Ball Corp (BALL) 2002 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by.

Welcome to the Ball Corporation fourth quarter earnings conference call.

This presentation, and all participants will be in a listen-only mode.

Afterwards, we will open for a question-and-answer session.

At that time, if you have a question, press the 1 followed by the 4 on your telephone.

As a reminder, this conference is being recorded.

I would like to turn the conference over to Dave Hoover.

Go ahead.

Thank you.

This is Ball Corporation's conference call regarding the company's fourth quarter and year-end 2002 results.

On the call with me today is Ray Seabrook our senior vice president and Chief Financial Officer who will comment on our financial results and goals.

And Leon Midgett our chief operating packaging who will talk about our packaging operations.

Before we begin, we need to say the information provided during this morning's call will contain forward-looking statements.

Actual results or outcomes may be different materially from those that may be expressed or implied.

Some factor that could cause the results or outcomes to differ are set forth in the company's 10-Q filed on November 14th 2002.

And in other company SEC filings as well as in the news release we issued this morning.

If you don't have a copy of our earnings release, it is available on our website at Ball.com.

The company reported 2002 full year earnings attributable to common shareholders of $159.3 million, or $2.77 per diluted share before extraordinary item of $3.2 million after tax or 6 cents per diluted share, related to the prepayment of some debt connected with the refinancing of the company for the acquisition.

Sales for the year increased by 4.7% to $3.9 billion.

By comparison, in 2001 the company lost $101.2 billion or $1. 85 per share.

That included $205.2m after tax charge for business consolidation cost.

Excluding those charges the company had earnings attributable to common shareholder of $104 million or $1.78 per diluted share in 2001 on sales of $3.7 billion.

Fourth quarter earnings attributable to common shareholder in 2002 were $31.9 million or 56 cents per diluted share before the $3.2 million extraordinary item.

On sales of $910m that compared to $7.9 million or 14 cents per diluted share in 2001 including the net after tax charge of $10.5 million or 18 cents per diluted share largely for costs of closing manufacturing plant.

Sales in that period were $843m.

Excluding the charge fourth quarter 2001 earnings attributable to common shareholders were $18.4mor 32 cents per diluted share.

So you can see our 2002 results are a sharp improvement over the previous year.

Both our packaging and aerospace segments drove increase sales and earnings through growth as well as continued improvements in our operations.

Also, as you all know, we significantly expanded our packaging operations with the formation of Ball Packaging Europe in December.

Leon and I visited nearly all our locations there earlier this month, and we met with many of the employees.

It was my first visit to some of the plants.

I agree with my colleagues who spent a lot of time there in due diligence earlier this year that plants and, importantly, the people are really excellent.

Ball package Europe is a welcome addition to Ball.

We expect strong contributions from it in the future.

The integration is well under way, and Leon is going to say more about that in a few minutes.

I would like to ask Ray Seabrook to talk our numbers.

Thanks, Dave.

Excluding the twelve days of Schmalbach (ph) ownership from sales and margins, comparable fourth quarter sales were 6.6% higher than last year’s with higher sales in all segments.

Stronger fourth quarter beverage cans sales in North America and Asia along with better pricing where the primary contributors to the 2% improvement and comparable operating margins for the quarter.

Full year operating margins improved to 8.1% from 6.7% a year ago.

Fourth quarter diluted earnings per share before extraordinary items and business consolidation costs were 55 cents, compared to 32 cents a year ago. 4 cents per share of the increase is due to the elimination of goodwill amortization and on a comparable basis the fourth diluted earnings per share improvement exceeded 59%.

The four year improvement and diluted earnings per share exceeded 46% after eliminating 15 cents full impact relating to the amortization of goodwill.

As noted in the press release, our 12 days of Schmalbach ownership in 2002 resulted in a 4-cent loss per diluted share due to hire interest costs and limited time operation over the holiday period.

Equity earnings in fourth quarter and full year were improved over last year, especially in China, Brazil, and the U.S.

Turning to full year cash flow, we generated over $300m of free cash flow again last year, which was more than the forecasting for the reasons noted in the press release.

Capital spending in 2002 was in the forecast range of $158m and we expect 2003 capital spending in the $215m range while packaging Europe capital spending is expected to be in the $40m Euro range and North America packaging capital spending will be similar to last year's levels with lower capital spending planned in plastics and food cans and higher spending in beverage cans.

The $814m Schmalbach acquisition cost shown on the cash flow statement is net of all transaction costs and all of cash at the acquisition date.

At closing we assumed is $35m of additional cash and $135m of withholding tax liability that were payable in early January of this year.

Adding this cash to the acquisition costs and including our estimate of the closing adjustments and assumed debt, we arrive at a total purchase price of Schmalbach of $929m.

In 2002 we purchased approximately 1.1m common shares of net at after average of under $41 a share.

We expect this year share to be much lower as we use free cash flow to deliver the balance sheet.

The 2003 share buyback should be in the 20 to $25 million range.

Reviewing the balance sheet I want to highlight some important items.

As discussed previously cash at closing was higher by $135m, which has since been paid in January and, correspondingly, current liabilities have been reduced.

Also due to the Schmalbach closing activities we had higher year-end cash and debt balances than expected.

Cash at the end of this year should be in the $60 million range, and we expect net debt at the end of 2003 to be below $1.65 billion.

The increase in other liability on the balance sheet pertains to an increase in our minimum pension liability in the North America as well as Schmalbach pension liability.

We anticipated this higher North American pension liability for 2002 and discussed the impact this would have on our 2003 earnings in our third quarter conference call last October.

Pension cost increases have been fully factored into our 2003 cash flow and earnings projections.

Finally, a few words on credit quality.

We put additional leverage on our balance sheet obviously to complete the Schmalbach acquisition and are committed to delivering a strategy to strengthen the company’s credit quality.

We expect return to our pre-acquisition credit statistics within 12 to 24 months of this acquisition.

With that, I'll turn it over to Leon for comments on our packaging operations.

All right, thanks, Ray.

In the packaging segment we had record results in every one of our product lines last year but food.

In food, our volumes there were slightly up at about 5.7 billion units.

Salmon catch was disappointing last year and had a negative effect on shipments, down 40% versus 2001 and start-up costs for the new food can line in Milwaukee we've been discusses also hurt the food organization.

But, all things considered, food had a really solid performance in 2002, even though it was not a record.

In metal beverage, our volumes increased slightly in a flat market.

Sales were particularly strong in the fourth quarter and, as a result, our ending inventory levels were the lowest since before our acquisition of the plants from Reynolds in 1998.

Rocky Mountain metal container, our JV plant with Coors is performing well.

On the PE T side we continue to see strong growth there.

We added four lines to our operations last year.

We are looking at two additional lines this year.

It is a cost effective way to grow our volumes, make better use of our existing plant facilities.

Unit sales of soft drink bottle were up 8.5% excluding the Wis-Pak(ph) Act acquisition at the end of it 2001 and 28% if you include the sales.

Unit sale for bottled water were up 38% in 2002 over 2001.

They would have been pretty much the same with or without Wis-Pak as Wis-Pak doesn’t use many water bottles.

Dave mentioned he and I were in Europe earlier this month.

He got a chance to meet the management team and the employees there.

They are, as he said, an excellent group.

I think we can learn a lot from each other.

We're looking forward to that.

It is a great opportunity, and we intend to make the most of it.

Some of you have asked us about deposits on one-week packaging in Germany.

Before we acquired this business, we looked really, really hard at that issue, and management there had developed what we thought was a very pessimistic scenario of what the market impact would be when the deposit went into effect.

Then we took what they thought was pessimistic and made it significantly worse, and we used our worse numbers in our acquisition models.

Needless to say, the returns in the business were attractive or we would not have gone forward.

No doubt deposits will have a negative effect in the first quarter of 2003 as no nationwide system is in place to handle returns.

We're expecting the situation should become progressively better as the year goes on, and that new system takes shape.

Meanwhile, we will be exporting cans from Germany to neighboring countries.

If German can volumes continue to be off as a result of the deposit, we believe we can still backfill a good portion of the business with new backfill export business.

And if the issues there improve through the coming months, as we believe they will, there will be upside to our calculations.

Lots of you folks on the call live in New York and live in a deposit environment and know firsthand that when the proper systems are in place, the beverage can does quite well, and we believe that will ultimately be the case in Germany.

Dave, I'll turn it back to you.

Thanks, Leon.

Thank you, Ray, also for your comments.

I'll speak about aerospace a little bit and talk about our outlook.

Our aerospace segment had record sales in earnings reporting $491m in sales and $39.4m in earnings.

Our defense unit counted for a good share of that, followed by civil and a smaller commercial space element.

We finished the year with a backlog of $497m, which is up from $407m at the end of 2001.

Suffice to say, we have lots of work in this segment and lots more opportunities.

Now, I'm very pleased with the performance of our aerospace business.

The news release mentions a couple of aerospace programs involving us.

One of them is the ICE Sat (ph) which launched on January 12th, and I just had a report this morning that as of the 24th, a few days ago, all the equipment software on this space craft had been checked out and they were working perfectly.

We hope that continues in that mode.

This particular space craft and instrument will measure Ice sheet elevations at the earth’s poles during its plan of a five-year mission to study global warming.

Scientists expect to review data by early summer.

While looking ahead for the whole of Ball Corporation now for the rest of 2003 and, of course, it's only January now, we expect to continue growth in both packaging and aerospace.

First quarter results will likely be similar to last year for several reasons.

You heard Leon talk about some of this.

That would include the start-up costs in our Milwaukee expansion and, actually, more pronounced seasonality in the European business, which starts slow, heats up a lot during the middle two quarters.

So we expect to have very strong second and third quarters which are seasonally already were already were Ball’s strongest quarters every year even before the acquisition.

We'll probably be more skewed in the directions of the middle two quarters going forward.

When we add it all up, we foresee earnings of more than 360 per diluted share in 2003, which would be an increase of more than 30% over what we reported for 2002.

That doesn't mean that we don't have challenges ahead of us.

We do, and we have plans to address them.

We believe the combination of growth in our businesses and our continued focus on running our company efficiently will be reflected in the results as the year goes on, and we're excited about the future we have ahead of us.

With that, Shawn, I think we'll stop and invite questions folks may have.

+++ Q-&A

Thank you, sir.

Ladies and gentlemen, if you would like to register a question, press the 1, followed by the 4 on your telephone.

You will hear a three-tone prompt to acknowledge your request.

If your question has been answers and you would like to withdraw, press the 1, followed by the 3.

If you are using a speaker phone, lift the handset before entering your request.

One moment, please, for the first question.

Our first question comes from the line of Edings Thibault from Morgan Stanley.

Go ahead, sir

Good morning, gentlemen.

Ray, you spoke so quickly.

I was just hoping you could review quickly the CAPEX plan.

I think you had 200 to 215 and you provided some breakout of U.S. vs.

Europe.

Yeah, this is Ray.

I think I said 40 million Euro for Europe and the rest in the U.S.

If you remember, in 2002 we actually spent more on our food can area and plastics area.

When you look at this year's capital spending, those two areas moved to a more normal capital spending and we'll spend more in the beverage can area this year.

Great and that 40 million Europe, does that include the new beverage plant that was announced in Serbia?

That will.

There won't be a lot of capital spending on that in 2003.

I think we're going to initially start that.

That does include some capital spending for that

That's 75 million or so for the new plan.

Is that a correct number?

No.

Excuse me this is Dave.

I was just talking with the guys about this yesterday.

I think the initial construction that we'll do is probably for one line and would be significantly less than that.

As Ray says, we'll begin that hopefully by the end of this year or last half of the year

Great.

Touching on the food business, with the plan up and running by the end of the first quarter and, I think, in the press release there's something on the order of 9 billion cans is that your projected run rate, say, by the second and third quarter, for that kind of annualized run rate or does it take time to launch to ramp that level?

Leon, would you comment on that?

Yeah.

It will take some time.

We should have that line running probably in February, by the end of February pretty well, but they don't start up and run at the efficiencies we ultimately want them to achieve.

The annualized output of this line as currently configured is 1.2 billion units per year.

It will be somewhat less than that this year, certainly

Right.

Any sense of the total costs?

In getting that up and running for comparison purposes?

For start of up costs?

We are probably looking at a total of something in the range of $4m to $5m.

Part of that was taken last year.

Part will hit us again this first quarter.

Great.

Thanks very much.

Our next question comes from the line of George Staphos from Salomon Smith Barney.

Thanks, operator ray at the time.

Good morning.

Congratulations on a great 2002.

First question on beverage cans.

At least relative on tower forecast we did -- you did better than we were expect the fourth quarter in terms of beverage can revenue in North America.

Can you give us some of the qualitative factors that might have given more performance.

Obviously you're building business with Coors.

We appreciate the detail.

Thanks.

You're right.

The fourth quarter was stronger than I expected as well, George.

We were up over 4% in the fourth quarter versus 2001.

For the year, I think we were up something like 1.5 to 2%.

So the fourth quarter was seasonally the best quarter we had.

Quite frankly, I haven't dug into it so see what might have driven that.

Fourth quarter last year we had customers order over advanced price increases that were coming this year.

Compared to that fourth quarter of 2001 to be up that much is a pretty good achievement.

Realizing you have a little bit of pricing built in your business for 2003, do you think maybe there was a little bit of that similar type of pre-buying in the fourth quarter, or is it unlikely given the level of price hike?

I would say it's probably not a significant factor, although not totally without some merit.

Okay.

Now, in the first quarter coming up, could you remind us.

You have, I think, an easy comparison.

Let me rephrase it.

You have the benefit of some higher cost from last year's first quarter.

Can you remind us what the effect is in EBIT terms?

Yeah.

Last year I believe the first quarter was difficult for us because of something like $12 million to $14 million that we had to overcome in an inventory reconfiguration.

Ray, maybe I'll let you talk about some of the things we're locking at this year.

I know we have other issues first quarter this year as well

Yeah.

I think the number was in that range.

I might have been a little bit lower than that.

Remember, if you go back two years, we had really curtailed a lot of our operations.

We had high cost inventory going into last year that sort of washed itself out in the first quarter beverage can business.

As you might expect, we expect high earnings in our North American beverage can business in the first quarter this year.

As you heard, the food is probably going to be lower because we have probably $3.5m of start-up cost to start in that first quarters with a result of the line-up in Milwaukee.

The other impact, George, is the fact we had to write up the inventory and take the profit out in the Schmalbach acquisition.

The fact they're going to be slightly diluted in the first quarter.

You take it and add it together, you get a number that should look not totally dissimilar to last year is what we're estimating now.

If you think in addition -- I don't know the exact number.

We're probably seeing interest expense up $20 million in the quarter.

Might be not quite that much.

So to stay even with last year on a net basis, we have to get $20m of improvement, and what we just said is we expect, you know, to see the Schmalbach thing hurt us a little bit in the first quarter, vis-à-vis that.

So the rest of the business has to do better.

We expect that it will, except for fruit.

That's how we get to the similar outcome

That's fine, Dave.

I wasn't complaining.

I was trying to remember what the hit was.

Last question.

I'll turn it over to the other guys.

Can you give us a bit more color in terms of what was Schmalbach's pessimistic view and what is Ball's pessimistic view in terms of the impact in Germany.

Ultimately, what is Germany as a market representative of Europe in terms of beverage can volumes?

I'll talk and Leon, I'll ask you to talk some.

We're making about 50 billion beverage cans total between here, Europe, and other places. 13 of those are made in Europe

Right.

Four of the 13 are made in Germany.

And so, you know, if the German plants have a big problem, the total company doesn't have a huge problem.

That being said, Leon, you and a bunch of our guys were over and doing the due diligence on this.

We beat the hell out of it starting in about March and worked for a couple of months because we didn't want to be surprised by what the negative could be.

We estimated a pretty severe decline.

Do you recall, Leon?

Off the top of my head, I don't, but I recall that when the folks at Schmalbach got finished with their number, we increased their level of pain by about 50%, as I recall

Okay.

So would that be 10% decline, 20%, 50%?

Within Germany?

Yeah.

Within Germany, we're looking at, you know, worse case of perhaps as much as a 50% decline

Got you.

So if that happens, we're covered.

I don't think it will.

There should be some upside.

Okay.

Thanks, guys.

Next question comes from the line of Dan Khoshaba from Deutsche Bank.

Please go ahead.

Morning, guys.

Morning.

Leon, could you give me your expectations for volume growth for the U.S. beverage can industry in 2003?

Do you expect any volume growth for the industry?

for the industry?

Dan Khoshaba for Ball?

Yeah.

I wouldn't be surprised if there is a slight growth this year, Dan

Maybe 1%, 2%?

In that range.

We were, I think, total down three tenths, something as an industry.

Right.

That was after some strong buy head in the fourth quarter of 2001, to be honest with you, because of the price increases last year

Leon, when you lock at Ball's expected volume growth because of some of the new business that you have, what should that -- what should your growth end up being at 2003 in terms of total volume?

Units or percent?

No.

Units.

Leon Midgett Maybe 800 million, something like that.

Dan Khoshaba;

Okay.

That's what I meant, percent. 800 million units would be, what?

3%

About 3%.

Leon Midgett 2.5, 3%

You're looking at maybe the domestic side of the business just in terms of volume being somewhere between 3% and 4%?

for Ball?

Dan Khoshaba for Ball.

Yes.

Exactly.

Just to follow that through, if I could, what do you think net pricing will be for the company?

I know that you had some pricing in '02.

Some of that carries into '03 based on agreements you have.

Are we talking a net percent 2% less or more?

What do you think that comes in at?

That's not a calculation I've done.

It is probably something in the 1 to 1.5% range for Ball.

Okay, thank you, Leon.

I heard there was a food can price increase at least announced a few weeks back.

How is that looking?

Do you have any expectation that any of that will stick?

I won't say none of it will.

I think we'll get back to the increases that come through.

I don't think we're going to get as much as was announced

What was announced was, what, 5% to 6%?

Leon Midgett As I recall, yes.

You're covering your steel and maybe a little bit more?

Hopefully a little more, yes

the last question, if I could.

If you just take the deposit, if you could -- I know it's difficult to do -- out of the equation, what would your calculation for beverage can growth in Europe be for 2003?

Kind of a normalized growth rate?

Well, the numbers that they have's seen over the last couple years are 5, 6, 7% kind of range

Right.

And we built something significant by less than that in our acquisition model

Okay.

You know, absent the deposit, issues right now, we'd probably see something in the 5, 6, or 7% range this year

Pricing this year in beverage cans in Europe probably flat?

That's about right, yeah

Okay.

Great quarter, guys.

Congratulations.

Thanks, Dan.

Our next comes from the line of Don Hicks, a private investor.

Please go ahead.

Don Hicks Hey, guys,.

You've done all right.

Thank you, Don.

I thought I would get on this.

I listened to the other guys talk to you for years whose been a part of it and listened.

What is the business case for Serbia?

It is part of a growing east European market.

We have, currently, with the acquisition a plant in Poland, in Radomsco (ph) and, basically, we're able to go into Serbia with one line initially.

We're being welcomed by the government and actually has some tax incentives and so on.

And we thin that, this will be a continuing evolving and developing marketplace, and we want to be there.

The plant in Poland is just excellent, and does very well.

So, yeah.

I guess how you see the world, whether we're all going to burn up in a fireball or we're going to progress.

I think there are good signs that those economy's that are in eastern Europe are beginning to get some traction, and we want to be there to be part of that.

We're not, as we said earlier, investing a lot of money initially, but we certainly are excited about this opportunity.

Do you see any near-term effects of what appears to be an impending war in Iraq to our operations?

You know, across-the-board, not much, Don, not much.

I think -- I don't think the war in Iraq, per se, effects our aerospace business, but as you can see and would understand better than most, some of the growth, some significant part of the growth we've been having has to do with the DOD side of the equation, but not necessarily this war in Iraq.

I think that, you know, for the most part, the businesses in packaging here and in Europe are not being affected at this point by that phenomenon

As a retire and a pensioner and an owner of your stock, I'm really proud of this company, when you consider what's going on in the rest of corporate America.

My hat is off to the management team.

You've done an incredible job.

It's nice to hear from you.

Don Hicks ran our aerospace and technical business in the company, was an officer here, and retired a few years ago.

We didn't actually have to pay him to say that.

Nice to hear from you, Don.

Thanks.

Our next question comes from gone stand Punja Jaby (ph) from Lehman Brothers.

Hi Good morning Congrats on the quarter.

You saw an increase in aerospace in '02.

Can you talk about the outlook aerospace for on 3?

We expect some increase.

This is a business which has, for us, at least, has been seeing building backlog.

That's a very good indicator as to what's going to happen in the future.

At the same time, it's sort of lumpy.

By that, I mean, programs begin.

Often they run at a low level for a while and then they pick up steam and at the end they taper off.

I'm talking about programs like instruments like the ICE Sat instrument and those kinds of things we do.

It is necessarily an even dispersion or growing at so much per month all the time.

With that being said, I think we're believing that both sales and income for the business will be up this year.

Okay.

And, Ray, can you remind us of the pension plan assumption, discount rate, et cetera?

We're at right now, we have a 9% return on asset assumption.

The discount rate, I think, is 6.75%.

What else did you want to know?

I think basically what I said in the third quarter is our pension costs this year were around $10.5 million.

We expect that number to move to, like, $22.5 to $23m next year, which has been fully baked into our projections

Finally, free cash flow guidance for '03.

Cash flow.

The trouble is the cash flow statement is hard to look at right now.

We're still rolling up our final cash flow statements.

We can't do it correctly until we get a real good looking balance sheet.

We haven't had that for that long because of the Schmalbach acquisition.

When I look at cash flow, I feel more comfortable talking about how much net debt we're going to have.

Remember, the $135 million payment that we made in the month of January that we, basically, the cash was left to us, and then we turned around and made the payment.

That's probably going to show up in our free cash flow because it's going to be, you know, an increase in our current liabilities.

So what we expect to have is around $60 million in cash in the balance sheet and our net will be below a billion 650.

We've said as we raise the debt, we expect this business to generation 250 to 300 of cash flow.

That's what we think we're going to be doing

And Leon, what is the volume outlook for metal cans in '03, including Milwaukee?

We should be up some in the range of 5 or 6%, including those volumes

Great.

Thank you very much.

As a reminder, ladies and gentlemen, to register a question, press the 1 followed by the 4.

Our next question comes from the line of Carl Green with Dressner Bank.

Please go ahead, sir.

Yeah, hi.

Can I just clarify your comment on that pricing.

The 1 to 1.5%, was that for Ball overall?

Basically, if it was, could you then talk down and give us guidance as to what you expect for net pricing for U.S. best counts in '03.

That was U.S. beverage cans)

Thanks.

George Staphos from Salomon Smith Barney.

Go ahead with your follow up.

a quick clean-up question.

The two lines you're adding in PET, where are you adding those regionally?

We're finishing one in Del Ran (ph) as we speak, and another one is going to go to Cheeno (ph), I believe it is, this year.

I can't keep up with these guys.

They change their mind on a dime.

I believe it's Cheeno( ph), at last thought.

Given the plants, Leon, we're talking about, obviously, soft drink and water business, right?

That's correct.

We're going to start shifting to some specialty items of that nature this year as well.

Just to finish up, are you earning costs to capital yet to PET, or do you expect you will be there in 2003?

Not in 2003.

It is in our planning horizon and our three-year strategic plan.

Do you get there more from growth or managing the -- trying to reduce investing capital is tough to do in the business.

It has to come from growth.

How would you help me answer the question?

Probably a combination of growth and driving costs out of this business every day, you know, like we do in the beverage can business.

It is a volume thing.

One thing to keep in mind, George -- I'm not complaining now, by the way.

One thing to keep in mind on the business is the capital is relatively newer so the piece that is depreciation is high.

If you look at the EBITDA investment on this business, it is respectable.

You know, we're getting closer to making our costs to capital

Actually, what I was going to say Dave, if the long range stays down, we may cross the line next year.

We may get to earnings our cost to capitals.

Thanks.

Good luck in the quarter.

Thank you.

Edings Thibault with Morgan Stanley.

Go ahead with your follow up

On the PET, would you break out the base CSD verses water in terms of volumes and the two new lines just total capacity additions as percentage would also be great.

Okay.

Let's see.

Soft drink bottles were up -- let's include the Wis-Pak (ph) acquisition.

That is part of the volume now.

They were up 28% over last year.

We wouldn't expect that this year.

We'd expect something like probably 6% per soft drink growth.

Water was up something like 38% last year, and that's pretty indicative of the customer base that we serve.

We would not expect another 38% year, but, certainly, double digits, something in the 20% range.

Water is not too wild.

Right.

And do you have a breakdown in your business, basically, percentage of water versus CFD?

Let's see.

Right now we're doing about 3 to 1 CSD to water

Okay.

When you talk about the volume gains, is that in bottles or pounds?

In bottles.

So is part of the water some of the smaller water bottles?

If you look on pounds, it would be lower than 38%?

That's probably right, Ed.

It's still healthy, however?

Capacity additions with the two additional lines?

Somewhere between 400 million and 500 million.

As a percentage?

Something like 10%

Great.

Thanks very much.

Ladies and gentlemen, if there are any additional questions at this time, please press the 1, followed by the 4.

I'm not showing any further questions at this time.

Sir, please continue.

Okay.

Thanks, Shawn.

Thanks to all of you for listening in on this conference call.

As you can tell, we're continuing to be excited about our near term and longer term future and look forward to another good year at Ball Corporation.

We'll talk to you in April.

Bye.

Ladies and gentlemen, that does conclude your conference call for today.

We thank you for your participation and ask you please disconnect your line.--- 0