Good morning, and welcome to the Crown Holdings Fourth Quarter 2020 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. Thomas Kelly, Senior Vice President and Chief Financial Officer. Sir, you may begin. Thank you, Kirby, good morning. With me on today's call is Tim Donahue, President and Chief Executive Officer. If you don't already have the earnings release, it is available on our website at crowncork.com. On this call, as in the earnings 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 the press release and in our SEC filings, including in our Form 10-K for 2019 and subsequent filings. Earnings for the quarter were $1.12 per share compared to $0.64 in the prior year quarter. Adjusted earnings per share increased to $1.50 in the quarter, compared to $1.04 in 2019. Net sales in the quarter were up 6% from the prior year, primarily due to increased beverage and food can volumes. Segment income improved to $397 million in the quarter, compared to $285 million in the prior year, due to higher sales unit volumes. As outlined in the release, we currently estimate first quarter 2021 adjusted earnings of between $1.35 and $1.40 per share, and full-year adjusted earnings of between $6.60 and $6.80 per share. These estimates assume exchange rates remain at their current levels and a full-year tax rate of between 24% and 25%. We currently estimate 2021 full-year adjusted free cash flow of approximately $500 million, with approximately $850 million in capital spending. Dividends to non-controlling interests are expected to be approximately $100 million. We expect full-year 2021 adjusted EBITDA, as defined in the release, of approximately $2 billion and year-end 2021 net leverage of approximately 3.5 x. With that, I'll turn the call over to Tim. Thank you, Tom. Good morning to everyone. Our continued best wishes for the health and safety to all of you and your families. Before reviewing the operating performance for the fourth quarter and the full year 2020, we want to again express our appreciation to our global associates for their continued efforts during the pandemic. Your efforts to meet the unprecedented demand from our customers in a safe and timely manner has been exceptional, and we thank each of you. We ask you to please remain vigilant in your adherence to recommended behaviors to ensure your safety and the safety of those around you. As described in last night's earnings release, 2020 was an outstanding year for the company. Record performances in segment income, EBITDA, cash from operations, and earnings per share were achieved in 2020, and 2021 will be even better. At the same time, the company continues to invest for future growth with more than 15 billion units of annualized b everage can capacity, having been commercialized or announced for commercial startup from 2020 through the end of 2022. The major projects are detailed in last night's earnings release, so we won't repeat them here. In Americas Beverage, demand continues to outweigh supply, and we have eight production lines, including three new plants currently in various stages of construction to bring more supply to these markets. In North America, unit volumes advanced 11% in the fourth quarter and 15% for the year, with our only limitation on further growth being available capacity. In Brazil, units were up 8% for the year, with our fourth-quarter sales output being limited by capacity. For 2021, we expect the segment to post significant income gains against 2020. Unit volumes in European Beverage advanced 10% in the fourth quarter, with strong volumes noted in Saudi Arabia, Spain, Turkey, and the U.K. Income was notably improved over the prior year fourth quarter on the back of the improved volumes, as well as continuing contributions from new facilities in Italy and Spain, as well as full production on the now converted aluminum lines in Seville, Spain. For 2021, we expect further growth in the segment's income. Sales unit volumes in European Food increased 4% in the fourth quarter and 7% for the full year as the business benefited from more normal harvest conditions in 2020 compared to weather-related weak harvests in 2019 and 2018. Additionally, production levels in the 2020 fourth quarter were more normal than in the prior year as the natural pull from the 2020 harvest reduced inventories accordingly. For the year, income in the segment advanced $23 million over 2019, despite the negative impact of the 2019 tinplate carryover into the first quarter. For 2021, we expect our European Food business to improve segment income by $50 million over 2020, with roughly half of that improvement being realized in the first quarter. Sales unit volumes in Asia Pacific declined by 1% in the fourth quarter and 4% for the year. While demand trajectory is improving, the region is still feeling the impact of virus-related shutdowns and movement control orders across most countries. We expect our Asia Pacific segment to achieve modest income improvement in 2021. We, like many of you, are monitoring the situation in Myanmar, which appears to have worsened over the last several days. The company has a 70% ownership in a joint venture, which operates a one-line beverage can plant in Myanmar with annual revenues approximating $35 million. Results in Transit packaging improved as better mix and continuing cost efforts offset weaker industrial demand in the fourth quarter. Despite the impact of the pandemic, the business again generated an outsized portion to the company's overall free cash flow. With general industrial conditions improving, demand for transit products and services is currently strong. First quarter income performance in the segment may lag the prior year, but for the full year, we expect income to improve by approximately $50 million over 2020, with a big chunk of that improvement being realized against an easy comp in the second quarter, with further gains in the back half of the year. Fourth quarter income in the non-reportables businesses benefited from strong North American food volumes and a strong performance in our beverage can equipment making business. The board-led portfolio review is ongoing. With regard to the portfolio review, we are currently marketing our European Tinplate businesses. That is food cans, food closures, aerosol cans, and promotional containers for sale. We are in the second phase, if you will, where buyers have already received detailed management presentations and are performing their due diligence on the businesses. Unfortunately, there has been much misinformation in the market concerning the business, including an article in the Spanish press so replete with inaccuracies it does not warrant comment. To clarify any misunderstanding of the business that you may have, we disclose the following. The business for sale had standalone 2020 EBITDA of $250 million with 2021 projected standalone EBITDA of approximately $300 million. As noted earlier, roughly half of that $50 million income growth will be realized by the end of the first quarter. The business performed well in 2020, and the acceleration and performance will continue into 2021. While food cans comprise 85%+ of the business for sale, it shares common coil cutting, coating, and printing activities with the other products. The food harvests in 2018 and 2019 were lower than prior years, owing to very hot and dry weather across the European continent. 2020 not only saw a return to more normal harvest conditions, but also a clear consumer shift towards rigid metal packaging for food products. While some of this was due to the various lockdowns across Europe related to the pandemic, we and our customers share a common optimism in maintaining this consumer level in the future. Consumers have discovered once again the economic and nutritional benefits of canned food, as well as now having a greater appreciation for the food can's unmatched sustainability and recyclability features. Our food division is the clear leader in the market and sets the standard for excellence in quality, service, and innovation, and I believe our food management team is the best in their industry. In recent years, we have invested for capacity expansion, innovation, cost reduction, and upgrades to property, plant, and equipment, including, but not limited to, new production lines, additional can and print capacity, auto packaging, and lightweighting, just to name a few. Cost reductions have focused on projects designed to take out overhead and fixed costs. Our European Food business enjoys a diverse business mix servicing various food and geographic markets. We possess an unrivaled customer portfolio with both large international companies and very strong regional leaders, having a good mix of long-term and short-term agreements. These partnerships allow us to develop strategic growth initiatives and achieve common objectives with our customers. As previously discussed, the business is currently being marketed for sale, although we caution there can be no assurance as to the timing, price realized, or certainty of such a sale. In summary, a very busy and productive 2020. Numerous projects were completed and several others started to expand global beverage can capacity. Importantly, we continue to convert our growth into expanded earnings and cash flow. The company had its best year ever in 2020. We expect 2021 will be significantly better than that. With leverage expected to be at or below three and a half times by the end of 2021, we expect to begin returning significant cash to shareholders this year. The company has never been stronger and our outlook never more positive. Truly a very exciting time to be at Crown. Just before we open the call to questions, we ask that you limit yourselves to two questions initially so that everyone will have a chance to ask their question. You're always free to jump back into the queue. With that, Kirby, we are now ready to take questions. Thank you. Thank you, sir. We will begin the question-and-answer session. If you would like to ask a question, you may press star, followed by number one. Please unmute your phone and record your name when prompted. And to cancel your request, you may press star, followed by number two. Our first question would come from the line of Mike Leithead of Barclays. Your line is open. You may begin. Great. Thanks, guys, and good morning. Good morning. Good morning. I guess first, Tim, I wanted to start with the portfolio review. Your team and the board's obviously been working on this for a little over a year. Can you maybe just flesh out what your team has learned going through this process and how you came to the decision to market the EU, specifically the European Tinplate business versus some of the other non-beverage can businesses? Just any color on the process would be helpful. Well, in the prepared remarks, I tried to clarify any misunderstanding that a variety of people have or have published with regards to the business. The business is a franchise business for us. If somebody does indeed buy the business, it will be a franchise business for them. And I think it's pretty obvious the performance of the business is improving. It's always easier to sell an improving business than one that's going sideways or dealing with other market conditions. And this business has an exceptional management team, such that if you wanted to own a franchise business, you can own this business, plug it right in, and have a management team that understands how to run it while the new owner learns more about European Food Cans. Got it. Maybe just a follow-up question on capital deployment. Can you just help us with how you're thinking about the priorities of excess cash flow over the next couple of years? Should we expect elevated levels of growth spending beyond 2021? After the $100 million or so for the dividend, should we think of buybacks as sort of the flywheel for excess cash, as your leverage is pretty normalized at this point? Thanks. Yeah. I think if you take the leverage number that Tom provided earlier, three and a half times against $2 billion of expected EBITDA, that gives you $7 billion of net debt, which is right around where we ended 2020. That would imply that after dividends are paid, that all cash flow that we generate will be utilized at some point during 2021 to repurchase shares. I think as EBITDA improves in the future and we continue to generate cash flow, that leverage will naturally decline, but we can use all the cash flow for dividends and/or share buybacks. As it relates to capital, 850 is a big number, but it's a number that we feel comfortable spending. We think we can deploy that in a responsible way, not only responsible into the market, but responsible in terms of our ability to convert that growth into earnings and cash. A little early to say what we expect for the number to be in 2020. Great. Thank you. You're welcome. Thank you. Thank you. Our next question would come from the line of Kyle White of Deutsche Bank. Your line is open. You may begin. Hey, good morning. Hope everyone's doing well. Thank you. Wanted to focus on North America or the United States. U.S. industry shipments were up 6% in 2020, and you mentioned actual growth was higher due to imported cans. Do you have a sense as to what the true underlying demand for beverage cans in the U.S. was in 2020, and how many cans the industry was short? When do you expect the industry to get to a situation where the domestic supply is adequate to meet the underlying demand? That's a mouthful, but it's a great question. I think our best estimate, and we saw some numbers the other day, it appears as if about 8 billion cans were imported into the U.S. in 2020. If you took, I think the industry came in at, what, 103, 104 domestically produced, plus 8 billion, that's 111, 112. If you compare that against the 97 billion cans in 2019, that's pretty significant growth. Do we think we're going to grow at that clip every year? Well, we'll see. The first thing the industry needs to do domestically is install enough capacity to cover the 8 billion cans that were imported, because those markets from which cans were imported will rebound in 2021 from their own local domestic demand and need to be supplied locally. There will be less cans available to come into the U.S. We brought on two lines in 2020, the third line in Nichols, the third line in Toronto. We have five other lines currently being in various stages of construction already in the United States, and the other fellows in the industry are doing the same thing. I think we're going to continue to see very strong demand in North America. Got it. My next question. Obviously, a lot of brewers had to move draft production into a package format this year. We've also seen the rise of e-commerce with Drizly. Just curious what you're hearing from customers in terms of keeping their production in cans, even as on-premise channels open back up. Do you think there's a fundamental uptick in demand here from these customers, or do you expect them all to go back into draft production once on-premise channels are open? Well, I think you've got a couple of things. As it relates to beer, for those people who still want to drink beer, if bars and restaurants open back up, you're going to have people drinking draft beer. I do think there's been a shift, though, for some prior beer drinkers into these spiked seltzers, and it's not just beer moving to spiked seltzers. If you were drinking a mixed drink, a gin and tonic or a vodka and soda, maybe you've gone to a spiked seltzer, and the spiked seltzers are all in cans. I think, yeah, your ultimate question is, how much of the growth do you think we've had is related to the pandemic? I think, if we were up 12% or 14% as an industry, counting imports, maybe 2% or 3% of that was related to the pandemic. I think the rest of it is real growth as not only the marketers of these products, but also consumers recognize the sustainability benefits of the can. The great marketing features, the billboard print feature of the can versus other packages, and the shifting tastes of consumers away from perhaps some people away from draft beer and mixed drinks towards spiked seltzers. Got it. Thank you. I'll turn it over. Good luck in the year. Thank you. Thank you. Our next question would come from the line of Arun Viswanathan of RBC Capital Markets. Your line is open. You may begin. Great. Thanks for taking my question. Congrats on a great 2020 and a positive outlook for 2021 here. I guess, first question is just on the free cash flow and de-leveraging. Do you feel that you accelerated that this year in 2020? Was there some working capital gains that you felt were a little better than expected, or was it production? Is that possible also in 2021? Just understanding the puts and takes on the $500 million of free cash flow guidance for the year. Yeah, I think, Arun, every year we start out, the businesses are somewhat conservative, I think, when we start out, especially around working capital needs in the business. We always start the year and run through the quarters with higher projected working capital usage than we end the year. I don't think we did anything special or exceptional at the end of the year. I think most of the excess free cash flow we had at the end of the year was due to the earnings being just much greater than we had forecasted. Although, I will tell you, at this point, we are forecasting a significant use of cash from building working capital for all the new beverage lines that we are putting in. We'll see how that goes for the year. You're always free to look at things the way you want to look at things and do your own projections, but I would caution you against getting too far ahead of the numbers we've provided you already, only because it's early in the year, and we, like others, are going to be bringing on substantial capacity, and there's a natural one-time working capital need to open up each plant, and we've got a number of lines coming up globally in 2021. Sure. Thanks for that. Just a little bit of a follow-up, I guess, an extension is, your European Food Can, you provided some nice color there, so thanks for that. The performance has improved. You're calling for $50 million growth in 2021. I know that, potentially, it has been a beneficiary from COVID as well, and maybe there's some structural benefits that are lasting. I guess I'm just curious as to what the benefits are of divestment at this point. Again, the leverage is already relatively low for the company. I think it is a relatively strong business that provides good free cash flow. Along with that, I'm just curious, are there particular other arrangements you'd consider, like JVs or retaining an equity interest? Maybe you can just elaborate on some of those thoughts. Well, it's a great question. You're right. For the last couple of years, everybody was concerned about our leverage. Everybody but me. When you're in a packaging business like ours, you know you're going to generate significant cash flow every year. You don't get overly concerned about leverage, especially when it's as cheap as it is today. We don't have a leverage problem. I don't think we ever did, and we certainly don't have one now. Moving towards three and a half by the end of 2021 demonstrates we don't have a leverage problem. You know the thesis behind the portfolio review. The thesis is if we become a single-line company with the one product line, which one competitor seems to have a very high multiple, that our resulting multiple would trade up towards that, and that that offsets any dilution from selling any or all non-beverage can businesses. I won't say a whole lot more other than that we are deeply into a process right now, and we'll see where the process takes us. I think, we like food cans. We like the performance of food cans. We like our management team a whole lot. The European Food is entirely different than the North American Food business. It's a much broader geographic and product business than you see in the United States. They pack higher quality foods in cans in Europe than they do in the U.S. It generates a substantial amount of cash flow, and it's a very stable business, notwithstanding some poor harvests. We didn't have an exceptionally great harvest in 2020, but we had a more normal harvest. When we look at the $50 million of improvement we're forecasting for 2021, roughly $20 million of that is the tinplate carryover and $15 million is currency. We're not asking you to believe a whole lot more than $15 million of organic growth in the business year-on-year, and that's going to come from 2% to 3% volume growth. I think all those things kind of support what you said, Arun, in terms of why would you want to sell the business? Having said that, we're in a process, our view, the board's view is, depending on the offer we get, we'd be prepared to trade the business for an appropriate offer. If we don't get an appropriate offer, we're not going to trade the business. We'd be more than happy to run the business and have a business that generates this kind of cash, support the growth objectives we have in the other business. Okay. I'll turn it over. Thank you. Thank you. Our next question would come from the line of George Staphos of Bank of America. Your line is open. You may begin. Hi. Thank you. Hi, guys. Good morning. Thanks for all the details. Hi, George. Congratulations on the progress. I wanted to go into, Tim, your comment on balancing the capacity expansion responsibly with market trends. I pretty much know what you mean there, but if you could maybe give a bit more detail in terms of what that means for Crown over the next couple of years, and relate that to whether we are in a heavier than normal or normal contract renewal period as we get into 2022 and 2023. Relatedly, did you give a global beverage can volume outlook or number for the fourth quarter? I don't know that you provided that. Add a follow-on. I didn't, George, because Asia was down, and it'll skew your comparison to others because the others don't operate in Asia. I think what I gave you was Europe at 10, North America at 11, Asia down at one. I think if you take that globally, I think our fourth quarter was probably on the order of 3%-4% because Asia drags it down. Okay. I think our estimate for 2021 is probably 10% or 11% growth just because of all the capacity coming on. When I talk about responsibly, George, the first level of responsibility is to our own company, it's one thing to throw a lot of capital at a business and ask your people to do it. It's another thing to make sure you're asking your people from the top of the organization, you need to be responsible with what you're asking your people to do. We've had a lot of experience building plants over the last 25 years. I think probably nobody has built anywhere near the number of plants we've built globally. Our expansion has largely been from the construction of new plants as opposed to the acquisition of others' businesses. We have a skill set, a core competence within the company to design, engineer, and build our own buildings. Design, engineer and build our own production lines, start them up with our own people, in an efficient manner, in a relatively short period of time, and try to convert through the learning curve and get cash flow and earnings to convert as quickly as possible. We are focused on generating earnings and cash flow. Yeah, we want to grow the business, and we want to have our fair share of the growth that's available. I think we can do that. I think, we look at ourselves in the North American marketplace, we're probably about 24% of the market. I think we can modestly grow that 24%, but that doesn't mean we need to be 25% or 28%. It means 24% or 24.5%. We're trying to be responsible in the market, and we're trying to be responsible to ourselves. Okay. I guess, just if you can comment, is 2022, 2023 a more normal or heavier than normal renewal season? My second question is just as we think about the strategic review, can you comment to the extent possible, how your views of both transit and European Food have evolved over time? My sense is the businesses have probably improved in terms of your own outlook. Maybe not, but I throw that out there. What does that mean in terms of your expectations, in terms of how this will ultimately conclude or things that you're looking for? Should we expect that whatever you do receive from the strategic review, assuming you do a transaction, would that be largely applied to buyback? Thank you, guys, and good luck in the quarter. Thanks, George. I think your question with respect to 2022 and 2023 contract renewals, and if we just deal with the North American marketplace, I would say that there's nothing sizable that I'm aware of that comes due during 2022. There are a couple of very large contracts which come due at the end of 2023 for the entire industry. I would expect that the customers and the suppliers will all determine how much they want to accelerate the renewal or delay that renewal depending on where the suppliers and where the customers see the supply-demand balance. As it relates to our view of the business, I think we're going to be up, as I said, on the European Food business, the business is going to be up roughly $50 million year-on-year. If you add that to the 2020 number, George, you're going to get to a number that's probably the highest number we've ever had in our European Food business, despite the euro being at about 120 versus, I think it was about $1.35 when we bought Mivisa six years ago. Despite 12% currency headwind, the business is still going to be greater than it was six years ago, and that's a testament to the amount of cost we've taken out of the business, the efficiency of the operation, and the excellent management team. On the transit side, we've had fairly anemic industrial conditions over the last 18 months, coupled with a pandemic. I think if you look at what we expect our performance to be in 2021, the EBITDA is going to be somewhat close to the EBITDA we paid for the business, notwithstanding the incredible amount of cash we've generated and taken out of the business over the last couple of years. I would say that on balance, very pleased with food can performance. If you take a balanced view of transit, yeah, it might be down $10 million or $20 million EBITDA versus when we bought the business. Given what's happened in the marketplace with industrial demand and the pandemic, really pleased with how the team has taken cost out to react to that and keep the business much more stable than perhaps many of you thought it would be based on their performance in the 2008, 2009 financial crisis. Thank you very much. Thank you. Thanks, George. Thank you. Our next question would come from Salvator Tiano of Seaport Global. Your line is open. You may begin. Yeah. Hi, guys. Hi, Sal. Congratulations on another strong quarter. Firstly, I wanted to talk a little bit about European Beverage. You had a very nice quarter, and I guess things are improving in the south. Firstly, if you can talk a little bit about what you're seeing as lockdowns were implemented again in December, because I think that was an issue during the summer. Also, you had a pretty nice operating income growth here. I know last quarter you seemed less excited about it, but is your view starting to change about the potential to grow volumes there more and adding more capacity in Spain, Italy, et c.? Yeah. Good questions. I got to decide how much I really want to answer of that. As I said in the prepared comments, there are reasons why European income performance was so much greater than the fourth quarter of last year. It really has to do with a depressed level in the fourth quarter of last year, owing mainly due to startups in Italy and Spain, and also the fact that the big two-line can plant in Seville was down for conversion from steel to aluminum. That's behind us. I think as we look forward, obviously demand is intensifying across Europe. We believe we're going to see some of the same trends in Europe over time with respect to spiked seltzers that we've seen in the North American marketplace, and that'll put greater demand on cans. We still have the issue of tourism, which is still negatively impacted by the pandemic. While the lockdowns or the shutdowns are not as great as they were over the summer months, there still is a lack of tourism, especially across the southern countries, Spain, Italy, Greece. Hopefully, depending on the vaccine rollouts, we'll see some greater movement in tourism as we get into the tourism season next summer. I think, as we look forward, clearly we're adding a lot of capacity in North America, a lot of capacity in Brazil. We're adding capacity in Southeast Asia. There'll come a time when we're prepared to add capacity in Europe, yes. Okay. Makes sense. By the way, I think at least in Greece, vaccinations are going better than most people would expect. At least that's a good thing. A little bit again on Europe. I think in other markets, Western, Northern countries, the U.K., Germany, demand is growing very solidly. I wonder, can this affect demand for the countries in which you operate? Could you export in those regions? Is there a potential to essentially have a spillover of that tightness into other countries? Well, we operate two large beverage can plants in the U.K., so we're there already. We have a large, modern two-line can plant in Eastern France, so we can get to Germany pretty easily from there. We can also get to Germany from a two-line can plant in Slovakia. While we're not in the German market, we have the ability to get there. Yeah, we're going to participate in that growth. I would tell you that currently our growth is limited by our capacity. To your earlier question, we'll continue to evaluate when it's appropriate for us to add more capacity in the European business. Thank you very much. Thank you. Thank you. The next question would come from the line of Neel Kumar of Morgan Stanley. Your line is open. You may begin. Great. Thank you. In terms of your 2021 guidance, can you just give us a sense of what kind of volume growth you're assuming by region? Then in terms of startup cost, do you expect that to be a significant headwind year-over-year? Is there any particular quarter where startup costs will be heavier, or should it be generally consistent throughout the year? Somewhere I have growth for 2021 by region. Let's see if I got it here. I think I said we'll be up 10 or 11 overall. It's probably about 10% in the Americas, probably 7% in Europe, maybe about 12% or 13% in Asia. I would describe the European numbers and the Americas numbers as capacity constrained. They could be greater if we had more capacity, but we're bringing on what we're bringing on. Asia will be largely a recovery of a down year in 2020 and a resumption of the growth profile we've seen for the last decade at least. For a boring can industry, 10% is pretty good. I'm sorry, Neel, what was the second question? It was around startup costs. Do you expect that to be a headwind year-over-year? Yeah, we have startup costs every year. We bring on plants every year. We've been building plants for 20+ years. Sometimes we bring on one or two plants a year, sometimes we bring on four or five. There are startup costs every year. The differential is obviously the rollover impact, how much more do you have this year or less than you had last year? I think we'll have more in 2021, although it really comes down to how do you measure startup cost. You can get real creative in assigning a number to that. We'll have startup costs in 2021, but it's embedded in the number we've given you. Great. That's very helpful. Do you anticipate any meaningful headwinds from non-metal costs like freight, labor, and utilities in 2021? With freight in particular, I think in the past you mentioned you were changing contracts to have prices more representative of the actual freight costs rather than a basket like the producer price index. Can you just give us a sense of what percent of your contracts have this updated structure? I would say most. I think the headwinds that everybody's going to feel in 2021, not just the can industry, but is just a general tightening of commodities and upward price pressure on commodities. Specific to freight, there is a container shortage across Asia right now, so getting containers timely is difficult and the price obviously is reflecting that. You attempt to pass through those exceptional costs, if and when you incur them. On steel, we're going to see a general tightness in steel globally this year. I think the Chinese are using more steel. The container shortage I mentioned earlier to get steel out of Asia. During the pandemic, there were a number of mills that were idled, so the time it takes for those mills to come back on stream, if they actually do, but until then, steel will remain tight. All right. Thank you. Thank you. Thank you. Our next question would come from the line of Ghansham Panjabi of Baird. Your line is open. You may begin. Hey, guys. Good morning. Morning, Ghansham. Tim, pre-pandemic, standard cans were sort of flat to down in North America, and any growth the industry generated was really in specialty cans. Do you have a sense on how much of the 15 billion cans in terms of incremental growth for 2020, sort of year-over-year, including the imports, came from specialty versus standard? Would the standard can be the category that sees reversal post-pandemic? Maybe you could just tie it more broadly to some of the commercialization initiatives you see in the categories in North America, hard seltzers and whatever else. Hell of a question. I think all sizes, Ghansham, were up tremendously in 2020. We're all trying to get the customers as many cans as we can, regardless of where we get them from. They're taking as many cans as they can take, regardless of the size. There are some customers who only market in the sleek or slim cans, but the big customers obviously market in all sizes, and they still market primarily in 12 oz standard cans. What they did to try to get more product on the shelf, not only for us to make cans quicker, but also for them to fill cans quicker, was limit the number of SKUs that they were requiring from us and that they were putting into the marketplace. Take beverage company A, they might have 200 SKUs. Over the summer, they probably cut it back to four or five, to be quite honest with you. I think that all sizes were up. Your comment that prior to the pandemic, just be a little careful, because prior to the pandemic was also prior to this greater realization of sustainability and responsibility towards the environment and recyclability, superior recyclability of the can versus other products. There's a kind of a combination of pandemic and sustainability-related factors here that are driving can usage up. I think that post the pandemic, we're going to continue to see outsized growth in beverage cans. Off a smaller base, the specialty cans will have a bigger growth number, but I think standard cans will continue to grow as well. Got it. In terms of just a competitor of yours is obviously massively step functioning CapEx for 2021 to ramp up capacity off of already pretty high numbers. You have an $850 million number baked in for 2021 that's well above your historical levels, and you've already guided towards that previously. Curious as to what is sort of the internal limitation in terms of if you see opportunities being able to ramp up that number more significantly. I guess the question is there a wide range around that number, or is that just based on what you see in terms of constraints, that $850 is a pretty tight number at this point for this year? Listen, $850 million is $850 million. I know the number you're referring to. I guess the number you're referring to is probably about 170% of our number that the other fellows talked about. If you just deal with the North American or Brazilian business, their business is significantly larger than ours. I guess if you want to maintain your market share and you're looking to satisfy the growth of customers in the marketplace, if you're 45%-50% of the market, you need to spend a lot more than somebody who's only 24% of the market. That's the way I would answer that. Got it. Thank you. Thank you. Thank you. Our next question would come from the line of Phil Ng of Jefferies. Your line is open, you may begin. Good morning, Tim. Good morning, Tom. This is actually John doing it on for Phil. How are you doing? Good morning, John. Hi, John. Congrats on the good print. I first wanted to touch on trends. Trends, in 4Q, was the first quarter in 2020 that was up year-over-year. Looks like a lot of that was based on some of the cost reductions that you called out with margins improving. How much of that is sticky going into next year? As your forecast calls for significant upside for the business in 2021, is that based more on a reopening or those cost initiatives kind of continuing through next year? Well, I think it's both, although you're right. As we recover, most notably the recovery you'll see in Q2, because Q2 was the first, if you want to call it the COVID quarter, was the first COVID quarter we had, and it was the one that was impacted the most. There'll still be further cost savings. Structurally, we've taken a lot of cost out of the business as it relates to administrative overheads. I think when we bought the business, we understood it was a pretty fat business up top, and it didn't need to be that fat up top to service its customer base. Okay. Just in regards with the capacity expansions, I think with maybe the exception of the greenfield in Vietnam, we had most of those capacity expansions already known, but we were a little light maybe in our estimates on the 15 billion, so kind of coming in a bit short of that. Would you be able to walk us through maybe the line capacities at each of those facilities to kind of get to that 15 billion? Then just thinking about 2022, you have that Henry County, Virginia, greenfield coming up. It seems like your CapEx might still be pretty elevated in that 850 range going into 2022 with that. Is that accurate, or how should we maybe thinking about that working capital in kind of the out years? I think, since the beginning of 2020, we're bringing on four lines in Brazil. That's probably about 5 billion cans. You've got the four lines in the two new plants in the United States, Bowling Green and Martinsville. That's probably another 5 billion cans. Between the third lines in Olympia, Nichols, and Toronto, that's three lines there. That's another 2.5 billion- 3 billion cans. You've got Vietnam, you've got Thailand. You add it up, you get to 15 pretty quickly. Your second part of your question? Was just the CapEx going into 2022, given the additional North America greenfields that you're starting up in that year? John, I think it's a little early to talk about CapEx for 2022, but it's just too early. Okay. Thanks for the color. Thank you. Thank you. Our next question would come from the line of Gabe Hajde of Wells Fargo Securities. Your line is open, you may begin. Tim, Tom, congratulations on the year, and hope you guys are all well. Thank you. Tim, you were the first to kind of be a little bit, I'll say, cautiously optimistic about if this was a new trend, and I think we're detecting that it is. Taking a little different angle to what's driving growth, including individualized packaging and consumers' affinity for convenience. I'm specifically thinking about pre-mixed cocktails, which enables these brand owners to sell a $25 bottle of vodka for $50 in 20 pre-mixed cans. I would think that this is in very early stages, and even in 2020, a lot of these product launches were in fact delayed. Any kind of color you can provide there in terms of just directional discussions or where you're seeing growth? Separately, on the carbonated soft drink side, there's one brand owner that I would say is pretty far down the path in terms of customer segmentation with specialty cans. Do you envision this as an opportunity for Crown going forward? I think on your second question, the answer is obviously yes. On your first question, you're right, to the extent that marketers of pre-mixed alcoholic or cocktails, they would've had desires to get to the market, would've been very difficult in 2020, just given the tightness in can supply. That will open up as we go forward. I think there's an opportunity there, yes. I won't say anything beyond that. All right. I'm detecting a little bit more of a constructive tone in your voice, maybe it's misconstrued, for Europe. Has something changed in perhaps the past six months on the demand side that gives you a little bit better outlook there? You talking beverage? Yes, on the beverage side, sorry. Commercially. Well, if I wasn't constructive before, I apologize. I would say that, I think there's a general tightening that we're seeing. Even with a year in which the pandemic had an impact in Europe, it had no impact in North America unless it was positive, but it did have a negative impact, especially in the second quarter across Europe. We still had a very tight year. I think we're starting to see greater movement on the sustainability front in Europe towards cans. If North America was lagging on sustainability as it related to cans versus every other packaging fronts, lagging Europe before, they're way ahead of Europe now. I think we're starting to see the European market more fully embrace the can, and we're seeing more tightness than we would've seen a year ago. All right. Thank you. Thank you. Thank you. Our next question would come from the line of Mark Wilde of Bank of Montreal. Your line is open, you may begin. Thanks. Good morning, Tom. Good morning, Tim. Good morning, Mark. Wanted to just talk about the beverage can market, and if we were to see the market start to slow down, Tim, how quickly could you respond to a shift in market growth, and what would be the indicators you were looking at? It seems like everybody got caught by the swing to the upside here. I think the tone across the sector right now is quite bullish. If we were to see a deceleration, what would you be looking for? Then, how quickly might you be able to react? Well, I think it's a good question. We've tried to talk about this in the past. Nobody wanted to listen to us. Now you want to ask the question. Thank you. I think that we had, including imports, what? 12%-14% growth and 15% growth in North America in 2020. We're not going to see that every year. What does a deceleration mean? Does it mean we only grow 5% or 6%? Well, that's still 6 or 7 billion units. That still requires seven can lines. By deceleration, do you mean we start going backwards? I don't think we're going to go backwards for the next several years. I think we're still going to see growth. The only question is how much growth. Is it going to be 4%, 8%, or 10%? Can the industry meet that demand growth? I think for the next two to three, at least for the next three years, we're not going to be dealing with that. Could we react to that? Sure. I think we've described to you, we've got a number of projects currently under construction. We would finish those projects, but we would certainly reevaluate the other projects where we haven't started or announced yet. Yes. Okay. Just to back on North American market, just briefly. Do you have any sense of how much incremental volume the industry might have been able to sell had the capacity or the imports been there? You see these articles about beverage companies complaining that they can't get cans. You just mentioned the pre-mix cocktail guys being constrained to what they could do in 2020 by lack of supply. Just any general sense of that? I don't. Part of the problem is I think sometimes we're all counting the same cans, right? If we were up including imports, I don't know, what are we up, 14 billion cans? Could we have been up another two or three billion cans? Yeah, sure. Beyond that, I don't know. It's just purely a guess. Yeah. Okay. Thanks, Tim. Good luck in the quarter, and I appreciated the commentary about the review. I don't think anybody on the call here today wants to see you do a bad deal just for the sake of doing a deal. Well, your name today is Joe Strummer. Thank you. Hopefully you understand the reference. Yes. Thank you, Mark. Thank you. Our next question would come from the line of Anthony Pettinari of Citi. Your line is open. You may begin. Good morning. Hi. Tim, is it possible to give a broad overview of the regions that you're importing cans from and to? To the extent that that trails off either in 2021 or 2022, if you have a sense of when that normalizes, should we think about that as moving the needle on margins with domestically sourced cans presumably generating higher margins? In 2020, we imported a significant number of cans from Mexico and Brazil as those countries were initially shut down with the pandemic. The availability of cans to come in from those markets in 2021 will be, I don't want to say zero, but significantly less than it was last year. We are importing cans from one of the Middle Eastern countries. The imports this year will be far less in the Crown system than they were in 2020. We have the Nichols and the Toronto line, the third lines of both of those plants are operating really well. Efficiencies are really high. I think our cost per thousand in both of those plants is now lower than it was before we put the third lines in each of those plants. That'll replace much of that demand, and we expect to get the Olympia line up sometime here in the first half of the year as well. We'll get Bowling Green going in the back half of the year. The imports are going to be a lot less in 2021 than they were in 2020, and we have capacity coming on to replace that. Yeah, you're going to see some improvement. I think that's baked into the estimate we've given you for 2021 already. Okay, that's very helpful. Just switching to transit, as that business seems to be recovering, are you seeing any notable trends in terms of mix? I'm specifically thinking about customers maybe picking up investments that they delayed during COVID. Anything that you're seeing in January, February, in terms of consumables versus equipment and tools versus protective solutions? Yeah, I would say that on the consumable side, strap and protective, we saw an acceleration of demand in the late fourth quarter, early part of this year. The orders for equipment and tools are picking up now. It'll take us a little while to obviously build that. That's why you didn't see that come through in the fourth quarter. I think we'll start building that, and we'll get some of that equipment out in Q2, Q3. Yeah, the answer is yes, we're seeing an acceleration in demand. Okay, that's helpful. We'll turn it over. Thank you. Thank you. Our next question would come from the line of Adam Josephson of KeyBanc. Your line is open. You may begin. Tim, Tom, good morning. Congrats on a really good second half of the year. Tim, just on the portfolio review, a two-part question. I understand the objective to become a pure-play beverage can company. Obviously, the pure-play producer is trading at a very high multiple. First part of the question is why European Tinplate rather than Transit Packaging in that regard? The second part of the question is, you look at the pure-play food can producer out there, their relative multiple's the lowest it's been in a decade. You look at that pure-play beverage can producer, their relative multiple's the highest it's been in a decade. Are you at all concerned that you would be, in effect, selling low and buying high in that regard? You want us to sell beverage instead, Adam? You tell me. Listen, I think we described our food can business for you earlier. It is a business that recovered nicely in 2020. It's a business that's going to perform exceptionally well in 2021. It is a franchise business. It is a business that others should want to own. It's a business they can plug in. It's a business you don't have to have any experience in food cans to own. You're going to get a management team that's second to none. For that reason, we believed it was more readily marketable, and more readily marketable at a fair price to trade than the other business, which is coming out of a weaker industrial backdrop and a pandemic, more impact from the pandemic. Any follow-up question, sir? I'm sorry? He asked if Adam had a follow-up. Oh. Oh, Tim? Yeah. Sorry. Just on the second part of it, so again, given the cash flow characteristics that you've always talked about with respect to the food can businesses, given the lift they've gotten from the pandemic, whatever that may be, and perhaps some of it's sustainable rather than temporary, how much reservations do you have about parting with such a business? Well, the beverage business is going to be really strong at least for the next three to four years. We know that. We can see that. Beyond that, you don't know. Investors have a much shorter time horizon than three or four years, so we'll see where the world takes us. From the standpoint of putting together a portfolio of businesses and having within that portfolio stable businesses which generate a lot of cash flow and don't require a lot of capital to support the other businesses which do require capital from time to time and generating cash to do other shareholder-friendly things like buy back stock and/or pay dividends, you always have reservations. The board's undertaken this process, and so our job as a management team is to see that through, one way or the other. We'll determine whether or not we sell the business or we don't sell the business, depending on the offer to trade. You always have reservations. You cross the street in the morning, Adam, you have a reservation, but you still cross the street. Got it. Thanks a lot, Tim. Thank you. Thank you. We do have another question from Salvator Tiano of Seaport Global. Your line is open. You may begin. Yeah. Hi. A couple of quick follow-ups. One is, in European Food, you talked about the number of difference with the U.S. I don't think I heard about a little bit the pass-through mechanisms. Generally, in Europe, it seems things have always a longer lag. Can you comment on pass-throughs for European Food Cans versus U.S. Food Cans? The second one, which also is tied a little bit to cans. You did the conversion of a food can line in Toronto last year. Do you see any other opportunities, perhaps as the food can spike subsides in the next few years, to convert more lines to beverage cans? Yeah. One of the things, the Toronto line, it really was not the food line converted into a beverage line. It was a brand-new beverage line. What we converted was the space in the plant that was allocated towards food, towards beverage. It was a brand-new beverage line. It was not a conversion. I do not see any further opportunity across the portfolio to convert a food line to beverage. On your first question, yeah, we have pass-through mechanisms across many of the contracts in Europe. The one big difference in the European business as opposed to the North American business, in the North American business, 90%+ of the contracts are multi-year. In Europe, I would say that 50%-60% are multi-year and 40%-50% are annual. You're naturally renegotiating all those terms on an annual basis. Okay, perfect. Thank you very much. You're welcome. Kirby, I think that was the last question. I want to thank everybody for joining us today. That concludes the call, and we'll speak together with you in April to review the first quarter results. Bye now. Thank you. That concludes today's conference call. Thank you all for joining. You may now disconnect.