Good morning. Thank you for attending the Graphic Packaging third quarter 2022 earnings call. My name is Matt, and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star followed by one on your telephone keypad. I would now like to pass the conference over to our host, Melanie Skijus. Good morning, and welcome Graphic Packaging Holding Company's third quarter 2022 earnings call. Joining us on our call today are Mike Doss, the company's President and CEO, and Steve Scherger, Executive Vice President and CFO. To help you follow along with today's call, we will be referencing our third quarter earnings presentation, which can be accessed through the webcast and also on the investor section of our website at www.graphicpkg.com. Before I turn the call over to Mike, let me remind you that today's press release and the presentations made by our executives include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our expectations and projections. These risks and uncertainties include, but are not limited to, the factors identified in the release and in our filings with the Securities and Exchange Commission. With that, let me turn the call over to Mike. Thank you, Melanie. Good morning to everyone joining us on the call and this webcast this morning. Let me begin my remarks on Slide 4 of the presentation. We delivered exceptional financial results in the third quarter. Our continued strong Net Organic Sales growth can be attributed to the global business portfolio we have built, diversified by both end markets and brands, strategic investments we have made, and the robust innovation pipeline we are cultivating. In the Net Organic Sales growth picked up sequentially, accelerating to 5% year-over-year. This represents another quarter of outperformance versus Net Organic Sales growth goals. I remain very encouraged by our significant new product development pipeline and consumer demand for highly functional and increasingly more sustainable packaging. Interest and engagement from existing and new customers remains robust. As demand for fiber-based packaging to replace other packaging alternatives increases, we are capturing new business across our low-cost, well-capitalized, highly integrated platform. As such, our integration rate continues to grow with 74% of our Paperboard production integrated into our packaging today, compared to 72% at this time a year ago. Vertical integration is a competitive differentiator in today's challenging global supply chain environment. We benefit from the flexibility we have established by producing all three Paperboard substrates and the assurance of supply we can offer customers. Importantly, our Vertically Integrated Business model provides runway to further enhance operating efficiencies and supports our Vision 2025 margin expansion goals. Adjusted EBITDA increased by 55% year-over-year to $441 million, resulting in an 18% EBITDA margin. Adjusted earnings per share, excluding amortization, improved 76% to $0.67 per share. Strong performance year to date is resulting in an increase to our previous $1.5 billion-$1.6 billion Adjusted EBITDA guidance. We now expect Adjusted EBITDA for the full year of $1.6 billion at the midpoint, reflecting a 52% increase over 2021. Our financial results are underpinned by a secular demand tailwind for more sustainable consumer packaging solutions globally. Importantly, and specific to Graphic Packaging, our ongoing execution of strategic initiatives and platform investments has strengthened and extended our global fiber-based packaging offering and has positioned us to capture growth and demand. Price increases required to offset unprecedented commodity input cost inflation continue to be executed globally. As a result, we now expect $425 million-$475 million in positive price cost relationship in 2022. The significant step-up in Adjusted EBITDA resulting from the business drivers I've walked through on Slide 4 will drive strong cash flow generation. This year, as committed, we are focused on driving down our leverage ratio and expect to exit the year in the 3.1x-3.3x range. Slide 5 provides additional detail on the inflationary environment and pricing outlook. In the quarter, we continued to realize the pricing necessary to offset higher commodity input costs and recover the dislocation from 2021. $334 million of positive price flowed through the business during the quarter, more than offsetting commodity input cost inflation of $162 million. With roughly two months left in the fourth quarter, our full year 2022 expectations for commodity input costs have tightened to a range of $575 million-$625 million. Pricing expectations for the full year are approximately $1.05 billion, up $100 million from guidance provided last quarter. Additional SBS pricing, along with other pricing initiatives, were realized and implemented during the third quarter. Our 2023 rollover price and commodity input cost ranges mark to market as of today are $375 million-$475 million and $150 million-$250 million. As we have stated, we believe we will see inflation again next year, particularly in Europe. Similar to last quarter, I want to reiterate the rollover figures on Slide 5 are directional in nature and are point-in-time estimates. We'll provide guidance for our expected price to cost relationship for 2023 when we report fourth quarter and full year 2022 results in late January. Turning to Slide 6, let me provide a progress update K2 Coated Recycled Board machine production ramp. We were pleased to host many of you in September for a look at 100 years of paper-making technology culminating with our largest capital investment in history, the transformational K2 CRB machine. As analysts and investors were able to clearly see during the tour, the machine truly does transform Kalamazoo into the most advanced manufacturing operation with state-of-the-art technology, automation, and advancement in energy efficiencies. It is the largest and lowest cost producer of Coated Recycled Board in North America. Production on K2 is ramping steadily and is ahead of plan. We have hit our targeted output of 1,500 tons per day on multiple days, averaging over 1,400 tons per day in September. With the new production on K2, we realized $17 million in EBITDA in the third quarter and expect to meet our $50 million target for 2022. Slide 7 is an example of how our global innovation engine and customer partnerships continue to drive new business and organic sales growth. Established as part of Vision 2025, our partners pillar is focused on growing with the best customers in the best markets. We're excited to be doing just that by working with Unilever on a new product as part of the company's EUR 1 billion Clean Future initiative. Unilever announced its Clean Future strategy in 2020, and its intent to change the way some of the world's best-known cleaning and laundry products are created, manufactured, and packaged. When Unilever's largest detergent brand transformed its laundry capsule with new technology to be its most sustainable yet, they wanted a new package solution that was both recyclable and plastic-free. Our packaging developed for Unilever delivered those enhancements and will reduce over 6,000 metric tons of plastic from entering the waste stream each year. We are thrilled to have partnered with such a purposeful brand and company on this product launch. The laundry capsules, along with the product's new packaging, were launched in July and can be found in various outlets throughout France. Reception has been enthusiastic, and we expect to see new growth opportunities with different brands and in additional countries. Carton design, product protection, and printability of our high-quality fiber-based packaging enhances marketing appeal for customers. The renewable aspect of the Paperboard solution and the high collection and recyclability rates of paper provide proof points to our customers and our customers' customers that the sustainability efforts are making a positive impact. Turning to Slide 8 and reflecting on new opportunities we see across our markets for plastic substitution, we have raised the expectation of our total addressable market to $12.5 billion. You can see here many different products and packaging configurations under plastic substitution. This speaks to our diversified portfolio and the variety of packaging solutions we produce for a wide array of global customers and consumers. I will wrap up my prepared remarks by noting that our overall business remains resilient, and we continue to grow with our innovative solutions. We are meeting a need in the marketplace as global communities become increasingly more focused on sustainability. We are very pleased with our results in the quarter, strong outlook for the full year, and continued progress towards achieving our enhanced Vision 2025 aspirations. We are creating value through leadership with Vision 2025. The investments we have made to advance our capabilities and optimize our mill and converting infrastructure differentiate us. Our 24,000 employees are highly engaged and are truly running a different race. With that, I will now turn the call over to Steve. Thanks, Mike, and good morning. Turning to Slide 9 and key financial highlights in the third quarter. Net sales increased 38% or $669 million - $2.5 Net Organic Sales growth accelerated from 3% in the first half of 2022 to 5% during the third quarter. A positive price cost relationship and our European acquisition also drove performance. Adjusted EBITDA margin expanded by 210 basis points year-over-year to 18% of sales. Adjusted EBITDA moved higher by $157 million- $441 million, an increase of 55% over the prior year period. Adjusted earnings per share, excluding amortization of purchased intangibles, increased 76% from last year to $0.67 a share. Our Paperboard integration rate year to date improved to 74%, up 200 basis points from 2021. On Slides 10 and 11, please find our sales and Adjusted EBITDA waterfalls. Sales increased $669 million year-over-year or 38%, driven by $334 million in pricing and $380 million in volume mix from organic sales and acquisitions. Foreign exchange was a $45 million sales headwind in the quarter. Adjusted EBITDA increased $157 million or 55% to $441 million in Q3. Drivers of EBITDA growth during the quarter were $334 million in price and $61 million in volume mix. We are earning on our organic sales, and acquisitions are meeting expectations. Partially offsetting pricing improvements and volume mix in the quarter were $162 million of commodity input cost inflation, $28 million of labor benefits and other inflation, $27 million of unfavorable net performance, and $21 million of foreign exchange. Within the net performance category, we recorded $38 million of increased year-over-year incentive accruals in the quarter and incurred some higher costs to meet accelerated organic sales growth. EBITDA from our CRB optimization and K2 machine ramp contributed positively during quarter, adding $17 million to performance. As Mike discussed, we are on track to deliver $50 million of EBITDA from this transformational investment during 2022. Momentum in our production ramp will continue as we exit the year, delivering an expected additional $50 million in EBITDA in 2023. On Slide 12, let me expand on quarterly financials, operating performance, and capital allocation. Our food, beverage, and consumer businesses grew 20% before acquisitions during the quarter, driven by positive price and organic sales growth. Our Food Service business also achieved strong growth, up 29% from the same quarter one year ago. Turning to Paperboard market data, the AF&PA will report industry operating rates for the third quarter on Friday. Q2 industry operating rates remained very strong across substrates, with SBS at 94% and CRB at 102%. Our CUK operating rate remains over 95%. Our teams worked tirelessly and were successful in capturing and servicing higher organic sales growth during the quarter. Backlogs remained strong at 8+ weeks across all substrates. During the quarter, we returned $23 million to Stockholders in dividends and repurchased $15 million in common stock, effectively eliminating Shareholder dilution from long-term incentive grants. In September, our Board of Directors approved a quarterly dividend increase of 33%, effective with the dividend payable in January 2023. The increase to our dividend payout is reflective of our balanced approach to capital allocations, the strength of our cash flows, and the significant progress we have made toward our Vision 2025 growth goals. Our net leverage ratio was 3.7 times at the end of the third quarter. We have rapidly reduced our net leverage ratio over the past 11 months following the European acquisition. We expect to be roughly 3.2 times levered as we exit 2022. Finally, liquidity remains healthy at over $1.4 billion. On Slide 13, let me provide an update on expectations for the full year. As you saw in the third quarter, strength in organic sales, improved pricing, strong volume mix, and the K2 ramp are driving substantial results. We are increasing our Adjusted EBITDA guidance at the midpoint by $50 million- $1.6 billion. This reflects growth of 52% over 2021. Expectations for sales for the year are now closer to $9.5 billion. Turning briefly to cash flow, we expect capital expenditures of $500 million-$525 million as we make investments to capture current and future organic sales growth. Cash interest has moved slightly higher to reflect the current interest rate environment, while our range for cash taxes has declined. Adjusted cash flow is expected to be in the $600 million-$800 million range. Our guidance update on Adjusted EPS, excluding amortization, can be seen on Slide 14. Continued execution of our growth and margin expansion initiatives this year has increased our expectations for Adjusted EPS. We now see a range of $2.20-$2.40 per share, up from the guidance we provided last quarter. That will conclude our comments this morning. Let me now turn the call over to the operator for questions. Operator? Before I provide instructions on Q&A, please note that due to global connection issues being experienced this morning, if you experience any difficulties on this call, please contact Melanie Skijus in Investor Relations via email. If you would like to ask a question, please press star followed by one on your telephone keypad. If for any reason you would like to remove that question, please press star followed by two. Again, to ask a question, press star followed by one. We ask that you limit yourself to one question and one follow-up. We will pause here briefly as questions are registered. The first question is from the line of Ghansham Panjabi with Baird. Your line is now open. Thank you. Good morning, everybody. Good morning, Ghansham. I guess, good morning. Just making sure you can hear me. I guess first off, Mike, on, you know, obviously very strong momentum on the volume side during the third quarter as well. You know, we are starting to see some sort of concern on the Consumer Staples Side, especially in the beverage side. Can you just give us a sense as to how volumes progressed throughout the quarter, what you're seeing in terms of new product activity, maybe across both Europe and the U.S. as well? Yeah. Sounds good. I'll start and then Steve, you can add some color to that. I think we saw pretty broad-based strength across, you know, our overall business in the third quarter. It didn't change much materially, you know, from month- to- month. It was strong. Some of that, Ghansham, was a function of the fact that, you know, we had Kalamazoo up and running. We were creating more Paperboard. We had Middletown running, so it created, you know, an opportunity for us to really service our business incredibly well, you know, with the fact we had Paperboard to meet customer demand. As you kind of look through the different verticals, we saw food and beverage grow. We saw mobility continue to be strong on the food service side of the business here in North America. Europe grew in certain categories and a couple of them they were down slightly, but overall, Europe had a positive growth trajectory, which we're pleased with. As we've kind of rounded, you know, out of third quarter and into early fourth quarter, you know, to date here, we're seeing our growth at the top end of our kind of long-term target, so 2%, call it 200 basis points. If we finish the year at that kind of level, you know, that'll be fantastic because what that will be then is for the third year in a row, we'll be above 3% organic growth. If you do a three-year stack on that, it's over 10% in terms of organic growth. As you know, that's a real pivot, you know, from the kind of trajectory we had before that time period. That's kind of how we're thinking about it and what we're seeing. Steve, I don't know if you have anything else to add or not. No, nothing to add, Mike. I think described it well. I think the broad-based nature of it was positive for us, both food service and kind of core food and beverage. Probably the only thing to add is we can continue to identify a couple hundred basis points of real new to the market innovation products, primarily plastic replacements that are, you know, the Net Organic Sales growth. Okay, fantastic. Thanks for that. Just for my second question, you know, in terms of how would you sort of think about capital allocation in 2023, Paul, and obviously you're focused on debt paydown this year, and then just related- Yeah. To that, on AR Packaging, can you just touch on some of the opportunities you see to cross-leverage some of the innovation that they have, you know, some of it which highlighted at PACK EXPO earlier this week? Just anything you could share there, as it relates to the U.S. I'll start with that. I mean, I think that's been really one of the positives we've seen on the AR acquisition. We anticipated that we would learn and be able to kind of move, you know, trends that we're seeing across the globe, you know, much faster. That was part of our investment thesis. As we talked about when we made the investment, Europe is really, you know, ground zero for sustainability. We see a lot of those trends come out of Europe, and that's part of what you see on the slide in the deck that showed the expansion of our, you know, our TAM. You know, we've got the ability to, you know, be able to, you know, increase that 'cause we got line of sight into, you know, additional plastic replacement opportunities and expanded that now to, you know, $12.5 billion. You know, so we're very pleased with what we see there. You saw an example of one of those, you know, products when we put in the deck, you know, that had, you know, detergent and what we did there with Paperboard for Unilever. We're really pleased with that one, and we anticipate we'll see continued, you know, acceleration of those kind of trends and be able to leverage that really on a global platform. We're excited there too. In regards to capital allocation, you know, this was a year where we told everybody, you know, we were gonna focus on debt reduction, and that's in fact what we've done. As you heard Steve say in his prepared remarks, we'll finish, you know, at the midpoint of our guide around 3.2 times. We wanna get down in the 2.5-3 times long-term target, which we will be, you know, sometime, you know, next year, probably early next year. Then as we kind of look at what to do with a strong, healthy cash flow generation, what I love is the optionality we've got in the business. You know, we've got the ability to look at, you know, game-changing M&A, where it makes sense and comes with high returns and synergies that make sense to us. We can pursue, you know, a capital project, a large capital project or two, to change our cost structure in our mills or our converting business. Obviously, we've got the ability to return cash to shareholders too. You saw our board, you know, here in September increased our dividend by 33% as an example, and we continue to buy back our dilution. We've got all of those things available to us, and we'll look at the types of returns we can see for shareholders along those lines. Ultimately in you know going into an uncertain macro, what I love is that we're gonna throw off a lot of cash, and if we actually drive our debt down a little bit, you know, for a period of time here while we're kind of watching the market develop a bit, you know, that's not a bad option for us either. I love the optionality that we've got multiple levers to pull, and you know, the team's done a fantastic job this year positioning the business with this acquisition of AR and the start up of Kalamazoo to really position us heading into 2023 with a lot of momentum. Great. Perfect. Thanks so much, Mike. You bet. Thank you for your question. The next question is from the line of Mark Wilde with Bank of Montreal. Your line is now open. Thanks. Good morning, Mike. Morning, Steve and Melanie. Hey, good morning. Morning, Mark. I wonder just to start off, Mike, can you just give us a little more color on what you're seeing over in Europe right now? It does seem like the economic pressure there is even greater than we're seeing in North America. I wondered kind of when you talk about Europe, if you can also talk about what you're seeing from your customers in front of the winter season prospects of energy cuts. Hey, Mark. Morning, it's Steve. I'll start and then Mike can add on to it. As Mike mentioned, we saw modest organic sales growth in Europe in the quarter, which was given the macros and the challenging environments there was net favorable to us in terms of the consumer-based food and beverage consumption holding up. We saw a slight weakening on the core beverage business in the quarter as folks actually returned to being out and about a little bit. But as we move around towards the winter, we actually expect that to kinda come back to the positive given the amount of investment that's been made in fiber-based packaging for at-home consumption of beverage. As Mike mentioned, just adding on to it, AR Packaging specifically, those economics are actually on our expectations. $118 million of EBITDA year to date, we expect to be at the $150 million-$160 million level for the year, even in the face of foreign exchange and the environment that we're in. Really outperformance at the operating level there, and as Mike mentioned, the innovation component. Now, certainly we're turning towards what can be some challenging winter months ahead. We can talk. Mike can talk briefly about the energy and ability to run basis. To date, because we're not as energy dependent as some other manufacturing type businesses in the region, we have been operating successfully and meeting customer demand. If there's anything to add to that, Mike. No, I think, maybe just to add, Mark, you know, so we buy 25 million MMBtu in natural gas, you know, as a company. A little less than one of those is in Europe, because it's converting only, as you know. Our exposure there on the nat gas side isn't real high. We buy a fair amount of Paperboard, a million tons on a global basis, so we're watching that. You know, obviously you've seen, you know, the ability for those producers to push those prices along, and we've got that reflected in our contracts and really in the mark-to-market that we gave to you here as part of our prepared remarks. Look, I think, you know, all our customers are watching, you know, what's going on. Right now, the weather's good in Europe. It's been very good the last couple of weeks, and their injection levels are high. Nat gas prices have come down over the last couple of weeks from their all-time highs in June and July, as you well know. That can change quickly, and so we're monitoring closely. You know, we've got really good, you know, communication between, you know, that business and Steve and myself. You know, in some cases, it's changing on a daily and weekly basis, and that's part of why you saw in the mark-to-market, we have a range there of $100 million, and it's largely due to the fact that inflation in Europe is just a little hard to call right now. We'll continue to watch it. We'll be aggressive around our pricing actions, you know, make sure we recover that as we've been. You know, that's kinda how I think we're thinking about that operating environment. Okay, that's helpful, Mike. Just for my follow-on, I wondered if you could just give us an update on a couple of conversion projects that you talked about. One is, you know, using that mechanical pulp mill that you bought down in Augusta to potentially make FBB at Augusta, and the other I think is the, you know, talk we've had about converting from SBS to CUK over at Texarkana. I guess I'm asking those questions just in the context of all of this, particularly all this boxboard capacity we're seeing the Scandinavians talk about adding. Sure. Yeah, thanks for that. It is a very good question. I mean, in terms of what we're doing, we continue to run trials on FBB, you know, pulp type that we've got in Augusta. As you mentioned, we acquired a thermal mechanical pulping operation right adjacent to our property. We've got some optionality there, and we're continuing to look at that, you know, over you know what the cost would be, what the benefits would be, those kind of things. Same thing with the swing machine in Texarkana that we talked about a couple of years ago. We've still got that optionality to convert, you know, one of those machines over. To be fair, with eight-week backlogs and the strong growth we've seen, we haven't seen the need to really, you know, take, you know, any action on those. We're also looking at our CRB platform, to be fair. It's, you know, the start-up at Kalamazoo's been very good. You know, we like what we see so far with the new machine. You know, I think as you think about Graphic, we've got a number of levers that we can pull, and we're trying to really make sure we're being smart about what we do, how we allocate capital, and having a medium, long-term perspective, you know, in mind relative to what we make and integrate into our own operations as well as what we would buy externally, which is, you know, roughly 1 million tons. You know, we kind of look at that. We looked and studied that, you know, as a leadership team and talked about it with our board, and that'll be something we continue to do here as we grind forward. Okay, very good. I'll turn it over. Thank you. Thank you for your question. The next question is from the line of Mark Weintraub with Seaport Research Partners. Your line is now open. Thank you. First, kind of a smaller question, but on the incentive accruals, $80 million this year, what would be more typical? Do we then therefore get some sort of assuming it's a lower number next year, do we get a almost like a double catch-up next year? Do we get a bump next year on the bridge? Yeah. Hey, Mark, it's Steve. As you know, last year we had significant underperformance on incentives driven by the inflation that rolled through the business. This year I'd characterize this as a return to more normalized incentives, both short and long term as we kind of put the bridge together. Obviously we'll look to continue to perform at that level. I wouldn't assume a significant snapback in 2023. I'd consider this a little bit more at the more normalized level. There might be a modest one. We'll be able to articulate that with guidance in January, but it's really a return to more normalized compensation. Got it. Thank you. Also, when you're doing the mark to market, when was the date that was as of? Is that as of kind of very recent? Does that capture what's been some pretty big declines in recovered paper pricing in the recent past? Yeah, Mark, it's Steve. It's mark to market as of the moment we're talking, as we kind of pull things together as we head into this conversation. It's very current, so it takes into consideration latest SBS pricing on the pricing front. It takes into consideration what we know. As Mike just mentioned, though, one of the reasons we've got a bit of a range on it on the cost side into 2023 is just because of variability in Europe. We're obviously in a day-to-day mode in Europe in terms of knowing even what the mark to market is for certain costs that we're managing through. We think that overall, the midpoint of the price and cost is very representative of if you truly did mark to market, those would be the numbers, both price and cost, but the variability is a bit wide right now, primarily due to it, just driven by Europe. Okay. Appreciate the added color. Thank you. You bet. Thanks, Mark. Thank you for your question. The next question is from the line of George Staphos with Bank of America. Your line is now open. Hey, thank you. Hi, guys. Good morning. Hope you're doing well. Thanks for the details. First question is on sort of top line and volume growth expectations. Mike Doss, could you give us a bit of color in terms of how the addressable market grew from $9 billion-$12.5 billion? I know it's gonna be a lot of things, but if there was one or two or three markets that in particular drove that. Relatedly, how are you seeing the new products that you are bringing into the market allowing you to generate growth that the consumer is willing to pay for in an environment where we have lots of stress related to inflation? How do you prevent against the demand that you're seeing being just your customers double ordering, double booking because backlogs are at eight weeks and, you know, we've seen signs of this elsewhere where, you know, there's ordering in anticipation as a precaution and that ultimately dissipates. I had a question on capital allocation. I'll take that latter part first, George. Sure. As you remember, you know, our growth in, you know, kind of that 3% range this last quarter was exceptionally strong. Quite frankly, we've been outperforming our medium, long-term goal of 100-200 basis points, which we believe over the medium to long term is the right target for our company. We've outperformed that the last three years. That's how we look at it. If you look at, you know, kind of what we did, you know, we didn't see growth of 10%, you know, or double-digit increases like some other packaging firms and segments saw during the last couple of years. Ours was pretty steady there. As a matter of fact, we were actually, as we disclosed in the first quarter and the second quarter of this year, a little behind where we wanted to be in terms of our ability to service customers. Our backlogs were up at 10 weeks+, which is just too long for us to give the customer what they need to run their business. Actually we're quite pleased, you know, with our backlogs now being strong at eight weeks. That's historically where strong backlogs would be for our industry, and that allows us to service our customers quite well. Look, we've got limited visibility into our actual customer, you know, inventory building process, but in this kind of macro, it's a little hard to see that anybody really wants to build a bunch of working capital. You know, if it's happened, we don't think it's broad-based. Obviously we're gonna continue to work with our customers to make sure they have what they need. We're seeing our service levels actually correct themselves. Our on time and in full are actually, you know, moving back into the 90% range, which is where we'd expect them to be. You know, it's been probably six-nine months since I can actually say that. We're pleased about that as well. In terms of the addressable market growing, George, that's really just, you know, our innovation and design personnel, you know, globally with the enhanced capabilities we acquired with AR Packaging and really sitting down and looking at different segments and different markets and where we can find opportunities for Paperboard packaging, consumer-based fiber packaging to win. That's why every earnings call, we try to profile something different to give you a snapshot on the margin around the types of things that we're seeing. I thought this one was particularly good, what Unilever did, getting out of, you know, plastic tubs and really going 100% into Paperboard. They did it in a way that, you know, was childproof. You know, it's a great-looking package. It's got excellent graphics, and it's got a huge sustainability story. We're seeing customers continue to do that. That's part of their mantra. When you look at their ESG requirements and the reporting they're doing publicly, our large customers are all focused on driving that type of improvement. We fit right in the center of that, and we provide some really unique options and innovation that allow them to accomplish those objectives. You know, it's the team in Europe, the additional resources we have, the work that we've done now to take a look at different segments that we can penetrate and find, you know, real, you know, meaningful growth and value creation for customers. You know, it's working. That's what gives us confidence, Steve and I, that our 100-200 basis points and the commitments that we've made as part of our Vision 2025, the enhanced goals that we laid out in February, are the right ones for our company. George, just to add to Mike's point, specifically on the $12.5 billion, it's plastic replacement is the category, so the actual broad-based category. Of course, it's consumer-based. I think it speaks right to the heart of our food, beverage, food service, consumer packaging. Consumer and plastic replacement are really the kind of what's been honed in on to allow us to increase that addressable market. Okay. Just a quickie, and it's not a huge number, but the increase in CapEx, can you talk about, well, you know, what drove that? Any key end markets, to the extent you can share on a live mic call? Thanks, guys, and good luck in the quarter. No, thanks, George. We're pleased to actually take it up a little bit because it's all about organic sales growth, both known projects that we're investing behind, you know, at the $2 million-$5 million type of investment at a time. These are typically modest-sized investments that are high return for us to have the capacity, mostly converting capacity in this case, to capture the growth. Think of it as categories like we were just talking about, a fiber bowl replacement or, you know, that kind of a replacement or a cup replacement into fiber. These are primarily organic sales growth capture investments that will give us confidence in the 100-200 basis points on a multiyear basis. Okay, thanks. I'll turn it over. You bet. Thanks, George. Thank you for your question. The next question is from the line of Kyle White with Deutsche Bank. Your line is now open. Hey, good morning. Thanks for taking the question. I wanted to go back to, I believe it was Ghansham's earlier question. You know, we had a Beverage Can peer report some weak volumes, especially in September. Curious if you guys saw a noticeable drop-off in September on your CUK grade, or was this being offset elsewhere? Or is it something that maybe you expect to occur in October? Hey, hey, Kyle. It's Mike. We had a little problem there. Could you repeat the question, please? Yeah, apologies about that. Do you hear me better now? Yep. Yeah. We got you good. Gotcha. I wanted to go back to Ghansham's question on we had a Beverage Can peer report some weakness here, especially in September. I was curious if you guys saw a noticeable drop-off in demand on your CUK grade in September, or if it's something that you expect to occur in October, or anything you can give us in terms of details that you're seeing on that grade specifically. Yeah. No, we have not seen, you know, a meaningful drop-off on our CUK. As a matter of fact, our demand remains strong. Remember, you know, it's much more broad-based than just beverage. Beverage is a big market for us, but we're now in the frozen food market. That's really strong there. There's a lot of strong applications for CUK, and we buy a fair amount of it, as you know, Kyle, globally too. You know, every ton that we're making out of Macon and West Monroe, we've got a plan for both in 2022 and 2023. Got it. A lot of volatility on OCC here recently. Just curious what your near-term outlook is for that, and then what you think it'll average out for next year. More importantly, how should we think about, you know, the relationship between OCC costs versus kind of a Coated Recycled Board pricing over the long term? Yeah. Why don't I take that, Steve, you can jump on with anything to add. Look, Paperboard pricing, like, you know, all commodities, is based on supply and demand. We just got done talking about the fact that we've got eight-week backlogs on all our materials, and we grew 5% in the quarter, and we're growing here at least, you know, month to date here in October, we're at the 2% range. We continue to grow. That requires Paperboard, because every package needs Paperboard. That's what we do. You know, if you look at what that means, we got a few, you know, in the early write-ups around CRB and how does that square with some of the comments made in one of the trade organization magazines. You know, from our standpoint, I can see why someone who's buying Paperboard might want to poke around on that, you know, given, you know, OCC's gone down a little bit. They're probably not on a call with the same responsibilities that Steve and I are, you know, here to be able to kind of talk about what's actually happening. If you look at our backlogs here, they're 8+ weeks, and that's with Kalamazoo accelerating, and we're still running our Middletown mill. We plan to continue to do that, and we need those tons to run our business. Look, you know, as Steve mentioned in his prepared comments, you know, the AF&PA data will come out here on Friday, so we'll get another look on it. you know, we're actually about half of that market, as you know. you know, we feel like we've got a pretty good bead on it. Relative to OCC pricing to the actual pricing of Paperboard, again, it all comes down to supply and demand. you know, right now demand is strong. Kyle, the only thing I'd add is just specifically for you is that, OCC on a year-over-year basis will turn into a deflationary environment in Q4, but it's being more than offset by the ongoing inflation we're seeing for external Paperboard, chemicals, net energy, et cetera. Hence the continuation of net inflation that we're managing even here in Q4. For our mark-to-market, we're just assuming as is. Yeah, that's helpful. I'll turn it over. Thanks, Kyle. Thank you for your question. The next question is from the line of Cleveland Rueckert with UBS. Your line is now open. Hey, good morning, guys. Thanks for taking our questions. I just wanted to go back to organic growth, and I guess specifically just sort of looking at Slide 8. You know, in the past, we've said that most of this growth is mainly driven by new products and not necessarily accelerating growth within the existing portfolio. Steve, you touched on it a minute ago in sort of response to George. You know, I'm just wondering, you know, what do you have to do now to access this addressable market? I mean, is it mainly that sort of incremental investment in the downstream converting capacity, you know, as you sort of explore opportunities in R&D with your customers? Is that what we should expect you to focus on for the next couple of years? Yeah. No, Cleve, I think that's right. I mean, the reality is, as you know, innovation in our segments take time. The team as we continue to look at that ongoing 100-200 basis points, it's multi-year in its orientation. It's what's our line of sight in 2023 to give us confidence that there's at least $200 million there. Do we have line of sight to even convergence in 2024, 2025? Because some of these conversions for our customers are multi-year in their orientation, like you've seen with EnviroClip. It takes years for it to totally play out. That's why, you know, that backlog of opportunities is significant. It's, you know, we're looking out even today, probably out to 2025 for certain projects that we already. Some of the investments we're talking about making are to support multi-year initiatives. It is about today, but also it's multi-year. Mike, anything to add? No, it's well said, Steve. I think the other part of it, Cleve, and you know, Steve mentioned this earlier on the call regarding you know, the increased CapEx is you know, we're investing behind this, and we've got to have the capabilities to drive that level of growth and those kind of you know, innovations. It requires investment on our behalf, but that also makes us quite sticky with that end-use customer. Those are categories we really wanna win in because we believe that you know, our fiber-based solution has a unique competitive positioning to be able to do it, in many cases, replacing plastic, as we've you know, talked about here. It's a combination of really strong innovation and design capabilities that we've invested in heavily over the last three or four years in terms of human capital and you know, process capabilities as well as the CapEx and the investments that we've made in our converting operations to support that. You really got to do both. I think that we're really kind of hitting our stride along those lines and making a pivot away from what historically had been you know, a company that had great operating prowess and focused on cost reduction in a flat market, and we did a really good job of that, to one where now we truly are driving you know, meaningful top-line growth that's been sustained over a number of years. That's the DNA we're really trying to build and the pivot that we've made as a corporation. Hopefully, that's coming through, and you're seeing that. Yeah. I mean, low cost, highest quality, well-capitalized tends to win the day over time. Our customers recognize that too because that's, they wanna invest behind a company that's willing to put the dollars to work. Yeah. I think that's a great point. Thanks for making that clear. You know, just one sort of, I guess another follow-up on an earlier question. You know, we get the question all the time, so I'm gonna pose it to you. You know, it sort of relates to Paperboard capacity, especially from competitors. You know, I know we've talked sort of extensively about the North American market on these calls before, but I guess just, you know, thinking about capacity expansions in Europe and also in China, you know, how does that affect your business? I mean, how should we- Mm-hmm Think about it? How are you thinking about it and planning for some of these changes? I mean, more so outside the U.S. than inside. No, I appreciate the question. It's an important one, and I guess I'm gonna parse it apart a little bit. You know, talk about both China and Europe because they're different in terms of what's going on there. But first, you know, what I'm gonna say is we share a common view that the market is gonna continue to grow. I think we've demonstrated that over the last, you know, three years of what we've been able to do. There's going to be a need for more Paperboard here in the future. The question, of course, on investors' minds, as it should be, is what do those operating rates look like? Are the tons covered? Where do they go? Kind of what are the implications? As we think about China, and those of you on the call who've kind of followed that market for a long time, I mean, Ivory Board's been overbuilt in China for the last two decades, plus. A very modest amount of that actually makes its way to North America. I think last year it was less than 25,000 tons. The primary reason for that is the vast majority of the mills in China are non-integrated in both pulp and energy, which make them high cost. They tend to service that local market quite well, but that stuff just really doesn't export well to different geographies, because of the cost associated with it. It's not to say that it can never show up here, but the cost structure and the cost curve over the medium term just it's disadvantaged, there's no other way to say it, you know, against North American and European consumers. That's how we think about China. In terms of Europe and some of the announcements that have been made, and to be fair, some of these have been just a hypothetical look, "I'm looking at potentially doing this. I'll let you know in 2024 what I'm thinking," type thing, versus, you know, a very well-capitalized company last week, you know, announced that they're gonna spend EUR 1 billion, which is a lot of money, and by their own estimation, create, you know, Europe's lowest cost FBB, you know, mill. Look, that makes sense to me given what they're spending, given they have an existing, you know, mill location, you know, to put that money into it. What I believe will happen over the next few years as that machine comes online in 2025, that's what they said at least, is that'll put a fair amount of pressure on a lot of non-integrated small FBB and recycled board manufacturers in Europe, particularly given the energy situation that's playing out there now, that I don't anticipate will be, you know, materially different over the next two to three years. Time will tell. We'll have to kind of see how that all plays out. Ultimately, the question for investors as it relates to Graphic Packaging is what the implications are, you know, for the imports here into the U.S., as they stated that some of that material could come to the U.S. I think that's a hard question to answer for me to answer right now, for anybody to really know for sure, because it comes down to what's FX doing? What are costs doing in 2025? Which is a long ways away from now. You know, what we know for sure is that Graphic Packaging is gonna throw off a lot of operating cash flow over the next few years. I think we've done a very good job of reinvesting it, you know, intelligently back into our business to create value for shareholders. We're gonna be a very, very strong company in 2025. We'll be ready to respond based on what happens there and how it, you know, kind of all plays out. You know, we'll be very thoughtful in terms of the decisions we make around investments back in the mills, how we manage our supply and demand, you know, to grow our business. What we'll continue to do, Cleve, is drive our integration rates up. You saw we had 200 basis points of improvement this year. We'll make progress again next year. You know, by 2025, that'll continue to grow. You know, that's how we kind of think about it. As I mentioned earlier, when Mark asked the question around kind of what are you thinking in terms of potential investments back into CUK, FBB or CRB, it's through that lens that we study this. We spend a lot of time thinking about those trade flows, where we buy tons, what we make, how we integrate it into our own business, and how to create the most value for, you know, shareholders over time. It's a very thoughtful process that we spend a lot of time on as a leadership team and as a board. You can rest assured that that will continue to be the case here going forward. Hopefully, that gives you a little bit of color on the topic, and, you know, I appreciate you asking the question. Cleve, the only thing to add. Yeah, appreciate. To add, to round it out, to Mike's point, just in North America, probably as of this morning, any additional investments here in North America are probably out in the 2026 timeframe at the earliest, based upon at least most recent facts from other competitors. I appreciate it. Thank you very much, guys. You bet. Thank you for your question. The next question is from the line of Mike Roxland with Truist Securities. Your line is now open. Thanks. Thanks, Mike, Steve, Melanie. Congrats on another good quarter. Thank you, Michael. Mike, just wanted to follow up quickly with you on some of the. You mentioned CRB and the 8+ weeks you have in backlog. I'm wondering, you know, obviously some of the, there's some noise about some of the trade regs mentioning, you know, moderating CRB demand. So I'm wondering if you just can elaborate on really what you're seeing real-time in your business with respect to CRB. And whether the backlog moderation really has to do with, you know, moderating demand, or is it more of a function of maybe easing supply chain constraints that have allowed you to really clear out the backlogs that have been extended? Yeah, it's hard to know for sure what other people are seeing. I'll speak to Graphic, Michael. You know, we have an eight-week backlog on our CRB business today, and that's with a ramp in Kalamazoo that's gone better than planned. You know, the Middletown mill continues to operate as we said it would, you know, into the future here. That combination of two factors are really, you know, what we're seeing. I don't know, as I kinda indicated earlier, you know, what someone else is seeing when they say they've got a four-five-week backlog. You know, again, we don't have clear visibility into all that. All I can say as a producer of about roughly half of that material, we haven't seen that. Our demand has remained strong. The center of the store is actually, you know, pretty good. I think you've seen some of our customers. They've taken a lot of price, but their volumes are holding in there, maybe down 1%. I think the other thing to remember, Michael, for us, is that over 20% of our actual portfolio business here in North America fits into the store brand or private label sector. If a customer is trading down for whatever reason, we tend to participate at an equal level there, if not a little bit more, which is, you know, purposeful on our behalf, and we built the company over the last really decade to be able to do that as that portion of the business continues to grow. We might be benefiting more than others. It's hard for me to know. Look, we'll look on Friday and see what the data says, but I think, you know, overall, you know, the robustness of our backlogs on all three substrates remains, you know, very, very good. To repeat something Mike said earlier, actually moving from 10 weeks to eight weeks was actually a benefit for us in terms of our ability to meet customers' expectations, still significant demand. It's actually a healthier customer relationship experience as well for them, as in terms of our ability to get them product, on time and in full. Gotcha. I appreciate the color there. Just one quick follow-up on Kalamazoo. You know, Mike, you mentioned this in your commentary that it's ahead of schedule, and I think you mentioned the same thing on the field trip as well. If the mill's running better than you anticipated, I guess, you know, can you provide some color around why you're reiterating your EBITDA guides and don't see upside to those numbers that you've laid out there if it's actually running a lot better than you anticipated? Well, I think on a day-to-day operating basis, as we mentioned in the prepared remarks, I mean, we're very pleased with the ramp-up into the 1,400+ tons a day and line of sight to the 1,500. It's a big, strong ramp-up with $17 million in Q3, you know, 30+ in Q4. I guess we reiterate that we have a lot of confidence in the $50 million and in the next $50 million, and so at this point, just consider that high confidence in the context of our overall guidance. Yeah. The returns are there. I think that's well said, Steve. I mean, when you look at 2023, Michael, you know, we said there was, you know, $50 million there. We feel really confident now. Gotcha. Good luck in the balance of the year. Thank you so much. Thank you for your question. The final question will be from the line of Gabe Hajde with Wells Fargo. Your line is now open. Mike, Steve, Melanie, good morning. I apologize I joined a little bit late, so but I'm a little surprised that it's taken till the last question to try to take a peek around the corner into 2023, and like I said, I apologize if I missed it. But if I take the midpoint of the mark-to-market on price cost seeming to imply $225, even if I assume kind of flat volumes, we assume that the $50 million from Kalamazoo plus maybe a little bit more of normal Graphic productivity, seems to me like inflation non-material related or non-input cost related might be running maybe $80-$100, would seem to imply a, I don't know, directionally a $180 EBITDA number. I guess on the bottom end, if I were to annualize, and I appreciate this isn't the best way to do it, but maybe the midpoint of Q4, call it $4.05-$4.10, would kind of get me to a, I don't know, $16.20 number. Are there pieces, parts in there that we're missing? I appreciate that you're trying to, you know, forecast in the future, and we don't know the biggest component, which is price cost or swing factor, I should say. Yeah. Gabe, it's Steve. I mean, obviously, you know, I think we provide more transparency into 2023 than certainly anyone in our respective space, and I know you appreciate that we're not in guidance mode yet. We'll do that at the end of January, and we'll provide it. Something we have talked about publicly a few things. You're correct on all your, you know, basic assumptions. The company's gonna look a lot like it looks like in the past in terms of how we'll execute. But next year, obviously FX headwinds, the potential for not owning the Russian business, and we are likely to have a little more maintenance downtime. We've talked in other public environments that that's probably a $50 million type year-over-year headwind. We'll provide full detailed guidance when we round the corner here, get out of the quarter and move into 2023. I appreciate that. All right. Thanks, guys. Good luck. You bet. Thanks, Gabe. Thank you for your question. There are no additional questions waiting at this time, so I will pass the conference back to Michael Doss for any closing remarks. I wanna thank everybody for participating in the call today. I apologize to anybody we were not able to get to in terms of the queue and for any issues with sound quality that may have been out there, given some of the web problems we're experiencing today. I hope you're all able to join us in January for our fourth quarter and full year 2022 results and an update on our continued progress towards achieving the goals established with our enhanced Vision 2025. With that, I hope you have a great day. Thank you. That concludes the conference call. Thank you for your participation. You may now disconnect your line.