Welcome to the fourth quarter 2009 ACCO Brands earnings conference call. (Operator Instructions) I would now like to turn the presentation over to your host for today’s conference, Ms. Jennifer Rice, Vice President of Investor Relations. Please proceed, Ma’am.

Good morning and welcome to our fourth quarter 2009 conference call. On the call today are Bob Keller, Chairman and Chief Executive Officer of ACCO Brands Corporation, and Neal Fenwick, Executive Vice President and Chief Financial Officer. Slides that accompany this call have been posted to the Investor Relations section of accobrands.com. These slides provide detailed information to supplement this call. Our discussion this morning will refer to results on an adjusted basis for continuing operations, excluding all restructuring and other charges. We will also refer to earnings per share excluding gains associated with the repurchase of subordinated notes in 2008 and a one-time loss associated with the early termination of our prior credit agreement in the third quarter of 2009. A reconciliation of these results to GAAP can be found in this morning’s press release. During the call, we may make forward-looking statements, and based on certain risk factors, our actual results could differ materially. Please refer to our press release and SEC filings for an explanation of those factors. Following our prepared remarks, we will hold a Q&A session. Now, it is my pleasure to turn the call over to Mr. Keller.

Thank you Jennifer. Good morning everyone. Earlier this morning we released our fourth quarter and 2009 full-year results marking the end to a year that began for us in crisis and ended with us better positioned to compete than we have been in quite some time. In the fourth quarter our net sales were essentially flat with the prior year quarter at $353 million. Factoring out the positive impact of currency translation, sales would have declined 7%, a significant improvement over the prior three quarters. Our adjusted operating income margin expanded 260 basis points driven by cost savings and continued tight expense controls. Adjusted earnings per share increased 24% to $0.21 versus a comparable $0.17 in the year-ago quarter. For the full year net sales decreased 19% to $1.27 billion from $1.58 billion in the prior year. Excluding currency translation sales declined 16%. Notably we achieved full-year adjusted EBITDA of $150 million, only 5% lower than last year despite a 17.5% decline in volume. Adjusted earnings per share were $0.54 relative to a comparable $0.62 for the prior year. As I mentioned earlier, 2009 was an extremely challenging year for ACCO Brands. We began the year with significant headwinds and a number of objectives we needed to accomplish to ensure our viability, protect our business and begin to position it for success. Specifically we needed to get our expense structure in line with a rapidly falling top line, repair damaged customer relationship, improve operational execution, invest in new product development and refinance our business in an exceptionally challenging banking environment. We met or exceeded all of those objectives. We reorganized our business, took $20 million in permanent costs out and increased internal accountability. We focused on supply chain effectiveness, brought our customer metrics back where they needed to be, at…

Thank you Bob. Our fourth quarter performance is recapped on slide five. Sales were essentially even with a year ago with currency adding seven points, pricing one point and volume down eight points. The volume decline was significantly less than in the last several quarters and was in line with our expectations. Adjusted gross margin increased sequentially due to normal seasonality but contracted 90 basis points due to lower pricing in some international markets but currency movement benefits have exceeded commodity and freight cost increases. This also reflects higher customer rebate costs compared to the year-ago level and adverse mix. We continued to see better commodity costs and exchange rate comparisons year-over-year. SG&A was substantially favorable increasing $12.4 million or 14%. As a percentage of sales increasing 350 basis points to 21%. The improvement was in spite of a $3.9 million increase in foreign exchange translation and our repayment of 2008 furloughs to all employees below the Vice President level. We saw continued benefits from cost reduction initiatives. These cost savings more than offset the excess leverage from reduced volume which was also a much smaller headwind this quarter. All in, adjusted operating income improved 38% and operating margin increased 260 basis points to 9.5%. Within operating income there was a $5.2 million benefit from foreign exchange translation offset by $4.7 million of employee incentives including the payback of 2008 furloughs. EBITDA increased 31% to $46.3 million, in line with our forecast. Adjusted EPS from continuing operations increased 24% to $0.21 per share versus a comparable $0.17 per share in the prior year which excludes the $17 million gain associated with the repurchase of bonds a year ago. Turning to an overview of our segments on slide six. In the Americas, sales declined 5% or 7% excluding currency. We continue…

(Operator Instructions) The first question comes from the line of Reza Vahabzadeh - Barclays Capital.

A solid 4Q result. As far as the drivers of improved gross margin in 2010 can you elaborate in terms of the key drivers and how much visibility you have on those drivers?

I will kick off and then let Bob join in. We have a lot of moving parts to normalize our year from 2009 going into 2010. The very simple way to understand it is for all intensive purposes the favorable impact on gross margin are offset by adverse impacts from SG&A. They both account for about a point. If you just normalize 2009 you would add a point to our full-year gross margin and you would add a point to our full-year SG&A and the two offset to zero. We are then expecting improvements in gross margin and a big chunk of them are going to come out of our freight distribution area. We have been explaining all year that we have been hitting our customer service metrics particularly in the second half of the year through brute force for want of a better description and the offset of brute force is it costs more dollars. So we have incurred significantly higher freight and distribution costs than you would want in the long-term state. So one of the big things we are looking to do is get about a point out of freight and distribution costs in our 2010 objectives. Then the other half point to a point we are looking to get is really out of supply chain and getting more efficient with vendors. We had a problem in consolidating vendors until we could get the business refinanced. So as we have expressed before we view that as an opportunity for us to get on with and we have been getting on with it ever since we completed the refinancing.

I think that was a great summary. To Neal’s point, we muscled our performance in 2009. We air freighted shipments and we did everything we could to ensure we met or exceeded customer expectations and we did a great job of that. We have significant opportunities to improve the efficiency of the entire supply chain process. We were in a position last year financially where our best suppliers didn’t want more of our volume because of the risk associated with that. I think we have dealt with that and so we have an opportunity to consolidate suppliers and try to drive better costs there. We have opportunities to consolidate freight in Asia. We have opportunities now that we have repaired customer relationships to change the intersection points of our supply chains and benefit in doing that. So all along the entire supply chain I think we have opportunities to be more efficient in 2010 and maintain the level of effectiveness.

Of the 100 basis points you want to get out of the freight distribution cost base and the other 50-100 basis points on the supply chain, how much of it do you think you are at run rate now?

Coming out of the fourth quarter we were not at the run rate we wanted in freight distribution and it may be fairer to characterize freight and distribution as less than a point. Our objective is to get a point out of both but we expect to get 1.5 points in aggregate. There is a timing issue that offset both of them. You are right to call that out. Certainly we are making more rapid progress in North America than we are making in Europe in getting that efficiency right in freight and distribution. In the fourth quarter for example year-over-year freight and distribution was still adverse year-over-year by about 40 basis points. That is partly because we were achieving cost savings last year through cost reductions but at the expense of service. We need to improve our systems and we will be doing that every single month of the year as we incrementally improve various initiatives. We have a large number of individual initiatives which basically land almost every month to improve our freight levels and distribution levels. It is both issues equally which are heavy.

Any thoughts on duration on input cost inflation expectations for 2010?

We have two drivers of our inflation and deflation one of which we often talk about which is the impact of foreign exchange fluctuations. We have seen a lot of volatility in foreign exchange. So in some of our international markets we had to lower prices in the fourth quarter because if you take currencies like the Australian dollar they had appreciated markedly against the U.S. dollar. As we have always tried to explain you shouldn’t view that as a gain or a loss for our business. We try and remain neutral with that and the timing lag that can hurt you or help you slightly but those price movements are really driven by currency fluctuations we can’t control and the market understands. Then in terms of underlying raw materials the biggest cost driver we have seen lately is international freight rates coming out of China. Probably like a lot of people there was a big reduction in those freight rates in 2009 and there is a big increase going on going into the first half of 2010. Effectively there is an imbalance of supply and demand right now which is leading to short-term price hikes until the ships get un-mothballed. That is the biggest pressure we have seen. Then obviously we have seen oil prices creep up and as both you and I know that will feed into a lot of energy costs and factory products. So a gentle upward pressure on underlying raw materials we are seeing.

But that won’t affect you until second half right?

Inbound freight is more immediate than that.

Will you have any cash restructuring by the way in 2011?

We will have no P&L charges but we do have a tail of expenditure, in 2011 sorry, it would be property lease costs in the amount of $1-2 million at the most but I actually have properties that we are looking to sell which I assume will offset that in 2011. That could happen in 2010 but the current property market is so rubbish I would assume those sales will now clear in 2011. So I am aiming for zero but it depends on when we sell the properties.

The next question comes from the line of William Chappell - SunTrust Robinson Humphrey.

I just want to talk about the SG&A both for the quarter and the expectations for 2010. I am trying to understand, if you look on a percentage basis you are kind of expecting to go back to the 2008 levels of 24% of sales despite cutting 1/3 of the workforce during that timeframe. I am trying to understand why that is, why you also think you need to repay for all the cuts you were doing in 2009 when we are still not seeing any improvement in the overall environment?

I will take the back half of that. We have a fundamental belief that we have an obligation to pay people what we committed to pay them in terms of their salaries and we asked people to perform under extraordinarily difficult circumstances last year. For six weeks last year we took people to 50% of salary and then for the following quarter we reduced our salaries by 25%. We furloughed people and expected them frankly to get their jobs done. Our people carried us and we believe we have a moral obligation to pay them back and we did and we are. It is something I think our management team and our board both felt pretty strongly about. Frankly we think our people are what drives this business and they did a great job for us last year.

To answer your other question which is a valid observation, our top line has declined more than 30% so we have taken a lot of costs out on the SG&A line just to stand still. We do believe we are a cyclical business and you will see cyclical growth over the next several years as the economy inflects. We have our cost base where we think it needs to be for the long-term. Hence we don’t expect any more restructuring charges running through the business but as the business grows we do not need to add back in the dollars often normalizing year to year which we have spoken about and you will see us get that SG&A down over the next couple of years as the business recovers.

Just to follow-up if you are looking at your financial outlook and your post-recovery goals from what it looks like you will get to the maximum gross margin this year by hitting that 32-33% level. You are going to need 400 basis point improvement in SG&A to get to your target EBITDA margins. Do we need a major recovery to the economy or is that a five-year type goal?

I think it is shorter term than that. I think if you looked at where we think we need to be in terms of delivering 15-16% EBITDA we think we need to be $1.5 billion company and we think that is a 3-4 year horizon.

I also think it is important to understand we don’t just expect to wait for the economy to recover. We lost share coming into the last couple of years and we need to regain that share and we also believe that we have never had our fair share of the mass channel. We have chosen not to have a share of the private label price points. If we just let the business recover through the economic cycle we would actually overshoot our gross margin long-term target. Our belief is we are going to grow faster partly by moving to a slightly lower gross margin mix as we get into the mass channel and the private label categories. If you think about SG&A, our SG&A is very much a function of the size of business we are trying to support but we think we can get growth both from the economy inflecting and also from taking share. The other piece in our SG&A to understand is we haven’t paid any management incentives for two years. We didn’t pay them in 2008 or in 2009. We will back-end payment of those management incentives. I like to go into a year expecting to earn them. If things don’t come as we expect then we recognize our duty to shareholders comes first but we actually think our duty to our employees even comes before that and that is why we put through the 5% pay raise for the rank and file employees of the business who fundamentally were a big reason why we are all still here. I think it is important we recognize the contribution of the people in the business and we look to achieve our own objectives and if we don’t as a management team then we will suffer before the shareholders.

The other last piece to that is consistent with what Neal has said is our expenses are tied to improvement in top line in our budget process. What you are seeing is our expectation we are going to grow the business but we have an opportunity to manage SG&A throughout the year based on what is going on in the external economy and how we are performing internally.

As I look to the gross margin this quarter and also the operating profit, usually between 3Q and 4Q there is a bigger delta going into 4Q both for gross margin picking up and also operating profit. It didn’t seem to be that case this year. Was that just the timing of quarters? Was there something else that changed the sequential improvement or not?

I will try and walk everybody through the gross margin line because it is both difficult to understand year-over-year and difficult to understand per quarter. If you look at slide eight it shows the full year breakdown of gross margin what you see in there is there is a 30 point simple reclassification which has been going on all year between our SG&A and our gross margin. So year-over-year there is a simple reclassification. Then 70 points if you net the other three things together of net operational issues. In the first half we suffered from gross margin pressure from raw material costs. All year we have seen an adverse sales mix, which is really selling less durable products and we partially offset both of those by the benefit of cost savings. When you run into the fourth quarter the adverse mix still continues and the reclass from SG&A still continues so neither of those things changed. The price/cost equation became favorable but it is not as significantly favorable, it is favorable by around 50 basis points year-over-year and then in the benefit and cost savings we have seen a lot of the benefit as you got into the second half of last year with the underlying restructuring that was going on. We did get a slight benefit but it was largely offset by an increase of about 40 basis points in our freight and distribution costs which to achieve the service levels we had spoken about and our need to get those under control. So there is less favorability in the fourth quarter than you may have assumed. I have tried to step you through why that was.

What are your expectations for both currency and for category growth this year? I am trying to understand as we look at the top line guidance with the recent strength of the dollar and then also what your share gains will be to offset the category declines?

From a foreign exchange point of view as we tried to explain the big impact on us is just translation of our results. Back in December when I put together this year’s business plan I was expecting something like a $9 million benefit. If I used two days ago results I would be expecting only a $4 million benefit. Even at today’s exchange rates we would still get a benefit in the P&L from just translation. I do not personally expect today’s exchange rate to maintain through the year. I think the dollar is going through some short-term strength and things will settle out as the year goes on and it will become slightly more favorable. So anywhere between $4-9 million of favorable benefit in FX depending on which exchange rate you wish to choose.

We think organic growth for our business is going to be in the low single digits which we think is going to be just based on what people have said externally so far, several points better than what the industry is expecting.

Because we are going to take share and that is the fundamental reason we think we can do better than the industry. We have taken share.

The next question comes from the line of Arnold Ursaner - CJS Securities.

My first question relates to your on-time delivery rates. I know that is another one of your goals. Where do you think you were in Q4?

We were at or above all of our customer expectations. We actually in situations where we have contractual commitments from our largest customers we bonused from those customers based on our execution.

My second question relates to gross margin. Relative to my model at least if I had been told you had much better volume I would have thought you had much better margin. You did highlight three factors. One was reversals of some programs or program accruals, lowering some price points internationally and product mix. Could you perhaps try to quantify those three buckets and give us a sense of the magnitude of each of the three?

Not crystal but I will try and give it to you in the highlights. If you went back to Q4 of last year, in Q4 of last year we did not forecast the big reduction in the volume that occurred in Q4 of last year. So from Q4 of last year we did true up customer programs that had been accruing all year based on the higher level of sales than they achieved and therefore we had a favorable benefit in Q4 last year. I don’t have that same favorable benefit this year because people have come in where we expected them to be. Year-over-year I have an adverse in price effectively [inaudible] and as I mentioned earlier the net delta between price and cost of goods is favorable still year-over-year. Notwithstanding that it was less favorable than may be it was expected to be because although I am favorable on a cost of goods point of view I am adverse on a price point of view. So the net of those two is favorable by about 50 bips but if you go back to Q3 we had a much more favorable price versus raw materials equation and so anecdotally the lack of the credit we had in the previous year is probably about 50-60 bips. Freight and distribution is an adverse cost year-over-year by about 40 bips. Therefore although we have achieved the service levels and did get some bonuses that net effect is still adverse for us and the reason for that is fundamentally we are not as efficient as we need to be in terms of doing that. That is a combination of just making sure we focus on the customer first and we get our cost base right in the long term. It is going to take a little longer to get our cost base right. I have forgotten the last point. I am sorry.

Product mix.

In terms of product mix, that is the same as it has been all year. That is running at about 100 basis points adverse.

Looking at your gross margin view for the upcoming year I know you are obviously expanding dramatically in the mass channel and I think some of the relationships you have with customers they want you to do the manufacturing but they would prefer to do the distribution and logistics. I am assuming you have a lower gross margin since you are not recovering the freight and distribution which can be 10% of your business. Is that embedded in your guidance for the upcoming year?

Yes it is. What I said earlier is all things being equal if we weren’t planning to take additional share we would actually over-exceed our own targets for gross margin.

Another question I have is related to how the accounting treatment for the reversal of furloughs. Where did that hit in Q4? What line item?

It actually hits both. It hits partly in cost of goods and partly in SG&A. It depends on where people work. The majority of it hits SG&A.

The $15 million or so of incentive comp for the executive team, was any of that paid? Did you reach the goals you needed to in 2009 to pay any of that and if not what is embedded in 2009 [sic] guidance or views?

We achieved about $1 million of management incentive performance accrual in the current year which was modest. So we met our own internal guidance in order to do that. Next year obviously is a much bigger delta. Just looking at normalizing to next year I will give you the high level items within there. What you have in terms of normalizing incentive payments and normalizing pay is it is about $13 million to normalize our base pay and things like 401K and those types of programs which is adverse hitting the SG&A. Then about $13.5 million of incremental increase in incentive payments assuming we hit the upper end of our own targets and so there is about $27 million of adverse costs running into next year’s SG&A on a full basis. What will offset that is basically lower anticipated raw material costs, cost savings we have achieved and the small benefit that we get today from FX. If you take today’s FX rates and use the smaller number that adds up to about $26 million. So the two of them offset each other which is what we have said before but there is about a one point improvement in gross margin and a one point increase in SG&A as a result.

So to be clear, the $13 million to normalize base pay has already been implemented. Those are programs in place, the return of 401K, salary increases, is the $13.5 million incremental for executives embedded in the view you have expressed?

Embedded in the view I have expressed. Obviously in the first half of the year the normalization of pay and benefits will be a drag on the P&L. So there is an impact in the first half to second half on how these things fall but in fact it is surprising how things offset each other in different quarters so there is a minimal impact in most quarters as it transpires.

But on the 13.5 incremental executive incentive, again since you are more back end loaded normally in your business wouldn’t that be a heavier hit in the first of the year in terms of results?

That will actually be a heavier hit in the second half of the year. The way we have constructed the incentive plan which is subject to board approval still the way we have proposed it to them is it looks more like an exponential curve. So the majority of the incentive gets accrued when we achieve the results we expect to achieve.

On mass channel, I know you have expressed your view, you do have several contracts that will be ramping up during the course of 2010. Can you freshen up what your expectation for revenue from these new mass contracts is for 2010 and how we might expect the timing of the ramp on that?

We haven’t provided any guidance relative to that. I think our expectation is for that channel there is $50-60 million of opportunity. We think it is going to be dependent on our execution. We have loaded the two category wins we have had at Wal-Mart, we are in the process of loading Target. From an execution point thus far we are doing a terrific job and we like the sell through.

The next question comes from the line of Derek Leckow - Barrington Research.

As I reflect back on the last couple of years the most encouraging thing I am seeing here is the improving relationships with customers. As you said this was the bottom of the cycle, we are improving these relationships now to a point in time when volumes were very low. I wonder to what extent is that translating into better visibility of your customer ordering needs and what sort of volume increases should we see as it relates to these specific improvements?

I appreciate that. We think the same thing. I think in tough times if your customers aren’t rooting for you then you don’t have any chance of being successful. I think the positive thing is all of our customers are rooting for us at this point in time. I think the other thing is I think the environment for all of our customers is extraordinarily competitive and one of the things we are excited about is we started discussions with all of them a year ago about the fact that we felt like we had to play a larger role in helping them sell our product; how they positioned it in their retail operations, how they positioned it on the web, how they positioned it in front of their direct selling organizations, how they positioned it in their catalogs and our job was more than just to sell them products at a low price. Our job was to help them sell product. Frankly that message has been extraordinarily well received. I think all of our customers are beyond the field of dreams mentality of if we build it they will come and they believe they have to take larger ownership for selling product. The simple message we have is we have a much smaller set of products and categories to focus on than they do and we should be able to bring expertise in terms of how to position the product, what the end consumer actually wants, what the latest innovations are relative to the product, what the relevant price points are and what the margin expectations should be. Neal spoke earlier about one of the increases in our SG&A is the fact we are adding strength to our marketing team to help us be a better provider relative to that level of service.

If I could follow-up on that then, I am wondering to what extent you have better visibility now, getting better information and data from your customers who consider you a key supplier. How has that improved? Is that translating right now into a replenishment of your inventory, removal of some of these competitors who have moved into some of your key categories? Just if you could elaborate on that portion a bit. Neal, on slide 7 if you could elaborate on the impact of price next year as well. You are introducing new products that would be at higher price points that would help to give us some lift from price next year as well.

The answer to the first quarter is we are more closely aligned with our customers and we are sharing more information and in fact we are acquiring more information from external sources about our products and categories and how competitive they are than we have ever done before. We are feeding that back to our customers. Do I believe that it has had a huge impact or a meaningful impact at this point? No I don’t. Do I believe it will going forward? Yes I do. When we go compete now we are competing on a category basis, not on a product specific basis. I think that approach has helped both us and our customers. We have meaningful joint exercises in process with all of our customers to improve both the effectiveness and the efficiency of our organizations to help us help them sell more and to help us provide the product to them at lower cost and share in that benefit. Our customers were a huge part in whatever success we had in 2009 and they will be going forward as well.

In terms of price, as I have expressed many times, a lot of our pricing in the international markets is linked to currency. Given the current volatility it is very hard for me to give you an answer to how much that is going to be an impact. We did lower prices in some markets. In other markets the favorable price benefit has roughly offset the cost of goods increase we have seen. Today that may not be true. Pricing is an ongoing negotiation in all of our international markets and is more movable because of currency than any other issue. In terms of underlying raw material costs, we are seeing some starting increasing pressure particularly on freight shipping costs which everybody is seeing. So last year the benefits we had been seeing in international freight rates has been offsetting from commodity cost increases and now that has flipped around. Negotiations with customers are ongoing over where to set pricing for all of 2010. At this moment going into 2010 we will actually see negative pricing running through the first half of the year. It is really because we have seen the currency drivers in our international markets.

The currency that is holding it back right now, then you talked about re-engineering some of your new product activities. I wonder if there is a volume component you might be able to share with us on new products?

We have spoken about the fact we have picked up $50-60 million of share for 2010. We do have more new products which we will launch during the year. A lot of those will really drive share gains for the following year. But you always get the opportunity in both computer products and in mass channels to get earlier placement. There are opportunities for us to still pick up share next year. A lot of the share gains we got this year were because of the new products we have launched. It is very hard to segregate new products from share gains because the two tend to be very linked. I think the key thing is our objective is to renew the vitality of the ranges we have over time. So we have an aggressive plan to do that.

The next question comes from the line of Arun Seshadri – Credit Suisse. Arun Seshadri – Credit Suisse: First, your revenue growth trajectory in 2010. How should we be thinking about which quarters in 2010 you actually expect to show revenue growth?

There are two drivers of revenue growth you should think about. One is the underlying business and we are talking about the underlying business growing at a very low rate. So that is fairly even throughout the year but with a little back-end load for additional share pickup in the second half of the year. The bigger driver of our top line in the short-term is going to be foreign exchange moving year-over-year and obviously that has a much bigger impact in the first half of the year than it will have in the second half. In fact, if you took today’s exchange rates it would go adverse by the fourth quarter. So I think that the important thing is I am not going to forecast FX because I can’t. It is not in my control. I think our underlying business is fundamentally slow growth, with a back-end load. Arun Seshadri – Credit Suisse: Could you update us a bit on your private label strategy? I know you have been doing category management. Update us on that and how the Wal-Mart trials are going. Where do you think private label ends up as a percent of sales over the long term for you?

Our private label right now represents a little bit less than 4% of our sales in an industry that is running about 25%. So it is a small percentage of our sales right now and it has actually declined over the course of the last 18 months because it was probably a little north of 5% 18 months ago and we have converted some private label work that we were doing for customers to branded product. Our expectation is that we want to compete on a full category basis which means we do want to supply the opening price point. We do appreciate you can’t do it the way you have historically done it, if you can’t get a full program load then you have to do things both in terms of the materials and how you design the product and how you deliver the product and the logistics associated with it and take costs in order to make money in that part of the set. We really do have a fundamental belief if we do our job and our job is our products have to compete on a cost basis, on a global basis and that we have to innovate the product line that buying branded product from us is a better solution for our customers than creating a private label strategies and solutions of their own because of the working capital associated internally in their organizations to do that. We have been consistent about that message. We have been very competitive in the line review process throughout 2009 and we have demonstrated both in the products we have introduced into the marketplace and the three-year product roadmaps we have shared with customers across all of our categories what our intentions are in terms of innovating a product line that we are a supplier they can count on. I think people get concerned when they hear us talk about private label as we are going to blow up our margins. We don’t believe that is true. We just think it is a component of the services we need to provide to our customers to be a full line product supplier. Arun Seshadri – Credit Suisse: So I can take that to mean that generally versus today the 4-ish% of sales, you don’t expect major movement in either direction there and if you do it is a complimentary thing to your overall business, right? Is that the right takeaway there?

That is the right takeaway. I think if it does anything it will slightly trend upwards but we don’t see it as being particularly dilutive to our margins. Arun Seshadri – Credit Suisse: Obviously you expect to generate $50-60 million of cash in 2010 and you stated you are going to de-lever. How exactly do you plan to de-lever? Do you essentially plan to buy these various bonds back? If you could remind us what is your restricted payments basket as of now as you buyback the subordinated bonds?

In terms of how we deal with leverage, my point of view is leverage is really a net leverage position net of whatever cash we have on the balance sheet. It is our intention to actually increase the amount of cash we have and hold on our balance sheet in the short-term and part of the reason we intend to do that is fundamentally we need to win back supplier confidence that we are a business that can always pay them. Part of what we lost through our own financial issues is the confidence of some of our vendors who still today can’t get debt insurance on their receivables from ACCO. So we need to change that so we have the normal relationship with our vendors. So we today have a restricted payments basket that allows us to buy back $25 million of our sub-notes. At this moment in time the use of the cash I have on the balance sheet will be to fund the normal cash outflow that exists in Q1. It is that cyclical nature of our business and we will generate cash particularly as we go through next year in the fourth quarter is when most of our cash will get generated with the new cycle of interest payments because although we will generate cash in Q2, what it will largely do is pay off whatever ABL balance we end with in Q1. Q3 is fairly neutral from a cash point of view and Q4 is really when the annual cash is generated. It is a good question but it is maybe three quarters premature.

The next question comes from the line of Karru Martinson - Deutsche Bank.

When we talk about all these market share gains we are targeting for the year where are they coming from? Are you replacing a competitor? Are you taking it from private label? Where are we getting all of these gains?

Frankly it is a combination of a lot of things. It is broad in terms of geographic coverage. We won as much business or nearly as much business in Europe as we did in the U.S. It came across a variety of product lines. Some of it was competitive win backs. Frankly some of it was stuff we had lost over the last several years because of our own performance. We do think there remains significant opportunity out there. We have targeted half a dozen opportunities we are going after in line reviews in 2010 which in aggregate are significantly more than the business we won in 2009 and we just feel like we are both a better supplier and a more competitive supplier than we have been in a long time.

In terms of the line reviews what is the typical time frame for the industry?

That is starting to shift. Historically Europe has been in front of the U.S. but several of the suppliers in the U.S. are going to a continuous stream of line reviews that start earlier in the year and last until the fourth quarter. I think that is kind of in evolution at this point.

In terms of the weakness in Europe, how has that been split out versus the outlook for the year?

That is worth calling out. If you look at our major markets around the world they are in very different places. The best performing economy we have traded is Australia. We have had two quarters there now consecutively where our business has grown. In the U.S. by contrast, we are really bumping along the bottom would be my description. It is not getting any better and it is not getting any worse. Within Europe there is a bit of a division. We have seen the U.K. market start to show signs of stability. Mainland Europe is still showing signs of deterioration so our own belief is that Europe won’t stabilize until the middle of the year. We are not assuming that Europe is on the same timeline as the rest of the world. It seems to be the laggard in this cycle.

Circuit City is now out of the numbers, correct?

It was in Q4 significantly. It was the major driver of the computer product declines but it has no impact in Q1.

There are no further questions. At this time I would like to turn the call over to Mr. Robert Keller for closing remarks.

Thank you all very much for your participation. We are excited about the opportunity and we appreciate the challenges in front of us. We think we are better prepared and better positioned than we have been in a long time to deal with them and we are looking forward to talking to you at the end of the first quarter about our progress. Have a great day.

Thank you for your participation in today’s conference. This concludes the presentation. You may now disconnect. Have a wonderful day.