Ladies and gentlemen, thank you for standing by and welcome to Avery Dennison’s Earnings Conference Call for the First Quarter ended March 29, 2014. This call is being recorded and will be available for replay from 12:00 pm Pacific Time today through midnight Pacific Time, April 27th. To access the replay, please dial 800-633-8284 or 402-977-9140 for international callers. The conference ID number is 21676581. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. (Operator Instructions). I would now like to turn the conference over to Mr. Eric Leeds, Avery Dennison’s Head of Investor Relations. Please go ahead, sir.

Thank you. Welcome, everyone. Today, we’ll discuss our preliminary unaudited first quarter 2014 results. Please note that unless otherwise indicated, today’s discussion will be focused on our continuing operations. The non-GAAP financial measures that we use are defined, qualified and reconciled with GAAP on schedules A-2 to A-4 of the financial statements accompanying today’s earnings release. We remind you that we’ll make certain predictive statements that reflect our current views and estimates about our future performance and financial results. These forward-looking statements are made subject to the Safe Harbor statement included in today’s earnings release. On the call today are Dean Scarborough, Chairman, President and CEO; and Mitch Butier, Senior Vice President and CFO. Now I will turn the call over to Dean.

Thanks, Eric and good day, everyone. We had a solid start to 2014. Our playbook is working. We are delivering mid single-digit organic sales growth driven by emerging markets, innovation and share gain. We are executing productivity actions and driving capital efficiency. We are improving returns and we’re returning cash to shareholders. Organic sales growth came in at the high-end of our expectations for the quarter, driven by Pressure-sensitive Materials growth outside the U.S. specifically the Labeling and Packaging Materials business continued to benefit from strong growth in Asia and South America as well as solid growth in Europe. Performance Tapes also delivered another strong quarter. However, consistent with recent quarters, we did not see as much of the benefit to operating profit from PSM’s incremental sales growth as we generally expect. We had some headwinds in the quarter that drove higher than expected manufacturing and SG&A expense. So, our operating margin for PSM came in a bit short of expectations for the quarter, given our relatively strong top-line results. We're very pleased to see the acceleration of top-line growth for our highest return business. And we'll continue to take actions to drive productivity as modest improvement in our flow through will drive even greater value creation. Retail Branding and Information Solutions delivered another quarter of strong earnings growth inline with our expectations for both top-line and margin expansion. Growth continues to be the strongest with our Europe-based retailers and brand owners and in the performance athletic and fast fashion segments of the market. RBIS remains on track with its profit improvement plan. The business has made excellent progress in executing its footprint reduction strategy and other key productivity initiatives. As you know, we target a [ballpoint] of margin expansion for this business each year through 2015. The consistent execution of our marketing and operational strategies has kept us on track to achieve that objective. So again, a solid quarter for us overall, but while I'm generally pleased with the progress we made in the first quarter, we won't be satisfied until we achieve all of our long-term goals. We'll be providing more detail on our opportunities and strategies within each of our key businesses and providing new financial targets through 2018 during our Investor Meeting in New York on May 21st. I hope you'll be able to join us. Now, I'll turn the call over to Mitch.

Thanks Dean and hello everyone. We had another solid quarter with 5% organic sales growth and a 10% increase in adjusted earnings per share, driven by higher than expected volume growth in Pressure-sensitive Materials and continued margin expansion in the Retail Branding and Information Solutions. Adjusted operating margin in the quarter grew 40 basis points to 7.1%, as the benefit of our productivity initiatives and continued solid top-line growth more than offset the negative impact of higher employee-related expenses. As part of our productivity initiatives, we realized approximately $10 million of restructuring savings in the first quarter and incurred about $7 million of restructuring costs. Our tax rate in the first quarter was 18% reflecting benefits of discrete items. Our adjusted tax rate for Q1 was 33% inline with our expectations as we continue to anticipate the full year tax rate to be comparable to last year. Free cash flow from continuing operations came in as we expected with the net outflow of the $155 million reflecting seasonality and the timing of capital needs. We continue to expect to deliver free cash flow in excess of $300 million for the year. With net debt to EBITDA at 1.4 times, we remain below our long-term targeted leverage position, with ample capacity to continue to return cash to shareholders over the coming years. And we will continue to do so in a disciplined manner. Along these lines, we repurchased an additional 1.2 million shares for $59 million in the first quarter more than offsetting dilution and paid $28 million in dividends. Looking at the segments; Pressure-sensitive Materials sales in the first quarter were up approximately 6% on an organic basis exceeding our expectations. Both Label and Packaging Materials sales and the combined sales for Graphics, Reflective and Performance Tapes were up mid…

Thank you. (Operator Instructions). Our first question comes from the line of Scott Gaffner from Barclays Capital. Please proceed.

Good morning

Hi. Good morning Scott.

Hi. Just wanted to dig a little bit deeper on PSM on the contribution margin, came in around 10%. You mentioned mix before, I think last quarter; can you talk about the mix of sales, is there something else as far as headwinds that maybe go away, I think you’ve seen you might have talked about anticipating at some point, can you just add a little bit more color there?

Sure. Actually the mix trends are less negative, so we did see a positive impact of that sequentially. But we did run and I hate to blame the weather, but we could run into some weather related problems during the quarter. We had 13 plant days of no shipments and therefore to hit customer service requirements had cost us a bit more money, we have some currency impact. We had some extra expenses that went the wrong way for the quarter. So normally we have puts and takes in the quarter and this year we had a few more takes than puts.

So, when we look at the targets you’ve outlined so far, I mean you did say at the last Analyst Day, I think you updated since then 9% to 10% operating margin for this segment. These headwinds that you are facing you think you are more cyclical and more one-time in nature, are they secular trends that are difficult to overcome?

I don’t think they are secular. The business operated over the target range for three quarters last year, we're still at the top of the target range. We are certainly trying to grow the business faster, this is a business that operates at a multiple of the cost of capital, so growing at faster makes some sense. Some of that growth has come with slightly lower margins, but it’s still value creating and we did have a few more bad guys this quarter I think then we normally would have expected and I do expect the weather to be much better in the spring than it certainly was in the winter.

Great. Agreed. And then just from the sales perspective, looking at you said combined sales for Graphics, Reflective and Performance Tapes is up mid-single digit. And if I go back I guess to all the way to 2Q of last year, has that particular portion of PSM has grown quite nicely? Would you consider that a leading indicator for the company or is there a different sub-segment within the company that you would look at as your leading indicator, because the growth there does look relatively strong over the last three to four quarters.

I really think Label and Packaging Materials is the best leading indicator. And there we had good growth everywhere except for North America where we were disappointed, but honestly that was more weather related than anything else. We don't have market data yet for the first quarter, but the trends we saw from the market data and showed strengthening trends over the last two quarters of last year. So, for me it's been a net positive. Our Tapes business has been executing extremely well with very nice growth and a lot of that is just crisp execution of their growth strategies for both the personal care business and our industrial tapes business. So we feel good about that but I wouldn't consider that to be a leading indicator.

Okay. And then just lastly, I mean you said in your opening comments, off to a solid start for the year, is the playbooks working, organic growth came in at the high end of the range. And yet we see the stocks down considerably today. Is there something that you have been talking to investors about that's been a big disappointment here in the quarter for the year? And then just to add that the PSM, I mean it sounds like some of this is, it's fleeting overtime. Anything you can point to that is causing some concerns?

No, actually I am disappointed with the stock price drop this morning of course, I think everyone is. We are pretty much right on track for the year, I think where -- we felt like we could have done a little bit better, but again we had several kind of one time events and that hurt us a bit but fundamentally the business is seem to be clicking on, I would say 7.5 (inaudible) cylinders if there is such a thing. And market demand looks pretty good. I feel very good about the organic growth. And we are holding our guidance for the year. As you know we generally don’t change our guidance after the first quarter, it does tend to be, it is our weakest quarter of the year, so it’s hard to draw the trend line. And we saw strengthening coming through the quarter. So you are probably in a better position to understand stock price movings than we are. I can only guess that past few quarters we have been beating and consensus number by a penny of two and this time we came in under, even though we don’t give quarterly guidance, I know some investors track those numbers pretty closely.

Thanks, Dean.

Sure.

Our next question comes from the line of Ghansham Panjabi from Robert W. Baird & Company. Please proceed. Ghansham Panjabi - Robert W. Baird & Company: Hey, guys. How are you?

Hey, Ghansham.

How do you do? Ghansham Panjabi - Robert W. Baird & Company: Good, thank you, thank you. Can you first off quantify that (inaudible) weather impact on the first quarter obviously, it impacted a lot of companies in the sector and out of the sector as well, just hoping to get some sort of [quantitatively] on that from you?

Sure, Ghansham. I guess let me comment about the three components I mentioned, I mention about the price inflation gapping a modest headwind and headwind from the currency and then also from the higher cost in North America which a good portion of that was weather, each of those had a $0.01 to $0.02 impact within the quarter. And if you look at which ones of those will actually reverse out immediately going into Q2, there is $0.02 that basically will come out right away and that we are working to manage through the rest of them as well. Ghansham Panjabi - Robert W. Baird & Company: Okay. So it was pretty considerable. And then in terms of margins for PSM, 2013 was pretty strong, 2Q and 3Q in particular from an operating margin standpoint, just given some of the mix issues and some of the productivities you have lined up for this business, do you expect margins to be up year-over-year for this business assuming the mid point of your range in terms of sales growth, sorry?

Yes, Ghansham, we don’t give segment guidance but let me just talk a little bit about what we are doing this year. We are trying to accelerate our growth rate which makes a lot of sense, it’s value creating for business with its high returns. The second thing is we are executing a major restructuring action in Europe closing the factory that will cost us some money this year on the expense line, but we are doing it to make ourselves more competitive and therefore it should definitely see some improvement than in our operating margins for 2015 and beyond. So we are going to obviously give a lot more color to that as we talk about our targets in May. One other factor here is that our graphics and tapes and reflective businesses have higher than average margins and we have an opportunity to grow those businesses a bit faster so that’s another real positive. Ghansham Panjabi - Robert W. Baird & Company: Okay. And just one final one on RBIS in terms of the geographic sales breakdown between the two major regions there?

Still stronger in Europe. We are actually -- I should say European-based retailers and brands because obviously some of those companies in the fast fashion, in performance athletic have global footprint. The U.S. was negative, when you take out the impact of the RFID, our customer, it was low single-digit positive. And what we see in the U.S. frankly is again good performance in the performance athletic area but some of the mass merchandise business hasn’t been that good and I think it reflects somewhat consumer sentiment. Fortunately, we did start to see a apparel sales for customers start to rebound, in the March timeframe I think most of apparel companies have reported pretty good results. So, we’re hopeful, but the one thing I am very pleased with though is the amount of margin improvement we were able to drive even with a relatively low organic sales growth rate in the quarter. Ghansham Panjabi - Robert W. Baird & Company: Okay. Thanks so much.

Sure.

Our next question comes from the line of Anthony Pettinari from Citigroup Global Markets. Please proceed.

Good morning.

Good morning.

Hey, Anthony.

Just following-up on the European restructuring. I was wondering if you could give us any color on how costs will flow through the year and how operating margin improvement is that something that we should think of is really being back-end loaded? And if you can, in terms of the plan closure in the Netherlands that you [Technical Difficulty] timing on that?

Sure. Anthony you broke up a little bit towards the end, but I think your question was around timing of the European restructuring when we see the saving. So one thing I will say is savings are going to be next year, so there is no real restructuring savings in 2014, it’s in 2015. And then we have some transitioning cost when you implement a big restructuring like this. And that will hit Q2 or Q3, the timing of this is still being worked through as we’re going through the process of announcing the plant closure.

Okay. That’s helpful. And then you tightened up your organic sales growth guidance, but your full year earnings guidance is unchanged; and I guess that’s a fairly wide range 8% to 19% earnings growth. As you look to the rest of the year, I’m just wondering what would be the major factors that would swing you potentially to the upper-end or the lower-end of that range outside of just volume and demand growth?

Yes. I think a lot of it again has to do with the organic sales growth, and I think that pretty good proxies for that still a pretty wide range 3.5 to 5. The number one question we always had in the second quarter is the lengths and strength of the second quarter ordering season for apparel. And it’s something we just don’t have a lot forward visibility to. And to a certain extent that has a fairly that will have a big impact certainly on the second quarter, which is a fairly strong quarter for us.

Okay. And then maybe just a last question, dovetailing on that. As you look through the first three weeks of the month, what have business trends been like and order trends been like in RBIS and PSM?

It is pretty much as we expected and certainly inline with our guidance. Again, it's always a tricky period it’s three weeks, we have had Easter in there. And I’d say fundamentally, they are okay. The one thing we just don't know especially for RBIS is the length of time that the strong ordering period will start. I mean if you look at the whole company, we started off slow in January, little better in February, March was quite strong. And our order rate has been just fine for the first three weeks of April, but again, trying to predict that out. It's how, the end of May early June look is, it's just hard to do.

Okay. That's helpful. I'll turn it over.

Sure.

Our next question comes from the line of Jeffrey Zekauskas from JP Morgan Securities. Please proceed.

Hi, good morning. It's Silke Kueck for Jeff. How are you?

Hi Silke.

Were all of the $10 million in cost savings in the RBIS segment?

The vast majority were in RBIS, yes.

Okay. And secondly, I was wondering how your raw material cost are trending like your paper cost, your propylene cost, like it seem to us like a little bit of like a headwind in the first quarter, which would make sense because propane prices moved up, again now a downward moving. So, I was wondering maybe you had some comments on that?

Yes, sure. So this is one of the areas where we've seen a little bit of a shift that I commented on around the modest headwind from the price inflation gap. And we've been talking about experiencing inflationary pressures for the last few quarters. And it started materializing a little bit more in Q1 than we had seen previously. And while we are seeing the pressures are coming in [adhesive] components, as well as in paper, paper is a profit, all time right now at least for long time. So that’s where we are seeing the pressures and we are working to offset that through procurement actions, further productivity reducing the material content of the products we produce. And so, and then what we can’t offset that will be evaluating price adjustments and so forth. Again pretty modest in the quarter, we are feeling the pressures it did go again just a couple of cents in the quarter.

How much pricing that you get generally in quarter if any?

We got through the pricing, so you really have to look at it region-by-region. We’ve talked in the last quarter about some additional surcharge that we are putting through North America those went through as far as the -- we have a lot of pricing in emerging regions, links to currency movements, so that’s just offsetting the movement in imported, higher import cost of raw materials in those regions. But those pricing are all going through, but overall pricing it’s a competitive situation and that’s where things are. But hope -- generally again pricing and raw material inflation is relatively neutral what we’ve seen over the last number of quarters, this time I want to guess just a couple of sense, so not significant, but a little bit of a shift.

Last question, of the $0.01 to $0.02 and whether headwinds maybe $0.01 to $0.02 you know raw material price headwinds. Do you think you will make, you can make all of that debt in the second quarter or maybe you would make up half of this and then the other half in the third?

No. So, I think some of that’s what goes out immediately for the things like weather and so forth, a couple of sense we should be cover immediately going in the second quarter others we’ve got a work through and address between Q2 and Q3 and work to offset.

One comment I would make is that quarter came in pretty much right at our expectation and our planning. So, I would say that if you sense any disappointment other than the drop in the stock price, it’s really about we felt that we probably could have performed better in the quarter. Now from our internal planning and modeling perspective, we came in right where we thought we would.

What I would say when I look at my model I saw that in terms of mix sales I saw that Pressure-sensitive would have done better and RBIS a little bit worsen I saw and that sort of like would happen and then for profit performance was different what was expected before, there was very little margin in Pressure-sensitive can you explain why and RBIS did so much and I guess that we also captured the cost savings? And then I guess going forward, I am assuming that the majority of the cost savings for the year also will be captured and RBIS, have I understand that correctly?

Yes. And next year you will see a shift towards PSM again because of the European restructuring. That’s absolutely right, Silke.

Can I ask one more question on the cash flow statement if I could? That have a very large work, a negative working capital number in the quarter, I mean I understand there are inventory builds early in the year. Does some of it also relate to like some again bonus payments that get done or why is that number so large in the first quarter?

Sure. So, a couple of comments, if you are asking seasonally why is free cash flow always negative in Q1, there is a couple of reasons for that, part of it just the way seasonality of the business so December sales are depressed relative to other months and so when we collect cash from those sales in Q1 that’s lower than. So that’s one reason. The other is incentive compensation payments as you say happen in the first quarter as well. So that’s why seasonally Q1 is always a negative. As you saw we had a pretty bigger outflow this year than we had last year, few reasons for that. One is if you recall last quarter I mentioned just because of the year-end timing basically 2013, about $30 million I said moved from the first weeks of what we normally see in the first few weeks of the year into year-end ‘13. That was $30 million, you can see the CapEx timings another $20 million. And the rest of it is around just working capital timing and a key piece of this is around the receivables as far as moving around that, part of that is geographic mix, our terms are longer in the emerging markets where we’re seeing the most growth. Part of that was timing of sales within the quarter, as Dean said, higher sales growth in March than we saw in the first couple of months, so that moves the working capital as well. So we are seeing a little bit of a shift there. Again free cash flow came in as expected and I think the key thing here is we are not seeing any increased risk from a bad debt exposure or anything else. You can actually see that in the financial statements as well.

And do you still expect to buyback like I don’t know 5 million shares this year?

Well, our estimate for the average amount of shares outstanding for the year is 97 million given that we usually have 2 million, but the math would get you to roughly 5 million so.

Okay. Then thank you very much for the clarifications. And I’ll get back into queue.

Sure.

Our next question comes from the line of George Staphos from Bank of America Merrill Lynch. Please proceed.

Thanks. Hi guys good morning.

Hi George.

How are you doing? Couple of things, one are you in a position at this juncture to talk about what the savings might be in Europe from the capacity realignment?

Yes. The savings next year is expected to be around $15 million.

Okay. Thank you for that. And then in Europe incremental margin in RBIS this past quarter was exceptional because you were getting all of the restructuring savings, obviously a lot has been driven by volume, but if we can hold normal levels of volume whatever that might be say certainly no worse than what we saw in the first quarter, should we continue to see stronger than normal incremental margin in RBIS the rest of 2014 from what you can see right now?

I think George, it depends on the sales growth of course we always had headwinds. So we get, if we get growth above 1.5% or so, we have really good pull through.

Yes. I think the thing to focus on is overall we’ve had expected and we have a full point plus of EBIT margin expansion both in ‘14 and ‘15 to be able to hit our targets. And we are expecting that full point for this year. You saw we had a little bit more of that in Q1, any one quarter can have a little bit more or less than that just timing of when marketing expenditures can come in one year versus the other and so forth. So I think that point that we’ve been talking about the right proxy overall for the year.

Okay, understood. I’m not trying to get month-by-month, quarter-by-quarter margins and target, but you had 100% incremental margin in a quarter where you didn’t really have your normal revenue growth rate in RBIS, so it was exceptional. So just trying to see if that we should continue to expect better than average margin expansion there and I appreciate the color there? Can you talk at all about what, there were some capacity closures in Pressure-sensitive Materials in North America, what if any effects that’s having on your business in customer base this year if at all, do you have any view on that right now? And similarly, I noticed that one of your peers is expanding capacity in Asia, any initial views on whether it might have a negative effect on you this year, probably not, but in the next couple of years?

George, yes. In North America, anytime a company announces a closure of the factory, it’s generally an opportunity to go after some business, because customers are forced to re-qualify material. So, certainly we probably had more than the average number of phone calls about security of supply et cetera, et cetera. So, I think that could be a small upside for us in the balance of the year. But I don’t think it’s going to be anything hugely material to us, just given the relative size of that plant versus our business. In Asia, it’s been 10 years since our competitor put in a big new asset. So, I’m not surprised that after 10 years, they have got to add some capacity. they’ve taken out capacity in Australia and South Africa. And so, this is really a regional add, it’s not just a country add in China. And in the meantime, I’d just comment, we’ve added several new coding assets during that period of time. So, given the growth in that market over there, it’s not really surprise. And I don’t anticipate any major disruption in our business in Asia in the last couple of areas. Our customer surveys indicate that and especially in that region which you know is very high growth says that we have still quite an edge in terms of product quality and service over all of our competitors. And we expect to maintain that as we go forward.

Okay. One question more and I will turn it over and come back in queue. Obviously you can’t talk about your day-to-day changes in capital allocation policy depending on which way the stock is going. But given that the stock has done fairly well here in the last few months getting to date for a minute. How do you view the attractiveness of buyback incrementally from here relative to dividend, can you update us on your thoughts on dividend policy? Thanks.

So on dividend George, we have a Board meeting tomorrow and that’s the meeting where the Board decides on the dividend increase. So we will let everyone know tomorrow in a press release. As far as timing of share buyback et cetera, we don’t comment on that specifically. But I think given our track record, how do I look at it, I look at as pull back in the stock as a buying opportunity frankly.

Yes. So George, when we go through that assessment, we have a number of things to evaluate as we think about pace of share buyback, the biggest one is just our assessment of intrinsic value, and then we basically look around volatility of the stock over time. And when there is more distance between the stock prices, meaning the stocks trading at more of a discount to intrinsic value, we buy more and we buy less as it gets closer, so that’s how we think about it.

Okay guys, thanks for the call. I will come back.

Our next question comes from the line of Rosemarie Morbelli with Gabelli & Company. Please proceed. Rosemarie Morbelli - Gabelli & Company: Thank you. Good morning all.

Good morning. Rosemarie Morbelli - Gabelli & Company: Could you touch a little on your increasing employee expenses, are your hiring these people in order to push the growth you’ve talked about during the call or is it just your inflation; could you give us a better feel as to what is happening there or what happened in the first quarter and what do you expect for the balance of the year?

It’s all wage inflation, 90 plus percent of it, Rosemarie. So we have and as we have talked RBIS has relative to their size more wage inflation than the Pressure-sensitive Materials but that’s what it is. It’s not any large investments or anything else that we are doing, we are not asking to add back any shifts or anything around for capacity, so we are -- it’s all wage inflation. Rosemarie Morbelli - Gabelli & Company: Okay, thanks. And you have [listing] advantage medical, and I know it is small, but you have a target of above 5% operating margin and we are obviously nowhere near that. Could you give us a feel as to where that margin is going to come from? And you only have one and half years to get to it, are you changing your outlook?

Well actually, we changed the segment because we had our DES business was a substantially larger business and certainly had some nice profitable business which we sold last year and we never updated the guidance for that segment. We will update investors in the main meeting but I will say we expect the asset to be profitable next year in 2015. Rosemarie Morbelli - Gabelli & Company: Okay. And you’ve talked, if I may ask one other question, you talked about the extra week in the fourth quarter adding 1%, I am assuming it is to revenues; is that 1% to the fourth quarter revenues or could it be because of the timing, a number that could be as large as 1% on full year revenues?

So, it’s 1% for the full year, and it all comes in the fourth quarter, so it will be about 3.5%, 4% impact on Q4 itself. But we do not include that in our organic sales growth guidance and when we talk through it, so we basically exclude the impact of the extra week. Rosemarie Morbelli - Gabelli & Company: Okay. So that should translate into a positive supplies as we get into that quarter or do you expect some offsetting numbers which is why you’re excluding it?

No, so we excluded just on the top-line just to show what the true underlying trends are. And from a bottom-line perspective, I think that’s what your question is, we do not expect us to have much of an impact at all on the bottom-line. So normally adding a week, you’d normally expect a 2% lift for the full year, we’re only saying one because the week that is being added for the year, it’s week essentially between Christmas and New Year; it’s a very soft volume week. And so the variable margin we have on those sales are really just enough to cover the fixed cost. Rosemarie Morbelli - Gabelli & Company: Okay. That is very helpful. Thank you very much. And just summarizing, you are expecting the full $20 million of savings in 2014 to hit RBIS results and you already have 10 of that in the first quarter and then next year you expect the full 15 million to hit PSM results?

Yes, the plan is $15 million next year and it’s $40 million is the full year number for restructuring in 2014, which we received roughly $10 million in the first quarter. Rosemarie Morbelli - Gabelli & Company: Thank you. Thanks a lot.

You are welcome.

We have a follow-up question from the line of George Staphos from Bank of America Merrill Lynch. Please proceed.

Hi guys. You had mentioned that there were three buckets if you will of more takes if you will this quarter, past quarter than puts that were in, price cost, FX, and weather related cost, correct me if I may -- I’m often any of that jargon. You said that you’d be able to begin to see $0.02 reversal in the second quarter which mostly around weather and that you’d work around capturing the rest of that over the rest of the year. Now I can understand price cost managed by reduced cost to trying to improve pricing but on the FX side what else might you be doing on the internal rates pricing more quickly than the FX affect on EBIT.

So the couple of cents that go away immediately relate to the we said higher cost in North America manufacturing cost, of which a good chunk of that was weather that will go away immediately. And of course, the FX will be another piece that is expected to go where there is quite a bit of volatility near the end of the quarter, more than you normally see. And we have hedging practices in place, we manage that but on the front, you always have a little bit of movement. And we are sure it’s not something we normally comment on and that’s what Dean’s point was as we always have things, puts and takes and there were just more of them going in one direction. So a portion of that is going away as well. So $0.02 we expect to be gone right away, the other item we’ve got to work through.

Understood. Just a related question, I didn’t take from your comments, did not take from your comments that the competitive landscape has changed or the negative rollup to the amount of price cost compression that you had in the first; from my experience of covering here that’s bought a variety of type of compression, you see one if the costs are growing up, there is normally some lag time on pricing. But correct me, if I’m wrong, aren’t you would back seeing more competition than normal, your markets aren’t a walk in the park, I recognize it. But are you seeing more competition than normal and in fact you are signaling that?

No, I wouldn’t say, there has been an increase in intensity in the competitive landscape. In fact, market overall market growth, I would say in Pressure-sensitive certainly has been better. That’s been helpful. We’ve been taking market share fairly consistently across the board. So, I don’t really sense and it’s always competitive. But I don’t see a shift.

Understood. Dean, last question I had for you, you mentioned trying to improve the flow through, the incremental margin if you will in the Pressure-sensitive business. What specifically are you doing to try to affect that? Are you changing incentives to the sales force to try to incentivize sales of higher margin products? What are you deliberately now going to pursue the less margin rich volume, to a lesser degree than in the past? What, how are you trying to implement that? Thank you guys and good luck in the quarter.

Thanks George, and good question. The sales force is incented for part of their incentives in Pressure-sensitive for selling a richer mix. So, certainly a component of that in their pay. We are focused on higher margin categories of product, a lot of our innovation frankly is designed around products that have higher value and therefore a higher flow through. So all of those things are underway. And in fact we did see a shift from the fourth quarter to the first quarter, unfortunately it was offset by things like weather and currency and a little bit of inflation. So the areas where we targeted and focus were showing progress and now given us I would say somewhat shift in the environment, we will just take some additional actions.

Thank you.

Mr. Scarborough, there are no further questions at this time, I will now turn the call back to you. Please continue with your presentation or closing remarks.

Thank you, our playbook is straight forward and it’s working and we are going to continue down this path. Innovation will continue to be a hallmark for our businesses, further strengthening our industry leading position in all of our key markets. With modest top-line growth, ongoing productivity improvements and highly disciplined capital management, we will continue to drive double-digit earnings growth and solid free cash flow, most of which will get back to shareholders. I look forward to speaking with many of you at our meeting in May. Thanks for joining us today. Good bye.

Ladies and gentlemen, that does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines. Have a great day everyone.