Silgan Holdings Inc. (SLGN) Q3 2012 Earnings Report, Transcript and Summary

Welcome to the Silgan Holdings Third Quarter 2012 Earnings Conference Call. As a reminder, today’s conference call is being recorded. I would now like to turn the conference over to Kim Ulmer, Vice President and Controller for Silgan Holdings. Please go ahead, ma’am.

Thank you. Joining me from the company today I have Tony Allott, President and CEO; Bob Lewis, EVP and CFO; and Adam Greenlee, EVP and COO. Before we begin this call today we would like to make it clear that certain statements made today on this conference call may be forward-looking statements. These forward-looking statements are made based upon management’s expectations and beliefs concerning future events impacting the company and therefore involve a number of uncertainties and risks including but not limited to those described in the company’s annual report on Form 10-K for 2011 and other filings with the SEC. Therefore the actual results of operations or financial condition of the company could differ materially from those expressed or implied in the forward-looking statements. With that, let me turn it over to Tony.

Thanks. Kim. Welcome, everyone, to our Third Quarter 2012 Earnings Conference Call. Our agenda for this morning is to review the financial performance for the third quarter, to make a few comments about our outlook for the fourth quarter of 2012 and provide some very preliminary thoughts on 2013. After these prepared remarks Bob, Adam and I will be pleased to answer any questions. As you saw in the press release, despite the continuation of several external challenges, this was another record quarter for Silgan Holdings. We reported adjusted earnings per share of $1.17, in line with our expectations and ahead of $1.14 in 2011. On a year-to-date basis we reported adjusted earnings of $2.22 per share, an increase of 7.2% over 2011 in spite of the previously discussed volatile pack-nitions and sluggish European economy. Overall we’re pleased with our business performance and continue to see opportunities to expand and enhance our businesses. During the quarter we also acquired the Plastic Thermoformed Food business from Rexam, which thus far is integrating nicely into our business and we believe represents a solid growth opportunity for the company. We also continue to be opportunistic in deploying our strong cash flow by buying shares through open market transactions under our repurchase authorization. We intend to continue to make these types of investments to grow our business, strengthen our franchises and continue to create shareholder value. Given our year-to-date performance through these volatile market conditions, we’re refining our full-year estimate of adjusted earnings per diluted share to $2.80 to $2.85, which represents a forecasted increase of 6.5% to 8.4% over 2011. With that, I’ll now turn it over to Bob to review the financial results in more detail and provide some additional explanation around our earnings estimates for 2012.

Thank you, Tony. Good morning, everyone. As Tony highlighted, the third quarter of 2012 was another strong quarter as we delivered adjusted earnings in line with our expectations and $0.03 better than a very strong prior-year quarter. Key drivers impacting our performance were volatility in fresh pack volumes, continued economic challenges, inventory management and operating performance. As a result we delivered third quarter adjusted earnings per share of $1.17 versus the prior-year quarter of $1.14. On a consolidated basis net sales for the third quarter of 2012 were $1.139 billion, a decrease of $8.5 million or about 1% as the negative effects of foreign currency and lower volumes in Plastics were partially offset by improved unit volumes in the Containers and Closures operations. Net income for the third quarter was $78.7 million or $1.13 per diluted share compared to third quarter of 2011 net income of $78.8 million or $1.12 per diluted share. While we experienced volatility in foreign exchange across the business and it undoubtedly impacted the top line, the net impact on the bottom line was immaterial as we continue to be effectively hedged, having financed the International businesses in their local currencies. Interest expense for the quarter was virtually unchanged from the same period a year ago as costs associated with incremental year-over-year borrowings were more than offset by a lower average cost of borrowings. We also recorded a loss on early extinguishment of debt during the third quarter of 2011 as the cost price of the July, 2011 refinancing of our senior secured credit facility. Capital expenditures for the third quarter of 2012 totaled $25.3 million compared with $39.1 million in the prior-year quarter. On a year-to-date basis capital expenditures totaled $84.7 million in 2012 versus $123.2 million in the prior year. This decrease in capital spending is entirely the result of our decision to take advantage of the accelerated tax deductions in 2011. We continue to estimate that capital spending for the full year will be to the lower end of our normal range of $120 million to $160 million. Additionally, we paid a quarterly dividend of $0.12 per share in September with a total cash cost of $8.4 million. During the quarter we also deployed $11.8 million to repurchase stock pursuant to our $300 million authorization which was approved by the Board during the third quarter of 2011. The average price per share repurchased during the quarter was $40.80. After purchasing approximately 1.2 million shares for an aggregate purchase price of $49.7 million we have approximately $250 million remaining under our share repurchase authorization. I’ll now provide some specifics regarding the financial performance of each of our businesses. The Metal Container business recorded net sales of $814.1 million for the third quarter of 2012, an increase of $15.4 million versus the prior-year quarter. This increase was primarily the result of increased unit volumes and the pass-through of higher raw material costs, partially offset by the impact of unfavorable foreign currency translation. Income from operations in the Metal Container business decreased $8.2 million to $103.5 million for the third quarter 2012 versus $11.7 million in the same period a year ago. The decrease in operating income was primarily attributable to the negative impact resulting from a greater inventory reduction in the third quarter of 2012 as compared to the same period a year ago. Consistent with the first half of the year, the third quarter was negatively impacted by lower price realization in the European markets, largely as a result of prepack negotiations to secure payments and reduce credit risk in the Greek markets. In addition, we recorded rationalization charges of $1.7 million primarily related to the Kingsburg, California facility and $1.4 million associated with start-up costs for the new facilities in Eastern Europe and the Middle East. Net sales in the Closures business decreased $6.8 million to $182.7 million for the quarter, primarily due to the impact of unfavorable foreign currency translation of $10.9 million partially offset by higher unit volumes. Income from operations in the Closures business totaled $24.1 million for the third quarter of 2012, essentially flat versus the prior-year quarter. Volume increases in the U.S. single-serve beverage market, improved manufacturing efficiencies and ongoing cost controls were offset by European declines due to the macroeconomic climate and higher rationalization charges. Net sales in the Plastic Container business decreased $17.1 million to $142.7 million in the third quarter of 2012 primarily due to lower unit volumes as a result of the customer buy-ahead in the second quarter of 2012 in advance of their planned back-out shutdowns. Lower average selling prices as a result of the pass-through of lower resin costs and the unfavorable impact of foreign currency also contributed to the sales decline. These declines were partially offset by the inclusion of net sales from the Plastic Food Container business acquired from Rexam on August 30, 2012. Operating income in Plastics increased $2.4 million in the third quarter to $6.2 million versus $3.8 million in the prior-year quarter as a result of operating improvements, the favorable comparison of the year-over-year resin pass-through lag and lower rationalization charges. These benefits were partially offset by the impact of lower unit volumes in the quarter. Turning now to our outlook, as Tony indicated in his opening remarks, the overall tone of the year has been one challenged by external influences. Even so, we have successfully delivered financial results well in excess of the prior year. In fact, our nine month adjusted earnings per diluted share increased $0.15 or 7.25% versus the prior-year period. Based on this year-to-date performance and our outlook for the remainder of 2012, we are refining our full-year estimate of adjusted net income per diluted share in the range of $2.80 to $2.85. As a result we’re providing fourth quarter 2012 estimate of adjusted earnings per diluted share in the range of $0.58 to $0.63. Comparatively we delivered adjusted earnings of $0.56 per diluted share in the fourth quarter of 2011. We continue to forecast free cash flow for 2012 to be in the range of $200 million to $250 million for the full year, excluding the voluntary pension contribution made earlier in the year and the make whole payment for the redemption of our 7.25% notes. Given the fact that we reduced inventory more than anticipated through the end of the third quarter, we’ve made good progress toward achieving our working capital reduction target for the year. And while we’re in the early stages of our 2013 budget process, we’ll make some early thoughts around the outlook for the coming year. While the macroeconomic environment continues to be a headwind, we believe our businesses will consistently perform with a stable predictability. It’s worth noting that the recent economic – during the recent economic downturn we have delivered three consecutive record years of adjusted earnings per share. As in the past, we expect solid operational improvements across each of our businesses. At this early stage we expect these improvements will lead to a net mid-single-digit earnings improvement for 2013. We also expect that we will deliver modest accretion from the Silgan Plastic Food Container business acquired from Rexam in August of this year. In addition, our balance sheet remains strong with significant liquidity and the business generates significant free cash flow. While the deployment of this capital can’t always be predicted, it has been a mainstay of Silgan’s strong shareholder value-creation model and we continue to believe it will be a prominent part of our future success. That concludes our prepared comments and we can open it up for Q&A. And I’ll turn it back to Lisa to provide directions for the Q&A session.

Thank you. (Operator Instructions) And we’ll now take our first question from George Staphos with Bank of America Merrill Lynch. George Staphos – Bank of America Merrill Lynch: Good morning.

Good morning, George.

Good morning, George. George Staphos – Bank of America Merrill Lynch: You know I wanted to take a step back as opposed to getting into the nitty-gritty of the quarter and kind of do a bigger picture question and theme and I’ll try to keep it brief. From your vantage point, do you see a more threat from Plastics, or other substrates for that matter, encroaching into Metal over the next several years? And what do think overall your core EBITDA growth should be across all your segments if you look out say a couple of years, three years?

Thanks, George, for the question. I think the – I think the – first of all, if you talk about kind of how do we view the food can world and the competitive threat, I know we’ve talked about it before but I would start by saying really no change there, that we continue to believe that there is a strong competitive advantage of the food can. It’s low-cost, it provides a lot for the customer, unique in terms of security of product, et cetera, so not to mention install base, infrastructure to process. And so we continue to think that it is a very economically advantaged package. There have always been – other products have come along against that. It’s interesting, I was just looking back over history and you look back to 1980 and there were about the same amount of cans sold that there are today. So different cans, et cetera, and so we’ve always talked about a flat kind of market and that’s how we view it. And I don’t really – our feeling is there’s not much change to that. Now our customers are absolutely looking at alternative packages to try to broaden the consumer base of those packages and we think that’s great. That’s part of why we thought the restaurant business was a good fit for us, so we view all that as positive. It’s important for our customers to continue to find ways to expand their base, and yet we believe they will continue to want to feed that back to food cans over time, because it is such a competitively-advantaged package in a very price-sensitive food – processed food market. So again, it’s a big question and so you had a long answer on it. In terms of EBITDA growth, I think as you know, we don’t quite think that way. It’s a little bit more about returns, and so it will depend on what opportunities show for us, but over time I think we’ve had a pretty good track record of sort of double-digit kind of growth. And as we survey the opportunities for us, we don’t see any reduction in opportunities to continue to focus on our cost, make our package more competitive, support our customers in their efforts to be competitively advantaged in their markets and continued to expand the franchises that we have. So I don’t see any change to that at all. George Staphos – Bank of America Merrill Lynch: That’s funny, that leads to my follow-up and then I’ll turn it over. So with that and with the expectation that you should continue the growth rates that you’ve seen, if we look back the last few years, your return on capital has dropped obviously from very high levels, but it’s dropped a fair amount. Some of that’s due to the weather and other disruptions that we’ve had the last couple of years, certainly the Rexam acquisition, you’ve got all the cost, if you will, up front and none of the return. Why wouldn’t you do perhaps more aggressive value return, whether through dividends, special dividends and the like, given how predictable you think your returns or cash flow and growth should be into the future? Thanks. I’ll turn it over.

Thanks, Greg, great question. The kind of stuff we think about all the time. One part of that, as you do acquisitions, the general curve is that you bring your returns down a bit on the cost of the initial acquisition and from that platform you continue to find opportunities to invest and enhance, and that’s sort of been Silgan’s history. So if you look at some of the big acquisitions in our history you’d see those returns compressed for a period of time and then you see the expansion that comes from that. So we think we’re right on a normal course in that regard and we think there are plenty of opportunities both in the existing historic businesses and in the acquisitions to move us up in that regard. But that is not saying that we don’t also think about returns of capital, you say more aggressive at it. I think we’re looking at it all the time and thinking about it, and so basically we agree with you. Our job is to return, generate returns to our shareholders and however we can best do that and we don’t think it’s just through M&A. We don’t think it’s just through a tight focus on cost control and return enhancement, it’s also on what you do with the cash that comes out. As Bob said at the end of his prepared remarks, we think there’s – it’s been a hallmark of Silgan that we’ve been very good at deploying the free cash flow we generate in lots of different ways, and we absolutely agree with you that it’s part of our job to continue to do that. George Staphos – Bank of America Merrill Lynch: Okay. Thanks. I’ll turn it over.

And we’ll take our next question from Gransham Panjabi with Robert W Baird. Gransham Panjabi – Robert W Baird: Hey, guys. Good morning.

Good morning, Gransham.

Good morning. Gransham Panjabi – Robert W Baird: Hey, just thinking about your North American Metal Food Can business for a minute, just given Campbell’s decision late last month, Del Monte earlier this year I guess and kind of thinking about your footprint out to 2013, should we expect one of the larger sort of capacity reduction years for Silgan throughout – on a year-over-year basis as we look out to 2013 just based on those events?

Yeah. Look, what you said is true. Both Del Monte and Campbell’s have announced some closures particularly out on the West Coast; and we have in the case of Del Monte and are evaluating the footprint in the case of Campbell’s decision in terms of what our footprint looks like. I wouldn’t be so quick to say that it’s necessarily a capacity reduction because in both cases the volumes out of those processing plants are moving elsewhere in their systems. And then likewise, we will allocate our equipment across our broader platform to be able to service that volume. So I don’t in any way want to imply that there’s a volume reduction out of here, out of those two decisions. There may well be some plant closures that come out of that, but not so much directed at capacity reductions. Gransham Panjabi – Robert W Baird: Okay, and in terms of timing, would that happen by year-end? Early next year? How should we think about that?

Well, the Kingsburg facility has already been announced, and that is in direct relationship to Del Monte’s decision to close that facility there. That will, unfortunately, have an impact on about 50 of our employees or so. As we look at Campbell’s decision, they made the announcement that they will exit the Sacramento facility by the end of 2013. As I said, we’ll look at how to support that volume across the broader part of our system. That plant also supports other customers in the California market. So we’ve got a number of initiatives to evaluate here to decide exactly what and how that means we’ll operate, and so I’d want to make sure that we have adequate time to do that analysis justice, and as soon as we conclude and have a decision, we’ll make that announcement.

To be clear, Campbell has announced that they will be closing their filling; that does not necessarily mean that our Sacramento can plant is getting closed. As I think Bob said, I just want to be clear, that’s all part of the evaluation, so anything is possible here. Gransham Panjabi – Robert W Baird: Okay, and then just a quick one on closures, can you just parse that out between North America and Europe also? Thanks.

And Gransham, are talking about volume? Gransham Panjabi – Robert W Baird: Yeah, I’m sorry, volumes.

Sure. Overall, we’re up slightly. In the U.S. business, we saw very strong growth in the single-serve beverage business, so we’re kind of up mid-single digits. On the European side where again as you saw in the note, we’ve still continued to suffer weakness in the southern European and Western European markets, we’re down low-single-digits 2% to 3%. Gransham Panjabi – Robert W Baird: Okay. Great. Thanks so much, guys.

Thanks.

And we’ll take our next question from Chris Manuel with Wells Fargo. Chris Manuel – Wells Fargo: Good morning, gentlemen.

Morning, Chris.

Hi, Chris. Chris Manuel – Wells Fargo: A couple questions for you. First, can we maybe dive a little bit into the Rexam business? It’s been a month or so, a month and a half or so now that you’ve had it; early thoughts, things that you like, things that maybe you look at and seeing you need a little work on? And in particular if you could talk a little bit about thoughts about capital allocation there. Do need to do some more expansion?

Sure, hey, Chris, it’s Adam. I think you hit it right on the head. They’ve been a part of our Silgan family for all of about a month now. So number one, we’re very excited to have that team, that business and that product line and portfolio as part of our family. So far through a month we’ve been very pleased with how they performed, how the team fits in with not only our Silgan businesses but also with the culture that we have at Silgan. So I’m feeling very good about the management team and what they’ve done, what they continue to do and their kind of unrelenting focus on meeting their customer needs. So feeling good about it. As far as thoughts on capital allocation, is a one facility business. Over time we’ll look at it continuing to expand and explore opportunities not only in North America but around the world with that – with those products and that portfolio. But we’re feeling very good about it, still a month into it but we very much like what we see. Chris Manuel – Wells Fargo: And a follow-up question along those lines, I know that, that business you acquired also has a good bit of business with a large customer that you share that you were talking to earlier as making some adjustments in their footprint. Is there any impact potentially that comes across this business? Could it be a beneficiary of any packaging shift or things of that nature?

No, I don’t think so. I think as we look at the Silgan Plastic Food Container business it’s more about product line extensions with our customers. I think as Tony kind of outlined very well in his comments, this is about a broader reach to a broader audience for the products that we sell, whether they be in a metal food can or in a plastic food container. So there’s certainly room for both on the shelf and we think this is an interesting way to broaden the base for our food customers.

And Chris, this is Bob. I’ll just add on to that. To be clear, we do expect some pretty nice growth coming out of that business. So I don’t – I wouldn’t want to leave us thinking that, that business won’t see some benefit on a go-forward basis. That’s the whole premise of that acquisition. Chris Manuel – Wells Fargo: Okay that’s helpful. And then Bob, another question for you regarding your discussion about preliminary thoughts on 2013, just to make sure I understood this correctly, you talked about base business doing what you’re doing on a normal basis of capital you’ve employed this year et cetera, and capable of giving you mid-single-digit earnings growth, and then you went on to talk about plus what you’ve added for the Rexam business, plus whatever you ought to do for capital next year. Am I thinking about that the right way? Or was that all rolled into the thought process of mid-single-digit numbers next year?

No, I think you got it right with your first scenario, and that’s pretty consistent with what our history would suggest, that our businesses do a pretty good job of controlling costs and getting the benefits of the capital that we’re spending. That all kind of nets us that mid-single-digit kind of improvement. Obviously the Rexam business was a result of some capital deployment in 2011. We’ll see the benefit of the full-year effect of that coming in 2012. And then consistent with the long, successful history here, as we deploy capital, that’s where kind of our upside to the returns comes. Chris Manuel – Wells Fargo: That’s perfect. Just wanted to make sure you weren’t signaling something much different about 2013. Thank you.

Thanks, Chris.

And we’ll take our next question from Adam Josephson with KeyBanc. Adam Josephson – KeyBanc: Thanks. Good morning, everyone.

Good morning.

Hi. Adam Josephson – KeyBanc: One question following up on Chris’ question about the preliminary 2013 guidance, I know you’re expecting modest accretion from Rexam, you’re expecting improvement in Plastics, you’re commercializing three plants in Europe at the end of the year, at the end of this year, and presumable you’re expecting a better U.S. edgy crop than this year. So just in that context, would it be reasonable to expect anything more than mid-single-digit earnings growth next year?

Well, look, first of all we’re way out over our skis here. We have not gone through our budgeting process and so that – we knew that you all would need to have some kind of sense for next year, so I believe the safe spot for all of us right now is just to think to the mid-single-digits. I think you can count on the fact we are going to try to find anything more that we can out there, but there are a lot of puts and takes to all of that. I mean the pack, for instance, was not great but it wasn’t the disaster it could have been. So there’s not a lot of climb on that. You’ve got, as we already talked about, you’ve got some customers who are out very hard trying to promote their brands, et cetera. It’s a little hard right at this moment to know how successful that will be and what that will mean around unit volumes. So I would say there’s a lot for us still to figure on it. So the right way to think about it right now I would say is mid-single-digits and let’s see what we can do. Adam Josephson – KeyBanc: Got it. Did conditions in Europe worsen sequentially for you guys?

No. I’ll speak to the can business and then I’ll let Adam speak to the Closures business, but essentially when we talk through the release about the impact of price realization, what we’re really talking about is the same point that we made during our Q2 earnings call, and that’s largely around what negotiations we made, particularly in Greece, to protect ourselves against a bad debt scenario if things really got bad there. So we gave up price in exchange for some stability and surety around the receivables collection. And that we’re just continuing, that negotiation happened earlier in the year and that’s just continuing but it’s not worsening on a sequential basis.

(Inaudible). Adam Josephson – KeyBanc: I’m sorry, go ahead.

Sorry, Adam. I’ll just jump in on Closures quickly. I’d say the same thing on Closures in Europe. It’s not been an incremental change, it’s simply that the market is shrinking a bit for the products that we sell and that’s why there’s some choppy water, as we’ve talked about before. But nothing different in Q3 than we’ve talked about in prior calls. Adam Josephson – KeyBanc: Right. Thanks for that clarification. So just a nit-picky one, in light of the guidance reduction, in that context?

Well, I think to the overall guidance I think what you’re hearing is that, and this isn’t the question you’re asking, but at the end of the day I think the pack as it came in just is not an overly robust pack, right. It’s better slightly than the prior year and it’s not the disaster that we were prepared that it could be. But it was in no way a robust recovery. So I think given that and the overall view of the economy, that’s where we’re at and that’s what you’re seeing in the guidance. That’s specifically related to Europe. Adam Josephson – KeyBanc: Okay. And just – Bob, last one on stock repurchase. You bought back stock in each of the first three quarters, average prices were between 41 and 44. To what extent are you buying back stock based on prevailing price? You’ve been buying it fairly consistently throughout the year so far.

I wouldn’t say that it’s necessarily we have any particular price target in mind. We’re just kind of being opportunistic with our cash year and will continue to do that. Adam Josephson – KeyBanc: Terrific. Thanks very much.

We’ll take our next question from Phil Gresh with JP Morgan. Phil Gresh – JP Morgan: Hey, good morning.

Hey, Phil. Phil Gresh – JP Morgan: I just wanted to follow-up on the 2013, just from a cash standpoint. Any preliminary thoughts on CapEx as well as perhaps any other cash obligations we might need to think about with respect to perhaps some of this restructuring, pension or anything else we should consider?

Yeah, there’s a lot in there. I’ll try and summarize it. I think – and I’ll reiterate what Tony said. We’re early in the budget phase here and we do have a number of things to consider around footprint moves that we may make, which will obviously have capital implications. And we’re looking at capital in this year that’s to the low end of the range. So if I were to take a quick feel for what I think about next year’s free cash flow, I’d probably put it in a similar range that we’re diving to for this year. Remember that this year’s got a pretty sizable benefit coming out of working capital. So I think – the net of that is, I’d say, we’d have to climb over that working capital benefit next year because it won’t reoccur. We’ll get some benefit from the investments that we made in the business, and then there could be some incremental cash used around restructuring activity or footprint activity, all netting to kind of a consistent free cash flow year-over-year. Phil Gresh – JP Morgan: Got it. That’s helpful. Thank you. And then just – the 120, the 160 you talked about with CapEx, is that inclusive of Rexam at this stage or we should be thinking about at kind of the range moving forward?

Yeah. I mean I guess that last time we moved that range up was with the Vogel & Noot acquisition. Quite honestly the Rexam business probably doesn’t require that much normal routine capital to cause us to move the needle that much. So I would say at least in the near term it’s probably a good range. Phil Gresh – JP Morgan: Got it. Okay. And then for the quarter, what was the impact of the production cuts?

You’re talking about the impact of the inventory? Phil Gresh – JP Morgan: Yeah, yeah. Yeah, kind of – the under-absorption.

Yeah, the under-absorption is probably somewhere in the neighborhood of $5 million to $6 million, and that’s coming largely in the Containers sector. Phil Gresh – JP Morgan: Got it. Okay. And so as we look ahead to next year then, assuming kind of a normal pack, then that’s something you should – you have to cross that sort of on the working capital front but you should be able to get that back potentially on the earnings side?

Yeah. That’s right. Phil Gresh – JP Morgan: Yup. Okay. And then just in the fourth quarter there’s $0.06 of one-time charges for just facility rationalizations I believe, or just rationalization charges in general. Could you just clarify what that’s for?

Yeah. I think that’s all just continued rationalization charges to things that we’ve already announced. So it’s going to be the Allentown facility and the Kingsburg facility. Phil Gresh – JP Morgan: Got it. Okay. And then last question is just breaking out the volumes on the Metal side between U.S. and Europe?

Yeah. So the food can volumes are up slightly, probably about 1%. The U.S. business is up a bit, that’s largely all related to the acquisition of the Nestlé PetCare volumes. So if you kind of strip that away and just look at what the Organic business did, we’re probably right in line with what the industry data would suggest. And then the European business is up as well, that’s coming kind of in two fronts. We had a better pack in Greece because the peach pack is pretty robust; and we got the benefit of the Öntas acquisition in Turkey. Phil Gresh – JP Morgan: Got it. Thank you. I’ll turn it over.

And we’ll now take our next question from Chip Dillon with Vertical Research Partners. Chip Dillon – Vertical Research Partners: Good morning.

Good morning, Chip.

Good morning. Chip Dillon – Vertical Research Partners: First of all just want to make sure I got this right, did – when you said the two – who – I’m sorry, $200 million to $250 million this year excluding the pension contribution, is that the free cash flow estimate before the dividend? Is that correct?

Yes. So I think the way we defined it is cash from operations less CapEx. Chip Dillon – Vertical Research Partners: Got you. And how much of a working capital squeeze roughly should we assume as helping you there?

I think we came into the year targeting to try and get somewhere between $40 million and $50 million out. Chip Dillon – Vertical Research Partners: Gotcha. Okay. And then just wanted to make sure I understand this, did you say the – any accretion from Rexam on 2013 was not part of that sort of mid-single-digits growth number you gave us for next year?

That’s right. Said differently, it’s incremental to that mid-single-digit improvement in the base business. Chip Dillon – Vertical Research Partners: Okay. And I guess maybe one way to look at it is let’s say the inventory swing you mentioned is about $5 million to $6 million, which is $0.05 or almost 2%. So that – maybe you could assume therefore that maybe if mid-single-digits is $0.05 you’re really saying $0.03 excluding Rexam. And I’m not trying to pin you down too much, and we certainly appreciate the early look, but I’m just wondering if – what else we should think about – just make sure I heard you correctly, that may help you beyond Rexam. Does this obviously not take into account the benefit that you could see from capital deployment, whether it’s share buy-backs or future acquisitions?

There are – in every year the surface of the water look awful calm, but there’s a lot of paddling going on underneath it. So, it’s – there are a lot of puts and takes. You’re absolutely right that the inventory as we just laid out would be a benefit. But there’s a lot of other things. You should really take it all in that we’re talking about mid-single-digits as our view ahead of our budget process. Chip Dillon – Vertical Research Partners: I see.

All we were trying to do is give a glimpse to the fact that we do expect our business to perform better, to operate better, that that should drive something, that there’s some marginal impact we expect from the Rexam business. And so, that’s the right way to think about it. But, yes, if we could get mid-single-digit and then add on the inventory on top, sure. But there will be something else negative that we haven’t thought about yet that will come in anyhow. Chip Dillon – Vertical Research Partners: Got you. Got you. And then on the – the last thing, just on the volume front, did – could you give us some view as to how much the volume in plastics was down, obviously excluding the Rexam contribution?

Sure. Before the Rexam business contribution we were down about 10% on unit volume. And that’s very consistent with where we thought we were going to be given that we had several customers planning those Q3 shutdowns as we had previously discussed. Chip Dillon – Vertical Research Partners: Okay. And then the one last one, if we saw a harvest – and you pick the year. Let’s say that was sort of robust, looking back a few years, I’m assuming you’re not assuming a robust harvest, but maybe just something that’s between this year’s number and – or maybe last year’s number – and what you would consider to be a robust year for 2013?

Yeah, that’s right. I think if you look back, the big pack year was in 2010. Chip Dillon – Vertical Research Partners: Yes.

And then obviously last year was a very poor pack, historically. This is a little bit better than that, but by no means normal. So as we look forward, we’d be forecasting off a pack that’s some slight improvement to where we are currently. Chip Dillon – Vertical Research Partners: Got you. And let me just ask you this, would certain indicators that may be part of the economy outside the U.S. at least is slowing a bit. Are you seeing any change in interest out there in terms of having things that you could – not your interest, but others that might be willing sellers and acquisition opportunities as we look into 2013 or is there really no change you’ve seen in terms of kind of what’s out there for – and available?

I would say that’s not a huge amount of change. There’s a lot of influences going on. There’s – if you’re talking about in the U.S., there’s sort of fears or tax changes, there’s low interest rates that drive up prices. There is, as you mentioned, global downturn. So I would say there’s a lot in play which translates to quite a few businesses that are out and available, but not unusual versus any other period. Chip Dillon – Vertical Research Partners: Got you. Okay. Thank you very much.

Thanks, Chip.

And we’ll take our next question from Scott Gaffner with Barclays Capital. Scott Gaffner – Barclays Capital: Good morning.

Good morning. Scott Gaffner – Barclays Capital: Just looking at the Metal Food Container business over in Europe, you mentioned some of the weakness over there. How much of the weakness there do you think was weather related versus underlying economic conditions? If you could also just talk a little regionally, I mean you mentioned Southern Europe, but what are you seeing maybe in Eastern Europe and in Western Europe?

Yeah, I would say that it’s – a lot of the weather issues were a little more Northern Europe, the worst of the weather – there’s clearly volatility. But yeah, I would say our numbers were a little less impacted by weather conditions and a little bit more about kind of general market. Now, there’s a little bit of overflow because as you get your western suppliers who aren’t necessarily happy in the volumes in their market, then how do they behave in the fringe zone, if you will. Do they pursue volume a little bit harder into the east, as an example. So I think it was more of those kind of influences. But again, it wasn’t – it really was set up at the beginning of the year that there was quite a bit of capacity out there. There was a willingness to hunt for that capacity and that impacted prices to a degree. Scott Gaffner – Barclays Capital: Okay. And then moving over, back over to North America, did you see any particular weakness by various food categories during the quarter and maybe by geographic region based on those food categories?

Yeah. Scott Gaffner – Barclays Capital: And then at what point in the quarter did you actually decide to go ahead and start pulling down inventory? What was the trigger that led you to cut back on production a little bit?

Yeah. I think if you look across the pack broadly, corn, there was a lot of consternation around the Midwest corn pack exiting Q2 and coming into the early part of Q3. The weather conditions probably didn’t get as bad as they could have gotten. The net of all is we ended up with a corn pack that probably came in at around 90%. So again, better than the prior year, not as good as we were originally expecting. Fruit, across the board, was probably pretty poor, particularly in the peach pack. Small quality fruit there led to declining volumes there. Tomatoes turned out to be okay at the end of the day there’s a lot of discussion around a big tomato pack. I think it’s important to kind of focus in on what part of tomatoes goes into cans, and that generally is pretty consistent in the flux of the pack, one side of the other kind of goes to the bulk paste market. So as we would’ve expected, tomatoes kind of turned to be okay. Then as you look at green beans, peas, and other vegetables, it’s kind of a lot of puts and takes. This just kind of got you to a, I’ll call it a general malaise across the pack. And so as we saw that kind of shaping up, we took the opportunity to pull back on the inventory. Really it was a planned reduction in the year so don’t go off thinking that it’s incremental from a working capital standpoint. We just got to a little bit sooner than we were originally looking to do in the fourth quarter. Scott Gaffner – Barclays Capital: Okay, and then just lastly I mean is there any in North America in particular, is there any part of the pack that got shifted into 4Q or is this all the packs in the year for the most part, any benefit that we’re going to get we’re?

Yeah, I would say that there’s anything meaningful that shifted on a comparative basis. Tomatoes moved a little bit into Q3 but of course they moved last year as well. So on a comparative basis there’s not much to think about shifting. Again, with the overall view that the pack is not as good as we would’ve looked for.

As a reminder, the pack last year actually ran a little late, so when you compare Q4 to Q4, there’ll actually be less pack in this Q4 than there was last Q4. Scott Gaffner – Barclays Capital: Great. Appreciate the color.

And we’ll take our next question for Mark Wilde with Deutsche Bank. Mark Wilde – Deutsche Bank: Good morning.

Hi, Mark.

Hey, Mark. Mark Wilde – Deutsche Bank: Is it possible in Plastics to get a sense of what Rexam may have added both on the top line and in terms of EBIT?

Sure. If you look at again, the one but the performance that we had with Rexam, the revenue line was roughly $8.5 million. Remember, this is the first month we’ve had them so from an operating income standpoint, there is a significant impact from purchase accounting. So the effect of purchase accounting essentially offset the earnings the business generated. I’ll answer your question now more in a go-forward basis, we would anticipate on a quarterly basis for that business, somewhere in the range of $2.5 million, $3 million of operating income once we have our depreciation and amortization applied to that business. So that’s what we’re expecting going forward. Mark Wilde – Deutsche Bank: Okay. And how happy are you right now with kind of performance in the overall legacy plastics business?

We’re feeling much better about the plastics business. I think we’ve continued to see operating improvements in that business. We’ve got a really good focus on exactly what we said a year ago, kind of blocking and tackling, meeting our customers’ needs. The team has done an excellent job; the business is done an excellent job in doing so. As we said on the last quarter call, we’re expecting when you take out resin and some of the other one time noise, about $6 million of operating income from that business. With all the noise of this quarter, you still came in about $6 million or $6 million to $7 million. So we’re feeling good about it, we know that it’s the first step in a longer term plan, and we expect continued improvement from that business on a go-forward basis. But this year, 2012, was absolutely the right step for that business for their profitable future. Mark Wilde – Deutsche Bank: Okay. And wouldn’t be fair to say in that business, Adam, going forward, that you can make further improvements in that legacy business to margins and then you’ll also get some marginal lift from the Rexam business?

I would say that’s absolutely true, yes. Mark Wilde – Deutsche Bank: Okay. Then question for you, Tony, can you just prioritize if we think about next year, stock repurchase, any further debt reduction and acquisitions? Just give us a broad sense of those different buckets?

Sure. I think we’ve always said, and I wouldn’t shift on it, that we still think the greatest value we can create for shareholders is finding good acquisitions that either build the franchises we have in place or offer us some other similar related franchise. So I would still put that on the front burner. But with that said, I’d say we did quite a bit of deployment of cash in that regard this year with the Rexam purchase. We did the Öntas purchase in Turkey, and so I feel like we’ve taken on a fair bit this year. That doesn’t mean there isn’t room for more but there is. So acquisitions still goes first. But I think clearly, there’s opportunity for return of capital to shareholders as well. And so we look at that as an important part of the overall equation. We’ve been doing that in small bites already this year. But I consider that an important part going forward as well. Mark Wilde – Deutsche Bank: Okay. And then further debt reduction?

Well, sure. We’ll do that as necessary. We already are running with that, the revolver. Generally we don’t need the revolver in the course of the year, so it’s really be doing kind of a permanent pay-down. So I think that’s just a little bit lower because it – when we talk about where we think optimal leverage is for the balance sheet I think we’re sitting very, very nicely in our range, maybe even a bit to the low end of the range of what we think is the right spot. So trying to delever the balance sheet and make it less productive for shareholders is not near the top of our list of priorities. Mark Wilde – Deutsche Bank: Okay. That’s really helpful. Thanks. And good luck in the fourth quarter.

Thank you.

We’ll take our next question from Albert Kabili with Credit Suisse. Al Kabili – Credit Suisse: Hi, thanks. Good morning, guys.

Good morning. Al Kabili – Credit Suisse: Just on the Plastics, follow-up on Mark’s question, are you at this point realizing all of the expected benefits from that Port Clinton closure you did a while back? And do you see opportunity for some incremental benefit from restructurings next year?

Sure. I think the reality is the Port Clinton closure and the project around moving that, those assets to other facilities didn’t go as well as we had planned, as we had originally talked about. So I don’t think that we have by any means reached the savings or the benefits in total that we had expected from that closure. We’re continuing to work on that every day. We are making improvements to the business on an ongoing basis, and we’re constantly reviewing what it takes to meet our customer needs and where best to do that from in our operating footprint. Al Kabili – Credit Suisse: Okay. Got it. And so is there any, from what you’ve realized thus far, is there any incremental benefit from productivity that spills out into 2013?

Absolutely. Again, I’d say this year has been a first step on our journey towards kind of returning our Plastics business back to the profitability that we would expect. And while we’ve made very good improvements, we certainly expect more. And again, a lot of that is going to come from operational improvements within the business.

Part of it, as we’ve stabilized the manufacturing operational side, we’ve increased available capacity to the market, and so really part of it is selling out now capacity that is installed and running to the right customers that fit the right future build and that’s sort of why we’re talking about this as more of a journey; there’s also a process here of really re-selecting the right customers in the right markets for our business and going in a very orderly fashion to build those businesses as we go forward. Al Kabili – Credit Suisse: Okay. All right. And along those lines, Tony, any thought as to goal three years out as to what you think this business can generate?

Sure. Well, it is hard, you’re right. All you can do is set goals and then go achieve them. What we’ve said is we think the business ought to get back to the kind of levels it was at five or six years ago before we got into some of the operational challenges, et cetera. And that is somewhere in the, rather than the low-single-digit EBIT levels, more to the upper-single-digits. I think if this business got back to a 10% the returns would be quite nice on it. That would be a good spot. In fact, we think that there’s more beyond that. But now you’re into a question where do we, how do we really hone the franchise and get even more focused on specific markets and specific capabilities. So I don’t want to – that’s not a three-year point. I think the three-year point is what I said, you get to the high-single-digit kind of EBIT margin levels, maybe 10%, and then the question is can you build a longer-term strategy from there. Al Kabili – Credit Suisse: Okay. And would that in your mind, Tony, require an appreciable volume lift to get back there? It’s quite a jump back to $56 million or so, $60 million of EBIT that this business used to generate and now it’s been – the competitive landscape has changed a bit since then too. So with that in your mind require quite a bit of volume lift and recovery? Or you just see what the opportunity is still on the productivity sides and sort of right – getting the right business mix that that’s something that you could do?

Actually, you’ve got the right, that’s kind of the three levers. I think it is – my guess is yes is the answer to your question, that there’s got to be some meaningful top line growth to cover the fixed costs that are there. But also there is opportunity to reduce some of those fixed costs and we absolutely have to and are doing that. And so that changes the balance where you could live with a little lower revenue. And then as with every business but particularly this business, you make pretty good returns on some customers and not very good returns on other customers and other pieces of the business, and so you’ve got to be diligent about honing and growing into the areas, that you provide enough value to your customer that you get well paid for it; and retrieving and withdrawing from the areas where you are not getting rewarded because you aren’t providing competitive value. And we’ve got all that work ahead of us. So the long way around, I think you will see top line growth, but it won’t just come from top line growth. Al Kabili – Credit Suisse: Okay. Okay. Very good. That’s helpful. And if we could just switch quickly over to the Metal food bit, could you just update us on the new facilities that you’re building? When – I know you’re thinking there’s still some start-up costs coming in the fourth quarter, when we might actually see a little bit of contribution coming from those facilities?

Sure. As you remember, we came into the year looking to commercialize four facilities. We have commercialized one of them and we’re continuing to work on the other three. We did see lower start-up costs in the quarter than we were expecting, but we – as we continue to go through the remaining three, the expectation right now is that we’ll see some incremental start-up costs in Q4 and a yet smaller amount in the first quarter of 2013, particularly related to the facility in the Ukraine. And then those businesses will be directed at what is essentially pack volume, so we’ll start to see the real benefit as we come into the growing season in those regions next year. Al Kabili – Credit Suisse: Okay. All right. That’s helpful. And in aggregate...

Hey, Al, can I do one thing, I don’t want to be criticized for letting anybody go too long, can I just put you back in the line to see if there’s anybody else coming? Al Kabili – Credit Suisse: Okay.

Just hang on, I don’t think there’ll many in line but we have been criticized for letting too many questions go on. Al Kabili – Credit Suisse: All right. No problem. Thank you.

Yeah. Thanks, Al.

(Operator Instructions) And we’ll now take your next question from Alex Ovshy with Goldman Sachs. Alex Ovshy – Goldman Sachs: Thanks. Good morning, guys.

Morning, Alex. Alex Ovshy – Goldman Sachs: On the food containers side and the Metal food side, would you like to give us a rough break out of how much of the EBIT now lies is in Europe and then maybe talk about the trends in EBIT by region to the Metal food on a year-over-year basis?

Yeah, we really don’t tend to break out. There’s a fair amount of sharing of transactions that goes on between the businesses, purchasing, et cetera, so I’m not sure the breakout is all that relevant. What was – the second part was what? Alex Ovshy – Goldman Sachs: Well, I wanted to get a sense of just the trend that EBIT in food cans by region, North America and Europe on a year-over-year basis. It’s related to the first question on expense.

Okay. I think it’s more applicable to look at them together. On the revenue line I think you have a good sense of what the size of the business that we acquired was. So I think you know on the revenue side. But it’s kind of – I’m not sure it’s going to be constructive for us to break down EBIT between the two. Alex Ovshy – Goldman Sachs: Okay. That’s fair. And then my next question is would you be able to parse out what the benefit of what the pass-through of lower resin costs was? Or I should say what the flow-through of lower resin costs in the Plastics business was in the quarter?

Sure. In Q3, again as we go back, we were expecting headwinds from resin and fortunately we experienced a benefit in resin. It was around $2 million, $2.5 million. Alex Ovshy – Goldman Sachs: Okay, thanks. I’ll turn it over. Thank you.

Thanks.

And we’ll now take a follow-up question from George Staphos with Bank of America Merrill Lynch. George Staphos – Bank of America Merrill Lynch: Hi, guys. A couple of quick ones, thanks for keeping the call moving along. Do we have to consider any larger contracts up for renewal in the next year? And on the subject of contracts, do you have any early look thus far, early look on what tin side pricing should do for you both in the U.S. and in Europe? And then one last follow on.

Sure. On the contracts, as you know, we typically negotiate them sometime ahead of renewal or at the end, term exit contract, that’s true. Most of our major customers with the exception of Campbell, we’ve been through that process in the last couple of years. So the one big one would be Campbell that’s out there end of 2013, that contract, and as you’d expect the negotiations are underway in that regard. George Staphos – Bank of America Merrill Lynch: So is that one of the vagaries that you’re managing against relative to the initial guidance that you’re providing for 2013?

No. George Staphos – Bank of America Merrill Lynch: I mean I think the obvious – okay.

No. George Staphos – Bank of America Merrill Lynch: I appreciate that. And then the last question on Campbell’s, Tony, as I recall, you’ve been in this business since just after the IPO. As they’re closing Sacramento as I recall, obviously your facilities were in that plant as well. But remind me if that’s now incorrect? And how do you run a facility as the customer is basically shutting down its side of the facility? And good luck, quarter.

Thanks, George. Yeah, we absolutely are in plant with Campbell in Sacramento, so we have a Sacramento can plant that runs right through the wall to Campbell’s ceiling. But of course, theoretically you could continue to stay there and lease property and run a can line from there; and that is a possibility that would take Campbell’s acceptance; that would depend on what the ultimate outcome is of Campbell’s facility in Sacramento. So that is all part of what’s being discussed. But as Bob has said, while we are in plant with Campbell, we do have a fair portion of our sales there are to third parties outside, so we do actually need capacity in that geographic area for those third party customers, and so that’s all part of why we’re looking at kind of all possibilities right now. George Staphos – Bank of America Merrill Lynch: Okay. Thank you.

All right. Thanks.

We’ll take our next question from Anthony Tuchnori with Citi. Anthony Tuchnori – Citi: Good morning.

Good morning. Anthony Tuchnori – Citi: You referenced results in metal containers being impacted by customer negotiations on credit terms in Greece, and I wonder as you look across your footprint in Southern Europe are there kind of additional actions you need to take to mitigate credit risk? Or maybe to ask it a different way, does the lower realized prices that you saw, should we really think of that as sort of a one-time impact? Or are there sort of additional actions that could potentially impact realized price going forward?

No. Well, I’ll speak to what we did in Greece in particular to start. Obviously that’s been a market that there’s been a lot of economic turmoil and a lot of consternation about what might happen both in terms of currency and whether or not it stays in the EU. So we were actively managing with our team over there to make sure that we didn’t get caught with either receivables or assets stuck in country that we could otherwise avoid. So as we thought about the potential consequences of that, making sure that we got paid both timely and in the right currency with some surety was important to us. As a consequence of not only us doing that but some of the other competitors that service that market kind of having a similar view, it put some pricing leverage in the hands of our customers. So ultimately, we took the trade of pricing down a little bit for that stability around collectability. That’s, in my view, that’s kind of a Greek-specific issue, but it’s no different than the way we think about broadly, we try and mitigate all risk that we know or can think of and try and manage around that. So I don’t view it as systemic across the broader business in any way. Anthony Tuchnori – Citi: Okay. Okay. That’s very helpful. And then just shifting to the Plastics business, you referenced volumes being down 10% on some customer downtime. I’m wondering, are you voluntarily shedding any unprofitable volumes as part of your restructuring in Plastics?

You know it is part of the journey that we talked about. We’re right at the outset of doing that. The first step was really stabilizing our operations and I think our team has done a very good job of doing that. Secondly, you’ve got to right-size the footprint as we’ve talked about. We had the Allentown closure; we’re also closing a facility in Woodstock, Illinois. So one of the next steps is moving onto kind of managing the mix of the business and our team has been focused on that and we’re kind of at the outset of that process. Anthony Tuchnori – Citi: Is it possible to quantify what the kind of volume impact could be into 4Q or the first half of next year?

No. I think the volume impact in 4Q will be very small, and next year again as we’re undergoing kind of our annual contract negotiations, that’s still very much up in the air. Anthony Tuchnori – Citi: Great. Thanks. I’ll turn it over.

And we’ll take a follow up question from Chip Dillon with Vertical Research Partners. Chip Dillon – Vertical Research Partners: I just missed this, I’m sorry. I think you mentioned the sales for the rest of the business was $8.5 million in the quarter. And what did you say about, you said a $3.5 million number. Was that the EBIT or the – what was the EBIT and what was that depreciation that you’ll be recognizing in that business?

What we said, Chip, was that the earnings in Q3 were basically offset by the purchase accounting that got applied to the business. On a go-forward basis we said about $2.5 million to $3 million of operating income on a quarterly basis for that business. Chip Dillon – Vertical Research Partners: Okay. On a quarterly basis. And what should we assume for the depreciation expense as part of that?

Yeah, I think we’re still trying to finalize what that’s going to look like through purchase accounting. So we’ll be able to give you a better view of that next quarter. Chip Dillon – Vertical Research Partners: Okay. But $2.5 million to $3 million at least of EBIT. Okay. Got you. Thank you.

We’ll take a follow up question from Alex Ovshy with Goldman Sachs. Alex Ovshy – Goldman Sachs: Thank you, buys. A couple of quick ones; on the plant closure in California, would you be able to give a little more color on how to think about the cost reduction benefit there? I mean you said 50 employees is the rule of thumb, about $100,000 per employee, so sort of a $5 million benefit next year?

I think your numbers are a little high. I think the total cost of that rationalization program is probably closer to $3 million. And as we would typically do, we view this as an investment with a return on it. So it would have a return that’s sub-three years. So I think your $5 million number is way high. Alex Ovshy – Goldman Sachs: Okay that’s helpful, Bob. And that I’m just curious if you have this data point, following the closure of the California plant if you go back in time throughout the company’s history, how many food can plants in North America have you closed? And what’s the current count of food plants there are still running right now?

Yeah, I don’t have an exact count of how many we closed, but I think if you look at our existing footprint, we’ve probably closed one for every two plants we have today. So it’s something that we’ve done a fair bit of, largely because of acquisition where we’ve been able to leverage our broader footprint. So it doesn’t really have anything to do with market shifts, it’s more about bringing in incremental volume through acquisitions and being able to leverage the broader footprint. In addition, and we talk about this quite a bit, we spend a lot of capital each year to improve our efficiencies; and as we become more efficient in those facilities that obviously opens capacity. So over time you get the opportunity to kind of take the fixed cost of the plant footprint out without impacting capacity. We don’t have a lot of excess capacity on the West Coast. I think that’s the view that’s emerging; we’ve got to be careful of that. Because of Campbell’s decision, there is a little bit but there’s not a lot of excess capacity. Alex Ovshy – Goldman Sachs: Okay. Thanks, guys.

Thanks.

And we’ll take a follow up question from George Staphos with Bank of America Merrill Lynch. George Staphos – Bank of America Merrill Lynch: Hi, guys. One last one, I let you get off too easy on the steel question earlier. The question I had, if you have an early look on tinplate thus far and if you can’t comment too specifically, should we at least expect that tinplate is a net neutral to you from a profit dollar standpoint? Or is that even too early to call? Could it be even a negative for you next year? Thanks. And again, good luck in the quarter.

Yeah, I think as we look at the way steel is setting up right now, George, the global indicators probably suggest that steel itself is probably heading lower. Well, now we all know that the indicators that kind of influence general steel costs are not necessarily indicative of what tinplate ultimately does, so I think we’ll have to see where that happens. As we look at kind of the U.S. market in particular, the market is down capacity with one particular supplier on the tinplate side, so that will put some pressure on capacity, if you will. All that said we take very seriously our fiduciary responsibility to negotiate hard and get the best price on tinplate that we can for our customers. I think all of that kind of says with the downward price pressure, we would expect that all that net to kind of a flattish, maybe a modest increase next year. But again, that’s a really early view. And as to what that means to our P&L remember, our contracts have passed through this, I think you’ve you got it right. But it’s a net neutral. But I don’t want to go too quick to past our view that we negotiate hard on behalf of our customers. George Staphos – Bank of America Merrill Lynch: And then your fiduciary responsibility to your customers, do you feel like you’ve got better ability perhaps than years past to locate and procure that tinplate globally now?

Yeah, I think just by nature of us being in those markets, we have access to other markets that maybe we didn’t have in the past. So it’s pretty obvious that we’re becoming a global steel – a global tinplate purchaser at this point. George Staphos – Bank of America Merrill Lynch: Sounds good. Thanks, guys.

All right. Thanks, George.

And gentlemen, it appears there are no further questions at this time. I’d like to turn the conference back to you for any additional or closing remarks.

Great. Thank you, everyone, for all your time on this somewhat protracted call. We look forward to talking about our year end results and more specifics on 2013 at the end of January. Thank you.

And ladies and gentlemen, this does conclude today’s conference call. Thank you for your participation.