Question-and-Answer Session
Operator
(Operator Instructions) The first question comes from the line of Ghansham Panjabi – Robert W. Baird.
Ghansham Panjabi – Robert W. Baird
As related to your updated EBIT and cash flow guidance is it fair to say you are running the fourth quarter for cash more so than normal?
Timothy Donahue
I think if you look at the performance we have had over the last 5-7 years we have been running the company for maximum cash generation. Having said that we have tried to do it without damaging segment income performance. I don’t think we would want to say we are doing it more than normal.
Ghansham Panjabi – Robert W. Baird
In terms of the profitability in North American food what was the primary variance for the margin expansion? Was it a combination of mix and better than expected volumes or price?
Timothy Donahue
Obviously as John has described, late last year and early this year we did a very good job and a responsible job in understanding what the cost pressures we faced were and adjusting selling prices accordingly to recover or restore margins in the business. Additionally, as you remember late last year we closed the food can plant in Canada so the cost base is obviously much better this year compared to last year. Lastly, volumes recovered nicely in Q3 with the strong harvest.
Ghansham Panjabi – Robert W. Baird
On FX for the fourth quarter if rates hold at current levels through the fourth quarter what kind of variance should we expect on the EBIT line?
Timothy Donahue
Through 9 months we have a negative variance on the EBIT line of $55 million. Then you could see that in Q3 it is negative $14 million and was substantially better or less worse than Q2. We would expect in Q4 today’s rates for the variance to be plus or minus $10-12 million so it will be a benefit.
Operator
The next question comes from the line of Chip Dillon – Credit Suisse.
Chip Dillon – Credit Suisse
You mentioned earlier in the call that you had income up 15% I think you said without pension. Was that in the third quarter or for the nine months?
Timothy Donahue
For the third quarter.
Chip Dillon – Credit Suisse
How about for the 9 months, what would you say the income would have been up without the pension?
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