Fourth Quarter Highlights:

Net sales of $1,047.7 million in the fourth quarter 2008 increased $445.8 million or 74% over the prior year quarter.

Adjusted EBITDA was $103.1 million compared to Adjusted EBITDA of $82.7 million in the prior year quarter.

Annualized synergies exceeded $67 million, well ahead of pace to achieve target of $90 million by 2010.

Net debt was reduced by about $119 million since the combination with Altivity Packaging, LLC (Altivity) in March 2008.

The company has reported a net loss for the fourth quarter 2008 of $57.7 million, or $0.17 per share, based upon 342.6 million weighted average shares. Excluding $15.5 million of charges primarily related to the write-off of the company’s #2 paper machine in West Monroe, Los Angeles and $3.3 million of charges associated with the combination with Altivity, adjusted net loss for the quarter was $38.9)million, or $0.11 per share. This compares to a fourth quarter 2007 net loss of $0.7 million, or $0.00 per share and a fourth quarter 2007 adjusted net loss of $7.3 million, or $0.04 per share based upon 202.1 million weighted average shares.

Excluding the West Monroe #2 paper machine write-off and $42.1 million of charges associated with the combination with Altivity, full year 2008 adjusted net loss was $(42.1) million or $(0.13) per share compared to a full year 2007 adjusted net loss of $(56.0) million or $(0.28) per share.

Despite experiencing $240 million of cost inflation during the year, our 2008 pro forma EBITDA remained relatively flat to the prior year. We were able to accomplish this through a number of initiatives, including price increases which totaled about $110 million. Additionally, our cost reduction initiatives contributed another $70 million to 2008 results. This marks the fifth consecutive year that Graphic has delivered significant cost savings. Finally, the integration of Altivity is well ahead of our original timeline as we achieved annualized synergies in excess of $67 million by the end of 2008.

We have also reduced net debt by about $119 million since closing the combination with Altivity last March. A major driver of this debt reduction was our focus on working capital in the second half of the year. In particular, we have been highly focused on inventory control and remain committed to managing capacity to reflect demand. As a result, in addition to the permanent shut-down of our #2 SUS paper machine and the idling of our medium machine for the last two weeks of the year in West Monroe, LA, we also elected to take a total of 43 days of market-related downtime across our recycled board mill system in the fourth quarter. As a result, we reduced inventory levels by about $37 million, which helped to generate over $140 million of operating cash flow in the fourth quarter alone.

Net Sales:

Net sales increased 74.0% to $1,047.7 million during fourth quarter 2008, compared to fourth quarter 2007 net sales of $601.9 million.

When comparing against the prior year quarter, net sales in the fourth quarter of 2008 were positively impacted by:

$470 million from the inclusion of Altivity results; and

$10 million of favorable pricing;

Net sales were negatively impacted by:

$24 million related to volume and mix; and

$10 million due to unfavorable foreign currency exchange rates;

Attached is supplemental data showing fourth quarter 2008 net sales and net tons sold by each of the company’s business segments: Paperboard Packaging, Multi-wall Bag and Specialty Packaging. Pro forma net sales and pro forma net tons sold are also shown, each assuming that the combination with Altivity occurred on January 1, 2007 and excluding fourth quarter 2007 results for the two coated recycled board mills divested in September 2008.

EBITDA:

EBITDA for fourth quarter 2008 was $84.3 million. Excluding $15.5 million of charges primarily related to the write-off of the company’s #2 paper machine in West Monroe, LA and $3.3 million of charges associated with the combination with Altivity, Adjusted EBITDA was $103.1 million. This compares to fourth quarter 2007 EBITDA of $89.3 million and Adjusted EBITDA of $82.7 million. Full year 2008 EBITDA was $413.3 million without a pro forma adjustment for the full year benefit of Altivity EBITDA. Excluding the West Monroe #2 paper machine write-off and $42.1 million of charges associated with the combination with Altivity, full year 2008 Adjusted EBITDA was $470.9 million compared to 2007 Adjusted EBITDA of $339.1 million. When comparing against the prior year quarter, Adjusted EBITDA in the fourth quarter of 2008 was positively impacted by:

$45 million from the inclusion of Altivity results;

$17 million of lower operating costs as a result of ongoing continuous improvement programs and lower compensation expense; and

$10 million of favorable pricing;

Fourth quarter 2008 Adjusted EBITDA was negatively impacted by:

$32 million of higher input costs primarily related to increased prices for chemicals, energy, caustic soda, and virgin fiber;

$13 million of costs primarily resulting from the shutdown of the #2 paper machine;

$4 million related to volume and mix; and

$2 million of unfavorable foreign currency translation.

Other Results:

At the end of the fourth quarter of 2008, the company’s total debt was $3,183.8 million compared to debt of $1,878.4 million at the end of 2007. Approximately $1.2 billion of debt was assumed in connection with the combination with Altivity. At December 31, 2008, the company had $143.2 million drawn from its $400 million revolving facility. In light of the unprecedented and continuing volatility in the credit and securities markets, as opposed to reducing debt, the company kept $160 million invested in short- term investments that are fully collateralized by U.S. Treasuries. Including Cash and Cash Equivalents, as of December 31, 2008, the company had available liquidity of $390.5 million.

Net interest expense was $58.2 million for fourth quarter 2008, as compared to net interest expense of $40.3 million in fourth quarter 2007. Full year 2008 net interest expense was $215.4 million compared to $167.8 million in 2007. The increase was primarily due to the additional debt assumed in the combination with Altivity.

Fourth quarter 2008 income tax expense was $9.4 million and full year 2008 income tax expense was $34.4 million. Both the fourth quarter and full year expense was predominately attributable to the noncash expense associated with the amortization of goodwill for tax purposes. The company has a $1.4 billion net operating loss carry-forward that is available to offset future taxable income in the US.

Capital expenditures for fourth quarter 2008 were $56.9 million compared to $34.3 million in the fourth quarter of 2007. Approximately $4.8 million of fourth quarter 2008 capital expenditures were related to the inclusion of Altivity results. For the full year 2008, capital expenditures were $183.3 million compared to $95.9 million in 2007. Approximately $33.0 million of 2008 capital expenditures were related to the inclusion of Altivity results.

Under the terms of its credit agreement, the company must comply with a maximum consolidated secured leverage ratio. As of December 31, 2008, the company’s ratio was 3.60 to 1.00, in compliance with the required maximum ratio of 5.00 to 1.00.