Good morning, and welcome to Crown Holdings' Second Quarter 2024 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. Kevin Clothier, Senior Vice President and Chief Financial Officer. Sir, you may begin. Thank you, Elle, and good morning. With me on today's call is Tim Donahue, President and Chief Executive Officer. If you do not already have the earnings release, it is available on our website at crowncorp.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 SEC filings, including our Form 10-K for 2023 and subsequent filings. Earnings for the quarter were $1.45 per diluted share, compared to $1.31 per diluted share in the prior year quarter. Adjusted earnings per diluted share were $1.81, compared to $1.68 in the prior year quarter. Net sales in the quarter were $3 billion, compared to $3.1 billion in the prior year, reflecting a 6% increase in global beverage can volumes, with North America up 9%, offset by $94 million from the pass-through of lower raw material cost. Segment income was $437 million in the quarter, compared to $414 million in the prior year, reflecting improved results in global beverage. Free cash flow in the first six months was $178 million, a record amount through the first six months, driven by strong operational performance, reduced capital spending, and tightly managed working capital. The balance sheet strengthened further in the quarter, with net leverage at 3.2x, compared to 4.0x in the same period in the prior year. In June, KPS Capital Partners agreed to sell Eviosys. We expect proceeds of approximately $300 million, net of tax, from our 20% interest in Eviosys. As stated in the earnings release, third quarter adjusted earnings per diluted share are projected to be in the range of $1.00 to $1.00, $1.75 to $1.85, with full year guidance of $6.00-$6.25 per share, an increase from our previous guidance of $5.80-$6.20 per diluted share. Key assumptions supporting our updated guidance include net interest expense of $380 million, average common shares outstanding of approximately 120 million, exchange rates at current levels, full year tax rate of approximately 25%, depreciation of approximately $310 million, non-controlling interest expense between $140 million and $150 million, dividends to non-controlling interest of approximately $125 million. We now project 2024 full year adjusted free cash flow to be at least $750 million, with no more than $500 million in capital spending. With the combination of projected strong free cash flow and proceeds from the Eviosys sale, we expect to finish the year below the low end of our previous near-term net leverage target of 3-3.5 times. We expect cash flow to remain strong, allowing us to resume share repurchases while continuing to drive the deleveraging process towards our new long-term net leverage target of 2.5x. With that, I'll turn the call over to Tim. Kevin, thank you. Good morning, everybody. Some brief comments, and then we'll open the call to questions. As reflected in last night's earnings release, and as Kevin just summarized, second quarter performance came in ahead of expectations as a result of 6% global beverage volume growth, contributing to income for combined global beverage operations expanding 21% compared to the prior year. Strong beverage results, combined with lower capital expenditures and tightly managed working capital in our non-beverage businesses, resulted in positive free cash flow in the second quarter, some $350 million better than last year. Net leverage at the end of the second quarter was 3.2 times, lower than both the first quarter and prior year-end. Americas Beverage reported a 15% increase in segment income on the back of 10% volume growth in the quarter, with 9% growth in North America and 12% in Brazil. Our full-year volume growth estimates are now at 5%-6% for North America and mid to high single digits for Brazil. Unit volume demand was again strong across our European operations, with shipments growing by 7% in the quarter. With more fillers increasingly viewing aluminum cans as their preferred package of choice to address necessary sustainability goals, the conversion to aluminum cans continues to accelerate. Market sentiment has certainly shifted from Q4 of last year, and our outlook for the future remains positive. Income in the segment advanced 27% in the quarter, and we should comfortably exceed the 2021 income level this year. Income performance in Asia Pacific improved by almost 45%, pushing the segment's margin to 19% of net sales in the quarter, the result of a significant improvement to our cost base and actions taken to improve revenue quality beginning in Q4 of last year. Shipments were down 5% in the quarter, and while we expect full-year shipments to be down a similar amount, the result of our improved cost base is expected to continue to generate further income improvement in the third quarter. As expected, Transit packaging income was down to the prior year, primarily a result of lower volumes in the strap and protective businesses. Freight markets remain soft, with lower load volumes and purchasing managers' indices, that is the PMI, in both the U.S. and across Europe, remain in contraction. We therefore remain cautious in our outlook for a broad industrial recovery. Until then, we will continue to keep costs down and manage the business very tightly. Income in Q2 was better than Q1, and we currently expect Q3 to be better than Q2. Kevin discussed the approximate $300 million in net of tax proceeds from the Eviosys sale. As we become more comfortable with the receipt of those proceeds this year, it is likely that we would use the bulk of those proceeds to buy back shares. In summary, global beverage operations had a very good first half, and we see that momentum carrying over into the third quarter. Transit packaging is expected to improve in Q3 versus Q2, and it feels as if both food and aerosol can volumes may have found a bottom. Margins are healthy, and we currently expect that 2024 EBITDA will exceed the record EBITDA recorded last year. The company is generating significant free cash flow per share. The balance sheet is strong and getting stronger, and we look forward to the receipt of the Eviosys sale proceeds before year-end. With that, Elle, I think we are now ready to open the call to questions. Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star one. Please unmute your phone and record your name and company name clearly when prompted. Your name and company name are required to introduce your question. To cancel your request, please press star and then the number two. Our first question comes from the line of Chris Parkinson of Wolfe Research. Your line is now open. Great. Thank you so much. You've put up some pretty good results in North America in particular. Can you just talk about the overall demand dynamics of the marketplace, what you're seeing by substrate, as well as, you know, any Crown-specific factors, including market share gains, that should just give us some insights for the second half, as well as into 2025. Thank you. You're welcome. So I, you know, I think, you know, what I, what I would say is not just North America or not just the Americas. I think we had, globally in beverage across all three of the beverage businesses, we had an outstanding result in the quarter, furthering the results that we had in Q1. Specific to your question as it relates to North America, I think we have a very balanced mix of customers. That is, the end markets that our customers are serving, very balanced. As, as you're aware, we're not overly weighted. In fact, we're probably under indexed to mass beer, certainly in the United States. We have a large beer business in Canada, but in the United States, we're underweight to mass beer. As you know, the mass beer is under a little pressure, and perhaps some of the beer volume is being cannibalized by ready-to-drink cocktails and seltzers and the like over the last couple of years. But you know, just a really well-balanced portfolio, and the customers that we're serving are doing quite well, and we see that carrying through to the end of the year. Just as a quick follow-up, in terms of just the operating environment, you've made some significant efforts, I would say, honestly, over probably the last year plus, that have been flying a little bit under the radar screen. And I think most recently, it's been in Asia in terms of the op leverage that you're seeing, you know, across your asset base. I mean, where do we stand with those initiatives, you know, on a global basis, let's say, I don't want to limit the question to Asia, but where do we stand with those initiatives, you know, right here, right now, as far as the buy-side community thinks about numbers, not only for 2024, but in terms of just a comfortable run rate, for 2025 in terms of your asset optimization? Thank you. So I, you know, I think, as we've stated, we, we believe that, in the North America, on an annual basis, we're probably 95% utilized. I caution you a little bit. We're in the summer months here. We're well over 100% right now, and it's incumbent we draw on some of the inventories we build in some of the shoulder months as opposed to the summer here. But the Batesville closure is complete. I think unfortunate that we closed the factory, but reasons behind that, and so we're starting to reap the benefits of that. And then combined with... We did hire a new vice president of manufacturing for our beverage operations here in North America. Actually, it's a fellow that used to work for us in a similar position years ago, and he came back to us. We're really happy to have him, and he's making some significant improvements to processes that we have in place. We've around the edges trimmed some less efficient capacity that we've had in Europe, both in the UK and Greece, and we did the same, as you'll recall, in Asia in the fourth quarter, and those efforts are largely complete, and we are reaping the benefits of a much improved cost base in both locations, and again, it'll continue through the end of the year. Thank you so much. Thank you, Chris. Thank you. Our next question comes from the line of Philip Ng of Jefferies. Your line is now open. Hey, Tim, on North America, I mean, 9% volume growth is pretty impressive. You know, I know coming in the year, you're expecting mid-single-digit growth from share gains. What's driving some of this movement here? And as we kind of look out to 2025, 2026 beyond, are we done with the share movement? You expect to grow kind of more in line with the market. How should we kind of unpack what you're seeing out there? Because promotions still seem pretty choppy out there. Yeah, so just taking the 9%, you know, I think we did, we certainly did a little better in Q2 than we had hoped. I think we previously had told you, Phil, we expected 4%-5% for the year. We've now upped that to 5%-6%, just on the back of the first half. I think, you know, if we look at the first half, we must be up. I have it in front of me here. We must be up close to 8%. And I'm not suggesting that we're gonna slip in the second half. I just think we've got 6 months to go, and it's always better to be a little cautious, but even 5%-6% for the full year in a market that feels like it's, you know, up somewhere between 1%-2%. You know, we don't have all the data, so feels like we're doing quite well in that market. We're continuing to grow our business, and as you can tell by our margins, Phil, we're growing the business in a responsible way. I would suggest that, as I said earlier, we've got a nice balance of end markets that we're serving. You know, we might have picked up a little bit of share, but the majority of the growth is coming from our customers doing better than the broad customer set that exists in North America. And you know, one of the large CSD companies is out today, I think, and there's some instructive commentary in there about their own volumes in North America. And I think one of the other large CSD guys was out over the last week or so, and they talked about perhaps a struggling consumer. So we, you know, we're the beneficiaries of a supply base that has a variety of products. We're not too heavily weighted to any one end market. I think as we think about 2025 and forward, I think it's probably much more appropriate, Phil, to think as we sit here today, it's only July, but more appropriate to think about our growth in 2025 and 2026 as more in line with the market. Okay. Then from a capital deployment standpoint and balance sheet, obviously, you're getting $200 million here from the food cans sale. That's great, and you're gonna use it for buybacks. You mentioned CapEx. Capitalization is closer to the mid-90s. You lowered your leverage targets to 2.5 times. So kind of help us unpack that, Tim, when we look out to 2025 and beyond, you know, is CapEx gonna be pretty muted down a notch for a little bit, just because growth has kind of stepped up? Balance sheet seems to be in a really good spot as you exit the year. How do you kind of balance buybacks versus paying down debt? Kind of help us think through some of those moving pieces. Yeah, sure. I, you know, we have a new leverage target of 2.5x. What I can tell you is that if we buy no stock back between now and the end of 2025, we would be at the 2.5 or slightly below the 2.5 by the end of 2025. But as I said in the prepared remarks, more likely that we take the bulk of the proceeds from Eviosys and, and buy back shares. I don't think we need to race to get to 2.5. It is a target, and we can get there over time, while at the same time accomplishing, the buyback of shares and, and having that accrete to the, remaining shareholders. CapEx, you know, unless something changes dramatically, I think we have an industrial infrastructure in every region right now that should be able to handle the growth that we foresee over the next one to two years. I don't see any reason why, unless there's something really different that happens, that we would need to spend any more than the $500 million this year or next year that Kevin discussed earlier. Got it. So outside of the cash proceeds from the sale, are you back to being open to buybacks next year? Because to your point, if you do no buybacks, you get to 2.5 times. So will you be using a portion of your cash next year for buybacks as well? Yeah, I, I would. You know, I, I think what you should, you know, I would say that the journey to 2.5 times doesn't have to happen by the end of next year, although it could. I think that can be a journey that happens over 2 to 3 years, and therefore, there's a mix of debt paydown and share buyback along the way. Okay, super. Thank you. Congratulations on very strong results. Thanks, Phil. Thank you. Our next question comes from the line of George Staphos of Bank of America. Your line is now open. Hi, everyone. Good morning. Thanks for the details. Good morning. Thanks for taking my question, Tim, and congrats on the quarter. I wanna come back to the top-line performance in the Americas. Is there anything else that you can point to in terms of why volumes look like they were better than you were expecting? Was there any variance in terms of mix of business? Did you have more end sales? Was there more tolling? And the reason we're asking the question, the second question is, how do we take the 9%-10% growth overall, for the segment, the 10%, and bridge to the, whatever it was, 2.5%, overall revenue growth for the quarter, year-over-year? I had a couple of quick follow-ons after that. Oh, yeah. So the, you know, the revenue growth, George, is going to be impacted by the pass-through of lower aluminum, right? So, That's only a couple% from the math, so just- Yeah, we always have that. But was there any- Oh. Was there more net sales, or was it more idling? We talked about this earlier in the year. I'm sorry, it's, we've already talked about it. So just to remind everybody, at the beginning of the year, we described to you the situation where the glass business that we have in Mexico had an outsized year last year. I don't wanna say double what it traditionally has, but as a number of the fillers in Mexico sought to improve their glass float or replenish their returnable glass float, we had an outsized performance last year, and then this year, the business has returned to what it was previously. That is a really solid business with EBITDA margins in the 20s, and but certainly not as good as last year. The offset to some of the beverage can growth is the glass business in Mexico returning to what it was previously. Okay, Tim, thanks for that. I appreciate that, and forgotten that. Can you talk about how Signode... Obviously, it looks like it's been performing at least in line with your expectations, but I'd love you to confirm that, given the commentary into third quarter, how Signode, glass, again, we talked about it being down, but you know, off of a tough comp, and the other businesses performed overall versus your expectations and versus the market, and how they continue to fit into your strategy? So, glass, we just talked about. And the only thing I'd say further on glass is, listen, it's really a good business. You know, we're only in glass in Mexico. It's really a solid business, and it's a relationship with one of our larger global customers and a number of other customers, so we're happy with the business. The transit business, perhaps $3 million-$4 million lower in the quarter than we had expected, and really, that's just lower volume than we had forecast. So I think third quarter will be down again, and then the fourth quarter, on a comparative basis, becomes easier because Q4 last year was a little weaker. We had, I think Q2 and Q3 last year, as well as the full year, were record years for Signode or transit. But the business is holding up okay. I mean, it's a business where we don't spend a lot of money, so we don't pad the soft volumes in the legacy business by buying new businesses. We're expecting this business to hold its head and run through the cycle with very little capital put in and generating a lot of cash. So, it is a highly cash-generative business, on the order of, you know, 85%-90% conversion from EBITDA to unlevered cash. That's after CapEx and tax. The other businesses, I would say that both aerosol and can-making equipment performing in line with expectations, a little disappointed in food can volumes here in North America. Much, I wouldn't say much softer, but certainly softer than we had hoped for, across a number of the end markets. So, we'll see what the third quarter brings us. That's always the big, big quarter for the food business, but food being a little softer than we expected. So, the other business, you know, think about maybe we're down $7-$8 million from what we had hoped for, George. Okay. Tim, I appreciate it. I'll turn it over. Thanks very much. Thank you. Thank you. Our next question comes from the line of Anthony Pettinari of Citi. Your line is now open. Morning, this is actually Bryan Burgmeier sitting in for Anthony. Thank you for taking the question. You know, maybe just from a high level, I think at the start of the year, the implied EBITDA from your EPS guidance was maybe $1.87 billion or so. You know, just with all the puts and takes today, you know, is there a new implied EBITDA number? I think the midpoint of EPS maybe points like $20 million in upside, but I know there were a bunch of below-the-line changes. So any finer point on that would be great. It's a great way to ask the question. You're commended for your cleverness, because if I comment, then it's no longer implied, is it? But I think, I don't mean to be a smart alec. Your initial comment about the implied $1.87 is pretty accurate, $1.875, and, you know, if you wanna, you wanna add $20 million, yeah, you're, you, you can't be that far off. You know, if you wanna, if you wanna circle a number, think about $1.9 and plus or minus five. You know, plus or minus five to ten off of $1.9, you're, you're starting to get real fine on a number as big as $1.9. But, I mean, that would be the... If you're looking to circle a number, I'd go there. Got it, got it. No, I, I appreciate that detail. Thank you. And then, you know, maybe just on, on Asia Pac, I know, you know, volumes were down, because of Crown's kind of, actions on supply. But is there any detail that you can provide maybe on the underlying demand environment in, you know, Vietnam or Cambodia or maybe the region at large? Just trying to think about, you know, how the consumer might be doing. Thanks, thanks, good luck in the quarter, and I'll turn it over. Thank you. So, Asia, we took, as you rightly point out, some significant action on the cost base. I would suggest to you that not only did we take five lines out, which is about 14% of the capacity, we probably reduced headcounts on the order of 20%. And then, in addition to that, we did, as I said in the prepared remarks, we took some actions to improve revenue quality. Said a different way, we pruned some customers from the portfolio, that did not provide adequate returns for the efforts that we're making to support the market. I would, as I sit here today, you know, China maybe is up 1% or 2%. Southeast Asia, perhaps, up in the, you know, just feels like it. It's hard to say because you got seven or eight countries that we're operating in, but Southeast Asia, perhaps, perhaps up on the order of mid to high single digits. So the market's continuing to grow. Thank you. Our next question comes from the line of Ghansham Panjabi of Baird. Your line is now open. Good morning, guys. Morning, Ghansham. Yeah, going back to the second quarter, you know, obviously, the outperformance seems to have been driven, at least a large part, in North America. Tim, just give us a little bit more detail on that. Is it just a function of, you know, promotional activity having picked up at the customer level, along with the mix that you cited from a customer standpoint? And then if, if the market itself was a little bit better, you know, I'm just trying to reconcile that aspect versus your guidance, which really is just raised based on the 2Q beat. Yeah, I mean, listen, you know, the Americas beverage business that we report is Canada, U.S., which is North America. You've got Mexico, Brazil, and Colombia. I would say we did well in every market. And then specifically to North America, as everybody's laser focused on that market, up 9%. You know, other than, other than, as I said earlier, a balanced customer portfolio that really benefited us, not only in Q2, but also in Q1, and we see that benefit carrying through the end of the year. I. Not much more to say, Ghansham, without- I don't want to get into specific customer accounts, but, I think we're just, we're fortunate as we sit here today that we have a very balanced customer mix. And then the second part of your question, I'm sorry, just remind me again. On the guidance for the back half of the year, the updated 2021 guidance has been beat. Yeah, you know, I, we sat here, Kevin and I sat here earlier in the week, and we, or late last week, and we said to ourselves, "We're gonna get this question." I just, you know, it's, you got six months to go, and, you know, no sense to get ahead of ourselves. We've got the opportunity to talk to you again in Q3. The implication of the question and, and certainly some of the comments that were made in the overnight reports are, are that perhaps it could be a little better, than what we've guided you, and you all may, may well be right. Let's hope you're right, and there's some reason for us to feel really good about the balance of the year, and but, you know, we'll have a chance to talk to you again in October, and we'll update it again then. Okay. And just to clarify, you know, the initial question, so is promotional activity in North America better than you thought, or is it sort of comparable to what you- Yeah, I'd say it's a little bit better, Ghansham. There, there, there does appear to be more 2, you know, buy two get ones, although it's, it feels like we're gonna get some here in August, ahead of Labor Day, by one of the big CSD guys, and, that's, that's a welcome, that's a welcome promotion that we're looking forward to. But, but through six months, you know, a little bit better than we had hoped for. But if you look at, if you look at overall market volumes, I'm, you know, the market was up 1%-2% in the quarter, our best estimate, because we don't have the numbers in at least canned volumes. And, and, you know, for the six months, maybe we're up 0.5%-1.5%. So, promotional activity, a little better, but certainly subdued from what we're used to historically, but the promotional activity's helping to offset some of the the inflationary impacts and some of the other struggles that the consumer is facing. But it feels like we're gonna get a little, a bump here in Q3 that we just, you know, we're now trying to understand, and we'll see how that manifests itself. Okay, understood. And then for my second question, as it relates to Europe, yeah, what's going on there? Because, you know, the core consumer could not have changed that quickly versus the last two quarters. Do you see, you know, the upset in Q2 sort of as, you know, mean reversion after a sluggish 1Q and then the previous destocking, et cetera, or what's happening? Yeah, I think the destocking caught us and some others off guard in Q4, and it was pretty sharp. So we saw a little bit of that come back in Q1, and then Q2, especially early in the quarter, the fillers really came out of the gate hard in Q2, ahead of the summer tourism season, the Euro Cup. And it just feels like there's a momentum here, for whether it's restocking or a preference for the fillers to use more and more aluminum, to try to achieve a variety of sustainability goals that they have and that they're being, I don't wanna say forced, 'cause I think everybody believes it's the right thing to do. But, but trying to achieve some goals here that, that certainly need to be achieved, and, and aluminum does that quite well. Thanks so much. Thanks, Ghansham. Thank you. Our next question comes from the line of Arun Viswanathan of RBC Capital Markets. Your line is now open. Great, thanks for taking my question. Hope you guys are well. Congrats on the good results. I guess when you look at the portfolio now, I just wanted to get your further thoughts on that comment about maybe 2025 and 2026 North American Bevcan growth being closer to the market. I know that the last year or two, you've had some share gains, but wouldn't this, the portfolio mix continue to maybe lead you to slightly above the market? Thanks. You know, it may. You know, as we sit here today, it's the third week in July, and we'll see what the consumer wants to do. We'll see how healthy the consumer is. We're gonna get to an election here in several months, and generally, regardless of which party wins the election, at least we all then know who's in charge and what policy is going to be, and that'll drive how companies spend money and how companies promote, and what companies' outlooks are. So we're certainly gonna learn a lot more after the election, and we're all gonna feel better one way or the other after the election. Regardless if we like which party's in control, we're gonna feel better because at least we have some certainty as to policy. But you might be right. I mean, you know, I think that we're gonna continue to see sparkling water do well. We're gonna continue to see ready-to-drink cocktails, that is the vodka-based instead of the malt-based, continue to do well. And we'll see if the carbonated guys can reinvigorate soda, be it diet and/or full calorie. You know, it's just a little early to jump on that right now. I think we're focused on driving as much gain as we can in the third quarter and through the balance of the year, and then we'll see where next year brings us and build off of that new platform that we have. And then maybe if I could just ask a follow-up. So, you know, Americas Beverage and Europe Beverage, definitely, and the APAC Beverage above your expectations. If you were to, like, look at those three segments, how much of that, you know, improved performance would you attribute to volume versus execution? Is it maybe, like, a third volume and two-thirds execution? And so is that kind of the sustainability of the results should remain in that kind of area, or how do you think about the performance in those two buckets? Oh, I think in the Americas, you'd think about three-quarters of that performance is volume. You get volume numbers that big, it solves a lot of problems, three-quarters or even a little bit more. Europe, a significant proportion, maybe 50/50% of the growth is volume. You've got maybe 30%-35%, as we've said before, being the result of some improvements to our contractual structures to recover margin that we had given away in past years, and then the balance being operational improvements. And then in Asia, it's cost base and the pruning of some customers, where we just frankly didn't get the return we needed. But largely, in a declining environment for us, all cost base or improvements to the revenue structure. Now, I would argue that we're not going to have lower volumes every year. We're gonna-- In Asia, we're gonna participate in this volume growth going forward, and, off a much lower cost base, it should be very beneficial to us going forward. Then just lastly, if I could, on just initial thoughts on 2025 free cash flow, there's obviously, you know, CapEx you noted could remain in that $500 million range. So, do you see an inflection point as well on free cash flow? Thanks. Well, I think, you know, Kevin suggested at least $750 million this year, and we're doing as much as we can to rightsize inventories and working capital employed in the business, and drive debt balances and/or off-balance sheet financing down as hard as we can, given the higher interest rates. But you know, $750 million this year. Could it be better than that this year? Perhaps. Could or should it be better than that next year? Yeah, perhaps. I think there's an opportunity to do better than that next year. I don't—I'm not sure when you suggest inflection, what number you're hoping for, but off the base of the business we have and what we see, we're—I think we're fairly confident in the generation of cash flow, and certainly well above $6 a share in both this year and next year. Got it. Thanks a lot, Tim. Thank you. Thank you. Our next question comes from the line of Mike Leithead of Barclays. Your line is now open. Great. Thanks. Good morning, guys. Just one from me. On some of the businesses that provided headwinds this year, such as North America Food Can, Can Making Equipment, can you just talk about your confidence today that we've reached bottom there, and, and presumably they're stable to getting better as, as we move into next year? Well, I think, you know, I think can making equipment, it's at a bottom, right? We're basically at a business right now that's doing tooling and service. We're not shipping, or we're shipping very few machines. So as the global beverage can market waits to take its next step up for volume, whether that's natural volume over time or whether there's a significant substrate shift, we'll participate in it at that point. But I don't see can making getting any lower. It should only go up. Food cans, a little disappointing compared to our forecast, but food cans are doing okay. I think the business where we went down this year was aerosol cans, and some of that was volume related, some of that was competition related, where with lower volumes we've had some folks get a little little aggressive on price. So I think we've seen a bottom in aerosol can volumes. It's been fairly stable this year, so I don't see... If your question is should you expect us to tell you it's gonna be another leg down next year, I don't think you should expect that. Great. Thank you. Thank you. Our next question comes from the line of Adam Samuelson of Goldman Sachs. Your line is now open. Yes, thank you. Good morning, everyone. Good morning. Maybe first question, just on transit. I think in the period of March, you lose to maybe that coming in $a few million in light of kind of what you've been expecting or hoping for. Can you maybe just recalibrate what the expectations are for that business in the second half? Does still seem like the industrial economy still is sluggish. I think the prior view had been income growth, and that income growth are flat to slightly up for the full year and tracking decently below prior year income levels. Help us think about how we should think about the top and bottom line for transit in the second half. Thank you. Yeah, I think, third quarter will be down compared to the third quarter last year, which was a pretty high quarter. I think it was a record quarter. And then the fourth quarter, the comparison gets much easier. The business started to feel the impact of lower volumes in Q4, specifically last year. So I think, you know, there's an opportunity for Q4 to be a little higher than Q4 last year and Q3 to be lower than Q3 last year. Maybe we're flatter in the back half of the year than we were in the first half of the year. But you rightly point out, industrial markets are a little soft, and so we're managing through it, keeping costs down and trying to drive as much value out of the business as we can. Okay, that's helpful. Then if I could maybe circle over to the European beverage business, and maybe just a little bit more kind of color around some of the different geographies that you're in. It was pretty, pretty strong through the first half, and maybe some catch up from destocking. But any notable geographies in your, in your portfolio that were well above or below that 7% volume that you reported in the quarter? Yeah, so you know, we've described to you previously that we're much stronger in Southern Europe than we are in Northern Europe. So if you think about the Mediterranean and the Gulf states, we're much stronger, much larger there than we are in Northern Europe, Central Europe. I don't know how the markets did, specifically in the various Northern European countries versus the Southern European countries, but most of our growth in the quarter versus last year would've been relative to our strength in Southern Europe and the Gulf states. Okay. All right. That's, that's helpful. I'll pass it on. Thank you. Thank you. Our next question comes from the line of Jeffrey Zekauskas of JPMorgan. Your line is now open. Thanks very much. Good morning. I think average temperatures in June were maybe 3.5 degrees above average in the U.S., and in July, temperatures have also been elevated. Do you think that that affects your demand? Do you track those kinds of factors? You know, Jeff, that's a great question, and I'm chuckling here because historically, you would think that. And I can remember years ago. We had the same situation happen one year. We had a May or a June where we had, like, 20, 20 days, at least in the Philadelphia region, where we had temperatures above 90 degrees Fahrenheit, and all the sales guys could tell us was, "It's too hot. Nobody's going outside for picnics, so that's why volumes are down." So I think, you know, I don't, you know, it's hard to say. You give a sales guy enough information, he'll use any of that information as an excuse as to why he doesn't sell something. Now, having said that, we did sell a little more, but I think as we look at our volume performance versus what we believe the overall market's volume performance was, and what the commentary coming out of the two large CSD companies over the last week, I think we see a market that's pretty healthy, given a consumer that's under stress and given, you know, pretty large inflation in the product. And then, you know, our strength above what you would describe as a healthy market, certainly compared to some recent history, we can only attribute to a balanced customer mix, balanced end market mix. But, you know, it could be. You know, I don't think it's a-- I think the temperature commentary you just gave us is a worrying sign. So, let's hope it's just an aberration this summer, and we get back to some more moderate temperatures that we've seen in the past. But, I'm not sure I could say that temperatures in June and July are driving the volume. I- Mm-hmm. Okay. Second question is, earlier in the call, you said your utilization rates for 2024 on average, on average, might be 95%, and you're above 100 now, and the trend of your CapEx is downward. Is it that there's a continual debottlenecking of a few percent a year in capacity that allows you to keep your CapEx down, or might you run into issues because your utilization rates are too high, and there's a little bit more demand than you expect? No, again, great question. I think the debottlenecking or the implied efficiency, hopefully, we get better every year. We don't always get better, but hopefully we get better every year. A few% is probably high, but, you know, 1%-1.5%, I think is probably more appropriate. We run fairly efficiently now, highly efficiently, high asset utilization, fairly low spoilage, but there's always room for improvement. You know, Kevin described capital as being no more than $500 million. So within an envelope of $500 million, if we need to add some capacity, it doesn't have to be a brand-new factory with two sparkling new lines. We can, we can add some equipment to existing lines or existing factories to speed up and push more good cans out of the back end. We're not starved for capital at $500 million. I think we're just, it's a reflection of how much capital we've invested in the business over the last several years, and it's time to get returns on that capital, and specifically, cash on cash returns on that capital as we sit here today. Great. Thank you so much. Thank you. Our next question comes from the line of Stefan Diaz of Morgan Stanley. Your line is now open. Hello, good morning, everyone. Thanks for taking my question. Good morning. So Asia beverage profitability came in better than we were expecting. I think last call, you called out maybe a $4 million-$5 million per quarter tailwind from your restructuring efforts. So I guess those came in better than you were expecting. How should we think about these tailwinds for the remaining two quarters? Well, I think the, I think the restructuring tailwind is probably correct on the order of $4 million-$5 million. Mm-hmm. I think one thing that did happen here in Q2, volumes, although they were down 5% in the quarter, better than we had hoped for. I think, Vietnam, we're starting to see some acceleration in Vietnam. There's been a fair amount among the analysts written about one of the large customers in Vietnam closing a brewery. Now, just to make sure we all understand what they did, they closed the smallest of their six breweries, and they've expanded one of their larger breweries, and they're doing that similar to what we're doing, trying to improve efficiency and cost. So they didn't take any capacity out of the system. In fact, they've added capacity to the number of liters of beer they can brew. So, volume just a little better in Vietnam, and it was actually quite strong in Cambodia in the last six weeks of the quarter. So, I think we see that continuing through Q3. And then when we get to Q4, Q4 last year was actually quite strong. But, you know, as we look at the Asian platform, I think the last three quarters were averaging something like $48 million of segment income. So, you know, you take four quarters of that, and you're getting yourself pretty close to $200 million of segment income for the year, which is a nice place to start when we think about going into the future with the prospect of being able to achieve that with volumes down. So as volumes return to our system, and we participate in volume growth in that market, which we see for the next several years, pretty good place to start from with a much-reduced cost base. Great, thank you. Then, you also raised your expectation for non-controlling interest. Any additional details there? Is that just maybe Brazil performing a little better than your original expectations? Correct. Great, thank you. I'll turn it over. Thank you. Thank you. Our next question comes from the line of Gabe Hajde from Wells Fargo Securities. Your line is now open. Tim, Kevin, good morning. Morning, Gabe. Tim, I have to go back to North America. So based on the data that we see, I think sparkling water, which you guys have a pretty big presence in, sell-through, has been pretty good. Carbonated soft drink, as you pointed out, you had two of the three big guys that have reported, in fact, volumes down across their system, and one of which is still pushing some pretty meaningful price. So I guess is part of your conservatism, sell-in versus sell-through for this summer season, and maybe you got to throttle back fourth quarter volumes? I don't know why some of your customers would be building inventory, just given the environment that we've been in. But I'm just curious if there's any disconnect from your vantage point. Then kind of relatedly, can you quantify for us, maybe in the fourth quarter, some of the positive impact from, mix benefits of product sales down in Brazil? Because I think, I mean, that, I want to say segment profit was up $70 million in the fourth quarter, part of which I'm sure was utilization, and like I said, maybe some positive mix effects in Brazil. Just real quick on Brazil. Brazil is principally a beer market for us, right? So positive mix, it's just, it's their high season, Q4 and Q1, as they go into their summer season. So, not a lot to say other than we expect beer to continue to grow. And as we've always told you in the past, we don't get too excited about a soft quarter here or there. We've had soft quarters or even a soft year, one or two years ago, but we always remain fairly bullish on the Brazilian market. As we look at any three to five-year period, we're fairly confident the market's gonna continue to grow. I think returning to North America, typically, the customers don't build inventory. We ship to them just in time. Now, they will build inventory ahead of Labor Day, July Fourth, Memorial Day. So we're gonna see some, we're gonna see, we hope, it feels like we're gonna see some promotional activity here in August ahead of Labor Day, and, and they'll build a little, and, and then we'll see where the fourth quarter takes us. But, you know, we can, Gabe, we can talk about the implied conservatism. I think it's, we're six months through the year. We're, we're having a good year. And, as I said earlier, we're gonna get a chance to talk to you again in October, and, and we'll revisit the guidance at that point. Understood. Sticking with Brazil, it's been a little choppy. I think your volumes were down 1% in calendar Q1, and you're talking about being up 12%, is what you said. One of your competitors was up pretty big in the first quarter. Is there anything that we should be drawing from that? Or is it just simply customer mix down in Brazil? No, no. The only thing I'd remind you is that, the first quarter of 2023, I think we were up 20-some%, so we had a different comparison, Q1 of this year versus Q1 of last year, perhaps than compared to what some others did. You know, there might have been a little volume that's moved around, but, but I think, you know, as we said in the prepared remarks, we expect our Brazilian volumes for this year to be up mid- to high-single digits. So we're looking for a fairly healthy performance for the last six months in Brazil. Okay. And sorry, I'm gonna revisit it. I was kind of specifically talking about ends in the fourth quarter of 2023. It's just when I look at that profit number relative to any period in the past, so. I don't remember the profit number in Q4 last year. I mean, Gabe, typically, we're selling, you know, for every can we sell, we sell an end. I mean, there's no difference from our perspective. Okay. Thank you. Thank you. Our next question comes from the line of Michael Roxland of Truist Securities. Your line is now open. Yeah. Thanks, Tim, Kevin, and Tom, for taking my questions, and congrats on a good quarter. Thank you. Just wanted to touch upon the efficiency question that was asked earlier. Obviously, you've added some greenfield plants in North America over the last few years and elsewhere. You know, for your legacy plants, can you just provide any color around potential benchmarking you're doing against these newer, more efficient plants, and maybe any steps you're taking to improve cost, efficiency, productivity, and any specific savings that you're targeting and over what time frame? Just trying to get a sense of how you're benchmarking your newer plants versus your older plants. Are you trying to deploy similar practices that you've learned at, or that you have at your new plants with some of your older plants, maybe targeting a type of savings from that? Thanks very much. So, you know, the first thing I'd tell you is that the lowest cost plants we have are the legacy plants. These are plants that are largely depreciated, that's number one. But more importantly, they have workforces that have been making cans for a long time. These guys are really skilled. It takes a lot of skill to make a beverage can at the speeds that we and the others in the industry do. So our highest cost plants are the new plants, and it's incumbent upon us to recruit new skills, to transfer skills from the legacy plants into the new plants, have the new plants understand the process, have them incorporate all the policies and processes that we've incorporated over decades, not only at Crown, but all the companies across the industry. So, no, it's a cycle of continuous improvement, and eventually, the new larger plants will be lower cost than the legacy plants. But, the legacy plants are really low cost. I mean, if you wanna think about the cost to convert aluminum into a finished can, you roll up everything beyond direct materials. It's pretty hard to beat some of our legacy plants. You know, we're very fortunate at Crown, and I'm sure our competitors would echo the same sentiments about their people, but we're really fortunate at Crown. Not only do we have excellent people in the supervisory manufacturing skills throughout the corporate offices, but the fellows on the line in the factory, you know, they've been fellows and ladies, excuse me, they've been in the factory there for... Some of these guys have been there for 40 years. Really, we're just fortunate that we have people that are dedicated, and they have the skills that they have to generate the volume of cans that they can generate on a daily and a monthly basis. Got it. Thank you. Thank you. Thank you. We'll take our last question from Edlain Rodriguez of Mizuho. Your line is now open. Thank you, and good morning, everyone. Tim, just a quick follow-up on, on transit. As we look into 2025, like, what drives better results? I mean, do we still have costs you can still take out, or does volume need to pick up, you know, quite a bit for, to see any improvement? And is that a business that will benefit from lower interest rates? Like, so how should we look at it, you know, going into, you know, 2025? I think what you just summarized, the answer is all of the above. Certainly, lower interest rates will spur more economic activity. But I think as you think about some of the products that we make, what end markets they support, you know, you've got general construction, you've got housing, you've got steel mills and metal fabricators, you've got the car industry. And so I think, you know, there's always a little bit of cost to take out. I'd be a little hesitant to promise you anything. We did a significant above the factory floor headcount reduction in 2022 into 2023, and I think we have a cost base that's well set up to benefit as volumes return. I'd be a little hesitant to take more out, 'cause I don't wanna fail customers as volume returns. Certainly, as you point out, and as I just said, lower interest rates will spur more economic activity. I think that volume is the big driver. So you know, it's. Could volume continue to go down? Well, yeah, we could continue to have more of an industrial slowdown. My sense is, post the election, as I said earlier, we're gonna get, we and others, more importantly, others, are gonna get more certainty as to policy going forward, and they're gonna get back to the business of running business and growing their business, and we stand to benefit from that. Okay, thank you. That's all I have. Great. Edlain, thanks very much. So, Al, I think that was the last question, so that'll conclude today's call. Thank you very much, and we thank you all for your interest in the company, and we'll speak to you again in October. Bye now. Thank you. Again, that concludes today's conference. Thank you, everyone, for joining. You may now disconnect and have a great day.