PKG - Earnings call transcript Q4 2019 | Packaging Corporation of America

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Operator

Thank you for joining Packaging Corporation of America's Fourth Quarter and Full Year 2019 Earnings Results Conference Call.

Your host today will be Mark Kowlzan, Chairman and Chief Executive Officer of PCA. Upon conclusion of his narrative, there will be a Q&A session. I will now turn the conference call over to Mr. Kowlzan and please proceed when you are ready.

Mark Kowlzan

you. Thank thank Quarter participating Earnings and Call. and of Packaging Release all Fourth America's Full you morning in for Corporation Conference Good Year XXXX Mark of I'm and PCA. Chairman Kowlzan, CEO Tom on call runs me packaging Bob Financial and our business; Vice with And our today is; President Hassfurther, the who Chief Officer. Mundy, Executive

And call over overview results details. of the I'm going I'll to then provide and and then to fourth who'll quarter begin up we'd I'll it things our with an turn Tom Bob take year and and glad be wrap full questions. further then to

Yesterday, the we quarter debt million net XXXX lock November which refinancing company's certain $XX premiums income Fourth or special treasury balances. included of for items of XXXX fees unamortized debt reported $XXX for fourth redemption and quarter write-offs income million, issuance included share. with $X.XX financing and associated per costs primarily net costs

fourth compared the fourth quarter net share Fourth sales per XXXX items, was quarter net were or $X.XX $X.XX income net income per million of to billion and both share. Excluding XXXX. XXXX or special $XXX in $XXX the $X.X XXXX quarter million

was for million EBITDA company special in $XXX items fourth $XXX quarter XXXX and Total in million excluding XXXX. the

or XXXX per We compared or million $X.XX items share. of to special also per XXXX reported items $X.XX year special earnings, $XXX of share full excluding $XXX million earnings excluding

sales both Net and in were $X billion XXXX. XXXX

press and items XXXX both XXXX XXXX EBITDA the Details total in items billion XXXX. and of special the the that Excluding quarter accompany in included full the in for $X.XXX $X.XXX special earnings schedules compared company release. was were to fourth the year billion

earnings mix the the fourth quarter our special compared and outside Packaging to quarter service material primarily primarily prices Business XXXX increases by $X.XX costs other segment in of in expenses, costs decrease inflation per share items, costs. driven and benefits repair was to the lower fourth Excluding $X.XX; and due Paper higher labor $X.XX; $X.XX, and of chemicals, related segment operating with XXXX

of expense new higher start-up $X.XX Washington related other We and also at our plant costs of expense of $X.XX depreciation Richland, pension higher had including $X.XX. non-operating costs

These Lower Paper expenses higher lower expenses by outage our $X.XX $X.XX $X.XX. freight items segment offset volumes of Packaging segment annual and and and of were partially $X.XX. logistics in

Looking at of fourth $X.X in in of excluding sales of $XXX billion XXXX billion with business, last $XXX year's XX% packaging our sales and EBITDA resulted EBITDA special million of margin. the items or million quarter XX% a $X.X of margin versus a

a run to cost-effective to manner. in our system containerboard very demand We continue

production quarter achieve shipments quarterly Our for necessary the maintain to our a mill supplied containerboard a record new and box day rate. allowing shipments fourth us to box all-time record industry-leading integration total new per for

containerboard and further which alone, our in mix costs, West the on us provide inventory and quarter freight start-up to the $X of customers gives the in and at Wallula Our an grades. of to all entire new now Richland, of weight full had from weight, to the and Mill over Washington optimize box excellent quality flexibility during This the million and quarter Pacific take of the for our its logistics in we're capability the linerboard grades heavier needed the produce the the and the machine high-performance from advantage benefit. Coast conversion the to board type lighter the with and provided system-wide Northwest system benefits levels way beginning down high-performance the the plant our reduced fourth

billion year full margin sales $X.X XX.X% or with the year $X.X sales compared EBITDA excluding with of segment XXXX, $X.X full EBITDA XX.X% of or to $X.X margin. special For packaging billion was billion billion XXXX items a of

on containerboard the details turn it to corrugating going business. now I'm sales to provide in more over who'll Tom,

Tom Hassfurther

Mark. Thanks,

fourth which As day, well per compared we which last in were up products, year's quarter as all-time last X.X% volume Mark compared X.X%, a shipments containerboard sales to year's year. was of to while had were an third XXXX, box X.X% up higher quarterly below volume. as shipments, quarter, up Outside fourth to quarter indicated, record total of last quarter export X.X% fourth over due corrugated record the

prices mix. annual we box both XXXX. full containerboard and together quarter X.X% than quarter $X.XX XXXX, XXXX XXXX of below per fourth and levels were to prices share the corrugated rich were down third versus XXXX. lower and compared a per records down the up due the shipments $X.XX box $X.XX year per less the per For $X.XX third of XXXX, of and per containerboard and established to quarter share total shipments day, quarter new Export products Domestic share mix for versus share fourth

back I'll now turn it to Mark.

Mark Kowlzan

Tom. Thanks,

margin in excluding $XXX XX% did and at fourth the by with or margin. good XX% of system items special Looking inventories XX% segment, the paper the versus EBITDA of compared sales XXXX XXXX. almost as ran and inventories quarter of fourth the our we quarter, office managing to $XX during $XX million to the EBITDA of a quarter paper third million the a or quarter of $XXX demand We job reduced million sales was million our

quarter expenses. the slightly mix quarter quarter year was although well at Throughout levels above anticipated better well. or and as expected, quarter, the input and volume lower XXXX [Audio last better control Gap] were the third the than as the prices as as Volumes than of in mills costs during -- over during anticipated logistics and freight

back reflect Mill in Wallula hard $X paper to segment all Paper are XXXX decision employees were exit or [ph] million XXXX. $XXX sales items For business compared of $XXX the the XX% full to as or best well of full results and special million with dedication we've the billion EBITDA margin These and as by sales XX% ever at our the achieved and XXXX, year was million EBITDA, work in excluding margin. the business $XXX paper and year strategic pressure-sensitive white the

to now to turn over I'm going Bob. it

Bob Mundy

Thanks, Mark.

$XXX common and of associated our totaled We quarter generation million, $XX million $X for net flow $XXX payments million, dividends and the of capital free fees by debt cash $XX cash in primary million. interest included tax the expenditures million $XX good $XX and with payments for million have very of federal quarter refinancing, cash pension of stock million. during premiums of uses with million redemption income fourth The payments, cash state $XXX provided and operations of

We in with cash $XXX cash marketable on the you securities the on include or to generate $XXX In the million for moved a to million, from $XXX interest our ended income hand million quarter addition, of of marketable sheet during order quarter. cash, higher our securities. portion if balance

average maturing a X.XX% existing in During the $XXX refinanced in marginal billion. increase notes company's unchanged X.X% XXXX, we XX debt and new X.X rate just of XX.X extend in over resulted maturing years. debt cash company's in of overall X.X% and at Gross million from This maturity XXXX quarter the and only interest remained XX-year $X.X with the our notes years notes. to

XXXX, cash spending million $XXX billion. For cash record Capital was operations free flow $X.X a was record from million. a was and $XXX the full year

and XX% XX%. effective XXXX final was tax Our rate final rate our for tax cash was

to the items $XXX year, of $XXX certain we capital year to be total expect upcoming million. expenditures for key full estimates million Regarding between

postretirement pension million we're $XXX is approximately to $XX million, benefit cash and of expecting expected contributions benefit post-retirement expense of $XX and million. pension DD&A and be plan

XXXX and for Our is $XX our in cash book to million. full effective approximately state XXXX XX%. tax net estimate about be our expense million be for year The interest XX% and tax rate cash interest combined approximately approximately should expected rate and $XX is payments federal

are the of quarter on of quarter. earnings fourth a our share of As we quarter during are two this first in mill the a have year of only planning versus call, our paper will versus In XXXX six have moving XXXX. of from XXXX containerboard mills one mills negative outages three and to This total, year's per per at of the volume $X.XX, we last planned quarter of these for we XXXX. $X.XX nine in mentioned scheduled XXXX. approximately first impact the outages first versus in earnings first and for quarter's last scheduled Four outages heavy outages of quarter share the

repair share quarter, $X.XX the for per The quarter. total including volume, costs amortized current and lost and $X.XX to direct quarter the third The outages per expected is fourth first be in to second, impact in of costs, these XXXX earnings XXXX. in $X.XX by share impact is the in the $X.XX $X.XX compared share in estimated per per $X.XX quarter share

to turn I'll now it back Mark.

Mark Kowlzan

you, Thank Bob.

last year for from impact well we prices of decreases linerboard our prices through ahead, the published system lower the the domestic packaging from recent price medium. negative in Looking we expect segment, January impact as move as In as published quarter the containerboard decreases the remaining and first of the XXXX. the as worked into

We also export volumes shipments. product will mills prices. to be largest scheduled quarter. at three expect But higher outages our corrugated the due do lower during lower expect we Containerboard

Alabama will in Jackson as mill. have the as our In our levels due well fourth and at volumes segment, better-than-expected we to paper be lower quarter, the the outage scheduled

increases. be XXXX. earlier, areas costs rail be one due first in increases certain to the As Freight outage in fourth will in with quarter higher versus will scheduled costs mentioned four quarter outage of significantly scheduled scheduled the than just related and Bob higher the rate

weather costs be with higher our timing and costs, in related wood will purchased of wage costs. and repair most benefit will material seasonally other colder electricity be annual energy and expenses. and with inflation Labor and increases There while increase will chemical

rate be earnings our per quarter we these to first tax depreciation We higher. expect items $X.XX share. also expect Considering and expense of slightly

our some statements company must we'd With projections the expressed and I'd to of of involve that, statements. estimates, we've risks based differ call Thank as but in questions, to the uncertainties, happy statements the Report file Annual expectations including for the with were economy Form could of entertain you those with constituted results those forward-looking and open from and you. that, the the Actual forward-looking identified The SEC. remind on any that the questions. risk on statements. on XX-K made I on in inherent materially the factors direction current and call Mariana, like be And

Operator

comes Instructions] question with first Chip [Operator Research. from you. Dillon Your Thank Vertical

[Technical Difficulty]

Mark Kowlzan

aid so integration continue margins. -- And the continues to will our

Bob Mundy

Yeah.

a down SBS on such our liquid that elements the has little I'll thanks that markets we -- specified sell specialty tobacco of touched way serve the bit So and print volume in really this those commercial end comment is to the... the have -- just look you XX% at integration consumer And some we're situations on. as we and maybe user packaging. And about maybe in

Difficulty] [Technical

Operator

America. Staphos from question George comes Bank Your with next of

Your line is open.

George Staphos

a much too guidance. Hi, details. I go a the the to of pricing want for everyone. versus forward you when $X.XX fourth we don't all around amount comfortable larger I price relative third quarter, and quarter Good negative avoid bit third third look discussion, fourth versus morning. what the there to $X.XX-plus bridge, look But more was we or beyond normally mix quarter to an a this of it Thanks and and quarter. packaging, was quarter are on know quarter increased with. need at I think like was

had the other purely that mindful have mix or wouldn't should I rollover through Thank effect of I that pricing any continued related a effect to rolling a Was there follow-ons. colony? Was big deal, what of And maybe the that recycled prior liner and was we other contracts? of or is the this be you. while of couple you? the any And of expect it

Tom Hassfurther

is Hey, George, Tom. this

George Staphos

Tom. morning. Hey, Good

Tom Hassfurther

fourth through I'll fourth price the quarter over related also the was as of mentioned and year. that well primarily it -- the mix quarter to was we had decreases fourth you to quarter the compared the But related was variance it just that place both rollover third tell taken as price quarter.

it pretty virtually us what did The the have? in we liner before. I recycled on side. impactful that So not it's our mean pricing much as to mentioned that's impact businesses

George Staphos

maybe you want this Was it. a have could little mix export is it I detail quarter? not good quick much bit being anything might there wouldn't you to less but too us you Or And in ecommerce? all into was at for here, just update expected up I give a sequentially? if on else go know Okay. there?

turn last then it And question over. I'll my

you expected. on that going market? were from going was volumes think better the for relative Why Thank paper than guys. to What case commercial was you standpoint? what in you, do was the mentioned a well You

Tom Hassfurther

that that was talk was had concerned George. regarding part dramatic and mix a of the It's don't mix impact. mean was that say is Okay, your I'd impact -- biggest mix. question I we obvious about really and our as up that as much. export far the that

maturing we've about strong. remains a before, I somewhat ecommerce It Ecommerce, think it's as talked market. -- as

it. So in were emergency the I than industry, that think would a And better the right got those sales we've much end the quarter of we on quarter. the as see handle an stuff typically earlier up at

Regarding paper quick. volumes, real I'll turn Mark it to back

Mark Kowlzan

Yeah.

third than getting had came allocation had compare up most The then fourth customers also we balance. key into sales their quarter XXXX pick in back were were during you quarter. and And year-over-year, on And significantly again quarter third we we but expected, lower. of the lower we're volume of XXXX. But we was a number if

obviously lot were on can't pleased we we volume with of provide a So, developed. say to except that the that details that

George Staphos

it turn Okay. Thank over. guys. you I’ll very much,

Mark Kowlzan

Okay.

please. Next question,

Operator

quirks. for apologies Our the

Chip Research. Dillon Vertical Your of next from the comes line question from

Your line is open.

Chip Dillon

can Hopefully Good you guys me Hi. okay? hear morning.

Mark Kowlzan

go Chip ahead. Yes,

Chip Dillon

Okay.

Thanks with understand guys I bit fully -- to we goes about morning. question my you much. much are a And we lot Okay. Good preparation of lot think don't do year. maybe into this very that. a a downtime taking guess for has quite maintenance first -- that think -- is when there's the how My

is my months that it's now a better did so the question time you you In was out this and And bit as a is and ago? bit Is be of a incentive other say years look affecting the when two of push maintenance? looser. now industry XX world half this an of the say pursuing ago, words, to at some so it some little kind And from timing this of to tight, a ago, work? have year

Mark Kowlzan

on of No, the some rotation. Chip. now The an mills way are our fall XX-month shutdowns

turbine what first And quarter, then year that and with skip on up work mills so end there some up the some you way are and such describing. falls we the boiler of as, years a in generator the a actually just end work with we're

and nothing has to managing demand it the adhering assets. meeting basically to requirements take or to our do policies It's maintenance with So just of inventories. care mill our

Chip Dillon

recycling a a you won't board That's that mean follow-up, ramps be just to are Okay. then least now? you helpful. buying certain update Wallula. could for add capability Western United bit the recycled project buying project box if little on quick And recycled up? in at you to And customers us right as board that And will the States

Mark Kowlzan

the year For running Tom we Wallula, the second question, to the part of to the expect And question? plant want schedule. the on do have OCC at that's first up by and end then you the well of address so

Tom Hassfurther

we on recycled buy the don't outside Chip, Yeah. market.

our which said, primarily many, containerboard require we've performance-based many is a As times all virgin. customers

board. that add project the some virgin furnish Now, the not is a to at recycled be designed to even it recycling the just able to fact does change will Wallula be it

Chip Dillon

All Okay. Very super. you. right, Thank helpful.

Mark Kowlzan

Okay.

Next question, please.

Operator

Capital Your Wilde BMO next with Mark from question comes Markets.

open. line is Your

Unidentified Analyst

Mark. on [ph] Brown Jessie for is This

question. first our Just

sitting And allocation Can like kind guys capital is cash. that your looking all kind quite on for You plans you for about talk what cash? of of XXXX? your are a of bit

Mark Kowlzan

I we where certainly are and we quite prior cash $XXX changed general, of just that again, not be down with haven't in plans $XXX acquisitions capital wasting opportunities of on still and will $XXX is opportunistic dollar where we're out terms not level content we few we're The on million and our cash buyback million. capital calls We're spending said could then in called it. that a cash cash. the be We we the and uses doing. And but share as million, a what remain lower

the will at provide it right good time. So, value

Unidentified Analyst

you the pulp markets for any turn over. Are export me. Thanks. guys Finnish paper on from sensing follow-up impact And then and I just will strike? one it

Mark Kowlzan

I haven't see do seen you anything, anything? Tom

Tom Hassfurther

No, haven't seen anything we no to no. date

Mark Kowlzan

Next question, please.

Operator

Connelly Mark from Stephens comes question next Your with Inc.

is line open. Your

Mark Connelly

actually Mark, down. outage and accustomed now go build outages. ahead maintenance you've Thanks. inventories inventories of you we're big maintenance really seeing you've to big a got And let

content So Or running inventory? less of your with higher inventory in just you've levels than sort whether are think? can – you is are and you talk better your about I inventory

Mark Kowlzan

two startup Wallula at Obviously, we the plant. When came for are there September our plans we And month to there. anticipate Well, that the new of obviously XQ. through of and looking the box Mill Richland were the factors had we impacts production.

the continued that the corrugated that outside, mode containerboard was and September, products, capacity demand box required start started to last fact export quarter. and we the We to some on had that. full plant the of had the Richland up running the schedule couple So and capacity through right to running – extra for that extremely supply well. board our across started sales entire full during for of running weeks system fourth Also,

is also linerboard we'll across virgin grade the equation the of our what part worked year, kraft own have we Now high-performance that for special the to also develop usage. our system diligently own during of last call linerboard mix

it's so capability. the moving lighter high-performance system weight a into And

we sold some so extra tons. And

up that because basis we to and that grade have an you mix part the have tons was mix then And would shown were But was running supply. of equation. good would also a heavier continue grade net-net weight obviously business been older

Mill the we with in the also system Coast. the the We can West entire now supply of ability Wallula

we that system commentary the that mentioned in look inventory that at of terms the on and I And total need. how requirements

foot also boxes have saw on to basis. the We you a consider fact square that

in of when not our look square in with. tons dealing we we're our of system so inventory because a of mix at containerboard we now terms inventories to think And start feet pure just

complicated. it's So

we with Obviously the But bottom part the the run these outages outages the have and going now packaging having to a that full full question. the business. demand out of supply we as out That's to we're year. facing we're long ran come on of this we've answer side to short line run well to we're continue to a of very to always done into

Mark Connelly

No, to good well have too. problem it's a

reoptimizing And that it of system kind with fill right will with reoptimization You take long impact the up the whole business? the mentioned system Richland. of the for long Richland how will How then around to take?

Mark Kowlzan

We plant January first the And up on actually of we're plan. of right in the November. running part as started

going flexibility plant plant capacity our base, with Now in a imagine is The extremely the high-volume plant, customer lot Tom Tom, to plant, start-up seeing ramp-up is pleased. a obviously we're a comment automated what book but filling high to highly we're we're but with happy as of here. you just good could again and you out. want has order do be that really with a

Tom Hassfurther

I Mark, we'll think extent of as rolls on. ahead comment and plan say plan the now of we're would that's be what right I going just about I'm well that and year the to ahead slightly out of

Mark Connelly

Thank enough. Fair you.

Mark Kowlzan

Okay.

please. question, Next

Operator

question next Brian Your from with Maguire comes Sachs. Goldman

line is Your open.

Brian Maguire

Hey. guys. Good morning,

Mark Kowlzan

Good morning.

Brian Maguire

come Just to wanted the questions back to mix. around earlier

was increase of sell in remind many you there market market? sort sort in lower And you times export maybe is externally exports domestic could of, the the what how quarter the and towards those us why if Just shift given export and the are wondering prices just board an negative the going the, into obviously drove now? market roughly

Mark Kowlzan

our we add domestic up want own of and we in us of the through XX many able requirements And that customers. customers the Well, ended to legacy refer to around volume adequate to customers from Tom we again heard small the system ended world the to rolled what with up legacy we offshore. was probably through fourth satisfy with we that? And Again, these a are some were in countries quarter of volumes you as these lot do different you've moved years. our tons believe legacy

Tom Hassfurther

Yes.

the quarter. addition, have in I'd fourth typically just we say higher exports In that

they operating we I who low off on became this had pace were in think the pick customers particular were in very, very up to the quarter. inventories fourth and case holding necessary

Brian Maguire

remaining split between or kind integration it's within or of low overall XX% mostly level is And X% X% export? if the And guess I roughly sort export its the it of domestic XXs? margin that still and in

Tom Hassfurther

the to as look Richland year look If we XXXX we're planned. plant full at you on ended as the coming starting things with box at obviously

so at And XX%, XX% years we're all when and said level ago approaching consider XX% that supply balance as that we a XX%, of full integration. few we demand level you that's what quickly which

through the in we've up. year quarters, the so down moved were first but range And last low three we XX% integration,

this going And full to so in our to order we're order anticipated have book. run to supply year

in we're good So a place.

Brian Maguire

Okay. That's Good year. Thanks. the luck great. in

Mark Kowlzan

Next question.

Operator

comes question from next Citi. Your Anthony Pettinari with

open. is line Your

Randy Toth

is This for actually sitting guys. morning in Toth Good Randy Anthony.

Mark Kowlzan

morning. Good

Randy Toth

mentioned now think release, the you past a to design reference again. was capacity. running I that to In direct And in demand to Wallula running the

is, is that? question can XQ? you my So still what with curve, do start XQ, think up is that you. think out you in Wallula Just coming is And first referencing? about start-up the second question that Richland Thank running the how full do you

Mark Kowlzan

been footprint now We're that have as running the We've or a and fourth as using year always running we've specifically And like Wallula Coast terms two running system. capacity past opportunity have where we or of the operations and hard project term spoken West completed next on we two. over is what we've our in seen that full right year Yes. With that running throughout we'll to in Wallula means we where demand Wallula about the I've the to the plant there. speak. conversion some across to out quarter. we're the demand Richland are fine-tune out because the

machine two, Over find ways subsequent you or the out. the following stretch to year

spending. full be hard will internally. short-term it Wallula to to running for the of Some capacity now running the period, meet some is capital But right and demand

Randy Toth

Richland to XXXX? with And think year-over-year. should slightly flat CapEx we there just up plant in project understood. Is that? about large-scale how know any about to we then box that should Or Okay similar

Mark Kowlzan

projects the project advantage throughout But Coast one taking big again of XX Pacific in region. $X and Northwest to going base and in optimization taking that the of on West projects opportunity million the got that that. box the have got fact system corrugator a numerous are on have we're the lot going we've small We plant projects the the We've we out customer advantage across just a supply $X.X of projects. good debottlecking million system

So one a no host lot which on year. risk new the means of table. there's for we Richland just at just It actually plant It's good. of like finished project smaller we have opportunities, big this a don't is

Randy Toth

Thank you. it understood. I'll Okay, turn over.

Mark Kowlzan

Next question please.

Operator

next Mark with question Your comes from Weintraub Seaport.

Your line is open.

Mark Weintraub

Thank couple of you. A follow-ups.

think say wanted to I indicated Was going $X.XX the outages that this you to against -- $X.XX just First, maintenance that was did clarify, you year. was be last year?

Mark Kowlzan

Yes.

Mark Weintraub

Okay. And now does that or containerboard of production? doesn't the include the reduced impact

Mark Kowlzan

Yes. Yes, that's part of it.

I involved the that those are it remarks think tons the Mark I in prepared said included outages. with that

Mark Weintraub

trying people extent the in guess the decline I at numbers guide Okay. where versus least the the are is had out been. to XQ the figure consensus drivers to of

And where something -- besides number the related, depressing than would number timing might of related. would of be relative there's the related questions year? to you as out Is what so related to be the some outages so one course typically the which timing typically anything would is more the is that the else call there's normal XQ profitability here trajectory kind over that there of being --

Mark Kowlzan

as Yes, to first from quarter. Mark. the There are the fourth going usual

chemicals XQ, a of granting everything in of stock-based from also these there we certainly extent. just to And options, first of about XQ item weather-related If have this of a the comp historically these seasonal And have buckets $X.XX a the in energy to an quarter, benefits at that as the and usage second year. you're a timing we for stock what that we mean, resets look I because certainly, have quarter. the wages nature The impacts things describing, with restricted it's on wood units. you now of year are and new and sort the you going had occurred that lot

other a you'll quarter. move second the turns see that -- into into negative on based quarter. second will going the back you outages I But obviously, the there. obviously the way as that gave, guidance improve you'll So And

freight normalize related, -- system. move QX our we QX. of as able we the expect to freight, to less it's to out Paper -- outage the optimize that volumes, And of that some from was

could kind you all thing, So things of those up from $X.XX together, when to QX. QX you $X.XX you add as be, pick move

Mark Weintraub

Okay. expected I the quarter. That's the fourth And cash operations from down you cash that went lastly, of noticed balance given to helpful. very in be And have the I then, type would generating.

thought would gross it refinancing have stayed looked would I guess And gone it even the up. debt all like with have I the same.

can maybe you the So, in fill there? blank

Mark Kowlzan

Well, -- cash, moved the out I marketable $XXX securities. like sheet the million we the the considered balance said, on cash what's to of

So…

Mark Weintraub

Okay.

Mark Kowlzan

…you numbers really your I think will you out. count then, -- And that. need work

Mark Weintraub

I I it, Got sorry. am missed that.

much. Okay, thanks so

Mark Kowlzan

Okay, next question?

Operator

Your next Fargo question Hajde comes from Gabe Securities. with Wells

line is open. Your

Gabe Hajde

Good morning. late. apologize, I question. time bit if some And million. this I on my taking Thanks earlier, for little think But $XXX to CapEx, touched a you you're guiding $XXX to million

Did or terms additions are you capacity the pulper I'm hydro all in of reduction, speak creep all centered projects, you be assuming? might there making? within some But… that these at embedded assuming, are I'm in cost Wallula. on return-oriented And Or any

Mark Kowlzan

big got this City Filer about up That's primarily, now. We've that's right spring one of the It's bigger Mill, in new at we're completed being think -- projects summer. if involved piece the and CapEx. boiler you that

at for total operations. at, cost out project Pacific a called looking that's projects neighborhood. corrugator in $XX that Again, one I new a specifics the this million our without mentioning as But of that is year, new we're Northwest

box, growth. we of new what throughout lot good that then, see equation And a project then, Wallula a OCC of the Mill of as with the demand the just satisfy smaller And the side converting the to host opportunities plant.

reductions And in But then capital cost spending. again, capital for there's lot opportunity a business spending. of

Gabe Hajde

Thank you.

Mark Kowlzan

next Okay, question.

Operator

with Capital Markets. Your Adam KeyBanc question next comes from Josephson

open. is line Your

Adam Josephson

one… just Bob, everyone. morning, Good Thanks.

Mark Kowlzan

Good morning,

Adam Josephson

clarification … to bridge, XQ Mark you clarification. lower the cost the is $X.XX inclusive Good mentioned, on $X.XX XQ? about being morning, outage $X.XX Mark. Weintraub's Bob, sequentially, that just to one of that question

Mark Kowlzan

Yes.

Adam Josephson

missed perfect. the Okay Can me, saw seeing what fourth And demand it. perhaps quarter? if forgive in you about all I January talk you you're at to Tom, relative trends just

Tom Hassfurther

month And trend right through much we're the January Adam, now X.X%. our Yeah we're is. pretty up

Adam Josephson

a there's day if difference? forget blended, shipping That I

Tom Hassfurther

No, that's a per-day not That's per-day. a not basis,…

Adam Josephson

Okay.

Tom Hassfurther

per-day X.X% on a … basis.

Adam Josephson

Thanks, Tom.

Tom Hassfurther

next question. Okay,

Operator

Wilde Next comes from with Montreal. Your Mark Bank of question

open. is line Your

Mark Wilde

morning. Good

Mark Kowlzan

Good morning.

Tom Hassfurther

Good morning.

Mark Wilde

on that last the up startup? question in that X.X% Tom, would have much just following that Richland been is helped how by January,

Tom Hassfurther

by January the Mark. in I to more small become the don't Richland be will exact us. I important slightly helped to It's it's but mean quarter rolls on number. -- it startup, as going breakdown have this the relatively And but

Mark Wilde

And one up seems It I a can of that be on OCC to right. between over that's in. to creep back wondered mill. mill lot know fiber like and you us machines the the fiber? and going but just virgin plans the we be and this pulp of if that you're just of I All might understand help recycled long plan can Okay. when the all then how come existing to system kind additional running, to Wallula Mark, just putting optimize time, at you you're paper volume

Mark Kowlzan

Keep the mind that in in Lower is XX Wallula the basket Yeah. highest fiber our cost facility states.

of OCC the on flexibility the the currently advantage give Pacific in to entire so And marketplace Northwest us basket fiber really we take that the and the will some use of ultimate fiber region. DLK

ramping over And requirements. we opportunity give capability. the will mill an keep three the also, future truly satisfy of it up do Wallula so, to the And number years really in anticipate mind, us

some require is, again, matter OCC to just it The but are we fiber We productivity, up have system, optimize a and some so a that design quite finishing where give now truly at we're will this satisfied capital, the a machine does cost it's location. of opportunity it's plant opportunities X,XXX-ton us that a some but project. day great on with right

Mark Wilde

Okay.

on that. Just one other one little

putting fiber recycled boiler if So OCC complement some you that capital more of in to more do have to just toward capacity more there you kind spend also pivot system?

Mark Kowlzan

capacity got we've the plenty at of No, boiler No. mill.

Mark Wilde

it I’ll right. All over. turn Okay.

Mark Kowlzan

Okay.

question. Next

Operator

at [Operator back Instructions] call now There are presenters will I any remarks. turn no further questions time. closing to this for the over the

Mark Kowlzan

good to look Thank thank and results. call regarding to first today. we much, talking the April attending appreciate Mariana, you in the a very you. you everybody quarter day. forward We Have

Operator

this and for Thank participating. concludes you Ladies gentlemen, call. conference today's

You may disconnect. now

Packaging Corporation of America (PKG) 30 Jan 202019 Q4 Earnings call transcript