Greetings and welcome to the Greif Inc. First Quarter 2012 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Debra Strohmaier, Vice President, Corporate Communications for Greif Inc. Thank you Ms. Strohmaier, you may begin.

Thank you, Kevin and good morning everyone. As a reminder, you may follow this presentation on the web at Greif.com in the Investor Center under Conference Calls. If you don't already have the earnings release, it is also available on our Website. We are on Slide 2. The information provided during this morning's call contains forward-looking statements. Actual results or outcomes may differ materially from those that may be expressed or implied. Some factors that could cause the results or outcomes to differ are on Slide 2 of this presentation in the company’s 2011 Form 10-K, and in other company SEC filings as well as company earnings news releases. As noted on Slide 3, this presentation uses certain non-GAAP financial measures, including those that exclude special items, such as restructuring charges and acquisition-related costs, and EBITDA before and after special items. EBITDA is defined as net income, plus interest expense net, plus income tax expense, less equity earnings of unconsolidated subsidiaries, net of tax plus depreciation, depreciation and amortization expense. Management believes that non-GAAP measures provide a better indication of operational performance and a more stable platform on which to compare the historical performance of the company than the most nearly equivalent GAAP data. All non-GAAP data in the presentation are indicated by footnotes. Tables showing the reconciliation between GAAP and non-GAAP measures are available at the end of this presentation and in the first quarter 2012 earnings release. Giving prepared remarks today are in order of speaking, Senior Vice President and CFO, Rob McNutt; and President and CEO, David Fischer. I will now turn the call over to Rob.

Thank you, Deb. Please turn to Slide 4. During the past two years, we have been actively involved in building a foundation to execute the next phase of our growth strategy. This has involved 20 acquisitions, which included some smaller tuck-in acquisitions that reinforce our core and strategic acquisitions that have set the base for three global growth platforms Flexibles, reconditioning and rigid IBCs. With those transactions completed in 2011, we are focused on integration and we are beginning to realize synergies and the Greif Business System benefits. Since July of 2011, our business leaders have been responding to market weakness in Europe and the related downstream follow-on effects elsewhere in the world by implementing contingency plans to adapt to the decline in volumes. While there are initial signs of improvement in market conditions, we expect to continue to be somewhat impacted by European market conditions in the second quarter. We are anticipating a modest recovery in sales volumes for the second half of this year. Overall, first quarter operating profit and net income exceeded our budget, with Paper above our expectations and Rigid and Land essentially on budget. Our Flexibles business was under our expectations, primarily driven by market pressures in Europe. Cash flow from operations was positive compared with same period last year, improving by approximately $75 million compared with first quarter 2011. The financial summary on Slide 5 includes key performance items on a year-over-year basis. The 5% increase in net sales to $993 million for first quarter was principally due to higher sales volumes of 3%, including 7% from acquisitions completed during the past 12 months, which offset a 4% decline in volumes on a same-structure basis. Selling prices increased 4% versus first quarter of 2011, primarily due to the pass-through of higher raw material costs.…

Thank you, Rob. Please turn to Slide 13. We are beginning to see signs of improvement following a period of challenging market conditions and are closely monitoring development. The Greif Business System continues to deliver cost savings from contingency actions implemented so far. As previously mentioned, our two key areas of focus in 2012 are acquisition integration and increasing cash flow. We are encouraged by the progress thus far. For example, in Flexible Products, we are consolidating and streamlining operations within our global network to position us to achieve increased efficiency and profitability consistent with our long-term goals. One of the key elements of this segment strategy is the fabric hub in Saudi Arabia. We expect to start test runs later this quarter, followed by initial production this summer. Meaningful contributions from the fabric hub are expected in 2013. This facility will enable us to be the lowest cost producer of fabric for flexible, intermediate bulk containers and geo-textile. Additionally, we expect the Flexible Products business to become more diversified globally in their sales mix over time. Elsewhere, we are making good progress in our global recycling and reconditioning business and our Rigid IBC business, consistent with our strategy for these two additional growth platforms. Please turn to Slide 14. The contingency actions we began implementing in the second half of 2011 so far have resulted in cost savings of approximately $15 million. We expect additional benefits over the remainder of this year. The strong cost controls we are employing address the near-term challenges especially in Europe for our Rigid Industrial Packaging and Flexible Product businesses. We will continue to adapt our contingency actions to the changing market conditions. Despite the external economic and market pressure issues that exist in parts of Europe, internally, we are focused on successfully integrating…

Thank you. We will now be conducting the question-and-answer session. (Operator Instructions) Our first question is coming from Phil Gresh from JPMorgan Chase & Co. Please proceed with your question.

Can you hear me?

Good morning, Phil, you are little bit soft, you need to move a little closer please.

Okay, sorry. Wondering if you could just kind of Dave and maybe walk around the globe and talk about the trends you have been seeing out there, are you talking about initial signs of improvements. Can you walk through the regions like you normally do?

Yeah, Phil. So let me make a couple of high-level comments first. In general, we are seeing a consistent pick up around the globe in most of our operations. As you know, we participate now as the global, largest global reconditioner in the world and that’s afforded us some insight, so a year ago we didn't have. So now we triangulate between our closure in accessory sales, our new drum, our plastic and steel, our new IBC sales and the pickup of many of those containers at various points around the world. And while it's not a quick recovery, we are definitely seeing signs of improvements and it seems to be fairly widespread. If you look at this quarter versus the same time period last year, we are still down from that time period, but for example, North America would be very low single-digits in terms of comparing the same quarter as previous time period. Latin America, mid-single digits and with Europe and A-PAC being mid-to-high single-digits down over the previous quarter of 2011.

Okay. And then, so that was for the first quarter?

And you also want the Q1 versus Q4, what we are seeing there?

Yeah, yeah, maybe just talk sequentially what we are seeing and may be just what you are seeing in February right now is anything kind of getting sequentially better as we move into this next quarter?

Yes. Sequentially from January and February, we are definitely seeing again a modest pickup, but widespread. And even within the month of February although we don't have let's say quantitative data, it appears the back half of the month was even stronger than the first half of the month in February. It was the shorter month in terms of number of days for us, but clearly the per diem orders are starting to pick up stronger. And it appears the early indication that March are continuing that trend.

Okay, that's encouraging. And then just maybe on the Flexible side, may be you could talk about that a little bit, you didn’t give the specific volumes, but if I pack into it, is it fair to say that the volumes there were down maybe around 10%. And if that's the case, the commentary that you're giving on seeing signs of improvement, are you seeing it on Flexibles as well?

Yeah, that's a good question, it was just a little less than 2010, and I'll say that one of the usual thing that we saw in Flexibles versus the rest of the businesses was that the hard stop late in the calendar year, and early calendar year, and early in the year was a little bit more dramatic in terms of our Rigid business, number one. Number two, the pickup is in fact there on a per diem basis. Again, February is a little shorter. But when you look at the shift and order patterns that are coming in, we do see the same type of pick up not only in the back half of February, but the early, early indications for March are very similar.

Okay. And then just one last question on the pricing pressure that you’ve talked about in the legacy businesses, it sounds like that it leveled off, is that the case or has it gotten any worse or has it spread anywhere else and I mean, I guess also just is it in the Flexibles as well, or is it really just on the Rigid side? Thanks.

Yeah, thank you, Phil. So those acute price pressures have updated, prices seem to have stabilize and perhaps in some regions starting to show some relief. We don't see it getting worse and those comments would apply both in the Rigids and in Flexibles. It t obviously got a little more pressure and a little more intense in the Europe over the past couple of months, but generally, we see around the world prices have stabilized and appear to be firming.

Okay. Thanks, I will turn it over.

Thanks, Phil.

Thank you. Our next question is coming from Ghansham Panjabi from Robert W. Baird & Co. Please proceed with your question.

Hey, guys, good morning.

Good morning, Ghansham.

Hey, just on same lane of questioning, can you just sort of run at the end market trends for the first quarter and also which particular end markets may have been a little bit stronger and also the inter quarter trajectory there would be helpful? Thank you.

Yeah, this is Rob, Ghansham. In terms of the end market, I mean David went through the geographies. We are seeing that - in the U.S. certainly the chemicals end markets continue to show some improvement. We have actually seen very recently, it appears that some of the chemical markets in Europe, again very early initial, but starting to show some improvement as well. Then broadly, if you go to Asia Pacific, everything shuts down for the Chinese New Year, but we've seen that snap back nicely for us really across the board.

Okay. Can you distinguish on Europe between commodity and specialty chemicals, have you started to see maybe commodities move up a little bit and then how should we think about the variances between the category itself?

So far this year, I have not seen a material difference between the two.

Okay.

I think perhaps, in terms of where they stand right now, I think we saw a little bit of start-up in the commodity segments a little bit faster, this is again all relative in specialties, but specialties are now started to come on and keep pace with that, let's say modest recovery we are seeing. And the only other thing I'd add what Rob said is that, we are in a bit of a low point right now, in Latin America, in terms of seasonality, but for some of their end-markets, but we are seeing what appears to be the preparatory type orders coming in for the coming food season.

Okay. And then on the EBITDA guidance of $500 million and $550 million, just to confirm that, that’s after about $30 million in charges and also what kind of volume expectation that you are baking in for the second half?

Yeah, that is in fact after about $30 million in charges they we set for restructuring or acquisition related costs, so it's after that. In terms of volume increase, we haven’t given a specific on guidance on what volume increase we are anticipating and not comfortable doing that, but we do anticipate Europe in the back half of the year, what I said is that, the back half of 2012 were largely near the front half of 2011.

Got it, got it, and just one final, was there any residual impact of price costing on favorable in the first quarter, I know the pricing was up 4%, but did you catch up fully on price cost in the first quarter?

Not quite but improved.

Okay, great. Thanks so much, guys.

Thank you, Ghansham.

Our next question is coming from Mark Wilde from Deutsche Bank. Please proceed with your question.

Good morning.

Good morning, Mark.

Hi, Mark.

Just to start out, is the weakness in the Flexibles market, is that going to affect the timing on the JV startup or sort of what kind of end markets, what kind of products you might be targeting coming out of the shoot?

Mark, it will definitely keep us at a lower operating rate going into the startup of the new hub, but I don't think it's going to affect the hub timing materially. We have a set schedule it's built upon a lot of factors to make the plant get up and run. And changing those has a cascading effect, if you will, that isn't really an attractive outward force, so you can't just stop operations and put it aside. I would say the Greif Business System improvements on our network have been faster and more substantial on capacity utilization improvements that we had planned, so that coupled with the hub coming on will make us more aggressively, pursue some of the business we have outside of our existing network, which is predominantly European base, so you'll see us move into the other geographies faster. It might push back Phase 1b, but I'm talking months or quarters. But we are in a state of what I would call feathering those type of capacity overlays, one thing that it has done for the freeing up of capacity and the softness in the market it has made us move faster on some of our network consolidation and some of our higher cost facility closures and bring those volumes into our lower cost existing ones or potentially the hub and number of time that fall.

Yeah, okay. Just a couple of other question around that hub, it sounded like you didn't really expect any real benefits for 2013, we just thought about the EBITDA guidance in the second half of this year, does that assume that hub is actually wind up, a little bit of a drag for you?

Yeah, Mark exactly that's typical with any start-up of a large facility. We anticipate it's going to be a modest drag on earnings in the back half of the year.

Okay. And then, Rob, when we think about it especially, the Dave's comments about looking at kind of converting outside of Europe, is that going to involve a significant amount of capital to build out say selling facilities or whatever?

Yeah, the selling facilities, the converting facilities are very capital intensive. We may use some builders and things and we have some parts on the table for that, but these are not, I mean we're talking a couple of million dollars here and there and it's within that $130 million this year that I've previously quoted as total CapEx for the year.

Yeah, so when I look at that Mark, I see that’s, it's relatively higher capital base we have in extruding and weaving a set and we have lot of runway there particularly with continued GBS improvements. So the lower capital, let's say, spoke deployments of our strategy in the various regions will be will be just as Rob described.

Okay. And then I wondered within the Rigid business, can you give us a sense of how the 10 new businesses are performing the reconditioning and the IBC is down at Fusti?

Yes, we can the Fusti business and the reconditioning business in Europe both suffered from the drawback in market conditions, the intense markets forces they were facing in latter quarter of 2011 and the beginning of 2012. In recent months, let me make one of the comment on that, for example, in the reconditioning business particularly in Europe where just the bulk of what we do, it was extremely difficult to find empty or used containers to put through either our wash network or remanufacturing network in that time period. It's a very unusual for this business to have points, no inventory, but we did go through periods where we had no inventories coming into the yards for those businesses. People were just not emptying product at that particular juncture. Now that situation has changed, we see some increase in pickups both in IBCs and in the plastic and steel drum incoming raw materials. As far as Fusti directly, again with Italy, being a big part of their business and Germany being second biggest part of their business, they did suffer from a lack of demand and significantly increased competition for their product in that same time period I described. But in the last month particularly business has picked up very nicely and we see a strong pick up for the business going forward in the coming months. And we have also been able to pick up a couple new big accounts in that business that will also help with the recovery in Western Europe.

Okay. Couple other just real quick ones. There was a corrugated medium price, I can ask by one of the smaller players in the U.S., so I wondered if you give us your thoughts on that and if Greif has announced anything.

Yeah, Greif as a practice doesn’t do public announcements, we tend to notify our customers of those on pricing issues in the corrugated side. If you look at supply demand balance in that business and we continue to have decent demand in that business in North America and I think as Asia Pacific now improving back with work and Europe appearing to be stabilizing. Our expectation is that, you look at supply demand balance now that there are certainly is some opportunity there. I also think, if you look historically as OCC prices have increased that's helped push prices historically. And so, no reason that I would anticipate that relationship to change and so as we've seen a little more pressure on OCC price here. I would expect between supply demand balance and input cost increases that wouldn’t be surprised to see prices continue to be able to move up in that business.

Okay, just the last question. It wasn't much in the way of land sales this quarter. I wondered if you could just update us on the situation with those landholding starts at Toronto.

Selling recreational real estate, that’s under a bunch of snow and ice and tough sales. But, yeah, we have and I don't have the exact numbers at my fingers Mark, I can get that for you, but around 14,000 acres up there. And we continue to market those properties and typically, seasonally those - do tend to sell a little better when you get people to them and you are not in the winter there. And so, that market surprisingly and impressively to me has been a little more resilient through the economic downturn than I had anticipated. But we'll continue to overtime as the market for that is attractive to put that out, we're not in a particular rush time schedule or poor time schedule on that, it's more reaction to market to be able to sell and get value.

Okay. Fair enough, I will turn it over thanks guys.

Thank you, Mark.

Our next question is coming from Chris Manuel from Wells Fargo Securities. Please proceed with your question.

Good morning, this is actually Gabe Hajde on for Chris.

Hi, Gabe.

Hi, Gabe.

First question is kind of around the restructuring and maybe GBS, but you talked about on the fourth quarter call about how, you'd expect a lot more of the restructuring to be in Flexibles and this quarter it seem to be a bit more in industrial, I just looking to understand if you guys have identified maybe some low hanging fruit in some of these recently acquired businesses, or if it's more related to some of this contingency plans that you've talked about?

Yeah, Gabe, I'm not sure if that time here we made that previous comment that we had fully grasp requirements of responding to the European downturn in the Rigids. Also, I have to complement our management staff; they are very fast in terms of responding to those downturns. So, while the mix of restructuring activities might be able to defer to that comment. Generally speaking, for the whole year we do anticipate collectibles to have more activity with their consolidation their footprint and shutting down high cost operations making four companies into one and last going forward in the rigid side because it’s a more mature side of our business. As many of those operations have been polished and owned for a long period of time but with that downturn in Europe clearly we had to respond in terms of taking out some of our cost structure to be on more, let’s say proper competitive footprint given the realities of what’s going to happen in Europe, what has happened in Europe is the lack of certainty of what might continue to happen there.

Okay, well and I guess to continue and piggy back off of that you identified $15 million of savings specifically relating to these contingency efforts and then presumably there is ongoing GBS savings within the business and then also you guys have another $20 million of sustainability savings. Can you help us understand I guess these kind of discrete items as a net of other you know I guess input cost increases? Because when you start adding these up they seem to work sustainable with respect to the contingency savings, where somebody is off to get to pretty good numbers in dollars.

So let me try to take those in pieces and Rob could chime in if I miss something. So let’s take the energy and sustainability bucket first those costs are those cost savings are resulting from projects we started in previous years even some of them going back to 2010, because they are energy related predominantly and efficiency related and energy consumption. So a lot of those savings have already been factored into our forecast for the year and we are just announcing the realization of some of the savings from previous investments. On the restructuring side I think we published a figure around $30 million for the year and we still anticipate that figure to be valid for the reminder of the year, we just happen to accelerate some of those and maybe change the mix slightly in response to the European downturn. And on the contingency savings, contingency savings are largely the result of producing less product but not just simply running on factories lighter but taking out shifts, taking out real hard costs in terms of both people and fixed production elements. Those costs we anticipate those cost savings to run throughout the rest of the year and just how much we get out of the contingency envelop if you will, will highly depend upon what happens in the market because we’ve executed on a wave of contingencies to achieve that $15 million. We have about 100 products or sorry 100 projects completed in that, we have another 100 projects identified for phases II and III, which I quite frankly hope we don’t have to execute on. But if necessary we are prepared to go to the next level of contingency savings go beyond the $15 million in terms of an annual run rate. So I hope that it gave you some color and commentary around those three buckets and Rob if you can comment about this anything.

No I think you covered it well. The only thing I would say that if you look at the contingency savings I mean fundamentally we as markets has softened the folks who run those businesses on the ground have done just a fantastic job of quickly responding and taking costs out. And so there is a bit of an offset there so as David says if growth comes back those costs will end up going back in. If there is more demand for product we have to hire people to go run the line so forth and so some of those costs will go back in. And so, on the contingency side that’s more flexible depending on demand. On the GBS and the sustainability costs those tend to end up being permanently embedded in our cost structure and so as you look at those flexible numbers and while we’ve got tough market conditions you see that how much value the guys who run that business have extracted out of the right business system and productivity improvement and cost reductions where while volumes are down margins are actually up in that business. And so that’s a playbook that the company has run for years and runs very well and those cost improvements tend to be embedded.

Okay, thank you. I guess one last question, I hopefully we don’t have to like you said conditions improving no more contingency efforts. Switching gears to paper, volume growth 9% I think it’s what you guys have said can you talk about how sustainable that is or are we sort of laugh at it or we sort of laugh thing that looks like couple, you know three quarters of mid single, high single digit volumes increases and I guess maybe a way to think about it as utilization, you know where are you guys at and could you just clean a little bit more out of that business?

I will take that the in terms of that business and the volumes we recalled it last year early 2011, late 2010 there was a paper machine rebuild that helped bump volumes a bit there. And so as to folks who run those assets who brought that up the curve that’s the component of it. As we talked about in the past investment in that business we’ve got an efficient frontier analysis that the company has done to say what’s the logical investment and what’s the limit in each of those large facility. We are not quite all the way through that but largely through it and so now what you are seeing is one the benefits of that paper machine rebuild being fully realized and then some just point efficiency and running better. But those are assets that are run very, very well very efficiently and that 9% increase don’t expect to see that kind of continuation going forward unless we would take the next step in this efficient frontier investment that I talked about.

Yeah and I will add to that we launched the efficient frontier analysis and then plans about two years ago it’s a three year plan I think it’s going to take us about three years and a half to finalize. But we’ve got about three quarters of that done so the incremental steps we have remaining will be executed over the next 12 to 18 months and again I will echo what Rob said our team there under Pete Watson and the mills under Tim Bergwall have done a fantastic job of running that business and managing that plan very, very effectively.

Perfect. Thank you, gentlemen good luck in the quarter.

Thank you.

Your next question is coming from Steve Chercover from D.A. Davidson. Please proceed with your question.

Thank you. Good morning.

Good morning, Steve.

First one on rigid the acute pressure that you referred to in Europe was presumably attributable to (Inaudible) do you think that’s the function of the European crisis is it a desperation in their actions?

Well I would say that I can’t attribute it to any one competitor there is actually a number of small regional competitors in the heart of the most intense competitive markets of Western Europe in Germany and Italy come to mind there. And I’m not going to comment on how their actions are desperate or not desperate. But they, I could tell you that when a commodity product drops significantly the way it did and there is plenty of capacity around I mean that’s what happens in our type of market and I’m glad to see that for a fair amount that intensity has at least abided certainly it didn’t get worst than it appears to be on the improving side of the equation.

Well despite being in digestion mode if you active you know either of the two that I mentioned or any of the smaller ones become available?

We could but I’m pretty happy with our footprint the way it is particularly on the rigid side because we’ve gone down a path for the last few years of adding what we believe is a superior product to many and equivalent to shift in the IBC area and we’ve done what we said we would do in the reconditioning at the new steel drum side. And I don’t believe we need to add particularly in those environments, in those geographies significant assets to our network. We will remain keenly active in sizing up long-term opportunities in China, India and other parts of the world. But I’m pretty happy with our footprint in those markets.

Okay and coming back to other side of the pond in the container board. I know that you are not huge on the box side but are you seeing any customers that are looking for a second source of supply as the industry consolidate?

Yes.

Okay, do you want to elaborate on the opportunity for Europe but that’s a good answer I guess.

Yeah, I think that anytime there is activity in an industry like this it’s that you do have some customers that look for alternatives and so that certainly created some opportunities for us. I wouldn’t say that it’s a material component but around the market anecdotally yes.

Well, this is my last question I mean and this is not a derogatory but you are clearly a second Tier by virtue of your size. I mean is there compelling reason for the second Tier suppliers to bulk up in order to service national accounts given what’s happened with truly big guys?

Well, I’m going to take an exception of say maybe third Tier in terms of volumes because of our participation in the market. But as we look at return on assets and margins and so forth, we move ourselves up that scale but having said that, this there is not an enormous advantage to additional scale size. And so you never say never to anything but certainly that has not been a part of the strategy to dramatically grow our footprint in that business.

Understood. Okay, thank you very much.

Thank you.

Thank you. Our next question is coming from Walt Liptak from Barrington Research. Please proceed with your question.

Hi, thanks. Good morning.

Good morning.

I wanted to ask about the acquisition revenue was a little bit lower than I expected and I imagine part of that was because of the lower flexible volumes of Europe is that right?

Yeah Walt, if you would look at the acquisitions that bulk of those were European based I mean they have some components outside of Europe but really European based and as we make these acquisitions I mean a number of these have been under discussion for a number of years, you don’t always get to pick your perfect timing to buy something with the perfect timing of how specific market conditions are. And so the facts that a lot of that was European base it did have a negative impact on it.

Okay, well right. Because it’s obviously not ideal to buy something and then have to restructure but. I guess I wonder as you go through more flexible restructuring in Europe in the second quarter how much of that contributes to the lower volume, just because of disruptions to the process and putting to locations in place.

Yeah, in terms of restructuring impacting volumes absolutely not. I will tell you that what we do what this company does when it buys businesses like that is that it applies great business system, techniques that are been exercised in this company for years. That basically improve productivity and we are talking very significant percentage increases in output capability in these businesses. And so if you got something where you are getting, we’ve had instance of this of 20 plus percent improvement in productivity in some of those assets we bought in the flexible business. When you get that kind of productivity increase at the same time you’ve got a demand market that sliding on to you, you can improve your cost structure by taking some things out. But it is again a fairly consistent playbook that this company used to acquire assets, improve productivity dramatically throughout right business system and if the market is not growing rapidly then you make the right decision and take costs out.

Okay, so considering that it sounds like volumes not getting worst maybe start to improve a little bit is this first quarter operating profit margin for flexible is that the low water mark that you think?

You know I think it depends on a lot of issues including where input costs are going as well as where product prices are going. And so I would be uncomfortable saying that this is an absolute low water mark because there is lots of an influence on that, from a market perspective I think that we anticipate that we are going to have some improvement in that business going forward.

And I would just add one thing that I don’t see us deviating from our long term goals of margin enhancement in that business. I’m keeping a close eye on the propylene shortages particularly in North America with the refineries that are out and whether or not that I will trickle over to other geographies. But there is an acute situation on propylene shortages that needed the polypropylene obviously and there is some activities going there for us. I think I’m not too considered because our fabric and extraction capabilities are not based upon the U.S. Gulf Coast propylene situation but definitely that it’s going to have effect on the industry in North America.

Okay, thanks and then if I can ask another question on the operating cash flow at some of those working capital accounts have improved. You said that you took specific actions no wonder if you can elaborate on those and maybe give us an idea of what kind of cash you can take out of inventory and receivables and other items during the year?

Yeah, in terms of the working capital initiatives a lot of different things and again we’ve got a distributed business and so you’ve got a lot of people making a lot of decisions around a company with 280 locations around the world. And so it’s really putting in place processes around better inventory forecasting and management working with our suppliers and working with our customers to jointly manage channel and take cost out of channel for both of us. Part of that is related to being more efficient with payables and receivables and so forth. So it’s a variety of different things we have not changed our expectation that at this point that publicly that we are going to get about a $25 million improvement in working capital this year.

Okay, thanks. And last one you talked about 2013 is being the year where the Saudi joint venture ramps. Can you give us an idea of the revenue that you hope to get in 2013?

Yeah, we have not given a specific revenue forecast for 2013. In the past we’ve said by 2015 we aspired to have that business at $1 billion in revenue and 15% profit margin. Having said that we had not anticipated this drop off in Europe and so well the guys who run that business are still very comfortable with 15% margin the $1 billion revenue number will to a large degree depend on what the global economy does so.

Okay, the other thing that changed is the natural gas prices have dropped in some parts of the world. I wonder if that changes sort of the outlook for the profitability for that business.

No our natural gas divisions particularly in the Saudi hub are fixed over long-term contracts and with our production base not in the U.S. or not based upon the U.S. economics we see no changes there.

Okay, alright. Thank you.

Thank you.

Thank you. Our next question is coming from (Inaudible). Please proceed with your question.

Good morning gentlemen. I just wanted to just follow up on the flexible target. So what you are saying is that you are reiterating competence in even though you might be softer on the top line of your goal as you ramp up Saudi and go forward. That is not the key determinant more at achieving this margin target.

It’s one of the components but it’s not there is several components in that that we will try to think we previously covered in other calls and investor presentations. It is a key component to it but it’s not the only component to it.

Okay, just to - so heard right. And the second question is a question request in a call that I mean I’m rather a new shareholder I spend a lot of time looking over your last 10 years and you guys have really well articulated this GBS system and how it goes down to the bottom of the organization, how you manage to it, you consistently pound it to us by presume you pound it internally. But my question is and I think the observation is, I think you are doing yourselves as a service by aggressively breaking out restructuring charges every single quarter that I would argue make it impossible for any single person on this call to truly evaluate. What is extraordinary in one time and what is just your day in, day out of grinding improvement, which is always about one step backwards to get two steps forward. And so when I look at your numbers with or without restructuring charges it makes it very difficult as one of your colleagues pointed out the kind of see puts and takes and really what the final result is. And I would just argue and maybe ask you comment that I think you should season the cyst and your number is your number. And there will be stuff in there but the final number and where it lays out is what we need to judge you on and it’s just very difficult to do so.

I will comment on that and I hear your perspective on that other investors have been supportive of that level of disclosure and my view is that greater transparency in that regard is better, unless the investor makes the decision on whether they want to look at the very bottom line number or if they want to look at what level of adjustments in that. And so the objective here is to provide useful information for investors and different investors view different information that useful and so I think what we’ve done there is gives you the best of both worlds. You can take it out others can leave it in.

I will be very happy to run $50 million of your pension money if you did not include my three bad stocks in my performance.

Thank you. Our final question is coming from Mark Wilde from Deutsche Bank. Please proceed with your question.

Yeah, just I will follow up on the IBC in business. It seems like that is a relatively regional business because of the size of those tanks and it sounded to me like you want to expand the manufacturing footprint in that business overtime. Maybe you want to run through some great facilities on the other parts of the world. Can you talk a little bit about that without giving away too much competitively and can you give us some sense of how much you think that IBC business can be grown over the next three to five years?

Yeah. I just want to make sure I heard you right you are talking to rigid right Mark?

Yes.

So, you are exactly right it’s an obvious strategic move for us to buy the capability and buy the design and past field we have with the, know how all of that is plans. We have 280 sites around the world and right now it is a little bit of a prioritization task for us to figure out where to go first. Obvious spots on the list would be China, Southeast Asia, North America, Brazil and that plan is in place. There are five sites that are have been identified for expansion are, we are executing on those plans we can’t do all five at once, it’s not much of capital, it’s much of pieces of equipment that we build ourselves that we piece together from other operations. But they are still a task that is a burden for the staff that we have from different plants. So you should anticipate us rolling out those four, five sites in the next couple of years in a very disciplined way. And the fact that we have the GBS and have space available and heritage sites around the world makes it very easy to expand that product line around the world and that’s what we are going about doing I prefer not Mark, to articulate, which ones come first because there is a whole lot of obviously, commercial strategies and have to play into that debut.

Yeah, I understand that and I understand there are kind of issues with existing licenses. In fact like that I’m just trying to get a sense of what you think that adds to Grief from just a revenue standpoint over kind of a three or five year period Dave, whatever you want to do.

We haven’t discussed that figure yet Mark, not publicly.

Okay, alright well look forward to you doing that at some point.

Thanks Mark.

Thank you. That does conclude our question and answer. I would like to turn the call back over to Mr. Fischer for closing comments.

Thank you, Kevin. As I mentioned in my prepared remarks we look forward to a gradual improvement in our markets as the years progresses. Our priorities for 2012 included integrating acquisitions completed during the past two years and increasing cash flow. The progress achieved concerning both priorities during the first quarter of the year is encouraging. I will now turn it over to Deb to provide replay information.

Thanks David. A replay of this conference call will be available at approximately one hour on the company’s website at www.grief.com. We appreciate your interest and participation in this conference call this morning. Thank you for joining us.

Thank you. This concludes today’s teleconference. You may disconnect your lines at this time and have a wonderful day. We thank you for your participation today.