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MWV Reports Fourth Quarter and Full-Year 2012 Results

  MWV Reports Fourth Quarter and Full-Year 2012 Results

Fourth Quarter Highlights:

  *4 percent sales growth (6 percent constant-currency) led by volume gains
    in targeted consumer and industrial packaging markets, as well as gains in
    specialty chemicals markets
  *Total business segment profits increased 29 percent
  *Cash flow from continuing operations increased 22 percent to $210 million
  *Board authorized repurchasing 5 million shares of common stock

Business Wire

RICHMOND, Va. -- January 30, 2013

MeadWestvaco Corporation (NYSE: MWV), a global leader in packaging and
packaging solutions  announced that total sales in the fourth quarter of 2012
increased 4 percent to $1.33 billion compared to fourth quarter of 2011.
Excluding the effect of unfavorable foreign currency exchange, sales grew 6
percent due to increased volume of higher value products across most of the
company’s targeted packaging and specialty chemicals markets, as well as from
higher land sales. During the quarter, the company had gains from its
commercial excellence and innovation initiatives that resulted in volume and
market share growth in medical dispensers, fragrance sprayers, beverage
multi-packs, aseptic liquid packaging, targeted food packaging and new
chemical formulations for adhesives and oilfield drilling markets. The company
also benefited from the acquisitions of Polytop (caps and closures), Ruby
Macons Ltd. (corrugated packaging materials) and Resitec (specialty
chemicals).

Pretax income from the company’s business segments increased 29 percent to
$132 million in the fourth quarter of 2012 compared to $102 million in the
fourth quarter of 2011. The performance was driven by increased profits in the
Food & Beverage and Community Development and Land Management segments, and by
strong earnings in the Specialty Chemicals segment, while profits declined in
the Home, Health and Beauty segment. Income from continuing operations was $17
million or $0.10 per share in the fourth quarter of 2012 compared to a loss of
$7 million or $0.04 per share in the fourth quarter of 2011. Excluding special
items, income from continuing operations in the fourth quarter of 2012 was $13
million or $0.07 per share versus $5 million or $0.03 per share in the fourth
quarter of 2011.

“We have been consistently improving our financial performance by executing on
a set of profitable growth strategies,” saidJohn A. Luke, Jr., chairman and
chief executive officer, MWV. “In the fourth quarter, these strategies –
especially a focus on commercial excellence, innovation and emerging markets –
again led to higher sales. However, our earnings in the quarter were impacted
by a sudden drop in economic activity at the end of the year associated with
the fiscal cliff in the U.S., and ongoing macroeconomic challenges in other
significant geographies, as well as by some unusual one-time items.
Nevertheless, our overall performance demonstrates our ability to grow our
business and bolster our results during challenging times by focusing on the
right strategies to outperform in the packaging and specialty chemicals
markets that we’ve targeted for profitable participation.”

Mr. Luke continued, “We increased our share in these markets by winning new
business for innovative products such as Melodie® fragrance sprayers,
expanding our presence in emerging markets like India, and leveraging new
technologies and commercial strategies across our global packaging platform.
That’s what we will continue to do going forward. We like the direction we’re
headed and have already seen stronger demand early this year compared to the
decline at the end of the fourth quarter. We believe that continued execution
of our profitable growth strategies, including the Brazil expansion and our
productivity programs, will drive earnings and cash flow growth in 2013.”

Fourth Quarter and Full-Year Comparison

Sales from continuing operations in the fourth quarter of 2012 were $1.33
billion compared to $1.28 billion in the fourth quarter of 2011. Income from
continuing operations in the fourth quarter of 2012 was $17 million, or $0.10
per share. Loss from continuing operations in the fourth quarter of 2011 was
$7 million, or $0.04 per share.

Sales in full-year 2012 were $5.46 billion compared to $5.32 billion in
full-year 2011. Income from continuing operations in full-year 2012 was $212
million, or $1.20 per share. Income from continuing operations in full-year
2011 was $217 million, or $1.25 per share.

Adjusted earnings per share from continuing operations, excluding the effects
of special items, are as follows:

                      Fourth Quarter          Full Year
                          2012      2011           2012   2011
Earnings (loss)
per share from
continuing                $0.10       $(0.04 )       $1.20        $1.25
operations, as
reported
                                                                             
Effects of                (0.03 )     0.07          0.05         0.14
special items
                                                                             
Earnings per
share from
continuing                $0.07      $0.03         $1.25        $1.39
operations, as
adjusted
                                                                             

Items excluded in the measure adjusted earnings per share from continuing
operations are presented in the “Use of Non-GAAP Measures” section of this
release.

Fourth Quarter Segment Results

Following is a summary of fourth quarter 2012 results by business segment. All
comparisons of the results for the fourth quarter of 2012 are with the fourth
quarter of 2011 on a continuing operations basis. As previously announced,
effective January 1, 2012, the company changed its segment reporting of its
packaging businesses. Information on the Food & Beverage; Home, Health &
Beauty; and Industrial segments, including segment descriptions, end market
and geographic sales breakdowns, and operating strategies, are available at:
http://www.meadwestvaco.com/PackagingSegments/index.htm.

Food & Beverage

In the Food & Beverage segment, sales were $744 million in the fourth quarter
of 2012 compared to $754 million in the fourth quarter of 2011. Profit was $53
million in the fourth quarter of 2012 compared to $31 million in the fourth
quarter of 2011.

Sales declined as unfavorable foreign currency exchange was partially offset
by improved pricing and product mix, as well as contribution from the caps and
closures business (Polytop) acquired in December 2011. Volume growth in
beverage, aseptic liquid packaging and targeted food packaging was more than
offset by declines in general food packaging. Beverage packaging volumes in
North America continued to outperform market trends as volumes grew with major
beer customers and the company gained share with carbonated beverage brand
owners. Beverage volumes in Asia grew strongly due to continued market
penetration with both global and regional brand owners. In Europe, beverage
volumes were unchanged. Liquid packaging volume growth was driven by gains
with targeted dairy customers. The decline in overall food packaging volumes
was due to aggressive inventory management actions by converters as the
quarter progressed. This was partially offset by strong gains in higher value
food packaging markets, such as frozen food. Tobacco volumes were essentially
unchanged.

Profit performance primarily reflects the benefit of higher pricing and
product mix improvements, and improved productivity from lower mill outage
costs (absorption and maintenance). These benefits were partially offset by
higher input costs and labor, as well as unfavorable foreign currency
exchange.

Home, Health & Beauty

In the Home, Health & Beauty segment, sales were $180 million in the fourth
quarter of 2012 compared to $181 million in the fourth quarter of 2011.
Results in the fourth quarter of 2012 were breakeven compared to $8 million in
the fourth quarter of 2011.

Volume growth for personal care dispensers and medical pumps, as well as
contribution from the caps and closures business, offset lower pricing from
contractual adjustments related to resin costs and unfavorable foreign
currency exchange. In personal care, volume growth was led by gains in airless
dispensing solutions for major skin care and anti-aging brand owners, along
with volume growth in fragrance sprayers. In healthcare packaging, volume
growth was driven by continued strong demand for the segment’s
preservative-free and metered dosage medical pumps. Adherence packaging volume
declined as customers transition to Shellpak® Renew, a new adherence solution
launched in 2012. In home and garden packaging, volume declines in North
America due to aggressive inventory management actions by a major customer
were partially offset by strong trigger sprayer volumes with homecare brand
owners in Europe and Asia.

Profit performance reflects lower pricing from contractual adjustments related
to resin costs, unfavorable foreign currency exchange and losses in personal
care folding carton products. These effects were partially offset by volume
growth in personal care dispensers and medical pumps, as well as contribution
from the caps and closures business.

Industrial

In the Industrial segment, sales were $118 million in the fourth quarter of
2012 compared to $120 million in the fourth quarter of 2011. Profit was $9
million in the fourth quarter of 2012 compared to $13 million in the fourth
quarter of 2011.

Overall volumes grew strongly and the segment saw pricing and product mix
benefits from continued gains in higher value corrugated packaging for
targeted meat, produce and consumer products end markets in Brazil. The
segment also saw modest top line contribution from Ruby Macons Ltd., a leading
producer of high-quality corrugated packaging material in India that the
company acquired at the end of November. These gains were primarily offset by
unfavorable foreign currency exchange.

During the fourth quarter, the segment continued to optimize its new
manufacturing platform in Três Barras, which resulted in approximately $10
million in startup related costs. Startup costs are expected to decline in
early 2013 as the business has substantially completed the transition to
high-quality corrugated medium on paper machine No. 3, and is manufacturing
high-quality linerboard on its new paper machine No. 4.

Profit performance primarily reflects unfavorable foreign currency exchange,
higher labor costs and expenses related to the startup of the segment’s new
paperboard machine. These impacts were partially offset by volume growth,
improved pricing and product mix in corrugated packaging, as well as from
benefits related to certain value-added tax matters in Brazil.

Specialty Chemicals

In the Specialty Chemicals segment, sales increased to $232 million in the
fourth quarter of 2012 compared to $193 million in the fourth quarter of 2011.
Profit was $42 million in the fourth quarter of 2012, which was unchanged
versus the fourth quarter of 2011.

Sales growth was led by strong volume gains in targeted pine chemicals and
carbon technology markets. The segment continued to penetrate higher value
pine chemicals end markets of adhesives, asphalt and oilfield drilling.

These volume gains led to higher profits with the benefits offset by higher
costs for certain raw materials and freight, as well as increased growth
investments and higher expenses from planned maintenance outages.

Community Development and Land Management

Sales for the Community Development and Land Management segment were $56
million in the fourth quarter of 2012 compared to $35 million in the fourth
quarter of2011. Profit was $28 million in the fourth quarter of 2012 compared
to $8 million in the fourth quarter of 2011.

Profit from real estate activities was$23million inthe fourth quarter of
2012compared to$5millionin the fourth quarter of 2011. The segment sold
approximately15,300acres for gross proceeds of$32million in the fourth
quarter of 2012 compared to approximately4,050acres for gross proceeds
of$11million in the fourth quarter of 2011. Profit from forestry operations
and leasing activities was$5million in the fourth quarter of 2012 compared
to$3million in the fourth quarter of 2011.

Other Items

On January 28, 2013, the Board of Directors authorized the company to
repurchase 5 million shares of common stock. The company plans to make any
purchases opportunistically.

On November 30, 2012, MWV acquired Ruby Macons Ltd., India’s leading producer
of corrugated packaging materials for the country’s growing industrial
packaging industry. The results of this business are included in the company’s
Industrial segment.

On December 11, 2012, MWV acquired Resitec Industria Quimica, Ltda, a
Brazilian company specializing in rubber emulsifiers, adhesive resins and
lubricants. This business is included in the Specialty Chemicals segment.

In the fourth quarter of 2012, total pretax input costs of energy, raw
materials and freight increased by $17 million compared to the fourth quarter
of 2011 on a continuing operations basis.

In the fourth quarter of 2012, the pretax impact on earnings from foreign
currency exchange was $9 million unfavorable compared to the fourth quarter of
2011 on a continuing operations basis.

Cash flow provided by operating activities from continuing operations was
about $330 million in full-year 2012 compared to $479 million in full-year
2011. The change is due to higher prepaid taxes related to the capacity
expansion in Brazil, increased payments to settle legacy environmental
matters, the timing of income tax payments as well as higher year-end
inventory levels.

Capital spending from continuing operations was $656 million in full-year 2012
compared to $655 million in full-year 2011.

The company's U.S. qualified retirement plans remain over-funded, and
management does not anticipate any required regulatory funding contributions
to such plans in the foreseeable future.

The annual effective tax rate attributable to continuing operations in 2012,
including the effects of discrete tax items, was approximately 30 percent. The
annual effective tax rate attributable to continuing operations in 2013,
excluding the effects of discrete tax items, is expected to be about 31
percent.

MWV paid a regular quarterly dividend of $0.25 per share during the fourth
quarter of 2012. On January 28, 2013, MWV declared a regular quarterly
dividend of $0.25 per common share. The payment of the dividend will be made
on March 1, 2013, to shareholders of record at the close of business on
February 7, 2013.

Outlook

In the first quarter of 2013, MWV expects stronger demand compared to the
dramatic decline the company experienced in the fourth quarter of 2012. The
company, however, expects modestly lower earnings compared to the first
quarter last year principally due to a difficult comparison in the Industrial
segment, including higher startup expenses related to the Brazilian expansion,
as well as lower earnings from land sales in the Community Development and
Land Management segment.

Despite what MWV expects to be a challenging demand environment, the company
expects sales, earnings and cash flow to grow in 2013 due to continued
execution of the company’s profitable growth strategies, significant
contribution from its expanded platform in Brazil, as well as benefits from
acquired businesses.

Conference Call

Investors may participate in the live conference call today at 10 a.m. EDT by
dialing 1 (800) 230-1059 (toll-free domestic) or 1 (612) 234-9959
(international); passcode: MeadWestvaco. Please call to register at least 10
minutes before the conference call begins. The live conference call and
presentation slides may be accessed on MWV's website at www.mwv.com. After
connecting to the home page, go to the Investors page and look for the link to
the webcast. Please go to the website at least 15 minutes prior to the call to
register, download and install any necessary audio software. A replay of the
call will be available for one month via telephone starting at 12 p.m. EDT,
January 30, and can be accessed at 1 (800) 475-6701 (toll-free domestic) or 1
(320) 365-3844 (international); access code: 277142.

About MWV

MeadWestvaco Corporation (NYSE:MWV)is a global packaging company providing
innovative solutions to the world’s most admired brands in the healthcare,
beauty and personal care, food , beverage, home and garden, tobacco, and
agricultural industries. The company also produces specialty chemicals for the
automotive, energy, and infrastructure industries and maximizes the value of
its land holdings through forestry operations, property development and land
sales. MWV’s network of 125 facilities and 16,000 employees spans North
America, South America, Europe and Asia. The company has been recognized for
financial performance and environmental stewardship with a place on the Dow
Jones Sustainability World Index every year since 2005. Learn more at
www.mwv.com.

Forward-looking Statements

Certain statements in this document and elsewhere by management of the company
that are neither reported financial results nor other historical information
are “forward-looking statements” within the meaning of the Private Securities
Litigation Reform Act of 1995. Such information includes, without limitation,
the business outlook, assessment of market conditions, anticipated financial
and operating results, strategies, future plans, contingencies and
contemplated transactions of the company. Such forward-looking statements are
not guarantees of future performance and are subject to known and unknown
risks, uncertainties and other factors which may cause or contribute to actual
results of company operations, or the performance or achievements of each
company, or industry results, to differ materially from those expressed or
implied by the forward-looking statements. In addition to any such risks,
uncertainties and other factors discussed elsewhere herein, risks,
uncertainties, and other factors that could cause or contribute to actual
results differing materially from those expressed or implied for the
forward-looking statements include, but are not limited to, events or
circumstances which affect the ability of MeadWestvaco to realize improvements
in operating earnings from the company’s ongoing cost reduction initiatives;
the ability of MeadWestvaco to close announced and pending transactions;
competitive pricing for the company’s products; impact from inflation on raw
materials, energy and other costs; fluctuations in demand and changes in
production capacities; relative growth or decline in the United States and
international economies; government policies and regulations, including, but
not limited to those affecting the environment, climate change, tax policies
and the tobacco industry; the company’s continued ability to reach agreement
with its unionized employees on collective bargaining agreements; the
company’s ability to execute its plans to divest or otherwise realize the
greater value associated with its land holdings; adverse results in current or
future litigation; currency movements; volatility and further deterioration of
the capital markets; and other risk factors discussed in the company’s Annual
Report on Form 10-K for the year ended December31, 2011, and in other filings
made from time to time with the SEC. MeadWestvaco undertakes no obligation to
publicly update any forward-looking statement, whether as a result of new
information, future events or otherwise. Investors are advised, however, to
consult any further disclosures made on related subjects in the company’s
reports filed with the SEC.

                                                                           
                                                                           
Consolidated Statements of Operations

In millions, except per share amounts (Unaudited)
                                                                           
                    Three Months Ended         Twelve Months Ended
                       December 31,                  December 31,
                       2012        2011^1          2012        2011^1  
Net sales              $ 1,328       $ 1,282         $ 5,459       $ 5,318
                                                                             
Cost of sales            1,096         1,075           4,329         4,193
Selling, general
and                      183           181             683           671
administrative
expenses
Interest expense         41            41              155           165
Other expense           5           (1    )        (11   )      (24   )
(income), net
                                                                             
Income (loss)
from continuing
operations               3             (14   )         303           313
before income
taxes
Income tax
(benefit)               (14   )      (7    )        91          96    
provision
                                                                             
Income (loss)
from continuing          17            (7    )         212           217
operations
                                                                             
(Loss) income
from
discontinued            -           (18   )        (7    )      29    
operations, net
of income taxes
                                                                             
Net income
(loss)                 $ 17         $ (25   )       $ 205        $ 246   
attributable to
the company
                                                                             
Net income
(loss) per
diluted share
attributable to
the company:
Income (loss)
from continuing        $ 0.10        $ (0.04 )       $ 1.20        $ 1.25
operations
(Loss) income
from                    -           (0.10 )        (0.04 )      0.17  
discontinued
operations
                                                                             
Net income
(loss)                 $ 0.10       $ (0.14 )       $ 1.16       $ 1.42  
attributable to
the company
                                                                             
Shares used to
compute net              178.7         171.1           177.2         174.1
income per
diluted share

    
       Certain amounts in 2011 have been recast to conform to the presentation
^1     of discontinued operations of the Consumer & Office Products business
       that was spun-off on May 1, 2012.
       
MeadWestvaco Corporation and consolidated subsidiary companies

                                                                             
                                                                             
Consolidated Balance Sheets

In millions (Unaudited)
                                                       
                                             December 31,       December 31,
                                             2012               2011
Assets
Cash and cash equivalents                    $    663           $    656
Accounts receivable, net                          607                591
Inventories                                       661                579
Other current assets                              131                63
Current assets of discontinued                   —                 353
operations ^1
                                                                             
Current assets                                    2,062              2,242
                                                                             
Property, plant, equipment and                    3,740              3,442
forestlands, net
Prepaid pension asset                             1,258              969
Goodwill                                          719                668
Other assets                                      1,085              1,089
Non-current assets of discontinued               —                 353
operations ^1
                                                                             
                                             $    8,864         $    8,763
                                                                             
Liabilities and Equity
Accounts payable                             $    597           $    601
Accrued expenses                                  445                489
Notes payable and current                         63                 254
maturities of long-term debt
Current liabilities of                           —                 136
discontinued operations ^1
                                                                             
Current liabilities                               1,105              1,480
                                                                             
Long-term debt                                    2,100              1,880
Other long-term obligations                       1,298              1,244
Deferred income taxes                             983                915
Non-current liabilities of                        —                  43
discontinued operations ^1
                                                                             
Shareholders' equity                              3,360              3,182
Non-controlling interest                         18                19
                                                                             
Total equity                                     3,378             3,201
                                                                             
                                             $    8,864         $    8,763

    
       Amounts attributable to discontinued operations at December 31, 2011
^1     reflect the discontinued operations treatment of the Consumer & Office
       Products business that was spun-off on May 1, 2012.
       
MeadWestvaco Corporation and consolidated subsidiary companies

                                                                             
                                                                             
Segment Information

In millions (Unaudited)
                                             
                       Three Months Ended            Twelve Months Ended
                       December 31,                  December 31,
                       2012        2011^1          2012        2011^1
Sales
Food &                 $ 744         $ 754           $ 3,105       $ 3,078
Beverage
Home, Health &           180           181             770           766
Beauty
Industrial               118           120             457           507
Specialty                232           193             940           811
Chemicals
Community
Development &           56          35            193         161   
Land
Management
                                                                             
Total                    1,330         1,283           5,465         5,323
Inter-segment           (2    )      (1    )        (6    )      (5    )
eliminations
                                                                             
Consolidated           $ 1,328      $ 1,282        $ 5,459      $ 5,318 
total
                                                                             
Segment profit
Food &                 $ 53          $ 31            $ 309         $ 312
Beverage
Home, Health &           -             8               35            34
Beauty
Industrial               9             13              49            80
Specialty                42            42              224           203
Chemicals
Community
Development &           28          8             80          63    
Land
Management
                                                                             
Subtotal                 132           102             697           692
Corporate and           (129  )      (116  )        (394  )      (379  )
Other ^2
                                                                             
Consolidated           $ 3          $ (14   )       $ 303        $ 313   
total ^3

    
       The information presented for the 2011 periods has been conformed to
^1     the company’s new segment reporting structure effective January 1,
       2012.
       
       Corporate and Other includes expenses associated with corporate support
       staff services, as well as income and expense items not directly
       associated with ongoing segment operations, such as restructuring
^2     charges, pension income and curtailment gains and losses, interest
       expense and income, non-controlling interest income and losses, certain
       legal settlements, gains and losses on certain asset sales and other
       items.
       
^3     Represents income from continuing operations attributable to the
       company before income taxes.
       
MeadWestvaco Corporation and consolidated subsidiary companies



Use of Non-GAAP Measures

The presentation of income and earnings per share from continuing operations,
adjusted to exclude the effects of the items listed below, is not meant to be
considered in isolation or as a substitute for income (loss) and earnings
(loss) per share from continuing operations determined in accordance with
generally accepted accounting principles (“GAAP”). The company believes these
non-GAAP measures provide investors, potential investors, securities analysts
and others with useful information to evaluate the performance of the
business, because these non-GAAP measures exclude charges and tax benefits
that management believes are not indicative of the ongoing operating results
of the business. The effects of these items on income (loss) and earnings
(loss) per share from continuing operations determined in accordance with GAAP
are as follows:

                                                          
In millions, except per
share amounts                2012        2012          2011        2011
(unaudited)
                             Net         Earnings      Net         Earnings

                             Income      Per Share     Income      Per Share
Fourth Quarter
Income (loss) and
earnings (loss) per
share from                   $ 17        $ 0.10        $ (7  )     $ (0.04 )
continuing operations,
as reported
                                                                             
Add:
Restructuring charges          5           0.03          6           0.04
Benefit plan charge            —           —             6           0.03
                                                                             
Deduct:
Benefit from cellulosic
biofuel producer              (9  )      (0.06 )      —         —     
credits, net
                                                                             
Income and earnings per
share from continuing        $ 13       $ 0.07       $ 5        $ 0.03  
operations, as
adjusted
                                                                             
                                                                             
                             2012        2012          2011        2011

Full Year                    Net         Earnings      Net         Earnings

                             Income      Per Share     Income      Per Share
Income and earnings per
share from continuing        $ 212       $ 1.20        $ 217       $ 1.25
operations, as
reported
                                                                             
Add:
Restructuring charges          17          0.10          19          0.11
Benefit plan charge            —           —             6           0.03
                                                                             
Deduct:
Benefit from cellulosic
biofuel producer              (9  )      (0.05 )      —         —     
credits, net
                                                                             
Income and earnings per
share from continuing        $ 220      $ 1.25       $ 242      $ 1.39  
operations, as
adjusted
                                                                             
MeadWestvaco Corporation and consolidated subsidiary companies
                                                                             

Contact:

MeadWestvaco Corporation
Media:
Tucker McNeil, +1 804-444-6397
mediainquiries@mwv.com
or
Investor Relations:
Jason Thompson, +1 804-444-2556
 
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