John W. Conway – Chief Executive Officer and Chairman Thomas A. Kelly – Chief Financial Officer and Senior Vice President Timothy J. Donahue – President and Chief Operating Officer.

Christopher D. Manuel – Wells Fargo Securities, LLC Al Kabili – Macquarie Capital, Inc. Ghansham Panjabi – Robert W. Baird & Co. Debbie Jones – Deutsche Bank Securities Mark Wilde – Bank of Montreal Chip Dillon – Vertical Research Partners Philip Ng – Jefferies & Company, Inc George L.

Staphos – Bank of America Merrill Lynch Alex Ovshey – Goldman, Sachs & Co. Tyler J. Langton – J. P. Morgan Securities LLC Scott Gaffner – Barclays Capital Inc. Adam J. Josephson – KeyBanc Capital Markets Inc. Alton Stump – Longbow Research.

Good morning, and welcome to Crown Holdings Third Quarter 2014 Earnings Conference Call. Your lines have been placed on a listen-only mode until the question-and-answer session. Please be advised that this conference is being recorded. I would now like to turn the call to Mr. John Conway, Chairman of the Board and Chief Executive Officer.

Sir, you may begin..

Thank you very much. Good morning, everyone. With me on the call are Tim Donahue, President and Chief Operating Officer; and Tom Kelly, Senior Vice President and Chief Financial Officer.

I will make some brief introductory comments regarding the Company’s performance in the third quarter and then turn it over to Tom Kelly who will take you through the numbers and give you some additional detail. Tim Donahue will review carefully the performance of the various businesses and discuss our views as we look ahead as well.

Let me remind you that on this call, as in the earnings release, we will be making a number of forward-looking statements. Actual results could vary materially from such statements.

Additional information concerning factors that could cause actual results to vary is contained in the press release and in our SEC filings, including comments in the section titled Management’s Discussion and Analysis, the Financial Condition and Results of Operations in Form 10-K for 2013 and in subsequent filings.

The Company had a very good quarter from virtually every standpoint. Demand for our products held up very well, particularly in European food cans and Asian beverage cans. Our European beverage group did an outstanding job through operational excellence and cost controls in offsetting the increases during the quarter in the regional aluminum premium.

Globally, our relatively new beverage can plants in China, Southeast Asia, Brazil and Turkey continue to improve their operations as they ascend learning curve. They are settling in as outstanding performers.

Our significant acquisition closed in April of this year of Mivisa, the leading food can company in Spain and Portugal, continues to progress very well. The company is being fully integrated into our operations in Europe, the Middle East and Africa and the excellent people at Mivisa are fitting in quickly and making great contributions.

The synergy process is well underway and on plan. We are also very pleased to have been able to conclude an agreement to purchase the leading beverage packaging company in Mexico. EMPAQUE is the leader in beverage cans in Mexico, the leader in the Western Hemisphere in bottle caps, and a leading glass supplier in Mexico.

As with Mivisa, we are acquiring a first grade company which has outstanding people, modern management and manufacturing processes and an outstanding asset base of excellent factories. We could not be happier with an acquisition than with this one.

We thought it would be well to talk with you about the impact of these two significant acquisitions, Mavisa and EMPAQUE on Crown, and the prospects that we see for Crown in total as we look ahead. First, our Company will be significantly bigger and stronger in key markets as a consequence.

We anticipate the sales for 2015 will be approximately $10 billion, with a substantially stronger food can business in Europe and likewise a very much strengthened beverage packaging business in North America.

We monitored for many years opportunities in food can business in Iberia and in the beverage packaging business in Mexico, hoping that we would have an occasion to make sensible acquisitions at reasonable values.

Fortunately, opportunities arose in both places and in a relatively short period of time we have been successful in securing these two excellent companies for Crown. We saw the impact of the Mivisa acquisition in our results in the third quarter.

We believe that Mivisa will continue to make significant contributions to the overall financial performance of the company and then EMPAQUE will also have a strong beneficial impact. Kelly will provide metrics to you in a moment.

Then we’ll give you an indication of how we think the company will do as a consequence of these two acquisitions and all of the other actions that we have, have underway in the last several years, including, most notably, investments in emerging market beverage can capacity and consequence of strong organic growth.

In the past we have provided earnings guidance for the immediately upcoming quarter and the annual guidance has been provided after the fourth quarter. Today, in light of these significant changes at Crown, we felt it would be appropriate to give you our thinking concerning the company’s prospects over the next 15 months.

We will have or continue to provide more specific earnings guidance in our call with you in January reporting 2014 results. As we look at the two transactions that I mentioned earlier and our other activities, we believe that Crown has never been stronger and our prospects are excellent.

We are the clear global leader in metal packaging and number one or number two in almost every market in which we participate. Our plants are low cost and all costs are actively managed and tightly controlled. Our segment income margins bear this out.

In addition, we believe we are the technology leader in all of the metal packing areas that we have chosen to pursue. We have an intense focus on our operations and all of our people understand that every day, every week, every month we need to show continuing improvement.

Finally, it has been many years since Crown last made a larger acquisition, although it was not because we did not look for opportunities. We simply did not find things that met our criteria for quality of the asset available, attractiveness of the market involved and the value being soft by sellers.

As I mentioned earlier, we were fortunate that when the excellent opportunities arose we were able to take full advantage. Change does favor the prepared mind. So with that, I’ll turn it over to Tom Kelly who will give you more detail on the quarter and our thinking about the future..

Thank you, John, and good morning. Diluted earnings per share for the third quarter were $1.76 versus $0.73 in 2013. Diluted earnings per share on a comparable basis were $1.36, compared to $1.04 in 2013.

Net sales for the third quarter increased 9% over 2013, primarily due to higher European food can volumes, including contributions from the Mivisa acquisition that closed in April of this year.

Segment income for the third quarter was $328 million with the improvement over the prior year driven by the results of the European Food and North America Food segments. The impact of a lower tax rate on the third quarter results was a benefit of $0.06 per share, compared to our prior guidance.

We currently estimate 2014’s fourth quarter comparable diluted earnings per share of between $0.41 and $0.51 and full-year comparable earnings of between $3.37 and $3.43 per share. This guidance includes a negative impact of $0.04 per share versus our prior guidance due to the recent weakness in the Europe.

I give some background on the level of our exposure to the euro approximately 30% of our global sales originate in euro countries with Spain, France and Italy accounting for the majority of those euro sales.

To quantify the sensitivity, a $0.10 change in the average euro exchange rate in one year has a net earnings impact after interest and tax of approximately $0.12 per share. Movements in the euro do not have a significant impact on our debt leverage ratio because we have hedged that exposure with euro denominated borrowings.

We currently project a 2014 full-year tax rate of approximately 25%, and are maintaining our estimate of free cash flow for the full-year of approximately $500 million. Looking ahead, we plan to use our cash flow in 2015 and 2016 to reduce net debt with a target leverage ratio of approximately three times at the end of 2016.

We currently estimate that 2015 earnings per diluted share will be 10% to 15% higher than 2014 earnings assuming an average euro rate of $1.28 for 2015. Tim will now take you through the operations..

Thank you, Tom, and good morning to everyone. As both John and Tom discussed performance in the third quarter was strong driven by higher beverage can volumes throughout many developing market, notably Turkey and Southeast Asia.

Excellent manufacturing performance throughout and the strong European food can demand coupled with the integration of the Mivisa business. In Americas Beverage, sales volumes were off 3%, as growth in South America up 2%, it was offset by a 5% decline in North America.

Through nine months can volumes in Brazil were up 16% and while the market did cool post the World Cup demand remained firm throughout the third quarter. As we stated in July, we believe we will see a solid summer selling season through our fourth and first quarters.

Our new plant in Teresina continues to progress after beginning operations in the second quarter and we’ve recently completed the construction of a third beverage can line in Cabreúva, which will be dedicated to specialty can sizes. Commercial shipments will be commenced next week.

As noted on prior calls, specialty cans represent about 35% of the overall can market in Brazil and we are well positioned at all four of our can body plants of multi-sized capability. North American food can volumes were down slightly in the quarter, the result of an earlier pull ahead into the second quarter as previously discussed in July.

Favorable mix and strong operational performance continue to drive excellent results in this business. Unit volume sales were down 2% across our European Beverage operations as results in Turkey, Spain and the UK almost fully offset softer Middle East demand. Volumes in the Middle East while down, came in better than earlier anticipated.

Excellent manufacturing performance continues to offset the impact of rising metal premiums. European food can volumes increased 41% in the third quarter due primarily to the contribution of the acquired Mivisa businesses and strong shipments from the legacy Crown factories across many countries including France, Germany, Greece, Italy and the UK.

The market was strong almost everywhere as beans, corn, peaches, and tomatoes all delivered good yields. If we were to exclude Mivisa, our shipments were up high-single to low-double digits in the quarter.

This is a rough comparison and it will be the last time we try to break this out, as the integration is now too far along the properly measured as going forward. Unit volume sales of beverage cans in Asia-Pacific were up 10% in the quarter on the back of strong demand in Cambodia, Thailand and Vietnam.

Segment income benefited from the increased volumes as well as continuing manufacturing improvements across the number of facilities. As John discussed, we feel very fortunate to have acquired both Mivisa and EMPAQUE.

Both companies not only contain excellent personnel and manufacturing assets, but also operate in markets with opportunities for continued growth.

We have significantly strengthened our profile in the European Food and North American beverage can markets and have capitalized low cost, high-performing assets on to our balance sheet at historically low interest rates, leading us to believe we have completed these acquisitions at very attractive multiples and created value both in the near and long-term for our stakeholders.

The benefits of these two acquisitions coupled with ongoing growth in numerous developing markets and continuous improvements to manufacturing performance provide much confidence for the future here at Crown. With that, I will hand it back over to John..

Thank you, Tim. And surely I think we’re now ready for questions please..

Thank you. At this time, we’re ready to begin the question-and-answer session. (Operator Instructions) And our first question today comes from Chris Manuel with Wells Fargo. You may ask your question..

Good morning gentlemen and congratulations on a strong quarter..

Good morning, Chris..

Thank you..

I very much appreciate the extra color looking into 2015. It’s kind of a first cut at how you think things will look, but I kind of want to take a step back and try to get a sense as to where the company could be in a few years out.

So, I mean, if we take legacy Crown, you were capable of generating $450 million to $500 million of free cash flow and had the last several years. As you’ve now got Mivisa into the fold and look to getting EMPAQUE in towards the end of the year.

As you look forward to, maybe it’s not 2015, but 2016, 2017, is this free cash flow something that could be low-to-mid-600 millions, or how do you think about – as you spoke of bringing value to the table by doing these acquisitions, how do you think that will translate into cash flow?.

Well, Chris, thank you very much. And we thought you’d depreciate the look into 2015 and we hadn’t anticipated that you’re going to jump into 2016 and 2017.

But having said that, yes, I mean we think that we’re on an awkward trajectory here and all performance measures and free cash flow is a big one for us, as you know, because the business throws off a lot of cash and typically cash well in excess of our CapEx requirements, even with a lot of growth around the world.

So, yes, we think things should improve. I don’t know, Tom, you want to try to look into 2017..

I don’t think so, John. I don’t think we’re quite ready to give cash flow for 2017, but I agree with the general premise, Chris, that the acquisitions will be added to the historical cash flow..

Okay. If I could follow-up with the EMPAQUE stuff. Again, that’s slightly closed towards the end of the year, I believe, right? And, second, is there anything – could you give us a sense as to what you have to negotiate contracts for that business as it is largely takeout liftoff from Heineken.

Do you anticipate the contracts being significantly different than those in your beverage business today? And how do you think glass as a new business for you? How do you think those will compare to potentially contract there for timing and mechanisms for pass-though and such compared to what you have in your present business today?.

Yes, Chris, we anticipate and we know already as a consequence of due diligence that the nature of the contracts of longer-term, medium-term contracts in Mexico is very, very similar to the U.S. and Canada. So we’re very comfortable with that.

And as to the glass business, it’s our first experience with glass, but we’re very pleased with this particular business, it’s a one plant, but adjacent to a major customer with a long-term contract.

And the glass businesses as we now understand has pass-through formulas that we’re very comfortable with and so we feel real good about the whole package..

Okay, that’s helpful. Thank you. I’ll jump back in the queue..

Thank you..

Thank you. Our next question comes from Al Kabili with Macquarie. You may ask your question..

Hi thanks, good morning, and I appreciate again the color on 2015.

Can you just clarify on that outlook what you’re assuming for pension? Does that include the lower interest rates we’ve recently seen? What kind of headwind that could be giving us next year? And I assume you’re using current FX as well in your assumptions for 2015?.

Yes, the currency exchange rate for the euro is $1.28, so I can tell you that as far as the pension, we’ve included a range to account for things like pension and many other assumptions that can go different ways.

So we won’t really know the pension number until the end of the year, but for now, we have put a placeholder of a range and that accounts for part of the reason we have a range..

Okay, I appreciate that, thanks Tom.

Tim just switching over to aluminum premiums, can you help us with what the headwind ended up being in both the Europe does business and also Americas does in Brazil in the third quarter? What the spillover headwind we should be thinking about is for those segments next year? And if you can continue to offset the premium headwinds with productivity you did a nice job in the third quarter, how sustainable is that piece of it?.

So I could say in the third quarter the impact of higher metal premiums compared to the prior year in the range of $6 million, $7 million, $8 million headwind in the third quarter, in Brazil a couple of million dollars. I think our full estimate for the year is still around $20 million as we’ve provided to you earlier back in the second quarter.

As we look ahead, the next year clearly, as you know, the premiums have gone higher and there will be a further headwind to experience next year if we don’t, as an industry, begin to amend contracts and properly past these group.

Having said that, we’re going to continue to endeavor to offset these cost as we have this year we have new team in beverage in Europe and they’re doing a very good job as you can tell operationally and our goal is to offset as much of this cost as we can..

Yes, if I could add one thing to the extent that in Europe, in particular, we come off contract at the end of this year and we’re now talking about pricing for next year we will of course adopt the proper cost base for aluminum and everything else as we said prices for next year, but to the extent that we have multiyear contracts as Tim said, we either have to renegotiate or we have to live with them.

So we’re aware of that and that’s all included in the guidance that Tom Kelly gave you earlier..

Okay, I appreciate that. All right and then the last one is on 2015, I don’t know if you gave us sort of an estimate for free cash flow, but maybe some of the pieces as far as how you see CapEx if there is any sizeable cash restructuring costs next year to be thinking about, I think you closed a food can plant I think I just saw recently here.

If you can give us some color there as well. Thank you very much..

I mean it’s still a little early, Al, but at this point we’re thinking about $300 million of CapEx in 2015 and as far as restructuring we’ve been running at about $30 million to $40 million a year. I think for a now that’s a decent estimate to use for next year..

Okay, thanks Tom. I’ll turn it over and good luck..

Thank you..

Thank you..

Thank you. Our next question comes from Ghansham Panjabi with Baird. You may ask your question..

Hey guys, good morning..

Good morning..

Good morning, Ghansham..

Just looking back a year ago for 3Q, if I remember correctly Southeast Asia had slowed and European food wasn’t all that great from a volume perspective either.

Has the market turned for European food and then also some context on Southeast Asia as well from a volume perspective?.

Ghansham, I’ll talk about Southeast Asia and if you recall our comments last year in Southeast Asia, there were two significant market events or political events that impacted our volumes both in Cambodia and Thailand, they’re protesting Cambodia post the elections and a number of protests, public protests in Thailand.

And clearly that had an impact on the business, but our view was that at long-term these are going to be very healthy growth markets. And you can see the bounce-back this year compared to last year.

But if you wanted to understand it even better, if you were to look at Cambodia, and/or Thailand, and/or Vietnam, versus 2012’s third quarter, not just 2013 as that was depressed, there’s still double-digit gains from 2012. And on a compound basis, clearly, they’re double-digit, as well over that two-year period.

So, our view has not changed with any of these markets. And we are not going to be put off by short-term events that may or may not happen. On European food, we’re always down to the strength of the harvest. And last year the harvest was not as strong. And there was a – there are other events that do happen.

One of the ready-meals section, for example, was impacted by a meat scare that they had in several countries last year.

But again these are temporary events and they pass, and you can see the strength, the long-term strength, given that the value proposition that the can offers to the consumer and the retailers and the long-term strength the food can business in Europe and the yield as we discussed were quite strong across almost every crop this year.

So it was an outstanding year and we benefited from that..

Okay.

And then just in terms of trying to understand the fourth quarter guidance specifically, how do you feel about your inventory levels at current across your portfolio? Are operating rates for the most part any different feel, as you look at to 4Q versus may be last year?.

I think we’re in real good shape inventory wise we made some adjustments earlier in the year in one of our businesses as we talked about in June – in July. And we’re in real good shape as we enter the fourth quarter, as regards to inventory levels..

Okay. And then just one final one in the Middle East business.

I’m sorry if I missed this, but did you break out what volumes were down, for the quarter, for 3Q?.

In Europe, I think, we said we were down well I didn’t say we were down 2%..

Beverage was down….

Beverage was down 2%, yes..

In the Middle East..

Oh I’m sorry, in the Middle East was down about 5% and continental Europe was flat basically. So overall down 2%..

Okay. Thanks so much..

You’re welcome..

Thank you. Next question comes from Debbie Jones with Deutsche Bank. You may ask your question..

Hi, good morning..

Good morning Debbie..

I think we can talk a little bit about Brazil, could you just – I can’t recall, did you have two or three lines at Cabreúva and is this an extra line, or just a conversion to specialty? And then I just like to talk about the ramp up cost at Teresina.

And then how do you feel about the mix between glasses and cans heading into 2015?.

Yes Debbie, why don’t I do Cabreúva and Tim will pick up the other two subjects. We had two high speed 12-ounce lines in Cabreúva traditionally. And if you recall, Cabreúva was right in the middle of the São of Paulo, the biggest most prosperous state in Brazil.

So what we’ve added is a third line capable of multiple sizes, quick change overs and lot of capacity. So we needed it. We’ve been shipping Kangen from other factories in the north and south of Brazil, incurring a lot of freight. So we’re going to overcome that and be able to grow with the markets.

So we feel real good about it and we’re really well-positioned for next year. And Tim will respond to Teresina and what we’re seeing about the package mix, which we think is still favorable for the can. With Teresina, in the third quarter I start up.

The line came up in late second quarter, start across I think about $1 million here in the third quarter and hopefully that number begins to come down, especially as we get into the high season here in the fourth and first quarters.

The beer mix, I think as we’ve stated previously, cans are running about 45% of the package mix for beer and obviously that’s up from 40% to 42% over the last couple of years and we see no reason why it should retrace those steps. If anything, it should continue to garner more share of the mix..

Okay. Thank you. And then if you could just talk about North America a bit. I think your performance is a little bit less than where the industry track data came in.

And I’m just wondering what kind of impact that’s having on your utilization rates? And just kind of how you think about that going into 2015?.

Yes, these are, from time to time, depending on our customer mix and our geographic mix we can gain share or lose share against CMI data. And over the last five or six years, I’d say we’ve probably been the beneficiary of customer and regional mix. And this year, we’re on the other side of that point a little bit. So nothing too alarming.

Utilization is still fairly strong. Obviously as John discussed, in the second quarter we are in the stages of not only evaluating, but making some of the product lines more flexible to accommodate other sizes and that obviously absorbs some of the standard 12-ounce capacity that you may have to concern with..

Okay.

Any color you can provide on what type of specialty cans you might be looking at?.

Well, I think you could think about sleek and 16-ounce cans, but beyond that, I don’t have anything further to say..

Okay. Great. Thank you very much. I’ll pass it over..

You’re welcome. .

Thank you. Our next question comes from Mark Wilde with Bank of Montreal. You may ask your question..

Good morning..

Good morning, Mark. .

Good morning, Mark..

Could you talk a little bit more about Mexico? Just give a sense of what the operating rates look like on both sides of the business there, both glass and metal.

And then what kind of growth you see down there in terms of just annualized unit volume?.

Yes, I think the operating rates this year for the businesses we bought the beverage can business was operating in the range of 90% of capacity, a little bit better than that. Glass was essentially sold out with an opportunity for – relatively low cost capacity expansions in the next several years.

So that’s pretty strong, quite a strong beverage season this year of both glass and cans in Mexico. Looking ahead several things, we think the Mexican economy is going to continue to grow. 2% to 4% a year GDP growth, we think is quite reasonable.

There have been a lot of reforms introduced as you know in Mexico that we think are going to be positive, so we’re anticipating a growing middle class, more disposable income and so forth. So we think that’s going to be positive.

Cans relatively low proportion of the beer can mix, there is still a lot of returnable glasses that was in Brazil 10 years ago and still is, but it has changed a lot, so we think the opportunity for the can continues to be very favorable particularly in beer.

So all in all as we said earlier everything looks pretty good to us, a very good company, tremendous anchor customer if you will and a strong market with a growing economy and a relatively young population. So all of those things told us that EMPAQUE was a great opportunity for us and we’re really delighted, we’re able to get it..

John, if I can just follow on it.

Any thought on just capital needs in that business whether it is to expand capacity or just making incremental improvements?.

Yes, we’ve got quite a detailed capital program for the business. There were number of things we think we can do. They did have some excess capacity going 2014 and 2015.

We feel real good about utilizing that, but we don’t see anything real big over the next year anyway there, but when Tom discussed more or less where we think we’re headed we included the EMPAQUE requirements in that estimate..

Okay, all right. And then the last thing I wanted to do, it seems like kind a cool summer here in many parts of the U.S.

do you think that have much of an impact on either beer or soft drink in the third quarter?.

Honestly, I don’t really know. Tim, do you want to take a guess? We would be pretending to know something; we don’t, if we said it is..

Yes, okay. Okay, good enough. Thanks..

You’re welcome..

Thank you. Our next question comes from Chip Dillon with Vertical Research Partners. You may ask your question..

Yes, good morning..

Good morning..

First question is sort of on what your thoughts are at this point, you mentioned the $300 million CapEx projection for next year.

Does that include any new lines especially let’s say on the other side of the world?.

I think, at this point, we’re not prepared to discuss any further expansion projects. .

Okay, got you. And then looking at the currency, you mentioned the $0.04 hit in, I guess, the fourth quarter from the euro.

What was the exchange rate impact if it’s notable in the third quarter or had the currencies really not moved sufficiently to have much of an impact yet?.

Yes, there was not much of an impact at all in the third quarter..

Okay, got you. And then looking at the U.S. food can, I’m sorry, beverage can market, you mentioned you lost 5% North America, and I think it’s been a couple of quarters were I think you’ve underperformed the market just because your mix I suppose.

Any visibility in terms of how that might progress? I know you’ve mentioned obviously you’re going to change your mix more towards specialty, but in sort of the base 12-ounce, any views from your customers in terms of how that might at least move up closer to where the market is?.

Well I think our customers are always looking at ways where they’re going to promote their brands and drive their business. And we are always looking for them to do that and we’re quite supportive in their efforts. So I think to try to – for me to guess right now, how successful one set of customers is going to be versus another set of customers.

And clearly there is secular decline in carbonated soft drink consumption here in the United States and there are a number of initiatives that the soft drink companies are undertaking including all natural low calorie sweeteners and we’re hopeful that they’re going to continue to progress on that and become more successful..

Got you..

I think, Chip just quickly, we anticipate we’re going to bounce back somewhat in North American beverage cans next year. So we don’t think we’re going to continue to run very much differently than the overall market trend..

Well, okay.

And then just last one, I know the pension expense number obviously is a moving target watching the ten year note from day-to-day lately, but when you look at the contribution for 2015 and 2016, excuse me, obviously the highway bill would probably clarify what that number will be and I mean it looks like, I mean this year so far it’s $63 million year-to-date.

If you could just update us on what you think the contribution will be if that’s the total for the year or what it will be and kind of what the view on 2015 and 2016 are would be right now?.

Chip, we’ll be running about $80 million both in 2014 and 2015, a little early to say in 2016, but the highway bill did not have an impact on us because we currently have no contributions to the U.S. plants..

I see, got you. Thank you..

Thank you. Your next question comes from Phil Ng with Jefferies. You may ask your question..

Good morning.

Can you give us a sense of what the synergy opportunity is for EMPAQUE next year and how should we be thinking about the free cash flow of that business?.

Yes, Phil, the synergies, at this point we’re thinking about $6 million on an annual basis..

Okay. As far as the cash flow, you’re looking at $40 million or $50 million obviously after interest, tax and everything else..

Okay. And when I look at your guidance for Q4 even after backing up the $0.04 impact for after tax, it’s a touch lighter to at least what we were expecting.

Are you kind of baking in some macro headwinds, or can you give us a little more color what you’re accounting for at this point?.

No, I don’t think there’s anything particularly significant to point out that we’ve baked in. So, no, I can’t really given any more detail on it..

Okay. Any thoughts on China, I mean, I know SABMiller has cited some weakness during the quarter. It sounded like it was more weather related, but macro environment has slowed down a little bit.

How should we be thinking about price next year?.

We think with the supply demand situation being what it is, which is continuing good growth, but a fair bit of excess capacity that we don’t anticipate much change in price.

We think though that as the market continues to grow and our relatively new plants continue to fill up and run better we may see a little relief on the cost side, but we’re anticipating pricing in China is going to be essentially unchanged..

Okay. And just one last one, your non-reportable segment kind of bounces around. It’s a little bit lumpy. I know last quarter you had some timing related issue on the equipment sales side, but it was still bit weaker in Q3.

Can you talk about what you’re seeing on that side of business?.

Well, you’re right. The equipment business can be lumpy from time to time. It’s not a consistent consumer business like the other businesses we have. Nonetheless, obviously, we’re very confident of full year outlook and next year’s outlook for the equipment business.

And then, just on the other side, what we think we’re seeing in aerosol is a small softening, let’s say, in shave gel demand and that’s having a small impact in aerosol..

And is that centered around Europe, North America, any regions in particular?.

Let’s say both. It’s just a fashion change right now, which could always change next year..

Okay, all right. Thanks good luck in the quarter..

You’re welcome..

Thanks. Your next question comes from George Staphos with Bank of America Merrill Lynch. You may ask your question..

Hi, everyone. Good morning. Congratulations on the progress in the quarter. I guess I wanted to just do a little bit housekeeping first.

The various guidance comments that you provided in answering some of the questions earlier in the call, those all assume EMPAQUE closes, correct?.

Yes, that’s right. It closes early in the year, if not by the end of the year..

But, Tom, you have a full year of EMPAQUE in there and that drives EPS and the CapEx and so on, correct?.

That’s correct..

Yes..

Okay, thank you.

The next question on EMPAQUE spending again, I know it’s in the $300 million of CapEx, but could you comment at all as to where EMPAQUE spending is for call it 2015 or 2016 relative to what the spending levels have been that you said they’re very good assets, but do they require more investment?.

George, the spending for 2015 for example is very much in line with what they have been spending. There isn’t any significant CapEx that I could call your attention too. I mean you’re familiar with the glass business, so you’re familiar with sectioning machine replacements, with furnace rebuilds, et cetera.

And there is nothing terribly significant in 2015, may be a small capacity addition. So I know it’s pretty much – the CapEx plan for 2015 are pretty much in line with what they’ve been in the last several years and no major capacity additions in beverage either..

Okay, thanks for that John. Now, Cabreuva, can you comment at all in terms of how much capacity add this third line provide you.

I recognize the special line is not going to be running a billion units, I wouldn’t expect, but is it $0.5 billion, $800 million, any range on that?.

Yes, I think around $800 million. George, it’s just….

Okay. Go ahead, I’m sorry John..

It’s a high speed line, but of course to your point it’s capable of 16-ounce and multiple 12-ounce and sleek sizes and heights. So that’s what the market in Brazil has been evolving too heavily, which is very positive for all the can makers.

But so you’re absolutely right, we may call at nameplate $800 million, but it’s going to be – may be a little bit less than that when you get finished with various changes..

Okay, thanks John. Two last questions, I’ll turn over.

Can you comment at all as to if there are any changes in your volume trajectories into fourth quarter from third quarter, especially in Europe and emerging markets and forgetting about seasonality obviously? So are you seeing any effect thus far from the concerns anyway in the market about Europe slowing, emerging market slowing, impacting your business as we sit here in middle of October?.

No..

Okay..

Excluding seasonality, the answer is no..

Okay. And then the last question is you’ve done a tremendous job over the last number of years of basically betting on growth. You’ve added roughly $1.4 billion, $1.5 billion of revenues with these two acquisitions, you’ve added $13 billion plus in terms of emerging market beverage can capacity.

And ultimately that’s the right thing to do when we’re still early in recovery and hopefully there were a number of years ahead before the recovery slows down.

Let’s say things change what continuously plans, what strategic moves would you make to manage the company if growth were to certainly slow down, given the fact that you’ve made these investments over the last number of years on growth. Thanks guys and good luck in the quarter..

George, we continue to have quite a bit of flexibility on the CapEx side and on the restructuring side. So naturally if growth were to slow markedly, globally, we would cut back and of course we cut back all spending. And so that would be the response you would expect and that’s the one that we would attempt to achieve.

And but yet we would everything we possibly could that hit our free cash flow targets and then use the cash appropriately. So that’s about the only thing that we would do at this point..

John, would you redirect that cash to buyback or even go more quickly to debt paydown? Thanks again..

Well we may I mean it’s somewhat hypothetical and as you know but yes, we certainly might. In 2015 probably not, 2016 if we could and we would look at it, but we might..

Okay, thanks very good. .

Thank you..

Thank you. Your next question comes from Alex Ovshey with Goldman, Sachs. Your may ask you question..

Good morning, guys..

Good morning..

.

.

On the details of the cash flow in total 2015, no I don’t think we’re prepare to do that. The minority dividends about $80 million I’d say in both years. .

Okay. Thanks Tom.

And then for Mivisa can you tell us what the EBIT and EBITDA contribution was in the third quarter?.

No, we had like can, I mean the integration process is okay, was in April closing is pretty far long. As Tim said, we are having trouble picking out the spaghetti strands ourselves now. And no, we really couldn’t..

Alex just to put some color on that, I didn’t mean to be so sure with my answer, but it’s a short answer and the reason as John said, we are – the integration process implies that we are moving hundreds of millions of units whether they are can bodies or ends, from their factories to ours, our factories to theirs; they all contain different pricing with different customers, different freight lanes and it’s a very complicated thing and it’s not anymore relevant as we’re one company now.

.

The other thing I would just – keep in mind, the Mivisa management team, which is an excellent management team, they’ve picked up regional responsibility now for Iberia, North Africa, sub-Saharan Africa, all of the export in, so that was a sizable business for them and for us.

So you take all of that and that means transferring our factories to them in certain cases and some of theirs to us. And then the moves that Tim just mentioned, we’re really rapidly losing visibility on two separate companies in Europe..

Okay. I appreciate that color. Maybe the other way to try to ask the question, I mean, there appear to be upside to the initial synergy expectations that we outlined for Mivisa both on the volume and maybe potentially pricing side, as you know you’re further along in the integration.

Is there anything you could say on the synergy’s outlook there?.

Well, I think on the synergies – no, I mean synergies are about what we have thought. We never speculated on pricing, but time will tell on that..

Okay. And then just on CapEx, $300 million.

Can you update us what the maintenance plus CapEx needed to get cost out of the business, is after the EMPAQUE and Mivisa acquisition?.

Yes, I’d say of the – think about a number, of $120 million to $140 million and we’re not going to have a discussion right now. You can always have a discussion that when we start making can lines more flexible, is that maintenance or is that growth or is that – what is that. So it’s a range, right, $120 million to $140 million, I think..

Great. Thank you, Tim. I’ll turn over..

Thank you. Our next question comes from Tyler Langton with JPMC. You may ask your question..

Yes, thanks. Good morning. Just wondering, with the 10% to 15% guidance and EPS for next year, could you just – I don’t know if you can provide sort of just volume growth estimates by the major products that are assumed in that guidance..

No, Tyler. We really can’t. I mean we look at the whole portfolio and ran scenarios and flex it and we’re comfortable with the range, but I really don’t want to get into any more detail beyond that..

That’s fair. I understand. And then I think Europe, you just mentioned volumes were flat this quarter.

Could you just run through, I guess, maybe what some of the drivers of that was?.

You’re talking about….

Bev cans, Europe bev cans..

Yes. European beverage cans being flat. Well, I think we had a strong 2Q. Just like Brazil would have been strong during the World Cup, the European countries obviously participate quite heavily there.

And so post Q2 you have a little returning towards balancing out the supply chain, especially for those countries that didn’t advance as far as perhaps if they would have stopped the supply chain. But beyond that I don’t think anything else notable other than for our business, flat in continental Europe..

Okay. Got it. And then just with the Middle East, I think this is down 5% in the quarter. Have you seen there any signs of improvement recently? Or is it getting worse? Just any sort of change in direction there..

Yes, I think when we talked to you in July we were a bit more hesitant perhaps at that point than we would have been, had we talked to you a month later. July was, especially the first half of July and the month of July was quite a bit softer than the full quarter, August and September actually came back a little bit.

So again this is a region that knows conflict very well. We’ve been in the Middle East as a company, or our predecessor company now for 35 years and these things happen from time to time, but I think long-term this is a market that continues to grow 5% to 8% throughout the Gulf and we’re going to participate in that in one way or the other..

Okay and then just last one, I don’t know again for the 2015 guidance.

Can you just give a rough estimate of what’s the better interest expense and D&A that assumes?.

I don’t have it in front of me. Interest I would say we’re going to come in probably about the same as this year’s number. D&A is tough to say until we complete the step up process with EMPAQUE..

Got you. All right, thanks so much..

Thank you..

Thank you. Our next question comes from Scott Gaffner with Barclays. You may ask your question..

Thanks. Good morning..

Good morning..

Good morning..

Just a question on the 2015 guidance, if I look at it 10% to 15% EPS growth, it looks like just from earnings accretion alone, you should get about half of that, so maybe the base business is growing 5% to 7%, but you obviously have some European, some euro headwind that you talked about a little bit, but they don’t seem to be maybe as large as we would have anticipated.

Is there any other major headwinds we should be thinking about just on the base businesses as we go into 2015?.

Well I think throughout this call we’ve talked about a number and you just indicated a couple earlier, we talked about – on average metal premiums will be higher – it appears they will be higher next year than they are this year. The euro will have an impact.

And I think your assumption is right that our base business is going to be in the mid-single digit range and that encompasses offsetting those two major headwinds that we just talked about. But other than that, I don’t see any other major headwinds. We’re going to continue to experience good growth in a number of the developing markets.

No, I think we’re – we’re pretty positive on the outlook for next year..

Okay. And just on that one headwind that you mentioned the LME premiums, but at the same time you were talking about re-negotiating some contracts.

How many of your contracts or percentages that’s coming up for renewal as we move into 2015? And as you move to get the LME premium pass through, does that necessarily limit your ability to actually get pricing on those contracts as well?.

So I think we’re not getting into detail about when the contract ends, but re-negotiation will be probably a difficult task. We’ll see how the industry overall feels about, probably a pretty difficult all task. And we anticipated limited success in the estimate that Tom gave you earlier.

New contracts are obviously, we need to cover all of our cost increases, not just premiums we’ll be attempting to do that..

Okay. And I mean on the cost-out in Europe in the third quarter, you did a good job on the cost-out in order to offset some of those premiums.

Is that cost-out something you can maintain as you move into 2015 or even in the fourth quarter?.

Yes, it is. What we’ve seen over the past year and willing started in last year, has been a tremendous emphasis in our European beverage business, particularly in the continent, but also in the Middle East as well.

Improved our operating efficiencies, drive down spoilage, drive down all costs, better utilize our factories, be smarter about where we’re shipping, how we are shipping, how we are coordinating.

And we anticipate that progress will continue into next year and Tom has included it in his estimates for next year and understanding what we might need to do to offset premiums if they can do be a problem..

Okay. And just lastly, you mentioned earlier, you thought you’d see bounce back in North American beverage in 2015.

Is it something that you’ve been talking about with your customers that gives that level of confidence, or is it more market related? Can you just flesh that out a little bit?.

I think what John said was that we would expect next year that will be more – our performance will be more in line with the industry performance, as opposed to this year where we were moderately underperforming the industry..

Okay. Thank you..

Thank you..

Thank you. Your next question comes from Adam Josephson with KeyBanc. You may ask your question..

Thanks, good morning everyone. Just one more on the puts and takes for 2015 compared to 2014, you talked about some of the accretion, some of the drags you expect. Anything on food can contract that you’re losing on I thought that might be a fairly notable drag next year.

Are you thinking that’s not necessarily the case?.

No, it’s another headwind that, obviously, the base business has to overcome. But it’s in the guidance Tom gave you..

Okay. Couple of those, normalize tax rate for the company post EMPAQUE..

Yes, Adam I think you are still looking at about 25% for 2015..

Okay. So no change from 2014. In terms of North American food cans, just can you talk about the state of the market at this point? You’ve had some recent reprisings as have your competitors you’ve had some contract losses, et cetera.

Can you just talk about what you see there longer-term just in light of everything that’s happened over the past year or two?.

I think if you look at our food can business in North America, it’s an exceptionally run business.

And that’s borne out by the margins we make, not only in absolute terms across the entire food industry, when you compare us to others, but even when you compare us internally among our other businesses and I’d say that what you’ve described is largely complete, obviously as you know there is a new entrant.

And we’ve got really well-run low cost factories and we fully believe we’re going to continue to be very competitive and do quite well in the business..

Thanks then just a couple of others. On North American bev cans, what do you think the likely long-term growth or decline in that market is? You’ve talked about CSD being secular decline.

I mean do you think it’s a – what do you expect the long-term declines to be and what if anything do you expect to have to do to adjust for that?.

We don’t honestly have a precise view on what’s going to happen. I think there are too many moving parts over which we don’t have a lot of control.

So I mean if we were estimating right now, we probably say well the next several years, we may see the – what we see in the last number of years, beer can volumes growing somewhat, carbonated soft drink declining somewhat, but there are so many factors that are involved Tim mentioned sweeteners and marketing, public perceptions, so we don’t really know, but we think it’s a pretty slow decline and we anticipate that we can cut cost, do things more specialty cans, more variety and so forth and largely offset at least that’s certainly out plan..

Thanks John. Just one more on Asia-Pac. Obviously, EBIT was quite good in the quarter up much more so than in recent quarters. I know Southeast Asia was growing substantially, but that’s been the case before.

Can you discuss what kind of change this quarter and whether you expect this kind of EBIT growth to continue in subsequent quarters and why?.

What happened over the quarter is what we discussed with you in the first quarter and the second quarter, which was we have a lot of new plants, I’m trying to estimate what proportion of our volume is new plants that were put into service within the last three years….

Three or four years, 50%..

We’re saying 50%, 60%. So if you think about that, these are factories that need to run seven days a week, 24 hours a day, 340, 350 days a year at high rates of efficiency and low spoilage for us to do well.

Well, it takes a new workforce with new equipment a period of time to get to highly capable levels of operation and we told you earlier when a number of you were somewhat distressed about margins in Asia in the phase of growth which will going to take us a little while as these factories keep coming up the learning curve and keep getting better.

So what you’re really seeing in the numbers is continued growth as Tim mentioned, and continued improvement in our operations. The good news is we still got a lot of ways to go. We’ve made a lot of progress and we’re seeing improvement all through the region, but we’ve got a lot of runway to continue to improve in.

So it looks very positive for us in Asia..

Thanks a lot, John. Appreciate it..

Thank you. Our next question comes from Alton Stump with Longbow Research. You may ask your question..

Yes, hi, good morning..

Good morning..

I think most of my questions have been answered. As you look back to European food – and I totally understand that it’s hard to splice out the base business versus, obviously, Mivisa in the quarter. But high-single/low-double digit is an awfully big number. How do think about 4Q? Or is it too early – I assume that the harvest is pretty good.

Is that going to benefit fourth quarter at all? Or was it mostly a 3Q event?.

Well, I mean, obviously, low-single to – or high-single to low double-digits is tremendous growth for the food business, but these are competitors against our prior year that – where the harvest may not have been as good, but the harvest issue was quite good across a lot of products and that accounts for why we did so well.

We still are packing in Europe and in North America right now and we’re two and a half weeks into October. So we’re going to have – I think the completeness of the harvest is going to be quite strong this year. Obviously when we get a frost, it’s going to stop on that day.

But we’re going to continue and we’ll expect to have a good performance for the full year in food, both in North America and Europe..

Okay, great. Thanks, Tim..

You’re welcome..

Thank you. And our final question comes from Chris Manuel with Wells Fargo. You may ask your question..

Good morning, gentlemen. Just a couple clean-up questions for you. Just to help us frame – this is your first opportunity to talk about EMPAQUE publicly. So I wanted to kind of ask a couple more questions there. But it was a pretty nice step-up from, I think, $130 million of EBITDA last year to what you anticipated this year is $150 million.

And I think you mentioned $6 million of synergies earlier.

So is that sort of what you’re anticipating as a number for 2015? Did I catch that correct?.

Well, we didn’t give you a number for EMPAQUE for 2015, but we think EMPAQUE will do better next year than this year. As I said, it’s a great collection of assets and factories and people in a strong market. So we have a lot of confidence in it..

Okay. Maybe let me ask the question just a little different.

The $6 million of synergies that you’re anticipating, is that something that you believe you can get in the first, say, 12 months you’re involved with the business? Or will it take longer?.

No, we think we’ll get it in the first 12 months. .

Okay. That’s helpful. Then the second element, just maybe a little clean-up, because there’s – I’m a little confused to an extent with some of the premium stuff.

Looking at it at [420] (ph) or so as it fits today you talked about improving some of the spoilage and some of the other efficiencies in the business but have you been successful going out today into the market raising some pricing to offset that it would appears though you’ve been able to do some work looking how strong your numbers are but could you maybe give us a little color there as to have you been successful getting some of them?.

Well, Chris, we are in the mid-October here and we are in robust conversation with our customers around the world who are not accustomed to formula pass-throughs, about the necessity for aluminum of our can prices reflecting actual aluminum costs, not imaginary aluminum costs.

So we think we are going to be successful and that’s certainly our intention and that’s what we are trying to do..

Okay. Last question, if we could switch gears a minute to China. That’s been another area where, as you’ve brought some capacity online, there’s been some overcapacity embedded within the markets.

Can you maybe give us an update as to the situation there, where you feel you sit today? If you anticipate any improvements as we look forward to 2015 and 2016?.

Well I as we said earlier the excess capacity if you will, situation has changed a little bit for the better this year, but not a lot and therefore that’s why we are saying we don’t think there is going to be much improvement in pricing in China year-on-year.

We think for Crown there could be an opportunity for some improvement in our overall operations and profitably, simply as a consequence of more volume being run more effectively in the factories that we have, but China for the moment just days where it was over the course of the years, pretty good growth but also capacity..

Are you still seeing double digit growth there?.

This year, yes. That we think that’s how the year will finish yes, exactly and just one little reminder at the moment, China sales $300 million to $400 million for us. .

3% to 4%.

$400 million so we need to keep in context..

That’s helpful. Thank you, gentlemen. Good luck..

Thanks Chris..

At this time, I will turn the call back over to the speakers..

Okay, Shirley, thank you very much for all your help and all of you thank you for being on the call with this morning and good bye..

Thank you. And this does conclude today’s conference. We thank you for your participation. At this time, you may disconnect your lines..