Exhibit 99.01



Premier Boxboard

Limited LLC

Financial Statements as of December 31,

2006 and 2005, and
for the Three Years

Ended December 31, 2006, and

Report of Independent Registered Public

Accounting Firm



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PREMIER BOXBOARD LIMITED LLC

TABLE OF CONTENTS



|                                                                                                                  |  |     
|----------------------------------------------------------------------------------------------------------------- |  | ----
|                                                                                                                  |  | Page
|REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                                                           |  | 1   
|                                                                                                                  | 
|FINANCIAL STATEMENTS AS OF DECEMBER 31, 2006 AND 2005, AND FOR THE YEARS ENDED DECEMBER 31, 2006, 2005, AND 2004: |  |     
|                                                                                                                  | 
|Balance Sheets                                                                                                    |  | 2   
|                                                                                                                  | 
|Statements of Operations                                                                                          |  | 3   
|                                                                                                                  | 
|Statements of Members Equity                                                                                     |  | 4   
|                                                                                                                  | 
|Statements of Cash Flows                                                                                          |  | 5   
|                                                                                                                  | 
|Notes to Financial Statements                                                                                     |  | 613



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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Members of

Premier Boxboard Limited LLC:

We have audited the accompanying balance sheets of Premier Boxboard Limited LLC (the Company) as of December 31, 2006 and 2005, and the related
statements of operations, members equity, and cash flows for each of the three years in the period ended December 31, 2006. These financial statements are the responsibility of the Companys management. Our responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor
were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances
but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material respects, the financial position of the
Company as of December 31, 2006 and 2005, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2006, in conformity with accounting principles generally accepted in the United
States of America.

As discussed in Note 4 to the financial statements, the Company adopted the recognition and related disclosure provisions of
Statement of Financial Accounting Standards No. 158, Employers Accounting for Defined Benefit Pension and Other Postretirement Plansan amendment of FASB Statements No. 87, 88, 106 and 132(R)on December 31, 2006.

/s/    Deloitte & Touche LLP

Atlanta, Georgia

March 15, 2007



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PREMIER BOXBOARD LIMITED LLC



BALANCE SHEETS

AS OF DECEMBER 31, 2006 AND 2005



|                                                                                                   |  |      |             |   |      |   |             |  
|-------------------------------------------------------------------------------------------------- |  | ---- | ----------- | - | ---- | - | ----------- | -
|                                                                                                   |  | 2006 |             |   | 2005 |  
|ASSETS                                                                                             |  |      |             |   |      |   |             |  
|                                                                                                   |  |     
|CURRENT ASSETS:                                                                                    |  |      |             |   |      |   |             |  
|Cash and cash equivalents                                                                          |  | $    | 7,732,215   |   |      | $ | 2,452,745   |  
|Accounts receivable, net of allowance for doubtful accounts of $129,961 and $173,826, respectively |  |      | 1,851,182   |   |      |   | 4,608,704   |  
|Related-party receivables                                                                          |  |      | 986,458     |   |      |   | 3,880,111   |  
|Inventories                                                                                        |  |      | 4,683,537   |   |      |   | 4,619,968   |  
|                                                                                                   |  |      |             |   |      |   |             |  
|Total current assets                                                                               |  |      | 15,253,392  |   |      |   | 15,561,528  |  
|                                                                                                   |  |      |             |   |      |   |             |  
|PROPERTY, PLANT, AND EQUIPMENTAt cost:                                                            |  |      |             |   |      |   |             |  
|Land                                                                                               |  |      | 2,257,924   |   |      |   | 2,257,924   |  
|Buildings and improvements                                                                         |  |      | 30,469,089  |   |      |   | 30,456,607  |  
|Machinery and equipment                                                                            |  |      | 162,714,176 |   |      |   | 160,660,909 |  
|Furniture and fixtures                                                                             |  |      | 463,606     |   |      |   | 549,136     |  
|Construction in progress                                                                           |  |      | 839,289     |   |      |   | 1,557,906   |  
|                                                                                                   |  |      |             |   |      |   |             |  
|                                                                                                   |  |      | 196,744,084 |   |      |   | 195,482,482 |  
|Less accumulated depreciation                                                                      |  |      | (69,566,709 | ) |      |   | (61,780,013 | )
|                                                                                                   |  |      |             |   |      |   |             |  
|Property, plant, and equipmentnet                                                                 |  |      | 127,177,375 |   |      |   | 133,702,469 |  
|OTHER ASSETS                                                                                       |  |      | 1,383,558   |   |      |   | 1,795,226   |  
|                                                                                                   |  |      |             |   |      |   |             |  
|TOTAL                                                                                              |  | $    | 143,814,325 |   |      | $ | 151,059,223 |  
|                                                                                                   |  |      |             |   |      |   |             |  
|                                                                                                   |  |     
|LIABILITIES AND MEMBERS EQUITY                                                                    |  |      |             |   |      |   |             |  
|                                                                                                   |  |     
|CURRENT LIABILITIES:                                                                               |  |      |             |   |      |   |             |  
|Accounts payable                                                                                   |  | $    | 1,984,112   |   |      | $ | 2,222,992   |  
|Related-party payables                                                                             |  |      | 4,856,899   |   |      |   | 4,593,152   |  
|Accrued expenses                                                                                   |  |      | 3,710,761   |   |      |   | 5,790,795   |  
|                                                                                                   |  |      |             |   |      |   |             |  
|Total current liabilities                                                                          |  |      | 10,551,772  |   |      |   | 12,606,939  |  
|                                                                                                   |  |     
|LONG-TERM DEBT                                                                                     |  |      | 50,000,000  |   |      |   | 50,000,000  |  
|OTHER LONG-TERM LIABILITIES                                                                        |  |      | 604,733     |   |      |   | 693,032     |  
|                                                                                                   |  |     
|COMMITMENTS AND CONTINGENCIES                                                                      |  |      |             |   |      |   |             |  
|                                                                                                   |  |     
|MEMBERS EQUITY                                                                                    |  |      | 82,657,820  |   |      |   | 87,759,252  |  
|                                                                                                   |  |      |             |   |      |   |             |  
|TOTAL                                                                                              |  | $    | 143,814,325 |   |      | $ | 151,059,223 |  
|                                                                                                   |  |      |             |   |      |   |             |  

See notes to financial statements.



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PREMIER BOXBOARD LIMITED LLC



STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 2006, 2005, AND 2004



|                                     |  |      |             |      |   |             |  |   |            
|------------------------------------ |  | ---- | ----------- | ---- | - | ----------- |  | - | -----------
|                                     |  | 2006 |             | 2005 |   | 2004       
|SALES                                |  | $    | 118,494,987 |      | $ | 122,062,760 |  | $ | 109,370,530
|COST OF SALES                        |  |      | 85,934,548  |      |   | 85,626,473  |  |   | 81,363,811 
|                                     |  |      |             |      |   |             |  |   |            
|GROSS PROFIT                         |  |      | 32,560,439  |      |   | 36,436,287  |  |   | 28,006,719 
|FREIGHT AND DISTRIBUTION COSTS       |  |      | 6,047,537   |      |   | 4,225,312   |  |   | 5,454,922  
|SELLING, GENERAL, AND ADMINISTRATIVE |  |      | 11,477,490  |      |   | 11,301,905  |  |   | 9,602,547  
|                                     |  |      |             |      |   |             |  |   |            
|INCOME FROM OPERATIONS               |  |      | 15,035,412  |      |   | 20,909,070  |  |   | 12,949,250 
|INTEREST EXPENSE                     |  |      | 4,220,000   |      |   | 4,219,365   |  |   | 4,328,352  
|OTHER INCOMENet                     |  |      | 233,968     |      |   | 183,791     |  |   | 33,348     
|                                     |  |      |             |      |   |             |  |   |            
|NET INCOME                           |  | $    | 11,049,380  |      | $ | 16,873,496  |  | $ | 8,654,246  
|                                     |  |      |             |      |   |             |  |   |            

See notes to financial statements.



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PREMIER BOXBOARD LIMITED LLC



STATEMENTS OF MEMBERS EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2006, 2005, AND 2004



|                                          |  |                           |             |   |                                     |   |             |       |  |   |             |  
|----------------------------------------- |  | ------------------------- | ----------- | - | ----------------------------------- | - | ----------- | ----- |  | - | ----------- | -
|                                          |  | CaraustarIndustries, Inc. |             |   | InlandPaperboardand Packaging, Inc. |   |             | Total | 
|MEMBERS EQUITYDecember 31, 2003         |  | $                         | 45,164,341  |   |                                     | $ | 45,164,341  |       |  | $ | 90,328,682  |  
|Net income                                |  |                           | 4,327,123   |   |                                     |   | 4,327,123   |       |  |   | 8,654,246   |  
|Minimum pension liability adjustment      |  |                           | (48,669     | ) |                                     |   | (48,669     | )     |  |   | (97,338     | )
|                                          |  |                           |             |   |                                     |   |             |       |  |   |             |  
|Comprehensive income                      |  |                           |             |   |                                     |   |             |       |  |   | 8,556,908   |  
|                                          |  |                           |             |   |                                     |   |             |       |  |   |             |  
|Contributions from members                |  |                           | 10,000      |   |                                     |   | 10,000      |       |  |   | 20,000      |  
|Distributions                             |  |                           | (1,000,000  | ) |                                     |   | (1,000,000  | )     |  |   | (2,000,000  | )
|                                          |  |                           |             |   |                                     |   |             |       |  |   |             |  
|MEMBERS EQUITYDecember 31, 2004         |  |                           | 48,452,795  |   |                                     |   | 48,452,795  |       |  |   | 96,905,590  |  
|Net income                                |  |                           | 8,436,748   |   |                                     |   | 8,436,748   |       |  |   | 16,873,496  |  
|Minimum pension liability adjustment      |  |                           | (9,917      | ) |                                     |   | (9,917      | )     |  |   | (19,834     | )
|                                          |  |                           |             |   |                                     |   |             |       |  |   |             |  
|Comprehensive income                      |  |                           |             |   |                                     |   |             |       |  |   | 16,853,662  |  
|Distributions                             |  |                           | (13,000,000 | ) |                                     |   | (13,000,000 | )     |  |   | (26,000,000 | )
|                                          |  |                           |             |   |                                     |   |             |       |  |   |             |  
|MEMBERS EQUITYDecember 31, 2005         |  |                           | 43,879,626  |   |                                     |   | 43,879,626  |       |  |   | 87,759,252  |  
|Net income                                |  |                           | 5,524,690   |   |                                     |   | 5,524,690   |       |  |   | 11,049,380  |  
|Minimum pension liability adjustment      |  |                           | 74,572      |   |                                     |   | 74,572      |       |  |   | 149,144     |  
|                                          |  |                           |             |   |                                     |   |             |       |  |   |             |  
|Comprehensive income                      |  |                           |             |   |                                     |   |             |       |  |   | 11,198,524  |  
|Adjustment to adopt SFAS No. 158 (Note 4) |  |                           | (149,978    | ) |                                     |   | (149,978    | )     |  |   | (299,956    | )
|                                          |  |                           |             |   |                                     |   |             |       |  |   |             |  
|Distributions                             |  |                           | (8,000,000  | ) |                                     |   | (8,000,000  | )     |  |   | (16,000,000 | )
|                                          |  |                           |             |   |                                     |   |             |       |  |   |             |  
|MEMBERS EQUITYDecember 31, 2006         |  | $                         | 41,328,910  |   |                                     | $ | 41,328,910  |       |  | $ | 82,657,820  |  
|                                          |  |                           |             |   |                                     |   |             |       |  |   |             |  



|Note: | The balance of accumulated other comprehensive loss at December 31, 2006 and 2005, was $384,891 and $234,079, respectively, and consist solely of unrecognized pension costs.
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

See notes to financial statements.



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PREMIER BOXBOARD LIMITED LLC



STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2006, 2005, AND 2004



|                                                                                  |  |      |             |   |      |   |             |      |  |   |             |  
|--------------------------------------------------------------------------------- |  | ---- | ----------- | - | ---- | - | ----------- | ---- |  | - | ----------- | -
|                                                                                  |  | 2006 |             |   | 2005 |   |             | 2004 | 
|CASH FLOWS FROM OPERATING ACTIVITIES:                                             |  |      |             |   |      |   |             |      |  |   |             |  
|Net income                                                                        |  | $    | 11,049,380  |   |      | $ | 16,873,496  |      |  | $ | 8,654,246   |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |      |             |   |      |   |             |      |  |   |             |  
|(Recovery)provision for allowances and discounts                                  |  |      | (43,865     | ) |      |   | 88,551      |      |  |   | (19,028     | )
|Depreciation, accretion and amortization                                          |  |      | 8,161,089   |   |      |   | 8,195,071   |      |  |   | 8,300,511   |  
|Losses on disposal of property, plant and equipmentnet                           |  |      | 76,730      |   |      |   |             |      |  |   |             |  
|Changes in operating assets and liabilities:                                      |  |      |             |   |      |   |             |      |  |   |             |  
|Accounts receivable                                                               |  |      | 2,801,387   |   |      |   | 339,585     |      |  |   | (3,387,920  | )
|Related-party receivables                                                         |  |      | 2,893,653   |   |      |   | 1,978,262   |      |  |   | 1,037,028   |  
|Inventories                                                                       |  |      | (63,569     | ) |      |   | 1,482,849   |      |  |   | (1,848,447  | )
|Other assets                                                                      |  |      | 193,912     |   |      |   | (117,432    | )    |  |   | 16,507      |  
|Accounts payable                                                                  |  |      | (238,880    | ) |      |   | (5,352,539  | )    |  |   | 780,427     |  
|Related-party payables                                                            |  |      | 263,747     |   |      |   | 2,360,128   |      |  |   | 815,634     |  
|Accrued expenses                                                                  |  |      | (2,663,564  | ) |      |   | 1,689,202   |      |  |   | 357,078     |  
|Other long-term liabilities                                                       |  |      | (216,053    | ) |      |   | (4,807      | )    |  |   | (23,936     | )
|                                                                                  |  |      |             |   |      |   |             |      |  |   |             |  
|Net cash provided by operating activities                                         |  |      | 22,213,967  |   |      |   | 27,532,366  |      |  |   | 14,682,100  |  
|                                                                                  |  |      |             |   |      |   |             |      |  |   |             |  
|                                                                                  |  |      |            
|CASH FLOWS FROM INVESTING ACTIVITIES:                                             |  |      |             |   |      |   |             |      |  |   |             |  
|Change in restricted cash                                                         |  |      |             |   |      |   | (621,402    | )    |  |   |             |  
|Purchases of property, plant, and equipment                                       |  |      | (934,497    | ) |      |   | (2,305,348  | )    |  |   | (4,095,880  | )
|                                                                                  |  |      |             |   |      |   |             |      |  |   |             |  
|Net cash used in investing activities                                             |  |      | (934,497    | ) |      |   | (2,926,750  | )    |  |   | (4,095,880  | )
|                                                                                  |  |      |             |   |      |   |             |      |  |   |             |  
|                                                                                  |  |      |            
|CASH FLOWS FROM FINANCING ACTIVITIES:                                             |  |      |             |   |      |   |             |      |  |   |             |  
|Capital contributions from members                                                |  |      |             |   |      |   |             |      |  |   | 20,000      |  
|Distributions                                                                     |  |      | (16,000,000 | ) |      |   | (26,000,000 | )    |  |   | (2,000,000  | )
|Repayments of borrowings under line of credit                                     |  |      |             |   |      |   |             |      |  |   | (10,000,000 | )
|                                                                                  |  |      |             |   |      |   |             |      |  |   |             |  
|Net cash used in financing activities                                             |  |      | (16,000,000 | ) |      |   | (26,000,000 | )    |  |   | (11,980,000 | )
|                                                                                  |  |      |             |   |      |   |             |      |  |   |             |  
|NET CHANGE IN CASH AND CASH EQUIVALENTS                                           |  |      | 5,279,470   |   |      |   | (1,394,384  | )    |  |   | (1,393,780  | )
|CASH AND CASH EQUIVALENTSBeginning of year                                       |  |      | 2,452,745   |   |      |   | 3,847,129   |      |  |   | 5,240,909   |  
|                                                                                  |  |      |             |   |      |   |             |      |  |   |             |  
|CASH AND CASH EQUIVALENTSEnd of year                                             |  | $    | 7,732,215   |   |      | $ | 2,452,745   |      |  | $ | 3,847,129   |  
|                                                                                  |  |      |             |   |      |   |             |      |  |   |             |  
|                                                                                  |  |      |            
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:                                 |  |      |             |   |      |   |             |      |  |   |             |  
|Cash paid for interest                                                            |  | $    | 4,220,000   |   |      | $ | 4,219,365   |      |  | $ | 4,219,365   |  
|                                                                                  |  |      |             |   |      |   |             |      |  |   |             |  
|Purchases of property, plant, and equipment on account                            |  | $    | 560,472     |   |      | $ | 234,267     |      |  | $ |            |  
|                                                                                  |  |      |             |   |      |   |             |      |  |   |             |  

See notes to financial statements.



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PREMIER BOXBOARD LIMITED LLC



NOTES TO FINANCIAL STATEMENTS

AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2006, 2005, AND 2004



|1. | BUSINESS DESCRIPTION AND FORMATION
|-- | ----------------------------------

Premier
Boxboard Limited LLC (Premier or the Company) was formed during 1999 by Caraustar Industries, Inc. (Caraustar) and Inland Paperboard and Packaging, Inc. (IPP) a wholly owned subsidiary of Temple
Inland Corporation (Temple-Inland). The Company is operated as a joint venture of Caraustar with a 50% ownership and, until December 2004, of IPP with a 50% ownership interest. In December 2004, 0.01% of interest in Premier was issued to
Temple Inland Premier Holding Company which reduced IPPs ownership to 49.99%. On December 31, 2004, IPP was merged into Temple-Inland Forest Products Corporation (Temple FPC) and then Temple FPC and Gaylord Container
Corporation were merged under the name of TIN Inc. (TIN). In connection with these mergers, an Assignment of Limited Liability Company Interest was entered into by IPP, as assignor, TIN, as assignee, and Premier, under which the 49.99%
membership interest of IPP in Premier was assigned to and assumed by TIN. The result was Temple-Inland now has a 50% ownership in Premier through two subsidiaries. The Companys operations are managed by Caraustar. Under the joint venture
agreement, Caraustar contributed $50,000,000 to the joint venture and IPP contributed the physical and intangible assets of a paper mill located in Indiana with a fair value of $100,000,000, subject to a $50,000,000 loan assumed by Premier.
Additionally, each member contributed certain inventory and operating assets aggregating approximately $1,200,000. Each members contribution was made on June 27, 2000 (the Initial Contribution), at which time Premier
began operations.

Premier manufactures and distributes containerboard and lightweight gypsum facing paper.



|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|-- | ------------------------------------------

Cash and Cash EquivalentsAll investments purchased with an original maturity of three months or less are considered to be cash equivalents.

Restricted CashThe Company had $621,401 in restricted cash set aside for the purpose of settling an asset retirement obligation at December 31, 2006 and 2005 (see Note 6). The restricted cash
is included in other assets at December 31, 2006 and 2005.

InventoriesInventories are stated at the lower of cost
or market on an average cost basis. Cost includes materials, labor, and overhead.

Inventories consisted of the following at
December 31, 2006 and 2005:



|               |  |      |           |      |   |          
|-------------- |  | ---- | --------- | ---- | - | ---------
|               |  | 2006 |           | 2005
|Raw materials  |  | $    | 2,342,799 |      | $ | 2,300,704
|Finished goods |  |      | 2,340,738 |      |   | 2,319,264
|               |  |      |           |      |   |          
|               |  | $    | 4,683,537 |      | $ | 4,619,968
|               |  |      |           |      |   |          



- 6 -



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Property, Plant, and EquipmentProperty, plant, and equipment, which were contributed
at the Initial Contribution, are stated at the estimated fair value based on the provisions of Emerging Issues Task Force (EITF) 98-4, Accounting by a Joint Venture for Business Received at Its Formation. Additions of property,
plant and equipment subsequent to the Initial Contribution are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Depreciation expense was $7,943,333, $7,977,312, and $8,059,067
for the years ended December 31, 2006, 2005, and 2004, respectively. Expenditures for maintenance and repairs are expensed as incurred, while major additions and improvements are capitalized.

The estimated lives used in determining depreciation are as follows:



|                           |  |           
|-------------------------- |  | ----------
|Buildings and improvements |  | 40 years  
|Machinery and equipment    |  | 320 years
|Furniture and fixtures     |  | 5 years   

Other AssetsIn connection with the formation of Premier, intangible assets of
$2,000,000 were recorded and are being amortized over 10 years. Amortization expense totaled $217,759 for the years ended December 31, 2006, 2005, and 2004. Accumulated amortization totaled $1,237,844, $1,020,086, and $802,327 at
December 31, 2006, 2005, and 2004, respectively. Expected amortization expense through 2009 is $217,759 and then $108,879 for 2010.

Income TaxesThe earnings and losses of Premier are included in the respective tax returns of the members, and accordingly, no provision for income taxes is included in the accompanying financial statements.

Members EquityUnder the terms of the membership agreement, income and distributions of the Company are allocated to the
members based on their respective ownership interests.

Use of EstimatesThe preparation of financial statements in
conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements. Estimates also affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Revenue RecognitionRevenues are recognized upon passage of title which occurs at the time the product is delivered to the customer,
the price is fixed and determinable and collectibility is reasonably assured.

Amounts billed to customers for shipping and handling are
included in sales and the related costs thereof are included in freight and distribution costs.

Long-Lived AssetsThe
Company reviews its long-lived assets for impairment wherever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. An impairment loss is recognized when the undiscounted future cash flows estimated to
be generated by the asset are not sufficient to recover the unamortized balances of the asset.



|3. | NEW ACCOUNTING PRONOUNCEMENTS
|-- | -----------------------------

In September 2006,
the FASB issued Statement of Financial Accounting Standards (SFAS) No. 157, Fair Value Measurements, to define fair value, establish a framework for measuring fair value in accordance with generally accepted accounting
principles, and expand disclosures about fair value



- 7 -



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measurements. This statement does not require any new fair value measurements; rather, it applies under other accounting pronouncements that require or
permit fair value measurements. The provisions of the statement are to be applied prospectively as of the beginning of the fiscal year in which this statement is initially applied, with any transition adjustment recognized as a cumulative-effect
adjustment to the opening balance of retained earnings. The provisions of SFAS No.157 are effective for the years beginning after November 15, 2007; therefore, we anticipate adopting this standard as of January 1, 2008. The Company has not
determined the effect, if any; the adoption of this statement will have on our financial position or results of operations.

In September
2006, the FASB issued SFAS No. 158, Employers Accounting for Defined Benefit Pension and Postretirement Plans, (SFAS No. 158), which requires employers to recognize a net liability or asset and an offsetting
adjustment to other comprehensive income to report the funded status of defined benefit pension and other post-retirement benefit plans. SFAS No. 158 requires an employer to initially apply the requirement to recognize the funded status of a
benefit plan as of the end of the employers fiscal year ending after June 15, 2007. At December 31, 2006 the Company early adopted the provisions of SFAS No. 158 (see Note 4).

In February, 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial LiabilitiesIncluding an amendment
of FASB Statement No. 115 (SFAS 159). SFAS 159 permits entities to choose to measure many financial assets and financial liabilities at fair value. Unrealized gains and losses on items for which the fair value option has been
elected are reported in earnings. SFAS 159 is effective for fiscal years beginning after November 15, 2007. The Company has not determined the effect, if any, the adoption of this statement will have on our financial position or results of
operations.



|4. | PENSION AND PROFIT-SHARING PLANS
|-- | --------------------------------

Effective
December 31, 2006, the Company adopted the provisions of SFAS No. 158, which requires that the Companys Balance Sheet reflect funded status of defined benefit pension plan (the Pension Plan). The funded status is measured
as the difference between the plan assets at fair value and the projected benefit obligation. The impact of adopting SFAS No. 158 on individual line items in the balance sheet as of December 31, 2006 is shown below:



|                                      |  |                                         |             |             |   |          |                                        |  |   |            
|------------------------------------- |  | --------------------------------------- | ----------- | ----------- | - | -------- | -------------------------------------- |  | - | -----------
|Balance Sheet Caption                 |  | Balances BeforeAdoption ofStatement 158 |             | Adjustments |   |          | Balances AfterAdoption ofStatement 158
|Other assets (long term)              |  | $                                       | 1,560,371   |             | $ | (176,813 | )                                      |  | $ | 1,383,558  
|                                      |  |                                         |             |             |   |          |                                        |  |   |            
|Total Assets                          |  | $                                       | 143,991,138 |             | $ | (176,813 | )                                      |  | $ | 143,814,325
|                                      |  |                                         |             |             |   |          |                                        |  |   |            
|Other long-term liabilities           |  | $                                       | 481,590     |             | $ | 123,143  |                                        |  | $ | 604,733    
|Members Equity                       |  |                                         | 82,957,776  |             |   | (299,956 | )                                      |  |   | 82,657,820 
|                                      |  |                                         |             |             |   |          |                                        |  |   |            
|Total Liabilities and Members Equity |  | $                                       | 143,991,138 |             | $ | (176,813 | )                                      |  | $ | 143,814,325
|                                      |  |                                         |             |             |   |          |                                        |  |   |            



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Components of net periodic pension costs for the years ended December 31 included the following:



|                                   |  |      |          |   |      |   |         |      |  |   |         |  
|---------------------------------- |  | ---- | -------- | - | ---- | - | ------- | ---- |  | - | ------- | -
|                                   |  | 2006 |          |   | 2005 |   |         | 2004 | 
|Service cost                       |  | $    | 307,482  |   |      | $ | 295,368 |      |  | $ | 220,453 |  
|Interest cost                      |  |      | 95,066   |   |      |   | 76,837  |      |  |   | 53,306  |  
|Expected return on plan assets     |  |      | (111,806 | ) |      |   | (72,602 | )    |  |   | (47,530 | )
|Amortization of prior service cost |  |      | 17,099   |   |      |   | 17,099  |      |  |   | 8,337   |  
|Recognized actuarial loss          |  |      | 14,963   |   |      |   | 18,980  |      |  |   | 13,189  |  
|                                   |  |      |          |   |      |   |         |      |  |   |         |  
|Net periodic pension cost          |  | $    | 322,804  |   |      | $ | 335,682 |      |  | $ | 247,755 |  
|                                   |  |      |          |   |      |   |         |      |  |   |         |  

A reconciliation of the changes in the plans benefit obligations and fair value of assets
over the two-year period ending December 31, 2006, and a statement of the funded status at December 31 for these years for the Companys pension plan is as follows:



|                                            |  |   |           |   |  |   |           |  
|------------------------------------------- |  | - | --------- | - |  | - | --------- | -
|Change in benefit obligation:               |  |   |           |   |  |   |           |  
|Net benefit obligationbeginning of year    |  | $ | 1,686,910 |   |  | $ | 1,210,966 |  
|Service cost                                |  |   | 307,482   |   |  |   | 295,368   |  
|Interest cost                               |  |   | 95,066    |   |  |   | 76,837    |  
|Amendments                                  |  |   |           |   |  |   | 117,147   |  
|Actuarial (gain )loss                       |  |   | (141,470  | ) |  |   | 22,573    |  
|Benefits paid                               |  |   | (16,091   | ) |  |   | (35,981   | )
|                                            |  |   |           |   |  |   |           |  
|Net benefit obligationend of year          |  | $ | 1,931,897 |   |  | $ | 1,686,910 |  
|                                            |  |   |           |   |  |   |           |  
|                                            |  |  
|Change in plan assets:                      |  |   |           |   |  |   |           |  
|Fair value of plan assetsbeginning of year |  | $ | 1,144,051 |   |  | $ | 677,029   |  
|Actual return on plan assets                |  |   | 139,430   |   |  |   | 43,540    |  
|Employer contributions                      |  |   | 336,769   |   |  |   | 459,463   |  
|Benefits paid                               |  |   | (16,091   | ) |  |   | (35,981   | )
|                                            |  |   |           |   |  |   |           |  
|Fair value of plan assetsend of year       |  | $ | 1,604,159 |   |  | $ | 1,144,051 |  
|                                            |  |   |           |   |  |   |           |  
|                                            |  |  
|Funded status:                              |  |   |           |   |  |   |           |  
|Funded status                               |  | $ | (327,738  | ) |  | $ | (542,859  | )
|Unrecognized actuarial loss                 |  |   | N/A       |   |  |   | 392,135   |  
|Unrecognized prior service cost             |  |   | N/A       |   |  |   | 193,912   |  
|                                            |  |   |           |   |  |   |           |  
|Amount recognized at December 31            |  | $ | (327,738  | ) |  | $ | 43,188    |  
|                                            |  |   |           |   |  |   |           |  

Amounts recognized in the balance sheets as of December 31 were as follows:



|                                     |  |      |          |   |      |   |          |  
|------------------------------------ |  | ---- | -------- | - | ---- | - | -------- | -
|                                     |  | 2006 |          |   | 2005 |  
|Other long-term liabilities          |  | $    | (327,738 | ) |      | $ |         |  
|Accrued benefit liability            |  |      |          |   |      |   | (384,803 | )
|Intangible assets                    |  |      |          |   |      |   | 193,912  |  
|Accumulated other comprehensive loss |  |      |          |   |      |   | 234,079  |  
|                                     |  |      |          |   |      |   |          |  
|Net amounts recognized               |  | $    | (327,738 | ) |      | $ | 43,188   |  
|                                     |  |      |          |   |      |   |          |  



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Amounts recognized in accumulated other comprehensive income as of December 31, 2006 were as
follows:



|                                               |  |   |        
|---------------------------------------------- |  | - | -------
|Unrecognized actuarial loss                    |  | $ | 208,078
|Unrecognized prior service cost                |  |   | 176,813
|                                               |  |   |        
|Total recognized in other comprehensive income |  | $ | 384,891
|                                               |  |   |        

The accumulated benefit obligation for all defined benefit pension plans was $1,808,704 and
$1,528,854 at December 31, 2006, and 2005, respectively.

Information for pension plans with an accumulated benefit obligation in
excess of plan assets:



|                               |  |      |           |      |   |          
|------------------------------ |  | ---- | --------- | ---- | - | ---------
|                               |  | 2006 |           | 2005
|Projected Benefit Obligation   |  | $    | 1,931,897 |      | $ | 1,686,910
|Accumulated Benefit Obligation |  |      | 1,808,754 |      |   | 1,528,854
|Fair Value of Plan Assets      |  |      | 1,604,159 |      |   | 1,144,051

The minimum liability concept, including recognition of an intangible asset, has been eliminated
under SFAS No. 158 effective December 31, 2006. Prior to the adoption of SFAS 158, a minimum liability adjustment was recognized in Accumulated Other Comprehensive Income to the extent there was an unfunded accumulated benefit obligation
that had not been recognized in the balance sheet. Minimum pension liabilities of $149,144 were recognized in Accumulated other comprehensive income (loss) as of December 31, 2006, prior to the adoption of SFAS No. 158, representing an
adjustment for the change in the additional minimum liability for the year ended December 31, 2006. This minimum pension liability was subsequently eliminated upon the adoption of SFAS No.158 at December 31, 2006. At December 31,
2005 the cumulative minimum pension liability of $386,907 was offset by an intangible asset of $193,912.

Weighted-average assumptions used
to determine benefit obligations at December 31,



|                              |  |      |   |  |      |  
|----------------------------- |  | ---- | - |  | ---- | -
|                              |  | 2006 |   |  | 2005 |  
|Discount rate                 |  | 6.10 | % |  | 5.80 | %
|Rate of compensation increase |  | 3.25 |   |  | 3.25 |  

Weighted-average assumptions used to determine net periodic benefit cost for the years ended
December 31, 2006 and 2005:



|                               |  |      |   |  |      |  
|------------------------------ |  | ---- | - |  | ---- | -
|                               |  | 2006 |   |  | 2005 |  
|Discount rate                  |  | 5.80 | % |  | 5.75 | %
|Expected return on plan assets |  | 8.50 |   |  | 8.50 |  
|Rate of compensation increase  |  | 3.25 |   |  | 3.00 |  

It is the Companys policy to adjust, on an annual basis, the discount rate used to determine
the projected benefit obligation to approximate rates on high-quality, long-term obligations.

The Company expects to contribute $421,297 to
its pension plan in 2007.



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---

The estimated benefits payable for the future ten years are as follows:



|          |  |   |        
|--------- |  | - | -------
|2007      |  | $ | 32,111 
|2008      |  |   | 39,084 
|2009      |  |   | 43,394 
|2010      |  |   | 52,781 
|2011      |  |   | 64,663 
|20122016 |  |   | 728,920

The Company has a 401(k) plan which provides for voluntary contributions by employees not to
exceed 25% of their gross salaries and wages or $15,000, whichever is lower. The Company matches 100% of the first 3% and 50% of the next 2% of each employees contribution. The amounts incurred for the Companys matching contributions
totaled $334,346 and $343,356 in 2006 and 2005, respectively.



|5. | LONG-TERM DEBT
|-- | --------------

On June 27, 2000, the Company
assumed $50,000,000 of obligations of TIN under senior notes, which bear an interest rate of 8.44% per annum and are due on June 1, 2010. A substantial portion of Companys assets are pledged as security for the notes. These notes are
guaranteed by Temple-Inland.

The Company was required, under the above loan agreement, to maintain certain financial ratio levels as well
as other nonfinancial covenants. Additionally, as part of the member guarantee of the revolving credit facility, TIN was required to meet certain covenants on behalf of the Company. At December 31, 2006, TIN was in compliance with these certain
covenants, as amended.

On July 30, 1999, the Company entered into a revolving credit agreement with a financial institution, which
provided for borrowings of up to $75,000,000. On December 18, 2000, the Company entered into an Amended and Restated Revolving Credit Agreement (the Agreement) with the same financial institution, which reduced the total
available borrowings to a maximum of $40,000,000. Caraustar and TIN each guaranteed one-half of the borrowings. On March 28, 2003, the Agreement was amended to reduce the maximum available borrowings to $20,285,094. Further, any amounts repaid
could not be reborrowed and the maximum available borrowings were automatically reduced by the amount of any principal repayments. The termination date was initially revised to January 5, 2004, and on December 22, 2003, the Agreement was
amended to extend the termination date to January 5, 2005. Borrowings under the agreement were due at that date; however, the financial institution agreed to continue to provide the letter of credit subfacility in the amount of $614,285, which
is secured by a back to back letter of credit from Caraustar in the amount of $307,142 and by a guaranty for a like amount from TIN. The Company had an undrawn letter of credit in the amount of $614,285 at December 31, 2004. The Agreement and
the letter of credit was terminated in 2005.



|6. | ASSET RETIREMENT OBLIGATIONS
|-- | ----------------------------

The Company accounts
for its asset retirement obligation related to a landfill in accordance with SFAS 143, Accounting for Asset Retirement Obligations. Under this pronouncement, an asset retirement obligation resulting from the legal obligation associated
with the retirement of a long-lived asset that results from acquisition, construction and/or the normal operation of a long-lived asset is recorded as a liability and a corresponding asset (as part of the related assets carrying amount) and is
allocated to expense over the assets useful life. The fair value of the liability for an asset retirement obligation is recorded as the present value of the retirement obligation, discounted at a credit adjusted risk free rate, in the period
in which it is incurred if a reasonable estimate of fair value can be made.



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The Company operated a landfill in Newport, Indiana used to dispose of refuse resulting from the
paperboard manufacturing process. This landfill was first permitted in 1985 and was closed during 2005, with on-going closure costs expected to be incurred through December 31, 2033. The permit to use the landfill by Premier constitutes a legal
obligation to incur costs to retire such landfill, including capping and closing costs at the culmination of the landfill use, as well as on-going costs related to periodic inspection reports, ground water monitoring, methane control and maintenance
of the final cover.

The Company calculated an estimate of the fair value of these closure costs as of June 1985, the date the legal
obligation was incurred. Upon adoption, the Company recorded a liability for the asset retirement obligation adjusted for cumulative accretion to January 1, 2003. Each year accretion expense is recorded based on the credit adjusted risk free
rate used to calculate the present value of the liability at January 1, 2003. The following table represents a rollforward of the liability, a component of other long-term liabilities, related to the retirement of the landfill from adoption of
SFAS No. 143 on January 1, 2003 to December 31, 2006:



|                                 |  |   |         |  
|-------------------------------- |  | - | ------- | -
|BALANCEDecember 31, 2003        |  | $ | 289,135 |  
|2004 Accretion expense           |  |   | 22,802  |  
|                                 |  |   |         |  
|                                 | 
|BALANCEDecember 31, 2004        |  |   | 311,937 |  
|2005 Accretion expense           |  |   | 23,055  |  
|2005 Post-closure costs payments |  |   | (28,862 | )
|                                 |  |   |         |  
|                                 | 
|BALANCEDecember 31, 2005        |  |   | 306,130 |  
|2006 Accretion expense           |  |   | 17,497  |  
|2006 Post-closure costs payments |  |   | (48,737 | )
|                                 |  |   |         |  
|                                 | 
|BALANCEDecember 31, 2006        |  | $ | 274,890 |  
|                                 |  |   |         |  

As of December 31, 2006, the Company has restricted cash of $621,402 on deposit for purposes
of settling this asset retirement obligation as required by the Indiana Department of Environmental Management.



|7. | RELATED-PARTY TRANSACTIONS
|-- | --------------------------

For the years ended
December 31, 2006, 2005 and 2004, TIN purchased approximately $59,553,000, $44,754,000, and $49,955,000, respectively, of the Companys production. During 2006, 2005 and 2004, Premier paid marketing fees to TIN of approximately $997,657,
$734,000, and $1,038,000, respectively. Such fees are included as a component of selling, general, and administrative expenses for each of the three years in the period ended December 31, 2006.

For the years ended December 31, 2006, 2005 and 2004, Caraustar purchased, approximately $2,992,000, $2,964,000, and $4,245,000, respectively, of the
Companys production. For the years ended December 31, 2006, 2005 and 2004 the Company purchased, at market prices, approximately $38,368,000, $8,857,000, and $2,030,000, respectively, of goods from Caraustar.



- 12 -



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For the years ended December 31, 2006, 2005 and 2004 Standard Gypsum, Inc., a 50% owned joint
venture of Caraustar and Temple-Inland, purchased, at net prices, approximately $3,191,000, $16,299,000, and $10,740,000, respectively, of the Companys products.

Caraustar has a marketing agreement with Premier as the exclusive marketing agent for all non-containerboard products produced by Premier. Caraustar and Temple-Inland, have the right to market containerboard products
(in addition to its exclusive marketing agreement with Caraustar for non-containerboard products), produced by Premier. During 2006, 2005 and 2004, Premier paid total marketing fees to Caraustar of approximately $2,407,000, $2,824,000, and
$2,113,000, respectively. Such fees are included as a component of selling, general, and administrative expenses for each of the three years in the period ended December 31, 2006.

Premier has a management agreement with Caraustar, employing Caraustar as exclusive manager of Premiers operations. Under the terms of the
agreement, Premier incurred and paid Caraustar $500,000 for management services for each of the years ended December 31, 2006, 2005 and 2004. Such fees are included as a component of selling, general, and administrative expenses for each of the
three years in the period ended December 31, 2006.

Each of the above agreements expires on the date Caraustar or TIN, or any
subsidiary or affiliate of Caraustar or TIN, ceases to own a membership interest in Premier.



|8. | COMMITMENTS AND CONTINGENCIES
|-- | -----------------------------

InsuranceThe Company is self-insured for the majority of its workers compensation costs and group health insurance costs, subject to specific retention levels. Consulting actuaries and administrators assist the
Company in determining its liability for self-insured claims and such liabilities are not discounted.

Operating
LeasesThe Company leases certain of its equipment under noncancelable lease agreements. Minimum lease payments under noncancelable leases for years subsequent to December 31, 2006, are as follows:



|     |  |   |        
|---- |  | - | -------
|2007 |  | $ | 244,171
|2008 |  |   | 45,767 
|2009 |  |   | 34,677 
|2010 |  |   | 3,697  

There are no noncancelable leases after 2010. Total rental expense incurred during 2006, 2005, and
2004 was $244,171, $286,634, and $234,430 respectively.

Legal MattersThe Company is subject to certain lawsuits and
claims incidental to its business. In the opinion of management, based on its examination of such matters and discussions with counsel, the ultimate resolution of pending or threatened litigation, claims, and assessments will have no material
adverse effect upon the Companys financial position, liquidity, or results of operations.



|9. | SIGNIFICANT CUSTOMERS
|-- | ---------------------

During 2006, 2005, and 2004
a single customer accounted for sales of $41,068,000, $47,632,000, and $43,328,000, respectively. There were no other customers who individually accounted for more than 10% of total sales (excluding IPP and Caraustar, discussed in Note 7).

******



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