NOTE 5

Inventories


(In thousands)	2011		2010
Logs, pulpwood and wood fiber	$	17,713	$	19,901
Lumber		1,556		13,065
Pulp, paperboard and tissue products		162,426		139,404
Materials and supplies		62,376		55,951

	$	244,071	$	228,321

Valued at lower of cost or market:
LIFO basis	$	632	$	32,472
Average cost basis		243,439		195,849

	$	244,071	$	228,321

Inventories are stated at the lower of market or current average cost using the average cost method, except that the LIFO method is used to determine cost of logs, wood fiber and the majority of our lumber. Due to the sale of our sawmill in November 2011, which included logs and the majority of our lumber inventories accounted for under the LIFO method, the impact of LIFO significantly decreased. The fluctuations in quantities of LIFO inventories valued at costs prevailing in prior years had the affect of increasing earnings before income taxes by approximately $10.6 million in 2011, no impact in 2010, and an increase in earnings before income taxes of $1.0 million in 2009.