Ladies and gentlemen, thank you for standing by. Welcome to the Ball Corporation Fourth Quarter and Full Year 2012 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded, Thursday, January 31, 2013. I would now like to turn the conference over to John Hayes, President and Chief Executive Officer. You may begin, sir.

Good morning, everyone, and thank you, France. This is Ball Corporation's conference call regarding the company's fourth quarter and full year 2012 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. Factors that could cause results or outcomes to differ are in the company's latest 10-Q and in other company SEC filings, as well as company news releases. If you do not already have our earnings release, it is available on our website at ball.com. Information regarding the use of non-GAAP financial measures may also be found on our website. Joining me on the call today is Scott Morrison, Senior Vice President and Chief Financial Officer. You will recall that in November, the company announced Ray Seabrook, our Chief Operating Officer of Global Packaging, would retire at the end of 2012. Ray had a very long and very successful career at Ball, and we wish him all the best going forward. I'll provide a brief overview of our company's performance and then, Scott will discuss financial and Global Packaging metrics. We'll finish up with comments on our aerospace business and the outlook for 2013. Ball reported very good 2012 results in a challenging economic environment. This performance is a tribute to our employees and their dedication to controlling our own future and embracing our Drive for 10 vision. Drive for 10 progress in 2012 included: Maximizing value on our North American packaging, the beverage container business, by increasing our manufacturing flexibility through the expansion of specialty can production and reduction of standard 12-ounce capacity; broadening our geographic reach and growing with the right customers in markets in Brazil by installing a second line capable of making multiple sizes in our new Alagoinhas facility.…

Thanks, John. Ball's comparable diluted earnings per share from continuing operations for 2012 were $3.06 versus last year's $2.73, an increase of 12%. And in the fourth quarter, comparable diluted earnings per share were $0.64 versus last year's $0.48, a 33% increase. Also in the quarter, the company recorded after-tax charges totaling approximately $38 million related mainly to the previously announced closeout of a Canadian pension plan and costs associated with plant closures and a voluntary separation program tied to optimal staffing in our North American businesses and shared services. For the full year, the following factors contributed to improved results: Global metal beverage packaging volume growth of 3%; higher comparable operating earnings; solid program performance in our aerospace business; lower corporate undistributed costs and a lower share count. FX translation negatively impacted full year 2012 earnings per share by $0.09, and in the fourth quarter, by $0.01. Turning to free cash flow, Ball generated $548 million in 2012. Again, we returned every free cash flow dollar to shareholders via a net share buyback program of $494 million and dividends of $62 million. Net balance sheet debt at the end of the year was approximately $3.1 billion, only $153 million increase over 2011 despite our acquisitions in Mexico and [indiscernible], and acquiring nearly $500 million of stock. Credit quality and liquidity of the company remain solid, with the 2012 comparable EBIT-to-interest coverage at 5x and net debt to comparable EBITDA at 2.7x. Committed credit and available liquidity at the end of the year was in excess of $1 billion. For a complete summary of the fourth quarter results on a GAAP and non-GAAP basis, please refer to the Notes section of today's earnings release. Recapping segment performance. Metal beverage Americas and Asia segment comparable earnings were up both in the…

Thanks, Scott. Our aerospace business continued to perform well, with solid execution on existing programs and contracted backlog still above $1 billion. Being cost competitive has allowed Ball to win our fair share of government, aerospace and defense projects. Despite the ongoing lingering ambiguity about the U.S. government's finances and the threat of defense cuts, we remain bullish on this segment. As we transition to 2013 and looking out across the operations today, keeping in mind it is only January, a few observations to share. First, we expect the Americas, Asia segment earnings to be relatively flat in 2013. Due to the overcapacity situation that exists in China, we face pricing pressures there. And as you know, the loss of 12-ounce business in North America creates a trough from which to build. However, current specialty can demand trends in Brazil and North America have warranted additional capital investments and provide good growth opportunities in 2013 and beyond. In Europe, given lackluster economic conditions, we do not anticipate any near-term capital investments for beverage can's expansion. Instead, we have a strong focus on cost optimization initiatives across the region. Our global food and household product segment is busy integrating our new plant in Mexico, investing capital to meet the increased demand for aluminum aerosol containers. And we anticipate a more normal seasonal vegetable harvest here in the United States. In our aerospace business, while uncertainty still remains around the U.S. government plans on sequestration, Ball's strong track record should keep us well positioned for the long term, although depending on the outcome of sequestration, it could be a bit more lumpy than usual. All across Ball, we have a management team that understands how to generate incremental EVA dollars. Our company's cash flow is strong, and we are actively managing our businesses to align assets and cost structures to respond to dynamic market -- global markets. All in all, 2013 will be a year where we have many levers to improve our financial results, and more importantly, sets us up even better for 2014 and beyond. We have our hands on what we need to do to execute upon, and barring further deterioration in global markets or economic conditions, we continue to strive to reach our long-term 10% to 15% diluted earnings per share growth goal. And with that, France, we're ready for questions.

[Operator Instructions] Our first question, from the line of Anthony Pettinari from Citibank.

You referenced the pricing pressure in Asia, and I'm just wondering, is that -- did that pressure accelerate over the 3 months of the quarter? And then as we've moved into January, have you seen it -- have you seen that pressure abate or how is the beginning of the year?

Well, as we said, I think on the third quarter, that we anticipated pricing pressures in China, and that's exactly what's happened. The negotiation season was the fourth quarter and we did see pricing pressure there. Most of those negotiations are over now, and so as we go into '13, it's about execution.

Okay. And a couple of years ago, I think you disclosed that your market share in China was 31%. And I'm wondering given that you've been a little bit more disciplined regarding capacity than some of your competitors and maybe have walked away from some business, has your market share meaningfully changed from that 31%? Or can you provide any kind of quantification around that?

Well, I'll tell you, in 2012, we grew roughly in line with what the market grew. So our market share was relatively the same. We have delayed capital and have chosen not to add any significant capital in China going into '13, so we see our volume growth in '13 to be at or slightly below what the market is doing, so we could lose a little bit of market share. But what we're trying to do is make sure our business is as healthy as possible from a pricing perspective.

Our next question, from the line of George Staphos, Bank of America Merrill Lynch.

I wanted to go back to the Americas, Asia beverage can segment. As you look out to '13 now versus where you were, say, 3 months ago, has anything changed markedly? Would it be pricing in China or is the aggregate of profit performance and the complexion that drives that more or less as you anticipated back in September -- or October?

It really hasn't changed markedly, George. There's definitely some headwinds that we -- that John talked about, the pricing pressure, the loss of volume in North America. But our guys have done a great job responding to those issues and growth in specialty capacity, we're still seeing; growth in Brazil, we're still seeing. So it hasn't changed markedly. Some of the levers may have changed a little bit, but in general, we're still with the same kind of outlook.

Scott, considering that last quarter, you were talking about how, apparently anyway, good the growth in specialty can demand and opportunities was for you. And that seems like it's the case again this quarter. If I more or less hold that constant, maybe that's not the right assumption, it seems like the -- if there has been anything that's changed, it sounds like it's changed for the negative, it would be again the pricing in China. Would that be a fair statement?

Yes, I think that's a fair statement.

Okay. Now the -- in terms of guidance, in terms of striving for the long-term goal of 10% to 15%, does that suggest something more aspirational longer term? Or is that something you think is within your sights for 2013, remembering the company's old phrase, you'd rather be heroes in December than in January?

Yes. Well, I remember on the third quarter, I said that the -- our long-term range is 10% to 15%, and it's going to be quite challenging to get to the upper end of the range, but we're going to strive to get to the lower end of the range. And that's where we are right now. It is only January. Various things have to happen, but as we sit here right now, that we have some challenges on our hands, but we think that we can push -- if we push and are successful in many initiatives we have, we might be able to get to that 10% -- to the lower end of the 10% to 15% in earnings per share growth.

Okay. Last question, I'll turn it over. Can you provide a bit more color, commentary on the consolidation activities that you have ongoing in metal packaging in the Americas? You obviously have some charges in the fourth quarter in beverage, which have been well discussed and telegraphed, but also in food, you have some things going on. Is that mostly the integration of Mexico? What else is in there?

Yes, on the beverage side, everything is on schedule. We closed the Columbus facility at the end of the year, Gainesville will close in the first half of this year. All of that's on track to what we expected. On the food side, that was the closeout of a Canadian pension plan, so where we had annuitized it. And we talked about that in the third quarter call. And then we're really excited about the acquisition that we made down in Mexico and the opportunities there going forward in 2013.

Our next question, from the line of Scott Gaffner with Buckingham Research (sic) [Barclays].

Still at Barclays. On the Asia business, can you just sort of parse that for us? I know you've got a large position in China, but what are the other regions there? And what are you seeing as far as price pressure outside of China?

Well, the only other places we really operate outside of China is our joint venture in Vietnam and we have a small interest in Thailand. I think generally speaking, we are seeing some pricing pressures, but it's not terrible. But I -- if I commented on any other region, I don't think it'd be fair because we don't sell into those regions.

Okay. And then are you seeing any bifurcation between alcoholic versus non-alcoholic cans? Is that anything that you're seeing in the market? And then also, just the impact of the Chinese New Year, how much is that impacting the -- both the fourth quarter and the first quarter?

Yes, I think your question is from a volume perspective, and you're right, the Chinese New Year is a bit later this year. And so as we sit here towards the end of January, we've seen some reasonably strong growth in the month of January in our business over in China. And I think it has to do with the Chinese New Year. It's been extremely cold in China, and so I know beer has been soft. I think the overall market was a bit soft in the fourth quarter. But I think it's more weather-related. If you followed the weather, Northern China in particular was extremely cold and extremely snowy. And so that had some impact in the fourth quarter.

Okay. And then just lastly, on North American specialty can mix, where do we end the year on mix of specialty as far as the total can mix in North America? And what's the outlook for 2013 as you bring more specialty cans into the mix?

Yes, I think our percent was in the 17%, 18% range for 2012. And as we look to 2013, we have some exciting things going on, on our specialty business, so we expect to see some continued growth in that. Whether it's on the smaller sizes, 7.5-ounce, whether it's on the sleek, which is a 12-ounce but a different shaped container, or on some of the larger sizes, we see good growth there. And I think part of it has to do with new housing starts are beginning, and that's good middle-class jobs that are the big consumers of those types of packages, as well as unemployment in the 21- to 34-year-old range, year-over-year went from over 9% to about 7.7%, 7.8%. So we've seen a pickup in the core beer consumer as well.

Our next question is from Ghansham Panjabi from Robert W. Baird. Matthew R. Wooten - Robert W. Baird & Co. Incorporated, Research Division: It's Matt Wooten sitting in for Ghansham today. I was hoping that -- on a longer term basis, what do you anticipate as a sustainable number for growth CapEx? As I recall, maintenance CapEx is about $200 million a year.

Yes, that's a good number to use for maintenance CapEx. Growth CapEx depends on the opportunities that are there. We really look to deploy capital wherever we think we can make attractive returns, and how fast that comes changes over time. If you look back, last year our capital spend declined throughout the year, that's why we had so much pushed into 2013. And so we're always adjusting our capital plans based on what the world looks like. So it's hard to predict long term, 3, 4 years from now, what that might look like because it really depends on global growth. Matthew R. Wooten - Robert W. Baird & Co. Incorporated, Research Division: Okay. And then from your customer base, 2012 seemed like a year that was a little light in terms of promotional activity. Have you received any indications that promotional activity will pick up in 2013, either from soda producers or beer producers?

I think it's too early for them to have a strong view of what they're going to be doing in the summer of 2013. That's probably better asked at the end of the first quarter just because it's January and they still have 4 to 6 months to when their big selling season really begins.

Our next question is from the line of Chris Manuel from Wells Fargo.

A couple of questions for you. First, if we could talk a little bit about where you feel your utilization rates are in beverage. If you were to kind of walk around the globe and talk about China, Vietnam, Brazil, Europe, North America, et cetera, I know you talked about maybe seeing a little bit of growth in some of those regions, but you're not putting a lot of capacity in. So just trying to get a sense of where your utilization rates are.

Yes, you often hear us talk about trying to make sure that our supply matches our demand, and that's exactly what we do. In North America, I think we even said this on the third quarter, in 2013, we're real tight with the closure of the Columbus facility. And so I think we're -- our utilization rates are, are very high there. In China, they also are very high, and that's the reason why I said in 2013, while the market's probably going to grow a little bit stronger than we are because where the pricing is, we want to make sure the pricing is right relative to the cans that we sell. And so we do have a little bit of line speedups here and there that's part of that carry-in capital Scott was mentioning. But nothing significant and we're keeping a very close eye because there is a fair amount of overcapacity from an industry perspective, but you don't see it in the Ball system. Brazil, obviously, we're adding a new line there, and so we're running full out there. And then in Europe, I said on the third quarter that longer term, we would expect to look at some capacity there. But in the short term, we're focusing on costs, and that's exactly where we are going into 2013. The market grew mid-single digits in 2012. We expect about the same in 2013. That's going to make us very tight in Europe as well.

And I guess my follow-up with this is, you're going to be spending -- [indiscernible] the math question -- you're going to be spending about $200 million in return-oriented, growth-oriented capital this year. Can you maybe -- I know it's going to be a long list of projects, but could you kind of bucket maybe a few categories or maybe by segments where a lot of that capital is going? Is most of it targeted to beverage? Is most of it targeted to speedups or is it aerosol capacity or other different pieces like that?

Well, it's where the growth is, Chris. It is specialty cans in North America and in Brazil -- John mentioned an additional line down in Brazil. We're finishing up some things from last year, some speedups that we were doing in different places. We're seeing nice growth in aluminum aerosol. We think there's opportunities with the Mexico acquisition, to add capacity there. So it's in a variety of places.

Yes, the only thing I'd add on to that, in North America, we are adding specialty capability in some of our standout -- standard 12-ounce facilities, and that's one of the reasons why that carry-in capital's large, but most -- actually all that volume is contracted already. And so it's good return projects.

Our next question is from the line of Phil Gresh with JPMorgan. Phil M. Gresh - JP Morgan Chase & Co, Research Division: First question, just getting to the guidance around Americas, Asia being flat for this year. Could you give us a sense, just between North America, China, Brazil, how to think about that? I mean, is it fair to say North America down, China flat, Brazil up? Or just give us a rough sense of how you're thinking about it.

We normally don't break that out, but I think your intuition is generally correct. Phil M. Gresh - JP Morgan Chase & Co, Research Division: Okay. And the reason I'm driving at this question is it kind of comes back towards this long-term guidance goal of the 10% to 15%. Clearly, there's some transitional elements to 2013 related to the business lost in North America. So I'm just trying to get a sense of hypothetically, if we have 8% EPS growth this year. There's a certain element to that, that should come back just as we lap that. I'm trying to just kind of calibrate how to think about that.

Maybe from a contextual perspective, we can help create some sort of bridge here. We talked about Americas and Asia being relatively flat. Europe, depending on what happens there, there ought to be a little bit of upside in Europe. But obviously, with the economic conditions there, it's premature to bank on that. Our food and household products business ought to be up. We had a very difficult 2012, and our folks performed very well there. How much up is a question of what the harvest looks like. And then we have the new Mexican facility, the impact extruded business that contributes to that. And the European impact extruded business, we continue to do reasonably well there. And then on the aerospace, we don't expect much upside at all in that business, particularly in light of the uncertainty around sequestration. And then the corporate, I don't -- Scott said it was going to be relatively flat. So that provides coordinate income of up in the low single-digit range. And through the use of our cash flow, it gets up to the -- that's where we think we have a shot towards the lower end of our long-term goals. Phil M. Gresh - JP Morgan Chase & Co, Research Division: Got you. Okay, that's very helpful. And then just on China, I mean, you did make the comment, I believe, Ray did on the last call, that volume would be up, and you'd be kind of clawing back to negative price in 2013. So I mean, do you think China, specifically, will grow earnings this year? Or how do you think about that?

I think it's going to be challenging, too. As we said, we've retarded any meaningful growth cap on that area, and so we expect our volumes to be at or slightly below what the market's going to be doing. And I think given the pricing challenges, it is going to be a bit difficult. Now having said that, let's put this in context. There's overcapacity of 20% to 25% in Asia. It is growing in the mid-teens. And so that's 18, maybe 24 months of excess capacity. And so as we're looking into 2014, it's about getting our pricing in a position as we go into 2014 where we have a lot of operational leverage. Phil M. Gresh - JP Morgan Chase & Co, Research Division: Okay, great. I guess the last question is just around the volume growth outlook for China. I think at some point this year, the growth rate had been slowing to something below mid-teens. So could you give us a sense of where that reacceleration may be occurring, what end markets specifically?

Yes, I do think it's across most of the end markets in China. I think the slowdown was largely weather-related. As I mentioned, it was extremely cold. But we have a pretty good handle on where can filling capacity is going in on the beer side, on the CSD side, on the tea side, on the energy side. And as a result of that, we continue to see the overall market being -- growing in the double-digit range.

Our next question, from the line of Philip Ng from Jefferies & Co. Philip Ng - Jefferies & Company, Inc., Research Division: Europe, at least actually on a bev can side, actually grew at a mid-single-digit rate, which is pretty healthy. But your comments for 2013 sound like you're generally a little more cautious. So you're expecting a little slower growth on the bev can side with tougher comps or just the macro?

No, not particularly. I think you're parsing our words a little bit more than we intended. We -- as we said, we grew mid-single digits for the year in that. Now remember, it was an even-numbered year, and so there are some special summer things going on in terms of European Cup, the Olympics, that we're not going to have in 2013. But where we see the -- we still see low- to mid-single-digit growth in the European market. Philip Ng - Jefferies & Company, Inc., Research Division: Okay. So from a pricing standpoint, things were -- you've seen some erosion, but sounds like the market's tightened up a bit. So how should we be thinking about pricing in Europe for 2013?

I don't think -- I think we've hit the trough. We talked about price, some of the price pressure, but that's why we're focused on internally on things we can control on the cost side and not adding capacity until we get the price equation a little bit better. Philip Ng - Jefferies & Company, Inc., Research Division: Okay. But you guys haven't settled out your contracts on pricing, because I thought you guys typically settled out year end of 2012.

Yes, we've largely settled out, and what I would say is relative to 3 months ago when we were on the call, the pricing environment is a touch more healthy in Europe than it was. Philip Ng - Jefferies & Company, Inc., Research Division: Okay. And then I know it's early in the year, but you guys were commenting on the pack, you're expecting a more normalized pack. What about demand for aerosol?

Go ahead, Scott.

Yes, demand for aluminum aerosol is very strong. For tinplate aerosol last year, it was -- kind of bounced around. The fourth [ph] quarter [ph] was very good. But overall, we feel pretty good about the aerosol business.

Yes, I think long term, the steel, the tinplate aerosol business here in North America at least, is probably 0% to 2% growth type of market, GDP type growth, and we don't expect any meaningful changes in that. Philip Ng - Jefferies & Company, Inc., Research Division: Okay. And then on the steel tinplate side, anything to think about for 2013 with holding gains and all that stuff?

No, it should be relatively flat. There's not much going around on either way.

Our next question is from the line of Adam Josephson from KeyBanc.

Are there any regulatory developments that particularly concern you, for instance, the potential for minimum pricing in Britain, the tax increase on beer in France or otherwise?

We're always facing regulatory issues and not only in -- for Ball Corporation, but I think business at large. I think on a global scale, regulation is only increasing, not decreasing. And so as we sit there, the things that you mentioned, those things don't concern us of anything in materiality -- from a materiality point of view. And so I would say, based on the things that you mentioned, no.

Great. And then just, John, the acquisition pipeline. How would you compare it to what it's looked like in previous quarters? And what areas might you be looking at most closely?

Yes, I don't think it's all that different than over the past, certainly past 6, 12 months. We continue to see opportunities in metal packaging, whether it's on the aluminum impact extruded business, the beverage can business. Just think last year, we did something in the beverage can business, we did something in the aluminum impact extruded business as well. And I think those types of things, whether they're small or a bit larger are still out there, and we keep our nose to the grindstone in making sure that we have a good understanding of what's going on and what, well, candidly, we're willing to pay for some of those assets.

Our next question, from the line of Chip Dillon with Vertical Research.

First question has to do with the specialty can business, which obviously is really carrying the day in terms of growth in North America. And yet, it seems like from just what I've heard that in Europe, the specialty can business where it's been more of a presence for a longer period of time doesn't really share the same margin and growth spreads to standard cans like we see here. And so I just want to know if that's what you all see. And secondly, do you see a time where the specialty segment here in North America might slow down or we might see some margin compression versus the 12-ounce?

Yes, I think in Europe, you are right, it's been around longer, but we still had good growth in 2012. I don't have the number off the top of my head, but I know at the end of the third quarter, it was around 8% or so. So it's above the market growth and certainly not what we've seen in North America. I do think that when you have line changeovers and other things, that it adds a bit of complexity into the system. And we need to get paid for that complexity. And so I don't think that necessarily changes. To your point, North America around the slowdown of specialty growth, yes, it's obviously, at some point in time, the base gets bigger and the growth slows down. But many of the fast-moving consumer goods companies, whether it's on the beer side, whether it's on the CSD side or even some other categories, energy, those types of things, they're continuing to look for ways to add value into the products that they sell. And they're finding good value in terms of the specialty cans that we produce, and that's why we've been seeing the growth.

Got you. And then sort of as a follow-on, sort of looking beyond the very near term in China -- that's sort of been discussed quite a bit already. But if we go back to, say, 15 months ago when we were out in Colorado and we were talking about the long-term for Ball and for the business, one thing that really struck -- jumped out was, at least to me, was how beer, only about 5% is -- was at that time in cans in China, whereas it was 38% in Brazil and I think over 50% here in North America. And it would seem -- do you think that there is a, if you will, a slower adoption rate than you thought? Or do you think -- do you continue to see a reason why you wouldn't see the can in beer adopted in China in increasing measure like we've seen in all these other places?

Yes, nothing fundamentally has changed there. It really gets into as new capacity is brought on are they putting bottle capacity or can capacity? And we see a fair amount of can capacity coming on. Remember, it's -- the China beer market is such a large market that I know even now, as we sit here a year ago -- a year later, it's up to 6%, 6.5%, which isn't a huge number percentage terms, but in terms of volume, that's where a lot of the growth is coming from. And so will it ever get to the 50% that we see in North America? That's a stretch, obviously. But I do think based on the conversations we have with our customers and seeing where they're putting their capital, that we expect to see over the long term, a continued increase in the penetrations of cans into the beer market.

Okay. And then lastly, it's -- your CapEx number is a bit elevated for '13. Where do you think that would trend in '14 and '15? Let's say if you do get the kind of year you're planning for right now, and of course, we know things can change. But if it turns out to be net income up in the low single digits and EPS up close to 10%, do you think that CapEx number would likely rise? Or I mean, if -- still trail off or could it stay where it is or rise?

Well, we always think that it will get closer back towards depreciation because you don't have as good a visibility on some of the growth opportunities. So it's really dependent on how fast those growth opportunities materialize and how many there are. The world's slowing down, and frankly, if you asked us that same question last year, we thought it would come down this year. But we had so much carry-in capital that you really got to look at the 2 years in total versus just 1 year. So over time, we think it would come down a bit because when you're going through bigger growth spurts when we're building plants, that takes a lot more capital. When you could add new lines like we're doing in Alagoinhas, the incremental capital isn't as much.

[Operator Instructions] Our next question is from the line of Alex Ovshey with Goldman Sachs.

The planned cost reductions that you have for North America from the capacity closures, how do you see that flowing through the business through the year?

Well, we said the Columbus facility was closed at the end of the year, and the Gainesville facility is going to continue to operate for a little bit into this -- into 2013. So you'll start to get those benefits as we move later into the year.

And so some of the cost reduction is going to flow into '14?

No, the cost -- all this will be -- you're going to start seeing all the benefit here as we move into the year.

Okay. And then just on the pension, did you guys update us on where the pension plan ended up and what you see your pension expense contribution to be for '13?

Yes, we ended up funding quite a bit more than expense in '12, about $60 million more than expense in '12, just because the cash flow was so strong. In 2013, we think we'll fund about $20 million more in funding versus expense.

Our next question is a follow-up question from the line of George Staphos, Bank of America Merrill Lynch.

I wondered if -- peer in a little bit more to the extent possible on the Americas profitability and the progression you expect there. If you consider the cost reductions that should help you this year and also the additional volume in specialty cans, is there a way to ballpark how much that might help you this year relative to the ultimate volume loss that you suffered going into 2013?

George, you're getting to a level of granularity that I wish we could be as specific as possible. But the reality is when you think about it, let's take a step back. For that segment going into 2013, we've closed the Columbus facility. As Scott just said, we expect to get the fixed cost benefits from that, that offset a lot of the variable margin that we had from the lost business. As we go into the second quarter and with the final closedown of Gainesville, we'll start to reap all of that. And then the second half the year, we're going to have the second line in Alagoinhas come up. And so when you think about all those things, I think we're going to have -- as the year goes on, we're going to have more momentum going into that segment, all things being equal.

Is it possible that within North America, if there's a way to parse that, that your EBIT might actually be flat considering the incremental margin from specialty and the cost reductions, which you said are more or less offsetting the variable margin on the volume loss? Or is that a heroic expectation at this juncture given where you sit?

Well, that's the trough that we're faced, and in my prepared remarks, that's why I said, well, it's a trough, but we're clawing out of it. And it's only January, George. So let's talk later in the year to see how specialty goes. But we have a reasonable shot, and that's what we said on the third quarter. And as Scott said, our outlook on that really hasn't changed materially.

Understand, guys. Just wanted to get a little bit more color -- or granularity, as you said. The last question I had is if we are having this conference call 3 years from now and we can project forward the aerosol business for Ball Corporation, do you see it being as meaningful a business as -- or it's not going to ever be as large as your beverage can business, but will we be talking with it -- about it in almost the same tone as a significant driver of your growth and future profitability? Is it that strategic to you and how do you see that evolving? Sorry for the broad question there, but I think it's an interesting element to your story longer term.

Yes, it's obviously from -- let's talk about from an overall market size perspective. It is significantly smaller than the 270-odd-billion beverage cans around the world. We're talking in the range of upper-single-digit billions of units. So obviously, it's not going to have that. But the business model is quite different because the capital and output ratios are quite different than the beverage can business. I would not expect 3 years from now to be talking it in the same size and tone of the beverage can business for Ball Corporation. But I will tell you this, we continue to have good growth opportunities. Some of that carry-in capital Scott was mentioning is in the impact extruded business. And so as that market continues to grow, we're going to be focused on it.

Last one on this -- John, do you see that business broadly offering different types of metal packages than what it's doing right now, which is aluminum extruded aerosol cans? Are there opportunities to take that technology as it's used to some degree already in beverage into food applications and to other end markets? How would you have us consider that?

Well, I do think over the next several years, George, the greater opportunity is not so much in food, but probably beverage. Just think about what we've done with Alumi-Tek. It's been a year [ph] in North America and it's been quite successful. And we have a whole suite of bottles now, ranging from a DWI bottle, the Alumi-Tek all the way to the impact extruded and everything in between. Impact extruded is more relevant when you have smaller runs, and you have more differentiation, you can shape it. And the sizes of it, you can make a bit different than you can on something like the Alumi-Tek. But there are continued opportunities on the Alumi-Tek side as well. So does that answer your question?

Yes, that was great. I appreciate it.

Our next question is another follow-up from Chris Manuel from Wells Fargo.

I just wanted to focus on the aerospace business, if I could for a second. As you look at the mix of business there, and I know you've told us this or disclosed this in the past and I just don't remember, the mix of business between, let's call it department -- or DOD or different elements in there, can you remind us of that?

Yes, more than 50% of it is in the DOD business. And when you partial that out, the preponderance of it are in the big, I would call it, strategic programs, satellites and things like that. And we do have a couple of other businesses in terms of the tactical products, antennas and other things for everything from the Joint Strike Fighter to other applications like that. And then we also have a services business that takes all that information and turns it into usable data. But like I said, 50% -- probably 50%, 60% of our aerospace business is directly DOD.

Okay. And as you think about full year 2013 versus 2012, and I appreciate there's some -- a little issue that might come up in midyear here that could impact things. How would you anticipate '13 might look versus '12? I mean you had some -- it looked some pretty good payments come in in 4Q that may or may not repeat next year. But could you maybe give us a sense of can it be a flat year for EBIT? Or do you think you could still have a little improvement? Or is it just too difficult to look at right now?

It really is really difficult to look at right out just because with the potential for sequestration out there. I will point out that at this time last year, our backlog was -- upper 800s, $890 million or so, and we're well over $1 billion right now. And so that just goes to show why we keep saying long term, we feel pretty good about this business. But as I said in my prepared remarks, because of the sequestration, it could be a bit more lumpy than we're used to. But we just don't have visibility into that yet.

We have another follow-up question from the line of Phil Gresh from JPMorgan. Phil M. Gresh - JP Morgan Chase & Co, Research Division: Just on the working capital front. You guys have done a really solid job here for 2 years in a row, and I'm just curious, Scott, how you're planning for that in that guidance for 2013 free cash flow.

Yes, really, all the guys have done a great job on the working capital front, whether it's managing inventories better, collecting receivables better, extending payable terms. It's been a really broad effort that a lot of people have been involved in and it's worked very well. We think there's still a little more to go on the working capital front in '13. We're still not where we think we need to be longer term, so we think there's still a little bit more upside in that. It should be a source in '13. How big I don't know. Phil M. Gresh - JP Morgan Chase & Co, Research Division: Got it. Okay, okay. And then just on the pension, you said it's $20 million contribution in excess of the expense. Is that just for the U.S. plan or is that the total? Like what's the absolute dollar there?

That's total, that's total.

Mr. Hayes, we have no further questions at this time, sir. I'll be turning the call back to you.

Okay, great. Thank you, all, and thank you, all, for participating. And we look forward to what will hopefully be a challenging but productive 2013. And we'll talk to you all on the April call. Thanks.

Ladies and gentlemen, this does conclude the conference call for today. Have a great day, everyone.