Thank you, Tracy. Good afternoon, and welcome to Glatfelter’s 2012 Second Quarter Earnings Conference Call.

Before, we get our presentation, I have a few standard reminders. During our call today, we will use the term adjusted earnings as well as other non-GAAP financial measures.

A reconciliation of these financial measures to our GAAP rate results is included in today’s earnings release in the investor slides. We also make forward-looking statements today that are subject to risks and uncertainties.

Our 2011 Form 10-K filed with the SEC and available on our website, discloses factors that could cause our actual results to differ materially from these forward-looking statements. These forward-looking statements speak only as of today and we undertake no responsibility to update them.

And finally, we have made available a slide presentation to accompany our comments on today's call. You may access the slides on our website or through the webcast provider.

I will now turn the call over to Dante Parrini, our Chairman and Chief Executive Officer.

Thanks John. Good afternoon and thank you for joining us today.

Earlier this morning we issued our second-quarter earnings which are summarized on slide three of today's presentation. We are pleased to announce another strong quarter for Glatfelter, with adjusted earnings up 71% from the second quarter of 2011.

During the quarter we earned $0.12 per share compared to $0.07 last year. This is a very good result considering foreign currency impacts that reduced earnings per share by $0.03 in the generally weak economic environment.

Our net sales were $385 million during the quarter, up slightly compared to last year on a constant currency basis. Specialty Papers shipments declined 2.6%, however we again beat the broader market, which was down nearly 5%.

Even with the soft general market we see good opportunities for this business as we enter the seasonally strong third-quarter. Our Airlaid business again had strong growth in our specialty wipes products in North America and we expect this strong performance to continue.

And despite weak markets in Europe, composite fibers was able to hold shipments flat in the quarter.

From an operating profit perspective, Specialty Papers generated $4.2 million versus break-even in the second quarter of 2011. We continue to deliver solid operating performance in this business, driven by ongoing success with our continuous improvement program, maintaining stringent cost control within our operations and excellent execution of our annual maintenance outages.

Composite Fibers operating profit declined 14%, largely due to currency translation which hurt results by $1.3 million. This business is facing weak market conditions in Europe and customers are more aggressively managing inventories.

However, our marketing efforts in metalized and strong customer relationships with major tea and coffee producers have helped us overcome this weakness holding shipments flat during the quarter.

Our continuous improvement initiatives are generating consistent financial results and we completed two important machine upgrades in the first half of the year that are strategically important to the long-term success of this business.

The Advanced Airlaid Materials’ business operating profit increased to $4.6 million or up 24% compared to the second quarter of last year. This is the best quarterly results since we acquired the business, and EBITDA margins improved 190 basis points to 10.9% during the quarter.

Strong growth in North America’s specialty wipes more than offset weakness in Europe and resulted in shipments rising 2% during the quarter. And success with our continuous improvement initiatives is allowing us to improve the cost structure of this business.

During the quarter we also benefited from our share repurchase program and debt refinancing that we completed last year which together improved earnings per share by $0.4. Overall, I‘m very pleased with our results this quarter as well as for the first half of the year with adjusted earnings per share up 36%.

I believe we are well-positioned to deliver another strong year for our shareholders and I’ll provide additional commentary after John gives a more in-depth review of Q2 results. John?

Thank you, Dante. For the second quarter we reported net income of $5.3 million or $0.12 per share compared to $3.1 million or $0.07 per share in the second quarter of last year, after adjusting to exclude the tax benefit from a planned conversion of alternative fuel mixture credits, to cellulose and biofuel credits, and gains on land sales this year and integration cost last year.

Slide four shows a bridge of adjusted earnings per share from the second quarter of last year to this year. Adjusted earnings per share increased this year from higher operating income in Specialty Papers and Advanced Airlaid Materials which ended $0.07 per share and $0.01 per share, respectively to earnings.

Composite fibers results were $0.02 per share lower due to the negative impact foreign currency exchange rates. Lower corporate cost added $0.03.

However, higher pension expense, reduced earnings by $0.02 per share. Combination of lower interest expense from our debt refinancing, in late 2011, and our share repurchase programs benefited results by $0.04 per share.

And finally income tax reduced earnings per share by $0.06, but I would like to remind you that the second quarter of last year adjusted earnings included $0.06 per share benefit primarily from the resolution of certain foreign tax audits.

Turning to slide five, Specialty Papers operating income increased to $4.2 million, representing a very strong quarter for this business. For the first half of the year, Specialty Papers operating profit has increased 26%.

During the second quarter we completed the annual maintenance outages at Specialty Papers' 2 facilities. The outages cost us $19.9 million this year compared with $20.6 million last year.

Net sales for this business totaled $214 million for the quarter, 1.2% lower than the second quarter of last year.

Selling prices increased for nearly all of our products benefiting results by $2.6 million during the quarter. Shipments were down 2.6%, which again beat the broader [indiscernible] market, shipments of engineered products were up nearly 7% from growth in casting products as well as high-speed inkjet products.

We also grew our shipments of form products again this quarter, which were up 4%.

Shipments of carbonless products were down 10% reflecting the general decline in the market and it was a weak quarter for shipments of book products, which were down 10%, although we expect a much stronger fall book season.

Input costs for this business declined $2 million during the second quarter compared to last year. Substantially lower purchase pulp prices as well as favorable electricity prices more than offset higher prices for wood, starch and other raw materials.

Our ongoing continuous improvement initiatives and cost control remain a critical success factor for each of our businesses. And these initiatives generated a benefit for Specialty Papers of $1.9 million during the quarter but this was offset in part by higher SG&A costs and lower power sales.

Slide 6 shows Composite Fibers performance, which was a good quarter considering the impact of the unfavorable foreign currency translation of $1.3 million and start-up costs associated with two machine rebuilds as well as the interruption of external power supply at one of its facilities. This resulted in operating profit declining for this business by $1.3 million to $7.9 million during the quarter.

The generally weak European economy and more aggressive inventory management by customers has lead to more challenging market environment. Despite these circumstances, Composite Fibers held shipments flat during the quarter and generated net sales of $108.6 million, up 1.4% on a constant currency basis compared to the second quarter of 2011.

The translation of foreign currencies resulted in a $9.4 million decline in net sales, while selling prices were essentially unchanged.

Shipments of metallized products grew by 6% this quarter, driven by events like the European Soccer Championships and the Olympics as well as new products we brought to this market. This growth when combined with the growth of technical specialties offset lower shipments in the weak composite laminate market.

Tea and single-serve coffee product shipments were flat compared to last year, primarily due to customers' more aggressive management of inventories.

Input cost for this business were slightly lower and the aggregate was substantially lower prices for wood pulp being offset by higher prices for synthetic fibers and chemicals. As communicated during our previous earnings’ calls, we completed the upgrades of two machines in this business during the first half of the year.

These upgrades improved the general condition, reliability and efficiency of the equipment, while also adding new capabilities. The commissioning of these machines and ramp up to full production during the quarter created some cost penalties.

In addition, our Lydney UK facility had short interruptions in the electricity supply, for which no advance notice was provided. This caused damage to some equipment and increased downtime to clean and restart the machines.

These two factors negatively impacted results by approximately $1 million during the quarter. The utilities servicing this plant is taking steps to address these interruptions and we are hopeful that any impact will be minimal going forward.

The machinery belts we completed were expensive and complex and we have made significant progress with the start-up. We can produce nearly all of the targeted products and we are making progress with improving the manufacturing efficiency.

We expect this progress to continue during the third quarter with all remaining start-up issues being resolved by the end of the quarter.

Moving to slide seven, Advanced Airlaid Materials continues to improve margins and profitability generating operating income of $4.6 million in the quarter, 24% increase in the second quarter of 2011. Net sales increased 2% on a constant currency basis, with shipments increasing 2% led by growth in specialty wipes [ph] products in North America and as expected demand in Europe was weaker than a year ago.

Lower raw material and energy costs benefitted results by $2 million during the quarter. With about 80% of our revenue having cost pass-through arrangements, most of this benefit was offset by lower prices to customers.

However we were able to limit this adverse price impact during the quarter through offsetting negotiated price increases.

Substantial progress has been made to improve the cost structure of this business through our continuous improvement program, and this will continue to be a focus for this business. Despite the negative impact of foreign currency translation that's over $800,000, EBITDA margins for this business improved by 190 basis points during the quarter to 10.9%.

And they're 490 basis points since 2010, our first year of owning this business.

Turning to slide eight, you see an update on other financial matters for the quarter. Pension expense increased $1 million on a year-over-year basis to $2.7 million for the full year and we expect pension expense of $11.5 million.

However, we are not required to make cash contributions to the qualified plan in 2012 and we don't expect to have to make our contributions for the foreseeable future as this plan is overfunded. Interest expense declined $2.3 million during the quarter, reflecting the debt refinancing we completed last year, in which we redeemed $100 million of 7.18% bonds at the end of 2011.

We also had two unusual items during the quarter; the first was that we made the decision to convert a proportion of the refundable alternative fuel mixture credits, which will equal to $0.50 per gallon to the non-refundable cellulosic biofuel credits worth $1.01 per gallon. This resulted in a net benefit to income taxes in the second quarter of $4.4 million.

As a result of this decision, we will be required to return to the Internal Revenue Service, approximately $25 million related to the AFM credits that we previously received.

During the remainder of 2010, we plan to use these converted credits to offset $10 million and expect the cash tax payments. And we will utilize the remainder of the cellulosic biofuel credits by early 2014.

We also completed the sale of 3,345 acres of Pennsylvania timberlands during the second quarter 2012 and realized a $6.4 million pre-tax gain. Aggregate cash proceeds totaled $6.6 million after closing costs.

Slide 9 summarizes our share repurchase programs. In May, we announced a $25 million share repurchase program, and under this program we repurchased 172,000 shares or $2.6 million, during the quarter.

This follows the completion in January of a $50 million program we announced in 2011. The repurchases completed under these programs reduced outstanding shares by $3.6 million, and added $0.01 to our earnings per share during the second quarter, compared to the year ago quarter.

Turning to slide 10, you see free cash flow was negative $2.1 million during the first half of the year. This reflects normal working capital flows, the cost of the annual maintenance outages completed in the second quarter, and increased capital expenditures driven by $7 million for the Composite Fibers capacity expansion.

As is typical with our business, we expect much higher free cash flow in the second half of the year.

In 2012, we expect capital spending to be $90 million to $95 million; this includes $30 million of the $50 million capacity expansion project in Composite Fibers.

And finally, slide 11 summarizes our balance sheet. Our balance sheet remains in very good shape.

We finished the quarter with $23 million of cash and $327 million available under our revolving credit facilities. Our leverage remains low at 1.3x on a net debt basis, so our liquidity remains sufficient to continue to fund our growth initiatives.

This concludes my comments. I will turn the call back to you, Dante.

Thanks, John. Before opening the call for questions, I have a few comments on our outlook which are summarized on slide 12.

Weak global economic conditions are expected to continue in the second half of the year. This affects us particularly in Europe, and continues to result in softer and inconsistent demand in this region for some of our more consumer driven products like feminine hygiene, where our customers are aggressively managing inventory levels, and end consumers are more frequently considering value brand options.

In composite laminates, where more construction and renovation projects are being delayed we’re scaled down. A weaker euro relative to the dollar is negatively impacting our operating results, in total, $2.1 million in the second quarter.

However over time, I believe we’ve performed very well under a variety of circumstances, and we demonstrated this again during the second quarter. In this environment, we’ll remain focused on operational excellence, accelerating our continuous improvement initiatives and improving the product solutions we deliver to our customers.

As I look to the third quarter for Specialty Papers, we expect shipping volumes to increase by approximately 5% compared to the second quarter of 2012. This is a seasonally strong period for book and envelop products, and our market position should allow us to grow our shipments during this period.

The impact of an outselling price increase is expected to outpace overall input cost increases. And non-shutdown related maintenance spending is expected to increase by approximately $2.5 million pre-tax compared to a normal run rate as we strive to enhance machine reliability and overall efficiencies.

Composite Fibers’ shipping volumes are expected to be slightly higher on a sequential quarter basis. We expect modest growth in our tea and single-served coffee products as well as technical specialties to more than offset continued weakness in composite laminates.

Selling prices and input costs are expected to be generally in line with the second quarter, and we expect to resolve the remaining start up issues related to the two machine rebuilds by the end of the quarter.

Global shipping volumes for the Advanced Airlaid Materials Business Unit are expected to be slightly higher than the second quarter of 2012, driven by continued growth in North America. Selling prices and input costs are expected to be generally in line with the second quarter of 2012.

And we expect to see benefits from our continuous improvement initiatives.

In closing, I remain optimistic about Glatfelter’s future. Despite the economic challenges facing us today, I’m excited about the opportunities our business has.

We’re working with customers across each of our businesses in developing several attractive new and next generation products.

We will begin ramping up production of several of these products during the third quarter, which should help us offset the impact of weak economic conditions. Our demonstrated ability to improve and expand our product portfolio through customer collaboration by developing new and innovative products has been a cornerstone of our growth strategy.

And a result of our commitment to new product development for the past several years, we’ve consistently generated over 50% of total revenue from products less than five years old.

Our success has been, and will continue to be driven by key elements of our strategy. A well balanced and diversified product portfolio with leading market positions, an ability to develop new and innovative products and expand customer relationships through superior customer service, and an ability to consistently improve the efficiency and effectiveness of our operations.

When combined with consistent cash flow generation, a strong balance sheet and initiatives such as our share repurchase programs and debt refinancing, I believe we are well-positioned to continue to generate substantial value for our shareholders.

Now I’d like to open the call for questions.

Two questions. If you go back to that guidance for the third quarter, particularly in composite fibers, it sounded like you’ve got start-up costs that are going to continue in the third quarter.

I wondered if you could just give us some sense of how they would look relative to the start-up costs in the second quarter. And then also the fact that you won’t have these power disruption issues presumably in the third quarter, what that adds to the equation?

Sure, Mark. The combination of those two factors in the second quarter cost us about $1 million.

And the split between those, it’s about half, each one was about half of that. So we would expect some cost to continue on the commissioning and ramp up of the machines, although not quite at the same level as second quarter.

And we are hopeful that some of the issues related to the electricity delivery have been resolved and that can go away completely although that’s not completely in our control. So that’s I think the best I can dimensionalize it for you, but certainly if there is no electricity interruptions, we should see benefits from that and then the cost related to the commissioning of machine should decline somewhat.

Okay. And then just staying with that business for a minute, you sounded like coffee shipments had kind of flattened out year-over-year.

What’s your current rate on sort of underlying growth into the single-served coffee market for you right now if we look at it on an annual year-over-year basis?

Mark, you’re correct that we had some flattening out in our overall single-served coffee business. This has been a very high growth -- rapid growth business for the last number of years.

Our outlook for this business continues to be optimistic in terms of its growth prospects, and we view this current near-term period as more of an inventory adjustment. And from a big picture point of view, we still expect to see some level of growth in aggregate in 2012 versus 2011.

Dante, anyway to kind of put a set of brackets around what kind of growth we might expect?

Not really.

Okay. And then stepping over to the book publishing market, you had a big decline there, it sounds like some of that might have been just seasonal issues.

What’s your sense for kind of the overall book paper market right now, and what the rate of decline looks like in that business?

I think there is some timing related issues that are playing out in Q2 and Q3. As we said before in previous calls, we estimate that market declined at about a 5% rate on a year-over-year basis.

And as John mentioned in his comments, we do see some strength in terms of seasonality, the fall book season and expect to see a better performance in Q3.

Okay. And again staying kind of with that Specialty Paper business, Dante, a kind of follow up that we should be thinking about from your perspective from this Appleton and Domtar deal?

No.

Okay. Another issue, you noted that in the Airlaid business, you were strong in specialty wipes and I usually think about that business as being more kind of a femme hygiene business.

Is the business mix kind of changing permanently there?

You are correct in saying that the largest segment of our Airlaid businesses is fem-hy. We’ve been working very diligently to make sure that we provide innovation and service to our fem-hy customers that enables them to gain confidence in Glatfelter and feel that they are getting best value from us; at the same time, working on expanding our innovation and product platforms and collaborating with customers to come up with new solutions that fit underserved and unmet needs.

And so over the last number of quarters, we've been engaged in a variety of activities in terms of business development and new product development and we are starting to see the fruits of our labor generate results through the P&L. I expect this to be a permanent part of our portfolio as we look to the future.

Okay. And then the last thing I wanted to ask about was the land sales, you gave us the cash proceeds, I wondered if you could give us the actual sales price of the land?

The average sale price was about $2,000 an acre and this was all land in Pennsylvania. So if you think about some of our past sales, I think we've averaged around $2,500 an acre on the mix of properties from Virginia, Delaware and Pennsylvania.

Clearly, the Pennsylvania lands are typically sold for a lower value than the Delaware and Virginia lands. So again, this is about $2,000 an acre and was all in Pennsylvania.

Yes, it struck me, John, for Pennsylvania land for you guys that actually was above what I would have expected. Can you give us some color on the tax implications of that sale?

The tax rates that apply to these are a little bit high, about 42% in total, is what we recorded against those land sales. The biofuel credit should help us offset much of that taxes are on the federal side.

So that conversion will help us to make these a little bit more tax efficient, but the tax rate tends to be quite high.

Okay. And do you have any visibility into sort of the land sale pipeline into the second half of the year?

There are some potentials, but again I think it’s going to be on a relatively modest scale. The Virginia and Delaware areas, there is very little activity.

So anything we sell will likely come out of Pennsylvania and be quite modest I’d expect.

First, could you update us on how the Gernsbach expansion is going and have you started to pre-sell any of the additional capacity?

We are tracking according to plan and so the work we are doing with our partners is going exactly the way we had envisioned and our long-term view of how we are going to use these assets or this asset and which markets we are going to serve has not changed fundamentally.

And are you preselling any of that or is it - do you have contracts written or anything?

Yes. I believe the way we’ve addressed that question in the past is to say that clearly we have a pretty good purview of the markets that we want to serve and the conversations that we had with our customers gave us confidence in terms of committing these funds to the rebuild and having higher level of comfort, recognizing that we publicly stated we expect 15% to 20% after-tax return in a three year period.

So we have a pretty good level of confidence as to how we are going to utilize this asset and this capacity over the upcoming quarters and the next few years.

Fair enough, thank you. And then switching gears a little, what’s your expected tax rate excluding black liquor this year?

We were at 20% in Q2. I think right about 30% is the best estimate.

And then just lastly, as we look back through the remainder of the year, do we have any scheduled maintenance in the third or fourth quarter that we should be building in?

It’s pretty standard maintenance with the exception of Q3. We said we’re going to spend a little bit more on some of the liability matters, but I would say that it’s more or less in line with what we have spent in prior years.

And will there be any downtime associated with that?

Just typical. There is some downtime but it’s not significant.

I believe you said that you have 80% pass-throughs on certain input costs. I missed which segment that was in and I was wondering do you have to pass through the savings if pulp prices decline?

Yeah, Steve that was related to the early business. And about 80% of our revenue the agreements contain a cost pass through.

And so as fluff pulp prices have been declining, we have been passing that through to customers.

I think in the second quarter, we show that raw material management cost declined by about $2 million in that business and so most of that was passed through to customers

And then currency hurt you in the quarter. I don’t believe you do any hedging, but I was wondering if you had these plans changed that or any hedging on any other inputs?

See we do hedge our currencies, so we do have some hedges related to the Euro. Typically we’re hedging around 35% presell of our next 12 months' expected cash flows.

So we have some protection, but rates the Euro was average about 143, I think it was in the second quarter a year-ago and it was about 128 in the second quarter of this year. So now that’s a pretty substantial decline and today I would, lastly checked it was about 123, so it is a little bit lower than it was in our second quarter.

So we do have some protection in place, but it’s typically more in the next six months. And then over the succeeding six months, past that it’s a little bit lower.

And it’s fairly ecstatic strategy, you don’t have - actively changing as this market conditions change?

That’s right.

Okay. And final question from me, just wondering if you could discuss maybe any bigger picture growth objectives now that the Concert acquisition seems to be really paying off?

Yes, Steve, this is Dante. You’ll see us consistently stick to the parameters of the strategy that we’ve been conveying for the last year and a half.

So of course we want to grow, but we want to do it in a profitable and responsible way. We want to manage our balance sheet in a way that, it doesn’t get over levered.

We’re very happy with how we’ve reshaped Glatfelter’s portfolio, whereby now two of our three businesses are growing global businesses that have much more attractive underlying fundamentals. And that gives us organic growth opportunities that of course has a lower risk profile and better certainty, so we have 1.3 times leverage.

So I think we're in very good position and have plenty of capacity to accelerate the execution of our growth strategy provided we find investment opportunities that meet our very stringent hurdle rates and criteria.

You guys are mentioning paper shipments in this quarter are going to be about 5%, while the other segments are going to be up slightly to flat. Can you expand on, I guess some of the areas that are showing stronger demand, and is there any attention to maybe exit some of the stagnant businesses in that area?

Larry, this is Dante. So it’s important to recognize that our Specialty Papers business in North America - during the second quarter when we had the two big outages that has an impact on shipments as well.

And we do have seasonality in that business.

So as we stated earlier, the fall book season, when a lot of the bestsellers come out from the publishers. That typically gives us a lift.

The envelop converting business sees a lift as we enter the fall season where communication papers and cards and things of that nature are more in demand, so that's really what’s driving the sequential quarter improvement of 5% in Specialty Papers.

In terms of the businesses that are flat, I think again, you take a look at the cash flow generating capabilities of our North American business and the fact that we’ve continued to outperform the broader market, and we’re growing our operating income, so I don't feel any pressure to jettison any parts of Glatfelter’s business. Of course we review our entire portfolio on a regular basis and we focus on underperforming parts of our business or underperforming assets to the extent that we fully exhausted all of our continuous improvement opportunities and putting good sweat equity into the business then we would consider doing something like shutting it down or selling, but until at that point in time, we are going to make sure that we give our best effort to fully optimize the performance of the assets that we have.

And I think if you look at our track record over the last number of years along a variety of dimensions, you can see that we’ve had more success than not along those lines.

And circling back I guess to the timber sales what was the impedice [ph] for the sales, was it just favorable pricing? And I guess can you comment, I know previous question was about the pipeline in the future.

Is it kind of going to be similar to this quarter or maybe down a little bit for the rest of the year?

Our expectation is that over time we will sell all of our property, we have about 30,000 acres, maybe just short of that now maybe 29,000 acres of property remaining. We have sold a substantial amount of our property several years ago and with the downturn in the real estate markets and the values, we sort of paused on that program.

But as we see opportunities together in appropriate value, we will pursue the sales. And so that’s what happened in the second quarter.

The market in Pennsylvania has shown a little bit more life, certainly than the markets in Virginia and Delaware, so we saw what we thought were good opportunities to get appropriate value and we sold them. So we will continue that.

As I said, I don’t think Virginia and Delaware are going to provide many opportunities in the near future for us to sell, but we will continue to monitor the markets and as good opportunities arise we will sell the property.

And then finally, as Green Mountain’s patents are expiring in September, how do you guys, I guess look at some of these store brands that are coming online that are compatible with the Keurig system and how do you view some of these lower cost parts coming online?

I can only offer you our opinion, I can’t speak on behalf of Green Mountain or anyone else’s for that matter. But it’s our understanding that they have a portfolio of intellectual property that covers their K-cup systems.

And the patents that are expiring this year are from a previous generation K-cup, and to my knowledge are not the predominant technology being used today for K-cup. So the intellectual property that covers the K-cup technology that’s in the market today, I believe expires in 2017 or 2020, it’s in the out years.

So again, we served more than one customer and we are very confident that this is an attractive market for Glatfelter over the longer-term and we remain very committed to serving it.

I know guys mentioned maybe 10% of the U.S. isn’t quite up to double-digits yet.

Is there a kind of a time frame where you see that penetration rate in the U.S.?

I think you’re referencing where we see single-serve coffee in more established markets like the Benelux or Western Europe where certain countries we have over 30% penetration; the U.S., it’s still single digits. We haven’t gotten that granular nor do I know of anyone that can forecast that level of accuracy.

Other than if you think about single-digit to somewhere north of that and we have past precedence where other western markets have evolved to 30% plus penetration shows a lot of upside. And so that was one of the driving forces behind the investment in the G10 rebuilt, but not the only factor.

The asset that we are rebuilding in Germany can produce the rich filtration papers as well as a variety of specialty papers that will go into consumer in industrial applications. So I feel good about the over growth trajectory of single-served coffee and that the penetration rate will increase over time in the United States and that the asset that we are rebuilding in Europe will be able to serve a variety of specialty markets effectively.

Yeah, just a few follow-on’s here, one it looks like you have expense in the second quarter in the US business in part, try and improve internal efficiencies. I assume that that was kind of centered at Chillicothe.

And I just wondered if you can give us some sense of when we could start to see some benefit there, particularly see some better margins out of the Ohio mill.

Yes Mark, I'm not exactly sure specifically what you're referring to about the additional spending. We did -- we have been over time making investments in Chillicothe.

Some are capital and some are maintenance for improvement of the reliability. We have seen improvements in profitability, as I mentioned our profitability this quarter or just the first half of this year in Specialty Papers is up around 25% or 26%.

And if you look over the last, since we acquired that business we’ve seen very dramatic improvements in profitability. So, I think we are seeing it in the profitability matrix.

We continue to believe we have opportunities to improve the efficiency of the operations in Chillicothe and that gives us some growth opportunities with respect to operating income for, Specialty Papers. So we will continue to some of those investments and we think that will continue to drive value.

And then just a kind of follow along on that and again it come back to this deal that Appleton has done. Have you guys thought about any kind of transactions or opportunities to do what Domtar is doing for Appleton here which is to basically take a high cost producer of specialties and just bring some of that volume in-house either on your book or for someone else?

Mark, this is Dante. I would say that from a bigger picture point of view, we are continually looking at every aspect of our business and trying to desegregate the value chain and determine where we adding value and where value maybe destroyed and determine are there better mousetraps for us to consider.

To this point in time, we haven’t come up with any alternative constructs that we feel confident that over the longer term would be less volatile and a better cost than the approach that we are taking. And again I would say, if you look at the track record of our financial performance over the last 5, 6 years, you see that we have had substantial improvement across all the primary dimensions.

So we are confident that we are on the right track and we are also open minded to new constructs that would create better value if it’s sustainable.

Then the other question I had is just sort of on the balance sheet and cash flow. I mean, if you look at the numbers in the presentation here, you actually look like you are on a net basis, levered only about 1.2x now.

Maybe you could talk with us about where you’d like to keep that leverage level at, and then how you see the use of cash beyond the current stock rebuilds over the next 18 to 24 months.

Sure. A couple of things, one is, we are committed to making sure that we always have a healthy balance sheet.

We’ve demonstrated over time that where we see investment opportunities and where we understand the risks, and we're comfortable that we can manage and litigate them. We are willing to take on more debt and increase our leverage on a temporary basis, if we have a window toward retiring that debt in a reasonable amount of time.

Right now you’re correct we're about 1.3x on a net debt basis. We have plenty of capacity.

I think in this kind of business environment, it’s good to err on the side of having a strong balance sheet. And as we demonstrated in 2009, 2010 timeframe, if we see opportunities that fit our strategy, we’re not going to be shy about executing them and investing in rebuilds or making acquisitions.

In terms of how high we would leverage the balance sheet in this kind of environment. I think if we get much above 2.5, 2.75 these start to get to the point of really having to think it through and be highly confident that we could bring down debt pretty quickly.

So I think if you look at those parameters the amount of dried powder we have, wave a lot of flexibility which is where we want it. Dante, you want to add anything?

No.

Probably just a question here for John. On this on the conversion to the cellulosic biofuel credit on page 12 of the presentation you show $60 million benefit in ’13, any idea what the ‘14 benefit could be as we can sort of frame that?

It’s basically the balance, its well $4 million, $5 million.

Then it looks to me like the CapEx guidance was down may be about $5 million from prior guidance and is that the case, and if so what’s going on, is this timing thing or are you forgoing some stuff?

It is a combination of factors, it is little bit of timing, it's a little bit of foreign currency translation, so it’s those two things, but not - I would say it’s - we haven't consciously deferred anything, other than for our ability to complete some of the work and the timing of getting it done.

So the German expansion continues on pace as you expect?

Yes.

Thank you again for joining us today. John and I appreciate your questions and your interest in Glatfelter and we look forward to speaking with you next quarter.

Have a good day.