Good day, welcome to the Pactiv Evergreen Incorporated Fourth Quarter 2022 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Curt Worthington, Vice President, Strategy and Investor Relations. Please go ahead. Thank you, operator. Good morning, everyone. Thank you for your interest in Pactiv Evergreen and welcome to our fourth quarter 2022 earnings call. With me on the call today, we have Michael King, President and CEO, and Jon Baksht, CFO. Please visit the events section of our investor relations website at www.pactivevergreen.com and access our supplemental earnings presentation. Management's remarks today should be heard in tandem with reviewing this presentation. Before we begin our formal remarks, I would like to remind everyone that our discussions today will include forward-looking statements, including but not limited to statements regarding our guidance for 2023. These forward-looking statements are not guarantees of future performance, and actual results could differ materially from those contemplated by our forward-looking statements. You should not put undue reliance on those statements. These statements are also subject to numerous risks and uncertainties that can cause actual results to differ materially from what we expect. We refer all of you to our recent SEC filings, including our annual report on Form 10-K for the year ended December 31st, 2022, for a more detailed discussion of those risks. The forward-looking statements we make on this call are based on information available to us as of today's date, and we disclaim any obligation to update any forward-looking statements except as required by law. Lastly, during today's call, we will discuss certain GAAP and non-GAAP financial measures which we believe can be useful in evaluating our performance. Our non-GAAP measures should not be considered in isolation or as a substitute for results prepared in accordance with GAAP, and a reconciliation to the most directly comparable GAAP measures is available in our earnings release and in the appendix to today's presentation. Unless otherwise stated, all figures discussed during today's call are for continuing operations only. With that, let me turn the call over to Pactiv Evergreen's President and CEO, Michael King. Mike? Thank you, Curt. Good morning, everyone. I'd like to start by welcoming Curt to his new role as Vice President, Strategy and Investor Relations. Curt brings more than 25 years of experience in the industrial and finance sectors, and we're excited to have him on the Pactiv Evergreen team. Yesterday, after the market closed, Pactiv Evergreen released solid fourth quarter and full year 2022 results, which exceeded the high end of our full-year guidance range of $760 million-$780 million. Our $785 million of full year Adjusted EBITDA highlights the many strengths of our organization as we accomplish numerous goals while managing through the obstacles presented to us over the last couple of years from the onset of the pandemic. Turning to the agenda on slide 4. I will start today's call with a strategic update as well as some details of the beverage and merchandising restructuring plan that we announced yesterday as a part of our earnings released and related SEC filings. I will provide some comments on our 2022 full year highlights. Jon will discuss Q4 results and full year financial performance in more detail. Finally, I will cover our ESG update and their 2023 outlook, we'll move to some Q&A. On slide 6, starting with an overview of how we are driving strategic focus at Pactiv Evergreen. We know who we are as an organization and what our strengths are. We intend to continue to execute with a high level of focus on these strategic areas. We are focused on food and beverage. We are number one or number two in the majority of our markets, and we have strong relationships with our customers, many of which are large blue-chip companies. We are focused on North America. This is where we see our best opportunities for profitable growth. This is where our operations and our customers are and where we are operating at scale. We are focused on converting operations and are decreasing our exposure to high capital intensity, low margin, raw material operations. We will discuss this further as we get into the details of our beverage and merchandising restructuring announcement. We are focused on sustainability, making sure that our products are environmentally friendly, and anticipate the sustainability desires of our customers. We are on trend. The packaging space is constantly changing. We are constantly innovating to stay ahead of the latest trends. We are a packaging solutions provider. We don't just sell cups or containers. We provide our customers with complete solutions that address their needs across all types of substrates and applications. Importantly, we generate dependable returns. We have balanced product and end market exposure. We are focused on driving profitable growth and generating consistent returns for our shareholders. Moving to slide seven. We have consistently emphasized several key themes in our communications. We said many times that we would focus on our core North American high-margin business, that we would streamline our operations, that we would de-leverage, and that we would put a high level of focus on ESG. As we stand in early 2023 and look back, we can be proud of what we have done in each of these areas. We've already made great progress in reshaping our portfolio to focus on our core in North America. We have executed multiple divestitures of non-core businesses, including the sale of our Asia beverage merchandising business, which realized proceeds of over $330 million. We acquired Fabri-Kal, expanding and strengthening our position in the foodservice and consumer packaged goods businesses and integrating great brands such as Greenware and Recycleware. We have centralized our organization, reduced our net leverage ratio, both by paying down debt and by increasing Adjusted EBITDA. We are continuing our strong focus on ESG. Today, we will discuss what is next. The beverage merchandising restructuring plan we announced yesterday is the next big step in our evolution to become a stronger, more competitive business. This will be a significant multi-year effort designed to further advance all priorities that we have established. Moving to slide eight. We previously announced that we would undertake a long-term strategic review of our beverage merchandising segment to identify options to optimize its footprint, implement manufacturing improvements, and identify operational efficiencies to help us meet our customers' changing needs and strengthen our leadership position in food and beverage packaging here in North America. This evaluation process has led to a number of significant changes in this segment, including the sale of several international locations. We have progressed our internal strategic review further, and our board has approved further actions, which include simplifying our production strategy to more effectively align with our strategic focus. Additionally, we will be reorganizing our management structure and combining our food merchandising and our beverage merchandising businesses. These strategic actions are expected to reduce our ongoing capital intensity and fixed overhead costs. We intend to maintain supply continuity and take measures to ensure that we can continue to support our customers. We believe that these proactive steps will position us to remain competitive and positioned for sustained, profitable growth and returns in the liquid packaging market by increasing our overall productivity and optimizing our manufacturing footprint. As part of these actions, we expect to ultimately exit the uncoated freesheet paper market, which is our lowest margin operation. Slide 8 shows a high-level view of what our beverage merchandising business looked like at the time of our IPO in 2020, and what we project that it will look like in the future. In 2020, this business had a large global footprint and was a low margin, high CapEx business with vertically integrated manufacturing, including our mills. Since our IPO, the integration of the beverage merchandising business, Evergreen, into the legacy Pactiv business has been a strategic priority. The business included operations in Asia, Central America, and the Middle East, with 14 facilities and 5 million sq ft of manufacturing space. We've already executed a number of actions to reshape our portfolio. We've exited the coated groundwood paper business, as well as operations in Asia, Central America, and the Middle East. The additional restructuring actions we have just announced envision an evolution in our business profile to one that is focused on carton converting and filling machinery and is combined with our food merchandising business, reducing the number of facilities by approximately 40% and the associated square footage by almost 50%. These changes will drive significant cost benefits with a lower CapEx requirement and increased cash generation. Moving to slide 9. The key steps we plan to take as a part of our beverage merchandising restructuring over the coming months include: We expect to close our mill in Canton, North Carolina, during the second quarter of 2023. We expect to close our converting facility in Olmsted Falls, Ohio, during the second quarter of 2023 and concurrently reallocate its production to our remaining converting facilities. The plan will result in a workforce reduction of approximately 1,300 positions. We remain committed to doing what's right, treating everyone with respect and delivering on all our commitments. We will provide outplacement assistance and severance to impacted employees consistent with the company's policy and labor union agreements. I also want to take this opportunity here to express my gratitude to our dedicated employees at the affected locations for their years of service. We are investing approximately $60 million in state-of-the-art equipment which supports our converting strategy for our beverage business. We expect this investment will significantly lower our cost and will position us for growth in 2024. We will combine our food merchandising and beverage merchandising businesses into a single business starting in Q2 of 2023. As a result of the restructuring, we expect to incur non-cash charges in the range of $310 million-$330 million, primarily during 2023, related to the acceleration of depreciation of plant and equipment. We also expect to incur and pay cash charges in the range of $130 million-$185 million during 2023 and 2024 related to severance and associated benefits and exit and disposal and other transition costs. Once these actions are complete, we believe our beverage merchandising business will be better equipped to deliver more reliable and sustainable results. While we plan to incur one-time non-cash charges and cash outlays primarily during 2023 and 2024 to implement these plans, we expect to begin realizing the benefits to our operating results as we close out 2023 and move into 2024. We are targeting an annualized reduction in our cost of approximately $30 million and approximately $50 million in reduction of CapEx, with full annualized run rate of these benefits expected to be realized beginning in 2024. We also intend to continue exploring strategic alternatives for our mill in Pine Bluff, Arkansas, and our facility in Waynesville, North Carolina, while we continue to operate them. The company has not yet set a timetable for completion of this review. Overall, we believe our restructuring plans will enhance our ability to deliver shareholder value through reduced operating risk and earnings volatility, will reduce the capital and overhead required to sustain the business, all while maintaining high service levels for our core customer base. Moving to our full year 2022 highlights on slide 11. 2022 was another productive year for us. This great organization executed very well on many fronts. We reported full year net revenues of $6.2 billion, a 14% increase over the prior year on strong pricing and cost pass-throughs combined with the benefit from the acquisition of Fabri-Kal. Our sales volumes declined 8% largely due to the outsized impact of the reopening of the U.S. economy post-COVID lockdowns in the prior year and softening sales volumes into year-end. Additionally, the sale of our Beverage Merchandising Asia business in Q3 of 2022 contributed a further 2% decline in volume year-over-year. Our year-over-year revenue performance highlights our successful efforts to manage price while restoring the business to target customer service levels. We stabilized our workforce, invested in inventory to return to target levels, improved equipment effectiveness and production throughput, and effectively managed our pricing amidst a challenging inflationary environment. We ended the year with strong operating results. Our full year Adjusted EBITDA of $785 million, which exceeded our most recent guidance, is a testament to the company's resilience in the face of challenging market conditions brought on by elevated inflation and interest rates, a tight labor market, and the resulting market volatility. During the year, we were able to further divest non-core businesses for aggregate cash proceeds of $383 million. We reduced our net leverage ratio to 4.6x as of year-end, down from 7.6x at the end of 2021. We transferred an aggregate $1.9 billion of gross pension liabilities off of our balance sheet. I would also note that the legacy Pactiv Evergreen pension plan is fully funded. We published our updated ESG report in August 2022. We remain focused on our ambitious goals, one of which is having 100% of our net revenues in 2030 come from products made from recycled, recyclable, or renewable materials, compared to 66% in 2022. I want to thank everyone at Pactiv Evergreen for the diligent efforts and focus that helped us achieve these accomplishments. Looking at 2023, we are of course well into the year. We have more work ahead of us to continue delivering on our commitment to streamline our business and enhance shareholder value. Our areas of focus during 2023 will include the efficient management and execution of our restructuring plans, delivering for our customers, proactive workforce training, productivity, and our commitments to sustainability that I will touch on in my concluding remarks. I will now turn it over to John to discuss our fourth quarter highlights, business drivers, and fourth quarter segment performance before my discussion on ESG, outlook, and closing remarks. Jon? Thanks, Mike. Turning to slide 12, starting with fourth quarter results, net revenues were $1.5 billion, with Adjusted EBITDA of $167 million. Net revenues and Adjusted EBITDA were both down versus the prior year quarter and versus Q3. Our fourth quarter performance was impacted by expected seasonal weakness coming off the summer months that typically bring stronger demand, combined with higher manufacturing costs and a broader slowdown in consumer spending that further impacted volumes. Looking at our business drivers, as noted in our most recent earnings call, 2022 was a challenging year with regard to inflationary cost pressures that affected many aspects of the business, most notably wages, input material and logistics, and softening demand late in the year. On these points, we are seeing a moderation that could indicate that inflation has peaked, although we are cautious because absolute inflation levels remain elevated, which we expect will continue to keep pressure on interest rates and the consumer well into 2023. Inflation levels in the food sector remained at more elevated levels than general inflation, and we saw the impact through softer sales volume in Q4, and this trend is continuing into the start of the year. We have seen pricing traction across most areas in the business, we are also seeing increased pricing pressure from foreign imports driven by the drop in shipping rates and the strength of the dollar. One positive is that resin prices have plateaued and in some cases begun to decline modestly. These impacts are mostly passed through to our customers, albeit with a lag. We are seeing declining input costs. Transportation costs softened in late 2022 and continue to soften in 2023. Natural gas has seen a meaningful decline. Other input costs such as energy, chemicals, and wood have generally stabilized. While U.S. Unemployment remains low, wages have generally stabilized. However, employee retention and training at lower skill levels remain a key focus area. We have noted sales volumes as a recent challenge as consumer demand in many areas is moderating. In our food service segment, we have observed our customers destocking, combined with reduced foot traffic within the QSR market segment. Our food merchandising segment has seen relative strength from the recent shift out of dine out to dine in at home by the consumer, combined with continued resilience in retail, notably in the protein and egg channels. Our beverage merchandising segment continues to see softness in board sales and uncoated freesheet. Finally, Winter Storm Elliott created operational headwinds for our beverage merchandising mills during the fourth quarter, and we expect there will be residual impact during the first quarter of 2023. Continuing on slide 13, fourth quarter year-over-year results. Net revenues were down 3%. Volume is down 10%, primarily due to the market softening and inflationary pressures across all segments, a focus on value over volume, and the strategic exit from the coated groundwood business in the beverage merchandising segment. Revenue was also impacted by the disposition of Evergreen Asia and closures businesses. Price mix was up 11%, primarily due to the contractual passthrough of higher material costs and pricing actions across all segments. Adjusted EBITDA was down primarily due to higher manufacturing costs, lower sales volume and higher employee-related costs, partially offset by favorable pricing, net of material costs passed through. Higher costs included $80 million of additional costs incurred related to the impact of Winter Storm Elliott and $80 million related to scheduled coal mill outage. The increase in cash flow was primarily due to positive working capital changes. Moving to slide 14 for a sequential quarter comparison. Fourth quarter net revenues were $1.5 billion, down 8% versus the prior quarter, largely on declining sales volumes across all segments from slowing consumer spend, seasonality and the sale of the Beverage Merchandising Asia business, partially offset by price mix in our food merchandising and beverage merchandising segments due to material cost pass-throughs and other price actions. Adjusted EBITDA was $167 million for the quarter, a $20 million decline from third quarter 2022 levels. Our sequential volume declined as expected due to a combination of shifting consumer trends as a result of the ongoing pressure of elevated inflation, seasonal trends and the sale of our Beverage Merchandising Asia business in the third quarter. Fourth quarter was also impacted by Winter Storm Elliott. As we reached target inventory levels earlier in the year, we were able to manage production during the quarter to ensure working capital efficiency, as illustrated by the slight decrease in inventory at year-end. Fourth quarter Free Cash Flow of $84 million benefited from working capital inflows, largely driven by a $79 million decline in accounts receivable and a $58 million decline in inventory as volume softened versus the third quarter, which are partially offset by decline in accounts payable. While we are focused on methods to gain additional working capital efficiency in the near future, I expect a near-term drag on operating cash flow in early 2023 related to cash payments to be made under our 2022 annual incentive plan, in addition to certain one-time cash outlays related to the beverage merchandising restructuring. Continuing on slide 15 and our results by segment. In our foodservice segment year-over-year, net revenues were down 7%. Price mix was up 6%, primarily due to the contractual passthrough of higher material costs and pricing actions taken to offset higher input costs. Volume was down 12%, primarily due to a continued focus on value over volume and the market softening amid inflationary pressures. Adjusted EBITDA was down 13%. This decrease was primarily due to lower sales volume and higher manufacturing and employee-related costs, partially offset by favorable pricing, net of material costs passed through. Quarter-over-quarter, net revenues were down $83 million or 11% due to lower sales volume and unfavorable price mix of 2% amid shifting consumer and seasonal trends and ongoing inflationary pressures driving an overall slowing of consumer spend, particularly in the QSR channel. The slowing of consumer spend is also driving our customers to partially destock. Adjusted EBITDA was down $23 million or 20% due primarily to lower sales volume. On slide 16, our food merchandising segment. Year-over-year, net revenues were up 9%. Price mix was up 16%, primarily due to pricing actions taken to offset higher input costs and the contractual pass-throughs of higher material costs. Volume was down 8%, primarily due to market softening amid inflationary pressures. Adjusted EBITDA was up 20%. This increase was primarily due to favorable pricing, net of material costs passed through, partially offset by higher manufacturing costs, lower sales volume and higher employee-related costs. Quarter-over-quarter, net revenues were down slightly by $8 million or 2% as a decline in sales volume of 6% from seasonal trends, combined with the slowing of consumer spend was mostly offset by a 4% favorable price mix from higher material costs passed through to customers and other pricing actions. Adjusted EBITDA was up $13 million or 19% due primarily to favorable pricing, partially offset by lower sales volume. On slide 17, our beverage merchandising segment. Year-over-year, net revenues were down 7%. Price mix was up 13%, primarily due to pricing actions taken to offset higher input costs and the contractual pass-throughs of higher material costs. Volume was down 10%, primarily due to the market softening amid inflationary pressures and the strategic exit from the coated groundwood business. The decline of 10% was due to the impact from the disposition of Beverage Merchandising Asia. Adjusted EBITDA was down 53%. This decrease was primarily due to higher manufacturing and employee-related costs and the impact from the disposition of Beverage Merchandising Asia, partially offset by favorable pricing net of material costs passed through. Higher manufacturing costs included the impact of Winter Storm Elliott and a scheduled coal mill outage. Quarter-over-quarter, net revenues were down $37 million or 9%, primarily due to 8% lower sales volume on softening demand, primarily from uncoated freesheet and liquid packaging board, and a 3% lower volume due to the sale of Asia operations in Q3, partially offset by 2% favorable price mix due to contractual cost pass-throughs. Adjusted EBITDA was down $5 million or 19%, due largely to higher manufacturing costs, primarily due to Winter Storm Elliott and a scheduled coal mill outage and lower sales volume, partially offset by favorable pricing and the collection of $5 million in insurance proceeds related to Winter Storm Uri. Next on slide 18, we highlight our balance sheet and cash flow items. We ended the year with $531 million in cash, net debt of $3.6 billion, and a net leverage ratio of 4.6 times, down from 7.6 times at the end of 2021. We took additional actions during the fourth quarter to further de-lever our balance sheet and reduce our interest rate risk. We repurchased $92 million of aggregate principal of our 7.95% and eight and three-eighths debentures due in 2025 and 2027 at 97% of par. During January and February of 2023, we have repurchased or repaid in aggregate $110 million of debt maturing in 2026. These transactions combined reduce our annual cash interest expense by $16 million at current LIBOR rates. With LIBOR rising from a recent low of 0.1 to its current rate of 4.71%, interest on our debt has become a headwind and a source of volatility to our cash outlays. Therefore, we took the opportunity in Q4 to execute $1 billion in notional value of interest rate swaps against our U.S. term loans to fix the LIBOR component at a weighted average rate of 4.12%. When factoring in the interest rate swaps, we have reduced our floating rate exposure from 53% of our total debt to 29% over the past year. Presently, every 100 basis points change in LIBOR has an $11 million annualized impact to interest expense, down from $22 million prior to the aforementioned transactions. We will continue to evaluate our alternatives to further improve our financial position and mitigate volatility. De-leveraging remains a focus area for capital allocation. Lastly, our legacy Pactiv Evergreen pension plan is fully funded, and our plan assets are largely allocated into fixed income to de-risk volatility, with no material funding obligations for the foreseeable future. Full year Free Cash Flow was strong at $156 million, despite a significant strategic investment to rebuild our inventory to target inventory levels that we discussed on prior calls. I'll now pass it back to Mike for further comments. Thank you, John. Please turn to slide 20. Moving on to some updates on our environmental, social, and governance efforts. Supporting our purpose of packaging a better future, our ESG efforts are designed to build a more resilient and sustainable Pactiv Evergreen for our employees, our customers, our shareholders, and the communities in which we live and work. The first item I would like to highlight is the collaboration with AmSty that we announced in February. AmSty is a leading manufacturer of polystyrene in North America and has pioneered the circular recycling of polystyrene. Through this partnership, we will offer recycled polystyrene products, helping our customers and our company progress toward our respective sustainability goals. This important partnership expands our portfolio of circular packaging and helps fulfill our company's purpose of packaging a better future by providing innovative, sustainable solutions. We are proud to see that our efforts to build a more sustainable company were recognized by prominent ESG rating agencies, which improved our ESG ratings in 2022. To learn more about our ESG activities, we invite you to view our latest disclosures at investors.pactivevergreen.com in the ESG section. Please turn to slide 21. I'm pleased with the company's performance during 2022 and excited about our opportunities for further growth. We remain cautious on the macroeconomic backdrop as inflation and interest rates remain elevated amidst a recent pullback in consumer spending and the potential for a slowdown in the broader economy. However, we expect our business to remain resilient with relative stability across our two food business units while we restructure our beverage business. We expect to deliver first quarter Adjusted EBITDA of approximately $160 million. This reflects the seasonality we expect to see in the first quarter and the impact of moderated consumer demand, continuing the softer volumes we saw in the fourth quarter, and also includes a trailing impact of Winter Storm Elliott on our beverage merchandising mill operations. With the announced changes in our portfolio, we know that our earnings journey over the next year or so will be a bit bumpy. In order to position for long-term growth, the company is getting a little bit smaller in the short term. Overall, we believe that with the proper focus on margin and service levels, solid execution of our restructuring plans, our recent improvements in productivity and throughput, and the input cost stabilizing, we can deliver full year Adjusted EBITDA for 2023 in the range of $755 million-$780 million. Looking at our plan, we expect to see modest improvement in the second half of the year compared to the first half. Given the significance of the announced restructuring plan, our goal is to provide further clarity and guidance as the year progresses. This guidance excludes the impact of the previously mentioned one-time cash and non-cash charges related to the beverage merchandising restructuring. However, our guidance does reflect the phased benefit from the restructuring. To further bridge our 2023 Adjusted EBITDA guidance relative to 2022, given the restructuring, in 2022, we generated $785 million of Adjusted EBITDA. The Adjusted EBITDA contributions in 2022 from divested businesses and our Canton mill operations in a partial year like-for-like basis was approximately $30 million. This results in a pro forma base of $755 million of 2022 Adjusted EBITDA. As we bridge from 2022 to our 2023 Adjusted EBITDA guidance, we expect our food businesses to remain relatively stable year-over-year while beginning to pick up some benefit from the beverage merchandising restructuring beginning in the second quarter of 2023. Other 2023 guidance points. We expect capital spending to be approximately $280 million, which includes spending on the new beverage merchandising converting equipment I previously mentioned and capital to maintain the mills during the transitionary year. We expect to book between $440 million and $515 million of restructuring charges, including $130 million to $185 million of cash charges. We fully expect that the hard work we are doing on restructuring will better position the business fundamentals this year and will set us up for a better outlook in 2024. We will continue to focus on executing our strategy and servicing our customers while generating attractive, sustained returns for our stakeholders. On slide 22, I'd like to reiterate what makes Pactiv Evergreen a strong, differentiated, growing, and socially responsible business. We're an industry leader in food service, food and beverage merchandising, and our markets are largely recession resilient. As you saw from our recent announcement, we are taking decisive actions to shape our portfolio and generate profitable growth and returns. We offer a broad array of products and substrates, and we have long-standing strategic partnerships with our customer base, many of which are blue-chip companies. We are constantly working to innovate and develop the highest quality, sustainable products. As mentioned earlier, we set a goal of having 100% of our net revenues in 2030 come from products made from recycled, recyclable, or renewable materials. All of this yields strong Adjusted EBITDA and Free Cash Flow generation, which we carefully manage to drive deleveraging and further growth through our disciplined capital allocation process. In closing, I would like to thank all of the Pactiv Evergreen workforce for their continued commitment and hard work. I would also like to thank our valued customer and vendor partners for their continued commitments to our mutual success. With that, let us open it up for questions. Operator? We will now begin the question and answer session. To ask a question, you may press star then one on your touch tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question today comes from Kieran De Brun with Mizuho. Please go ahead. Hey, good morning. We're just wondering if you can talk a little bit about what you're seeing relative to volumes. I think you mentioned there's still a little bit of destocking, but maybe that seems to be somewhat done in the first quarter. Are there any key pockets of strength? I also think you mentioned kind of reduced foot traffic in QSR, but are there other pockets where maybe you're seeing a little bit more resilience? I think you said no big protein or retail. Any color you can give us in terms of how to think about volumes during the first quarter and then maybe how you're thinking about that progressing throughout the year would be helpful. Thank you. Absolutely. We did note that we are seeing a moderation of volumes in several of our channels, primarily in our foodservice business. The destocking largely that we've seen is really a result of a couple things. A, our ability to service our customers. As we've improved our service, especially in the distribution space, our customers are taking that opportunity to reduce their inventories. We don't think that that's something that's sustained or gonna be prolonged. We do think that the chop on destocking is coming out or has largely come out. We started seeing that in Q4, you know, with what we're seeing here in Q1, we, you know, that's where we are. As it relates to any foot traffic related, so if you think about our products in terms of how consumers get their calories, whether it's within their home or outside the home, you know, we are seeing that there is a shift in consumer sentiment between the dine out versus the dine-in experience. You know, when things are good and the economy is booming, you know, mobility's up, people are out and about, and they're dining out. The first step we saw largely in Q4 was people started buying down, doing more quick serve restaurant buying. Mm-hmm. Now what we're seeing is a shift from that quick serve restaurant buy-down to more of a in-store or getting their calories at home. The trends that we know that are kind of a little stronger would be in kind of the egg protein, egg space for us. Our food and beverage merchandising spaces. And that's really driven by people, you know, going to the store, buying food, and taking it home, which is a trend we're seeing through Q1. As far as the full year, you know, we're not pessimistic, we're not optimistic, but what I'd tell you is we don't expect to see further deterioration as it relates to, you know, some big crash in mobility from where it's at in Q1. In fact, we hope that as inventory stabilize at our distribution customers that we start to see that consumer confidence both starting in Q2 and strengthening through the back half of the year. That's kind of our view of 2023 where we stand today. Strength on in-home, moderation and kind of outside the home calorie intake. Great. That's fantastic color. Then just a maybe a quick follow-up. You know, when you spoke a little bit about the input costs. If we think about just general input costs coming down, you know, how do we think about pricing in the context of like a falling raw environment, like just stickiness of the pricing and some of the pricing that you've pushed through maybe outside of the pass-through provisions? Thank you. You know, there will be some benefits from some moderation in those input costs. I would say that a lot of that does get eaten up by the contractual pass-throughs. I wouldn't necessarily count on a lot of benefits from that particularly. You know, there is still a focus on pricing actions and quality of earnings as we look out to 2023. There could be some potential pickups there. Great. Thank you. The next question comes from Arun Viswanathan with RBC Capital Markets. Please go ahead. Great. Thanks for taking my question. Congrats on the year and the restructuring announcement. I guess my first question is just on the guidance. You know, it looks like you're down maybe at the midpoint, you know, $17 million or so. Q1 itself is down about $7 million, sequentially. I mean, it sounds like, you know, maybe you could say by Q4, you'd see a net neutral result year-on-year or maybe even some growth. Is that the right way to think about it? If so, is that mainly driven by the actions that you're taking or maybe some market recovery as well? Maybe you can just flesh out some of those assumptions for us. Thanks. Yeah. Depending on the baseline used, Arun, you're absolutely right. What I would tell you is, you know, the way we're kind of looking at it, Q1 we would be up year-over-year had we not had, you know, a near $22 million lagging impact from Winter Storm Elliott. Late, late in the year, you may recall we had a deep freeze in the South, similar to Uri, to a lesser extent. You know, we were more prepared, and we came out of that with a lagging, you know, in our specific to our Pine Bluff, Arkansas paper mill, you know, is several days of lost production in January. That's one big, you know, qualifier in terms of our Q1. For the full year, I would tell you that, you know, when you look at our exited operations and divestitures, you know, the baseline is $755 versus $785. We absolutely, you know, plan to grow through the Q2 and Q4, in terms of our ability to take care after productivity, but also see a return to some volume strength, or the moderation at least kind of taper off that we're seeing in Q1. Yeah, I would say net neutral to up the back half, certainly is the right way to think about it. From a year-over-year perspective, I think the, you know, the understanding of those kind of two big basis start points for us, you know, we're managing through the cost of a pretty good start, a whack at the start here with that storm and then getting better as the year progresses. Okay. Thanks. Just on the restructuring announcement. You know, this has been an ongoing journey for you guys. Just wondering when you look at the current plan or the new plan, you know, should we expect any dispositions or, I know you're folding in beverage merchandising into food merchandising, will you start looking at that as, you know, an integrated portfolio that is gonna go forward as is, or, are there other pieces that, you know, potentially you'd look to exit? I know you've said that there's no, you know, timeline per se, but what are you looking to kind of, you know, accomplish as far as Is this a, you know, a real core business for you guys as far as beverage merchandising? I know you have four pillars there. Are you looking to, you know, maybe complete some of those pillars as you get through this restructuring plan? Is it mainly just hitting those savings numbers? Yeah, good question. You know, over the last 2 years, you know, I've been pretty transparent that it's gonna be an iterative process. You know, as we've tried to be as transparent as possible, and we have things to announce, we've done that. I would say all of our steps thus far have been, you know, sequential and enable the next. If you look at the progress we've made with some of the divestitures, some of the exits, you know, those do set up our ability, whether from a cash flow generation or, you know, just a resource management perspective, our ability to take the next big step. This recent announcement is a really big step for us in improving our quality of earnings. When you look at, you know, our ability to redeploy capital, which is one of the constraints the business, you know, being transparent, one of the constraints that is no secret that we've had, that enables us to think more broad about how we execute on those pillars you mentioned. No, I, you know, whether we, you know, exit or further divest any other assets, I would tell you our strategy remains the same. We're North American-centric. Our goal is to continue to leverage our ability to manufacture profitably here. Our converting operations are very core to our business. As it relates to anything outside of that, in the segment, you know, we do plan to leverage the restructuring to where we operate as one merchandising segment, as noted in my prepared remarks. We, you know, we do see a lot of synergies in terms of, you know, that core team, the capabilities, and those are something we expect to unlock in the next kind of 18 months. You should think of it as a food and beverage merchandising business unit. We do intend starting in April to report that way. And that's kinda how we're looking at it. Really going from three businesses, three segments to two segments as a result of this restructure. Thanks. The next question comes from George Staphos with Bank of America. Please go ahead. Yeah. Hi, good morning. This is actually Cashen Keeler on behalf of George. George had a conflicting call this morning. I guess, first, can you maybe just expand on what you're expecting in terms of interest expense for this year and then, you know, maybe other items like taxes and working capital to help us get to net income and Free Cash Flow for 2023? Sure. Happy to. For 2023, just to give you a bit of a sense of some components that would be in Free Cash Flow. You have our EBITDA guidance for $755 million-$785 million. CapEx, the guidance is $280 million for the year. Cash interest, given at current LIBOR rates, we do have some exposure to floating rates, but just given current LIBOR rates is roughly $265 million. Cash taxes will be in line with last year, so we call it around $70 million. The other cash item guide is $130 million-$185 million for the restructuring. We mentioned that's 23 and 24, but I would tell you that the majority of that is gonna be sitting in 23. We should pick up a little bit of working capital benefit from the closure of Canton as we release some of that working capital. That could be in the range of $30 million-$40 million. As you look at our inventory levels, last year we had a more strategic inventory build. This year we are expecting that we are at target levels. We, you know, this year should be around, there should be a bit of a benefit broadly across working capital otherwise. Obviously then we've got the dividend, which will be, we don't have dividend approved for the remainder of the year from our board, but if we were to keep the same dividend, we'll be around $70 million. Great. That's helpful color. Then can you just discuss maybe leverage, kind of where you expect to be, you know, at the end of the year, especially as you're balancing kind of the restructuring with beverage merchandising? Thanks. Sure. Now with all these things, there are a lot of moving pieces, but I would tell you our commitment to getting to below 4 times remains. I think over the course of the years with all the puts and takes, we do expect that we'll be in a position to improve on our net leverage ratio. We close the year at 4.6, and I would expect some modest improvement on that by the end of the year. Great. Thanks. The next question comes from Ghansham Panjabi with Baird. Please go ahead. Yeah. Hey, guys. Good morning. just to confirm and to make sure I have this right. Once your restructuring/divestment plan's complete, you'll be a pure converting operation on the paper side, but still have dual substrate products across the portfolio. you know, first off, is that right? also, will this ultimately require you to sort of modernize the downstream converting assets? You know, just trying to get a sense as to how well-capitalized, the converting assets are at this point. Yeah, if I Ghansham, if I understand your first question is, you know, do we intend to have dual substrate going forward? We don't intend to have any change in our portfolio, from a substrate perspective at all. You know, our fiber-based portfolio will remain intact with all the announcements. I believe that's what you were looking for. If. Then your second question was? Continued debt. Yeah. Yeah, we absolutely are leaning into our converting operations, not just on the fiber side, but in the carton converting as well as the balance of the business. You know, we also in our release as well as prepared remarks, we mentioned that we are investing in modernizing our converting asset base as we consolidate as well. Okay. Gotcha. The 10% volume decline from four Q, you know, it looks like 4% was just the divestment. How does the remaining 6% parse out between end market weakness and just your decisions to manage price over volume? Separately, you know, your comments on input cost, you know, resin prices are starting to move at least so far this year. How do you sort of expect that to evolve as the year unfolds? Yeah. In terms of the breakdown of the percentage, you know, we really don't get into into the different mixes there. In terms of the resin price movement, you know, over the course of the year, we are, as I mentioned, we're expecting to have general moderation to some benefit from a resin price movement overall, as the year progresses. Although some of that benefit or a lot of that benefit will be passed through through our contractual pass-throughs. As we look at our broader pricing strategy and our quality of earnings, you know, we will continue to look at places where we can add the most value to the portfolio in terms of our product mix. Yeah, there was no. In terms of the volume question you asked, there was nothing that happened to our beverage volumes that was, you know, unrelated to the, you know, the discontinuation as well as the retail, you know, weakness that we saw. If you think about the areas we serve, it's fresh dairy, non-dairy, and juice spaces. Higher prices on the shelf really, I think, were what drove the decline that you saw. It's nothing more than that. Got it. Thank you. The next question comes from Anthony Pettinari with Citigroup. Please go ahead. Hi, this is actually Bryan Burgmeier sitting in for Anthony. Thanks for taking the question. You know, considering that customers are still destocking as we get into 2023, you know, is it fair to think about the magnitude of the year-over-year volume decline from 4Q maybe being similar in the first half of the year? Is there any reason why that volume trajectory would change meaningfully? Well, for us, we believe that the destocking largely started in Q4, you know, at least for our customer base. As we look at the drivers behind some of that and what's enabled it, you know, we believe that, you know, as service levels have returned from not just us, but the broader base, you know, we've seen our distribution, specifically our distribution-based customers really kind of right-size their inventories as they've gotten safety. We don't expect that to be a reoccurring theme, and we certainly see that, you know, that was met with a softening consumer through the holidays. We don't believe that that's a sustained Q4. That's not a normal Q4. Outside of normal seasonality, we're not anticipating, you know, kind of a year-over-year decline because of those things reoccurring. If that answers your question. To say it differently, our Q4 for 2023 should be a better Q4 than in 2022. Okay. Yeah, that makes sense. Thanks for the detail. Then, you know, last question for me, just a couple of the year-over-year EBITDA bridge items. You know, are there any remaining Fabri-Kal synergies that you're still targeting? How much of a benefit in op cost reduction are you expecting from the restructuring program, you know, to kind of land in 2023? I know you said $30 million overall, but just thinking about the impact to this year. Sure. I'll take that. From the Fabri-Kal piece, you know, we I think we mentioned last call, we've effectively integrated that business, and we're at full run rate synergies as of Q4 of last year. Going into Q1 and going into this year, we are well, there's no further uplift from a Fabri-Kal standpoint. At this point, we have been fully integrated. As it relates to the second part of your question, in terms of the synergy uplift, you know, we are gonna phase those in over the course of the year. We mentioned that the Canton closure will be in Q2. We're consolidating the business units starting in Q2 as well. We would expect some of those synergies to start rolling in the back part of the year. Just to give you some order of magnitude, given that we're gonna hit a run rate around 30, going into 2024, you know, you could probably model approximately half of that value is included in this year's guidance. Got it. Thanks a lot. I'll turn it over. The next question comes from Adam Samuelson with Goldman Sachs. Please go ahead. Yes, thank you. Good morning. I guess the first question is in food service, as I look at the volumes organically in 2022, the volumes are down 8%. They were up 8% organically in 2021 against kind of the depressed COVID levels. I appreciate that there's some noise with kind of Fabri-Kal kind of layering in here, but it just would seem kind of striking kind of that on an organic basis, the volumes are back in 2020 kind of performance. Would love to just get your views on kind of market share. I know you talked about value over volume, maybe kind of conscious mix shifts that you had in terms of de-emphasizing certain product lines. Can you just help us think about kind of the areas of the portfolio where you think you might not have been kind of growing the volumes as fast as the aggregate market has? If you think about our food service volume, and the complexion of that business, you know, we're chains or quick serve, and we're also distribution. You know, historically, you know, and if you look at what's happened, you said it properly, you know, we had a snapback effect with the depressed levels of COVID, and then you saw that 8% rebound. On the other side of that, you know, we're greatly influenced, and if you watch our food merchandising business, typically, when a consumer makes a large shift in how they get their calories, there's a buy-down between the distribution and the chain restaurant channels for us, so within food service. That buy-down, you wouldn't see a large decrease. What you see on the other side is when the consumer takes the next step and starts to fill their pantry again, get their calories inside their home, you start to see a lift in our food merchandising business. That's kind of the step we're at within the consumer buying decision cycle, is that they're, you know, a lot of our consumers our customers are facing the same thing, you know, higher menu prices, lower volumes. The tickets are higher. It's more expensive to eat out of the house. While store shelf pricing's up, it's still the softest landing for the consumer. That's what you're seeing in food service right now is that choppy consumer buy signal. It's really driven by, you know, decreased mobility, in some cases, but also the higher menu costs and prices, that are out there versus the retail, the shelf prices and the value they get. Okay. It's helpful. Just to follow up on beverage merchandising. With the closure of Canton, I mean, the slide talks about kind of not being an integrated mill producer, having integrated mill business anymore. You talk about exploring strategic alternatives for Pine Bluff, but that's obviously still your principal supply of liquid packaging board. Is the idea there that if as you kind of look at potential alternatives like that, the idea would be that mill is still operating and if there's a sale or a divestment of some sort, that that would come with some sort of supply agreement for your converting operations? Yeah. You know, as we highlight in the prepared remarks, you know, Pine Bluff and Waynesville both are critical to our ability to operate successfully. They'll remain critical in whatever future, you know, strategic alternative we select. You know, sale is certainly one avenue we could go down, but, you know, we continue to own the mill. We're committed to operating the mill and give it all the food, water, shelter it needs to support our core converting operations. I think you said it right. You know, anything we do there, we're certainly gonna protect our core converting business on the carton side there. And certainly Pine Bluff and Waynesville to a degree are critical in those considerations. Okay. All right. That's helpful. I'll pass it on. Thank you. The next question comes from Ed Rucker with Barclays. Please go ahead. Hey, thanks for taking my question. My first one is just back to the balance sheet. Specifically on the ratings, it seems like given what you've done with the balance sheet, reducing actual gross debt, getting leverage down, and what seems like committed to getting below that 4 times, I feel like the ratings may be a bit behind. Just wanna get your thoughts and if you've had any conversations with the rating agencies, and if there's any, you know, goals to get to a higher rating. Sure. You know, we don't control our ratings, you know, first off, as you know. We do have an active dialogue with both S&P and Moody's and talk to them about our balance sheet, our plans for capital allocation, cash flow, et cetera. I would say, just broadly speaking, again, the ratings is entirely up to them. They tend to look at gross debt more so than net debt. As we talked about the 4x target, you know, that is a net debt number. From that perspective, you know, I think those agencies would look to us to use, you know, we ended the quarter with $500+ million of cash. I think, if you look at some of the actions that they're looking for, we did spend $200 million over the, you know, a bit over the last three months, so Q4 and, into this year, $200 million of cash. I think they look for the company to spend more of that cash on on delevering as more signals. I think we, you know, and if you look at the reports, I think the commentary has been more positive as it relates to our ratings and I think we're on the right path as it relates to further upgrades there. Again, I can't speak to the agencies and what their actual ratings are. We'll just keep focusing on things we can control, which is continuing to delever. Got it. Kinda in relation to that, if you do see some divestitures with Pine Bluff and Waynesville, or really any, you know, Free Cash Flow generated or the cash you have on the balance sheet right now that you've locked in, a more certain, interest rate, at least on the term loan, and I know you've paid off debt in January or February, would you target or continue to target, I guess, some of those higher coupon unsecureds, with, gross debt reduction? Yeah. You know, I, I can't signal any future actions we may or may not take, obviously. You know, all I can leave you with is that, you know, deleveraging is still a focus as I mentioned. You know, and we do have some excess cash, and I think it's a balance of deleveraging and growth. We mentioned, you know, we talked about investments in some of our converting assets, capital that we're staying this year that is gonna position us well for the future. You know, we are focused on returns as we invest in business where sensible. It'll continue to be a balance as we look at where that capital goes. Great. That's helpful. Thanks. The next question comes from Kyle White with Deutsche Bank. Please go ahead. Hey, good morning. Thanks for taking the question. A lot of moving parts on volumes with consumer behavior shifting, inflation, as well as destocking. Are you able to just give us a bit more guardrails on volumes and what your expectations are for the company for 2023 on a year-over-year basis that is assumed in the outlook? No, I mean, you know, just broadly speaking, you know, if you look at, we're not included in the guidance isn't a material shift in volumes, particularly around the food businesses. Beverage as, you know, there's a lot of moving pieces there, so the beverages take that to the side. On the food business, volume should be relatively in line with volumes from last year. Last year being 22. Yeah, makes sense. That's helpful. On the CapEx this year, I think you said it was $280 that you're expecting. Is that the right long-term target that we should expect for the business just given the restructuring program, or is there another step down later post this year? Yeah, we're not providing any future guidance beyond that. You know, as we talked about, you know, the 280 is inclusive of the $60 million that we talked about in terms of modernizing some of the converting assets on the beverage merchandising side. Longer term, by reducing our exposure to mill operations with the closing of Canton, you know, we are going to be more capital light, which is one of the goals. But, you know, there are opportunities, as we talked about for deleveraging and also growth capital. On a balanced basis, we'll continue to look at opportunities where we can continue to invest in a sensible basis. But no further guidance from that perspective. I will say that our maintenance capital is going to be reducing with less exposure to the mill operation. Sounds good. I'll turn it over. As a reminder, if you would like to ask a question, please press star then one to enter the question queue. The next question comes from Curt Woodworth with Credit Suisse. Please go ahead. Yeah, good morning. Thanks for fitting me in. I guess if you're kind of looking at food volumes roughly flat this year and given the pro forma EBITDA, is it fair to say that from a price cost perspective, you're assuming neutrality or slight benefit? You know, when we look at price costs in last year, just looking at the EBITDA bridges, it was about a positive $280 million. I know part of that was mix management. Yeah, any color you can give on that would be helpful. Yeah, our pricing strategy is to stay on the right side of the price cost curve. You know, we positioned ourselves kinda coming out of the pandemic with, you know, contracts to support that with our customers. Outside of our index-based movements, you know, that's, you know, falling, commodity costs and things like that are all considered. Yeah, I think the way you said it there, Curt, is the right way to think about it. You know, we don't plan to get on the wrong side of the price cost this year. Then in terms of, you know, kind of the SKU optimization that you talked about or the value over volume, are you kinda done on that front? Do you, do you have the portfolio or the SKU composition about where you want it, and therefore, volumetrically going forward, you should more reflect what the, what the market's doing? Then I know I think you touched on this a little bit earlier, but from a market share perspective or a new product introduction perspective, you know, are there any, you know, unique levers you have this year, that you could discuss? Thanks, and good luck. Yeah, no. I would say, you know, we are largely through that process. And certainly as we look at our 2023 opportunities, you know, where we can capitalize on our ability to service and take advantage of, you know, areas to push broader product shifts, products in the areas where the consumer shifting, that's where we're largely looking to capitalize and grow. So, you know, whether that's, you know, more molded fiber on the egg side or shifting substrates on the protein side, anywhere we can lean in, you know, and use our ability to be flexible from a substrate perspective is where we're looking to value and really, you know, fight off the volume challenges that we're seeing. Okay. Thank you. This concludes our question and answer session. I would like to turn the conference back over to Mike King for any closing remarks. Thank you. Thank you all for joining today. We appreciate your interest and your questions. We're excited about the momentum we're building here at Pactiv Evergreen as we continue to execute on our long-term strategy, and we look forward to updating you again in the next quarter. Thank you. The conference is now concluded. Thank You for attending today's presentation. You may now disconnect.