Crown Holdings Inc (CCK) 2006 Q2 法說會逐字稿

Good morning and welcome to Crown Holdings' second quarter 2006 earnings conference call. Your lines have been placed on a listen-only mode until the question-and-answer session. Please be advised that this conference is being recorded. I would now like to turn the call over to Mr. Alan Rutherford, Executive Vice President and Chief Financial Officer. Mr. Rutherford, you may begin.

Thank you very much, and good morning to everybody. With me on the call this morning are John Conway, Chairman and Chief Executive Officer, and Tim Donahue, Senior Vice President, Finance.

Let me point out that on this call, as in the news release, we will be making a number of forward-looking statements. Actual results could vary materially from such statements. Additional information concerning factors that could cause actual results to vary is contained in our SEC filings, including comments in the section called management's discussion and analysis of financial condition and results of operations in Form 10-K for 2005, and in subsequent filings.

In view of Regulation G, we do not intend to provide non-GAAP financial measures of performance on liquidity beyond those already contained in the Company's earnings release.

I will comment on the results, after which John Conway will discuss the quarter and outlook, before opening the call to questions.

Total company revenues grew 1.2% in the quarter and 2.4% year-to-date over prior year. Including the impact of foreign exchange, revenues would have grown 2.6 and 3.9%, respectively. Segment income at 172 million in the quarter was 1.8% higher than prior year and 3% higher in comparable dollars. Year-to-date segment income grew 2.6% to 275 million, 3.7% growth in comparable dollars.

Americas Beverage cans recorded 9.6% income to sales, a substantial improvement over the first quarter's 7.2%, but down on prior year due to volume issues and price decline in [the] North American market.

Volumes were good in European beverage, increasing a comparable 10% in the quarter and 11% year-to-date. Margins continued to reflect the impact of higher aluminum pricing, not totally recovered in selling prices. However, this issue, which in our opinion is a 2006 issue only, has been largely resolved with the change in pricing policy announced 1st of March, 2006, now generally effective.

Worldwide beverage can volumes were very strong, with volumes in Asia being up double-digit over prior year, resulting, along with the European and the American divisions, in total company volumes being equal to prior year worldwide year-to-date.

North American Food can volumes increased over prior year, and both the quarter and year-to-date income reported solid improvement.

In Europe -- in Food Europe, the first quarter volumes were particularly strong, up 3.8%, which has resulted in lighter volumes in this quarter. Also, seasonal weather-related issues impacted the pack in the second quarter. However, this will be made up in the remainder of the year, and it is anticipated volumes will end the year slightly improved over 2005.

European specialty packaging had a much improved second quarter after a somewhat weaker start to the year, resulting in an improved result over prior year. Based upon relatively strong demand in our major product lines to date, we are still targeting an improvement in segment income in the range of 5 to 10%, with a slight bias at this time towards the middle of the range. We still project free cash flow available to delever the Company and repurchase stock to be at least $300 million.

I will now turn the call over to John for his comments.

Thank you, Alan, and good morning. Everything considered, we are very pleased with our performance in the quarter. Alan reviewed with you the significant positive features of the Company's performance already, and I will not repeat what he said.

But summarizing, our ability to achieve good operating performance and segment income performance in the face of the beverage can unit volume loss in North America, which we discussed with you previously, and the very significant run-up in costs, including particularly aluminum, were noteworthy achievements. Further, as he pointed out, we were able to do this through solid productivity gains, strong general market demand, excellent emerging market growth, and our implementation of a price policy that responded quickly and effectively to the tremendous change in commodity costs globally. Looking ahead, we are still confident that our performance for the year will be good, and that it will fall within the ranges which Alan described a moment ago.

So with that, we will open the call for questions.

Bridget, if you can get the first call please.

(OPERATOR INSTRUCTIONS). Ghansham Panjabi, Wachovia Securities.

Did you see any benefit from pricing during the quarter in European beverage cans? Sales were up 29% year-over-year during the first quarter. The second quarter is tracking a little bit below on a year-over-year basis. And if you could comment on whether there was any market share loss there.

First, there has been no market share loss at all, so I think that's very positive. And yes, we did see some benefit from pricing in the second quarter.

Should we expect margins to see a meaningful improvement in the second half of the year?

We should expect margins to continue to improve in the third quarter for sure and, I think, the fourth quarter as well.

And the segment income components of the non-reportable line items -- there was a huge increase in profitability year-over-year. Could you reconcile that for us, please?

You're not talking about non-reportable segments; you're talking about the corporate and other non-allocated costs.

Right, exactly.

It's primarily pension. If you look at the income statement, you'll see the pension is much lower this year than last year.

Finally, in terms of your EBIT guidance, what should we use as a base EBIT number from 2005?

$5.35.

George Staphos, Banc of America.

Alan, I just wanted to make sure I understood you. So, you said that the cause of the very strong growth that you saw in both European volumes and beverage cans, and Asian beverage cans up double-digit, your total company volumes across all categories was flat. Is that correct?

That's absolutely correct in the six months. (multiple speakers) up flat to slightly up half a percent.

In the quarter, or that's for the full year?

In the six months.

For the quarter, could we get, therefore, some rough bridge of revenue, pricing effects, units, and would units have been basically flat as well in the 2Q?

Sorry; can you repeat that question, the second part of it?

Essentially I'm trying to get at what your rough pricing percentage increase was as reflected in revenue in total for the quarter, 2Q versus 2Q.

I'm sorry; we don't have that.

Third question, then, just piggybacking on Ghansham's question. If European pricing in beverage can was more fully implemented this quarter versus the first quarter, and it also seems that demand was quite robust, I was wondering why percentage margins dropped -- if I did my math correctly -- more in this quarter versus the year ago relative to the first quarter versus 1Q '05, where arguably there was less pricing embedded there. Help us understand what was going on in the margin trend.

We sold more, George. So, while we are improving the pricing, the fact that there's more units going out with lower margin this year compared to last year, it just has that kind of -- it's a math impact quarter-over-quarter.

And that overwhelms the fixed cost absorption from selling 10% more units?

Absolutely.

Okay. Food Europe -- can you give us a bit more detail in terms of the impact of the pre-buy and the seasonal factors, what's behind that, and kind of quarter-over-quarter -- year-on-year in the second quarter what was your volume down in Food Europe?

Why don't we first describe what some of the factors were regarding the food volumes in the second quarter in Europe. And as Alan said in his statement, it was largely a variety of some seasonal vegetable issues, ranging in just -- as you know the food business, a number of relatively small things that add up to the difference.

For example, the South African peach crop was relatively light in the second quarter because it was too hot in South Africa. The French and UK pea crops were somewhat delayed because there was a cool, wet spring in Northern Europe. The Benelux mushroom pack was somewhat light in the second quarter. So that's -- it's kind of a combination of things, and then we had a pet food customer in Ireland who had a plant fire. So, you add it all up and it accounted for the difference.

So we should expect more traditional third quarter both volume and margin for this business? Would that be fair?

Correct. We're expecting the third quarter to be somewhat better in units than third quarter last year.

And margins?

Margins as well.

Last question and I'll turn it over. Cash flow -- again, you're still targeting over $300 million. Does that include the potential additional funding in the UK on pension, or is that a separate line item?

At present, George, we think we can handle that within the current target. As you know, that payment arose due to a sale of our global plastics business in last year, and of course the other thing is that, obviously, we are funding a company pension plan, and simply adding to its funded status. So, yes, but we think we can handle it at the moment.

Thanks very much. Good luck in the quarter.

Chris Manuel, KeyBanc Capital Markets.

A couple of questions for you. Could you help us, maybe a little bit more, with some of where volumes were. I think you mentioned in your release that volumes were up across most segments. Can you give us more specifically what volume may have been like in North American beverage, North American food, Europe beverage, food, etcetera?

Let me try to give you a little help with that. Globally for the quarter, beverage was up a little over 5% in units.

And you --

In food we were off a little bit, about 2%. Those were the big categories. And if we broke them down by area, we were off about 8% in beverage in the Americas, and that's basically the unit volume loss that we've talked about. Food overall in the Americas up a little, about 7.5%. In Europe, food was up 5. And Asia, which is a small food business, but up almost 9%. I neglected Europe Beverage; on a comparable basis, up about 10 (multiple speakers) 10%, and Asia was up between 11 and 12.

And you said in the Americas for food that it was up in the quarter?

Correct. I said it was up 7.5%.

Okay, very good. My next question is along the lines of -- when you look at what you've given us before for full-year thoughts with respect to volumes, and I believe that was food cans would be up -- I'm just looking back at my old numbers you give us last quarter. Any update or direction that may be a little different with where you're at thus far? In other words, you had -- you thought beverages would be up about 6% globally for the year, food up about 5% globally for the year, aerosol up two, closures of five. Any changes, updates, thoughts there?

I think you're referencing the remarks we made in April (multiple speakers) getting an update. I think what we're now thinking, projecting for the year -- and I've just got beverage and food here, and I think that will (multiple speakers) for you -- we now think that food is going to be up total units globally for the year about 3%, and we think beverage is going to be up locally between -- closer to 6, about 6%.

So we're down a little bit in our food units for the year, I think we said about 5 previously; we now think about 3. But as you know, the food business could still be 5. But at the moment, with the softness we had in the second quarter in Europe, that's what we're forecasting. I think most of that's going to bounce back, as we just said, but we'll see. And beverage is about where we were for the full year previously.

One question on pricing. I know we've talked about European aluminum a lot, but let's talk about how you're doing with nonmetal, for energy coatings, freight, all those fun things, in both North America and in Europe. Do you feel that those have been any difficulties for you? Are you in pretty good shape there?

I think we're doing fine in North America, where we have formula pricing that provides for cost pass-throughs. And we talked about that on the last (multiple speakers). In Europe, we're going to do fine. There was a little margin compression beyond aluminum issues from '05 to '06 in the European -- I mean Western European, not Middle East -- Western European beverage can market. So we're in the process of correcting that with this new formula pricing regime that we have announced to our customers.

Okay. I have a couple of other questions, but I'll jump back in the queue.

Alton Stump, Longbow Research.

A couple of quick questions. First off, could you give me an idea of what percentage of your customers in Europe had accepted the conversion by the end of the second quarter?

By numbers of customers, well over 90%.

And then this is more of, I guess, looking longer-term, but here in North America, obviously, there was a lot of talk -- I think in the last year there was some market share shifting that went on on the bev can side. Just wanted to get an idea of -- looking overall at the industry, not just you guys but industry-wide -- is there any contracts coming up for rebid any time soon over the next couple of years?

There's very little that we're aware of in the immediately foreseeable future.

I guess just one last question. In your press release you mentioned that you sold the rest of your plastics business in Europe for about 150 million. Could you give me any idea what the cash usage from that -- if it would be more directed towards debt paydown or if it would be share buybacks or (multiple speakers)

The revenues of those businesses were about 150. We -- clearly, as you can see from the income statement, they were loss makers. We didn't get anywhere near that kind of number. So the proceeds we will receive or have received will be put towards debt reduction. It's -- as you can imagine from the loss makers, it's not anywhere near 150 million.

Tyler Langton, JP Morgan.

In terms of America bev cans, I know you talked about specialty cans helping to offset other volume losses in the '06/'07 timeframe. I was just wondering how that was going.

It's going very well. We are sold out, oversold really, for bev can capacity, and yet to bring on another 16 ounce can line in the southeastern United States. So, I think it's going quite well.

And then in terms of -- I know SG&A was down year-over-year. What were some of the causes for that?

Generally -- we are, obviously, generally always controlling the costs there, but part of it was the fact that we are not accruing management incentive plan bonuses at the same level as we were last year.

Mark Wilde.

It's Matt subbing for Mark this morning. Could you talk a little bit about the pricing environment right now in Asia?

I think generally speaking, it's quite good; that is to say, demand is very strong throughout China and Southeast Asia, the markets in which we operate. So, the general environment is very positive.

I thought there was a little concern maybe earlier in the year that rolling through higher prices in that region was going to be tougher than in other parts of the world.

The reference that we had made was one large important customer and how we would work out the increase in raw material costs with them. And that's an ongoing issue and something we're still dealing with. But other than that single customer, the pricing environment in the region is quite good because demand is so strong, and capacity, generally speaking, is relatively constrained.

I guess the last question, getting back to Americas Beverage, Americas Beverage cans. Are you making up the volume you lost solely on the specialty side, or are you -- I thought there was some discussion in the transcript that you might have had some other plans in the works to recapture that volume.

I think what we had said was our principal thrust is going to be on the specialty side. I think we've been helped this year by the fact that the overall beverage can market in North America is very strong. So we've been selling, frankly, more 12 ounce cans than we had anticipated. So that's been a help as well.

Dan Khoshaba, KSA Capital.

John, what do you attribute to what seems to be kind of an increased level of can consumption around the world? Volumes look stronger than they have in the past. You have the beverage guys, and (indiscernible) the food guys around the world, posting some pretty good unit volume numbers. And it's difficult to see what's really driving that. But what are your thoughts as you look at kind of global metal can consumption?

I think it appears to be a variety of positive developments. First of all, as you know, global GDP growth is reasonably strong. So per capita income is continuing to increase. So that helps all the emerging markets tremendously, obviously.

In North America -- and I think it's way too soon to say -- but it's arguable that there's a slight -- but it adds up to big numbers -- package mix change going on, cans versus PET. I'm not so sure about beer. And fridge packs, for example, for cans appear to be extremely popular and growing in popularity. So, I think there's that.

The specialty can segment, which is focused on energy drinks and healthier drinks, isotonics and so forth, continues to grow. We were up in the quarter 15% versus the prior year, and I think we are underperforming against the market simply because we lack capacity.

The food can segment, it's really hard to say. The food can sales in North America were very strong. At least one of our customers believes that, particularly in the soup and other category, which tends to be what the Europeans call ready meals -- stews, chilis, and so forth -- those sales are very strong. And arguably it's because people, at least in North America, perhaps feel that energy costs are pinching their disposable income a little bit, so perhaps they're eating home a little bit more then they were. I don't know. But we do know that sales were up pretty sharply in North American food cans in that category. So, to me it's just a whole range of things, all of which seem to be positive.

So it's partly stepped up global economic growth and all that that means, but also some innovation, I guess, on the part of can makers and product. Last question is somewhat related. I recently heard that a large brewer is thinking about converting a fairly significant amount of what is in glass today into cans for 2007 in Europe. Are you seeing any mix shift in Europe to cans? Beverage can volumes have been strong, but are you -- are people talking to you about any of that?

We've heard rumors of that as well, but we're not highly knowledgeable concerning it.

Good job, guys.

Joe Stivaletti, Goldman Sachs.

I just wanted to ask a couple of questions regarding your cash flows for the year. In that $300 million estimate for free cash flow for debt reduction and stock repurchases, what would be your updated assumptions for CapEx and for cash taxes for the year?

CapEx 175 million. Cash taxes, [do you know that], Tim?

75.

75.

And in terms of asset sales, I know you talked about in your press release about selling the European plastics businesses. What type of asset sale proceeds for the year would be reflected in that number?

As Tim already said, the businesses we lost, as you -- sorry -- that we sold, as you can see, were loss-makers, and the cash proceeds are not so strong.

It won't be included in the free cash flow number; it will come below free cash flow in the cash flow statement.

So in the 300 number, you're not including any asset sale proceeds?

That's correct.

Okay. But we shouldn't expect them to be terribly significant?

Correct.

Can you update us on where things stand with your stock repurchases, and of the 300 million, what you're sort of thinking?

So far we've bought back 1 million shares this year. And as I think I've said previously on these calls, the first half of the year is that we are a user of cash for obvious reasons. Our working capital is building during that period. I think we've sort of passed the peak now, and we will begin generating cash. So, obviously, we'll be looking at how we use the free cash flow, part of which will be to buy back more shares than we did in the first half of the year.

Andy Feinman, [Aridian].

So, if you're going to -- right now, when you say 300 million free cash flow, how do you factor your securitized receivables into that? Right now they're up $30 million from the end of the year.

I think, Andy -- with the exception of last year, where we entered a new program in Europe, generally we end the year on securitization where we begin it. So, I would say that there's no additional securitization proceeds in that $300 million number.

So, if you're up 300 million, and if that number is up 30 now, then it will be back down 30 by the end of the year.

As we collect the receivables, there are less receivables to securitize. So (multiple speakers) come down.

And your debt is up about 293 million. So, you combine those, and right now your leverage is up 323 million at midyear. And what you're saying is that at the end of the year, your leverage is going to be down by at least -- well, it may not go to leverage, but you have the cash that if you want, your leverage would be down by at least 623 million. You've got the 323 Europe, the 300 million you're going to get, you combine those -- so, you have 623-plus of free cash coming in between now and the end of the year? Is that correct?

They're your rough approximate numbers. But what -- the situation you describe is very normal in our business, as you know.

I understand. So, that's about $3.60 a share of free cash that's going to be coming in in the next six months.

That's not free cash flow, right? That's just what happens in the back half of the year. Where you take the whole year is how you get the 300 million free cash flow.

I understand, but it's just free cash for the last six months. I'm just making sure I got the math right. The fact of the matter is that if we start from where your net debt is today, and we look -- you know, where your balance sheet is today, and we look at where it's going to be in six months, that's how much the business is going to generate. And it's normal, it's typical, it's seasonal, but I just want to check the numbers.

The other thing I wanted to say was, the stuff you sold in Europe, the plastics, those plants were in France and Italy, 825 unionized employees with lots of long-tail liabilities. Can I assume that those liabilities are no longer Crown's liabilities?

Absolutely correct.

So, the deal has more than meets the eye, in terms of you're eliminating the money you were losing currently? You have eliminated some things that are going to put the Company on a better footing.

Absolutely right.

We're very pleased with what we accomplished. We had a number of buyers, independent buyers, each of whom thought that they could do something positive with these assets, and they had good reasons for that. We're just real happy at the outcome.

Thank you. Keep up the good work.

[Randy Salig], [Mortarar Capital].

A quick question for you. The volumes that you lost in the first quarter, the [Coke] volumes, you had suggested that you would be able to recapture them, principally through the specialty can segment, by the end of the year. Is there anything that's changed now, or do you still expect to recapture those volumes? And again, I just want to make sure I heard this right; if you could tell us what you think the growth rate for specialty is, that would be great, in unit volume.

In response to your question, what we had said earlier was that we expected to recover the North American market share volume loss over a two-year period, '06 and '07, and that our principal focus would be to do so through specialty can growth. And I'd say we're pretty much on track with that program. But we did not say that we would recover those volumes entirely in '06. It would put too much strain on the market, frankly, if we were to try to do that. As to specialty cans, as I said, we were up 15% in the quarter. We think that the market was up between 20 and 25%. So, still significant growth.

And this question may have been asked; I didn't hear it. In Europe, with (indiscernible) factory that's gone off-line due to the fire, do you think that will put even more positive pressure on pricing going forward for 2007?

I would think so. I suppose a part of that answer is going to be how quickly that capacity is replaced. But knowing how long it takes to do major capital projects, it would seem to me unlikely to be replaced until perhaps the second half of '07, and that should be very positive for the pricing environment in the fall of this year for '07.

Okay. Last question, and I just wanted to make sure that I got this straight. The 300 million of free cash that you expect to generate this year, does that include the impact of your one customer in Europe that you're having price discussions with and price issues with?

Yes, it does. It anticipates, we think, a conservative outcome for everything we're talking about.

When do you get to reprice that contract? When does that contract come up for repricing or rebid, if you will, for that one customer?

Our position, if you'll recall, is that we changed our price policy, price mechanisms for European beverage cans effective March 1 of this year. So our position continues to be that when we resolve these issues, the resolution needs to go back to a March 1 [reset].

Christopher Miller, JP Morgan.

Not to harp on the free cash flow, and I know it's always hard to parse it, but between the third and fourth quarters, how would you kind of expect that you would kind of split the 300 million of free cash flow in terms of cash coming back?

The bulk of it is going to be in the last six weeks of the year, from November 15th on.

And then also, in the market you've gone out, or at least it had been announced an add on to your term loans. What was the -- what's the thought process there, and what's the use of that additional lending?

What we're doing is thinking of improving our liquidity by adding to our term B debt and paying down the revolver. So, obviously, from a net debt point of view, it would hardly make any difference. And this would -- and at the same time, we would expand some of our covenants. And this would, of course, allow us to buy back stock from time to time, and not be limited by working capital needs of the business, which we've been this year, obviously, as I've just said, we are a user of cash. And as Tim has just indicated, we really begin to generate cash in the fourth quarter. So, to get out of that restriction, our thought was to borrow a few hundred million and just use it to pay down the revolver, or alternatively, buy back stock. (multiple speakers) our liquidity is what we were thinking of doing.

Also on the food can business, both in Europe and North America, can you talk a little bit about market share and where you think you have kind of trended over the course of this year, and where you see it going? Do you see your market share kind of holding flat in both those markets? Do you feel like you're gaining some share? What's your sense in the food cans?

We think in Europe, share has not changed very much. It's about where we were. And I think in North America it would appear that we may have gained some share. But I think we've been fortunate that we had some customers who've done quite well relative to the overall market.

And in North America?

In North America we may have gained a little share (multiple speakers), but some of that undoubtedly is coming from just happening to have a customer base that's been doing relatively well with their own product mix.

Bruce Klein, Credit Suisse.

I got bumped off; I didn't hear -- the net debt change, it looked like, I guess, the second quarter net debt was up more than I would have thought. I don't think we have full working capital to get there. Was there anything else funky going on in the second quarter on the cash flow? And secondly, do you have the payables or accrued number for us?

I don't have the details of the working capital. The biggest driver with the net debt being up from the first quarter to the second quarter is currency. Just as a point of reference, the euro at the end of March was about 121, and at the end of June it was about 128. So, you've got a situation where the actual currencies are rising, whereas the actual currency at June this year is lower than June last year. It's just currency.

And as you said, your bond plan, I guess, for your targets for cash flow debt reduction (multiple speakers)

Yes.

And then the pricing, in terms of the pass-through on the -- you talked about aluminum, but on the tin plate side, did that all get -- are you seeing any margin squeeze there? I know you sound like you had a timing issue on aluminum which kicked in March. But on the tin plate, do you under-recover or over-recover, or are you about even with the hike that went in effect, I think, in January?

In North America, I think, we did fine. In Europe, we may have been a little behind at the end of the day in total cost recovery in food.

Lastly, I don't know if you touched on asbestos payments or trends. Did you touch on that at all, or no?

No, we did not. Year-to-date we have paid $8 million of cash, which includes about 4.5 million of legal. Cases filed against us are something like in the six months 2700, compared to 6200 last year. We're still projecting in the cash 25 million, but it may be a little less than that, obviously.

So that all sounds relatively favorable.

Yes, correct.

Okay. I'll pass it on. Thanks.

David Ireland, ABN AMRO.

Assuming there's been no restatement, I just wanted to get a handle on the impact on these numbers of your consolidation of your Middle Eastern units last September. I'm assuming it may have been worth about an incremental $90 million in sales to European beverage, and that on the income side, it presumably was in equity earnings in '05, and it's in segment income in '06. I don't know if you'd give us some feel for what's happened to the underlying margin in [XT] beverage -- Europe Beverage in the first half.

I don't think we have the impact on the underlying margin. But, as you mentioned, the consolidation of the Middle Eastern plants was effective September 1 last year. So there were four months last year where the results were consolidated and eight months where the results were in equity earnings. I'm not sure if the consolidation by itself added 90 million. I would have thought the consolidation -- off the top of my head, I would guess about 55 to 60 million was the add from the consolidation. We were already consolidating one of the plants, and --

Because I think on a pro forma basis, you were quoting $117 million in your 10-K from January to end August.

Yes, but some of that that already had been consolidated. I don't have the numbers in front of me.

But it's about 50 or 60 anyway, you think, for the first half?

Yes, exactly. And then the balance of the growth is just coming from the growth in the business itself. It's true organic growth from all the capital we've invested.

Ghansham Panjabi.

Two last questions. One, how worried should we be about the current activities in the Middle East that we keep seeing on CNN as it relates to your business? And two, just the tax rate assumption for the year.

In terms of the markets that we serve, we have a little bit of business that goes into Lebanon, but -- I think the impact, direct sales impact, negligible. And then in terms of the region at large, of course, simply at this point I would say impossible to say. We're not seeing anything, but of course it's early days (technical difficulty) we would have thought (inaudible)

And the tax rate for the year?

I think on the tax rate we had previously said 25 to 30%. I think where we sit here at the end of June we'd obviously feel much more comfortable about pointing you towards the lower side of that, and perhaps even lower. What we have are -- is very nice growth in markets which have very low effective tax rates. And we've also had taxable income generated in the U.S. that's -- where we are utilizing a portion of the NOLs that we have, so there is no tax there as well.

Operator, we'll take one more question, if there is one.

[Miles Alsap], UBS.

Sorry; I missed one number you said earlier. What percentage of your customers have pass-through agreements in Europe now?

I said by numbers of customers, well over 90%. Virtually all the customers.

Do you know if any of your competitors are looking to set up pass-through agreements as well?

I believe they're all at this point taking the same approach as we, and have announced that as a general price policy.

Just another number I missed. In the U.S., what was the underlying market growth of (indiscernible)?

Our own or the market?

The market; because you were minus 8% (indiscernible)

Approximately 3%, we believe, for the quarter.

Finally, I was wondering when you're sort of looking to take back this market share. Are you having to be a bit more aggressive on the pricing side in the U.S. bev can?

No. Fortunately, we're not needing to do that, in part because of the growth that I just mentioned, and also in part because of the mix change to specialty can. So, we are attempting to avoid that.

Thank you very much. That concludes Crown Holdings' second-quarter earnings conference call. We thank you for your interest in our company. Thank you.

Thank you. That concludes our call.