ab1e20a66ae83824ea28660ccdff8736bbb51ab85ebad1356a0ead6b90338bc5

Packaging Corporation of America (PCA) is a leading producer of containerboard products and uncoated freesheet (UFS) paper in North America, primarily operating in the United States with eight mills and 86 corrugated products manufacturing plants **[0000950170-24-022794_pkg-20231231.htm:3]** **[0000950170-24-122936_pkg-20240930.htm:23]**. The company focuses on three main segments: Packaging, Paper, and Corporate and Other **[0000950170-24-093466_pkg-20240630.htm:5]** **[0000950170-24-055165_pkg-20240331.htm:14]**. PCA's largest segment, Packaging, produces a wide range of containerboard and corrugated packaging products, while the Paper segment offers communication-based papers, including both commodity and specialty papers **[0000950170-24-022794_pkg-20231231.htm:3]** **[0000950170-24-022794_pkg-20231231.htm:95]** **[0000950170-24-122936_pkg-20240930.htm:23]**. The Corporate and Other segment encompasses support services and transportation assets **[0000950170-24-022794_pkg-20231231.htm:95]** **[0000950170-24-022794_pkg-20231231.htm:96]**.

1. **Packaging** - Produces a diverse array of containerboard and corrugated packaging products, including conventional shipping containers, multi-color boxes, and displays, as well as packaging for various consumer and industrial products **[0000950170-24-022794_pkg-20231231.htm:3]** **[0000950170-24-022794_pkg-20231231.htm:95]** **[0000950170-24-122936_pkg-20240930.htm:23]**.
2. **Paper** - Manufactures and sells communication-based papers, including both commodity and specialty papers with features such as colors and coatings **[0000950170-24-022794_pkg-20231231.htm:95]** **[0000950170-24-122936_pkg-20240930.htm:23]**.
3. **Corporate and Other** - Includes support services, transportation assets, and activities related to ancillary operations, with revenue primarily from related party transactions and transportation services **[0000950170-24-022794_pkg-20231231.htm:95]** **[0000950170-24-022794_pkg-20231231.htm:96]**.

939ca10de340e358bb94919de5848b855f4ad89aded342050cfb1f28090dad97

06413cee701738ca1b7fa85c9cdc745dadd1b484f98e5ca088952e46fccaa073

| Segment/Quarter                      | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|--------------------------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| **Packaging Segment (in millions)**  | $1,809.1  **[0000950170-23-001189_pkg-ex99_1.htm:6]**  | $1,808.6  **[0000950170-23-016955_pkg-20230331.htm:15]**  | $1,790.3  **[0000950170-23-038396_pkg-20230630.htm:6]**  | $1,759.8  **[0000950170-23-058590_pkg-20230930.htm:6]**  | $1.8 billion  **[PKG_3370887_0]**  | $1,798.3  **[0000950170-24-055165_pkg-20240331.htm:14]**  | $1,908.3  **[0000950170-24-093466_pkg-20240630.htm:6]**  | $2,008.7  **[0000950170-24-122936_pkg-20240930.htm:18]**  |
| **Paper Segment (in millions)**      | $153.5  **[0000950170-23-001189_pkg-ex99_1.htm:6]**  | $150.9  **[0000950170-23-016955_pkg-20230331.htm:15]**  | $142.8  **[0000950170-23-038396_pkg-20230630.htm:6]**  | $157.9  **[0000950170-23-058590_pkg-20230930.htm:6]**  | $144 million  **[PKG_3370887_3]**  | $163.8  **[0000950170-24-055165_pkg-20240331.htm:14]**  | $150.1  **[0000950170-24-093466_pkg-20240630.htm:6]**  | $159.3  **[0000950170-24-122936_pkg-20240930.htm:18]**  |
| **Corporate and Other (in millions)**| $15.8  **[0000950170-23-001189_pkg-ex99_1.htm:6]**  | $60.5  **[0000950170-23-016955_pkg-20230331.htm:15]**  | $19.0  **[0000950170-23-038396_pkg-20230630.htm:6]**  | $18.3  **[0000950170-23-058590_pkg-20230930.htm:6]**  | N/A | $17.4  **[0000950170-24-055165_pkg-20240331.htm:5]**  | $16.9  **[0000950170-24-093466_pkg-20240630.htm:6]**  | $14.4  **[0000950170-24-122936_pkg-20240930.htm:18]**  |
| **Total Revenue (in millions)**      | $1,978.4  **[0000950170-23-001189_pkg-ex99_1.htm:6]**  | $1,976.3  **[0000950170-23-016955_pkg-20230331.htm:15]**  | $1,952.1  **[0000950170-23-038396_pkg-20230630.htm:6]**  | $1,936.0  **[0000950170-23-058590_pkg-20230930.htm:6]**  | $1.94 billion  **[PKG_3370887_0]**  | $1,979.5  **[0000950170-24-055165_pkg-20240331.htm:5]**  | $2,075.3  **[0000950170-24-093466_pkg-20240630.htm:6]**  | $2,182.4  **[0000950170-24-122936_pkg-20240930.htm:18]**  |

1855c838a68f19a63b9c4d29e7d5e0674b88ce9f62dd6c4b1abfa1fc4fbf2c48

8be318385cf31ee05c61e9eba11d382465748b95ac33983bb53421a5d9151d07

1. Given the anticipated increase in operating and converting costs due to higher seasonal energy and chemical expenses in the fourth quarter, how do you plan to manage these costs to maintain your profit margins?  **[PKG_3403452_4]** 
2. With the recent hurricane damage to strawberry crops in Florida impacting your corrugated shipments, can you quantify the expected volume and revenue loss for the fourth quarter, and what strategies are you implementing to mitigate this disruption?  **[PKG_3403452_4]** **[PKG_3403452_6]** 
3. You mentioned plans to build new plants over the next 2.5 to 3 years; can you provide more details on the expected capital expenditures and how you plan to fund these projects without adversely affecting your cash flow and dividend commitments?  **[PKG_3403452_6]** **[PKG_3403452_3]** 
4. Considering your volumes are up over 8% versus 2023 and continue to outpace the industry, when do you expect this growth rate to normalize, especially given the tougher comparisons next year and the restructuring efforts by your larger competitors?  **[PKG_3403452_7]** **[PKG_3403452_5]** 
5. As e-commerce demand continues to grow and you've invested in running lightweight products, are you considering a strategic shift in your virgin versus recycled fiber mix to better capture the lightweight recycled market segment?  **[PKG_3403452_21]** 

a30a521a9e4a0b47fda9d19edefa446c3a626da74737e813cc9134181c49be26

- **Domtar Corporation**: A division of Paper Excellence, mentioned as one of the largest competitors in the paper segment  **[0000950170-24-022794_pkg-20231231.htm:8]** .
- **Sylvamo Corporation**: Listed as a large competitor in the paper segment  **[0000950170-24-022794_pkg-20231231.htm:8]** .

e649abcdf2163879e8a3b89598cd130784064800339f56a685558855436c2534

### Q3 2024 Earnings Call
- **Issued Period:** Q3 2024
- **Guided Period:** Q4 2024
- **Guidance:**
  - **Earnings Per Share (EPS):** Expected to be **$2.47 per share**  **[PKG_3403452_4]** .
  - **Demand and Shipments:**
    - **Packaging Segment:** Strong demand with slightly higher containerboard volume, but impacted by two fewer shipping days and hurricane damage  **[PKG_3403452_4]** .
    - **Paper Segment:** Lower shipments compared to Q3, with flat prices and mix  **[PKG_3403452_4]** .
  - **Costs:**
    - **Operating and Converting Costs:** Increase due to higher seasonal energy and chemical costs  **[PKG_3403452_4]** .
    - **Scheduled Outage Costs:** **$0.12 per share** higher than Q3  **[PKG_3403452_4]** .
    - **Depreciation Expense:** Slightly higher  **[PKG_3403452_4]** .

### Q2 2024 Earnings Call
- **Issued Period:** Q2 2024
- **Guided Period:** Q3 2024
- **Guidance:**
  - **Capital Spending:** Revised to **$670 million to $690 million**  **[PKG_3394196_3]** .
  - **Earnings Per Share (EPS):** Expected to be **$2.45 per share**  **[PKG_3394196_4]** .
  - **Prices and Mix:** Expected to increase in both Packaging and Paper segments  **[PKG_3394196_4]** .
  - **Shipments:** Strengthening shipments per day, potentially setting a new Q3 record  **[PKG_3394196_4]** .
  - **Operating and Converting Costs:** Higher due to seasonal electricity and recycled fiber costs  **[PKG_3394196_4]** .
  - **Scheduled Outage Expense:** Slightly lower  **[PKG_3394196_4]** .

### Q1 2024 Earnings Call
- **Issued Period:** Q1 2024
- **Guided Period:** Q2 2024
- **Guidance:**
  - **Earnings Per Share (EPS):** Expected to be **$2.07 per share**  **[PKG_3380307_5]** .
  - **Scheduled Mill Outage Costs:** Revised total impact of **$0.89 per share** for the year  **[PKG_3380307_4]** .
  - **Packaging Segment:** Strong demand and higher shipments expected  **[PKG_3380307_5]** .
  - **Paper Segment:** Strong orders but lower volumes due to maintenance outage  **[PKG_3380307_5]** .
  - **Operating Costs:** Slightly lower converting costs, higher freight, and logistics expenses  **[PKG_3380307_5]** .
  - **Tax Rate:** Sequentially higher  **[PKG_3380307_5]** .

### Q4 2023 Earnings Call
- **Issued Period:** Q4 2023
- **Guided Period:** Q1 2024
- **Guidance:**
  - **Capital Expenditures:** **$470 million to $490 million**  **[PKG_3370887_4]** .
  - **Depreciation, Depletion, and Amortization (DD&A):** **$530 million**  **[PKG_3370887_4]** .
  - **Dividend Payments:** **$450 million**  **[PKG_3370887_4]** .
  - **Cash, Pension, and Post-Retirement Contributions:** **$27 million**  **[PKG_3370887_4]** .
  - **Interest Expense:** **$53 million** for the year, with net cash interest payments around **$60 million**  **[PKG_3370887_4]** .
  - **Book Effective Tax Rate:** **25%**  **[PKG_3370887_4]** .
  - **Planned Annual Outages:** Impact of **$0.96 per share** for the year  **[PKG_3370887_4]** .
  - **First Quarter Earnings:** **$1.54 per share**  **[PKG_3370887_5]** .
  - **Jackson Mill Conversion Impact:** Negative impact of **$0.16 per share** in Q1 and **$0.08 per share** in Q2  **[PKG_3370887_4]** .
  - **Containerboard Price Increase:** Effective January 1, 2024  **[PKG_3370887_2]** .

e9dcb84e3b546b9a22b034ea70322aa6beb0be05b4f35c56fee9ddf4c8c6bdce

Export Containerboard Shipments (% Change)

Domestic Containerboard Shipments (% Change)

Corrugated Products Shipments Per Workday (% Change)

Corrugated Products Shipments Per Day (% Change)

803036c206e4d0fc3d0b1ae3b155d561bc82c303f875024d6db31e7bc13d01c6

Packaging

Paper

Corporate and Other

- Intersegment Eliminations

Total Revenue

24715804a49fbc48388b24ec8580058e63877c8755a54180e3e5a8ddab9f169e

Adjustments for Non-Cash Items [USD, Thousands]

Stock-Based Compensation [USD, Thousands]

Changes in Working Capital [USD, Thousands]

Capital Expenditures (CapEx) [USD, Thousands]

Proceeds from / Repayments of Debt [USD, Thousands]

Share Repurchases [USD, Thousands]

Dividend Payments [USD, Thousands]

Net Change in Cash [USD, Thousands]

004a535e8164541f5ac532538c49ae3d2ab123faa19f8963f13350110a8a3b88

| Name                  | Position                                                                 | Start Date         | Short Bio                                                                                                                                                                                                 |
|-----------------------|--------------------------------------------------------------------------|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Mark W. Kowlzan       | Chairman of the Board and Chief Executive Officer                        | July 2010          | Mark W. Kowlzan has served as PCA's CEO since **July 2010** and Chairman since **January 2016**. He previously led PCA's containerboard mill system and worked at International Paper for 15 years  **[0000950170-24-022794_pkg-20231231.htm:12]** **[0001193125-24-079613_d701024ddef14a.htm:6]** .                                    |
| Robert P. Mundy       | Executive Vice President and Chief Financial Officer; Principal Accounting Officer | 2015; April 1, 2024 | Robert P. Mundy has been PCA's CFO since **2015** and will become the Principal Accounting Officer effective **April 1, 2024**. He was previously CFO at Verso Corporation and held finance roles at International Paper  **[0000950170-24-022794_pkg-20231231.htm:12]** **[0001193125-24-134063_d827899ds8.htm:5]** .               |
| Pamela A. Barnes      | Senior Vice President, Finance and Controller; Principal Accounting Officer (retiring) | May 2019           | Pamela A. Barnes has been in her current role since **May 2019**. She joined PCA in **1992** and has held various finance positions, including Treasurer since **1999**. She will retire on **April 1, 2024**  **[0000950170-24-022794_pkg-20231231.htm:12]** .                               |
| Charles J. Carter     | Executive Vice President - Mill Operations                               | January 2011       | Charles J. Carter has led PCA's mill operations since **January 2011**. He joined PCA in 2010 after working in managerial roles at various pulp and paper companies  **[0000950170-24-022794_pkg-20231231.htm:12]** **[0000950170-23-003990_pkg-20221231.htm:12]** .                                                                     |
| Thomas A. Hassfurther | Executive Vice President - Corrugated Products                           | September 2009     | Thomas A. Hassfurther has served in his current role since **September 2009**. He joined PCA in **1977** and has held senior management and sales positions at PCA and Tenneco Packaging  **[0000950170-24-022794_pkg-20231231.htm:12]** **[0000950170-23-003990_pkg-20221231.htm:12]** .                                               |
| Jeff S. Kaser         | Senior Vice President - Corrugated Products                              | May 2020           | Jeff S. Kaser has been in his current position since **May 2020**. He joined PCA in **1987** and has held various roles in sales and management within the corrugated products business  **[0000950170-24-022794_pkg-20231231.htm:12]** .                                                     |
| Darla J. Olivier      | Senior Vice President - Tax, ESG and Government Affairs                  | January 2022       | Darla J. Olivier has led the tax department since **1994** and was promoted to her current role in **January 2022**. She also leads sustainability reporting and government affairs  **[0000950170-24-022794_pkg-20231231.htm:13]** .                                                        |
| Kent A. Pflederer     | Senior Vice President, General Counsel and Secretary                     | January 2013       | Kent A. Pflederer has served as General Counsel and Secretary since **January 2013**. He joined PCA in 2007 and previously worked at Hospira, Inc. and Mayer Brown, LLP  **[0000950170-24-022794_pkg-20231231.htm:13]** .                                                                   |
| Bruce A. Ridley       | Senior Vice President - Environmental Health and Safety and Operational Services | May 2019           | Bruce A. Ridley has been in his current role since **May 2019**. He joined PCA in 1999 and has held various operational roles, including Operations Manager and Mill Manager  **[0000950170-24-022794_pkg-20231231.htm:13]** .                                                               |
| Robert A. Schneider   | Senior Vice President and Chief Information Officer                      | 2019               | Robert A. Schneider has served as CIO since **2019**. He joined PCA in **1989** and has held various management positions in information systems  **[0000950170-24-022794_pkg-20231231.htm:13]** **[0000950170-23-003990_pkg-20221231.htm:13]** .                                                                                         |
| D. Ray Shirley        | Senior Vice President - Corporate Engineering and Process Technology     | May 2019           | D. Ray Shirley has been in his current role since **May 2019**. He joined PCA in 1996 and has held various engineering and management positions, including Mill Manager  **[0000950170-24-022794_pkg-20231231.htm:13]** **[0000950170-23-003990_pkg-20221231.htm:13]** .                                                                 |

78adbdb2d9a564adb587a360657a6cb11afb477642a854bc47eb13aef4de6da4

| Program Details          | Program 1       |
|--------------------------|-----------------|
| Approval Date            | January 26, 2022  **[0000950170-24-122936_pkg-20240930.htm:16]**  |
| End Date/Duration        | N/A             |
| Total additional amount  | **$1 billion**  **[0000950170-24-122936_pkg-20240930.htm:16]**  |
| Remaining authorization amount | **$436 million** as of September 30, 2024  **[0000950170-24-122936_pkg-20240930.htm:16]**  |
| Details                  | The program allows PCA to repurchase shares in open market or privately negotiated transactions, considering factors like stock price and market conditions. It aims to balance share repurchases with other uses of cash such as acquisitions and dividends.  **[0000950170-24-022794_pkg-20231231.htm:30]** **[0000950170-23-003990_pkg-20221231.htm:29]** **[0000950170-24-022794_pkg-20231231.htm:93]** **[0000950170-23-058590_pkg-20230930.htm:16]**  |

026e56e780444ceb507d535143f5bda9f55c0b83ff35abb10345da232a480c6c

Sales to Foreign Customers

576a47dec8925a4cd42a062bdd6114ad00b9292f6b7d8119f16ccb8eb9d09fed

**Quarterly guidance for Q4 2024:**
- **EPS**: $2.47  **[PKG_3403452_4]**  (raised from $2.45  **[PKG_3394196_4]** )  
- **Operating and Converting Costs**: Increase due to higher seasonal energy and chemical costs  **[PKG_3403452_4]**  (no change from prior guidance  **[PKG_3394196_4]** )  
- **Prices and Mix**: Flat  **[PKG_3403452_4]**  (lowered from “expected to increase”  **[PKG_3394196_4]** )  
- **Demand and Shipments**: Strong demand with slightly higher containerboard volume (impacted by fewer shipping days and hurricane damage), and lower Paper segment shipments  **[PKG_3403452_4]**  (no prior guidance)  
- **Scheduled Outage Costs**: $0.12 per share higher than Q3  **[PKG_3403452_4]**  (no prior guidance)  
- **Depreciation Expense**: Slightly higher  **[PKG_3403452_4]**  (no prior guidance)  

2b7e53d25ea9f7e3d6c19bc5ae238c870946f20645c293959b403d48dd18ad79

| Name     | Start Date | End Date | Reason for Change |
|----------|------------|----------|-------------------|
| KPMG LLP | 2014  **[0000950170-24-022794_pkg-20231231.htm:55]**  | Present  | Current auditor   |

fd0eb4d2258369cfdd04e23eb57f221ba6f5b88c53f6c650f69c141e13d6a996

d605b105894461c76cea15498ae0f7ed0a6444033c6c10a1e5ffe17c987efa5d

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

13e30ba20028bb3114a6ab2f54d122fd4d3dffb75f61c64ac9927aab53510bef

25624956adfd4a01b65ac99435f7486f67e507788fcd21c1e985f7184a39666e

- **Bookings and billings are up 8%** in January 2025, indicating strong demand and a robust start to the year.  **[PKG_3413539_5]**
- The company is investing heavily in strategic capital projects, including **12 major equipment installations** and **major rebuilds or new installations at 12 locations** in 2024, which are expected to drive continued volume growth throughout 2025.  **[PKG_3413539_5]** **[PKG_3413539_9]** **[PKG_3413539_21]**
- PKG is gaining market share by positioning itself as the **best supplier with incredible reliability, best quality, and best service**, leading to increased volume and solid growth opportunities going forward.  **[PKG_3413539_19]**

1f8a300ec89358b0df86122de098b0822ddfd00c834b1926222ef386a3d76a13

- **Inflation pressures are squeezing margins, and unless prices increase appropriately, the company cannot keep up with all of the inflation**. The CEO stated, *"But nevertheless, with this comprehensive inflation across the board. It doesn't matter how much capital you spend. You will never — unless you see appropriate pricing, you can't keep up with all of the inflation."*  **[PKG_3413539_30]**
- **Industry benchmark RISI did not recognize the company's announced price increases, which may impact revenue if contracted prices are linked to these benchmarks**. They mentioned, *"We were very surprised when... the RISI Pulp and Paper Week publication did not recognize any increase in the industry's benchmark prices for either linerboard or medium."*  **[PKG_3413539_1]**  This could delay or reduce the realization of higher prices, affecting earnings guidance.  **[PKG_3413539_11]** **[PKG_3413539_14]**
- **Revenue per produced ton decreased year-over-year, even though containerboard index prices increased, indicating margin compression**. An analyst noted, *"If we look at revenue compared to the produced tonnage, over year-over-year, that number is down about **$50 per ton**, even while the index has gone up for containerboard."*  **[PKG_3413539_24]**  The CFO acknowledged the trend, saying it's *"probably closer to **$40**, not **$50**..."*  **[PKG_3413539_24]** **[PKG_3413539_23]**

6ef7bca3129e15dda22e90af3684f065d00076a7f3eefa0c4843030307bee1b6

1. **Capital Expenditure Plans**  
   **Q:** What's your CapEx plan, and are you adding capacity?  
   **A:** We're planning capital expenditures between **$840 million and $870 million** for 2025, with about **$250 million** allocated to four major box plant projects, including new facilities in Glendale, Arizona and Newark, Ohio.  **[PKG_3413539_12]** **[PKG_3413539_17]** **[PKG_3413539_18]**  These investments will enhance our capabilities and provide immediate benefits upon completion this year.  **[PKG_3413539_12]** **[PKG_3413539_18]**  While there are no one big projects on the containerboard side, we're optimizing our mills with a host of smaller projects to increase efficiency.  **[PKG_3413539_12]** 

2. **Price Increases and Contracts**  
   **Q:** How are price increases impacting your business and contracts?  
   **A:** We've implemented price increases in the Containerboard segment, and our customers are paying the higher invoices.  **[PKG_3413539_6]** **[PKG_3413539_10]**  Some contracts tied to the RISI index will adjust more slowly, but we're moving away from RISI due to frustrations with its relevance.  **[PKG_3413539_6]** **[PKG_3413539_13]** **[PKG_3413539_15]**  There's upside potential once RISI reflects the increases, and we're engaging directly with customers to negotiate future pricing.  **[PKG_3413539_14]** **[PKG_3413539_15]** 

3. **Volume Growth Outlook**  
   **Q:** What's the expected volume growth through 2025?  
   **A:** We anticipate continued volume growth throughout the year, although growth percentages may moderate due to tougher year-over-year comparisons.  **[PKG_3413539_9]**  We're off to a strong start with bookings and billings up **8%** in January.  **[PKG_3413539_5]**  Our growth is driven by solid demand from our existing customer base and our ability to provide superior service.  **[PKG_3413539_19]** 

4. **Cost Pressures and Inflation**  
   **Q:** Where are you seeing the most cost inflation?  
   **A:** We're experiencing significant cost inflation in **energy**, labor, benefits, transportation, and services.  **[PKG_3413539_29]**  Energy costs are a glaring factor this quarter, and we're facing **rail cost increases** as well.  **[PKG_3413539_29]**  While our capital investments help us maintain efficiency, pricing adjustments are necessary to keep up with broad-based inflation.  **[PKG_3413539_29]** 

5. **Operational Efficiency Initiatives**  
   **Q:** Are capacity expansions affecting efficiency?  
   **A:** The volume increase from our growth initiatives has caused some short-term **cost inefficiencies**, as we manage numerous projects across our plants and shift business around.  **[PKG_3413539_5]**  However, our teams have done a tremendous job maintaining customer service, and these investments are the "gift that keeps on giving," providing incredible capabilities long-term.  **[PKG_3413539_5]** 

6. **Customer Contract Transitions**  
   **Q:** How are you moving customers off index-based contracts?  
   **A:** We're in the process of transitioning customers away from contracts tied to the RISI index, a process that started about a year ago and will take time due to long-term agreements.  **[PKG_3413539_15]** **[PKG_3413539_16]**  Discussions with our customers have gone very well, as they also find the current indexing methods less useful.  **[PKG_3413539_15]** **[PKG_3413539_16]** 

7. **Operating Rates and Capacity Utilization**  
   **Q:** Are you running at full capacity?  
   **A:** We're running hard but not necessarily full out, with room to optimize our system and grade mix.  **[PKG_3413539_7]** **[PKG_3413539_8]**  We have opportunities to add capacity through optimizing existing mills and potential projects at Counce and Valdosta in the coming years.  **[PKG_3413539_7]** 

8. **Impact of Weather on Operations**  
   **Q:** How has recent weather affected your operations?  
   **A:** Severe cold weather in January impacted our costs and volumes, especially with disruptions in the Gulf Coastal area where **Interstate 10 was shut down**.  **[PKG_3413539_22]** **[PKG_3413539_29]**  The colder winter increased energy usage and affected commercial activity, leading to some volume impacts.  **[PKG_3413539_22]** 

9. **Mix and Product Demand**  
   **Q:** How is product mix affecting results?  
   **A:** In the fourth quarter, we saw a mix impact due to increased **e-commerce activity**.  **[PKG_3413539_20]**  We expect an improved, richer mix in the first quarter compared to the fourth quarter.  **[PKG_3413539_20]** **[PKG_3413539_29]**  Overall, our mix remains steady, and we're adapting to changes in customer demand patterns.  **[PKG_3413539_20]** 

10. **CapEx Allocation Details**  
    **Q:** How is CapEx allocated between maintenance and growth?  
    **A:** Typically, **60-65%** of our CapEx is for maintenance, but this year the percentage is less due to significant growth projects.  **[PKG_3413539_12]** **[PKG_3413539_21]**  We're investing heavily in growth opportunities, not just maintaining existing assets, and have done a good job preserving our assets over the years.  **[PKG_3413539_21]** 

357b66edd9aaad4e65e27ddda39afd5235792204e45681cd45ef959c6f430403

PKG Q4: Bookings & billings jumped 8% in January, fueling a strong 2025. The firm plans $840–$870M in capex, but inflation is squeezing margins and some higher prices aren’t recognized. Watch pricing negotiations, as RISI’s slower index could delay upside.

278857d8a5c0682576492ce4d4108dd65632e690c37142c11f41b259c8920d06

5f5a693be645dcd4b3d2562a04d68cfe98c441b28026330cd2eec480474045ad

**Quarterly guidance for Q1 2025**  
- **EPS**: $2.21  **[PKG_3413539_4]**  (lowered from $2.47  **[PKG_3403452_4]** )  
- **Impact of planned annual mill outages**: $0.23  **[PKG_3413539_3]**  (no prior guidance)  

**Quarterly guidance for Q2 2025**  
- **Impact of planned annual mill outages**: $0.32  **[PKG_3413539_3]**  (no prior guidance)  

**Quarterly guidance for Q3 2025**  
- **Impact of planned annual mill outages**: $0.18  **[PKG_3413539_3]**  (no prior guidance)  

**Quarterly guidance for Q4 2025**  
- **Impact of planned annual mill outages**: $0.45  **[PKG_3413539_3]**  (no prior guidance)  

**Annual guidance for FY 2025**  
- **Dividend Payments**: $450 million  **[PKG_3413539_3]**  (no prior guidance)  
- **Capital Expenditures**: $840 million to $870 million  **[PKG_3413539_3]**  (no prior guidance)  
- **Depreciation and Amortization**: $565 million  **[PKG_3413539_3]**  (no prior guidance)  
- **Interest Expense**: $56 million  **[PKG_3413539_3]**  (no prior guidance)  
- **Net Cash Interest Payments**: $65 million  **[PKG_3413539_3]**  (no prior guidance)  
- **Book Effective Tax Rate**: 25%  **[PKG_3413539_3]**  (no prior guidance)  
- **Impact of planned annual mill outages**: $1.18 per share total  **[PKG_3413539_3]**  (no prior guidance)  

c80efdfca1285a5950dc45d58b7fc118468b50f3d6d7422f2fb04d972c471af0

- Total Revenue: $2,146.1 million (**+11% YoY**, from $1,938 million)  **[0000950170-25-010002_pkg-ex99_1.htm:8]** **[0000950170-24-022794_pkg-20231231.htm:37]** **[0000950170-24-022794_pkg-20231231.htm:56]** **[0000950170-24-022794_pkg-20231231.htm:96]** **[0000950170-24-022794_pkg-20231231.htm:73]**   
- Packaging Segment: $1,975.6 million (**+11% YoY**, from $1,776.9 million)  **[0000950170-25-010002_pkg-ex99_1.htm:8]** **[0000950170-24-022794_pkg-20231231.htm:37]** **[0000950170-24-022794_pkg-20231231.htm:96]** **[0000950170-24-022794_pkg-20231231.htm:73]**   
- Paper Segment: $151.5 million (**+5% YoY**, from $143.8 million)  **[0000950170-25-010002_pkg-ex99_1.htm:8]** **[0000950170-24-022794_pkg-20231231.htm:37]** **[0000950170-24-022794_pkg-20231231.htm:96]** **[0000950170-24-022794_pkg-20231231.htm:73]**   
- Corporate & Other: $19 million (**+10% YoY**, from $17.3 million)  **[0000950170-25-010002_pkg-ex99_1.htm:8]** **[0000950170-24-022794_pkg-20231231.htm:37]** **[0000950170-24-022794_pkg-20231231.htm:96]** **[0000950170-24-022794_pkg-20231231.htm:73]**   

173d07d6a68713b3daa45858cb6daa0ea95739eb10a9320525999d49a7ccffa0

b4f8b98686717e46c70c5f6ddf86f6ceb517d0b00f17dde2878eda5af1e61bb0

63bce1028b77b94b3a7ef36f664e528415aa0aed80e649ac3ac2bc2e5807c86d

| Year | Amount Due (in millions) | Debt Type                     | Interest Rate (%) | % of Total Debt                                                                 |
|----------|------------------------------|------------------------------------|-----------------------|------------------------------------------------------------------------------------|
| 2027     | $499.4 **[0000950170-24-122936_pkg-20240930.htm:11]**               | 3.40% Senior Notes **[0000950170-24-122936_pkg-20240930.htm:11]**        | 3.40 **[0000950170-24-122936_pkg-20240930.htm:11]**          | 20.0% = (499.4 / 2,492.1) * 100 **[0000950170-24-122936_pkg-20240930.htm:11]**                                           |
| 2029     | $499.6 **[0000950170-24-122936_pkg-20240930.htm:11]**               | 3.00% Senior Notes **[0000950170-24-122936_pkg-20240930.htm:11]**        | 3.00 **[0000950170-24-122936_pkg-20240930.htm:11]**          | 20.0% = (499.6 / 2,492.1) * 100 **[0000950170-24-122936_pkg-20240930.htm:11]**                                           |
| 2033     | $399.7 **[0000950170-24-122936_pkg-20240930.htm:11]**               | 5.70% Senior Notes **[0000950170-24-122936_pkg-20240930.htm:11]**        | 5.70 **[0000950170-24-122936_pkg-20240930.htm:11]**          | 16.0% = (399.7 / 2,492.1) * 100 **[0000950170-24-122936_pkg-20240930.htm:11]**                                           |
| 2049     | $396.8 **[0000950170-24-122936_pkg-20240930.htm:11]**               | 4.05% Senior Notes **[0000950170-24-122936_pkg-20240930.htm:11]**        | 4.05 **[0000950170-24-122936_pkg-20240930.htm:11]**          | 15.9% = (396.8 / 2,492.1) * 100 **[0000950170-24-122936_pkg-20240930.htm:11]**                                           |
| 2051     | $696.6 **[0000950170-24-122936_pkg-20240930.htm:11]**               | 3.05% Senior Notes **[0000950170-24-122936_pkg-20240930.htm:11]**        | 3.05 **[0000950170-24-122936_pkg-20240930.htm:11]**          | 28.0% = (696.6 / 2,492.1) * 100 **[0000950170-24-122936_pkg-20240930.htm:11]**                                           |

cce9166471a6e4fdd3329ed7c78fe865406b6e0e7e3a6b4dbfdff3f4dcf16955

Number of mills (count)

Number of corrugated products manufacturing plants (count)

Percentage change in export and domestic containerboard outside shipments (percentage)

Percentage change in total corrugated products shipments (percentage)

Percentage change in total corrugated products shipments per workday (percentage)

Percentage change in domestic containerboard prices (percentage)

Percentage change in export containerboard prices (percentage)

df19d2d0c4d75d5003f7b993153643f782328fd989b11d7590c0bd8c8867153c

- **Persistent inflation in input costs, including materials, services, and maintenance, is putting pressure on margins, and costs are not easing up.**  **[PKG_3380307_8]**
- **Anticipated price increases did not fully materialize due to delays and reduced recognition in benchmark index prices, negatively impacting margins.**  **[PKG_3380307_8]**
- **There are concerns about the sustainability of efficiency improvements and whether the company can continue to achieve the same rate of return on these programs as in the past.**  **[PKG_3380307_23]**

26061cf394e82f7e016da3c4f6874c98d33cec864357e7ca8db5182d7ae17ef3

1. **Increased CapEx Plans**  
   **Q:** Why the $200M increase in CapEx and expected returns?  
   **A:** We're investing in high-return projects like the new Arizona plant to replace inefficient facilities and expand capacity. The spending will span existing plants, new corrugators, and mills, providing immediate returns in line with our historical capital spend. Costs of building have increased significantly, with full-line plants now approaching double what they were 10 years ago.  **[PKG_3394196_13]** **[PKG_3394196_16]** **[PKG_3394196_17]** **[PKG_3394196_23]** 

2. **Strong Volume Growth**  
   **Q:** What's driving your volume growth exceeding industry trends?  
   **A:** Our growth comes from aligning with the right customers and segments, focusing on markets that will grow. This strategy, along with our team's execution, has led to robust bookings and billings, up **12.5%** so far in July. The consumer end has held up better than forecasted, supporting our strong volumes.  **[PKG_3394196_6]** **[PKG_3394196_7]** **[PKG_3394196_18]** **[PKG_3394196_22]** 

3. **Jackson Mill Contribution**  
   **Q:** How is the Jackson mill impacting performance?  
   **A:** Jackson is delivering as expected, running at **1,900 to 2,000 tons per day**, exceeding our initial target. It can run up to **2,400 tons per day**, offering **400 tons per day** of additional opportunity over the next couple of years, equating to over **100,000 tons** annually, contributing to EBITDA growth.  **[PKG_3394196_11]** **[PKG_3394196_12]** 

4. **Price Increase Impact**  
   **Q:** How will recent price increases affect future results?  
   **A:** Our recent **$40** price increase is rolling through over a 90-day period. We'll see most results by the end of the third quarter and fully realized in the fourth quarter. Earlier increases didn't fully impact us due to contract structures, but this increase will contribute positively.  **[PKG_3394196_15]** 

5. **Integration Levels**  
   **Q:** What's your current integration level and potential benefits?  
   **A:** We're about **95%** integrated. Further integrating external tons can provide incremental profits, potentially more than **$200 per ton** when we internalize that volume.  **[PKG_3394196_19]** 

6. **Capital Allocation and M&A**  
   **Q:** Any changes to capital allocation or M&A plans?  
   **A:** Our approach remains the same. We evaluate all opportunities, including acquisitions, capital spending, dividends, and share buybacks. We're in a strong position to act on opportunities as they arise.  **[PKG_3394196_21]** **[PKG_3394196_24]** 

7. **Competitive Landscape**  
   **Q:** Concerns about competitors adopting similar strategies?  
   **A:** We have no concerns. We focus on executing our own strategy, aligning with the right customers and segments. What competitors do is their own plan; we're confident in our approach.  **[PKG_3394196_10]** **[PKG_3394196_25]** 

8. **Demand Outlook**  
   **Q:** Are customers restocking, and what's the demand outlook?  
   **A:** Customers are maintaining conservative inventory levels after earlier destocking. The consumer sector remains healthy, while durables are softer due to housing and supply issues. Overall, demand supports our growth.  **[PKG_3394196_18]** **[PKG_3394196_22]** 

0e27c1d054bc471eec38b9053fb2eae9ea78569d4eb507314f573ff3984696ab

- **Operating costs have increased significantly**, with the company reporting that the reactivation of the Wallula mill added **approximately $30 million** in costs during the third quarter. This mill is noted as their highest cost mill, contributing to higher overall expenses.  **[PKG_3403452_16]**
- **Future volume growth may face challenges**, as the company acknowledges that they are lapping tougher year-over-year comparisons. The strong growth seen this year, including an **8% increase in bookings and billings**, may not be sustainable going forward.  **[PKG_3403452_7]** **[PKG_3403452_8]** **[PKG_3403452_1]**
- **Shifts in product mix could impact profitability**, with stronger growth in e-commerce and non-durable goods, while areas like point-of-purchase displays and durable goods remain flat. This change in demand could affect margins and earnings growth.  **[PKG_3403452_5]** **[PKG_3403452_21]**

9975198ef24a2bec8e1c3343a5c2e7f9bf1cb928d2424fcc7956e7c33dd13ad0

- The company anticipates increased costs in Q1 2024, estimating an additional **$0.35** per share due to seasonal and timing factors, which may negatively affect earnings.  **[PKG_3370887_25]**
- Lower prices and mix have significantly reduced earnings, with a **$1.93** per share decrease largely driven by pricing pressures, indicating challenges in maintaining pricing levels.  **[PKG_3370887_9]**
- There is a disconnect between the company's announced price increases and industry benchmark recognition, as their recent price hike was **not acknowledged** by market publications, potentially questioning the effectiveness of their pricing strategy.  **[PKG_3370887_26]**

a8bf2395ac644ca9feabc09c3c3f5f5a2671a7f98a5c9a7c10ff32c0096de68e

- **Strong volume growth exceeding expectations** has driven better-than-expected earnings, with **bookings and billings up 12.5% in July**, and a focus on aligning with growing customers leading to increased market share.  **[PKG_3394196_7]** **[PKG_3394196_6]** **[PKG_3394196_22]**
- **High-return capital investments**, such as the new **state-of-the-art facility** in Phoenix, which will be a **couple of billion square feet a year opportunity**, are expected to increase capacity and profitability.  **[PKG_3394196_16]** **[PKG_3394196_14]**
- There is **upside potential in EBITDA** from increased integration and incremental tons, with an additional **400 tons per day opportunity** or **100,000+ tons per year** over the next couple of years, enhancing profitability.  **[PKG_3394196_19]** **[PKG_3394196_12]**

5a6e9a69a55a644cfa04e09e4db56150fe25648bc5cd7a75fa1f651c251b3768

1. **Demand Trends**  
   **Q:** How are early Q2 bookings and billings?  
   **A:** Bookings remain strong, currently up **8%**  **[PKG_3380307_6]** , and demand is improving across all sectors, including e-commerce, agriculture, food, and manufacturing.  **[PKG_3380307_9]**  They expect a strong second quarter and remainder of the year.  **[PKG_3380307_6]** 

2. **Margin Pressure**  
   **Q:** Why was EBITDA margin lower than expected?  
   **A:** The **$20** price downturn from last year affected contracts into Q1 due to contract triggers.  **[PKG_3380307_8]**  They anticipated a **$70** price increase, but only **$40** was published and it was delayed.  **[PKG_3380307_8]**  Inflation remains sticky, increasing costs for inputs and impacting margins.  **[PKG_3380307_8]** 

3. **Pricing Mechanisms**  
   **Q:** Is decoupling from RISI indices proving challenging?  
   **A:** Decoupling from RISI is not easy and will take time.  **[PKG_3380307_14]**  They are exploring alternatives with customers due to frustration over price volatility and reporting.  **[PKG_3380307_14]**  Despite challenges, they implemented the **$70** price increase on containerboard.  **[PKG_3380307_14]** 

4. **Inflationary Costs**  
   **Q:** How are rising costs affecting the business?  
   **A:** Inflation is causing costs for inputs like recycled fiber, electrical rates, and chemicals to increase.  **[PKG_3380307_8]**  Despite reduced gas prices, electrical rates are not decreasing.  **[PKG_3380307_8]**  Other costs such as maintenance services, repairs, and insurance are also up dramatically.  **[PKG_3380307_8]** 

5. **Jackson Project Completion**  
   **Q:** Is the Jackson mill conversion complete?  
   **A:** Yes, the project is complete ahead of schedule and is running above expectations, producing over **2,000 tons per day**.  **[PKG_3380307_11]**  This adds significant capacity of high-performance, lightweight linerboard.  **[PKG_3380307_11]** 

6. **Increased Production Capacity**  
   **Q:** What is the new production potential?  
   **A:** With the completion of Jackson, total production capacity is over **5 million tons**, up to **5.2 million tons** depending on grade mix.  **[PKG_3380307_12]** 

7. **Investment in Box Plants**  
   **Q:** Are more investments planned in box plants?  
   **A:** Investments will continue indefinitely to grow with customers.  **[PKG_3380307_10]**  They have installed **69 new converting machines**, replaced or upgraded **25 corrugators**, and built **four new plants** in recent years.  **[PKG_3380307_10]** 

8. **Customer Growth**  
   **Q:** What drove strong box shipment growth?  
   **A:** Focus on existing customers and capital expenditures around their needs led to significant growth.  **[PKG_3380307_20]**  Some customers recovered rapidly post-COVID, boosting shipments  **[PKG_3380307_20]** , and this momentum is expected to continue.  **[PKG_3380307_13]** 

9. **Competitor Mergers Impact**  
   **Q:** How do competitor mergers affect PCA?  
   **A:** They do not foresee significant changes in the domestic market.  **[PKG_3380307_22]**  PCA focuses on serving the lower 48 states and will continue its strategy without concern for competitors' actions.  **[PKG_3380307_22]** 

10. **Productivity Improvements**  
    **Q:** Will productivity gains continue benefiting the P&L?  
    **A:** Yes, ongoing technological and process improvements will sustain benefits to the P&L with no anticipated fade in returns  **[PKG_3380307_23]** ,.  **[PKG_3380307_24]** 

11. **Transport Costs**  
    **Q:** How are transport costs impacting expenses?  
    **A:** Transport costs are rising, with about **65%** of spend on rail.  **[PKG_3380307_15]**  Rail costs have increased due to contract renewals, contributing to higher expenses.  **[PKG_3380307_15]** 

12. **Cost Pass-Through Mechanisms**  
    **Q:** Can costs be passed through automatically in contracts?  
    **A:** It's complicated due to variations in materials and product specifications.  **[PKG_3380307_18]**  They are exploring options directly with customers to address rising costs.  **[PKG_3380307_19]** 

f76de986d2d627dbfb38580735e1edbc8cb86280b1a7e2334371959ce516ac29

- **Strong demand momentum continues**, with **bookings and billings currently up about 8% above a year ago**, and this trend is expected to continue throughout the quarter.  **[PKG_3370887_7]**
- **Significant capital investments in box plants**, with **over 30 strategic projects planned at 26 plants in 2024**, including major equipment installations and new facilities, enhancing growth capabilities to meet market demand.  **[PKG_3370887_11]**
- **Ongoing operational efficiencies and cost reductions**, driven by continuous improvements and the development of an **in-house transportation logistics group**, providing flexibility and cost management, supporting margins and future performance.  **[PKG_3370887_21]**

60d930b363c4ad194c2f84daebb0ddb2f5a2ba95d421a74ccf84ef4c618401a5

- *Strong Demand and Shipment Growth:** Packaging Corporation of America (PCA) is experiencing strong demand across all sectors, with **bookings up 8%** as of the second quarter. Shipments per workday were up **11%**, and total shipments were up **9.2%** compared to last year's first quarter. The company expects this momentum to continue into the third and fourth quarters.  **[PKG_3380307_6]** **[PKG_3380307_9]** **[PKG_3380307_12]** **[PKG_3380307_25]**
- *Strategic Investments Driving Market Outperformance:** PCA's targeted capital investments in its box plant system and focus on existing customers have significantly improved productivity and efficiency. These investments have allowed PCA to **outperform the industry**, take market share, and build a better quality product.  **[PKG_3380307_25]** **[PKG_3380307_20]**
- *Effective Cost Management Amid Inflation:** Despite persistent inflation in costs such as energy, materials, and services, PCA is managing costs effectively through operational efficiencies and process improvements. This focus on cost management is helping to maintain margins in a challenging cost environment.  **[PKG_3380307_8]**

18538f100c07edf9c3c46649d98f44010c53135adeddb9425d1faf9401bb1491

- **Significant increase in capital expenditures could strain cash flow and not yield expected returns**: The company raised its full-year capital spending guidance from **$470-$490 million to $670-$690 million**, primarily due to projects like the new greenfield box plant in Phoenix and other high-return opportunities.  **[PKG_3394196_3]**  This aggressive investment might not generate the anticipated returns, potentially impacting shareholder value.
- **Shift towards lower-margin brown packaging may compress margins**: The company noted a change in product mix, with growth primarily in the **"brown area"** rather than specialty, graphics-oriented products.  **[PKG_3394196_6]**  This shift could lead to **margin compression** if higher-margin segments remain stable while lower-margin segments grow.
- **Conservative customer inventory levels may limit future demand growth**: Customers are maintaining **historically lower inventory levels** and are not significantly restocking.  **[PKG_3394196_22]**  This cautious approach may hinder future packaging demand, impacting the company's ability to sustain volume growth.

972f7077e3f73309037a2ee5d5cce6d430df02fe60ca9c9cde6ca2e26a8804ce

- **$PKG has consistently outpaced industry volume growth**, with **bookings and billings per day up just over 8%** versus 2023, reflecting strong demand and market share gains.  **[PKG_3403452_7]** **[PKG_3403452_5]**
- **The company is confident in continuing profitable revenue growth** by focusing on customer needs and capital expenditures based on customers' requests, positioning them to take advantage of every opportunity.  **[PKG_3403452_7]** **[PKG_3403452_5]**
- **The Paper segment is performing exceptionally well**, achieving **EBITDA margins of 27%**, as the mill is operating efficiently with strong market demand, contributing significantly to the company's profitability.  **[PKG_3403452_14]**

feea8daba74b5f150d44ff346704802bfc3327a9d2a9557c261566b1d5ed1729

1. **Volume Growth Sustainability**  
   **Q:** How sustainable is your volume growth outpacing the industry?  
   **A:** We continue to significantly outpace the industry with our **8%** growth in bookings and billings versus '**23**'  **[PKG_3403452_5]** , primarily driven by growth within our existing customers and some new clients.  **[PKG_3403452_23]**  While we expect tougher comparisons next year due to strong comps, we plan to take advantage of every opportunity to profitably grow revenue and maintain our track record of outgrowing the market.  **[PKG_3403452_7]** **[PKG_3403452_8]** 

2. **Capacity Expansion Plans**  
   **Q:** What are your plans for increasing capacity to meet demand?  
   **A:** We are heavily investing in our box plant system, including building new operations in Glendale, Arizona, starting early next year, and have plans to build a couple of new big plants over the next **2.5 to 3 years**.  **[PKG_3403452_6]** **[PKG_3403452_9]**  We continue to optimize existing mills and have identified projects at Counce and Valdosta to increase capability.  **[PKG_3403452_13]** 

3. **Operating Costs and Margins Outlook**  
   **Q:** How are operating costs trending, and what is the margin outlook?  
   **A:** Operating costs have stabilized at a high level due to inflation, with higher costs from running Wallula this year (approximately **$30 million** increase) and higher OCC costs.  **[PKG_3403452_16]** **[PKG_3403452_24]**  We expect costs to moderate over the next few quarters, potentially benefiting margins next year.  **[PKG_3403452_17]** **[PKG_3403452_18]** 

4. **Supply Constraints Management**  
   **Q:** How will you manage supply constraints given strong demand?  
   **A:** We are optimizing existing assets to meet customer needs and have long-term plans to ensure supply.  **[PKG_3403452_10]** **[PKG_3403452_26]**  Although we aimed to build inventory ahead of maintenance outages, strong demand has kept inventory below target levels.  **[PKG_3403452_22]** **[PKG_3403452_10]**  We have plenty of capability to take care of our customers for the next few years.  **[PKG_3403452_25]** 

5. **Box Price Increases Realization**  
   **Q:** Are box price increases fully implemented?  
   **A:** We have a disciplined approach to box price increases, implementing them by customer and item. The lion's share was through in the third quarter, with some tracking into the fourth quarter, and a couple of annual contracts triggering in January '**25**.  **[PKG_3403452_19]** **[PKG_3403452_20]** 

6. **Paper Segment High Margins**  
   **Q:** What drove the strong margins in the Paper segment?  
   **A:** The International Falls mill is performing exceptionally, producing close to **500,000 tons** of uncoated freesheet annually, achieving margins around **27%**.  **[PKG_3403452_14]**  The mill is well-capitalized and hitting on all cylinders.

7. **Capital Allocation Strategy**  
   **Q:** How are you allocating capital, and any plans for share repurchases?  
   **A:** We prioritize high-return investments in our operations, with capital spending increased to approximately **$700 million** this year for accretive opportunities.  **[PKG_3403452_11]**  This is currently the best use of our excess cash to drive shareholder value.

8. **Maintenance Outages Impact**  
   **Q:** How will maintenance outages affect production next year?  
   **A:** Next year will have a lighter maintenance outage schedule compared to this year, without significant outages like the **40-day** shutdown at Jackson.  **[PKG_3403452_10]** **[PKG_3403452_15]**  This could result in about **100,000 tons** of additional production.  **[PKG_3403452_15]** 

9. **Operating at Full Capacity**  
   **Q:** Are you operating mills at full capacity?  
   **A:** All mills are running full out, including Wallula, which has been operating at full capacity this year.  **[PKG_3403452_12]**  We continuously optimize our operations to meet customer demand.  **[PKG_3403452_12]** **[PKG_3403452_25]** 

10. **Recycled vs. Virgin Mix**  
    **Q:** Has your approach to recycled versus virgin fiber changed?  
    **A:** We focus on meeting customer performance needs and have enhanced our mills to efficiently run lighter weights, but we haven't changed our strategic approach to fiber mix.  **[PKG_3403452_21]** 

11. **Inventory Levels and Demand**  
    **Q:** Why are inventories below target levels?  
    **A:** Stronger-than-expected demand has prevented us from building inventories as planned.  **[PKG_3403452_22]**  Despite efforts, we have not succeeded in achieving target inventory levels, but it's a good position to be in.  **[PKG_3403452_22]** 

12. **Crop Damage Impact**  
    **Q:** How might crop damage affect volumes?  
    **A:** The severity of crop damage, particularly in Florida, is uncertain. A full crop expected in Q4 may shift to late Q4 and bleed into Q1 '**25** due to replanting efforts.  **[PKG_3403452_6]** 

c4e8642b79fd4263cf5078743c2090122eac51d757f85805cc080a0b65693003

Packaging Corp of America (PKG)

Financials