Good morning and Welcome to Crown Holdings, Q4 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. Thank you, sir, and 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 crownholdings.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 our Form 10-K for 2023 and subsequent filings. Earnings for the quarter were $3.02 per share, including a $2.32 per share gain from the sale of Eviosys, compared to a $0.27 per share in the prior year quarter. Adjusted earnings per share were $1.59, compared to $1.24 in the prior year quarter. Net sales for the quarter were up 2% compared to the prior year quarter, reflecting a 4% increase in global beverage can volumes and increased food can volumes offset by lower volumes in Transit Packaging. Segment income was $428 million in the quarter, compared to $382 million in the prior year, reflecting higher beverage can volumes in Americas and European Beverage, increased volumes in North American Food, partially offset by macroeconomic headwinds impacting the transit business. During the Q4, the company received $338 million from the sale of Eviosys and recorded a gain of $275 million. For the year, the company delivered record adjusted EBITDA of $1.942 billion, compared to the record $1.882 billion from 2023. The improvement was driven by 5% global beverage can growth and strong operational performance in all of our beverage businesses. The company delivered $814 million of free cash flow after contributing $100 million to annuitize the U.S. and Canadian pension plans and making an estimated tax payment of $50 million related to the Eviosys sale. The company returned $336 million to shareholders in 2024, $119 million in dividends, and $217 million in share repurchases. With our record EBITDA, combined with the net debt reduction of $878 million, we reduced net leverage to 2.7x at year-end. Q1 2025 adjusted earnings per diluted shares are projected to be in the range of $1.20-$1.30 a share, with full-year range projected to be $6.60-$7.00 per share. The adjusted earnings guidance for the full year includes net interest expense of approximately $355 million-$360 million, depending on the timing of share repurchases, exchange rates at current levels with the euro at 103 to the dollar, full-year tax rate of approximately 25%, depreciation of approximately $310 million, non-controlling interest expense to be approximately $150 million, dividend to non-controlling interest are expected to be approximately $130 million. We currently estimate 2025 full-year adjusted free cash flow to be approximately $800 million after $450 million of capital spending. At the end of 2025, we would expect net leverage to be closer to our targeted leverage ratio at 2.5x. With that, I turn the call over to Tim. Thank you, Kevin, and good morning to everyone. As reflected in last night's earnings release and as Kevin just summarized, operating performance in the Q4 was well ahead of last year's Q4, owing to stronger performances across our global beverage can businesses. Q4 beverage segment income improved 17% compared to last year due to a 4% increase in global shipments, high utilization across the network, and continuous improvements in our manufacturing performance. In total, adjusted earnings per share were well ahead of last year, even after accounting for the higher tax rate. Americas Beverage reported an 8% income improvement over a very strong prior year Q4 on the back of a 5% shipment increase in the segment. North American volumes advanced 7% in the quarter, with Brazil up 4%. For the full year, North American volumes were up 7% and Brazil 10%. We significantly outperformed the North American market again in 2024, which we believe for the full year was up about 1%. Looking ahead to 2025, we expect our North American volume performance to be largely in line with the market. In Brazil, we expect mid-single-digit growth in 2025. European Beverage volumes increased 8% in the Q4, with shipments notably strong across the Mediterranean and in the U.K. This led to significantly higher income in the segment compared to a soft prior year. For the full year, volumes improved 7% over 2023, leading to a record income performance for the segment. We continue to see the conversion to the aluminum can as the package of choice for beverages in Europe, and we expect 2025 to be another record year of earnings on the back of strong demand. Income performance in Asia-Pacific remained firm in the Q4, leading to a 27% increase for the full year. Volumes in the Q4 were down 4%, mainly a result of our prior year actions to improve revenue quality. While consumer purchasing power across the region remains subdued, our cost reduction programs have positioned the segment well for future income improvement. Based on current demand forecasts, we expect the segment will be in line to better in 2025 compared to 2024. In line with our expectations, income in Transit Packaging was down as global industrial activity remained sluggish. We remain focused on tightly managing the business and generating cash-on-cash returns. Unlevered free cash flow in this business once again exceeded $250 million. The current outlook for 2025 is for flat to marginally up income performance, with the first six months reflecting current conditions. Volume in North American Food improved significantly compared to a soft prior year Q4, with the demand increase balanced across pet food, vegetables, and soups. We expect income in the non-reportable businesses to be up about 10% in 2025. Operationally, 2024 was a strong year. So to summarize, segment income was up almost $100 million, and we generated significant free cash flow. Asian production capacity has been right-sized. The sale of our remaining 20% interest in Eviosys was completed. We reduced future balance sheet risk by annuitizing almost all of the U.S. and Canadian inactive defined benefit pension obligations. More than $300 million was returned to shareholders, and after all of that, net leverage was reduced to 2.7 x. Looking forward, the company has a world-class manufacturing team capable to serve the needs of a diverse set of global customers from an optimized footprint. We serve a well-balanced portfolio of attractive growing categories. The balance sheet is strong, we generate significant cash flow, and are well-positioned to continue to create and return value to our shareholders. And with that, Elle, we are now ready to take questions. Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star and then the number 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 Phil Ng of Jefferies. Your line is now open. Hey, guys. Congrats on another very strong quarter. I guess first, Tim, Americas has been really strong, especially in the back half of 2024. What's driving some of the outperformance? Is continuous improvement in manufacturing an element of that? And when we look at the 2025, what are some of the puts and takes off of a record year? You gave us some outlook on demand, but how do you kind of see earnings kind of shaking out this year, and what are some of your customers saying at this point? Yeah, so I'll deal with the first part of the question first, Phil. I had a look at this. I know last year, the Q4 was the strongest quarter we had. The Q4 this year came within $5 million of being the strongest quarter, and certainly the back half of both years much stronger than we've traditionally experienced in the past. A lot of that due to continuing growing business in South America, that is Colombia and Brazil. Their season a little different than our season. And again, exceptionally strong demand around the holiday season here in North America. I'm always a bit surprised. I was a little surprised. The outperformance we had here in Q4 compared to the guidance we gave you previously was principally due to how strong North America was here or the Americas was here, and specifically North America in the Q4. We did not anticipate that we would exceed last year's record Q4, and we did that. Looking ahead, as we said, we think demand for the company, having outperformed the industry over the last several years, each of the last several years, we think we're largely in line, as we've stated before, with market performance. So if you will, if the market gives yourself a range of -1% to +2%, depending on how promotions go and how strong or weak the consumer is, or how strong or weak the consumer perceives he is, the market could be anywhere in that range, -1% to +2%, in our view. Others may have a different view, but that would be our view. So you know, we have modeled North American volume to be flat in the numbers that Kevin has provided you. So we're not stepping out on a ledge assuming the consumer is going to be exceptionally strong. Now, we'll talk about tariffs, and I'll ask you to allow somebody else to ask that question since you asked yours already. We'll talk about tariffs and the potential impact that tariffs may have on demand. The other puts and takes, obviously, there will be a little PPI give back to the customers when those contracts cycle. The majority of those are April, some in July, a few in January. And as you can tell by our margins, certainly our margins are very strong and contracts are set very well, but there does come a time when the customers deserve to get some of the money back when costs come down. And while PPI is not a perfect proxy for our cost, and we've talked about this before, labor never comes down. You can reduce labor content, but labor rate never comes down. And certainly, the coatings guys have found a sweet spot in how they can drive value. And we've not seen a lot of give back from the coating suppliers to us over the last several years. So while not a perfect proxy, it is the methodology used within the contracts, and we adhere to contracts. So that'll be just a couple of the puts and takes. I don't know if I've answered your question. I think I did. Yeah, that's great. And then, Tim, just from a cash flow standpoint, cash flow was strong. Your balance sheet is pretty close to your leverage target. So my question is, what are you going to do with all that cash? Is it buyback? Do you see any opportunities on bolt-ons? Just kind of help us think through how you're going to deploy that capital and unlock value for shareholders. I think, Phil, let's start with $800 million, and I'll make it as clear as I can. $800 million, back off $200 million for dividends to the minority partners and dividends to the public shareholders. It leaves you with about $550-$600 million. And as we sit here today, the modeling that Kevin has done, we're assuming 50/50 debt reduction and share repurchase. And that can change depending on where the markets take us here in 2025 and depending on how you all and the buy side determine you want to value us. We continue to believe that we are significantly undervalued given a pristine balance sheet and high cash flow generation and a low share float. But we'll see how we're valued, and we'll make a decision as to whether we adjust that 50/50. Tim, will you front-load that buyback, or is it going to be pretty spread out through the year? Just given where stock price is at. Phil, look, I think the share price is at a good price now, Phil. I would expect through the first half of the year for us to do something close to the 50/50 that Tim was talking about. Okay. Appreciate all the color, guys. Thank you. Thanks, Phil. Thank you. Our next question comes from the line of Christopher Parkinson of Wolfe Research. Your line is now open. Hi, guys. It's Andrew, actually on for Chris. Real quick, want to kind of understand sustainability of momentum in Europe. Obviously, you've had a couple of really strong quarters. How are you thinking about that going into 2025, and sort of what are the puts and takes in the region? I think it has real traction in Europe. There are, I'm going to use the term any number, which is kind of a meaningless term, but there are any number of various packaging directives being floated about by individual countries, by the European Union, et cetera, that either directly or indirectly affect the aluminum beverage can. We believe the aluminum beverage can continues to be the best positioned drinks package to accomplish everything that the, let's just call them the Greens, that the Greens want to accomplish. I think that for the most part, we can always do better, but recycling rates are certainly much higher in Europe, so we feel very good about that. We need to get recycling rates higher in the United States, but we feel very good about the rates in Europe. And we would continue to expect to see conversion from glass and other substrates to the can. But I think if you look at glass performance in Europe versus can performance in Europe, you can see what's happening, and I don't expect that to slow down. Got it. Thanks. And any commentary on Asia on a go-forward basis in terms of volumes, especially? Yeah. So I think we're up significantly this year, but that's really just clawing back what we gave away in the last couple of years, and that was right-sizing the cost-based production capacity into what we believe is a new volume framework until the consumer regains some strength. So the consumer is still a little weak in Asia, in principally all of the Asian countries. We continue to do well in Cambodia. Vietnam is a little softer than we would like. We've modeled a decline in our volumes in China, but an increase in Southeast Asia. We've got some other contractual things we're working through, but we think the business is marginally up. Maybe it's income-wise, it's up 2% to 3%-4% next year compared to this year. So we'll certainly hold on to the gains we've made, and cost base is really in a good place for when volume returns for it to flow through to the bottom line. Great. Thank you so much. I'll turn it over. Thank you. Thank you. Our next question comes from the line of Ghansham Panjabi of R.W. Baird. Your line is now open. Thank you. Good morning, guys. Going back to your comments on North American volumes, I think you said the industry estimated +1% last year, and then you're assuming flat for this year. If we kind of go back to the 1998 through 2018 sort of paradigm where volumes for the industry are flattish for an extended period of time, what does that mean? That flattish is generous, Ghansham, right? I think you could argue they were down over that period, right? Yeah, I rounded up. Yeah. What does that do to your margin profile for that segment in context of being at record margins in 2024? It doesn't have to do anything. It really depends on the behavior of the participants. We've talked previously about the value proposition that we offer to our customers, all of us in the aluminum beverage can world offer to our customers. It is a package that costs a lot of capital to install, to run, incredible amounts of talent and discipline in the factories. We all possess it. We all deliver that quality and service to our customers. We deserve to get paid for it. Now, post the COVID boom, we had a number of independent one-liner guys think that they could just step in and make cans, and I don't want to say they failed miserably, but they didn't do too well, and so three of them are gone now. I think the other participants that we still have remaining in the market, two of them are can companies in other parts of the world. They're going to succeed. The competitive profile is certainly different in the marketplace than it would have been three or four years ago, and we all have to learn how to compete in that environment. But it's incumbent upon us to hold price, to do better in manufacturing so that we can keep more of the manufacturing improvements that we make for our shareholders. We can't just be in business to return all the value from our hard work to somebody else's shareholder group. Nothing solves your problems like volume growth, right? On the other hand, most of us did fairly well for a large period of time. So if you took 1998 - 2018, we all did fairly well in terms of cash generation. Margins did grind down, but we generated cash. We didn't spend a lot of capital, and we returned that value to shareholders. We have to find the sweet spot in all of that as an industry, and no one company can do it themselves, Ghansham. Got it. And then if you switch to transit, just given the elongated downturn, two-year manufacturing recession globally, et cetera, I know you've taken costs out of the system, but what else are you looking at in terms of some of the positive variances to kind of get you through this period before volumes hopefully inflect higher at some point? Yeah. So I mean, there are things we do in that business that you don't see or we don't report. We have consolidated some facilities. We don't necessarily call them out because the cost is relatively inexpensive. That is, if it's $5 million, it's a lot. Sometimes it's below $5 million. So we are doing that. I hesitate to do a whole lot more. We took a lot of cost out, and at some point industrially, we're going to have a bounce back. I don't know when that is, and I've gotten it wrong in the past, so I don't really want to call it again. I do think the first six months of this year are going to be more of the same, and we're hopeful that we get some uptick in the back half of the year. We are starting to see some green shoots in the protective space. What we really need to see is capital equipment orders tick up, and we haven't seen that yet. But I think the cost base is in pretty good shape. The amount of volume we and others have lost in that space, and I guess if you looked at other industrial companies you cover, depending on what industrial applications they're in, they may have similar experience as well. Thank you. Thank you. Thank you. Our next question comes from the line of George Staphos of Bank of America. Sir, your line is now open. Thanks very much. Hi, everyone. Good morning. Tim, you might need to take some honey or something. Good luck fighting whatever you got there. Yeah. I don't know what I did here, George, but I haven't been able to get rid of it, so. You're in Florida for crying out loud. But anyway, good luck as well this weekend. Listen, if you could talk a little bit more about what you're seeing in Europe in terms of the volume outlook, it sounds positive. At the end of the day, we're not going to hold you to anything specific, but do you have the opportunity, given your answer, I think, to Ghansham or somebody else's question in terms of the green trends there to see mid-single digit or better growth? You had teed up the question on tariffs, so I will take that one kindly as well in terms of what you see as the puts and takes there. And then lastly, I think the answer is no, but I'll ask the question anyway. Do you see, given the balance sheet positioning, given where you're at, given the cash flow, to do anything beyond what you have been doing in terms of normal cap allocation for productivity, for growth? Do you have another couple of years left to grow into your capacity across your major regions? Thanks, and good luck in the quarter. Okay. So mid-single digit growth in Europe, yes. Can we grow into the capacity we have installed over the next couple of years without significant capital being spent? For the most part, yes. We've got a line we're going to install in Thailand in the near term. It's a joint venture with a very large global energy company, and they want us to expand the footprint there. But that's within the envelope that Kevin's described. I think the envelope we've described, $450 million, George, if you want to think about $400 million-$500 million, that envelope beyond $250 million-$300 million of maintenance will cover any necessary growth. But I don't really see the need right now to spend a lot of money in any of the major beverage regions. I think we're pretty well set. And I guess your last question was tariffs. Is that correct? That is correct. So I think the biggest impact from tariffs is likely to be the impact that the consumer is going to feel if there is an inflationary impact from tariffs, so indirect to us. I'm going to say almost all of the aluminum. I think it is all, I think, but almost all of the aluminum we buy in the U.S. is domestically sourced. Our aluminum that we buy in other regions in North America does not come from the U.S. So we're not seeing any of that. There will be other direct materials that do come from the U.S. to Canada and Mexico, coatings and the like, and we'll have to work through that. And on a sales point of view, what we make in Mexico stays in Mexico. Almost 99%, 98% stays in Mexico, so we don't expect our Mexican customers to feel the pinch of having to export their product from Mexico into the U.S. I think everything we make in Canada in beverage stays in Canada. Maybe there's some exported Canadian beer back to the U.S., but that's always what it's been, and they generally sell for premiums anyway. There are food cans and aerosol cans that move across the border from the U.S. into Canada, and to my knowledge, there is not a sizable food can or aerosol can manufacturer in Canada, so I would expect that we are going to have to pass those costs on. So I think largely, George, I think it's from where we sit on tariffs, it feels like it's an indirect exposure that we have if the consumer feels the pinch from inflation further and dials back their purchasing habits. Tim, thanks so much. Great rundown. I will turn it over. Thank you very much. Thank you, George. Thank you. Our next question comes from the line of Stefan Diaz of Morgan Stanley. Your line is now open. Hi, everybody. Good morning. Thanks for taking my questions. Maybe just back on the tariff topic, and maybe another way to ask this is we saw significant aluminum and Midwest Premium inflation at the beginning of 2022. How did your customers react during that time period? And let's say that tariffs lead to premium inflation again, do you think there'd be any reason they would react differently this time? The customers in 2022 reacted by pushing the price of a 12-pack of soda from $3 - $9, or they got themselves to $9 along the way. That had some demand implications, but by and large, they recovered or over-recovered their costs. They made a lot of money on their top line, and consumers more or less found their way to continue to buy beverage cans. How high can you push a 12-pack of soda? I don't know. The Midwest Premium. There are customers who buy their own metal, so for them, it's on their account. Then for those customers where we procure the metal, it's passed through. I would expect we're going to see significant Midwest Premium increases, yes. Okay. Great. Yeah, that's helpful. And then maybe we could just spend some time in your other businesses in America, Brazil, Mexico, and Colombia. What are you seeing as far as the consumer there? What's driving the strength in those regions? And maybe you could expand a little bit on your expectations for 2025. Yeah. So listen, you've always heard us say, and I always feel like I'm repeating myself, it's only the can business. We're not making airplane engines for jets, so it's not as complicated as we want to make it. But Brazil's a market, I've said it before, you can have ups and downs and hiccups along the way, but if you look at it over a three to five-year period and you draw a graph, it's always growing. The trend line is up. And so we had a down year in Brazil late 2022, early 2023, and we've bounced back nicely. I think they are the Brazilian economy is sorting its way through inflation and unemployment. They always have their statistics are certainly shockingly high compared to ours, but in their environment, it's always been high, so they're used to that. And again, the Q4, Q1 are the big seasons for them. So we continue to expect Brazil is going to do well over the medium to long term. There could be hiccups along the way, but as we've said, we don't get too excited. It's an investment we've made, and we believe in the market. Colombia, i t's a one-line plant, but it's a large line. It's a high-speed line. We do have a partner there who takes a significant amount of cans, and we have another global customer that also takes a significant amount of cans, and we run that plant well from a manufacturing standpoint. The plant was built in 1996, and I've said it before, I don't know where the sweet spot is from a manufacturing standpoint for a facility and the workforce, but we are feeling a really good sweet spot right now in Colombia. The performance that the team there has generated has been nothing short of excellent over the last 12 months. So again, a one-line plant but sold out and doing very well. Mexico, this is principally the business we acquired 10 years ago. We make all the beverage products, if you will. We make beverage cans. We make beverage bottles only, no bottles for any other product other than beverages, principally beer and soda. We make bottle caps, and we make aluminum roll-on closures for the aluminum bottle. So again, largely sold out, doing well. We might have a little mismatch this year whereby we gained a customer last year. We lose a little bit from one customer this year, so it's a little mismatch. But by and large, again, a really solid business. I think, as Kevin likes to remind me, it's more than a billion-dollar business in Mexico, so it is a large business. We don't talk about it. We jump right from the U.S. down to Brazil, but in between for Crown, there's a business in excess of a billion dollars, and we call that Mexico. Great. Thanks for the color, Tim. I'll turn it over. You're welcome. Thank you. Thank you. Our next question comes from Arun Viswanathan of RBC Capital Markets. Sir, your line is now open. Great. Thanks for taking my question. Congrats on the strong results here. So I guess first off, I'm just curious on your take on pricing and returns. We've been hearing that there's a little bit of overcapacity in certain parts of North America, especially maybe the Midwest, and there's been some changes in ownership in some plants. So just wanted to get your take on how pricing maybe could transpire over the next year or so. Yeah. Listen, I don't know when you think about regionally where the overcapacity might exist in the U.S., especially the large suppliers, we all operate from a North American platform, and I don't think, listen, I don't know, but it shouldn't be surprising to me if anybody has regional pricing in North America. So now, if there's overcapacity and there's a new entrant there that's causing a problem, okay, they're causing a problem. But you're talking about a business, a market that's 120 billion cans, and if you're going to get excited about 600 million cans in Indiana or wherever in the Midwest you're talking about, and you're going to allow that to dictate your pricing architecture for the rest of the 120 billion cans in your marketplace, then you need to change a whole bunch of people in the industry before you're going to have a successful industry. I think we have a successful industry, and I think it's very healthy that the one-liners have kind of flushed themselves out. I don't wish ill on anybody, but I hope the lessons, their failure lessons, people have a long memory before they try to enter a market like the canmaking market again with a lot of capital, not understanding the requirements, not only from an engineering standpoint but from a daily workforce standpoint, what it takes to make cans. And the multinationals that are here, we do that really well. You're always surprised when you hear people say they can do something as well as somebody else having never done it before. I don't feel good about the fact that some of these guys have gone bankrupt, but I hope that lesson is long for anybody else considering it. Okay. Appreciate that. And then also just want to ask about your thoughts on Asia-Pacific. We've had some challenges for the consumer there as well, and then changes in different laws and regulations that affected your business a little while ago. So do you feel like you kind of stabilized in that region, and maybe what's your outlook for how we should grow there? Thanks. Yeah. Listen, I think we're stabilized. You're always back to in a market like Asia-Pacific, specifically Southeast Asia, it's been a growth market for us for so long. But at some point, you transition from your focus being on growth to your focus being on income growth, and I think we've made that transition now. We are focused on generating good returns. I think we have high teens returns now in the market. A lot of cash flow. That is, our capital needs in the region are not very high any longer, so there's a lot of cash flow. And I think that transition is well underway. We are well positioned to accommodate growth if and when the consumer gets healthy, but for the time being, we're making really good returns and we're generating a lot of cash. I think we're probably still a year away before we see the consumer in Asia really feel healthy again. All right. 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. Good morning, Gabe. You mentioned adhering to contracts, which I think is a principal thing to do, Tim, so I was curious if there was anything unique about contracts that you all entered into. I know that you guys were trying to include different escalators for freight and aluminum premium along the way, and that's like a decade-long process, but were they shorter-term in nature or anything like that, meaning contracts that were struck from 2019 to 2023 timeframe, such that there's more to come up for renewal? I think last time you said you kind of feel good through 2027, but just if you're willing to put a number on a portion of your North American business that's contracted in 2025 and 2026. Yeah. So I will confirm what we've said before. We don't see any major contract renewals coming due until the end of 2026 going into 2027. We believe, as I said earlier, we're going to be largely in line with the market in 2025. I didn't say it earlier, but I think as we sit here today, we believe we're going to be ahead of the market in 2026, but we have plenty of time to reconfirm that as we go through the year. So that would suggest to you that we believe we have business in 2026 under contract that begins in 2026, but we'll come back and address that in July and October. Understood. And you called out North America, Brazil for volumes on the Q4 and full year. Could you tell us what Mexico was? It sounds like it was good, and you picked up some business, and then maybe in 2025 it reverts back out, but just so we've got that roughly. Yeah. In Mexico, we were down a couple% in the Q4. Looks like we're down 2.5% in the Q4. It looks like the industry was down 3.5%. These are estimates and/or information we get from the Can Association in Mexico. Understood. One quick last one, hopefully. Maybe Kevin, it looked like D&A was $10 million below in the Q4, and I think the number you gave us was $310 million for depreciation. Again, amort was running a bit light in the Q4. By my math, that's about a $0.15 bump in 2025 guide. And then if I build up from free cash flow, I'm getting to like a $1.96 billion number for EBITDA. Any comments there? So Gabe, just in terms of depreciation or amortization, we exclude the amortization from our guide, so I don't see that as the bump. Your EBITDA around 19.60 is within the range of where we're at, so I would confirm that. Depreciation around $310 million. We're still spending more in terms of capital than depreciation, so you would expect depreciation to go up year-on-year as a result. Great. Thank you. Good luck. Thanks, Gabe. Thank you. Our next question comes from the line of Joshua Spector of UBS. Thank you. And your line is now open. Hi. Good morning. It's Anojja Shah sitting in for Josh. Good morning. Hi, Anojja. Morning. I wanted to ask a question on transit. I know you need to see sustainable improvement in industrial activity to see real improvement there, but in the past, you talked about the secular trend of companies wanting to automate the backend of their manufacturing process, the part through warehousing and distribution. Have you seen any benefit from that yet that may be being obscured right now, or is that just not something that is benefiting you? No. I would tell you that, yes, we've seen benefit. Not only third-party customers have utilized the backend automation services of Signode, but we had crowned it with an automated warehouse in our new plant in the U.K. Really quite amazing. If you ever get a chance to go over there, we'd love to show it to you. I think in large part, that's being masked or offset by the, I don't want to say dearth of equipment orders, but the very low level of equipment orders for standard strapping and wrapping equipment that we traditionally have seen in the past. Okay. Thank you for that. And then for a few quarters now, you've been talking about manufacturing improvements and excellent manufacturing performance. Can you give a bit more detail on this? Are there things that are being done now that weren't being done before, or is it more about strong volumes and operating leverage? You hit it with the last thing, right? Volume cures all your ills. I probably have said that before. And it happens in two ways. A lot more volume, you just generate more income naturally, more absorption. But when you're running more volume, the workforce is certainly more focused on trying to be as efficient as possible so they can run more volume. But largely, we're talking about efficiency and spoilage, asset utilization, more cans out the back end of the line with less labor hours, less line hours. And I always hate. I'm always hesitant to do this, but we did change out the vice president of manufacturing in our North American beverage business over the last 18 months, and that has had a tremendous impact in performance in North America. Okay. Thank you. I'll turn it over. Thank you. Thank you. Next is Anthony Pettinari of Citigroup. Your line is now open. Good morning. Morning, Anthony. Tim, you talked about substrate substitution having a really good runway in Europe, which we've definitely seen from your results. Is it fair to say the vast majority of that is glass into cans rather than plastic? And then I'm curious, when you look at U.S., Mexico, Brazil, how much runway does substrate substitution have, especially on the kind of glass-to-can side? Are we in the kind of later innings in the U.S., or just how we should think about that? So I think you're right that the biggest substrate shift in Europe is glass-to-can, and principally, that can be around cost with some environmental factors, as glass is heavier and breaks, obviously, than cans. I do think the proliferation of plastic has slowed in Europe. I think there's still a long way to go conversion of plastic to can. United States, there's almost no glass left in soft drink, and cans have a 65%-70% share in beer already. So I think in the U.S., the glass-to-can transition is. I don't want to say it's complete, but it's substantially complete. And if you think about PET, there's a huge runway for PET. I've never been a big believer, and I know a lot of investors and analysts don't like when I say it. I'm not a big believer in flat water converting from PET to cans, but I do believe there's runway for CSD to convert from PET to cans, but that's going to take a government and/or some other push for the marketers of those drinks to want to move away from PET to can. Brazil, in beer, we're 65%-70% cans now. Soft drinks are still 80% PET in that market. And in Mexico, levels are much lower. I think the can is probably (Tom, what do you think?) about 25% for beer right now in Mexico. So there's a lot of room in Mexico from glass- to- can. And on soft drinks, there's also room both from glass and PET to come back to the can. But that market probably takes a little bit longer just because of disposable income. Got it. Got it. That's extremely helpful, and then just switching gears, in your discussion on tariffs, I don't think you mentioned transit. Is there a meaningful impact there or any kind of, I don't know, percentage of goods that kind of cross borders or anything we should keep in mind? Yeah. I think the opportunity is that with more appropriate tariff levels on China, perhaps even higher than the president really recently announced, we protect the domestic transit business as well as the domestic food can and domestic aerosol can business. So there's an opportunity there. We'll see. One thing that's not talked about a lot, and the Can Manufacturers Institute just wrote a letter to President Trump, and we're hopeful he undertakes it seriously. But the 232 tariffs implemented in 2018 had the negative knock-on effect of customers and others circumventing the 232 tariffs on tinplate and just importing filled goods from China. So when you buy your peaches or you buy your vegetables, you're getting Chinese corn. You're not getting corn grown in the United States by a United States farmer under USDA regulations. You don't know what you're getting. So in a lot of ways, that could be helpful. We'll see where it goes. Okay. That's helpful. I'll turn it over. Thank you. Thank you. Our next question comes from the line of Edlain Rodriguez of Mizuho. Your line is now open. Thank you very much. Good morning, everyone. I mean, Tim, in terms of your volume, I would look for North America. I mean, I think you said that you expect to just track the market going forward. Are there any circumstances where you might outgrow the market? I mean, can anything be happening that would allow you to outgrow the market there? I don't. The answer is yes. Let's say that the end markets that are within our portfolio that we serve, for example, we have a very strong position in carbonated water. If that outperforms CSD, then yes, we'll do a little better than the market. We do have a growing energy presence. So if the labels that we supply in energy and/or the labels we supply in the other alcoholic other than beer perform better than beer, then we have the opportunity potentially to outperform the market. But as we said, the guidance we're giving you is predicated on us performing in line with the market. Yeah. That's great. And in terms of your business in Asia, when do you expect, I mean, from everything you've seen down there, when do you expect to see volume returning to your business there? I think, as we sit here today, we're thinking that we're going to see positive volumes in Southeast Asia in 2025, offset by some volume downturn in China as we walk away from unprofitable business. I think longer term, though, I think I said earlier, we still believe that consumers are about 12 months out before they get comfortable to really return to consumer buying habits that we saw pre-pandemic. Okay. Thank you very much. You're welcome. Thank you. Our next question comes from the line of Michael Roxland of Truist Securities. Your line is now open. Yeah. Thank you, Tim, Kevin, Tom, for taking my questions, and congrats on a strong finish to the year. Thank you. Just one quick question from me. You mentioned North American food cans doing better. What's driving that? Because it had been a little bit problematic here for a few quarters. So what's driving that improvement in performance, and should we expect those trends to persist? Yeah. So just so we're clear, within that non-reportable, we have food cans, aerosol cans, and vacuum closures in the United States, as well as the beverage can equipment business, which is based out of the U.K. Food cans have been relatively stable to up for the last six to eight quarters. Even if volume has been a little sideways, the performance in food cans has been good. We've seen a market downturn in beverage can equipment orders as the beverage can growth story has subsided a bit here globally, and we're shipping less equipment, as is the other equipment supplier. And aerosol cans have been a bit subdued, although that has bottomed, and it looks to be it's going to be a better year next year. But two things, I think volume in the Q4 last year was pretty soft, and volume returned this year. We have a very well-balanced portfolio. We have a significant pet food presence as well as a leading vegetable presence. So those customers are just doing quite well in the Q4. Thank you. You're welcome. Elle, if there's one more question, we'll take one more question. Yes, sir. We'll take the last question from George Staphos of Bank of America. Your line is now open. Hi, everybody. A couple sort of modeling questions, quick, and a bigger picture question, Tim, to the extent that you have a view on it. So first of all, I mean, we can do the calculation for ourselves, Kevin, but FX, what do you expect that will be in terms of your forecast for the year from an earnings per share standpoint, given where we sit right now? Pension, is there any benefit from the work that you did last year in terms of the earnings outlook for this year? And then, Tim, the bigger picture question again, to the extent that you have a view, where do you see innovation, especially in the alcoholic and your beer side? Recognizing you're not big necessarily in beer, you are trying to grow in other end markets. What appetite, what momentum do you see out of that customer base and the likelihood that they're going to continue to use cans or maybe grow their use of cans 2025, 2026, and thereabouts? Thanks. Good luck in the quarter. Thanks, George. So, George, in terms of FX, the dollar strengthened considerably in the Q4. If we look at year-on-year, the impact of translation, it's probably impacting the projection by about $0.10, which is already baked into our guide. From the pension perspective, pension, as you know, we annuitize the U.S., largely the U.S. and Canadian pension plan, and I would expect improvement in the neighborhood of like $0.08, I think, is the number of the improvement. Then George, just dealing with the other question around innovation, we're fortunate that there's no shortage of folks out there looking to develop and market brands. You look at price points in the marketplace, what the consumer is prepared to pay higher price points for. It lends you to energy and alcoholic, not the CSD and certainly not the flat water. I would expect we're going to continue to see a variety of flavored vodka-based and other alcoholic-based beers, flavors like tequila, et cetera, as opposed to the malts that were the original alcoholics that came out. I think we're going to continue to see a variety of energy and/or other quasi-energy nutraceutical-infused drinks that are viewed as potentially performance-enhancing. But I think that the upshot to that is that traditionally, well, I'll say it this way, I think the upshot to that is those drinks are largely offered in the can, and the products that they, so it's either incremental and/or the products that they are cannibalizing are offered in can or other substrate. So it's a certain pickup for us, and it doesn't mean we're cannibalizing the can. It could be that we're picking up total share of stomach as a substrate within the can. Makes sense. I'll turn it over to him and thanks again. Thanks, George. Okay. So Elle, I think you said that was the last question. So thanks to everybody for joining us. We'll speak to you again in April after the completion of the Q1. Bye now. That concludes today's conference. Thank you, everyone, for participating. You may now disconnect and have a great day.