# Crown Holdings, Inc.: Form 10-Q for the period ended Jun 30, 2024

- Company: [Crown Holdings, Inc.](/companies/cck.md) (CIK 1219601)
- Form: 10-Q
- Filed: 2024-07-29
- Accepted by EDGAR: Jul 29, 2024, 16:43 ET
- Period: 2024-06-30
- Accession: 0001219601-24-000029
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1219601/000121960124000029/cck-20240630.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1219601/000121960124000029/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2024-04-01 to 2024-06-30 | $3.04bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 6 months, 2024-01-01 to 2024-06-30 | $5.82bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Selling, general and administrative | 3 months, 2024-04-01 to 2024-06-30 | $150.0m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 6 months, 2024-01-01 to 2024-06-30 | $304.0m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2024-04-01 to 2024-06-30 | $379.0m | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2024-01-01 to 2024-06-30 | $624.0m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2024-04-01 to 2024-06-30 | $112.0m | us-gaap:InterestExpenseNonoperating |
| Interest expense | 6 months, 2024-01-01 to 2024-06-30 | $225.0m | us-gaap:InterestExpenseNonoperating |
| Income tax | 3 months, 2024-04-01 to 2024-06-30 | $54.0m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 6 months, 2024-01-01 to 2024-06-30 | $94.0m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2024-04-01 to 2024-06-30 | $174.0m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2024-01-01 to 2024-06-30 | $241.0m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-04-01 to 2024-06-30 | $1.45 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2024-01-01 to 2024-06-30 | $2.01 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-04-01 to 2024-06-30 | $1.45 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2024-01-01 to 2024-06-30 | $2.02 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2024-04-01 to 2024-06-30 | 119,800,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2024-01-01 to 2024-06-30 | 119,800,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2024-01-01 to 2024-06-30 | $343.0m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 6 months, 2024-01-01 to 2024-06-30 | $178.0m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 6 months, 2024-01-01 to 2024-06-30 | $60.0m | us-gaap:PaymentsOfDividendsCommonStock |
| Share repurchases | 6 months, 2024-01-01 to 2024-06-30 | $7.0m | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2024-06-30 | $1.41bn | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2024-06-30 | $4.93bn | us-gaap:AssetsCurrent |
| Total assets | at 2024-06-30 | $14.86bn | us-gaap:Assets |
| Current liabilities | at 2024-06-30 | $4.69bn | us-gaap:LiabilitiesCurrent |
| Long-term debt | at 2024-06-30 | $5.95bn | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2024-06-30 | $1.37bn | us-gaap:LongTermDebtCurrent |
| Short-term borrowings | at 2024-06-30 | $94.0m | us-gaap:ShortTermBorrowings |
| Shareholders' equity | at 2024-06-30 | $2.51bn | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 34,268 characters.

(dollars in millions)

### Introduction

The following discussion presents management's analysis of the results of operations for the three and six months ended June 30, 2024 compared to 2023 and changes in financial condition and liquidity from December 31, 2023. This discussion should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, along with the consolidated financial statements and related notes included in and referred to within this report.

### Business Strategy and Trends

The Company's strategy is to maximize long-term shareholder value by pursuing profitable growth opportunities while returning cash to shareholders through dividends and share repurchases.

Global industry demand for beverage cans has been growing in recent years in North America, Brazil, Europe, and Southeast Asia. Growth has been driven by new product introductions in North America, customer and consumer focus on the sustainability benefits of aluminum, and population and GDP growth in many markets. To meet such demand, the Company made long-term investments of approximately $2,000 for new manufacturing facilities and additional production lines in existing facilities since 2021. In 2023, the impact of higher inflation and interest rates slowed growth in many markets. Based on current market conditions, the Company expects to have the ability to meet current and future demand growth with its current installed capital base and expects capital spending to be no more than $500 in 2024.

The Company's strategy is anchored by strong cash flow generation and a healthy balance sheet with a long-term net leverage ratio target of 2.5x adjusted EBITDA (a non-GAAP measure). The Company believes it has the flexibility and resources to fund growth, repay debt and return excess cash flow to shareholders in the future. On July 25, 2024, the Company's Board of Directors authorized the repurchase of an aggregate amount of $2,000 of the Company's common stock through the end of 2027. The new authorization supersedes the previous authorization announced in December 2021, which authorized the repurchase of an aggregate amount of $3,000 of Company common stock through the end of 2024.

The Company continues to actively elevate its commitment to sustainability, which is a core value of the Company. In 2020, the Company introduced **Twenty**by**30**, a robust program that outlines twenty measurable, science based, environmental, social and governance goals to be completed by 2030. In September 2021, the Company joined The Climate Pledge, a commitment to be net-zero carbon across business operations by 2040.

To date the war between Russia and Ukraine and the conflicts in the Middle East have not had a direct material impact on the Company's business, financial condition, or results of operations.

The Company continues to actively manage the challenges of supply chain disruptions, foreign exchange, interest rate fluctuations, and inflationary pressures, including increasing costs for raw materials, energy and transportation. The Company generally attempts to mitigate aluminum and steel price risk by matching its purchase obligations with its sales agreements. Additionally, the Company attempts to mitigate inflationary pressures on energy and raw material costs with contractual pass-through provisions that include annual selling price adjustments based on price indices. The Company also uses commodity forward contracts to manage its exposure to raw material costs. The ability to mitigate inflationary risks through these measures varies by region and the impact on the results of the Company’s segments is discussed, as applicable, in the heading "Results of Operations" below.

### Results of Operations

The key measure used by the Company in assessing performance is segment income, a non-GAAP measure defined by the Company as income from operations adjusted to exclude intangibles amortization charges, restructuring and other and the impact of fair value adjustments to inventory acquired in an acquisition.

### Crown Holdings, Inc.

The foreign currency translation impacts referred to in the discussion below were primarily due to changes in the Mexican peso in the Company's Americas Beverage segment and the Thai baht in the Company's Asia Pacific segment. The Company's Transit Packaging segment is a global business and the foreign currency translation impacts referred to in the discussion below are primarily related to the Indian rupee and the Mexican peso.

The Company calculates the impact of foreign currency translation by dividing current year U.S. dollar results by the current year average foreign exchange rates and then multiplying those amounts by the applicable prior year average exchange rates.

### Net Sales and Segment Income

|  | Three Months Ended June 30, 2024 | 2023 | Six Months Ended June 30, 2024 | 2023 |
| --- | ---: | ---: | ---: | ---: |
| Net sales | $3,040 | $3,109 | $5,824 | $6,083 |

#### Three months ended June 30, 2024 compared to 2023

Net sales decreased primarily due to $94 from the pass-through of lower aluminum, steel and other commodity costs, lower overall volumes in Asia Pacific, Transit Packaging and Other segments and unfavorable foreign currency translation of $13, partially offset by higher beverage can shipments in the Americas and European Beverage segments.

#### Six months ended June 30, 2024 compared to 2023

Net sales decreased primarily due to $224 from the pass-through of lower aluminum, steel and other commodity costs and lower overall volumes in Asia Pacific, Transit Packaging and Other segments, partially offset by higher beverage can shipments in the Americas and European Beverage segments.

### Americas Beverage

The Americas Beverage segment manufactures aluminum beverage cans and ends, steel crowns, glass bottles and aluminum closures and supplies a variety of customers from its operations in the U.S., Brazil, Canada, Colombia and Mexico.

The U.S. and Canadian beverage can markets have experienced growth in recent years due to the introduction of new beverage products in cans versus other packaging formats. In Brazil and Mexico, the Company's volumes have increased in recent years primarily due to market growth driven by increased per capita incomes and consumption, combined with an increased preference for cans over other forms of beverage packing.

To meet volume requirements in these markets, the Company added a new greenfield facility in Mesquite, Nevada in 2023.

Net sales and segment income in the Americas Beverage segment were as follows:

|  | Three Months Ended June 30, 2024 | 2023 | Six Months Ended June 30, 2024 | 2023 |
| --- | ---: | ---: | ---: | ---: |
| Net sales | $1,325 | $1,292 | $2,547 | $2,553 |
| Segment income | 243 | 211 | 432 | 389 |

#### Three months ended June 30, 2024 compared to 2023

Net sales increased primarily due to 10% higher shipments, partially offset by $29 pass-through of lower aluminum costs.

Segment income increased due to higher shipments and lower start-up costs compared to 2023.

### Crown Holdings, Inc.

#### Six months ended June 30, 2024 compared to 2023

Net sales decreased due to the pass-through of $87 in lower aluminum costs, partially offset by 7% higher shipments and favorable foreign currency translation of $6.

Segment income increased due to higher shipments and lower start-up costs compared to 2023.

### European Beverage

The Company's European Beverage segment manufactures aluminum beverage cans and ends and supplies a variety of customers from its operations throughout Europe, the Middle East and North Africa. In recent years, the European beverage can market has been growing due to a market shift to cans versus other packaging formats. To meet volume requirements, in 2023 the Company added additional line capacity in Agoncillo, Spain, a new greenfield facility in Peterborough, U.K. and acquired Helvetia Packaging AG, a beverage can and end manufacturing facility in Saarlouis, Germany.

During the fourth quarter of 2023, the Company recast its segment reporting to reclassify European corporate costs that were previously included in Corporate and other unallocated items in the European Beverage segment. Prior periods were recast to conform to the new presentation.

Net sales and segment income in the European Beverage segment were as follows:

|  | Three Months Ended June 30, 2024 | 2023 | Six Months Ended June 30, 2024 | 2023 |
| --- | ---: | ---: | ---: | ---: |
| Net sales | $560 | $532 | $1,042 | $1,011 |
| Segment income | 88 | 69 | 139 | 108 |

#### Three and six months ended June 30, 2024 compared to 2023

For the three and six months ended June 30, 2024 compared to 2023, net sales increased due to higher shipments of 7% and 6%, partially offset by $15 and $31 pass-through of lower aluminum costs.

Segment income improved due to higher shipments, improved cost performance, including savings realized as part of prior year restructuring actions and lower start-up costs.

### Asia Pacific

The Company's Asia Pacific segment consists of beverage can operations in Cambodia, China, Indonesia, Malaysia, Myanmar, Thailand and Vietnam and non-beverage can operations, primarily food cans and specialty packaging. Historically, growth in the beverage can market in Southeast Asia has been driven by increased per capita incomes and consumption, combined with an increased preference for cans over other forms of beverage packaging.

In 2023, volume softness was noted across each country in the Asia Pacific segment as the region continued to struggle with the effects of higher inflation and interest rates. In the fourth quarter of 2023, the Company announced the closure of its beverage can facilities in Ho Chi Minh City, Vietnam and Singapore with capacity relocated to the Company's Vung Tau, Vietnam facility.

In June 2022, the Company's Yangon, Myanmar beverage can plant was temporarily idled due to currency restrictions, which resulted in the inability to source U.S. dollars required to procure U.S. dollar raw materials. The Company began production on a limited basis in 2023 and had net sales of $4 for the six months ended June 30, 2024. Property, plant and equipment in Myanmar as of June 30, 2024 was $50, including $24 of land and buildings and $26 of machinery and equipment. The Company will continue to monitor the economic conditions and the impact to its business in Myanmar, including any alternative uses for its machinery and equipment.

Net sales and segment income in the Asia Pacific segment were as follows:

### Crown Holdings, Inc.

|  | Three Months Ended June 30, 2024 | 2023 | Six Months Ended June 30, 2024 | 2023 |
| --- | ---: | ---: | ---: | ---: |
| Net sales | $290 | $332 | $569 | $670 |
| Segment income | 55 | 38 | 97 | 74 |

#### Three months ended June 30, 2024 compared to 2023

Net sales decreased primarily due to 5% lower shipments, the pass-through of $17 lower aluminum costs and unfavorable foreign currency of $6.

Segment income increased primarily due to improved matching of aluminum pass-through provisions as a result of lower inventory in 2024, favorable customer mix and cost savings realized as part of prior year restructuring actions.

#### Six months ended June 30, 2024 compared to 2023

Net sales decreased primarily due to 6% lower shipments, the pass-through of $36 lower aluminum costs and unfavorable foreign currency of $12.

Segment income increased primarily due to improved matching of aluminum pass-through provisions as a result of lower inventory in 2024, favorable customer mix and cost savings realized as part of prior year restructuring actions.

### Transit Packaging

The Company's Transit Packaging segment includes the Company's worldwide automation and equipment technologies, protective packaging solutions and steel and plastic consumables Automation and equipment technologies include manual, semi-automatic and automatic equipment and tools, which are primarily used in end-of-line operations to apply and remove consumables such as strap and film. Protective solutions include standard and purpose designed products, such as airbags, edge protectors, and honeycomb products, among others, that help prevent movement of, and/or damage to, a wide range of industrial and consumer goods during transport. Steel and plastic consumables include steel strap, plastic strap, industrial film and other related products that are used across a wide range of industries.

Net sales and segment income in the Transit Packaging segment were as follows:

|  | Three Months Ended June 30, 2024 | 2023 | Six Months Ended June 30, 2024 | 2023 |
| --- | ---: | ---: | ---: | ---: |
| Net sales | $550 | $597 | $1,070 | $1,161 |
| Segment income | 73 | 89 | 141 | 167 |

#### Three months ended June 30, 2024 compared to 2023

Net sales decreased primarily due to the pass-through of $20 lower material costs, $21 lower volumes, mainly in protective packaging solutions and steel and plastic consumables, and unfavorable foreign currency translation of $5.

Segment income decreased primarily due to $15 lower volumes, mainly in protective packaging solutions and steel and plastic consumables, and lower material margins, partially offset by improved cost performance.

#### Six months ended June 30, 2024 compared to 2023

Net sales decreased primarily due to the pass-through of $44 lower material costs, $39 lower volumes, mainly in protective packaging solutions and steel and plastic consumables, and unfavorable foreign currency translation of $4.

Segment income decreased primarily due to $23 lower volumes, mainly in protective packaging solutions and steel and plastic consumables, and lower material margins, partially offset by improved cost performance.

### Crown Holdings, Inc.

### Other

Other 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 U.K. The Company added a pet food can line to its Dubuque, Iowa plant in the first half of 2024.

In 2023, the Company right-sized the beverage can equipment operations in the U.K. to reflect the expected significant reduction in orders from global beverage can manufacturers. Additionally, in the fourth quarter of 2023, the Company announced the closure of its Decatur, IL aerosol can plant in response to lower aerosol can demand.

Additionally, during the second quarter of 2024, the Company closed its food can plant in La Villa, Mexico and entered into an agreement to sell equipment for $30 to be paid in three annual installments. The first $10 installment was received during the quarter. The Company expects to recognize a gain of approximately $20 in the third quarter of 2024, when control of the equipment transfers.

Net sales and segment income in Other were as follows:

|  | Three Months Ended June 30, 2024 | 2023 | Six Months Ended June 30, 2024 | 2023 |
| --- | ---: | ---: | ---: | ---: |
| Net sales | $315 | $356 | $596 | $688 |
| Segment income | 14 | 36 | 22 | 63 |

#### Three months ended June 30, 2024 compared to 2023

Net sales and segment income decreased primarily due to lower volumes in the food can, aerosol can and equipment businesses. Net sales were also negatively impacted by $12 due to the pass-through of lower steel costs and segment income was negatively impacted by the timing of the pass-through of steel costs.

#### Six months ended June 30, 2024 compared to 2023

Net sales and segment income decreased primarily due to lower volumes in the food can, aerosol can and equipment businesses. Net sales were also negatively impacted by $23 due to the pass-through of lower steel costs.

### Corporate and unallocated

Corporate and unallocated items include corporate and administrative costs, research and development, and unallocated items such as stock-based compensation and insurance costs.

|  | Three Months Ended June 30, 2024 | 2023 | Six Months Ended June 30, 2024 | 2023 |
| --- | ---: | ---: | ---: | ---: |
| Corporate and unallocated expense | $(36) | $(29) | $(86) | $(67) |

Corporate and unallocated expenses increased for the three and six months ended June 30, 2024 compared to 2023, primarily due to higher incentive compensation, including stock compensation.

### Depreciation and Amortization

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 engaged a third-party appraiser to assist in this review and, as a result, increased the estimated useful lives of buildings up to 50 years and machinery and equipment up to 23 years effective January 1, 2024. The change in accounting estimate will be applied on a prospective basis. The change in useful lives resulted in a net reduction in depreciation expense of $16 and $32 for the three and six months ended June 30, 2024, respectively, as compared to the amount of depreciation expense that would have been recorded by utilizing the prior depreciable lives.

### Crown Holdings, Inc.

### Restructuring and other, net

For the three and six months ended June 30, 2024, restructuring and other net charges of $17 and $40, respectively, primarily included business reorganization activities in the Company's European Beverage and Other segments. The Company continues to review its costs structure and may record additional restructuring charges in the future.

### Taxes on income

The Company's effective income tax rates were as follows:

|  | Three Months Ended June 30, 2024 | 2023 | Six Months Ended June 30, 2024 | 2023 |
| --- | ---: | ---: | ---: | ---: |
| Income before taxes and equity in net earnings of affiliates | $265 | $239 | $399 | $400 |
| Provision for income taxes | 54 | 59 | 94 | 101 |
| Effective income tax rate | 20.4% | 24.7% | 23.6% | 25.3% |

The decrease in the effective tax rate for the three and six months ended June 30, 2024 compared to 2023, was primarily due a benefit of $16 taken in 2024 related to the release of a valuation allowance resulting from improved profitability in a European subsidiary, offset by an increase in earnings in higher-tax jurisdictions.

Effective January 1, 2024, various jurisdictions in which the Company operates have enacted the Pillar II directive which establishes a global minimum corporate tax rate of 15% initiated by the Organisation for Economic Co-operation and Development. The Company does not expect Pillar II to have a material impact on its financial results, including its annual estimated effective tax rate or liquidity for 2024.

### Net income attributable to noncontrolling interest

For the three and six months ended June 30, 2024 compared to 2023, net income from noncontrolling interests increased from $30 to $33 and $50 to $59 primarily due to higher earnings in the Company's beverage can operations in Brazil.

### Liquidity and Capital Resources

### Operating Activities

Cash provided by operating activities increased from $293 for the six months ended June 30, 2023 to $343 for the six months ended June 30, 2024, primarily due to working capital improvements, partially offset by lower distributions from equity method investments.

Days sales outstanding for trade receivables, excluding the impact of unbilled receivables, was 34 days as of June 30, 2023 and June 30, 2024.

Inventory turnover decreased from 70 days at June 30, 2023 to 60 days at June 30, 2024, primarily due to efforts to reduce inventory levels across most businesses.

Days outstanding for trade payables increased from 81 days at June 30, 2023 to 87 days at June 30, 2024 primarily due to lower purchases in 2023 as a result of prior year inventory builds.

### Investing Activities

Cash used for investing activities decreased from $378 for the six months ended June 30, 2023 to $143 for the six months ended June 30, 2024, primarily due to lower capital expenditures. Additionally, the six months ended June 30, 2023 included a distribution from an equity method investment of $56.

The Company currently expects capital expenditures in 2024 to be no more than $500.

### Crown Holdings, Inc.

### Financing Activities

Financing activities provided cash of $101 for the six months ended June 30, 2023 and used cash of $70 for the six months ended June 30, 2024. In May 2023, the Company issued €500 principal amount of 5.0% senior unsecured notes due 2028 and used a portion of the proceeds to pay down the senior secured credit facilities.

### Liquidity

As of June 30, 2024, $836 of the Company's $1,414 of cash and cash equivalents was located outside the U.S. The Company is not currently aware of any legal restrictions under foreign law that materially impact its access to cash held outside the U.S. The Company funds its cash needs in the U.S. through a combination of cash flows from operations, dividends from certain foreign subsidiaries, borrowings under its revolving credit facility and the acceleration of cash receipts under its receivable securitization and factoring facilities. Of the cash and cash equivalents located outside the U.S., $505 was held by subsidiaries for which earnings are considered indefinitely reinvested.

The Company's revolving credit agreements provide capacity of $1,650 and as of June 30, 2024, the Company had available capacity of $1,613. The Company could have borrowed this amount at June 30, 2024 and still have been in compliance with its leverage ratio covenants.

The Company's debt agreements contain covenants that limit the ability of the Company and its subsidiaries to, among other things, incur additional debt, pay dividends or repurchase capital stock, make certain other restricted payments, create liens and engage in sale and leaseback transactions. These restrictions are subject to a number of exceptions, however, which allow the Company to incur additional debt, create liens or make otherwise restricted payments provided that the Company is in compliance with applicable financial and other covenants and meets certain liquidity requirements.

The Company’s revolving credit facilities and term loan facilities also contain a total leverage ratio covenant. The leverage ratio is calculated as total net debt divided by Consolidated EBITDA (as defined in the credit agreement). Total net debt is defined in the credit agreement as total debt less cash and cash equivalents. Consolidated EBITDA is calculated as the sum of, among other things, net income attributable to Crown Holdings, net income attributable to certain of the Company's subsidiaries, income taxes, interest expense, depreciation and amortization, and certain non-cash charges. The Company’s total net leverage ratio of 3.1 to 1.0 at June 30, 2024 was in compliance with the covenant requiring a ratio no greater than 4.5 to 1.0. The ratio is calculated at the end of each quarter using debt and cash balances as of the end of the quarter and Consolidated EBITDA for the most recent twelve months. Failure to meet the financial covenant could result in the acceleration of any outstanding amounts due under the revolving credit facilities and term loan facilities.

In order to reduce leverage and future interest payments, the Company may from time to time repurchase outstanding notes and debentures with cash or seek to refinance its existing credit facilities and other indebtedness. The Company will evaluate any such transactions in light of any required premiums and then existing market conditions and may determine not to pursue such transactions.

The Company’s current sources of liquidity also include a securitization facility with a program limit up to a maximum of $800 that expires in July 2025 and securitization facilities with program limits of $230 and $160 that expire in November 2025.

The Company utilizes its cash flows from operations, borrowings under its revolving credit facilities and the acceleration of cash receipts under its receivables securitization and factoring programs to primarily fund its operations, capital expenditures and financing obligations.

Long-term debt payments due in the next twelve months include the Company's €600 ($643) 2.625% senior notes in September 2024 and its €600 ($643) 3.375% senior notes in May 2025. The Company expects to have sufficient liquidity to refinance the senior notes or repay them at maturity.

In July 2024, the Company purchased an annuity insurance contract using plan assets to settle approximately $125 of its Canadian defined benefit pension plan obligation. The plan remains in an overfunded position after the transaction and the Company expects to record a settlement charge of approximately $60 in the third quarter of 2024 related to the partial settlement of the Canadian pension plan. Based on market conditions and interest rates, the Company may continue to consider various opportunistic strategies to manage its remaining pension obligations, including its U.S.

### Crown Holdings, Inc.

pension obligation, through lump sum payments and the purchase of annuity insurance contracts which may require additional pension contributions and the use of plan assets. These strategies could be significant and result in the Company making cash contributions to the plan or recording pension settlement charges to accelerate the timing of recognition of actuarial losses recorded in accumulated other comprehensive income. As of June 30, 2024, the Company had $661 of net losses related to pension benefit obligations recorded in accumulated other comprehensive income.

In June 2024, KPS Capital Partners announced the sale of Eviosys. The Company's approximately 20% stake in Eviosys is included as part of the agreement. The closing of the transaction is anticipated by the end of 2024 and the Company expects proceeds of approximately $300, net of tax. The carrying value of the Company's investment in Eviosys was $53 as of June 30, 2024.

### Capital Resources

As of June 30, 2024, the Company had approximately $111 of capital commitments primarily related to Americas Beverage and European Beverage. The Company expects to fund these commitments primarily through cash flows from operations.

### Contractual Obligations

There were no material changes to the Company's contractual obligations provided within Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations” of the Company's Annual Report on Form 10-K for the year ended December 31, 2023, which information is incorporated herein by reference.

### Supplemental Guarantor Financial Information

The Company and certain of its 100% directly or indirectly owned subsidiaries provide guarantees of senior notes and debentures issued by other 100% directly or indirectly owned subsidiaries. These senior notes and debentures are fully and unconditionally guaranteed by the Company and substantially all of its subsidiaries in the United States, except in the case of the Company’s outstanding senior notes issued by Crown Cork & Seal Company, Inc., which are fully and unconditionally guaranteed by Crown Holdings, Inc. (Parent). No other subsidiary guarantees the debt and the guarantees are made on a joint and several basis.

The following tables present summarized financial information related to the senior notes issued by the Company’s subsidiary debt issuers and guarantors on a combined basis for each issuer and its guarantors (together, an “obligor group”) after elimination of (i) intercompany transactions and balances among the Parent and the guarantors and (ii) equity in earnings from and investments in any subsidiary that is a non-guarantor. Crown Cork Obligor group consists of Crown Cork & Seal Company, Inc. and the Parent. Crown Americas Obligor group consists of Crown Americas LLC, Crown Americas Capital Corp. V, Crown Americas Capital Corp. VI, the Parent, and substantially all of the Company’s subsidiaries in the United States.

#### Crown Cork Obligor Group

|  | Six Months Ended June 30, 2024 |
| --- | ---: |
| Net sales | $— |
| Gross Profit | — |
| Income from operations | (1) |
| Net income1 | (43) |
| Net income attributable to Crown Holdings1 | (43) |

(1) Includes $28 of expense related to intercompany interest with non-guarantor subsidiaries

### Crown Holdings, Inc.

|  | June 30, 2024 | December 31, 2023 |
| --- | ---: | ---: |
| Current assets | $11 | $22 |
| Non-current assets | 32 | 29 |
| Current liabilities | 57 | 48 |
| Non-current liabilities1 | 6,303 | 6,265 |

(1) Includes payables of $5,548 and $5,514 due to non-guarantor subsidiaries as of June 30, 2024 and December 31, 2023

#### Crown Americas Obligor Group

|  | Six Months Ended June 30, 2024 |
| --- | ---: |
| Net sales1 | $2,394 |
| Gross profit2 | 366 |
| Income from operations2 | 119 |
| Net income3 | (18) |
| Net income attributable to Crown Holdings3 | (18) |

(1) Includes $219 of sales to non-guarantor subsidiaries

(2) Includes $22 of gross profit related to sales to non-guarantor subsidiaries

(3) Includes $12 of income related to intercompany interest and technology royalties with non-guarantor subsidiaries

|  | June 30, 2024 | December 31, 2023 |
| --- | ---: | ---: |
| Current assets1 | $1,438 | $1,423 |
| Non-current assets2 | 3,820 | 3,850 |
| Current liabilities3 | 1,161 | 1,166 |
| Non-current liabilities4 | 6,505 | 6,553 |

(1) Includes receivables of $38 and $30 due from non-guarantor subsidiaries as of March 31, 2024 and December 31, 2023

(2) Includes receivables of $201 and $189 due from non-guarantor subsidiaries as of March 31, 2024 and December 31, 2023

(3) Includes payables of $25 and $35 due to non-guarantor subsidiaries as of March 31, 2024 and December 31, 2023

(4) Includes payables of $2,090 and $2,134 due to non-guarantor subsidiaries as of March 31, 2024 and December 31, 2023

### Commitments and Contingent Liabilities

Information regarding the Company's commitments and contingent liabilities appears in Part I within Item 1 of this report under Note J, entitled “Commitments and Contingent Liabilities,” to the consolidated financial statements, and in Part II within Item 1A of this report which information is incorporated herein by reference.

### Critical Accounting Policies

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. which require that management make numerous estimates and assumptions.

Actual results could differ from these estimates and assumptions, impacting the reported results of operations and financial condition of the Company. Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations” and Note A to the consolidated financial statements contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2023 describe the significant accounting estimates and policies used in the preparation of the consolidated financial statements. Updates to the Company's accounting policies related to new accounting pronouncements, as applicable, are included in the notes to the consolidated financial statements included in this Quarterly Report on Form 10-Q.

### Forward Looking Statements

Statements included herein, including, but not limited to, those in “Management's Discussion and Analysis of Financial Condition and Results of Operations” and in the discussions of asbestos in Note I and commitments and contingencies in Note J to the consolidated financial statements included in this Quarterly Report on Form 10-Q, and also in Part I, Item 1, “Business” and Item 3, “Legal Proceedings” and in Part II, Item 7, “Management's Discussion

### Crown Holdings, Inc.

and Analysis of Financial Condition and Results of Operations,” within the Company's Annual Report on Form 10-K for the year ended December 31, 2023, which are not historical facts (including any statements concerning the direct or indirect impact of the COVID-19 pandemic, conflicts in the Middle East and the Russia-Ukraine war, objectives of management for share repurchases, dividends, future operations or economic performance, or assumptions related thereto, including the potential for higher interest rates and energy prices), are “forward-looking statements” within the meaning of the federal securities laws. In addition, the Company and its representatives may, from time to time, make oral or written statements which are also “forward-looking statements.”

These forward-looking statements are made based upon management's expectations and beliefs concerning future events impacting the Company and, therefore, involve a number of risks and uncertainties. Management cautions that forward-looking statements are not guarantees and that actual results could differ materially from those expressed or implied in the forward-looking statements.

While the Company periodically reassesses material trends and uncertainties affecting the Company's results of operations and financial condition in connection with the preparation of “Management's Discussion and Analysis of Financial Condition and Results of Operations” and certain other sections contained in the Company's quarterly, annual or other reports filed with the U.S. Securities and Exchange Commission (“SEC”), the Company does not intend to review or revise any particular forward-looking statement in light of future events.

A discussion of important factors that could cause the actual results of operations or financial condition of the Company to differ from expectations has been set forth in the Company's Annual Report on Form 10-K for the year ended December 31, 2023 within Part II, Item 7: “Management's Discussion and Analysis of Financial Condition and Results of Operations” under the caption “Forward Looking Statements” and is incorporated herein by reference. Some of the factors are also discussed elsewhere in this Form 10-Q (including under Item 1A of Part II below) and in prior Company filings with the SEC. In addition, other factors have been or may be discussed from time to time in the Company's SEC filings.

## Market risk

As filed, 1,482 characters.

In the normal course of business the Company is subject to risk from adverse fluctuations in foreign exchange and interest rates and commodity prices. The Company manages these risks through a program that includes the use of derivative financial instruments, primarily swaps and forwards. Counterparties to these contracts are major financial institutions. The Company is exposed to credit loss in the event of nonperformance by the counterparties. These instruments are not used for trading or speculative purposes. The extent to which the Company uses such instruments is dependent upon its access to these contracts in the financial markets and its success in using other methods, such as netting exposures in the same currencies to mitigate foreign exchange risk and using sales arrangements that permit the pass-through of commodity prices and foreign exchange rate risks to customers. The Company's objective in managing its exposure to market risk is to limit the impact on earnings and cash flow. For further discussion of the Company's use of derivative instruments and their fair values at June 30, 2024, see Note K to the consolidated financial statements included in this Quarterly Report on Form 10-Q.

As of June 30, 2024, the Company had $2.2 billion principal floating interest rate debt and $1.2 billion of securitization and factoring. A change of 0.25% in these floating interest rates would change annual interest expense by approximately $9 million before tax.

## Controls and procedures

As filed, 1,324 characters.

As of the end of the period covered by this Quarterly Report on Form 10-Q, management, including the Company's Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of its disclosure controls and procedures. Based upon that evaluation and as of the end of the quarter for which this report is made, the Company's Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective. Disclosure controls and procedures ensure that information to be disclosed in reports that the Company files and submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and terms of the SEC, and ensure that information required to be disclosed in the reports that the Company files or submits under the Exchange Act is accumulated and communicated to the Company's management, including its Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

There has been no change in internal controls over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

## Risk factors

As filed, 479 characters.

The information set forth in this report should be read in conjunction with the risk factors discussed in Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2023. Such risks are not the only risks facing the Company. Additional risks and uncertainties not currently known to the Company or that the Company currently deems to be immaterial may also materially adversely affect the Company's business, financial condition and/or operating results.

Filed Jul 29, 2024.
Source: SEC EDGAR, the filing index for accession 0001219601-24-000029. Last ingested by Listed: Nov 3, 2026, 12:53 ET. No prices; not investment advice.