Ladies and gentlemen, thank you for standing by and welcome to the Reynolds Consumer Products Q3 2022 earnings call. At this time, all participants are in a listen-only mode. After the speaker presentation, there'll be a question and answer session. If anyone should require operator assistance, please press star zero on your telephone keypad. Please be advised that today's call is being recorded. I would now like to hand the conference over to your speaker today, Mark Swartzberg. Thank you. Please go ahead. Good morning, and thank you for joining us for Reynolds Consumer Products Q3 2022 earnings conference call. On the call today are Lance Mitchell, President and Chief Executive Officer, and Michael Graham, Chief Financial Officer. For our agenda today, Lance will focus on market conditions and our fundamentals, and Michael will review our quarter and outlook. Then we will open it up for your questions. During the course of this call, management may make forward-looking statements within the meaning of the federal securities laws. These statements are based on management's current expectations and involve risks and uncertainties that could cause actual results and outcomes to differ materially from those described in these forward-looking statements. Please refer to our annual report on Form 10-K and other reports filed from time to time with the Securities and Exchange Commission and our press release issued this morning for a detailed discussion of the risks that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today. Please note management's remarks today will focus on non-GAAP or adjusted financial measures. A reconciliation of GAAP measures to non-GAAP financial measures is available in the earnings release posted under the Investor Relations heading on our website at reynoldsconsumerproducts.com. We have also prepared a few presentation slides and additional supplemental financial information, which are posted on our website under the Investor Relations heading. This call is being webcast and an archive of it will also be available on the website. While we would like to answer all of your questions during the question and answer session, in the interest of time, we ask that you ask one question and a follow-up and rejoin the queue if you have additional questions. Now I'd like to turn the call over to Lance Mitchell. Thank you, Mark. We delivered another quarter in line with our earnings expectations in what continues to be a very dynamic environment. Q3 highlights include the following. Household foil and waste bag volume responded favorably to increased advertising, promotions, and in-store features and displays. Reynolds and Hefty gained share in waste bags, household foil, and disposable plates. Private label gained share in press-to-close food bags and disposable party cups, where we have a significant private label presence. We implemented previously announced pricing to offset additional cost increases. We accelerated Revolution cost savings while also implementing new programs for savings. As a result, we closed the gap between pricing and cost increases. Our category leadership and agility drove these achievements while setting the stage for substantial margin expansions and profit growth in the Q4 and 2023. Before talking about performance drivers, I'd like to share a few thoughts about the economic environment and our market position. We assume increased elasticities going forward, which contributes to our Q4 revenue expectations now being at the low end of our previous range. That's obviously a headwind, but one of our strengths is our ability to adapt. As I said, we are pleased with how consumption is responding to our pickup in promotions, advertising, and in-store features and displays. I think it's also worth remembering that our integrated brand and store brand model is a competitive advantage. Reynolds and Hefty represent a large share of our categories, and our private label portfolio complements our brands in multiple categories. Finally, as we enter the holiday season and develop our plans for next year, it's important to note that increased cooking and working at home have driven many of our categories to levels that are beyond those implied by the last three years of household formation. That's clear from our proprietary research, and it's validated by the scanner data. According to IRI, equivalent volumes of waste bags, disposable party cups, parchment paper, bakeware, and slow cooker liners have all grown in excess of 5% since 2019. Some of these categories are now more than 10% larger than they were prior to the pandemic. Now let's turn to the main drivers of our performance, pricing, consumer demand, innovation, and manufacturing and supply chain capabilities. In the area of pricing, recently announced increases in disposable tableware and waste bags have been implemented as planned in September and October, bringing annualized pricing to nearly $1 billion since mid-2020. We are reinvesting a portion of these increases in additional advertising and promotion, and consumer demand for our categories and product portfolio is responding to our increases. In household foil, in June, we began increasing promotions, features, and displays and are directing more advertising dollars to younger consumers. These measures have contributed to improving household foil trends, along with increases in Reynolds Wrap share of the foil category. We and our retail partners also increased promotions further in October and plan to continue similar promotions this holiday season. In waste and food bags, Hefty share trends improved and the share of private label remains strong. In disposable tableware, we gained share and maintained a substantial discount to paper plates while also implementing the additional pricing on disposable plates. Third major contributor to our performance is innovation. In waste and storage, Hefty Fabuloso continued to grow strongly, nearing $110 million in annual retail sales in the quarter. We launched Hefty 4- and 8-gallon trash bags with drawstrings and the new ocean water scent in the quarter. We introduced Hefty Slider Calendar Bags, which allow for better recording of refrigerator or freezer storage time, and Hefty made-to-fit trash bags in the e-com channel. We saw further consumer and retail adoption of standard fill private label food bags. In cooking and baking, the Reynolds brand continued to benefit from innovation as Reynolds Wrap Non-Stick Foil remained strong. Reynolds Kitchens Air Fryer Liners and Reynolds Kitchens Butcher Paper helped to build Reynolds presence in certain adjacencies to household foil and other more established categories. We achieved growth within our portfolio of sustainable products, including Hefty ECOSAVE, which grew strong double digits in the quarter, and Hefty Compostable Printed Paper Plates. Additionally, we launched a new food bag made from 20% renewable plant and ocean materials. The fourth driver is the performance of our manufacturing and supply chain. The recent manufacturing and operational performance in the Reynolds Cooking & Baking segment has fallen short of our standards and historical results. Unplanned downtime in two of our plants has resulted in incremental manufacturing costs and impacted our ability to adequately supply non-retail customers. In response, we are implementing operational changes to improve reliability and efficiency. In addition, we have made changes to the Cooking and Baking organization with new members of management who possess extensive experience in operations and demonstrated business leadership. In terms of service, we have produced substantial improvements across Reynolds Consumer Products, reflecting attainment of target staffing levels and increased stability across our supply chain. Now, before I pass the call to Michael, I'd like to leave you with the following. The economic environment remains dynamic. Inflationary pressures continue, and price elasticity continues to be uncertain. However, we are giving shoppers the trusted performance and additional value they seek in these uncertain times. In terms of business performance, the gap between our pricing and cost increases is closed, and we're positioned for margin expansion and earnings growth in the Q4 in 2023. That implies not only a return to earnings growth, but also increased flexibility to invest in our categories and drive future innovation and consumption. I'm extremely proud of the RCP team and believe that we are well-positioned to benefit from the actions we have taken over the last two years. With that, over to you, Michael. Thanks, Lance, and good morning, everyone. I'll start with a review of our Q3 results, then turn to our outlook and why we are well-positioned for margin expansion and earnings growth in the Q4 and in 2023. Net revenues in the Q3 were $967 million, an increase of 7% over Q3 net revenues of $905 million in 2021, driven by price increases, partially offset by a decline in volume. Adjusted EBITDA for the quarter was $116 million, down 12% versus last year's Q3 of $132 million, driven by lower volume and higher SG&A, as price increases fully offset increases in material, manufacturing, and logistics costs. Adjusted earnings per share for the quarter was $0.24. Turning to our segment performance, details are in our press release and in our 10-Q. However, I do want to cover a few key highlights. Pricing was up 14%, driven by increases across our entire portfolio, offsetting all material, manufacturing, and logistic cost increases. This increase was partially offset by a 7% decline in volume, reflecting a 7% increase in Hefty Tableware volume, more than offset by a 14% volume decline in Reynolds Cooking & Baking and high single-digit decline for each of Hefty Waste & Storage and Presto. When we reported our second-quarter results, we shared our expectation of low- to mid-single-digit volume decline in the Q3. This largely played out as anticipated, with the exception being non-retail sales that were impacted by unplanned downtime in the Reynolds Cooking & Baking segment and, to a lesser extent, increases in waste bag elasticity. Let's unpack the volume performance for the Q3 compared to prior year period. Reynolds Cooking & Baking volume decline of 14% was primarily driven by lower non-retail sales, which included re-roll, related party sales, and last year's one-time sale excess raw material. In addition, lower household foil shipments represented three points of this decline. Volume declined 9% in Hefty Waste & Storage, driven by elasticity and increased consumer activity outside of the home. Innovation was a key driver of Hefty's outperformance of the waste bag category. Presto volume declined 8%, also driven by a lower waste and food bag usage, partially offset by increased private label share of press-to-close food bags. Hefty Tableware performance was strong, with volume up 7% in the quarter, driven by continued growth within the club channel and share gains for Hefty disposable plates and private label plastic party cups across channels. Now, before I go into our outlook, I would like to talk a little more about the performance we're seeing in Cooking and Baking. There are three key factors impacting the near-term profitability in this business. Unplanned equipment downtime, driving higher manufacturing costs and lower production volume. This lower production volume is impacting our ability to fulfill non-retail demand. In addition, as a result, we are experiencing a negative impact in terms of when lower cost metal flows through to our P&L. As Lance discussed, we are implementing operational changes to improve reliability and efficiency in our Cooking and Baking operations. Now turning to our outlook. We now expect revenue growth of approximately 8% for the year, along with gross profit in the low $800 million range, adjusted EBITDA in the range of $560 million-$575 million, and adjusted EPS of $1.30-$1.36 per share. Our updated guidance reflects reduced expectations for the comparatively low-margin retail and related party sales, as well as a pickup in elasticities in portions of our business. We also assume rates for key commodities are stable by comparison to the end of October levels. Other key assumptions for the year include depreciation and amortization of approximately $120 million, interest expense of approximately $75 million versus an estimated $70 million previously, driven by increasing market rates, an effective tax rate of 25%, and capital spending of approximately $135 million-$140 million. In terms of the Q4, additional elasticity in portions of our business changes our volume expectations to decline in the low- to mid-single digits. We are on track for margin expansion and earnings growth in the Q4, driven by further recovery of cost increases as new pricing flows through and cost increases moderate. We also expect SG&A to increase, driven by advertising, investment in our operational improvements, and compensation-related comparisons. Now, before I turn the call back over to Mark and your questions, I want to leave you with a few thoughts on cash flow. Just as we are committed to returning to pre-pandemic profitability, we're equally focused on improving balance sheet efficiency and maintaining capital spending discipline to drive additional cash flow. We expect this to commence in the Q4 as we unwind from our normal seasonal peak in working capital, earnings grow, and commodity cost pressures ease. In terms of capital allocation, our priorities are unchanged, and we intend to return to debt paydown in 2023. In closing, while we continue to manage through a very challenging environment, I'm encouraged by the actions we've taken as well as the implications for our future results. With that, I'll turn the call back over to you, Mark. Thank you. Thanks, Michael. As I turn it over to the operator for your questions, I'd like to remind you that you ask one question and a follow-up, and then rejoin the queue if you have additional questions. Operator? At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Our first question comes from Bill Chappell with Truist Securities. Please proceed with your question. Thanks. Good morning. Morning, Bill. Hey, just wanted to follow up on the Cooking & Baking profitability issue. I appreciate the comments, but I guess with a leadership change maybe implies there's a little bit bigger or longer-lasting issues. Maybe any color around that of when you think things can get back to where you want them to be and, you know, how long it would take. Yeah. As Lance stated in his remarks, the recent manufacturing operational performance of Reynolds in Cooking & Baking has fallen short of our standard and our historical results. We've had demonstrated capabilities as proven in the past. In terms of what's driving that, as I said in my remarks, it's unplanned equipment downtime, and this is driving higher manufacturing costs and lower production volume. That's impacting our ability to fulfill non-retail demand. It's also slowing down the flow-through of our lower cost metal, which has a significant impact to our Q4. You know, while most of these issues are temporary in nature, you know, we are implementing operational changes to address them all, and Lance kind of spoke to that. We do see this as being a temporary challenge that we're working through. As it relates to the change with leadership, you know, obviously, you know, we brought in a person with significantly greater operational experience to help us manage through this. Got it. Just as a follow-up, and you might have touched this before, but when you comment about returning to kind of pre-pandemic profitability levels in 2023, is that, I know you're not giving guidance, but is that for 2023 or within or during 2023 you'll reach that on kind of a run rate? Thanks. It is within 2023 is where we're talking about returning back to pre-pandemic profitability. Gotcha. It'll be a run rate as we move through the year. Yes. Thank you. Thanks so much. Next comes from Mark Astrachan with Stifel. Please proceed with your question. Yeah, thanks, and morning, everyone. I guess, two questions from me. One, if you could just give maybe a bit of background on what happened from a sales perspective relative to early September and your updated thoughts at that point relative to where results came in, kind of what progressed through September, and is that sort of direction of what we're hearing from an elasticity standpoint implied in the Q4 commentary? And then the main question is, what drove the increase in promotion and price gaps in waste bags, and are you happy with where you are as volume declines worsened in the quarter? And maybe give some expectations on where we go from here. Thank you. Thank you, Mark. September volume across our, you know, our products and segments came in line with our forecast and our expectations. There was really no difference from what we talked about at the Barclays conference, relative to September results. We have from a category standpoint in waste bags, we implemented a Hefty waste bag price increase in September. The promotions we have added are off of a small base, and they're focused on quality, features, and displays like end caps, not just price points. The category itself is 7% larger than it was in 2019 year to date, but elasticity and reopening are driving some category declines versus year ago levels. Our strategy remains as to what it's been for many years: support the category and our retail partners with a strong portfolio of branded and private label products and drive Hefty as a brand offering with the best combination of value. That's benefited the category, and our portfolio requires continued adjustments to be successful. Hefty is outperforming the category. The last four weeks, ending October thirtieth, the scanned EQ, the category is down 8.5%, while Hefty is down 3.8%. For the last 12, it's similar. The category is down 7.5%, and Hefty is down 3%. We're looking at EQ performance because looking at dollars in the category is really blurred by the price icreases. Okay, thank you. Our next question is from Robert Ottenstein with Evercore ISI. Please proceed with your question. Great, great. Two questions, please. One in the shorter term on results, just maybe a little bit more detailed thoughts on the trend in improvement on the foils. And then, a little bit kind of forward-looking, can you give us just some way to think about the potential benefit to your business, you know, of a more constrained consumer who, you know, may be thinking about trying to save money by eating more at home and less at restaurants, and how that's likely to play into your business? Thanks. Yeah, I think both those questions can really be answered in terms of what's happening with the foil category and what we're seeing from, you know, the promotional activity that we've taken. You know, the pandemic has benefited cooking and baking behavior and consumers. People are in the kitchen more. We did a proprietary survey that they're cooking more often. The younger consumers have come into the category and stayed in the category. Recently, because of the higher cost of eating out, they're coming back and eating in the home more frequently than they were earlier in the year. Our category and our brands are responding to advertising promotion, as we talked about in the prepared remarks. Now, on the challenge side, we do see that the consumers are not leaving the category, but versus during the pandemic, the daily usage is dropped moderately. There are some other options in the kitchen, which is an opportunity as well as a challenge. They've got other options for creating a meal. Appliances other than a stove or grill. Those include air fryers and Instant Pot and slow cookers, for example. Overall, we're very pleased with how the promotions have responded. As we head into the holiday season, you know, we've really got a lot of promotions in place and got the price points in place for the category. Thank you. Our next question is from Andrea Teixeira with JPMorgan. Please proceed with your question. Thank you. Good morning, everyone. My question is regarding your comment about the 7% increase from 2019 through the pandemic, especially for trash bags, and then I think for cooking and baking. You said some categories, I'm assuming it's cooking and baking, was above 10%. Is that a volume consideration? And if so, from a total outspending from the consumer standpoint, like are you assuming again it has been a bigger price elasticity and on top of that you had these service issues. Is there any indication that this is gonna be abating into the Q1 of next year? And if not, what is the scenario that would lead you to form, you know, that margin inflection? You're assuming some volume recovery into 2023. In other words, what we need to see in order for you to get the margin accretion? Is that the pricing continuously ticking, or the $525 million in inflation abating? What needs to happen in order to get there? Thank you. Well, let's talk about what's happening in each of the categories versus 2019 and as we've gone through the pandemic, and as we're now in 2022. First of all, I'll just add some of the comments I made about the foil category in answering Bill's question. There are several things that are driving the growth in the foil category. People are cooking more now than they were in 2019. Foil and parchment usage continues to be higher than pre-pandemic levels, and 78% of consumers are eating at home more in response to inflation, as I mentioned a moment ago. Importantly, we've achieved key price points for Reynolds Wrap. We've stepped up promotions, have gotten below the $5 price point, and have gotten that across the other product lines as well. Private label gaps in the category are returning to historical levels when Reynolds Wrap is on promotion. We've achieved those price points, we've introduced additional promotions in grocery club and dollar channels in October, and our retail partners plan additional promotions leading into Thanksgiving and Christmas. Reynolds Wrap is responding better than the category as a result. In EQ, as I mentioned, across all of our categories, we're evaluating EQ performance versus dollar performance. Reynolds Wrap EQ is up 4.5% versus the same period in 2019. That's the last 12 weeks ended October 30. Turning to waste bags. The stay-at-home more frequently trend and working more frequently from home has left waste bags healthier than it was prior to the pandemic. The category is strong versus 2018. It's up 7% year to date, as I mentioned, reflecting consumers spending more time at home. Food bag consumption, on the other hand, is moderately down versus 2019, and that's primarily driven by elasticity. As the playbook that we've been using for foil and waste bags, we're gonna be doing the same in food bags to get the price points correct. In disposable tableware, plastic party cups are up 9% versus 2019 levels, driven by increased everyday use at home. Now, disposable foam dishes are down versus 2019, but that's completely driven by supply constraints. We are selling as much foam dishes as we have supply. Our brand year to date is actually up 5%. We see the use of disposable tableware has been steady this year across the category and heading into the, you know, the holiday season. This may continue to be a key theme of driving consumer behavior. Desire for convenience as well as keeping chores to a minimum as well as holiday gatherings is factored into our forecast for the quarter. We are seeing elasticity pick up as we took a significant price increase in October in the tableware business. We'll be watching that closely. That's helpful. On the margin front, what needs to happen in terms of like price elasticity and inflation, cost inflation into 2023? Going back to Bill's question. Well, yeah, as we said in our prepared remarks, we've closed the gap. We've closed the gap primarily through our pricing actions and, you know, the tableware was the significant one as well as waste bags that we took that led into Q4. With that, with the easing of commodities, we will have a margin that, as we go into 2023 and Q4 as well, will be improved and back to more normalized levels. Okay. That's super helpful. Thank you, Lance and Michael. I'll pass it on. As a reminder, if you would like to ask a question, please press star one on your telephone keypad. Our next question comes from Lauren Lieberman with Barclays. Barclays, please proceed with your question. Great. Thanks. Good morning, everyone. You, Lance, your prepared remarks and the, you know, comments you've just gone through on category demand and the competitive dynamics all very, very constructive. I wanted to just sort of boil it down and see that, to ask if the operational challenges you've got in the cooking and baking segment, if that's really what you would attribute Q4 looking a little bit softer than prior expectations, you know, what that's really attributable to and I know you've said it's short term and you're making changes, but how should we think about that? Does that bleed into 2023 at all or is it kind of a H2 of 2022, and then you think things should be back to normal from that non-retail and manufacturing side of things. Lauren, I'll answer that one, and you can add to it, Michael, if you'd like. The driver of Q4 EBITDA guide being lower is volume. It's $7-$8 million at the midpoint. The lower volume is primarily non-retail and as we've mentioned, the specific products in our prepared remarks of what non-retail is, and some increased elasticities versus what we saw at Q3. It's driven primarily by an elasticity look at our volume in Q4 versus where we were at Q3 when we guided. The increased manufacturing costs are short term and offset by Revolution and SG&A reductions. Okay. All right. That's great. As I look into 2023, you guys had previously spoken to mid-$900s for gross profit dollars, you know, and that really being kind of the math on pre-pandemic profitability with an assumption on volume. I'm guessing now with, you know, elasticity being a bit more significant than what you'd previously expected, we should anchor to something a bit lower when we think about that gross profit level for 2023? Yeah, I think that's correct. Mid-900s are still in the ballpark, and clearly elasticities are greater than we anticipated and reported in Q2. We did kinda give an indication that was a watch-out, so that is overall a concern. While in the ballpark, I would say that it is a bit lower than we were originally thinking. Okay. All right. That's great. I would- Yeah, go ahead. Sorry. I would add that we're working to identify additional Revolution savings to mitigate and we'll, you know, we'll obviously be more specific when we report in February. That's great. Thank you so much. On elasticity, I guess what is historically, and I know for a lot of categories, the historic models aren't even relevant because pricing's gone so far beyond what's been the case historically. So would you characterize that as kind of what's been the case for your elasticity models? Is it something about the kinda cross-elasticity of overall inflation that's making it a bit worse? You know, are we kind of on like a one-for-one type dynamic now is what you're forecasting or something still a bit less than that? You know, our categories have been moderately elastic historically, with a defined range of -1 to -1.5. Parts of it may be the exception. When price thresholds are crossed, that's more significant in our categories than the actual price gaps. That's why we're watching those price thresholds and adjusting accordingly and having success in doing so across most of our categories today. Our categories are defined as, you know, staples, need-driven categories, and react to price change accordingly within this moderately elastic range. Okay. That's great. Thanks so much. I'll pass it on. Our next question comes from Jason English with Goldman Sachs. Please proceed with your question. Hey, good morning, folks. Thanks for the slot, BM. Lots of comments today about how volume in your categories is still elevated. I think you mentioned that daily use for certain categories is drifting off the highs, but still well above where we were pre-COVID. Lance, Michael, as you guys think forward, what's the cadence, pace, and magnitude that you expect that to unwind as we go through next year? We have not completed our plan for 2023. You know, we're going through that process now. It would be premature for us to be able to comment on what our outlook is for 2023 from a volume and elasticity standpoint. We certainly wanna see how things develop in Q4 as we've gotten some price points in place, and we're entering our holiday season, which you know is a significant for several of our categories. Once we get through that, we'll have a much better read on 2023 and the outlook for volume as of that year. Is it fair to say that mid-900 guidance out there for gross profit assumes that not all this volume sticks? As Michael said, I think it's still in that neighborhood, but elasticity is greater than when we reported in Q2, and so we've gotta work through that before we're able to update the mid-900s. Okay. All right. I'll stay tuned. Thank you. I'll pass it on. We have reached the end of our question and answer session. I would now like to turn the floor back over to Lance Mitchell for concluding comments. Thank you for your questions, and we appreciate your time this morning. I think our business is well positioned for any economic environment, and we anticipate earnings growth in the Q4 and in 2023. I also wanna thank all of our employees and our retail partners. They've been dedicated in contributing during these really challenging and dynamic times. Thank you, everyone. The conference has now ended. This concludes today's conference. Thank you for your participation. You may disconnect your lines at this time.