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Crown Holdings Inc  (NYSE:CCK)
Q4 2018 Earnings Conference Call
Feb. 07, 2019, 9:00 a.m. ET

Contents:

Prepared Remarks:

Operator

Good morning and welcome to the Crown Holdings Fourth Quarter 2018 Conference Call. Your lines have been placed in a listen-only mode until the question-and-answer session. Please be advised that this conference is being recorded.

I would now like to turn the call over to Mr. Thomas Kelly, Senior Vice President and Chief Financial Officer. Sir, you may begin.

Thomas A. Kelly -- Senior Vice President and Chief Financial Officer

Thank you, Eric and good morning. With me on today's call is Tim Donahue, President and Chief Executive Officer. On this call as in the earnings release, we will be making a number of forward-looking statements. Actual results could vary materially from such statements. Additional information concerning factors that could cause actual results to vary is contained in the press release and in our SEC filings including our Form 10-K for 2017 and subsequent filings.

Earnings for the quarter were $0.40 per share compared to a loss of $0.67 in the prior year quarter. Comparable earnings per share were $1 in the quarter versus $0.84 in 2017.

Net sales grew 26% in 2018 versus 2017, primarily due to the acquisition of the Transit Packaging business. Increased beverage can volumes and the pass-through of higher material costs were offset by lower food can volumes and currency translation. Segment income in the quarter improved primarily due to the Signode acquisition, as higher global beverage can volumes were offset by lower European food can volumes and start-up costs at the two new beverage can plants in Europe.

Adjusted free cash flow of $636 million was a bit ahead of our guidance of $625 million. Year-end pro forma net leverage of 4.6 times as shown in the release was consistent with our guidance and we expect the ratio to decline by about half a turn each year going forward, as we use cash flows to delever.

As outlined in the release, we estimate the first quarter 2019 adjusted earnings of between $1 per share and $1.10 per share and full year adjusted earnings of between $5.20 per share and $5.40 per share at current exchange rates. These estimates include a headwind of approximately $53 million or 32% per share after tax and pension expense reported below income from operations, largely due to a decline in pension assets and an increase in discount rates compared to the prior year. These estimates also assume a full year tax rate of between 25% and 26%. We currently estimate 2019 full year adjusted free cash flow of approximately $775 million with between $400 million and $425 million in capital spending. We expect cash pension contributions in line with our 2018 contributions of $20 million.

With that, I'll turn the call over to Tim.

Timothy J. Donahue -- President and Chief Executive Officer

Thank you, Tom and good morning to everyone. As reflected in last night's earnings release and as Tom just discussed, we had a solid fourth quarter and full year 2018 performance. Higher beverage can shipments and better-than-expected results in the newly acquired Transit Packaging business offset weak European food can demand, the result of an historically poor harvest.

For the year, adjusted earnings increased 23% over 2017 and free cash flow at $636 million or $4.75 per share exceeded our earlier target. In response to increasing global demand for cans, we completed four new beverage projects in 2018, and we expect to commercialize the newly announced can plant in Brazil in late 2019. The deleveraging of the balance sheet following the Signode acquisition is on plan with net leverage at 4.6 times at the end of 2018. We have reaffirmed our 2019 free cash flow target of $775 million well above $5 per share. And we project that by the end of the year 2020, our leverage will be back to preacquisition levels in the mid-3s, which is only two years and nine months post the acquisition.

The US dollar gained momentum against most foreign currencies in the back half of 2018 with a comparative negative impact on sales and segment income in the fourth quarter of $53 million and $9 million respectively. And for your modeling purposes Q4 currency impacts by operating segment and segment income were as follows: Americas and Beverage -- Americas Beverage and European Beverage $2 million each; and European Food $5 million. At today's rates, currency will be a headwind in the first two quarters of '19 and will abate in the back half of the year.

As a reminder and as discussed previously double-digit increases in both tinplate steel and aluminum in 2018 were successfully passed through. Accordingly, as raw material cost increases are passed through on a one-for-one basis with no impact on absolute margins, there is a result and decline in percentage margins. For 2019, we expect tinplate steel to be up in the low 20s in the United States as US producers price just below the tariff. European steel prices are expected to reflect increases in the low- to mid-single-digits.

In Americas beverage overall unit volumes in the fourth quarter were up 5% with similar gains noted in both North and South American operations. Segment income in the quarter reflects in equal parts supplier metal issue, third-party in-sourcing in Brazil and elevated freight costs in North America. Looking ahead those items are behind us and we do not anticipate any impact from them in 2019. We do however expect to realize the benefits of improved pricing in North America.

Unit volumes in European Beverage were down 2% in the quarter, as demand in Saudi Arabia remains soft. Continental Europe was flat in the quarter, as we remain sold out and look forward to the new capacity coming online from the new factories in Italy and Spain. Income in the quarter was down as expected and reflects the ongoing softness in Saudi combined with the start-up costs in the new plants. In 2019, we expect the first quarter to reflect start-up costs in currency with gradual improvement throughout the year.

Fourth quarter demand in European Food continue to reflect the poor 2018 harvest, as customers continued to destock through the fourth quarter. Unit volumes were down 4% in the quarter and 6% for the year in line with the overall market. Lower shipments combined with lower production levels and foreign currency led to a decline in segment income during the fourth quarter. However, we are assuming a return to normal harvest levels in 2019. And as in European Beverage much of the currency headwind will be felt in the first two quarters of 2019.

Segment income in Asia Pacific advanced 11% both in the fourth quarter and for the full year. Unit volume demand increased 12% in Southeast Asia with China also advancing 4% in the quarter. In accordance with our strategy to align our efforts and resources to markets, which offer acceptable returns, we closed two beverage can facilities in China in the month of December. One of the lines has already been dismantled and is being prepared for relocation to Southeast Asia; the other will soon follow. China now only represents approximately $100 million of our more than $11 billion in global sales. Given the repositioning of assets from China to Southeast Asia during 2019, our income results in the Asia Pacific segment are expected to be consistent with 2018 levels. We do expect that in 2020, the segment will resume the income growth seen over the last several years.

Net sales in Transit Packaging increased 5% in the fourth quarter and 7% for the year. EBITDA advanced $20 million or 5% over 2017, as the business continues to benefit from its broad product offering across a global platform. Continued strong demand across the protective Asia and equipment businesses all contributed to the growth. A lot of moving parts for the Transit business, but overall sales growth can be summarized as follows: volume up 4% in the fourth quarter and 3% for the year; price mainly pass-throughs up 4% and 3% in the quarter and full year; and currency was a negative 3% in the quarter and was negligible for the year.

Although not included in the comparative foreign currency numbers we discussed earlier segment income in the Transit business experienced a $3 million headwind from currency in the fourth quarter and for the year, it was a $1 million tailwind. While performance in 2018 was strong, we remind you that we believe this is a business that will grow at GDP-type levels. So you should think 2% to 3% before currency effects. With modest capital requirements, this is a highly accretive cash flow business with a conversion rate at 90% or higher. We'd like to thank those of you who were able to join us for Analyst Day in December. Hopefully, you came away with a better appreciation of the business after meeting just a few of the many outstanding people, who deliver high-quality products and services to thousands of customers across numerous end markets. We know that without another public comp out there that it's unfamiliar and it may be a difficult business for many of you to wrap your arms around, but that doesn't detract from the fact that this is an excellent business and an excellent platform to create meaningful shareholder value into the future.

Income in non-reportables and corporate was level to the prior year for the quarter with aerosols and machinery both performing well. So in summary a productive year in 2018. Revenues and segment income advanced significantly on the back of an exciting new business. Since acquisition, the business continues to perform above expectations and we believe Transit Packaging will enhance our future earnings cash flow and shareholder value.

Cash flow was strong in 2018 and will be even stronger in 2019. In 2018, we completed several projects to expand global beverage can capacity and the future outlook for beverage cans is truly exciting. All signs currently point to a future, where the can will continue to win share with existing products and will be the package of choice for new product introductions, as consumers increasingly embrace the can as the responsible package choice for beverage applications. If government, NGOs and retailers among others are serious about limiting packaging waste and increasing recycling rates, we believe there is no reason why the food can should not follow close behind.

And then just before we open the call to questions, we ask that you please limit yourself to two initial questions, so that everybody will have a chance to ask their question. You're certainly welcome to jump back into the queue for a follow-up.

And with that Eric, we're now ready to take questions.

Questions and Answers:

Operator

Thank you. We will now begin the question-and-answer session. (Operator Instructions) Our first question comes from Gabe Hajde from Wells Fargo Securities. Your line is open.

Gabe Hajde -- Wells Fargo -- Analyst

Tim and Tom, good morning, gentlemen.

Thomas A. Kelly -- Senior Vice President and Chief Financial Officer

Good morning.

Timothy J. Donahue -- President and Chief Executive Officer

Good morning, Gabe.

Gabe Hajde -- Wells Fargo -- Analyst

I guess first question would be on European Food. And I guess can you size up for us maybe Tom the unabsorbed fixed overhead in the second half and then maybe where inventories are to start the year appreciating that we're potentially heading into sort of a rebound year in 2019? And then kind of a follow-on. How might the -- the normalized production rates impact earnings cadence over the year in that segment?

Timothy J. Donahue -- President and Chief Executive Officer

So let me -- let me take that Gabe. I think that at the end of the year here inventory levels are reflective of where we would like them at the end of any given year regardless of what the past harvest was. It's really a -- January 1 to December 31 business and projecting forward a normal harvest we believe, we have appropriate levels of inventory at this point having brought the inventories down from lower production levels understanding that beginning some time in Q3, through the end of Q3 in October, when we talked to you, we knew that not only was the third quarter demand soft that the fourth quarter would remain soft, as customers destock. They're not filling from bulk. There is not as much product in bulk. So there's -- there's not the filling required.

So in the fourth quarter, you've got actual shipments down 4% for the year or 6% so that's fairly significant that's a lot of your profit dollars there. And I think currency we said was about $5 million in the quarter for food. And then obviously with much lower production levels to get the inventories to appropriate levels that makes up the balance try to stay away from too many specifics in dollar terms. But given a more normal harvest, we expect that the third quarter of 2019 will show notable improvement over 2018.

Gabe Hajde -- Wells Fargo -- Analyst

Okay. And then can you help us, I guess the Europe beverage and I know that these are our models and not yours, but was a bit lighter than what we were looking for, I was looking for. The start-up costs, I kind of think about those as $2 million to $3 million a facility. Is there anything about that that wouldn't be accurate? Or are there a little bit more for some reason?

Timothy J. Donahue -- President and Chief Executive Officer

No, I mean, the one facility is big. So you might want to think about it a little bit more than that, but that's right. I think that we like you, we were probably a bit disappointed with the European Beverage results. I'll characterize our assessment of the fourth quarter by segment real quick and then I'll come back to European beverage for you Gabe, just so we answer the question.

I think Americas Beverage more or less came in on top of where we expected. Both European Beverage and food were a little bit lighter than we expected. Asia and Transit were stronger than we expected. And so but -- but we like you, we were disappointed. I think one of the challenges, we currently have in European beverages were sold out. And as you know volume cures a lot of the other issues. So there are always a number of issues in any business. There's price compression. There's other cost. You have a small -- generally the fourth quarter's a very small quarter in European Beverage just given the weather in the northern hemisphere especially in the -- some of the European countries.

So you put start-up cost and currency into a fourth quarter has a much bigger impact. And then let's not forget the Middle East, where we're probably -- the Middle East was, I think down, at segment income we were probably down $35 million, $36 million for the year, and perhaps a little bit more than 25% of that was in the fourth quarter. But we desperately need the new capacity from the new facilities because we are sold out in Europe, and we're missing opportunity that we don't otherwise want to miss. And so we'll bring those lines up. But yeah, we were -- we were disappointed in the performance like you are.

Gabe Hajde -- Wells Fargo -- Analyst

Thanks for all the color, Tim.

Timothy J. Donahue -- President and Chief Executive Officer

You're welcome.

Operator

Our next question comes from Anthony Pettinari, Citigroup. Your line is now open.

Anthony Pettinari -- Citigroup -- Analyst

Good morning.

Timothy J. Donahue -- President and Chief Executive Officer

Good morning.

Anthony Pettinari -- Citigroup -- Analyst

In Americas you talked about the headwinds from the metal supplier issue and freight. And I was wondering if it's possible to quantify the hit that won't repeat in 2019. And then you talked about expecting the benefit from improved pricing in North America. Understanding, you're probably pretty limited in what you can say. Is it possible to give any sense of a time frame over which these pricing benefits could flow through?

Timothy J. Donahue -- President and Chief Executive Officer

So I think what I said in the prepared remarks if segment income was down $10 million in the quarter, it reflected in equal parts the three issues I discussed. So $3 million to $4 million each between the metal issue that I think everybody is well aware of. We have the same issue at a much smaller scale. We elevated freight and then we -- until we got a new end module installed and up and running in late fourth quarter in Brazil, we were sourcing ends from a third party. So we -- we kind of missed out on the profits on the ends for those can sales in the fourth quarter. But the module's up and running, so we don't expect that next year.

As for pricing for those customers, where contracts have been renewed i.e. repriced those benefits will begin to accrue from January 1st, 2019 probably represents on the order of 20% to 25% of the portfolio. And obviously we're endeavoring to try to make sure that was not a one-time effort by us, and we continue to realize those benefits as future contracts are renewed for 2020 and forward.

Anthony Pettinari -- Citigroup -- Analyst

Okay. That's very helpful. And then in Asia Pac, is it possible to give any more color in terms of the timeline and the costs associated with relocating? I think you said two assets to Southeast Asia.

Timothy J. Donahue -- President and Chief Executive Officer

Yeah. So two -- two fairly large can lines. The one line, it should be moving I think it's already created. It should be moving anytime now. That will go to Vietnam. The other line we'll dismantle and create that and move that over the next couple of months. The costs I guess, we did -- it's not -- it's not clear in the release what the costs were. What were they like $15 million or $16 million just...

Thomas A. Kelly -- Senior Vice President and Chief Financial Officer

You're talking about the impairment?

Timothy J. Donahue -- President and Chief Executive Officer

The Chinese. Yeah.

Thomas A. Kelly -- Senior Vice President and Chief Financial Officer

Yeah. I think he's talking about the ongoing.

Timothy J. Donahue -- President and Chief Executive Officer

I'm not sure what your question was then Anthony?

Thomas A. Kelly -- Senior Vice President and Chief Financial Officer

You're talking about operationally or asset impairment.

Anthony Pettinari -- Citigroup -- Analyst

Yeah, operationally.

Timothy J. Donahue -- President and Chief Executive Officer

Oh, operationally. So I think what's going to happen is, we're essentially cutting the Chinese business in half. So you should think of a number and segment income number in the low double digits that doesn't repeat next year that will be made up by Southeast Asian growth, but it just keeps us flat year-on-year. And then obviously, as we look forward as those lines get placed into Southeast Asia, we look forward to resuming the income growth across the entire segment I'm sorry. I thought you were looking for the cost to move the lines and write-off the equipment, it doesn't get moved.

Anthony Pettinari -- Citigroup -- Analyst

No, no. I -- that's very helpful. I'll turn it over.

Timothy J. Donahue -- President and Chief Executive Officer

Thank you.

Operator

Our next question comes from Scott Gaffner, Barclays. Your line is open.

Scott Gaffner -- Barclays -- Analyst

Thanks. Good morning, guys.

Timothy J. Donahue -- President and Chief Executive Officer

Good morning, Scott.

Scott Gaffner -- Barclays -- Analyst

Tim can we just go back to the North American segment, sorry the Americas segment for a second focusing on North America? Can you talk about recovery on some of the transit sorry the freight rates from 2018 with your existing contracts? How is that going to play out? And then the second thing is just on the repricing of the contracts. Were you able to get anything around better pass-through mechanisms just given that 2018 pass-through on freight wasn't necessarily as tight as you would like?

Timothy J. Donahue -- President and Chief Executive Officer

Well, I mean historically, the mechanism for recovering non-metal costs, which includes freight and a lot of other things was just a PPI multiplier. So there was no separate mechanism. I can say that with a lot of comfort we don't expect freight cost to be higher in '19 than they were in 18. Certainly, we are targeting a number that's lower. But it's perhaps too early just given we don't know exactly what customer -- changes to customer order patterns and our freight requirements will be. But I'll -- without giving you too much detail on contracts, we didn't look just to improve pricing. We look to improve a number of items within contracts because clearly the balance of power have shifted to a point that it was not sustainable between customers and can suppliers.

Scott Gaffner -- Barclays -- Analyst

Okay. And when we look at the forecast for 2019 does that include the full benefit of the rework and pricing? Or is that something we should expect to sort of elevate, as we get into the life of this new business?

Timothy J. Donahue -- President and Chief Executive Officer

Well, I think what we said was 20% to 25% of the contracts were renewed or/repriced at the end of '18 for '19. So you should expect to see improvement in our Americas Beverage segment. As it relates to the North American beverage business and the pricing environment, it only reflects 20% to 25% of the contracts.

Scott Gaffner -- Barclays -- Analyst

Okay. Thanks, Tim.

Timothy J. Donahue -- President and Chief Executive Officer

Thank you.

Operator

Our next question comes from Chip Dillon, Vertical Research. Your line is open.

Salvator Tiano -- Vertical Research -- Analyst

Yeah. This is Salvator Tiano filling in for Chip. How are you?

Timothy J. Donahue -- President and Chief Executive Officer

Good morning.

Salvator Tiano -- Vertical Research -- Analyst

Great. So firstly can you provide us some details about where do you expect minority interest to be both as an expense and also dividends payable to your partners say in 2019?

Thomas A. Kelly -- Senior Vice President and Chief Financial Officer

Yeah. So on the dividend side for 2019, I'd say about $70 million to $75 million. And on the income side probably pretty close to this year at about $90 million.

Salvator Tiano -- Vertical Research -- Analyst

Okay, perfect. And then as we look into the -- to next year's guidance, you reiterated the contract essentially we -- we're aware for, I think a little bit over a year. Has there however any moving parts change because it seems to us, we know you have the pension headwind, but also it seems like EPS even adjusted for that is not growing as much. And besides the CapEx I guess, which is growing lower, are there any other moving parts that allow you to keep this free cash flow number?

Timothy J. Donahue -- President and Chief Executive Officer

Well that the pension is non-cash as Tom mentioned and there's always moving parts, right. It's a -- it's an $11 billion company with 200 and some factories globally. And so from the time we gave you the initial guidance currency has moved against us. But we increasingly gained confidence in our ability to appropriately price beverage can contracts in North America and we're going to realize that in 2019. So there's just a couple of items there. But there are a whole lot of things that go into it.

Salvator Tiano -- Vertical Research -- Analyst

Okay. Thanks.

Timothy J. Donahue -- President and Chief Executive Officer

Thank you.

Salvator Tiano -- Vertical Research -- Analyst

Thank you.

Operator

Our next question comes from Ghansham Panjabi, R.W. Baird. Your line is open.

Ghansham Panjabi -- R W. Baird -- Analyst

Hi, guys. Good morning.

Timothy J. Donahue -- President and Chief Executive Officer

Good morning, Ghansham.

Ghansham Panjabi -- R W. Baird -- Analyst

Good morning, Tim. So I guess going back to European Beverage, you've mentioned a couple of times, you're sold out in the region. Can you just give us characterization of which sub regions within Europe you're seeing incremental growth, where you're capacity constrained? And then over time, do you envision repurposing assets away from the Middle East just like China toward Southeast Asia perhaps toward Europe because I can't remember the last time, the Middle East was actually a positive variance year-over-year?

Timothy J. Donahue -- President and Chief Executive Officer

Yeah, so it's been -- your second point is correct. It's been -- it's been several years since the Middle East was a positive move. I think we'll -- the volume environment in the Middle East for Crown at least will be flatter plus or minus 1% in '19 versus '18. Unlikely, we repurpose any assets from the Middle East to other regions, the equipment is quite old and it was when it was installed '80s '90s and then even in the mid-2000s, it was used equipment from other facilities around the world in contrast to the two lines we're taking out of China to Southeast Asia. They're brand-new lines with five or six years old. So that's the Middle East.

I think as you look at Continental Europe, the market's growing 4% to 5% on a base of 65 billion units to 70 billion units. So that's 2.5 billion units to 3 three billion units. And here we describe that as a multi-size can line. You probably need somewhere between three and four can lines, as an industry to support that. And we're -- we just -- it just, I would say it this way that the capacity coming online in '19 Italy and Spain for Crown, it's Crown's opportunity or Crown's turn and some others have brought capacity on over the last year or two at which time, it was their turn.

But I think if you look at the UK, you look at Spain, you look at Turkey, you look at some of the other Mediterranean areas, there is growth there. We're not very prevalent in up through the middle of the Continent. We don't have any operations in Germany. We have the one in Slovakia, and the one in Eastern France. But having said that there's been some notable growth albeit off very low basis in Germany. So I think the growth in Europe is broad-based and you're well aware of Crown and some of the other's views and convictions around sustainability. So I think we're going to see that for some time to come.

Ghansham Panjabi -- R W. Baird -- Analyst

That's super helpful. And then just second question going back to -- going toward I guess, Transit Packaging, which obviously had a very strong year overall under your ownership. Just given some of the choppy macro across Europe and China, did you notice any customer order pattern shift in 4Q? Maybe give us a characterization of how 1Q is progressing so far. And also specific to the equipment versus the consumables what trends you're seeing there? Thanks so much.

Timothy J. Donahue -- President and Chief Executive Officer

You're welcome. So I think this is a question we ask all the time. And as I said in the prepared remarks, we know you're not very familiar with the business and let's be honest. We're gaining our familiarity with the business. So we're asking these questions almost on a daily basis. The backlog that we saw for equipment tools at the end of '18 was actually stronger than at the end of '17 and we haven't seen any -- any slowdown in -- on the consumable side. In fact, the protective continues to do well and strapping continues to do well in terms of volume. So things have been choppy.

But I think we're not seeing that yet in the macro environment. I said to somebody the other day, I'm not an economist. And Ghansham, I know you're a Ph.D, so you probably have a lot more knowledge in this. I'm not an economist. But it's hard to envision a broad-based economic slowdown especially in the United States given the real positive jobs reports we continue to see. So we obviously are looking at it going forward. I -- our understanding of the business that we own. We're gaining our understanding as it is an extremely strong and resilient business that generates a lot of cash flow.

We're going to continue to delever. If and when, there's a pullback in the economy, it'll happen when Crown's at much lower leverage levels. And obviously, as global economy expand this is a business that will participate in that expansion. But the business is very different. I spent the better part of the back half of January in India pretty large Indian business that they've build up over the last decade. As you know, it's about 1 billion -- 1.3 billion people with a GDP growth rate of 6% to 7%. So enormous organic growth opportunities in that market, which temper any downturn in global steel that the business experienced perhaps 10 years ago. So but we haven't seen any impact of a wobbling of any macroeconomic concerns. So I think we're pretty positive, as we look through 2019 sitting here today.

Ghansham Panjabi -- R W. Baird -- Analyst

Perfect. Thank you.

Timothy J. Donahue -- President and Chief Executive Officer

You're welcome.

Operator

Our next question comes from Arun Viswanathan of RBC Capital Markets. Your line is open.

Arun Viswanathan -- RBC Capital Markets -- Analyst

Hey, hi, guys. Good morning. Just a question on beverage cans. So I guess, continued relatively robust growth globally it looks like you're tracking at the upper end of maybe a 2% to 4% range. Maybe you can just give us your outlook on if that would continue. And then if so in the Americas, where do you expect Nichols to get to from a utilization standpoint end of year? And is there a need to add anymore non 12-ounce or even 12-ounce capacity at some point? Thanks.

Timothy J. Donahue -- President and Chief Executive Officer

Yeah. So I think as we've said and others have said, we were fairly bullish on the future for beverage cans globally not just sustainability certainly is one thing, but it is a -- it is a superior package to all other (ph) packages do to protect the integrity of the product inside. I think specifically to North America, Nichols performing very well over the last several months of 2018. We'll have some incremental capacity gains in Nichols through the first six months to seven months and -- but we're largely sold out in Nichols.

So Nichols operating very well. We're in the process now of always balancing how much capital we want to invest for potential growth or our representative share of growth market that looks like it's growing especially for new products and especially can sizes. We're trying to ensure that we get adequate returns for putting new capital in. So we continue to look at new capacity in North America, but we'll try to do that in a way in which it generates the appropriate returns.

Arun Viswanathan -- RBC Capital Markets -- Analyst

Okay. Thanks. And just on the price cost side. I think you noted that you do expect freight to be lower in 2019. Just wanted to understand your confidence around that and what drives you to that belief. I mean would it be better to be more conservative and assume a higher freight cost, just given the last couple of years? And then also maybe just give us some view on inflationary expectations outside of North America as well? Thanks.

Timothy J. Donahue -- President and Chief Executive Officer

So I think in 2018 a combination of perhaps our customers not fully understanding consumer patterns and some of their markets and frankly, Crown not understanding our customers requirements, we found ourselves caught out and oversold throughout much of the year, which led to -- we're exacerbated a freight situation in which there were higher rates generally with excess freight and lanes in which we had a buyer spot.

So we've endeavored to reposition as part of the contract renewals our commitments to customers such that we don't experience and they don't experience the large increase in freight that we both had in 2018. So I -- we're pretty confident on that. I don't really see the need to get extra conservative and tell you that freight is going to be higher. I just don't think it's going to happen. Globally, I think there's a little bit of inflation everywhere. But generally inflation is good for us. It's -- people want more and to get more, you need a little bit of inflation. So it's incumbent upon us to make sure we recover that and push the business forward.

Arun Viswanathan -- RBC Capital Markets -- Analyst

And just one last one if I may on working capital. Is there a chance that that would be potentially a negative if metal supply issues extend for a long time? Or and any offsets that you could also dig into to keep the free cash flow number intact? Or how should we think about that? Thanks.

Timothy J. Donahue -- President and Chief Executive Officer

Well, the metal -- the metal supply issue is resolved, and we're not modeling any increase or decrease in working capital. It's generally flat in '19 versus '18, which implies in a growing business that we are taking working capital out as a percentage across the system, but in -- on the cash flow statement it's flat.

Arun Viswanathan -- RBC Capital Markets -- Analyst

Thanks.

Timothy J. Donahue -- President and Chief Executive Officer

Thank you.

Operator

Our next question comes from Debbie Jones, Deutsche Bank. Your line is open.

Debbie Jones -- Deutsche Bank -- Analyst

Hi, good morning.

Timothy J. Donahue -- President and Chief Executive Officer

Good morning, Debbie.

Debbie Jones -- Deutsche Bank -- Analyst

Tim, I wanted to ask just broadly speaking well it seems like there's an opportunity for the growth rate for cans to be more than what it has been in recent years, which has been I think about 2% or 3%. Could you comment on that number one. And then two, talk about from a regional basis, I think there's a couple you haven't mentioned Brazil, Southeast Asia. How you expect to kind of be (ph)growth ahead of the industry, which is my assumption. I don't know, if you would agree that in 2019 and 2020?

Timothy J. Donahue -- President and Chief Executive Officer

So I think, you mentioned or somebody mentioned the growth rate of 2% to 4%. I think consistently over the last four years or five years, we've probably been at the high end of that or even higher than the market on a global basis, largely due to the footprint in Southeast Asia or Turkey or Brazil. I think growth rates are certainly different by region.

We expect -- we'll expect Southeast Asia or certainly the countries, we operate in Southeast Asia, which is much of Southeast Asia to be in the high single-digits. China is a non-issue any longer, so don't really need to talk about it. Europe, I think Europe is -- we feel pretty firm that Europe's going to be in that 2% to 3% to 4% off a pretty big base. North America remains to be seen. We are -- we'll be up a little bit, as I said early in North America just as Nichols for the first six months or seven months is at full production as it was at the end of last year. So but other than that we're more or less sold out in North America. So we're going to -- we'll have a little bit of growth in North America in the order of 1% to 2%. But I don't have a good handle on why the market, why the overall market in North America should be more than that.

It's -- certainly there are new products being introduced in beverage and we're all excited about that, and I think it's going to continue to happen and we're going to see some renewed growth in North American beverage, but it's off a very big base. But even a small percentage off a big base is very positive for the industry. And then South America, the market continues to grow. There's capacity being introduced, but it'll absorb that capacity in rapid fashion. Specific to South America, we're talking Brazil only.

But in Brazil no reason why mid -- mid-single digits and we had a -- I think we had a market this year in Brazil, it was up 8% or 9%. and we were probably close to that. And I think the mid-single digits more likely safer number to project for the future in Brazil and we might be a touch below that in '19 just because we got to get some new capacity up. Again, we're -- we're a little capacity constrained to go any harder than that until we get the new plant running.

Debbie Jones -- Deutsche Bank -- Analyst

Okay. And then as a follow-up. You mentioned a couple of times the need for new capacity, in certain areas of your business. And my assumption is just looking at your CapEx budget that you're doing a lot of shifting of machines, just as you highlighted in Asia. I mean is that kind of the way that you're going to manage this need for the next year or two? Or do you envision any kind of bigger need to add greenfield facilities?

Timothy J. Donahue -- President and Chief Executive Officer

Well, I think we got a capital budget of $400 million to $425 million, which implies close to $400 million for the can businesses alone, which isn't too far different from what we spent an average over the last four -- four years, five years. I think that with the exception of repositioning Chinese assets to Vietnam and Southeast Asia that's isolated to that. Everything else will be new equipment that we buy from equipment suppliers or from our own equipment supplier. And it may envision new factories and/or speed ups or new lines added to existing factories.

Debbie Jones -- Deutsche Bank -- Analyst

Okay. Thanks, Tim. I'll turn it over.

Timothy J. Donahue -- President and Chief Executive Officer

Thank you.

Operator

Our next question comes from Tyler Langton, JPMorgan. Your line is now open.

Tyler Langton -- JPMorgan -- Analyst

Hey, good morning, Tim and Tom.

Timothy J. Donahue -- President and Chief Executive Officer

Good morning.

Thomas A. Kelly -- Senior Vice President and Chief Financial Officer

Good morning.

Tyler Langton -- JPMorgan -- Analyst

Just on, I don't know if you can comment, but just on the -- the 20% to 25% of contracts that renewed in North America for 2019. Are those in general I guess, representative in terms of customer size of the sort of -- of your entire portfolio? If you can comment on that.

Timothy J. Donahue -- President and Chief Executive Officer

Yeah, I prefer not to, right. It's the universe of customers in North American beverage is not very large. I make a comment there, you can start to figure out who we're talking about.

Tyler Langton -- JPMorgan -- Analyst

Okay. No, understand. And then just on Signode, the Americas on the -- the cost side, I know in Q4 you mentioned the issue, there was over $10 million headwind. Do you have a rough sense just for '18 sort of the impact of buying cans, higher freight and sort of all those issues, what's sort of the total pressure on 2018 roughly was?

Timothy J. Donahue -- President and Chief Executive Officer

Not -- I'll tell you not insignificant. But I -- off the top of my head I don't have it.

Tyler Langton -- JPMorgan -- Analyst

Got you. Okay. And then just a final question, I guess Tom for -- corporate expense for '19. Just any sort of rough guidance?

Thomas A. Kelly -- Senior Vice President and Chief Financial Officer

Yeah. I'd say about $150 million.

Tyler Langton -- JPMorgan -- Analyst

Got you. Okay. Thanks so much.

Timothy J. Donahue -- President and Chief Executive Officer

Thank you.

Operator

Our next question comes from Mark Wilde of Bank of Montreal. Your line is open.

Mark Wilde -- Bank of Montreal -- Analyst

Thanks. Good morning, Tim. Good morning, Tom.

Thomas A. Kelly -- Senior Vice President and Chief Financial Officer

Good morning.

Timothy J. Donahue -- President and Chief Executive Officer

Good morning.

Mark Wilde -- Bank of Montreal -- Analyst

Tim, I wonder if we could just come back on the North American kind of capacity situation. Do you expect that you'll be sold out for the full year in '19?

Timothy J. Donahue -- President and Chief Executive Officer

Yes, we'll be sold out, but we'll do a better job. I think we've already done a better job planning for the year and discussions with our customers such that we're not oversold and we're not going to incur third-party sourcing costs and/or the excess freight we had in 2018.

Mark Wilde -- Bank of Montreal -- Analyst

Okay. And I think you've talked about sort of how you're kind of thinking about sort of incremental capital here. But I'm just -- I'm conscious that you got a hold for a third line up there at Nichols. Can you just talk about that anymore?

Timothy J. Donahue -- President and Chief Executive Officer

That's the danger of letting you walk through our factories. No, I think at this time nothing to say right? I think we're progressing through a number of discussions with customers, as it relates appropriate price points for the future and we'll reevaluate the need for more capacity in whatever location that we think is needed.

Mark Wilde -- Bank of Montreal -- Analyst

Okay. That's fair enough. And just one follow-on. Can you talk a little bit about how the business down in Mexico is performing?

Timothy J. Donahue -- President and Chief Executive Officer

I would characterize the -- some of the headwinds we had this year in the glass business in Mexico, the utility company continues to raise gas prices. I think one section of the country, where we have the large glass factory, there's a shortage of gas. So they're raising gas prices to industrial users. So we do recover that by a formula on a 1-year lag basis. So we'll get some of that back subject to them not raising the price again, but that's all contractually, we get it back, it just lags.

And then on the can side, businesses is strong. We have a very large firm contract with a customer. From year-to-year, we may over index against that contract and they pull back in the following year to the contract level, but more or less it's very firm.

Mark Wilde -- Bank of Montreal -- Analyst

Okay. That's helpful. I'll turn it over.

Timothy J. Donahue -- President and Chief Executive Officer

Thank you.

Operator

Our next question comes from George Staphos, Bank of America-Merrill Lynch. Your line is open.

George Staphos -- Bank of America-Merrill Lynch -- Analyst

Thanks. Hi, guys. Good morning. Thanks for letting me on. Thanks for all the details. I wanted to go back over North American beverage can. And Tim, I know it's always easier to talk about the future or as I said (ph) differently, I know it's better typically to be more conservative in terms of outlook on a promise and over deliver. We haven't seen these kinds of growth rates in North America. I think you said you're up mid-single, recognizing there were some capacity growth that was allowing you to do that in a very long time 1980s type of timeframe.

Now, you have new beverages growing in terms of consumption, which is first time you've had in a while. Cans have been suffering with CSD declines and beer declines for a while and you have sustainability. Why can't the growth rate in your view be better than 1% to 2% in North America overtime? And how would you tie the merits that you've talked about for the can in terms of sustainability, better protection, innovation through (ph) capacity and terms you know, like so that maybe you do grow in the right way more than 1% to 2%? How would you -- how would you I guess, think about that?

Timothy J. Donahue -- President and Chief Executive Officer

Well, I don't disagree with anything you just said George other than the industry grew at 0.6% in 2018 and so it is a -- it's also a big base, right? It's 95 billion unit to 100 billion unit base. So it's just -- the growth -- the rate of growth is always weighed down by the base. But at 0.6% coming off a number of years, we're -- most recently, we were flattish or down 1% to 2% or a couple of years, we were down 2% to 3%. It's -- so one year doesn't make a trend. I think everything you said is correct. I think there is opportunity.

George Staphos -- Bank of America-Merrill Lynch -- Analyst

That might be a first time, Tim.

Timothy J. Donahue -- President and Chief Executive Officer

No, no, George. Come on, you know, how I feel about you. You're the Grand Poobah let's be clear. But I think it's just too early, right? I agree with everything you said about prospectively looking forward. If we're really serious as a society about the environment and about reuse and recycling, all the positive benefits of the can, as you said to protect the contents of the container, but we'll see where it takes us. I think we and others are for the first time, we're feeling very positive. We've always felt very positive about the product we offer to our customers. I think we're feeling more confident that we're going to be appropriately compensated for that and that there's going to be a growth level that as you say, we haven't seen since the Cola wars of the mid-'80s. So I just -- I agree with you George. I'm just -- you just not going to get me to say more than 1% to 2% right now.

George Staphos -- Bank of America-Merrill Lynch -- Analyst

Okay. Understood. Maybe attack on to that and then one question on Signode and I'll turn it over. Traditionally a lot of the customer base had its own embedded self make on plastic. Do you find if it was a barrier to can growth in the past that maybe it's less of a barrier now? And then related to Signode obviously you had good volumes, you have a good backlog, I think the EBIT year-on-year was down. Can you give us perhaps a little bit of the moving parts behind that? And is it Signode any part of the big increase in the pension expense? Thanks, guys and good luck in the quarter.

Timothy J. Donahue -- President and Chief Executive Officer

So the -- you're talking fourth quarter on Signode. So Signode was down two in the fourth quarter at EBIT. One of its depreciation, which is the step up accounting. So we generally like to talk about EBITDA right now until we cycle through the -- a full year of the accounting impacts; and then there was $3 million of currency. So ex-currency and the acquisition accounting, it's more or less up $2 million roughly in the quarter.

No the pension impact that Tom mentioned earlier nothing to do with Signode. The pension liabilities acquired with Signode in total George on the order of $50 million, I think liabilities, which is peanuts when you consider the old can pension. So this is -- this is a business that's largely free of legacy liabilities and really well positioned for the future. Did I miss any other part of the question?

George Staphos -- Bank of America-Merrill Lynch -- Analyst

Just the impact of self make in terms of cans growth?

Timothy J. Donahue -- President and Chief Executive Officer

Sorry -- I'm sorry. Yeah, well like, you know like, they have -- they have filling assets -- well, they -- they have filling assets that are set up to fill certain products and plants that are set up to fill certain products, and some of those products they manufacture themselves, and that will take some time for them to want to change if they want to change that at all. But I think we're more likely to see new product introductions in the can and marginally see can growth in existing products. Until one or two things happens in my mind, those filling assets or bottle making assets need to be replaced and they reevaluate how they want to spend their capital or there's some larger movement environmentally. Notwithstanding the petrochemical industry is going to do their best to try to come up with recyclable plastics or at least convince the regulators that we promise you, we'll get to a recycle rate of 25% by the year 2030 and blah, blah, blah give us some more time, we'll get there. And we all know that by 2030, they won't get there. So we'll see how that manifests itself over time.

George Staphos -- Bank of America-Merrill Lynch -- Analyst

Okay. Thank you very much.

Timothy J. Donahue -- President and Chief Executive Officer

You're welcome.

Operator

Our next question comes from Adam Josephson, KeyBanc Capital Markets. Your line is open.

Adam Josephson -- KeyBanc Capital Markets -- Analyst

Tim and Tom, good morning.

Timothy J. Donahue -- President and Chief Executive Officer

Hi, Adam.

Adam Josephson -- KeyBanc Capital Markets -- Analyst

Tim, I think you mentioned in the prepared remarks that Asia Pac would be about flat on EBIT in 2019. In America -- going back to Americas Beverages, there are so many moving parts with the price increases that presumed the absence of the freight inflation, you won't hopefully be buying in cans at no margin, and then you got -- on the other hand you got the FX, you got the pension. Can you just give us some parameters but what you're thinking in terms of Americas Beverage EBIT this year and perhaps give us some of the moving parts there?

Timothy J. Donahue -- President and Chief Executive Officer

Well, I think we talked about the moving parts. I would tell you we -- if Asia is going to be flat because of a $10 million headwind from reducing China, we expect the tailwind in -- in the Americas Beverage certainly to be much larger than $10 million. But beyond that I'm not prepared to give you any more specifics although we're quite positive on the Americas Beverage segment income growth in 2019.

The moving parts are, we've got some marginal volume that we're going to gain in North America, as we've talked about, but largely we're sold out. We'll recover some of the inflationary headwinds we had in Mexico, as I talked about earlier just by formula under the contract we have. And Brazil, we'll have some modest volume growth, although we're sold out there as well until we get to the new plant coming online at the end of 2019. And then the pricing activity that we've described is not insignificant. So we expect -- we expect that to be quite positive.

Adam Josephson -- KeyBanc Capital Markets -- Analyst

Thanks, Tim. And on the sustainability topic, your commentary about bev cans in the release being the world's most sustainable and recycled packaging was it seemed above and beyond what you've had before in your earnings releases. And for that matter, I think what you talked about at the Analyst Day just a couple of months ago, I think you said at the Analyst Day, look this is good for us. It's a long-term positive, I wouldn't pencil anything into your model for the next several years et cetera, et cetera. Has your tone changed at all along those lines? Do you think it's a more near-term opportunity than perhaps what you thought even in early December? I'm just trying to square your comments with what you've said in recent months?

Timothy J. Donahue -- President and Chief Executive Officer

So we've been -- we've been fairly consistent on the sustainability topic. I agree with you that the language we used in last night's release especially around the term responsible is new. It's a little bit more bullish. I think we are seeing some momentum in Europe more specific than North America. We'll see how North America progresses. But at some point and I think we and others feel firmly that we all believe cans, whether they're aluminum beverage cans or steel food cans are far better than other package choices for a lot of reasons.

And if -- if we're going to be serious about this conversation at government levels and NGO levels and we're not just going to check the box and believe promises for the year 2030, which are somewhat similar to the promises that were made for 2022 that they're not going to achieve then yeah, this is going to -- this is going to happen perhaps a little bit quicker than I originally thought. But I think that -- I still believe what I said in early December is true. This is going to be good for us. The rate at which it's good for us may vary. But I think we're seeing more momentum in Europe right now than perhaps say, we would have seen only a month and a half ago.

Adam Josephson -- KeyBanc Capital Markets -- Analyst

Hey, Tim if I could just ask one follow-up about that issue. You had mentioned in US that there are more products being introduced in cans and that contributed perhaps to the 0.6% growth for the industry last year. That's -- it seems more innovation and sustainability, that's not products going from PET to cans, it's just new products coming in cans. How do you distinguish between the two because they seem different to me?

Timothy J. Donahue -- President and Chief Executive Officer

Well, I guess they're different, but they are linked in that if you introduce an energy drink or a sparkling water or a juice or a tea, you have the option to put that in another packaging format. But you -- and the younger people, who are generally responsible for marketing these new brands and sometimes own the brands that are being marketed have a much different view on the environment than more established brand owners. And I think the younger brand owners are not willing to jeopardize their brand for a package choice and they're making responsible choice to choose the can over other -- over other package formats. So I think they are linked because everybody always has a choice to pick their package

Adam Josephson -- KeyBanc Capital Markets -- Analyst

Thanks, Tim.

Timothy J. Donahue -- President and Chief Executive Officer

You're welcome.

Operator

Our next question comes from Brian Maguire of Goldman Sachs. Your line is now open.

Brian Maguire -- Goldman Sachs -- Analyst

Hey, good morning, guys.

Timothy J. Donahue -- President and Chief Executive Officer

Good morning, Brian.

Brian Maguire -- Goldman Sachs -- Analyst

Thanks for -- thanks for putting me in. Just coming back to the CapEx outlook it's down a little bit from the last couple of years and just in light of your comments around being sold out in a couple of markets and the growth outlook for cans being better than it has been in years, just trying to square that and understand why we're down at such a low level this year and why we're not investing more in CapEx given the growth outlook? And I guess, the spirit of the question is, I know you obviously want to hit the $775 million of free cash next year, but if you do see the growth outlook improve, would you be willing to kind of forgo that target if it meant -- making sure that you took advantage of some -- some really good growth opportunities?

Timothy J. Donahue -- President and Chief Executive Officer

So -- good question. We debate that all the time. And along with that debate, we debate how you're going to characterize how we spend money and if we pull ahead or delay. So I think as we look at Asia, we're going to reposition two can lines. In Europe, we just brought up three can lines over the last two months. So there's only so much you can do in those two markets. So I think Brazil, we're going to bring up a can line.

I think the only market, where we're -- we're kind of in a pause situation until we see how demand shakes out, whether it's new products, whether it's sustainability, whether it's specialty sizes and whether it's the pricing environment all of those things considered, we're kind of taking a more of a wait and see approach. And in the near term perhaps, we miss -- we miss some can sales, but I think in the longer term it's -- it'll be a much more responsible approach for our company. But we take your point.

We're well aware of the opportunity and the growth. But I think it's -- we've been fairly consistent for the last 18 months in terms of characterizing how much capital we would spend in 2019 and more or less we're right in line. So I think the only area, where if we wanted to step out and spend some more money, it would be in North America and we're not -- we're just not prepared to do that until we see the pricing environment return to more normal or more appropriate levels.

Brian Maguire -- Goldman Sachs -- Analyst

Okay. I appreciate that. Just one last one from me. In the food can business just wondered if you saw any prebuying particularly in North America in 4Q and any potential negative impacts that could have in the beginning of 2019.

Timothy J. Donahue -- President and Chief Executive Officer

We did not see any prebuy across our customer base in 2018 leading into 2019.

Brian Maguire -- Goldman Sachs -- Analyst

Okay. I appreciate it.

Timothy J. Donahue -- President and Chief Executive Officer

Thank you.

Operator

Our next question comes from Edlain Rodriguez of UBS. Your line is now open.

Edlain Rodriguez -- UBS -- Analyst

Thank you, guys. Saving -- saving the best for the last. Quick one in terms of like the contract repricing 20%, 25% was done for this year. Should we expect like a similar pace over the next couple of years?

Timothy J. Donahue -- President and Chief Executive Officer

Yeah, I'm just trying to think for 2020 -- for '19 into '20, it could be 25% to 30% and maybe 20% in '21. We'll -- I think they're probably the appropriate numbers.

Edlain Rodriguez -- UBS -- Analyst

Okay. And in terms of the guidance. So bev can volume for '18 was up at 4%. So you have a couple of new projects coming in line like do you expect that number to be higher than 4% in 2019?

Timothy J. Donahue -- President and Chief Executive Officer

I think generally we're -- as we said earlier, we're somewhat capacity constrained in North America. So we're going to be up in the order of 1% to 2% North America. I think Europe with the new capacity coming online, we're probably up 5% to 6%. Asia will be largely flat because we'll have volume increases in Southeast Asia, which just do nothing more than offset the volume decline in China that we walked away from as we move the assets. And then Brazil , Middle East largely flattish maybe down 1%. Brazil up a few percent, just until we get the new can line in. So we're kind of in a period here, where we're rapidly trying to get as much capacity in as possible.

We -- to Brian's question, we realize there's opportunities globally and we want to have our appropriate share of those opportunities. And in responsible terms, there's only so much you can expect your people to do in terms of building plants and commercializing plants. So we're trying to do that in a measured way. So we are -- we need the capacity and we'll bring plants up. But that's regionally that's kind of what we expect. What that all adds up to, I don't have in front of me in terms of overall volume. I -- I would suggest that given North America is our biggest market and we're only going to see 1%-ish to 2% growth there, maybe the growth rate for us and globally in '19 is 3% or 3.5%.

Edlain Rodriguez -- UBS -- Analyst

Okay. Thank you very much.

Timothy J. Donahue -- President and Chief Executive Officer

Thank you.

Operator

Our last question in queue comes from Neel Kumar of Morgan Stanley. Your line is open.

Neel Kumar -- Morgan Stanley -- Analyst

Hi, good morning. Another question on North America. So looking at the North American industry can shipment data, we saw some positive growth in alcohol beverages for cans in the fourth quarter, which was the first quarter in quite some time that had some positive growth. Can you just talk about what drove that change specifically in alcohol beverages?

Timothy J. Donahue -- President and Chief Executive Officer

So Neel we don't -- with the exception of Canada, where we're very strong in beer, we have a pretty small position in the United States in beer. So I think we're not the right ones to answer the question. I don't know whether it's inventory restocking around perhaps they had a stronger holiday push, I don't know, but it had to do with promotions around the NFL. And so we're not the right ones to ask because we're -- we don't participate in that market as large as some others.

Neel Kumar -- Morgan Stanley -- Analyst

Okay. And then in terms of the 4% overall volume growth you saw in beverage can demand in 2018. Can you just talk about what type of growth rate you saw in specialty cans versus standard cans?

Timothy J. Donahue -- President and Chief Executive Officer

Yeah. Well, specialty cans off a much smaller base certainly in North America for us. I think we're well represented globally in every market around the world either in line with the market or a greater percentage than the market for specialty cans with the exception of North America, where we probably have 14% or 15% specialty mix and the market is probably in the low 20s. But -- but if we had 4% growth overall, our specialty growth is certainly more than double that, just off the top of my head, I don't know. Probably it's in the double digits I just don't know, where in the double digits.

Neel Kumar -- Morgan Stanley -- Analyst

That's helpful. Thanks.

Timothy J. Donahue -- President and Chief Executive Officer

Okay. Thank you. Eric thank you very much. That concludes the call today, and we look forward to speaking with you again in April. Thank you.

Operator

That concludes today's conference. Thank you for your participation. You may now disconnect.

Duration: 61 minutes

Call participants:

Thomas A. Kelly -- Senior Vice President and Chief Financial Officer

Timothy J. Donahue -- President and Chief Executive Officer

Gabe Hajde -- Wells Fargo -- Analyst

Anthony Pettinari -- Citigroup -- Analyst

Scott Gaffner -- Barclays -- Analyst

Salvator Tiano -- Vertical Research -- Analyst

Ghansham Panjabi -- R W. Baird -- Analyst

Arun Viswanathan -- RBC Capital Markets -- Analyst

Debbie Jones -- Deutsche Bank -- Analyst

Tyler Langton -- JPMorgan -- Analyst

Mark Wilde -- Bank of Montreal -- Analyst

George Staphos -- Bank of America-Merrill Lynch -- Analyst

Adam Josephson -- KeyBanc Capital Markets -- Analyst

Brian Maguire -- Goldman Sachs -- Analyst

Edlain Rodriguez -- UBS -- Analyst

Neel Kumar -- Morgan Stanley -- Analyst

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