Good morning, and welcome to Graphic Packaging Holding Company's conference call to discuss our fourth quarter and full year 2019 results. Speaking on the call will be Mike Doss, the company's President and CEO; and Steve Scherger, Executive Vice President and CFO.

To help you follow along with today's call, we have provided a slide presentation, which can be accessed on the Investors section of our website at www.graphicpkg.com.I would like to remind everyone that statements of our expectations, plans, estimates and beliefs regarding future performance and events constitute forward-looking statements. Such statements are based on currently available information and are subject to various risks and uncertainties that could cause actual results to differ materially from the company's present expectations.Information regarding these risks and uncertainties is contained in the company's periodic filings with the Securities and Exchange Commission.

Undue reliance should not be placed on forward-looking statements, as such statements speak only as of the date on which they are made and the company undertakes no obligation to update such statements, except as required by law.Mike, I'll turn it over to you.

Thank you, Melanie. Good morning and thank you for joining us to discuss our fourth quarter and full year 2019 results.

I'm pleased with where we finished the year, having delivered on or exceeded the targets we established on our fourth quarter 2018 results call. We drove profitability improvement in 2019, primarily by our pricing actions and productivity initiatives.

Our EBITDA and cash flow performance met our raised targets for the year and we created shareholder value by executing well and effectively allocating capital.Importantly, our strategic initiatives are positioning us to achieve the growth and return goals we established in our September at our Investor Day with Vision 2025. In 2019, we achieved many milestones that position us for the next several years.

We fully integrated the SBS mill and foodservice assets, successfully achieving run rate synergies of $75 million at year-end. The Letica acquisition increased our mill to converting integration and we see continued opportunities to increase integration rates and improve profitability across our SBS and foodservice [Technical Difficulty].In 2019, we announced and made strategic investments in our integrated CRB platform that will further strengthen our position in the marketplace.

The CRB transformational investment in Kalamazoo is underway and on track for an early 2022 start-up. Our CRB platform will significantly benefit from scale, state-of-the-art automation and technology.

We expect to generate $100 million in annualized EBITDA improvement upon the full ramp by the end of 2022.In addition, during the year, we successfully completed the Artistic Carton acquisition, which expanded our market participation in growing segments. Our CUK production in 2019 outpaced the industry and we achieved full year volume growth over 2%, driven by strong global demand for CUK and beverage packaging.[Technical Difficulty] Europe to accelerate, driven by sustainability-supported growth of paperboard multipack beverage solution, as a substitute for other forms of [Technical Difficulty].

Orders for our proprietary KeelClip solution continue to meet the expectations we published with Vision 2025. Our investments in the Monroe facility in the U.S.

and our Sneek facility in Europe fully support the organic volume growth trajectory we see for the beverage packaging solutions in CUK paperboard for the next several years.Turning to the fourth quarter, we reported solid operating financial results with volume up 2.6% and net volume up 0.7% on a year-over-year basis. Adjusted EBITDA of $259 million improved $11 million from fourth quarter 2018 and was in line with our expectations.

Adjusted EBITDA margin of 17% improved 60 basis points from the same period a year ago.Net organic volume growth, while positive 20 basis points was below our 100 basis point growth target for the fourth quarter as a significant customer conversion to our paperboard solution was delayed by one quarter. The conversion was fully ramped at year-end.We continue to expect 100 to 200 basis points of sustainability supported net organic volume growth in 2020, as a result of multiple conversions to paperboard solutions already committed to by our customers.The fourth quarter benefited from continued positive pricing of $25 million with our pricing to commodity input cost relationship a favorable $31 million as we experienced net commodity deflation of $6 million during the quarter.For the full year 2019, financial results met our raised expectations.

Net sales of $6.2 billion grew 2.2% driven by $131 million in pricing and $50 million in volume mix primarily from acquisitions. Full year adjusted EBITDA of $1.03 billion increased $59 million or 6.1% from the prior year and was driven by a $98 million positive price to commodity input cost relationship and $74 million in improved performance.2019 adjusted EBITDA margin of 16.7% improved from 16.1% in 2018.

We generated significant cash flow during the year with $528 million in adjusted cash flow, an increase of $59 million from 2018. Steve will discuss our financial results in greater detail during his prepared remarks.Moving now to operational trends in the quarter, our mills and converting assets ran well during the quarter and for the full year.

We successfully executed on multiple large scale capital investments including the Texarkana recovery boiler and the final ramp of the large Monroe converting facility.We are positioned well to service new volume opportunities in 2020 and beyond. We will continue to provide customers with the highest service and quality levels consistent with their expectations.For the fourth quarter of 2019, the AF&PA reported operating rates of 97% for CRB and 92% for SBS.

Graphic Packaging CUK operating rate remains above 95%. Backlogs remain healthy at 5-plus weeks for CUK and balanced at three to four weeks for CRB and SBS.Shifting to performance, we achieved $74 million of operating performance in 2019.

This solid improvement in productivity was partially offset by $36 million in incremental incentive and pension expense. Our continued emphasis on improvement initiatives operating cost efficiencies, benefits from capital investments and synergy achievement drove strong performance for the full year.Let me now focus on our capital allocation priorities.

Our strong cash flow generation and solid balance sheet provides us with the financial flexibility to deploy a balanced approach to capital allocation. We executed well in 2019 and will continue this focus in 2020.

During 2019, we returned $242 million to stakeholders through dividends distributions and share repurchases; paid $53 million for the Artistic Carton acquisition; and invested $353 million of capital back into the business including an initial $23 million outlay to support the transformational Kalamazoo CRB investment.Focusing briefly on the 2020 guidance we expect a -- we expect 2020 adjusted EBITDA will be in the range of $1.05 billion to $1.1 billion and adjusted cash flow to be in the range of $200 million to $275 million.As we shared with you as part of our Vision 2025, the global shift to paperboard packaging solutions coupled with our significant new product development activities is driving demand and provides us with confidence we can capture the 100 to 200 basis points of sustainability supported net organic volume growth in 2020.In the fourth quarter, we ramped up several -- U.S. customers into paper cups from other substrates.

We have also shipped our first KeelClip packaging machine to a customer in Europe and we are seeing increased interest from customers in North America. Our organization is relentlessly focused on capturing paperboard conversion opportunities and I'm encouraged with our momentum as we enter 2020.Finally, let me take a moment to discuss three important announcements we are also making today along with our 2019 highlights and results.

First, International Paper notified us of their intent to begin the process of reducing their ownership interest in our partnership. Per the agreement, we will be purchasing approximately 15.1 million partnership units from International Paper for $250 million later this week.The purchase will be funded from our domestic revolving credit facility and will result in a reduction of IP's ownership in the partnership from approximately 21.6% to 18.3%.

As you may recall, IP can redeem $250 million of partnership units every 180 days per our agreement.We are very pleased that our 2018 transaction with International Paper is playing out as originally intended, creating value for our customers and stakeholders, while building a leading integrated paperboard packaging platform. We appreciate the confidence International Paper placed in us to build and grow the business and look forward to creating value for our stakeholders for years to come.Second, we are announcing the settlement of approximately $900 million in obligations for our largest U.S.

pension plan through lump sum payments and the transfer of the remaining pension obligation to an annuity provider. The lump sum payments were completed in Q4 and the transfer of the benefit obligation to the annuity provider will take place in Q1 2020.

I am very pleased with this outcome for our retirees, our pension participants and Graphic Packaging.Finally, we are announcing the acquisition of a folding carton facility from Quad/Graphics for $40 million. This strategically located well-capitalized folding carton facility in Omaha, Nebraska conveniently serves customers across the Midwest.

The converting operation consumes approximately 40,000 tons of paperboard annually and will contribute an estimated $7 million in annualized EBITDA including synergies over the next 24 months.With that, I'll turn the call over to Steve for a more detailed discussion on our financial results. Steve?

Thanks Mike, and good morning. We reported fourth quarter earnings of $0.11 per diluted share, compared to $0.15 in the fourth quarter of 2018.

Fourth quarter 2019 net income was negatively impacted by a net $34 million of special charges, including a non-cash pension plan charge associated with the settlement process for our largest U.S. pension plan.Fourth quarter 2018 net income was negatively impacted by a net $21.9 million of special charges, including a charge related to the extended outage at our Augusta, SBS mill.

Details can be found in the reconciliation of non-GAAP financial measures table attached to the earnings release.When adjusting for these charges, adjusted net income for the fourth quarter was $67 million, or $0.23 per diluted share. This compares to fourth quarter 2018 adjusted net income of $69.4 million, or $0.23 per diluted share.For the full year 2019, we reported earnings of $0.70 per share, compared to $0.71 per share in 2018.

Net income in 2019 and 2018 were negatively impacted by a net $48.9 million and $30.2 million of special charges. When adjusting for these items, adjusted net income in 2019 was $255.7 million, or $0.87 per diluted share.

This compares to adjusted net income in 2018 of $251.3 million, or $0.81 per diluted share.Fourth quarter 2019 adjusted EBITDA increased $10.7 million from 2018 to $258.8 million. Adjusted EBITDA was positively impacted by $25.5 million of higher pricing; $5.7 million in deflation primarily secondary fiber and energy; $4.8 million in improved operating performance; and $1.6 million of favorable foreign exchange.

These benefits were partially offset by $15.4 million of unfavorable volume mix and $11.5 million of other inflation, primarily labor and benefits.Full year 2019 adjusted EBITDA increased $58.9 million, or 6.1% from 2018. Adjusted EBITDA was favorably impacted by $131.2 million of higher pricing and $37.9 million of improved net operating performance.

These benefits were partially offset by $46.4 million of other inflation, primarily labor and benefits; $32.7 million of commodity input cost inflation, primarily wood and external board; $22 million of unfavorable volume mix; and $9.1 million of foreign exchange. We ended 2019 with over $1.7 billion of global liquidity and $2.7 billion of net debt.

Total net debt decreased $234 million during the quarter. Net leverage was 2.6 times at the end of 2019 at the lower end of our targeted two and a half to three times range.Moving to our 2020 guidance, as Mike referenced, we expect full year adjusted EBITDA to be in the range of $1.05 billion to $1.1 billion.

Key drivers of the adjusted EBITDA guidance are $30 million to $40 million in positive pricing, partially offset by $20 million to $30 million of commodity input cost inflation and positive volume mix of $15 million to $25 million.We expect performance improvements of $65 million to $75 million, offset higher labor, benefits, and other expenses, primarily insurance and property taxes of $50 million to $60 million.2020 adjusted cash flow is expected to be in the range of $200 million to $275 million. The reconciliation from adjusted EBITDA to cash flow includes $600 million to $625 million of capital spending; $140 million to $160 million in cash interest; $30 million to $40 million in cash taxes; $10 million to $30 million in working capital; and $10 million to $20 million in pension contributions.Following up on Mike's comments on our partnership with International Paper, assuming IP continues to reduce its ownership interest per the agreement, we do not expect to be a material U.S.

federal cash taxpayer until 2024.For 2020, we will be providing adjusted EBITDA and cash flow guidance for the full year and intend to provide updates to the annual guide during quarterly reports when necessary.We will not provide specific quarterly adjusted EBITDA guidance in 2020 and instead, we'll be providing our expected year-over-year impact to EBITDA for major maintenance-related events in our detailed guidance which is available on Slide 10 of the earnings presentation available on our website.The annual view is consistent with how we operate the company and is in line with the long-term goals outlined to Vision 2025. Additional guidance details are included in the presentation on our website.Thank you for your time this morning.

I'll now turn the call over to the operator for instructions on Q&A. Thank you.

Good morning Mike, Steve, Melanie.

Good morning Mark.

Good morning Mark.

I wondered for my first question if Mike can you just help us with how you're seeing kind of supply/demand in the boxboard markets right now especially SBS? It seems like there are at least two or three big moving parts there with the GP closure, the finished strike, and the new entrant?

Yes, I think you summarized it actually pretty good Mark. I mean overall demand as you saw held up well in Q4 in terms of the key markets that we service.

And to your point I mean a major competitor shut down a mill effectively October 1st on the SBS side.And at the same time, we've got another competitor, a new entrant that's ramping up. And best information we have is that will be a year-over-year increase of about 100,000 tons versus the 360,000 that came out of the market.

So, we would still expect to see that to be positive on operating rates probably a couple of quarters into the year it usually takes a little while for that inventory to kind of completely move through the system. That's been our experience at least.

So, we're going to continue to watch that and monitor that and see how that all plays out.The other grades as we talked about our CUK, it's a little hard to see that now because it's commingled with the GIPSA and wall-facing board. But our operating rates are above 95% as we said and global demand for that remains very strong, driven by a lot of the beverage sustainability packs that we're talking about.

We referenced a few of them on our call today and that's part of our look forward on our 100 to 200 basis points growth that we believe that we can drive here in 2020.And CRB has been stable. I mean I know the backlogs are down year-over-year, but that's really more of a function as we talked about as 2018 they got too long and we weren't doing a great job servicing our customers.

And so we're doing a nice job having the inventory where we need it now to be able to take care of those customers and operating rates on CRB last year were very strong at 97%.

Okay. And then for a follow-on, I just wondered if we could get a little more color on the Quad/Graphics deal, because it looks to me like if you're saying with synergies, you're going to get that business up to $7 million in EBITDA then it must be essentially breakeven or maybe just a little above breakeven right now.So I'm just -- I'm curious when you think about that synergy number is that just most of that just pulling more board volume through your mills into that carton plant?

Is there any way to actually improve profitability at the carton plant itself either through changing mix, changing price et cetera?

Yeah, thanks for that question. We're excited about having that facility join our business those employees join our business.

Look the strategic location of that facility is excellent, Omaha and Nebraska to service our Midwestern customers. So we'll start with that that helps us optimize our business mix across the Midwest platform for some savings from freight standpoint both on board and on servicing customers.We do run a big system up in the Midwest.

So we got the opportunity to balance that across a large platform. So there's some synergy opportunities there as well.

And this facility is very well-capitalized. So the printing and cutting, gluing equipment in this location are excellent.And the other part of that that I'd add you referenced this is it pulls 40,000 tons of paperboard, the majority of which is CRB and you know the investment we're making in Kalamazoo there where we're going to have the better part of $130 a ton advantage there.

So when you put those things all together both on the converting and on the mill side, it really makes sense why that was a nice bolt-on acquisition for us.

Hey, good morning. This is John Rider on for Mark.

Hi, John.

So if -- as we see trends towards more sustainable products continue to evolve, has your view shifted on, which grades specifically we'll see the most benefit?

No not really John. I think if you look at what we've been seeing and what we've messaged, we expect CRB to be relatively stable.

There might be some growth opportunities as we have a higher quality sheet come out the other end of our investment we're making in Kalamazoo. So that probably is a net-net slight positive for us.But then the CUK, we expect that to continue to grow both domestically and internationally.

And that was our experience last year as well. And we expect the SBS segments where we compete and specifically that's folding carton and foodservice and a little bit of liquid packaging to be actually slightly up.

That's offset by a few of the other segments of the SBS market that are a little bit pressured specifically tobacco packaging and some of the exports there. So our -- and it's completely in line with the view that we've got relative to our 100 to 200 basis points of growth we expect to achieve here in 2020.

And John to Mike's point specifically in 2020, we'll see that 100 to 200 basis points of growth primarily coming from the CUK and SBS grades driven by those very specific conversions beverage conversions from plastic into paperboard cup conversions from other substrates into paperboard and other bowls and trays. So those three categories will drive it mostly through the two virgin paperboard grades.

Okay. That's helpful.

And then if you guys could just give a brief update on what's happening with the Sneek facility?

Yeah. So the Sneek facility is for description purposes, a smaller version of what we're doing in Monroe.

It's the same equipment that we're putting in there just on a much smaller scale. So we're going to have a global platform to service our beverage customers on that's unique and different than really anybody else in the space.And if you think about it, we tend to service the large beverage companies and being able to have that balance and that international platform that's consistent gives us unique ability to compete for that business and service those customers.

So as we referenced in my prepared comments, the Monroe facility is pretty much at full ramp rate as we head into 2020. Sneek will be a little bit behind that.

We expect the second half of 2020 to be really at almost full run rate there. So, it's kind of a complete system that we got across the globe.

Hi, everyone. Good morning.

Thanks for all the detail. I wanted to ask my first question largely around volume trends.

Can you talk a little bit about what might have caused the customer delay although these things are normal when you have conversions and what effect that might have had on the volume mix number? And relatedly, given the success that you're speaking about in terms of winning these conversions, are you seeing other substrates Mike fighting back a bit more aggressively to regain share or perhaps even grow their share?

What are your thoughts there?

Hey George, it's Steve. Just to address the first part of the question, then Mike can add on.

Specifically, this modest kind of one quarter delay was just related to a large nationwide rollout and the customer itself got into a position where they just weren't able to migrate the volume as quickly as expected. But as we mentioned, it is fully ramped by year-end.

We believe that it had just a little more than a 50, 70-basis-point impact on the quarter. And so we were really heading towards that 100 basis points.

And then just a natural delay with our customer not in terms of our ability to service it played out, but it's now fully ramped. And Mike touching on the other piece.

Yes. Just to build on that and from Steve relative to other substrates fighting back.

Look, these are mature markets and we expect that we're going to have to compete for the business and the volume every day. Specifically, as it relates to cold cups, we do see some regional activity where there are some plastic options that are being trialed and explored.And look, we're not going to win every jump ball along those lines.

And we've been very straightforward in that and that's all factored in our 100 to 200 basis points that we're putting out there of growth that we expect to achieve. We're actually winning more than our fair share on the hot cup side, where plastics, really isn't an option if you think about it or as big of an option.

So, I think that's how I'd ask you to think about it George. It's a balanced view of what we think is possible and very targeted to the products where we [Technical Difficulty] with something that they desire in an advantage.

Go ahead Steve, I'm sorry.

Yes just concluding that to Mike's point is, for 2020 these are known conversions with known customers. I think that's what's critical to our confidence in the 100 to 200 basis points.

Understood. No and I appreciate the thoughts on that.

The other question I had just, if you could go over, if I missed it apologies in advance, but if you could go over, what's in your price cost guidance in terms of assumptions on nat gas, chemical and resins recovered paper. Thank you and good luck in the quarter.

Yes George, its Steve. Just regards to price, the $30 million to $40 million is a flow-through of pricing actions that we've taken known movements that will occur.

So there's nothing new information. It's all information in the marketplace relative to previous announcements and the flow-through of our contracts with customers.With regards to the $20 million to $30 million of commodity input cost inflation it's on a basket of about a $2.5 billion spend and it's a 1% increase always in many years.

But overall it's -- the midpoint is a 1% assumption across that basket. I don't want to get into the specifics by line item because we don't know what will run this year.

Well, we think we're making a very appropriate assumption for modest improvement, modest inflation of roughly 1% across that $2.5 billion spend.

And I think George, just to put a little finer point on Steve's comments relative to why we're not going to give specific individual commodity assumptions is, if you take a look at oil for about two weeks ago based on geopolitical tensions, it was closer to $60 a barrel. Yesterday, it was $50.

So, these things move around. And so, what we're telling you is, we think we will have modest level of input cost inflation.

We're not sure exactly where yet because, it's really only at the end of January, but that's our assumption.

Okay. That’s great.

Thank you, guys. I'll turn it over.

Hey, guys, good morning. I guess my first question on the volume mix that you cited in 4Q as being unfavorable, can you just give us some color as to what exactly that was due to?

And then just following up on George's last question on the delay 4Q into 1Q should we sort of look at the benefit on 1Q as being 80 basis points because you came in at 20 basis points of growth in 4Q and you cited that being below your 100 basis points target? Is that the right way to think about it for 1Q?

Yeah, Ghansham, it's Steve. A couple of things there, with regards to Q1, we would expect to be in our 100 to 200 basis points for the quarter.

And so our expectations will be is that we will be within our 100 to 200 basis points for the quarter. With regards to Q4 volume mix and it is relevant some of the negativity is things we've been working through here throughout the year in terms of the on-boarding of significant volume and some of the mix changes, we've seen in places like Big Bear, but more importantly, the on-boarding of the significant volume had some negative volume mix as we're working to earn on it.

We fully expect, as you've seen in the guide to also positively begin to earn on volume mix in Q1.The number in Q4 was a little larger-than-normal, because we had a bit of an unusual comp at the end of 2018. We had a very large amount of volume of open market paperboard that was a bit of a one-time event that we sold into the marketplace that didn't repeat in Q4 and so that was a bit of a specific comp.

And so again, just repeating it, we expect Q1 to be in the 100 to 200 basis points and expect to begin to earn positively on that volume mix in Q1.

And I think Ghansham, the other thing I would add if you think about what we have been able to do on the pricing side, if you take a look at what we're forecasting here for 2020 you add it up, its $250 million worth of pricing that we will have achieved over about a three-year period of time. We also shrank our lag time from nine months to six months.

And you don't do that as you know without putting some business at risk. And that's in fact, what we did.

But we've got a lot of confidence as that being the setup as we head into 2020, as we've talked about that we did all that, and we've got this growth trajectory that now we'll be able to earn on. So that's how I'd ask you to think about it.

Okay. And for my second question kind of putting 2019 in perspective, right?

So you came in at 16.7% EBITDA margin. In 2015, you were at 18%.

The only big portfolio move is really the SBS. How much of that was – how should we sort of bridge that margin gap and what are the big drivers of that?

So, I guess the first thing is that the SBS platform came in at like 13.1%. So that would be a bit of math that you'd have to factor into that.

We delivered on the $75 million worth of savings as a run rate number. So that's flowing through.

You saw the step-up last year from 16.1% in 2018 to 16.7% in 2019. And if you take a look at the guidance that we provided here for the full year 2020, we expect to continue to expand that.

Yeah Ghansham just adding to Mike's point. The – prior to the on-boarding of the SBS and cup business, the core business prior would be moving back towards those margins that you just articulated with now SBS moving from 13s into the low mid-teens.

And that's where we – as we've talked before, where last year we saw a fair amount of the inflation, and it's a place where we know that there's still opportunity to improve that return profile to get it to at or above cost of capital returns and that's a big part of the prioritization for 2020, as well in terms of the overall performance of that part of the platform.

Thank you.

You’re welcome.

Good morning, everyone. Thanks for all the details.

My first question has to do with the – and I might have missed any opening disclosures but can you talk a little bit about the process of buying in the stake that IP has? And in particular, do they ask for you to buy all of it?

And secondly, what is sort of the financing arrangements? Let's assume it is put to you every six months, do you have a revolver that can handle the $250 million every six months?

Yeah, Chip, it's Steve. With regards to this $250 million that we'll execute on that we announced today and we'll execute on tomorrow really that's just per our contractual agreement.

And so we have the ability – they have the ability to execute pursue $250 million we executed on it leveraging our revolver. As we mentioned in the remarks we have a $1.4 billion U.S.-based revolver, which is where most of this will apply.

So we have plenty of capacity to do this move as well as if there was a next one in July that we could pursue that as well. We'll look at the debt profile of the company this year as well to determine what mix we'll have in terms of the permanence of the financing.

We've got a lot of confidence that our balance sheet is in a good spot to do this this year.And you've probably done the math if you look at the guidance that we're providing the guidance we're providing – the guidance we are providing does assume that the second $250 million will take place. It's assumed with that guide the $140 million to $160 million of cash interest expense.

And if you kind of fast-forward through we'd still be within our 2.5 times to 3 times leverage range probably at the higher end of it assuming we would execute on the second $250 million if that occurred with the same scenario the same fashion that we're doing this $250 million.

Okay, very helpful. And quick follow-up.

One of the slides mentioned the compressed timing of moving pricing vis-à-vis cost from 9 months to 6 months, which is certainly a big improvement. Is there an ultimate goal?

And what would be a practical goal in terms of even further narrowing if that's possible?

Chip, thank you for that recognition of that. But I mean from what we've said and we covered this at our Investor Day as well I mean that was our target and that's where we're at.

So 6 months is again how we'd ask you to think about it and that gives us a couple of moves every year. So we're not dragging inflation out of one year into the next which was our goal and we're there now.

So that's where we're focused.

Understood. Thank you.

Good morning.

Hi, Anthony.

Hey. Mike, China announced a single-use plastic ban over the weekend that seems very focused on food service.

And I'm just wondering do you see any potential for this to kind of tighten the global market either for SBS or CUK either in the near-term or the long term? I know China is not a major market for you but I just wondered if there's any potential knock-on effects.

I think it's consistent with the view we talked about at our Investor Day in terms of the trends we're seeing globally. Certainly we see that acceleration in Europe we talked about Anthony, and now China is adding to that.

And as we mentioned we've got a lot of opportunities here in North America that we're working on specifically in a number of the product lines that Steve and I have already outlined here. So it's kind of consistent with our view.

Okay. And then just you've given the quarterly outage guidance for the year.

And I'm just wondering when you step back and look at 2020 kind of from a big picture what you view as maybe potentially the biggest sources of execution risk? And then looking at performance improvements what could drive, I guess, either downside or upside to your target?

Yes, thank you for that. So the biggest year-over-year changes and we talked about this in our Q3 call is we've got a recovery boiler that we're going to do maintenance on -- significant maintenance on in Monroe in West Monroe.

That will take place in Q2. And so on a year-over-year basis it's not going to have a huge impact on our EBITDA because we've done Texarkana as you know last year.

And as we said on our Q3 call to the best of our knowledge based on the testing that we've been done and the inspections that we've done this is the last major recovery boiler work that we need to do for the better part of about a decade. And so that certainly is something we've got to manage and manage well where we built inventory to allow us to be able to take care of our business during that period of time.So you see that in some of our inventory numbers as we finish 2019.

But we're set up well we believe based on the planning that we've done to take care of customers during that period of time. And I think the other thing that we'll continue to benefit from here in 2020 is we started up a facility in Monroe that big converting facility that many of you had a chance to visit.

And on a year-over-year basis and we would expect to drive a significant amount of productivity with that asset. And that's in fact how we've developed our plans for the year.

So those two things are probably the biggest things that are on our mind.

And Anthony just in terms of the new information we're providing on year-over-year net maintenance outage costs, the intent there is to provide you with some facts around what's occurring in terms of what quarters versus the prior year. And as you can see from the information Q1 is pretty neutral, and so natural improvement will just occur in the business consistent with our guidance improvement.

Whereas Q2 a lot of what Mike just articulated is taking place in Q2 this year rather than it being spread more in Q3, Q4.So on a year-over-year basis, we'll experience a fair amount of that maintenance-related expense in Q2 tapping down the EBITDA in Q2 with more material improvement in Q3 and Q4 on a year-over-year basis. So it's going to -- the year will flow a little different than last year.

We're trying to provide a little bit of transparency into how the business will function given these large maintenance activities that we undertake annually.

Got it. Got it.

That's very helpful. I'll turn it over.

Hi, good morning. My first question is on the volume outlook for next year.

It does seem that there is one customer driving a significant portion of it. So I'm curious, is it a handful of customers that drive the balance to get you to the 100 to 200 basis points of improvement?

Are we talking about 50 or more? I'm just trying to understand really how many conversions are happening with your customers.

And then as you sit here today, do you think your conversations about potential future conversions are increasing or about the levels they were maybe like a year ago?

Yes, Debbie, it's Steve. I'll kick that off.

The $15 million to $25 million of EBITDA improvement year-over-year does have a little bit of the acquisition that we just talked about from Quad in there. So that will be volume related.

But it is -- it's a wide variety of customers. They are the large recognized customers that you'll talk about -- that we've talked about before the Dunkin' Donuts or large beverage customers with conversions to KeelClip.So those will get the headlines, but really across the enterprise, we have small medium and large conversions happening in those categories beverage conversions, cup conversions, old plate conversions.

So it actually spans small medium and large we'll tend to talk about it more though the headlines will read with some of the big ones, but we're pleased with the fact that it actually is kind of spanning across the enterprise small, medium and large customers.

Okay. That's helpful.

My second question, are you able to just update us on your recycled fiber exposure the one million tonnes? Are you changing anything about the mix of recycled fiber just due to where pricing is right now?

And anything else we should consider in your outlook related to recycled fiber? At the very least you're able to tell us if you expect pricing to move higher year-over-year?

Yes. In regards to any pricing moves that would be contained in the guide that Steve kind of talk us through Debbie relative to input cost inflation.

It's bouncing along the bottom right now. Could we see a little bit of an uptick given that?

Yes, we think that that could happen, but we don't know for sure. But what we are doing is with the investment we're making in Kalamazoo is we're going to have the most modern state-of-the-art cleaning systems there.

So we'll be able to take an increasingly lower quality grade of material and turn that into high-quality paperboard. And so the investments we're making will in fact help us be able to do that over the long-term medium and long-term and we think that's the right investment for us to make.

Great. Thanks.

I'll turn over.

Hey, good morning guys. Just wanted to go back to the delay the customer delay.

I appreciate it was only one customer -- one-quarter delay, but it seems like it might be having a negative impact on the stock today. So I just wanted to clarify your comments there Steve, are you saying that in January so far you're kind of already in the -- back in that 100 to 200 basis point volume growth range that you kind of always talked about for 2020?

So as you kind of sit here in 1Q, we're kind of already at that targeted range?

That's correct Brian. Just to repeat that for you we -- the 100 to 200 basis points that we have line of sight to for 2020 we see line of sight to that in Q1.

And I apologize if I missed it in the prepared remarks, but I think normally you gave some color on the forward quarter EBITDA guidance. Did I miss it or are there any comments you have on 1Q kind of EBITDA?

Yes, Brian. I was just at the end of the prepared remarks, but we're this year, we're going to move to an annual guide with regards to EBITDA [Technical Difficulty] we're providing is what we just talked about a moment ago, which is visibility into our year-over-year maintenance-related outage costs which will provide you with the appropriate line of sight into how the quarters will likely play out as you look at prior year EBITDA, this year's guidance and kind of the flow through of how maintenance costs will provide.

So we’re substituting it with a little more information that's granular on maintenance costs and moving away from a quarterly specific guide relative to EBITDA.

Got it. I’m sorry I missed that.

And just on the pension last thing for me just on the pension. Just kind of a question on why the decision to do this now?

And it didn't sound like you were talking about any cash impact to GPK from that. I'm assuming you're just transferring some assets from the pension fund itself.

But can you just kind of confirm that and any impact it could have on your own cash flows in the 2020 or in forward years?

Yeah. Thanks Brian.

In terms of this $900 million that we've settled, this has really been a five to seven year journey actually towards immunizing, and then eventually getting to a place of fully funding and removing the liability, moving it into an annuity provider. So it's really been a long journey, and it all culminated here at the end of the year and here in January.

And so it's a very good outcome for our retirees.They're associated with that $900 million there are no cash implications of that in 2020. It's fully funded.

And so there will be no additional cash requirements. The cash that we're putting into our guidance is our ongoing remaining pension plans that we have around the globe about $0.5 billion around the planet that we continue to support financially.

They're all very well funded. But that $10 million to $20 million is just now in kind of the normal course.

Got it. Thanks very much.

You bet.

Sorry about that. Good morning, guys.

Good morning, Arun.

I guess my first question is around pricing. It looks like you have the flow through benefits of 2018 and 2019 still flow through in 2020.

And you recited kind of mid-90s operating rates in CRB and CUK. Do you think there's any opportunities to go after further pricing in those two grades?

I know that you're still working through the inventory in SBS. But I'm just curious it seems pretty tight in those two grades, and if there's any opportunity to take further pricing?

Thanks.

Okay. So, Arun thanks for your question.

I guess, as you know, we're not going to talk about future pricing actions on our call in terms of what we would or would not do. Having said that, we're very focused, as we've talked about in terms of the operating rates and driving our integration levels up.

Today the acquisitions, this tuck-in acquisition continues to build on that strategy to drive our integration levels across all three grades up, which helps us drive and optimize our overall mix.And so, I'd ask you to kind of just think about that continuation. We did a tuck-in acquisition last year with Artistic Carton.

We've done another one now here in Q1. And that's really where we're placing our emphasis in addition to our new product development activities that are driving 100 to 200 basis points growth and will continue to put paperboard through our low-cost integrated platform.

So just to clarify is there an opportunity? It sounds like there is an opportunity for continued mix improvement as you increase those -- that integration level.

Is that right?

Yeah. That's right.

I mean the mix certainly improves as we continue to drive it through our own converting operations. And it kind of smooths out the demand profile.

So it helps us optimize our EBITDA and free cash flow. And that's why we like that as one of our key.

And is that mix captured in your price outlook or would that be additional upside?

It's in the volume mix outlook, the $15 million to $25 million.

Okay, great. And then just lastly just on the change in IP's ownership.

I guess I just wanted -- I was just curious, it seemed like there was a potential for them to remain owners for a little bit longer. Was there any -- are you aware of any changes in their view of their ownership of the GP case stake.

Did that change over the last couple of months? Or was it fairly relatively consistent with their communication with you?

So, I think you're going to have to ask that specific question of International Paper, but I can tell you from a graphic packaging standpoint this played out the way that we planned it to play out, and what we talked about with our Vision 2025. We're very happy to have the SBS and foodservice platform integrated into our company.

If you think about what we've done over the last two years, we drove integration up substantially by integrating our outside purchase of SBS. We've done a couple of tuck-in acquisitions including a major one with Letica to take those integration rates up.

We drove the synergies that we said that we were going to drive at $75 million and created shareholder value.So as they're looking at it, I'm sure they're thinking about it as a capital allocation decision and that's something better left for them to answer than me. But from a Graphic Packaging standpoint, we're very pleased with how this has played out.

Okay. I’ll turn it over.

Good luck in the year. Thanks.

Thank you, Arun.

Hey, good morning. Thanks, everyone.

Mike, one on hot versus cold cups, you talked about that earlier. But I know you mentioned Dunkin Donuts and it's a prominent case of customer going from foam to paper.

On the cold cup side you talked about some customers or some companies trialing plastic. So it seems as if perhaps, you have customers, some customers on a cold side moving in the opposite direction as those on the hot cup side.

So can you just talk about kind of why you think perhaps you're seeing those disparate situations?

Well, like I said, these are mature markets Adam. And so we have to compete every day for the ability to supply our customers.

And every customer has got their own set of objectives and marketing strategies that they're looking for and how they want to build those brands. And so they make those decisions based on a wide variety of factors.

The outcome of that is there are some opportunities for cold cups to go on the plastic side and we see that. And then as you've seen, we've seen a lot of the foam come into paper, so it's a balance.

Sure. And just on the Kalamazoo project Mike, can you just give me an update on when do you expect the three older machines to get shot before you bring the new machine on in early 2022?

Yes. So all of that that will occur really in 2022.

So if you think about it, it's actually four paper machines we have to take down: two in Battle Creek, one in Middletown and then the one in Kalamazoo. And so we have to get the new machine up and operational which we said we'll do in Q1 of 2022.And then get the trials done, the qualification is all complete and then systematically ramp the other machines down as the new machine is qualified and brought online.

So that is really a 2022 phenomenon.

And we'll do that Adam. This is Steve, on a capacity-neutral basis while that's happening.

So we'll be ramping up, ramping down, as we bring the asset in.

Thank you.

Hey, just one quick question guys. Thanks for taking.

So in the past you mentioned that using price hikes to kind of recapture the loss or the higher costs of 2016 and 2017 and 2018. I was wondering if you were able to do that or if you're I mean structured to do that or where we are with that kind of that process?

Yes, Dan I appreciate you raising that. If you look at the roughly $125 million dislocation that occurred in kind of 2016 to 2018 on price/cost.

With this year's positive $98 million of positive price/costs, which exceeded our original expectations we've now gone back the majority. We're not all the way there but we're within $20-plus million of clawing back that dislocation and we'll get some additional, we believe this year.So while it has been a journey that resulted in us compressing time lag so that we can do it faster, the model of being able to do so is intact and we believe we will get into full balance here as we migrate through 2020 and in 2021.

And you've done a good job with compressing time lines, I was wondering if there's additional steps that you can take and go even further or it's just not possible at this point?

Well, look, we're always looking at that. But as I mentioned earlier, we are targeting six months and we're there.

What I would say is we continue to build out our pricing. Things to look at any forms of leakage on contracts look for those opportunities.Every year we get a little better on that.

So that's really where our efforts are on the commercial side. It's really a big shift this year Daniel, because we're focusing really driving this 100 to 200 basis points growth.

And that's what our business units are actively engaged on. We see it as Steve said here in Q1.

And we planned for it in terms of the inventory. And where we've got our operations really positioned at.

So, that's a bigger focus right now than on the pricing side of it.

All right, thank you very much.

Thanks. Good morning everyone.

Good morning.

If I'm not mistaken in the south last year you were dealing under kind of Noah's Arc conditions. So, could you give us an update on where hardwood fibers are compared to last year?

And how that's incorporated into your commodity pricing?

Yeah. This is Steve.

Thanks for the visual. That's what it felt like.

But yeah that -- as we went through Q3 and into Q4, things did normalize. We were able to build our hardwood inventories back to levels that we hadn't seen really for the previous two years.So, we like where we rounded and -- finished up the year and rounded into Q1 of this year.

From an inventory standpoint of course, it's always difficult to forecast what kind of spring we're going to have. But right now, we feel good about where we're at and we're seeing those prices for wood, hardwood in particular reflect that.

Okay great. And as my follow-up, I think Mark a little bit kind of alluded to it, some of the new business that you brought on stream, isn't particularly profitable, until you get synergies incorporated.And I'm wondering is there the same sort of dynamic with your organic growth?

Are there start-up expenses that kind of fade away? And then the profitability increases once you're really operational for a period of time?

Yes Steve, its Steve. And as we've articulated before, you're correct.

I mean we do have start up activities with good new business wins, have every expectation that those will be at the kind of margin profile that we have as a corporation. And we'll see that as we round into 2020.We went through some of that start up.

We had a lot of starting up happening in 2019, both at the manufacturing level, bringing the Monroe facility to life as well as making these conversions with significant customers.And we're very transparent about that. And the numbers we shared with you in terms of the volume mix implications that -- as we onboard.

So that is where there's the confidence that the earning opportunity is there.We have very high confidence that the new products that, we're bringing to life have a margin profile at or above the company.

Okay. Thanks.

Good Luck in the year ahead.

Thank you.

Thank you. Kind of a follow-up bringing together a number of the different questions, one of the things that's sort of just jumping out, obviously was the $15 million negative volume mix year-over-year in the fourth quarter.And you've spoken to it.

But I was hoping maybe to get a little bit more specific, because it was such a big outlier from what we had been seeing. And I know you've referenced the open board, paperboard sales the prior year.And you can see in the fourth quarter last year you had a better volume number there.

You've talked about the start-up costs and those showing up. And perhaps the delay somehow shows up in the volume mix as well.Can you bucket approximate amounts for those numbers, just so as one can better understand the magnitude of that $15 million variance?

Yeah, Mark. Of the $15 million a little less than half would have been some of the new business transitions that we've talked about.

A little less than half of it was the significant non-repeating open market paperboard sale. And the rest of it is very much approximate to where Mike was chatting earlier on us taking some good hard positions relative to price execution, all of which adds up to the quarter that we just articulated relative to volume mix.More importantly, the important pivot that happens as we round in 2020 on volume mix and earning on it, in that 100 to 200 basis points of net organic volume growth that we have line of sight to for the year as well as for Q1.

Great. And then so on -- as we look into next year, the start-up volume mix is that still going to be a drag?

Or put more positively if we look at 2021 if there wasn't more start-up coming on then, would there be a positive in 2021?

Yeah. I think that's probably difficult to estimate.

We expect to be in a good solid earning position in Q1 of 2020 which would indicate only modest improvement as you go all the way out to 2021.

Thank you.

Thanks Mark.

Thank you for joining us on our earnings call. We had a solid year in 2019 and look forward to building on the momentum as we have entered 2020.

We'll talk to you again in April to update you on our first quarter 2020 results.Thank you. And have a great day.