1. Outlook for Paper November 8, 2005 BOOK MANUFACTURERS’ INSTITUTE, INC. ANNUAL CONFERENCE

2. Agenda Paper market update Brightness issue Environmental issues facing publishers & paper manufacturers Questions & answers

3. U.S. 2004 Printing & Writing Shipments By End Use Source: AF&PA Total Shipments 23,591,322 Tons

4. North American Demand by Grade (Printing & Writing Segments) (000 tons) Source: RISI/Paperloop 20052006 Uncoated Freesheet % Change 14,28414,288 0% Uncoated Groundwood % Change 6,9136,959 1% Coated Freesheet % Change 6,0956,154 1% Coated Groundwood % Change 6,580 0%

5. Key Paper Statistics (North America) Source: PPPC -4% Change YTD +1% Change

6. Key Paper Statistics Continued

7. Current State of the Business Declining Demand trend Increasing cost over time Global over capacity Inability to influence price due to grade/technology substitution Lack of profitability within the paper industry has been a mandate for change *Estimate *May ’05 Estimate

8. Industry Segmentation Large Producers Small Producers Commodity products Global focus Mass markets Slow response Internally focused Manufacturing- centric Limited capabilities Small, high- cost mills Regional focus Financially unstable Limited product range Glatfelter High-value, niche markets Customer-centric Global focus Relentless cost reduction Financially strong Glatfelter’s unique focus offers the Company the “best of both worlds.”

9. What Factors Influence Paper Prices? Economic Growth – Paper consumption follows GDP growth. Rising economic growth stimulates increasing demand for paper. Exchange Rates – Import/Export balance. As US $ strengthens, it becomes easier to export paper to U.S. Capacity utilization – Operating rates above 91-92% utilization signals price increase. Capacity changes relative to demand changes drive utilization rates. Substitute products / technologies – High-Bright groundwoods have penetrated freesheet markets. Mail volume, office repro volume being impacted by internet

10. DemandU.S. GDP growth is decelerating 2005 2006 3.6% 3.3% Rising CostsEnergy, Fuel, Chemicals increasing Postal Rate HikeFirst class + 4%Fewer mail pieces Lower catalog circulation Lost share to substitute technology/internet Electric bill payment, e-mail Capacity ChangesExcess capacity is being shut down 638M Tons permanently shut in ‘05 ’06 Outlook FactorTrend Price Impact

11. The Brightness Issue Commodity white papers are moving from 84 92 brightness, beginning in Sept. ’05 Why? Competition on a global scale Quality distinction Vs Groundwood

12. Impact on Paper Buyers One choice from commodity producers (illustrates the commodity segment focus) Opaque markets will be affected Substitute 92 offset for 94 opaque New opaque level - 96

13. Glatfelter Response to Brightness Initiative Focus on customer choice Input from book publishing customers indicating a preference for current brightness levels Thor plus – 92 Thor – 84 * Demand will determine availability

14. Future Impact Inventory management Cost implications of manufacturing brighter paper Quality of recovered fiber as input to recycled paper is unknown Color consistency in cream papers

15. Growing interest among large consumers toward environmental leadership Large consumers seeking suppliers with similar environmental philosophies An increasing preference for certified paper products Environmentalist pressure is succeeding Most environmental education comes from activist groups Environmental issues will become more important Environmental Issues Facing Publishers and Paper Manufacturers

16. Reduced consumption Restricted fiber sourcing No old growth / endangered forests No U.S. Public lands No conversion to plantations No GMO’s No pesticides, herbicides, fertilizers Increased recycled content (emphasis on PCW) Clean production (emphasis on TCF) Forestry practices certified (to FSC standards) Keystone Issues Of Environmentally Preferable Paper

18. US Recovered Paper Life Cycle 2003 Data (000’s Tons) Recovered Paper 49,253 Total Supply of Fiber 98,011 Source: AF&PA 2004 U.S. Recovered Paper Statistical Highlights Sources of Recovered Fiber Uses of Recovered Fiber End Uses of Recovered Fiber Consumed at Paper Mills Consumed at Paper & Board Mills 33,650 Export 13,805 49% 19% 20% 7% 5% Other – 2,200 Imports – 399 Tissue Printing & Writing Recycled Paperboard Containerboard Newsprint 12% 25% 47% 5% 10% 1% (pkg)

19. Recovered Fiber Prices (Transaction Prices, May ‘05) $50-60 $75-80 $185-195 $310-340 Mixed De-Inked News OCC White Ledger Envelope NBSK Pulp Paper PCW Pulp(Printed) Cuts $510-560 Source: ForestWeb $480-510 $/Short Ton Contaminated Clean

20. Forestry Certification Systems Addressing the Issues Sustainable forestry initiative (SFI) – 144 million acres in US & CAN Forestry stewardship council (FSC) – 23 million acres in US & CAN Canadian standards association (CSA) – 64 million acres in CAN In U.S., SFI is most prolific, with more than 93 million acres certified. Only 8 million acres of U.S. Forestland are FSC certified Different approaches to achieving results: Governance Accreditation Verification Tracking & labeling

21. The SFI program is the largest certification program in the U.S. and Canada with over 150 million acres enrolled and 129 million acres independently third party certified. Governed by 15-member Board, mandating: 9 Principles 13 Objectives 34 Performance Measures 103 Operational Indicators 3 rd party certification requirement for any program participant wishing to utilize on-product labeling. Certification involves examination of procedures, forestry practices and in-the-field assessments. As a condition of membership, every AF&PA member company must manage forests and be certified according to SFI. SFI Program Addressing the issues

22. EPP Costs and Availability (Estimates) Availability Plentiful Scarce Low High Cost PCW FSC TCF ECF SFI

23. Consider ENGO impact on your organization Do your homework: talk to suppliers & other stakeholders Assess the importance of your organization’s reputation or mission Consider developing an environmental policy Arm yourself with information and create a strategy that is defensible, sustainable and accountable What Should Publishers Do? Managing the Risk Copyright (2005) Glatfelter

24. Glatfelter’s Environmental Commitment We plant 1.5 million trees per year (4 for every one we harvest) Since 1946 GLT has planted and donated 147 million trees First paper mill in North America to achieve ISO 14001 certification Energy self-sufficient: Co-generation power (utilize 40% biomass) Environmental partnerships – Minergy New Century Project – Investment of $36.8 Million Ozone bleaching Oxygen delignification Elemental Chlorine Free (ECF) All Glatfelter-owned forest lands are 3 rd party certified to SFI standards Glatfelter does not utilize fiber derived from ancient or endangered forests

25. Glatfelter Product Solutions All Neenah papers include recycled content

26. Question & Answer