Thank you, Jamie. Appreciate it very much.

Good morning, everyone, and thank you all for participating in Packaging Corporation of America's third quarter 2026 earnings release conference call. Again, I'm Mark Kowlzan, Chairman and CEO of PCA, and with me on the call today is Tom Hassfurther, our President, and Kent Pflederer, our Chief Financial Officer.

I'll begin the call as usual with an overview of the third quarter results, and then I'll be turning the call over to Tom and Kent, who will provide further details. Then after that, I'll be wrapping things up, and then we'd be glad to take questions.

Yesterday, we reported third quarter net income of $262 million, or $2.93 per share. Excluding special items, third quarter 2026 net income was $272 million, or $3.04 per share, compared to the third quarter 2025 net income of $247 million, or $2.73 per share.

Third quarter net sales were $2.6 billion in 2026 and $2.3 billion in 2025. Total company EBITDA for the third quarter, excluding special items, was $577 million in 2026 and $503 million in 2025.

Third quarter net income included special items expense of 11 cents per share, primarily for costs and write-offs related to facilities closures, acquisition and integration-related costs, the impact of a fire at our Palmyra, Pennsylvania sheet feeder, and the Wallula restructuring charges. Details of the special items for the third quarter of 2026 and 2025 were included in the schedules that accompanied the earnings press release.

Excluding the special items, our earnings increased by 31 cents per share compared to the third quarter of 2025. The contribution from the acquired Greif business was 24 cents favorable year-over-year, generating 13 cents of earnings this year versus an 11-cent loss last year in the first month of ownership.

Legacy earnings improved by 7 cents per share, driven by favorable price and mix in the packaging segment for 79 cents, favorable production and sales volume in the packaging segment, which includes the impact of additional containerboard supplied to the Greif operations of 12 cents, favorable price and mix in the paper segment for 5 cents, and a lower share count, 2 cents. These items were partially offset by higher labor and operating costs, 28 cents; higher freight costs, 26 cents; higher corporate and other expenses, 13 cents; higher fiber costs, 12 cents; higher depreciation and amortization expenses, 6 cents; higher maintenance outage expenses in the paper segment for 4 cents; lower sales volume in the paper segment for 1 cent; and higher interest expense, excluding the Greif acquisition and debt in this, for 1 cent.

As comparable quarters going forward will include the ownership of the acquired Greif business for the entire periods, we will no longer separate and state the earnings contribution from the acquisition in the future. We exceeded our guidance of $2.91 on the strength of price realization and a higher than expected contribution from the acquired Greif business.

These items were partially offset by higher labor and operating costs, partially driven by lower than forecast corrugated products volume. Looking at our packaging business, EBITDA, excluding special items in the third quarter for 2026, of $578 million with sales of $2.4 billion resulted in a margin of 23.9% versus last year's EBITDA of $492 million and sales of $2.1 billion, or a 23.1% margin.

The mills produced 1,489,000 tons during the quarter. The legacy mills produced 1,286,000 tons of containerboard, about 77,000 tons more than the second quarter of 2026 and 31,000 tons more than the third quarter of 2025.

The acquired mills produced 203,000 tons, quite frankly, an exceptional number for a quarter in which Riverville was down for an extensive annual maintenance outage. System-wide, our inventories were up 34,000 tons from the end of the second quarter, and in fact, most certainly we need that inventory as we move into the fourth quarter.

We've been able to catch up with keeping our plants adequately supplied, resume shipping via most efficient methods possible, and we're in good position to supply our customers in the fourth quarter, even with three of our containerboard mills down for their annual maintenance outages. Operational performance was excellent across the board, much improved from the second quarter, and we completed the first annual maintenance outage at the Riverville mill under our own ownership safely and successfully.

From the cost side, in addition to increasing freight, we saw significant increases in recycled fiber, purchase power, and chemical costs during the quarter, and we expect these input costs to continue to go up. Our mill production reflects improved output at Jackson, even ahead of the completion of the winder project coming online in the fourth quarter as we continue to maximize the performance of the paper machines.

We also benefited from continued improvement in reliability out of the acquired Greif mills. I'll now be turning it over to Tom, who'll provide more details on containerboard sales and corrugated business in general.

Thanks, Mark. Domestic containerboard and corrugated products prices and mix were 75 cents per share above the third quarter of 2025 and up $1.11 per share compared to the second quarter of 2026.

We have realized substantially all of the first net $50 increase and about half of the second $50 increase. Price realization came in ahead of forecast for the third quarter.

We expect to realize almost all of the remainder of the second increase in the fourth quarter. Realization of the $70 increase will be split between Q4 and Q1, and skewed more towards Q1 in terms of timing.

Export containerboard prices were 4 cents above last year's third quarter and 3 cents above the second quarter of 2026. Export sales volume of containerboard was 5,000 tons higher than the second quarter of 2026 and 10,000 tons lower than the third quarter of 2025, and remains at a relatively low level.

While various factors that we've previously discussed led to lower agriculture and market volume, demand was solid throughout the quarter across the remainder of our customer base. Shipments were up around 11% in total and per day versus last year, with the legacy business down 0.5%, which is about in line with our expectations taking into account the lower ag shipments.

A silver lining is that we got ourselves back on solid footing from an inventory standpoint in time for what looks like a pretty strong fourth quarter from a volume standpoint, based upon our September and October bookings. We were also able to save a lot on freight during the quarter by being able to plan and optimize our routes.

We remain in a very tight containerboard market, which, based upon what we are seeing in our own system, appears to be further tightening with fourth quarter seasonal pickup. As Mark said earlier, we have three containerboard mills down for annual maintenance in the fourth quarter, including DeRidder, and we will need the mills continuing to perform at the top of their game to keep us properly supplied.

The acquired corrugated business meaningfully contributed to our profitability during the quarter, though volumes took a hit from the fire at Palmyra that kept the plant down for most of September. Integration levels continue to improve, and legacy PCA mills supplied approximately 45,000 more tons of containerboard into the Greif system during the quarter than it did a year ago.

The improved integration, together with better operational performance in the mills that Mark mentioned earlier, has us well ahead of our synergy targets. All systems work will be completed during the fourth quarter, which will further improve our visibility and day-to-day management of the business.

This acquisition is working out very well for us, in large part due to the quality and performance of our people, who have put in a tremendous effort integrating and running the business. I'll now turn it back to Mark.

Thanks, Tom. Looking at the paper segment, EBITDA, excluding special items in the third quarter, was $34 million with sales of $163 million, or a 20.6% margin, compared to the third quarter of 2025 EBITDA of $40 million and sales of $161 million, or a 24.9% margin.

The differences in EBITDA and margin result from the maintenance outage being in the second quarter last year and the third quarter this year. Sales volume was approximately 0.9 tenths of a percent above the second quarter of 2026 and approximately 2.5% below the third quarter of 2025.

Prices and mix were up 2.8% from the second quarter of 2026 and up 3.8% from the third quarter of 2025. Sales volume, price realization, and cost performance contributed to performance above our expectations.

I'll now turn it over to Kent.

Thank you, Mark. Cash provided by operations was $472 million, and after $247 million of CapEx, free cash flow was $225 million.

In addition to CapEx, the primary payments of cash during the quarter included dividend payments of $134 million, cash tax payments of $66 million, and net cash interest payments of $29 million. We did not repurchase shares during the quarter.

Excluding special items, our effective tax rate during the third quarter was 25.8%. We expect our fourth quarter rate to be nearly identical to the third quarter.

We now forecast $865 to $890 million of CapEx for the year, and excluding special items, just above $705 million of depreciation and amortization. These primarily relate to timing of expenditures and assets placed in service, and do not reflect changes in our overall plans.

Our special items expense for the year to date, just to remind you, through Q3 included just under $60 million of depreciation expense and write-offs, primarily associated with Wallula restructuring. I'd now like to give you an update on the annual outage schedule and earnings impact for the rest of the year.

Our outage expense was 28 cents during the third quarter. Our fourth quarter estimate is 72 cents now, totaling $1.48 for the year.

The increase of 8 cents from when we last updated you is primarily due to some timing, with a couple of cents in 3Q moving into 4Q, as well as our decision to substantially increase the scope of maintenance activities at the completed third quarter Riverville outage, with more costs now being amortized into the fourth quarter, and to a lesser degree, an increase in the scope of the DeRidder outage that will take place next month. I'll now turn it back over to Mark.

Thanks, Kent. As we move from the third quarter into the fourth quarter, we expect solid corrugated products demand with some seasonal improvement.

Shipments per day are expected to be at or around last year's fourth quarter level with two fewer shipping days than the third quarter, and total corrugated shipments will be higher than the third quarter. Prices for containerboard and corrugated products are expected to improve as we continue to implement earlier price increases, but corrugated products mix will be seasonally weaker with higher e-commerce volumes.

Containerboard production will be lower with annual maintenance outages at three of our mills, and mill maintenance outage expenses, including the impact on production volume from the fourth quarter outages, will be significantly higher in the fourth quarter. We expect seasonally lower volume and slightly higher prices in the paper segment.

We expect freight costs to increase across our business, with diesel fuel prices above third quarter levels. We also expect costs for recycled fiber to continue to increase, as well as higher wood fiber costs to increase due to winter yields and mill mix.

Costs for chemicals and energy will increase due to higher chemical prices and higher seasonal energy usage. Considering these items, we expect fourth quarter earnings of $2.81 per share, excluding special items.

With that, we'd be happy to entertain any questions, but I must remind you that some of the statements we've made on the call today constituted forward-looking statements. The statements were based on current estimates, expectations, and projections of the company, and do involve inherent risks and uncertainties, including the direction of the economy and those identified as risk factors in our annual report on Form 10-K on file with the SEC.

Actual results could differ materially from those expressed in the forward-looking statements. With that, Jamie, I'd like to open the call for questions.

Hi, everyone. Good morning.

Thank you for the details. I wanted to maybe kick off on volume.

You mentioned, Mark, that you expect volume to be, I'm paraphrasing, even or around the volume trend from last year. Can you talk a little bit about what you're seeing in terms of bookings and billings and how you characterize volume being at or around comparable with also a tight market as you're seeing it?

We'll let Tom get into that as he...

Hey, George, it's Tom.

Morning, George.

Good. Bookings were good in September.

They're doing very well here in October as well, up a little over 5%. Billings have lagged a little bit, and we expect that'll catch up during the fourth quarter.

We're forecasting right now for pretty flat for the fourth quarter, but keep in mind that that's a tough comp we're talking about as well. It's easy to kind of look at October, November and get some insight, but December is always a bit of a crap shoot.

We're just going to be a little cautious in terms of that forecast. We're pleased with the cadence of the volume.

We've had some struggles as we mentioned with the ag business, especially related to the lettuce issues and some things like that from some of our customers. We expect some pick-up, but again that'll be determined seasonally.

Sometimes it picks up in the fourth quarter, sometimes it tracks into the first quarter. That's kind of where we are right now, and of course, our mix is going to be a little more concentrated towards e-com in the fourth quarter as well.

Right. Appreciate that.

Related to mix and volume perhaps again in the third quarter, given the numbers that you gave in terms of pricing effect in 3Q was quite strong, you said pricing is ahead of your expectations, do you think that perhaps maybe you've lost a little bit of volume momentum at all with your pricing, or not really, and why do you view that to be the case? Relatedly, when we do just revenue over tons, the mix was a little bit a couple points lower than we're expecting.

Is that Greif effect or is that e-commerce effect in the third quarter from what you could see? Then I had one last follow-on.

George, I'm going to remind you of something we've talked about for years. When we're in price increase mode, we're 100% focused on price increase because those opportunities don't come along that often, and that's incredibly important to our business in the long term.

Relative to volume, we may lose an item or something like that, but for the most part, these are the same customers we've been dealing with for a long, long time, and they understand the situation we're in, and they're in the exact same situation. When you're using revenue over tons, yeah, there's some Greif effect in there, no question about it.

That's a different segment of the market that we weren't in before. That's going to impact that a little bit.

Hopefully that gives you your answer.

It does. Then lastly, just you mentioned that the CapEx increase and the maintenance spending tweaks were mostly timing.

Was there anything in there that was actually required or maybe not anticipated that you had to pull forward in terms of maintenance or CapEx? Thanks, and good luck in the quarter.

George, I'll give it to Mark after this, but in terms of timing, no. We were a little favorable in 3Q to what we'd put out there last time, but that rolls into the 4Q, that's really kind of timing of amortization of expenses more than anything else.

In terms of activities, Mark can maybe comment a little bit more on what we're doing in the two mills.

George, we always reserve the right for new discoveries, new opportunities. We move the capital up and down as we see fit, and some of it's just timing on engineering and deliveries of equipment for installation.

We're pretty encouraged. We just went through that annual shutdown at Riverville, and during that week of downtime, for most of that week, we had over 1,400, 1,500 contractors and people in the mill site working on that mill.

We found some good opportunities, and it'll lay out some really nice upside opportunity for that mill over the next few years. I'm talking about things like some headbox, some forming section work, some dryer section work, press section work, things in the back end of the mill.

We're very encouraged by the continuing opportunity that Massillon and Riverville will provide in much in the same way that the Boise mills delivered over the years. Using that term, the gift that keeps on giving.

So.

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

Next question, please.

Thank you, Mark, Tom, and Kent, for taking my questions. First off, it seems like the Greif assets provided most of the upside to 3Q, as price cost overall was neutral based on our estimate.

First, would you agree with that assessment? If so, what drove the strong performance at Greif, and why was it better than expected?

Let me talk about Greif, and then Tom and Kent can weigh in. We took some criticism last year during the first phase of our ownership of Greif because we got heavily engaged in fixing the assets right away.

We had all of our technology organization heavily involved in Massillon and Riverville right from the get-go last September when we closed on September the 2nd. We took advantage of that, and very quickly were able to get the mills in a very good position to start delivering results.

We talked about that on the second quarter earnings call, that we had accomplished a great deal from a reliability and a performance point of view. Quite frankly, through the summer months into the fall now, we've seen exceptional performance coming out of both of those mills.

The same thing on the CorrChoice side of the business, they continue to make improvements. Again, that's what we do.

That's what PCA does best. We've got an incredible technology and operational group, and across the board.

The results speak to that. Tom, Kent, you want to weigh in on that?

I'll just add, obviously the integration did help a lot, but I would not put it all on Greif. Some of the other things that we do and we do incredibly well is we can utilize these Greif assets in some different ways than they were able to use it since we have such a large system and we're positioned all across the United States.

There's some end-market restructuring that took place as well within our system which contributed. There's some puts and takes to that.

You may move it over to one as opposed to the other, and so that's why I say you can't just hang it all on Greif, but it did provide a lot of opportunities for us. As Mark mentioned, that's what we do well.

We get in there, and we take advantage of it, and we figure out how to maximize these assets in a way that perhaps wasn't previously available to the previous owner. I think, when I talk about end-market structure, that's not only how we're going to these end markets, but also perhaps some of the opportunities that afford themselves in terms of profitability as well.

Kent, you got anything else?

No, I'm good. Thanks.

Anything else, Mike?

No, yeah, that's very helpful. Just one quick one, just can you help me understand, Tom, what happened to legacy volumes in 3Q?

If you look back a couple quarters, you were outperforming the industry by a few hundred basis points. In 3Q, legacy box volumes declined 0.5%.

Obviously, you had the ag issue, but I think the 0.5%, when all said and done, when we get the industry numbers, you'll probably be in line with the industry. Wondering, what's happened in terms of the outperformance as it just a matter of you maybe focusing more on price and less and less so on volume?

Mike, let's put it this way. Our objective is profitable revenue growth.

That can come in a number of different ways. Price is our supreme focus at the moment.

That's what's driving our results at the moment.

As I mentioned before, we did have a couple of segments that were pretty large that have been a little bit of a drag, but it has nothing to do with losing business. It's just that they had some issues of their own which cut down some of their demand.

Got it. Makes sense.

If I could squeeze one more in just quickly. Kent, you guys guided 4Q to be down around 20 cents sequentially.

How should we think about the progression from 4Q to 1Q this year, particularly given the fact that the third price increase is flowing through?

All right, Mike, without putting too fine of a point on this because we what we really only guide one one quarter in advance, but the these are the drivers. You will see continued price improvement from 4Q to 1Q as as as the as the the $70 increase, the remainder of that comes in, okay?

Mix also improves a little bit from 4Q to 1Q as well. Outage expense also significantly, the P&L hit moves in in in the right direction.

Volume goes down, just seasonally. 1Q is, 4Q is sort of the peak, 1Q then comes down a little bit.

Mill production up a little bit because we have less outage impact. On the cost side, you're going to see mill operating costs primarily at 4Q, if not even a little unfavorable, just because you're in winter.

Then you have the normal inflation that hits the, labor, benefits, services, all that sort of thing, starting at about 3%. We do the best on that, though, to to whittle that down through operational efficiency.

That that I I gave you a lot of factors there, but hopefully that gives you at least a start based upon our historical performance when you try to model all this.

Very, very helpful. Thanks, guys, and good luck in 4Q.

Thanks, Mike. Next question, please.

Great, thank you. First maybe just following up then a little bit on these kind of sequential-type analysis since we've been going there.

As we think about 4Q v 3Q, I think at a conference you had sort of talked about something less than 45 cents having been experienced last year might be what you would see this year. Now the kind of more 20-cent reduction you're projecting from 3Q to 4Q, is that a function of the September pricing?

Would that be the kind of the main reason why that would have changed?

Oversimplified, yes, but I'll give you a little more color on this, okay? We saw a fairly large sequential increase from 2Q to 3Q in price.

Given the mix and given the timing of roll-in, we won't be nearly as favorable 3Q to 4Q, but the price favorability should be enough to offset the additional costs that we're taking on in the outages. That's about even, okay?

We then have higher operating costs, and if you look across the portfolio of costs in our mills and operations, you're going to have higher recycled, higher freight, higher seasonal, okay, offset a little bit by favorable in the corrugated operations just due to better cost absorption. All those factors into play, yeah, we're about 20 to 25 down from 3Q to 4Q, but the big help there is realization of the 70 increase, the beginning of realizing that.

Hope that helps, Mark.

Yes, it does. Thank you.

Then, obviously you've been doing a terrific job offsetting a very difficult cost environment on the pricing side. Your long-term track record has been a lot about company-specific value creation as well.

You've alluded to several things that should help 2027 versus 2026 on that score already. Maybe if you could sort of give us like a laundry list, Jackson, Counce, the box plant in Ohio, further gains from the Greif improvements, etc.

What are the things that big picture we should be thinking about? Lastly, I think the energy projects are more 2028, but maybe update us on your thoughts there.

Let me start. The energy projects you'll see the benefit more into the 2028 period.

Again, we're in construction mode right now at Jackson, and breaking ground at DeRidder. We're waiting on permits for the gas turbine installation at the Riverville mill, so that's pending.

You just hit it on the head. We continue with our capitalization program.

Tom, comment on the successful start-up of the new box plant in Ohio. We hit it out of the park.

We had an incredibly good start-up in our new Newark plant, which also allowed us to announce the closure of Middletown a little bit earlier than what we probably would have otherwise. We've got further installations going in there as we speak, and we're continuing the same cadence basically with putting in other equipment and upgrading other equipment in box plants all across the United States.

We have to be incredibly well-equipped to continue to deliver at the levels that we do for our customers, and perform the quality that we have and those sorts of things. I might mention in addition, the work we continue to do on our proprietary grades of paper is allowing us a lot of opportunity, and we'll continue to do that going forward, and that has a lot to do with our capital expenditures as well.

Mark, we continue to do what we do incredibly well, and we've been doing on a regular basis for the last decade.

Yeah. Another example, Mark, is the new winder at the Jackson mill.

That had been under construction for over a year, and we got that started up at the end of September, and really the last couple of weeks now, but it came up incredibly well, and that winder's running as planned. Jackson's got a duplicate winder now running 10,000 feet a minute if we need it, which the plan would be to put more fiber over that machine.

I fully see the Jackson mill over the course of the next year and a half or so will become a 1 million-ton-a-year mill. We've been talking about that for the last six or seven years, that that was the direction we were taking the mill, and that's where we're going.

Counce is another example. We got the second phase of the work going on on the number two machine at Counce to upgrade that capability, we'll be seeing further benefits, significant benefits out of the Counce number two machine, which will be productivity, quality, cost.

Again, we've got approximately 200 people in the corporate technology organization dealing with these matters seven days a week, and those of us at the corporate level, this is what we do, and either we're doing and working on operational matters or the groups working on customer-based marketing and sales matters. That's what we focus on, and that's what we do well.

Super. Anything else?

Actually, one really quick one if I could then. Maintenance outage expense, it's high this year.

Is that just because things are more expensive, or were you just taking more outages this year than normal? If we think about next year, should we just assume similar to this year, or not necessarily?

Good question. It's both.

We undertook, obviously, with the Massillon mill and the Riverville mill, we undertook more activity, but also we're just doing some things at the legacy mills that we want to get done, and we always take care of these assets, and we may have older mills, but if I took you into these mills, you'd think they were new mills. Also, it's the cost of capital.

The equipment costs today are significantly higher than they were just a few years ago. Whether you're buying a pump or a motor or a new headbox, the costs have gone up dramatically just in the last year or so.

Then, again, the labor cost to install, if you're having contractors come in, that labor cost is up significantly. It's the amount of work we're doing and taking advantage of the time and the capability to do it, and the pure capital cost of these components and the labor cost to do it.

I would mention, we are in a really good position. For the last 10 years, we have gotten ahead of the curve so to speak on recapitalizing our box plant assets, our mills are in great shape, and so everything we're doing is more on autopilot opportunity, taking care of the customer base, growing with the customers, and, Tom, why don't you add a little bit more to that?

Just to follow up on that, Mark. I think we've mentioned this numerous times, but this cost of capital is gone up, 2, 3x in a lot of cases, both at the mills and at the box plants.

It's imperative, in order to be able to continue to grow with our customers and be able to take care of our customers and all those other sorts of things, to be able to earn your cost of capital. That's part of a struggle that we have every day to make sure that we're able to do that.

To Mark's point, as I mentioned, we've been at this for a long time. A lot of those improvements that we put in place were prior to some of these exorbitant increases that we're now encountering.

Those are definitely considerations going forward, and all these projects that we've got going on also, God only knows we need all these tons, too. They're sold already.

Appreciate all the detail. Thank you.

Thanks, Mark. Next question, please.

Hi, good morning.

Morning, Anojja.

Morning. I wanted to ask about synergies.

I think you said they're running ahead of plan. Any way to put a finer point on that, like how much it contributed in 3Q, and also are you still expecting $30 million, $30 million for this year and next year, or do you think you can end up doing a little better than that?

No, we're doing a little better than that. We're on a run rate right now between 40 and 50.

We called out 45,000 tons of increased integration from PCA into the acquired, that's a big piece of it. There's other integration benefits, and then there's just the reliability, cost performance, and whatnot at the acquired Greif mills.

70 run rate, 70,000 more tons now than what it was doing at the time of the acquisition. Really, those buckets are the factors in the synergies at this point.

Right. Okay.

Then switching over to end markets, have you seen any pick-up? I know the FDA declared the Cyclospora outbreak done.

Have you seen any improvement in your shipments, recognizing that it's probably a bit of a seasonal market? Then also, can you talk about what you're seeing in your other end markets, industrial and consumer?

Anojja, I'll take a stab at this. I've mentioned ag numerous times.

We do see some recovery in ag. The question will be is how much of that occurs in the fourth quarter and how much rolls over into the first quarter, and does weather cooperate.

That's been also a little bit of a drag. Protein markets have been, especially on the beef side, have been down now for quite some time.

Everybody's heard about the level of the herds and how long it's going to take to get those herds back up and get that volume back up. That's going to still take some time.

The other market, e-com is still not growing at the same rate it had grown for a long time, but still is a growing market, and still doing quite well. Outside of that, the other markets are kind of where they are.

We'd like building products to pick up some and things like that, that's has to do with government regulations and a whole bunch of other things, and interest rates. There's lots of puts and takes, and we're in so many different markets, and we've got thousands and thousands of customers in these various markets.

It's hard to predict any single one. Ag has stuck out more than others just because of what's gone on weather-wise, and the lettuce, and all the other things that have occurred.

Right. Thank you very much for that.

I'll turn it over.

Thanks, Anojja. Next question, please.

Hey, guys. Congrats on another strong quarter.

I think if I heard you correctly, you guys are doing a little more extensive work in the fourth quarter, whether it's DeRidder, I think Massillon as well. My question is, does that unlock potentially more capacity, more debottlenecking?

I think when you guys announced idling Wallula and debottlenecking some of the other mills, I had a number in mind, roughly 6 million tons of capacity once it's all said and done, but you guys always find new things to do. Can you kind of help us think through your capacity to produce, just because, as you kind of pointed out, market's very tight?

If you think about our expected run rate for 2026 is probably going to be 5,757,000 tons. I would think we're on track, and I've been talking about this for the last year, that we'll get to be a six 6 million-ton system with this work that we're doing.

It's basically, we get through these outages next year at Counce and some of the work we've got going on at Jackson, we certainly have that capability that, depending on the grade mix you're producing, we're bumping up against that 6 million-ton capability. This is ongoing.

This is what we do. We continue to stretch the capability, we see the opportunities.

That's why I mentioned earlier on the call the annual shutdown that just occurred at Riverville mill, it unlocked these opportunities before our eyes in terms of some capital input will greatly improve the productivity and performance of the Riverville mill. That's going to be another piece of the containerboard supply over the next couple of years as we get that equipment installed and that mill stretched out.

Massillon mill's a good example. Massillon mill's performing incredibly efficiently compared to a year ago, and so it's the little things that we do that make Massillon such an important mill to us.

You've got the new box plant down in Newark. I believe it's like 80 miles from the Massillon mill.

It's

basically shuttle truck distance away. The Ashland box plant's probably 40 miles away from Massillon.

Massillon being a very efficient mill just within the first year of ownership presents an incredible opportunity, but we'll continue to stretch out. Long answer to your question, we're definitely at that 6 million ton, bumping that capacity, and with these projects we've got coming on over the next six months to a year.

Gotcha. Any early read on CapEx next year, and big projects on the horizon?

You spent [unclear] I think most people would be happy with, but anything that you have up your sleeve that we should know about?

We'll give you a better target in the January call as we always do, but I mentioned some of the bigger projects. We know really the big spend over the next 24 months will come from the gas turbine installations.

We've got three gas turbines going in, and we've got to finish up the Counce number two machine improvement work. That was fairly sizable amount of work, and then the rest of it is just the whole host of opportunities that present themselves across the board in the box plants.

It's going to be the one-off equipment, it's the EVOLs, the BOBSTs, the various rotary die-cutters, new corrugators to continue to grow with our customer base.

That's

the beauty of that, that we invest with the customer. I think, without giving you a number, if you think about the cadence of our capital for the last couple of years, we're going to take advantage of those type of opportunities.

We're generating significant cash flows, and so I think the question will come as it has always been: what are we doing with all the excess cash? I'll leave it at that.

Super. Perhaps a question for Kent.

Kent, you were kind enough to give some color sequentially from 4Q to 1Q. Outside of the labor and benefits piece, which steps up every year around 1Q, are you starting to see your major input costs level off here, just your operations, freight, and stuff like that?

Then any color on the September increase, how much of that is flowing through in 4Q versus 1Q? Is it like a 20/80 split?

I'll take your last one. I think it's probably a little more into 4Q than what you said, but I don't want to throw a number, but it's better than 20/80 in terms of 4Q versus 1Q.

All right, on input costs, freight, recycled, right now at least looking past 4Q, we got to assume it stays at elevated levels, okay? Until we see some sort of breakthrough in the drivers on those, right now, I'm assuming at fairly high levels similar to what we're forecasting for 4Q.

That's helpful. Margins should improve nicely with costs leveling off.

Thank you so much.

Thanks, Phil.

Next question, please.

Good morning.

Morning, Anthony. Hey,

just following up on the energy projects. I think at the beginning of the year, you talked about the gas turbine projects taking maybe 2.5 years, and I'm wondering if I got that right, and if kind of in the current operating environment, which is pretty tight, are you sort of on track for that or are there possibility to pull that forward or just...

Because they're three installations at three different mills, they're moving in three different paces. We're actually in installation mode at the Jackson mill.

That's moving along very quickly, and part of that was we were able to get the permits very quickly and move on that through your summertime period. DeRidder is somewhat behind that.

Then Virginia with the Riverville mill, we're going through a permitting process, and that's taking a little extra time. Part of it is we're just comprehensively looking at the entire mill footprint with the mill opportunities in terms of productivity on the paper machine side, the pulp mill side, and comprehensively looking at what that mill will become over the next few years.

There's a little bit of extra time in the permitting process. That would be kind of like a late 2028 into the truly just the 2.5 years out to see that one come on at best.

That's why it's really a multi-year, phased project.

Got it. That's very helpful.

Then, apologies if this was asked earlier, but in terms of the most recent box price hike, when we think about the implementation and the timeline for that hike, should we think about that as being basically the same as is the first and the second hikes this year, or is there anything about kind of towards the end of the year or the competitive environment, just how would you compare the implementation timeline for the third one versus the first two, just based on where we are close to the end of the year?

Anthony, this is Tom. Our timeline is pretty much the same on each of these.

In the commentary, we got the first is in, we're still realizing some of the second $50 in the fourth, we'll realize a little bit of the $70 in the fourth, and the majority will come in Q1 of next year. The cadence on these are pretty much the same.

Now, you may be asking a question because it's not every day that we get three back-to-back-to-back. That's how the cadence is working for us right now, and it's all based on the normal procedures that we go through with our customers.

Okay. That's helpful.

I'll turn it over.

Thank you. Next question, please.

Hi, thank you for taking my question. Just a quick clarification question on the $70 increase.

You said you expect obviously more in the first quarter than the fourth quarter, but are you expecting the full $70 increase to be realized by the first quarter, or do you think that could extend beyond the first quarter into the second?

Hi, Hillary, this is Tom. In the normal cadence that I just talked about, the great majority of the realization will all be in the first quarter of next year.

Okay. Got it.

Thank you, that's helpful. Then, just with recycled fiber costs continuing to increase, has anything changed in how you're optimizing the mix between recycled and virgin fiber?

No, again, we take advantage that it's a mill-specific opportunity, mill by mill, location by location. You got transportation considerations on OCC, and then again, just what the pulp mill itself is designed to do.

You balance out your fiber needs with OCC in general, DLK, but in the conditions we're under in terms of with a tight market, need for containerboard, we've got everything pretty well maxed out, virgin kraft productivity, OCC plant productivity. It's basically utilizing everything we can take advantage of right now.

Got it. Thank you, that's helpful.

Thank you.

Thank you. Any more questions?

Hi. Thanks, guys.

I'll make it quick. Mark, can you talk a little bit about what kind of lead times you're seeing on equipment?

You talked a little bit about turbines, and obviously you already had purchased those, and opportunistically so. If we think about converting equipment versus equipment you might need at the mill, what are lead times right now?

How would those compare versus what you're hearing about elsewhere perhaps? Then, when we think about Greif, the synergies, which have now moved up, the turbine project, and then the mill realignment, optimization program you announced last year into this year, remember it was beginning of this year, I know it depends on where you start the clock, but I think we've talked in the past, you think you've added from all of that half a billion dollars to your EBITDA when you think about those three or four larger buckets?

Thanks, and good luck in the quarter.

Hey George, I'll knock off your last one. The answer is we're pretty darn close to that, and there are some inflation effects to that, but yeah, we've talked about that before publicly, and in response to your prior questions, but yeah, that's still a pretty good number there.

Just mark-to-market there. Go ahead.

Then

on some of the lead times, it depends on what you're ordering. If you're ordering some very complex pieces of unit operations, the lead times can be longer.

In some ways, there's some opportunities that have taken place. Some of the equipment suppliers actually don't have as big a backlog as they had a few years ago, the lead times have shortened up.

More than lead times, it's the cost. Whether two years ago it took 14 months to get something delivered and now you can get it delivered in 10 months, it doesn't matter if the cost is up 60% from what it was a year and a half ago.

It's the absolute cost to acquire the piece of equipment, and then the installation labor that goes into it and the associated installation factors that have increased. In many cases, have doubled the cost of capital projects just in the last two years.

I'd add that if we're building at all, you're now competing with data centers for land and for steel and all these other things that are going on. Those construction costs are just going through the roof as well.

We're definitely seeing, if you think about contractor availability as a good example, and what Tom just said about data centers. If within any specific region, if you're in the building and trades, and you have an opportunity to go work at a data center, quite frankly, if you look at the pay scales and locations, and quite frankly just the magnitude of the build-out, it's put an incredible demand nationwide on a lot of the building and trades.

Again, that's another factor that we deal with. We're fortunate we have a good group of contractors that we've aligned ourselves with.

We, again, have our own incredibly talented maintenance organization that we use across the board, we call that the traveling team, and in conjunction with the technology group, we're able to overcome a lot of that, but still. Again, the delivery times is one factor, but it's the absolute cost of the equipment that's really the factor.

Mark, I understand, but if I was ordering a new paper machine, I was converting something, I'm not getting into the business, but let's say I was. Am I looking at two years on that?

If I was buying a new flexo folder-gluer, let's say I was buying an EVOL, not you, but me, am I a year before I get that equipment? That's just what I'm getting at.

Thank you, and good luck in the quarter. Thanks again.

It just depends on the equipment you're buying, the vendor you're buying it from, what country it's coming from. Again, the permitting issues, the contractors' availability to install it.

I can tell you, investing in this business is not for the faint of heart anymore. The game has changed significantly.

Got it. Thank you so much.

All right, George. Thank you.

Jamie, any more questions?

I'd like to thank everybody for joining us today, and as usually, we appreciate the back-and-forth question and answer period, and look forward to talking to everybody in January. With that, have a great rest of the year and a great holiday period.

Thank you.