Mark Kowlzan: Yes, I mean we’re probably spending close to $250 million just in the box plants alone this year. And that’s all of the 30 strategic projects we’re working on the box plants and building the new plant out in Salt Lake City and finishing that up. And then the rest will be just in the smaller one-off projects in the mills. And then obviously, we’ve got the maintenance-type capital that goes on. But the bulk of its – quite frankly, the bulk of its in the box plants. And then finish up the Jackson conversion.
Anthony Pettinari: Okay. And is there a final number on the Jackson capacity add in terms of how much – how many tons that you would expect that to add when it’s completed?
Mark Kowlzan: The machine certainly ought to be able to add approximately 175,000 to 200,000 more incremental tons a year when we’re done with this phase of work. I believe the number for 2023 is production of that machine was somewhere around 537,000 tons of production for 2023. So if you add 200,000 more tons that you’re up in that 700,000 tons capability. But again, it all depends on our demand. And so we’re going to run to demand, as we always have, but that’s the necessity of being able to build this runway that our customers can depend on and they know they can grow with us and we can supply them the product and the value they need. And so the Jackson machine is going to have that capability to ramp up and ramp down, and provide all the grades we need at an incredibly attractive cost position.
Anthony Pettinari: Got it. Got it. I’ll turn it over.
Mark Kowlzan: Okay. Next question please.
Operator: Our next question comes from Phil Ng from Jefferies. Please go ahead with your question.
Phil Ng: Hey guys, congrats on a really strong quarter. Your business is relatively a shorter cycle business, but it certainly seem pretty confident on the demand outlook for the first half with capacity bringing back online. What are your customers selling? Are there any pockets of end markets that kind of really stand out where you’re seeing demand kind of bounce back in a bigger way? And are you seeing any restocking after a year’s worth of destocking effectively?
Tom Hassfurther: Phil, I think the demand outlook obviously remains good. It’s pretty much across the board. There’s no one industry that stands out more than the other, other than maybe e-commerce. Because you still see the brick-and-mortar stores continue to struggle a little bit, but that’s more than offset by the e-commerce side of the business. So that remains quite good. And I think relative to restocking, I would say that the restocking has been quite conservative to date. Nobody jumped up and said, “I’m going back to where I was during COVID” or anything like that, they’re trying to be reasonably conservative going forward. And – but – so I think we saw a little bit – we probably saw a little bit of a jump as a result of that, but nothing like we saw on the destocking side.
Phil Ng: Okay. That’s helpful. And then I guess a question for Bob. If I look at your last two quarters, operational and converting costs were down pretty sharply, which is impressive especially with Wallula come back on. Preaching the first half of the year you’re going to have some outage expense of Jackson. But some of the gains you saw in the back half, is that pretty sticky, and that’s still to come? And I know you guys talked about all these different projects you guys are working on the box side of things. So kind of help us think through that driver potentially good or bad this year.
Bob Mundy: I’m sorry, what did you say was sticky feel? I didn’t catch that part.
Phil Ng: The operational and converting cost, that came down pretty nicely in the back half of 2023. I’m just trying to gauge should we expect follow-through in 2024, especially with some of the investments you’re making in the box plants? Is that a good guy as well?
Bob Mundy: No, absolutely. I mean, as we’ve said many times, that never stops. It’s not just capital projects. It’s things that don’t – it’s just changing behavior, a technique, a process. It doesn’t cost money comparing to others new things, new technologies, new ideas, and those thousands of those things are going on every year. And that is really what drives those reductions that we’ve talked about historically, and that certainly will continue in the future.
Mark Kowlzan: One good example of that, and we don’t talk about a lot, our transportation capability. Over the last decade, we’ve built an incredibly strong transportation logistics group within the company, and it’s nationwide now. We’ve got a very large fleet of tractors and trailers running the country, taking care of not only containerboard, but a lot of our packaging to the customer. And so that capability of having our own trucking in-house has provided enormous flexibility in cost management on the transportation side of the equation. So that’s just one example of how we go about looking at our business and then executing.
Phil Ng: Super. Just one last one for me. I think on the prepared remarks, you called about $1.1 billion of liquidity. Mark, you highlighted being balanced in terms of capital deployment. Any opportunities perhaps to play a little offense in a market that’s a little more distressed, especially some of the capacity that’s come on. Is that an opportunity? You guys are obviously growing pretty nicely and generate a ton of free cash flow here.
Mark Kowlzan: I’ll let you know when it happens. That’s the beauty of having that firepower. We can not only continue to look at share buyback and dividends. But if an opportunity comes up on a one-off on the packaging side to buy an existing business, we can easily move into that. If something on the mill side came up that we found attractive, we can move into that and not worry about how we finance it or how it affects the balance sheet. And so the other thing I want to remind everybody, back when we called out the 2023s capital, and we – the 2022 capital up over $800 million. And we reminded everybody that the 2022 capital would be going down into a much more manageable level, much more reasonable level in that $400 million range.
