Jay Royalty - Vice President of Investor Relations John V. Faraci - Chairman, Chief Executive Officer and Chairman of Executive Committee Carol L. Roberts - Chief Financial Officer and Senior Vice President Timothy S. Nicholls - Senior Vice President of Printing & Communications Papers - The America's Region Mark Stephan Sutton - Senior Vice President of Industrial Packaging Thomas Gustave Kadien - Senior Vice President - Consumer Packaging and Ip Asia

George L. Staphos - BofA Merrill Lynch, Research Division Mark A. Weintraub - The Buckingham Research Group Incorporated Alex Ovshey - Goldman Sachs Group Inc., Research Division Gail S. Glazerman - UBS Investment Bank, Research Division Mark Wilde - Deutsche Bank AG, Research Division Chip A. Dillon - Vertical Research Partners, LLC Mark W. Connelly - CLSA Limited, Research Division Philip Ng - Jefferies LLC, Research Division Anthony Pettinari - Citigroup Inc, Research Division Albert T. Kabili - Macquarie Research

Ladies and gentlemen, thank you for standing by, and welcome to the International Paper Fourth Quarter and Full Year 2013 Earnings Conference Call. [Operator Instructions] It is now my pleasure to turn the call over to Jay Royalty, Vice President of Investor Relations. Please go ahead, sir.

Thank you. Good morning, and thank you for joining International Paper's Fourth Quarter and Full Year 2013 Earnings Conference Call. Our key speakers this morning are John Faraci, 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 2 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 2013 earnings press release and today's presentation slides. Lastly, given our expanded disclosure around our Ilim JV, Slide 4 provides context around the joint venture's financial information and statistical measures. With that, I will now turn the call over to John Faraci. John V. Faraci: Thanks, Jay, and good morning, everybody and thanks for dialing in. Let me go over the format that we're going to follow this morning. First, I'll review our full year 2013 results. And then turn it over to Carol Roberts to speak to the fourth quarter. And she'll cover the performance of the individual businesses. Then we'll cover the first quarter, as well as the 2014 outlook. And as we usually do, we'll open up for your questions. So I'll start with the full year. For the full year, International Paper achieved record operating earnings of $1.4 billion, as well as record cash from operations of $3 billion, driven by margin expansion across many of our businesses. EBITDA increased from $3.7 billion in 2012 to $4.1 billion in 2013 and EBITDA margins across the enterprise increased by 80 basis points. This drove strong free cash flow of $1.8 billion, which enabled us to return $1 billion of value to shareowners through dividends and share buybacks and strengthen our already strong balance sheet by paying down an additional $650 million in debt. We had solid operational performance across our key businesses. Additionally, we saw good progress in the ramp-ups at Ilim by the end of the year. We'll talk about that a little bit more. For the full year, however, though, higher cost of the startups of the projects and the devaluation of the Russian ruble on the JV's U.S.-denominated debt significantly impact the joint venture's year-over-year results. We spent a good portion of last year working hard on the opportunity to spin and merge xpedx with Unisource. And as I think most of you know, last week, we announced that we signed a definitive agreement with Unisource and Bain Capital and expect to -- that deal to close this summer. We'll also talk more about that a bit later. So as we look back on 2013 for International Paper, I'm very pleased with our progress and the results, which did result in us exceeding our cost of capital for the fourth consecutive year. Moving to our financial snapshot. I'm now on Slide 6. Revenue was up 4%, despite, I'd say, a challenging economic environment around the world. EBIT was up $400 million year-over-year and EPS increased by 19% to $3.16 a share. And as you can see on the slide, we had a significant increase in free cash flow year-over-year, up $200 million from $1.6 billion to $1.8 billion. This next slide shows our history of return on invested capital. And as I said, this is the fourth year in a row of returns above our cost of capital. Turning to Slide 8. International Paper's cash flow story and our free cash flow of $1.8 billion continued a strong trend of free cash flow results since 2008. I think its evidence that the company's results are less cyclical than they've been historically. And as we look to the future, we remain confident in the sustainable nature of our strong free cash flow. We also believe we can continue to grow it over time. Carol is going to cover the fourth quarter, but I'd say that we finished the year in terms of very strong free cash flow, almost $600 million in the fourth quarter, which is a run rate well in excess of $2 billion. So turning to uses of cash, which we talk a lot about and all of you have an interest in. We've done what we said we would do. In 2013, we returned $1 billion to shareowners. In September, we increased the dividend for the second time since outlining our dividend policy in 2012. We also obtained authorization from our board to buy back $1.5 billion of stock. And as of yesterday, we purchased roughly $530 million of -- at an average price of just over $45 a share. We are taking advantage of the opportunity to buy back shares at prices we feel are below the intrinsic value of International Paper. And you can see the other major uses of cash that are consistent with our capital allocation strategy, which we shared with you. So with that as a summary of 2013, I'll turn it over to Carol. Carol L. Roberts: Thanks, John, and good morning, everyone. Turning to the balance sheet. I'm pleased to report that we've met our commitment to reduce our debt-to-EBITDA ratio below 3x by the end of 2013. As John mentioned, we paid down balance sheet debt by $650 million. And we also saw our pension gap come down by $1.9 billion, which was a combination of strong asset performance, as well as an 80 basis points increase in the discount rate by year end. We finished the year with a cash balance of $1.8 billion. So all of this puts us in very good shape from a balance sheet perspective for the foreseeable future. Going to the next slide, taking a look at the financial bridge from '12 to '13. As John mentioned, we made solid progress on several fronts. Most notably in pricing, and that was largely driven by our efforts in our North American Industrial Packaging business. Volume was down slightly, and that was mostly in our Industrial Packaging business. And as I talk later, you'll see that our Industrial Packaging volume was in line with industry performance for the fourth quarter. So we closed the gap that we have had for most of the year. Operations contributed very favorably to results. And the decision to rationalize capacity at both the #2 paper machine at Augusta and the Phase 1 of the Courtland shutdown was a headwind for the year of -- was $0.06. Input costs in aggregate were up a little over $200 million year-over-year. That was about as we expected, but the makeup was probably a little bit different because it was largely driven by increased fiber cost in the second half of the year. At Ilim, the cost of the project startups coupled with the noncash FX impact on the U.S. denominated debt negatively impacted EPS by $0.23. So all in, 2013 was a strong year of progress and results, and we exited the year with a lot of momentum that's going to carry us into 2014. Turning to the fourth quarter summary. As John mentioned, it was a very solid quarter, in which we generated our strongest free cash flow of the year with price improvements across all of our North American and Brazilian businesses. Our North American Industrial Packaging business delivered very strong results, finishing the year with industry-leading margins, and this was despite 2 less shipping days, seasonally lower demand that drove our decision to take 322,000 tons of downtime, of which 46,000 tons were maintenance related. The balance was taken to match our production to our customers' demand. A very positive note was that for the first time since acquiring Temple-Inland, as I mentioned, our year-over-year box comp was equal to the industry, closing the gap on volume performance that we had seen since the acquisition, due to business that we shut through that process. Overall, we saw a very encouraging demand trend from our customers through the fourth quarter. But as you know, we've had some very significant weather events in January, and this has impacted our ability to run and ship products. To date, this amounts to roughly 40,000 tons of lost production and customer demand through January and early February. But despite this setback, we do expect demand for the balance of the quarter to be consistent with the trend we saw in the fourth quarter. We made good progress on the shutdown of Courtland and the transition of products across our North American Printing Papers system, and we'll talk a little bit more about that. And the project at our Ilim JV continues to ramp up, but we did see seasonally higher input costs, as well as some FX headwinds that masked the progress for the quarter. Taking a look at the fourth quarter financial overview on Slide 13. We saw very good year-over-year improvement for the quarter really across the board, with EBITDA margins, as you can see, up 140 basis points. And all this culminated in very strong free cash flow for the quarter end and for the year. So looking at the fourth quarter year-over-year, IP earned $0.83 per share versus $0.69 in the prior year. Pricing was up, driven largely by Industrial Packaging. Overall, volume was flat, but the cost of the market-related downtime did negatively impact the quarter by $28 million. The rationalizations at Augusta and Courtland impacted the year-over-year results and input costs, mostly fiber, were up substantially. Ilim FX and ramp-up costs were slightly unfavorable as well. And tax was unfavorable in the quarter in a year-over-year basis, due to a very unusually low tax rate that we saw in the fourth quarter of '12. Interest rate -- our interest expense was favorable. And this was driven by a tax reserve reversal in the quarter, as well as lower interest expense, as we did pay down balance sheet debt throughout the year. Miscellaneous year-end corporate items were favorable. Moving on to Slide 15. Let me go down now and take you through the businesses. Starting with Industrial Packaging. In the fourth quarter of '13, we had a strong quarter, particularly considering the cost of the downtime that I mentioned that we chose to take to balance our system with 2 fewer shipping days and the seasonally lower demand that we see in the fourth quarter. As I mentioned earlier, we took 276,000 tons of market-related downtime in the quarter, at a cost that we would estimate at about $35 million. On the positive, we captured the final benefits of the spring box price increase, where we saw prices up $9 per ton from the third quarter to the fourth quarter, as we expected. That brings year-over-year box prices up $82 per ton. As I mentioned, we closed the year-over-year volume gap on boxes, but we did ship less containerboard exports in the fourth quarter. Overall, our operations performed well. I would note that our EMEA Packaging results did fall short of our expectations, as we had hoped to realize about $10 million of margin relief through increased pricing in the face of increased board costs, but that did not materialize due to pretty competitive market conditions that continue to exist in our European business. Turning to Slide 16. I just want to take a minute and put in perspective and highlight the tremendous success that we've had in our North American Industrial Packaging business. Not only have we grown this business in scale over the last several years through the 2 strategic acquisitions, but we steadily expanded the margins along the way. And this has resulted in 2013 as a $2.6 billion EBITDA business with 22% EBITDA margins in the year. So a lot of progress, and the exciting thing is there's more to come. If I look on 17 in terms of the relative EBITDA margins in the North American Industrial Packaging business. Once again, we generated the best margins in industry despite the downtime associated with our actions to match our production to our customers' demand. The optimization opportunities that I referenced that we still have across this business coming off the 2 major acquisitions, just a really large systems, we believe, gives us further opportunity to expand our margins versus our key competitors. Moving away from Industrial Packaging to the Consumer Packaging business on Slide 18. You can see that pricing was up year-over-year, as additional realization of the summer SBS increase benefited earnings in the quarter. Volume increased as well, and which is a great new story, driven by the improved demand as evidenced by the backlog that improved. And that really held throughout the second half of '13 and, we believe, carry into '14. The quarter was impacted by 2 very large scheduled maintenance outages at our mills at Augusta and Texarkana. If you look at the margins in this business, on 19, consequently, due to the outages that we experienced, the margins in the quarter were well below our average. Our full year margins though do remain 250 basis points above our key SBS competition. Our outlook for '14 in our Consumer Packaging business is encouraging, given the fundamentals around backlog and demand that we believe will carry through. But I do need to mention, and we'll talk about it a little bit more, the business is going to be impacted in the first quarter by some very difficult weather conditions that we saw not only in early January but also we've experienced through the end of January and into early February. Turning to the Printing Papers business. Earnings were virtually flat year-over-year, which I view as very favorable, given the impact of the Courtland shutdown and all the associated transition costs. The initial benefits of the North American cut-size increase began to come through and prices were up roughly $20 per ton as we exited the quarter. And at the time of this call, we fully implemented the October price increase and expect to realize increased prices of more than $50 per ton on all affected grades. This, along with increased prices in Brazil and India, enabled us to close the gap on pricing year-over-year, which I think is a very important and impressive accomplishment. Additionally, mix in the North American business improved in the quarter as we exited significantly lower-priced export volume. North American volume was down accordingly, but strong seasonal volume in Brazil and Europe offset these losses. Talking about operations and costs. We were largely impacted by the Courtland shutdown, but we offset a bit of these costs by very strong operations in Franklin and Brazil. And we also benefited from the weaker Brazilian real, as margins expanded on our export volumes. So all things considered, I would say a very good quarter for the papers business. So giving a quick update on Slide 21 on the Courtland shutdown and the North American papers transition. First, I'd like to take a moment to recognize our colleagues -- all our colleagues at the Courtland mill. The shutdown is a significant event not only for the mill but for the community. And the team there has done an incredible job of handling what is a very difficult situation. I can't say strongly enough how proud we are of the team. And some good news, is many of our Courtland colleagues have been placed in open positions at our operations throughout the rest of the Southeast and in our other businesses, as well as in our papers business. So as you know, the first 2 machines went down in November. All of the trials and qualifications at the others mills and with our customers have gone very well and are ahead of schedule. The costs we incurred in the fourth quarter were generally in line with what we expected. However, as I mentioned, we ran well across some of the other mills and managed spending very well to reduce the impact. As far as the plans for the balance of the mill, the team has accelerated the shutdown of the remaining 2 machines, both of which actually went down this past weekend. Due to the fact that we are shutting down the 2 largest machines, as well as the remainder of the mill, we will see the greatest amount of shutdown costs and impact in the first quarter. So for the first quarter, costs will be up -- or be $20 million more than in the fourth quarter. Now that's the peak. Thereafter, we expect costs in the second quarter to be half of the first quarter. And then there will be some residual costs that will continue into the third and fourth quarter of roughly $5 million to $10 million per quarter. Turning to xpedx, Slide 22. Weaker demand across the printing and facility solution segment led to a challenging quarter for the business. The great news is, as John mentioned earlier, we're very excited about concluding the definitive agreement phase of the pending transaction. And I want to take a couple of minutes and recap where we are on that. So turning to Slide 23. We signed a merger agreement with Unisource last week. And we're working on the registration statements for the SEC review process, which we expect to file in the coming weeks. As we announced last Tuesday, the IP shareholders will own 51% of the new company and IP will receive a cash dividend from NewCo of $400 million at the time of the spin. This will be a Reverse Morris Trust transaction, which will be tax-free to IP and its shareholders, pending IRS approval. IP has the potential to receive an additional cash earn-out of up to $100 million in 2020, if certain conditions are met. And with the exit of xpedx from IP, IP's overall margin and return on invested capital will increase. Regarding funding for the new company. NewCo has received bank commitments for asset-backed financing of $1.4 billion. But it is expected to carry an additional debt load of roughly $800 million and an initial debt-to-EBITDA ratio of 4 to 5x, which, of course, will be expected to reduce over time as synergies are realized and EBITDA increases. xpedx currently has total net assets of roughly $700 million to $800 million, of which approximately $100 million are fixed assets, all of which will follow the spin to NewCo. Of course, more information will be available, including xpedx and Unisource financials and NewCo pro-formas, once the registration statement is filed. Turning our attention to Ilim on Slide 24. The JV realized continued progress on the ramp-up of the major capital projects with the paper machine at Koryazhma and the pulp line at Bratsk. However, this was more than offset by seasonally higher energy and wood costs. Additionally, earnings were further impacted unfavorably due to the continued devaluation of the Russian ruble and the resulting net unfavorable noncash FX impact on the JV's $1.4 billion of U.S.-denominated debt. Slide 24 provides a view of where the JV is in its current ramp-up relative to historical results and its potential given the expanded capacity capability. So let me walk through this slide. The top -- the table at the top outlines how depreciation and interest expense have changed as a result of the capital project and associated debt. You can see that prior to the projects, depreciation was averaging $125 million per year. And that post-project, depreciation has increased to approximately $225 million annually. Similarly, interest expense has increased from the pre-project level of $15 million to about $75 million annually. Now the bottom chart illustrates where the JV is in the ramp-up of EBITDA. It's important to note that both FX and pulp prices in particular are highly variable. So for both the '14 estimate and the fully ramped potential target is assuming stable FX and pulp prices at today's level. So you can see the fully ramped-up potential is $150 million to $200 million higher than the 4 year average that occurred prior to the project construction startup. 2013 was significantly impacted by the projects, although you can see, we did make progress in the second half of the year. So not meaning to be too particular here, but taking EBITDA, subtracting depreciation and interest, tax affecting the results and dividing by 2 for IP shares gives you a pretty good approximation for the equity earnings for International Paper. And clearly, we expect a better year from the JV in 2014, and more importantly, considerable upside for the future. So turning to 26 and looking ahead to the first quarter. We expect seasonally lower volume in Brazil and Europe, along with a coated paperboard project that we're doing at Kwidzyn that will impact volume and the full shutdown at Courtland. These things will more than offset the benefit of the 2 additional shipping days in North American packaging. Additionally, it's currently estimated that the severe weather events throughout the month of January and into February will impact volume by 40,000 tons, primarily across our Packaging businesses. Pricing will continue to improve with full implementation of the fourth quarter North American cut-size price increase. Additionally, we'll see further mix improvements across our North American papers business, as the Courtland transition continues. And we do expect some mix improvement across North American Industrial Packaging as well, driven by higher volume of boxes as a percent of our total volume. We also expect some modest benefit on pricing in Brazil papers as well. Moving to ops. I highlighted the expected costs at Courtland, which is a large item in the quarter but we do expect some good progress at Orsa, offset by the impact of the Kwidzyn project. Additionally, the severe weather has impacted many of our mill operations in the South. Input costs in the quarter will be significant, driven largely by the extreme temperatures across much of the U.S., both in terms of unit pricing and consumption. Under normal circumstances, input costs would have been up seasonally in the quarter probably around $20 million. But on top of that, we estimate the incremental impact of the weather could be as much as $30 million. We also have a big outage quarter with in incremental costs over the fourth quarter of $47 million. Earlier, I provided an update on the Ilim JV, along with an outlook for '14. We will continue to ramp up, and that's going well into '14. We typically try not to forecast changes in FX, but I feel like I should point out that the ruble has weakened fairly significantly over the last month. And so had we ended the quarter January 31, the negative FX EPS impact would have been around $0.10. So moving to 27. In summary, we exited '13 with a lot of momentum. However, we are dealing with some temporary headwinds that will impact the first quarter. But that does not diminish our view of the full year potential, as John's going to discuss in a moment. The most immediate significant impact that we should be beyond shortly is the severe winter weather, which we estimate will impact the first quarter earnings by $40 million to $50 million. We will realize price improvement in North American papers and pulp, as well as in our Brazilian business on previously announced increases. And last week, we announced additional price increases in North American papers, pulp and coated paperboard, as well as Brazil paper and packaging, being effective with March. Volume will increase with more shipping days in North America. However, we talked about the impact of the winter storms has been significant and will offset at least half of this benefit. And as we talked about, the continuation of the shutdown at Courtland will impact cost and volume in the quarter. As we mentioned, we do have an increase in quarter-over-quarter maintenance outages as well. Energy costs will be significantly higher, both due to seasonality, as well as weather impacts. But these will moderate by the end of Q1. Finally, we expect to pay cash taxes at levels closer to book taxes and the interest benefit result in the fourth quarter will not repeat. So with that, let me turn it back over to John, so he can speak to the full year outlook and wrap up. John V. Faraci: Okay, Carol, thanks. Let's turn our attention now looking forward to 2014 and the bigger global picture. I'm on Slide 28, the map. This slide shows the most current collective outside view of year-over-year changes in GDP in the major regions around the world that we operate. So sitting here early in the year, recognizing it's early, the macro environment from my perspective actually looks and feels somewhat better than it is as we exited 2013. Demand is modestly better, although it's hard to see, given the recent widespread weather disruptions in North America that Carol talked about. So the bottom line as we look forward to 2014, we're not counting on a lot of help from North America or global economies, but we see global group GDP inching up. If North American global GDP and demand are better, that's a good strong tailwind for us. But internally, I think this is important, we have many levers to pull, which are within our control, which will meaningfully impact results this year. And I'd like to highlight a couple of them. In North America, we have a large opportunity within our Industrial Packaging business for optimization. In Industrial Packaging, we've been very busy integrating 2 large acquisitions over the last 5 years and we haven't had a chance to optimize the combined business, which has grown from $4 billion to over $12 billion. The optimization opportunities are significant. They're around system integration, commercial and portfolio decisions, cost-reduction opportunities that are unique to International Paper because of these 2 acquisitions and best practices sharing. There's a significant opportunity with the emerging trend in our Coated Paperboard business and Foodservice for customers to move away from foam cups to paper cups. Companies like McDonald's have already made that decision. That's going to benefit our Foodservice business and our Coated Paperboard paper business. We talked a lot about Courtland, and the repositioning of the papers business is well underway. The end result, when we get to the back end of next year, is a smaller, a better and more cost-efficient footprint for our Printing Paper business in North America. Outside North America, we have projects at Ilim and synergy opportunities at Orsa that we didn't get in 2013 at the Brazil packaging business. At Kwidzyn, Poland, we're completing -- we'll complete it this quarter a coated paperboard project that will enable IP to enhance and improve our product offering to customers and expand our margins at one of our best facilities in the world. So a lot of things that we've got going on internally that are independent of the macro environment. So let me move to the next slide here and just give kind of a high-level financial outlook for 2014. Overall, we expect another meaningful increase in EBITDA results of roughly 10% in 2014 over 2013. As a result, free cash flow generation should approach $2 billion. This will enable International Paper to return a significant amount of cash to shareowners through our recently increased dividend and the share buyback program, which we have underway. We've been very active and opportunistic. As we've previously highlighted, we'll continue to have more runway with the dividend as we generate these results, and we'll be evaluating our dividend as the year progresses. We'll also make a contribution to pension fund of approximately $450 million. And we'll continue to evaluate investment opportunities that have the potential to create significant value for our shareowners. With the expected proceeds from the xpedx spend, our cash position is strong as is the outlook. So let me wrap up things and then we'll open up for questions. As Carol said -- I'm on the picture now that shows the -- an interstate highway in Atlanta, I think, a week ago. January and the first couple of days of February have been a challenge. And I think this picture sums it up. We've got a temporary hiccup in terms of higher costs, lost production, lost sales. But importantly, the truck there isn't upside down, it's just sideways. So I think we're going to get beyond this, and 2014 certainly looks like a significantly better year for International Paper on top of a good year -- good solid year in 2013, even with January hopefully behind us. So in summary, 2013 was a strong year progress results for IP, we move into '14 with a lot of internal initiatives. We expect solid growth and EBITDA and free cash flow and EPS for the year. I think IP is better positioned than ever to achieve the results that, frankly, should be records for -- on a number of fronts. And in 2014, we're going to take another significant step toward our near-term goal of achieving over $5 billion of EBITDA, $2.2 billion free cash flow. So with that, operator, I'll turn it back to you and we'll open the line for questions.

[Operator Instructions] Our first question comes from the line of George Staphos of Bank of America. George L. Staphos - BofA Merrill Lynch, Research Division: I jumped on the call a little bit late, so I apologize if you already discussed this. But with uncoated freesheet, can you comment, John or Carol, what percentage of your volume is the current level of pricing increase in the market that you just announced impacting? And when you're done with all of the Courtland-related realignment, how much volume do you expect to return back to the market? John V. Faraci: George, Tim Nicholls will kind of take that. Timothy S. Nicholls: The first price increase, it was not on 100% of the volume. There were some branded products that were not included, but it was a solid 80-plus percent of our capacity product lines. And in the month of January, we have completed implementation of that increase. So it was a little bit -- through the fourth quarter, price increase and the numbers that we're showing also include the export impact, which was down in the quarter. But in North America, we saw prices move up 20 through the quarter. And then for the month of January, we completed the increase. George L. Staphos - BofA Merrill Lynch, Research Division: Right. But on the March increase, how much of your volume is that impacting? Is that 100%, 20%? Timothy S. Nicholls: No. It's 100%. George L. Staphos - BofA Merrill Lynch, Research Division: 100%? Timothy S. Nicholls: 100%. And so on the March increase, we're up $70 on all of our commodity grades and $40 on branded products... George L. Staphos - BofA Merrill Lynch, Research Division: Okay. And how much volume do you think, when we're all is said and done, will you have returned to the market from where you were prior to the Courtland announcement, if you can talk to that? Timothy S. Nicholls: Well, we announced capacity and we're shutting down 765,000 tons of uncoated freesheet capacity out of Courtland. And at this point, all the machines are down. So there was close to 1 million tons total, including coated. There's basis weight changes. There's a number of puts and takes. But it's going to be in that 750,000 ton range. George L. Staphos - BofA Merrill Lynch, Research Division: Okay. And I guess, the last thing, and I will turn it over, can you comment at all on the industrial side what type of -- I know the weather is having an effect here. But what kind of start to the quarter are you seeing on a volume basis year-on-year? And I know talking about economic downtime is difficult. But can you comment, as you sit here today, what economic downtime you might have given your current operating profile?

This is Mark Sutton. On the demand question. You're right, the weather interruptions kind of masked what we're seeing. But I'll tell you, before we got into the weather, we were pleased with the way the volume profile was developing in the U.S. box business. And actually, after the first weather event, we were headed toward offsetting that. The second round of activity is, as Carol described earlier, we're just not sure about. But it will be a temporary issue. We'll put it behind us. But when we looked at our fourth quarter and we looked at the way December unfolded for us and for the market, we're actually on the positive side of sentiment for volume. And as you know, and you can look at the numbers that we put in the appendix charts, there is a seasonality to the market demand. There's also a seasonality, obviously, to International Paper's demand. There's also a seasonality to our capacity that we create by managing our maintenance outages. So we really need to run our system very well through the first couple of quarters of this year, given the amount of maintenance outages and other planned activities we have. So we have really have to execute very well going forward. John V. Faraci: Let's say that looking at the GDP numbers, if we get a continuation of what we saw in the third and fourth quarter, we're going to have a positive, better box demand market than we had last year, which is basically flat. If we're at 3% GDP, we're not going to have a flat box market like we saw in 2013. So I think that's reason to be quite positive on how the year is going to play out. I mean, it's early on, but the macro data is not blowing out but it's incrementally better.

Our next question comes from the line of Mark Weintraub of Buckingham Research. Mark A. Weintraub - The Buckingham Research Group Incorporated: Two quick ones. First of all, Tim, on the uncoated freesheet, can you give us a sense as to how much of the first initiative at the end of the day you were able to bring through? Timothy S. Nicholls: Yes. We feel like we had a full realization, Mark. We -- as I was saying, we had about $20 in the quarter but we finished up the rest of the implementation in January. So as we exit January on the $60 increase from last year, we felt like we had a full realization. Mark A. Weintraub - The Buckingham Research Group Incorporated: Great. And then second, Carol and John, you both made several references to portfolio optimization in containerboard -- improving profitability in containerboard. Any chance you could give us a little bit more in the way of targets and timing?

Mark, we have talked before around the optimization that John referenced, at least the initial line of sight, to being $200 million. And we said as we entered '14 that would be a multiyear program. And we think a big portion of that, we think, we'll be able to realize in the coming couple of years. However, we're not done looking, and optimization is a general term. But it really is about making this business the best it can be and helping all components of the business reach its potential. And we're still discovering new opportunities, as John said, now that we're finished with the integration and synergy -- early synergy acquisition activities. John V. Faraci: And very different situation running a $12 billion business versus a $4 billion business with the number of facilities, the segments we've got, the options we have and not a lot of that stuff is going to be big capital project related. So we're pretty positive that we got a lot of opportunity to mine here over the next couple of years.

[Operator Instructions] Our next question will come from the line of Alex Ovshey of Goldman Sachs. Alex Ovshey - Goldman Sachs Group Inc., Research Division: First on the North American industrials business. Can you talk about how your inventories moved through the fourth quarter? And how do you anticipate to manage inventories through the first quarter, especially given the significant downtime that you expect to take during the quarter?

Alex, our inventories through the fourth quarter trended down, which is what we planned for. It's very difficult to forecast customer demand too far out, given the nature of our customers' business, so a lot of just-in-time. But we believe we're set up well for what we need in the first quarter from a demand standpoint but also, referencing my earlier comment, from our own supply profile, given our annual outages start in the first and second quarter. So we feel real good about our inventory levels. It's something we manage very closely. We've got a lot of new tools to be able to do it now that our recently acquired mills that we got from Temple are all on the same supply chain system as the other legacy mills. And so we're really starting to work at optimizing that. But we feel good about the inventory we have. We're going to make the board that we need for the customer demand we have and the service level we need to provide. Alex Ovshey - Goldman Sachs Group Inc., Research Division: And on the pension contribution, do you already know what quarter you expect -- what quarter during 2014 you expect to make the contribution in? Carol L. Roberts: Alex, this is Carol. We'll put it in throughout the year, it won't go in all at one time and it will pretty much meter in fairly evenly throughout the year.

Our next question comes from the line of Gail Glazerman from UBS. Gail S. Glazerman - UBS Investment Bank, Research Division: It looks like you took a couple of charges both, I guess, for some restructuring in Asian packaging, as well as India. I was just wondering if you could talk about those specifically and then maybe more broadly what you're seeing in the specific markets? Carol L. Roberts: Yes. Gail, you're referring to the special items? Gail S. Glazerman - UBS Investment Bank, Research Division: Yes. Carol L. Roberts: Yes. So on the special items, we did take a charge. We wrote off the goodwill that we had in India. And so that's pretty straightforward. And then we had a small business in the box business over there that we closed. It wasn't corrugated, it was another packaging business that just was eluding money and not productive, so we took that down. Gail S. Glazerman - UBS Investment Bank, Research Division: Okay. Just more broadly what you're seeing in India and China? John V. Faraci: I'd say Gail, I'll let Tom Kadien comment. Both India and China feel like they -- in China's case, the car was driving 80 miles an hour, now it's 60 miles an hour. It feels slower but it's still pretty fast growth. And India is probably the same thing from a -- at a slightly lower number. But they're still large markets that are going to grow and their economies are growing, but at a slower rate than they were in 2012 and '13.

Gail, this is Tom. The box business in 2013 and in the fourth quarter in China is growing at about 4%, so that's much improved. We feel like we've got our hands wrapped around that. The business that we shut down was an expanded polystyrene foam inner packaging operation. So we're really at a point where we see the box business starting to get some -- get its legs underneath it and starting to grow. In India, we've struggled with really wood cost increases throughout the year. And as we exit '13, those wood costs have started to flatten out. And we're still selling everything we can make and we're seeing productivity improvement, so we expect an improved '14 in India. John V. Faraci: If you think about that 4% growth, that's -- on a 40 million ton market, that's 1.6 million tons of boxes a year. And if you do the math, it's a lot of volume. Gail S. Glazerman - UBS Investment Bank, Research Division: Okay. And just quickly on domestic markets. The wood cost inflation you've seen over the last few quarters, to what extent do you see that as weather related that could come back? Or do you think it's more structural with recovering OSD markets and energy demand? John V. Faraci: I think the spike we saw, Gail, is all weather related. It was mostly on hardwood, not in pine, which is where the OSB stuff is going to show up. And it's amazing with no tropical storms or hurricanes hitting the East Coast -- I think I got this right, Virginia, North Carolina, South Carolina had the highest rainfall in over 100 years. And we have a lot of mills running along that coast that got impacted, Riegelwood, Georgetown, Eastover, Augusta, Savannah. So we see it as temporary. It's going to take a while to work that down, but it's -- I think it's peaked.

Our next question comes from the line of Mark Wilde of Deutsche Bank. Mark Wilde - Deutsche Bank AG, Research Division: A couple of questions on the offshore businesses. First, it seems like the pace of the Ilim ramp-up has been a bit disappointing, particularly in light of how strong that softwood pulp market has been. Can you just discuss the reasons for the kind of delayed ramp-up at Ilim? John V. Faraci: Well, let me give you a couple of numbers, Mark, kind of put that into perspective because yes, it did go a little slower than we thought. But this is the project that, first of all, is done. It's completed. That's a milestone because projects like this in that part of the world always don't get completed. And we made 66,000 tons in the third quarter, 105,000 tons in the fourth quarter. And in January, we produced 36,000 tons, which -- that run rate is twice what the fourth quarter was. So we're starting to come up pretty quickly. We're probably a quarter behind in terms of -- but that's behind us, I'm looking ahead. And with the progress we made in January both on the volume side, the quality side and the cost side, there's a lot of positive runway there. But it's -- they were complicated projects, Mark. Operating in Siberia in the winter with the number of people we had to mobilize and the number of project management people we have from around the world cycling in and out in a very tough environment wasn't easy. But with our partner -- we could have done it without a partner. We proved we could do it. And then Koryazhma, I'd say that's a different story. We're -- in January, we were on the CIP, that's our capital project run rate of 200,000 tons. So we're right there in terms of uncoated freesheet production. And we're already -- I think we've made 700 tons of coated papers. So when that project is fully balanced out, we'd have 130,000 tons of uncoated freesheet and 70,000 tons of coated paper. But that's running -- that's the machine we moved from Scotland from Inverurie. That's running at its capacity already. Now we got to optimize the cost and get the quality and all that stuff down. But we're qualified on branded cut-size. Mark Wilde - Deutsche Bank AG, Research Division: Okay. And the other offshore piece I wondered about John was just Orsa down in Brazil. I think your EBITDA margin was 9%. If I look at the numbers that both Klabin and Rigesa put up, they're 2 to 3x that level, maybe even close to 4x in Klabin's case. What's kind of a reasonable target and reasonable time line down at Orsa? You've now - you've been in there for about a year, you must have a pretty good sense. Timothy S. Nicholls: Mark, it's Tim. Part of the problem was we got hit with some onetime accounting charges at the end of the quarter. The underlying business we saw improve, the first couple of months of the quarter, our margins had moved back up into the mid-teens, 16%, 17%. And then we had a bit part of that wiped out in the last month of the quarter. My view is we still have a business that can earn in the mid-20s. And we'll see a meaningful change in performance this year. Part of what we dealt with last year, we got squeezed on OCC. We've now caught up to that on the price side. And quite frankly, we found out that we had to spend more on maintenance in some of the facilities than we thought we were going to have to. We think we've got that mostly behind us now, too. So price has moved in the right direction. Volume has moved in the right direction, and I think we'll run better. We've gotten these onetime accounting charges behind us. So I think 2014 will see a meaningful improvement. Mark Wilde - Deutsche Bank AG, Research Division: So to get to kind of the mid-20s, Tim, do you have a sense of how long that will take you? And how much incremental capital that might involve? Timothy S. Nicholls: I don't think it's going to take a whole lot of capital. The capital that we're spending is on smaller items. It's about automation in some facilities. It's about getting -- quite frankly, getting people out of facilities. They've thrown a lot of labor at the operations for a long time. So in terms of the forecast on when we get to the mid-20s, there's a lot of puts and takes there. I think we'll be -- we'll take a meaningful step towards that this year, and we'll see what 2015 brings.

Our next question comes from the line of Chip Dillon of Vertical Research Partners. Chip A. Dillon - Vertical Research Partners, LLC: Carol, first question for you. Just to be clear, on the $2 billion-ish free cash flow number that you are putting out for 2014, that is before the pension contributions, is that right? Carol L. Roberts: That's correct, Chip. Chip A. Dillon - Vertical Research Partners, LLC: Okay, okay, just want to be clear. And then when you look at the -- at Ilim, this is a quick follow-up -- it was very helpful to have that slide with the sort of the long-term guidance, and you say the equity income number would be $100 million to $120 million at current prices. Is sort of the right ratio to think about every $10 a ton might be another $10 million or $0.01 a ton -- or $1 a ton is $1 million? And the way I'm getting there is, I believe, the combined tonnage at the 2 mills there is about 2.5 million tons and, obviously, your equity ownership in that is about half of that. So if you think about it, if you got a $10 ton increase, you would get something on the order of magnitude of $10 million or $12 million. Is that pretty much the way to look at it? Carol L. Roberts: That feels about right. Chip A. Dillon - Vertical Research Partners, LLC: Okay, got it. And last quick one on Ilim. You mentioned the $0.10 hit from currency. Is that -- if I heard you right, that's taking into account the ruble decline from the, I guess, the end of the year to where it stood yesterday? Carol L. Roberts: Yes. I normally wouldn't comment on that, but it is depreciated pretty significantly through the month of January. So since we're on the call, I thought I would take an opportunity to point that out. You need to take a look at that as the quarter progresses.

Our next question comes from the line of Mark Connelly of CLSA. Mark W. Connelly - CLSA Limited, Research Division: Two questions. If we try to look past the messy first quarter, your overall input cost outlook is stable. I'm curious how that breaks down because we're hearing from others that chemical and labor could be a headwind. RISI has OCC trending up. So I wonder if you could just share with us how that input cost ends up stable in your view. And that's all I got. Carol L. Roberts: Yes. This is Carol. Actually, if we just -- if you look at Slide 30, we talked about input cost inflation in the $175 million to $200 million range for the full year. So we didn't really talk about it as stable. I think what we were -- maybe I'm not quite sure which part, but maybe referring to the fact that there's a spike in the first quarter on gas, and that will come back down to a more reasonable level. Now that's just input cost. We do have other inflation that happens. And then our goal is to have our initiative to offset that type of inflation through our productivity initiative that we have across the company. Mark W. Connelly - CLSA Limited, Research Division: Okay, that's actually very helpful. Sorry, I'm misreading your comments a little bit. That's all. Carol L. Roberts: I'm glad you clarified.

Our next question comes from the line of Philip Ng of Jefferies. Philip Ng - Jefferies LLC, Research Division: In terms of your EBITDA guidance of 10% increase. What do you guys baking in, in terms of price? I know you've announced a few price increases across your portfolio. So I just want to get a sense on that front. John V. Faraci: We do not get -- try to forecast prices here because we can't and we shouldn't. So I'd say, we've got some price increase momentum that's been talked about, as we've mentioned taking the questions, going through the presentation. So we feel pretty good that we've got a line of sight to that kind of increase with plans we have in place. Philip Ng - Jefferies LLC, Research Division: Okay, that's helpful. And then John, I mean, you guys are going to get a lot of free cash flow in 2014 going forward and you got some cash coming in from the xpedx divestiture. Just from a high level, some of your acquisitions and some of your investments -- recent investments on the international front, you've seen somewhat mixed results. Are you kind of looking at the hurdle rates a little differently going forward? And how should we be thinking about that front? John V. Faraci: So we do have higher hurdle rates when we're investing in parts of the world that are outside the developed markets. And we're not going to make investments unless they meet our hurdle rates. So we're disciplined about that. Philip Ng - Jefferies LLC, Research Division: Okay. And just one last quick one for Tom. The Sun JV actually turned positive from a profitability standpoint. Is that kind of good bogey going forward? Or is there some potential headwinds we've got to account for going forward?

Philip, the JV is seeing improved results. I'd say the market in China for coated board, demand is pretty good, probably a little bit better than we expected. Pricing is moving sideways but the improvement that you're seeing is really as we improve our mix at the joint venture and we sell more of the higher priced value-added grades, and fewer of the, I'll call, more commodity or folding carton end of the spectrum. So that's the improvement you see, and we think that's sustainable and will continue to move. John V. Faraci: And I guess, as I -- just thinking about your comment about investments outside North America, our biggest investments are in Brazil and Russia. Brazil's got 30% EBITDA margins. We've had 2 years of consecutive EBITDA improvement. We're generating a lot of cash. We had some currency headwinds down there when the real was strengthening, which were hurting our returns, but now our returns are getting better. We've got a great market position in that part of the world. So we're very pleased with our investment in Brazil. We'll get the Packaging business right. And in Russia, which is probably our second largest offshore investment, IP Russia, which is our paper business, is well above cost of capital returns, well above our hurdle rate. And we think Ilim is going to turn out to be a fabulous investment now that we've got this big capital projects behind us. So we've got some challenges in India and China, no question about it, for different reasons. But where our big offshore investments are -- and I haven't even talked about Europe, our paper business in Europe continues to perform very well and returning well above cost of capital returns. So I don't really see it that we've had -- we've struggled with the emerging market investment.

Our next question comes from the line of Anthony Pettinari of Citigroup. Anthony Pettinari - Citigroup Inc, Research Division: Just a question on uncoated freesheet. In recent months, we've maybe seen a little bit stronger volumes than some of us had expected. And I'm wondering, as you forecast 2014 demand, understanding you have a capacity adjustment, but can you tell us what level of industry demand you're expecting for North America? And is there any reason to think that demand might be a little bit stronger than the kind of the 3% decline that a lot of us plug into our models? Timothy S. Nicholls: This is Tim. Yes, I think there is reason to believe it might be stronger. Most of the forecasts that are out there are still between 3% and 4%, but I think they'll be updating it based on how last year ended. There's probably a little bit of pull-forward in December. But if you look at the underlying economy, we see an increase in white-collar workers. We also see an increase in consumption of paper per white-collar worker. It had been on kind of a downward trend and as you look at 2013, it leveled out, maybe even ticked up a little bit. Commercial print indices were up. Even mill volume last year performed better than expected. So if the economy continues to improve, I believe that there is potentially a modest help on the demand decline for this year. Anthony Pettinari - Citigroup Inc, Research Division: Okay, that's helpful. And then maybe just switching to containerboard. Can you confirm that the process of shedding some of the less attractive Temple-Inland business has basically run its course? And then, you referenced the 40,000 tons of lost production in January, primarily in packaging. Can -- should we assume that, that's basically just lost production? Or is it possible that you might get some of that back in February?

So Anthony, on the first question, I think we have really ended the shed of business that was related to acquiring and integrating Temple. And as Carol mentioned, we've really pretty much closed the gap with our performance versus the market, which was an objective of ours, and we saw progress throughout the year. On the 40,000 tons in January, a portion of that is probably going to come back. It's hard to tell how much because of the segments that you would say demand wouldn't get destroyed, it's just delayed. But for example, if it was demand in the restaurant industry and people couldn't get to a restaurant to go out to eat because of the roads or weather, it's up in the air whether they go out to eat twice later. So we're going to track it closely. But I think it'll be a mix of maybe lost demand and demand that comes back.

Our next question comes from the line of Al Kabili of Macquarie. Albert T. Kabili - Macquarie Research: Either John or Carol, could you just help us quantify on the weather impact? The $40 million to $50 million, it's quite a bit more above than would be implied by the 40,000 ton production issue you mentioned in January. So is that the remainder mostly costs on a nat gas side that's driving that? Or do you see other sizable volume headwinds elsewhere in the business driving that view on the headwind? Carol L. Roberts: Yes. I think it's a combination. It's definitely natural gas. Natural gas is probably a good $20 million of that, maybe 20 plus. I mean, the gas, it's spiked and it's staying off it, so the gas prices that we're seeing at least through February are much higher than what we had anticipated. Now natural gas responds pretty quickly, so it should get better. The other one is just the consumption in the mills of everything we use because it's been so cold. And we have had disruptions in operations. They're costly when that happens. So it's kind of a combination of all of the above. Volume being one piece. Albert T. Kabili - Macquarie Research: Okay. And then, I guess, a question, Mark, to the degree that box volumes stay flat for the remainder of the year, which has been the trend the last few years. Are you comfortable with the capacity and the size of the IP mills and/or box footprint?

I think, Al, on the assumption that volume stays flat, which we don't believe that's the long-term trend. But on that assumption, if you look at our current capacity footprint in containerboard and the seasonality that we described both on the demand side and the supply side, we like the footprint we have. You got to remember a couple of things. Every mill is not created equal. So some mills make linerboards, some make medium, some make both. There are lightweight and heavyweight products. And so a mix of recycled mills and virgin mills in our fleet allow us to flex our capacity in a pretty cost-effective way. And I think for the box system, we've done a number of rationalizations. There's still more to do that will fall under the category of optimization. But we like the North American box footprint we have. And I'll remind you that we have a multichannel strategy in our business. The North American box business that we own and operate is very important. But we're also an important player in the open market with very good customers in the domestic open market. And we also have a very meaningful strategic long-term position in containerboard export markets throughout the world. And those work in unison to really optimize our revenue line and our EBITDA margins, and we'll continue to do that. Albert T. Kabili - Macquarie Research: Okay. A final follow-up question for me to you is just how are you feeling about the additional optimization opportunity in the business? And does volumes appreciably change the ramp or your view at all on how that ramps up the next few years?

Al, I think volume definitely helps. If saw north of 1% it allows you to do some of the optimization activities maybe a little quicker. But when we talk about optimization, John mentioned that we're talking really about improving what we have that's unique to IP. So it's a mix of commercial activities, service offerings and, of course, on the cost side. Volume would definitely help give you a firmer foundation to work on that. But one thing that I did neglect to mention in your first question around the capacity is that we are still, as you know, buying a certain amount of containerboard from the 3 mills that we divested. And obviously, as we can see our way to make some of that board ourselves, we recapture that margin as well. So that's got to play out as we think about what our real permanent long-term capacity footprint is going to look like.

Our next question comes from the line of George Staphos of Bank of America. George L. Staphos - BofA Merrill Lynch, Research Division: Two quick ones on international. Can you provide a little bit more color on what you are doing in Kwidzyn? Obviously, it's a great mill and you make a lot of money in Poland. And how that project helps you further penetrate the market? And then just on the, I'm guessing, it was Andhra Pradesh, the goodwill write-down, I know you said, Carol, it was pretty straightforward, but what triggered that? John V. Faraci: Well, the project at Kwidzyn, George, is really about making a higher-end grade of coated paperboard. We'll make a little more volume, but basically, we'll move up the quality scale and be -- compete in some segments that are growing segments in Europe. And Kwidzyn is one of our crown jewels. It's one of the best mills we have in the world. We're making great returns there. And we want to keep that facility kind of at the forefront. And it makes uncoated freesheet, also makes coated paperboard. Just to comment about APPM. We knew when we bought APPM, we paid a full price and it was really kind of the price you had to pay to get into the market to learn the market and figure out whether International Paper could be successful there, both in paper and maybe eventually in packaging. And we just -- so that premium price was really expressed as goodwill, and we came to the conclusion that the proper thing to do is write it off, but we knew we paid that premium when we bought it.

And we have reached the allotted time for questions today. I will now turn the call back over to Jay Royalty for any closing remarks.

I'll just say thanks to all of you for joining the call. And as always, Michele and I will be available after the call. Our phone numbers are on Page 33 of the presentation. Everyone, have a great day.

Thank you. This concludes today's International Paper's Fourth Quarter and Full Year 2013 Earnings Conference Call. You may now disconnect.