Transaction Revenues” to “Marketing Services and Other Revenues” in order to more closely align our net transaction revenue presentation with our key operating metrics.
“Marketing Services and Other Revenues” also includes amounts previously reflected under “Advertising and Other Revenue.
” Prior period amounts have been reclassified to conform to the current presentation.
Consolidated net revenues, as well as total segment revenues, are unchanged.
(2) Total value of all successfully closed items between users on eBay Marketplaces trading platforms during the period, regardless of whether the buyer and seller actually consummated the transaction.
(3) Total dollar volume of payments, net of payment reversals, successfully completed through our payments network or on Bill Me Later accounts during the period, excluding the payment gateway business.
(4) Cumulative number of unique user accounts, which includes users who may have registered via non-Skype based websites, as of the end of the period.
Users may register more than once and, as a result, may have more than one account.
(5) Cumulative number of minutes that Skype users were connected with Skype’s VoIP product to traditional fixedline and mobile telephones.
Seasonality The following table sets forth, for the periods presented, our total net revenues and the sequential quarterly growth of these net revenues.
## Table 0 ##
We expect transaction activity patterns on our websites to mirror general consumer buying patterns and, as such, our fourth quarter has historically been our strongest quarter of sequential revenue growth.
However, this was not the case in 2008 due to the impact of the global economic environment and strengthening U. S.  dollar, which impacted the fourth quarter in particular.
Marketplaces Net Transaction Revenues Marketplaces net transaction revenues increased $30.2 million, or 1%, in 2008 compared to 2007, which is consistent with our 0.5% increase in GMVover the same period.
GMV generated by our largest category, vehicles, declined 9%.
Excluding vehicles, GMV would have increased 3% due primarily to an increase in our second largest category, consumer electronics.
Although we achieved growth in the number of sold items on our eBay Marketplaces trading platforms, the average selling price declined primarily as a result of consumer buying patterns in a weakening global economic environment.
Expenditures for buyer incentive programs, which are generally recorded as a reduction in revenue, reduced revenue growth by approximately 4% in 2008.
In addition, pricing discounts and changes had a negative impact on revenue growth.
Marketplaces net transaction revenues increased $816.3 million, or 21%, in 2007 compared to 2006 due primarily to a 13% increase in GMV during 2007 compared to 2006, and a shift to higher revenue generating categories.
GMV growth in 2007 occurred across all major categories, with the vehicles, consumer electronics,
Liquidity and Capital Resources Cash Flows
## Table 1 ##
Operating Activities We generated cash from operating activities in amounts greater than net income in 2006, 2007 and 2008, due primarily to non-cash charges to earnings and tax benefits from stock-based compensation.
Non-cash charges to earnings included depreciation and amortization on our long-term assets, stock-based compensation and the provision for transaction and loan losses.
Non-cash charges in 2007 also included a $1.4 billion goodwill impairment charge (including the $530.3 million earn out settlement payment).
Cash paid for income taxes in 2006, 2007 and 2008 was $179.2 million, $363.0 million and $366.8 million, respectively.
Investing Activities The net cash used in investing activities in 2008 and 2007 was due primarily to cash paid for acquisitions and the purchase of property and equipment, which was offset in 2007 by cash generated by the sale of investments.
The net cash provided by investing activities in 2006 reflected the cash generated from the sale of investments offset by the purchase of property and equipment.
Purchases of property and equipment, net totaled $565.9 million in 2008, $454.0 million in 2007, and $515.4 million in 2006, related primarily to purchases of computer equipment and software to support our site operations, customer support and international expansion.
Cash expended for acquisitions, net of cash acquired, totaled approximately $1.4 billion in 2008, $863.6 million in 2007, and $45.5 million in 2006.
In 2008, acquisition activity of $1.4 billion consisted primarily of the acquisition of Fraud Sciences, Den Bla?
Avis and BilBasen and Bill Me Later.
In 2007, acquisition activity primarily consisted of a $530.3 million earn out settlement payment related to our 2005 Skype acquisition and our acquisition of StubHub.
In 2006, we acquired Tradera.
com.
Financing Activities The net cash flows used in financing activities of $1.7 billion in 2008 were due primarily to the repurchase of approximately 80.6 million shares of our common stock for an aggregate purchase price of approximately $2.2 billion and the repayment of a bank obligation of $434.0 million assumed in the Bill Me Later acquisition, offset by the proceeds from stock option exercises totaling $135.1 million and $800.0 million of net proceeds from borrowings under our credit agreement.
The net cash flows used in financing activities of $693.4 million in 2007 were due primarily to the repurchase of approximately 44.6 million shares of our common stock for an aggregate purchase price of approximately $1.5 billion, offset by the proceeds from stock option exercises totaling $507.0 million and $200.0 million of net proceeds from borrowings under our credit agreement.
The net cash flows used in financing activities of $1.3 billion in 2006 were due primarily to the repurchase of approximately 54.5 million shares of our common stock for an aggregate purchase price of approximately $1.7 billion, offset by the proceeds from stock option exercises totaling $313.5 million.
Prior to 2006, we had not repurchased our common stock under a stock repurchase program.
grant-date fair value of stock options granted during 2006, 2007 and 2008 was $10.47, $10.60 and $7.46 per share, respectively, using the Black-Scholes model with the following weighted-average assumptions:
## Table 2 ##
Our computation of expected volatility for 2006, 2007 and 2008 was based on a combination of historical and market-based implied volatility from traded options on our stock.
Our computation of expected life was determined based on historical experience of similar awards, giving consideration to the contractual terms of the stock-based awards, vesting schedules and expectations of future employee behavior.
The interest rate for periods within the contractual life of the award is based on the U. S.  Treasury yield curve in effect at the time of grant.
The estimation of awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from our current estimates, such amounts will be recorded as a cumulative adjustment in the period estimates are revised.
We consider many factors when estimating forfeitures, including employee class and historical experience.
Recent Accounting Pronouncements In December 2007, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (FAS) No.141 (Revised 2007), “Business Combinations” (FAS 141(R)).
FAS 141(R) establishes principles and requirements for how an acquirer in a business combination recognizes and measures in its financial statements the identifiable assets acquired, liabilities assumed, and any noncontrolling interests in the acquiree, as well as the goodwill acquired.
Significant changes from current practice resulting from FAS 141(R) include the expansion of the definitions of a “business” and a “business combination.
” For all business combinations (whether partial, full or step acquisitions), the acquirer will record 100% of all assets and liabilities of the acquired business, including goodwill, generally at their fair values; contingent consideration will be recognized at its fair value on the acquisition date and, for certain arrangements, changes in fair value will be recognized in earnings until settlement; and acquisition-related transaction and restructuring costs will be expensed rather than treated as part of the cost of the acquisition.
FAS 141(R) also establishes disclosure requirements to enable users to evaluate the nature and financial effects of the business combination.
FAS 141(R) applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008.
FAS 141(R) may have an impact on our consolidated financial statements.
The nature and magnitude of the specific impact will depend upon the nature, terms, and size of the acquisitions consummated after the effective date.
In December 2007, the FASB issued FAS No.160, “Noncontrolling Interests in Consolidated Financial Statements — An amendment of ARB No.51” (FAS 160).
FAS 160 amends Accounting Research Bulletin 51, “Consolidated Financial Statements,” to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary.
It clarifies that a noncontrolling interest in a subsidiary, which is sometimes referred to as minority interest, is a third-party ownership interest in the consolidated entity that should be reported as a component of equity in the consolidated financial statements.
Among other requirements, FAS 160 requires the consolidated statement of income to be reported at amounts that include the amounts attributable to both the parent and the noncontrolling interest.
FAS 160 also requires disclosure on the face of the consolidated statement of income of the amounts of consolidated net income attributable to the parent and to the noncontrolling interest.
FAS 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008.
Earlier adoption is not permitted.
We do not believe the adoption of FAS 160 will have a material impact on our consolidated financial statements.
In February 2008, the FASB issued Staff Position No.157-2 (FSP 157-2), which delays the effective date of FAS 157 one year for all nonfinancial assets and nonfinancial liabilities, except those recognized or disclosed at fair value in the financial statements on a recurring basis.
FSP 157-2 is effective for us beginning January 1, 2009.
We do not believe the adoption of FSP 157-2 will have a material impact on our consolidated financial statements.
ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS EXECUTIVE SUMMARY International Paper Company reported net sales of $23.4 billion in 2009, compared with $24.8 billion in 2008 and $21.9 billion in 2007.
Net earnings totaled $663 million in 2009, including $1.4 billion of alternative fuel mixture credits and $853 million of charges to restructure ongoing businesses, compared with a loss of $1.3 billion in 2008, which included a $1.8 billion goodwill impairment charge.
Net earnings in 2007 totaled $1.2 billion.
The Company performed well in 2009 considering the magnitude of the challenges it faced, both domestically and around the world.
Despite weak global economic conditions, the Company generated record cash flow from operations, enabling us to reduce long-term debt by $3.1 billion while increasing cash balances by approximately $800 million.
Also during 2009, the Company incurred 3.6 million tons of downtime, including 1.1 million tons associated with the shutdown of production capacity in our North American mill system to continue to match our production to our customers’ needs.
These actions should result in higher operating rates, lower fixed costs and lower payroll costs in 2010 and beyond.
Furthermore, the realization of integration synergies in our U. S.  Industrial Packaging business and overhead reduction initiatives across the Company position International Paper to benefit from a lower cost profile in future years.
As 2010 begins, we expect that first-quarter operations will continue to be challenging.
In addition to being a seasonally slow quarter for many of our businesses, poor harvesting weather conditions in the U. S.  South and increasing competition for limited supplies of recycled fiber are expected to lead to further increases in fiber costs for our U. S.  mills.
Planned maintenance outage expenses will also be higher than in the 2009 fourth quarter.
However, we have announced product price increases for our major global manufacturing businesses, and while these actions may not have a significant effect on first-quarter results, we believe that the benefits beginning in the second quarter will be significant.
Additionally, we expect to benefit from the capacity management, cost reduction and integration synergy actions taken during 2009.
As a result, the Company remains positive about projected operating results in 2010, with improved earnings versus 2009 expected in all major businesses.
We will continue to focus on aggressive cost management and strong cash flow generation as 2010 progresses.
Results of Operations Industry segment operating profits are used by International Paper’s management to measure the earnings performance of its businesses.
Management believes that this measure allows a better understanding of trends in costs, operating efficiencies, prices and volumes.
Industry segment operating profits are defined as earnings before taxes, equity earnings, noncontrolling interests, interest expense, corporate items and corporate special items.
Industry segment operating profits are defined by the Securities and Exchange Commission as a non-GAAP financial measure, and are not GAAP alternatives to net income or any other operating measure prescribed by accounting principles generally accepted in the United States.
International Paper operates in six segments: Industrial Packaging, Printing Papers, Consumer Packaging, Distribution, Forest Products, and Specialty Businesses and Other.
The following table shows the components of net earnings (loss) attributable to International Paper Company for each of the last three years:

Tables referenced above, in order (Table 0 first):
<table><tr><td></td><td colspan="4">Quarter Ended</td></tr><tr><td></td><td>March 31</td><td>June 30</td><td>September 30</td><td>December 31</td></tr><tr><td></td><td colspan="4">(in thousands, except percentages)</td></tr><tr><td> 2006</td><td></td><td></td><td></td><td></td></tr><tr><td>Net revenues</td><td>$1,390,419</td><td>$1,410,784</td><td>$1,448,637</td><td>$1,719,901</td></tr><tr><td>Current quarter vs prior quarter</td><td>5%</td><td>1%</td><td>3%</td><td>19%</td></tr><tr><td> 2007</td><td></td><td></td><td></td><td></td></tr><tr><td>Net revenues</td><td>$1,768,074</td><td>$1,834,429</td><td>$1,889,220</td><td>$2,180,606</td></tr><tr><td>Current quarter vs prior quarter</td><td>3%</td><td>4%</td><td>3%</td><td>15%</td></tr><tr><td> 2008</td><td></td><td></td><td></td><td></td></tr><tr><td>Net revenues</td><td>$2,192,223</td><td>$2,195,661</td><td>$2,117,531</td><td>$2,035,846</td></tr><tr><td>Current quarter vs prior quarter</td><td>1%</td><td>0%</td><td>-4%</td><td>-4%</td></tr></table>
<table><tr><td></td><td colspan="3">Year Ended December 31,</td></tr><tr><td></td><td>2006</td><td>2007</td><td>2008</td></tr><tr><td></td><td colspan="3">(in thousands)</td></tr><tr><td> Consolidated Cash Flow Data:</td><td></td><td></td><td></td></tr><tr><td>Net cash provided by (used in):</td><td></td><td></td><td></td></tr><tr><td>Operating activities</td><td>$2,247,791</td><td>$2,641,109</td><td>$2,881,995</td></tr><tr><td>Investing activities</td><td>228,853</td><td>-693,146</td><td>-2,057,346</td></tr><tr><td>Financing activities</td><td>-1,260,687</td><td>-693,392</td><td>-1,673,851</td></tr><tr><td>Effect of exchange rates on cash and cash equivalents</td><td>133,255</td><td>303,828</td><td>-183,061</td></tr><tr><td>Net increase (decrease) in cash and cash equivalents</td><td>$1,349,212</td><td>$1,558,399</td><td>$-1,032,263</td></tr></table>
<table><tr><td></td><td colspan="3"> Year Ended December 31,</td></tr><tr><td></td><td> 2006</td><td> 2007</td><td> 2008</td></tr><tr><td>Risk-free interest rate</td><td>4.7%</td><td>4.5%</td><td>2.3%</td></tr><tr><td>Expected life</td><td>3.0 years</td><td>3.5 years</td><td>3.8 years</td></tr><tr><td>Dividend yield</td><td>0%</td><td>0%</td><td>0%</td></tr><tr><td>Expected volatility</td><td>36%</td><td>37%</td><td>34%</td></tr></table>

Question: When does Net revenues in December 31 reach the largest value?
Answer: 2007