All right. I guess we're top of the, we're the 2:15 here. Good afternoon. I'm Gabe Hajde, the Senior Packaging and Containers Analyst here at Wells Fargo. The meeting right now is Graphic Packaging. We're joined by Steve Scherger, EVP and CFO, as well as Mark Connelly, who's joined us in the audience. I think, SVP of Investor Strategy and Development. GPK is one of the world's largest folding carton and boxboard manufacturers, serving the food and beverage market. This is intended to be kind of interactive, so to the extent people have questions, please don't hesitate to raise your hand. We actually did have one question from the audience last time. With that, Steve, I think you have a couple prepared remarks. Yeah. Thank you. Thanks, Gabe. Appreciate it. Thanks for everybody joining here and those that are joining online via other mechanisms. Appreciate it. Yeah, I have just got a couple slides I thought I would walk through just to kind of set the context for who we are as Graphic Packaging, provide a little bit of an update on the quarter, a little bit of some activities from an industry perspective. You know, just by way of reminder, I mean, Graphic Packaging, we are a consumer packaging company. Everything that we do is making the actual packages that we as consumers interact with in our day-to-day lives, where we are eating, where we are drinking, whether it is at home or on the go, we really are a sustainable consumer packaging business. 95% of everything we do is making the end package that we interact with. We do so by making the raw materials, the paperboard, Gabe, that you've mentioned, as a major raw material for our packages. Everything that we've built over the last decade, particularly, is about becoming that consumer packaging company that's in your life every day. If you went back a decade when we were roughly a $4 billion business, we really were that center of the store, food and beverage packager. We had great customers. They were the big customers like the Anheuser-Busch's and Kellogg's and Kraft Heinz and others. We really were about cereal boxes and 12-packs. If you kind of fast forward to our business today, we literally are a bit everywhere when it comes to food, beverage, food service, consumer packaging, both here in North America and around the world. A very large business in Europe, as an example. We've been highly acquisitive. We've been a consolidator. Today, wherever you're eating and drinking, whether it's at home, going through a drive-through, whether you prefer branded products, whether you're a private label consumer, whether you're going through the drive-through multiple times a week, or you're shopping for the next month, or you're buying tonight's meal, you're feeding your pet, brushing your teeth, we're gonna be a part of your life on a day-to-day basis. As such, obviously, we're in, you know, products in the hands of millions of consumers. We literally make billions of actual packages around the world. We produce those. We make the raw material. We actually create the package itself, deliver it to our customers, and they, of course, turn it into the actual product that you as a consumer and we as a consumer take home. You can see the mix of business. About 40% of the company, food packaging, about a fourth of it, beverage packaging. Think six-packs, 12-packs, basically carrying home the beverages of choice. Food service is basically the drive-through, the QSR business. Think about that as Chick-fil-A, McDonald's, Dunkin' Donuts, and others. The household, that's the day-to-day life of feeding your pet, changing your air filters, the at-home consumption patterns that we all have. Then we've got a nice health and beauty business that came with an acquisition we completed in Europe, AR Packaging. Margin stability has been critical, really through a unique set of times over the last couple of years. Positive volumes, some negative volumes, some stability, some instability that all of us have been managing through. We've really constructed a business that has a very high level of margin stability and, as such, has cash flow stability as well. It is something that has really been a big part of the transition to becoming a consumer packaging company over the last decade. Growth is critical. Innovation is critical. We now have what we have identified as a $15 billion addressable market for innovation, for bringing new packages into the marketplace that are in other alternatives. Most of it is replacing plastic or foam or other resin-based solutions. That is where we see a lot of our growth, whether it is moving out of a foam or a plastic cup into one of our cups, or it is moving out of another resin-based solution into our fiber-based because they are preferred by consumers. Recyclability, renewability is really at the forefront of everything we do, is making a package that we can make one time, then have it be recovered in our natural recycling capabilities, and then make that product another six, eight, 10 times. A real true example of actually operating in the circular economy. We developed Vision 2030 after really executing on Vision 2025 several years back, where we really focused on having an algorithm for the business where we grow over time, our top line, low single digits, organically, through our innovation efforts, through the day-to-day life of the consumer, have that leverage into mid-single digit EBITDA growth, and then obviously leverage into high single digit EPS growth. We'll talk a little bit about where we're at in that, given some of the unique environments that we're in today with a pretty stretched consumer, and how some of our customers are managing their volume expectations with us and with all of you. Our cash flow engine is substantial. We're in the middle of and nearing the end of a capital investment expansion time for us, bringing the world's second low-cost, high-quality Coated Recycled Paperboard facility to life in Waco, Texas. We'll complete that later this year, and inflect towards very substantial cash flow generation in 2026 and beyond, given the margin stability, given the business that we've created as a consumer packaging company. We're excited about that. We've got great opportunities to allocate cash flow, both now and as we look out over the next several years. That's just a brief snapshot of the company. Let me just take a minute, Gabe, and I know probably we'll match up with some of the questions, as well. Just a couple of things I wouldn't mind spending a couple of minutes on. Typically, we won't talk about industry structure much, but because of some of the activities in Coated Recycled Paperboard, I thought I'd take just a moment and kind of describe the current capacity, supply-demand environment for Coated Recycled Paperboard. We're making our investment in Waco. We had our Kalamazoo investment to develop differentiation in Coated Recycled Paperboard here. One of the things, just to kind of provide some context, because I'm not sure it is well understood, is the Coated Recycled Paperboard market in North America is about a 2.7 million ton market from a capacity perspective. From a capacity perspective, over the last 90 days, there's been three closures announced within the industry. One, we are closing our Middletown Coated Recycled Paperboard facility ahead of starting up Waco, and two competitors are closing their manufacturing, some of their manufacturing for Coated Recycled Paperboard as well. It accumulates up to about 390,000 tons of Coated Recycled Paperboard capacity that's coming out of the market and will fundamentally be out by the end of this quarter. Mm-hmm. That represents 14% of the capacity of that 2.7 million tons. So there's a very substantial capacity coming out, that certainly, given the demand, consistency that we have, you know, should be driving operating rates, backlogs, etc., and I would expect to see that over the coming quarters. We'll then be bringing to life our Waco facility over a 12- to 24-month period of time, and we'll be closing our East Angus facility. So we'll close at East Angus, about 100,000 tons. So 490,000 tons of capacity coming out of this 2.7 million ton market, and we'll be adding about 550,000 tons over a multi-year basis. And I'm sharing all that with you because we're going through a period of time where I think there's a kind of a thought that, well, Waco just comes up and there's capacity being added and the like. The reality is, is the supply-demand dynamic will actually have less capacity probably for the next year and a half, two years, and then equalize out as we bring Waco to life. I wanted to just provide some context there because it is a bit unusual for that much capacity to come out of a market, ahead of capacity coming into that market. I think it leads to a very constructive industry dynamic, as, as I am sure we can talk about. Just briefly on the quarter, we have now gotten through two of the three months of the quarter, just in terms of our full-year guide. No change today to the guidance that we have. No change to the full-year expectations. As we are watching Q2 play out through May, overall volume is exceeding our expectations a bit. We're running a little more flat on volumes, through the first two months of the year. We've seen a little bit of promotional activity taking place, probably well chronicled, I know, by you, and others on the beverage side, through the Memorial Day holiday. Volumes are exceeding our expectations a bit, more flattish as opposed to the minus 2% that we had talked about with our guide coming out of Q1 results. Inflation, probably a little bit modestly less than what we expected as well. On that side, a little better volume than expected. Inflation modestly below the expectations that we had. We are being very aggressive this quarter in taking production out of our infrastructure to drive inventory out of the company. As you know, we had our maintenance annual outage at our Texarkana facility. On the Bleached side, we're taking advantage of that to take about 25,000 tons of capacity, production out during the month to drive inventory levels to where we want them to be in that business. We're closing our Middletown facility, as I mentioned. We're being very aggressive to take inventory out of the business, match, have our production be at or below our demand such that our expectation, we typically don't guide for the quarter, but our expectation for the quarter, EBITDA in the $330-$340 million range, well positioned on inventory reduction such that we'll be able to run actually quite full with the majority of our maintenance downtime behind us in the first half, and in a position to drive inventory out of the business for the remainder of the year with Middletown closure behind us and be able to run quite full for the rest of the year, which gives us confidence in our full-year guide. I just wanted to provide a little bit of an update for you on kind of the mid. In kind of conclusion, you know, we're looking forward to, obviously, the business that we've built and executing on it, but the cash flow inflection that we shared with you and the Vision 2030 aspirations, seeing that come to life, particularly as we exit out, running quite full in the second half of the year would be our expectation, and then leading into bringing Waco to life, and beginning to see that $160 million of EBITDA improvement coming in, in 2026, in 2027, roughly $80 million a year. Tried to fill up a little bit of there to get after some of the things I know that we'll talk about. With that, I'll be glad to jump into questions. Thank you for all that. There is a lot of moving parts there, Steve, I guess. This is, look, I mean, it is kind of seven years in the making. You guys have been hard at work. Like you said, there was Vision 2025, 2025, excuse me. Maybe just a point of clarification on bringing up 550. I feel like what I am hearing from you is Kalamazoo, you installed a new machine in an existing facility. This is a brand new greenfield. I think initially, kind of two-part question. I think initially kind of had a billion-ish dollar price tag. You talked about maybe a billion one on the Q1 call. Just any adjustments there. I feel like what you want to leave us with is just because it's nameplate capacity 550 does not mean you turn the switch on and all of a sudden you are going to get all the production day one. Obviously, you are going to be running to demand even, you know, let's assume that we have got this value-seeking behavior in 2026 for whatever reason, that does not mean that it is all going to hit in 2026 either. Yeah, that, that's critical. And thank you for asking that. I mean, the 550,000 tons of eventual capacity will be, you know, it'll take 12-18 months to kind of ramp up to that. So we'll get to that as we're kind of exiting out of 2026 into 2027. You don't flip a switch and have 550 come in. And while that's happening, the 490,000 tons of closures will take place. The opportunity for, you know, the supply-demand dynamic to play out in a relatively balanced way is actually quite high and quite favorable in that regard. And we will absolutely only produce to the demand that is there. It's one of the reasons we're driving inventory out of the business so aggressively this year so that we can ramp up nicely, as we're servicing our customers. All of this is in the context of servicing our customers with excellence throughout that so that they don't miss a beat, in terms of their packaging needs. I think one of the things too, you touched on it with Kalamazoo, it was more of a brownfield investment meaning we were adding to an existing facility. With Waco, it is a greenfield. One of the things we're very fortunate to have is the entire team that we've hired who are now on board are actually in Kalamazoo, learning to run the facility on site, and it's the same basic facility that we're bringing to life in Waco. We're very fortunate to be able to kind of replicate the training, the preparation, the team, the hands-on, which gives us very high confidence in the startup of that. We'll do it on a metered basis. We'll do it based upon the demand that we have. Overall, no, we couldn't be more excited and positive about how Waco's coming to life. We're also equally, you know, as positive on the CapEx inflection back down to a 5% of sales as we kind of look out to 2026 and beyond. Okay. I won't pretend to understand what may happen with inventories in the short term and people selling out as they close facilities and all that stuff, but maybe just high level, I think I know the answer to this, but, you know, your competitors choosing to close some facilities maybe ahead of that factory ramping up even. Can you talk about competitive positioning of Graphic relative to the competition in your kind of key grades? Yeah, I think, you know, in Coated Recycled Paperboard, you know, we've made significant investment decisions, as you know. And so we believe that long-term Coated Recycled Paperboard in packaging, it will be a good, strong growth engine for us, where we will be cost and quality advantaged. I think the competitive moves you're referencing tend to be decisions made around cost, quality, and integration. I think those tend to be decisions around, is there a long-term viable return from the investments, or the assets that competitors have. I think for us, how we're focused on it is, is we want to make paperboard, the raw material for our packaging, where we see cost and quality advantage. In Coated Recycled Paperboard, we will have a very large market position in that with cost and quality advantage to make the packages, you know, to actually make the packages. In Unbleached Paperboard, where we have a very large market position as well, same. We have two world-class facilities in Coated Recycled Paperboard, two world-class facilities in Unbleached, two world-class facilities in a market that is growing globally, mostly for beverage packaging, where we can see growth for years to come on a quality and cost advantage or competitively consistent basis with the primary competitor. In Bleached Paperboard, as you know, we really elected to have just one asset in Texarkana, heavily focused on supporting our cup, bowl, and tray business. We exited from the Augusta facility because we just did not see for us competitive advantage in making just the paperboard. We wanted it, we want our business to be focused on consumer packaging, making the end package. As such, we have one facility that supports our, primarily our cup business. As you know, we make about 40% of the paper cups in the U.S.. That, again, is a decision. Once complete with Waco, we will have five world-class paperboard manufacturing facilities that will have the appropriate advantages so that we can generate above cost of capital returns when we turn that paperboard into a package. I thought that's what the answer was, but thank you for that. Should have had you answer. No, the last five years have been anything but normal. So we've, right? We had pre-pandemic, we had a spike in demand, we had post-COVID burn off, et cetera. It seems like CPGs right now are trying to strike an equilibrium between price and volume. I don't want the question to be too necessarily near-term sighted, but you mentioned volumes being a little bit better here in the second quarter. Q1 was maybe a little bit disappointing. Yep. Can you elaborate a little bit? Is this, you know, CPGs being, living hand to mouth a little bit with inventories, and maybe their choices around promotions? You talked about even planning coming into 2025. Again, Q1 a little bit disappointing. They said, "Hey, listen, we think we're going to have growth of 2-3%." Now maybe it's going to be closer to flattish, and maybe it's just more a response to the consumer. Yeah, no, there's a lot there and I'll try to touch on it a bit. I mean, overall, as you said, I mean, our expectations around promotion and growth kind of starting at the back half of last year working with our customers is that most of them expected to pivot towards some promotional growth Q3, Q4 last year into Q1. What almost across the board with our customers they've elected to do is to maintain their pricing stability, which has been price increase over the last several years, and to be willing to have volumes be modestly down. I think one of the things we observed back half of this year, first half, first quarter of this year is that broadly the level of promotional activity was very low. As such, almost across our entire network of CPGs, QSRs, we saw volumes down 2%, 3%, 4% very consistently, which is one of the reasons we elected at Q1 to say, "Listen, let's make that the working model and the working assumption for the business. If it's better than that, great. but let's make that how we run the business, drive the production down, drive inventory out, get prepared for a future state." It has been interesting because in core food markets, a lot of the center of the store, big, big CPGs, promotional activity has stayed actually quite low. There we have not seen some of the positives we were just chatting about where we saw pockets of promotional activity. Well chronicled was on the non-alcoholic side of beverage, over the Memorial Day holiday, some more pervasive, I'll call it, promotional activity. Now, whether that's driving volume or not is more of a TBD for the year because you see the promotional activity in the May timeframe, whether that will lead through to volume gains will depend upon kind of June, July and how the summer plays itself out. It was at least a pocket of promotional activity that's allowed for a modest acceleration of volumes beyond where we had, kind of it's within the range of what we guided, but a little bit more towards the positive side of that. I think what's going to be interesting to watch is there's so much uncertainty for the CPGs and QSRs right now when it comes to tariffs, when it comes to, you know, MAHA implications, when it comes, you know, relative to their products, whether it's SNAP implications. There is that uncertainty while not having an impact on their volumes necessarily, maybe having an impact on how they're thinking about promotions, because if their products are going to cost more to produce eventually because of changing out of materials or ingredients, you know, is now the time to promote. We're seeing pockets, but it's been more limited than we expect, which is why we're choosing to kind of run the business to the volume that we're seeing. It is unusual to have volume declines for a couple of years across the CPGs. That is the unusual part that you're referencing, which is you had post-COVID, you know, issues, you had supply chain issues, both those got in the way of volumes, and then you had inflation. Now you've got a stretched consumer. The consumer is in fact stretched. Overall, over time between CPGs and all the private label producers and the like, I have every expectation, we have every expectation that volume for us eating and drinking will stay relatively stable, and then we'll win with our innovation efforts as you kind of look out over time. That is why we haven't moved off of our Vision 2030 aspirations, recognizing though that in the short term, we're not at those aspirations. That is relevant for us, and that is why we've got to obviously stay focused on our innovation efforts close to our customers, so that the algorithm for margin stability and growth stays in place and the inflection to cash flow. I don't want to drill too deep on volumes, but maybe by category, and I'm trying to remember the arrows that you gave us on Q1. Yep. Maybe some of the, are we seeing any divergence, if you will, by category for some, I'll call it some of the more semi-discretionary, I'm thinking pet food, like, hey, I'll just feed them dry food in a bag instead of getting them the dog treats this month or whatever. Anything in that regard that you'd call out, that you're seeing? You know, I think what we'd call out is what we were just chatting about a little bit. I think in our 25% of the company, the beverage side of the business, there's more of a global growth momentum. There's a nice move there broadly out of plastic rings, out of resin-based packaging, et cetera. The actual growth profile globally for beverage has good stability to it. The promotional activity is obviously modestly favorable. Food service in many ways, 20% of the company, has similar characteristics because you still have, we still see conversions net from foam, from plastic into cups, into bowls, into trays, through the drive-through, through the QSRs. Those two actually, you know, continue to have a natural momentum towards modest growth. It's in the categories you're just referencing, mostly on the food, kind of core center of the store food side, and some of the core consumer, pet food, laundry detergent, you know, filter frames, et cetera, where you've seen less promotional activity, a stretched consumer, and kind of more unevenness, if you will, relative to volume. Pockets of natural favorability, pockets of uneven, which is why we guided to where we were, kind of in that, you know, some of the pressures we were seeing that through the CPGs to the customers. That's how I'd characterize the big pockets. Health and beauty, 4% of the company, mostly in Europe, a little uneven there too, better on the health side, a little less on the beauty side where you've got a little less, you have more discretionary spend. Okay. It wouldn't be 2025 if we didn't ask about tariffs. Yeah. Maybe just other than the uncertainty as it relates to the consumer, direct impacts for Graphic, and then what you're seeing, you have a pretty sizable European business, any implications? Yeah. Direct impacts today, just because you've got a fair amount of things being pushed and the like. The actual true direct impact is measured in low millions of dollars and it tends to be a little more just inflationary based upon certain supply lines and the like. I'd characterize the true direct impact as relatively modest. The potential impacts that are still kind of in motion to your point will primarily be how do tariffs both directions play out mostly to Europe. Because on the one side, let's just assume there were reciprocal tariffs going both directions, on 10% range or what have you, that's where this lands. Again, that's just all hypothetical. If that were where this was going, there would be a headwind, tailwind inside of that. On the tailwind side, it would probably have an impact on the importation of paperboard from places like Europe, Finland, Sweden, et cetera, into the United States. That would be a natural potential tailwind for imports. It doesn't really impact our business materially today, but more broadly relative to paperboard. It would then have some implications for the paperboard we send to ourselves in Europe primarily to service our beverage packaging business. Those are the things that we're monitoring. I don't expect those to have material impacts on the company. We're fortunate that our business is pretty regional, in its nature. While we're not completely insulated from tariffs, the implications compared to other businesses I'd characterize as relatively modest. Okay. On the price side, again, I'd kind of be remiss if I didn't ask the question. You guys announced a $40 a ton price increase for two grades back in April. I think it was for a May 15th implementation date. I think on the positive side, and we've talked about this quite frankly at length, you all have done a good job of migrating away from some recent index or indices for your customers. I'm assuming those conversations are being had. They understand where the price increases are coming from. It hasn't been reflected in the index. Right. Is that, I do not want to give you the answer, but perhaps a function of OCC continues or recycled fiber continues to be a little bit soft. Maybe demand is not where the market expected it to be. Just maybe from your vantage point, what your observations are? Yeah, I think, you know, at the broader level, you're right. We continue to work with our customers to put in place a new index that we've developed for price change mechanisms when we earn our business with our customers that our customers are finding quite appealing. You know, it's very transparent. It's a known set of commodities. It's a known set of the relationship on how that correlates to our costs over time. As such, we've got good momentum. That's a multi-year initiative, and that initiative just is in the early stages, but really over the next several years, we will move to that as a transparent price change mechanism. To the increases though that are relevant to us, as you know, on what we've announced, there's not traction on those at this point. What we do not have in our hands today is a little bit of the positive price momentum that we want to have on that front on the paperboard. It can be a series of activities, as you just said, as I was providing in the update. There are a lot of moving parts in Coated Recycled Paperboard right now with capacity closures occurring. You have activities within the construct of that that are occurring. OCC, obviously, you know, maybe to a lesser degree, is modestly down. I think allow the next three to six months to play out relative to industry backlogs and operating rates. It is interesting, as you know, we do not talk a lot about backlogs and operating rates as much as we may have a decade ago. but actually, backlogs, interestingly enough, for Coated Recycled Paperboard and Unbleached Paperboard are at the highest they've been in two plus years. That's the current environment, a lot of what we were just chatting about in terms of how this is playing itself out. I think that's relevant to this pricing environment because it's important right now. It's one of the things we're intensely focused on. We're getting some of the pricing through our cost models and the like, but we must pivot to a modestly positive price environment. We are in a modestly negative. It's modest minus 1% needs to be, you know, plus one, plus two, given bits of inflation that are, you know, still existing in the business. It's a critical priority for us in order for our margins to be in that 19% plus range, before we kind of bring the benefits on of Waco. Yep. I was going to shift to Waco Vision 2030. When you look at the arc of the cash flow generation, you guys obviously had to cut guidance this year. Maybe starting a little bit behind just as you embed in the $80 million, and I'm not asking for guidance next year, but you embed in the $80 million of benefit from Waco. Two-part question. One, is there some volume contingency in there, maybe on to the $80 million in 2027, that we got to look out to? And then obviously the CapEx is pretty easy. We're not building a plant, so we're not spending the capital. That will inflect. I think the $800 million kind of bogey for next year, thinking about cash taxes, working capital, maybe that's why you're being aggressive this year to drive working, you know, inventories down. Just thinking about the moving pieces and the arc of the cash flow. Yeah. No, you saw it in the materials on our, the arrow chart, if you will. You're absolutely right. EBITDA is modestly behind the expectations that we established with Vision 2030. We can still see 2026 progression inside of the range of outcomes that are there, probably more in the $800 million range versus the billion. Just because of where the EBITDA is, we can see the path to EBITDA improvement next year. What's good about Waco is, of the $160 million of EBITDA improvement, $80 million next year, $80 million the year after, $100 million of that is purely cost takeout and lower cost to produce. We get the first $100 million on just bringing the facility to life, closing other facilities. The final $60 million does rely on a reasonable volume environment matching up with the supply demand that you were chatting and we were chatting about earlier. That is important. It is an imperative for us. That is why this inflection, just modest stability at the consumer level, modest organic volume growth will be an enabler for the return profile there. I'll squeeze in one last one. We got about a minute left. You talked about leverage, I think being three and a half for 2025. Investors are really excited again about the cash flow inflection, shareholder friendly return. Are you guys being a little bit opportunistic now? You talked about kind of maybe pulling some levers on share repo, to kind of balance between what you think is the long-term kind of intrinsic value. And then obviously as you look forward, just to be clear for everyone, Mark and I were talking about it before, but share repo is kind of like the primary lever that you see as shareholder return over the next three to five years. We do. We do. And we announced a $1.5 billion share repurchase authorization. We have $1.8 billion of firepower for share repurchase. That is the next major investment in the company back into the company. We do not need to make another large scale capital investment. That is great. We elected to, in our guide, take our year-end leverage to three and a half times really to allow for some capacity for share repurchase this year. We will not stay at three and a half times. We will not go above three and a half times. If you look kind of down the midpoint of our guide at three and a half times, there is some room to begin the share repurchase activities, particularly given the valuation of the company relative to our expectations going forward. Yes, very high prioritization around that. Still, long-term investment grade is going to make sense for the business given all the cash flow, but that's kind of a, of a down the road. We, of course, make those trade-offs between debt reduction and share repurchase based upon the valuation of the enterprise, but we've got room to maneuver now, inside of that. Excellent. Thank you. I think that concludes the day. Excellent. Thanks everybody. Appreciate the time.