Good morning, everyone, and welcome to the Sealed Air Conference Call discussing the company's second quarter 2012 results. This call is being recorded. Leading the call today we have William V. Hickey, President and Chief Executive Officer; and Carol P. Lowe, Senior Vice President and Chief Financial Officer. Also participating on the call today is Tod S. Christie, Treasurer. [Operator Instructions] And now at this time, I'd like to turn the call over to Amanda Butler, Executive Director of Investor Relations. Please go ahead, Ms. Butler.

Thank you, and good morning, everyone. Before we begin our call today, I'd like to note that we've provided a slide presentation to help guide our discussion today. This presentation can be found on today's webcast. As well, it can also be downloaded from our IR website at sealedair.com. I'd like to remind you that statements made during this call stating management's outlook or predictions for the future are forward-looking statements. These statements are made solely on the information that is now available to us. And we encourage you to review the information in the section entitled Forward-Looking Statements in our earnings release, which applies to this call. Additionally, our future performance may be different due to a number of factors, and many of these factors are listed in our most recent annual report on Form 10-K, which you can find on our website at sealedair.com. We also discussed financial measures that do not conform to U.S. GAAP. And you may find important information on our use of these measures and the reconciliation to U.S. GAAP in the financial tables that we have included in our earnings release. Lastly, we have also used pro forma results for certain metrics in the quarter to aid in the comparison of our performance to historical combined metrics as Sealed Air and Diversey. Now, I'll turn the call over to Bill Hickey, our CEO. Bill?

Good morning. Thank you, Amanda, and good morning to everyone. Before we begin our discussions on the quarter, I'd like to welcome Carol Lowe as our new Chief Financial Officer and I'm also pleased that Tod Christie, our Treasurer, is able to join us today as well as to complete the transition. During today's call, I will lead the discussion on our top line performance, our expanded integration and optimization program and our outlook for the balance of the year. Carol will focus on our financial results, our liquidity measures and key balance sheet items. We will then open up the call to questions and answers and text-in questions. Getting started on Page 2 of our slide presentation. As we noted in our press release earlier today, our second quarter results fell far short of our expectations. Like many, we experienced increasing challenges in the quarter from macroeconomic conditions, which noticeably weakened in the latter part of the quarter in Europe and in export out of China. We also saw a challenging protein production trends, for example USB production down approximately 4% to 5% in the second quarter and lower consumer demand prompted a slowdown in our more defensive food segments. While we are clearly disappointed, we are accomplishing a great deal against the key objectives we outlined at the beginning of the year. Namely, integrating the Diversey business, achieving our synergy targets and generating cash flow to reduce debt. Some of our accomplishments include -- we further penetrated markets with net gains. We are seeing good results from new products, targeted account penetration and we grew solidly in the developing regions of the world. We are exceeding our targeted cost synergy benefits by aggressively accelerating and expanding our integration and optimization program in the quarter with new cost-cutting measures…

Thank you, Bill, and good morning, everyone. I will be providing comments on our second quarter operating profit and adjusted EBITDA results, as well as well as address key cash flow components and liquidity. Slide 7 of our presentation deck highlights the second quarter adjusted operating margin performance for each of our business segments. As Bill previously noted, our Food Packaging segment achieved organic growth of 4%. However, benefits of this growth were overshadowed by higher sales of lower margin products as well as a number of charges and expenses that are outside the norm for Food Packaging. In the quarter, we reached a labor agreement in Argentina resulting in a charge and payment of $5.2 million. The upfront payment will save Food Packaging approximately $1.8 million annually beginning in 2013. As we continue to consolidate and leverage our global facility network, we temporarily incur additional expenses related to redundancies, employee training, startup and efficiencies and freight. This was certainly the case for food package -- food products operations in Brazil. Reduced volumes in Australia, primarily under export markets, also contributed to the negative year-over-year performance on under absorption of manufacturing costs. We are moving to respond to the fluctuations in demand by addressing variable costs in the near term as well as developing longer-term solutions to our fixed cost structure for the region. We expect the Food Packaging segment to return to adjusted operating margin levels of approximately 12% by the end of the year on a constant dollar basis. The 160 basis points improvement in adjusted operating margin for our Food Solutions business reflects strong price cost management as well as favorable product mix and absorption. Adjusted operating profit for Protective Packaging was lower year-over-year and includes the impact of unfavorable currency transaction costs associated with importing U.S.…

Thank you, Carol. Thank you, very well done. Based on the increasing macroeconomic concerns, we are revising our full year 2012 guidance. As you can see on Slide 11, we expect that on a constant dollar basis, we expect that sales and adjusted EBITDA performance to be essentially flat with pro forma 2011. Net sales are expected to be approximately $7,700,000,000, which includes a negative effect of approximately $400 million of foreign exchange translation currency. Adjusted EBITDA is expected to be approximately $1,050,000,000 to $1,075,000,000, which includes a negative impact of approximately $40 million due to foreign exchange. Our revised adjusted EBITDA target range suggests that we are pacing slightly above 90% to our original target levels. We do expect second half results to show some acceleration over first half results from more modest favorable growth comparisons year-over-year, ongoing modest economic recovery in certain regions, the benefits of higher cost synergy benefits as well as an expectation for positive price cost spread as raw materials continue to moderate in the third quarter in parts of our businesses. We do expect our food business to show relatively consistent organic sales performance in the second half while we expect our Protective and Diversey segments to track modestly higher, based on favorable year-over-year comparisons and benefits from their ongoing growth programs. We have reduced our expected capital expenditures in the year by $50 million to reflect an expected slower pace of volume growth and a more stringent return to hurdle on our capital investments. As such, we now expect our free cash flow to be approximately $425 million to $450 million, which allow us to continue to prioritize our use of cash for debt reduction, dividend payments and cash structuring expenses. We expect to achieve a net debt target by year end of $4.95 billion, approximately $50 million shy of our original goal of $4.9 billion. Lastly, our adjusted EPS is now revised to $1 to $1.10, which compares with 2011 pro forma adjusted EPS of $0.88. We remain confident in a bright future for Sealed Air and have outlined the plan for balanced approach for achieving our short-term objectives, aligning our cost structure for slower pace of economic recovery than we initially anticipated while still realizing success of the longer-term vision. We believe our balanced approach of focusing on our core strategy, ensuring successful integration to Diversey while managing expenses tightly and recalibrating our business profile for lower unit volume growth to maximize returns and cash flow will position us well for when conditions improve. And now operator, I would like to open up the call to any questions from the participants and will follow up with any text questions from our webcast participants as well.

[Operator Instructions] And your first question comes from the line of George Staphos representing Bank of America Merrill Lynch.

Couple of questions on Diversey. So am I to understand that if not for the $23 million variable comp recorded in the second quarter of '11 that the pro forma reduction EBIT of $36 million would have been a greater amount 2Q versus 2Q or would you treat it differently? The related question by my estimate, Diversey was dilutive to your earnings this year and just in this quarter by $0.15 to $0.20 when I include the share count, would you agree with that treatment or would you have a different figure? And I had a question, a follow-up question.

Okay. Yes, let me answer your first question first. The Diversey $23 million is a credit that was taken in Q2 '11 by the prior owners. That represented, I believe it was a 50% reduction in their incentive comp. The 2012 numbers do not include such a reduction. So the $36 million shortfall that you're referring to actually becomes less on a comparable basis if you kind of normalize the variable compensation. And if you take 7 exchange out of it, you essentially end up with a balance of closer to 6. But there 7 exchange in that number, George. As far as your EPS calculation, I have not done that but we will do it and we can compare notes offline.

All right. My related follow-on is on free cash flow, what do you think the normalized level of free cash flow is from Diversey alone on an ongoing basis? My calculation would be this year that it's maybe $40 million or $50 million including the investment and the cash restructuring, if you will.

Yes. We haven't looked at it that way. I don't know, Tod, do you have observation because essentially it's fungible, we've essentially consolidated the back office, George. So what you see as Diversey is down to a contribution margin on a stand-alone basis and then allocations. So I'm not sure that I could go back and look precisely at what the Diversey numbers are, but yet maybe that's another exercise we can take off-line. But as I said, we kind of scrambled the eggs a bit.

Okay. Just as a comment, it would be helpful just so that you can track the progress because obviously, you put a lot of capital into Diversey.

Your next question comes from the line of [indiscernible] representing [indiscernible].

So you made a comment there near the end of your presentation; you said you were reviewing the portfolio looking at strategic options. I was wondering if you could maybe comment at how often have you reviewed the portfolio maybe over the last year and just historically how often do you do that. Are you just looking at potentially underperforming assets or is this something more meaningful that we should be anticipating?

Well, I think this is reasonably consistent with what I said. This is now the second quarter I've said it and I also said it shortly after the Diversey acquisition. I think that given the size of the company and the asset base as well as our debt, we are really evaluating and I think I used actually in my commentary products, geography and businesses. So we are looking for what in our portfolio may not meet our criteria in any one of those categories, whether it's a operation in a particular part of the world, whether it's a product line in one of our core businesses that doesn't carry its weight or whether it's one of our smaller sub-businesses that we just might feel that those assets could be better put to use in the core business. So that's what we have in mind, anyone of those 3 and I will keep people up-to-date but obviously, cannot say anything right now because we haven't gotten anything to report.

Understood. And then just going to the -- you mentioned that on a comparable basis, on pro forma basis, you expect sales to essentially be flat on a constant dollar basis. And yet the COGS, you have the COGS now you said they're going to be 66% of sales up from 65% before. Can you just talk about where the deleverage is coming from in the business to cause that slip in the gross margin line?

Yes, Carol?

Well, I guess I'm not certain by what you mean by deleveraging, but obviously under absorption is going to be a challenge for us throughout the balance of the year. And that's partly what you see hitting the operating margin and the cost of sales as a percent.

Right. And so what's driving that underabsorption?

Volumes and the challenges that we're seeing, especially with Europe and other economies as Bill discussed.

Right, I think in the under absorption in a lot of parts of the world, not the United States but Europe and Australia in particular I think Carol mentioned during her comments, as the business experiences a slowdown in volume, most of your labor essentially is a reasonably fixed cost because it's not possible in many of these economies in Europe or Australia to flex your workforce as quickly as you're able to do it in the U.S. and I think as Carol said in Australia, that resulted in several million dollars of unabsorbed overhead as Australia production ran below plan. So that has the impact on cost.

Okay. But you did mention you thought volumes would pick up a little bit in the second half. Is that from the first half?

Right, and the business typically does. The business is typically 48-52 or 47-53 on a seasonal basis and that will happen ordinarily and we also expect to give that a little extra pinch with some of the things we are doing.

Next question comes from the line of Ghansham Panjabi representing Robert W. Baird. Ghansham Panjabi - Robert W. Baird & Co. Incorporated, Research Division: On the Food Packing business, I'm still trying to reconcile the 270 basis points in EBIT margin compression that you saw versus 2Q of last year. That’s the lowest level you've ever reported for that business, at least according to our model. Carol, I know you call that some one-off issue such as Argentina, but can you sort of quantify some of the other impact, like Australia, for example?

Yes, let me just give you an overview and then Carol can fill in the details. But yes, I do think it is an aberration, sort of the perfect storm as several things came together at one time. Coincidentally, and I think you've heard me say this before, we bought a new factory in Brazil and we've been preparing to move into it on a gradual basis to have the least disruption to our process. We actually shut down the production lines in Brazil and are disassembling them to move them to the new site. We're importing semi finished goods from the United States. We started importing them early in the second quarter. The Brazilian reais has gone from $1.70 to $2.05, which is about a 21% cost increase to Brazil. We kept selling prices the same because as soon as those lines are reinstalled in the new factory and turned on, we'll be producing in Brazil. So we are incurring that cost and that goes through the P&L and I don't have an audited number, but it's in the millions of dollars and that's part of the reason for the shortfall. The process of moving the production lines will run several months, so part of it will continue into Q3. But that's sort of a high-level view as to why the numbers are as low as they are for the quarter. I mean Carol can touch on some of the other products, some of the other items about Argentina and Australia. But Carol, do you want to fill it in?

See, Ghansham, the -- for Australia, the number’s about approximately $3 million. And now that's included in what will be approximately $9 million of under absorption, manufacturing and efficiencies that include the items Bill discussed relative to Brazil. We also closed our Rochester plant, and that was previously announced and covered in prior quarters. And while we did take some of those costs that were readily identifiable and add them back within our restructuring program, there are additional costs that linger for some time period relative to training and startup just getting new workers trained, having the redundancies where prior workers come in and train the new workers. So all of that together kind of creates a bucket of approximately $9 million. In addition, there's a lot of what we call rats and mice because it’s a lot of individual smaller items such as we had approximately $2 million for roof repair for our Iowa Park facility, items that -- they're $500,000 here and there. So it just kind of all adds up to equal that. But again, high confidence that as we work through the consolidation for the supply chain network that we'll be back at 12% adjusted operating margin by the end of the year. Ghansham Panjabi - Robert W. Baird & Co. Incorporated, Research Division: So just to clarify, so from a year-over-year perspective, $9 million was total line absorption including all the stuff you talked about and than an additional $6 million was for Argentina?

The Argentina was $5 million. Ghansham Panjabi - Robert W. Baird & Co. Incorporated, Research Division: $5 million, okay. But that's in addition to the $9 million, right?

Correct. Ghansham Panjabi - Robert W. Baird & Co. Incorporated, Research Division: Okay. And then just on free cash flow, to hit the low end of your range, that would imply roughly $150 million run rate for each quarter. How much of that, if any, is coming from lower working capital?

Yes, Tod, go ahead.

Yes, Ghansham. This is Tod. Yes, a portion of that is coming from lower working capital. And if I could point you to 2009 as an example where we were in a challenging environment and we were able to exit. That year we reported record cash flow and part of that came from working capital, part of that came from reduced capital spending as we’re anticipating for this year. As I think you know, we're able to ramp up and ramp down our capital spending pretty quickly to reflect changes in business conditions because we don't have any 1 or 2 large projects making up our spend. Ghansham Panjabi - Robert W. Baird & Co. Incorporated, Research Division: So it's the working capital. And just to sort of summarize, is it $50 million contribution?

Yes. I think -- for what period, Ghansham? Ghansham Panjabi - Robert W. Baird & Co. Incorporated, Research Division: For the back half of the year.

I think it’s -- sorry, I’m just looking for the number right now. Yes, it’s probably about half of that number.

Your next question comes from the line of Philip Ng representing Jefferies. Philip Ng - Jefferies & Company, Inc., Research Division: I just want to – just had a few follow-up questions on the Food Packaging business. So if I heard you guys correctly, still some drag in Q3 but the 12% EBIT margin target, is that a Q4 run rate, full year and you said constant currency so is it based off of the current Euro? How should we be thinking about that?

Yes, it is constant currency when we're referring to that, we're talking about our end of July rates. So it is including that and we do think it will be kind of a run rate, so that's why we're saying by -- we'll reach that by the end of the year because we will have to work through some of these inefficiencies. Philip Ng - Jefferies & Company, Inc., Research Division: Okay. And then on Diversey, the business actually did better than I would've expected. So when I think about the back half, and if I heard you correctly, Bill, July was a little better than the trends earlier. So would it be fair to assume that you can work off of the Q2 number and adjust for seasonality and synergies and what not?

Yes, we actually saw -- actually July numbers are actually positive growth. And we will -- we're pushing to keep that for the next 6 months. Philip Ng - Jefferies & Company, Inc., Research Division: Okay. So that’s a good number to work off of and just adjust for synergies in, okay. And then lastly, price looks like price was pretty solid for Food Packaging and your Diversey business. Some of the other segments, at least from a year-over-year perspective, faded a little bit. Did you get some pushback on your pricing initiative and how should we think about price cost in the back half?

Yes. Let me tell you. I think we said quarter net price was about $35 million positive, $60 million positive. And we are seeing -- the last price increase we did in May was kind of tough. We haven't -- we have seen some pushback, to be honest. We've seen some pushback. There hasn't been a lot of price concession, and I think our good friends in the petrochemical industry have announced the price increase. And that always will then support at least keeping our prices where they are. And Amanda just showed me the $35 million number for price cost benefit in Q2 was the correct number. Philip Ng - Jefferies & Company, Inc., Research Division: So when I think about price in the back half...

Price in the back half right now we're pretty caught up. If there isn't, we'll be selective. Philip Ng - Jefferies & Company, Inc., Research Division: And no leakage, right? Is that how I should be thinking about like price stability is a good assumption?

We have a slight leakage, assuming resin prices don't go up. Philip Ng - Jefferies & Company, Inc., Research Division: Okay. Because typically you got to hang on to that for quite a bit, so I guess the market environment’s a little tougher than it was earlier.

Right.

Your next question comes from the line of Chip Dillon representing Vertical Research Partners.

If you look at Page 3 of the press release, it mentioned that you guys had $15 million in incremental benefits in the second quarter from Diversey and yet down in the table, it suggests it was an incremental $23 million because you got actually $15 million in the first quarter. I just want to make sure which of those numbers is correct and did you really mean in the paragraph on Diversey to say that you got $23 million in the quarter?

Yes. There's $23 million in the quarter, $15 million is Diversey, $8 million of the Other businesses, some of which is Sealed Air, I think as both I said and Carol said, we closed the Rochester plant in the U.S., so we've also have had some of the synergies have been cost taken out of the Sealed Air businesses and that's where the other $8 million comes from. So, Chip, it's $23 million in Q2, by segment $15 million is in the Diversey and $8 million is spread across the Others.

Got you. So you're at a $23 million say per quarter rate in the second quarter and if I assume it stayed at that level, which of course we hope it doesn't, then that would total $84 million, that is $38 million plus $23 million plus $23 million, if my math is right and so should that -- does that mean that we only should expect an incremental $6 million over the second half, say an average of $26 million per quarter? Am I reading that right?

That -- you are reading it right. That table at the bottom of Page 3 gives our full year estimate at $90 million, which gives you the balance that we’re going to pick up in the remaining 2 quarters.

Okay. So that would suggest then if we get an average of -- so let’s say we average at $26 million a quarter in the back half, maybe it’s high 20s in the fourth quarter. If I read this right, if you get a total of $185 million next year, that would suggest you're going to have a pretty big step in the first part of next year, I would think, since you'd be averaging in the 40s for next year. Is there any 1 or 2 items you can tell us what -- that you expect to really kick in next year, anything to be on the lookout for?

Well basically, it's been headcount. I mean, I did bring the sheet with me, and I thought, "My numbers are right. It's about 900-plus people that will be out of the company by the end of this year." And that is one of the principal drivers. There are some -- a couple of plant closings. We've announced the closing of a Diversey plant in France. We earlier told you about the Rochester plant, there’s a couple of those going on. But my sort of back of the envelope is 80-plus percent of those savings are from people.

And then the last question, just looking at the proxy, I know a lot of people in your company have -- their incentive compensation, if I read this right, at risk if the EBITDA doesn’t actually hit I think $963 million or so and are you concerned if things do in environment continue to be a bit more challenging than expected? Are there other ways you can incentivize some of these managers if it looks like it'll be tough to pay them?

Chip, I read your little blurb this morning and we are going to hit the number. We're going to hit the threshold. We have to. [indiscernible]

Right. Threshold meaning the one for the other managers? The threshold meaning the one in I think $963 million or $958 million for the other management, is that what you're saying?

I'm hitting the 90% number via my way, Chip. It’ll get a lot tougher as we get closer.

Your next question comes from the line of Adam Josephson representing KeyBanc.

To what extent are the difficulties you experienced in the quarter purely a result of macroeconomic weakness and FX fluctuations, or where there any execution issues that affected performance in the quarter?

That's a tough question. I mean, I think the bulk of it is macro. I mean actually currency is, we explained it's $10 million on translation on EBITDA. We figure it somewhere in the -- again, unaudited back-of-the-envelope $5 million to $8 million on transportation of goods, particularly as we close plants and move goods around the network. Could we have executed that better? Probably we could. As far as the core plan, could we have closed accounts sooner? Probably we could. There’s a couple of accounts I’ve been riding herd on to get closed that I know we’re very close to getting a contract from a customer. But I would say the vast majority of what you saw in the second quarter, even Carol's list of rats and mice are either macro or decisions that we made such as decision to take apart the equipment at the old plant in Brazil and move it to the new plant. I'd like to say we've done a great job. We probably haven't but as far as execution, I think we've done reasonably well.

Right. You said that Diversey’s strongest quarters are typically 2Q and 3Q. Would you expect that breakdown to be any different this year because you’ll realize more cost savings in the back half of the year? Or would it be reasonable to expect adjusted EBIT in 3Q roughly similar to what you earn in 2Q?

I expect Diversey's 3Q EBITDA to be better.

Because of cost savings or volume or other?

Yes, both. Both.

Okay. And just lastly on the cost synergies, you've talked about $90 million in '12 and an additional $95 million next year. You had $38 million year-to-date, but those benefits seem to have been more than offset by the core, the weakness in core business trends. How likely is it that we'll be able to see those cost savings flow through to the bottom line in the second half and next year?

Yes, I know, that's a good question. I sat down and basically when I looked at the numbers, I said I know we have $23 million in the second quarter, show me. And the manufacturing group and the financial group was able to come out and identify. We could pin down to the person, to the job, to the location. Unfortunately what happened is when you have the decline in volumes, that under absorption in some of those costs ate up, in effect, those synergies and what we really do is as we increase the synergies going forward is basically not give them back to offset softness in the other part of business. So we've got to keep our margins up, we've got to keep our sales up and we’ve got to keep our manufacturing costs and processes under control and then you will clearly see the synergies.

Your next question comes from the line of Rosemary Morbelli representing Gabelli & Company. Rosemarie J. Morbelli - Gabelli & Company, Inc.: I have 2 questions. One regarding Diversey. I understand the decline in volume in the EMEA areas. Could you give us a little more on why the volume is down in North America?

Yes. There's a couple of reasons that I think we've talked about on prior calls, but I'll tell you that one of the factors in Q2 because the first quarter item lapse is a large retailer who’s a large customer of ours in the Q1 had actually stocked up at the end of 2011 and they didn't order until late in Q1. In Q2, there was a company, a Diversey customer -- no, it was a food company. It was a bigger Diversey company than it was a Sealed Air customer, a company called Beef Products International, BPI, and they essentially went out of business when the industry stopped using finely textured beef, otherwise known as pink slime. And that essentially put those Diversey sales out. Usually it had an effect on the Sealed Air side, but I said they were a much smaller customer of Sealed Air. And what actually happened -- and then in Q2, the North America decline was really 1.7% in North America versus something well over 4% in the first quarter. So the order patterns are much more balanced in North America going forward. And probably were it not for Beef Products International, it’d probably be pretty close to flat. Rosemarie J. Morbelli - Gabelli & Company, Inc.: Okay. And then talking about beef, the challenging protein market, what do you expect to see next year? I mean the higher cost of feedstock; is that translating in smaller herds? Could you give us a better feel what to expect in that particular market?

Sure. Interesting. I'm looking at a chart here which shows that beef slaughter production has been down for the last 3 years. Herd size, as you saw probably a number of people say, is at its lowest level since 1956. We are -- for so the year, this year will be down probably close to 4% for the year and that's based on the USDA numbers. 2013 should be down another 2%, but then our projections go out to 2013, but you should start to pick up after 2013. So you're looking at a decline from $25 million, I'm sorry, $26.5 million in '10 to about $26.2 million too in '11 to about $26 million in '12 and looking at another 2% decline in beef in 2013. Actually, beef consumption in the U.S. has gone down about 17% in the last 5 years or so. Since Lehman, I don't know whether Lehman had to do with beef, but the U.S. consumption of beef was down 17% since the peak of the housing boom. Rosemarie J. Morbelli - Gabelli & Company, Inc.: Do you any see pickup of that particular decline in the U.S. by an increase in other regions where you have enough business so you can offset some of it?

Yes, I think we are seeing, what you are seeing is beef consumption picking up in China. Beef consumption had doubled -- the numbers are still relatively small. I know it doubled in China from '95 to 2005 and you heard me mention during my geographical comment that our Food Packaging business is up in China. Now China's primarily a pork market but there is beef, although I would pause it that the increase in China's been primarily in pork.

Your next question comes from the line of Mark Wilde representing Deutsche Bank.

Bill, I just wanted to chase that protein thing a little further. It would seem like with these beef costs up that you might actually see farmers putting a lot of cattle to slaughter in the near term and then we'd be dealing with smaller herd size a year out and higher meat prices, both of which would cut into the market. What am I missing there?

We had that, I had this discussion here 2 days ago in preparation for this call. The USDA numbers show a 4% decline for 2012 and actually show also a decline in the second half. But with $8 dollar corn, you are very right, Mark, is that it is likely that there may be a short-term surge in bringing beef to market rather than feed it, which could make perhaps Q3 a little bit better but essentially you're taking it out of the future. But you are right.

Okay, all right. And then just to follow on. I wondered just to get a little more clarity on exactly what you're saying kind of going forward, because I heard you say Diversey seemed to be doing better in July but I also noticed that in the release, you were clear to highlight the things in Europe had definitely slowed down in the latter portion of the second quarter. So can you just help reconcile some of that?

Yes, sure, Mark. A lot of it is the comps. If you really go back in Europe, it really started in Europe in Q3 last year. So Diversey numbers were weak last Q3. I actually think we probably come to a trough in terms of the Diversey numbers. So that you'll start out in Q3 '12 with a more favorable comp than Q2 '12. So I'm comparing to prior year. So I'm comparing to a number that was starting to slip last year.

Okay, all right. And the other businesses in Europe?

The protective business is probably the second weakest business in Europe and that primarily serves the industrial sector and the protective business numbers, I think is about down 3% in Europe and that's primarily to the industrial market. So it would suggest that as we all know, the European economy is feeling the effect. The food solutions business was also down in Europe and the food solutions business primarily serves the value added segment, particularly prepared meals, ready meals and some of the more expensive case-ready products. And both that business and the industrial business did see declines in Q2, primarily in the European economy.

Okay. And then finally, you mentioned in the release also that it looked like there was some Diversey investment going on in Asia PAC and that may have had an effect on the results [indiscernible] quantify.

Yes, well -- yes, I think what we’re saying is we actually added net people in Diversey Asia. I think the number’s running around $3 million of basically selling and service costs and if you heard my commentary, the business in Diversey in Asia is actually -- I think hospitality was up 20% in Asia and the food and beverage component of Diversey was up 30% in Asia where we continue to service new hotels being built, hotel expansions and beverage plans. So we've actually have to add that cost to service the new customers. And as I say, the 30% growth in food and beverage and the 20% growth in hospitality and lodging. We just signed a meaningful food safety contract with a large multinational retailer that does business in China.

Okay. I guess what I was trying to say, were costs, though, ahead of revenues just from a timing standpoint?

Yes, you're actually right. When we -- for example, when we sign a contract with a hotel chain, you have a service-level commitment to install our dispensers, to bring our chemicals in, you usually have to take the competitors chemicals and you need them to have service people that are available to call on each of the hotels in that hotel chain in some of the service-level agreements call in for once a month. So you have to have a person go once a month to maintain that account, check the inventory of chemicals, make sure all the dispensing equipment are operating properly and so we're hiring and training these people to service these new account wins.

Okay, that’s fine. And finally, can you just tell us whether all of this exchange rate volatility has got you or the board thinking about sort of any changes in how you hedge FX risk going forward?

Well we keep thinking about it. Tod and I have talked about it for years, but I'll let Tod comment.

Yes, I think what we're seeing this last quarter and so far this year has been dollar strength against virtually every other currency in which we do business. So I think we're seeing a more pronounced effect this quarter than we typically have. We do hedge many of our exposures, but we do that gradually over time because we don't want the overhead exposures either, so that does tend to leave some things unhedged, but we’re continuing to look at ways to improve that.

Your next question comes from the line of Chris Manuel representing Wells Fargo.

Bill, if -- I'm looking at an old, admittedly, dated slide deck and a lot of things have changed since then, but I'm looking back at the -- from when you put the 2 businesses together and proposed putting the 2 businesses together and $9 billion sales target, $1.6 billion EBITDA, different elements and I know a lot has changed since then. You've done -- identified a lot more in restructuring savings, you’ve had currency and economy work against you but if you could take a stab at what you think the business is capable of, maybe 2014-ish or so from a cash perspective and from some of the different elements perspective, that would be helpful. Could you maybe give us a sense as you look at it today given a lot of these changes, what you think the business is capable of?

Chris, I think fundamentally the concepts from last year, it's only been a year ago, only been a year ago. If you go back to a EUR 1.42 euro, the numbers would look a lot better. And so I think if you were to recast everything at constant dollars from June of 2011, you might see us a lot closer to where we were and where we said we would be. And I think that ought to give you a good indication of where we can go. That's a big difference when you say EUR 1.42 to EUR 1.22 on a big piece of the business.

I recognize that but clearly, economy has slowed a bit too and clearly as we look at the pro forma of what’s come through at Diversey, it's been half or slightly more than what may have been a historical probation officer forma. But -- okay, I'll take that under consideration. And then a second question is, actually 2 small housekeeping questions. One is I know you’re going to go back and begin to report to us through the new segment soon. Do you have an update as to when that might be?

Carol.

Yes, we're targeting the end of the year, because -- so our Q4 and our 10-K will reflect the new segments. We have an obligation as we move towards managing the business that way to meet SEC requirement, so that’s what we will be doing. And everybody will have a full picture of 12 months Diversey standalone within the business. We’ll do the restatement and you'll see that when we release in January.

That’ll be helpful. And the last little housekeeping item was, Bill, what are you seeing today in specialty resins? Any relative stability through the balance of the year? Is that what you’ve embedded in here, or are you anticipating possibly some migration upward, downward?

I think relatively stable, again that assumes no hurricanes, relatively stable. There's usually a seasonal uptick at the end of the year and I think if you look at our guidance, we said we might see a slight uptick in Q4, but less than the 3% to 5% that was in our original guidance.

The next question comes from the line of Alex Ovshey representing Goldman Sachs.

So a couple of questions for you, one just on the EBITDA range you have out there for the entire year $1,050,000,000 to $1,075,000,000, given the uncertainty of the business, I would’ve thought that would've been a little bit wider. Can you just talk about why it's only $25 million, whether perhaps you have better visibility into what the second half of the business will look like for you?

Carol?

In terms of visibility, again we feel like we have confidence in the synergy program as Bill has already outlined. And we do think from a comp basis with Diversey on a year-over-year basis, things get better in the last half of the year. And we just -- we put a lot of time and effort into developing the new number based on what we know at the -- knew at the end of June and what we’re seeing so far in 2011 and we just felt comfortable with the range and where it's at.

Okay, got it. And then just on the dividend in the context of the weaker operating performance, any thoughts around any changes to the dividend going forward?

No, we cannot -- there aren't any thoughts. We’ve made a strong commitment to our shareholders and we want to do our absolute best to deliver on it.

Okay, operator, I just take -- I just want to take a break here. We have some questions that have come in by text and I’d just like to just give the people who've taken the time to text in to get their questions answered. And I also understand that we have run over 1 hour, so I would, those who wish to stay on are clearly welcome to stay on. I would like to responsive and answer everyone's questions, but I do realize we are over the scheduled time. The first question coming from the text message, text question is what is the rationale for reducing CapEx if the company's concerned about preserving free cash flow? Will you possibly lower the dividend as an additional measure? When are the next maturities for the debt? Tod, would you address that or Carol?

Sure. Yes, I'll take that. I partially answered the capital question before, I believe, but with a reduced growth outlook, we are taking a careful look at our capital spending. Less than a $100 million a year of our spending is for maintenance capital, so there's an opportunity there to delay some of the projects we have otherwise planned. Also while we’re on the subject of free cash flow, just to clarify the response I gave to a question earlier, we're expecting working capital to contribute about $25 million for the full year, which implies a higher contribution in the second half. That's through managing our inventory balances both through seasonal fluctuations as well as improving operating performance for the inventory investment as well as some limited sequential improvement in day sales outstanding. And I think we just addressed the dividend question. As far as debt maturities, we have now paid our third quarter 2013 bank debt maturity, so we have nothing coming due on our bank debt until the fourth quarter of next year. The next big maturity we have is a bond that matures about a year from now, which is $400 million.

Okay, next question is from the text, please explain how legacy Diversey F&B business is performing compared to Diversey I&L business, year-to-date. What is your reasoning to keep the Diversey I&L business, which is not strongly linked to the rest of Sealed Air? Just to give you a comparison is in the second quarter, the food and beverage business of Diversey’s up about 4% in constant dollars, where the I&L business is down 0.6% in constant dollars with the weakest part of the business being in government education, retail and consumer brands. I think the fit of the Diversey business is one, a lot of the technology on the I&L business is shared technology with F&B and usually enough the channels of distribution for the I&L business are in common with the channels of distribution for Sealed Air's Protective Packaging business, industrial packaging. We all go through the same large, large distributors, the xpedx and the Unisource and the Bunzls of the world. So there's commonality in technology and there's commonality throughout the market. And every factory around the country that buys Sealed Air, a roll of Bubble Wrap or Instapak chemical also has a laundry and a lunchroom and a facility to keep clean. Let me take one more from the internet. I think I've answered this but just so know, I just want to acknowledge the writers that comment on the drought in the U.S. and how it will affect Food Packaging. I think I've explained that we may be short-term pickup. What were the volumes in the food business relative to what they were in 2008? And I believe they are down somewhat, but probably in the 1% range. Just looking at the statistic that U.S. beef consumption has gone down on a per capita basis 17% since 2008, so that's carly [ph], but we can go look at that off-line and but my estimate it’d be down in the 1% range. How do I see Europe performing over the next 6 months as Europe seems to be a drag on overall sales performance? Also you're preparing yourself for a scenario where the breakup of the eurozone. My crystal ball for Europe isn't as good as Mario Draghi's or ECB. But my own personal view is Europe's going to kind of struggle along, they'll struggle along in kind of a flat to slightly down environment, but not dramatically. And I do think there's a lot of pressure to keep the euro and at least I don't think we’ll see any change in that for at least the next 6 months. Okay? Let me go back to the phone operator, if I could.

You have a question from the line of Al Kabili representing CS. Albert T. Kabili - Crédit Suisse AG, Research Division: I guess on the cost synergies. The incremental that you're seeing, I think $90 million or $70 million, you mentioned 85% of that's back or people, can you just help us what this is -- back office, where is this coming from? Is the sales impacted? To the extent that volumes due pick back up, would the cost that you’re taking out, would you have to add some of this back in? What's the risk on that front?

Well, there -- I mean, generally, it's kind of across the board but a portion of what's there, sales and marketing, making sure the structure for the new F&B and I&L businesses have the right infrastructure they need to support the growth. At a high level, we look to say that we think our businesses should run at certain percent cost to serve and we want to optimize that. So if there's growth that supports adding resources and it's profitable growth, we'll certainly do that. But there’ve been cuts through the supply chain network as well as back office, including within finance. Really, it's been across the board. I don’t think there's any area of the company that has not been impacted. Albert T. Kabili - Crédit Suisse AG, Research Division: Okay. And then the split in terms of these cuts and the incremental cuts that you've identified, is this, how is it spit up between Diversey and the rest of the legacy business? Is it leaning more on the Diversey side or is this pretty spread out, this incremental $70 million you've identified, is it pretty spread out pretty equally across the whole new Sealed Air?

It’s -- well, as we've identified year-to-date, it was more on the Diversey side with them having $15 million versus the $8 million in the other businesses. But as we move forward and especially as we execute on having F&B and I&L businesses as opposed to legacy Sealed Air and legacy Diversey, it gets blended and all of the business units will be benefiting and there won't be as much to distinguish between the Legacy entity. Albert T. Kabili - Crédit Suisse AG, Research Division: Okay. So going forward, we're going to see more the cost savings we’re going to see on these cuts talking about incremental $70 million you talked about this morning, this incremental $70 million is going to be spread more evenly than the initial piece we’ve seen with Diversey it sounds like.

Yes. Correct. Albert T. Kabili - Crédit Suisse AG, Research Division: Okay. And then just a follow-up on W. R. Grace Settlement, some of the recent comments they've had, I wanted to see if you could give us an update on how you're thinking about the settlement.

We have a planned statement, but Carol if you want to address the question?

I mean, can read a legal statement and that's really what we would do right now or I can just refer you to what’s already been set forth in our filings and just tell you that because it’s an ongoing legal proceeding, it's really not appropriate for us to comment further.

And your next question comes from the line of Todd Wenning representing Morningstar.

How are you guys thinking about R&D spending in the second half of the year relative to your historical average near 2% of sales and where will the R&D investments be focused for the rest of the year?

We had that discussion last week. We spent about 2%, we're looking at reallocating a lot of that R&D spend to where we can have the most impact on the top line. We've got several short-term opportunities that if we can apply more resources and we can bring some really new products to market a lot quicker. And we are in the process and our R&D leadership team is reallocating the resources as we speak to put focus on our near commercialization products. And I think that's where our program is for the rest of the year.

Great. And have you seen any credit risks from customers in Europe and how are you managing your cash in the region, for example, are you moving any of your cash in the area to more highly rated institutions?

Yes. Let me -- I will tell you that we've seen 3 bankruptcies -- I recall 3; 2 in Greece and 1 in France that are in our P&L numbers, they're in our P&L numbers and it’s probably a couple of million dollars that are bad debts coming out of Europe. Let me let Tod comment directly where we stand on both the credit and the cash since they both report to Tod.

Yes. So on the credit side, as Bill mentioned, we had a couple of bankruptcies, actually not too far out of the norm for the size of the business that we have. The receivables performance is actually improved somewhat in Europe so far this year. So our team there has done a great job of managing that exposure. On the cash side, we have a long-standing policy with respect to counter-party risk. We’ve tightened that up even beyond our normal policies based on some of the exposures that are -- you read about in the headlines. So we keep our cash only at the most highly rated institution.

Your next question comes from the line of Mike Rybak representing Ivory Capital.

Bill, just to follow-up, I think you mentioned that Diversey in Europe were kind of at the bottom now. I guess our expectation is for volume growth to be positive from here on?

Yes. I mean, I'm hopeful here. I mean, I'm predicting what happens in Europe tomorrow I think is a question I'm not qualified to answer and I'm not sure many people are. But if you look at what we're seeing so far in July and our updated outlook for the rest of the year, the numbers are positive and one of the factors I think as I said in response to an earlier question, is that the comp numbers to last year's Q3 and Q4, to put it simply, become easier. So what we've seen in July and what we outlook for the rest of the year compared to the prior year, we are looking at positive growth for the next 2 quarters.

Okay. And just I know you've taken down guidance but when you initially set the original guidance, was your expectation the same or were you expecting Diversey to be stronger the second half of the year or weaker second half of the year compared to kind of your outlook currently?

Sure. When we set our original guidance, one, it was based on a EUR 1.40. So you have to consider that’s a factor. And our updated guidance is EUR 1.22. I think we were there that -- maybe it was EUR 1.38. Our guidance was about EUR 1.38. And we did the rest of the year out at EUR 1.22. So that's a meaningful impact as you saw on our guidance. We estimate that’s a $40 million impact upon EBITDA. We also felt that the European economies would hold up better than they have been. We were really looking at Diversey having slightly positive growth in the first half of the year rather than negative. But the expectation that the second half would be better is reasonably consistent, although it's starting now from a lower base.

Okay, got it. And could you just kind of describe the competitive environment in Europe with respect to market share between you and your big competitors there?

The competitive environment in Europe is pretty tough. In any declining economy, everyone's looking for their share of a shrinking pie. I actually went through a list of gains and losses in Europe and I also looked at the top 21 customers in Europe the last day or 2. And if I look at the net gains and losses, we're slightly ahead. There've been something like 13 gains and 4 losses. Net to somewhere in the $2 million to $3 million net, but accounts shift around and you find customers now, particularly with the economy, continually want to reopen the RFP process to see if they’ll find someone who will give them a better deal. But no, European economy’s tough, as essentially the pie is a little bit smaller and everyone in the space is looking for a share of it.

You have a follow-up question from the line of George Staphos representing Bank of America.

Bigger picture here, obviously you've been dealt a pretty difficult hand with the Euro and with the economy but kind of reflecting back on a number of past earnings calls that I’ve listened to for Sealed Air, a lot of topics remain the same. Some years the animals, there's greater herd size, other years they're not. Actually per capita consumption of beef has been declining since the '70s in the U.S., it’s not just since Lehman. We’ve had restructuring programs in the past, we had global manufacturing and at the end of the day along multi-year period, the returns probably haven't been where you would've expected them to be that they’re down and certainly in a very volatile market, the stock is probably half of what it was a year ago when you announced the Diversey deal. So I guess from here looking forward, what gives you the most confidence, what would you relate to your shareholders that they should be confident that the returns to them, their current equity should improve from here in '13 and '14? What do you have the most control over number 1 and number 2, at one point in time you had, I think, a free cash goal for next year of $600 million. Is that still on the table or all that’s off just given the environment?

Good -- very good, good question, and I think in terms of my own personal view and I'd like to think of myself as a shareholder, too, is that if we execute well, if we deliver on our commitments and that's the whole management team and all 26,000 people in the company, we'll put some pretty good numbers on the board. The headwinds have made it at challenge, the exchange rates are going to make the dollar amounts not as great as they could've been but in terms of improving from where we are now, you've got a lot of people in this organization that are not happy with where we are today. And most of us all here are all shareholders and it's our job now to make it work. As far as the cash flow goal, let me --

Well, it was -- yes, George, that $600 million was definitely on higher euro basically. You have to adjust from a free cash flow. We also were expecting stronger growth within Europe, executing plans and obviously there's a lot of doubt about that happening and how long this current crisis is going to last. So there are some new unknowns that weren’t there previously but we still feel very confident about generating strong cash flow moving forward.

Thanks, George. Let's just -- is there anyone left on the text message? I think we should -- we addressed the CapEx question already. Relating to FX, and there's another question on FX. Okay. I think we're out of time. I know we kept you all a lot longer than we had planned. In terms of, I think a couple more questions on capital expenditures, but I think Tod addressed those appropriately at this time. With that, I would like to thank you all for participating in the call and stay tuned. Thank you. Bye-bye.

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect and have a great day.