<B>Willamette Reports Increased Earnings</B>

Willamette reported third quarter earnings of $83.4 million. Earnings for the first nine months of the year were $258.9 million, up 48% from the $1.58 earned during the same period in 1999.

Sales for the third quarter were $1.1 billion. Year-to-date sales in 2000 were $3.4 billion, up 12% from sales during the first nine months of 1999.

Willamette's brown paper business continued strong during the quarter. While domestic volumes were down slightly due to fewer operating days, margins were much improved as compared to third quarter 1999, according to Duane McDougall, president and CEO. "Operating earnings for our brown paper facilities were up significantly compared to both the third quarter 1999 and second quarter 2000 due to healthy demand and lower costs for OCC, or recycled brown paper," McDougall said.

The company's white paper business improved compared to third quarter 1999 due to improved pricing and increased volume. "While pricing for uncoated free sheet weakened slightly from the second quarter of 2000, an announced October price increase should improve the outlook for this product line," McDougall noted. The company's white paper operations were negatively impacted due to downtime experienced because of construction activities at the Johnsonburg, Pennsylvania, paper mill and the start-up of the Port Wentworth, Georgia, market pulp mill. "Both projects are progressing through the normal start-up curve and we're producing excellent quality pulp at Port Wentworth," according to McDougall.

The outlook for the company in the fourth quarter is cautiously optimistic, according to McDougall. "On the brown paper side of the business, we see some signs of slowing due to the slowdown of the general economy, however, operating earnings of this business segment remain strong."

"The announced price increase for uncoated free sheet bodes well for this product line during the fourth quarter. Market pulp conditions are more uncertain now after nearly eighteen months of improved pricing. However, with improved production at Johnsonburg and a full quarter of production at Port Wentworth, we should be in an excellent position to capitalize on our operating efficiencies.

"Building materials markets are still in the doldrums and some additional downtime is expected during the fourth quarter to match supply with orders," McDougall said.