Crown Holdings, Inc.

Thank you for standing by. The conference will begin momentarily. Until such time, you will hear music. Thank you, and please continue to stand by. Good morning and welcome to Crown Holdings fourth quarter 2025 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 over to Mr. Kevin Clouthier, Senior Vice President and Chief Financial Officer. Sir, you may begin.

Thank you, Elle, and good morning. With me on today's call is Tim Donahue, President and Chief Executive Officer. If you don't already have the earnings release, it is available on our website at crowncourt.com. On this call... As in the earnings release, we will be making a number of forward-looking statements. Actual results could vary materially from such statements. Additional information concerning factors that could cause actual results to vary is contained in the press release and in our SEC filings, including our Form 10-K for 2024 and subsequent filings. Earnings in the quarter were $1.31 per share compared to $3.02 per share in the prior year quarter, which included a $2.32 per share gain from the sale of Viviosis. Adjusted earnings per share were $1.74, up 9% compared to $1.59 in the prior year quarter. Net sales in the quarter were up 8% compared to the prior year quarter, reflecting a 3% increase in global beverage can volumes, $189 million from the pass-through of higher raw material costs, and $58 million from favorable foreign exchange. Segment income was $420 million in the quarter, compared to $428 million in the prior year, reflecting strong performance in European beverage, offset by lower volumes in transit packaging. For the year, the company delivered record adjusted EBITDA of almost $2.1 billion, compared to the prior year record of $1.9 billion in 2024. The improvement was driven by strong commercial and operational performance across the beverage and tin plate businesses. The company generated record free cash flow of $1,146,000,000 in 2025 compared to the prior year record of $814,000,000 in 2024. The $332,000,000 improvement was largely driven by the 8% improvement in EBITDA and lower pension contributions. The company maintained its net leverage target of 2.5 times, which we achieved at the end of September of 2025, and that is down from 2.7 times at the end of 2024. We delivered on our commitment to return excess cash to shareholders with $191 million of shares repurchased in the fourth quarter. For the year, the company returned $625 million to shareholders, consisting of $505 million in share repurchases and $125 million in dividends, compared to a total of $336 million in 2024. Looking ahead, we remain committed to compounding earnings, investing in the business, maintaining a strong balance sheet, and returning excess cash to shareholders. For the quarter, excuse me, first quarter 2026, adjusted earnings per diluted share are projected to be in the range of $1.70 to $1.80 with a full year range projected to be $7.90 to $8.30 per share. The adjusted earnings guidance for the full year includes net interest expense of approximately 350 to 360 million, depending on the timing of share repurchases, exchange rates at the current levels with the Euro at 117 to the dollar, full year tax rate of approximately 25%, depreciation of approximately 330 million, non-controlling interest expense of approximately $140 million, while dividends to non-controlling interest are expected to be $110 million. We currently estimate 2026 full-year free cash flow to be approximately $900 million after $550 million of capital spending to support our growth objectives, including capacity expansions and facility upgrades in Brazil, Greece, and Spain. We expect to maintain our net leverage at our targeted level of approximately two and a half times. With that, I'll turn the call over to Tim.

Thank you, Kevin, and good morning to everyone. As reflected in last night's earnings release and as Kevin just summarized, the company delivered another solid quarter to complete an outstanding year. The company performed well across virtually every metric generating more than 20% earnings per share growth while also achieving our long-term leverage target of 2.5 times. Fourth quarter global beverage pan unit volumes were up 3%, helping to deliver level global beverage segment income against a very strong prior year fourth quarter. Operationally, the teams performed very well to minimize the impacts from tariffs and the border conflict between Thailand and Cambodia. Volumes in America's beverage were up a bit more than 1% in the quarter as North American gains of 2.5% were offset by a 3% decline in Brazil. For the full year, volumes in North America were flat while Brazil was down 3%. Compared to a very strong prior year, the segment delivered record income of over $1 billion on the back of exceptional operating performance and positive mix. When adjusted for the pass-through of higher aluminum costs, Margins were within 30 basis points of last year's fourth quarter. As we look ahead to 2026, we expect North American volume gains of 2% to 3%, but offset by inflation and startup costs. European beverage volumes increased 10% in the fourth quarter, with shipments remaining strong across the Mediterranean and the Gulf states. For the full year, volumes were also up 10%, generating record segment income more than double what it was only a few years ago. With the CAN continuing to win share, we expect further growth in volumes and income in 26, more than offsetting startup costs in Greece and Spain. Sales unit volumes across our Asian operations were down 3% in the fourth quarter, owing entirely to the border conflict between Cambodia and Thailand. While consumer purchasing power across the region remains subdued in the face of ongoing tariff concerns, We expect that our low-cost regional structure will allow for commercial adjustments to drive volume growth in 2026. As expected, income across transit packaging was down in line with lower industrial activity. Plastic and steel strap volumes held up well, while higher margin equipment and tool offerings continue to be impacted by ongoing tariff adjustments. Despite overall industrial softness and tariff headwinds, the transit business continues to generate significant cash flow while at the same time continuing to earn double digits of low teens margins. With the focused cost reductions and operational improvements made over the past several years, the business is well positioned for future income growth when industrial demand returns. Our North American tin plate businesses benefited from 5% food can volume growth, offsetting softness and steer aerosols during the fourth quarter. For the year, income and other was up 80%, against an easy prior year comp and supported by food can volume growth and improved operating performance across newly installed capacity. In 2026, we expect further gains largely driven by strong food can demand and increased can making equipment orders. With net leverage at our long-term target of two and a half times, we remain focused on responsibly investing to support our partners' needs to grow their businesses And we also remain committed to paying a dividend that grows over time and returning the capital to shareholders through disciplined share repurchases. So in summary, 25 was another year of improvement for the company. Margins across our businesses remain healthy and demonstrate our ongoing focus on earning appropriate returns on capital employed. With a strong balance sheet and substantial free cash generation, The company remains well positioned to consistently deliver value to shareholders. And with that, Al, we are now ready to take questions.