::The Center for Paper Business and Industry Studies::

061025 Deutsche Bank Report - WY's Q3 in 100 Words

Deutsche Bank - Equity Research

Weyerhaeuser {Ticker: WY.N, Recommendation: Buy}.

Slightly ahead of estimates. $0.89, excl'g special items. DB @
$0.80, FC @ $0.86. Comp's: 2Q06 = $1.13, 3Q05 = $0.93. Pos's:
nice improvement in Cellulose & White Paper, lots of RE closing
vols. Neg's: Wood, Timberlands, and RE under cyclical pressure;
C'bd showed little q/q progress.

Timberland.   About as expected. EBIT: $178MM, 2Q06 = $224MM, 3Q05
= $191MM. 3Q was seasonally & cyclically weak. Weakness in wood
starting to hit log prices.

Wood Products. Predictably weak. EBIT: $(46MM), 2Q06 = $132MM,
3Q05 = $130MM. Expect pretax refund of $335MM from US/CN lumber
settlement.

Cellulose Fiber & Paper. Nice improvement. EBIT: $119MM, 2Q06 =
$34MM, 3Q05 = $20MM. Excl'g Domtar-bound bus's, EBIT would have
been $54MM.

Containerboard & Pkg. Where's the beef??? EBIT: $102MM, 2Q06 =
$97MM, 3Q05 = $36MM. Seasonal slowing in 3Q exaggerated by hot
weather in CA. Higher OCC & wood chip costs also hurt. New 2-year
improvement goals: (1) $100MM on new products, customers, and
growth; (2) $65MM in mill costs; and (3) $65MM in converting costs.
3Q EBIT segment comp's: SSCC's pkg operations (slightly larger than
WY) had $165MM, TIN (55-60% of WY size) had $81MM, PKG (35-40% of
WY's size) had $77MM.

Real Estate.   Solid. EBIT: $149MM, 2Q06 = $123MM, 3Q05 = $145MM.
Nice result due to high closing vol's, but weak markets apparent –
(1) sales vol's fell 32% q/q & 44% y/y, (2) cancellation rate was
36%, vs. 26% in 2Q and 17% in 3Q05. Backlog of homes sold but not
closed fell to 4.5 mo's from 6.3 mo's in 2Q.

Change in View?   Not really. Majority of businesses face severe
cyclical challenges, but high asset value and potential for value-
unlocking restructuring moves make stock attractive. Maintain Buy.
Adjusting est: boosting 4Q from $0.75 to $0.80, '07 stays at $3.00.

061025 Deutsche Bank Report - SSCC Q3 in 100 Words

Deutsche Bank - Equity Research

Smurfit-Stone {Ticker: SSCC.OQ, Target Price: USD 10, Recommendation: Hold}.

Disappointing Qtr – Reduced Q4 Expectations. Reported $0.06.
Excluding all special/unusual items, $0.13 is “best case”. DB @
$0.15 & FC @ $0.16.   Pointing to slight sequential Q4 decline in
EPS.

Containerboard & Boxes.   EBIT: $165MM, 06Q2 = $118MM, 05Q3 =
$31MM. Q/Q box prices +3.2% q/q, +9.8% y/y – not out of line.
Vol's -1.2% on avg. wk basis – impact from13 plant closures. Mill
volumes +5% y/y and 100% operating rate. SSCC's EBIT margin
continues to compare favorably to WY(largest competitor).

Other issues. (1) Projecting Q4 @ less than $0.06, FC was @ $0.20,
(2) Q4 issues: increased energy usage, higher chip costs, seasonal
drop in vol, more downtime(60K), little additional pricing, (3) CN$
is costing SSCC's big CN box business both volume & margin, (4) lack
of further Q4 price improvement is surprising, (5) How much of
strategic initiative benefits($156MM YTD) can they retain, how much
is simply part of staying in the game?

Pay me now, pay me later? Best news may be SSCC's Q4 "maintenance"
downtime. With markets appearing to slow, throttling back on supply
could help pricing environment. If operating rates remain @ 100%,
we're headed for trouble.

Thoughts on stock? This remains biggest “show me” and greatest
potential 2yr upside among containerboard producers. However, many
things need to “work”. The economy needs “soft landing” and SSCC
needs to execute restructuring & de-leverage (no small job). The
bears' case? With YTD operating rates @ 99% & historically healthy
prices, they're struggling to breakeven.

Where's it trading? '06 EV/EBITDA 10.3X vs. 8.9X group avg. '07
EV/EBITDA 7.5X vs. 7.5X group. 29.1X '07 P/E vs. 15.5X group.

Change in View? We remain Hold on the stock. Key issues: (1) the
economy, (2) execution on corporate restructuring. Maintain Hold.
We are trimming estimates: '06 from -$0.03 to -$0.17 and '07 from
$0.75 to $0.35.

061025 Deutsche Bank Report - BMS Q3 in 100 Words

Deutsche Bank - Equity Research

Bemis {Ticker: BMS.N, Target Price: USD 37, Recommendation: Buy}.

Modest upside. $0.48, excl'g $0.03 of restructuring charges. DB @
$0.44, FC @$0.46. Issues: vol's appear lackluster (shedding
commodity bus). While pt'g to lower resin costs & potential upward
pricing resets, guidance was reaffirmed at $0.47/share.

Flexible Pkg. EBIT = $97.1MM (excl'g $5.1MM restructuring charge),
06Q2 = $88.6MM, 05Q3 = 89.0MM. Margin (excl. charge) = 13%, 06Q2 =
11.5%, 05Q3 = 12.3%. Sales rose 3.6% (incl'g 2.0% from FX) - - -
suggests weak volume.

Pressure Sensitive. EBIT = $12.0MM (excl'g $0.6MM restructuring),
06Q2 = $14.8MM, 05Q3 = $8.7MM. Margins (excl'g charge) = 7.8%, 06Q2
= 8.9%, 05Q3 = 5.9%. Sales rose 2.5% excl'g FX.

Other issues: (1) further restructuring charges: $0.04 in Q4,
reflects facility closure and rationalization (2) EPS “guidance” =
$1.86-1.90/share (excl'g charges). (3) Capex = $175-185MM. (4)
Continue shedding low-margin business. (5) European margins still
well below NA levels.

Change in view? More cautious on volumes. Maintain Buy rating &
$37 price target. Tweeking ‘06 EPS from $1.85 to $1.88 (excl'g
charges), '07 remains $2.05.

Where's BMS Trading? '06 EV/EBITDA=8.4X vs. 8.7X group avg., '07
EV/EBITDA=8.1X vs. 7.8X group avg. '06 PE=17.7X vs. 19.5X group
avg.

061025 Deutsche Bank Report - SEE's Q3 in 100 Words

Deutsche Bank - Equity Research

Sealed Air {Ticker: SEE.N, Target Price: USD 54, Recommendation: Hold}.

Nice Qtr. Reported $0.82 (excluding special items) – DB @ $0.77, FC
@ $0.78/share. Sales rose 6.1% on price/mix improvement offset by
static vol's. Margins are improving, but should be able to go
meaningfully higher.

Food Pkg. Sales +6.6% y/y to $677.6MM (+5% ex FX). EBIT margin
declined 10bps y/y to 12.1%, but increase 70 bps q/q. Late Q3
price hikes should roll-in through during Q4 & should boost
margins. Beef mkt has some encouraging signs, but is still
challenged.

Protective Pkg. Sales +5.1% y/y to $403.8MM (w/o FX +4%). EBIT
rose 20bps y/y, 90bps q/q. Like some other flexible packagers, SEE
seems to be sacrificing volume for price.

Other Key Issues: (1) Maintained $2.90-$3.10 (excl'g charges)
guidance for '06 - assumes modest upward pressure in raw mat's. (2)
Tax rate @ 30.6% - boosted EPS by roughly $0.02. (3) $130-$150MM
in capex over 3yrs for global manu'g initiative, $18MM in Q4, (4)
Redeemed $252MM of Euro debt, (5) repurchased $43MM of stock (6) '06
capex near $150MM, $150-175MM in ‘07.

Bottom line? Encouraging quarter w/ improving sight-line on higher
margins We're maintaining Hold for moment. Maintaining '06 at
$3.00 and '07 at $3.35.

Where's it trading? '06 EV/EBITDA=10.4X vs. 8.7X group avg. '06
PE=19.5X vs. 19.5X average.