Good morning. My name is Patrick, and I'll be your conference operator today. At this time, I would like to welcome everyone to the International Paper Third Quarter 2015 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Thank you. I will now return the call over to Jay Royalty, Vice President, Investor Relations. Jay, the floor is yours.

Thanks, Patrick, and good morning, everyone and thank you for joining International Paper's third quarter 2015 earnings conference call. Our key speakers this morning are Mark Sutton, 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 two of the presentation. We'll also present 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 third quarter 2015 earnings press release and today's presentation slides. Lastly, relative to the Ilim JV, slide four provides context around the joint venture's financial information and statistical measures. With that, I'll turn the call over to Mark Sutton.

Thanks, Jay, and good morning, everyone. Thank you for joining us this morning to review our third quarter results and our outlook for the fourth quarter. I'm going to start on slide five. International Paper delivered another quarter of strong results with earnings per share of $0.97 in the third quarter. Earnings were driven by outstanding results in our North American Industrial Packaging business with EBITDA margins of 25.2%. Solid performance continues at the Ilim joint venture resulting in record operational EBITDA in the quarter. Additionally, IP received a $35 million dividend from Ilim in the third quarter. And finally, our return on invested capital continues to be strong with year-to-date results above 10%. On capital allocation we increased our dividend by 10% to $1.76 per share effective with the fourth quarter payout. Along with that we revisited and improved our dividend payout guidelines. Also we completed the restructuring and are extending the 2006 timber monetization. Carol will share more on these important items later in the call. And finally, we recently made a significant strategic decision that impacts how we will serve the important Asian market moving forward. Relative to closing the deal to sell our stake in the Sun joint venture, we have received the required government approvals and we expect to fully close the deal in the fourth quarter. Moving to slide six and continuing with our financial results, revenue was down year-over-year in the quarter as it has been all year; primarily this is due to the impact of FX translation. We also took a large noncash accounting charge of $0.15 in the quarter due to the decline in the value of the Russian ruble versus the dollar and that's primarily on Ilim's U.S. denominated net debt. More importantly or most importantly, I should say, we…

Thanks, Carol, for taking us through all those details on the very important elements of capital allocation. I feel good about our capital allocation strategy and the work we accomplished in the third quarter. It was a busier than normal quarter on that front. These are the right moves for IP, and I'm really confident about our path ahead. What I would like to do, though, on slide 18, is put a little more context around our strategic decision relative to Asia and what we see as a continued important market for IP. And you've heard me say this before. We've been looking at China for a while. We serve it many different ways, and we reached a conclusion that serving Asia in all of those ways that we have in the past is really no longer the best strategy to maximize value for IP. So we decided to exit the on-the-ground manufacturing we do in China for Coated Paperboard as well as our Industrial Packaging Box business. That's both in China and Southeast Asia, the Box businesses. We'll continue to serve customers though, in this really important region, in a variety of ways – in ways that are working very well today, including exports from our Ilim joint venture for softwood pulp and select exports from the U.S. of globally competitive products like our Kraft linerboard and our fluff pulp. So China and Asia remain important to us. We're willing to re-evaluate how we serve the markets as we go through time, and that's what we did in this case. This is a significant decision for the company and one that makes IP even stronger and more valuable. So on the last slide before we go to Q&A, on slide 19, in closing I'd like to turn to the…

Thank you, sir. Again, please limit your questions to one and a follow-up. Your first question is from Chris Manuel, Wells Fargo.

Good morning, gentlemen, and thanks for the color and all the components here. Just one – kind of taking a step back, Mark. I mean over the last say 12 months or so you've done a number of actions mostly deletes or cleaning up elements of the portfolio. As you sit today, do you feel that you're largely done with what you want to do with the portfolio? Are there components in the business that look particularly attractive to you that you feel that you'd want to be adding or looking at? So with respect to how are you thinking about acquisitions or the portfolio as a whole as it sits today.

Chris, that's a great question and some of what you do naturally over time is what we've been talking about in the last year, which is refining the portfolio, recognizing that sometimes everything we're trying to do isn't working the way we thought it would be and that'd be a continued element of how we look at the company. But I would remind you, though, that we have not just taken some things out, we've also reinvested in a pretty big way and it's paying dividends into our Industrial Packaging business. It doesn't get the same press as an acquisition but making that business even stronger through improving our operations on the box side as well as the mill side has had a pretty good effect and we've got more to do there. And I mentioned in my comments, I like the portfolio but by no means does that mean there won't be any more changes. The changes will come against our filter of can we make the company stronger and create more value and generate more cash that we can then fund our capital allocation strategy through. So on M&A, I've said this before, M&A is obviously a part of your strategy in any company but again, against our filter of creating value and doing things that increase the return on invested capital with a good spread above our cost of capital would be the first place we'd start. And obviously the industrial logic of what we do and do well has to fit as well.

And as a follow-up, if I could. As I look at – you've got a slide here where you highlight downtime that you've taken across most of your mills and such, when we think about downtime in North America with significant amount of – there's been some chunks of new capacity come on-stream, there have been even more chunks of capacity that have come out. How do you think about the market as it sits today? Is it relatively balanced to you? Do you feel that – as I look over the past three years, you've taken downtime I think in all but one of the quarters, do you feel that you're kind of about done needing to take downtime or perhaps de-evaluate, maybe taking a little capacity out yourselves?

Well, Chris, that's a great question and this is a statement across all of our businesses. We run the operations based on our order book and our capacity given outages and all of those things doesn't perfectly match our demand. Demand seasonality and capacity seasonality are somewhat out of phase in our business, we've limited that over time. The Containerboard business has gotten really good at it because we have so many mills but we're going to make the product and all of those businesses that we have orders for and that we need, that's what yields the amount of downtime we take. What we've learned to do, though, is take that downtime on a marginal cost basis and do it pretty efficiently. We are no longer practicing paper making from yesterday where the only way you make money is if you run everything wide open to its engineering limit. We've now improved our system enough where we can run our business at our manufacturing facilities to the market demand we have and be profitable doing it. And we continue to work to get better at that because that's a real important element of having the kind of company that we tried to create; flexibility and the ability to match the orders we have any quarter, any month or any year.

Thank you.

Our next question comes from Mark Weintraub with Buckingham Research.

Thank you. And maybe following up a little bit on that, in terms of the outlook you gave guidance indications on the impacts from volume, I think impacting you talked about like $35 million for volume and you talked about the operations in paper and packaging, input costs, mill maintenance, et cetera. I think it summed up something like $135 million, $140 million which would suggest in the low $0.20. First of all, would that be about right in terms of the impacts from those elements? And other than the Ilim coming the other way, would there be anything else significant? And related to that, does that capture the expectations of the seasonal type of downtime that you might take which you were just referring to? And if you could help us out there. Carol Louise Roberts - Chief Financial Officer & Senior Vice President: Yeah. Mark, this is Carol. I think for sure what we were attempting to do was to kind of highlight that seasonality because that's a lot of what you're seeing there. It's about the days, it's about the time of year, it's about the order patterns that we see. And since the third quarter is a strong quarter traditionally and the fourth quarter tends to be a seasonally weaker quarter and that's – I think you've captured it.

Okay. And then just another – one quick follow-up on the Uncoated Freesheet business, now we've seen the countervailing duties in place for a little while. What if any implications has that been having for the North American market and then I guess in your case too what you do in Brazil? W. Michael Amick - SVP-Papers, Pulp & Consumer Packaging: Hey, Mark. This is Mike Amick. Just real quickly on that, I mean it's still rather fluid in terms of the market as we see changes in the dynamics that are happening with regard to imports and as they take effect. They're still preliminary, final duties will come in in February. As you saw from the stats, some of these are still estimates. We saw a decrease year-over-year in the third quarter by roughly 80,000 tons. The overall market right now we think is kind of year-to-date is roughly down about 1% to 1.5%. And so I think this is going to still be somewhat of a moving – and fluid over the course over the next several quarters. With respect to Brazil and the volume there, we weren't moving a lot of product into this market from Brazil. What was coming into warehouses, say in Miami, was going out into other parts of Latin America. So from a Brazil standpoint in the U.S. that was really not a big impact.

Okay. Great. And so it is fair to say because that 1%, 1.5% that's certainly better than what we have been seeing. So does the net effect at this point seem to be favorable at least near-term on the market? W. Michael Amick - SVP-Papers, Pulp & Consumer Packaging: Yeah. Mark, I mean I think that's a fair statement. Certainly where we've been seeing kind of the 3% to 4% decline, this has been an improvement that we've seen. And as far as International Paper goes, we've done a little bit better than that.

Great. Thank you.

Our next question comes from Alex Ovshey with Goldman Sachs. Alex Ovshey - Goldman Sachs & Co.: Hey, good morning, everyone. A couple of questions, maybe going back to just Containerboard supply and demand in the U.S., can you talk about how you're seeing demand thus far in the quarter? How you're thinking about your inventory position relative to where you need it to be and just what you're seeing in export markets? Timothy S. Nicholls - Senior VP-Printing & Communications Papers: Yeah. Good morning. This is Tim Nicholls. Actually demand starting in the fourth quarter is reasonably good and I think you have to remember we're up against a pretty tough comp given how well the market performed last year. The market was building in August/September but then continuing to the fourth quarter. So I think any positive growth, I mean any positive growth this year in the fourth quarter has to be viewed as a big plus. And in October we're trending positive. So right now we're up about 1% but I think we're encouraged so far. In terms of inventory, we grew our inventories from second quarter to third quarter and they're roughly where we wanted them. We did that for two reasons, one, we've talked about before, supply chain efficiencies and the return on carrying a little bit more inventory more than pays for itself. But also as we came out of the second quarter, we were just coming out of heavy outage and so we had depleted inventories, built them back in the third quarter to get ready for fourth quarter outage season. So I think we're in a good place in terms of our inventories. Alex Ovshey - Goldman Sachs & Co.: Thank you, Tim. And just a last one from me, thinking about the capital allocation. So a couple of things that you said. One was the investment-grade balance sheet, and two, was the deal, most importantly has to drive return on invested capital above the cost of capital. So on the investment-grade, what's sort of the upper limit around leverage as you see it? And the return above invested capital, does that mean in the first year or do you feel like as long as you can get to that number by year two, three, or four, you'd still be willing to look at an acquisition that's transformative?

Alex, I'll take the second part and I'll ask Carol to comment on our debt metrics. I think on the investments, significant investments we need to see line-of-sight to an ROIC that bats the cost of capital pretty quickly in those first – like you said first two or three years. And then we need to believe we have actionable plans to get it to a spread of maybe 200 basis points above our cost and it doesn't need to be a forever task. And you've seen us do that on our big acquisitions, Weyerhaeuser and Temple, for example, and we're not going to be perfect. But that's really what we're looking at and that's a filter that we are all aligned on and so we see it pretty quickly. Carol Louise Roberts - Chief Financial Officer & Senior Vice President: Alex, regarding the investment-grade. In our space, three times debt to EBITDA for us feels comfortable. One of the strengths of International Paper that you have to remember is because our businesses are so well positioned in the markets and their cost position, our cash flow generation pretty much throughout most conditions remains very strong. And so we feel comfortable keeping that type of leverage and as do the rating agencies. And the reputation we have with the rating agencies which we do what we say we're going to do, and that's been working well for us. Alex Ovshey - Goldman Sachs & Co.: Excellent. Thank you, Mark and Carol.

Thanks, Alex.

Our next question comes from Chip Dillon, Vertical Research Partners.

Yes. Thanks, and good morning. Just a quick question about the change in the timber transaction from 10 years ago. It's on the balance sheet as a current item, I guess that's because you're going through this transition and I don't think it was there before. Will that be removed from the balance sheet? Since it's non-recourse or will we continue to see the offsetting entries on the asset and liability side as long-term going forward? Carol Louise Roberts - Chief Financial Officer & Senior Vice President: Yeah. It's in the current because we're in the process of putting the permanent financing in place in the fourth quarter. So we'll put the permanent financing in place in the fourth quarter and it'll move out of current. And then it'll be treated just like the Temple-Inland timber monetization is but you will see it on the balance sheet, Chip.

Okay. Got you. And then second question is on the capital spending. It seemed like after the last call in late July, early August that CapEx for next year was looking to be above the depreciation rate, maybe $1.6 billion because of the $300 million program in Industrial Packaging and how that was an overt, above and beyond investment that you were using with free cash flow given the returns. So now it looks like you're guiding down the CapEx for next year from what we would have thought. I know you didn't have an official number at the last call. And I was wondering what items or how you were able to make those changes and what the thought was behind that decline. Carol Louise Roberts - Chief Financial Officer & Senior Vice President: I'm going to just take a shot at this and then obviously let Mark comment. But I think what happened in July is we just were not in our process yet to declare what our 2016 plan was but we felt important to communicate to our investors our plans around the business. And so what we talked about in July was the project and agreed that we left it open that there could be a change to the 2016 capital. But obviously we do our planning work as we enter this time of year getting ready for 2016 and we just feel comfortable that we can get the work done that we need to get done on the projects and in the company with the $1.4 billion. So I don't think it's any more complicated than that, Chip.

And does that include anymore Boiler MACT or did that drop off? Carol Louise Roberts - Chief Financial Officer & Senior Vice President: It includes what's in there so that includes our regulatory required spending.

Got you. And last quick question is on – you talked about China and how obviously it's an important market but certainly serving them in the fluff market from the States and in the softwood pulp market and I guess virgin linerboard from Russia, certainly for a lot of reasons makes sense given the fiber situation. Could you make the same argument or would you about India? Or are there differences about India than what you see in China?

Chip, I think you could make arguments that obviously there are different economic barriers at any moment in time, whether it's tariffs, the supply chain maturity and all of those things that would allow you to make money serving a market with imported products. I mean the fundamental element is what you just said and that is if you have globally competitive products from a quality standpoint, which we have and a globally competitive cost position and in our business it starts with fiber, that if you can access a market that appreciates your product you should be able to make that work. And you can see examples of that in the forest product industry all over the world. So that's something we always look at and it goes back to our multichannel strategy in our Containerboard business. We are containerboard providers for the world markets, not just the U.S. market and we've been doing that for a long time because the product's good and our cost position is good and our service platform is trusted by the customer. So it's definitely a possibility.

Thank you.

Your next question comes from Gail Glazerman, UBS.

Hi. Good morning. Carol Louise Roberts - Chief Financial Officer & Senior Vice President: Morning, Gail.

Going back to the capital program in Industrial Packaging, is there any further guidance in terms of how that's going to roll out over the next year or two in terms of both the spending and the kind of incremental capacity that may come with it? Is that in the same timeline that you would have thought last quarter or has that been refined? Timothy S. Nicholls - Senior VP-Printing & Communications Papers: Hi, Gail. It's Tim. Yes. It's in line, no changes to how we were thinking. As you'll remember we talked about this being spending that we would begin in 2016 and it would roll into 2017 and no change to anything, the spending or the timeline.

Just a reminder, Gail, on when Tim covered those projects last quarter he talked about the drivers of those projects including the Industrial Packaging containerboard manufacturing system. There's a lot of elements, quality improvement, cost reduction, and if we need it, a volume component. And of course we'll make the volume and consume the volume in our own box plants and in our open market channels if the demand is there. If it's not there, those are still really good projects from the first two elements of cost and quality.

Okay. And back last fall when you announced the plans to restart Valliant you talked about also bringing Newport out of medium and more into facing paper. And I'm just wondering, can you give an update on where you stand on that? Have you accomplished it or is that yet to come? Timothy S. Nicholls - Senior VP-Printing & Communications Papers: We haven't accomplished it fully, we continue to grow our gypsum product there and so we're encouraged by the growth that we see and the contractual obligations that we have going forward. So it's in process and we'll continue to work on it. We're trying to do all of this in a very methodical way and eliminate or minimize disruption.

Sounds good. Thank you.

Our next question comes from Adam Josephson with KeyBanc.

Thanks. Good morning, everyone. One for Tim. Tim you talked about the October pickup in U.S. box demand that you're seeing up about 1%. Given that industry box demand growth has slowed throughout the course of the year and given the obvious pockets of weakness evident in the U.S. economy, are you surprised that your shipments are up 1% in October? And do you expect that type of growth to continue? Timothy S. Nicholls - Senior VP-Printing & Communications Papers: Well, it's hard to predict the future in terms of what will happen. As I said, fourth quarter is a tough comp. We had some exposures earlier in the year just based on our segment mix in terms of processed foods and how they have underperformed for a period of time now. Another one that underperformed in the first part of the year, well really right through the third quarter, has been protein, Avian flu in poultry and there was a ban on certain countries allowing imported poultry products. Those bans have been lifted. We're actually now seeing a bit of recovery. We hope that will continue through the fourth quarter. So yes, there's the economy and you read about manufacturing. I think what's maybe hurting us a little bit earlier in the year potentially is now helping us. But one bright spot, we saw our beverage sales pick up in the third quarter, which was a little bit of a reversal of a trend. And so I think that is a helpful and a hopeful sign. The other thing, we have a fairly large exposure to e-commerce, and indication so far is that it looks like it has potential for a really big season in the fourth quarter.

Thanks. And one for Mark. Mark, your EBITDA is down about 4% to 5% year to date, and I fully appreciate that emerging markets have been worse than many folks expected. Do you have reason to think next year will be notably different than this year in terms of the year-over-year changes in EBITDA? And if so, can you give any sense as to why? Thanks very much.

Thanks, Adam. I think we obviously intended to improve our EBITDA this year for the reasons you mentioned. We've had some improvements, but we've given it back because of some of the headwinds. We're evaluating our outlook for next year, but we feel good about the level of performance that we have as a company, and we believe we can sustain that level of performance. The global economy is going to really provide an opportunity to improve or stay the same, and we're still evaluating that right now. But we feel good about the level that we're at. And our goal is obviously to continue to grow the earnings of the company.

Thanks a lot, Mark.

Thanks, Adam.

Our next question is from Phil Ng with Jefferies.

Good morning, guys. Can you provide some color on the weakness you called out in North America consumer? Is the pricing slippage pretty much isolated to the plate stock business? And has the downtime you've taken during the quarter pretty much tightened up the market at this point? W. Michael Amick - SVP-Papers, Pulp & Consumer Packaging: Hey, Phil. This is Mike, Mike Amick. What we've seen in the third quarter, as Carol mentioned in her comments, we do think that there is some sluggish demand out there. Most of that is really wrapped around some destocking through the supply chain. We've seen some – at our converters a fair amount of 3% to 4% kind of pulldown in stock, that coupled with some already elevated inventories across the industry, we think is explaining a lot of that. Our volume, we've had a couple of specific accounts around our backlogs as well as some measured decisions that we took as far back as a year-and-a-half ago to start focusing and pulling back on some of our export business. And as Mark said, we're going to continue in this business and all businesses to manage to our order book. So fourth quarter in this business tends to be a little seasonally challenged as we know. And I will say on our food service side in the cup stock business, in the managing through that portion of our business is very strong. We've seen some – having a great year with our shipments up about 6% year-to-date and we've got strong order books in that business. We just completed the kit and footprint expansion. Those new machines and cup converting machines are being deployed now and we're actually operating that new equipment. So we're excited about that portion of our business.

Okay. That's helpful. And I guess switching gears back to Containerboard, I mean there's been a lot of questions on the call about supply/demand, more short-term nature but medium to longer-term I think, Mark, you've always kind of characterized the market as being balanced. But based on some of the capacity that's coming on and one of your big competitors adding a fair amount of capacity in the fourth quarter at least, what's your view on supply/demand going forward? And just wanted to get some thoughts on the export market, you've seen some weakness there on pricing, it does seem like a lot of your competitors are pulling back in that market. Do you have a sense if prices are going to start stabilizing here or is there still some downside risk? Thanks. Timothy S. Nicholls - Senior VP-Printing & Communications Papers: Yeah. Hi, it's Tim. Just on the capacity question, I'm not going to comment on what competitors do with their capacity. So we have up to this point with capacity additions been able to manage our way through the whole process with our customers and I think we're offering a different value proposition than a lot of the capacity that started up over the past two years. We have good geographic coverage, we have wide product mix and we have tremendous capability across our whole system that allows us to sell to customers providing quality service and product range. On exports, it's been a little bit softer here in late summer as we entered the third quarter, not much. And I think the surprising thing is with the strength of the dollar, virgin Kraft linerboard exports, the markets we sell to, it's held up reasonably well for the year, which says to us, it's a little bit of a question mark, but it says to us there's a need for the product that they're buying as opposed to just general economic conditions for all packaging in the region. So there's a little bit of softness around price, not much, and hopefully it will stabilize through the fourth quarter. But I think the markets have held up reasonably well this year.

Tim, are mill nets pretty much at a point where a decision has to be made whether or not your high cost capacity makes sense to run and kind of support that export market? I'm just trying to get a better sense if there's – we're at a point where export prices stabilize this year? Thanks. Timothy S. Nicholls - Senior VP-Printing & Communications Papers: We still like our margins on exports.

Okay. Thanks.

Phil, another part of your question was around pricing and was that isolated to the plate stock. It primarily is. We're seeing some softness in the folding side, but most of that is isolated to the plate stock business.

And your next question comes from George Staphos, Bank of America.

Hi, everyone. Good morning. Thanks for all the details and taking my questions. Carol, I wanted to come back to the Timber transaction. I just want to make sure that I had a good sort of holistic on it. So you're going to be making a payment of roughly $600 million. Has that already occurred or will that be occurring in the fourth quarter? Where will we see it? I'm assuming we'll see it in the balance sheet in debt. And for making that payment you defer the tax, which is I think – you defer payment on the tax for $1.4 billion for as much as five years and perhaps as much as 15 years, would that be fair? And what else have I left out or mischaracterized? Carol Louise Roberts - Chief Financial Officer & Senior Vice President: So to take the first question, yes. The cash went into the structure last quarter. So that's done. And what you'll see on the balance sheet, George, is going to be simply – you'll actually see the cash go away from the cash line, and then you'll see on the assets side, you'll see the assets from the special purpose entity, and then down in the liability side, you'll see the other side of the equation, the non-recourse financial liability of it. So that's what you'll see on the balance sheet. So you'll see $4.85 billion up in assets, and then you'll see the $4.2 billion down in the liability line. And the delta is the cash that we put into the deal, essentially. That's the simple way to think about it.

Okay. And in turn, you'll defer the taxes for at least another five years, perhaps as much as 15 years. Is that correct? Carol Louise Roberts - Chief Financial Officer & Senior Vice President: Yes. If you go back to the structure, the structure was for 30 years total. So we did the first 10 years. And the way the original deal was structured it was 10 years with four five-year extensions, which got you to the total of 30 years. So this first one is for the first five years, and then that gives us the option at the end of this five years for three more five years or another 15 years.

Okay. Thank you. That's clear. As I mentioned earlier, we appreciate the details, particularly like slide nine and slide 15 on the capital allocation. My other question, a lot of them have already been asked, as you look at supply/demand again in paperboard broadly, and realizing that you're going to run your system as always to demand, some of your competitors, one of your larger ones in South America, has talked about ramping up their own boxboard production. And then in Europe one of your larger global peers, if you will, has talked about bringing on one of their large conversion projects a little bit earlier than expected. None of this is really new news, but has that changed at all your outlook in terms of being able to supply the market? Or are you seeing a bit more competition in these markets as a result? Thanks, guys.

George, that's a great question. The paperboard market does have a global element to it depending on the type of product, and we've been managing these shifts and changes in the different geographies and the type of product used. You know we make SPS in the U.S., but we make folding boxboard in Europe, and we obviously take all of that into our thought process around how we're going to make – what we're going to make and where we're going to make it. As Mike mentioned, a portion of our value proposition is that we provide products really on the high end of the paperboard product spectrum to really, really good converting customers. And then on the cup side, we are one of those really, really good converters that provide the final product. And so I wouldn't say that any of those announcements or changes or intentions that you mentioned create an immediate reaction into IP's plans, but we consider them. But our position in this market we feel pretty good about in terms of the customers we have, the converting we do ourselves, and the competitiveness that we have both on a cost and product side. So we'll keep watching the market that we play in, but that's kind of how we look at it.

Mark, the Varkhaus project also then hasn't changed your outlook at this juncture? That was part of my oblique reference there before. Again, thanks. Good luck in the quarter.

Thanks, George.

Our next question is from Debbie Jones, Deutsche Bank.

Hi. Good morning. I wanted to ask about Brazil. Your guidance on slide 14, it's always interesting when you see Brazil listed as stable in Packaging kind of across the board. And I just wanted to get your thoughts on one, do you think there's opportunity for pricing to be a benefit just given that you've seen some announcements out there for the fourth quarter? And then two, just operationally should we be looking for more improvement either in the fourth quarter into 2016? Because I think you've mentioned in the past that you'd like to take out some cost in that operation.

Debbie, that's a good question. The Brazil Packaging business, Carol highlighted the Paper business and the business model in Paper is different. We export about half of what we make so we have a different profit model. The Box business is all about the Brazil economy and the negative 2.5% GDP is a negative 2.5% box demand and that is the challenge. The demand is soft, inflation is up and we've struggled to recover that with pricing. We're starting to see some price movement but I think the first time you try to really get something in is the hardest in an inflation environment that has a demand decline. So our view on that business right now is we're realigning our manufacturing assets and taking out the cost we talked about and we're repositioning ourselves for the best place we can participate commercially. So there's been some customer turnover, we were doing some things we probably weren't the best suited to do. We're replacing some of that business with business we're more competitive on. It's going to be a work-in-process. Be great when we get Brazil back to a plus 2% or 3% versus a minus 2.5% because it'll definitely help with the business performance.

Okay. Thanks. And then if I could just ask a follow-up on pension expenses. Are you able to comment at all just kind of looking at 2016 based on how your assets have performed and rates, if we should see an incremental pension expense in 2016? Carol Louise Roberts - Chief Financial Officer & Senior Vice President: Debbie, we don't anticipate a required pension contribution in 2016.

Our next question comes from Dr. Mark Wilde, BMO Capital Management.

Good morning, Mark. Good morning, Carol.

Good morning, Mark.

I have a question and a follow-on. And the question really is on the EBITDA targets that you've set out in the past at Investor Days, both in terms of the level and in growth rate, and do we need to rethink those? And if so, how are you thinking about them?

Well those targets we've talked a lot about. The company's quite a bit different than it was when we set the target back in 2012. So I think the intent is to maximize the EBITDA potential of the company that we have and obviously growing EBITDA is a part of creating value over the long term. So that will stay in our targets and goals. We aren't prepared to throw another target out there at this moment in time, but rest assured, part of what we talked about doing was creating value over time. It had an EBITDA number, it had a margin number and it had a return number. We're hitting on some of those, but we've obviously been short on the EBITDA line.

Okay. And, Mark, if I could as just a follow-up, your comments around China and what you were kind of hinting at in terms of potentially India about being a fiber exporter rather than being a manufacturer in the country, over time exporting kind of pulp and container board has been one of the most volatile segments of the business. So can you just kind of help us weigh that element of your strategy with the volatility that historically has come with it?

I think the serving of markets that have a growth profile but may not have a raw material or natural resource advantage is never going to be the primary business of International Paper, and it's probably not the primary business of most forest products companies. But it is a very good way to use fully your assets, turn those assets at the highest level, and generate tremendous cash. And the volatility is something I think you can manage when the base of your business, as is the case of most forest products, you make it and use it in the same region. So this isn't a shift to being a global exporter of everything. This is just saying we have the best chance to serve these markets with the lowest cost, highest quality products, and they need the products. So there's a win for our company, and there's a win for the local producers who may just want the resource to do the conversion themselves. So that's kind of how we look at it.

Okay. That's really helpful. Thanks, Mark. Good luck in the fourth quarter.

Thank you, Mark.

Our next question comes from the line of Anthony Pettinari with Citi.

Good morning. Just circling back to North American Containerboard, you have a slide that shows you closing the volume gap with the industry, but it seems like the erosion in box prices or price mix that you saw in 3Q stepped up a bit from 2Q. I was wondering if you could just give us some color on the competitive market conditions you're seeing in North American box markets And maybe reconcile the expectation for flat pricing in 4Q with what seems like maybe a tougher box price, tougher box market, if that's accurate? Timothy S. Nicholls - Senior VP-Printing & Communications Papers: Hey, Anthony. It's Tim. The box market is always competitive. But having said that, the price mix, there was more mix in the numbers than there was price given – we have huge swings from month-to-month and quarter-to-quarter sometimes based on seasonality. And so I think the market feels pretty stable to us.

Okay. That's helpful. And then just circling back to China and potentially serving China from Russia. I'm guessing adding Kraft line or capacity at Ilim will be pretty attractive given where the ruble is. But on the other hand, obviously the risks of doing business in Russia seem pretty elevated right now. Mark, I was wondering if you could just contrast those two things in terms of future investments in Ilim, especially on the Kraft liner side versus the geopolitical risks in Russia.

Anthony, that's a great question. On the first part, we're not potentially supplying China from Ilim and it is a big part of what's happening today and has been happening very successfully. And of course it's back to what I said earlier, there's a raw material renewable natural resource advantage and a high quality, low cost manufacturing operation that's located adjacent to a needing and growing market. We do make some containerboard in Ilim today and it's obviously one of the best places in the world given the softwood profile to make Kraft liner and Ilim is a publicly traded company. We have a 50% position in it, they have a strategic plan, they're working that. Right now our focus at Ilim is to operate the first phase of what we've done with the market pulp operations at Bratsk and the improvements we've made in the Western Russian operations to serve the Russian market and we're doing quite well on that. On the geopolitical things, I was there last week, our view on some of these things is a very long-term view and political issues come and go. And we have very good partners, we have a very good access to the people we need to in the government and we feel like our business is sustainable over the long term. We are obviously mindful of the issues that are going on and we hope to work through those and hopefully the business environment transcends the political environment which it has in many cases in many parts of the world over time.

Our final question today comes from Steve Chercover from D. A. Davidson. Steven Chercover - D.A. Davidson & Co.: Good morning. The pressure's on. So the first question, I've noticed over the last five years your distribution expenses as a percent of sales have gone from 5.2% in 2010 to 6.4% last year. Is there anything you can do to stop this steady progression?

Yeah. I'm actually glad, Steve, you've pointed that out. It's something we've been talking about. It was a big reason for our supply chain investments we made, both on the people side and on the technology side over the last several years. I think we've mitigated what would have been a worse situation. We also changed the way we think about the full supply chain, including our inventory position in certain businesses. But we've got to use what we call in our company, ME – it's a set of tools that really are focused on lean manufacturing techniques that take waste and variability out and challenge what we're doing and how we deliver our product. Because I remember when I started working in this industry, it was a rounding error and today costs to get our products to market safely and reliably is at a level that it becomes a strategic issue to manage. So we've got a lot of really good people on it. We've invested in capability, and so we are making a difference. That 6% in many cases would have been completely out of control had we not intervened, but it's something we work on every day. Steven Chercover - D.A. Davidson & Co.: Yeah. Thanks. $1.5 billion is not chump change.

Not at all. Steven Chercover - D.A. Davidson & Co.: A couple for Carol, I suppose. The share purchase activity in the quarter, as I see it, seemed to be pretty much limited to the program and not much more. So I'm wondering whether the exit from the Sun joint venture precluded you from being more aggressive. Carol Louise Roberts - Chief Financial Officer & Senior Vice President: You know, Steve, as we said, our share buyback program will continue to be opportunistic, and it'll be a combination of how we're seeing the value as well as the cash available at a point in time. So there's no less focus or importance on that. As we go forward, just continue to watch our actions on that. Steven Chercover - D.A. Davidson & Co.: Okay. And final one. Just what prompted the increase in the dividend payout ratio? Clearly, we're happy. Does it reflect maybe a little bit less of an ambitious acquisition strategy?

Steve, our dividend payout policy really is based on our confidence of sustainable cash flow generation, and we do that with a trough test, where we look at conditions that reasonably could go wrong and are we comfortable at 40% to 50% of our cash flow, and does it stand the test of our internal trough testing. We adjusted our trough conditions based on new information about our businesses and how they're running, and what the competitive positions are. So that led us to feel like we can grow from 30% to 40% to 40% to 50%. It's really about that more than it is about what it says about other uses of cash or the other elements that Carol covered in our capital allocation. We feel real good about the cash generation potential of our company and that we should return a significant portion of that through a dividend to our shareholders, and we think we can do that at the 40% to 50% rate. Steven Chercover - D.A. Davidson & Co.: Terrific. Okay. Well happy holidays to everyone. We'll speak to you in 2016.

All right. Well thanks all for taking the time to join us this morning. As always, Michele and I will be available after the call for any additional questions you have, our phone numbers are on slide 20 of the presentation. And have a great day.

Thank you. And this does conclude today's conference call. All lines may disconnect at this time. Thank you.