Leading positions in value-added specialty paper markets; Diverse end markets; Tax-advantaged corporate structure; and Relatively steady earnings and cash flow. High debt leverage; Declining carbonless paper demand; Lower operating margins because of product mix changes; Raw-material cost pressures; and Significant capital expenditures over the next two years. The ratings on Appleton Papers Inc. reflect its aggressive financial profile, declining carbonless paper volumes, lower operating margins from a shifting product mix, and heavy near-term capital spending plans. Leading market shares in certain specialty paper markets, diverse end uses, successful efforts to offset some of the decline in carbonless paper business, and relatively stable earnings and cash flows partially offset these factors. The Appleton, Wis.-based company is the world's largest manufacturer of
