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Goldman Sachs 12 th Annual Cyclicals and Specialty Materials Forum May 19, 2004

Packaging Corporation of America. Goldman Sachs 12 th Annual Cyclicals and Specialty Materials Forum May 19, 2004. Paul T. Stecko Chairman and CEO. Packaging Corporation of America.

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Goldman Sachs 12 th Annual Cyclicals and Specialty Materials Forum May 19, 2004

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  1. Packaging Corporation of America Goldman Sachs 12th Annual Cyclicals and Specialty Materials Forum May 19, 2004 Paul T. Stecko Chairman and CEO

  2. Packaging Corporation of America Certain statements in this presentation are forward-looking statements. Forward-looking statements include statements about our future financial condition, our industry and our business strategy. Statements that contain words such as “anticipate”, “believe”, “expect”, “intend”, “estimate”, “hope” or similar expressions, are forward-looking statements. These forward-looking statements are based on the current expectations of PCA. Because forward-looking statements involve inherent risks and uncertainties, the plans, actions and actual results of PCA could differ materially. Among the factors that could cause plans, actions and results to differ materially from PCA’s current expectations are those identified under the caption “Risk Factors” in PCA’s Form 10K filed with the Securities and Exchange Commission and available at the SEC’s website at “www.sec.gov”.

  3. PCA Stock Performance PCA S&P 500 5/14/04 L 2000 2001 2002 2003 2004 IPO Now Change ($MM) Enterprise Value 2,704 2,995 11% Equity Value 1,270 2,300 81% Debt 1,434 695 (52%) BigCharts.com

  4. PCA is a Major Producer of Containerboard Market Share Source: Company Form 10-K filings and AF & PA 2003 Paper, Paperboard, Pulp Capacity Survey, North American market share adjusted for permanent and indefinite shutdowns as of May 14, 2004.

  5. Pure Play in the Right Product 96% 69% 55% 25% 15% 10% PCA Smurfit- Temple-Inland Weyerhaeuser International Georgia- Stone Paper Pacific % of Revenues from Containerboard and Corrugated Products Note: Based on company press releases and PCA and analyst estimates

  6. Worlds Largest Paper Machines Uncoated White Company Machine Location Capacity Saporcel PM2 Portugal 439,800 PT Indah Kiat PM3 Indonesia 427,300 PT Tiwi Kimia PM11 Indonesia 412,300 International Paper PM16 USA 410,600 Boise J-3 USA 392,700 Weyerhaeuser PM2 USA 385,600 UPM-Kymmene PM9 Finland 384,800 PT Riau Andalan PM1 Indonesia 384,800 Saporcel PM1 Portugal 363,200 Weyerhaeuser PM1 USA 357,000

  7. Worlds Largest Paper Machines Company Machine Location Capacity Coated Groundwood UPM PM4 Finland 400,000 Burgo PM9 Italy 400,000 UPM PM3 Germany 360,000 UPM PM2 Finland 310,000 StoraEnso PM5 France 305,000 Bowater PM3 USA 300,000 UPM PM1 Finland 300,000 UPM PM6 Finland 300,000 Sappi PM8 Belgium 285,000 UPM PM1 United Kingdom 270,000 Coated Free-Sheet APP China PM2 China 600,000 APP China PM1 China 600,000 Sappi PM11 Austria 560,000 StoraEnso PM6 Finland 515,000 UPM (Nordland) PM4 Germany 450,000 UPM PM8 Finland 400,000 StoraEnso PM7 Finland 360,000 M-Real PM3 Finland 350,000 Burgo PM1 Belgium 350,000 International Paper PM41 USA 300,000

  8. Worlds Largest Paper Machines Company Machine Location Capacity Linerboard Georgia-Pacific PM2 USA 712,200 Weyerhaeuser PM1 USA 649,700 International Paper PM1 USA 642,600 International Paper PM1 USA 589,100 Weyerhaeuser PM2 USA 571,200 Papierfabrik Palm PM6 Germany 550,900 Boise Cascade PM1 USA 544,400 International Paper PM1 USA 526,600 PCA PM1 USA 521,200 Weyerhaeuser PM1 USA 517,700 Corrugating Medium International Paper PM2 USA 428,400 Smurfit-Stone PM1 USA 419,500 Cedar River Paper PM1 USA 392,700 PT Indah Kiat PM2 Indonesia 385,700 SAICA PM9 Spain 385,700 Smurfit-Stone PM2 USA 383,800 PCA PM4 USA 380,300 Weyerhaeuser PM2 USA 369,500 SAICA PM7 Spain 330,600 PWA PM1 Germany 308,500

  9. Containerboard Capacity Rationalization Industry Capacity Removed (millions of tons) Note: As of January 23, 2004 Source: Industry Publications

  10. Historical Real Prices Y = 12.732x + 26464 Y = 18.835x + 38478 Y = 39.081x +79055 Y = 14.962x + 30504 Y = 0.9642x + 2347.7 Coated Free Sheet Coated Groundwood Uncoated Free Sheet Market Pulp Linerboard Source: Calculation based on Producer Price Index and Industry published prices (1985 – 2002)

  11. ‘90 ‘92 ‘94 ‘96 ‘98 ’00 ‘02 ‘04 Source: BankOne Note: Basket includes Europe (58%), Japan (14%), Britain (12%), Canada (9%), Sweden (4%) and Switzerland (3%) US Dollar Indexvs. World Basket of Currencies 120 110 100 90 80

  12. Industry Supply and Demand Balance Year over Year Change % Containerboard Inventory (000 tons) J F M A M J J A S O N D J F M 2003 2004 Sources: Fiber Box Association and American Forest & Paper Association

  13. Industry Containerboard Inventory (000 tons) 1996 1997 1998 1999 2000 2001 2002 2003 2004 Sources: Fiber Box Association and American Forest & Paper Association

  14. Earnings and Free Cash Flow (2) • (1) 2000 earnings per share exclude a $36.4 million after-tax gain on the sale of timberlands, a $16.3 million after-tax charge related to the redemption of 12 3/8% senior preferred stock and a $11.1 million after-tax charge for early extinguishment of debt. • 2003 earnings per share exclude a $10.0 million after-tax charge related to the settlement of several benefit cost related matters and the following after-tax charges incurred with PCA’s debt refinancing in the third quarter of 2003: cash tender offer premium ($34.1 million), write-off deferred financing fees ($10.6 million), other fees and expenses ($2.0 million). Including these one-time charges, net income for 2003 was a loss of $14.4 million or $0.14 per share. • Free cash flow is used by PCA to inform investors of cash available for corporate use after capital expenditures. Free cash flow equals net cash provided by operating activities minus additions to plant property and equipment, commonly referred to as capital expenditures, and is calculated as follows: • 2000 2001 2002 2003 • Net cash provided by operating activities $ 341 $ 314 $ 240 $245 • Less: Additions to property, plant and equipment (129) (131) (107) (113) • Free Cash Flow $ 212 $ 183 $ 133 $ 132 Earnings Per Share(1) Free Cash Flow(3) $ $MM

  15. * Tomahawk *Filer City * Counce Valdosta * Mill Manufacturing is Low Cost • Operational excellence • Located near excellent low cost fiber • Fiber and energy flexibility • Capital spending efficiency • High integration level % ofProduction 2003 Production (tons) Mill Linerboard Counce, TN 963,000 43% Valdosta, GA 425,000 19% Corrugating Medium Tomahawk, WI 554,000 25% Filer City, MI 291,000 13% Total System 2,233,000 100%

  16. Recycled Fiber Prices HistoricallyHave Been Very Volatile $/Ton 1999 2000 2001 2002 2003 2004 Source: Industry publications

  17. Solvay Weyerhaeuser Temple-Inland Georgia-Pacific International Paper Visy Norampac Smurfit-Stone PCA Source: Industry publications and PCA estimates Limited Exposure to Potential IncreasesIn Wastepaper Prices Wastepaper/Containerboard Ratio

  18. Fuel Price Volatility $/ million btu’s NYMEXOil NYMEXGas ContractCoal 1999 2000 2001 2002 2003 2004 Note: Excludes delivery costs which are estimated to be $0.74 per million btu’s for coal, $0.94 for natural gas and $0.50 for oil.

  19. Natural Gas Natural Gas Oil Bark Bark Coal Oil Coal 2000 Actual 2003 Actual PCA’s Mill Purchased Fuel Mix is PrimarilyCoal and Bark - The Two Lowest Cost Fuels

  20. Corrugated Products Differentiated Operating Strategy • Stand-alone profit centers • Value-added products • 70% local accounts • Over 8,000 customers • Top 30 accounts represent • only about 30% of sales

  21. Franklin Salt Lake City Windsor Northglenn Denver Fairfield Oxnard Phoenix Plano Garland El Paso Waco Donna Strong Geographic Manufacturing Presence Tomahawk Watertown Chelmsford Syracuse Colby Filer City Minneapolis Northampton Golden Valley Milwaukee Edmore Buffalo Grandville Burlington Allentown Conrad Plymouth Trexlertown Lancaster Akron Marshalltown Acorn Hanover Pittsburgh Omaha Gas City Ashland Newark Baltimore Middletown Grafton Harrisonburg Richmond Vincennes Roanoke Knoxville High Point Salisbury Morganton Jackson Los Angeles Goldsboro Muskogee Rutherfordton Counce South Gate Honea Path Newberry Atlanta Opelika Arlington Valdosta Jacksonville Facility Legend Winter Haven Corrugated plants Orlando Sheet/specialty plants Mills Headquarters

  22. Corrugated Products Demand Growth Cumulative % Change 1998 1999 2000 2001 2002 2003 PCA Industry Source: FBA Data for Industry

  23. Capital Expenditures as a Percent of Sales2000 Through 2003 Average Percent PCA Weyerhaeuser Temple International Georgia Smurfit Inland Paper Pacific Stone

  24. PCA Completed its Debt Refinancing on July 23, 2003 As of June 30, 2003 As of March 31, 2004 Annual Annual Debt Interest Debt Interest Level Expense(1) Level Expense(1) ($ millions) Revolving Credit Facility - - - - Receivables Revolving Credit Facility $ 109 $ 2 $ 109 $ 1 Term Loans 79 6 39 1 9.625% Senior Sub. Notes 550 53 - - 4.375% 5-Year Senior Notes (Eff. Rate – 3.92%) - - 149 6 5.75% 10-Year Senior Notes (Eff. Rate – 5.26%) - - 397 21 Amortization of Deferred Financing Fees - 3 - 1 Total $ 738 $ 64 $ 694 $ 30 Cash-On-Hand $ 131 $ 188 LOCK• (1) Estimated

  25. Interest Expense Reduction $ millions April 12, 1999 2000(1) 2001(1) 2002 2003 (2) 2004 (3) Annualized Actual Actual Actual Actual Proj • Excludes charges related to the early extinguishment of our debt of $18 million in 2000 and $1 million in 2001 • 2003 actual excludes one-time charges associated with refinancing of $73 million. • 2004 projection is based on debt levels and interest rates on variable rate debt as of December 31, 2003

  26. PCA(3) 2.9 PCA(3) 6.1 PCA 47.1% Strong Credit Profile March 2004 Data(1) Existing Corporate Credit Rating Debt/ LTM EBITDA(2) Debt/ LTM EBITDA(2) / LTM Interest (2) Total Capital S & P Moody’s BBB Ba1 BBB Baa3 BB Ba2 BBB Baa2 BB+ Ba3 BBB Baa2 BBB Baa2 B+ N/A MeadWestvaco 47.4% Temple Inland 48.0% Boise Cascade51.0% Weyerhaeuser 63.6% International Paper 65.4% Georgia Pacific 66.0% Smurfit Stone68.5% Temple Inland 3.7 Georgia Pacific 4.2 Boise Cascade 4.3 Weyerhaeuser 4.5 MeadWestvaco 4.4 International Paper 5.1 Smurfit Stone 8.2 Boise Cascade4.0 International Paper 3.9 Temple Inland3.8 Weyerhaeuser3.8 MeadWestvaco 3.5 Georgia Pacific 3.1 Smurfit Stone 1.7 • Debt / Adjusted EBITDA, Adjusted EBITDA / Adjusted Interest, and Debt / Total Capital are ratios commonly used by the ratings agencies. Total capital is calculated as total debt plus shareholders’ equity. Adjusted EBITDA and adjusted interest are calculated for the period April 1, 2003 through March 31, 2004 and both exclude unusual or nonrecurring items. • Adjustments ($ in millions) were made to the following companies’ reported income before interest and taxes per their SEC filings to eliminate unusual or non-recurring items. • Boise Cascade ($45.2) Smurfit Stone 231.0 • Georgia Pacific 53.0 Temple Inland 152.0 • International Paper 281.0 Weyerhaeuser 27.0 • MeadWestvaco (110.0) • No adjustments to exclude unusual or nonrecurring items were made to the above companies reported interest. • (3) PCA’s adjusted EBITDA and adjusted interest are calculated as follows: • Income before interest and taxes, as reported for the period $ 65.8 Interest expense, net, as reported for the period $ 113.3 • Add back: Nonrecurring charges related to refinancing 3.3 Less: Nonrecurring charges related to refinancing (73.3) • Add back: Pactiv benefits settlement 16.0 • Adjusted interest $ 40.0 • Adjusted EBIT 85.1 • Add: Depreciation, depletion and amortization as reported the period 157.4 • Adjusted EBITDA $ 242.4 Source: Company SEC filings and press releases

  27. Strategy • Single Business Focus - Operational Excellence • Grow Corrugated Products Volume • Internal Growth • Acquisitions • Enhance Shareholder Value Through Financial and Strategic Flexibility

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