Thank you for joining the Silgan Holdings third quarter 2022 earnings results conference call. Today's call is being recorded. At this time, I'd like to turn the call over to Kim Ulmer, Senior Vice President, Finance and Treasurer of Silgan Holdings. Please go ahead. Thank you. Joining me from the company today, I have Adam J. Greenlee, President and CEO, and Robert Lewis, EVP and CFO. Before we begin the call today, we would like to make it clear that certain statements made today on this conference call may be forward-looking statements. These forward-looking statements are made based upon management's expectations and beliefs concerning future events impacting the company and therefore involve a number of uncertainties and risks, including but not limited to those described in the company's annual report on Form 10-K for 2021 and other filings with the SEC. Therefore, the actual results of operations or financial condition of the company could differ materially from those expressed or implied in the forward-looking statements. With that, I'll turn it over to Adam. Thank you, Kim, and we'd like to welcome everyone to Silgan's third quarter 2022 earnings call. I'll make a few comments about the quarter, share our thoughts regarding the remainder of the year, and give a preliminary look at the 2023 growth expectations. Bob will then review our financial performance, provide more details around our 2022 outlook, and then we'd be happy to answer any questions. As you saw in this morning's press release, our businesses continue to perform at a very high level and are focused on consistently delivering value and reliability for our shareholders and for our customers. The Silgan team continues to drive record financial performance through operational excellence, targeting efficient utilization of our assets and reducing operating costs, commercial excellence aimed at meeting the unique needs of our customers, and finally, maintaining a very disciplined approach related to our cost pass-through mechanisms. As a result, for the second consecutive quarter, Silgan delivered an all-time record adjusted earnings per diluted share of $1.27 for the third quarter, a significant 25% increase over the prior year's record quarter, and importantly, an increase of over 20% versus our year-to-date earnings from 2021. While the anticipated destocking and normalization impacts in select categories drove organic volumes below prior year levels in the third quarter, absolute demand for our products remained strong, with third quarter Dispensing and Specialty Closures volumes 15% above pre-pandemic levels and Metal Containers volumes 13% above pre-pandemic levels. More importantly, we delivered meaningful year-over-year operating income improvement in each of our business segments in the quarter. Given our record performance to date and our expectations for the fourth quarter, which do include a strengthening US dollar and higher interest rates, we are tightening the range of our adjusted earnings per share guidance for 2022 to a range of $3.90-$4.00 per share, which at the midpoint represents a 16.2% increase versus the prior year record and will be the company's sixth consecutive year of record earnings performance. This compares to the prior range of $3.90-$4.05 per share. We're also confirming our estimate of free cash flow of approximately $350 million for the full year of 2022. Finally, as we take an early look at 2023, we remain confident in the future prospects for each of our businesses and our ongoing ability to deliver continued growth. In acknowledgment of our core mission at Silgan, our teams continue to execute well, and as always, we believe the value of our organization and the power of our broad portfolio of products will position the company to compete and win in the markets we serve through a variety of dynamic economic circumstances. As a result, we anticipate each of our business segments will deliver organic volume growth and operating improvements, which we expect to be a benefit to earnings in 2023. In addition, we do expect significantly higher free cash flow conversion in 2023 as well. With that, I will now turn it over to Bob to review the financial results in more detail and provide an additional explanation around our earnings estimates for the balance of 2022. Thank you, Adam. Good morning, everyone. As Adam highlighted, we delivered record third quarter and year-to-date results. Volumes, particularly in dispensing and specialty closures and metal containers, were largely as expected and well above pre-pandemic levels. Our operating performance was very strong in dispensing and specialty closures and metal containers, and each of our businesses did a good job of recovering inflationary costs through pricing and cost reductions. As a result, we delivered adjusted earnings per diluted share for the quarter of $1.27. On a consolidated basis, net sales for the third quarter of 2022 were $1.97 billion, an increase of $319.3 million or 19.3% as net sales increased in each of our businesses. This increase was primarily the result of the pass-through of higher raw material and other inflationary costs, partially offset by lower volumes in the Metal and Custom Containers and unfavorable foreign currency translation of approximately $57 million. We converted these sales into adjusted income before interest and taxes for the quarter of $222.1 million after adjustments of $2.7 million for rationalization charges as compared to the $175.2 million in 2021 after adjustments of $4.1 million for costs attributable to announced acquisitions, $2.3 million for rationalization charges, and $900,000 for purchase accounting write-up of inventory. The increase was primarily a result of higher average selling prices with the pass-through of inflationary costs. Strong operating performance, the lag pass-through of lower resin costs, and a more favorable mix of products sold in Dispensing and Specialty Closures, partially offset by inflation in manufacturing and SG&A costs, lower volumes in Metal and Custom Containers, and unfavorable foreign currency of approximately $8.4 million. Supply chain and labor challenges continued to impact certain customer demand for Metal Containers during the quarter. Highlights of adjusted segment income for each of our segments is as follows. Adjusted segment income in the Dispensing and Specialty Closures segment for the third quarter of 2022 increased $18.1 million, or 29.5% to $79.5 million, primarily due to the higher average selling prices resulting from inflationary cost recovery, the favorable impact from the lag pass-through of resin cost changes, strong operating performance, a more favorable mix of products sold, and higher volumes, including from recent acquisitions. These benefits were partially offset by inflation in manufacturing and SG&A costs and the unfavorable impact of foreign currency translation of $5.5 million. The acquisitions delivered $5.6 million of adjusted segment income. Adjusted segment income in the Metal Container segment was $123.8 million for the third quarter of 2022, an increase of $27.7 million or 28.8% versus the prior year. This increase was primarily attributable to strong operating performance, allowing us to better manage inventory levels and higher average selling prices as a result of the pass-through of inflationary costs, partially offset by inflation in manufacturing and SG&A costs, lower unit volumes, and the impact of unfavorable foreign currency translation of $2.9 million. The acquisition contributed approximately $1 million. Adjusted segment income in the Custom Container segment increased $1.4 million to $24.2 million for the third quarter of 2022. This increase was primarily attributable to the pass-through of inflationary costs and the favorable impact due to the year-over-year delayed pass-through of changes in resin costs, partially offset by inflation in manufacturing and SG&A costs, as well as lower volumes. Turning now to our outlook for the remainder of 2022, based on our record year-to-date performance, our current volume outlook, and our expected operating performance, we're providing an estimate of adjusted net income per diluted share for 2022 in the range of $3.90-$4. The midpoint of this tightened range represents a 16.2% increase year-over-year. This estimate excludes the impact from certain adjustments outlined in Table B of our press release. Our updated 2022 earnings estimate includes assumptions that full-year interest expense is in the range of $125 million-$130 million, and the fourth quarter and full year 2022 tax rate is approximately 21% and 25% respectively. We're also providing a fourth quarter 2022 estimate of adjusted earnings in the range of $0.76-$0.86 per diluted share as compared to adjusted net income per diluted share of $0.79 in the prior year period. The fourth quarter of 2022 faces a difficult year-over-year volume comparison in our Metal Containers and Dispensing and Specialty Closures segments as we lap the impact of the pre-buy in the prior year. However, we expect profit improvement on a quarter-over-quarter basis in both segments as our teams continue to drive better operating and cost performance. In our custom containers business, with destocking in the retail channel continuing into the fourth quarter and the timing of our continued efforts to rationalize lower return business, we expect fourth quarter volumes and earnings in the segment to be lower on a quarter-over-quarter basis. In addition, we are confirming our estimate of free cash flow of approximately $350 million for the year, which which includes CapEx of approximately $250 million and a significant year-over-year headwind from working capital as a result of raw material and other inflation. That concludes our prepared comments, so we can open it up for Q&A, and I'll turn it over to Emma to provide instructions for the Q&A session. Thank you. If you would like to ask a question today, simply press star one on your telephone keypad. If you would like to remove your question, again, press the star one. Your first question today comes from Mark Wilde from Bank of Montreal. Your line is now open. Thanks. Good morning, Adam. Good morning, Bob. Hey, Mark. Just to start off, I wondered if you could talk a little bit about the food can volumes. They were a bit weaker than the industry numbers that came out the other day, and I was kind of curious about that, particularly given your weighting to pet food, which was actually, you know, stronger than the category as a whole. Any issues you would call out there? Yeah, Mark, I think it's more about, again, what we talked about in 2021 and how that influences our volumes in 2022. If you go back a year ago, we had significant increased volume related to the vegetable category in particular, as we were supporting not only our customers as they were really having the first opportunity to restock the supply chain for canned vegetable products when product went into the ground in 2021. We also sold a significant amount of cans to the balance of the industry, so others in the industry, other customers, et cetera, and we knew that volume would be coming out as we came into 2022. Actually, as we've talked, you know, that's some of the benefit. Quite a bit of our benefit in Metal Containers this year is that we've been able to reset kind of our volume across the footprint that we had pre-pandemic. You know, in the third quarter alone, we were 13% above pre-pandemic levels from a volume perspective. You overlay that 13% volume back into our very efficient platform that we had pre-pandemic, that's where a lot of the improvement comes from in the segment. Really for us, Mark, to answer your question, no surprise from a volume standpoint. I think we talk about pet food again and say that, you know, we came into the year thinking there would be normal growth in pet food, and our customers have had some challenges in commercializing their capacity investments. You know, that sets up well for us for 2023. That's the only issue that I would kind of raise as outside of expectations in 2022. Okay. Just two other real quick ones. One, there's been a lot of talk about inventory reduction efforts across the economy. I'm just curious about the impact of that on your business. With travel activity picking up significantly, is that helping portions of the dispensing business, particularly things like fragrances and cosmetics that, you know, move heavily through things like duty-free stores? Sure. Great questions. You know, when you think about the inventory correction, you know, broadly speaking, across the markets, you know, we did talk about that a bit in the last quarterly call. It does impact our dispensing specialty closure segment and our custom container segment. As you think about, you know, I think the specific item we talked about last time was kind of home care and lawn and garden products. Think about trigger sprayers, et cetera, for our dispensing specialty closure segment. Those were caught up in the retail inventory correction. We had, I think, given guidance that as, you know, those corrections should be flowing through by the end of the year, and we're sort of on track for that. Volumes for us related to the inventory correction were roughly in line with our expectations. When you get to travel and increased travel, not only in North America, but on a global basis, we are seeing you know, greater activity, obviously, in kind of the duty-free retail chain through the international airports. What I'd tell you, Mark, is you know, that's beauty and fragrance for us, which has been incredibly strong all year long. I think it's more than just the travel component. That's us working very closely with our customers, really at the outset of the pandemic, trying to find new ways for them to reach their end customers, the consumer, with our sampler platforms in beauty and fragrance and just other means of getting product in front of customers that weren't necessarily obligated to travel and be in one of those duty-free stores. We've seen significant growth in the category from that. It's also a benefit that folks are traveling again, and we are seeing increased activity at the retail channel in the duty-free stores. Okay. That's helpful. I'll turn it over. Thanks, Adam. Thanks, Mark. Your next question comes from the line of George Staphos with Bank of America. Your line is now open. Hi, everyone. Good morning. Thanks for the details. Hey, Adam, I wanted to peer into or under the hood, I guess, on metal and margins for the third quarter. I think earlier in the year, you said you expected a good pack. We know comparisons were difficult. Margins were actually, for what it is worth, you know, a bit better than we were expecting and north of 10%. Can you help us understand how you got, you know, very good margins, very strong EBIT dollars despite, you know, at least on appearance, a large drop in volume? And then how did that drop in volume sort of correlate to, I think, what your expectation was for a good pack? Related, was there anything that we should be aware of in terms of timing, you know, pack in the third quarter extending into fourth quarter or pulled forward into third quarter from fourth quarter? Great questions, George. I'll maybe start at the end and work my way back through that. So you're right. Typically, when we talk about the pack, we talk about, you know, the back half of the year because the pack is such a significant portion of our back half volume, and that can move at times between Q3 and Q4. So what I would tell you is the Q3 pack actually yields were good throughout the pack. Our products, you know, think of West Coast tomatoes, think of upper Midwest, core vegetables, think of kind of Eastern and Central European, core vegetables as well, you know, really had a very good Q3. So a good pack in Q3. Yields were solid. Tomatoes for us are mostly irrigated, so water was not an issue. We had planned for a reduction in the pack, just per my comments that I made earlier, just given the restocking that happened in 2021. With those higher yields that we were getting, what ultimately happened, George Staphos, is that we had a little more volume in Q3 related to the pack, and then the pack ended primarily in Q3. We'll have a little bit of the ancillary pack in Q4, but not nearly what we would traditionally have. We're still gonna call it a good pack. It's just, it was really completed in Q3, and we'll have, you know, some of the outlier crops that come through in Q4. Again, back to that drop in volume, I tell you really from a veg standpoint, it was right in line with what we were thinking. You think about our prior commentary. We had so much inefficiency and additional cost in our system last year as we were trying to support the market and trying to support our customers and ultimately consumers getting low cost, you know, food into consumers' pantries and into their kitchens that we had, you know, I'll give you a great example of making cans in California, George, and shipping them to the Midwest. You know, it just, it's not something that you would normally do. You've got additional freight, you've got additional warehousing. We've eliminated essentially all of those costs, and our team should get a ton of credit here because they did it earlier in the year than we thought we would. What I'll tell you is that 13% volume growth versus pre-pandemic levels in Q3, I'll just repeat, drop that into a very efficient operating platform that we had pre-pandemic, and you understand, I hope, that, you know, there is a significant margin absorption that you get on that incremental volume. George, I might just add to that this is sort of the continuation, if you will, that you're seeing in the Metal Containers business that we saw last quarter come through the Dispensing and Specialty Closures business, right? It's taking all of that incremental cost and inefficiency that we experienced last year. Remember, we called out, you know, on consecutive quarters what those headwinds were for the quarter. We're now sort of getting past that and re-level setting the system back to its most efficient point, and it's allowing us to take all that cost out of the system and continuing to get more and more efficient with our inventories, where we're taking all that warehousing and handling and outbound freight out of the system. You know, the added benefit on top of what you're seeing in the margin drop through is we think that we'll be kind of fully recovered on all that cost overrun that we saw last year by the time we exit 2022. We'll be sitting with an inventory level that is right sized for the business on a go-forward basis. We're not sitting here with excess inventory that's at high levels. Bob, on that latter point, is that what you're getting at in the release on the food inventory management, program that you've got going underway? Is there something else there that we should be sort of recognizing for next year? That's exactly it. It's all about the work that the teams have been doing to make sure that we get back to our core base where we can really be most efficient with the operations. Okay. My last question, I'll turn it over. Thanks for the time. You make the comment about the outlook for 2023 directionally. Volume growth, it sounds like you expect earnings growth across your segments, and you ultimately expect to convert that into, you know, I think you said significant free cash flow. I guess why the statement now as opposed to waiting till fourth quarter when you're guiding? Is there something you're trying to advise us of? In particular, you know, aside from. Well, if you had to stack rank your outlook directionally, not that we know necessarily what you're gonna, what you're thinking in terms of earnings for next year. Is it volume? Is it productivity? Is it positive price cost? What are the drivers recognizing it's all of the above? What are the priorities and what's gonna drive you to that improved outlook for next year? Thanks, guys, and good luck in the quarter. Great. I think Bob and I will both chime in on the answer here, George. A couple things. Number one, I think really we've been giving you know the coming year guidance roughly in the third quarter for the last several years. We're just trying to give you know at least our preliminary thoughts. We're very early in our business plan process, so we don't have all the details, but we've kind of got the directional kind of trajectory for each of our businesses. You know I think you know what I would say, and I'll turn it over to Bob, is you know we think about unit volumes for next year. You know there's really nothing that's changed from our perspective. You know, you think about Dispensing and Specialty Closures, that's gonna be, call it 4% volume growth next year. That's gonna be a big driver for us. You think about Metal Containers, and that's gonna be low single digit volume growth. Again, that's a lot of what we talked about. It's gonna be another good pack next year. Nothing extraordinary, just a normal good pack. We've seen nice growth in soup, and we're assuming that the soup market, you know, has a reasonable performance next year. Then continued growth in pet food. Then as we get to Custom Containers from a volume perspective, we continue to believe that we will deliver something to the tune of low single digit kind of volume growth in Custom Containers. There is one item that we're continuing to now cycle through, that includes the inventory correction that we've talked about for the back half of 2021. In addition to that, we've chosen to not renew one of our larger contracts in the Custom Containers segment. It's a significant investment was required to renew that contract and for that contract renewal, and that investment did not meet our return thresholds. You know, given the improvements that we've made in our Custom Containers segment and the many other investment opportunities that we have that do meet our investment criteria, we elected to maintain our disciplined approach, and we're going to allocate that capital to other opportunities that do meet the investment criteria. Within Custom Containers, we have new business wins that will ultimately offset this volume decline associated with this particular piece of business. The timing of that will be a little lumpy, as we've kind of always talked in Custom Containers, and that will be commercialized, call it, mid- to late-year in 2023. All of that being said, we believe low single digit and certainly that run rate as we exit 2023. Yeah. George, I'll maybe put a couple of finer points on that. One, just to the timing of why now other than we have more recently been sort of trying to give folks a heads up earlier than maybe we had typically done. I think that's maybe even more importantly so given the dynamic environment that we're in. I think if you take what Adam just said, that probably gets us to something like a mid-single digit growth in organic operating profit, if you will. I think as we look at some of the other components, which we don't exactly have line of sight on right now, but right now you'd say that pension is probably a headwind, as we look forward. I'll point out that we are over-funded in our pension plan, so there is no cash obligation. Quite frankly, we think we'll be at a funded status that it's unlikely that we will ever have a funding requirement to the plan. We have done some things to de-risk that plan, and we'll continue to evaluate other opportunities to further de-risk the plan. That does sit out there as a headwind as we see it now, and we won't know exactly what that looks like until we get to see what the final discount rate and returns are. Interest also likely to be a headwind for next year. That's, you know, probably gonna be something to the tune of $0.15 on a year-over-year basis. That's largely rate-based, slightly offset by lower outstanding borrowings and a bit of an FX benefit in a perverse kind of way. Using a forward curve rate, our average rate for the year is projected to be about 4.2%, and that's up from about 3.3% in the prior year. If you think about that sort of translates to variable rate debt in the high fives kinda range. Tax, given our earnings profile and no assumed tax law changes, I'd expect the rate to be reasonably consistent with where we've been. You know, as you pointed out, free cash flow, I think we're looking for a pretty sizable improvement. Obviously, we've got to get through final budgets around working capital and CapEx. I do think that up against the backdrop of improved profitability from operations, partially offset by interest in taxes, you know, we think we can get to a number that's meaningfully higher than what we're forecasting right now. Guys, thanks for all that time and all that color, and thanks for the reminder too on the third quarter, sort of pre-outlook. I'll turn it over. Your next question comes from the line of Adam Josephson with KeyBank. Your line is now open. Thanks. Good morning, everyone. Hope you're well. Adam, just to put a bow on the volume questions for this year. I think on the last call you said you expected organic volumes to be slightly down in closures and custom containers and then down, I think, mid-single in food cans. Has any of that changed from three months ago, or are your volume expectations for the full year just about the same as they had been? For Dispensing and Specialty Closures and Custom Containers, I'd say roughly they're in line with where we thought we would be. I think for Metal Containers, you know, we had projected, Adam, that our pet food customers would have gotten their capacity, you know, up and running that they've invested and installed sometime in, you know, the middle part of the back half of the year. Unfortunately, that hasn't happened yet. You know, that's the one item that I think would change. We're now projecting pet food as flat, essentially, for the year versus providing growth. That's the one that I would give you an update on that will push that year-over-year comp for Metal Containers just a little bit further down versus what we had guided before. Yeah, Adam, the only other one that- Yes, sir. Go ahead. The only other one that changed relative to our initial guidance is the volumes that we have coming out of Russia. Obviously with everything that's going on and the sanctions there, we are operating at a much lower level than what we had anticipated early on. That's probably worth a couple of points of volume growth that we originally forecasted that we're now not getting. Got it. Just to be clear, so for Metal Containers in total for the year, are you assuming down high single digit as much as 10%-ish? Adam, I think a high single digit is probably the right number, yes. Okay. No, I appreciate that. One other clarification question before I go on to something else, Bob, is just the pension, the likely pension drag that is below the line. In other words, it's not part of the up, mid-single organic EBIT growth expectation for next year, right? I just wanna clarify that. Our segment income includes the pension. That, you know, it is not included in when I say that we think the businesses will grow. That'll be offset by the pension. Again, I do wanna be very clear that that is a non-cash item, right? It's just sort of actuarial and accounting stuff that happens there. The businesses will be at mid-single before whatever pension drag you'll experience. That's correct. Partially offset that up mid-single, and then interest will be higher. FX may be a little bit of a drag, but even with those drags, you would still expect up earnings next year. That's right. Got it. Okay. Adam, just on the volume commentary for next year, I think you said DSC up four-ish next year. It's clearly not the most economically sensitive business that we cover in paper packaging. There is nonetheless some economic sensitivity to it, obviously. How confident are you putting that number out there, just given the obvious economic backdrop in which you're operating? Yeah, maybe I'll try to answer that with a little bit of perspective across Silgan as a whole. Just you know, remember 75% of our sales do fall into kind of consumer staple categories that are just essentially more defensive in nature versus discretionary. While we do have some discretionary items in dispensing, especially closures to your point, you know, we feel like we've got a pretty good line of sight now to what our customers' business plans look like for 2023 and what that would mean for us as their supply partners. Again, Adam, you know the Silgan business model very well, that you know, we have you know, many requirements contracts throughout all of the Silgan businesses. I also think, you know, we talk about the pre-buy impact for Metal Containers, you know, quite a bit. There was a significant pre-buy in our Dispensing and Specialty Closures segment for our food and beverage business and metal closures as well. That will normalize in 2023. You know, I'll sit here and say we've got a really good degree of confidence that that 4% kind of growth number is one that we're going to deliver. I really appreciate that. Then just one last one for Bob, which is on leverage capital allocation. Any change in your thinking in terms of optimal leverage ratio right now given where interest rates are, given the economy, et cetera? Yeah, look, like we think we're in a good spot. We will be, you know, kind of, you know, sub 3 by the time we get to year-end here with a pretty good increase in cash flow looking into next year. There's pretty good direct line of sight to getting to the low end of the range in the next, call it, 12-15 months from where we are right now. That given with, you know, given the fixed portion of our debt structure, we're feeling okay about that. You know, obviously it is a little bit of an earnings headwind, but I think we think it's manageable. I think we're very comfortable with the leverage. Don't necessarily see a path to changing that as we sit here today. Now, obviously, significant changes to rates from here will have to be evaluated, but where we are today, it feels okay, and particularly with the free cash flow profile of the business. You know, I think as it relates to capital allocation, you know, it's hard to sort of weave your way through what that's gonna bring, at least in the near term, because I think from an M&A perspective, there's been a lot of deals that have either not come to market or been pulled from market. You really don't know what valuations look like just yet. But I think as things do loosen up, and I think that there will be some loosening in the M&A market as we move into next year, whether it's early next year or mid-year, who knows? I think there's a lot of capital that's out there and a lot of people that are gonna wanna sell some businesses. I think we'll certainly have the appetite to look. I think there's plenty of things that we would find as attractive parts of our portfolio. You know, if those things if and when those come to market, we'll certainly actively engage in looking at them. We'll have to, you know, as we always do, run it across our discipline model and decide whether or not it makes sense. You know, we have the luxury of being patient. If those things don't fit, then we can either continue to let leverage drip down, or we could think about a return of capital. Really not much has changed about the strategy, other than making sure that we look at the right things and we maintain the right discipline. Thanks so much, Bob. Your next question comes from the line of Anthony Pettinari with Citi. Your line is now open. Good morning. You talked about business wins in Custom Containers. Is there anything you can say about sort of the end markets and the mix for the business that you're picking up and maybe if you're letting go of some business? Any investment required to meet the business wins that you call out? Sure. Good question, Anthony. You know, the new business wins, and there are multiple that we have that'll be commercialized in 2023, really are more focused on kind of the food and a bit of the beverage market that we serve in our Custom Containers segment. It does require capital. It fits right into existing facilities that have a core competency or an expertise in not only the type of equipment that will be installed, but also in the resins that we'll be handling to manufacture those products. Feel really good about that. Also facilities where we've had recent investment and commercialization of new business wins over the course of the last several years as well. Have confidence the team will continue to execute and deliver as we expect. The item that we chose not to renew is a larger personal care item. Really not a whole lot more to say than that. Just you know, we've found other opportunities to allocate our capital dollars that meet our investment criteria. Got it. That's very helpful. You know, when we look at your full year guidance, you know, it's higher than the initial guidance that you gave at the beginning of the year, despite what seems like a slowing economy, especially for a lot of discretionary items. Just wondering, when you look back on the year, you know, where do you think your real area of relative outperformance was? In terms of getting to the higher or lower end of the current full year guide, you know, understanding it's a relatively narrow range. You know, what are the biggest swing factors that could maybe get you to the high end or the low end? Yeah, look, I think the biggest win as you described it relative to the initial guidance is I think the teams have collectively done a great job and gotten to a lot of that inefficiency much faster than we anticipated. I think coming into the year, we sort of had line of sight that we were gonna attack it. The teams did a really good job of getting to it faster and even a little more so in terms of size and quantum in the year. That's probably the biggest win that sits there. In terms of risks from here, look, I think supply chain still sits out there as one. I think it gets, you know, less significant relative to the fourth quarter than it was to the broader part of the year. FX is probably largely built in, so I don't see that as much of a risk unless, you know, something draconian happens. That's kind of it, you know, unless something really falls apart that we're not aware of right now. Yeah, we do have a little bit of resin benefit built into Q4 given the, you know, resin prices have been declining. We'll see what happens with resin prices through the quarter. I think the only other thing I would add to that, Bob, is maybe, you know, just customers working capital year-end, you know, targets, right? It would potentially affect our volumes. We don't see anything today. Sure. It's been a challenging year for a lot of our customers as well with all the inflation that they've experienced through the course of the year and that we've passed through as well. You know, we're working closely with them. Don't anticipate anything right now, but you know, there's still quite a bit of time left in the quarter to work through. Okay. That's very helpful. I'll turn it over. Your next question comes from Wells Fargo Securities. Your line is now open. Morning, Adam, Bob. Gabe here. Good morning. Just two quick ones on the raw material front. Typically around this time, you're kind of in the throes, I guess, of talking about tin plate steel for next year. Any preliminary views and kind of piggybacking off of the last question or your response to Adam in terms of potential for customers to monkey around with inventories, either pre-buy or delay purchases in advance of maybe a decline in tin plate? Just any thoughts or input there? Yeah, it's a really good question. You know, look, if you go back a year ago with that, you know, essentially doubling of tin plate prices for our customers, you know, that drove a lot of activity in Q4 of the prior year. As we kinda look forward into 2023, you know, really what's interesting, Gabe, is that, you know, as we've talked for a long time, tin plate is a specialty product for the larger steel manufacturers. You know, it's really in a market to itself versus what's going on in broader steel with hot rolled and cold rolled steel that you kind of see in The Wall Street Journal and indices that are out there. You know, we've got a large supplier in North America that's announced a closure of a facility on the West Coast that, you know, is a meaningful supplier to our business that's gonna ultimately be exited in 2024. We feel good about the supply of product this year. Again, if you go back a year ago, it was all about, are we all gonna be able to get enough raw materials to support our customers? We have a really good degree of confidence that we're going to have the raw materials this year. The conversation has changed much more to price. As we sit here today, again, with that kind of capacity that's gonna be coming out of the market, certainly in North America and then the balance of kind of the global dynamics, we're really thinking there's not deflation coming our way, as far as tinplate. You know, we're thinking steel prices are rolling over, or in some cases we're gonna see some increases. Not anything close to what we saw in 2022, you know, kind of low single digit increases are what are being proposed in certain geographies. Again, we're early in the process, as you know, and we always talk about, we fight for our customers every day and in doing our very best to lower the inflationary impacts on the package of a metal container because we do think it's the best, lowest cost, most efficient means of getting, you know, food and product to consumers. Gabe, as we sit here today, I think, you know, flattish kind of pricing for steel and for metal containers is the right idea. Appreciate that. Just one quick one to the extent that maybe you've got some feedback of the commercial chain in terms of competitive behavior dynamics, you know, with a falling raw material environment, at least on the resin side. Anything that you would call out, positive or negative on that? I would suspect most folks are still trying to recover some of these. What I would characterize as stickier input costs, labor, facility costs, insurance, things like that. Just curious how that's going. Yeah, I think you're right. I think all of us in the market are trying to make sure that we've got those cost recovery mechanisms correctly in place. You know, I don't see a lot of new activity in the market regarding, you know, potentially lower costs going forward. Certainly, you know, the item that we talked about in Custom Containers is really not about any of those items. That's just more about, you know, the return on investment that we require all of our businesses to deliver. You know, I would say no change really to commercial activity or competitive activity. I think that goes across all of the business segments that we operate in. Understood. Thank you, and good luck. Thanks. Your next question comes from the line of Ghansham Panjabi with Baird. Your line is now open. Thank you. Good morning, everybody. I guess for my first question, you know, just give us a bit more color, if you could, on the margin improvement in Dispensing and Specialty Closures that you saw in 3Q. And also as you step back broadly, I mean, this business, you know, is on track to well exceed its previous high-water mark. What do you think structurally has changed in that business apart from some of the portfolio moves you've made to drive consistency in terms of that margin expansion dynamic? Well, sure. I think, you know, when you think about Q3 margins, Ghansham, I mean, one thing, you know, we have worked really hard like a lot of other folks have all year long recovering that inflation that we've experienced. The one benefit that we have in Q3 is resin, you know, was finally kind of a benefit to the bottom line as we had those lagged pass-throughs that we've been talking about for the last couple of years as well. Really, that was the biggest driver. I mean, you have a good mix of products, you know, when you think about more dispensers versus, you know, products for, you know, the traditional Silgan markets of food and beverage. Margins were good during the quarter and, you know, we think there's a lot of work that's gone into that. As far as, you know, just kind of where we are historically, you know, we've been really focused on this segment. We've been, you know, allocating quite a bit of capital to this segment to continue to grow it out, not only from an organic volume perspective and revenue perspective, but those investments have been at higher margin levels as well. You know, we think that's flowing through and hitting the bottom line. We're very pleased with where we sit right now with Dispensing and Specialty Closures. Gotcha. For my second question, you know, just given the stress on the consumer at this point, with inflation and so on, you know, some of the larger CPGs have been calling out, pushing value packs, just given the decrease in affordability. Have you started seeing that in any portions of your business at this point? I would think you're very advantaged, you know, in context of that dynamic, but would just love to hear your thoughts on that. Yeah, I mean, certainly, you know, I think you can read just about any earnings transcript from a CPG, and it does talk about lower volume, higher price. I think part of that is exactly what you're talking about, more the value pack, maybe a smaller amount of product sold for a similar price kind of thing. We haven't seen it actually take hold yet for many of our products. What I would tell you is we're ready for that conversation because I think what we've proven through the pandemic is our teams are able to very effectively execute a transition to an alternative format for any of our customers. You know, our ability to commercialize and launch new products, I think was fantastic through the pandemic, and we continue to have success with these new business wins across each of our segments. We're ready for that conversation. It's probably early for some of the products that we actually sell to the market. Again, I think, you know, we've talked about, you know, most of our products are multi-use or, you know, a very sustainable kind of solution. We were a little bit on the other side of that conversation as we were looking for the value pack, putting more product into a single pack versus the opposite. Thanks so much, Adam. Sure. Your next question comes from the line of Arun Viswanathan with RBC Capital Markets. Your line is now open. Great. Thanks for taking my question. Yeah, a couple for me. First off, just along the lines of the last question, have you also pivoted the business maybe to changing consumer preferences? Just wondering how much of your business maybe is in private label across the three segments, if that's material at this point? Good question. You know, what I would tell you is we feel like we've got good representation, not only at branded, but also with private label. I think the retail data room would tell you that there is a bit of a move right now going to private label. We see that not only in North America, but also in Europe. For our Dispensing and Specialty Closures group, again, fair representation between branded and private label. Metal Containers, I would say it's you know, we're probably more aligned with branded products because private label is actually a smaller component of that market. But we're fairly represented in private label, and same thing for Custom Containers. It's a pretty good balance across the board between branded and private label. We are seeing it. We are benefiting from that as our representation is pretty fair across the board. Another question on closures. I know that you guys have, you know, gotten into the smaller portion bottles in fragrance as well. What's the outlook there? I mean, you're going into a holiday season here. Are you guys pretty excited about that? Is there any inventory that you'd have to build? Maybe you can just talk a little bit about that market. Thanks. Sure. You know, specific to the fragrance market, I think we've touched on beauty and fragrance for some time. You know, we are really very well represented at kind of the prestige and luxury end of that marketplace, which really does hold up very well through really any economic cycle that we go through. As we sit here today, and I know we mentioned this on the last call as well, we have really good line of sight with our fragrance customers through probably mid of next year. They are all planning and have been planning for significant volume throughout the holiday season in 2022. Then what's happening for 2023, Arun, is they have delayed new product launches through the pandemic. 2023 is going to be a year of a higher level of new product launches across that kind of luxury and prestige portfolio of fragrance and beauty products. We are staged, you know, for the first half of the year to make those transitions and have those new products be launched. Then we'll see how those products do in the market next year. Really there is a really good line of sight for call it the next nine months of demand. Our capacity utilization will be incredibly high through that entire period of time. Just last one. So you noted definitely a significant working capital headwind this year. What does that kind of look like when you kind of combined some of the resin inflation and then, you know, maybe some of the extra template or inventory that you had to build? I mean, what do you think kind of comes back to you next year, you know, from a working capital standpoint? Yeah. If you look at working capital 2022 versus 2021, there was a pretty significant negative drag, right? Because, one, 2021 had a reduction in working capital, more significant than 2022's drag. I think we'll get some of, if you look at the balance sheet, that delta is that year-over-year difference. I think there is an opportunity as we look forward to bring some cash out of working capital. Assuming that right now the underlying assumptions around what's gonna happen with raws hold, then I think there's opportunity on the working capital line. We'll wait and see what happens as we get through those negotiations. I would put it more on the positive side than the negative side right now. Thanks. Your next question comes from the line of Kyle White with Deutsche Bank. Your line is now open. Hey, good morning. Thanks for taking the question. On Metal Containers, you know, food cans have obviously been viewed as recession resilient, but your mix has moved more to pet food. Just curious if you see the same performance in pet food during a recessionary environment as human food, or is there potential risk that consumers might move more to dry food for their pet? Yes. Thanks, Kyle. It's a good question. We have also mentioned that a couple of times I think in the past too. I would say, you know, for the markets we serve and wet pet food and canned food, really you're talking about small dogs and small cats. You know, typically what we see is not a whole lot of movement out of the wet category into dry for, again, small dogs and cats. I think if you think about the product that's in the larger cans for larger dogs, that does typically have pressure that moves to kibble or to dry pet food. I think as we sit here now, again, with flattish volumes this year with all the challenges we've talked about, you know, there are significant stock outs as we sit here today across the country, in the US at least, where wet pet food is not on the store shelf because the customers, our customers are not able to get enough product through the system. The demand has remained very high throughout the course of the year, and there is a replenishment that's going to have to happen really late this year, early next year. We're just gonna see how that plays out. The demand has remained very strong to this point. Yeah, Kyle, I think what I would add to that just as sort of evidence to the point is if you looked back at what happened in kind of 2008, 2009, right, where our pet food customer distribution was much more to the larger size and which was really for larger dogs, we did see a little bit of reversion away from the can to dry through that cycle, and then it kind of rebounded. If you look at the mix of our customers today and the pets that they're serving, they are much more oriented to smaller animals because that's where all the growth has been. Many households that as larger pets pass, they're replacing those pets with smaller pets, more pets being adopted largely on the smaller side. A little bit of a misnomer there. Anyway, at the end of the day, we think that same phenomenon will not recur, certainly not at the level that it did back then. We think in large part, pet food will react very much, the way it has consistently, over the last couple of years. Got it. Then sticking with this category, you know, you've talked about supply chain issues impacting your customers throughout this year. I'm just wondering when you think that gets resolved and how much volume is actually being impacted that you could get potentially next year. Then a two-part question here on pet food. You know, do you see any opportunities for continued organic growth in the space beyond just underlying growth in your existing markets? Obviously, you have a key customer in this space that's been making investments as well as investments internationally and just curious about how you view, you know, potential international growth with key customers in that space. Sure. I think it. You know, the supply chain issues that really have been pretty prevalent across our customers, certainly in pet food. You know, as I said, Kyle, I think, you know, we had anticipated that those issues would have been mitigated by now, kind of call it, you know, late in the third quarter. They just haven't. You know, it's ongoing labor challenges. It's ongoing raw material challenges from other packaging supply. We're anticipating those get resolved by the end of the year. They're just going to have to. We're now offering, you know, our expertise to try to help solve some of those issues, and working very closely with our customers. As far as, you know, new categories maybe outside of pet food. You know, we've got some new product launches that we've initiated, you know, through our Metal Containers segment, that we are encouraged by the initial results. You know, nothing to probably talk about yet on this call and nothing that's gonna move the needle per se in the very short term. We've got some really interesting things that are incredibly sustainable packages working with our customers for the future of the business. More to come on that at a future time when it's a little more appropriate to talk about it. Then we have grown with our large multinational pet food customers in other geographies around the world specific to Europe. We are growing in Europe, and we'll continue to grow in Europe in pet food. You know, it's a core market there for Silgan, just as it is in the U.S. Got it. Thank you. I'll turn it over. Your next question comes from the line of Daniel Rizzo with Jefferies. Your line is now open. Thank you, and thank you for fitting me in. Just a quick question on soup. I don't know if I missed it today, but it's something that was mentioned in the past as being kind of a drag within a tailwind, and I was wondering where it's kind of settling out at this point. Hey, Dan. Actually, soup was a really good performer in Q3. I wanna say soup was up something like, you know, high single-digit% versus prior year. As we've talked before about soup, one of the really interesting things that we had been seeing in the soup market pre-pandemic is there was a recovery that was taking place in soup volumes pre-pandemic, and we were very encouraged by that. Then the pandemic happened, and soup volumes increased dramatically as most of our product lines did. Soup volume's been very resilient. We believe and our customers believe that through the pandemic they were able to reach new consumers, and the repurchase rates for, particularly for soup products that are ingredients for broader meals, is incredibly high and sort of significantly better than the repurchase rates that we've seen for those products for quite some time. You know, their marketing campaigns, they've spent a lot of money trying to reach new customers, and we're seeing the benefits of that. You know, we're feeling very good about where soup is trending, continuing to trend as we move beyond the pandemic. All right. Thanks. Thanks a lot. Sure. Your next question comes from the line of Michael Roxland with Truist Securities. Your line is now open. Thanks, Adam, Bob, Kim. Congrats on a good quarter. Thank you. Just one quick question for Bob. Bob, can you mention the proportion of fixed debt versus variable that you have? It flexes a little bit because of the borrowings that we have on the revolver relative to the pack season or the seasonality of our fruit and veg pack. At year-end, we'd probably be something that looks like 70/30 fixed to floating. During the year, we're probably a little more kinda somewhere in the low 60s fixed. Got it. Thank you for that. And then just, Adam, you know, regarding the pack, you mentioned that tomatoes on the West Coast had been good. Irrigation doesn't seem to be a problem, at least for your customers. However, it does look like the drought in California has worsened. Maybe while, you know, there was low impact on this year's pack, it could affect next year's pack as farmers may decide to pass on planting tomatoes given the overall lack of irrigation. You know, even in cases where farmers, if they are able to plant, you know, the yields have been negatively impacted as per the USDA. I think. Looking at USDA data, they were estimating that California fields would produce about 12 million tons of tomatoes at the beginning of the year, and they dropped it to about 10.5 million tons in August. Just would love to get your thoughts about the pack impacts from the drought and what you're hearing from your customers as to, I guess, you know, the upcoming pack. Mike, you know, as we think about tomatoes on the West Coast, there's a couple things. One, you know, I actually agree with your numbers on the West Coast pack, or the acreage and tonnage of tomatoes for 2022. Remember, canned tomatoes are a small percentage of that total volume, and they're premium products. They are selected for the most part in the growing season because they are the premium products that go into cans. We've always said really the fringe of the tomato pack really impacts more the tomato paste, the ketchup markets, the salsa markets, et cetera, versus the canned tomato market. You know, when there's 16,000 tons of tomatoes that are processed on the West Coast, we pretty much get the same amount of canned tomatoes. Whether it's 12 or 16 doesn't really influence the canned tomato volumes for us. Then, you know, the irrigation of our fields and crops for tomatoes, you know, that all gets allocated at the beginning of the pack to your point. You know, our customers got all the water that they required this year for the acreage that they had planted. They anticipate the same for next year, and we're going through kind of all those conversations now as they're planning for 2023. Again, that 2023 pack will be protected. The certain amount of allocation to canned food will go to canned food for tomatoes. You know, I think we're expecting, they are expecting a normal pack next year and not a whole lot of change to it for the canned side of tomato, regardless of what happens with the broader tomato crops on the West Coast. Got it. Thank you for the explanation. Good luck in the balance of the year. Thanks. Your next question comes from the line of Adam Josephson with KeyBank. Your line is now open. Thanks so much for taking my call. Just one question, Adam, which is, I think you were talking earlier about requirements based contracts in the context of demand next year. I just, my ears perked up because some of your canned peers have also talked about requirements based contracts, but have turned out to have little to no visibility into what demand was going to be. It just seems like you have much more confidence or visibility into what next year is likely to bring demand-wise. I'm just wondering how you would characterize your level of visibility, 'cause in a requirements based contract, the customer may tell you one thing, but if their business falls off a cliff, then you're not gonna get business from them. Can you just kind of explain that concept to me? Sure. You know, I mean, maybe we'll focus on the Metal Containers segment to try to answer that question. You know, really, I think it's our unique business model that we have at Silgan, what I keep calling a kind of a best in class, you know, commercial partnership with our customers. Adam, as you know, you know, many of our facilities are either co-located or near sites with our customers. Yeah. We sit in a lot of their production planning meetings. We are working together to make sure we both have as much information and as much visibility about the forward look for the demand cycles that both of us can have in that partnership. I feel like we've got a tremendous dialogue that's ongoing with our customers, and I give our commercial teams credit as well because they're asking the hard questions. You know, we're spending a lot of time throughout various levels of our customer organizations understanding the drivers and on both the positive and negative side for their businesses. Then we're trying to help solve problems. We're trying to solve for a better outcome for both companies at the end of the day. You know, it's truly a partnership. I think that's a word that gets overused quite a bit in today's business relationships, but just the very nature of what we do and how we do it's a partnership with our customers. When we have requirements contracts, we take that obligation very seriously. In fairness, our customers do as well. They feel the obligation to make sure those communication channels are open and flowing and contain good and you know valuable information on both sides of the equation. Yeah. No, thanks. Just one follow-up to that, which is, I think George touched on this earlier, but I think last year was the first time that you gave a look on the third quarter call for the following year, and then you've continued that this year. Correct me if I'm wrong along those lines. If I'm remembering correctly, is there something, I guess, have you changed your thought process in terms of what to communicate, information about next year? Like, what what precipitated that exactly? Is this something that you plan on continuing in future years for whatever reason? I'll go back and look at my notes too, Adam, but I feel like we've been doing this for several years in Q3, giving the kind of preliminary look. We've gone through the first round of- Okay of business cycle planning with each of our businesses at this point. We do have a preliminary look. I do think it's important that we share that information with all of you folks and our investors as we're talking about how we're planning for next year, really, and what we're thinking about. I think our information might be better as we sit in late October in 2022 than it was in late October of call it 2015. I think our teams are doing a better job of getting a forward look and communicating that message to us, and we're therefore sharing that message with you folks as well. We feel good about the business. Yeah. We want to make sure that comes through. We've got pretty good line of sight and feel we should communicate that. That's very helpful. Thanks a lot, Adam. Best of luck. Thanks, Adam. This concludes today's question- and- answer session. I now turn the call back to Adam Greenlee. Thanks, Emma, and thanks everyone for joining today and for your interest in the company. Look forward to reviewing our full year 2022 results in late January of next year. Thank you. This concludes today's conference call. Thank you for attending. You may now disconnect.