(Operator Instructions) Welcome everyone to the Graphic Packaging Holding Company Fourth Quarter and Full Year 2009 Earnings Conference Call. At this time, I would like to turn the conference call over to [Brad Ingerholt], Vice President and Treasurer of Graphic Packaging. [Brad Ingerholt]: Welcome to the Graphic Packaging Holding Company’s fourth quarter and full year 2009 earnings call. Commenting on results this morning are David Scheible, the company’s President and CEO; and Dan Blount, Senior Vice President and CFO. I would like to remind everyone that statements of our expectations in this call constitute forward looking statements as defined in the Private Securities Litigation Reform Act of 1995. Such statements including but not limited to statements relating to declines in raw material and commodity prices and the expected effect on the company’s results, capital expenditures, cash pension contributions, and pension expense, depreciation and amortization, interest expense, net debt reduction, and consumer purchasing trends, are based on currently available information and are subject to various risks and uncertainties that could cause actual results to differ materially from the company’s present expectations. These risks and uncertainties include but are not limited to the company’s substantial amount of debt, inflation of and volatility in raw material and energy costs, volatility in the credit and securities markets, cut backs in consumer spending that could affect demand for the company’s products, continuing pressure for lower cost products, and the company’s ability to implement its business strategies, including productivity initiatives and cost reduction plans. Undue reliance should not be placed on such forward looking statements, as such statements speak only as of the date on which they are made and the company undertakes no obligation to update such statements. Additional information regarding these and other risks is contained in the company’s periodic filings with the SEC. David, I’ll turn it over to you now.

First I’d like to say due to some personal reasons, I’m remote in this conference call. Dan and I will do our best to coordinate the Q&A afterwards but it may be such that we have to follow up with you separately. I’d like to say first of all we are pleased with our fourth quarter results and performance in 2009 overall. While the environment certainly remains challenging, our strategic focus on the food and beverage sectors within the paperboard/packaging segment along with an ongoing focus on product innovation, cost reductions, supply chain management, and capital deployment, generated solid results in 2009 and I believe positions us well for the future. In both the quarter and the full year we were able to drive meaningful improvement in our EBITDA margins and cash flow. In the fourth quarter, excluding black liquor, we generated $143.8 million in operating cash flow and our adjusted EBITDA margin increased over 250 basis points to 12.6%. Our fourth quarter income per share improved to $0.02 from a loss of $0.11 last year. For the full year, we generated $368 million in operating cash flow, increased our adjusted EBITDA margin to 13.6% and reduced net debt by approximately $363 million. Including black liquor, our operating cash flow for the full year was over $500 million and our net leverage ratio at the year end was just under five times. Let’s talk a little bit about segments. Sales in our Folding Carton Food and Beverage business which accounts for roughly 85% of our total sales were once again solid, decreasing only 1.8% in the fourth quarter and 2.5% for the full year. Our focus on center of the aisle everyday products such as cereal, dry foods, frozen pizza, soft drinks, domestic beer, and facial tissue, and our large…

During the fourth quarter we successfully completed our integration initiatives and continued to strengthen our balance sheet through substantial debt reduction. In total, integration produced $150 million of annual run rate operating performance benefit and dramatically improved working capital efficiency. The improvements in our cost structure, balance sheet, and operating model, also provide us with a solid foundation to build on, heading into 2010. Looking at 2009 financial highlights, which were achieved in a very tough operating environment, we see full year EBITDA improved 11% year over year to $556 million. Fourth quarter EBITDA improved 18% year over year to $124 million. Net leverage ratio improved to 4.8 times from 6 times at the end of 2008. With those highlights in mind, let’s discuss fourth quarter and full year financials in more detail. First we will discuss revenue and EBITDA performance, and then move to cash flow debt leverage ratio and liquidity. As a reminder, when I refer to EBITDA or other financial performance metrics in my discussion today I am referring to pro-forma adjusted numbers. These adjustments, which include charges related to the combination with Altivity and benefits from the alternative fuel tax credit, provide meaningful year over year comparisons of our financial performance. A reconciliation table detailing the pro-forma non-GAAP numbers is posted on our website. Revenue and EBTIDA, as a result of our success in reducing costs through integration and continuous improvement initiatives, EBITDA margins substantially increased in 2009. For the fourth quarter, EBITDA margins improved 260 basis points to 12.6%. For the full year, EBITDA margins improved 220 basis points to 13.6%. The majority of the margin improvement was in our paperboard/packaging segment which delivered a 17% EBITDA margin in 2009. The multiwall bag and specialty segments EBITDA margin was relatively constant throughout 2009 at 9%.…

In closing, let me just say thanks to the many employees who’ve worked tirelessly to integrate Altivity into our company over the past year and a half and executed real change across the organization. While it hasn’t been easy in this environment, and there’s a lot of work to be done, I believe we’ve done a nice job of positioning Graphic Packaging as the leading producer of innovative packaging solutions for the global and consolidated consumer goods market. Our strategic direction is unchanged, we’re going to focus on our core mix of business and integrated model. We’re going to invest in new product development to grow the top line and we’ll work to accelerate our financial performance through solid CI and cash management processes. The strategy served us well in 2009, enabled us to reduce debt, improve our financial ratios and market position and it will position us well for continued steady returns in the year ahead. Now I’d like to open the call up to your questions.

(Operator Instructions) Your first question comes from Brian – Oppenheimer & Co. Brian – Oppenheimer & Co.: Around the costs, obviously OCC is up but you also purchased about a million tons of wood fiber exclusive of OCC. Can you shed some light on what’s going on with those costs?

As you know, wood fiber is a very, very regional business. While we’ve certainly had some moisture in Georgia and Louisiana basket we have not seen an appreciable change in the pricing of wood. Some availability from time to time has occurred in West Monroe this time of year we see that but as we look forward on our inflationary costs while we watch wood I don’t believe that’s what’s putting the upward pressure on inflation in our business. We certainly haven’t seen it yet. Brian – Oppenheimer & Co.: As far as the OCC increases, is that going to be able to be recouped as we go throughout the year in the form of higher selling prices?

Of course there’s been announced, as I mentioned, there’s been announced a price increases and certainly in the CRB market with the tightness of the supply and the cost we certainly see our prices moving up on CRB board. I think they will be recovered. Those of us that fall in the past recognize that since we don’t really sell a lot of open market board, for us to recover prices it really becomes a roll through our contracts which some of them reset quarter, some of them reset differently. Ultimately we almost get it all back but I can’t tell you period to period where that change is. We certainly will see pricing moving up in 2010 as a result of CRB capacity and costs. Brian – Oppenheimer & Co.: Any increase in CRB and paperboard we can basically expect that to translate into packaging prices.

It ultimately blows through our P&L in different methods, there’s all sorts of contractual movements in the process but historically its been the case that in inflationary costs, pricing tends to mirror and you get recovery on those costs, that’s exactly right, continuous improvement takes out permanent costs and that’s how the margins expand.

Your next question comes from Roger Spitz – Bank of America Roger Spitz – Bank of America: Within food and beverage are you more exposed to the branded or the private label relative to the overall industry?

By virtue of the fact that the branded is by far and away the largest sector in that space we are clearly more exposed to branded. Our share is about the same in the two spaces but branded is of course materially larger than private label. Roger Spitz – Bank of America: When you said that detergent volumes were up due to drive by consumers the value categories, were you referring to a consumer shift to powdered detergent cardboard boxes versus liquid detergent plastic bottles or were you referring to the liquid bag in the box detergent you mentioned?

For us it’s been more, bag in a box is pretty small element, what we really have seen is the consumers using more dry versus liquid. That’s where it showed up in carton volume. Roger Spitz – Bank of America: On the split of fiber supply between recycled fiber and virgin, does that basically run with your product text mills essentially 55% virgin, 45% recycled?

Close enough. Fiber translates directly to the board for the most part.

Your next question comes from Joe Stivaletti – Goldman Sachs Joe Stivaletti – Goldman Sachs: Can you tell us where you are with your usage of OCC per year right now?

We use about 900,000 tons a year or so of OCC in our system. Joe Stivaletti – Goldman Sachs: Obviously you’re saying your contract prices are trending down a little bit to reflect last year’s deflation. Now you’re obviously seeing inflation on OCC.

So they start to move back up. Middle of the year they start to adjust. I think the hard thing this year is to get a handle on how those pricing trends intersect. You’ve got the 2008 rolling through which by design of the contracts, has some reduction and then you start to see price increases that occurred in the fourth quarter for some of those board types and so on and so forth. Or actually you see a little bit of GDP a deflator going up and then you start to see as we move through the year a counterbalancing of pricing going up. I think on net basis as I said I think pricing will be down year over year but it will start to trend up in the second half of the year and so as you go through 2011 you’re on the other side of the equation. That’s the way the industry is structured. Joe Stivaletti – Goldman Sachs: Your contracts, you said you had different types of resets and some were quarterly and what not. I wondered if you could give us a little bit of a feel for how many of those, what sort of portion roughly resets on a quarterly versus annual basis.

I could, I’m not, and the reality is I don’t get into individual customer contracts. Our customer’s contracts are large enough that if I start breaking those things out it becomes a problem for me. What I will do, just like we’ve always done general pricing trends, I think pricing will be generally down for the year but trending up in the second half that’s about as much as I would say about those individual contract flows. Joe Stivaletti – Goldman Sachs: You obviously have had huge success with all the cost improvements and synergies and six sigma and all that. I wondered if you had embedded in your 2010 outlook what type of benefits you would be expecting from those initiatives this year?

As Dan said, if you look at the flow through rate of CI and synergy combined we have traditionally run from those businesses on a combined basis so well in excess of, on a combined basis, $70 or $80 million. Clearly with the synergy stuff on top of that we would be seeing or expecting total cost reduction of over $100 million this year is the way we would sort of look forward and say that’s where we’re headed. Based on the flow through and based on what we accomplished in the fourth quarter. I think our fourth quarter rate just in continuous improvement of synergies is like $18 million. If you sort of think about the accelerated rate of that those are the right kinds of trends.

Your next question comes from Sandy Burns – Stern Agee Sandy Burns – Stern Agee: In terms of the contract renewals as you entered into 2010 you talked a little bit about the pricing adjustment. Anything you could share with us in terms of any material changes on the volume side, picked up any new customers or bigger pieces of your customers board needs or anything that you lost in the competitive environment?

I really like to tread lightly in this process, what I would say is that share trends are pretty consistent in our business. We’ve had some where we’ve picked up; we’ve lost a little bit here and there, some we’ve just decided not to do business because it really was not in the space that we wanted to do. I would say trends are overall positive but they’re not the big driver by any way of our volume trends. What I would say more about volumes more optimistic at this point is that we have, as I mentioned, started to see some improvement in the core underlying and the consumer products and of course the multiwall bag business as well. That’s probably the more pertinent trend for our volume than share processes. With the share we picked up I will tell you has been more in conversion of solid fiber from corrugated and we have seen in our z-flute and some high weight sufts replacing SBS, replacing corrugated in some cases even CRB we have seen those kinds of trends. That’s really a pie grower more than anything else. Those are the trends that we tend to focus on internally, growing the whole solid fiber core pie. Sandy Burns – Stern Agee: In terms of the natural gas usage and pricing, you gave a helpful comparison of this year’s average hedge price versus last year’s average price. Could you give us, for the remaining three quarters of 2009 what your average natural gas price cost was?

You’re talking about 2009? Sandy Burns – Stern Agee: Compared to that $5.60 that you mentioned where you hedge that for the remaining three quarters of 2010? What would be a comparable number to that $5.60?

The full year 2009 was around $8.00. The first quarter was about $10.90 so if you look at it it’s probably around that $7.50 for the remaining three quarters approximately.

Your next question comes from Bill Hoffmann – RBC Capital Markets Bill Hoffmann – RBC Capital Markets: I wonder if you could talk a little bit about, until these cost initiatives whether you think, it sounds to me like you’ll probably more than make up for what you might experience in the margin squeeze from the lower contract pricing. The second question is, taking a step back; out of all the restructuring activities you guys have done over the last couple of years with 10 plant closures last year etc. where do you see your asset positioning from converting operations both domestically as well as some of the positioning for picking up some international growth?

The reality is that what I simply said in the call is that relative to the integration we have the footprint that we want. Those of us, you have followed us for a long period of time; know that every single year we assess every one of the converting assets in our entire business. I’m not suggesting that we will not ever or not look at a higher cost one of our converting assets coming out but it would really be more in line with how do we look at that asset versus long term future. I’ve got plenty of capacity in the United States for growth within my converting business so the key is operating only the most efficient capacity. Where I see expansion for us and where we do need some capacity is in the international markets. I’ll talk a little bit about our Mexico business. Because some of our large customers have started to consolidate into Mexico, businesses that they have done in Central, South America and the Caribbean our plant in Mexico in Queretaro has been a facility that’s grown remarkably. We are going to move new assets into that facility because essentially it’s just about at capacity and yet we have plenty of growth. In fact, we outsource in Mexico converting that we do that honestly we could probably do more cost effectively internally. That is something we’re looking at for sure there. In Western Europe I consolidated my three plants in Europe but I did expand my French and Spanish facilities internal to their walls. I have an opportunity to grow in Western Europe but that’s primarily focused on beverage. Despite the fact the US market is tough, that pales in comparison to the challenges that face the European market. Even the beverage market in Europe had an extremely difficult quarter and year compared to what we saw here. I’ve got plenty of capacity, I’m going to continue to focus to reduce my footprint in light of the fact that we get more efficient in some of the plants. Bill Hoffmann – RBC Capital Markets: What percentage are international sales at this point and what kind of growth rate do you think you can get?

I think our international sales right now are probably about...

Just slightly less than 10%.

I would say on that base they’ll probably grow faster than the US. Especially if you consider Mexico international sales then we will definitely grow faster than the US. Bill Hoffmann – RBC Capital Markets: From the cost synergies versus balancing that against the decline in contract pricing.

You know that question is of course exactly on point, we’ve done that for years and years and years which is we’ve taken costs out faster and that’s why our margins have moved up and that’s exactly what we expect. I think the arbitrage for us has always been we expect contract pricing to keep us whole with inflationary moves through the business and then we expect the cost improvement initiatives to offset any labor inflation and improve our margins. That model served us in 2008 and 2009 and we expect the same thing in 2010.

Your next question comes from Richard Close – Jefferies Richard Close – Jefferies: Would you mind talking a little bit about the working capital in your business? I know you said that you’re planning on further reducing your inventory turns. How much benefit do you really think you can continue to get from that with input costs moving up?

I will tell you we took $70 million of inventory out; we still have over $400 million worth of inventory. Our turns, were they 8.5 last year is that about right?

That’s pretty close.

If you look in the space and you put a world class moniker on that there are people in the packaging space that are turning 10. There’s no reason we cannot get there. While our goals internally this year are a little bit more modest than $70 million I look at our working capital and suggest it really is not unreasonable for us to look at ongoing reduction in inventory in 2010 and we expect to see it. We have community warehouses, we shut down a number last year but we still have a number of them that needed to get out, we had to wait for some of those contracts to expire, we’ll continuing consolidate back, Altivity brought 120 warehouses into the mix. We still have well more than we need and we still have some of the plants that are shutting down. Every time we shut a plant down we pick up $6 or $7 million worth of inventory that comes back into the system. We still have some to blow through the system. You can put that together and sort of target that there’s still pretty sizeable working capital reductions in 2010 and 2011 at least from our planning standpoint. Richard Close – Jefferies: Can you guys tell us what amount you have available in that debt repurchase basket for the senior subs at this point?

We’re about $100 million and we can raise it up to $200 million.

Your next question comes from Mark Kaufman – Rafferty Capital Markets Mark Kaufman – Rafferty Capital Markets: I know you’ve been talking about it, your ability to further reduce costs and integrate the Altivity business. I was wondering if you could put a percentage on how far along you think you are with the Altivity merger? I guess what I’m also asking do you anticipate additional charges related to the Altivity. I think you called out earlier that you’re not going to be segregating the comments about the savings but I imagine you’ll still have to put in there somewhere any additional restructuring charges.

We have completed the integration activities and as David stated we’re not going to call it out any further. In terms of wrapping up some of the projects and process through the first half of the year there’s a couple additional plant closings that have been announced, you’ll noticed we stated we had closed 10 in 2009 and 12 had been announced. We have those remaining two. There’s going to be some charges that we will break out and call it non-recurring on the face of our P&L that’s related to those activities. They’re going to be far less than what we incurred in 2009. Mark Kaufman – Rafferty Capital Markets: In 2009 what would you say your internal utilization of the paperboard was? If you could make any forecast with the reduced amount of plants going forward what you anticipate your utilization rate in 2010 would be?

Our integration, let me see if understand, the integration rate for Graphic is about 85% in that range. We are a net purchaser of CRB which means that we convert more into cartons than we actually have the capacity to make so we certainly buy on the open market. In our SUS business we sell some sufts on the outside remains an opportunity for ongoing integration. Our plan overall is to be a net purchasers of all the board that we buy, we just think that makes the most amount of sense for Graphic and that’s where we’re headed certainly in 2010. We will buy the board substrates that we convert from our competitors in the space. We have relationships today, we do that and we would expect actually those relationships to expand as we go forward.

Your next question comes from Blaine Marder – Loeb Capital Management Blaine Marder – Loeb Capital Management: You guys have had a maniacal focus on debt reduction and are ahead of schedule yet you kept your guidance for the net debt to EBITDA at 4.3 for 2010. I wonder why the conservatism there given you’re talking about $180 to $200 million of net debt reduction.

Based upon what we expect for EBITDA and the $180 to $200 million that’s the way the ratio calculated. Blaine Marder – Loeb Capital Management: You had that target before you reported this quarter and you’re substantially ahead of your 5 times leverage target for 2009.

That’s true but internally we had the 4.3 what we did is we accelerated some of the debt reduction into 2009 that’s what happened so the total debt over that full period of time is equalizing. Blaine Marder – Loeb Capital Management: How long until you think you can reach your ultimate target with a stable sort of steadily improving economy?

I think you can do the math. Every $180 to $200 million is worth about a half a turn. You’re probably looking at not too far distant in the future after 2010.

Our targets, we want to certainly be in the three’s and heading lower. If you pay it forward sometimes if things go as we expect sometime in 2011 we will certainly have achieved what we consider to be a solid balance sheet and capital structure. That’s where we’re headed. I think our Board would love the term maniacal. I will remind you that even in there we have spent $180 million in CapEx in 2008 and almost $140 million in 2009. I think Dan gave guidance for CapEx roughly the same in 2010. We’re continuing to invest back in the business. Its just that as those two businesses combined there was a lot of cash tied up that just was not creating a lot of value for the shareholders. We have clearly been working on that aspect. Once you start the flywheel on cash reduction it’s really incredible when a business this size with the fixed cost investment you can get there. If volume comes back a little bit we’ll talk later but right now with sort of the unstable market, I can’t tell whether our government is working for us or against us at this point in time but I think we’re sort of hedging into that understand what inflation and interest rates are going to do and we’re saying that we feel pretty comfortable with those forward projections and anything can happen in this economy right? Blaine Marder – Loeb Capital Management: How you handle the repurchase of the 9.5’s they’re not exactly that cheap these days. I assume you wait to call them, wait until August until the step down?

We’re constantly monitoring the pricing on those bonds. I think there was a period of time just recently where they came close to the call price. We’re going to look at the economics and when we’re comfortable with it and the market will accept our bid we’ll go in the market and purchase them. If we don’t like the economics we always have the option to wait until August when we can call the bonds at an attractive rate.

At this time there are no further questions. Mr. Scheible, are there any closing remarks?

I would say thank you all for participating in this call. We’ll talk to you next quarter.