PHILADELPHIA, Feb. 2, 2017 /PRNewswire/ -- Crown Holdings, Inc.
(NYSE: CCK) today announced its financial results for the fourth
quarter and year ended December 31,
2016.
Highlights
- Earnings per share $0.47 for
the quarter; $3.56 full year versus
$2.82 in 2015
- Adjusted earnings per share $0.71 for the quarter; $3.93 full year versus $3.59 in 2015
- Cash from operations $930
million; adjusted free cash flow $479
million
- Share repurchase authorization for $1
billion in aggregate through the end of 2019
Fourth Quarter
Net sales in the fourth quarter were
$1,923 million compared to
$2,027 million in the fourth quarter
of 2015, reflecting $77 million of
unfavorable currency translation in 2016 compared to 2015 and the
pass through of lower raw material costs.
Income from operations was $192
million in the quarter compared to $201 million in the fourth quarter of 2015.
Segment income improved to $236
million in the quarter compared to $234 million in 2015. The improvement in
segment income compared to the prior year's quarter included
benefits from lower corporate costs, offset by $9 million of unfavorable currency translation
and lower volumes in Saudi Arabia.
Corporate and unallocated costs of $156
million for the full year of 2016 are consistent with the
Company's expectations for 2017.
Commenting on the quarter, Timothy J.
Donahue, President and Chief Executive Officer, stated, "We
are pleased to report another solid quarter and strong year for
Crown. Fourth quarter operating results were in line with our
expectations, and we exceeded our free cash flow projections due to
another quarter of excellent working capital
performance. Global beverage can volumes increased three
percent for the full year, and in the quarter were level to the
prior year as strong performances in the U.S., Brazil and Asia offset softness in Saudi
Arabia.
"Our new beverage can plant in Monterrey, Mexico and the second production
line at the Osmaniye, Turkey
facility began commercial production in the fourth quarter of 2016.
The first beverage can line at the Nichols, New York can plant was commissioned
and began commercial shipments in late January of this year and
will be followed by completion of the second line in April.
In the second quarter, we will also complete the conversion of our
Custines, France beverage can
facility from steel to aluminum with the start-up of the second
high speed line and expand capacity at our beverage can plant in
Colombia. In addition to these
previously announced projects, we are also constructing a new
beverage can facility in Jakarta,
Indonesia, our first in that country, that is scheduled to
begin commercial production in the third quarter of this year to
serve the growing local market, adding a second line at our
beverage can plant in Danang, Vietnam that is also expected to begin
production in the third quarter, and constructing a new beverage
can plant in Yangon, Myanmar and
a new glass bottle facility in Chihuahua, Mexico, both scheduled for start-up
in the first half of 2018."
Interest expense decreased to $62
million in the fourth quarter of 2016 compared to
$68 million in 2015 primarily due to
lower outstanding debt.
Net income attributable to Crown Holdings in the fourth quarter
was $65 million compared to
$66 million in the fourth quarter of
2015. Reported diluted earnings per share were $0.47 in the fourth quarters of both years.
Adjusted diluted earnings per share were $0.71 compared to $0.70 in 2015.
A reconciliation from net income and diluted earnings per share
to adjusted net income and adjusted diluted earnings per share is
provided below.
Full Year Results
Net sales for the full year were
$8,284 million compared to
$8,762 million in 2015, and included
$277 million of unfavorable currency
translation in 2016 compared to 2015 and the pass through of lower
raw material costs.
Income from operations improved to $1,021
million compared to $927
million in 2015. Segment income improved to
$1,078 million compared to
$1,026 million in 2015, and included
$39 million of unfavorable currency
translation.
Interest expense decreased to $243
million in 2016 compared to $270
million in 2015 primarily due to lower outstanding
debt.
Net income attributable to Crown Holdings increased to
$496 million in 2016 over the
$393 million in 2015. Reported
diluted earnings per share in 2016 were $3.56 compared to $2.82 last year. Adjusted diluted earnings
per share were $3.93 compared to
$3.59 in 2015.
Share Repurchase Authorization
The Company also
announces that its Board of Directors has authorized the repurchase
of an aggregate amount of $1 billion
of Company common stock through the end of 2019. This new
authorization reflects the Company's strong balance sheet and cash
flow from operations, allowing investment in the business and
return of cash to our shareholders. Share repurchases under this
program may be made in the open market, through privately
negotiated transactions or other programs, and at times and in such
amounts as market conditions allow.
Outlook
The Company currently expects 2017 adjusted
diluted earnings per share to be in the range of $3.80 to $4.00 compared to $3.93 in 2016, including a foreign currency
translation headwind of approximately $0.12 per diluted share based on current exchange
rate levels. Adjusted diluted earnings per share for the 2017 first
quarter are expected to be in the range of $0.65 to $0.75 compared to $0.69 in the prior year. These estimates
reflect the impact of expected repurchase activity under the newly
authorized share repurchase program described above.
During 2016, the Company repositioned its capital structure by
refinancing more than $1 billion of
short-term floating rate debt to fixed long-term debt in both euros
at 2 ⅝% and U.S. dollars at 4 ¼%. While these fixed rates are
near high-yield historical lows they are higher than current
short-term rates and as a result the Company expects 2017 interest
expense to increase by approximately $13
million, or $.07 per diluted
share to approximately $256 million.
As reflected in the Company's December 31,
2016 balance sheet, approximately 75% of its debt is in
fixed rate instruments.
Additionally, costs incurred prior to start-up of the three
large North American projects (Monterrey, Nichols and Chihuahua) are expected to have a
$.06 impact on adjusted diluted
earnings per share compared to 2016.
The effective income tax rate for 2017 is expected to be
approximately 26%, similar to the 2016 rate. Cash provided by
operating activities is currently expected to be approximately
$875 million and management currently
forecasts capital expenditures for 2017 of approximately
$450 million.
Mr. Donahue further commented, "Looking back, the last three
years have been very productive. We acquired and integrated
two exceptional packaging companies, Mivisa and Empaque, and we
continued to expand our global beverage platform allowing us to
more than offset the currency headwinds faced by many U.S.
multinationals. Adjusted diluted earnings per share increased
to $3.93 in 2016 from $2.99 in 2013 despite more than $0.70 per share of currency headwinds over the
three year period. We generated $1.7
billion of adjusted free cash flow over this period allowing
us to delever and begin the process of returning significant cash
to our shareholders. As we look forward, it is our past
success which gives us confidence that our growth initiatives,
underpinned by customer commitments, will continue to enhance the
future earnings and cash flow of the Company. At the same time, we
remain committed to providing our customers with the highest
quality containers and service while controlling costs, improving
productivity, increasing operational efficiencies and growing
shareholder value."
Non-GAAP Measures
Segment income, adjusted free cash
flow, adjusted net income, the adjusted effective tax rate,
adjusted earnings per share, and the information presented
excluding the impact of currency translation are not defined terms
under U.S. generally accepted accounting principles (non-GAAP
measures). Non-GAAP measures should not be considered in
isolation or as a substitute for income from operations, net
income, income per diluted share or cash flow data prepared in
accordance with U.S. GAAP and may not be comparable to calculations
of similarly titled measures by other companies.
The Company views segment income as the principal measure of the
performance of its operations and adjusted free cash flow as the
principal measure of its liquidity. The Company considers
both of these measures in the allocation of resources.
Adjusted free cash flow has certain limitations, however, including
that it does not represent the residual cash flow available for
discretionary expenditures since other non-discretionary
expenditures, such as mandatory debt service requirements, are not
deducted from the measure. The amount of mandatory versus
discretionary expenditures can vary significantly between
periods. The Company believes that adjusted net income, the
adjusted effective tax rate, adjusted diluted earnings per share,
and information excluding the impact of currency translation are
useful in evaluating the Company's operations as these measures are
adjusted for items that affect comparability between periods.
A reconciliation of estimated adjusted diluted earnings per share
for the first quarter and full year of 2017 to estimated earnings
per share on a GAAP basis are not provided in this release due to
the unavailability of estimates of the following, the timing and
magnitude of which the Company is unable to reliably forecast
without unreasonable efforts, which are excluded from estimated
adjusted diluted earnings per share and could have a significant
impact on earnings per share on a GAAP basis: gains or losses on
the sale of businesses or other assets, restructuring costs, asset
impairment charges, acquisition related costs including fair value
adjustments to inventory, asbestos-related charges, losses from
early extinguishment of debt, the tax impact of the items above,
and the impact of tax law changes or other tax matters. The Company
believes that adjusted free cash flow provides a meaningful measure
of liquidity and a useful basis for assessing the Company's ability
to fund its activities, including the financing of acquisitions,
debt repayments, share repurchases or possible future
dividends. Segment income, adjusted free cash flow, the
adjusted effective tax rate, adjusted net income, adjusted diluted
earnings per share and information excluding the impact of currency
translation are derived from the Company's Consolidated Statements
of Operations and Cash Flows and Consolidated Balance Sheets, as
applicable, and reconciliations to segment income, adjusted free
cash flow, the adjusted effective tax rate, adjusted net income,
adjusted diluted earnings per share and information unadjusted for
currency translation can be found within this release.
Conference Call
The Company will hold a conference
call tomorrow, February 3, 2017 at
9:00 a.m. (EST) to discuss this news
release. Forward-looking and other material information may
be discussed on the conference call. The dial-in numbers for
the conference call are (630) 395-0227 or toll-free (888) 606-8412
and the access passcode is "packaging". A live webcast of the
call will be made available to the public on the internet at the
Company's web site, www.crowncork.com. A replay of the
conference call will be available for a one-week period ending at
midnight on February 10. The
telephone numbers for the replay are (203) 369-1126 or toll free
(866) 443-8030.
Cautionary Note Regarding Forward-Looking Statements
Except for historical information, all other information in this
press release consists of forward-looking statements. These
forward-looking statements involve a number of risks, uncertainties
and other factors, including the future impact of currency
translation and changes in interest rates and tax legislation; the
continuation of performance trends in 2017; the Company's ability
to generate expected earnings and cash provided by operating
activities in 2017 while maintaining capital expenditures at
forecasted levels; the future growth in demand for beverage, food
and aerosol cans, including in regions where the Company is adding
capacity; the Company's ability to successfully complete and begin
production at capacity expansion or conversion projects within
expected timelines and budgets in Mexico, New York,
France, Colombia, Indonesia, Vietnam and Myanmar; its ability to continue to identify
and successfully complete and operate additional projects or
acquisitions; its ability to successfully execute its share
repurchase program; including the amount, timing and price of any
repurchases; and its ability to continue to generate cash from
operations, including from working capital performance that may
cause actual results to be materially different from those
expressed or implied in the forward-looking statements.
Important factors that could cause the statements made in this
press release or the actual results of operations or financial
condition of the Company to differ are discussed under the caption
"Forward Looking Statements" in the Company's Form 10-K Annual
Report for the year ended December 31,
2015 and in subsequent filings made prior to or after the
date hereof. The Company does not intend to review or revise
any particular forward-looking statement in light of future
events.
Crown Holdings, Inc., through its subsidiaries, is a leading
supplier of packaging products to consumer marketing companies
around the world. World headquarters are located in
Philadelphia, Pennsylvania.
For more information, contact:
Thomas A. Kelly, Senior Vice
President and Chief Financial Officer, (215) 698-5341
Thomas T. Fischer, Vice President,
Investor Relations and Corporate Affairs, (215) 552-3720
Ed Bisno, Bisno Communications,
(212) 717-7578
Unaudited Consolidated Statements of Operations, Balance
Sheets, Statements of Cash Flows, Segment Information and
Supplemental Data follow.
|
Consolidated
Statements of Operations (Unaudited)
|
|
(in millions, except
share and per share data)
|
|
|
|
|
|
Three Months
Ended
December
31,
|
|
Year
Ended
December
31,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Net
sales
|
$1,923
|
|
$2,027
|
|
$8,284
|
|
$8,762
|
|
Cost of products
sold
|
1,533
|
|
1,629
|
|
6,583
|
|
7,116
|
|
Depreciation and
amortization
|
59
|
|
63
|
|
247
|
|
237
|
|
Selling and
administrative expense
|
93
|
|
99
|
|
368
|
|
390
|
|
Provision for
asbestos
|
21
|
|
26
|
|
21
|
|
26
|
|
Restructuring and
other
|
25
|
|
9
|
|
44
|
|
66
|
|
Income from
operations
|
192
|
|
201
|
|
1,021
|
|
927
|
|
Foreign
exchange
|
6
|
|
6
|
|
(16)
|
|
20
|
|
Interest
expense
|
62
|
|
68
|
|
243
|
|
270
|
|
Interest
income
|
(4)
|
|
(3)
|
|
(12)
|
|
(11)
|
|
Loss from early
extinguishment of debt
|
|
|
|
|
37
|
|
9
|
|
Income before
income taxes
|
128
|
|
130
|
|
769
|
|
639
|
|
Provision for income
taxes
|
35
|
|
44
|
|
186
|
|
178
|
|
Net
income
|
93
|
|
86
|
|
583
|
|
461
|
|
Net income
attributable to noncontrolling interests
|
(28)
|
|
(20)
|
|
(87)
|
|
(68)
|
|
Net income
attributable to Crown Holdings
|
$65
|
|
$66
|
|
$496
|
|
$393
|
|
Earnings per share
attributable to Crown Holdings
common shareholders:
|
|
|
|
|
|
|
|
|
Basic
|
$0.47
|
|
$0.48
|
|
$3.58
|
|
$2.85
|
|
Diluted
|
$0.47
|
|
$0.47
|
|
$3.56
|
|
$2.82
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding:
|
|
|
Basic
|
138,783,951
|
138,083,619
|
|
138,527,233
|
137,937,938
|
|
|
Diluted
|
139,527,141
|
139,269,286
|
|
139,314,402
|
139,135,104
|
|
|
Actual common shares
outstanding
|
139,840,228
|
139,441,298
|
|
139,840,228
|
139,441,298
|
|
|
Consolidated
Supplemental Financial Data (Unaudited)
|
|
(in
millions)
|
|
|
Reconciliation
from Income from Operations to Segment Income and Constant Currency
Segment Income
|
|
The Company views
segment income, as defined below, as a principal measure of
performance of its operations and for the allocation of
resources. Segment income is defined by the Company as income
from operations adjusted to add back provisions for asbestos and
restructuring and other, the impact of fair value adjustments to
inventory acquired in an acquisition, and the timing impact of
hedge ineffectiveness.
|
|
|
|
|
|
|
Three Months
Ended
December 31,
|
|
Year
Ended
December
31,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
Income from
operations
|
$
|
192
|
|
$
|
201
|
|
$
|
1,021
|
|
$
|
927
|
|
|
Provision for
asbestos
|
|
21
|
|
|
26
|
|
|
21
|
|
|
26
|
|
|
Provision for
restructuring and other
|
|
25
|
|
|
9
|
|
|
44
|
|
|
66
|
|
|
Fair value adjustment
to inventory (1)
|
|
|
|
|
|
|
|
|
|
|
6
|
|
|
Impact of hedge
ineffectiveness (1)
|
|
(2)
|
|
|
(2)
|
|
|
(8)
|
|
|
1
|
|
|
Segment
income
|
|
236
|
|
|
234
|
|
|
1,078
|
|
|
1,026
|
|
|
Foreign currency
translation (2)
|
|
9
|
|
|
|
|
|
39
|
|
|
|
|
|
Constant currency
segment income
|
$
|
245
|
|
$
|
234
|
|
$
|
1,117
|
|
$
|
1,026
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Included in cost of
products sold
|
|
|
Segment
Information
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended December
31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Sales
|
|
2016
Actual
|
|
2016
at
2015 rates
(2)
|
|
2015
Actual
|
|
2016
Actual
|
|
2016
at
2015 rates
(2)
|
|
2015
Actual
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
Beverage
|
|
$
|
689
|
|
$
|
717
|
|
$
|
691
|
|
$
|
2,757
|
|
$
|
2,890
|
|
$
|
2,771
|
|
|
North America
Food
|
|
|
148
|
|
|
150
|
|
|
150
|
|
|
652
|
|
|
666
|
|
|
680
|
|
|
European
Beverage
|
|
|
291
|
|
|
309
|
|
|
331
|
|
|
1,420
|
|
|
1,472
|
|
|
1,504
|
|
|
European
Food
|
|
|
396
|
|
|
412
|
|
|
420
|
|
|
1,855
|
|
|
1,887
|
|
|
1,984
|
|
|
Asia
Pacific
|
|
|
277
|
|
|
281
|
|
|
282
|
|
|
1,116
|
|
|
1,142
|
|
|
1,202
|
|
|
Total reportable
segments
|
|
|
1,801
|
|
|
1,869
|
|
|
1,874
|
|
|
7,800
|
|
|
8,057
|
|
|
8,141
|
|
|
Non-reportable
segments
|
|
|
122
|
|
|
131
|
|
|
153
|
|
|
484
|
|
|
504
|
|
|
621
|
|
|
Total net
sales
|
|
$
|
1,923
|
|
$
|
2,000
|
|
$
|
2,027
|
|
$
|
8,284
|
|
$
|
8,561
|
|
$
|
8,762
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
Beverage
|
|
$
|
127
|
|
$
|
130
|
|
$
|
127
|
|
$
|
456
|
|
$
|
475
|
|
$
|
427
|
|
|
North America
Food
|
|
|
12
|
|
|
13
|
|
|
14
|
|
|
69
|
|
|
72
|
|
|
86
|
|
|
European
Beverage
|
|
|
39
|
|
|
41
|
|
|
50
|
|
|
243
|
|
|
252
|
|
|
228
|
|
|
European
Food
|
|
|
32
|
|
|
34
|
|
|
38
|
|
|
244
|
|
|
248
|
|
|
246
|
|
|
Asia
Pacific
|
|
|
41
|
|
|
41
|
|
|
34
|
|
|
152
|
|
|
154
|
|
|
145
|
|
|
Total reportable
segments
|
|
|
251
|
|
|
259
|
|
|
263
|
|
|
1,164
|
|
|
1,201
|
|
|
1,132
|
|
|
Non-reportable
segments
|
|
|
18
|
|
|
21
|
|
|
21
|
|
|
70
|
|
|
76
|
|
|
83
|
|
|
Corporate and other
unallocated items
|
|
|
(33)
|
|
|
(35)
|
|
|
(50)
|
|
|
(156)
|
|
|
(160)
|
|
|
(189)
|
|
|
Total segment
income
|
|
$
|
236
|
|
$
|
245
|
|
$
|
234
|
|
$
|
1,078
|
|
$
|
1,117
|
|
$
|
1,026
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) Information
presented for 2016 at 2015 rates represents financial results
assuming constant foreign currency exchange rates used for
translation based on the rates in effect for the comparable
prior year period. In order to compute constant currency
results, the Company multiplies or divides, as appropriate, the
current year U.S. dollar results by the current year average
foreign exchange rates and then multiplies or divides, as
appropriate, those amounts by the applicable prior year average
foreign exchange rates.
|
|
Consolidated
Supplemental Data (Unaudited)
|
|
(in millions, except
per share data)
|
|
|
Reconciliation
from Net Income and Diluted Earnings Per Share to Adjusted Net
Income and Adjusted Diluted Earnings Per Share
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
Net income/diluted
earnings per share
attributable to Crown Holdings, as reported
|
|
$65
|
|
$.47
|
|
$66
|
|
$.47
|
|
$496
|
|
$3.56
|
|
$393
|
|
$2.82
|
|
|
Fair value adjustment to
inventory (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6
|
|
.04
|
|
|
Impact of hedge
ineffectiveness (2)
|
|
(2)
|
|
(.02)
|
|
(2)
|
|
(.01)
|
|
(8)
|
|
(.06)
|
|
1
|
|
.01
|
|
|
Provision for asbestos
(3)
|
|
21
|
|
.15
|
|
26
|
|
.19
|
|
21
|
|
.15
|
|
26
|
|
.19
|
|
|
Restructuring and
other (4)
|
|
25
|
|
.18
|
|
9
|
|
.06
|
|
44
|
|
.32
|
|
71
|
|
.51
|
|
|
Loss from early
extinguishment of debt (5)
|
|
|
|
|
|
|
|
|
|
37
|
|
.27
|
|
9
|
|
.07
|
|
|
Income taxes
(6)
|
|
(10)
|
|
(.07)
|
|
(2)
|
|
(.01)
|
|
(43)
|
|
(.31)
|
|
(7)
|
|
(.05)
|
|
|
Adjusted net
income/diluted earnings per share
|
|
$99
|
|
$.71
|
|
$97
|
|
$.70
|
|
$547
|
|
$3.93
|
|
$499
|
|
$3.59
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax rate as
reported
|
|
27.3%
|
|
|
|
33.8%
|
|
|
|
24.2%
|
|
|
|
27.9%
|
|
|
|
|
Adjusted effective
tax rate (7)
|
|
26.2%
|
|
|
|
28.2%
|
|
|
|
26.5%
|
|
|
|
24.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) In the first quarter of
2015, the Company recorded a charge of $6 million ($4 million net
of tax) in cost of products sold for fair value adjustments related
to the sale of inventory acquired in its acquisition of
Empaque.
|
|
|
(2) In the fourth quarter and
full year of 2016, the Company recorded benefits of $2 million ($1
million net of tax) and $8 million ($6 million net of tax) in cost
of products sold related to the timing impact of hedge
ineffectiveness. In the fourth quarter and full year of 2015,
the Company recorded benefits of $2 million ($1 million net of tax)
and a charge of $1 million ($1 million net of tax).
|
|
|
(3) In the fourth quarters of
2016 and 2015, the Company recorded charges of $21 million ($13
million net of tax) and $26 million ($17 million net of tax) to
increase its reserve for asbestos related liabilities.
|
|
|
(4) In the fourth quarter and
full year of 2016, the Company recorded restructuring and other
charges of $8 million ($7 million net of tax) and $30 million ($24
million net of tax) including pension settlement charges. In
the fourth quarter and full year of 2015, the Company recorded
restructuring and other charges of $1 million ($1 million net of
tax) and $49 million ($44 million net of tax), including $5 million
for the year reported in cost of products sold for inventory write
downs in plants to be closed.
|
|
|
In the fourth quarter
and full year of 2016, the Company recorded charges of $17 million
($13 million net of tax) and $14 million ($12 million net of tax)
for asset sales and impairments. In the fourth quarter and
full year of 2015, the Company recorded charges of $8 million ($5
million net of tax) and $22 million ($15 million net of tax) for
asset sales and impairments.
|
|
|
(5) In the first quarter of
2016, the Company recorded a charge of $27 million ($17 million net
of tax) for premiums paid and the write off of deferred financing
fees in connection with the redemption of its outstanding $700
million notes due 2021. In the third quarter of 2016, the
Company recorded a charge of $10 million ($7 million net of tax)
for the write off of deferred financing fees in connection with the
early repayment of a portion of its Term Loan A borrowings.
In the second quarter of 2015, the Company recorded a charge of $9
million ($6 million net of tax) for the write off of deferred
financing fees in connection with the repayment of its Term Loan B
borrowings.
|
|
|
(6) In the fourth quarter and
full year of 2016, the Company recorded income tax benefits of $12
million and $27 million related to the items described above. Also
in the fourth quarter of 2016, the Company recorded charges of $2
million due to tax law changes in France. In the third
quarter of 2016, the Company recorded charges of $13 million in
connection with tax contingencies related to the Mivisa acquisition
and a corporate restructuring, and benefits of $31 million to
reverse tax valuation allowances in Canada. In the fourth
quarter and full year of 2015, the Company recorded income tax
benefits of $11 million and $26 million related to the items
described above. In addition, the Company recorded charges of
$10 million during the first nine months to record the impact of an
unfavorable tax court ruling and tax rate change in Spain, $4
million in the fourth quarter to adjust deferred taxes for a tax
rate reduction in the U.K., and $5 million in the fourth quarter
for a corporate restructuring.
|
|
|
(7) Income tax effects on
adjusted net income were calculated using the applicable tax rates
of the underlying jurisdictions.
|
|
Consolidated
Balance Sheets (Condensed & Unaudited)
(in
millions)
|
|
December
31,
|
2016
|
|
2015(1)
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
559
|
|
|
$
|
717
|
|
|
Receivables, net
|
|
|
865
|
|
|
|
912
|
|
|
Inventories
|
|
|
1,245
|
|
|
|
1,213
|
|
|
Prepaid expenses and other current assets
|
|
|
172
|
|
|
|
207
|
|
|
Total current assets
|
|
|
2,841
|
|
|
|
3,049
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill and
intangible assets
|
|
|
3,263
|
|
|
|
3,580
|
|
|
Property, plant and
equipment, net
|
|
|
2,820
|
|
|
|
2,699
|
|
|
Other non-current
assets
|
|
|
675
|
|
|
|
722
|
|
|
Total
|
|
$
|
9,599
|
|
|
$
|
10,050
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
|
Short-term debt
|
|
$
|
33
|
|
|
$
|
54
|
|
|
Current maturities of long-term debt
|
|
|
161
|
|
|
|
209
|
|
|
Accounts payable and
accrued liabilities
|
|
|
2,702
|
|
|
|
2,645
|
|
|
Total current liabilities
|
|
|
2,896
|
|
|
|
2,908
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt,
excluding current maturities
|
|
|
4,717
|
|
|
|
5,255
|
|
|
Other non-current
liabilities
|
|
|
1,318
|
|
|
|
1,502
|
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling
interests
|
|
|
302
|
|
|
|
291
|
|
|
Crown Holdings
shareholders' equity
|
|
|
366
|
|
|
|
94
|
|
|
Total
equity
|
|
|
668
|
|
|
|
385
|
|
|
Total
|
|
$
|
9,599
|
|
|
$
|
10,050
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The December
31, 2015 balance sheet (and prior periods) has been revised from
previously reported amounts to correct how the Company calculates
its estimated asbestos liability. The revisions for 2015 include an
increase of $80 million to the asbestos liability reported within
other non-current liabilities, an increase of $30 million to
deferred tax assets reported within other non-current assets, and a
decrease of $50 million to total equity. Consistent with
applicable accounting standards, the Company now calculates its
estimated liability without limitation to a specified time
period.
|
|
Consolidated
Statements of Cash Flows (Condensed & Unaudited)
(in
millions)
|
|
Year ended
December 31,
|
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
583
|
|
|
$
|
461
|
|
|
Depreciation and
amortization
|
|
|
|
247
|
|
|
|
237
|
|
|
Provision for
restructuring and other
|
|
|
|
44
|
|
|
|
66
|
|
|
Pension
expense
|
|
|
|
28
|
|
|
|
48
|
|
|
Pension
contributions
|
|
|
|
(103)
|
|
|
|
(79)
|
|
|
Stock-based
compensation
|
|
|
|
20
|
|
|
|
27
|
|
|
Working capital
changes and other
|
|
|
|
111
|
|
|
|
196
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
(A)
|
|
|
|
930
|
|
|
|
956
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities
|
|
|
|
|
|
|
|
|
|
|
Purchase of
business
|
|
|
|
|
|
|
|
(1,207)
|
|
|
Capital
expenditures
|
|
|
|
(473)
|
|
|
|
(354)
|
|
|
Proceeds from sale of
business
|
|
|
|
|
|
|
|
33
|
|
|
Other
|
|
|
|
31
|
|
|
|
(20)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used for investing
activities
|
|
|
|
(442)
|
|
|
|
(1,548)
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities
|
|
|
|
|
|
|
|
|
|
|
Net change in
debt
|
|
|
|
(566)
|
|
|
|
528
|
|
|
Dividends paid to
noncontrolling interests
|
|
|
|
(80)
|
|
|
|
(48)
|
|
|
Debt issue
costs
|
|
|
|
(18)
|
|
|
|
(18)
|
|
|
Other, net
|
|
|
|
48
|
|
|
|
(56)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used for)
financing activities
|
|
|
|
(616)
|
|
|
|
406
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
|
|
(30)
|
|
|
|
(62)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash
and cash equivalents
|
|
|
|
(158)
|
|
|
|
(248)
|
|
|
Cash and cash
equivalents at January 1
|
|
|
|
717
|
|
|
|
965
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents at December 31
|
|
|
$
|
559
|
|
|
$
|
717
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(A)
Adjusted free cash flow is defined by the Company as net cash from
operating activities less capital expenditures and certain other
items. A reconciliation from net cash from operating
activities to adjusted free cash flow for the three months and
years ended December 31, 2016 and 2015 follows:
|
|
|
|
|
|
Three Months
Ended
December
31,
|
|
Year
Ended
December
31,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Net cash from
operating activities
|
$554
|
|
$641
|
|
$930
|
|
$956
|
|
Capital
expenditures
|
(229)
|
|
(178)
|
|
(473)
|
|
(354)
|
|
Free cash
flow
|
325
|
|
463
|
|
457
|
|
602
|
|
Premiums paid to
retire debt early
|
|
|
|
|
22
|
|
|
|
Adjusted free cash
flow
|
$325
|
|
$463
|
|
$479
|
|
$602
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Supplemental Data (Unaudited)
|
|
(in millions, except
per share data)
|
|
|
Reconciliation of
Adjusted Diluted Earnings Per Share for Year Ended December 31,
2013
|
|
|
|
|
|
|
|
Year
Ended
|
|
|
|
December 31, 2013
(1)
|
|
|
|
|
Net
Income
|
|
Per
Share
|
|
|
|
|
|
|
|
|
Net income/diluted
earnings per share
attributable to Crown Holdings, as reported
|
|
|
$311
|
|
$2.21
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
Provision for
asbestos
|
|
|
52
|
|
.37
|
|
Restructuring and
other
|
|
|
37
|
|
.26
|
|
Loss from early
extinguishment of debt
|
|
|
41
|
|
.29
|
|
Income taxes
|
|
|
(21)
|
|
(.14)
|
|
Adjusted net
income/diluted earnings per share
|
|
|
$420
|
|
$2.99
|
|
|
|
|
|
|
|
|
(1) This reconciliation
has been revised from previously reported amounts to reflect the
change in reporting of asbestos liabilities as discussed in Note 1
to the Consolidated Balance Sheet contained in this release. The
revisions had no impact on the adjusted net income or adjusted
diluted earnings per share as previously reported.
|
|
|
Reconciliation of
Net Cash from Operating Activities to Adjusted Free Cash Flow for
2014 to 2016
|
|
|
|
2016
|
|
2015
|
|
2014
|
|
Cumulative
|
|
|
Net cash from
operating activities
|
|
$930
|
|
$956
|
|
$912
|
|
$2,798
|
|
|
Capital
expenditures
|
|
(473)
|
|
(354)
|
|
(328)
|
|
(1,155)
|
|
|
Free cash
flow
|
|
457
|
|
602
|
|
584
|
|
1,643
|
|
|
Premiums paid to
retire debt early
|
|
22
|
|
|
|
28
|
|
50
|
|
|
Adjusted free cash
flow
|
|
$479
|
|
$602
|
|
$612
|
|
$1,693
|
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/crown-holdings-inc-reports-fourth-quarter-2016-results-300401675.html
SOURCE Crown Holdings, Inc.