[0] Packaging Corporation of America Announces Timberland Sale Agreement.

Business Editors

LAKE FOREST, Ill.--(BUSINESS WIRE)--Sept. 28, 2000

Packaging Corporation of America (NYSE:PKG) announced today that it has entered into an agreement to sell approximately 385,000 acres of timberland to Southern Timber Ventures, LLC.

Packaging Corporation of America (PCA) expects to receive from the sale approximately $250 million in cash and a 33 1/3% equity ownership interest in Southern Timber Ventures, LLC. Financing for the sale will be provided by the John Hancock Bond and Corporate Finance Group. Closing for the sale is subject to certain conditions, but is expected to occur by the end of November.

"This sale will accomplish three important objectives for PCA," said Paul T. Stecko, Chairman and CEO of PCA. "First, it will provide us with approximately $250 million in cash, which we plan to use to pay down debt and help meet our goal of reducing our initial debt by $1.2 billion by the end of 2001. Second, the sale will provide us with a long term fiber supply agreement for our Counce, Tennessee mill. Finally, as a result of our equity interest in Southern Timber Ventures, PCA will retain a portion of the potential long term appreciation of these timberland assets."

The sale does not include timber cutting rights that PCA owns on approximately 150,000 acres of other woodlands that support its Counce, Tennessee and Valdosta, Georgia mills.

PCA is the sixth largest producer of containerboard and corrugated packaging products in the United States, with sales of $1.7 billion in 1999.