Matt Tractenberg - Vice President of Investor Relations Steven Voorhees - Chief Executive Officer Ward Dickson - Chief Financial Officer Jeff Chalovich - President of Corrugated Packaging Robert Feeser - President of Consumer Packaging James Porter - President of Business Development and Latin America

Brian Maguire - Goldman Sachs George Staphos - Bank of America Merrill Lynch Chris Manuel - Wells Fargo Securities, LLC Debbie Jones - Deutsche Bank Mark Weintraub - Buckingham Research Group Mark Wilde - BMO Capital Markets Adam Josephson - KeyBanc Capital Markets, Inc. Philip Ng - Jefferies LLC Chip Dillon - Vertical Research Partners Steve Chercover - D.A.

Davidson & Company Anthony Pettinari - Citigroup, Inc. Scott Gaffner - Barclays Capital

Thank you, Chris. Good morning, everyone, and thank you for joining us this morning for the call.

We've issued a press release this morning and posted the accompany slide presentation to the Investor Relations section of our website. They can be accessed at ir.westrock.com or via a link on the right side of the application you are using to view this webcast.

With me on today's call are WestRock's Chief Executive Officer, Steve Voorhees; Ward Dickson, our Chief Financial Officer; Jim Porter, President of Business Development in Latin America; Jeff Chalovich, President of Corrugated Packaging; and Bob Feeser, President of our Consumer Packaging segment. Following our prepared comments, we will open up the call for a question-and-answer period.

Before we begin, I would like to point out that during to the course of today's call we will make forward-looking statements involving our finance, expectations, estimates and believes related to future events. These statements may involve a number of risks and uncertainties that could cause actual results to differ materially from those we discuss during the call.

We describe these risks and uncertainties in our filings with the SEC, including our 10-K for the fiscal year ended September 30, 2016 and our 10-Q for the quarter ended December 31, 2016. Additionally, we will be referencing non-GAAP financial measures during the call today.

We've provided a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures in the Appendix of the slide presentation. The slide presentation is available on our website.

So with that said, I'll turn it over to you. Steve?

Thanks, Matt. Good morning, everyone.

Thank you for joining our call today. WestRock had a very good quarter.

We generated $0.54 of adjusted earnings per share. We executed well.

We delivered year-over-year productivity improvements of $103 million. Our productivity improvements were a highlight of the quarter and were the primary contributor helping us mostly offset the exceptional increase we experienced in input cost.

While these higher input cost may persist favorable market trends and the relentless execution of our strategy by the WestRock team will drive improved results and increased value for our customers and stockholders' over the short and long-term. For a comprehensive portfolio of paper and packaging solutions is helping our customers meet their goals from quality paperboard to innovative and functional design to consumer packaging to corrugated packaging to displays.

WestRock provides the full range of solutions to our customers. We are successful integrating our products and services to deliver value to our customers.

Here are some examples of how we're doing this. We've already closed on more than $150 million an incremental annual sales from the breadth of our portfolio.

Examples of these incremental sales include customers who already buy corrugated packaging from us and have decided to use WestRock to manufacture their folding cartons. This combination provides the opportunity for WestRock to work with these customers to reduce their total cost by optimizing the total fiber required to package and deliver their products.

We have folding carton customers who have decided to use WestRock to design, manufacture and assemble displays and in the process this combination provides the opportunity for us to help integrate the best aspects of both products to help grow our customer's sales. Craft breweries are another excellent example.

WestRock can provide craft brew customers with the beverage carrier, the corrugated box and the machinery to assemble the packaging, reducing their cost, supporting their growth, and reducing their supply chain risk as compared to relying on multiple suppliers. We are extending our solid track record of execution.

At the end of the March quarter, we achieve an annual run rate of $675 million in synergies and performance improvements were two-thirds of the way to $1 billion goal. Since the completion of the merger, we've seen $632 million flow through our income statement.

We have line of sight to achieve the $1 billion productivity goal by the end of the June quarter of 2018. This is one quarter sooner them initially planned and highlights the strong performance culture we are building at WestRock.

We continue to execute our disciplined capital allocation strategy. We bought back $25 million of stock during the quarter.

Since the merger, we've purchased 15.3 million shares at an average price of $49 per share. In total, we've returned $1.4 billion to stockholders since the merger through dividends and share repurchases.

Since forming WestRock, we focused our portfolio on our core paper and packaging business. We excited the specialty chemicals business with the spin of Ingevity.

We completed the sale with the Home, Health & Beauty business and monetized a significant portion of our land and development assets. Over the same time, we've improved our portfolio.

We acquired SP Fiber and we acquired Cenveo Packaging. We further developed our position in Mexico with our joint venture with Grupo Gondi, and this quarter we acquired Star Pizza which has expanded our presence in the growing market for custom short-run pizza boxes.

The announced acquisition of Multi Packaging Solutions will expand our presence in healthcare and high-end customer markets. The shareholders in Multi Packaging Solutions overwhelmingly approve the transaction and have both held earlier this month and we are progressing well in our integration planning.

We anticipate that we will close this transaction in the June quarter. We are excited about the opportunities we are seeing to add new capabilities for short-run and premium products and services to our platform and to integrate in even broader portfolio of solutions across our exciting business.

The work we've done today is confirming MPS was outstanding strategic fit in the WestRock portfolio. After we complete the Multi Packaging Solutions acquisition, our portfolio will be balanced between consumer and corrugated packaging.

This balance will provide WestRock the access and the opportunity to participate in a wide range of end markets and the ability to partner with customers across our entire portfolio. More than 80% of our business will be in North America.

About $800 million of our sales will be to Central and South American markets. Another $1.2 billion will be in the European markets and yet another $0.5 billion will be to the Asia Pacific markets.

The scale in foreign markets has and will provide us additional opportunities to create efficient supply chains to support our customers' growth across these markets. Now, let's turn to the details of our second quarter performance.

Sales for the quarter were $3.7 billion and adjusted EBITDA was $547 million for consolidated margin of 15%. Total commodity inflation was $125 million headwind year-over-year.

This was the result of significant increases across most of our input costs including a $75 million or $66 per ton increase in the cost of recovered fiber and a $23 million or $1.23 per MMBtu increased in the cost of natural gas. On a percentage basis, our cost of recovered fiber increased by 81% and the cost of natural gas increased by 59%.

The corrugated packaging team executed well in the quarter and included the benefits of the $40 per ton price increase published in October as well as increased volumes and productivity gains. These benefits were offset by the previous year's PPW published price reductions and significant inflation.

North American corrugated second shipments were up 76,000 tons a total of 3.7% compared to the same quarter of last year. Box shipments per day increased 1.1% as compared to last year with strength in consumer, eCommerce, and select food markets.

The corrugated segment continues to focus on our differentiated strategy and growth in the segments and markets where we can best position ourselves to drive value for our customers and for WestRock. Over the coming months, we will be integrating the 25,000 annual tons containerboard converted by Star Pizza.

Last fall's $40 per ton domestic containerboard price increase that we communicated to our customers has been fully implemented, so we are now at a full run rate. Currently, we are in the process of implementing our $50 per ton domestic price increase that we announced to our customers in March and was recognized in Pulp & Paper Week this past Friday night.

Healthy demand in our export markets continues in part driven by the strong South American growing season both sequentially and year-over-year. Export pricing in March was up significantly from our low point of last year with increases in effect in all of the markets.

We fulfilled all backlog export orders from the fall in early winter. Remember, that Hurricane Matthew disrupted our ability to fulfill export demand in the first quarter of fiscal 2017 effectively pushing that volume into the March quarter.

We are currently shipping at a more nominal run rate of approximately 300,000 tons per quarter. North American adjusted EBITDA margins were 15.9%.

Commodity inflation was $91 million. We achieved productivity improvements of $36 million as compared to the year-ago period.

This prevalence is the direct result of our entire organizations focused on performance excellence that is supported by our continuing capital investments to improve our integrated corrugated packaging system. We managed our inventory as well with inventories declining by 148,000 tons from last year.

We took 78,000 tons of maintenance downtime in the quarter in line with our expectations and we took no containerboard economic downtime. Our joint venture with Grupo Gondi is progressing very well.

Gondi reported sales of $192 million and EBITDA margins in excess of 20%. The Mexican packaging markets remain attractive and the business is very well positioned.

In fact, additional investments are in process that will enable Gondi to continue to meet the needs of its customers well into the future. Our Brazil team continued to perform well with 16.5% total growth in box shipments, up more than triple that of the industry.

We have an outstanding business and team in Brazil and see the potential to make incremental investments in this area that can provide attractive growth in returns. During the quarter, we recorded $2.8 million of legal reserves, which unfavorably impacted our EBITDA margins at 270 basis points.

Our corrugated customers are seeking to meet their growing demand for greater performance and more high-end packaging that appeals to today's consumers. We're partnering with our customers to innovate in the space, create packaging solutions that protect our products and enhanced our brands.

We have and will continue to invest in our corrugated platform to meet our customers changing needs and improve our cost position. This work will enable us to generate strong cash flows and improve our margins in our corrugated segment.

The Consumer Packaging team operated extremely well and generated excellent results. Adjusted EBITDA was $235 million or 15.1% of revenue, an increase of 100 basis points year-over-year.

Shipments of paperboard and converted products increased 0.9%, driven by growth in foodservice, liquid packaging and folding carton. This was offset by weaker beverage volume.

Revenue declined year-over-year as a result of lower pulp volume and last year's published PPW price reductions. We expect this pricing trend to slow and then reverse for us as we implement price increases across every grade.

Our SBS backlogs improved in the quarter and are currently a healthy six weeks, driven by demand and foodservice and liquid packaging. CNK backlogs also improved in the quarter and are now at six weeks.

CRB backlogs are now at two weeks, which is our normal operating level. Consumer Packaging generated outstanding productivity, $72 million in the March quarter.

We operated extremely well by implementing a broad range of improvement projects across the segment, which include ongoing converting footprint optimization, sourcing and capital investments. We continue to benefit from the integration of the volume we brought into the system from the acquisition of the Carolina product line, the Cenveo Packaging acquisition and internalization of the volume from the merger.

The merger has also provided WestRock the opportunity to market our innovative paperboard products through our existing folding carton network. These innovative products include a paperboard called EnShield.

EnShield has been designed for applications, such as frozen food and foodservice where the customer needs an excellent grease barrier without the use of poly coatings. By eliminating the use of poly coatings the package is fully recyclable, which enables our customers to meet their sustainability objectives.

Several of our customers are successfully using this product and we are growing interest in EnShield throughout our customer base. Ward, I'll turn it over to you.

Thank you, Steve. Our strategy to monetize the land portfolio is proceeding well and as planned.

I'm very pleased by our most recent sale of large portions of Nexton, the largest project in the portfolio. The sales resulted in more than $75 million in after-tax cash flow for WestRock, which drove segment income of $18 million for the quarter, due to our accelerated monetization strategy in accordance with GAAP, we are required to mark down the book value on any projects for the expected sales proceeds are less than book value.

Therefore we wrote down the book value on a few projects by $42.7 million, before our joint venture partner share of $6.4 million. In addition because of the real estate assets now meat the gap held for sale criteria.

We have reclassified the caring values to current assets on our March 31 balance sheet. We expect the other properties to have sales proceeds in excess of book value and continue to believe we will achieve the previously mentioned range of $275 million to $300 million and net after tax proceeds.

We continue to expect cash flow for fiscal 2017 to be between $150 million and $175 million from our land and development monetization efforts. We delivered $103 million in productivity and synergy improvements in the quarter and now expect to exceed an $800 million run rate by the end of the fiscal year.

We believe that the $1 billion target will be reached by the end of the June quarter of fiscal 2018 which Steve mentioned earlier. We also continue to execute well on our disciplined capital allocation strategy.

During the quarter we returned more than $125 million to our stockholders through both dividends and our share repurchase program. As mentioned on our previous earnings call we expect pro-forma leverage hosting Multi Packaging Solutions transaction and including synergies to be slightly above 2.5 times.

We have strong opportunities to invest in our business and in M&A. We expect to allocate more capital into these growth and margin improvement opportunities then to share repurchases over the near-term.

We expect to achieve our current target of $1.2 billion of adjusted free cash flow in fiscal 2017. There been numerous changes in the external environment since we provided the guidance at the beginning of the year.

We've had significant increases in inflation particularly recycled fiber, but we are also operating in a more favorable pricing environment and generating more productivity. In addition our land sales acceleration efforts are contributing more cash flow this year.

Maintaining the $1.2 billion guidance in adjusted free cash flow is a testament to the strength of our business model, as well as our ability to executed stay on plan. For the third quarter we expect sequential adjusted earnings per share - per diluted share higher than the $0.54 achieved in the second quarter.

For purposes of modeling we provided the key sequential drivers that will impact the quarter. First, we will benefit in the range of $50 million to $70 million of EBITDA from price seasonally higher volumes, favorable mix, and productivity.

Second, inflationary pressures from recycled fiber impacted a significantly more than we expected in the March quarter. While prices have moderated recently they remain elevated both on a year-over-year and sequential basis.

Based on our regional consumption mix a recycled fiber index cost was $118 per ton in January, $140 per ton in February, $181 per ton in March for a quarterly average of $146 per ton. Our price per ton declined in April to $168.

We expect that recycled fiber costs will moderate slightly from here, but anticipate the average price in the June quarter to be higher than the March quarter. Third, we've completed the sale of our Home Health & Beauty business in early April and as a result we will forgo approximately $27 million of EBITDA in the June quarter.

We do not anticipate meaningful EBITDA contribution from our land and development segment in the third quarter. Please note that our guidance does not include any potential contributions or earnings or adjusted free cash flow from the Multi Packaging Solutions acquisition since the closing date is uncertain.

And with that, I'll turn the call back over to Steve.

Thanks Ward. We've made substantial progress over the past two years focusing our portfolio and growing a leader in paper and packaging.

We are well positioned to improve our margins, grow our cash and help our customers to achieve their goals for our comprehensive portfolio the paper and packaging solutions combined with our strong execution. We will use our consistent and growing cash flow to reimbursement our business and make acquisitions that improve our business.

We expect to return capital to stockholders by increasing our dividend over time and repurchasing shares. I believe this is a formula that will provide significant opportunities for WestRock employees, customers and investors over the short-term and long-term.

That concludes my prepared remarks. Matt, we are ready for questions.

Thank you, Steve. As a reminder to our audience, please limit your questions to one, with a follow-up if needed.

We will get to as many as time allows. Chris, can we take our first question, please.

Hey. Good morning, guys.

Good morning.

Steve, we've seen really strong box shipment volume so far in the last six months, it seems like the industry has maybe entered into a new period of little bit faster growth than we've been at over the last couple years. Just wondering if you have any views on what's really been driving that, I think people have kind of speculated eCommerce, but just wondering if there are some other factors like a stronger industrial economy maybe a little bit better fruit and vegetable demand expected this summer just as you kind of talk to your customers, just wondered what you're seeing out there and how sustainable you think these trends really are?

Brian I appreciate the question. Jeff Chalovich is close to that, so I'm going to let Jeff respond.

Good morning, Brian. I think some of the things you outlined in the markets to include eCommerce, some of the fresh and convenient trends in the marketplace we're helping.

We have seen in our business an uptick in industrial in the last couple years, actually it's come back some back on onshore has helped our business, so there is a bit more of industrial coming back and then the consumer non-durables although it's straight a little bit from it, the eCommerce piece I believe is helping that and driving some of the growth that you are seeing in the market.

Okay, great. And with that as a backdrop just wondering how the rollout of the box price increases going, I recognized you got the $50 from receipt and a lot of the contracts are linked to that, but just as you're having conversations with folks and if there's any volume not linked to that, how is the box price increase being received?

The reception is the same as most of the increases I've experienced. We expect the implementation of the $50 that we've announced to flow through the same way the $40, so we'll have some benefit in this quarter.

And then by September, we should be at a full run rate on the $50.

Okay, great. Just one last one if I would, just on the outlook for the third quarter, just wanted to be clear on the guidance there the $0.54 based in this quarter that excluded about $0.04 of land sales and so as we're thinking about bridging from the $0.54 to whatever it is in 3Q, we don't need to deduct anything for land sales there right?

That's correct. The contribution land for the contribution of EBITDA and free cash flow is included, but it's excluded from EPS.

Got it. Thanks very much.

Hi, everyone. Good morning.

Thanks for all the details. My two questions are just further delving into trends you are seeing in the fiscal third quarter so far.

Number one, can you comment at all Jeff or team in terms of what trends you're seeing early in the quarter, markets that maybe are developing in line are better than expected perhaps those it might not be. And then the second related question and recognizing this is a little bit like asking Ms.

Lincoln how the play was. If you exclude the effect of inflation which has been significantly more than we are you would have expected several months ago and you looked at what your expectations were for this portion of the year.

How are you trending? How are you mapping against that again in terms of the fiscal third quarter whether it would be volume, clearly pricing is better, anything you care to share there?

Thank you, guys.

George, I'm going to let Jeff handle the first question and let Ward handle the second part of the question.

Hi, George.

Hey, Jeff. Good morning.

Good morning. So far April is shaping up to be strong, there is two less shipping days, but on a per day basis we are up 4.2% through the first half of the month.

The segments that we are seeing, we are seeing our agriculture in Northern California come back, the weather start to dry up. That's been an outage for the last couple months, but we're seeing that come back as weather dries and I think overall that segment will be good long-term because they have water now.

eCommerce continues to be strong for us and then some of our consumer markets and some of the food, our markets are still strong for us. I don't really see any trending office unexpected, but those markets particularly stick out as strong.

George, this is Ward. First our capital Q2 and how we performed relative to our expectations in the quarter.

Clearly as we walked into the quarter, we did not anticipate the pace of the increase in OCC in the quarter. So inflation was probably $25 million higher than what the expectation was as we enter the quarter.

But that was offset by the stronger corrugated volumes that we had, better pricing in mix across both businesses and our mill operations particularly in consumer that you saw from the productivity that we generate in the quarter. They performed extremely well, so our productivity was at a pace that was higher than we expected.

And then clearly we also had an additional month of HH&B in the quarter as compared to our expectations at the beginning of the quarter. Now as I go on to Q3 and Q4, and look at the full fiscal year, the ability for us to maintain the full-year free cash flow guidance.

I think shouldn't be lost given the inflationary environment that we're in. So we guided input cost inflation for the full-year at the beginning of the year to approach $200 million.

If you look at the pace of where we are through the first half and then compare that for the full-year that input cost inflation can be close to $350 million for the full-year and what we've been able to do is offset that with more favorable pricing, stronger volumes, stronger productivity and the accelerated monetization efforts that we have in land and development.

Okay. Listen, I have exceeded my allotted question, I just want to say the performance in consumer productivity was very good.

Congratulations of that. Thanks, I'll turn it over.

Thanks.

Good morning, gentlemen. Congratulations on a very strong quarter.

Just two quick questions, first, there was quite a bit of premium attached OCC, your different elements of that nature. Could you give us a sense maybe of how your recycle business did?

Where you how planning of those components or not? And then my follow-up question as do some of the boxboard basis.

Our recycling business that the - I guess the primary goal to recycling business is to make sure we have high quality fiber to - for a mills. We do operate a couple dozen plants.

We do have a very well developed brokerage operation and they operated extremely successful and they were able to fiber mills and I think to - they also market waste from our converting operations. So they just had a - I think they performed up standard way well during the quarter.

Okay, then my second question had to do with some of the various possible grades; it looks like on the longer cycle grade, there was some price published over the weekend as well. What's your outlook for getting some more there?

Are you done with your efforts? Is it just more of a staggered thing going through and then can you talk a little bit about the recycle grade as well or your outlook for recovering some of the higher deposit costs?

Hi, Chris, this is Bob Feeser. I'll just make a couple of comments on that so.

As you know we have made an announcement about an SBS and a CUK increase and we're in the market working with our customers to move our prices up and we fully anticipate that we will get those price increases through and then as you also know we also announced a second CRB increase, which we are in the market as well. We have fully reflected in our forecast the CRB that increase that was reflected in pulp and paper week.

Thank you, guys.

Thanks, Chris.

Hi, good morning.

Good morning, Debbie.

I was wondering if you could talk a little about the comments you made the strategy to potentially grow in Brazil where are the opportunities that you are seeing is it mostly on the converting side where I imagine you would get significant synergies or are you open to mill systems as well and kind of a sense of how urgent this is for you?

Okay. Let me Jim Porter leads our Brazil operations now, so now like Jim respond to that question.

Good morning, Debbie. First of all we really love our Brazil business the management team in that region are doing an outstanding job and continuing to execute a very strong manner.

What we have some of the best timberland on the planet very new virgin containerboard machine and the trace box mill and a nice packaging system that's focused on innovative solutions. So they're performing very well.

So our macro view of that business is to invest in it and we would see it being complimentary to expand our packaging and our know system capability. So we are not here was specificity but we are engaged in developing projects in that region.

Can you give us a sense of that the opportunity in the region for M&A, is there a pipeline?

We really don't speak on our pipeline, but we are considering investments in our existing businesses our primary focus, but we are open to M&A that could merge with that business but it's not our primary focus.

Okay thanks. And then just my follow-up question, just can echoing whatever and that the consumer business is quite strong.

I am assuming that that productivity performance is what's driving the comments around exceeding these 100 million by year-end? Could you just begin to kind of what went better than expected this quarter and what's driving the increased in the $800 million targets?

Debbie, this is Bob Feeser. We delivered strong productivity with buy and large so in line with our expectations.

The mills ran extremely well for the quarter and we're continuing to see really strong yield from our base productivity program, which is many hundreds of projects across the system. We're continuing to capitalize on merger benefits and we'll be lapping those benefits in the coming quarters and I would mention that our beverage and displace business.

We saw very strong productivity in those businesses with the fixed cost actions that we've taken as well as converting footprint optimization projects.

Debbie, this is Ward. I would just reiterate our goal along has been to when asked if we would raise the $1 billion productivity target it was to achieve the productivity target faster.

So although the performance is very strong in the consumer business and Bob is talking about many of the merger related benefits of the internalization of the 250,000 tons that we talked about in the past we've also are making improvements also in our corrugated business and as well as the corporate functions as well that had merger related synergies So it's across the whole company that gives us the confidence that we're going to be able to exceed the $800 million run rate exiting the year and then actually pull in the full - the timing of the $4 billion goal by a quarter.

Okay. Thanks.

That's helpful. I turn it over.

Just one clarification first half. It also in the bridge from the current quarter to the coming quarter, you noted that the negative $27 million from the sale of Home Health & Beauty.

I think you maybe had backed that about $10 million or so from the EPS result pretax. So in thinking bridge should be thinking more like a minus 17 as we do an EBITDA bridge from this quarter to the current quarter?

What we showed you was the EBITDA that remember when we recorded the held for sale we did not depreciate. We had lower depreciation in the quarter is normally the D&A in that business was about $3 to $3.5 million a month.

So there was also the benefit in the in Q2 which we backed out of adjusted EPS held for sale impact on the lower D&A. So the sequential improvement from an EPS point of view would have reflected not only that we don't have the EBITDA contribution, but then you don't have that benefit that you have from the lower D&A.

EPS is the net of the two.

Got it. And you really did do phenomenally well in the consumer packaging relative to what I've been anticipating and productivity was a big part of it.

Also that the pricing and mix held up much better than what I had anticipated given what we've seen in paper week during the prior year. Is that a function just of timing of when things roll through or have we really seen the majority of the negative downward drift and in fact we start to begin to see some of the positive price action begin to run through the P&L, how should we think about that?

Yes. Mark, this is Feeser again.

So, yes we did see some positive mix underlying the business and really driven by some positive trends that we're seeing in liquid packaging and food service as well as growth in the healthcare and beauty markets as well. So that's positive mix, but we still have more of the announced price for the reflected PPW price to flow through in the next quarter before we start to see the trend back up with the price announcements that we've made.

Okay, great. And then lastly on MPS, can you update us on expectation of closing for the transaction?

We still need a couple of regulatory approvals. We anticipate getting those over the next couple months, so we anticipate closing during this quarter.

Thank you.

Good morning, Steve. Good morning, Ward.

Good morning, Mark.

I wondered if we could kind of coming back to consumer packaging in these productivity gains, is it possible that you can just help us parse out the key elements with a little more detail?

Sure. Again the biggest individual driver that contributes to the acceleration of productivity on a year-over-year basis has been the internalization efforts that we've had since the merger.

As we move into the second half of this fiscal year as Bob said, we are lapping those benefits. So it's the integration of the Carolina tons, the integration of the Legacy RockTenn folding carton tons, the integration of the Cenveo tons.

Those are large contributors to the benefits. We've had procurement savings like we do across the whole system.

And we also have footprint actions that we have been talking about both in our beverage business. We've actually took some footprint actions in our displays business as well, so it's a combination of all of those.

I think on a year-over-year basis, as we look at this fiscal year, I would anticipate that this quarter would be the peak quarter in terms of productivity on a year-over-year basis because we do start to lap the benefits of the internalization efforts that really hit full speed as we went into the second half of fiscal 2016.

Okay. On those internalization, I mean some of that we understand is kind of bleach board that you are selling on the outside going into cartons, but is some of it also perhaps where you'd maybe been running some rolled pulp at the bleach board mills, and so you're actually not running rolled pulp, you are back running bleach board and you're able to internalize it?

Yes. Mark, this is Bob Feeser.

That's exactly it. As we manage our system, the big opportunity from the integration of those tons was to upgrade the mix and eliminate the production of pulp in the system and integrate these tons, so that's exactly it.

Okay. And Bob just for my kind of closing, can you just do the same thing with box board in the cartons that we've talked about with kind of containerboard in the boxes in terms of timing, because I recall it back in the MeadWestvaco days moving those bleach board hikes through with some of the customers in tobacco or whatever, usually took quite a while.

And I think there's some of the same that occurs in the CNK business?

Yes, those dynamics are similar I would say in the boxboard markets compared to containerboard that there is certainly a lag and we've typically would peg that it roughly about nine months from the time of a board increase through passthrough on boxes.

Okay, that's helpful. Good luck in the quarter.

Thanks Mark.

Thanks, good morning everyone.

Good morning, Adam.

Steve, just one question on eCommerce and one on OCC, I don't know how to direct this to Jeff or Steve. You mentioned a positive impact on your box demand in the quarter and continuing in April, I don't think that it's surprise anyone, can you talk about also the impact on availability and price of recycle fiber as a result of the growth in eCommerce and as well as whatever price mix impact this eCommerce growth is having on your business?

Sure, I'm going to let Jeff to handle that.

Good morning, Adam.

Good morning, Jeff.

On the recycle piece, there is some uptick of OCC or corrugated going to our single stream recycling centers. So we operate those centers and it's a few percentage points.

So it has some effect, but I would say it's not a driving effect at this point in time on driving OCC prices as eCommerce becomes bigger, it may have a bigger effect right now it's very minimal. The mix of that business varies.

If you look at our system some of the investments in EVOLs, die cutters. The things we've done in the system, we're setting up our systems to run the complete mix of the eCommerce space.

So you have small RSCs wraps, die cut wraps that we're putting machines and to be able to handle those mailers, [T-folders,] we're equipped very well across our system with scale to address the complete mix of the eCommerce space. We're also seeing more graphics, which we can use the photos of products.

So websites are a little laminate, manufacturer in our merchandise displays or footprint we're able to address that space across our entire enterprise. I won't speak to the margins, but the mix I think we're well positioned to address.

Thanks, Jeff. And Ward, just want to know OCC.

I know you mentioned you expect slightly lower OCC cost sequentially. Can you help us with what decline you're expecting in May whether it's $15 a ton or otherwise and related what if any impact you think decline in OCC in May would have on your ability to raise box prices and CRB prices?

Thank you very much.

So the guidance that we gave on inflation is largely the range is due to OCC. So what I would say is that our expected average for the quarter is up between $10 and $15 a ton.

So that would imply some slight moderation from the April level and then we just really carried out through the end of the fiscal year without any real sequential decline from Q3 to Q4. We believe that the environment to execute that containerboard price increase is strong and in fact we've reflected it in our free cash flow guidance and underlying demand operating rates.

Inventory levels support the implementation of the price increase both - in all three of our channels because we are also implementing price increases into the export channel as well. And so we feel good about the outlook and we've reflected that in our free cash flow guidance for the full-year.

Thanks a lot Ward.

Hey, guys. Question for Ward.

In your 3Q guidance, do you have any incremental pricing benefit from the April increase or exports flowing through? Reason why I ask you that I would have thought the open market tons from April increase would have provided a larger list, but can you remind us the cadence on how the timing works to PPW reflected in April?

Do you start seeing the open market increase in May? Just some color around that.

Okay. So the prices mix volume and productivity where we've identified at $50 million to $70 million sequential improvement.

The biggest individual driver of that is price.

Okay.

We will get sequential price increases because of the export price increases that we announced recently and are implementing. We will start to get the initial benefits in our domestic containerboard channel and in boxes well and as Jeff said the implementation will be very consistent with the implementation of the $40 per ton increase and by the time we exit the fourth fiscal quarter we anticipate that we will be would be a full run rate.

Okay. That's helpful.

And then one more question for you Ward. From a cash flow standpoint I know you excluded MPS [you have encoded].

Can you provide some color on contribution you think it's going to have for this year and in land sales you guys are able to monetize it well quicker this year so that the big left on cash flow for 2017 but how should we think about the lumpy for 2018?

Let me start with the second question. So I will give a buildup of how we get to the $300 million of the land accelerated monetization efforts.

We started the clock on that in Q4 of FY2016 and we had about $10 million that was contributed. If we achieve the $175 that means that we will have about between $100 and $150 million to go in fiscal 2018 and that's our current plan.

Now I forgot you gave me two questions I forgot the second question?

The MPS do you say know the deal has been closed but any color on the contribution on cash flow but actually the share?

What I would look at is I would just refer you to their historical public filings and look at their unleveled free cash flow generation. We will have more details when we actually closed the transaction and then have a forecast of how it's embedded and along with our integration plans, but at this point I would point you to their historical public filings.

Okay. Thanks.

Yes, good morning.

Good morning, Chip.

First question have to do just making sure we understand the tax rate in the last quarter. It depends on I guess the non-controlling interest bill.

It looks like it was pretty high on operations like 38% but in Ward if you could clarify that. And then secondly, I'm not sure if you all actually had any land sales cash in 2016 so is that mean you have about $125 million left in 2018 if you hit the $150 to $175 target?

So Chip I just answered your second question and the last question. We did $10 million in Q4 FY2016 so of land sales.

So it's approximately $115 million that would be required next year to get to the high end of the range. If I would point you on the adjusted - the tax rate for adjusted EPS was just over 34% current quarter.

The best thing for you to do is to go to the press release the last page in the press release have all the adjustments and the associated tax related to those adjustments and then you can bridge back to the 34%.

Yes, well, I just it wasn't clear how the non-controlling 6.4% was treated but I see what you're doing here? So is that makes sense.

Yes, and so our guidance going forward is still 34%, our cash tax rate for the full-year will approach 38%.

And then just real quickly more for Steve, as you think about the MeadWestvaco acquisition? Have you found any ways to benefit cross segments from that and what I mean particular what OCC spiking like it has - has it and thinking about the first quarter being seasonally slow for CNK?

Is there any way you can sort of bridge that in any way whereby you know maybe you actually are better off as a company slowing back you know recycle mills and maybe making a little bit of just linerboard at March.

Yes, Chip this is Bob Feeser. We are actually integrating if you will March as part of the overall containerboard system and where it makes sense in those offered periods to actually run a little bit of craft linear to do exactly what you indicated.

So that's actually a nice positive that we see as part of the overall merger.

Understood thank you.

Chip, I just go on from there, when we - the idea of the merger was to build the paper and packaging leader and consumer and corrugated packaging. I go back and look at what we saw it periodically in the time we announce merger and we're just spot on what we intended to do.

So we've got leadership positions in the businesses we operate. We've integrated to outstanding organizations.

We're focused on customers who are larger more balanced in our Company. And we have I think a terrific slate of investment opportunities both internally and potentially be acquisition.

But just kind of put us in a great position going forward. I just want to add that to your question, since you brought up the merger.

Well, I'm not sure I would have ever anticipated when I just asked, but it certainly is clear that's one big positive. Thank you.

Thanks. Good morning everyone.

First of all, just on Star Pizza was that about a $35 million acquisition and what multiple was paid please?

We haven't put out this specific numbers on that. I think the purchase price here in the zone of what it was and I think we haven't announced a multiple, but it's a very attractive multiple for us particularly when you put in the 20,000 tons of annual containerboard integration.

We have as a result.

I recognize it small, but still nice to see it integrating. And then I want to get a bit more color on exports if you would.

So you've got both a price increase and if I'm not mistaken just a diminishing discount, so can you give us a sense of what the mill nets or how they might be changing year-over-year?

I'm sorry, what are changing? I didn't hear with you.

I guess I'm calling it mill nets because I think you've got both an explicit price hike, but also the discount in the export is getting smaller. So I'm wondering how much more you're actually capturing in the export market per ton?

Well, we've increased significantly from the low point exports and the markets are strong that we're serving. It's a good market for us and I'd say that from a low point we have significant increases that we're putting through right now.

Okay, thank you.

Hi, good morning.

Good morning.

On the free cash flow guidance, I was wondering if it's possible that quantify the expected impact working capital, I think you said it was maybe a $70 million source of cash earlier in the year, has that changed?

Anthony, this is Ward. It has not changed materially.

Okay. Okay, that's helpful.

And then just going back to export containerboard, is it possible, but qualify the export price increases that you're currently implementing that maybe aren't looks like that and kind of the latest pulp and paper week? Are they kind of on the order of magnitude of $30 a ton, $50 a ton, any kind of color you can give us across the major market you ship to?

As I said Anthony, we are in the process of implementing. I think part of the drag was we had the 33,000 tons in the quarter that we moved over that sort of diminish the flow through some of the pricing.

But we're in the midst right now of the increase and we are moving to significantly in those markets.

Okay, that's helpful.

Hi good morning.

Good morning.

Jeff, quick question on the volumes within the corrugated segment, you were up 1% this quarter and the industry up - was up about 2% and I think you were slightly below the industry in the prior quarter as well. But you mentioned maybe some end market exposure like Ag and maybe there's some geography there.

Is there anything specific to point to as to the underperformance relative to the industry and maybe we start to recover that as we move into the back half of the year based on your exposure?

Hi, Scott. So I think there's a lot of dynamics that effect volume overall in the short-term.

There has been some weather things there's lots of things that happen in the markets that affect short-term. Over time we were serving markets in segments and we believe we can add value to our customers and to our business in a differentiated strategy and I am fully expect that over the term - the long-term which we have shown over the long-term we can grow at the market and beyond.

Okay and we see announced that they were putting on hold their recycled fiber recycled containerboard index. For a while, but they are also exploring a more objective calculation methodology for pricing on a go forward basis any initial thoughts on what that would do as far as volatility in pricing for containerboard?

I mean it's too early to tell I don't know enough about the performance space yet my position as we think the current index works well it's a good indication of movement and we prefer that we keep the same baseline that we have now, but I don't know enough to say what it will do in the future.

Okay. But last one for Ward just on you mentioned the $70 million positive working capital, but you have $150 million of in additional raw materials headwind.

So where is the from a working capital perspective where is the variance relative to that that gets you still that $70 million positive.

So that's a point over time - that's the inflation's over the course of the whole year and the working capital set up, a point in time at the end of the year what I will say is that we've done a good job of managing inventories and our procurement organizations soon a fantastic job of implementing our supply chain financing program and extending terms with our vendors.

Okay. Thanks guys.

Okay. Thank you, Chris, and thank you to our audience for joining today's call.

As always reach out to us. If you have any questions, we're happy to help.

Have a great day everyone.