Good morning, ladies and gentlemen, and welcome to the PolyOne Corporation Second Quarter 2014 Conference Call. My name is Erica, and I will be your operator for today. At this time, all participants are in a listen-only mode. We will have a question-and-answer session at the end of this conference. As a reminder, this conference is being recorded for replay purposes. At this time, I would like to turn the call over to Isaac DeLuca, Vice President, Investor Relations. Please proceed.

Thank you, Erica. Good morning, and welcome to everyone joining us on the call today. Before beginning, we would like to remind you that statements made during this conference call may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements will give current expectations or forecasts of future events and are not guarantees of future performance. They are based on management’s expectation and involve a number of business risks and uncertainties, any of which could cause the actual results to differ materially from those expressed in or implied by the forward-looking statements. Some of these risks and uncertainties can be found on the Company’s filings with the Securities and Exchange Commission, as well as in yesterday’s press release. During the discussion today, the Company will use both GAAP and non-GAAP financial measures. Please refer to the earnings release posted on the PolyOne website, where the Company describes the non-GAAP measures and provides a reconciliation of them to the most comparable GAAP financial measures. Operating results referenced during today’s call will be comparing the second quarter of 2014 to the second quarter of 2013, unless otherwise stated. Joining me on the call today is our President and Chief Executive Officer, Bob Patterson and Executive Vice President and Chief Financial Officer, Brad Richardson. I’ll now turn the call over to Bob Patterson.

Thanks, Isaac, and good morning. It’s a privilege to host my first earnings call as President and CEO and report that our second quarter was yet another exceptionally strong performance for PolyOne. We delivered $0.51 in adjusted earnings per share, a 38% increase over the prior year and an all-time record for us. This represents the 19th consecutive quarter of double-digit adjusted earnings per share growth, an impressive achievement and a streak I don’t plan to see come to an end, not on my watch. Our consistent and strong earnings expansion has become a hallmark of our transformation. And I am pleased that all of our segments delivered year-over-year operating income growth. Our Specialty Platform led the way with impressive gains from Global Color, Additives and Inks, Global Specialty Engineered Materials and the most recent addition to our portfolio, Designed Structures and Solutions. And as you have come to expect, mix improvement and the resulting expansion of margins underpin this growth, as each of our businesses achieved new record levels of operating income and profitability. Our underlying mix of earnings has never been stronger and we have great moment. I’m excited to be in my new role and to lead this great Company to new record levels of achievement. In my first two months I visited with customers, associates around the world and many other stakeholders. In a few moments I will share with you my initial observations as CEO, but first Brad will give us more details about our second quarter performance.

Thank you, Bob, and good morning, everyone. It’s a true pleasure to share our second quarter results this morning as our team once again delivered another strong quarter of performance. As expected, we continue to exit unprofitable business acquired from Spartech and accordingly our second quarter revenue of $1.01 billion was down slightly from the prior year. However, these actions coupled with other ongoing initiatives to improve mix and expand margins led to a 38% increase in adjusted EPS of $0.51 per share. As Bob said, our Specialty Platform led the way. All three of our specialty businesses generated record operating income and collectively expanded return on sales by 310 basis points for the quarter. Our steadfast focus on innovation and improvement in mix drove a 27% increase in Specialty operating income to $69.5 million, a second quarter record. Specialty now accounts for 66% of our total year-to-date segment income, inside the range of our 2015 target. Global Color, Additives and Inks once again generated another excellent performance and continued the momentum from the first quarter. Global Color continue to upgrade its portfolio and coupled with accelerated synergies from the former Spartech business improved operating income by 22% over the prior year to $38 million. Growth in health care, transportation and electronics grow double-digit operating income expansion in all regions, and I would highlight continued strength in Europe, as a key driver of our second quarter results leading to an all time record return on sales to 16.5%. This is a 300 basis points improvement over the prior year and exceeds the high end of the 2015 target range. Some of our most profitable additive business is in Europe, and we have been pleased to see growing demand in the region for these products. Not to be outdone, Global Specialty…

Well, thanks, Brad. Indeed it was another great quarter from many perspectives and we continue to build upon our momentum in all of our businesses. It’s been a little over 60 days now since I became CEO, and as I’ve done since day one, I am continuing to reaffirm some central themes for our company going forward. First, our four-pillar strategy of specialization, globalization, commercial and operational excellence is proven, fully endorsed by our management team and our Board and will continue to underpin everything we do. Second, while strategy is important, execution is even more critical. And excellence in execution will continue to be a key differentiator for PolyOne. And third, our 2015 targets remain unchanged and we are laser focused on them. During these first 60 days, I’ve been doing a lot of listening and learning as I’ve met with customers, associates, the investment community, suppliers and other stakeholders. During recent trips to Europe and Asia, I was energized by the level of enthusiasm and engagement shown by our global associates. And by engagement I mean a clear focus and a strong desire to win and especially having a relentless focus on our customers and innovation. Our customers have validated this and in this year PolyOne has been nominated and selected three times for Supplier of the Year awards by our customers. And just like our sellers do every day in the field, I use each customer interaction to listen, learn and then use that feedback to improve our business relationships and help innovate. And just like my time with my employees, I left these customer meetings very motivated and encouraged to do more for them. All of these interactions, whether internal or external, have consistently reinforced something I have always been passionate about and viewed as a…

) : Frank Joseph Mitsch – Wells Fargo Securities, LLC: Good morning, gentlemen and good morning, Bob and congrats for getting the first quarter successfully under your belt.

Thanks, Frank good morning to you. Frank Joseph Mitsch – Wells Fargo Securities, LLC: Thank you. I was surprised to hear you pronounce the G word and by that I mean Gravi-Tech, but certainly wish you well there. As you talked about maintaining your $2.50 2015 number, I also heard you talk of – actually I believe it was bad on aggressively pursuing acquisitions. Do you believe that you need to do more in that regard to achieve that number, or will innovation and cost savings get you there organically, from this point?

We’ve always said they are multiple levers that can get us to our objectives in 2015. Certainly completing an acquisition would help get us there. We made great progress in margin expansion highlighted by our second quarter results, so I feel very good about that and we’ve got a number of things in the pipeline from an innovation standpoint to help us. So I believe it’s a combination. Frank Joseph Mitsch – Wells Fargo Securities, LLC: Okay, great. Clearly margin expansion was terrific in Q2, a lot of that done via pruning, I’m guessing, and where do we stand on that effort, I mean, is the bulk of that behind us, are we in the midst of it, are we in the, where do you think we stand on that particularly as it pertains to the Spartech portfolio.

Well, first of all you do see some level of impact from exiting unprofitable business in each of our segments as they all with the exception of POD, I have some Spartech business that they inherited, and that's largely where these actions were contained to. So you do see that across the board. But most predominantly in the DSS segment, which of course was entirely Spartech. So, I believe that we’re always going to see some ongoing mix improvement and exiting unprofitable businesses, but for the balance of this year and going forward at a much slower pace. Frank Joseph Mitsch – Wells Fargo Securities, LLC: Okay, all right, well yes obviously very, very impressive. Here in Q2 or for the Q2 results. And then one of the hallmarks of PolyOne obviously is the double-digit growth that you alluded to or highlighted I should say, as well as hitting the numbers that are out there. I was surprised just taking a look at the third quarter that the Street is essentially flat with Q2, where a little bit below. But I would imagine, if you typically see some seasonality in the third quarter, particularly as it relates to Europe, given you – kind of how is the third quarter starting out and what might your expectations particularly since Europe was such an eye-popping positive here in Q2.

Yes. We absolutely see seasonality in this business in the second quarter is seasonally our strongest, which means that sequentially we often see a lower EPS in the third quarter than what we see in the second quarter and that would be our expectation, however that’s still going to be significant year-over-year double-digit expansion over last year. So, you’re right on with respect to the seasonality of the business and what to expect for the second half of the year. Frank Joseph Mitsch – Wells Fargo Securities, LLC: Thank you so much.

Yes, thanks, Brian.

Thanks, Brian.

Your next question comes from the line of Bob Koort with Goldman Sachs. Please proceed. Robert Koort – Goldman Sachs & Co.: Thanks, good morning.

Hey, Bob.

Bob, good morning. Robert Koort – Goldman Sachs & Co.: Brad, I was wondering on the $40 million restructuring charge. Can you give us a sense of lead component of that was Brazilian activity and what share was the rest of the year integration efforts.

Yes. We took in the quarter $40 million of restructuring charges related to Brazil, and the balance related to – associated with our Spartech realignment, which is primarily North America. Robert Koort – Goldman Sachs & Co.: Are you able to forecast with that number might be looking forward, are we going to start to see a dial down considerably or is it going to be an ongoing issue for few more quarters?

Yes. If you look Bob at our Q which we just filed and we would talk about the ongoing restructuring charges for the former Spartech business, that’s been probably another $10 million to go. And related to Brazil, there is probably another call it $2.5 million to $2.8 million to go in Brazil. Robert Koort – Goldman Sachs & Co.: Got it thank you. And then on PP&S, I think you’d mentioned a tepid building market what would you attribute that to I guess, I sort of feel like at least in the U.S., the housing market seems to have had some recovery, but maybe you’re selling in a different areas that aren’t doing as well or can you give us some help there.

There is a couple of things. One is I think that while the estimates on starts continue to be above where they were last year certainly not at the pace of growth we’d seen in previous years. And in addition, we haven’t seen the same level of correlation to our veinal specific products, which are in the PP&S platform that we have in the past and also, which we think is to some extent related to what we’re seeing in the wire and cable space more that’s a soft market. And that’s so we’re seeing some of that may have been weather related to the industry in the early part of this year I’m not sure that’s a valid explanation any longer. But, all we can say is that we know that from a veinal standpoint, we just haven’t seen the growth that we thought that we would relate to housing. Robert Koort – Goldman Sachs & Co.: And my last question, right on the specialty side, you guys had a – looks like a $37 million reduction in sales year-on-year. And I know you’ve talked about the pruning and can you talk about maybe specifically what kind of products were pruned and was there underlying organic growth outside of that pruning?

Yes, I mean look the preponderance of that really came from our design structures and solution segment. And we do have asset realignment actions underway there which support those actions. If you were to peel back what we’ve seen in the other segments, I would say that yes, there has been organic growth, I mean that’s been led by different industries, but notably our transportation and the packaging and electrical our electronics end markets. Robert Koort – Goldman Sachs & Co.: Great, thank you.

Thanks Bob.

Thanks Bob.

Your next question comes from the line of Kevin Hocevir with Northcoast Research. Please proceed. Kevin Hocevar – Northcoast Research: Hey, good morning everybody.

Hey, Kevin.

Hey, Kevin. Kevin Hocevar – Northcoast Research: Question on the – so Global Color, you guys mentioned obviously put up margins this quarter above the high end of your target for 2015. And I know you’ve talked in the past that this is the segment with the most potential of either commence at least at the high end or maybe even top these targets in 2015. So, just wondering how you’re confidence is progressing in that, particularly on whether or not this can top that, number in 2015, kind of seeing the progress that it’s making so far in 2014.

Kevin, this is Bob. As a follow on to Frank’s comment or question about seasonality, I would point that – point out that’s always source have a positive influence on our margins for the second quarter as well. So just to shape your due for the balance of the year, the margins are tend to be the strongest in the second quarter. That being said, we absolutely feel confident about our ability to get inside of those targets next year. And as we said at our innovation day, believed that our color segment has the best opportunity to exceed the high end of the range. Certainly, with the second quarter performance behind us, we feel even better about that. But I just want to calibrate everyone’s expectations with respect to Qs three and four. Kevin Hocevar – Northcoast Research: Sure. And then Bob, you mentioned with Brazil that is turning from a loss and expecting it to turn to low to mid-single digit operating income margins in 2015. I just want to – what type of sales you have in Brazil today? And kind of what you would expect after, some of these realignment in 2015 and beyond?

Yes, I mean we have in total, I would say, about $40 million to $45 million of revenue in Brazil. And with respect to the product lines that we believe would be impacted by this would probably be about $20 million in revenue. So it remains to be seen whether or not ultimately all of that is exited, but I think that’s a conservative number. Kevin Hocevar – Northcoast Research: Okay. And then finally, it seems like the distribution sales have been grown pretty nicely in the first half, but margins have been relatively flat. Just wondering why hasn’t there been a little more leverage here, there’s just been raw materials, that are going up just as much as price. So, I was just wondering why the margins have been relatively flat there?

Well, we continue to see pressuring on the raw material side I’d say, that’s the single largest impact. And if you just looked at markets, statistics on polyethylene, polypropylene are up 10% over, I think a year-ago period and that’s really the single largest driver on what we’ve seen some of the margin compressions, some of the challenges there. But the business continues to do well, delivering near 50% return on invested capital, so good by all other measures. Kevin Hocevar – Northcoast Research: Okay. All right, thank you guys very much.

Yes.

Your next question comes from the line of Laurence Alexander with Jefferies. Please proceed. Laurence Alexander – Jefferies & Co.: Good morning.

Hello Larry.

Hello Larry. Laurence Alexander – Jefferies & Co.: So two questions, one granular, as you look across the niches that you’re selling into, I know you sort of think about more in terms of product-by-product. Are there anywhere you’re seeing your penetration rates, or your overall volumes accelerating sharply enough to call out? And then I guess secondly just from a very high level do you think about the growth algorithm for the company now that Spartech is largely digested. Is there a minimum organic sales growth number that you think you need to have to be maintained the 10% plus earnings CAGR? Or is there a – or do you think there’s just so much room on the mix on the bottom slicing that that’s just the wrong way to frame it?

Well, with respect to your first question, I think that we made great progress on the packaging end market with respect to our liquid Color and Additives business as well as Masterbatch. So it’s kind of across the board from a product line standpoint in Global Color. And we’d just highlight that Europe was a good guy for us this quarter as it was in the first quarter. So, I don’t know that I’d call anything else out beyond that, are there again a highlight that Europe continues to be a help in the specialty platform. With respect to your second question, which I think was DSS specific, if I’m not then you can correct me, but I believe that we’ve got the opportunity to get to 10% return on sales in that business with a level of revenue that we have today. There is still a lot of ongoing work with respect to asset realignment and managing the business better. If I didn’t get your second question right, you can ask again. Laurence Alexander – Jefferies & Co.: Okay. I’ll circle back. Okay, thank you.

Okay.

Your next question comes from the line of Rosemarie Morbelli with Gabelli and Co. Please proceed. Rosemarie Morbelli – Gabelli and Company: Thank you and good morning all.

Hi Rosemarie.

Good morning. Rosemarie Morbelli – Gabelli and Company: I just wondering, if you could talk about the trends the underlying trends you have seen during the quarter has I know there is seasonality but taking that into consideration, did you see continuing momentum? Did you see a slowdown and if you could touch on the markets in Europe that you see improving?

Where we saw the most significant impact from a market standpoint in Europe was related to packaging as well as some level in transportation and electronics, packaging happens to be where we service that end market primarily from our Color business, which happens to be some of our higher margin products. And that’s a big driver and what you saw in terms of margin expansion for the quarter. Inside of North America, we continue to see, I think a very healthy level of growth with the exception of maybe housing not meeting our expectations, but nevertheless, I think still growing, and transportation certainly doing very well. So, above all I would also highlight transportation in North America. Rosemarie Morbelli – Gabelli and Company: And when we look at housing the reason that you’re behind, let’s call it, for lack of a better word, is it because when we deal with siding, vinyl siding when we deal with wire and cable. This is more for new constructions and you’re at the end of the project I’m guessing. Could you give us a feel as to what you see going forward in that particular area assuming that housing starts remain flat. Do you see a pickup because of the projects being completed?

Well, there are certainly some lag effect, because I do believe that our products entered their construction phase later in the cycle. We don’t do any straight siding per se, but we do window profiles and other return bends from a piping standpoint of our higher degree of engineer complexity. But, what I think we’ve seen this year and similar to last year is that there is a higher percentage of multi-family homes being built, which ultimately drives less windows and that has some impact. Plus just an overall lower consumption of vinyl when you look at the vinyl industry has done in the last couple of years; but saying the pace of growth hasn't been the same as it has been with housing start. So some portion, it’s a multifaceted sort of response to your question. Fortunately, for us, we continue to find ways to win. We’re focused on end market diversification and driving margin expansion and we continue to be successful in that regard. Rosemarie Morbelli – Gabelli and Company: Thanks. Let me finally ask one last question. On the distribution side, I mean by definition distribution pushes through raw material cost increases immediately. Why there is kind of a pass through type of business? So why the lower margin?

Well, we certainly do get prices through as fast as we can. Mathematically as costs go up it makes it more challenging to report a higher return on sales just simply because of a higher dollar value on the sale side, but nevertheless it’s our objective to improve margins. My only observation I have about that is that it’s been difficult for us to get there this year, similar to what we experienced in the second half of last year. It’s incumbent upon us to fix that and to get better at it and that’s what we’re focused on. Rosemarie Morbelli – Gabelli and Company: Okay. Thank you. Good luck.

Thanks. It’s our last question I believe.

Yes. And it comes from the line of Mike Harrison with First Analysis. Please proceed. Michael J. Harrison – First Analysis Securities Corporation: Hi, good morning.

Hi, Mike.

Hey, Mike. Michael J. Harrison – First Analysis Securities Corporation: I’d a question. Maybe looking for an update on the globalization strategies that relates to South America by way of asking about the Brazil restructuring. Presumably you had a choice whether to kind of expand growth efforts there, maybe doing acquisition in order to better leverage the infrastructure or to right-size the business for the current market. So how are you thinking about Brazil and South America going forward?

Well, my answer to that is actually very similar to how I view the transformation of PolyOne overall. If you go back in time, PolyOne initially during its formation phase, and I know I’m dating this observation here, but really struggled with its identity, who the company was going to be, what types of products they were going to sell and who they were going to serve. Ultimately we cannot be everything for everyone. We need to focus on Specialty niche applications where we can truly add value. And from a globalization standpoint, our primary objective is to service our multinational OEMs wherever they do business and do so in those same specialty markets. So it’s not an exit of Brazil, but rather just to focus on where we believe we can add the most value from a Specialty standpoint. Some of the products that we had there were candidly just more commodity in nature than we believe that we could sustainably maintain and that’s really what it comes down to. We need to focus on what we’re good at and grow that business.

And we talk a little bit about seasonality on this call. Are Any of the mix changes that we’ve seen over the last several quarters, leading you toward to having less seasonality in the business, or did they really have more to do with the geographic mix and Europe taking much of the third quarter offer for holiday.

It’s possible that mix changes having some impact on seasonality. I’m not sure to what extent I would say that’s flattening out our results given that in this year we saw strong performance from Europe in the first quarter and second quarter. And we’d expect it sequentially to be down in the third, so that’s keeping with historic trends. The construction cycle typically strongest in the second quarter as well. So, you look from a margin standpoint mix has certainly impacted us from a seasonality standpoint is probably align with what we’ve seen in historic periods.

And then, the last question I have is the DSS segment and seeing 25% lower volumes there. Obviously, you are offsetting that at the bottom line, but can you just give us any better detail of what specific product lines or markets, you are steering away from right now and what are some of the higher margin product lines or markets where you are seeing the growth opportunities.

Well, I can’t get into the specific product lines and I’d say that we have a lot of opportunity to improve our cost position, which is what we are doing with respect to the manufacturing realignment in a long away will improve quality and ultimately that will improve the service that we deliver to our customers. And really allow us to advance our specialty initiatives with them. So, I can’t make any specific comments more than I have about product lines or customers, but it’s sort of a broad range of areas where we had operations that just weren’t profitable and we’re taking the actions to reverse that.

All right, thanks very much.

Certainly.

Well, thanks to everybody for joining us on the call today. We had a great second quarter, look for into delivering similar news for the balance of 2014 and beyond. Take care.

This concludes PolyOne’s conference call. You all may now disconnect and everyone have a great day.