Ladies and gentlemen, thank you for standing by. Welcome to the Ball Corporation First Quarter 2011 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded, Thursday, April 28, 2011. I would now like to turn the conference over to John Hayes, President and CEO. Please go ahead.

Thank you, Edison, and good morning, everyone. This is Ball Corporation's conference call regarding the Company's first quarter results. The information provided during this call will contain forward-looking statements. Actual results or outcomes may differ materially from those that may be expressed or implied. Some factors that could cause the results or outcomes to differ are in the company's latest 10-K and in other SEC filings as well as the company's news releases. If you don't already have our earnings release, it's available on our website at ball.com. Information regarding use of non-GAAP financial measures may also be found on our website. Joining me on the call today are Ray Seabrook, Chief Operating Officer of Global Packaging; and Scott Morrison, Senior Vice President and Chief Financial Officer. In a moment, Scott will discuss our progress from a financial point of view, and Ray will follow up with details about the progress we are making in our packaging operations. I'll close with comments on Aerospace and the outlook for the balance of the year and beyond. As mentioned in our press release, Ball reported very strong first quarter results due largely to strong volume growth in our Global Beverage Can businesses and strong operating performance across all of our Packaging businesses; excellent program performance in our Aerospace business; continued double-digit growth in the emerging markets, particularly China and Brazil; benefit from our prior actions to better match our supply with market demand here in North America; and better-than-anticipated performance from our recent M&A activity. In addition to our strong results in the quarter, we also closed on the Aerocan acquisition. We successfully started up beverage can lines in Tres Rios, Brazil and Belgrade, Serbia, began construction on a new plant in Alagoinhas, Brazil and formed a joint venture in Vietnam. Our…

Thanks, John. Ball's comparable diluted earnings per share in the first quarter were $0.58 versus last year's $0.43. The following factors contributed to improved results: growth in and consolidation of our majority-owned Brazilian joint venture, as the first quarter of Brazil is seasonally strong; volume improvements and excellent operating performance on our Global Metal Packaging businesses; inventory holding gains in our Food and Household segment added a few cents in the quarter; exceptional program performance in our Aerospace business; a lower share count; and 6 additional accounting days in the quarter compared to the first quarter of 2010. Since there are still only 365 days in the year, this means there'll be 6 fewer accounting days in the fourth quarter of 2011. These positive factors were partially offset by a year-over-year increase in corporate undistributed, primarily due to higher incentive accruals, an increase in the effective tax rate and higher interest expense. The euro had essentially no impact to earnings in the quarter. Also in the quarter, the company recorded a $6.4 million after-tax charge or $0.04 per diluted share for the closure of our Torrance, California beverage container facility. For a complete summary of first quarter results on a GAAP and non-GAAP basis, please refer to the notes section of today's earnings release. As an update to the 2011 financial metrics provided on our January call, we anticipate full year interest expense to be closer to $185 million, up $5 million over previous estimates due to the recent strengthening of the euro. With the growing contribution of earnings from our Beverage Americas segment, our full year effective tax rate will now be closer to 32%, up from the prior indication of 31%. As indicated in January, 2011 CapEx will be approximately $500 million. Each of these CapEx projects exceeds our after-tax investment hurdle within 3 years, and Ray will provide an update on these projects in a minute. Given our strong performance, we expect corporate undistributed to run in the low $70 millions for the full year as -- versus the low 60s that I mentioned on the January call. We continue to expect 2011 free cash flow of at least $400 million, with the majority of the free cash flow going to share repurchases. In the quarter, we acquired a net $150 million of stock. And as of today's call, we've acquired approximately a net $180 million of stocks since the beginning of the year. At current exchange rates, year-end net debt is expected to be approximately $2.9 billion, up slightly due to the Aerocan acquisition and cash being oriented to share repurchases and dividends versus debt paydown. Our balance sheet is solid, our capital structure is highly competitive and the operations are providing high-quality results and strong cash flow. We will continue our long-standing approach to balance capital deployment and consistently return value to our shareholders through share repurchases and dividends. With that, I'll turn it over to Ray to talk more about the packaging operations.

Thanks, Scott. This is an exciting time to be serving the company as the Global Packaging COO. As John said, we have a lot going on, and it's all really good. It's also reassuring to me to see firsthand that we have a lot of outstanding, dedicated people that work for our company. Metal Beverage, America and Asia segment reported considerably higher earnings for the quarter, due mainly to the inclusion of Brazil earnings, which were not in the first quarter 2010 results, and higher sales volumes in all geographic areas. Excluding the effect of 6 additional days in the quarter, as Scott talked about, normalized sales volumes in North America were up mid-single-digits and normalized sales volumes were up in Brazil and China more than 15%. We continue to see earnings growth opportunities in North America, as we lower our cost structure, improve our manufacturing footprint and develop innovative products like the Alumi-Tek bottle. All of our major capital projects are on time and within budget. The relocation of a 12-ounce can line to Whitby, Ontario from Torrance, California is scheduled to start up by mid-May. A new 16-, 24-ounce swing line will be installed and running in our Fort Worth plant by September, and the Torrance plant is scheduled for closure in the fourth quarter. All of these activities will contribute to second half and future year's results. Beverage Can growth continued strong in both Brazil and China. And to keep pace, we have announced plans to build a new beverage can plant in Alagoinhas, Brazil. We are also replacing an existing beverage can plant in Qingdao, China, with a much larger, more modern plant. We expect to be making commercial cans by the end of 2011 in Qingdao and in early 2012 in Alagoinhas. Turning to Europe, our acquisition of Ball Aerocan on January 18th of this year is off to an excellent start. Sales and earnings exceeded the acquisitions plan in the quarter, and sales volumes in this product line are up over 20% year-over-year. Metal Beverage, Europe's normalized sales volumes are also up mid-single-digits in the first quarter, and the sale of beverage cans in Germany continues to grow. We foresee German beverage can growth in the range of 50% this year. Market growth continues, and we have just finished the installation of a second can line in our Belgrade, Serbia plant and our supply/demand balance in Europe remains very tight. The Metal Food and Household Product results in the quarter benefited from volume gains in aerosol containers, earnings from the aluminum slug business we acquired in mid-2010 and some small inventory gains, as Scott talked about. Normalized food can volumes were a little soft in the first quarter, but manufacturing performance in this sector was excellent. To sum up, our operations are performing well. We are seeing increased demand in our businesses throughout the world, and we are investing in our operations for continued growth. With that, I'll turn it back to you, John.

Thanks, Ray. A few comments on Aerospace and then, the outlook. Our Aerospace and Technologies business reported near double-digit EBIT margins in the first quarter. Earnings increased primarily due to continued excellent program performance. Backlog, as I said, ended the quarter at more than $1 billion. Under the U.S. government's continuing resolution, only a few of our programs are experiencing funding issues, and the outlook in total is positive for the remainder of 2012 -- or, excuse me, 2011. Multiyear programs and associated hiring are ramping up, and we plan to expand our satellite manufacturing building later on this year to provide the necessary infrastructure to execute on these new wins. We're keeping a close eye on the activities in Washington, and we believe our ability to deliver value-based capabilities in terms of cost, quality and schedule that are strategically important to our customer base, sets us up well for the next couple of years. In summary, Ball Corporation's improved year-to-date performance is due to the execution of our strategy. We're maximizing our returns in cash flow in mature markets, broadening our product portfolio, growing in emerging markets and providing technology and innovation to our customers. And our shareholders are benefiting from our customer-led focus, tight discipline and balanced approach to deploying capital, as Scott said. We fully expect to generate 2011 results in excess of those in 2010, and we are well on our way to achieving our long-term goal of 10% to 15% earnings growth per year. With that, Edison, we're ready for questions.

[Operator Instructions] Our first question comes from the line of George Staphos from Bank of America Merrill Lynch.

Ray, good to hear you on the call again. I guess the first question I had, could you go back on the -- and repeat what the timing of the startups on the replacement plant in Qingdao and the new plant in Brazil are? And to the extent possible, can you remind us or provide what the customer base is for each and remind us on the contract's presell nature, et cetera, if possible?

Well, Qingdao, we need cans by December. So we expect that to be starting up probably mid- to late December. So that's Qingdao. Alagoinhas is, probably it's March, a March startup for that plant. The main customer base for both plants is beer. We have, I think, I believe, a 7-year contract in Brazil, and we have contracts that support the Qingdao plant. Did I answer all the questions or I miss one?

And I'm guessing that the contract is pretty much -- or the volume you anticipate is pretty much all acquired from the key customers, there is not any [indiscernible] to come?

Yes, it's all sold out.

The second question I had relates to the European beverage can market. I think you mentioned that you are sold out. Have you experienced, nonetheless, any price compression or margin compression in any of the regions? Some of the peers who reported thus far suggested there were some pockets of price competition during the quarter and -- for the outlook for 2011?

You know, we are a competitive industry, so there's always competition. We do remain tight. I believe, as they say, if things go according to plan, we may need to add more capacity in Europe if the market continues to grow. If the price we have -- we have experienced some price issues, and we've walked away from some business on price. So there's no use trying to get business that -- we're filling up our capacity with our best business.

The next question comes from the line of Ghansham Panjabi from Robert W. Baird. Ghansham Panjabi - Robert W. Baird & Co. Incorporated: It looks like your big beer customers in North America seem to have raised prices on their subpremium brands, which has driven some level of premiumization, benefiting glass to some extent at the expense of cans. And I think the CMI numbers support that for the first quarter anyway. Can you touch on what you saw in 1Q specific to beer and -- just given your large exposure towards the subcategory?

Ghansham, this is John. I'll take that. Recall over the past couple of years, the share of the cans as a percentage of the packaging has gone up from, call it, 48% to 52%, so we've been a beneficiary relative to other substrates. I think the first quarter, it was a little bit soft, but not abnormally soft. I think it was down about 1% or so. But let's remember, that's January through March. It's not the time that people are going to be drinking beer. Many of our customers have been focusing on value over volume. I think the conversations we've been having with them suggest that they are very much focused on trying to grow their brands. Yes, they have created a less of a differential between the premium and subpremium, but we're still pretty constructive on what's going on in the beer industry for the can. Ghansham Panjabi - Robert W. Baird & Co. Incorporated: Okay. And just switching to soft drinks, can you just update us on your thoughts on what we should expect going forward, particularly given that your customers are digesting some pretty heavy raw material increases in what's inside the can, not just the can itself. And I'm curious as to whether you think they cut back on promotional spending just to offset some of that margin pressure.

I don't think I know the answer to that, Ghansham. Here's what I can tell you, that we have, obviously, we did a fairly big market share in the U.S., and so we deal with everybody. And what we're seeing is different customers doing different things. We have some customers that are, quite frankly, fairly aggressive in the U.S. and we have some that are less. So it's a bit of a mixed bag. Ghansham Panjabi - Robert W. Baird & Co. Incorporated: Okay. And just one final one, if I could. There's been some talk about Russia potentially banning beer or PET [polyethylene terephthalate], which could occur by '13. I know you previously had plans for a plant in the country, can you just sort of update us on that?

Well, we still [indiscernible] in Russia, and if it's good economics for us to [indiscernible] we will. We've not announced anything yet because we haven't found the right entry point relative to customers and equipment where we can make a decent return. Your mention about PET, that is -- our understanding, is that it's not gone into law yet but it is sort of being banned [indiscernible], which is the government body in Russia. So we'll see how that develops, and that could bring a positive outcome for the industry.

Your next question comes from the line of Alton Stump with Longbow Research.

It's actually Phil Terpolilli calling in for Alton. All of our questions have been answered, but we just had a quick one. Is there any kind of a ballpark estimate you might have on America's beverage? Especially in North America, you mentioned mid-single-digit growth. What percentage of that is coming from maybe contract wins or kind of new business this year?

Well, recall over the last 12 days to 18 months, we've talked about in 2010, we're going to be taking a step down and beginning back in 2011, back to the 2008, 2009 levels. That's exactly where we are right now. And what that means on a year-over-year basis is, as we said, mid-single-digits increases over 2010. We're entering that busy summer selling season, and so we have only had a first quarter under our belt, but we expect exactly what we said in January to be occurring through 2011.

The next question comes from the line of Chris Manuel with KeyBanc Capital Markets.

And I think last quarter, I commented that you had some big shoes to fill, but given what you guys are doing thus far, it seems like you're stepping into them pretty well.

Appreciate that, but one quarter doesn't a year or a decade make. But as we said in January...

Well, that's what I'd like to hear.

Yes, we have a lot of -- as we said in January, and we say now, we have good momentum in our business. We have people focused. We're very much focused on the execution of our capital projects and touch wood, it is only the end of April right now, but things are going well with the company.

Well that's what I like to hear, that you're still going at it. So I do have a couple questions for you. First, let's talk for a second about the Aerospace side of the business. If memory serves, that's almost a record backlog, I believe. How does that start to get monetized through, as we look over the next 12 to 24 months? Can that get back to kind of record EBIT levels here, or how should we think about that?

Well, recall back in August of last year, we've really won 4 big programs in the satellite side of the business. Some of them are classified so we can't talk about them, but these are multiyear programs. And what we said is, as they begin to ramp up in 2011, we'll get some benefit. But really, as we go into '12 and '13, that's where it will come in. The only caution I'll note relative to that is that the funding at the U.S. government level is still unclear. We're operating under a continuing resolution right now. We've got that ceiling issues. And until the September timeframe, when the 2000 -- fiscal 2012 budget is put into place, we won't have complete -- we won't have better visibilities than we do now. What I will tell you, and I said in my prepared remarks, is that, that the wins that we have are very strategic for our customer base, and we believe that one of the reasons that we won some of this business is because we have shown an ability to deliver good value, good quality on a good timeline at a low cost. So it sets us up nicely as we go into 2012 and '13.

Okay, that's helpful. And then one other question for -- as you look at the metal gains you had over the quarter, is there is there a way you can help us to want to quantify those so we can get a sense of trajectory here into 2Q, 3Q? Or will some of those also continue into 2Q as well?

No, I mentioned that in the Food and Household segment, we had just a few cents. It wasn't a huge impact. And going forward, it really is nothing. So it shouldn't affect the numbers as we look forward throughout the rest of the year.

And then in that Metal Food Household section, it did take -- the European Bev [beverage] section, it did take a big step up. And I'm assuming that a chunk of that is Aerocan. Could you maybe give us a sense as to what the revenue and EBIT contribution were relating that business?

You want me to do that, Scott?

Yes, go ahead, Ray.

The revenue is about $100 million. I'm talking U.S. dollars now. Of course, they're running that business in euros, but $100 million is the revenue and, call it, $7 million is the contribution.

The next question comes from the line of Mark Wilde with Deutsche Bank.

Is it possible we get a little bit of color on what might have gone on in the first quarter in terms of just North American food can volumes? I mean your numbers sounded like they were pretty much down in line with the industry, but it seems like a pretty big drop for a relatively stable business?

Yes. We're still looking at that. Our volume probably, normalized, we're down probably in the neighborhood of 4% on the food side, and they were up 5% or 6% in aerosol. So -- and they're still soft, as we speak. Some of it is timing, I think. Some of it -- the steel guys have raised the prices on steel to a point where I think some of our -- there's still -- our customers are sitting on some inventories they're trying to get rid of before they pull the can. Remember, this is a very seasonal business. Just because they haven't pulled them now, it doesn't mean it's not going to be a good tax. So I'm not sure that's totally what you're looking for, but it has been a little soft year-to-today, but we expect it to pick up when some of our customer's inventories are pulled down.

Okay. And a couple questions on Brazil. Can you qualify the impact from the benefit from increasing your position in the joint venture in Brazil?

Yes, maybe this, I'll take it first. And then, Scott, you can comment. Remember, what we did is we went from a 50-50 unconsolidated joint venture to a 60% consolidated joint venture. So when you look at not only the contribution at the EBIT line, but also the equity line last year and the noncontrolling interest line this year and netting them, we really only have a slight improvement given the 10% increase in ownership. I think what you're seeing also, though, is the benefit of the growth in Brazil, that the business is performing well. And Scott, do you have anything?

No, that's it. I mean, going forward, you'll see the 40% that we don't own coming out in noncontrolling interest.

Okay. And do you have a sense just kind of based on the first quarter of by sort of how Brazilian volumes are doing this year's, just for the sort of a market as a whole?

Yes, I think the market is sort of up 12%, 13%. We're up little higher than that.

The next question comes from the line of Chip Dillon with Crédit Suisse.

I probably missed this, but could you just again verify the volume in beverage cans in Europe, what the change was, and if you could isolate what it would've been without the improvement in Germany?

I don't know if I can isolate without the improvement in Germany, but I would tell you that beverage can -- our beverage can volumes are up 4% in Europe in the first quarter of year.

Yes. Let's recall also in Germany, we've had some good improvement there, but it's also very small based. And so yes, it was a portion of the growth that Ray just mentioned, but certainly wasn't all of it by any stretch.

Got you. And then in terms of the Aerocan acquisition you closed on last year, my understanding is that this business was, I don't want to say left for dead, but was not performing well under its previous owner like 5 or 6 years ago. And maybe you could just talk a little bit about how -- what turned that around, what the market changes have been that provide acceptance for their particular technologies, and sort of how you -- where you expect that business to size at, say 3 to 5 years by now, whether it's organic or through acquisitions?

This is John. Maybe I'll take the first crack, and then turn it over to Ray. Recall in January, we talked a bit about this. Five years ago, it was an underperforming business in a larger conglomerate. And they had several facilities that were losing money. They had some accounting issues in certain plants. And they ultimately LBO-ed [leveraged buyout] it with the local management, and local management did a wonderful job of cleaning things up. They closed the facility in Spain. They fixed the plant in France. They significantly expanded their Eastern European presence. And they were doing this all at the time when the market started improving from a demand point of view. And so as we look at the acquisition, it was a very well-run business with some good growth potential, some embedded capability from not only a technology point of view, but from a fixed cost absorption, as you add incremental capacity in the Eastern European facility. And so it's all good, and maybe, Ray, if you want to talk a little bit about what we're seeing now as we go forward.

Yes. I mean basically, we just approved some more capital. We're installing another line in the facility that John has talked about. And quite frankly, we're sold out in that business. And I told you, year-over-year volumes are up 20% in the first quarter. We continue to see growth not only in Europe but worldwide in that business. So we're looking to see what we can do to continue to expedite our look at that business. I did misspeak once before, what I said was, we had $100 million of sales in the first quarter, We're like $40 million. I picked the wrong number, but it's more like $40 million of sales and $7 million with EBIT.

Yes. But as we go forward, just to give context, the global aerosol -- aluminum aerosol market is approximately 6 billion units. It depends on how you look at it, but go with us on that. Europe's about half of that, a little bit less, but about half of that. We've got a 20% share. The growth rates in Europe are quite strong right now. This is a lot about beauty and other things like that. It's not about paint, it's not about general line. And we're sourcing good growth there. There's opportunities in North America as we said before, opportunities in South America, where the strongest growth is probably occurring down in South America. So we're -- and even in Asia, there's good growth opportunity. So we got into this business thinking that we have some capabilities to provide to the business. It has some capabilities that will help -- we can help to leverage as we look in other places, and that's exactly what we're attempting to do here.

And then one quick follow-up. As we look around the world, the only place that I know of, and you may know of others, John and Ray, where you see, in essence, new entrants into beverage cans, there's, I believe, a Chinese company in Vietnam that is building a plant that I believe is based on steel as opposed to aluminum. And would you say that's sort of a one-off situation or do you see competitors coming in?

Well, the one you're talking about, Vietnam, that's an announced plan. I'm not sure they're really going to build it, they announced they're going to do it, but I don't know if they're actually going to do it. There are -- we have competitors. We tend to run into the same competitors worldwide. We have -- when we look at -- I look at the world market, we -- in beverage cans, we have more competitors in Asia than anywhere else. If you look at Asia, there are more competitors seems to be in Asia. We tend to run into the same probably 4 competitors, 3 or 4 competitors, pretty much the rest of the world. And you might have a strike here or there, but I would say the most competitors we see are in Asia.

The next question comes from the line of Richard Skidmore with Goldman Sachs.

Just wanted to follow up a bit on Brazil and how you see the supply and demand dynamic evolving in Brazil over the next couple of years, given both your capacity expansion and what you're seeing with some of your competitors?

The market, the beer picking up -- a lot of it has to do with beer. I think beer penetration is still in sort of the low 30%. When you look at developed markets, it usually gets to 50-ish. We've continued to see growth. They've got the World Cup and the Olympics is coming to Brazil. There is inflation. They've tried to slow the economy a little bit. They put some taxes on some things. So I don't think it's the a bit out of balance, but I think Brazil's pretty much still sold out on cans. You've heard all our competitors, we announced expansion, but it's really to fill the growth there. And we're trying not to put capacity in unless we know exactly where it's going. And we're not just building something for the sake of building it. So I continue to see growth in Brazil. I think the next 3 or 4 or 5 years will still be reasonably strong. I think that we'll take our fair share of the growth as well as our competitors. And I see Brazil as a good place to be doing business right now.

Let's not forget, in context, for 2010, it was short 1.5 billion to 2 billion cans that were imported from other regions. So they're starting in a hole going in 2011, a big hole. And as Ray said, we continue to see strong industry growth there. And on a base of, I'll call it, 18 billion plus or minus, you can do the math there, that's 3 billion or 4 billion cans that are needed in 2011 that weren't being supplied locally in 2010. So as you think about that and extrapolate, and given the embedded growth that we believe related to some of the things Ray mentioned, we think the prospects over the next couple of years are very constructive. Now having said that, we also are very cognizant of what we're doing in making sure that our contracts are tied up, and that we're not over building relative to demand that we see from our customer base.

And just on that, in terms of the contracts. The contracts essentially guaranteed such that if the customer chooses then not to build their facility, do you get some remuneration for your investment or is it essentially, you then just have to do what you did with the Poland plant and ultimately not start it up and relocated somewhere else?

Suffice to say -- we're not going to get into the specifics of our contracts, but suffice to say that we feel confident that we have the necessary provisions in place to adequately protect the risk management of these contracts.

The next question comes from the line of Peter Ruschmeier with Barclays Capital.

Congratulations on the strong quarter. Ray, welcome back to the call. I wanted to ask, if I could, operationally, can you talk more about Belgrade, Serbia, Tres Rios, how is it performing versus expectations? Maybe remind us what kind of learning curve you'd expect and whether there was any kind of start-up cost that was incurred in the quarter and how we should think about learning curve going forward.

You mentioned Tres Rios, the startup in our Brazilian operations has been probably some of the best I've seen in my whole career. I mean, these plants we put in, I think we've spent a lot of money to put them in and I guess it showed when we start them up, because they just started up impeccably. I would say, that the startups in Brazil, I would say, have been the best we've ever had. They just started up, and we're making quality cans, a lot of them, right off the bat. We just recently installed that line in Serbia. I think it made its first cans a couple of weeks ago. So we're kind of -- we're still in the startup phase. So it's just really still starting up, but we're not expecting any difficulties. And touch wood, we've been real fortunate in the last few years that our start-ups had gone probably better than expected.

And in terms of learning curve, do you think Serbia could be up and going full in 6 to 9 months?

I think we'll be making -- no, I think, yes, well, as I said, capacity is tight in Europe. I need cans this year. I need cans by mid-May out of Serbia. So were going to be, as they said, our supply demand in Europe is too tight. I need those cans this year. It's going to be producing quality commercial cans mid-May and it's going to be running flat out pretty quickly here.

Okay. I'm curious on some of the growth in Brazil. Maybe, John, if you could help us understand the organic growth versus the share gains, as you see some of the trade up from a return to bottle market into more of a one-way, a package market? If you were to think about bifurcating the demand growth, how would you do that?

Well, I think when you look at overall literage of beer and soft drink, that continues to go strong and a lot of it is growing because it's not necessarily in the Rio areas and Sao Paolo areas, although that's growing nicely, but you're seeing it in the north, you're seeing it in the Northeast, and some of the more developing areas within Brazil. As we said, a lot of infrastructure is going in those areas. For example, the World Cup, they're going to be in 8 different cities. So it's not just in Rio or Sao Paolo, so that's driving it. And you combine that with a package share penetration, as Ray said, in the mid 30's. And we think there's some upward mobility, it's going to provide some additional acceleration of the beverage can over the next couple of years. Do we expect it to last forever? No, probably not. But certainly over the next few years, given the infrastructure build and the dynamics we just talked about, we think there's some good runway there.

Okay. And then maybe just lastly, back in the U.S., I'm curious if you can talk about -- relatively small market, but the microbrews and the trends you're seeing there, both in terms of pack types, growth rates, any color you can offer?

Yes. The craft beer market has been certainly a bright spot in terms of volume relative to, not only us, but the overall beer category. It's the fastest growing segment within the beer category. Cans, 5 years ago, were effectively nothing in that segment, and they are growing very, very strong. And as it takes hold with some of the smaller ones, the question remains is, will it start to take hold with some of the largest -- larger craft beer makers, and I guess all I'd say is stay tuned on that.

The next question comes from the line of Philip Ng with Jefferies. Philip Ng - Jefferies & Company, Inc.: Just a quick question. You mentioned how in Asia, some of your competitors are generally smaller. When they do add capacity, are they locking up long-term contracts and are they setting it up in a similar fashion as well?

I don't know the answer to that. As they say, I think some of our competitors are. I don't think they all are. I think that the -- you've got to remember, some of our competitors are state-owned companies in China. They're owned by the government. So I think they do, sometimes, things a little differently than we do, quite frankly. And I think that our worldwide competitors probably do things more similar to what we do. But China, just to give you a sense, we are importing cans into China. We are sold out as we speak. And so that's why I said I need that capacity in Qingdao by December. So we got -- the market is increasing in China. There's -- I think the beer penetration is at 4% or something like that. So you can see if that moves up a little bit, you're going to need more can plants in China. So we're looking at that. We're studying that. We're making sure that we get our fair share of whatever is happening over there. So -- but China tends to not necessarily work exactly like everything -- more the rest of the world, because we have more competitors there that do things maybe a little differently than we do. Philip Ng - Jefferies & Company, Inc.: Okay, that's helpful. And just for modeling purposes, your Americas Beverage segment, obviously, you're seeing a nice lift from Brazil from the can consolidation and some of your investments are flowing through more fully. Should we expect margins to be pretty stable across-the-board throughout the quarters now?

Well, we always have seasonal upticks in the second and third quarter of North America, when we get the volume upticks, the margins look a little bit better. But until we get a full year of Brazil in our numbers, it's going to dampen the seasonality that we've had in the past, because their busy time is the first and fourth quarters and our visit time is the second and third quarters. So it should bring the margins a little bit closer over time, but you got to get a full year before that really starts to happen. Philip Ng - Jefferies & Company, Inc.: So you should still see a modest step-up of sorts in 2Q and 3Q?

Yes, because that's the busiest time and the U.S. business is much larger than the Brazilian business.

The next question comes from the line of Al Kabili with Macquarie.

Just to clarify on your beverage cans, the 4% volume growth, was that also adjusted for the 6 extra days during the quarter?

That was adjusted. If you didn't adjust it, it would look more like 10% or 11%.

Okay, fair enough. And also, a follow-up question on Brazil. Do you have, next year, any meaningful contracts coming up for renewal in Brazil next year? I was kind of thinking about -- I know you've kind of locked up some of the new capacity you've added, but wondered kind of some of the existing contracts that are out there to sort of how those come up?

We have one contract that's coming up at the end of '11 that we're negotiating right now. I'm not expecting any issues. It represents probably 20% of revenues, 15% to 20%.

Okay. And then also on the, I guess, Food Can business with the -- any thoughts on this on productivity? I know with the Richmond, Canada closure last year. Can you update us on any of that, where cost savings there will start accruing or if you saw some of that benefit already in the first quarter.

No, we haven't seen the benefit. We are in the process of relocating their equipment as we speak. A lot of those cans that we used in this year's pack have already been made. They were made in Richmond. And you won't see the benefit of that probably until next year.

Okay. Final question. Certainly, the euro, from where we're at today, certainly it looks like it's going to be a nice tailwind in, starting in the second quarter here. Are there any hedges that you have out there that would impact how we think about FX and also, I want to get your guys' thoughts on view on updates and just how you think about hedging in general right here at current exchange rates?

Well, I mentioned in the first quarter, the euro essentially had no impact year-over-year. But as we sit here now at 147 and moving higher, obviously, we'll get the benefit of that as we move through the year. We do put hedges in place, but we tend to use things where we have upside and protect downside. And so whatever the euro ends up being, we should translate it fairly close to that number, even taking into account our hedges. But we put downside protection in below certain numbers, and we're well above those numbers right now. So we should get the benefit on that side, but that's also pushing up the interest expense a little bit and the debt that we have over in Europe, it will push it up a little bit.

The next question comes from the line of Tim Thein with Citigroup.

Congrats again on a strong quarter. I wanted to circle back on the specialty can growth. I think you'd mentioned earlier that, I think you quoted 30% global growth. Can you just provide a little bit of color in terms of the regional breakdown and maybe certain regions where that contributed to that growth?

I don't have that in front of me, but we are seeing strong specialty growth. Ray mentioned, the 16- and 24-ounce particularly, but even our new 7.5-ounce can size here in North America. And down in Brazil, we have the sleek can that's growing nicely. And then even in Europe, whether its 15 cl or going up to 568 cl. I think brand owners are looking at trying to differentiate their brands and position their brands relative to being a little bit more distinguished to the consumer. And we, given that we have a large -- relatively large proportion of our output that has a capability of becoming specialty, we're benefiting from that.

And can you still, John, get, I guess, paid for that kind of innovation? And in terms of the margins, I know in recent years, up to say 2 or 3 years ago, before more capacity was allocated to this segment, that the margins, at least one of your competitors have quoted, it was up to 3x in conventional can. And not to pin you down on the exact numbers, but is there still a nice kind of premium margin for specialty relative to conventional?

Well, by definition, there should be, because we're investing in it. And if you want to get an appropriate return on investment, you ought to be getting better than just the steady-state.

Okay, but is that true in Europe, I mean today?

Yes. I think it's generally true wherever we are.

Okay. And Coming back, did you say on Aerocan, it was EUR 7 million of EBIT on EUR 40 million of sales?

We said it was $40 million of U.S. sales and $7 million of EBIT, approximately.

Do you guys see -- your EVA model, is that -- is this deal going to be accretive by, like, the second year or maybe even the first year?

It's accretive now.

As I said in my prepared remarks, we really hit the ground running with all of our M&A activity relative to our expectations, and the folks over in the Aerocan business, the folks in the Neuman -- the former Neuman Aluminum business, are doing a great job, and we're quite excited about it.

Your next question comes from the line of Dan Khoshaba with KSA Capital.

Just looking at some of your recent competitors and their increase in capital expenditures, and your increase in capital expenditures, the whole industry's done a great job investing and making these plans come on time and getting great returns. But I was thinking back, after looking at these numbers, that for the last 20 years, I think you guys would probably agree, the industry benefited during times when capital expenditures were kind of coming in and operating rates were tight, and it allowed you to have pricing, and wonderful things happened in terms of performance and stock prices and all those things. And now all of a sudden, we're seeing CapEx -- for the entire industry, not just you guys, for everybody -- and, again, I think the industry structure's a lot different. But you have to be wondering, or at least thinking, what's different this time so that the increase in CapEx that is happening throughout the industry doesn't lead to what it led to back in the -- I guess it would have been the mid-1990s probably, right? In terms of returns. So how do you think about that, and when will you know? And I guess you never really know, but you get my point.

Yes. Dan, let me just quickly walk through. Number one -- and I'll speak to our capital obviously, we're a very different business than we were back then. And the capital investments we're making right now are very diversified, and they're for varying reasons. You go to Asia, Ray just said we're importing cans right now into China, so we need that capacity. You go to Brazil, but I said the capacity last year as an industry, we believe we're short 1.5 billion to 2 billion cans and it's growing 15% to 20% year-over-year. Over in Europe, as Ray said, that we are short in cans and we need cans out of Serbia. And then here in North America, it was more of a cost-play, that we actually closed, took out a bunch of fixed cost and to took some of those -- some of that equipment, move it up in the Whitby, Ontario and saved a bunch of freight, and we were able to install a new line, 16 and 24-ounce line. And remember, Torrance made 16-ounce, so we needed some 16-ounce capability in a segment of the North American that's growing 30%. So all of those are very different. And you are -- it's fair to take a look from a top-level-down looking at it, but when you look at it bottoms up, we feel pretty confident in what we're talking about. And as we have been saying for a number of months, we're very much focused on the execution. We're not going to get over SKUs but we think these are good return opportunities for us.

So then the answer, I guess, is that the drivers are different than they were, perhaps, 15 years ago?

Yes, and remember, Dan, a lot of it -- us and our competitor, a lot of it -- the spending is in emerging markets.

Yes, for sure. I mean that's a big difference, yes? Ray, good to hear you. And I appreciate it. Good quarter, guys.

The next question is a follow-up question from the line of George Staphos of Bank of America.

A couple questions. One, what's the latest on BPA and your coating supplier's ability to provide you an alternative that's BPA free, if required by your customers, without getting into the science and whether there's any real fact to whether it should be in the first place a concern for people. But what's your supplier's ability to help you right now?

Well, we won't get into facts, as no one else seems to be getting into facts about BPA. But the reality is, let's talk about beverage on one hand and food on the other. On the beverage can side, we are testing various coatings, internal coatings. And we believe that if push comes to shove, we would be in reasonably good position to execute on the BPA front on the beverage side. On the food can side, it varies so much because there's a tremendous amount of different specs relative to if you're talking about tomatoes or if you're talking about green beans or other food stuffs, we have -- we will be having approximately 20% of our cans in BPA-non-intent this year, and we think we can go over 50% next year. And we are struggling with some categories, but those categories we're struggling with are not in important part of our business.

Okay. So you have -- John, if I heard you right, you said you would have the capability of being BPA-free in roughly 20% of your specs in food right now?

Yes, that's what we're currently targeting. And discussions continue with the coatings supplier, so.

Understood. One thing that I was thinking about, both off of this call and some of the others that have occurred this morning, obviously there's a lot of discussion about food inflation and whether that's having an effect on demand or not. And I was wondering, do you think, realizing that you're, probably unintentionally, but nonetheless biased, do you think that an environment where you start to see food inflation once again impacting grocery demand, that the food can would hold up relatively better or relatively worse relative to other products that are packaged in other packaging materials, do you think?

Well, we've always tried to, at least internally, look at economics cycles, inflation cycles, relative to our -- the products that we serve. And there is a strong case to be made that we ought to be better off relative to other packaging types in times where the consumer has less money in their pocket. And whether that's an economic cycle or an inflationary cycle, we haven't been able to draw a direct correlation to that, but I think intuition would suggest that. We've seen a bit of softness this quarter, but as Ray said, it's the first quarter the seasonal pack is really coming up. It largely has to do with, what we believe, our inventories are being held by our customers. And so I think as time goes on, George, we'll be able to see better visibility if that piece holds true.

Last question. Over the last 20 years, you've seen this conversion that's occurred gradually over time in food cans from 3 to 2 pieces. You had, Milwaukee and Columbus, your competitor in Owatonna, you'll see conversions. Would a 2-piece can provide a cost benefit to your customer? And what I'm thinking about is how do you preserve the can's place in the grocery aisle and the center of the store when you've had so much in the way of template increases? Or are the capital issues associated with two piece and the lack of flexibility still sort of impediments and so, your share has settled out where it like from an industry standpoint now, where it likely will settle out in terms of 2 versus 3-piece? And part of the question behind the question is, if there was opportunity to move more towards a 2-piece, then that would be another way that you could, over time, balance the 12-ounce market in beverage in the US. What are your thoughts there?

Possibly, George -- this is Ray. The trouble with 2-piece is, you need a lot of volume in the same size. So start changing sizes or diameter or heights on cans, it doesn't bode well for 2-piece. You need to have 500 million, 600 million units in the same sized, otherwise it doesn't work for 2-piece. Yes, the 2-piece is probably a slightly lower-cost technology, but you got to have the volume. So over time, things with higher volumes have migrated to 2-piece, but a lot of which left in 3-piece, it's different sizes, diameters, shapes, and it doesn't have enough volume to justify 2-piece. So a lot of that has happened, I believe, and I think as long as -- let's face it, as long as steel stays competitive to the other product rates, food can is going to be just fine.

And one last thing to just play on that is, there is a very big infrastructure in place in terms of processing food cans. And to recapitalize that for no volume, that's a consideration on our customers' wants.

The next question is also a follow-up question from Chris Manuel of KeyBanc Capital Markets.

Just 2 quick ones. One is, and it kind of centers on the same thing, as you're looking out today at, you've been very active on the acquisition front in the last couple of years, and you've found some really terrific opportunities that you're moving forward with, how do you -- what are you seeing as you look out today? Do you find any opportunities or any specific geographies? How do you think about your product sets again, things of that nature?

Let me first talk generally about capital allocation, because that's what you're getting to, and then maybe I'll try as best I can to talk about specifics. We've created a lot of value at this company over the years by taking the cash flow and pulling it 3 ways: number one, through acquisition; number two, through investments, internally, through internal growth and CapEx projects; and three, through return of capital via share repurchase and dividend. That is not changing. In any given year, there's a relative prioritization that occurs, given the opportunity set that you see out there. We've been able to be patient and tenacious, at the same time, around some of these acquisitions, and we will continue to do so. We, as any company that looks at acquisitions, we at any given time, as the number of pokers in the fire, so to speak, and you never know when those will hit. And today is no different than it is right now. As Scott has said in his comments, that we are investing internally in CapEx, we've talked about that. Unless something else happens on the M&A side, we're going to be delivering the balance of our cash flow to share repurchase and dividends. So I know I'm not specifically talking about the acquisitions that you'd like me to, but I think it would be premature to do that.

That's fair. And, to be clear, I'm in no way questioning your ability to redeploy capital. You have an outstanding track record over the past few years of doing that, using all three of the levers you suggested. But as a follow up, as we think about the next, let's call it, 12 to 24 months, obviously right now you're in a bigger capital spurt as you're adding some capacity in numerous environments. And you've sort of laid out that $200 million is more of a maintenance level, given some of the commentary in the press release today. How does that move forward the next 24 to 36 months as you think about opportunities that you see today? Do you still continue to see more opportunities to deploy above maintenance-oriented capital levels, or do you think that moves back closer to that $200 million, $250-ish million level over the next few years?

Well, I think what we said is this is probably higher than what we'd expect as we go forward. Scott did mention that, certainly, in the January call. Again, it is opportunity-specific from the bottoms, up. We would expect our capital to be coming down, but at the same time, when we're -- if the markets continue to grow like they are, we want to be responsive to that. And a good example of that is the Aerocan business we recently acquired. We had thought we'd have to put capital in late this year or early next year to fund some of this growth, and it happened more quickly. So we're accelerating that a bit. It was always in our plans, but the timing of it relative to late this year versus earlier this year, that's a good example of how you can never predict this to an exact science. But we would expect over time, absent good projects out there, for it certainly become a now.

We do have a follow-up question from Chip Dillon with Crédit Suisse.

Sorry to drag the call on, just a real quick one. One of your big competitors has been on quite a tear in terms of building capacity, as you know. And it's very clear, I think, to a number of us, that they are probably going to down throttle quite a bit next year. And it may be early days, but you mentioned, John, opportunities. Do you think, if I -- let's just make the assumption that, that is their strategy -- that there might be increased potential for more plants like you're doing now in China and Brazil as we look at '12 and '13?

Well, it's always difficult to predict. We're very customer focused. We talked about that. And our philosophy around capital is we'll do it on the back of a long-term agreement with our customers. And we've been very successful in doing that. and to the extent our customers see value in continuing to do, we're going to consider it. But I do think it is premature to be talking about that. But we want to keep up, as Ray has said, that we want to keep up with our relative share of the growth, and we fully expect to do that.

And would it be fair to say -- I mean, again it's early days, but if you look at Brazil, a lot of what happened there, it seems like there's a bit of catch-up to handle the fact that they're importing cans, whereas my perception is that Asia still has a lot more to go. Is that -- as you look at your 3- to 5-year plan, would you agree with that, that probably relative to each other, that Asia has probably more potential than Latin America?

Well, I think that's generally true. And let me just give you 2 data points that would help support that. Number one, its largest beer market in the world in terms of overall consumption of beer. And number two, as Ray said, it's got a 4% or 5% can share as a percent of the package mix. So you combine those 2, and there's only one way to go for the can, whereas in Brazil, it is a good, strong growth market, but it already has mid-30s penetration.

And Mr. Hayes, there are no further questions.

Okay, excellent. Well, thank you Edison, and thanks, everyone, for participating our call. I have one announcement that we'd like to make. On October 10 and 11 here in Colorado, we're going to have an investor field trip. And Scott will be reaching out to others, but if you want to mark your calendars on that. And again, thank you for your participation. We look forward to catching up with everyone on our second quarter call.

Ladies and gentlemen, that concludes the conference call for today. We thank you for your participation and ask that you please disconnect your lines.