PHILADELPHIA, Feb. 7, 2018
/PRNewswire/ -- Crown Holdings, Inc. (NYSE: CCK) today
announced its financial results for the fourth quarter and year
ended December 31, 2017.
Highlights
- Loss per share of $0.67 for
the quarter, including non-cash charge of $1.32 per share for impact of U.S. tax
reform
- Adjusted earnings per share of $0.79 for the quarter; $4.03 full year versus $3.93 in 2016
- Full year cash flow from operations of $760 million; adjusted free cash flow of
$503 million
- Beverage can volumes grew 4.5% in quarter
- Entered into agreement to acquire Signode Industrial
Group
Net sales in the fourth quarter increased to $2,168 million compared to $1,923 million in the fourth quarter of 2016,
reflecting increased global beverage and food can volumes, the pass
through of higher raw material costs, and $83 million of favorable currency
translation.
Income from operations was $222
million in the fourth quarter of 2017. Segment income
improved to $245 million in the
quarter over the $236 million in the
fourth quarter of 2016, including an $11
million benefit from currency translation.
Commenting on the quarter, Timothy J.
Donahue, President and Chief Executive Officer, stated, "Our
solid fourth quarter and full year operating results were in line
with expectations and reflect strong performances throughout the
Company's global businesses. We exceeded our adjusted free
cash flow projections due to another year of excellent working
capital performance. Global beverage can volumes advanced
three percent for the full year with particularly robust shipments
in Europe, Latin America and Southeast Asia.
"In January 2018, ahead of
schedule, the new glass facility in Chihuahua, Mexico commenced operations to
serve the expanding beer market in the northern part of the
country. Additional growth projects completed in 2017
included the start-up of a two-line beverage can plant in
Nichols, New York, the conversion
of a second beverage can line in Custines, France from steel to aluminum, a beverage can
capacity expansion in Colombia,
the commencement of a one-line beverage can facility in
Jakarta, Indonesia and the
addition of a second production line to our Danang, Vietnam beverage can plant. In 2018, we
expect to begin production at our new one-line beverage can plant
in Yangon, Myanmar during the
second quarter and our new two-line beverage can facility in
Valencia, Spain during the fourth
quarter. The Valencia plant
will commence our conversion from steel to aluminum for beverage
cans in the growing Spanish market. Additionally, we will
construct a third beverage can line at our existing plant in
Phnom Penh, Cambodia. These
initiatives reflect that the can continues to become the
increasingly preferred package of beverage marketers and consumers
around the world.
"In December 2017, Crown announced
that it has entered into an agreement to acquire Signode Industrial
Group, a leading global provider of transit packaging systems and
solutions, from The Carlyle Group for cash consideration of
$3.91 billion. With this
acquisition, Crown adds a portfolio of premier transit and
protective packaging franchises to its existing metal packaging
businesses, further broadening and diversifying our customer base
and significantly increasing cash flow. Signode's products
supply critical in-transit protection to high value, high volume
goods across a number of end-markets, including metals, food and
beverage, corrugated, construction and agriculture, among
others. Combined with its highly engineered equipment and
service business, Signode's geographic and product mix will provide
a strong platform for value creation."
Interest expense was $65 million
in the fourth quarter of 2017 compared to $62 million in 2016 primarily due to an increase
in average borrowing rates.
During the fourth quarter of 2017, the Company recorded a tax
charge of $177 million to recognize
the estimated impact of the Tax Cuts and Jobs Act (the
"Act"). The charge primarily includes an adjustment to write
down the Company's existing U.S. net deferred tax assets to account
for a reduction in the U.S. statutory rate from 35% to 21%, and
provisional adjustments principally for the estimated impact of
deemed repatriation of foreign earnings. The provisional
elements of the charge represent a reasonable estimate of the
impact of certain requirements of the Act and will be updated as
new information becomes available during the measurement period,
which concludes in December 2018. The Company does not expect
these charges to result in the payment of cash due to its
anticipated use of existing tax attributes to offset any tax
payments that would otherwise be owed.
The net loss attributable to Crown Holdings in the fourth
quarter of 2017 was $89 million
compared to income of $65 million in
the fourth quarter of 2016. The reported loss per share was
$0.67 in the fourth quarter of 2017
compared to diluted earnings per share of $0.47 in the prior year quarter. Adjusted
diluted earnings per share were $0.79
compared to $0.71 in the fourth
quarter of 2016.
A reconciliation from net income and diluted earnings per share
to adjusted net income and adjusted diluted earnings per share is
provided below.
In connection with the Signode transaction discussed above, in
January of this year the Company, through its subsidiaries, issued
€335 million principal amount of 2.25% senior unsecured notes due
2023, and €500 million principal amount of 2.875% senior unsecured
notes and $875 million principal
amount of 4.75% senior unsecured notes due 2026. The Company
also entered into agreements with lenders for €750 million and
$1.25 billion of Term Loan B
borrowings to be drawn at the closing of the acquisition.
On January 3, 2018, the Company
issued a Worker Adjustment and Retraining Notification (WARN)
announcing its intention to close the Lawrence, Massachusetts beverage can
manufacturing facility. The facility consists of two
production lines with a capacity of 1.6 billion 12-ounce beverage
cans per year and employs approximately 100 people.
Full Year Results
Net sales for the full year were
$8,698 million compared to
$8,284 million in 2016, primarily due
to increased global beverage and food can volumes, the pass through
of higher raw material costs, and $19
million of favorable currency translation.
Income from operations was $1,077
million in 2017. Segment income improved to
$1,128 million over the $1,078 million in 2016, including a benefit of
$5 million from currency
translation.
Interest expense was $252 million
in 2017 compared to $243 million in
the prior year primarily due to an increase in average borrowing
rates.
.
Net income attributable to Crown Holdings for 2017 was
$323 million compared to $496 million in 2016. Reported diluted
earnings per share were $2.38
compared to $3.56 in 2016.
Adjusted diluted earnings per share were $4.03 compared to $3.93 in 2016.
During 2017, the Company purchased 6.2 million shares of its
common stock for $339 million.
Outlook
Excluding the impact of the Signode
acquisition discussed above, the Company currently expects first
quarter and full year 2018 adjusted diluted earnings per share to
be in the ranges of $0.75 to
$0.85 per share and $4.30 to $4.50 per
share, respectively. Also excluding the impact of the acquisition,
the Company currently expects a full year 2018 adjusted effective
tax rate of approximately 26%, cash provided by operating
activities (before the impact of new accounting guidance discussed
below) of approximately $925 million,
and capital expenditures of approximately $425 million.
Impact of New Accounting Pronouncements in 2018
As
previously disclosed in each of the Company's filings on Form 10-Q
for 2017, three recently issued accounting standards are expected
to have an impact on the Company's reporting and disclosure in
2018.
Under new guidance, only the service cost component of pension
and postretirement benefit costs will be presented with other
compensation costs as a deduction in arriving at income from
operations. The remaining components will be reported outside
income from operations as a separate line item. The expected
impact of this guidance on the Company's 2018 results will be a
reduction in income from operations of approximately $67 million as compared to what would have been
reported under the previous guidance, with an offsetting gain
reported below income from operations and no impact on net income
or earnings per share. Prior period results will be restated to
reflect the new guidance.
The Company expects that new guidance related to the
classification of certain cash receipts and payments associated
with its receivables securitization programs will result in a
change to the classification of these payments on the statement of
cash flows. Specifically, the Company expects that certain
cash receipts that were previously reported as cash from operating
activities will now be reported as cash from investing
activities. The Company intends to revise its definition of
adjusted free cash flow in 2018 to include those receipts that were
previously reported in operating activities and will now be
reported as investing activities. The change in classification will
have no impact on cash available for debt payment or other uses.
Prior period cash flow statements will be restated to reflect the
new guidance.
The Company expects that new revenue recognition rules will
accelerate the timing of revenue recognized on certain of its
products. The new rules are not expected to materially impact the
amount of revenue recognized over the full year of 2018 when
compared to the previous accounting guidance, but could have an
impact on the amounts recognized on a quarterly basis. Upon
adoption of the standard on January 1,
2018, the Company will record unbilled receivables,
representing revenue that is accelerated as of that date under the
new guidance, with offsets to reduce inventory and record net
profit directly in equity. The new guidance will have no
impact on cash flow from operations or free cash flow. Prior period
results will not be restated to reflect the new guidance.
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 net income, income per diluted
share, effective tax rates 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.
Reconciliations of estimated adjusted diluted earnings per share
for the first quarter and full year of 2018 to estimated diluted
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 8, 2018 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 15. The telephone numbers for the replay
are (203) 369-3622 or toll free (888) 566-0708.
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; the continuation of performance
trends in 2018; the Company's ability to successfully complete and
begin production at capacity expansion projects within expected
timelines and budgets in Cambodia,
Myanmar, and Spain; continued performance improvements at
new plants and capacity expansions in Colombia, France, Indonesia, Mexico and New
York; continued global beverage, food and aerosol can
growth; customer and consumer preference for beverage cans; the
Company's ability to close the Signode transaction on the
anticipated timeframe or at all, including whether the transaction
will be approved by competition authorities in relevant
jurisdictions; whether the operations of Signode can be
successfully integrated in the Company's operations; the Company's
ability to generate expected earnings and cash flow provided by
operating activities in 2018 while maintaining capital expenditures
at forecasted levels; the timing and amount of future adjustments,
if any, to the provisional tax charges recorded as part of the Tax
Cuts and Jobs Act; the cash tax impact of the Act and the impact of
new accounting pronouncements on the Company's reporting and
disclosure in 2018 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, 2016 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,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net
sales
|
$2,168
|
|
$1,923
|
|
$8,698
|
|
$8,284
|
Cost of products
sold
|
1,758
|
|
1,533
|
|
6,952
|
|
6,583
|
Depreciation and
amortization
|
64
|
|
59
|
|
247
|
|
247
|
Selling and
administrative expense
|
99
|
|
93
|
|
371
|
|
368
|
Provision for
asbestos
|
3
|
|
21
|
|
3
|
|
21
|
Restructuring and
other
|
22
|
|
25
|
|
48
|
|
44
|
Income from
operations (1)
|
222
|
|
192
|
|
1,077
|
|
1,021
|
Foreign
exchange
|
|
|
6
|
|
4
|
|
(16)
|
Interest
expense
|
65
|
|
62
|
|
252
|
|
243
|
Interest
income
|
(5)
|
|
(4)
|
|
(15)
|
|
(12)
|
Loss from early
extinguishment of debt
|
|
|
|
|
7
|
|
37
|
Income before
income taxes
|
162
|
|
128
|
|
829
|
|
769
|
Provision for income
taxes
|
223
|
|
35
|
|
401
|
|
186
|
Net
income/(loss)
|
(61)
|
|
93
|
|
428
|
|
583
|
Net income
attributable to noncontrolling interests
|
(28)
|
|
(28)
|
|
(105)
|
|
(87)
|
Net income/(loss)
attributable to Crown Holdings
|
$(89)
|
|
$65
|
|
$323
|
|
$496
|
|
|
|
|
|
|
|
|
Earnings/(loss)
per share attributable to Crown
Holdings common
shareholders:
|
|
|
|
|
|
|
|
Basic
|
$(0.67)
|
|
$0.47
|
|
$2.39
|
|
$3.58
|
Diluted
|
$(0.67)
|
|
$0.47
|
|
$2.38
|
|
$3.56
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
133,445,697
|
|
138,783,951
|
|
135,286,296
|
|
138,527,233
|
Diluted
|
133,804,236
|
|
139,527,141
|
|
135,608,800
|
|
139,314,402
|
Actual common shares
outstanding
|
134,275,609
|
|
139,840,228
|
|
134,275,609
|
|
139,840,228
|
(1) A reconciliation from
income from operations to segment income follows.
|
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, and the timing impact of hedge
ineffectiveness.
|
Three Months
Ended
December
31,
|
|
Year
Ended
December
31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Income from
operations
|
$
|
222
|
|
$
|
192
|
|
$
|
1,077
|
|
$
|
1,021
|
Provision for
asbestos
|
|
3
|
|
|
21
|
|
|
3
|
|
|
21
|
Provision for
restructuring and other
|
|
22
|
|
|
25
|
|
|
48
|
|
|
44
|
Impact of hedge
ineffectiveness (1)
|
|
(2)
|
|
|
(2)
|
|
|
|
|
|
(8)
|
Segment
income
|
|
245
|
|
|
236
|
|
|
1,128
|
|
|
1,078
|
Foreign currency
translation (2)
|
|
(11)
|
|
|
|
|
|
(5)
|
|
|
|
Constant currency
segment income
|
$
|
234
|
|
$
|
236
|
|
$
|
1,123
|
|
$
|
1,078
|
|
|
|
|
|
|
|
|
|
|
(1) Included in cost of
products sold
|
|
Segment
Information
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
Net
Sales
|
2017 Actual
|
|
2017
at 2016 rates
(2)
|
|
2016 Actual
|
|
2017 Actual
|
|
2017
at 2016 rates
(2)
|
|
2016 Actual
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
Beverage
|
$
|
762
|
|
$
|
749
|
|
$
|
689
|
|
$
|
2,928
|
|
$
|
2,928
|
|
$
|
2,757
|
North America
Food
|
|
165
|
|
|
164
|
|
|
148
|
|
|
679
|
|
|
679
|
|
|
652
|
European
Beverage
|
|
324
|
|
|
307
|
|
|
291
|
|
|
1,457
|
|
|
1,459
|
|
|
1,420
|
European
Food
|
|
458
|
|
|
417
|
|
|
396
|
|
|
1,935
|
|
|
1,909
|
|
|
1,855
|
Asia
Pacific
|
|
312
|
|
|
305
|
|
|
277
|
|
|
1,177
|
|
|
1,176
|
|
|
1,116
|
Total reportable
segments
|
|
2,021
|
|
|
1,942
|
|
|
1,801
|
|
|
8,176
|
|
|
8,151
|
|
|
7,800
|
Non-reportable
segments
|
|
147
|
|
|
143
|
|
|
122
|
|
|
522
|
|
|
528
|
|
|
484
|
Total net
sales
|
$
|
2,168
|
|
$
|
2,085
|
|
$
|
1,923
|
|
$
|
8,698
|
|
$
|
8,679
|
|
$
|
8,284
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
Beverage
|
$
|
129
|
|
$
|
128
|
|
$
|
127
|
|
$
|
474
|
|
$
|
475
|
|
$
|
456
|
North America
Food
|
|
10
|
|
|
10
|
|
|
12
|
|
|
71
|
|
|
71
|
|
|
69
|
European
Beverage
|
|
38
|
|
|
35
|
|
|
39
|
|
|
239
|
|
|
238
|
|
|
243
|
European
Food
|
|
37
|
|
|
32
|
|
|
32
|
|
|
247
|
|
|
244
|
|
|
244
|
Asia
Pacific
|
|
44
|
|
|
43
|
|
|
41
|
|
|
168
|
|
|
167
|
|
|
152
|
Total reportable
segments
|
|
258
|
|
|
248
|
|
|
251
|
|
|
1,199
|
|
|
1,195
|
|
|
1,164
|
Non-reportable
segments
|
|
16
|
|
|
15
|
|
|
18
|
|
|
68
|
|
|
69
|
|
|
70
|
Corporate and other
unallocated items
|
|
(29)
|
|
|
(29)
|
|
|
(33)
|
|
|
(139)
|
|
|
(141)
|
|
|
(156)
|
Total segment
income
|
$
|
245
|
|
$
|
234
|
|
$
|
236
|
|
$
|
1,128
|
|
$
|
1,123
|
|
$
|
1,078
|
(2)
|
Information presented
for 2017 at 2016 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,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net income/diluted
earnings per share
attributable to Crown Holdings, as reported
|
$(89)
|
|
$(0.67)
|
|
$65
|
|
$0.47
|
|
$323
|
|
$2.38
|
|
$496
|
|
$3.56
|
Provision for asbestos
(1)
|
3
|
|
.02
|
|
21
|
|
.15
|
|
3
|
|
.02
|
|
21
|
|
.15
|
Restructuring and
other (2)
|
22
|
|
.16
|
|
25
|
|
.18
|
|
48
|
|
.35
|
|
44
|
|
.32
|
Loss from early
extinguishment of debt (3)
|
|
|
|
|
|
|
|
|
7
|
|
.05
|
|
37
|
|
.27
|
Impact of hedge
ineffectiveness (4)
|
(2)
|
|
(.01)
|
|
(2)
|
|
(.02)
|
|
|
|
|
|
(8)
|
|
(.06)
|
Income taxes
(5)
|
172
|
|
1.29
|
|
(10)
|
|
(.07)
|
|
166
|
|
1.23
|
|
(43)
|
|
(.31)
|
Adjusted net
income/diluted earnings per share
|
$106
|
|
$0.79
|
|
$99
|
|
$0.71
|
|
$547
|
|
$4.03
|
|
$547
|
|
$3.93
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax rate as
reported
|
137.7%
|
|
|
|
27.3%
|
|
|
|
48.4%
|
|
|
|
24.2%
|
|
|
Adjusted effective
tax rate (6)
|
27.6%
|
|
|
|
26.2%
|
|
|
|
26.5%
|
|
|
|
26.5%
|
|
|
(1)
|
In the fourth
quarters of 2017 and 2016, the Company recorded charges of $3
million ($2 million net of tax) and $21 million ($13 million net of
tax) to increase its reserves for asbestos related
liabilities.
|
|
|
(2)
|
In the fourth quarter
of 2017, the Company recorded restructuring and other charges of
$13 million ($11 million net of tax) primarily due to costs related
to the planned closures of a U.S. beverage can facility and a
promotional packaging facility in Europe. For the full year
of 2017, the Company recorded charges of $36 million ($29 million
net of tax) that additionally included costs to settle a litigation
matter related to Mivisa that arose prior to its acquisition by
Crown in 2014. 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 2017, the Company recorded charges of $9 million
($7 million net of tax) and $12 million ($11 million net of tax)
for asset sales and impairments primarily due to the closure of a
beverage can plant in China and planned closures of a U.S. beverage
can plant in the U.S. and a promotional packaging facility in
Europe. 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).
|
|
|
(3)
|
In the second quarter
of 2017, the Company recorded a charge of $7 million ($5 million
net of tax) for the write off of deferred financing fees in
connection with the refinancing of its term loan and revolving
credit facilities. 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 $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.
|
|
|
(4)
|
In the fourth quarter
of 2017, the Company recorded a benefit of $2 million ($2 million
net of tax) in cost of products sold related to the timing impact
of hedge ineffectiveness caused primarily by volatility in the
metal premium component of aluminum prices. There was no
impact for the full year of 2017. 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).
|
|
|
(5)
|
In the fourth quarter
and full year of 2017, the Company recorded income tax benefits of
$5 million and $11 million related to the items described above.
Also in the fourth quarter of 2017, the Company recorded a
charge of $177 million to recognize the impact of the "Tax Cut and
Jobs Act". 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.
|
|
|
(6)
|
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,
|
2017
|
|
2016
|
Assets
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
424
|
|
|
$
|
559
|
|
Receivables, net
|
|
|
1,041
|
|
|
|
865
|
|
Inventories
|
|
|
1,385
|
|
|
|
1,245
|
|
Prepaid expenses and other current assets
|
|
|
224
|
|
|
|
172
|
|
Total current assets
|
|
|
3,074
|
|
|
|
2,841
|
|
|
|
|
|
|
|
|
|
|
Goodwill and
intangible assets
|
|
|
3,518
|
|
|
|
3,263
|
|
Property, plant and
equipment, net
|
|
|
3,239
|
|
|
|
2,820
|
|
Other non-current
assets
|
|
|
832
|
|
|
|
675
|
|
Total
|
|
$
|
10,663
|
|
|
$
|
9,599
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Short-term debt
|
|
$
|
62
|
|
|
$
|
33
|
|
Current maturities of long-term debt
|
|
|
64
|
|
|
|
161
|
|
Accounts payable and
accrued liabilities
|
|
|
3,124
|
|
|
|
2,702
|
|
Total current liabilities
|
|
|
3,250
|
|
|
|
2,896
|
|
|
|
|
|
|
|
|
|
|
Long-term debt,
excluding current maturities
|
|
|
5,217
|
|
|
|
4,717
|
|
Other non-current
liabilities
|
|
|
1,273
|
|
|
|
1,318
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling
interests
|
|
|
322
|
|
|
|
302
|
|
Crown Holdings
shareholders' equity
|
|
|
601
|
|
|
|
366
|
|
Total
equity
|
|
|
923
|
|
|
|
668
|
|
Total
|
|
$
|
10,663
|
|
|
$
|
9,599
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Statements of Cash Flows (Condensed & Unaudited)
(in
millions)
|
Year ended
December 31,
|
2017
|
|
2016
|
|
|
|
|
|
|
Cash flows from
operating activities
|
|
|
|
|
|
Net income
|
$
|
428
|
|
$
|
583
|
Depreciation and
amortization
|
|
247
|
|
|
247
|
Provision for
restructuring and other
|
|
48
|
|
|
44
|
Pension
expense
|
|
16
|
|
|
28
|
Pension
contributions
|
|
(296)
|
|
|
(103)
|
Stock-based
compensation
|
|
23
|
|
|
20
|
Income
taxes
|
|
247
|
|
|
16
|
Working capital
changes and other
|
|
47
|
|
|
95
|
|
|
|
|
|
|
Net cash
provided by operating activities (1)
|
|
760
|
|
|
930
|
|
|
|
|
|
|
Cash flows from
investing activities
|
|
|
|
|
|
Capital
expenditures
|
|
(498)
|
|
|
(473)
|
Other
|
|
(11)
|
|
|
31
|
|
|
|
|
|
|
Net cash used for investing
activities
|
|
(509)
|
|
|
(442)
|
|
|
|
|
|
|
Cash flows from
financing activities
|
|
|
|
|
|
Net change in
debt
|
|
12
|
|
|
(566)
|
Dividends paid to
noncontrolling interests
|
|
(93)
|
|
|
(80)
|
Common stock
repurchased
|
|
(339)
|
|
|
(8)
|
Debt issue
costs
|
|
(16)
|
|
|
(18)
|
Other, net
|
|
36
|
|
|
56
|
|
|
|
|
|
|
Net cash used for financing
activities
|
|
(400)
|
|
|
(616)
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
14
|
|
|
(30)
|
|
|
|
|
|
|
Net change in cash
and cash equivalents
|
|
(135)
|
|
|
(158)
|
Cash and cash
equivalents at January 1
|
|
559
|
|
|
717
|
|
|
|
|
|
|
Cash and cash
equivalents at December 31
|
$
|
424
|
|
$
|
559
|
|
|
|
|
|
|
(1)
|
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 and twelve months ended
December 31, 2017 and 2016 follows:
|
|
Three Months
Ended
December 31,
|
|
Year Ended
December 31,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Net cash from
operating activities
|
$272
|
|
$554
|
|
$760
|
|
$930
|
|
Capital
expenditures
|
(216)
|
|
(229)
|
|
(498)
|
|
(473)
|
|
Free cash
flow
|
56
|
|
325
|
|
262
|
|
457)
|
|
Pension prefunding
(2)
|
241
|
|
|
|
241
|
|
|
|
Premiums paid to
retire debt early
|
|
|
|
|
|
|
22
|
|
Adjusted free cash
flow
|
$297
|
|
$325
|
|
$503
|
|
$479
|
|
(2)
|
Net cash from
operating activities for the three and twelve months ended December
31, 2017 includes the impact of a voluntary prefunding contribution
to the Company's U.K. defined benefit pension plan that will reduce
future contributions that would otherwise be made.
|
View original
content:http://www.prnewswire.com/news-releases/crown-holdings-inc-reports-fourth-quarter-2017-results-300595417.html
SOURCE Crown Holdings, Inc.