Good morning. My name is Stephanie, and I will be your conference operator today. At this time, I would like to welcome everyone to the Graphic Packaging Fourth Quarter and Full Year 2014 Earnings Conference Call. [Operator Instructions] Thank you. Brad Ankerholz, Treasurer, you may begin your conference.

Thanks, Stephanie, and welcome, everybody, to the Graphic Packaging Holding Company's Fourth Quarter and Full Year 2014 Earnings Call. Commenting on results this morning will be David Scheible, the company's Chairman, President and CEO; Mike Doss, the Chief Operating Officer; and Steve Scherger, the Senior Vice President and CFO. To help you follow along with today's call, we have provided a slide presentation, which you can access by clicking on the Webcasts and Presentations link on the Investors section of our website, which is graphicpkg.com. I would like to remind everyone that statements of our expectations, plans, estimates and beliefs regarding future performance and events constitute forward-looking statements. Such statements are based on currently available information and are subject to various risks and uncertainties that could cause actual results to differ materially from the company's present expectations. Information regarding these risks and uncertainties is contained in the company's periodic filings with the Securities and Exchange Commission. Undue reliance should not be placed on forward-looking statements as such statements speak only as of the date on which they're made, and the company undertakes no obligation to update such statements. David, I'll turn it over to you.

Thanks, Brad. Good morning, everyone. We had the best fourth quarter in the company's history. Sales in our ongoing core business increased roughly 5.5% driven by acquisitions and modest share gains in our markets around the world. Adjusted EBITDA and margin were record fourth quarter numbers for Graphic Packaging. Adjusted EBITDA year-over-year increased 8.5% to $172 million, and adjusted EBITDA margins increased 250 basis points to 17.2%. Adjusted earnings per share increased 24% to $0.21 versus the prior year quarter. Our full year results were also solid as we improved all of our key operating metrics. Despite the severe weather that disrupted operations in the first quarter of last year, sales on our ongoing business increased by almost 4%. Adjusted EBITDA increased 6% and margins increased 180 basis points to 16.8% in 2014. Full year adjusted EBITDA margins were also full year records for Graphic Packaging. We generated over $350 million of free cash flow in 2014, which allowed us to execute our growth strategy by making strategic investments within the business and acquisitions to drive sales and earnings as well as continue to reduce our debt. We ended the year at a net debt leverage ratio of just about 2.66x, achieving our targeted range. The balance sheet and financial flexibility has never been stronger, so we have the wherewithal to invest in the business long-term and to return money to shareholders. It's this financial strength and confidence in growth and cash generation of the business that led our Board of Directors to initiate a capital allocation plan, which includes both a $0.05-per-share quarterly dividend and a $250 million share repurchase program. Steve will go into more detail about this capital allocation plan, but we're very pleased to have announced this in conjunction with our strong quarterly and full year…

Thanks, David. Volumes in our global paperboard packaging business were up slightly in the fourth quarter. The increase was driven by our European expansion, which was partially offset by modest declines in our U.S. business. As David indicated, the integration of Europe is progressing well and we've had a number of key wins in this market. Last quarter, we told you about the first major SUS conversion contract with a big U.K.-based food group in the frozen pizza category. We also told you there were tremendous conversion opportunities across Europe, particularly in SUS, which offers superior characteristics in the areas of strength, printability and free stock compared to competing substrates available in Europe. In the fourth quarter, we finalized the supply agreement to provide SUS packaging to a U.K.-based breakfast cereal manufacturer in the quantity north of 10,000 tons annually. It's clear that our European strategy is gaining traction, and these wins further support the internalization of our paperboard mill tons. We have also seen positive trends in the beer business in Europe and emerging markets, where the movement towards premiumization is leading to strong demand for our packaging machines and cartons. Demand across our -- the U.S. consumer products and beverage folding carton markets remain mixed in the fourth quarter, but consistent with trends throughout the year. ACNielsen reported low to mid-single-digit declines in the U.S. cereal, dry foods and frozen pizza categories in the fourth quarter. Frozen pizza continues to be the most volatile of all 3, declining over 5% in the fourth quarter after being down just 1% in the third quarter. Our volumes across the food and consumer products markets only declined modestly. We outperformed in both frozen pizza and dry food markets, while our share remained flat in cereal. New product and channel sales are…

Thanks, Mike, and good morning. It is a pleasure to be speaking with you this morning, and I look forward to building relationships with the investment community. Let me begin by thanking Dan Blount for his many years of leadership as our CFO and for his personal guidance and counsel over the past 4 months, focused on ensuring a smooth transition. As Mike and David have shared, both Q4 and full year results showed strong improvement versus prior year. 2014 results established new records for the business along several key metrics, and we're well positioned to improve performance again in 2015. Consistent with past practices, when I refer to EBITDA, net income and EPS today, I'll be referring to adjusted numbers. Results have been adjusted for nonrecurring items, including divestitures, post-acquisition integration activities and capital structure expenses. During the fourth quarter, we incurred $26.3 million of nonrecurring charges impacting EBITDA, $14.4 million of which relates to costs associated with the refinancing retirement of our 2018 bonds and the amend and extend of our bank agreement; $11.9 million relates to the sale of our labels and flexible packaging businesses, the acquisition of Cascades and Rose City along with our Europe integration activities. Focusing on Q4 results, our reported net sales were down $74 million compared to Q4 2013. Excluding net sales from divested assets, net sales from our ongoing business were up 5.6%. EBITDA increased 8.5% to $171.8 million, as margin improved to 17.2% from 14.7% a year ago. Excluding earnings from divested assets, EBITDA from our ongoing business was up 13%. The increase was driven by higher pricing and performance gains, which was partially offset by moderate labor inflation and FX headwinds. Net income increased $11.5 million to over $70 million. EPS for the quarter was $0.21, up $0.04 from…

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

I guess, my first question, for Steve or Mike or Dave, could you go through your synergy targets and earnings targets again for Cascades and Rose City? And I'm looking specifically at Slide 8 where you say net incremental EBITDA to Graphic Packaging will be $10 million in '15, $20 million to $25 million in '16 and $25 million up to $30 million in '17. By '17, is that $25 million to $30 million the accumulation of incremental benefits? Or each of these is incremental, so I'm tacking on $25 million on top of $20 million on top of $10 million?

George, this is Mike. I wanted to just clarify that. Your read is correct. It's $10 million in '15, $25 million run rate in '16, and $30 million run rate in '17. So you don't add them all on top of one another. We're trying to just show you that it takes approximately 24 months for us to get the full run rate of the synergies for those 2 acquisitions.

Fair enough. And then, recognizing that you're not in Canada and you maybe don't want to talk too much about this in a broad forum, what are some of the complications, I think is how you framed it, in terms of the integration of Cascades within Graphic Packaging that we should be aware of? Any key operational mile markers that we should be aware of that would dictate whether you're going to be successful or not with your synergy and earnings goal there?

Yes, I think the way to think about that, George, is there's paperboard mills involved. And when we're driving synergies through paperboard mills, as we saw when we did the Altivity transaction, it just takes us longer to get those synergies to the bottom line. And we like the converting assets we just purchased, and we think there's some opportunity to scale and drive efficiency through those. But there'll be a little dislocation for the first 12 months as we look to optimize the mills into our system and really figure things out. You have to remember, we just closed on that transaction yesterday. So there's been a limit to how much true diligence and planning we could do with the other side, just given the fact that we just closed.

Hey, George, you got to ensure -- whenever we do an acquisition that includes the mills, you can well imagine, we have a lot more outside scrutiny by government agencies. And therefore, there's only so much you can you can do. In a bolt-on with the converting businesses, we can get pretty deep pretty quickly; mills, not so much. So we have a very good understanding of what we're getting up there, but in some ways, we're going to need to do some work. Additionally, a lot of it is -- some of it is board integration. We're going to have to build -- we're going to -- we'll have some capacity buildout in some of our CRB mills to help integrate some of those activities, even in Rose City where there's some outside tons being purchased that we will integrate into our mills. Those just take a little bit longer. So if you think about the difference between sort of what we did in Europe, which we're all converting, versus when we did the Altivity thing, it took a little longer. But the rate of synergy is pretty good. You took -- $30 million of synergy -- or $30 million worth of EBITDA for a total purchase of $110 million, that's a real decent return for Graphic Packaging.

No, I mean, that makes perfect sense, David, again, on the mill side. I get what you're saying. Last one, and I'll turn it over. And 2 of your peers, obviously, recently announced plans to merge. And one of the things that they've talked about -- and we've discussed in our own researches that will now allow them to offer the full suite of boxboard grades to the folding carton market. Is that important? Do you feel like you need to fill in on the SBS or SUS side? Or does Cascades actually give you sufficient amount, where you don't see that as a strategic issue to contend with?

So I'm assuming you're talking about the Rock...

The Rock-Vaco [ph].

Yes. The -- what I've always said about offering all 3 grades is that we thought it was predominantly a cost option for us, because we could optimize back through the board mills if you had all 3 grades, right? Never really said it was a customer deficiency. Those customers -- those end-use markets are pretty well-defined. And of course, we've got great, great supply partners with our current SBS guys, and I would think they would have an incentive also not to want to lose share to a new competitor. So I'm unconcerned about that part of the equation. The -- I like our current position. CUK is a great grade, and I know they believe that as well, which is, I'm sure, what drove a good part of that acquisition. But I don't -- I think when you have strong competitors overall, you end up in a good market position. And so we kind of looked at that as a net positive for Graphic as we go down the road. We know both of those guys are great competitors, they're well-run companies. Putting them together will take some complications. They'll get that done, but that makes us stronger as well. So I don't -- I didn't -- we did not see that as a negative for Graphic.

Your next question comes from the line of Ghansham Panjabi with Robert W Baird. Ghansham Panjabi - Robert W. Baird & Co. Incorporated, Research Division: Steve, welcome to the call.

Thank you. Ghansham Panjabi - Robert W. Baird & Co. Incorporated, Research Division: First off, on the dividend, based on the current stock price, it's a little over 1% yield. Maybe can you outline the thought process behind how you got to that dividend payout? And also, your philosophy on the dividend in terms of perhaps growing it over time.

Yes. I mean, I'll take part of it and let Steve do a part of it. We did a fair amount of analysis. We used outside advisers in the process. And then, fortunately, we have a fair amount of analysts like yourself that called us that were not short of opinions and insight into what would be appropriate. And we certainly put that into the cauldron as well. We wanted to make sure that the amount was enough to be meaningful. It seemed not reasonable to put -- to just do a nominal without it being significant. And if you look at where the industry is and when people initiate, we're certainly in the upper end of that percentage. It gives us some opportunity over time to expand our dividend, but it also gives us enough dry powder to be able to have cash flow for share buyback in the appropriate times, in dips or to make sure that we can -- that our management incentive plans are not dilutive to shareholders. We wanted to be able to have that kind of flexibility. And then, as Mike said, we've got some good capital projects and ongoing acquisitions. So it's a balance of the cash flow that we're going to have to invest back in the business and return to shareholders. So we debated in great detail with our board, I mean, it is a very, very informed and experienced board. And we came out with a number that made sense for us, at least at initiation stage. Ghansham Panjabi - Robert W. Baird & Co. Incorporated, Research Division: Okay. And then, just as it relates to the weather disruption for the first quarter of 2014, is there any reason that you would not be able to capture what you lost from weather during the first quarter, in particular? And can you kind of remind us as to what that number was on EBITDA? And also, Steve, if you can, just given the company's growth in Europe, if you have a sensitivity in terms of foreign exchange, euro versus dollar? And the impact on EBITDA, that would be helpful also.

Sure. I'd be glad to, and thank you. Relative to the FX, as David mentioned, there will be some headwinds and it'll be a function of translation and transaction-based. And of course, we don't predict exchange rates. But at current rates, it's a $15 million to $20 million headwind that we will manage through. And as David said, we've got some deflation activities and other things that we certainly will apply against that as we continue to improve the earnings year-over-year. I think, as you look back on last year, barring any additional weather activities, that was a $10 million to $15 million type impact in the quarter. And it should be something that would be a net positive for the coming quarter, assuming nothing occurs of substance here over the remainder of the quarter.

And I think we -- if you remember, I think we've said that we expect performance -- I'm sorry, this year's performance improves about $60 million. That included the $15 million of first quarter numbers -- first quarter headwinds that we had. So our target for this year is reasonably in that $75 million range. That includes the integration activities and costs that we're going to get out of Benson. It includes the add-back of the $15 million. I announced in the fourth quarter that we had taken an SG&A reduction at corporate level across because of the smaller footprint, and that was probably $10 million. So if you look at it, I think the $75 million in performance sort of target, it makes perfectly good sense. And some of that is going to be eaten up in this $20 million worth of FX. But that's still -- having said that, guys, we've always said that we sort of -- our high level, we grow the business 2% to 3% on the top line and 5% to 6% on the bottom line. We're not walking off of any of those kinds of numbers. We're going to have to -- we will find a way to improve and grow the business such that we could generate those kinds of financial improvements. And that's kind of what we're expecting to do, and you saw that in our cash flow guidance.

Your next question comes from the line of Debbie Jones with Deutsche Bank.

I was wondering, could you talk a bit about the exposure to Mexico? I mean, Mexico is obviously growing pretty fast. Imports or exports into the U.S. are expected to continue to grow. Do you think that there's an opportunity for you guys that could capitalize on that going forward? And how much is that a priority for you?

Debbie, it's Mike. I would characterize it, as we've talked in the past, that is a priority for us. And we continue to look for ways to do that, both organically and inorganically. As we had mentioned on a prior call, we actually were in the final stages of a potential acquisition. And the multiples just got too rich and we walked away from that deal. But that remains a key priority for us, and we're looking at a number of different options. And we certainly would like to increase our position in Mexico. We have one plant there now. Our customers are moving there. They're building out factories, and we think it's a good place for us to be.

And Debbie, we had a good year in Mexico. Overall, our sales were good there. We made good money there. Mike's right. It is difficult in Mexico to make sure you know what you're buying. So there's a little bit of a pig-and-poke mentality. Graphic is big enough to be able to make that acquisition and know that there's going to be some mistakes along that line, but we're not stupid enough to give away shareholder value. So we're going to continue to look hard in Mexico. But you have to lean over your skis to be able to buy down there. It's just really difficult to figure out exactly what you're buying from an EBITDA standpoint. So I think we'll get something done in Mexico for sure in the next 18 months because it just makes sense for us. But we're going to be smart about that.

Okay. That's helpful. And then, just on the new products side of the equation, and you addressed this on the last call. Just wondering if you could talk about what you're most excited about this year, what you think will have the biggest impact for GPK.

We have a couple of things that we're pretty excited about. Of course, we profiled at length our Tite-Pak innovation for beverage containers, which is really getting some positive traction, both with the craft brewers as well as the big beer customers. We also have some press tray options that are used in our SUS paperboard that can replace CPET trays. We're working on some of those things and applications and seeing some success. And then, I'd also say that our microwave business continues to perform well.

Your next question comes from the line of Mark Wilde with BMO Capital Markets.

Dave, Mike, Steve. First question I had, just a little bit of a follow-up on FX. Are there any -- is there another kind of layer of potential FX issues just as we think about, say, European carton board suppliers, particularly the Scandinavians maybe having a little more of a currency advantage now?

Well, I mean, certainly, they will have the ability to sell here with the tailwind of currency. But you and I both know, you plan a business around hedging and currency, that's a short-term plan, right? Because ultimately, just like it's going one way, it's going to go the other. Your projections or mine relative to oil and the impact of that with foreign exchange says it's really difficult to build a long-term supply chain. On top of which, you're not really selling board. None of our customers actually buy board. When this stuff shows up, it needs to be printed, cut, glued and ready to be installed. So at the end of the day, unless you're buying board that goes through a large converting operation like Graphic or Rock-Vaco [ph], then you're selling through a whole bunch of small independent guys. Not that you can't do it, but these are not sheets of 8.5 by 11 things. The -- each one of the -- as you look at the -- if you look at the number of the complexity that goes into rolls that we sell in our own operations, let alone outside, it's a really difficult process to do, Mark. And then, you still got U.S. logistics. You can get it to the coast, but check out the East Coast. There's no folding carton business there. So you've got to get it from one place to the other. So yes, it's certainly an impact -- transitory impact potentially, but as far as being in the folding carton business and planning for, or being concerned about, a big onslaught of board from Europe showing in the United States, that is not what keeps me up at night.

Yes, okay. And Dave, I'll just kind of follow on that. I just was curious as to whether you're seeing anymore Scandinavian pressure over in the U.K. market. The euro has declined a lot against the British pound.

Hey, we're a net buyer over there, so that's -- that's not a negative for us, right, Mark?

Okay. Second question. Can you give us some sense of where you're picking up volume domestically? Which markets?

Yes, and we don't talk a lot about those kinds of things, just because it's really not in our best interest. What I would say is we had a great quarter and year in frozen pizza and dry foods. The beer craft was good for us as well. So I'd kind of leave it at that.

Okay. And Dave, the corrugated box volumes have picked up pretty nicely in the last 4, 5 months. Over half of what goes in the box is -- are beer and food, which you provide the packaging for. So what do you think is going on here? We got a pickup in corrugated, but we don't really seem to have much pickup in the stuff that would go into corrugated yet.

Yes, I mean -- I think, Mark, you're -- you know that as well as I do that the predominant part of the U.S. economy that's picked up has been more the industrial side of the equation, right? Those corrugated boxes that are moving products to and from a Ford plant or the -- or Amazon online shopping and so on and so forth, and there's not a lot of food. I mean, it's -- you and I both know, there's not a lot of food being delivered by drones. So at the end of the day, we're not seeing that kind of pickup on an aligned basis with corrugated. Having said that, as Mike said, our backlogs are good in our core business. So it's incrementally stronger than we saw first quarter of last year, so we're seeing some improvement on that. But corrugated tends to be the tip of the spear. They're going to see -- when the economy -- from the general economy, construction, manufacturing, when it goes up, they're going to see a much bigger improvement than the food and beverage part of the equation. And of course, when the economy struggles, we don't see that -- the level of declines that occurs in that business as well. So to some extent, it's really different macro trends in those 2 -- in those businesses.

Okay. And then, the last question I have, Dave, is just on accretion once you integrate more tonnage from the mills. From Slide 8, it looks like you assumed something in the $500 to $600 a ton range for the accretion from each incremental ton that you can move forward through a carton plant. Is that a good number?

Mark, this is Steve. We tend to think that about more in the $300 range. And then, there's other synergies that we drive through the system. And so what you're seeing there is kind of a cumulative impact that we would secure over the next several years. But we tend to -- the $500 you referenced, we would use a number closer to $300 on a board-only basis. And then, we would pursue, of course, other synergies, SG&A, other supply chain activities, optimization of assets in terms of where we run things and the like.

Freight will be a bigger part of the Canadian thing, because as you well know, a number of our plants are actually as close to the market as the CRB mill that we're purchasing. So we'll optimize around those mills, that mill network, and we'll pick up some freight. And which, freight, of course, is -- end up, traditionally, being mostly we keep it, some of it is, of course, customer freight that the customers will have advantage on, and sourcing as well, with 2 additional paperboard mills.

Okay. I have actually one other question. You mentioned Tite-Pak. I think when we were down there in December, you mentioned that you were in the -- one of the Yuengling breweries, but not other. Have you picked up any kind of incremental wins since then?

Well, as you know, Mark, we don't talk about specific customers. But what I would say is the traction we spoke with you about when you visited continues to be very positive.

Yes.

Your next question comes from the line of Alex Ovshey with Goldman Sachs.

On the raw material side, for '15, what are you going to be paying more for in terms of like the inputs that are actually going up for you? Can you talk about those?

Well, for one, outside-purchased board and -- paper because there were some price increases throughout 2014. So we'll see some incremental on that. And then, probably the biggest impact will be wood. Wood continues to see some inflation. It's really agnostic to what the macro is doing. In many ways, there's some outside pressure in the United States because Europe subsidizes the burning of our wood to meet their ridiculous sustainability goals in Europe. And therefore, that puts some pressure on the wood baskets that incrementally drive wood prices up in the Southeast. So as long as Europe has plenty of cash to support those subsidies, I would expect that to continue. Beyond that, it's going to be pretty flat. And I think I said in my -- in our notes, we expect actual input inflation in the year to be kind of modest.

Yes, modest.

It'd be $5 million or something like that, net-on-net basis.

Alex, this is Steve. The only thing I might add to that is, to David's point, is freight from -- excluding the fuel surcharge component, supply-demand from a freight perspective, we've seen increases there. We would expect to see it relative to rules of the road supply-demand there. So...

Line-haul rates.

Line-haul rates themselves actually have inflation. Obviously, some of that's offset by fuel surcharges. But for example, fuel surcharges are 20% of the overall cost of freight. So it's just -- that's another area underneath a number where we would see an increase, for example.

I'll tell you too, Alex, and we don't want to get too far for you, but Mike is on a tear here to look at our entire warehouse and freight distribution system. Graphic still spends way too much money on storing and moving things around and warehousing. So over the next couple of years, we'll be spending, not some insignificant funds, but to take out a fair amount of costs that are irresidence in our business by virtue of our warehouse footprint. So that freight and those kinds of things inure to our benefit, we'll have to spend some money to do it, but there's lots of cost opportunities in this business. And he and his team is -- specifically supply chain, have got some significant programs to take those kinds of costs out of our business. But until we do that, we're going to see incremental increases and just moving our stuff around.

Got it. I appreciate that color. And just one more for me. On the buyback of $250 million, I know it's opportunistic, but is the goal to get it done in '15?

No. I think that $250 million is going to be over a period of time. First of all, I mean, I want to keep some dry powder available to do these bolt-on acquisitions and -- in -- on our business. So I don't -- wouldn't do -- it'll take a couple of years. I will say we'll certainly have a floor. For sure, we're going to go out and buy back the shares that would be dilutive from management comp and -- so that our shareholders are aren't losing ground on that. So for sure, that -- that's probably 30 million to 35 million or something like that, we expect. Beyond that, we'll watch the dips and be -- we've got an outside adviser that's going to help us on the process and try to be smart about what we do from a buyback standpoint.

Your next question comes from the line of Anthony Pettinari with Citi.

I just had a follow-up on George's question. The large competitors of yours that are merging, or have announced their intention to merge, they've touted the benefits not only of being in the 3 boxboard grades but also being integrated in the containerboard and maybe being -- having an integrated containerboard-boxboard offering might allow them to gain share with CPG customers. And I'm wondering if you think that's something that you -- is that something that you see in the marketplace? Or is that something that you would consider? Is having a containerboard offering something that you think would give you an advantage in the marketplace?

Yes. So what that looks like is you have a bigger basket to lower your price on, I guess. I mean, the guy that buys paperboard and buys containerboard are 2 completely different parts of the organization. So a bigger basket allows you, I guess, to reduce the price in one sector to sell something else. And if that math works, I guess that -- then, that's what you would do. Hard-pressed for me to see how price reductions in that really work, but that's really the advantage. Otherwise, no customer really comes to you anymore and says, "We want one shop for one-stop shopping." I mean, that is just yesterday, yester-tech stuff. That's really not the way things are doing. You'll see, the focus seems to work. So I think the bigger opportunity there, as I said, is the opportunity across multiple grades to optimize back your paperboard mills, and there's great synergy in that process. And I would expect them -- and in fact, I think they announced that they were going to do that. But I don't think the customer offering -- broader basket of customer is really a big competitive advantage in the process. If you want to cut the price, just cut the price. So I mean, you don't really need more tools to do that with.

Okay. That's very helpful. And then, regarding North American volumes, I'm just wondering how they trended in the 3 months of the quarter, and then, into January and February. I mean, from your comments, it seems like there's been a bit of an acceleration, but you had easier comps in terms of weather last year. I just -- I wonder if you could just give any more color around kind of the volume recovery, if any, that you're seeing in North America.

Q4-on-Q4 was relatively flat. We were up a little bit because our acquisitions as we kind of outlined on the waterfalls. As we headed into January here, our backlogs, as we said, were modestly stronger. I wouldn't characterize them as being any more strengthening than that. I mean, they were steady, but I wouldn't say that they were up materially from where -- what we saw last year. Net of the weather.

Net of the weather.

Your next question comes from the line of Philip Ng with Jefferies.

The Cascades business was previously offering with somewhat depressed margins. How much of that is tied to the cost structure or a lack of pull-through on the demand front?

Both.

Okay. Would you be able to kind of parse it out?

Well, I'm not going to parse -- I don't think it makes a lot of a lot of sense to parse it out. Because at the end of the day, we've got to solve both of those problems, right? The advantage of the integration activity is that we're going to change -- we'll improve the mix and we'll improve the flow of board through that entire business, and that will manifest itself in better margins. Some of it will be yield, some of it will be efficiency and some of it will be in the carton plants as well. So what I would simply say is as we look at that integration synergy, we absolutely believe there -- that in that business, there's no reason we can't be at the same kind of margins that we are in our CRB business. Nothing we've seen which suggests we can't do that, but it will be a combination of improving the kinds of things that we do every single day.

And that's why, Phil, it takes a little longer to do it. That's why we're projecting over a 24-month period of time.

Got you. Very helpful. And does your synergy target account for any ability to untap some of that low-cost pulp capacity you guys highlighted at your Analyst Day? And will this acquisition limit your open-market purchases on the SBAS [ph] front? I know it's not quite SBS, but it's SBS-like.

Yes, it won't really change our -- we'll do some optimizations out of that mill. We'll have a chance to really look at Jonquiere. Look, we know Jonquiere is not a top quartile mill. I mean, we're not idiots, so we saw -- we know that it's an expensive mill to operate, and we'll optimize that mix and look at our grades, but we're still going to be a big purchaser of SBS on the outside. Relative to SUS, there's integration opportunities within the Cascades, but also within Rose City. They're -- they bought a fair amount of tons out there, and I don't know why, but not from Graphic Packaging. So we'll change that approach for sure. And so yes, we're going to take some of the pulp -- excess pulp capacity at our West Monroe and use it. Additionally, the Santa Clara board mill makes a grade out there on the West Coast that is -- that we use for a lot of our craft beer. It's a hybrid between CRB and SUS, and that will allow us to build that board mill up out there. And that's a real positive for Graphic. It's a nice ecosystem on the West Coast if you sort of think about the converting network between Oroville, which is -- we purchased about 3 or 4 years ago now. And in this one, we've got a pretty good ecosystem around the Santa Clara board mill out there on the West Coast, which is incredibly important. Because as Mark Wilde said earlier, you want to protect yourself, from a carton standpoint, from imported -- somebody taking a scud on imported board from whatever, wherever based on currency flux, and this allows us to do that.

Got you. And then, how are you guys thinking about M&A, at least for this year? Are your hands full at this point? You -- is it going to be more of a '16 event? Or are you going to be opportunistic this year?

Every time I say we aren't going to do something, we announce another deal, right? Is that kind of the way we've been? So Graphic -- we are a serial buyer and seller, and I -- we just have to sort of get over that. And the fact of the matter is, if there's something out there that looks like it's going to be accretive, certainly, as accretive as these 2 acquisitions are going to be, then we will do it again.

Okay. And just one last one for me. The inflation number, Steve, you highlighted, the 0 to $10 million number, is that just input cost inflation? I know the last call, you guys kind of fleshed out input cost inflation as well as labor and wages, all other inflations. Can you help me parse that out for '15?

Yes, I'd be glad to. Yes, that is just input commodity cost inflation that equates to the $40 million that we saw this year for those items. That's the 0 to $10 million. And then, the other inflation, which is primarily labor and benefits where we saw roughly $35 million, we would see $30 million to $35 million again there. So you've got 2 separate inflation numbers that accumulate into the total for us.

Your last question comes from the line of George Staphos with Bank of America Merrill Lynch.

One one-off question, and to some degree was something that Mark was asking on. When we look at SUS as it's produced here in the States, what are its relative merits versus something like fresh fiberboard over in Europe? And why does it -- or why do you think it will continue to gain share versus that other grade?

George, it really has to do with the strength characteristics, strength and tear characteristics of the SUS paperboard relative to anything else that's really available on the market. It holds up really well in wet environments, it also holds up very well in frozen environments. And the basis weights of that paperboard when compared to other competitive offerings are very, very solid. Meaning that you can use a lighter-weight caliper to get the same effect. So that's really what makes it cost competitive on a global basis.

I mean, I know you don't want to get too technical on the process, but you got to remember, the Fiberlink is totally different on pine than on recycled or on bleach. So the tear characteristics are materially different and so are the ability to hold heavier products. If you took a CRB and you wrapped it around a 24-pack of beer, you wouldn't get it from their store to your car. So the fact of the matter is there are end-use applications that work great for that, and that's what we tend to. We don't use CUK in areas where it makes sense to run CRB. But CUK has a very broad range of applications that it can be great across the 2 other substrates.

Yes, I mean, I'll take it offline, but I thought the fiberboard would be more analogous to SUS in terms of being virgin-based and the like and having, therefore, the fiber link but...

Folding box -- you mean, folding box board? That's got a big recycle -- yes.

Yes, no -- I mean, the Scandinavians make this fresh fiberboard, which I thought was more virgin-based and I didn't think it was a recycled grade, but...

It is. It is, George. But you've got hardwood and softwood, fibers there, and so you're back into this whole strength and tear question.

Okay. They're telling me we're done. So we'll get back to work and talked to you again in the next quarter. Thanks for helping.

This concludes today's conference call. You may now disconnect.