Good day, and welcome to the Pactiv Evergreen First Quarter 2023 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 first quarter 2023 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. Therefore, you should not put undue reliance on those statements. These statements are also subject to numerous risks and uncertainties that could 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, and our quarterly report on Form 10-Q for the quarter ended March 31st, 2023, 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. 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 reconciliations to the most directly comparable GAAP measures are 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, and good morning, everyone. Yesterday, after the market closed, Pactiv Evergreen released strong first quarter results, including adjusted EBITDA of $189 million, exceeding our guidance and establishing solid momentum heading into the second quarter. Our performance in the quarter is a testament to the resilience of our platform, the diversity of our product portfolio, and the tremendous efforts of our dedicated employees. As we will continue to outline during sections of this presentation this morning, this is an uncertain macro environment for many sectors of the economy. However, our results underscore the inherent strength of the Pactiv Evergreen business model and reinforce our confidence in executing the next phase of our strategic journey. Turning to the agenda on slide 4. I will start today's call with the highlights from the quarter along with an update on our previously announced Beverage Merchandising restructuring plan. Jon will discuss Q1 results in more detail along with an update on our 2023 outlook. Finally, I will close with an update on our strategic journey. We will move to a question and answer session. Moving to our first quarter highlights on slide number 6. We reported net revenues of $1.4 billion, a solid performance that reflects the many strengths of our platform and our unique ability to service our customers. While the first quarter net revenues represented a 4% decrease compared to the first quarter of 2022, excluding the impacts of divestitures, primarily Beverage Merchandising Asia in 2022, we were essentially flat to last year. Sales volumes declined due to a focus on value over volume in the food service and food merchandising segments, the market softening amid inflationary pressures in the beverage merchandising and food merchandising segments. Pricing levels were slightly higher than last year as a result of the actions we took to manage price over the course of 2022. Our input costs have largely stabilized as compared to recent periods, our pricing strategy reflects our contractual pass-through mechanisms and our competitive value proposition. First quarter adjusted EBITDA was $189 million, which is ahead of our guidance. The outperformance compared to our guidance was primarily driven by favorable mix and lower SG&A. We also benefited from an extension of key business that was previously expected to occur in the second quarter. During the quarter, we generated $25 million of free cash flow and reduced our net leverage ratio to 4.5 times. As we will cover in more detail later in the presentation, we remain committed to deleveraging our balance sheet, and we are focused on maximizing long-term free cash flow generation. We do not expect our beverage merchandising restructuring plan to prevent us from driving solid free cash flow in 2023, and we expect our net leverage ratio to improve by year-end. Further, we expect the beverage merchandising restructuring plan will put us in an even better position to generate free cash flow and accelerate our deleveraging path in 2024 and beyond. Turning to slide 7. 2023 is an important year for Pactiv Evergreen as we execute on a number of strategic actions designed to help us focus on our core converting operations for food and beverage packaging to position us for profitable growth in the future. First, we have already made significant progress on our Beverage Merchandising restructuring plan, and we are confident that we will cease operations at the Canton Mill and Olmsted Falls facilities by June. We have also taken steps to support a smooth transition of our paperboard supply to avoid disruption to our customers and our remaining operations. As we outlined in March, the Beverage Merchandising and restructuring plan is expected to result in non-cash and cash charges. We have since refined those estimates as follows: Non-cash charges are expected to be $320 million-$330 million, which reflects updated non-cash costs associated with accelerated depreciation of property, plant, and equipment, and other non-cash charges. Cash charges are expected to be $130 million-$160 million. We have reduced the high end of the range to reflect lower than anticipated severance and other expenses at the impact of facilities. Finally, as we outlined previously, we have implemented a new management and operating structure for our food merchandising and beverage merchandising business as of April first. This is a major step toward achieving the run rate cost benefit that we highlighted in March. By combining the converting operations of our food and beverage merchandising businesses and exiting the Canton Mill, we intend to leverage our collective efforts on Pactiv Evergreen's core food and beverage merchandising end markets and allow for a more profitable liquid packaging operation in the future. Not only does this align with our strategy to focus on our consistently growing higher margin businesses, it also yields meaningful savings in annual operating costs and CapEx. We will begin reporting the financial results for the new food and beverage merchandising segment with our second quarter earnings release in 10-Q. Lastly, we have progressed the review of strategic alternatives for the Pine Bluff Mill and Waynesville facility. We do not have a definitive timetable for this process. We intend to provide additional updates on the status of the review throughout the year. Turning to slide eight. As our results indicate, we exited the first quarter on a solid trajectory and are taking the steps to improve our future EBITDA and free cash flow profile. As a result of the strong start to the year, we are now expecting our 2023 adjusted EBITDA to be in the $775 million-$800 million range. Of course, none of these accomplishments would be possible without the tremendous efforts of the great team at Pactiv Evergreen. I wanna take this opportunity to thank everyone for their outstanding performance. I will now turn it over to Jon to discuss our first quarter results in more detail, including our segment performance, before I provide an update on our strategic direction and closing remarks. Jon? Thanks, Mike. Turning to slide 9. As noted in our fourth quarter 2022 earnings call, our operating backdrop continues to be influenced by inflationary pressures that not only affect our cost structure, but consumer behavior as well. While recently, we have seen a slight moderation in broader inflation measures, they remain elevated relative to historical levels, and we expect interest rates, input costs, and consumer spending to remain under pressure through 2023. Starting with volumes and demand, the destocking that impacted our fourth quarter volumes was largely completed during the first quarter, we expect that particular headwind to subside for the remainder of 2023. The primary impact on consumer demand continues to be inflation. In food service, foot traffic in the quick service restaurant and full service restaurant market segments has trended down compared to 2022, and consumers are also shifting their spend from higher end full service restaurants to mid to lower tier full service restaurants and QSRs. In food merchandising, consumers have been balancing their food spending to deprioritize certain items such as bakery products. For beverage merchandising, board sales were impacted by a scheduled cold mill outage, while uncoated free sheet continues to face secular headwinds in consumption. With respect to pricing and mix, overall pricing levels are higher compared to the first quarter of last year as a result of our efforts to balance price versus volume throughout the course of 2022. Relative to fourth quarter of 2022, material costs have improved slightly with more recent moderation in the current quarter. This dynamic has also benefited other aspects of our cost structure as transportation costs, natural gas, energy, and chemicals are all lower compared to last year. Lastly, we continue to monitor the interest rate outlook and capital markets volatility in the wake of the recent shocks to the banking sector to assess what, if any, impact that may have on the broader economy and the health of the consumer. Continuing on slide 10, first quarter year-over-year results. Net revenues were down 4%. Volume was down 6%, largely due to a focus on value over volume in the foodservice and food merchandising segments, and the market softening amid inflationary pressures in the beverage merchandising and food merchandising segments. Price mix was up 6% due to the contractual pass-through of higher material costs and pricing actions in all segments. Revenue for the first quarter of 2022 also included the results of divested businesses, notably Beverage Merchandising Asia. Adjusting for these impacts, revenue is essentially flat. Adjusted EBITDA also benefited from year-over-year price favorability and lower transportation costs. The decrease in cash flow was impacted by lower operating cash flow due to higher incentive compensation payments and interest expense, partially offset by our strategic inventory investment in the prior year period. Moving to slide 11 for a sequential quarter comparison, first quarter net revenues were $1.4 billion, down 3% versus the prior quarter. Volumes were down 2% versus the fourth quarter, while price and mix were down 1%, partially due to declining resin prices. Adjusted EBITDA was $189 million for the quarter, a $22 million increase from fourth quarter 2022 levels. Despite the slight decline in revenue, we benefited from lower material costs and lower employee-related costs, partially offset by higher manufacturing costs compared to the fourth quarter. First quarter free cash flow of $25 million was lower than Q4 due to lower operating cash flow caused by the timing of our annual incentive compensation payments, which occur in the first quarter. Continuing on slide 12, now results by segment. In our food service segment, year-over-year, net revenues were down 6%. Volume was down 5%, primarily due to a continued focus on value over volume. Price mix was down 1%. Adjusted EBITDA was down 3%. The decrease in adjusted EBITDA was due to higher manufacturing costs and lower sales volume, mostly offset by lower material costs, net of costs passed through, and lower transportation costs. Quarter-over-quarter, net revenues were down $19 million, or 3%, primarily due to lower pricing, driven by the contractual pass-through of lower material costs. adjusted EBITDA was up $23 million or 26% due to lower material costs, net of costs passed through, partially offset by higher manufacturing costs. On slide 13, our food merchandising segment. Year-over-year, net revenues were up 9%. Price mix was up 15%, primarily due to pricing actions taken to offset higher input costs, including the pricing benefit from the extension of key business mentioned earlier, the contractual pass-through of higher material costs. Volume was down 7%, primarily due to a focus on value over volume and the market softening amid inflationary pressures. adjusted EBITDA was up 55%. The increase was due to a price mix benefit, partially offset by higher manufacturing costs and lower sales volume. Quarter-over-quarter, net revenues were down slightly by $7 million or 2% as the decline in sales volumes of 3% was partially offset by favorable pricing as pricing actions taken to offset higher input costs, including the pricing benefit from the extension of key business mentioned earlier, offset the contractual pass-through of lower material costs. adjusted EBITDA was up $10 million or 12% due primarily to a price mix benefit, partially offset by higher manufacturing costs. On slide 14, I'll discuss the beverage merchandising segment. A few important items to note here to put first quarter results into proper context. In Q1, we performed a scheduled cold mill outage at our mill in Pine Bluff, Arkansas. These are typically done every 3 years and entail approximately 10 days of downtime for maintenance and service. At the same mill, we were impacted by Winter Storm Elliott at the start of the year, which also adversely impacted production. These events led to a meaningful degradation of EBITDA for the quarter. Since early Q2, the mill has been back up and running with normal operations. For comparison to prior periods. Year-over-year, net revenues were down 8%. Price mix was up 7%, primarily due to pricing actions taken to offset higher input costs and the contractual pass-through of higher material costs. Volume is down 6%, primarily due to the market softening amid inflationary pressures, and the decline of 9% was due to the impact from the disposition of Beverage Merchandising Asia. Adjusted EBITDA was down 96%. This decrease was primarily due to higher manufacturing 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 $15 million related to the scheduled cold mill outage. Quarter-over-quarter, net revenues were down $15 million or 4%, primarily due to 4% lower sales volumes, primarily due to the market softening amid inflationary pressures. Price mix was flat. adjusted EBITDA was down $20 million or 95%, primarily due to higher manufacturing costs, partially offset by lower material costs, net of costs passed through. Next on slide 15, we have a summary of our balance sheet and the key components of our cash flow. We proactively reduced total debt during the quarter by repaying and repurchasing $110 million of our $1.2 billion term loan due 2026, marking a total debt reduction of $228 million since year-end 2021. Working capital increased compared to first quarter of last year, primarily due to the strategic investment in inventory over the course of 2022. Since year-end, we reduced our inventory positions in food service and food merchandising while we built inventory in beverage merchandising in advance of ceasing operations in Canton in the second quarter. We have tightened the range of estimated cash restructuring costs for Canton and Olmsted Falls, which we expect will afford us additional flexibility with respect to capital allocation. We expect to pay out the bulk of the cash restructuring costs over the course of the second quarter through Q4 of this year. As a result of the debt repayment, our cash balance declined to $427 million, and total debt declined to $4 billion, resulting in net debt of $3.6 billion and a net leverage ratio of 4.5 times. We remain committed to maximizing our long-term free cash flow and reducing net leverage while maintaining our focus on driving profitable growth. We also remain committed to our dividend policy as part of our long-term capital allocation plans. Looking ahead to the rest of 2023, we anticipate ending the year with a net leverage ratio in the low 4s. We also plan to make additional debt repayments in 2023 as conditions warrant. Finally, as we progress our beverage merchandising restructuring plan and strategic alternatives process for Pine Bluff and Waynesville, we will update our cash deployment plans accordingly. Now please turn to slide 17. Our company continues to execute at a high level across all our business units, and we remain well-positioned to capitalize on future growth opportunities despite the near-term emphasis on the beverage merchandising restructuring plan. As we have highlighted, the outlook for the U.S. economy remains uncertain as high interest rates and still elevated inflation weigh on consumer spending, which may also negatively impact our customers' purchasing decisions and order patterns throughout the remainder of 2023. Despite these headwinds, our first quarter results demonstrate the resilience of our food and beverage packaging business and the company's ability to deliver sustainable results despite the uncertainty. As we highlighted earlier, we have increased our full year adjusted EBITDA guidance to $775 million-$800 million. This reflects the expectation that we will build on the momentum of the first quarter to further improve productivity, throughput, and customer service levels. We expect our quarterly performance in 2023 to follow a more traditional seasonality compared to 2022. Typically, our seasonality is driven by higher consumption during the summer months and into third quarter. Last year, the second quarter was our strongest quarter for adjusted EBITDA. This year, we expect a modest sequential upward trajectory from Q1 to Q2 and into the second half of the year, which will result in challenging year-over-year comps for Q2, but more favorable comps for Q3 and Q4. From a macroeconomic standpoint, our full year adjusted EBITDA guidance assumes no material deterioration in the second half of the year compared to current conditions. Our full year guidance for capital spending remains unchanged versus our original guidance, while our expectation for total cash restructuring cost has been narrowed to $130 million-$160 million, with the majority of these costs expected to occur during 2023. As a result, we are introducing new guidance for full year free cash flow, which we expect to be in excess of $200 million. We believe this demonstrates the excellent free cash flow generating ability of our business and anticipate this will help us achieve a net leverage ratio in the low 4s by year-end. I do want to provide some additional color on free cash flow and net leverage ratio timing from quarter to quarter. With respect to free cash flow, we expect to have negative free cash flow in Q2, followed by positive free cash flow during the second half of the year. This is due to the timing of the cash severance payments and closure costs for Canton and Olmsted Falls, which are heavily weighted in Q2. With respect to our net leverage ratio, while we are targeting to end the year in the low 4s, we expect a modest increase in Q2 as the second quarter of last year rolls off our LTM adjusted EBITDA figure, in addition to the cash dynamic I just discussed. Since 2023 is expected to follow a more traditional seasonal trend, we expect to see more consistent adjusted EBITDA results from quarter to quarter and declining net leverage through year-end. Moving to slide 18, we have provided a bridge from our reported 2022 adjusted EBITDA to our previous and updated guidance for 2023 adjusted EBITDA. On the far left is our reported 2022 adjusted EBITDA of $785 million. As we outlined in our 4th quarter earnings call, the adjusted EBITDA contribution in 2022 from divested businesses in our Canton Mill operations on a partial year like for like basis was approximately $30 million. This brings our pro forma 2022 adjusted EBITDA to $755 million, which represents a like for like basis compared to our guidance for 2023 adjusted EBITDA. Our original guidance was for $755 million-$780 million of adjusted EBITDA for 2023, which represented 1.7% growth at the midpoint compared to 2022. With our revised guidance today, we now expect full year adjusted EBITDA in the range of $775 million-$800 million, representing 4.3% growth at the midpoint compared to 2022. To put this into perspective, the Congressional Budget Office's most recent estimate for US real GDP growth in 2023 is only 0.3%. I'll now pass it back to Mike for further comments. Thank you, Jon. Please turn to slide 20. This is an important year for Pactiv Evergreen as we build upon our foundational strengths and increase our focus on our core competencies. It's just as important to put 2023 into context of our strategic direction. Over the last 2 years, we expanded and strengthened our position in foodservice and consumer packaging goods through our acquisition of Fabri-Kal, integrating great brands such as Greenware and Recycleware. We made great progress in refining our portfolio to focus on our core operations in North America by executing multiple divestitures of non-core businesses, including the sale of our Beverage Merchandising Asia business. This year, through the beverage merchandising restructuring, we have taken significant steps to solidify our leadership position in large, growing end markets while prioritizing our distinctive core strengths. Through it all, we have made strides in our ESG stewardship and have set a goal of having 100% of our net revenue come from products made of recycled, recyclable, or renewable materials by 2030. This past quarter, we published our first ever Task Force on Climate-related Financial Disclosures Report and plan to integrate the results into our enterprise risk management program. We are actively working with our customers to develop unique products to help them meet their sustainability goals. A copy of the TCFD report may be found at investors.pactivevergreen.com under the ESG documents section. We have dramatically reduced our net leverage profile from 7.6x at the end of 2021 to 4.5x as of 1Q 2023 through a combination of solid free cash flow, proceeds from divestitures of non-core businesses, and improved EBITDA performance. While 2023 is a transitionary year, we do expect to grow EBITDA and generate solid free cash flow despite the beverage and merchandising restructuring costs. We anticipate a continued reduction in our debt levels and our net leverage over the course of 2023. As John mentioned, we are targeting a net leverage ratio in the low 4s by year-end. We believe these actions will build additional momentum on our existing position as the market-leading North American food and beverage packaging company. We also expect our streamlined focus on our core converting operations to help us drive incremental revenue and EBITDA growth, as well as enhanced free cash flow conversion. This, in turn, would help us deliver dependable returns and reduce our net leverage to under 4 times. In summary, we believe we have a robust platform that enables profitable growth and sustained returns with the financial wherewithal to pursue organic and inorganic opportunities to add to our business. We continuously evaluate our portfolio to ensure that we have the optimal mix of products and capabilities to meet our customers' needs and to ensure that we are deploying our capital to maximize shareholder value. We also maintain the flexibility to divest non-core businesses to help us focus on our core markets as well as de-lever our balance sheet. On Slide 21, I'd like to reiterate what makes Pactiv Evergreen a strong, differentiated, growing, and socially responsible business. Our markets are largely recession-resilient. We are also focused on generating sustainable returns, and the leadership team has demonstrated our willingness to optimize the portfolio in ways that put us in the best position to deliver on our commitments. 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. We set a goal of having 100% of our net revenues in 2030 come from products made of recycled, recyclable, or renewable materials. All of this yields strong adjusted EBITDA and free cash flow generation, which we carefully manage to drive de-leveraging 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's open it up to questions. Operator? We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone 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 Ghansham Panjabi with Baird. Please go ahead. Hey, guys. Good morning and congrats to us. Very strong start. I guess, you know, Michael, going back to your prepared comments on, you know, the obvious, which is the consumer spending environment and the associated uncertainty, can you just give us a sense as to how you're thinking about volumes on a segment basis as you cycle through the rest of 2023? You know, comparisons are quite a bit easier, but there is that aspect of just end market weakness. Any updated thoughts there? Just when you think about our outlook, you know, the way we're thinking about it is that this environment, you know, albeit challenging, you know, we expect that same kind of challenge to continue through the balance of the year. You know, we are seeing consumer moderation on foot traffic, so in-room dining, you know, the buy-down is real. The good news for our business is that when the consumer does that, it just moves the business from our food service channel to our food merchandising channel. Looking at our Q1 results with the challenging macro, you know, that's kind of how we view the year, that there won't be a big pop or an improvement in the consumer sentiment. We do believe that this is sustaining through the balance of the year, and that's included in how we're thinking about our outlook. You know, the other thing to add to that would be if you look at 2022 comps in the back half, there was a large destocking that many of our customers kinda ran and then dribbled into Q1. We do believe that's largely complete, and, you know, it could be an interesting back half of the year should the consumer stay where they're at today and could be a benefit even to our forecast. Okay, got it. Your comments on the extension of business and the food merchandising, I think you called that as one of the positive variances relative to your internal expectations for 1Q. Just expand on that. You know, is it going to start to impact your volumes as you go through the year for that segment? In terms of the extension of the business. Yeah. In terms of, to give you some context, there's a bit more disclosure in the Form 10-Q that we filed today. That was essentially an extension of some of the key terms that we have with RCP. It was a two-way agreement under which we supply product to RCP and RCP supplies product to Pactiv Evergreen. There was a COLA revision that was signed in Q1. We expected to sign it in Q2, which is why we had an incremental benefit to the quarter. There was a bit of a retroactive recovery for inflation in there. Just to give a little bit of color, the COLA revision applied in both directions. There was a net benefit to Pactiv Evergreen based on the difference between the old and new pricing and the fact that we sell more to RCP than we buy from RCP. We received a true-up during the first quarter, which resulted in a roughly twelve and a half million dollars of adjusted benefit in the quarter, which includes roughly seven and a half million related to prior periods. Okay, that's very clear. Thank you. The next question comes from Kieran De Brun with Mizuho. Please go ahead. Hi. Good morning. I was wondering if you could talk a little bit more about pricing and how we should think about, pairing, like, the cost pass-through with what we may call, like, structural price increases that would stick as costs subside, and how you think about that trending throughout the rest of the year. Thank you. Really the way we think about pricing is we have, you know, structured index-based mechanisms in our contracts for our raw materials, and those are all on a pass-through. I would say the non-index or the more cost of living associated costs, you know, we have arrangements built into most of our contractual pay-at-will pricing that allow us to, you know, continue to get the support from our customers where inflation and cost pressures continue. If you know, you look at our improved margins, you know, it's really a result of just how we think about pricing is, you know, we're pretty elastic on both the index-based and the COLA-based stuff. That's kinda how we approach it, and that's how we anticipate approaching in our outlook. No, that's very helpful. maybe along those lines, you know, when we think about the pricing, for value and against volumes, how do we think about the impact potentially on volumes from those actions throughout the course of the year? I mean, is there a way to parse out, maybe in 1 Q, how much of volume impact was from, like, destocking versus just general market weakness versus some of the initiatives that you're taking to, you know, price for value as opposed to just chasing volume? Thank you. We can guess and understand the difference between what the destocking versus, you know, maybe a value over volume impact could be. What I would tell you generally is, with where our service levels continue to be, you know, over 99% and with the kind of support our customers have given in supporting inflationary costs, you know, we'd expect that to continue. We have no large volume degradation assumption and related to our value over volume strategy. Certainly, you know, aren't chasing volume by any means as a strategy linked to pricing. I'd probably just add if where we are losing where you do see some of the volume degradation, it is more on the margin, and it's more towards the lower margin customers, which is where you're seeing the benefit to that approach paying off in the EBITDA that we're reflecting. I would say the EBITDA margin, I should say. 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 a strong first quarter. You gave some very helpful comments in the prepared remarks regarding the EBITDA bridge. When you think about that midpoint of the guidance now at high $780s, it sounded like your second quarter faces some tough comps, so maybe that looks a lot like first quarter. That would leave about $400 million for the second half. It would imply a little bit of a better second half. Am I thinking about that the right way? Maybe you can just provide some more detail on how you're thinking about the EBITDA progression through the year. Yeah. I think you have it right. You know, certainly the back half of the year, just with destocking not reoccurring and, you know, our assumption around a softer macroeconomic landing, not necessarily things getting worse, but with the current challenges, carrying through the end of the year. That's exactly right. In Q2 last year, obviously the comps with, you know, declining input costs, and us rebuilding our strategic inventories and things like that, you know, we had a fairly solid Q2 that had some uniqueness that won't reoccur. I think you have it right. I think you said it exactly how we're looking at it. Jon, anything you want to add? You know, I agree with all that, Mike. You know, we expect our 2Q volumes and adjusted EBITDA will both improve compared to Q1 levels, mainly due to seasonality, as we just mentioned. Just again to note, we do not expect, you know, the second quarter 2023 to exceed the second quarter 2022 volumes or adjusted EBITDA, just given the strength of Q2 of last year, which was our best quarter. Yeah, right. When you look into the medium term, you have some strategic alternatives for Pine Bluff. You've exited some other non-core businesses that accounted for, I think, $30 million of EBITDA last year. When you look into 2024, we should still expect growth. Is that correct? On better maybe, you know, slightly, again, no destocking, you know, maybe a little bit healthier consumer, and, you know, some of the actions that you've taken internally. Would you expect kind of mid-single digit EBITDA growth as kind of a steady state, or are you thinking about the medium term now? Yeah, we'd expect growth. I think it remains to be seen as to, you know, how strong a growth, but I don't think, you know, single digits is out of the question. I think that's probably more realistic. Absolutely, we're expecting to grow. Okay, thanks. The next question comes from Anthony Pettinari with Citi. Please go ahead. Hi, good morning. your 1Q EBITDA margins I think were up 100 basis points year-over-year. you know, as we think about 2Q, is there sort of a directional way to think about margin trajectory? Just more broadly, is there a way that you think about sort of, you know, normalized margins for the company or maybe a long-term target? I think last year you were around 12.5%. Just wondering if you can give us sort of the near-term view and then if there's kind of a long-term goal or sort of normalized view. Yeah, sure. Just to put it into some context, you know, this current quarter, Q1, we did see some, from a corporate standpoint, the margins were better as you referenced, but they were still brought down by some of the events in the beverage merchandising segment, which some were one-time, as I mentioned in the prepared remarks, due to the cold mill outage and the effects of winter storm. You know, getting beverage merchandising more normalized, we do have a little bit of noise there this quarter as we are closing Camden and Olmsted Falls this quarter. As we get that more stabilized, you would see that the margin from that segment will improve. Then as that gets normalized, you'll see that the overall corporate margins will improve going into the outer year quarters. I would say on a long-term basis, on, we're generally trending toward we aim to be in the mid to high teens in terms of where our normalized EBITDA margin should be. By the way, that's not a stopping point. We'll continue to push ourselves to exceed that, but that's, I think that's the right way to think about where we expect to be in the near term. Yeah. Okay. Okay, that's very helpful. Just, you know, there was a kind of a spike in polypropylene prices in the quarter. I'm just wondering if you can kind of remind us your impact or your exposure rather to polypropylene, and then just more broadly kind of assumptions about resin costs as we go through the year for your guidance. Yeah, we did experience that. You know, as a reminder, we do have majority of our contracts do have resin passthroughs, and those that are not contracted, we tend to price on the spot market. We'll, we'll recognize the resin price passthroughs, things like propylene on the spot market. I would say that, as a reminder, there is a lag effect with those, as you know. As we are seeing a bit of spikes more recently in polypropylene, you know, there will be some margin impact in the short term, but which we will get back as that normalizes or comes back down. But the current environment for propylene specifically is factored into our guidance scenario based on what we're seeing in the marketplace. Okay, that's helpful. I'll turn it over. The next question comes from Kyle White with Deutsche Bank. Please go ahead. Hey, good morning. Thanks for taking the question. SG&A inflation was a fairly large headwind all of last year, and this quarter is actually positive on a year-over-year basis. Just with some of your cost management, should we expect SG&A to be lower this year and for that bucket to be positive? Any kind of range of benefits that we should expect that's included in the outlook? Sure. You know, I think you do pick up on that trend. We are working very actively on cost management. We did see a decrease in SG&A. You know, part of it is the restructuring that we mentioned. We are going to be recognizing some benefits for that. We should see the full run rate of that into going into next year to the tune of around $30 million. You're seeing some of that. There are some other lower kind of one-time incentive pieces that were in 2022 that we're not seeing in 2023. That is offset by some inflation. We are seeing inflation in certain areas, but as you can tell, we're proactively managing SG&A costs. Despite some of the inflationary headwinds, we are doing everything we can to continue to lower SG&A costs. Got it. On food service, you talked about consumers trading down. Curious if you're actually seeing a similar dynamic as it relates to your business customers. Are they trading down to cheaper options that may not be viewed as sustainable? Is that having any kind of applications on your mix? We're seeing the trade-down, I would say to a lesser extent, you know, it's a mixed bag, whether it's favorable or unfavorable to mix. You know, with people choosing to get their calories at a lower cost, you know, things, in-room dining and the trade-down to, you know, more chain or fast food-based consumption and even largely, if you use Q1 is a good example, you know, people returning to eating at home quite a bit more as the lowest way, lowest cost way to get calories. You know, the good news for us is, you know, we don't lose the volume when the consumer trades down. You know, they shift where they shift the channel in which they consume. Largely our products are channel agnostic outside of the branded space. We don't see a margin mix impact per se. We do experience the shift and the lag, you know, behind that consumer shift. That's really the impact to our business is, you know, adjust our production and inventories to meet that shifting consumer. Got it. Thank you. 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 Cashen Keeler with Bank of America. Please go ahead. Yeah. Hi, good morning. This is Cashen sitting in for George Staphos this morning. You called out a couple times that manufacturing costs were higher across the segments. I was just hoping to get a little bit of a better understanding as to what was driving that, and then, you know, how can we think about that, you know, in terms of trending for the rest of the year? Thanks. Yeah. The, you know, the inflationary challenges around labor and the cost of labor is real. Continue to get the right kind of applicant flow and get the right folks trained. Those costs are all higher coming into the year. We'd expect that to continue. You know, one of the key focuses for our business is to ensure we maintain the highest service levels and protect our customers. In order to do that, we've made it a focus to ensure that we're bringing in quality candidates and investing in them. That's really where we're seeing the costs continue. It's really more about what we've seen over the last kind of 12 to 18 months is, albeit it is starting to taper off. That's really the gist of it. That is contemplated in our outlook as well. Cashen, one other thing I'd add is just, you know, as you look at some of the volume declines that we're seeing, albeit modest, you know, there is a bit of an absorption impact, too. Sure. as, that's influencing that manufacturing cost. Got it. Got it. Then just secondly, I guess longer term in terms of the capital needs of the business, you know, how can we think about kind of what the normalized CapEx level should be, you know, maybe as we move into 2024? Then relatedly, I guess, on free cash flow and, you know, leverage, how can we think about that, particularly as you move beyond kind of the restructuring actions that you're taking this year? Thanks. Yeah, sure. Lot to cover on that. First on the capital needs for the business. You know, given the restructuring that we're undergoing, part of the goal of that restructuring around the beverage merchandising segment is to lower our run rate of our ongoing capital needs. This year, for example, in the business, we're expecting to have about $150 million of sustaining capital, about $50 million of which is in the mills. The remainder of that, you know, there are a portion of that that is another, you know, portion of the $280 of our guidance this year is focused on smaller business opportunities and growth projects, including the $60 million new equipment that we mentioned on the last quarterly call. From a run rate basis going into next year, we haven't provided guidance yet. You know, it's from a sustaining and kind of a minimal CapEx to run the business, it will be coming down due to the restructuring, if that's helpful. As it relates to free cash flow guidance, you know, it's probably helpful for me to just give you a walk of what's going into that to build up to the $200 million+, that we're guiding to. To start the bridge, you know, at the beginning, EBITDA, if you take our $775 million-$800 million, you subtract out the $280 million of CapEx that we've guided to. Cash interest, we're expecting to be around $250 million, which is a bit lower from the guidance from last quarter. Part of that is LIBOR has come down and we've also, you know, repaid some debt, which has lowered that overall interest. Cash taxes, about $70 million. The Beverage Merchandising restructuring charges, as we mentioned, the majority of that is going to be in 2023 with probably a disproportionate amount in Q2. You know, call that somewhere around $120-$130 for this year. The remainder for the free cash flow is working capital benefit we expect this year. To give you a sense of that includes a net inventory reduction once we cease production in Canton. One of the primary drivers will be the transition to stock of paperboard inventory we built to facilitate that exit, we expect to work through that stock through the end of the year. We have additional opportunities to further reduce overall inventories without impacting our service levels. One area to highlight is working more closely with our customers as well on forecasting, while they have also improved their own forecasting. By aligning our planning, we've been able to improve service levels and improve efficiencies, which allows us to manage our inventory more effectively. We are making concerted efforts to improve other overall working capital efficiency as well. You know, finally, just I wanna reiterate our commitment to pay down debt. You've seen that throughout our actions and we'll continue to look for ways to pay down debt with our excess cash. Great. Thanks. This concludes our question and answer session. I would like to turn the conference back over to Michael King for any closing remarks. Thank you all for joining today. We appreciate your interest and questions. We are excited about the momentum we are building at Pactiv Evergreen as we continue on our long-term strategy. We look forward to updating you again in the next quarter. Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.