Greetings and welcome to the Greif Inc. third quarter 2012 earnings conference call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded. It is now pleasure to introduce your host, Debra Strohmaier, Vice President of Corporate Communications for Greif. Thank you. You may begin.

Thank you, Christine. Good morning. As a reminder, you may follow this presentation on the web at Greif.com and the investor center under conference calls. If you don’t already have the earnings release, it is also available on our website. We’re on slide two. 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 2011 Form 10-K and in other company SEC filings as well as company earnings news releases. This presentation uses certain non-GAAP financial measures, including those that exclude special items, such as restructuring charges and acquisition-related costs and EBITDA before and after special items. EBITDA is defined as net income, plus interest expense net, plus income tax expense, plus equity earnings of unconsolidated subsidiaries, net of tax plus depreciation, depreciation and amortization expense. Management believes the non-GAAP measures provide a better indication of operational performance and a more stable platform on 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 the third quarter 2012 earnings release. Giving prepared remarks today are in order of speaking, Senior Vice president and CFO, Rob McNutt; and President and CEO, David Fischer. I will now turn the call over to Mr. McNutt.

Thank you, Deb. I am on Slide 3. Our three priorities for fiscal 2012 include improving our working capital, increasing cash flow and integrating acquisition. We're also taking additional steps to counteract stubborn economic challenges. We achieved further progress on each of our priorities during the third quarter. Working capital was $314 million as July 31, 2012 or $44 million below year end 2011. Recall that Q3 tends to increase our receivables due to the food and agriculture season and this year is no exception. However, continued improvements in other working capital items more than offset the impact of the food and ag season. Net cash provided by operating activities was $152 million for the third quarter of 2012 compared with $35 million for the same period last year. Free cash flow was $113 million for the third quarter of 2012 compared with a negative $11 million for the third quarter of 2011. Free cash flow for the 2012 year-to-date period was $209 million versus a negative $99 million for the first nine months of 2011, which represent a positive swing of over $300 million during the past 12 months. This improved free cash flow enabled us to reduce debt by a $142 million and return $73 million to shareholders in the form of cash dividends during the first nine months of 2012. Our third priority for this year, acquisition integration is gaining traction and positive contributions are being realized, although the economic headwinds in Europe have offset a lot of the good work that’s been done in these newly acquired businesses. David will provide an update of our integration progress in his remarks. We made no acquisitions in the third quarter 2012. Before reviewing our quarterly results, I want to note some specific challenges our company recently faced in…

Thank you, Rob. We are on slide 12. During the third quarter, we continue to closely monitor and adapt to an operating environment dominated by global macroeconomic volatility. The heightened level of uncertainty this has created for our customers during the past year is reflected in our quarterly volumes. Following a sharp drop in volumes in July of 2011, I said on the first quarter conference call that conditions had generally stabilized in Europe, the region most affected during the past year. On last quarter’s call I confirmed that there were signs of modest initial improvement in Europe, although the pace of global economic recovery remained uneven and stubbornly slow to accelerate. Our original outlook in December of 2011 for the second half of this year was based on a stronger recovery which has fallen short of our expectations. With the continued instability in the world economies, we are not yet comfortable that a new normal economic outlook is fully in place and volatility will continue. Rather than wait for a change to occur in an uncertain timeframe during 2012, we have began implementing contingency plans and taking steps to adapt our cost structure to anticipated sales levels. This involves closely monitoring each market, taking the appropriate action consistent with our long-term strategy and accelerating acquisition integration steps at a faster pace. During the past quarter we consolidated our Latin America Rigid Industrial Packaging business unit with that of North America and put the new America strategic business unit under the leadership of seasoned veteran Addison Kilibarda. This move allows for greater leverage of resources across both geographies. We have also made several management changes in specific countries in Latin America to correspond to the new structure. On the financial front, we have been working diligently to achieve our previously…

Thank you. (Operator Instructions). Our first question comes from George Staphos with Bank of America-Merrill Lynch. Please proceed with your questions.

The question I had was around volume and volume outlook. David I think you mentioned that the Polywovens business, the [cyclic] growth rate was 4% to 5% and you have seen a 6% decline year-to-date, should we assume that, that was the growth rate, the cyclic growth rate was what you expected in the third quarter and for the back half of the year. Similarly for the other businesses, rigid in particular you mentioned that volumes were below your expectations. What were you actually expecting in the quarter and the back of the year that was initially in your guidance? And then lastly can you update us on what kind of volumes you are seeing early thus far in the fourth quarter? Thank you.

I am going to try to answer it. So, the growth rate we had pegged for the Flexible business was in fact that 4% to 5% for the second half for this year. For the rest of the business, I think you asked the question and I am assuming that means that rest of the Rigid Industrial Packaging business (inaudible) three and as far as your third part of your question, remind me real quick.

What do you think thus far early in the fourth quarter?

This may be a little bit of a lengthy answer, but George to give you the usual flavor of volumes around the world, let me start with paper. Our paper business in general remains very strong, our order book remains good and it’s similar to the past six months for the mills. For our [core choice], there is (inaudible) operations were actually running just near or just shy of capacity. So the business there is very strong, we are up about 13% in the [core choice] business over last year and we expect that growth to stay stagnant at a high level or stay at a level, at a high level for the remainder of this year based upon what we are seeing. When you take a look at the Rigid business, I would tell you that this is where the demand has become more choppy, more volatile like it was about a year ago. Up until July when we had a drop off in volumes, we had commented that volumes had been stabilizing to slightly or modestly stronger for EMEA and Asia while it had remained fairly solid. But since July A, we have seen the turn down in Asia and resumption of choppy order patterns across North America. Latin America is just coming out of their seasonal low period. What’s been a bit surprising for us is that the August volumes for the rigid business in North America have bounced back to pre-July levels, but in some of our other businesses, we are seeing, we use this kind of as a triangulation, this choppy period resuming, reconditioning our empty units both in North America and Europe. And they remain scarce and hard to come by and little bit more expensive. Our closure sales are mixed I would say…

Our next question comes from the line Phil Gresh with JPMorgan. Please proceed with your question.

If I could just sort two together here, you talked a lot about potential restructuring activities. I was wondering if you could in anyway give us some sense of the scope or scale of these opportunities you had, would you say you know that's mostly in Europe or is it out of [Morocco] level basis and then for Rob you know that obvious very strong free cash flow continues here in the third quarter. Hoping you could give us a sense of how you see the longer term free cash flow generation potential of the company obviously there has been some working capital benefits this year. But how should we think about kind of the longer term of opportunity. Thanks.

Without begin two quantitative on the restructuring, I'll give you my perspective on it you know the company has grown rapidly over the last 10 years and has grown seven or eight individual business units that operate across the globe. We operate in 58 countries and we have about 280 manufacturing sites. We ought to able to be take a clean sheet look at some of those particularly in the stressed economics and look at ways of consolidating some of the manufacturing footprint, warehousing footprint capabilities spread across the globe and look for ways to leverage our management structure across businesses a little bit more efficiently and I let Rob comment about the free cash flow.

The free cash flow if you look at the components where its come from clearly, the EBITDA component of big portion of it as we continue to grow the business over time and as we take advantage of some of the strategies for example grow flexible take advantage of the hub and the cost structure improvement there, we should see increasing EBITDA over time. We started the year, we said that we were going to get about $25 million was our expectation out of working capital for this year. Year-to-date we are about $44 million. Now part of that relates to just the businesses not growing to the level that we had anticipated this year and so I am working from the lower base. What we have also taken about between three days and four days out of our working capital is in terms of related to days of sales and so that’s what I really look at is what are the turns to the individual components of working capital and those we can permanently embed, but again you get a lot of traction upfront with that then it will take more time and you get some diminishing returns, so the objective is to grow working capital or they slower pace than what it’s grown in the past as the company is growing. The big components of that as you look at our inventory management and inventory returns the guys who run our GBS shop has done a great job working hand-in-hand with the business rolling out some new tools to help them get a better handle on their inventories and tie the sales through the inventory through the production and so that’s increased returns. We have got in place in parts of Latin America virtually all of North America we are now rolling it out in EMEA and in Asia-Pacific and as well into our flexible business as speaking to rigid here. And so I think we will see some more traction from that over the coming quarters on the inventory side; on the payable side we had some improvements in North America as we have reset the [dial] in terms on many of our payables here in North America now rolling that out to other places in the world. On the receivables side that’s tougher especially in a tough market like this to reset receivables, so as you go through the components there I think you have got some more opportunity. The other piece is we put the (inaudible) acquisition this year thus far as we integrate the acquisitions that we have made anticipated that we will continue to grow the business and so as those occur that will obviously have an impact on cash flow going forward, but I think that goes through the major component.

Our next question comes from the line of Chris Manuel from Wells Fargo. Please proceed with your question.

Good morning gentlemen and congratulations on the strong free cash flow generation year-to-date. A couple of questions, I mean the theme that I want to ask around is really centers on the forward and a couple of the businesses and the two areas that I want to focus on are Asia Pacific, Latin America where at least looking back my model over the last decade aside from your November, December, January quarter of ‘09 that understandably was pretty rough. Obviously, the first time that business has lost money. So is there a fast forward what are the options or opportunities in your mind to get that back to potentially a double digit margin business is that possible that’s the first part of the fast forward question. The second piece of it is thank you for laying out the new flexible strategy but my question really there is as you mentioned, volumes have been declining to reach to targets you know are a 450ish kind of phase here for 2012 to get to the midpoint of your 7 to 750 range implies the mid-to-upper teens growth how do we achieve that and make that transition from degradation to you know 3X, 2 or 3X what is underlying 4% to 5% market?

Yeah, Chris thanks for the questions. The first one on the way we report regions, North America, EMEA, and then we combine Latin America and Asia Pacific and Latin America, Asia Pacific is, if you break in to its component parts and historically that’s been kind of half and half. If you look at Asia Pacific, that’s really driven for us primarily by China and by Singapore operations in Southeast Asia and -- China. The Asia Pacific region has been a growth region and with China being the core of that for us and we will continue to grow that business. As China has been a large exporter of products, chemicals our downstream customers, as their export markets has softened here over the last year or so especially the European markets. Our management team in Asia Pacific I think has done a great job of moving the customer base somewhat away from the export base to more local consumers, consumption based customers and so they did a good job, but that kind of ran out here as the Chinese economy slowed. So I think they were dependent on a couple of possibilities. One is what's going to happen with the export markets from China, which largely depends on what happens in North America and the US and in Europe and then relative currencies. I mean we came in to this year at 1.35 or 1.40 euro to dollar. Now we’re in the 1.20 to 1.25 here over the last month or so and so that obviously has a significant impact on the ability and then just fundamental demand in Europe. As David said, you know, while we’re seeing improvement in our new drum business in Europe, it’s still hard to find empty drums in Europe, which implies Europe is more…

No, I think that summarizes well and I'll comment just a little bit about FPS, Chris thanks for the question. Before I jump into the growth question specifically I would like to revisit just for a moment a couple fundamentals and my perspective over the overall business and why we got into it. First I think I have to start with the fact that our existing customers want this product. They buy this product and use it. And the acquisitions have opened up new customers to us, so it fits well within our product portfolio and it fits well within our customer base and the product itself has a very useful capability about it and a low life cycle analysis in terms of carbon foot printing. So I think it’s a product that’s here to stay, that’s going to find particularly in the dry goods area continued growth around the world. The entire flexible market when you consider geotextiles and the other applications shipping sacs, ropes, strapping is over two extra size of our traditional rigid business. So we are well positioned for an opportunity to grow well outside of our historical product range. We acquired the leading players in the industry particularly on the production side and we have a scale advantage over anybody who might try to follow in our footsteps. Scale is what has allowed us to build long-term differentiated capability in terms of production and we are going to start with that with the KSA hub. So it may take a bit longer to get to where we want to be, but I think the fundamentals I will point is in the right direction. As far as the growth rate I mentioned just a moment ago that we bought the three leading manufacturers in the world and we are adding to our network base, the KSA hub. Coupled with the KSA hub and the Greif Business System across the entire network, we have more than enough production capacity to accommodate the type of growth we need to achieve to make this business what we hope and intend it to be. As far acquiring those sales and those sales channels, you should expect us to not only push the organic growth, push to other geographies, leverage our existing distributors, but it is not out of the question that we would continue to grow the business via acquisitions in the distribution field of flexibles, whether it be in shipping sacs, FIBCs or even fabric. As of our cost advantage in production, we also believe selling fabric can yield some pretty good growth there once the network is fully up and running. So I think the major investments have been done and we have taken the high ground in terms of the capabilities, in terms of competing well and the acquisition of some distributors and downstream market channels will be a keen focus of the next couple of years to grow that at a faster than organic pace.

Our next question comes from the line of Adam Josephson with KeyBanc. Please proceed with your question.

A two part question, one on volume and one of consolidation. In terms of volume, in light of the recent data coming out of China and in light of what is happening in Europe, when do you think it is reasonable to expect sequential volume improvement in rigid and flexible and along those volumes what is your 4Q guidance incorporate in terms of sequential volume changes. And on the consolidation question, you talked about the network consolidation issues in flexible negatively affecting sales in the quarter to the extent that you know you talked about streamlining your manufacturing footprint in that business. What gives you confidence that you won’t experience further consolidation issues?

Adam, this is Rob. Thanks for the questions. In terms of the volume, that’s a tough question I mean if you can tell me what chemical industry production is going to be in Europe and China, that helps solve the problem, but in terms of the guidance or what's embedded in our guidance is really flat what the back part of the third quarter is the way we’re thinking about it right now but as David said, it's choppy. Its very tough to forecast in this environment, in the near-term and the long-term we got a business where, this is not where we get nine months or 12 months of lead time but more like days of lead time and by the way they can cancel on a day’s notice and so it’s a very tough environment to forecast and so you take your industrial forecast and your chemical forecast for the major economies and that’s what drives ours. In terms of the consolidation issues in the Flexible business, the issues there were very specific as we consolidated some of our production as we shutdown some operations in Europe as David referenced and absorb those into other existing operations. We did have some production hiccups in absorbing those and as we brought new additional selling capacity online and so forth in existing operations, as we brought things down elsewhere, we had to get things up to speed in our ramp up in their in terms of training, in terms of productivity of those activities was not as sharp as we thought it would be. Again it’s a relatively new business; we learned an awful lot through that and what gives us confidence that we wouldn’t do it again. We obviously learned a lot through that and we are as we look at the process is going forward as we further consolidate footprint to the degree we need to plan to apply those learning. Again a great business system and the folks who drive that process really help us to spread knowledge across the business and Flexible is no exception to that. So I think that give us confidence.

Our next question comes from the line of Ghansham Panjabi with Robert W. Baird. Please proceed with your question.

Good morning. It’s Matt Wooten sitting in for Ghansham today. On the pricing side and obviously volume decline put downward pressure on pricing but there were some declines in both industrial and flexible that were a little greater than we had anticipated. Can you comment on the competitive landscape and how that effecting price?

A couple of things on pricing I mean recognize that depending on what period you are comparing back to, but about half of our volume in our Rigid business, we have pricing directly tied to the input commodity so [steel] prices go down that pose down the pricing of the drum. And frankly the 50% is not under contract, under that kind of a contract tends to follow the same kind of pattern a part of that pricing issue is tied to commodities similarly in the polywoven business, there tends to be a link there and I think in both of those businesses broadly the folks around those business I think they did a pretty job of maintaining that value add margin for us for that is difference between product price and the raw material input cost, it tends to be on percent basis rather than absolute dollar basis with those move. And so that I think characterize a lot of the pricing but your right they had to also be impacted by competitive environments and market environments, but it tends to be very specific local market driven and so for example I think I have spoken to this previously in Germany. Germany is a big market for us in Rigid that right now is a fairly competitive market on the placing side as volumes have come down in Europe since July of last year. We have been impacted in Germany more on the price side then on the volume side frankly and we will pass on some business. So it tends to be very, very market specific but Germany is an example what I spoken to before. Broadly speaking, again volumes come down pricing does tend to be more competitive and we are seeing that…

I would say that’s exactly right, but I will also add that during the what I would call the backside of the curve when the economy is softening, there is an initial lag time but after a couple of months you also see the aggressiveness of supplier vendors hunting for volume as well and you see the growth of import in raw materials coming into the bigger markets of Europe and North America at very attractive rate, where you also have that dynamic which allows us to take advantage of regional opportunities as they present themselves and preserve margins despite the fact that prices have come down due to our own competitive dynamics.

Our next question comes from the line of Steve Chercover with D. A. Davidson. Please proceed with your question.

You discussed order patterns and specifically that they have come down from days to single day with the right to cancel, are we not at some sort of theoretical limit to how just in time things can get?

Dave.

Yeah let me clarify Steve the point of that people give us lead time of a week or so in terms of order but they do have the ability to cancel and do cancel with shorter lead times now and more recently and certainly we saw in July that may be historical practice has been.

And I think since the downturn in July you see a repeat of environment that it may validate your assumption that we have seen in previous years and that is the increase in short order lead time order or emergency orders or rush deliveries which our customers can just like cancel on a short basis they can equally get excited about entering them and meeting them in a very short time period and we are seeing in some of our markets that choppiness resume.

Thanks for that clarification. If I can sneak in one more glad to see your support in the $50 price hike containerboard, as a supplier of the independent box makers, do you subscribe to the notion that they need the catalyst to boost their margins or some of them said they are going to pushed back so what are doing for your independent clients?

Well I want to be real careful obviously talking about prices and then all I can talk about is our perspective and we make pricing decisions based on how we see supply demand in the marketplace and so that is how we make that decision, that’s how we communicate to our customers and at this point we haven’t had our customers up here to be accepting that price increase at this time that is what I would say.

Our final question comes from the line of Walt Liptak with Barrington Research. Please proceed with your question.

Just we got the qualitative I guess on the going forward free cash flow and so I just wanted to ask the question, if maybe in the fourth quarter if you can tell us where you think you might end on like a net debt basis?

You know, Walt, we’ve certainly got an internal forecast. I'll tell you that if you take our EBITDA guidance, you can see where the debt is going in to the quarter and so you can see -- you can calculate the interest, that’s got to be paid from that. You can take the math on the CapEx, we’re still at the 145 level, 20% cash taxes. You can see what’s been paid year-to-date and so you know, you can go through all that math. We’ve also said that we're not going to do anything material on the acquisition side certainly through the fiscal year as what we said early in the year and thus far sticking to that. And so if you run that math and lest there is a run up in working capital, that would be one wild card. Now what would cause a run up in working capital with the improvement in markets or somewhere along the line, we trip in one of working capital elements. I don’t see that occurring. You know, given that we’ve had nice working capital improvement through the year where we typically have had historically some cash generation, pretty significant cash generation from working capital on the fourth quarter, probably not going to see that at the same rate in the fourth quarter of this year, as we've seen historically based on just having made a lot of progress during the course of the year.

Okay. And then I guess along those lines you mentioned going out a little further, the diminishing returns in some of those working capital items. I guess where would you like to see the net debt like by the end of 2013? And I guess along those lines do you have to do polywoven distribution acquisition or is that something that you thinking about for 2013? And then in terms of the EBITDA growth that you talked about kind quantitatively, are we looking at EBITDA growth in 2013 or you thinking more longer term going out to 2015?

I think we can concurrently say is that we're getting better, a lot better at cash focus throughout the entire corporation. We feel two times EBITDA we'd like to get to and stay in that level that’s kind of target that Rob and I have in our mind. And if we have to do things in between now and then reaching that goal we're going to do in a prudent and controlled fashion and work it just out of continued cash flow.

Okay. If I can just ask one more follow -up on the Saudi joint venture around fourth quarter its sounds like there will be some nominal amount of revenue that starts flowing through but at this point is there, can we said at some sort of expectation and the kind of revenues we get 2013?

Yes, recognized that Saudi hub is strictly going to produce fabric which is going to go through converting into markets and at this point we haven’t put out any 2013 guidance broadly or specifically, but as David said during startup that’s going to cost about a $1 million a quarter is our current estimate for that, so think about that in the near-term and as we go forward we will think about guidance.

So with that I will close by saying while the global economy is choppy in the near-term creating forecasting uncertainty and stretching out the timeline on our growth initiatives, I continue to believe that the growth platforms we have put in place are the right steps to create long-term value for our shareholders. In the meantime, we will continue to improve cash flow from our operations to pay down debt, we will leverage the Greif Business System to drive down our cost structure throughout the organization and focus on integration of acquisition and consolidation of operations. If you would like to turn to slide 17, I will now turn it over to Debra to provide the replay information.