Welcome to the Sonoco Fourth Quarter 2016 Earnings Conference Call. [Operator Instructions]. As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Mr. Roger Schrum, Vice President of Investor Relations. Sir, you may begin.

Thank you, Caylee. And good afternoon, everyone. Welcome to Sonoco's investor conference call to discuss our 2016 fourth quarter and full-year financial results. Joining me today are Jack Sanders, President and Chief Executive Officer and Barry Saunders, Chief Financial Officer. A news release reporting our financial results was issued before the market opened today and is available on our Investor Relations section of our website at Sonoco.com. In addition, we will reference a presentation on our quarterly results which was also posted on our Investor Relations website this morning. Before we go further, let me remind you that today's call and presentation contain a number of forward-looking statements based on current expectations and estimates and projections. These statements are not guarantees of future performance and are subject to certain risks and uncertainties; therefore, actual results may differ materially. Furthermore, today's presentation includes the use of non GAAP financial measures which management believes provides useful information to investors about the Company's financial condition and results of operations. Further information about the Company's use of non-GAAP financial measures, including definitions, as well as reconciliations of those measures to the most closely related GAAP measure, is also available on our Investor Relations section of our website. Now with that, I'll turn it over to Barry.

Thank you, Roger. I'll begin on slide 3 where you see this morning we reported fourth quarter earnings per share on a GAAP basis of $1.04 and base earnings of $0.62 which is within our guidance of $0.60 to $0.65 and compares to base earnings of $0.64 for the same period in 2015. This brings our full-year base earnings to $2.72 as compared to $2.51 in 2015. The differences between GAAP and base earnings are discussed in our press Release, but for the fourth quarter they are related primarily to the exclusion of the gain on the divestiture of our blowmolding operations. On slide 4, you find our base income statement where you'll see sales were $1.142 billion, down $124.9 million or 9.9% versus the prior year. And you'll see the key drivers in the sales bridge in just a moment, but in summary, it is from lower volume due to 2016's fourth quarter having five fewer calendar days or four fewer business days than the previous year, as well as the impact of the blowmolding divestiture and exiting the pack center in Mexico. Gross profit was $214.8 million, right at $25 million below the prior year due to the lower volume due to the fewer days and negative manufacturing productivity. And, again, you'll see more details of the drivers in the EBIT bridge in just a moment. While the gross profit margin percent was essentially unchanged at 18.8%. Selling, general and administrative and other income and expense items was $120.3 million which was down $15.8 million from last year due to the impact of the fewer days in the period, the impact of the blowmolding divestiture, lower management incentive accruals in the quarter and some fixed cost reductions, all of which more than offset normal wage and other S&A…

Thanks, Barry. Let me talk briefly about our 2016 performance and then update you on initiatives to grow and optimize our portfolio and finally conclude with our key focus areas in 2017. By most measures 2016 was a solid year for Sonoco despite flat to negative growth by many of our consumer product customers and generally muted GDP growth around the world. Overall, we achieved record GAAP and base earnings and gross profit margins expanded 90 basis points to the highest level in 15 years. Base earnings per share grew 8.4% and each of our four business segments reported year-over-year improvement in operating profit, with our targeted growth businesses -- consumer packaging and protective solutions -- reporting record results. Operating profit in our consumer packaging segment grew 4% in 2016 and operating margins grew 90 basis points to a record 11.8%. Within the consumer packaging segment, operating profit in rigid paper containers declined 1% as volume growth in the emerging markets of Southeast Asia and Latin America partially offset declines in North America and Europe. Flexibles operating profit grew 15.2%. And plastics operating profit was essentially flat year over year despite the divestiture of blowmolding in the fourth quarter, reducing sales by two months. Operating profit in display and packaging was up significantly year over year as we resolved previously reported issues with a contract packaging center in Mexico. As we mentioned in our December Analyst meeting, we have been awarded significant new volume with Duracell and with a large CPG customer in Brazil which should lead to solid volume growth for this business in 2017 and beyond. Moving on to our paper and industrial products segment, operating profit for 2016 was up 4.5%. And absent the well-documented market headwinds in our corrugated medium operations, results would have been double-digit…

[Operator Instructions]. Our first question comes from the line of Chris Manuel with Wells Fargo.

Just two questions. One, on the OCC side, it sounds like you're pretty far behind the curve given the unusual moves we've had thus far. And, Jack, I think I heard you say that even with some of the price recovery that you have in place, the $60 increase, you still might be behind as you move through the year. Maybe I didn't fully understand. The $60, would that get you back to even or do you still feel that you're going to have to recover more as the year goes on?

Chris, no. What I meant to say, if I said it differently, is that we'll be behind in the first quarter because prices escalated during the quarter. The contractual resets are based upon what the price was in December, so that set. We're moving, as I said, with a $60 a ton increase and an 8% increase in tubes and cores that will begin to recover as soon as it goes in, the increase and more. That will begin our recovery process during the course of the quarter but we won't get the contractual reset piece until it starts in April when the new prices go in. What I'd expect is that, like we have in seven of the last nine years, price-cost will turn positive for the year and we'll begin that recovery process in the second quarter if OCC begins more of a normalized pattern and doesn't continue to run straight up.

Okay. On the consumer side, a lot of your contracts just reset once or so a year. I think there's a slug in Q4, I think there's a slug in maybe it's May or June. How are you feeling about positioning there? Is there an opportunity to potentially, given we're seeing a lot more volatility recently, reset those more frequently? I'm assuming the recycling ops are probably doing quite well but they can't keep up with some of this offsets different.

Yes, let's break that down. If you think of consumer as plastics and paper, our plastics operation is really reset every quarter, much like we do on the industrial side of the business. Really, it's our can business that has a good bit of business that's on open contract but a couple of their contracts or the contracts are more point in time. We usually do a lot of aggregating around what those numbers should be, what they are. And those contracts have tended to be representative of what we might expect during the year and normally cover it. But, again, within the consumer packaging business the plastics businesses are on a quarterly reset, for the most part.

Thank you. Our next question comes from the line of Adam Josephson with KeyBanc.

Good afternoon, Jack, Barry and Roger. I hope you're well. I hope you're enjoying the 70-degree weather there. It's snowing pretty hard here. One more on OCC. Can you, Jack, talk a little more about what you think has been driving this highly unusual surge? And do you have any reason to think it won't continue for the next couple months?

Of course, you know how I feel about my ability to predict the price of for OCC and I proved myself right coming out of the analyst meeting in December. As we look at it, obviously -- not obviously, but China has certainly come back in the market and put some pressure into the market. They are buying pretty strong. We understand their reverses are fairly low and continue to be somewhat low. So, they are in the market. We also see that domestic demand is pretty strong, as well. Now, what's driving the corrugated demand in domestic, there's a lot of different speculation about that. The most realistic thing that I read is the concept of eCommerce is really changing how a product is bought and how it's shipped and certainly helping corrugated. Now, that can't be all of it but certainly I would think it would be some of it. I would tell you that same eCommerce has the effect of putting more OCC into the waste stream versus the recycling stream because many homes don't have a recycling program and they just put that corrugated into the normal waste stream. So, it's a little bit more difficult to collect. Take that, along with the demand and you have this situation where you have demand putting a lot of pressure on supply. Does that continue all year? Right now, I wouldn't think so but I don't know. I think eCommerce was focused around the holidays and the end of the year so I would expect that to fall off which should relieve the pressure on OCC. We're also in a slow collection time in the first quarter in the winter months. That should pick up as we move into the spring which would normally see a drop in OCC during the quarter. That's what I expect now, but we'll see. I'll tell you, if it continues to run we'll be out with a second increase in fairly short order because we have to recover these costs. We have no option.

Thanks very much for that, Jack. You talked about the strong corrugated demand in recent months that's partly or largely eCommerce related. You mentioned in your release that you saw an unusual seasonal slowdown in the quarter among both your consumer and industrial customers. What do you make of that? And what have you seen since then in January? I ask considering you've historically been a pretty good coincident indicator of the economy.

Adam, first of all, I think we need to go back and look at the businesses separately. Industrial was basically flat on a year-over-year basis. We didn't really see a slowdown per se when you take out the days' impact. It really was confined to the consumer business and in display, as well, but it was more defined to cans inside the consumer. And that became somewhat customer-specific. Last year, I recall that we had a very strong quarter in cans. I had the same question and I simply said it's around your customer base and the products you're packaging. And that's exactly the case this year. We had one customer in the midst of a significant consolidation that impacted that customer. We have another customer that took down time to take product out of inventory and that impacted the composite can. As I look at volume for the fourth quarter, basically it was flat. We certainly didn't see the growth but it was more or less flat across the entire business, with protective having a solid improvement. And that may be somewhat correlated to that corrugated number that you're looking at. I'd also say, a lot of the products we package don't get sold through eCommerce so that may be a part of that disconnect, as well.

And just two other ones. You've talked about, I think, your optimal raw material cost environment being slightly inflationary. This, right now, is a little more than slightly. So, can you just remind us what your optimal environment is along those lines and why?

Volatile. Our optimal line is to have it move up and then drop because that allows us to move pricing and then recover. So, it's volatile. It's going up and down according to seasonal flows. Right now, I have no reason to believe that's not what will happen. So, we do expect to recover this with the quarterly reset beginning in April and the price increase we put in place. As I said, if it continues to run which would be unusual, we'll have to go to the market with another increase for paper, as well as tubes and cores.

Thanks, Jack. And just one last one on M&A -- there have been seemingly pretty fully priced deals in packaging in recent days and weeks. You're welcome to disagree with that. If you agree, what gives you confidence that you'll be able to do a deal at what you consider a pretty attractive multiple?

Again, I'm very pleased with the organization and the focus we've had around what markets we're in, what businesses we want to be in. We made the decision to sell blowmolding. The timing is right and it fit the strategy. And the businesses we're looking at are right along the lines of what we continue to talk about. We always have ongoing discussions. I feel good about where we're with that. Will the multiple be stronger than the average 6 to 7 that we saw three or four years ago? Yes. But it's more about what we do with it than what we pay for it. We certainly are looking it that way. We're looking at hot it will fit with the entire business profile and how we can sell across our portfolio because that's what we're trying to connect the dots around.

Thank you. Our next question comes from the line of Brian Maguire with Goldman Sachs.

Good afternoon, Jack, Barry. I think you mentioned the change in the full-year guidance is really driven by the pension. But you also talked about some of the timing lags in passing through the raw materials. Just wondering if there's any offsets you've got baked in there to help you have it really just be a pension-related drop in the guidance.

The adjustment to guidance is just related to the pension, the fact that our year-end estimate for 2017 was updated and it was a couple million dollars higher than what we previously estimated. What we really said is that we weren't changing our full-year guidance because we did expect to be able to move forward from a price-cost perspective and recover any downside to what we were going to be experiencing in the first quarter.

So, does the guidance assume you get most of the $60 announced URB price increase through? And maybe there's a little bit of a lag on it but are you assuming you get most of that price through, then?

It certainly does. It certainly assumes that we recover at least the inflationary costs we're seeing right now. The best year we had in price increase was in 2015, I believe and we expect this one to have that type of yield associated with it.

And the price increase attempt last fall, the trade periodicals published it, it really didn't have much success. Is the thought that this time around it's more raw material driven than supply demand driven and so that's what's going to cause it to have a little bit more success?

Actually, we just thought that everybody was a little bit late to the party, but now it's fairly obvious.

Got it. Just one last one, if I could. Just wondering what you're seeing in the automotive markets within the protective business. There's been some talk about peak SAR and whether that could stay at a high plateau or maybe drift down a little bit in 2017. Just wondering what you're seeing from some of your customers.

Certainly as we project forward into 2017 we did see slowing in our automotive business. It impacted the projection for 2017 in protective solutions, took it down to a little over 2 - 2.2, 2.3. And that was really driven by the slowdown in automotive. The rest of that business is still in the 3.5 to 5% range so we feel very good about that. What I've read about automotive, Brian, is that actually units should stay about flat year over year, but there's a mix shift occurring from automobiles to trucks and other type of SUV vehicles. And we do have more parts in cars than we have in trucks and light vehicles.

Thank you. Our next question comes from the line of Chip Dillon with Vertical Research Partners.

The first question is on composite cans. I know that's been a key focus of growth, especially in emerging markets like Southeast Asia. And I just wanted to know, given some of the currency volatility we've seen in the last several months, how is that business looking. Is it still meeting and do you expect it to continue to meet, your growth targets?

Certainly that business continues to do well. We continue to see growth opportunities throughout Southeast Asia. As a matter of fact, sweetened and condensed milk, we talked about that, that is something we're chasing to have significant opportunities across Southeast Asia. Really, the impact that you're seeing in the composite can was around domestic customers, as well as in Europe around, last year, during the fourth quarter, there was significant demand increase around tobacco canisters because there was a changing of labeling and changing of format. So, there was an inventory build. So, that year-over-year looks a little bit skewed.

Got you. And then, shifting gears, given the pretty obvious tightening in the containerboard markets -- and I know you have a specific maybe not most desired space there in medium -- have you seen any change or know for the better that might take some pressure off of you having to maybe make an okay solution now versus a better solution long term?

We're looking for a better solution now. But I will tell you that what's happening in the corrugated market is having a positive impact on our medium operation.

Okay, got you. And in the sense that maybe your mix is shifting a little bit more domestically?

No, in the sense -- yes that is occurring -- but in the sense that pricing is stronger and volume is maxed.

Okay, got you. And the next question is and I think you've alluded to this, but let's assume OCC stays flat or goes up in March. I would imagine that you would see some significant relief in the second quarter given the timing of many of your contracts.

If pricing begins to fall during the second quarter, we would see significant relief during the quarter. If it stays flat then with the March number it just recovers March, although you would get recovery from the price increase on the non contract volume that maybe a little bit greater than the actual increase in OCC. But that wouldn't be most significant. For us to get that recovery, as I mentioned earlier, there has to be some volatility, it has to start trending down which I would expect in the second quarter because of the increase availability of supply, warmer climate, et cetera.

And the last question is, can you talk a little bit about -- you mentioned the added benefit of either buybacks or acquisitions. I suppose the question is, would you be able to comment, are you expecting to be buying any significant shares in the first quarter, especially since, if you did announce something even today or tomorrow, it probably wouldn't close until the next quarter?

Chip, our focus clearly is on making strategic acquisitions and create long term value for our shareholders. We're very focused on it. As I mentioned, we're always involved in conversations. I feel good about those conversations. So, that's our focus right now is to get a good positive acquisition for the organization.

Thank you. Our next question comes from the line of Debbie Jones with Deutsche Bank.

A couple questions. One, it was just a little unclear to me if the full amount of the price increase for URB is baked into your guidance at this point.

Yes, would be the answer. We're assuming that by the time the year is out we recover the shortfall.

And then the second question, you said there's only really one change to guidance, but the impact of potential share repurchases went from $0.10 to $0.06 to $0.08 and then obviously you're throwing in the M&A option, as well. How should we interpret that? And is it that you're really looking at an acquisition at this point and we're waiting for the back half to see if that actually comes to fruition? Or is it just something else based on the timing of share repurchases?

That was really a loaded question there, Debbie. That really reflects timing and the focus on acquisition. That's really what that change is reflecting.

Okay. And then just last question and it may be a little bit too in the weeds here, but you talked about the run up in OCC. And one of the other things that has been said is that you're seeing less recycling by cities and municipalities just based on the cost of OCC resulting in lower generation. Have you seen any of that? And is there a level where you think that turns and results in more recycling?

Certainly when prices get real low you do see people that fall out of the market. That's not where we're now. I think what I was trying to convey was that because of eCommerce, product is being shipped in corrugated boxes directly to people's home. Not every municipality has curbside recycling. So, instead of putting it in a recycling bin or being collected by the WalMart -- behind the Wal-Mart or the Costco or whatever the case may be -- it's actually going into garbage and winding up in the landfill. So, that diminishes supply.

Thank you. Our next question comes from the line of Mark Wilde with Bank of Montreal.

I wondered, first, if we could just talk a little bit about Mexico and this talk about more trade restrictions. How does that affect your packaging business and potentially your auto business down there?

It certainly has an impact or it has the potential to have an impact, specifically in protective solutions. If you look at our businesses in aggregate, we really don't do a lot of cross-border shipping of our products. But our customers do some cross-border shipping, particularly in automotive, particularly in Mexico. So, if there's some sort of tariff that gets imposed upon automobiles out of Mexico that could have the potential of impacting volume that we would supply to automotive manufactures in Mexico. Not directly associated with our products but more associated with our customers' products as they import product.

Okay. But at this point, Jack, probably fair to say that you're just sitting back waiting to see where all of this shakes out.

Yes. It's hard for us to gauge any potential impact right now because really nothing has been done or resolved.

Okay. And then I'm just curious -- turning to your industrial markets, there are some indicators out there that suggest that industrial activity is picking up. We've got the ISM at the highest level in several quarters. We've been able to see the containerboard and corrugated volumes picking up. Can you talk about what you're seeing in your particular end markets?

I think if you look at our industrial business for the year, it was up slightly. We call it flat but it was up slightly. And I think that you are seeing some strengthening, certainly particularly in Asia, as well as a little bit in South America this time. I do believe that we should see some strengthening in industrial over the course of 2017. I believe the economy is going to be a little bit stronger in that area.

Okay. And, Jack, when you think about that business just in North America, what would be your two or three key end markets? I know textiles have always been big. I think probably carpeting is big. I'm just trying to think about macro drivers like the housing market and other things and how they would roll through to those businesses.

Certainly housing has an impact because of all of the rolled goods that wind up in products that are used in construction in some fashion. But our three big markets are paper, film and textiles. As those are impacted by any kind of pick up in the economy, it will impact tubes and cores.

Okay. And the last question I had, you talked about the growth in the composite can in Southeast Asia and some of the developing markets. But can you also talk about what you think the underlying growth trajectory is in the developed markets like North America and Europe? Several years ago you were talking about a lot of conversion opportunities for composite cans.

Mark, those conversion opportunities, for the most part, now exist in the developing world. I would tell you that domestically or in the developed world there certainly are a few opportunities and we're converting them, but there's also those perennial declines in frozen concentrated orange juice that you've heard us talk about before, powdered beverage. So, we have to offset those. So, in total we expect that to be a flat to a slight drip down market -- the developed world demand offset by growth in the developing world.

Thank you. Our next question comes from the line of Scott Gaffner with Barclays.

Barry, you mentioned earlier the volume that you got in 2016 wasn't quite enough to get to some of your normal productivity targets. Can you talk about what you think you need in a normal environment from a volume perspective to get to your productivity targets? And is there a way to maybe lower the breakeven point for productivity?

Scott, this is Jack. What you're actually saying is that if you have a volume decline on a year-over-year basis, you're going to have to be able to get cost out of the organization faster than that decline. That's usually very difficult to do. When you look at the fourth quarter and how it's set up, Christmas was on, I think a Saturday or a Sunday and it caused that whole next week to be down. So, all those variable costs, we can't get rid of them, they're there -- except for the labor's not there but other costs are continuing. That certainly impacts productivity. All we're saying is we need some sort of stability. It doesn't have to be significant growth. Significant growth makes it immensely easier to drive productivity. But you'd like to see more volume coming through so that you're pulling it over the asset base. Now, the way that we can improve productivity is to create machines that run faster, invest in machines to run faster, so that we can take machines and crews out and run the same volume with less labor and less machinery, if that makes any sense.

It makes sense. Looking at OCC and it got mentioned maybe once before but what should we think about the benefits -- any benefits from higher OCC within the recycling business for you? Or are they negligible? How should we think about that? No, it's definitely benefiting that business. And that's always been a bit of an offset for us. Of course, when it's going down it's a bit of a drag, too, but right now it's simply an offset in that business. Not a complete offset but an offset.

Sure. And, Barry, just one last question on the pension change. Can you give us a little bit more detail? Did the discount rate come back down at the end of the year? What caused that slight change in the pension expense calculation?

Sure, Scott. There were really just a couple things driving it. First of all, we had assumed that assets would be relatively flat through the fourth quarter. And, in fact, when you look at our total portfolio, they were down about 2% in the fourth quarter which was in line with what you'd expect given our allocation to equities and fixed income and the like. And then also just a final estimate of the year-end discount rate, when you actually go through the calculation of looking at the spot rate curve and so forth, it just happened to be a little different than what we otherwise expected. So, that drove it up by $2 million.

Thank you. Our next question comes from the line of Ghansham Panjabi with Robert W. Baird.

Sorry, I hopped on late and I apologize if you covered this, but how much do you think higher raw material costs will impact Q1 versus maybe what your initial view was back in December?

That's really hard to get a handle around because we don't really know what it's going to end up for the next month. We have a directional for the first month. February, we can see. What we see now, Ghansham, is that there's a quoted price out there or a published price and prices are still moving off that published price. So, that's hard for us to say. I think we captured in our guidance that we're trying to give you that range of guidance that probably pushes us more toward the downside. But it is offset by the positive on the recycling. So, it's real hard to put an exact number on that just yet.

Okay. And then in terms of, last quarter you called out temperature-assured packaging, I think you called out the flu season was a little bit later and you hoped to recover that in Q4. Did you touch on that already in terms of whether you actually saw that for protective packaging in Q4?

I didn't but protective packaging had a very solid fourth quarter. Their volume was up about 3.5% and EBIT was up, as well. They had a good quarter and a great year.

Okay. And then just, finally, in terms of your comments on 2017 being a transitional year. First off, give us some more context on that. Why would that necessarily change in 2018 in terms of the consumer demand, for example, that you're seeing this year? Are you referring more so to capital allocation net of what you sold last year? What are you really referring to there?

What I'm really saying is that we've sold blowmolding and now we're starting down the path of making acquisitions in flexibles, thermoforming and protective solutions. That's really all I'm saying.

Thank you. Our next question comes from the line of Phil Ng with Jefferies.

Your outlook on consumer from a volume standpoint is a bit weaker than the last few years. But you do have a decent pipeline of new products. Just curious what your customers are saying from a demand standpoint outlook. Any early read on promotional activity for your display business?

For the most part, you read what I read, you hear what we hear from these major CPGs. They continue to struggle with volumes and they are looking for ideas. They are looking for ways to make their products look different. That's one of the things that behind the TruVue can, the clear can, that can have a positive impact. I saw Campbell's came out with a new soup the other day in a clear container, as well. So, they are looking for things to drive volume growth. For us, we're looking at how do we get to the perimeter of the store. That's part of our strategy going forward.

I know your corrugated medium business is a small part of your business but it was a hit last year from a profitability standpoint. Then now pricing seems to have firmed up and you're running on better footing from a production standpoint. How should we think about the year-over-year delta for 2017 versus 2016, at least based on current prices? Thanks.

I think that in 2016 there was about a $14 million hit. I think we've disclosed that. I think as we looked into 2017, based upon where we were we thought it was about $12 million. If volume held and prices held at current level, that could impact that by as much as half. So that change is significant.

[Operator Instructions]. Our next question comes from the line of George Staphos with Bank of America Merrill Lynch.

My first question, Jack, is, if we take a step back on inflation and your contracts -- and I recognize this is not a likely scenario at all -- but let's assume that OCC and resins stay flat from second quarter and going forward, why would your contracts recover all of that and then some so that your price-cost would be neutral for the year? That's what I interpreted your comments to say. I recognize if costs go down and you raise pricing you'll recover. But assume costs stay flat, would your contracts give you extra so that you end up price-cost neutral by the end of the year?

If I communicated that, George, I was wrong. If prices stayed flat based upon where they were in March, if that's the re-peg, we would only recover for the final three quarters and be behind what we lost during the first quarter, net of the positive that we'd get from the uncontracted increase.

Okay, fair enough. Now, secondly, on pricing, there was a mention of a negotiated price adjustment in consumer. Can you provide a little bit more detail on that, whether it was significant at all?

I'll tell you that there's constant negotiation of price with customers. That was a contract negotiation and contract renewal. In most of those cases there are some price concessions. What we try to do is look for other opportunities across the portfolio to supply product to offset that particular decrease.

But the reason you would have called it out would have been maybe it was a little bit more negative than normal, not trying to over do it and recognizing that you typically have these in every quarter.

Yes. You have large customers and we just felt like it was proper disclosure.

Okay. On OCC, in the past the Company has discussed that, given your valuation, given your antenna in the market, that when it gets to a certain price -- and I want to say the numbers is around 150 -- that winds up being the breakeven, as you've seen it. And so, all of a sudden, when you look at using OCC, it was in recycle relative to virgin, you feel that there tends to be a dissipation of demand for OCC. A, have I remembered that correctly? If not, if you could correct it. And, B, do you think it still holds going forward or is the world different with eCommerce, et cetera?

I think that you do remember correctly. Whether it's 150 or 160, it's somewhere in that range, that if a mill has the capability, they could switch from OCC to pulp and use more of that and keep their costs more or less flat or even. That, in theory, creates a cap on what OCC or the price for OCC might be. Now, one of the things that is changing, George, is more and more of the mills that have been put in as of late, certainly several of the new ones that are opening, are exclusively OCC mills. So, they don't have the ability to go to a pulp.

Okay. Appreciate it. Understood. I'll give you two last ones and I'll turn it over. One, the flexible packaging EBIT improvement of 15% in the year, congratulations to your team on that. What do you think the outlook is for continued margin expansion in flexible overall? And then, more broadly, I don't recall if you mentioned this at the beginning of the call but do you have a rough volume expectation by business that we should be at least building our models around or thinking about as we're building our models for each of your segments? Thanks and good luck in the quarter and year.

Certainly, I think flexibles has had a good year. It's volume driven. So, that's a positive. Are there things that are going to impact margin in flexibles? Absolutely. Rising resin prices -- we've got to go recover that. But we hope to drive additional volume across the business this year, as well. That's been a very good business for us. It's improved over the past five to seven years and it's well inside the range of our average, so we're pleased with that. One of the things, George, I'm not sure you asked this but to put this out there, we're going to have to manage the business differently this year than we did last year. The dynamics are different. We're going to have to be very aggressive with price recovery, for obvious reasons, as it stands now and we've got to drive that productivity. Overall, we're seeing volume growth is somewhere in that 2%, 2.5% range in aggregate. But if you take out the display and packaging which is the most significant one, because of that new pack center, it's down in that 1.5% range which we feel is reasonable. And I would tell you flexibles and plastics are going to be the big part of driving that for the consumer businesses.

Thank you. I'm showing no further questions at this time. I'd like to turn the call back to Mr. Schrum for closing remarks.

Thank you very much, Caylee. Again, I want to thank everybody for joining us during their lunch hour. I know that you probably would rather be doing something else right now. And, as always, if you have any further questions, please don't hesitate to contact us. Thank you again.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect. Everyone have a wonderful day.