content_image/70339.jpg content_image/70338.jpg
## Competition and Costs 

Despite the size of the Company’s manufacturing capacity for paper, paperboard, packaging and pulp products, the markets in all of the cited product lines are large and highly fragmented. The markets for wood and specialty products are similarly large and fragmented. There are numerous competitors, and the major markets, both domestic and international, in which the Company sells its principal products are very competitive. These products are in competition with similar products produced by others, and in some instances, with products produced by other industries from other materials. 

Many factors influence the Company’s competitive position, including prices, costs, product quality and services. You can find more information about the impact of prices and costs on operating profits on pages 9 through 21 of Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. You can find information about the Company’s manufacturing capacities on page A-5 of Appendix II. 

## Marketing and Distribution 

The Company sells paper, packaging products, building materials and other products directly to end users and converters, as well as through resellers. We own a large merchant distribution business that sells products made both by International Paper and by other companies making paper, packaging and supplies. Sales offices are located throughout the United States as well as internationally. We also sell significant volumes of products through paper distributors, including our own merchant distribution network, and agents. 

We market our U.S. production of lumber and plywood through independent distribution centers. 

## Description of Principal Products 

The Company’s principal products are described on pages 15 through 17 of Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 

## Sales Volumes by Product 

Sales volumes of major products for 2004, 2003, and 2002 were as follows: 

## International Paper Consolidated (excluding Carter Holt Harvey) 

<img src='content_image/70339.jpg'>

## Carter Holt Harvey (4) 

<img src='content_image/70338.jpg'>

(1) Includes third party and inter-segment sales. 

(2) Sales volumes for divested businesses are included through the date of sale, except for discontinued operations. 

(3) Includes internal sales to mills. 

(4) Includes 100% of volumes sold. 

## Sales Volumes by Product (1) (2) (Unaudited) 

