Adam Josephson: Got it. And on price, Tim, just given the lags you mentioned with respect to when the previously published price changes hit your P&L, is it reasonable to assume that your realized prices in Industrial Packaging will fall sequentially not only from 4Q to 1Q but also from 1Q to 2Q? I would assume so but I just want to confirm that.
Tim Nicholls: Yes, I think that’s reasonable.
Adam Josephson: Okay. And my last question is just if I think about the implied 1Q guidance, I think, around $530 million, maintenance will be higher by about $120 million compared to the latter 3 quarters. So if I take the $530 million, I’d go up to $650 all else equal, if you assume the last 3 quarters of that, you get to about $2.5 billion for the year. So obviously, there’s additional improvement embedded in your guidance, I assume from higher realized pulp prices or otherwise. So you’re assuming that even though prices in Industrial Packaging will likely be lower from 1Q to 2Q and thereafter. Is that — I just want to make sure I’m clear on the moving parts from 1Q onward.
Tim Nicholls: It all sounds reasonable.
Adam Josephson: Got it. And just last one for me is what are you — what is your sense, Tim or Mark, as to how — the extent to which the customer destocking has played out in terms of box demand? Do you think you’re 90% of the way there? 70%? What are you hearing from your customers as to what their inventory levels are and their expectations are?
Mark Sutton: I think, Adam, we’re hearing — there is a range but we’re hearing, as Tim, I think, mentioned in the earlier question, a large portion of the destocking did occur in the fourth quarter. There are a couple of segments that are maybe still going through it. But in some cases, we’ve had orders pick up in certain segments to kind of replenish inventory. So it feels like based on what we’re hearing qualitative and what we’re seeing in order book that the destocking story of demand chain played out largely. And now the question mark on everybody’s mind is what does the consumer do as we move through the first half of the year with respect to disposable income, what happens with inflation, they’re getting some relief on fuel prices and does the consumer move back into the goods economy.
And more than likely, everybody who looks at it will get it wrong and it will probably come back faster or it will take longer to come back but we won’t get it precisely right but that’s what we’re hearing.
Operator: Our last question will come from Citi in line of Anthony Pettinari.
Anthony Pettinari: Just a couple of quick ones. Maybe following up on Adam’s question on the outlook. I think over the last few years, when you’ve given a full year outlook, you’ve given kind of a range of $300 million EBITDA. This year, you’re giving $2.8 billion which is maybe a bit more of a specific number. I’m just wondering if there’s sort of a different way that you’re formulating or presenting the outlook is 2.8 million kind of an internal target? Or how do you think about sort of upside, downside there?
Tim Nicholls: Anthony, it’s Tim. We said approximately $2.8 billion. It could be a little bit higher or a little bit lower is just a dynamic environment and we think it will be around that $2.8 billion level.
Anthony Pettinari: Okay. And then you talked about lower fiber costs in the 1Q outlook slide. I was wondering if that’s just a function of seasonality or if you’re seeing real deflation or maybe price declines there. And then I was just wondering if you’re seeing any uptick in OCC? And if you could just kind of comment on Southern virgin fiber costs, understanding those are kind of local markets.
Tim Nicholls: No. I think it’s OCC and virgin fiber, we’re expecting to be down modestly. You’ve had a lot of transportation cost impact on — really on both. But on virgin fiber and our inventories are in good shape. And so we think we have an opportunity to bring virgin wood cost down slightly as well.
Operator: I’ll now turn the call back over to Mark Sutton for closing comments.
Mark Sutton: Thank you and thanks, everyone, for joining our call today. Just to kind of wrap up with a couple of key points. We’re excited about 2023. We believe in our outlook. We’ve got opportunities to maximize our performance in this uncertain environment. A lot of opportunity to get our cost structure back to something that we would consider more normal on different cost ratios. And then, looking at the commercial improvements we are making throughout 2022 and into 2023, we expect to see dividends on improving our profitability regardless of the demand environment and then the investments we’re making are primarily in our box system, we’ll continue to make those and we will be ready with a more sustainable operating model when demand returns to a more normal level with the appropriate level of converting capacity and capability in the right geographic locations.
So a lot to do. We’re excited about it and we look forward to updating you along the way. Thanks for joining our call today.
Operator: Once again, we’d like to thank you for your participating in today’s International Paper’s fourth quarter 2022 earnings call. You may now disconnect.
