Good morning, ladies and gentlemen. Welcome to the Silgan Holdings fourth quarter 2022 earnings conference call. At this time, all participants are in a listen-only mode, and please be advised that this call is being recorded. After the speakers' prepared remarks, there will be a question-and-answer session. If you would like to ask a question during this time, just press star one on your telephone keypad. If you would like to withdraw your question, press star one again. Now at this time, I'll turn things over to Ms. Kim Ulmer, Senior Vice President, Finance and Treasurer. Please go ahead, ma'am. Thank you. Joining me from the company today are Adam Greenlee, President and CEO; Bob Lewis, EVP and CFO; and Alex Hutter, Vice President of Investor Relations. 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. 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. Welcome everyone to Silgan's fourth quarter and full year 2022 earnings call. On the call today, we'll review the highlights of our full year performance and provide details around our fourth quarter results and our outlook for continued growth in 2023. 2022 was another exceptional year for Silgan, posting our sixth consecutive year of record sales and delivering yet another year of record double-digit growth in adjusted EPS as the momentum we've built in the business continues to show in our results. I'm incredibly proud of the entire Silgan team and the accomplishments that we've achieved together, proving that through a variety of economic environments, Silgan remains a steadfast partner to our customers, employees, and shareholders. Day in and day out, our teams prove that our founding principles of competing and winning in the marketplace by being the best at what we do continues to translate into meaningful value creation for all of our stakeholders. Our ongoing and unwavering focus yielded significant adjusted earnings growth in 2022 despite difficult volume comparisons as our business overcame known challenges from the prior year pre-buy activity ahead of significant raw material inflation, ongoing supply chain disruptions, and customer and retail inventory destocking throughout the year. In combination with our outstanding operational performance, our long-term contractual arrangements and focused discipline of passing through inflationary costs helped our business to grow adjusted earnings in a period of unprecedented inflation in raw materials, labor, energy, and other costs. A few highlights we delivered in 2022 are as follows: record sales of $6.4 billion, up 13% versus the prior year. Record adjusted earnings per diluted share of $3.98, which increased 17% versus the record prior year. Free cash flow of $368 million while continuing to make investments in future growth opportunities. Finally, record revenue, volume, and segment income in our high-margin Dispensing and Specialty Closures business. As we exit 2022 with unit volumes well ahead of pre-pandemic levels and our businesses executing at an exceptionally high level, we remain confident in our ability to build on our momentum in 2023 and beyond. More specifically, as we look to 2023, we believe the business will continue to drive at least mid-single-digit improvement in total adjusted segment income organically, which will be partially offset by higher interest expense due to higher interest rates expected in 2023. In addition, and as outlined in the press release, beginning in 2023, we have adjusted the prior year periods for pension income and the amortization of acquired intangibles. From a segment perspective, we expect our Dispensing and Specialty Closures segment to produce high single-digit adjusted segment income growth driven by mid-single-digit volume growth and improved mix, including double-digit volume growth in our higher value dispensing products. In our Metal Containers segment, we see low single-digit volume and low to mid-single digit adjusted segment income growth in 2023, primarily as the result of mid-single digit volume growth in our pet food markets, which represent roughly half of our total volume in the segment and continued operational improvements in the business. In our Custom Containers segment, we expect adjusted segment income to grow in the low single digits with low single-digit volume growth as volume trends are expected to improve throughout the year as we continue to cycle over a previously discussed decision to not renew a long-term piece of business and to replace that volume with new higher-margin contractual business later in the year. We're excited about what the future has in store for Silgan and the opportunity to continue to showcase the unique nature and continued success of our business in 2023 and beyond. With that, Bob will take you through the specifics of our financial results for the quarter and provide additional color around our earnings estimates for 2023. Thank you, Adam. Good morning, everyone. As Adam highlighted, the business continues to execute at a high level, delivering record fourth quarter and full-year sales and adjusted earnings per share. Our businesses did an outstanding job managing through a complex volume backdrop, ongoing supply chain disruptions, and significant cost inflation. This is a testament to our contractual pass-throughs, cost recovery discipline, and endless pursuit of operational excellence to mitigate inflation. Net sales for the fourth quarter of 2022 were $1.46 billion, up $16 million or just over 1% versus the prior year, as net organic revenue growth was partially offset by unfavorable foreign currency of approximately $39 million. Our organic growth was driven by favorable price mix resulting from inflationary cost pass-throughs, which more than offset expected volume declines in each of our segments. Total segment income for the quarter of 81 million declined on a year-over-year basis, primarily as a result of rationalization charges of $67 million in the fourth quarter of 2022. During the quarter, we recorded a restructuring charge of 74 million to write down assets which were used to service the Russian market, as we will no longer produce the limited humanitarian products sold in 2022 for this market. Highlights of our segment income for the quarter are as follows. Our Dispensing and Specialty Closures segment income increased from the prior year, driven by strong pricing and cost recovery disciplines and better operating performance. These benefits more than offset a foreign currency headwind of approximately 3 million and an 8% volume decline. The volume decline in the quarter was primarily the result of lower demand for steel closures in the food and beverage end markets as compared to the prior year period, which benefited from pre-buy activity ahead of significant steel inflation in 2022. Our Metal Containers segment decreased from the prior year as a result of $66 million of rationalization charges in the quarter. Excluding the impact of rationalization charges, segment income increased 28% versus the prior year, with strong operating efficiency as a result of lower volumes, which allowed us to better utilize our footprint and more efficiently manage our inventory levels. These benefits, combined with inflationary cost recovery, more than overcame a 13% volume decline. The decline in volumes in the quarter was primarily due to difficult volume comparisons from the pre-buy activity in the prior year quarter, ahead of approximately 80% steel inflation in 2022. Segment income in our Custom Containers segment decreased as a result of an expected 11% decline in volumes, overshadowing improvements in price pass-through and cost recovery. As we previously discussed, the decline in volumes in the quarter was primarily the result of not renewing a customer contract that did not meet our reinvestment return hurdles, as well as the delayed recovery in lawn and garden, home, and personal care products. The decision not to renew the expiring contract will continue to have an unfavorable impact on volumes through the first half of 2023, as we expect to commercialize new business awards later in the year. Turning to the outlook for 2023. As we leverage the momentum of delivering six consecutive years of record adjusted earnings, we are expecting further growth in 2023 as we estimate adjusted earnings per diluted share for 2023 in the range of 3.95-4.15. To align our external reporting more closely with the internal metrics by which we manage our businesses, we are excluding the impact of U.S. pension income and amortization of acquired intangible assets from our definition of adjusted segment income and adjusted earnings per diluted share. Our domestic pension plans ended 2022 at approximately 130% funded and are closed to new participants. We have elected to deploy a liability-driven investment portfolio, which we believe will satisfy the cash requirements of the plan. As to the amortization of acquired intangibles, our view is this is a non-cash expense that is not reflective of the ongoing performance of the acquired businesses. This will align us on a comparison basis with our peers. For comparative purposes, a reconciliation of prior periods to remove these adjustments has been posted to our website on the investor relations section. We expect total adjusted segment income to increase by mid to high single digits in 2023 as compared to the prior year. The midpoint of our range of adjusted earnings per share represents a year-over-year increase of $0.04 per share, which includes full year interest expense of approximately 155 million, a year-over-year headwind of 0.20 per share, and a tax rate of between 24% and 25%. These estimates exclude the impact from certain adjustments as outlined in Table B of our press release. Based on our current earnings outlook for 2023, we are providing an estimate of free cash flow of approximately 425 million in 2023, a 16% increase from 2022 as earnings growth and lower use of cash for working capital as compared to 2022 is partially offset by higher CapEx, which we expect to be approximately $250 million in 2023 as we invest alongside our core and new customers. Turning to our outlook for the first quarter of 2023, we are providing an estimate of adjusted earnings in the range of 0.75-0.85 per diluted share, as compared to adjusted net income per diluted share of 0.79 in the prior year period. Included in the first quarter of 2023 estimate is incremental interest expense of approximately 0.05 per share as a result of higher interest rates, while the first quarter of 2022 included approximately 0.01 per share from earnings from our Russian operations. adjusted segment income and Dispensing and Specialty Closures is expected to be flat as a benefit in the first quarter of 2022 from the lag pass-through of resin price declines in the prior year is not expected to repeat. We anticipate higher adjusted segment income in our Metal Containers business as a result of the negative impact in the first quarter of 2022 from the customer pre-buy activities during the fourth quarter of 2021. We also expect slightly lower volumes in adjusted segment income in the Custom Containers business as a result of the previously discussed exit of a customer that did not meet return hurdles. Volumes in this segment are expected to improve throughout the year. That concludes our prepared comments, and we're happy to open the call for questions. I'd like to ask everyone to limit your questions to one question and one follow-up, and if time allows, we'll take further questions from the queue. Bill, I'll finally turn it back to you to give directions for the Q&A. Thank you, Mr. Lewis. Ladies and gentlemen, at this time, any questions, please press star one. If, again, if you would like to withdraw your question, you can press star one a subsequent time. We'll take our first question this morning from Adam Josephson of KeyBanc. Thanks. Thanks everyone. Good morning. Good to talk to you. Adam, can you help me with the Closures volume performance in the fourth quarter? I know a year ago, you called out the impact of the pre-buy in the Metal Containers business from rising tinplate costs. I don't think you said anything about Closures along similar lines, but then you mentioned it this quarter as having been a very difficult comparison versus last year. Were you expecting your Closures lines to be down as much as they were? Can you just talk about that segment's performance, both in terms of volume and profitability compared to what your expectations were and how that might affect your outlook for 23? Okay, sure. Good morning, Adam. A couple things. Morning. We did expect the pre-buy to have a negative impact just like it had in our Metal Containers business. On our Dispensing and Specialty Closures segment, as a reminder, you know, included within that segment is our kind of, you know, longtime legacy Silgan closures business that really supports the food and beverage industry, combination of metal closures and plastic closures in that business. We did anticipate that. What I'd tell you, Adam, is that, you know, as we sit here and look at the pre-buy impact, you know, it accounted for about 95% of the shortfall from a volume perspective in the quarter for Dispensing and Specialty Closures segment. It was food and beverage. Primarily, it's metal closures that go on glass jars that we've typically supplied for many years. No real surprise for us. You know, I think from a profit standpoint, you know, we had a good quarter. You know, we were really overcoming the volume shortfalls within the quarter, again, with good operating performance as we had. Resin was slightly favorable. We expected that. You know, in my words, Adam, I'd say the quarter for DSC was really roughly just in line with expectations that we had. Okay. Got it, Adam. Thank you. Bob, I know we're the ones who come up with the consensus earnings estimate for 2023, not you, but when I'm trying to compare your guidance to the estimate that was out there, obviously versus three months ago, interest expense is 0.05 higher than what you and we were expecting. Then you chose to exclude amortization of intangibles and pension income or expense, which added, I think, 0.03 to last year's earnings. All else equal, consensus, I guess, should have been $0.03 higher in 2023 as a, as a consequence. Can you help me reconcile your guidance to what you think consensus was or was expecting, et cetera, if you catch my drift? Yeah. I think you basically have it right. The two adjustments that we made for very different reasons, obviously, but they basically offset. If you think about where consensus would have been, it's roughly in line with what we're suggesting now. There's really no more broader detail to that than those two main points. It's really just that interest went up by 0.05, and that's pretty much it from your vantage point. That's right. As interest rates. Okay ... continue to affect the later part of the year. Got it. Thank you, Bob. Thank you. We go next now to Ghansham Panjabi at Baird. Hey, guys. Good morning. Thanks for fitting me in. I guess first off, on the destocking question, Adam, I mean, you know, so many end market verticals have called out destocking, you know, all the way from the retail channel all the way down. You yourself have experienced that to some extent. What's your best guess in terms of where we are relative to with inventories relative to sort of the end market demand of the consumer uptake, if you will? Yeah, sure. It's a great question. you know, I think maybe I'll go back to Q4 and give you some insight there. Just, you know, what we saw through Q4 was really a pretty good early part of Q4, October, November. That was, I'll just say, both in our North American markets and in Europe as well. What we saw also at the end of Q4 was that our large CPG customers essentially sort of shut down the last couple weeks. A little bit unexpected for us, but that was a bit of the volume shortfall for the quarter as well as sort of the abrupt end of the year. I think the better news is that we were also seeing some good signs of recovery in some of the markets and product lines that have been challenged due to the destocking effort, a little bit earlier in the year. Most importantly, Ghansham, I'd tell you that January has started on a pretty strong note for us and all those same customers. We are seeing recovery. You know, we've talked about trigger sprayers and on this call, the last, I think, two calls. We've seen almost a full recovery in Europe at this point, which typically is a precursor to what happens in North America for many of our product lines. you know, we're feeling better about the recovery of the destocking than we were, I think, as we entered the last call, and we've certainly seen more positive signs from our customers. We're having a really good start to the year so far here in January. Okay, terrific. That's very helpful. In terms of the inflation dynamics that you've been experiencing, maybe just lay out for us, you know, what your embedded assumptions are for the big substrates that you're exposed to. Also on the variable cost side with transportation, et cetera, what are you seeing at this point in real-time? Sure. You know, I guess we'll start with steel first, that affects a couple of our segments. You know, look, as Bob mentioned in the prepared remarks, we passed through approximately 80% tinplate increase onto the market. It does appear that our customers were able to successfully pass that through at retail and to their customers. As we turn the page to 2023, you know, we do see, you know, stability in the prices of tinplate right now, so, you know, probably not a whole lot of change as we sit here in 2023. I think there's some capacity availability challenges for the supply side of tinplate. I'll remind you, we are the largest tinplate buyer in the world and feel like we've got good relationships and partnerships with our supply base, that we're going to get the tinplate that we need in the geographies in which we need it. Sure. Moving over to resin, you know, as we go forward, there's a very small benefit in resin built into our Q1 guidance. You know, for the most part, I would tell you, as volatile as resin has been, over the course of the last couple years, it looks like there's stability in the price forecast going forward. We'll see what happens here. You know, as we typically do, Ghansham, we take the changes, you know, that we've got that are known right now for Q1, and we basically hold that rate for the balance of the year. You know, I think there are times where we've been conservative with that outlook. I think this year, based upon the forecast, it seems to be about right. Your other question, just kind of moving to some of the other categories like freight. We are seeing, again, some increased freight costs. You know, I think the fuel surcharges have been down. Rates and availability of freight have been challenging, certainly the last couple years. I don't know that that's seen kind of the relief valve of some of that pressure that we've seen in other categories. I think we'll still experience inflation to some degree, not nearly to the extent that we had over really the course of the last 18 months. As I think you all know and understand, most of our contractual agreements allow for the pass-through of that inflation onto the market. A lot there, Ghansham. I hope that answered all your questions. Yeah, it does. Thank you so much. Sure. Thank you. We go next now to George Staphos at Bank of America. Hi, everyone. Good morning. Thanks for all the details. I wanted to talk about the importance on two factors to your guidance relative to DSC and custom containers. Can you size for us. That'll be my two questions. Can you size for us how important that new business you're onboarding in custom containers is for the fourth quarter and for your overall guidance for the year? What are the, sort of key things we need to be evaluating and that you'll need to tell us about that will mean that the business comes on, the earnings come on as expected or not? Relatedly, what are the risk factors there? Same thing with DSC. With a very, very strong growth outlook this year that you're looking for, recognizing we're done with destocking, what are the key risks in your view that we should be mindful of and checking back with you on in terms of that volume, that earnings, that incremental margin showing up this year as you expect for DSC? Thank you, guys, and good luck in the quarter. Okay, George. Maybe we'll start with Custom Containers and the new business wins. You know, really, the impact for 2023 is relatively small from a profit standpoint. Obviously, the volume kicks in, we'll call it Q4. The good news is, you know, we're moving forward with, you know, getting capital spend in place and we'll work to commercialize those products, call it late in Q3, early Q4. It is more about the run rate as we exit 2023 and then enter 2024 with those new business wins. I think we'll be talking about them as we go through the year on the earnings call just to give an update on where we stand regarding those commercializations. I think that's the right way to think about Custom Containers. On Dispensing and Specialty Closures, you know, there's a couple things. One, we don't have any pre-buy activity in our metal closure segment, so we'll have a normal year in that portion of our business. We see continued strength in fragrance and beauty, and I think in the last one or two calls here for the earnings call, we had talked about our order book. We talked about our visibility. The reality is our customers had a really good holiday season and therefore a really good product launch, new product launch season here as we begin 2023. Our clarity into that order book has gone further into 2023 than we had on the last call. We're thinking 2023 really is a strong year again for fragrance and beauty. We're engaged with our customers, talking about incremental capacity adds, as we typically do at this point. We're bullish on fragrance and beauty and really what it's going to deliver to the course of 2023. I think general risk, you know, we're not expecting a massive recovery in lawn and garden that's going to impact either Dispensing and Specialty Closures or Custom Closures. I don't think that risk is built into our budget as we think about the year. I think just broadly, you know, economic conditions that are out there, we'll see how that impacts consumers. I continue to say the power of the Silgan portfolio of products tends to do really well regardless of the economic circumstances. Maybe different products do better in a poor economy versus a booming economy. Bottom line is we still continue to perform regardless of what that circumstance seems to be. Thanks, Adam. Very clear. I'll turn it over. Thanks, George. Thank you. The next now to Gabe Hajde at Wells Fargo. Good morning, Adam, Bob. Hey, Gabe. Wanted to dig in a little bit. Your voice inflected, Adam Greenlee, when you, when you talked about DSC and the potential into 2023, specifically calling out, I think the fragrance dispensers or the dispensing specifically being a low double-digit. I guess maybe piggybacking off of George's question, is there something specifically that maybe you're doing with your customers, that you've seen success with? I mean, you know, George asked about risks. Is there upside potential that you might get from China reopening and more so about China consumer mobility and travel as it relates to duty-free? Just any thoughts there would be helpful. Sure. I won't take the risk of repeating myself from what I said, I apologize for the bad connection there. you know, what we're doing in the market specifically, Gabe, on Dispensing and Specialty Closures, again, we've got a really strong team focused on that market, focused on areas of growth and delivering new products, new innovations to our customers that are allowing them to then take those products to market and grow their business. We're the beneficiaries of that, right? Long as our, you know, premium and luxury fragrance and beauty product lines, as long as we keep providing new products to those customers that allow them to win in the marketplace, we benefit from that. We've seen that now for several years in our Dispensing and Specialty Closures segment. We feel really good about it. I think if I broke up, you know, Gabe, I'd tell you we are in conversations to add capacity with our customers to support their growth in those markets. We continue to feel very good about the prospects for future growth, and 2023 looks to be a really good year with, I'll say, limited downside risk based upon our conversations with our customers for volume specific to fragrance and beauty. As we think about China, there's a couple things. One, China, Asia broadly is relatively small for Silgan, always has been and probably will be to some extent. As we sit here and think about, you know, a more mobile consumer in those parts of the world, again, fragrance and beauty, there is an element of fragrance and beauty that goes through our kind of duty-free international airport locations. The more people are moving around, frankly, the better that will be for the product lines that we're talking about. I think it will be good. Likely you'll get an outsized. Well, you won't get an outsized benefit from Silgan related to the broader Chinese reopening. You know, it'll be a bit impactful for travelers. For the market itself, you know, we don't see a big impact for our business. Okay. No, the inflection comment was actually, it sounded like you were a little bit more increased conviction and optimism on the business. Sorry, yeah. from your opening remarks. Yeah, all good. My tone, not my connection. The second one. Got it. Yeah, no. Bob, or Adam, talk about just sort of what you're seeing across the M and A landscape, that's been obviously in Silgan's DNA for a long time, just in terms of assets coming to the market or expectations for sellers, et cetera, with rising interest rates and how that is evolving. Yeah, look, I think there's a lot to that point, right? I mean, we're coming through the year end being, you know, kind of right where we expected we would be from a leverage standpoint. We'll be kind of right around the 3x leverage mark with improving Free Cash Flow going into next year, up to the, you know, to a level above what we delivered in 2022. That's probably just under another half a turn of deleveraging, that'll put us back, you know, kind of to the lower end of our range. I think the capital markets continue to evolve. Still higher rates than maybe we've seen over the last decade or so, continuing to evolve. I think as we talked about on the last call, there was, you know, a bit of a pause in M and A opportunities coming to market, as they sort of just wanted to get through year-end and see where the markets were heading. I think what we're seeing in early part of the year that there's a lot of activity that's started to generate of businesses wanting to come to market. We'll see how that ultimately plays out, but that's encouraging because there are certainly a few that we would have interest in. I think we're well positioned to take advantage of that on two fronts. you know, not only is our leverage in the right spot, but we've got, you know, a fair bit of available capacity on our revolver that puts us in a pretty good competitive position against other potential buyers of assets that we could move quickly and with some surety. That's, that's obviously, favorable as well. We'll see where that all goes. You know, the fact that we've got the, you know, most recent round of acquisitions fully integrated, we feel like we've got management bandwidth across our businesses to be able to integrate something new if and when we find it. You know, it's the same playbook really. It's, you know, been a core competency and one we think we have and will continue to generate good value and good returns for shareholders. Hopefully we get some opportunities here in during the year. Appreciate it. Good luck. Thank you. Thank you. We go next now to Anthony Pettinari at Citi. Hi, this is actually Bryan Burgmeier sitting in for Anthony. Thanks for taking the question. just following up on Ghansham's question on inflation, do you expect your PPI pass-throughs in Metal Containers will meet or exceed the level of cost inflation you're forecasting for 2023? Can you remind us when those pass-throughs typically reset? Sure. good morning, Bryan. first of all, you know, we do have inflation that we are continuing to experience in 2023. It'll probably be no surprise that the level of that inflation is going to be less than what we experienced in 2022. given the lagged nature of that portion of our pass-through mechanism, you'll be passing through last year's inflation this year against a lower experienced inflation in 2023. That should be a slight benefit for us. you know, I don't think we get into the specific details of when those pass-throughs hit. They vary by contract, and they are throughout the course of the year. They run for 12 months from the implementation date. Yeah. I would add to that across the contracts, it's not one particular metric. I mean, we speak to it as a PPI like, but the metrics do vary contract to contract. Adam's point is the right one, is that the pass-through, you know, given the fact that we've got relatively lesser inflation on a year-over-year basis should be some benefit to the year, or is some benefit to the year. Got it. Thanks for the detail. Just one last one. You know, it looks like 2022 CapEx came in a bit lighter than expected. Did you decide to push out or walk away from any projects? 2023 CapEx, are there any growth or productivity related projects that you'd like to highlight? Yeah. The CapEx came in a little bit lighter, really more to do with the timing of payments to vendors than actual projects. We feel like we're adequately investing in the right opportunities at the right time. you know, I think as we think about that from the free cash flow, you know, there's some noise in the overall number, but up in total because you had less CapEx and more interest expense that we were carrying through the year. Overall, a really good free cash flow generation. Then as we look forward to the CapEx in next year, it's up a bit largely because of some of these new opportunities really across the business, but primarily in the Custom Containers business, which we just talked about, as well as some good opportunities in the Dispensing and Specialty Closures business. We feel like we're adequately investing for the right opportunities with the right customers. Got it. Thanks a lot. I'll turn it over. Thank you. We go next now to Kyle White at Deutsche Bank. Hey, good morning. Thanks for taking the question. I want to go back to dispensing in the beauty and fragrance markets in terms of the growth rates that you called out. Are you seeing any differences between mass or prestige markets in beauty in terms of the growth rates for 2023? You know, seeing any trade downs from consumers going away from prestige to mass or anything that you would call out? Really, no, we haven't seen that. Our presence is much more in the prestige and luxury, we're just seeing continued high demand in that segment of the market. You know, again, great relationships with our customers, a very intimate relationship, and I think that they are clearly seeing additional growth opportunities. What I'd tell you, Kyle, is, you know, through the pandemic, new product launches were relatively limited, we're now just now getting to the point where the new product launches are hitting the market, and they've been very well received through the holiday season. We're feeling, again, really good about our volume as we go forward in the prestige area of the business without a whole lot of trade down that we can see into the mass market. Got it. On Metal Containers, you guys have called out some supply chain issues impacting commercialization of new product within, I believe pet food at the customer level. Is that mostly resolved as we go into 2023? Relatedly, how are you thinking about your footprint within the metal food can in the U.S.? Any room for optimization, or are you content with what you have? Sure. I'll take the second part first, we're always thinking about that footprint. You know, what we typically say is for every two plants that we have in our Metal Containers business, you know, we've closed one through the course of time. You know, that relentless focus on driving cost out of that business is critical to our success, and that's just part of our DNA. We're always looking at that. We don't have anything to talk about on this call at this point, but it's something that is very much a focus of what we do each and every day. Then, the supply chain challenges that our customers experienced in 2022. Again, our investments to support their growth we made, we were able to commercialize on time. Early in the year, there were ingredient problems for our customers. All of those have now been resolved. There's protein available, there's other packaging products available as well, to ship additional products into the market. Really, what we got to towards the latter half of the year, Q4, were labor availability challenges. I tell you, for the most part, those are getting resolved as we start the year. We still have a couple of minor instances here or there across a broad set of customers. There was a lot of investment that went into the pet food category and filling additional product. For the most part, we're seeing the progress that we wanted to see, and it is part of our growth assumption for 2023 that, you know, roughly in the early part of the year here, the rest of that gets figured out at our customers. Sounds good. Turn it over. Thank you. To the next now to Arun Viswanathan at RBC Capital Markets. Great. Thanks for taking my question. I guess maybe I wanted to start with some of the comments you made about returns not meeting your return threshold from certain contracts. Does that just happen from time to time, or what's the thrust of that? Is it maybe some of your customers also dealing with a lot of inflation and not being able to, you know, pass that on? Or maybe you can just provide a little bit more detail on that. Yeah. Arun, it does happen from time to time, particularly as contracts, you know, age out and maybe, you know, volume trajectory changes a bit. You know, the competitive landscape has something to do with that relative to what assets may be available in the marketplace versus, you know, a customer that wants to have new assets put in place. There's a lot of different reasons for why that happens. I think what you're seeing here is just sort of the overall Silgan discipline, in that we're cognizant of that. We're making sure that we're maintaining, particularly in that business, right? We went back a long way to recover that business and say, "Look, we need to get the return profile to a point where that business can make money." We've actually done better than what we anticipated or what goal we set. This is just staying the course with that and making sure that we're not doing anything that's detrimental to the overall profitability of that business and the long-term returns. Okay. Thanks for that. On a similar note, you know, it sounded like there was still some macro challenges, you know, maybe some volume, you know, destocking that's pretty much run its course, but still some potential risks. Would you say that the customer activity has migrated to now a little bit more promotional activity to move volumes? Is that something that we could potentially look forward to? How does that affect, you know, your kind of decision-making on some of these projects? I'm just curious if promotional activity has picked up, if your customers are now feeling a little bit better given that inflation has kind of moderated just a touch, and maybe we can see some extra volume come through promotions. Well, I think, you know, maybe we should just talk about that by business segment, because I think the answers will vary by segment. You know, certainly in Dispensing and Specialty Closures, promotion is part of the answer for those prestige and luxury fragrance and beauty products. We are seeing greater promotion. We understand greater promotion will continue in those particular markets. Maybe I would jump over to the Metal Containers business and say we have seen more promotion in soup, and we believe it's working for whatever that's worth. I think, you know, pet food, you're going to see more promotion in pet food in a variety of different formats. I think in fits and starts, yes, there's more promotional activity. It's where I think volume growth is coming from as well. They're trying to leverage that volume growth and turn it into an even greater set of volume for the business. I think our customers are feeling better, broadly speaking, about where we are and where our products collectively sit in the marketplace for consumers as we turn the page to 2023. Just lastly, if I could, just on the M and A front, maybe you can just discuss maybe, some of your priorities, if you do have any. You know, maybe does the Russia exit provide you with any, you know, extra capital to potentially deploy into that area? How should we think about M and A here going forward? Thanks. Look, I think, you know, as I mentioned before, M and A is a core part of the strategy. It's where a lot of our growth over a longer period of time comes from. We'll continue to remain active. I don't think it's any secret that the Dispensing and Specialty Closures side of the business is kind of the tip of the spear of where we would like to continue to invest. We're also not afraid to look for opportunities to strengthen other parts of our business as well. I think if we could draw up the playbook, it would be oriented towards the dispensing side. The withdrawal from Russia really doesn't have any bearing on our ability or our desire to allocate capital across the rest of the business. It remains part of the core competency. That part of the business is just a victim of circumstance, and we'll deal with it, and we'll get on with running the broader business. Thanks. We'll go next now to Daniel Rizzo at Jefferies. Hi guys. Thank you for taking my question. I know you're a different company now, but can you just for historical purposes, tell us what happened with volumes during the 2008 and 2009 recession. Were you largely unaffected or was it kind of a different time, different thing? Yeah, I think that the main impact, at least the one that got talked about the most was on food can volumes in that time frame. Essentially what you saw was volumes hold pretty steady across both, you know, in the downturn and in the recovery for very different reasons, right? You saw, as an example, during the downturn, sort of fruit and vegetable, it really improved, as you might expect as people sort of hunkered down and ate at home more often. Likewise, at that particular point in time, the pet food market, which was a different pet population, if you will, the more broadly larger pets, and that converted away from wet pet food to dry. As the recovery happened, there was a reversion. Through both periods, volumes were pretty steady. The mix changed, if you will. I think what's different this go around is the fact that there has been such a change in pet ownership and pet population that it is far more dependent on the wet pet food market and less likely to see a meaningful change away from what the pets are eating and how people are treating the pets. I would expect that the food can business will continue to do well. I'm sorry for a dumb question. Does it mean people have smaller dogs now? Is that what we're kinda saying? More of them as well. Yes, the pets in the household have trended to the smaller size and there's more of them as a consequence of smaller pets being more manageable in the house. The wet pet food category, Dan, is both small dogs and cats and the cat population has continued to grow over recent years as well. Okay. You mentioned I think 80% pass through for metal costs or Metal Containers. Have you ever said what resin, how much of resin was passed through? Did I miss it or something? Generally, we pass through resin, on a lagged basis. It varies by resin type and by business. You know, at its longest it's probably 60 days in terms of the lag pass through and in many cases much shorter than that. To be clear, we do pass through the cost changes of resin to the market as well. You know, I think if you go back to our Dispensing and Specialty Closures segment, you know, it was a large negative roughly in 2021 if memory serves me correct. We basically recovered that negative through the course of 2022 and now are anticipating relatively stable prices for resin as we move forward into 2023. That's right. Thank you very much guys. We'll go next now to Jeff Zekauskas at JP Morgan. Thanks very much. Different pet associations are talking about how people can't afford their pets now, that, you know, a third of pet owners are worried that the pet is putting too much of a strain on their income. The number of pets in shelters has really risen both in the United States and in Europe. Is the cat food market that you're in higher end so that it's sheltered from some of these trends or do you not see these trends? That is, do you see more stress on the pet owner that may affect can demand or you don't? A couple things there, Jeff. I think first of all, you know, we don't see that stress through the markets that we serve. Yep I think Bob really highlighted a very good point about the mix of business that we had call it back in 2008 or 2009. I think large pets do have the pressure that you're talking about. The consumption of product just by the sheer nature of the size of the pet is much greater and I do think you see a trade down to dry. I'll also say, you know, a 40 pound bag of dry pet food is quite expensive. When you look at the products that we manufacture and the markets that we serve and that kind of small dog and cat wet pet food population, you know, we don't see a trade down. We don't see that same level of stress that you're describing. Again, we talk a lot about the Silgan customer service model and our customer intimacy. We spend a lot of time talking to and with our customers about the specifics of the markets that we collectively serve, you know, we are not feeling that pressure in dealing with our customers having that dialogue. Yeah, Jeff, I would take that a step further and just remind you that we're not speculating on the market, right? We're making investments where our customers are making investments and we're doing that with commitments from those customers. You know, we feel like we're pretty well aligned with what is happening in their markets and where their markets are going. Okay. For my follow-up, is it fair to say that your EBIT growth, in 2023 will really be a function of your volume growth, and that the price raw material spread really won't make so much of a difference to the EBIT change? I think that's right. you know, there are no acquisition timing issues. What you're seeing is really what we've been talking about, right? I mean, I think we stood and delivered in 2022. We talked a lot about the dynamics of each of our segments and the growth profiles of each of our segments, then delivered it in 2022. It rolls right forward to 2023. You're seeing the kind of power of the portfolio in each of our individual operating segments delivering growth in their own way for 2023. I think you've got it right, Jeff. Okay. Good. Thank you so much. We'll take a follow-up question now from George Staphos of Bank of America. Hi, everyone. Thanks for taking the follow on. I'm guessing the answer will be no, there's no change. It's a box-checking exercise here. Given that there's been changes in the landscape of other players in the North American Metal Containers sector, are you seeing any change in the level of competitive activity, you know, bids, things like that we should be mindful of? You know, knowing that it's not 2024 yet, can you size for us a couple things? One, how big was that customer care win that you're going to get at the end of this year on an annualized basis in terms of what it might mean for 2024? As we now are in the next, sort of phase, are you done with your big contract renewals in Metal Containers for the next several years? Thank you, guys, and good luck in the quarter. Maybe Bob and I will ham and egg through that for you, George. For competitive activity, a good question. I think you're right with the answer, too. Really no change. You know, as a reminder, you know, so much of our business is under long-term contract that we're not necessarily out in the market bidding on new opportunities each and every day. We win and we grow when we pass competitive advantage to our customers in that market, and they go win in the markets that they serve. No great shakes there. As far as our, you know, contractual renewals in the Metal Containers business, you know, we always have a couple here and there. you know, nothing that I can think of off the top of my head as we sit here for 2024, that's significant. Again, you understand our business model as well, that, you know, we're always in conversations with our customers about investing in new capacity for their growth, et cetera. you know, we reserve the right to maintain those conversations. I would say, George, just to remind you that with 90-plus% of our business under some form of long-term contract, there's always something that's coming for renewal. There's nothing that's out of the ordinary, nor is it a large block of business. You know, we've had these periods where we have the conversation that we've renewed a significant piece of our business, and it's had a meaningful price step down. Yeah. We don't have any of that coming at us in the near term. That's what I was getting at. This is more ordinary course that's out in front of us. Yeah. Understood. Custom, how big might that be someday? There's a couple of large contractual pieces of business. I think, George, you should think about them in kind of the range of 8 million-10 million of revenue, spend it for each of those opportunities. Call it two opportunities that we'll be commercializing in that range. Got it. Thank you so much. Thank you. We'll take a follow-up question now from, excuse me, Gabe Hajde at Wells Fargo. Yep. George, actually, I wanted to ask about the Metal Containers renewal. It's been covered. Thank you, guys. Okay. Thanks, Gabe. Thank you. We go next now to Adam Josephson at KeyBank. Yeah. Thanks, everyone. To Jeff's question earlier, by the way, I certainly hope you're doing your part to support national pet ownership. Bob, in terms of working capital. I promise you we are, Adam. Fancy Feast. That's right. Bob, on working capital, you're expecting improvement there. Can you flesh out roughly how big a source of cash you expect that to be? Is it coming from lower inventories, lower receivables? Any impact on payables? Well, so what we're really looking at is a smaller use on a year-over-year basis. It's a bit of a benefit. Given where inflation is and we anticipate it to go, it's not like we're liquidating a lot of working capital. We've just got a lesser use as we move year-over-year. Basically, if you think about where the Free Cash Flow generation is coming from, it's essentially the improvement in earnings, a little bit less of a use of working capital, and the elimination of the payment for the European Commission that was made, offset by, you know, the slightly higher CapEx is how you get to the broad bridge for working capital change- Got it. For the cash application. Right. There are no components of working capital that you're expecting to be major sources or uses, it sounds like, just a modest use on an absolute basis. Yeah. Nothing, nothing out of the ordinary. Okay. Adam, you know, just to put a bow around all the comments you've provided, you know, your guidance range for this year, the range is 5%, which is entirely consistent with what it's been in previous years. Obviously, many people have concerns about the global economy, those don't seem to be manifest in any wider range for you than normal. 'Cause I ask because some other companies have provided much wider ranges than usual given the tremendous uncertainty that seems to exist. Do you have any less confidence just in the outlook than you've had in previous years, given the state of the economy? I assume the answer is no, just hoping you could address that anyway. Sure. Maybe I'll start with the last piece. No, you're right. The answer is no. We actually have more confidence, I think, as we sit here heading into 2023 than we had heading into 2022 because of all the uncertainty that we were facing. Adam, we did have a lot of debate around this table and with our team about what that range should be. Ultimately, it's kind of the last point. We said that we think there's, you know, less volatility and less risk than what we came into 2022 with. We think that, you know, we've got pretty good insight into the depths of our business and, you know, we should be providing that level of insight to the market. There was discussion of a change, but ultimately, we all agreed and decided that it was the appropriate thing to leave the range exactly where it was. No, that, I appreciate. If there is a particular source of uncertainty for you, is it about around inflation? Is it demand? Is there anything? Is it the pack? It's January, you probably don't know much of anything about the pack. Is there any particular source of uncertainty that you would call out or not really? Well, I think, you know, look, the destocking situation that affected both Dispensing and Specialty Closures and Custom Containers, that will resolve itself at some point, right? We think we've got really good signals that that is resolving literally as we speak. If that gets delayed for any reason or for whatever reason, that would be a little bit of risk, Adam. That's probably the biggest one in dispensing and then over in custom. I think the food can business you've got right. I think that is more about the pack. remember, you know, 2021 was the year that the supply chain got replenished for Mm-hmm. We were up significantly and expected a normal pack in 22, which we got. The pack ended in Q3, which was a little earlier than what we expected, but that was fine for us. We are anticipating a good pack this year. You know, there's always the normal risk around the pack, but it's not like the year is dependent upon pack volumes. It's just the one item that, you know, does have some play into, you know, the absolute volume numbers at the end of the pack. Terrific. Thanks so much, Adam. Best of luck. Thank you. Thank you. It appears we have no further questions today. Adam Greenlee, I'll hand things back to you for any closing comments. Great. Thank you, Bo, and appreciate everyone's interest in Silgan, and we'll look forward to discussing the first quarter results in late April. Thank you. Thank you again, ladies and gentlemen. Thank you for joining Silgan Holdings' fourth quarter earnings conference call. I'd like to thank you all so much again for joining us and wish you all a great remainder of your day. Thank you.