The company faces market risk from commodity price fluctuations, interest rate changes, and financial instrument valuations. A significant customer concentration risk exists with Office Depot, representing a substantial portion of Paper segment sales. Legal proceedings, particularly the DeRidder mill lawsuit, pose a potential liability exceeding insurance coverage. General economic conditions, acquired business integration, industry competition, and input costs (wood fiber, energy) are also noted as risks.
Financial Upside
Strong demand and higher prices/mix in the Packaging segment are driving increased sales and operating income. Higher volumes in the Paper segment are also contributing positively. Favorable pension income and lower interest expense are contributing to improved financial results. The company expects continued realization from price increases and higher export prices in the Packaging segment.
