On the next slide, looking at the cash contributions from the business units you’ll see a steady and growing EBIDTA contribution over time. However, when we look for example at the reddish bar, you’ll see that the forest resources is generating only about two-thirds of the EBIDTA that it did back in 2006 before the housing collapse. However the top line in our performance fibers segment, we’re experiencing over a doubling of EBIDTA since 2006.Taking a look on the next slide at the dividend and the cash flow supporting that, we’ve had six dividend increases over the last seven years including an 11% dividend increase in September. The payout ratio this year on a full-year basis will be about 65%. On the next slide, looking at our credit metrics, we have very conservative leverage and on a GAAP basis our debt to total capitalization is about 35%, 36%. Our debt to EBIDTA ratio is 1.7x and we have a very strong 10.8 interest coverage. Reviewing our strategy on the next slide with respect to forest resources, the primary use of our strategic capital will be to grow our timberland portfolio over time in a very disciplined manner. We also have a continuous review of our timberland ownership to identify land that has higher and better use, or to identify land which is non-strategic which we will divest. From an operational point of view, our focus is to enhance the yield of every acre through advanced [silvocultral] practices. Moving to our real estate segment, here we’re focused on monetizing our rural, higher and better–use land through sale of conservation and recreational land. And we’ll show you on a map in a few minutes there where we have land on the I-95 coastal corridor from Savannah down to Daytona, and here, while continuing to keep this land under active timber management we have gone through a land use change or entitlement process to enhance the future value of the property.
And in performance fibers, our focus is to maintain our global leadership in the cellulose specialty space and we do this through continued differentiation and with a focus on purity, consistency and reliability. We also in our Jessup Facility have a major capital improvement underway and we’re focused on an on-time and on-budget completion of that by 2013 – and we’ll get into more details about that project in a few minutes.Moving on to the little bit deeper dive into the timberland segment, there are various desirable attributes including the fact that timberland assets have appreciated at a faster pace than inflation historically. Also there’s great flexibility with this asset class. If the markets are relatively soft you can defer harvest and continue to have biological growth; so biological growth while waiting for price improvement. As I mentioned, one of our strategic focuses is to grow our timberland base over time and in 2011 we have completed the acquisition of approximately 300,000 acres of timberland. Looking at the map on the next page and then reviewing where we have our timberland ownership, in the Atlantic region which is Florida and Georgia, we control 1.1 million acres and this is primarily pine plantations. In our Gulf region we have approximately 750,000 acres and again, it’s mostly pine plantations. Moving to the Pacific Northwest, in Washington State we have nearly 400,000 acres of timberland and this is primarily hemlock and Doug Fir and then in Washington State have 128,000 acres, and this is mostly mixed hardwoods. We are also the managing partner and have a 26% equity interest in a New Zealand venture that controls 327,000 acres of [Radiata] pine plantations. On the next slide, the main point here as I mentioned is that we have grown our timberland portfolio over time and will continue to grow in a disciplined manner; however it will be lumpy through the cycle. For example, in 2011 we will be adding to our timberland assets while in the prior several years we were a net seller. But importantly, if you take a look back to 2004 we had approximately 2.2 million acres under ownership and management and today we have about 2.7 million acres. Read the rest of this transcript for free on seekingalpha.com