Good day, ladies and gentlemen, and welcome to the Quarter 3 2013 Sonoco Earnings Conference Call. My name is Celia, and I will be your operator for today. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to your host for today, Mr. Roger Schrum. Please proceed, sir.

Thank you, Celia. Good morning, and welcome to Sonoco's 2013 third quarter earnings investor call. This call is being conducted on October 17, 2013. Joining me today are Jack Sanders, President and Chief Executive Officer; and Barry Saunders, Vice President and Chief Financial Officer. A news release reviewing the company's third quarter financial results was issued before the market opened today and is available on the Investor Relations section of our website at sonoco.com. In addition, we will refer to a presentation that is posted on the investor site during the call. Some of you may be experiencing some technical problems receiving our -- getting on our website right now. We have sent out a link to most people over Thomson Reuters, as well as a press release that indicates where that link for the presentation is. However, if you would like to contact us directly, we will be able to send you the press release -- the presentation. Just call us at (843) 383-6748. I'll briefly remind you that today's call may contain a number of forward-looking statements that are based on current expectations, estimates and projections. These statements are not guarantees of future performance and are subject to certain risks and uncertainties. Therefore, actual results may differ materially. Additional information about factors that could cause different results and information about the use by the company of non-GAAP financial measures is available in today's news release and of course, on our website. Now with that, I'll turn it over to Barry.

Thank you, Roger. I will begin on Slide 3, where you see that this morning, we reported third quarter earnings per share on a GAAP basis of $0.59 and base earnings of $0.63. These results were at the top side of our previously provided base earnings guidance of $0.59 to $0.63 per share, as we had a very solid quarter and we did have a little tailwind from a lower-than-expected effective tax rate. Before reviewing the base P&L for the quarter, I will mention that a reconciliation of the GAAP to base earnings is in today's press release and summarized on this slide. But the difference between GAAP and base earnings in this year's quarter is due to restructuring charges of $0.04 per share, related to previously announced plant closures, most notably 2 thermoforming plastic plants. Turning to Slide 4, you find the base P&L where you see sales were $1,228,000,000, which represented a 2.7% increase over the prior year, driven by both improved volume and higher selling prices, both of which will be discussed in our review of the sales bridge. Gross profit was $224 million, which was $17.8 million or 8.6% higher than last year, with our gross profit margin improving to write at 18.3% versus 17.3% a year earlier. Selling and administrative expenses and other charges were $118.5 million, up 4.4% due primarily to merit and other inflationary increases. Thus, EBIT was $105.5 million, up almost 14% over last year with our EBIT margin at 8.6% compared to 7.8% last year, and you'll see all of the drivers of the change in the EBIT bridge in just a moment. Net interest expense was $14.3 million, which was slightly lower than last year due to lower debt levels. Income taxes of $28.5 million were higher year-over-year due to…

Thanks, Barry. Let me add some additional thoughts on our third quarter performance, and talk briefly about the remainder of the year. Obviously, we are pleased with the quarter as our portfolio of businesses produced record sales, record gross profits, a 15% increase in base earnings and very strong cash flow and free cash flow. Through the first 9 months of 2013, we've produced $421 million in cash from operations and $187 million in free cash flow, both of which are records. As Barry mentioned, the strong performance has resulted in our raising our expectations for full year free cash flow to around $190 million. We should have available cash on hand to pay off the $118 million in maturing notes on November 15. And along with the other debt repayments we made earlier this year, we should meet our commitment to reduce our debt levels back to a level consistent with our credit rating. Our efforts to optimize our business has resulted in a 100-basis point improvement to gross profit margins in the quarter to approximately 18.25%. And this is our highest gross profit margin in 3 years. A key driver for our margin improvement came from nearly $14 million in productivity, of which more than half, or about $7.8 million, came from our Industrial businesses. In addition, our Consumer Packaging and Protective Solutions segments also produced strong productivity during the quarter. Let me make some specific comments about our businesses relative to the quarter. Consumer Packaging EBIT margins improved to 10.4%, which was up more than 100 basis points from last year due to strong productivity and operating efficiency. Our flexible packaging operations continue to show improvement with volume growth, helping leverage productivity. Composite can unit volumes were essentially flat year-over-year, but the business benefited from a strong…

[Operator Instructions] The first question comes from line of George Staphos, Bank of America. [Technical Difficulty]

[Operator Instructions] The next question comes from line of Alex Ovshey, Goldman Sachs.

So on the productivity line, a very solid performance, $14 million and, Jack, you mentioned that $12 million to $14 million is what the historical run rate is. I mean, if you look forward over the next 4, 6 to 8 quarters, do you think you could drive that $12 million to $14 million productivity number over that time frame per quarter?

That's exactly what we expected it.

Okay. And then on the consumer side, I believe we were in quarter 7 of volume erosion. What are your customers telling you on the volume outlook over the next couple of quarters? Is there any light at the end of the tunnel to actually see some volume growth in your key end markets?

Well, actually, we actually saw some volume growth on the consumer side in Q2, and then we saw some flat to -- obviously it was flat this quarter. Anecdotally, as well as some other companies have reported, and they're continuing to see some flattish consumer volumes out there. I have got to believe that the uncertainty that's being created in Washington about the future is impacting how people look forward about -- to spending and what they're actually spending and where they're spending their money. So until that gets resolved, I can't really see significant movement in volumes.

Got it, Jack. And one question for Barry. Barry, do you have any initial feel for what your pension expense may look like in '14, given the move up rates and pretty strong equity market performance this year?

We have not updated our estimate for 2014 at this point. We will doing so over the next month or so, Alex, and be presenting our preliminary estimate of that at our Analyst Day in early December. It is fair to say with the higher discount rates that we would expect some improvement in our pension expense, lower pension expense next year versus this year. But we're not at the point of quantifying that, because there are so many moving pieces that impact that calculation.

Next question comes from the line of George Staphos, Bank of America.

I guess I'll ask 3 questions, and I'm not sure if maybe you already covered this with Alex. I guess the first question, in consumer, in the press release, you mentioned that you had some difficulty with volumes. I thought you said, in Injection and Thermoforming. But then it sounded during your remarks that really the issue, if you had one in consumer, and actually -- you had nice margin, I'm not disagreeing with that, it was more around productivity with blow-molding. So which of those items was really your bigger consideration and problem in the quarter?

No doubt it was the operational issues in Blow-molding, was bigger than the volume impact in both Injection Molding and Thermoforming.

Okay. Now I thought from the last quarter, you would put some of your best folks on Plastics to resolve some of these operational issues. Are you where you had expected to be, and it's just a slow ramp? Or did you not make as much progress in Plastics as you had expected?

Well, I think you have to put that into context. We did put some of our best people to improve Plastics and part of improving Plastics was Thermoforming. Thermoforming is very much improved operationally, and we're pleased with where that business is and the direction that it's heading. The operational now issues -- the operational issues on Blow-molding, we have put a lot of good people in place. We believe that we're going to continue to see improvement quarter-over-quarter, but those things take a little time. I would tell you, we've done it before. We did it with Flexibles, we did with the Packaging Services business that you now see. So it's coming, it's just a matter of them getting their feet on the ground and getting things going in the right direction. I believe, as I said, we're going to see continued progress going forward.

Okay. Jack, my last question and I'll turn it over. You mentioned that you have some caution as we go into the final quarter of the year. Is it because one of your businesses or a few have dropped off in October versus what you were seeing in the first quarter? Or is it more what you were seeing, I think before in answering Alex's question, you're just trying to build in some shock absorber here because, who knows what kind of impact the discussion, let's call it that, in Washington, will ultimately have on the consumer in your business?

It's much more the latter. We're just looking forward, trying to understand the environment we're operating in. Taking the information we have about our current run rate, so just projecting them forward. It is common, however, for us to see a drop in run rates on our Industrial businesses as we get into the November, December time frame, as well as Consumer businesses tend to have some fall-off after the holidays or right as we get into that November, early December. So we're just projecting forward based upon our history.

The next question comes from the line of Ghansham Panjabi from Robert W. Baird & Co. Ghansham Panjabi - Robert W. Baird & Co. Incorporated, Research Division: On the positive price cost in consumer during the third quarter, should we expect a reversal in the fourth quarter? And I guess, I asked because resin prices did pick up towards the tail end of the quarter, and some of your competitors have sort of called that resin impact for them, specifically.

Yes, certainly, we did see a positive impact on our Plastics business in resin for the third quarter. We don't see, repeating in the fourth quarter. We actually may turn a little negative on us as we look at that. But -- then some of what we saw as positive price/cost on the consumer side will remain as we move into the fourth quarter. Ghansham Panjabi - Robert W. Baird & Co. Incorporated, Research Division: Okay. And then on the -- sticking with consumer and diving into the flexible packaging side, it seems like one of your large customers made an announcement in July about a large plant in Monterrey, Mexico. I guess it was biscuits and cookies, and it's quite a large investment for them. How should we think about that as a potential opportunity for Sonoco? Do you have plans to follow them down there? Or you're going to ship from North America? How should we think about that?

Well, I certainly think there's going to be opportunities for us to work with this customer, to supply their new facility in Monterrey. And I think it's going to be, potentially a combination of both. We'll have to see how it develops over time. Ghansham Panjabi - Robert W. Baird & Co. Incorporated, Research Division: Okay. And then just one final clarification. I'm sorry if I missed this, but what is driving the free cash flow upside?

For the full year, our free cash flow estimate has been improved, largely because working capital is being very effectively managed, rolling below our targeted levels. But we've also had lower cash tax payments than we expected, when we started the year. So that's been adding notably to our cash flow throughout the year as well. Ghansham Panjabi - Robert W. Baird & Co. Incorporated, Research Division: Is that half-and-half, between that $40 million improvement?

Year-to-date, I would say the cash tax improvement has been about $45 million, that will probably improved to almost $60 million by the end of the year. And a lot of that is due to the credits on the biomass boiler that we're putting in place, accelerated depreciation for that project, the benefit we get from that, et cetera. So there is about $50 million or $60 million of unusual items in this year's estimate for cash from operations and free cash flow that we wouldn't necessarily have going forward.

We have a question from the line of Al Kabili with Macquarie.

I just wanted to just get a quick -- the caution that you highlighted in -- piggybacking on George's question. How was the trajectory in inter-quarter? Did you see a little bit of tail-off at the end of the quarter that makes you a little more cautious? Or was it pretty steady? How would you characterize that?

Well, I would tell you, Al, it was -- it's classic. It starts out strong in July, August probably drops off as it normally does, and it picks back up in September. So it was almost a classic pattern for us.

Okay. And then on the Tubes and Cores side, where you'd seen a little bit of growth in Europe and U.S., as far as end markets, is there any appreciable variances between the various end markets that you're seeing that growth, is it pretty broad-based? Or are their some that you're seeing greater strength than others there?

Well, as I think as we look at it, Specialty and Textile, we're up in the quarter probably the most. And then Film and PNP, we're up slightly.

Okay. And then final, just questions on the blow-molding and Alloyd business. So on the operational issues on the blow-molding side, to the degree when you get your operations where you essentially want them to, what do you think that contributes in terms of upside, or another way of asking it, sort of how much do you think blow-molding issues on the operational side cost you in the quarter?

Well, I think if you just think about what that inefficiency cost us in the quarter, it was some $2 million to $3 million. So when we get those on to -- online that you can calculate that impact.

Okay. And then on the Alloyd business, which is still continuing to run, but a bit below your expectations, is there any -- what's the plan in place and opportunity to sort of improve that trajectory going forward?

Well, as we've done in other cases, we've introduced some new talent into the business, some proven talent inside the company. And so we expect that to begin to improve as we work together to improve that business with the traditional staff there. We're also looking to grow the top line, that's a major focus for us, is to get out and get some more revenue into that business. I think it's going to follow the trajectory of the other businesses, but I do expect it to start improving as we begin to grow the top line more effectively, as well as looking at to reduce some of the costs in the business at the same time.

We have a question from the line of Phil Gresh. Phil M. Gresh - JP Morgan Chase & Co, Research Division: Just one clarification question, following up on Ghansham, around the free cash flow. I guess to ask it a slightly different way, if you were to think about the free cash flow outlook you gave us at the Analyst Day in December, you gave us a 3-year look, is there anything in these working capital or cash tax benefits that you actually see as kind of sustaining into 2014? Or is it truly kind of onetime across-the-board?

I would expect that most of what we've seen this year is really onetime, obviously. We've got our working capital managed pretty aggressively right now, and to see significant improvement year-over-year from that would be pretty unlikely. It would just -- we expect it to grow as sales grow. And as I mentioned just a couple of minutes ago, we have had quite a few unusual cash tax payment benefits this year that wouldn't continue into next year as well. Phil M. Gresh - JP Morgan Chase & Co, Research Division: Great, okay. That's helpful. And then just on capital allocation. Yes, I realize you're going to be paying some debt down here in the fourth quarter. On a net basis, you're kind of approaching your target levels. So how do you think about capital allocation moving forward? Are you thinking about, kind of more of an M&A focus, might you start thinking about doing share buybacks? And is there any opportunity here to, to get a little bit more aggressive on the leverage at some point, if you were to do buybacks? Or maybe just talk about your philosophy around that at this point?

Well, I always appreciate the opportunity to talk about this particular subject. As I said many times, I think that we can, for now, we see the portfolio as being complete. So we're looking to make bolt-on acquisitions and fill in capability, as well as geography and the different businesses where we see that is -- to be necessary. So we're actively looking for those types of acquisition and acquisition opportunities. Having said that, if you just think about changing from growing a business with different technologies, to improving the different technologies that you have. The number opportunities that we're probably going to see are going to be somewhat less than we've seen in the past, so that should generate some free cash flow over time, which we have to do exactly how we create that -- the greatest value for shareholders with that excess cash. We're in the process of doing that now. And I suspect by the time we get this note paid off in November, we'll be in a point of beginning to talk about how we will utilize any excess cash. But what we see going forward is certainly a continued focus on acquisitions designed to help build our technologies and improve our technologies that we currently have. And then returning any excess cash in a way that creates the greatest value for shareholders. Phil M. Gresh - JP Morgan Chase & Co, Research Division: Okay. So you would rather, I guess, continue to stay on the more conservative side on leverage to be flexible around those opportunities I guess, is that the way to think about it?

Absolutely, maintaining investment-grade credit is a foundational figure for this business, and we continue -- we will continue to do that.

We have a question from the line of Adam Josephson, KeyBanc.

In composite cans, can you talk about what led to the declines in powdered infant formula and coffee? And also the decline in trade sales in metal ends, and to the -- and whether that's sustainable?

Well, I think that -- let me talk to metal ends first. Metal ends is really driven by one of our larger customers who made the decision to go to a sanitary end versus an easy opening end. And that is economy-driven. I mean, that's really driven by this current situation in the economy and trying to save a few cents on a can. So I think that, that could potentially reverse itself if the economy improves, and I think that, that was an unusual item. As far as composites, I think last quarter, powdered formula is actually up year-over-year. It's down -- that's going to move all around. I certainly think coffee and powdered beverage, there are some implications or there are some format changes that are kind of more single-serve focused. I think we've seen that now for several quarters, and it will change quarter-over-quarter, depending upon how that works. But I don't see any major moves across, going forward in those formats, so.

Okay. So you don't think that -- those shifts affect your ability to take net pricing? Or just to raise prices to offset inflation in the quarters to come?

Well, no, not against the competitive format as we need to. I also have to point out that we are aggressively growing the can internationally with opportunities we see, Poland, a new line going into China, a new facility in Malaysia, as well as many more opportunities we're currently pursuing, and domestically, looking at converting some self-manufacturers, out of self manufacturer to allow us to do it for them. So we're aggressively working on growing sales in composite cans as well.

Thanks for that, Jack, and just one more. You've obviously been in your current role for a few months now. What opportunities do you think still exist to improve the company's operations? And I guess on pricing, how would you compare your approach to that of your -- to the company's previous approach? And whether it's any different now than it was before?

Let me talk to pricing first. I don't think it's any different than it's ever been. We want to try to recover costs that we incur, raw material costs, as well as other costs with pricing where we can, so that's consistent. I believe we can get better in productivity. I believe this $12 million to $14 million per quarter is our target. We're not going to change that target. It's available to us. And we are spending considerable times and monies training to implement what we've called Sonoco Performance Systems, or SPS. It is a multiple platform method to systemically drive productivity over time. So I think as we roll that out and we better train our people, in standard work and analytical troubleshooting and all the components of it, we'll get better and better over time, to be able to maintain that $12 million to $14 million per quarter. So that's our focus, and I believe that's where we're going to continue to drive the company.

Next question comes from line of Scott Gaffner.

Just wanted to follow up on pricing. Can you talk a little bit about the pass-through mechanisms that you have in either the Flexibles business or in more of your Rigid Plastics businesses? How much of your contracts or business are on automatic pass-through mechanisms or -- and what might the lag be there?

Yes, for the most part, and I'll talk to consumer in general, because it would encompass those and they're right in the same range. It's sort of a 75% contractual pass-through basis, and it's usually lagged about a quarter. Now it goes from 30 days to 5 months, but on average, it's about a quarter, not dissimilar to the same mechanism you have on the industrial side, except that more of the business is under contractual pass-through.

Okay. And then when I look at OCC, I think you mentioned you expected it to be flat here in the fourth quarter?

I did. I was wrong.

Is there anything you're seeing with OCC currently that gives you more or less confidence in the forecast for OCC in the fourth quarter?

Well, I think what I actually said is from the third quarter, I expect it to be flat. I think it actually went up about $5, didn't it? So that's why I'm saying I was wrong. I think right now, it's fairly priced in the markets, supply and demand seem balanced. What would normally happen in this situation is you'd see a drift down in November, and then again in December, as the volume demand kind of falls off a little bit as it normally does. If there are greater number of mill closures than we expect you'll see it fall off more. If it's in expectation, it's either going to be flat or drift down very slightly. That's my best guess.

Understood. Just lastly, you mentioned I think in Consumer, a pretty normal, strong July, weaker August, better September. But can you talk maybe about the promotional activity you've seen or you saw during the quarter? And then anything you're seeing now, in the fourth quarter?

Well, certainly the ramping up with the new Energizer business, I think if that relationship is developing well, and certainly see some more opportunities to create value for Energizer. We're going to be trying to work with them to do just that. But other business as well, we've seen some strong promotional activity toward the -- during -- in the third quarter, and continuing into the first part of this quarter as well. So we're very pleased with that. As I said earlier, we made some changes in personnel in that business. We've put in some strong talent, and as usual, people make the difference, and that's really what we're seeing.

The next question comes from the line of Chris Manuel, Wells Fargo Securities.

I have a couple of questions for you. First, in your Industrial businesses, I think you spoke about Europe being up kind of mid-single digits and North America down a bit, can you talk about how you anticipate -- how sustainable those trajectories are -- is? Is it just kind of some noise here? And in the near-term, do you think North America gets back to kind of mid-single digit growth soon? Do you think that Europe can kind of stay in this range for the next few quarters?

Well, I think Europe -- I think that in Europe, we're going to continue to see growth in the frontier. We have a new facility that we're looking at. Actually, several new facilities in different countries in what we call the frontier of Europe. So I would expect that to continue in that double-digit range. That's certainly that we're trying to push that through. What we call legacy Europe has been flat. It was flat again, but we were up about 4%, I believe in legacy Europe, somewhere along that lines. But that was share gain. I do think the economic situation in Europe created some instability in the market. I think that there might be some structural changes that occur in that marketplace. So if that does happen, I think that those gains will be sustained, not continuing to improve at that rate, but sustained from where we have them today. And I do think you're going to begin to see a longer, slower improvement begin in Europe. I think you'll begin to see the economies grow much like they did here, over the last couple of years at 1% to 2% type range is what we would expect in the legacy parts of Europe. Domestically, we continue to see these types of small gains. I do think that's sustainable. Actually, I think if the federal government would get out of our way, and solve the budget issue and just give us some clarity to the future, we would see an accelerating rate of growth on the industrial side of the businesses. South America is the one area that is probably the weakest area around the globe right now, and when I say that, I'm more specifically talking to Brazil. Their economic situation now, I would say compounded by their social situation, is going to create a pretty rough environment, we think, for the foreseeable future.

That's very helpful. If I could just switch gears one second to the consumer side of the business. What are your -- if you were to take the pulse of your customers, what's their tone or tenor? Are they all going full steam ahead with new product introductions, and [indiscernible] pulled things back a bit? Have they started to -- any changes in how you would perceive their tone for the next several months over where it's been?

Any perceived -- I would say probably not. I would say it's cautious optimism. I think they're optimistic about what can be, again, I'll repeat. It's up to Washington to provide some leadership and give us some certainty about what's going to happen in this economy.

The next question comes from the line of Chip Dillon.

First question is just, and you might have reviewed this, but can you give us some idea of where you see full year CapEx going next year? And what's the budget -- what will you see coming in at this year, when it's all said and done?

I think its about $205 million, this year, somewhere in that range, and we would expect that to drop next year between $175 million and $180 million.

Okay. And again, I guess the biggest difference there is the biomass boiler being completed?

Correct.

Okay. And then in the past, you all have talked about having new products account for a certain proportion of your [indiscernible], $250 million has rung a bell, sort of as a 5-year plan in the past. And you mentioned, Jack, that you guys, that's one of your key 3 ways of going forward is, is continuing to develop products. Where do you see that in the future in terms of how much of the growth that we see from Sonoco do you think will come from products that aren't in exact existence today?

Well, certainly, one time [indiscernible] and the others to begin to capture the new products that we have coming out of our Protective Solutions business, which are significant. We need to begin to do that, so that we can publish this number accurately. I would tell you right now, Flexibles growth is pretty strong there. Plastics, not as good as it should be, and that's really self-determined. We need -- we want to go and push our ability to manufacture in that business first. Which -- we've talked about that, once we do, we expect that'll ramp-up very quickly because it grew very fast in the first few years that we had it, and now we just have to kind of get back on level set. So I expect new products actually to ramp-up going forward in speed, especially as we roll out our end use market concept and being kind of more consumer or -- excuse me, yes, consumer-oriented and understanding what the consumer wants in packaging. Our new seal tab is out now in the marketplace, I think Goldfish is now about in that, so I can say that. But you can buy it that way, so we're pleased with that. But I would expect that to ramp-up. I think that $250 million number is where we need to move toward, and I expect we'll be there.

The next question comes from the line of Phil Ng, Jefferies.

Protective has actually grown pretty nicely since you made the Tegrant acquisition, but margins are probably lighter than we would have expected. I understand part of that is a mix issue around Alloyd, but when we look out to '14, does that correct itself, and how should we think about the margin profile?

Well, again, you're right, it is Alloyd centric. And part of the margin this quarter was the startup cost of the plant in Mexico to get it up to speed. Quite honestly, I'd like more of those. And we're going to have another one coming on in Kentucky. So that doesn't bother me, because we get the positive -- that will be coming shortly. But if I look at the business, of the 3 units, the 2 units, the ThermoSafe unit, and then the Industrial and Consumer Protective business, as we define it, very pleased with those businesses, their growth rates and their margin profiles. It's about solving the Alloyd piece, and we are focused on solving the Alloyd piece.

Should we expect the Alloyd piece to reverse itself going into '14, or still going to be a headwind next year?

I think it will be improved in '14, yes. I can't -- will it be where we expect it to be? Probably not, but it will be improved.

Got you. And then your Display business was quite strong during 3Q. Can you kind of help us parse out what part of it was tied to Contract Packing versus Display? And going to '14, how should we think about the normalized run rate in that business from a growth standpoint?

I would tell you, it's a combination of both. Very pleased with our Display business domestically and how well it's doing, very pleased with the Pack Center business in Europe, and what we're doing there. I think part of the solution for Alloyd is this connection with our pack centers. We're having some success of pulling business to our pack centers. That's a very strong positive. I expect that to ramp-up. But I would tell you the Display and Packing business is across the entire business.

The reason why I asked is because, if you look at the Packaged Food volumes lately, it's been softening a bit, but your Displays business historically has been a pretty good leading indicator for promotional activities. So just wanted to get a sense, is that what you're seeing? You're seeing pretty active promotional activity from the customers?

We are.

Okay. And then, just one last quick question. I know there's now to try and overlap, one of the bigger flexible packaging guys out there have announced a pretty significant price increases, I think starting in Q4. One, have you seen that in the marketplace, and does that benefit you at all?

Any time that we see price increases in the market, if it's to recover cost, it's a positive thing. And I can assure you we'll do our share, if we see our cost increasing, we'll have the move our prices but most of that's contractual. So it will happen as it should happen.

We have a question from the line of Todd Wenning, MorningStar.

Most of my questions have been answered, but could you provide us with an update on any competitive changes you're seeing from composite cans in Southeast Asia?

Not a lot of competitive changes. The opportunities are significant, however. There's certainly -- the opportunity to continue in what we've called the upper end stacked chip market, which is the more branded stack chips that we know, but there's even a greater opportunity in the domestic chip market. And we've come up with a pretty inventive solution. And the numbers there are significant, so we expect to be continuing to develop that domestic chip can, and looking for conversions in that over the course of '14. But nothing competitively of significance.

Got you. And then in terms of Tubes and Cores in that region, have there been any trends in that area?

Our Tube and Core business throughout Southeast Asia, and particularly China, has improved. And we expect continued growth through the '14 time frame.

Okay, great. And then just finally, what demand trends are you seeing from beverage customers in Plastic Packaging?

Well, we have a very limited amount of beverage in plastic, mostly just nutritional-type drinks and that demand remains strong.

We have a question from the line of Steve Chercover, D.A. Davidson. Steven Chercover - D.A. Davidson & Co., Research Division: Just a couple of quick ones. And I know we've talked a lot about Consumer Packaging. I was wondering if you've seen any shifts into frozen juice concentrates and doughs because it's my impression that when consumers are trading down, that's when those things start to perk up?

Yes, I would tell you that dough has been pretty strong, and certainly pleased with that. Frozen orange juice concentrate, not so much. We're continuing to see the ongoing trend that we've seen from the last several years now of year-over-year reduction. Steven Chercover - D.A. Davidson & Co., Research Division: Okay. But that's a kind of a mega trend as opposed to any kind of any secular issue associated with consumers tightening their wallets?

Yes. Steven Chercover - D.A. Davidson & Co., Research Division: Okay. And my second question is, are you seeing any tangible improvement in your businesses that cater to construction and infrastructure, I guess specifically to Sonotubes and industrial reels?

Well, yes, I have to go back and look a little bit deeper for tangible. But I have said, for some time, that I believe the increase in housing is probably what's propping up our Tube and Core business to a degree domestically. I believe that as manufacturing activity actually picks up, it kind of trended down in the middle of the year. I believe as it picks up as we go into '14, and housing stays strong, it may have a positive impact on our Tube and Core business a little bit about what it is now. So certainly, looking for housing activity to continue strong in '14, and looking for a greater pickup in general manufacturing activity.

The final question comes from the line of George Staphos, Bank of America.

I was going to -- just wanted to continue. So at this juncture, aside from normal seasonality, you haven't seen actually any of your business performing below that in terms of what drove your guidance for 4Q, is that fair?

That's fair.

Okay. And then secondly, one thing I noted in the release, SG&A was up, depending on which version I use, either the slide deck or the press release, between I think 4% and 7%, and obviously, revenues weren't up nearly that amount. Could you remind us what was in the increased SG&A? And do you expect it to continue trending at that rate, relative to the other line items in your P&L and for that matter, just business in total?

Yes, it is up just over 4%, about 4.5%. And that is again, primarily due just to normal wage inflation. Incentive accruals for the quarter are actually run just a little bit higher than they were for the same quarter last year, just due to the performance against plan and just other increases. Certainly, nothing unusual in there.

I said, we like the fact that incentives are up in our business. We are doing a better job of managing this business, and certainly want to make sure that we compensate our employees fairly for doing just that.

Sure, no, that's fair, understood. The last question I had, and I know there've been a lot of questions asked understandably on Alloyd, is there a way to quantify what your margin or profit dollars or both, would have been for this segment as a whole, if Alloyd had been running as you would have wished? And I don't know if that's more a revenue problem, because of the consumer environment? Or an operational issue? Any thoughts or clarity there would be helpful.

Well, it's running what we would like, I'd have to go back and take a look at that, running to kind of expectations. I think it would improve the entire -- and if you took out or considered the start up in Mexico, it would probably improve the operations $1.5 million.

On a combined basis?

Yes.

There are no further questions at this time.

Thank you, Celia. Again, I'm going to apologize for any technical issues we have starting with the call. We'll certainly see if we can work on those in the future. As Jack mentioned, Sonoco will hold its annual Analyst Meeting in New York on Friday, December 5, and again, it'll be at the Grand Hyatt Hotel. Breakfast will begin at 7:30 a.m. Eastern Time, and the presentation will start at 8:00 a.m. Jack, Barry and members of our Executive Committee will be present, and we'll provide a strategic overview, along with financial updates and outlooks. We'll conclude with questions and expect to be done by no later than 10:00. Electronic invitations are being sent out today. Hopefully, you won't have any faculties with that. Those not receiving an invitation should contact my office by e-mail at corporate.communications@sonoco.com, or by calling my assistant, Robert Hyder at (843) 383-3450. For those who cannot attend in person, we will webcast the meeting and post the meeting's presentation on our website at sonoco.com. Again, let me thank you for your participation today and your patience. We appreciate your interest in the company and as always, if you have any further questions, please don't hesitate to contact us directly. Thank you very much.

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