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International Paper's John Faraci Named 2006 CEO of the Year for the Paper/Forest Products Industry by Financial Community

Monday, September 18, 2006

Press release from the issuing company

BEDFORD, Mass., Sept. 15 -- RISI announced today that International Paper Chairman and Chief Executive Officer John Faraci has been selected as the 2006 CEO of the Year. Faraci will be presented with the award on Oct. 5 at the 21st RISI North American Forest Products Conference in Boston. Faraci was nominated CEO of the Year in an annual RISI survey of investment analysts and portfolio managers that includes such criteria as leadership, vision and strategic accomplishment. International Paper, which recently moved its headquarters to Memphis, Tenn., is the world's largest pulp and paper producer with total capacity of 17.2 million tons, sales of $25 billion in 2005, and 69,000 employees in operations across 40 countries. Will Mies, Editorial Director-News Services, RISI, said the award recognizes Faraci's role in the ongoing transformation of International Paper that began last year. "Under his leadership, IP has undertaken the biggest and boldest restructuring program in the history of the paper/forest products industry," he said. "Although the financial results of his transformation plan remain to be seen, analysts overwhelmingly voted for him for having the courage to attempt such a program." Since Faraci took the highest job at IP in late 2004, the company has sold or agreed to sell nearly $10 billion in assets, including 5.4 million acres of forestland, its coated paper divisions in the U.S. and Brazil, and assorted other assets to focus on "two key platforms": uncoated paper and consumer and industrial packaging. The company is using the proceeds to strengthen its balance sheet, buy back up to $3 billion in stock, and expand in faster-growing, lower-cost international markets such as China, Eastern Europe and Brazil. "Not long after becoming CEO, John had the courage to say the business model of the world's biggest paper company was not working and began to turn the company inside out," one analyst said. Analysts said IP's boldest move was its decision to sell the company's forestland earlier this year for approximately $6.6 billion-a higher-than-expected price at what may be near a cyclical peak in forestland valuations. But now the company must prove it can make money from making paper rather than from converting timber -- the industry's traditional business model -- in what have long been two of the industry's most competitive markets, uncoated freesheet and containerboard. Faraci, who was previously president of IP, became chairman and CEO of the company Nov. 1, 2004, succeeding John Dillon. He joined the company in 1974, holding various financial, product management, planning and general management positions. In 1989, he was named a vice president and in 1994, he assumed responsibility for paper, bristols converting division. He later served as CEO and managing director of Carter Holt Harvey, the company's former 50.5-percent-owned forest products subsidiary in New Zealand, before becoming IP's chief financial officer in 1999. Additionally, he serves on the Grand Teton National Park Foundation, the National Park Foundation, the Citigroup International Advisory Council, and the National Council for Air and Stream Improvement. He is a member of the Business Round Table, the Denison University Board of Trustees and the Sustainable Forestry Board. In 2005, he was appointed to the board of directors of United Technologies Corp. Past recipients of the CEO of the Year award include A.D. 'Pete' Correll of Georgia-Pacific (2005), Paul Stecko of Packaging Corp. of America (2004), Raymond Royer of Domtar Inc. (2003), Steve Rogel of Weyerhaeuser Co. (2002 and 2001), John Dillon of International Paper Co. (2000), and Michael Smurfit of Jefferson Smurfit Group (1999). For more information on the RISI North American Forest Products Conference, visit http://www.risiinfo.com.




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