Ladies and gentlemen, thank you for standing by. Welcome to the Ball Corporation First Quarter 2008 Earnings Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. [Operator Instructions]. I would like to remind you today's call is being recorded, Thursday, April 24, 2008. And now, I would like to turn the conference over to Mr. Dave Hoover, CEO of Ball Corporation. Please go ahead, Mr. Hoover.

Thanks Fardin. Good morning. This is Ball Corporation's conference call regarding the company's first quarter 2008 results. The information provided during this call will contain forward-looking statements. Actual results or outcomes may differ materially from those that may be expressed or implied. Some factors that could cause the results or outcomes to differ are in the company's latest 10-Q, and in other company SEC filings as well as company news releases. If you do not already have that release, it is available on our Web site at ball.com. Information regarding the use of non-GAAP financial measures may also be found on our website. With me on today's call are Ray Seabrook, Executive Vice President and Chief Financial Officer; and John Hayes, Executive Vice President and Chief Operating Officer of Ball. Well we had a solid first quarter and a good start to the year. We said back in January that we expected it to be a challenge to meet our unusually strong results of the first quarter of 2007. Our performance improvement is the result of focused efforts by all of our segments. In particular, we are pleased with improved results in our metal food and household products segment and continued strong results from our European beverage can segment, but we are all pushing hard to do better. We are focused on the right things and are beginning to see momentum building in all of our businesses. Ray and John will provide some color on our financial and operations performance, and I will close with a few comments about our outlook. Ray?

Thanks, Dave. Comparable diluted earnings per share for the quarter were $0.80, another first quarter record, up from last year's record per share earnings that were 86% higher than in 2006. Higher European beverage can and food and household earnings, together with a lower share price... share count, more than offset the lower North American beverage can and aerospace earnings. Turning to the operations, both North American beverage cans and aerospace produced record earnings in 2007 and lower segment earnings were expected in 2008. First quarter North American beverage can earnings were lower due to inventory metal gains earned, last year not recurring in 2008, but earnings were better than expected due to good manufacturing performance. Aerospace first quarter earnings were lower due to contract mix and reduced sales volumes. Continued strong double-digit sales growth in Europeincluding growth in custom beverage can sales volumes and the strength of the Euro were the primary factors in higher European beverage can earnings in the quarter. The higher Euro added $0.4 per diluted share in the quarter compared to 2007. The food and household segment is off to a much better start than last year and as we said in our fourth quarter conference call, considerable earnings improvement is expected in this segment in 2008. First quarter sales volumes are down from a year ago, but we anticipate part of this volume decline will be recovered later this year. First quarter food and household earnings are much improved over 2007 due to better manufacturing performance and some price recovery. Due to lower interest rates, interest expense is almost $2 million lower in the quarter, compared to a year ago and full-year interest expense should be at least $6 million lower than in 2007. The first quarter effective tax rate of 32% is a…

Thanks, Ray. As Dave indicated, we are generally pleased with the first quarter, but by no means are we satisfied or content. 2008 is a year of execution. There are a number of key operational initiatives underway to foster harmonization of processes, systems and the way we conduct business to make sure that we are focusing on the right details and are fit for the future. I will lay out a brief summary of some of the first quarter achievements within the operations while also giving an update on the progress we are making in executing our strategic objectives. The first quarter of 2008 got us off to a very good start. Continued focus on cost recovery and our pricing initiatives, continuous improvement on the performance side of all of our businesses and business processes, our focus on growing our overall specialty packaging footprint, and executing on the various restructuring initiatives announced and continued disciplined international expansion are all proof points to the progress we are making as a company. Now, moving to first quarter performance. Metal beverage packaging, Americas and Asia, came in above our expectations from a profit point of view despite difficult comps related to North American inventory holding gains on metal that benefited us in the first quarter last year. Continued excellent operational performance, double-digit percentage growth in specialty cans, improved efficiencies generated from our new end technology and pricing initiatives where allowed by contract, all played a role in offsetting the difference. Overall, our volumes were down by more than 4% in North America due to slower CSD volumes in many of our dedicated supply points, as well as reduced beer volumes as a result of our decision last year to not participate where we felt pricing actions did not make business sense. We announced…

Thank you, John, and thanks also Ray for your comments. We are building new facilities internationally in growth markets, redeploying assets to achieve greater returns on them, consolidating operations to improve results and raising the bar in our ongoing efforts to have leaner, more efficient businesses. We said in our January call that we were going to work hard to exceed last year's results for the full year and it is only April, but we are more confident that we will be able to achieve that. The middle two quarters of the year are usually the strongest quarters in our company. Historically, the third quarter is better than the second quarter. We are also expecting to return at least $350 million to shareholders through dividends and stock repurchases this year. Total dividends and share repurchases through the four years from 2005 through 2008 should exceed $1.1 billion. All of this is occurring while improving our credit quality and appropriately investing for the future. We see opportunities to improve our operations over the next two to three years. We have plans in place to build on our early momentum, and we are focused on executing those plans. With that Fardin, we are ready for questions. Question And Answer

Thank you. [Operator Instructions]. And the first question comes from the line of George Staphos with Banc of America. Please proceed.

Thanks, hi everyone, good morning. I guess the first question I have is on the operation, John or Dave or Ray, if you could give a bit more color on what kind of improvement you are seeing via Project NET, what benefits perhaps you have been getting out of operations, reduced spoilage, etc., and how that helped in the quarter. Can we at this juncture twelve months hence talk perhaps on how much the inventory gain was last year so we have a basis for comparison, if not [ph] we understand, and then I have a follow on?

George, you need to get a little more excited and be like we are. But yes, I think we can talk around all of those points.

Yes, the inventory gain in last year's first quarter report was $43 million dollars. Project NET we have always advertised delivering a return somewhere between 10% and 15%. We think that return is about 13% and that is one of the contributors to the improvement in our performance in the first quarter in U.S beverage. Project NET is working exactly as we had planned. John, have you got any other comments?

No, I think that summarizes it well.

What else are you seeing... I am excited, I am just balancing...

Well you just sounded like you were a little slow off the mark here; I just wanted you to be okay, George.

Oh come on, I am recommending your stock too. So in any event, tell me a little bit about what is going on with spoilage and operations otherwise and how that might have helped the quarter?

George our operations are performing terrifically well. As you know, manufacturing excellence is a hallmark of Ball and we have been doing very well on that and continue to do well on that. I don't think we ever will or going forward we will break out exact spoilage for a variety of reasons, but we are seeing improvement throughout all of our manufacturing. Not only in beverage can, but I think across the board in all of our product lines.

Last one and I will turn it over. In food can the performance was significantly ahead of last year, so congratulations on that. Again, if you can somehow give us a bit more clarity between how much of it was productivity and how much of it was price. When I take some of your details discussed thus far it seems like pricing was up high single-digits, low double-digits, would you care to comment on that? Thanks guys.

Yes, I think on the food and household product side, we have a variety of moving pieces. As you know we are in the process of restructuring that business with Tallapoosa and Commerce. The manufacturing plants are performing better but what I would tell you is that we still have a lot of room for improvement and our manufacturing people know that and are very focused on achieving that. On the cost recovery side we have tried to be very disciplined because we have been, as we go through it and everyone knows what's been going on in the raw materials market, we have to recover those costs and we have been diligently focused on that and the sales and marketing people have done a very good job in a very difficult environment to make sure that we are getting value for our product.

And on net pricing, then?

You had mentioned upper single-digits, lower digits, it varies by customers and we have contracts all over the board, but we are recovering those costs and I think we are generally in line with what we expect.

All right thanks, guys, I'll turn it over and I'll try to drink some Jolt or something.

Monster, maybe.

Thank you. The following question coming from the line of Ghansham Panjabi with Wachovia Securities. Please proceed.

Hey guys good morning.

Good morning.

Good morning.

The closure of the Kent plant, is the capacity going to be reallocated towards specialty cans or is it just sort of rebalancing your supply and demand footprint?

Well, in the short-term it is rebalancing our supply-demand footprint, because we were not earning appropriate returns on that equipment and so we have, as you know, we have a lot of international expansion going on and we are taking a fresh look at where we can redeploy that equipment. Much of it is 30 years old so when it comes to some of the equipment we are not going to be able to move it but we are very diligently looking on how to reuse that equipment in a more effective way.

Okay and in Europe this business has been tremendous for a while now; volumes up 13% off of very, very tough comparisons. Given some of the slowing we are seeing on the consumer side here in the U.S, some thought that maybe Europe is not too far away in terms of a slowdown, what are your customers saying about the outlook for the rest of the year. Are they trying to sort of brace for a slowdown in that particular market?

As of right now we are not really seeing anything. There are a couple of factors Ghansham that are impacting that. Number one, we have the Olympics and we also have the European World Championships which is very good. As you know, we have a more weighting towards beer than we do soft drink in Europe which helps in that. And the other thing is the can, unlike North America, the can generally in Europe is more of a premium package. So actually, a lot of the volume has been coming from, as it starts to go down a little bit mainstream, it starts getting into the multi-packing and gets into better distribution; whether it is in Eastern Europe or even in Western Europe as well, that is all helping. So we are seeing no slow down. There is an interesting statistic, though, that is important. As you know the can, in particular, is a take-home package in many parts of the world and in recessionary times, at least here in the U.S., at home food consumption goes up 4% and when you put those two things together, we think we are relatively recession proof.

Okay, and so if I were to think of just one final question if I could. If '08 is sort of boosted by some pricing in metal food along with productivity and in Europe obviously sounding like it's going to continue for a while in terms of strength there, is it fair to say in '09 maybe '10, maybe pricing in your other businesses start to improve, particularly plastics and maybe North American beverage cans as well, going ahead [ph]?

Yes I think the comments I made at the end about the next two to three years; each year we think can benefit from a bit of a different lift and everybody has got to get better. We've got a lot of work to do to accomplish that but we see a pretty good track here for the next two or three years, Ghansham for those reasons that you were talking about.

Okay great, Thanks so much. Good luck in the quarter.

Thank you.

Thank you. The following question comes from the line of Claudia Shank Hueston, JPMorgan. Please proceed.

Hi. Thanks very much. Good morning.

Good morning.

Just had a couple of questions on metal, food and household business as well. I was hoping you could talk maybe just a little bit about the demand trends in the sub-businesses there and comment on what gives you confidence that volumes will recover in the second half there?

Yes, well, there are a couple of things going on. I had mentioned that our customers had finished 2007 with higher finished goods inventory. We don't expect growth in that business but if you try to neutralize what we have walked away from in terms of the aerosol side and some of the other things, we expect roughly flat volumes adjusted for those conditions. Obviously, as we say every time this year, it depends on how the weather goes this summer and other things like that but we see no reason to think that anything is going to be materially different than it's been in the past and that's what our conversations and our planning is with our customers.

Yes, that business for us is more seasonal, even than the beverage business, but recall that the first and fourth quarters are the slow quarters for our company and the middle two are the stronger ones, so I just echo what John said.

Okay, great. And then just in terms of continuing to improve the profitability there, obviously there is a good sort of step change in the first quarter and how should we think about sort of the development of margin improvement over the rest of the year, I mean should we expect sort of even improvement over the course of the year or should it be back-end loaded as we think about it?

No, I think it is going to vary an awful lot about how good, as we said, the weather goes. For example, on the salmon side we know there is a lower expected salmon catch this year up in Alaska which puts a little bit downward pressure on it but a lot of it has to do, we have had a lot of costs increases, we have been recovering those costs in the marketplace and it really comes down to how our manufacturing plants perform through the balance of this year. Going into 2009, let's not also forget that we really do not get much of an effect of the restructuring this year related to Commerce and Tallapoosa, so going into next year that provides us some added upside, if we execute correctly.

Okay, but those benefits would be more for 2009?

Correct.

Okay, great. Thanks a lot.

Thank you. The following question comes from the line of Rick Skidmore, Goldman Sachs. Please go ahead. Richard Skidmore - Goldman Sachs, & Co.: Good morning, thank you. Dave, I just wanted to touch on the pricing, perhaps in North America. Is there any opportunity from your prospective to perhaps get more pricing as opposed to just the pass-through of the raw materials in the North American beverage can business?

Yes, I think that we are focused like a laser on really understanding what is happening and as we move through contract negotiations with our customers, we and they have to understand that there is inflation back, so this isn't something you do overnight and we do not have eight billion customers around the world, we have several but not many and so we are working really closely with all of our customers to communicate with clarity what it is that we've got to do to get some fun back into our 12-ounce business, for example, and then be sure, and we are driven importantly by cost recovery, but we've gotten a little behind in a place or two for good reason. We've got to turn that around and I think as the economy got used to very low inflation rates but as this comes back, you can talk to any of our customers about it. This is just the packaging costs that are going up for them, so this has got to be recaptured, unfortunately from the consumer, but that's the world that we live in and that's the focus that we've got. What we look at is making the right return for the investment that we have. When we cannot, we do things unfortunately like we just did in Kent, but we are very focused, communicating very well and intend to be, to have businesses all of which make reasonable returns.

Yes, I just might add on to that that it's important. What we are trying to do is getting paid for the value delivered and we do an awful lot of things. You all know about the customer technical service that we do. We also do a lot of hedging and metal management for customers and that creates costs and that is value delivered to our customers. Our quality and lab services, a lot of the things we do well there and then lastly, on the innovation side, yesterday we had a board of director's meeting and the head of innovation of North America stood up and we are talking about 22 product launches across all of our packaging businesses with more than 4 billion units this year of new products that are going to be launched. Some of them are small ones, some of them are larger. In March we launched the recloseable can in Europe; we have the ALUMI-TEK bottle here in North America; in the plastic business we are launching our gamma clear bottle. We have got under-tab printing in the U.S here and at the end of the day what we are trying to do is give our customers and ultimately their consumers a value proposition because we know it's very difficult in the supply chain.

Don't forget the vented end, John.

And the vented end, correct. Richard Skidmore - Goldman Sachs, & Co.: And on the contracts, do the contracts allow you to, I guess, how often can you go back to your customers to think through if there is an ability to go above the inflationary pricing. Is that on an annual basis or are these contracts multiyear that will take a while to work through?

Well, we do not have a standard agreement with everybody and we are addressing these things as they come up, as we can, and sometimes in advance. So I am not really going to give you a straight answer, because I would have to answer for every different customer. But rest assured, where we... we believe we have fallen behind in the 12-ounce business and we have got to recover and that is a real focus for us. It will not happen overnight, but we can see it. Richard Skidmore - Goldman Sachs, & Co.: okay and then just separately, can you talk to what the drivers were for the decline in volumes in the U.S in beverage cans and does the closing of the Kent plant now get you to where your system is essentially running full across all of the other remaining plants?

Yes I think in the opening comments I alluded exactly to what was driving the volume in North America in terms of our CSD volumes. We have sole supply areas that were down year-over-year. I think that was more than just a seasonally slow quarter and as people ramp up for the summer time, so I would not read in to too much of that and then we also had a specific situation in beer that a year ago that we chose to walk away from and that hurt our volumes a little bit. But I think as we go forward in the balance of the year we remain relatively constructive that our volumes will be where we think they should be and the announcement of the closing of Kent does help bring our 12-ounce capacity much more in line so that we are fit for the future. Richard Skidmore - Goldman Sachs, & Co.: Thank you.

Thank you and the following question's coming from the line of Alton Stump, Longbow Research. Please proceed.

Thank you. Good morning.

Good morning.

Just had a question on the European BevCan business, obviously a great volume growth in the quarter. Could you just give me an idea from a capacity standpoint what type of volume growth you might be able to handle in '08?

In 2008, well, as I said earlier, all of our manufacturing assets throughout the world are performing well and not the least of which is in Europe and so every can made is a can sold and we saw great improvement in the first quarter in terms of overall volumes and with Hassloch and Hermsdorf a full year and we are having some speed up projects, remember, in Radomsko, I think we announced last July that's beginning to just start to kick in. So I think we are well positioned in 2008, but it is a very, very tight situation enough our announcement about the plant in Poland for 2009 and some other small speed ups here and there allow us to continue to grow, but in our planning, just so you know, we are not expecting this double-digit growth. So even with all that capacity coming on, we are thinking of mid-single digits and it's above that we are going to have to be scrambling a little bit more.

Okay, thank you, and then just one quick follow-up. I think I ask you guys this question every conference call, but could you just give me a quick update on Germany and how that market is recovering, if there has been any change, either positive or negative in the last one or two quarters?

The trends that we have been seeing in Germany are very consistent with what we have said over the last couple of years. We are seeing good growth off low volumes, of a low base, if you will. It is a marathon, not a sprint, but you know double-digit volumes keep going on and on and it is just going to be a situation that evolves over time but we see certainly no negative relative to where we've been and only positive as we go forward.

In a way it's good that they are not growing faster, because we do not have enough cans the way it is.

Right, okay, thank you.

Thank you, and the following question coming from the line of Chris Manuel with KeyBanc Capital Markets. Please proceed.

Good morning gentlemen and congratulations on a good quarter.

Thanks.

A couple questions, just more or less housekeeping stuff really, but can you, if I could zero in again on the metal food and household; you had a very, very strong performance there. When we look at the margin percentage, it is one of the best levels we have seen in quite a while, is it your view that with the pricing and such that you put through, even if considering the volume improvement, that the year-over-year, incremental change in margin is sustainable or a fact and continue to go up through the rest of the year. Can you give us a little more help there, Dave or John?

I think maybe Ray ought to answer this question.

Love to Dave. When we talk about food and household, what I would like to tell you is we made no money last year. So we finally made some money. I mean, so while it looks a great improvement but we were, last year was brutal. So we are finally getting around to where we are making a little bit of money here, so let us not... we expect, we told you guys, it could not have gotten any worse, so we expect big improvements from that business throughout this year and as John said, the rationalization program that we announced in the fourth quarter, that really does not kick in until [ph] '09 so we look to be significantly better in that business throughout this year and next year.

Okay, for example for first quarter I think you did a little bit better than 5.5% margin, we should expect that for the full year, your business can do at least that with, subject to improvement due to restructuring next year, would that be a fair way to think about it?

That's a fair way to think about it.

I think probably on a comparative basis this quarter we just finished, since we, as Ray said, we did not make money last year, we did this year, will probably be our biggest percentage gainer for sure.

Yes. And remember last year in this business as time went on through the year we were getting better and better, not to where we needed to be, do not get me wrong, but as Ray said, we didn't make any money in the first quarter, so it's a very easy comp.

That is helpful. Do you have volumes for plastics and aerosol by chance?

I do not, plastics on the commodity side of our business, on the monolayer side, they were down 6%, approximately, and on the custom side we were up about that similar amount, maybe a little bit less. On the aerosol side, I am sorry; I do not have the numbers off the top of my head.

Okay. The last question I had, was with respect to I think one of the markets you guys have talked about looking at and potentially putting a plant in India, if you could give us a little color as to how you think about that market, what will you think the potential, clearly there are a lot of people in India. But of what you think the potential might be for the beverage can there, the competitive landscape, a little more information on the thought process as you consider entering India.

Yes, well, it's certainly a developing region, as we all know. Let me give an analogy. If you look back ten years into China, when everyone talked about the per caps were less than one can per person, but the reality is, you've got to look at the middle class and look at the buying patterns of the people there. The economy in India has been exploding. It has been going very strong and the middle class is growing at a far greater rate than many other places in the world and that's quite good for the beverage can. This year or in 2007 we estimated approximately a little bit more than 300 million cans and we have seen very strong double-digit growth in that over the foreseeable future and not to say it is without impediments. There are a lot of bureaucratic issues in terms of the various states within India that make it difficult from an alcohol perspective. There are a lot of religious issues that go on there that may impede a little bit on the beer side, but having said that it seems as every week you are reading about a new beer customer putting in new capacity and really investing for the future in that and we are just following along on the coattails of our customers.

Okay, that's helpful. That is all I have. Congratulations on a great quarter and good luck the rest of the year.

Thanks Chris.

Thank you. The following question comes from the line of Debbie Jones, Deutsche Bank. Please proceed.

Hi, I have some questions about your capital projects. You mentioned 75% of them are going to be outside the U.S, I was wondering if you could break that down a little bit and give us more detail on that.

Yes, I can give you a little flavor on that. We expect, we are going to spend in the neighborhood of what we call, define as Europe, we are probably going to spend $175 million and that spending is going to be, as John talked about, we have got some new plants and speed-ups we are doing in Europe, so we are spending a lot of money in Europe and really most of that is for new top-line growth. We have got to finish our Project NET that somebody referred to earlier in the U.S where this is the final spending of Project NET in U.S and it is delivering the results that we said it was going to deliver and we will be spending in the neighborhood of, in total in the U.S beverage cans, we will be spending probably $75 million to $80 million on U.S beverage cans and really the rest of the businesses we are spending less than depreciation.

Okay, that's helpful. I am also wondering, the shift with China to the Americas, is there do you have a rationale for that or are you going to provide some restated information too?

Well, we already did that and if you look at your press release financials attached, those are...

I wasn't sure if you gave all four quarters for 2007.

Well, you will get all four quarters eventually, but that's just for the first quarter, but those are our restated and the reason we changed it is we had a management reorganization that we announced in January and as a part of that reorganization, people's responsibilities changed and when that happened, we reorganized our segments in accordance with how we expect to run the business.

Okay, great. Thank you very much.

Thank you. And the following question comes from the line of Keith Morgan, Kofting [ph]. Please proceed.

Good morning gentlemen. I have got a couple of questions. First in regards your European BevCan business. I just wondered if you could help break out the 13% volume growth between capacity additions at Hassloch and Hermsdorf and sort of more underlying picture first of all.

I am not sure I understand the question because overall growth for us was 13% and I think the industry was about that same amount as well. We would not have been able to supply it if we did not have the Hassloch and Hermsdorf lines up, but where we are seeing growth is continued trends of what we talked about before and in fact I would say even a little accelerated growth in Western Europe. For example, in the U.K., partially because of the economy, partially because of smoking ban and other things, we saw double-digit growth in volumes there which we have not seen for a long, long time, so.

Yes, that is a good number. C: John A. Hayes: Certainly.:

And just on diesel costs; I mean I understand diesel prices have increased quite substantially over the last three to four months. Just wondering how much of an issue that is for your business and whether you've got any option here to hedge your exposure or whether it is a delayed pass-through in terms of the pricing from your supply base?

Well, we have been looking into, over a year, of how to hedge diesel costs, but as you pointed out, that's been going up quite rapidly and to date we have not found a mechanism we are happy with on how to hedge it, but we've been, just say we've been constantly looking at it for a while.

Okay.

Some of our contracts have pass-throughs for those kinds of costs, some of our contracts are freight delivered, some of our contracts are actually the customer pays the freight, so it's all over the map. Some of it is passed-through and some of it isn't.

Is this a cost increase that worries you, you will see, I think aluminum increases have been obviously an issue for the last couple of years and you are obviously attempting to recover those whereas the spike up in diesel seems to have become particularly pronounced over the last three to four months.

Yes on a relative scale, it's not the biggest cost driver in our business, but it is not unimportant. And as Dave alluded to in talking with our customers as our contracts are up for renewal in those places where we are not able to get recovery, we are certainly focused on that.

Okay, understood. Thanks very much for your time, guys.

You bet.

Thank you. [Operator Instructions]. And we do have a follow-up question coming from the line of George Staphos. Please proceed.

Thanks, hi guys. Three questions. First off, in aerospace, are there any key projects that you can lay out for us that we should be on the watch for? That will help the backlog and will be positive for the 2009, 2010 timeframe?

I cannot give a lot of information there. A couple things that we are following pretty closely that are significant. One is that I can't talk about, another is a communications satellite. What John was talking about is that we think we are well positioned to win our share of work but with a continuing resolution in the country right now, budgetary wise, new starts are hard to come by so that is some of the delay in some of the business that we see. We have got a lot of proposals, though, that are active. We do win work. We won a little less than we did in the first quarter, as you saw from the backlog number, but I can't, I would not say there is a program that's make or break. It's a number of things. A handful are pretty good sized. We hope to win our share of those and we hope to see our backlog moving on up. I think realistically though we are in a presidential election year, I am sure you know that because you can't help but know that given all the publicity around it, and that really just slows things down a little bit in this business. It happens every four years. So, it is not a crisis. We are continuing to do well. We are expecting a pretty good year in aerospace actually overall. Maybe not quite as good as last year in terms of sales, profits may be a little closer to last year, but we continue to work really hard on trying to figure out how to position that business well and win our share of the work, George.

Sure. I wasn't using make or break in my question, and I know there is a lot of stuff you cannot talk about in aerospace, but that was helpful. Second question, in food and household, if there is a midyear tinplate price hike, we do not expect it, but who knows, may be there could be one. Would you go out and raise pricing to your customers to offset that?

Well, George, as I think a lot of people were aware of discussions around surcharges or increases that you read it in the paper all the time. We believe that our contracts with our suppliers are clear and they do not allow for any of those midyear increases.

Understand.

We will, we are going to defend this position on behalf of our customers. Nearly all of which our customer contracts do have pass-through provisions and we are not going to take on the commodity risk.

So, if there is an increase that is announced, one you would fight it because you feel you have the right to fight it, but if you ultimately have to take it then you also have the right and expect to raise pricing to your customers. Is that a fair summation?

It is, if you assume that it would happen, but we think our --

Understand.

Contracts with our suppliers are clear.

Okay. Last question. I think you said Kent was earning cost of capital, is that a fair assessment in terms of why you closed it and aside from it being maybe an older facility, were there any customer dislocation that occurred that caused you to shut it as well and then maybe it was not earning cost of capital for that reason?

Yes, I think you may have, you said it was earnings cost of capital, I think you meant to say it was not and that is the truth, it was not and has not.

Right.

It has not. John mentioned one piece of business that we passed on a year ago or more.

Okay.

That hurt a little bit, but also the region of the country had probably a little too much capacity. We decided that, you remember, not so many years ago, we do not like to do these things for practice, okay.

Yes.

So I think this is the exact right thing to do at this point in time for us.

The other part, George remember, I know a lot of our shareholders do not like that we are spending capital, but when they see the results coming out of Europe, I imagine they like it a little bit better, but we have got capital spending. We talked about India and other places that we have got that we think we can get good returns on these assets and we are going to redeploy these to make proper returns.

In areas where you haven't recovered costs as well as perhaps you would like, are those facilities or contracts largely under cost of capital as well, below cost of capital as well?

Yes, that would be right, but I am not sure I exactly sure I understand your point.

Well, I guess if Kent was not earning cost of capital and you shut it and you have said you are on a two to three year timeline to improve the trajectory in returns across the whole business and you haven't recovered costs as well as you would like in some areas of your Americas beverage can business that where you can't recover your costs as well as you would like, those facilities that might be subject to closure. Would that be a fair assumption?

Yes. I mean, that is not a forecast that we are not closing anything, but we look at all that all the time and we look at supply-demand situations, customer situations, where we think the market's going and reached a conclusion this was timely. As Ray said, we also have another use for some of this equipment that is a better one and I think we are going to make commitments to supply our good containers where we can make a return.

Dave, is it adjusted for the size of the business relative to the other segments? Obviously it is your biggest business, but is Americas' beverage the biggest opportunity for you, Americas' beverage can, the biggest opportunity for you to improve your returns over the next two to three years?

Well, it is our biggest business so if we --

So we adjusted for that.

Yes, we adjusted for that? Probably, I do not know. I would say the global beverage can business certainly is because that two-thirds of the company in terms of opportunities where we are spending our capital to grow in other parts of the world we are changing the footprint, making more specialty cans here in North America, but if you look, I see opportunities in all parts of the packaging business and I don't know that I could say exactly where it will happen but understand that in the North American BevCan business, it's still a very, very good business. It's just that as I say, particularly in the 12-ounce, we have got to get a better economic proposition. John, what is your term that you use to get paid for the value that we deliver?

More fun.

Yes, that part too. Having fun is mandatory.

Understand. And if not, the capacity comes out it would seem.

I think that is right.

Alright. Congratulations on a great quarter guys. Thanks very much. Good luck.

Thank you George.

Thank you. Mr. Hoover, we have no more questions at this time.

Okay, well, thanks everybody for joining us today and we look forward to talking to you again in July and we are having fun.

Thank you. Ladies and gentlemen that does conclude the call for today. We thank you for your participation and ask that please disconnect your lines.