TAMPA,
Fla., Aug. 30, 2024 /PRNewswire/ -- Crown
Holdings, Inc. (NYSE: CCK) (Crown) announced that it has
entered into an agreement to purchase a group annuity contract from
Massachusetts Mutual Life Insurance Company (MassMutual) to fully
guarantee benefits covered under the contract for nearly all of the
retirees and deferred vested participants in its primary US defined
benefit plans. The transaction provides a policy which covers
the benefits for approximately 12,000 participants.
"We are carefully moving portions of our pension obligations to
MassMutual, a highly rated and experienced insurance and retirement
benefits provider," said Kevin
Clothier, Senior Vice President and Chief Financial Officer.
"Upon completion of the transfer, Crown will eliminate
approximately $740 million in both US
pension plan assets and liabilities. When combined with
previous buy-outs in Canada and
the UK, the Company will have annuitized approximately $4 billion of pension liabilities since 2021.
This transaction further strengthens Crown's balance sheet,
significantly reduces future earnings and cash flow risk, and
maintains secure benefits for our pension plan participants."
MassMutual will make payments to participants starting
November 1, 2024. Benefits
payable to the retirees and other plan participants will not be
affected by the transaction.
The Company expects to contribute approximately $100 million to the plan and to record a one-time
non-cash charge of approximately $450
million ($340 million after
tax) in the third quarter of 2024 as a part of the plan
settlement. The Company reaffirms its previously provided
2024 full year adjusted free cash flow guidance of at least
$750 million.
About Crown Holdings, Inc.
Crown Holdings, Inc.,
through its subsidiaries, is a leading global supplier of rigid
packaging products to consumer marketing companies, as well as
transit and protective packaging products, equipment and services
to a broad range of end markets. World headquarters are
located in Tampa, Florida.
For more information, visit www.crowncork.com.
About MassMutual
MassMutual is a leading mutual life
insurance company that is run for the benefit of its members and
participating policyowners. Founded in 1851, the company has
been continually guided by one consistent purpose: we help people
secure their future and protect the ones they love.
MassMutual has financial strength ratings that are among the
highest of any company in any industry at A++ by AM Best, AA+ by
Fitch, Aa3 by Moody's, and AA+ by S&P1. With a
focus on delivering long-term value, MassMutual offers a wide range
of protection, accumulation, wealth management and retirement
products and services. For more information, visit
www.massmutual.com.
1 – as of 07/31/2024
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 whether the
full settlement and irrevocable transfer of the Company's risk
related to the plan obligations will occur in September 2024, or at all; the amount of the
charge the Company will incur in connection with the plan
settlement; the Company's ability to generate adjusted free cash
flow and the impact of the transaction and plan settlement on the
Company's future cash flow and earnings. Important factors
that could cause the statements made in this press release or the
actual results of operations or financial condition of Crown to
differ are discussed under the caption "Forward Looking Statements"
in Crown's Form 10-K Annual Report for the year ended December 31, 2023 and in subsequent filings made
prior to or after the date hereof. Crown does not intend to
review or revise any particular forward-looking statement in light
of future events.
Non-GAAP Measures
Adjusted free cash flow is not a
defined term under U.S. generally accepted accounting principles
(non-GAAP measures). Adjusted free cash flow is defined by
the Company as net cash from operating activities less capital
expenditures and certain other items. 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 adjusted free cash flow as a principal measure
of its liquidity. The Company considers this measure 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 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 dividends.
For more information, contact:
Kevin Clothier, Senior Vice President and Chief
Financial Officer, (215) 698-5281
Thomas T. Fischer, Vice President,
Investor Relations and Corporate Affairs, (215) 552-3720
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SOURCE Crown Holdings, Inc.