2008 – 31 March 2008 INCOME Interest income 218 724186 721 incl

2008 – 31 March 2008 INCOME Interest income 218 724186 721 incl. During the quarter, our entire organization continued to focus oncontrolling expenses and improving productivity while advancing our growthprograms and delivering excellent service to our customers. As a result, weincreased our gross profit margin over the prior year by 300 basis points andimproved our operating margin by 220 basis points. Additionally, we generatedsolid free cash flow, which positions us with total available cash and committedliquidity of over $1 billion.” First Quarter Financial Highlights* Net sales decreased 16% to $988 million in the quarter, compared with $1.18billion in 2008.

The decrease in net sales primarily resulted from a $139million reduction in unit volumes principally in Protective Packaging and a $102million unfavorable effect of foreign currency exchange, which was partiallyoffset by a $49 million favorable effect of product price/mix primarily in FoodPackaging. Excluding the unfavorable effect of foreign currency translation, netsales would have decreased 7%. * Cost of sales decreased $170 million, or $91 million excluding a favorableeffect of foreign currency translation. This decrease resulted primarily fromthe impact of lower unit volumes and approximately $50 million in lower averagepetrochemical-based raw material costs. Benefits from GMS and the 2008productivity program helped to offset the impact of lower unit volumes.

* Marketing, administrative and development expenses decreased $20 million, or$8 million excluding a favorable effect of foreign currency translation. Thisdecrease reflects tight control of expenses and savings from the 2008 costreduction and productivity program.* Operating profit increased to $120 million, or 12.1% of net sales. This iscompared with $117 million, or 9.9% of net sales, for the first quarter of2008.Business Segment ReviewFood Packaging SegmentFood Packaging`s first quarter net sales decreased 9% to $424 million comparedwith $468 million last year. Excluding an unfavorable effect of foreign currencytranslation, segment net sales would have increased 1%. This increase in net sales primarily reflects favorable product price/mix inNorth America and Latin America. This increase was partially offset by adecrease in unit volumes primarily in the United States due to a decline in meatproduction in the quarter and in Brazil due to both credit constraints facingmeat processors and, to a lesser extent, a decline in EU imports of Brazilianbeef. Operating profit was $59 million in the quarter, or 13.8% of Food Packaging netsales, compared with $56 million, or 12.0% of net sales, in 2008.