Welcome to Avery Dennison’s earnings conference call for the fourth quarter and full year ended January 2, 2010. This call is being recorded and will be available for replay from one o’clock pm Pacific Time today through Midnight Pacific Time February 3, 2010. To access the reply, please dial 1-800-633-8284 or 402-977-9140 for international callers. The conference ID number is 21438865. I would now like to turn the conference over to Mr. Eric Leeds, Avery Dennison’s Head of Investor Relations.

Our discussion today will reference the earnings release that we issued earlier along with the slide presentation titled fourth quarter 2009 financial review and analysis. Both documents were furnished today with our 8K and posted at the investor section of our website at www.Investors.AveryDennison.com. We remind you that these results are preliminary as we have not yet filed our 10K. Our news release references GAAP operating margin which includes interest expense, restructuring and other charges included in the other expense line of our P&L. Also referenced are transition costs associated with acquisition integration. Restructuring charges and integration transition costs tend to be fairly disparate in amount, frequency and timing. In light of the nature of these items we’ll focus our margin commentary on pre-tax results before their affect and before interest expenses. This detail is in schedule A2 to A5 of the financial statements accompanying today’s earnings release. We also remind you that we’ll make certain predictive statements that reflect our current views and estimates about our future performance and financial results. These statements are based on certain assumptions and expectations and future events that are subject to uncertainty. The Safe Harbor statement included in the documents that we provided today along with our 2008 Form 10K address certain risk factors that could cause actual results to differ from our expectations. On the call today are Dean Scarborough, President and CEO; Dan O’Bryant, Executive Vice President and CFO; and Mitch Butier, Corporate Vice President Global Finance. I’ll now turn the call over to Dean who’s participating remotely.

Well 2009 was really a tail of two halves, the first half of the year unprecedented with a steep drop in our revenues and very difficult earnings trajectory followed by a much improved second half of the year and I’d like to just thank all of our employees for an exceptional performance in probably one of the most difficult economic environments we faced in a number of years. We ended the year with record free cash flow over $450 million. It enabled us to reduce debt by $300 million in the second half while still continuing to invest in new markets and emerging growth opportunities and we made great progress as to our end of 2000 debt reduction target of at least $350 million. Now, we had a major effort last year on reducing our fixed costs and Dan will go through some of the details on our restructuring program which is still undergoing and will likely conclude in the second quarter of this year. We made strong productivity gains and in fact operational working capital as a percentage of sales was at its best level in over four years. Our second half inventory turns were at their highest level in three years and we saw solid margin improvement in the second half over the first half over the first half with the first quarter gross margins 2.3 points higher than the fourth quarter of last year. It was really all about our ability to raise and maintain prices to reduce costs including both raw material and our fixed costs of operations. Now, in the fourth quarter our operating margins were a bit lower than we expected really for two reasons, one was we lowered our inventories by a very aggressive amount which caused us to take some fixed cost…

(Operator Instructions) Your first question comes from George Staphos – Bank of America Merrill Lynch. George Staphos – Bank of America Merrill Lynch: Dan, I wanted to go back to Slide 16 and maybe start with more of a nitty gritty question, can you elaborate on the first bullet point how that should work in to our models for the course of the year both in terms of what you’re saying for the first quarter and for all of 2010? Then I have a couple of follow ons. Daniel R. O’Bryant : It’s a technical detail but a relevant one particularly in the quarter. The 53rd week that we added was added way back in Q1 but it pushed the rest of the year forward obviously and that meant that this year’s Q4 had more impact from the holiday season than we normally would have expected. I think we cut last year off at the 26th of December or something and so we had that extra week so it is purely an estimate, it doesn’t impact everything globally but it looks like to us it was a little over a 3% impact on sales and it had some negative impact on the margin in the fourth quarter as well. When we get in to the following year that comparison won’t be relevant anymore to us because we’ll be starting obviously the year fully engaged in January so this should be the final time we have to talk about that. George Staphos – Bank of America Merrill Lynch: Does it make for perhaps a sequentially, well sequential is not the right term, a year-on-year stronger comparison in the first quarter of ’10 versus last year?

The first quarter of ’10 versus last year it will make it a little bit weaker on the top line because there’s one less week of sales but it was a soft week that was lost but on the bottom line it would have a negligible impact. George Staphos – Bank of America Merrill Lynch: Some maybe broader questions, in office products obviously there are understandable reasons why the business has been up again down again but the performance that you saw in the fourth quarter does it suggest that maybe the business is taking a secular down shift that we need to be aware of was it purely in your view a cyclical phenomena related to white collar and corporate purchasing? Daniel R. O’Bryant : Well George there are secular headwinds in the business that have been ongoing, first class mailing is a big application category for us and that’s continuing. The major impact though is white collar employment and an inventory destocking. I think the inventory destocking is pretty much done so given where white collar unemployment is I think it’s going to take a while for us to see a change in that trajectory, I don’t think it’s going to come back fast. George Staphos – Bank of America Merrill Lynch: So it sounds like the major change in the fourth quarter was the destock effect. Obviously, we’ve been going through white collar employment reductions for a while now, would that be a fair characterization? Daniel R. O’Bryant : Here’s the way I would look at it, destocking is probably not exactly the right term So it sounds like the major change in the fourth quarter was the destock effect. Obviously, we’ve been going through white collar employment reductions for a while now, would that be a…

George, it’s a good question. We continue to fund a number of our investment programs during the year, Japan, RFID, some new developmental materials in our pressure sensitive materials businesses and then in office products where we’re going to launch some new products because we feel we have some real opportunities there. We’re not going to go crazy here, we’re going to invest prudently and frankly, we’re still focused on the productivity to enable us to pay that. I think most of the new spending and marketing is simply a shift in resources and some of it is investment in new people and new marketing folks in some of our geographies and in some new verticals. Frankly, I think it’s prudent for us to do that and as the economy begins to recover it will give us more acceleration as we come out of it. But, we’re going to balance this the right way and continue to make the right decisions both in the short term and in the long term. George Staphos – Bank of America Merrill Lynch: I guess just the point I would make and the return required and the investment now that you’re making is a lot higher than presumably it would be down the road. I hope you’ll get a good return on it. I’ll turn it over.

George, let me just add to that the number does on a reported basis spike up quite a bit in the quarter and looking down at the components some of it is currency, about $10 million of that, it’s up $40 million from the run rate of the first half of the year, a big chunk of that is currency. The fourth quarter had someone offs in it, the bonus accruals that we talked about $15 to $20 of that hit the SG&A line. We also had an unusual quarter in a couple of other areas. We did a fair amount of tax work this quarter which is going to have a lot of benefit on our tax rate going forward as we repatriate cash and so on. So it was high, we’re sensitive to the fact that it was high. I don’t think it’s going to stay that high it will come back down a bit but the key part of this that will continue are some of those investments that Dean talked about, that part won’t go away. I think we’re going to be somewhere between the $325 number and $335 or $334 on an ongoing basis rather than the number we had in the fourth. I hope that helps.

Your next question comes from Ghansam Panjabi – Robert W. Baird & Co., Inc. Ghansam Panjabi – Robert W. Baird & Co., Inc.: Just based on the strength and your fresh cash flow and your comments on inventory, it sounds like you might have run the quarter for cash maybe a bit more so than normal. Can you confirm that in fact was the case and is there a way to quantify the impact on EPS?

I think we’ve quantified kind of the major impacts. One of it was the change in the bonus because we did as you recall the beginning of last year we changed our incentive programs to emphasis free cash flow, not totally but the teams did a really good job because of that and I’m glad they did. I think this level is sustainable and it’s the result of literally hundreds of projects in factory and plants and businesses all over the world and I think people definitely overachieved their targets. So that was a big impact and the fact that inventory did fall again, it caused us our fixed charge compliment to hit the P&L as well. It’s not something we had anticipated. Ghansam Panjabi – Robert W. Baird & Co., Inc.: Just given the raw material costs environment can you just update us on pricing across your businesses?

We announced in the pressure sensitive materials business we announced price increases in the fourth quarter for 2010. Today, we announced a price increase for our roll materials business in the United States, in the Americas actually and also looking at a couple of other businesses are reviewing the options right now. So we definitely see an uptick in raw materials cost which is not surprising so we’re going to get out there and raise prices.

Your next question comes from John Roberts – Buckingham Research. John Roberts – Buckingham Research: When the dividend was reduced earlier this year I thought one of the primary reasons given was that in the event of no recovery in 2010 you were facing maybe having to finance a pension contribution in 2011. Have you had a chance to refine that now that we’re maybe getting 12 months away from it? Daniel R. O’Bryant : Well, we did accelerate the pension contribution that would have been due in the US in 2010 in to ’09 so we made a $25 million contribution last year that was not required. I think this year we’re going to do something similar and between the US and foreign markets there’s probably about $50 million that will go in. We’ve seen an improvement obviously in the pension assets but we’ve also seen a reduction in the discount rate so our obligations haven’t changed materially and in 2011 we will still see the cost of our US pensions in particular rising. John Roberts – Buckingham Research: I thought it was north of $100 million in 2011? Daniel R. O’Bryant : It’s not that high. It’s a couple hundred million spread over the years between now and 2013, $200 to $300 million. So the pension cost now might be in the $25 million range for US pensions can ramp up in to the $70 or $80 million range per year. John Roberts – Buckingham Research: You indicated you took some market share in office products. Where would that have been in the office products mix and why would that happen?

Basically I would say mainly it came at the expense of private label most of it. But, as we look at the number customers are paying for value and our product provides great value. Some of our direct customers frankly have decided in some categories that private label just didn’t make as much sense so they’ve simply devoted a little more shelf space to some of our branded products. John Roberts – Buckingham Research: Private label provides pretty good value doesn’t it?

It’s all in the eye of the beholder. John Roberts – Buckingham Research: Is it a shift upwards to a higher price point that is going on? It just seems a little inconsistent with the marketplace.

Facts are facts and we took a little bit of market share and I think there just wasn’t enough traffic on some of the private label products because customers weren’t buying enough.

Your next question comes from Peter Ruschmeier – Barclays Capital. Peter Ruschmeier – Barclays Capital: A couple of questions, just to clarify perhaps Dean if you could the fixed cost absorption that occurred related to the inventory piece, how much was that piece that you incurred?

It was about $7 million year-over-year impact. Peter Ruschmeier – Barclays Capital: On your price hikes you mentioned it went out today, can you quantify what the price hikes are and can you elaborate on how confident you feel on those prices increases helping to offset whatever kind of cost squeeze you might be facing?

To be honest, I can’t remember the exact price range. I think it’s in the mid single digit range. I’m pretty confident, a couple of other competitors have already announced in the same space. Customers are not happy but they’re also not surprised. Peter Ruschmeier – Barclays Capital: On the raw material cost side broadly speaking do you feel confident these prices can more than offset any price pressures you’re facing?

Yes, that’s the goal. We don’t want to lose margin. There is sometimes a bit of a gap in terms of how quickly we can get our prices up versus how fast raw materials go up. It’s interesting, if the economy really does heat up I would expect that gap to be a little tougher. I think if we had 5%, 6%, 7% growth rates in that scenario raw material costs would start to accelerate pretty rapidly so it could be a little bit of a damper on us as we move forward. Peter Ruschmeier – Barclays Capital: Maybe just a quick one for Dan if I could; terrific working capital performance, I’m curious as you look to 2010 you’ve provided some guidance for free cash flow what have you incorporated in your thinking in terms of whether working capital is a use or source of cash? Daniel R. O’Bryant : I think our first objective is to sustain the significant improvement we got this year. Fortunately, it’s not all a Q4 event, through the year we saw improvements in inventory and other areas so I feel good about the way it’s been implemented. Our objective will be to sustain it, I don’t anticipate another big slug of productivity on the working capital line next year. Having said that, if we do hit the higher end of the sales line the kinds of numbers it might reabsorb would be in the tens of millions of dollars. I don’t anticipate anything that would take us back where we were. I think it is primarily, predominately sustainable productivity.

Your next question comes from Jeffery Zekauskas – JP Morgan. Jeffery Zekauskas – JP Morgan: In the talk about bonus accruals as I understood it you said that they were up, I don’t know $25 million or so year-over-year. What were they up sequentially? Daniel R. O’Bryant : It wasn’t nearly that, probably about a third of that number sequentially. Jeffery Zekauskas – JP Morgan: I’m a little puzzled as to the magnitude of the cost reduction in that your SG&A expense sequentially went up about $18 million and your cost of goods sold was basically flat and your revenues were down a little bit. So, if some of the SG&A inflation has to do with the bonus accruals, where’s the net cost savings and how do you measure it versus the third quarter? Daniel R. O’Bryant : Well specifically in the G&A area there was some productivity, it was a few million but it wasn’t a huge jump sequentially quarter-to-quarter. There were currency impacts, some of the discretionary spending that Dean talked about was incurred sequentially not just year-on-year, that was a few million again.

There’s a mix impact too Jeff. The businesses that have the highest margin had the softest sales in the quarter relative to Q3. Jeffery Zekauskas – JP Morgan: In terms of working capital improvement, at least by my calculations from your previous quarter press release it looks like your receivables went down $90 million and your payables went up $40 and those seemed to be the largest changes that boosted free cash flow. How did the receivables come down so much? Were incentives offered to the people that had to pay them or how did you do that?

We didn’t have any incentive specifically around receivables but we did on cash flow so a number our businesses had initiatives for the year to improve it. Particularly in Asia, we did a great job over there collecting in a difficult environment. I take my hat off to the folks that are in that end of things, they did a good job. Our losses in a tough economy have been extremely low and they did a good job of managing through this. There s a seasonality factor to some extent here or perhaps a better set of timing factor because last year we ended the year on late December, this year we ended the year early January so some of what I said about sustainability of working capital is related to that timing. We did get some collections the last couple of days the fiscal year that were right in early January. It wasn’t a big number, I think most of this was driven by several days improvement in our DSO. Jeffery Zekauskas – JP Morgan: In your slides you say that you are going push your cost down net by about $70 million year-over-year. So you’re SG&A is around 12.69 so if that grew 3% that’s about $38 million so half of $70 is $35 so is the goal to keep your SG&A expense flat year-over-year next year? Daniel R. O’Bryant : No, because the first half of ’09 where we ran about $300 million a quarter was really below any kind of a sustainable level. We stopped traveling, we did things that you just can’t do for very long. We did it at the time we needed it, it helped the cash flow. But, I think next year we’re going to have a normalized rate that’s in that $330ish kind of range. It gives us some room for growth investments on top of what we’re doing and if the economy is really soft we’ll be able to pull down from that number as well but I think more sustainably with the initiatives that we now need to throw a little fuel on the fire for it’s more likely we’ll be in that $330 range give or take. Jeffery Zekauskas – JP Morgan: Last question, the margin change in office products was pretty remarkable. Do you see that as an eccentric value? How do you think about the general level of office products going forward?

Well, I think they are going to be a little bit lower than they have traditionally. We still have really good productivity from that business. When you look year-over-year our sales were down quite a bit and we’re going to invest incrementally some more money on marketing dollars to try and grow the top line so that’s going to cost us a few margin points for the next 18 months or so until we can sure up and start to get some growth in the business. Daniel R. O’Bryant : Let me add to Jeff that single biggest factor in the quarter, that sequential drop in the margin was volume related. Some of that is seasonal and then we talked about a strong Q3 going in to Q4, we were down 16% in sales sequentially. So most of what happened here was volume related and the volumes have been picking up relative to prior year but they’re still pretty negative. We need to see the consumer come back just a little bit there and hopefully see some inventory build.

Your next question comes from [Joseph Niya – UBS]. [Joseph Niya – UBS]: I was wondering if you could quantify kind of to the extent you saw inflation creeping in the fourth quarter, what kind of magnitude did you see? Daniel R. O’Bryant : I’m not going to get too particular here because we’re in the middle of raising prices in a number of places and any comment I make will be so generalized it may conflict with some of what we’re saying to specific customers in specific units that don’t look like the average. But, having said that the raw material impact in the fourth quarter was in the 50 to 70 basis point range on the margin but it is building. There are a lot of announcements and price increases that were in the process of being given by our suppliers that aren’t yet in the fourth quarter it was just the beginning of a wave. [Joseph Niya – UBS]: Just kind of taking a step back, you touched on this earlier, what kind of sentiment are you picking up from your customers? Are you seeing any kind of change or improvement in their outlook? What kind of feedback are you getting there?

Well, it depends on the customer of course. When you talk to customers in emerging markets they are all pretty happy, especially in Asia. Things are looking pretty rosy there so it’s pretty much fantastic. I think in the retail sector I see more optimism. Most retailers improved their gross margins this year in the apparel section mainly because they kept their inventories down and therefore they didn’t have to mark down product as much. They did see a little better Christmas season than they had expected so definitely more optimism there. The key question is how much inventory are they going to put in to the system next year and at least I don’t anticipate any more destocking in that sector so I would say they are cautiously optimistic. In the pressure sensitive business it’s kind of a mix bag, we still have a number of businesses in that sector that are economy related. In our graphics business it’s more related to promotional activities and corporate rebranding activities, not a lot of activity there yet in terms of selling although there’s talking. I think in pressure sensitive there’s kind of cautious optimism in the roll business. I think I said this at the end of the last call, when I was at the Label Expo Show in Brussels I was surprised how optimistic the label converters were there. We recently had a meeting with some of our North American customers and they were I’d say moderately optimistic so not as enthusiastic as people in other parts of the world. [Joseph Niya – UBS]: Then just on China, clearly that’s been a real nice positive for you guys. There’s been some concern around the government kind of stepping back and pulling away some of the stimulus there. Have you seen or heard anything that gives you any pause?

Well again, in the pressure sensitive business our business there tends to be driven more by domestic demand with arising middle class. I think even in our worst quarter in that business last year, or I can’t remember when it was now we had one quarter or two that were flat growth and then it rebounded pretty quickly to double digit. So, I don’t really anticipate a whole lot. The export business is still good going out of China and I anticipate that will be better certainly than last year. You just never know though, the government over there needs to employee people so I think they will probably leave more to a stimulus and be cautious about ramping back too quickly.

Your next question comes from John McNulty – Credit Suisse. John McNulty – Credit Suisse: In the pressure sensitive market, can you give us some clarity as to what may be going on in terms of the competitive environment and if the industry as a whole seems to be disciplined right now with pricing now that raws are starting to go up or if there is still a little bit of slippage and how we should think about that going forward?

John, I think last year it seemed to me that most of the companies in the industry were trying to improve their margins and that I think has been the most important thing. I sense that going forward as well especially for a lot of the smaller competitors. They probably don’t have as easy access to credit market as we do or [UBM Rafeltak] does. I think their sources of capital were saying, “You guys need to make some money and protect your margins.” I anticipate this environment continuing on to be honest. It seems to me when raw material prices go up now everybody is implementing price increases. John McNulty – Credit Suisse: Then a question on your guidance, I understand it is tough in this kind of economic environment to nail down exactly what sales growth or volume growth is going to look like but the two ranges you put out one of them included an organic sales scenario where you saw flat sales. Considering that you saw huge inventory destocking at the customer level in 2009 what possible scenario could get you to have a flat organic sales line for 2010? Or, is there a business that may have broken throughout the recession where we should just be thinking about it differently going forward?

I don’t think you should take that as we’re concerned about at flat year or trying to project anything in that. It’s just a different discipline we’re employing basically at the bequest of the board to bracket out our scenario planning so that we have levers to pull in case something really bad happens or things get a lot more positive. I think it’s just more of a planning exercise and scenario. Frankly, let’s face it it’s a bell curve. I think zero is pretty improbable, the only way that could happen is if we went in to some kind of major economic crisis or double dip recession and I don’t anticipate that happening today. On the other hand, there’s not a 0% probability that would happen either. John McNulty – Credit Suisse: With that said and knowing that there is a lot of variables out there, what is your best stab at what you think your organic sales could be in 2010? Not nailing you down to a specific number but –

Let’s face it, the first half of the year is going to look great because the comps will be incredibly easy but the real question in my mind is what’s the back half of the year look like? Is this economy going to be sustainable, there has been a lot of government stimulus in a number of economies, will that continue? Will the feds start to tighten up in the back half of the year and will that cramp demand? And, if they don’t will we see rapid inflation? There are a lot of factors and variables that I say are impacting us and basically my attitude is look let’s plan on a moderate recovery and if things don’t go the way that we plan, we know what levers we have to pull and we will do it immediately. Daniel R. O’Bryant : John, I hope what you take away from this was the intent to not try and target anybody in. If we had used three to five I think everybody would have assumed the three was guidance and we’re trying not to do that. The economy is going to be a real swing factor on revenue this year and either the low end or the high end of that range implies some impact of the economy beyond what’s within our control. But, the focus here though and the reason we use the scenario planning for the board is to demonstrate that free cash flow is going to be solid either way and we don’t have any liquidity issues or anything like that, we’ll be able to support all of the growth initiatives and other things. Free cash flow ought to be the focus coming out of that.

We certainly don’t anticipate a meltdown in one of our businesses so there’s no signaling implied there.

Your next question comes from George Staphos – Bank of America Merrill Lynch. George Staphos – Bank of America Merrill Lynch : Just a last question again on the level of investment spending, would it be fair just using your comments and what you’re suggesting SG&A can look like, M&G can look like for next year, that the level of reinvestment in things like marketing and admin behind the businesses is around $30 to $40 million? And, if that’s a fair assumption how would you generally parse that across your segments? Daniel R. O’Bryant : In total that’s about right George. The greater part of that growth related spending, there is some infrastructure spending. The infrastructure part is primarily related weighted in to two places RIFs where we continue to pull these businesses that are spread around the world from a systems perspective so a good part of our capital spend for the year, not a majority or anything but a significant of the capital spend is supporting IRS and some of that is their systems. The roll materials has also had a capital project going on and their systems frontend that will wrap up during the next 12 months or so. Most of what is infrastructural is related to the level of IT spend going on and those projects. Some of it is pension, we’ve got a fairly good slug of pension increase going on year-on-year that’s relevant as well. But, half to two thirds of this is related to growth initiatives and some of the new platforms coming out of a couple of our businesses. Some of that is in the roll businesses, they have got a couple of areas of growth that Dean spoke about, office products is doing some so it is spread around but a lot of it is related to the infrastructural part, to IT initiatives. George Staphos – Bank of America Merrill Lynch : But that infrastructure part wouldn’t necessarily be showing up in MG&A would it? It would be obviously in your cap ex and IT spend or is that incorrect?

Some of it is but there is still ongoing expense that happens basically on the SG&A line when you put some new systems in. George Staphos – Bank of America Merrill Lynch : How much are you actually putting in to office products? I realize it’s not your biggest segment, I don’t want to belabor it but just out of curiosity?

The incremental investment is in the mid single digits million I’d say on an annual basis but the amount of spend for marketing initiatives is actually higher because what we’ve done is actually figure out a way to repurchase other costs in the business, not eliminating them but just shifting them to more growth activities. George Staphos – Bank of America Merrill Lynch : Last question and you’ve answered similar questions over the course of the call but I guess one question I would have is how did your end of the quarter progress? Did you see December continue to trend higher versus earlier months in the year? Did you see a slowdown as the year wound down? What kind of trends are you seeing early in the year and in particular if you’d focus mostly your answer on the pressure sensitive business and RIS business in the US and in Europe? I realize RIS is more Asia.

RIS actually kind of sailed right through the quarter. I would say continually strengthening through the quarter. Pressure sensitive slowed down at the end of the year but that’s normal so I didn’t sense any unusual trends there. I think those were probably the two major momentum factors. The other thing that is a little more complicated is that our last two weeks of the year were both holiday weeks which is a little unusual. So all-in-all everything was a little week ending the year but we expected that. George Staphos – Bank of America Merrill Lynch : And January has started out reasonably in line with your expectation?

Yes, especially considering how bad January was last year so the comps are incredibly easy.

Your next question comes from [Temple Houston] – Prudential Investors. [Temple Houston] – Prudential Investors: You have done a good job, I guess you paid down $300 million of debt and I think your original target was to pay down $350 by the end of 2010 so I wondered if that implied that you’re only going to pay down an additional $50 million this year or maybe you’re going to pay down a little more than $350? Daniel R. O’Bryant : I think what you should take from that is that goal is out the window. We’ll be establishing a new goal with free cash flow in the $300 to $350 range next year we would expect to pay down again, a substantial amount of debt and be approaching our debt targets late in the year, late third or fourth quarter. We generate all our free cash flow in the second half of the year because of seasonal factors so we expect to hit our targets late in next year and we are well on course to do so. We really superseded the previous objective. [Temple Houston] – Prudential Investors: Could you just remind me what those targets are? Daniel R. O’Bryant : Well, we haven’t set any targets specifically but our overall objective is to get our credit rating back where it was. We were downgraded about a year ago and it is important for us to keep access to commercial paper markets which we have today so we’d like to see the rating go back up. I think we can hit ratios that the agencies look at late in 2010 and be able to sustain that level and have free cash flow beyond debt repayment at that time for other purposes, particularly returning money to shareholders.

Your next question comes from Peter Ruschmeier – Barclays Capital. Peter Ruschmeier – Barclays Capital: Just a follow up, I was curious if you could help us to better understand the impact of capital spending from your customers coming down in the last 12 months and how that’s impacted you? Then obviously on the flip side to the extent that you’re talking to your customers who are indicating plans to increase their cap ex to facilitate more demand for some of your PSM and retail RIS products?

I’m not sure I completely understand the question. I think most in the pressure sensitive area again, I sensed a pick up, and I don’t have any data here but I did sense a pickup in terms of the amount of activity with the printing press manufacturers that our customers buy. This is more anecdotal than anything else but in talking to a few of those executives in our industry, they seem to be more optimistic. But that being said of course, the first half of the year was an absolute disaster so from a comparative basis it is a little better. Still healthy investment levels in emerging markets though with press capacity being added there. RIS of course is not really a factor, the apparel industry is not a capital intensive business so they can kind of turn on and off, sewing machines aren’t very expense, they can kind of turn things on and off at will. Peter Ruschmeier – Barclays Capital: So not to put words in your mouth but it sounds like maybe it is from your perspective less relevant whether or not they are placing more orders for printing press as to whether that is really impacting your business directly?

It’s hard to do and here’s why, there’s been a lot of investment in digital technology, especially in the printing industry because it’s more productive in running short runs and [inaudible] capability and so some customers, including ourselves, I mean we run a lot more of our RIS business across our digital presses than we have some of our older offset presses and our volumes are still down we’re just able to still process those lines at a different productivity level. It’s a proxy for business confidence but not necessarily a proxy for increased demand short term. Peter Ruschmeier – Barclays Capital: Just some quick housekeeping items, I think you indicated that the cash cost related to the restructuring I believe you said was about 70% of the $160 million so about $110 million and I think that you said $70 million was incurred in ’09? Do I have those numbers right? Maybe you have maybe another $40 million of cash cost left to be spent in ’10 from the restructuring you’ve done to date? Daniel R. O’Bryant : I think cash charges in total you’re right, approximately $110 million. What we took in ’09 was about $87 million. Peter Ruschmeier – Barclays Capital: Then just lastly, Dan the non-cash pension expense that hits your income statement I believe is around $36 million in ’09, can you confirm that’s the right number? And then, what’s that non-cash pension expense expected to be in ’10? Daniel R. O’Bryant : We’re expecting the expense to go up $10 or $12 million next year. I think we talked about the cash before but the non-cash part just the accounting charge up about $10 to $12 million.

Your next question comes from Jeffery Zekauskas – JP Morgan. Jeffery Zekauskas – JP Morgan: Just two last things, in other specialty converting in the third quarter you made $6 million and in the fourth you lost $5 million so you had an $11 million change and your revenues I think were down at about $11 million. Can you talk about what happened with that business? Daniel R. O’Bryant : The numbers are relatively small in the business units and can move around a bit. There were a couple of unusual charges in the fourth quarter that hurt earnings. The revenue was down sequentially about 8% of this business so again I guess the biggest factor was fixed cost leverage and there were some mix issues so there was about half of it was unusual things that don’t repeat, the other half was either mix or fixed cost leverage on lower volumes. Jeffery Zekauskas – JP Morgan: Then lastly, in pressure sensitive materials, basically your revenues were flat sequentially but your operating income went down $20 million. I guess some of that was bonus accruals and some of that was raw materials. Is that all of it or some of it? And, how are you doing in reducing costs in that business?

Jeff there’s some mix too. I think some of the businesses that have higher margins were a little softer in the quarter than in the third quarter. I think our cost reduction, I mean the gross margin improvement year-over-year especially if you look the first half to the second half has been phenomenal actually. Our gross margins in that business is as high as they’ve been in the last three to four years. We finally recovered all that raw material inflation that we lag. We’ve taken a lot of fixed cost out of supply chain and so I actually think it’s in pretty good shape right now. So a little volume will go a long way in terms of driving good returns on that business. Daniel R. O’Bryant : I think too Jeff although the reported numbers were flat organically it was down a little bit more than that probably more like 3% instead of the -1% sequentially so you get some leverage issues, bonus accruals. We talked about raw material inflation being around 70 basis points of the margin compression and mix so it was a variety of things, nothing real specific other than the bonus which was – you know their half of the company they generated the vast majority of that extra cash. Jeffery Zekauskas – JP Morgan: Then I guess lastly, you’ve seen roughly a month’s worth the new quarter, so how are we tracking versus the first quarter of ’09 in your various businesses?

I am so reluctant to forecast the year even the quarter based on three weeks of data. I would say it’s slightly stronger than – you take out the holiday weeks that we had so it’s a little bit stronger than what we saw existing the fourth quarter but to be honest I never get confident until late. A lot of companies still have close downs at the end of the year and they reduce their inventories and the first month or six weeks a lot of time it just kind of recovering from that. I just don’t know what the steady state environment is going to look like.

Mr. Scarborough there are no further questions at this time. Please continue with you presentation or closing remarks.

Thank you very much for attending the call today. I just want to close by recognizing our employees. They did a fantastic job managing to the key objectives this year especially with free cash flow. We’ve got our costs down, our variable margins up and we’re starting to turn our attention towards growth. We’re going to keep a disciplined eye on our investment levels. We are going to invest some more because it makes sense. We’ve got strong market shares in all of our key businesses and look forward to talking to you all again at the end of the first quarter.

Ladies and gentlemen that does conclude he conference call today. We thank you for your participation and ask that you please disconnect your line. Have a great day everybody.