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#Hello, <UNK>.
It's <UNK>.
On the first question, the capacity, there's really no difference than what we said at the time we announced it.
We said it was going to be a 2016 - 2017 set of actions.
So I don't know if it's half, half.
But you'll see some of it come through this year and you'll see a little bit more come through in the first half of next year.
And then on maintenance, maintenance varies mill by mill and period to period.
So there's a plan.
There's a schedule that goes out years.
And you look at it, piece of equipment by piece of equipment and it just happens that you will hit periods when the things that need to be tended to in an annual outage costs more because of the nature of the work in a given period than in others.
And I would add to that, <UNK> ---+ this is <UNK> ---+ is while you do see the reduction from the last time we forecasted the second quarter down is we know as a Company that we've got headwinds, and so what we've been trying to do, of course, is you've got to find other levers to pull.
So we're, as <UNK> said, he's looking at his system very hard to make sure he's doing what he needs to do, and if there's an opportunity to trim some things up to get more money to the bottom line, that's what we're attempting to do.
And we'll continue to disclose that each quarter so you can follow and track those changes.
<UNK>, this is <UNK> <UNK>.
Just the question, the first question you asked, just to tie it back to an earlier question around how we run our system, that incremental capacity capability that's coming from these investments, as <UNK> mentioned, is really about making some products differently than we've made before, making our system more flexible, meaning we can make similar products at the same mill or a different mill, so we can improve our supply chain.
So the issue of capacity coming online is only when and if we need it for the demand environment.
It's really the driver is really making more of this and less of that for the boxes that we need to make going forward.
And as an outcome of improving those facilities, we have more capacity if we need more capacity.
So that's the way to think about that, as opposed to this is coming on at this date and this is coming on at that date.
It's coming on as a new product, a new basis weight, a new design.
And net capacity comes on if we have the orders for it and doesn't come on if we don't have the orders for it.
Thank you.
I think our forecast is that we could see some modest pressure in OCC pricing as we go through the second quarter.
We don't expect it, at this point, to be a major factor.
And yes, in the first quarter inputs were a bit of a tailwind for us, which we're operating in a certain environment and trying to take advantage of the environment that we have.
Well, I think part of what you've seen, just in what we've seen in terms of our supply chain network is rail and truck availability has improved dramatically in the last part of last year, early this year, compared to where we were, say, a year ago.
So that's obviously having an impact on the discussions you have with carriers about rate structures.
It's still a very challenged environment, in some cases, in terms of those discussions, but we think we are having some measure of traction as we have those discussions.
The bigger impact in the moment is just what it means to how we think about our stocking positions across 200-plus facilities, and it's meaning at the moment that we need less inventory and we can run a much more efficient supply chain.
So there's benefit in that.
I think what we worry about is how it changes over time and will there be a snap back of utilization rates around carriers later this year.
I don't know when it's going to happen or if it will happen.
I just know that things don't stay static.
People take actions.
And so we don't count on anything lasting.
I think it goes back to the power of the system.
We have tremendous flexibility, and we're trying to create more flexibility through these investments so that we can pull back when we need to and we can recover quickly when we need to.
Good morning, <UNK>.
Hello, <UNK>.
This is <UNK>.
No, I think what we're attempting to do there is cash flow is still front and center.
What we've got is that particular annual plan is focused on the majority of our employees who are running our operations, that's the level and type of job.
And we all talk in EBITDA in the Company.
That's what our plans are based on.
That's what people are measured on.
And we've had a little bit of slippage in our EBITDA progress over the last couple years.
So it's just an attempt to refocus.
In the overall scheme of things, obviously cash from ops starts with good, strong EBITDA and then you go to the cash flow, free cash flow.
And our capital allocation strategy's clearly understood commitment to the dividend.
So no message other than focusing the people who are actually on that plan to look at ways we can improve our EBITDA and break through the flat nature of it over the last couple of years.
So that's one plan for one year for a certain group of employees.
<UNK>, what I would say is we have no required pension contributions for 2016 and 2017.
How we go forward, we'll obviously navigate that as we move forward.
Hello, <UNK>, it's <UNK>.
We see in certain regions, in certain areas, there's either more or less competition from a certain type of product range.
I think the way we think about it is we're looking with our customers at best fit and best use for the packaging they need, and it includes a variety of substrates, some virgin, some recycled, fit for use.
But it also includes capability, geography, service levels.
And so we're selling them more than just is it recycled or is it virgin.
We're selling them a total product.
And we've got the breadth of products to do it like no other.
So there's always going to be competition.
It's a very competitive market, but we feel good about the value propositions we have.
Yes, I don't want to speculate on what we will do or won't do.
We've got low OCC input cost at the moment.
It's a moment in time.
We think there's probably a different trend over time and we'll make decisions.
It's like I talked about these capacity additions, we're not just adding generic tons.
We're adding products and grades and basis weights for where we see growth in our channels and the types of products that we need to support that growth.
And then we run it accordingly, as we've said, to what our demand is.
So we constantly look at what are those products, what do they need to be, where should we add them.
And it will be an ongoing evaluation.
Thanks, <UNK>.
I would say we run a very tight supply chain year round and we make adjustments as we go.
So no, I'm not going to break out tons or weeks of supply.
I'm just going to say that we're constantly looking out four, five months in advance, targeting where we think we need based on our demand signal, and then we make adjustments as we run the system.
So the downtime that we took in the fourth quarter and first quarter, a very large component of that goes back to supply chain efficiencies and just not needing as much inventory through our chain.
That could change over time.
And maybe we're taking a little bit of risk on the downside in terms of how it might change and what we might do to be able to do to respond it.
But we just like to run a very tight supply chain, and we'll continue to do so.
No, they're not flat.
And a lot of things go into targeting inventory levels.
We run hundreds and hundreds, if not thousands of grades, 200 locations.
And so we're looking product by product, basis weights, grades, locations and stocking levels across all of those, and then we're adjusting the system quarterly.
And if it just takes less time to get product from mills to box plant because the velocity has increased, then we obviously don't need as much inventory in the system.
So <UNK>, on the Ilim, I think, release that you're referencing, they put out a five-year plan and it was a capital plan to improve the business.
A big portion of that is inclusive of their normal maintenance and regulatory CapEx.
That's about $325 million annually.
So the incremental that was in that announcement over that five-year period was about $700 million.
And it's planned only as the projects are developed and as they have the right returns to improve the current business that they have and to improve the quality of the product and, if necessary, to make more product at a second facility.
And the plan for that would be to organize the funding the same way the prior development of Ilim was done, which is on the Ilim balance sheet, and we don't see any effect on the dividend changing or going down or anything like that.
So we think there's some good opportunities for improving Ilim.
And it goes to that comment I made on my closing statement around making products that are needed in the market, mainly into consumer-oriented end uses, and making them in the right place in the world for your advantage, fiber, cost structure, and workforce.
And this is a perfect example of that.
And <UNK>, I'll just add on.
We actually are going to get a dividend payment, I'm looking at my colleagues who are on the Board, is the Ilim joint venture last week approved the dividend payment for 2016.
So we'll receive between $50 million, $55 million this year and another recommitment to the dividend flow out of the business, given that it's generating significant cash.
And also if you look at their debt balance, their debt has actually come down, as well.
So the financial condition of that business is great and we're counting on dividends out of that business as part of the value creation equation for International Paper.
Thank you, <UNK>.
Good morning, <UNK>.
Yes, those are two discrete items that we called out.
So that would be the right way to look at it, <UNK>.
Yes, <UNK>, I think what I called out was $22 million on total outage expense from first to second.
So I'm not sure where the number that you said.
What we did call out is Riegelwood was a big driver, but if you add it all up, if you go all the way across the line there and add it all up, it's a $22 million improvement first to second.
The second part of your question ---+ I'm not sure I ---+ the second part of your question then still has application.
Yes, and you know, the second quarter's always a better operations quarter than the first.
It's not as cold.
Just have a lot behind you.
It's generally a good operational quarter, for lots of reasons.
And we anticipate that to happen.
No, the move in Madrid is really to complement what we do with craft liner.
And your assessment is accurate.
There's been lots of attempts to make products with mixed substrates in that field.
It really, really is driven by the supply chain.
There are probably some short supply chains that can bear different products.
But the humidity from the harvest all the way through the supply chain to the market is what drives the performance characteristics of fresh food packaging for needing craft liner or craft-like performance characteristics.
The industrial business, the high end industrial business that complements your mix and your plant ---+ because obviously, agriculture is seasonal and you want to run your plant and run a successful business over the year ---+ that's where the high performance, light weight recycled comes in.
And it allows us to perform better in some of the best industrial segments versus using board that is not that high performance, that you've got to use more of it and things of that nature.
You end up not being competitive in the industrial segments that you really want to be in.
Hello, <UNK>.
I'm assuming you're talking about container board.
We feel pretty good about the demand signal that we've gotten from the markets.
Margins take a hit.
Demand seems to be holding up, which says to us there's a need for the type of product that we're supplying to the export markets.
And we've been a strategic supplier to those markets for decades.
So we have long-term relationships that we stick with quarter to quarter, year in, year out.
We feel pretty good about our backlogs for the second quarter.
The market's very competitive.
I don't want to forecast price, but I'll just leave it that it's competitive and the types of erosion that we've seen probably continue into the quarter.
So we'll manage it accordingly.
But we still make decent money on export and we like it a lot, on average, through the cycle.
Well, I'm not going to forecast what we'll produce.
We've said that over time our goal is that we position ourselves with the right segments and with the right customers and we would expect to perform in line with market, as our choices around customer mix grow over time.
And we've seen a little bit of both here over the past year.
Last year, we were underperforming because of some of that exposure.
And in the first quarter of this year, we were right on top of it.
So to us, it's about customer choices and how we align ourselves in the right spots.
Thanks, everyone.
Sorry, Brandy.
I jumped the gun a little.
That's all the time we have today, folks.
Thanks for joining.
And as always, Michelle and I are available after the call.
Have a great day.
