like everyone else, we're wrong. So we really don't know, we will monitor it. I think Carol mentioned earlier OCC is going to be a function of global economic conditions based on where the primary OCC containerboard is made.

So Asia getting better would probably firm up OCC and other markets like that. So I think you know we're going to watch it and be prepared for you know whatever happens. But we really have no way of knowing generation is part of the impact. Collection rates have improved throughout the world, so we will probably be looking at -- and I must say this.

And I’ll be wrong, a stable OCC in 2015. .

And I will now turn the call back to Jay. .

Yeah so we took a few extra questions this morning, so we'll go ahead and wrap it up. Well thank everybody for joining us and being on the call and as always Michele and I are available after the presentation. Our phone numbers on page twenty six, so have a great day. .

Thank you, this concludes today’s conference. You may now disconnect..