Hello, everyone, and welcome to the Graphic Packaging Third Quarter, 2023 earnings call. All lines have been placed on mute during the presentation portion of the call, with an opportunity for question and answer at the end. If you'd like to ask a question, please press star followed by one on your telephone keypad. I would now like to turn the conference call over to our host, Melanie Skijus, Vice President of Investor Relations. Please go ahead. Good morning, and welcome to Graphic Packaging Holding Company's Third Quarter 2023 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, the Third Quarter Earnings presentation, and the statements 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 risks identified in the release and the presentation, as well as our filings with the Securities and Exchange Commission. With that, I'll turn the call over to Mike. Thank you, Melanie. Good morning, everyone, and thank you for joining us on the call today. Let's begin with the highlights on slide four. I'm very proud of our team's performance during the third quarter. Amid a very dynamic environment, we continue to make progress on our goals, deliver Adjusted EBITDA growth and margin expansion, invest for the future, and fulfill our purpose to package life's everyday moments for a renewable future. As customers have pointed out in recent months, the consumer environment remains dynamic. An uncertain and evolving macro climate has resulted in a relatively more cautious consumer in the near term. At the same time, and as we have discussed last quarter, retailers are operating with more normalized inventory levels versus a year ago, as supply chain challenges have largely subsided. The combination of these factors has had a modest impact on our packaging volume. In listening to a broad mix of our global customers and given the confidence we have in our innovation pipeline, we are anticipating a return to our targeted 100 basis points-200 basis points of net organic sales growth in 2024. Responding to external factors, our team leveraged the scale and flexibility inherent in our system and reduced paperboard production by 150,000 tons during the quarter. Through our disciplined commercial approach and active management of supply to meet demand, we met our commitments to customers and stakeholders while adapting to current volume changes. Together, our team, our capabilities, and our strong operational execution provided a path to targeted EBITDA margin levels in the quarter. Our performance demonstrates the resilience of our business and is a testament to our differentiated approach to servicing and growing consumer packaging markets. We are delivering value to customers with the packaging solutions we provide and optimizing our system to position Graphic Packaging for long-term growth. A key element of our strategy is supporting growth through advancing innovation capabilities and making strategic investments. We made considerable progress on this front in the third quarter, including new innovations that are driving category and market expansion, continued progress on our multi-year CRB system transformation, both of which I will expand on in a moment, and lastly, the completion of the Bell Incorporated acquisition. The acquisition of Bell is a good example of how we are investing in our packaging network by adding capabilities and expanding the customers and markets we serve. Acquisition integration is well underway, and we are excited about the new opportunities Bell provides. As we look ahead, we are positioned to benefit from the long-term strength of demand for sustainable fiber-based packaging. We are focused on further distinguishing Graphic Packaging as the leader in recycled and recyclable consumer packaging. We have updated our guidance and continue to expect 2023 Adjusted EBITDA of $1.9 billion at the midpoint of our guidance range. In addition, we are tracking to meet or exceed our enhanced Vision 2025 financial goals. We remain confident in our ability to achieve annual organic sales growth targets in the years ahead. One of the many reasons we remain confident in our organic growth outlook is the continued advancements we are driving through innovation with our customers. Slide five provides another example of our innovation engine at work and the continued progress using fiber to replace packaging previously created with non-renewable resources like plastic and foam. I'm sure many of you recognize the iconic Nissin Cup Noodles, a leading brand in the ramen comfort food category. Historically, the noodle cups have been made of foam. Through our innovation capabilities and expertise in both food service and retail packaging, the fiber-based solution we developed serves as a more sustainable packaging alternative to foam and is effective in a shelf-stable retail environment. Notably, our retail cup solution for Nissin provides added convenience for the consumer, as it is safe for microwave use, eliminating an extra step required in meal preparation when using foam. We are excited to share with you today a new partnership we have with Nissin Foods and the upcoming launch of their Cup Noodles product, packaged in our proprietary retail double wall fiber-based cup solution. The rollout is expected to begin in the first quarter of 2024. Aligned with consumer preferences for more sustainable packaging options, Nissin plans to convert their entire 16oz Cup Noodles product line in the U.S. from foam to our solution over time. This packaging application marks our first in microwave cups as we continue to expand the addressable market within the more than $4 billion cup and container market in the U.S. Our history serving retail markets and our ability to invest behind and scale with customers, creates new opportunities across various dry food categories that today are primarily in foam and plastic. Items such as pasta, hot cereals, breakfast mixes, and single-serve dry foods are examples where our fiber-based solution has tremendous potential to win. While discussing growth opportunities in the broader cup market, let me also provide an update on our program with Chick-fil-A. Last quarter, this important customer went to market with our new highly insulated double wall beverage cup in approximately 10% of its stores as a potential long-term solution for its beverage program. Feedback from both stores and consumers has been favorable, and phase one of the program continues with rollouts currently underway to additional stores. We continue to believe our innovation can be a long-term solution for Chick-fil-A and others currently using foam cups and containers. Driving innovation with industry leaders like Chick-fil-A and Nissin Foods demonstrates how top brands are investing to transition toward more sustainable packaging solutions. Through our extensive design and packaging network, we are partnering with leading brands to effectively transition to sustainable packaging solutions that consumers prefer. We believe long-term tailwinds support the continued demand for this transition, such as end-use consumers seeking more sustainable packaging, customers responding to demand and pursuing sustainability goals, and in a growing number of jurisdictions, environmental legislation requiring the use of more sustainable packaging. Moving to slide six, let me provide a brief update on the significant progress we have made on our CRB transformation. Since 2019, we've embarked on a multi-year optimization effort to simplify our CRB system while strategically expanding capacity and lowering cost. The end result will further distinguish Graphic Packaging as the lowest cost and highest quality coated recycled paperboard producer in North America. Our efforts to optimize and strategically expand capacity are the result of trends we identified early on, including growing consumer demand for packaging made from recycled materials. Our focused investments will ensure we will sustain unmatched quality and cost advantage in this important category for years to come. Since the project began, we have made significant progress in our CRB system transformation. With our new 550,000-ton K2 machine ramped in Kalamazoo, we have effectively increased our net CRB capacity by 70,000 tons to support our growth. Three higher cost, less efficient facilities, and our longest-running paperboard machine in Kalamazoo, that total production of 480,000 tons, have been removed from the system. As noted, this total includes our recently announced permanent decommissioning of the K3 machine. Our decision on K3 reflects the incredible success of the state-of-the-art K2 machine, which has been operating at or above committed efficiency and quality levels. We look forward to replicating the success of K2 with our new CRB paperboard machine in Waco, Texas, which will expand upon our quality and cost advantages when it begins production in late 2025. As we have talked about before, the ability to cost-effectively produce higher quality CRB allows us to meaningfully and profitably expand opportunities within new markets and ones we already serve. One example of this quality improvement is the new PaceSetter Rainier recycled paperboard, which we introduced last quarter. This new grade of the highest quality recycled paperboard available will facilitate CRB in more consumer packaging experiences across food, health, pharmaceutical, and beauty product applications. We are pleased to have our first sale of PaceSetter Rainier in October and look forward to sharing many more packaging example wins in the quarters to come. The third quarter also included the release of our 2022 ESG report, detailing the progress we have made towards achieving our Vision 2025 ESG goals. Sustainability is an integral part of our business strategy, and our impact extends well beyond our own business. We enable customers, including many of the world's leading household brands, to transition towards recycled and more recyclable packaging solutions. I'd like to note a few key highlights from the report that can be seen on slide seven. To start, we successfully achieved our goals for greenhouse gas emissions intensity and non-renewable energy intensity three years early. We did so through investments in efficient manufacturing and expanding the scale of our packaging operations. For example, the K2 machine helped reduce emissions intensity associated with CRB production by an estimated 3% in 2022. We also highlighted we are on track with our goal to have 100% of our global facilities compliant with a fiber certification standard, where certification and certified sourcing programs give consumers confidence that our packaging does not contribute to deforestation or biodiversity loss. The goal demonstrates our support for sustainable forest management and forest product sourcing practices we follow to ensure compliance. We have more than 24,000 teammates worldwide, and I am proud of the progress we are making as we build a more diverse and inclusive workforce. There is always more work we can do, and we remain committed to fostering continuous improvement in the workplace, centered around our employees' growth and sense of belonging. Slide eight highlights a recent sustainability achievement I am very excited to share with you. We learned in early October that the Science Based Targets initiative approved our 2032 carbon reduction goals, which are outlined here. As an increasing number of consumers are voting with their wallets by purchasing products from brands that are doing the right thing for the planet, we are proud to be fulfilling our purpose to package life's everyday moments for a renewable future. With that, I'll turn the call over to Steve to provide more detail on the financial results. Steve? Thanks, Mike, and good morning. Let me start on slide nine with an overview of the key financial highlights for the third quarter and the first nine months of 2023. Overall, our results demonstrate the resiliency of our business and ability to operate effectively through a very dynamic macro environment. Net sales declined 4% year-over-year to $2.3 billion. As Mike discussed, sales during the quarter were impacted by some fluctuations in consumer purchasing behavior and by efforts from retailers to adjust inventory levels. Those headwinds were partially offset by positive pricing execution and the impact of foreign exchange. Net organic sales growth, adjusted for the same number of shipping days as in the prior year period, was down 4.6% during the quarter. We now expect net organic sales to be ±2% in the fourth quarter, with an anticipated return to our targeted 100 basis points-200 basis points of net organic sales growth in 2024. We remain confident in our innovation pipeline and our ability to execute on commercial opportunities to fuel our organic growth in the years ahead. Our expected four-year cumulative average organic sales growth rate of approximately 2% from 2019 to 2023 remains at the high end of our annual range established with Vision 2025. Our top-line performance is benefiting from our diverse portfolio of end markets and customers. While sales for the food, beverage, and consumer markets decreased 6% in the quarter from the prior year period, sales in our food service markets grew 8% as our packaging solutions continue to win, as mobile consumers are looking for convenience when eating and drinking on the go. We are actively managing our supply to meet current demand, exercising discipline in production while minimizing the cost of doing so, and focusing on servicing long-term customer relationships with their packaging needs. Given the disciplined approach to production we exercise throughout our packaging business, reported profitability is as strong as we anticipated, despite short-term fluctuations in the consumer environment. Adjusted EBITDA grew 9% year-over-year to $482 million, and Adjusted EBITDA margins expanded by 250 basis points year-over-year to 20.5%. Adjusted EPS also continued to grow, expanding 10% year-over-year to $0.74. As a reminder, our sales and EBITDA waterfalls are available for reference in the appendix of today's presentation. Global liquidity remains strong at nearly $1.2 billion. Our success driving integration rates higher was evident in the quarter, with paperboard integration into our consumer packaging business at 79%. This is an increase of 500 basis points from the prior year period. As a reminder, this is an increase of 1,200 basis points from 67% since January 2018, when we completed a combination with International Paper's North American consumer packaging business. We will continue to drive integration rates higher as we capture and execute growth opportunities in consumer packaging. Slide 10 outlines updated full-year guidance for 2023, reflecting our current expectations, as well as the recent acquisition of Bell Incorporated. Most notably, the midpoints of our Adjusted EBITDA and Adjusted EPS guidance remain fundamentally unchanged. Turning to slide 11, we continue our balanced approach to capital allocation, which focuses on growth and capital return. As discussed during today's call, we remain focused on investing for growth, such as the recent acquisition of Bell, ongoing advancements in innovation, and the new recycled paperboard facility in Waco. ... while also reducing leverage to the lower end of our targeted range and returning capital to shareholders. As of today, we have repurchased $54 million of stock year- to- date. Our balanced approach to capital allocation positions the business for continued success and delivers value for our stakeholders. With that, I will turn the call back to Mike. Thanks, Steve, and I'd like to thank our talented team around the globe. Their strong execution positions Graphic Packaging to meet our commitments to customers, deliver value for stakeholders, and continue our leadership in fiber-based consumer packaging. I'm pleased to share with you that we will be hosting an Investor Day in New York on February 21, 2024. In addition to a strategic update on the business, we will provide Q4 and full year 2023 financial results, guidance for 2024, and looking further into the future, our new Vision 2030 aspiration and goals. We are excited to see many of you in person and look forward to providing more details on our plans for the future. I will now turn the call back to the operator to begin the question and answer session. Operator? Thank you. If you'd like to ask a question, please press star followed by one on your telephone keypad. If for any reason you wish to withdraw your question, it is star followed by two. In the interest of time, please limit yourself to one question and one follow-up only, please. And if you are using a speakerphone, please remember to pick up your handset before asking your question. So our first question comes from the line of Ghansham Panjabi of Baird. Your line is now open. Please go again. Go ahead. Thank you, operator. Good morning, everybody. You know, Mike, so just kind of looking back at 2023, you know, it seems like this was the year of price cost-led margin expansion and just, you know, much weaker than forecast end markets, given destocking and some level of consumer elasticity that perhaps, you know, offset many of your internal growth and productivity initiatives. Based on what you see at this point, what does 2024 look like? Would it be just better volumes just based on the comparison and, you know, some level of margin give back based on the pricing trend line in the industry? And then maybe as a follow-up to that for Steve, any variances you can share with us on an EBITDA basis, such as price cost for 2024? Good to hear you. We heard a little break up there, but I think I got the gist of your question, talking about volumes here in 2023, how we're thinking about them and kind of the as we're exiting, you know, 2023 and into 2024. And I'd, I'd say this, I mean, as we told you, going into this quarter, our third quarter, this is going to be the toughest quarter versus 2022, we're up almost 5%. On an adjusted basis, we came in flat with, you know, second quarter, really what we communicated, you know, at the end of the second quarter. So pretty much in line with what we thought. And our comps get a little easier here in Q4. We were up a little less than 1% last year in Q4, so we've got a range out there of -2% to +2%. And really, the real reason for that, as you know, is, you know, the recovery is just not linear. It tends to be a little bit lumpier than anybody says. And, you got from our standpoint, our crystal ball is no better or worse than anybody else's in terms of when the actual inflection occurs. We have some customers that are talking about an elongated recovery. We have some customers that are talking about, you know, promotions that are going to occur in the Q4 and drive volumes. So it's a balance, you know, between those two things. They give us confidence as we head into 2024 around our ability to grow at our, our medium to long-term guidance to put out there, 100 basis points-200 basis points of growth. The first, of course, just the comps get easier, you know, coming off of this year. So that's point number one. Point number two is we've got a very, robust, and deep innovation pipeline. Examples like we gave here today, you know, the Cup Noodles and, you know, the Chick-fil-A, Cold&Go cups, and there's been others. Almost every one of our, our updates here, we point to another thing that we're doing out there to replace, usually plastic or foam, you know, into fiber-based packaging. So we know we'll grow with our innovation. Then second, or the third point that I'd make is, you know, that's really what our customers are telling us. You know, they, they need to grow too, because ultimately their stocks don't work if they don't have top line growth, that also translates into volumes as well. So those three things really give us confidence as we go into 2024. Now, exactly what is going to happen in Q1? You know, probably not, but, you know, our confidence is high that, in 2024, it will grow again. And, if you really take a step back, too, over a four-year period of time now, and, you just say we're at kind of the midpoint of our guide for volumes here in Q4, you know, we grew 3% a year for, you know, the three years coming into this year. This year, if you take a step back, 2%, maybe 2.5%. But if you look at a four-year stack on that, we're at our 2% target that we put out there at the high end of the 100 basis-200 basis. So you know, we knew, you know, over a long-term aspiration goal that we put out, like Vision 2025, there'd be some, you know, ups and downs that, that occurred. But overall, we're very pleased with the overall trajectory and the growth that we've experienced in the business and expect that to continue in 2024. And got to it, Steve, do you want to just briefly a little bit of, of your, on 2024, just to make sure I've got it right? Yeah, I was just curious on the variances on EBITDA, on price cost, and whatever else you can share at this point. Yeah. No, thank you for that. I just wanted to make sure that's what I thought, you said. I mean, listen, as Mike just said, as we look into 2024- ... There's some real positives that we would expect will be beneficial to the P&L if you kind of look out to next year. We'll have a full year of the Bell acquisition. We acquired that in the fourth quarter, so modest EBITDA this year. Just by way of reminder, we bought $30 million of EBITDA and $10 million of synergy. So we'll pick up probably an incremental $20 from that next year, along with the synergy. So think of that as a +$30 million run on 100 basis points-200 basis points of organic sales growth, and you know from that value perspective, it would be at or above our margins as we generate. And we should have a very strong productivity year. We will have less planned maintenance down. We have less market-related downtime as we return to growth, and a weather-related event that was of substance, which certainly we don't plan for that to repeat. So those are three, you know, very positive benefits as we, you know, labor and benefits inflation this year, running a little bit higher than normal. We'd expect that to get back to levels. And if you mark to market the current price cost environment, so just mark when all of it pricing related, the $80 on SBS, the 20 on [CRB and CUK], we're in a very benign inflationary environment year. So obviously, as we've talked, we're very committed to operating the company in a pretty narrow range of EBITDA margins. This year, we've moved towards the 20%, and certainly we would expect to operate in a pretty thin band around that 20% as we look out to 2024. So hopefully, that gives you some of the components. We'll obviously provide detailed guidance when we're together in February and provide that to you in a more granular level. But those are, I think, the high points if you kinda look at the year ahead. Perfect. Thank you so much. I'll turn it over. Thank you. Our next question comes from the line of Mike Roxland. Your line is now open. Please go ahead. Thank you, Mike, Steve, and Melanie, for taking my questions, and congrats on a good quarter despite the backdrop. On your last call, you mentioned contract resets, you know, particularly in North America, which have long duration, you know, 2 years-5 years. You mentioned, I think the way that you phrased it was that there's a meaningful number of contracts out there that you still need to be addressed over the next 12 months-24 months that have yet to reflect the higher prices. So is there any way that you could help us size that? Is that 20% of all contracts, 30% of all contracts? The reason I'm trying to just drill down on that is because, you know, Steve just answered the prior question on some of the drivers for 2024, but wouldn't those contract resets also be beneficial to driving EBITDA growth next year? Yeah, Mike, it's Steve, and those to drive benefit next year. As we also talked on the last quarter, we don't tend to put those into the kind of mark-to-market discussions as we were just having. And at any time, to your point, we've got 20% or 30% of our contracts that are in negotiations and coming due. So as those play out, we'll certainly articulate those. If there are some that play out here, you know, late this year, incorporate those in to guidance. But to your point, we continue to actively engage with our customers to put in appropriate value for the products that we're producing and have the kind of long-term, sticky relationships that we have enjoyed with many of our customers. Got it. I appreciate that, Steve. Just one quick follow-up. Any comment you have on trends that you're seeing thus far in October, has there been any improvement at all sequentially? I know one of you appeared reportedly yesterday and basically noted no improvement thus far in 4Q. So any comment, commentary or color you could provide around what's happened thus far in October, in terms of, you know, the order patterns, stopping to an end, CPG promotional activity, anything that would be helpful. Thank you. Well, Mike, we've obviously gotten a look into October, and with October, it's consistent with the ±2%. So we do expect to see sequential improvement quarter- to- quarter. And as Mike said, we've got customers who are seeing a positive move volumetrically already. We've got others who are seeing it taking a little bit longer. And so we're seeing it's a good mix of customers who are, you know, starting to see some promotional activity materialize in Q4. Others aren't quite there yet, as Mike articulated earlier, but sequential improvement in Q4 we can see happening. Thanks very much. Thank you. Our next question comes from the line of George Staphos of Bank of America. Your line is now open. Please go ahead. Hi, everyone. Good morning. Thanks for the details. Steve and Mike, I don't know if everyone is hearing it, but your phone has been cutting in and out a bit, at least on our end. And I just wanted to make sure, when you were answering Ghansham's question, did you put out at least mark-to-market on pricing that you see for 2024? Because if you did, we didn't hear that before we get into our questions. Yeah, George, it's Steve, and our apologies if you're experiencing some technical challenges here. But let me in replying to Ghansham's question, what we did indicate is that if you just do a pure mark-to-market on price cost, we've got very little happening on inflation, so pretty benign. And if you sequentially just look at the price impact year-over-year, it's down, you know, roughly about $80 million year-over-year. And as Mike Roxland just mentioned, obviously, we've got other customer negotiations that we're always involved with and improving terms and conditions where -- and there in our negotiations. And so, I think that hopefully you were able to get that in response to anything that may have cut out. Did that work, George? That's perfect. Actually, that's kind of where we were modeling, doing some background. So thank you for that. So two questions here very quickly. First of all, in terms of the noodle cup and related markets, what do you think that market opportunity is for you? And maybe what kind of tonnage do you expect maybe for 2024 and 2025 from those markets? The coating in that cup, is that a bio coating, or is that a poly coating? And, you know, how will you handle that? And then the other question is just sort of nearer term. We noticed that, and again, performance was good given the backdrop. We don't want to take away from that. The free cash flow guide came down a little bit this year, and you mentioned labor and benefit is running a little bit hotter this year than your prior guide. What were the factors in that? Thanks, guys. I'll turn it over from here. I'll take the first part of that, George, and then I'll let Steve handle the questions that are on working capital in particular. But you know, the reality of it is, you know, if you look at our total addressable market, and we put out there, you know, $12+ billion. And within that addressable market, there's a $4 billion segment of it. That's what we call cups and containers. You know, so that's- Yeah So it's a very big opportunity for us and one that we can work on for years to come. In fact, the vast majority of our cups, including the Cup Noodles, has, you know, some form of a low density polyethylene or polyethylene barrier coating inside. And as we talked about, what we're really excited about is our ability to take those cups back to Waco, and, you know, we can process with new vertical drum pulper that we're installing there, up to 15 million of those paper cups today. With that coating on the inside, clean them up, take advantage of the fiber. That'll be on the top wire. It'll be the first fiber we put down, and we'll recycle those cups. So we're working with our customers within about a 200-mile radius of the mill to be able to have that capability, and eventually, you can expect that we'll be able to do that in Kalamazoo as well. That's our plan. But- [crosstalk] I'm sorry, could that be 50,000 tons next year, do you think? You know, this new market, this new customer? You know, I don't know. We're not going to put a tonnage number out there right now. I mean, I can tell you this, that, you know, fully transition, you know, the Cup Noodles is 15. Okay. You know, and so, you know, I mean, these are meaningful, you know, numbers that come forward. So again, it depends on kind of what Chick-fil-A's trajectory looks like and some of the other conversions that are out there. But over the medium term, you know, we expect that we'll be able to make a pretty strong pivot out of our, you know, coated SBS and get more into manufacturing, you know, the cup stock, which as you know, George, the split right now is of our 1.2 million tons, is roughly 400,000 tons-800,000 tons. So every ton we sell a cup is something that we integrate into our own operation. Did you get all that, George? Thank you, Mike. And on the variances? Yeah, that's perfect. Thank you. And, and on the variance? Yeah. Yeah, and let me just touch on that, a couple of things. That really on cash flow, we're just dialing in our working capital. We're running very much to demand, as you know, and all we're really doing is saying, "Okay, we're just gonna continue to service customers, make the products that we need to make, carry the inventory that we want to carry to make sure we're servicing customers." So we were really just dialing in that cash flow. I also will remind folks that, when we had talked about 2.5x leverage ratio, that excluded Bell. We, as we mentioned, we've got to be up in the 2.6 range. We put 2.6-2.7 because we've also been acquiring some shares, as you saw, in the modeling that we shared with you on the guidance. So hopefully, that gives you a sense for, you know, we're real pleased with where we're generating the cash flow. And as we look into 2024, you know, it sets us up well to make sure we're servicing customers as they return towards growth. Okay, thank you very much. Yeah, George. Ladies and gentlemen, please bear with us while we just pause there shortly just to reestablish a connection with the speaker line. Ladies and gentlemen, thank you for standing by. Our next question comes from the line of Adam Samuelson of Goldman Sachs. Your line is now open. Please go ahead. Yes. Yes, thank you. Good morning, everyone. Hi, Adam. I guess—Hi. I guess the first question, just to clarify, is about the fourth quarter. The slides talk about organic—organic kind of volume mix down 2 to up 2. Steve, it sounded like you were talking about +2 in the fourth quarter, and I just wanted to make sure I was talking about the same, you're hearing the same thing, or talking about the same thing that we're seeing on the slides. Yeah. No, Adam, for clarity, and maybe something got lost there with some of the technical issues. No, what we're saying is Q4 +2 to -2, so 0 at the midpoint. And so what we will see sequential improvement over the -4s that we've seen over the last two quarters. And so it no, it was +2, -2, and October is playing itself out consistent with that as we kind of look towards the fourth quarter. Okay. No, that's, that's helpful. Then as we think about moving into next year, you've talked on a bunch of these calls about kind of the how optimistic you've been about PaceSetter in a year and that the quality of that board and the opportunities that that can unlock for a recycled board in new applications. How should we think about the commercialization of that and meaningful volumes that can be switched into CRB-based products away from a CUK or SBS-type offering, and what that can do from a margin perspective in 2024, as we think about that bridge? Yeah, I think it's really a longer play than just 2024, Adam. What I'm really encouraged about is the fact that we had our first sale in the quarter. It'll ship actually here in Q4, which is great. I'd tell you that customer interest is extremely high. We've got many trials going underway, and continue to have a lot of interest, as you'd expect, given its characteristics, as we described on prior calls. So what it really does is gives us confidence as we look out, you know, the end of 2025 and into 2026, as we get Waco up and going. And as you know, we're adding a couple hundred thousand tons, so we're gonna be able to grow into that with the work that we're doing, you know, with the trial work and this new grade that we've got. Some of the things we have around, you know, our mailer business that we got from Bell, we expect that would grow. That's all CRB. So we're in a really nice spot. We've optimized Kalamazoo. We're building out Waco. It's on schedule. It's coming along great. I was there a couple of weeks ago and got a chance to tour the site. You know, all the efforts that we've got going on here are really focused on making sure that we've got the demand, you know, take advantage of that 200,000 tons of growth that'll show up when we start that machine off. Okay. I appreciate that comment. I'll pass it on. Thanks. Yeah. Thank you. Thank you. Our next question comes from Arun Viswanathan of RBC Capital. Your line is now open. Please go ahead. Great. Thanks for taking my question. Good morning. I guess, Good morning. My first question around volume. You know, I think prior to this call, you had made some comments that your, you know, customers were reducing inventories at both, you know, maybe the brand level as well as the retail level. What have you noticed there? I mean, is that ongoing? And then similarly, do you consider any of those reductions as structural? That is, you know, just given the high interest rate environment and the inflation that we've seen, would it take, you know, really reductions in those two areas to really get things going again? And do you expect that, that, that should materialize next year? So maybe we'll start with that. Thanks. Yeah. Arun, I'll take the first cut at it, and then Steve can add any commentary that he's got. I think, look, what you're referencing there and what we talked about on our second quarter call was the destocking, you know, phenomenon, that really in our industry, you know, started to hit the end of Q1 and kind of played out into second quarter, a little bit of third. We view destocking largely in our rearview mirror now. We're dealing with some elasticities, you know, with, you know, pricing and some of the products that our customers are selling. That's probably having more of an impact on, on, you know, top-line sales than anything else right now, as I talked about with Ghansham, with his question. Trading down, we don't see a lot of that in North America yet, and it makes sense if you think about it. We still have, you know, less than 4% unemployment here, so anybody that wants a job can have a job. Mobility is high. That's really why our food service business actually grew organically from a volume standpoint, and of course, from a net sales standpoint, was up almost 8% in the quarter. So that's solid. If we're seeing trading down anywhere, it's in Europe, which you'd expect, given the inflationary pressures that they're seeing. And we're well positioned to be able to handle that there, too, with the portfolio business that we have. ... Okay, thanks for that. And then just kind of a follow on would be, have you seen increased promotional activity from some of these customers? And then another topic that I was just curious about was just on the side of pricing. I know that there was a reduction in SBS folding carton grades. Is that all that we've seen on the pricing front? Do we expect any more, you know, maybe some price normalization or reductions next year? So maybe, yeah, you can just address the promotional environment as well as the pricing environment. Thanks. Yeah. So as I said, around the promotional side of things, it's a bit of a, you know, it's lumpy. I mean, some customers are doing more of that right now, and some have said they're protecting their pricing and expect more of an elongated recovery. So it's a bit of a mixed bag there. You know, I expect, because most of our customers have told us they want to grow their volumes next year, as I commented earlier, so I'd expect them to figure out ways to do that. And you know, that usually comes in the form of promotions that they do, or different merchandising options they've got available to us, and I don't think this will be any different this time. That's what gives us confidence in our ability to grow 100 basis points-200 basis points next year or around, too. In regards to pricing, you mentioned the SBS folding, that's the coated, you know, that is down $80 a ton. CRB and CUK have moved down $20, you know, in total this year. So that would be a complete, you know, summary of what has happened in terms of pricing in 2023. And as you would expect, we're not going to prognosticate around pricing, you know, here on a call. But what I would tell you is that at Graphic Packaging, you know, our overall operating rates were pretty good. I mean, you saw it on one of the slides. You know, three of the four substrates that we manufacture, we are actually at 90%, that being CRB, CUK, you know, and cup stock. Those are highly integrated businesses for us, as all of you know. The one that actually was light was, you know, the coated SBS, and in our case, that was down around 70%. As we chose to, you know, really operate those assets to match our supply and our demand, which would be our plan going forward here, too. You know, if you really take a step back from that and think about CUK, you know, in terms of what's going on there, you know, over the last couple of years, we were buying globally some additional paperboard in different geographies to run our business and service our customers. Because of some of the efficiencies we see and some of the demand, you know, adjustments that have taken place, we can now integrate all those tons into our own operation, and export more tons to Europe as well as to Australia and New Zealand. And so that'll that really helps us on the CUK side. And on CRB, with our K3 machine now being down, and it didn't produce actually in the third quarter, but we did have a very, you know, significant, you know, annual outage in Kalamazoo on both our paper machines, ranging from 7 days-9 days. If you factor that 7 days-9 days out, our 90% was actually in the mid-90s. We're running wide open on our CRB system, the mills we have, Kalamazoo, Middletown, and East Angus, to service our business in Q4, and we expect that to be the case as we go into 2021, or 2024 as well. Cup stock, as we talked about, with things like Cup Noodles and, you know, our Chick-fil-A and our overall food service business, which grew in the quarter organically from a volume standpoint, and that's a very solid business. It's highly integrated, over 90%. So, you know, our challenges on the coated SBS has been well chronicled. But in our case, you know, I gave the math for George, you know, 400,000 tons of cup, 800,000 tons of coated. Of that high-level numbers, you know, we need about 300,000 of that to run our business. So the open market portion of it for Graphic, you know, 500,000 tons, so it's about 10% of our overall volume. That's it. And as I've stated earlier, we're trying to find ways to continue to grow our cup business, and we're going to need that capacity to ultimately service customers as these transitions out of foam and plastic continue to occur on the fiber side. So that's how I think you should think about the overall demand profile, which usually is tied to, you know, some level of pricing. Great. Thanks for that, all that detail. You bet. Thank you. Our next question comes from the line of Matt Roberts of Raymond James. Your line is now open. Please go ahead. Hey, good morning, everybody. My question: In regard to permanently shutting the K3 machine in the quarter, you know, while that seems consistent with the initial plan you laid out in 2019, could you discuss how the timing of that played out versus your initial expectations? And what are some of the assumptions or scenarios you're considering on the timing of closing East Angus and Middletown ahead of Waco? Yeah. Thanks, Matt, and appreciate the question. I mean, from our standpoint, our plan was always to shut down our K3 facility. The question was, when could we do so and take care of our customers? And so with the ramp up of K2 and, you know, exceeding our expectations in terms of productivity and quality, we were able to do that on June 30th. So that timing was good. And as I just mentioned, you know, we need our remaining mills and assets to run well, to take care of the business that we have. And so, you know, we do not plan on shutting down any of those mills prior to our Waco facility up and running, just simply because we're going to need the tons to service our business on the CRB side. Yeah, Matt, just to expand on that, if you kind of step back, and we shared it on one of the slides, I mean, we've really played this out since 2019 as described. How we got there is a little different, of course, but the 550,000 tons in, 480,000 tons out. We've grown at a 2% CAGR over the last couple of years. We need those tons, and we've got demand for our CRB. And so, as Mike mentioned, we'll continue to run the CRB platform, you know, very full, taking, of course, our planned typical maintenance outages where appropriate. But there's a real strong outcome there relative to our original commitments. And just repeating something Mike mentioned, the same applies with CUK because of global demand for fiber-based solutions. Right, that makes sense. Thank you both, Mike and Steve. If I could follow on to that, thinking about maybe longer-term supply here. A competitor announced, it seems like they're delaying an FBB conversion, citing market softness. So how has that action changed your longer-term industry supply estimates through 2025 and beyond? Thank you all for taking the questions. I think on the margin, they're seeing, you know, exactly what I just got done describing. You know, where the FBB was going to compete is on the coated SBS side, which is the weakest of all the grades. So that probably, you know, caused them to take some pause. You know, in our case, we're actually shifting out of coated SBS as we can and growing our cup stock business. You know, we're going to have the lowest cost platform for CRB. You know, in the western hemisphere, our CUK is incredibly competitive and highly integrated business, over 95% integrated. You know, so we're just running a different race in terms of how we're putting it together, and that isn't, you know, where we're going to spend, you know, our capital dollars or place our emphasis. We're a packaging company. We want to sell a cup, we want to sell a carton, and we'll make the grades of paper where we can actually earn, you know, a good return for our investors, and that's how you'll see us, you know, allocate our capital. Yeah, and Matt, just to add to Mike's point, if you kind of then step back and assume that there's a long-term delay on the project that you were referencing, from a capacity perspective, there's very limited capacity that is underway coming into the market. There's one conversion happening with a competitor up in Maine, that has some incremental capacity. Obviously, we will bring on a little bit of incremental capacity to support our growth. And you've actually add some capacity reductions that are playing themselves out in SBS, and they take some time to roll through the market. I mean, the Canton Mill that was closed here is now fully down, and I'm sure inventory levels are being managed through. So actual capacity across all three substrates, very modest additions, if you look out over the next, you know, 3 years-5 years, knowing the timelines for any other decisions that someone may or may not make over time. Oh, very helpful. Thank you again. You bet, Matt. Thank you. Our next question comes from the line of Mark Weintraub of Seaport Research Partners. Your line is now open, please go ahead. Thank you. There had been quite a bit of static when you were answering Ghansham's questions, and I apologize, I didn't get everything, so I just wanted to quickly review some of the framework on bridging 2023 to 2024. I think you mentioned Bell, including synergies, was about $30 million positive EBITDA- Correct. And then 100 basis points-200 basis points being your, your kind of baseline. So those I did hear. And I apologize, I sort of lost. I didn't hear too much on the productivity versus labor. Historically, that used to be a bit of a wash. Did you give specifics on sort of netting those two out for next year? Yeah, why don't I, given it sounds like there was a problem with that, let me just repeat the answer for you, Mark, just so that you have kind of the whole context again. What we indicated was that on the positive front, as you just articulated, but playing it back to you again, Bell will be an incremental positive next year, probably in the $30 million range, combination of the business we acquired, plus the synergies, we'll earn on our 100 basis points-200 basis points of organic sales growth. So if you assume $100 million-$200 million of top line growth, we'll earn on that. That actually is a bit of a counterbalance to the price-cost relationship on a mark-to-market basis. So just all known pricing actions, probably about an $80 million net headwind, offsetting the significant price that we've executed on over the last three years. And then we would expect our productivity to be very strong next year. We will have less planned maintenance downtime. We won't plan for a weather-related event that occurred in 2023, in the first quarter, and less market-related downtime as we return to growth. And so we would expect that to fully offset our labor and benefits inflation as it normalizes, you know, back towards—probably more towards that $100 million range. And so those were the components, Mark, that we would see playing themselves out in 2024. So it'll be a different year than 2023 in terms of some of the pluses and minuses, but, you know, as also repeating it, we expect to operate in EBITDA margins that are, you know, a thin range, you know, a tight range, a tight range around that 20% that we're executing on this year. Okay, great. And then lastly, a follow-up, I think from Mike. You were talking about how, you know, there were resets, et cetera, and I just wasn't quite clear. So is the bias on the resets necessarily to the positive, and it's a question of magnitude, or is that to be determined? Well, this is Steve, Mark. Our bias is to the positive, obviously, because we're renegotiating if someone has been under contract for quite some time, and may not have the full increases that we've executed on, because of the model they were on or what have you. The resets we would expect to be net favorable, as we renegotiate them. As repeating it from earlier, we don't outlook those until we're done, until we've successfully executed on them, and that's one of the reasons you've seen price generally moving beyond what might be expected because of those, of the successful negotiations that we've been undertaking for the last couple of years, and of course, we would continue to embark on as you look out to 2024. I don't know, Mike, if there's anything you'd add to that? No, I think you said it well. Yeah. Got it. Very, very helpful. And maybe just lastly, and a topic you've already been hitting on, totally understand kind of the idea of shifting some of the SBS folding carton over to cup stock over time. I mean, you're operating at 70%, so I guess there's also opportunity if that market gets better next year, just selling it, you know, as coated board. Can you give us kind of thought - what is it that would make that - what does it need, that needs to happen for that market to get better so you'd be running more full in that business? And is that part of the improved productivity that you were expecting and then alluded to in the prior comments? Yeah, so it's really two things. You know, we need demand to, you know, obviously pick up, and there's a variety of different verticals where that could happen. You know, on the coated side of SBS, some of the more high-end stuff, as you know, that historically has been used for that kind of paperboard. So that would be. We'd earn on that if we had those sales. But as we talked about here, you know, our approach has been, we're gonna match our supply and our demand, and that's what we did here in the quarter. And ultimately, yeah, it nurses itself and we pick up, you know, underabsorbed fixed costs. I mean, that's exactly how it works, if we're able to operate the mill. But, you know, we're only gonna do that if we have the orders to actually match that. Yeah, and Mark, to Mike's point, as you know, SBS folding carton, so that specific grade, is the most fragmented, most global, least integrated. And so given that there was obviously an overproduction of a little more magnitude over the last year, I think that speaks to the depth of the down, so down towards the 70%, we're matching our supply with demand. And to your point, when all of that plays out, which it is, whether it plays out and you go into 2024, when it does return to a normal pattern of buy, sell, if you will, there should be value creation there as you get to more normalized volumes rolling into 2024. Great. Appreciate all the color. Thank you. You bet. Thank you. Our next question comes from the line of Anthony Pettinari of Citi. Your line is now open. Please go ahead. Good morning. I think you saw net organic volumes down, I think 6% year-over-year, but vol mix was a 9% top line headwind. I was just wondering if you could talk about any mix shift you saw during the quarter. And then separately, I guess in 3Q, food service outperformed grocery on easier comps. Is it reasonable to expect maybe those end markets could perform similarly in 4Q as they did in 3Q? Yeah, Anthony, it's Steve. I think the differential there that you're describing is all the open market paperboard sales, which were down year-over-year. So we outlined that on the third quarter net sales performance. You've got open market sales down a little over $100 million. So that's us matching supply and demand, only producing paperboard that we sell into the open market, where we have orders at pricing that we find consistent and acceptable. And so that's really the point there. The organic sales, as you know, as we've described it, is on when we make an end consumer package. And so hopefully that kind of breaks it out for you. Got it. Got it. And then the food service versus grocery, I mean, you think 4Q would maybe play out similarly to 3Q? Yeah, I think the relationships, probably yes, it'll all be sequentially better as we're articulating. But, you know, I think as Mike has said, and we've shared with you, you know, the drive-thru just continues to win, and fiber-based packaging through the drive-thru is winning. And so, you know, overall, the performance of our food service business has been very good. It was actually up modestly, organically in the quarter, which was a favorable outcome, you know, as part of the 8% improvement year-over-year. So there's good momentum there as consumers wanna be mobile, and they also, you know, wanna have products that are delivered to them effectively, you know, mostly through the drive-thru. So I think the momentum there is very strong, and then it's supported by the innovation, activity that we articulated to you as well here, like Chick-fil-A and others. Okay. Okay, that's helpful. And then, you know, shifting gears, you know, there have been a lot of questions in the CPG and food service space around, you know, potential long-term impact of GLP-1 drugs. I'm just wondering if you had any kind of high level or initial thoughts on if or how this could impact your business, or any anecdotes of consumers using GLP-1, or maybe buying less or more, or shifting their mix of, you know, products that you provide packaging for? Yeah. So, Anthony, if you really-- and you've been watching, many of our customers have done their releases over the last couple of weeks, and they've commented a lot on this because they've gotten a lot of questions on it. And, you know, it's early days in terms of that drug, and I don't think we even know all the questions to ask yet. But having said that, many of them have actually said they don't expect it to be much of an impact, if at all, on their business. And several have said they anticipate that this can be an area that perhaps they can innovate behind it. So I think we're just gonna have to wait and see how that plays out over time, you know, what the adoption rates are and how it all plays out. There's nothing there we've seen or read that gives us pause relative to our ability to drive our 100 basis points-200 basis points of organic volume growth over the medium to long term. Okay. That, that's very helpful. I'll turn it over. Thanks, Anthony. Thank you. Our next question comes from the line of Phil Ng of Jefferies. Your line is now open. Please go ahead. Hey, guys. Appreciate you squeezing me in here. Welcome. Sorry to harp on this. I mean, the non-integrated tons are obviously quite small for you, but you've given some color on how your volume trends have progressed through October and since you stripped that out, and your net organic sales number, and certainly SBS folding carton seems to be a little more under pressure. How do you kind of see the open market tons progressing through the year? And I'm curious if you've seen any more impact, just broadly on imports. At least RISI seems to be dialing up comments around that and maybe it having more of an impact, and making its way into the Midwest. I think the way we're dealing with the open market, particularly on the coated SBS side, as you've seen in terms of the 70% operating rate for Graphic, is, you know, we're matching our supply and our demand. And we'll continue to do that. That's our plan relative to how we would operate the business. I've already told you, our CUK and CRB and the uncoated cup business, you know, those are strong businesses, highly integrated. Our operating rates are solid there, and I'd expect that to continue to be the case, particularly as we get some growth. Yeah, I mean, it's a great question around imports. When you read, you know, some of the trade journals and how they talk about imports, it sounds like there's a, you know, a wave coming. I was interested, particularly on the most recent one relative to CRB coming from Western Europe. So our team went back and pulled all the census data. We looked back a couple of years in terms of what it looked like. Phil, 20,000 tons or less a year for the last three years. It's a 2 million ton market. It's like 1%. So what's most surprising to me on that is just the amount of, you know, airplay that it got. Because we don't see it, you know, in the marketplace, and we're out there every day. We're the biggest producer of coated, you know, CRB, as you know, and we're getting bigger. Maybe even to build on that a little bit, we're the lowest cost CRB producer, you know, in North America. And if you compare net gas against Europe, even today, it's almost five times more expensive. It's almost $20 in MMBTU. And it's more expensive to get a container from Europe to than it is to go from the United States to Europe, almost 2x. And so if we thought selling CRB to ourselves, where we buy over 100,000 tons of material in Europe, was a good long-term plan, we'd be doing it, and we're not. Because it, you know, just isn't economically profitable over the cycle to be able to do that. So there's some stuff maybe around the margin out there. It gets a lot of airplay, but when you really look at the data and the numbers, it doesn't support, you know, the hype. Okay, that's helpful. That's great color. And then since you brought up Europe, just curious, how is your business holding up there? You know, appreciating you're on the converting side, maybe you're able to kind of work through all this, but, your ability to kind of manage price cost in the medium term as well. Our overall volumes in Europe were substantially similar to those in the United States. And I'll tell you, in a couple of words maybe, our strategy is working there. And if you look at how we're doing it, we've got a non-integrated business there, where we're one of the largest buyers of paperboard, you know, in Europe, and that puts us in a great spot right now, where the markets are a little bit, you know, softer, as you've already mentioned here. And so we're buying paperboard very effectively. We're able to export our CUK into that market profitably and have for a long time, as we continue to grow our beverage business. So when you really look at it, and Steve and I talk about it a lot, you know, having a non-integrated business over there, we don't have as much capital tied up to drive the revenue line, you know, in our European business. So when you look at our return on invested capital and compare Europe to North America, which is obviously heavily integrated, you know, in our own paperboard, they're on top of one another. You know, so our overall strategy is actually delivering good results for shareholders. Okay. Appreciate the color. Thank you. You bet. Thank you. Our last question comes from the line of Gabe Hajde of Wells Fargo Securities. Your line is now open. Please go ahead. Mike, Steve, good morning. Morning. Morning. I had a question about backlogs. I know you guys don't necessarily express it this way, but the 3 weeks-4 weeks, I think historically speaking, you guys have talked of, about as probably being towards the low end of what you'd consider to be sort of a, a healthy, balanced market. I'm just curious, for this time of year, taking into account seasonality, is there anything different, unique about that number? You called out the 15,000 tons, that would be associated with, with Nissin, and I appreciate that was, I think, full adoption. More thinking about Chick-fil-A, I think you've identified that as maybe a, an 80,000-ton opportunity, and correct me if, if I'm inaccurate. Is there anything in that backlog number, sort of for pipeline fill into 2024 associated with, with those two products? And then- No. Sort of, when we're talking in February, would you expect to see that backlog number change materially from where we're at today? Again, just taking into account seasonality. Well, I'll answer the second part of your question first. I mean, the overall numbers you talked about are accurate relative to what some of those full conversion adoption rates would be. They're directionally correct, at least, for your modeling. In regards to backlogs, I think you got to take a step back and think about, you know, we're talking about operating rates now, and you're taking downtime to match supply and demand. So, backlogs, quite frankly, are artificial because they can be whatever you want them to be, based on the amount of downtime that you take. So the more germane point is, you know, as we try to articulate here, Gabe, out of three of the four substrates, you know, we're very busy on three of those. It's, you know, the coated SBS, that's the one that, you know, is our, it's got the biggest challenges for us for the reasons we've already chronicled. So, you know, I wouldn't get overly hung up around whether it's three, four, five, six weeks. You know, that matters when you're running full. And right now, you know, particularly on the coated SBS side, we're not. And so, you know, I'd watch those operating rates and really watch and see what our overall growth development looks like here in Q4 and into 2024, 'cause as we grow 100 basis points-200 basis points, that's where those tons come. And I already mentioned the other thing that is out there is that we're no longer going to buy as many tons internationally on CUK side. That'll actually, you know, help drive some of that back, too. Yeah, Gabe, just playing that back, I mean, you just kind of rounded that Mike was just articulating. We've got fundamentally SBS folding carton in the open market, which has the appropriate headwinds, and it's well under 10% of the company. Well under 10% of the company. And so you've got 90%+ of the company that's functioning, as we've been articulating to you here this morning, with good, good volume and an expectation of a return to organic sales growth that we'll earn on in 2024. Okay. No, appreciate that, gentlemen. The last one, if I could squeeze it in real quick. If my model is correct or my notes, you had about $65 million last second half of 2022 of additional incentive comp accruals. I'm sort of bridging this into the free cash flow number. So, I'm assuming... I don't know what that relationship looks like on the IC front versus H2, 2023. Just curious, you know, if that's helping the second half at all. And then really, again, to put a finer point on the working capital component of your cash flow bridge, are you assuming some sort of a, call it a $150 million-$175 million dollar use this year? Hey, Gabe, it's Steve. On the first component, the incentive compensation year-over-year is very similar, so there's not anything there that is a headwind or a tailwind. So it's all pretty consistent, 2022 to 2023, and it's all in, all in the guide. I don't have the exact number in front of me, but yeah, to get to the midpoint of our working capital, there'll be some use of cash on the working capital front, as we dial in, kind of, where do we want to end the year on inventory levels? Where do we want to run supply to meet demand? So I'm sure your model on the use, knowing where interest expense is, where pension expense is, where taxes are, you may be a little light on taxes. Our cash taxes this year are moving up as we become a U.S. cash taxpayer. We've earned the right to do that. So we'll provide some more detail as we kind of work through modeling for next year. But I think the key is that we're gonna generate, you know, the midpoint of that cash flow, and our leverage is gonna end the year, you know, at the lower end of our range. And by the way, that's a raw leverage calculation. It's not pro forma. It's the real leverage of the company after spending $260 million to acquire Bell. Appreciate it. Thank you. Thank you. Thank you. As there are no additional questions waiting at this time, I'd like to hand the call back to the president and CEO, Mike Doss, for closing remarks. I want to thank all of you for joining us on the call today. We apologize for the technical difficulties, if you experienced those on your end. And we look forward to talking to all of you in February at our investor event in New York City. So hope everybody has a great fall and a safe day today. Happy Halloween! Ladies and gentlemen, thank you for joining the Graphic Packaging third quarter 2023 earnings call. Have a great rest of your day. You may now disconnect your lines.