Crown Holdings, Inc. Reports Second Quarter 2019 Results

Published

YARDLEY, Pa., July 17, 2019 /PRNewswire/ -- Crown Holdings, Inc. (NYSE: CCK) today announced its financial results for the second quarter ended June 30, 2019.

Second Quarter Results

  • Earnings per share $1.02 versus $0.99 in 2018
  • Adjusted earnings per share $1.46 versus $1.55 in 2018
  • Announced new North America beverage can capacity additions

Net sales in the second quarter were $3,035 million compared to $3,046 million in the second quarter of 2018 reflecting $80 million of unfavorable currency translation offset by increased beverage can volumes.

Income from operations was $383 million in the quarter compared to $292 million in the second quarter of 2018.  Segment income was $386 million in the second quarter compared to $389 million in the prior year second quarter.

Commenting on the quarter, Timothy J. Donahue, President and Chief Executive Officer, stated, "Our overall performance during the quarter was generally in line with expectations.  Strong results throughout our global beverage can operations offset a disappointing result in our European food can business.  Beverage can volume growth was fueled by notable gains in Brazil, Europe and Southeast Asia, as consumers in both emerging and developed markets continue to show a preference for cans over other packaging options.  Recently installed beverage can capacity additions, including a third line at the Company's existing plant in Phnom Penh, Cambodia, a new one line high-speed plant in Parma, Italy, and a new two line high-speed plant in Valencia, Spain, have helped us meet the continuing expansion in demand.  In November 2019, we plan to commence operations at a new beverage can facility in Rio Verde, central Brazil.

"To meet volume requirements in our North American beverage can business, we have begun the construction of a third high-speed line at our Nichols, New York facility which will begin production during the second quarter of 2020.  Also to support demand growth and targeted for a first quarter 2020 start-up, we will convert an existing two-piece steel food can production line at our Weston, Ontario plant to produce aluminum beverage cans.  Both the Nichols and Weston lines will be capable of producing multiple sizes.  The underlying demand supporting these projects underscores that beverage cans are the world's most sustainable and recycled beverage packaging and are increasingly being viewed as the most responsible format."

Interest expense was $97 million in the second quarter of 2019 compared to $103 million in 2018 primarily due to lower debt levels in the current year. 

Net income attributable to Crown Holdings in the second quarter was $137 million compared to $132 million in the second quarter of 2018.  Reported diluted earnings per share were $1.02 in the second quarter of 2019 compared to $0.99 in 2018.  Adjusted diluted earnings per share were $1.46 compared to $1.55 in 2018. 

A reconciliation from net income and diluted earnings per share to adjusted net income and adjusted diluted earnings per share is provided below.

Six Month Results

Net sales for the first six months of 2019 increased to $5,790 million compared to $5,243 million in the first six months of 2018 primarily due to the impact of the Signode acquisition and increased beverage can volumes, partially offset by $180 million of unfavorable currency translation.

Income from operations was $645 million in the first half of 2019 compared to $513 million in the first half of 2018.  Segment income in the first half of 2019 increased to $701 million over the $634 million in the prior year period reflecting the Signode acquisition and increased beverage can volumes.

Interest expense was $195 million for the first six months of 2019 compared to $177 million in 2018 primarily due to higher average outstanding debt from borrowings incurred to finance the Signode acquisition. 

Net income attributable to Crown Holdings in the first six months of 2019 was $240 million compared to $222 million in the first six months of 2018.  Reported diluted earnings per share were $1.78 compared to $1.66 in 2018.  Adjusted diluted earnings per share increased to $2.51 over the $2.49 in 2018. 

Outlook

The Company currently expects third quarter and full year 2019 adjusted diluted earnings to be in the ranges of $1.50 to $1.60 and $5.05 to $5.20 per share, respectively.  The revision compared to the previous full year earnings estimate of $5.20-$5.40 per share is primarily due to lower projected full year results than expected in European Food and Transit Packaging.  While the second half of 2019 is expected to be somewhat better than the same period in 2018, European Food will not fully recover shortfalls experienced in the first half.  In Transit Packaging, the Company is now expecting that second half performance will trail the prior year based on recent market sentiment. 

The adjusted effective income tax rate for the full year of 2019 is expected to be between 25% and 26%, although it may vary from quarter to quarter.

Adjusted free cash flow, as defined below, is currently expected to be approximately $725 million to $750 million for 2019.  The revision in cash flow guidance compared to the previous estimate of approximately $775 million is primarily due to the impact of the earnings revision described above, and an increase in capital spending to support expected North American beverage can volume growth in 2020 and beyond.  The Company currently expects full year capital spending of approximately $440 million.

Non-GAAP Measures

Segment income, adjusted free cash flow, net leverage ratio, adjusted net income, the adjusted effective tax rate, adjusted diluted earnings per share 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, net income, diluted earnings per share, effective tax rates, cash flow or leverage ratio 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 and net leverage ratio as the principal measure 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 net 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.  Reconciliations of estimated adjusted diluted earnings per share for the third quarter and full year of 2019 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, acquisition related costs including fair value adjustments to inventory, 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. The Company believes that adjusted free cash flow and 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 possible future dividends.  Segment income, adjusted free cash flow, net leverage ratio, the adjusted effective tax rate, adjusted net income, adjusted diluted earnings per share and adjusted EBITDA 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, net leverage ratio, the adjusted effective tax rate, adjusted net income, adjusted diluted earnings per share and adjusted EBITDA can be found within this release.

Conference Call

The Company will hold a conference call tomorrow, July 18, 2019 at 9:00 a.m. (EDT) 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 July 25.  The telephone numbers for the replay are (402) 220-0241 or toll free (800) 638-8815.

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 and market trends in 2019, including consumer preference for beverage cans and increasing global beverage can demand and demand in Brazil, Europe, North America and Southeast Asia; the Company's ability to successfully complete and begin production at capacity expansion projects within expected timelines and budgets in Brazil, the U.S. and Canada and the Company's ability to generate expected earnings and cash flow in 2019 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, 2018 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 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 Yardley, Pennsylvania.

For more information, contact:Thomas A. Kelly, Senior Vice President and Chief Financial Officer, (215) 698-5341Thomas 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 June 30, Six Months Ended June 30,
2019 2018 2019 2018
Net sales $3,035 $3,046 $5,790 $5,243
Cost of products sold 2,417 2,466 4,627 4,274
Depreciation and amortization 123 113 245 178
Selling and administrative expense 157 159 314 249
Restructuring and other (45) 16 (41) 29
Income from operations (1) 383 292 645 513
Pension settlements and curtailments 31 17
Other pension and postretirement (2) (17) (6) (34)
Foreign exchange 1 10 2 28
Earnings before interest and taxes 353 299 632 519
Interest expense 97 103 195 177
Interest income (4) (5) (7) (11)
Loss from early extinguishment of debt 6
Income before income taxes 260 201 438 353
Provision for income taxes 88 55 136 94
Equity earnings 2 1 3 1
Net income 174 147 305 260
Net income attributable to noncontrolling interests (37) (15) (65) (38)
Net income attributable to Crown Holdings $137 $132 $240 $222
Earnings per share attributable to Crown Holdings      common shareholders:
     Basic    $1.02 $0.99 $1.79 $1.66
     Diluted $1.02 $0.99 $1.78 $1.66
Weighted average common shares outstanding:
      Basic 133,865,669 133,612,348 133,827,567 133,546,223
      Diluted 134,777,236 133,844,185 134,636,935 133,814,394
Actual common shares outstanding 135,434,877 135,174,989 135,434,877 135,174,989
(1)  A reconciliation from income from operations to segment income follows.

 

Consolidated Statements of Operations (Unaudited) Consolidated Supplemental Financial Data (Unaudited)
(in millions, except share and per share data) (in millions)
Three Months Ended June 30, Six Months Ended June 30,
2019 2018 2019 2018 Reconciliation from Income from Operations to Segment Income
Net sales $3,035 $3,046 $5,790 $5,243 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, provisions for asbestos and restructuring and other, and the impact of fair value adjustments to inventory acquired in an acquisition.
Cost of products sold 2,417 2,466 4,627 4,274
Depreciation and amortization 123 113 245 178 Three Months Ended June 30, Six Months Ended June 30,
Selling and administrative expense 157 159 314 249 2019 2018 2019 2018
Restructuring and other (45) 16 (41) 29 Income from operations                               $ 383 $ 292 $ 645 $ 513
Income from operations (1) 383 292 645 513 Intangibles amortization 48 41 97 52
Pension settlements and curtailments 31 17 Fair value adjustment to inventory (1) 40 40
Other pension and postretirement (2) (17) (6) (34) Provision for restructuring and other (45) 16 (41) 29
Foreign exchange 1 10 2 28 Segment income $ 386 $ 389 $ 701 $ 634
Earnings before interest and taxes 353 299 632 519
Interest expense 97 103 195 177 (1) Included in cost of products sold
Interest income (4) (5) (7) (11)
Loss from early extinguishment of debt 6
Income before income taxes 260 201 438 353
Provision for income taxes 88 55 136 94
Equity earnings 2 1 3 1
Net income 174 147 305 260
Net income attributable to noncontrolling interests (37) (15) (65) (38)
Net income attributable to Crown Holdings $137 $132 $240 $222
Earnings per share attributable to Crown Holdings      common shareholders:
     Basic    $1.02 $0.99 $1.79 $1.66
     Diluted $1.02 $0.99 $1.78 $1.66
Weighted average common shares outstanding:
      Basic 133,865,669 133,612,348 133,827,567 133,546,223
      Diluted 134,777,236 133,844,185 134,636,935 133,814,394
Actual common shares outstanding 135,434,877 135,174,989 135,434,877 135,174,989
(1)  A reconciliation from income from operations to segment income follows.

Consolidated Statements of Operations (Unaudited) Consolidated Supplemental Financial Data (Unaudited)
(in millions, except share and per share data) (in millions) Segment Information
Three Months Ended June 30, Six Months Ended June 30, Net Sales Three Months Ended June 30, Six Months Ended June 30,
2019 2018 2019 2018 Reconciliation from Income from Operations to Segment Income 2019 2018 2019 2018
Net sales $3,035 $3,046 $5,790 $5,243 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, provisions for asbestos and restructuring and other, and the impact of fair value adjustments to inventory acquired in an acquisition. Americas Beverage $ 890 $ 848 $ 1,678 $ 1,606
Cost of products sold 2,417 2,466 4,627 4,274 European Beverage 410 405 749 776
Depreciation and amortization 123 113 245 178 Three Months Ended June 30, Six Months Ended June 30, European Food 483 514 906 942
Selling and administrative expense 157 159 314 249 2019 2018 2019 2018 Asia Pacific 319 332 640 669
Restructuring and other (45) 16 (41) 29 Income from operations                               $ 383 $ 292 $ 645 $ 513 Transit Packaging 592 620 1,161 620
Income from operations (1) 383 292 645 513 Intangibles amortization 48 41 97 52      Total reportable segments 2,694 2,719 5,134 4,613
Pension settlements and curtailments 31 17 Fair value adjustment to inventory (1) 40 40 Non-reportable segments (2) 341 327 656 630
Other pension and postretirement (2) (17) (6) (34) Provision for restructuring and other (45) 16 (41) 29        Total net sales $ 3,035 $ 3,046 $ 5,790 $ 5,243
Foreign exchange 1 10 2 28 Segment income $ 386 $ 389 $ 701 $ 634
Earnings before interest and taxes 353 299 632 519
Interest expense 97 103 195 177 (1) Included in cost of products sold Segment Income 
Interest income (4) (5) (7) (11)
Loss from early extinguishment of debt 6 Americas Beverage $ 139 $ 113 $ 252 $ 211
Income before income taxes 260 201 438 353 European Beverage 60 59 99 114
Provision for income taxes 88 55 136 94 European Food 62 85 110 141
Equity earnings 2 1 3 1 Asia Pacific 51 47 96 91
Net income 174 147 305 260 Transit Packaging 80 94 153 94
Net income attributable to noncontrolling interests (37) (15) (65) (38)      Total reportable segments 392 398 710 651
Net income attributable to Crown Holdings $137 $132 $240 $222 Non-reportable segments (2) 33 31 69 62
Corporate and other unallocated items (39) (40) (78) (79)
Earnings per share attributable to Crown Holdings      common shareholders:        Total segment income $ 386 $ 389 $ 701 $ 634
     Basic    $1.02 $0.99 $1.79 $1.66
     Diluted $1.02 $0.99 $1.78 $1.66 (2) Includes the Company's food can and closures businesses in North America, aerosol can businesses in North America and Europe, promotional packaging business in Europe, and tooling and equipment operations in the U.S. and United Kingdom.
Weighted average common shares outstanding:
      Basic 133,865,669 133,612,348 133,827,567 133,546,223
      Diluted 134,777,236 133,844,185 134,636,935 133,814,394
Actual common shares outstanding 135,434,877 135,174,989 135,434,877 135,174,989
(1)  A reconciliation from income from operations to segment income follows.

 

Consolidated Statements of Operations (Unaudited) Consolidated Supplemental Financial Data (Unaudited) Consolidated Supplemental Data (Unaudited)
(in millions, except share and per share data) (in millions) Segment Information (in millions, except per share data)
Three Months Ended June 30, Six Months Ended June 30, Net Sales Three Months Ended June 30, Six Months Ended June 30,
2019 2018 2019 2018 Reconciliation from Income from Operations to Segment Income 2019 2018 2019 2018 Reconciliation from Net Income and Diluted Earnings Per Share to Adjusted Net Income and Adjusted Diluted Earnings Per Share
Net sales $3,035 $3,046 $5,790 $5,243 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, provisions for asbestos and restructuring and other, and the impact of fair value adjustments to inventory acquired in an acquisition. Americas Beverage $ 890 $ 848 $ 1,678 $ 1,606
Cost of products sold 2,417 2,466 4,627 4,274 European Beverage 410 405 749 776 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.
Depreciation and amortization 123 113 245 178 Three Months Ended June 30, Six Months Ended June 30, European Food 483 514 906 942
Selling and administrative expense 157 159 314 249 2019 2018 2019 2018 Asia Pacific 319 332 640 669 Three Months Ended June 30, Six Months Ended June 30,
Restructuring and other (45) 16 (41) 29 Income from operations                               $ 383 $ 292 $ 645 $ 513 Transit Packaging 592 620 1,161 620 2019 2018 2019 2018
Income from operations (1) 383 292 645 513 Intangibles amortization 48 41 97 52      Total reportable segments 2,694 2,719 5,134 4,613 Net income/diluted earnings per share   attributable to Crown Holdings, as reported $137 $1.02 $132 $0.99 $240 $1.78 $222 $1.66
Pension settlements and curtailments 31 17 Fair value adjustment to inventory (1) 40 40 Non-reportable segments (2) 341 327 656 630     Intangibles amortization (1) 48 0.36 41 0.31 97 0.72 52 0.39
Other pension and postretirement (2) (17) (6) (34) Provision for restructuring and other (45) 16 (41) 29        Total net sales $ 3,035 $ 3,046 $ 5,790 $ 5,243     Fair value adjustment to inventory (2) 40 0.30 40 0.30
Foreign exchange 1 10 2 28 Segment income $ 386 $ 389 $ 701 $ 634     Restructuring and other  (3) (45) (0.33) 16 0.12 (41) (0.30) 29 0.22
Earnings before interest and taxes 353 299 632 519     Pension settlements and curtailments (4) 31 0.23 17 0.13
Interest expense 97 103 195 177 (1) Included in cost of products sold Segment Income        Acquisition costs (5) 24 0.18
Interest income (4) (5) (7) (11)     Loss from early extinguishment of debt (6) 6 0.04
Loss from early extinguishment of debt 6 Americas Beverage $ 139 $ 113 $ 252 $ 211     Income taxes (7) 12 0.08 (21) (0.16) 2 0.01 (33) (0.25)
Income before income taxes 260 201 438 353 European Beverage 60 59 99 114     Noncontrolling interests (8) 14 0.10 (1) (0.01) 17 0.13 (1) (0.01)
Provision for income taxes 88 55 136 94 European Food 62 85 110 141
Equity earnings 2 1 3 1 Asia Pacific 51 47 96 91 Adjusted net income/diluted earnings per share $197 $1.46 $207 $1.55 $338 $2.51 $333 $2.49
Net income 174 147 305 260 Transit Packaging 80 94 153 94
Net income attributable to noncontrolling interests (37) (15) (65) (38)      Total reportable segments 392 398 710 651 Effective tax rate as reported 33.8% 27.4% 31.1% 26.6%
Net income attributable to Crown Holdings $137 $132 $240 $222 Non-reportable segments (2) 33 31 69 62 Adjusted effective tax rate (9) 25.9% 25.5% 25.9% 25.5%
Corporate and other unallocated items (39) (40) (78) (79)
Earnings per share attributable to Crown Holdings      common shareholders:        Total segment income $ 386 $ 389 $ 701 $ 634
     Basic    $1.02 $0.99 $1.79 $1.66
     Diluted $1.02 $0.99 $1.78 $1.66 (2) Includes the Company's food can and closures businesses in North America, aerosol can businesses in North America and Europe, promotional packaging business in Europe, and tooling and equipment operations in the U.S. and United Kingdom.
Weighted average common shares outstanding:
      Basic 133,865,669 133,612,348 133,827,567 133,546,223
      Diluted 134,777,236 133,844,185 134,636,935 133,814,394
Actual common shares outstanding 135,434,877 135,174,989 135,434,877 135,174,989
(1)  A reconciliation from income from operations to segment income follows.

Consolidated Statements of Operations (Unaudited) Consolidated Supplemental Financial Data (Unaudited) Consolidated Supplemental Data (Unaudited)
(in millions, except share and per share data) (in millions) Segment Information (in millions, except per share data) 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.
Three Months Ended June 30, Six Months Ended June 30, Net Sales Three Months Ended June 30, Six Months Ended June 30, (1) In the second quarter and first six months of 2019, the Company recorded charges of $47 million ($35 million net of tax) and $94 million ($70 million net of tax) for intangibles arising from acquisitions.  Also in the second quarter and first six months of 2019, the Company recorded charge of $1million ($1 million net of tax) and $3 million ($3 million net of tax) for accelerated depreciation related to the planned shutdown of a steel beverage can operation in Spain.  In the second quarter and first six months of 2018, the Company recorded charges of $41 million ($30 million net of tax) and $52 million ($38 million net of tax) for intangibles amortization.
2019 2018 2019 2018 Reconciliation from Income from Operations to Segment Income 2019 2018 2019 2018 Reconciliation from Net Income and Diluted Earnings Per Share to Adjusted Net Income and Adjusted Diluted Earnings Per Share
Net sales $3,035 $3,046 $5,790 $5,243 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, provisions for asbestos and restructuring and other, and the impact of fair value adjustments to inventory acquired in an acquisition. Americas Beverage $ 890 $ 848 $ 1,678 $ 1,606 (2) In the second quarter of 2018, the Company recorded a charge of $40 million ($29 million net of tax) in cost of products sold for fair value adjustment related to the sale of inventory acquired in its acquisition of Signode.
Cost of products sold 2,417 2,466 4,627 4,274 European Beverage 410 405 749 776 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.
Depreciation and amortization 123 113 245 178 Three Months Ended June 30, Six Months Ended June 30, European Food 483 514 906 942 (3) In the second quarter and first six months of 2019, the Company recorded net restructuring and other gains of $45 million ($31 million net of tax) and $41 million ($26 million net of tax).  The second quarter included a gain of $41 million arising from a favorable court ruling in a lawsuit brought by one of the Company's Brazilian subsidiaries claiming it was overcharged by the local tax authorities for indirect taxes paid in prior years, and other net gains of $4 million primarily related to asset sales. The first six months of 2019 included gains of $50 million related to the favorable court rulings in Brazil, offset by other net charges of $9 million primarily related to restructuring actions and asset sales. In the second quarter and first six months of 2018, the Company recorded net restructuring and other charges of $16 million ($13 million net of tax) and $29 million ($24 million net of tax) including $19 million and $22 million of transaction costs in connection with its acquisition of Signode.
Selling and administrative expense 157 159 314 249 2019 2018 2019 2018 Asia Pacific 319 332 640 669 Three Months Ended June 30, Six Months Ended June 30,
Restructuring and other (45) 16 (41) 29 Income from operations                               $ 383 $ 292 $ 645 $ 513 Transit Packaging 592 620 1,161 620 2019 2018 2019 2018 (4) In the second quarter of 2019, the Company recorded a charge of $31 million ($26 million net of tax) arising from a pension plan settlement.  In the first quarter of 2019, the Company recorded a curtailment gain of $14 million ($12 million net of tax) in connection with the closure of a defined pension plan to future accrual for active members.
Income from operations (1) 383 292 645 513 Intangibles amortization 48 41 97 52      Total reportable segments 2,694 2,719 5,134 4,613 Net income/diluted earnings per share   attributable to Crown Holdings, as reported $137 $1.02 $132 $0.99 $240 $1.78 $222 $1.66
Pension settlements and curtailments 31 17 Fair value adjustment to inventory (1) 40 40 Non-reportable segments (2) 341 327 656 630     Intangibles amortization (1) 48 0.36 41 0.31 97 0.72 52 0.39 (5) In the first quarter of 2018, the Company recorded a charge of $15 million ($10 million net of tax) for net losses arising from its hedge of the U.S. dollar purchase price of its acquisition of Signode.  Also in the first quarter, the Company incurred net charges of $9 million ($7 million net of tax) for pre-acquisition interest carrying costs on borrowings to finance the acquisition.
Other pension and postretirement (2) (17) (6) (34) Provision for restructuring and other (45) 16 (41) 29        Total net sales $ 3,035 $ 3,046 $ 5,790 $ 5,243     Fair value adjustment to inventory (2) 40 0.30 40 0.30
Foreign exchange 1 10 2 28 Segment income $ 386 $ 389 $ 701 $ 634     Restructuring and other  (3) (45) (0.33) 16 0.12 (41) (0.30) 29 0.22 (6) In the first quarter of 2019, the Company recorded a charge of $6 million ($5 million net of tax) for the write off of deferred financing fees in connection with the repayment of a portion of its term loan.
Earnings before interest and taxes 353 299 632 519     Pension settlements and curtailments (4) 31 0.23 17 0.13
Interest expense 97 103 195 177 (1) Included in cost of products sold Segment Income        Acquisition costs (5) 24 0.18 (7) In the second quarter and first six months of 2019, the Company recorded income tax benefits of $3 million and $13 million related to the items described above. Also in the second quarter of 2019, the Company recorded a charge of $15 million to settle a tax contingency arising from a transaction that occurred prior to its acquisition of Signode.  In the second quarter and first six months of 2018, the Company recorded income tax benefits of $21 million and $33 million related to the items described above.
Interest income (4) (5) (7) (11)     Loss from early extinguishment of debt (6) 6 0.04
Loss from early extinguishment of debt 6 Americas Beverage $ 139 $ 113 $ 252 $ 211     Income taxes (7) 12 0.08 (21) (0.16) 2 0.01 (33) (0.25) (8) In the second quarter and first six months of 2019, the Company recorded noncontrolling interest expense of $14 million and $17 million related to the items described above.  In the second quarter and first six months of 2018, the Company recorded noncontrolling interest benefits of $1 million and $1 million related to the items described above. 
Income before income taxes 260 201 438 353 European Beverage 60 59 99 114     Noncontrolling interests (8) 14 0.10 (1) (0.01) 17 0.13 (1) (0.01)
Provision for income taxes 88 55 136 94 European Food 62 85 110 141 (9) Income tax effects on adjusted net income were calculated using the applicable tax rates of the underlying jurisdictions.
Equity earnings 2 1 3 1 Asia Pacific 51 47 96 91 Adjusted net income/diluted earnings per share $197 $1.46 $207 $1.55 $338 $2.51 $333 $2.49
Net income 174 147 305 260 Transit Packaging 80 94 153 94
Net income attributable to noncontrolling interests (37) (15) (65) (38)      Total reportable segments 392 398 710 651 Effective tax rate as reported 33.8% 27.4% 31.1% 26.6%
Net income attributable to Crown Holdings $137 $132 $240 $222 Non-reportable segments (2) 33 31 69 62 Adjusted effective tax rate (9) 25.9% 25.5% 25.9% 25.5%
Corporate and other unallocated items (39) (40) (78) (79)
Earnings per share attributable to Crown Holdings      common shareholders:        Total segment income $ 386 $ 389 $ 701 $ 634
     Basic    $1.02 $0.99 $1.79 $1.66
     Diluted $1.02 $0.99 $1.78 $1.66 (2) Includes the Company's food can and closures businesses in North America, aerosol can businesses in North America and Europe, promotional packaging business in Europe, and tooling and equipment operations in the U.S. and United Kingdom.
Weighted average common shares outstanding:
      Basic 133,865,669 133,612,348 133,827,567 133,546,223
      Diluted 134,777,236 133,844,185 134,636,935 133,814,394
Actual common shares outstanding 135,434,877 135,174,989 135,434,877 135,174,989
(1)  A reconciliation from income from operations to segment income follows.

 

Consolidated Statements of Operations (Unaudited) Consolidated Supplemental Financial Data (Unaudited) Consolidated Supplemental Data (Unaudited) Consolidated Balance Sheets (Condensed & Unaudited) (in millions)
(in millions, except share and per share data) (in millions) Segment Information (in millions, except per share data) 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. June 30,     2019 (1) 2018
Assets
Three Months Ended June 30, Six Months Ended June 30, Net Sales Three Months Ended June 30, Six Months Ended June 30, (1) In the second quarter and first six months of 2019, the Company recorded charges of $47 million ($35 million net of tax) and $94 million ($70 million net of tax) for intangibles arising from acquisitions.  Also in the second quarter and first six months of 2019, the Company recorded charge of $1million ($1 million net of tax) and $3 million ($3 million net of tax) for accelerated depreciation related to the planned shutdown of a steel beverage can operation in Spain.  In the second quarter and first six months of 2018, the Company recorded charges of $41 million ($30 million net of tax) and $52 million ($38 million net of tax) for intangibles amortization. Current assets
2019 2018 2019 2018 Reconciliation from Income from Operations to Segment Income 2019 2018 2019 2018 Reconciliation from Net Income and Diluted Earnings Per Share to Adjusted Net Income and Adjusted Diluted Earnings Per Share     Cash and cash equivalents $ 342 $ 298
Net sales $3,035 $3,046 $5,790 $5,243 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, provisions for asbestos and restructuring and other, and the impact of fair value adjustments to inventory acquired in an acquisition. Americas Beverage $ 890 $ 848 $ 1,678 $ 1,606 (2) In the second quarter of 2018, the Company recorded a charge of $40 million ($29 million net of tax) in cost of products sold for fair value adjustment related to the sale of inventory acquired in its acquisition of Signode.     Receivables, net 1,830 1,790
Cost of products sold 2,417 2,466 4,627 4,274 European Beverage 410 405 749 776 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.     Inventories 1,837 1,737
Depreciation and amortization 123 113 245 178 Three Months Ended June 30, Six Months Ended June 30, European Food 483 514 906 942 (3) In the second quarter and first six months of 2019, the Company recorded net restructuring and other gains of $45 million ($31 million net of tax) and $41 million ($26 million net of tax).  The second quarter included a gain of $41 million arising from a favorable court ruling in a lawsuit brought by one of the Company's Brazilian subsidiaries claiming it was overcharged by the local tax authorities for indirect taxes paid in prior years, and other net gains of $4 million primarily related to asset sales. The first six months of 2019 included gains of $50 million related to the favorable court rulings in Brazil, offset by other net charges of $9 million primarily related to restructuring actions and asset sales. In the second quarter and first six months of 2018, the Company recorded net restructuring and other charges of $16 million ($13 million net of tax) and $29 million ($24 million net of tax) including $19 million and $22 million of transaction costs in connection with its acquisition of Signode.     Prepaid expenses and other current assets 205 330
Selling and administrative expense 157 159 314 249 2019 2018 2019 2018 Asia Pacific 319 332 640 669 Three Months Ended June 30, Six Months Ended June 30,             Total current assets 4,214 4,155
Restructuring and other (45) 16 (41) 29 Income from operations                               $ 383 $ 292 $ 645 $ 513 Transit Packaging 592 620 1,161 620 2019 2018 2019 2018 (4) In the second quarter of 2019, the Company recorded a charge of $31 million ($26 million net of tax) arising from a pension plan settlement.  In the first quarter of 2019, the Company recorded a curtailment gain of $14 million ($12 million net of tax) in connection with the closure of a defined pension plan to future accrual for active members.
Income from operations (1) 383 292 645 513 Intangibles amortization 48 41 97 52      Total reportable segments 2,694 2,719 5,134 4,613 Net income/diluted earnings per share   attributable to Crown Holdings, as reported $137 $1.02 $132 $0.99 $240 $1.78 $222 $1.66 Goodwill and intangible assets, net 6,554 6,741
Pension settlements and curtailments 31 17 Fair value adjustment to inventory (1) 40 40 Non-reportable segments (2) 341 327 656 630     Intangibles amortization (1) 48 0.36 41 0.31 97 0.72 52 0.39 (5) In the first quarter of 2018, the Company recorded a charge of $15 million ($10 million net of tax) for net losses arising from its hedge of the U.S. dollar purchase price of its acquisition of Signode.  Also in the first quarter, the Company incurred net charges of $9 million ($7 million net of tax) for pre-acquisition interest carrying costs on borrowings to finance the acquisition. Property, plant and equipment, net 3,761 3,688
Other pension and postretirement (2) (17) (6) (34) Provision for restructuring and other (45) 16 (41) 29        Total net sales $ 3,035 $ 3,046 $ 5,790 $ 5,243     Fair value adjustment to inventory (2) 40 0.30 40 0.30 Other non-current assets 1,043 776
Foreign exchange 1 10 2 28 Segment income $ 386 $ 389 $ 701 $ 634     Restructuring and other  (3) (45) (0.33) 16 0.12 (41) (0.30) 29 0.22 (6) In the first quarter of 2019, the Company recorded a charge of $6 million ($5 million net of tax) for the write off of deferred financing fees in connection with the repayment of a portion of its term loan.             Total $ 15,572 $ 15,360
Earnings before interest and taxes 353 299 632 519     Pension settlements and curtailments (4) 31 0.23 17 0.13
Interest expense 97 103 195 177 (1) Included in cost of products sold Segment Income        Acquisition costs (5) 24 0.18 (7) In the second quarter and first six months of 2019, the Company recorded income tax benefits of $3 million and $13 million related to the items described above. Also in the second quarter of 2019, the Company recorded a charge of $15 million to settle a tax contingency arising from a transaction that occurred prior to its acquisition of Signode.  In the second quarter and first six months of 2018, the Company recorded income tax benefits of $21 million and $33 million related to the items described above.
Interest income (4) (5) (7) (11)     Loss from early extinguishment of debt (6) 6 0.04 Liabilities and equity
Loss from early extinguishment of debt 6 Americas Beverage $ 139 $ 113 $ 252 $ 211     Income taxes (7) 12 0.08 (21) (0.16) 2 0.01 (33) (0.25) (8) In the second quarter and first six months of 2019, the Company recorded noncontrolling interest expense of $14 million and $17 million related to the items described above.  In the second quarter and first six months of 2018, the Company recorded noncontrolling interest benefits of $1 million and $1 million related to the items described above.  Current liabilities
Income before income taxes 260 201 438 353 European Beverage 60 59 99 114     Noncontrolling interests (8) 14 0.10 (1) (0.01) 17 0.13 (1) (0.01)     Short-term debt $ 135 $ 31
Provision for income taxes 88 55 136 94 European Food 62 85 110 141 (9) Income tax effects on adjusted net income were calculated using the applicable tax rates of the underlying jurisdictions.     Current maturities of long-term debt 88 84
Equity earnings 2 1 3 1 Asia Pacific 51 47 96 91 Adjusted net income/diluted earnings per share $197 $1.46 $207 $1.55 $338 $2.51 $333 $2.49     Accounts payable and accrued liabilities 3,385 3,414
Net income 174 147 305 260 Transit Packaging 80 94 153 94             Total current liabilities 3,608 3,529
Net income attributable to noncontrolling interests (37) (15) (65) (38)      Total reportable segments 392 398 710 651 Effective tax rate as reported 33.8% 27.4% 31.1% 26.6%
Net income attributable to Crown Holdings $137 $132 $240 $222 Non-reportable segments (2) 33 31 69 62 Adjusted effective tax rate (9) 25.9% 25.5% 25.9% 25.5% Long-term debt, excluding current maturities 8,549 9,236
Corporate and other unallocated items (39) (40) (78) (79) Other non-current liabilities 1,709 1,458
Earnings per share attributable to Crown Holdings      common shareholders:        Total segment income $ 386 $ 389 $ 701 $ 634
     Basic    $1.02 $0.99 $1.79 $1.66 Noncontrolling interests 406 353
     Diluted $1.02 $0.99 $1.78 $1.66 (2) Includes the Company's food can and closures businesses in North America, aerosol can businesses in North America and Europe, promotional packaging business in Europe, and tooling and equipment operations in the U.S. and United Kingdom. Crown Holdings shareholders' equity 1,300 784
Total equity 1,706 1,137
Weighted average common shares outstanding:             Total $ 15,572 $ 15,360
      Basic 133,865,669 133,612,348 133,827,567 133,546,223
      Diluted 134,777,236 133,844,185 134,636,935 133,814,394
Actual common shares outstanding 135,434,877 135,174,989 135,434,877 135,174,989
(1) On January 1, 2019, the Company adopted new lease accounting guidance resulting in increases in other non-current assets and other non-current liabilities of $220.  Prior period amounts have not been recast and continue to be reported in accordance with accounting guidance in effect for those periods.
(1)  A reconciliation from income from operations to segment income follows.

 

Consolidated Statements of Operations (Unaudited) Consolidated Supplemental Financial Data (Unaudited) Consolidated Supplemental Data (Unaudited) Consolidated Balance Sheets (Condensed & Unaudited) (in millions) Consolidated Statements of Cash Flows (Condensed & Unaudited) (in millions)
(in millions, except share and per share data) (in millions) Segment Information (in millions, except per share data) 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. June 30,     2019 (1) 2018 Six months ended June 30, 2019 2018
Assets
Three Months Ended June 30, Six Months Ended June 30, Net Sales Three Months Ended June 30, Six Months Ended June 30, (1) In the second quarter and first six months of 2019, the Company recorded charges of $47 million ($35 million net of tax) and $94 million ($70 million net of tax) for intangibles arising from acquisitions.  Also in the second quarter and first six months of 2019, the Company recorded charge of $1million ($1 million net of tax) and $3 million ($3 million net of tax) for accelerated depreciation related to the planned shutdown of a steel beverage can operation in Spain.  In the second quarter and first six months of 2018, the Company recorded charges of $41 million ($30 million net of tax) and $52 million ($38 million net of tax) for intangibles amortization. Current assets Cash flows from operating activities
2019 2018 2019 2018 Reconciliation from Income from Operations to Segment Income 2019 2018 2019 2018 Reconciliation from Net Income and Diluted Earnings Per Share to Adjusted Net Income and Adjusted Diluted Earnings Per Share     Cash and cash equivalents $ 342 $ 298      Net income $ 305 $ 260
Net sales $3,035 $3,046 $5,790 $5,243 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, provisions for asbestos and restructuring and other, and the impact of fair value adjustments to inventory acquired in an acquisition. Americas Beverage $ 890 $ 848 $ 1,678 $ 1,606 (2) In the second quarter of 2018, the Company recorded a charge of $40 million ($29 million net of tax) in cost of products sold for fair value adjustment related to the sale of inventory acquired in its acquisition of Signode.     Receivables, net 1,830 1,790      Depreciation and amortization  245 178
Cost of products sold 2,417 2,466 4,627 4,274 European Beverage 410 405 749 776 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.     Inventories 1,837 1,737      Restructuring and other (41) 29
Depreciation and amortization 123 113 245 178 Three Months Ended June 30, Six Months Ended June 30, European Food 483 514 906 942 (3) In the second quarter and first six months of 2019, the Company recorded net restructuring and other gains of $45 million ($31 million net of tax) and $41 million ($26 million net of tax).  The second quarter included a gain of $41 million arising from a favorable court ruling in a lawsuit brought by one of the Company's Brazilian subsidiaries claiming it was overcharged by the local tax authorities for indirect taxes paid in prior years, and other net gains of $4 million primarily related to asset sales. The first six months of 2019 included gains of $50 million related to the favorable court rulings in Brazil, offset by other net charges of $9 million primarily related to restructuring actions and asset sales. In the second quarter and first six months of 2018, the Company recorded net restructuring and other charges of $16 million ($13 million net of tax) and $29 million ($24 million net of tax) including $19 million and $22 million of transaction costs in connection with its acquisition of Signode.     Prepaid expenses and other current assets 205 330      Pension expense 40 3
Selling and administrative expense 157 159 314 249 2019 2018 2019 2018 Asia Pacific 319 332 640 669 Three Months Ended June 30, Six Months Ended June 30,             Total current assets 4,214 4,155      Pension contributions (9) (10)
Restructuring and other (45) 16 (41) 29 Income from operations                               $ 383 $ 292 $ 645 $ 513 Transit Packaging 592 620 1,161 620 2019 2018 2019 2018 (4) In the second quarter of 2019, the Company recorded a charge of $31 million ($26 million net of tax) arising from a pension plan settlement.  In the first quarter of 2019, the Company recorded a curtailment gain of $14 million ($12 million net of tax) in connection with the closure of a defined pension plan to future accrual for active members.      Stock-based compensation 16 11
Income from operations (1) 383 292 645 513 Intangibles amortization 48 41 97 52      Total reportable segments 2,694 2,719 5,134 4,613 Net income/diluted earnings per share   attributable to Crown Holdings, as reported $137 $1.02 $132 $0.99 $240 $1.78 $222 $1.66 Goodwill and intangible assets, net 6,554 6,741      Working capital changes and other (783) (963)
Pension settlements and curtailments 31 17 Fair value adjustment to inventory (1) 40 40 Non-reportable segments (2) 341 327 656 630     Intangibles amortization (1) 48 0.36 41 0.31 97 0.72 52 0.39 (5) In the first quarter of 2018, the Company recorded a charge of $15 million ($10 million net of tax) for net losses arising from its hedge of the U.S. dollar purchase price of its acquisition of Signode.  Also in the first quarter, the Company incurred net charges of $9 million ($7 million net of tax) for pre-acquisition interest carrying costs on borrowings to finance the acquisition. Property, plant and equipment, net 3,761 3,688
Other pension and postretirement (2) (17) (6) (34) Provision for restructuring and other (45) 16 (41) 29        Total net sales $ 3,035 $ 3,046 $ 5,790 $ 5,243     Fair value adjustment to inventory (2) 40 0.30 40 0.30 Other non-current assets 1,043 776            Net cash used for operating activities (1)  (227) (492)
Foreign exchange 1 10 2 28 Segment income $ 386 $ 389 $ 701 $ 634     Restructuring and other  (3) (45) (0.33) 16 0.12 (41) (0.30) 29 0.22 (6) In the first quarter of 2019, the Company recorded a charge of $6 million ($5 million net of tax) for the write off of deferred financing fees in connection with the repayment of a portion of its term loan.             Total $ 15,572 $ 15,360
Earnings before interest and taxes 353 299 632 519     Pension settlements and curtailments (4) 31 0.23 17 0.13 Cash flows from investing activities
Interest expense 97 103 195 177 (1) Included in cost of products sold Segment Income        Acquisition costs (5) 24 0.18 (7) In the second quarter and first six months of 2019, the Company recorded income tax benefits of $3 million and $13 million related to the items described above. Also in the second quarter of 2019, the Company recorded a charge of $15 million to settle a tax contingency arising from a transaction that occurred prior to its acquisition of Signode.  In the second quarter and first six months of 2018, the Company recorded income tax benefits of $21 million and $33 million related to the items described above.      Capital expenditures (154) (200)
Interest income (4) (5) (7) (11)     Loss from early extinguishment of debt (6) 6 0.04 Liabilities and equity      Beneficial interest in transferred receivables 335
Loss from early extinguishment of debt 6 Americas Beverage $ 139 $ 113 $ 252 $ 211     Income taxes (7) 12 0.08 (21) (0.16) 2 0.01 (33) (0.25) (8) In the second quarter and first six months of 2019, the Company recorded noncontrolling interest expense of $14 million and $17 million related to the items described above.  In the second quarter and first six months of 2018, the Company recorded noncontrolling interest benefits of $1 million and $1 million related to the items described above.  Current liabilities      Acquisition of business, net of cash acquired (3,907)
Income before income taxes 260 201 438 353 European Beverage 60 59 99 114     Noncontrolling interests (8) 14 0.10 (1) (0.01) 17 0.13 (1) (0.01)     Short-term debt $ 135 $ 31      Proceeds from sale of assets 11 5
Provision for income taxes 88 55 136 94 European Food 62 85 110 141 (9) Income tax effects on adjusted net income were calculated using the applicable tax rates of the underlying jurisdictions.     Current maturities of long-term debt 88 84      Other 6 (25)
Equity earnings 2 1 3 1 Asia Pacific 51 47 96 91 Adjusted net income/diluted earnings per share $197 $1.46 $207 $1.55 $338 $2.51 $333 $2.49     Accounts payable and accrued liabilities 3,385 3,414
Net income 174 147 305 260 Transit Packaging 80 94 153 94             Total current liabilities 3,608 3,529            Net cash used for investing activities (137) (3,792)
Net income attributable to noncontrolling interests (37) (15) (65) (38)      Total reportable segments 392 398 710 651 Effective tax rate as reported 33.8% 27.4% 31.1% 26.6%
Net income attributable to Crown Holdings $137 $132 $240 $222 Non-reportable segments (2) 33 31 69 62 Adjusted effective tax rate (9) 25.9% 25.5% 25.9% 25.5% Long-term debt, excluding current maturities 8,549 9,236 Cash flows from financing activities
Corporate and other unallocated items (39) (40) (78) (79) Other non-current liabilities 1,709 1,458      Net change in debt 130 4,246
Earnings per share attributable to Crown Holdings      common shareholders:        Total segment income $ 386 $ 389 $ 701 $ 634      Dividends paid to noncontrolling interests (11) (6)
     Basic    $1.02 $0.99 $1.79 $1.66 Noncontrolling interests 406 353      Common stock repurchased (2) (4)
     Diluted $1.02 $0.99 $1.78 $1.66 (2) Includes the Company's food can and closures businesses in North America, aerosol can businesses in North America and Europe, promotional packaging business in Europe, and tooling and equipment operations in the U.S. and United Kingdom. Crown Holdings shareholders' equity 1,300 784      Debt issue costs (70)
Total equity 1,706 1,137      Other, net (18) (4)
Weighted average common shares outstanding:             Total $ 15,572 $ 15,360
      Basic 133,865,669 133,612,348 133,827,567 133,546,223            Net cash provided by financing activities 99 4,162
      Diluted 134,777,236 133,844,185 134,636,935 133,814,394
Actual common shares outstanding 135,434,877 135,174,989 135,434,877 135,174,989 Effect of exchange rate changes on cash and cash equivalents 3 (6)
(1) On January 1, 2019, the Company adopted new lease accounting guidance resulting in increases in other non-current assets and other non-current liabilities of $220.  Prior period amounts have not been recast and continue to be reported in accordance with accounting guidance in effect for those periods.
(1)  A reconciliation from income from operations to segment income follows. Net change in cash and cash equivalents (262) (128)
Cash and cash equivalents at January 1 659 435
Cash and cash equivalents at June 30 (2) $ 397 $ 307
(1) Adjusted free cash flow is defined by the Company as net cash used for operating activities plus beneficial interest in transferred receivables less capital expenditures and certain other items.  A reconciliation from net cash used for operating activities to adjusted free cash flow for the three and six months ended June 30, 2019 and 2018 follows.
(2) Cash and cash equivalents includes $55 and $9 of restricted cash at June 30, 2019 and 2018.

Consolidated Statements of Operations (Unaudited) Consolidated Supplemental Financial Data (Unaudited) Consolidated Supplemental Data (Unaudited) Consolidated Balance Sheets (Condensed & Unaudited) (in millions) Consolidated Statements of Cash Flows (Condensed & Unaudited) (in millions) Three Months EndedJune 30, Six Months EndedJune 30,
(in millions, except share and per share data) (in millions) Segment Information (in millions, except per share data) 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. June 30,     2019 (1) 2018 Six months ended June 30, 2019 2018 2019 2018 2019 2018
Assets Net cash from operating activities $439 $259 $(227) $(492)
Three Months Ended June 30, Six Months Ended June 30, Net Sales Three Months Ended June 30, Six Months Ended June 30, (1) In the second quarter and first six months of 2019, the Company recorded charges of $47 million ($35 million net of tax) and $94 million ($70 million net of tax) for intangibles arising from acquisitions.  Also in the second quarter and first six months of 2019, the Company recorded charge of $1million ($1 million net of tax) and $3 million ($3 million net of tax) for accelerated depreciation related to the planned shutdown of a steel beverage can operation in Spain.  In the second quarter and first six months of 2018, the Company recorded charges of $41 million ($30 million net of tax) and $52 million ($38 million net of tax) for intangibles amortization. Current assets Cash flows from operating activities Beneficial interest in transferred receivables (3) 160 335
2019 2018 2019 2018 Reconciliation from Income from Operations to Segment Income 2019 2018 2019 2018 Reconciliation from Net Income and Diluted Earnings Per Share to Adjusted Net Income and Adjusted Diluted Earnings Per Share     Cash and cash equivalents $ 342 $ 298      Net income $ 305 $ 260 Acquisition costs 19 22
Net sales $3,035 $3,046 $5,790 $5,243 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, provisions for asbestos and restructuring and other, and the impact of fair value adjustments to inventory acquired in an acquisition. Americas Beverage $ 890 $ 848 $ 1,678 $ 1,606 (2) In the second quarter of 2018, the Company recorded a charge of $40 million ($29 million net of tax) in cost of products sold for fair value adjustment related to the sale of inventory acquired in its acquisition of Signode.     Receivables, net 1,830 1,790      Depreciation and amortization  245 178 Adjusted cash used for operating activities 439 438 (227) (135)
Cost of products sold 2,417 2,466 4,627 4,274 European Beverage 410 405 749 776 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.     Inventories 1,837 1,737      Restructuring and other (41) 29 Interest included in investing activities (4) 6
Depreciation and amortization 123 113 245 178 Three Months Ended June 30, Six Months Ended June 30, European Food 483 514 906 942 (3) In the second quarter and first six months of 2019, the Company recorded net restructuring and other gains of $45 million ($31 million net of tax) and $41 million ($26 million net of tax).  The second quarter included a gain of $41 million arising from a favorable court ruling in a lawsuit brought by one of the Company's Brazilian subsidiaries claiming it was overcharged by the local tax authorities for indirect taxes paid in prior years, and other net gains of $4 million primarily related to asset sales. The first six months of 2019 included gains of $50 million related to the favorable court rulings in Brazil, offset by other net charges of $9 million primarily related to restructuring actions and asset sales. In the second quarter and first six months of 2018, the Company recorded net restructuring and other charges of $16 million ($13 million net of tax) and $29 million ($24 million net of tax) including $19 million and $22 million of transaction costs in connection with its acquisition of Signode.     Prepaid expenses and other current assets 205 330      Pension expense 40 3 Capital expenditures (79) (108) (154) (200)
Selling and administrative expense 157 159 314 249 2019 2018 2019 2018 Asia Pacific 319 332 640 669 Three Months Ended June 30, Six Months Ended June 30,             Total current assets 4,214 4,155      Pension contributions (9) (10) Adjusted free cash flow $360 $330 $(375) $(335)
Restructuring and other (45) 16 (41) 29 Income from operations                               $ 383 $ 292 $ 645 $ 513 Transit Packaging 592 620 1,161 620 2019 2018 2019 2018 (4) In the second quarter of 2019, the Company recorded a charge of $31 million ($26 million net of tax) arising from a pension plan settlement.  In the first quarter of 2019, the Company recorded a curtailment gain of $14 million ($12 million net of tax) in connection with the closure of a defined pension plan to future accrual for active members.      Stock-based compensation 16 11
Income from operations (1) 383 292 645 513 Intangibles amortization 48 41 97 52      Total reportable segments 2,694 2,719 5,134 4,613 Net income/diluted earnings per share   attributable to Crown Holdings, as reported $137 $1.02 $132 $0.99 $240 $1.78 $222 $1.66 Goodwill and intangible assets, net 6,554 6,741      Working capital changes and other (783) (963)
Pension settlements and curtailments 31 17 Fair value adjustment to inventory (1) 40 40 Non-reportable segments (2) 341 327 656 630     Intangibles amortization (1) 48 0.36 41 0.31 97 0.72 52 0.39 (5) In the first quarter of 2018, the Company recorded a charge of $15 million ($10 million net of tax) for net losses arising from its hedge of the U.S. dollar purchase price of its acquisition of Signode.  Also in the first quarter, the Company incurred net charges of $9 million ($7 million net of tax) for pre-acquisition interest carrying costs on borrowings to finance the acquisition. Property, plant and equipment, net 3,761 3,688 (3) Subsequent to amendments to the Company's receivables securitization program during the third quarter of 2018, certain activity that was previously reported as investing activity is now reported as operating activity. 
Other pension and postretirement (2) (17) (6) (34) Provision for restructuring and other (45) 16 (41) 29        Total net sales $ 3,035 $ 3,046 $ 5,790 $ 5,243     Fair value adjustment to inventory (2) 40 0.30 40 0.30 Other non-current assets 1,043 776            Net cash used for operating activities (1)  (227) (492)
Foreign exchange 1 10 2 28 Segment income $ 386 $ 389 $ 701 $ 634     Restructuring and other  (3) (45) (0.33) 16 0.12 (41) (0.30) 29 0.22 (6) In the first quarter of 2019, the Company recorded a charge of $6 million ($5 million net of tax) for the write off of deferred financing fees in connection with the repayment of a portion of its term loan.             Total $ 15,572 $ 15,360 (4) Interest benefit of cross currency swaps included in investing activities.
Earnings before interest and taxes 353 299 632 519     Pension settlements and curtailments (4) 31 0.23 17 0.13 Cash flows from investing activities
Interest expense 97 103 195 177 (1) Included in cost of products sold Segment Income        Acquisition costs (5) 24 0.18 (7) In the second quarter and first six months of 2019, the Company recorded income tax benefits of $3 million and $13 million related to the items described above. Also in the second quarter of 2019, the Company recorded a charge of $15 million to settle a tax contingency arising from a transaction that occurred prior to its acquisition of Signode.  In the second quarter and first six months of 2018, the Company recorded income tax benefits of $21 million and $33 million related to the items described above.      Capital expenditures (154) (200)
Interest income (4) (5) (7) (11)     Loss from early extinguishment of debt (6) 6 0.04 Liabilities and equity      Beneficial interest in transferred receivables 335
Loss from early extinguishment of debt 6 Americas Beverage $ 139 $ 113 $ 252 $ 211     Income taxes (7) 12 0.08 (21) (0.16) 2 0.01 (33) (0.25) (8) In the second quarter and first six months of 2019, the Company recorded noncontrolling interest expense of $14 million and $17 million related to the items described above.  In the second quarter and first six months of 2018, the Company recorded noncontrolling interest benefits of $1 million and $1 million related to the items described above.  Current liabilities      Acquisition of business, net of cash acquired (3,907)
Income before income taxes 260 201 438 353 European Beverage 60 59 99 114     Noncontrolling interests (8) 14 0.10 (1) (0.01) 17 0.13 (1) (0.01)     Short-term debt $ 135 $ 31      Proceeds from sale of assets 11 5
Provision for income taxes 88 55 136 94 European Food 62 85 110 141 (9) Income tax effects on adjusted net income were calculated using the applicable tax rates of the underlying jurisdictions.     Current maturities of long-term debt 88 84      Other 6 (25)
Equity earnings 2 1 3 1 Asia Pacific 51 47 96 91 Adjusted net income/diluted earnings per share $197 $1.46 $207 $1.55 $338 $2.51 $333 $2.49     Accounts payable and accrued liabilities 3,385 3,414
Net income 174 147 305 260 Transit Packaging 80 94 153 94             Total current liabilities 3,608 3,529            Net cash used for investing activities (137) (3,792)
Net income attributable to noncontrolling interests (37) (15) (65) (38)      Total reportable segments 392 398 710 651 Effective tax rate as reported 33.8% 27.4% 31.1% 26.6%
Net income attributable to Crown Holdings $137 $132 $240 $222 Non-reportable segments (2) 33 31 69 62 Adjusted effective tax rate (9) 25.9% 25.5% 25.9% 25.5% Long-term debt, excluding current maturities 8,549 9,236 Cash flows from financing activities
Corporate and other unallocated items (39) (40) (78) (79) Other non-current liabilities 1,709 1,458      Net change in debt 130 4,246
Earnings per share attributable to Crown Holdings      common shareholders:        Total segment income $ 386 $ 389 $ 701 $ 634      Dividends paid to noncontrolling interests (11) (6)
     Basic    $1.02 $0.99 $1.79 $1.66 Noncontrolling interests 406 353      Common stock repurchased (2) (4)
     Diluted $1.02 $0.99 $1.78 $1.66 (2) Includes the Company's food can and closures businesses in North America, aerosol can businesses in North America and Europe, promotional packaging business in Europe, and tooling and equipment operations in the U.S. and United Kingdom. Crown Holdings shareholders' equity 1,300 784      Debt issue costs (70)
Total equity 1,706 1,137      Other, net (18) (4)
Weighted average common shares outstanding:             Total $ 15,572 $ 15,360
      Basic 133,865,669 133,612,348 133,827,567 133,546,223            Net cash provided by financing activities 99 4,162
      Diluted 134,777,236 133,844,185 134,636,935 133,814,394
Actual common shares outstanding 135,434,877 135,174,989 135,434,877 135,174,989 Effect of exchange rate changes on cash and cash equivalents 3 (6)
(1) On January 1, 2019, the Company adopted new lease accounting guidance resulting in increases in other non-current assets and other non-current liabilities of $220.  Prior period amounts have not been recast and continue to be reported in accordance with accounting guidance in effect for those periods.
(1)  A reconciliation from income from operations to segment income follows. Net change in cash and cash equivalents (262) (128)
Cash and cash equivalents at January 1 659 435
Cash and cash equivalents at June 30 (2) $ 397 $ 307
(1) Adjusted free cash flow is defined by the Company as net cash used for operating activities plus beneficial interest in transferred receivables less capital expenditures and certain other items.  A reconciliation from net cash used for operating activities to adjusted free cash flow for the three and six months ended June 30, 2019 and 2018 follows.
(2) Cash and cash equivalents includes $55 and $9 of restricted cash at June 30, 2019 and 2018.

                      

Consolidated Statements of Operations (Unaudited) Consolidated Supplemental Financial Data (Unaudited) Consolidated Supplemental Data (Unaudited) Consolidated Balance Sheets (Condensed & Unaudited) (in millions) Consolidated Statements of Cash Flows (Condensed & Unaudited) (in millions) Three Months EndedJune 30, Six Months EndedJune 30, Consolidated Supplemental Data (Unaudited)
(in millions, except share and per share data) (in millions) Segment Information (in millions, except per share data) 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. June 30,     2019 (1) 2018 Six months ended June 30, 2019 2018 2019 2018 2019 2018 (in millions, except per share data)
Assets Net cash from operating activities $439 $259 $(227) $(492)
Three Months Ended June 30, Six Months Ended June 30, Net Sales Three Months Ended June 30, Six Months Ended June 30, (1) In the second quarter and first six months of 2019, the Company recorded charges of $47 million ($35 million net of tax) and $94 million ($70 million net of tax) for intangibles arising from acquisitions.  Also in the second quarter and first six months of 2019, the Company recorded charge of $1million ($1 million net of tax) and $3 million ($3 million net of tax) for accelerated depreciation related to the planned shutdown of a steel beverage can operation in Spain.  In the second quarter and first six months of 2018, the Company recorded charges of $41 million ($30 million net of tax) and $52 million ($38 million net of tax) for intangibles amortization. Current assets Cash flows from operating activities Beneficial interest in transferred receivables (3) 160 335
2019 2018 2019 2018 Reconciliation from Income from Operations to Segment Income 2019 2018 2019 2018 Reconciliation from Net Income and Diluted Earnings Per Share to Adjusted Net Income and Adjusted Diluted Earnings Per Share     Cash and cash equivalents $ 342 $ 298      Net income $ 305 $ 260 Acquisition costs 19 22 Impact of Foreign Currency Translation by Segment (1)
Net sales $3,035 $3,046 $5,790 $5,243 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, provisions for asbestos and restructuring and other, and the impact of fair value adjustments to inventory acquired in an acquisition. Americas Beverage $ 890 $ 848 $ 1,678 $ 1,606 (2) In the second quarter of 2018, the Company recorded a charge of $40 million ($29 million net of tax) in cost of products sold for fair value adjustment related to the sale of inventory acquired in its acquisition of Signode.     Receivables, net 1,830 1,790      Depreciation and amortization  245 178 Adjusted cash used for operating activities 439 438 (227) (135)
Cost of products sold 2,417 2,466 4,627 4,274 European Beverage 410 405 749 776 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.     Inventories 1,837 1,737      Restructuring and other (41) 29 Interest included in investing activities (4) 6 Three Months Six Months
Depreciation and amortization 123 113 245 178 Three Months Ended June 30, Six Months Ended June 30, European Food 483 514 906 942 (3) In the second quarter and first six months of 2019, the Company recorded net restructuring and other gains of $45 million ($31 million net of tax) and $41 million ($26 million net of tax).  The second quarter included a gain of $41 million arising from a favorable court ruling in a lawsuit brought by one of the Company's Brazilian subsidiaries claiming it was overcharged by the local tax authorities for indirect taxes paid in prior years, and other net gains of $4 million primarily related to asset sales. The first six months of 2019 included gains of $50 million related to the favorable court rulings in Brazil, offset by other net charges of $9 million primarily related to restructuring actions and asset sales. In the second quarter and first six months of 2018, the Company recorded net restructuring and other charges of $16 million ($13 million net of tax) and $29 million ($24 million net of tax) including $19 million and $22 million of transaction costs in connection with its acquisition of Signode.     Prepaid expenses and other current assets 205 330      Pension expense 40 3 Capital expenditures (79) (108) (154) (200) Ended June 30, 2019  Ended June 30, 2019
Selling and administrative expense 157 159 314 249 2019 2018 2019 2018 Asia Pacific 319 332 640 669 Three Months Ended June 30, Six Months Ended June 30,             Total current assets 4,214 4,155      Pension contributions (9) (10) Adjusted free cash flow $360 $330 $(375) $(335)
Restructuring and other (45) 16 (41) 29 Income from operations                               $ 383 $ 292 $ 645 $ 513 Transit Packaging 592 620 1,161 620 2019 2018 2019 2018 (4) In the second quarter of 2019, the Company recorded a charge of $31 million ($26 million net of tax) arising from a pension plan settlement.  In the first quarter of 2019, the Company recorded a curtailment gain of $14 million ($12 million net of tax) in connection with the closure of a defined pension plan to future accrual for active members.      Stock-based compensation 16 11 Net Sales Segment Income Net Sales Segment Income
Income from operations (1) 383 292 645 513 Intangibles amortization 48 41 97 52      Total reportable segments 2,694 2,719 5,134 4,613 Net income/diluted earnings per share   attributable to Crown Holdings, as reported $137 $1.02 $132 $0.99 $240 $1.78 $222 $1.66 Goodwill and intangible assets, net 6,554 6,741      Working capital changes and other (783) (963)
Pension settlements and curtailments 31 17 Fair value adjustment to inventory (1) 40 40 Non-reportable segments (2) 341 327 656 630     Intangibles amortization (1) 48 0.36 41 0.31 97 0.72 52 0.39 (5) In the first quarter of 2018, the Company recorded a charge of $15 million ($10 million net of tax) for net losses arising from its hedge of the U.S. dollar purchase price of its acquisition of Signode.  Also in the first quarter, the Company incurred net charges of $9 million ($7 million net of tax) for pre-acquisition interest carrying costs on borrowings to finance the acquisition. Property, plant and equipment, net 3,761 3,688 (3) Subsequent to amendments to the Company's receivables securitization program during the third quarter of 2018, certain activity that was previously reported as investing activity is now reported as operating activity.  Americas Beverage $(7) $(1) $(18) $(2)
Other pension and postretirement (2) (17) (6) (34) Provision for restructuring and other (45) 16 (41) 29        Total net sales $ 3,035 $ 3,046 $ 5,790 $ 5,243     Fair value adjustment to inventory (2) 40 0.30 40 0.30 Other non-current assets 1,043 776            Net cash used for operating activities (1)  (227) (492) European Beverage (19) (2) (38) (4)
Foreign exchange 1 10 2 28 Segment income $ 386 $ 389 $ 701 $ 634     Restructuring and other  (3) (45) (0.33) 16 0.12 (41) (0.30) 29 0.22 (6) In the first quarter of 2019, the Company recorded a charge of $6 million ($5 million net of tax) for the write off of deferred financing fees in connection with the repayment of a portion of its term loan.             Total $ 15,572 $ 15,360 (4) Interest benefit of cross currency swaps included in investing activities. European Food (28) (3) (63) (7)
Earnings before interest and taxes 353 299 632 519     Pension settlements and curtailments (4) 31 0.23 17 0.13 Cash flows from investing activities Asia Pacific (3) (1) (7) (1)
Interest expense 97 103 195 177 (1) Included in cost of products sold Segment Income        Acquisition costs (5) 24 0.18 (7) In the second quarter and first six months of 2019, the Company recorded income tax benefits of $3 million and $13 million related to the items described above. Also in the second quarter of 2019, the Company recorded a charge of $15 million to settle a tax contingency arising from a transaction that occurred prior to its acquisition of Signode.  In the second quarter and first six months of 2018, the Company recorded income tax benefits of $21 million and $33 million related to the items described above.      Capital expenditures (154) (200) Transit Packaging (18) (3) (43) (6)
Interest income (4) (5) (7) (11)     Loss from early extinguishment of debt (6) 6 0.04 Liabilities and equity      Beneficial interest in transferred receivables 335 Corporate and Non-Reportable (5) 1 (11) 1
Loss from early extinguishment of debt 6 Americas Beverage $ 139 $ 113 $ 252 $ 211     Income taxes (7) 12 0.08 (21) (0.16) 2 0.01 (33) (0.25) (8) In the second quarter and first six months of 2019, the Company recorded noncontrolling interest expense of $14 million and $17 million related to the items described above.  In the second quarter and first six months of 2018, the Company recorded noncontrolling interest benefits of $1 million and $1 million related to the items described above.  Current liabilities      Acquisition of business, net of cash acquired (3,907) $(80) $(9) $(180) $(19)
Income before income taxes 260 201 438 353 European Beverage 60 59 99 114     Noncontrolling interests (8) 14 0.10 (1) (0.01) 17 0.13 (1) (0.01)     Short-term debt $ 135 $ 31      Proceeds from sale of assets 11 5
Provision for income taxes 88 55 136 94 European Food 62 85 110 141 (9) Income tax effects on adjusted net income were calculated using the applicable tax rates of the underlying jurisdictions.     Current maturities of long-term debt 88 84      Other 6 (25)
Equity earnings 2 1 3 1 Asia Pacific 51 47 96 91 Adjusted net income/diluted earnings per share $197 $1.46 $207 $1.55 $338 $2.51 $333 $2.49     Accounts payable and accrued liabilities 3,385 3,414
Net income 174 147 305 260 Transit Packaging 80 94 153 94             Total current liabilities 3,608 3,529            Net cash used for investing activities (137) (3,792)
Net income attributable to noncontrolling interests (37) (15) (65) (38)      Total reportable segments 392 398 710 651 Effective tax rate as reported 33.8% 27.4% 31.1% 26.6%
Net income attributable to Crown Holdings $137 $132 $240 $222 Non-reportable segments (2) 33 31 69 62 Adjusted effective tax rate (9) 25.9% 25.5% 25.9% 25.5% Long-term debt, excluding current maturities 8,549 9,236 Cash flows from financing activities
Corporate and other unallocated items (39) (40) (78) (79) Other non-current liabilities 1,709 1,458      Net change in debt 130 4,246
Earnings per share attributable to Crown Holdings      common shareholders:        Total segment income $ 386 $ 389 $ 701 $ 634      Dividends paid to noncontrolling interests (11) (6)
     Basic    $1.02 $0.99 $1.79 $1.66 Noncontrolling interests 406 353      Common stock repurchased (2) (4)
     Diluted $1.02 $0.99 $1.78 $1.66 (2) Includes the Company's food can and closures businesses in North America, aerosol can businesses in North America and Europe, promotional packaging business in Europe, and tooling and equipment operations in the U.S. and United Kingdom. Crown Holdings shareholders' equity 1,300 784      Debt issue costs (70)
Total equity 1,706 1,137      Other, net (18) (4)
Weighted average common shares outstanding:             Total $ 15,572 $ 15,360
      Basic 133,865,669 133,612,348 133,827,567 133,546,223            Net cash provided by financing activities 99 4,162
      Diluted 134,777,236 133,844,185 134,636,935 133,814,394
Actual common shares outstanding 135,434,877 135,174,989 135,434,877 135,174,989 Effect of exchange rate changes on cash and cash equivalents 3 (6)
(1) On January 1, 2019, the Company adopted new lease accounting guidance resulting in increases in other non-current assets and other non-current liabilities of $220.  Prior period amounts have not been recast and continue to be reported in accordance with accounting guidance in effect for those periods.
(1)  A reconciliation from income from operations to segment income follows. Net change in cash and cash equivalents (262) (128)
Cash and cash equivalents at January 1 659 435
Cash and cash equivalents at June 30 (2) $ 397 $ 307
(1) Adjusted free cash flow is defined by the Company as net cash used for operating activities plus beneficial interest in transferred receivables less capital expenditures and certain other items.  A reconciliation from net cash used for operating activities to adjusted free cash flow for the three and six months ended June 30, 2019 and 2018 follows.
(2) Cash and cash equivalents includes $55 and $9 of restricted cash at June 30, 2019 and 2018.

Consolidated Statements of Operations (Unaudited) Consolidated Supplemental Financial Data (Unaudited) Consolidated Supplemental Data (Unaudited) Consolidated Balance Sheets (Condensed & Unaudited) (in millions) Consolidated Statements of Cash Flows (Condensed & Unaudited) (in millions) Three Months EndedJune 30, Six Months EndedJune 30, Consolidated Supplemental Data (Unaudited) (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 multiplying or dividing, as appropriate, the current U.S. dollar results by current year average foreign exchange rates and then multiplying or dividing, as appropriate, those amounts by the applicable prior year average foreign exchange rates.
(in millions, except share and per share data) (in millions) Segment Information (in millions, except per share data) 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. June 30,     2019 (1) 2018 Six months ended June 30, 2019 2018 2019 2018 2019 2018 (in millions, except per share data)
Assets Net cash from operating activities $439 $259 $(227) $(492)
Three Months Ended June 30, Six Months Ended June 30, Net Sales Three Months Ended June 30, Six Months Ended June 30, (1) In the second quarter and first six months of 2019, the Company recorded charges of $47 million ($35 million net of tax) and $94 million ($70 million net of tax) for intangibles arising from acquisitions.  Also in the second quarter and first six months of 2019, the Company recorded charge of $1million ($1 million net of tax) and $3 million ($3 million net of tax) for accelerated depreciation related to the planned shutdown of a steel beverage can operation in Spain.  In the second quarter and first six months of 2018, the Company recorded charges of $41 million ($30 million net of tax) and $52 million ($38 million net of tax) for intangibles amortization. Current assets Cash flows from operating activities Beneficial interest in transferred receivables (3) 160 335
2019 2018 2019 2018 Reconciliation from Income from Operations to Segment Income 2019 2018 2019 2018 Reconciliation from Net Income and Diluted Earnings Per Share to Adjusted Net Income and Adjusted Diluted Earnings Per Share     Cash and cash equivalents $ 342 $ 298      Net income $ 305 $ 260 Acquisition costs 19 22 Impact of Foreign Currency Translation by Segment (1)
Net sales $3,035 $3,046 $5,790 $5,243 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, provisions for asbestos and restructuring and other, and the impact of fair value adjustments to inventory acquired in an acquisition. Americas Beverage $ 890 $ 848 $ 1,678 $ 1,606 (2) In the second quarter of 2018, the Company recorded a charge of $40 million ($29 million net of tax) in cost of products sold for fair value adjustment related to the sale of inventory acquired in its acquisition of Signode.     Receivables, net 1,830 1,790      Depreciation and amortization  245 178 Adjusted cash used for operating activities 439 438 (227) (135)
Cost of products sold 2,417 2,466 4,627 4,274 European Beverage 410 405 749 776 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.     Inventories 1,837 1,737      Restructuring and other (41) 29 Interest included in investing activities (4) 6 Three Months Six Months
Depreciation and amortization 123 113 245 178 Three Months Ended June 30, Six Months Ended June 30, European Food 483 514 906 942 (3) In the second quarter and first six months of 2019, the Company recorded net restructuring and other gains of $45 million ($31 million net of tax) and $41 million ($26 million net of tax).  The second quarter included a gain of $41 million arising from a favorable court ruling in a lawsuit brought by one of the Company's Brazilian subsidiaries claiming it was overcharged by the local tax authorities for indirect taxes paid in prior years, and other net gains of $4 million primarily related to asset sales. The first six months of 2019 included gains of $50 million related to the favorable court rulings in Brazil, offset by other net charges of $9 million primarily related to restructuring actions and asset sales. In the second quarter and first six months of 2018, the Company recorded net restructuring and other charges of $16 million ($13 million net of tax) and $29 million ($24 million net of tax) including $19 million and $22 million of transaction costs in connection with its acquisition of Signode.     Prepaid expenses and other current assets 205 330      Pension expense 40 3 Capital expenditures (79) (108) (154) (200) Ended June 30, 2019  Ended June 30, 2019
Selling and administrative expense 157 159 314 249 2019 2018 2019 2018 Asia Pacific 319 332 640 669 Three Months Ended June 30, Six Months Ended June 30,             Total current assets 4,214 4,155      Pension contributions (9) (10) Adjusted free cash flow $360 $330 $(375) $(335)
Restructuring and other (45) 16 (41) 29 Income from operations                               $ 383 $ 292 $ 645 $ 513 Transit Packaging 592 620 1,161 620 2019 2018 2019 2018 (4) In the second quarter of 2019, the Company recorded a charge of $31 million ($26 million net of tax) arising from a pension plan settlement.  In the first quarter of 2019, the Company recorded a curtailment gain of $14 million ($12 million net of tax) in connection with the closure of a defined pension plan to future accrual for active members.      Stock-based compensation 16 11 Net Sales Segment Income Net Sales Segment Income
Income from operations (1) 383 292 645 513 Intangibles amortization 48 41 97 52      Total reportable segments 2,694 2,719 5,134 4,613 Net income/diluted earnings per share   attributable to Crown Holdings, as reported $137 $1.02 $132 $0.99 $240 $1.78 $222 $1.66 Goodwill and intangible assets, net 6,554 6,741      Working capital changes and other (783) (963)
Pension settlements and curtailments 31 17 Fair value adjustment to inventory (1) 40 40 Non-reportable segments (2) 341 327 656 630     Intangibles amortization (1) 48 0.36 41 0.31 97 0.72 52 0.39 (5) In the first quarter of 2018, the Company recorded a charge of $15 million ($10 million net of tax) for net losses arising from its hedge of the U.S. dollar purchase price of its acquisition of Signode.  Also in the first quarter, the Company incurred net charges of $9 million ($7 million net of tax) for pre-acquisition interest carrying costs on borrowings to finance the acquisition. Property, plant and equipment, net 3,761 3,688 (3) Subsequent to amendments to the Company's receivables securitization program during the third quarter of 2018, certain activity that was previously reported as investing activity is now reported as operating activity.  Americas Beverage $(7) $(1) $(18) $(2)
Other pension and postretirement (2) (17) (6) (34) Provision for restructuring and other (45) 16 (41) 29        Total net sales $ 3,035 $ 3,046 $ 5,790 $ 5,243     Fair value adjustment to inventory (2) 40 0.30 40 0.30 Other non-current assets 1,043 776            Net cash used for operating activities (1)  (227) (492) European Beverage (19) (2) (38) (4)
Foreign exchange 1 10 2 28 Segment income $ 386 $ 389 $ 701 $ 634     Restructuring and other  (3) (45) (0.33) 16 0.12 (41) (0.30) 29 0.22 (6) In the first quarter of 2019, the Company recorded a charge of $6 million ($5 million net of tax) for the write off of deferred financing fees in connection with the repayment of a portion of its term loan.             Total $ 15,572 $ 15,360 (4) Interest benefit of cross currency swaps included in investing activities. European Food (28) (3) (63) (7)
Earnings before interest and taxes 353 299 632 519     Pension settlements and curtailments (4) 31 0.23 17 0.13 Cash flows from investing activities Asia Pacific (3) (1) (7) (1)
Interest expense 97 103 195 177 (1) Included in cost of products sold Segment Income        Acquisition costs (5) 24 0.18 (7) In the second quarter and first six months of 2019, the Company recorded income tax benefits of $3 million and $13 million related to the items described above. Also in the second quarter of 2019, the Company recorded a charge of $15 million to settle a tax contingency arising from a transaction that occurred prior to its acquisition of Signode.  In the second quarter and first six months of 2018, the Company recorded income tax benefits of $21 million and $33 million related to the items described above.      Capital expenditures (154) (200) Transit Packaging (18) (3) (43) (6)
Interest income (4) (5) (7) (11)     Loss from early extinguishment of debt (6) 6 0.04 Liabilities and equity      Beneficial interest in transferred receivables 335 Corporate and Non-Reportable (5) 1 (11) 1
Loss from early extinguishment of debt 6 Americas Beverage $ 139 $ 113 $ 252 $ 211     Income taxes (7) 12 0.08 (21) (0.16) 2 0.01 (33) (0.25) (8) In the second quarter and first six months of 2019, the Company recorded noncontrolling interest expense of $14 million and $17 million related to the items described above.  In the second quarter and first six months of 2018, the Company recorded noncontrolling interest benefits of $1 million and $1 million related to the items described above.  Current liabilities      Acquisition of business, net of cash acquired (3,907) $(80) $(9) $(180) $(19)
Income before income taxes 260 201 438 353 European Beverage 60 59 99 114     Noncontrolling interests (8) 14 0.10 (1) (0.01) 17 0.13 (1) (0.01)     Short-term debt $ 135 $ 31      Proceeds from sale of assets 11 5
Provision for income taxes 88 55 136 94 European Food 62 85 110 141 (9) Income tax effects on adjusted net income were calculated using the applicable tax rates of the underlying jurisdictions.     Current maturities of long-term debt 88 84      Other 6 (25)
Equity earnings 2 1 3 1 Asia Pacific 51 47 96 91 Adjusted net income/diluted earnings per share $197 $1.46 $207 $1.55 $338 $2.51 $333 $2.49     Accounts payable and accrued liabilities 3,385 3,414
Net income 174 147 305 260 Transit Packaging 80 94 153 94             Total current liabilities 3,608 3,529            Net cash used for investing activities (137) (3,792)
Net income attributable to noncontrolling interests (37) (15) (65) (38)      Total reportable segments 392 398 710 651 Effective tax rate as reported 33.8% 27.4% 31.1% 26.6%
Net income attributable to Crown Holdings $137 $132 $240 $222 Non-reportable segments (2) 33 31 69 62 Adjusted effective tax rate (9) 25.9% 25.5% 25.9% 25.5% Long-term debt, excluding current maturities 8,549 9,236 Cash flows from financing activities
Corporate and other unallocated items (39) (40) (78) (79) Other non-current liabilities 1,709 1,458      Net change in debt 130 4,246
Earnings per share attributable to Crown Holdings      common shareholders:        Total segment income $ 386 $ 389 $ 701 $ 634      Dividends paid to noncontrolling interests (11) (6)
     Basic    $1.02 $0.99 $1.79 $1.66 Noncontrolling interests 406 353      Common stock repurchased (2) (4)
     Diluted $1.02 $0.99 $1.78 $1.66 (2) Includes the Company's food can and closures businesses in North America, aerosol can businesses in North America and Europe, promotional packaging business in Europe, and tooling and equipment operations in the U.S. and United Kingdom. Crown Holdings shareholders' equity 1,300 784      Debt issue costs (70)
Total equity 1,706 1,137      Other, net (18) (4)
Weighted average common shares outstanding:             Total $ 15,572 $ 15,360
      Basic 133,865,669 133,612,348 133,827,567 133,546,223            Net cash provided by financing activities 99 4,162
      Diluted 134,777,236 133,844,185 134,636,935 133,814,394
Actual common shares outstanding 135,434,877 135,174,989 135,434,877 135,174,989 Effect of exchange rate changes on cash and cash equivalents 3 (6)
(1) On January 1, 2019, the Company adopted new lease accounting guidance resulting in increases in other non-current assets and other non-current liabilities of $220.  Prior period amounts have not been recast and continue to be reported in accordance with accounting guidance in effect for those periods.
(1)  A reconciliation from income from operations to segment income follows. Net change in cash and cash equivalents (262) (128)
Cash and cash equivalents at January 1 659 435
Cash and cash equivalents at June 30 (2) $ 397 $ 307
(1) Adjusted free cash flow is defined by the Company as net cash used for operating activities plus beneficial interest in transferred receivables less capital expenditures and certain other items.  A reconciliation from net cash used for operating activities to adjusted free cash flow for the three and six months ended June 30, 2019 and 2018 follows.
(2) Cash and cash equivalents includes $55 and $9 of restricted cash at June 30, 2019 and 2018.

 

Consolidated Statements of Operations (Unaudited) Consolidated Supplemental Financial Data (Unaudited) Consolidated Supplemental Data (Unaudited) Consolidated Balance Sheets (Condensed & Unaudited) (in millions) Consolidated Statements of Cash Flows (Condensed & Unaudited) (in millions) Three Months EndedJune 30, Six Months EndedJune 30, Consolidated Supplemental Data (Unaudited) (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 multiplying or dividing, as appropriate, the current U.S. dollar results by current year average foreign exchange rates and then multiplying or dividing, as appropriate, those amounts by the applicable prior year average foreign exchange rates. Comparative Results for Transit Packaging
(in millions, except share and per share data) (in millions) Segment Information (in millions, except per share data) 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. June 30,     2019 (1) 2018 Six months ended June 30, 2019 2018 2019 2018 2019 2018 (in millions, except per share data)
Assets Net cash from operating activities $439 $259 $(227) $(492) Revenue Segment Income Depreciation (2)
Three Months Ended June 30, Six Months Ended June 30, Net Sales Three Months Ended June 30, Six Months Ended June 30, (1) In the second quarter and first six months of 2019, the Company recorded charges of $47 million ($35 million net of tax) and $94 million ($70 million net of tax) for intangibles arising from acquisitions.  Also in the second quarter and first six months of 2019, the Company recorded charge of $1million ($1 million net of tax) and $3 million ($3 million net of tax) for accelerated depreciation related to the planned shutdown of a steel beverage can operation in Spain.  In the second quarter and first six months of 2018, the Company recorded charges of $41 million ($30 million net of tax) and $52 million ($38 million net of tax) for intangibles amortization. Current assets Cash flows from operating activities Beneficial interest in transferred receivables (3) 160 335 2019 2018 2017 2019 2018 2017 2019 2018 2017
2019 2018 2019 2018 Reconciliation from Income from Operations to Segment Income 2019 2018 2019 2018 Reconciliation from Net Income and Diluted Earnings Per Share to Adjusted Net Income and Adjusted Diluted Earnings Per Share     Cash and cash equivalents $ 342 $ 298      Net income $ 305 $ 260 Acquisition costs 19 22 Impact of Foreign Currency Translation by Segment (1) Q1 $569 $588 $526 $73 $79 $76 $15 $13 $12
Net sales $3,035 $3,046 $5,790 $5,243 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, provisions for asbestos and restructuring and other, and the impact of fair value adjustments to inventory acquired in an acquisition. Americas Beverage $ 890 $ 848 $ 1,678 $ 1,606 (2) In the second quarter of 2018, the Company recorded a charge of $40 million ($29 million net of tax) in cost of products sold for fair value adjustment related to the sale of inventory acquired in its acquisition of Signode.     Receivables, net 1,830 1,790      Depreciation and amortization  245 178 Adjusted cash used for operating activities 439 438 (227) (135) Q2 592 620 575 80 94 80 14 14 13
Cost of products sold 2,417 2,466 4,627 4,274 European Beverage 410 405 749 776 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.     Inventories 1,837 1,737      Restructuring and other (41) 29 Interest included in investing activities (4) 6 Three Months Six Months Q3 585 565 81 82 15 12
Depreciation and amortization 123 113 245 178 Three Months Ended June 30, Six Months Ended June 30, European Food 483 514 906 942 (3) In the second quarter and first six months of 2019, the Company recorded net restructuring and other gains of $45 million ($31 million net of tax) and $41 million ($26 million net of tax).  The second quarter included a gain of $41 million arising from a favorable court ruling in a lawsuit brought by one of the Company's Brazilian subsidiaries claiming it was overcharged by the local tax authorities for indirect taxes paid in prior years, and other net gains of $4 million primarily related to asset sales. The first six months of 2019 included gains of $50 million related to the favorable court rulings in Brazil, offset by other net charges of $9 million primarily related to restructuring actions and asset sales. In the second quarter and first six months of 2018, the Company recorded net restructuring and other charges of $16 million ($13 million net of tax) and $29 million ($24 million net of tax) including $19 million and $22 million of transaction costs in connection with its acquisition of Signode.     Prepaid expenses and other current assets 205 330      Pension expense 40 3 Capital expenditures (79) (108) (154) (200) Ended June 30, 2019  Ended June 30, 2019 Q4 595 566 80 82 14 13
Selling and administrative expense 157 159 314 249 2019 2018 2019 2018 Asia Pacific 319 332 640 669 Three Months Ended June 30, Six Months Ended June 30,             Total current assets 4,214 4,155      Pension contributions (9) (10) Adjusted free cash flow $360 $330 $(375) $(335) $2,388 $2,232 $334 $320 $56 $50
Restructuring and other (45) 16 (41) 29 Income from operations                               $ 383 $ 292 $ 645 $ 513 Transit Packaging 592 620 1,161 620 2019 2018 2019 2018 (4) In the second quarter of 2019, the Company recorded a charge of $31 million ($26 million net of tax) arising from a pension plan settlement.  In the first quarter of 2019, the Company recorded a curtailment gain of $14 million ($12 million net of tax) in connection with the closure of a defined pension plan to future accrual for active members.      Stock-based compensation 16 11 Net Sales Segment Income Net Sales Segment Income
Income from operations (1) 383 292 645 513 Intangibles amortization 48 41 97 52      Total reportable segments 2,694 2,719 5,134 4,613 Net income/diluted earnings per share   attributable to Crown Holdings, as reported $137 $1.02 $132 $0.99 $240 $1.78 $222 $1.66 Goodwill and intangible assets, net 6,554 6,741      Working capital changes and other (783) (963) (2)  Amount of depreciation expense included in segment income.
Pension settlements and curtailments 31 17 Fair value adjustment to inventory (1) 40 40 Non-reportable segments (2) 341 327 656 630     Intangibles amortization (1) 48 0.36 41 0.31 97 0.72 52 0.39 (5) In the first quarter of 2018, the Company recorded a charge of $15 million ($10 million net of tax) for net losses arising from its hedge of the U.S. dollar purchase price of its acquisition of Signode.  Also in the first quarter, the Company incurred net charges of $9 million ($7 million net of tax) for pre-acquisition interest carrying costs on borrowings to finance the acquisition. Property, plant and equipment, net 3,761 3,688 (3) Subsequent to amendments to the Company's receivables securitization program during the third quarter of 2018, certain activity that was previously reported as investing activity is now reported as operating activity.  Americas Beverage $(7) $(1) $(18) $(2)
Other pension and postretirement (2) (17) (6) (34) Provision for restructuring and other (45) 16 (41) 29        Total net sales $ 3,035 $ 3,046 $ 5,790 $ 5,243     Fair value adjustment to inventory (2) 40 0.30 40 0.30 Other non-current assets 1,043 776            Net cash used for operating activities (1)  (227) (492) European Beverage (19) (2) (38) (4)
Foreign exchange 1 10 2 28 Segment income $ 386 $ 389 $ 701 $ 634     Restructuring and other  (3) (45) (0.33) 16 0.12 (41) (0.30) 29 0.22 (6) In the first quarter of 2019, the Company recorded a charge of $6 million ($5 million net of tax) for the write off of deferred financing fees in connection with the repayment of a portion of its term loan.             Total $ 15,572 $ 15,360 (4) Interest benefit of cross currency swaps included in investing activities. European Food (28) (3) (63) (7)
Earnings before interest and taxes 353 299 632 519     Pension settlements and curtailments (4) 31 0.23 17 0.13 Cash flows from investing activities Asia Pacific (3) (1) (7) (1)
Interest expense 97 103 195 177 (1) Included in cost of products sold Segment Income        Acquisition costs (5) 24 0.18 (7) In the second quarter and first six months of 2019, the Company recorded income tax benefits of $3 million and $13 million related to the items described above. Also in the second quarter of 2019, the Company recorded a charge of $15 million to settle a tax contingency arising from a transaction that occurred prior to its acquisition of Signode.  In the second quarter and first six months of 2018, the Company recorded income tax benefits of $21 million and $33 million related to the items described above.      Capital expenditures (154) (200) Transit Packaging (18) (3) (43) (6)
Interest income (4) (5) (7) (11)     Loss from early extinguishment of debt (6) 6 0.04 Liabilities and equity      Beneficial interest in transferred receivables 335 Corporate and Non-Reportable (5) 1 (11) 1
Loss from early extinguishment of debt 6 Americas Beverage $ 139 $ 113 $ 252 $ 211     Income taxes (7) 12 0.08 (21) (0.16) 2 0.01 (33) (0.25) (8) In the second quarter and first six months of 2019, the Company recorded noncontrolling interest expense of $14 million and $17 million related to the items described above.  In the second quarter and first six months of 2018, the Company recorded noncontrolling interest benefits of $1 million and $1 million related to the items described above.  Current liabilities      Acquisition of business, net of cash acquired (3,907) $(80) $(9) $(180) $(19)
Income before income taxes 260 201 438 353 European Beverage 60 59 99 114     Noncontrolling interests (8) 14 0.10 (1) (0.01) 17 0.13 (1) (0.01)     Short-term debt $ 135 $ 31      Proceeds from sale of assets 11 5
Provision for income taxes 88 55 136 94 European Food 62 85 110 141 (9) Income tax effects on adjusted net income were calculated using the applicable tax rates of the underlying jurisdictions.     Current maturities of long-term debt 88 84      Other 6 (25)
Equity earnings 2 1 3 1 Asia Pacific 51 47 96 91 Adjusted net income/diluted earnings per share $197 $1.46 $207 $1.55 $338 $2.51 $333 $2.49     Accounts payable and accrued liabilities 3,385 3,414
Net income 174 147 305 260 Transit Packaging 80 94 153 94             Total current liabilities 3,608 3,529            Net cash used for investing activities (137) (3,792)
Net income attributable to noncontrolling interests (37) (15) (65) (38)      Total reportable segments 392 398 710 651 Effective tax rate as reported 33.8% 27.4% 31.1% 26.6%
Net income attributable to Crown Holdings $137 $132 $240 $222 Non-reportable segments (2) 33 31 69 62 Adjusted effective tax rate (9) 25.9% 25.5% 25.9% 25.5% Long-term debt, excluding current maturities 8,549 9,236 Cash flows from financing activities
Corporate and other unallocated items (39) (40) (78) (79) Other non-current liabilities 1,709 1,458      Net change in debt 130 4,246
Earnings per share attributable to Crown Holdings      common shareholders:        Total segment income $ 386 $ 389 $ 701 $ 634      Dividends paid to noncontrolling interests (11) (6)
     Basic    $1.02 $0.99 $1.79 $1.66 Noncontrolling interests 406 353      Common stock repurchased (2) (4)
     Diluted $1.02 $0.99 $1.78 $1.66 (2) Includes the Company's food can and closures businesses in North America, aerosol can businesses in North America and Europe, promotional packaging business in Europe, and tooling and equipment operations in the U.S. and United Kingdom. Crown Holdings shareholders' equity 1,300 784      Debt issue costs (70)
Total equity 1,706 1,137      Other, net (18) (4)
Weighted average common shares outstanding:             Total $ 15,572 $ 15,360
      Basic 133,865,669 133,612,348 133,827,567 133,546,223            Net cash provided by financing activities 99 4,162
      Diluted 134,777,236 133,844,185 134,636,935 133,814,394
Actual common shares outstanding 135,434,877 135,174,989 135,434,877 135,174,989 Effect of exchange rate changes on cash and cash equivalents 3 (6)
(1) On January 1, 2019, the Company adopted new lease accounting guidance resulting in increases in other non-current assets and other non-current liabilities of $220.  Prior period amounts have not been recast and continue to be reported in accordance with accounting guidance in effect for those periods.
(1)  A reconciliation from income from operations to segment income follows. Net change in cash and cash equivalents (262) (128)
Cash and cash equivalents at January 1 659 435
Cash and cash equivalents at June 30 (2) $ 397 $ 307
(1) Adjusted free cash flow is defined by the Company as net cash used for operating activities plus beneficial interest in transferred receivables less capital expenditures and certain other items.  A reconciliation from net cash used for operating activities to adjusted free cash flow for the three and six months ended June 30, 2019 and 2018 follows.
(2) Cash and cash equivalents includes $55 and $9 of restricted cash at June 30, 2019 and 2018.

 

Consolidated Statements of Operations (Unaudited) Consolidated Supplemental Financial Data (Unaudited) Consolidated Supplemental Data (Unaudited) Consolidated Balance Sheets (Condensed & Unaudited) (in millions) Consolidated Statements of Cash Flows (Condensed & Unaudited) (in millions) Three Months EndedJune 30, Six Months EndedJune 30, Consolidated Supplemental Data (Unaudited) (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 multiplying or dividing, as appropriate, the current U.S. dollar results by current year average foreign exchange rates and then multiplying or dividing, as appropriate, those amounts by the applicable prior year average foreign exchange rates. Comparative Results for Transit Packaging Reconciliation of Adjusted EBITDA
(in millions, except share and per share data) (in millions) Segment Information (in millions, except per share data) 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. June 30,     2019 (1) 2018 Six months ended June 30, 2019 2018 2019 2018 2019 2018 (in millions, except per share data)
Assets Net cash from operating activities $439 $259 $(227) $(492) Revenue Segment Income Depreciation (2) June YTD2019 June YTD 2018 Full Year 2018 Twelve Monthsended June 30, 2019
Three Months Ended June 30, Six Months Ended June 30, Net Sales Three Months Ended June 30, Six Months Ended June 30, (1) In the second quarter and first six months of 2019, the Company recorded charges of $47 million ($35 million net of tax) and $94 million ($70 million net of tax) for intangibles arising from acquisitions.  Also in the second quarter and first six months of 2019, the Company recorded charge of $1million ($1 million net of tax) and $3 million ($3 million net of tax) for accelerated depreciation related to the planned shutdown of a steel beverage can operation in Spain.  In the second quarter and first six months of 2018, the Company recorded charges of $41 million ($30 million net of tax) and $52 million ($38 million net of tax) for intangibles amortization. Current assets Cash flows from operating activities Beneficial interest in transferred receivables (3) 160 335 2019 2018 2017 2019 2018 2017 2019 2018 2017 Income from operations $645 $513 $1,096 $1,228
2019 2018 2019 2018 Reconciliation from Income from Operations to Segment Income 2019 2018 2019 2018 Reconciliation from Net Income and Diluted Earnings Per Share to Adjusted Net Income and Adjusted Diluted Earnings Per Share     Cash and cash equivalents $ 342 $ 298      Net income $ 305 $ 260 Acquisition costs 19 22 Impact of Foreign Currency Translation by Segment (1) Q1 $569 $588 $526 $73 $79 $76 $15 $13 $12 Add:
Net sales $3,035 $3,046 $5,790 $5,243 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, provisions for asbestos and restructuring and other, and the impact of fair value adjustments to inventory acquired in an acquisition. Americas Beverage $ 890 $ 848 $ 1,678 $ 1,606 (2) In the second quarter of 2018, the Company recorded a charge of $40 million ($29 million net of tax) in cost of products sold for fair value adjustment related to the sale of inventory acquired in its acquisition of Signode.     Receivables, net 1,830 1,790      Depreciation and amortization  245 178 Adjusted cash used for operating activities 439 438 (227) (135) Q2 592 620 575 80 94 80 14 14 13    Intangibles amortization 97 52 148 193
Cost of products sold 2,417 2,466 4,627 4,274 European Beverage 410 405 749 776 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.     Inventories 1,837 1,737      Restructuring and other (41) 29 Interest included in investing activities (4) 6 Three Months Six Months Q3 585 565 81 82 15 12    Fair value adjustment to inventory 40 40
Depreciation and amortization 123 113 245 178 Three Months Ended June 30, Six Months Ended June 30, European Food 483 514 906 942 (3) In the second quarter and first six months of 2019, the Company recorded net restructuring and other gains of $45 million ($31 million net of tax) and $41 million ($26 million net of tax).  The second quarter included a gain of $41 million arising from a favorable court ruling in a lawsuit brought by one of the Company's Brazilian subsidiaries claiming it was overcharged by the local tax authorities for indirect taxes paid in prior years, and other net gains of $4 million primarily related to asset sales. The first six months of 2019 included gains of $50 million related to the favorable court rulings in Brazil, offset by other net charges of $9 million primarily related to restructuring actions and asset sales. In the second quarter and first six months of 2018, the Company recorded net restructuring and other charges of $16 million ($13 million net of tax) and $29 million ($24 million net of tax) including $19 million and $22 million of transaction costs in connection with its acquisition of Signode.     Prepaid expenses and other current assets 205 330      Pension expense 40 3 Capital expenditures (79) (108) (154) (200) Ended June 30, 2019  Ended June 30, 2019 Q4 595 566 80 82 14 13    Provision for restructuring and other (41) 29 44 (26)
Selling and administrative expense 157 159 314 249 2019 2018 2019 2018 Asia Pacific 319 332 640 669 Three Months Ended June 30, Six Months Ended June 30,             Total current assets 4,214 4,155      Pension contributions (9) (10) Adjusted free cash flow $360 $330 $(375) $(335) $2,388 $2,232 $334 $320 $56 $50 Segment income 701 634 1,328 1,395
Restructuring and other (45) 16 (41) 29 Income from operations                               $ 383 $ 292 $ 645 $ 513 Transit Packaging 592 620 1,161 620 2019 2018 2019 2018 (4) In the second quarter of 2019, the Company recorded a charge of $31 million ($26 million net of tax) arising from a pension plan settlement.  In the first quarter of 2019, the Company recorded a curtailment gain of $14 million ($12 million net of tax) in connection with the closure of a defined pension plan to future accrual for active members.      Stock-based compensation 16 11 Net Sales Segment Income Net Sales Segment Income Other pension and postretirement 6 34 67 39
Income from operations (1) 383 292 645 513 Intangibles amortization 48 41 97 52      Total reportable segments 2,694 2,719 5,134 4,613 Net income/diluted earnings per share   attributable to Crown Holdings, as reported $137 $1.02 $132 $0.99 $240 $1.78 $222 $1.66 Goodwill and intangible assets, net 6,554 6,741      Working capital changes and other (783) (963) (2)  Amount of depreciation expense included in segment income. Depreciation 148 126 277 299
Pension settlements and curtailments 31 17 Fair value adjustment to inventory (1) 40