[Financial Performance Overview](index=1&type=section&id=Financial%20Performance%20Overview) The company demonstrated strong profitability growth and balance sheet improvement in 2023, despite sales challenges, and provided a positive outlook for 2024 [Fourth Quarter and Full Year 2023 Highlights](index=1&type=section&id=Fourth%20Quarter%20and%20Full%20Year%202023%20Highlights) The company achieved strong profitability growth in Q4 and FY2023, with increased Net Income and Adjusted EPS, improved leverage, and anticipates positive organic sales growth in 2024 Q4 & Full Year 2023 Earnings Summary | Metric | Q4 2023 | Q4 2022 | Full Year 2023 | Full Year 2022 | | :--- | :--- | :--- | :--- | :--- | | **Net Income** | $196 million | $156 million | $723 million | $522 million | | **Diluted EPS** | $0.64 | $0.50 | $2.34 | $1.69 | | **Adjusted Net Income** | $230 million | $181 million | $899 million | $722 million | | **Adjusted Diluted EPS** | $0.75 | $0.59 | $2.91 | $2.33 | Full Year 2023 Key Financial Metrics | Metric | 2023 Value | YoY Change | | :--- | :--- | :--- | | Net Sales | $9,428 million | Flat | | Net Income | $723 million | +39% | | Adjusted EBITDA | $1,876 million | +17% | | Earnings per Diluted Share | $2.34 | +38% | | Adjusted EPS | $2.91 | +25% | | Year-end Net Leverage | 2.8x | from 3.2x | - CEO Michael Doss highlighted that despite a **4% negative organic sales growth** due to inventory normalization, the company executed well, expanded profitability, and achieved over **$200 million in innovation sales**. The company is positioned for a **return to positive organic sales growth in 2024**[6](index=6&type=chunk) [Operating Results](index=2&type=section&id=Operating%20Results) Full year 2023 Net Sales remained flat due to pricing offsetting volume declines, while Adjusted EBITDA significantly increased to $1.876 billion, driven by strong pricing and favorable net performance despite lower volumes - Q4 2023 Net Sales decreased **6%** to **$2,249 million**, driven by a **$198 million** unfavorable volume/mix impact, partially offset by **$40 million** in positive pricing[8](index=8&type=chunk) - Full year 2023 Net Sales were **flat** at **$9.428 billion**, as **$556 million** in positive pricing was offset by **$580 million** in unfavorable volume/mix[9](index=9&type=chunk) - Q4 2023 Adjusted EBITDA rose to **$457 million** from **$413 million** in Q4 2022. The increase was primarily due to positive pricing ($40 million) and favorable net performance ($90 million), which offset unfavorable volume/mix ($64 million) and inflation ($38 million)[10](index=10&type=chunk) - Full year 2023 Adjusted EBITDA increased to **$1.876 billion** from **$1.600 billion** in 2022. The growth was driven by positive pricing ($556 million) and favorable net performance ($75 million), partially offset by unfavorable volume/mix ($171 million) and inflation ($169 million)[11](index=11&type=chunk) [Financial Position and Other Results](index=2&type=section&id=Financial%20Position%20and%20Other%20Results) The company strengthened its balance sheet in 2023 by reducing net debt and improving its leverage ratio to 2.8x, while increasing capital expenditures to $804 million and maintaining strong liquidity of $1.43 billion - Total Net Debt decreased by **$228 million** during Q4 2023 to **$5.234 billion**, and the **Net Leverage Ratio improved to 2.8x** Adjusted EBITDA from **3.0x** at the end of Q3 2023[12](index=12&type=chunk) - The company returned **$48 million** to stockholders in Q4 2023, comprising **$31 million** in dividends and **$17 million** in share repurchases[12](index=12&type=chunk) - Full year 2023 capital expenditures increased to **$804 million** from **$549 million** in 2022, largely due to the Waco, Texas recycled paperboard manufacturing facility project[14](index=14&type=chunk) - As of December 31, 2023, the company had available liquidity of approximately **$1.433 billion**[13](index=13&type=chunk) [Full Year 2024 Guidance](index=2&type=section&id=Full%20Year%202024%20Guidance) Graphic Packaging projects full year 2024 Adjusted EBITDA between $1.75 billion and $1.95 billion and Adjusted EPS between $2.50 and $3.00, excluding the impact of the Augusta facility sale Full Year 2024 Guidance | Metric | Guidance Range | | :--- | :--- | | Adjusted EBITDA | $1.750 billion to $1.950 billion | | Adjusted Earnings per Diluted Share | $2.50 to $3.00 | - The provided 2024 guidance excludes the potential impact of the announced sale of the Augusta paperboard manufacturing facility[16](index=16&type=chunk) [Consolidated Financial Statements](index=5&type=section&id=Consolidated%20Financial%20Statements) This section presents the company's detailed consolidated financial statements, including the statements of operations, balance sheets, and cash flows for the reported periods [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) For the full year 2023, Net Sales remained stable at $9.43 billion, while Income from Operations grew to $1.17 billion and Net Income increased by 39% to $723 million due to cost controls Full Year Statement of Operations Summary (in millions) | Line Item | 2023 | 2022 | | :--- | :--- | :--- | | Net Sales | $9,428 | $9,440 | | Cost of Sales | $7,311 | $7,610 | | Income from Operations | $1,174 | $906 | | Net Income | $723 | $522 | | Net Income Per Share - Diluted | $2.34 | $1.69 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of December 31, 2023, Total Assets increased to $11.18 billion, primarily from property, plant, and equipment, while Total Shareholders' Equity grew over 29% to $2.78 billion Year-End Balance Sheet Summary (in millions) | Line Item | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Total Current Assets | $2,845 | $2,706 | | Property, Plant and Equipment, Net | $4,992 | $4,579 | | **Total Assets** | **$11,175** | **$10,328** | | Total Current Liabilities | $2,589 | $1,933 | | Long-Term Debt | $4,609 | $5,200 | | **Total Liabilities** | **$8,393** | **$8,178** | | **Total Equity** | **$2,782** | **$2,150** | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the full year 2023, Net Cash Provided by Operating Activities was $1.14 billion, while Net Cash Used in Investing Activities more than doubled to $1.03 billion due to increased capital spending Full Year Statement of Cash Flows Summary (in millions) | Line Item | 2023 | 2022 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $1,144 | $1,090 | | Net Cash Used in Investing Activities | $(1,025) | $(435) | | Net Cash Used in Financing Activities | $(106) | $(666) | | Net Increase (Decrease) in Cash | $12 | $(22) | [Reconciliation of Non-GAAP Financial Measures](index=8&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) This section provides reconciliations of non-GAAP financial measures, including Adjusted EBITDA, Net Debt, Adjusted Cash Flow, and Net Organic Sales Growth, to their most directly comparable GAAP measures [Reconciliation of EBITDA and Adjusted EBITDA](index=8&type=section&id=Reconciliation%20of%20EBITDA%20and%20Adjusted%20EBITDA) For full year 2023, Net Income of $723 million was reconciled to an Adjusted EBITDA of $1.88 billion, with the Adjusted EBITDA margin significantly expanding to 19.9% from 16.9% in 2022 Full Year Reconciliation of Net Income to Adjusted EBITDA (in millions) | Line Item | 2023 | 2022 | | :--- | :--- | :--- | | Net Income | $723 | $522 | | Interest, Taxes, D&A, etc. | +$1,072 | +$947 | | **EBITDA** | **$1,795** | **$1,469** | | Special Charges | +$81 | +$131 | | **Adjusted EBITDA** | **$1,876** | **$1,600** | | **Adjusted EBITDA Margin** | **19.9%** | **16.9%** | [Reconciliation of Net Debt and Leverage Ratio](index=9&type=section&id=Reconciliation%20of%20Net%20Debt%20and%20Leverage%20Ratio) The company's Net Leverage Ratio significantly improved to 2.79x at year-end 2023 from 3.21x in 2022, driven by a 17% increase in Adjusted EBITDA despite a slight rise in Total Net Debt Net Leverage Ratio Calculation | Metric | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Total Net Debt | $5,234 million | $5,133 million | | Adjusted EBITDA (LTM) | $1,876 million | $1,600 million | | **Net Leverage Ratio** | **2.79x** | **3.21x** | [Reconciliation of Cash Flow](index=9&type=section&id=Reconciliation%20of%20Cash%20Flow) Adjusted Net Cash Provided by Operating Activities increased to $1.297 billion in 2023, but Adjusted Cash Flow decreased to $493 million due to significantly higher capital spending Adjusted Cash Flow Calculation (in millions) | Line Item | 2023 | 2022 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $1,144 | $1,090 | | Adjustments | +$153 | +$159 | | **Adjusted Net Cash Provided by Operating Activities** | **$1,297** | **$1,249** | | Capital Spending | $(804) | $(549) | | **Adjusted Cash Flow** | **$493** | **$700** | [Calculation of Net Organic Sales Growth](index=10&type=section&id=Calculation%20of%20Net%20Organic%20Sales%20Growth) The company reported a negative 3.9% Net Organic Sales Growth for full year 2023, a non-GAAP metric adjusted for various factors to reflect underlying business performance Full Year 2023 Net Organic Sales Growth Calculation (in millions) | Line Item | Amount | | :--- | :--- | | Net Sales | $9,428 | | Less: Open Market Paperboard Sales | $(1,022) | | Less: Impact of Acquisitions | $(53) | | Less: Impact of Pricing | $(514) | | Less: Impact of Foreign Exchange | $(13) | | **Net Organic Sales** | **$7,826** | | Prior Year Net Organic Sales | $8,140 | | **Net Organic Sales Growth** | **(3.9)%** |

Financial Performance - Net Sales for Q3 2023 decreased by $102 million or 4% to $2,349 million compared to $2,451 million in Q3 2022, attributed to lower organic sales and open market volumes, partially offset by higher pricing and favorable foreign exchange [144]. - Income from Operations for Q3 2023 decreased by $6 million or 2% to $287 million from $293 million in Q3 2022, impacted by accelerated depreciation and inflation-related costs [144]. - Net Sales for the first nine months of 2023 increased by $125 million or 2% to $7,179 million from $7,054 million in the same period of 2022, attributed to higher pricing and new product introductions [156]. - Income from Operations for the first nine months of 2023 increased by $246 million or 39% to $884 million from $638 million in the same period of 2022, due to higher pricing and cost savings [157]. - Net Sales for the Paperboard Mills segment in Q3 2023 decreased to $236 million from $345 million in Q3 2022, primarily due to lower open market volume [167]. - The Americas Paperboard Packaging segment's Net Sales for Q3 2023 were $1,569 million, slightly down from $1,577 million in Q3 2022, with lower organic sales offset by higher pricing [167]. - Net Sales for the first nine months of 2023 amounted to $5,446 million, with Income from Operations at $799 million and Net Income at $482 million [187]. Acquisitions and Investments - The Company completed the acquisition of Bell Incorporated for $264 million in September 2023, adding three packaging facilities [148]. - The Company acquired Bell Incorporated in September 2023, contributing to new product introductions in the Americas Paperboard Packaging segment [171]. - Net Cash Used in Investing Activities for the first nine months of 2023 was $875 million, compared to $367 million in 2022, including acquisitions of Tama and Bell Incorporated [183]. - The Company completed the acquisition of Bell Incorporated for $264 million, enhancing its packaging capabilities [177][183]. - The Company's capital investments for the first nine months of 2023 were $587 million, up from $313 million in the same period of 2022, primarily due to the construction of a new CRB mill in Waco, Texas [201]. - Total capital investment for 2023 is expected to be approximately $800 million [210]. Debt and Financial Flexibility - The Company reported a total outstanding debt of $5,608 million as of September 30, 2023, which may restrict its financial flexibility and ability to respond to market changes [142]. - The Company reported a maximum Consolidated Total Leverage Ratio of 2.74 to 1.00 as of September 30, 2023, compliant with the covenant requirement of less than 4.25 to 1.00 [199]. - The Company expects sufficient liquidity from cash flows and revolving credit facilities to meet ongoing cash requirements for at least the next twelve months [189]. - The Company has active interest rate swap agreements with a notional amount of $750 million expiring on April 1, 2024, to manage interest rate risks [214]. Cost and Inflation - The Company experienced a cost increase of $149 million for the nine months ended September 30, 2023, primarily due to higher labor and benefits costs [136]. - Inflation for Q3 2023 increased by $11 million compared to Q3 2022, driven by higher labor and benefits costs of $22 million, offset by commodity deflation of $32 million [151]. - Income from Operations decreased due to commodity inflation, lower organic sales, and increased impairment charges related to the divestiture of Russian operations [174][176]. Operational Changes - The Company announced the closure of three packaging facilities by the end of 2023, consolidating production into other plants [148]. - The Company has implemented strategies to reduce costs and improve productivity through continuous improvement initiatives and Lean Sigma principles [138]. - The Company’s core packaging volumes were lower in several categories, including beverage and dairy, while foodservice volumes increased [149]. Tax and Impairment - Income Tax Expense for Q3 2023 was $54 million on Income before Income Taxes of $224 million, with an effective tax rate impacted by charges related to the divestiture of Russian operations [153]. - The Company recorded a $12 million non-cash impairment charge related to its packaging plants in Russia, reducing the carrying value of goodwill for these facilities to zero [208]. - The Company expects its U.S. federal cash tax liability in 2023 to be reduced by approximately $112 million due to remaining net operating loss carryforwards [155]. Cash Flow and Expenses - Net Cash Provided by Operating Activities for the first nine months of 2023 totaled $702 million, an increase from $620 million in the same period of 2022 [182]. - Capital spending increased to $592 million in 2023 from $445 million in 2022, driven by the construction of a new CRB mill in Waco, Texas [183]. - Capitalized interest costs incurred during the first nine months of 2023 were $3 million, compared to $4 million in the same period of 2022 [202]. - Depreciation and amortization expense is projected to be between $615 million and $625 million for 2023 [212]. Credit Rating - The Company’s credit rating is BB+ by Standard & Poor's and Ba1 by Moody's, both with a stable outlook [200].

Graphic Packaging Holding Company (NYSE:GPK) Q2 2023 Earnings Conference Call August 1, 2023 10:00 AM ET Company Participants Melanie Skijus - Vice President, Investor Relations Mike Doss - President and Chief Executive Officer Steve Scherger - Executive Vice President and Chief Financial Officer Conference Call Participants Ghansham Panjabi - Baird Mark Weintraub - Seaport Research Partners George Staphos - Bank of America Mike Roxland - Truist Securities Adam Samuelson - Goldman Sachs Cleve Rueckert - UBS ...

August 1, 2023 FORWARD LOOKING STATEMENTS • This presentation includes certain historic financial measures that exclude or adjust for charges or income associated with business combinations, facility shutdowns, extended mill outages, sales of assets and other special charges or income ("Non-GAAP Financial Measures"). The Company's management believes that the presentation of these Non-GAAP Financial Measures provides useful information to investors because these measures are regularly used by management in ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Table of Contents FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to COMMISSION FILE NUMBER: 001-33988 Graphic Packaging Holding Company (Exact name of registrant as specified in its charter) Delaware 26-0405422 (State ...

Graphic Packaging Holding Company (NYSE:GPK) Q1 2023 Earnings Conference Call May 2, 2023 10:00 AM ET Company Participants Melanie Skijus - Vice President of Investor Relations Michael Doss - President and Chief Executive Officer Stephen Scherger - Executive Vice President and Chief Financial Officer Conference Call Participants Ghansham Panjabi - Baird Cleveland Rueckert - UBS George Staphos - Bank of America Kieran de Brun - Mizuho Mark Weintraub - Seaport Research Mike Roxland - Truist Securities Adam Sa ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to COMMISSION FILE NUMBER: 001-33988 Graphic Packaging Holding Company (Exact name of registrant as specified in its charter) Securities registered pursua ...

Q1 2023 NET SALES PERFORMANCE 1.The impact of Foreign Exchange is measured as the increase or decrease in sales for the current period by applying 12 prior period foreign currency exchange rates to present a constant currency comparison to prior periods Q1 2023 ADJUSTED EBITDA PERFORMANCE +38% RUNNING A DIFFERENT RACE – COMPELLING INVESTMENT CASE RECESSION RESISTANT MODEL • Core folding carton volume declined 3.6% y/y • Adj. EBITDA improved $81M y/y to $556 million or 14% y/y • $54M increase in Adj. EBITDA ...

Environmental Compliance and Sustainability - The company spent $9 million in 2022 on environmental compliance projects, with estimated spending of $30 million in 2023 and $23 million in 2024, primarily for wastewater treatment system upgrades at the Augusta, Georgia mill[67] - Climate change presents both challenges and opportunities, with potential regulatory costs and increased demand for lower-carbon products and technologies[67] - The company's Vision 2025 outlines plans for sustainable growth, focusing on long-term earnings growth while prioritizing people and the planet[68] Cost and Risk Management - The company faces risks from significant increases in raw material, energy, and transportation costs, which could adversely impact financial results if unable to pass on costs to customers[73] - Productivity improvements and global continuous improvement initiatives are used to reduce costs and build supply chain resilience, though success is subject to operational and economic uncertainties[74] - Changing customer and consumer preferences, including environmental concerns, could impact sales volumes if the company fails to adapt[75] - Competition from other manufacturers and product substitution, driven by price, quality, and environmental concerns, could adversely affect financial results[76] - Approximately 62% of the company's employees are unionized, posing risks of work slowdowns or strikes that could negatively impact financial results[81] - Capital spending on projects may not achieve desired benefits, potentially impacting cash flow and operating results[87] Financial Performance and Metrics - Net sales of $9,440 million in 2022, up from $7,156 million in 2021[233] - Net income attributable to Graphic Packaging Holding Company of $522 million in 2022, compared to $204 million in 2021[233] - Total cash consideration for the AR Packaging acquisition was $1,412 million, with a final purchase price allocation of $1,487 million[321][324] - Net sales from AR Packaging of $1,135 million and a loss from operations of $17 million in 2022[325] - Short-term debt and current portion of long-term debt totaling $53 million in 2022, down from $279 million in 2021[328] - Total assets decreased from $10,457 million in 2021 to $10,328 million in 2022, a decline of 1.2%[240] - Net income increased significantly from $216 million in 2021 to $522 million in 2022, a growth of 141.7%[246] - Cash and cash equivalents decreased from $172 million in 2021 to $150 million in 2022, a decline of 12.8%[240] - Long-term debt decreased from $5,515 million in 2021 to $5,200 million in 2022, a reduction of 5.7%[240] - The company paid cash dividends of $92 million in 2022, compared to $87 million in 2021, an increase of 5.7%[301] - Net cash provided by operating activities increased from $609 million in 2021 to $1,090 million in 2022, a growth of 79%[246] - Capital spending decreased from $775 million in 2021 to $522 million in 2022, a reduction of 32.6%[246] - The company increased its quarterly dividend by 33% to $0.10 per share in September 2022[301] - Retained earnings grew from $66 million in 2021 to $469 million in 2022, an increase of 610.6%[240] - Total equity increased from $1,893 million in 2021 to $2,150 million in 2022, a growth of 13.6%[240] - Net receivables increased to $879 million in 2022 from $859 million in 2021, with trade receivables rising to $804 million from $785 million[309] - Inventories, net grew to $1,606 million in 2022 from $1,387 million in 2021, driven by increases in raw materials ($645 million from $473 million) and work in progress ($218 million from $194 million)[309] - Property, plant and equipment, net decreased slightly to $4,579 million in 2022 from $4,677 million in 2021, with machinery and equipment increasing to $7,383 million from $6,753 million[311] - Cash flow used in operations due to changes in operating assets and liabilities was $218 million in 2022, compared to $229 million in 2021, with significant impacts from inventories ($268 million) and receivables ($184 million)[313] - The company acquired Americraft Carton Inc. for $292 million in July 2021, including seven converting plants, with final purchase price allocation showing $78 million in goodwill[315][319] - AR Packaging was acquired in November 2021, adding 30 converting plants in 13 countries, enhancing the company's European presence and innovation capabilities[320] - Long-term debt excluding current portion decreased to $5,230 million in 2022 from $5,552 million in 2021, with senior secured revolving credit facilities at $634 million[331] - The company redeemed its 4.875% Senior Notes due in 2022 using $250 million drawn from senior secured domestic revolving credit facilities[333] - Graphic Packaging operates as a leading fiber-based consumer packaging provider, serving prominent global brands in beverage, food, and foodservice sectors[249] - The company focuses on innovative, fiber-based packaging solutions, leveraging its low-cost paperboard mills and global packaging network[250] - GPIP purchased 32.5 million partnership units from IP for $500 million in cash during 2020, fully redeeming 18.2 million units[252] - On February 19, 2021, GPIP purchased 9.3 million partnership units from IP for $150 million in cash, and IP exchanged 15.3 million units for GPHC common stock[252] - As of May 21, 2021, IP exchanged its remaining 22.8 million partnership units for GPHC common stock, resulting in IP having no ownership interest in GPIP[252] - The Company currently owns 100% of GPIP after IP's final exchange in 2021[253] - Receivables sold and derecognized in 2022 were $3,299 million, compared to $2,947 million in 2021[260] - The Company sold receivables of $1,124 million in 2022 related to supply chain financing arrangements, up from $693 million in 2021[261] - Depreciation expense for 2022 was $463 million, compared to $420 million in 2021 and $414 million in 2020[268] - Amortization expense for 2022 was $90 million, compared to $69 million in 2021 and $62 million in 2020[270] - Goodwill balance at December 31, 2022, was $1,979 million, with $980 million in Americas Paperboard Packaging and $481 million in Europe Paperboard Packaging[276] - Asset retirement obligations at December 31, 2022, were $13 million, primarily related to landfill closure and post-closure costs[278] - Revenue recognized from contracts with customers for the years ended December 31, 2022, 2021, and 2020 was $9,410 million, $7,131 million, and $6,537 million, respectively[283] - Research and development expenses for the years ended December 31, 2022, 2021, and 2020 were $14 million, $10 million, and $10 million, respectively[287] - Total charges associated with business combinations, shutdown and other special charges, and exit activities for the year ended December 31, 2022 were $131 million, compared to $138 million in 2021 and $61 million in 2020[290] - The company's capital investments in 2022 were $430 million ($549 million paid), compared to $899 million ($802 million paid) in 2021[189] - Net sales from operations outside of the U.S. represented approximately 29% of the company's net sales in 2022[192] - The company recorded a net currency translation adjustment loss of $148 million for the year ended December 31, 2022, due to changes in the U.S. dollar exchange rate against other currencies[192] - The company completed the acquisition of AR Packaging on November 1, 2021, for $1,412 million, net of cash acquired of $75 million[198] - Total capital investment for 2023 is expected to be in the range of 7% to 8% of sales[214] - The company's contract assets as of December 31, 2022 and 2021 were $8 million and $17 million, respectively, while contract liabilities were $65 million and $61 million, respectively[285] - The company's valuation allowance against net deferred tax assets as of December 31, 2022 and 2021 was $57 million and $38 million, respectively[210] - The company increased its estimated withdrawal liability for multi-employment benefit plans by $12 million in Q2 2020 and recorded a $4 million reduction in Q4 2020 due to a settlement agreement[297] - The company repurchased $28 million worth of shares in 2022, with an average price of $20.91 per share, and had $119 million remaining for repurchases under the 2019 share repurchase program[300] - GPIL issued $400 million in 0.821% Senior Secured Notes due 2024 and $400 million in 1.512% Senior Secured Notes due 2026 in March 2021, using proceeds to repay term loan borrowings[335] - GPIL extended the maturity of $975 million in senior secured term loans to April 2026 and added $400 million to its senior secured revolving credit facilities under the Fourth Amended and Restated Credit Agreement[336] - GPIL issued $100 million in tax-exempt green bonds in September 2021, with proceeds used to fund the CRB platform optimization project, including a new CRB machine at its Kalamazoo mill[339] - GPIL completed a private offering of $400 million in 3.750% senior unsecured notes due 2030 and €290 million in 2.625% senior unsecured notes due 2029 in November 2021, using proceeds to repay term loans and revolver borrowings[342] - As of December 31, 2022, the company had $1,850 million in total commitments under its Senior Secured Domestic Revolving Credit Facility, with $565 million outstanding and $1,262 million available[346] - Long-term debt maturities for the company as of December 31, 2022, include $752 million due in 2024 and $1,794 million due in 2026, with total long-term debt of $5,097 million[346] - The company incurred total lease costs of $138 million in 2022, including $82 million in operating lease costs and $11 million in finance lease amortization[352] - The company was in compliance with all covenants under its Current Credit Agreement and Indentures as of December 31, 2022[348] - Operating lease right-of-use assets decreased from $258 million in 2021 to $245 million in 2022[354] - Total operating lease liabilities decreased from $266 million in 2021 to $250 million in 2022[354] - Total finance lease liabilities and financing obligations increased from $146 million in 2021 to $170 million in 2022[354] - Weighted average remaining lease term for operating leases increased from 6 years in 2021 to 7 years in 2022[354] - Weighted average discount rate for operating leases increased from 2.74% in 2021 to 3.76% in 2022[354] - Total lease payments for operating leases are $281 million, with imputed interest of $31 million, resulting in a total of $250 million[355] - Total lease payments for finance leases are $257 million, with imputed interest of $87 million, resulting in a total of $170 million[355] - As of December 31, 2022, there were 10.0 million shares remaining available to be granted under the 2014 Plan[358] - RSUs granted to employees in 2022 had a weighted-average grant date fair value of $20.19, up from $16.14 in 2021[360] - The unrecognized expense related to RSUs at December 31, 2022 is approximately $40 million, expected to be recognized over a weighted average period of 2 years[360] Intellectual Property and Innovation - The company's future success depends on its ability to develop new products and protect intellectual property, including technologies like Fridge Vendor and KeelClip[86] Legal and Contractual Agreements - Third Supplemental Indenture dated June 25, 2019, involving Graphic Packaging International, LLC and U.S. Bank, National Association, related to the 3.5% Senior Notes due 2028[509] - Fourth Supplemental Indenture dated March 6, 2020, involving Graphic Packaging International, LLC and U.S. Bank National Association, related to the 3.5% Senior Notes due 2028[509] - Fifth Supplemental Indenture dated August 20, 2020, involving Graphic Packaging International, LLC and U.S. Bank National Association, related to the 3.5% Senior Notes due 2029[509] - Sixth Supplemental Indenture dated March 8, 2021, involving Graphic Packaging International, LLC and U.S. Bank, N.A., related to the 3.5% Senior Notes due 2029[509] - Seventh Supplemental Indenture dated November 19, 2021, involving Graphic Packaging International, LLC and U.S. Bank, National Association, related to the 3.5% Senior Notes due 2029[509] - Eighth Supplemental Indenture dated November 19, 2021, involving Graphic Packaging International, LLC, U.S. Bank, National Association, and Elavon Financial Services DAC, related to the 3.5% Senior Notes due 2029[509] - Fourth Amended and Restated Credit Agreement dated April 1, 2021, involving Graphic Packaging International, LLC and Bank of America, N.A., as Administrative Agent[511] - Share Purchase Agreement dated May 12, 2021, involving Sarcina Holdings S.a.r.l. and Graphic Packaging International Europe Holdings B.V.[511] - Consent and Waiver Agreement dated May 19, 2021, involving Graphic Packaging International Partners, LLC and International Paper Company[511] - Directors' Non-Qualified Deferred Compensation Plan effective January 1, 2021[511] Hedging and Financial Instruments - The company has entered into natural gas swap contracts to hedge a portion of its forecasted natural gas usage for 2023, with realized gains and losses included in financial results concurrently with the recognition of the commodity consumed[193] - The company has no outstanding interest rate swaps as of December 31, 2022[218] - The company has previously used forward exchange contracts to manage risks associated with foreign currency transactions, with changes in fair value recognized in Accumulated Other Comprehensive Loss[221] - No outstanding forward exchange contracts as of December 31, 2022 and 2021, with multiple contracts expiring in 2020[222] - The company drew €210 million from a delayed draw term loan facility and issued €290 million in senior unsecured notes in 2021, designated as a net investment hedge[224] - Foreign currency forward exchange contracts totaling $111 million in net notional amounts as of December 31, 2022[225] - Realized losses of $48 million from deal contingent foreign exchange forward contracts in 2021[226] - Natural gas swap contracts with a net liability of $12 million as of December 31, 2022[227] Impairment and Valuation - The company concluded that all reporting units with goodwill have a fair value exceeding their carrying value, with the Foodservice and Europe reporting units exceeding by 83% and 42%, respectively[205] - The company recorded a $12 million non-cash impairment charge for goodwill related to its folding carton plants in Russia, reducing the carrying value of goodwill for these facilities to zero[206] - The company classified its two folding carton plants in Russia as held for sale and recorded a non-cash impairment charge of $84 million in 2022, in addition to the $12 million goodwill impairment[207] Depreciation, Amortization, and Pension - The company expects depreciation and amortization expense, including pension amortization, to be approximately $570 million in 2023[216] - The company anticipates pension plan contributions to be between $15 million and $25 million in 2023[216] Tax and Deferred Income - The company has not provided for deferred U.S. income taxes on outside basis differences of approximately $44 million in its other international subsidiaries due to the intention to indefinitely reinvest these earnings outside the U.S.[212] - The company has elected to recognize global intangible low-taxed income (GILTI) as a period cost as incurred, with no deferred taxes recognized for basis differences expected to impact the amount of the GILTI inclusion upon reversal[213] Shareholder and Equity Information - The company repurchased $28 million worth of shares in 2022, with an average price of $20.91 per share, and had $119 million remaining for repurchases under the 2019 share repurchase program[300] - As of December 31, 2022, there were 10.0 million shares remaining available to be granted under the 2014 Plan[358] - RSUs granted to employees in 2022 had a weighted-average grant date fair value of $20.19, up from $16.14 in 2021[360] - The unrecognized expense related to RSUs at December 31, 2022 is approximately $40 million, expected to be recognized over a weighted average period of 2 years[360]

Financial Data and Key Metrics Changes - Net sales increased by 38% or $669 million to $2.5 billion, with net organic sales growth accelerating from 3% in the first half of 2022 to 5% in Q3 [27][28] - Adjusted EBITDA rose by 55% year-over-year to $441 million, resulting in an 18% EBITDA margin [11][28] - Adjusted earnings per share, excluding amortization, improved by 76% to $0.67 per share [11][28] - The company expects adjusted EBITDA for the full year to be $1.6 billion at the midpoint, reflecting a 52% increase over 2021 [11][38] Business Line Data and Key Metrics Changes - The food, beverage, and consumer businesses grew by 20% before acquisitions, driven by positive price and organic sales growth [33] - The foodservice business achieved strong growth, up 29% from the same quarter last year [33] - The integration rate of paperboard production into packaging improved to 74%, up 200 basis points from 2021 [9][28] Market Data and Key Metrics Changes - The total addressable market for plastic substitution has been raised to $12.5 billion, reflecting opportunities across various products and packaging configurations [24][88] - The company reported strong backlogs of over eight weeks across all substrates, indicating robust demand [34][82] Company Strategy and Development Direction - The company is focused on sustainability and innovation, with a significant new product development pipeline aimed at capturing growth in fiber-based packaging [7][12] - Strategic investments and platform enhancements are expected to support margin expansion goals under Vision 2025 [10][25] - The company is actively pursuing opportunities for capital projects and potential M&A to enhance growth and shareholder returns [52][54] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business and the ability to meet consumer demand for sustainable packaging solutions [25] - The company anticipates continued inflationary pressures, particularly in Europe, but remains committed to executing pricing strategies to offset costs [15][66] - The outlook for the full year remains strong, with expectations for sales closer to $9.5 billion [38] Other Important Information - The company returned $23 million to shareholders in dividends and repurchased $15 million in common stock [35] - A quarterly dividend increase of 33% was approved, reflecting a balanced approach to capital allocation [36] - The net leverage ratio was reported at 3.7 times, with expectations to reduce it to approximately 3.2 times by the end of 2022 [37] Q&A Session Summary Question: Concerns on consumer staple side, especially in beverages - Management noted broad-based strength across the business, with food and beverage growth remaining strong despite some regional variations [46][47] Question: Capital allocation focus for 2023 - The company is prioritizing debt reduction while maintaining optionality for M&A and capital projects [52][54] Question: Update on European market conditions - Management acknowledged modest organic sales growth in Europe, with expectations for recovery in beverage consumption as winter approaches [60][61] Question: Update on conversion projects - The company continues to evaluate opportunities for converting existing operations to meet market demands, with no immediate need for action due to strong backlogs [66][68] Question: Addressable market growth drivers - The increase in the addressable market is attributed to innovation and design capabilities, particularly in plastic replacement [84][88] Question: Outlook for OCC pricing and its relationship with paperboard pricing - Management indicated that while OCC pricing may turn deflationary, overall inflation in other costs will continue to impact pricing strategies [105]