On June 9, 2005, Standard&Poor's Ratings Services revised its outlook on specialty paper producer Appleton Papers Inc. to negative from stable. At the same time, it affirmed all ratings, including the 'BB' corporate credit rating. The rating action reflects credit measures that remain somewhat weaker than Standard&Poor's had been expecting Appleton to achieve. Debt, including capitalized operating leases, remains elevated at $625 million at March 31, 2005, and debt to last-12-months EBITDA is very aggressive at 4x because of debt-financed acquisitions. Although our ratings incorporated expectations that Appleton would need to pursue growth opportunities to replace shrinking carbonless paper volumes, we had anticipated a greater portion to be generated internally. However, revenue growth of thermal products
