TAMPA,
Fla., Feb. 5, 2024 /PRNewswire/ -- Crown
Holdings, Inc. (NYSE: CCK) today announced its financial results
for the fourth quarter and full year ended December 31, 2023.
Fourth Quarter Results
Net sales in the fourth quarter were $2,858 million compared to $3,012 million in the fourth quarter of 2022
reflecting higher beverage can volumes in Americas Beverage and
favorable foreign currency translation of $42 million, offset by the pass through of
$145 million in lower material costs
and lower volumes across most other businesses.
Income from operations was $259
million in the fourth quarter compared to $229 million in the fourth quarter of 2022.
Segment income in the fourth quarter of 2023 was $382 million compared to $292 million in the prior year fourth quarter
reflecting higher beverage can volumes in Americas Beverage and the
contractual recovery of prior years' inflationary cost increases in
European Beverage, both more than offsetting the under-absorption
of fixed costs.
Timothy J. Donahue, Chairman,
President and Chief Executive Officer, stated, "Fourth Quarter
segment income improved by more than 30% over the prior year fueled
by margin performance in the Americas Beverage business which
benefited from 5% volume growth in North
America and 2% growth in Brazil.
"Production schedules were further adjusted during the fourth
quarter with significant working capital reduction achieved across
the businesses. While fixed cost absorption was considerably
lower during the fourth quarter, these efforts contributed to free
cash flow well above prior expectations, despite a cash flow
reduction of approximately $200
million in off-balance sheet financing arrangements."
During the fourth quarter, the Company made the decision to
cease operations at its Batesville,
Mississippi beverage can plant and Decatur, Illinois aerosol can plant.
Additionally, and as part of a manufacturing modernization program,
the Company has ceased operations at its beverage can facilities in
Ho Chi Minh City, Vietnam and
Singapore with capacity relocated
to the Company's new high-speed plant in Vung Tau, Vietnam. These actions will
improve operational efficiencies, utilization rates and fixed cost
absorption.
Interest expense was $113 million
in the fourth quarter of 2023 compared to $90 million in the fourth quarter of 2022
reflecting higher interest rates.
Net income attributable to Crown Holdings in the fourth quarter
was $32 million compared to
$89 million in the fourth quarter of
2022. Reported diluted earnings per share were $0.27 in the fourth quarter of 2023 compared to
$0.74 in 2022. Adjusted diluted
earnings per share were $1.24
compared to $1.17 in 2022, below our
prior estimates owing principally to under-absorption of fixed
costs and lower equity earnings.
Full Year Results
Net sales for 2023 were $12,010
million compared to $12,943
million in 2022, reflecting higher beverage can volumes in
Americas Beverage and favorable foreign currency translation of
$77 million, offset by the pass
through of $720 million in lower
material costs and lower overall net volumes.
Income from operations was $1,269
million in 2023, which included $114
million of restructuring charges, compared to $1,336 million in 2022, which included a net
restructuring gain of $52
million. Segment income for the full year of 2023 was
$1,546 million versus $1,443 million in the prior year period,
reflecting the benefits from higher beverage can volumes in
Americas Beverage, the contractual recovery of prior years'
inflationary cost increases in European Beverage and cost reduction
initiatives in Transit Packaging, partially offset by lower overall
net volumes across most other businesses and a $60 million year over year inventory impact of
steel repricing in the Other segment.
Mr. Donahue further commented, "The Company achieved record
adjusted EBITDA with an 8% improvement over the prior year, despite
challenging macroeconomic conditions in most markets.
Operating performance remained strong in 2023, driven by solid
results in our three largest businesses: Americas Beverage,
European Beverage and Transit Packaging. Both Americas
Beverage and Transit Packaging achieved record levels of income in
2023, with each gaining 18% versus prior year. European
Beverage significantly improved income performance, despite volume
softness, primarily through more comprehensive raw material and
other inflationary pass-through provisions within contracts.
Beverage can volumes in North
America advanced 6% during the year with Brazil up 4% while shipments in both
Europe and Asia-Pacific continued to be soft reflecting
weak consumer demand.
Interest expense was $436 million
for the full year of 2023 compared to $284
million in 2022, primarily due to higher interest rates.
Net income attributable to Crown Holdings in 2023 was
$450 million compared to $727 million in 2022. Reported diluted
earnings per share were $3.76
compared to $5.99 in 2022 and
adjusted diluted earnings per share were $5.86 compared to $6.75 in 2022.
Outlook
"Looking ahead to 2024, our focus will be on cash generation and
continuous operational improvement. The Company has
established a manufacturing platform which will allow us to service
existing and additional market demand with significantly reduced
levels of capital investment. The Company expects capital
expenditures of no more than $500
million in each of 2024 and 2025, with the resulting
increased cash flow being used to further reduce net leverage and
return capital to shareholders.", stated Mr. Donahue.
The Company currently estimates full year 2024 adjusted diluted
earnings per share to be in the range of $5.80 to $6.20
compared to $5.86 in 2023 reflecting
demand softness in the Company's beverage can making equipment and
North American aerosol businesses, and a consumer that remains
under pressure in most markets. We expect a tax rate of
approximately 25% and cash provided by operating activities of
approximately $1.23 billion.
First quarter adjusted diluted earnings per share is expected to
be in the range of $0.90 to
$1.00.
Non-GAAP Measures
Segment income, adjusted free cash flow, adjusted net leverage
ratio, adjusted net income, the adjusted effective tax rate,
adjusted diluted earnings per share, net interest expense, EBITDA
and adjusted EBITDA 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, cash flow, leverage ratio, net income,
effective tax rates, diluted earnings per share or interest expense
and interest income 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 and
adjusted net leverage ratio as the principal measures of its
liquidity. The Company considers all 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 free cash flow and adjusted net leverage ratio provide
meaningful measures 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
dividends. The Company believes that adjusted net income,
segment income, the adjusted effective tax rate and adjusted
diluted earnings per share are useful in evaluating the Company's
operations as these measures are adjusted for items that affect
comparability between periods. Segment income, adjusted free
cash flow, adjusted net leverage ratio, adjusted net income, the
adjusted effective tax rate, adjusted diluted earnings per share,
net interest expense, EBITDA and adjusted EBITDA are derived from
the Company's Consolidated Statements of Operations, Cash Flows and
Consolidated Balance Sheets, as applicable, and reconciliations to
segment income, adjusted free cash flow, adjusted net leverage
ratio, adjusted net income, the adjusted effective tax rate,
adjusted diluted earnings per share and adjusted EBITDA can be
found within this release. Reconciliations of estimated
adjusted diluted earnings per share for the first quarter and full
year of 2024 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 and other costs, asset
impairment charges, asbestos-related charges, losses from early
extinguishment of debt, pension settlement and curtailment charges,
the tax and noncontrolling interest impact of the items above, and
the impact of tax law changes or other tax matters.
Conference Call
The Company will hold a conference call tomorrow, February 6, 2024 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 630-395-0194 or toll-free 888-324-8108 and the access
password is "packaging." A live webcast of the call will be
made available to the public on the internet at the Company's
website, www.crowncork.com. A replay of the conference call
will be available for a one-week period ending at midnight on
February 13, 2024. The
telephone numbers for the replay are 203-369-0184 or toll free
866-361-4936.
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 Company's ability to continue to
operate its plants, distribute its products, and maintain its
supply chain; the future impact of currency translation; the
continuation of performance and market trends in 2024, including
consumer preference for beverage cans and global beverage can
demand; the future impact of inflation, including the potential for
higher interest rates and energy prices and the Company's ability
to recover raw material and other inflationary costs; future demand
for food cans; the Company's ability to successfully complete its
previously announced capacity expansion projects and begin
production within expected timelines; and the Company's ability to
decrease capital expenditures and increase cash flow and to further
reduce net leverage, 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, 2022 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 worldwide
leader in the design, manufacture and sale of packaging products
for consumer goods and industrial products. World
headquarters are located in Tampa,
Florida.
For more information, contact:
Kevin C. Clothier, Senior Vice
President and Chief Financial Officer, (215) 698-5281
Thomas T. Fischer, Vice President,
Investor Relations and Corporate Affairs, (215) 552-3720
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,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net
sales
|
$ 2,858
|
|
$ 3,012
|
|
$ 12,010
|
|
$
12,943
|
Cost
of products sold
|
2,245
|
|
2,509
|
|
9,546
|
|
10,643
|
Depreciation and amortization
|
127
|
|
114
|
|
499
|
|
460
|
Selling and administrative expense
|
145
|
|
137
|
|
582
|
|
556
|
Restructuring and other
|
82
|
|
23
|
|
114
|
|
(52)
|
Income from
operations (1)
|
259
|
|
229
|
|
1,269
|
|
1,336
|
Loss
on debt extinguishment
|
1
|
|
|
|
1
|
|
11
|
Other pension and postretirement
|
11
|
|
(3)
|
|
49
|
|
(16)
|
Foreign exchange
|
10
|
|
4
|
|
41
|
|
16
|
Earnings before
interest and taxes
|
237
|
|
228
|
|
1,178
|
|
1,325
|
Interest expense
|
113
|
|
90
|
|
436
|
|
284
|
Interest income
|
(19)
|
|
(6)
|
|
(53)
|
|
(15)
|
Income from operations before income
taxes
|
143
|
|
144
|
|
795
|
|
1,056
|
Provision for income taxes
|
59
|
|
25
|
|
222
|
|
243
|
Equity earnings
|
(6)
|
|
3
|
|
14
|
|
42
|
Net
income
|
78
|
|
122
|
|
587
|
|
855
|
Net
income attributable to noncontrolling interests
|
46
|
|
33
|
|
137
|
|
128
|
Net income
attributable to Crown Holdings
|
$
32
|
|
$
89
|
|
$
450
|
|
$ 727
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
attributable to Crown Holdings
common
shareholders:
|
|
|
|
|
|
|
|
Basic
|
$
0.27
|
|
$ 0.75
|
|
$
3.77
|
|
$ 6.01
|
Diluted
|
$
0.27
|
|
$
0.74
|
|
$
3.76
|
|
$ 5.99
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
119,507,491
|
|
119,160,922
|
|
119,408,789
|
|
120,855,695
|
Diluted
|
119,743,953
|
|
119,498,979
|
|
119,666,669
|
|
121,376,604
|
Actual common shares
outstanding
|
120,644,313
|
|
119,945,302
|
|
120,644,313
|
|
119,945,302
|
|
|
|
|
|
|
|
|
(1)
Reconciliation from income from operations to segment income
follows.
|
|
|
|
|
|
|
Consolidated
Supplemental Financial Data (Unaudited)
(in
millions)
|
|
|
Reconciliation from
Income from Operations to 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 exclude intangibles amortization
charges and provisions for restructuring and other.
|
|
|
|
|
|
|
Three Months
Ended
December
31,
|
|
Year
Ended
December
31,
|
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
Income from
operations
|
$
|
259
|
|
$
|
229
|
|
$
|
1,269
|
|
$
|
1,336
|
|
|
Intangibles
amortization
|
|
41
|
|
|
40
|
|
|
163
|
|
|
159
|
|
|
Restructuring and
other
|
|
82
|
|
|
23
|
|
|
114
|
|
|
(52)
|
|
|
Segment income
|
$
|
382
|
|
$
|
292
|
|
$
|
1,546
|
|
$
|
1,443
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Information
|
During the fourth
quarter, the Company recast its segment reporting to reclassify
European corporate costs that were previously included in Corporate
and other unallocated items into the European Beverage
segment. The change was effective December 31, 2023, and
segment results for prior periods have been recast to conform to
the new presentation.
|
|
Net
Sales
|
|
Three Months
Ended
December 31,
|
|
Year
Ended
December
31,
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
Americas
Beverage
|
|
$
|
1,299
|
|
$
|
1,210
|
|
$
|
5,147
|
|
$
|
5,126
|
|
European
Beverage
|
|
|
392
|
|
|
453
|
|
|
1,939
|
|
|
2,114
|
|
Asia Pacific
|
|
|
320
|
|
|
395
|
|
|
1,297
|
|
|
1,615
|
|
Transit
Packaging
|
|
|
541
|
|
|
588
|
|
|
2,256
|
|
|
2,545
|
|
Other
(1)
|
|
|
306
|
|
|
366
|
|
|
1,371
|
|
|
1,543
|
|
Total net
sales
|
|
$
|
2,858
|
|
$
|
3,012
|
|
$
|
12,010
|
|
$
|
12,943
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
Beverage
|
|
$
|
255
|
|
$
|
177
|
|
$
|
876
|
|
$
|
742
|
|
European Beverage
(2)
|
|
|
18
|
|
|
7
|
|
|
199
|
|
|
123
|
|
Asia Pacific
|
|
|
47
|
|
|
29
|
|
|
154
|
|
|
172
|
|
Transit
Packaging
|
|
|
75
|
|
|
71
|
|
|
331
|
|
|
281
|
|
Other
(1)
|
|
|
17
|
|
|
34
|
|
|
117
|
|
|
240
|
|
Corporate and other
unallocated items (2)
|
|
|
(30)
|
|
|
(26)
|
|
|
(131)
|
|
|
(115)
|
|
Total segment
income
|
|
$
|
382
|
|
$
|
292
|
|
$
|
1,546
|
|
$
|
1,443
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Includes the Company's
food can, aerosol can and closures businesses in North America, and
beverage tooling and equipment operations in the U.S. and United
Kingdom.
|
|
|
(2)
|
See consolidated
supplemental data for recast of quarterly segment
income.
|
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
The following table
reconciles reported net income and diluted earnings per share
attributable to the Company to adjusted net income and adjusted
diluted earnings per share, as used elsewhere in this
release.
|
|
|
|
Three Months
Ended
December
31,
|
|
Year
Ended
December
31,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Net income/diluted
earnings per share
attributable
to Crown Holdings, as reported
|
|
$32
|
|
$0.27
|
|
$89
|
|
$0.74
|
|
$450
|
|
$3.76
|
|
$727
|
|
$5.99
|
|
Intangibles amortization (1)
|
|
41
|
|
0.35
|
|
40
|
|
0.34
|
|
163
|
|
1.37
|
|
159
|
|
1.31
|
|
Restructuring and other (2)
|
|
82
|
|
0.69
|
|
23
|
|
0.19
|
|
114
|
|
0.95
|
|
(52)
|
|
(0.43)
|
|
Loss
on debt extinguishment (3)
|
|
1
|
|
|
|
|
|
|
|
1
|
|
|
|
11
|
|
0.09
|
|
Other pension and postretirement (4)
|
|
|
|
|
|
|
|
|
|
6
|
|
0.05
|
|
1
|
|
|
|
Income taxes (5)
|
|
(7)
|
|
(0.07)
|
|
(14)
|
|
(0.12)
|
|
(40)
|
|
(0.33)
|
|
(34)
|
|
(0.28)
|
|
Equity earnings (6)
|
|
3
|
|
0.03
|
|
2
|
|
0.02
|
|
10
|
|
0.09
|
|
8
|
|
0.07
|
|
Noncontrolling interests (7)
|
|
(3)
|
|
(0.03)
|
|
|
|
|
|
(3)
|
|
(0.03)
|
|
|
|
|
|
Adjusted net
income/diluted earnings per share
|
|
$149
|
|
$1.24
|
|
$140
|
|
$1.17
|
|
$701
|
|
$5.86
|
|
$820
|
|
$6.75
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax rate as
reported
|
|
41.3 %
|
|
|
|
17.4 %
|
|
|
|
27.9 %
|
|
|
|
23.0 %
|
|
|
|
Adjusted effective tax
rate
|
|
24.7 %
|
|
|
|
18.8 %
|
|
|
|
24.3 %
|
|
|
|
23.6 %
|
|
|
|
|
Adjusted net income,
adjusted diluted earnings per share and the adjusted effective tax
rate are non-GAAP measures and are not meant to be considered in
isolation or as a substitute for net income, diluted earnings per
share and effective tax rates determined in accordance with U.S.
generally accepted accounting principles. The Company
believes these non-GAAP measures provide useful information to
evaluate the performance of the Company's ongoing
business.
|
|
|
(1)
|
In the fourth quarter
and full year of 2023, the Company recorded charges of $41 million
($31 million net of tax) and $163 million ($123 million net of tax)
for intangibles amortization arising from prior acquisitions.
In the fourth quarter and full year of 2022, the Company
recorded charges of $40 million ($30 million net of tax) and $159
million ($122 million net of tax) for intangibles amortization
arising from prior acquisitions.
|
|
|
(2)
|
In the fourth quarter
and full year of 2023, the Company recorded net restructuring and
other charges of $82 million ($67 million net of tax) and $114
million ($96 million net of tax). For the full year, these
charges primarily relate to asset impairments of $72 million and
severance and other exit costs associated with plant closures in
Americas Beverage, Asia Pacific and the Other segment. In the
fourth quarter and full year of 2022, the Company recorded net
restructuring and other charges of $23 million ($18 million net of
tax) and net restructuring and other gains of $52 million ($55
million net of tax) primarily related to a gain of $113 million
($102 million net of tax) for the sale of the Transit Packaging
segment's Kiwiplan business, partially offset by a restructuring
charge of $29 million ($22 million net of tax) related to an
overhead cost reduction program in the Transit Packaging
segment.
|
|
|
(3)
|
For the full year of
2022, the Company recorded a loss on debt extinguishment of $11
million ($10 million net of tax) for the early redemption of senior
notes due 2023 and the refinancing of its revolving credit facility
and term loans.
|
|
|
(4)
|
For the full year of
2023, the Company recorded a one-time termination charge of $6
million ($5 million net of tax) related to business reorganization
activities in Europe.
|
|
|
(5)
|
The Company recorded
income tax benefits of $7 million and $40 million in the fourth
quarter and full year of 2023 and $14 million and $34 million in
the fourth quarter and full year of 2022 related to tax matters,
including tax law changes, tax settlements and audits and the items
described above.
|
|
|
(6)
|
In the fourth quarters
and full year of 2023 and 2022, the Company recorded its
proportional share of intangible amortization and restructuring
charges, net of tax, recorded by its European tinplate equity
method investment, in the line Equity earnings.
|
|
|
(7)
|
In the fourth quarter
and full year of 2023, the Company recorded noncontrolling interest
benefits related to the items described above.
|
Consolidated Balance Sheets (Condensed &
Unaudited)
(in
millions)
|
December 31,
|
2023
|
|
2022
|
Assets
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents
|
|
$
|
1,310
|
|
|
$
|
550
|
|
Receivables, net
|
|
|
1,719
|
|
|
|
1,843
|
|
Inventories
|
|
|
1,613
|
|
|
|
2,014
|
|
Prepaid expenses and other current assets
|
|
|
191
|
|
|
|
252
|
|
Total current assets
|
|
|
4,833
|
|
|
|
4,659
|
|
|
|
|
|
|
|
|
|
|
Goodwill and intangible
assets, net
|
|
|
4,375
|
|
|
|
4,309
|
|
Property, plant and
equipment, net
|
|
|
5,062
|
|
|
|
4,540
|
|
Other non-current
assets
|
|
|
767
|
|
|
|
793
|
|
Total assets
|
|
$
|
15,037
|
|
|
$
|
14,301
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and equity
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
Short-term debt
|
|
$
|
16
|
|
|
$
|
76
|
|
Current maturities of long-term debt
|
|
|
759
|
|
|
|
109
|
|
Accounts
payable and accrued liabilities
|
|
|
3,426
|
|
|
|
3,747
|
|
Total current liabilities
|
|
|
4,201
|
|
|
|
3,932
|
|
|
|
|
|
|
|
|
|
|
Long-term debt,
excluding current maturities
|
|
|
6,699
|
|
|
|
6,792
|
|
Other non-current
liabilities
|
|
|
1,273
|
|
|
|
1,290
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling
interests
|
|
|
454
|
|
|
|
438
|
|
Crown Holdings
shareholders' equity
|
|
|
2,410
|
|
|
|
1,849
|
|
Total equity
|
|
|
2,864
|
|
|
|
2,287
|
|
Total liabilities and equity
|
|
$
|
15,037
|
|
|
$
|
14,301
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statements of Cash Flows (Condensed
& Unaudited)
(in
millions)
|
Year ended December 31,
|
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
Cash flows from operating
activities
|
|
|
|
|
|
|
|
|
Net
income
|
|
|
$
|
587
|
|
|
$
|
855
|
|
Depreciation and
amortization
|
|
|
|
499
|
|
|
|
460
|
|
Restructuring and
other
|
|
|
|
114
|
|
|
|
(52)
|
|
Pension and
postretirement expense
|
|
|
|
70
|
|
|
|
12
|
|
Pension
contributions
|
|
|
|
(19)
|
|
|
|
53
|
|
Stock-based
compensation
|
|
|
|
31
|
|
|
|
29
|
|
Working capital
changes and other
|
|
|
|
171
|
|
|
|
(554)
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
|
1,453
|
|
|
|
803
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing
activities
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
|
(793)
|
|
|
|
(839)
|
|
Acquisition and
divestitures, net
|
|
|
|
(109)
|
|
|
|
166
|
|
Equity method
investment distribution
|
|
|
|
68
|
|
|
|
7
|
|
Other
|
|
|
|
30
|
|
|
|
24
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used for investing activities
|
|
|
|
(804)
|
|
|
|
(642)
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing
activities
|
|
|
|
|
|
|
|
|
|
Net
change in debt
|
|
|
|
370
|
|
|
|
914
|
|
Dividends paid to shareholders
|
|
|
|
(115)
|
|
|
|
(106)
|
|
Common stock repurchased
|
|
|
|
(12)
|
|
|
|
(722)
|
|
Dividends paid to noncontrolling interests
|
|
|
|
(126)
|
|
|
|
(100)
|
|
Other, net
|
|
|
|
(1)
|
|
|
|
(11)
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by(used for) financing
activities
|
|
|
|
116
|
|
|
|
(25)
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate
changes on cash and cash equivalents
|
|
|
|
(4)
|
|
|
|
(90)
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash and
cash equivalents
|
|
|
|
761
|
|
|
|
46
|
|
Cash and cash
equivalents at January 1
|
|
|
|
639
|
|
|
|
593
|
|
|
|
|
|
|
|
|
|
|
|
Cash, cash equivalents and restricted cash at
December 31 (1)
|
|
|
$
|
1,400
|
|
|
$
|
639
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Cash and cash
equivalents include $90 million and $89 million of restricted cash
at December 31, 2023 and 2022.
|
Adjusted free cash flow
is defined by the Company as net cash from operating activities
less capital expenditures and certain other
items. A reconciliation of net cash from operating activities
to adjusted free cash flow for the three months and year ended
December
31, 2023 and 2022 follows.
|
|
Three Months Ended
December 31,
|
|
|
Year Ended
December 31,
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
Net cash provided by operating
activities
|
$
621
|
|
|
$
669
|
|
|
$
1,453
|
|
|
$
803
|
|
U.K. pension settlement
(2)
|
|
|
|
(8)
|
|
|
(1)
|
|
|
(77)
|
|
Interest included in
investing activities (3)
|
|
|
|
|
|
|
25
|
|
|
26
|
|
Capital
expenditures
|
(179)
|
|
|
(232)
|
|
|
(793)
|
|
|
(839)
|
|
Insurance receivable
(4)
|
|
|
|
(17)
|
|
|
(23)
|
|
|
23
|
|
Adjusted free cash flow
|
$
442
|
|
|
$
412
|
|
|
$
661
|
|
|
$
(64)
|
|
|
(2)
|
In September 2021, the
Company made a contribution of £196 million to its U.K. defined
pension plan in advance of a full settlement of the plan's
obligations in November 2021. The Company has been repaid
£103 million of the contribution as of December 31, 2023 and
expects to receive another £24 million in future years.
|
|
|
(3)
|
Interest benefit of
cross currency swaps included in investing activities.
|
|
|
(4)
|
Insurance proceeds
received in 2023 related to the December 2021 tornado at the
Bowling Green plant.
|
|
|
Consolidated
Supplemental Data (Unaudited)
(in
millions)
|
|
Segment Income –
Recast
|
|
|
|
|
Three Months Ended,
|
|
|
|
|
|
March 31,
2023
|
|
June 30,
2023
|
|
September 30,
2023
|
|
December 31,
2023
|
|
Year Ended
2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
Beverage
|
|
$
|
178
|
|
$
|
211
|
|
$
|
232
|
|
$
|
255
|
|
$
|
876
|
|
European Beverage
(1)
|
|
|
39
|
|
|
69
|
|
|
73
|
|
|
18
|
|
|
199
|
|
Asia Pacific
|
|
|
36
|
|
|
38
|
|
|
33
|
|
|
47
|
|
|
154
|
|
Transit
Packaging
|
|
|
78
|
|
|
89
|
|
|
89
|
|
|
75
|
|
|
331
|
|
Other
|
|
|
27
|
|
|
36
|
|
|
37
|
|
|
17
|
|
|
117
|
|
Corporate and other
unallocated items (1)
|
|
|
(38)
|
|
|
(29)
|
|
|
(34)
|
|
|
(30)
|
|
|
(131)
|
|
Total segment
income
|
|
$
|
320
|
|
$
|
414
|
|
$
|
430
|
|
$
|
382
|
|
$
|
1,546
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended,
|
|
|
|
|
|
|
March 31,
2022
|
|
June 30,
2022
|
|
September 30,
2022
|
|
December 31,
2022
|
|
Year Ended
2022
|
|
Americas
Beverage
|
|
$
|
164
|
|
$
|
216
|
|
$
|
185
|
|
$
|
177
|
|
$
|
742
|
|
European Beverage
(1)
|
|
|
48
|
|
|
51
|
|
|
17
|
|
|
7
|
|
|
123
|
|
Asia Pacific
|
|
|
53
|
|
|
55
|
|
|
35
|
|
|
29
|
|
|
172
|
|
Transit
Packaging
|
|
|
61
|
|
|
74
|
|
|
75
|
|
|
71
|
|
|
281
|
|
Other
|
|
|
94
|
|
|
62
|
|
|
50
|
|
|
34
|
|
|
240
|
|
Corporate and other
unallocated items (1)
|
|
|
(37)
|
|
|
(26)
|
|
|
(26)
|
|
|
(26)
|
|
|
(115)
|
|
Total segment
income
|
|
$
|
383
|
|
$
|
432
|
|
$
|
336
|
|
$
|
292
|
|
$
|
1,443
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
During the fourth
quarter, the Company recast its segment reporting to reclassify
European corporate costs that were previously included in Corporate
and other unallocated items into the European Beverage
segment. The change was effective December 31, 2023, and
segment results for prior periods have been recast to conform to
the new presentation.
|
Property, Plant and Equipment
The Company periodically reviews the useful lives
of property, plant and equipment based on the Company's experience
with the duration over which equipment and buildings of its
aluminum beverage can business can be utilized. The Company
recently engaged a third-party appraiser to assist in this review
and, upon completion, the Company expects the change in estimated
useful lives to result in a net reduction of depreciation expense
of approximately $12 million per
quarter for 2024, beginning with the quarter ending March 31, 2024, as compared to the amount of
depreciation expense that would have been recognized by utilizing
the prior depreciable lives.
Impact of Foreign
Currency Translation – Favorable/(Unfavorable)
(1)
|
|
|
|
|
Three Months Ended
December 31, 2023
|
|
|
Year Ended
December 31, 2023
|
|
|
Net Sales
|
|
Segment
Income
|
|
|
Net Sales
|
|
|
Segment
Income
|
|
|
Americas
Beverage
|
$
|
15
|
|
$
|
|
|
|
$
|
56
|
|
|
$
|
4
|
|
|
European
Beverage
|
15
|
|
1
|
|
|
24
|
|
|
3
|
|
|
Asia Pacific
|
1
|
|
|
|
|
(8)
|
|
|
|
|
|
Transit
Packaging
|
9
|
|
2
|
|
|
2
|
|
|
4
|
|
|
Other
|
2
|
|
(1)
|
|
|
3
|
|
|
(4)
|
|
|
|
$
|
42
|
|
$
|
2
|
|
|
$
|
77
|
|
|
$
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The impact of foreign
currency translation represents the difference between actual
current year U.S. dollar results and pro forma amounts assuming
constant foreign currency exchange rates for translation in both
periods. In order to compute the difference, the Company
compares actual U.S. dollar results to an amount calculated by
dividing the current U.S. dollar results by current year average
foreign exchange rates and then multiplying those amounts by the
applicable prior year average foreign exchange rates.
|
|
|
Reconciliation of
Adjusted EBITDA and Adjusted Net Leverage Ratio
|
|
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
Income from operations
|
|
$
|
1,269
|
|
$
|
1,336
|
|
Add:
|
|
|
|
|
|
Intangibles amortization
|
|
163
|
|
159
|
|
Restructuring and other
|
|
114
|
|
(52)
|
|
Segment
income
|
|
1,546
|
|
1,443
|
|
Depreciation
|
|
336
|
|
301
|
|
Adjusted EBITDA
|
|
$
|
1,882
|
|
$
|
1,744
|
|
|
|
|
|
|
|
Total debt
|
|
$
|
7,474
|
|
$
|
6,977
|
|
Less cash
|
|
1,310
|
|
550
|
|
Net debt
|
|
$
|
6,164
|
|
$
|
6,427
|
|
|
|
|
|
|
|
Adjusted net leverage ratio
|
|
3.3x
|
|
3.7x
|
|
View original
content:https://www.prnewswire.com/news-releases/crown-holdings-inc-reports-fourth-quarter-and-full-year-2023-results-302053716.html
SOURCE Crown Holdings, Inc.