KEY FACTS ABOUT RAYMOND JAMES LTD.

- Formerly known as Goepel McDermid Inc., became Raymond James Ltd. in January 2001. - Parent company, NYSE-listed Raymond James Financial, Inc (RJF) ranks as the ninth largest full-service brokerage firm in the U.S., with over C$2.6 billion in revenues. - Raymond James Financial maintains an established network of 4,800 investment professionals in approximately 2,000 offices worldwide with $120 billion (Cdn) in private client assets under administration. - Raymond James research has been ranked #1 in the Wall Street Journals quarterly performance rankings more than any other firm over the last ten years. The research team includes 46 analysts in the U.S. covering 475 companies, and 17 analysts in Canada, covering 130 companies. - The Raymond James forest products corporate finance team is a well recognized financial advisor to the forest industry in Canada, with a track record for innovative transactions.

October 10, 2002

Paper & Forest Industry Update:

The Ugly, the Good, the Bad

Mark Bishop Equity Research Analyst Paper & Forest Products Raymond James Ltd.

October 10, 2002

 Industry Overview Commodity Review B.C. Industry

October 10, 2002

The Ugly

Too much capacity Easy access to capital More global fibre looking for a home

October 10, 2002

Performance during the late 1990s was not impressive.

TSE P&FP vs. TSE 300 & S&P P&FP vs. S&P500 Relative Strength Index
1.30 1.20 1.10 1.00 0.90 0.80 0.70 0.60 0.50 0.40
Jan-90 Jan-91 Jan-92 Jan-93 Jan-94 Jan-95 Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02

0.30

TSE PFP / TSE 300

S&P PFP / S&P500

October 10, 2002

Declining need to invest in the sector

P&FP Relative Weight of TSE 300 Composite
5.0% 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% 30 25 20 15 10 5 0

Weight (left axis)

Member Companies

Au g02

De c95

De c96

De c97

De c98

De c99

De c00

De c01

October 10, 2002

The Good

Capacity closures
Capital spending restraint

Market discipline

October 10, 2002

Capacity closures
% NA Closure Leader IP Abitibi Abitibi IP IP IP GP % Leader Capacity 18% 16% 12% 21% 18% 12% 11%

Segment
Market Pulp Newsprint Groundwood Papers Uncoated Freesheet Containerboard Lumber Plywood 000 mt 000 mt 000 mt 000 st 000 st Mmfbm Msf

2001/2000
600 920 260 2450 2800 2800 2150

Capacity 3% 5% 4% 14% 5% 4% 10%

. but how permanent?

8
October 10, 2002

Capital spending restraint

Capital Expenditures / Depreciation
2.5

2.0

1.5

1.0

0.5

0.0

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 US Canada EUR

October 10, 2002

Capital spending restraint

AF&PA U.S. Capacity Forecast Avg. Annual Capacity Change Capacity Change 2001/2000 2002-2004
-5.6% -8.0% -4.7% 2.0% 0.0% 1.3% 0.0% -1.3% -1.5% 4.5% -0.8% 3.9% 0.4% 0.0% 0.1% 0.4%

Commodity Newsprint

Uncoated groundwood Uncoated freesheet Coated groundwood Coated freesheet Market pulp Containerboard Total

Lowest growth rate ever recorded

10
October 10, 2002

Market discipline
US Newsprint (east) Prices vs. N.A. Operating Rates
110
% Capacity

100 90 80 70
Jan-99 Jan-00 Jan-01 Oct-99 Oct-00 Oct-01 Jan-02 Jul-99 Jul-00 Apr-99 Apr-00 Apr-01 Jul-01

60

650 600 550 500 450 400 350 300

NA Op Rate

US Newsprint (right axis)

11

October 10, 2002

US$/mt

 historic low inventories

North American Newsprint Total Inventories vs. Price
2,000 650 600 550

000's mt

500 450 400 350 1,500 99 00 Total Newsprint Inventory 01 Std. News Price 02 300

Source: Pulp & Paper Products Council, Pulp and Paper Week

12

US $/mt
October 10, 2002

Recent weaker U.S. currency has helped NA industry

NBSK Pulp Pricing - US$ vs. euros
1.40 1.30 1.20

Jan. 2000=1.00

1.10 1.00 0.90 0.80 0.70 0.60 Jan-00 Jul-00 Jan-01 U.S.$/mt Jul-01 euro/mt Jan-02 Jul-02

13

October 10, 2002

Recent relative performance more encouraging

Relative Performance of TSX300 and TSX Paper & Forest Indexes 1.30 1.20 1.10 Start of U.S. Recession (NBER)

Dec. 2000=1.00

1.00 0.90 0.80 0.70 0.60 0.50

May-01

Nov-01

May-02

Dec-00

Dec-01

Feb-01

Feb-02

Mar-01

Aug-01

Sep-01

Mar-02

Aug-02

TSX 300

TSX P&FP

14

October 10, 2002

Sep-02

Jan-01

Jun-01

Jan-02

Jun-02

Apr-01

Apr-02

Jul-01

Oct-01

Jul-02

Consolidation continues
Market Share of Top Five Producers in North America
Tissue Uncoated Freesheet OSB Newsprint Containerboard Pulp Lumber 0% 10% 20% 30% 40% 1995 2002 50% 60% 70% 80%
Tissue top 5 producers Georgia Pacific Kimberly Clark Proctor & Gamble SCA Cascades 35% 16% 15% 5% 4% 75%

UFS top 5 producers International Paper Weyerhaeuser Domtar Boise Cascade Georgia Pacific

23% 17% 15% 10% 9% 74%

OSB top 5 producers Louisiana Pacific Weyerhaeuser Nexfor Georgia Pacific Grant

26% 17% 13% 8% 7% 71%

Newsprint top 5 producers Abitibi Bowater Kruger NorskeCanada SP Newsprint

29% 22% 6% 5% 5% 67%

Containerboard top 5 producers Smurfit-Stone 18% Weyerhaeuser 15% International Paper 12% Georgia Pacific 10% Temple-Inland 6% 61% Market Pulp top 5 producers Weyerhaeuser 12% International Paper 11% Georgia Pacific 10% Tembec 7% Parsons & Whitmore 6% 45% Lumber top 5 producers Weyerhaeuser International Paper Canfor Georgia Pacific West Fraser

10% 5% 4% 3% 3% 26%

15

October 10, 2002

 and may lead to more stable pricing.

Market Share vs. Price Volatility
100.0%
1995-2001 Average Capacity Share of Top 5 Producers

90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 30.0%

Lum ber Linerboard Tissue Coated groundw ood Coated freesheet New sprint Uncoated freesheet Market pulp

20.0% 10.0% 0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

Average Quarterly Price Change (Abs %, 1992-2001)

16

October 10, 2002

Bigger isnt necessarily better

Select Paper & Forest Products Companies Market Capitallization v. Return on Capital
$35,000
Current Market Cap (C$ Mln.)

$30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

5 Year Average (1997-2001) Return on Capital (%)

17

October 10, 2002

 but customers are also consolidating.

Market Share of Top Five in North America

Home Improvement Retailers

Publishers

Homebuilders

Printers

0.0%

10.0%

20.0%

30.0% 2002

40.0%

50.0%

60.0%

Top 5 Home Improvement Retailers Home Depot 30% Lowes 12% Menard 3% Carolina Holdings 2% 84 Lumber 1% 49% Top 5 Publishers Gannett 10% Tribune 7% Knight Ridder 5% New York Times 5% Dow Jones 2% 28% Top 5 Homebuilders KB Home 3% Lennar 3% Pulte 3% Centex 3% D.R. Horton 2% 13% Top 5 Printers Quebecor World 4% R.R. Donnelley 3% Mail-Well, Inc. 1% Moore Corp. 1% Vertis 1% 11%

18

October 10, 2002

Consolidation will continue

Drivers:
Customer consolidation Globalization Buy vs. build

Benefits:
Inventory management Best practices Product rationalization Pricing stabilization

19

October 10, 2002

The Bad tech meltdown, global geopolitical concerns

& corporate misconduct has significantly reduced confidence in capital markets

print advertising recovery is not materializing

resolution of the US/Cdn lumber trade dispute remote supply discipline may be faltering

20

October 10, 2002

Commodity Review
Typical economic recovery, inventory and supply conditions aside, drives demand in paper and forest products commodities through the following sequence: 1. Building materials Lumber & panels interest rate sensitive, consumer led Packaging - Containerboard with initial pickup in industrial economy & manufacturing activity Communication papers - Uncoated freesheet (UFS) increasing demand for business papers first e.g., UFS increasing demand for magazine & advertising follows e.g., coated paper resulting increase in pulp demand Publishing papers - Newsprint largely driven by retail kicks in with increasing consumer confidence as a result of improved industrial activity i.e., job growth
21
October 10, 2002

2.

3.

4.

Commodity Review
Current and Trough - Peak Commodity Cycle Pricing
1400 1200 1000
US$/unit

800 600 400 200 0

42 lb Linerbrd
October 10, 2002

CSP Plywood

WSPF Lumber

Newsprint

NBSK Pulp

40 lb CGW

22

50 lb UFS

NC OSB

Lumber
WSPF 2x4 Lumber Prices and Supply Shocks
US$/mfbm 600 Lumber III 500 SLA (Export Quota)

400

Lumber I

Lumber II

300

200 US PNW Spotted Owl Lumber IV

100

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

current $

constant $*

Linear (constant $*)

*US PPI price deflator

Source: Random Lengths, RJ Research estimates and analysis

23

2002

October 10, 2002

Lumber
WSPF 2x4 Lumber vs. 30 yr. Mortgage Rate
600 500
US$/mfbm
10.0 9.0
forecast

8.0

400
7.0

300
6.0

200 100
93 94 95 96 97 98 99 00 01 02 03 Western SPF 2x4 KD
Source: Random Lengths , Freddie Mac

5.0 4.0

30 yr. mortgage rates (%)

24

October 10, 2002

Lumber 27% cash duties in place since May 22 Canadian industry responds with higher operating rates to reduce unit costs

Preliminary WTO win for Canada in July

Next key ruling in Feb. 2003 NAFTA

Curtailments now on the increase

25

October 10, 2002

Lumber

B.C. Public Lumber Companies - Recent and Potential Duty Liability Total Accruals Prospective To 1Q02 (Pre-tax) Duty Rate (%) ($mln) (%) 16.0 34.2 61.2 15.7 26.8 13.7 27.2% 26.5% 24.8% 27.2% 21.0% 27.2% Estimated 2003 Duty ($mln) 53.0 122.0 226.0 42.0 144.0 76.0

Company Riverside Slocan Canfor Interfor West Fraser Doman

Source: Company Data, RJ estimates & analysis

26

October 10, 2002

Lumber

Leverage to 10% Change in Lumber Price

$-

$100

$120

$140

$160

Source: RJ Research estimates & analysis

R

$20

$40

$60

$80

Lumber Leverage Per $1000 Invested

27
October 10, 2002

iv er si de Sl oc Lo an ui C si an an na for Pa ci f Te ic Po m pe be c & Ta W lb e o G st F t eo r rg ase ia r Pa Ab ci fic iti bi N -C on exf so or lid at e D d om ta W Bow r at In eye er te rn rha eu at io na ser lP ap e R ay r on ie r

Market pulp
Shipment to Inventory Ratio (S/I, -3 mos ave) vs. NBSK list price
1,100 1,000 1.50 900

forecast
S/I ratio
700 1.00 600 500 400 300 0.50 95 96 97 98 99 S/I Ratio 00 01 02 03 200

Price $US

Source: PPPC, Pulp and Paper Week; RJ Research, estimates and analysis

28

October 10, 2002

Pulp Price $US

800

Leverage to 10% Change in Pulp Price

$10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 $80.00 $-

Market pulp

Source: RJ Research estinates & analysis

Pulp Leverage Per $1000 Invested

Po

pe

29
October 10, 2002

Te m be c & Ta lb ot C an fo r Sl oc a Ar n ac ru z R G ay eo on rg ie i r N aP or ac sk i eC fic an ad a N ex fo Bo r w W es ate tF r ra se r D Sm om ta ur r f W it-S In eye ton e te rh rn ae at us Ab i er iti ona bi lP -C on ap so er lid at ed

Newsprint
Forecast Total Newsprint Consumption $18,000 $16,000 $14,000 $12,000 $10,000 $8,000 $6,000 2,400 $4,000 $2,000 1994 2,200 2,000 2005 Regression Equation: (US Newsprint Consumption)=(US Total Newsprint Ad. Expense) + (US Real GDP) R=0.92 4,000 3,800
Forecast

3,600 3,400 3,200 3,000 2,800 2,600

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

Total Advertising Expense

Real US GDP ($B)

Total Newsprint Consumption (right axis)

30

October 10, 2002

Newsprint
N.A. 3 Month Yr./Yr. Newsprint Mill Inventory Change vs. Price

600 500
forecast

800 750
Price ($US-Del Eeast NA)
October 10, 2002

400
000s of Tonnes

700 650 600 550 500 450 400

95 96 97 98 99 00 01 02 03 Price Yr./Yr. Inventory Change (3 mos. MA)

300 200 100 0 -100 -200 -300

Source: Pulp and Paper Products Council, RJ Research estimates and analysis

31

Newsprint
Newsprint/Groundwood Leverage Per $1000 Invested
Leverage to 10% Change in News/Gwd Price

$70 $60 $50 $40 $30 $20 $10 $0

N ex fo r an ad a ur fit -S to ne W ey er ha eu In se te r rn at io na lP ap er
October 10, 2002

Bo w at er

bi -C on s

be c

Te m

N or sk eC

W es tF

Ab iti

Source: RJ Research estimates & analysis

32

Sm

ra se r

Summary - Valuation
Price to Book Value: Current vs Historical Range
4.5 4.0 3.5 3.0

Newsprint Pulp/Lumber Lumber/Panel Integrated Trust

P/BV

2.5 2.0 1.5 1.0 0.5 0.0

Abitibi-Con*

Pope & Talbot

NorskeCanada

Ainsworth

Tembec

Slocan

Interfor

Riverside

West Fraser

TimberWest

Cycle High Current Cycle Low

October 10, 2002

33

Universe Average

Domtar

Canfor

Nexfor

PRT

Summary - Valuation
EV/EBITDA: 2003E vs Historical (LTM) Range
30

Newsprint
25

Integrated
EV/EBITDA
20 15 10 5 0

Pulp/Lumber Lumber/Panel

Trust

Ainsworth

Interfor

Riverside

Nexfor

Abitibi-Con

NorskeCanada

Pope & Talbot

West Fraser

TimberWest

Cycle High 03E Cycle Low

October 10, 2002

34

Universe Average

Canfor

Slocan

Domtar

Tembec

PRT

Canadian P&FP Share Price Performance

YTD Return Dec. 31, 2001 - Oct. 4, 2002
DOM.B S&P P&F S&P 500 ANS TSX Comp NS POP CFP WFT SFF

LTM Return Oct. 5, 2001 - Oct. 4, 2002

ANS S&P 500 SFF S&P P&F DOM.B TSX Comp CFP POP NS

A IFP.A DTC TSX P&F PRT.UN RFP TWF.UN TBC

NF

CAS*

IFP.A WFT PRT.UN A TSX P&F TWF.UN RFP NF DTC TBC

CAS*

-80% -60% -40% -20%

0%

20%

40%

60%

80%

-50%

-25%

0%

25%

50%

75%

100% 125%

35

October 10, 2002

Canadian P&FP Share Price Performance

Share Prices: 52-Week Low to Target vs Current
$20

$60 $50

$15

$40 $30 $20

$10

$5

$10 $NorskeCanada

Note * POP-N expressed in US$

36

Target Current 52 Week Low

October 10, 2002

West Fraser

$-

Ainsworth

Interfor

Abitibi-Con

Riverside

Canfor

Pope & Talbot*

Slocan

Nexfor

Tembec

Domtar

TimberWest

PRT

B.C. Industry EPS Forecast

EPS 02E (0.46) P/TBV 03E 0.55 0.8 Net Int. Debt Cover. 41% 1.5 1.3 4.3 0.1 3.1 17.1 5.8 1.5 9.8 6.2 13.5 6.4

Company

Symbol

01A

Newsprint NorskeCanada NS-T 0.37 Pulp/Lumber Pope & Talbot (US$) POP-N (1.64) Canfor CFP-T (0.01) Doman DOM.B-T (3.38) Lumber/Panel Slocan SFF-T (0.36) Interfor IFP.A-T (0.15) Riverside RFP-T 0.48 Ainsworth ANS-T (1.55) Integrateds West Fraser WFT-T 2.85 Income Trust TimberWest TWF.UN-T 1.29 PRT PRT.UN-T 1.01 Average3,4,5

(1.20) 0.65 0.57 0.52 (1.74) (2.89) 0.30 0.40 0.78 (0.26) 3.07 1.22 0.98 0.18 0.30 0.06 0.75 3.48 1.30 1.06

0.9 57% 0.7 39% (0.0) 138% 1.1 0.5 0.5 0.4 0.8 0.9 1.1 0.7 52% 14% 20% 81% 18% 21% 2% 29%

37

October 10, 2002

38

October 10, 2002

B.C. Industry government committed to forest policy change policy change remains tied to trade file expect policy change will occur on B.C. coast at accelerated pace Fall 2002 labour environment appears to be improving

consolidation likely as visibility on U.S. market access improves

39

October 10, 2002