Good morning, everyone, and welcome to the Sealed Air conference call discussing the company's third quarter 2013 results. This call is being recorded. Leading the call today, Jerome A. Peribere, President and Chief Executive Officer; and Carol P. Lowe, Senior Vice President and Chief Financial Officer. [Operator Instructions] And now at this time, I'd like to turn the call over to Lori Chaitman, Vice President of Investor Relations. Please go ahead, Ms. Chaitman.

Thank you, and thank you and good morning, everyone. Before we begin our call today, I would like to note that we have provided a slide presentation to help guide our discussion. This presentation can be found on today's webcast and can be downloaded from our IR website at sealedair.com. I would like remind you that statements made during this call stating management's outlook or predictions for the future are forward-looking statements. These statements are based solely on information that is now available to us. We encourage you to review the information in the section entitled Forward-Looking Statements in our earnings release, which were applied to this call. Additionally, our future performance may differ due to a number of factors. Many of these factors are listed in our most recent annual report on Form 10-K, which you can also find on our website at sealedair.com. We also discuss financial measures that do not conform to U.S. GAAP. You may find important information on our use of these measures and their reconciliation to U.S. GAAP in the financial tables that we have included in our earnings release. Please note that we will end the call by 11 a.m. today. Now I will turn the call over to Jerome Peribere, our President and CEO. Jerome?

Thank you, Lori, and good morning, everyone. Our comments today will focus on third quarter results and our outlook. But before I get started, I want to briefly highlight our Analyst Day that took place on September 20. And for those of you who couldn't make it, if you haven't done so already, I would encourage you to visit our Investor Relations website, download the presentation and listen to the replay. To quickly recap, we outlined our long-term financial and operational objectives for 2016 and how we are committed to meeting or exceeding those objectives. We spent a great deal of time talking about the new Sealed Air and how we are driving financial and operational excellence and improving the quality of our business. We talked about our sales and value initiatives, as well as our pricing discipline. We also talked about our targeted innovation road map and improving our return on investments. You will hear us reference themes from the Analyst Day on today's call, as each quarter is one step on our journey to becoming a knowledge-based company. And I'm pleased to confirm that our third quarter was a good one in our transformation. The tip of the iceberg is our new logo and tagline, Re-Imagine, because we re-imagine the industries we serve and that is the way you need to think about us. With that, let me turn to Slide 4 and get into the details of the third quarter results which are quite -- which we are quite pleased with. Sales were up 2% on a reported basis and up 2.9% on a constant currency basis. Excluding the impact of stock appreciation rights or SARs, our adjusted EBITDA margin was 15%, an increase of 5% compared to last year. The increase in EBITDA was driven by…

Thank you, Jerome, and good morning, everyone. If you are following along with our presentation, Slide 10 provides a bridge for the 2% year-over-year net sales growth. Volumes contributed $26 million. Price/mix was $28 million positive, driven by favorable trends in all divisions. Currency translation was $15 million unfavorable, primarily due to declines in Latin American currency and most notably, in Argentina and Brazil, which declined 17% and 10%, respectively. Slide 11 reflects the adjusted EBITDA bridge from third quarter 2012 to third quarter 2013. The year-over-year improvement was primarily due to $22 million in cost synergies and $9 million of higher volume. Unfavorable SG&A and other of $16 million includes $9 million of compensation and benefits inflation and a few specific items in Diversey Care, including a $4 million bad debt reserve related to a large customer in our AMAT region, as well as a $2.5 million increase in our inventory obsolescence. As Jerome mentioned, price/mix was favorable on the top line, but it was not enough to fully offset the increase in raw materials cost. I want to take a minute to speak to how Sealed Air is implementing stronger credit and collection policies, enhanced customer credit risk reviews and increasing reviews and approvals required for contracts that include rebates and related items. Earlier this year, we named a new Global Director of Credit and Collection, who is implementing best practices across the company and upgrading the risk management talent. We are also now holding our commercial teams accountable for timely collection of customer payments and for bad debt exposure. This is a very important part of Sealed Air Getting Fit. SARs expense was $9 million in the quarter as compared to $3 million for the third quarter last year. While the amount of SARs expense is not…

Well, thank you very much, Carol. We are -- before I open the call for questions, I'd like to thank all our customers and shareholders for their very strong continued support. I would also like to thank our employees around the world for their commitment to improving the operating financial performance of Sealed Air. We have made tremendous progress in achieving our objectives, but there's still work to be done. We look forward to speaking with you on our next earnings call currently planned for February 6, 2014. Operator, I would like to open the call to any questions from the participants.

[Operator Instructions] And your first question comes from the line of John McNulty with Crédit Suisse. John McNulty - Crédit Suisse AG, Research Division: So when I look at the guidance raise that you've given, it looks like a little bit of it is tied to maybe a slightly lower tax rate kind of going into the fourth quarter, but that doesn't look like it accounts for all of it. So I was wondering, Jerome, if you can give us some clarity as to maybe where you're being surprised the most at this point, whether it's on the pricing or the cost-cutting? Or is it just the environment is getting better on the macro front?

Well, the environment, generally speaking, we haven't seen that it was going -- getting better in North America. We are going to be slightly impacted negatively by the governmental shutdown in -- during Q4 for -- on our governmental businesses, which I mentioned to you earlier at a point in time. So it's not macros. It is we are very diligently moving towards our Get Fit strategy and making very good progress. So it is about discipline. We have a good cost control. We have some volume growth in some of our markets we just talked about, and we are improving on our pricing strategy. I am not satisfied with where we are. There are strong competitive forces, but we're making progress. You saw that we announced a price increase effective November 1. So this is a must for us to achieve in North America. The reason is that we have had priority in cost increases mostly effective September 1. And we can't get them immediately through, but this is why we have announced November 1. We do have also pricing formulas. And in our Food Care business in North America, specifically, there are -- we have quite a lot of business on pricing formula. They have a slight lag. We're going to start seeing the benefits from this, which means that we are, in fact, doing a little bit better in pricing that you can't see at this point in time.

Okay. All right, and just to add, just one -- a little bit more color to that. As we look at Q4, right now, October total sales are kind of tracking in line with last year's trend. We did finish Q3 a little bit stronger than what we had anticipated even as we were entering the first part of September.

Your next question comes from the line of Adam Josephson with KeyBanc Capital Markets.

Carol, I think you just addressed this, but I just -- obviously, you reaffirmed your full year guidance at the Analyst Day with 10 days to go in September. So what, I guess, what changed subsequent to that event that you were not expecting? I get this somewhat goes back to the previous question, but was volume better? Was your cost savings tracking better? What specifically improved relative to your expectations?

So it -- Adam, it was a -- again, we finished September much stronger. July, and actually probably a good portion of August, we were not seeing a lot of favorable trend. And as you look at the information that's provided in the earnings release, you will see that we did perform very strongly from a cost control standpoint and with the synergies. We had $22 million in cost synergies for the quarter, as well as -- and then we've had $75 million year-to-date. So a lot of it is around cost control. But, again, if you look at the year-over-year constant dollar sales growth, that's also pretty favorable compared to what we're seeing in the greater global economy. Unfortunately, we just don't have the ability kind of mid-month to be able to measure and account for all of the cost performance improvements.

Your next question comes from the line of George Staphos with Bank of America.

You had mentioned earlier that you're putting into place new controls, procedures, accountability for managing credit. Jerome, Carol, could you comment at all on what you're doing to manage pricing implementation and to verify that the price increases that you want to put through and that your sales and marketing folks are saying they're putting through are, in fact, being put through?

Great question, George. The -- it is all about discipline. And our organization was very sales driven, as I explained to you from my observations earlier in the year. We are -- we have taken some people and isolated them in the marketing function to make sure that they are in charge of pricing. When I went to school, I learned that marketing was about the 4 Ps. Well, in the B2B business, the 4 Ps become 2, and they're product and price. And that is the job of marketing, and that's what we are reinforcing. So we have identified some people who are clearly accountable to look at our cost, our pricing, and to get those through. So that's what we're doing. We're doing the same with our credit policies. We are -- we have a level of bad debt which is unacceptable. We have a level of past dues which is unacceptable, and we are working very hard at correcting all of these.

Your next question comes from the line of Ghansham Panjabi with Robert W. Baird & Co. Ghansham Panjabi - Robert W. Baird & Co. Incorporated, Research Division: Back to the pricing issue, the 4% to 9% announced in North America, the industry has obviously lacked transparency, particularly, in plastics packaging as it relates to formal price increases. So first off, Jerome, is this something that we should expect with more regularity as it sort of is driven by higher polyolefin cost, if they continue? And second, in terms of the overseas markets, when can we expect a comparable strategy there in terms of pricing?

So what you saw from the announcement we made is it was dictated by urgency. There's been a retroactive September 1 price increase from the polyolefin producers, and we were in need from -- of urgency to get those things done. I come from industries where those were publicly announced. And I don't see any problem doing this kind of thing and potentially, we'll continue doing this. We have announced to our customers' price increases in the -- in all the sectors last spring. Some of these went to the level that we had announced. Some were partial. This time, we're seeing margin squeeze that we just simply cannot accept. So we are going to go and go strong on those. This is the value that we deserve to get in order to have reinvestment economics, so I am really feeling very strong about this. Now with regards to the other parts of the world, it's just the same. It's the same that we, generally speaking, can have either polyolefin or other type of products' cost increases, and fundamental discipline means that you're going to be passing them onto your customers. This is Step 1. And then according to the value that you create and the uniqueness of your solutions, you need to have margin expansions. That is what I am looking at, and I will measure this through margin expansions in each of our businesses. We have had pricing growth in the U.S., in Europe even, et cetera, et cetera, on the Food Care -- on the Product Care business that you were mentioning earlier. And -- but they're not sufficient to cover what we're going through. And by the way, this is an opportunity to get rid of some of our bleeders. We do have some low-margin businesses, which we either get what we need or we're going to move out.

Your next question comes from the line of Alex Ovshey with Goldman Sachs.

I wanted to ask a question on the price increase announcement that was discussed earlier, earlier in the quarter. As you think about your book of business over the next 12 months, how much of that book of business do you expect will benefit in full from the 5% to 9% increase in prices, and how much will take longer than 12 months to actually see the full benefit?

Well, I cannot wait for 12 months to see the benefits of our announced price increases. I was -- we have obtained some price increases as a result of our spring announcement and -- but not enough and inconsistently. Of course, there are competitive forces and in the Food Care businesses, we lost -- we've been taking a business from a very large international competitor, some business in Australia and New Zealand. We've been taking some business or an account in the U.S. also. Well, that's life. But we are the leader, we need to be leading in this price in pricing discipline. So that's what we are. But 12 months is clearly not acceptable. We just can't wait for 12 months to recover our costs. Remember what I said, we need to -- this is the pricing discipline aspect, which is to recover, by definition, our cost increases. And next to that, we need to be better at analyzing and understanding the value we create for our customers, and as a result of that, to see margin expansions.

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

I wanted to ask you a question, if I could circle in on Diversey a second, and specifically, when I look at the profit trajectories we work through 3Q, I guess where I'm really trying to go with my question is how this might suggest into 2014? But when I look at the performance here in 3Q, even if I were to adjust for the bad debt expense and the inventory obsolescence and the $1 million you have for -- here for volume, your earnings were still down on a year-over-year basis. What -- I know some of the price increases you've got through look to be more in some of the Food Care and Protective Care pieces. What are you doing specifically within the Diversey piece to improve profitability and help to offset some of the extra impacts, and how might that play out into 2014?

Okay. So several things. First of all, my take is that if you exclude SARs and if you exclude this bad debt, and if you include the one-offs, et cetera, we're not doing worse, we're doing slightly better. So that's my view. What we're doing is under the leadership of Ilham, we are -- she has simplified her organization. It's done. She has done that this summer. She is still making business improvements, taking care of bleeders, and she is imposing a much better pricing discipline. There's a lot of work to do. It's not easy, but we are getting there. I am optimistic, actually, from what I'm seeing, that we're getting traction in the marketplace. Our equipment business is doing quite well. We have booked, a few weeks ago, the largest equipment machine order that we ever had, and it's going to be delivered in the coming few months, et cetera. So there are some real good things going on. They need to translate into numbers. It's going to take a little bit of time. But we do have some good wins and some good channels improvements here and there.

Your next question comes from the line of Scott Gaffner with Barclays.

Just curious, Jerome, on your commentary on Europe, you still seem to be maybe a little bit pessimistic on Europe. But if I look at sort of the volume trends in Europe sequentially, European Food plus 1% in 3Q versus minus 1% in 2Q. European Product Care looks like it was up 4% on volumes versus about 2% in 2Q. And in Diversey Care, we seem to be sort of still down about 1.5%. So is it just -- are you being cautious on Europe? Or is there something else going on that leads you to believe that things are going to continue to be relatively flattish in Europe going forward?

Well, you see, Scott, everything is relative in life. I have read quite a few documents or quite a few articles recently which was saying Europe has turned the corner, et cetera, et cetera. So from a GDP point of view, all we're talking about is moving from 0.4% negative GDP growth to plus 1% or plus 2% -- plus 0.1% or plus 0.2%. So, again, all of this is relative. Do we see positive trends quarter-over-quarter, which means do we see improvements in the third quarter compared to the year-to-date? Yes, we do, except in France. But in the U.K., as I said, we had a year-to-date growth of 1.2% in U.K. and we're moving toward 2.6% in the past quarter. In Italy, we were having a negative growth of about 3%. We're moving to about 1%. In Germany, it is about stable to pretty iffy at this point in time. In France, it's improving. But we've got to hit big time because we were strong in France in Food Care and Product Care also. We've been year-to-date about minus 7%, and we're about minus 5%. And I am well placed to know that the French economy is very iffy and that consumer sentiment is still very poor. In Spain, we're improving. We moved from a minus 3% to a minus 1%. So, yes, things are improving. But it's going to be a long time before European GDP is above 2%. It's going to be a long time because of the importance of government spending, which is in most of those economies around 50% of the total GDP.

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

Jerome, I wonder if you could give us a little more color, kind of in Latin America. When you talked about sort of volume trends, particularly in Argentina and Brazil, but especially Argentina, you were throwing out some big year-over-year gains. And I just wondered if you could put a little more color around that, maybe talk about how sustainable you think that strength is. Historically, those have been pretty volatile markets.

Okay. So constant currency growth in Argentina is meaningless when you have 25% devaluation, all right? So what's in this specific country, you need to have -- you need to look at your year-over-year. And we are quite pleased with what's going on, and very bluntly, it is the quality of our people. We've got very, very good people in that country and in Latin America also. So our total growth in Food Care year-to-date has been close to 10%, well, 29% in constant currency. But real, in dollars, in local currency after the devaluation, it's been about 9%, great growth. Our total -- in Diversey Care, we're doing wonderful. And, again, it's the local quality of our people which really make the difference. So then on a total country on Diversey Care, we've been growing double digit year-to-date in dollars. We've been growing over 30% in constant currency, which I said it doesn't mean, but the real number to think about is about 12%.

Your next question comes from the line of Al Kabili with Macquarie Research Equities.

I just wanted to get a little bit into the guidance which implies a $12 million sequential drop in EBITDA. And Carol or Jerome, I think you mentioned you had seen some pretty good momentum. And exiting the third quarter, we've got the price hikes that you've announced for November 1. So I'm just -- if you could just kind of help us with that sequential decline that you're looking for.

So a quick comment on this with regards to cost and pricing. Remember that we have our polyolefin cost increase effective September 1, and as announced by -- to the industry. And our price increases are effective November 1 when they're applied. When we have formula pricing, they don't apply. It is the overall trend. So that has a slight negative. Why don't you comment on the one...

Yes, and, Al, we also -- remember, we have some seasonality where Q2 and Q3 for the total company are typically our strongest quarters. And in Q4, while we do benefit some on our packaging side relative to the holiday season, there's less hospitality that we see on the Diversey side. So we will experience a slight decline going sequentially from quarter-to-quarter due to that seasonality.

Next question comes from the line of Phil Gresh with JPMorgan. Phil M. Gresh - JP Morgan Chase & Co, Research Division: My question is sort of a follow-up to that one. More on the top line with your guidance of kind of -- or your trends of flattish top line so far in the fourth quarter and your implied guidance being similar to that, I assume pricing is at least the same as the third quarter, if not accelerating, given the increases. So volumes in the third quarter were positive. So I'm wondering where across the portfolio, specific segments, et cetera, you might be seeing the deceleration of the trends? And Carol, if you could very quickly just confirm, in the CapEx for next year, is the full $30 million decline this year carry over into next year? And how much is in the restructuring for CapEx next year?

So, thank you, Phil. So if we look at just kind of trends as we head into Q4, again, I mentioned that October is kind of tracking in line with last year trends, with obviously, with still 2 months to go. Food, we expect modest growth overall with Latin America and AMAT positive. North America, as Jerome talked about, we do have some negative trends, especially as it relates to the fresh red meat market. He gave you some of that data. We're really not expecting any benefit from Europe to possibly having some downward pressure. Diversey, again, Jerome highlighted all the strong emerging market growth. North America, we do have some risk, especially that might trail from the government shutdown, and we expect it to be flattish. We will have some improvement, we believe, from our distribution channel because the destocking that we experienced in Q3, we don't expect that to continue into Q4, but we're not really expecting a pick up and, again, Western Europe not to provide any momentum. For our Product Care business, we do expect some growth on constant currency. However, we'll have some negative FX that will affect all of the businesses. So that will be an impact. And as we look at CapEx, yes, the $180 million to $200 million does include the $30 million carryover from 2013. And the $180 million to $200 million includes approximately $40 million relative to restructuring capital.

Your next question comes from the line of Philip Ng with Jefferies.

On the I&L segment, there was a bad debt expense during the quarter. How should we think about that going forward? Will that reverse? And I guess stripping that out, if I look at EBIT margins overall for the full year, it's kind of flattish. Should we expect a more -- a bigger margin improvement next year with the European restructuring kicking in?

Okay. So let me -- I'll address the -- on the bad debt expense. It was a very unusual situation. It's a specific customer that had grown quite substantially on a year-over-year basis. And as they were trying to manage that growth, they ran into certain issues. We are still pursuing collection of that bad debt. We're awaiting on certain court actions within the specific country on how they will recognize that customer's petition for relief on certain items. So it's a very fluid situation, and it is unusual for us to have that large an amount specific to 1 customer. So we would not expect it to continue. If we're successful in our collection pursuit, then we would be able to reverse that. As far as margins, and Jerome may have some more specific comments, but we do expect Diversey to improve its margins as we move forward, especially in 2014. Because they -- as he's highlighted, we've done a lot in terms of implementing cost synergies, the realignment of the organizational structure. We're really not commenting specifically at the divisional level as to what we expect. But we do expect improvement, just as we do with all of our businesses, to have year-over-year improved performance.

Actually, what we need to do, Phil, is to refer to our Investor Day. There is a road map there and it's still intact.

Your next question comes from the line of Rosemarie Morbelli with Gabelli & Company. Rosemarie J. Morbelli - Gabelli & Company, Inc.: You talked about getting the cost increases via price increases. Could you also touch on what you are doing on your purchasing and whether you could pass through half of what you are getting and then the other half by benefiting from changes you are doing with your suppliers?

Well, our objective is to pass, clearly, all of our cost increases. There is no way out. And this is what had mostly affected the performance of Sealed Air over the past few years. And it has reflected in declining EBITDA percentages year-over-year, much too often in our history. So it's a question of discipline. And when we just can't pass those and when we have to accept as a fait accompli, that a given product line has commoditized too much, we need to change the service model. And if it still doesn't work, we need to accept that this is a product line we don't necessarily want to be in. And you've got lifecycles in products and product lines, and you've got to accept them.

Your next question comes from the line of Anthony Pettinari with Citi.

At the Analyst Day, you detailed your Earnings Quality Improvement Program, and I was just wondering as we approach 2014, can you give us any updated color on how you would expect the benefits of that program to be distributed between 2014 and 2015? And then when we look at the 2 restructuring programs, in total, is it safe to say, again, that Diversey is going to see the biggest kind of margin improvement as the result of restructuring in 2014?

So I guess we're not providing any information on 2015 at this time. We did, as it relates to the restructuring programs for Analyst Day, I did break down how we expected the costs to play out for 2013, 2014 and 2015. That's largely stayed the same. Actually, if you look at all of the restructuring, all 3 of the divisions have benefits from the restructuring program. At this time, Food Care and Diversey Care, specific to the restructuring, would be approximately the same benefit. We do -- there are a lot of things for Diversey Care, and they obviously have the greatest possibility for improved margins just because of where their margins currently sit.

There are no remaining questions in queue. I would now like to turn the call back over to Mr. Jerome Peribere for closing remarks.

All right. Well, thank you, all, for your participation and your very good questions on the call today. Confidence that our plan to improve Sealed Air's quality of earnings is underway, and this third quarter performance is a true testament to our leadership team and our employees and their commitments. There is clear direction for our business, and we're confident that we have the right strategy in place, and we are watching quarter after quarter on the progress of this strategy. We focus on providing significant value and innovative solutions to our customers. We need to become more nimble, and we are taking actions towards that and all of this, in order to create our better way for life, which is our vision. Thank you very much. I look forward to talk to you on February 6. Bye-bye.

Ladies and gentlemen, that concludes today's conference. Thank you for your participation. You may now disconnect. Have a great day.