Roger Schrum – Vice President, Investor Relations and Corporate Affairs Barry Saunders – Chief Financial Officer and Senior Vice President Jack Sanders – President, Chief Executive Officer and Director.

George Staphos – Bank of America Merrill Lynch Debbie Jones – Deutsche Bank Chip Dillon – Vertical Research Chris Manuel – Wells Fargo Securities Anojja Shah – BMO Capital Markets Scott Gaffner – Barclays Capital Philip Ng – Jefferies Matt – Robert W. Baird Danny Moran – Macquarie Research Adam Josephson – KeyBanc Capital Markets.

Good day, ladies and gentlemen and welcome to the Sonoco’s First Quarter 2016 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, there will be a question-and-answer session. Instructions will follow at that time. [Operator Instructions] As a reminder, today's call is being recorded.

I would now like to turn the conference over to Roger Schrum, Vice President of Investor Relations. Sir, you may begin..

Thanks you Shannon. Good morning and welcome to Sonoco's conference call to discuss our financial results for the first quarter of 2015. This call is being conducted on April 21, 2016. 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 the Investor Relations section of our Web site at www.sonoco.com. In addition, we will reference a presentation on the quarter's results which was also posted on our Investor Relations site this morning.

Before we go further, let me remind you that today's presentation contains as number of forward-looking statements based on current expectations, 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.

Information about factors that could cause different results and information about the use of Non-GAAP financial measures is available in our Annual Report and on the Company’s website at sonoco.com. Now with that, let me turn it over to Barry..

Thank you, Roger. I will begin on Slide 3 where you see that this morning we reported 2016 first quarter earnings per share on a GAAP basis of $0.59 and base earnings of $0.65 which is above the top end of our guidance of $0.57 to $0.62 and compares to base earnings of $0.54 for the same period last year.

The difference between GAAP and base earnings is discussed in our press release, but in summary the difference is due to restructuring charges associated with some plant consolidation opportunities and other organizational changes as part of our fixed cost reduction efforts.

On Slide 4, you find our base income statement where you see sales were $1.226 billion, up $20.2 million from the prior year, and you will see all the moving pieces of the change in the sales bridge in just a moment.

But I will go ahead and mention that this year's accounting calendar included six additional calendar days or three additional billings or business days and such days obviously impacts all the line items on the P&L.

Gross profit was $245.3 million, which was $24.9 million above the same quarter last year with the gross profit margin percent improving to 20%, the strongest in many quarters and compares very favorably to last year's 18.3%.

Selling, general and administrative and other income and expenses items was $133.8 million, which was up $0.7 million higher than last year do most notably to the additional day.

All then resulting in base EBIT of $111.5 million, up $19.1 million from the prior year and you will see all of the drivers of the change in the EBIT bridge in just a moment.

Below EBIT, interest of $13.8 million was essentially unchanged from the prior year as slightly lower averaged debt levels this year were offset by the additional six counting days in the quarter.

Income taxes of $32.2 million were higher than last year due to the higher pre-tax earnings as well as a slightly higher effective tax rate at 33% for the quarter, while we know expect the full year rate to average right at 32%.

Equity and affiliates when combined with minority interest was $1.3 million and similar to last year, thus ending up with base earnings of $66.5 million or $0.65 per share. Turning to the sales bridge on Slide 5, you see the higher volume added $80 million to the top line or right at 6.7% for the Company as a whole.

Although it is difficult to estimate the exact impact of the additional days in this year's calendar, three additional billing days would theoretically add right at 5% to volume.

So, this is a good estimate, underlying organic volume growth would have been right at 1.7%, almost at the run rate of our budgeted improvement of 2% for the year on average.

Volume in the Consumer Packaging segment was up 5% which would essentially equal to the difference in billing days or some modest growth in global composite cans driven by strong international growth and in flexible packaging was largely offset by plastics being down some on a same day basis. Display and Packaging segment volume was up 3.2%.

Paper and Industrial Converted product segment volume was up 7.8% due to the additional days, but also some organic growth in both tubes and cores businesses globally and in Paper North America.

Volume in North America was up just over 1% on a billing day basis as growth in the film and textiles tape and specialty segments were only partially offset by the continued decline in core sold into the paper mill industry. And in Europe we experienced right at 2% volume growth on a same day basis.

And finally Protective Solutions had another solid quarter with volume up 14% or 9% on a same day basis driven most notably by growth in the temperature assure Packaging business. Prices were unfavorable year-over-year by $16 million most notably in the Consumer Packaging segment this quarter driven by lower resin based prices.

Net acquisitions added $4 million to the top-line due to last year's flexible packaging acquisition in Brazil partially offset by the impact of the loss of the metal end sales from the Canton disposition last year. Exchange and other was negative by $48 million due to translation associated with the stronger dollar.

Turning to the EBIT bridge on Slide 6, here you see that the drop through impact of the volume on EBIT was $18 million representing about a 22% contribution margin on the additional volume.

Price cost including the benefit of procurement productivity as well as lower energy and freight cost was once again very favorable by $14 million, most notably in the Consumer segment.

I will mention that a $3.6 million of the year-over-year change is related to favorable variance from a reduction in the LIFO inventory reserve as we had a release of a reserve of $2.5 million this year associated with lower inventory levels and lower material cost while last year, we had a $1.1 million increase in the LIFO reserve.

Acquisitions, net the impact of dispositions added $2 million to EBIT. Manufacturing productivity was positive by $7 million, but continues to run below our targeted level of $10 million to $12 million a quarter.

Manufacturing productivity was really tracking pretty well to target in January and February, but then fell off in March where some of our Consumer business in particular expected some drop-off in the first few weeks of the month and we did have some additional cost related to some plant consolidation activities in several businesses.

Moving on down the page, you see the change in the All Other category on a year-over-year basis has a negative impact of $24 million.

There are lot of moving pieces in this number, but the most significant components included the impact of the six extra accounting days on fixed cost which would account for right at $17 million of the change and then another $11 million is associated with normal non-material inflation.

The translation impact on EBIT from a stronger dollar was negative by $4 million for the quarter and is included in this All Other category. All of this is then partially offset by about $7 million in year-over-year fixed cost reduction.

Since I have just mentioned translation, I will go ahead and mention that translation of earnings in foreign currencies would have been negative by roughly $0.03 per share year-over-year which is then offset slightly by a $0.01 or so of transactional benefit. And finally, as expected, pension costs were lower in the quarter by $2.4 million.

Earning by segment are found on Slide 7 where you see for the Consumer Packaging segment, sales were up 1.4% while EBIT improved by 16% due to very positive price cost as the EBIT margin improved to a strong 11.9% versus 10.4% for the same period last year.

Display and Packaging sales were essentially flat but earnings up notably due primarily to a turnaround in results at the pack center in Mexico resulting in an improvement in the margins for the segment to 2.3%.

Paper and Industrial Converted Product sales were also essentially flat, but EBIT improved almost 20% due to the improved volume positive price cost, manufacturing productivity and lower pension cost with EBIT margin right at 7.9% versus 6.6% for the same period last year.

Protective Solutions had another strong quarter with sales up 11% and EBIT up 24% driven by the volume and favorable price cost, resulting in an EBIT margin of 9.1% versus the 8.2% in 2015. For the Company as a whole you see that EBIT margin was a very solid 9.1%.

Turning to Slide 8, you find our outlook -- where for the second quarter we are projecting that base earnings will be in the range of $0.65 to $0.70 for the quarter.

This assumes no significant change in the overall level of economic activity or demand in our served markets, other than normal seasonality, for example the second quarter is normally the weakest quarter for our Consumer Packaging business.

In terms of material cost, we are expecting and in fact seeing an uptick in resins and are expecting OCC prices based on pricing in the Southeast to grow up by $10 per ton.

We certainly are not expecting the same magnitude of year-over-year change as we saw in the first quarter, as the first quarter of 2015 was somewhat weak in a few of our businesses, but then bounced back in the second quarter.

Clearly this year we got off to a good solid start and maintain that momentum through the quarter other than a few choppy weeks in March.

For the full year, our guidance for base earnings remains unchanged at $2.64 to $2.74 per share even with the earnings guidance being above guidance in the first quarter due to the tough year-over-year comp in the second quarter and continued expected headwinds in our corrugated medium business.

Moving from earnings to cash flow on Slide 9, cash from operations was $66.4 million versus $60.3 million for the same period last year.

We generated higher cash from operations even after considering we had a $15 million higher pension contribution as we made the required 2016 payment to our U.S qualified plan in the first quarter and we had no such required contributions in 2015.

Capital spending was right at $53 million for the quarter in line with our capital budget to spend between $190 million and $200 million this year.

The more notable spending this quarter included $9 million in [indiscernible] generating projects to support growth in global composite and another $3 million each in both our flexibles and plastic businesses for value generating project.

Last year's cash flow was positively impacted by the proceeds we received from the disposition of two metal end plant in Canton, Ohio. So after dividends of $35.4 million we had negative free cash flow for the quarter of $22 million. Our full year target is still to deliver $140 million in free cash flow.

Speaking of dividends, you most likely saw that on Wednesday, our Board of Directors approved an increase of $0.02 per share in the quarterly dividend, raising it by 5.7% to $0.37 per share which annualizes to right at a 3% yield based on our current stock price.

Dividends are an important component of our total return to our shareholders and this extends the history we have of increasing the dividends as earnings grow.

During the quarter we also used $15.3 million to repurchase 354,000 shares of stock and expect to repurchase $85 million worth of stock through the balance of the year to complete the announced repurchase program. On Slide 10, you find our balance sheet for the quarter.

And I won't spend a lot of time reviewing it other just to point out a few things, including that the top of page is the cash going down by $30 million just due to the expected negative free cash flow and share repurchases as we just reviewed.

We saw all the normal increase and trade receivables from year end associated with the pick-up in activity from the normal fall-off in December. The other changes in the accounts are really just due to translation and normal activity.

Other than, I will point out down in the liability section, you see the pension and other post retirement liabilities, but then right up by $20 million due primarily to the previously mentioned pension contribution.

And finally at the bottom of the page, you see net debt to total capital remain unchanged 38.2% represent a very solid balance sheet from which we can continue to grow our business organically as well for us through acquisitions. That completes my review for the quarter and I'll now turn it over to Jack for some additional comments..

Thanks Barry. Let me add some additional color to the quarter, then provide an update on some of our growth initiatives and finally speak briefly about what you see going into the second quarter. For the first time in several years, we were able to get out of the gate fairly cleanly without weather or other one-time operating issues impacting results.

In addition demand was very strong for most of the first two months of the year in most of our businesses, while March slowed due to the Easter holiday or related customer downtime. Overall, we achieved record quarterly base earnings and all of our business segments had solid year-over-year improvement.

Additionally we achieved a 9.1% base earnings margins of 140 basis points from last year. Our target for those segments Consumer Packaging and Protective Solutions again achieved record quarterly base earnings with Consumer Packaging running it strength to six consecutive quarters, while Protective Solutions had the seventh consecutive quarter.

Consumer Packaging operation margins moved up 150 basis points to 11.9% is our global composite can and flexible packaging business reported improved results in the quarter. And while our plastics business actually exceeded our expectations, results were down slightly from last year when we benefited from falling resin costs.

Display and Packaging had a significant improvement in operating profit in the quarter, as we have taken steps to reduce losses associated with our [indiscernible] operations. As previously mentioned, we've begun the process of transitioning this facility to our customers.

Protective Solutions first quarter saw operating income improved 24% with volume up double digits and operating margins up 90 basis points, 9.1%. We're continuing to experience rapid growth in our temperature assured packaging and components businesses and both are near capacity.

Finally, I'm extremely pleased by the solid turnaround in our Paper and Industrial Converted Product segment as operating profit increased nearly 20% with operating margins improving 170 basis points. [indiscernible] in North America and in Europe and our global URB mills performed well in the first quarter.

Unfortunately, we continue to struggle with difficult market conditions impacting our corrugating medium operations. Year-over-year, this impact EBIT by about $4 million and these headwinds will accelerate into the second quarter, then the comps taper off fairly quickly in the second half of the year.

That said, we are aggressively addressing cost, actively seeking a partner as well as looking for other options for this machine. Yesterday our Annual Shareholders meeting, I gave a brief update on our global growth initiatives. Let me expand on our efforts.

First in Consumer Packaging, we announced, we'll again be adding more capacity to our new composite can plan in Kutno Poland. We'll add a third line to this facility this year and expect to add a fourth by mid-2017. In addition, the ramp up of our Kuala Lumpur plant in Malaysia continues to go well and we showed a small profit despite start-up costs.

In Flexible packaging, we've completed the installation our triplex laminator in our Morristown, Tennessee plant and we've just started pulling film through the machine. The new rotogravure press for our Waco, Texas facility is on schedule and will start trials in July.

In rigid plastics, we've added new portion control and new food tray capacity in our thermoforming operations to meet new customer demand. And we've added capacity through our Beauty Park Ohio, blow molding facility to support new volume.

Yesterday I told shareholders we were working with McCall Farms, a leading South Carolina based food canner to introduce some of its Glory brand vegetables in our TruVue can. We've completed a successful commercial run at McCall canning facility and expect to launch product in Southeast grocery stores this summer.

Let me close by addressing what we see heading into the second quarter. As mentioned, some of our businesses experienced a bit of a slowdown in March, but demand appears to have bounced back and is at expected levels including the normal seasonality of our businesses.

Let me point out that we faced a tough comp in the second quarter as last year's results were extremely strong. Furthermore, as mentioned, we faced headwinds in corrugated medium and the strong dollar will continue to impact exports. Yet we remain on track to meet or exceed our 2016 guidance.

In closing, remain firmly committed to our growing optimized strategy, and as such we are focused on volume growth, improving operating margins, working to shift our business mix to more of a Consumer and Protective Packaging orientation, maximizing free cash flow and finally returning cash to shareholders through dividends and share repurchases during the course of 2016.

Operator, we'll now take your questions..

Our first question comes from George Staphos with Bank of America Merrill Lynch. You may begin..

Thanks for all the details. Congratulations on the start of the year. I guess Jack, first question I had, not to get too into the weeds, but the variance that you are attributing to the No 10 machine in Hartsville seems awfully large given the size of the machine.

Can you talk to what is price versus non-price? And then more broadly as we look at 2Q versus 2Q last year, is it possible to parse what the headwinds are? You already gave us the corrugated piece, but you know the tough comparisons, any resin benefit, what that means in terms of the comps 2Q versus 2Q? Thanks, I'll have one more question, and I'll turn it over..

Okay George. First let me apologize, we were having some trouble hearing you here. But I think I got the gist of it. Let me start out, and then if I don't answer, we'll just have a follow-up. You know as we look at the second quarter, we're coming off what I consider to be a very good first quarter.

We had solid volume, fixed cross productivity was good, manufacturing productivity was good acceptable, price cost was positive, the business was very well run for the quarter and very pleased with it. As you move into the second quarter, I'm expecting the same type of performance with three -- let me call them headwinds.

The first was to a question you asked, the quarter-over-quarter performance in 2015, our Consumer volume was up 3.5% versus 2014, that's extremely strong and was kind of out of proportion so much so that it made the second quarter our best quarter of 2015 and normally that's the third quarter.

So, that's a very tough comp on the Consumer side that we are dealing with.

In addition, in 2015, raw materials were continuing to drift down in the second quarter, where this year we're seeing an opposite of that, we expect raw materials and our planning, and have experienced raw material escalation in resin during the second quarter which means we won't be able to pass along till the third quarter, as well as OCC moving up anywhere between $10 to $15 a ton during that quarter that again we won't be able to pass on to Q3.

The final piece of that is Number 10, and another impact in the Q2 of 2015 was our Paper operations had their best quarter in quite some time and ran extremely well including Number 10. It was its best quarter of 2015.

So when you look at Number 10 on a year-over-year basis, the impact of both price and volume because we are slowing back the machine and running at a slower mode to kind of match demand with production. Those are having an impact of $0.04 on a year-over-year basis.

So, if you aggregate all that and look at our forward projection for Q2, if we come in at $0.68 to $0.70, plus overcome these headwinds, it's a very strong quarter on part with Q1. That would leave us some $0.11 to $0.13 at the midpoint of the year on what we're projecting to be a $0.20 improvement year-over-year. So, hope I answered your question.

But those are what we're looking at quarter-over-quarter..

Jack, that was very helpful.

Can you hear me better now?.

Yes..

Okay. I'm not sure what the problem was, but two more questions and I'll it over. One related to what you just said.

Is it possible to quantify what the unpass-through raw material hit in 2Q will be? Then, totally different question, more for -- on the cash flow statement, there was a $45 million benefit in other in cash from operations, Barry, what was that? Can you remind us? Thanks you..

While he looks for that, let me… As far as the resin impact, and again what we've already seen and what is announced, it could be anywhere between $2 million and $5 million based upon what actually sticks. I don't know what's going to stick, but that's what we're looking at right now..

George, I will come back to you on cash flow in just a minute..

Okay. Thank you. I'll turn it over..

Our next question is from Debbie Jones with Deutsche Bank. You may begin..

I'm hoping, you could talk about the full year guidance, obviously Q1 was a little better than we were expecting. In currency, regarding your initial guide, is the reason for not taking it up a bit, just related to the input cost pressure that maybe you think you will see short-term with the containerboard business.

Can you just broadly talk about that?.

Debbie, again part of it's the Q2 we'll have a look, but as I said, if we're $0.11 to $0.13 at midyear, we're well on path to achieve that $0.20, if not do better. It's really around the clarity of the crystal ball.

There is a lot of moving pieces going on right now, the global economy, what's actually going on inside volumes and other things and just being only three months into the 12-month year, I just can't see that clearly.

We feel real good about being within that guidance or even maybe to the top-end of the guidance, but to kind of move it just now this early, I just don't have that clear of a window..

And Jack, I was actually going to ask about your crystal ball, because I think sometimes you have a pretty good insight into variances between Industrial and Consumer markets, and even commentary back in Q3, and I was wondering, if you can give us a sense of what you are seeing overall in the market, not necessarily for Just Sunoco, but I just think about things in running your businesses as a result?.

Well that's better. We have a pretty bad echo, can you hear that. I think it's gone. As far as the Industrial business, clearly see there is a divergence on the Industrial side of our business. If you are mining, that's obviously not a good space to be.

If you are in commodities, that's not a good space to be, but if you flip over and look at construction or home construction, you know it's a matter of getting enough labors to build enough houses. So that's going very well. That's having a positive impact on our business.

I think general manufacturing activity outside of mining and materials is doing okay, and we're seeing it come through on a per billing day basis. Volume in North America was up about 1%, that's what we thought it would be up by going into the year, so we feel pretty good about it as we look forward. We continue to see that.

Europe was up as well, so non-lining Industrial looks okay..

And on last question on the containerboard asset, do you think you could have a resolution to that by the end of the year?.

I certainly hope so.

I think we've made some strong moves by changing the shift schedule talking some time out of the schedule to reduce cost, but we're definitely going to have to see some rebound in the global market for corrugated from both a price and demand perspective in order to have significant improvement in that particular machine, or we'll find a partner to work with..

Thanks. I'll turn it over..

I do want to remind you Debbie that the impact on a year-over-year basis drops off in third quarter dramatically, and forth, so that will improve as the year goes on from a year-over-year comparison..

I think you gave -- you have showed that, but I guess I was kind of getting at, do you think you could potentially find a partner? Will you keep kind of running as a standalone, and that's kind of turn would it get out there?.

No, well, I'd tell you, we're turning over every rock we've analyzed everything from shut down to partner to switching it through a different type of paper production. Right now we think we've settled on the best alternative, but we continue to look at options and we will continue to look at options. Barry, you want to answer that first..

Yes. I will come back to George's question on cash flow. Obviously the other operating activities, catch all for everything else that's not specifically mentioned.

But the most notable difference is year-over-year with the lower cash tax payments, we had a refund in the first quarter this year of 2015 taxes, and then we also saw an improvement year-over-year in some of our just miscellaneous accounts, nothing outside of that, that's really otherwise big, very significant..

Our next question is from Chip Dillon with Vertical Research. You may begin..

Good morning Jack and Barry. My first question has to do with -- it's kind of broadly, but as you look at the emerging economies, I know you mentioned on the January call housing like things were getting a little bit better actually across all the Europe market.

And of course looking at the stock range back in January, no one would believe that, but it seems to have been the case.

How are things looking now specifically in the emerging economies, and for example when you look at Asia where you've done some big expansions on the composite can arena, and are still doing that, are the numbers coming through as you've expected them to, or are they accelerating or decelerating?.

Yeah, let me answer that. I think when you look at Europe, we certainly seen some positive numbers coming out of what we call the frontier or the emerging markets of Europe. So that is accelerating, that looks fairly positive. Mexico and North and South America is absolutely booming.

Our volume in those areas are double digits, on the Industrial side, the business is solid and it's a very good market. Asia, kind of in a state of I don't know neutral I guess, I'd say, it's not really going one way or the other and Brazil continues to struggle. Now that's on the Industrial side.

I think when you look at composite cans in Asia, that's up very strongly. Of course we've made a significant investment to produce cans and that continues to grow. So that's very strong up in Asia for consumer..

Okay. Got it.

Then, I've heard that privately-held player in the uncoated recycle board arena maybe switching some of their capacity and excluded or at least being able to swing it, has that had any impact on you at all or do you expect it to, one way or the other as we talk to customers?.

Chip, I heard that too. Who do you think that is? I'm just kidding. We've heard that same thing and really what we understand and I have seen this before is that, it is a machine that could swing back and forth between coated and uncoated. So you can turn off the coater and then just run uncoated or definitely you can put it into coated.

That's our understanding. I don't know if it's accurate, but that's our understanding. So, we've not seen that impact yet. But the market for URB remains fairly imbalanced, and I think that, that machine might move in and out of the market based upon balance.

So, I don't think it's going to have a strong impact, because it will help keep the market in balance, my guess would be..

Okay. Then the last question is, I think you mentioned that your best guess based on sort of -- if some of these announced resin moves occur, it could be a $3 million to $5 million impact.

Is that for the whole company, and is that an annualized number, or is it for like part of the year?.

That will totally impact second quarter for across the businesses that are resin-based..

Okay. Thank you..

Because again in Q3, we would pass, build that on, if it sticks, I'd be pressing for an open market price increase for non-contracted..

I see. Okay. Thank you..

Our next question is from Chris Manuel with Wells Fargo Securities. You may begin..

Good morning gentlemen and congratulations on a strong quarter here..

Thank you..

I wanted to first ask a couple of questions around the, kind of where we are with the new product, how you are seeing activity through the new centered on Hartsville etcetera, specifically how those are kind of flowing through in some of your Consumer new business wins that you said today?.

Chris, it's been extremely busy. We continue to have a steady stream of customers visiting and engaging with us in projects. We've got new products coming -- new products, let me just call it new revenue coming up for bar type wraps and flexibles' got a new package coming out for coffee in both plastic, rigid plastic as well as flexibles.

We have opportunities coming through PET 3. Of course we've talked a bit about the plastic can that should be mid-summer. I also have a new composite can pack that's coming out from a major U.S. food companies, so very pleased with the level of activity and what's coming through..

Okay. That's helpful. You touched on composite cans for a second. I missed earlier what you said volumes were. I was anticipating, they were actually in the upper tone. I think you thought a few lines coming on stream over in Asia and a couple in Europe as well.

Where were those?.

Well Global obviously was up about 1.4%, netted down for days. So, that's actually volume being up. And it was driven by Europe and by Asia..

Okay, domestically were things pretty steady or how?.

Domestically it was down a little bit as we saw continued erosion from powder beverages as well as frozen, concentrated orange juice I believe..

Last question I have is, as you mentioned, you think OCC might, resin moved higher with mix and chunks as the year goes on, where do you -- and of those elements, you raised that you are being price increase through the last six months.

Where do you stand today and continue discussion with some of your customers to push more of that down to core customers with contracts either longer term contracts moving away from or moving to board away from OCC or was the non-contract customer?.

Well as a reminder, we did have a price increase that went into December and it's more or less globally around paper and tubes and cores. We've gotten very good traction on the best yields we've gotten in recent years, and that's part of that price cost variance you see in Q1. That should continue negated by whatever increase in OCC there might be.

And I will tell you, as I have talked externally is that we've been working on making sure that when contracts come up for renewal that we really need for long contracts to have better price recovery than just OCC. And to-date we've been pretty successful doing that. I'm pleased with that. It's a fair move for us to improve the margins and contracts.

They needed to be improved, because they have gotten really just too low and we're making progress there. So, I am pleased with that. And we continue to work on indices type movement versus OCC. That's an ongoing contract by contract negotiation. But I believe that is our process..

Would you estimate you are maybe at a third or so of those contracts today?.

I'd be guessing if I told you anything..

Our next question is from Anojja Shah with BMO Capital Markets. You may begin..

Can you give the tube and core volumes by region?.

As we said, tube and core volume, the U.S. and Canada was up about slightly, just right at about 1% on a billing day basis. We actually saw right about 2% in Europe, saw nice growth in tube and core in Latin America, double digit, nice growth there. We did see some decline in Asia, but it was very modest on a same day basis..

And decline in Brazil..

And certainly decline in Brazil..

Then at the 2014 Analyst Day, I believe you guys have talked about a portfolio review that was going on. Can you give and update on that. And that's it from me. Thank you..

Yes. I can tell you that we are working diligently to achieve that movement as I mentioned earlier to become more of a Consumer and more of a Protective Solutions business. And all I can tell you is that there is lot of work going on and looking at lot of different types of opportunities..

Okay great. Thank you..

Our next question is from Scott Gaffner with Barclays Capital. You may begin..

Thanks good morning..

Good morning Scott..

Jack when you initiated the share buyback earlier in the year, you know stock was at a 52 week low. Today, we're pretty close to 52 week high. You talked about fair amount of it left. I think you said $85 million of the share buyback left.

How should we think about the cadence of the buyback and maybe the commitment to it, because there might be other better returning projects, we'd put that capital to use at this point?.

Scott, again we instituted that share buyback not because the share price was at a low point, but because we wanted to take few years of dilution basically out of the market. We remain committed to that. We believe that dollar cross averaging is the way to do that.

We just got into a 105b issue in the first quarter that took us out of the market, so our goal now is to dollar cost average across the rest of the year and remove the shares.

Now, you know, if we get the real valuation that the company really should be priced at, who knows maybe we'll stop, but right now our commitment is to move forward and continue the process..

You mentioned you had some customer downtime in March.

Maybe some of that was around the Easter holiday, but was there anything unusual in the customer downtime in March this year versus maybe prior years?.

First of all on the plastic side of our business we had a customer related issue and we had our own issue that impacted that business. So, you know those were just some one-time event.

I think from a customer perspective, Easter being the last week of March kind of led into some extended downtime because of just the way that fell, but nothing of real significance. It was just around the holiday..

And just around that, the acquisition pipeline or what does that look like today, is that -- I think you mentioned maybe yesterday in your slide presentation a couple of the areas you wanted to expand on those.

Will you be thinking about those things coming to fruition soon, or is it -- what does the pipeline look like?.

Well, I would tell you that we have numerous projects and evaluating them all. We are focused on flexibles, focused on thermoforming, focused on Protective Solutions. We have projects in all three. And I am hopeful that yes, the start coming sooner rather than later.

But I know you are aware that it takes two to tango, so you have to have a willing buyer, seller and we are trying to further it out and it has to be at the right price, so all those things are going to work..

Fair enough. One last one for Barry. Barry, you mentioned the six extra days and you said something about three billing days. I just didn't understand the difference between the two.

Were you trying to say that of the six extra days only three were billing days or -- can you walk through that again real quick?.

That's exactly right Scott. We actually had six additional counting days in the quarter just because of bringing one week back to the first quarter because of our 5-4-4 schedule. So when you look at the way weekends and holidays fell, we actually only had three additional billing days year-over-year.

And many of our businesses, that could be more related to the business or working days as opposed to the calendar days. So that's the reason we made that distinction between the two. So we felt like billing days influenced volume more, but certainly our fixed costs are spread over our counting days..

And when you net those two together, the actual impact you know kind of becomes less than you would think, when you first hear six additional billing days, because the volume is over 3 calendar days. That's right the volume is over three billing days and the fixed cost is spreading to six additional days of fixed cost.

So more or less comes to netting each other at the EBIT line. Not exactly, but directionally. You will see that in the numbers. And then of course in the fourth quarter we will lose five days because of the calendar impact.

Our next question is from Philip Ng with Jefferies. You may begin..

Jack as you pointed out that as you improve your contracts terms for your tubes and core business and push price a little more aggressively.

Can you kind of help us you know get a better feel for what kind of margin profile are you targeting next few years, a 10% threshold a realistic target?.

Well, I think that what we have said is that's certainly a goal of ours in order to get to that level, we're going to have to have some price recovery on major contracts. We need to cover some of the cost and prep into the system. But we're also going to have a couple of years of volume growth.

So, I think margin was almost -- for the quarter it was 7.9%. So you saw 1% improvement. I think that last year or 2014 has actually got up to 9%, if I remember right. So, I think it will move you know toward 9%, but to get it to that 10% level, we're just to have to see some continued volume growth, better utilization of the assets..

Then you commented about, OCC, you are expecting it to be up $10 to $15 a ton in the Southeast.

Is that mostly seasonal, or are you seeing more pull through from the Chinese, and what's your outlook for the full year?.

It is seasonal. This is a normal seasonal uptick time and we are seeing strength in export pricing, so both of those are playing an impact.

Was there a second part to that?.

Yeah, outlook for the full year for OCC price?.

Well, we've projected what we would call a normal pattern up second quarter, up third quarter down fourth quarter. I suspect that its' going to be somewhere in that range right now. I think we projected about a $10 or $15 movement. So, it may actually be a $20 movement total. So that's how it plays out.

But we'll just have to see based upon domestic volume will really drive that I think more than anything else..

Okay. It sounds like little more momentum than you probably initially expected coming in to start the year. Then on Protective, volumes were actually very strong.

Can you provide some color on the strength and is that sustainable going forward?.

Protective was extremely strong. It was about 9% net. Not the billing day, but it's up 14% with the extra billing day, 9% net. So very strong volume, it was in the thermosafe business as well as the component business for automotive and again the business is being run very well, outputs good.

So that business continues to grow, and I suspect its' going to be up again in the second quarter 5% or so. .

Okay. That's very helpful..

[Operator Instructions] Our next question comes from Ghansham Panjabi with Robert W. Baird. You may begin..

Hi, this is actually Matt sitting in for Ghansham.

How are you guys doing today?.

Great.

Matt, how are you?.

Thanks for the color earlier on the raw material outlook for 2Q, but I want to ask what are your pricing expectations across your various businesses for the remainder of the year given the positive price cost that you've seen during the first quarter?.

Well, we have a vast majority of Consumer on contracts so that it will change at, let just call it a quarter, and that's basically the way it works. About half on our Industrial side is at quarter end. We've already pushed through a price increase on the Industrial side, more less globally at least U.S. and Europe in that December timeframe.

I think if it moderates here at this $10, $15 area, we covered that or we've covered that or if it continues to escalate, we'll move to have an open market price increase in paper and tubes and cores. But the contract resins and those types of things will take care of themselves at quarter end..

Then can you provide some additional details on what drove the performance improvement in Paper and Industrial.

And then can you provide an outlook for the full year 2016 for that segment?.

Well, I think that what really was the business ran very well, the mill systems ran well, this is all net of Number 10, so the mill systems ran well. Actually I think tube and core could have done a little bit better. We're doing some consolidation work in certain part of the country that had a little bit of drag on productivity.

So productivity would have been every better. So the business is running well, the price increase went through. So, it's just -- it's just operations. Operationally, it's performing better. As far as Industrial this year, we did project a solid improvement in Industrial.

We said volume would be up about 1% and that's right now that's what we see and we continue to believe that's what we should experience for the year.

Net of the impact of Number 10, we're dealing with it, but as I said the year-over-year impact of number 10 will diminish as we go into third and four quarter and hopefully we can come to some sort of resolution of that machine. It's solves the problem. Certainly, we'll be working on it..

Then one last question from me, what actions have you guys taken to adapt the change in Consumer preferences that tend to favor, fresh healthy natural food options within your Consumer business versus kind of the traditional packaged food profile of food and beverage products?.

Matt, that' a great question and we -- that's a lot of these engagements that we're working on now or around representing my product and more of a fresh and natural manner, one of the big issues is clarity is to be able to see the product, the genesis of the plastic can, I can see the product in the can of that, but a lot of our flexible packaging work is putting windows to show that the product can be seen as it sits in the package.

One our coffee products is opaque so that you can actually see the bean or the coffee in the package. So, that's really a lot of what we're working with inside the IPS studio is helping customers present their product in a more fresh and natural package..

Our next question comes from Danny Moran with Macquarie. You may begin..

Congrats on a strong quarter. Sorry if I missed this before, I hopped on a little late.

But can you just give us a sense on what you are hearing from customers regarding the outlook for '16 in both Consumer and Industrial markets? And then any view on volumes as we sit here in late April?.

Well, you know I think as we entered the year, we expected volumes to be up around 2% and right now I don't see anything. Is it going to be 1.7% or 2%, it will be in that range. I think that's what we're going to see for the year.

I think Industrial, certainly on a year-over-year basis is going to look a little stronger because of last year being weaker and it's bounced back stronger this year. But I think we're continuing to do well in consumer. Again up somewhere around 2%, 1.5% to 2%volume on consumer.

Protective, probably a solid 5% on a year-over-year basis, so between 1% Industrial, 2% in Consumer, 5% in Protective, I think we're going to be in that range right there..

Then you mentioned that productivity came in below your expectations. I think you also called out on the Consumer side.

Do you think productivity can move closer to your target going forward, and what's really the driver here?.

Well, I think we want to be very specific there. When you look at total productivity, it was very strong. We had solid mixed cross productivity, solid price procurement productivity from our procurement group. Manufacturing productivity was around $7 million. We expect it to be around $10 million.

But I will tell you after February, it was going to be at the high end of that 12% range, because the 11%, 12%, February we saw a sharp drop in volume -- excuse me -- in March we saw a strong drop in volume in the first two weeks, kind of bounce back in the second and that impacted the productivity number.

That alone with some consolidation activities we're doing in the southeast on the tube and core business. So, I expect going forward, given the volume we should have productivity into that range of 10% to 12%..

Then last question from me, how would you characterize customer inventories levels right now? Are they fairly normal?.

For what window I have, I would have to say they are fairly normal..

Good luck on the rest of the year..

Thank you..

Our next question is from Adam Josephson with KeyBanc Capital Markets. You may begin..

Good morning Jack, Barry and Roger. I joined a bit late, so please forgive me if I asked anything that you've addressed. Just one, back you URB for a second Jack, you talked about the market being I think you said fairly imbalanced despite the apparent M&A capacity [indiscernible] talking about.

Why might it be, if it's oversupplied at all, why it might be that -- one might be the case particularly given that you obviously were able to implement the price increase on your in tubes and cores that recently at the end of last year?.

Well, I think that URB, there is several players in URB that aren't integrated and they sell into the marketplace. So, you know it's a possibility that if they started running and selling more product into tubes and cores, it could impact that. But I think the market is fairly imbalanced Adam in general.

And that demand picks up, what I was really suggesting was the demand on the tube an core side picks up, you could actually see a very tight squeeze on URB and you have someone like that coated mills and just swing into URB, because pricing maybe advantageous to do it. That was just what I was suggesting..

On resin, I know you have been asked a couple questions on resin.

But specifically, what are your polyethylene expectations for April, May, and beyond that informs whatever view you gave as to what your resin drag would be later in the year?.

I think that what we see is of course and I'm going to talk in aggregate. So….

Yes..

About a $0.04 increase and then the like the possibility of another $0.04 increase sometime in the quarter. Does that stick, I don't know. Does the first one stick, I don't know. I know oil is up from the low $29. So, it's possibly there. I think polypropylenes is in pretty short supply, so that's a possibility there.

So, it's $0.04 and then another $0.04 is the possibility..

No, I got it.

And just along those lines, do you have any strong view as to what will happen once all this ethylene capacity in North America comes on I guess starting next year and going into 2018?.

I don't really have strong views on it. My estimate of course and my guess would be that the prices would fall. So we'll see..

Just two others, Jack. I know you have been asked about demand on a few occasions.

Did demand patterns change much as the quarter progressed in any particular region, as well as in April thus far? Looking at the manufacturing and industrial data, at least domestically, it has been kind of all over the map so far this year, so just wondering if anything is notably changed for the better or worse year-to-date for you?.

Well, I don't know if you heard this, but the way the quarter unfolded, we had very strong volume in January and February, and then we had a sharp decline in the first couple of weeks of March, bounce back as March, as we went through March. And now it's kind of more back at our expected run rate, our expect levels.

Again I can't quantify what caused that, that’s like I speculated that the -- how they may have impacted, but I don't have any reason to believe it..

And just -- thanks, Jack, and just one last one on M&A multiples.

How would you characterize them these days, and how is that informing your strategy at the moment?.

Well, I mean I guess the multiples continue to be pretty high across the board, but the way are approaching it, trying to seek our certain types of opportunities with certain capabilities, many of them privately held, we're trying to look at different types of structures that allow us to take a -- in some cases joint ventures, we have the Graffo acquisition in Brazil.

We took a majority of the stake. It got us into the business at a reasonable multiple and allows us to grow. So we're looking at all those types of opportunities. Multiples continue to be fairly high, but we're trying to approach this a bit differently, drive the conversation and then hopefully come out with a reasonable multiple.

It allows us to take a real good position, create a good situation for us and the seller..

Thanks a lot, Jack. Appreciate it..

Our next question is from George Staphos with Bank of America Merrill Lynch. You may begin..

I know it is getting late, so I will try to ask these in one shot, just for time sake. I guess first questions are around end-market demand. On the one hand, I think you said that auto was doing relatively well relative to your Protective business.

Can you give a bit more color there? And then related to the Consumer drop-off in volume, is there any way to call out which were the end markets that were a little bit weaker for a portion of March? So that is question number one.

Question number two, one of your competitors, as Chip was mentioning, is thinking about swinging URB at Sweetwater to CRB. I would not suppose you could do that with your cylinder board capacity the other direction.

But would that be something that you could contemplate? Or is that board not really good for folding carton grades? And then the last question, you'd mentioned price cost benefits in Display. Could you talk to what you were able to do there, other than the obvious, I guess? Thank you, and good luck in the quarter..

George let me try to answer all these. You may have to come back.

End market demand in auto was really kind of built around, certainly the models we supply, but we continue to get new business coming online, so we are supply more parts into the auto industry, new parts and that's really kind of what was occurring inside the business in Protective Solutions.

I'm going to skip over the Consumer drop off end markets, I'm going to let Barry -- I'm not sure at when does it add. URB, that machine that we actually do that technically we could probably do it, but our system in URB is pretty much imbalanced. We really -- I'm not sure we would want to do that, but technically we could.

We cannot do that with the Number 10 machine without making substantial investment to change the profile of that machine. And the price cost benefit is Display and Packaging was on services provided as well as an uptick in Displays. I'm surprised that price cost around corrugated Displays with jobs that are already been done.

And so did you have something on that?.

Barry, just quickly, the Consumer markets that dropped off in March, can you call them out? Recognizing they've gotten back to normal. Thank you and good luck in the quarter..

The thing to be a little bit more broad, broad based and marginally related to the holiday pattern and then just from customer specific issues that different, different would make, nothing broad based. .

Thank you. I'm showing no further questions at this time. I'd now like to turn the call back over to Rogers Schrum for closing remark..

Thank you again Shannon. Just in closing, let me again thank you for joining us today. We certainly appreciate your interest in the company, and as always if you have any further questions, please don't hesitate to contact us. Thank you..

Ladies and gentlemen this concludes today's conference. Thank you for your participation and have a wonderful day..