Summary International Paper is also involved in various other inquiries, administrative proceedings and litigation relating to contracts, sales of property, environmental protection, tax, antitrust, personal injury and other matters, some of which allege substantial monetary damages. While any proceeding or litigation has the element of uncertainty, International Paper believes that the outcome of any of the lawsuits or claims that are pending or threatened, or all of them combined, including the preceding antitrust matters, will not have a material adverse effect on its consolidated financial statements. million, $855 million and $904 million, respectively. Total interest expense was $840 million in 2004, $875 million in 2003 and $891 million in 2002. Interest income was $97 million, $103 million and $106 million in 2004, 2003, and 2002, respectively. The following tables present changes in the goodwill balances as allocated to each business segment for the years ended December 31, 2004 and 2003. The last-in, first-out inventory method is used to value most of International Paper’s U.S. inventories. Approximately 70% of total raw materials and finished products inventories were valued using this method. If the first-in, first-out method had been used, it would have increased total inventory balances by approximately $170 million and $133 million at December 31, 2004 and 2003, respectively. Plants, properties and equipment by major classification were: Interest costs related to the development of certain long-term assets are capitalized and amortized over the related assets’ estimated useful lives. Capitalized net interest costs were $11 million in 2004, $9 million in 2003 and $12 million in 2002. Interest payments made during 2004, 2003 and 2002 were $807 NOTE 11 SUPPLEMENTARY FINANCIAL  STATEMENT INFORMATION Inventories by major category were: In millions at December 31 2004 2003 Raw materials $ 371 $ 406 Finished pulp, paper and packaging  products 1,796 1,662 Finished lumber and panel products 184 127 Operating supplies 351 506 Other 16 66 Inventories $2,718 $2,767 In millions at December 31 2004 2003 Pulp, paper and packaging facilities Mills $22,165 $21,234 Packaging plants 5,874 5,826 Wood products facilities 1,411 1,232 Other plants, properties and equipment 1,925 2,091 Gross cost 31,375 30,383 Less: Accumulated depreciation 17,943 17,123 Plants, properties and equipment, net $13,432 $13,260 Balance Balance January 1, December 31, In millions 2003 Other 2003 Printing Papers $2,864 $14 $2,878 Industrial and Consumer Packaging 1,358 3 1,361 Distribution 326 8 334 Forest Products 187 3 190 Corporate 24 6 30 Total $4,759$34 $4,79 3 (a) (b) (a) Restated for the reclassification of Weldwood to Discontinued operations (b) Represents the effects of foreign currency translations and reclassifications from other long-term assets (f) Represents goodwill recorded by International Paper upon the acquisition of Plantation Timber Products and the subsequent write-off following an impairment evaluation (e) Represents the effects of the sale of Scaldia Papier B.V. ($23 million) and the reclassification of the goodwill of Papeteries de France to Assets of businesses held for sale ($12 million) (d) Includes the effects of the acquisition of Box USA ($238 million) offset by the sale of Food Pack S.A. ($3 million) (c) Represents the reclassification of the goodwill of Fine Papers to Assets of businesses held for sale (b) Represents the effects of foreign currency translations and reclassifications from other long-term assets (a) Restated for the reclassification of Weldwood to Discontinued operations Balance ) ) Balance January 1, Additions/ December31, In millions 2004 ) Other) $_{Reductions}$) 2004 Printing Papers $2,878 $1 ) $ (3) $2,876 Industrial and Consumer Packaging 1,361 9 ) 235 ) 1,605 Distribution 334 (35) - ) 299 Forest Products 190 - ) - ) 190 Carter Holt Harvey - 35 ) (35) - Corporate 30 (6) - ) 24 Total $4,793 $4 ) $197 ) $4,994 (c) (d) (f) (e) (b) (f) (a) 65