The Future of Forestry

Jefferies 2014 Global Industrials ConferenceAugust 11, 2014

2Strictly Confidential

Disclaimer

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cause actual results to differ materially from those projected, including, but not limited to, risks and uncertainties relating

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Results of Operations” and the consolidated financial statements and the related notes thereto included in the

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The Future of Forestry

Overview Summary

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Extensive, fully integrated operations

Deep forestry seedling product portfolio

Comprehensive product development capabilities and proprietary technology

Strong brand recognition and distribution channels

Sophisticated sales and marketing programs

Experienced management team with strong track record

Business Highlights

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Founded in 2000 through the consolidation of the

forestry R&D programs at Fletcher Challenge (now

Rubicon Limited), International Paper and Westvaco

Corporation (now MeadWestvaco)

Owns more than 7,200 acres and leases an

additional 400+ acres with over 200 employees

worldwide

Current products:

– Comprehensive radiata and loblolly pine

portfolios

– Hardwood seedlings

– Tropical eucalyptus seedlings for Brazil

– Tempered hardwood seedlings for the U.S.

– Eucalyptus biotechnology products under

development

Base of over 5,000 customers

Headquartered in Ridgeville, SC with operations in

Brazil and New Zealand

Generated $30 million in revenue and sold over 265

million seedlings in FY 2013

Company Highlights Founding Partners

Primary End Markets

Pulp & Paper Products Wood Products

Bioenergy Charcoal

ArborGen: Building a Global, High Growth Business by Bringing Proprietary Seedlings

that Offer “Step Changes” in Productivity to the Forestry Industry

ArborGen Snapshot

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2007: MWV, Rubicon and IP contributed substantially all their commercial nurseries and orchards,

along with associated R&D programs

2012: Acquired the only global clonal pine competitor CellFor

Currently has over 100 years in aggregate of tree improvement research from industry leaders

Catalogued over 13,500 unique varieties for two largest commercial pine species

Licensed rights to produce and sell International Paper-eucalyptus germplasm in Brazil

Developed most broadly application-efficient eucalyptus transformation platform capability

ArborGen has Become a Global Leader in Forestry Genetics

Given the inherent time associated with tree improvement research and development,

ArborGen is decades ahead of any potential new market entrant

The Evolution of ArborGen

Federal Paper Board Co.

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• ArborGen operates in three of the most attractive forestry markets in the world

• U.S., Brazil and ANZ (Australia & New Zealand combined) are ranked in the top six

countries in the world for roundwood production

Established Position in Key Markets

Source: 2012 production of industrial roundwood and most recent pricing available.

$995

$2,630 $3,169

$627

$2,675

$2,630 $1,435

$1,739

U.S. South China Brazil ANZ

Hardwoods Pine

Roundwood Production Value ($mm) Area of Planted Forests Worldwide (mm HA)

3

4

6

12

14

15

20

25

31

0 10 20 30 40

Eastern…

Oceania

Western…

Africa

Russia

Latin America

Rest of Asia

USA

China

ArborGen’s

current

operations

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Germplasm

Repository

Includes 50

commercial tree

species and

hybrids

Provides genetic

material to

produce a wide

variety of

improved trees

Includes over

13,500 unique

varieties of

loblolly and

radiata alone

Tree

Improvement

Expertise

Expertise is built

on over 100

collective years of

tree improvement

research

Most

comprehensive

and extensive field

trial program in

forestry

Proprietary

Production

Process

Includes

proprietary

methods of

producing high-

quality products

on a large scale

Years of

experience allow

ArborGen to

maximize

production and

minimize

extraneous costs

Genomics

Focuses on the

application of

genetics and

molecular biology

to transform crop

and animal

production

ArborGen applies

genomics to trees,

accelerating the

production of

improved

variations on

existing MCP®

families

Biotechnology

Product

Development

Capabilities

Currently focused

on eucalyptus

Focused on

developing

eucalyptus

products with

improved growth

rates and yields,

herbicide and

insect resistance,

stress resistance

and improved

pulping efficiency

Leading Technology Platform

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Increasing

Population

The world’s

population rose

12.7% between

2002 and 2012,

placing increasing

pressure on wood

products for

housing and other

necessities

Expansion of

Development

A rapid expansion

in development in

both modern and

developing

countries has led to

a surge in demand

for wood and paper

products

Expansion of

Conservation

Land

Over the past

decade, a

significant

percentage of the

remaining global

forests have been

set aside as

protected forests

Conversion to

Agricultural

Uses

A significant

amount of forestry

land has been

cleared to make

way for farming

Key Supply and Demand Dynamics

ArborGen is poised to take advantage of a significant market opportunity

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“Ag-Forestry” Productivity Parallel

The productivity-improvement opportunity in Forestry is significant,

but it will require the use of advanced technologies

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Market leader in U.S. and ANZ

Driving the markets to next-generation

seedlings

Housing recovery drives U.S. market size

New Products

Through

Technology

Pine somatic embryogenesis (varietals)

Genomics: Pine (ongoing) and eucalyptus (future)

Improved eucalyptus silviculture traits through biotechnology (herbicide

tolerance, insect resistance, drought tolerance)

Improved eucalyptus pulping economics through biotechnology

U.S. bioenergy

U.S. pulp and paper hardwoods

Brazil eucalyptus business launched

Brazil pine business launch in 2014

China a longer term opportunity

Geographic

Expansion

New End Uses

Transform

Established Core (U.S. and ANZ)

Multiple Opportunities to Drive Value

The Future of Forestry

Base Business Overview

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ArborGen’s U.S. Base Business is centered in the Southeastern U.S.

Key focus on loblolly pine and other pine species

Over 40 years of operations as the nation’s leading seedling supplier

− #1 market position

− Established distribution channels

− Well-known, annually-repeating customers

− Sales to 17 of the top 20 Southeastern U.S. forest landowners

− Core customer base includes Timber Investment Management Organizations

(TIMOs), corporate and private landowners

Deep pipeline of next-generation (non-transgenic) advanced products

Minimal technology and no regulatory risks

ArborGen is the only company in the U.S. market exclusively focused on

developing and providing superior genetics to the U.S. forestry industry

Base Business Overview

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SuperTree Nursery

ArborGen Headquarters

Distribution Point

Sales Office

Orchards

North American Operations

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Higher Genetics = Higher Margins

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Value of

ArborGen’s

higher-value

pine

genetics

Note: Data assumes last 5-yr average prices, silvilcutural regime and site dependent, bare-root products

$500

$700

$900

$1,100

$1,300

$1,500

$1,700

Base OP OP-A Op-S Op-E MCP-A MCP-S MCP-E Varietal-I

Bare Land Value (BLV) per Acre

Customer Breakeven $/Seedling $0.17 $0.26 $0.39 $0.69 $0.96 $1.18 $1.74

Average Selling Price $0.05 $0.06 $0.07 $0.12 $0.13 $0.18 $0.35

ArborGen has a range of higher value genetic products for introduction today

Each is set at a different price point, reflecting the value each creates for the customer

Pine Genetics Lead to EnhancedForest Value

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Source: NC State University Industry Tree Improvement Program; Dr. Steve McKeand

0

10

20

30

40

50

60

70

80

'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14

Annual P

roduction

(mill

ions)

’01 – ‘14

CAGR

26%

80 million

U.S. Industry Controlled Pollination Growth

Growing Adoption of AdvancedGenetics in the U.S. Market

The Future of Forestry

Growth Beyond The Base: New Geographies

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Brazil is the world’s largest hardwood pulp producer

− Productive capacity expected to grow significantly

as new projects are competed

− Annual eucalyptus plantings of approximately 800

million to 1 billion per year

Market is under-served as non-integrated growers have

no access to improved genetics

ArborGen’s products offer significant value to the

market

Entered the eucalyptus market in 2013

Entering pine market in 2014

Eucalyptus plantation near Caravelas, Brazil

0%

20%

40%

60%

80%

0.3

0

0.3

4

0.3

8

0.4

2

0.4

6

0.5

0

0.5

4

0.5

8

0.6

2

0.6

6

0.7

0

Clone 2

Clone 3Ma

rgin

al IR

R

R$/Seedling

Brazil Overview

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Revolutionizing the Productivity of the Commercial Forestry Industry

Transition customers to higher-value products

Continued development of product portfolio

Expand into new high-growth geographies

Grow via expansion into emerging complementary end-markets

Leverage technology and business model to drive profits

Pursue strategic collaborations and acquisitions

Established ArborGen presence

Emerging ArborGen presence

Growth Strategy

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Extensive, fully integrated operations

Deep forestry seedling product portfolio

Comprehensive product development capabilities and proprietary technology

Strong brand recognition and distribution channels

Sophisticated sales and marketing programs

Experienced management team with strong track record

Business Highlights