BALL - Ball Corporation

Operator: Greetings, and welcome to the Ball Corporation Third Quarter 2025 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Brandon Potthoff, Head of Investor Relations. Thank you, sir. You may begin. Brandon Potthoff: Thank you, Christine. Good morning, everyone. This is Ball Corporation's conference call regarding the company's third quarter 2025 results. The information provided during this call will contain forward-looking statements. Actual results or outcomes may differ materially from those that may be expressed or implied. We assume no obligation to update any forward-looking statements made today. Some factors that could cause the results or outcomes to differ are described in the company's latest Form 10-K, our most recent earnings release and Form 8-K and in other company SEC filings as well as company news releases. If you do not already have our earnings release, it is available on our website at ball.com. Information regarding the use of non-GAAP financial measures may also be found in the Notes section of today's earnings release. In addition, the release includes a summary of noncomparable items as well as reconciliation of comparable net earnings and diluted earnings per share calculations. References to net sales and comparable operating earnings in today's release and call do not include the company's former Aerospace business. Prior year-to-date net earnings attributable to the corporation and comparable net earnings do include the performance of the company's former Aerospace business through the sale date of February 16, 2024. I would now like to turn the call over to our CEO, Dan Fisher. Daniel Fisher: Thank you, Brandon. Today, I'm joined on our call by Dan Rabbitt, SVP and Interim CFO. I will provide some brief introductory remarks and discuss third quarter financial performance. Dan will then touch on key metrics for 2025, and we will finish up with closing comments and Q&A. First, I want to take a minute to highlight the amazing work our employees and teams have done to give back to their communities. During the third quarter, I'm proud to share that Ball employees donated over 7,000 hours of their time across 19 countries in support of 116 charities. This past September was also our annual Who we are Month, where we celebrated our unmatched culture and talented people that help us, and our customers navigate complexity and provide innovative solutions that enable us to win. I want to thank all of our employees for devoting time to uplift our communities and participating in Who we are Month. I also want to thank all of our employees for our great third quarter business performance. Beverage can volumes grew 4.2% comparable operating earnings increased 5.1% and comparable diluted earnings per share rose 12.1%. In addition, we have now returned $1.35 (sic) [ 1.27 ] billion to shareholders through share repurchases and dividends as of today's call. This strong performance reinforces our opportunity to deliver record comparable diluted earnings per share, record EVA and approach record adjusted free cash flow in 2025, a testament to the strength of our portfolio and disciplined execution. Aluminum packaging continues to outperform other substrates globally, underscoring the resilient and defensive nature of our business. While we remain attentive to uncertainties related to tariffs and consumer pressures, particularly in the U.S., we are confident in our ability to proactively manage these dynamics and sustain our momentum towards delivering 12% to 15% comparable diluted EPS growth. Third quarter comparable net earnings of $277 million were driven by higher volume and cost management initiatives, partially offset by higher interest expense and lower interest income. In North and Central America, segment comparable operating earnings increased 3.5%, driven by stronger-than-expected volume performance, though partially offset by product mix headwinds. Mid-single-digit percent volume growth was led by continued strength in energy drinks and nonalcoholic beverages. Our team continues to execute at a high level, successfully meeting elevated demand, navigating the complexities of Section 232 tariffs and mitigating risks in a volatile environment. We remain vigilant in monitoring the evolving geopolitical landscape and tariff developments, and we are actively managing these dynamics to protect our business and support long-term growth. In EMEA, third quarter segment volume growth of mid-single-digit percent remained robust, contributing to a 14.8% increase in segment comparable operating earnings. Favorable demand trends continue to reinforce our confidence in delivering meaningful year-over-year growth in 2025. This outlook is supported by sustained volume momentum and ongoing operational efficiency, which position us well to capitalize on market opportunities and drive continued performance improvement. In South America, segment comparable operating earnings increased 2.6% as mid-single-digit percent volume growth was supported by strong performance in Argentina. While the Brazilian market came in slightly below our initial expectations due to weather-related softness, we anticipate a recovery in the fourth quarter as conditions normalize. Our teams across the region continue to execute well, positioning us for sustained momentum. We delivered a strong first 9 months of 2025, positioning us well to achieve our full year objectives. While important work remains in the fourth quarter, our teams are fully engaged, navigating ongoing uncertainties with discipline and leveraging the strength and resilience of our global portfolio. We remain laser-focused on our goal of delivering 12% to 15% comparable diluted EPS growth for the year. Despite external challenges, we are confident in our team's proven ability to execute effectively and deliver meaningful value to shareholders. We anticipate 2025 global volume growth to end above the long-term 2% to 3% range and expect all of our reportable segment businesses to perform in line with or ahead of our long-term targets in 2025. This reflects the durability of our underlying global demand, the strength of our customer relationships in addition to the operational consistency of our teams across markets. In EMEA, we continue to expect mid-single-digit volume growth in 2025 as the competitive advantages of aluminum packaging and low can penetration rates continue to drive share gains across the region. In South America, recovery in both Argentina and Chile has progressed in line with our expectations. While Brazil experienced some softness earlier in the year, we anticipate a recovery in the fourth quarter. As a result, we now expect full year 2025 volume growth across the region to fall within our long-term range of 4% to 6%. Our teams remain focused on execution and are well positioned to capture growth as market conditions stabilize. In our North American business, stronger-than-expected volume growth across nonalcoholic categories, particularly energy drinks, give us confidence that we will exceed the top end of our long-term 1% to 3% volume growth range in 2025. We remain confident in our ability to grow volumes slightly ahead of the market. The defensive nature of our portfolio, combined with strong customer alignment positions us well to navigate potential economic uncertainty and continue delivering consistent performance. With that, I'll turn it over to Dan to talk about key metrics for 2025. Daniel Rabbitt: Good morning, and thank you, Dan. We anticipate year-end 2025 net debt to comparable EBITDA to be slightly above 2.75x, and we will repurchase at least $1.3 billion of shares in 2025. Through today's call, we have already purchased $1.2 (sic) [ 1.27 ] billion of shares year-to-date. CapEx is expected to be below D&A in 2025. We anticipate being able to deliver on our target of adjusted free cash flow in the range of comparable net earnings in 2025. Relative to the estimated tax payments due on the aerospace sale, we expect the remaining portion to be paid in the fourth quarter of 2025. Our 2025 full year effective tax rate on comparable earnings is expected to be slightly above 22%, largely driven by lower year-over-year tax credits. Full year 2025 interest expense is now expected to be in the range of $320 million. Full year 2025 reported adjustable corporate undistributed costs recorded in other non-reportable are expected to be in the range of $150 million. And last week, Ball's Board declared its quarterly cash dividend. We remain focused on driving operational excellence, sharpening cost discipline and unlocking productivity across our global footprint. Our teams are actively adapting to shifting conditions in emerging markets and broader geopolitical developments, maintaining agility and responsiveness in an increasingly dynamic environment. This proactive approach continues to support our ability to deliver consistent performance and long-term value. Our business model remains resilient and well positioned to weather external volatility, supported by the proactive steps we've taken to strengthen our balance sheet and enhance financial flexibility. With a solid foundation and clear visibility into our path forward, we are executing on initiatives designed to deliver sustainable high-quality results. We remain focused on driving long-term creation for shareholders through consistent performance and disciplined decision-making. With that, I'll turn it back to Dan. Daniel Fisher: Thanks, Dan. Our business continues to perform well, fueled by strong demand across our global network. Tight capacity conditions highlight the importance of operational precision and reliability in meeting customer expectations. Thanks to the agility and dedication of our teams, we remain on track to achieve our financial goals for the year, including 12% to 15% comparable diluted EPS growth, record EVA dollar generation, adjusted free cash flow aligned with comparable net earnings and significant capital returns through robust share repurchases and dividend. While external volatility persists, particularly around geopolitical developments and market dynamics, our resilient business model and proactive footprint optimization continue to position us well. Long-term contracts and disciplined financial management further strengthen our ability to deliver consistent high-quality results. This year has been a testament to the grit, talent and relentless focus of our team. We put in the work, and now we're seeing that effort translate into real momentum across the business. We're not just competing, we're winning, and we're just getting started. Our commitment to delivering longer-term shareholder value remains unwavering, driven by volume, operating earnings, free cash flow and EVA growth. The foundation is strong, the strategy is working, and the future is ours to shape. Thank you. And with that, Christine, we are ready for questions. Operator: [Operator Instructions] Our first question comes from the line of Ghansham Panjabi with Baird. Ghansham Panjabi: So I guess starting off with Beverage, NCA segment. Obviously, 2Q, you called out some operational inefficiencies just given the nature of which categories grew that quarter, et cetera. Dan, how does that dynamic play out for 3Q? Because it looks like operating profit is a little bit better on basically comparable volume growth, but the operating profit is -- the operating leverage is still quite a bit below historical norms. So just your thoughts there would be helpful. Daniel Fisher: Yes, I appreciate the question. Ghansham, we remain encouraged by the underlying market momentum as cans are continuing to win on a multipack value in at-home consumption, similar to last quarter, as you've already indicated. In the third quarter, we saw continued customer and pack size mix shift toward lower-margin categories, and that was driven by market trends as well as our deliberate choices to align with the fastest-growing brands and continue to future-proof our North America business. So to your point, we grew NCA volume mid-single digits, operating earnings 4% year-over-year. We continue to see strength in terms of volume growth, and we'll be able to navigate a more efficient future as our Millersburg, Oregon facility comes online in the second half of next year. But all total, the profit per can from -- since 2019 in our North America business has grown 32%. So we like the profitability levels. We'd wish operating leverage was just a bit higher, but we're still on a journey to continue to improve that. And the business is in a really good spot. And you want to have the volume so you can step into a more efficient footprint and supply chain pattern moving forward. Ghansham Panjabi: Okay. And then I know it's difficult to predict volumes in this operating environment 3 months out, let alone in a year out, but comparisons are going to get more difficult for that segment in 2026. Relative to the industry volumes for 2026, would you be at least in line with the industry? Or how should we think about that dynamic for next year? Daniel Fisher: I would say yes to that. Right now, our current focus, as you can imagine, is finishing out a really strong 2025 and continuing the earnings momentum we were able to report in Q3. As it relates to 2026, it's early in our strategic planning process, probably to provide real granular guidance. Next 4 to 6 weeks will be indicative of what the more detailed prognostication will be for us. But we're confident in our ability to continue to grow our global volumes in line with long-term expectations. We'll grow earnings, we'll grow EPS, and you can expect us to continue to -- our robust share buyback program. So those are kind of the highlights for '26 and more to come here in the next probably 4 to 6 weeks. But North America, we're keeping an eye on that. We'll be in line with the market, if not ahead of it, and then certainly ahead in '27 and potentially '28 as we look here today. Operator: Our next question comes from the line of George Staphos with Bank of America. George Staphos: Congratulations on the progress. Question for you, recognizing we're ultimately not going to be able to hold you to any of this per se. But how do you think tariff situations right now and aluminum strategies are affecting volume patterns and what it can mean for next year? And then we can cover world peace, if you'd like after that. But all thing aside, do you think there's been any sort of loading of volume into the market ahead of tariffs? Or what else are your customers doing into next year? Relatedly, I don't think there's going to be any move on 232, but if there was a reversal on tariffs, if any of these are challenged, does that make life better or just complicates things? And I had a couple of follow-ons. Daniel Fisher: Yes. I think movement on tariffs -- kind of tying your second question to the first question. We'll make it easier on demand. I would say we're passing through about a 25% to 30% price increase to our customers right now. It's negligible in terms of per can price, but that's what's being passed through now in North America, in particular, when you talk about October and then subsequently January price increases, we'll have that impact in it. So a reversal of that will be a healthy COGS move for our customers. Difficult to see the demand impact as we're still running -- our mix has something to do with it. Our favorable customer portfolio has something to do with that. We're winning disproportionately in the market on the backs of some very, very good strategic partners. They're navigating it well. We're helping them navigate it. I do think when you hear demand challenges, you'll hear them specifically from our customers, and they will be tied to probably an ethnic backdrop, ICE impacts. And so I don't see that specifically in our can volume, which is a positive because cans are up, but it has to be impacting elements of the substrate and the ability for that end consumer to consume products via the same channels that they had historically. I think we're winning to some extent in that. Now whether that continues -- to your point, I've got a better answer on World peace. But yes, it's still -- there's still some question marks, but I just am really pleased with our team, our performance, and we'll continue to grow despite these challenges. And in some instances, they're helpful to us. George Staphos: Related to pack mix, a couple of questions and then I'll turn it over. Are you seeing -- and the broader question is, are you seeing any signs -- it doesn't sound like it that your customers are maybe contemplating moves to nonaluminum packaging because of costs. We hear that from other substrates. Might we see a little bit more of it perhaps in South America with a move to refillable glass. What are your thoughts on that, whether that's a real threat or really not at all? Any move at all? I don't think so from the scanner data, but anything in terms of 2-liter in North America? And related and last, and I'll stop, one of your larger customers is promoting, it sounds like mini cans in convenience store. Any pickup -- anything you could share there in terms of what it means for you next year? Daniel Fisher: Thank you, George. I think the first part is I have asked that question at the very highest levels of our strategic relationship, and they say, -- the only thing I can tell you, Dan (sic) [ George ] is cans are going to continue to grow. What can size, I can't tell you, what channel I can't tell you, but they're going to continue to grow. We're going to use cans. We haven't seen the returnable glass shift in South America. But usually, that's driven from an inflationary market dynamic. It's been more cold weather, but there certainly is a bit of inflation in Brazil in particular. So we're keeping our eyes on that. But as you transition into '26, you've also got an election and a World Cup. And usually on both of those instances, cans do really well. So I think we may be protected for a period of time. And then lastly, yes, we have -- we're very aware of what's been said publicly. The -- I think all of our -- all of the CSD players that are in the 7.5-ounce format are pushing that. That's a value proposition both for the end consumer and for them. And I think this is just another application of using the 7.5-ounce can for price point, which says a lot about where the end consumer is in terms of the size of their grocery basket, et cetera. And the can works really well on small sizes. And so we're excited about the opportunity. I don't know how big it will be, but it should be an incremental lift to us, both from them and then the knock-on effect from their competitors. Operator: Our next question comes from the line of Stefan Diaz with Morgan Stanley. Stefan Diaz: So I guess maybe just to start, there's been some discussion regarding contract movements potentially impacting next year by your peers in North America. Do you see any potential shifts impacting your volume performance in 2026 in the region? Daniel Fisher: Short answer, no. This is as strong a contractual outlook as I've seen for us in the 15 years I've been at Ball. There have been some movements. In many instances, we benefited from those movements and '27 will benefit further. For us, we're a bit hamstrung on growth in 2026 until we get our Millersburg facility up. So it will be tight for us, but we appear to be full. And that's the plan we're operating against right now. Stefan Diaz: Okay. Great. That's helpful. And maybe just sticking with the Oregon plant. Can you remind us of what volume impact this will have in 2026 or not really because I believe you were maybe shipping those cans from elsewhere? And then secondly, how should we think about the potential margin lift when that plant gets up the learning curve or at least starts to open, I guess, in the second half of 2026. And then balancing that with a potential Mexico headwind because I know you're shipping cans from there. I guess, how should we think about those puts and takes? Daniel Fisher: Yes. We'll get -- we're working through a number of plans at the moment that will -- on the Mexico piece, excuse me, that will help to clear kind of direction of flight on any supply chain changes that we need to do. That will be a transient movement in between '26 and '27. And then for Millersburg, you should say, I would contemplate $1.5 billion of improved volume in '27, somewhere in that range, which could be as much as 3%. And that's going to be unlocked from really a very tight portfolio in the western half of the U.S. in Texas, in Mexico, in the Southwest, as you know. And so we'll be able to step into some contracted volume into '27 and then properly supply our customers in the Northwest from the most efficient supply point. So you'll have a little bit of start-up costs in '26. You'll recover that and then you'll margin on top of that. So you'll see -- I think we'll return to record can profitability and improved can profitability in '27, even off of what we have today. Operator: Our next question comes from the line of Michael Roxland with Truist. Niccolo Piccini: This is Nico Piccini on for Mike. I just wanted to dial in kind of on 4Q and maybe dig deeper into the volume trends you're seeing or expecting by category in North America? And then any commentary on promotional activity? And if you can give a read on October month -- sorry, October and then November month-to-date volumes. Daniel Fisher: Sure. So in 3Q, I think everyone on this call probably receives the scanner data, we do as well. So I won't spend time going through the category-specific data. But what we see in our customers across categories continue to promote and lean on multipack value and the cans are winning against other substrates in that environment. And I would say for the balance of the year, please refer back to the script, but we expect at a global level to be above the 2% to 3% growth rate. And by region, North America will be above the 1% to 3%. So you can kind of reverse engineer the fourth quarter. EMEA has the possibility to be at the top end of its 3% to 5%. So we're expecting that top end. And then the range in South America will be in that 4% to 6% long-term range. So you can reverse engineer in that fourth quarter. But October, it's in line with our expectations at this point. There were some price increases that were taken by our customers in October. They were also offset with some traditional promotional activity in terms of buy 2, get 1 free. So the blended price is not representative of the full price that was taken on the retail shelves. And I think that somewhat insulated us. And then for Europe and for North America historically, it's -- December is kind of where the plus and minus is. So we get through football season in football season in North America. We get through football season in Europe before they take a break. And then it's about, as they describe it in the U.K., the silly season and then around the holidays and then how the Santa cans perform and things of that nature. But what we're hearing from our customers at this point and what we're seeing in October, we're encouraged that we'll land the year in line with our current expectations. Niccolo Piccini: Got it. And then just one quick follow-up for me. As you've owned Florida Can and brought that production there up, have you been able to unlock any additional capacity at that plant specifically? Daniel Fisher: Yes. And we're needing it to manage through some of the tariff supply chain challenges, but that plant is performing in line with our expectations. And next year, we'll be stepping into even more volume and unlocking even more opportunities there. So that's been a really good deal for us thus far. Operator: Our next question comes from the line of Anthony Pettinari with... Anthony Pettinari: Looking to 2026, understanding you're not giving like precise guidance, but are there any kind of directional about CapEx? And any kind of additional color on the Oregon plant? And I think the North Carolina plant, which I don't know if you broke ground on, but there were some new stories about that maybe in December. Any details there? Daniel Fisher: Yes. Great. I'll let Dan comment on early indications of CapEx. But for the Oregon plant, still on time to come up in the second half of the year. So we're encouraged about that progress, and that will unlock a much more efficient supply chain. Obviously, you got to hire the people and stand up the facility. And so there's traditional start-up costs, but that bridges to a really healthy 2027 for us on a number of fronts. Concord is something that we had a ribbon-cutting ceremony with our -- one of our large strategic customers, but that's a way out in terms of actually capital in the ground and potential start-up. And that will ebb and flow with what's happening in the market. We're not the gating factor for being able to run additional production for them. We've got opportunities to do short-term smaller investments. But if they continue to grow at the rate they have, we'll be very excited to put that -- put a shovel in the ground and build that facility. So those are our plans right now for that. Daniel Rabbitt: Yes. And this is the other, Dan. A little more about the CapEx. With this year and last year being below CapEx, below the depreciation levels, it's still real early for us to be able to call next year, but we'd be guiding you a little more in line with depreciation or even slightly above, thinking about depreciation as a long-term average for our CapEx. But take it as its early days on our budget for next year. Anthony Pettinari: Okay. That's very helpful. A follow-up on North America. I think last quarter, you talked about $1 million operating cost headwind, and I think that was [indiscernible] can tariffs, maybe mix was a part of that. Did that repeat or step down in 3Q? Or is that kind of over with? Or I'm just curious how that operating cost sort of headwind maybe 2Q to 3Q, maybe to 4Q. Daniel Fisher: Yes. You should assume that we're continuing to manage through like-for-like inefficiencies from tariffs, but we're past the inefficiencies in terms of the suddenness of the volume. The tariffs are still ongoing, and we're managing through those. And more to come on that as we evaluate long-term supply chain dynamics and what's the best and optimal footprint for us. Operator: Our next question comes from the line of Phil Ng with Jefferies. Philip Ng: One more question on North America. Great to see volume has been strong and mix has been a modest drag just as you optimize that portfolio. When we think about '26, are you going to be in a pretty good spot, Dan, where mix is more neutral as we think about that going forward? And then some of the cost headwinds and inefficiencies that have weighed on operating leverage in North America. Should we see -- should we expect that to get back to more normal next year or still going to be kind of a work in progress? Daniel Fisher: A much smaller work in progress relative to some of the mix shift. We will have the start-up of the facility in -- sorry, Oregon. I was back to Ohio. It -- didn't have my readers, I'm reading the OH versus the OR. And then -- yes, let's see what we need to do as it relates to managing the underlying inefficiencies from the tariffs that we've been dealing with this year. '27 will be -- anything that has to be managed will be transient in '26, including the start-up of the facility and how we deal with ongoing underlying tariff impacts. And so we're really doing all the right things and setting ourselves up for a really nice short- and medium-term outlook. Philip Ng: Yes. On that note, Dan, I mean, it sounds like you won business in '27, '28 in North America, which is great. And you commented on potentially record can -- profitability per can for '27, which is exciting. Are most of those levers more on the cost and efficiency side? Or we should expect perhaps a better pricing environment just given how supply demand and just volumes have actually inflected pretty nicely in the last 12 months? Daniel Fisher: Yes. The market is tight, Phil. I think you're right. You should see an elongated improvement in underlying economics of the business that I think the industry will benefit from. And for us, in particular, the things that we've been able to manage via the operating model changes, the operating earnings construction, the inefficiencies of just a better performing manufacturing environment. And we're kind of early days even with AI technology deploying, and there's a number of applications, both commercially with AI and secondarily within supply chain and in our plants and operating our plants more efficiently through technology. So there's room for margin improvement, and it doesn't have to come on the backs of our customers. It can just come through improved performance. And I'm encouraged about that. Yes. Philip Ng: And just to sneak one in for the other, Dan. How should we think about capital deployment when we think about 2026? Obviously, you guys have done a phenomenal job in returning cash back to shareholders. Is that going to be the focus still? Or could M&A be an opportunity, at least there's some chatter about Europe was the market you guys are at least taking a look at. So kind of help us think through medium to long term, how you going to deploy that excess cash? Daniel Rabbitt: Yes. I think notably, you're going to see the -- on the share repurchase, not to be at the same levels because through this year, we will have bought back over $3 billion worth of shares. That's a path to being private, if you think about it. So we'll moderate back into probably some of our historical averages, which you might have seen in the past. That's still being worked out on exact numbers. But we're going to continue to carry a conservative balance sheet, and we're going to be wise on how we spend the capital. So really this is -- this is really how we've always managed the business, looking at those 3 levers and trying to do the right thing to get the returns -- the right return for our shareholders. Daniel Fisher: And Phil, it's a -- I would say it's a yes and on those 2 questions. So stay tuned. Operator: Our next question comes from the line of Jeff Zekauskas with JPMorgan. Jeffrey Zekauskas: Your inventories year-over-year are up around $500 million. I take it that's higher aluminum costs. Should your inventories continue to rise into the fourth quarter as aluminum values have lifted? Daniel Fisher: It's a combination of both. Great question. As you know, we didn't have the right inventory mix in the third quarter last year, specifically in South America in terms of unit volume and days, I think we've added a few days to make sure that we're fit for purpose of what our customers need. We've had a couple of customers even within our portfolio that are really outpacing what they expected at the beginning of the year, have had some really good market trends. So we want to make sure we're ready for that and managing that more appropriately. I'd say the 2 to 3 days is a better reflection of a healthy level of inventory. And then your other question is probably 50%, 60% is the increased aluminum value and aluminum costs. So I'd say 2/3, 1/3, but that's how I would construct it. Daniel Rabbitt: And I think we might add that this is some terrific volume growth, too, that we've come into, especially here in the United States, too, that has a role in this, too. Jeffrey Zekauskas: Also in the -- in your financials, it said that you purchased an investment linked to the common stock of ORG Technology. You bought -- you have a $47 million investment. What is ORG Technology? And why do you own it? And what exactly do you own? Daniel Rabbitt: Yes. You're referring to one of the notes in the release. And ORG Technology is the party who just acquired the controlling stake from our Saudi Arabian joint beverage can joint venture. And we have a long history and a good strategic relationship with them that dates back to the year 2018 when they bought our beverage can business and probably not too many people were at that earnings call, but we had, at that time, announced that we would be putting some investment into their company. They are the largest beverage can producer in China, and they are traded publicly. So it's a small stake in their public company for an important strategic relationship for us. Daniel Fisher: And Jeff, I think you would anticipate that there's a number of strategic elements to that investment. So more to come on that. Operator: Our next question comes from the line of Chris Parkinson with Wolfe Research. Christopher Parkinson: You mentioned in the last calls -- -- you mentioned a few times in the last 2 earnings calls just about mix. And I understand there are a lot of moving parts. I mean there's big beer versus craft beer. There's new CSD contracts. There're obviously some logistical things in terms of a large energy customer. But what -- approximately what quarter in 2026 do you think that's roughly going to normalize in terms of improving the Street's ability to better project volume versus operating leverage in your NCA business? Daniel Fisher: It will be much cleaner in '27 when we have a little bit more capacity. So capacity is one component of the difficulty to predict leverage fall through. The second one is just the trend -- the shift into higher growth customers, higher growth categories. And we're through 80% of that at this point for the next 3 years. So not a great deal of additional change in terms of our mix. But the navigating an incredibly tight, I think we'll be at 99% asset utilization next year. So how you're delivering on spikes and declines of volume line by line, SKU by SKU, that's going to be difficult for us to manage the traditional flow-through. I think what you're seeing counter to that just in a corollary is we put in excess capacity, growing into a growing market in Europe, much easier to flow through operational leverage at a more traditional rate when you've got that and you're not having to manage things kind of hand to mouth. So looking forward to having a little bit more capacity in the right locations in 2027. Christopher Parkinson: So that actually leads me to my second question on Europe. I don't know if we've explicitly hit this on the call, but growing into a growing market, I mean what's your kind of latest and greatest assessment based on what you're hearing from your customers in terms of the outlook for '27, '28 in terms of the need or perhaps it's already accounted for additional supply capacity in Europe in particular? Daniel Fisher: Yes. Europe is -- and I think you're hearing it from a lot of our competitors as well and our customers. For the can, it's a land of opportunity. And it is because it still has heavy glass substrate composition. And glass has got a really bad carbon footprint. And so there's investments away from glass. The cans preferred. Europe is not Europe, obviously, it's not homogenous. So depending on what the markets are, will depend on what the can size is, depending on is it a vacation spot like Southern Europe is, which is more seasonal. I think all of these factors weigh into what's the right capacity and where. And obviously, it's a much more discerning investment in that market for all of us given the labor laws, the Works Council and the challenge to garner environmental permitting, et cetera. So it's a -- if you endeavor to build there, it's much more difficult, much more specific, much more thoughtful approach that you have to take in those markets. And it's -- I'm very encouraged about the capital we've deployed there and the benefits we've gotten. And as we continue to do that, it's -- you have to be methodical about it for sure. Operator: Our next question comes from the line of Edlain Rodriguez with Mizuho. Edlain Rodriguez: Dan, a quick one for you. I mean you've addressed most of the key issues. So one quick one here. As you look at all the puts and takes in the different regions and so forth, like what worries you the most. Like what do you see as under your control? And what do you see is like things you cannot control? Yes, like what worries you the most as you get into the next year and year after that. Daniel Fisher: Little worries me at this point. I say this with the greatest of respect for the team that I am managing and working with. We have hit a number of outsized challenges here over the last 3 or 4 years that really no one in our industry has had to deal with. No one had to deal with Russia. No one had to deal with the marketing issue in the light beer category. No one had a business in Argentina. So the team has masterfully gone through that, and we've stood up a new operating model and not to mention what's happened here recently with the trade challenges. But certainly, 5, 80-year-olds controlling the majority of the largest economies in the world and what they want to do tomorrow, that's -- I can't spend a whole lot of time deliberating that and what the what-ifs are. But trusting and leaning in on our team, making sure that they have the energy, and they believe we're winning and that we have a winning formula. That's where I'm spending the most of my time. But I appreciate the question. Edlain Rodriguez: No. So that says. So as you look at your stock price kind of been under pressure. So when you look at capital allocation, are you looking like in terms of share buyback more opportunistically or trying to be more aggressive? Like what are you thinking there in terms of the disconnect between what you think you can deliver and what the stock is reflecting? Daniel Fisher: Well, we think we're very cheap. I think we believe that looking at our 5-year outlook, looking at our plans, looking at the historical valuation of this company, looking at how we're performing and winning in virtually every single capacity. So we're -- I'd say we're not -- we're opportunistic in the sense that we think we're cheap, but we're going to be very deliberate in returning value to shareholders. When we're at our best, we return value to our shareholders in a consistent manner. And as long as I see a really positive and constructive outlook, we'll continue to keep the foot on the gas in terms of the share buyback. Operator: Our next question comes from the line of Arun Viswanathan with RBC. Arun Viswanathan: Congrats on a strong quarter here and outlook. So I guess my first question, maybe I could just ask about the categories. So in North America this year, I think we're categorized or characterized by a very strong energy market, somewhat off of easy comps, but also, I think the consumer has pivoted that way to get maybe caffeine at a lower rate than coffee. But maybe some other dynamics playing in there. Do you see energy continuing to grow next year at a similar pace on tougher comps? And similarly, I guess, beer was relatively weak. However, you've managed through it with your very strong CSD position. So maybe you can just comment on how the categories look to you as you -- you've already said some new contracts up to '27, '28. But in '26, do you expect continued low single-digit growth? And maybe you can just provide some thoughts by category. Daniel Fisher: Yes. I think your characterization of the categories is right. I think the other thing that is -- needs to be impressed upon, I think, the broader audience is there are very aggressive innovations happening now in a number of areas that would be a little bit more challenging to define, but health and wellness is certainly promoting. I think there's protein going into everything these days. So I think that market is untapped. But we're connected to a lot of folks that we think are going to win disproportionately moving forward, and they're going to be in cans. But the non-alc 52 weeks, it's grown 4.8%. Alcohol has declined at 2.5%. We have plans to help everyone win in their categories in their preferred brand. There's a lot of can innovation happening. So all of that's going to be required to help all of our customers win. And then there's a lot of disruption that's coming in terms of innovation that we're excited about. So folks that are beverage companies are going to figure it out. And that's where we've also been repositioning some of our portfolio to make sure that we're winning disproportionately on favored mix and winning with the winners. So '26 is what your question, '26 for us is we're very, very tight. And we've bridged higher growth into the contract construction into '27 and beyond to make sure that we can stand up a facility in the Northwest in Oregon. And so we'll grow in line with what we believe the market, at least the low end of the market. And then we'll -- you'll see fundamental step change where we'll outpace the market in '27, '28 and beyond potentially. Arun Viswanathan: Great. And so I guess what I'm hearing is the main issues that you're contemplating are just around complexity and maybe execution. And would there be any issues on metal supply that we should consider, maybe whether it's logistics and getting metal in the right places or imports or supply chain? Or have you already addressed those as well? Daniel Fisher: Yes. Overwhelmingly, we've addressed those. There was some media coverage on one of our suppliers that I believe supplies 8% of the can sheet in the North American market. They're overwhelming automotive supply base. So that was something that was managed very effectively. Yes, we continue to not have enough aluminum in the U.S., processed aluminum, aluminum can sheet, but that's something we've been dealing with for multiple years now. And 232 hasn't presented much more in terms of supply chain challenges. And then we have both Novelis and SDI that's going to be standing up a new facility here in the next few years. So medium, long term, we're in great shape. Short term, we're all navigating kind of disillusionment of NAFTA supply chain, but we're -- the team is doing a great job. And we may have to do some things in our footprint to navigate much more efficiently, but you're talking about low capital throws and just optimizing what's in front of you. We do that all the time, but this one would be directly connected to the tariff scenarios. Daniel Rabbitt: For metal, we feel pretty good, though, where we are. Arun Viswanathan: And apologies if I missed this, but did you call out any special cash items for next year? I know CapEx you addressed, but was there anything on working capital or cash tax or minority interest or anything else that would drag cash flow? Or any thoughts on what your conversion from EBITDA or net income would be? Daniel Rabbitt: No. We really have nothing to report right now at this time. But I think we think the trends should continue into next year for the most part. Operator: Our final question comes from the line of Josh Spector with UBS. Joshua Spector: Just first, a quick follow-up. Just on the Novelis outage and the aluminum supply. Did that have any impact on you guys in 3Q or 4Q volumes or cost expectations? Daniel Fisher: No, it didn't. Joshua Spector: That is clear enough. Secondly, I just wanted to ask more broadly on consumer elasticities here as you're thinking about inflation for carbonated soft drinks and beer, do you have any latest view around kind of what the sensitivity would be when consumers start to see the impact of higher prices next year or potentially the risk of? Daniel Fisher: Yes. I'm actually more encouraged. Then I think the press clippings are -- just from this standpoint, we've been talking about a weekend consumer for 3 years. I mean, it's been -- grocery baskets have been getting smaller for 3 years. So this is nothing new to what we've been dealing with and what our customers have been dealing with. And if you look at the most recent -- what's different, and I think this is why I'm encouraged, when you look at what people are saying they're going to spend their money on, they're going to spend their money on food and beverages. They're not going to travel. They're not going to buy a large capital spend. It's all geared toward the things that we make. So the concentration, the effort and the dollars that are being spent in people's budgets and in their mental framework is going to us, whereas the last 2 to 3 years, we were still competing with vacations and other things, but that's not what we're competing with now. So I think that would signal to you that the pricing has clicked into a place where they have to focus on putting food on the table above everything else, and that's usually a good spot for us. Yes, I want to thank everybody for the questions today, and I hope you have a wonderful holiday season and look forward to reporting back out full year numbers and a deeper dive into '26 here in short order. Thank you. Operator: Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.

Operator: Greetings, and welcome to the Ball Corporation Second Quarter 202 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Brandon Potthoff, Head of Investor Relations. Thank you, sir. You may begin. Brandon Potthoff: Thank you, Christine. Good morning, everyone. This is Ball Corporation's conference call regarding the company's second quarter 2025 results. The information provided during this call will contain forward-looking statements. Actual results or outcomes may differ materially from those that may be expressed or implied. We assume no obligation to update any forward-looking statements made today. Some factors that could cause the results or outcomes to differ are described in the company's latest Form 10-K, our most recent earnings release and Form 8-K and in other company SEC filings as well as company news releases. If you do not already have our earnings release, it is available on our website at ball.com. Information regarding the use of non-GAAP financial measures may also be found in the notes section of today's earnings release. In addition, the release includes a summary of noncomparable items as well as a reconciliation of comparable net earnings and diluted earnings per share calculations. References to net sales and comparable operating earnings in today's release and call do not include the company's former aerospace business. Prior to -- prior year-to-date net earnings attributable to the corporation and comparable net earnings do include the performance of the company's former aerospace business through the sale date of February 16, 2024. I would now like to turn the call over to our CEO, Dan Fisher. Daniel William Fisher: Thank you, Brandon. Today, I'm joined on our call by Dan Rabbitt, Senior Vice President and Interim CFO. I will provide some brief introductory remarks and discuss second quarter financial performance. Dan will touch on key metrics for 2025, and then we will finish up with closing comments and Q&A. Before we move on, I'd like to extend my sincere appreciation to Dan for stepping in as Interim Chief Financial Officer. Dan has served as our Senior Vice President of Corporate Planning and Development since 2016 and has successfully led more than 25 strategic transactions from acquisitions and joint ventures to investments and divestitures. He also previously led our aerosol business as Vice President and General Manager. His deep institutional knowledge and proven deal-making expertise have brought immediate leadership and continuity to our finance organization. In just over 1 month since assuming the role, Dan has ensured we're on track with our financial discipline, supporting both our capital allocation targets and partnered closely across the business. Dan, thank you for your steady leadership and dedication during this important time. Turning to business performance. We delivered strong second quarter results and returned $1.13 billion to shareholders via share repurchases and dividends through today's call. This performance reemphasizes our opportunity to deliver record adjusted free cash flow and comparable diluted earnings per share in 2025. Aluminum packaging is outperforming other substrates across the globe, demonstrating the resilient and defensive nature of our global business. We continue to monitor the ongoing uncertainties related to tariffs and consumer pressures, particularly in the U.S. and we are confident in our ability to proactively manage these challenges and sustain our positive momentum throughout the year to deliver 12% to 15% comparable diluted EPS growth. 2025 second quarter comparable diluted earnings per share was $0.90 versus $0.74 in the second quarter of 2024, an increase of 22%. Second quarter comparable net earnings of $249 million were driven by higher volume and cost management initiatives, partially offset by higher interest expense and lower interest income. In North and Central America, stronger-than-expected volume performance was not enough to offset product mix and cost to serve headwinds. Our team executed well, successfully serving higher- than-expected demand, managing the impacts of the Section 232 tariffs and mitigating risks despite a volatile environment. Volume growth was largely driven by strength in energy drinks and nonalcoholic beverages. We remain attentive to the ongoing geopolitical landscape and tariff developments and are actively managing these dynamics. In EMEA, second quarter segment volume remained robust, and segment comparable operating earnings increased 14%. Demand trends continue to be favorable, strengthening our confidence in achieving significant year-over-year comparable operating earnings growth in 2025, driven by sustained volume growth and ongoing operational efficiency. In South America, segment comparable operating earnings increased 38%, supported by strong volume performance in Argentina and Chile. While the Brazilian market performed below our initial expectations, we expect to return to growth in the second half of the year. Our regional performance culminated in Ball's global beverage can shipments being up 4.3% year-over-year in the second quarter of 2025. We delivered a strong first half of 2025, positioning us well for the rest of the year. We recognize there remains important work ahead to achieve our full year objectives. Our teams are committed to carefully navigating ongoing uncertainties and leveraging the resilience and strength of our global portfolio. We're laser-focused on our updated goal of delivering 12% to 15% comparable diluted EPS growth for the year. And while mindful of the challenges, we have confidence in our team's proven ability to execute effectively and deliver meaningful value to shareholders. After a strong first half, we now anticipate 2025 global volume growth to be above the long-term 2% to 3% range and expect all of our businesses to perform in line with or ahead of our long-term targets in 2025. This reflects the durability of underlying global demand, the strength of our customer relationships in addition to the operational consistency of our teams across markets. In EMEA, we continue to expect mid-single-digit volume growth in 2025 as the competitive advantages of aluminum packaging and low can penetration rates continue to drive share gains across the region. In South America, recovery in Argentina and Chile, coupled with anticipated growth in Brazil and Paraguay is expected to drive volume above our 4% to 6% long-term range in 2025. In our North American business, higher-than-expected volume growth across nonalcoholic categories, especially energy drinks, gives us confidence that we will see volume grow near the top end of our 1% to 3% long-term range in 2025. We remain confident in our ability to deliver volume growth in line with or slightly above the market in 2025. We believe the defensive nature of our portfolio, combined with our strong customer alignment positions us well to navigate potential economic uncertainty. With that, I will turn it over to Dan to talk about key metrics for 2025. Daniel J. Rabbitt: Thank you, Dan, and it's a pleasure to be on this call with you today. We anticipate year-end 2025 net debt to comparable EBITDA to be around 2.75x, and we will repurchase at least $1.3 billion of shares in 2025. Through today's call, we have already purchased $1 billion shares year-to-date, 2025 CapEx is expected to be slightly below the D&A in the range of $600 million. We anticipate being able to deliver on our target of comparable net earnings equal to adjusted free cash flow in 2025. Relative to the estimated tax payments due on the aerospace sale, we expect the remaining portion to be paid in the second half of 2025. Our 2025 full year effective tax rate on comparable earnings is expected to be slightly above 22%, largely driven by lower year- over-year tax credits. Full year 2025 interest expense is expected to be in the range of $300 million and full year 2025 reported adjusted corporate undistributed costs recorded in other nonreportable are expected to be in the range of $150 million. And last week, Ball's Board declared its quarterly cash dividend. As we look ahead to the second half of 2025, we remain committed to operational excellence, disciplined cost control and enhancing productivity across our global footprint. We continue to actively monitor developments in emerging markets and broader geopolitical conditions, staying agile and responsive in a dynamic environment. Our resilient defensive business model, along with the proactive measures we've implemented to reinforce our balance sheet positions us favorably against external volatility. With a solid financial foundation and a clear runway ahead, we are confident in executing initiatives designed to deliver sustainable, high-quality results and drive consistent long-term value creation for the shareholders. And with that, I'm turning it back to Dan Fisher. Daniel William Fisher: Thanks, Dan. Our business continues to perform well, driven by robust demand across our global network. Tight capacity conditions reinforce the critical importance of executing at the highest level operationally, ensuring we meet customer expectations reliably and efficiently. Thanks to the agility and dedication of our teams, we remain firmly on track to deliver on our financial objectives for the year, including achieving 12% to 15% comparable diluted EPS growth, generating adjusted free cash flow aligned with comparable net earnings and returning significant capital to shareholders through substantial share repurchases and dividends. While external volatility persists, particularly relating to geopolitical events and market conditions, the resilience of our business model positions us strongly to manage through uncertainty. Our proactive steps to optimize our footprint, secure long-term contracts and maintain disciplined financial management further bolster our ability to deliver consistent high-quality performance. Creating long-term shareholder value remains our top priority. As we continue to execute effectively, leverage our strengths in innovative and sustainable aluminum packaging solutions and manage our operations with rigor, we are confident in our ability to generate meaningful and compounding returns for shareholders through 2025 and beyond. We appreciate the work being done across the organization and extend our well wishes to our employees, customers, suppliers, stakeholders and everyone listening today. Thank you. And with that, Christine, we are ready for questions. Operator: [Operator Instructions] Our first question comes from the line of Ghansham Panjabi with Baird. Ghansham Panjabi: Dan, could you just give us a bit more color on what's driving the outperformance in the nonalcohol categories for the beverage North America and Central America segment, especially during the second quarter? And given the strength there and your obvious positive view for the back half of the year for the segment as well, can you just give us more context as to why margins were down 140 basis points for that segment? I know you called out price mix and higher costs. Just give us some detail there. Daniel William Fisher: Sure, Ghansham. Yes, I think the -- coming into the year, we did think that there would be more aggressive nature relative to the energy drink customers. They got out of the gate strong. One of our large strategic partners is growing nearly 20%. So that was unanticipated. And so I'm encouraged. There's some innovation in that category, probably more so than any other category, flavor proliferations and the right can mix, the right promotional activity, advertising. So I think they figured out a recipe that's winning right now. I think the other thing in the nonalcohol category, in particular, is we're seeing a lot of multipack purchases that are connected to purchasing on promotional activity. The promotional activity is not higher than it has been in the last couple of years, but people are buying connected to that. So that's certainly good for the can. We continue to believe that those tailwinds will persist for the back half of the year. Obviously, beer is softer than we anticipated. Some of our customers in that category, some brands are doing a little better than the aggregate. So I think some of our mix has certainly benefited there. And then just in terms of maybe transitioning to the margin piece, certainly some inefficiencies when you're growing that fast, unanticipated in the delivery of that. Yes, we highlighted mix, less beer, more non-alc is lower margin for us. So we'll take the volume growth, and I think we just need to figure out how to more effectively and efficiently deliver that. The spike in the one customer in particular, growing nearly 20%, created some pretty inefficient service model and delivery schedules for us. And then there's a little bit of mix related to tariffs, a little bit of a drag on that. So we'll see that kind of level off here quarter-to- quarter, but that didn't help. So I think somewhere in the neighborhood of $10 million worth of -- all of that was a drag and just our inability to deliver in sequence on time from some of our faster-growing categories and then a bit of a drag on the tariff. Ghansham Panjabi: Okay. Very helpful. And then for my second question, you're on track for a new high watermark on EPS [indiscernible] was 2021. It's been an oscillating journey since then. As I look at the segment distribution, North America is at a high watermark in terms of earnings -- margins, I should say, and I guess, earnings. What about Europe? I mean, Europe has had a good spurt in terms of growth. It's been very consistent. Is there any reason why Europe cannot benefit from a margin expansion standpoint to the same extent North America has relative to what you delivered in 2021? Daniel William Fisher: Yes, Ghansham, I would say I wouldn't expect margins to improve, but the operating leverage will be more consistent. You're already operating at pretty high margin. We lost -- if we're able to ever re-enter Russia, yes, that was -- those were tremendous margins there. But I think we're going to operate on a sustained mid-single-digit growth basis and flow through operational leverage consistent to that 2 in 1, probably more effectively and more efficiently than in any of the other regions. So I'm feeling really good about that. Operator: Our next question comes from the line of Stefan Diaz with Morgan Stanley. Stefan Diaz: I guess maybe just to begin, how have your conversations with customers sort of gone so far regarding their plans around tariffs, their hedging strategies? And have you started discussing 2026 and like potential impacts around increased prices and impact of that on like potential ordering patterns? Daniel William Fisher: Yes. I haven't -- it's a great question. I guess when we get closer to '26 and we see where exactly these things level off, I think those will become clearer. One of the things that's working to our advantage is, I think with the strapped end consumer, they need cans in their portfolio to push for volume. There's not a lot of prices that they continue to pass through. I think you're seeing it kind of across the board. And so I'm not worried about pricing and the dynamics that we saw a couple of years ago that really constrained our volume. The multipacks are being pushed. That's because end consumers are strapped, and the can is the vehicle for our customers to grow with. But I haven't had conversations with any of our customers relative to '26. I think everybody is spending time in Washington trying to fight for exclusions and things of that nature and just trying to figure out where the plane is going to land in terms of all the trade deals around the world. But it's a good question. We'll get back to you with probably some more color on the next call. Stefan Diaz: Great. That's really helpful. And then I just want to clarify some of the margin headwinds in North America in 2Q, all of that had to do with operational inefficiencies with the higher-than-expected growth, none of that was due to contractual pricing. So you don't really expect this to continue on until like the second half and into 2026, if that's correct? Daniel William Fisher: Yes, that's a great point. And think about this, it wouldn't necessarily be contractual pricing. But as you see us growing at a faster rate, the categories that, that growth allows for out of alcohol, it's lower margin. And so there's an element there. When we talk about mix, I guess you could talk about the portfolio thinking that that's price mix, but it's not contractual in nature in terms of [Audio Gap] going down. Operator: Does that complete your question? Stefan Diaz: Yes. Thank you so much. I'll turn it over. Operator: Our next question comes from the line of Philip Ng with Jefferies. Philip H. Ng: Dan, I guess one of your larger competitors talked about how North American demand has been strong and it's been stronger than you expected as well. And they're going to run pretty tight going into next year and they don't have much inventory. Curious to get what's your situation in terms of capacity and ability to service that demand and appreciating a lot to still discuss with your customers in 2026. Remind us how you are set up from a contract standpoint? Is there any movement there? And do you kind of hope to kind of at least grow in line with the market next year? Daniel William Fisher: Yes, great question. So we do have the new facility that's going to come online in the Northwest. So that will be helpful. So that part of the country for us is really tight. One thing that we're hoping to get a little bit more clarity to, Phil, is, I mean, we have used our Monterrey facility to kind of ship into North America. So if these tariffs persist at the levels, they are without some relief valves, and that actually creates even a tighter landscape in the Southwest and Texas in particular. So the reality is as we start to go through our plans and our strategic planning process that will be happening here over the next 6 to 8 months, what I expect is that we'll be running full out in all of our facilities, potentially carrying a little bit more inventory to balance that. I mean we can continue to grow. We did buy the asset in Florida that will help as a relief valve as well. But if we continue to grow at 5%, I think for the next 18, 24 months, we'll have to incrementally probably add a few lines here or there, do some speed up projects. But I think we're comfortable to spend in line or below D&A for our North America business for the next couple of years, still. The wildcard is just going to be, can we use those facilities in Mexico as relief valves as we historically have, right, for the last decade or so. Philip H. Ng: Okay. That's helpful. And then earnings is pretty... Daniel William Fisher: Yes, we'll grow in line or ahead of the market depending on somewhat the success of our customers. But right now, a couple of our large strategic partners have certainly got a winning recipe, and they believe that will continue here for the foreseeable future. Philip H. Ng: Okay. That's a great backdrop, running full out and customers winning. So that's great. Daniel William Fisher: Different than a year ago. Philip H. Ng: Indeed. From an earnings perspective, South America was pretty strong. So it's good to see that improvement. How is Argentina shaping up? And when you look at Brazil, a little softer to start the year, but you sounded pretty upbeat in the back half, certainly a lot of noise on trade flow, uncertainty on that front. So just give us some line of sight what gives you confidence that the back half would be better in Brazil as well. Daniel William Fisher: Yes. I think what happens in Brazil, so take Brazil, obviously, what we benefit -- we benefited from greatly in the second quarter is almost not making any money in Chile and Argentina and some of those places, and they're really nice mix for us. So that recovery contributed to sort of an easier comp, I would say, in the second quarter year-over-year. And then heading specifically outlining Brazil, I think some of our competitors even commented on this, like we're with -- we have a huge concentration with one customer. So as they go, we go. And typically, what happens is over a 12-month period, you more or less reflect the market. And if the market grows sort of in that 3%-ish range in Brazil for the year, that means our partner is going to have to grow at a little faster rate than that in the back half of the year. And they have plans to do that, and they've demonstrated that they do that pretty consistently. So that's the comfort, and that's the belief. We'll be with them here 2 weeks from now to get more clarity on that, but they're really confident that, that trend will continue and persist. And then everything else in and around Brazil is continuing to perform. It's always wait and see on Argentina, but I think the leadership down there has got them on the right trajectory. I think they have -- it will be important to see what happens relative to the crop performance down there, but everything seems to be largely on track in that economy. And as long as we're just incrementally growing and recovering at a steady clip, and it's not backsliding, we're going to be in good shape to deliver the back half of the year. Operator: Our next question comes from the line of George Staphos with Bank of America. George Leon Staphos: So in terms -- congrats on the quarter in terms of the progress. So the growth for North and Central America being at the top end of your range, which would be around 3% for the year. How much of that is predicated on what you're seeing right now in your customer mix and their strategies? And if some of your other customers start to do the same thing that the guys who are winning do, what would that mean for your volume growth? And if you could give us a little bit of color in terms of what you mean by connected promotion? And then I had a quick follow-on on aluminum. Daniel William Fisher: Yes. So when we look at the broad -- let me start with the latter part first because, yes, I should probably clarify this. There is the same amount of promotional activity happening just in terms of price changes and rev mix plans and buy one, get one frees, et cetera. But the concentration of purchases within those windows has accelerated by the end consumer. So it's not that there's more promotional activity. It's that the customers, clearly, the end consumer must be weakening and they're looking at those opportunities and buying multipacks at an accelerated rate versus the prior couple of years. So that's what's happening, and that's what's contributing to probably a little bit more volume growth than anyone anticipated in the first half of the year. Really, it would be -- to your first question, really, it would be in and around beer. I mean, is there going to be recovery. One of our customers, in particular, is struggling just because of the tariffs. So unless that relieves itself, that -- we're not anticipating greater performance than the 3% top end. And even with that, George, we'll be fine because we're underutilizing our Monterrey facility right now for that customer. So if that particular instance happens, we're good, right? We'll be able to ship. We'll be able to deliver even in a more efficient manner. If growth persists with a couple of our customers in the 15% to 20% range, we'll be living hand to mouth. But eventually, you'll get out of peak season and there'll be more efficient delivery patterns in the back half of the year. But right now, it's tight. We're living hand to mouth. I think we can deliver. We still have some room to grow in facilities specifically that are adjacent to breweries, right, where they've been underperforming. So if that category rebounds, that's not a difficult solve for us. It's if there's even more activity in some of our strategic partners in the non-alc or the CSD space, that will be -- that will create more inefficient patterns. And then we'll just have to get out ahead of it for next year and probably carry a little bit more inventory if this is the direction of flight that we're going to see growth at this rate for a persistent manner. George Leon Staphos: I appreciate that review. Second question, to the extent that you can estimate and feel comfortable talking about it live, Mike, on a call, where do you think the -- your average large customer, however you want to define that, their embedded aluminum price is relative to sort of spot market, if we look at Midwest premium. And when would we expect timewise that to basically converge. So basically, the question on the question, are customers using cans more now because they're hedged? And when does that end? It doesn't sound like you're too worried about that because of where the consumer is for '26, but some thoughts there, and I'll turn it over. Daniel William Fisher: Yes, you will start to see that here in the second half of the year and into next year. I think it's about a quarter for a 12-pack. So how impactful is that in the price sensitivity curve, I think, is the -- it's -- cans are clearly cheaper than PET outside of the 2-liter PET, cheaper than glass still. So if that quarter for a 12-pack creates different buying behaviors, then I think you start to see -- and we saw the beginnings of that. You'll see the 24 packs and the 30 packs and the end consumer being far more conscious on that buy pattern, which then changes the velocity pattern, which changes the lumpiness, right, of your business. So that, to me, feels more about what's going to happen than any kind of dramatic shift because of hedges, et cetera. George Leon Staphos: Understood. It will mean more operational planning on your side, but we'll turnover and thanks for the color. Daniel William Fisher: Yes, yes. Correct. Correct. Yes. Operator: Our next question comes from the line of Anthony Pettinari with Citi. Anthony James Pettinari: Dan, earlier you -- in talking about sort of North American profitability, I think you called out $10 million in maybe inefficiencies, or I don't know exactly the language, but... Daniel William Fisher: Correct. Anthony James Pettinari: Would tariffs a smaller part of that $10 million? Or was it separate? And then does that go down in 3Q? And then just a related question, did Florida Can kind of weigh on profitability meaningfully in 2Q? Or just how did that asset perform versus expectations? Daniel William Fisher: Yes. Thanks for the question. Florida Can probably think in the neighborhood of like $1 million to $2 million of -- and we'll start to get to kind of breakeven by Q4, and then it will be incremental profit for us in '26. The tariffs, probably $2 million to $3 million of that $10 million impact. So not a lot. Anthony James Pettinari: Yes. That's helpful. And then kind of maybe a broader question. In terms of the impact of One Big Beautiful Bill on your business and thinking maybe especially about bonus depreciations, any kind of broad thoughts about how that could impact you this year, next year? Daniel J. Rabbitt: Thank you. The other Dan will take this one. The short answer is we don't think it's going to change the trajectory much of the effective growth -- tax rate, excuse me. And largely, the benefits are going to come in through the acceleration of depreciation and a little bit of ability to deduct more but because of the EBITDA limit versus the operating earnings limit. But for the most part, we're still early in really figuring it out, but I don't think it's going to be much of a change for us. Operator: Our next question comes from the line of Edlain Rodriguez with Mizuho. Edlain S. Rodriguez: I mean, Dan, you've heard some beverage companies talking about the impact of immigration enforcement on certain customers. Like are you prepping for a potential demand slowdown in certain markets? Or is there a disconnect between what's being said and what you're seeing out there from your customers? Daniel William Fisher: Yes, this is a very difficult analysis. So I'll give you the optimistic viewpoint on this challenged issue, social issue. So there's more consumption happening online, multipack and in grocery channel, multipack, less at the C-store channel. So that has a real impact for some of our customers that sell and have an overwhelming profit pool within the C-store channel because folks are concerned that ICE is going to be there. So it could be a benefit for the can. So it's actually the opposite. I'm not thinking about a slowdown, I'm thinking about a continuance of a volume lift with the multipack purchasing, the at-home and the grocery channel. Over a longer period of time, absent immigration, our economy doesn't work without immigration in some balanced form. But for right now, I would gather there's probably a bit of a benefit absent a headwind in the way you characterize that. Edlain S. Rodriguez: Okay. Got it. One quick one on Europe. I mean, again, continues to perform well. Can you talk about how balanced supply/demand is in that market and whether some new supply might be needed to meet the growing demand that we're seeing there? Daniel William Fisher: Yes. It's a land of opportunity. And I think all of our competitors are saying the same thing because of the under penetration in cans, the carbon footprint of glass that we're capitalizing on. We put in a few big boxes, big facilities, and we're continuing to build those out. So there's incremental capacity that's being added to step into exactly what you described, the sustained growth at this mid-single- digit level, which will have to be supported. We're starting to hear some announcements from other competitors that they're adding some capacity line by line. But if we continue to grow at the rate we're growing, we're going to have to move some of our projects probably to the left and do things by next year, '27, '28. All of that will still be within our capital envelope that we've outlined. But yes, there's going to be a need for capacity adds if the market continues to grow mid-single digits. Operator: Our next question comes from the line of Josh Spector with UBS. Anojja Aditi Shah: It's Anojja Shah sitting in for Josh. We kind of touched on this a bit, and I know cans have performed well historically in recessions as consumers tend to trade down, eat more at home. But what's the outlook if inflation goes up? Because we still don't know the full tariff impact yet. How have cans performed during high inflation times? What are the puts and takes we should be thinking about? Daniel William Fisher: Well, I think we did not do well the last couple of years during that inflationary pressure. So it's a bit of a nuanced question. You're on to it. It's like we're recession-resistant, not inflation resistant. So when our customers need to take price to offset additional input costs, that's a direct volume headwind to us. So we saw that. But you're at a different point in time in the economy where either the end consumer, if they can't afford to pay for those higher input costs, then everybody is going to -- everybody -- our customers and us are going to struggle. And then that gets you back into the recessionary environment. And in that, what we're seeing exactly to your point, it's like there's going to be concentrated promotional activity and buying during that particular time. Our customers have fixed costs. We have fixed costs. So I think there's going to have to be a balance here. But yes, we're -- with hamburger at $10 a pound, that's not a good environment for a long. And we're benefiting from it now, but no one is going to be benefiting from that particular environment for a while if interest rates don't come down and things don't stabilize a bit. Good question. Operator: Our next question comes from the line of Chris Parkinson with Wolfe Research. Christopher S. Parkinson: So Dan, when you take a step back and assess where you've been across your geographic portfolio and where you want to be, what have been the two best surprises? What have been the two worst just given all the puts and takes that we've seen, perhaps positive in Europe, a little bit more mixed in the U.S. Just where do you kind of stand as you -- as we're entering the second half of '25 into 2026? Daniel William Fisher: Yes. For this year, in particular, I think, is the question. Is that correct? Christopher S. Parkinson: Yes. Daniel William Fisher: Yes, yes. No, I think Europe is mostly in line with where we expected. Our strategic partners are doing well. Like beer is not doing as well, and we have a higher customer concentration in CSD and energy, and those have really outperformed and kept us probably in line or a little ahead of the market. So that continues to be a good story. I think South America is a mixed bag. Brazil has underperformed. Some of the other countries have overperformed. I think that balances out as we move into the back half of the year because we have such a customer concentration with one particular player down there, and they will certainly not continue to lose share in the marketplace. They've demonstrated that historically. And then I think North America's beer is not as good as we anticipated, there are pockets of I think "American beer" is doing okay. It's not domestic anymore apparently. And I think the energy market has certainly outpaced what we anticipated. So that's kind of the backdrop. All in all, it's better, net better. And I think cans are winning. So that's a good part. I think we finally hit a bit more of a recessionary window, which the can has a better playbook for sustained performance in that. And so we're more bullish probably in the second half of the year than the balance of most packaging companies. Christopher S. Parkinson: Got it. And just if I may parlay that question into some of your some of your commentary at your Analyst Day, you spoke about 2% to 3% volume growth, the 2% op leverage and the 4% to 6% share count as I recall. And -- the Street is pretty much already there in terms of like 10%, 11% EPS growth. I mean, where would you be assessing on -- in terms of the volume? And you kind of hit on this for like one geography or two. But do you see yourself kind of trending towards the higher end of those ranges? Or like what would be the other puts and takes as we think about the algorithm you put out, I think, last June? Daniel William Fisher: Yes. Good question. So we're definitely at the higher end of that range. Some of this does have to do with your customer portfolio. And a lot of our customers are doing extraordinarily well right now. So we're going to eclipse the higher end of the range. We're also very cognizant in the last couple of years, we've been at repositioning a bit of our portfolio to categories. We were much heavier in beer. So we've repositioned a little bit of that. And so we're starting to see the tailwinds of that. We'll continue to see the tailwinds of that into '26 and '27. I'm not going to move off of the 2% to 3% right now because the world is certainly uncertain. But we're -- this year, we'll definitely be at the high end of that and over, and it's looking good for next year as well at this point. Operator: Our next question comes from the line of Jeff Zekauskas with JPMorgan. Jeffrey John Zekauskas: Can you talk about your rates of volume change in consumer soft drinks and beer in the different geographies and in the aggregate? Daniel William Fisher: Yes. So I think beer in South America is continuing to grow at a slower rate because of Brazil and the inflationary pressures there, but there's continued to be growth. The beer growth is flattish to slightly up in Europe, probably growing at a slower rate than it has historically. CSD and energy is growing at a faster rate than historically in that part of the world. I think there's more competition. There was an acquisition made of some of the Pepsi bottlers by a big brewer a year ago in Europe. And they're -- in the markets that they're competing against, Coke in particular, there's a little bit more competition, if you will. That's creating some favorable tailwinds. And then in North America, I've probably given you -- I've outlined that. There's a couple of brands that are doing a little better than we thought, but I think the tariffs on the one particular brand that has really driven the entire category to a little bit more of a balanced growth trajectory. They're certainly challenged, and they're one of our partners, and so we're challenged along with them. Jeffrey John Zekauskas: Okay. Great. And when you think about the profitability of the North and Central American beverages, should it jump because the incremental costs that you're feeling seem to be more transitory? Daniel William Fisher: Yes. With the exception of let's see how -- yes, it's a good question. The only question mark I have right now is, is volume going to continue at this rate? Where does it settle out? And then the tariffs because we've all been somewhat reliant on supply patterns to use those plants in Mexico to ship North. So if we can't do that anymore, I think there's probably a little bit of a fixed cost burden that's a drag on the supply chain landscape. We will be in a better spot once our plant in the Northwest comes up and is running, so I think the volume is great. The mix of where that volume is coming from, when it's in nonalcohol, it's a little bit less profitable because of the price point the end consumer consumes of. So for us, I think we really like the trajectory 18 months out on all of this when we have our new facility and things are operating in a more efficient normalized freight pattern. And let's hope that cooler heads prevail on some of the tariffs and things of that nature. So yes, I think the trajectory -- I'm optimistic. I don't know about the next 6 to 9 months in particular, but I think your point is valid. Operator: Our next question comes from the line of Arun Viswanathan with RBC. Arun Shankar Viswanathan: Just wanted to ask about the kind of the EBIT algorithm. I know that margins have been under pressure here. And so maybe you can just discuss your thoughts on returning that 2:1 kind of EBIT leverage on top line growth. And also, you mentioned so goes your exposure to one customer, so goes your exposure or your performance. So I guess when you think about that portfolio of customers that you have, how do you think about volumes evolving, I guess, in North America as you look out maybe over the next 6 to 12 months? Daniel William Fisher: Yes. The customer concentration that I talked about was South America in particular. we're feeling good about the trajectory of flight. We've done some repositioning of our portfolio to -- and you'll see that over the next 18 months as well. So we're moving to kind of less beer, candidly. We had probably over-indexed into beer. And so we're making that pivot and those are the categories and the brands and the areas that have a little bit more tailwind for the future. So we're encouraged about that. The EBIT algorithm, we have two things that were -- that we called out last year heading into this year that are non-repeats, and that's the interest income for carrying the cash from the aerospace transaction. So that's kind of mid-$40 million impact. And then for Q3 last year, we had nearly $20 million of insurance proceeds that came through our PHC business. So absent that, yes, we're right in the 2:1 algorithm. Those -- we still may be able to hit that and offset that $60 million, but that's -- so we're right in spitting this into the 2:1 algorithm. And when we talk about it, we talk about its enterprise wide. So you'll have timing and shifts and we're running this more as a portfolio and as an enterprise as opposed to being laser-focused on the 2 in 1 in each region. Over time, the 2 in 1 in region is what we're shooting for and then managing our portfolio to ensure we're getting back value to shareholders in a more consistent manner by managing the portfolio is the thought process. Arun Shankar Viswanathan: Okay. And if I could just follow up on that, the category mix comment. So was that also -- was that North America based? And if so, maybe how do you see your nonalcoholic, alcoholic beverage exposure trending? Would you say that you were maybe 40% alcohol and that's trending down lower to the 30% range? Or maybe you could just frame that opportunity for us. Daniel William Fisher: I think you're largely there with that trajectory of flight. Moving from kind of 40% to 30% would be optimal over time. Yes, I think that's more of the -- I don't want to talk too much about our strategy, but that's -- at a high level, that's the thinking. Operator: Our next question comes from the line of Michael Roxland with Truist. Niccolo Andreas Piccini: This is Niccolo Piccini on for Mike. I apologize if this is repetitive. I was joining from another call. But in 4Q, I think you had mentioned that you had over like 85% of your 2026 volumes under contract. I was wondering if you could give us an update on where that stands currently and then where 2027 volumes are. Daniel William Fisher: Yes, '27 is still a bit early. I'd say 2026 for North America in particular, is just slightly north of 90%. And we have one contract that's fairly sizable that comes due in '27 for North America. So you're probably 75% in '27 that's under contract. So we've really done a nice job of future-proofing the business and kind of repositioning some mix and some category movement. And then one of our big partners, that contract comes due, but we're feeling good that we're going to land that in a good spot for '27 and beyond. Niccolo Andreas Piccini: Got it. And then just quickly on -- was there any manufacturing efficiency that's contributed in 2Q ahead of expectations? And how do you think about efficiency gains going forward? Daniel William Fisher: Yes. I think the plants are running well. We're about 18 months into our Ball business system. You saw nice improvement in South America. Our ability to kind of deliver this higher-than-expected growth in Europe is largely attributed to the plants running well. It was a bit choppy in North America, but largely because we weren't able to use Monterrey to its full extent in Mexico because of the tariffs and then just some acceleration in a couple of areas where we had to convert to different can sizes to keep pace with the growth. So in the short term, I'd say we underperformed in North America, but a little bit more stable outlook here, and then we will lift up. Our goal longer term was at, I think, at the Investor Day a year ago was to kind of flow through 50% of our gross savings. And then we're still on track. You'll see last year; we were able to benefit from a lot of the fixed cost savings from some of the plant and facility closures. We're navigating a lot of supply chain challenges because of the accelerated growth here in North America, a bit of the tariffs. We've been able to offset that and continue to keep our EPS guidance, if not raise it as we just did. So yes, I'm feeling good. It's really a long-term outlook. I start with safety and quality. Both of those are at world-class levels. So once I see those two metrics in good order, the rest generally follows. And it's awfully difficult in peak season to look at kind of where you are. But I think when we reflect back at the end of the year, we'll be able to point to some really nice performance in the plants across the globe. Christine, we'll take one more question. Operator: Our final question comes from the line of Richard Carlson with Wells Fargo. Richard Clayton Carlson: So most of our questions have been answered. Thank you for the detail so far. But I guess one thing we wanted to ask was about scrap metal pricing and how that has been impacting you. Daniel William Fisher: It's really negligible. Most of our contracts, especially on the tolling, that's controlled by our customer. We're keeping an eye on it, obviously, as tariffs increase, that scrap market is going to increase at some point as well. It already has a bit. And then the other thing is you already have such a high recycled content number, there's been a bit of pressure on that market already. So people have gone out and gone long in a number of areas, especially within our particular marketplace where we're so heavily dependent on that processed aluminum coil at higher recycled content. So we rely heavily on our supply base to help manage that. But it's a good question, something certainly we're keeping an eye out, but it hasn't had a negative impact. We're more concerned about -- candidly, we're more concerned about the demand side of tariffs in general writ large across the economy than we are about any kind of isolated metal market at this point. All right, Christine, with that, we'll look forward to talking with you all in 100 days or so. I hope the balance of your summer goes well. Operator: Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.

Operator: Greetings, and welcome to the Ball Corporation First Quarter 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions]. As reminder, this conference is being recorded. It is now my pleasure to introduce your host, Brandon Potthoff, Director of Investor Relations. Thank you, sir. You may begin. Brandon Potthoff: Thank you, Christine. Good morning, everyone. This is Ball Corporation's conference call regarding the company's first quarter 2025 results. The information provided during this call will contain forward-looking statements. Actual results or outcomes may differ materially from those that may be expressed or implied. We assume no obligation to update any forward-looking statements made today. Some factors that could cause the results or outcomes to differ are described in the company's latest Form 10-K, our most recent earnings release and Form 8-K and other company SEC filings as well as company news releases. If you do not already have the earnings release, it is available on our website at ball.com. Information regarding the use of non-GAAP financial measures may also be found in the notes section of today's earnings release. In addition, the release includes a summary of non-comparable items as well as a reconciliation comparable net earnings and diluted earnings per share calculations. References to net sales and comparable operating earnings in today's release and call do not include the company's former Aerospace business. Prior year-to-date net earnings attributable to the corporation and comparable net earnings do include the performance of the company's former Aerospace business through the sale date of February 16, 2024. I would now like to turn the call over to our CEO, Dan Fisher. Dan Fisher: Thank you, Brandon. Today, I'm joined on our call by Howard Yu, EVP and CFO. I will provide some brief introductory remarks. Howard will discuss first quarter financial performance and key metrics for 2025 and then we will finish it up with closing comments and Q&A. I want to take a minute and highlight the amazing work our employees and teams have done to give back to their communities. April was our global volunteer month at Ball and our employees volunteered more than 640 hours of their time across 11 countries, working to create a positive impact in the communities where we live and work. I want to thank all of our employees who devoted time in April to uplifting our communities. You truly represent our values of we care, we work and we win. Turning to business performance, we delivered strong first quarter results and returned $708 million to shareholders via share repurchases and dividend through today's call. This performance reemphasizes our opportunity to deliver record adjusted free cash flow and comparable diluted earnings per share in 2025. Aluminum packaging continues to outperform other substrates across the globe, demonstrating the resilient and defensive nature of our global business. While we remain mindful of ongoing uncertainties related to tariffs and consumer pressures, particularly in the U.S., we are confident in our ability to proactively manage these challenges and sustain our positive momentum throughout the year to deliver 11% to 14% comparable diluted EPS growth. In EMEA, First Quarter volume remained strong as our customers continued to move their package mix to aluminum cans. In South America, volume growth came in slightly ahead of our expectations driven by positive performance across each geography in which we operate. In North America, volume returned to growth despite a tough comp and economic pressure on the end consumer. Our regional performance culminated in Ball's global shipments being up 2.6% year over year in the first quarter of 2025. Looking to the rest of the year, our teams are focused on managing uncertainty, while leveraging the inherent resilient and defensiveness of our global portfolio. We remain laser focused on achieving our stated goal of 11% to 14% comparable diluted earnings per share growth in 2025 and are confident in our proven ability to execute through complexity and deliver value back to shareholders. We continue to anticipate global volume growth in the 2% to 3% range and expect all of our businesses to perform in line with or ahead of the targets outlined at our 2024 investor day. This reflects the strength of underlying global demand, the durability of our customer relationships, and the operational consistency of our teams across markets. In EMEA, we continue to expect mid-single digit volume growth in 2025. As the competitive advantage of aluminum packaging and low can penetration rates continue to drive share gains across the region. In South America, recovery in Argentina and Chile, coupled with anticipated growth in Brazil, is expected to drive volume growth above our 4% to 6% long-term range in 2025. In our North American business, higher than expected volume growth across non-alcoholic categories more than offset ongoing pressures in mass beer. We remain confident in our ability to deliver volume growth in line with or slightly above the market in 2025. While we are closely monitoring end consumer health, we believe the defensive nature of our portfolio combined with our strong customer alignment positions us well to navigate a potential economic slowdown. Lastly, on cups, during the first quarter, we announced the formation of Oasis Venture Holdings, a strategic partnership, which consists of the aluminum cup business, including its commercial, supply chain and manufacturing teams and the plant in Rome, Georgia. We are the minority partner and are excited about the long-term potential for the business under this new structure. With that, I'll turn it over to Howard to talk about first quarter 2025 results as well as key metrics for 2025. Howard Yu: Thank you, Dan. Starting with our results, 2025 first quarter comparable diluted earnings per share was $0.76 versus $0.68 in the first quarter of 2024, an increase of 12%. First quarter comparable net earnings of $216 million were driven by higher volumes, lower interest expense and cost management initiatives, which were able to nearly offset the earnings headwind from the sale of our Aerospace business and lower interest income. In North and Central America, stronger than expected volume performance drove 2% increase in comparable operating earnings on a challenging comp. Our team executed exceptionally well, successfully improving operational efficiencies, effectively managing the impact of the 232 tariffs and mitigating risk despite a volatile environment. Volume growth was largely driven by strength in energy drinks and non-alcoholic beverages. While we believe there may have been some modest pull forward of orders ahead of anticipated tariffs, we assess this impact as minimal. We remain attentive to the ongoing geopolitical landscape and tariff developments and are actively managing these dynamics. In EMEA, first quarter segment volume remained robust and segment comparable operating earnings increased 13%. Demand trends continue to be favorable, reinforcing our confidence in achieving significant year-over-year comparable operating earnings growth in 2025, driven by ongoing operational efficiency improvements and sustained volume growth. In South America, segment comparable operating earnings increased 25% supported by strong volume performance across all markets. We are encouraged by consumer conditions in Argentina, which continue to exhibit signs of recovery and the Brazilian market performed in line with our initial expectations, reflecting a stable operating environment. Our personal and home care business previously referred to as aerosol delivered mid-single digit volume growth in the first quarter. We remain confident in the strength of this business and continue to expect volume growth to exceed our long-term range in 2025. Moving on to additional key financial metrics and goals for 2025. We anticipate year end 2025 net debt to comparable EBITDA to be 2.75x. We will repurchase at least $1.3 billion worth of shares in 2025 and will remain aggressive in repurchasing our stock at what we believe is very attractive pricing. Through today's call, we have repurchased $651 million worth of shares year-to-date. 2025 CapEx is expected to be slightly below D&A in the range of $600 million We anticipate being able to deliver on our target of comparable net earnings equal to adjusted free cash flow in 2025. Relative to the estimated tax payment due to Aerospace sale, we expect the remaining portion to be paid in 2025. Our 2025 full year effective tax rate on comparable earnings is expected to be slightly above 22%, largely driven by lower year-over-year tax credits. Full year 2025 interest expense is expected to be in the range of $280 million. Full year 2025 reported adjusted corporate undistributed costs recorded in other non-reportable are expected to be in the range of $150 million. And last week, Ball’s Board declared our quarterly cash dividend. Looking forward, we remain highly focused on operational excellence and disciplined cost management and driving efficiency and productivity across the organization. At the same time, we are closely monitoring volatility in emerging markets and broader geopolitical developments. Thanks to the resilient and defensive nature of our business, combined with our proactive steps we have taken to strengthen our balance sheet, we are well positioned to navigate external uncertainty. With the clear financial runway and strong operational foundation, we are activating initiatives that we believe will enable consistent high-quality results and compounding shareholder returns over the long term. With that, I'll turn it back to Dan. Dan Fisher: Thanks, Howard. Our business is performing well and we have taken meaningful steps to future proof our operations through long-term contract renewals, strategic deleveraging and footprint optimization. Backed by the strength of our portfolio and the dedication of our teams, we are confident in our ability to achieve our financial goals of delivering 11% to 14% comparable EPS growth, generating adjusted free cash flow in line with comparable net earnings and returning substantial value to shareholders through large scale share repurchases and dividends in 2025. As we focus on execution in 2025, we have the opportunity to deliver record adjusted free cash flow and comparable diluted earnings per share. While external volatility has increased since we last spoke in February, particularly around tariffs and geopolitical dynamics, the resilience of our global footprint and our defensive business model give us confidence in our ability to navigate a wide range of outcomes. We remain committed to meeting our customers where they are, providing affordable, innovative aluminum packaging solutions that support a world free from waste. Creating shareholder value remains our top priority. With the combination of consistent operational performance, disciplined financial management and significant share repurchase alongside dividends, we are confident we can drive meaningful compounding returns for shareholders in 2025 and beyond. We appreciate the work being done across the organization and extend our well wishes to our employees, customers, suppliers, stakeholders and everyone listening today. Thank you. And with that, Christine, we're ready for questions. Operator: Thank you. [Operator Instructions] Our first question comes from the line of Ghansham Panjabi with Baird. Please proceed with your question. Ghansham Panjabi: Hey, guys. Good morning. Dan Fisher: Hey, good morning. Ghansham Panjabi: Good morning, Dan and Howard. I guess first off in Europe and the consistency of volume growth there, obviously outperforming pretty much every other geography on the planet pretty consistently over time. Can you just sort of frame for us your supply position there? Where are you from a utilization standpoint? And where do you think the next leg of incremental growth will come from? And then separate to that, was there any sort of pull forward that you could think of as it relates to that region specific to cross-border shipments from Europe to the U.S. ahead of tariffs? Dan Fisher: The second question first, I would say no minimal, Ghansham. How to characterize Europe for us, obviously we made a couple of pretty significant investments a couple of years ago, built a big facility in The Czech Republic, built a big one an hour outside of London. In both cases now we've got third lines moving to invest the fourth lines in both. So we're growing at a nice rate. We've benefited from having made those investments and so we're able to scale those up. We will be getting -- it's getting tight across Europe. We're going to have a little bit more out of pattern freight in peak season. You know this industry well, given such a hot start we had and such a hot start everyone had. So we're in a good spot. We like the trajectory of the back half of the year. We think there'll be continued growth going into '26 and '27 and we'll be looking to do some things hopefully incremental, nothing significant and everything has been contemplated in terms of our CapEx to D&A envelope. So, probably a higher priority on Europe for some incremental investment, nothing significant, certainly cautious to make sure that supply demand stays in balance and that's a marketplace where the labor laws, you got to get it right, you have to maintain real disciplined structure there. Ghansham Panjabi: Okay, got it. And then as it relates to North America, you seem a little bit more, or at least you have confidence as it relates to your growth relative to the industry for this year. Going back to the analyst meeting from June of last year, all the self-improvement initiatives you outlined there to boost etc. Can you just give us a sense as to where those are tracking relative to your initial plan and how is that starting to reshape your sort of baseline as to operating leverage as volumes do start to come back this year in that region? Dan Fisher: Yes, I don't expect margin expansion. Our ability to maintain what we have, I think is probably a better characterization of North America. And 2023 and 2024 a lot of heavy lifting in the NCA region, where we are starting to see some improvements are in Europe and in South America in terms of some of the lean initiatives that are rolled out. Obviously, we had to do things quickly from a fixed cost standpoint in North America and we're further along in the journey in North America in our Ball operating excellence in our Ball business system. So you should see continued improvement and I think with the efficiency gains in places like Europe that may enable us to spend less capital, but to step into the growth moving forward. Ghansham Panjabi: Perfect. Thank you, Dan. Dan Fisher: Thank you. Operator: Our next question comes from the line of George Staphos with Bank of America. Please proceed with your question. Mr. Staphos, your line is live. Perhaps you have yourself on mute. Our next question comes from the line of Stefan Diaz with Morgan Stanley. Please proceed with your question. Stefan Diaz: Hi, Dan, Howard, Brandon. Thanks for taking my questions. Maybe just to begin, if you could just give us a little more details on how you're thinking about tariffs and the potential impact on demand? And maybe if you could particularly touch on your Mexico beer exposure and maybe what are you hearing from your customers there, just given the extension of tariffs to cover the value of beer cans? Dan Fisher: Yes, maybe I'll start more broadly with North America. The 232 that was rolled out mid-March excuse me that's intact, not a lot's changed. I think that's been well publicized. Think about that in terms of $0.075 to $0.01 to can impact. That's really negligible in the grand scheme of economics. The [indiscernible] has come off, so I think the total deliver economics, it's really not much. One particular customer that I think you mentioned that's in our portfolio, they are compliant with the MCA. So yes, they have the 232, but they're not experiencing much of any tariff impact coming across the border. And so for us right now, strong start to the year, still continuing to see a -- I've got a very constructive outlook on North America, albeit uncertain. Demand relative to the Chinese tariff impacts is the one thing that is probably not agnostic to -- it's consistent across every industry. So that's the one we're looking at, but we haven't seen it. We haven't seen any different behavior from our customers. We haven't seen any forecast change. I think the only thing that we're keeping our eye on kind of relative to the segment that you identified is there's certainly been ongoing challenges for brands or categories that are attached more broadly to the Hispanic customer, because they are not as visible commercially right now for a million reasons and some of them pretty political. So we're watching that, but even with that, that's been fairly persistent here throughout the first quarter and hasn't impacted our volumes to a degree in which we would alter our outlook for the year. So hopefully that gives you a little bit more context in how we're seeing it. Stefan Diaz: Yes, yes, no, that's very helpful and nice to hear that you're not really seeing an impact to your volumes from that so far. Maybe just sticking with North America, I understand you have less exposure versus peers to non-alcoholic beverages, but how are you thinking about the potential cuts to SNAP? And how does this come up in conversations with your customers at all? And if it has, what are they saying about it? Dan Fisher: Yes, on the non-alcoholic side of things, they're constantly reformulating those offerings to make sure that it finds a home, right, with the varying dietary concerns and or I guess the chemical challenges facing things like GLP etc. So I think they are reformulating products, they are launching new products, all of those seem to be meeting the customer where they're at. I'm not overly concerned with some of the things you're talking about, the Make America Healthy initiatives. Yes, I think it's still going to boil down to economics and right now I think most of the large CPG customers that are in those areas are reformulating and innovating in an interesting way, in a faster market way that is enabling and we continue to grow. Stefan Diaz: Thanks, Dan. I'll turn it over. Dan Fisher: Thank you. Operator: Our next question comes from the line of Anthony Pettinari with Citi. Please proceed with your question. Anthony Pettinari: Good morning. Dan Fisher: Good morning. Anthony Pettinari: Dan, hey, with volumes, I think a little bit better than expected, I'm wondering if you could kind of characterize the promotional environment in your major markets as we get closer to the summer. Do you think customer promotions have been more successful than you would have thought or are they moving the needle on volumes or are there particular sizes or formats that are winning in the market or just any color there? Dan Fisher: Yes, in North America particularly, right? Yes. There have been some -- if you look at the Energy segment, there have been more innovation in and around flavor profiles and a more deliberate effort to price things to move them. That's been much more constructive and you're seeing that in the Energy segment returning to mid-single digit, high-single digit growth. We had had enough conversations with folks in that segment to know they didn't like where they were back in the fourth quarter and second half of the year in terms of the growth trend. So I think they made a conscious effort there and they're seeing that. Non-alcoholic in general, I think there's been enough innovation in that segment along with again more constructive pricing to drive volume. You haven't seen that on the beer side, but I also kind of left '24 headed into '25 and are thinking and are planning there will be much more conscious effort in peak season to see some activity in and around pricing to drive volume. So, we're still anticipating some of that, but writ large and in my comments, non-alcoholics ahead of where we thought even with some of the planned innovations and the plan thinking to push volume and beer is a little behind. So I think more of the same and non-alcoholic and a little bit more aggressive pricing to push volume and beer and that sets up for a pretty healthy year for the industry. Anthony Pettinari: Got it, got it. That's very helpful. And then maybe just following up on that, I mean on the last earnings call you announced the purchase of Florida Can. Can you give us sort of an update on that and especially just how that asset kind of fits into what seems like a little bit of a stronger North American market? Dan Fisher: Yes. We'll need that. We'll need the capacity. There's a couple of can sizes that are getting real tight. Unfortunately, that asset does have those capabilities. We'll see more of that impact moving into peak season. You see less of it now, right? Obviously, we're still building inventory getting ready for peak season. So you haven't needed to spot volume opportunity or the additional incremental growth that that presents, but you'll start to lean into it. And as you said, getting off to a good industry start means we'll need that capacity sooner rather than later. It's ready to go. The assets are running. It's fully staffed. It's been integrated nicely into our system. So now it's to your lane there, yes, I mean we're looking forward to using that and running it full out here this summer. Anthony Pettinari: Okay, that's very helpful. I'll turn it over. Operator: Our next question comes from the line of Phil Ng with Jefferies. Please proceed with your question. Phil Ng: Hey, guys. Strong quarter and start to the year, so congrats. Volumes in North America was pretty strong, especially a tough comp from last year. Curious, how's the summer season been kind of shaping up in North America, order trends in April, May? The reason why I ask is because the brewers have still been calling pretty soft trends in North America and I think you called out some modest perhaps pre buy. So does that kind of soften your demand trajectory, call it 2Q and perhaps the back half of the year? Dan Fisher: We're still seeing really positive constructive start here to April, I guess we're in May now. We didn't see much pre buy just to be clear, maybe others called out a bit of that from the beer side, we didn't see that. What I'm hopeful for and it kind of builds off my last question is we started we entered 2025 with pretty strong belief that non-alcoholic segment energy in particular, they were going to innovate and they were going to go for volume. They were going to kind of moderate pricing in line with CPI, maybe even take a little less than that and go back and get that category to growth and I think they've done a nice job at the start industry wide. The rest of the non-alcohol category has innovated. They've done nice as well. They've been really constructive on their pricing to push volume, meet the customer where they are from an affordability lens. And then beer, I still think there's going to be significant effort here in peak season to moderate price levels so they can move product. I don't think anybody is happy where mass beer is here through the first quarter. And I'm not surprised, they're going to use the affordability lens and push that. And so more to come here in peak season, I'm cautiously optimistic if they can do that, we'll be a little ahead on the non-alcohol and if that can catch up to be remotely in line with what we thought at the beginning of the year, I think it bodes for a really nice industry performance here over the back half of the year. Phil Ng: And is it realistic to assume low-single digits in North America in the next few quarters this year still? Dan Fisher: Yes, that's what we're -- we thought we'd do a little better kind of for us in particular, we thought we'd do a little better kind of Q2, Q3 versus prior year. And we got out a little ahead in Q1. So if that can maintain persist, I think you're in that one to three range for industry and I believe we'll be right there. Obviously, we have a little bit more weight on beer, but we also have a little more weight on Energy. So those two things have netted out to be slightly more positive than we anticipated at this point in the year. Phil Ng: That's great. And then Europe certainly sounds like it's getting tighter. Is that an opportunity for pricing and as the kind of next contract kind of set up? And then similarly in North America maybe we're a little further away, but I think two of your competitors called out North America potentially getting tightening as well, especially in the summer selling season. Is that an opportunity for you perhaps to pick up some share because I suspect you among your bigger competitors in North America probably have a little more spare capacity. So, is that an opportunity during the peak summer months? Dan Fisher: Yes. Let me start with Europe First. Europe is -- when you look at the construction of the margin profile in Europe, everybody makes good gross profit. I mean, it's the best in the world. So pricing is not really the opportunity set and then of course it's not Europe, right, it's the U.K., it's Spain, it's there's a little bit more I think there's balance and there's solid competition in each one of these siloed regions if you will, sub regions within Europe. So we'd much rather prefer growth on the existing margin in Europe and we'll try to make it up through efficiency gains. If we're going to expand margins, it will be rolling out kind of all business systems and becoming better operators throughout the throughout Pan Europe. In North America, we're pretty tight. So we took out an awful lot of capacity. We did add the Florida Can assets. We do have some 12-ounce capacity still hungover from kind of the Bud Light Challenge if you will, but not a lot. We've tightened our system and it's reflected in our current margin profile. So I would say we've got opportunity to grow at the rates we've outlined without adding capital. Obviously, we're going to put the new facility in the Northwest that should free up capacity in the Southwest. So, we've contemplated the next two to three years having what we need in order to step into the growth algorithm we laid out at Investor Day last year, but there's not a ton of upside, maybe some spot pricing opportunities, maybe some spot market opportunities, having the right mix, having the right can size, those things could present opportunities for us, but not a bunch of excess capacity to step into. Phil Ng: Okay, great color. Really appreciate it. Operator: Our next question comes from the line of Edlain Rodriguez with Mizuho. Please proceed with your question. Edlain Rodriguez: Thank you. Good morning, everyone. I mean, Dan, a quick one. So you mentioned the 11%, fourteen % EPS growth for this year. Can you get there if volume falls short because of tariffs or are there other levers you can pull to get to that growth number? Dan Fisher: It's a great question. I guess how far will volume fall, I guess would be the question. We're feeling really good about the low end based on what we see today. Here's how we're looking at tariffs right now. Very constructive start to the year. We know what 232 is. Our customers know what 232 is. Our suppliers know. We're managing that. The wild card will be the ongoing shock and awe strategy, how quickly does that translate into real identifiable trade deals. I think once we see one or two trade deals show up, it starts to really enable us to frame these scenarios and work a problem set that's identifiable. So, I'm hopeful that a couple of things are going to break loose in the next 30 to 60 days that we're going to know Japan, maybe Korea, Vietnam, things like that. You raised a good point on China that could be challenging, ongoing, but I think we're optimistic that we're going to start to see get some tea leaves here about what's really going to be in front of us and then we've done a pretty good job with some significant challenges here over the last two to three years to manage those in a real constructive manner. And so I think that's right in front of us. So I think this uncertainty dissipates. And it's uncertain today, but I think that window closes. And then the reality is we haven't been able to talk about this last couple of years, but this is a aluminum packaging. If people are going to spend less going out, if people are going to spend less traveling, etcetera, we typically do well. We're resilient in a recession. We're not inflationary resistant, but we're resilient in a recession. If that's where we're headed, depending on how steep it is, I think the range still holds, obviously higher to get to the top end. But then the counter or the positives would be a weaker dollar. Our fastest growing business or most profitable business is Europe. There's some currency tailwinds there. So I think as we sit here today that's exactly the conversation I had with the Board last week. It's like I'm feeling like we're in this range and we can navigate it. Yes, I've got a lot of belief in the performance of the team after the last couple of years and what they can do. If we can have an identifiable problem, we typically sprint after it and solve it pretty effectively. Edlain Rodriguez: Okay, great. Thank you very much. Operator: Our next question comes from the line of Josh Spector with UBS. Please proceed with your question. Josh Spector: I wanted to follow-up on the North and Central America segment. You had, I mean, low single-digit volume growth and you had kind of similar, little bit lower EBIT growth. I know last year there was some pull forward. So really just trying to think about the underlying EBIT growth that you had in that segment and you pretty consistently have talked about 2% to 3% volume growth in that segment for the rest of the year. What's the type of EBIT leverage we should expect there to go forward? Thanks. Dan Fisher: Yes, I think it will be closely -- we think about the two in one ratio is enterprise-wide less region-by-region in terms of that leverage factor. You can have mix impacts quarter-to-quarter, you can have a number of other things manifest as you know. So I think we'll be kind of holding our earnings profile margin slight uptick in total comp dollars and some of this will just be mix related for the back half of the year on how much we go up. Josh Spector: Okay. Thank you. Operator: Our next question comes from the line of George Staphos with Bank of America. Please proceed with your question. George Staphos: Hi, everyone. Good morning. Can you hear me? Dan Fisher: Hi, George. Yes, we thought we lost it there for a second, buddy. George Staphos: Yes. It happens. It happens. I appreciate the time and the details. So three questions. One, Dan, you mentioned earlier in the call, you're activating initiatives and I just wanted to sort of peer under the hood there if there's anything specific to that or if that's just a continuation of Ball Business Systems and the effect it's having on operating leverage. Secondly, you talk about you don't think there's been much pre buy and certainly we take that face value, but where you sit, where Howard sits, how do you ever know how much pre buying may happen unless it's after the fact? So like how do you know to be confident about it being a minimal effect? And then last question, I'll turn it over. This is my phrasing not yours, but you seem cautiously optimistic about your beer customers being a bit more, I don't know what the right term would be, but more promotional getting price points optimized. What gives you the comfort, the confidence about that heading into the season realizing at the end of the day you're their supplier and they're ultimately going to market how they market? Thank you and good luck in the quarter. Dan Fisher: Right. So great question on the pre buy. No, we can't slice and dice this info. It's it would be conversations. It would be looking at order patterns versus scanner data, trying to factor out anomalies. I would say there's more thought than licking the finger and putting it in the air, but I think you're on to something. It could be I mean it could be a couple of hundred million George. We think it's somewhere in that kind of $100 million to $200 million and there was a little bit of pull forward last year as well. So minimally on a comp year-over-year, not a lot of delta, but that's probably the extent of the analysis. It's a good call out. We know that some of our customers too that were shipping over the border because their volumes were already dissipating in the fourth quarter and the beginning of the first quarter. They were pretty full up on inventory. So there wasn't an ability to pull forward as much. I would have expected to see it from a couple of customers that I had my eyes out. We were asking those questions here over the last three to four weeks, but they were their volumes were already coming off, right. So they didn't have a whole lot of warehouse capacity or distributor capacity to kind of stuff the channel further. Those are the factors of the nuance that gets me to this. And we're not with everybody. And so there could very well be some pull forward in the overall market place. But from what we saw in our numbers, not a great deal to speak to at this point. George Staphos: Okay. Dan Fisher: And then just honing in on similar, we're in front of our customers quite a bit. We have a lot of conversations. I don't want to give too much away, but I do think a couple large brewers, I think they've even said in some of their investor discussions like, hey, we want a more concentrated effort when people are going to be attending barbecues and such and we'd rather spend our marketing dollars there. Now, in fairness, that doesn't mean there's going to be affordability price lens, but typically when I hear that a more concentrated effort, there is some combination of more public facing marketing and a base effort to move volume during that period. So that's where it's coming from. Those are the things I've heard fairly consistently and that makes sense. I don't know why you're trying to push product in dry January. Maybe there's something there. Maybe there's something there. There was one other question that I think you wanted me to hit on, sorry. George Staphos: You said during your remarks that you're activating initiatives and I just wanted to probe exactly kind of what that was referring to. Is that just the benefits of what you've been doing with Ball Business Systems or is there something specific there whatever you could share? Thank you and good luck in the quarter. Dan Fisher: Thank you, George. Yes, nothing more than just ongoing rolling it out. It's going to take us 18 to 24 months to roll it out across every plant. I think we're about 2/3rd of the way there at this point. We started with safety, quality. There were some obvious things we did from a capacity standpoint but we're seeing significant improvements in safety, significant improvements in quality. We had a number of record production weeks and days during the first quarter. So we get this rolled out over our entire infrastructure and facilities. I think you'll see the consistency of performance and a lot of positive knock-on effects. So we're just leaning into that more fully. It's built into a lot of our thinking already. So I wouldn't say there's anything incremental, but steady progress on kind of what we described at our Investor Day a year ago. George Staphos: Thank you very much, Dan. Operator: Our next question comes from the line of Jeffrey Zekauskas with J.P. Morgan. Please proceed with your question. Jeffrey Zekauskas: Thanks very much. I think in capital expenditures in the quarter you spent $80 million. Can you get all the way to $600 million. Why was the spending so low in the beginning of the year and why should it be much higher later in the year? Howard Yu: Yes. So, Jeff, I think with regards to the Northwest facility that Dan had specifically talked about, I think that we're moving slower there. And so you will see that ramp up in the tail end of this year. And so what we said is that $600 million is probably the high end of that in aggregate. And we'll look at things and depending on how things shape up throughout the year, we may moderate. But at this position, we see the funnel for CapEx and what we want to do including some of the maintenance work that's required as well. And so, we'll lean into that a little bit more as the year goes. Jeffrey Zekauskas: Okay. And secondly, your inventories jumped from the fourth quarter to the first quarter by about 10%. Is that just a seasonal number or is there something else going on? Dan Fisher: Yes, it's just a seasonal number. It's a good question. It's in line with what we expected to start the year. The inventories were lower. At the end of the fourth quarter, volumes were so soft at the end of the year that we've rebuilt and we're seeing the strength in across all the markets in terms of volumetric outlook. So I think we're positioned right, it's not heavy, probably had some benefit in terms of some absorption relative to the prior year, but kind of in line with what we expected nothing out of the ordinary. Jeffrey Zekauskas: Great. Thank you very much. Operator: Our next question comes from the line of Michael Roxland with Truist. Please proceed with your question. Michael Roxland: Hi, guys. Thanks for taking my questions. This is Niko Pacini on for Mike. Dan Fisher: Hi, Niko. Michael Roxland: Just first off, moving back to maybe margins in North and Central America. I think EBITDA margins are around like 17% right now versus mid-teens maybe a few years ago. At the same time, CPGs are being squeezed upon some continued volume weakness. And then on top of all that, you had some favorable pricing a few years ago when supply demand was tighter. Can you just comment on maybe your expectations for margin sustainability going forward in light of that and as contract negotiations come up in the next few years? Dan Fisher: Yes, we're at a kind of a high-water mark, in our North America margins. To sustain these, given the backdrop that you described, I think every one of our CPG customers is talking about affordability and an affordability lens. We're already meeting them in long-term planning sessions, joint planning sessions to figure out more efficient routes to market, more efficient ways to deliver the product. We're going to have to do quite a bit to help our customers make their margins and push product and advertise and promote. So we're going to have to play a role in that for sure moving forward. But I think what we've been able to do thus far is kind of over deliver on focusing on our core, the Ball Business System, the efficiency gains we're seeing, more constructive footprint. So all of those are playing a role. I would suggest that, yes, volumes are to come by right and it's probably coming at a different price point for our customers. And I think if we're the partners that we ascribe to be then we'll participate in that moving forward and that's why I've been pretty consistent on can we maintain these margins and that's certainly our goal. Michael Roxland: Perfect, understood, very helpful. Just follow-up there, I think some of your peers have been speaking about mix -- specialty mix in North America versus standard cans. Just wondering what you are seeing in specialty cans and if you are adjusting your mix at all and if there is any margin impact there? Dan Fisher: There is a little bit of I think 12 silks growing at a very healthy clip. So depending on whether you call that special or not, I think that would be nomenclature definition, but that will play a role. And then the most affordable package when you start thinking about how some of the beer folks are playing, precisely to your previous question, 12-ounce cans, you can run a lot of them, you can fill them quick, you can package them in cubes very nicely. So I think 12 standard cans in this environment may play a bigger role. And so I think that affordability lens. There's ways to play it in terms of efficiencies throughout the system. That's one. Certainly, on the beer side, I think you're seeing more and more of that play out. But still specialty category 7.5 ounces growing very nicely, 12 silks growing very nicely, 24 ounces is continuing to grow. So specialty continues to grow, but I think depending on what segment, what brand you're looking at, what channel playing this affordability lens, I think different pack mixes and different size, different price points are important as well. Michael Roxland: Got it. Thank you very much. I'll turn it over. Operator: Our next question comes from the line of Chris Parkinson with Wolfe Research. Please proceed with your question. Chris Parkinson: Great. Thank you so much. Can you just hit a little bit more on the trends that you're seeing in Latin America? Obviously, it's been a fairly volatile few years, but just how should the Street generally be thinking about not only in the second half of '25, but into '26, '27 of both the Brazilian and it seems like Argentina has calmed down a bit? Thank you so much. Dan Fisher: Sure. Yes, Chris, we entered the year Brazil was inflation was running a bit hot entering '25 and our belief was sort of 2% to 3% growth in Brazil was about right for the industry, seems to be playing out that way. We were a little under that in the first quarter because our partner down there didn't win in the marketplace. So mix played a role in that. But the rest of our portfolio, Chile, Paraguay, Peru, Argentina, all of those countries are recovering and all of them were up nicely. And so when I talk about getting to in excess of our long term 4% to 6% growth rates in that region, that's how we're going to get there in '25. And there should be a knock-on effect for some nice growth in line with our long-term goals for '26 as well. Getting out ahead of my skis in the '27, the contracts are all there, it's just going to be what's happening from a macro standpoint in South America, but we like the back half of '25 and '26 and the recovery of these countries that as you frame in your question were much softer the last 18 months. Chris Parkinson: Got it. Thank you. And just as a quick follow-up, just turning over to Europe. Europe generally, I think it's been surprising in the demand side, obviously, there have also been some puts and takes. But just intermediate term, how should we be thinking about just the supply demand dynamics across the region and how are you personally thinking about that over the next year, year and a half or so? Thank you. Dan Fisher: Yes, it presents more growth than North and Central America because the substrate shift away from glass. It presents close to the growth rates in South America, but of course off a bigger base. So the volume will be of a size and scale that will be bigger than South America. And capacity adds and you can even see it if you go back and look at what we did when we added facilities, we added one in the U.K., we added one in The Czech Republic. These are much friendlier labor markets and labor pools. And so I think you just have to be mindful of where you're building. It's harder to build in Europe, zoning, permitting, water, wastewater treatment, all of that. It takes longer and you have to be incredibly constructive about your views over the next 20 to 30 years. So there's always been a bit more discipline if you will of not betting on the come to some extent. And so I would expect the industry thinks that way as well. But I mean, I don't want to stem the growth. I think it's coming from a we're at the high 20% now of substrate mix. It should go to if it's anywhere like the rest of the world, it goes somewhere between the mid-40s and low 50s. So it's a decadal shift that we're experienced and undergoing in our customers whether they're non-alcohol, energy, alcohol, they also see the same thing. You just have to be very planful and methodical about putting capital in the ground there, probably much more so than anywhere else in the world. Chris Parkinson: Thank you. Operator: Our next question comes from the line of Arun Viswanathan with RBC. Please proceed with your question. Arun Viswanathan: Great. Thanks for taking my questions. Congrats on the strong Q1 there. I guess, first off, just on the price mix, so you guys did a little bit better than what we thought in all three segments. And it looks like definitely price mix played a good role there. But would you say your outperformance from on the segment EBIT perspective was kind of equally split between slight volume outperformance, price mix and strong execution in running well or was one of those factors maybe more contributory and I guess do you expect that to continue? Dan Fisher: Yes, I think pretty consistent operational performance. I wouldn't say there's much of an uplift there. So, we've been at this in North America for a couple of years now. Probably a little bit more on the mix side of things, more so than the volume, the volume is probably enough to offset to some extent the inflationary pressures that you're experiencing. And then favorable mix and a little bit of operational efficiency is how you would have flown through a bit more profit. Arun Viswanathan: Okay, great. Thanks Dan. And then you mentioned that the Florida Can has been integrated and will be running full out. So I guess I'm just curious on the contracting and filling up that facility and maybe even your others in North America. How long are your contracts now? Are they still kind of maybe in the year or so level? What's your visibility on the volumes over the next few quarters? And I guess, do you look at sell through or do you look at kind of contracting to achieve that visibility? Is it necessary that you see a full sell through of cans that you sell to your customers or is it contracting that's more important or maybe both, I don't know? Dan Fisher: Yes, contracting is the most important over the medium-term period and planning your assets, supply demand, scanner data coupled with inventory, getting a handle on your customers, their inventory, safety stock levels and also you're needing to know that from their relationship with their retailer. You have to have all those connected in order to really have an understanding of what the volume is in the quarter-to-quarter sense that I think you were pressing. And then the only other thing I would say just specific to Florida Can would be, I said we'll run it all out here during peak season. So that's good. Yes, there's still like there's still and there's definitely capacity in shoulder seasons in North America. Yes, so it will be product specific and it will be peak season. You'll be able to step into potentially some spot opportunities, but right now we're almost there and peak season, so we're running. Arun Viswanathan: Okay, that sounds good. Right. And so just putting that together then, you still feel confident in your volume outlook for the full year in North and Central America. Is that correct? Dan Fisher: I do for what's in front of us, yes. Arun Viswanathan: Got it. Thanks. Dan Fisher: Yes. You bet. Operator: Thank you. We have reached the end of the question-and-answer session. Mr. Fisher, I'd like to turn the floor back over to you for closing comments. Dan Fisher: Yes. I appreciate everyone's question and time and look forward to seeing you here and hopefully a more certain and less noisy second quarter update. Operator: [Operator Closing Remarks].

Operator: Greetings, and welcome to the Ball Corporation Fourth Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions]. As reminder, this conference is being recorded. It is now my pleasure to introduce your host, Brandon Potthoff, Director of Investor Relations. Thank you, sir. You may begin. Brandon Potthoff : Thank you, Christine. Good morning, everyone. This is Ball Corporation's conference call regarding the company's fourth quarter 2024 results. The information provided during this call will contain forward-looking statements. Actual results or outcomes may differ materially from those that may be expressed or implied. We assume no obligation to update any forward-looking statements made today. Some factors that could cause the results or outcomes to differ are described in the company's latest Form 10-K, our most recent earnings release and Form 8-K and other company SEC filings as well as company news releases. If you do not already have the earnings release, it is available on our website at ball.com. Information regarding the use of non-GAAP financial measures may also be found in the notes section of today's earnings release. In addition, the release includes a summary of non-comparable items as well as a reconciliation comparable net earnings and diluted earnings per share calculations. References to net sales and comparable operating earnings in today's release and call do not include the company's former Aerospace business. Year-to-date net earnings attributable to the corporation and comparable net earnings do include the performance of the company's former Aerospace business through the sale date of February 16, 2024. I would now like to turn the call over to our CEO, Dan Fisher. Dan Fisher: Thank you, Brandon. Today, I'm joined on our call by Howard Yu, EVP and CFO. I will provide some brief introductory remarks. Howard will discuss fourth quarter financial performance and key metrics for 2025 and then we will finish up with closing comments and Q&A. Before I talk about the business and results, I want to highlight the amazing work our employees and teams have done to give back to their communities. In 2024, our employees volunteered more than 23,000 hours of their time across 23 countries and to more than 1,880 different causes and organizations, working to create a positive impact in the communities where we live and work. In partnership with the Ball Foundation and our dedicated employees we invested more than $4 million into our communities to support local causes and disaster relief efforts. I want to thank all of our employees who devoted time in 2024 to uplifting our communities. You truly represent our values of we care, we work, we win. I also want to take a minute to highlight the work our teams have done to continue to improve our safety performance. Because our people are our most valuable resource, we set aggressive targets to improve our total recordable incident rates. We continue to be well below industry incident rates and our continuous improvement mindset requires us to constantly improve. Through that mindset, we were able to decrease our 2024 incident rates versus 2023, and outperformed our goal for the year. For us, our safety metrics represent more than just numbers, they exemplify the health and well-being of our employees, and we will continue to do everything in our power to improve every year. Turning to business performance. We delivered solid fourth quarter results and returned $1.96 billion to shareholders via share repurchases and dividends in 2024. And we continue to execute on our goal of repurchasing at least $3 billion of shares between 2024 and 2025. Aluminum packaging continues to outperform other substrates across the globe. In EMEA, fourth quarter volume remained strong, driven by continued investment by our customers in can filling across the region. In South America, volume growth in Chile and Paraguay was more than offset by softer-than-anticipated volume performance in our Argentina as well as supply/demand tightness in Brazil caused by slower-than-expected ramp of idle capacity. In North America, persistent economic pressure on the end consumer and our exposure to U.S. domestic beer led to softer-than-expected volume. Our regional performance culminated involves global beverage can shipments being down low single-digits year-over-year in the fourth quarter and up 1% in 2024. Looking to 2025, our Ball Business system is in place, and our teams are focused and excited about the opportunity that lies ahead of us to drive operational performance, volume growth, and productivity gains. We are laser-focused on delivering on our stated goal of exceeding 10% comparable diluted earnings per share growth 2025 and beyond. As we begin 2025, we feel confident in our ability to deliver 11% to 14% comparable diluted EPS growth. We anticipate growing global volume in the 2% to 3% range and expect all of our businesses to grow in or above the ranges we laid out at our 2024 Investor Day. In EMEA, customer movement to cans from other substrates will continue in 2025. We continue to be bullish on the opportunity to drive long-term growth across EMEA as sustainability legislation and the competitive advantages of aluminum packaging increased can penetration from a low base. In South America, recovery in Argentina and Chile, coupled with growth in Brazil, is expected to drive volume above our long-term range and operating earnings growth in in 2025. And while our North America business faced volume challenges last year, we have confidence our ability to deliver volume growth in line with or slightly above market. We have been proactive about extending contracts and have over 85% of our 2026 volume under contract. That includes signing an extension with one of our largest customers that will take us to nearly the end of the decade. This extension with our global partner also means that we will be building what is effectively a two-line can plant in Oregon. This investment will not change our expected CapEx plans or our share repurchase targets and will give us needed capacity in in the market where our customers are also investing. Additionally, January, the company entered into an agreement to purchase Florida can manufacturing and its beverage can facility in Winter Haven, Florida. The transaction, which carried a $160 million purchase price closed this morning. Our North American business is running at high utilization rates in part of the U.S. and with the growth we expect in the coming years, this capacity will provide us the fuel for growth we need to deliver on our customers' plans. We are purchasing this asset for well below replacement value. And with our strong balance sheet position, there will be no impact to our share repurchase plans. Lastly, on cups. During the fourth quarter, our Board approved for the company to pursue alternatives for the business. This includes an option to form a strategic partnership in early 2025, which is expected to result in deconsolidation of the business. We expect to complete the process in the first quarter. And with that, I'll turn it over to Howard to discuss full year and fourth quarter 2024 results as well as key metrics for 2025. Howard Yu: Thank you, Dan. Starting with our results, 2024 full year comparable diluted earnings per share was $3.17 versus $2.90 in 2023. Fourth quarter 2024 comparable diluted earnings per share was $0.84 versus $0.78 of the fourth quarter of 2023, an increase of 9.3% and 7.7%, respectively. Full year comparable net earnings of $977 million were up year-over-year, driven by strong operational performance, cost management initiatives and lower interest expense, which were able to more than offset the earnings headwinds from the sale of our Aerospace business. Fourth quarter comparable net earnings of $250 million were up year-over-year, driven by cost management initiatives as well as lower tax and interest expense, which were able to more than offset the earnings headwinds from the sale of our Aerospace business. In North and Central America, stronger-than-expected performance in December volumes was more than offset by lower-than-expected volume in October and November. Despite a softer US mass beer category and stretched end consumer, we continue to believe that our 2025 volume will return to growth and will be in line or slightly above market. Throughout 2024, our team has done a great job of improving operational efficiencies, lowering cost and effectively countering measuring risk. And through our Ball Business system, we will continue to drive operational improvement in the plants to more profitably serve our customers' growth. While we have a tough comp in the first quarter as well as headwinds from poor weather across the US in January, we expect sequential improvement throughout the quarters, leading to volume growth in 2025. In EMEA, fourth quarter segment volumes were strong, and the segment comparable operating earnings increased 12.5%, matching our expectations entering the quarter. Recent demand trends remain favorable and the business is on track for significant year-over-year comparable operating earnings growth in 2025, driven by improving operational efficiencies and volume growth. In South America, segment comparable operating earnings increased slightly, while segment volumes declined due to continued weakness in Argentina and the supply-demand tightness in Brazil, partly offset by volume growth in Chile and Paraguay. During the fourth quarter, consumer conditions in Argentina continued to demonstrate some gradual signs of recovery, and we continue to monitor the dynamic economic situation in Argentina and potential scenarios that could impact results. To provide additional volume support for our Brazil business, we plan to reopen [indiscernible] facility. Looking at the businesses within our Other. Our Personal & Home Care business, which was previously called Aerosol performed well and grew volume mid-single digit in the fourth quarter, and we expect to grow volumes above our long-term range in 2025. Moving on to additional key financial metrics singles for 2025. We anticipate year-end 2025 net debt to comparable EBITDA to be 2.75 times as we work to deliver on our stated goals of repurchasing at least $3 billion worth of shares between 2024 and 2025. After repurchasing $1.7 billion of shares in 2024, we will repurchase at least $1.3 billion of shares in 2025. And we'll remain aggressive in repurchasing our stock that what we believe is very attractive pricing. Through today's call, we have repurchased $290 million worth of shares year-to-date. 2025 CapEx is expected to be slightly below D&A in the range of $600 million. We anticipate being able to deliver on our target of comparable net earnings equal to adjusted free cash flow in 2025. Relative to the estimated tax payments due on the Aerospace sale, we now expect total payments to be $875 million. We paid a total of $766 million as of the end of the fourth quarter and expect the remaining portion to be paid in the first half of 2025. Our 2025 full year effective tax rate on comparable earnings is expected to be slightly above 22%, largely driven by lower year-over-year tax credits. Full year 2025 interest expense is expected to be in the range of $270 million. Full year 2025 reported adjusted corporate undistributed costs recorded in other non-reportable as expected to be in the range of $160 million, driven higher by lower interest income from the cash proceeds of the Aerospace sale. And last week, Ball's board authorized the repurchase by the company of $4 billion of our common stock through the end of 2027 as well as declared its quarterly cash dividend. Looking ahead to 2025, we are hyper focused on operational excellence, cost management, driving efficiency and productivity across our business and monitoring emerging marketing volatility. We are fully committed to maximizing the potential of our company over the long term. We have executed on derisking the corporation through debt retirement, and we have minimal near-term maturities. The runway is clear for us to activate near-term initiatives to consistently deliver high-quality results and generate compounding shareholder returns. With that, I'll turn it back to Dan. Dan Fisher : Thanks, Howard. The business is operating well, and we have future-proofed our business through long-term contract renewals, deleveraging and footprint optimization. Through the strength of our portfolio and the unwavering dedication of our employees, we are confident we will deliver on our long-term financial goals of exceeding 10% comparable diluted EPS growth, generating adjusted free cash flow in line with our comparable net earnings and returning value to shareholders through large-scale share repurchase and dividends. The focus on executing our purpose and our promise was certainly on display during 2024. In 2025, we have the opportunity to deliver record adjusted free cash flow and comparable diluted earnings per share. We will continue to meet our customers where they are to deliver affordable, innovative aluminum packaging solutions that can lead to a world free from waste. Shareholder value creation remains our focus, and we continue to prioritize delivering compounding shareholder returns in 2025 and beyond. We are confident that consistent delivery of high-quality results operational performance, coupled with a significant share repurchases for the foreseeable future, in addition to dividends will drive shareholder value creation. We appreciate the work being done across the organization and extend our well wishes to our employees, customers, suppliers, stakeholders, and everyone listening today. Thank you. And with that, Christine, we are ready for questions. Operator: Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Thank you. Our first question comes from the line of George Staphos with Bank of America. Please proceed with your question. George Staphos: Thank you. Hi everyone, good morning. Thank you for the details guys. I guess, first question, recognizing there's been delays to what extent have you been able to determine the effect of tariffs and what that might have relative to the guidance that you're providing, either in terms of volume and/or supply chain on aluminum? For instance, if there is some impact on Mexican shipments might that be made up in North America or not? And then I had a couple of quick follow-ons. Dan Fisher: Yes, George, great question. I'm on a call every single day and the details, obviously, are changing relative to tariffs. I think maybe start with what is imminent is what's happening to the aluminum supply chain in China, and we have spent the better part of the last few weeks mitigating what started as a potential $40 million to $50 million issue. And I think we've got that resolved down to millions of dollars, a couple million dollars. So, we've renegotiated deals with the supply base. We've enforced elements of our of our contract, a lot of that metal was going into South America actually because a lot of these supply chain -- metal supply chains have been altered significantly back in the 2015 and 2016 timeframes. So, that one -- you can put that one to bed as it having minimal nominal year-over-year impact to us. But the I think what you're highlighting is our concern would be depending on the size of this or the piece coming across the border from Mexico, it would be really end consumer additional pressure there in volume. The good news is some of the stuff that comes across the board for Mexico is the growing aspect of your beer portfolio. Obviously, we've been in constant contact with some of those customers. And we've got plans in place to help risk mitigate, but if it's 25%, that's a vastly different story than a 10% versus the 2.5%. And the 25% to me would be more concerning than in terms of a pretty stressed end consumer. So, I would be more concerned about the volume for that aspect of the portfolio, which is not that big for us, but stuff that I know in detail. We've worked, we've mitigated it. The other stuff is still in flight. The 25% number would be more be more concerning and it will concerning relative to end consumer demand, which would certainly dampen our current outlook. George Staphos: That's clear, Dan. Thank you for that. And the other question, and it's a two-parter. Can you talk about -- I'll try to make it painless. Can you talk a little bit about how these investments you talked about, including the Florida can business might affect your earnings and/or volumes? In other words, would you have been comfortable with the growth outlook you gave, if you weren't making these investments? Or do you need these to get there? And then just, look, having covered the company for a while, like a lot of folks on this call. The last few years, Ball has been very busy. But at times, sort of getting to the bottom line, the investments, the activity has not been necessarily as you would have expected. And so what comfort would you give analysts and investors that you can manage another can plant, you can manage investment and at the same time, executing get to the bottom line to hit your goals. Thanks guys and good luck in the quarter. Dan Fisher: Yes. Thanks. I think if I'm following that triannual. I would just say that, guess, over the last couple of years in North America, we've significantly outperformed on earnings. So I guess I'm struggling with some of the -- some parts of the question, but I'll answer this in terms of... George Staphos: Dan, I mean going back to the can plant additions from the growth boom and how that came through in terms of earnings. That's where I was going with that. I'm sorry, but -- and clearly, you definitely did get great operating leverage the last couple of years. But that's what's going with that part of the question. Dan Fisher: Yes. Well, the investments have more than paid for themselves by restructuring aged assets that were less productive. So all of that, I mean, if you look at that, it's actually worked out pretty well. The two investments that we have, one, I've said repeatedly that we didn't want to abandon the Northwest marketplace permanently. So that one shouldn't come as a surprise. It's in line with investments by our customer in that part of the world. So it's repositioning that footprint to be more closely aligned to their investments, so that should work well moving forward. So a lot of thought in that application of investment there and then picking up a significantly reduced price point on a great plant that's nearby an existing Tampa facility in a market that's growing, we're going to really like that in 2026 and beyond. Howard Yu: I think, George, maybe just one thing to add is that, that that Northwest investment that Dan is talking about, that would still be within our envelope of CapEx that we've described. And so our CapEx in 2025 will be below D&A and despite that investment in the Northwest. And so I wanted to make that clear as well. George Staphos: Okay. And do you need these to hit your goals or these would have been additive to the goals you gave? Thanks, guys. Dan Fisher: Additive than in 2026. George Staphos: Okay. Thank you very much, guys. Operator: Our next question comes from the line of Phil Ng with Jefferies. Please proceed with your question. Phil Ng: Hey, guys. Volumes in North America… Dan Fisher: Hey, good day, Phil. Phil Ng: Good day. Volumes in North America has been anything but predictable, it's been weaker. But you sounded pretty confident North America will grow faster than market and faster than your longer-term target. So I guess, first out of the gate, what are you seeing? And then you called out contract renewal with one of your larger customers in North America, which is Greg gives you visibility to the out years. Did you pick up any volumes? And how should we think about pricing for those contracts that you guys renew? Dan Fisher : Yes. I would say 2025 let me start with that piece. I think the industry is expecting kind of that 1%-ish growth rate. For us, obviously, we were lapping 2023 pretty significant marketing dislocation. And then last year, we had a sizable share reallocation on one of our major beer partners. So we're stable heading into this year some incremental volume pickups and it's going to boil down to held the end consumer. Are you with the right customers with the right partners from a mix perspective? So I believe we are. So that's why I'm more bullish that will tick a little north of how the market performs. And then relative to pricing, fairly stable in the out years relative to the large customer contract that we picked up. Some of that obviously when you're making investments on behalf of those customers, you're able to offer a different value proposition. So that's created some structure and some stabilization for us relative to that customer. Phil Ng: Any share gains in volumes picked up as part of that that investment, that customer? Dan Fisher : We believe we picked up, I would characterize it this way. I think where we have secured volume, we believe that it will be growing at a faster rate than their portfolio given some of the pressure, for instance, in the Northwest on some anti-plastic sentiment. Phil Ng: Okay. Super. And then when I think about, Dan, how you've historically been aligned globally and certainly North America as well, you guys have been in line with the big brands, big customers. And when I think about North America, frankly, there's been a lot of innovation in the beverage industry. And a lot of that is actually coming from smaller brands and entrepreneurs, whether it's ready-to-drink cocktails, non-alcoholic beers and actually non-alcoholic beverages on that ready-to-drink side functional soda and stuff of that nature. So my question to you is, how is your growth to market strategy perhaps evolving? Are you going after some of these customers in a bigger way just because demand has been pretty muted in North America and the concern has been, is this a structural dynamic you can't grow out of. So how your go-to-market strategy pivoting in an evolving marketplace where there's still a lot of innovation out there? Dan Fisher : No, I think that's a great comment, Phil. Historically, I mean, we're kind of with everybody in the marketplace. Our portfolio is exponentially larger than any of our competitors in terms of the customer and the category mix. We've got a pretty healthy balance across everything. It's interesting, you commented on ready-to-drink cocktails. So, one of our bigger customers actually acquired the brand that owns 40% of the ready-to-drink cocktail. So these two things, generally, if they're really successful innovative launches, they typically get acquired. So, you've got -- you have to play candidly, you have to play kind of who are the acquirers, who are the innovators. You kind of start there with your anchor investors and then you work both sides of the equation to help stimulate product launches. And so the copies of the world, the liquid depth, this is like they're large in our portfolio. So, -- but it's hard to -- if Coke is growing and ABI is growing and the large customers are growing, we're going to grow. If they're not growing, you can have all of the startups in the world and you're just not going to move the needle on the size of volume. So, there's definitely a balance. I don't think we've moved away from innovation driving sustainability with -- and helping the smaller innovation-driven brands and customers in the marketplace. But at the same time, you got to help make sure that your key partners are winning in the market and that's really how you're going to win. Phil Ng: Okay, Dan, really appreciate the color. Dan Fisher: Yes, thank you, Phil. Operator: Our next question comes from the line of Ghansham Panjabi with Baird. Please proceed with your question. Ghansham Panjabi: Hey guys, good morning. Dan Fisher: Hey morning. Ghansham Panjabi: Dan, going back to the Analyst Day from June of last year where you spent a fair amount of time on some of the productivity initiatives that were going to unfold over a multiyear basis, largely North America. And to put that in just kind of given what you've done or have announced with Oregon and also the acquisition in Florida, does that allow you the opportunity -- a bigger opportunity as it relates to reconfiguration of your footprint and to reaccelerate that productivity because it's not like volumes are growing faster in the industry relative to those two additions? Dan Fisher: Ghansham, I think these -- once these are in place, yes, you'll be able to pick up efficiencies. We didn't vacate demand, for instance, in the Northwest, so you're shipping in. that that demand. So, will be a benefit, right, in terms of delivered cost. And then it's -- we're acquiring an incredibly efficient asset base down in Florida that we can do some things relative to running different can sizes and then becoming more efficient on lines within that subregion. So, we just closed the deal today. So, we've got some ideas on what we're going to do, but we're going to have to get in there and do that. But yes, that will -- any time you've got incredibly efficient assets, well-run assets, that gives you opportunity to be more flexible in a system of our size. Ghansham Panjabi: Okay, perfect. And then as it relates to Europe, obviously, Europe was a very nice surprise, I would say, for the industry from a volume perspective last year. How are you thinking about 2025 as it relates to volume growth, tougher comparisons and just the fact that it is Europe? Dan Fisher: Yes, as we sit here today, like we thought we'd be entering into -- 2023 fourth quarter, there was the destocking event that took place, which muted volume, then everybody got off to a pretty good start in the first quarter. So, I thought the comp would be a little bit more challenging this 2025 versus 2024, because of that sequencing of events and we're off to a really good start there. So, I think it's just -- listen, we've always talked about the opportunity set that Europe presents because it's got the lowest can penetration and as it evolves into a focus on carbon footprint, we've got a great product for that. It's a glass-rich environment in Europe, as you know. And I think the health of the end consumer to some extent, is a little more balanced in terms of our customers, not necessarily being able to put through price at the same rate with the same velocity that they're able to in North America. And as a result of that, I think -- it's a really stable environment for continued growth. And we're fortunate that we put in place a couple of large assets there to grow into, and we're continuing to grow into those. So, I think we'll be at the high end of our long-term guidance for Europe again this year. Ghansham Panjabi: Thanks so much. Operator: Our next question comes from the line of Stefan Diaz with Morgan Stanley. Please proceed with your question. Stefan Diaz: Hi everybody. Thanks for taking my question. Maybe first, going back to North America, do you need to see low single-digit volume growth to be able to hit your EPS guide? Or can we sort of have like a flat to down environment in 2025 and still grow earnings? Just considering the shares you're buying back? Or maybe is it just as simple as if you grow 2% to 3% globally, you should be able to hit your EPS guide? Dan Fisher: Yes, I'd say for a negative print on volume that looks like what we did this year, I think we'll be very challenged to hit EPS target even with share buyback at a more aggressive rate. A flattish environment, offset by maybe a little bit more growth in Europe, I think it's probably a good recipe to deliver the range we outlined. But yes, we're getting to a point where you're going to need some growth in North America. It's not only profitability associated with the volume growth, it's also really hard to offset negative volume of productivity gains. At some point, we're a volume business. We've done a lot of heavy lifting and done some tremendous things to increase the level of profitability in North America. But you'll start running into a bit more of a challenged environment relative to North America and then you'll have to rely more on mix and some other things to steer you to a heavier profitability lift there. But yes, I'm feeling really good where we're at right now starting the year. Things are pointing in the right direction with the strength of Europe and the event that things don't materialize in the growth in North America, but certainly growth is going to at some point, be an important cog, if not necessary to expand margins. Stefan Diaz: Okay, perfect. No, that's really helpful. And then so the last couple of calls now, you noted a supply/demand mismatch in Brazil. So, I guess, how are your inventory levels in the region? And maybe how has demand shaken out versus your expectations so far quarter-to-date? And then maybe if you could also just parse out Brazil volumes in the quarter versus Argentina volumes, just so it's easier for us to compare versus your competitors? Thanks. Dan Fisher: Sure. So, Brazil grew in the fourth quarter, we didn't. I would say we entered into -- we're managing certainly the downturn in Argentina aggressively from a cost perspective in the second and third quarter. We were doing the same thing in Chile, which has been soft and has declined for the last two or three years. And then Brazil was low single-digit growth for the first two quarters. And we also were running a much tighter capacity outlook within our network there. And then suddenly, it got really hot at the end of Q3. So we entered -- were tight and running short on inventory positions at the end of Q3. We started turning on a curtail line in Argentina, curtail line in Chile, multiple curtailed lines in Brazil. And as we said in the opening, we're turning back on a curtailed plant, but that's just taking longer than we anticipated. So we'll return to growth in Q1 and will grow in excess of our long-term outlook next year because we're seeing recovery in Chile. We're seeing recovery in Argentina, we’ll be fit to serve Brazil and will be coming off a much easier comp, obviously, in Q3 and Q4, 2025 versus 2024. Stefan Diaz: Great. Thank you. I’ll turn it over. Dan Fisher: Thank you. Operator: Our next question comes from the line of Anthony Pettinari with Citi. Please proceed with your question. Anthony Pettinari: Good morning. Dan Fisher: Good morning. Anthony Pettinari: In previous quarters, you've been able to grow EBIT year-over-year without much volume growth. And I guess that changed in 4Q. I'm just wondering, did you I don't know, lap any key cost saves? Or were there any kind of PPI pass-throughs or change in price mix. I guess, maybe you lap the Wallkill plant closure. But just curious if there was anything that drove that leverage? Dan Fisher: Yeah. I think you're talking specifically about North America. Anthony Pettinari: Yeah. Dan Fisher: Yeah, we've done -- listen, we're running to historical assay utilization rates now. So we've done the heavy lifting over the last couple of years. So we've lapped that. So in many respects, what you're describing is, yes, we're going to have to get a little bit of growth. I think, the new investments that we're making will also give us an opportunity to create an even more efficient supply chain with the Florida can investment in particular. So there are things that we can do now that we have that asset in the portfolio. But yeah, we're tight. And we're also obviously shipping products, as I indicated to an earlier question, into the Northwest. So there's inefficiency relative to that. That will lap once we get new facility up in Oregon. So there's opportunities there to do some more and gain productivity. But turning on curtailed lines and running them is going to be the most efficient way to lever up margin-wise. Anthony Pettinari: Got it, got it. And then can you maybe talk about operating rates or system utilization in Europe? I guess, volume growth has probably been ahead of other regions, but I don't think you've added a lot of capacity in recent years. I'm just wondering if there's anything in the CapEx plan for 2025, 2026 for Europe or opportunities for debottlenecking or new lines or anything like that. Dan Fisher: Yeah, we have – I guess, over the last two to three years, we've added two huge facilities, one in the UK and one in the Czech Republic. So we've been -- those will both be 4-line plants, by the end of next year. So we have done some incremental line enhancements and investments and that's been able to lift us. It's getting -- it's actually getting quite tight all throughout Europe right now. Over there's a lack of capacity to meet the demand in the UK, so we're looking at things there. But yes, that's -- if these growth rates continue, I mean, it's a big market growing at 3%, 4%, 5%. So that would -- that's going to require probably think about 2027, 2028 to be doing other things in that part of the world. Anthony Pettinari: Got it. Got it. I’ll turn it over. Operator: Our next question comes from the line of Mike Roxland with Truist. Please proceed with your question. Mike Roxland: Thank you, Dan, Howard and Brandon for taking my questions. Dan Fisher: You bet. Mike Roxland: Just wanted to talk to you about the competitive backdrop. There have been some concerns out there in North America anyway, the pricing could be a risk later this year, early next year when some big contracts come up for renewal. Obviously, then you addressed one of them, as you mentioned, you got that extend to the end of the next decade or this decade, excuse me, I should say. But just trying to get a sense from you as to what the competitive environment is like, particularly given softer demand maybe some competitors looking to gain share. And I think in a recent conference, you also called out as the Midwest, in particular, as being somewhat challenged. So any color you can provide would be very helpful. Dan Fisher: Yes. I think I've been pretty consistent on this, Michael. As you know, there -- when you look at the number of facilities that were built, there was quite a few facilities built in the upper Midwest, Northern Kentucky region. And the demand growth has really been on the coast in the Southeast and Texas. So there are reasons for those builds. I think there were a lot of subsidies that went into those builds. But they're not necessarily positioned for the demand profile moving forward. With that said, we're tight. We've structured our asset base in a way that has enabled us to being tight, but also be very close with our strategic partners to make sure that we're doing the right things for them, medium and long-term. That was rewarded in the contract renewal. Relatively speaking, the pricing that we're seeing is better than the past 20 years minus the pricing that we were securing during a massively undersupplied marketplace. So they're really healthy margins to make money and flow cash and manage. They could potentially not be as good as what we were looking at three years ago. I'm talking about incremental differences, not meaningful differences. But I think we're happy with what we're securing and at the prices we're securing and we think we can grow and expand margins based on that and flow really nice cash. Mike Roxland: Got it. I appreciate the color Dan, thank you for that. One quick follow-up. Just in terms of beer, obviously, category is still lagging. We're still trying to figure out the SKUs, the mix, how to target both premium and discount without getting stuck in the middle. How far along do you think the beer companies are in this process? And I'll throw it out there, when do you expect beer demand to inflect higher? Any sense when that could ultimately target? Dan Fisher: Honestly, I don't know the inflection. I would expect it would be very aggressive behavior in the peak season coming up in North America. Starting to see -- you even saw one of our customers today in a non-alcohol range there. The pricing is not enough to grow the top line. So I think once they start hitting these price elasticity curves where they cannot grow the top line, I think behavioral patterns will change. I think some -- some of the plans I've seen, I'm encouraged. I really do think it's going to be what customer or what partner you have is going to matter. Obviously, some of the folks that had really nice growth trajectory. They're dealing with tariffs right now and they're dealing with that make sense out of that. I think that will continue to grow medium and long term because of the relationship they have with the population growth that prefers those products. And then others, I think, are going to get more focused on their portfolio. There's going to be some new innovation that comes out and the folks that have struck a nice balance between being a beverage company and being a beer company, those are the ones that I believe will win medium and long term. And think we have overweight to them. That's a great question. When are we going to see it? The end consumer is obviously still weak. You're in the dry January portion of the year. So no surprises here that you see softness in the beer side right now. Things start to pick up here. Right now, with Super Bowl week and then beyond that, heading into spring break weather patterns, that will all be important to see pricing behaviors and I think, hopefully, a return to volume growth being the principal driver of their economic decisions. Mike Roxland: Got it. Thank you very much for the color and good luck in 2025. Dan Fisher: Thank you. Operator: Our next question comes from the line of Mike Leithead with Barclays. Please proceed with your question. Mike Leithead: Great. Thank you. Good morning, guys. Dan Fisher: Good morning. Mike Leithead: I have two semi-related questions. First, Howard, just a quick housekeeping. I think the release states you plan to deconsolidate cups starting in 2025. I think in the past, you've talked about the being about a $40 million drag. So is that a $40 million earnings tailwind as we think about 2025 year-over-year? Howard Yu: Yeah, Mike, I think it depends on when we're able to get to a full agreement here as it relates to the joint venture structure. As it is today, those losses associated with cups are still flowing through right now in the quarter and so timing matters here. If we assume that we had talked about $40 million historically and we go through the first quarter, get this transaction done, and it's probably somewhere around the $25 million that we'd see improvement year-over-year. Mike Leithead: Okay. That's great. And then second, on the share repurchase, if I do the math, it's about $1.3 billion, I believe, of repurchases this year, which today is about 8.5% of the company. So is cups and buybacks, the largest drivers of the 10% year-over-year EPS growth? Or just how should we think about for beverage can earnings growth compared to 2024? Howard Yu: I mean, I think we're going to see some. Obviously, operating earnings growth is going to matter. When we talked about the algo, certainly -- Dan talked about the North America maybe a little bit of challenges there. But we feel very good about our growth profile, both in terms of volume and the leverage associated with operating earnings in EMEA as well as in South America. We're bullish on Argentina and the green shoots that we're seeing there, the macro are going to improve. And so I think that there's no reason to believe that we're not going to be able to achieve that healthy algo in that region as well. And then as you said, I mean we are going to have a significant amount of share buyback and the like. One thing to keep in mind is that we will see less interest income this year because with the proceeds associated the Aerospace sale, we had over $42 million of interest income that won't repeat year-over-year. Mike Leithead: Got it. Thank you guys. Howard Yu: Yes. Operator: Our next question is from the line of Edlain Rodriguez with Mizuho. Please proceed with your question. Edlain Rodriguez: Thank you. Good morning, guys. Dan Fisher : Good morning. Edlain Rodriguez: Quick -- I mean, big picture question, Dan. I mean, in terms of now you have questions that whether beer or alcoholic drinks, might be bad for your health. I think somebody has said it's dangerous for you. So at the margin, this will make some people think twice about ranking alcohol being included. So of all the things that you think about, that keeps you awake at night, is this one of them? Is this -- should this be one of them? Like any thoughts there would be appreciated. Dan Fisher : You're probably asking the wrong guy, because I enjoy my alcohol. Edlain Rodriguez: You and me, both. Dan Fisher : Yes, yes. I really don't. We -- I think we've known it's probably not at moderation everything. I mean I don't want to go down this path with you. But the thing that keeps me up at night right now is the health of the end consumer in North America. That's what keeps you up at night. All of this other stuff is noise. And that's what I'm hearing from our customers as well. So until which time I can sit through a return to some normal spending patterns by the end consumers. I -- this stuff is really -- it's on the radar as it should be, but it's not -- we're not losing sleep over this. This is not going to in the next three to five years, create a challenge for us and the slides. In fact, beer, you're counting beer growth everywhere else in the world. I mean, if beer doesn't grow, then we're not growing in the can. So doesn't seem to be a concern in other parts of the world, but it seems to be a focus of a lot of conversation in North America. So it's dislocated in that sense. Yes, I wish I had a better answer for you, but... Edlain Rodriguez: No. No, that's good enough. And just a follow-up in terms of the share buyback. I mean, of course, the share price has come down quite a bit over the past couple of weeks, months. Like what are you thinking in terms of the pace of the share buyback? You just should we be thinking like more aggressive in the near term or just going to be like more disciplined systematic throughout the year? Howard Yu: Edlain, I think you've seen our behavior here, and I think I indicated even earlier that we bought back $290 million worth of shares in a month plus. So the answer to your question is, yes. We see this as an opportunity for us to be overly aggressive perhaps. And with the value of the stock, we're going to lean into that here in the short-term. Certainly, recognizing that we'll exceed -- likely exceed the $1.3 billion worth of shares here in 2025. Edlain Rodriguez: Okay, perfect. Thank you very much. Dan Fisher: Yes. Operator: Our next question comes from the line of Chris Parkinson with Wolfe Research. Please proceed with your question. Chris Parkinson: Great. Thank you so much. Can you just us a little bit more color since you went over the beer thesis on what you're seeing in energy markets, in particular, in both the U.S. and Europe. There's been a lot of noise over the last six to 12 months, so just hoping to hear kind of the best updates there as well? Thank you. Dan Fisher: Yes, I think Europe is probably pretty easy. Our Europe energy portfolio is growing at high mid-single-digits. So, -- and that has continued to perform that way for the last five, six, seven years. So, not a lot of change on that front. I think in North America, there are tiers to the energy drink classification. One product, I think one of the larger products, it's definitely tied to Hispanic population, the construction industry. And so interest rates matter to that particular product. Others have different effects, the end consumer though matters. Now, what we're seeing kind of right out of the gate is more aggressive pricing, and we're seeing growth through January in the Energy segment. So, I think there -- they're in a place where they have a lot more price, I think, to work with relative to their products to push for growth in some instances, and I think you're going to see that, a much more competitive baseline to grow volume and grow share, which is good. I haven’t seen the same behavioral pattern in beer. But Energy looks to be an area where I think you'll have a return to growth in 2025, in North America, and it will maintain growth at similar rates in Europe. Chris Parkinson: Got it. And just in terms of your -- the longer term South American algo putting, let's put Argentina aside for a second, there's been a lot going on once again in terms of customer -- or let's say, industry bankruptcies to a few rain carnivals, post-COVID all that stuff. When you take a stance right a year right now, heading into 2025, how much confidence do you have in that growth rate, at least in Brazil and forecasting that aluminum should still be the primary substrate -- versus glass and everything else? Just any comments there would be also very helpful. Thank you. Dan Fisher: Yes. We're -- we believe that there will be growth in Brazil in the kind of 2%, 3%, 4% range next year. But for us, we'll grow in excess of 4% to 6% because Chile has returned to growth, Paraguay is growing at double-digits, Argentina is returning and inflecting the growth. So, we've got some -- where we had unfavorable comps this year, we'll have favorable comps next year in those economies. And Brazil will actually grow at a slower rate than we will because of our portfolio. But we believe Brazil will grow, but to your point, it's probably a little bit more muted than what you saw this year. Chris Parkinson: Thank you. Dan Fisher: You bet. We'll do one more question, Christine. Operator: Our final question comes from the line of Arun Viswanathan with RBC. Please proceed with your question. Arun Viswanathan: Great. Thanks for taking my question. I hope you guys are well. Maybe I could just get first your thoughts around these two beverage can plant acquisitions. Could you provide maybe your thoughts on ROIC or payback period, if there's any synergies? What can those two can add to your outlook over the next, say, two to three years, maybe from an EBITDA standpoint, if at all, or free cash flow? Thanks. Dan Fisher: Yeah. I think the -- so we're only acquiring one. The other one would just be a new facility. So we began in growth, volume growth that we can't serve today in the Northwest, and then we be positioning the supply closer to the customer. So probably $20 million additionally a year back half of 2026, most likely beginning of 2027, and we'll hit a $25 million to $35 million EBITDA run rate in the beginning of 2027 for the Florida can acquisition. So about a four-year to generate a positive EVA. Arun Viswanathan: That's great. Thanks, Dan. And then just back to the beer question. So it sounds like there is I mean, I can appreciate the large customers of yours could acquire some nice growing properties. But what are they going to -- what is it really going to take for them to accelerate beer, because as you said earlier and throughout the call that if you're not growing very globally, it's going to be difficult, especially in North America. So is it something where they can take a leadership position within the category? Was that done in CSD? Is it going to require some new beverage development? Or what do you think -- and what are you hearing from them as far as ways to really energize that growth profile? Dan Fisher: Yeah. In beer specifically, so I guess there's beer volume writ large and there's beer in cans. So I still like our ability to move up straight needle over time. In the baseline, and that's -- we've been growing in beer for a decade plus. So a lot of it has to do with substrate. But then when you look at portfolios, there's certainly been disaggregation from having too many too large of a portfolio, so really moving to a more efficient delivery of brands that they believe are going to win with an affordability lens on that. And so we're helping to make sure that we have a more strategic supply chain. But in the -- if you look at the largest brewer in the world, I mean, their portfolio, they have the largest ready-to-drink cocktail. They have the fastest growing domestic like beer. So there are -- I think you're really have to look within these portfolios, what they're doing, what they're going to do? And do you believe in that trajectory? And how can help play a role in that. So I think innovation matters, I think you'll see an investment in a lot more non-alcohol moving forward. It's not going to be a surprise to see that. But when you find a winner, I think -- and it might be I just look -- I look at these traditional beer players as beverage companies, and they've got to get that right because they own the distribution patterns, they own the shelf space to a large extent. And so they got to put things on the shelves that are going to sell. And there's a greater likelihood that it's going to be in a can than any other format. And so that's sort of how we're thinking about it. But the beer question, I think that's the right question, but does it have to be beer. Arun Viswanathan: Thanks. Dan Fisher: Thanks, Christine. We'll leave it there and look forward to talking to you again here at the end of the first quarter. I hope everybody stays safe and healthy. Operator: Thank you. Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.

Operator: Greetings and welcome to the Ball Corporation Third Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Brandon Potthoff, Head of Investor Relations. Thank you, sir. You may begin. Brandon Potthoff: Thank you, Christine. Good morning, everyone. This is Ball Corporation's conference call regarding the company's third quarter 2024 results. The information provided during this call will contain forward-looking statements. Actual results or outcomes may differ materially from those that may be expressed or implied. We assume no obligation to update any of the forward-looking statements made today. Some factors that could cause the results or outcomes to differ are described in the company's latest Form 10-K, our most recent earnings release and Form 8-K and in other company SEC filings as well as company news releases. If you do not already have our earnings release, it is available on our website at ball.com. Information regarding the use of non-GAAP financial measures may also be found in the Notes section of today's earnings release. In addition, the release includes a summary of non-comparable items as well as a reconciliation of comparable net earnings and diluted earnings per share calculations. References to net sales and comparable operating earnings in today's release and call do not include the company's former aerospace business. Year-to-date net earnings attributable to the corporation and comparable net earnings do include the performance of the company's former aerospace business through the sale date of February 16, 2024. I would now like to turn the call over to our CEO, Dan Fisher. Dan Fisher: Thank you, Brandon. Today I'm joined on our call by Howard Yu, EVP and CFO. I will provide some brief introductory remarks. Howard will discuss third quarter financial performance and key metrics for 2024. And then we will finish up with closing comments and Q&A. Before I talk about the third quarter, I want to take a moment to recognize our team in Tampa, Florida, who have shown incredible resiliency while dealing with the impact of 2 devastating hurricanes. Our thoughts are with everyone impacted by these terrible storms. We are fortunate that all of our employees are safe and that our Tampa facility avoided major damage and was back up and running quickly. The Ball Foundation supported critical relief efforts by providing monetary donations to organizations with teams actively supporting impacted cities. And in conjunction with customers, we donated over 250,000 cans and bottles of drinking water. Our thoughts remain with the communities impacted by these terrible storms and we will continue to support our employees, customers and communities through our global employee giving program. I would also like to welcome our new colleagues who recently joined Ball following our October 29 acquisition of Alucan Entec, a European extruded aluminum aerosol and bottle technology leader. As the demand for sustainable aluminum packaging continues to grow among customers and consumers, this transaction is a capital-efficient way to add incremental capacity to expand our extruded aluminum aerosol business in Europe, while also allowing us to serve the growing extruded aluminum beverage bottle market and diversify our customer base across the continent. Turning to business performance. We delivered strong third quarter results and year-to-date have returned approximately $1.4 billion to shareholders via share repurchase and dividends as of today's call. Reflecting further on year-to-date 2024 performance, aluminum packaging continues to outperform other substrates across the globe. In EMEA, third quarter volumes remained strong, driven by continued investment by our customers in canned filling across the region. In South America, softer-than-anticipated volume performance was driven by our exposure to Argentina and supply-demand tightness in Brazil. In North America, persistent economic pressure on the end consumer and our exposure to U.S. domestic beer led to softer-than-expected volumes. Our regional performance culminated in Ball's global beverage can shipments being essentially flat year-over-year in the third quarter and up 2% year-to-date. For a complete summary of regional shipments for the third quarter, please refer to today's earnings release. Consistent with our previous commentary and given our customer mix and year-to-date regional volume performance, we now anticipate full year global shipment growth in the low single digits range. Key drivers for our company's performance in 2024 continue to be the benefits of deleveraging, repurchasing shares, improving operational efficiencies and leveraging our well-capitalized plant assets to grow the use of innovative, sustainable aluminum packaging across channels, categories and venues. Based on our current demand trends and the previously mentioned drivers, we are positioned to grow full year comparable diluted EPS mid-single digits plus of 2023 reported comparable diluted EPS of $2.90 per share, generate strong adjusted free cash flow, strengthen our balance sheet and return a value in excess of $1.6 billion to shareholders via share repurchases and dividends in 2024. With that, I'll turn it over to Howard to discuss the quarter and key metrics. Howard Yu: Thank you, Dan. Turning to our results. Third quarter 2024 comparable diluted earnings per share was $0.91, versus $0.83 in the third quarter of 2023. Third quarter comparable net earnings of $278 million were up 6% year-over-year, primarily due to strong operational performance and price/mix, leading to improved year-over-year performance in North America, EMEA and South America. In addition, we had lower interest expense. In North and Central America, segment comparable operating earnings increased 4% and were in line with our expectations despite a softer U.S. mass beer category and stretched end consumer. Benefits of effective cost management and plant efficiencies across our well-capitalized plant network more than offset for the impact of lower volumes. Our team has done a great job improving operational efficiencies, lowering costs and effectively counter-measuring risk. And in future years, when end customer demand inflects more favorably, we are set up to more profitably serve our customers' growth. In EMEA, overall segment volumes were strong and segment comparable operating earnings increased 24%, matching our expectations entering the quarter. Recent demand trends remain favorable and the business is on track for significant year-over-year comparable operating earnings growth in 2024 driven by improving operational efficiencies and volume growth. In South America, segment comparable operating earnings increased 28%, while segment volumes declined due to continued weakness in Argentina and supply-demand tightness in Brazil late in the quarter. During the third quarter, consumer conditions in Argentina demonstrated some gradual signs of recovery and we continue to monitor the dynamic economic situation in Argentina and potential scenarios that can impact results. In Brazil, strong demand in the month of September outpaced our ability to service that demand. We remain bullish about Brazil and our ability to deliver year-over-year comparable operating earnings and volume improvement as we enter the summer selling season in South America. Looking at the businesses within other, the aerosol business performed well and operating earnings were helped by insurance proceeds received during the quarter. The can plant and beverage packaging, other were in line with our expectations and we continue to see growth opportunities in India. Lastly, while our cups business slightly improved operating earnings year-over-year, the growth of this business has not been at the level we initially expected. And as a result, the company is currently evaluating various options for this business. Moving on to additional key financial metrics and goals for 2024. These reflect very consistent figures to those provided throughout the year. We continue to anticipate year-end 2024 net debt to comparable EBITDA to be below 2.5x. While we are currently at 2.2x at the end of the third quarter, net debt to comparable EBITDA may nudge slightly higher by year-end as the company continues payments of tax due on the gain from the sale of aerospace. 2024 CapEx is on track to be in the range of $650 million, a year-over-year reduction of $400 million and largely driven by carrying capital elated to prior year's projects. We remain on track to achieve our adjusted free cash flow target. Share repurchases are expected to be in excess of $1.4 billion by year-end. Through today's call, we have repurchased approximately $1.2 billion in shares year-to-date. Our 2024 full year effective tax on comparable earnings is expected to be slightly above 21%, largely driven by lower year-over-year R&D tax credits associated with the sale of the company's aerospace business. Relative to the estimated tax payments due on the aerospace sale, we have paid a total of $484 million as of the end of the third quarter and we now expect our total taxes on the transaction to be in the range of $950 million. Full year 2024 interest expense is expected to be in the range of $300 million. Excluding the non-comparable aerospace disposition compensation costs, full year 2024 reported adjusted corporate undistributed costs recorded in other non-reportable are expected to be in the range of $100 million. And last week, Ball's Board declared its quarterly cash dividend. Looking ahead to the rest of 2024, we remain laser-focused on operational excellence, driving efficiency and productivity across our business and cost management and monitoring emerging market volatility. We are committed to maximizing the full potential of our company over the long term. We have executed on de-risking the corporation through debt retirement. We have no significant near-term maturities. The runway is clear for us to activate near-term initiatives to consistently deliver high-quality results and generate compounding shareholder returns. With that, I'll turn it back to Dan. Dan Fisher: Thanks, Howard. The business is operating well and we have line of sight to growing our 2024 comparable diluted EPS mid-single digit plus. While the consumer backdrop remains volatile, we will remain disciplined and through the strength of our portfolio and the unwavering dedication of our employees, we are confident we will deliver on our commitments laid out at our Investor Day. We are focused on executing our purpose and our promise was certainly on display during the third quarter. By the care and support we have provided our employees, customers and communities, by enabling the greater use of aluminum packaging with our bolt-on aluminum aerosol acquisition and by working together to deliver strong results, operating efficiencies and the consistent return of value to shareholders to ensure we win together over the near and long term. We will strive to deliver innovative aluminum packaging solutions that can lead to a world free from waste and continue down the path to deliver compounding shareholder returns in 2024 and beyond. Shareholder value creation remains our focus. And going forward, we anticipate exceeding 10% per annum diluted comparable EPS growth, including in 2025. Consistent delivery of high-quality results and operational performance, coupled with significant share repurchases for the foreseeable future, in addition to dividends, will drive shareholder value creation. We appreciate the work being done across the organization and extend our well wishes to our employees, customers, suppliers, stakeholders and everyone listening today. Thank you. And with that, Christine, we are ready for questions. Operator: [Operator Instructions] Our first question comes from the line of George Staphos with Bank of America. George Staphos : I guess the first question I had regards the operational excellence work that you've been doing. And what might you have seen year-to-date, what might we see either in absolute terms or sequentially into 4Q and then into 2025? And what I'm really trying to get is, is there any sort of incremental catalysts that we might be able to see from the cost side given that things are pretty much status quo on the top line both in terms of volume and price/mix? Dan Fisher: Yes, George. I think you'll see for the next couple of years a continuance of sort of 2% to 3% of our cost structure, is what we're trying to drive to in terms of an overall goal of productivity. Now there's a chunk of the aluminum that's built in there that's tolled, which you really don't have a great deal of ownership on how to drive productivity there. But the teams are continuing to fill the funnel with projects and build on that. I think the simple way to think about it, George, is we are planning better. By planning better, that results in less conversions and less turnover of label changes. That creates less spoilage and less overtime. And so those fundamental ratios got out of whack during COVID. We've taken some of the higher-cost, less-efficient assets out. So you're seeing that first wave of productivity gains back half of last year and into this year. And then the second half of this year and into next year, the manifestation of really this operational excellence, lean, standardization, continuous improvement. But they're going to come through those primary factors. And a little bit of volume will go a long way in also improving that and improving our leverage flow-through. I think you can see we're making more money on a per can basis through a lot of the actions we've taken. I think we can maintain that, offset inflation, offset merit increases and maybe even margin up a bit more moving forward. In North America specific, my comments are really about getting the volume breeds more tailwind and leverage and it also enables us to step into these efficiency gains where it really shows up in those areas. And then further down the road, it enables you to grow, absent capital investments at the rate we've seen historically. So that's how we're looking at it. And I think you'll start to see the incremental nature of the standardization and the process improvements now and moving forward. But the easier stuff, candidly, not easy in terms of dealing with your people and closures of plants but easier in terms of retiring assets that really weren't fit for purpose for the long term. We're kind of through that wave. George Staphos : Understood. My next and I'll turn it over. You mentioned that you will be ready for the summer season in Brazil, yet you had some capacity constraints in September. So it sort of begs the obvious question, so how do you manage that? Is there capacity that is mothballed that you can turn back on that will allow you to hit the market in an appropriate way? And then taking a step back, a recurring question topic for Ball is obviously maturity, to put it one way, of mass beer. What can you do with the portfolio as you look out to the next couple of years to either change up your mix or get a higher return if it's required in that mass beer portfolio? Is it, in fact, I realize EVA is something you don't emphasize quite as much. Is that portfolio EVA positive and doing what it needs to do? So South America and mass beer. Dan Fisher: Yes. Thank you, George. Start with South America. So this is just a function of, obviously, in the second and third quarter, in the summer hemisphere, you are curtailing. So the answer is, it got hotter much faster in Brazil. And so we have uncurtailed the lines and we should have got ahead a little bit of the safety stock build. So you're basically 2 to 3 weeks of not easing into peak season but hitting it full on. And that probably cost us somewhere in the neighborhood of 300 million to 400 million units. So those lines are turned on now. We do have capacity that can help serve that market, so it's really more of a Q3 phenomenon. And so that's been put into place. Obviously, you're running incredibly tight right now to make sure that when demand inflects, the one thing that we're preserving obviously is earnings and we probably managed it a bit too tight in Brazil. But I think we're on our toes moving forward and our partner in that region is doing quite well. And we'll continue to do that during peak season. That's more or less their focus period, generally speaking. And then on the mass beer, it's a great question, right? We've acquired in North America. First of all, historically, why are you there? EVA drives you to profit pools, big profit pools, versus others. Beer also, keep in mind, it's like, if you look at the category, it has declined for 20 years. However, the substrate shift in the cans has more than offset that. And the innovation in those categories have more than offset that. So what we need to be aware of and ensure is we're with the right strategic partners in that category. Some folks are winning and we're with them, but we're also with folks that are not doing well. And so we've already started some elements of rebalancing that portfolio. It does become a bit more challenging because the acquisitions over 30 years have assets right across the street from breweries. So there is some connective tissue there that it's not a quick pivot. At the same time, we've always done a nice job of creating new white spaces, innovating with the winners. We're seeing some of those gains. But given the weakness of the end consumer, you won't start to see that appreciate at a rate that's more visible, I think, in the top line results until you see a little bit more relief to the end consumer by virtue of interest rate cuts and things of that nature. We've been on this particular topic, George, for a handful of years now. I think we're moving in the right direction. We're with the folks that are going to win in this category. And the other blurry line here is, don't just focus on historical beer companies. Focus on beverage companies, alcohol companies. And one of our biggest partners has the fastest-growing RTD, probably the fastest-growing non-alcohol beer and the 2 fastest-growing domestic light beers. So there are elements of winning with the right brands, winning with portfolios, winning with folks that are innovative. All of those factor into that. It's not a quick pivot but it's one that we're encouraged about the direction of flight we're on. Thanks for the question. Operator: Our next question comes from the line of Ghansham Panjabi with Baird. Ghansham Panjabi: I just want to build on your last comments and go back to beverage North America. Can you just give us a bit more color on how the other categories performed, especially some of the premium categories for that segment in this region? And simplistically, what is the catalyst for volumes as we look out to 2025 for this segment? And just as a corollary to that, are you winning your share of new business as it comes up in North America? And if so, how do you measure that? Dan Fisher: Yes. So I think first things first, there's probably a macro comment here. I am quite encouraged actually for 2025 on a couple of fronts, right, that have been the drags for the end consumer. One, we finally saw the rate cuts and the manifestation of, I think, the Fed recognizing that folks need more discretionary spending power. I think versus 2019, we've got 8% less discretionary spending power. So I think that's manifesting in the food and beverage categories, there's been a lot more inflation. And so that's really weighing on the end consumer there. So the rate cut starts to help. We've also seen an acceleration of savings here over the last 6 to 8 weeks. I think the uncertainty of the election, it would be nice just to get through that period. So the combination of those 2 things are certainly going to -- when we're talking to all of our customers, they're very encouraged about 2025 on that stage and on that front. So you're going to see in the beer side, in the beer category, in the alcohol category, it is going to be folks that are paying attention to the low end on the price paradigm and on the innovation, high end. And some of our customers have better portfolios to do that than others. And they will lean into that and they will win. And as they get a tailwind of discretionary spending coming back, that category will get better. And so we're bullish on seeing growth next year in that category writ large. And we're -- I think we're with the right folks that are going to do well in that category. And then secondarily, remind me your -- sorry, your second question there, Ghansham. Ghansham Panjabi: Yes. I was just -- the premium subsegments that you're exposed to in North American bev, how did they perform? And then also you're winning -- are you winning your share of new business in the region? Dan Fisher: Yes. I think -- and I think you're hearing this pretty consistently. This year was -- you saw some contractual shift from us to a couple of our competitors. That was done -- 2022 is when that contract was -- that contract shuffle happened. Since then, it's been a really rational marketplace relative to that. And we should grow in line with the market moving forward. We've won business that has offset some of the contractual headwinds we were facing. . I think the issue is, underlying those wins, is then a backdrop of flattish energy this year and beer and then domestic beer on a decline. So the combination of those 2 have kind of muted the wins that we've had. But it's not hard to figure out whether you've won contractually or not. I think the share positioning all year has been a manifestation of mix, category mix, winners and losers within categories and where you sit within those portfolios and categories. Ghansham Panjabi: Okay. Got it. And then for my second question, maybe for you and Howard as well, just in terms of what is the starting point for base volumes for 2025 that kind of gets you to that 10% plus earnings target that you've outlined or reaffirmed, I should say? Dan Fisher: Yes. I mean, we're -- as you know, our process, we are in the throes of it right now. But initial stages say we're in line with the -- our long-term algorithm of that 2% to 3% range for top line. It will be stronger in Europe and South America. We feel like 2025 will be better than the run rate that we're currently experiencing in North America. So we'll have the volume we need and we'll have the backdrop of the efficiency gains we need and we're still holding the line on $650 million -- or in line with D&A in terms of capital investment. So the share repurchasing and then the second half algorithm of the shares we purchased this year are all going to contribute to some really nice tailwinds into '25. Operator: Our next question comes from the line of Jeff Zekauskas with JPMorgan. Jeffrey Zekauskas: I think your restructuring charges ex insurance recovery was a little bit more than $90 million. Is that all related to Santa Cruz in Brazil and the Kent, Washington plant? Or are there any other curtailments or closures that are involved in that charge? Howard Yu: Yes, Jeff. I think some of that -- the vast majority of that, I believe, is related to some of these closures that we've had. We've also had a closure in [indiscernible] that is also reflected in some of that number, too. The other component of this, I would say, is around IT and related to -- if you're thinking about it in the context of non-continuing operations related to the sale of aerospace. And so that's a component of that, that you would see in there as well. Dan Fisher: Jeff, we also took, through the op model restructure, we did take some actions midyear. So there was severance associated with a number of individuals here as we were rightsizing the business post aerospace acquisition. Jeffrey Zekauskas: And then secondly, when you reflect on your aluminum cups initiative, what do you think are the key reasons that held that initiative back? Dan Fisher: I think the biggest -- the 2 biggest things, biggest issue is inflation, weakened consumer, a price point that's unsustainable relative to what people are willing to pay for sustainability. I don't think anybody was anticipating kind of the world we're living in here right now in terms of the inflationary pressures and the reduced discretionary spend of the end consumer. So that was a challenged environment for sure. And then I think the downstream recycling infrastructure that's required is also far more complicated. And we know it pretty well but I think in some of the service industry, airports, travel, transportation, we found that it presented some pretty significant barriers to move quickly, at least on that side of the house. Operator: Our next question comes from the line of Arun Viswanathan with RBC. Arun Viswanathan: I guess first question was, I think there was an $85 million closure charge in the quarter. Is that correct? What was that for in North America and South America? Howard Yu: Yes. I think we just answered that question, same to what Jeff was asking, Arun, is the closures associated with the reductions in Kent, some of these other ones that we've done here in North America, as well as the ones that we've done in South America as well. And so I think you're asking fundamentally the same question. And restructure, of course. Arun Viswanathan: Okay. Great. And then just on the -- it seems like a large amount though but nevertheless, just wondering about the volume progression, how you see that kind of evolving over the next few quarters. I know that you have some of the easier comps in the back half of this year. Those will start dropping off. So do you expect kind of -- how do you kind of expect to make that greater than 10% -- or 10% or greater earnings growth? I know you've laid out some low single-digit growth targets in the past at your Investor Day and so on. But how are you thinking about can growth from here? Dan Fisher: Yes. I think the easier comp would only be in Europe for the fourth quarter. Fourth quarter was incredibly strong in South America. There was a little bit -- so a little bit of Argentina too that we'll have to offset there. North America will be a reflection of end consumer health in the fourth quarter, how quickly the rate cuts, and I think the election stabilization there and the people are stopping to save money and spend money, those will all help that. Enter '25, we're feeling confident about all 3 regions. I think we've answered this question as well but bears repeating. 2% to 3% growth, in line with our Analyst Day expectations, led by what we laid out at Analyst Day as well. Europe will continue to grow at a healthy rate. South America will grow at a healthy rate. North America will be kind of in that lower end of the 1% to 3% range based on what we see today. But there's hope coming and optimism coming in North America where they're finally getting after the rate cuts and that's what our end consumers need. So that, coupled with consistency of share buyback, returning value and then you'll get the compound effect of the lower weighted average shares going into 2025. So 2025 will -- should shape up to be a nice year for us. Howard Yu: Yes. I think, Arun, maybe just to piggyback on that, what we did outline during Investor Day is that we're on this journey to reduce costs on a gross basis of $500 million over the next several years. And so -- and you've heard us talking about the traction that we're getting here in 2024. And I would expect that we would continue on this journey as we're just starting it really. And so 2025, '26 and '27, all of those. And so as Dan indicated, we have a very high level of confidence in being able to deliver the 10-plus percent EPS next year. Arun Viswanathan: And just real quickly on the footprint. I know that you guys have obviously closed some plants, as you noted. Is that kind of come full circle? We've been hearing that utilization rates for your system may be in the low 90s. So would that require more closures, or do you feel pretty good about where you are with the footprint? Dan Fisher: Yes. We feel good about the footprint at this point. Operator: Our next question comes from the line of Anthony Pettinari with Citi. Anthony Pettinari: Just maybe piggybacking on that last question. Given the strength in EMEA, can you talk about what your operating rate in Europe is? And then just in terms of the ability to meet, I think, 3% to 5% growth long term that you outlined at the Analyst Day, how long can you go before maybe some debottlenecking projects or maybe even possibly greenfield? Can you just kind of talk about the system and your ability to meet demand there? Dan Fisher: Yes. In Europe, I don't -- Anthony, we don't see a need for an additional greenfield in Europe, I think Mainland Europe for the next 2 to 3 years. That's sort of our planning period that we're looking at. We did build, as you know, 2 new facilities that have ability or run rate to add lines. And so we'll maximize that. We'll also maximize, to your point, where we can speed up lines and add process equipment and debottleneck and all of the things that you're familiar with. The one caveat will be that EMEA region, there are areas that are growing even at a faster rate. And -- but they're a little bit more volatile markets, so you have a bit more patience there, places like Egypt, places like Turkey, India is in that mix. So I would caveat or pull those regions out of my initial comments. But all of what we're talking about here is in the envelope of our spending capital at D&A. We can do all of what we need to, to help grow specifically Europe and South America at those outsized growth rates. I think we spent the capital we needed to in North America. So we're -- the team is laser-focused on ensuring that we're returning value to shareholders and enabling the investments in the areas that are going to give us the greatest payback. Howard Yu: Maybe one more thing to add there, Anthony, I would say, on the substrate shift, Europe is still relatively early in that journey. And so we're seeing a good lift and we will continue to see that. I think the substrate shift is something less than 32% as we speak today. And so there's plenty of runway there as well. Anthony Pettinari: Okay. That's very helpful. And then just a quick question on kind of the consumer weakness that you've seen in North America. You've talked about kind of standard sizes versus specialty sizes versus super specialty, I think at the Analyst Day, cups were kind of included in that super specialty category. And obviously, it's been a bit weaker. I'm just wondering, when you look at kind of the broader portfolio, are you seeing kind of a mix down in North America between specialty cans and 12-ounce where you're more likely to sell a 6-pack of a 12-ounce standard can and some of those higher ASP products in specialty sizes are not growing as fast or maybe you're kind of losing some mix there? And is that impacting the overall profitability of the business, or is that cutting it maybe a little bit too finely? Dan Fisher: I think, Anthony, it's cutting it a bit too finely. But you are on to something here and I'll just draw this out a bit. So you look at energy specifically, right and you look at the end consumer for energy categories and where they consume those products, they shop at a C-store channel. And many of these individuals are in construction or they're in the service industry. And overwhelmingly, the majority of these consumers are Hispanic. The Hispanic unemployment rate is nearly 6%. And so when we talk to our energy customers, they're telling us that the interest rates and that particular category in that channel have been impacted. Those are overwhelmingly specialty cans in that category but they're not -- they're the less special variety. So it's 16 ounce, right? And so we -- that's what's happening within the energy category right now. So that starts to relieve itself, interest rate cuts and a couple of other things. So that's why I'm more bullish about moving into 2025 with some tailwinds in and around that. But you do have to slice it down to a pretty discrete level to kind of parcel out can size, channel, customer, regional aspects to it. Specialty is still special and it's still tight. It's just like the general malaise, I think, of the end consumer is what we're experiencing right now across all categories and all can sizes. Operator: Our next question comes from the line of Stefan Diaz with Morgan Stanley. Stefan Diaz: Maybe to start and piggybacking off George's question around South America. Can you tell us what the volume number was in Brazil and maybe what you think the market grew in the quarter? I understand it's a seasonably slow period there. And maybe additionally, if you could speak to the profitability upside versus Street expectations, despite the volume headwinds you faced in the quarter. Is that more operational excellence? Or was there potentially some more end shipments in the quarter? If you could just dig into that a little bit, that would be helpful. Dan Fisher: Yes. Thanks. Nearly double-digit growth in South America and Brazil, specifically, sorry. And we were flat to slightly down and I think we left about 3% to 4% of growth on the table by not matching our production with demand. Our primary strategic partner did not win in the quarter. But we expect them to do well in the fourth quarter and the first quarter, which is, of course, their peak season, which you referenced. And then I would say it wasn't actually end mix. Typically, as you know, we make those ends in a very favorable tax jurisdiction. So that mix can increase or decrement profitability as a result of that mix but we're shipping less ends actually. This is all improved performance and really appreciate the team with regards to that down in South America. So hopefully, continued margin benefits through our focus on operations with a little bit of a tailwind there in South America bodes well for us. I think we'll certainly make more money in Q4. And then it's -- for us, it's the culmination really of the countries outside of Brazil that will dictate whether we're growing or we're not. We'll certainly grow for the year and grow in line with expectations that we've laid out. But whether we grow mid-single digits or closer to low single digits, I think it will be all indicative of what happens in Paraguay, Uruguay, Peru, Chile and Argentina and that recovery there. Stefan Diaz: Great. And then I'm glad to hear that everybody is okay in the Tampa region following the storm there. That said, with the 2 storms in the Southeast, do you believe that they had any impact on North American volume in the quarter? Dan Fisher: No, I don't. I think we lost almost 2 full days, 3 days of production. But that, like you said, in a shoulder period. This would have contributed to some missed volume and probably a bridge items worth of -- had it been June, July, August time period. But we were able to -- we were able to source those customers largely from our other regional assets there. And thanks for the well wishes. Operator: Our next question comes from the line of Mike Leithead with Barclays. Michael Leithead: First question on South America. Can you help us better understand the impact of Argentina on segment volumes? If I heard you correctly, Brazil was flattish. So is Argentina down something like double the segment average? And then relatedly, how are you assessing your presence or footprint in Argentina just given all the uncertainty and volatility there? Dan Fisher: Yes. For the full year, what we're anticipating right now is -- and this would include the fourth quarter, somewhere between 500 million to 600 million units of decrement year-over-year due to Argentina volumes when you compare it to 2023. And the third quarter was approximately 270 million that Argentina was down, in the third quarter versus the prior year. So as it relates to Argentina, I'll give you, Argentina is really good when it's good and its' not so good when it's not. Having said that, we've been there the last -- 30 years ago, we stayed in that market and it's grown significantly and the can does really well there. And our 2 most important strategic partners in South America are there. They're going to continue to be there and they want us to be there to support them. Having said all that, we're eyes wide open. I think Howard and I went down in April, met with the central bank, met with the Vice President, met with the Secretary of Commerce. Everything they laid out at that time, they're executing against. So we're seeing currency controls easing. We're seeing inflation at sort of the lowest levels. Howard, I'd ask you to weigh in. Howard Yu: Yes, I think that's right. I think, if anything, it's incrementally a little bit better. And so that gives us, I think, some optimism overall as it relates to their policies taking hold and even being able to repatriate funds and things of that nature. I think that the banking system is improving a little bit there as well in the increment. And so I think that we expect 2025 to continue on that progress path. And as Dan said, this is -- Argentina has historically been a very profitable area. That all said, we do recognize that the volumes down in Argentina in the third quarter were in excess of 30%. That being said, we don't see as much of a profit impact this year as we did last year when these policies and the initial shock associated with that, those churns had happened. So overall, I think we're going to be watchful and mindful and doing a lot of scenario planning, which is what we do. But we feel as though the long-term prospects still remain quite favorable for us in Argentina. Michael Leithead: Great. That's sounds super helpful. And then secondly, can you talk a bit more about what the Alucan acquisition brings to your existing extruded aluminum business? And are there other aerosol or adjacent opportunities in the M&A pipeline still out there for you guys? Dan Fisher: Yes. Well, I think first things first, it's -- one of the facilities was actually part of our original investment in this space. And so we've actually run the plant in Spain, some of our employees have. So we know it well and we know the customer base very, very well. They also built a new facility in Belgium. So we're stepping into a footprint that will enable us to grow incrementally without having to build a greenfield facility. And that is a business that has been growing mid-single digits, high single digits. Very encouraging. And so we were faced with a number of capital allocation decisions and this was just uniquely presented. The individual who was the owner is retiring. And so you know this, anything in M&A, it all looks good on paper but you have to have a buyer and a seller and this was -- we were the right owner for it. And yes, we're excited to welcome these folks on board. So that came nicely and there are other opportunities within the space. It's pretty fragmented. And so we -- where there's an opportunity and there's a buyer and seller, I mean this is -- these are really nice bolt-ons for us and fits well within our capital allocation structure and we continue to return value to our shareholders. So all the stars lined on this one and so hopefully, there are more of those out there. Operator: Our next question comes from the line of Josh Spector with UBS. Joshua Spector: I apologize if I missed this but I wanted to ask specifically on the 4Q EPS expectations. So last call, you talked about fourth quarter being up maybe about a 10% kind of normal growth. You reiterated your mid-single-digit growth for the year. So that's, at the low end, that could mean that EPS is flat or maybe even slightly down. So can you just clarify what your expectation is for the quarter? Howard Yu: Yes, Josh, what I would say is that we did have a little bit of improvement in Q3. We had our insurance proceeds. I think we outlined that in our prepared comments as well that came in associated with the Verona fire. And so that was probably $0.02 that was pulled into Q3 based on timing. So that comes out of Q4. That said, I think that the expectation is that Q4 will continue to increment upwards as it relates to EPS. And as we said, that would probably be a mid-single digit, mid-single-digit plus range as well to get us for the full year in that range. Joshua Spector: Okay. That's helpful. And I wanted to go back to one of the earlier questions, just on the cost savings and efficiency. Just you talked about scenario planning. I guess if we're scenario planning for next year and saying maybe there's a scenario where volumes are more flattish versus up low single, what kind of cost efficiencies or earnings could you see in that scenario from what's in your control and what you're doing today? Howard Yu: What I would say, Josh, is that we're focused in on controlling what we can and making sure that this operational efficiency standardization journey that we're on continues to move forward and we get that -- we continue to gain traction. That all said, as Dan outlined, we're in the throes of our annual process as we look at 2025. And so we'll have some more prepared comments for you with our Q4 earnings. Operator: Our next question comes from the line of Edlain Rodriguez with Mizuho. Edlain Rodriguez: I mean just a quick observation on Argentina. Are people really drinking less because of this tough economic conditions? Because you would think they would want to forget the problems. And so I guess, like not everyone is like my friends down there. So a little surprising there to see volume down so much because of the economic conditions. So if you go into Europe then, again, we've been seeing like a nice recovery there. Like would you attribute that to improving end consumer demand? Or is that just like restocking, easier comps? Like what's really driving that strength overall? Dan Fisher: Yes. Good. So I think if you get outside of Buenos Aires, yes, dramatically less spending power in Argentina, people are drinking a lot less. Obviously -- we were just down there last week, by the way. So significantly different consumption profile than 1 year ago. And then secondarily, in EMEA, there has been 2 things that have happened this year that have been better than we anticipated coming into the year. One, the pricing of our customers have been a bit more aggressive. Now at the same point in Europe, there's a bit more control by the retailers on what you can pass through in terms of price. So there's been conscious effort by a number of our customers to go get share. Number 2, there has been relief on energy. So relatively speaking, folks in Europe don't have as much discretionary spend power as they did in '19, before the energy spikes. However, they've got relatively more in their pocket, right, than they did certainly at this time 1 year ago. So those 2 things contributed. The destocking, restocking event that you're characterizing, that will be a Q4 impact, not as much of a Q3. So what you've seen through the first 9 months are real. Maybe a bit of improvement in Q1. That was ahead of true demand because I think they lowered the inventory levels too much in Q4 of last year. So you would have seen that come through in Q1 more than you would have seen it at this point. And then it should be a relatively easier comp in Q4 because of this phenomenon that you characterized. Operator: Our next question comes from the line of Phil Ng with Jefferies. John Dunigan: Dan, Howard, this is John Dunigan, on for Phil. Appreciate all the detail, guys. I just wanted to first touch on the cups business. I mean you said you're looking at strategic alternatives. I mean, is there anything else that you're really looking to explore outside a potential sale? Is there more investment or acquisitions to bolster up the business or anything along those lines? Howard Yu: Yes. John, well, let me say first that no formal or firm decision has been made. But as we think about that business, it's just we're losing probably in the magnitude of $40 million this year and that can't continue. And so we'll look at various different options, whether that means rightsizing that business going forward. Again, as you outlined, maybe some sort of joint venture or third-party interaction there that can maybe focus more on that business. And then obviously, thinking through whether or not we wind that down. So all of those things are in play. But certainly something that we need to address here in the short term. Dan Fisher: I would not think in terms of additional capital, either via acquisition or putting it into the business. John Dunigan: Got it. I appreciate that. And then on South America, I know we've talked about it a lot. I mean, you guys said you started up just maybe a couple of weeks, few weeks behind a normal schedule and hotter weather came in. Is that something that you guys can catch up on? I mean I know you're running full out now and it seems like the summer is good but 3% to 4% maybe lost in 3Q, is that able to be recaptured in the summer selling season in 4Q, 1Q time? And then as you're thinking about the region, going into maybe next year and beyond, already running full out, is that a region that you see needing more capacity as your primary customer grows? Is it something where you can maybe pull some of the assets that you had in Argentina to help supply the Brazilian market? Maybe just what are your thoughts on this. Dan Fisher: No, I think you're thinking about it the right way. Simply put, in all of our businesses during the winter period or this low period, you're always curtailing, you're always doing maintenance work. I think you were still -- let's be honest, we were still kind of chasing the bottom of volumes in South America. It feels like we're inflecting positively now. And so it's a reframing of stocking levels, when you do your maintenance, pulling it up further earlier. So you can manage this, I think, more effectively. There's more capacity to run as opposed to curtail. We were laser-focused on driving the bottom line. And when you see a surge that's weather related to this magnitude, now, you've missed it in the third quarter, we're running, to your point, we're running our assets in Chile and Argentina and other places where we might have a bit more excess capacity to catch up. So I think we'll be better prepared for it next year in a more stable top line environment, which is really encouraging. But you kind of missed that shoulder season onetime benefit there. Operator: Our next question comes from the line of Mike Roxland with Truist. Michael Roxland: Just 2 quick ones for me. Just can you -- Dan, can you go through the cadence of shipments in North America during the quarter? And where do October shipments stand in North America at present? Dan Fisher: Yes. It was -- I would say August was okay and then things started to really slow September time frame. And as we're heading into -- right now, I think it's a continuance of that. You can see that reflected in the scanner data. But 2 things will have to happen. It's usually a 60-, 90-day impact for those interest rate cuts to flow through, #1. And #2, I think you've seen this as well. It's -- people are saving at a pretty high rate right now. And I think we got to get through next week and hopefully, there's some stabilization there. And those 2 things should help to inflect. Like I said, our customers are pretty darn encouraged about 2025, a little bit more stabilization, inflation stabilizing, interest rate cuts. But I think we're still in a level of uncertainty here as I sit here and talk to you today about Q4. Michael Roxland: Got it. And then just one quick follow-up on the strategic customer realignment mentioned earlier. Obviously, a lot of things to consider, particularly given where your plants are situated. But also to me and correct me if I'm wrong, it sounds like you're still focused on beer. I mean is there any way to really diversify more into other end-markets? Or is the strategy really just trying to realign with brands that are winning in beer? Dan Fisher: Well, we're with the brands that are winning in beer, overwhelmingly, right? It's -- there's been -- I mean, we're with all the brewers and the company that's winning the most, we've got a dramatically significant share of that position. And then I think within -- we don't look at it, I would say, Michael, as beer anymore. We look at it as alcohol. So the folks that have the best portfolio, best alcohol portfolios, we're with them. Can you reposition? Of course. I would just reiterate this. Historically, the margin in the beer space have been far better than any of the other. So you might get the growth but the diversification historically, would have come at a cost. And so the other thing about beer, just to remind everyone, it's like we weren't declining because we were taking substrate. So if you still believe that a substrate shift is there and it's going to happen, then it's not a bad place to be. But making those calculations and prognosticating, it's different now because beer now has a 70% share of aluminum -- or aluminum has a 70% share of beer. But there's still opportunities. There was another glass closure just announced this week. So I think you've got to be really thoughtful about the mix. Generally speaking, we are very thoughtful about the mix and who's winning and we generally have those, the more innovative folks, the acquirers. I think the demise of beer is a little bit overdone given the backdrop of that substrate shift. So beer in general, yes, has been declining for 20 years but it hasn't within our portfolio. And I think the end consumer softness has a lot more to do with this than the beer decline. So that's what I would posit. And Christine, we're done here and very much appreciate everybody's questions and certainly hope that everyone has a good holiday and our folks remain safe. And we'll talk to you again after the year. Thank you. Operator: Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.

Operator: Greetings, and welcome to the Ball Corporation Second Quarter 2024 Earnings Conference Call [Operator Instructions]. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Brandon Potthoff, Director of Investor Relations. Thank you, sir. You may begin. Brandon Potthoff: Thank you, Christine. Good morning, everyone. This is Ball Corporation's conference call regarding the company's second quarter 2024 results. The information provided during this call will contain forward-looking statements. Actual results or outcomes may differ materially from those that may be expressed or implied. Some factors that could cause the results or outcomes to differ are in the company's latest 10-K and other company SEC filings as well as company news releases. If you do not already have our earnings release, it is available on our Web site at ball.com. Information regarding the use of non-GAAP financial measures may also be found in the notes section of today's earnings release. In addition, the release includes a summary of noncomparable items as well as a reconciliation of comparable net earnings and diluted earnings per share calculations. References to net sales and comparable operating earnings in today's release and call do not include the company's former Aerospace business. Year-to-date net earnings attributable to the corporation and comparable net earnings do include the performance of the company's former Aerospace business through the sale date of February 16, 2024. I would now like to turn the call over to Dan Fisher, CEO. Dan Fisher: Thank you, Brandon. Today, I'm joined on our call by Howard Yu, EVP and CFO. I will provide some brief introductory remarks. Howard will discuss second quarter financial performance and key metrics for 2024. And and then we will finish up with closing comments and Q&A. We remain laser focused on creating a better, more sustainable world. During the quarter, Ball was included in the FTSE4Good Index Series, which is designed to measure the performance of companies demonstrating strong environmental, social and governance practices. This highlights our unwavering commitment towards a more circular future. Across our global organization, our employees continue to demonstrate our values in the areas of recycling, education and STEM manufacturing and disaster relief and preparedness as evidenced by our recent global volunteer month impact. During the month of April, our employees contributed over 3,100 volunteer hours across 17 countries. Thank you to our 16,000 colleagues that continue to demonstrate that we care. Under the themes that we work and we win, our team delivered strong second quarter results. Global beverage can, global extruded aluminum aerosol shipments, increased 2.8% and 5.6% in the quarter, respectively. In addition, we executed on our share repurchase plans and have returned approximately $925 million to shareholders via share repurchases and dividends as of today's call. Reflecting further on year-to-date 2024 performance, aluminum packaging continues to outperform other substrates across the globe. In North America and EMEA, second quarter volumes exceeded our internal expectations. In South America, softer than anticipated volume performance was driven by our exposure to Argentina. For a complete summary of regional shipments for the second quarter, please refer to today's earnings release. Consistent with our previous commentary and given our customer mix and incorporating second quarter and year-to-date regional volume performance, we continue to anticipate full year global shipments to grow in the low to mid single digits range. Key drivers for our company's performance in 2024 continue to be the benefits of deleveraging, repurchasing shares, improving operational efficiencies and leveraging our well capitalized plant assets to grow the use of innovative, sustainable aluminum packaging across channels, categories and venues. Based on our current demand trends and the previously mentioned drivers, we are positioned to grow comparable diluted EPS mid single digits plus of 2023 reported comparable diluted EPS of $2.90 per share, generate strong adjusted free cash flow, strengthen our balance sheet and now expect return of value in excess of $1.6 billion to shareholders via share repurchases and dividends in 2024. With that, I'll turn it over to Howard. Howard Yu: Thank you, Dan. Turning to our results. Second quarter 2024 comparable diluted earnings per share was $0.74 versus $0.61 in the second quarter of 2023. Second quarter sales were influenced by the pass through of lower aluminum prices as well as lower volumes in South America, offset by increased volumes in North America and EMEA as well as favorable price/mix in South America. Second quarter comparable net earnings of $232 million were up year-over-year, primarily due to strong operational performance, including improved year-over-year performance in North America, EMEA and South America, lower corporate undistributed costs and lower interest expense. In North America, segment comparable operating earnings exceeded our expectations and offset year-over-year headwinds associated with the US beer brand disruption. Benefits of effective cost management and plant efficiencies across our well capitalized plant network will continue to support incremental volume growth. We continue to anticipate year-over-year earnings improvement during the second half of 2024, driven by improving operational efficiencies, lowering cost and effectively managing risk. In EMEA, overall segment volumes were up stronger than anticipated. Recent demand trends remain favorable and the business continues to be poised for year-over-year comparable operating earnings growth throughout the remainder of 2024, driven by improving operational efficiencies and volume growth. In South America, our segment volumes decreased 3.2%, following a strong first quarter where volumes increased 26.3%. During the second quarter, consumer conditions in Argentina deteriorated further, though we appear to be beyond the most difficult comparisons given the timing of Argentina's 2023 slowdown. Despite these challenges, strong demand in Brazil of mid single digit volume growth and our customer mix continue to drive our business. We continue to monitor the dynamic economic situation in Argentina and potential scenarios that could impact results. We remain optimistic about Brazil and our ability to deliver sequential earnings and volume improvement as we enter the summer selling season in South America. Moving on to additional key financial metrics and goals for 2024. Very consistent figures to those provided during our first quarter earnings call and June Investor Day commentary. We continue to anticipate year end 2024 net debt to comparable EBITDA to be below 2.5 times. While we are currently at 2.3 times at the end of the second quarter, net debt to comparable EBITDA may nudge slightly higher by the end of the year as the company continues payments of taxes due on the gain from the sale of the aerospace. 2024 CapEx is targeted to be in the range of $650 million, a year-over-year reduction of $400 million and largely driven by carrying capital related to prior year's projects. We are on track to achieve our adjusted free cash flow target. And share repurchases are expected to be in excess of $1.4 billion by year end. Through today's call, we have repurchased approximately $800 million in shares year-to-date. Our 2024 full year effective tax rate on comparable earnings is expected to be approximately 21%, largely driven by lower year-over-year R&D tax credit associated with the sale of the company's aerospace business. Relative to the estimated tax payments due on the aerospace sale, the first payment was made during the second quarter and the remainder of the approximately $1 billion in taxes due will be paid throughout the second half of 2024. Full year 2024 interest expense is expected to be in the range of $300 million. Excluding the noncomparable aerospace disposition compensation costs, full year 2024 reported adjusted corporate undistributed costs recorded in other non-reportable are expected to be in the range of $90 million. And last week, Ball's Board declared a quarterly cash dividend. Looking ahead to the rest of 2024, we remain laser focused on operational excellence, driving efficiency and productivity across our business, cost management and monitoring emerging market volatility. We are committed to maximizing the full potential of our company over the long term. We have executed on derisking the corporation through recent debt retirements and we have no significant near-term maturities. The runway is clear for us to activate near term initiatives to consistently deliver high quality results and generate compounding shareholder returns. With that, I'll turn it back to Dan. Dan Fisher: Thanks, Howard. The business is operating well. And as we look forward to the second half of the year, we continue to anticipate growing our 2024 comparable diluted EPS mid single digits plus. While the consumer backdrop remains volatile due to the strength of our portfolio and the unwavering dedication of our employees, we are confident we will deliver on our 2024 guidance and long term commitments laid out at our June Investor Day. Looking ahead, we are focused on executing our enterprise wide strategy to advance sustainable aluminum packaging solutions on a global scale by accelerating our pathway to carbon neutral and unlocking additional value from within the organization by driving continuous process improvement through operational excellence. Together, we will strive to deliver innovative aluminum packaging solutions that can lead to a world free from waste and embark on a path to deliver compounding shareholder returns in 2024 and beyond. As we communicated at our June Investor Day, shareholder value creation is our focus. Going forward, we anticipate 10% plus per annum diluted EPS growth, consistent delivery of high quality results and operational performance, coupled with significant share repurchases for the foreseeable future. In addition to returning value to shareholders via dividends we’ll drive shareholder value creation. We appreciate the work being done across the organization and extend our well wishes to our employees, customers, suppliers, stakeholders and everyone listening today. Thank you. And with that, Christine, we are ready for questions. Operator: [Operator Instructions] Our first question comes from the line of Ghansham Panjabi with Baird. Ghansham Panjabi: I guess first off on 6.5% growth in the EMEA segment for 2Q. I think you mentioned it came in above your internal expectations. If you could just give us a bit more color on that, what drove that specifically? And then also how do you see that evolving into the back half of the year? Dan Fisher: I think a little bit of it. As we were transitioning out of Q1 into Q2, we were starting to see some relief, some inflation relief. So the end consumer was strengthening in pockets and couple that with a little bit more aggressive pricing by some of the customers that I would consider that we're in a more of a partnership relationship than just a customer supplier relationship. And so we benefited a bit from mix. I think this is something going on over here consistently now and I was saying it all year, it's like winners and losers or if you're a little ahead of the market, a little below, it probably has more to do with mix region by region right now than it does with winning or losing contracts in many respects. And we have the opposite mix in Europe that we do in the US where we have a heavier CSP -- heavier energy portfolio over there than when you contrast that to our North America, which is heavier on the beer side. And so we benefited from it in Europe. We anticipated some good pull through on the euro competition. It's interesting. We were actually ahead in Europe and there was some pretty crummy weather in the Nordics, in the UK and Ireland and places like that, and it's ahead of the holiday season, which can really give you a bit more of a tailwind. So it was a surprise on multiple fronts, incremental surprised, not a significant surprise. We continue to -- and you've heard us say this, we continue to be very bullish on Europe over the medium and long term just because I think the can has a lot of runway there. But some nice signs that folks are fighting for some volume there probably -- maybe even more so than they're doing in places like North America, and we benefited from mix there and expect to continue to do well there for the balance of the year and in the foreseeable future. Ghansham Panjabi: And then for beverage, North America, Central America, how did that sort of break out between US, Canada versus, let's say, Mexico and some of the other regions down there? And then just holistically then, as you think about your portfolio and the new products that the industry has introduced to higher price point items, et cetera, in context of consumer affordability. So as you kind of think about the weakness you're still seeing in portions of the North American business. How is that propagating, is it still at the low end or is it starting to permeate towards the middle consumer and the high end as well? Dan Fisher: It is -- I mean in the US, I think the US is different than the rest of the world. It's a pretty stark contrast. You even see it in one of the major brewers, they're growing at the high end brand and they're growing at the low end brand. It's kind of the premium light beer segment, that's the one that folks are trading down from. But we've seen this now Ghansham, for like 18 months. It's like we've been living this and that's kind of -- candidly, that's why we've been adjusting our cost structure, we've been doing different things with the operating model. You see things like slower growth in -- you see things like slower growth at the energy drink level. This is signs that you see this in the past, this is when you're kind of touching the bottom end of kind of these recessionary points and the health of the end consumer. So we're operating in that environment. We're still growing and we're making more money. So that all feels good. If you get a little -- if you get an interest rate cut, you're potentially in September and a little bit more clarity on the election, all of those things tend to translate into a bit more optimism probably from us and our competitors based on where we are, because to your point, I don't see a lot more downside on the end consumer. We've been living it though for about 18 months. So we've seen the trade downs and then we've seen the less frequent purchases. And I think what you're also hearing as a result of that is from our customers and from certain categories in certain segments, they're going to have to address that via different pricing mechanisms to drive volume. So I think we're kind of -- we're in a good spot relative to that, believe it or not versus how we've been operating in the last 18 months as an industry. So I'm a bit more encouraged than pessimistic. Operator: Our next question comes from the line of George Staphos with Bank of America. George Staphos: I just want to pick up my first question, piggy back on topic Ghansham raised. So at this juncture, are your customers talking about doing more incremental net promotion price reduction, et cetera [indiscernible] variable end market, or do they see kind of the next way to grow out of this really on innovation? And kind of the context, if we go back not quite 10 years ago but sort of post Rexam, especially in alcohol, there was a lack of volume growth and it was innovation that drove growth, at least in part. At this juncture, innovation comes at a higher price. Is this the wrong time to drive innovation? So really the only way to deal with this to drop price and raise promotion, how are your customers thinking about that? And what are you doing to help them in that evaluation? Dan Fisher: So this breaks down -- in the US -- this is a US phenomenon, probably more than any other region that I see. At the high end, that's where the innovation is going, okay? So if you look at beer, in particular, the high end of the brands, folks are -- they're spending more on advertising and they're innovating more there because people are willing to pay for it. At the low end, it is a value put. And so if you look at the largest brewer in North America, you'll see they have two brands that are growing disproportionately to the rest. One is squarely on the higher end of the end consumer and one is squarely on the low end of the end consumer. Now the big middle portion, that is sort of the premium light beer, that is the one that will have to be priced differently. So innovation will continue to get pushed. It will get pushed into new categories and it will get pushed into higher end brand categories that already exist. And then you've got to be competitive on the low end of those ranges, maybe even more so than historically. And in the middle, that's where folks that are doing well in the marketplace, whether it's on the CSD side or on the alcohol side, they are playing the CPI game really well, they are playing the branding game very well, they're playing the discount and the revenue models really well and brand superiority starts to show up. The real integrity of the brand and the value of the brand shows up now, as you well know, after covering this for many years. So I think that's how we're looking at and we're helping them in every -- listen, we can help you with innovation and we can use our fleet of assets to help you really layer in lower costs in terms of the supply chain and the agility to deliver. So there are ways that we can use the economies of scale that we have to work both sides of that equation. And then what's left for the customer to figure out is how they play some of these major brands and what the brand value is and how they're going to price that to drive volume. And I think that's what will be coming around more so than anything here in the next six months. Some thinking in and around that, that will be more growth oriented. And then with the backdrop of the end consumer, is it enough to drive the volume? My belief is, it will at least maintain the stable position that we've been operating under, and it could be a slight uptick. Hope that was helpful. It is different than Rexam. It is different than post Rexam. I will tell you that. You're on to that. Yes, it's definitely different conversations. But you've got to fight with innovation even on the high end brands and you've got to be incredibly focused and diligent on supply chain efficiencies on the low end. So that is -- with just more intentionality on both ends of it. George Staphos: So what does that mean for your mix as you layer those two or three or pull those two or three levers that your customers do into the back half of the year, what are you seeing in terms of volume trends to start 3Q? And how do you feel about the plant network overall as it exists relative to those trends as you see them? Dan Fisher: I think there's an aspect here where mix will matter in the short term. So there won't be -- you'll be thinking about, there's a minor October reset but it will be more in the February -- January, February retail reset, where you see some more innovation and some more introductions in and around that, and around the Super Bowl, that's typically what happens in North America. Our fleet cost average is lowering a lot of the decisions we made in terms of the fixed cost of our plans. We're seeing the benefits in our new operating model, we're laser focused on efficiency and operational excellence. We're seeing those benefits. We're running -- freight cost is better, our warehousing footprint smaller. So there's a lot of supply chain efficiencies that we're benefiting from. You'll see more of it as volumes grow. So I feel like we're having the right conversations with our customers, they're seeing that, our Net Promoter Score continues to rise. And so I know that the conversations we're having and the efforts that we're making are resonating with the customers. We're seeing some benefits of that. But in the immediate short term, your customer base matters now more than any time and we've benefited from who our customers are here this year in particular in North America. Operator: Our next question comes from the line of Jeff Zekauskas, JPMorgan. Jeff Zekauskas: So over the past few years, Ball has increased its capacity in North America. And then what it did is, it reduced it to become more efficient. If you compare your North American capacity today to what it was in 2019, has it changed very much? Dan Fisher: Yes, we have more capacity. We're selling more. We have more capacity and there's additional envelope and room for us to grow capacity further. Jeff Zekauskas: And in terms of the volume that you experienced in the Americas in the second quarte, was the beer market down and the consumer soft drink market for you up? Dan Fisher: That's correct. Our customer portfolio on the CSD side was a benefit to us. Operator: Our next question comes from the line of Josh Spector with UBS. Josh Spector: I was wondering if you could square kind of your short term view here around growth versus your long-term view. And just given kind of some of the outperformance here in 2Q, do you think you could start to see, call it, high single digit to 10% plus growth in EPS in the second half, considering you're starting to face some easier comps, or do you need a more favorable backdrop to really drive more of that? Dan Fisher: Just one thing, I would say, we did have a fairly significant -- I'll let Howard describe Q3. I would say Q4 and moving forward, your comment is correct. Q3, there's an anomaly, I'll let him describe that for you. Howard Yu: Yes, that's right, Josh. We did have -- on the R&D tax credit side, we had a pretty meaningful impact in Q3 of last year. This was associated with the aerospace business and so those to the tune of nearly $40 million. And so obviously, that will make for the comps in Q3 to be a bit more challenging. But as Dan said, I think going into the fourth quarter and certainly beyond, we've said that we'd achieved 10%-plus EPS in 2025 and each year after that. Dan Fisher: And in Q3, just to reiterate, if you take out the onetime benefit, then yes, we're operating at 10%-plus EPS moving forward. Howard Yu: And I think just even despite the tax credit, I think that we will be up as it relates to third quarter EPS. And so that $40 million or nearly $40 million is a pretty meaningful impact. But despite that we’ll still be up year-over-year. Josh Spector: I just wanted to follow up on specifically inventory in beer in North America. I don't know if you have any visibility around your customer levels of where things are at in terms of days or cases? And if there is more promotional activity, is that a big pull forward for you or do you think inventories probably stay leaner for longer? Dan Fisher: I think our inventories are going to be a bit stronger moving forward, will lift a little. They're a bit too low. As you recall and this going back to Q1, we helped one of our beer partners significantly in Q1. So we kind of overshipped in one and now we're operating at lower inventory levels. So it's a rebalancing because of that for us that will settle out by the end of the year. And then I'm encouraged about kind of the trajectory of flight on a couple of the beer brands in particular. So yes, I'd say it's yet to be determined. But for us, in particular, no, we will still have some uplift in the second half of the year because we were operating so low in the first half because of some unique anomalies with uni negotiations and things like this. Operator: Our next question comes from the line of Arun Viswanathan with RBC. Arun Viswanathan: Good to see the results. So I guess just a couple of questions on South America. So obviously, some challenging conditions in Argentina, some volatility down there. Do you still expect a very robust second half in your South America business, especially Q4? And what gives you that visibility? I mean, I guess, again, there is a lot of volatility on there, but are there any specific drivers that you'd point to? Dan Fisher: We've got really good ones. First of all, thank you. I hope you're doing well. The only thing we've got out here in Denver is two or three forest fires happening. So if you hear us coughing that's all coming from. So the second quarter, let me -- let’s just set the stage for the second quarter and what happened in Brazil and particularly. So in 2023, in the second quarter, the third largest brewery filed for bankruptcy and they didn't participate much in the market. They had a good showing this second quarter. And so when you're looking at comps year-over-year, we were stronger last year than we were this year because that entrant didn't participate. But year-to-date, we're up 10%-plus because our partners are winning disproportionately overall in the market, and they have been for a year plus. And so much of our business is tied to a couple of folks who we have a lot of conversations with and we're encouraged about a couple of underlying themes, right? We've talked about the can continuing to gain back share. About two years ago, we saw returnable glass gain share 6 to 7 points, I believe, of substrate share, which always happens in an inflationary environment. There's a quick repositioning of that, that's now coming back solely but surely. So we picked up a couple points of can share in the Brazil market, which is meaningful once you get to peak season, which, of course, second quarter is the least. And then Chile had a rough winter period, one of the coldest on record. So that will rebound. Our Paraguay business is doing very well. Peru is doing well. And then it just boils down to Argentina. So I think we have line of sight into over -- what the overall majority of our business, and we're encouraged about the back half trajectory. And in Argentina, the volumes are still going to show a degradation over the back half of the year from a comp perspective because volumes really didn't start to slow down until this quarter and a little bit of the first quarter. But what happened this time a year ago in Argentina is there was a lot of regulatory, monetary and fiscal policy that was eating into our margins like taxes holding on to receivables for a longer period of time. So the margin comparability will be pretty flat year-over-year in Argentina until you see some improved conditions there but the volumes will still show a little bit of a decline. And rough order of magnitude, the decline for Argentina is roughly a 1% volume decline for Ball year-over-year. So it's meaningful on the volume line. It's not as meaningful on the earnings line moving forward. And then as the end consumer starts to gain a bit of strength down there, which we're starting to see early signs of it that will start to come back and we'll lever up nicely. So feeling good about the second half in South America, a lots going on in that region, as you said, but the fundamentals of the macro environment in our biggest country that we participate in continues to be buoyed by really good fiscal discipline, inflation continuing to monitor to the lower end of even what the central banks are proposing. So we're feeling good about that and we feel like we're coming off of some less favorable environments in Chile and Argentina. So let's see how we get on but the next six to 12 months should be improved in both of those areas. Arun Viswanathan: And then maybe if I could just ask a follow-up. So I appreciate the long term comment on greater than 10% or 10% or better EPS growth. In our models, it seems like we're modeling kind of mid single digit or better EBIT growth in '25 and the rest is coming from lower interest expense and share buyback. Assuming that's correct, are you saying that you're able to maintain that level of growth in '25 and beyond. So are you kind of implying that you will continue to buy back stock and pull on some other levers other than just volume in order to the feedback level of EPS growth. Maybe you can just elaborate on what gives you the confidence that you'll continue to maintain that greater than 10% EPS growth rate? Dan Fisher: I'll just make one high-level comment, and then I'll have Howard chime in. And so if you go back to our Investor Day, and I probably didn't do a great job of pointing this out. But what we laid out, and we have a high degree of confidence in is probably somewhere closer to the 13% to 15% range as opposed to the 10% plus, and it's coming from exactly what you described a steady diet of us staying within our $650 million capital envelope and expanding operating cash flow by managing our earnings and managing our working capital with a real intention and focus. And so we don't need a whole lot of growth to do that. It's a much more repeatable model. And I think we're encouraged by the trajectory of growth with the rebound in the end consumer here hopefully happening in the next 12 months. There's probably more upside than not, Howard, what did I miss? Howard Yu: think that's right. And Arun, we are committed to buying back shares. I mean we're increasing how much we're buying back even this year. We've talked about it in the context of over $1.4 billion that we'll get through and essentially since mid-February, since the sale of Aerospace. And so obviously, that will have a meaningful impact on the share count going into next year and we'll continue to do that as well. The other thing I think to point out and we talked about during the Investor Day is the cost savings, gross cost savings that we're going to be undertaking. We've seen great traction. You're seeing some of that readout even in the numbers this quarter. You saw some of that in the first quarter as well. And you'll continue to see that well into 2024 and into 2025. And so there's no reason to expect that we're going to deliver anything less than 10%-plus, and probably ahead of that for the next couple of years, for sure, on the EPS side. Operator: Our next question comes from the line of Mike Roxland with Truist. Mike Roxland: On this call and in some prior calls and also on the recent Investor Day, you mentioned improving plant efficiency, centralizing best practices, standardizing them, documenting processes, ensuring that all your facilities are sort of benchmarked with one another. How far along are you in that process right now? And if we think two to three years from now, what do you think this standardization, focus on cost takeout efficiency, what do you think it can add to the business in terms of dollars and profit? Dan Fisher: Yes, I'd say we're early innings. And I think what this will allow us to do is consistently deliver against our 2 times growth percentage algorithm by gaining more productivity and efficiency in the plants and translating that into less capital required on the assets to grow into that, which historically has been a pretty big preventer of us from not achieving the 2 and 1. So translating that into dollars, I could tell you that's -- in theory, that's the strength for what we're doing. We're seeing it thus far and that should be fairly meaningful. I mean a 2 and 1 off of 2% to 3% growth over the next three years versus the 1.5 to 1, that's roughly the order of magnitude that we're trying to to fill the gap in, if that helps, Mike. Mike Roxland: And then just one quick question in terms… Dan Fisher: It's meaningful. I don't have a $1 per thousand number or cent per can number, but it is meaningful in terms of our ability to deliver organically higher end of that 2 to 1 range. Howard Yu: And I think we've laid out that of the $500 million of gross savings, I mean, we're going to have a meaningful part of that will be front end loaded here in 2024 and 2025. But certainly, going into '26, '27 and beyond, as we aspire to be a best-in-class manufacturer, we will continue to see efficiencies there. I mean, as Dan said, we're early innings but we're putting up runs. And so that's a good thing to see as it relates to the corporation and what we're doing operationally. Mike Roxland: So if you're still in early innings that means that you got this particular -- I mean, what's your time frame in terms of having everything standardized? In two years, three years, when do you think everything should be on par with one another? Dan Fisher: Yes, I would give us somewhere in that two to three year range is what [indiscernible] myself are talking about, and it won't be 100% standardized, but 80%. And the reason I say that, you know this business is we got 40-year-old plants, we've got brand new plant. So we're not going to recapitalize to standardize everything. But the performance, the meeting cadence the S&OPs, all of that should look and feel like you're walking into a Ball plant everywhere in the world. Mike Roxland: And then just one quick question. Obviously, you've now lapped the problem child product at this point. But it seems like Bud Light is now number three after Modelo Especial and Michelob ULTRA. So that really seems to be a more function for at least, as I can tell, a function of shelf space reset. So two part question. One, to the extent you can comment, has any of that decline been offset by gains in Michelob ULTRA? And two, do you think that Bud Light will ultimately regain some shelf space in the fall or the early winters as you noted when it occurs? Dan Fisher: So two brands are growing within their portfolio. You mentioned one, the other one is, I believe, Busch Light. And so both of those are growing nicely. And so yes, they are filling some of the brands -- the portfolio whole. I'm encouraged by promotional activity in both those brands. And I think anything that Bud Light comes back and recovers is great, but they've got two real winners within that portfolio that they're leaning heavily into. And I think that's more probably the route that that wins and it also speaks to sort of brands on the different ends of the end consumer spectrum as well. Operator: Our next question comes from the line of Mike Leithead with Barclays. Mike Leithead: First, just on aerosol. The business saw a nice, I think, 6% volume growth. I guess my understanding was this overall market is still a bit soft. So is there some competitive share gains, is it a mix with your extruded bottles? Just if you could help unpack that a bit, that would be helpful. Dan Fisher: No, the market is growing probably half that rate globally, a little bit more than that. The advantage that we've got is strategically is our plants are able to produce bottles that have higher recycled content and we also make the alloys with the highest recycled content in the industry. And so the environmental and the sustainability message to somebody like a Unilever or a buyer store, they have a big packaging carbon issue. So if they could move into aluminum out of other substrates and we have the highest recycled content, we are winning disproportionately because of that. Not on price. In fact, it probably costs a bit more. But the light-weighting of the bottle on the less alloys, steel versus aluminum continues to be a positive trend. So there's a lot going into it. And we're very well positioned in the strategic partners and innovative partners and sustainability leads in that area. And we're bullish about that business moving forward because of the moat that we've created there. Mike Leithead: And then I wanted to circle back to the US. Dan, you've given a lot of really helpful color around the different product category dynamics. But I want to circle back, I'm not sure if I heard in the answer to Ghansham's question earlier. But in 2Q, how did your US business for Ball perform relative to, say, the overall segment up one? Dan Fisher: I think it's in line. It's actually the US was driving it more so than anything. Keep in mind, our Mexican business, if you -- 80% of it is products that go north. And it's one major brewer and they did well, that category didn't do great, but they did well. But everything was more or less in line, favorable CSD, flat energy, a decline in domestic beer, uplift in the imported beer. We participated in all those and net-net-net. Some of our customers within certain categories did a little better, so we did a little better. That's probably how it would shake it out. Operator: Our next question comes from the line of Edlain Rodriguez with Mizuho. Our next question comes from Anthony Pettinari with Citi. Bryan Burgmeier: This is actually Bryan Burgmeier on for Anthony. Maybe just a question on ‘24 EPS guidance, and I apologize if I missed this. Just thinking about kind of the magnitude of strong 2Q results, some modest tailwinds from lower interest expense, more share repurchases. It seems like there's maybe a tiny bit of upside to the full year guide versus your previous outlook. Is it South America and Argentina that makes you feel like reiterating is most prudent right now, so I know you reiterated volume growth expectations. So I'm just trying to kind of rectify the two different points. Dan Fisher: Honestly, we're looking at the same thing you are. More constructive on the plus side of our guide. And when I hear the entire competitive landscape and our entire customer landscape, all saying similar things that we’re going to be delivered despite a little bit more volatile second half given the election, et cetera. I've been encouraged every month this year by the performance of the business and our commitment to doing the things that we can control, and those are going to continue. And then we have benefited a bit from mix in North America. Does that continue? I suspect it will. So yes, we're leaning to the plus side of that algorithm for sure. Bryan Burgmeier: And last question for me, and then I can turn it over. Just can you comment maybe European can shipments versus underlying consumption growth in the region? Do you think that the industry maybe did a little bit of restocking this year or are brewers maybe ordering ahead for the summer? Just any color on maybe shipments versus consumption in Europe. Dan Fisher: The destocking and restocking event that happened sort of December and then January and February. So Q1 had a little bit of that favorability in it. But what we've seen is this is actual consumption that's happening, a more aggressive pricing environment in some instances. I think if you talk to anybody in our industry, everybody is tight. We're getting very close to can allocation scenarios. So this is 100% consumption at this point, benefit from the euro, benefit maybe from the Olympics, but more of a benefit from just inflation dissipating in a different return of value equation by our customers needing to price differently. So all of that's been a healthy dynamic in Europe and fingers crossed that continues here for the foreseeable future. We do have some can share that's also helping in pockets of the EU, specifically the UK, they continue to move more into cans. So there's some different dynamics that are unique to each country and each category in each geography. But overall, yes, I'm really pleased with our performance in Europe and constructive on Europe at large right now. Operator: Our next question comes from the line of Phil Ng with Jefferies. Phil Ng: Pretty encouraging to see Brazil still up mid single digits. Argentina has been [problematic], it’s a little noise in general just all the movement. How would you like us to think about the back half? And certainly, you had outsized earnings last year from some mix dynamics in Brazil in the fourth quarter. So just kind of give us a little more color on do you have enough levers for your volumes to be up in South America given the weakness in Argentina, and then your ability to kind of drive earnings in the back half in South America as well? Dan Fisher: There's an opportunity. I think Q3 will have still some volume decrement because of Argentina. Q4 will return to growth. But the earnings were already being impacted, Phil, in Argentina in Q3 because of some of the taxes that were being levied on, especially metal coming in from Brazil into Argentina dollars going out. There was a lot of currency controls put in place. So our margins -- our volumes held in, but our margins took a fairly significant hit and then further hit in Q4. So from a margin standpoint, you should see growth in the second half of the year. aAnd volumes will be flattish to slightly up with a negative tailwind still fairly significant in Q3 from Argentina, I think in the neighborhood of 500 million cans. Phil Ng: So on balance on earnings is kind of muted is how I should think about it for Argentina [Multiple Speakers] margins might be better at budget… Dan Fisher: You're right. From this point forward, it's muted. And here's what's going on in Argentina too. So for the last two months, they've got inflation down in the 4% range, and that was their target. What has also happened is there's been price fixing, there's a weak end consumer. This is the weakest the end consumer spend but they've accomplished all of their monetary and financial goals of lessening inflation. And so we're starting to see some easing in that country and then it's going to be employment based and sort of a return to a more stable end consumer there. But it’s -- I'm not an economist, but I'd say that they've kind of driven this thing where they wanted to and now I'm encouraged that we move up from here. It won't happen overnight but at least they've gotten us to a place that they were attempting to do in October and November of last year. Phil Ng: I mean, I think certainly, there are some concerns coming into the quarter that mass beer in the US would be a drag, and you obviously put up really strong results in that segment in North America. If I heard you correctly, Dan, you sound a little more upbeat on the plus side of your mid single digit type growth. Does a lot of that come from North America or is it more Europe, some of the other segments, just because you're lapping that tough ABI comp, right, and you still put up 1% volume growth in 2Q. It sounds like your customers are promoting a little bit. Is that enthusiasm more on North America? And then are you expecting volumes perhaps to pick up a little bit in the back half? Dan Fisher: I think every one of our business units, every one of our regions will make more money year-over-year in the third quarter. So there may be a little bit more weighting to your point. Actually, I think it's going to be more representative of a Q4 lift than a Q3 lift, just we've got such low inventory levels and really tight there in North America that you'll see some pickup on absorption more likely in Q4. But yes, leaning to the plus and as you know, this is -- a big portion of this is about mix and who wins in the third quarter. And I'm encouraged that premium light beer, domestic light beer, they're going to have to do something on pricing there. It's been a pretty similar tape, right Phil, for the last several quarters and so I think different behavioral patterns will have to kick in at some point. Operator: Our next question comes from the line of Chris Parkinson with Wolfe Research. Chris Parkinson: You hit on this a little bit, but I'd like to dive in a little bit more on the Brazilian market. Can you just talk about -- the last couple of years have been obviously pretty choppy, especially coming out of COVID. And there have been some substrate market shifts, obviously, changing and evolving consumer behaviors. Can you just kind of give us an update on where you think we are not only for the back half but where you think will ultimately be for '25, '26 as well as your competitive positioning? Dan Fisher: So for -- I would say -- you're almost at a point where you can take COVID out of the equation. I think what happened in '23 -- so just '23 to '24 first half of the year, let me walk you through a comparative, right, for Brazil. In Brazil, the third largest brewery had a blowout 2023 first quarter, which we don't participate with. They filed for bankruptcy in Q2 of 2023. So they did virtually nothing in that quarter. So when you're looking at comps depending on who's with who and the mix trajectory in that category portfolio that there was volatility in one, we were up 26% in 1. So we benefited from that comp one. We didn't benefit from it as much in 2. But Q3, Q4 and Q1 of '23 and '24, the behemoth that we're with did well in the market. We continue to think that they will do well in the market based on innovation, based on share, based on their long term positioning. We're the number two player in the entire South America. They have been doing well as well. So I'm encouraged by the second half and I'm encouraged the economy in Brazil and the GDP is what really matters most at this point, to answer your follow-on question for '25 and '26, I think they have things going in the right direction, moderate-to-low inflation, employment continuing to improve, no sudden movements in terms of fiscal or monetary policy, all of that has a positive tailwind. And then the only thing that really comes out of COVID would be the substrate shift from glass into cans, and we're early innings on that. So we picked up probably 2 points of the 7 points that were lost and we expect to continue to pick up more of that in the back half of '25 and into '26. And then for us, our exposure to Argentina will be meaningful if there's abrupt recovery in Argentina in '25 and '26, that will -- obviously, we'll get 100% of that. So I'm constructive on the outlook. I think it will be at the higher end of our longer term growth algorithm based on the underlying conditions. And then Brazil, I think, starts to normalize a bit more. And it will be about mix but it will be less so about mix than what you saw in Q1 and Q2. Chris Parkinson: And just a real quick one, not once but twice. I tried to get a beer after a round of golf in New York, and I was handed to a Ball aluminum cup and it's something people haven't really been discussing for quite some time, but they're starting to pop up a lot. And so I was just kind of curious what's the latest and greatest there in terms of your thought of trajectory? I mean it seems like it was kind of a thing and then it wasn't but now it's clear that you're making some additional strides. I'm just kind of curious on that front. Dan Fisher: You do find it at places like that. I think ultimately, the backdrop, if you've got a weakened consumer and it's going to impact the volume on a project like that. And so we continue to gain traction but it's not near what we thought it would be two or three years ago. And so that's probably all I'll say about that for now. And we'll do one more question, Christine. Operator: Our final question comes from the line of Stefan Diaz with Morgan Stanley. Stefan Diaz: I hope everybody is doing well. In the release for Europe, you mentioned seasonal and sustainability trends should improve demand throughout the year. Does this mean you're expecting mid single digit volume growth for the second half as comps look favorable? And then maybe sort of following up on Bryan's question, considering can shipments seems like they were ahead of scanner for the latest quarter, are you worried about any potential destocking like we saw late in 2023? Dan Fisher: I don't anticipate destocking for us, all of this stuff is like competitor and customer centric, right, on the destocking and stocking issues, nowhere near what you would have seen in '22 or '23. So I'm less concerned. Obviously, if volume were to fall off significantly, which we don't foresee or we're not anticipating, I might have to revisit that comment. But at this point, we've got incredibly low inventory levels. We're hand to mouth in Europe. We're in the throes of increasing our stacking in South America and then in North America, where we've got, like I said, historically low inventory levels that we'll need to manage that up over the second half of the year. So I'm encouraged and not concerned about that topic in particular. I get the question but for us, it's not as meaningful. Stefan Diaz: And then given strong volume results in the past couple of quarters, I was just wondering if you could remind us if you still have any capacity curtailed within your network. And if so, maybe what do you need to see to bring that back online? And then maybe if you could also just quickly comment on what you think utilizations are by region? Dan Fisher: You always have curtailments in South America this time of the year. We have very few, if any, curtailments in North America or Europe. Absolutely none in Europe right now. And the only thing that we would be curtailing would be one can size fits in North America at times. So all of that's good. The industry is in a really healthy position, probably high 80s, if I look at the annual projection, high 80s in Brazil, low to mid-90s in Europe and then low 90s in the US, which means you got excess capacity in shoulder season and you don't have any in peak season. And so it's in a good spot. Operator: I would now like to turn the floor back over to management for closing comments. Dan Fisher: Thanks. Again, really appreciate our 16,000 employees. We had a flood and we've got some fires going on, and hope everybody remains safe and takes care of one another and look forward to talking with you all here at the end of the third quarter. So thank you. Operator: Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.

Operator: Greetings, and welcome to the Ball Corporation First Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Brandon Potthoff, Investor Relations for Ball Corporation. Thank you, sir. You may begin. Brandon Potthoff: Thanks, Christine. Good morning, everyone. This is Ball Corporation's conference call regarding the company's first quarter 2024 results. The information provided during this call will contain forward-looking statements. Actual results or outcomes may differ materially from those that may be expressed or implied. Some factors that could cause the results or outcomes to differ are in the company's latest 10-K and other company SEC filings as well as company news releases. If you do not already have the earnings release, it is available on our website at ball.com. Information regarding the use of non-GAAP financial measures may also be found in the notes section of today's earnings release. In addition, the release includes a summary of noncomparable items as well as a reconciliation of comparable net earnings and diluted earnings per share calculations. References to net sales and comparable operating earnings in today's release and call do not include the company's former aerospace business, year-over-year net earnings attributable to the corporation and comparable net earnings do include performance of the company's former aerospace business through the sale date of February 16, 2024. I would now like to turn the call over to Dan Fisher, CEO. Daniel Fisher: Thank you, Brandon. Before we discuss Ball's strong earnings and improved volume performance, I would like to thank all of the Ball team members that worked tirelessly to achieve the successful aerospace business sale on February 16, 2024. Sale proceeds were immediately put to work to reduce our leverage, strengthen our balance sheet and return value to shareholders. In addition, I would also like to share that Ann Scott has announced her retirement as Head of Investor Relations after 37 years with the company. Just this week, Ann's first grandchild, Isabella Ann, arrived safely into the world. Needless to say, we all know what Ann will be doing in retirement, babysitting, golf and being a lifetime Ball cheerleader. Ann will provide behind-the-scenes support to Ball through the end of the year. So as she winds down her time as a full-time employee, feel free to extend your well wishes via her Ball e-mail. As you can tell from our call introduction today, our Investor Relations succession plan has been activated with Brandon taking the lead as the head of the department. Congratulations to Ann and her family on the new grand baby and her well-earned retirement and for your support of Brandon and Miranda as they take the next steps in their careers at Ball. Today, I'm joined on our call by Howard Yu, EVP and CFO. I will provide some brief introductory remarks. Howard will discuss the first quarter financial performance and key metrics for 2024 and then we will finish up with closing comments and Q&A. Our team delivered strong first quarter results following the successful and earlier-than-anticipated sale of the aerospace business during the quarter. Global beverage can shipments increased 3.7% in the quarter, and we immediately executed our plans to deploy sale proceeds to deleverage and initiate a large multiyear share repurchase program. Reflecting further on year-to-date 2024 performance, aluminum packaging continues to outperform other substrates across the globe. In North America and EMEA, first quarter volumes exceeded our internal expectations as customers pulled forward volume in preparation for the summer selling season, following notable fourth quarter 2023 destocking. In South America, strong volume performance driven by our customer mix and warm weather continued in Brazil. For a complete summary of regional shipments for the first quarter, please refer to today's earnings release. Given seasonality, our customer mix and incorporating first quarter regional volume performance, we anticipate full year global shipments to grow in the low to mid-single digits range. Key drivers in 2024 are the benefits of deleveraging, repurchasing shares, improving operational efficiencies and fixed cost absorption, and leveraging our well-capitalized plant assets to grow the use of innovative, sustainable aluminum packaging across channels, categories and venues. In addition, to further actions to strengthen the balance sheet and reduce long-term liabilities. Based on our current demand trends and the previously mentioned drivers, we are positioned to grow comparable diluted EPS mid-single digits plus off 2023 reported comparable EPS of $2.90 per share, generate strong free cash flow, strengthen our balance sheet and return of value in the range of $1.5 billion to shareholders via share repurchases and dividends in 2024. We look forward to showcasing our team and unveiling our future operating model and long-term growth plans at our biannual Investor Day scheduled for June 18 in New York City at the New York Stock Exchange. With that, I'll turn it over to Howard. Howard Yu: Thank you, Dan. Turning to our results. First quarter 2024 comparable diluted earnings per share was $0.68 versus $0.69 in the first quarter of 2023. First quarter sales decreased slightly due to the pass-through of lower aluminum prices and lower volumes in North America, offset by the pass-through of inflationary costs and increased volumes in South America. First quarter comparable net earnings of $217 million were flat year-over-year, primarily due to improved year-over-year performance in North America, EMEA and South America, offset by lower year-over-year results in nonreportable other, which were driven by improved comparable operating earnings in our aluminum aerosol business, being more than offset by noncomparable SG&A costs associated with the aerospace sale and higher year-over-year undistributed costs, which are detailed in footnote 2 of today's release. In North America, segment earnings exceeded our expectations and offset notable year-over-year headwinds associated with the U.S. beer brand disruption and the favorable benefits of the virtual power purchase agreement termination. The earlier-than-anticipated closure of Kent plant, which permanently ceased production during the first quarter also aided results and supply-demand balance across our system. Benefits of effective cost management and plant efficiencies across our well-capitalized plant network will support incremental volume growth without spending incremental growth capital. We continue to anticipate sequential earnings improvement during the seasonal summer quarters, driven by modest volume improvement, improved fixed cost absorption and effectively managing risk. In EMEA, the business continues to navigate varying consumer end demand conditions, particularly in Egypt. Overall, segment volumes were up slightly in the quarter following notable destocking by certain customers in late 2023. In recent weeks, demand trends have remained favorable, and the business continues to be poised for year-over-year comparable earnings growth in 2024, oriented largely to the second half and driven by volume and mix. In South America, our segment volumes increased 26.3% in the first quarter, driven by strong demand in Brazil and our customer mix. The Brazilian can market was up 18% in the first quarter. We continue to monitor the dynamic economic situation in Argentina and potential scenarios that could impact results. We remain optimistic about Brazil and our ability to deliver sequential earnings and volume improvement as we exit the summer selling season in South America. Additionally, in the first quarter of 2024 and up through the February 16 date of sale, our former aerospace business made $27 million of comparable operating earnings, which is included in the comparable net earnings of $217 million that I referenced earlier. Moving on to additional key financial metrics and goals for 2024. We now anticipate year-end 2024 net debt to comparable EBITDA to below 2.5x. While we are currently at 2.2x at the end of the first quarter, net debt to comparable EBITDA will nudge slightly higher by year-end as the company starts payments of tax due on the gain of the sale of aerospace. 2024 CapEx is targeted to be in the range of $650 million, a year-over-year reduction of $400 million and largely driven by carry-in capital related to prior year's projects. We are on track to achieve our free cash flow target. Share repurchases are expected to be in the range of $1.3 billion by year-end. Through today's call, we have repurchased approximately $350 million in shares year-to-date, and earlier this week, the Board increased the share repurchase authorization to 40 million shares. The new authorization replaces all prior authorizations. This increased authorization will enable meaningful share repurchases during 2024 and beyond. Our 2024 full year effective tax rate on comparable earnings is expected to be approximately 21%, largely driven by lower year-over-year R&D tax credit associated with the sale of the company's aerospace business. Relative to the estimated tax payments due on aerospace sale, the approximate $1 billion taxes due will be paid throughout the remainder of 2024. Full year 2024 interest expense is expected to be in the range of $320 million. Excluding the non-comparable aerospace disposition compensation costs, full year 2024 reported adjusted corporate undistributed costs recorded in other nonreportable are still expected to be in the range of $85 million. And earlier this week, Ball's Board declared its quarterly cash dividend. Looking ahead to the rest of 2024, we remain laser-focused on operational excellence, driving efficiency and productivity across our business and cost management and monitoring emerging market volatility. We are committed to maximizing the full potential of our company over the long term. We have executed on derisking the corporation through recent debt retirements, and we have no significant near-term maturities. The runway is clear for us to activate near-term initiatives to consistently deliver high-quality results and generate compounding shareholder returns. With that, I'll turn it back to Dan. Daniel Fisher: Thanks, Howard. Given the strong start to the year in 2024, we anticipate growing our comparable diluted EPS mid-single digits plus by offsetting the divestiture through growth in our aluminum packaging operations, interest income, lower interest expense and the benefit of a lower share count. Looking ahead, we are focused on executing our enterprise-wide strategy to advance sustainable aluminum packaging solutions on a global scale by accelerating our pathway to carbon neutral and unlocking additional value from within the organization by driving continuous process improvement and operational excellence. Together, we will strive to deliver innovative aluminum packaging solutions that can lead to a world free from waste and embark on a path to deliver compounding shareholder returns in 2024 and beyond. We very much appreciate the work being done across the organization and extend our well wishes to our employees, customers, suppliers, stakeholders and everyone listening today. Thank you. And with that, Christine, we are ready for questions. Operator: [Operator Instructions] Our first question comes from the line of Ghansham Panjabi with Baird. Ghansham Panjabi: First off, obviously, congrats to Ann, a huge resource for all of us and more importantly, a real class act and also our congrats to Brandon and Miranda also. Daniel Fisher: Thank you for that. Ghansham Panjabi: Yes. So I guess, maybe, Dan, you could start off with just the updated thoughts on the outlook by the various regions. And obviously, there's lots of issues with comparability and customer issues and so on and so forth. So what is the market -- what do the markets feel like at this point? Daniel Fisher: Yes, good question. I think South America, we saw the strength in the fourth quarter carried over in the first quarter, and our partner did kind of won today in the market down there. So a really good start to the year. I think as it relates to Brazil, I think that economy continues to incrementally improve. We took a little bit of the refill glass back that we've talked about, we lost over 18 months and sort of that higher inflationary environment. So that's positive. So that's inflecting in the right direction. I think we'll probably increment higher this year versus our outlook in Brazil. And then Argentina is hanging in there. Howard and I were down there about 4 weeks ago. They're having a good crop. They'll get the proceeds from selling those agricultural commodities around the world here in the next couple -- couple of months, and then that should unlock some of their FX policies, which will certainly benefit us and derisk the balance sheet in that part of the world. Yes. So we're seeing growth. We're seeing slightly ahead in South America, writ large, that's the only country that's probably flattish to a little negative versus our going-in assumptions were -- was Chile, but it's really negligible in the grand scheme. As you know, it's really all about Brazil. And that's in a really good spot. Europe, we saw growth ahead of what we anticipated. A couple of things are working in a favorable manner versus where we entered the year in terms of our assumptions. Number one, there was more destocking, I think, in Q4 across Pan-Europe and so I think some inventory levels got to a better position and look a lot closer to where they were heading into -- or prior to COVID. And then we're starting to see some pickup in the beer section in particular. So folks are going for volume a bit more than even we anticipated heading into the year in Europe. So that outlook looks great. And then the watch out, of course, is going to be what happens in -- what happens in the Middle East and how that influences energy prices and the end consumer. But all the underlying parameters are slightly ahead of what we assumed heading into the year. So we're encouraged. Let's see how we get on in peak season. And then Q1, I think, is the most challenging to architect and explain because of the year-over-year comparability. But the pull forward into -- from Q2 into Q1 for us had a lot to do with one major brewer that was dealing with labor negotiations. And so we had to build some safety stock to potentially navigate some challenges there. So think in the area of $15 million to $20 million was pulled in from Q2 into Q1 versus our original assumptions. The balance of it, though, Ghansham, is you're really starting to see all of the structural changes and effects that we've made over the last 18 months. So we've rightsized operations, but more importantly, we've taken the higher cost facilities out. And so as you get volume running against a more productive and efficient portfolio, you're starting to see those benefits. So the timing impact, probably about $15 million, $20 million out of 2 into 1 overwhelmingly for 1 customer. And so for us, we -- our shipments are reflected at a much -- at a slightly higher rate in the underlying scanner data. And then within our portfolio -- within our portfolio, some of our customers won in their areas, CSD in particular, beer is soft, writ large versus, I think, what we even expected heading into the year. So mix is going to play a pivotal role, I think, within the industry and player by player. And right now, we're encouraged by the mix that we have. So it's still going to boil down to Q2 and Q3. Our customers are still going to go for volume and peak season and a great start to the year and slightly improved performance across the world is great, and let's see how we get on in the next 6 months. Ghansham Panjabi: Okay. Very comprehensive. And for the second question, it's really two parts. One is just a clarification. In Note A, you called out $17 million of corporate interest income. What does that refer to first off? And then second, the $5.5 billion or so of net proceeds from the sale it looks like net debt is down $3.8 billion sequentially, a couple of hundred million for share buybacks. And I see the working capital, but I'm still having a tough time reconciling to that $5.5 billion or $6 billion. Can you help with that also? Daniel Fisher: Sure. Howard Yu: Yes. So maybe -- Ghansham, this is Howard. I'd say that the interest income is specifically just related to the cash that we got on hand. So we got almost $5.5 billion -- or over $5.5 billion. And so that plays into the increased interest income associated with that. As it relates to... Ghansham Panjabi: Is that included in EBITDA, sorry to interrupt, but... Daniel Fisher: Yes, yes. Howard Yu: Yes. In the corporate line, that's right. Ghansham Panjabi: Sorry, go ahead. Howard Yu: Yes. And then as it relates to debt, yes, we anticipate that we would have paid down about $2.8 billion. Remember, the initial thoughts that we had in the quarter was that aerospace was being closed sometime after March 15. And so there was a European -- Euro-denominated debt that came due in the middle of March. And so we paid that down. So you couple that with the $2 billion that we referenced earlier around proceeds and where that would go. And so that's why you see the $2.8 billion debt retirement as well as knocking out some of the short-term debt and revolver and things like that, that we had. Clearly, with the cash on hand, we were going to go ahead and neutralize some of that interest expense as well. And then we have talked about a $2 billion share repurchase over the next couple of years. I think we said that we were initially targeting about 2 -- $1 billion of share repurchase here in 2024. Given the timing of the sale, we're a little bit ahead of that. And so now what we said is that we're going to target about $1.3 billion worth of share buybacks here in 2024, consistent with the authorization that was approved by the Board earlier this week as well and the 40 million shares to be repurchased. So -- and then everything else consistently, the CapEx, we anticipate that that's going to be about $650 million in the year, consistent with what we said. I think our interest expense at around $320 million is probably about $10 million better than we had originally indicated, and you're seeing that flow in as it relates to early timing as well. Operator: Our next question comes from the line of Anthony Pettinari with Citi. Anthony Pettinari: Congratulations to Ann and to Brandon and Miranda. I think I can't say enough good things about Ann and the job that she's done over the years. So congratulations. Just looking at North America, I think if you back out the energy benefit from last year, EBIT was up almost 25% on kind of flattish or down volumes. You talked about the fixed cost reductions from plant closures. I'm just wondering if there's anything more than that or any kind of finer point you can put on that in terms of the cost that you've been able to take out as sort of the operational performance within North America? Daniel Fisher: I will take a shot at this and then ask Howard to just -- I think it's twofold. Yes, it's the fixed cost absorption. Straight line from the immediacy of the closure of the facilities and its improved performance across the portfolio. I think we've commented on this before. Probably versus 5 years ago, we've lost a couple of points, potentially 3 points of efficiency across our portfolio of assets in North America, and now we're gaining on that. So you're seeing the combination of the fixed cost benefits of the plant closures and the higher-cost facilities, coupled with the fact that we're running better. So a lot of folks that are now 2 or 3 years enroll in a number of these plants and they're performing better. So I think it's the combination of those two things. But one-offs, no. I mean, there were some -- there's always a few that are positive, and there's always a few that are negative. So I think it's really the underlying performance of the facilities in the region. They're doing a really nice job. Anthony Pettinari: Got it. Got it. And then in South America, you had a great result with volumes up, I think, 26%, but EBIT up 10%. Can you talk about any kind of price cost dynamics in South America or the lag in -- the EBIT growth kind of lagging a bit. Is that Argentina related? Or just help us reconcile that? Howard Yu: Yes. Sure, Anthony. Let me go ahead and take a shot at that one there. I think South America was in its peak season. And so the way we think about it was -- and we talked about it in the Q4 earnings as well, Brazil was performing very well in that quarter as well. So really, you got to think about it in the context of the entire season and some of the mix and timing will change. And so if you think about what we said in Q4, the performance we had in Q4 in South America, we had about low single-digit growth of something around 2%, 2.5% growth and operating earnings was up 60%. And so coupling that with the performance here in the quarter at 26% volume growth and then 10% operating earnings. If you look at it holistically for both those quarters, we're up about 12% and over 40% as it relates to operating earnings. And so that's the way we think about it. Mix as it relates to cans and ends, those things will obviously play into this particularly in South America, and we're seeing that overall. So I think of it more in the context of the overall busy season for them and how successful it's been holistically. Daniel Fisher: In the simplest way, we've talked about this for years and years and years and you've heard us talk about. And can and end shipments, right? So we ship more ends in the fourth quarter than we did in the first quarter. So the balance of the entirety of the portfolio, really, that's where the volatility lies in terms of leverage, deleverage. It's not isolated within the quarter. You kind of have to look at it throughout the entirety of peak season. And that's the overwhelming gist of it. So we're happy with the leverage fall through with over the 6-month period. Operator: Our next question comes from the line of Arun Viswanathan with RBC. Arun Viswanathan: Just wanted to get your thoughts on how volumes in North America should evolve now that you're anniversary-ing the Bud Light situation. We've also heard of some share shifts within the industry. So yes, maybe you can just kind of give us your thoughts and if there's any category discussion that would be helpful or promotional kind of view as well. Daniel Fisher: Yes. So we've spoken about, and I think it's well known within the industry that there was a share shift one brewer to the tune of approximately 2 billion units, that's already happened. That's in our numbers. So we lost the 2 billion and multiple competitors picked that up and incremented up. And we've got line of sight to fill that hole this year. If you go back to previous call and the assumptions we laid into North America for 2024, we thought we'd be negative obviously, in the first quarter, not only for the lapping the major brewer disruption, but the dislocation of this volume. And then we would -- which we've already won a couple of big chunks of business, and you will start to see that flow in, in the back half of the year. So that's where we geared toward flat in North America. So last -- the 2 billion pick up, roughly a similar amount and you'll inflect in the back half of the year with volume. Obviously, the size of that volume and the mix of that volume now plays out within the next couple of quarters, but you should still see increments of volume lift here out through the balance of the year in North America. We think the industry is in that 1% to 2% growth range. Beer is a little softer, CSD is a little better. Mix will matter. Energy continues to grow. Mix will matter in promotional activity in peak season and the health of the end consumer, that's going to play out and determine whether it's 1%, 2%, a little north of that, a little south of it. But for us, we're really comfortable regardless of whether we're growing flat to down a little to up a little. We've got really good line of sight into the operating earnings and the cash generation of the business. Arun Viswanathan: Great. And then we've obviously seen some volatility on the aluminum price side. Maybe you can just comment on how that would impact you going forward? I mean I'm not sure if your customers -- I think they have some hedging programs in place, but would that also impact demand levels if they opt to push price to cover some of that inflation? And especially in Europe, I guess, I'm just curious if there would be any potential headwinds from metal premium pass-through? Or -- and how would you kind of characterize that in the context of -- it sounds like Europe is getting better from a supply-demand standpoint? Daniel Fisher: Yes. I think it's probably much ado about nothing at this point. We're coming off of incredibly low aluminum prices right now in a historical context. That seems to be the preferred package. There's a shift toward that in a number of parts of Europe. I guess the watch out is what's happening in the Middle East, right? I mean is that going to inflect significantly energy prices. Some mills and some aluminum is protected because it's nuclear power or it's tied up with other energy sources that aren't fed out of that part of the world, but it's certainly something that would impact the end consumer, not our customers' behavior patterns at this time. We're not having any conversations that would give us pause or concern. In fact, it's just the opposite at this point. They're more aggressively going in and working on taking share. and are using the can to do that. So I think it's a watch out. It always is, but what we're seeing right now is not of a concern. And overwhelmingly, what everybody has learned, to your hedging question in particular, I think folks got caught a little upside down over the last 2 to 3 years in some instances. And I think they paid a lot more attention to hedge strategy and kind of protecting where they are. If they locked in hedges, they'd be locking in those hedges at kind of all-time low levels. So I'm a little bit more encouraged by the structure of the industry and the behavioral patterns. And then obviously, the watch out is what's going on in the Middle East and does that have any impact. Arun Viswanathan: Great. And congrats again to Ann and Brandon as well. Definitely, we'll miss speaking with her and getting her perspective. Operator: Our next question comes from the line of George Staphos with Bank of America. George Staphos: Thanks for the details. Everyone said it, but I'd like to as well. Just Ann congratulations, first on your grand baby, but also for being such a resource to all of us over the last number of years, you are the legend in the industry. And congratulations to Brandon and Carmen on their increased responsibilities. Okay. So in terms of operations, Dan, you had mentioned that you're still trying to claw back that 2% to 3% operating efficiency loss over the last few years. Where do you stand in that regard? Forgetting about the actual plant closure benefits. What do you -- where do you stand in terms of that recovery? And can you give us a 1 or 2 kind of for instance, in terms of how that lean or benchmarking is showing up on a day-to-day basis? Daniel Fisher: Yes. We've got, George, latest numbers that I've seen. We picked up probably 1% of the 3% we've got back. And it's showing -- where it's showing up, principally, it's showing up in reduced over time. It's showing up in spoilage. The older assets that were retired, I would say, have contributed 80% of that improvement, okay? So there's still -- I think we've just scratched the surface on getting to the other 2%, 2.5%, if you will, across the existing portfolio of new assets. So we still have a bit of runway. I mean, you could -- that's a meaningful number on when you apply it to roughly 50 billion units. And so we're in early innings. But as you know, volume to manifest in order for those efficiencies to show up, and we're inflecting here over the back half of the year. So we're counting on continued improvement. We'll talk more about this at our Investor Day and how we're structured in terms of the operating model, and we can point to this in, I think, more granularity than we've talked about historically. But I would say roughly, we've shuttered the facilities to pick up 1% of the 3%. And now we've got to work on the remaining assets that are in place to continue to grow into that too, and we're early innings on getting it, but it is showing up incrementally. George Staphos: Okay. I mean, I guess, we'll talk about it in June, but a pushback could be, okay, well, you got 1 point because you shut a facility and then the remaining 2 or 3 is going to be tougher to get at because it's got to come from ongoing. So do you have any comment on that? That would be great, if not, we can stay with the June. Daniel Fisher: Yes. I would say no, that's not true. It's going to be easier because this is roughly 1,200 new employees that are 3 years of service in and they're learning how to make cans. And so this is incremental in terms of the learning curve. This is not different than at any point in time when we talk about an 18-month, 24-month ramp-up on facilities. I think about it in that context. So if we focus, we maintain -- we don't have attrition at the levels that you did, obviously, during COVID. We will gain on this and we will gain on this in a pretty methodical and pragmatic and a very prescriptive manner. So I'm encouraged that we will get this back here over the next 18 to 24 months. George Staphos: Next question. So in Brazil and sort of piggybacking on what Anthony had teed up. Was there any sort of operating issues in terms of the lack of profit leverage versus the volume leverage? Again, I know you said we should look at it holistically. Were there -- did you lose any share to your knowledge with any customers recognizing in a quarter where you're growing 18% or whatever the number might have been depending on the customer or the market, the answer is probably no. But any operating issues that we should take away? Any customer loss issues or if things were very much as expected in the quarter in South America and in Brazil? Daniel Fisher: Yes. Thanks. So Brazil grew at 18%, we grew at 26%. So no, we didn't lose anything. In fact, you could say we incremented share positions. If this is 100%, George, just to be clear, it is end sales that were heavier mix in the fourth quarter versus the first quarter. And so that's what it is. So we shouldn't have been up 60% earnings on 2% growth in the fourth quarter. So if you kind of mix that end issue, which we've talked about forever in a day, it's just lumpy, and it's incredibly profitable because of the tax jurisdictions down there. It's like -- that's it. Yes, nothing fundamental. It's not Argentina. It's not anything that -- it's no pricing mechanisms and contracts, All of that's really stable. It's just fundamentally to end float between 4 and 1. George Staphos: Understood. My last two ones quick. Number one, just piggyback again on the aluminum question, recognizing it's a watch out, but not something you're terribly concerned about. I know over the last couple of years, 3 years, you've probably been working on supply chain, clearly, with a lot of this inventory now showing up -- or a lot of this aluminum showing up in inventory and warehouse that might not be able to be used because of the sanctions. What are the risks and how are you planning against it that if there is some sort of mill disruption somewhere around the world that we don't see some spike, some tightening in an aluminum therefore can sheet, what are your thoughts there and how you're planning against that? And then last, can you just give us a little bit more color on the payout that was related to the aerospace sales? Again, congratulations. It was obviously a favorable valuation. But kind of what went into that number? Congratulations on 1Q. Daniel Fisher: Thank you very much. So we've learned a lot. This may be a little long-winded answer in terms of our price cost and managing the risk, managing tariffs, managing sanctions as it relates to your inventory supply. We've gotten a lot better at this since the tariffs were put in place in 2016. We've got 21 different metal programs. So metal that would be of concern on sanctions, we're really not shipping it to countries where that's even in conversation. So it will be going to places that it can be used, where there's trade relations with those countries that may have some concerning trade routes or unintended consequences for what -- exactly what you described. So we're managing those. We've derisked that over the last handful of years, and we've gotten -- we've gotten pretty good at that, understanding what's going on relative to those conversations and how we get out ahead of it. So I'm -- it's less of an issue. I agree. I mean, 4 or 5 years ago, we spent in an inordinate amount of time on things just like that because it wasn't in the ethos, it wasn't in our management patterns and our cadence of conversations, in our S&OP process. But I think it's pretty well under control, not to say that the world is not going to change here suddenly, and we need to manage it. But I would put this in the category of very low risk for us at this point in terms of just how we're managing our portfolio. And then I'll let Howard weigh in on some of the proceeds comments again. Howard Yu: Sure. So I think, first and foremost, George, that is a noncomparable compensation component associated with the aerospace sale. Part of the variable performance-based compensation plan for Ball employees. I think the way we think of it is the magnitude of the impact of this disposition causes the expense to be not normal. And so we've recognized approximately a $4.7 billion gain on this disposition which is unprecedented, of course, and not likely to ever recur. And so for that reason, we're treating that as a noncomparable compensation component associated with that. Operator: Our next question comes from the line of Edlain Rodriguez with Mizuho. Edlain Rodriguez: Again congrats to Brandon and Miranda and Ann, we're going to miss you. Quick one on Europe. Clearly, a better start to the year, better than expected. But are you seeing any fundamental improvement in terms of consumer spending improving? Because everything else we hear about you about -- like things were improving quite a bit. Like what was the surprise, what are you seeing there? Daniel Fisher: Great. Yes. So I think it's twofold. I wouldn't say end consumers are spending more. I would say the relative inflation versus payroll mechanism and then the promotional activity for our customers is impacting and influencing volume. And the other piece is the -- I think there was an unwind to an unnatural inventory level by retailers, by our customers at the end of Q4. And so they built that up a little bit. So it's probably half of Q4 to Q1, if you will, inventory stocking, getting back to a more normalized baseline. And then some -- really some more aggressive behaviors from the customers. across Europe that has enabled a little bit more volume. It's not incredibly exciting, but it's better than we anticipated heading into the year. But I wouldn't say there's more spend by going into these categories, I would say it's a little bit substrate shift, little bit favorable category, the can certainly winning versus the other substrates. That gap has widened probably more in Europe than in any other region relative to the trade-offs from glass and plastic into cans. So we're the beneficiary of that, but I wouldn't chalk it up to -- there's a lot more spend happening. I think we're the beneficiaries of the mix. Edlain Rodriguez: Okay. Makes sense. And another one, in terms of like the share repurchase, I mean then, like how do you balance the pace of that share repurchase? Like with your commitment to buy back shares versus like a higher and higher share price. I mean, of course, it's a high-class problem to have, but how do you balance the pace of that? Howard Yu: Yes, Edlain, I think we're committed to getting back to it. I mean we had, I think, had a pause for a few years as it relates to share buyback, and I think that we've consistently heard from our shareholders as well that returning that in some measurable fashion and on a consistent basis is important. And so we're just starting in this program, right? I think we've mentioned that we bought about $350 million worth of shares here. And we'll be thoughtful, clearly, as to how the stock price is going. And even as it relates to what vehicles we use to buy back some of that share. We do have a long history of utilizing different instruments. I mean the 10b-18 when the blackout is not there and the 10b-51 when the blackout is there, and then we'll look at things like smaller ASRs as well if the volatility and the economics work for us. And so we're looking at all those things holistically in conjunction with the board and we're being thoughtful about them. What we do believe that for this year, we'll spend about $1.3 billion worth of share buyback. Combined with our dividend policy, that will return about $1.5 billion back to the shareholders. Daniel Fisher: And then relative to elevated stock price. I mean we're very comfortable in buying back our shares at this level still, that's absolutely something that we talk to our finance committee and our board with and we model things internally. And yes, we're very comfortable returning value back to our shareholders right now at these levels and even elevated above this. So -- but it's definitely something that we'll look at. But where the stock is, even trading up today, it's like we're very comfortable buying back shares at this level. So it's a great question. And it's, hey, let's see how we get on here over the next 3 to 6 months, but I think we owe it to return value back to our shareholders at the levels that we're talking about for the foreseeable future. And it's just a good -- it's a really good mechanism in behavior return value if we're generating more free cash flow, generating more earnings, we have plenty of dry powder to do things as they present themselves in terms of bolt-on M&A, et cetera. So I think we can do all of it. And that's kind of how we're looking at it at this point. Operator: Our next question comes from the line of Adam Samuelson with Goldman Sachs. Adam Samuelson: Let me extend also my congratulations to Ann on her retirement and addition to the family. Maybe I wanted to come back to the cash flow side first. Maybe, Howard, I just want to clarify, you bought that -- you talked about $2.8 billion of debt in the quarter. I believe that was higher than what had been initially kind of targeted, maybe there's some timing component to that. Did you also reduce the factoring programs on receivables? Or is that a cash outflow that is still yet to occur is obviously a lot of moving pieces on the balance sheet, I'm trying to make sure we understand what has happened and what has not in the cash... Howard Yu: Yes, Yes, no problem, Adam. So yes, we did retire $2.8 billion of debt that was -- we had talked about it from an apples-and-apples standpoint of about $2 billion, but recognizing that, that was anticipating the sale of aerospace sometime after the March 15 date. March 15, we had to do about EUR 750 million denominated debt that was retired. And so that equates to the essentially additional USD 800 million of that gets us to the $2.8 billion in the quarter. . As it relates to factoring, given the cash that we had on hand, we did move forward with the factoring in a meaningful way. We still -- we probably did more of the unwinding here in the first quarter than we would anticipate for the full year. And so that was to the tune probably about $1.1 billion. But by year-end, we're going to stay with our goal -- specified goal and target of unwinding about $0.5 billion of AR factoring by the end of this year. So you'll see that going a little bit the other way throughout the course of this year as we have a $1 billion tax payment that we're going to have to make here in second half -- or actually in second quarter and through the second half as well. Adam Samuelson: Okay. That's very helpful. And if I could maybe just follow up as we maybe take a step back because there's a lot of moving pieces within comparable EPS growth off the $2.90 last year that obviously had aerospace earnings in it. You pay off debt, there's interest income, reduced factoring expense, share repurchase, tax rate inches up. Maybe if we step back and we think about the 3 core beverage can kind of operating units, globally, Dan, you talked about low to mid-single-digit volume growth, what should we think about the operating profit growth in those core business units off that level of growth? Obviously, in the first quarter, especially North America, had some -- had some favorability, but help us think about what that core operating leverage to look like with that kind of volume growth this year? Howard Yu: I would say overall, Adam, that we anticipate operating leverage to continue on here, and you'll see that. What we've said as it contextualizes EPS as we've said, hey, mid-single-digit plus on a year-over-year basis. We've said that the aerospace sale would essentially be neutral for us on an EPS standpoint, given the operating earnings loss associated with aerospace, but the pickup associated with the -- with the additional cash, whether it be interest income, reduction in interest expenses, we've retired debt. And as we go ahead and improve on some of these factoring programs. So we've said that for the full year, the EPS would be neutral associated with the aerospace sales. Think of it in the context of a 2x leverage. And so that's the way we think of it within the P&L. And so that's consistent with what we've modeled. That's consistent with what we're going to see here through the duration of 2024. Daniel Fisher: Yes. I think for the core beverage business, if you -- it's significantly higher than the historical 2x leverage if you were to back out the nearly $40 million of onetime purchase power agreement. So it's still in excess of the 2x leverage. I think somewhere in the neighborhood of $100 million of operating earnings we're going to get out of the beverage business and an improved result year-over-year and that obviously has the lapping of the $40 million -- $30 million, $40 million onetime benefit. Operator: Our next question comes from the line of Phil Ng with Jefferies. Philip Ng: Congrats on the strong quarter. And like everyone else, I wanted to thank Ann for all her help over the years, and congratulations to Brandon and Miranda as well. I guess my first question is really the free cash flow power of the business, certainly noisy with the aerospace sale this year. Can it be helpful, Howard, perhaps to give us a little more perspective on how you think about CapEx as we look out to 2025 and beyond, maybe 2026? It's been a big growth CapEx cycle. So just give us a little more context on how to think about that, the free cash flow and certainly a high-class problem to have, but how should we think about buyback as well? Pretty steady dose every quarter, more opportunistic if the pullback? Just kind of give us a little playbook and how you're thinking about the pace of buybacks. Howard Yu: Yes. So sure, Phil. Let me go ahead and get into that a little bit. As it relates to free cash flow, I mean, I think the way to think of it is, say, we're anchoring to a normalized free cash flow in the $900 million to $1 billion range, right? That excludes some of the impact of the factoring unwind, and we talked about that in the context of about $0.5 billion, right? So -- and I think that we can see that going forward on a consistent basis. Dan has talked about the operating cash generation of this business and how rich that is. And so we believe that that's going to help fuel the share buyback even into years that you specified. As it relates to CapEx, I mean, the way we think about it here is getting CapEx in the ballpark of GAAP D&A on a consistent basis. I recognize that over the last few years, that CapEx had been a little bit outgrown. And so we're returning back to that discipline of getting CapEx into the D&A envelope. And we think that, that's going to happen here for the next few years as well. As it relates to share buyback, look, as Dan said, I mean, we feel good about the price that it's at and we'll continue to buy if there is any, for any reason at all, reason for us to be a little bit more opportunistic because of the prices, then we'll look at that as well. And so I think that we have those full optionality. I think the greater point here to know is that we're going to return to a consistent buying back of shares, something that we had paused on for a few years here, and we'll do that here in 2024. We'll do that here in 2025. And no reason to think that we wouldn't do that going forward beyond that. Daniel Fisher: Yes, Phil, I would say -- I would -- in the simplest manner, we are running our business, the expectation of running our business enterprise-wide is that net income equals free cash flow. So as I don't want you to think about locking us in at $900 million of free cash flow. As our margins expand, we will mitigate the working capital build associated with the growth. And if you're in that 2%, 3%, 4%, you should be able to manage that. We got room to do that. We spend that GAAP D&A levels and some years it will be less, some years it might be a bit more. But this -- we should be generating a steady diet of free cash flow and returning that back to our shareholders consistently. To your point, there may be some opportunities with a pullback where we can do some more. But I think you should be locking in that you're going to get an overwhelming majority of that free cash flow coming back to you in the form of dividends and share buybacks, over $1 billion share buybacks for the foreseeable future. Philip Ng: Okay. That's great. And Dan, you gave a little more perspective on Europe. It sounds like still kind of a choppy environment, but good to see some restocking. How are your customers gearing up for the busy summer months. Certainly, there's big -- some big sporting events like the Olympics and the Euros and stuff of that nature. Are they gearing up for that? And then I think on your prepared remarks, you made some comment about perhaps Europe's recovery would be more back half-weighted. Give us a little more perspective why perhaps the back half is a little better than the front half? Daniel Fisher: Yes. Entering the year, it was really the comments were more macro related and end consumer and the strength of the end consumer. We got the benefit of the restock and a little bit more favorable behavior by our customers kind of pushing volume. But we thought that there would be a natural tendency for inflation to come back and for the regasification projects that come online. So there would be more room for optimism in the second half of the year, and that's really what we heard from our customers as well. Your point about the Euro Cup certainly is helpful. I'm more -- I get more excited about the soccer "football" drinking behaviors than I do about the Olympics drinking behaviors. So that generally moves the needle a lot more than the Olympics, if you will. So that will be helpful, and we've certainly heard that from -- especially our larger beer customers and elements of Western Europe. So yes, it's really macro related. And I think a lot of those things are still playing out in a more favorable manner with the watch out being what happens in the Middle East as it relates to energy prices and how does that impact the end consumer. But we're encouraged. Nothing contractual is coming online. It's incredibly stable. This is just -- and we're starting to see increments of better pricing behaviors, a little stronger end consumer, substrate shift continues to manifest in a favorable manner for us, especially as it relates to glass moving into cans. So a bunch of small things kind of add up to a more improved outlook in the second half of the year. And we haven't seen anything that would influence or impact that to the negative, if anything, may be an increment higher. Philip Ng: Got it. And then just one more for me. On North America, if I heard you correctly, you had some pull forward earnings from 2Q to 1Q. Do you still expect North America earnings to be up year-over-year in 2Q. And then give us a little update. I think there's been some movement in North America as well with the shelf space reset on the beer side. And one of your larger peer customers, I believe, is still dealing with some ongoing labor issues, I think, down in Texas. Any update on that front and how you're kind of managing that? Daniel Fisher: Yes, I'll let -- Howard, why don't you cover the earnings, and I'll get back over to the union issues. Howard Yu: Yes. I think that's right, Phil. I do think that year-over-year earnings will still increment upwards here in the second quarter despite some of the pull-in from Q2 to Q1. I think as Dan said, it's probably $10 million or $15 million that improved the first quarter. But despite that, we still anticipate that we'll have some reasonable growth as it relates to operating earnings in the second quarter as well. Daniel Fisher: Yes. I think the shelf resets have been communicated really well from -- there's been a couple of folks that have won disproportionately, and we anticipated that in our numbers. So nothing's moved up, down or sideways. I would say, even with -- even with the shelf reset, I think the beer category is down. So I think it's less about the category reset, and it's more about beer and how they get on with promotional activity in the peak season, are they going to drive value -- excuse me, volume. And then, yes, we're connected with our plants in Texas with that particular brewer. They're doing a really nice job of managing it right now, but it's still ongoing. It hasn't been resolved, but we're certainly working with our partner to make sure that we're running what we can, and it's being effectively managed. And I think this is a bit of the way of the world right now as it relates to some of the strength of the unions, broadly speaking, and kind of the manufacturing base. So we had to also work with another major brewer in the quarter to work toward mitigating any supply chain shifts and -- so I think we're all coming to a realization that this is probably par for the course moving forward, and everybody is getting aligned to have more thoughtful conversations in and around when these contracts come up across the industry and making sure that collectively throughout the system, we can manage them. Operator: Our next question comes from the line of Pamela Kaufman with Morgan Stanley. Stefan Diaz: This is actually Stefan Diaz sitting in for Pam. And just to echo my colleagues, congratulations to Ann and Brandon and Miranda for the increased responsibility. Now that the aerospace deal is closed and proceeds are in hand. Can you give any details around the potential innovation investments? Daniel Fisher: Yes. It's a good question. So we're always -- I guess we have an underlying thought process that we're always investing. There's a combination of R&D that transition that hopefully in the commercial innovation projects. And I think you'll hear this from just about everyone that the opportunity set for us is different by region, but innovation as it relates to getting a constructive package and vehicle that can really attack, if you will, plastic. And the big linchpin there is going to be resealability. And I think there's a lot in that area that's being worked on and it's being worked on by everyone in the industry and all of our customers. So that -- those will be the big unlocks. And then there's some pretty interesting stuff that's going to be coming out as it relates to new products. And it's also -- these are also applications that benefit substrate shift. I think that's the real focus of innovation more so than a unique graphic depiction, et cetera. It's like can you have a package that is easily transferable into whatever the benefits of the other substrate are, and can you offset those and then you've got a far more circular and a better, I think, sustainable package that gets supplant that. And so that's where that focus is. And then in terms of new products, there's a lot -- there's a lot that's happening in the CSD space. There's a lot happening, better health, lower calorie, lower sugar, that's all real. And then very creative outlooks as it relates to alcohol categories, new alcohol categories and then substrate application for us. That's where the innovation is. But I would say nothing that would be incrementally different in terms of our spend behavior just because we have a stronger balance sheet. These are things that we're working on and working on with our partners. And as it makes sense and as it can be commercialized at scale, we're generally the right person, right company to do that. And so that's how we're looking at innovation right now. Stefan Diaz: Great. And then I believe your initial volume guide was for low single digits globally, and now you expect low single digit to mid-single digits. Is the raise at the top end based on strong 1Q? Or do you expect better demand throughout the year now? And maybe what do you need to see to hit the top end of that guide? Daniel Fisher: Yes. Peak season dependent. Just to be abundantly transparent. I mean if I'm talking about 3.4% growth versus 3.3%, I think the 3.3% starts to look like mid-range versus -- so I would say we got out ahead of the gate. We had favorable mix in South America. We're a little ahead in Europe. Scanner data is a little behind in North America. So the balance of that seems like net-net-net, that's a little favorable. Until we get through peak season on 70% of our business, I think I've ranged it appropriately. And regardless of whether it's low single digits or mid-single digits, you're going to see cash flow generation, EPS mid-single digit plus share buyback to the tune of nearly $1.3 billion. So we're really confident in the underlying performance and behavior of the business. Let's see how peak season gets on. Stefan Diaz: Great. And maybe if I could sneak one more quick one in here. Can you just go through how April trends are benchmarking versus your expectations? Daniel Fisher: Yes, April is largely in line, a little softer than March, but in line with our expectation. And as you know, Easter fell a week different last year than it did this year. And so that plays into it a bit. So it's -- I think it's there or thereabouts. And it really -- a couple of weeks before Memorial Day is when things really start to pick up. So it's really the back half of the second quarter where it's most meaningful. Christine, that will be the last question. I think we're a couple of minutes over. Operator: This ends the question-and-answer session. I would now like to turn the floor back over to management for closing comments. Daniel Fisher: Yes. Thanks. I just -- just a quick reminder, June 18, New York Stock Exchange is our Investor Day. Again, I'd like to thank Ann for her incredible service to the company and certainly echo all the very nice comments toward Brandon and Miranda. And thanks to all of our employees. We look forward to talking to you again at the end of the next quarter, if not before at Investor Day. Thank you. Operator: Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.

Operator: Greetings, and welcome to the Ball Corporation Fourth Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Dan Fisher, CEO. Thank you, sir. You may begin. Daniel Fisher: Thank you, Christina. Good morning, everyone. This is Ball Corporation's conference call regarding the company's fourth quarter and full year 2023 results. The information provided during this call will contain forward-looking statements. Actual results or outcomes may differ materially from those that may be expressed or implied. Some factors that could cause the results or outcomes to differ are in the company's latest 10-K and in other company SEC filings as well as company news releases. If you do not already have our earnings release, it is available on our website@ball.com. Information regarding the use of non-GAAP financial measures may also be found in the Notes Section of today's earnings release. In addition, the release includes a summary of non-comparable items, as well as a reconciliation of comparable net earnings and diluted earnings per share calculations. Before we discuss Ball's strong earnings and cash flow performance, I would like to remind call participants that on August 17, 2023, the company announced an agreement to sell its aerospace business. The transaction is subject to regulatory approvals and certain closing conditions and adjustments. Relative to the company's aerospace divestiture, which is projected to close in the first half of 2024, certain forward-looking financial metrics provided in today's earnings release and conference call commentary may differ from those expressed or implied due to the timing of a successful closing of the timing of the proposed use of proceeds. Today I'm joined on our call by Howard Yu, EVP and CFO. I will provide some brief introductory remarks. Howard will discuss 2023 financial performance and key metrics for 2024, and then we will finish up with closing comments and Q&A. Our team delivered strong operations-driven fourth quarter results and for the full year. We achieved double-digit comparable operating earnings growth and generated $818 million in free cash flow. 2023 also delivered a dynamic set of strategic decisions and factors that influenced results and sharpened Ball's vision for the future, including our decisions to sell aerospace for a premium valuation and to reduce fixed costs by adjusting our manufacturing footprint and factors that influenced year-over-year results, such as a large U.S. customer experiencing major brand disruption, an $86 million comparable operating earnings headwind due to the Russian business sale, and the effect of Argentine hyperinflation and currency devaluation. Late in 2023, we also had the good fortune of welcoming Howard to Ball. Many of you listening have already had the pleasure of meeting with Howard at multiple conferences and our investor community welcome reception in November. His financial expertise, engaging nature and fresh eyes are adding value out of the gate and activating another stage of continuous improvement actions at Ball. Over our 144-year history, each year has presented its opportunities, challenges and changes, and the legacy of how the Ball team continuously adapts to position the company for long-term success is the reason we are all here today. I'm proud to say that the resiliency of our team and our chosen substrate, aluminum packaging, combined with improving plant and program execution, more than offset the earnings impact of challenges experienced in 2023. And there were and are many more things to be done to make the most of our opportunities. Reflecting further on 2023, our customer mix and inflationary effects on end consumer demand drove our shipments. Global shipments ended 2023 down 3.3%, excluding Russia sale impact, and shipments would have ended the year roughly flat versus 2022, absent the U.S. brand disruption issue. All-in, the aluminum package industry continues to outperform plastics and glass packaging. For Ball, continued volume strength in Brazil and better than expected volume in North America to close out 2023 offset regional softness in Argentina and EMEA. For a complete summary of regional shipments for the fourth quarter and full year of 2023, please refer to today's earnings release. Looking ahead, our global teams are energized by recent commercial wins and other constructive customer discussions to continue packaged mix shift to cans. We will continue to advance sustainability of aluminum packaging by accelerating our pathway to carbon neutral and leveraging the scale of our footprint, innovative portfolio, and value chain partnerships to expand opportunities for our customers over the long-term. Given seasonality, our customer mix, and the April 2024 anniversary of the U.S. customer brand disruption, we anticipate year-over-year volume growth to favorably inflect after first quarter 2024 and accelerate further in 2025. Significant opportunity lies ahead to offset the financial impact of the projected aerospace sale and to drive compounding value creation for our fellow shareholders. Key drivers in 2024 will be the utilization of net proceeds from the aerospace sale to deleverage and repurchase stock, improving operational efficiencies and fixed cost absorption, leveraging our well-capitalized plant assets to grow the use of innovative, sustainable aluminum packaging across channels, categories, and venues, in addition to further actions to strengthen the balance sheet and reduce long-term liabilities. Based on our current demand expectations and the potential timing and benefits of the aerospace sale proceeds, we are positioned to grow comparable diluted EPS, generate strong free cash flow, strengthen our balance sheet, and accelerate return of value to shareholders in 2024. We look forward to showcasing our team and unveiling our future operating model and long-term growth plans at our biennial Investor Day scheduled for June 18th in New York City at the New York Stock Exchange. And with that, I'll turn it over to Howard. Howard Yu: Thanks Dan. Over the first few months of my onboarding and immersion, I have learned more about the business by visiting our teams in North America, South America, and EMEA, toured multiple manufacturing facilities to see how our innovative products are made, and attended several investor events where I've had the opportunity to meet many of you on this call. It has become more apparent what a terrific workforce we have around the world and what a tremendous opportunity we have in front of us to make an impact for our customers, shareholders, and communities. I would like to thank my global colleagues, investors, and analysts who have taken the time to give me such a warm welcome. Turning to our results. 2023 full year comparable diluted earnings per share was $2.90 versus $2.78 in 2022. And fourth quarter 2023 comparable diluted earnings per share was $0.78 versus $0.44 in the fourth quarter of 2022, an increase of 4.3% and 77.3%, respectively. Full year sales decreased due to the pass-through of lower aluminum prices, lower beverage can volumes, and the sale of our Russian business offset by the pass-through of inflationary costs and increased volumes in our aluminum aerosol. Full year comparable operating earnings increased nearly 10% year-over-year, primarily due to the contractual pass-through of inflationary costs, fixed cost savings, and benefits of our prior year SG&A cost-out initiative offsetting the headwinds in the sale of our Russia business and lower volumes. The global operations team finished the year strong, hitting their CapEx, raw, and finished inventory goals, setting the stage for continued improvement of better fixed cost absorption in 2024, particularly after we anniversary the customer brand disruption and cease production in the Kent plant in the first quarter of 2024. Versus recent years, we anticipate our production aligning with shipments as we step into incremental volume growth later in 2024. In North America, supply demand has tightened up following the footprint adjustments, and we continue to focus on lowering costs across our well-capitalized plant network and driving incremental volume growth without spending incremental capital. Exiting 2023, PPI remains a net positive. Non-alcohol global key accounts have started to gain traction in retail, and we continue to prepare for additional modest volume improvement after the first quarter and net of historic customer shifts. In EMEA, the business nearly filled the $86 million comparable operating earnings hole from the Russia business sale and continue to navigate varying consumer end demand conditions, particularly in Egypt, Turkey, and the U.K. The business is poised for year-over-year comparable earnings growth in 2024, largely in the second half. In South America, our volumes increased 2.2% in the fourth quarter of 2023, despite ongoing weakness in Argentina. We continue to monitor the situation in Argentina and potential scenarios that could impact results. We remain optimistic about Brazil, with January volumes off to a good start as the summer selling season continues. Our non-reportable results led by aluminum aerosol 8.2% volume growth and double-digit operating earnings growth finished 2023 strong. Moving on to additional key financial metrics and goals for 2024. We achieved our year-end 2023 net debt to comparable EBITDA goal of 3.7 times, and incorporating the use of projected aerospace sale proceeds and strong cash generation in 2024, we anticipate year-end 2024 net debt to comparable EBITDA to be in the range of 2.7 times. 2024 CapEx is targeted to be in the range of $650 million, a year-over-year reduction of $400 million, and largely driven by carry-in capital related to prior year’s projects. 2024 free cash flow is expected to be in the range of $500 million, excluding the [technical difficulty] Operator: Ladies and gentlemen, please stand by. Your conference will resume momentarily. Again, ladies and gentlemen, please continue to hold. Your conference will resume momentarily. Ladies and gentlemen, your conference may now resume. Howard Yu: Cash flow is expected to be in the range of $500 million, excluding the impact of taxes due on the projected aerospace sale. Our 2024 full year effective tax rate on comparable earnings, including the effect of projected aerospace sale, is expected to be approximately 21%, largely driven by lower year-over-year R&D tax credit. Full year 2024 interest expense is expected to be in the range of $330 million, including the impact of lower leverage following the successful aerospace closing. Full year 2024 corporate undistributed costs recorded in other non-reportable as expected to be in the range of $85 million and more first half-weighted versus last year. And last week, Ball declared its quarterly cash dividend, and we look forward to reinitiating meaningful share purchases during 2024 and beyond. Also, a call-out about tough year-over-year comps we face in the first quarter of 2024, driven by North America and corporate costs. Due to the 2023 favorable virtual power purchase agreement settlement, totaling approximately $30 million and a similar impact of the customer brand disruption, which does not anniversary until April of 2024, North America earnings and volumes will be down year-over-year in the first quarter. Looking at 2024, we will be laser-focused on operational excellence, driving efficiency and productivity across our business, optimizing SG&A costs, and offsetting stranded costs post-aerospace divesture. In addition to strengthening our balance sheet by deleveraging and other actions. We are committed to delivering value through share repurchases and dividends, and will communicate and stay close to our shareholders. With that, I'll turn it back to Dan. Daniel Fisher: Thanks Howard. As we continue to make progress in 2024, we anticipate growing our EPS and offsetting the divestiture through growth in our aluminum packaging operations, interest income, lower interest expense, and the benefit of a lower share count. Looking ahead, we are focused on executing our enterprise-wide strategy to advance sustainable aluminum packaging solutions on a global scale by accelerating our pathway to carbon neutral and unlocking additional value from within the organization by driving continuous process improvement and operational excellence. Together, we will strive to deliver innovative aluminum packaging solutions that can lead to a world-free from waste and embark on a path to deliver compounding shareholder returns in 2024 and beyond. We appreciate the work being done across the organization and extend our well wishes for a prosperous 2024 to our employees, customers, suppliers, stakeholders, and everyone listening today. Thank you to everyone listening, and with that, Christina, we're ready for questions. Operator: Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Thank you. Our first question comes from the line of Ghansham Panjabi with Baird. Please receive with your question. Ghansham Panjabi: Thank you, operator. Good morning, everybody. Daniel Fisher: Hey, good morning. Ghansham Panjabi: Morning. Dan, maybe you could just start off just kind of giving us the base case for volume assumptions across the different geographies you have exposure to for 2024. I know you made some comments on the first quarter, but how do you think the full year is sort of going to unfold with all these ups and downs across the statements, Europe starting to decelerate and obviously comps in North America? Daniel Fisher: Sure. Yeah, so I think in Europe, what you'll see is -- I think in both Europe and North America, you'll see volumes get better. Sequentially, I think you'll start to return to growth somewhere in the second quarter in North America and you'll see growth in the second, third and the fourth quarter in Europe as well. As we've -- North America is unique, obviously, because we're lapping the difficult comp there, but we'll get to flat for the full year in that range, maybe a little better. But you'll start to see sequential improvement towards the end of the year and then heading into 2025 will be kind of in that growth range of 2% to 3%, I believe heading into 2025. That being said, Ghansham, it's early days, but we're a little ahead here in January, really in all three regions. That should be noted. So, it's only one month, obviously, but we're actually seeing positive inflections in the U.S. for the last four weeks, slightly favorable. And for one week, we're favorable. And that's the first time in a couple years that we've seen that. So, knock on wood off to a decent start. I'm not overly excited, but it's better than it has been. So that's a positive. And then in South America, we believe like mid single digit growth. Brazil continues to be strong for us. Our exposure to the other markets will play a role. Argentina is a little ahead of what we thought it would be from a plan basis. But that's still down year-over-year. But I think a lot of the changes that the executive branch made in Argentina, they're coming off as a little bit more favorable than I think a lot of the world thought would happen from macroeconomic standpoint at the tail in the last year. So, we're a bit encouraged there, but it is Argentina. Let's see what happens. So, 2% to 3% growth globally mid to high single digits for South America, low mid single digits for Europe and flattish with a lean that we could get a little bit of growth in North America for 2024. Ghansham Panjabi: Great. You need Taylor Swift to push cans. Daniel Fisher: Yeah. Ghansham Panjabi: And then second question, the call kind of cut out during -- I just want to make sure I understood the free cash flow was $500 million for 2024. And if so, what are the embedded assumptions in there? I know you gave cash interest, I mean, interest expense, because we're having a tough time getting to that number with $650 million. Daniel Fisher: Sure, Ghansham. So, let me try to walk you through that a little bit. I think we have a tax payment that's going to be associated with the aerospace divestiture that runs through our operating. And so, obviously, it's going to impact our free cash flow. We have talked about a $650 million CapEx number that we anticipate as well. And then what we're doing, and we talked about a little bit in the third quarter, but here in 2024 we will be unwinding some of the factoring the balance sheet AR that we've historically used. And so that will obviously be an outflow from a cash flow perspective. And so, we're targeting, let's call it roughly half a billion dollars in that as well. And so -- but maybe to speak to the underlying business, we will continue to generate the operating earnings that you see roughly in the range of 15 to 18 in terms of a billion consistent with what you saw here in 2023. Ghansham Panjabi: Fantastic. Thank you so much. Daniel Fisher: Yeah. Operator: Our next question comes from the line of Arun Viswanathan with RBC. Please proceed with your question. Arun Viswanathan: Great. Thanks for taking my question. Daniel Fisher: Sure. Arun Viswanathan: I guess, first off in North America, just wanted to understand what you're seeing as far as promotional activity and maybe you can just kind of reiterate or update your thoughts on how we kind of proceed through the first half and if there's any been any offset from the Bud Light loss and in other -- the other kind of brands that you're seeing or customers. Daniel Fisher: Sure. I think speaking to -- I think your question leans a little bit into am I seeing any promotional activity? Is there anything different just in the domestic landscape here? I'd say what we're hearing from our customers and it's manifesting slightly, you don't see a lot of promotional activity in January. You do as we -- now the next two weeks as we lead in the Super Bowl is typically when you would see some traditional and we are seeing some of that. But I think writ large, what everyone of the large CPG customers is acknowledging is that they're going to have to fight for top line this year. And that should benefit. It should benefit us. That should benefit the industry. We're seeing some inflections of growth, as I mentioned in the four week and the one week that look different than I think the last 18 to 24 months. So that's all positive. And then relative to kind of filling the Bud Light hole, if you will. Yes, there's some incremental volume that's helping to net impact that. But for us, we do a lot of that product and they have a vertical. And so, we're exposed to that brand. The things that were exposed to elsewhere are much smaller. They're growing. They're filling in some of the hole, but it's not -- it's not material, I would say it's incrementally better, not materially better. It's still the best thing is going to be other products from that particular brewer to grow. And so, I think that with a combination of you are seeing that brand kind of bottom out and starting to increment up. So, all of those things we anticipated it looking like this probably for the last six to nine months. And we've indicated that. There's nothing meaningful different from a guidance standpoint that I could really share at this point. We may see a little bit more now that we're heading into Super Bowl and some more traditional promotional activities. But I don't think you completely close the gap on this until we see other brands, other products kind of close that gap for us here as we lap the April sunsetting of that marketing issue. Arun Viswanathan: Great. Thanks. And then if I could just ask about one more follow up. Daniel Fisher: Yeah, sure. Arun Viswanathan: It's on the portfolio, or at least the footprint. Do you think there's more actions that are coming as far as supply/demand and maybe your own capacity footprint, maybe by region, is there a need to maybe adjust some of your footprint in Europe or North America? I know you're not going ahead with Las Vegas, but what are some of your thoughts and maybe just kind of loop in. If you've seen any -- or if you're expecting to kind of announce like a larger scale cost reduction program within North America, or if you're kind of satisfied with where you are. Thanks. Daniel Fisher: Yeah. I think within North America, we're satisfied. I think we're seeing other industry participants kind of model our behavior. What we've done just at a high level, and I appreciate the question is we've really retired candidly older, less efficient assets that we're going to require a lot more maintenance CapEx to get them up to where we need to be to perform in the marketplace. So we've got, if you will, a more fit for purpose structure in North America. And as you see volumes inflect, we won't need cost out what we just need to do is continue to run these facilities as we are continue to ramp up the learning curve. Some of these are still new with new lines. And all of that will lend itself to a more productive and a higher profitable leverage fall through as we see the ramp up. Europe, I think we think we've got -- we've got to continue to look at Europe. I think we've got to continue to look at South America just be cognizant of the fact that there's a lot going on in those regions. There's a couple conflicts in Europe and the Middle East. So all of that will certainly play a role. Inflationary pressures, whether or not the regasification takes place in the mirror in which we think in Europe. So, a lot going into those conversations and decisions, but I think our footprints really solid to deliver on the plans that we've built here, pretty modest growth for this year. And just trying to take advantage of all the actions that we've laid in place and continue to see plants perform and more productivity to be generated as volumes inflect. Arun Viswanathan: Thanks a lot. Daniel Fisher: Yeah. Operator: Our next question comes from line of George Staphos with Bank of America. Please proceed with your question. George Staphos: Hi. Thanks very much. Good morning everybody. Thanks for the details. Daniel Fisher: Morning. George Staphos: Hey, Dan -- good morning. So, first question I had. Thanks for the rundown on what you're expecting. I know you're focused on Ball Corporation obviously, but what do you think the market, particularly North America will grow at this year if you had a sense? Should we assume kind of the -- what your normal growth would be two to four, or do you think it's a little bit less than that or more than that. Daniel Fisher: Yeah. I do think it'll be in that two to four range. I don't -- there's been some contractual shifts a little bit that's been well documented. So, us being flat means that we've rebalanced our portfolio. I think some others may be growing a bit. So yeah, I'd say low end is the 2%. Let's see what happens in peak season, but we're off to a much more normalized pricing behavior by our customers which is really -- we've talked about, this we need to see that in order to feel some level of confidence in the underlying volumes, and they need volume. So, I'm feeling good. It's in that longer term range with the possibility to inflect into 2025. There's a number of conversations in and around some substrate shift. That's back in the ether in a manner in which it hasn't been for the last couple years, so you might exit the year with a slightly better run rate, but I think that two to three, two to four is a pretty good range industry-wide. George Staphos: Okay. No, I appreciate that Dan. And one question I had in terms of impact. It's having other positive or negative for you in terms of your operations and demand. There's been some discussion in the trade about some of the beverage companies having their operational issues to plan around which may have led or may lead to disruptions? Will that be a help ultimately for you to that impact fourth quarter at all? Just trying to peer there to extent that we can. And then my last question, I'll turn it over. When you talk about carbon footprint, what we've seen is, and we've talked about this in the past, the plastic guys beginning to push on carbon footprint. What's your one to punch in terms of why you think aluminum is better on that metric versus plastics when we look about carbon footprint through the supply chain? Thanks guys and good luck in the quarter. Daniel Fisher: Yeah. I think from a balance sheet standpoint, our current spec depending on what region you're in it could be better and could be worse just for full disclosure. I think our plans and the investments that you're starting to see and rolling capacity coming online that's not fully online that continues to be invested in. And a number of those, it's 85% recycled content that's been guaranteed on the sheet, it's green energy and the backdrop of what's going to be fueling those facilities. So a lot of that's happening and a lot of that's happening around the world. We're already, for example, in Brazil, much better than any other substrate in terms of the carbon footprint there. And so a lot of the -- a lot of the supply chain, a lot of the investments and a lot of that industrial complex and around aluminum will reflect getting to where Brazil is. On top of that, there are technologies that are being introduced on the virgin aluminum side that are quite encouraging. And we actually just introduced 10% virgin aluminum on our cup with 90% recycled content that's very close to carbon neutral, because the virgin aluminum now, there's a couple of aluminum companies that have developed carbon free smelting operations and technologies. Those will continue to be invested in, a number of companies will do that. And so as you start to progress toward 2030 really being the goal, whereby people are going to have to put up or shut up. I like the trajectory of flight for aluminum right now much more than I did even two years ago to be quite honest with you. So, I think the investments are showing up. This -- the supply chain are committed in a lockstep in a number of associations to get to some of these aspirational targets. And there are offtake agreements and investments happening to ensure that that happens. So, this is no longer a theoretical argument for us. We have real plans to get there. And I'm confident we'll get there in a shorter period of time than anybody else. But we have to continue to see that investment and continue to step into that. So that's the truth. And we're headed and it's going to become more and more transparent and we're working with our customers to get there. They need this as well with some of the SEC reporting that's being talked about in 2027 and obviously the European reporting requirements that show up in 2026. So, we're kind of sprinting after this carbon neutrality in a way that everybody's kind of got to put up or shut up. And I think we're in a good spot to deliver. George Staphos: Thanks Dan. And just on customer disruptions and what it might mean for you. Daniel Fisher: Yeah. We have the ability now with our -- we're talking specifically in North America, we have the ability. We've got a little slack capacity. We're running our plants much better than we were over the last two to three years. And so, I think we're going to be able to react better. We have much better dialogue, much better supply plans, much better S&OP process. We were all forced to dust those off over a COVID and the supply chain [technical difficulty] Operator: Ladies and gentlemen, please stand by your conference will resume momentarily. Again, ladies and gentlemen, please stand by your conference will resume momentarily. Your conference may now resume. Daniel Fisher: Okay. Thank you. Sorry about that. We lost connection there for a second. I think in response to the last question, I think we're in a good spot to react to volume surges, if you will, just because of how we're operating in North America, the slack capacity we have in the conversations and the S&OP process that's been established and currently being refined and improved upon each and every day. So, feel good about our ability to react to that. George Staphos: Thanks Dan. That's great. Operator: Our next question comes from the line of Mike Leithead with Barclays. Please proceed with your question. Mike Leithead: Great. Thank you. Good morning, guys. Daniel Fisher: Good morning. Mike Leithead: First question just on North America. I think for the full year, your volumes were down about 7%, but your operating EBIT was up about 11%, which suggests your unit economics got quite a bit better this year. So, if we do return to say a 1%, 2% volume type environment, I guess what sort of incremental margin should we expect on actual volume growth here in the business? Daniel Fisher: Yeah. Keep in mind just as a reference point. This year had a bit of catch up in terms of PPI economics. And so if you -- I think a go forward position more in line with our historical, if we get a percent of growth, we should get 2X in terms of earnings inflection. There's a chance to do a bit better because our footprint is in a better spot. It's more cost effective. But I would think in that 2X the volume unit growth in terms of earnings flow through and maybe a smidge more for the next coming years, depending on mix and channel and category and customer. Mike Leithead: Great. Thank you. And then second, just for Howard, I think you mentioned, if I heard correctly about $500 million for AR factoring unwind in 2024. I guess how much cost savings would you expect from that action? And where is that cost currently showing up in your P&L today? Howard Yu: Yeah. So, I mean, basically we use the current spot interest rate associated with the savings. So, if you take $0.5 billion, let's call it roughly 4% of that. And so, as it relates to the savings, we would see it come through in operating at the operating level in the SG&A line. And so that's typically where we would see -- the savings associated with that. Daniel Fisher: And the two regions specifically building on that is where the higher cost programs are in South America and in North America, but South America even the current spot market interest rates. Mike Leithead: Great. Thank you. Howard Yu: Sure. Operator: Our next question comes from a line of Edlain Rodriguez with Mizuho. Please proceed with your question. Edlain Rodriguez: Thank you. Good morning, everyone. Daniel Fisher: Good morning. Edlain Rodriguez: Just a quick follow-up on the capacity closure question. I mean, yes, you have rationalized your footprint. Like, do you think the industry as a whole is where it needs to be? Like, do other industry players need to close some capacity? Or is the market balanced now given the expected recovery in volume? Daniel Fisher: Yeah. I think the industry writ large in North America, I think is specifically your question is in a good spot, and keep in mind we're probably holding on to the majority of the excess capacity given the beer brand. So, we're managing that. We're managing that on a cash basis. That'll inflect over a period of time. But I think the industry -- again, if we're growing -- if the industry is growing at 2% to 4%, I think this is a good equilibrium to operate from in terms of asset utilization and supply demand balance. Edlain Rodriguez: Okay. And just one quick one on Argentina. We might not say again, like, what's the exposure there? Like, how much is Argentina's percentage of sales for the company? And do you expect people to be drinking less beer because of the currency devaluation? Or like -- what are you expecting there? Daniel Fisher: Yeah. So, the volume comment, there's a joke in here. I would expect them to be drinking more. But in all honesty, what we're seeing is -- the beer space is quite resilient and can growth and aluminum packaging growth versus glass has been very positive over the last handful of years. Let's see how folks get on there. But we're looking at Argentina being essentially flattish, maybe a tick better year-over-year 2022 to 20 -- excuse me -- 2023 to 2024. And inflecting in the back half of the year, probably in terms of volume and into 2025. But they continue to drink beer and they continue to drink beer out of cans and I just don't see a tremendous amount of growth or we shouldn't be counting on tremendous amount of growth versus last year until things start to settle down a bit more there. I'll let… Howard Yu: Yeah. I think maybe just to go ahead and characterize the size of business for us. It's roughly about a 1% of our operating earnings in 2023 and represents about 2% of our volume. And so, clearly, despite seeing 2023 negative volumes there in Argentina in the region, we still drove to 2%-plus growth driven by the strength of Brazil. So, hopefully that helps characterize a little bit about the size of that business. Edlain Rodriguez: Okay. Thank you very much. Operator: Our next question comes from the line of Phil Ng with Jefferies. Please proceed with your question. Phil Ng: Hey, guys. You guys have been cutting on and off and I think Howard, when you gave your outlook, part of that was cut off. So, I just want to make sure I heard you correctly. So you're guiding to $500 million of free cash flow for 2024, but from a normalized basis, that would probably look a lot better. Did you say Howard, it was like a $500 million headwind from factoring reversing and there's some impact on the tax for aerospace? Can you kind of flush that out? Just make sure we understand what the true free cash flow of power of this business would look like. Howard Yu: Sure. So, you're right, Phil. I think that is correct that in 2024 we do anticipate about $0.5 billion of factoring. What that will do is essentially add back in working capital. So it's out -- it's a use of cash in that regard. And then of the $5.6 billion total proceeds associated with the aerospace, we anticipate about $1 billion of that as a tax payment. And that also flows through operating, right? And so even though the inflow comes via investing, the outflow goes out of operating. And so I think those are a couple of the nuances associated with the year. Maybe if I just try to bridge for you guys from a 2023 standpoint, our operating cash flow in 2023 was about $1.8 billion, maybe a little north of that. Less the working capital in 2023, that's about $300 million and let's call it $360 million. That gets us to a jump off point, a base of 2024 of about $1.5 billion. And then if you go ahead and take out the tax payment, that gets us to about the $500 million in free cash flow that I referenced. Phil Ng: Okay. That's helpful. And then on Europe, can you guys provide a little more color? The quarter is definitely a little softer from a volumes perspective. Profitability still look quite strong. How are things kind of shaping up to start the year? I think, Dan, you were kind of pointing to maybe that business inflecting positively from a volume standpoint, maybe sometime in 2Q, but just kind of give us a little more color on how things are progressing in Europe and what you're seeing there. Daniel Fisher: Yeah. Phil, I think you're right. I think South America and North America ended the year inflecting favorably in terms of volume versus sort of our anticipation in Europe was softer. We started to see that at the third quarter call and signaled that, but it was even a bit softer than that. Places that we operate in that also contributed to that. I think Egypt and Turkey weren't helpful in terms of volumes in the fourth quarter. So that was a bit of what you're seeing in terms of a drag. Where we started the year, again, it's four weeks. We're a little bit better than what we thought. And we thought we'd be kind of flattish to down in the first quarter year-over-year for Europe. Right now, through the first four weeks, it's actually a little better. We thought that heading into peak season in the second half of next year, inflation would moderate in Europe and consumers would do a little better. I think you've seen a lot of retailers get pretty aggressive with CPG companies in terms of what prices they're showing on the shelves. And I think that is that -- all of those conditions should move favorably toward volume for us. So, hopefully that gives you some indication. We're still looking for modest growth for Europe inflecting sequentially in the quarters in the back half of the year. And we might be able to do just a smidge better here in the first quarter if all of these things continue to manifest in the way they are right now that we're seeing. Phil Ng: Okay. Appreciate the color. Daniel Fisher: Yeah. Operator: Our next question comes from the line of Adam Samuelson with Goldman Sachs. Please proceed with your question. Adam Samuelson: Yes, thank you. Good morning, everyone. Daniel Fisher: Hi, Adam. Adam Samuelson: Hi. So, I guess, maybe just going back to South America and I know Argentina had issues in the fourth quarter. Volumes in the segment were up 2%, profit was up 60%. And I'm just trying to make sure with FX and hyperinflation and the Argentine impact, I'm understanding kind of the magnitude of that profit growth in South America as we think about what that business will do or can do into the future if you don't have some of those disruptive impacts by the end of next year. Daniel Fisher: Yeah. I mean, Adam, I do think that we have quite a bit going on in Argentina. You saw the volume sawing off. I think as we think about the business and as we do various scenario planning, we continue to contemplate how things are looking with the fiscal policies and the like. But if you've looked at that business historically, it has been one of our best performing regions. And we continue to monitor obviously and derisk where we're possible. But as of today, our belief is that that market and we want to make sure that -- we support the customers there and our view on that business being intact long-term remain. Howard Yu: Yeah. I would add just a couple of comments. Obviously, when you're in more volatile emerging markets, quote unquote countries, you get paid really well to be there. So, when that volume is off, your margins will dissipate just from a country mix standpoint. That's the environment we're in probably versus where you saw us a couple years ago and specific to Argentina. So that volume matters. And as that comes back, we'll inflect up and we'll leverage up and you should see that improvement. Brazil has been very resilient here. The second half, we saw that inflect. We continue to see a strong January and our folks are calling for a decent and improved Q1. And that will help. Things that matter in Brazil then are going to show up in terms of product mix. The way we -- the way we sell our can and ends to our major customers have pretty big tax swings and impacts there. So that will matter. But in terms of the full year, quarter-to-quarter, maybe a little choppy, but the full year will continue to deflect, see a more profitable business there and see mid to single digit growth. Chile is off to a decent start. Paraguay is off to a decent start. So, I'm feeling good about South America. Argentina is meaningful for us though in terms of the question that you posed. So, we just have to -- we're holding to kind of flattish earnings year-over-year. And so, as we get growth from other areas, the margins won't look, I think on a mixed basis as good, but the earnings will flow through consistent with those regions and what those customers have delivered historically. Adam Samuelson: Okay. Now that's really helpful. And then if I just ask a follow-up on the other kind of non-reportable businesses, the aerosol and the cups business. Aerosol business had a good fourth quarter. How do we think about that line item offsetting corporate moving into 2024? Howard Yu: Yeah. We saw a -- I think we saw a year-over-year 40% improvement in operating earnings for the aerosol business. We're going to see double-digit growth in earnings next year. The team has done a phenomenal job turning that business around and it's inflecting the growth and a lot of that has to do with this reuse category that's emerging in places like Europe on the personal care spot, even the beverage spot side that we're taking advantage of and very disciplined contract management in terms of inflation and things of that nature. So that business will have doubled in earnings over about a 36-month period. We continue to see nice growth there. Cups will be incrementally better. We've seen foodservice grow. Retail has come off. It was a difficult retail year, but we should see continued tail -- tailwind in terms food is really the big opportunity set for cups, but negligible margin improvement, maybe taken the terms of 5 million to 10 million better year-over-year there. Adam Samuelson: Okay. That's all really helpful color. I'll pass it on. Thanks. Daniel Fisher: Thanks. Operator: Our next question comes from the line of Mike Roxland with Truist. Please proceed with your question. Mike Roxland: Thanks, Dan, Howard and management [ph] for taking my questions. Daniel Fisher: Sure. Mike Roxland: A lot of ground cover today. And just wanted to follow up quickly on the business development efforts you're pursuing. You called it out in the press release. Any reason why you felt the need to call it out? Is this something that you've recently accelerated? Daniel Fisher: Yes. We are making a more conscious effort to push innovation and it's being received. It's a catch 2022, right? Somebody has to be asking for it as well. And we're seeing more of that. I think I made reference to this in the last earnings call as well. It's going to take innovation and it's going to take differentiation for our customers. It's not just going to be pricing as they move forward. And so, in order to grow, they're going to have to get back to what they've historically done. New product launches, new brand launches, new innovations, all of that's going to matter. And that is something that we do really well. And so, we're stepping into those opportunities and that's why we called it out. And I suspect over the back half of this year and in 2025, you'll start to see some things show up on shelves that we're encouraged about. I'll leave it there. Mike Roxland: Got it. And does that require any headcount? Daniel Fisher: No. It doesn't require headcount. I think we have -- what we need. You've always got to look at your business and identify whether you have the right skill mix, whether you're right -- and I think those are the things that we're doing. And candidly, we'll talk about this more at Investor Day in June, but we're on the verge of being exclusively an aluminum packaging company. And we have a couple advantages, right? We are great at innovation, and we can sell sustainability at scale. And those two things need appropriate resources behind them. But that does not mean we're adding cost. In fact, we should be able to do this in a much more efficient manner than we have historically. Mike Roxland: Got it. And one quick follow-up, Dan. Just in terms of the retailers resetting shelf space, any early signs of how that's going to play out and when you can start -- maybe using some of that underutilized capacity that you have? Daniel Fisher: We're definitely growing with folks that are taking shelf space and share. It is inflecting in a couple of plants directly located to those customers. I wouldn't say it's meaningful across the system and it will continue to grow. But you really won't see those shelf space impacts until peak season. That's where it really manifests. And so, Q2 and Q3 will be something that could kind of alter hopefully positively our outlook as we're giving it today. Mike Roxland: Got it. Thanks very much and good luck in 2024. Daniel Fisher: Thank you. Operator: Our next question comes from the line of Gabe Hajde with Wells Fargo. Please proceed with your question. Gabe Hajde: Dan, Howard, good morning. Daniel Fisher: Hi, Gabe. Howard Yu: Hi, Gabe. Gabe Hajde: Somewhat of a fact check here, Dan. You mentioned growth would have been flattish, I guess on the volume side, had it not been for the brand disruption. Is that directionally then about 3 billion units that we should be thinking about? Daniel Fisher: That's exactly it. I mean 3 billion and somewhere in that $8,200 million impact. Gabe Hajde: Okay. Thank you for that. And then I feel like we've hit each segment sort of in different answers to questions. But I think I heard you in response to two questions ago. Segment earnings in South America, flattish on the full year, despite the mid single digit earnings growth -- or excuse me -- volume growth that you're talking about. And then in Bev, I guess North Central America, we have a $30 million bad guy from the energy contract. Let's call it 10 to 15 of a good guy for the unwinding of AR factoring, depending on timing. And then flattish volume growth. You mentioned the PPI should be positive. And I think there's a mid-year reset on your prior, I don't know, $180 million or so that was contracted. So, maybe a little bit more prescriptive there. And then low single digit growth in Europe translating into some operating earnings improvement at the segment level in Europe. Operator: Ladies and gentlemen, please stand by. Your conference will resume momentarily. Again, ladies and gentlemen, please continue to hold. Your conference will resume momentarily. Ladies and gentlemen, please continue to hold. Your conference will resume momentarily. Thank you. You may resume your conference. Gabe, please repeat your question. Daniel Fisher: Yeah. Gabe, I think I've got it, sorry. Gabe Hajde: No, I don't think anyone else wants to hear from you. Daniel Fisher: Let me start with South America. No, we should see an inflection in earnings year-over-year. Some of the factoring that we're retiring will help contribute to that. And we will see earnings growth off of the volume growth. And so, it will more or less mirror 2X the volume growth. It may come in a different form via AR factoring retirement and some interest expense being retired within our SG&A bucket. But it will -- if we grow 5%, we should grow close to 10% earnings in that range. We'll have mixed that a lot of said it country to country, but we have mechanisms to -- continue to inflect profitably on that growth, which we're encouraged by. And then your other question, I said the bridge, let me help you with some bridge items in North America. I think there's one piece that you didn't cover, which is in the first quarter. And Howard made this in his opening comments. The VP Fp&A [ph], you got $30 million. There's a like amount associated with the brand disruption. So, the unit volume we sold and the absorption we got from that brand that had the marketing issue in April is a like amount. So it's closer to $60 million in the first quarter in North America. You will get the PPI benefits and the other things I think the way you laid out, it was in a very constructive manner. And we're not anticipating anything inflecting mid-year. Right now, I think if PPI -- excuse me -- if inflation continues to be in a moderated position, it won't be a plus or minus like we've been talking about here the last two and a half, three years. I think it'll be more or less, we can offset whatever inflationary pickup via productivity gains. So, it won't be a bridge item, but you're right. We have to carry-in for the first six months. You've identified it correctly in terms of the quarter capture on the numbers. But the only thing that I would call out is the additional $30 million disruption probably from the brand issue in Q1. Gabe Hajde: Thank you for that, Dan. Daniel Fisher: Yeah. Operator: [Operator Instructions] Our next question comes from the line of Jeff Zekauskas with JP Morgan. Please proceed with your question. Jeffrey Zekauskas: Thanks very much. Daniel Fisher: Sure, Jeff. Jeffrey Zekauskas: It's been reported in the press that Carrefour, the French retailer, is pushing back against Pepsi because Pepsi wanted to increase prices, I don't know, 7% for 2024. And so what Carrefour is doing is moving away from Pepsi products across the board. When you see something like that, do you think that the consumer products companies may be following different strategies and different geographies? And do you see that as a sign that there's still an emphasis on increasing prices by the consumer products companies for next year? Daniel Fisher: Yeah. Good question. So, it's not just Carrefour. It's all throughout Europe. Europe is much more regulated on price increases. So by virtue of that, what you can do in North America and what you can do in Europe are vastly different. But what is happening is the retailers are moving very aggressive against brands that are contemplating price increases in Europe. And that disruption is a positive thing for us. In North America, it's also happening not as publicly. But I do think in North America, the brands have much more power in terms of their ability to price. And that's something that they're able to leverage, but they still have to have volume growth, and volume declined in the fourth quarter for a lot of those major brands at the end of the -- in Q3 in a manner in which everyone's going to have to take a different and a more historical approach to pricing. Volume is going to have to show up. And I think that's what the reaction has been in Europe in a really pronounced way because their inflationary pressures because the energy concerns have been much more present. And I think that's something that is regulated and it's also something where end consumers have really fallen off in terms of volume purchases in the fourth quarter. So hopefully that helps. But yes, different behavioral patterns in North America and Europe. It's always been that way. But I do think the aggressive nature of the retail sentiment now in Europe probably lends itself to a better outlook for us in terms of volume. Jeffrey Zekauskas: So would that mean that your better outcome for volume in Europe is more of a 2025 event rather than a 2024 event? Daniel Fisher: No, I think what we're pointing to -- so this is something that we were seeing in the fourth quarter. It's newsworthy now, but this is not something that would alter, I think, our outlook quite yet. I think what's more important is like the regasification and the inflationary pressures that folks are experiencing in the end consumer across Europe. That will be more important than I think this retail issue of 5% price versus 7%, 3%, something along that nature. So, we do believe that there'll be sequential volume improvement in Europe and it will inflect to kind of a low to mid single digit number kind of in that 3%-ish range for growth in Europe in our business. And that'll be stronger toward the back end of the year. And then to your point, yes, 2025 will be stronger even more. Jeffrey Zekauskas: Okay. Great. Thank you so much. Daniel Fisher: Thank you. And Christina, we'll take one more question. Operator: Thank you. Mr. Fisher, we actually have no further questions at this time. End of Q&A: Daniel Fisher: Okay. Thanks everybody. And we'll hopefully see most of you at the Investor Day here in June. Thanks very much. Operator: Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.

Operator: Greetings, and welcome to the Ball Corporation Third Quarter 2023 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded on Thursday, November 2, 2023. I would now like to turn the conference over to the Chairman and CEO, Mr. Dan Fisher. Please go ahead. Dan Fisher: Thanks, Frank. Good morning, everyone. This is Ball Corporation's conference call regarding the company's third quarter 2023 results. The information provided during this call will contain forward-looking statements. Actual results or outcomes may differ materially from those that may be expressed or implied. Some factors that could cause the results or outcomes to differ are in the company's latest 10-K and in other company SEC filings as well as company news releases. If you do not already have our earnings release, it is available on our website at ball.com. Information regarding the use of non-GAAP financial measures may also be found in the notes section of today's earnings release. Historical financial results for the divested Russian operations are reflected in the beverage packaging EMEA segment. See Note-1, business segment information. For a quarterly breakout of Russia's historical sales and comparable operating earnings. In addition, the release includes a summary of noncomparable items as well as a reconciliation of comparable net earnings and diluted earnings per share calculations. Before we dive into our discussion about Ball's solid third quarter earnings and cash flow performance, I would like to reference some important announcements made recently by the company. On August 17, the company announced an agreement to sell its Aerospace business to BAE Systems, Inc. for $5.6 billion in cash proceeds, achieving a premium multiple for a premium business. The transaction is subject to regulatory approvals and customary closing conditions and adjustments. Therefore, prospective estimates for certain financial metrics provided in today's earnings release and conference call commentary exclude any potential impact of the Aerospace business sale. The process to achieve necessary regulatory approvals is underway and when appropriate, a progress announcement will be made. Also, in early September, the company announced Scott Morrison's well-deserved retirement as Ball's CFO; and then Howard Yu has assumed the role of EVP and CFO. To ensure a smooth transition and to enable a successful close to the aerospace transaction, Scott has agreed to stay on with Ball as an adviser until September of 2024. It is a pleasure to have both Scott and Howard joining me on the call today. I'll provide some brief introductory remarks and provide Howard an opportunity to introduce himself. Scott will execute his last earnings call for Ball and discuss key financial metrics, and then we will finish up with closing comments and our outlook for the remainder of 2023 and Q&A. First, let me begin by taking a few minutes to thank Scott for his 23 years of service to Ball and his 13 years of serving as Ball's CFO. Some of you may not know that Scott has been an integral part of every Ball M&A deal since 1998. Pre-Ball, he was actually one of our outside bankers arranging the financing for the Reynolds Metals acquisition. In 2000, Scott joined Ball as our Treasurer and the rest is history. He has executed multiple transformative M&A and record-setting bond deals, successfully navigated ball through numerous economic cycles, always stepped up when called upon and he's completed 55 of these wonderful earnings calls now. Scott is sailing off into the sunset, literally. Our company is better because of Scott Morrison and personally I am thankful to have worked with him since 2010. At my request, Scott agreed to stay on a bit longer as CFO than he originally planned. And I'm so grateful he did. Nothing like a multiyear global pandemic land wars, the steepest rise in interest rates and inflation since the '70s and helping onboard a new CEO to finish off your incredibly successful career. Scott, thank you for your commitment to Ball, for being a friend, a trusted year, for being a candid mentor, a leader who surrounded himself with a capable team and someone who bled Ball blue. On behalf of the entire team, we wish you a long, happy and healthy retirement. I'm excited to introduce Howard Yu. Paul welcomed Howard as our new CFO in late September. Howard joins Ball with a wealth of experience as a public company CFO, and a CV packed with global experience and fresh eyes to unlock even more value for our stakeholders. Howard's focus on continuous improvement and passion for operational excellence will help lead all for the next decade. Howard, I'll turn it over to you to say a few words. Howard Yu: Thank you, Dan, and the entire Ball team for your warm welcome. Scott, congratulations on your retirement, and I really appreciate your insights and introductions during the first 30 day. My onboarding and immersion have been excellent, meeting with leaders across three continents, participating in the recent Board meetings and touring several manufacturing facilities. I look forward to meeting many of you in person at future investor events and industry conferences. We have a packed investor relations schedule to close out 2023, including a reception at the New York Stock Exchange on November 14. Reach out to Ann and the Investor Relations team for details about our upcoming outreach schedule. With that, I'll turn it back over to Dan. Dan Fisher: Thanks, Howard. Our team delivered strong third quarter results, improved operational efficiencies, inflationary cost recovery, the benefits of cost-out actions and a lower effective tax rate offset the impact of tough year-over-year volume comparisons. $43 million of higher interest expense and a $14 million operating earnings headwind from the Russian sale. I'm proud to say that our team did an excellent job of managing both costs working capital and isolated volatility across supply chain partners in our packaging and aerospace businesses during the quarter. Our overweight positions to the ongoing mass beer brand demand disruption in the U.S. and past regional customer mix decisions are evident in Ball's volume performance. Double-digit volume growth in Brazil and better than industry volume performance in EMEA helped to offset some of the North American headwind resulting in our global shipments being down 3% in the third quarter, a sequential improvement versus second quarter 2023, which was down 5%. Moving forward, our actions to tighten supply demand domestically, lower costs, improve operational efficiencies, leverage the sustainability attributes of our innovative aluminum packaging portfolio and our ability to lean into our well-capitalized low-cost plant assets will position Ball to win commercially and improve returns on invested capital. In addition, our actions to unlock value via the announced sale of our Aerospace business and utilize net proceeds to rapidly leverage in the range of three times, strengthen the balance sheet and return substantial value to shareholders via share repurchases and dividends will provide financial flexibility and drive value creation now and in the years to come. I would also like to extend my gratitude to our employees for working with the utmost level of respect, care and concern for one another while adapting to the recent company decision to sell Aerospace and further reduce fixed costs across our plant network. We're beginning to see some sequential improvement in our global beverage shipments, particularly in Brazil, as we head into their busy summer selling season. Given the current in-consumer demand trends in North America and EMEA, we will continue to run the business for cash and with an eye on reducing fixed costs and being fit for the future in the current macroeconomic environment. In our Aerospace and Aluminum Aerosol Businesses, demand for our products and technologies continues to grow. In Aerospace, our backlog and one not booked backlog both increased. And in our Global Aluminum Aerosol Business, third quarter shipments increased 10.4%. Our growing extruded aluminum business continues to serve new categories and offer reuse refill bottle innovations to a broader set of customers and occasions, emphasizing aluminum over other substrates. Very late in the quarter and as mentioned in the press release, Ball experienced a fire at its Verona, Virginia aluminum slug manufacturing facility, which is part of our extruded aluminum aerosol business. We are thankful that all plant personnel were evacuated safely during the incident and that no injuries occurred while first responders extinguish the blaze. Unfortunately, the fire damaged 95% of the plant's equipment and the structure is a complete loss. The extruded aluminum team continues to support the well-being of our colleagues and it's also working very hard to try to meet our customers' demand from our remaining global aluminum slug facilities. Insurance coverage will handle the majority of the financial impact. However, we have determined that going forward, we will be unable to operate at the current site. Employees and key stakeholders were notified of this decision yesterday evening. Consistent with our prior commentary, we remain positioned to deliver on our cash flow, deleveraging and return of value to shareholder goals. Based on our current expectations for end consumer demand trends in EMEA and North America, and other activities and items referenced on today's call, we anticipate growing comparable diluted EPS low to mid-single digits in 2023 and look forward to discussing our growth targets for 2024 on our February earnings call. We appreciate the work being done across the organization and extend our well wishes to our employees, customers, suppliers stakeholders and everyone listening today. With that, for the last time, I'll turn it over to Scott. Scott Morrison: Thanks, Dan. Third quarter 2023 comparable diluted earnings per share were $0.83 versus $0.75 in the third quarter of 2022. Third quarter sales decreased compared to the same period in 2022, primarily due to the pass-through of lower aluminum prices, lower volumes in the sale of our Russian business in the third quarter of 2022, offset by the pass-through of inflationary costs and currency translation. In the third quarter, comparable net earnings increased compared to the same period in 2022 primarily due to the contractual pass-through of inflationary costs, a lower tax rate, fixed cost savings and benefits of prior year SG&A cost-out initiatives, offsetting notably higher interest expense, the headwind from the sale of our Russian business in the third quarter of 2022 and lower volumes. To reiterate our prior earnings call commentary, we have proactively managed supply demand across our system of plants and significantly reduced raw and finished goods inventory. Including our most recent actions to close Kent, permanently ceased plans to build North Las Vegas and defer the Concord facility into 2028. North America supply-demand has tightened up significantly, and we are lowering costs across our well-capitalized plant network. As a result, we are positioned to improve returns on invested capital, deliver our customers' pack size and reclosability innovation at scale across a national footprint. And in future years, when end customer demand inflects more favorably utilize the operational efficiencies we are achieving now to serve our customers' future growth without spending significant growth capital. In EMEA, the business has successfully lapped its last quarter of Russian business sale headwinds and is on track in 2023 to fill the $86 million of comparable operating earnings hole from the business sale. The team continues to operate at a high level as they navigate varying consumer and demand conditions, particularly in the U.K. In South America, our volumes increased 14.1% in the quarter as we teed up on our prior earnings call, regional product mix and the volatility in Argentina weighed on segment earnings during the quarter. The busy fourth quarter summer selling season is underway and segment earnings are anticipated to inflect very favorably in the fourth quarter. As we sit here today, some very consistent commentary and key metrics, we ended third quarter in a very solid liquidity position with approximately $3 billion in cash and committed credit facilities. Cash on hand will be used to address the mid-November bond maturity. 2023 CapEx will be in the range of $1.2 billion, driven by cash outflows related to prior year's projects. 2024 CapEx is targeted to be much lower than and in the range of GAAP DNA levels. We anticipate generating free cash flow of approximately $750 million in 2023 and our 2023 full year effective tax rate on comparable earnings is expected to be in the range of 17% to 18%. For clarity, it's important to note that an R&D tax credit benefited our third quarter ETR, so modeling the fourth quarter ETR in the low 20% range is appropriate. Full year 2023 interest expense is expected to be a touch higher than what we said last quarter in the range of $460 million. Full year 2023 corporate undistributed costs recorded in other nonreportable will be in the range of $75 million we had previously said $80 million. And taking into account demand trends experienced so far in the fourth quarter, fourth quarter comparable operating earnings are on track to be consistent with third quarter results. We continue to expect year-end 2023 net debt to comparable EBITDA to trend in the range of 3.7 times. And following the receipt of net proceeds from the Aerospace sale, we intend to drive leverage in the range of three times. Last week, Ball declared its quarterly cash dividend. And as Dan mentioned, reducing leverage and getting back to share repurchases are top of mind. As I wrap up my comments, I want to express what a privilege it has been to be part of Ball for so long. Thank you again for all your banter on the 55 earnings calls I've shared with Dave, Ray, John and Dan over the years. I'm pretty sure you won't miss me, and it's great to be leaving the company and you with in great hands of Dan, Howard and the team. With that, I'll turn it back to you, Dan. Dan Fisher: Thanks, Scott. We continue to believe that the actions we have taken in 2023 and will continue to execute in 2024 and beyond will improve earnings, generate cash flow enable low-carbon best value innovative aluminum packaging offerings on a global scale and will expand shareholder value creation for many years to come. Thank you to everyone listening today. And with that, Frank, we're ready for questions. Operator: [Operator Instructions] Our first question comes from George Staphos with Bank of America. Please proceed. George Staphos: Thanks, hi everyone, good morning. Thanks for the details. Scott and Howard, congratulations on the next chapters and Scott, really on behalf of, frankly, all the analysts and the investors on these calls over the last number of years, I just want to thank you for all the support you've given everyone's research and trying to understand the industry and understand Ball, so thank you. Scott Morrison: Thanks, George. George Staphos: It's been a pleasure. I want to get to the capacity closures and how it might impact your prior comments on the fact that you had a couple of years of capacity, maybe I'm paraphrasing a little bit there, but I don't think too much to grow into at the time that you made those comments. So in a couple of years - or let me say it differently, do you still have a couple of years of capacity to grow into even after these closures, is the market now tighter, and so you have less than a couple of years to grow into? And if it's still the two then have any of your longer-term growth rate expectations by region change at all? And if so, any color there would be helpful. DanFisher: Yes, thanks. We have dry powder in North America, probably more so in North America, but it's not just the capacity shuttering and the capitalization. It's also the fact. And like I've mentioned this a couple of times publicly, George. But the number of folks from about 2017 to 2020, we had over 1,500 retirements within our North America labor force. So you're onboarding a bunch of new folks plus standing up new facilities, another 700 to 800 new employees and our efficiencies dipped 3%, 4%, 5% in some instances in terms of the efficiency curve between 2020 and 2021. So I've got the combination of folks getting up to speed, performing much better. You're seeing it in the results. So we're going to get productivity gains that won't require capital. And then obviously, the new facilities are all ramping up in line with our expectations, maybe a little ahead of that. The growth trajectory, then that you commented on, it's obviously slower in '23, and it will be a little slower in '24 than what we anticipated a couple of years ago. So I think the combination of those two, we feel really confident about not having to spend the capital in order to match the growth here for an extended period of time, maybe three to four years to put it in perspective. So that's how we're thinking about it, and that's how we're managing our capital outlays and allocations. There's always going to be opportunity to innovate and do some different things, but that's well within our GAAP DNA number. So we'll be able to grow. We'll be able to margin up on new innovative products, and we won't have to spend outside of DNA. And in some instances, in some periods, we might be able to spend below that for the next two to three years. George Staphos: Dan, that's great. I had two other questions and I'll turn it over. One, Brazil turned very quickly for you, and that's good news. Can you talk a bit about what was driving that? Obviously, you're laying the tracks in the second quarter and prior. But if is there anything that you could add in terms of color how much you can continue that, what kind of earnings trajectory you think you will see in the fourth quarter, you talked about it inflecting? And then the release talked to some lighter weight returnable or reusable package, I believe, in the Aluminum Aerosol side, where you're using the technology there. Can you give us a bit more color on that, how you might use that within beverage and how it may affect your trajectory down the road? Thank you, and good luck on the quarter. DanFisher: Thanks, George. Yes, so very much in line with what our previous commentary was in Brazil. Our major strategic partner certainly had a hedge position that was unhelpful in terms of the aluminum cost of their products in the marketplace, that rolled off. And that economy is just getting better. Interest rates are coming off, growth is better. They continue to uptick the GDP projections in that area. The inflationary pressures are coming off. We also saw a couple of percentage points of substrate shipped out of returnable glass into aluminum. So all of those things that we forecast have happened. I mean the good news is it's happening. So there's stability in that marketplace, which is inconsistent with what's happening, for instance, in Argentina, but Brazil is in a good spot. And we we're turning on at least one additional line to try to keep pace with demand in the fourth quarter, and that will extend, we believe, into the first quarter. So we're feeling good about basically every place in South America with the exception of what we - and what everybody understands what's going on in Argentina, we're feeling much better. So I would imagine that will continue. We will see a step-up in earnings, significant step-up in earnings is what we had in Q3. So that will be in line again with that second half hockey stick, which we've had a number of questions on that throughout the year, and it's playing out with the exception of Argentina right in line with what we thought at the beginning of the year. And then the reuse refill, I think the commentary in and around this, it's small, it's small volumes. These are bottles, they're refillable bottles, so think personal care space and think water. So there is an element here where we can do some things within the beverage platform to offer reuse, refill opportunities with our aerosol product line. And because of the weight and the construction and the rigidity of that package, it's just - it plays better in a reuse environment than the coil can design characteristics. So yes, we're bullish about that. Obviously, a lot of reuse conversations happen in Europe, and we want to make sure that we've got product offerings, and we're in the conversation because it's all white space for us. So certainly a nice opportunity step, but still off a very small base. George Staphos: Dan, yes, no, could it help your single-use in water and other beverages down the road? Thank you, I'm sorry for the triple dip there. DanFisher: No, thank you. Absolutely. So I think once you get the conversion, to the smaller sizes, and you're seeing it play out in Mountain towns and the anti-plastic sentiment on the beaches. You could step into the smaller product offerings with the reuse refill. You get the end consumer that understands the water tastes really good and the product is really good, and it's good for the environment. So I think there is a bridge here. But as I indicated, we're in the emphasis of this transition. George Staphos: Thank you, very much. DanFisher: Yep. Operator: Our next question comes from Mike Leithead with Barclays. Please proceed. Mike Leithead: Great, thank you. Good morning, Scott going forward and Howard, I look forward to working with you going forward. First question I wanted to ask, your North American, South American volumes were obviously much different than your two public competitors. And I appreciate looking at just one quarter isn't perfect. There's differences of customer and product category. But just in both regions, can you help us better understand if it's all really attributable to product and customer mix? Or are there underlying market share shifts with customers going on in each region? DanFisher: Yes, thank you for that. Let's start with South America. South America is actually a much easier market. There is - if you're looking at it quarter-to-quarter, you're going to see swings and it is 100% a result of who's partnered with who. Big volumes from very few players and in the case of us, our strategic Partner One in the marketplace in Q3. So we have a big position with them. They won in the market, our volumes look better. In North America, it's less about share shift in terms of contract movement, and it's more our exposure to mass beer. I mean, that's it in a nutshell. And we had a very strong Q3 last year whereas some of our competitors had a very weak Q3. Destocking, inventory movement started about the third quarter last year and some of us have had impacts from that point until now. And when you look at year-over-year comps, it can be a bit noisy. All of that is, I think, normalizing. So as you're moving forward in Q4 and beyond, what you're going to see, I think, across the industry, writ large, is customer mix and in alignment with scanner data. I think it will be a much more transparent way to look at the marketplace and volumes for that matter. Mike Leithead: Great. That was super helpful. And then just on the Aerospace sale, I know you touched on it briefly. Could you just update us where the regulatory approvals currently stand? And just maybe what your latest assumption is on when you think that deal should close? DanFisher: Yes, I can't give too much detail, but I would characterize it as constructive where we're at with our discussions. And we signaled first half '24 closure. We still believe that is well within executing boundaries. We referenced that number based on the most recent transaction that we took about seven to eight months. So we're hopeful that we don't have as much overlap as that deal did and it will be a more efficient process. But I think the guidance of first half '24 is the appropriate one at this stage. Mike Leithead: Great, thank you. DanFisher: Thank you. Operator: Our next question comes from Ghansham Panjabi with Baird. Please proceed. Ghansham Panjabi: Yes, good morning. Scott Morrison: Good morning. Ghansham Panjabi: I just want to echo my congrats to you, Scott, and Howard as well. Best wishes to you both for the future. Scott Morrison: Thanks. Ghansham Panjabi: Yes, thanks Scott. Dan, going back to what we witnessed over the last couple of years, right? So quite a bit has been done in terms of permanent capacity reduction at your end in North America between last year and this year. And I'm just trying to reconcile, is that a function of just a lot's been done. Capacity has been - your footprint has been modernized to some extent. The market has recalled for different reasons and so on and so forth. And are you just anticipating that the market sort of resets for a while before we start the reacceleration and to sort of support that reacceleration, you'll be doing a lot in between with productivity to match up against that to support that growth eventually. Is that the right way to think about it? DanFisher: We'll absolutely - there'll be a more stable operating environment from a volume perspective. So maybe I'll give you a little bit of color and a little bit more color on how we're thinking about it. So - and we signaled this, as you know, Ghansham, we're like, listen, there's not going to be any different pricing behavior until we get to Q4 because there's great tailwinds from our customers on inflection, on earnings and top line revenue. It gets tougher now in Q4 for everybody. And then you also saw private label begin to take share. Those are the things we needed to see to construct a different pricing behavior. And so, I think we're going to return to prior to COVID in terms of methodical pricing in and around CPI for our customers. In that environment, we're going to make more money and flow more cash. So then the other question is, tell me about top line. So top line for me is 100% about the depth with which the promotions are going to happen against a weaker end consumer. And so that is something that is a question mark in terms of what the actual volume increases are. But what's not a question is exactly to your point, we're going to run our business better, more productive, focus on operational excellence, be more agile, take the working capital out, flow more cash and buy back shares. That's what we're going to be doing until you see a little bit more of an inflection in top line. And then we'll be then we'll be levering up really, really nicely off this more efficient cost structure that we've got in place. Ghansham Panjabi: Okay. And then for my second question, just in terms of Europe, I think this was the first negative volume quarter since the second quarter of 2020, if I looked at the model correctly. DanFisher: Correct. Ghansham Panjabi: Yes, what's happening, I think you called out the U.K. maybe just jog us through the different subregions of Europe. DanFisher: Yes, we actually won in the market even on those lower volumes. Can continues to win even on the lower volumes. There was a bit in the quarter on cooler, rainier across Central Europe and the U.K. in particular. But this is a function of a weaker end consumer fundamentally. And we'll be living with that here into the first half of '24. We still see growth, but the combination of all those impacts, I think we’re it large across Europe. Energy costs are higher that's embedded in our P&L and our competitors' P&L. So weaker in consumer here for a period of time is the main driver for volumes coming off a bit. Ghansham Panjabi: Okay, thanks so much. Operator: Our next question comes from Arun Viswanathan with RBC Capital Markets. Please proceed. Arun Viswanathan: Okay, thanks for taking my questions. I guess my first question is just on the footprint. And would you think that after all of these industry moves, including your own, I think you've noted that the industry will continue to grow at a low rate. Would you think that at some point, just given the low barriers to entry that there could be some new entrants as well and potentially some further capacity additions, I mean, we are seeing some strength in ready-to-drink in some other categories? Or is it still absorbing capacity, I guess? DanFisher: Yes, I don't foresee new entrants three or four of them that have entered are not having any fun right now, and I don't know that they will candidly be around much longer. So, it will be a handful of players that absorb the growth moving forward and we'll be one of them. The volume that's reflected currently is not necessarily the volume that's being won and will show up here over the next couple of years. So we feel really good about the footprint we have today, how we'll be able to optimize that and how we'll be able to make more money off of that footprint moving forward. I would also challenge the low barrier of entry, canned plants cost about $300 million to spend. And when interest rates are in the 6s and 7s, it's not a fertile ground for folks jumping in. Arun Viswanathan: Sure, and then - thanks for that. And then I guess just - I also wanted to just get your thoughts on post the Aerospace sale I think that the plan was to use the proceeds for deleveraging as well as for buybacks. Is that still the plan? Would you be considering metals investments as well to secure more aluminum can sheet? Or how are you thinking about the proceeds used at this point? Thanks. Scott Morrison: No, I think - this is Scott. I think largely still in line. We'll use about half the after-tax proceeds to pay down debt and get our leverage back in the range of three times and then the other half to buy back shares. And then the cash we flow next year, a lot of that will be able to go to buy back shares. In terms of investment, I think the supply chain is making pretty good investments. So we always are looking at things opportunistically if we can create a competitive advantage. But I don't see a lot of need for big investments from that standpoint. Arun Viswanathan: Great, thanks a lot and Scott thanks for all your help over the years. Scott Morrison: Thank you. Operator: Our next question comes from Mike Roxland with Truist Securities. Please proceed. Mike Roxland: Thank you, Dan, Howard, Scott for taking my questions. Scott congrats on your well-deserved retirement and Howard welcome to the Ball team. Howard Yu: Thanks. Thank you. Mike Roxland: Dan, you mentioned Ball and the broader industry really having excess capacity in North America, and you really kind of highlighted the mass beer issue troubling the company. If next year, let's call it out, your Bud Light remains weak. Can you help us think about how the company will compensate for a potential permanent volume loss? And could some of that be offset by the recent deal that Bud Light entered into with UFC? DanFisher: That's a great comment. I'm not a big UFC fan. So I don't know if those are huge, Bud Light drinkers or not, if that's a white space, but in all seriousness. It's going to take a period of time the beer on shelf in retailers in C-stores, we will - it will be there. And so, folks like Constellation, they continue to grow, they continue to add capacity, and they're a big partner of us. We're partners with all the major brewers. And so, as they step into taking share and taking volume, it will be somewhat of a natural offset. Obviously, the fastest return for volume for Ball is that Bud Light or Budweiser figures out, something to put on the shelves at selves in place of that. We are - there's a minor reset that happens in the fall with retailers. So we're seeing some uplift in terms of a favorable mix with some of the other brewers, but it's not going to substantiate until the first half of next year when there's bigger resets. So that will be indicative of how folks within the - in the industry and the space are going to play that. I do think the amount of money being spent by Budweiser on Bud Light, they've said it publicly. They're spending a lot more. I think four times is the number in terms of reestablishing that brand and yet to be determined, but over 12 to 18 months, I think the beer space, ready-to-drink cocktails, all of these will start to find their way on to those shelves and we'll benefit from that, we'll benefit from that disproportionately as we have been adversely impacted by the Bud Light. So I think our recovery is going to look good. It will start in the second quarter of next year, second, third and fourth quarter will become easier comps for us. The first quarter will be challenged because of Bud Light, in particular, did well. Budweiser did well in the first quarter. But I don't think we're going to have to make any further network changes. I think we're in a really good spot. We're managing that and we've got dry powder for what we believe will be a resurgent top line here over the course of the next two to three years. So that's probably more than you wanted, but I know it's a big topic, and it's certainly a big topic for Ball. Mike Roxland: No, that's great color. I really appreciate it. And then just one - my follow-up question. Can you just remind us of some of the drivers that you have your disposal to offset the earnings dilution from the Aerospace sale when it occurs in the first half of next year? DanFisher: The biggest one is going to be reduction in interest expense. Scott Morrison: We should say, with a couple of billion dollars plus debt reduction, we'll save over $100 million of interest costs next year. Buying back the shares. Obviously, if you're going to buy back a couple of billion dollars’ worth of shares, that takes a little bit of time. So you don't get the benefit of that, you'll get it over a period of time. I would say those are the kind of the first things that will - you'll see the difference. DanFisher: Yes, interest expense and improved operating earnings out of our core business, we'll give you more detail. I mean, we're certainly going to be shooting for offsetting that as soon as we can in terms of the run rate. So you'll have a far better cash-generative business on the sales output. We'll be spending a lot less capital. So it should - and then we'll be buying back a lot of stock and so the combination of those are - should be great return of value to our shareholders moving forward. Scott Morrison: And the last several years, all the free cash flow that we generate usually really comes out of the beverage business, not the Aerospace business. So it doesn't change our cash flow profile very much. Mike Roxland: Got it. Thanks very much, and good luck in 4Q. DanFisher: Thank you, Mike. Operator: Our next question comes from Phil Ng with Jefferies. Please proceed. Phil Ng: Hi, guys. Well, Scott wanted to echo the same sentiment. Thanks for all the help over the years. And Howard, welcome, looking forward to working with you. Howard Yu: Thanks, thank you. Phil Ng: My first question is around the camp facility that's coming out. How much capacity does that come out? And where does that bring you from an operating rate standpoint in North America at this point? You guys have obviously taken some actions outside of Kent capacity and fixed cost out of things. Any color on how much cost savings we should expect to see that's incremental going to 2024? DanFisher: Yes. So with the Kent facility, that was a leased facility. Maybe I'll give you a little bit about that facility. It's a leased facility. We acquired this, as you know, as part of the Rexam acquisition. It was started in 1971. We've got 126 folks there, two lines, 12-ounce standard and this will cease operation in the first half of '24. Typically, a facility of this size is in the $20 million, $30 million savings range. We'll offset some of that savings with a little bit of additional freight. So yes, somewhere in that neighborhood of $20 million next year, $20 million to $30 million. I guess how you should be thinking about it for a half year of that, I've given you an annualized number. Phil Ng: Okay. And based on some of the cost savings and the buybacks and reduced interest expense, can you guys get back to 10% to 15% EPS growth next year? DanFisher: That's a great question. The timing of the close will matter and how fast we buy back shares will matter. But I - as we sit here today, that is certainly our goal is not just to get back in that range but to exceed that. Phil Ng: Okay. And just one last one for me, a cleanup question. The slugs facility that is down. How is that going to impact your EBITDA in 2024? I know there's some offset from an insurance standpoint. Do you plan on rebuilding that facility to help us think through out some of the moving pieces? DanFisher: Right now, we have enough supply to manage. So from an EBITDA standpoint, we'll be in good shape. We are thinking about what we do with that footprint because this is something, Phil, where you can send this product over very long distances. So not to go down a rabbit hole there, but we're going to evaluate that and the insurance proceeds will be more than enough to potentially recapitalize that facility. We just need to figure out what's the best place to do that and serve our customers. Phil Ng: Thank you. DanFisher: You bet. Operator: Our next question comes from [Jeff Sikoskus] with JPMorgan. Please proceed. Unidentified Analyst: Thanks very much. I think you have $1 billion coming due in the fourth quarter and maybe $790 of low-cost debt in the first quarter of '24. How do you plan to approach that? Scott Morrison: Yes. We've got $1 billion coming due in a couple of weeks. Well, we did a bond deal back in May, that have turned out to be a very opportune time. So we have a lot of cash on our balance sheet, and we'll use the proceeds from that bond offering and cash on the balance sheet to take care of the one in November here in a couple of weeks. And then the one in March, right, that's a very low cost. So we will pay that off on the last day that we possibly can from cash that we'll generate here in the fourth quarter and then maybe a little bit of revolver to retire that. And then once we close on the aerospace transaction, we'll pay down debt to the tune of $2 billion plus, and we'll determine at the time which pieces of debt we retire at that point. So I think we're in a really good place from a maturity standpoint and being able to deal with any upcoming maturities. Then we've got $3 billion of cash and committed credit to. Unidentified Analyst: Thank you for that. When you sell the Aerospace business, does it perfectly carve out? Or are there stranded costs that are left over or opportunities to reduce overhead? DanFisher: Almost perfectly carved out, we will absolutely take a look at the Ball business structure, op model, all of those things moving forward and make sure that we're efficient and fit for purpose for the markets we're going to participate and how we win in the marketplace with our customers. So but it's minimal in terms of the overhang. It's really a business that whether it's the IT, the firewalls, the construction, I think we've got overlap of an HR system in a little bit on the financial at the corporate level. So very little overhang. Unidentified Analyst: It's like $10 million or $20 million? DanFisher: I haven't seen the most recent number, you're probably not that far off. It's insignificant debt. Okay, great, thank you. Operator: Our next question comes from Gabe Hajde with Wells Fargo Securities. Please proceed. Gabe Hajde: Good morning, everyone, at the Ball and I'll echo other analysts have said to Scott and Howard, respectively. You said a lot, Dan, in terms of expectations for top line, specifically volumes, and there's a lot of things that can impact that when we're talking about weather, whether we're talking about promotions and Bud Light, et cetera. But you made a specific comment that you would expect volumes to kind of track below. I think what you've communicated in the past of what you'd expect, specifically North America to track. So call it, I think you guys have said 2% to 4%. So I'm curious if that's an industry comment or a Ball comment, and that's sort of based on what, meaning contracts and things that you have in your hand. And then secondarily, I guess, similar volume question, but in Europe, is this based on your customer interactions and obviously, kind of maybe expectation for the consumer to continue to be pressured that you're a little bit more negative on volume in the short term here, i.e., the next six months? And then South America, again, relative to our modeling was a little bit short. When I look at profitability versus history, it's a little bit below. But I don't know if that's a competitive issue. I know you called out some regional and customer mix. I also know ends are a little bit more profitable down there depending on when they're sold. I know there's a lot in there on pack, but just for clarity, sort of what bulk specifically is expecting in those three arenas? DanFisher: Okay. Let's start with South America. So South America we were down slightly versus our expectations because of Argentina, it's Argentina. That's what it is. So, I wouldn't read much more into it. The volumes were in line in Brazil, maybe a little better. Our earnings were in line, maybe a little better in Brazil, but it's just the deterioration of Argentina and some unique taxes also that the government put in place. So we're going to be dealing with a little bit of volatility there for a period of time. But like I said, we'll have a significant inflection in Q4. South America is in a much better shape, obviously, than it was even at the beginning of the year. So we're very constructive on South America with the exception of the carve out of Argentina. In Europe, the volumes are going to be a little bit softer. I'd say the biggest difference between what we called out at the end of the second quarter what we're calling out today is like a weaker Europe, and I think you're hearing that from all of our competitors as well. It's a bit softer in consumer. I'm not overly concerned. It doesn't take much for growth. That market has grown for 20-plus years consistently, and it will return to growth, but the end consumer is a little weaker right now. And I do think the periodic shift six months is your characterization. I don't think you're far off there. And then in North America, I do believe, just to parse out my comments. We're not growing at 2% to 4% in the industry. It's 0% to 2% in that range right now. And it's because, obviously, the pricing behavior that we experienced in the last 18 months and a significantly weaker in consumer, which everyone is commenting on. So, I do believe there's a return to the 2% to 4% growth. But whether it happens in 2024 or the second half of '24 or in '25, I'm just being completely honest, is like what - where the end consumer is right now and what the pricing behaviors with our customers, we'll be the instrument, which it inflects up or down. Good news is, like I've said, we're running for the lower end of that range, both from an industry and from a Ball specific perspective, and we'll make more money and we'll flow more cash. But until that end consumer gains a little strength returning to the growth levels that I indicated a year or 18 months ago. I don't see that in the near term. Gabe Hajde: Appreciate - all the color, Dan really. On the cash flow side, if I did the math right, and I think, Scott, you were talking about, I want to say, directionally, a $300 million working capital inflow this year. I wanted to confirm that, see if anything has changed there? And then when we start thinking about next year, and you guys have talked a lot about basically $4 billion of proceeds earmarked, I think there's directionally $800 million to $1 billion of AR factoring out there. I don't know if you guys would think about transitioning that to more permanent financing or using part of the proceeds to pay that down as well, because again, giving you guys credit for cash flow next year, I'm coming up with a different leverage number than sort of three. Just curious. Scott Morrison: Yes, you're directionally right on the working capital number. And actually, one of the things that Howard and I and our team has talked about is unwinding some of that factoring. So that could be part of the whole use of proceeds. The end of the day, leverage is leverage, whether it's on balance sheet or off balance sheet. So we may take an opportunity to do some of that. DanFisher: Yes. I will echo those comments. That is one thing that we're rolling around. And I do think it's time to start retiring some of these programs. And we've got a couple that are more expensive than we'd like. And I think we've got a targeted list that we'll go after. And the return of proceeds as we indicated back when we made our public comments, there's still $400 million, $500 million that we said we'd hold on to on the balance sheet, that would be used for things exactly like you've indicated. Gabe Hajde: Okay, thank you. I apologize for George here. The early crystal ball... DanFisher: Never apologize for wanting to ask questions about can exciting business. Gabe Hajde: Just real quick. The crystal ball on working capital then for next year, it kind of things play out that we would expect? Scott Morrison: I think it's way too early to talk about that. I mean you can get - it's going to look wonky because we're going to get all these proceeds from the sale of the transaction and the tax payments on those proceeds is going to flow through operating cash flow. So we'll have to break out and explain exactly what we're doing but at the end of the day, I think you'll get a clear picture of what our balance sheet is going to look like and what the P&L is going to look like going forward, once we get to completion of the Aerospace transaction, and what the business looks like going forward. So the cash flow will look lumpy next year because for one reason is because of that. DanFisher: So there's the cash flow comment, which I totally agree with Scott, and we're getting to our balance sheet, it's going to be in great shape at the end of the year. In terms of the working capital, so if you're looking at DSO, DPO, ITO, that's how we run our day-to-day, our average working capital level will be significantly less next year than our average this year because of all the great work the teams have done to get our balance sheet in order. And that's how I get paid at the end of the day. So that's how EVA works. So yes, I don't know endpoints if we'll be able to improve much. I think the focus will be to it's always to get better, whether it's spare parts, inventory or finished good or coil stock or on and on and on. But the average will be better, significantly better year-over-year. Gabe Hajde: Thank you, Dan. DanFisher: Thank you. Operator: Our next question comes from Adam Samuelson with Goldman Sachs. Please proceed. Adam Samuelson: Yes, thank you. Good morning, everyone. DanFisher: Morning. Adam Samuelson: Morning. There's been a lot of ground covered. Maybe just as we think about especially North America and Europe, a lot of discussion on beer. Is there any more distinction by customer category you would make in terms of actual pockets of strength versus areas where you've been surprised at where demand has surprised the downside apart from just the regional point on Europe, specifically and mass beer, obviously, in the U.S.? DanFisher: Yes, I think Europe is a little easier. It's just a weaker in consumer right now across the board. Literally everything is down to varying degrees. If I give you a little bit more detail into the U.S. market, I commented on this earlier on the call, and we anticipated this heading into the third quarter. So we saw private label actually grow in the CSD category to the tune of about 3% in the third quarter. It's not a surprise, but it has happened. So I think that - and they have taken share against a couple of the bigger players. So that was an important distinction, I think, within the quarter. You're ready to drink cocktails are still growing at nearly 50%. So it's a staggering growth trajectory there. Hard sell-throughs are still declining off of a really good high here a couple of years ago. Import beer grew, which is - you can see us filling the hole a bit from Bud Light domestic beer down in that kind of 4.5%, 5%, which is largely in line with what we expected. Q4 is where you would hope to see a bit of an inflection and some movement and I think that's still a wait and see relative to the really big customer in the North America marketplace. But nothing really surprised us. I think the things that have momentum continue to have momentum with the exception of a trade down, really that happened in the CSD area from the premium brands down into private label. Adam Samuelson: Okay. No, that's very helpful. And then as you - in the other nonreportable business, you talked about the growth in aerosol, obviously, there's the main issue with the manufacturing plant in Virginia. I'm not sure I heard anything about kind of where things stand with the cups business and the march of that business towards profitability and kind of how close you're maybe getting to some bigger customers that could fill up that capacity. DanFisher: We are still having conversations with regard to cups. You need the big inflection point to come out of food service. We're bullish on the conversations, but a couple of those transactions and wins need to happen for us to really inflect toward breakeven, we're doing better this year than last. We'll do better next year. I need for one or two significant wins for us to get back to breakeven. But it's not that far away. But until you execute that trade, it's not in the near term. Adam Samuelson: Okay. All right. That's very helpful color. I'll pass it on. Thanks. Operator: Mr. Fisher, there are no further questions at this time. Dan Fisher: Great. All right. We'll let this - thank you, Frank. We look forward to talking to you at year-end. Hope everybody has a healthy and safe holiday season. We're certainly thankful and appreciative for everything that Scott has done for the company. I look forward to introducing more of you to Howard here in the near future. So enjoy the holidays, and hopefully, we'll see most of you here in the next couple of months. Be well. Operator: That does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your line. Have a great day, everyone.

Operator: Greetings. And welcome to the Ball Corporation 2Q 2023 Earnings Call. During the presentation, all participants will be in a listen-only mode. Afterward we will conduct a question-and-answer session. [Operator Instructions]. As a reminder, this conference is being recorded, Thursday, August 3, 2023. I would now like to turn the conference over to Dan Fisher, Chairman and CEO. Please go ahead. Dan Fisher: Thank you, Malika. Good morning, everyone. This is Ball Corporation’s conference call regarding the company’s second quarter 2023 results. The information provided during this call will contain forward-looking statements. Actual results or outcomes may differ materially from those that may be expressed or implied. Some factors that could cause the results or outcomes to differ are in the company’s latest 10-K and in other company SEC filings, as well as company news releases. If you do not already have our earnings release, it is available on our website at ball.com. Information regarding the use of non-GAAP financial measures may also be found in the Notes section of today’s earnings release. Historical financial results for the divested Russia operations will continue to be reflected in the Beverage Packaging EMEA segment. See Note 1, Business Segment Information, for additional information about the sale agreement and a quarterly breakout of Russia’s historical sales and comparable operating earnings. In addition, the release also includes a summary of non-comparable items, as well as a reconciliation of comparable operating earnings and diluted earnings per share calculations. Late in the quarter, the company also announced that is considering options for its aerospace business. There are limitations regarding the depth of commentary we will provide on that topic today. If and or when additional comments are necessary, they will be made via a separate public press release. Joining me on the call today is Scott Morrison, our Executive Vice President and CFO. I'll provide some brief introductory remarks. Scott will discuss key financial metrics and then we will finish up with closing comments. Our outlook for the remainder of 2023 and Q&A. Let me begin by thanking our employees for working safely and with the utmost level of agility while fulfilling our customers' needs. On our first quarter call, we said that our second quarter would be choppy and that was the case. Our team delivered solid second quarter results amid tough year-over-year comparisons, including $47 million of higher interest expense, the $40 million of operating earnings headwind from the Russian sale and global beverage volumes down 11% driven by the Russian sale impact and a notable domestic beer brand experiencing demand disruption in North America. I'm proud to say that our team did an excellent job of managing both costs and working capital levels to deliver the quarter and position the business for a stronger second half. Looking forward, we will continue to benefit from notable inflation recovery, cost-out actions, and improved operational efficiencies. Our inventory levels are in good shape with plans to improve further. Our North America team is managing in real-time the balance of the U.S. mass beer brand [Indiscernible] and our improved demand forecast of other customers which should unlock additional opportunities during the second half. Cash flow is kicking in and we are studying opportunities to accelerate deleveraging and the multi-year return of value to shareholders, while also developing additional innovative packaging solutions to grow the business going forward. Around the globe, beverage cans continue to win relative to other substrates and we continue to leverage the contributions of our two new facilities in India, our customer mix, scale, plant footprint, innovation, and capable teams across the organization to ensure the best outcomes for all our stakeholders. In our aerospace and aluminum aerosol businesses, operational performance and demand for our products continue to grow. In aerospace, our one-not-book backlog increased one billion and the unique technologies we provide to support environmental and national security needs remains in high demand. And in our global aluminum aerosol business, we continue to serve new categories and offer reuse, refill bottle innovations to a broader set of customers and occasions. As we look ahead, all of our businesses will continue to unlock additional value for Ball stakeholders in 2023 and beyond. Consistent with our prior commentary, in 2023, we remain positioned to deliver approximately $750 million of free cash flow to deleverage and return value to shareholders, and in 2023, we anticipate the potential of achieving the low end of our long-term goal of 10% to 15% comparable diluted earnings for share growth, including the Russian business sale headwind and exceeding that long-term comparable diluted EPS growth goal, excluding the Russian sale headwind. During the Q&A, Scott and I will strive to provide additional clarity on the external environment and cadence for the remainder of 2023 based on what we know today. Our global beverage teams continue to position our businesses to deliver the year and have an eye on the future. For the full year and incorporating year-to-date trends, our customer mix and excluding Russia, we now estimate flat global volume growth for Ball, with North America being down low single digits, South America volume up mid-single digits, and EMEA volume up mid-single digits. We appreciate the work being done across the organization and extend our well wishes to our employees, customers, suppliers, stakeholders, and everyone listening today. With that, I'll turn it over to Scott. Scott Morrison: Thanks, Dan. Second quarter of 2023 comparable diluted earnings per share were $0.61 versus $0.82 in the second quarter of 2022. Second quarter sales decreased compared to the same period in 2022, primarily due to the sale of our Russian business in the third quarter of 2022, lower volumes, currency translation, and the pass-through of lower aluminum prices, partially offset by the pass-through of inflationary costs. In the second quarter, net comparable earnings decreased compared to the same period in 2022, primarily due to higher interest expense, the headwind from the sale of our Russian business in the third quarter of 2022, and lower volumes, as well as higher corporate costs, partially offset by the contractual pass-through of inflationary costs, fixed cost savings, lower depreciation expense, and SG&A cost out initiatives. To reiterate our prior earnings call commentary, we have been and will continue to proactively manage regional supply demand balance across our system of plants in the near term. Starting in the third quarter, segment earnings in North America will accelerate through the majority of the anticipated contractual inflation recovery, having kicked in July 1. In EMEA, the business will lap its last Russian earnings headwind in the third quarter, and then accelerate to an improved level of earnings in the fourth quarter as they move beyond this multi-quarter headwind and the start of costs for the two new plants. In South America, customer and product mix, which has unfavorably influenced the seasonally slower second quarter, will reverse and consistent with our prior commentary, we anticipate a more robust second half in Brazil as customer hedges roll off and the fourth quarter summer selling season kicks in. As we sit here today, some very consistent commentary and key metrics. We ended the second quarter in a very solid liquidity position with approximately $2.65 billion in cash and committed credit facilities. 2023 CapEx will be in the range of $1.2 billion, driven by cash outflows related to prior year's projects. 2024 CapEx is targeted to be in the range of GAAP D&A levels. We are targeting free cash flow of approximately $750 million in 2023 and focusing on deleveraging. Our 2023 full year effective tax rate on comparable earnings is expected to be in the range of 19%. Full year 2023 interest expense is expected to be in the range of $450 million. We anticipate full year corporate undistributed costs recorded and other non-reportable to be in the range of $80 million. Including the $86 million Russian business sale operating earnings headwind, comparable operating earnings should increase nearly $200 million. And full year 2023 comparable D&A will likely be in the range of $550 million. As we look forward to incorporating near-term demand trends, year end 2023 net debt to comparable EBITDA is expected to trend in the range of 3.7 times. And in future years, we will drive that lower. Last week, Ball declared its quarterly cash dividend. And as Dan mentioned, reducing leverage is our key focus prior to resuming share repurchases. As fellow owners, we continue to manage business through the lens of EVA and cash stewardship and we will effectively manage our supply chain and customers in this current environment to secure the best cash earnings and EVA outcome for our shareholders. With that, turn it back to you, Dan. Dan Fisher: Thanks, Scott. We continue to believe that given the economic environment and global dynamics impacting our world, it is a great time for investors to get up to speed on Ball. Our improved results following the challenging 2022 is progressing. Our products and technologies are resilient and provide solutions for our customers. Our focus remains on delivering earnings, free cash flow and high quality products to our customers and consumers. And as leverage continues to come down and free cash flow expands, our return of value to shareholders will grow in 2024 and beyond. Thank you to everyone listening today. And with that, Malika, we are ready for questions. Operator: Thank you. [Operator Instructions] Our first phone question is from the line of George Staphos with Bank of America. Please go ahead. Your line is open now. George Staphos: Hi, thank you. Hi, everyone. Good morning. Thanks for the details, and congratulations on the performance. I guess, the first question I had, can you talk -- I haven't tried to reverse engineer the full-year volume guidance relative to the year-to-date, but what kind of volume trends are you seeing early in the third quarter across the region? And are there any regions left with any notable filled product that needs to be destock? How would you -- have you think about that, guys? Dan Fisher: Yes, thank you. In the mass beer space, I think you'd have to look at that on a net basis. Clearly, there's one customer that's got more filled goods right now than the others, and I think they've commented on that. There is a little bit within our portfolio in terms of the energy space where we're working through some inventory. Our largest energy customer in our space in North America is growing at a slower rate than the balance of that space. And so, the scanner data is reflecting more growth than our shipment sales. That normalizes, we believe in Q4 based on the projections that we have. Nothing notable. We're in a really good inventory spot, George. You can see that reflected in our cash generation in Q2. You always have, this is the softer period for South America, so there's nothing really of news there. We expect to start building inventory here in the quarter to execute against the back half of the quarter and then peak season for that part of the world. So absent the obvious mass beer player, not as much. George Staphos: Okay. And actually, what I was getting at to some degree was what you were seeing in South America. So in South America, you -- from your vantage point, not a big amount of de-stocking, if anything, that needs to get done at the customer level. That would be fair? Dan Fisher: No, we've been running. George Staphos: Other than you large -- I'm sorry, go ahead. Dan Fisher: Yes, that's correct. There's nothing meaningful in South America. You always run to get, you're always doing maintenance and there's always a level of curtailment in Q2. And so, there's just not a lot of room to run additionally to build inventory, because you're already planning that you're going to be running full out in Q3. The inventory builds, if you have that effect, typically it shows up at the end of our fiscal year down in South America. If things aren't selling through in Q4, you usually have a bit more inventory heading into Q1. So we're in a really good position inventory-wise. That was something that we commented heading into the quarter. The teams and the plants managed that tremendously, even with the mass beer inflection that showed up in the quarter and persisted throughout the quarter. George Staphos: Okay, Dan, thanks for that. I want to sort of come back to part of the question as I asked it and ask you to follow and then I'll step down just to be fair to everybody else. So what trends are you seeing early in the quarter volume-wise across the regions if you can talk about, put a number on that if that's possible? And then from our research and contacts, we've seen an uptick in promotional activity. We haven't necessarily seen a pickup in consumption yet. How would you have us think about the efficiency and the yield on promotion and the level of promotion that you're seeing into 3Q? And are we beginning to see some finally, some uptick in beer just based on what we're seeing out of the scanners and why, if that's the case, would you be confident about that continuing the rest of the year? Thank you. Dan Fisher: Yes, that's a good question. Let me see if I can parse out the elements of that. Let's look at North America. There's nothing really to report in terms of inflection one way or another in South America because it's still winter there. We wouldn't see that behavior until the second half of Q3. So nothing to report other than the conversations that we're having with our customers. Again, I'll be down there next week. They're planning to deliver against what we've modeled in right now, which is a pretty nice inflection of volume heading into Q4 Brazil. We've comment on this previously. Bullish on the Brazil -- Brazil was the first to go into a recession and experience inflation and higher interest rates. They're starting to relieve some of that. So the combination of that, plus previously disclosed comments in and around hedge positions, all of that is playing out as we would hope. The only thing in South America obviously is the question mark in and around Argentina, but Brazil is stronger and we still believe that what we've contemplated for the back half of the year is going to manifest. In North America, both Scott and I have been very public with our comments on what we were seeing throughout the second quarter relative to the mass beer dynamic. And they have been confirmed by our customers. One is our beer customers are always running full out in the second quarter and even most of the third quarter. So if there's a mixed shift that's taking place, it's going to come from working capital or filled goods. So the scanner data won't be necessarily a one-to-one reflection of what we're experiencing. We believe that there will be resets at retailers. Some of the customers that have opportunities to step into elevated positions or more velocity on shelves or a bigger shelf space on shelves, they're gearing up for that. You won't really see that until the fourth quarter is how we're contemplating in our numbers. And in terms of promotion, I think the way you characterized, it is correct. There has been promotion that keep in mind. The promotions coming off in many instances, staggering price increases over the last two years. So, it's not about promotion, as much as that is the intentionality of volume momentum. What we've seen in the CSD category is we have seen private label gain share. And that is something new relative to what we've seen the last couple years. That is generally a catalyst to drive for more volume and volume momentum. And we've always thought that given Q4 comps for certain of our customers, they will be more inclined to push volume. In the fourth quarter, conversations with those customers would signal that they're thinking about it similarly. But until it happens and until they find the right price elasticity and volume momentum trigger, I think they're doing a lot of activity. I see the same data. It's not having the intended results of driving volume. I think it means that they will need to be more aggressive, and I know that they don't like to be losing share to private label. So that's a lot there, but that's how we're viewing it, and that's how we've modeled it. We don't expect to see a great deal of uplift in Q3 versus previous, from a sequential standpoint, Q2, with the exception of we believe, mass beer within our portfolio will continue to be negative. Europe continues to grow. Slight growth in Q2. We had a very good second quarter last year. I'm commenting, excluding Russia. We will continue to grow as our plant system ramps up. The new capacity was needed for us to really step into growth in the mid-single digits, but everything is still in line and alignment with us delivering against that over the back half of the year. George Staphos: Thank you, Dan. Dan Fisher: Thank you. Operator: Thank you. Our next question is from the line of Anthony Pettinari with Citi. Please go ahead. Your line is now open. Bryan Burgmeier: Hi, this is actually Bryan Burgmeier on for Anthony. Thanks for your question. Dan, Scott, you've been asked about the possibility of selling or spinning aerospace for many, many years. So, why now for the strategic review? Did something change for Ball for the aerospace business? Is it about capital allocation or returns? Just any detail you can add there and maybe why this is happening now? Dan Fisher: Yes, why now is, if you look back five years ago versus today, the business is much bigger, much healthier, much more profitable, and it could fundamentally stand on its own. Those are the key cruxes for why you could potentially do something else with this business. It's really a manifestation of that business has performed tremendously and gotten to a point where it's an incredibly valuable asset. We believe that was the case. And so, we ran a process to validate that. Early indications are it is a valuable business. If and when I've got more to talk about, I'll let you know. It's really nothing about capital allocation and return threshold. It is just that it's a valuable asset. It's increasingly so. And we always need to look at our shareholder value equation and make sure that that asset is sitting in the right spot for the long-term generation. Bryan Burgmeier: Understood. Thank you. One quick follow-up here is, Dan, during the quarter, I think you talked about kind of retail points and the supply chain being displaced by the customer mix developments in U.S. beer. Do you have a sense of where we are kind of in that process and maybe when Ball start to see the benefits of being exposed to some of the other brewers that are doing very well right now? Dan Fisher: There's been very minimal movements in terms of retail displacement. I know those questions are being posed. There's a significant reset that happens kind of tail in the Q3 heading in the Q4 across most of the major retailers. So you will see this net impact fully manifest. Probably not until the first half of 2024 will all of the shakeout happen. So I'm not looking at anything appreciably changing in Q3. But the customers that have the opportunity to take a broader position in the retail, they will be gearing up their supply chains. They will be entering into these new retail positions over the course of the third quarter. And then you will start to see Q4, first half of 2024, where things start to settle out. Bryan Burgmeier: Understood. Thanks a lot. I'll turn it over. Dan Fisher: Thank you. Operator: Thank you. Our next question is from the line of Adam Samuelson with Goldman Sachs. Please go ahead. Your line is open. Adam Samuelson: Yes, thank you. Good morning, everyone. Dan Fisher: Morning Adam. Adam Samuelson: Good morning. Maybe just a starting point on, as we think about the guidance and think there was a new kind of qualifier this quarter around kind of the potential to be at the low end of the 10% to 15% long-term kind of range. And I guess help me. Is it just a volume question more in the back half of the uncertainty with some easier comps and the magnitude of bounce that drives kind of the introduction of that qualifier? Or is it further disruption in the U.S. beer? Or just help me think about range of outcomes that drive potential versus actually achieving? Dan Fisher: I wouldn't characterize it as further deterioration of mass beer. It's going to be persistent through the third quarter. And so, yes, but from a volume standpoint, the third quarter from a mass beer standpoint, what we anticipated at the beginning year versus what we're experiencing, it's softer. And nothing's going to change here probably in the next 90 days, meaningfully, to inflect. The good news is everything that we set out to accomplish in terms of our operational performance, the PPI pass-through, the tailwinds of some inflationary benefits, the SG&A actions, the fixed cost savings, all of that is allowing us to have a line of sites at that low end. We wouldn't be there without the -- we wouldn't be able to characterize our belief in that low end without the performance of the operations right now. So, it is mass beer, and in every one of the regions, we believe there's an inflection in the fourth quarter in volume. We've talked about the CSD market. We've talked about, I think, what's going to happen in mass beer, and then also a peak season in South America with an improved economic environment in Brazil. All of those things have to come through, but they were already baked in. What wasn't baked in is mass beer in North America. Adam Samuelson: Got it. Now, that's very helpful. And as you look at -- start to think about 2024 in that context, and start working with customers, obviously, some of the market share shifts could present incremental opportunities. And I guess as you think about the mass beer channel in 2024 volumetrically, if that rebounds, do you think you gain disproportionately from that? Or is it some of that potentially grew back to the one of the captive can makers that are known by one of your big customers? Dan Fisher: No, I don't believe the captive can makers will benefit. Obviously, they're going to prioritize in the short term their assets. One in particular that's having the marketing issue, we've come to an agreement that we've got a stable go forward position where we understand what the bottom is. And so, we should see inflection off of that, if they're able to turn around. And then to your point, we are with everyone in the beer space. So we should see net benefits into 2024. I would characterize Q2 and Q3 as a bit of a trough for us right now. So relative to that, and then what happens in the mass beer space and clearly the economy writ large, there's reason for optimism for sure in 2024 and beyond. Adam Samuelson: Okay. All right. Now, that color is very helpful. I'll pass it on. Thanks. Dan Fisher: Thank you. Operator: Thank you. Our next question is from the line of Christopher Parkinson with Mizuho. Please go ahead. Your line is not open. Christopher Parkinson: Great. Thank you so much. I want to circle back to the Brazilian market and everything going on. There's been some macro volatility debates about glass recycling, the relative cost of various packaging substrates. Obviously, the rebound is highlighted and the potential for the rebounds highlighted in your press release. Can you take a step back and just how should we be thinking about that, that evolution during the kind of the fourth quarter which you already highlighted and in the 2024 in terms of kind of like the normalized progression there, just because it seems like they're just a plethora of moving parts which we have to consider? Thank you. Dan Fisher: Yes. So what we've stated in an inflationary environment, recessionary environment, which is clearly what Brazil's been saddled with here the last couple of years. Two or three times when we've had similar macro events in that country, we've seen shared shift to returnable glass in the five to high single digit range. We experienced the same thing from second half of 2021 all the way through today. As -- a lot of it has to do with the economics, lot of it has to do with the per unit price point of aluminum, the aluminum package in the hedge positions that were constructed by our customers. The cost of aluminum has come off, the hedge positions have come off, the economy is rebounding, inflation is declining, interest rates are coming off. So, all of those things point to we should normalize back to mid 50%, low 50% can penetration in Brazil. So we're betting on can penetration improving in Q3, Q4 and stabilizing in Q1 for 2024. We haven't done a ton of work on 2024 right now, but I would think about it's principally an improved economy and a returnable glass shift that took place during inflationary period, which has always come back to cans, because that's the preferred choice and the preferred choice of our customers. We expect the same thing to happen. It's too early in the process given, excuse me, in the year given it's winter there to see much movement if anything, but we anticipate that tailwind into Q3 and into Q4, more in Q4. Hopefully that helps. Christopher Parkinson: Of course, understood. And just a very quick follow-up on the North American market regarding your volume commentary there. There's been a lot of start and go on various promotional excitations this year and euphoria and then waning, euphoria and then coming back. How do we think about that in the mass beer market? I mean there's been some competitor commentary and optimism for CSD at least a little bit, but what are you actually seeing from your customer base and how is that actually flowing in to your outlook for the second half? Thank you. Dan Fisher: We began the year with the expectation that we wouldn't see promotional activity, but promotional activity does not generate volume momentum. We thought volume momentum would come in Q4 when there are more challenging comps. We still anticipate that. We didn't build in much in terms of volume momentum happening in the first three quarters of the year. And even though you're right, there's increased activity on promotion. It hasn't been enough to move volume. There has been share shift from the major CSD players into private label over the last four weeks. That is usually a light bulb that goes off and folks behave differently as a result of that, but I'm encouraged that what we built into our plan heading into the year will manifest in the fourth quarter. I don't see any appreciable movement in the third quarter, because the promotion to your point is happening, but it's not manifesting in volume momentum yet. Christopher Parkinson: Helpful color. Thank you. Dan Fisher: Thank you. Operator: Thank you. Our next question is from the line of Ghansham Panjabi with Baird. Please go ahead. Your line is open. Ghansham Panjabi: Hey guys, good morning. Dan Fisher: Hey, good morning Ghansham. Ghansham Panjabi: Good morning. Obviously a lot going on. If food is just going to step back and you know the first quarter beverage packaging North and Central America, you know volumes were down roughly 5% and then in 2Q down 8.5. Is that delta purely mass beer or is there anything else that perhaps was a little bit worse on a year-over-year basis? Dan Fisher: I think you characterized it correctly. It's the net beer impact in the second quarter. There were pretty stable trends across everything and it kind of lends into my previous comments on the CSD sector. You know energy continues to -- almost all the categories are performing year-over-year in line with the exception of mass beer and that fell off. I think net, there was negative 2.5 points of growth in the first quarter, net minus 4.5 points and obviously our mix would have weighted us further down. Ghansham Panjabi: Okay. Thanks for clarifying that and then in terms of the curtailment that you're doing in terms of managing supply et cetera across multiple regions. What was that number for 2Q and how are you thinking about that for the back half of the year as well? Dan Fisher: The curtailment in South America is exactly what we planned. I mean candidly it's negligible in terms of the curtailment that we planned in 2Q versus what actually happened. You could say the delta that you just confirmed and volume that was additional curtailment that we took in the second quarter. Apart from that we've got a little bit more curtailment that will manifest throughout the third quarter versus what we entered the year with because of the mass beer phenomenon. Apart from that everyone's in alignment with what we entered the year with and what we expected. Ghansham Panjabi: Got you. And then just one final one. You seem generally constructive on Europe on beverage packaging side based on what you've seen so far this year. Just judging by the commentary and just some of the macro news. It seems like the European consumer is just much weaker in terms of spending and trade-downs and so on and so forth. Has your view changed at all in terms of the outlook for Europe specifically as it relates to the beverage can or is it pretty much the same? Dan Fisher: The outlook for the long term and the medium term continue to -- it is just a wealth of opportunity for us in terms of substrate shift given our current position. The end consumer is absolutely weaker than where we entered the year because of everything you cited. The can generally benefits from the on-prem off-prem shift even some of the trade-downs are beneficial. We've got a more diversified portfolio that has helped us heavier energy, heavier CSD. Beer has been the -- from a pan-European standpoint. Beer has been the softer category, there but I think our portfolio has helped us. And so we see we see a little bit more opportunity given that than maybe some of the other comments area that's been that's been put out there. But yes consumer in the second half of the year softer. We're still going to see nice growth and we're still going to -- that business continues to perform extremely well. Ghansham Panjabi: Thanks so much. Operator: Thank you. Our next question is from the line of Mike Roxland with Truist Security. Please go ahead your line is open. Mike Roxland: Thank you, Scott and Dan, thanks for taking my questions. Dan Fisher: You bet Mike. Mike Roxland: I might as well jump on the mass beer right over here and ask the question just you know. How are you just thinking about your portfolio and your end market exposure going forward. I think so, you made the comment that you could see some you know some shares shift later this year until 2024. So you could see you know mass beer improved and then your volumes are probably not possibly dead out but if there isn't that recovery in mass beer what happens to your volumes then. And so, I guess the question really is, one, let's assume that mass beer doesn't recover what happens to your volumes then. And two, are you actually considering trying to shift your production to other product categories. I made a comment in the press release that you said you're trying to align yourself with customers that are experiencing higher growth, so that means, you're trying to really shift or minimize your exposure to mass beer relative to other categories that maybe have more potential on a go forward basis. Dan Fisher: Yes Mike let me, this is all North America related I'm assuming, so I'll start there. Let's just talk about the categories, because we're spending an awful lot of time on the domestic beer category, which is which is down and I believe we're at a trough so it will recover from this point and it's consistent with all of the customer commentary within that space. But domestic beer is down 4.5% last 12 weeks, which is a further versus 52 weeks down, nearly 3%. So there's an acceleration of the decline obviously because of the marketing issue, but import beer is up 11% , non-alcoholic beer is up 27% cider is up 8% S&B is up 15%, ready to drink cocktails are up 41%. As we've seen the evolution of our customers transition to beverage companies, because they're going to be forced to put stuff on the shelf that sells. We've only experienced this phenomenon here for the past 12 weeks and there's a lot that is going to be repositioned and given we participate with everyone in the market, we should win with whatever's going to win in the market. At what percentage? It's a great question. We don't know, but the trough that we're experiencing now in the second quarter the third quarter will improve we should benefit from that in the first half of 2024 I would expect continued benefit throughout that first half of the year. But there's a lot of t questions. but I'm confident that these are customers understand their world real well and they know that they need to be putting stuff on the shelf that's going to sell and folks will find a home. Nothing's going to change candidly from that import beer number. The Hispanic population continues to grow. They already have all gut plans to lean into that to add more capacity. So there's an ability for those folks to accelerate. And obviously we're very close to them. So I'm encouraged. From today moving forward I'm encouraged what's going to show up in the first half of 2024 and beyond. Mike Roxland: Got that. Thank you for the color. And then just one quick question I think you recently restarted production Avital [ph] and Venus, George. And so wondering, I think that plan was taken down due to the weak macro and also because you lost a customer contract. So wondering is you need to bring them up and restart the plant because of your anticipation of better Brazil demand. Did you win new business? Just wondering why you've went up and restart. And I think that was done within the last month or so? Dan Fisher: Yes. We're bringing it up for the other customers in that market that are winning and we anticipate that they will win further and take further share as a result of the one brewer who filed for bankruptcy at the tail end of Q1, that's one issue. But we're not bringing that hands up for the customer that we originally built it for. Mike Roxland: Got it. Very clear. Good luck for second half. Dan Fisher: Thanks very much. Operator: Thank you. Our next question is from the line of Arun Viswanathan with RBC Capital Markets. Please go ahead. Your line is open. Arun Viswanathan: Yes, thanks for taking my question. I guess I just wanted to ask a little bit more on two things. So first off, when you look into the back half of the year and in the next year, you do have relatively easier comps for next year, already down to mid-single digits on the volume side and high single digits for North America. So would that allow you to get back into the, say, that low single digit range for next year's volume growth? And are there any other capacity considerations we should consider when thinking about how your volumes evolve and maybe settle into that low single digit range? Dan Fisher: Thanks for the question. As we sit here today, we haven't spent a whole lot of time on 2024, I think for both Europe and South America, given they're growing, we continue to believe that growth will persist. So the question mark will obviously be North America, but as I stated several times in this call, I think Q2 and Q3 we're at a trough. So we should see improved volumes over these periods. I believe that will be enough to push us into growth territory. So the aggregate position and the answer to your question is yes, I believe we will be in that low single digit growth for 2024. We've also stated several times that the capacity we've put in place over the last two to three years is enough to grow into at that range. And so, we should see nice lift in terms of profitability and performance without having to spend additional growth capital. We've spent the growth capital we need and I don't anticipate much in the beverage business over the next two years from a growth CapEx standpoint. Arun Viswanathan: And so with that comp, I guess, when you think about free cash flow, I imagine it could be nicely up over the next couple of years from that 750 base. Could you just touch on that opportunity as well as the capital that you plan to spend? Dan Fisher: Yes, I'll have Scott. Scott Morrison: Yes, I can get better. No, you're exactly right. I mean, we're going to spend less capital, just put up a $1.2 billion this year. Next year, we're expected to go down closer to GAAP depreciation. So all that freed up cash flow can go back to shareholders. So I think it gets better. Arun Viswanathan: Thanks. Dan Fisher: Thank you. Operator: Thank you. Our next question is from the line of Phil Ng with Jeffries. Please go ahead your line is open. Unidentified Analyst: Good morning. Thank you guys for taking the time and providing all the details. This is John on for Phil. Dan Fisher: Hi, John. Unidentified Analyst: Hey. I want to start just, I know it's kind of been beaten to death a little bit, but with the North American volumes down 8.5% in the quarter, obviously much worse than the overall market. I mean, you called out, obviously, that's vastly driven by the mass beer declines. But with the additional capacity that's now in the market over where demand is kind of falling to and supply chains obviously ease globally, have you been experiencing any customer shift or pressure on your contract at this point in time in the North America business? Dan Fisher: No pressure on the contracts at this point. I think a good reflection of that commentary would be the fact that we're passing through the inflationary mechanisms. So, if you weren't seeing that come through, I think you could probably could see that there's been some negotiation that's taken place. And that's not the case. The way I would look at volume, I think we're in a short-term dislocation for the second quarter and the third quarter because of mass beer. That correction relative to curtailments or decline shipments will revert in the second half of the year, but more meaningfully in the first half of 2024. The other thing that we've done is we've managed to inventory. So we built too much inventory last year. We've worked that off. So there's been an elevated level of curtailments relative to versus 2022. We'll be running much closer to scanner data in 2024 and Q4 likely to be a lot closer to scanner data. So those are the things that are well understood within the industry and with our customers. I think the theoretical excess capacity versus the reality versus the intentionality of running to cash, all of those things stabilized heading into 2024 in a, what I believe is a much tighter marketplace with growth underpinning every industry participant moving into 2024. Unidentified Analyst: Understood. Thank you for the details. Dan Fisher: Thank you. Unidentified Analyst: And then just touching on the, I think if I heard you correctly in the early part of the call, you said you were still exploring opportunities to accelerate the leveraging efforts. Could you maybe just talk a little bit more about what you were referring to? If that maybe meant some smaller divestitures or, other actions that you're taking for that do leveraging efforts? Dan Fisher: No, we have what we were referring to as, you know, we've generated a lot of cash here in the back half of the year. We're sitting out a lot of cash. And so we have the flexibility to, you know, pay down whatever piece of the debt we want to pay down. And so that's really what that's about. Unidentified Analyst: Okay. Understood. Thank you very much. Operator: Thank you. Our next question is from the line of Gabe Hajde with Wells Fargo Securities. Please go ahead, your line is open. Gabe Hajde: Dan Scott, good morning. Dan Fisher: Morning Gabe Hajde: I appreciate that there's been a lot of ground cover here, but maybe just because we don't have access to the industry data anymore and a perfect, I guess, lens into what the market is. Can you parse out the maybe 8.5% decline in the second quarter and sort of, what's embedded in the second half. I mean, between share shift between the market being soft and then maybe the kind of what's going on with the beer disruption? And then another volume related question in Europe. I think volume decelerated in the second quarter. I'm curious if that's a function of not having the capacity that you need. You talked about obviously the UK and the Czech facility ramping up. So, I'm just curious if that's what's driving your optimism for the second half to recover. You talked about your largest energy customer maybe being a little bit weak based on sell through in North America. They're a pretty big customer over in Europe. Is that part of what's driving the optimism or just help me understand because I'm assuming the business in Europe is sort of contracted. Dan Fisher: Yes, maybe let me start with Europe. Everything is coming in line with what we anticipated heading into the year. Inclusive of the large energy player. The one area that's softer is beer. I think that's related to the macro environment there. So the higher single digits that we anticipated having the year are going to be closer to mid single digits, but still nice growth. And it's not a function of bringing on the capacity. The capacity that's being brought on is in the growth areas. It's going to be the capacity that's a little less utilized in the beer space. That's what's happening in Europe. Relative to North America, we had a decline, as you mentioned, of roughly 5% in the first quarter. We are in that eight and a half range for decline in the second. We will see declines in the third with a return to some volume momentum in the fourth. What happens in the mass beer space will be the indicator of is it growth? Is it flat? But that's fundamentally, it is the mass beer impact and it is the fact that we're overweight in the beer space and overweight to one customer within that space. So that's the delta. Gabe Hajde: Okay. Maybe I didn't ask the question explicitly. Do you have any sense for what the market was down in North America? And then last one, if I can flip it in. I think there was $20 million of year-over-year improvement embedded in for the Cup's business, I think there was some basketball championship, that was a good thing for that product. Can you talk about sort of how that business is evolving and maybe expectations going into 2024? Dan Fisher: Yes, I think the overall marketplace in North America down slightly, 1%. And so the delta between that and our customer mix is really the delta there. And then on the Cup side, we're seeing incremental improvements. I think an LA Boston Series versus a Denver Miami Series would have helped the cup a little better, believe it or not, but making good ground and good traction in the food service space, things are breaking our way in terms of the regulatory environment as well on that product with Hawaii and now the mid-Atlantic's either banning or contemplating banning single-use plastic cups. So we're looking for trajectory over the second half of the year. I would not say that we will make a $20 million improvement in that business year-over-year, but we will continue to improve against it more in the $10 million range. Gabe Hajde: Thank you, Dan. Dan Fisher: Thank you. Operator: Thank you. And at this moment, I'm seeing no further question on the phone lines. Dan Fisher: All right. Thank you very much. We will look forward to talking to you again in the third quarter. Everybody enjoy the rest of your summer. Operator: Thank you. Ladies and gentlemen, that does conclude today's call. We thank you for your participation and ask that you please disconnect your lines. Have a good day.

Operator: Greetings. And welcome to the Ball Corporation 1Q 2023 Earnings Conference Call. During the presentation, all participants will be in a listen-only mode. Later we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded, Thursday, May 4, 2023. It is now my pleasure to turn the call over to Dan Fisher, Chairman and CEO. Please go ahead. Dan Fisher: Thank you, Tina, and good morning, everyone. This is Ball Corporation’s conference call regarding the company’s first quarter 2023 results. The information provided during this call will contain forward-looking statements. Actual results or outcomes may differ materially from those that may be expressed or implied. Some factors that could cause the results or outcomes to differ are in the company’s latest 10-K and in other company SEC filings, as well as company news releases. If you do not already have our earnings release, it is available on our website at ball.com. Information regarding the use of non-GAAP financial measures may also be found in the Notes section of today’s earnings release. Historical financial results for the divested Russia operations will continue to be reflected in the Beverage Packaging EMEA segment. See Note 1 Business Segment Information, for additional information about the sale agreement and a quarterly breakout of Russia’s historical sales and comparable operating earnings. In addition, the release also includes a summary of non-comparable items, as well as a reconciliation of comparable operating earnings and diluted earnings per share calculations. Joining me on the call today is Scott Morrison, our Executive Vice President and CFO. I will provide some brief introductory remarks, Scott will discuss key financial metrics and then we will finish up with closing comments, our outlook for the remainder of 2023 and Q&A. Let me begin by thanking our employees for working safely and efficiently, while fulfilling our customer’s needs. Collectively, we delivered strong first quarter results amid tough year-over-year comparisons, driven largely by business divestments executed in 2022. In the first quarter, every business either achieved or exceeded their operating plan. Our aluminum beverage and aerosol shipments were in line with our regional expectations, and our aerospace technologies continue to be in high demand. Notable inflation recovery, benefits of cost-out actions, improved operational efficiencies and performance in every business offset higher interest expense and taxes. With near-term macroeconomic conditions continuing to pressure consumer demand, Ball’s year-to-date global beverage can volumes were down 1.4% in the first quarter, in line with our expectations. Looking ahead, the breadth of retail summer promotional activity across our customer mix in North America and the continuing successful ramp-up of our two new facilities in EMEA, will be the key drivers of our ultimate 2023 shipment growth. We started 2023 with a conservative view on annual global beverage shipment trends, and we maintained that conservative second half weighted view. We have a lot of the year ahead of us and we look forward to serving our customer’s needs. As we sit here today, in advance of seeing quantifiable promotional activity, we are proactively managing our beverage operations in North and South America for cash and supply-demand balance, as we continue to bring down raw coil and finished goods inventories and return to our just-in-time supply chain management versus the just-in-case supply chain requirement during the pandemic and extended period of higher than planned growth for beverage cans. Around the globe, beverage cans continue to win relative to other substrates and we continue to leverage our customer mix, scale, regional plant networks, innovation and capable teams across the organization to ensure the best near-term, medium-term and long-term outcomes for all our stakeholders. In our aerospace and aluminum aerosol businesses, operational performance and demand for our innovative products and technologies are accelerating. In aerospace, our technologies are well positioned to deliver unimpeachable data and monitoring capabilities for both environmental and national security needs. And in our global aluminum aerosol business, we continue to serve new categories and offer reuse, refill bottle innovations to a broader set of customers and occasions. As we look ahead, all of our businesses will continue to unlock additional value for Ball stakeholders in 2023 and beyond. Consistent with our prior commentary in 2023, we remain positioned to deliver our long-term goal of 10% to 15% diluted earnings per share growth, inclusive of the Russian business sale headwind and we remain well positioned to generate strong free cash flow to deleverage and return value to our fellow shareholders. As we indicated in our prior call, the second quarter will remain choppy in North and South America metal beverage as we continue to work through higher inventory and manage regional production with an eye on cash. In addition, the positive momentum in our EMEA, aerospace and aluminum aerosol businesses will continue. During the Q&A, Scott and I will strive to provide additional clarity on the external environment and cadence for 2023 based on what we know today. Our global beverage teams continue to position our business to deliver the year and have an eye on the future. For the full year and incorporating year-to-date trends, our customer mix and excluding Russia, we now estimate low single-digit global volume growth for Ball, with North America being slightly down, South America volume up mid-single digits, EMEA volume up mid-single digits plus and our other non-reportable beverage business volumes up mid- to high-single digits. We appreciate the work being done across the organization and extend our well wishes to our employees, customers, suppliers, stakeholders and everyone listening today. With that, I will turn it over to Scott. Scott Morrison: Thanks, Dan. I’d like to congratulate Dan on his election to Chairman of the Board and thank John for his service as Chairman. Dan was battle-tested on many fronts in 2022 and he has the skill set and drive to take the company to new heights. First quarter 2023 comparable diluted earnings per share were $0.69 versus $0.77 in the first quarter of 2022 and excluding the notable Russian aluminum packaging business sale headwind, first quarter comparable diluted earnings per share were flat versus the prior year. First quarter sales decreased compared to the same period in 2022, primarily due to the sale of our Russian business in the third quarter of 2022, currency translation, lower volumes and the pass-through of lower aluminum prices, partially offset by the pass-through of inflationary costs. In the first quarter, net comparable earnings decreased compared to the same period in 2022, primarily due to the sale of our Russian business in the third quarter of 2022, lower volumes in North and South America, and increased interest expense, partially offset by fixed cost savings, lower depreciation expense and SG&A cost-out initiatives, as well as the contractual pass-through of inflationary costs. To reiterate our prior earning’s call commentary and to help frame some of Dan’s earlier comments about choppier second quarter performance in North America and South America segment earnings, we have been and will continue to proactively manage regional supply-demand balance across our system of plants in the near-term. After July, segment earnings will reaccelerate when the majority of the contractual inflation recovery begins and a larger portion of summer selling volume flows through segment results. Also remember, the virtual power purchase agreement settlement recorded in North America’s first quarter results will not replicate in the second quarter. However, we estimate that North America’s second quarter segment results will be relatively in line with $183 million first quarter segment results reported today. In South America, customer and product mix is unfavorably influence -- influencing the seasonally slower second quarter, and consistent with our prior commentary, we anticipate a more robust second half in Brazil, as customer hedges roll off and the fourth quarter summer selling season kicks in. As we sit here today, some very consistent commentary and key metrics. We ended the first quarter in a solid liquidity position with in excess of $1.5 billion in cash and available credit facilities; 2023 CapEx will be in the range of $1.2 billion, driven by cash outflows related to prior year’s projects; 2024 CapEx is targeted to be in the range of GAAP D&A levels. We are targeting free cash flow in the range of $750 million in 2023 and focusing on deleveraging. Our 2023 full year effective tax rate on comparable earnings is expected to be in the range of 20%. Full year 2023 interest expense is expected to be in the range of $425 million, while the first quarter corporate costs appear lower than the expected run rate. We continue to anticipate full year 2023 corporate undistributed costs recorded in other non-reportable to be in the range of $90 million, with the second quarter costs being higher year-over-year, driven by announced key employee retirement costs. Including the $86 million Russia business sale, operating earnings headwind, comparable operating earnings should increase nearly $200 million and full year 2023 comparable D&A will likely be in the range of $550 million. As we look forward and incorporating near-term demand trends, year-end 2023 net debt to comparable EBITDA is expected to trend in the range of 3.7 times, and in future years, we will drive that lower. Last week, Ball declared its quarterly cash dividend, and as Dan mentioned, reducing leverage is our key focus prior to resuming share repurchases in 2024. Rest assured, as fellow owners, we will manage the business through the lens of EVA and cash stewardship and we will effectively manage our supply chain and customers in this current economic climate to secure the best cash, earnings and EVA outcome for our shareholders. With that, I will turn it back to you, Dan. Dan Fisher: Thanks, Scott. Given the economic environment and global dynamics impacting our world, it’s a great time for investors to get up to speed on Ball. Our significantly improved plan following a challenging 2022 is kicking in. We produce products that consumers use daily, we deliver unique technologies to analyze, observe and defend what we value most, and employee owners are showcasing incredible resiliency, while delivering earnings, free cash flow and high quality innovative solutions to our customers and consumers, and as leverage comes down and free cash flow expands, our return of value to shareholders will grow in 2024 and beyond. Thank you to everyone listening today. And with that, Tina, we are ready for questions. Operator: Thank you. [Operator Instructions] Our first question comes from Ghansham Panjabi of Baird. Please go ahead. Ghansham Panjabi: Hi. Good morning, everybody. Thank you, Operator. Dan, maybe you can just start off with how the volume outlook by region has changed relative to your forecast three months ago. I mean, clearly, a lot has changed in the last few weeks, months, consumer spending in certain regions including the U.K., seem to be much weaker. So just curious as to how that’s impacted your thought process for the year? Dan Fisher: Yeah. Thanks, Ghansham. I guess, where we are at today, it’s been largely in line the first quarter and even what we are anticipating in the second quarter. Things that have moved around in regions have been largely related to customer mix. So the industry writ large -- is largely in line. There’s been movement in quarters, some have benefited, some haven’t. We have done a little better than the market in Europe, we were a little behind in South America and we were a little behind in North America. The benefits of what we saw in terms of the things within our control, we outperformed almost in every spin category, operational efficiency category. So that all helped us to effectively manage our earnings profile in the first quarter. We came into the year with a conservative view on things like promotional activity in the first half. We believe that you will see some benefits in the second half from that. But, again, we haven’t seen it and we are not counting on a lot of it. We put in place a very conservative volume plan at the outset of the year to underpin our earnings and our cash generation and that’s what our focus is. So we will continue to focus there. I don’t know if that helps you, but we are not seeing a lot of difference. We are seeing some movements and some share shifts by customer and by category. But it’s largely in line with what we anticipated heading into the year, at least for what we know in the first half. In the second half, I think this business, as you know, requires volume. We are a volume business. So we will need a little bit of that uptick in the second half of the year, but we got a lot of things breaking our way and the things that we can control that will enable us to hold the cash and hold the earnings profile here for the majority of the year. Ghansham Panjabi: Okay. Perfect. And then just so I understand this correctly. So you are benefiting from inflation recovery this year versus last year, right? Dan Fisher: Correct. Ghansham Panjabi: Maybe you can touch on where you are seeing -- how inflation is tracking this year, 2023 versus 2022, and if there is any element of deflation, would that mean that in 2024 you would pass it on to your customers, just to clarify. Dan Fisher: Yeah. I will take a shot at it. Just at a high level, we are definitely seeing some improved inflation in terms of the run rate and the cost structure, and to your point, the way these contracts work. Keep in mind that the majority of our PPI benefit, specifically in North America, isn’t going to come into the second half of the year. That will carry forward until it laps into the second half of next year. We will maintain the overwhelming majority of the lift that we are seeing on all of these inflationary pass-throughs as catch-ups. There will be a limited -- right now as we are looking at the year-over-year components, it doesn’t look like there will be much movement one way or another, absent what we are counting on for the catch-up from 2022 into 2023, but this is -- this will be evolving throughout the year depending on where the headwinds or tailwinds on inflation manifest. Scott, anything? Scott Morrison: No. There’s not deflation typically built in our contracts. There might be something unique in certain contracts where it’s tied to maybe an energy index somewhere. But, in general, we are not seeing deflation, we are seeing inflation slow down and that’s… Ghansham Panjabi: Perfect. Thank you so much. Scott Morrison: That’s usually a really good environment for us. D Yeah. Ghansham Panjabi: Yeah. Understood. Understood. Thank you. Dan Fisher: Thank you. Operator: Thank you. The next question comes from Christopher Parkinson of Mizuho. Please go ahead. Unidentified Analyst: Hi. This is John [ph] on for Chris. Thanks for taking my question. Dan Fisher: Hi, John. Unidentified Analyst: Can you expand on the promotion -- hi. Can you expand on the promotional trends that you are seeing around the globe, particularly in North America? And then also, can you please break down the various categories that you expect to drive growth going forward? Thank you. Dan Fisher: Sure. Promotional activity is really a thing in North America specifically, given the pantry stuffing effects in the larger case packs. We are not seeing much of any right now. I think it’s reflected in the performance of our customers in terms of the revenue growth they are seeing and volume being flattish and so we are sort of tied to that volume being flattish component. Where you would -- the one thing that is clear in the last 12 months to 18 months is the folks that have taken less price versus inflation or have held pricing. They are the ones growing share. And as share becomes more important, which we believe as the year moves on, there will be an opportunity for folks. If they are more focused on share gain, then you will see more activity, and I would expect to see, given the performance of beer with large being down, they have more impetus in a need to push volume than what I am seeing out of the energy and the non-alcohol spaces. So I anticipate a little bit in the second half of the year across the Board, but I don’t anticipate much. And if there’s one area where you could see or anticipate some, it will probably be in the area of the alcohol categories, in beer specifically, because shares don’t make us down in that category. Unidentified Analyst: Perfect. Thank you so much. I will turn it over. Dan Fisher: Thank you. Operator: Thank you. The next question comes from George Staphos of Bank of America. Please go ahead. George Staphos: Thank you. Hi, everyone. Good morning. Thanks for the detail. Dan Fisher: Hi, George. Scott Morrison: Hi, George. George Staphos: How are you doing? Dan Fisher: Good. George Staphos: So I wanted to come back to the question on end markets and trends you would expect for the rest of the year to the extent that you can comment. One, are there any categories without giving away information as proprietary that you expect will be particularly helpful and particularly a headwind to your volume outlook for the rest of the year? Relatedly, you mentioned, Dan, the beer category and there’s been lots of news there. What are you seeing in terms of your relative share of beer relative to what is happening to perhaps your mix or your customer mix? And then I had a couple of follow-ons. Dan Fisher: Sure. Let me take the second part of the beer question first. As you know, George, you have been following us a long time. We have an overweight in beer and we love all our beer customers and we serve that market. So net-net-net and I know the specifics and I am not going to go into the specifics relative to customers. But I will tell you this, how you should look at Ball’s portfolio as it relates to beer is, we win when folks drink beer. And so if there’s a mix impact. We may have a -- we may have one customer that’s up, in a short period of time there may be a share shift, we pick up both sides of that equation generally. So what we are more interested in is the health of the entire category and we believe that beer is going to need to galvanize itself and push in the second half of the year. They are going to have to promote across the entirety of the industry. George Staphos: And on the end market trends and it’s been a long earnings season, so we are trying to help you… Dan Fisher: Yeah. And in the… George Staphos: …ask them later this weekend but… Dan Fisher: In the category space, I don’t anticipate any significant wins or significant losses by category. What I -- in my prior answer to the prior question, I will reiterate. I think, there will be a share shift that happens in each category, depending on the approach that each brand owner takes and so folks that have decided to not pass on price increases aggressively, if you will, have done better on share gain over the last 12 months to 18 months. So if they have taken a posture where they are going to pass-through a portion, but not pass-through what everybody else in the category is Zoom, they are the ones that are winning share and so depending on what decision you are making within the category, I think it’s going to be a share shift within the category. I think every category is going to do well and some will do a little better than others, but it’s really going to be the customers that win within categories. That will be the determining factor on our volume versus our competitor’s volume. Scott Morrison: George, the only thing I would add is, long-term, the positive -- the best positive here is the can is winning, new product introductions are still heavily weighted to cans and so that bodes well for the can in the long run and that’s we are playing a long game here. George Staphos: Understood. Two questions and I will turn it over. One, on aerospace, can you talk to the degree that you can sustain the performance that you saw in 1Q, after what was -- obviously a little bit of a challenging 2022, whether this is kind of a one-off one quarter hit or benefit or you think you can maintain that into the rest of the year and hopefully 2024? And then back to beverage cans and capacity, can you talk to what you think operating rates will be this year? And Scott, should we really be expecting CapEx in 2024 in the range of $550 million to $600 million based on what you said on D&A? Thank you and good luck in the quarter. Dan Fisher: Thank you. So aerospace, I think the way you think about aerospace is that, I wouldn’t do a run rate on sequential improvement, meaning quarter two being better than quarter one. But I would say the quarters year-over-year will be improved. There is real underlying improvement in performance. In the second half of last year we had some pretty significant supply chain disruption. So that has been fixed. And then what you saw in the first quarter was a really nice performance execution and a couple of nice breaks in terms of just efficiency gains and just a better run enterprise there in the first quarter. So I think that will continue to be a tailwind in each quarter. It just -- it won’t be sequential lifts, right, it will be dependent on the projects and the mix. But that business is poised to do have an exceptional year this year. And I will let Scott tackle the efficiency question. Scott Morrison: Sure, George. On the D&A, I said GAAP D&A for CapEx. George Staphos: Okay. Scott Morrison: Not the comparable operating earning ones. George Staphos: Okay. Got it. Got it. Thank you for that. And operating rates this year? Scott Morrison: Operating rates, we are running our plants. I mean we are taking downtime and we are taking more of it in the second quarter to make sure that we are operating at pretty high levels of above 90%. So we will take downtime in Q2 in North America and South America. South America, that’s pretty typical given the seasonality of that business, but we are really focused in Q2 on getting our inventories to the right level and so we can run it -- and run at fairly high operating rates for the year and so that will be a bit -- that will be a drag in Q2. George Staphos: Understood. Thank you, guys. Scott Morrison: Thanks. Dan Fisher: Thank you. Operator: Thank you. The next question comes from Angel Castillo of Morgan Stanley. Please go ahead. Angel Castillo: Hey. Sorry. Can you hear me? Dan Fisher: Yes. Hi, Angel. Angel Castillo: Hey. Thanks for taking my question. Just wanted to follow up on the commentary around downtime in 2Q. Could you quantify what the drag will be from that and kind of related as you think about the kind of -- just cost or operational leverage that your business has to volumes potentially improving as kind of promotional activity returns. Just could you talk about maybe the degree to which some of that is maybe variable and comes back as you bring assets back online versus how much is just operating leverage that would be upside to our volume? Dan Fisher: Sure. Well, first of all, congratulations on being a new dad and how quickly… Angel Castillo: Thanks. Dan Fisher: I don’t know how quickly Leella can start drinking out of cans. That will help to answer the -- I think, the downtime question. But, in all seriousness, Scott laid it out really well. So in South America, you are entering in the off-peak season. So you typically do curtail. The balance of this comment about curtail there is curtailment and its maintenance. So it’s plant maintenance. So you are going to have that for certain. And then in North America, our plants performed extraordinarily well in Q1 and volumes were a little down versus our expectation. So we carried in a little bit more inventory in the second quarter and we are going to manage that, we are going to manage that tightly here for the balance of the year for cash-generative purposes. We have got a lot of flexibility in our lines, as you know. The curtailment question for us is harder to answer. Angela, I think you know this about us, because we have multiple can sizes on every line. There is one can size that certainly has excess capacity, writ large in the North and Central American market. We do have exposure to that, but it’s limited. And so the next question, I think, that you were leaning into is there, depending on what the brand is or the product is that’s innovating and that’s winning, we can flex to that, and we can turn that on. We are in a really healthy position in terms of safety stock and we are in a healthy position in terms of we are performing a heck of a lot better than we have in the last couple of years in running our business. So if things suddenly shift, we have got dry powder and we have got dry powder in a number of can sizes that gives us flexibility to move into whatever the winning product and whatever the winning brand is going to be. So I am not concerned about us stepping into upside. I -- and we are going to manage inventory positions and safety stock levels really with a lot of discipline here in the second quarter. Scott Morrison: And Angel, just to give more granularity in the prepared comments, I said, in North America, we would essentially be flat sequentially first quarter to second quarter given the downtime of things that we are going to do and getting our inventories right. In South America, the negative will be larger than that. Given the volume, the mix and the absorption, it will be softer than it was in Q1 and then we expect to be in a better position as we move into the busier second half of the year. Angel Castillo: That’s very helpful. Thank you. And then just maybe following up on the strength in the other segment. I am curious, you talked about corporate, you reiterated the guidance there. Just maybe some of the other pieces, some of the strength you are seeing in aerospace and just what the underlying expectations for that segment will be kind of for the full year? Dan Fisher: Our aerosol business is doing really well. We continue to win business. We continue to have nice volume growth. That business is seeing -- during COVID it was really impacted, I would say, volumes globally and we are seeing that really come back nicely. We are seeing -- and new products and innovation is driving a lot of that, both kind of in the typical aerosol personal care space, but also in the water space and the refill and reusable side. And in aerospace, I think, somebody mentioned, we had a choppy year last year. We had supply chain challenges that cost us money. And the business is performing exceptionally well. They are stepping into these newer contracts that we were confident would be good and they are good, and we will see the benefits of that for the full year. So we are really excited about those businesses. Angel Castillo: Thank you, Dan. Appreciate it. Operator: Thank you. The next question comes from Cleve Rueckert of UBS. Please go ahead. Cleve Rueckert: Hey. Good morning. Thanks for taking my questions. Dan Fisher: Good morning. Cleve Rueckert: A couple of quick follow-ups from me. I am just curious, just digging into the inventories a little bit. I am just curious where inventories both from a finished product and raw material standpoint, where they stand versus your target, I guess, as of the end of the quarter? And if you were building inventories or if you are starting to work them down at this point? Dan Fisher: Well, we are working -- in North America and in South America, we are working them down. So that’s why you see a big swing in payables. We are not ordering as much metal, both finished goods and coil, raw material. And so we have got another quarter of that to do in Q2 and then we think we will be in a much better position from an inventory standpoint. In Europe, it’s not -- we are turning on a couple of plants, so it’s a very different dynamic there. But in North America and South America, it’s about getting our inventories down. Cleve Rueckert: Right. And is that more on the raw material side? I mean you mentioned coil, is finished product inventories… Dan Fisher: It’s both. Yeah. Cleve Rueckert: Yeah. Dan Fisher: It’s both. I mean and we are talking… Cleve Rueckert: Okay. Dan Fisher: In North America we are talking days of finished good inventory. But we -- a lot of this -- the raw material piece is still a bit of an overhang from last year, because we were bringing in a lot and anticipating growth at this time last year. So we have held on to larger raw material stores and we have been working that off. We are continuing to work that off. And the finished goods, it’s not significantly different than what we anticipated heading into the year. But a few days of additional curtailment is meaningful in a quarter and I think that’s what Scott’s signaling to you. Cleve Rueckert: Yeah. Yeah. I think that’s very clear. And then just like a quick follow-up. Did you import any cans into North America in the first quarter? Dan Fisher: No. Cleve Rueckert: Okay. That’s very clear. And then… Dan Fisher: Yeah. Cleve Rueckert: …one last one from me. On the promotional activity... Dan Fisher: Sorry. Maybe -- one -- maybe this will help for further Q&A regarding that question. We didn’t last year either. So there was a 21 to 22 bridge at each quarter for that. But we have originated all that production last year and you won’t have any of that commentary. For North America specifically, we did have a little bit of Saudi into Europe last year and that’s now gone away and we have got origination production now in Europe. Cleve Rueckert: Okay. And then just the last one for me is on promotional activity and I appreciate the conservative tone that you are taking and the plan. But just when do you expect to gain visibility, I mean, is there still at this point in the year, the potential for promotional activity to pick up and have a material impact on volumes? Dan Fisher: Yes. I mean, absolutely, I mean, promotion works really well for us from a volume perspective. The degree to which the promotion is, I think, is the big question. And we are really not trying to avoid this question. But I think here’s the backdrop that we are facing relative to going into much detail or fully understanding the real impacts of what a promotion would look like and how it would react consistent with kind of historical norms. If you look at a 12-pack of CSD cans, three years ago it was about $4 on average, today it’s $8. So is $1 off going to move it? Is $2 off going to move it? So it’s not just promotion. It’s the elasticity in and around the price of the promotion that is very difficult for us to characterize and I think it’s difficult even for our customers probably to understand. So at this point, we need to plan to deliver cash and deliver earnings and the end consumer strength or weakness is also something that’s very difficult to understand right now just given the stimulus packages and higher interest rates and all of those things. It’s just -- it’s ambiguous and difficult to quantify right now. So we are running for cash and we are managing what’s in front of us and until something changes substantively, I think, that’s the best tone for our corporation and our employees to manage to. Cleve Rueckert: Yeah. That makes a lot of sense. Good luck with it all. Thank you. Dan Fisher: Thank you. Scott Morrison: Thanks. Operator: Thank you. The next question comes from Anthony Pettinari of Citi. Please go ahead. Bryan Burgmeier: Good morning. This is actually Bryan Burgmeier filling in… Dan Fisher: Hi, Bryan. Bryan Burgmeier: …for Anthony. Thanks for taking the questions. Dan Fisher: You bet. Bryan Burgmeier: Yeah. So the $28 million tailwind from the power agreement settlement in 1Q, was that part of full year guidance originally? I don’t remember hearing that on the 4Q earnings call. And when you talk about North America being kind of flat quarter-to-quarter, I assume this means it will actually be like an apples-to-apples basis, because I don’t expect this tailwind to repeat in 2Q, is that accurate? Dan Fisher: You are correct. It will be up year-over-year, but flat with the first quarter. In terms of the virtual power purchase agreement and when we had our previous call, we were negotiating the settlement of it. So we weren’t really going to discuss it. Part of that was built into our first quarter numbers because we knew we were going to settle it, we just didn’t know what the amount would be and that amount would have run through our P&L over time and in last year. But the provider wanted to exit the contract and we were able to extract a very favorable outcome for us and all of that outcome hit us -- benefited us in the first quarter, but that will not repeat. We have entered into other virtual power purchase agreements to make up for the lost clean energy that we were buying and so we are in a pretty good spot. Bryan Burgmeier: Okay. Understood. Thank you for the detail. And last question for me in March, you announced you were having some discussions about the possible closure of the Wallkill plant. I am just wondering how are those discussions going and based on what you know right now, what you can say right now, is it possible to say when or if that plant will close? Dan Fisher: Yeah. I would say in terms of filling out your model, I wouldn’t count on anything in 2023 relative to an uptick in fixed cost savings. We said we were entertaining closing it. I think we are committed to closing that facility now. That’s a subtle change. And the other thing is there’s just not a lot to talk about at this point, because we are entering into effects bargaining now. As we know more, we will update you. But you will see capacity coming out at some point this year and you will see that tailwind in 2024 is what I would anticipate, but I don’t know the specifics of it at this time. Bryan Burgmeier: Okay yeah. Thanks a lot for detail there. Dan Fisher: You bet. Bryan Burgmeier: Good luck in the quarter. Dan Fisher: Thank you. Operator: Thank you. The next question comes from Arun Viswanathan of RBC. Please go ahead. Arun Viswanathan: Great. Thanks for taking my question and congrats on the strong quarter. Dan Fisher: Thank you. Arun Viswanathan: I guess, first off, in North Central America -- in the Americas region or North Central America, you were able to kind of hit very high levels of segment income in Q1 that I thought would be more likely to materialize in Q2. So just wondering now as you look into Q2, do you expect kind of flat performance there? And maybe you could comment also on Brazil, obviously, we have seen some inroads on the glass side. But what are your expectations, I guess, as far as substrate mix as you look into Brazil for the rest of the year? Thanks. Scott Morrison: Yeah. I’d say North and Central America, what you are seeing is, all the hard work from last year in terms of cost-out, you see our SG&A is much lower, the plants are operating better. We are -- I think we are getting our group back with how we operate. So it performed at or above our expectations, too. We expected softer volume and our game plan is to perform very well even if volumes are soft and so that’s exactly what you are seeing. You also got -- we got a benefit of that virtual power purchase agreement in the first quarter that won’t repeat and so -- but we will keep earnings relatively flat and that’s due to improved performance across the business. Dan Fisher: In terms of the glass versus aluminum substrate penetration or shift that we have seen here in the last 12 months to 18 months, it’s in line with what’s happened historically. In a higher inflationary environment, you do see a return to returnable glass, somewhere in that 5% to 6%, 7% share shift. That’s what we saw last year. As Scott indicated in his comments at the outset, and I think, we characterized what we believe to in the second half, as inflation dissipates and some of the actual cost and hedge positions of our customers down in Brazil, allow them to step into what the true cost of aluminum are. We are anticipating a strong peak season that will show up in the second half of Q3 and Q4 for us. We are not hearing anything different. I will actually be down in South America next week. So I anticipate to hear more of the same. But that -- I don’t see it as a permanent shift, I guess, would be the answer if that’s the underlying question there. Arun Viswanathan: Great. Thanks. And then as a follow-up on Europe, I guess, was there any work done on your side to renegotiate contracts for energy or any other cost items? Is there any requirement -- extra work you have to do on that side or not necessarily? Scott Morrison: A lot of that was already done. The European business has done a really good job both on the commercial front and the supply chain front to manage our costs. So that’s -- and you are seeing that in their performance, too. Dan Fisher: I think both in that business and equally excellent job by our aerosol business, which has a significant present in Europe. So both of those businesses and both of those management teams have done an extraordinary job to work as partners with our customers to get to a good medium and longer term outcome as we manage through a very different energy and inflationary backdrop in Europe. So I think we have done the right thing by our customers and our teams have done the right thing by our stakeholders. Arun Viswanathan: Great. Thanks a lot. Dan Fisher: Thank you. Operator: Thanks. The next question comes from Mike Roxland of Truist. Please go ahead. Mike Roxland: Thank you. Hi, Dan, Scott, and congrats on a… Dan Fisher: Hi, Mike. Mike Roxland: … solid quarter given the results there. Just some quick ones for me. Just in terms of the guide the EBITDA for North America and particularly exports in 2Q, what type of volume growth is that embedded? Is that -- does that embed a slightly down you expect for the year, and if so, could there be upside to the forecast if you do have to start to see some promotional activity kicking off? Dan Fisher: Yeah. You were a bit choppy there. But I think the question is kind of what’s the underlying demand profile or assumption built into our current North America projection. And you are correct, we believe it will be slightly down at this point as we look out over the course and the balance of the year, given really very little insight into the actual decision for process related to pricing and volume. It’s a volume business at the end of the day and we are going to need some. But the teams -- we are -- all of the cost actions we took, all of the fixed cost actions that we took as difficult as those were, all of those give us the ability to execute against our earnings and our cash profile more importantly based on kind of a flat to slightly down volume profile and that’s what we currently anticipate and that’s what’s in our model. Second half weighted in terms of things like the PPI pass-through mechanisms and even some additional cost savings that we anticipate in the second half of the year. But, yes, second half weighted plan, whether volume moves meaningfully off of our current run rate, that would be upside, correct, and we would -- yeah, we look forward to seeing that upside. We can step into it, as I commented earlier in the call on both safety stock and our operational and performance. So there’s room for upside, but we need to see that the end consumer health and pricing behavior will play a role and a significant role in that. Mike Roxland: Got it. And then just one quick follow-up in terms of South America and you mentioned Dan being a little bit behind the market. Was part of that being behind the market due to the bankruptcy of a large beer producer down there? And then if you were behind the market, just any updated thoughts on the plants that you have idled in Brazil, like, Frutas and others and whether they can ultimately become permanent closures? Dan Fisher: Yeah. We -- the only permanent closures we have had, we have announced. So we have got dry powder in that marketplace. Some of these assets are being contemplated to open back up depending on what happens in the market, as you indicated. There was share shift in Q1 and there was one -- one of our competitors benefited, because they had outweighted exposure to one of the beer brands there. A weaker beer customer or beer mix may shift around as it does from time to time. We believe that the customer relationships that we have, they are excited about the second half of the year more so for the cost shift and their hedges rolling off and us being able to step into our aluminum profile. But, yeah, it was a little choppier because of customer mix for us in the first quarter. Scott Morrison: We didn’t have any exposure to the customer that went bankrupt. Mike Roxland: Got it. Very clear. Good luck in 2Q. Dan Fisher: Thank you. Operator: Thank you. The next question comes from Phil Ng of Jefferies. Please go ahead. Phil Ng: Hey, guys. Congrats on a solid quarter and a pretty tough demand environment. I guess… Dan Fisher: Thank you. Phil Ng: … Dan, it would be helpful. Dan, I think, it would be helpful to kind of give us some color in terms of how intra-quarter volume trends kind of sell throughout North America and Central America. How April is kind of shaping up and do you kind of expecting -- expect more of the same effectively in 2Q in terms of the volume trends? Dan Fisher: Yeah. Thanks for the question -- I do. In fact, it’s probably a little softer than Q1, but that’s anticipated and we are managing against that. But, yeah, as we sit here today, there’s not a lot of movement by the customer base to shift what’s currently happening. April is usually not the month that you usually see activity. So you get to the second half of May and June, that becomes really important as you head in the peak season. But as we sit here today, I think, the way you characterize it is correct. It’s largely in line with Q1 and pockets depending on customer mix may be a bit softer. Phil Ng: Got you. And then for Latin America, Central America, Latin America, you are expecting… Dan Fisher: Yeah. Phil Ng: If I heard you correctly, Dan, mid-single-digit growth. So that would imply a pretty sizable ramp in the back half. Part of this, it sounds like it’s predicated on the view that maybe your customers lean into loan hedges rolling off. How much line of sight do you have? I mean like just like promotions in North America, it’s been tough to predict. How much line of sight do you have that your customers would behave as such and will help you kind of jump start that demand backdrop, because it’s been pretty choppy in Brazil? Dan Fisher: No. I think it’s a great question and it is. We built our plan on it second half loaded because of everything that you just outlined and indicated. The conversations that we are having with our customers, I will be down there next week has all been. You should count on that. That’s what they are planning for. But plans aren’t absolute. So at this point, I haven’t heard anything, I don’t have any insight that would suggest anything other than what we have laid out, what we have characterized. But I think your point is valid, I mean, there’s certainly risk in a significantly elevated volume position. But our contracts also have backstop provisions in there that give us a little bit more teeth than maybe in years past. Phil Ng: Okay. And sorry, just to sneak one more in. North America, you are expecting volumes to be flat to down a little bit. Any color on the back half what that assumes, is it more like flat, is it still down a little bit or maybe inflect a little bit up in the back half of North America? Dan Fisher: Yeah. It’s -- right now, I would -- how we get there is slight declines in the first half and flattish in the back half. Phil Ng: Okay. Dan Fisher: I think there’s opportunity for more to have in the back half, but that’s not what’s built in our current plan. Phil Ng: Okay. I think that’s more than reasonable. Thank you. Dan Fisher: Yeah. Thank you. Operator: Thank you. The next question comes from Mike Leithead of Barclays. Please go ahead. Mike Leithead: Hey. Thanks. Good morning, guys. Dan Fisher: Hi. Mike Leithead: I just wanted to actually follow up on Phil’s last question there, just thinking about the North America earnings cadence for the year. I think, Scott, you were fairly clear on the 2Q outlook. So just how should we think about the magnitude of the second half step-up just as you think about the new contracts rolling in? Scott Morrison: Well, we get more of the PPI in the back half of the year, and let’s face it, the Q4 comp was pretty easy for last year. So we should do meaningfully better than Q4 of last year, which was not very good. But I would say, we had a pretty good third quarter last year really in terms of performance in North America. So it’s definitely back half weighted with most of it in the fourth quarter. Mike Leithead: Got it. Fair enough. And then second briefly, you talked a lot about North America and South America earnings outlook, but could you maybe speak to the earnings outlook for EMEA into the second quarter and beyond? Scott Morrison: Yeah. Europe is really -- we have got the headwind of Russia. So that was $32 million in the first quarter. It’s $40 million in the second quarter. It moderates to $14 million in the third quarter. So you have got those -- that headwind each of the next couple of quarters, second quarter being the largest headwind, because Russia performed really well last year in 2022. But all of the things that they have been doing from a cost standpoint, from a contract standpoint, from an inflation pass-through standpoint have been positive and they are seeing nice volume and we have got new plants coming up. So we feel really good about the European business for the full year. Dan Fisher: Yeah. I think how you look at Europe is FX stabilized, inflation stabilized, big headwind first half of the year in terms of operating earnings from the divestment of Russia and then you step into the two new facilities in the second half of the year and we are still seeing growth in that business on improved contractual terms. So it will be continued improved performance once you step out of the second quarter with the drag from a $40 million Q2 in Russia. Mike Leithead: Great. Thank you. Operator: Thank you. The next question comes from Kyle White, Deutsche Bank. Please go ahead. Kyle White: Hi. Good morning. Thanks for taking the question. I wanted to focus on beverage can new product introduction, a lot of uncertainty in the economy, consumers also kind of pulling back a little bit on the spend. Are you seeing any reduction in new product offerings or introductions from your customers, understanding that the can obviously win a greater share of this, but some of these new products in energy alcoholic and ready-to-drink space have been key to the growth. So just curious what you are seeing there? Dan Fisher: Yeah. Kyle, first of all, congratulations. A lot of the information we are getting on new product innovation is coming from Vane [ph], your new baby girl -- boy, sorry. Kyle White: Yeah. Thank you. No worries. Dan Fisher: So, yeah, he -- I am sure what he’s going to be wanting is ready-to-drink cocktails and -- but nutritional energy drinks. In all seriousness, lots of innovation still happening and continuing to see share gains from our ready-to-drink cocktails. I think a couple of customers have really benefited in that space. And there’s almost a forcing mechanism here, like, if beer is declining, those alcohol companies or new beverage companies are going to have to step into things to sell and they are innovating at the fastest rate. And then we have seen some of the historical CSD companies that have introduced alcoholic beverage and they have really done well. So you will also see -- the other part of this is you are -- there’s a greater opening as the price increases have been the lever with which folks have pulled, our customers have pulled. It creates a disruptive space for innovation to come in. That’s always what we have seen and so it’s ripe for more innovation and more disruption and you are starting to see that. And now that we have cans available, cans will win and those tailwinds will manifest here more in the medium-term, but we are having all those conversations. So I think that will continue to be a benefit and a tailwind for the can. Still seeing new product introductions at those 70%-plus levels. So nothing’s changed in terms of that. The can continues to win. So we are excited about the future prospects and new product introductions. Scott Morrison: And in fact, Kyle, today, we have one of the leading beverage innovation houses is actually visiting us here in Colorado today. So we are really excited to be working with them and all kinds of folks with new ideas and new beverage categories. Kyle White: Got it. And I appreciate the remarks. Maybe a soft sell-through here for the little guy here shortly. But next question I want to focus on the start-ups related to Europe. Just curious how the U.K. and the Czech Republic plant are doing, any kind of -- how the ramp-up there is going and any start-up costs to call out? Dan Fisher: I will leave it to Scott. I don’t think anything meaningful in the start-up cost. But they are right on track. The teams have done a great job. We have got sister plant concepts in terms of training. So we brought folks in. They are helping us out in the other local facilities. So they will be well trained and ready to step in on day one when we have production and operation. Scott Morrison: We probably had about $5 million of cost -- start-up cost in the first quarter. There will be more of that in the second quarter. But I was just looking last night actually at the start-up curve for each of those plants and it’s been phenomenally well executed. We are right on where we thought we would be and we are really happy with the performance and the execution of those projects. Kyle White: Thank you. Appreciate the details. Dan Fisher: Thank you. Operator: Thank you. The next question comes from Gabe Hajde of Wells Fargo. Please go ahead. Gabe Hajde: Dan and Scott, good morning. Congrats. Dan Fisher: Good morning. Scott Morrison: Good morning. Thanks. Gabe Hajde: I have a question about sort of just the full year and then the second year or second quarter cadence, excuse me. I feel like there’s a decent amount of noise and sort of just underlying performance having, you talked about a stable business, but North Central America profit being up almost 2x from 4Q and I appreciate that was an odd quarter. But, Scott, the math you gave us on being 3.7 times levered by the end of the year, if I subtract out $750 million of cash plus the $260 million of dividends, that implies 21.50 [ph] of EBITDA. Is that the right way to think about it, and then sequentially, would you expect EBITDA to be up or down relative to the first quarter? Scott Morrison: For the first side of your question, I would say, you are directionally correct where you are coming out. On the second part and are you speaking to the second quarter EBITDA? Gabe Hajde: Correct. Like, just looking at... Scott Morrison: Yeah. Now the second quarter EBITDA will be down and then it will accelerate in the back half of the year. And we explained both -- we got a $40 million drag from Russia. We are getting our inventories right in South America. So we will take absorption hits. We will have negative mix in the second quarter. In the second quarter, in North America, the plants will perform very well and we will make more money than we did last year, but we don’t have the PPA thing that we had in the first quarter. So I think I explained exactly how it should shake out. Gabe Hajde: Understood. And then, Scott, probably, one for you on the balance sheet and cash flow that you are talking about. Unless my model is wrong, your days payable are at 130, which is pretty good, I mean, I expect you guys wouldn’t want to extend it out that long yourselves. Is there anything that we should be mindful of thinking about that being a potential drag on cash flow in future years? And then I think you have $1 billion of debt due in November, is any change in the potential rate on that included in the $425 million of interest expense? Thank you. Scott Morrison: No. The rate -- the $425 million is kind of built in with any actions that we would take and when we would take those actions to deal with the maturity in November. We will generate a lot of cash in the back half of the year. So our debt paydown really doesn’t happen. This is kind of the peak leverage right now in kind of April, May timeframe, stays fairly even until through June and then it starts to come down, but most of it will come down in the fourth quarter. So that interest expense assumed kind of anything we might do on the debt front. What was the other part of the question? Dan Fisher: And I think implied in that statement is, yeah, we recognize that we will be retiring cheaper debt than we would be stepping into… Scott Morrison: Yeah. Dan Fisher: … at this point in November and that’s anticipated in Scott’s number. Scott Morrison: Yeah. And then next year we are going to delever more. I think we can both delever and start buying back some stock next year. But sure in the higher interest rate environment, you probably want a little less debt. The world has started to stabilize, so that’s good. But I am a hell of a lot older than you Gabe, but these rates are still not that scary. I was around when we were doing 8%, 9% debt. So 6% debt is really not -- it’s something we have to deal with, but it’s not something that changes the direction or changes what we are doing. Gabe Hajde: Right. Understood. Thank you. And then the other question was on the days payable or just working capital in general. Scott Morrison: Oh! Yeah. Gabe Hajde: I am seeing days payable 130 days. Scott Morrison: Yeah. I think we got to manage both the supply side and the customer side from a working capital standpoint and we do that every day. And every new contract negotiation, those are key points. It’s not just about price and volume, terms matter and so we focus on that every day, and we have meetings on cash flow every month. So we are very keen and focused on it. But, yeah, in a higher interest rate environment, anything that has a time element of money is more expensive. Gabe Hajde: Thank you. Scott Morrison: Yeah. Operator: Thank you. Our final question… Dan Fisher: Thanks, Gabe. Operator: … comes from Adam -- oh. Pardon me. Go ahead. Dan Fisher: Yeah. Thank you. I said, yeah, one more question and then I appreciate it. Operator: Okay. It’s Adam Samuelson with Goldman Sachs. Please go ahead. Adam Samuelson: Hi. Thank you and I appreciate you all squeezing me -- yeah, squeezing me in. Dan Fisher: You bet. Adam Samuelson: There’s a lot of ground covered. Maybe just going back to EMEA. I appreciate the kind of noise on a year-on-year basis with Russia and prior year results. You have disclosed what the non-Russia EBIT was in the prior year. So how do we think about that business on an organic profit or on a like-for-like profit basis progressing over the balance of the year? And as we think about the new capacity in Czech Republic and the U.K. layering in, in the second half kind of the implicit underlying volume growth that carries over into 2024 without broader market kind of expansion? Scott Morrison: Okay. The game plan really for Europe this year is to be able on a euro basis to replace those Russian earnings that we had for nine months last year. So that -- if we can do that, that’s a hell of an accomplishment, because Russia was a very nice profitable business. And so if they can do that, I think, that’s victory. They have done a great job of managing their cost structure, managing their contracts, managing the supply chain and so we are really happy with the performance of the EMEA business. Dan Fisher: Yeah. I think in the simplest terms, the plan that we have set out this year inclusive of Russia, would be we are going to make significantly more money on less volume and we are going to generate more cash and a lot of that is coming from Europe’s ability to offset the $80 plus million of comparable operating earnings in Europe. So they have got a significant plan for improvement and they are off to a good start executing against that. And they have been the business that has done -- they have done extraordinarily well here since we acquired that business from Rexam. They have continued to deliver against plan and the only time I think we didn’t was when we had a global pandemic. So we are feeling pretty confident in that team’s ability to deliver. Adam Samuelson: Got it. And the carryover on volume into 2024 from the new facilities? Dan Fisher: It would be in the range -- on those two facilities in the range of 2 billion units. Adam Samuelson: Okay. That’s all really helpful color. I appreciate it. Thank you. Dan Fisher: Thank you. And I think, with that, we look forward to talking to you here in another quarter. Thanks for everybody’s attention and participation today on the call. Operator: Thank you. This does conclude the conference for today. We thank you for your participation and ask that you please disconnect your lines. Thank you. Have a good day.

Operator: Greetings and welcome to the Ball Corporation Fourth Quarter 2022 Earnings Call. At the start of the presentation, all lines will be in a listen-only mode. [Operator Instructions] As a reminder, today’s call is being recorded Thursday, February 02, 2023. I would now like to turn the conference over to Dan Fisher, Chief Executive Officer. Please go ahead, sir. Daniel Fisher: Thank you, Carlos and good morning, everyone. This is Ball Corporation's conference call regarding the company's fourth quarter and full year 2022 results. The information provided during this call will contain forward-looking statements. Actual results or outcomes may differ materially from those that may be expressed or implied. Some factors that could cause the results or outcomes to differ are in the company's latest 10-K, and in other company SEC filings as well as company news releases. If you do not already have our earnings release, it is available on our website at ball.com. Information regarding the use of non-GAAP financial measures may also be found in the Notes section of today's earnings release. Historical financial results for the divested Russian operations will continue to be reflected in the Beverage Packaging EMEA segment. See Note 1, Business Segment Information, for additional information about the sale agreement and a quarterly breakout of Russia's historical sales and operating earnings. The release also includes a table summarizing business consolidation and other activities as well as a reconciliation of comparable operating earnings and diluted earnings per share calculations. Joining me on the call today is Scott Morrison, our Executive Vice President and CFO. I'll reflect on 2022 briefly and Scott and I will discuss key drivers and financial metrics for 2023, and then we will finish up with closing comments, the outlook and Q&A. Let me begin by thanking our employees and stakeholders for their hard work and support. As I reflect on 2022, I'm struck by the magnitude and pace of change we have navigated. The commitments we are prepared to achieve, and the prompt and decisive actions that were made by our team in a fluid and ever-changing macroeconomic and geopolitical backdrop. Our full year in fourth quarter comparable net earnings reflect our EMEA, aerospace, and aerosol operations coming in as expected offset by the impact of our Russian business sale, softer volume in North and South America. Planned inventory management impacting fixed cost absorption and the effect of high cost inventory and the timing effect of customer sell group. Global beverage can shipments including Russia increased 0.8% in 2022 and decreased 6.1% in the fourth quarter. Excluding Russia, global beverage shipments increased 2.1% in 2022 and decreased 0.9% in the fourth quarter. North America beverage can segment shipments decreased 0.3% in 2022 and decreased 7.1% in the fourth quarter. EMEA beverage can segment shipments excluding Russia increased 8.6% in 2022 and increased 11% in the fourth quarter. South America beverage can segment shipments decreased 6.3% in 2022 and decreased 4.2% in the fourth quarter. Other non-reportable beverage can shipments increased 48.2% year-to-date and 48.5% in the fourth quarter as a result of continuing to provide support to domestic European customers. Our global extruder aluminum bottle and aerosol business continues to benefit from new refillable, reusable bottle offerings and higher recycled content aluminum bottles for personal care products. Shipments in this segment increase 12% year-to-date and 14.5% in the fourth quarter. And our aerospace team increased their backlog 20% year-over-year. In response to the previously discussed unfavorable swing in beverage can volumes relative to our early 2022 expectations and as a result of our sale of our Russian businesses, we optimized our global cost structure, deferred certain projects, and took actions to right size our North and South American manufacturing plant systems by consolidating high cost less bit facilities into scalable facilities capable of delivering our customers a portfolio of can sizes, enabling category and pack size innovation to our customers in a more agile way moving forward. In EMEA, newly constructed facilities will ramp up during the first half of 2023 and provide much needed cans to our customers across the region. It is also important to celebrate the accomplishments achieved by our team during 2022, including shipping nearly 115 billion innovative aluminum cans, bottles and cups to our customers, delivering numerous environmental space science and defense technologies to study the impact of humans and the environment on our earth. Weather satellites that protect life and property from extreme weather events on orbit defense technologies to ensure the safety of our homeland, the war fighter, and our allies, and deep space marbles like the James Webb Space Telescope to view previously invisible images via the Ball built mirror assembly and optics. Joining the World Economic Forum's First Movers Coalition to lead collaboration across the aluminum industry to prioritize circularity and decarbonize the industry, achieving aluminum stewardship initiative ASI certification across our global footprint, remaining on the 2022 Dow Jones Sustainability Index, North America for the ninth year, receiving an A minus in the CDP'S climate change questionnaire in 2022, which recognizes the company's commitment to maintaining best practices in corporate climate citizenship through its net zero carbon emissions commitment, renewable electricity coverage and ongoing assessment of climate related risks and opportunities. Receiving a perfect rating on the human rights campaign's annual corporate equity equality index CEI, receiving a 2022 ranking of 90 on a 100 point scale on the 2022 disability equality index DEI, reflecting the meaningful progress the company has made in creating a workplace that enables employees with differing abilities to support its global mission and being recognized as the 2023 industry leader for the industrial good sector for the just capital and CNBC's just 100 top performing companies on ESG factors, including ethical leadership, cultivating and inclusive workplace, use of sustainable materials and carbon reduction. And our global team supported 2,800 non-profit organizations across 30 countries and contributed 30,000 volunteer hours across our communities. Drive for 10 continues to be our vision. We know who we are, we know what is important, and we know where we're going. Together, Ball will one, execute our strategy of preserving our planet and delivering value by creating circular aluminum packaging solutions for single use, limited use and refill, and providing exquisite environmental space science and defense technologies. Second, we will provide our employees and communities the resources and opportunities to succeed. Third, we will be our customers and suppliers partner of choice to enable organic growth, achieve sustainability goals, drive innovation and technology development. And four, we will be a disciplined capital allocator by unlocking value and efficiencies from existing operations with limited future capital investment. And in doing so, generate free cash flow, grow earnings and EVA dollars, and be good stewards of our cash flow to do leverage and return value to our fellow shareholders. Consistent with our commitment at our Investor Day and on our third quarter earnings call commentary in 2023, we can deliver our goal of 10% to 15% diluted earnings per share growth, including the Russian business sale headwind. The next quarter will remain choppy as we work through higher cost inventory, complete the optimization of our North and South American manufacturing footprint, ramp up our new Kettering U.K. and Pilsen, Czech Republic plants in EMEA. And last, the previously disclosed 2022 customer contract breach in South America. We'll benefit from the previously identified and executed SG&A actions while continuing to receive the PPI cost recovery throughout 2023, which overall will lead to a back half weighted year. During the Q&A, Scott and I will strive to provide additional clarity on the external environment and cadence for 2023 based on what we know today. We also continue to reiterate our investor field trip long-term goals for global volume growth, fueled by sustainability driven substrate mix shift, product category impact size innovation. Our global beverage teams have positioned our businesses to deliver the year and with an eye on the future. In 2023, an excluding Russia, we estimate in the range of 4% global volume growth for Ball with North America flat to slightly down, South America volume up mid to high single digits, EMEA volume up high single digits, and our other non-reportable business volumes up mid to high single digits, as new EMEA capacity ramps up and exiting 2023 exports from Saudi Arabia into EMEA wind down. Our global beverage businesses work will be complimented by our aerospace and aerosol businesses continued success. We appreciate the work being done across the organization and extend our well wishes to our employees, customers, suppliers, stakeholders, and everyone listening today. And with that, I'll turn it over to Scott. Scott Morrison: Thanks Dan. Full year 2022 comparable diluted earnings per share were $2.78 versus $3.49 in 2021 and fourth quarter comparable diluted earnings per share were $0.44 versus $0.97 in 2021. Full year sales were up due to the pass-through of higher aluminum prices and aerospace performance offset by currency translation and inflation in Europe and fourth quarter sales were lower largely due to the sale of our Russian businesses. As Dan mentioned, fourth quarter and to a large extent full year diluted earnings per share reflect higher aluminum aerosol results, lower corporate expense and a lower share count more than offset by higher interest expense, higher comparable effective tax rate, comparable operating earnings declined in North and South America and EMEA attributable to the sale of our Russian business, cost inflation and unfavorable earnings translation. I would like to take the opportunity to proactively address the year-over-year results in our North and Central America segment. 50% of the North and Central America operating earnings decline in the fourth quarter was driven by unfavorable swing in fourth quarter volumes versus 2021. We were up 5% in fourth quarter of 2021 and down 7% in the fourth quarter of 2022. And the other 50% reflects the confluence of unfavorable fixed cost absorption that was planned entering the fourth quarter, customer mix and the timing effect of high cost inventory ahead of customer sell-through. This larger than expected headwind is the byproduct of volume declines, aluminum price volatility, and our proactive decision to greatly reduce production to meet current market conditions during the quarter. The segments earnings are anticipated to rebound late in the first half of 2023 as high cost inventory sells-through and volume production stabilizes across the consolidated plant system. And after July, segment earnings will accelerate further as we enter the busy summer selling season and all of the contractual inflation recovery will be effective. As we explained on our third quarter earnings call, during 2021, we ramped up our metal purchases to meet what we expected would be strong 2022 growth in North America. We did this at a time of rising metal prices. And while we are largely protected from metal price changes in our P&L, it does impact the cash flow and the amount of metal payables. Earlier this year or earlier last year, when we saw that volumes would not materialize as expected in 2022, we began to reduce metal purchases. This also coincided with declining metal prices, which reduced the metal payables even further. And again, typically not a material P&L impact due to our inventory hedging. The net result is less billed in the accounts payable than originally planned. The result was a use of over $900 million in working capital for full year 2022. This will normalize in 2023 as both metal prices and our metal take should stabilize. As we sit here today, some key metrics to keep in mind. We ended 2022 in a solid liquidity position with over $500 million in cash and $1.5 billion in committed credit availability. 2023 CapEx will be in the range of $1.2 billion, driven by cash outflows related to prior year's projects. We will generate free cash flow in the range of $750 million in 2023 and initially focused on deleveraging. Our 2023 full year effective tax rate on comparable earnings will be in the range of 20% and full year 2023 interest expense will be in the range of $415 million. Full year 2023 corporate undistributed costs recorded in other non-reportable are expected to be around $90 million. Including the $86 million Russian operating earnings headwind, comparable operating earnings should increase over $200 million in full year 2023, comparable D&A will likely be in the range of $560 million. Recall that in 2022, we returned over $830 million to shareholders. And as we look forward, year-end 2023 net debt to comparable EBITDA is expected to trend towards 3.5 times, and we may want to drive it lower. Last week, Ball declared its quarterly cash dividend and an alignment with our Investor Day commentary after we navigate the first half of 2023, we'll address the path to resuming share repurchases. Rest assured, as fellow owners, we will manage the business through the lens of EVA and cash stewardship, and we will effectively manage our supply chain and customers in this current economic climate to secure the best cash, earnings and EVA outcome for our shareholders. We are happy to have 2022 behind us, and I'm excited and optimistic for 2023. And with that, I'll turn it back to you, Dan. Daniel Fisher: Thanks Scott. We will continue to be agile and decisive in the current environment. We must do what is right to ensure supply/demand balance, foster innovation and stimulate equitable sustainability policy which will further broaden the use of circular aluminum packaging solutions and provide continued fuel for our organic growth. In addition, our aerospace team will continue to partner with our customers to deliver world-class solutions for some of the world's greatest challenges and opportunities. Yes, 2022 was an unprecedented year in Ball's history, and I am encouraged about our ability to deliver the year with an eye on our future. Last week, Scott and I reviewed our 2023 operating plan with the Board and our business' ability to deliver on that plan is on track. We look forward to generating free cash flow achieving our long-term diluted EPS growth goal of 10% to 15%, deleveraging and returning value to shareholders. Thank you to everyone listening today. And with that, Carlos, we are ready for questions. Operator: Thank you, sir. [Operator Instructions] Our first question comes from the line of George Staphos with Bank of America. Please go ahead. George Staphos: Thank you. Hi, everyone. Good morning. Thanks for the details as it going. So, I want to thank you, first of all, for all the details in terms of what you're expecting in terms of performance cadence, particularly within North and Central America. Can you give us a bit more view in terms of what your underlying assumptions are in terms of your volumes as it will progress through the first half, the promotional activity and programs from your customers? What you're seeing in terms of innovation from customers right now? And if you were in our seats, as analysts and investors in your stock and we saw something not materializing or something developed that would undermine your expectations, what would it be? Daniel Fisher: Yeah. Thanks George. So, as we sit here today, the volumes in EMEA are in line heading right out of the gate in North and Central America. They're in line. I think we're a little soft right now in South America versus my commentary on where we think the year is going to end up. The biggest element that, I think, misunderstood, George, relative to our expectations on volume and why we're a little bit more bullish is aluminum prices have come off. But that doesn't mean that's necessarily the cost position for our customers. So, as they lap their head positions heading into the second quarter and the second half of the year, with the price increases that have gone into aluminum beverage packaging plus the actual costs coming off, there are significant profit pools that our customers are going to be able to step into. As I said, right out of the gate, we're a heck of a lot closer to what we anticipated in terms of volume. In North America, in particular, given the December falloff on all in consumer products that has changed the behavior patterns initially this year with a lot more price promotion and in cap. Will that continue for the balance of the year, I would suggest it will given the other backdrop that I gave you relative to costs. But the Europe continues to be incredibly strong. North America is off to a good start. I think there's a little bit of a wait and see in terms of the volatility in South America. But having said that, the real cost positions that some of our major customers down there will lap in terms of hedge positions will stimulate optimism in the second half of the year. The PPI, pass-through, we're in good shape. All of the cost actions and the footprint reductions that we've talked about are in good shape. Maybe I'll turn it over to Scott just for some of the positive signs relative to inflation and currency and some of the other things that are starting to move in our direction from a more stable environment. But 2023, as we sit here today, I'm feeling really confident about. Scott Morrison: I'll touch that and then why don't you touch innovation as part of this question. Yeah. George, I think why we feel optimistic is we are definitely seeing input costs moderate. And whether it's European energy is not going to be as bad as what people predicted. We're largely hedged in Europe, lower than where the spot price is today. That really squeezed us last year. We're getting all the PPI pass-through. We started to see freight rates, warehousing, lots of input cost moderating. And so, as we sit here today, we feel pretty good about kind of the cost input side being in a much more stable place. You kind of had long-term rates kind of peak. Short-term rates are still ticking up a little bit, and so we'll feel that in our interest expense for 2023, but we feel much better. Dan, why don't you talk about the innovation. Daniel Fisher: Yeah. Reflecting on your comment and question around innovation. Certainly, in the alcohol space, we continue to see a lot of innovation, which is a good thing because the combination of the innovation. Something is going to win. As we always say, George, we don't know what's going to win, something is going to win, but it also increases the pressure on the beer category to compete. Those two things will equate to improve volume outlook. So, we're helping to fuel the innovation, number one, but we also have a heck of a lot of customers that we sell beer cans. We'll benefit one way or another depending on who wins. George Staphos: Yeah. We'll be hoping for more consumption during the Super Bowl and other things. My other question, I'll turn it over. Thanks for all the color. So, you talked about reduced CapEx. That's certainly not a surprise, but that also includes your tail on spending for existing plants as they are coming up. I know it's not 2024, but is there a view you can give us on what CapEx might look like or what the delta might look like as we look out to 2024 and 2025. Thank you very much, guys. Scott Morrison: Sure. Most of the spend this year, George, that 1.2 are things that are already in flight. And as we've talked about we've got -- we'll have enough capital on the ground after completing these couple of things in Europe. We'll be in a pretty good spot. So, I would expect, although it's February 2 of 2023, I would expect in 2024, we'll see that drop further. Daniel Fisher: Yeah. The internal conversation, George, quite candidly, is we've spent the capital we need to grow into over the next two to three years. We could most likely spend at D&A levels in 2024 and 2025. If we have a reason to invest, it will be with a strategic customer, one or two. So, I think you'll start to see a much more disciplined level loaded capital approach relative to D&A spend moving forward. George Staphos: Thanks very much. Operator: Our next question comes from the line of Christopher Parkinson with Mizuho. Please go ahead. Christopher Parkinson: Great. Thank you so much. Can you just talk a little bit more about North American volumes, specifically how much you believe was more just industry sell-through, specific customer destocking? And anything idiosyncratic to Ball given the shutdown in Phoenix. Just anything to break down those three variables, would be very helpful. Thank you. Daniel Fisher: Yeah. I think, it was back half of the quarter, and it's no different than probably every other end consumer product in the retail shelves. Customers pushing price, pushed it too far, and there was price elasticity that kicked in. Beer was down the most. And I think what we're seeing is a return to more promotional activity here right out of the gate in Q1. So, I think there's recognition of what happened there in the last four to six weeks of the year, which is well publicized. Since we sell to everyone and every category and every channel, we were impacted by all of that. But I can tell you, there's a different behavioral patterns setting in relative to our customers and their promotional activity. So, I think this will normalize and we'll start to move into a more sustainable underpinning for growth moving forward. Christopher Parkinson: Got it. And just as a very quick follow-up on some of your Latin American commentary. Could you just very quickly just discuss the market dynamics? Obviously, it was pretty difficult during the first half with Carnival and everything else and then kind of easing that helpful. World Cup rebound, which didn't necessarily materialize. But just given the easy comps on 2022 and your comments on a preliminary basis for the beginning of the January, how do you think you believe the market will ultimately materialize throughout the balance of the year given the low comps just given the industry? And then also any perhaps just very quick comments on market share trends. Thank you so much. Daniel Fisher: Yeah. I will point you to the fact that the real cost that our customers have relative to aluminum cans has as much to do with our hedge positions. And in the second half of the year, cans will be the lowest cost substrate with the greatest profit pool, and that will give ample reason for our customers to push aluminum packaging at that point. You're right, the World Cup relative to the fourth quarter. We did see an uptick, but we didn't see the uptick that we anticipated. We knew that early in the quarter and we were reacting to that throughout the quarter. And we've got -- to your point, you got Carnival, you've got another a couple of things. You don't have a COVID environment like you did last year. So, there's optimism. It started off less favorable than we anticipated in South America, but it's only one month in, and I would -- and we're still bullish on things getting better in the back half of the year. Scott Morrison: I would just add on South America. In the first quarter last year, we will lap the customer breach that we had. So, that will we won't have that volume as we look forward. Christopher Parkinson: Thank you so much. Daniel Fisher: Thank you. Scott Morrison: Thank you. Operator: Next question from the line of Arun Viswanathan with RBC Capital Markets. Please go ahead. Arun Viswanathan: Great. Thanks for taking my questions. Good morning. Daniel Fisher: Sure. Good morning. Arun Viswanathan: Obviously, we've seen the destocking and some of the impact on the consumer from the inflation. And you mentioned that maybe that's turning a little bit now with the deflation [indiscernible] and customers of yours potentially in a position to promote the product. So, could you describe a little bit more what you're seeing on that front? And if you are seeing that -- do you expect -- what's kind of your growth and volume outlook for NA, North America this year, taking into account some of the closures you had last year as well. Thanks. Daniel Fisher: Yeah. As we sit here today, I'm encouraged by what we're seeing, and I'm not willing to come off of -- is certainly in the year that we're planning for flat. We're planning our earnings lift in our 10% to 15% EPS growth, up a flat North America until we're more convinced that the behaviors of the customers will continue to lean into promotion throughout the year. That's where we're landing right now. Arun Viswanathan: Okay. Maybe I can ask the question a little differently. If you think about the $400 million or so that you delivered in Q4 EBITDA, maybe there's a little bit of seasonality improvement in Q1 2023. Q4 2023, I imagine, could look like Q1 and then Q2 and Q3 would be up seasonally better. But still, that would fall short of $2 billion of EBITDA. Is that right? I mean, what are some of the levers you guys can pull to maybe get back to that level? Or is that maybe more like a 2024 and 2025 kind of range that we should be thinking about? Scott Morrison: Right. I think in the first quarter -- remember, a year ago in the first quarter, things were pretty good. Our volumes were up. It looks strong. We're not going to have that kind of... Daniel Fisher: And then we had Russia. Scott Morrison: And we had Russia. I mean -- but in North America, the volumes were good. So, we won't have -- we're going to have pretty tough comps in the first quarter. I think as we look forward then in the remaining quarters, we should see nice improvement year-over-year in each of the quarters in North America as we look forward. Arun Viswanathan: Okay. Great. And then just lastly, just on Europe, it sounded like Europe, you're somewhat a little bit more constructive on. Could you just describe that? I'm just trying to square that away with some of the inflation that they saw. Last year, you had some energy price inflation that was pretty stiff. So, is that what's also giving you some relief and potentially pushing some volume upside in Europe? Thanks. Daniel Fisher: Well, we had a really strong volume year in Europe, and it wasn't impacted despite the end consumer being impacted with less discretionary spend. The aluminum package did really well. And I think it's more of the aluminum package story and the resiliency of the can in Europe than it is discretionary spending levels that helped us. Your point is valid. So, the way our contracts will work. We'll be able to pass through a lot of the inflationary headwinds that we experienced in 2022, we'll pass that back in 2023. So, if we're -- if inflation moderates, which it has, even if it dissipates a bit, then you've got the underpinnings of volume that continues to grow at a high single digit rate. We've got capacity online -- coming online in two major facilities that will take advantage of that growth. And we should be able to make more money given the stability of the inflation and the fact that we're catching up in arrears on a lot of the inflationary pass-through. We're really excited about Europe for 2023. Scott Morrison: And just to your comment on EBITDA, I would expect -- I'd be disappointed if we didn't exceed $2 billion of EBITDA in 2023. Arun Viswanathan: Okay. Thanks. Operator: Next question from the line of Ghansham Panjabi with Baird. Please go ahead. Ghansham Panjabi: Yes. Good morning, everybody. Daniel Fisher: Morning. Scott Morrison: Morning. Ghansham Panjabi: So, Dan, just kind of building off your recent comments, you've been quite vocal about how higher beverage price pressure volumes along the supply chain, including at your end. How much do you think volumes were impacted in 2022 just based on the dynamic in Beverage North America? And as it relates to your comment on Europe resilience, was that also boosted in 2022 by just the comparison from the reopening across Europe relative to the prior year? And do you still see sort of that momentum continuing into 2023. Daniel Fisher: Yeah. I'm not entirely sure your first question, I could parse out that delta. I will tell you where it had an impact and where we'll be able to point to it is in the fact that it's really the promotional activity during the peak season that we didn't see any of last year. We still grew a little bit. I would probably go back to sort of that 2018, 2019 range of growth that we saw. And I would put that up against what we actually saw in 2022. And I would say that delta, just speaking out loud, is probably what we lost out on because of a lack of promotional activity in the peak season. So, maybe 1% to 2% during that period, which as you know, those -- that last billion cans is kind of where you make your money at the end of the year in a fixed cost business. So, yeah. Let's see. Right now, we're off to a good start relative to how the beer companies are promoting and how our customers are looking at what they need to do from -- elasticity curves have changed here in the last four to six weeks. Scott Morrison: But I would say in Europe, Ghansham, the sustainability push in Europe is not slowing down. And I think that will help. And we know how many can filling lines are going in Europe in the next couple of years. And so that's why I think we're bullish on the outlook for Europe. Daniel Fisher: I think the reopening, if anything, would have slowed our growth because the on-premise is overwhelmingly kegs. And so, despite that return to on-prem, we're still growing at the high single-digit rate. So, I continue to be bullish about what's happening in Europe. I've said this -- a number of times, and I think I've said this to you. I'm most bullish on Europe and the medium and the long-term. The short-term, obviously, they have to figure out energy that will impact every industry, every business. But for us, the sustainability underpinnings are tremendous and we're excited about these new assets that we're ramping up here in the first half of the year. Ghansham Panjabi: Okay. That's clear. And then for the second question, on the $200 million plus net price cost recovery guidance for 2023, how do you anticipate that will flow through the various beverage can segments? And then separately, did you give a working capital number for 2023 in terms of year-over-year movement? Scott Morrison: For 2023 working capital, we expect to get to that $750 million of free cash flow. We expect working capital to be a source around a little over $300 million. Daniel Fisher: And on the net cost pass-through and net recovery, it's overwhelmingly Europe and North America, and it's 60% North America, Scott, as he's nodding. And you'll see, in Europe, it comes in a more linear fashion over the quarters. And in North America, you'll see probably 60% of that coming in, in the second half of the year. July 1 is a big date for lapping one particular customer contract. Ghansham Panjabi: Fantastic. Thanks so much. Operator: Next question from the line of Anthony Pettinari with Citi. Please go ahead. Anthony Pettinari: Good morning. Daniel Fisher: Good morning. Anthony Pettinari: Just following up on Ghansham's last question, you reaffirmed the $200 million inflation recovery target. Scott, you mentioned inflation and energy coming in lower than expected, maybe in some cases materially. I'm just wondering if that's something that would cause you to raise that $200 million target or maybe it's too early in the year? Or do you think about sort of the benefits of those lower costs in a different way? Or is there a lag? Just wondering, how we should think about that. Daniel Fisher: I'll answer it, and then I'll let Scott give you more detailed answer. We prefer to be heroes in December than off start here. But Scott, go ahead. Scott Morrison: No, what I was going to say. It's only February 2. I mean, I think the optimism we're feeling is that it appears a lot of the trends are more helpful to us. And so, all those things will be beneficial, but we've got to see how volumes show up. That's the big wildcard. We're getting out of the gate in a more positive and constructive way. And we're building our plan on a more conservative basis but we'll see. But definitely, things seem to be turning into a little more tailwinds than headwinds that we had last year. Anthony Pettinari: Okay. That's helpful. And then just a few quick follow-ups on Latin America. With the footprint actions in Brazil, I don't know if there's kind of a finer point you can put on the cost savings there. And then maybe just where your operating rates will be in Brazil once that's completed? And I guess just one last one. If -- how you'd characterize the South American businesses ex Brazil, how they're doing? Daniel Fisher: Yeah. They're -- ex Brazil, they're quite resilient even with the inflation levels that you're seeing in Argentina. Our volume was up double-digits in the country year-over-year. So, it's incredibly resilient. Chile is performing well. Paraguay very well. Some of the other areas that we export into continue to perform well despite all of the geopolitical turbulence and the inflationary pressures you see in there, that's holding in, and the team is doing a wonderful job managing all of that -- all of those challenges. In Brazil, it's less about the cost savings relative to the expenditures. Obviously, labor is incredibly cheap there. So, yeah, you shutter a facility, you're not going to see near the savings that you would in Europe or in North America. But operating in a tighter supply/demand environment gives you the ability in your other facilities to keep them full and to run them full out and that generally benefits efficiency levels, reduces spoilage, all of the things that we're asking our plans to do and manage on a day-to-day basis. It gives them a a greater ability to do that, manage their quality aspects, stay in touch with customers, manage their supply chain more effectively. So that's where you see the savings and the benefits and the earnings profile being impacted in South America. Anthony Pettinari: Okay. that’s helpful. I will turn it over. Daniel Fisher: Thank you. Operator: Next question from the line of Adam Samuelson with Goldman Sachs. Please go ahead. Adam Samuelson: Hi. Thank you. Good morning, everyone. Daniel Fisher: Good morning. Adam Samuelson: Good morning. So, I guess, the first question is thinking about the demand side, maybe come back into North America. And Dan, our comments on -- January has had a better start, maybe seeing some pickup in promotional activity. Your comments seem to be a bit more focused on beer as a category versus CSD or elsewhere. And I'd love to just get your perspective on, are you seeing that change in customer behavior and promotional intensity across all categories? Or is it right now exclusive to beer. And corollary to that is, in discussions with customers across different beverage categories, is there any where you're seeing kind of a step-up in innovation and new product introduction that is giving you more optimism. Daniel Fisher: Yeah. I think it's a really good question. Beer is being more aggressive on the promotional activities because beer had the most precipitive drop-off in volume. So, it correlates and the magnitude of the volume declines in terms of the promotional activity. So, yes, you're seeing it across every single category because every single category was down in the last six weeks of the year. But it's certainly more pronounced, and that's probably a reason bias in my comments are relative to really -- a really nice uplift in beer right out of the gate. Some of it is attributed clearly to the Super Bowl as we're two weeks out. Now, you always see some promotion and some lift there, but it's more pronounced than that from a historical standpoint because of the volume fall off. And on innovation, I made this comment earlier on the question, but maybe I can dive into a little bit more. There's innovation in every category. But the most innovation, and this has been a consistent thematic here with the exception of that accordion effect relative to COVID where there were less SKUs just trying to get cans out the door. But as the large CPGs become beverage companies, they're leaning heavily into alcohol and mixers and those types of cocktails. And that's where innovation is really stemming. And you'll continue to see that for the foreseeable future. And those are most of what we expect to see here in 2023. There are other things obviously being worked all the time that are -- but what I know is planned for retail shelves is going to largely fall into cocktails and innovation and around that for the can. Adam Samuelson: Got it. And then, I appreciate you gave different segment level detail for the different can business. I'm not sure if I might have missed a view on the aerospace performance for the year and where you think that's tracking? Daniel Fisher: Yeah. So, for 2023, we will be -- we'll exceed 15% earnings growth. Actually, right now, as it's shaken out, we're north of 20%. So, we will see -- we're beginning to step into the backlog that we've won through the years and starting to see repeat builds. Our defense platform is executing really, really well. And I think we've navigated some choppiness in terms of supply chain in 2022 that has stabilized. So, as we sit here today, we should see a much improved operating earnings performance from our aerospace business. Adam Samuelson: Great. That’s helpful color. That’s all I have. Thank you. Operator: Next question from the line of Phil Ng with Jefferies. Please go ahead. Phil Ng: Hey, guys. Daniel Fisher: Hi, Phil. Phil Ng: Hi, guys. Good morning. Appreciating earnings will be a little tougher in the first quarter and likely down, do you have enough levers where earnings will be up year-over-year in 2Q. And I think you're targeting 10% to 15% earnings growth for 2023. Is that predicated on the 4% volume growth you were mentioning? Or is it more of a flattish backdrop like you previously guided to? Scott Morrison: I think we'll start to see momentum in the second quarter definitely. And you've got to really -- it depends on volumes. But as things kind of roll in, we get some PPI pickup here in the first quarter, but as Dan mentioned, the bigger chunk of it comes in the second half of the year. First quarter will definitely be softer year-over-year given some of the challenges. And we're still working through some of this inventory, both in North America and in South America. So that's where you'll see most of that impact. But then I would expect in North America, we'll see nice earnings improvement as we get into the second quarter and year-over-year as we look through the rest of the year. Daniel Fisher: You should see sequential improvement, right, 2Q, Q3, Q4 throughout the year, both with the PPI, the fixed cost savings. And keep in mind, 2Q from a volume standpoint was quite challenged in North America. And so, we get a little modicum of promotional activity there in the peak season then I think our plans, as Scott indicated. They're more on the conservative side. Where we would need volume in order to achieve our plans is Europe, because we are opening up two facilities there. But Europe has been the most resilient and the anchor customers are the most resilient that are going to be the tenants of those facilities. Phil Ng: But just to be clear guys, to hit your 10% to 15% earnings growth, you need 4% volume growth? Or is it more flat? Because I thought at the Analyst Day, the messaging was more flat, and we still can get to like 10% to 15%. Daniel Fisher: In North America, it's flat. Phil Ng: Okay. Daniel Fisher: Global is 4%, North America, it's flat. Mid- to high single digits in Europe; mid-single digits in South America. That's how we get to the 4%. Phil Ng: Okay. And then, on Latin America, in general, certainly Brazil has been really choppy and there's certainly some social unrest. What gives you confidence kind of deliver the mid to high single digit growth in 2023? It's just been a pretty tough environment for some time, especially Brazil. Any contractor up renewal in 2023, 2024 in that Brazilian market? Daniel Fisher: No. We have no open contracts heading into 2023 and 2024. The resiliency relative to South America is going to be the stabilization. First of all, lapping the contract for each in Q1. And then the actual cost position of our customers down there will have the aluminum package being the most cost advantaged product in Brazil, in particular, with that customer base. Phil Ng: Okay. Appreciate the color, guys. Operator: Next question from the line of Angel Castillo, Morgan Stanley. Please go ahead. Angel Castillo: Thanks for taking my question. And just a quick little near-term one. It seemed like that you talked about kind of full year volume growth across the different regions. Could you give us a similar walk for what that 1Q number is and how you're kind of thinking about across the regions? Daniel Fisher: I think 1Q in total will be down. Again, we had pretty good growth in Q1 of 2022. And so, I think we'll be slightly down Q1 in total. Yeah. I'd say in North America, you'll be flat. In South America, you'll be flat because of the customer breach, so we'll be lapping that. Flat would actually be growth on an apples-to-apples basis. So, we could be a little plus, a little minus there, and we'd expect to be that high single digits growth, mid to high single digits for Europe. That will be a linear number throughout the year. It'll -- you'll have more opportunity to grow in the back half because of the two facilities that are coming online, but you should see growth right out of the gate in Europe. And then flattish in the other two regions for the aforementioned customer breach and the market dynamics that exist right now in North America. Angel Castillo: Got it. That's very helpful. And then just curious, as you think about the ranges that you gave for the full year, I guess, maybe I'm reading too much into this, but South America, Europe and other seem to be a little bit of a wider range, whereas North America flat. I think if I kind of heard it correctly, flat to slightly down. It seems to be a little bit narrower, but this also seems to be an area or the region where we've seen maybe some of the more or bigger deterioration throughout the last few quarters. So, you kind of mentioned liquor and cocktails as one area of potential growth in promotional activity. But how much of this -- I guess, what gives you comfort to have a narrow range there as you think about the year progressing? Is some of that cocktail liquor related volume, the degree of visibility? Is it there? Is things contracted? Like I guess, yeah, I just want to give you comfort in that kind of narrow range. Daniel Fisher: Yeah. Well, I mean, flattish. That's not the narrowest range we've ever given, but I appreciate the question. I would say optimism to tighten the range in North America is that we plan on a much more conservative environment. And one thing that I think is important to underpin this business and this industry in particular. We're generally the first to go into the recession and we're generally the first to come out. And what we need is to see what happened over the last four to six weeks was the elasticity curve on volume and price for our customers has been broken. And now you're seeing volume come off. That means you have to return to some level of promotional activity, that's good for the can. So, for North America, in particular, we've got a big business where with all of the customers. It gives us some foothold in understanding the market dynamics. The contracts are secured. We know what we have heading into the year. Could it be up a little, down a little, yes. That's not going to have an impact on whether or not we can deliver our 10% to 15% EPS target. Scott Morrison: I would also say, I mean, it's -- it's been more volatile in the last few years, no doubt. Historically, North America has been more predictable. South America has always had a wider range just because volumes can move around a lot. Those economies are more volatile. And so, you could see much -- you could see outpace growth at times. And you could see bigger declines at times. So, South America has just always been a more volatile region. And despite to Dan's comments, I mean, you would think with 100% inflation in Argentina that would be a big negative for cans, but cans grew double digits last year. So, it's a little tougher to predict in a place like that. Angel Castillo: That's very helpful. And if I may just kind of a quick little follow-up on that. I think one of the areas that historically in recession has helped is the customer pays [ph] back maybe how much they're spending on-prem, some of the off-prem starts to revise for cans. And have we seen some of that already? Or is that still a potential upside as we think about the near-term and the customer? Daniel Fisher: Yeah. I haven't -- we haven't seen that particularly. But you're exactly right. Those are the early signs and signals that were -- that's when you know you're on the uplift coming out. And we've seen the first stages of promotional activity starting. We haven't seen them steering on-prem versus off-prem. But that usually is the next lever to pull. You're exactly right. Angel Castillo: Thank you so much. Operator: Next question from the line of Mike Roxland with Truist. Please go ahead. Mike Roxland: Thanks Dan and Scott. Thanks for taking my questions. Daniel Fisher: Sure, Mike. Mike Roxland: Just one quick follow-up on -- Dan mentioned the weakness in beer. And obviously, you experienced it firsthand. You also saw that in the Nielsen data with beer volumes being very challenged late last year. How are you thinking about your exposure to beer at this juncture? Is it still a core end market? And given what's occurred in beer, are there any opportunities for you to diversify your mix? Daniel Fisher: Yeah. There's always an opportunity. We're constantly looking at our portfolio and our customers. And how we look at it, Michael. It's a great question. So, I look at brand owners and brand builders. And the other thing is, we may be talking to or we may be having -- we may have a portfolio of historical beer customers, but those historical beer customers are moving aggressively into other things from an innovation standpoint. So, within the portfolio of some of our customers, we like the fact that they're acquiring products that they're innovating products and that they're pushing new innovations. And so -- you're right. I mean, there is volume ascribed to beer and there's big volume ascribed to beer, and that's always going to be an underpinning of us within a volume business. But as that beer SKUs to other drinks, and other alcohol profiles, it will be a trade-off within their portfolio. We're selling them the cans. The label they want to put on it doesn't matter to us. We just want to be with the winners on the brand side. Mike Roxland: Got it. That makes sense. And then just quickly, can you comment on any additional portfolio rationalizations or temporary closures and maybe contemplating. I think last quarter, you indicated that you've taken all the actions you needed to with respect to plant closures. But then there was an industry publication came out with some details, I guess, in December about temporary closures in Brazil. I think you highlighted it broadly in your press release as well. So, first question, are those closures in Brazil temporary or permanent? And then second, quickly, just given the volatility in Brazil over time, and certainly worse [ph] in the last few years. Can you walk us through the investment case as to why investing in Brazil makes sense or really doesn't at this point? Daniel Fisher: Yeah. So, I would look at the regions, depending on what's permanent and what's temporary, a lot of times, labor laws dictate that. And I would tell you, in North America and South America, we've always managed our supply chain. So, we'll curtail lines. We'll have temporary shutdowns. That's more reflective of the conditions with which we are managing our South America plant. I think it was mischaracterized as to what we were doing with that. We -- whether we -- it's a temporary closure for now, given the existing conditions and economic conditions in Brazil. It's no different in the analysis, right? It's EVA. We do have a larger risk profile and hurdle rate in places that are more volatile like Brazil. So that's already embedded. So, it's going to be the length of the contract, the substantive nature and the economic underpinnings of that contract and whether or not we believe we can generate EVA. I don't know, Scott, if there's anything to add on Brazil. Scott Morrison: I mean, Brazil over a long period of time has been a really good place to invest. The can share has grown in all of the markets that we've operated. It does tend to be a more volatile region. And so you have to live with that volatility. But over the long run, it's been a great place to invest and we expect it to be a really good place going forward. It is not without its challenges, but that's part of why you can make some pretty good money there, too. Mike Roxland: Got it. Thanks for the color and good luck in 2023. Daniel Fisher: Thank you, Mike. Operator: Next question from the line of Adam Josephson with KeyBanc. Please go ahead. Adam Josephson: Thanks. Dan and Scott, good morning. Hope you all well. Daniel Fisher: Thanks. Good morning. Adam Josephson: Good morning, Dan. Dan, one on back to North America. So, your long-term target is 2% to 4%. Last year, you were down a touch. You're seeing the beer companies promote more. It sounds like you're encouraged about what you're seeing in January, yet you're expecting flattish shipments, so that would be two years in a row of flattish shipments compared to that long-term target of 2% to 4%. I guess, just given the low base, and the promotional activity you're seeing, why are you not expecting more growth in North America, particularly given your long-term target? I'm just trying to understand if there's something I'm missing. Daniel Fisher: No, I just think it's earlier in the year, Adam. And we've seen a couple of weeks' worth of promotion. That's not enough for us to get overly excited that we'll return to some modicum of growth. And candidly, the inflationary, but all of the things relative to a soft economy are still present. I think the can will do well. I think you'll see trajectory in the second half of the year. That will be helpful with these promotions continue. I'd love to come back to you in six months and say, hey, we're right back on track with the 2% to 4%, but as we sit here today, I don't have enough data points to say that that's going to happen in 2023. Scott Morrison: But over time, we're still kind of in the post-COVID adjustment period, I think. And 2023 will kind of -- I think 2023 will kind of be the end of that. And I would expect those historical rates that we saw before COVID with sustainability tailwinds and all of those things, those aren't going away. Those are going to continue. And so that's why we think, longer term those growth rates make sense, but we're still kind of in a period where we're getting through COVID and now through rapid inflation. And we're starting to see things settle down and that gives us more optimism, I think. Adam Josephson: Just one follow-up to that, which is I know you said two plants. I think that was about 8% of your North American capacity middle of last year. So, you were down 0.3%, you're expecting to be flat this year. Do you think the market grew by more than what you were -- did you underperform the market last year and do you expect to underperform the market this year? Can you just give me any sense of how you think you're performing in terms of North American volumes versus the broader market? Daniel Fisher: Yeah. I think we have -- it's a great question, probably a tick underperformance relative to the market because of the size of our beer portfolio, and that was the most distressed category last year. So that certainly had a knock-on effect. The good news is if that area reverts back to a more positive promotional activity, then we should be the beneficiaries of that shift moving forward. Scott Morrison: And remember, market -- the impact in the market is going to be dependent on who's bringing up capacity, who's turned on new capacity. In Europe, this year, we'll probably outperform the market, because we have facilities coming online. So, those kind of things can happen quarter-to-quarter, year-over-year. We don't focus on market share, we focus really on, to Dan's point, being with the right customers, the customers that are innovative, the customers that are growing, that are using the can. We focus more on that versus market share. Adam Josephson: Right. No, I get that. So, if you end up flattish, would it be unreasonable to think that the market would be up 1-ish just using that [indiscernible]? Daniel Fisher: Yeah. I think that's right. I think that's right, Adam. I think you're thinking about it the right way. Yeah. Adam Josephson: Okay. Thanks. And Scott, just on the working capital. Can you -- I think Ghansham asked about it that you're expecting $300 million [ph] source. Is that -- can you just help me with where that's coming from, just compared to what you dealt with last year? Is it probably from any particular place in particular, across the board improvements that you're expecting? Scott Morrison: Mostly inventory, Adam. We still have too much inventory, and that's what we need to work off. So, we've got a lot of cash, if you will, sitting in our inventory. And so, as we roll that off we'll be able to generate a lot of cash from it. That's the biggest chunk. Adam Josephson: Got it. Thanks. And just beyond that so if that working capital normalizes and the CapEx ends up equivalent to D&A. Are those the -- are there any other swing factors that you would point out as we think about free cash flow beyond 2023, lower CapEx. Daniel Fisher: Yeah. And we've got it. Adam Josephson: Okay. Daniel Fisher: We have really good line of sight, Adam, into -- it's both raw material and finished goods. We've got really good line of sight. We're working that every single day right now. So, we're confident about that source of cash this year. Adam Josephson: Thanks Dan. Daniel Fisher: Carlos, we'll take one more. Operator: All right, sir. Last question from the line of Kyle White with Deutsche Bank. Please go ahead. Kyle White: Hey, good morning. Thanks for squeeze me in here. I just wanted to better understand kind of the bridge to 2023 earnings and I believe the few hundred million improvement in comparable operating earnings that you called out. You have the $200 million of net inflation recovery. You have the $150 million in cost savings, partially offset by, call it, $85 million from the Russia business. But that's still about $250 million to $265 million of improvement before we have any volume growth. I guess what are some of the major headwinds here that I might be missing in the bridge? Daniel Fisher: And the rise in interest rate -- interest expense? Kyle White: All right. Got it. And then on the $200 million inflation recovery that you guys talked about, it seems like it's mostly... Scott Morrison: Going back to your past comments though, our while inflation is moderating, the base cost -- so energy costs in 2023 are going to be higher than they were in 2022. We're just passing them along, but that -- there are things that have -- are built into our plan that are negatives from a cost perspective. And so that's why you got to -- I can't just talk about all the positives, there's always some that go the other way. And so, the balance of those is how I get to my number. Kyle White: Right. And I guess, I was assuming that the net inflation was trying to net for maybe the incremental inflation that you're seeing, but maybe that's not the right way to look at it. Scott Morrison: It's really the net of what we expect. Kyle White: Okay. Scott Morrison: But that again that's just inflation, right? Kyle White: Yeah. Makes sense. Sticking on that point. So, it seems like a large portion of that recovery, the $200 million inflation recovery is in North America, but it doesn't happen just given the contractual time until July. Scott Morrison: Correct. Kyle White: I know it's early days. But you have a sense… Scott Morrison: Yeah. 60% of it is in North America, the other 40% is in Europe. Yeah. Kyle White: Okay. I appreciate that. That's very helpful. Do you -- I know it's early days, but do you have a sense of how much of that benefit could actually continue to flow into 2024 in North America? Scott Morrison: It stays. It doesn't go back the other way, it stays. Kyle White: Right. I am just asking… Scott Morrison: The perfect scenario for us is you get a pretty sizable PPI increase and your costs actually go down. Daniel Fisher: Effectively, what would happen to your question, you're thinking about it the right way. So, you pass-through inflation a year in arrears. If inflation moderates or dissipates, you hold on to that margin expansion for the following year. It was just the opposite of that the past two years for us. But if things come up in energy prices, et cetera, et cetera, come up after we put through the existing cost, then that would be carried into parts of 2024. You're right. Kyle White: Got it. Sounds good. Well, everything looks much better from a price cost standpoint going into this year versus the challenging last year. So, good luck with the balance of the year. Daniel Fisher: Thank you very much. Scott Morrison: I was glad to be done with 2022 and excited about 2023. End of Q&A: Daniel Fisher: Well said, Carlos, with that, we'll close the call and look forward to talking to you at the end of the first quarter. We are excited for 2023. And we've got the teams and the plans in place to execute. So, we'll be following up and iterating on those plans as we look forward to the next time we get together. Thanks. Operator: That concludes today's call. We thank you for your participation and ask you to please disconnect your lines.

Operator: Greetings and welcome to the Ball Corporation 3Q 2022 Earnings Conference Call. During the presentation, all participants will be in a listen-only mode. Later we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded Thursday, November 3, 2022. It is now my pleasure to turn the conference over to Dan Fisher, Chief Executive Officer. Please go ahead. Dan Fisher: Thank you. Good morning, everyone. This is Ball Corporation's conference call regarding the company's third quarter 2022 results. The information provided during this call will contain forward-looking statements. Actual results or outcomes may differ materially from those that may be expressed or implied. Some factors that could cause the results or outcomes to differ are in the company's latest 10-K, and in other company SEC filings as well as company news releases. If you do not already have our earnings release, it is available on our website at ball.com. Information regarding the use of non-GAAP financial measures may also be found in the Notes section of today's earnings release. Historical financial results for the divested Russian operations will continue to be reflected in the Beverage Packaging EMEA segment. See Note 1, Business Segment Information, for additional information about the sale agreement and a quarterly breakout of Russia's historical sales and operating earnings. The release also includes a table summarizing business consolidation and other activities as well as a reconciliation of comparable operating earnings and diluted earnings per share calculations. Joining me on the call today is Scott Morrison, our Executive Vice President and CFO. I'll provide some brief business performance commentary. Scott will discuss key financial metrics, and then we will finish up with closing comments and Q&A. Let me begin by thanking those of you who attended our Biennial Investor Field Trip in late September. It was great spending time with many of you in-person. We sincerely appreciate you taking time to meet our team to listen to Ball's unwavering strategy for our agile aluminum packaging portfolio and our aerospace technology security, science and sustainability solutions; to learn from our continued transparency on macroeconomic dynamics, impacting our industry; and to engage with us on the actions we have taken to deliver improved results, cash generation and EVA in 2023 and beyond. For those of you that could not attend a transcript of the management briefing and slides as well as contact information for our Investor Relations team are available on ball.com/investors under the Presentations tab. In Q3, we have successfully divested the Russian beverage can business, executed on our previously disclosed company-wide cost-out plan; further oriented our business plan to serve our customers' needs from an optimized, lower-cost footprint and reported our third quarter results. Scott and I will strive to provide additional clarity on the 2022 baseline, and bridge to 2023 based on what we know today in the fourth quarter and beyond. Our year-to-date and third quarter comparable net earnings reflect resilient global demand for our products, offset by the historic rise in inflation and interest rates and headwinds associated with the sale of our Russian operations and earnings translation. Relative to resilient trends – excuse me, relative to resilient demand trends and to be efficient with our business commentary, here is a summary of our year-to-date and third quarter global and regional shipments. Global beverage can shipments, excluding Russia, increased 3.1% year-to-date and 5.7% in the third quarter. North America beverage can segment shipments increased 1.9% year-to-date and 2.5% in the third quarter. EMEA beverage can segment shipments, excluding Russia, increased 7.8% year-to-date and 8.3% in the third quarter. South America beverage can segment shipments decreased 7.2% year-to-date and increased 5.2% in the third quarter. And with the continuing support of EMEA demand, our other non-reportable beverage can shipments increased 48.1% year-to-date and 46.7% in the third quarter. Our global extruded aluminum bottle and aerosol business continues to benefit from new refillable, reusable bottle offerings, including our recent alliance with Boomerang and other water brands and higher recycled content aluminum bottles for personal care products. Shipments in this segment increased 11.2% year-to-date and 12.2% in the third quarter. Other recent activities include our global beverage business continuing construction on two facilities in EMEA; our North American team successfully completing effects bargaining associated with our August announcement to permanently cease production in our Phoenix, Arizona and St. Paul, Minnesota facilities in fourth quarter 2022 and first quarter of 2023, respectively. Our aluminum cups team introducing 9-ounce and 12-ounce cup sizes at retail and in stadium venues. Our aerospace team delivering solid program execution; a robust backlog of $3 billion and won-not-booked backlog of $4.6 billion; and the scheduled mid-November launch of the Ball-built Ozone Mapping Profiler Suite instrument aboard the joint NASA and NOAA, JPSS-2 Earth observation satellite. And on the sustainability and community front, favorable substrate mix shift is continuing across Ball's aluminum product businesses. Our aluminum aerosol facilities achieved ASI certification, and our Velim, Czech Republic plant received an award from the Red Cross, recognizing their response to the Ukraine refugee crisis. Thank you again to our employees across the globe for supporting their communities and each other. In summary, our customers continue to lean on aluminum as their package of choice. We also reiterate our Investor Day global volume growth opportunity. Near-term volumes may be pressured in certain regions as everyday consumers are feeling the pinch of inflation. Our global beverage teams have positioned their businesses for slower growth in the fourth quarter, inclusive of preparing for temporary actions to achieve year-end inventory goals, keeping supply/demand tight and preparing for optimal financial improvement in 2023. Our global beverage businesses work will be complemented by our aerospace and aerosol businesses' continued success. We appreciate the work being done across the organization and extend our well wishes to our employees, customers, suppliers, stakeholders and everyone listening today. With that, I'll turn it over to Scott. Scott Morrison: Thanks, Dan. Year-to-date 2022 comparable diluted earnings per share were $2.34 versus $2.52 in 2021, and third quarter comparable diluted earnings per share were $0.75 versus $0.94 in 2021. Year-to-date and third quarter sales were up due to the pass-through of higher aluminum prices, higher volumes with improved price mix and higher aerospace performance, partially offset by currency translation and inflation in Europe. Comparable year-to-date and third quarter diluted earnings per share reflects strong results in North America and aerospace, and a lower share count, offset by higher interest expense, higher comparable effective tax rate, comparable operating earnings declines in EMEA attributable to the sale of our Russian business, cost inflation and unfavorable earnings translation and lower comparable operating earnings in South America continued to be driven by regional customer mix. I'd like to take the opportunity to proactively address working capital and why cash flow will be better next year. During 2021, we ramped up our metal purchases to meet what we expected would be strong 2022 growth in North America. We did this at a time of rising metal prices. And while we are protected for metal price changes in our P&L due to our effective inventory hedging program, it does impact the cash flow and the amount of metal payables. Earlier this year when we saw the vibes would not materialize as expected in 2022, we began to reduce metal purchases. This also coincided with declining metal prices, which reduced the metal payables even further. Again, no P&L impact due to Ball's effective inventory hedging. The net result is less billed in the accounts payable than originally planned. The end result will be a use of around $800 million in working capital for full year 2022. This will normalize next year as both metal prices and our take should stabilize. We are focusing our attention on generating cash as we move forward. Other reasons why cash flow will be better next year include $500 million less in CapEx. The expectation of meaningfully less pension contributions needed, $90 million less in cash outflow for incentive compensation due to lower incentive comp payments from 2022 and we'll have much less working capital pressure and also increasing our focus on selling terms. I will give you more direction during our fourth quarter earnings call once all of our planning is complete. As we sit here today and following the completion of our Russian business sale, some key metrics to keep in mind for 2022. We ended the quarter in a solid liquidity position with $500 million in cash and $1.5 billion in committed credit availability. Our full year effective tax rate on comparable earnings will be in the range of 20%. Full year interest expense will be in the range of $315 million and full year corporate undistributed costs in other non-reportable are still expected to be slightly above a $100 million. CapEx will finish the year in the range of $1.7 billion. Given year-to-date results in the key metrics cited Q4 shipment trends, estimated inflation and euro translation headwinds and including the sale of our Russian business, we will likely end the year with operating earnings in the range of 8% less than last year's, full year 2021 comparable earnings of $1.585 billion. And full year 2022 comparable D&A likely to be in the range of $540 million. As a result, yearend net debt to comparable EBITDA is expected to remain at current levels, which is higher than where we would like it to be and we are have prioritized debt reduction in the near term as we move into 2023. Last week, Ball declared its quarterly cash dividend and in alignment with our Investor Day commentary after we navigate fourth quarter and early 2023, we'll address the path to resuming share repurchases. Rest assured, as fellow owners, we will manage the business through the lens of EVA and cash stewardship and we'll effectively manage our supply chain and customers in this current economic climate to secure the best cash earnings and EVA outcome for our shareholders. I'm looking forward to exiting 2022 and I'm excited for 2023. With that, I'll turn it back to you Dan. Dan Fisher: Thanks, Scott. I appreciate your help as always. And my best Scott Morrison impersonation minus the expletives, the world is in a really challenged state, but we're not geopolitical unrest rapidly changing business conditions and unprecedented macroeconomic trends are unsettling. Here is what I know. During 2022 and since assuming the role of CEO, we have endeavored to be transparent and decisive. In doing so, it has led to an uncomfortable, yet necessary set of actions, which have impacted colleagues and communities. Yes, 2022 has been an unprecedented time and at Ball we are going forward with what we know, our Drive for 10 strategy and EVA discipline. In addition, our well capitalized footprint is serving resilient demand for our products and technologies. We will benefit from contractual pass through of inflationary costs, the cost out actions already implemented or nearing completion, a more conservative short term view of volume growth, the focus on cash, and we have the best team to navigate, change, unlock value and beyond 2022, achieve our long-term diluted earnings per share growth goal of 10% to 15%, inclusive of the divested Russian operating earnings headwind. Thank you to everyone listening today and with that we're ready for questions. Operator: Thank you. [Operator Instructions] The first question comes from George Staphos, Bank of America. Please go ahead. George Staphos: Thank you very much. Hi everyone. Good morning. Thanks for all the details and for taking my questions. I guess you've given us some of the outlook for fourth quarter Scott, and we appreciate that. Trying to adjust for Russia in Europe, should we expect more or less the same type of year-on-year trajectory across the other segments? How should we consider whatever sort of inventory reduction you may need to see? And how that'll hit the segments, we would guess it'd be North American in particular. If you had a couple of quick thoughts there. And then I a couple of followings after that. Scott Morrison: Yes, I think most of the inventory, kind of the absorption hit will take on will be in North America as we adjust inventories down. Through nine months we saw North American can shipments increase just under 2%, kind of full year, we think it's going to be flattish. In Europe, Russia will be the big drag taking out roughly $30 million of earnings; inflation is a bit higher in Europe than – we'll see a comparable inflation impact in fourth quarter as we did in third quarter, which is about $10 million. And we've got some start-up costs too as we ramp up Kettering and the Czech Republic. So that will be a bit of a drag. When we look at – aerospace had an incredible fourth quarter last year that won't repeat. It would be more normalized this year. And then in South America we're not quite seeing the bump from World Cup that we had expected. And so I think they will finish the year. We thought we could get back to even, and that probably won't be the case when we look at South American volumes. George Staphos: Thanks for that Scott. Second question I had for you is, is there any update on the net commercial and price cost outlook that you initially relate to us at the Analyst Day as you look to 2023? Has anything moved of significance that you would want to relay as we're again trying to build and bridge to 2023 off the 2022 base that you've given us? Scott Morrison: Sure. I think we're having the most progress in Europe for 2023. The team has done a remarkable job, they have been doing that since the outset of the year. Obviously inflation has continued to go up, George. George Staphos: Yes. Scott Morrison: But we continue to go back and continue to work those. So I think we're in a really good spot to not only benefit from our contractual pass through that's already built in to our contracts that have the most meaningful impact obviously in Europe, western Europe, and in North America. And on an ongoing basis, I think, you are hearing this from other participants in the industry if there are things that are extraordinary in the contract, especially from a supply chain standpoint, those are going to have to be passed through immediately. And so that's the stance we will be taking moving forward. We're not going to continue to chase inflation of an extraordinary nature, specifically Europe energy prices. George Staphos: Okay. So maybe Dan, I recognize it's tough to say on a live mic, but should we assume those pluses and minuses are kind of balancing and therefore the outlook you gave us remains the outlook into 2023 on that front? Dan Fisher: Yes, I think, that's exactly right, George. George Staphos: Okay. Dan Fisher: I think as we sit here today, and Scott will give more context to this, we're steering based on the baseline we just gave you on 2022 to the high end of our 10% to 15% for next year as we sit here today. George Staphos: Okay. Thanks for that. And then my last one, you talk about a near term more conservative view on growth. And looking back over the last four or five quarters and as you are hearing from your customers going forward, what are they saying about their volume expectations into 2023 and maybe a little bit past that? And what are they saying in terms of cans relative to some of the new growth initiatives that are out there, whether it's non alcoholics or ready to drink? And then in turn, how are you, for lack of a better term, haircutting that commentary in terms of your growth outlook, not just near-term, not just fourth quarter, but playing with real capital dollars over the next two, three years? Thank you, guys, and good luck in the quarter. Scott Morrison: Thanks. Yes. Dan Fisher: Yes. Thanks, George. I think it’s a good news, bad news story for North America. I mean the reality is what we’re seeing, and I’ll give you the most recent data that we have, kind of the prior 12 weeks. Total consumption is down – total literage consumption is down in the U.S. The good news is that when we look at that relative to the can, the can is significantly stronger than tetra glass and plastic combined. So our declines are muted compared to what everyone else is experiencing in terms of substrate mix. The areas that continue to grow, it’s probably easier to talk about what’s still growing, and we have nice exposure to those areas. Our energy is continuing to grow in the prior 12 weeks. Import beer continues to grow, cider, F&Bs continue to grow, and craft beer is flat. Everything else is a modicum of decline. And if I were to bracket the two big buckets right now, this is just can volume. Non-alcoholic, down about 1%; and total alcohol, down a couple percent. You can double and triple those declines for the other packages and substrate mix. So feeling really bullish about the circularity story for the long-term. But inflation is clearly hitting the end consumer right now. And that is absolutely in our thinking. And Scott, maybe you want to talk just at a high level in terms of 2023 and some of the higher-level assumptions you have. But the one thing I will say that gives me room for optimism is we are a recession-proof business, a resistant business. What we’ve been experiencing is inflation. As we transition into the recession piece, there’s a very good likelihood that the can starts to get promoted. And I think with higher credit card, interest rate increases on folks that have interest-only mortgages, that will – and that’s what we’ve heard from our customers. They said, at some point, the can will get promoted. But as long as the elasticity curve remained somewhat strong with the price increases, that’s what we’ve experienced to date. And I think we’re kind of on the precipice here, George. We’re not counting on upside, but we’re right on the precipice of seeing a decline, and that decline manifesting potentially in a better outlook for cans. Scott Morrison: Yes. I would just add, George, I have a real sense of optimism as we move forward from where we’re at right now. Last quarter, you probably could hear the challenges and the tough actions we needed to take in my voice. Well, we’ve done all those. We’ve taken the actions on plant closures. We’ve produced SG&A meaningfully. We’re scrutinizing all of our investments to a greater degree as we move forward. And all of these actions will help us ensure that we have improved results in 2023 in a more – off a more modest base of growth that we’re expecting. So we see nice improvement across all of our business units moving into next year. The contractual pass-throughs on inflation will help, and the cost-out actions will definitely help. So as we sit here today, I feel really good about us moving into 2023. George Staphos: Thank you very much, guys. Good luck. Dan Fisher: Thank you. Operator: Thank you. The next question comes from Adam Samuelson of Goldman Sachs. Please go ahead. Adam Samuelson: Yes. Thank you. Good morning, everyone. Dan Fisher: Good morning. Adam Samuelson: So want to continue on the discussion on North America and demand. And you just gave some comments on promotions, and that’s obviously being important into 2023. I guess given the capacity actions that you’ve taken, but also maybe the capacity utilization that you didn’t fully take advantage of earlier in the year in your own system. Just to clarify, do you – can Ball North America can shipments be up in 2023 from where you sit today? Dan Fisher: Oh, yes. Yes, we have ample dry powder. Keep in mind, the big investments that we’ve made, we’re still on the journey of increasing the efficiency curve and the start-up range. And so yes, we can grow mid-single digits here for the next couple of years in North America without any additional investments. Scott Morrison: We’re just building a plan that’s more conservative, and we’ll have the ability to toggle up if our customers need that demand. Adam Samuelson: Just are you actually planning to be your shipments to be up mid-single digits next year? Or that’s what you have the capability for? I just want to clarify that point. Scott Morrison: No. That’s what we have the capability for. We’re planning for flattish to slight growth. Adam Samuelson: Got it. Okay. That’s really helpful. And then I guess as a follow-up in Europe. Obviously, there’s a lot of noise in the accounting with Russia, but we stripped that out. Where do you think you are today on price discussions with customers and recouping some of the energy and other inflation that you’ve been absorbing and kind of visibility that, that can maybe potentially flip to a tailwind at some point in 2023? Scott Morrison: Yes. Well, on energy specifically, we’re in a pretty good spot. We’ve got 95% of the energy that we can hedge has been hedged. So while energy will go up next year, we feel like we’re in a pretty good position to control how much it goes up, and we’re having active dialogue with our customers on that front of them absorbing those costs because we’re not going to absorb them. Adam Samuelson: Okay. Great. That’s all. Really helpful. I’ll pass it on. Thanks. Operator: Thank you. The next question comes from Ghansham Panjabi of Baird. Please go ahead. Ghansham Panjabi: Hey guys, good morning. Dan Fisher: Good morning. Ghansham Panjabi: Good morning. I guess, first off, on your comments on metal sourcing in 2021. For 2022, obviously, prices have changed between then and now. Did you secure that additional metal specifically for customers based on contracts? Because I’m trying to understand why customers would pay you yesterday’s prices in context of lower prices today for metal. Scott Morrison: No. We hedge – so we hedge our inventory, Ghansham. So we don’t take P&L hit. So we bring in inventory with an expectation of when it gets sold, and we hedge that price risk. So it’s not – that’s why it’s not showing up in our P&L. It’s just really a cash flow hit. Ghansham Panjabi: Got it. And you said, just to clarify, $800 million hit in terms of working capital year-over-year for 2022? And then if so, what is the base-case expectation for free cash flow this year? And what kind of reversal could we see next year on working capital? Scott Morrison: No. Well, I mean, if you take $800 million use of working capital and the CapEx we’re spending, we’ll have – it will be – we’ll have negative free cash flow of over $1 billion. Next year, we expect the working capital element to be greatly reduced. And we expect – that what’s where I was talking, we’re going to reduce our CapEx. We have reduced incentive comp payments that go out next year. We have – we don’t need to fund our pension plans. Our pensions are in really good shape. So there’s a bunch of other elements of cash flow that we’ll be able to generate next year versus what we experienced this year. And we’ll have more earnings. Ghansham Panjabi: Yes. Good point. Thank you. Operator: Thank you. The next question comes from Mike Leithead of Barclays. Please go ahead. Mike Leithead: Great. Thanks. Appreciate it. First question, I just wanted to ask about Europe or EMEA. Obviously, you guys are still posting pretty strong growth there. Relatedly, I would think the inflation pain there for the consumer is much worse just given where the economy is. So can you maybe just talk through kind of what you’re seeing there, and maybe some of the resilience relative to the inflation paying that? Dan Fisher: Yes. One of the things that we’ve seen, I commented earlier in the call, but we have seen a shift from on-prem to off-prem, which has benefited the can. So they’re – the end consumer is – absolutely, their energy bills and their homes, right, are impacting their discretionary spend. And they are already making choices. The areas of strength continue to be beer and continue to be energy drinks, which we have a really nice portfolio there. So we may be benefiting a little bit from mix. But the end consumer has been quite resilient to this point. We are seeing the beginnings of shifts, but those shifts are manifesting in more resiliency and more of a shift toward the can. Obviously, I think the anecdotes I can bring you from Europe are folks aren’t as concerned about this winter as they are about next winter with the natural gas reserves. We’ll see how that manifests in terms of additional inflationary pressure moving forward. Mike Leithead: Great. Thank you. And then just briefly, Scott, I just wanted to clarify on your cash flow answer to Ghansham just now. I know it’s hard to – who knows where metal prices will be next year. But just as we sit here today, this year, we’re going to have an $800 million hit to cash from working capital. Should working capital be a source of cash? And roughly, how much do you think you could get back next year, as all else equal? Scott Morrison: Well, we actually – if you go back to 2021, we had a big source. So it started in 2021, and we got the benefit of bringing in more metal and the metal payables being higher in 2021. So we saw that benefit in 2021. We’re giving that back essentially in 2022. So that’s why, I think next year, we’re not going to build a plan based upon that much volume growth. So we won’t – our metal shipments will be more measurable, if you will, more controllable. And so we don’t expect this kind of swing from a working capital standpoint. We see it much more balanced… Mike Leithead: Fair enough. Got it. Thank you. Operator: Thank you. The next question comes from Christopher Parkinson of Mizuho. Please go ahead. Christopher Parkinson: Hello. Thank you for taking the question. Just to circle back on your – the plan – the initial planning for 2023, you just hit on Europe and hit on some comments in North America. What about just Latin America just given, obviously, some of the headwinds that were incurred during the first half of the year, the World Cup being in the fourth quarter, a normalized Carnival and some like a more customer-specific issues? So if you could just hit on that – the region holistically, it would be very helpful. Thank you. Dan Fisher: Sure. I think, as Scott already indicated, if you’re thinking about sort of high-level volume assumptions as we sit here today, we’re thinking flattish in North and Central America. We think we’ll be in that kind of 4% to 6% range in both South America and in Europe. South America, keep in mind that we walked from a major customer in the beginning of 2021. And so our comps begin to be much easier, if you will, relative to that dislocation in – excuse me, in 2022, they become – we lapse that in Q1 of 2023. So a like-for-like business, we should be growing in that 4% to 6%. And we don’t anticipate any more customer dislocations heading into that – the year. Brazil beer consumption has continued to get better throughout the year. The can is continuing to win. And I think what you’ll see is a much more stable South America region in general, with the exception of Argentina is always a wildcard. So we expect a modicum of growth everywhere inclusive of Brazil heading into next year. Christopher Parkinson: Got it. And just given all the noise and the kind of the puts and takes on some of the various substrates and demand categories, could you just comment on your overall wins in terms of aluminum cans for new launches? I mean, is that still relatively in line with what you’ve been discussing over the last few analyst days? Just – and specifically, if you could hit it on plastic and containerboard, that would be quite helpful. Thank you. Dan Fisher: Yes. So a real quick trip around the world. The can is – we have – we’re underpenetrated in Europe, the lowest substrate penetration of the three big regions with the most regulation mounting in Central and Western Europe here heading into 2025 with some producer responsibility bills. The most pent-up demand in terms of new can filling lines is in Europe because of those regulations and because of the steer toward aluminum. In South America, we’re still winning. Ex-Brazil, there’s still a huge shift from returnable glass into aluminum, and aluminum continues to win. And in North America, the new product introductions are still coming out in cans. The thing that’s muting that, as I said earlier in the call, is overall consumption is down. And so that’s really the biggest issue relative to – there’s nothing that’s changed in our circularity story or the fundamentals underlying our belief in the medium to long-term. But the inflation has caught up to the end consumer, and we’re seeing less consumption across the board in North America. Christopher Parkinson: Thank you very much. Dan Fisher: Thank you. Operator: Thank you. The next question comes from Mike Roxland of Truist. Please go ahead. Mike Roxland: Thank, Dan, Scott and appreciate the questions. Just – first off, just you mentioned, Dan, that shipments grew 2.5% in North and Central America. Is there any way to parse that between the two regions? And really, what I’m – yes. So between – like what did North America grow in 3Q versus Central America? And the reason I’m asking is because you just bear in your commentary, you mentioned slower beer demand. I think some of your peers have called that out as well. And some of the beer companies themselves in their earnings calls have noted volume weakness given consumer inflation. So given that beer is a pretty important end market for you in North America, just trying to figure out what North America did standalone versus the combined North and Central America? Dan Fisher: Yes. I think overall, similar level of resiliency in both. The things that were advantaged for us are probably our energy mix in our portfolio, which is stronger; our import beer mix in our portfolio, which is probably stronger. So those are the two things that have given us some underpinnings. And our strategic partners in both the non-alcohol space and the alcohol space are winning. So those three things have given us probably a modicum of growth that’s in line or a little ahead of what the industry has. Not a great deal of difference between North America and Mexico, Central America. Mike Roxland: Got it. Okay. Perfect. Thank you. And then just wanted to get your perspective on what you think it’s going to take ultimately for the industry to have better volumes. Is it matter – is it just a matter of the fillers and beverage companies realizing they need to drive increased throughput, as you mentioned earlier? Is it a matter of just ultimately seeing payer inflation that should drive better – hopefully, drive better consumer spending? What do you think ultimately gets you over the hump despite seeing those better volumes? Dan Fisher: Yes. It’s a great question. Again, when I look at the substrate mix, the can is winning, the problem is overall literage is declining. So there is clearly pressure on the end consumer relative to inflation, credit card debt, raising interest rates. There has to be some level of stability in the economy. And then I think we transition back to what we saw prior to the heightened inflation pressures. It is true that when we’ve entered recessions historically, the can has been promoted because there has been a shift from on-prem into more off-prem. And we haven’t seen that yet. So I think there’s been a lot of pent-up enthusiasm because we haven’t been able to go out over the last couple of years that people are spending their money, and they’re in the on-premise channel. That feels as if it’s beginning to shift and the most recent data here in the one and the four-week data. That will help the can, but fundamentally, I think a return to a normalized inflation and interest rate environment provides consumer confidence, and then the can wins on the circularity notes. Scott Morrison: I think also the thing that will help is aluminum is off almost $2,000 from its high. And so while all the – while most input costs for our customers are going up, the reality is the actual aluminum has gone down. And so that gives them the ability – they took a lot of price this past year, and that gives them the ability to do a little more price promotion and not give up margin because aluminum has come down so much. So, I think that’s a positive. Mike Roxland: Got it. No, thank you. That’s very helpful. Good luck for the balance of the year. Scott Morrison: Thank you. Operator: Thank you. The next question comes from Phil Ng of Jefferies. Please go ahead. Phil Ng: Hey guys. Scott, at your Investor Day, I think you called out about $200 million of net pricing benefit, which accounts for inflation from some of the PPI escalators. Is that still a good way to think about it just because inflation is obviously pretty dynamic here? And I think, Dan, you mentioned how you’re making pretty good progress on renegotiating pricing and trying to recoup some of the inflation you’re seeing in Europe. Any color on how much of an uplift that could be next year? Scott Morrison: Well, I think on the PPI faster, I think it’s going to be greater than $200 million across all the different segments, because inflation has run pretty hot this year. We’re starting to see input inflation moderate, which would be helpful. So, we should get a lift on the pass-through to kind of catch up some of the pain we’ve had to feel. This year, it’s been mostly in Europe with energy and inflation. Last year, it was North America. So, I think we feel pretty good about those contracts work. We did get the price pass-through in North America and in Europe that we expected this year. The problem is we offset in Europe by currency and by more inflation. We’ll get a lot of that inflation back next year. Dan Fisher: The $200 million, Phil – the $200 million is really not mutually exclusive to the ongoing conversations we’re having with our customers. Those ongoing conversations, I’d look at it this way. If we continue to see surprises in terms of increased inflation, especially in energy with surcharges coming from our supply base, those will be passed through directly. And we weren’t behaving in that manner here over the last 18 months to 24 months. So, what I envision is the number that Scott gave you, we’re able to hold to that number next year as opposed to seeing it potentially being eroded like it was this year. Phil Ng: Okay. But the right way to think about it, Dan, would be the $200 million plus, any incremental good work you’re doing on renegotiating stuff in Europe, right? So – and that accounts for the inflation you’re seeing today, correct? Dan Fisher: Yes. I would say the ongoing work with customer contracts enables us to see the $200 million flow-through, not have it be muted like it was this year. Phil Ng: Okay. $200 million is still a good way to think about it. That’s great. And then throughout the supply chain, there’s obviously been pretty meaningful destocking. And some of your peers have called that out. They saw a big drop-off in September. So from what you can tell based on order trends into October, November, your customer base, do you have a sense that, Dan, if that’s largely flushed out at this point? And then, Scott, I think you were calling about – calling out potentially curtailing production in the fourth quarter to kind of flush out your inventory. Should we assume that it’s going to be largely behind you? Or there’s going to be some hangover effect starting next year from an earnings perspective as you kind of work that down? Scott Morrison: No. Our plan is to take – to get our inventories in line by the end of this year so that we go into next year in a cleaner, more balanced position, so not to have the impact next year. Phil Ng: Okay. On the customer level? Dan Fisher: Yes. I think what we’re seeing right now, Phil, is the end consumer is consuming less. And so I think that is – I understand the question in and around destocking. I do think that a lot of those filled goods are now out in retail and they’re being promo-ed. What we need is for the end consumer to start picking up the pace of consumption on the can and for those promos to continue, and then it turns into a positive. We haven’t seen that yet. Phil Ng: Okay. And just one last one for me. Remind us how the promotion cycle usually works in North America. I believe it’s heavier during the summertime. So if your customers do come back and want to step up promotional activity to kind of drive demand in North America, when would the earliest pocket be? Dan Fisher: You see a small amount for the Super Bowl, a real small amount. And then you see Memorial Day, Fourth of July, Labor Day. And two weeks prior to each one of those events is when you typically see it. And if you get lucky, you might get some around the holiday period, which – we’re not planning on that thinking – yes, you got it. Operator: Thank you. The next question comes from Angel Castillo of Morgan Stanley. Please go ahead. Angel Castillo: Hi thanks for taking my question. I just was hoping we could unpack fourth quarter a little bit better. I guess just want to make sure I’m understanding correctly. So the bridge that was given for operating income seems to suggest, and correct me if I’m wrong, roughly kind of $307 million for the quarter. Could you just give us a sense for how you’re thinking about that by the kind of segments and regions? And also included in that, what your volume expectations are embedded within that? Scott Morrison: I’m sorry, what was the number you gave me? Angel Castillo: $307 million. I just basically took 8% off of the [indiscernible] and then less what you’ve done year-to-date? Scott Morrison: Oh, okay. Yes. I mean the things I mentioned were absorption in North America and lower volumes than last year. We had a tough comp from last year. We grew 5% last year. We’ve grown 2% year-to-date through nine months. We expect that to be flattish for the year. South America, we had the loss of the customer from last year. That will be a bit of a drag. Europe, obviously, we sold our Russia business. That generated – would have generated in the – it will be in the Q. It’s in the press release, about $30 million of profitability in the fourth quarter. Inflation is running kind of similar to where it was in the third quarter, which is about a $10 million drag, and we’ll have some start-up costs related to our new facilities. Beverage packaging others should still be strong as we continue to import into Europe to meet demand. And our aerospace business had a record fourth quarter last year, which likely won’t repeat. So, I think your – where you’re landing is directionally correct. Angel Castillo: And then I just wanted to also revisit the prior question on destocking a little bit more. So, I guess there was a couple of customers that may be mentioned some potential kind of pull-forward ahead of pricing initiatives in October. So, can you just talk a little bit more about kind of what you’ve seen from a September standpoint in terms of shipments in North America and whether there was any kind of pull-forward that you kind of anticipate to be unwinding in the fourth quarter? Scott Morrison: No. We didn’t see any of that in September. What we’re seeing through the last four weeks, in particular, is further in consumer decline in the overall beverage consumption. So, we didn’t feel the impacts of a September pull-forward. And we’re monitoring very closely the promotional activity here in the fourth quarter, because as the end consumers stop buying beverages across the board in any setting and if there’s a shift from on-prem to off-prem they can typically will be promoted more and there will be reason for upset. We have not seem that through the first four weeks of the quarter. Angel Castillo: Thank you. Dan Fisher: Thank you. Operator: Thank you. The next question comes from Anthony Pettinari for Citi. Please go ahead. Anthony Pettinari: Good morning. Scott Morrison: Hi. Good morning. Anthony Pettinari: Just wondering equity earnings I think were negative in the quarter after being up I think mid-single digits in 1Q and 2Q. Can you just give some color on what drove that, and maybe just remind us what's in that line after the Metalpack sale? Scott Morrison: Yes. We had unusually some kind of one-time good guys in the second quarter and then those kind of reversed in the third quarter. So we'll get – we'll have more normalized equity earnings as we look to the fourth quarter. And the things that are in there are mainly are JVs with Rocky Mountain Metal Container, Guatemala and Vietnam. Anthony Pettinari: Okay. That's... Scott Morrison: That was kind of spread across those three basically. Anthony Pettinari: Got it. Got it. And then the $150 million in fixed and variable cost reductions that you outlined for 2023, I'm just wondering if there's any finer point you can put around maybe the cadence of that kind of savings flow through and just generally when we think about kind of quarterly comps next year and obviously a lot of moving pieces, any reason why you'd expect earnings growth might be more first half weighted or second half weighted just overall thoughts there? Scott Morrison: I mean, it should come relatively evenly, but we won't get all of the benefit in the first quarters. As Dan mentioned one of the plant closures doesn't happen until the first quarter and some of the folks that are departing won't depart until the first quarter. So we'll start to see more of that benefit kind of Q2 going forward, but it should run relatively evenly. Dan Fisher: And was your question specific to the $150 million or were you looking for phasing of earnings? Anthony Pettinari: I guess both. I mean the $150 million makes sense, but yes. Dan Fisher: Yes. So the inflation pass through mechanism, the net 200 that Scott talked about that will come through in contractual chunks. So January 1st you'll have some, April 1st you'll have some, July 1st you'll have some, and then we will have an FX drag of $15 million to $20 million mostly in the first four to five months of the year. Anthony Pettinari: Okay. That's super helpful. I'll turn it over. Operator: Thank you. The next question comes in Adam Josephson of KeyBanc. Please go ahead Unidentified Analyst: Dan, its Scott. Good morning. Thanks very much for taking my questions, I appreciate it. Dan Fisher: Good morning. Unidentified Analyst: Just one clarification just on the full year guidance. So I think, Scott, you said North America's shipments flattish for the year; forgive me if I missed this. Does that imply about down five to six in the fourth quarter, and if so is that about consistent with what you see in thus far in October? Scott Morrison: No, I don't think it'll be down that much. Unidentified Analyst: Okay. Closer to 4-ish, I guess, okay. Scott Morrison: Not down that much. I mean we could play that game, but I don't think it'll be down that much. Unidentified Analyst: Okay. Just because I know 4Q is typically a lighter quarter volume wise, so... Scott Morrison: We had a really good quarter last year. We grew like 5% last year; it's not going to grow like that. Unidentified Analyst: Got it. Okay. And if I think about just flattish shipments this year and then similar next year, can you just compare that to '09, I think organically you were down a bit because I think you bought the four plants from AB InBev. If memory serves such that shipments were down a bit organically. Dan, could you just compare what you're expecting this year and next to what you saw in '09? I know you said the one difference is that there's a lot more inflation now than was the case then or any other differences that you would point to now versus then? Scott Morrison: Yes. In '09 we were actually up a couple percent and at that's after being down in '08 like 5%. So usually, I mean in my 2022 years here if you get a short-term hit on volumes, it comes back pretty quickly, I mean, the can is pretty resilient. To Dan's point on all the benefits that the can has none of that has changed and so you might see things in a particular quarter given pressures on the consumer or pricing actions on the customer, those things tend to balance out over time. And so I think we're in that period right now where it is more – a little more uncertain, a little more volatile, but we still believe in our customers still believe, which is even more important in the benefits of the can. And so we feel really good about as we get into – this year's definitely been choppier and we feel really good about moving into 2023. Dan Fisher: Yes. I think, Adam, your question is a really good one in that. What we've talked about in the question that you're posing really has to do with the recession. Well it really hasn't – we haven't really had it. We haven't been in a recession. We've had inflation and interest rates rising, and we've got customers that haven't really lost volume on the top line and so they've continued to leverage the price mechanism. If we shift into a recession that's when the cans resiliency shows up. It doesn't necessarily show up in 50-year inflationary times depending on the promotional activity and the pricing from our customers. So there's – I do what you may be hearing a little bit more optimistic tone from Scott and I because I think we're heading there and in consumer's behavioral patterns and what we're seeing in the data is they will prefer the can in that environment. Unidentified Analyst: Yes. No, understood. And I appreciate that Dan, and it just, one other one along similar lines with the benefit of hindsight growth shot up in 2019 with sparkling water and then hard seltzer and that was the one, it was the biggest growth year in a very long time for the industry and then the pandemic hit and that kind of skewed everything and it was unclear how much was specific to beverage cans, how much was the pandemic inflating demand for everything. And we've seen that deflate now. So with the benefit of hindsight, how much of the, the growth over the past call three years would you attribute to the pandemic versus growth in hard seltzer or sparkling water, et cetera? And how is that informing your view of what you think the long-term rate of growth is? Dan Fisher: I can remember in our 2018 Investor Day, Adam that we talked about the growth then, we were already starting to see it in 2018. So it was well before the pandemic. It wasn't just 2019. So we started to see the growth, we started to see really the sustainability stories start playing out in North America. And you had new product introductions went from 30% five years before to 70% at that time in 2018. Now we're seeing it even higher and so definitely there was some distortions because of COVID and there's some distortions like unwinding COVID, but that, and now we've got inflation and some other things to deal with. But that's where I think long-term all the benefits of the can still exist. And so that's why we feel very confident and very comfortable about how we're moving forward into 2023. Scott Morrison: Yes. Adam, I think at a really high level we're paying attention to a basket of countries like the U.S. that pushed significant stimulus into their economies. And if you go back a handful of years, we talked about this in the Investor Day. I mean, there's been 20 billion to 25 billion of additional cans added to the U.S. market over about a three to four year period. That can volume isn't going backwards. So it's there now what's the growth rate on top of that is a very fair question. We believe because of the circularity story because this volume has stuck that we're poised for really nice lift kind of in that medium and long-term range, but we just need a modicum of stability in the economy. And we've seen that in places like Chili was up 25% in 2021, they haven't gone backwards. So they’ve maintained that can penetration on the shelves. And I think the underpinnings of the circularity story are the biggest reason why those have stuck. So that’s – I mean I’m much more in the half-glass-full standpoint than I am that this thing is going to go a different direction. Unidentified Analyst: Right. Can half full, Dan. Dan Fisher: Yes. Yes, good call. Fair enough. Unidentified Analyst: Take care. Thanks so much. Dan Fisher: Okay, thank you. Operator: Thank you. The next question comes from Kyle White, Deutsche Bank. Please go ahead. Kyle White: Hi, good morning. Thanks for taking the question. I go into North America. Can you just talk about the competitive dynamics there in that market just given the change in near-term demand profile? Have you seen any changes on the competitive environment? Or is this more of a kind of a wait-and-see as contracts come up for renewal? Dan Fisher: There aren’t a great deal of contracts that come up for renewal each year. I think we believe that we’ve got somewhere in the neighborhood of 80% to 85% of our contracts locked in for the next handful of years. So we’re in a really good spot. There are always contracts that come up that volume could move on the fringes, but it’s such an efficient market and so much has to do with freight that I don’t see a lot of movement in the marketplace. I think it’s a very rational marketplace. We’re continuing to lead, we believe, that supply-demand will continue to be tight for the foreseeable future given the growth prospects of the business. And so I’m feeling good that the pricing and the terms that we’ve locked in here over the last couple of years will maintain. So we’re feeling like it’s an increasingly disciplined market. Things will remain tight, and everyone should benefit from that moving forward. Kyle White: Got it. That sounds good. And then on the Russia sale, can you just talk about the call option there? What led you to that decision? Any kind of range of what exercise price is relative to the sale price? Scott Morrison: Yes. The call option was – it was a great business that we didn’t really want to sell. And we would love to get back there if Russia ever normalizes their behavior, leadership and activities. So we have a call option that starts in year three and goes through year 10. And it depends – the price depends on the performance of that business at the time we exercise the option. So we thought it was absolutely the best outcome we could achieve by getting $530 million in cash into our bank accounts and then have an option to return if things normalize and we’re able to do that. But obviously, right now, that’s not terribly likely in the next few years. Kyle White: Got it. Thank you. I’ll turn it over. Operator: Thank you. The next question comes from Arun Viswanathan from RBC Capital Markets. Please go ahead. Arun Viswanathan: Great. Thanks for taking my question. So I guess, first on beverage cans. I just wanted to understand the contracting process a little bit more. Are your customers essentially signing up for volume? Or is it a range of volumes? Or is it min/max? Just curious because there was kind of a swift slowdown, and our understanding was that most customers were kind of required to take certain levels of volume. So could you just flesh that out for us a little bit? Thanks. Scott Morrison: I mean it’s a range of things. There is no one contract structure. So it’s everything from fixed volumes with probably some range, 5% range, up or down. There are some that are fixed for a period of time over a multiyear period. So if you’re short in one period, you’re going to need to make it up in a different period. So it really – the old requirements kind of contracts are becoming fewer and fewer, and that’s where you were more exposed to volatility. But those are becoming fewer as time goes on. We’ve gotten rid of a lot of those requirements-based contracts, which caused more of the volatility. But you’re never going to have something that is 100%. We’re usually talking around the last few percent of volume, and that can matter. Arun Viswanathan: Got it. And then on aerospace, our understanding is that 2022 is kind of a transition year to the next, say two or three year range backlog. Is that right? And so maybe 2023 to 2025, do you expect kind of 10% to 15% EBIT growth for that business? Or how should we think about aerospace? Dan Fisher: Over that period, yes. And north of 15% next year is what we’re looking at. Arun Viswanathan: Thanks. Dan Fisher: We’ll do one more question. Operator: Thank you. The question comes from Mark Wilde of Bank of Montreal. Please go ahead. Mark Wilde: Great. Hi, Dan. Hi, Scott. Thanks. Dan Fisher: Hi. Sure. Mark Wilde: I just wondered, Dan, any updates on thoughts on CapEx and expansion plans as we move toward 2023? Scott Morrison: Yes. I mean, I think as we go into 2023, we expect CapEx to drop by about $0.5 billion. And I would say, given growth rates we see in the near term, I mean we’re going to finish building in Czech Republic, and those have really good contracts supporting those investments. And we obviously have enough capital in North America for the next couple of years. So I don’t think we need to do anything meaningful on that front. So I would expect it to come down again in 2024. And – we’re a fairly big build on the aerospace side, and that’s starting to come down too. Mark Wilde: Okay. So that sounds pretty similar to what you were talking about six weeks ago at Investor Day. Scott Morrison: Yes. Yes, exactly. Correct. Mark Wilde: Okay. Dan, just one other one, and I know this is a little bit challenging on a public conference call, but it does sound like you’ve taken a different tacks in terms of cost pass-through over in Europe. And so as best you’re able to, can you give us some sense of that? Because it sounds like there’s going to be no eating of energy costs going forward. Dan Fisher: We are – it’s a nuance. I mean, I think we’re getting out ahead of the risk profile that Europe will present for the next 12 to 18 months. That’s how I would characterize it. We understand fully that they’re going to have to get their act together in the European continent in terms of transitioning to a more secure and stable energy source. And our supply base feels it first, then we feel that the end consumer feels it, our customers feel it. And if the costs go up, they’re going to need to be passed through to the end consumer straight away. There won’t be a lag on these things. And I think that’s the momentum that – and the understanding and the equilibrium that the industry needs to have. And we’re happy to take the leadership position on that. Mark Wilde: Okay, very good. Thanks a lot guys. Good luck. Dan Fisher: Thank you. Oh, thanks, everybody, for... Operator: I’ll turn the call back over – for his closing remarks. Dan Fisher: Yes. Thanks, everybody, for participating. We’re really encouraged in upbeat heading into 2023. We’ll navigate the choppy environment here in the next 60, 90 days, and look forward to hearing you on the next day and seeing you at the next conference call. Operator: Thank you. This does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines. Thank you and have a good day.

Operator: Greetings and welcome to the Ball Corporation 2Q 2022 Earnings Call. [Operator Instructions]. As a reminder, this conference is being recorded Thursday, August 4, 2022. I would now like to turn the conference over to Dan Fisher, CEO. Please go ahead. Daniel Fisher: Thank you, Chris, and good morning, everyone. This is Ball Corporation's conference call regarding the company's second quarter 2022 results. The information provided during this call will contain forward-looking statements. Actual results or outcomes may differ materially from those that may be expressed or implied. Some factors that could cause the results or outcomes to differ are in the company's latest 10-K and in other company SEC filings as well as company news releases. If you do not already have our earnings release, it is available on our website at ball.com. Information regarding the use of non-GAAP financial measures may also be found in the Notes section of today's earnings release. The release also includes a table summarizing business consolidation and other activities as well as a reconciliation of comparable operating earnings and diluted earnings per share calculations. Joining me on the call today is Scott Morrison, our Executive Vice President and CFO. I'll provide some introductory remarks and business performance commentary. Scott will discuss key financial metrics, and then we will finish up with closing comments and Q&A. Ball delivered stable second quarter comparable operating results amid ongoing inflation, earnings translation headwinds and regional demand volatility, largely driven by North American customers' retail price-over-volume actions. Global beverage can volumes increased 3.3% in the quarter. Aluminum aerosol volumes increased 11.3%. And we, along with NASA and industry partners, celebrated the successful initial images from the James Webb Space Telescope. We are actively managing the company to meet the world where it is at by rephasing capital and rebasing costs while also enabling packaging innovation, aluminum supply chains and sustainability initiatives to support long-term growth and significant returns to shareholders. The Russian invasion in Ukraine has had a significant impact on the global business environment. In March, Ball announced that it has suspended future investments in Russia and is also pursuing the sale of its Russian operations. As we noted in today's earnings release, during the quarter, a noncash, long-lived asset impairment for the Russian operations was recorded in business consolidation and other activities. Note 1 in today's earnings release contains additional information about the Russia business. The company continues to support humanitarian aid, and we thank our colleagues near the war zone for housing refugees as well as supporting each other in volunteer efforts in their local communities. Recent highlights and activities include: our global beverage business continuing construction on 2 new facilities in EMEA, announcing a new facility in Peru and rephasing previously announced North American capital projects to balance the near-term effects of higher retail prices for canned beverages versus long-term growth for sustainable aluminum packaging. Our North America business, pivoting its cost and capital focus to align with the near-term volume deceleration and localized supply-demand imbalances in certain North American markets, including today's announcement to cease production in our Phoenix, Arizona and St. Paul, Minnesota facilities, while also enabling multiple aluminum supply chain projects to domesticate and broaden sustainable aluminum coil supply and recycling capability across the U.S. Our EMEA volume, growing 7.7%, with operating earnings up 4% year-over-year despite $9 million of foreign currency translation headwinds, while navigating an ongoing volatile geopolitical environment across its operating footprint. Our South America business, managing through 2.9% volume declines due to unfavorable regional customer, product mix, diluting the volume strength that remains across the other South American countries, where we are deploying capital to enable growth. Our global aluminum aerosol team, introducing next-gen real aluminum bottles for new categories and increasing aerosol personal care shipments. Our aluminum cups team, growing our cups presence at stadiums and venues. Our aerospace team, completing a critical design review for the NOAA Space Weather Follow-on Lagrange 1 spacecraft. And on the sustainability front, Ball joined the World Economic Forum's First Movers Coalition, encouraging value chain collaboration to drive decarbonization in the aluminum sector; our partnership to introduce electric trucks with Fleetmaster, Volvo in Fort Worth, Texas. As we indicated on prior calls and looking forward, our global businesses are absorbing non-aluminum inflationary headwinds and experiencing additional price/cost squeeze in advance of contractual cost recovery. We also have a responsibility to do the hard things first by controlling what we can control. And all corporate functions are actively addressing their SG&A costs, and the operations are taking the opportunity to become more efficient. In EMEA, our team is working hard to mitigate ongoing inflationary headwinds through commercial cost recovery, hedging and energy efficiency and renewable energy initiatives. In North America, additional contractual price escalators based on PPI will phase in starting on July 1, and our work to address localized supply-demand imbalances will deliver fixed cost savings over the near term. It is also important to understand in this environment that cans continue to win in the fastest-growing beverage categories, and underlying demand for aluminum packaging continues to be resilient despite retail shelf price increases by our customers ranging as high as 20%. Early indications are that North American customers will continue to emphasize price over volume during the second half of 2022. And in South America, demand trends should strengthen due to the timing of World Cup and a seasonally strong fourth quarter. Incorporating year-to-date shipments, we anticipate global volume growth in the range of 5% for the full year 2022. In summary, our global beverage team is preparing for additional demand volatility, inflation and regional customer anomalies given global economic conditions. Our customers are continuing to lean on the can as their package of choice. And over the long term, our sustainability-driven growth thesis and long-term 4% to 6% global growth CAGR for aluminum beverage cans remains intact. Carbonated soft drinks, North American import beer, energy drinks and new categories like ready-to-drink cocktails also continue to grow in cans. We are controlling the things we can control. In addition, we are focused on executing at a high level, rebasing the cost structure, delivering high-quality cans and enabling global supply chains through alliances and investments in long-term contracts. We appreciate the work being done across the organization and ask for your support as we navigate necessary actions. And with that, I'll turn it over to Scott. Scott Morrison: Thanks, Dan. Second quarter 2022 comparable diluted earnings per share were $0.82 versus $0.86 in 2021. Second quarter 2022 included $0.02 impact of unfavorable earnings translation. Second quarter sales were up due to the pass-through of higher aluminum prices, higher volumes with improved price/mix and higher aerospace performance, partially offset by currency translation. Comparable second quarter diluted earnings per share reflects strong results in EMEA, other metal beverage and aerospace and a lower share count, offset by comparable operating earnings declines in North America and South America, higher interest expense, higher comparable effective tax rate and unfavorable earnings translation. In June, the company completed new credit facilities maturing in 2027. Ball's balance sheet remains very healthy with ample liquidity and flexibility. As we sit here today and inclusive of operating Russia for the rest of 2022, some key additional key metrics to keep in mind. Our full year effective tax rate on comparable earnings is expected to be in the range of 19%. Full year interest expense will be in the range of $290 million. Year-end net debt to comparable EBITDA is expected to be below current levels, and full year corporate undistributed costs recorded in other nonreportable is expected to be in the range of $110 million. At this time, and given our earlier announcements about exiting Russia and other plant capital decisions, we expect total CapEx to be in the range of $1.7 billion in 2022 and 2023 CapEx to be down meaningfully from 2022 levels. The earnings impact of volume deceleration and a higher use of working capital have led to lower-than-anticipated operating cash flow. We now anticipate returning approximately $1 billion to shareholders in the form of share buybacks and dividends in 2022 and accelerated returns to higher levels in 2023. Rest assured, Ball will be good stewards of our cash as fellow owners. And through the lens of EVA discipline, we will manage the business effectively, partner with our supply chain and customers effectively and, when necessary, pull levers available to secure the best outcome for our shareholders. We look forward to addressing our plans to grow the business, enable the supply chain, expand innovation and increase returns and answer questions why Ball now and beyond at our September investor field trip. With that, I'll turn it back to you, Dan. Daniel Fisher: Thanks, Scott. Our Drive for 10 vision will continue to serve as our guide. We know who we are, we know where we're going, and we know what is important. Great companies showcase the resiliency and discipline in uncertain economic times. And the company has an actionable plan to address costs, capital and improve returns. By providing actionable intelligence through our aerospace business, sustainable solutions through our aluminum packaging businesses and honoring our disciplined capital allocation approach, our shareholders will be rewarded, and we will be doing our part to preserve our planet. While our ability to achieve our long-term diluted earnings per share growth goal of 10% to 15% in 2022 has been impeded by the recent deceleration in volume growth, earnings translation headwinds, ongoing inflation and the pending sale of our Russian business, our earnings, cash flow and EVA trajectories are in very good shape for 2023 and beyond. We are rebasing our cost structure in preparation for the Russia business sale and to meet the world where it's at today. We continue to focus on increasing returns on capital deployed and to further enable growth across our global aluminum packaging and the aerospace and technologies portfolio. We are uniquely positioned to serve the decadal shift that will favor our packages in aerospace technologies. We look forward to continuing our journey and returning value to our shareholders. We extend our well wishes to our employees, customers, suppliers, stakeholders and everyone listening today. We look forward to discussing more about Ball now and beyond by highlighting our long-term growth plans and global management bench at our September 2022 Investor Day. And with that, Chris, we're ready for questions. Operator: [Operator Instructions]. And the first question is from the line of Ghansham Panjabi with Baird. Ghansham Panjabi: Maybe just starting off with North America. Dan, maybe just give us a bit more color in terms of which categories in particular showed deceleration? And then how are you approaching the cessation that you called out in terms of production in Arizona and Minnesota? Is this temporary idling of capacity? If so, how long? Where are we on that? Daniel Fisher: Sure. So I'll start with the first question relative to category impacts in the second quarter. Alcohol, total alcohol, was down 3%, mostly driven by domestic beer. I'm sure that's not a surprise to you given our customers' penchant for taking price versus volume. Non-alcohol was a bit more resilient. CSD, in particular, and energy drinks grew. Total non-alcohol was up 1%; CSD, flat to up 1%; energy drinks, up 8%; sparkling water, down 5%. The import beer was up, craft beer was down. Import beer was up double digits, 13%; craft, down low single digits; hard seltzer, down nearly 20%; F&B was up 20%; and ready-to-drink cocktails was up 60%, obviously, off of a lower base. So net-net-net, basically flat for can penetration, and it's very consistent with our customers' earnings releases as well. Relative to the 2 facilities that were shuttered, please keep in mind, Ghansham, that we announced those closures late last night. And so it's very raw, very sensitive right now for a number of our employees. These are permanent shutterings. These facilities, one was built in 1969, one was built in the mid-70s. These are landlocked facilities. They are both reline facilities. The net capacity is approaching 4 billion units, so think about removing that. Relative to our ability then to step into the 4% to 6% growth that we believe, and again, despite all the economic challenges this year, we'll deliver 5% growth. We have plans in place and facilities that continue to increase efficiencies in terms of their start-up. So we'll be able to step into our growth projections and goals, both from the medium and long term. And this is just a step that we've consistently done throughout our history relative to optimizing our footprint, and that's how you should be interpreting this. Maybe I'll just turn it over to Scott to give some context in and around fixed cost savings, which is typically something that we would refer back to in times like this. Scott Morrison: Sure. Just to clarify, when Dan said 5% growth, that was a global number he was referring to. That wasn't any particular region. I'm not going to talk about the fixed cost of these particular facilities. But historically, when we've closed facilities of this size, 2 or 3 lines, think about roughly $30 million of fixed cost for each facility that will come out as we close those, one probably later this year and one in early next year. Ghansham Panjabi: Okay. That's very helpful. And then as it relates to the comments on volume outlook for the full year, the 5%, how does that break down by region, the way you see it at this point? Daniel Fisher: You can appreciate very volatile times right now, trying to anticipate customer pricing in North America. We're seeing the second half play out to growth trajectory in South America, in line with our commentary a quarter ago. North America is going to be dependent on pricing behaviors and ongoing pricing behaviors from our customers. And Europe has been incredibly resilient. We were just there -- I was just there last week and over the weekend, been over there multiple times, same with South America, to just keep a pulse on what's going on in those markets. I feel confident that we'll be within the 4% to 6% range globally. Difficult to parse out specifics quarter-to-quarter right now, to be candid with you, Ghansham. Ghansham Panjabi: Okay. Just as a follow-up to that, Dan. Is North America tracking negative, thus far, in 3Q? Daniel Fisher: No, flat to slight increase through July. Operator: Our next question is from the line of Adam Samuelson with Goldman Sachs. Adam Samuelson: So I guess I'm just trying to -- the comments in the press release about being on a path to return to 10% to 15% earnings growth in 2023, I want to just be clear, that's going to be off of some sort of lower 2022 base. That's not kind of a long-term CAGR off of a prior period. And where you'd previously calibrated 2022 earnings would be below the 10% to 15% target, kind of any -- where we are halfway through the year, any way to help us narrow in on where earnings growth actually is looking this year? And if there's any kind of the key buckets by region to think about bigger headwinds or against that, that would be very helpful. Scott Morrison: Sure. This is Scott. I mean, I think given like in total, given the softer outlook that we see in North America versus what we had initially thought, given what our customers' pricing strategies and mix have been, the loss of the customer in South America, what inflation is doing kind of around the world, the timing and sale of our Russia business as well as euro earnings translation, I think it's going to be tough to match last year's comparable operating earnings in 2022. So the comment about next year is off that kind of base. Adam Samuelson: Okay. That's very helpful. And I guess then, I mean, you still talk about kind of optimism long term on 4% to 6% kind of volume growth. But I guess, would it be fair to say the actions in North America that you're taking, kind of what you're seeing from a customer kind of and market perspective this year, especially maybe relative to prior plans, is that -- to get to that 4% to 6% kind of longer-term volume growth, it might be skewed considerably more heavily towards international markets than you might have thought 12 or 24 months ago. And any -- just how you think about the regional composition of that growth over the medium term, if that's changed at all. Daniel Fisher: Yes. I think that's fair. I think, to be clear, we entered the year thinking that we would have grown in North America double digits, and we've clearly come off of that given the first and the second quarter and the pricing decisions from our customers. Much of the growth trajectory relative to what we said, the underlying tenets relative to the medium and long term 4% to 6% growth, that still holds for every market. And we need our customers to return to a semblance of pricing strategy, which they've implied and implored over decades. Right now, they're pushing forth price in excess of inflationary costs, and they're margining on that. So if there's a modicum of return to a different pricing strategy, we will benefit from that in terms of an uptick in volume in North America. We've had a resilient Europe business that continues to grow. We're investing in that business. South America entered into a recession well in advance of the other markets. They seem to be turning the tide in that region of the world. So stepping into '23, we will see some benefits of growth, hopefully, tailwinds coming out of the fourth quarter and into the first quarter. We're certainly seeing early signs of that. And in North America -- it's a pricing discussion in Europe. As I said, we've been over there several times. We're concerned about what's going on, as every business is, relative to energy and what's going to happen with natural gas pipeline flows. But the underpinnings of what we're hearing, both from our customers, substrate penetration and aluminum investment, coupled with the fact that a lot of our customers continue to push cans in that part of the world, gives us belief that it's not a matter of if, it's when. Operator: Our next question is from the line of Christopher Parkinson with Mizuho. Christopher Parkinson: You did this a minute ago, but can you just break out just kind of your intermediate-term views for the substrates? You mentioned alcoholic, nonalcoholic energy drinks, RTD off of perhaps a lower basis. How should we be thinking about bridging what's happening right here right now versus, let's say, the first half of '23, specifically North America? Daniel Fisher: Very difficult to comment on a bridge to the beginning of '23 because these numbers have a direct impact on our customer pricing strategy. Our customers have taken year-over-year north of 20% price, and their volumes are flat. So if that were to moderate back to less price take and more interest in volume, all of these numbers will be improved. That as a backdrop, I'll go over the categories again. For total alcohol category, it was down 3%; domestic beer, down 5%; import beer, up double digits; craft, down slightly 3%; hard seltzers, down nearly 20%; F&B, up 20%; and ready-to-drink cocktails, up nearly 60% off of a very small base. The nonalcoholic categories were -- they grew slightly, 1%; CSD, 1%; energy drinks, 8%; and sparkling water was down 5%. So in total, that nets out to 0 growth for the industry in the quarter. How that translates into the second half of the year, just refer back to my pricing comments on the customers. That is -- that will drive end consumer behavior, and it will drive volume, which is what we're most interested in relative to our customer commentary. Christopher Parkinson: Understood. And just a quick follow-up on Latin America, and specifically, Brazil. Obviously, there's some choppiness in the fourth quarter, first quarter. It seems like it's abating a little bit. There's some optimism for the World Cup in the fourth quarter this year. Just how should we think about that -- kind of that bridge and your confidence in that boost towards year-end based on what you're hearing right here, right now in the alcoholic category? Daniel Fisher: Thank you. Q4 and Q1 were down significantly. And as I mentioned, the end consumers -- and you can revert back to earlier commentary from us publicly, end consumer purchasing power was up 30% to 40% in Q4 and Q1 from prior period. In Q1, volume, our hectoliter was down nearly 20% in that market. We saw a return to a modicum of flat in Q2. That was in line with our expectations. What we saw, early parts of the third quarter, we're returning to double-digit growth year-over-year for us in South America. As you mentioned, incredibly volatile, the world is. One month does not make a quarter, but it's in line with our anticipation heading into both an election, further stimulus in Brazil and the World Cup falling in a winter quarter. Operator: Our next question is from the line of George Staphos with Bank of America. George Staphos: Dan, if you could help us understand, to the extent possible, what was going on in North Las Vegas and what your plans are there and kind of the background there. Will you need to supply to the customers that should have been supplied by that facility from other facilities or not? Daniel Fisher: The answer is no at this point. We will -- we have put a pause. We've had conversations with the anchor tenants there, those customers. Think about this as a 6- to 9-month rephasing. We can engineer. We can put the lines in. The phasing impediment right now would just be the speed with which we could hire the labor. So this is absolutely going to happen. It's just the rebasing and rephasing of timing. George Staphos: Okay. And then this question has come up a couple of times with my peer analysts, and I want to take another try at it. So you're still guiding to a long-term 4% to 6% growth rate for the can. You mentioned it's very difficult to determine at this juncture, and we understand what the growth might look like this year because part of it is driven by what the promotional strategy will be from the customers. And you obviously can't speak for or know exactly what the customers are going to do. So with that as a backdrop, how can you have confidence, what gives you confidence, if there's a way to quantify at all, in the 4% to 6% and how it might vary across the regions? Daniel Fisher: Yes. It'd be difficult to parse out the regions. I will tell you, on a global basis, I'll reaffirm, we believe that we'll be growing at mid-single digits for the year. And George, probably much like yourself, I've never seen a geopolitical, an inflationary environment, a macroeconomic environment as unstable as the one we have right now, and we're growing in the range. A couple other things to point to. We are in constant contact with our customers. We are in constant contact with our suppliers of filling equipment. And we're -- and there have been 3 multibillion rolling mill investments announced in the last 90 days. So parsing out 2023 relative to the regional dynamics, a bit difficult to discuss right now. We'll have a clearer picture of that at our Investor Day. We'll be entering our budget conversations. All of us will be out on the road talking to customers in different parts of the other world on an ongoing basis to stay close to this. But I have a firm underpinning and belief in the variables that will drive the circularity story and the sustainability story that allow us to get to that growth thesis that we outlined a couple of years ago. It still holds. Scott Morrison: George, I think everybody -- given how volatile the world is, I think everybody has a bit of a recency bias to kind of say, "Okay, what have we seen in the last 90 days and what's going to happen going forward?" Nothing has changed if you think about -- nothing has changed about the sustainability benefits of the can and the long-term attractiveness of the package. And so -- and the conversations we're having with our customers, we were in Europe a couple of weeks ago, there's a plan for 118 filling lines at our various customers across Europe over the next several years. So the customers are looking at this as a long-term proposition. They're doing some things in the short term that are disruptive, that are not helpful from a volume standpoint in North America. But long term, the can is going to continue to win. And so we think we're kind of -- we got excited when we said -- in 2018, at the Investor Day, we said that 4% to 6% growth. Then growth accelerated, and now it's moderating a bit, but it's still back to that 4% to 6%. And so I think if everybody takes a step back and looks forward, all the benefits of the can, none of that's changed. And we've got to do things in the near term because we have localized supply-demand imbalances that we're going to -- we have to fix that. And we've got to do some focus, frankly, on our SG&A costs that have probably gotten ahead of where they need to be. And so we're going through department by department and figuring out what things do we really need to be spending money on and what things don't we need to be. And that's going to put us in a position that when this inflation moderates and when we get the escalators in our contracts that contractually happen, we're going to like the results of that combination a lot. George Staphos: Sure. Scott, I appreciate that. And my last one is a great segue. So with that as a backdrop and given your input to take a longer-term view relative to a last, whatever, 30-, 90-day view, you also reduced your value return target from $1.75 billion to $1 billion. Can you help us bridge how you get there? What were the consideration in terms of dropping that? Scott Morrison: Thanks, George. Yes, sure. Well, we're going to make less money than what we thought originally when we came into the year. We're going to use -- there's going to be a use of working capital, about $350 million. If you look in the second quarter, our inventories, we were building inventories for what we thought would be a more robust season here in North America that didn't show up. So we're going to have to take focus on that in the back half of the year, but we're still going to have a use of working capital in the range of $350 million. We're still too early in the process to know what the sale of our Russia business will yield us. So we're being cautious around that front. And then we've got a customer issue in South America that -- the customer who defaulted on their contract isn't paying us. So all those things kind of lead us to reel in the share -- the value return for right now. But trust me, in the long term, our focus on that has not changed at all. And so that's when we look at capital for next year. We see a meaningful reduction of growth capital because we can put it in more slowly over a longer period of time, dial it back and be in a position to be able to ramp up the return of value to shareholders. Operator: Our next question is from the line of Anthony Pettinari with Citi. Anthony Pettinari: We're coming off a number of years where North America was sold out and we were importing cans from all over the world. I just want to understand how you think the North American market sits or maybe where your system sits once these closures are completed. Could there still be some slack in the North American market? Will you be back to essentially running full out? I'm just wondering, directionally, if you could talk about where North American operating rates may be exiting the year. Daniel Fisher: Yes. Thank you. There's a confluence of events that are happening, and this is a short-term or near-term answer, which is, there could be flat capacity for the near term, simply because we're ramping up large asset bases: Pittston, Glendale. And we've made further line investments over the last couple of years. So the efficiencies of all of those lines are improving really nicely. So they were anticipating a higher volume number. So I think in the next 6 to 9 months, I think there's a wait to see exactly the dynamics relative to supply-demand. But rest assured, we have an industry leadership position. We understand. We've taken a view to optimize the network. We've consistently done that over the last decade. Strong belief in the medium to long term, but we need to meet the world where it's at right now, and those are the decisions that we took yesterday. Anthony Pettinari: Okay. That's very helpful. And then just as a follow-up to that, I mean, is the situation in North America solely that your customers are seeing lower volumes with promotional strategies and tougher inflation environment? Or are you walking away maybe from some business that doesn't meet the current thresholds? Or is it some combination of those 2 things? I'm just wondering what you can share there. Daniel Fisher: Well, we're not walking away. I mean, we've historically always walked away if we don't have an EVA return. So that's -- but that's not a recency bias. This is 100% our customers are putting up price in advance of inflation, and their volume is zero. And we are impacted by the 0 volume growth. Scott Morrison: Anthony, I would just add, in terms of the customers, we've entered into some new contracts recently that we like the economics on those contracts a lot. And we'll start to see those benefits as we get into '23. Operator: Our next question is from the line of Mike Leithead with Barclays. Michael Leithead: I appreciate all the detail, especially by category, in North America. First, is there any update you can provide on the Russia divestment? And Scott, just to be clear, when you gave an earlier answer or commentary about this year's EPS, are you assuming some sort of sale of Russia within fiscal '22? Scott Morrison: No. Well, one, I gave direction on comparable earnings, not EPS. But -- and Russia was inclusive of those numbers for the full year. The process -- we have a pretty robust process going on currently, and it continues to progress, and we'll see where we get to in the end. So that's kind of what I can tell you right now. Hopefully, we'll have more information when we get to our Investor Day in later September as to where we're at in the process and what's happening and time frame and all of that. Michael Leithead: Great. I appreciate that. And second, I just kind of wanted to go back to North America. And I appreciate customer behaviors are a little bit different the past -- or a lot different the past 3 months. But between the 2 plant announcements last night and the delayed new plant, I mean, it feels like a pretty big deviation from where we're all thinking for '23 and even about 2% or 3% of North America market. But just -- as you mentioned, you take these decisions quite seriously. So I mean, is it fair to say your growth conversations are changing quite a bit with the customers? I guess, I'm just trying to square your medium-term confidence swells, kind of shrinking your plans there a bit. Daniel Fisher: Yes. So just one clarification. The pricing behavior hasn't happened over the last 3 months. We've had, in aggregate, each quarter over the last 4 quarters, our customers have taken up, on average, 7% price increases. So you're getting to a point now where, year-over-year, you're looking at 20%, almost 30% price increases in some of these products. That absolutely has an impact on discretionary and consumer buying. And we're looking at that, and we're making adjustments. We're optimizing our footprint. This is a near-term balance for us. We've optimized the efficiencies across our system. We're constantly looking at this. I'll remind you that these 2 plants, 1 was built in 1969, 1 was built in 1975. So that should give you some thought in terms of what we need to do relative to what we've seen over the last year in terms of the pricing behavior from our customers. Operator: Our next question is from the line of Arun Viswanathan with RBC Capital Markets. Arun Viswanathan: So yes, I just wanted to, I guess, drill down further into the demand outlook here. So obviously, we've gone through a period of very robust growth. It looks like we're normalizing into a more historical range. What's it going to take to kind of reaccelerate to maybe a slightly higher rate of growth? You noted seltzers were down 20%, and we've all been seeing the data there. But have you seen any pickup in either the amount of new beverages that are going into cans? Or any trends, as far as still water or anything else, that would potentially drive growth back or accelerate growth as we look out into the next year or so? Daniel Fisher: Yes. Thank you. So just one major point of clarification. Our historical growth rates were 1% to 2% for 20 years heading into '19. We just communicated, I think, multiple times in this call that we believe we'll grow at 5% this year. So we're 2 to 3x what the historical growth rate is and in line with our long-term investment thesis for growth. As it relates to categories and innovation, absolutely. We're seeing ready-to-drink cocktails growing at 60% off of a small base. We're seeing energy drinks continuing to grow at high single-digit growth rates. If you refer back to several calls over the last quarters, I have said multiple times, our business doesn't move quarter-to-quarter. It moves over 6- to 9-month digestion period. So retail shelf space, filling locations, promotional activity to push around things like RTD cocktails, those things, as they start to happen, they will fill out the retail sales and rebase areas that are seeing modicums of decline. And so yes, I'm very bullish on ready-to-drink cocktails. I'm bullish on energy drinks continuing. CSD, that is a plastic-to-aluminum substrate shift. And despite the 20-plus percent price increases we've seen in those areas, it's still very resilient to flat to a slight growth. So all of those things give me comfort that what we're seeing in terms of an appreciable differentiated, higher growth rate versus historical norms will maintain and continue for an extended period of time. Arun Viswanathan: Okay. And then -- so I understand that the facilities that you're shuttering are potentially on the higher end of the cost curve and a little bit older relative to your rest of your production base. So I guess, how should we think about capital from here on? So I know your growth projects are still on track. But maybe if you could lay out how you're thinking about CapEx over the next several years. I know that, obviously, you've moderated the capital return, but are there other levers you can pull on CapEx to potentially get that capital return back up? Scott Morrison: Yes. Yes, I mentioned that we expect this year -- the things that we're paying for in the back half of the year are essentially things that are in the ground. We have pretty good, favorable payable terms on most of the capital. So that's why we can't change it a heck of a lot this year. It's going to be -- I think we've taken it down about $100 million from what we thought 3 months ago. So it's like $1.7 billion. I would expect, as we look at 2023 -- and we'll update you. As Dan mentioned, we'll be doing our planning here over the next couple of months, and we'll be able to give you a better number at the Investor Day. But I would expect our capital to come down meaningfully in 2023, just because the growth has moderated, but it's still in that mid-single digits, but it's not the double digits that some people thought we would hit this year. So we're able to dial back that capital, and that gives us more opportunity to return value to shareholders. Operator: Our next question is from the line of Angel Castillo with Morgan Stanley. Angel Castillo: So Dan, I just wanted to, I guess, dig in a little bit more into 2023. I appreciate we're going to get more details at the Investor Day, but any sense for that CapEx reduction, roughly where that might be coming from? I assume maybe within North America -- or just as you think about the future plans that you've kind of laid out where that, I guess, reduction might be sourced from. Daniel Fisher: Sure. Thank you. Yes, there's been an awful lot of focus on volume on this call. I think if you reflect on Scott's comments relative to sort of the downturn in earnings that we anticipated 60, 90 days ago, keep in mind, there's been a hell of a lot of headwinds on inflation. That inflation is going to come back to us next year. That number is higher than what we anticipated to get coming into this year. So earnings should be reflective of an improved PPI mechanism. Keep in mind, we pass through inflation in both Europe and North America a year in arrears. So that will be, as we sit here today, a good guy. And we will further document that and bring more specificity to that number a month from now as we do our homework there. And then relative to capital and some of the other comments, I'll turn that over to Scott. But we're good stewards of capital. The stuff that has been going into the ground, we're paying for that now. And then we should be reflecting and rephasing capital over the next year if we continue to see our customer pricing strategy. But more specific, Scott, if there's anything I missed there. Scott Morrison: Well, I just -- we're -- our aerosol business continues to grow. Our aerospace business continues to grow. I think we're going to -- we're really scrutinizing all of our capital. We were just on a call yesterday with some of our colleagues. And we need to be -- we're progressing on both European projects that we have. We built the Paraguay plant a couple of years ago. We're liking the results of that, and we're going to do another plant in Peru. So it's not like the growth has stopped. It's definitely slowed down, and frankly, at a more moderate pace, which will be better. And so we're looking at capital and our costs every part of the overall business. Angel Castillo: That's very helpful. And then as we think about maybe the medium to longer term, I wanted to maybe revisit a couple of things you mentioned. One was maybe on the inventories front, and then I think there was a mention of kind of a customer default that we were kind of dealing with. So as you think about maybe 2022 and what some of these items that might be kind of onetime and we should recover from and should get back to kind of growth next year and give you comfort of returning back to growth, anything else outside of those 2 or others that you can kind of point to that are maybe more specific to Ball or just kind of to this year that we can then look at as we think next year. And industry growth returning back, anything with market share or, again, with the inventory levels, et cetera? Scott Morrison: No. Those are the big ones. I mean the inventory, we -- I've been around for 22 years, and you never want to scale back your production until you get to the summer season. Because if you're not ready to service your customers in the summer, those are sales that are lost. So we built inventory for the first half of the year expecting more robust growth than what we've seen. So now we've got to be a little more focused on inventory for the back half of the year and bring that down to more reasonable levels. And the customer default, I've been here 22 years, that's the first time I've ever seen a customer that we have a legal contract with that has chosen not to complete that contract. So I think that's a bit of a one-off. So those are the big things that are changing, and we're going to make less money than we thought in total. So that's why we're having to be cautious about the return of value to shareholders in the near term, but we think we're setting ourselves up really nicely for 2023 to improve all of those things. Operator: Our next question is from the line of Mike Roxland with Truist Securities. Michael Roxland: Wanted just to take a dig a little further into North America. You provided a lot of great comment, by the way. I -- we appreciate it. Just one of your peers mentioned volume growth in North America of 1% in 2Q, was guiding 2023 to be up double digits. I know that peer mentioned growth in North America of -- in 2Q of mid-single digits. Would it be a fair comment to say that maybe you overestimated growth somewhat in the southwest region relative to demand? You guys do have a fair amount of capacity in that region with -- I think, Dan, you mentioned in terms of like in a good year, I think you have 4 lines; Glendale, it could be 3 or 4 lines. So maybe relative to the demand that actually occurred in that region, you've -- you're being a little bit too aggressive with your -- with the capacity expansion? Daniel Fisher: No. I appreciate the question and the thoughtfulness of the question. That's -- it's inaccurate. In fact, the southwest is performing in line with our expectations. Keep in mind, and this has been disclosed in previous calls, we have an anchor tenant in Glendale that we do business globally with. And they continue to grow significantly and in line with our expectations in that facility in particular. Scott Morrison: I would also point out that everyone in the industry probably has a bit of a different customer mix. And so that could account for some differences in what people talk about. Michael Roxland: Got it. Okay. And one quick follow-up. Dan, you mentioned retail prices being up 20%, 30%. Your customer volumes are flat. So it could be that consumer -- that ultimately consumers are trading down to some extent given these price increases. Could you remind us of your private label exposure? And any push possibly to increase your private label exposure given the current environment? Daniel Fisher: We have -- in general, I think we have like-for-like comparables probably with the rest of the industry participants in that area. A lot of it just has to do with what filling partners you have relationships with. And those private labels, it's very hard to parse that out. You'd have to look at IRI scanner data because what will happen is you'll be shipping cans with labels into filling locations that are all full. So they may be trading out there. We'd be sending can volume into a customer that's really a filling location for an end consumer. And sometimes those aren't even graphics on cans, they are shrink sleeves. So difficult to parse that out. I agree with you on trading down. We have seen trading down. Typically, where you see that, is you see that in rural areas first versus urban areas. We saw that going back to the later part of the first quarter. So what you'll see is a 12-pack versus a 12-pack and a trade-down, and then you'll eventually see volumetric trade-downs. And so not as much of the category shifts as much as it is. Exactly to your point, you would see base labels, high-end labels being traded down to medium, to lesser labels being traded down to share a stomach. And so we haven't hit the share of stomach trade-down across the landscape. But as price increases continue at this rate, you -- that would be the concern is that you may start to see the volumetric trade-down. Operator: Our next question is from the line of Phil Ng with Jefferies. John Dunigan: This is John Dunigan on for Phil. I wanted to stay on North America for a second. Now the tightness that we've seen in the market up until really this year led to a lot of favorable contract renegotiations, which I thought had volume requirements baked in. Is that not the case? Or is some of that just getting pushed out for your customers? Daniel Fisher: Yes. I'll start and then turn it over to Scott. I would say the new contracts are performing in line with what our expectations were. Keep in mind, that's not the majority of our business. Scott, anything else? Scott Morrison: Yes. So all the new assets we put in the ground and the contracts that support those are progressing. I mean, if you take a step back, every contract is going to have some range of what they can do month-to-month. I mean, nobody gets their forecast 100% right. So in our case, where we're at, it's kind of like 95% right. And so that 5%, we're feeling that. But that's kind of normal. But the contract provisions that we've been talking about, the favorable contract provisions that we've talked about for the last couple of years are definitely showing up in what we're seeing. John Dunigan: Okay. And then in terms of like maybe a bull case scenario, you're shutting about 8% of the North America capacity for Ball and pushing out another, say, 4%. So in this bull case where you maybe return to that 4% to 6% CAGR quicker than expected here in North America, do you have any capacity to meet that demand with the ramp-up of your other projects? And maybe you can give some insight on kind of how operating rates look in broad terms. Daniel Fisher: Yes, absolutely. We have dry powder to step into. We were going to, on an annualized basis, add 12 billion units this year. We're saying we're going to take 4 billion from that. But keep in mind, the knock-on effect from efficiency builds moving forward will enable us to step into growth in excess at the high end of the 6% range, if it shows up. The other thing we're in constant conversation with our customers, anchor tenants and the previously disclosed greenfields that we're anticipating in North America, and we could very quickly move into engineering and executing against those. So this doesn't have an impact really for us to be able to step into really nice growth in '23 and beyond. Operator: Our next question is from the line of Mark Wilde with Bank of Montreal. Mark Wilde: I want to just turn at the end of the call here from volume over to the cost. We are in a higher inflation environment than we've seen for 4 decades. Can you talk about what you might be doing or trying to do in some of the contract renegotiations to both speed the pass-through of non-aluminum costs and then also to maybe match up the escalators that you use so that they better square with the actual costs that you're incurring? Scott Morrison: Yes. I mean the PPI and CPI, various escalators that we've used over time, have been pretty effective in most environments. And what we're feeling right now is a bit of a short-term squeeze because inflation has been accelerated at a pace we have -- nobody seen in 4 years. So we don't want to be too reactionary to the changes of what's worked in this business for a long time. However, I will say, we are looking at a variety of things in contracts to make them tighter so that there is less leakage and there's quicker response to big changes in costs. But those things take time to implement. So in some places that have experienced high inflation, think of like a lot of emerging markets that we operate in, they do have very effective and quick cost pass-throughs because they've experienced hyperinflation for a long period of time. In North America and Europe, that hasn't been the case. So the annual pass-through has worked. And we're seeing the benefits -- we're -- the pass-through mechanisms are working. It's just that we've had another round of inflation to the tune of $100 million this year that we're having choked out. Daniel Fisher: But maybe I'll close... Scott Morrison: Let me also add on, on the SG&A side, that's something that is different. And we are looking -- in fact, we've already started this. We're going through every support function and looking at things that we need to stop doing and things where we can take out costs to get our SG&A in line. Now we're already seeing that SG&A feel from most of those that have incentive compensation. And one of the reasons the corporate line looks better is we're not going to get paid as much this year. So we're kind of in line with what the shareholders are seeing. And so we're very focused on our corporate costs and our support costs, and we expect to reap a lot of cost savings out of those areas. That's something we haven't had to do in a while. Daniel Fisher: Mark, one area that we haven't spent a great deal of time on previous calls -- we spent an awful lot of time on cost recovery relative to our customer contracts. We're spending a lot more time on our supply contracts, and what's embedded in those supply contracts are extraordinary clauses. Think about our ODMs on the chemical side. We need to ensure that the supply contracts mirror our customer contracts, and that would be an area not where we would pass through cost more expeditiously, but we wouldn't be absorbing costs that are decoupled from our customer contract. And that has a margin improvement ability to it as well. Mark Wilde: Okay. That's helpful. Listen, one other just real quick one, and I think I know the answer here. But this lower growth you're seeing in North American beverage cans, this is not going to have any impact, is it, on these planned can sheet expansions or the timing around those expansions, particularly the Mana project? Daniel Fisher: The answer as of today is no. We don't anticipate that. It's -- again, these assets will come online 3 and 4 years from now. So I think we were just -- we were actually just with a number of folks earlier this week having those conversations, and it was all go forward, continue. They believe strongly in the circularity message, as do we. So yes, thanks for that question. No, I think people are very bullish about continuing to invest in and around the circularity story of aluminum and beverage packaging. Operator: Our next question is from the line of Adam Josephson with KeyBanc. Adam Josephson: Can you just talk about the visibility you have into North American demand? So I mean, for two years, the industry was caught short. And now you're, in effect, caught long. Can you just talk about what your normal visibility is? How many months of it you have compared to what it might be now? Daniel Fisher: No. That's a great question. It's actually much longer than it used to be historically because of the fear of missing out relative to our customers being able to step into cans with innovation. The big challenge here for us is what we don't have access to, and you can -- it probably makes a ton of sense. I don't have access, or we don't have access to pricing strategies by our customers. That's the big dislocator right now in terms of what we're seeing from a volume standpoint. And that is something they hold very close to their vest. And so that's a challenge where -- we're having conversations relative to where they're at right now versus the sizable price increases over the last 9 months. So you get a revisit point probably every 6 to 9 months with your customers. But if they've decided to go much stronger on price in a 120- or 180-day period, you can have dislocation like we're experiencing right now on volumes. Scott Morrison: What I would say, the thing where we have more visibility to today than we had 6, 7 years ago is the mid- and long-term strategy of our customers, what they're planning to do with their mix, with their package mix and sizes and all of that and the investments that they're making on the filling side. We have better visibility into that. It's the near-term stuff that's a little bit more challenging. Adam Josephson: Got it, and I appreciate that. And Dan, just along somewhat similar lines. You mentioned in the release that you saw the deceleration in demand late in the second quarter. But as you mentioned earlier, your customers have been raising prices for, call it, a year now. So I guess, why would it all have seemingly come to a head quite recently as -- why would it not have happened 3 months ago, 6 months ago? Why all of a sudden was did you just -- did growth just hit a wall, seemingly so, at least? Daniel Fisher: Yes. There's certainly a recency bias. I don't know if I had a specific answer to that. However, for us, the there's always been Memorial Day to 4th of July promotional activity, and consumers were anticipating that. It didn't come through. There's less going into everyone's grocery basket right now. So I think there's a recency bias. I don't know, Scott, you've got a thought on that? Scott Morrison: Yes. I mean, we've been looking at a lot of economic data. And what's been happening most recently, if you look at some of the most recent things, you're starting to see the consumer get pinched more, okay? The second quarter, you had fuel prices rising. Now the good thing is that fuel prices are coming off a little bit. But all the stimulus money that was pumped into the economy, I think a lot of that has been spent through in the first part of the year. And now you're starting to see delinquencies tick up as it relates to student loans, to credit cards for people that are 20 to 35. So you're starting to see that consumer get pinched more, more recently because a lot of that stimulus money has now been spent through the economy. So I think we're -- we'll see. What you used to see is if they raised price 2%, their volumes would decline 1% or 2%. And for a period of time, that hasn't happened. But I think we're going to start to see that in their volumes, and that's where we're more bullish. As we look out long term and things normalize, we think we'll get back to kind of a more normal situation. Adam Josephson: And just lastly on that, you've always talked about beverage cans as pretty recession-resistant, and everyone has. Is there -- is it any less so now than has been the case historically just because of the magnitude of this inflation and these extraordinary price increases that you just -- the demand elasticity just takes over at some point, and there's nothing anyone can do about it? Scott Morrison: No. I don't think it's changed in terms of recession-resistant. I mean, if you look at it, if you -- again, you take a step back -- and everybody's kind of digesting these numbers real time, right? We've had a little bit of time to look at it and digest it. The world is a mess. And our earnings are holding up reasonably well. I mean, it's not anywhere near where we want them to be, not anywhere near. We're disappointed in where we're at. But if you look at the world, it's not that bad. And so I think this is still a recession-resistant business, but it is clearly not immune to shocks when you have 40-year inflation, a land war in Europe, euro deflation. You're going to feel short-term knocks from those things. Energy price is skyrocketing in Europe. You're going to feel short-term knocks. But the long-term beauty of this business is it will grow, it will flow cash, and it will get nice returns. And so I think we feel pretty good about where we're at. We're not happy with where we're at. We're going to do a bunch of things that we need to do in the near term to address a lot of these things, but the long term is still intact. Daniel Fisher: Adam, one thing to pay attention to, we're clearly a lot closer to this. So one thing to pay attention to, if you look at our customers that are simply passing through inflationary costs and not margining up, they are growing significantly. And so it is hugely resilient. What's decoupled right now is customers putting up significant price over and above inflationary cost pressures and margining up. So that's going to have a volumetric impact. That's not recession. That is a pricing strategy. So I just refer back to customers that have taken a middle-of-the-road pricing approach and just pass through cost. They're growing, and we're growing with them. Chris, that's -- I think that's all for now. We'll talk to everybody again in 90 days. Daniel Fisher: The investor conference is going to be on September 22. Look forward to seeing as many of you as can make it. Scott Morrison: Thank you. Operator: That does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines.

Operator: Greetings, and welcome to the Ball Corporation First Quarter 2022 Earnings Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded Thursday, May 5, 2022. And now, I'd like to turn the conference over to Dan Fisher, CEO. Please go ahead. Dan Fisher: Good morning, everyone. This is Ball Corporation's conference call regarding the Company's first quarter 2022 results. The information provided during this call will contain forward-looking statements. Actual results or outcomes may differ materially from those that may be expressed or implied. Some factors that could cause the results or outcomes to differ are in the Company's latest 10-K and in other company SEC filings as well as company news releases. If you do not already have our earnings release, it is available on our website at ball.com. Information regarding the use of non-GAAP financial measures may also be found in the notes section of today's earnings release. The release also includes a table summarizing business consolidation and other activities as well as a reconciliation of comparable operating earnings and diluted earnings per share calculations. Joining me on the call today is Scott Morrison, our Executive Vice President and CFO. I'll provide some introductory remarks and business performance commentary. Scott will discuss key financial metrics, and then we will finish up with closing comments and Q&A. Ball delivered strong first quarter results amid significant geopolitical and economic conditions. Our company remains deeply troubled by the war in Ukraine, and our focus is on the safety and well-being of our colleagues. In addition, our global employee giving program, and the Ball Foundation to date have provided in excess of $1 million of financial support for humanitarian aid. And our colleagues near the war zone are housing refugees as well as supporting each other in volunteer efforts in their local communities. We thank our employees and the broader global community for their acts of compassion and giving. The Russian invasion of Ukraine has had a significant impact upon the global business environment. Late in the first quarter, Ball announced that it has suspended future investments in Russia and is pursuing the sale of its aluminum beverage packaging business located in Russia. As we noted in today's earnings release, our ability to achieve our long-term diluted earnings per share growth goal is dependent upon the outcome of our announced intention to sell our Russian business. Note one in today's earnings release contains additional information about the Russia business. To our team in EMEA, we are proud of your professionalism and your quality work during an unimaginable stressful and constantly evolving situation. We are thankful for your support of one another. Looking beyond the challenges that 2022 has presented so far and focusing on the opportunities before us, let's remember the basics. We are the largest producer of sustainable aluminum packaging for beverages and personal care products in the world, and we deliver exquisite aerospace technologies that keep us safe, informed and inquisitive about what's happening on earth and in deep space. Ball has a proven track record of achieving success through leveraging customer focus, sustainability, our people and culture, operational excellence and innovation to drive profitable growth, EVA and cash flow. No matter the economic climate or the ways of the world, we will adapt, remain agile and grow. Ball has 142 years of experience doing just that. Ball is a recession-resistant company that can effectively manage rising cost over time and will deploy capital to garner the highest possible EVA returns and value to shareholders. With our EVA discipline and drive for 10-vision as our guide, we are keeping calm, carrying on and enabling a brighter future for our planet and our people. Turning to first quarter performance. Global beverage can volumes were up 1.4%. Global aluminum aerosol volumes were up 10%. Aerospace backlog increased 28%. Comparable operating earnings increased 6%, and comparable diluted earnings per share increased 7%. And our teams were successful offsetting significant cost inflation through pass-throughs, cost recovery programs and procurement actions. Our year-to-date business highlights include: our global beverage business ramping up new lines and breaking ground on two new facilities in North America and EMEA. Our North America business growing comparable operating earnings 24% and growing volume over 3% by successfully ramping up new domestic can-making capacity while weaning ourselves off imports into North America and the team effectively built inventory back to reasonable levels ahead of the busy summer selling season. In addition, the North America team achieved dual ASI certifications during the quarter. Our EMEA volume growing 10% with operating earnings being flat year-over-year despite $7.5 million of foreign currency translation and late quarter cost inflation, not to mention the team navigating a volatile geopolitical environment across its operating footprint. Our South America business managing through 21% volume declines due to unfavorable customer mix economic volatility and poor weather in Brazil, diluting the volume strength that remains across other South American countries where we are deploying capital to enable can growth. Our global aluminum aerosol team introducing re-closable aluminum bottles for new categories and increasing aerosol shipments by 10%. Our aluminum cups team, installing a new line in Rome, Georgia, to manufacture new 9- and 12-ounce cups with production starting in second quarter. Our cup achieving 90% recycled content, winning an Edison Award and signing a contract with Sodexo Live to expand our cup's presence at stadiums and venues. Our aerospace team expanding its backlog by 28%, completing its critical design review on SPHEREx and marveling at the on-orbit success of the James Webb Space Telescope with images for public consumption expected in the early summer. And Ball joining the UN Global Compact to demonstrate our commitment to aligning our business strategies and operations with universal sustainability principles. As we indicated on prior calls and looking forward, our global businesses are absorbing nonaluminum inflationary headwinds and experiencing additional price/cost squeeze in advance of contractual cost recovery. In EMEA, inflationary headwinds accelerated late in the quarter. And going forward, our team is working hard to mitigate their impact through ongoing commercial cost recovery, hedging and energy efficiency and renewable energy initiatives. In North America, contractual price escalators based on PPI and other indices have been effective and will continue to phase in throughout the year. We continue to rely on our supply chain for raw material inputs and look forward to additional alliances and investments being announced in 2022 to support domestic U.S. production of aluminum can sheet to further enable long-term growth and substrate shifts to sustainable aluminum packaging for new and existing categories. Underlying demand for aluminum beverage cans remains strong. We exited 2021 with 12 billion units of new installed capacity, and we also have plans in place to exit 2022 with a similar level of new installed capacity available to sell-through in 2023 and beyond. In summary, our global beverage team is preparing ourselves and our supply chains for long-term durable growth while managing notable volatility. Our customers are continuing to lean on the can as their package of choice. Year-to-date, carbonated soft drinks and energy drinks have accelerated their move into cans. And in beer, cans have maintained package mix share despite declines in total liquid consumption. By region, trends are in North America, following the broader reopening of on-premise, cans continue to outperform all other packaging substrates in aggregate. Strength in energy, CSD and import beer has bolstered demand for cans. In South America, rising can demand and liquid consumption growth in countries outside of Brazil were unable to offset a 15% decline in total liquid beer consumption in Brazil, though cans maintain their share versus other substrates during the quarter. In EMEA, cans continue to outperform other packaging substrates, particularly in CSD and energy. And we continue to see the need for imports from our Saudi and Indian beverage can plants for the remainder of the year. We are operating safely, controlling the things we can control, focused on executing at a high level and recovering costs, delivering high-quality cans to our customers supported by equitable contracts and closely monitoring and enabling global supply chains through alliances and investments in long-term contracts. We look forward to highlighting our long-term growth plans and management bench at our September 2022 Investor Day. We appreciate the amazing work being done across the organization and extend our thanks to all of our employees and external stakeholders. With that, I'll turn it over to Scott. Scott Morrison: Thanks, Dan. First quarter 2022 comparable diluted earnings per share were $0.77 versus $0.72 in 2021, an increase of 7%. First quarter sales were up due to the pass-through of higher aluminum prices, higher volumes with improved price/mix and higher aerospace performance, partially offset by currency translation. Comparable first quarter diluted earnings per share reflects strong results in North America metal beverage and aerospace offset by comparable operating earnings declines in South America, higher corporate costs and unfavorable earnings translation. Ball's balance sheet remains very healthy with ample liquidity and flexibility. As we sit here today, some additional key metrics to keep in mind for 2022. Our full year effective tax rate on comparable earnings is expected to be in the range of 19%. Full year interest expense will be in the range of $280 million. Year-end net debt to comparable EBITDA is expected to be in the range of 3.5x, and full year corporate undistributed costs recorded in other non-reportable is expected to be in the range of $120 million. At this time, and given our earlier public announcement about Russia, we expect 2022 total CapEx to be in the range of $1.8 billion and to return in the range of $1.75 billion to shareholders in the form of share buybacks and dividends in 2022. We continue to see a path to doubling our cash from operations by 2025 from year-end 2020 levels and look forward to more opportunities to invest in our businesses and to accelerate the return of value to shareholders. Rest assured, Ball continues to be good stewards of our cash. As fellow owners and through the lens of EVA discipline, we will manage the business as owners, partner with our supply chain and customers effectively to secure the best outcome for our shareholders. Ball reached a few important milestones this year. 2022 marks the 30th anniversary of EVA. That discipline has served us well in the past, and it will serve us well in the current economic environment. 2022 marks the 50th anniversary of Ball's initial public offering. Last week, we announced that effective May 10, our stock ticker will change from BLL to BALL. Back in the 1970s, four-letter ticker symbols were unavailable. And to ensure that the BALL ticker stays right at home with Ball Corporation, we're making this seamless change. With that, I'll turn it back to you, Dan. Dan Fisher: Thanks, Scott. As I embark on my tenure as Ball's CEO, our drive for vision will continue to serve as our guide. We know who we are, we know where we're going and we know what is important. Great companies perform in uncertain economic times, and Ball is a great company. By providing actionable intelligence through our aerospace business, sustainable solutions through our aluminum packaging businesses and honoring our disciplined capital allocation approach, our shareholders will be rewarded, and we will be doing our part to preserve our planet. While our ability to achieve our long-term diluted earnings per share growth goal of 10% to 15% in 2022 is dependent on the outcome of our announced intention to sell our Russian business, our earnings, cash flow and EVA trajectories are in very good shape now and in 2023 and beyond as we increase returns on newly deployed capital and further enable and serve growth in our aluminum packaging and aerospace and technologies portfolio. We are a world-class manufacturing company with a fabulous team, the most capable and agile global footprint, the confidence and the heart to continue to do well and do good. We are uniquely positioned to serve the decadal shift that will favor our packages. We look forward to continuing our journey and returning value to our shareholders. We extend our well wishes to our employees, customers, suppliers, stakeholders and everyone listening today. And with that, Scott, we are ready for questions. Operator: [Operator Instructions] And we do have a question from the line of Anthony Pettinari with Citi. Please go ahead. Your line is open. Anthony Pettinari: Dan, can you talk a little bit more about the time frame for recovering the costs in Europe? It seems like there's been a difference in the pass-throughs in North America versus EMEA. I don't know if you could talk a little bit more about opportunities to kind of close that gap? Or were you just more impacted by sort of hardship clauses given the sharp rise in energy in Europe? Any more color you can give there? Dan Fisher: Yes. I'll give you a little high-level color and then maybe ask Scott to make some specific comments. One of the things is we did not experience a lot of inflation in Q1. It accelerated towards the tail end of the quarter. So it's a little bit more of what's yet to come versus what we've experienced. I will say how that plays into the cost recovery discussions that we initiated kind of November-December time frame with our customers is, those conversations have been going well, but we haven't secured 100% short-term pricing pass-through. As you can imagine, these conversations are ongoing. We're trying to make those as equitable as we can moving forward in the event that we're moving into a more -- more of a high inflation environment. So there's more work to do. And I think it would be safe to say that I don't think we anticipated the level of inflation that we're now seeing in Europe. There's more work to do, but our contracts are sound. We will get this back. Europe may look a little bit more like North America did last year and then transitioning into this year relative to the pass-through. But Scott, I don't know if there's anything additionally you would add to that. Scott Morrison: Yes. Anthony, I would just say that going into this year, 90 days ago, we saw opportunity for nice improvement in growth and profitability in Europe in 2022. But with the outbreak of the war in Ukraine and inflation and euro devaluation, I think it's going to be tough to make what we made last year, full year in Europe. On the inflation side -- and this takes into account, inflation is probably running $50 million higher than what we originally anticipated. And similar to last year in the U.S., to Dan's comment, we'll get this back in the following year or so. No doubt it's a headwind for this year. And you're seeing that we're getting it back in North America, like we expected, which is partly why the results in the first quarter are up so much given some volume growth but a little lower volume growth. Anthony Pettinari: Okay. That's very helpful. And then just shifting gears to Brazil. When you look at your volumes maybe versus what you were expecting at the beginning of the year, it seems like there's a few things going on with maybe consumer weakness and weather and maybe timing of Carnival. I think you indicated cans are holding share. Can you just kind of help bridge what's really driving the volume performance in Brazil and just kind of thoughts as we move into 2Q and back half of the year? Dan Fisher: Yes. Thanks for that. One thing that you did indicate, just to be clear on this, volume -- liquid volume was down 15%. And so plus or minus that number is kind of where we ended up in terms of volume decline, and a lot of that has to do with discretionary spending power in Brazil because all of the other countries surrounding in South America performed really much better than Brazil, Southeast Brazil, in particular. So I think rough math, what our colleagues in South America and Brazil specifically were telling us is your spending power was cut by 1/3 basically over the last three to four months. And on top of that, because these products are U.S.-denominated in terms of the aluminum profile of them our customers were passing through price on top of that, so you could see a 30% to 40% impact on an end consumers' buying power relative to a package in Brazil. The things that are going to be transitory relative to allowing recovery in the second half of the year and why we're a bit bullish on the back half of the year, in particular, a couple of things. Number one, it's an election year. It's an election year in Brazil. So what that means is there's a stimulus package coming. That will certainly help. You referenced in your question timing in and around Carnival. As we sit here today, we believe that there will be a carnival reflective of what you've seen in years past, a street carnival. Somewhere in July is what's being contemplated. And the last thing is there's a World Cup, and the World Cup sits in a different time slot than typically does. So a November World Cup we should see the benefits of that. And that's what our customers are certainly building and discussing with us. So I think you'll see a second half performance lift kind of versus where we anticipated. I don't know if that's all going to be able to make up for what we experienced in the first quarter. But I think there are plenty of things to point to that we'll see continued strong performance, not only in the extending surrounding South America countries, but in Brazil, in particular, where the decline was in the quarter. Operator: Thank you. Our next question is from Ghansham Panjabi with Baird. Please go ahead. Your line is open. Ghansham Panjabi: Just in terms of your comments on consumer mobility, just kind of increasing and of course, here in the U.S., especially, how do you see that impacting demand for packaged beverage more broadly? I know you said that the can is gaining share, but is that a headwind from a just a shift standpoint that you're just going to have to cycle through as an industry in 2022? Dan Fisher: Ghansham, you're talking specifically about the on-premise versus trade. Ghansham Panjabi: Exactly. Dan Fisher: Yes. So what -- I guess we really weren't surprised by the returns to on-premise. Actually, I look at it slightly different than maybe the intonation of your question. I looked at it as positive that we were able to continue to grow share in can across all the substrates. And I think the other thing to keep in mind, especially in the Northern Hemisphere is, as our customers in the first quarter took price, they typically fight like heck in the peak season for volume and share. And so, I think we're going to learn a lot about that question specifically and in about our volume trajectories heading into peak season in the Northern Hemisphere. But the underlying performance relative to can share penetration, I'm optimistic about coming out of Q1, despite I mean some of the lower volume levels -- unit volume levels. Ghansham Panjabi: Understood. And then in terms of aluminum, I mean, there's plenty of concern about aluminum availability, and many of the producers reported earnings over the last couple of weeks, and they have all these nice charts that show inventory levels very low, et cetera. Is that starting to affect your customers in terms of new product development as they sort of look at the supply chain and sort of want to de-risk away from aluminum supply issues, maybe not this year but certainly over the next couple of years? Or do you think the suppliers on the can sheet side are able to produce aluminum fast enough, just based on their own investments? How do you see that unfolding? Dan Fisher: I think just the opposite. I think there's so much pressure on anti-plastic sentiment. So innovation conversations right now, Ghansham, they would be what's going to show up on the shelf in '24, '25 in terms of sort of new categories, new channels, new products. And those conversations are far more robust than they were a year ago. And as you already indicated, aluminum is back up a lot more expensive than it was a year ago. So let's see. Let's see how we get on. But I think the anti-plastic pressure and sentiment is beginning to be palpable for a couple of large CPG customers, and they see aluminum as a solution to some of these recycling content percent increases they're going to have to achieve. Scott Morrison: And we're starting to see investment in the aluminum supply chain in North America. So I think that's encouraging. Operator: Our next question is from Chris Parkinson with Mizuho. Please go ahead. Your line is open. Chris Parkinson: Just when you take a step back and just look at the overall theme affecting aluminum bev can demand, there's been a lot of money being thrown still at ready-to-drink cocktails. I mean the sales and marketing budgets would suggest that those consumer companies are fully dedicated to that. There have been a lot of conversions and energy drinks and so on and so forth. When we look at the back half of the year and we look into 2023, what are the two or three things that you're most excited about? Has that changed given the current macro environment? And just how should The Street ultimately be thinking about that? Dan Fisher: I would say your question highlights the areas that we're also bullish on. And then one is not necessarily innovation. It's just existing categories and existing channels that have plastic products. Plastic is our biggest opportunity, hands down. But I think ready-to-drink cocktails, I think energy always surprises us to the upside in terms of growth. We've got some really good partners there. Those are the couple of areas. And I think maybe not -- in terms of the back half of this year, but maybe bridging on my commentary from the previous question, there are some pretty significant categories with some pretty significant plastic that cans really don't play in that they will start to evolve in over time. So just about every kind of nutritional sports drink of some sort is basically in plastic, that's going to have to change, and I think there's opportunities there. Chris Parkinson: So just as a corollary of that, essentially the exact question. I mean you have, in fact, seen efforts California, Colorado, New York, Miami Beach, regarding switching over from plastic to aluminum. Availability has actually been an issue for some of those initiatives. I mean a few airlines have discussed it. I mean, it doesn't seem like it's been a primary focus of the investment community quite yet. But do you have any updated thought process in terms of kind of the initial like knee-jerk action in some of those announcements? Obviously, they're small, but how easily would it be for any one of those to morph into something that could actually be material for your platform? Dan Fisher: Yes. Great question, and thank you for drawing that out. I would say, if you look at airlines in particular, I can speak to that. They clearly have a sustainability challenge with the fuel. And so if they're going to get to some of their goals and objectives for the major airlines, one easy place to start is to get rid of plastic within -- when you're on-boarding the plane, when you're on the plane and when you're exiting the plane. And so we have not only single-use aluminum containers, though we have multiuse aluminum containers and we got cups. And we are having those conversations with airlines right now. And one, I think, has already announced in the Northwest that they're going to transition toward all aluminum. And so there are absolutely green shoots. And the first domino falls then it's a cascading effect, and then it starts to build on itself. So I think there's opportunity, certainly a lot of policy, a lot of shifts. We saw New Jersey trying to move away from styrofoam this summer, so that will be an opportunity set for our cups. And so these things are starting to build incrementally. And I think the entirety of our aluminum packaging portfolio will benefit from them, not just the beverage side. So thanks for that question. Operator: Our next question is from George Staphos with Bank of America. Please go ahead. Your line is open. George Staphos: Thanks for the details. So I wanted to come back to the guidance question just to make sure that we all were appropriately level set. So your ability to hit the 10% to 15% and your ability to execute on your plans in Russia, basically, what you're saying is you can get into that range if you generate the capital that you can deploy from ultimately exiting Russia. Is that a fair summary? Or is that incorrect and anything that I stated? Scott Morrison: George, you broke up a little bit there, but let me take a shot at it. Our ability to grow in that 10% to 15% range this year depends on how long we continue to operate. Right now, if we continue to operate at the current levels, we would expect to be in that 10% to 15% range for the remainder of the year. But we are -- that business makes $10 million, $11 million a month in operating earnings. So it's somewhat dependent upon that. And the timing under which a potential sale might happen, we're early in the process. These things, as you know, take time to execute. But it's an attractive business. It's a profitable business. We have a number of people that are -- a number of entities that are interested in it. And so, it's really based on the timing of when something might happen on that front. George Staphos: Understood, Scott. And apologies for the breaking up on the phone. If you can hear me now, I thought perhaps it was you would ultimately close on some sort of move, which would give you proceeds that you could redeploy, which in turn would enable you to get to the 10 to 15, but it's really more about how long you can hold on to it in the course of the year. Is that right? Scott Morrison: No, it's really both those things, George. So you're exactly right. It's really proceeds and what we do with those proceeds and conversely, how long we operate. So right, either of those ways would give us paths to that 10% to 15% potential. Dan Fisher: And George, maybe Scott, you just want to comment on the $1.750 billion return to shareholder and how that's impacted by Russia or not. Scott Morrison: Yes. Really, our plans are the same. We tend to not buy that much in the first quarter. We've got our working capital build. We tend to front-end-load our pension funding. So most of that happened in the first quarter, but obviously, given kind of the weakness in the share price, we expect to accelerate the return of value to shareholders here as we move through the rest of this year and out of the first quarter. Dan Fisher: George, you've been following us. You know we're laser-focused on that number. The world is a little bit fluid right now, but we're going to be laser-focused on returning value to our shareholders. George Staphos: Two other questions and I'll turn it over, mostly around volume growth. So I think the last quarter conference call, you were targeting roughly double-digit growth in North America. And correct me if I'm wrong, we started at a reasonable rate in excess of 3%. How does the start to the year affect your overall outlook? And why was it somewhat slower perhaps than what you were targeting for the year? And then of the initiatives that we've talked a lot about over the last couple of years that haven't yet materialized in size -- water, nutrition and the like -- have you signed any 1 billion unit plus contract at this juncture in many of these bigger categories? And why do you think they will manifest themselves in potentially a weaker macro environment when CPG companies will maybe prefer to hold on to some of their marketing dollars? Dan Fisher: Great. Thanks, George. Let me -- maybe let me attack the last part of your question first. I think your comments relative to water, no significant appreciable contracts in and around either one of those categories. We won't go into specifics on customers or that. But no multibillion unit contracts have been secured on those two categories in particular. I think there's more opportunity on the category of sports drinks, nutrition, et cetera, because it's at a higher price point. And there's a significant amount of plastic involved in those products. So that's a win-win on a number of levels for some of our customers that candidly just have to get out of plastic and significant plastic-weighted products. I think water is going to take disruption. It's going to take a different package. It's going to take a different look and feel. But anti-plastic sentiment in some of the states, especially on the coast, is going to drive different behavioral patterns. It doesn't necessarily have to come out of our beverage business. It can come out of our impact extruded business. It can come out of our cups business. So we have avenues to play across the aggregate of our aluminum packaging space that may not show up in the billions of units here in the next 12 to 18 months. But we can do well during that time period on a number of fronts because of the aggregate nature of our product mix. You want to talk about the 3.4% growth first quarter? Scott Morrison: Yes. And in North America, we still have a path to double-digit growth in North America. The first quarter was a little behind our internal expectations, and I can point to two things for that which make a lot of sense to me. Number one, our customers took up price a little bit more than we anticipated in the first quarter. And I think you've seen their earnings releases. They've all done extraordinarily well here in the first quarter. And the other thing, as we transitioned in North America into these new -- the new contract for our ability to pass through the inflation in arrears as we spoke to in Q4, I do think there was some incremental pull forward of cans into Q4 from some of our customers trying to beat that price increase from us. So I think that those two contributing, I don't know what the end result would have been in the quarter, but they would have -- we expected a little bit more than we actually delivered. And then we're excited about what we're seeing in terms of potential promotional activity in the second and the third quarter. That's when folks really start to fight for volume. And since our customers have gotten off to the start in terms of profit, I think they've got coffers full to do a little bit more aggressive work here in the second and the third quarter. Operator: Our next question is from Mike Leithead with Barclays. Please go ahead. Your line is open. Mike Leithead: First, I want to circle back to George's first question, and I apologize for pressing here, but it's just an area we've heard a lot from investors in the past month. But I think your March press release talked about reducing operations immediately in Russia. So can you kind of square that with continuing to the sell cans? And obviously, Ball prides itself on being an ESG leader. So I guess, again, how do you square that with continuing to sell in Russia? Scott Morrison: Well, let me start. We scale we scaled back, but we're still operating at about 90%. We're dealing with customers that are paying us basically upfront where the business can sustain itself from a cash standpoint. From an ESG standpoint, we have 950 employees that work for us in Russia. And we provide well-being for those people and those families. And so finding an orderly transition for that business, I think is exactly the right thing to do as an owner. And so that's what we're doing. Mike Leithead: Great. And maybe... Scott Morrison: It takes time to exit a business, and we're working on the sale of that business, but that's not something that's done in a week time or a month's time. Those things take a little bit of time. And given the difficulty of operating in that environment, it's probably going to take a little bit of time to execute on that. But we think that is the absolute right thing to do. Mike Leithead: Fair enough. And then maybe just quickly for Scott on the cash flow. Obviously, 1Q is a seasonal working capital build, but it's a bit steeper this year. So just where would you expect working capital to shake out for the full year in your guidance? Scott Morrison: Yes. I think full year, there'll be a bit of a use of working capital, probably in the $150 million to $200 million range in total. First quarter, we intentionally built more inventory. We've been talking about the last couple of years kind of running hand-to-mouth in the summertime, and we wanted to avoid that. And so, we intentionally built more inventory in the first quarter. So that's the big chunk of it. And then we did about 80% to 90% of our pension funding for the full year in the first quarter. So those would be the big changes or the differences from last year. Operator: And we have a question from Arun Viswanathan with RBC Capital Markets. Please go ahead. Your line is open. Arun Viswanathan: Great. I guess First off, in Europe, could you just describe some of the energy inflation headwinds that you're experiencing, maybe if there's a dollar impact and how the contracts need to be restructured potentially to account for some of that headwind, if that's part of any initiatives as well? Scott Morrison: Sure. Energy, in a number of markets in Europe, they are regulated. And so we can hedge about 65% of the markets where we operate. And so we do that. But when you have extraordinary spikes in certain markets where things didn't go up 3%, 4%, 5%, they went up 100 multiples, 7, 8x what they were, and it's like you're not hedged. So these bikes are typically short-lived, but they're impactful in the near term. And so we've seen extreme volatility at various times over the years in different commodities. If you get storms or a variety of things happen, it tends to revert back to some kind of mean pretty quickly. But when I mentioned that $50 million of inflation number, that's including energy, and we are working on contracts to better capture those things as we no doubt are entering into a more volatile world as we go forward. And so we'll have to contract appropriately to make sure that we have the right kind of pass-through mechanisms to get -- to recover that quickly. Arun Viswanathan: Yes, that's okay. And understanding the market is pretty tight, I guess, and some of your competitors are going through re-contracting there. Do you see kind of an environment maybe when -- maybe into next year where that business kind of obviously, you may not necessarily be experiencing that right now, but that business kind of is a little bit higher returns profile, again, just given what's going on in the competitive environment? Dan Fisher: Yes, I'm not entirely sure it's higher return profile, but we'll certainly catch up the inflationary headwinds that we have this year. Our business over the last four to five years has improved Keep in mind that metals pass-through, so that can dilute if you're looking at this on a return on sales percentage. But when we look at contribution margin and we look at actual dollars being generated, it's a very profitable gross profit business, and you can have a bit of a drag in periods like this where you have a spike in inflation, that's what we're experiencing, that's what we're communicating to you. But I think you'll get that back. next year. And if you return to some level of normalcy on inflation, you'll continue to see that two-in-one flow-through operating earnings versus unit sales growth. And that business is performing well. I'm actually quite pleased with the fact that despite everything that's happening right now, our business produced like-for-like earnings year-over-year. That's a testament to the quality of that leadership team, that management team and how they're able to operate in a pretty challenging environment. Scott Morrison: Today, it's kind of on the margin percentage, be careful, metal is up 60% year-over-year. So that's going to really impact your margin percentage on sales. But we're very happy with the performance in total. Operator: And we have another question from Phil Ng with Jefferies. Please go ahead. Your line is open. Phil Ng: Sorry, just one more question on Europe. Appreciating your earnings will be down in Europe this year, just given the lag on inflation. But do you expect to make progress through the year as you kind of pursue these commercial efforts? And Russia aside when we think about 2023, should we get -- should your earnings kind of get back to 2011 levels? Scott Morrison: Yes. I think as we move through the year, we're still early in the year. So we got to wait and see how the summer season shows up in Europe and how volumes show up. But yes, we would expect a nice improvement as we kind of move through the year. And again, all these comments kind of absent Russia because that's a bit of [unknown]. As we get to -- FX is again a bit of a drag. But if you look at it on an FX adjusted basis, we were up 7.5% in the first quarter. But on a dollars basis, it was flat. So FX could be a bit of a drag as we look through the year. Dan Fisher: And Phil, on the cost recovery question, we are having conversations. They're ongoing. Our customers know that this needs to be equitable. These are unique times and circumstances. And so yes, depending on the outcome of those conversations, we could do a little better than what Scott indicated as we sit here today and what we know is in front of us in terms of contractual language. Phil Ng: Okay. That's super. And then from a Russia standpoint, they're obviously a big exporter of raw materials, including aluminum. Any supply chain risk and availability of material that we should be mindful of? Scott Morrison: Not really. I mean Russia was really, for us, is kind of a self-contained business, and there wasn't a lot of aluminum going in other places. Russia is a global supplier of aluminum. But right now, we're not seeing any more supply chain challenges that we've been facing in the last year or so. Operator: Our next question is from Mike Roxland with Truist Securities. Please go ahead. Your line is open. Mike Roxland: Dan, Scott, just a quick question on -- with respect to your Russian greenfield plant, is there any change that you're still liable for. So let's assume that you're able to sell the business next week or two, hypothetical, equipment order, any contracts you've entered into? Is there anything that we should be mindful of that you still will be liable for if you're able to -- once you sell that business? Scott Morrison: No. No, we stopped -- as we mentioned, the Russian greenfield has been stopped. No equipment had been put in country yet anyway. So the dial down in CapEx is in part due to Russia. I would say majority due to Russia. And then anything else, we're moving to other places where we still need capacity. So there's no additional drag because of that. Dan Fisher: Yes. I think the important comment there, I think you heard it, but they're -- we're growing everywhere. So there are opportunities to redeploy the capital, those lines in particular. And so, we're just evaluating the prioritization list right now, but kind of excited where we could potentially deploy those assets. Mike Roxland: Got it. That makes sense. And just one quick follow-up on supply chain food raw materials. Dan, you mentioned in your comments about supporting U.S. production of aluminum can sheet. How is the availability of aluminum can sheet for your greenfield plants? And given your comments, is there any concern that you have that is continue to grow we might not have the can sheet you need, so you're looking to diversify suppliers and to expand who you operate with work there? Dan Fisher: So I think we might be having some technical difficulties. I heard most of what you said. It's a little choppy on this in. But let me talk about some additional commentary on my scripted comments as it relates to the U.S. domestic supply. We've been really consistent that the market is tight. We're still importing from various parts around the world, mostly China, some from the Middle East but still coming in to support domestic growth. As we sit here today, looking out three to four years, it becomes increasingly tight, but there's a path to get aluminum to support the growth that we've announced. There are going to be additional investments, some pretty significant that we believe are going to start to show up. And you'll hear more about those in coming days and weeks. So we see really good line of sight, and we'll talk about it more at our Investor Day, heading out into 2030. And that's probably about as far as we can look right now with any kind of level of conviction with our customers. But we're in a much better place in terms of the opportunity set that's in front of us and the level of commitment from the supply base than we were a couple of years ago. It was starting to be a little bit concerning for us. And I think it's far less of an issue when you look at the Pareto of challenges to keep pace with the growth in the supply chain, We're in a far better position as we sit here today. Operator: And we have a question from Angel Castillo with Morgan Stanley. Please go ahead. Your line is open. Angel Castillo: Dan, just a quick one, I guess, in terms of the North American market. You talked about maybe 2Q, 3Q being a little bit stronger. But as we think about maybe the pull forward of those in 4Q, 1Q, some of the trade trends in North America perhaps coming in a little bit below your expectations, are you back in terms of inventories back to where you want to be in terms of a normal environment? And how do you kind of see imports in North America shipment growth for the full year in terms of percentage and the absolute value for imports? Dan Fisher: Yes. I can comment probably more on the trends that we're seeing and the quality of the inventory. The -- as we sit here today, we're in a much better position than we were a year ago. I will tell you that there's the aggregate inventory position that looks good, and then we still have can sizes that are incredibly tight and short, and we're going to have to manage through some of those aspects, but we're in a far better position as we step into Q2 and Q3. And that's really when you reflect back on the challenges that we might have had last year. In the Northern Hemisphere in particular, it was a tough go there for about six or eight weeks in Q2 and the first half of Q3. Scott Morrison: I think imports in total, you're going to see down, but remember, those import numbers, they always include Mexico which will be a consistent flow of Mexican beer into the United States. Dan Fisher: One other comment, it was in the script. As it relates to some of our other joint ventures and our assets that we're exporting cans into the U.S., we're now exporting cans into other parts of the world, Europe, in particular. So the exports are still happening, but they may be showing up in other parts of the world because we've sort of leaned into the North America investments a little bit more than the time line of investments for Europe and for South America. And so as those foundational assets get put into place into Europe and South America, you might have to -- those regions may have to import a bit. Nothing to the extent of what we experienced in North America, but that's sort of how we're looking at the import/export world right now. Angel Castillo: Got it. That's very helpful. And then as you think about the capacity additions, I think at your last Investor Day, you had laid out the kind of totals of in two phases of potential capacity additions, a good portion of which has been announced. But as you think about perhaps what hasn't been announced or hasn't been fully constructed yet outside of the Russia plant that you've already discussed. I guess, any changes based on what we're seeing in this environment, the uncertainty as to how quickly you want to deploy that capital, how quickly you want to build or perhaps the mix as well as you kind of alluded to between regions? Just how is that kind of decision -- the capital deployment decision evolving? Dan Fisher: Yes. We're always going to follow EVA. And so as that picture evolves, some of the assets may end up in a different place than we had originally anticipated back at the end of 2020. The good news is all of the growth, medium and long-term growth projections that we gave, they're still there for us, which is four years on from when we -- or three years on from when we made those comments. We're a little ahead at this stage in terms of the capital that we deployed and the unit volume that we've installed. And I think your comment is right. I mean the world is a pretty volatile place right now. And so there may be opportunities that present themselves that look different than they were a couple of years ago. And if we get the right terms and conditions with our customers, we get contracted volume and we get a good EVA return, we're going to deploy it to those areas. Operator: We have a question from Mark Wilde with Bank of Montreal. Please go ahead. Your line is open. Mark Wilde: Scott, I wondered if you could just give us any color on getting cash and getting capital out of Russia. I know it's hard in the middle of the situation to get too granular, but just any color would be helpful. Scott Morrison: I mean our historical profit have already been dividended out of Russia. So we don't really have much sitting in Russia other than our assets that are there. And so there's no there's not like a bunch of trapped cash or anything like that. And so we'll have to see as we go through the process and the regulatory approval as to what that looks like, and that will play into our decision as to ultimately what we do. Mark Wilde: And then just the sale proceeds, the expected sale proceeds? Scott Morrison: Yes. I mean we're -- like I said, we're early in the process, and we'll update you as we get more information. Mark Wilde: Okay. But do you see any issues in a prospective sale in getting the capital out of the country? Scott Morrison: There are a variety of ways in which you can structure sales. So I'll just leave it at that. Mark Wilde: Okay. All right. That's good. And then, Dan, just turning to the North American beverage can business. Can you give us some sense of where you're running from a kind of a manufacturing efficiency standpoint and sort of gains -- further gains that we may see as you move through the year with the ramp-up of new capacity and then into '23? Dan Fisher: Yes. You broke up a little there. I think your question was in and around operational performance and the ability to improve. I can tell you in North America, in particular, what I was most excited about the results here in the first quarter was the performance in North America. Aerospace did wonderfully as well. So we're seeing some stability in those two businesses that, quite candidly, we haven't seen for the last 12 to 18 months. I think those will start to build on themselves. We will get to a better asset utilization framework where we're not oversold, hopefully. And with that in tow and the management team with new contracts, new terms and conditions, a clearer line of sight in terms of supply chain, more efficient ability to run our plants, you should see continued incremental benefits and the learning curve. The learning curve in areas like spoilage, like M&R, those things are costly line items when you're starting up a plant, and we're seeing nice progression in all of those new assets. And so I'm pretty bullish that the earnings profile regardless of whether we're 10% growth or 8% growth, I think you're going to like the results coming out of that business moving forward because we've been really honest. We haven't necessarily been what we expected here the last couple of years. And I think we've got our arms around a really good team in place there, and we're going to get after that here in the back half of the year. Operator: Our next question is from Curt Woodworth with Credit Suisse. Please go ahead. Your line is open. Curtis Woodworth: First question just around the tightness in the can sheet substrate market, obviously, conversion fees for that product are going up. So I just wonder if you could speak to your alignment with respect to pricing those contracts against your new capacity ramp and whether you would have any interest in potentially partnering or funding some of the upstream capacity going forward. Dan Fisher: Yes. It's certainly tight. It's been tight. It will continue to be. Our supply base is making incremental investments or have the last four or five years in debottlenecking. And I think everyone believes in the growth at this point, maybe not everyone believe to the extent they needed to, to cut a $2 billion check, which is sort of ballpark what's required to build a new rolling mill. Those are going to start to happen. And we will participate in those, as you can imagine, as the industry leader. And the form of participation will vary. And you'll -- we'll speak more to that in particular as those announcements become public. Curtis Woodworth: Okay. Understood. And then just with respect to -- you kind of said that the CPG companies are feeling, I think, more palpable pressure around conversion recyclability and getting away from plastic. I mean it seems like the past several years, they've been moving in that direction pretty clearly. But are you seeing an acceleration in the thought process there, and then given the fact that you already have substantial capacity backlog through end of '24 at this point, do you feel like there's still decent interest level and bidding activity for new plants beyond that time frame? Do you feel like the CPG companies are kind of pausing with respect to digesting some of the capacity announcements that we've seen? Dan Fisher: Yes. I believe it's more pointed. What you've seen is incremental shifts. And I think what we -- the conversations now are beginning to be category shifts of where cans aren't participating today. And so that -- those are multiyear discussions, you've got to have the supply chain not just on our side but on their side, right? If they're going to shift out of plastic into cans in a big way, they're going to have to make those investments. And so you start having conversations that are in the time frame that you alluded to much earlier and with much more intentionality. And so that's what gives me a great deal of confidence that this is -- we're early innings here still. And so yes, stay tuned. Operator: We have a question from Kyle White with Deutsche Bank. Please go ahead. Your line is open. Kyle Deutsche: In South America, if Brazil remains weak and doesn't rebound quite like you may expect in the balance of the year, is there an opportunity to export some of your production and cans elsewhere in South America? Did you do some of that this quarter? Or are those regions such as Argentina, Paraguay and Chile, are they already balanced from a supply demand standpoint? Just trying to -- just trying to understand any potential offsets you may have if Brazil remains weak here. Dan Fisher: Yes, thanks for that. I think Brazil is our biggest business by a pretty significant amount. And so material offsets in the short term, I don't think those are significant. And having said that, we are constantly supporting other areas of growth, and so those will begin to accelerate, I think, the tail end of Q3 and Q4 with World Cup, et cetera. So yes, if there's an inflection point or you don't see the robust pickup in volume that we're candidly expecting and our customers, more importantly, are expecting then -- and some of those customers, they all participate in these other countries. So we'll work with them and we can ship product and take advantage of other areas within the country or adjoining countries for growth. Kyle Deutsche: Got it. And one on the aluminum... Dan Fisher: And where we are right now, I mean maybe we're feeling a little bit more confident than you are because we are already starting to see a little bit more growth here in April and the early parts of May, even with all of the things that I outlined previously. So, I think you're starting to return to a little bit more normal shipment patterns for various reasons. And so, I don't think we're going to be needing to pull the levers that you indicated, but let's see. Kyle Deutsche: Sounds good. And then on the aluminum cups business, can you just provide kind of an update here as events are definitely coming back. I think you previously targeted being profitable by the end of this year for that business. But I'm really just kind of curious based on the customer discussions that you've had and kind of this early runway that you've had, how big of a business or earnings contribution do you think aluminum cups could be five years from now? Dan Fisher: Five years from now, my goodness. If you asked me if we were going to be in a land war in Europe 90 days ago, I would have said that's crazy. No, I appreciate that you ask. I think this business has a really good opportunity to exit the year with a profitable trajectory in lens heading into next year. The venues are open. The importance of the second line coming on board is 9.1 ounce cups and 12 ounce. We need the entire aggregate portfolio to get to the volume levels across all of the products that our customers want to sell. So that's going to tell us a lot. We are going to be in a number of retailers, every single retail outlet that they own. We're going to see that this summer. That's also going to give us more indication to better answer that question. It's the right question. We're asking the same one ourselves. We're still very bullish as we sit here today on the business. We're going to be in a number of test markets and trials. We're starting to see things like styrofoam cups being regulated. That wasn't in our thought process, even this time a year ago. So, there's more room for opportunity in green shoots than there was this time a year ago. But we're going to have to see how we get on here this summer and how some of these tests go before I can really even indicate what '23, '24 and '25 look like. Scott, we're a couple of minutes over. Maybe we take one more question. Operator: Okay. We have a question from Adam Samuelson with Goldman Sachs. Please go ahead. Your line is open. Adam Samuelson: I appreciate you squeezing me in. Maybe just thinking about North America and coming off of the first quarter where the volume shipments maybe weren't as maybe were a little bit light of where you had previously thought. And can you talk about where your product inventories are today? I think if I'm going back to last year and last summer, that was an area of real stress in the supply chain because your finished product inventories were very tight. And is that something that gives you real confidence about the summer and the peak drink season here that you can serve the customers in a way that might have been tougher and operationally more complex a year ago? Dan Fisher: Yes. Thank you. We're definitely in a better spot than we were a year ago. And in the North America business, probably more so than any other one, depending on what our customers want to do from a mix perspective and a category perspective, what they want to promote. We may or may not have the right mix, but it's a heck of a lot more healthy, and it's going to give us a lot of ability to manage and execute. We exited 2021 in incredibly low levels, and we -- Q1 was tough. Q2 was tough. Q3 was tough as a result. I think our improved performance in Q1 should give you some belief -- it certainly does for us -- that we're in a better position to manage our business in a more proactive manner. And hopefully, that transitions throughout the balance of the year. But there's still an element of mix here that we have to keep our eye on, specifically in North America. Adam Samuelson: Okay, that's really helpful. I'll pass on. Thanks. Dan Fisher: Well, I want to thank everybody for joining us, and we'll get on in the second quarter and look forward to talking to you again soon. Scott, was there anybody left in the queue? Operator: No, not at this moment. Dan Fisher: Thank you Operator: Thank you. That concludes the call for today. We thank you for your participation and ask that you please disconnect your line.

Operator: Greetings and welcome to the Ball Corporation 4Q 2021 Earnings Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. [Operator Instructions]. As a reminder, this conference is being recorded Thursday, January 27, 2022. I would now like to turn the conference over to John Hayes. Please go ahead. John Hayes: Great. Thank you, Malika, and good morning everyone. This is Ball Corporation's conference call regarding the company's fourth quarter and full-year 2021 results. The information provided during this call will contain forward-looking statements. Actual results or outcomes may differ materially from those that may be expressed or implied. Some factors that could cause the results or outcomes to differ are in the company's latest 10-K and in other company SEC filings, as well as company's news releases. If you don't already have our earnings release, it's available on our website at ball.com. Information regarding the use of non-GAAP financial measures may also be found in the notes section of today's earnings release. The release also includes a table summarizing business consolidation and other activities, as well as a reconciliation of comparable operating earnings and diluted earnings per share calculations. Joining me on the call today are Dan Fisher, our President and CEO Elect; and Scott Morrison, our Executive Vice President and CFO. I'll provide some introductory remarks; Dan will discuss our company's performance and trends; Scott will discuss the key financial metrics, and then we'll finish up with closing comments. 2021 was a strong year for Ball. We exited the year with momentum and expect another strong year in 2020. Our global beverage can volumes were up 7%, aerospace revenues were up 10%. Comparable operating earnings increased 12% and comparable diluted earnings per share increased 18% despite ongoing challenges related to the pandemic, adverse weather events, global supply chain disruptions and higher costs. We also increased EVA dollars over 7%, returned approximately $950 million to shareholders after investing over $1.7 billion in capital expenditures in 2021. For the fourth quarter global beverage can volumes increased 7%, comparable operating earnings increased 17%, and comparable diluted earnings per share were up 20% versus 2020 despite persistent dunnage shortages and cool rainy conditions during the Brazil seasonal summer, which muted overall shipment growth in the fourth quarter and the full-year. As we look forward, we expect growth to accelerate further supported by strong demand for sustainable aluminum packaging, aerospace executing on significant contracted backlog, reefing returns on capital deployed, and maintaining pricing leverage across our innovative and sustainable product portfolio. Yesterday in addition to declaring our quarterly dividend and following our review of the company's governance profile, our board of directors amended the company's bylaws to accomplish three things. One, to opt out of the classified board structure required by Indiana Business Corporation Law in order to begin to destagger our board; two, to prevent shareholders to amend the bylaws; and three, to increase the board retirement age to 75 years from 72 years. As per the press release we issued yesterday, the board intends to recommend shareholders approved the amendments at our 2022 shareholders meeting, and more information will be found in the forthcoming proxy statement. In addition, and as part of a multi-year succession planning process that began before the onset of the COVID pandemic, we announced that Dan Fisher will be assuming the role of CEO and then I'll remain Chairman. Dan is ready, and all of us on the board have a high degree of confidence in his ability to lead our great company. Dan will be the 12th person in our 142 year history to have the privilege to serve as Ball's CEO. Going forward I’m handing over the reins to Dan to lead the company and after 70 earnings and M&A calls with the investment community over my 20 plus years with Ball, today will be my last one. You're in great hands going forward. And I can also say with confidence that while I will miss you all I will not miss these calls. My time going forward will be spent sharing the board and its related responsibilities, helping Dan on our sustainability advocacy work with various stakeholders, burling in on the philanthropic work that my wife Susie and I have established, spending more time with family and friends, and perhaps most importantly, being the biggest cheerleader of this great institution. Thanks to each of you for your support over these years. This is an amazing company in an amazing industry working with and in conjunction with amazing people. If you were to give me a clean sheet of paper to design the most ideal job in the world, it would be this and I'm the luckiest person in the world for that. And it is time, Dan has proven that he is ready and has an excellent management team to continue and accelerate the strong financial, operational and cultural performance we have experienced not only since 2010, but indeed since 1999 when I joined the company. When I reflect on becoming CEO the bar was set very high then into me our Drive for 10 vision was intended to replicate or exceed the prior decades performance and returns over the following decade. And you know what? We did just that. And at the same time, as we sit here today, we have more opportunities to continue this growth than we did in 2010. And there's never been a better opportunity set then the company has in front of itself. However, what will be required to capitalize on those opportunities going forward; will no doubt be different than what was required in the past. There will of course be challenges Dan and the team will face, but the leadership, the culture, the people, our EVA and ownership mindset, and our Drive for 10 vision will be there to support and guide Dan and team just to say were there for me and team. Right now, I also think about the more than 24,000 employees around the world. The power of we not me at all is alive and real. And it has been an honor to serve our company alongside them. They really are what makes the company better each and every day. Those aren't just words, it's the truth. So it's with great pride and optimism that I turn the call over to Dan and Scott, to speak to our performance and the outlook for 2022 and beyond. Thank you, everyone. And with that, our new incoming CEO, Dan Fisher. Dan? Dan Fisher: Thanks, John. I would be remiss if I didn't properly and publicly thank John Hayes for his 22 years of service to Ball Corporation, and for his personal support, and mentorship of me as a leader at Ball. Some of you may have listened to nearly all of the 70 earnings and deal-related investor calls John has participated on during his tenure. As you know, John dedicated his time to ensuring the company remained committed to its longstanding culture. EVA and ownership mindset and high ethics, while also being innovative, inclusive, sustainability-driven, and positioning our business for global growth, while also supporting our communities where we live and operate and generating great returns for fellow shareholders. We as owners and students of Ball in our industries are better off, because of his leadership and dedication. We'll forever be indebted to you, John. The performance and stock price development under your leadership speak for themselves. And while it is indeed a team sport here at Ball, John was the team captain for the past decade. John, thank you for setting a high bar for us. I can assure you that speaking on behalf of all Ball employees; we're focused on replicating and/or exceeding the company's performance under your leadership. Another decade with nearly 500% return sounds pretty good. Our team is up to the task. I'm humbled and honored to assume the role of CEO and carry on the Ball culture, Drive for 10 vision, EVA discipline, and ownership mindset. And as the same goes, if it ain't broke, don't fix it. We know who we are. We know where we're going. And we know what is important. Now on to reviewing our performance and outlook. We continue to strive to keep our team safe and educated about vaccinations and boosters and focused on their mental health. We're not immune to the external forces impacting the global operating environment. However, our teams are doing a heck of the job at navigating those external forces and filling in for one another when needed. We extend our well wishes to our employees, customers, suppliers, stakeholders and everyone listening today. 2021 was another year where our Ball team and businesses faced challenges and through it all rose to the occasion to care for one another and deliver value to our stakeholders. In 2021, our business highlights included our global beverage business completing the startup of four new multi-line facilities, three in North America, one in South America and the expansion of existing facilities across all regions. The company also announced five additional Greenfield facilities, two in North America, and three in EMEA, which will come online in 2022 and beyond. Our global aluminum aerosol team introducing new re-closable aluminum bottles for personal care and other categories. Our aluminum cups team signed contracts with the world's largest retailer and continue to have our cup featured at key sporting events and venues. Our aerospace team expanding its infrastructure, opening its state-of-the-art payload development facility in Broomfield, Colorado, expanding our aerospace manufacturing center in Westminster, Colorado, as well as successfully launching the Ball-built OLI land imaging instrument on NASA's Landsat 9 satellite, the XV astrophysics mission spacecraft in the Optics and Mirror Systems aboard the James Webb Space Telescope. Our North America aluminum packaging business continuing progress towards aluminum stewardship initiative certification, following South America's ASI certification in the fourth quarter of 2021, and EMEA's ASI certification in 2020. The company also announced the Ambitious 2030 sustainability goals, including inclusion and diversity goals, recycling goals, and our aspiration to achieve net zero before 2050. Our businesses hired over 2,600 people in 2021 to support our long-term growth and attrition largely due to retirements and returning approximately $950 million to shareholders after investing $1.7 billion in capital expenditures to generate additional profitable growth for decades to come. In 2021, our global packaging businesses absorbed $120 million of non-aluminum inflationary headwinds and additional costs of startup for new facilities. Also, in North America, EMEA and South America, operational efficiencies, price costs squeeze and advance of contractual cost recovery and geopolitical volatility respectively, resulted in loss to reduction and money was left on the table in 2021. As we embark on 2022 contractual price escalators based on PPI and other indices, which phase in throughout the year, normal cost pass-throughs and our additional commercial cost recovery program benefits will generate significant incremental value and support higher levels of growth capital in 2022, which Scott will discuss later. Demand for aluminum beverage cans continues to outstrip supply around the world. We shipped 112.5 billion cans in 2021, 50% were specialty cans and we exited 2021 with 12 billion units of new installed capacity. We also have plans in place to exit 2022 with another 12 billion units of new installed capacity. Capacity available to sell through in 2023 and beyond, announced projects in line additions in existing facilities all underscore our late 2020 Investor Day commentary and additional long-term EVA generating contracts for committed volumes are now in place to domestically supply our customers in the regions where we operate in 2022 and beyond. In addition to global beverage, our aerospace aluminum aerosol and cups teams continue to win new work and position and train talent to support multi-year growth and offset attrition largely due to retirements. To all the teams listening, thank you for finishing the year strong and leaning into another year of growth. We also appreciate your efforts to operationalize and commercialize sustainability, drive our D&I goals and live the Ball culture. As we discuss throughout 2021, growth isn't always linear. We continue to rely on our supply chain raw material inputs and look forward to additional investments being announced in 2022 to enable more growth for aluminum packaging. Given our established global scale, significant increase in installed capacity exiting 2021, our capable asset base and innovative product portfolio we're on course to achieve double-digit global volume growth and global specialty mix in excess of 50% for full-year 2022 and sold out market conditions continuing beyond 2022. Now a few brief comments on each region. In North America beverage fourth quarter shipped volumes were up 5% and versus 2020 fourth quarter excuse me -- fourth quarter 2019 volumes were up 16%. During the fourth quarter, earnings were up nearly 17% as volume growth specialty mix, and the operational benefit of better finished goods inventory levels, more than offset higher cost and operational efficiencies and legacy plants brought about by dunnage tightness and indirect supply chain disruptions. Glendale and Pittston exited 2021 with four can manufacturing lines installed and each have room for additional lines. Our Bowling Green Ins manufacturing plant started up successfully early in the quarter and continues to operate after incurring some roof damage during the December South Eastern U.S. tornado outbreak. We are thankful our Bowling Green team and their families are safe. The plants teams leadership safety actions and post event resiliency were outstanding. The business continues to work to build adequate inventory levels is ongoing. These actions formulate contractual price increases, higher levels of domestically produced cans, and cost recovery will further position the plants and our business for strong double-digit growth in 2022. Ball's previously announced multi-line Greenfield plants in Nevada and North Carolina are supported by long duration contracts with strategic global customers and are on track to come online in late 2022 and early 2024 respectively. In EMEA, shipment volume for the fourth quarter was up 6% versus 2020 on tougher comps given prior-year's 20% volume increases due to COVID reopening timing, and were also up due to customers adding new can filling investments. Across Ball's EMEA business, demand trends and positive momentum continues. Near double-digit growth in 2022 will be driven by new and existing categories utilizing cans and available cans from our 2021 line additions and speed ups across the region. In 2023 and beyond, our new Greenfield plants in the UK, Russia, and Czech Republic, which are supported by long duration contracts for committed volumes with global and regional key partners will extend our ability to serve growing customers and categories. Our EMEA team is executing very well in managing complex country-by-country supply chain issues. Key inputs are in tight supply, and though we have contracts and mechanisms to control costs, we're keeping a watchful eye on driver availability and pandemic-related labor shortages impacting timely stocking in store shelves. In South America, fourth quarter volumes were up 3% versus 2020 and up 16% versus 2019. 2020 volumes were up 12% versus fourth quarter 2019 due to timing effects related to COVID rebound and warmer temperatures during the seasonal summer fourth quarter. Cooler than normal seasonal temperatures and excessive rain in Brazil contributed to softer than anticipated volumes during the fourth quarter of 2021. We continue to see more earnings upside in South America in 2022 and beyond. The Frutal Brazil plant start-up its second line during the first quarter of 2022. Additional investments throughout the region continue to be on schedule. In summary, our global beverage team is preparing ourselves and our supply chains for long-term durable growth while managing notable volatility. Our customers are continuing to lean on the can as their package of choice, as brand proliferation and the blurring of the category lines accelerates. We are operating safely controlling the things we can control, recovering costs, delivering high quality cans to our customers and even more new facilities supported by equitable contracts and closely monitoring global supply chains. Our aluminum aerosol team did a good job supplying growth across North America. The team continues to manage varying degrees of consumer demand volatility in Brazil and India. The business continues to make progress on the rollout of refillable reclosable aluminum personal care and bottle packaging across multiple categories. To support the new cups contracts I mentioned early, we have increased marketing investments and are adding another cup manufacturing line in our Rome, Georgia cups plant. Following this investment, both lines will be capable of making multiple cup sizes. We anticipate profit starting in late 2022. And turning to aerospace, the team continued to win contracts and maintain record backlog. Segment operating earnings were up 38% in the fourth quarter versus 2020 supported by improved program execution. Carrying in the momentum from the fourth quarter, the business continues to be positioned for sales and earnings growth in 2022 and margin improvement in 2022 given the contract mix. Across all our operations, we are increasing year-over-year capital in training investments to deliver on strong contracted demand and position our plant operations for success. We appreciate all of the amazing work being done across the organization. And with that, I'll turn it over to Scott. Scott Morrison: Thanks, Dan. Dan and John, I couldn't be happier for both of you. Congratulations, John. Thank you, first and foremost for your friendship and for everything you've done for Ball. It's been a hell of a lot of fun. And thank you for your continued thought leadership on sustainability going forward. Dan, I'm very happy for you, your family and for Ball. This is a great day. You're a great leader and ready for this role. I look forward to us continuing to work together. I have one word of advice for John. Work on your putting. When you don't have the CEO title, you're much less likely to be given those three foot putts. And now to the numbers. Fourth quarter 2021 comparable diluted earnings per share were $0.97 versus $0.81 in 2020, an increase of 20% and comparable full-year 2021 diluted earnings per share are up 18%. Fourth quarter and full-year sales were up due to pass-through of higher aluminum prices, higher sales volumes, and improved mix. Comparable fourth quarter diluted earnings per share reflects strong results in North America, aerospace and other non-reportable, and lower year-over-year corporate cost during the quarter offset by unfavorable Euro earnings translation. In addition, the Ball and Platinum Equity announced sale of the Ball Metalpack investment closed yesterday. As a minority partner, Ball's net proceeds from yesterday's transactions were approximately $300 million. The sale represents the final step involves two step exit from the tin-plate steel food and aerosol businesses. Recall that Ball received approximately $600 million in cash proceeds in 2018, but our legacy steel food and aerosol assets were sold into the minority owned JV with Platinum. Ball's balance sheet is very healthy with ample liquidity and flexibility. Year-end net debt to comparable EBITDA was 3.4 times and within our optimal leverage range. As we sit here today, some additional key metrics to keep in mind for 2022. Our full-year effective tax rate on comparable earnings is expected to be in the range of 19%. Full-year interest expense will be in the range of $270 million and full-year corporate undistributed costs recorded in other non-reportable is expected to be in the range of $120 million to reflect higher year-over-year incentives based on anticipated higher performance and investments to our systems infrastructure to support our robust growth. At this time, and given additional growth projects in all of our businesses to support EVA enhancing contracted volumes, we expect 2022 total CapEx to be at least $2 billion and to return in the range of $1.75 billion to shareholders in the form of share buybacks and dividends in 2022. We continue to see a path to doubling our cash from operations by 2025. And look forward to even more opportunities to invest in our businesses for profitable returns. Rest assured, Ball continues to be good stewards of our cash as fellow owners and through the lens of EVA discipline, we will prudently balance growth opportunities with consist return of value to our shareholders via dividends and share repurchases. We look forward to consistently investing in our business and returning even more value to shareholders in the coming years. With that, I'll turn it back to you, Dan. Dan Fisher: Thanks, again, Scott. In summary, our Drive for 10 vision continues to serve as our guide. We know who we are, we know where we're going, and we know what is important. We are positioned to exceed both our comparable diluted earnings per share long-term goal of 10% to 15%, as well as our EVA dollar growth goals of 4% to 8% per year in 2022 and beyond. While we are not immune in facing inflation, volatility and supply chain headwinds in the near-term, we are confident that we will get through it successfully and maintain our pricing leverage. Over our 142-year history, it has been done before, and it will be done again. The decadal shift that will favor our packages is happening. We look forward to continuing our journey and being close to our customers, focusing on attention to detail, acting like true owners of the business, being good corporate citizens to our people and our planet and returning value to our shareholders. And with that, Malika, we are ready for questions. Operator: Thank you. [Operator Instructions]. Our first phone question is on the line of Christopher Parkinson with Mizuho. Please go ahead. Your line is open. Christopher Parkinson: Good morning and congratulations on incredible career John and good luck in all your future endeavors, and also to you, Dan, congratulations, on your new role as CEO. Dan Fisher: Thank you. Christopher Parkinson: I just -- I was just wondering if you could just parse out a little bit more the volume trends by region and specifically you discussed some headwinds in South Americans weather-related impacts, in the fourth quarter, I think in North America on overall earnings, when we think about 2022 and some of those headwinds, maybe not recurring, how should we think about that demand progressing throughout the year? Dan Fisher: Yes, great. Maybe I'll start with kind of how we're seeing 2022 and the growth by the three large regions. Commented in my prepared remarks, and as you know, we've installed quite a bit of the $12 billion capacity that's exiting 2021 is in North America. So you would expect, and that's what we anticipate double-digit growth in that region. In Europe, we've made a lot of incremental investments. And so we think that that team will be able to deliver near double-digit growth. And in South America, we anticipate we've commented on the 4% to 6% long-term growth trajectory. We anticipate being north of the -- or in the higher range of that. And in all total, I mean, we've got a really strong chance to get to double digits in the global beverage business with the capacity we've installed and the demand profile and the execution. A little bit more commentary in and around South America. We were just talking to that team the other day. I mean, keep in mind, in the fourth quarter, I think in Brazil, in particular, that's really where we had some demand disruption versus sort of what we anticipated ending in the quarter. I think the rain in Brazil was up something like 300% versus a normal rainfall estimate. And then there were a lot -- that's their peak season, and COVID started to show up in November and December and they shut down a lot of opportunities for folks to congregate and get together and consumed can beverages. So those were the two fundamental issues that precipitated in Brazil. The good news and why we were able to deliver growth is we're -- we play in a lot more areas and countries in that region than in Brazil. And so that's what trended us toward growth is, we had a really nice performance in a number of the other countries that we participate in. As we sit here today, COVID still persists. And so we're obviously monitoring it. It is peak season. The rain has stopped. The weather has improved. Those things are moving in a direction for South America, but we need to get beyond, what the entire world's dealing with relative to Omicron to see us return to kind of what we should anticipate normally in the first quarter in South America. Christopher Parkinson: All right. No, that's extremely helpful. And then just a really quick one, obviously, whether it's been supply chain logistics, raw materials, a lot of people have been dealing with higher costs. And I think you mentioned you initiated additional cost recovery mechanisms throughout the quarter. If we assume that this persists a little bit longer into, let's say the first half of next year. Can you just discuss a little bit more what those actions are in terms of your cost recovery actions and any additional leverage you can take to help offset this in the near term? Dan Fisher: Yes, thanks for that. So one thing, to keep in mind is, we didn't make this as clear -- we're doing it in all of our businesses. So that's one thing that wasn't maybe as clear, when we commented on this plan of attack at the last earnings call. The teams are fundamentally going out and having conversations in a Ball fashion with each one of our major customers. And so we're sitting at the table as partners and we're having those conversations. And I would say the feedback at this point overwhelmingly is we've made really good progress. We will see that improvement in 2022. One of the things you're pointing out is those conversations start with a point of view on what the world looks like. And so two months ago, I don't think anybody anticipated what was on and energy prices for instance, and the Ukraine impact. So we will have to have ongoing conversations as things in the world show up that none of us have anticipated or modeled, but the team's done a really nice job. And I think we're working toward a really nice plan and we should see that show up in 2022. Operator: Thank you. And our next question is from Ghansham Panjabi with Baird. Please go ahead. Your line is open. Matt Krieger: Hi, good morning, everyone. This is actually Matt Krieger sitting in for Ghansham. First off, congratulations to John and Dan, on the announced elections and transition yesterday. I just dive-in right into -- just dive-in right into my first question here. Can you provide us with an update on some of the key growth categories across the beverage can market, with a particular emphasis on some of the categories that may have seen some choppiness over the past year -- years, so such as, as hard seltzer and other product, it seems like there's plenty of new introductions and momentum elsewhere, but if we could get some details on that that would be great. Dan Fisher: Sure. And I'll attempt to parse out some of this by region. I would say globally, energy drinks are on fire. And we have a -- we have a very strong position with a number of those folks. And so we've benefited from that in terms of our growth profile. Beer continues to grow across the world. But I'd say we saw an inflection of CSD as well in Europe. And we have a strong position there. In South America, all of the growth was fundamentally muted by weather patterns, but again, beer is the dominant player there. So growth happens in -- growth happens or doesn't happen as a result of beer in South America. In North America, in particular, we saw growth in CSD, double-digit growth in energy, sparkling water, slight growth, domestic beer was down. Hard seltzers were down slightly. And craft beer was down slightly. But the largest category CSD and energy kind of for us and our portfolio did well. And that's what sort of carried today for us in North America. Matt Krieger: Great, that's helpful. And then can you talk a bit about how free cash flow is expected to evolve in 2022? Maybe bridge 2021 to 2022 and then can you comment on some of the challenges or hurdles that you have to get over in deploying over $2 billion of capital in an environment that is increasingly marred by labor shortages and disruptions and kind of absenteeism? Some detail there would be great. Scott Morrison: Sure. On the free cash flow front, we actually did a little better in 2021 than we expected, we had some milestone payments that we collected really from our aerospace business that helped us. Also if, when commodity prices rise, when aluminum rises, we get a benefit from a working capital standpoint, because we have longer payable terms than we have receivable terms. And so that helped working capital in 2021. In 2022, we're kind of expecting relatively flat commodity prices and expecting free cash flow to be or working capital to be relatively neutral. As it relates to deploying the capital, our teams have done a fantastic job of all the new builds, all the incremental lines that we put in plants, on time, on schedule, there's a slip here or there for maybe a week or so. But I have to commend our operating folks; they have done a spectacular job. Despite all the challenges, despite the COVID challenges, despite the supply chain challenges, they've really done an excellent job. So it's not without challenges. But I think we have a really good plan as to how we're going to deploy this $2 billion of capital. And we expect the strong performance operating performance to continue. Dan Fisher: One build on Scott's comments relative to the execution of deployment. Remember, three, four years ago, what we decided to do was create a global engineering organization. And so we have the ability to deploy resources, not region dependent, but where the work needs to be done. And that team has done a remarkable job of organizing itself, standardizing installed base, I think we got upfront of the process equipment by, I think there's been a lot of things that we've done right over an extended period of time that are now showing up. And you can't underestimate the fact that we're hiring people well in advance. We're training them, when they come in, they know what to do. They feel safe, operating in our environments. And I think that's enabled us to retain people, far in excess of kind of what the industrial manufacturing sector is doing. So knock on wood. We're really encouraged about what we've done. And it's a really good building block and gives us a great deal of confidence that we're going to be able to continue to do that over the next 24 months. Operator: Thank you. Our next question is from the line of Anthony Pettinari with Citi. Please go ahead. Your line is open. Anthony Pettinari: Good morning. And congratulations to John for everything you've accomplished and to Dan as well. Dan you talked about adding 12 billion cans this year after adding 12 billion last year. From a big picture perspective, can you walk through your major regions and maybe just discuss, which might require imports this year and are extremely tight versus maybe regions where your supply situation might be getting maybe more comfortable or more normal? Dan Fisher: The 2021 capacity and you could -- it's probably reflected in my commentary for where we see growth in 2022 was overwhelmingly in North America. We did put in a Greenfield facility in South America we'll see the benefits of that. And we did incremental investments in both South America and EMEA. But transitioning in 2022, there will be more capacity going into South America, and North America, that's where the majority of the $12 billion exit rate of installed capacity will come from. And then in 2023, you'll see -- in 2024, you'll see a pretty significant step up in EMEA. Anthony Pettinari: Okay, okay, that's helpful. And then just on EMEA, you obviously have a large Russian business. Do you anticipate the moving the Ruble and intensions there to have any financial or maybe operational impact in the quarter? And can you help us understand how you might be sort of insulated from geopolitical risk? Or how you're thinking about that? Scott Morrison: Yes, what truly runs is a dollar-based business as most of the Russian economy does tied to oil. So and our treasury team does have an incredibly effective job of insulating us from valuation changes in the currency, so you don't see much of that, to be honest. Operator: Thank you. Our next question is from the line of Mike Leithead with Barclays. Please go ahead. Mike Leithead: Great. Thanks for taking my question. And I want to echo my congrats to both John and Dan. First on beverage packaging and in the America, just as we're bridging to 2022 and earnings potential for that business can you maybe just help us with what one-time occurrences that hit the expense line that should roll off as we get into this year? And just what type of operating leverage we should expect from volume growth as well? Dan Fisher: I'll make a comment and then I'll give it over to Scott for additional detail. I say when we talk about -- when we talk about time and time again, here in the prepared remarks, sort of the net inflation drag the majority of that was North America related. And it's how we pass-through inflation in our PPI mechanism. So when you're thinking about a year-over-year bridge, you should see the benefits of that inflation transition show up throughout the year, because not every contract renewal happens on January 1. There were, as you can imagine, countless supply chain challenges, et cetera. I'm cautiously optimistic that the supply chain and the ecosystem is going to stabilize somewhat, I can't guarantee that. But I do believe you'll see improved performance because we have exited North America in a much healthier inventory position in 2021, heading into 2022 than we had in 2020. That should improve the net inflation pass-through. And I'm very encouraged with the execution as we just commented on in terms of the project, those will all be there for us to lean into. I expect North America to have a really nice year next year. Scott Morrison: Got it, I mean the only thing I would add is exactly on the PPI adjustments, some happened in the first quarter, some happened in the second quarter, and some won't happen until the third. By the third quarter, we should see all of that benefit, or all of that cost recovery coming back to us, if you will. Mike Leithead: Great, that's super helpful. And then second, just on capital deployment. If we go back to the Investor Day, should be about a year or so ago, you talked about roughly a billion dollars of CapEx per year through 2025. And now it seems like we're going to be running at double that this year and maybe a little bit that's coming out of buybacks versus what you talked about last quarter. So can you just talk about what's driving that change? I'm just assuming the organic growth opportunity has simply gotten better. But just any color on kind of how you're looking at that and the tradeoffs there? Scott Morrison: Yes. I think it's really the organic growth continues to strengthen. We're entering into additional contracts, long-term contracts with customers. And so we have a high degree of confidence in deploying this capital. It really hasn't changed a heck of a lot from our view in our Investor Day in 2020. If anything, it's just gotten firmed up more and become more real. And so we're executing on those plans. Operator: Thank you. Our next question is from the line of Arun Viswanathan with RBC Capital Markets. Please go ahead. Arun Viswanathan: Sorry about that. Good morning. Thanks for taking my question. Congrats on the retirement, John, and congrats to you, Dan as well. Dan Fisher: Thank you. Arun Viswanathan: I guess just wanted to understand, we did hear some rumblings of some demand pullback, or even some -- maybe some COVID impacts in Q4. But it doesn't seem like there was any real impact on your business. I guess was there any COVID impact? And I guess, going forward, I guess, would you expect any impact from absenteeism or anything else like that, that would linger and potentially put some of your projects at risk? Dan Fisher: Yes, thank you for that question. I would say COVID didn't impact our demand with the exception of precautions in South America, where it's peak season down there. And they didn't allow for the public gatherings to the same extent. That's the one where it's most acute. And we can describe that and understand that. We're absolutely experiencing some impacts to production here in the first couple of weeks of January. I mean, it's the wave of Omicron is hit. I think we had nearly double-digit dislocation of our manufacturing folks in all three regions here. Last week, it's where it peaked. I think it's sharply rose, and now it's sharply declining. So I think, we got a chance to deliver a strong first quarter. But yes, on the demand side, COVID, with the exception of South America, I'm not entirely sure we saw much impact. And I think the other question that you had was just relative to demand profile in general. For us, we've been very fortunate that the partners that we have are winning in the marketplace. And so I think in that regard, and we've, obviously, there's a ton of focus and has been for the last six months, the spiked seltzer category, we had minimal exposure to that, coupled with the fact that a number of our key partners are doing extraordinarily well in the marketplace. So that may be an insulation from maybe other participants in the market. But I'll leave it there for now. Arun Viswanathan: Thanks for that. And then, just as a follow-up, I guess, you obviously had talked about the 25 billion and 45 billion of units that you plan to bring on. That was about a year ago. There has been some other announcements by yourselves and other competitors subsequent to that. Do you still think those are kinds of the range that we'll expect to see? Or you see that maybe there's some upside to that or given the demand continues to be robust that some of these markets are on fire. I've seen some real strong numbers in the RTD ready to drink cocktail market as well. So maybe you can just update us on your capacity plans and maybe for the industry as well? Thanks. Dan Fisher: Yes, first is our Investor Day 2020 late 2020, when we sort of laid out a multi-year growth plan. So as we sit here today and was referenced in a previous question, we've spent capital in excess of what we had planned at that time, up to this period, which is all good. We have really solid contracts to back it, EVA generative opportunities. So based on what we've seen thus far, we're going to take advantage if those opportunities continue to show up and manifest in the same way we'll lean into them. We've got a healthy balance sheet, as Scott's already indicated, and if there's more opportunity to grow, we'll take advantage of it. I think one thing that is a sign towards more growth is if you reference and maybe Ann could send this out as part of our materials. But Ellen MacArthur Foundation produced the top 10 CPG companies and their producer responsibility, recycled content targets over the next five years. Every one of them has a significant improved target position that they've said publicly, and they can't get there without aluminum is the bottom line. So we didn't see that type of target in earnestness behind public targets from our largest customers. They're out in the public domain now and they're going to have to hit those. So there's quite a lot of belief, at least as we sit here in Broomfield, Colorado today that we've got more upside than we do downside in those projections. Operator: Thank you. Our next question is from the line of Angel Castillo with Morgan Stanley. Please go ahead. Your line is open. Angel Castillo: Hi, thank you for taking my question and congratulations to you both gentlemen. Just wanted to follow-up on the volume number that you noted for the fourth quarter of 7%. Given what you kind of outlined for the various reasons it seems like there might have been, maybe more in the kind of non-reportable segment that was strong growth. And I assume that's essentially imports to, whether it's North America or other region. So I was just wonder if you could give us a little bit more color on, kind of what the numbers were for the non-reportable. And then, for imports, as you see those into 2022 how should we think about those in terms of absolute numbers versus the strong 2021 that we saw? Dan Fisher: Yes, thanks for the question. You're exactly right. The other non-reportable was up double-digits. And it's from our -- a combination of our joint ventures around the world majority owned assets. So think Saudi Arabia, Southeast Asia cans were going into markets that were oversold from all of those areas. So that contributed to the uplift. I haven't [ph] made the comment on imports. I can tell you from our position we are oversold in all three markets heading into the year. And we will have to continue to shift in unnatural patterns from those locations into Europe and North America in particular in 2022. I can't comment on the competitors. But we'll continue to see import cans for sure from us to the extent that our competitors need them. I don't know that information. Angel Castillo: Got it. And in terms of finished goods, you noted that inventory as you continue to work towards normalizing that. I think in the past, you've given kind of a sense for in terms of days where we are today versus historical. Could you just kind of update us on that how much more work there is left to do to get to a place where you really feel kind of back to normal and have good inventory heading into kind of the summer season? Dan Fisher: I think in Europe, we're very close to where we need to be. And in North America, I don't have the specific number. I think it was in the range of will be 10 days better than we were a year-ago. In terms of finished good and that that can be a -- two weeks is, is a much better buffer than how we ended the -- began the year last year. Operator: Thank you. Next question is from the line of Salvator Tiano with Seaport Research Partners. Please go ahead. Your line is open. Salvator Tiano: Yes, thank you very much. And John congratulations on the great carrier and Dan congratulations on the new role. Dan Fisher: Thank you. Salvator Tiano: Firstly I want to ask a little bit about hard seltzer market. And since recently, there have been some introductions in some more mainstream products with glass packaging. And there seems to be some saturation with all these brands and having all these different products of this substance. Really small subcategories of what was the hard seltzer market? Do you see any reef there that some of your customers in order to differentiate themselves may start people think it will be towards other packaging substrates? Dan Fisher: No. I think the can because of the recycled content attributes and because of the commitments from all the major CPG companies. They just can't get to these commitments by transitioning into these other substrates. It's -- it'll be dilutive. I think the can is winning, it will continue to win every metric we have suggest. We're doing more with our major customers and they're telling us they're going to lean into the can more and more. So that -- from that standpoint, I think we're in a good spot. And then I just refer you to previous commentary on the spiked seltzer market. Our exposures very limited to that. And yes, I'll leave it at that. Salvator Tiano: Okay, great. And, I know you've discussed topics before unless I need support, but I'm just wondering, what do you think about the high -- the elevates CapEx number this year and especially next year's guidance? If you were to look a few months or a year back, how have things changed just because of inflation on that $2 billion figure? Dan Fisher: Inflation is a part of it, but a very small part. The real driver is opportunities that we have to deploy capital. It's too bad during COVID. We're not doing plant tours and things, but if you went to Glendale, Arizona, that would be a great example of investments that we're making that are really just spectacular facilities. So it's really driven more by opportunities and increasing our capacity versus inflation. I mean, there's definitely some inflation in steel and putting up buildings and things like that. But that's not what's driving the increase. Operator: Thank you. Our next question is from the line of Phil Ng with Jefferies. Please go ahead. Your line is open. Phil Ng: Hey, guys. Congrats, Dan in a new role, and John, thanks for all the help over the years. Dan Fisher: Thank you. John Hayes: Thank you. Phil Ng: My first question, Dan, you've been pretty explicit saying that 2022 North America is going to be sold out again. But when we think about supply demand for 2023. How are you thinking about it? I mean, are you expecting to get more balanced at that point, are still pretty much on allocation? Dan Fisher: Yes, 2022, 2023. It's a great question. 2022 what we see in front of us were oversold. 2023 will continue to be tight based on every conversation that we're having with our customers. I just continue to think this is the case. No, I don't think this is a 2022, 2023. Things get right supply demand balances out; I think the sustainability tailwinds are so pronounced. And the commitments are now so public from our customer base that they are going to have to move into aluminum to hit those goals. And so that's what we're monitoring right now. Phil Ng: Okay. That's really exciting. And then may be a question for Scott. For 2021, you had a net inflation drag from some of these non-metal impact. Did you call out what that headwind was in 2021? And for 2022 how should we think about startup costs relative to that $42 million you saw this year, and will have a bigger impact on margins in South America, just given the amount of capacity that's coming on in that area? Scott Morrison: Yes, in terms of the inflation, it was over $120 million of net inflation that we had to take in 2021. The vast majority of that being in North America, the rest most of the being in Europe. As it relates to startup costs, we had $42 million in the U.S., we had $50 million overall. So we thought we'd be a little higher in the U.S. more of that a little bit of that shifted into the first quarter. So we won't see a decline necessarily. I think startup costs will still grow a little bit, because we're still looking at expanding facilities here. As it relates to South America though the startup cost really gets driven by North America where labor rates are higher. And so bringing people in six months early to train is more costly than it would be in South America. So while South America will have a tick up in startup costs, it's not gigantic. Dan Fisher: And Phil -- Phil Ng: Got it. So, Scott. Sorry, go ahead. Dan Fisher: A build on -- a simple build on that is if we're spending capital at a light rate, and we're standing up capacity in Greenfield's at a light rate, you'll start to see us comment less on startup costs, because it's a recurring expense. And so, the reason we spoke on it from 2020 to 2021 is a significant step-up in some very large Greenfield facilities. And it was material so that's why we commented on it. So I think we'll probably dissipate from those comments moving forward if we continue to spend, which for the foreseeable future we are. Phil Ng: Got it. That's awful. And then, Scott the $120 million of debt inflation that is $120 million that you're behind, right? I mean, that you need to hopefully recoup this year. Is that the right way to think about it? Scott Morrison: Yes, most of that we had to took down in 2021. And then we mentioned about our PPI escalators that we have most of our contracts we'll recover that, but we'll recover some in the first quarter, some in the second quarter. And by the third quarter we should have most of that recovered. Phil Ng: Got it. And then -- Scott Morrison: Every contract is different and so it's not necessarily dollar-to-dollar, but it's pretty close. Phil Ng: Okay. And then we've seen magnesium prices take up a little bit. Is that something you guys feel good about passing through it pretty timely. And then at least please getting supply as well particularly in Europe? Scott Morrison: Yes, the metal capacity. So it's just a component of the metal. And things are volatile, I would say the supply chain is very tight and the metal supply chain is very tight. So I'm more concerned about that than I am about any particular component of the metal price. Operator: Thank you. Our next question is from the line of Kyle White with Deutsche Bank. Please go ahead. Your line is open. Kyle White: Hey, good morning. Thanks for taking the question. John, congrats on tremendous career and Dan, congrats on the new role. Dan Fisher: Thank you. Kyle White: I wanted to ask about inventory levels, but more at the customer level. I guess you have a sense in terms of where your customers are at from their inventory standpoint, specifically in North America. And how much rebalancing do you think needs to take place anywhere to potentially quantify in terms of how many billion units you think they're short on inventories? Dan Fisher: Yes. I don't have that detail in front of me. I think the team is marshaling through a really thoughtful inventory build plan in North America, specifically, we're in a much healthier position year-over-year. I mean, keep in mind, we understand our A level inventory is probably 80% of our sales volume. We've got annual forecasts that we're operating off of, a lot of the labels that you'd see right now would be super Ball related, et cetera. So anything that would be a change in graphics, I think we've got good line of sight into, and I think the team is going to execute really well here in the first quarter. Kyle White: Got it. And then I wanted to touch on CSDs, particularly in North America. I mean, historically, this category was driving declines for the industry, but it's now experiencing some growth, which is quite meaningful, given how large the category is. I'm just curious, what you're hearing from your key customers on this in terms of what is driving that growth? And are they bullish on it such that they are actually investing in incremental filling capacity for it? Dan Fisher: They're absolutely investing and filling capacity for it. Demand aluminum, it's a combination of a slight substrate shift or leaning and all the new products that are being launched in North America are being launched in cans. And it will be interesting to see habits have clearly changed over the last two years, there's more at-home consumption, and that at-home consumption, overwhelmingly benefits aluminum packaging. And so I think the combination of all those three, we're talking to them. We're planning longer-term, in terms of maturity and supply. And I'm kind of bullish on that segment for the foreseeable future. Operator: Thank you. Our next question is from the line of Mike Roxland with Truist Securities. Please go ahead. Your line is open. Mike Roxland: Thanks very much. Good morning, everybody. Congrats, Dan, on your additional role. Dan Fisher: Thank you. Mike Roxland: And congrats John on all your accomplishments. And in particular, your retirement from all these earnings calls. Just first part of this is probably on what Phil mentioned and Daniel response to the oversold in 2022. Dan you mentioned 2023 will be tight. But you need the word oversold. So I'm wondering how much of your capacity production is accounted for in 2023 at this point? Dan Fisher: I would say 95% is accounted for. There's probably an element of spot volume. But keep in mind; we've got contracts that roll over at various times. And so it's not a 100% contracted, but it's overwhelmingly contracted. And I wouldn't parse out the -- my comment about not saying we're oversold. I'll give you more detail when we get more into 2022 as it relates to 2023. And we have conversation with our customers right now. Everyone is laser focused on trying to navigate they're here and now getting cans on the shelves. And so we're talking about 2022. But I think our capacity that we're putting in place, as we've said now for several years, it's contracted. It's EVA generative, and it's going to -- we're going to like the returns. Scott Morrison: And remember, it's January of 2022. So we've been surprised by the upside since our Investor Day. And we're not making great predictions about 2023. But to Dan's comments, everything we're seeing looks pretty dark good. Mike Roxland: A bunch of great color. And just one question following-up on inventories and current supply chain logistics issues. How should we think about -- how do you think about inventory levels coming out the other side of COVID. So obviously, you had a certain level of level of inventories pre COVID. Should we expect that inventories or you'll be managing to a higher level of inventory going forward? To me -- my sense is that this just in time needs to be modified given what everybody has been experiencing in the last call it 12 to 18 months. I'm not sure what your thoughts are, but just want to get your thoughts around inventory management on a go-forward basis. Dan Fisher: Yes, I've been in manufacturing for 30 years, and for 29 of those, we've been moving jobs overseas. And we've been low cost country sourcing, and we've gone to a just in time mentality. And I think all of that will change moving forward. I don't know what that means in terms of working capital, use of cash, I would imagine there would be a combination of folks are going to get a hell of a lot smarter and more effective and efficient on the stocking levels, they have to manage that working capital. But you would think you're going to have to buttress the working capital with trucking continues to be a concern, a number of things that you're managing, but I think this just in time inventory phase may be a thing of the past for the next few years. Mike Roxland: Got you. Good luck in 2022. Dan Fisher: Terrific. Thank you. Malika, we are a couple minutes over. So maybe we take one more question. Operator: Certainly. Next question is from the line off of George Staphos with Bank of America. Please go ahead. Your line is open. George Staphos: Hi, guys. Thanks for fitting me in here. Dan Fisher: George, we've got you. John Hayes: We got you. George Staphos: Oh, my gosh. Well, congratulations to both of you in the next chapters and John, in particular, it has been great working with you the last 22 years and congratulations on all the performance. I guess I have two questions. I guess, first of all, thinking about Europe and what's been going on there from a geopolitical standpoint, are your customers? Are you doing anything differently to manage against the risk? I don't know that you could. But if there is anything that you could share on how you're guarding against that would be appreciated. Second question, bigger picture, Dan, how do you see the company's evolution on a couple of fronts over your tenure relative to John's tenure vis-à-vis what you're going to do to promote sustainability in aluminum place and how the footprint of Ball's facilities evolve over time you have all these opportunities coming in, you're spending more capital and you should be given the EVA returns that you're seeing, what's it going to mean in terms of your typical plant in terms of its flexibility, size, modularity, and so on. Thanks, guys and good luck in the quarter. Dan Fisher: Yes. So a lot there. I will tell you, the thing that I'm most proud of to inherit in this role is that and John has steward us to this point, we are a sustainability company. All of our strategies in all of our businesses are tied to circularity. And even in aerospace, we have a wonderful opportunity to lean into our climate censoring technology, our data analytics. And so I think that does a couple of things for us. If you don't have sustainability tailwind, you've got a headwind and our businesses have tailwind. The other thing is, it's an incredibly powerful attractor of talent, not just our incredible culture here at Ball. But folks want to make a change; they want to make a difference. And they can do that at Ball. And so I'm going to lean heavily into that. And I think the leadership team that's supporting me and supporting our 24,000 employees, all believe in that. And so what that means, we have to tell our circularity story, we have to own the aluminum story, we have to improve every aspect of that story. The primary goal of that is recycled content. And I think our supply chain partners know that, we know that. And we're going to try to influence the hell out of that over the next decade. One of the things that John commented on in his prepared comments are, I asked John specifically to stay in role and support this business because he has been a foundational element and storyteller of our product. And John is going to continue to do that at the highest levels of our government, and stakeholders around the world. And we're going to lean on that and continue to build off that. I'd say that that our 24,000 folks are going to are going to define our future a hell of a lot more than Dan Fisher is. But what we have this culture, how we focus on our capital investments, and the company being a sustainability company, first and foremost is something that we've got a hell of an opportunity to build on, George. George Staphos: Understood. And on Europe and footprint and I will leave it there. Dan Fisher: Yes, the risk profile maybe I'll talk, we do a phenomenal job. We have a significant presence in Russia. We -- as Scott has indicated, it's a dollar based business that's where the most speculation and geopolitical stability -- instability is right now maybe I can have Scott talk about how we look at hedging, how we protect ourselves in contracts and energy contracts, et cetera. George Staphos: It's more about what your customers might be doing or not doing and maybe it's something we'll take offline, but it wasn't so much to hedging, but what are you doing to prevent against risk and your customers as well? Dan Fisher: Yes, they're still investing. They're investing in filling lines at an accelerated rate versus what we've seen historically, they're still bullish. We're still bullish on aluminum cans. And that's why we're continuing to lean in with candidly three new Greenfields in Europe that is a significant -- that's a significant statement by us and our customers that have been contracted for those facilities to continue to grow in those areas. George Staphos: Okay, Dan, why don't we table it from here. Thanks very much for the time and good luck in the quarter. Thanks guys. Dan Fisher: Thank you, George. Dan Fisher: And Malika, with that I will just thank everyone for their questions and look forward to speaking to everybody at the end of the first quarter and everybody stay safe. Operator: Thank you, ladies and gentlemen. That does conclude today's call. We thank you for your participation and ask that you please disconnect your lines. Have a good day.

Operator: Greetings and welcome to the Ball Corporation Third Quarter 2021 Earnings Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded Thursday, November 4, 2021. I would now like to turn the conference over to John Hayes. Please go ahead. John Hayes: Great. Thank you Dina. Good morning, everyone. This is Ball Corporation’s conference call regarding the company’s third quarter 2021 results. The information provided during this call will contain forward-looking statements. Actual results or outcomes may differ materially from those that may be expressed or implied. Some factors that could cause the results or outcomes to differ are in the company’s latest 10-K and in other company SEC filings, as well as company news releases. If you don’t already have our earnings release, it’s available on our website at ball.com. Information regarding the use of non-GAAP financial measures may also be found in the notes section of today’s earnings release. The release also includes a table summarizing business consolidation and other activities, as well as a reconciliation of comparable operating earnings and diluted earnings per share calculations. Now joining me on the call today are Dan Fisher, our President; and Scott Morrison, our Executive Vice President and Chief Financial Officer. I’ll provide some introductory remarks, Dan will discuss packaging and aerospace performance and trends, Scott will discuss key financial metrics and then I’ll finish up with comments on our outlook for the company. Ball Corporation finished the quarter on a strong position despite challenging year-over-year comparable results from the economic recovery this time last year, continued supply chain disruptions and inflationary pressures that are being experienced in the rest of the manufacturing world. For the quarter, we generated comparable operating earnings of $417 million, which is flat against prior year and up 13% from 2019 while generating comparable diluted earnings per share of $0.94, up 6% versus the prior year and 34% over 2019. Underlying demand for our products remains strong. Shipped volumes in the quarter were up 1% North and Central America where we dealt with freight and supply disruptions, while simultaneously deliberately building back our inventories. In EMEA, volumes were up 4% driven by continued package mix shifts. And in South America, volumes were down mid-teens percent largely due to a difficult year-over-year comparable as South America ramped up significantly in the third quarter of 2020 after being largely shut down during the second quarter of 2020. As we look forward, we expect year-over-year growth to accelerate further with strong expectations in the fourth quarter and going forward. Dan will elaborate more in his comments and we'll also focus on providing more detail by segment. During the third quarter, we began absorbing the impact of global supply chain hardship clauses being triggered by some of our suppliers for the first time in decades, while also weathering the impact of indirect supply chain disruptions for certain materials, dunnage, freight and transportation at our customer locations. Though we have existing mechanisms in our contracts to recoup certain costs and are confident in our ability to recoup such costs over time, at the moment these mechanisms are not sufficient in the current environment. And as a result we are implementing a comprehensive commercial cost recovery plan to cover unprecedented excessive costs outside of our normal customer engagements. Our commercial teams have begun discussions with our customers on a case-by-case basis the need for such cost recovery efforts if we are to continue to invest alongside the growth of our customers and partners. In conjunction with our commercial cost recovery plan, we'll also leverage existing contractual terms and conditions to recoup higher input costs in future periods in both our packaging and aerospace businesses. Despite this our five-year growth and profitability outlook that we discussed a year ago at our Investor Day remains intact and we are very excited about our trajectory going into 2020. Demand for our products and technologies continues to outstrip supply and our new facility start-ups are all on track or better relative to our plans, which will both lead to significant growth in long-term diluted earnings per share, EVA dollars, cash from operations and return of value to our shareholders over the foreseeable future. Other third quarter 2021 highlights include our global beverage can business completing the start-up of six lines including four in North America, one in EMEA and one in South America and announcing two additional greenfields in Nevada and North Carolina; our global aerosol -- aluminum aerosol volumes, up 15%; our cups team signing new contracts with the world's largest retailer in a major food service distribution and hospitality partner; our aerospace team opening its state-of-the-art payload development facility in Broomfield Colorado, expanding our aerospace manufacturing center in Westminster Colorado as well as successfully launching the Ball-built OLI land imaging instrument on NASA's Landsat 9 satellite. Our North America and South America aluminum packaging business is continuing progress on the respective aluminum stewardship initiative certifications following EMEA's ASI certification last year. Our business has hired over 2,000 people net year-to-date to support our long-term growth. We successfully raised $850 million in a 10-year bond offering at three and eighth percent; our Board declaring a quarterly dividend of $0.20 and electing Dr. Dune Ives to our Board who will bring a wealth of experience and knowledge as we proactively position our products to be the most sustainable in their respective categories; and in 2021 continuing to be on track to return $1 billion to shareholders, while deploying in excess of $1.5 billion in EVA-accretive growth capital investments, while generating earnings per share growth over time of at least 10% to 15%. In summary, despite near-term headwinds, Ball continues to operate from a position of strength. Our team is executing at a high level and ready to take our performance to the next level. To all of our global employees, customers and suppliers, thank you for your hard work for staying safe and for navigating unprecedented supply chain disruptions. Collectively, we are working to regain efficiencies recover costs and deliver long-term value to stakeholders. And with that, I'll turn it over to our President Dan Fisher. Dan? Dan Fisher: Thanks, John. I echo your thanks to our employees, customers and suppliers. We strive to keep our teams safe. And to everyone listening, we strongly encourage vaccination and boosters. As John mentioned, the global operations, commercial and procurement teams are managing accelerated growth large-scale capacity additions, while navigating unprecedented supply chain disruptions. These impacts are largely outside of Ball's control and includes steep supplier cost pass-throughs beyond normal levels. Ultimately, the compounding effect of labor and trucking shortages outside of Ball had impacted our operational efficiencies, customers' production and filling operations as well as retailers' efficiency stocking store shelves, the degree of which varies greatly by region. Given the scale of cost being passed on to us and as John mentioned earlier, we are beginning conversations towards implementing the additional commercial cost recovery program. Our aerospace and aluminum packaging businesses delivered a tremendous amount of value amid current conditions. Third quarter single-digit volume growth in North America and EMEA aluminum beverage packaging was offset by double-digit volume declines in South America due to tough year-over-year comps of 30% growth in third quarter 2020 largely due to the timing effects of COVID in South America versus third quarter 2019 demand. Our retail marketing investments in cups continues and supports additional food service launches at stadiums and venues continues across the US. The Ball aluminum cup will begin an initial rollout at a major retailer during the fourth quarter and a new contract with a leading global food service and hospitality company that will further broaden the cups' presence at stadiums and venues. Our aerospace team brought online new infrastructure investments on time and on budget and supported the successful launch of OLI aboard the Landsat 9 spacecraft complementing our legacy of value-added Earth imaging science. Demand for aluminum beverage cans continues to outstrip supply around the globe. We remain on track to exit 2021 with an additional 12 billion units of new installed capacity. We also recently announced additional domestic projects, all of which underscore our Investor Day commentary. To all the teams listening, I know it's been challenging to keep up with the growth, keep your heads held high and focus on basic blocking and tackling. We have the contracts, we have the raw materials, we have the equipment and we have each other. We also continue to make significant progress in operationalizing and commercializing sustainability and driving our D&I goals. Our operations in South America and North America are on track to achieve ASI certification by year-end 2021. We launched Brazil's first Circular Economy Lab in October and we continue to finalize our steps to achieve to become carbon neutral prior to 2050 after publicly stating our intent to achieve such goal. As we discussed throughout 2021 growth isn't always linear. Given our year-to-date global beverage shipment growth of 7% and recent supply chain dynamics we are on course to achieve high single-digit global volume growth and global specialty mix in excess of 50% for full year 2021. We continue to see annual growth rates in excess of 6% for the foreseeable future. Ball is well positioned to capture growth, given our timely execution on new capacity additions and our established scale and innovation in the world's largest can regions. Now a few brief comments on each region. In North America beverage third quarter ship volumes were up 1% versus 2020 and up 7.4% versus 2019. During the quarter earnings were down as volume growth was offset by the combined effect of inflationary cost increases from suppliers above current cost recovery provisions project start-up costs and operational inefficiencies in legacy plants brought about by unsustainably low inventory and indirect supply chain disruptions. Glendale and Pittston successfully started up additional lines during the quarter. Both plants will exit 2021 with 4 can manufacturing lines installed and our Bowling Green manufacturing plant started up successfully in early October. In the near term the work to build adequate inventory levels is ongoing. These actions and cost recovery will further position the business for success in 2022. Following the successful on-time start-ups of Glendale, Pittston and Bowling Green Ball has announced two new greenfield plants in Nevada and North Carolina. Both are supported by long duration contracts with strategic global customers. We are excited to invest alongside our customers and anticipate these facilities coming online in late 2022 and '24 respectively. Lastly, I would be remiss not to acknowledge and thank Colin Gillis who is retiring from Ball for his 48 years of dedication to the company and our industry. We wish him well. Kathleen Pitre who many of you know was our Chief Commercial and Sustainability Officer in our global beverage business will do a great job in leading this business in the future. In EMEA segment ship volume for the third quarter was up 4% versus 2020 on tougher comps given prior year's volume increases due to COVID reopening timing and were also up due to customers adding new can filling investments. Versus third quarter 2019 volumes were up 10.7%. Across Ball's EMEA business, demand trends and positive momentum continues. Year-to-date our can volumes in EMEA are up 9%. Ongoing high single-digit growth will be driven by new and existing categories utilizing cans and our new greenfield plants in the UK, Russia and Czech Republic which are supported by long duration contracts for committed volumes with global and regional key partners. Our EMEA team is executing very well and managing complex country-by-country supply chain issues. In South America third quarter volumes were down upper teens percent versus 2020 and up high single digits percent versus 2019. 2020 volumes were up 30% versus third quarter 2019 due to timing effects related to COVID. Cooler-than-normal seasonal temperatures in the first two months of the third quarter this year and weather damage sustained to our Extrema facility contributed to lower year-over-year volumes. With unseasonably cold temperatures and the facility disruption largely behind us, October volumes recovered and were up 5%. We continue to see more earnings upside in South America in 2022 and beyond. The Frutal Brazil plant started up its first line earlier this month and anticipate starting up, its second line in early 2022. Additional investments throughout the region are also on schedule. As we enter the busy summer selling season and given the nice volume bounce back in October, we anticipate double-digit can growth for the full year and additional growth will be possible once we have more capacity online. In summary our global beverage team is preparing for long-term durable growth, while managing volatility and costs across our supply chain. No doubt money was left on the table. We are laser focused on operating safely, controlling the things we can control, recovering cost and delivering high-quality cans to our customers from new and existing facilities supported by equitable contracts. Our aluminum aerosol team did a good job supplying growth across EMEA, Mexico, and Brazil, resulting in 15% higher volumes in the third quarter globally versus 2020 and 5% higher volume versus 2019 for the same period. The team continues to manage varying degrees of reopening status in Brazil and India. In addition, the business continues to expand the rollout of refillable reclosable aluminum personal care and bottle packaging across multiple categories. To support the new cups contracts, I mentioned earlier, we have increased marketing investments and are adding another cup manufacturing line in our Rome Georgia cups plant. Following this investment, both lines will be capable of making multiple cup sizes. Turning to profitability. We anticipate 2021 total investment cost in the cup business will be in the range of $45 million and we expect the business turning a profit in 2022. Turning to Aerospace. The team continued to win contracts and maintain record backlog. The operating earnings were up in the quarter and included the impact of rate adjustments on fixed-price contracts. This business continues to be positioned for sales and earnings growth in 2021 and margin improvement beyond 2021 given contract mix. Across all of our operations, we are actively investing in the businesses to deliver on strong demand and grow and train our labor base while also effectively managing supply chain disruptions, recovering costs, achieving returns on capital employed, nurturing our culture, and delivering shareholder value. We appreciate all of the amazing work being done across the organization. And with that, I'll turn it over to Scott. Scott Morrison: Thanks, Dan. As John mentioned, third quarter 2021 diluted earnings per share were $0.94 versus $0.89 in 2020, an increase of 6%. Comparable year-to-date 2021 diluted earnings per share up 17%. Third quarter sales were up due to the pass-through of higher aluminum prices, higher sales volumes and improved mix. Comparable third quarter diluted earnings per share reflects strong results in EMEA, South America aerospace and aluminum aerosol, and a lower effective tax rate related to higher R&D tax credits offset by lower North American beverage operating earnings, previously discussed higher year-over-year corporate, labor and start-up costs to support business growth and marketing costs to drive the aluminum cup launch. Ball's balance sheet is very healthy and with ample liquidity and flexibility. During the quarter, we completed a successful $850 million bond offering at three 1/8%. Proceeds will support general corporate purposes. And in late October, we used the proceeds to redeem the bonds that were due in March of 2022. In addition, we completed the purchase of group annuity contracts and lump sum payments for certain US pension benefit obligations. Assets totaling $325 million were transferred to an insurance company during the quarter. The purchases triggered non-cash settlement losses of $130 million recorded in business consolidation and other activities. Year-to-date, Ball has contributed approximately $200 million to its remaining pension plans. As we sit here today, some key additional metrics to keep in mind for 2021. Our full year effective tax rate on comparable earnings will now be in the range of 15%. Full year interest expense will be in the range of $270 million and full year corporate undistributed costs recorded in other non-reportable are now expected to be in the range of $80 million to reflect lower benefit accruals. We continue to see a path to doubling our cash from operations by 2025. Our 2021 cash from operations will grow in line with the earnings trajectory and be aided by a source in working capital. We expect 2021 total CapEx to exceed $1.5 billion and returns on capital beyond our 9% after-tax hurdle rate will flow through as new project -- new growth capital projects become operational later in the year and in the years to come. Ball continues to be good stewards of our cash as fellow owners and through the lens of EVA discipline, we will prudently balance growth opportunities with consistent return of value to our shareholders via dividends and share repurchases. As John mentioned earlier, we'll return approximately $1 billion to shareholders through dividends and buybacks in 2021 and we intend to double that total return in 2022. With that, I'll turn it back to you John. John Hayes: Great. Thanks, Scott. In summary, our Drive for 10 vision continues to serve as our guide. We know who we are, we know where we're going and we know what's important. Following our strong year-to-date results and outlook for the remainder of the year, we are positioned to exceed our comparable diluted earnings per share long-term goal of 10% to 15% and achieve our EVA dollar growth goals of 4% to 8% per year in 2021 and beyond. While we and the rest of the manufacturing world face inflation and supply chain headwinds in the near-term that are reminiscent of the 1970s, we are confident that we will get through it. You've heard from us that the sustainable growth trajectory of our business continues. And as we sit here today, we continue to believe we are on the front end of a decadal shift that will favor our packages. The key to our success is to just be Ball, be close to our customers, focus on attention to detail, and act like true owners of the business. If we do this, we will generate significant earnings cash, EVA, and return even more value to our shareholders, all while helping to make our world more sustainable. In preparation for 2022, we intend to host our biennial Investor Day activities on September 21st and 22nd in Colorado and thank you for investing in Ball. And with that, Dina ,we're ready for questions. Operator: Thank you. [Operator Instructions] Our first question is coming from the line of George Staphos with Bank of America. Please go ahead. George Staphos: Hi everyone. Good morning. Hope you can hear me okay. John Hayes: Yes, we can. George Staphos: Thanks for all the details. I know you have a lot of people on the line, so I'll just keep my questions to two. So, first of all, John, can you talk a little bit and Dan about the implementation of your commercial cost recovery plan and relatedly the hardship clauses that you mentioned? And in the third quarter, can you quantify to some degree what the unrecovered cost and other supply chain factors were. Your press release said a lot of this is going to continue into the fourth quarter so it would be helpful to know what it was in 3Q. And then I had one other question. John Hayes: Yes. Happy to answer that George. And as I said in my prepared remarks this inflation we've seen we really haven't seen this from the 1970s. And as you know because you've been around a long time, we have various cost pass-through provisions in our contracts. In this such steep inflationary, they're lagging behind. And so I'll let -- I'll turn it over to Scott in a minute and he can talk about numbers. But -- and every customer is different. I would try and probably bucket it in three different ways. We have -- number one, we have some longer-term contracts where we have PPI and other provisions, but it's a lag. And so, we're in discussions with our partners about investing in the future as part of that because we need to be recovering those if we're going to be able to invest going forward. The others, we have some contracts coming up and we've already baked that in and priced that into those discussions that we've been having. And then we have some open contracts that we will be pricing it in. Every customer is a bit different, but this is -- we need to make sure that we are adequately capturing during all the costs in a timely way because we do believe over time we would get it. And if the hardship clauses and other things begin to abate, we're happy to talk to other customers about making sure that they participate in that as well. So, maybe what I'll do is quickly turn it over to Scott, he can talk about the specific numbers. Scott Morrison: Yes. George and inflation impacts in the third quarter in North America alone think in the range of $25 million to $30 million. And there's probably another $10 million of inefficiencies where customers are out of CO2, so they can't run their operations. They don't have labor to run their operations, dunnage shortages things like that that impacted us negatively to the tune of roughly 10 -- probably $10 million-plus in the quarter. George Staphos: Okay. Thanks Scott. And just I'm not quite sure I recall what goes into the hardship clause if you could touch on that. And then one of your -- to your other comment John about decadal shift in beverage cans and your packaging. Clearly, we've seen really good growth over the last number of years. One of your larger customers yesterday was having an ESG Day of sorts. And it seems from our vantage point a lot of the focus was on trying to make plastics more sustainable. What were your impressions about the plastics industry attempt to do this? And what are you seeing from your customers in terms of whether they truly see that as a solution or whether aluminum is still the preferred solution recognizing you might be a little bit biased in that? Thanks. I'll turn it over and good luck in the quarter. Dan Fisher: So, maybe I'll take the hardship clause. George, thanks for the question. I think about sort of compounds, inks, chemicals, epoxies that world. Traditionally, the pass-through mechanisms largely as John indicated, at least, for the last 20, 30 years sort of mirror our commercial contracts. But when those chemicals get outside of kind of a compounding inflationary rate, it differs for each compound, let's say, in excess of 10% just for purposes of this discussion. They have the ability to pass those through in shorter time intervals than on an annual basis. So we've been absorbing that. And that's largely what we're experiencing. From a plastic standpoint maybe, I'll let John, handle that and then maybe I can give some color on the specific conversations we're having with customers on the branding side. John Hayes: George, it's -- this whole larger topic it's -- the consumer realizes that plastic is polluting our planet. Full stop. We recognize that many of our customers have deep profit pools that are filled with plastic and we don't anticipate that they're going to do a wholesale shift from aluminum -- from plastic to aluminum. But let me just -- I'll pick on Europe right now. In 2019, the total package share of cans was 27%. 2021 it's 31%. That's a four percentage point change. CSD went from 16% can penetration to 19% in 2021. Beer went from 35% to 37%. Energy went from 69% to 76%. That's just in Europe. The same thing is going on here in North America. And so if you really want to talk about the circularity and the circular economy plastic is not the solution to that. We recognize that there are certain instances where plastic may make more sense. But in a wholesale way the train is already leaving and that's why we said that we really do believe this is a decadal shift and you're going to see more and more going into this. You see in the existing infrastructure bill there is discussion about infrastructure investments in the recycling side. You talk about plastic taxes that are on current bills on the floor right now. This is not leaving, this whole extended producer responsibility is going to become more and more important. Even in this quarter alone, Maine introduced an extended producer responsibility for responsibility law for plastic because they recognize that it's polluting the planet. This is only going to accelerate and we have a solution. Dan Fisher: The only thing I'd add to the comments I think you asked the question in and around customers and discussion. I would think about it this way, George, there are whole brands that are in PET. In the conversations we're having, very candid conversations with our customers, that's a real problem. And right now we can't move fast enough to convert those entire brands over. And as a result I think folks are fighting a good fight to hold on to PET and collection efforts and what they can for as long as they can because the anti-plastic sentiment is not going anywhere. It's accelerating and the conversations we're having are candidly far different than even were a year ago. George Staphos: Thank you, Dan. Thank you, John. John Hayes: Thank you Operator: Our next question is coming from the line of Ghansham Panjabi with Baird. Please go ahead. Ghansham Panjabi: Yeah. Hi, guys. Good morning. I guess on the 1% volume growth in North and Central America knowing that you had tough comps, I'm just trying to understand, how much of the moderation in growth is supply chain related versus the actual comp. And just given all the constraints at current has that started to slow new beverage launches at the customer level? Just trying to understand how volumes will evolve over the next couple of quarters, as your capacity gets layered in and where exactly the bottlenecks are in the supply chain and how you're managing your suppliers in context of that. Dan Fisher: It's a great question. I think Scott commented, in his financial overview on some of the impacts. But I think when you think of dunnage, when you think of freight and when you think of candidly labor issues both with our suppliers and our customers breweries are struggling filling locations are struggling. So it's across the entirety of the ecosystem. Rough math when we've investigated sort of what our growth would be in a more stable supply chain for North America it would have been in excess of 6% growth shipped volumes for the quarter. Ghansham Panjabi: Okay. Got it. That's helpful. And then in terms of Europe just your outlook for 2022. One of your peers talked about a tougher year in Europe for them next year and I'm just curious as to how you're viewing it at this point. Dan Fisher: Yes. We're not looking at it in similar terms. So we're very bullish on Europe. Some of this has to do -- and we've reflected on this historically, we've got a significant presence in the U.K. in Russia and with a large energy drink customer. And everything that we're seeing is really strong growth projected for 2022 and beyond. In a larger aggregate, we're in the early stages kind of putting together our three-year strat plan right now. Ghansham, when I look at the three major regions, maybe this will be helpful, we're looking at demand in excess of capacity to the degree in the neighborhood of 10 billion units, again, for next year and Europe has a good portion of that. So we're very bullish on the investments we've got going in the ground and the continued dialogue with our customers. John Hayes: Yes. And even to my comments, Ghansham, on the commercial cost recovery plans, we're doing that in Europe. And so we expect to see good profitability growth in 2022. It's -- now I will caution that it's early November 2021 right now. So we still have a lot of work to do and some go get, but that's our expectation. Ghansham Panjabi: Great. Thanks so much. Operator: Our next question is coming from the line of Arun Viswanathan with RBC Capital Markets. Please go ahead. Arun Viswanathan: Great. Thanks. I guess, first off on -- maybe I can just get your perspective on the issues around magnesium. How would you kind of characterize maybe your supply? And maybe if there's any outlook on cost inflation in the magnesium area by region over the next, say, six months or so? Dan Fisher: Yes. I think, the magnesium issue, you could argue that's a little overblown. I think in talking with our supply base on a regular basis -- typically you would hold anywhere between six to nine months of inventory. I think we've got assets, human capital actually that's in China that's working on a daily basis with our supply base over there and magnesium suppliers there. The operations are back up and running. I think there was an inflection point in inflation, as you said, a few weeks back. I think that's dissipating pretty significantly right now. So as we sit here today, I appreciate the question, but this is not sort of top of mind in terms of the surety supply issues, either with our supply base or with our -- or from a cost perspective. Arun Viswanathan: And then, just a little bit more detail on the larger cost reduction program. How did this kind of come about? And I guess, is this kind of a structural change to your business, or is that kind of the objective longer term? And if so, what kind of productivity targets should we think about on an annual basis? Thanks. John Hayes: No, this -- I mean, I think, my prepared comments speak for themselves. I think this was a big accelerant during the third quarter and it is faster. And we've had to choke down some of those things. And so we're just working with our customers as partners saying we got to share in this going forward. But I don't believe it's structural. And as I said, to the extent they come back down, we'll work with our customers to make sure that they benefit from that as well. It's just we should not be the toggle in the whole supply chain switch here. That's the main point. Arun Viswanathan: Thanks. Operator: Our next question is coming from the line of Kyle White with Deutsche Bank. Please go ahead. Kyle White: Hi. Good morning. Thanks for taking the question. I wanted to focus on volumes in South America. I think you said October was up 5% and you're pointing to double-digit growth for the full year, which I think would imply a much larger growth than 5% in 4Q, but maybe I'm misunderstanding something there. So any details you can provide on South America and trends there. Dan Fisher: Yes. I think that's largely correct. I mean, we don't -- we're not going to go into forward guidance, but I think the reverse engineer of the math would suggest -- I'll tell you this, we're selling every single can we're making in South America. And so, if you backtrack into the capacity that we've added, reverse engineer that, you get to, I think, very close to the hypothesis you put forward. Kyle White: Got it. That helps. And then, just talking about price elasticity of demand in regards to the beverage can, maybe just overall thoughts on that? And more specifically, for example, on premixed cocktails, which I think is kind of a faster-growing category that a lot of can-makers are bullish on. But some of those products are already priced relatively high for consumers. Are you concerned at all in terms of growth being impacted from all the inflation that we're seeing? Dan Fisher: I'm not. And why I'm not or why we're not is when we look to a number of our customers. And if you look to some of their commentary, they're saying if you have innovation and you have the product the can candidly, they're not seeing the same historical constraints relative to price elasticity. I think as John indicated, it's still November 2021. So I don't know where all of this goes in terms of supply-demand impacts. But the other thing that we're looking at is, inflation is hitting and supply chain challenges are hitting every other substrate. And I don't think anyone is going to retrench further into plastic or other substrates at this point given the sustainability challenges that those substrates have. So as we sit here today pretty positive, pretty bullish that these products can take on more price. And it won't impact the volume curve. Scott Morrison: And the only thing -- other thing, I'd add as well is when you think about all the substrates in beverage packaging whether it's plastic glass, aluminum cans the raw underlying costs are all tied in one way shape or form to energy. And so they all over time have a correlation that's relatively consistent. And I think it's -- I think sometimes we all collectively forget that about a little bit. Kyle White: Got it, I'll hand it over. Thank you. Operator: Our next question is coming from the line of Salvator Tiano with Seaport Research Partners. Please go ahead. Salvator Tiano: Yes. Hi. So, … Scott Morrison: Hi. Salvator Tiano: … the first thing I want to understand a little bit is, as you think about your contracts and your pass-through mechanisms and recovery how do they differ by region EMEA, South American and North Central America? And how should we think about the price cost performance in the next few quarters by each region? Dan Fisher: I think the only meaningful difference I think the economic integrity of each contract and the pass-through mechanisms are consistent. They may be more tied to regional inflationary mechanisms, as opposed to a standard inflation pass-through. And the only thing that we're saying and the cost recovery comment that John provided in his prepared remarks is that, these pass-through mechanisms outside of metal typically work a year in arrears. And in an inflationary period, that we're experiencing again something that we haven't seen in 40 years that's not sufficient for quarter-to-quarter P&L integrity. And so we're going to try to address that with new contracts that we're entering and partnerships that we have established. Salvator Tiano: And just to clarify here. You mentioned okay, one year lag essentially but the idea was that as you were negotiating contracts and getting better -- make a better terms for the past few years one of the terms was offsetting of this cost. So, were the lags worse -- longer before? What has changed versus a few years ago? John Hayes: No. Some of them -- what's happened a couple of years ago in some of the contracts particularly in the ones that we acquired through the acquisition didn't even have inflation pass-throughs. And so we've certainly adjusted that. I think what Dan just said is completely correct. It's really just the timing effect here. But again as I said earlier, we should not be the toggle in all this. And I think it's important that that's what we're focused on with our customers. Dan Fisher: And the only thing that's different is inflation has gone through the roof at an accelerated pace. So that's been the difference. But the contracts have worked how we thought they would work. Salvator Tiano: Okay. Perfect. And just a little bit on 2022 recognizing, you typically don't provide specific guidance, but any key pointers you can provide for next year's earnings or EBITDA or any other buckets that can drive the earnings bridge? John Hayes: I will stand by that we feel very bullish with all the investments we're making that we will be able to meet or exceed our 10% to 15% long-term earnings per share goals as well as our 4% to 8% EVA growth. Salvator Tiano: Okay. Thank you very much. Operator: Our next question is coming from the line of Mike Leithead with Barclays. Please go ahead. Mike Leithead: Great. Thanks and good morning guys. Dan Fisher: Good morning. Mike Leithead: First I wanted to square maybe two of your comments on North American beverage can. I think you said shipments would have been up 6% or so if the downstream supply chain was just working better. And then secondly, you talked about inventories in the system still being quite low. So I guess, were you able to use some of that gap versus your actual 1% shipments to rebuild inventory in the quarter, or am I kind of misunderstanding some of the moving pieces there? Dan Fisher: No. That's a great comment and good insight. Yes, we are really holding firm on trying to build inventory in Europe and in North America, specifically at this point in time. So some of that has constrained the ability to ship within the quarter, but the comment is in and around the 6% or – looking at Q3 for North America in particular, we thought we'd be – when we look at the upstream and downstream disruptions, within the supply chain ecosystem, we would have been north of 6% for ship volume growth in the quarter. Mike Leithead: Got it. That's helpful. And then secondly, I think the 3Q cash ending balance was the highest 3Q level in a while. And you did call it $200 million in buybacks in the quarter and you probably need to double that or so in 4Q to get to $1 billion cash return this year. So I guess, is there something wonky around the quarter end cash timing there, or I guess, why wasn't buybacks maybe a bit higher here in 3Q? Scott Morrison: Yeah, there is something wonky. We did a bond offering during the quarter, and then we redeemed notes after the end of the quarter. So that's why the cash balance was so high. It will normalize by the end of the year. It's normalized as of today. We paid off those bonds a couple of weeks ago. Mike Leithead: Great. Thank you. Operator: Our next question is coming from the line of Christopher Parkinson with Mizuho. Please go ahead. Kieran De Brun: Good morning. This is Kieran on for Chris. Just on the aerospace business, you had a strong quarter in 3Q. It looks like you're having some contracts ramping that benefited you and should continue to benefit in the fourth quarter. Any color you can give us around those contracts like where are you seeing the pockets of strength stronger activity and maybe how we should think about that ramping into next year would be helpful? Thank you. Dan Fisher: No, it's good insight. I think you're reading it correctly. We're stepping into the meat of the backlog, if you will, and some stronger margin projects that are starting to kick off. They'll continue into 2022, 2023 and 2024. And so you should see – and I think I established that in my prepared remarks, you should see favorable project mix starting to show up in a cascading way over the next several years. Kieran De Brun: Great. And then just a quick one, I was wondering, if you can just parse out in terms of the volume headwinds that you experienced in the quarter in South America, is there any way that you can give us an idea of the magnitude from the weather events on the overall impact versus the kind of difficult comps per se? Dan Fisher: Yeah. I think it's a combination of two things. What you saw in – from quarter two to quarter three in 2020 was a V-shaped recovery in that market. And so you shipped out a lot of inventory heading into Q3 that you built in Q2 transitioning out of COVID. Both July and August were double-digit declines in terms of year-over-year shipments, and we were more in line with the flattish growth trajectory in September. You should think probably in the neighborhood of one billion units was compromised in those – in that 8-week period. Kieran De Brun: Great. Thank you very much. Operator: Next question is coming from the line of Angel Castillo with Morgan Stanley. Please go ahead. Angel Castillo: Hi. Thanks for taking my question. I just was wondering, if you could give us a similar view of what you've talked about kind of with South America and North America in terms of particularly for EMEA in terms of the ex-this environment and kind of the supply issues or supply constraints and intermittent issues that have taken place there, what growth would have been in that region for EMEA? Dan Fisher: Yeah. I don't have that readily available. Probably, a couple of percentage points more of growth would be what I would suggest. It was far more significant in North America, where the supply chain issues across the entirety of the ecosystem. And it was compounded by the fact candidly that we had such low inventory levels. We could not react in locations in filling locations. If there was an opportunity to ship more, we just didn't have the safety stock to lean into that. So, it's far more pronounced in North America. But yes, we left a little growth on the table in Europe for sure. John Hayes: Yes. And I think when I think through it I specifically think about the driver shortages -- and even in Russia. And CO2 there are CO2 issues in the UK where many of our customers were down for several weeks if not longer on that. So, I think it was largely -- every country was a bit different. There are slight issues in Germany from a freight perspective trucker perspective. But I immediately think of the U.K. and Russia. Dan Fisher: Yes, the most pronounced was the UK, I agree. Angel Castillo: That's very helpful. And then in terms of you kind of touched on it earlier just impacts I guess to the customer level. As we think about -- I think you talked about it a little bit last year -- or sorry last quarter in terms of still water and what you're starting to see maybe some more chatter around that or maybe more launches. I guess any impact to that? Are you how is that progressing in terms of what you're hearing from your customers in terms of intentions or potential products there? Dan Fisher: Yes. There is a fervor around still water right now. And what you're seeing is like I think any new market that's opening up, it's an awful lot of entrepreneurial attempts at it. And I think anything that's a closed venue, so it could be anything from the venues that we're seeing concerts, and the sporting events to theaters to airlines to you name it those are easy locations to change out plastic and the composition of that in those venues and so lots of conversations in and around that. I won't go into too much detail because it will steal our strategic thunder. But I would see more and more opportunity moving forward with larger and larger brands to get more into still water. Angel Castillo: Very helpful. Thank you. Operator: Our next question is coming from the line of Anthony Pettinari with Citi. Please go ahead. Anthony Pettinari: Good morning and congratulations to Colin. Some of your peers have seen demand impacted by COVID lockdowns maybe in some regions that you don't participate in as much like Southeast Asia. But I'm just wondering it sounds like there's some restrictions in Russia, which is a big market for you and maybe kind of a worsening of cases in Europe. I'm just wondering if you're seeing any impact from that or if there's sort of a holistic way to think about that risk. Or do you think your customers in the channel have maybe gotten better in terms of managing those kinds of restrictions but still delivering product? Just kind of any thoughts there. Dan Fisher: Yes, it's interesting. We have a significant series of assets and ecosystem in Russia. It feels like every other week there's something that pops up there. So, I would tell you that the customers, the suppliers, and us have started to figure it out. And of course, we're not immune to a significant event in a major city, but I think everything that we're hearing is we're able to operate. Our team is doing a remarkable job figuring how to keep our folks safe and keep our customers in cans. We are still on allocation there. That is a terrific market and has been for us and will continue to be into 2022 right now. We are not concerned about continuing business surety or business continuance in that part of the world. Anthony Pettinari: Okay, that's very helpful. And then the release mentions your sale of the minority stake in South Korea. I'm just wondering if you could touch upon that decision. And then maybe going the other way I mean your balance sheet is in good shape. Are there any opportunities at the margin for bolt-ons or acquisitions understanding you have a lot of organic growth opportunities in-house. Scott Morrison: Yes, I'll take the first part. The sale of the Korean JV that it was -- it wasn't really a strategic place for us to be. Our global customers it's not a critical place for us to operate. And for us the best solution -- and frankly, it was marginally profitable. So, frankly, the best solution was to get our capital off the table and do other things with it that we can earn better returns on. I'll turn it to John-- John Hayes: Yes. On the strategic front, it's -- while we're always looking, it's not the highest priority for us right now. And we've been looking -- we always look in all of our different businesses for opportunities, but to your point, it's well taken. We have more opportunities, internal opportunities for growth than I've seen in my 23 years at Ball Corporation. And we think that we're -- for the foreseeable future, we're going to continue to see that. Will there be an opportunity that pops up, kind of, like what happened in aluminum aerosol last year in Brazil? Yeah, there could be things like that. But I don't think it's anything that would stretch our balance sheet materially. Anthony Pettinari: Okay. That’s very helpful. I’ll turn it over. Operator: Our next question is coming from the line of Phil Ng with Jefferies. Please go ahead. Phil Ng: Hey guys. You've provided great insight in terms of how demand and volumes are tracking in Brazil call it October and just more broadly in the fourth quarter. Any color on how things are shaping up in North America and Europe right now, just because it would be helpful to give us a perspective as some of these issues you saw in the 3Q is abating at this point? Dan Fisher: I think we're managing them better. I think the demand profile looks healthier in terms of improved performance year-over-year. I think we're also trying to manage and balance in my previous comments building inventory. So we can more effectively manage peak season next year, because we did not do an effective job of that this year in North America in particular. And it cost us a lot of money. So we are going to balance and try to thread that needle in terms of we're still oversold in North America. And if we're going to do the right thing for our customers, we're going to protect them for peak season next year. Phil Ng: Got it. That's helpful. And then that's a perfect segue Dan. When you kind of look out to 2022, how should we think about start-up costs in North America because you're adding more capacity? But more importantly, how much bandwidth do you have in that market for growth just assuming everything lines up properly? And how do you see inventory levels shaping up as you head into that peak selling season next year? Scott Morrison: Look I think start-up costs would be in the same range because we're still starting up a lot of assets next year. It could come down a little bit. But we'll have the benefit of -- we're exiting this year with 12 billion more units to sell next year. So I think that will -- we'll have a nice lift in profitability because of the investments that we're making today that will more than offset the start-up costs next year. Dan Fisher: Yeah, you will see -- in North America specifically I think that's where you're catching that comment. You will see the majority of -- we've talked repeatedly that we will exit the year with 12 billion units globally of installed capacity heading into 2022. 60 -- two-thirds of that is North America and that will precipitate some really -- some nice growth for us for each quarter and the balance of 2022. And knock on wood we're going to enter the year with a much healthier inventory position. So we're going to be able to execute on that portion of the growth trajectory as well. Phil Ng: Got it, okay. And just one point up question for me. The $35 million to $40 million hit you saw in 3Q that you called out on inflation and inefficiencies, I mean, it sounds like most of this is timing related. But should most of that be flushed out when we think about 2022 or there's going to be some hangover effect still? Scott Morrison: No I think we have got good mechanisms as we talked about to offset all of that next year. What John was talking about in our commercial strategy is we need mechanisms that react quicker to be able to offset it when we have these big spikes. Phil Ng: Okay, super. Thanks a lot. Operator: Our next question is coming from the line of Mike Roxland with Truist. Please go ahead. Mike Roxland: Thanks very much. Just a quick question on hard seltzers, and realizing that it's a small component of your business. Can you help us think about how your new plans that you're constructing and future plans will be impacted by the fact that hard seltzer growth is now appearing to come down even further? One of the larger producers, obviously, made an announcement a couple of weeks ago on that. And just wondering how that impacts your operation and your current production whether do you need to adjust your thoughts around that business. Even though it's still a relatively small component of your business wondering if you're going to be -- you have to adjust anything that you currently built or need to build to align with what's happening in that segment? Dan Fisher: Short answer, no. It will have no impact on our business moving forward. I would just refer you back to some of my comments on this call. Right now as we sit here today, we're 10 billion units oversold in our three major regions. The majority of that's in North America. The anti-plastic sentiment is really starting to build in a meaningful way. So a lot of brands that you have seen historically that have all been in plastic they all need to find a home. And so we've got no shortage of opportunity. I would also say as the retail providers begin to stabilize their supply chain they want innovation and our customers want to push out innovation. And a more stable supply chain ecosystem is going to provide a lot of opportunities that candidly our customers and us have been sitting on for the last 12 months to 18 months. So no hard seltzer is not going to impact our current plans or our future plans. Mike Roxland: Got it. Appreciate that. And just one quick question on aerospace and labor. Obviously you guys cited labor being a challenge. We're hearing some chatter that there could be more significant challenges around the labor pool in the defense industry. So I'm wondering if -- obviously some of the labor pool there is very specialized labor working in highly technically skills. So I'm wondering if with respect to labor you're encountering any of those issues in aerospace. Dan Fisher: Yes. Short answer no. I think there was a short-term dislocation and it's happening everywhere. And I can tell you we've probably had a couple of hundred retirements that we knew were going to come within the next five years, but it's happened because folks are exhausted of COVID. And so we saw that. We have been hiring for the last three years 1,000 folks a year. We'll continue to hire 1.000 folks next year. And so the balance of retirement versus attrition and what that net number can have an impact on the rate. But I think the team understands this. I think this is a spot anomaly just to be fully transparent. We're seeing it in other parts of the business. And I think as the world starts to reset and get back to normal you'll see less and less of that. So I think we had an intermittent hit here in the last six months largely due to COVID because of unanticipated retirement. But the team has done a remarkable job recruiting. And I think what we're finding is Denver and the excitement about being part of Ball and some of the projects we're working on is a hell of a talent magnet. Mike Roxland: Thank you. Operator: Our next question is coming from the line of Adam Samuelson with Goldman Sachs. Please go ahead. Adam Samuelson: Hi, thanks. Good morning, everyone. John Hayes: Good morning. Adam Samuelson: So my first question is just thinking about some of the cost pressures that have taken a lot of time on this call and your proactive intention to work with your customers on the contracts to get those inflation escalators back. On top of which you have absorbed a lot of start-up costs this year as you significantly added capacity across the network. Historically kind of we thought from a volume leverage perspective kind of profit growth for Ball can be nearly 2x volume growth. Over time clearly -- this year is maybe not quite living up to that or there's real headwinds to that kind of operating leverage. Do you think you can make sufficient progress on those contracts with your customers in this environment to be back in that kind of operating leverage range next year? John Hayes: Absolutely. As we look to 2022 we get excited about it. It's just we -- this inflation came so quickly that the mechanisms were in place and that's what we've been talking about and that's what we are talking about with our customers. But that 2:1 ratio you're talking about we fully agree with that. Adam Samuelson: Okay. All right. That's great. And then I just in this environment where you've had issues in terms of sales volumes utilization issues both up and downstream that are causing pressure which one do you see as kind of most important in terms of getting the shipment volumes back kind of where you target them? Is it really just your customers getting their issues sorted out? Is it your supply chain? I don't where do I think the key bottleneck is in terms of your shipments returning back to a more normal cadence? John Hayes: Well, it's interesting. It really is the whole supply chain. When you think about ocean port delays with raw materials on it then you think about once it gets to the port after sitting on the ocean for months then you got driver shortages. And then you -- as we talked before you some of our customers experienced CO2 issues and others are having labor issues in their own filling breweries. As a result of that -- and then combine our low inventories and what we have to do is play a bit of whack-a-mole. That's what 2021 has been around. To Stan's point earlier about being deliberate and intentional about building inventory so we have sufficient safety stock to eliminate that variability that's the key thing we're focused on in 2022. Adam Samuelson: Okay. Great. I will appreciate all that color. I’ll pass it on. Thanks. Operator: Our next question is coming from the line of Adam Josephson with KeyBanc. Please go ahead. Adam Josephson: Thanks. Good morning, everyone. I hope you’re well. Dan or John, just not to beat a dead horse here. But on the contract – the North American contract issue, can you just help me with – if I go back three years, freight was a big problem for the industry and you subsequently renegotiated some or many of your contracts and so freight was no longer an issue. So I'm just trying to understand, what cost recovery mechanisms you had in place as a consequence of having restructured all those contracts compared to what you're dealing with now? I mean did you not have recovery of all non-aluminum costs in those contracts, or I guess why would you have a year in arrears recovery built into these newer contracts, or is it just that these contracts have not been renegotiated in several years? I'm just trying to better understand the sequence of events over the past few years. John Hayes: Well, there are several things. There are some of those longer contracts that haven't – but those are largely over. Really what it has to do with is in some of our supply contracts there's hardship clause that have – if petrochemicals go up more than a certain percent that they have the right to surcharge. And we have the right to move that on to our customers but it's only on a yearly basis. And what we're talking about doing it more quickly because all this – a lot of this happened in the third quarter. It happened this summer and it was the most acute. It's been in 40 or 50 years. And so again, I want to reiterate, this is not a function of can we get it back, it's a function of the timing of when we get it back. And that's what we're talking about. Adam Josephson: And how are you able to do that? John, I appreciate that. Just without renegotiating in other words about renewing that – you're talking about doing so before the contract is up for renewal, is that right? And how does that work compared to how it's done when the contract is actually up for renewal? John Hayes: Yes. Yes. Every customer and every contract is a bit different, so I'm not going to go into specific customer by customer. But many of our customers are partners. And as we invest with them longer term, you work as partnerships and say help us out in the short term and we can help you out in the long term because they need can. Adam Josephson: Right. Understood, John. Appreciate that. And just one last question on – we no longer get the CMI data, but can you hazard guess as to what you think the industry was up in the third quarter just compared to previous quarters and compared to last year for that matter. Just again, we no longer have the benefit of getting the industry information to be just interesting to know what you think the market did in the third quarter and previously for that matter. John Hayes: Well, it's interesting because then you got to start thinking about imports and all these other things. And as we said before, we think imports – if you annualize what's happened after the last three quarters, we think the imports will be around 16 billion in North America alone. Now that would have never been captured in CMI data anyway. And so I think when you think about that and you think about the context of what – we had a 1% – we've actually had 7% growth year-to-date in North America. I can't tell you off the top of my head what our competitors have had. But you can layer all that in and you can very quickly see that this growth is stronger than any given quarter. And Dan said, it best it's not going to be linear every quarter. Dan Fisher: And the only thing I would add to that Adam is, we talked about the industry being up 100 billion units from the end of 2019 at our Investor Day, a little over a year ago. We are ahead of that right now, despite one of the largest supply chain disruptive periods and COVID. And so, the only thing I would continue to say is demand and the outlook looks far better than it did last quarter, two quarters ago, 18 months ago. And I think, North America is going to continue to grow and it's going to be in excess of 6% for the foreseeable future. Adam Josephson: I appreciate that. Thank you, Dan. Dan Fisher: Dina, it’s -- we’re five minutes after the hour, maybe we – if there is one more question, we’ll take that. Operator: Sounds good. Our next question is coming from the line of Mark Wilde with Bank of Montreal. Please go ahead. Mark Wilde: Thanks. Good morning, John. Good morning Dan. John Hayes: Good morning. Mark Wilde: Just very quickly two issues. Can you just talk with us about how you expect the import volumes to kind of cadence going forward? I mean that 16 billion units is probably 2x, what I think most of us were expecting just maybe six months ago? And then the second question is, if you could just update us on your events -- your efforts to help improve the recycling rate on beverage cans in North America, because to me this looks like a little bit of a potential Achilles' heel if it's not addressed? Dan Fisher: Great question on the import of cans. It surprised us to the upside as well. I think we entered the year thinking maybe more in the 10 billion to 12 billion range and that speaks to the strength of aluminum and maybe lends itself to your next question. But as we sit here today, we're putting a ton of capacity online. Our competitors are putting capacity online, and early insights into 2022 is we're significantly oversold again. And so I think there will be some need for importation again. We will be importing as well. We may be importing in other regions, because the growth is so significant in some of the other regions. So, yes, as we get a clearer picture, we'll indicate kind of what we think that is, but this is early stages of our planning period for 2022. And it's clear that our customers don't want to be paying that much in freight. So if we can domicile that, it's just going to be a matter of how fast we can domesticate that volume. But there will certainly be need probably for 2022 and I would assume 2023 for some importations at some level. John Hayes: And Mark to your point about the growth, you're absolutely right. It does reinforce the need for recycling, and a couple of things. I just -- I'll remind people that while the recycling rate in the United States is the lowest in the world, it's still 8x to 10x of any other substrate in any meaningful way. So it's important to note that and 70-plus percent of all the aluminum in a can is recycled content currently. I think the recycling is a very complicated issue, but there's three things. You got to focus on the infrastructure, you got to focus on the collection, and then you got to focus on the producer responsibility. With the infrastructure in the existing bills that are being brand about in Washington D.C. today, there are money set aside, to help the local municipalities, reinvest on the infrastructure of recycling. And so we're very hopeful that that will get through, because that will provide the necessary means for these municipalities that have to focus on health care, and schools, and roads, and sewers, and everything else provide them the necessary means to recapitalize the recycling infrastructure that hasn't been recapitalized since the 1960s. Then it gets to the collection side. And we can have debates about curbside collection versus deposits. But if you get the infrastructure in place then you got to get the collection. And we do a very poor job across the United States in collection. And at the same time, then it gets to who's going to pay for all this. Well, then it gets to extended producer responsibility. And if there's no economic value in a recycling stream of certain substrates then they are a free rider and they ought to be paying for it. Those are the discussions we're having with our state and federal legislators about the recycling infrastructure, the collection and the producer responsibility. And so this is not a short-term game. It's a long-term game. I wish it would move faster, but it is what it is. But we are putting our shoulder into this to make sure that people understand the value of aluminum in a recycling stream. Mark Wilde: All right. That's helpful. Thanks John. Good luck in rest of the year. Dan Fisher: Okay. Great. Well, thank you everyone for your participation. Dina, thank you for hosting us, and we look forward to engaging with you over the next quarter. Take care. Operator: That does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines.

Operator: Greetings. And welcome to the Ball Corporation Second Quarter 2021 Earnings Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded, Thursday, August 5, 2021. I would now like to turn the call over to John Hayes, CEO of Ball Corporation. Please go ahead. John Hayes: Thank you, Kathy, and good morning, everyone. This is Ball Corporation’s conference call regarding the company’s second quarter 2021 results. The information provided during this call will contain forward-looking statements. Actual results or outcomes may differ materially from those that may be expressed or implied. Some factors that could cause the results or outcomes to differ are in the company’s latest 10-K and in other company SEC filings, as well as company news releases. If you don’t already have our earnings release, it’s available on our website at ball.com. Information regarding the use of non-GAAP financial measures may also be found in the notes section of today’s earnings release. The release also includes a table summarizing business consolidation and other activities, as well as a reconciliation of comparable operating earnings and diluted earnings per share calculations. Now joining me on the call today are Dan Fisher, our President; and Scott Morrison, our Executive Vice President and Chief Financial Officer. I’ll provide some introductory remarks, Dan will discuss packaging and aerospace performance and trends, Scott will discuss key financial metrics and then I’ll finish up with comments on the outlook for the company. To all of our global employees, thank you for your hard work and for staying safe. We know the past 16 months have been trying on everyone and it’s not lost on us that we are not out of the woods yet. COVID is still with us and the science of the vaccine speaks for itself. Please get vaccinated if you can, if not for yourself, but for your loved one and coworkers. In addition, I also want to thank our packaging and aerospace customers, suppliers and their employees. Collectively, we continue to navigate our supply chains, COVID related restrictions in certain regions due to the ongoing Delta variant, re-openings in other regions and we are experiencing all of this, while deploying new EVA creative investments, innovations and technologies that will increase the global availability of sustainable aluminum packaging, as well as deliver national security, environmental and climate intelligence. Our long-term prospects are right on track relative to our expectations. Our business have been very resilient and we have an exciting future ahead of us. In the second quarter comparable diluted earnings per share were up 32%, comparable operating earnings were up 22%, global beverage volumes were up 13%, global aluminum aerosol volumes were up 20% and aerospace finished the quarter with record backlog. Looking to the second half, growth continues across our global beverage businesses, aluminum aerosol volumes continue to rise as regions reopen, our cup team continues to rollout our Ball Aluminum Cup in more than 20,000 points of retail distribution and is working with even more stadiums and arenas to ramp up the food service side of the business, aerospace has multiple launches and hiring continues at an elevated pace to staff aerospace contracts and aluminum packaging manufacturing projects in the U.S., South America and Europe. While we’re still working through several supply chain disruptions in our aerospace in North and Central American beverage packaging business that Dan will speak to, we are and will leverage existing contractual terms and conditions to recoup higher input costs in future periods in both our packaging and aerospace businesses. We have an even greater conviction in our ability to significantly grow diluted earnings per share, EVA dollars, cash from operations and return of value to shareholders in 2021 and beyond. To that end and Scott will elaborate, we are accelerating our return of value capital allocation strategy, given the conviction we have for our future performance. Second quarter 2021 highlights include, our global beverage businesses completing the startup of six lines, including three in North America, one in EMEA and two in South America. Our global aluminum aerosol volumes increasing 20%, as I mentioned before. Our cups team executing national retail distribution of the Ball Aluminum Cup in all 50 states and providing 16 ounce, 20 ounce and 24 ounce aluminum cup to numerous sports and entertainment venues as COVID restrictions moderate. Our aerospace team winning new contracts to lift contracted backlog to a record $3 billion following the significant win late in the quarter. Our 2030 sustainability goals announcement including ambitions to achieve net zero carbon emissions, 90% global recycling rates and 85% recycled content, as well as establishing regional D&I goals and a vision of circularity for the aluminum beverage can. Our business is hiring nearly 1,600 people net year-to-date to support our long-term growth in normal attrition due to retirements. Our Board increased our quarterly dividend 33% and reiterated our 35 million share repurchase authorization. And we plan to purchase in excess of $500 million of stock this year, while deploying $1.5 billion in EVA creative growth capital investments. In summary, Ball continues to operate from a position of strength. Our team is executing at a high level, standing up new greenfield plants, speeding up lines in existing facilities, bringing new aerospace infrastructure and expansions online to support our increasing backlog and hiring amazing talent to join our team. To everyone listening, best wishes to you and your families for good health and continued safety. And with that, I’ll turn it over to our President, Dan Fisher. Dan? Dan Fisher: Thanks, John. I echo your thanks to our employees, customers and suppliers. Our global HR environmental health and safety professionals, and our own personal actions continue to keep our team safe and vigilant. The teams are doing a great job managing accelerated growth, large scale capacity additions and intermittent supply chain challenges. We’re entering the second half with a lot of momentum, a few manageable challenges and a visible path to strong performance throughout 2021 and beyond. Second quarter global beverage volumes up 13% versus 2020 and ongoing strength in EMEA and South America, offset startup costs in North America, retail marketing investments for our retail cup launch, the later than anticipated award timing for a new aerospace contract and higher year-over-year costs. Demand for aluminum beverage cans continues to outstrip supply around the globe. Our global engineering and operations teams are executing at a high level. We’re on track to exit 2021 with an additional 12 billion units of new installed capacity and we recently announced global projects all of which underscore our Investor Day commentary. Cans are in high demand, contracts are in place and Ball is well positioned. Our focus on speed the market, talent, training, systems and operational readiness is paying off as we continue to ramp up new capacity on time and on budget. To all the teams listening, our time is now and you are making this happen. Keep up the great work. As John mentioned, we have hired an additional 1,600 colleagues year-to-date with the majority of them located in the United States. Our investment in talent, training and development, and emerging into the Ball culture and EVA mindset is a vital part of near- and long-term success. We are blessed as an organization to attract this talent in the current environment and are committed to their success. Can demand across all beverage categories remain strong. Our focus on improving customer experience by expanding can availability via new production coming online and providing our network latitude to build adequate inventory will continue to aid that trend. We also continue to make significant progress in operationalizing and commercializing sustainability. Following EMEA’s lead in 2020, our operations in South America and North America are on track to achieve ASI Certification by year end 2021. In each of our global businesses set specific regional D&I goals as part of our 2030 sustainability goals announcement. Proof points of our progress include women representing over 40% of the new team and one of our Brazilian plant investments. In an aerospace over 40% of our summer interns and new hires representing ethnic and gender diversity. We commend our global colleagues’ commitment to our sustainability journey and also wish to recognize our supply chains recent investments and sustainability focused initiatives. As we discussed throughout 2020, growth in our global beverage business is accelerating and our product portfolio continues to support our customers’ new brands, as well as broaden the addressable market for aluminum cans, bottles and cups. Given market characteristics and our project execution, I continue to be very positive about our ability to achieve our goals and deliver low double-digit vol -- global volume growth and global specialty mix in excess of 50% in 2021. We continue to see the global industry growing at an annual rate in excess of 6% for the foreseeable future. Ball is well-positioned to capture growth, given our scale and innovation in the world’s largest can markets. Looking out, contractual terms and conditions are favorable and longstanding pass-through mechanisms are in place for aluminum and other items. And as we said on last quarter’s earnings call, now we execute. Now for a few brief comments on each region. In North America beverage second quarter volumes were up 5% versus 2020 and up 6.4% versus 2019 during the quarter. Earnings were up slightly and as expected higher volume offset the combined effect of project startup costs and operational efficiencies in plants brought about by unsustainably low inventory entering peak season. Glendale and Pittston are both operational, and as of today, three lines are running and Glendale and Pittston first line is coming up its learning curve. Both plants will exit 2021 with four can manufacturing lines installed and our Bowling Green ends manufacturing plant will start up early in the fourth quarter of 2021. The remaining half of the anticipated $50 million in start up costs will flow through in the second half of 2021. Across our broad customer base, beverage can demand is strong in all brand categories, alcohol, soft drinks, energy and water. Despite recent chatter on hard seltzers nothing has changed about our plans. We expect favorable growth trends across all categories to continue, which will drive more EVA enhancing opportunities supported by long duration contracts with strategic customers and large regional accounts. In the near-term, the work to build adequate inventory levels will offset some of the benefits of having new capacity online during the third quarter and position the business for success. Looking out longer term, Ball will build another beverage can manufacturing plant in the southeast. Our new North Carolina facility is supported by long duration contracts with strategic global customers. We are excited to invest alongside our customers and anticipate the facility to come online in late 2023 or 2024. In EMEA, segment volume for the second quarter was up 18% versus 2020 on easier comps given prior year’s volume declines due to COVID onset, timing and we’re also up due to customers adding new can filling investments. Versus second quarter 2019, volumes were up 9%. Across Ball’s EMEA business, demand trends and positive momentum continues. We foresee European beverage can volumes up high-single digits throughout second half of 2021 and beyond. Future growth will be driven by new and existing categories utilizing cans and additional regional plant opportunities emerging to fulfill market demand in the biggest can markets across EMEA. Our new greenfield plants in the U.K., Russia and Czech Republic are supported by long duration contracts for committed volumes with global and regional key accounts. Our EMEA team is executing very well and fully prepared for these exciting investments. In South America, second quarter volumes were up 15% versus 2020 and up 16% versus 2019, given easier comps due to the prior year’s COVID impact and despite cooler than normal seasonal temperatures, and delivery channels in large cities limiting alcohol purchases. We continue to see more earnings upside in South America. As john mentioned, two new lines ramped up in existing facilities in South America during the quarter, and the Frutal, Brazil plant is preparing for a late third quarter startup. Additional investments both in Brazil and throughout the region are also anticipated. Similar to our prior commentary, we anticipate can growth in the mid-teens for the full year and additional growth will be possible once we have more capacity online. In summary, our global beverage team did a terrific job navigating some uncontrollables during the quarter, while also executing, as well as we can on the things we can’t control. Our aluminum aerosol team did an excellent job supplying growth across EMEA resulting in 20% higher volumes in the second quarter globally versus 2020 and 12% higher volume versus 2019 for the same period. The team continues to manage varying degrees of reopening status in Brazil and India. In addition, the business continues to amplify the sustainability credentials of our extruded aluminum bottle to deliver innovation across multiple brand and product categories, including the second quarter rollout of refillable, reclosable personal care packaging at a leading U.S. mass retailer. Our cups team continues to raise awareness, establish distribution, execute initial sell-through and invest for continued growth in 2021 and beyond. In addition to the 50 states retail launch, John mentioned, the team continued to invest in The Party Starts Here marketing campaign to engage and educate consumers about infinitely recyclable aluminum cups. We continue to expect our cups business to turn a profit starting in 2022. Turning to aerospace, the team continued to win contracts and year-to-date contracted backlog is up 25%. The aerospace business dealt with lingering effects of inefficient supply chains, though exiting the quarter we saw notable improvement with key subcontractors and we are exciting -- excited to book a key contract when at the end of the quarter. This win and the trajectory of recent performance sets up the business for notable sales and earnings growth in the second half of 2021 and beyond, in addition to margin improvement beyond 2021. At Ball Aerospace, we are managing challenges, nurturing our culture, while capturing the future. We appreciate all of the amazing work being done by not only the aerospace team, but everyone across the organization. And with that, I’ll turn it over to Scott. Scott Morrison: Thanks, Dan. Comparable second quarter 2021 diluted earnings per share were $0.86 versus $0.65 in 2020, an increase of 32%. Second quarter comparable diluted earnings per share reflects strong global beverage results, slightly lower interest expense and a lower effective tax rate, offset by previously discussed higher year-over-year corporate costs, as well as labor and startup costs to support business growth and marketing costs to drive the aluminum cup launch. Ball’s balance sheet is very healthy with ample liquidity and flexibility. As we sit here today, some additional key metrics to keep in mind for 2021. Our full year effective tax rate on comparable earnings will now be in the range of 17%. Full year interest expense will be in the range of $270 million. And full year corporate undistributed costs recorded in other non-reportable are now expected to be in the range of $95 million. We continue to see a path to doubling our cash from operations by 25. Our 2021 cash from operations will grow in line with earnings trajectory and be aided by a source and working capital. We expect 2021 total CapEx to exceed $1.5 billion and returns on capital beyond our 9% after-tax hurdle rate will flow through as new growth projects become operational later in the year and in the years to come. Ball continues to be good stewards of our cash, as fellow owners and in alignment with our EVA discipline, we will prudently balance real time growth opportunities with consistent return of value to our shareholders via dividends and share repurchases. Given the second quarter’s strength and net leverage in our target range, we will return significant value to shareholders via dividends, as John mentioned earlier, and our ongoing 2021 share repurchase program of at least $500 million. In 2021, we will return approximately $1 billion to shareholders, including dividends and buybacks, and we intend to double that total return to shareholders in 2022. With that, I’ll turn it back to you, John. John Hayes: Great. Thanks, Scott. In summary, our Drive for 10 vision serves us very well, whether it be broadening our geographic expansion, developing new customers, markets and products, and doing so with a commitment to being close to our customers and with uncompromising integrity. Following our strong year-to-date results and outlook for the remainder of the year, we are even better positioned to exceed our comparable diluted earnings per share long-term goal of 10% to 15% and exceed our EVA dollar growth goals of 4% to 8% per year in 2021 and beyond. We will work safely together to execute on projects, support our customers’ growth, drive the circular economy and generate significant earnings, cash, EVA and return even more value to our shareholders. And with that, Kathy, we’re ready for questions. Operator: Thank you. [Operator Instructions] And our first question comes from the line of Ghansham Panjabi with Baird. Please proceed. Ghansham Panjabi: Thank you. Good morning, everybody. John Hayes: Good morning. Ghansham Panjabi: So, Dan, maybe we can pick up on the hard seltzer comment. Obviously, the narrative of the market has changed quite a bit. Maybe you can give us a sense as to how many units you think hard seltzers will total for beverage cans in North America for -- as we exit 2021? What does that number look like for 2022? And then what gives you confidence that the momentum will continue in context of companies like Molson Coors already rationalizing some of their brands? Thanks. Dan Fisher: Thanks, Ghansham. I think for -- how we looked at that category is and I think I’ve made this comment before. We look at sort of the ready-to-drink alcohol space. And maybe just to give you some context, for Ball Corporation, hard seltzers of our unit volume make up less than 5%. We’ve seen -- obviously, we participated in the growth of that space. But it is not the underpinnings for the things that we’ve been talking about in terms of long-term securitization of contracts, EVA accretion. It’s not on the backs of that category specifically. And so I think it will continue to grow, it’s clearly not going to grow at the rate it has been. I think what’s been clear in that space is, the folks that continue to innovate and innovate effectively, are the ones that are taking share. And so from that perspective, we’re -- we believe that we have a right to play in the innovation space and I think we’d benefit from those customers in particular. And so that’s where our focus is. I’m leery to comment on unit volumes across the entire space for the back half of the year. But maybe that gives you a sense of how we at Ball kind of view that category. We’re continuing to bet on the long-term trajectory of the can and can wins in every channel. This is one that has done really well over the handful of years, but we like a lot of other categories and a lot of other spaces equally. Ghansham Panjabi: Okay. That makes sense. And then if we switch to Europe and the big improvement versus 2019. I mean, obviously, at energy cup last year, but really, what is driving the margin improvement versus 2019, even with aluminum costs that are much higher, and obviously, dilutive. What’s driving that improvement there? Dan Fisher: This may be too simple an answer, but our team is executing really, really well, in some instances, a little ahead of our expectations even. We’ve got a really stable footprint over there. We’re on the forefront of major greenfield expansions. But that’s a stable. We’ve had the benefits of incremental speed ups and incremental line extensions and that’s a much easier operating environment, coupled with the fact that the team over there is doing a terrific job. So, I think, solid contracts that we’ve leaned into and talked about globally, the team performing extremely well. And the fact that they’ve benefited from the incremental growth expansion as opposed to some of the large greenfield footprint. So I think the combination of those three and that team just continuing to perform exceedingly well. Ghansham Panjabi: Perfect. Thank you. Operator: And our next question comes from the line of Jeff Zekauskas with JPMorgan. Please proceed. Jeff Zekauskas: Thanks very much. Of your 12 billion can capacity expansion by the end of the year, how much of that volume is already committed? Dan Fisher: Overwhelmingly, it’s committed. Well, we haven’t -- I think we’ve been pretty consistent on the capacity we’re putting in the ground, whether you’ve heard from Scott or John at other Investor Days and outlets. We haven’t deviated from that position. The long-term contracts are committed. They effectively in many instances have take or pay clauses in them. Good terms and conditions and equilibrium of risk. That’s improved over the course of the last four years to five years in terms of the contract integrity. But, yeah, they’re overwhelmingly contracted. I’d say, 85% to 90% of each one of the facilities is contracted. Jeff Zekauskas: Okay. Great. And to follow up, I think, your long-term projection for the growth in North American can market is 4% to 6%. So call it 5%. Of the 5% growth you expect on a normal basis, how much of the growth comes from alcoholic beverages and how much from non-alcoholic beverages to get to the 5%? Dan Fisher: Yeah. Good question. I think going back to 2019, when we had an Investor Day and we laid out the growth trajectory and we’ve been pretty consistent that, I believe it’s going to be somewhere in the neighborhood of two-thirds alcohol, one-third other. It may be shifting a little bit more to 60% alcohol and 40%, and the reason for that is energy, the energy market continues to absolutely be on fire. And so that’s the only fundamental change I see in like the underlying architecture. The good news is that means volumes more than what we anticipated a couple years ago, but that segment in particular and there’s more fitness energy drinks coming online. You are a consumer, you see all of this and we’re obviously going to benefit from it. John Hayes: Yeah. I’ll just add, let’s not forget that that 4% to 6% did not include any water, any still water and we are even just driving in the car today, I actually heard a radio commercial about still -- a new still water brand coming in. And so I think that provides, it was delayed about a year because of COVID, but we are starting to see it. A little bit less so here in North America, but certainly in Europe and we expect that to be upside to that 4% to 6% volume growth. Jeff Zekauskas: Great. Thank you very much. Operator: And our next question comes from the line of Anthony Pettinari with Citi. Please proceed. Anthony Pettinari: Good morning. Dan Fisher: Good morning. Anthony Pettinari: John, Dan, after bringing up and ramping the additional lines in North America in 2Q, 3Q, would you expect to still be importing cans at year end? Can you just kind of give a snapshot of where your global footprint stands from import/export standpoint? And when you get to a point where you no longer need to import into North America? Dan Fisher: I think we’ll be importing far less in the back half of the year. And having said that, the can growth, we’re still in the early innings of growth, so as all our channels and all our markets continue to open up and we’d lean more into new innovations, et cetera. Those could spur some inputs, but we’re not planning on near as much to the extent that we saw in the first half of the year. John Hayes: Yeah. But having said that, even going into 2022, we still expect some imports as we kind of catch up with all this. If you go back probably, I’ll call it, 18 months ago and asked us, we would have probably said the amount of imports in 2022 would be negligible, if any, but we’re seeing more just because the overall demand growth and we want to be prudent in our investments. And as Dan mentioned earlier, we make the investments based upon secured contracts. And so as those come through, that provides an underpinning, but I would expect that we’re still doing some level of importing in 2022. Dan Fisher: Absolutely. Anthony Pettinari: Okay. That’s very helpful. And then with the Delta variant, we’re seeing some renewed lock downs, I guess, maybe in some Asian markets where you don’t participate as much. I’m just wondering if you’re seeing or does your guidance anticipate any impact on-premise demand in any of your global markets from renewed lockdowns? John Hayes: No. No. It doesn’t. Because as you know, I think, it’s actually only upside. The kegs seldomly, certainly, here in North America, less than in Europe, but is very -- does not skew towards the on-premise. And so I think as the on-premise comes on, I think, they’re upside, because of the anecdotal evidence that we have seen and heard is that as the on-premise does begin to open up, the kegs are the ones at risk, because they had to flush so much bad product because of the lock downs. And so, bar owners and restaurant owners are looking at much more flexible and adaptable supply chains within their own walls and I certainly think that favors a can So in fact, I think, as things open or close, there’s little downside, but more upside. Dan Fisher: Maybe just adding a comment to John’s good take on on-premise, I think, we’re also seeing the continued investment into the direct channel and there have been behavioral changes. That’s… Operator: This is the Operator. The main line has disconnected. They will be dialing back in. So please stay on the line. The main line has disconnected, but they’ll be joining shortly. So please remain on the line. So be on silent until they rejoin. I will let you know once they have joined. Thank you for standing by. I do have the main line connected. Please go ahead. Dan Fisher: Yeah. Apologies for that. I did we seem somehow dropped off. But we’re back. So, Kathy, if you can, perhaps, like take the next question. Operator: Certainly. Thank you. And the next question comes from the line of Neel Kumar with Morgan Stanley. Please proceed. Neel Kumar: Hey. Great. Thanks for taking my question. You mentioned several supply chain disruptions in the aerospace and Northern Central America segments. Can you just quantify for us the impact in the quarter and what impact you expect from these issues in the second half of the year? Scott Morrison: Yeah. On the aerospace side, I think, we saw continued struggles early in the quarter, got much better in the back half of the quarter. We think going -- we feel much better going forward that we’re kind of beyond the challenges that we have in the supply chain. In North and Central America, we’re seeing increased costs as it relates to warehousing, coatings, all kinds of things. I think everybody’s seeing that across their supply chain. So we’ve been able to -- our teams have done a great job of making sure that we have metal to run our operations. So we haven’t had any issues from that standpoint. But it’s a challenging environment, but one that we’re navigating through pretty well. John Hayes: I think in total, I think, in aerospace, we think it costs in the range of probably $5 million in the quarter. And I think in North America beverage, our startup costs were in the $11 million to $12 million, excuse me, $12 million to $13 million range. And then all the other inefficiency costs that, Scott alluded to, and don’t forget, we entered the quarter with the lowest inventory we had. And so as you’re going into a seasonally high period of time in North America, that’s what created the disruption, but that costs is probably in the range of $20 million $25 million. And as Dan talked in this prepared remarks, a big focus in the second half of this year is new capacity is coming online, is getting our inventories back to a more normalized level, so that we are not making to order, but we’re making to stock, which is very important from a whole supply chain efficiency perspective. Dan Fisher: It’s important to add to that. When we talk about we’re doing an effective job, controlling what we’re controlling, especially within the four walls of our plants, it’s exactly the John’s comment, when you have historically low inventory levels that just promotes more label changes and more turnover. So our folks are operating incredibly well. They’re just doing it in challenging inventory level circumstances. Neel Kumar: Great. That’s helpful. And you mentioned, aluminum cups being profitable in 2022. I was curious what the drag is in 2021 and how much CapEx has been invested so far? And can we just generally expect a greater than 10% return on that investment on an ongoing basis? Dan Fisher: So I’ll answer a couple or add a couple comments and then maybe turn it over to Scott. Number one, we’re having to see the market in terms of promoting and building the brand. And so you can see commercials and traditional media, you can see an awful lot of activity in that arena. So we’re spending that money as we launch, we only have one time to launch in these 20,000 stores. So we’ve leaned in heavier in the second quarter even than probably what you see in the back half of the year in terms of investment to build the brand. And then it’s a function of volume against the fixed cost, right? So as we’re seeing volume continue to pick up and seeing some nice velocity turns on this retail. We have pretty good line of sight into where we’re going to be exiting the year and that real good line of sight in terms of this is going to be able to transition into a profitable business in 2022. Scott Morrison: Yeah. We’ve invested about $250 million so far just the start -- it just in the realm cups plants so far and we expect to have returns, yes, well in excess of that 9% as it matures. To Dan’s point, I think the team has done an amazing job, given kind of COVID restrictions of getting into 20,000 retail locations in a really short period of time. That doesn’t come without some additional investment. But we expect that investments to be well worth it as we get into 2022 and beyond and start to see those returns. John Hayes: Yeah. And then one thing I’ll just add on that is, let’s also not forget the food service side, the sports and entertainment venues, they’re just in earnest over the last month or so, just starting to open up even on the concert side, they’re just starting as we speak. And so as we go into the second half of the year, that’s going to be a big focus. And then assuming normal, no restrictions or very limited restrictions in 2022, that’s where we see the road to profitability. Operator: [Operator Instructions] And our next question comes from the line of George Staphos with Bank of America. Please proceed. George Staphos: Thanks. Hi, everyone. Good morning. Hope you’re doing well. Dan Fisher: Good morning. George Staphos: Thanks for taking the question. So I wanted to hit again on innovation. And I think sometimes it’s good to remember six years, seven years ago, I think, you all were talking about how, especially on the alcohol side, there wasn’t innovation, relative CSD and that’s obviously changed a lot and churn is good. When you look at your customers new product pipeline, especially in alcohol, are you more or less confident looking out a year to two years then you were a year ago, in terms of the innovation and what it’ll mean for your growth and return and why or why not? John Hayes: I’ll give a very high level view. I’m probably a little bit more excited why. It’s not only just because of innovation. It seems like every new brand that’s coming out in cans. And so the amount of the number, sheer number of new product inquiries we get from big, big customers, regional customers, small customers has been the greatest I’ve seen in my 20 plus years at Ball Corporation. Dan Fisher: I was building on that George versus three years or four years ago, every large CPG company now is getting into the alcohol space. So just by virtue of that, we’re seeing a lot more innovation on that side. And as John said, almost everything is going into cans. So I’m more bullish. I don’t know which one’s going to win. But we know that the can is going to win and we continue to place our bets on that. George Staphos: Are you seeing any innovation pipeline, any sort of mixture between previously separated categories? So energy drinks and alcohol, energy drinks and coffee, and what that might mean for your can business going forward? Dan Fisher: I think, yeah, you’re probably just scratching the surface on the hybrid. Anything you can get alcohol into is being contemplated. Yeah, just same thing on the, sorry, same on the fitness side, anything that can have fewer calories to give you energy or some benefits, there is no shortage of innovation there. John Hayes: Yeah. George, just give you a context. People have been talking a lot about spike seltzer. What we’re also not talking about is the ready-to-drink that is just totally booming as we sit here right now. As Dan mentioned, energy is going very strong, and we’re seeing more and more coffee going in, with all sorts of functional benefits, whether it’s various oils being put into it or other things like that. And so, again, across the spectrum, that’s what we’re seeing. George Staphos: Okay. Thanks for that. Hopefully, no alcohol and milk drinks. But we’ll see. I guess the last question… Dan Fisher: There is such a… George Staphos: I know. Dan Fisher: … thing in wide production, George. George Staphos: I forgot. I forgot. We’ll look for that in the can at some point, if it’s not already out there. So, you mentioned that you’re going to look to double the value return next year versus this year. And I was wondering what is ultimately driving that, recognizing it’s going to be a combination of things, is that the confidence in the return that you’re generating from your investments giving you the wherewithal to do that. Is that the implicit, higher cost of equity now being put on Ball stock, because the way the stock has been performing and so maybe it’s time to pull back and reward shareholders or is it -- doesn’t sound like it lack of confidence in the growth outlook and so maybe it’s time to start redeploying that capital and I recognize it’s going to be probably something totally different. But what are your thoughts there and I’ll turn it over from there? Thanks, guys, and good luck in the quarters. Dan Fisher: Thanks, George. Scott Morrison: Sure, George. I think it’s more conviction and confidence in our business, and the prospects of our business longer term. I think it’s -- we’re in a comfortable leverage, we said, we wanted to be 3 times to 3.5 times year end debt-to-EBITDA. We see our earnings growth over the next several years growing at a pretty good clip and so we have the ability to basically borrow more money and keeping the leverage flat and returning a ton of that value to shareholders kind of like what we’ve done in the past historically. So I think its conviction about all of those things that gives us the confidence to do -- to raise the dividend 33% a week ago, and to ramp up the share buyback. And I think this year will be a good start and I think we did a lot more as we as we go forward. Dan Fisher: Yeah. And people have been around for long enough over the last 20 years, 25 years know that this lather rinse repeat strategy of making good investments, getting your debt down to the optimal capital levels and then giving it back to shareholders. That is a tried and true model. And we’re -- the key point that I was making in my prepared remarks is we had planned on really doing that in 2022. But we have enough conviction in the growth of cash flow, the growth of earnings and our balance sheet, as Scott said, that we’re going to be accelerating that. Scott Morrison: And we don’t have to sacrifice growth investments. We’re still going to -- we’re able to invest heavily in the growth supported by those long duration contracts that Dan talked about. We’re going to flow a lot of cash and a lot of that extra cash is going to go back to the shareholders. George Staphos: Appreciate the thoughts. Thank you very much. Dan Fisher: Thanks, George. Operator: And our next question comes from the line of Mike Leithead with Barclays. Please proceed. Mike Leithead: Great. Thanks. Good morning, guys. Dan Fisher: Good morning. Mike Leithead: I want to circle back to the inventory conversation. So can you maybe just touch on kind of how far inventory levels currently are below where you want them? And relatedly, I assumed just given the demand strength over the past couple years, your North America plants have been running and producing, I would rather says, probably, almost unsustainably high rates. So is it fair to say in a more normalized environment, when you get all your plants up and running? You would ideally like to dial some of those operating rates back just to keep things smoothly running or just -- how should we think at a plant level, how you would like to operate to steady state versus kind of how you’re operating today to kind of make deal? Dan Fisher: Yeah. At a high level we are essentially running this business during peak season as it makes the order instead of make the stock business. And because of that, you see very different behaviors from in consumers in North America. So the volatility of what products win and what products win at a lesser degree, if you don’t have safety stock available to lean into that, that manifests and the more label changes and more conversions. And that’s what our plants are up against right now. We have known we’ve got some significant footprint investments coming online here. As I think both, John and I mentioned in our prepared remarks, three lines came on in North America this quarter. They’ll start to gain efficiency and then we’ll have built out into facilities, eight lines by the end of this year. That will give us a much needed breathing room. And as those come online and we can build the stock in, the traditional December, January time periods, we will see the benefits in peak season next year in North America. And we’re not done on expanding, obviously, to continue to make sure that we’ve got the appropriate asset utilization. And you’ll see the efficiency levels pick up in our plants because they’ll actually have five years to do what we’re planning to do. John Hayes: Yeah. Just to give you some numerical context around that, historically, meaning over the last, I don’t know, five years, seven years, we would run on average inventory days in North America in the mid-20s, call it. We’re down this summer in the mid single digits. To Dan’s point, you can’t efficiently run a system a network like that when your inventory levels are so low. What we’re planning on doing in the second half of this year is get them back to the mid-teens, call it, 15 plus or minus, because that’s where we think more optimal levels can be. I don’t think we’ll get back to the 25, because I think the world is a bit different and the velocities, to Dan’s point of label changes is different, but certainly… Operator: And this is the, Operator, unfortunately, it did disconnect again. I will wait for them to dial back in. So please just remain on the line. Please go ahead. John Hayes: Yeah. Sorry about that. I’m not sure what -- we got dropped off again. But I think I was in finishing up, and saying, in this summer, we’ve been in the mid-single digits and we expect to get back by the end of this year, hopefully, to the 15 days, which we think is a much more optimal level, because otherwise, we’re just stressing our system too tightly. Operator: And our next question comes from the line of Adam Samuelson with Goldman Sachs. Please proceed. Adam Samuelson: Yeah. Thank you. Good morning, everyone. John Hayes: Good morning. Dan Fisher: Good morning. Adam Samuelson: Maybe first, just hoping to get some just color on the aerospace business. And you alluded to some of the kind of subcontractor and supply chain challenges labor issues there, but a much more constructive revenue outlook for the back half of the year and you talked about margins are expanding in 2022. Is there been any change in terms of the revenue outlook for the business for this year, is anything slipping into next? And then I got a follow-up just after that? Dan Fisher: No to the revenue and a little on the profit that negligible. What two things that influenced it, as Scott already indicated. Number one and I think I’ve made a comment in a prior call, we were operating pre-COVID, with about 80% of our employees, colocated on campus. We exited Q1 at about 50%. We’re exiting Q2 about 65%. So we’re trending in a way that’s allowing us to be a heck of a lot more efficient and collaborative in terms of our efforts. The same phenomenon is happening with our subcontractors. So the combination of that gives us great confidence in the back half of the year. And why we’re bullish on the revenue outlook and why it’s in line, and in reference to John’s comments of, nothing has changed. We did secure a significant project kind of last week of the quarter and that will give us the ability to continue to execute in line with our previous comments and expectations on the business. John Hayes: Yeah. To that point, we had expected to put that in the backlog in the beginning of the second quarter is really more towards the end of the second quarter. And so that was in some part relative to our expectations a little delay, but it was the right thing to do for a variety of reasons, but nothing has changed as we go forward. We’re really excited about that business. Adam Samuelson: Okay. That’s really helpful. And then to the earlier question point on the acceleration in cash return next year and it’s a big step up, you announced, the 33% dividend increase last week. Should we be thinking that dividend is a even bigger kind of component of that or do we think this goes with where the dividend payout is now that’s comfortably north of $1.5 billion of buyback next year is the kind of base plan for at the moment? Scott Morrison: Yeah. We, I mean, we have -- we look at the dividend all the time and we don’t adjust it on a regular basis. We look at it from time to time and then make larger, I guess, adjustments. Most of that returns obviously going to come in the form of share buyback, but we’ll keep a balance between dividends and share buyback. But you’re right, we’re kind of at the front end of acceleration of both of those, as we see, have more confidence as we look out into the future about our cash flow and EVA generation. Adam Samuelson: Yeah. That color is really helpful. I’ll pass it on. Thanks. Operator: And our next question comes from the line of Adam Josephson with KeyBanc. Please proceed. Adam Josephson: Thanks. Good morning, everyone. Hope you’re well. I think, Neel, asked earlier about the cup launch and the costs associated with it. And Scott, I think, you address the capital costs, but not necessarily the P&L costs. So could you just give us a sense of what perhaps the swing could be, if you turn a profit next year, compared to whatever drag you’re experiencing this year? Scott Morrison: Well, I think, this year we’ll invest probably in total, close to $30 million in the startup of the plant of getting it into retail and all of that. I think the marketing costs that we’re experiencing this year mostly in the second quarter, but some also in the third quarter. We will reduce greatly next year. And I think our volumes will grow quite a bit next year. As John mentioned kind of, on-premise food service, stadiums, venues, those kinds of things come back. We’re having nice success on the retail side, nice success on the online. And so I don’t think it’d be a nice contributor year-over-year, I would expect it to be a nice swing. Adam Josephson: Okay. Appreciate that, Scott. And Dan, I think the Jeff was asking earlier about the composition of the long-term -- expect a long-term growth in the North American beverage can market, and you mentioned, perhaps, now you’re thinking it’s about 60% alcohol and you’ve talked about hard seltzer and beer and ready to drink cocktails. Can you just talk about what is informing your view of how each of those categories will contribute to that growth? I mean, how -- what kind of foresight your customers would have about the rate at which each of those products is likely to grow over that period? Dan Fisher: Sure, I mean, in the most -- in the simplest of terms, that’s roughly the construction of our revenue now. And we’re seeing it grow consistently across all product lines and channels at this point and so we see that continuing. We’re seeing equal number of innovations across all categories in all channels. I think the fact that a couple of the larger beverage companies are leaning into alcohol gives you some belief that it will -- alcohol will continue to represent a majority position of our volume concentration. But as, I think both John and I commented on this call, that 40% -- the wildcard within the 40% is going to be still water and the accumulation of that in the marketplace. So if the 40% grows at a higher clip, we’re all going to like that. Because we still believe everything’s going to grow in line with our expectations. It’s been consistent. That just means that we’re seeing further entrenchment and growth of new still water categories. Adam Josephson: Great. Thanks a lot, Dan. Operator: And our next question comes from the line of Arun Viswanathan with RBC Capital Markets. Please proceed. Arun Viswanathan: Great. Thanks for taking my question. I guess, I wanted to go back to the market development around seltzer and just the whole ready-to-drink alcohol market. A lot of us are under the impression that the market is sold out until 2023 here in North America. And so when the seltzer market, I guess, moderates, how does that kind of affect the other categories? Do you think that there is a lot of new products that are pent-up that maybe get some cans? Does that give you a little breathing room? Just given the tightness that you’ve experienced for the last couple years? Is that something that’s potentially welcomed? Maybe you can just kind of square away how to interpret this slowdown and the impact on other categories? Dan Fisher: Yeah. Thanks for that. I would say, first off, I think you’re hitting on an element that is still lost the followership. But every single category, every single customer and every channel is on allocation in our three biggest markets. So there is an impact to growth. I don’t know if it’s disproportionate to one category, because I don’t know what the ultimate sell-through of those products are. But we are contributing to some of the end customer growth targets and rates just by virtue of the fact that if we had more capacity, we’d be selling it through. To the second question, maybe I’ll turn it over to John… John Hayes: Yeah. Dan Fisher: … to add commentary to that, but… John Hayes: Yeah. What I was going to say is, don’t forget, we’ve always taken a portfolio approach to this. And as Dan mentioned earlier, that hard seltzer itself represents 5% or less of our North American volume. And so we’ve always played on the mainstream beer side. We played on the import beer side. We played on the spike seltzer. We trade wine on ready-to-drink alcohol, all of those. You have to look at it from a portfolio theory. And to Dan’s point, from a portfolio theory perspective that we’re on allocation and all these things are growing. And so I do think the focus on hard seltzer is probably a bit overstated here, because people are still drinking more alcohol from can products period. Arun Viswanathan: Great. Thanks. And if I could, similar question just outside of the U.S., what’s the penetration and I guess momentum that you’re observing in similar new products? Maybe you can just touch on Europe and Brazil? Have you seen any potential increase and some of these new categories in those regions at all? Thanks. Dan Fisher: Yeah. The new entrants that are coming into South America are 100% can entrance and that’s been happening over the last handful years. And so their influence and maybe, more importantly, how the end consumer is consuming products through the smaller retail channels and the mini marts in that part of the world. They like hands a lot more than they liked the historical return of returnable glass offerings and so we’ve seen a manifestation. To your point, if a new products coming out, it’s disproportionately coming out in cans. In Europe, that’s the lowest can penetration market in terms of substrate penetration anywhere in the world, for us outside of Mexico. And much the same, I think, there’s ample growth and away from plastic, from glass, from on-premise kegs through direct channels. So we’re seeing that, we’re seeing the can win. I don’t know that I could point to one particular category because we’re seeing it across every category. So there’s a heavier lane in terms of cans, and the thing that emboldens us and continues to sort of echoes John’s comments at the outset that, we are right in line with our expectations. Nothing has changed. We continue to see the filling operators, overweight to manufacturing can filling lines and that’s what’s getting purchased and that’s what’s getting implemented and installed everywhere around the world. John Hayes: Yeah. To Dan’s point on that, let me just amplify, because not four years ago, one-third of all new filling lines going in were for cans. Now it’s closer to two-thirds of all new filling lines going in for cans. And that’s a -- to Dan’s point, it’s across all categories, whether it’s beer, soft drink, energy water, craft wine, FMB’s, you name it, it’s across the Board. Arun Viswanathan: Thanks. Operator: And our next question comes from the line of Salvator Tiano with Seaport Research Partners. Please proceed. Salvator Tiano: Yes. Thanks for taking my questions. So firstly, very quickly, if I understood correctly from the very beginning that you mentioned $1 billion in capital returns this year and I think the dividend is $200 million. So does this imply the excess of $500 million buyback is actually $800 million or did I miss any figures there? Scott Morrison: The dividend is a little bit high -- with the dividend bump that we just did, the dividend will be a little higher than that. But the share buyback is kind of in that $700 million to $800 million range. Yes, that’s correct. Salvator Tiano: Okay. Perfect. And in Europe, can you provide us a little bit with come color on each market, U.K., Russia, continental Europe, how we performed during the quarter? Dan Fisher: Yeah. I mean they’re all consistently up in that mid-to-high single digits. I think ever since the third quarter last year when things started to reopen, not as much as in the U.S., but folks have figured out a way through the direct channel or other avenues to get their beverage of choice and so we’ve seen consistent growth across the continent. John Hayes: Yeah. And I just… Salvator Tiano: Okay. John Hayes: I think a lot as you think about the growth in Russia that, we were on allocation, unfortunately, as we don’t have enough cans for the market. Think about the U.K. for all the things we talked about that Dan mentioned to earlier. This whole sustainability we haven’t talked much about this today. But you can clearly see in Europe, a strategic mind shift changing as we speak. Let’s not forget in 2025 the European packaging directive comes into full force in terms of recycled content and other things. And I think we’re seeing changes in behaviors by not only the consumers, but also our customers in anticipation of that. Salvator Tiano: Thanks. Operator: And our next question comes from the line of Phil Ing with Jefferies. Please proceed. Phil Ing: Hey, guys. John you mentioned that Russia, you’re on allocation? So curious with the capacity you’re adding on, one, do you have an anchor customer and then I noticed one of your bigger competitors in the region is adding more capacity. Does the market have enough demand to support that incremental supply? John Hayes: Without question. I’ll turn it over, Dan. He can answer it more succinctly. Dan Fisher: Yes. We have long-term contracts with all the major players there, especially on the brewery side. And those contracts were entered in alignment with adding this capacity. And so, the challenge is going to be the markets growing faster than when we were negotiating those terms a while ago. So we’re constantly monitoring that marketplace. Phil Ing: Got it. And Dan, you mentioned that, really great execution and running full out in Europe, given some of the investment you’re going to be making in ramping up. Is that going to have an impact on your margins when we look out to next year for Europe into a meaningful fashion? Dan Fisher: The U.K. and the Russia facilities, they can’t come online fast enough. I got tremendous confidence in the team’s ability to ramp those up. In terms of the Czech Republic, that market can sometimes be a little bit more volatile. But we’ve got again long-term contracts and a really good team executing there. I don’t anticipate the weight of startup costs to be in line with what we’re experienced in the U.S., simply because those facilities are a little smaller and the cost profile obviously in the Czech Republic in Russia are far different than the U.S. wage rate. Phil Ing: Got it. That’s helpful. And in North America, really solid growth, but certainly lagging some of the other markets, was that largely a function of you didn’t have enough capacity and then when some capacity you’re investing ramp up in the back half, you expect to run a little fuller. Any color on how strong that volume could look like, if you run full out in the back half this year? Dan Fisher: Yeah. Almost 100% capacity and then not to belabor at this point, but we were less efficient just simply because we didn’t have any inventory to buffer when things took off and a product was outpacing, some of our anticipated projections. So we left a couple -- I would imagine we’ve left a couple points of growth on the table in the second quarter, because of the combination of that. In the back half as these lines ramp up, we’ve got really good contracts there. We are in constant conversations with the customers. And they’re -- they can’t wait to get those cans. So I would expect accelerated growth in the back half of the year because of the capacity we put in place. Phil Ing: Okay. Thanks a lot, guys. Appreciate it. Dan Fisher: Okay. Thanks. Kathy, we have time for one more question if there is one. Operator: Certainly. Thank you. Our last question comes from the line of Alton Stump with Longbow Research. Please proceed. Alton Stump: Great. I have a quick question. Just want to ask about South America, there’s a lot of talk about your capacity tightness here and also over -- of course, in Europe as well. But how is the capacity your situation that you see currently over the next 12 months, 18 months, particularly as it pertains to South America? John Hayes: It’s tight. Yeah. During, obviously, they’re -- in non peak season, getting ready to enter into peak season and everything that we’re seeing is going to put us in incredibly tight scenario. So that team is doing a marvelous job, trying to build inventory right now in anticipation of that growth. But we’re -- as I’ve commented in my prepared remarks, we’re obviously starting up a new plant in Brazil in this quarter probably back half of this quarter. There are other line extensions and investments all throughout the region that we continue to invest in and it’s going to continue to be tight and we’re adding we’re adding volume and capacity for our strategic players. We’ve got, I guess, we’re signaling high to middle-teen growth in that region and a lot of that is coming from this returnable glass, the can shift, the can continues to win across all categories and we will benefit from that here as this capacity comes online. Alton Stump: Okay. Great. Thanks John. That’s all I have. John Hayes: Okay. Well, thank you, all for your participation. As you can tell, there’s a sense of excitement here that we are -- we really do believe we’re on the front edge of a meaningful capital allocation strategy to return it to shareholders. We see as we sit here today nothing has fundamentally changed from our Investor Day nine months ago and we’re just excited. I do wish and hope that everyone stays very safe and healthy. This Delta variant is a concern. But I think strategically we’ll be as a globe be able to get beyond it. So thank you all for your participation and we look forward to continued engagement. Operator: Thank you. That does conclude the conference today. Thank you for your participation. Have a great day.

Operator: Greetings, and welcome to the Ball Corporation First Quarter 2021 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded today, Thursday, May 6, 2021. It is now my I would now like to turn the conference over to John Hayes, Chief Executive Officer. Please go-ahead Mr. Hayes. John Hayes: Great. Thank you, France. And good morning everyone. This is Ball Corporation's conference call regarding the company's first quarter 2021 results. The information provided during this call will contain forward-looking statements. Actual results or outcomes may differ materially from those that may be expressed or implied. Some factors that could cause the results or outcomes to differ are in the company's latest 10-K and in other company SEC filings as well as company news releases. If you don't already have our earnings release, it's available on our website at ball.com. Information regarding the use of non-GAAP financial measures may also be found in the notes section of today's earnings release. The release also includes a table summarizing business consolidation and other activities as well as a reconciliation of comparable operating earnings and diluted earnings per share calculations. Now joining me on the call today are Dan Fisher, our President; and Scott Morrison, our Executive Vice President and Chief Financial Officer. I'll provide some introductory remarks; Dan will discuss packaging and aerospace performance and trends; Scott will discuss key financial metrics; and then I'll finish up with comments on the outlook for the company. First, let me begin by thanking our employees. Together we are working safely and executing at a high level in preparation for even more growth. Thank you for taking care of one another and living the Ball culture day in and day out. I also want to thank our customers, suppliers and their employees. Collectively, we are successfully navigating pandemic-related restrictions in certain regions, post vaccine re-openings in other regions supplies, supply shortages and disruptions across the entirety of our supply chains and investing in growth brands, sustainable aluminum packaging and scientific discovery. The past 15 months have further showcased the resiliency of our industries, as well as our ability to communicate, manage appropriately to serve growing consumer and customer demand. 2021 is off to a strong start with comparable diluted earnings per share up 18%; comparable operating earnings up 12% and global beverage volumes up 8%, despite a couple of disruptions in North and Central America beverage and aerospace that were outside of our control. Momentum continues across our global beverage businesses, project execution is high, aerospace backlog is solid and hiring continues at a robust pace. All of which will fuel long-term shareholder value creation. Even though we left a little on the table in the first quarter, nothing has changed about our prospects. In fact, we have an even greater conviction in our ability to significantly grow diluted earnings per share, EVA dollars, cash from operations and return of value to shareholders in 2021 and beyond. Scott will discuss this more later on. First quarter of 2021 highlights include our global beverage business completing the startup of four new lines in the speed up of numerous others around the world. Our aluminum aerosol business successfully integrating the Brazil aluminum aerosol plant acquisition, our cups team executing national distribution of the Ball Aluminum Cup at seven out of the ten largest U.S. food and beverage retailers late in the quarter. Our aerospace team continued to successfully test key instruments and win NASA contracts and study programs. And our businesses hired nearly a 1,000 people net in the quarter to support our long-term growth. We continue to put our shoulders into the areas of sustainability and real circularity to ensure that aluminum beverage packaging continues to be the most sustainable package in the world. As many know, and you will hear us speak endlessly about aluminum beverage cans already contain on average more than 70% recycled content, which is multiples above any other beverage package. During the quarter we launched the first ASI-certified cans in AMEA and Ball commissioned Eunomia to produce the first U.S. state-by-state comparable assessment of recycling rates for common containers and packaging materials. Please visit our website at ball.com/realcircularity, to view our recently published 50 states recycling report. The state and federal lawmakers consider recycling legislation an infrastructure investment. It's important for everyone to understand what is working and what is not when it comes to recycling in the U.S. And as an industry leader, we believe with good data, smart policies and infrastructure investment the U.S. can be a leader in the global circular economy. Aluminum packaging is economically advantage, properly designed and as mentioned offers the highest recycled content beverage solutions available to our customers today. Increasing U.S. and global recycling rates will only accelerate growth for aluminum packaging versus other substrates and promote a truly circular economy. So, in summary, Ball is operating from a position of strength. Our future is very bright and our time is now. To everyone listening, best wishes to you and your family for good health and continued safety. And with that, I'll turn it over to our new President, Dan Fisher. Dan? Dan Fisher: Thanks, John. I echo your thanks to our employees, customers, and suppliers, our global HR, environmental health and safety professionals, and our own personal actions continue to keep our team safe and vigilant. As John mentioned, it was a very rewarding start to the year. The teams are doing a great job managing accelerated growth, large scale capacity additions, and a few curve balls along the way. We're exiting the first quarter with a lot of momentum and we'll continue to see strong performance throughout 2021. In addition to global beverage volumes being up 8%, specialty mix increased above 49%, up from 46% at year-end 2020. An ongoing strength in EMEA and South America beverage more than offset the winter storm impact to North America beverage, accelerated marketing investments for our retail cup launch and COVID-induced subcontractor costs in aerospace. Demand for aluminum beverage cans continues to outstrip supply around the globe. Despite Ball exiting 2020, with seven billion units of additional installed capacity, we continue to be sold out and look forward to bringing more projects online. Our global engineering and operations teams are executing at a high level. And we anticipate exiting 2021 with an additional 12 billion units of new installed capacity. All of which underscores our Investor Day commentary cans are in high demand, contracts are in place and Ball is well on its way to installing at least 25 billion units of global capacity by year end 2023. That's off of a base of 100 billion in 2019. Our focus on speed to market, talent, training, systems, supply chain and operational readiness is paying off as we continue to ramp up new capacity on time and on budget. To all the teams listening, our time is now, and you are making this happen. Keep up the great work. We continue to secure new customer and supply chain contracts as well as properly aligned talent resources for the future. As John mentioned, we have hired an additional 1,000 colleagues year-to-date with the majority of them located in the United States. Training and development and immersion into the Ball culture is a vital part of our day-to-day work. Can demand across all beverage categories is strong. Our focus on improving customer experience is bearing fruit. Online tools like the source, transparent customer communication, and even more can availability will continue to aid that trend. We also continue to make significant progress in operationalizing sustainability. I'm proud to say that in addition to our EMEA segment, achieving ASI Certification in 2020, our operations in South America and North America are on track to achieve ASI Certification by year end 2021. In addition, last week, we recognized the 2020 Hoover Sustainability Award global winners. We commend all of our global colleagues and our global supply chain for their commitment to our sustainability journey. As we discussed throughout 2020, growth in our global beverage business is accelerating and our product portfolio continues to support our customers, new brands, as well as broaden the addressable market for aluminum cans, bottles, and cups. Given market characteristics and our project execution, I'm very positive about our ability to achieve our goals and deliver low-double digit global volume growth and global specialty mix in excess of 50% in 2021. We continue to see the global industry growing at an annual rate in excess of 6% for the foreseeable future. As a reminder, for those of you newer to the industry that is 2x the historical CAGR, and puts the industry on track to grow at least 100 billion units by 2025. Ball is well-positioned to capture at least 45 billion units of that growth, given our scale and innovation in the world's largest can markets. Looking out, contractual terms and conditions are favorable and long-standing pass through mechanisms for aluminum and other items are in place. These include our list customer terms and conditions that will enable us to ensure full pass through as inflation begins to ramp up. And as we said on last quarter's earnings, now we execute, execute, execute. Now a few comments on each region. In North America, beverage first quarter volumes were up 6% and specialty mix improved to 37%. During the quarter, earnings were down slightly due to the combined effect of project startup costs and lost production from winter storms, more than offsetting the benefit of improved volume and mix. We anticipate both our Glendale and Pittston facilities to exit 2021 with four can manufacturing lines installed. And our Bowling Green ends manufacturing plant will pull forward at startup to the fourth quarter of 2021. Across the customer base, beverage can demand is strong across all brand categories, alcohol, soft drinks, energy and water. We expect this favorable trend to continue and will support the additional EVA enhancing opportunities to align with long duration contracts. As we have discussed on prior calls, given three plants coming online in North America full year startup costs are expected to be in the range of $50 million. The impacts of these costs will be weighted more than the first half. In EMEA, segment volume for the first quarter was up 5% and specialty mix was 54% across Ball's EMEA business, demand trends and positive momentum continues. We foresee European beverage can volumes up mid-single digits throughout 2021 and beyond. Future growth will be driven by new and existing categories, utilizing cans and additional regional plant opportunities emerging to fulfill market demand in the biggest can markets across EMEA. In South America, first quarter volumes were up 14% and specialty mix increased to nearly 68%, despite only 80% to 85% of delivery channels being opened during the recent resurgence of the virus. We continue to see more upside in South America and the Frutal, Brazil plant, as well as other projects are progressing very well. We are also anticipating further investments, both in Brazil and throughout the region. Similar to our prior commentary, we anticipate can growth in the mid to high teens and can mix on the shelf returning to even higher levels beyond 2020 once we have more capacity online. In summary, our global beverage team did an amazing job navigating some uncontrollable during the quarter, while also executing at a high level on the things we can control. Sticking with aluminum packaging, our aluminum aerosol team did a stellar job managing costs and preparing for reopenings, lifting, deodorant and personal care demand. Both earnings and volume increased slightly in the quarter. And the team continues to amplify the sustainability credentials of our extruded aluminum bottles to deliver innovation across multiple brand categories. Our cups team continue to execute and prepare for an exciting 2021. In addition to the retail launch, John mentioned, the team recently kicked off the party starts here marketing campaign to engage and educate consumers, preparing for summer build with infinitely recyclable aluminum cups. We will continue to invest marketing dollars behind the cups, retail launch in 2021, and expect our cups business to turn a profit starting in 2022. Turning to aerospace. The team continued to win contracts during the quarter, including building the spacecraft for NASA's heliophysics GLIDE mission, which will study earth exosphere, which is where Earth's atmosphere touches space. The GLIDE spacecraft and NOAA's space weather follow on spacecraft, also being built by Ball and we'll study solar winds and forecast solar weather we'll launch together in the future. The aerospace business also dealt with transitory costs due to a first quarter subcontractor rate adjustment associated with the national defense contract and inefficiencies brought about by the current COVID environment. This rate adjustment does not impede the near or long-term growth prospects for the business. I'm happy to address any of those questions during Q&A. Our team also executed on new infrastructure, completed critical testing on multiple instruments, one new study programs and backlog remain solid. We continue to be very excited about the business and appreciate all of the amazing work being done by the aerospace team. With that, I'll turn it over to Scott. Scott Morrison: Thanks, Dan. Comparable first quarter 2021 diluted earnings per share was $0.72 versus $0.61 in 2020, an increase of 18%. First quarter comparable diluted earnings per share reflects strong global beverage results, favorable FX, lower interest expense, and a lower effective tax rate offset by previously discussed higher year-over-year corporate, labor, and startup costs to support business growth and marketing costs to drive the aluminum cup launch. Ball's balance sheet is very healthy with ample liquidity and flexibility. As we sit here today, some additional key metrics to keep in mind for 2021. Our full year effective tax rate on comparable earnings will now be in the range of 18%. Full year interest expense will be in the range of $275 million and full year corporate undistributed costs recorded in other non-reportable are now expected to be in the range of $90 million. We continue to see a path to doubling our cash from operations by 2025. Our 2021 cash from operations will grow in line with the earnings trajectory and be aided by a source in working capital. We expect 2021 total CapEx to exceed $1.5 billion and returns on capital beyond our 9% after tax hurdle rate will follow through as new growth capital projects become operational later in the year and in the years to come. Ball continues to be good stewards of our cash and as fellow owners and in alignment with our EVA discipline will proudly balance real-time growth opportunities with consistent return of value to our shareholders via dividends and share repurchases. Given the first quarter strength and approaching our net leverage target range as we progress through 2021, I see returning that value in a more meaningful way sooner, rather than later. With that, I'll turn it back to you, John. John Hayes: Great. Thanks Scott, and thanks Dan. In summary, our Drive for 10 vision serves us very well, whether it be broadening our geographic expansion, developing new customers, markets, and products, and doing so with a commitment to being close to our customers and with uncompromising integrity. Following our strong first quarter results and outlook for the remainder of the year, we're even better positioned to exceed our comparable diluted earnings per share long-term goal of 10% to 15% and exceed our EVA dollar growth goals of 4% to 8% per year in 2021 and beyond. We will work together to do everything possible to work safely, execute on capital investments, drive the circular economy and generate significant earnings, cash, EVA, and value for our shareholders. And with that, France, we're ready for questions. Operator: Thank you. [Operator Instructions] Our first question from the line of Adam Samuelson with Goldman Sachs. Please go ahead. Adam Samuelson: Yes. Thank you. Good morning, everyone. John Hayes: Good morning. Scott Morrison: Good morning. Dan Fisher: Good morning. Adam Samuelson: I was hoping maybe a little bit more color on some of the capacity additions. I believe in the prepared remarks you alluded to a 12 billion unit incremental capacity ending 2021 versus 2020. I'm just trying to make sure we can think about the phasing properly of that in terms of how much it actually benefits 2021 volume growth versus how much has carryover and incremental growth in 2022. And you can just think, help us think about incremental capacity that you're looking at for how commuting by [ph] exiting 2022 into 2023, just from the phasing of the incremental projects that you're looking at? Dan Fisher: Sure. maybe just to restate where we ended 2020, obviously sold out – sold 105 billion cans, exited 2020 with installing an additional 7 billion referenced in the script today that we plan on exiting 2021 with an additional 12 on top of that. So you're getting to, obviously that 19 billion range on top of the 105. And then we clearly are thinking about additional plan projects in the 2022. It's a little early for me to speculate on the speed and the rate with which we're adding in 2022. There's still an awful lot of challenges, as you can imagine in South America with COVID and in Central Europe with COVID. We've got line of sight, as I've indicated to add 25 billion off of a base in 2019 by 2023. We can still execute against that. It's just timing as it relates to what we've already put in place and what we're executing on that. I will continue to inform you as we get further along in the year and as we are able to get our engineers transported from location to location. Adam Samuelson: Got it. That's really helpful. And then I can have a quick follow-up just on the quarter, some of the discrete items in terms of startup costs or winter storm impact, or some of the supply chain items in aerospace anyway, to specifically quantify those, and if we think about those not necessarily repeating in 2022? Scott Morrison: Yes. The north – this is Scott. North and Central America businesses where we felt most of that. The store costs were 10 million plus and startup costs of about 12 million in the quarter. And then we spent an additional incremental, probably $4 million over what we were planning to spend in cups as we wrap up that national retail launch. And then the aerospace impact was probably in the range of $7 million in total. Adam Samuelson: Perfect. That's really helpful. Thank you. I'll pass it on. Operator: Our next question is from Kyle White with Deutsche Bank. Please go ahead with your question. Kyle White: Hey, good morning. Thanks for the question or thanks for taking my question. After the Glendale and Pittston plants are up and running, do you envision still needed to kind of import cans into the U.S. and meet this kind of elevated demand that we're seeing? John Hayes: I do for 2022, it looks like latest forecast, what we're seeing. There'll be a modicum of import cans still for our customers if they continue to – if demand profiles continue in line with our expectations nowhere near the size and the scale that we dealt with here over the last couple of years. But there was still be an oversold element heading into 2022, even with all the capacity that I indicated. Kyle White: Got it. And then just going to Brazil and South America, you touched on it a little bit. EMEA seems healthy there despite only 80% to 85% of the retail channels being open. Are you seeing any impacts at all from the kind of rise in COVID cases down there, any impact on operations or volumes, and then maybe just touch on kind of your capacity situation there, understanding that you have the new plant coming on later this year, but just given the growth profile there. I imagine you're still be constrained even after that comes up. Dan Fisher: Yes, we're running at, I mean, I'll answer the back half of those questions first. We're running at extraordinarily low inventory levels. Can penetration in the market for Q1 was actually lower than on average what it was all of last year and even the year before. And that's because there's just not enough cans. And so even with the capacity adds that I'm talking about in South America, we're going to be incredibly tight in that region for the foreseeable future. A lot of it is underpinned by returnable glass shifting into cans. So if you reference back to my comments in the script, we were definitely looking into a series of further investments across that region as long as the demand profiles and the contracts look right. We have not had a lot of disruption and I give our teams a tremendous amount of credit. This time a year ago was challenging in kind of the Amazon region. But since then we haven't lost much in terms of production. And we've had some – it's the stories are incredible, as you can imagine in terms of what's happening with extended families and loved ones. And that has been the mental aspect of our employee base has been probably more challenging and getting people physically to work in an healthy environment. Obviously, these things can change with new variants showing up, but it's been a pretty resilient bunch down there and we really haven't seen much of an impact and knock on wood. We'll continue to manage this incredibly effective moving forward. Kyle White: Got it. Thank you. Good luck in the quarter. Dan Fisher: Thank you. Operator: Our next question is from the line of Anthony Pettinari with Citi. Please go ahead. Anthony Pettinari: Good morning. John Hayes: Good morning. Anthony Pettinari: In North America, understanding that you're running full and sold out, we saw this massive consumer stockpiling in the U.S. in March, April last year, as we went into lock down, as you anniversary those comps, did you see any impact or any change in terms of customer behavior or mix or offsets from recovery, and on-premise, I'm just trying to understand how, a summer reopening in the U.S. this year impacts your North American business? Dan Fisher: Yes, there's a lot to unwrap there. A lot of open-ended questions too, that we're trying to pay attention to if I just take the on-premise, off-premise. One thing that we've seen over the last 15 months is there's been a number of customers that have really leaned into the direct channel, the e-commerce channel that certainly benefited us. I don't think that's going to suddenly turn off. Folks are going to continue to everyone's dealing with comprehending flex schedules. So a couple of days more a week at home versus in the office that all benefits cans. So there's room for optimism, at least with our substrate that there's been a shift – a secular shift for the long-term. I think that's here – and I think that is here for the long term. I do think though in the month of April, it was kind of interesting because that was the month of a year-over-year comparables. And what we saw was overall liquid volume on the alcohol side was down a little bit and cans were actually up a smidge in that. Meaning, cans were taking share, and on the soft drink side or the non-alcoholic side, non-alcoholic liquid volume was up and the cans were up as well. So not by huge amounts, but people I think were expecting a big decline. And obviously when you look week-to-week, there's big swings. But if you look over the past month, so to speak, those are the kind of trends we've been seeing. Anthony Pettinari: Okay. And that's very helpful color. And then, you talked about COVID protocols hindering aerospace, I think in 4Q as well, has aerospace been impacted more by COVID and COVID protocols more than bev and aerosol, relative to your expectations, is that fair to say? And then, does that sort of temper growth expectations for aerospace over the next couple of quarters? Or maybe things are easing just any additional detail you can give there? Dan Fisher: Sure. I can give you a little color here. I think moving forward, I think we're in a far better place than can that we've experienced the last six to nine months. Keep in mind that historically and the type of work we do, much of it being classified. Folks need to be onsite in order to do the work. And so our aerospace business of roughly 5,000 employees today, you would see 80% of those folks would be onsite. And if you go back to the end of the Q3, beginning of Q4, it was more in the 35% to 40% range. We've begun to transition now. In the last couple of weeks, we've seen north of 60% onsite and that's continuing to build as folks get vaccinated and CDC guidelines are allowing us to bring more folks. And have so we should see productivity benefits not just for us, but the entire supply chain, which has been disrupted because of this. So we're feeling bullish about this quarter and the back half of the year and returning to some sense of normalcy for that business and increasing productivity and efficiency. So now hopefully that gives you some additional color on kind of what we've been up against. Anthony Pettinari: No. That's very helpful. I'll turn it over. Operator: Our next question is from Ghansham Panjabi with Baird. Please go ahead. Ghansham Panjabi: Thank you. Good morning, everybody. John Hayes: Good morning. Ghansham Panjabi: Maybe then just following up on the earlier questions, with the Texas weather disruption from February, and you're running quite lean on inventories to begin with just given the nature of the growth in the U.S. over the past few quarters, how you've kind of managed to flex your production as you gear up for the summer season from an inventory standpoint in the U.S.? Dan Fisher: Yes, you're hitting on a great point and something that we're going to candidly have to figure out and grind through. There's – we're in peak season. We've been oversold for two years. We're at historically low inventory levels. We have an incredibly tight supply chain. Our teams are doing things and trying things and trying to be as transparent as we possibly can with customers. The one thing we can do is try to lock in candidly, a production plan for the balance of the year and try to stick with it as best we can that gives our plants the best chance of success, any alterations, any changes to that are going to put us in a very close to a – make the order environment, which it will be challenging. I think our teams are up for it. We do have capacity coming online, which I've commented on. Those are coming online, right in line with our expectations that will give us some modicum of relief. But yes, our customers are gearing up for a big peak season. They're taking every can we can possibly get. There's a lot of importation happening right now. And it's just going to be tight for the summer. The first quarter did not set us up for the most optimal scenario heading into the second quarter in North America. Ghansham Panjabi: For sure. And then, almost every inflation cycle over the years, the beverage can industry has found some level of weakness in their contracts, whether it's freight pass-through or aluminum premiums or whatever else there was just given the nature of this particular inflation cycle, just how ferocious things have been in terms of cost increases, and maybe even wages at this point. How are your contracts holding up? And is there any risk in terms of incremental margins that we should be thinking about as we progress in the next few quarters specific to the ferocity, the inflation curve right now? Dan Fisher: The contracts are, if you look three years ago to today, we've commented on it several times. You've been following us for a while, but they're much better. We're in a much better space. The downside is the downside that's always been in our business and it's the self-induced inefficiencies in our distribution channels. So where we – the more touch points we have in the supply chain that's not embedded in the cost to serve and the cost to deliver to our customers. Those are past three elements. It's a minimal amount, but as you said, the amount of inflation that we're experiencing, especially on freight there could be some dollars tied up in there that are tied to pass through. Ghansham Panjabi: Got it. Thanks so much. Operator: Our next question is from the line of Mike Leithead with Barclays. Please go ahead. Mike Leithead: Great. Thanks. Good morning, guys. John Hayes: Good morning. Mike Leithead: First question, just on the growth investment, I think you move forward the expected timing of the ends [ph] plant in North America this quarter, and it seems like broadly your growth projects are coming at a larger accelerated clip versus maybe what you laid out for us six months ago at your Investor Day. So I'm just curious what you'd attribute that to, whether it's greater customer demand, better project, win rate, better execution, maybe it's all the above, but just trying to get a sense of what's driving the real acceleration and growth investment there. Scott Morrison: Well, I think all, all of the above really. I mean, the customer demand is not waning in any way. In fact, it continues to firm up. I think our execution has gotten better. I think, you look at North America, the wrap-up of these two new facilities has been better than expected. So I think we're getting better at all of that. And the opportunities, frankly, if we can pull them forward and get these things running faster we'll like it better. John Hayes: Yes, just a case in point on that is talk about that the new hires we've had over the last 18 months or so. We probably in the beverage can business, I'll put aerospace aside. We probably hired over 3,000 people that is unprecedented in our business relative to what we have done in the past. We've talked a lot about these “startup costs.” It's really training costs at the end of the day. If you recall, three, four or five years ago, as a lessons learned where some of the footfalls we had in terms of our startups is we didn't bring people on early enough, and we didn't give them a chance to succeed from day one. We've been accelerating the hiring and training and development of those people six months prior to what we would have done a couple of years ago. And I think to Scott's point, we've been executing quite well as we're starting up these plants. And I think we're giving them a better shot at success. Dan Fisher: Maybe one additional comment I did indicate that the end plant in Bowling Green, we were thinking, earmarking a Q1 startup. What we're talking about is three, four weeks earlier that it falls into the Q4. Scott hasn't come off and we haven't come up or startup costs. There's negligible change, or our capital spend for the year. So this is really, we've already had those costs and the capital outlays embedded. This is just recognition that the teams are executing. They're executing a little better than we anticipated, moves inside the fiscal year. And hopefully that that means candidly fewer imports on ends heading into next year. Mike Leithead: Great. That's really helpful color. And then your second question, when you talk about Glendale and the Pittston facilities, I think you've highlighted that they're both going to have four operational lines by the end of this year, which – by the end of next year, which is already quite large. But you also noted that they are able to add incremental capacity from there. So I guess, could you maybe just touch on how much further you're able to scale these facilities is another one line, two lines, and just given the way you've structured these facilities. Would the incremental line costs be relatively similar or better versus, I don't know, say a Ball plant five years ago where you might've added a second or third line? Thanks. John Hayes: Yes, I would look at it in terms of incremental output on kind of a mega line concept. So you would get additional capacity on the existing infrastructure, but we can scale the lines and within the footprint. And so we can do it much faster and much cheaper than had we taken a historical approach to it. Operator: Our next question is from Arun Viswanathan from RBC Capital Markets. Please go ahead. Arun Viswanathan: Great. Thanks for taking my question. I was hoping we could maybe put a finer point on the EBITDA progression or EBIT, however, you want to look at it. But a couple of years ago you had called out $2 billion of EBITDA on an annual basis. You're now at 475 in Q1, admittedly that had some startup costs in there and some storm impacts. So as you progress forward, could you potentially lay out some mile markers of, you have a lot of capacity growth coming, so would you be exiting kind of 2021 at a much higher rates than that, 475. And if so, I guess would most of the growth becoming in North America and South America, or how should we think about kind of the EBITDA progression from here? Thanks. Scott Morrison: Yes, I think, well, on the first half of the year, we'll have – we have more startup costs than what we had last year, obviously. And then we'll start to get the benefit of that in the third quarter, we'll exit in the fourth quarter with much more strength. So I think it's more backend weighted. I think the performance in South America and Europe in particular continue to be very strong throughout the rest of the year. I mean, they've really surprised to the upside. And I think North America will be in the first half year, again, more heavily with startup costs and then start to accelerate in the back half of the year. John Hayes: Yes. And let's not forget also the first quarters are seasonally slowest quarter too. Arun Viswanathan: Right. And as a follow-up then for aerospace also given, some COVID impact. I imagine that would also be better, as you moved through the learning curve with some of those new employees as well and your projects actually start to come online. So are you still thinking about kind of 15% EBIT growth in aerospace on an annualized basis? Scott Morrison: Yes, I think that what we experienced in the first quarter, hopefully doesn't repeat as we go forward to Dan's comment about having more people onsite, the supply chain, getting better, COVID issues reducing that should accelerate their improvement in as we move through the rest of the year. John Hayes: And when we initiated those – the $2 billion EBITDA number, we also weren't contemplating a cups business, which clearly we're forward investing in right now. So that should give us a whole another revenue stream moving forward. Arun Viswanathan: Okay. Thanks. Operator: Our next question is from the line of George Staphos with Bank of America. Please go ahead. George Staphos: Hi everyone. Good morning. Hope you're doing well. Thanks for the details. John Hayes: Good morning. George Staphos: I wanted to dig a little bit into Europe. The volume growth for the quarter was certainly in line with what you had guided to in the fourth quarter, but it was sequentially down from the fourth quarter, which you had said it was going to be a – was a stronger than expected quarter. Was there anything, as you looked under the hood in terms of the European trends in 1Q that were surprising perhaps a little bit less pass than expected, it doesn't seem like a given the margin trend, but just want to have more color on your on what we saw on 1Q and what it means for the rest of the year relative to 4Q? Dan Fisher: George. I don't, it was in line with our expectations may be a little better that, that is an area where we are adding capacity. And we were allocating every single customer. So I wouldn't read too much in the growth rates right now in the year-on-year comparables. I mean, we're converting our France steel to aluminum facility. We're continuing to add capacity in multiple locations in Europe and the demand trends if we had cans and could serve them, we would have exceeded, I think fairly significantly these growth rates. George Staphos: All right. Thanks for that again. Appreciate that commentary. Second question I had is around innovation. So we've talked a lot about this, all of us on these calls going back a number of years, and it's been great to see alcohol, the alcoholic category pickup with spike seltzers over the last couple of years. Can you give us an update on kind of the bleeding edge? And the next categories again, to the extent that you can comment on mix cocktails, things like that, and how sizable, how significant they might or might not be in a relative spike seltzers and some of the other products we've seen really drive your growth the last couple of years. Dan Fisher: That is the million dollar question. That's a great question, George. I can tell you there are more innovations that are being pent up right now. That we unfortunately can't help our customers launch. And it's – it would be difficult to prognosticate. I think our customers over the last three to four years in North America in particular have really learned to develop products that the end consumer wants, they're pricing it, they're putting it in cans. What's going to win, I can tell you it's probably – it's probably got some alcohol in it and if it doesn't have alcohol in its low calorie, it's a different stimulant on waters. And I still think there's still an underpinning for still water. That's just an area where I still – and bullish on, it gives the retailers an opportunity to improve their CO2 footprint within their retail shelves and without having cans or allowing folks to step into those cans. That feels like a market that could be sizable in the future. John Hayes: Hey, George, this is John. I may just add two things and amplify what Dan said. Number one, don't forget over the last 12 months. Innovation has really been on the sidelines particularly because the retail side of it they were just trying to fill up their stores with the basic needs. And so there was a lot of innovation that's pent up right now and to Dan's point, we're seeing it. The other thing is it gets to this real circularity that we talked about in our prepared remarks. It's real, it's here, there is a number of various anti-plastic at the state level laws that are either being enacted or being debated right now at a level that historically we haven't seen. And so, I think, that momentum continues. And I think there is increasingly by the consumer into a degree, our customers, a recognition that when you have the aluminum beverage can, which is the most sustainable package in the world, that there is an alternative to this. And as people are trying to reach their 2030 CO2 reduction goals, and sometimes even 2025, let alone net neutrality by 2040 or 2050, this is going to play an important role. And so, this isn't measured quarter-over-quarter, but it is a long-term secular thing that we continue to see playing out that benefits the aluminum beverage cans. Dan Fisher: Yes, that's a great point. George, on that, it's like our biggest growth category is plastic. That's our biggest category. George Staphos: Okay. Appreciating that, and I don't want to take up too much time. Is there a way for us to maybe think about the capacity that you are adding this year or through 2023? And how much of that you think is going to new categories? And then Scott, it sounds like the value return is perhaps more likely to happen sooner than later versus your prior expectations given what I heard you say on the call, could you give us, I mean, I know you're not going to time price a month or whatever, but can you tell us what is actually behind those comments? And what opportunity and flexibility you have to do more value return as the year progresses? Thanks guys. Good luck in the quarter. Dan Fisher : Thanks. I'll answer the first question. I would say 80% to 90% of what we're putting in place is simply existing categories. We're earmarking some additional capacity, so our customers can step into some of these innovations and trial them, but the fact of the matter is we're just – we're so darn oversold, I think, it's just stepping into the existing categories in the space, the shift to cans. So unfortunately, not a lot of room to disrupt ourselves. So that's why we're so bullish on the medium- to long-term in this area. Scott Morrison: And on the return of value to shareholders, George, we performed better in the first quarter than our expectations. So, we think that momentum continues looking through the remainder of the year. So, as we sit here today, we think we can accelerate, bring forward the return of value to shareholders while still investing a $1.5 billion of capital. So, I would target kind of buybacks in the $0.5 billion range for the remainder of the year, for this year. And then I think it accelerates into next year. George Staphos: Thank you very much. Scott Morrison: Thank you. Operator: The next question is from the line of Silke Kueck with the JPMorgan, please go ahead. Silke Kueck: Hi, good morning. How are you? Scott Morrison: Good, thanks. Silke Kueck: I have a question regarding your U.S. American can business. So, you said that the business in the quarter grew about like 6% in terms of volumes and some of your competitors thought the volumes North America grew 12% and another competitor said may be 8%. And so, I was wondering whether you had a view what was American beverage can growth really was for the industry in the first quarter? And if you had a view as to how the beer category grew versus soft drinks? Scott Morrison: Yes, I mean, we're 45% of the U.S. market. So, you can probably take our growth rate and take the others and divide back to you, I'd say it's north of 6%, it's probably in the 8% to 9% range. And keep in mind for us, it would have been more. We had one significant customer who had a disruption in the quarter pretty significant from a volume perspective. And so, beer was approaching 1% growth. Our beer volume was down 8%. So, if we were more in line with flat to slight growth on our major beer customer, you would have seen double digit growth in the first quarter. I think there was an anomaly built in there. And I'm excluding the winter storm altogether. And even with that let's not forget we were short cans for the market. We could be selling more than we have. And so right now it's capacity constraint. And that's why we're so focused on getting this new capacity up and running. Dan Fisher: But I'd be careful quarter-to-quarter volume growth because it depends on who is bringing on capacity at what particular time. So, you can kind of get distorted in a quarter. Silke Kueck: That's helpful. And my follow-up, again on the North American business, if I look at your capacity which are like 50 billion cans plus, or minus. What is like the normal rate of like the bottlenecking or efficiency you can achieve, is it like 2%? Can we get like a billion cans out of the existing production every year? Scott Morrison: Yes, it's a good question. Combination of how many additional conversions, how many additional label changes, et cetera. We're trying to earmark something in that kind of one to three productivity improvements. But when you look at the level of complexity as an end consumer, that's showing up the number of new products, the number of new labels, the number of new cans sizes, all of that meets against the productivity. So, if you can fundamentally stay flat, you are doing pretty darn good. You just need to be able to make sure you can charge for that. Silke Kueck: I see. Okay, thanks very much. Operator: Our next question is from Salvator Tiano with Seaport Global. Please go ahead. Salvator Tiano: Yes, hi. Thanks for taking the questions. So first of all, you just mentioned that a major customer that since it was a pretty significant impact on your volumes in Q1. And I think what they've said is they expect to pretty much make up the entire production loss in the balance of the year. So hardly thinking about any tailwinds from recovering this loss in Q2 or later? Scott Morrison: Yes, I don't know that there are tailwinds because we're oversold. And every single can – even in the first quarter, every single cam we could make, we can sell. I was just talking about the categories and the shift relative to that. So, the winter storm had an impact. I don't know how you can recover. The only way we could step up volume versus what we've characterized here is have our new facilities and new investments come online faster, add more efficient rates than we've seen historically. We've got a pretty impressive startup curve. That's already built-in place that's in here, but I wouldn't underestimate our people to do better. But at this point in the year, it's premature to characterize that there's a lot more on the table that we could see recovery in the back half of the year versus what we gave up in the first. Salvator Tiano: Okay, great. [Indiscernible] just, the operating leverage in Europe and South America, your earnings growth was pretty good, especially in Europe, relative to the volume expansion, you saw 5%. So did you see any other specific tailwinds that would help boost your incremental margins? And how should we think about your incremental margins, absent start-up goals going forward? Scott Morrison: Now we've historically said, whatever we grow on the top line, we should double that in terms of a percentage growth on the operating earnings line, exclude startup costs and some of the inefficiencies with the storm. I think we're more or less there across the Board globally. The things that can impact and influence it are hopefully what we're continuing to see is strengthening of the contracts. Supply demand tightness allows you to improve your terms and conditions. That gives us a better chance for success in our plants. And there's just a more predictable nature to that flow through moving forward, I believe, as we get capacity put online. Yes. And also mix plays an important part of that as well. Salvator Tiano: Okay, perfect. So, I guess the recent opportunity for some quarters, or even a couple of years to be above normalized two times earnings growth over top line growth. John Hayes: There's an opportunity nothing's linear, as you indicated is the preface there. Salvator Tiano: Yes. Okay, perfect. Thank you very much. Operator: Our next question is from the line of Mark Wilde with Bank of Montreal. Please go ahead Mark Wilde: Hi. Good morning, Dan, John, Scott. Dan Fisher: Good morning. John Hayes: Good morning. Mark Wilde: I wonder Dan, can you just give us some sense about the impact of these kind of global freight and logistics issues on both the flow of can sheet, but also just how it's affecting your ability to ship cans around markets this year? Dan Fisher: Yes, the challenge is any – we're extraordinarily tight. So, we haven't seen much of what you're describing, but there is always the potential as we continue to grow, as we have tightness in these domestic markets, as the supply chains in every industry are getting extended. The challenge will be if we had to dip into-non domestic aluminum, if we had to dip into China, where the overwhelming majority of excess metal is in the world, we know those freight costs are much higher than they were a year ago, 18 months ago, two years ago. And the real risk though is probably more our ability to potentially pass through that cost. It's just getting it hung up in the ports right now. So, I would see the risk being more on being able to fill demand profiles if we had to go that route, then not being able to potentially pass through the inflationary pressures on the delivered metal. But that's an area that we're paying attention to. Mark Wilde: Okay. And then just in terms of your own shipping around of cans this year and bringing them into North America in particular. Dan Fisher: Yes, it, it's got more to do with the consistency of the delivery and the predictability of when we can get those LTL carriers. Our team has done a really nice job of managing it, but anything that we have to do that’s spot price related, that doesn't fall within the bounds of contracts that we previously negotiated. Those are accelerated and those at times can be challenge for us to pass those through. Mark Wilde: Okay. Dan, just for my follow-on, you mentioned contracts and terms and in your commentary. And I wonder, particularly with regard to Europe, if you can just perhaps put a little more color around that. Dan Fisher: Yes, I think, we indicated this briefly in our Q1 comments. Europe, if you look back over the last three years, North America and South America have felt the supply constraints and the tightness faster with much more conviction, if you will. And so that has enabled a very different seat at the table, if you will, of negotiations. The first quarter and the tail and a Q4 in Europe have shown up in a very similar way. And so, I would say moving forward, Europe if you look at our gross profit or contribution margin, it's as good as anywhere in the world. So I wouldn't indicate there's a whole lot to be gained there, but in terms of terms and conditions maybe longer-term contractual opportunities, those things I could see those moving in a different way than what we've experienced historically and stepping into this moving forward if the market continues to be as tight as it is. Mark Wilde: Okay. That's helpful. I'll turn it over. Thanks very much. Operator: Our next question is from the line of Gabe Hajde with Wells Fargo. Please go ahead. Gabe Hajde: Good morning guys. Thanks for taking the question. Two maybe quick ones. Dan, you mentioned importing into the U.S. until this end modules in Kentucky. And I'm kind of piggybacking off the sales question in terms of contribution down in South America. I mean, by my calculations the 14% volume growth gets you 12 to 15 million of incremental contribution. So, I'm curious if it was the ends that you're producing down there and maybe bringing them into the U.S. that will help aid that? I guess that's question number one. And then when that goes away, perhaps the profitability stays down there as you ramp up this capacity, there and you sell the [indiscernible] as opposed to into the U.S. Dan Fisher: Yes, that's a good question. There's a bit of that happening. Yes, we're shipping some ends. It's not going to be material to those results. It was just a damn good quarter in South America, good mix, good volume. There was a modicum of shipments up from South America into North America on ends, and we're doing a little bit out of Europe. And to your point as that will require less capital investment in the aggregate package moving forward as we free up that capacity back into those regions. So, it should be as you indicated, a win-win-win for multiple regions as it relates to standing up bowl in green [ph]. Gabe Hajde: Okay. And I think in the press release, you guys mentioned favorable price mix down in South America. I thought the specialty mix as a portion of cans was pretty high already. So, I'm kind of interpreting that as maybe a little a price comment. I expect that would persist through the balance of the year. I guess, can you confirm that? And then kind of a secondary question, I read an interesting article talking about Canadian craft brewers, importing cans from places like South Korea and even China. It strikes me number one, kind of interesting from a logistics standpoint; and number two, how do you guys strike a balance from a commercial standpoint with not enticing unwanted capacity or investment versus obviously, getting paid for what you guys have talked about in terms of complexity and stuff like that? John Hayes: Yes, I think, the first part of your question, I think, about it more in terms of customer mix, favorable customer mix, as opposed to – you draw such a fine line, we talk about price and customer mix almost simultaneously. We can add a bunch of accountants to segment that stuff out, but the reality is you got on average higher price for the same product family, and it can be driven simply by customer mix. And the second question was about the kind of small Canadian brewers. This is a very delicate balance because Dan has said repeatedly, we're oversold, number one. Number two, we have long-term contractual commitments to the larger customers. And so, some of this innovation that typically comes from these smaller, I don't want to call them startups, those smaller regional customers, typically they are the more of the list price type of customer that Dan was referring to in the prepared remarks. And when you don't have capacity they're looking somewhere to get them. And so, you are right, that the supply chain complexity of bringing cans in from across the world is intense, not only from a cost perspective, but just a complexity of the supply chain perspective. This is why, again, we're trying to get our capacity ramped up as quickly as we can because, I think, it's going to open the door in terms of innovation by not only the large customers, but the small customers as well. And there's a number of small customers that we're in contact with that they put new can lines in, but they didn't really order ahead in terms of cans. And so we're trying to help them out as best we can, given the constraints that we have in our system right now. Gabe Hajde: Thank you, guys for the detail. Good luck. Operator: Our next question is from the line of Jake Bleicher with Carson Wealth. Please go ahead. Jake Bleicher: Hi guys. Thanks for taking the time. I was wondering on the previous call, you talked about some of the innovation that we had seen over the last couple of years in North America, starting to spread to Europe. And I was wondering if you could give us any update on that as far as the innovation you are seeing over there? And also is any of that spreading to South America, or is that still a conversion from glass to aluminum phenomenon? Scott Morrison: Yes, good question. I think we were talking specifically about the seltzer movement. There were countless questions on that. Well we see that in other parts of the world. By everything we're seeing and hearing it will show up in Europe, in Western Europe first. I know capacity is being added. I'll go back to my comments that everyone is on allocation over there, we're oversold. So, I think, innovations are – it will be a longer supply chain and a longer pipeline for those to show up in a meaningful way. But they are out, they are in the market, specifically in the UK. In South America we are seeing innovation. I don't think you can underestimate within beer, the beer category, there has been a huge shift into different ingredients, craft beer, hops from Europe, all of that has been transitory in the last three to four years and it has now changed the landscape altogether. Those disruptors in the marketplace that started there all came out in cans. And that was really the tipping point for the incumbents that had returnable glass to kind of wake up to the fact that we probably need to match what's happening because we're losing share. And so, your comment is right, it is returnable glass, but the returnable glass shift, I could probably characterize it, it came as a result of innovation and innovation in the cans. And we see that there's still plenty of room for that to grow. I think I indicated in my prepared remarks, only 51% can penetration in the first quarter. And that's down from north of 60% in the third quarter last year. And that's just a function of tight supply from cans in the marketplace. John Hayes: France, we're past the top of the hour. We'll take one more question if there is one. Operator: Okay. Our last question then will be from the line of still with Philip Ng with Jefferies. Please go ahead. Philip Ng: Hey guys, thanks for squeezing me in. The last few quarters you've seen really strong performance out of Europe and that's during period when you are seasonally slower. So what's driving the strong results? And can you build on this in the coming quarters when you kind of factor in seasonality? John Hayes: Yes, overwhelmingly it's been beer. I think some of the customers have had success. There is an underpinning, that's a heavy on-premise market. There may be some underpinnings that there's been a shift and a little fervor in moving to cans. But even as things start to open up over in Europe, we're still seeing that continued strength. We have got a heavy presence, as you know, in Russia. Russia continues to bear fruit. We have a heavy presence in the energy category, and that's doing well. And the UK has just been on fire. And it's a combination of anti-plastic sentiment there and additional fillers coming into the UK. And so, a number of those are factoring in, but we still believe in Europe, it's got the lowest can penetration of any major region in the world. It's really underserved. I think the folks that have been so heavily weighted to on-premise are starting to wake up to the fact that we need to divest our supply chain. And I think cans are going to do really well there for the foreseeable future. And I'll just finish up from a longer view. Since we acquired that business in 2016, our folks have done an amazing job on the cost side of the business. So, from a financial results perspective, I think, in addition to all the mix and other growth opportunities, Dan was just talking about from a cost perspective, I think, we're in such a better spot today than we were three, four, five years ago in that business. Philip Ng: Got it. That's really helpful. And I guess a competitor of yours called out higher inflation that could impact your margins, I think, particularly in North America and they called out coatings. Is that something we should be mindful of in having more of an impact on your profitability in the coming quarters? Dan Fisher: Yes, I mean, inflation is absolutely something we're keeping our eye on it's happening in every industry, specific to that particular area. We have password mechanisms in place. We've got longstanding contracts. Based on what we're seeing and what we're hearing from our supply base right now it's not overly concerning. I think we can manage that. Scott is there anything you have to add on. Scott Morrison: Yes, so just one thing on the margins, just be careful on margin percentage, because if you look at metal costs year-over-year, there's going to be huge variations. There was a 24% difference in the first quarter of this year versus last year higher. It will be even more dramatic than that in the second quarter. So, you are going to see weird things from a margin percentage standpoint, but to Dan's point, I think, we have good passthrough mechanism, but it shouldn't impact our earnings dollars. Philip Ng: Got it. So just outside of the aluminum impact sounds like you are managing inflation pretty well. That's great. Thanks a lot, guys. Scott Morrison: Okay. Well, thank you all. France, thanks for your guidance on the call. I appreciate everyone's input and we'll be speaking to you soon. See you all. Operator: You are very welcome, sir. That does conclude the conference call for today. We thank you all for your participation and kindly ask that you please disconnect your lines. Have a great day.