Phil Ng: Okay. And just one last one for me, a cleanup question. The slugs facility that is down. How is that going to impact your EBITDA in 2024? I know there’s some offset from an insurance standpoint. Do you plan on rebuilding that facility to help us think through out some of the moving pieces?
DanFisher: Right now, we have enough supply to manage. So from an EBITDA standpoint, we’ll be in good shape. We are thinking about what we do with that footprint because this is something, Phil, where you can send this product over very long distances. So not to go down a rabbit hole there, but we’re going to evaluate that and the insurance proceeds will be more than enough to potentially recapitalize that facility. We just need to figure out what’s the best place to do that and serve our customers.
Phil Ng: Thank you.
DanFisher: You bet.
Operator: Our next question comes from [Jeff Sikoskus] with JPMorgan. Please proceed.
Unidentified Analyst: Thanks very much. I think you have $1 billion coming due in the fourth quarter and maybe $790 of low-cost debt in the first quarter of ’24. How do you plan to approach that?
Scott Morrison: Yes. We’ve got $1 billion coming due in a couple of weeks. Well, we did a bond deal back in May, that have turned out to be a very opportune time. So we have a lot of cash on our balance sheet, and we’ll use the proceeds from that bond offering and cash on the balance sheet to take care of the one in November here in a couple of weeks. And then the one in March, right, that’s a very low cost. So we will pay that off on the last day that we possibly can from cash that we’ll generate here in the fourth quarter and then maybe a little bit of revolver to retire that. And then once we close on the aerospace transaction, we’ll pay down debt to the tune of $2 billion plus, and we’ll determine at the time which pieces of debt we retire at that point. So I think we’re in a really good place from a maturity standpoint and being able to deal with any upcoming maturities. Then we’ve got $3 billion of cash and committed credit to.
Unidentified Analyst: Thank you for that. When you sell the Aerospace business, does it perfectly carve out? Or are there stranded costs that are left over or opportunities to reduce overhead?
DanFisher: Almost perfectly carved out, we will absolutely take a look at the Ball business structure, op model, all of those things moving forward and make sure that we’re efficient and fit for purpose for the markets we’re going to participate and how we win in the marketplace with our customers. So but it’s minimal in terms of the overhang. It’s really a business that whether it’s the IT, the firewalls, the construction, I think we’ve got overlap of an HR system in a little bit on the financial at the corporate level. So very little overhang.
Unidentified Analyst: It’s like $10 million or $20 million?
DanFisher: I haven’t seen the most recent number, you’re probably not that far off. It’s insignificant debt. Okay, great, thank you.
Operator: Our next question comes from Gabe Hajde with Wells Fargo Securities. Please proceed.
Gabe Hajde: Good morning, everyone, at the Ball and I’ll echo other analysts have said to Scott and Howard, respectively. You said a lot, Dan, in terms of expectations for top line, specifically volumes, and there’s a lot of things that can impact that when we’re talking about weather, whether we’re talking about promotions and Bud Light, et cetera. But you made a specific comment that you would expect volumes to kind of track below. I think what you’ve communicated in the past of what you’d expect, specifically North America to track. So call it, I think you guys have said 2% to 4%. So I’m curious if that’s an industry comment or a Ball comment, and that’s sort of based on what, meaning contracts and things that you have in your hand.
And then secondarily, I guess, similar volume question, but in Europe, is this based on your customer interactions and obviously, kind of maybe expectation for the consumer to continue to be pressured that you’re a little bit more negative on volume in the short term here, i.e., the next six months? And then South America, again, relative to our modeling was a little bit short. When I look at profitability versus history, it’s a little bit below. But I don’t know if that’s a competitive issue. I know you called out some regional and customer mix. I also know ends are a little bit more profitable down there depending on when they’re sold. I know there’s a lot in there on pack, but just for clarity, sort of what bulk specifically is expecting in those three arenas?
DanFisher: Okay. Let’s start with South America. So South America we were down slightly versus our expectations because of Argentina, it’s Argentina. That’s what it is. So, I wouldn’t read much more into it. The volumes were in line in Brazil, maybe a little better. Our earnings were in line, maybe a little better in Brazil, but it’s just the deterioration of Argentina and some unique taxes also that the government put in place. So we’re going to be dealing with a little bit of volatility there for a period of time. But like I said, we’ll have a significant inflection in Q4. South America is in a much better shape, obviously, than it was even at the beginning of the year. So we’re very constructive on South America with the exception of the carve out of Argentina.
In Europe, the volumes are going to be a little bit softer. I’d say the biggest difference between what we called out at the end of the second quarter what we’re calling out today is like a weaker Europe, and I think you’re hearing that from all of our competitors as well. It’s a bit softer in consumer. I’m not overly concerned. It doesn’t take much for growth. That market has grown for 20-plus years consistently, and it will return to growth, but the end consumer is a little weaker right now. And I do think the periodic shift six months is your characterization. I don’t think you’re far off there. And then in North America, I do believe, just to parse out my comments. We’re not growing at 2% to 4% in the industry. It’s 0% to 2% in that range right now.
And it’s because, obviously, the pricing behavior that we experienced in the last 18 months and a significantly weaker in consumer, which everyone is commenting on. So, I do believe there’s a return to the 2% to 4% growth. But whether it happens in 2024 or the second half of ’24 or in ’25, I’m just being completely honest, is like what – where the end consumer is right now and what the pricing behaviors with our customers, we’ll be the instrument, which it inflects up or down. Good news is, like I’ve said, we’re running for the lower end of that range, both from an industry and from a Ball specific perspective, and we’ll make more money and we’ll flow more cash. But until that end consumer gains a little strength returning to the growth levels that I indicated a year or 18 months ago.
