Greif Inc (GEF.B) 2006 Q4 法說會逐字稿

Good morning, Ladies and gentlemen. Welcome to the Greif fourth-quarter 2006 results conference call. At this time, all participants are in a listen-only mode. Following today's presentation, instructions will be given for the question-and-answer session. (OPERATOR INSTRUCTIONS). As a reminder, this conference is being recorded Thursday, December 7, 2006. I would now like to turn the conference over to Deb Strohmaier, Director of Communications. Please go ahead.

Good morning. As a reminder, you may follow this presentation on the Web at Greif.com in the 'Investor' center under 'Conference Calls.' If you don't already have the earnings release, it is also available on our Web site.

We are on Slide 2. The information provided during this morning's call contains forward-looking statements. Actual results or outcomes may differ materially from those that may be expressed or implied. Some factors that could cause the results or outcomes to differ are on Slide 2 of this presentation, in the Company's 2005 Form 10-K, and in other Company SEC filings as well as Company earnings news releases.

As noted on Slide 3, this presentation uses certain non-GAAP financial measures, including those that exclude special items, such as restructuring charges, a debt extinguishment charge, and timberland gains. Management believes the non-GAAP measures provide a better indication of operational performance and a more stable platform in which to compare the historical performance of the Company than the most nearly equivalent GAAP data. All non-GAAP data in the presentation are indicated by footnotes. Tables showing the reconciliation between GAAP and non-GAAP measures are available at the end of this presentation and in Greif's fourth-quarter and fiscal 2006 earnings release.

I will now turn the call over to Chairman, CEO and President, Mike Gasser.

Thank you, Deb. Good morning. We appreciate your participation in our fiscal 2006 conference call. If you are following our presentation on the Web, please go to Slide 4.

We are pleased with our record net sales and record net income for 2006. Strong top-line growth, driven by higher volumes and improved product pricing contributed to margin expansion and increased operating profit on a sequential quarter and year-over-year basis.

In the fourth quarter, we acquired Delta Petroleum Company, which operates seven facilities in North America. They serve a number of Blue Chip clients with blending, filling and logistics services, processing more than 200 million gallons a year. This acquisition extends our value-added service offering for industrial packaging customers and allows them to focus on their core businesses.

Senior Vice President, Dave Fischer, and his team are making excellent progress in the integration activities and introducing the Greif Business System to Delta.

We are extending Delta's expertise throughout our global footprint. We are already eliciting interest from our customers and are in active consultations in the international marketplace. We expect earnings from Delta to be accretive in our fiscal 2007 performance.

The addition of Blagden Packaging Group steel drum manufacturing closure businesses in Europe and Asia, which was completed on November 30, 2006, strengthens our position in those markets and enhances our standings with suppliers of steel and other raw materials. Our team in Europe, headed by Senior Vice President, Ivan Signorelli, is doing a superb job bringing Blagden's steel drum business under the Greif umbrella. Senior Vice President, Mike Patton, is overseeing the integration of Blagden's closures operations, which are based in China, into our [Pro-Seal] branded business. Blagden's acquired operations are also expected to be accretive in our fiscal 2007 results.

All three of our businesses, Industrial Packaging, Paper and Packaging, and Timber, ended 2006 on a positive note.

Our annual performance historically builds throughout the year, following the seasonally slow first quarter, and we look forward to another year of strong performance in 2007.

On Slide 5 -- in March, 2003 we announced four financial goals for 2006. As discussed in the previous quarter's conference call, we achieved these goals and established more aggressive targets for 2009. Those initial goals accomplished, we completed the We Earn the Right to Grow phase of a long-term strategy and entered the Earn and Growth phase. The Delta and Blagden acquisitions are consistent with our disciplined growth strategy, which is focused on consolidation opportunities in our industrial packaging segment, aggressively increasing our presence in emerging markets, and limited expansion in core business adjacencies. These recent acquisitions are expected to provide further benefit as the Greif Business System is embedded in their operations.

The Greif Business System continues to the be one of the key catalysts for profitability and growth. For example, an analytical tool was recently developed that allows us to pinpoint operations with best practices in place and deploy those practices to like operations in our network, thus enhancing operational excellence activities. These activities are being pursued in conjunction with commercial excellence and strategic sourcing initiatives.

Now to Slide 6. We're working diligently to achieve each of our financial performance goals by 2009. We will focus on core growth, successfully embed, optimize and leverage the Greif Business System throughout our global footprint and expansion that is consistent with our strategic focus.

Executive vice President and Chief Financial Officer, Don Huml, will now provide you with an update on our financial results.

Thank you, Mike. Good morning, everyone. If you would please go to Slide 7. As Mike said, we are very pleased to report record net sales and net income for 2006. Net sales increased 8% on a constant currency basis to $2.6 billion. The increased sales volume, which comprised almost all of the net sales increase, was due equally to organic growth and the impact of acquisitions. Generally higher selling prices, especially in paper and packaging, also contributed to this increase.

Gross profit increased 23% to $479 million in 2006 and gross profit margin improved 2.1 percentage points to 18.2% of net sales this year. Benefits from higher net sales and positive contributions from the Greif Business System were partially offset by higher energy and transportation costs compared to 2005.

SG&A expenses for the year were $259 million or 9.9% of net sales compared to 9.3% last year. This increase was primarily due to higher accruals for performance-based incentive plans.

Operating profit before special items was $238 million for 2006 compared to $171 million last year. This improvement was driven by strong top-line growth and margin expansion. Operating profit to net sales was 9.1% for 2006 and we ended the year solidly with operating profit of 10.8% in the fourth quarter.

We had record net income before special items of $140 million for the year compared to $96 million last year.

Now on Slide 8. In the Industrial Packaging segment, net sales in 2006 rose 8% on a constant currency basis over last year. This improvement was primarily due to organic growth, particularly in emerging markets. We also benefited from two tuck-in acquisitions in fiber and plastic drums a year ago and this year's fourth-quarter acquisition of Delta Petroleum, partially offset by rationalization of our footprint in the UK and France.

Operating profit before special items rose to $163 million compared to $123 million a year ago. Gross profit margin improved to 18.5% for the year compared to 16.3% for 2005. This is due to improved absorption of fixed costs and benefits from the Greif Business System.

Slide 9 shows results for the Paper and Packaging segment. 2006 net sales were $668 million compared to $608 million last year, primarily because of higher containerboard pricing levels and generally improved volumes.

Operating profit before special items was $64 million compared to $41 million a year ago. Gross profit margin improved to 17.5% for the year versus 15.3% in 2005. We would like to make special note of the exceptional performance of Paper and Packaging in the fourth quarter, whose operating profit increased to $30 million from $13 million a year ago. The segment benefited from the cumulative effect of containerboard pricing increases, improved operating efficiencies, and the Greif Business System. Paper and Packaging segment is in the early stages of adopting the Greif Business System.

To Slide 10. Timber net sales for the year were $15 million compared to $12 million last year. Operating profit before special items was $11 million, including $5 million from sales of special use properties compared to $8 million in 2005.

We are now on Slide 11. At October 31, 2006 our net debt was $324 million compared to $325 million on the same date last year. Our net debt to net capital ratio was 27.7% versus 30.8% last year. This 3.1 percentage point improvement is notable considering the funds required to support organic sales growth, complete the fourth-quarter acquisition of Delta, and pay the 50% increase in cash dividends.

Interest expense was $36 million and $39 million in 2006 and 2005, respectively. The decrease was primarily due to lower average net debt outstanding during 2006. During the fourth quarter of 2006, we amended our revolving credit facility to increase the Company's available funds by $100 million to $450 million. The additional availability, along with the European cash that was on hand at year end, has been used to finance the Blagden acquisition.

Our new key financial performance goals are shown on Slide 12. We have raised the performance bar for 2009 by at least 25% above the 2006 targets. Successful execution of our strategic plan, as Mike noted earlier, will enable us to achieve these goals.

If you will go to Slide 13. As previously discussed, strong sales volumes, margin expansion, and the Greif Business System were key factors contributing to our record net sales and net income for 2006. We expect strong financial results to continue into 2007, supplemented by organic growth, contributions from the Greif Business System, and earnings accretion from the recent acquisitions.

The Company's 2007 guidance, which excludes special items, is a range of $5.45 to $5.55 per Class A share, including accretion of $0.20 to $0.30 per share from the acquisitions of Delta and Blagden. This is approximately 15% to 17% over our record earnings in 2006.

That concludes my formal remarks. And you should now go to Slide 14. Mike and I will be pleased to answer your questions.

(OPERATOR INSTRUCTIONS). Chris Manuel, KeyBanc.

Congratulations on a fabulous quarter and fabulous year! I wanted to dig into a couple of things. First, when we look at your assumptions into your 2007 guidance -- what are some of the volume assumptions you have incorporated into there? I think you have already told us, $0.20 to $0.30 from acquisitions, $30 million from GBS. What is the volume assumption that you are assuming in there, number one? And then number two, does that incorporate any timber sales or things of that nature?

In terms of the volume assumptions, Chris, we would really expect a continuation of the recent trends. As we have spoken before, the steel substrate tends to be a GDP equivalent growth product line. With the plastic containers, about 2 points above that and fiber about 2 points below. So in the industrial packaging, that is fairly consistent with what we have experienced and we would see a continuation of those trends into 2007.

In terms of the timber assumption, we had an operating profit contribution of about $11 million during 2006, and we would expect 2007 to be quite comparable to that.

So that number doesn't include any -- in the past, you've talked about -- you have identified some higher, better use timber. It doesn't factor in any of that being sold?

No, that -- basically the three broad categories would be timberland gains, and those are excluded from our pro formas. And then we have the harvesting activity. And then the third category would be special-purpose, which would include primarily higher and better use properties. And so that -- basically that $10 to $12 million contribution for 2007 would include the harvesting activities and the sale of special use -- the gains on the sale of special use property.

Okay, perfect. If I could switch gears for a second, in your paper segment, you had some fabulous results there this quarter. Congratulations on that. And it looked as though the margins were at record levels, at least as far back as I have quarterly data I am looking at. Was there anything sort of unusual there? Or are we getting to a better run rate going forward that you think this business could perform in? Or is something more in between where you had been and where you were this quarter? What would you consider a more normalized margin level in that business going forward?

Chris, let me start off by just giving you a general view of the quarter in Paper and then Don can give you an idea of an indication of a more normalized.

First of all, I would caution you to try to annualize the fourth quarter because the fourth quarter seasonally is the strongest quarter in that business. So I would be very cautious in trying to do that.

The fourth quarter in Paper was an excellent quarter, as you mentioned. Volumes were strong for us, which is good. Prices were up. OCC was well managed. Energy was well managed, so we had a lot of real positive things that happen for us during that quarter.

We also, as you know, put a new management team in place over a year ago, and they're making great progress in that. So I think we're seeing some -- some of the improvement is due to that. And we just started to put in the Greif Business System in, so we have a lot of work to do. But we did see some improvement on that. So generally the fourth quarter this year -- a lot of good things happened to us. We anticipate the Greif Business System will continue to bring some value. We anticipate that the management team will continue to do as good a job as they have been doing.

The cautionary notes is what is going to happen to the OCC, what will happen to energy, what will paper prices do. And those are the cautionary notes that we need to look into. And Don, do you want to add anything at all?

The only thing that I would add is that we are really very excited about the Greif Business System. As mentioned in the formal remarks, we are in the early stages of adopting GBS within the Paper and Packaging segment. And we really hope to be able to control our destiny, as Mike [Patent], the leader of that business, would say, by really having more influence on the levers that drive profitability. We are very excited about the progress being made.

I had a few more questions. I will jump back in the queue though.

Mark Wilde, Deutsche Bank.

I would just like to echo those congratulations on both the quarter and the year.

I had a few different issues. One, I wondered in the Paper business, because it was such a strong quarter sequentially and year-over-year, if you can give us a little bit of color about what specifically you have done so far with the new management team and with the Greif Business System to improve performance in that business?

And then if we look into '07, how much of the $30 million in GBS benefits that you are estimating -- how much of that will come in the Paper business?

Thank you for the kind remarks, Mark. What the management team has done specifically to help the quarter be what it has been in [here] is that they have done a really good job at looking at plants rationalization. And we have closed some corrugators and put that volume into other plants. So our efficiencies have improved immensely. So our margins have improved. And I think -- I give them a lot of credit for looking at the markets, looking at plant utilization, making those tough decisions. And that is probably the biggest change sequentially that we have made this year. In addition to starting to embed the Greif Business System, which deals with commercial excellence, operational excellence -- and the whole working capital. So they have done a nice job from that standpoint.

I would say that one of the other benefits of the Greif Business System has been the tactical pricing workshops that have been conducted -- really selling on the basis of value, not price. And I think that really has helped in terms of the effectiveness of implementing the price increases.

To your other point regarding the expectations for 2007, we have indicated approximately a $30 million contribution from GBS. About two-thirds of that would be related to sourcing activities, some of which would benefit PPS. We have already seen some improved efficiencies and the sourcing of OCC, but it will primarily be in the one-third that would relate to operational excellence activities. And approximately half of the expected impact for 2007 would relate to our Paper and Packaging segment.

How much of that -- just of that $30 million from GBS -- how much of that is tied to the recent acquisitions or embedded in the recent acquisitions?

That would not be included. That would really be accounted for more in the accretion that we have signaled. And quite frankly, that accretion really is before synergies. And that is really where we are going to -- after we get through that initial -- the initial integration period. So it is really going to have much more impact really beyond 2007. But we would definitely expect a contribution from GBS as we embed it within the acquired companies.

I would add to that, Mark, I think that GBS is going to be a positive impact to the acquisitions. But it will really be at the latter part of '07, early '08 that we are going to see some meaningful impact in there.

Now one other area -- with the acquisition of Delta, which seems to have a pretty high kind of servicing and fulfillment component, can you just help us think about margins in that business relative to the existing industrial packaging business?

We are very excited about Delta and the opportunity to extend our value chain and provide those value-added services. I would say that in terms of modeling our performance, their margins do ten -- it's a little different model. The margins would tend to be a little bit lower, and we will see higher asset velocity. So we will -- we expect very attractive returns. But it will be an operating profit margin that will be lower than our existing businesses.

Can you -- want to quantify that or not right now?

Not right now.

Mario Gabelli with Gabelli & Co.

Mike, Mario Gabelli. Just so I understand this, the acquisition of Blagden, if I'm pronouncing it correctly, that starts coming into the fiscal year on an accounting basis when?

We finished the transaction, Mario, November 30.

Okay, so you're going to have basically 11 months this year?

Eleven months this year, correct.

Was there any debt on that acquisition when you acquired it? Did they have any debt on their books?

No, it was debt-free.

And what was the GAAP book?

Do you remember what the GAAP book was?

By reading my own handwriting, you paid EUR205 million?

EUR205 million, that is correct.

So let's assume you paid that and locked it in before the currency change?

We did lock it in.

Good for you. I'm just trying to figure out your pro forma debt, and on November 30, it would be about $566 million, more or less? Net-net-net -- the way you define it?

That is pretty close to being the right number.

And the net debt to capital ratio was --

Your GAAP book is probably $900 million. So it's not a big number. I come from a world in which if you don't do 5 times EBITDA you are not leveraged.

In terms of cash flow characteristics for 2007, you haven't announced any plans to finance this in terms of an equity-type offering?

No we have not --

No problem. Mike, staying at 30,000 feet, you've done a terrific job consolidating. How far along are we?

As far as the consolidation and the --?

Yes, in other words, I would never have had Blagden on my radar screen as an opportunity. Where are you in terms of either percentage of steel drum fiber on a global basis and plastic in terms of where you are versus desired? Do you have 5% of the market? 10%?

Well, we are the largest in the world by far. So it is an industry that doesn't have a public metric. I will give you our estimate is in the 30% to 35% range, which is by far the largest. We would say if you add up the number two, three, four competitors, their market share doesn't equal ours. So we are certainly larger. And as far as where we are at in the consolidation process, we are continuing -- we still have some opportunities there that we will look at as the opportunities present themselves. We are going to be very disciplined, as you know, because you've known us for a long time, as we go forward here.

Remind me. Just so -- go back to circle -- the balance sheet of Blagden -- it had no debt on it. It had some cash or not when you bought it?

No, cash was out and there was no debt.

Walt Liptak, Barrington.

Thanks, and congratulations, guys. The volumes that you were talking about in Chris Manuel's question -- could you talk about what the paper volumes might look like in 2007? And I would also like to find out what the recent trends were -- how the quarter looked in Paper sequentially -- August, September, October and how things are trending in November, December?

As far as the mills, on a full-year basis, they were up about 4%. Our converting activities, which we really include the sheet feeding as well as the box making activities, because we have had a corrugator rationalization, so it is better to aggregate them. We have seen volume increases of about 6%. And there is an expectation that we would be fairly close to that. That compared to the industry, is quite favorable. We would expect that we would be fairly close to that for 2007.

As far as November is concerned, Walt, we don't have those numbers yet because we have been pretty much circling the wagons and getting the year done. But indications are that the trend that started continues through November.

And switching gears a little bit, the Delta acquisition contributed this quarter. What was the dollar amount during the quarter?

Well the impact on sales and we had basically five weeks of activity -- it would be about 3% of the fourth-quarter results and less than 1% of the full year. There was a profit contribution, but I would say it is not necessarily indicative. There's a little bit of noise. I would really just characterize it as a positive contribution in the first five weeks.

And the tax rate -- I may have missed this, but did you provide any guidance for tax rate in '07?

I would use 32%. We are getting very strong results in North America; that is really where we have our highest tax rates. So we will see a little bit of tax rate creep.

And going back to some of the earlier conversations you have already had about the Greif Business System in paper for 2007, that roughly $15 million of cost savings or cost reduction, whatever you want to call it in '07 -- is that spread throughout the year? Back-end loaded? How should we look at that when we model?

That is going to be a little bit back-end loaded.

(OPERATOR INSTRUCTIONS). Chris Manuel.

I just wanted to dig in a little deeper to the two acquisitions that you have done, both Blagden and Delta. Can you tell us what -- at the time you acquired them, what last 12 months EBITDA was for those businesses?

Yes. We really don't speak in terms of EBITDA. In fact I'm not even supposed to say the word. So excuse me, counselor.

Operating income -- whatever you --

But no. I think I might -- what we could do is really just characterize the multiple that we paid. And as Mike has mentioned, we are disciplined buyers and the multiple was in the range of 6 to 6.5 times for both Delta and Blagden. That was pre-synergies, Chris. And I would think for Blagden's case after synergies, you would be looking at south of 5, probably.

So each of those were in the 6 to 6.5 range, is what you had paid for them versus last 12 months. And going forward, you think that there's some opportunities, particularly on the Blagden side.

Can you give us a sense of the geographic mix that Blagden adds for you? There was a good piece of that that was in Asia as well. Can you give us a sense as to where their primary revenues -- a split for them was?

And I would just make one correction I think, Chris. We think there's really good opportunities both for Delta and Blagden. Blagden is more of a consolidation play, which you know, we have been successful in the past of doing those. So this will be continuing on that process.

Blagden is principally located in Europe, in Western Europe. So the Netherlands, Belgium, Germany is the principal locations -- a location in the UK, location in Italy, location in Spain. They do have some operation in Singapore, Malaysian and mainland China. So it does enhance our footprint in those regions of the world. And the customer reaction to date has been very positive on that, as it has been with the Delta acquisition, which is principally in North America today. Seven locations, six in the United States and one in Canada. We will work very hard on that acquisition to embed the Greif Business System to make it scaleable. And as I said in our prepared remarks, we already are having some conversations with companies outside the United States to continue adding some value-added services to them by looking at some blending, filling operations.

So both of those will help -- we believe both of those acquisitions will help us on a geographic basis.

So the percent of the revenue that Blagden had in Asia -- 10%, 15%? Some sort of a rough guess?

That really sounds like a good range.

Yes.

In that 5% to 10% range.

Yes, I think you are not far off there, probably.

And then on the Delta side -- the opportunity -- when you look at the whole market for the types of services that Delta provides, the blending and the filling -- is this something that is predominately done here in North America and not so much outsourced outside of North America? And would you view the opportunity globally to be over time, similar to what it is here?

I think especially the emerging markets are just starting to evolve, Chris, so the blending, filling is just starting to evolve because those products are just starting to evolve there. So we really have a great window of opportunity to be there on the ground floor.

Some of the discussions we have are in more stable markets where it has been done internally by customers, and they are looking at outsourcing that opportunity. So yes, potentially I would characterize that -- it could be as great as it is in the United States or potentially even greater. If -- it depends on how you want to argue the movement of chemical goods -- whether there are going to be more in the United States or more outside the United States. But it will definitely follow that trend.

Mark Wilde.

I wondered, Mike, if we could get a little perspective on the containerboard and box hikes that are sitting out there for first quarter?

We have announced increases January 1. We have gone out to our customers and announced that a week ago, 10 days ago. And we will go out with corresponding box increases. The reaction to date has been positive. Let's put it this way -- has not been negative. I guess no one is ever positive, but it hasn't been negative. So we are going forward, anticipating that that will go forward as we sit here right now.

And also on the paper business, can you just talk a little bit about pricing behavior in the sheet market versus just the box market? Because I am hearing over the last couple of years that pricing in the sheet market has been quite intense -- intensely competitive.

You get regional components, Mark, all over. I think this whole industry is a competitive industry. I think part of our favorable result is that we have been very disciplined in what we have done. Yes, there is a lot of competition out there. But us closing down those corrugators and becoming more efficient in -- in the more efficient corrugators -- we have been more disciplined as far as not trying to get into that type of arena.

And so it is out there. I don't think it is much -- anymore intense than the other two components, whether it be the box business or the mill business -- where we are at right now.

And then just turning over to Europe for a couple of minutes with Blagden. One of the issues in Western Europe is always kind of the social issues around trying to restructure and rationalize businesses. Can you give us some sense of what may need to be done at Blagden? And kind of what a reasonable timeframe and cost of that might be?

Well, cost, we are still trying to figure out, Mark. I hope you appreciate that since it is relatively quick. I can give you a guess-estimate of timeframe. And you're absolutely right as far as the social issues. Fortunately, we have over five years of experience dealing with those social issues in Western Europe. So we are very familiar with the process that you have to go through, very familiar with the timetable. We are looking at a two to three-year timeframe to fully integrate Blagden. That is longer than what we would take in the United States. But it is because of the social issues. And we have really factored all that into our valuation when we made the acquisition.

Some can be done sooner than others. But as you know, you have works councils that you have to deal with, and all this takes a period on time. But it is not something that we are overly afraid of, because we have dealt with it in the past. But it will probably be a two to three-year timeframe to be fully integrated.

Mike Peasley, Priority Capital.

Great quarter. Forgive me if you have already talked about this, I know you have talked about volumes over the last year. And you talked some about volumes and '07. Could you just give a little more volume -- or some volume color on Q4, primarily on the industrial packaging side? And just some color on what the organic growth was as well?

Yes, we have been focusing more on the full year, which we do think might be a bit more meaningful. But the trends are fairly consistent, but the steel substrate -- basically the mid single digit range of growth. And the plastic substrate has been growing a bit above that. Basically high single digits. And that would be on a same structure basis. And fiber drums, up significantly because of the fiber consolidation. But on a same structure basis, would be down about 2%.

That's helpful. And then did you sell any -- I know last quarter I think you sold a facility -- maybe a warehouse. Were there any such sales this quarter?

We did have the sale of a factory that was closed in the UK as part of its restructuring program, which is progressing exceedingly well. And that did contribute -- when you look at the gain on asset dispositions line, there is about $2 million and that is a result of that facility sale.

(OPERATOR INSTRUCTIONS). Bill Richards, Gabelli & Co.

My name is Bill Richard. My question is what, if any, structural impediments exist with respect to converting B shareholders to A? And if there are any, could you explain what they are?

The bylaws -- we have been two classes of stock, Bill, since forever. I'm not sure I understand what you mean by structural issues. You would have to have both the A and the B agree to that, which is probably the biggest structural. But I'm not sure I follow what else you are looking for.

What would be the impediments as far as making -- collapsing -- or actually, what would be the impediments as far as converting B to A? Are you just saying it wouldn't be in the original agreement? Is that what you are talking about or?

I am just saying that you would have to have an agreement between the A shareholders and the B Shareholders to do that. There is no conversion provision currently in the formula, so there is no formula. So you would have to get both the A and the B to agree that they wanted to do that.

So if the A and B agreed to do that, you could do that, you mean?

Hypothetically, if they both agreed, yes. There is no provision today, but that would be the biggest impediment, so you would have to have them both agree.

Would that be the only impediment?

Sitting here right now, I would have to think about that. That is the only one -- there is no agreement, so I assume that if they both agreed, that would be the only disagreement.

At this time, there are no further questions in the queue. I would like to turn the call back to management for any closing remarks they may have.

Thank you, again, for joining us this morning. As a reminder, this call will be available for replay from 1 PM Eastern time today through noon on Tuesday, December 12. The playback telephone numbers are 800-405-2236 for domestic callers, and 1-303-590-3000 for international callers. The pass code is 11077308#.

This call will be posted on the Company's Web site in approximately one hour. Thank you and good day.

Ladies and gentlemen, this does conclude the Greif Inc. fourth-quarter results conference call. You may now disconnect, and thank you for using AT&T Teleconferencing.