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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED March 31, 2020
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM  ____  TO ____

COMMISSION FILE NUMBER 000-50189
CROWN HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Pennsylvania
 
 
75-3099507
(State or other jurisdiction of
incorporation or organization)
 
 
(I.R.S. Employer
Identification No.)
 
 
 
 
770 Township Line Road
Yardley
PA
19067
(Address of principal executive offices)
 
 
(Zip Code)
215-698-5100
(registrant’s telephone number, including area code)
____________________
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Title of each class
Trading Symbols
Name of each exchange on which registered
Common Stock $5.00 Par Value
CCK
New York Stock Exchange
7 3/8% Debentures Due 2026
CCK26
New York Stock Exchange
7 1/2% Debentures Due 2096
CCK96
New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one)
Large Accelerated Filer
Accelerated filer
 
 
 
 
Non-accelerated filer
Smaller reporting company
Emerging growth company  
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  
Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2).    Yes      No  

There were 134,675,393 shares of Common Stock outstanding as of April 30, 2020.


Crown Holdings, Inc.


PART I – FINANCIAL INFORMATION

CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions except per share data)
(Unaudited)

 
Three Months Ended
 
March 31,
 
2020
 
2019
Net sales
$
2,757

 
$
2,755

Cost of products sold, excluding depreciation and amortization
2,220

 
2,210

Depreciation and amortization
122

 
122

Selling and administrative expense
162

 
157

Restructuring and other
7

 
4

Income from operations
246

 
262

Loss from early extinguishments of debt

 
6

Other pension and postretirement
31

 
(18
)
Interest expense
80

 
98

Interest income
(4
)
 
(3
)
Foreign exchange
(12
)
 
1

Income before income taxes
151


178

Provision for income taxes
38

 
48

Equity earnings in affiliates
1

 
1

Net income
114


131

Net income attributable to noncontrolling interests
(26
)
 
(28
)
Net income attributable to Crown Holdings
$
88

 
$
103

 
 
 
 
Earnings per common share attributable to Crown Holdings:
 
 
 
Basic
$
0.66

 
$
0.77

Diluted
$
0.65

 
$
0.77


The accompanying notes are an integral part of these consolidated financial statements.


2

Crown Holdings, Inc.



CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In millions)
(Unaudited)

 
Three Months Ended
 
March 31,
 
2020
 
2019
Net income
$
114

 
$
131

 
 
 
 
Other comprehensive (loss) / income, net of tax:
 
 
 
Foreign currency translation adjustments
(319
)
 
59

Pension and other postretirement benefits
257

 
14

Derivatives qualifying as hedges
(34
)
 
12

Total other comprehensive (loss) / income
(96
)
 
85

 
 
 
 
Total comprehensive income
18

 
216

Net income attributable to noncontrolling interests
(26
)
 
(28
)
Translation adjustments attributable to noncontrolling interests
3

 

Derivatives qualifying as hedges attributable to noncontrolling interests
2

 

Comprehensive (loss) / income attributable to Crown Holdings
$
(3
)
 
$
188



The accompanying notes are an integral part of these consolidated financial statements.


3

Crown Holdings, Inc.


CONSOLIDATED BALANCE SHEETS (Condensed)
(In millions)
(Unaudited)

 
March 31,
2020
 
December 31,
2019
Assets
 
 
 
Current assets
 
 
 
Cash and cash equivalents
$
765

 
$
607

Receivables, net
1,554

 
1,528

Inventories
1,668

 
1,626

Prepaid expenses and other current assets
263

 
241

Total current assets
4,250

 
4,002

 
 
 
 
Goodwill
4,249

 
4,430

Intangible assets, net
1,893

 
2,015

Property, plant and equipment, net
3,752

 
3,887

Operating lease right-of-use assets, net
207

 
204

Other non-current assets
1,182

 
967

Total
$
15,533

 
$
15,505

 
 
 
 
Liabilities and equity
 
 
 
Current liabilities
 
 
 
Short-term debt
$
100

 
$
75

Current maturities of long-term debt
78

 
62

Current portion of operating lease liabilities
53

 
51

Accounts payable
2,077

 
2,646

Accrued liabilities
930

 
1,065

Total current liabilities
3,238

 
3,899

 
 
 
 
Long-term debt, excluding current maturities
8,631

 
7,818

Non-current portion of operating lease liabilities
157

 
156

Postretirement and pension liabilities
658

 
683

Other non-current liabilities
796

 
857

Commitments and contingent liabilities (Note I)

 

Noncontrolling interests
389

 
379

Crown Holdings shareholders’ equity
1,664

 
1,713

Total equity
2,053

 
2,092

Total
$
15,533

 
$
15,505


The accompanying notes are an integral part of these consolidated financial statements.


4

Crown Holdings, Inc.


CONSOLIDATED STATEMENTS OF CASH FLOWS (Condensed)
(In millions)
(Unaudited
 
Three Months Ended
 
March 31,
 
2020
 
2019
Cash flows from operating activities
 
 
 
Net income
$
114

 
$
131

Adjustments to reconcile net income to net cash from operating activities:
 
 
 
Depreciation and amortization
122

 
122

Restructuring and other
7

 
4

Pension expense
43

 
(2
)
Pension contributions
(5
)
 
(7
)
Stock-based compensation
10

 
8

Working capital changes and other
(898
)
 
(922
)
Net cash used for operating activities
(607
)
 
(666
)
Cash flows from investing activities
 
 
 
Capital expenditures
(110
)
 
(75
)
Proceeds from sale of property, plant and equipment

 
5

Net investment hedge
14

 
6

Net cash used for investing activities
(96
)
 
(64
)
Cash flows from financing activities
 
 
 
Proceeds from long-term debt
93

 

Payments of long-term debt
(12
)
 
(281
)
Net change in revolving credit facility and short-term debt
872

 
731

Payments of finance leases
(1
)
 
(14
)
Common stock issued
1

 
2

Common stock repurchased
(57
)
 
(1
)
Contributions from noncontrolling interests
2

 

Dividends paid to noncontrolling interests
(11
)
 
(9
)
Foreign exchange derivatives related to debt
(5
)
 
(11
)
Net cash provided by financing activities
882

 
417

Effect of exchange rate changes on cash, cash equivalents and restricted cash
(21
)
 
2

Net change in cash, cash equivalents and restricted cash
158

 
(311
)
Cash, cash equivalents and restricted cash at January 1
663

 
659

Cash, cash equivalents and restricted cash at March
$
821

 
$
348


The accompanying notes are an integral part of these consolidated financial statements.

5

Crown Holdings, Inc.


CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(In millions)
(Unaudited)

 
Crown Holdings, Inc. Shareholders’ Equity
 
 
 
 
 
Common Stock
 
Paid-in Capital
 
Accumulated Earnings
 
Accumulated Other Comprehensive Loss
 
Treasury Stock
 
Total Crown Equity
 
Noncontrolling Interests
 
Total Shareholders' Equity
Balance at January 1, 2019
$
929


$
186


$
3,449


$
(3,374
)

$
(253
)
 
$
937

 
$
349

 
$
1,286

Net income
 
 
 
 
103

 
 
 
 
 
103

 
28

 
131

Other comprehensive income
 
 
 
 
 
 
85

 
 
 
85

 


 
85

Dividends paid to noncontrolling interests
 
 
 
 
 
 
 
 
 
 

 
(9
)
 
(9
)
Restricted stock awarded
 
 
(1
)
 
 
 
 
 
1

 

 
 
 

Stock-based compensation
 
 
8

 
 
 
 
 
 
 
8

 
 
 
8

Common stock issued
 
 
2

 
 
 
 
 
 
 
2

 
 
 
2

Common stock repurchased
 
 
(1
)
 
 
 
 
 
 
 
(1
)
 
 
 
(1
)
Balance at March 31, 2019
$
929

 
$
194

 
$
3,552

 
$
(3,289
)
 
$
(252
)
 
$
1,134

 
$
368

 
$
1,502


Balance at January 1, 2020
$
929

 
$
207

 
$
3,959

 
$
(3,131
)
 
$
(251
)
 
$
1,713

 
$
379

 
$
2,092

Net income
 
 
 
 
88

 
 
 
 
 
88

 
26

 
114

Other comprehensive loss
 
 
 
 
 
 
(91
)
 
 
 
(91
)
 
(5
)
 
(96
)
Dividends paid to noncontrolling interests
 
 
 
 
 
 
 
 
 
 

 
(11
)
 
(11
)
Restricted stock awarded
 
 
(1
)
 
 
 
 
 
1

 

 
 
 

Stock-based compensation
 
 
10

 
 
 
 
 
 
 
10

 
 
 
10

Common stock issued
 
 
1

 
 
 
 
 


 
1

 
 
 
1

Common stock repurchased
 
 
(52
)
 
 
 
 
 
(5
)
 
(57
)
 
 
 
(57
)
Balance at March 31, 2020
$
929

 
$
165

 
$
4,047

 
$
(3,222
)
 
$
(255
)
 
$
1,664

 
$
389

 
$
2,053


The accompanying notes are an integral part of these consolidated financial statements.


6

Crown Holdings, Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In millions, except per share and statistical data)
(Unaudited)


A.
Statement of Information Furnished

The consolidated financial statements include the accounts of Crown Holdings, Inc. and its consolidated subsidiaries (the “Company”). The accompanying unaudited interim consolidated financial statements have been prepared in accordance with Form 10-Q instructions. In the opinion of management, these consolidated financial statements contain all adjustments of a normal and recurring nature necessary for a fair statement of the financial position of the Company as of March 31, 2020 and the results of its operations for the three months ended March 31, 2020 and 2019 and of its cash flows for the three months ended March 31, 2020 and 2019. The results reported in these consolidated financial statements are not necessarily indicative of the results that may be expected for the entire year including the impact of the coronavirus pandemic which cannot be determined at this time. These results have been determined on the basis of accounting principles generally accepted in the United States of America (“GAAP”), the application of which requires management’s utilization of estimates, and actual results may differ materially from the estimates utilized.

Certain information and footnote disclosures normally included in financial statements presented in accordance with GAAP have been condensed or omitted. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. The accompanying consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2019.


B.
Accounting and Reporting Developments

Recently Adopted Accounting Standards
In June 2016, the FASB issued new guidance on the accounting for credit losses on financial instruments. The new standard introduces an approach, based on expected losses, to estimate credit losses on certain types of financial instruments. The new approach to estimating credit losses (referred to as the current expected credit losses model) applies to most financial assets measured at amortized cost and certain other instruments, including trade and other receivables, loans, held-to-maturity debt securities, net investments in operating leases and off-balance-sheet credit exposures. The guidance became effective for the Company on January 1, 2020 and did not have a material impact on the Company's consolidated financial statements.

In August 2018, the FASB issued new guidance which aligns the accounting for implementation costs incurred in a cloud computing arrangement that is a service arrangement (i.e. hosting arrangement) with the guidance on capitalizing costs for internal use software. The Company adopted the guidance on a prospective basis on January 1, 2020. The guidance did not have a material impact on the Company's consolidated financial statements.

Recently Issued Accounting Standards

In December 2019, the FASB issued new guidance to simplify the accounting for income taxes by, among other things, reducing complexity in the interim-period accounting for year-to-date loss limitations and changes in tax laws. The guidance is effective for the Company on January 1, 2021. The Company is currently evaluating the impact of adopting this standard and does not expect the guidance to have a material impact on its consolidated financial statements.

In March 2020, the FASB issued guidance which provides optional expedients and exceptions for applying GAAP to certain contract modifications and hedging relationships that reference London Inter-bank Offered Rate (LIBOR) or another reference rate expected to be discontinued. The guidance is effective upon issuance and can be applied through December 31, 2022. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.


7

Crown Holdings, Inc.




C.
Cash, Cash Equivalents, and Restricted Cash

Cash, cash equivalents, and restricted cash included in the Company's Consolidated Balance Sheets and Statement of Cash Flows were as follows:
 
March 31, 2020
 
December 31, 2019
Cash and cash equivalents
$
765

 
$
607

 
 
 
 
Restricted cash included in prepaid expenses and other current assets
$
55

 
$
50

Restricted cash included in other non-current assets
1

 
6

Total restricted cash
$
56

 
$
56

 
 
 
 
Total cash, cash equivalents and restricted cash
$
821

 
$
663



Amounts included in restricted cash primarily represent amounts required to be segregated by certain of the Company's receivables securitization agreements.


D.
Receivables

 
March 31, 2020
 
December 31, 2019
Accounts receivable
$
1,164

 
$
1,162

Less: allowance for credit losses
(61
)
 
(62
)
Net trade receivables
1,103

 
1,100

Unbilled receivables
245

 
226

Miscellaneous receivables
206

 
202

Receivables, net
$
1,554

 
$
1,528



E.
Inventories

Inventories are stated at the lower of cost or market, with cost principally determined under the first-in first-out ("FIFO") or average cost method.
 
March 31, 2020
 
December 31, 2019
Raw materials and supplies
$
916

 
$
905

Work in process
158

 
151

Finished goods
594

 
570

 
$
1,668

 
$
1,626




8

Crown Holdings, Inc.



F.    Intangible Assets

Gross carrying amounts and accumulated amortization of finite-lived intangible assets by major class were as follows:
    
 
March 31, 2020
 
December 31, 2019
 
Gross
 
Accumulated amortization
 
Net
 
Gross
 
Accumulated amortization
 
Net
Customer relationships
$
1,554

 
$
(347
)
 
$
1,207

 
$
1,621

 
$
(331
)
 
$
1,290

Trade names
535

 
(45
)
 
490

 
541

 
(40
)
 
501

Technology
156

 
(46
)
 
110

 
158

 
(41
)
 
117

Long term supply contracts
120

 
(39
)
 
81

 
150

 
(48
)
 
102

Patents
14

 
(9
)
 
5

 
14

 
(9
)
 
5

 
$
2,379


$
(486
)

$
1,893

 
$
2,484

 
$
(469
)
 
$
2,015



Total amortization expense of intangible assets was $45 and $47 for the three months ended March 31, 2020 and 2019.


G.
Restructuring and Other

The Company recorded restructuring and other charges / (benefits) as follows:
 
Three Months Ended
 
March 31,
 
2020
 
2019
Asset impairments and sales
$
1

 
$
4

Restructuring
3

 
9

Other costs / (income)
3

 
(9
)
 
$
7

 
$
4



For the three months ended March 31, 2020, restructuring included charges related to internal reorganizations within the Transit Packaging division, including headcount reductions.

For the three months ended March 31, 2019, asset impairments and sales included $6 related to a fire at a production facility in Asia and restructuring included a charge of $8 related to headcount reductions in the Company's European Division. Asset impairment and sales also included gains on asset sales related to prior restructuring actions.

For the three months ended March 31, 2019, other income related to gains arising from favorable court rulings related to the recovery of indirect taxes paid in prior years by certain of the Company's Brazilian subsidiaries.

At March 31, 2020, the Company had restructuring accruals of $15, primarily related to current and prior year actions to reduce manufacturing capacity and headcount in its European businesses. The Company expects to pay these amounts over the next twelve months. The Company continues to review its supply and demand profile and long-term plans in its businesses, and it is possible that the Company may record additional restructuring charges in the future.


H.
Asbestos-Related Liabilities

Crown Cork & Seal Company, Inc. (“Crown Cork”) is one of many defendants in a substantial number of lawsuits filed throughout the U.S. by persons alleging bodily injury as a result of exposure to asbestos. These claims arose from the insulation operations of a U.S. company, the majority of whose stock Crown Cork purchased in 1963. Approximately ninety days after the stock purchase, this U.S. company sold its insulation assets and was later merged into Crown Cork.

Prior to 1998, amounts paid to asbestos claimants were covered by a fund made available to Crown Cork under a 1985 settlement with carriers insuring Crown Cork through 1976, when Crown Cork became self-insured. The fund was depleted in 1998 and the Company has no remaining coverage for asbestos-related costs.


9

Crown Holdings, Inc.


In December 2001, the Commonwealth of Pennsylvania enacted legislation that limits the asbestos-related liabilities of Pennsylvania corporations that are successors by corporate merger to companies involved with asbestos. The legislation limits the successor’s liability for asbestos to the acquired company’s asset value adjusted for inflation. Crown Cork has paid significantly more for asbestos-related claims than the acquired company’s adjusted asset value. In November 2004, the legislation was amended to address a Pennsylvania Supreme Court decision (Ieropoli v. AC&S Corporation, et. al., No. 117 EM 2002) which held that the statute violated the Pennsylvania Constitution due to retroactive application. The Company cautions that the limitations of the statute, as amended, are subject to litigation and may not be upheld.

In June 2003, the state of Texas enacted legislation that limits the asbestos-related liabilities in Texas courts of companies such as Crown Cork that allegedly incurred these liabilities because they are successors by corporate merger to companies that had been involved with asbestos. The Texas legislation, which applies to future claims and pending claims, caps asbestos-related liabilities at the total gross value of the predecessor’s assets adjusted for inflation. Crown Cork has paid significantly more for asbestos-related claims than the total adjusted value of its predecessor’s assets.

In October 2010, the Texas Supreme Court held that the Texas legislation was unconstitutional under the Texas Constitution when applied to asbestos-related claims pending against Crown Cork when the legislation was enacted in June 2003. The Company believes that the decision of the Texas Supreme Court is limited to retroactive application of the Texas legislation to asbestos-related cases that were pending against Crown Cork in Texas on June 11, 2003 and therefore, in its accrual, continues to assign no value to claims filed after June 11, 2003.

In recent years, the states of Alabama, Arizona, Arkansas, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Michigan, Mississippi, Nebraska, North Carolina, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Utah, West Virginia, Wisconsin and Wyoming enacted legislation that limits asbestos-related liabilities under state law of companies such as Crown Cork that allegedly incurred these liabilities because they are successors by corporate merger to companies that had been involved with asbestos. The legislation, which applies to future and, with the exception of Arkansas, Georgia, South Carolina, South Dakota, West Virginia and Wyoming, pending claims, caps asbestos-related liabilities at the fair market value of the predecessor's total gross assets adjusted for inflation. Crown Cork has paid significantly more for asbestos-related claims than the total value of its predecessor's assets adjusted for inflation. Crown Cork has integrated the legislation into its claims defense strategy.

The Company further cautions that an adverse ruling in any litigation relating to the constitutionality or applicability to Crown Cork of one or more statutes that limits the asbestos-related liability of alleged defendants like Crown Cork could have a material impact on the Company.

During the three months ended March 31, 2020, the Company paid $1 to settle outstanding claims and had claims activity as follows:
Beginning claims
56,000

New claims
500

Settlements or dismissals
(500
)
Ending claims
56,000



In the fourth quarter of each year, the Company performs an analysis of outstanding claims and categorizes these claims by year of exposure and state filed. As of December 31, 2019, the Company's outstanding claims were:

Claimants alleging first exposure after 1964
16,500

Claimants alleging first exposure before or during 1964 filed in:
 
Texas
13,000

Pennsylvania
1,500

Other states that have enacted asbestos legislation
6,000

Other states
19,000

Total claims outstanding
56,000



The outstanding claims in each period exclude approximately 19,000 inactive claims. Due to the passage of time, the Company considers it unlikely that the plaintiffs in these cases will pursue further action against the Company. The exclusion of these inactive claims had no effect on the calculation of the Company’s accrual as the claims were filed in states, as described above, where the Company’s liability is limited by statute.

10

Crown Holdings, Inc.


With respect to claimants alleging first exposure to asbestos before or during 1964, the Company does not include in its accrual any amounts for settlements in states where the Company’s liability is limited by statute except for certain pending claims in Texas as described earlier.

With respect to post-1964 claims, regardless of the existence of asbestos legislation, the Company does not include in its accrual any amounts for settlement of these claims because of increased difficulty of establishing identification of relevant insulation products as the cause of injury. Given the Company's settlement experience with post-1964 claims, it does not believe that an adverse ruling in the Texas or Pennsylvania asbestos litigation cases, or in any other state that has enacted asbestos legislation, would have a material impact on the Company with respect to such claims.

As of December 31, the percentage of outstanding claims related to claimants alleging serious diseases (primarily mesothelioma and other malignancies) were as follows:
 
2019

 
2018

Total claims
22
%
 
22
%
Pre-1964 claims in states without asbestos legislation
41
%
 
41
%


Crown Cork has entered into arrangements with plaintiffs’ counsel in certain jurisdictions with respect to claims which are not yet filed, or asserted, against it. However, Crown Cork expects claims under these arrangements to be filed or asserted against Crown Cork in the future. The projected value of these claims is included in the Company’s estimated liability as of March 31, 2020.

As of March 31, 2020, the Company’s accrual for pending and future asbestos-related claims and related legal costs was $270, including $227 for unasserted claims. The Company determines its accrual without limitation to a specific time period.

It is reasonably possible that the actual loss could be in excess of the Company’s accrual. However, the Company is unable to estimate the reasonably possible loss in excess of its accrual due to uncertainty in the following assumptions that underlie the Company’s accrual and the possibility of losses in excess of such accrual: the amount of damages sought by the claimant (which was not specified for approximately 81% of the claims outstanding at the end of 2019), the Company and claimant’s willingness to negotiate a settlement, the terms of settlements of other defendants with asbestos-related liabilities, the bankruptcy filings of other defendants (which may result in additional claims and higher settlements for non-bankrupt defendants), the nature of pending and future claims (including the seriousness of alleged disease,
whether claimants allege first exposure to asbestos before or during 1964 and the claimant’s ability to demonstrate the alleged link to Crown Cork), the volatility of the litigation environment, the defense strategies available to the Company, the level of future claims, the rate of receipt of claims, the jurisdiction in which claims are filed, and the effect of state asbestos legislation (including the validity and applicability of the Pennsylvania legislation to non-Pennsylvania jurisdictions, where the substantial majority of the Company’s asbestos cases are filed).


I.
Commitments and Contingent Liabilities

The Company, along with others in most cases, has been identified by the U.S. Environmental Protection Agency or a comparable state environmental agency as a Potentially Responsible Party (“PRP”) at a number of sites and has recorded aggregate accruals of $8 for its share of estimated future remediation costs at these sites. The Company has been identified as having either directly or indirectly disposed of commercial or industrial waste at the sites subject to the accrual, and where appropriate and supported by available information, generally has agreed to be responsible for a percentage of future remediation costs based on an estimated volume of materials disposed in proportion to the total materials disposed at each site. The Company has not had monetary sanctions imposed nor has the Company been notified of any potential monetary sanctions at any of the sites.

The Company has also recorded aggregate accruals of $6 for remediation activities at various worldwide locations that are owned by the Company and for which the Company is not a member of a PRP group. Although the Company believes
its accruals are adequate to cover its portion of future remediation costs, there can be no assurance that the ultimate payments will not exceed the amount of the Company’s accruals and will not have a material effect on its results of operations, financial position and cash flow. Any possible loss or range of potential loss that may be incurred in excess of the recorded accruals cannot be estimated.


11

Crown Holdings, Inc.


In March 2015, the Bundeskartellamt, or German Federal Cartel Office (“FCO”), conducted unannounced inspections of the premises of several metal packaging manufacturers, including a German subsidiary of the Company. The local court order authorizing the inspection cited FCO suspicions of anti-competitive agreements in the German market for the supply of metal packaging products.  The Company conducted an internal investigation into the matter and discovered instances of inappropriate conduct by certain employees of German subsidiaries of the Company. The Company cooperated with the FCO and submitted a leniency application with the FCO which disclosed the findings of its internal investigation to date.  In April 2018, the FCO discontinued its national investigation and referred the matter to the European Commission (the “Commission”). Following the referral, Commission officials conducted unannounced inspections of the premises of several metal packaging manufacturers, including Company subsidiaries in Germany, France and the United Kingdom. 

The Commission's investigation is ongoing and, to date, the Commission has not officially charged the Company or any of its subsidiaries with violations of competition law.  The Company is cooperating with the Commission and submitted a leniency application with the Commission with respect to the findings of the investigation in Germany referenced above.  This application may lead to the reduction of possible future penalties. At this stage of the investigation the Company believes that a loss is probable but is unable to predict the ultimate outcome of the Commission’s investigation and is unable to estimate the loss or possible range of losses that could be incurred, and has therefore not recorded a charge in connection with the actions by the Commission.  If the Commission finds that the Company or any of its subsidiaries violated competition law, fines levied by the Commission could be material to the Company's operating results and cash flows for the periods in which they are resolved or become reasonably estimable.

In March 2017, U.S. Customs and Border Protection (“CBP”) at the Port of Milwaukee issued a penalty notification alleging that certain of the Company’s subsidiaries intentionally misclassified the importation of certain goods into the U.S. during the period 2004-2009. CBP initially assessed a penalty of $18 and subsequently mitigated to $6. The Company has acknowledged to CBP that the goods were misclassified and has paid all related duties. The Company has asserted that the misclassification was unintentional and disputes the penalty assessment. At the present time, based on the information available, the Company does not believe that a loss for the alleged intentional misclassification is probable. There can be no assurance the Company will be successful in contesting the assessed penalty.

The Company and its subsidiaries are also subject to various other lawsuits and claims with respect to governmental, labor, environmental, securities, vendor and other matters arising out of the Company’s normal course of business. While the impact on future financial results is not subject to reasonable estimation because considerable uncertainty exists, management believes that the ultimate liabilities resulting from such lawsuits and claims will not materially affect the Company’s consolidated earnings, financial position or cash flow.

The Company has various commitments to purchase materials, supplies and utilities as part of the ordinary course of business. The Company’s basic raw materials for its products are steel and aluminum, both of which are purchased from multiple sources. The Company is subject to fluctuations in the cost of these raw materials (including in connection with tariffs recently imposed in the U.S., which may increase costs) and has periodically adjusted its selling prices to reflect these movements. There can be no assurance that the Company will be able to fully recover any increases or fluctuations in raw material costs from its customers. The Company also has commitments for standby letters of credit and for purchases of capital assets.

At March 31, 2020, the Company was party to certain indemnification agreements covering environmental remediation, lease payments and other potential costs associated with properties sold or businesses divested. The Company accrues for costs related to these items when it is probable that a liability has been incurred and the amount can be reasonably estimated.
 

J.
Derivative and Other Financial Instruments

Fair Value Measurements

Under GAAP a framework exists for measuring fair value, providing a three-tier hierarchy of pricing inputs used to report assets and liabilities that are adjusted to fair value. Level 1 includes inputs such as quoted prices which are available in active markets for identical assets or liabilities as of the report date. Level 2 includes inputs other than those available in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3 includes unobservable pricing inputs that are not corroborated by market data or other objective sources. The Company has no recurring items valued using Level 3 inputs other than certain pension plan assets.


12

Crown Holdings, Inc.


The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of assets and liabilities measured at fair value and their placement within the fair value hierarchy.

The Company applies a market approach to value its commodity price hedge contracts. Prices from observable markets are used to develop the fair value of these financial instruments and they are reported under Level 2. The Company uses an income approach to value its foreign exchange forward contracts. These contracts are valued using a discounted cash flow model that calculates the present value of future cash flows under the terms of the contracts using market information as of the reporting date, such as foreign exchange spot and forward rates, and are reported under Level 2 of the fair value hierarchy.

Fair value disclosures for financial assets and liabilities that were accounted for at fair value on a recurring basis are provided later in this note. In addition, see Note K for fair value disclosures related to debt.

Derivative Financial Instruments

In the normal course of business the Company is subject to risk from adverse fluctuations in currency exchange rates, interest rates and commodity prices. The Company manages these risks through a program that includes the use of derivative financial instruments, primarily swaps and forwards. Counterparties to these contracts are major financial institutions. The Company is exposed to credit loss in the event of nonperformance by these counterparties. The Company does not use derivative instruments for trading or speculative purposes.

The Company’s objective in managing exposure to market and interest rate risk is to limit the impact on earnings and cash flow. The extent to which the Company uses such instruments is dependent upon its access to these contracts in the financial markets and its success using other methods, such as netting exposures in the same currencies to mitigate foreign exchange risk, using sales agreements that permit the pass-through of commodity price and foreign exchange rate risk to customers and borrowing both fixed and floating debt instruments to manage interest rate risk.

For derivative financial instruments accounted for in hedging relationships, the Company formally designates and documents, at inception, the financial instrument as a hedge of a specific underlying exposure, the risk management objective and the manner in which effectiveness will be assessed. The Company formally assesses, both at inception and at least quarterly thereafter, whether the hedging relationships are effective in offsetting changes in fair value or cash flows of the related underlying exposures. When a hedge no longer qualifies for hedge accounting, the change in fair value from the date of the last effectiveness test is recognized in earnings. Any gain or loss which has accumulated in other comprehensive income at the date of the last effectiveness test is reclassified into earnings at the same time of the underlying exposure.

Cash Flow Hedges

The Company designates certain derivative financial instruments as cash flow hedges. No components of the hedging instruments are excluded from the assessment of hedge effectiveness. Changes in fair value of outstanding derivatives accounted for as cash flow hedges are recorded in accumulated other comprehensive income until earnings are impacted by the hedged transaction. Classification of the gain or loss in the Consolidated Statements of Operations upon reclassification from accumulated comprehensive income is the same as that of the underlying exposure. Contracts outstanding at March 31, 2020 mature between one and thirty months.

When the Company discontinues hedge accounting because it is no longer probable that an anticipated transaction will occur in the originally specified period, changes to the fair value accumulated in other comprehensive income are recognized immediately in earnings.

The Company uses commodity forward contracts to hedge anticipated purchases of various commodities, including aluminum, fuel oil and natural gas, and these exposures are hedged by a central treasury unit.

The Company also designates certain foreign exchange contracts as cash flow hedges of anticipated foreign currency denominated sales or purchases. The Company manages these risks at the operating unit level. Foreign currency risk is generally hedged with the related commodity price risk.

The Company also uses interest rate swaps to convert interest on floating rate debt to a fixed-rate. 



13

Crown Holdings, Inc.


The following tables set forth financial information about the impact on other comprehensive income ("OCI"), accumulated other comprehensive income (“AOCI”) and earnings from changes in the fair value of derivative instruments.

 
 
 Amount of gain/(loss)
 
 
 
 
recognized in OCI
 
 
 
 
Three Months Ended
 
 
 
 
March 31,
 
 
Derivatives in cash flow hedges
 
2020
 
2019
 
 
Foreign exchange
 
$
1

 
$
(4
)
 
 
Interest Rate
 
(1
)
 

 
 
Commodities
 
(39
)
 
10

 
 
 
 
$
(39
)
 
$
6

 
 
 
 
 
 
 
 
 
 
 
Amount of gain/
 
 
 
 
(loss) reclassified from
 
 
 
 
AOCI into income
 
 
 
 
Three Months Ended
 
 
 
 
March 31,
 
Affected line items in the
Derivatives in cash flow hedges
 
2020
 
2019
 
Statement of Operations
Foreign exchange
 
$
(1
)
 
$
(1
)
 
Net sales
Commodities
 
3

 
3

 
Net sales
Foreign exchange
 
(1
)
 

 
Cost of products sold
Commodities
 
(10
)
 
(10
)
 
Cost of products sold
 
 
(9
)
 
(8
)
 
Income before taxes
 
 
2

 
2

 
Provision for income taxes
Total reclassified
 
$
(7
)
 
$
(6
)
 
Net income

For the twelve-month period ending March 31, 2021, a net loss of $51 ($41, net of tax) is expected to be reclassified to earnings for commodity and foreign exchange contracts. No amounts were reclassified during the three months ended March 31, 2020 and 2019 in connection with anticipated transactions that were no longer considered probable.

Fair Value Hedges and Contracts Not Designated as Hedges

The Company designates certain derivative financial instruments as fair value hedges of recognized foreign-denominated assets and liabilities, generally trade accounts receivable and payable and unrecognized firm commitments. The notional values and maturity dates of the derivative instruments coincide with those of the hedged items. Changes in fair value of the derivative financial instruments, excluding time value, are offset by changes in fair value of the related hedged items.

For the three months ended March 31, 2020 and 2019, the Company recorded a loss of less than $1 and a gain of less than $1 from foreign exchange contracts designated as fair value hedges. These adjustments were reported within foreign exchange in the Consolidated Statements of Operations.

Certain derivative financial instruments, including foreign exchange contracts related to intercompany debt, were not designated or did not quality for hedge accounting; however, they are effective economic hedges as the changes in their fair value, except for time value, are offset by changes arising from re-measurement of the related hedged items. The Company’s primary use of these derivative instruments is to offset the earnings impact that fluctuations in foreign exchange rates have on certain monetary assets and liabilities denominated in nonfunctional currencies. Changes in fair value of these derivative instruments are immediately recognized in earnings as foreign exchange adjustments.

The following table sets forth the impact on earnings from derivatives not designated as hedges.

14

Crown Holdings, Inc.


 
 
 Pre-tax amount of gain/
 
 
 
 
(loss) recognized in
 
 
 
 
income on derivative
 
 
 
 
Three Months Ended
 
 
 
 
March 31,
 
Affected line item in the
Derivatives not designated as hedges
 
2020
 
2019
 
Statement of Operations
Foreign exchange
 
$
(1
)
 
$
(1
)
 
Net sales
Foreign exchange
 
1

 
1

 
Cost of products sold
Foreign exchange
 
6

 
(15
)
 
Foreign exchange
 
 
$
6

 
$
(15
)
 
 


Net Investment Hedges

The Company designates certain debt and derivative instruments as net investment hedges to manage foreign currency risk relating to net investments in subsidiaries denominated in foreign currencies and reduce the variability in the functional currency equivalent cash flows.

During the three months ended March 31, 2020 and 2019, the Company recorded a gain of $26 ($26, net of tax) and a gain of $28 ($28, net of tax) in other comprehensive income for certain debt instruments that are designated as hedges of its net investment in a euro-based subsidiary. As of March 31, 2020 a cumulative loss of $6 (gain of $17, net of tax) and as of December 31, 2019, a cumulative loss of $32 ($9, net of tax) were recognized in accumulated other comprehensive income related to these net investment hedges and the carrying amount of the hedged net investment was 1,138 ($1,253 at March 31, 2020).

The following tables set forth the impact on OCI from changes in the fair value of derivative instruments designated as net investment hedges.
 
 
Amount of gain/(loss)
 
 
recognized in OCI
 
 
Three months ended
 
 
March 31,
Derivatives designated as net investment hedges
 
2020
 
2019
Foreign exchange
 
$
61

 
$
26



Gains and losses representing components excluded from the assessment of effectiveness on derivatives designated as net investment hedges are recognized in accumulated other comprehensive income.

Gains or losses on net investment hedges remain in accumulated other comprehensive income until disposal of the underlying assets.

Fair Values of Derivative Financial Instruments and Valuation Hierarchy

The following table sets forth the Company's financial assets and liabilities that were accounted for at fair value on a recurring basis as of March 31, 2020 and December 31, 2019, respectively. The fair values of these financial instruments were reported under Level 2 of the fair value hierarchy.










15

Crown Holdings, Inc.


 
 
Balance Sheet classification
 
March 31,
2020
 
December 31, 2019
 
Balance Sheet classification
 
March 31,
2020
 
December 31, 2019
Derivatives designated as hedging instruments
 
 
 
 
 
 
 
 
 
 
Foreign exchange contracts cash flow
 
Other current assets
 
$
10

 
$
10

 
Accrued liabilities
 
$
11

 
$
15

 
 
Other non-current assets
 
1

 
1

 
Other non-current liabilities
 

 
1

Foreign exchange contracts fair value
 
Other current assets
 
15

 
1

 
Accrued liabilities
 
2

 
3

Commodities contracts cash flow
 
Other current assets
 
17

 
11

 
Accrued liabilities
 
67

 
21

 
 
Other non-current assets
 
1

 

 
Other non-current liabilities
 
4

 

Interest rate contracts cash flow
 
Other non-current assets
 

 

 
Other non-current liabilities
 
3

 
1

Net investment hedge
 
Other non-current assets
 
128

 
51

 
Other non-current liabilities
 

 
2

 
 
$
172

 
$
74

 
 
 
$
87

 
$
43

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance Sheet classification
 
March 31,
2020
 
December 31, 2019
 
Balance Sheet classification
 
March 31,
2020
 
December 31, 2019
Derivatives not designated as hedging instruments
 
 
 
 
 
 
 
 
 
 
Foreign exchange contracts
 
Other current assets
 
$
26

 
$
7

 
Accrued liabilities
 
$
15

 
$
5

 
 
Other non-current assets
 
2

 
2

 
Other non-current liabilities
 
1

 
1

 
 
$
28

 
$
9

 
 
 
$
16

 
$
6

 
 
 
 
 
 
 
 
 
 
 
 
 
Total derivatives
 
 
 
$
200

 
$
83

 
 
 
$
103

 
$
49



Fair Value Hedge Carrying Amounts

 
 
Carrying amount of the hedged
 
 
assets/(liabilities)
 
 
March 31,
2020
 
December 31,
2019
Line item in the Balance Sheet in which the hedged item is included
 
 
Receivables, net
 
11

 
12

Accounts payable
 
(90
)
 
(83
)

As of March 31, 2020, the cumulative amounts of fair value hedging adjustments included in the carrying amount of the hedge assets and liabilities were a gain of $13. As of December 31, 2019, the cumulative amounts of fair value hedging adjustments included in the carrying amount of the hedge assets and liabilities were a loss of $2.









16

Crown Holdings, Inc.


Offsetting of Derivative Assets and Liabilities

Certain derivative financial instruments are subject to agreements with counterparties similar to master netting arrangements and are eligible for offset. The Company has made an accounting policy election not to offset the fair values of these instruments within the statement of financial position. In the table below, the aggregate fair values of the Company's derivative assets and liabilities are presented on both a gross and net basis, where appropriate.

 
Gross amounts recognized in the Balance Sheet
Gross amounts not offset in the Balance Sheet
Net amount
Balance at March 31, 2020
 
 
 
Derivative assets
$200
$21
$179
Derivative liabilities
103
21
82
 
 
 
 
Balance at December 31, 2019
 
 
 
Derivative assets
83
16
67
Derivative liabilities
49
16
33

    
Notional Values of Outstanding Derivative Instruments

The aggregate U.S. dollar-equivalent notional values of outstanding derivative instruments in the Consolidated Balance Sheets at March 31, 2020 and December 31, 2019 were:
 
March 31, 2020
 
December 31, 2019
Derivatives designated as cash flow hedges:
 
 
 
Foreign exchange
$
807

 
$
1,030

Commodities
356

 
334

Interest rate
200

 
200

Derivatives designated as fair value hedges:

 

Foreign exchange
158

 
142

Derivatives designated as net investment hedges:
 
 

Foreign exchange
1,075

 
1,075

Derivatives not designated as hedges:
 
 
 
Foreign exchange
921

 
1,017




17

Crown Holdings, Inc.



K.
Debt

The Company's outstanding debt was as follows:
 
March 31, 2020
 
December 31, 2019
 
Principal
 
Carrying
 
Principal
 
Carrying
 
outstanding
 
amount
 
outstanding
 
amount
Short-term debt
$
100

 
$
100

 
$
75

 
$
75

 

 

 
 
 
 
Long-term debt

 

 
 
 
 
Senior secured borrowings:

 

 
 
 
 
Revolving credit facilities
828

 
828

 

 

Term loan facilities

 


 
 
 
 
U.S. dollar at LIBOR + 1.5% due 2024
1,093

 
1,086

 
1,100

 
1,094

Euro at EURIBOR + 1.5% due 20241
492

 
492

 
505

 
504

Senior notes and debentures:

 

 
 
 
 
€650 at 4.0% due 2022
715

 
711

 
729

 
725

U. S. dollar at 4.50% due 2023
1,000

 
996

 
1,000

 
995

€335 at 2.25% due 2023
369

 
365

 
376

 
372

€500 at 0.75% due 2023
605

 
600

 
617

 
610

€600 at 2.625% due 2024
661

 
656

 
673

 
668

€600 at 3.375% due 2025
661

 
656

 
673

 
667

U.S. dollar at 4.25% due 2026
400

 
395

 
400

 
395

U.S. dollar at 4.75% due 2026
875

 
863

 
875

 
863

U.S. dollar at 7.375% due 2026
350

 
348

 
350

 
348

€500 at 2.875% due 2026
550

 
543

 
561

 
554

U.S. dollar at 7.50% due 2096
40

 
40

 
40

 
40

Other indebtedness in various currencies
130

 
130

 
45

 
45

Total long-term debt
8,769

 
8,709

 
7,944

 
7,880

Less current maturities
(78
)
 
(78
)
 
(62
)
 
(62
)
Total long-term debt, less current maturities
$
8,691

 
$
8,631

 
$
7,882

 
$
7,818



(1) 447 and 450 at March 31, 2020 and December 31, 2019
 
The estimated fair value of the Company’s long-term borrowings, using a market approach incorporating Level 2 inputs such as quoted market prices for the same or similar issues, was $8,792 at March 31, 2020 and $8,410 at December 31, 2019.


L.
Pension and Other Postretirement Benefits

The components of net periodic pension and other postretirement benefits costs for the three months ended March 31, 2020 and 2019 were as follows:
 
Three Months Ended
 
March 31,
Pension benefits – U.S. plans
2020
 
2019
Service cost
$
5

 
$
5

Interest cost
10

 
13

Expected return on plan assets
(18
)
 
(18
)
Recognized net loss
14

 
14

Net periodic cost
$
11

 
$
14



18

Crown Holdings, Inc.


 
Three Months Ended
 
March 31,
Pension benefits – Non-U.S. plans
2020
 
2019
Service cost
$
3

 
$
4

Interest cost
14

 
19

Expected return on plan assets
(31
)
 
(35
)
Curtailment gain

 
(14
)
Settlement loss
37

 

Recognized net loss
9

 
10

Net periodic cost / (benefit)
$
32

 
$
(16
)


 
Three Months Ended
 
March 31,
Other postretirement benefits
2020
 
2019
Interest cost
1

 
1

Recognized prior service credit
(6
)
 
(9
)
Recognized net loss
1

 
1

Net periodic benefit
$
(4
)
 
$
(7
)


In the three months ended March 31, 2020, the Company recorded settlement charges related to the payment of lump sum buy-outs to settle certain non-U.S. pension obligations using plan assets. The Company may incur additional settlement charges in 2020.

In the three months ended March 31, 2019, the Company recorded a curtailment gain to recognize prior service credits that were previously recorded in accumulated other comprehensive income in connection with the closure of a non-U.S. defined benefit pension plan.

The components of net periodic cost / (benefit) other than the service cost component are included in other pension and postretirement in the Consolidated Statement of Operations.

The following table provides information about amounts reclassified from accumulated other comprehensive income.

 
 
Three Months Ended
 
 
Details about accumulated other
 
March 31,
 
Affected line item in the
comprehensive income components
 
2020
 
2019
 
statement of operations
Actuarial losses
 
$
24

 
$
25

 
Other pension and postretirement
Settlements
 
37

 

 
Other pension and postretirement
Prior service credit
 
(6
)
 
(9
)
 
Other pension and postretirement
Curtailments
 

 
(14
)
 
Other pension and postretirement
 
 
55

 
2

 
Income before taxes
 
 
(4
)
 
(1
)
 
Provision for income taxes
Total reclassified
 
$
51

 
$
1

 
Net income



19

Crown Holdings, Inc.



M.
Accumulated Other Comprehensive Income

The following table provides information about the changes in each component of accumulated other comprehensive income.
 
 
Defined benefit plans
 
Foreign currency translation
 
Gains and losses on cash flow hedges
 
Total
Balance at January 1, 2019
 
$
(1,533
)
 
$
(1,817
)
 
$
(24
)
 
$
(3,374
)
Other comprehensive income before reclassifications
13

 
59

 
6

 
78

Amounts reclassified from accumulated other comprehensive income
1

 

 
6

 
7

Other comprehensive income
 
14

 
59

 
12

 
85

Balance at March 31, 2019
 
$
(1,519
)
 
$
(1,758
)
 
$
(12
)
 
$
(3,289
)
 
 
 
 
 
 
 
 
 
Balance at January 1, 2020
 
$
(1,449
)
 
$
(1,668
)
 
$
(14
)
 
$
(3,131
)
Other comprehensive income / (loss) before reclassifications
206

 
(316
)
 
(39
)
 
(149
)
Amounts reclassified from accumulated other comprehensive income
51

 

 
7

 
58

Other comprehensive income / (loss)
 
257

 
(316
)
 
(32
)
 
(91
)
Balance at March 31, 2020
 
$
(1,192
)
 
$
(1,984
)
 
$
(46
)
 
$
(3,222
)


See Note J and Note L for further details of amounts related to cash flow hedges and defined benefit plans.


N.
Stock-Based Compensation

A summary of restricted and deferred stock transactions during the three months ended March 31, 2020 is as follows:

 
Number of shares
Non-vested stock awards outstanding at January 1, 2020
2,102,654

Awarded:

Time-vesting shares
68,824

Performance-based shares
161,426

Released:

Time-vesting shares
(82,427
)
Performance-based shares
(163,458
)
Forfeitures:
 
       Time-vesting shares
(47,700
)
Performance-based shares

Non-vested stock awards outstanding at March 31, 2020
2,039,319



The performance-based share awards are subject to either a market condition or a performance condition. For awards subject to a market condition, the performance metric is the Company's total shareholder return, which includes share price appreciation and dividends paid during the three-year term of the award, measured against a peer group of companies. These awards cliff vest at the end of three years. The number of performance-based shares that will ultimately vest is based on the level of market performance achieved, ranging between 0% and 200% of the shares originally awarded, and are settled in stock.

For awards subject to a performance condition, the performance metric is the Company's average return on invested capital over the three-year term. These awards cliff vest at the end of three years. The number of performance-based shares that will ultimately vest is based on the level of performance achieved, ranging between 0% and 200% of the shares originally awarded, and are settled in stock.

20

Crown Holdings, Inc.



The time-vesting restricted and deferred stock awards vest ratably over three to five years.

The weighted average grant-date fair values of awards issued during the three months ended March 31, 2020 were $70.31 for the time-vesting stock awards and $72.47 for the performance-based stock awards.

The fair value of the performance-based shares subject to a market condition awarded in 2020 was calculated using a Monte Carlo valuation model, including a weighted average stock price volatility of 22.0%, an expected term of three years, and a weighted average risk-free interest rate of 1.60%.

As of March 31, 2020, unrecognized compensation cost related to outstanding non-vested stock awards was $70. The weighted average period over which the expense is expected to be recognized is 2.83 years. The aggregate market value of the shares released on the vesting dates was $12 for the three months ended March 31, 2020.


O.     Revenue

For the three months ended March 31, 2020 and 2019, the Company recognized revenue as follows:
 
Three Months Ended
 
March 31,
 
2020
 
2019
Revenue recognized over time
$
1,475

 
$
1,365

Revenue recognized at a point in time
1,282

 
1,390

Total revenue
$
2,757

 
$
2,755


See Note Q for further disaggregation of the Company's revenue.
The Company has applied the practical expedient to exclude disclosure of remaining performance obligations as its binding orders typically have a term of one year or less.
Contract Assets and Contract Liabilities
Contract assets and liabilities are reported in a net position on a contract-by-contract basis. Net contract assets were as follows:
 
March 31, 2020
 
December 31, 2019
Contract assets included in prepaid and other current assets
$
32

 
$
30

Contract liabilities included in accrued liabilities
(4
)
 
(5
)
Net contract asset
$
28

 
$
25



Contract assets at March 31, 2020 primarily relates to revenue recognized for customized work-in-process inventory in the Company's equipment business and European three-piece food can product businesses.

During the three months ended March 31, 2020, the Company recognized revenue of $1 related to contract liabilities at December 31, 2019 for performance obligations satisfied during the period.


21

Crown Holdings, Inc.



P.
Earnings Per Share

The following table summarizes the computations of basic and diluted earnings per share attributable to the Company.
 
Three Months Ended
 
March 31,
 
2020
 
2019
Net income attributable to Crown Holdings
$
88

 
$
103

Weighted average shares outstanding:
 
 
 
Basic
134.1

 
133.8

Dilutive restricted stock
0.9

 
0.6

Diluted
135.0

 
134.4

Basic earnings per share
$
0.66

 
$
0.77

Diluted earnings per share
$
0.65

 
$
0.77



For the three months ended March 31, 2020 and 2019, 0.4 million and 0.2 million contingently issuable common shares were excluded from the computation of diluted earnings per share because the effect would be anti-dilutive.


Q.
Segment Information

The Company evaluates performance and allocates resources based on segment income, which is not a defined term under GAAP. The Company defines segment income 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.

Segment income should not be considered in isolation or as a substitute for net income prepared in accordance with GAAP and may not be comparable to calculations of similarly titled measures by other companies.     

The tables below present information about the Company's operating segments.

 
External Sales
 
Three Months Ended
 
March 31,
 
2020
 
2019
Americas Beverage
$
871

 
$
788

European Beverage
346

 
339

European Food
402

 
423

Asia Pacific
301

 
321

Transit Packaging
522

 
569

Total reportable segments
2,442


2,440

Non-reportable segments
315

 
315

Total
$
2,757

 
$
2,755



The primary sources of revenue included in non-reportable segments are the Company's food can and closures business in North America, aerosol can businesses in North America and Europe, its promotional packaging business in Europe and its tooling and equipment operations in the U.S. and U.K.


22

Crown Holdings, Inc.


 
Intersegment Sales
 
Three Months Ended
 
March 31,
 
2020
 
2019
Americas Beverage
$
6

 
$
4

European Beverage
1

 
1

European Food
21

 
18

Transit Packaging
4

 
3

Total reportable segments
32


26

Non-reportable segments
29

 
26

Total
$
61

 
$
52



Intersegment sales primarily include sales of ends and components used to manufacture cans, such as printed and coated metal, as well as parts and equipment used in the manufacturing process.
 
Segment Income
 
Three Months Ended
 
March 31,
 
2020
 
2019
Americas Beverage
$
134

 
$
113

European Beverage
39

 
39

European Food
33

 
48

Asia Pacific
45

 
45

Transit Packaging
66

 
73

Total reportable segments
$
317


$
318



A reconciliation of segment income of reportable segments to income before income taxes is as follows:
 
Three Months Ended
 
March 31,
 
2020
 
2019
Segment income of reportable segments
$
317

 
$
318

Segment income of non-reportable segments
19

 
36

Corporate and unallocated items
(38
)
 
(39
)
Restructuring and other
(7
)
 
(4
)
Amortization of intangibles
(45
)
 
(47
)
Accelerated depreciation

 
(2
)
Other pension and postretirement
(31
)
 
18

Loss from early extinguishments of debt

 
(6
)
Interest expense
(80
)
 
(98
)
Interest income
4

 
3

Foreign exchange
12

 
(1
)
Income before income taxes
$
151

 
$
178



For the three months ended March 31, 2020, intercompany profits of less than $1 were eliminated within segment income of non-reportable segments.

For the three months ended March 31, 2019, intercompany profits of $1 were eliminated within segment income of non-reportable segments.

Corporate and unallocated items includes corporate and division administrative costs, technology costs, and unallocated items such as stock-based compensation.

23

Crown Holdings, Inc.


PART I - FINANCIAL INFORMATION

Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations
(dollars in millions)

Introduction

The following discussion presents management's analysis of the results of operations for the three months ended March 31, 2020 compared to 2019 and changes in financial condition and liquidity from December 31, 2019. This discussion should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2019, along with the consolidated financial statements and related notes included in and referred to within this report.

Business Strategy and Trends

The Company's strategy is to grow its businesses in targeted growth markets, while improving operations and results in more mature markets through disciplined pricing, cost control and careful capital allocation.

The Company's global beverage can business continues to be a major strategic focus for organic growth. Beverage cans are the world’s most sustainable and recycled beverage packaging and continue to gain market share in new beverage product launches. The Company continues to drive brand differentiation by increasing its ability to offer multiple product sizes.

For several years, global industry demand for beverage cans has been growing. After many years of relatively flat volumes, beverage can growth in North America has accelerated mainly due to the outsized portion of new beverage products being introduced in cans versus other packaging formats. In addition, markets such as Brazil, Europe and Southeast Asia have also experienced higher volumes and market expansion. While the Company expects beverage can demand to continue to grow in the coming years, the impact of the coronavirus pandemic is expected to weaken demand in the near term in certain areas such as Brazil, Mexico and Southeast Asia.

In addition to its beverage can operations, the Company continues to generate strong returns on invested capital and significant cash flow from its non-beverage can operations including its global food can and transit packaging businesses. Due to the impact of the coronavirus pandemic, the Company expects lower demand in several of the industries served by its transit packaging businesses.

The Company's primary capital allocation focus will be to reduce leverage, as was successfully accomplished following previous acquisitions, and begin to return capital to its shareholders. In November 2019, the Company announced a Board-led review of the Company's portfolio and capital allocation, which is ongoing.

In direct response to the coronavirus pandemic, the Company has taken specific actions to ensure the safety of its employees.  Following the implementation of travel and visitor restrictions in February, the Company continues to update its policies as new information becomes available.  The Company has increased safety measures in its manufacturing facilities to protect the safety of its employees and the products they produce.  In addition, as many employees as possible are working remotely.

The Company’s products are a vital part of the support system to its customers and consumers.  In addition to manufacturing containers that provide protection for food and beverages, the Company also produces closures for baby food, aerosol containers for cleaning and sanitizing products and numerous other products that provide for the safe and secure transportation of goods in transit. 

The Company is working to keep its manufacturing facilities around the world operational and equipped with the resources required to meet continually evolving customer demand by delivering high quality products in a safe and timely manner.  The Company is actively monitoring and managing supply chain challenges, including coordinating with its suppliers to identify and mitigate potential areas of risk and manage inventories.






24

Crown Holdings, Inc.


Item 2. Management's Discussion and Analysis (Continued)


Results of Operations

In assessing performance, the key performance measure used by the Company is segment income, a non-GAAP measure generally 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.

The foreign currency translation impacts referred to in the discussion below were primarily due to changes in the euro and pound sterling in the Company's European segments, the Canadian dollar and Mexican peso in the Company's Americas segments and the euro in the Company's Transit Packaging segment. The Company calculates the impact of foreign currency translation by multiplying or dividing, as appropriate, current year U.S. dollar results by the current year average foreign exchange rates and then multiplying or dividing, as appropriate, those amounts by the applicable prior year average exchange rates.

Net Sales and Segment Income    

 
Three Months Ended
 
March 31,
 
2020
 
2019
Net sales
$
2,757

 
$
2,755


Three months ended March 31, 2020 compared to 2019

Net sales increased primarily due to 10% higher beverage can sales unit volumes partially offset by the pass-through of lower aluminum costs and $40 from the impact of foreign currency translation.

Americas Beverage

The Americas Beverage segment manufactures aluminum beverage cans and ends, steel crowns, glass bottles and aluminum closures and supplies a variety of customers from its operations in the U.S., Brazil, Canada, Colombia and Mexico. The U.S. and Canadian beverage can markets have experienced recent market growth due to the introduction of new beverage products in cans versus other packaging formats. To meet volume requirements in the U.S. and Canadian beverage can markets, the Company began construction of a third line at its Nichols, NY facility which is expected to begin production during the second quarter of 2020 and announced a new beverage can facility in Bowling Green, Kentucky, which is expected to begin production in the second quarter of 2021. Additionally, a new beverage can line at the Weston, Ontario plant began production in January 2020.

In Brazil and Mexico, the Company's sales unit volumes have increased in recent years primarily due to market growth driven by increased per capita incomes and consumption, combined with an increased preference for cans over other packaging formats. In November 2019, the Company commenced operations at a new one-line beverage can facility in Rio Verde, Brazil.

Net sales and segment income in the Americas Beverage segment are as follows:
 
Three Months Ended
 
March 31,
 
2020
 
2019
Net sales
$
871

 
$
788

Segment income
134

 
113


Three months ended March 31, 2020 compared to 2019

Net sales increased primarily due to 15% higher sales unit volumes partially offset by the pass-through of lower aluminum costs and $9 from the impact of foreign currency translation.

25

Crown Holdings, Inc.


Item 2. Management's Discussion and Analysis (Continued)

Segment income increased primarily due to higher sales unit volume and improved pricing in North America partially offset by $2 from the impact of foreign currency translation.

European Beverage

The Company's European Beverage segment manufactures steel and aluminum beverage cans and ends and supplies a variety of customers from its operations throughout Europe, the Middle East and North Africa. In recent years, the Western European beverage can markets have been growing.

In February 2019, the second line of the beverage can plant in Valencia, Spain began operations. The multi-year project to convert beverage can capacity in Spain from steel to aluminum is nearing completion as both lines in the Seville, Spain plant, which have multi-size capability, are expected to be in commercial production in the second quarter of 2020.

Net sales and segment income in the European Beverage segment are as follows:
 
Three Months Ended
 
March 31,
 
2020
 
2019
Net sales
$
346

 
$
339

Segment income
39

 
39


Three months ended March 31, 2020 compared to 2019

Net sales increased primarily due to 5% higher sales unit volumes partially offset by the pass-through of lower aluminum costs and $6 from the impact of foreign currency translation.
Segment income was comparable as the impact of higher sales unit volumes was partially offset by cost inflation.
European Food

The European Food segment manufactures steel and aluminum food cans and ends and metal vacuum closures, and supplies a variety of customers from its operations throughout Europe and Africa. The European food can market is a mature market where consumer preference continues to favor the can due to product protection and food preservation; however, challenging harvest yields have led to volume declines in recent years.

Net sales and segment income in the European Food segment are as follows:
 
Three Months Ended
 
March 31,
 
2020
 
2019
Net sales
$
402

 
$
423

Segment income
33

 
48


Three months ended March 31, 2020 compared to 2019

Net sales decreased primarily due to $12 from the impact of foreign currency translation, 1% lower sales unit volumes and the pass-through of lower raw material costs.
Segment income decreased primarily due to $18 arising from the carryover of tinplate costs from prior year-end inventory, partially offset by improved cost performance. 





26

Crown Holdings, Inc.


Item 2. Management's Discussion and Analysis (Continued)

Asia Pacific

The Company's Asia Pacific segment consists of beverage can operations in Cambodia, China, Indonesia, Malaysia, Myanmar, Singapore, Thailand and Vietnam and non-beverage can operations, primarily food cans and specialty packaging. In recent years, the beverage can market in Southeast Asia has been growing. The Company has begun construction of a new beverage can plant in Nong Khae, Thailand, which will begin production during the third quarter of 2020. In response to market conditions in China, the Company closed its Huizhou facility in early 2019. Following this closure, the Company has three beverage can plants in China with approximately $75 in annual sales.

Net sales and segment income in the Asia Pacific segment are as follows:
 
Three Months Ended
 
March 31,
 
2020
 
2019
Net sales
$
301

 
$
321

Segment income
45

 
45


Three months ended March 31, 2020 compared to 2019

Net sales decreased primarily due to the pass-through of lower aluminum costs and lower sales unit volumes related to the recent plant closures in China, partially offset by 6% higher sales unit volumes in Southeast Asia.

Segment income was comparable as the impact of higher sales unit volumes was offset by cost inflation.

Transit Packaging

The Transit Packaging segment includes the Company's global industrial and protective solutions and equipment and tools businesses.

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

 
Three Months Ended
 
March 31,
 
2020
 
2019
Net sales
$
522

 
$
569

Segment income
66

 
73


Three months ended March 31, 2020 compared to 2019

Net sales decreased primarily due to lower sales unit volumes due to lower economic activity, the pass-through of lower raw material prices and $10 from the impact of foreign currency translation.

Segment income decreased primarily due to lower sales unit volumes partially offset by favorable product mix and improved cost performance.

Non-reportable Segments

The Company's non-reportable segments include its food can and closures businesses in North America, its aerosol can businesses in North America and Europe, and its tooling and equipment operations in the U.S. and U.K.

Net sales and segment income in non-reportable segments are as follows:





27

Crown Holdings, Inc.


Item 2. Management's Discussion and Analysis (Continued)

 
Three Months Ended
 
March 31,
 
2020
 
2019
Net sales
$
315

 
$
315

Segment income
19

 
36


Three months ended March 31, 2020 compared to 2019

Net sales were comparable as higher sales in the Company's equipment operations were partially offset by lower sales unit volumes in the Company's global aerosol can businesses and $2 from the impact of foreign currency translation.

Segment income decreased primarily due to $16 arising from the carryover of tinplate costs from the prior year-end inventory.

Corporate and Unallocated Expense
 
Three Months Ended
 
March 31,
 
2020
 
2019
Corporate and unallocated expense
$
(38
)
 
$
(39
)

Corporate and unallocated expenses were comparable in 2019 and 2020.

Interest Expense

For the three months ended March 31, 2020 compared to 2019, interest expense decreased from $98 to $80 due to lower average outstanding debt and lower interest rates.

Taxes on Income
    
The Company's effective income tax rate was as follows:
 
Three Months Ended
 
March 31,
 
2020
 
2019
Income before income taxes
$
151

 
$
178

Provision for income taxes
38

 
48

Effective income tax rate
25
%
 
27
%

The effective tax rate for the three months ended March 31, 2020, included a benefit of $4 arising from a tax law change in India.

Net Income Attributable to Noncontrolling Interests

For the three months ended March 31, 2020 compared to 2019, net income attributable to noncontrolling interests decreased from $28 to $26 primarily due to a benefit in 2019 related to a favorable court ruling for one of the Company's Brazilian subsidiaries related to indirect taxes.

Liquidity and Capital Resources

Cash from Operations

Cash used for operating activities decreased from $666 for the three months ended March 31, 2019 to $607 for the three months ended March 31, 2020. The improvement was primarily due to changes in working capital.

28

Crown Holdings, Inc.


Item 2. Management's Discussion and Analysis (Continued)

Days sales outstanding for trade receivables, excluding the impact of unbilled receivables, was 41 days as of March 31, 2019 compared to 36 days as of March 31, 2020 primarily related to the derecognition of receivables under the Company's securitization and factoring programs.

Inventory turnover was 70 days at March 31, 2019 compared to 65 days at March 31, 2020 primarily due to lower inventory levels in the Transit Packaging segment. Inventory turnover at March 31, 2020 increased compared to 63 days at December 31, 2019 due to seasonality in the Company's food and beverage can businesses. The food can business is seasonal with the first quarter tending to be the slowest period as the autumn packaging period in the Northern Hemisphere has ended and new crops are not yet planted. The industry enters its busiest period in the third quarter when the majority of fruits and vegetables in the Northern Hemisphere are harvested. Due to this seasonality, inventory levels increase in the first half of the year to meet peak demand in the second and third quarters. The beverage can business is also seasonal with inventory levels generally increasing in the first half of the year to meet peak demand in the summer months in the Northern Hemisphere.
Days outstanding for trade payables was 88 days at March 31, 2019 compared to 85 days at March 31, 2020.
Investing Activities

Cash used for investing activities increased from $64 for the three months ended March 31, 2019 to $96 for the three months ended March 31, 2020 primarily due to increased capital expenditures.

Financing Activities

Cash provided by financing activities increased from $417 for the three months ended March 31, 2019 to $882 for the three months ended March 31, 2020 due to higher net borrowings. Additionally, the Company repurchased $57 of capital stock during the three months ended March 31, 2020.

Liquidity

As of March 31, 2020, $391 of the Company's $765 of cash and cash equivalents was located outside the U.S. The Company funds its cash needs in the U.S. through cash flows from operations in the U.S., distributions from certain foreign subsidiaries, borrowings under its revolving credit facility and the acceleration of cash receipts under its receivable securitization facilities. Of the cash and cash equivalents located outside the U.S., $333 was held by subsidiaries for which earnings are considered indefinitely reinvested. While based on current operating plans the Company does not foresee a need to repatriate these funds, if such earnings were repatriated the Company would be required to record any incremental taxes on the repatriated funds.

As of March 31, 2020, the Company had $757 of borrowing capacity available under its revolving credit facility, equal to the total facility of $1,650 less borrowings of $828 and outstanding standby letters of credit of $65. The Company could have borrowed this amount at March 31, 2020 and still been in compliance with its leverage ratio covenants. The Company's net total leverage ratio, as defined by the credit agreement, of 4.47 to 1.0 at March 31, 2020 was in compliance with the covenant requiring a ratio of no greater than 5.75 to 1.0. The required net total leverage ratio under the agreement reduces to 5.0 to 1.0 at December 31, 2020 and 4.5 to 1.0 at December 31, 2022.

Capital Resources

As of March 31, 2020, the Company had approximately $96 of capital commitments primarily related to its Americas Beverage and European Beverage segments. The Company expects to fund these commitments primarily through cash flows generated from operations.

Contractual Obligations

During the three months ended March 31, 2020 there were no material changes to the Company's contractual obligations provided within Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations” of the Company's Annual Report on Form 10-K for the year ended December 31, 2019, which information is incorporated herein by reference.


29

Crown Holdings, Inc.


Item 2. Management's Discussion and Analysis (Continued)

Supplemental Guarantor Financial Information

As disclosed in Note K, the Company has senior notes and debentures outstanding, which have various guarantees.

The Company’s outstanding $350 principal amount of 7.375% senior notes due 2026 and $40 principal amount 7.5% senior notes due 2096 were issued by Crown Cork & Seal Company, Inc. (Crown Cork Issuer), a 100% owned subsidiary of the Company and are fully and unconditionally guaranteed by Crown Holdings, Inc. (Parent). No other subsidiary guarantees the debt and the guarantees are made on a joint and several basis.

The Company’s $1,000 principal amount 4.5% senior notes due 2023, $400 principal amount of 4.25% senior notes due 2026, and $875 principal amount of 4.75% senior notes due 2026 were issued by Crown Americas LLC and Crown Americas Capital Corp. IV, Crown Americas Capital Corp. V and Crown Americas Capital Corp. VI, respectively (collectively, the Crown Americas Issuer), each a 100% owned subsidiary of the Company, and are fully and unconditionally guaranteed by the Parent and substantially all of its subsidiaries in the United States. Each of the guarantors to these senior notes (collectively, the Crown Americas Guarantors) is a 100% owned subsidiary of the Company and the guarantees are made on a joint and several basis. The other subsidiaries of the Company do not guarantee the debt.

The senior notes described above and issued by the Crown Cork Issuer and the Crown Americas Issuer are collectively referred to as the senior notes, the Crown Cork Issuer and the Crown Americas Issuer are collectively referred to as the issuers, the Parent and the Crown Americas Guarantors are collectively referred to as the guarantors and the subsidiaries of the Company that do not guarantee the senior notes are collectively referred to as the non‑guarantors.

Each of the Parent (in the case of the senior notes issued by the Crown Cork Issuer) and the Crown Americas Guarantors (in the case of the senior notes issued by the Crown Americas Issuer) guarantee the payment of the principal and premium, if any, and interest on the senior notes when due, whether at stated maturity of the senior notes, by acceleration, call for redemption or otherwise, together with interest on the overdue principal, if any, and interest on any overdue interest, to the extent lawful, and all other obligations of the Company to the holders of the senior notes and to the trustee under the applicable indenture governing the senior notes.

The senior notes and guarantees are senior unsecured obligations of the issuers and the guarantors, and are

effectively subordinated to all existing and future secured indebtedness of the issuers and the guarantors to the extent of the value of the assets securing such indebtedness, including any borrowings under the Company’s senior secured credit facilities, to the extent of the value of the assets securing such indebtedness;
structurally subordinated to all indebtedness of the Company’s non-guarantor subsidiaries, which include all of the Company’s foreign subsidiaries and any U.S. subsidiaries that are neither obligors nor guarantors of the Company’s senior secured credit facilities;
ranked equal in right of payment to any existing or future senior indebtedness of the issuers and the guarantors; and
ranked senior in right of payment to all existing and future subordinated indebtedness of the issuers and the guarantors.

Each guarantee of a guarantor is limited to an amount not to exceed the maximum amount that can be guaranteed that will not (after giving effect to all other contingent and fixed liabilities of such guarantor and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of all other guarantors in respect of the obligations of such other guarantors under their respective guarantees of the guaranteed obligations) render the guarantee, as it relates to such guarantor, voidable under applicable law relating to fraudulent conveyances or fraudulent transfers.

A guarantee of a guarantor other than the Parent will be unconditionally released and discharged upon any of the following:

any transfer (including, without limitation, by way of consolidation or merger) by the Parent or any subsidiary of the Parent to any person or entity that is not the Parent or a subsidiary of the Parent of all of the equity interests of, or all or substantially all of the properties and assets of, such guarantor;




30

Crown Holdings, Inc.


Item 2. Management's Discussion and Analysis (Continued)

any transfer (including, without limitation, by way of consolidation or merger) by the Parent or any subsidiary of the Parent to any person or entity that is not the Parent or a subsidiary of the Parent of equity interests of such guarantor or any issuance by such guarantor of its equity interests, such that such guarantor ceases to be a subsidiary of the Parent; provided that such guarantor is also released from all of its obligations in respect of indebtedness under the Company’s senior secured credit facilities;
the release of such guarantor from all obligations of such guarantor in respect of indebtedness under the Company’s senior secured credit facilities, except to the extent such guarantor is otherwise required to provide a guarantee; or
upon the contemporaneous release or discharge of all guarantees by such guarantor which would have required such guarantor to provide a guarantee under the applicable indenture.

The following tables present summarized financial information related to the senior notes issued by each of Crown Cork and Crown Americas on a combined basis for each issuer and its guarantors after elimination of (i) intercompany transactions and balances among the Parent and the guarantors and (ii) equity in earnings from and investments in any subsidiary that is a non-guarantor.

Crown Cork Issuer and Guarantor
 
Three Months Ended
 
March 31, 2020
Net sales
$
 
Gross Profit
 
Income from operations
(1
)
Net income1
(17
)
Net income attributable to Crown Holdings1
(17
)
(1) Includes $8 of expense related to intercompany interest with non-guarantor subsidiaries

 
March 31, 2020
 
December 31, 2019
Current assets
$
11
 
 
$
11
 
Non-current assets
107
 
 
129
 
Current liabilities
45
 
 
57
 
Non-current liabilities1
4,286
 
 
4,237
 
(1) Includes payables of $3,588 and $3,538 due to non-guarantor subsidiaries as of March 31, 2020 and December 31, 2019

Crown Americas Issuer and Guarantors
 
Three Months Ended
 
March 31, 2020
Net sales1
$
946
 
Gross profit2
151
 
Income from operations2
37
 
Net income3
62
 
Net income attributable to Crown Holdings3
62
 
(1) Includes $92 of sales to non-guarantor subsidiaries
(2) Includes $9 of gross profit related to sales to non-guarantor subsidiaries
(3) Includes $14 of income related to intercompany interest and technology royalties with non-guarantor subsidiaries








31

Crown Holdings, Inc.



Item 2. Management's Discussion and Analysis (Continued)

 
March 31, 2020
 
December 31, 2019
Current assets1
$
1,065
 
 
$
799
 
Non-current assets2
3,246
 
 
3,171
 
Current liabilities3
855
 
 
956
 
Non-current liabilities4
5,128
 
 
4,709
 
(1) Includes receivables of $40 and $46 due from non-guarantor subsidiaries as of March 31, 2020 and December 31, 2019
(2) Includes receivables of $141 and $128 due from non-guarantor subsidiaries as of March 31, 2020 and December 31, 2019
(3) Includes payables of $22 and $21 due to non-guarantor subsidiaries as of March 31, 2020 and December 31, 2019
(4) Includes payables of $251 and $245 due to non-guarantor subsidiaries as of March 31, 2020 and December 31, 2019

The senior notes are structurally subordinated to all indebtedness of the Company’s non-guarantor subsidiaries. The non-guarantors are separate and distinct legal entities and have no obligation, contingent or otherwise, to pay any amounts due pursuant to the senior notes, or to make any funds available therefor, whether by dividends, loans, distributions or other payments. Any right that the Company or the guarantors have to receive any assets of any of the non-guarantors upon the liquidation or reorganization of any non-guarantor, and the consequent rights of holders of senior notes to realize proceeds from the sale of any of a non-guarantor’s assets, would be effectively subordinated to the claims of such non-guarantor’s creditors, including trade creditors and holders of preferred equity interests, if any, of such non-guarantor. Accordingly, in the event of a bankruptcy, liquidation or reorganization of any of the non-guarantors, the non-guarantors will pay the holders of their debts, holders of preferred equity interests, if any, and their trade creditors before they will be able to distribute any of their assets to the Company or any of the guarantors.

Under U.S. federal bankruptcy laws or comparable provisions of state fraudulent transfer laws, the issuance of the senior note guarantees by the guarantors could be voided, or claims in respect of such obligations could be subordinated to all of their other debts and other liabilities, if, among other things, at the time the guarantors issued the related senior note guarantees, the Company or the applicable guarantor intended to hinder, delay or defraud any present or future creditor, or received less than reasonably equivalent value or fair consideration for the incurrence of such indebtedness and either:

was insolvent or rendered insolvent by reason of such incurrence; 
was engaged in a business or transaction for which the Company’s or such guarantor’s remaining assets constituted unreasonably small capital; or
intended to incur, or believed that it would incur, debts beyond its ability to pay such debts as they mature.

Each guarantee provided by a guarantor includes a provision intended to limit the guarantor’s liability to the maximum amount that it could incur without causing the incurrence of obligations under its guarantee to be a fraudulent transfer or conveyance. This provision may not be effective to protect those guarantees from being avoided under fraudulent transfer or conveyance law, or it may reduce that guarantor’s obligation to an amount that effectively makes its guarantee worthless, and we cannot predict whether a court will ultimately find it to be effective.

On the basis of historical financial information, operating history and other factors, we believe that each of the guarantors, after giving effect to the issuance of its guarantee of the senior notes when such guarantee was issued, was not insolvent, did not have unreasonably small capital for the business in which it engaged and did not and has not incurred debts beyond its ability to pay such debts as they mature. The Company cannot assure, however, as to what standard a court would apply in making these determinations or that a court would agree with our conclusions in this regard.

Commitments and Contingent Liabilities

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

    




32

Crown Holdings, Inc.



Item 2. Management's Discussion and Analysis (Continued)

Critical Accounting Policies

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

Actual results could differ from these estimates and assumptions, impacting the reported results of operations and financial condition of the Company. Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations” and Note A to the consolidated financial statements contained in the Company's Annual Report on Form
10-K for the year ended December 31, 2019 describe the significant accounting estimates and policies used in the preparation of the consolidated financial statements. Updates to the Company's accounting policies related to new accounting pronouncements are included in Note B to the consolidated financial statements included in this Quarterly Report on Form 10-Q.

The discussion below supplements the discussion from the Company's Annual Report on Form 10-K for the year ended December 31, 2019 with respect to goodwill.

Goodwill Impairment

As of October 1, 2019, the estimated fair values of the Equipment & Tools and Industrial Solutions reporting units, which are included in the Transit Packaging segment were 9% and 15% higher than their respective carrying values. The reporting units operate in low-growth environments that are expected to experience lower demand in the near term because of the impact of the coronavirus pandemic. If the reporting units' operating results are significantly impacted for an extended period of time, it is possible that the Company may record an impairment charge in the future. As of March 31, 2020, the Equipment and Tools reporting unit had $771 of goodwill and the Industrial Solutions reporting unit had $717 of goodwill. As previously disclosed in the Company's 2019 Form 10-K, based upon an internal reorganization, the Protective Packaging reporting unit was merged into the Industrial Solutions reporting unit, effective January 1, 2020.  The amounts and percentages presented represent the combined Industrial Solutions reporting unit.

As of March 31, 2020, the Company considered recent events and circumstances and determined it was more likely than not that fair value was more than carrying amount for all of its reporting units. To the extent future operating results may decline it is possible that material impairment charges may be recorded.  

Forward Looking Statements

Statements included herein, including, but not limited to, those in “Management's Discussion and Analysis of Financial Condition and Results of Operations” and in the discussions of asbestos in Note H and commitments and contingencies in Note I to the consolidated financial statements included in this Quarterly Report on Form 10-Q, and also in Part I, Item 1, “Business” and Item 3, “Legal Proceedings” and in Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations,” within the Company's Annual Report on Form 10-K for the year ended December 31, 2019, which are not historical facts (including any statements concerning the direct or indirect impact of COVID-19, plans and objectives of management for capacity additions, share repurchases, dividends, future operations or economic performance, or assumptions related thereto), are “forward-looking statements” within the meaning of the federal securities laws. In addition, the Company and its representatives may, from time to time, make oral or written statements which are also “forward-looking statements.”

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

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


33

Crown Holdings, Inc.



Item 2. Management's Discussion and Analysis (Continued)

A discussion of important factors that could cause the actual results of operations or financial condition of the Company to differ from expectations has been set forth in the Company's Annual Report on Form 10-K for the year ended December 31, 2019 within Part II, Item 7: “Management's Discussion and Analysis of Financial Condition and Results of Operations”
under the caption “Forward Looking Statements” and is incorporated herein by reference. Some of the factors are also discussed elsewhere in this Form 10-Q (including under Item 1A below) and in prior Company filings with the SEC. In addition, other factors have been or may be discussed from time to time in the Company's SEC filings.
  

Item 3.
Quantitative and Qualitative Disclosures About Market Risk

In the normal course of business the Company is subject to risk from adverse fluctuations in foreign exchange and interest rates and commodity prices. The Company manages these risks through a program that includes the use of derivative financial instruments, primarily swaps and forwards. Counterparties to these contracts are major financial institutions. The Company is exposed to credit loss in the event of nonperformance by the counterparties. These instruments are not used for trading or speculative purposes. The extent to which the Company uses such instruments is dependent upon its access to these contracts in the financial markets and its success in using other methods, such as netting exposures in the same currencies to mitigate foreign exchange risk and using sales arrangements that permit the pass-through of commodity prices and foreign exchange rate risks to customers. The Company's objective in managing its exposure to market risk is to limit the impact on earnings and cash flow. For further discussion of the Company's use of derivative instruments and their fair values at March 31, 2020, see Note J to the consolidated financial statements included in this Quarterly Report on Form 10-Q.

As of March 31, 2020, the Company had $2.5 billion principal floating interest rate debt. A change of 0.25% in these floating interest rates would change annual interest expense by approximately $6 million before tax.

In July 2017, the Financial Conduct Authority (the authority that regulates LIBOR) announced it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. The U.S. Federal Reserve, in conjunction with the Alternative Reference Rate Committee has announced the replacement of U.S. dollar LIBOR rates with a new index calculated by short-term repurchase agreements backed by U.S. Treasury securities called the Secured Overnight Financing Rate (SOFR). The first publication of SOFR was released in April 2018. Whether or not SOFR attains market traction as a LIBOR replacement tool remains in question and the future of LIBOR at this time is uncertain. At March 31 2020, the Company does have contracts that are indexed to LIBOR, including cross-currency swap contracts and certain of its term loan facilities, and continues to monitor this activity and evaluate the related risks. The discontinuation of LIBOR will require these arrangements to be modified in order to replace LIBOR with an alternative reference interest rate, which could impact the Company's cost of funds. The Company’s credit agreement includes a provision for the determination of a successor LIBOR rate when appropriate by reference to the then-prevailing market convention for determining an interest rate for syndicated loans in the United States, subject to a right of the lenders thereunder to reject the application of the determined rate by written notice.


Item 4.    Controls and Procedures

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

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


34

Crown Holdings, Inc.



PART II – OTHER INFORMATION


Item 1.    Legal Proceedings

For information regarding the Company's potential asbestos-related liabilities and other litigation, see Note H entitled “Asbestos-Related Liabilities” and Note I entitled “Commitments and Contingent Liabilities” to the consolidated financial statements within Part I, Item 1 of this Quarterly Report on Form 10-Q, which information is incorporated herein by reference.

Item 1A. Risk Factors

The information set forth in this report should be read in conjunction with the risk factors set forth below and the risk factors discussed in Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2019. Such risks are not the only risks facing the Company. Additional risks and uncertainties not currently known to the Company or that the Company currently deems to be immaterial may also materially adversely effect the Company's business, financial condition and/or operating results.

The Company’s business operations and financial position have been and are expected to continue to be adversely affected by the coronavirus outbreak.

The ongoing global outbreak of coronavirus (also known as COVID-19), which was declared a pandemic by the World Health Organization on March 11, 2020 and a national emergency by the President of the United States on March 13, 2020, has caused and is continuing to cause business slowdowns and shutdowns and turmoil in the financial markets both in the U.S. and abroad. The Company is closely monitoring the impact of COVID-19 on all aspects of its business and geographies, including how it has impacted and will impact the Company’s employees, customers, suppliers and distribution channels. The pandemic, as well as the quarantines and other governmental and non‑governmental restrictions which have been imposed throughout the world in an effort to contain or mitigate it, has created significant volatility, uncertainty and economic disruption which is expected to adversely affect the Company’s business operations and may materially and adversely affect the Company’s results of operations, cash flows and financial position or the Company’s ability to execute its short- and long-term business strategies and initiatives. For example, governmental authorities in several regions (including Pennsylvania, where the Company’s world headquarters are located) have ordered the cessation of all business activity which is deemed non-essential and there is a risk that these shutdown orders will be extended or expanded or that similar shutdown orders will be implemented in other regions; while many food and beverage products are deemed essential, several jurisdictions have implemented restrictions or prohibitions on the sale of alcoholic beverages which have reduced the demand for some of the Company’s products. Likewise, the Company’s Transit Packaging Division supplies a wide array of industrial markets which are being negatively affected by a decline in global economic activity.

The magnitude of COVID-19’s ultimate impact on the Company will depend on numerous evolving factors, future developments and cascading effects of the coronavirus pandemic that the Company is not able to predict, including: the severity of the outbreak and the international actions that are being taken to contain and treat it; the duration of the outbreak and the myriad of business restrictions being imposed as a result of it; governmental, business and other responses to the outbreak (including limitations on the Company’s operations and/or mandates that the Company provide products or services); the extent and duration of the effect of the outbreak on consumer confidence and spending, customer demand and buying patterns; the promotion of “social distancing” and the adoption of shelter-in-place orders and restrictions on exports affecting customers’ demand for the Company’s products; the extent to which forced remote working arrangements reduce the Company’s ability to effectively manage its global operations; the impact of the outbreak on the Company’s supply chain (including reductions in supply that may result in an inability to meet customer demand); the impact of the outbreak on internal controls (including those over financial reporting); any impairment in value of the Company’s tangible or intangible assets which could be recorded as a result of a weaker economic conditions; and the effect of the ongoing disruption in the capital markets on the Company’s ability to access capital on favorable terms and continue to meet its liquidity needs. Moreover, employee absenteeism due to members of the Company’s workforce being quarantined or exposed to COVID-19 may impact the Company’s ability to meet staffing needs which, compounded with the effects of ongoing office and potential factory closures, disruptions to ports and other shipping infrastructure, border closures, and other travel or health-related restrictions, may in turn impair the Company in the manufacture, distribution and sale of its products.

In addition, while the Company cannot predict the magnitude of the impact that COVID-19 will have on its customers and suppliers or their financial conditions, any material effect on the Company’s customers or suppliers could adversely impact

35

Crown Holdings, Inc.


the Company. For example, certain of the Company’s suppliers have informed the Company that the coronavirus outbreak and the resulting business restrictions may constrain supply of necessary materials and the Company may face difficulty collecting accounts receivable from any of its customers that may be negatively impacted by the pandemic. The impact of COVID-19 may also exacerbate other risk factors discussed in Item 1A of the Company’s Annual Report on Form 10‑K for the year ended December 31, 2019, any of which could have a material effect on the Company. For example, significant volatility in the equity markets could have a negative impact on the market value of the Company's pension plan assets which may substantially increase the Company's future pension plan funding requirements and could have a negative impact on the Company's results of operations, pension plan funded status and future cash flows.

The extent of the impact of COVID-19 on the Company’s business is highly uncertain and difficult to predict, as information is rapidly evolving with respect to the duration and severity of the pandemic. At this point, the Company cannot reasonably estimate the duration and severity of the COVID-19 outbreak or its overall impact on the Company’s business.

Item 2. Unregistered Sale of Equity Securities and Use of Proceeds

The following table provides information about the Company's purchase of equity securities during the three months
ended March 31, 2020. The table excludes 103,281 shares repurchased by the Company in connection with the surrender
of shares to cover taxes on the vesting of restricted stock.

 
Total Number
of Shares
Purchased
 Average Price Per Share
Total Number of Shares Purchased as Part of Publicly Announced Programs
Approximate Dollar Value of Shares
 that May Yet Be Purchased
 under the Programs
As of the end of the period
(millions of dollars)
 
 
 
 
 
March
1,038,821
$48.24
1,038,821
$200
   Total
1,038,821
$48.24
1,038,821
$—
 
 
 
 
 

In March 2020, the Company's Board of Directors authorized the repurchase of an aggregate amount of $250 of the Company's common stock through June 30, 2020. Share repurchases under the Company's program could be made in the open market or through privately negotiated transactions, and at times and in such amounts as management deemed appropriate. The program was canceled in March 2020.

Item 3. Defaults Upon Senior Securities

There were no events required to be reported under Item 3 for the three months ended March 31, 2020.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5.    Other Information

None.


36

Crown Holdings, Inc.


Item 6.    Exhibits    
10.u
 
 
22
 
 
31.1
 
 
31.2
 
 
32
 
 
101
The following financial information from the Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 formatted in inline XBRL (eXtensible Business Reporting Language): (i) Consolidated Statements of Operations for the three months ended March 31, 2020 and 2019, (ii) Consolidated Statements of Comprehensive Income for the three months ended March 31, 2020 and 2019, (iii) Consolidated Balance Sheets as of March 31, 2020 and December 31, 2019, (iv) Consolidated Statements of Cash Flows for the three months ended March 31, 2020 and 2019, (v) Consolidated Statements of Changes in Equity for the three months ended March 31, 2020 and 2019 and (vi) Notes to Consolidated Financial Statements.
 
 
104
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).

37

Crown Holdings, Inc.



SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
 
 
 
 
 
Crown Holdings, Inc.
Registrant
 
 
By:
 
/s/ David A. Beaver
 
 
David A. Beaver
 
 
Vice President and Corporate Controller
 
 
(Chief Accounting Officer)

Date: April 30, 2020


38
Exhibit


Amendment No. 1

CROWN HOLDINGS, INC.
2013 STOCK-BASED INCENTIVE COMPENSATION PLAN

Pursuant to the power reserved to it in Section 12.1 of the Crown Holdings, Inc. 2013 Stock-Based Incentive Compensation Plan ( the "2013 Plan"), the Board of Directors of Crown Holdings, Inc. hereby amends the 2013 Plan, effective February 28, 2020, as follows:

1.Section 14 is hereby amended and restated to read as follows:

"14.    Taxes

The Company, any Subsidiary or Affiliate is authorized to withhold from any payment relating to an Award under the Plan, including from a distribution of Common Stock or any payroll or other payment to a Participant amounts of withholding and other taxes due in connection with any transaction involving an Award, and to take such other action as the Committee may deem advisable to enable the Company, the Subsidiary or Affiliate and Participants to satisfy obligations for the payment of withholding taxes and other tax obligations relating to any A ward. This authority shall include authority to withhold or receive Common Stock or other property and to make cash payments in respect thereof in satisfaction of a Participant's tax obligations. Withholding of taxes in the form of shares of Common Stock shall not occur at a rate that exceeds the maximum required individual statutory tax withholding rate in a Participant's applicable tax jurisdiction. Participants who are subject to the reporting requirements of Section 16 of the 1934 Act may elect to pay all or a portion of any withholding or other taxes due in connection with an Award by directing the Company to withhold shares of Common Stock that would otherwise be received in connection with such Award."

*    *    *

To record the adoption of this Amendment No. 1 to the 2013 Plan, Crown Holdings, Inc. has authorized its officers to affix its corporate name and seal effective as of the date first written above.


12553004.3.TAX


















                            



CROWN HOLDINGS, INC.


By: /s/ Timothy J. Donahue
Name: Timothy J. Donahue
Title: Chief Executive Officer


Exhibit


Exhibit 22 - List of Guarantor Subsidiaries

The following subsidiaries of Crown Holdings, Inc. (the "Company") were, as of March 31, 2020, guarantors of the Company's $350 principal 7.375% senior notes due 2026 and $40 principal 7.5% senior notes due 2096:
NAME
STATE OR COUNTRY OF INCORPORATION OR ORGANIZATION
Crown Cork & Seal Company, Inc.
Pennsylvania

The following subsidiaries of the Company were, as of March 31, 2020, guarantors of the Company's $1,000 principal 4.5% senior notes due 2023, $400 principal 4.25% senior notes due 2026, and $875 principal 4.75% senior notes due 2026:
NAME
STATE OR COUNTRY OF INCORPORATION OR ORGANIZATION
Crown Cork & Seal Company, Inc.
Pennsylvania
CROWN Americas LLC
Pennsylvania
Crown Consultants, Inc.
Pennsylvania
Crown Americas Capital Corp.
Delaware
Crown Americas Capital Corp. IV
Delaware
Crown Americas Capital Corp. V
Delaware
Crown Americas Capital Corp. VI
Delaware
CROWN Beverage Packaging, LLC
Delaware
CROWN Beverage Packaging Puerto Rico, Inc.
Delaware
Crown Cork & Seal Company (DE), LLC
Delaware
CROWN Cork & Seal USA, Inc.
Delaware
Crown International Holdings, Inc.
Delaware
CROWN Packaging Technology, Inc.
Delaware
Foreign Manufacturers Finance Corporation
Delaware
Signode Industrial Group Holdings US Inc
Delaware
Signode Industrial Group LLC
Delaware
Signode Industrial Group US Inc
Delaware
Signode International IP Holdings LLC
Delaware
Signode Pickling Holding LLC
Delaware
Signode US IP Holdings LLC
Delaware
TopFrame LLC
Delaware
Package Design and Manufacturing, Inc.
Michigan
Kiwiplan Inc.
Ohio



Exhibit



EXHIBIT 31.1


CERTIFICATION

I, Timothy J. Donahue, certify that:

1.
I have reviewed this quarterly report on Form 10-Q of Crown Holdings, Inc. (“the registrant”);

2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: April 30, 2020                /s/ Timothy J. Donahue                                                Timothy J. Donahue
Chief Executive Officer



Exhibit



EXHIBIT 31.2

CERTIFICATION

I, Thomas A. Kelly, certify that:

1.
I have reviewed this quarterly report on Form 10-Q of Crown Holdings, Inc. (“the registrant”);

2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



Date: April 30, 2020                    /s/ Thomas A. Kelly
Thomas A. Kelly
Chief Financial Officer


Exhibit



EXHIBIT 32



CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906 OF
THE SARBANES-OXLEY ACT OF 2002


In connection with the Quarterly Report of Crown Holdings, Inc. (the “Company”) on Form 10-Q for the period ending March 31, 2020 (the “Report”), each of the undersigned officers certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)    The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)    The information contained in the Report fairly presents, in all material respects, the financial position and results of operations of the Company.



Date:    April 30, 2020                /s/ Timothy J. Donahue
Timothy J. Donahue
President and Chief Executive Officer

Date:    April 30, 2020                /s/ Thomas A. Kelly
Thomas A. Kelly
Senior Vice President
and Chief Financial Officer

 

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

The foregoing certification is being furnished to the Securities and Exchange Commission as an exhibit to this Quarterly Report on Form 10-Q and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.



v3.20.1
Cash, Cash Equivalents and Restricted Cash
3 Months Ended
Mar. 31, 2020
Restricted Cash [Abstract]  
Restricted Cash
Cash, Cash Equivalents, and Restricted Cash

Cash, cash equivalents, and restricted cash included in the Company's Consolidated Balance Sheets and Statement of Cash Flows were as follows:
 
March 31, 2020
 
December 31, 2019
Cash and cash equivalents
$
765

 
$
607

 
 
 
 
Restricted cash included in prepaid expenses and other current assets
$
55

 
$
50

Restricted cash included in other non-current assets
1

 
6

Total restricted cash
$
56

 
$
56

 
 
 
 
Total cash, cash equivalents and restricted cash
$
821

 
$
663



Amounts included in restricted cash primarily represent amounts required to be segregated by certain of the Company's receivables securitization agreements.
v3.20.1
Asbestos-Related Liabilities - Summary of Claims Activity (Details)
3 Months Ended
Mar. 31, 2020
Claim
Loss Contingency Accrual [Roll Forward]  
Beginning claims 56,000
New claims 500
Settlements or dismissals (500)
Ending claims 56,000
v3.20.1
Consolidated Statements of Cash Flows (Condensed) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Cash flows from operating activities    
Net income $ 114 $ 131
Adjustments to reconcile net income to net cash from operating activities:    
Depreciation and amortization 122 122
Restructuring and other 7 4
Pension expense 43 (2)
Pension contributions (5) (7)
Stock-based compensation 10 8
Changes in assets and liabilities:    
Working capital changes and other (898) (922)
Net cash used for operating activities (607) (666)
Cash flows from investing activities    
Capital expenditures (110) (75)
Proceeds from sale of property, plant and equipment 0 5
Net investment hedge 14 6
Net cash used for investing activities (96) (64)
Cash flows from financing activities    
Proceeds from long-term debt 93 0
Payments of long-term debt (12) (281)
Net change in revolving credit facility and short-term debt 872 731
Payments of finance leases (1) (14)
Common stock issued 1 2
Common stock repurchased (57) (1)
Contributions from noncontrolling interests 2 0
Dividends paid to noncontrolling interests (11) (9)
Foreign exchange derivatives related to debt (5) (11)
Net cash provided by financing activities 882 417
Effect of exchange rate changes on cash, cash equivalents and restricted cash (21) 2
Net change in cash, cash equivalents and restricted cash 158 (311)
Cash, cash equivalents and restricted cash beginning balance 663 659
Cash, cash equivalents and restricted cash ending balance $ 821 $ 348
v3.20.1
Cover - shares
3 Months Ended
Mar. 31, 2020
Apr. 30, 2020
Document Information [Line Items]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Mar. 31, 2020  
Document Transition Report false  
Entity File Number 000-50189  
Entity Registrant Name CROWN HOLDINGS, INC.  
Entity Incorporation, State or Country Code PA  
Entity Tax Identification Number 75-3099507  
Entity Address, Address Line One 770 Township Line Road  
Entity Address, City or Town Yardley  
Entity Address, State or Province PA  
Entity Address, Postal Zip Code 19067  
City Area Code 215  
Local Phone Number 698-5100  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   134,675,393
Amendment Flag false  
Document Fiscal Year Focus 2020  
Document Fiscal Period Focus Q1  
Entity Central Index Key 0001219601  
Current Fiscal Year End Date --12-31  
New York Stock Exchange    
Document Information [Line Items]    
Title of 12(b) Security Common Stock $5.00 Par Value  
Trading Symbol CCK  
Security Exchange Name NYSE  
7 3/8% Debentures Due 2026 | New York Stock Exchange    
Document Information [Line Items]    
Title of 12(b) Security 7 3/8% Debentures Due 2026  
Trading Symbol CCK26  
Security Exchange Name NYSE  
7 1/2% Debentures Due 2096 | New York Stock Exchange    
Document Information [Line Items]    
Title of 12(b) Security 7 1/2% Debentures Due 2096  
Trading Symbol CCK96  
Security Exchange Name NYSE  
v3.20.1
Intangible Assets Narrative (Details) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Finite-Lived Intangible Assets [Line Items]    
Amortization of Intangible Assets $ 45 $ 47
v3.20.1
Earnings Per Share (Details) - USD ($)
$ / shares in Units, shares in Millions, $ in Millions
3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Earnings Per Share [Abstract]    
Net income attributable to Crown Holdings $ 88 $ 103
Weighted average shares outstanding:    
Basic (in shares) 134.1 133.8
Add: dilutive stock options and restricted stock (in shares) 0.9 0.6
Diluted (in shares) 135.0 134.4
Basic earnings per share (in usd per share) $ 0.66 $ 0.77
Diluted earnings per share (in usd per share) $ 0.65 $ 0.77
Value of shares excluded from the computation of diluted earnings per share 0.4 0.2
v3.20.1
Debt - Narrative (Details)
$ in Millions
Mar. 31, 2020
EUR (€)
Mar. 31, 2020
USD ($)
Dec. 31, 2019
EUR (€)
Dec. 31, 2019
USD ($)
Fair Value, Inputs, Level 2        
Debt Instrument [Line Items]        
Long-term debt, fair value | $   $ 8,792   $ 8,410
Senior Notes | Euro .75% due 2023 [Member]        
Debt Instrument [Line Items]        
Debt, face amount € 500,000,000      
Debt instrument stated percentage 0.75% 0.75%    
Senior Secured Borrowings | Euro at EURIBOR Plus One Point Five Percentage Due Two Thousand and Twenty Four [Member]        
Debt Instrument [Line Items]        
Debt, face amount € 447,000,000   € 450,000,000  
v3.20.1
Stock-Based Compensation (Summary of Restricted Stock Transactions) (Details)
3 Months Ended
Mar. 31, 2020
shares
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]  
Nonvested stock awards outstanding at beginning of period (in shares) 2,102,654
Nonvested stock awards outstanding at end of period (in shares) 2,039,319
Time-vesting shares  
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]  
Awarded (in shares) 68,824
Released (in shares) (82,427)
Forfeitures (in shares) (47,700)
Performance-based shares  
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]  
Awarded (in shares) 161,426
Released (in shares) (163,458)
Forfeitures (in shares) 0
v3.20.1
Earnings Per Share
3 Months Ended
Mar. 31, 2020
Earnings Per Share [Abstract]  
Earnings Per Share
Earnings Per Share

The following table summarizes the computations of basic and diluted earnings per share attributable to the Company.
 
Three Months Ended
 
March 31,
 
2020
 
2019
Net income attributable to Crown Holdings
$
88

 
$
103

Weighted average shares outstanding:
 
 
 
Basic
134.1

 
133.8

Dilutive restricted stock
0.9

 
0.6

Diluted
135.0

 
134.4

Basic earnings per share
$
0.66

 
$
0.77

Diluted earnings per share
$
0.65

 
$
0.77



For the three months ended March 31, 2020 and 2019, 0.4 million and 0.2 million contingently issuable common shares were excluded from the computation of diluted earnings per share because the effect would be anti-dilutive.
v3.20.1
Receivables (Tables)
3 Months Ended
Mar. 31, 2020
Receivables [Abstract]  
Schedule of Receivables

 
March 31, 2020
 
December 31, 2019
Accounts receivable
$
1,164

 
$
1,162

Less: allowance for credit losses
(61
)
 
(62
)
Net trade receivables
1,103

 
1,100

Unbilled receivables
245

 
226

Miscellaneous receivables
206

 
202

Receivables, net
$
1,554

 
$
1,528


v3.20.1
Pension and Other Postretirement Benefits
3 Months Ended
Mar. 31, 2020
Retirement Benefits [Abstract]  
Pension and Other Postretirement Benefits
Pension and Other Postretirement Benefits

The components of net periodic pension and other postretirement benefits costs for the three months ended March 31, 2020 and 2019 were as follows:
 
Three Months Ended
 
March 31,
Pension benefits – U.S. plans
2020
 
2019
Service cost
$
5

 
$
5

Interest cost
10

 
13

Expected return on plan assets
(18
)
 
(18
)
Recognized net loss
14

 
14

Net periodic cost
$
11

 
$
14


 
Three Months Ended
 
March 31,
Pension benefits – Non-U.S. plans
2020
 
2019
Service cost
$
3

 
$
4

Interest cost
14

 
19

Expected return on plan assets
(31
)
 
(35
)
Curtailment gain

 
(14
)
Settlement loss
37

 

Recognized net loss
9

 
10

Net periodic cost / (benefit)
$
32

 
$
(16
)


 
Three Months Ended
 
March 31,
Other postretirement benefits
2020
 
2019
Interest cost
1

 
1

Recognized prior service credit
(6
)
 
(9
)
Recognized net loss
1

 
1

Net periodic benefit
$
(4
)
 
$
(7
)


In the three months ended March 31, 2020, the Company recorded settlement charges related to the payment of lump sum buy-outs to settle certain non-U.S. pension obligations using plan assets. The Company may incur additional settlement charges in 2020.

In the three months ended March 31, 2019, the Company recorded a curtailment gain to recognize prior service credits that were previously recorded in accumulated other comprehensive income in connection with the closure of a non-U.S. defined benefit pension plan.

The components of net periodic cost / (benefit) other than the service cost component are included in other pension and postretirement in the Consolidated Statement of Operations.

The following table provides information about amounts reclassified from accumulated other comprehensive income.

 
 
Three Months Ended
 
 
Details about accumulated other
 
March 31,
 
Affected line item in the
comprehensive income components
 
2020
 
2019
 
statement of operations
Actuarial losses
 
$
24

 
$
25

 
Other pension and postretirement
Settlements
 
37

 

 
Other pension and postretirement
Prior service credit
 
(6
)
 
(9
)
 
Other pension and postretirement
Curtailments
 

 
(14
)
 
Other pension and postretirement
 
 
55

 
2

 
Income before taxes
 
 
(4
)
 
(1
)
 
Provision for income taxes
Total reclassified
 
$
51

 
$
1

 
Net income

v3.20.1
Receivables
3 Months Ended
Mar. 31, 2020
Receivables [Abstract]  
Receivables
Receivables

 
March 31, 2020
 
December 31, 2019
Accounts receivable
$
1,164

 
$
1,162

Less: allowance for credit losses
(61
)
 
(62
)
Net trade receivables
1,103

 
1,100

Unbilled receivables
245

 
226

Miscellaneous receivables
206

 
202

Receivables, net
$
1,554

 
$
1,528


v3.20.1
Asbestos-Related Liabilities
3 Months Ended
Mar. 31, 2020
Liability for Asbestos and Environmental Claims [Abstract]  
Asbestos-Related Liabilities
Asbestos-Related Liabilities

Crown Cork & Seal Company, Inc. (“Crown Cork”) is one of many defendants in a substantial number of lawsuits filed throughout the U.S. by persons alleging bodily injury as a result of exposure to asbestos. These claims arose from the insulation operations of a U.S. company, the majority of whose stock Crown Cork purchased in 1963. Approximately ninety days after the stock purchase, this U.S. company sold its insulation assets and was later merged into Crown Cork.

Prior to 1998, amounts paid to asbestos claimants were covered by a fund made available to Crown Cork under a 1985 settlement with carriers insuring Crown Cork through 1976, when Crown Cork became self-insured. The fund was depleted in 1998 and the Company has no remaining coverage for asbestos-related costs.

In December 2001, the Commonwealth of Pennsylvania enacted legislation that limits the asbestos-related liabilities of Pennsylvania corporations that are successors by corporate merger to companies involved with asbestos. The legislation limits the successor’s liability for asbestos to the acquired company’s asset value adjusted for inflation. Crown Cork has paid significantly more for asbestos-related claims than the acquired company’s adjusted asset value. In November 2004, the legislation was amended to address a Pennsylvania Supreme Court decision (Ieropoli v. AC&S Corporation, et. al., No. 117 EM 2002) which held that the statute violated the Pennsylvania Constitution due to retroactive application. The Company cautions that the limitations of the statute, as amended, are subject to litigation and may not be upheld.

In June 2003, the state of Texas enacted legislation that limits the asbestos-related liabilities in Texas courts of companies such as Crown Cork that allegedly incurred these liabilities because they are successors by corporate merger to companies that had been involved with asbestos. The Texas legislation, which applies to future claims and pending claims, caps asbestos-related liabilities at the total gross value of the predecessor’s assets adjusted for inflation. Crown Cork has paid significantly more for asbestos-related claims than the total adjusted value of its predecessor’s assets.

In October 2010, the Texas Supreme Court held that the Texas legislation was unconstitutional under the Texas Constitution when applied to asbestos-related claims pending against Crown Cork when the legislation was enacted in June 2003. The Company believes that the decision of the Texas Supreme Court is limited to retroactive application of the Texas legislation to asbestos-related cases that were pending against Crown Cork in Texas on June 11, 2003 and therefore, in its accrual, continues to assign no value to claims filed after June 11, 2003.

In recent years, the states of Alabama, Arizona, Arkansas, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Michigan, Mississippi, Nebraska, North Carolina, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Utah, West Virginia, Wisconsin and Wyoming enacted legislation that limits asbestos-related liabilities under state law of companies such as Crown Cork that allegedly incurred these liabilities because they are successors by corporate merger to companies that had been involved with asbestos. The legislation, which applies to future and, with the exception of Arkansas, Georgia, South Carolina, South Dakota, West Virginia and Wyoming, pending claims, caps asbestos-related liabilities at the fair market value of the predecessor's total gross assets adjusted for inflation. Crown Cork has paid significantly more for asbestos-related claims than the total value of its predecessor's assets adjusted for inflation. Crown Cork has integrated the legislation into its claims defense strategy.

The Company further cautions that an adverse ruling in any litigation relating to the constitutionality or applicability to Crown Cork of one or more statutes that limits the asbestos-related liability of alleged defendants like Crown Cork could have a material impact on the Company.

During the three months ended March 31, 2020, the Company paid $1 to settle outstanding claims and had claims activity as follows:
Beginning claims
56,000

New claims
500

Settlements or dismissals
(500
)
Ending claims
56,000



In the fourth quarter of each year, the Company performs an analysis of outstanding claims and categorizes these claims by year of exposure and state filed. As of December 31, 2019, the Company's outstanding claims were:

Claimants alleging first exposure after 1964
16,500

Claimants alleging first exposure before or during 1964 filed in:
 
Texas
13,000

Pennsylvania
1,500

Other states that have enacted asbestos legislation
6,000

Other states
19,000

Total claims outstanding
56,000



The outstanding claims in each period exclude approximately 19,000 inactive claims. Due to the passage of time, the Company considers it unlikely that the plaintiffs in these cases will pursue further action against the Company. The exclusion of these inactive claims had no effect on the calculation of the Company’s accrual as the claims were filed in states, as described above, where the Company’s liability is limited by statute.
With respect to claimants alleging first exposure to asbestos before or during 1964, the Company does not include in its accrual any amounts for settlements in states where the Company’s liability is limited by statute except for certain pending claims in Texas as described earlier.

With respect to post-1964 claims, regardless of the existence of asbestos legislation, the Company does not include in its accrual any amounts for settlement of these claims because of increased difficulty of establishing identification of relevant insulation products as the cause of injury. Given the Company's settlement experience with post-1964 claims, it does not believe that an adverse ruling in the Texas or Pennsylvania asbestos litigation cases, or in any other state that has enacted asbestos legislation, would have a material impact on the Company with respect to such claims.

As of December 31, the percentage of outstanding claims related to claimants alleging serious diseases (primarily mesothelioma and other malignancies) were as follows:
 
2019

 
2018

Total claims
22
%
 
22
%
Pre-1964 claims in states without asbestos legislation
41
%
 
41
%


Crown Cork has entered into arrangements with plaintiffs’ counsel in certain jurisdictions with respect to claims which are not yet filed, or asserted, against it. However, Crown Cork expects claims under these arrangements to be filed or asserted against Crown Cork in the future. The projected value of these claims is included in the Company’s estimated liability as of March 31, 2020.

As of March 31, 2020, the Company’s accrual for pending and future asbestos-related claims and related legal costs was $270, including $227 for unasserted claims. The Company determines its accrual without limitation to a specific time period.

It is reasonably possible that the actual loss could be in excess of the Company’s accrual. However, the Company is unable to estimate the reasonably possible loss in excess of its accrual due to uncertainty in the following assumptions that underlie the Company’s accrual and the possibility of losses in excess of such accrual: the amount of damages sought by the claimant (which was not specified for approximately 81% of the claims outstanding at the end of 2019), the Company and claimant’s willingness to negotiate a settlement, the terms of settlements of other defendants with asbestos-related liabilities, the bankruptcy filings of other defendants (which may result in additional claims and higher settlements for non-bankrupt defendants), the nature of pending and future claims (including the seriousness of alleged disease,
whether claimants allege first exposure to asbestos before or during 1964 and the claimant’s ability to demonstrate the alleged link to Crown Cork), the volatility of the litigation environment, the defense strategies available to the Company, the level of future claims, the rate of receipt of claims, the jurisdiction in which claims are filed, and the effect of state asbestos legislation (including the validity and applicability of the Pennsylvania legislation to non-Pennsylvania jurisdictions, where the substantial majority of the Company’s asbestos cases are filed).
v3.20.1
Earnings Per Share (Tables)
3 Months Ended
Mar. 31, 2020
Earnings Per Share [Abstract]  
Computation of Basic and Diluted Earnings per Share

The following table summarizes the computations of basic and diluted earnings per share attributable to the Company.
 
Three Months Ended
 
March 31,
 
2020
 
2019
Net income attributable to Crown Holdings
$
88

 
$
103

Weighted average shares outstanding:
 
 
 
Basic
134.1

 
133.8

Dilutive restricted stock
0.9

 
0.6

Diluted
135.0

 
134.4

Basic earnings per share
$
0.66

 
$
0.77

Diluted earnings per share
$
0.65

 
$
0.77


v3.20.1
Pension and Other Postretirement Benefits (Tables)
3 Months Ended
Mar. 31, 2020
Defined Benefit Plan Disclosure [Line Items]  
Reclassification out of Accumulated Other Comprehensive Income
The following table provides information about amounts reclassified from accumulated other comprehensive income.

 
 
Three Months Ended
 
 
Details about accumulated other
 
March 31,
 
Affected line item in the
comprehensive income components
 
2020
 
2019
 
statement of operations
Actuarial losses
 
$
24

 
$
25

 
Other pension and postretirement
Settlements
 
37

 

 
Other pension and postretirement
Prior service credit
 
(6
)
 
(9
)
 
Other pension and postretirement
Curtailments
 

 
(14
)
 
Other pension and postretirement
 
 
55

 
2

 
Income before taxes
 
 
(4
)
 
(1
)
 
Provision for income taxes
Total reclassified
 
$
51

 
$
1

 
Net income

Other Postretirement Benefits  
Defined Benefit Plan Disclosure [Line Items]  
Components of Net Periodic Pension and Other Postretirement Benefits Costs
 
Three Months Ended
 
March 31,
Other postretirement benefits
2020
 
2019
Interest cost
1

 
1

Recognized prior service credit
(6
)
 
(9
)
Recognized net loss
1

 
1

Net periodic benefit
$
(4
)
 
$
(7
)

U.S. | Pension Plan  
Defined Benefit Plan Disclosure [Line Items]  
Components of Net Periodic Pension and Other Postretirement Benefits Costs

The components of net periodic pension and other postretirement benefits costs for the three months ended March 31, 2020 and 2019 were as follows:
 
Three Months Ended
 
March 31,
Pension benefits – U.S. plans
2020
 
2019
Service cost
$
5

 
$
5

Interest cost
10

 
13

Expected return on plan assets
(18
)
 
(18
)
Recognized net loss
14

 
14

Net periodic cost
$
11

 
$
14


Pension Benefits - Non-U.S. Plans | Pension Plan  
Defined Benefit Plan Disclosure [Line Items]  
Components of Net Periodic Pension and Other Postretirement Benefits Costs
 
Three Months Ended
 
March 31,
Pension benefits – Non-U.S. plans
2020
 
2019
Service cost
$
3

 
$
4

Interest cost
14

 
19

Expected return on plan assets
(31
)
 
(35
)
Curtailment gain

 
(14
)
Settlement loss
37

 

Recognized net loss
9

 
10

Net periodic cost / (benefit)
$
32

 
$
(16
)

v3.20.1
Derivative and Other Financial Instruments - Cash Flow Hedges (Details) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Derivative Instruments, Gain (Loss) [Line Items]    
Net sales $ 2,757 $ 2,755
Cost of products sold 2,220 2,210
Income Tax Expense (Benefit) (38) (48)
Net income 114 131
Derivatives in cash flow hedges | Interest Rate Swap    
Derivative Instruments, Gain (Loss) [Line Items]    
Amount of gain/(loss) recognized in AOCI (effective portion) (1) 0
Designated as Hedging Instrument | Derivatives in cash flow hedges    
Derivative Instruments, Gain (Loss) [Line Items]    
Amount of gain/(loss) recognized in AOCI (effective portion) (39) 6
Designated as Hedging Instrument | Derivatives in cash flow hedges | Foreign exchange    
Derivative Instruments, Gain (Loss) [Line Items]    
Amount of gain/(loss) recognized in AOCI (effective portion) 1 (4)
Designated as Hedging Instrument | Derivatives in cash flow hedges | Commodities    
Derivative Instruments, Gain (Loss) [Line Items]    
Amount of gain/(loss) recognized in AOCI (effective portion) (39) 10
Reclassification out of Accumulated Other Comprehensive Income | Designated as Hedging Instrument | Derivatives in cash flow hedges    
Derivative Instruments, Gain (Loss) [Line Items]    
Amount of gain/(loss) reclassified from AOCI into earnings, before tax (9) (8)
Income Tax Expense (Benefit) 2 2
Net income (7) (6)
Reclassification out of Accumulated Other Comprehensive Income | Designated as Hedging Instrument | Derivatives in cash flow hedges | Foreign exchange    
Derivative Instruments, Gain (Loss) [Line Items]    
Net sales (1) (1)
Cost of products sold (1) 0
Reclassification out of Accumulated Other Comprehensive Income | Designated as Hedging Instrument | Derivatives in cash flow hedges | Commodities    
Derivative Instruments, Gain (Loss) [Line Items]    
Net sales 3 3
Cost of products sold $ (10) $ (10)
v3.20.1
Derivative and Other Financial Instruments - Fair Value Hedge Carrying Amounts (Details) - Derivatives in fair value hedges - Designated as Hedging Instrument - USD ($)
$ in Millions
Mar. 31, 2020
Dec. 31, 2019
Derivative [Line Items]    
Cumulative amount of fair value hedging adjustment included in the carrying about of the hedged assets $ 13 $ 2
Receivables, net    
Derivative [Line Items]    
Carrying amount of hedged assets 11 12
Accrued liabilities    
Derivative [Line Items]    
Accounts payable $ (90) $ (83)
v3.20.1
Segment Information - Reconciliation of Segment Income (Details) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]    
Segment income $ 246 $ 262
Restructuring and other (7) (4)
Amortization of intangibles (45) (47)
Other pension and postretirement (31) 18
Interest expense (80) (98)
Interest income 4 3
Foreign exchange 12 (1)
Income before income taxes 151 178
Operating Segments    
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]    
Segment income 317 318
Operating Segments | Americas Beverage    
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]    
Segment income 134 113
Operating Segments | European Beverage    
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]    
Segment income 39 39
Operating Segments | European Food    
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]    
Segment income 33 48
Operating Segments | Asia Pacific    
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]    
Segment income 45 45
Segment Reconciling Items    
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]    
Restructuring and other (7) (4)
Amortization of intangibles (45) (47)
Restructuring and Related Cost, Accelerated Depreciation 0 (2)
Other pension and postretirement (31) 18
Loss from early extinguishments of debt 0 (6)
Interest expense (80) (98)
Interest income 4 3
Foreign exchange 12 (1)
Segment Reconciling Items | Non-reportable segments    
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]    
Segment income 19 36
Corporate, Non-Segment    
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]    
Corporate and unallocated items $ (38) $ (39)
v3.20.1
Inventories
3 Months Ended
Mar. 31, 2020
Inventory, Gross [Abstract]  
Inventories
Inventories

Inventories are stated at the lower of cost or market, with cost principally determined under the first-in first-out ("FIFO") or average cost method.
 
March 31, 2020
 
December 31, 2019
Raw materials and supplies
$
916

 
$
905

Work in process
158

 
151

Finished goods
594

 
570

 
$
1,668

 
$
1,626


v3.20.1
Commitments and Contingent Liabilities
3 Months Ended
Mar. 31, 2020
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingent Liabilities
Commitments and Contingent Liabilities

The Company, along with others in most cases, has been identified by the U.S. Environmental Protection Agency or a comparable state environmental agency as a Potentially Responsible Party (“PRP”) at a number of sites and has recorded aggregate accruals of $8 for its share of estimated future remediation costs at these sites. The Company has been identified as having either directly or indirectly disposed of commercial or industrial waste at the sites subject to the accrual, and where appropriate and supported by available information, generally has agreed to be responsible for a percentage of future remediation costs based on an estimated volume of materials disposed in proportion to the total materials disposed at each site. The Company has not had monetary sanctions imposed nor has the Company been notified of any potential monetary sanctions at any of the sites.

The Company has also recorded aggregate accruals of $6 for remediation activities at various worldwide locations that are owned by the Company and for which the Company is not a member of a PRP group. Although the Company believes
its accruals are adequate to cover its portion of future remediation costs, there can be no assurance that the ultimate payments will not exceed the amount of the Company’s accruals and will not have a material effect on its results of operations, financial position and cash flow. Any possible loss or range of potential loss that may be incurred in excess of the recorded accruals cannot be estimated.

In March 2015, the Bundeskartellamt, or German Federal Cartel Office (“FCO”), conducted unannounced inspections of the premises of several metal packaging manufacturers, including a German subsidiary of the Company. The local court order authorizing the inspection cited FCO suspicions of anti-competitive agreements in the German market for the supply of metal packaging products.  The Company conducted an internal investigation into the matter and discovered instances of inappropriate conduct by certain employees of German subsidiaries of the Company. The Company cooperated with the FCO and submitted a leniency application with the FCO which disclosed the findings of its internal investigation to date.  In April 2018, the FCO discontinued its national investigation and referred the matter to the European Commission (the “Commission”). Following the referral, Commission officials conducted unannounced inspections of the premises of several metal packaging manufacturers, including Company subsidiaries in Germany, France and the United Kingdom. 

The Commission's investigation is ongoing and, to date, the Commission has not officially charged the Company or any of its subsidiaries with violations of competition law.  The Company is cooperating with the Commission and submitted a leniency application with the Commission with respect to the findings of the investigation in Germany referenced above.  This application may lead to the reduction of possible future penalties. At this stage of the investigation the Company believes that a loss is probable but is unable to predict the ultimate outcome of the Commission’s investigation and is unable to estimate the loss or possible range of losses that could be incurred, and has therefore not recorded a charge in connection with the actions by the Commission.  If the Commission finds that the Company or any of its subsidiaries violated competition law, fines levied by the Commission could be material to the Company's operating results and cash flows for the periods in which they are resolved or become reasonably estimable.

In March 2017, U.S. Customs and Border Protection (“CBP”) at the Port of Milwaukee issued a penalty notification alleging that certain of the Company’s subsidiaries intentionally misclassified the importation of certain goods into the U.S. during the period 2004-2009. CBP initially assessed a penalty of $18 and subsequently mitigated to $6. The Company has acknowledged to CBP that the goods were misclassified and has paid all related duties. The Company has asserted that the misclassification was unintentional and disputes the penalty assessment. At the present time, based on the information available, the Company does not believe that a loss for the alleged intentional misclassification is probable. There can be no assurance the Company will be successful in contesting the assessed penalty.

The Company and its subsidiaries are also subject to various other lawsuits and claims with respect to governmental, labor, environmental, securities, vendor and other matters arising out of the Company’s normal course of business. While the impact on future financial results is not subject to reasonable estimation because considerable uncertainty exists, management believes that the ultimate liabilities resulting from such lawsuits and claims will not materially affect the Company’s consolidated earnings, financial position or cash flow.

The Company has various commitments to purchase materials, supplies and utilities as part of the ordinary course of business. The Company’s basic raw materials for its products are steel and aluminum, both of which are purchased from multiple sources. The Company is subject to fluctuations in the cost of these raw materials (including in connection with tariffs recently imposed in the U.S., which may increase costs) and has periodically adjusted its selling prices to reflect these movements. There can be no assurance that the Company will be able to fully recover any increases or fluctuations in raw material costs from its customers. The Company also has commitments for standby letters of credit and for purchases of capital assets.

At March 31, 2020, the Company was party to certain indemnification agreements covering environmental remediation, lease payments and other potential costs associated with properties sold or businesses divested. The Company accrues for costs related to these items when it is probable that a liability has been incurred and the amount can be reasonably estimated.
v3.20.1
Accumulated Other Comprehensive Income
3 Months Ended
Mar. 31, 2020
Equity [Abstract]  
Accumulated Other Comprehensive Income
Accumulated Other Comprehensive Income

The following table provides information about the changes in each component of accumulated other comprehensive income.
 
 
Defined benefit plans
 
Foreign currency translation
 
Gains and losses on cash flow hedges
 
Total
Balance at January 1, 2019
 
$
(1,533
)
 
$
(1,817
)
 
$
(24
)
 
$
(3,374
)
Other comprehensive income before reclassifications
13

 
59

 
6

 
78

Amounts reclassified from accumulated other comprehensive income
1

 

 
6

 
7

Other comprehensive income
 
14

 
59

 
12

 
85

Balance at March 31, 2019
 
$
(1,519
)
 
$
(1,758
)
 
$
(12
)
 
$
(3,289
)
 
 
 
 
 
 
 
 
 
Balance at January 1, 2020
 
$
(1,449
)
 
$
(1,668
)
 
$
(14
)
 
$
(3,131
)
Other comprehensive income / (loss) before reclassifications
206

 
(316
)
 
(39
)
 
(149
)
Amounts reclassified from accumulated other comprehensive income
51

 

 
7

 
58

Other comprehensive income / (loss)
 
257

 
(316
)
 
(32
)
 
(91
)
Balance at March 31, 2020
 
$
(1,192
)
 
$
(1,984
)
 
$
(46
)
 
$
(3,222
)


See Note J and Note L for further details of amounts related to cash flow hedges and defined benefit plans.
v3.20.1
Revenue (Tables)
3 Months Ended
Mar. 31, 2020
Revenue from Contract with Customer [Abstract]  
Disaggregation of Revenue [Table Text Block]
 
Three Months Ended
 
March 31,
 
2020
 
2019
Revenue recognized over time
$
1,475

 
$
1,365

Revenue recognized at a point in time
1,282

 
1,390

Total revenue
$
2,757

 
$
2,755


Net Contract Assets and Liabilities Net contract assets were as follows:
 
March 31, 2020
 
December 31, 2019
Contract assets included in prepaid and other current assets
$
32

 
$
30

Contract liabilities included in accrued liabilities
(4
)
 
(5
)
Net contract asset
$
28

 
$
25


v3.20.1
Debt (Tables)
3 Months Ended
Mar. 31, 2020
Debt Disclosure [Abstract]  
Summary of Outstanding Debt

The Company's outstanding debt was as follows:
 
March 31, 2020
 
December 31, 2019
 
Principal
 
Carrying
 
Principal
 
Carrying
 
outstanding
 
amount
 
outstanding
 
amount
Short-term debt
$
100

 
$
100

 
$
75

 
$
75

 

 

 
 
 
 
Long-term debt

 

 
 
 
 
Senior secured borrowings:

 

 
 
 
 
Revolving credit facilities
828

 
828

 

 

Term loan facilities

 


 
 
 
 
U.S. dollar at LIBOR + 1.5% due 2024
1,093

 
1,086

 
1,100

 
1,094

Euro at EURIBOR + 1.5% due 20241
492

 
492

 
505

 
504

Senior notes and debentures:

 

 
 
 
 
€650 at 4.0% due 2022
715

 
711

 
729

 
725

U. S. dollar at 4.50% due 2023
1,000

 
996

 
1,000

 
995

€335 at 2.25% due 2023
369

 
365

 
376

 
372

€500 at 0.75% due 2023
605

 
600

 
617

 
610

€600 at 2.625% due 2024
661

 
656

 
673

 
668

€600 at 3.375% due 2025
661

 
656

 
673

 
667

U.S. dollar at 4.25% due 2026
400

 
395

 
400

 
395

U.S. dollar at 4.75% due 2026
875

 
863

 
875

 
863

U.S. dollar at 7.375% due 2026
350

 
348

 
350

 
348

€500 at 2.875% due 2026
550

 
543

 
561

 
554

U.S. dollar at 7.50% due 2096
40

 
40

 
40

 
40

Other indebtedness in various currencies
130

 
130

 
45

 
45

Total long-term debt
8,769

 
8,709

 
7,944

 
7,880

Less current maturities
(78
)
 
(78
)
 
(62
)
 
(62
)
Total long-term debt, less current maturities
$
8,691

 
$
8,631

 
$
7,882

 
$
7,818



(1) €447 and €450 at March 31, 2020 and December 31, 2019
v3.20.1
Derivative and Other Financial Instruments - Fair Value Hedges and Contracts Not Designated as Hedges (Details) - Derivatives not designated as hedges - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Derivative [Line Items]    
Gain (loss) on derivative instruments, net, pretax $ 6 $ (15)
Net sales | Foreign exchange    
Derivative [Line Items]    
Gain (loss) on derivative instruments, net, pretax (1) (1)
Cost of products sold | Foreign exchange    
Derivative [Line Items]    
Gain (loss) on derivative instruments, net, pretax 1 1
Foreign exchange | Foreign exchange    
Derivative [Line Items]    
Gain (loss) on derivative instruments, net, pretax $ 6 $ (15)
v3.20.1
Derivative and Other Financial Instruments - Offsetting of Derivative Assets and Liabilities (Details) - USD ($)
$ in Millions
Mar. 31, 2020
Dec. 31, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract]    
Gross Amounts Recognized in the Balance Sheet, Derivative Assets $ 200 $ 83
Gross Amounts Not Offset in the Balance Sheet, Derivative Assets 21 16
Net Amount, Derivative Assets 179 67
Gross Amounts Recognized in the Balance Sheet, Derivative Liabilities 103 49
Gross Amounts Not Offset in the Balance Sheet, Derivative Liabilities 21 16
Net Amount, Derivative Liabilities $ 82 $ 33
v3.20.1
Segment Information - Narrative (Details) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Segment Reporting Information [Line Items]    
Intercompany profit eliminated $ 1 $ 1
Non-reportable segments    
Segment Reporting Information [Line Items]    
Segment description The primary sources of revenue included in non-reportable segments are the Company's food can and closures business in North America, aerosol can businesses in North America and Europe, its promotional packaging business in Europe and its tooling and equipment operations in the U.S. and U.K.  
v3.20.1
Consolidated Balance Sheets (Condensed) - USD ($)
$ in Millions
Mar. 31, 2020
Dec. 31, 2019
Assets    
Cash and cash equivalents $ 765 $ 607
Receivables, net 1,554 1,528
Inventories 1,668 1,626
Prepaid expenses and other current assets 263 241
Total current assets 4,250 4,002
Goodwill 4,249 4,430
Intangible assets, net 1,893 2,015
Property, plant and equipment, net 3,752 3,887
Operating lease right-of-use assets, net 207 204
Other non-current assets 1,182 967
Total 15,533 15,505
Current liabilities    
Short-term debt 100 75
Current maturities of long-term debt 78 62
Current portion of operating lease liabilities 53 51
Accounts payable 2,077 2,646
Accrued liabilities 930 1,065
Total current liabilities 3,238 3,899
Long-term debt, excluding current maturities 8,631 7,818
Current portion of operating lease liabilities 157 156
Postretirement and pension liabilities 658 683
Other non-current liabilities 796 857
Commitments and contingent liabilities
Noncontrolling interests 389 379
Crown Holdings shareholders’ equity 1,664 1,713
Total equity 2,053 2,092
Total $ 15,533 $ 15,505
v3.20.1
Asbestos-Related Liabilities - Narrative (Details)
$ in Millions
3 Months Ended
Mar. 31, 2020
USD ($)
inactive_claim
Dec. 31, 2019
Liability for Asbestos and Environmental Claims [Abstract]    
Holding period for insulation operations (in days) 90 days  
Liability for asbestos and environmental claims net claims paid $ 1  
Inactive claims (in claims) | inactive_claim 19,000  
Accrued asbestos claims and related legal costs $ 270  
Unasserted claims $ 227  
Percentage of claims that do not specify damages   81.00%
v3.20.1
Intangible Assets Gross Carrying Amount and Accumulated Amortization of Finite-lived Intangible Assets (Details) - USD ($)
$ in Millions
Mar. 31, 2020
Dec. 31, 2019
Finite-Lived Intangible Assets [Line Items]    
Gross $ 2,379 $ 2,484
Accumulated amortization (486) (469)
Net 1,893 2,015
Customer relationships    
Finite-Lived Intangible Assets [Line Items]    
Gross 1,554 1,621
Accumulated amortization (347) (331)
Net 1,207 1,290
Trade names    
Finite-Lived Intangible Assets [Line Items]    
Gross 535 541
Accumulated amortization (45) (40)
Net 490 501
Technology    
Finite-Lived Intangible Assets [Line Items]    
Gross 156 158
Accumulated amortization (46) (41)
Net 110 117
Long term supply contracts    
Finite-Lived Intangible Assets [Line Items]    
Gross 120 150
Accumulated amortization (39) (48)
Net 81 102
Patents [Member]    
Finite-Lived Intangible Assets [Line Items]    
Gross 14 14
Accumulated amortization (9) (9)
Net $ 5 $ 5
v3.20.1
Accounting and Reporting Developments
3 Months Ended
Mar. 31, 2020
Accounting Policies [Abstract]  
Accounting and Reporting Developments
Accounting and Reporting Developments

Recently Adopted Accounting Standards
In June 2016, the FASB issued new guidance on the accounting for credit losses on financial instruments. The new standard introduces an approach, based on expected losses, to estimate credit losses on certain types of financial instruments. The new approach to estimating credit losses (referred to as the current expected credit losses model) applies to most financial assets measured at amortized cost and certain other instruments, including trade and other receivables, loans, held-to-maturity debt securities, net investments in operating leases and off-balance-sheet credit exposures. The guidance became effective for the Company on January 1, 2020 and did not have a material impact on the Company's consolidated financial statements.

In August 2018, the FASB issued new guidance which aligns the accounting for implementation costs incurred in a cloud computing arrangement that is a service arrangement (i.e. hosting arrangement) with the guidance on capitalizing costs for internal use software. The Company adopted the guidance on a prospective basis on January 1, 2020. The guidance did not have a material impact on the Company's consolidated financial statements.

Recently Issued Accounting Standards

In December 2019, the FASB issued new guidance to simplify the accounting for income taxes by, among other things, reducing complexity in the interim-period accounting for year-to-date loss limitations and changes in tax laws. The guidance is effective for the Company on January 1, 2021. The Company is currently evaluating the impact of adopting this standard and does not expect the guidance to have a material impact on its consolidated financial statements.

In March 2020, the FASB issued guidance which provides optional expedients and exceptions for applying GAAP to certain contract modifications and hedging relationships that reference London Inter-bank Offered Rate (LIBOR) or another reference rate expected to be discontinued. The guidance is effective upon issuance and can be applied through December 31, 2022. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.
v3.20.1
Pension and Other Postretirement Benefits (Details) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Other Postretirement Benefits    
Defined Benefit Plan Disclosure [Line Items]    
Interest cost $ 1 $ 1
Recognized prior service credit (6) (9)
Recognized net loss 1 1
Net periodic cost (benefit) (4) (7)
U.S. | Pension Plan    
Defined Benefit Plan Disclosure [Line Items]    
Service cost 5 5
Interest cost 10 13
Expected return on plan assets (18) (18)
Recognized net loss 14 14
Net periodic cost (benefit) 11 14
Pension Benefits - Non-U.S. Plans | Pension Plan    
Defined Benefit Plan Disclosure [Line Items]    
Service cost 3 4
Interest cost 14 19
Expected return on plan assets (31) (35)
Pension settlements and curtailments 0 (14)
Defined Benefit Plan, Benefit Obligation, (Increase) Decrease for Settlement 37 0
Recognized net loss 9 10
Net periodic cost (benefit) $ 32 $ (16)
v3.20.1
Stock-Based Compensation (Narrative) (Details)
$ / shares in Units, $ in Millions
3 Months Ended
Mar. 31, 2020
USD ($)
$ / shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Unrecognized compensation cost | $ $ 70
Cost expected to be recognized, weighted average period (in years) 2 years 9 months 29 days
Performance-Based Restricted Stock  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Vesting period for shares awarded (in years) 3 years
Weighted average grant-date fair value (in dollars per share) | $ / shares $ 72.47
Weighted average stock price volatility 22.00%
Expected term (in years) 3 years
Risk free interest rate 1.60%
Time Vested Stock  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Weighted average grant-date fair value (in dollars per share) | $ / shares $ 70.31
Restricted Stock  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Aggregate market value of shares released and issued | $ $ 12
Minimum | Time Vested Stock  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Vesting period for shares awarded (in years) 3 years
Maximum | Time Vested Stock  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Vesting period for shares awarded (in years) 5 years
Performance Metric, Market Conditions, Total shareholder Returns | Performance-Based Restricted Stock  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Performance metric, term of award period 3 years
Cliff vesting period 3 years
Level of market performance achieved based on shares awarded, minimum (as a percent) 0.00%
Level of market performance achieved based on shares awarded, maximum (as a percent) 200.00%
Performance Metric, Average Return on Invested Capital | Performance-Based Restricted Stock  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Performance metric, term of award period 3 years
Cliff vesting period 3 years
Level of market performance achieved based on shares awarded, minimum (as a percent) 0.00%
Level of market performance achieved based on shares awarded, maximum (as a percent) 200.00%
v3.20.1
Segment Information - Information about Operating Segments (Details) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Segment Reporting Information [Line Items]    
Income from operations $ 246 $ 262
Net sales 2,757 2,755
Operating Segments    
Segment Reporting Information [Line Items]    
Income from operations 317 318
Net sales 2,442 2,440
Operating Segments | Americas Beverage    
Segment Reporting Information [Line Items]    
Income from operations 134 113
Net sales 871 788
Operating Segments | European Beverage    
Segment Reporting Information [Line Items]    
Income from operations 39 39
Net sales 346 339
Operating Segments | European Food    
Segment Reporting Information [Line Items]    
Income from operations 33 48
Net sales 402 423
Operating Segments | Asia Pacific    
Segment Reporting Information [Line Items]    
Income from operations 45 45
Net sales 301 321
Operating Segments | Transit Packaging [Member]    
Segment Reporting Information [Line Items]    
Income from operations 66 73
Net sales 522 569
Segment Reconciling Items | Non-reportable segments    
Segment Reporting Information [Line Items]    
Income from operations 19 36
Net sales 315 315
Intersegment Eliminations    
Segment Reporting Information [Line Items]    
Net sales 61 52
Intersegment Eliminations | Americas Beverage    
Segment Reporting Information [Line Items]    
Net sales 6 4
Intersegment Eliminations | European Beverage    
Segment Reporting Information [Line Items]    
Net sales 1 1
Intersegment Eliminations | European Food    
Segment Reporting Information [Line Items]    
Net sales 21 18
Intersegment Eliminations | Transit Packaging [Member]    
Segment Reporting Information [Line Items]    
Net sales 4 3
Intersegment Eliminations | Non-reportable segments    
Segment Reporting Information [Line Items]    
Net sales 29 26
Intersegment Eliminations | Operating Segments    
Segment Reporting Information [Line Items]    
Net sales $ 32 $ 26
v3.20.1
Segment Information
3 Months Ended
Mar. 31, 2020
Segment Reporting [Abstract]  
Segment Information
Segment Information

The Company evaluates performance and allocates resources based on segment income, which is not a defined term under GAAP. The Company defines segment income 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.

Segment income should not be considered in isolation or as a substitute for net income prepared in accordance with GAAP and may not be comparable to calculations of similarly titled measures by other companies.     

The tables below present information about the Company's operating segments.

 
External Sales
 
Three Months Ended
 
March 31,
 
2020
 
2019
Americas Beverage
$
871

 
$
788

European Beverage
346

 
339

European Food
402

 
423

Asia Pacific
301

 
321

Transit Packaging
522

 
569

Total reportable segments
2,442


2,440

Non-reportable segments
315

 
315

Total
$
2,757

 
$
2,755



The primary sources of revenue included in non-reportable segments are the Company's food can and closures business in North America, aerosol can businesses in North America and Europe, its promotional packaging business in Europe and its tooling and equipment operations in the U.S. and U.K.

 
Intersegment Sales
 
Three Months Ended
 
March 31,
 
2020
 
2019
Americas Beverage
$
6

 
$
4

European Beverage
1

 
1

European Food
21

 
18

Transit Packaging
4

 
3

Total reportable segments
32


26

Non-reportable segments
29

 
26

Total
$
61

 
$
52



Intersegment sales primarily include sales of ends and components used to manufacture cans, such as printed and coated metal, as well as parts and equipment used in the manufacturing process.
 
Segment Income
 
Three Months Ended
 
March 31,
 
2020
 
2019
Americas Beverage
$
134

 
$
113

European Beverage
39

 
39

European Food
33

 
48

Asia Pacific
45

 
45

Transit Packaging
66

 
73

Total reportable segments
$
317


$
318



A reconciliation of segment income of reportable segments to income before income taxes is as follows:
 
Three Months Ended
 
March 31,
 
2020
 
2019
Segment income of reportable segments
$
317

 
$
318

Segment income of non-reportable segments
19

 
36

Corporate and unallocated items
(38
)
 
(39
)
Restructuring and other
(7
)
 
(4
)
Amortization of intangibles
(45
)
 
(47
)
Accelerated depreciation

 
(2
)
Other pension and postretirement
(31
)
 
18

Loss from early extinguishments of debt

 
(6
)
Interest expense
(80
)
 
(98
)
Interest income
4

 
3

Foreign exchange
12

 
(1
)
Income before income taxes
$
151

 
$
178



For the three months ended March 31, 2020, intercompany profits of less than $1 were eliminated within segment income of non-reportable segments.

For the three months ended March 31, 2019, intercompany profits of $1 were eliminated within segment income of non-reportable segments.

Corporate and unallocated items includes corporate and division administrative costs, technology costs, and unallocated items such as stock-based compensation.
v3.20.1
Inventories (Tables)
3 Months Ended
Mar. 31, 2020
Inventory, Gross [Abstract]  
Components of Inventories
 
March 31, 2020
 
December 31, 2019
Raw materials and supplies
$
916

 
$
905

Work in process
158

 
151

Finished goods
594

 
570

 
$
1,668

 
$
1,626


v3.20.1
Accumulated Other Comprehensive Income (Tables)
3 Months Ended
Mar. 31, 2020
Equity [Abstract]  
Schedule of Accumulated Other Comprehensive Income (Loss)

The following table provides information about the changes in each component of accumulated other comprehensive income.
 
 
Defined benefit plans
 
Foreign currency translation
 
Gains and losses on cash flow hedges
 
Total
Balance at January 1, 2019
 
$
(1,533
)
 
$
(1,817
)
 
$
(24
)
 
$
(3,374
)
Other comprehensive income before reclassifications
13

 
59

 
6

 
78

Amounts reclassified from accumulated other comprehensive income
1

 

 
6

 
7

Other comprehensive income
 
14

 
59

 
12

 
85

Balance at March 31, 2019
 
$
(1,519
)
 
$
(1,758
)
 
$
(12
)
 
$
(3,289
)
 
 
 
 
 
 
 
 
 
Balance at January 1, 2020
 
$
(1,449
)
 
$
(1,668
)
 
$
(14
)
 
$
(3,131
)
Other comprehensive income / (loss) before reclassifications
206

 
(316
)
 
(39
)
 
(149
)
Amounts reclassified from accumulated other comprehensive income
51

 

 
7

 
58

Other comprehensive income / (loss)
 
257

 
(316
)
 
(32
)
 
(91
)
Balance at March 31, 2020
 
$
(1,192
)
 
$
(1,984
)
 
$
(46
)
 
$
(3,222
)


See Note J and Note L for further details of amounts related to cash flow hedges and defined benefit plans.
v3.20.1
Asbestos-Related Liabilities (Tables)
3 Months Ended
Mar. 31, 2020
Liability for Asbestos and Environmental Claims [Abstract]  
Summary of Claims Activity
During the three months ended March 31, 2020, the Company paid $1 to settle outstanding claims and had claims activity as follows:
Beginning claims
56,000

New claims
500

Settlements or dismissals
(500
)
Ending claims
56,000


Summary of Outstanding Asbestos Claims by Years of Exposure and State Filed
In the fourth quarter of each year, the Company performs an analysis of outstanding claims and categorizes these claims by year of exposure and state filed. As of December 31, 2019, the Company's outstanding claims were:

Claimants alleging first exposure after 1964
16,500

Claimants alleging first exposure before or during 1964 filed in:
 
Texas
13,000

Pennsylvania
1,500

Other states that have enacted asbestos legislation
6,000

Other states
19,000

Total claims outstanding
56,000


Summary of Percentage of Outstanding Claims Related to Claimants Alleging Serious Diseases
As of December 31, the percentage of outstanding claims related to claimants alleging serious diseases (primarily mesothelioma and other malignancies) were as follows:
 
2019

 
2018

Total claims
22
%
 
22
%
Pre-1964 claims in states without asbestos legislation
41
%
 
41
%

v3.20.1
Segment Information (Tables)
3 Months Ended
Mar. 31, 2020
Segment Reporting [Abstract]  
Information of Information about Operating Segments
The tables below present information about the Company's operating segments.

 
External Sales
 
Three Months Ended
 
March 31,
 
2020
 
2019
Americas Beverage
$
871

 
$
788

European Beverage
346

 
339

European Food
402

 
423

Asia Pacific
301

 
321

Transit Packaging
522

 
569

Total reportable segments
2,442


2,440

Non-reportable segments
315

 
315

Total
$
2,757

 
$
2,755



The primary sources of revenue included in non-reportable segments are the Company's food can and closures business in North America, aerosol can businesses in North America and Europe, its promotional packaging business in Europe and its tooling and equipment operations in the U.S. and U.K.

 
Intersegment Sales
 
Three Months Ended
 
March 31,
 
2020
 
2019
Americas Beverage
$
6

 
$
4

European Beverage
1

 
1

European Food
21

 
18

Transit Packaging
4

 
3

Total reportable segments
32


26

Non-reportable segments
29

 
26

Total
$
61

 
$
52



Intersegment sales primarily include sales of ends and components used to manufacture cans, such as printed and coated metal, as well as parts and equipment used in the manufacturing process.
 
Segment Income
 
Three Months Ended
 
March 31,
 
2020
 
2019
Americas Beverage
$
134

 
$
113

European Beverage
39

 
39

European Food
33

 
48

Asia Pacific
45

 
45

Transit Packaging
66

 
73

Total reportable segments
$
317


$
318


Reconciliation of Segment Income
A reconciliation of segment income of reportable segments to income before income taxes is as follows:
 
Three Months Ended
 
March 31,
 
2020
 
2019
Segment income of reportable segments
$
317

 
$
318

Segment income of non-reportable segments
19

 
36

Corporate and unallocated items
(38
)
 
(39
)
Restructuring and other
(7
)
 
(4
)
Amortization of intangibles
(45
)
 
(47
)
Accelerated depreciation

 
(2
)
Other pension and postretirement
(31
)
 
18

Loss from early extinguishments of debt

 
(6
)
Interest expense
(80
)
 
(98
)
Interest income
4

 
3

Foreign exchange
12

 
(1
)
Income before income taxes
$
151

 
$
178


v3.20.1
Restructuring and Other
3 Months Ended
Mar. 31, 2020
Restructuring Reserve [Abstract]  
Restructuring and Other
Restructuring and Other

The Company recorded restructuring and other charges / (benefits) as follows:
 
Three Months Ended
 
March 31,
 
2020
 
2019
Asset impairments and sales
$
1

 
$
4

Restructuring
3

 
9

Other costs / (income)
3

 
(9
)
 
$
7

 
$
4



For the three months ended March 31, 2020, restructuring included charges related to internal reorganizations within the Transit Packaging division, including headcount reductions.

For the three months ended March 31, 2019, asset impairments and sales included $6 related to a fire at a production facility in Asia and restructuring included a charge of $8 related to headcount reductions in the Company's European Division. Asset impairment and sales also included gains on asset sales related to prior restructuring actions.

For the three months ended March 31, 2019, other income related to gains arising from favorable court rulings related to the recovery of indirect taxes paid in prior years by certain of the Company's Brazilian subsidiaries.

At March 31, 2020, the Company had restructuring accruals of $15, primarily related to current and prior year actions to reduce manufacturing capacity and headcount in its European businesses. The Company expects to pay these amounts over the next twelve months. The Company continues to review its supply and demand profile and long-term plans in its businesses, and it is possible that the Company may record additional restructuring charges in the future.
v3.20.1
Debt
3 Months Ended
Mar. 31, 2020
Debt Disclosure [Abstract]  
Debt
Debt

The Company's outstanding debt was as follows:
 
March 31, 2020
 
December 31, 2019
 
Principal
 
Carrying
 
Principal
 
Carrying
 
outstanding
 
amount
 
outstanding
 
amount
Short-term debt
$
100

 
$
100

 
$
75

 
$
75

 

 

 
 
 
 
Long-term debt

 

 
 
 
 
Senior secured borrowings:

 

 
 
 
 
Revolving credit facilities
828

 
828

 

 

Term loan facilities

 


 
 
 
 
U.S. dollar at LIBOR + 1.5% due 2024
1,093

 
1,086

 
1,100

 
1,094

Euro at EURIBOR + 1.5% due 20241
492

 
492

 
505

 
504

Senior notes and debentures:

 

 
 
 
 
€650 at 4.0% due 2022
715

 
711

 
729

 
725

U. S. dollar at 4.50% due 2023
1,000

 
996

 
1,000

 
995

€335 at 2.25% due 2023
369

 
365

 
376

 
372

€500 at 0.75% due 2023
605

 
600

 
617

 
610

€600 at 2.625% due 2024
661

 
656

 
673

 
668

€600 at 3.375% due 2025
661

 
656

 
673

 
667

U.S. dollar at 4.25% due 2026
400

 
395

 
400

 
395

U.S. dollar at 4.75% due 2026
875

 
863

 
875

 
863

U.S. dollar at 7.375% due 2026
350

 
348

 
350

 
348

€500 at 2.875% due 2026
550

 
543

 
561

 
554

U.S. dollar at 7.50% due 2096
40

 
40

 
40

 
40

Other indebtedness in various currencies
130

 
130

 
45

 
45

Total long-term debt
8,769

 
8,709

 
7,944

 
7,880

Less current maturities
(78
)
 
(78
)
 
(62
)
 
(62
)
Total long-term debt, less current maturities
$
8,691

 
$
8,631

 
$
7,882

 
$
7,818



(1) €447 and €450 at March 31, 2020 and December 31, 2019
 
The estimated fair value of the Company’s long-term borrowings, using a market approach incorporating Level 2 inputs such as quoted market prices for the same or similar issues, was $8,792 at March 31, 2020 and $8,410 at December 31, 2019.
v3.20.1
Debt - Summary of Outstanding Debt (Details)
$ in Millions
3 Months Ended
Mar. 31, 2020
EUR (€)
Mar. 31, 2020
USD ($)
Dec. 31, 2019
EUR (€)
Dec. 31, 2019
USD ($)
Debt Instrument [Line Items]        
Short-term debt   $ 100   $ 75
Principal outstanding        
Total long-term debt   8,769   7,944
Less: current maturities   (78)   (62)
Total long-term debt, less current maturities   8,691   7,882
Carrying amount        
Total long-term debt   8,709   7,880
Less: current maturities   (78)   (62)
Total long-term debt, less current maturities   8,631   7,818
Senior Secured Borrowings | U.S. Dollar at LIBOR Plus One Point Five Due Two Thousand Twenty Four [Member]        
Principal outstanding        
Total long-term debt   1,093   1,100
Carrying amount        
Total long-term debt   1,086   1,094
Senior Secured Borrowings | Euro at EURIBOR Plus One Point Five Percentage Due Two Thousand and Twenty Four [Member]        
Principal outstanding        
Total long-term debt   492   505
Carrying amount        
Total long-term debt   492   504
Debt, face amount | € € 447,000,000   € 450,000,000  
Senior Notes and Debentures | €650 at 4.0% due 2022        
Principal outstanding        
Total long-term debt   715   729
Carrying amount        
Total long-term debt   $ 711   725
Debt, face amount | € € 650,000,000      
Debt instrument stated percentage 4.00% 4.00%    
Senior Notes and Debentures | U. S. dollar at 4.50% due 2023        
Principal outstanding        
Total long-term debt   $ 1,000   1,000
Carrying amount        
Total long-term debt   $ 996   995
Debt instrument stated percentage 4.50% 4.50%    
Senior Notes and Debentures | €335 at 2.250% due 2023        
Principal outstanding        
Total long-term debt   $ 369   376
Carrying amount        
Total long-term debt   $ 365   372
Debt, face amount | € € 335,000,000      
Debt instrument stated percentage 2.25% 2.25%    
Senior Notes and Debentures | Euro .75% due 2023 [Member]        
Principal outstanding        
Total long-term debt   $ 605   617
Carrying amount        
Total long-term debt   $ 600   610
Debt, face amount | € € 500,000,000      
Debt instrument stated percentage 0.75% 0.75%    
Senior Notes and Debentures | €600 at 2.625% due 2024        
Principal outstanding        
Total long-term debt   $ 661   673
Carrying amount        
Total long-term debt   $ 656   668
Debt, face amount | € € 600,000,000      
Debt instrument stated percentage 2.625% 2.625%    
Senior Notes and Debentures | €600 at 3.375% due 2025        
Principal outstanding        
Total long-term debt   $ 661   673
Carrying amount        
Total long-term debt   $ 656   667
Debt, face amount | € € 600,000,000      
Debt instrument stated percentage 3.375% 3.375%    
Senior Notes and Debentures | U.S. dollar at 4.25% due 2026        
Principal outstanding        
Total long-term debt   $ 400   400
Carrying amount        
Total long-term debt   $ 395   395
Debt instrument stated percentage 4.25% 4.25%    
Senior Notes and Debentures | U.S. dollar at 4.75% due 2026        
Principal outstanding        
Total long-term debt   $ 875   875
Carrying amount        
Total long-term debt   $ 863   863
Debt instrument stated percentage 4.75% 4.75%    
Senior Notes and Debentures | U.S. dollar at 7.375% due 2026        
Principal outstanding        
Total long-term debt   $ 350   350
Carrying amount        
Total long-term debt   $ 348   348
Debt instrument stated percentage 7.375% 7.375%    
Senior Notes and Debentures | €500 at 2.875% due 2026        
Principal outstanding        
Total long-term debt   $ 550   561
Carrying amount        
Total long-term debt   $ 543   554
Debt, face amount | € € 500,000,000      
Debt instrument stated percentage 2.875% 2.875%    
Senior Notes and Debentures | U.S. dollar at 7.50% due 2096        
Principal outstanding        
Total long-term debt   $ 40   40
Carrying amount        
Total long-term debt   $ 40   40
Debt instrument stated percentage 7.50% 7.50%    
Other Indebtedness, Fixed Rate        
Principal outstanding        
Total long-term debt   $ 130   45
Carrying amount        
Total long-term debt   130   45
Revolving Credit Facility | Line of Credit        
Principal outstanding        
Total long-term debt   828   0
Carrying amount        
Total long-term debt   $ 828   $ 0
LIBOR | Senior Secured Borrowings | U.S. Dollar at LIBOR Plus One Point Five Due Two Thousand Twenty Four [Member]        
Carrying amount        
Basis spread on variable rate (as a percent) 1.50%      
EURIBOR | Senior Secured Borrowings | Euro at EURIBOR Plus One Point Five Percentage Due Two Thousand and Twenty Four [Member]        
Carrying amount        
Basis spread on variable rate (as a percent) 1.50%      
v3.20.1
Derivative and Other Financial Instruments - Narrative (Details)
€ in Millions
3 Months Ended 12 Months Ended
Mar. 31, 2020
USD ($)
Mar. 31, 2019
USD ($)
Dec. 31, 2019
USD ($)
Mar. 31, 2020
EUR (€)
Mar. 31, 2020
USD ($)
Derivative Instruments, Gain (Loss) [Line Items]          
Objective for using derivative instruments The Company’s objective in managing exposure to market and interest rate risk is to limit the impact on earnings and cash flow.        
Loss expected to be reclassified to earnings $ 51,000,000        
Loss, net of tax, expected to be reclassified to earnings 41,000,000        
Reclassification of anticipated transactions that were no longer considered probable $ 0 $ 0      
Minimum          
Derivative Instruments, Gain (Loss) [Line Items]          
Derivative, remaining maturity range 1 month        
Maximum          
Derivative Instruments, Gain (Loss) [Line Items]          
Derivative, remaining maturity range 30 months        
Derivatives not designated as hedges | Foreign exchange          
Derivative Instruments, Gain (Loss) [Line Items]          
Derivative, Notional Amount     $ 1,017,000,000   $ 921,000,000
Derivatives in cash flow hedges | Interest Rate Swap          
Derivative Instruments, Gain (Loss) [Line Items]          
Amount of gain/(loss) recognized in AOCI (effective portion) $ (1,000,000) 0      
Derivative, Notional Amount     200,000,000   200,000,000
Derivatives in cash flow hedges | Commodities          
Derivative Instruments, Gain (Loss) [Line Items]          
Derivative, Notional Amount     334,000,000   356,000,000
Derivatives in cash flow hedges | Foreign exchange          
Derivative Instruments, Gain (Loss) [Line Items]          
Derivative, Notional Amount     1,030,000,000   807,000,000
Derivatives in cash flow hedges | Designated as Hedging Instrument          
Derivative Instruments, Gain (Loss) [Line Items]          
Amount of gain/(loss) recognized in AOCI (effective portion) (39,000,000) 6,000,000      
Derivatives in cash flow hedges | Designated as Hedging Instrument | Commodities          
Derivative Instruments, Gain (Loss) [Line Items]          
Amount of gain/(loss) recognized in AOCI (effective portion) (39,000,000) 10,000,000      
Derivatives in cash flow hedges | Designated as Hedging Instrument | Foreign exchange          
Derivative Instruments, Gain (Loss) [Line Items]          
Amount of gain/(loss) recognized in AOCI (effective portion) 1,000,000 (4,000,000)      
Derivatives in fair value hedges | Foreign exchange          
Derivative Instruments, Gain (Loss) [Line Items]          
Derivative, Notional Amount     142,000,000   158,000,000
Derivatives in fair value hedges | Designated as Hedging Instrument          
Derivative Instruments, Gain (Loss) [Line Items]          
Cumulative amount of fair value hedging adjustment included in the carrying about of the hedged assets     2,000,000   13,000,000
Derivatives in fair value hedges | Designated as Hedging Instrument | Foreign exchange          
Derivative Instruments, Gain (Loss) [Line Items]          
Losses from foreign exchange contracts designated as fair value hedges (less than) 1,000,000 1,000,000      
Derivatives designated as net investment hedges          
Derivative Instruments, Gain (Loss) [Line Items]          
Carrying amount of hedged net investment       € 1,253 1,138,000,000
Derivatives designated as net investment hedges | Accumulated Other Comprehensive Income          
Derivative Instruments, Gain (Loss) [Line Items]          
Loss on net investment hedge settlements 6,000,000   32,000,000    
Loss on net investment hedge settlements, net of tax 17,000,000   (9,000,000)    
Derivatives designated as net investment hedges | Foreign exchange          
Derivative Instruments, Gain (Loss) [Line Items]          
Derivative, Notional Amount     $ 1,075,000,000   $ 1,075,000,000
Derivatives designated as net investment hedges | Designated as Hedging Instrument | Foreign exchange          
Derivative Instruments, Gain (Loss) [Line Items]          
Amount of gain/(loss) recognized in AOCI (effective portion) 61,000,000 26,000,000      
Derivatives designated as net investment hedges | Other Comprehensive Income          
Derivative Instruments, Gain (Loss) [Line Items]          
Loss on net investment hedge settlements (26,000,000) (28,000,000)      
Loss on net investment hedge settlements, net of tax $ 26,000,000 $ 28,000,000      
v3.20.1
Derivative and Other Financial Instruments - Fair Values of Derivative Instruments and Valuation Hierarchy (Details) - USD ($)
$ in Millions
Mar. 31, 2020
Dec. 31, 2019
Derivative assets    
Total $ 200 $ 83
Derivative liabilities    
Total 103 49
Fair Value, Inputs, Level 2    
Derivative assets    
Total 200 83
Derivative liabilities    
Total 103 49
Fair Value, Inputs, Level 2 | Other current assets | Foreign exchange | Derivatives not designated as hedges    
Derivative assets    
Derivative Instruments Not Designated as Hedging Instruments, Asset, at Fair Value 26 7
Fair Value, Inputs, Level 2 | Accrued liabilities | Foreign exchange | Derivatives not designated as hedges    
Derivative assets    
Derivative Instruments Not Designated as Hedging Instruments, Asset, at Fair Value 15 5
Fair Value, Inputs, Level 2 | Other non-current assets | Foreign exchange | Derivatives not designated as hedges    
Derivative assets    
Derivative Instruments Not Designated as Hedging Instruments, Asset, at Fair Value 2 2
Fair Value, Inputs, Level 2 | Other non-current liabilities | Foreign exchange | Derivatives not designated as hedges    
Derivative assets    
Derivative Instruments Not Designated as Hedging Instruments, Asset, at Fair Value 1 1
Fair Value, Inputs, Level 2 | Other assets | Designated as Hedging Instrument    
Derivative assets    
Derivatives designated as hedges 172 74
Fair Value, Inputs, Level 2 | Other assets | Derivatives not designated as hedges    
Derivative assets    
Derivative Instruments Not Designated as Hedging Instruments, Asset, at Fair Value 28 9
Fair Value, Inputs, Level 2 | Other liabilities | Designated as Hedging Instrument    
Derivative assets    
Derivatives designated as hedges 87 43
Fair Value, Inputs, Level 2 | Other liabilities | Derivatives not designated as hedges    
Derivative assets    
Derivative Instruments Not Designated as Hedging Instruments, Asset, at Fair Value 16 6
Cash Flow Hedging [Member] | Fair Value, Inputs, Level 2 | Other current assets | Foreign exchange | Designated as Hedging Instrument    
Derivative assets    
Derivatives designated as hedges 10 10
Cash Flow Hedging [Member] | Fair Value, Inputs, Level 2 | Other current assets | Commodities | Designated as Hedging Instrument    
Derivative assets    
Derivatives designated as hedges, Commodities 17 11
Cash Flow Hedging [Member] | Fair Value, Inputs, Level 2 | Accrued liabilities | Foreign exchange | Designated as Hedging Instrument    
Derivative assets    
Derivatives designated as hedges 11 15
Cash Flow Hedging [Member] | Fair Value, Inputs, Level 2 | Accrued liabilities | Commodities | Designated as Hedging Instrument    
Derivative assets    
Derivatives designated as hedges, Commodities 67 21
Cash Flow Hedging [Member] | Fair Value, Inputs, Level 2 | Other non-current assets | Foreign exchange | Designated as Hedging Instrument    
Derivative assets    
Derivatives designated as hedges 1 1
Cash Flow Hedging [Member] | Fair Value, Inputs, Level 2 | Other non-current assets | Commodities | Designated as Hedging Instrument    
Derivative assets    
Derivatives designated as hedges, Commodities 1 0
Cash Flow Hedging [Member] | Fair Value, Inputs, Level 2 | Other non-current assets | Interest Rate Contract [Member] | Designated as Hedging Instrument    
Derivative assets    
Derivatives designated as hedges 0 0
Cash Flow Hedging [Member] | Fair Value, Inputs, Level 2 | Other non-current liabilities | Foreign exchange | Designated as Hedging Instrument    
Derivative assets    
Derivatives designated as hedges 0 1
Cash Flow Hedging [Member] | Fair Value, Inputs, Level 2 | Other non-current liabilities | Commodities | Designated as Hedging Instrument    
Derivative assets    
Derivatives designated as hedges, Commodities 4 0
Cash Flow Hedging [Member] | Fair Value, Inputs, Level 2 | Other non-current liabilities | Interest Rate Contract [Member] | Designated as Hedging Instrument    
Derivative assets    
Derivatives designated as hedges 3 1
Derivatives in fair value hedges | Accrued liabilities | Designated as Hedging Instrument    
Derivative liabilities    
Derivatives designated as hedges, Foreign exchange 90 83
Derivatives in fair value hedges | Fair Value, Inputs, Level 2 | Other current assets | Foreign exchange | Designated as Hedging Instrument    
Derivative assets    
Derivatives designated as hedges 15 1
Derivatives in fair value hedges | Fair Value, Inputs, Level 2 | Accrued liabilities | Foreign exchange | Designated as Hedging Instrument    
Derivative assets    
Derivatives designated as hedges 2 3
Derivatives designated as net investment hedges | Fair Value, Inputs, Level 2 | Other non-current assets | Designated as Hedging Instrument    
Derivative assets    
Derivatives designated as hedges 128 51
Derivatives designated as net investment hedges | Fair Value, Inputs, Level 2 | Other non-current liabilities | Designated as Hedging Instrument    
Derivative assets    
Derivatives designated as hedges $ 0 $ 2
v3.20.1
Accumulated Other Comprehensive Income - Components (Details) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Accumulated Other Comprehensive Income (Loss) [Roll Forward]    
Balance at beginning of period $ (3,131) $ (3,374)
Other comprehensive income / (loss) before reclassifications (149) 78
Amounts reclassified from accumulated other comprehensive income 58 7
Other comprehensive income (91) 85
Balance at end of period (3,222) (3,289)
Defined benefit plans    
Accumulated Other Comprehensive Income (Loss) [Roll Forward]    
Balance at beginning of period (1,449) (1,533)
Other comprehensive income / (loss) before reclassifications 206 13
Amounts reclassified from accumulated other comprehensive income 51 1
Other comprehensive income 257 14
Balance at end of period (1,192) (1,519)
Foreign currency translation    
Accumulated Other Comprehensive Income (Loss) [Roll Forward]    
Balance at beginning of period (1,668) (1,817)
Other comprehensive income / (loss) before reclassifications (316) 59
Amounts reclassified from accumulated other comprehensive income 0 0
Other comprehensive income (316) 59
Balance at end of period (1,984) (1,758)
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent [Member]    
Accumulated Other Comprehensive Income (Loss) [Roll Forward]    
Balance at beginning of period (14) (24)
Other comprehensive income / (loss) before reclassifications (39) 6
Amounts reclassified from accumulated other comprehensive income 7 6
Other comprehensive income (32) 12
Balance at end of period $ (46) $ (12)
v3.20.1
Revenue - Contract Assets and Liabilities (Details) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2020
Dec. 31, 2018
Revenue from Contract with Customer [Abstract]    
Contract assets included in prepaid and other current assets $ 32 $ 30
Contract liabilities included in accrued liabilities (4) (5)
Net contract asset 28 $ 25
Revenue recognized related to contract liabilities $ 1  
v3.20.1
Restructuring and Other - Restructuring Charges by Action/Type (Details) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Restructuring Reserve [Abstract]    
Asset impairments and sales $ 1 $ 4
Restructuring 3 9
Other Restructuring Costs 3 (9)
Restructuring and other $ 7 $ 4
v3.20.1
Consolidated Statements of Changes in Shareholders' Equity - USD ($)
$ in Millions
Total
Common Stock
Paid-in Capital
Accumulated Earnings
Accumulated Other Comprehensive Loss
Treasury Stock
Total Crown Equity
Noncontrolling Interests
Balance at beginning of period at Dec. 31, 2018 $ 1,286 $ 929 $ 186 $ 3,449 $ (3,374) $ (253) $ 937 $ 349
Net income attributable to Crown Holdings 103     103     103  
Net income attributable to noncontrolling interests 28             28
Net income 131              
Other comprehensive income 85       85   85
Dividends paid to noncontrolling interests (9)           0 (9)
Restricted stock awarded 0   (1)     1 0  
Stock-based compensation 8   8       8  
Common stock issued 2   2       2  
Common stock repurchased (1)   (1)       (1)  
Balance at end of period at Mar. 31, 2019 1,502 929 194 3,552 (3,289) (252) 1,134 368
Balance at beginning of period at Dec. 31, 2019 2,092 929 207 3,959 (3,131) (251) 1,713 379
Net income attributable to Crown Holdings 88     88     88  
Net income attributable to noncontrolling interests 26             26
Net income 114              
Other comprehensive income (96)       (91)   (91) (5)
Dividends paid to noncontrolling interests (11)             (11)
Restricted stock awarded 0   (1)     1    
Stock-based compensation 10   10       10  
Common stock issued 1   1     1  
Common stock repurchased (57)   (52)     (5) (57)  
Balance at end of period at Mar. 31, 2020 $ 2,053 $ 929 $ 165 $ 4,047 $ (3,222) $ (255) $ 1,664 $ 389
v3.20.1
Consolidated Statements of Operations - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Income Statement [Abstract]    
Net sales $ 2,757 $ 2,755
Cost of products sold, excluding depreciation and amortization 2,220 2,210
Depreciation and amortization 122 122
Selling and administrative expense 162 157
Restructuring and other 7 4
Income from operations 246 262
Loss from early extinguishments of debt 0 6
Other pension and postretirement 31 (18)
Interest expense 80 98
Interest income (4) (3)
Foreign exchange (12) 1
Income before income taxes 151 178
Provision for income taxes 38 48
Equity earnings / (loss) in affiliates 1 1
Net income 114 131
Net income attributable to noncontrolling interests (26) (28)
Net income attributable to Crown Holdings $ 88 $ 103
Earnings per common share attributable to Crown Holdings:    
Basic (in usd per share) $ 0.66 $ 0.77
Diluted (in usd per share) $ 0.65 $ 0.77
v3.20.1
Receivables (Details) - USD ($)
$ in Millions
Mar. 31, 2020
Dec. 31, 2019
Receivables [Abstract]    
Accounts receivable $ 1,164 $ 1,162
Less: allowance for credit losses (61) (62)
Net trade receivables 1,103 1,100
Unbilled receivables 245 226
Miscellaneous receivables 206 202
Receivables, net $ 1,554 $ 1,528
v3.20.1
Asbestos-Related Liabilities - Summary of Outstanding Claims by Year of Exposure and State Filed (Details) - Claim
Mar. 31, 2020
Dec. 31, 2019
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items]    
Claims outstanding 56,000 56,000
Asbestos After 1964    
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items]    
Claims outstanding   16,500
Texas | Asbestos Before Or During 1964    
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items]    
Claims outstanding   13,000
Pennsylvania | Asbestos Before Or During 1964    
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items]    
Claims outstanding   1,500
Other states that have enacted asbestos legislation | Asbestos Before Or During 1964    
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items]    
Claims outstanding   6,000
Other states | Asbestos Before Or During 1964    
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items]    
Claims outstanding   19,000
v3.20.1
Restructuring and Other (Tables)
3 Months Ended
Mar. 31, 2020
Restructuring Reserve [Abstract]  
Restructuring and Other Charges (Benefits)

The Company recorded restructuring and other charges / (benefits) as follows:
 
Three Months Ended
 
March 31,
 
2020
 
2019
Asset impairments and sales
$
1

 
$
4

Restructuring
3

 
9

Other costs / (income)
3

 
(9
)
 
$
7

 
$
4


v3.20.1
Revenue
3 Months Ended
Mar. 31, 2020
Revenue from Contract with Customer [Abstract]  
Revenue Revenue

For the three months ended March 31, 2020 and 2019, the Company recognized revenue as follows:
 
Three Months Ended
 
March 31,
 
2020
 
2019
Revenue recognized over time
$
1,475

 
$
1,365

Revenue recognized at a point in time
1,282

 
1,390

Total revenue
$
2,757

 
$
2,755


See Note Q for further disaggregation of the Company's revenue.
The Company has applied the practical expedient to exclude disclosure of remaining performance obligations as its binding orders typically have a term of one year or less.
Contract Assets and Contract Liabilities
Contract assets and liabilities are reported in a net position on a contract-by-contract basis. Net contract assets were as follows:
 
March 31, 2020
 
December 31, 2019
Contract assets included in prepaid and other current assets
$
32

 
$
30

Contract liabilities included in accrued liabilities
(4
)
 
(5
)
Net contract asset
$
28

 
$
25



Contract assets at March 31, 2020 primarily relates to revenue recognized for customized work-in-process inventory in the Company's equipment business and European three-piece food can product businesses.

During the three months ended March 31, 2020, the Company recognized revenue of $1 related to contract liabilities at December 31, 2019 for performance obligations satisfied during the period.
v3.20.1
Cash, Cash Equivalents and Restricted Cash Cash (Tables)
3 Months Ended
Mar. 31, 2020
Restricted Cash [Abstract]  
Schedule of Restricted Cash

Cash, cash equivalents, and restricted cash included in the Company's Consolidated Balance Sheets and Statement of Cash Flows were as follows:
 
March 31, 2020
 
December 31, 2019
Cash and cash equivalents
$
765

 
$
607

 
 
 
 
Restricted cash included in prepaid expenses and other current assets
$
55

 
$
50

Restricted cash included in other non-current assets
1

 
6

Total restricted cash
$
56

 
$
56

 
 
 
 
Total cash, cash equivalents and restricted cash
$
821

 
$
663


v3.20.1
Pension and Other Postretirement Benefits Amounts reclassified from accumulated other comprehensive income (Details) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]    
Income before income taxes $ 151 $ 178
Income Tax Expense (Benefit) (38) (48)
Net income 114 131
Reclassification out of Accumulated Other Comprehensive Income | Defined benefit plans    
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]    
Actuarial losses 24 25
Defined Benefit Plan, Benefit Obligation, (Increase) Decrease for Settlement 37  
Prior service credit (6) (9)
Defined Benefit Plan, Benefit Obligation, (Increase) Decrease for Curtailment 0 (14)
Income before income taxes 55 2
Income Tax Expense (Benefit) (4) (1)
Net income $ 51 $ 1
v3.20.1
Revenue Disaggregation of Revenue (Details) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Disaggregation of Revenue [Line Items]    
Net sales $ 2,757 $ 2,755
Over time    
Disaggregation of Revenue [Line Items]    
Revenue from contract with customer 1,475 1,365
Point in time    
Disaggregation of Revenue [Line Items]    
Revenue from contract with customer $ 1,282 $ 1,390
v3.20.1
Asbestos-Related Liabilities - Summary of Percentage of Outstanding Claims Related to Claimants Alleging Serious Diseases (Details)
Dec. 31, 2019
Dec. 31, 2018
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items]    
Claims alleging serious diseases 22.00% 22.00%
Pre-1964 claims in states without asbestos legislation    
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items]    
Claims alleging serious diseases 41.00% 41.00%
v3.20.1
Statement of Information Furnished
3 Months Ended
Mar. 31, 2020
Quarterly Financial Data [Abstract]  
Statement of Information Furnished
Statement of Information Furnished

The consolidated financial statements include the accounts of Crown Holdings, Inc. and its consolidated subsidiaries (the “Company”). The accompanying unaudited interim consolidated financial statements have been prepared in accordance with Form 10-Q instructions. In the opinion of management, these consolidated financial statements contain all adjustments of a normal and recurring nature necessary for a fair statement of the financial position of the Company as of March 31, 2020 and the results of its operations for the three months ended March 31, 2020 and 2019 and of its cash flows for the three months ended March 31, 2020 and 2019. The results reported in these consolidated financial statements are not necessarily indicative of the results that may be expected for the entire year including the impact of the coronavirus pandemic which cannot be determined at this time. These results have been determined on the basis of accounting principles generally accepted in the United States of America (“GAAP”), the application of which requires management’s utilization of estimates, and actual results may differ materially from the estimates utilized.

Certain information and footnote disclosures normally included in financial statements presented in accordance with GAAP have been condensed or omitted. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. The accompanying consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2019.
v3.20.1
Restructuring and Other - Narrative (Details) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Restructuring Cost and Reserve [Line Items]    
Gain (Loss) on Sale of Assets and Asset Impairment Charges $ 1 $ 4
Restructuring accrual 15  
Asia Pacific    
Restructuring Cost and Reserve [Line Items]    
Gain (Loss) on Sale of Assets and Asset Impairment Charges 6  
Headcount Reductions [Member]    
Restructuring Cost and Reserve [Line Items]    
Restructuring Costs $ 8  
v3.20.1
Inventories (Details) - USD ($)
$ in Millions
Mar. 31, 2020
Dec. 31, 2019
Inventory, Gross [Abstract]    
Raw materials and supplies $ 916 $ 905
Work in process 158 151
Finished goods 594 570
Total inventories $ 1,668 $ 1,626
v3.20.1
Consolidated Statements of Comprehensive Income - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Statement of Comprehensive Income [Abstract]    
Net income $ 114 $ 131
Other comprehensive (loss) / income, net of tax:    
Foreign currency translation adjustments (319) 59
Pension and other postretirement benefits 257 14
Derivatives qualifying as hedges (34) 12
Total other comprehensive (loss) / income (96) 85
Total comprehensive income 18 216
Net income attributable to noncontrolling interests (26) (28)
Translation adjustments attributable to noncontrolling interests 3 0
Derivatives qualifying as hedges attributable to noncontrolling interests 2 0
Comprehensive (loss) / income attributable to Crown Holdings $ (3) $ 188
v3.20.1
Stock-Based Compensation
3 Months Ended
Mar. 31, 2020
Share-based Payment Arrangement, Noncash Expense [Abstract]  
Stock-Based Compensation
Stock-Based Compensation

A summary of restricted and deferred stock transactions during the three months ended March 31, 2020 is as follows:

 
Number of shares
Non-vested stock awards outstanding at January 1, 2020
2,102,654

Awarded:

Time-vesting shares
68,824

Performance-based shares
161,426

Released:

Time-vesting shares
(82,427
)
Performance-based shares
(163,458
)
Forfeitures:
 
       Time-vesting shares
(47,700
)
Performance-based shares

Non-vested stock awards outstanding at March 31, 2020
2,039,319



The performance-based share awards are subject to either a market condition or a performance condition. For awards subject to a market condition, the performance metric is the Company's total shareholder return, which includes share price appreciation and dividends paid during the three-year term of the award, measured against a peer group of companies. These awards cliff vest at the end of three years. The number of performance-based shares that will ultimately vest is based on the level of market performance achieved, ranging between 0% and 200% of the shares originally awarded, and are settled in stock.

For awards subject to a performance condition, the performance metric is the Company's average return on invested capital over the three-year term. These awards cliff vest at the end of three years. The number of performance-based shares that will ultimately vest is based on the level of performance achieved, ranging between 0% and 200% of the shares originally awarded, and are settled in stock.

The time-vesting restricted and deferred stock awards vest ratably over three to five years.

The weighted average grant-date fair values of awards issued during the three months ended March 31, 2020 were $70.31 for the time-vesting stock awards and $72.47 for the performance-based stock awards.

The fair value of the performance-based shares subject to a market condition awarded in 2020 was calculated using a Monte Carlo valuation model, including a weighted average stock price volatility of 22.0%, an expected term of three years, and a weighted average risk-free interest rate of 1.60%.

As of March 31, 2020, unrecognized compensation cost related to outstanding non-vested stock awards was $70. The weighted average period over which the expense is expected to be recognized is 2.83 years. The aggregate market value of the shares released on the vesting dates was $12 for the three months ended March 31, 2020.
v3.20.1
Accounting and Reporting Developments (Policies)
3 Months Ended
Mar. 31, 2020
Accounting Policies [Abstract]  
Recently Adopted Accounting Standards

Recently Issued Accounting Standards

In December 2019, the FASB issued new guidance to simplify the accounting for income taxes by, among other things, reducing complexity in the interim-period accounting for year-to-date loss limitations and changes in tax laws. The guidance is effective for the Company on January 1, 2021. The Company is currently evaluating the impact of adopting this standard and does not expect the guidance to have a material impact on its consolidated financial statements.

In March 2020, the FASB issued guidance which provides optional expedients and exceptions for applying GAAP to certain contract modifications and hedging relationships that reference London Inter-bank Offered Rate (LIBOR) or another reference rate expected to be discontinued. The guidance is effective upon issuance and can be applied through December 31, 2022. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.
v3.20.1
Intangible Assets (Tables)
3 Months Ended
Mar. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of Gross Carrying Amounts and Accumulated Amortization of Finite-lived Intangible Assets by Major Class

Gross carrying amounts and accumulated amortization of finite-lived intangible assets by major class were as follows:
    
 
March 31, 2020
 
December 31, 2019
 
Gross
 
Accumulated amortization
 
Net
 
Gross
 
Accumulated amortization
 
Net
Customer relationships
$
1,554

 
$
(347
)
 
$
1,207

 
$
1,621

 
$
(331
)
 
$
1,290

Trade names
535

 
(45
)
 
490

 
541

 
(40
)
 
501

Technology
156

 
(46
)
 
110

 
158

 
(41
)
 
117

Long term supply contracts
120

 
(39
)
 
81

 
150

 
(48
)
 
102

Patents
14

 
(9
)
 
5

 
14

 
(9
)
 
5

 
$
2,379


$
(486
)

$
1,893

 
$
2,484

 
$
(469
)
 
$
2,015


v3.20.1
Cash, Cash Equivalents and Restricted Cash (Details) - USD ($)
$ in Millions
Mar. 31, 2020
Dec. 31, 2019
Mar. 31, 2019
Dec. 31, 2018
Restricted Cash [Abstract]        
Cash and cash equivalents $ 765 $ 607    
Restricted cash included in prepaid expenses and other current assets 55 50    
Restricted cash included in other non-current assets 1 6    
Total restricted cash 56 56    
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents $ 821 $ 663 $ 348 $ 659
v3.20.1
Stock-Based Compensation (Tables)
3 Months Ended
Mar. 31, 2020
Share-based Payment Arrangement, Noncash Expense [Abstract]  
Summary of Restricted Stock Transactions

A summary of restricted and deferred stock transactions during the three months ended March 31, 2020 is as follows:

 
Number of shares
Non-vested stock awards outstanding at January 1, 2020
2,102,654

Awarded:

Time-vesting shares
68,824

Performance-based shares
161,426

Released:

Time-vesting shares
(82,427
)
Performance-based shares
(163,458
)
Forfeitures:
 
       Time-vesting shares
(47,700
)
Performance-based shares

Non-vested stock awards outstanding at March 31, 2020
2,039,319


v3.20.1
Derivative and Other Financial Instruments (Tables)
3 Months Ended
Mar. 31, 2020
General Discussion of Derivative Instruments and Hedging Activities [Abstract]  
Schedule of Impact on Earnings from Derivatives Not Designated as Hedging Instruments
The following table sets forth the impact on earnings from derivatives not designated as hedges.
 
 
 Pre-tax amount of gain/
 
 
 
 
(loss) recognized in
 
 
 
 
income on derivative
 
 
 
 
Three Months Ended
 
 
 
 
March 31,
 
Affected line item in the
Derivatives not designated as hedges
 
2020
 
2019
 
Statement of Operations
Foreign exchange
 
$
(1
)
 
$
(1
)
 
Net sales
Foreign exchange
 
1

 
1

 
Cost of products sold
Foreign exchange
 
6

 
(15
)
 
Foreign exchange
 
 
$
6

 
$
(15
)
 
 

Schedule of Derivative Instruments Included in Earnings Fair Value Hedge Carrying Amoun
Accumulated Other Comprehensive Income (AOCI) and Earnings From Changes In Fair Value Related To Derivative Instruments
The following tables set forth financial information about the impact on other comprehensive income ("OCI"), accumulated other comprehensive income (“AOCI”) and earnings from changes in the fair value of derivative instruments.

 
 
 Amount of gain/(loss)
 
 
 
 
recognized in OCI
 
 
 
 
Three Months Ended
 
 
 
 
March 31,
 
 
Derivatives in cash flow hedges
 
2020
 
2019
 
 
Foreign exchange
 
$
1

 
$
(4
)
 
 
Interest Rate
 
(1
)
 

 
 
Commodities
 
(39
)
 
10

 
 
 
 
$
(39
)
 
$
6

 
 
 
 
 
 
 
 
 
 
 
Amount of gain/
 
 
 
 
(loss) reclassified from
 
 
 
 
AOCI into income
 
 
 
 
Three Months Ended
 
 
 
 
March 31,
 
Affected line items in the
Derivatives in cash flow hedges
 
2020
 
2019
 
Statement of Operations
Foreign exchange
 
$
(1
)
 
$
(1
)
 
Net sales
Commodities
 
3

 
3

 
Net sales
Foreign exchange
 
(1
)
 

 
Cost of products sold
Commodities
 
(10
)
 
(10
)
 
Cost of products sold
 
 
(9
)
 
(8
)
 
Income before taxes
 
 
2

 
2

 
Provision for income taxes
Total reclassified
 
$
(7
)
 
$
(6
)
 
Net income

The following tables set forth the impact on OCI from changes in the fair value of derivative instruments designated as net investment hedges.
 
 
Amount of gain/(loss)
 
 
recognized in OCI
 
 
Three months ended
 
 
March 31,
Derivatives designated as net investment hedges
 
2020
 
2019
Foreign exchange
 
$
61

 
$
26


Fair Value of Outstanding Derivative Instruments in the Consolidated Balance Sheets
The following table sets forth the Company's financial assets and liabilities that were accounted for at fair value on a recurring basis as of March 31, 2020 and December 31, 2019, respectively. The fair values of these financial instruments were reported under Level 2 of the fair value hierarchy.









 
 
Balance Sheet classification
 
March 31,
2020
 
December 31, 2019
 
Balance Sheet classification
 
March 31,
2020
 
December 31, 2019
Derivatives designated as hedging instruments
 
 
 
 
 
 
 
 
 
 
Foreign exchange contracts cash flow
 
Other current assets
 
$
10

 
$
10

 
Accrued liabilities
 
$
11

 
$
15

 
 
Other non-current assets
 
1

 
1

 
Other non-current liabilities
 

 
1

Foreign exchange contracts fair value
 
Other current assets
 
15

 
1

 
Accrued liabilities
 
2

 
3

Commodities contracts cash flow
 
Other current assets
 
17

 
11

 
Accrued liabilities
 
67

 
21

 
 
Other non-current assets
 
1

 

 
Other non-current liabilities
 
4

 

Interest rate contracts cash flow
 
Other non-current assets
 

 

 
Other non-current liabilities
 
3

 
1

Net investment hedge
 
Other non-current assets
 
128

 
51

 
Other non-current liabilities
 

 
2

 
 
$
172

 
$
74

 
 
 
$
87

 
$
43

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance Sheet classification
 
March 31,
2020
 
December 31, 2019
 
Balance Sheet classification
 
March 31,
2020
 
December 31, 2019
Derivatives not designated as hedging instruments
 
 
 
 
 
 
 
 
 
 
Foreign exchange contracts
 
Other current assets
 
$
26

 
$
7

 
Accrued liabilities
 
$
15

 
$
5

 
 
Other non-current assets
 
2

 
2

 
Other non-current liabilities
 
1

 
1

 
 
$
28

 
$
9

 
 
 
$
16

 
$
6

 
 
 
 
 
 
 
 
 
 
 
 
 
Total derivatives
 
 
 
$
200

 
$
83

 
 
 
$
103

 
$
49


Schedule of Offsetting Derivative Assets and Liabilities In the table below, the aggregate fair values of the Company's derivative assets and liabilities are presented on both a gross and net basis, where appropriate.

 
Gross amounts recognized in the Balance Sheet
Gross amounts not offset in the Balance Sheet
Net amount
Balance at March 31, 2020
 
 
 
Derivative assets
$200
$21
$179
Derivative liabilities
103
21
82
 
 
 
 
Balance at December 31, 2019
 
 
 
Derivative assets
83
16
67
Derivative liabilities
49
16
33

Notional Values of Outstanding Derivative Instruments in the Consolidated Balance Sheet

The aggregate U.S. dollar-equivalent notional values of outstanding derivative instruments in the Consolidated Balance Sheets at March 31, 2020 and December 31, 2019 were:
 
March 31, 2020
 
December 31, 2019
Derivatives designated as cash flow hedges:
 
 
 
Foreign exchange
$
807

 
$
1,030

Commodities
356

 
334

Interest rate
200

 
200

Derivatives designated as fair value hedges:

 

Foreign exchange
158

 
142

Derivatives designated as net investment hedges:
 
 

Foreign exchange
1,075

 
1,075

Derivatives not designated as hedges:
 
 
 
Foreign exchange
921

 
1,017


v3.20.1
Intangible Assets
3 Months Ended
Mar. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
Intangible Assets Intangible Assets

Gross carrying amounts and accumulated amortization of finite-lived intangible assets by major class were as follows:
    
 
March 31, 2020
 
December 31, 2019
 
Gross
 
Accumulated amortization
 
Net
 
Gross
 
Accumulated amortization
 
Net
Customer relationships
$
1,554

 
$
(347
)
 
$
1,207

 
$
1,621

 
$
(331
)
 
$
1,290

Trade names
535

 
(45
)
 
490

 
541

 
(40
)
 
501

Technology
156

 
(46
)
 
110

 
158

 
(41
)
 
117

Long term supply contracts
120

 
(39
)
 
81

 
150

 
(48
)
 
102

Patents
14

 
(9
)
 
5

 
14

 
(9
)
 
5

 
$
2,379


$
(486
)

$
1,893

 
$
2,484

 
$
(469
)
 
$
2,015



Total amortization expense of intangible assets was $45 and $47 for the three months ended March 31, 2020 and 2019.
v3.20.1
Derivative and Other Financial Instruments
3 Months Ended
Mar. 31, 2020
General Discussion of Derivative Instruments and Hedging Activities [Abstract]  
Derivative and Other Financial Instruments
Derivative and Other Financial Instruments

Fair Value Measurements

Under GAAP a framework exists for measuring fair value, providing a three-tier hierarchy of pricing inputs used to report assets and liabilities that are adjusted to fair value. Level 1 includes inputs such as quoted prices which are available in active markets for identical assets or liabilities as of the report date. Level 2 includes inputs other than those available in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3 includes unobservable pricing inputs that are not corroborated by market data or other objective sources. The Company has no recurring items valued using Level 3 inputs other than certain pension plan assets.

The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of assets and liabilities measured at fair value and their placement within the fair value hierarchy.

The Company applies a market approach to value its commodity price hedge contracts. Prices from observable markets are used to develop the fair value of these financial instruments and they are reported under Level 2. The Company uses an income approach to value its foreign exchange forward contracts. These contracts are valued using a discounted cash flow model that calculates the present value of future cash flows under the terms of the contracts using market information as of the reporting date, such as foreign exchange spot and forward rates, and are reported under Level 2 of the fair value hierarchy.

Fair value disclosures for financial assets and liabilities that were accounted for at fair value on a recurring basis are provided later in this note. In addition, see Note K for fair value disclosures related to debt.

Derivative Financial Instruments

In the normal course of business the Company is subject to risk from adverse fluctuations in currency exchange rates, interest rates and commodity prices. The Company manages these risks through a program that includes the use of derivative financial instruments, primarily swaps and forwards. Counterparties to these contracts are major financial institutions. The Company is exposed to credit loss in the event of nonperformance by these counterparties. The Company does not use derivative instruments for trading or speculative purposes.

The Company’s objective in managing exposure to market and interest rate risk is to limit the impact on earnings and cash flow. The extent to which the Company uses such instruments is dependent upon its access to these contracts in the financial markets and its success using other methods, such as netting exposures in the same currencies to mitigate foreign exchange risk, using sales agreements that permit the pass-through of commodity price and foreign exchange rate risk to customers and borrowing both fixed and floating debt instruments to manage interest rate risk.

For derivative financial instruments accounted for in hedging relationships, the Company formally designates and documents, at inception, the financial instrument as a hedge of a specific underlying exposure, the risk management objective and the manner in which effectiveness will be assessed. The Company formally assesses, both at inception and at least quarterly thereafter, whether the hedging relationships are effective in offsetting changes in fair value or cash flows of the related underlying exposures. When a hedge no longer qualifies for hedge accounting, the change in fair value from the date of the last effectiveness test is recognized in earnings. Any gain or loss which has accumulated in other comprehensive income at the date of the last effectiveness test is reclassified into earnings at the same time of the underlying exposure.

Cash Flow Hedges

The Company designates certain derivative financial instruments as cash flow hedges. No components of the hedging instruments are excluded from the assessment of hedge effectiveness. Changes in fair value of outstanding derivatives accounted for as cash flow hedges are recorded in accumulated other comprehensive income until earnings are impacted by the hedged transaction. Classification of the gain or loss in the Consolidated Statements of Operations upon reclassification from accumulated comprehensive income is the same as that of the underlying exposure. Contracts outstanding at March 31, 2020 mature between one and thirty months.

When the Company discontinues hedge accounting because it is no longer probable that an anticipated transaction will occur in the originally specified period, changes to the fair value accumulated in other comprehensive income are recognized immediately in earnings.

The Company uses commodity forward contracts to hedge anticipated purchases of various commodities, including aluminum, fuel oil and natural gas, and these exposures are hedged by a central treasury unit.

The Company also designates certain foreign exchange contracts as cash flow hedges of anticipated foreign currency denominated sales or purchases. The Company manages these risks at the operating unit level. Foreign currency risk is generally hedged with the related commodity price risk.

The Company also uses interest rate swaps to convert interest on floating rate debt to a fixed-rate. 


The following tables set forth financial information about the impact on other comprehensive income ("OCI"), accumulated other comprehensive income (“AOCI”) and earnings from changes in the fair value of derivative instruments.

 
 
 Amount of gain/(loss)
 
 
 
 
recognized in OCI
 
 
 
 
Three Months Ended
 
 
 
 
March 31,
 
 
Derivatives in cash flow hedges
 
2020
 
2019
 
 
Foreign exchange
 
$
1

 
$
(4
)
 
 
Interest Rate
 
(1
)
 

 
 
Commodities
 
(39
)
 
10

 
 
 
 
$
(39
)
 
$
6

 
 
 
 
 
 
 
 
 
 
 
Amount of gain/
 
 
 
 
(loss) reclassified from
 
 
 
 
AOCI into income
 
 
 
 
Three Months Ended
 
 
 
 
March 31,
 
Affected line items in the
Derivatives in cash flow hedges
 
2020
 
2019
 
Statement of Operations
Foreign exchange
 
$
(1
)
 
$
(1
)
 
Net sales
Commodities
 
3

 
3

 
Net sales
Foreign exchange
 
(1
)
 

 
Cost of products sold
Commodities
 
(10
)
 
(10
)
 
Cost of products sold
 
 
(9
)
 
(8
)
 
Income before taxes
 
 
2

 
2

 
Provision for income taxes
Total reclassified
 
$
(7
)
 
$
(6
)
 
Net income

For the twelve-month period ending March 31, 2021, a net loss of $51 ($41, net of tax) is expected to be reclassified to earnings for commodity and foreign exchange contracts. No amounts were reclassified during the three months ended March 31, 2020 and 2019 in connection with anticipated transactions that were no longer considered probable.

Fair Value Hedges and Contracts Not Designated as Hedges

The Company designates certain derivative financial instruments as fair value hedges of recognized foreign-denominated assets and liabilities, generally trade accounts receivable and payable and unrecognized firm commitments. The notional values and maturity dates of the derivative instruments coincide with those of the hedged items. Changes in fair value of the derivative financial instruments, excluding time value, are offset by changes in fair value of the related hedged items.

For the three months ended March 31, 2020 and 2019, the Company recorded a loss of less than $1 and a gain of less than $1 from foreign exchange contracts designated as fair value hedges. These adjustments were reported within foreign exchange in the Consolidated Statements of Operations.

Certain derivative financial instruments, including foreign exchange contracts related to intercompany debt, were not designated or did not quality for hedge accounting; however, they are effective economic hedges as the changes in their fair value, except for time value, are offset by changes arising from re-measurement of the related hedged items. The Company’s primary use of these derivative instruments is to offset the earnings impact that fluctuations in foreign exchange rates have on certain monetary assets and liabilities denominated in nonfunctional currencies. Changes in fair value of these derivative instruments are immediately recognized in earnings as foreign exchange adjustments.

The following table sets forth the impact on earnings from derivatives not designated as hedges.
 
 
 Pre-tax amount of gain/
 
 
 
 
(loss) recognized in
 
 
 
 
income on derivative
 
 
 
 
Three Months Ended
 
 
 
 
March 31,
 
Affected line item in the
Derivatives not designated as hedges
 
2020
 
2019
 
Statement of Operations
Foreign exchange
 
$
(1
)
 
$
(1
)
 
Net sales
Foreign exchange
 
1

 
1

 
Cost of products sold
Foreign exchange
 
6

 
(15
)
 
Foreign exchange
 
 
$
6

 
$
(15
)
 
 


Net Investment Hedges

The Company designates certain debt and derivative instruments as net investment hedges to manage foreign currency risk relating to net investments in subsidiaries denominated in foreign currencies and reduce the variability in the functional currency equivalent cash flows.

During the three months ended March 31, 2020 and 2019, the Company recorded a gain of $26 ($26, net of tax) and a gain of $28 ($28, net of tax) in other comprehensive income for certain debt instruments that are designated as hedges of its net investment in a euro-based subsidiary. As of March 31, 2020 a cumulative loss of $6 (gain of $17, net of tax) and as of December 31, 2019, a cumulative loss of $32 ($9, net of tax) were recognized in accumulated other comprehensive income related to these net investment hedges and the carrying amount of the hedged net investment was €1,138 ($1,253 at March 31, 2020).

The following tables set forth the impact on OCI from changes in the fair value of derivative instruments designated as net investment hedges.
 
 
Amount of gain/(loss)
 
 
recognized in OCI
 
 
Three months ended
 
 
March 31,
Derivatives designated as net investment hedges
 
2020
 
2019
Foreign exchange
 
$
61

 
$
26



Gains and losses representing components excluded from the assessment of effectiveness on derivatives designated as net investment hedges are recognized in accumulated other comprehensive income.

Gains or losses on net investment hedges remain in accumulated other comprehensive income until disposal of the underlying assets.

Fair Values of Derivative Financial Instruments and Valuation Hierarchy

The following table sets forth the Company's financial assets and liabilities that were accounted for at fair value on a recurring basis as of March 31, 2020 and December 31, 2019, respectively. The fair values of these financial instruments were reported under Level 2 of the fair value hierarchy.









 
 
Balance Sheet classification
 
March 31,
2020
 
December 31, 2019
 
Balance Sheet classification
 
March 31,
2020
 
December 31, 2019
Derivatives designated as hedging instruments
 
 
 
 
 
 
 
 
 
 
Foreign exchange contracts cash flow
 
Other current assets
 
$
10

 
$
10

 
Accrued liabilities
 
$
11

 
$
15

 
 
Other non-current assets
 
1

 
1

 
Other non-current liabilities
 

 
1

Foreign exchange contracts fair value
 
Other current assets
 
15

 
1

 
Accrued liabilities
 
2

 
3

Commodities contracts cash flow
 
Other current assets
 
17

 
11

 
Accrued liabilities
 
67

 
21

 
 
Other non-current assets
 
1

 

 
Other non-current liabilities
 
4

 

Interest rate contracts cash flow
 
Other non-current assets
 

 

 
Other non-current liabilities
 
3

 
1

Net investment hedge
 
Other non-current assets
 
128

 
51

 
Other non-current liabilities
 

 
2

 
 
$
172

 
$
74

 
 
 
$
87

 
$
43

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance Sheet classification
 
March 31,
2020
 
December 31, 2019
 
Balance Sheet classification
 
March 31,
2020
 
December 31, 2019
Derivatives not designated as hedging instruments
 
 
 
 
 
 
 
 
 
 
Foreign exchange contracts
 
Other current assets
 
$
26

 
$
7

 
Accrued liabilities
 
$
15

 
$
5

 
 
Other non-current assets
 
2

 
2

 
Other non-current liabilities
 
1

 
1

 
 
$
28

 
$
9

 
 
 
$
16

 
$
6

 
 
 
 
 
 
 
 
 
 
 
 
 
Total derivatives
 
 
 
$
200

 
$
83

 
 
 
$
103

 
$
49



Fair Value Hedge Carrying Amounts

 
 
Carrying amount of the hedged
 
 
assets/(liabilities)
 
 
March 31,
2020
 
December 31,
2019
Line item in the Balance Sheet in which the hedged item is included
 
 
Receivables, net
 
11

 
12

Accounts payable
 
(90
)
 
(83
)

As of March 31, 2020, the cumulative amounts of fair value hedging adjustments included in the carrying amount of the hedge assets and liabilities were a gain of $13. As of December 31, 2019, the cumulative amounts of fair value hedging adjustments included in the carrying amount of the hedge assets and liabilities were a loss of $2.








Offsetting of Derivative Assets and Liabilities

Certain derivative financial instruments are subject to agreements with counterparties similar to master netting arrangements and are eligible for offset. The Company has made an accounting policy election not to offset the fair values of these instruments within the statement of financial position. In the table below, the aggregate fair values of the Company's derivative assets and liabilities are presented on both a gross and net basis, where appropriate.

 
Gross amounts recognized in the Balance Sheet
Gross amounts not offset in the Balance Sheet
Net amount
Balance at March 31, 2020
 
 
 
Derivative assets
$200
$21
$179
Derivative liabilities
103
21
82
 
 
 
 
Balance at December 31, 2019
 
 
 
Derivative assets
83
16
67
Derivative liabilities
49
16
33

    
Notional Values of Outstanding Derivative Instruments

The aggregate U.S. dollar-equivalent notional values of outstanding derivative instruments in the Consolidated Balance Sheets at March 31, 2020 and December 31, 2019 were:
 
March 31, 2020
 
December 31, 2019
Derivatives designated as cash flow hedges:
 
 
 
Foreign exchange
$
807

 
$
1,030

Commodities
356

 
334

Interest rate
200

 
200

Derivatives designated as fair value hedges:

 

Foreign exchange
158

 
142

Derivatives designated as net investment hedges:
 
 

Foreign exchange
1,075

 
1,075

Derivatives not designated as hedges:
 
 
 
Foreign exchange
921

 
1,017


v3.20.1
Commitments and Contingent Liabilities (Details) - USD ($)
$ in Millions
Mar. 31, 2020
Mar. 31, 2017
PRP site    
Commitments And Contingent Liabilities [Line Items]    
Estimated future remediation costs $ 8  
Non- PRP sites    
Commitments And Contingent Liabilities [Line Items]    
Estimated future remediation costs 6  
Penalty Notification Alleging Misclassification of Importation of Certain Goods into U.S. During 2004-2009 | U.S. Customs and Border Protection (CBP)    
Commitments And Contingent Liabilities [Line Items]    
Assessed penalty $ 6 $ 18
v3.20.1
Derivative and Other Financial Instruments - Net Investment Hedges (Details) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Derivatives designated as net investment hedges | Designated as Hedging Instrument | Foreign exchange    
Derivative [Line Items]    
Amount of gain/(loss) recognized in AOCI $ 61 $ 26
v3.20.1
Derivative and Other Financial Instruments - Notional Values of Outstanding Derivative Instruments (Details) - USD ($)
$ in Millions
Mar. 31, 2020
Dec. 31, 2019
Foreign exchange | Derivatives not designated as hedges    
Derivatives, Fair Value [Line Items]    
Derivative, Notional Amount $ 921 $ 1,017
Foreign exchange | Derivatives in cash flow hedges    
Derivatives, Fair Value [Line Items]    
Derivative, Notional Amount 807 1,030
Foreign exchange | Derivatives in fair value hedges    
Derivatives, Fair Value [Line Items]    
Derivative, Notional Amount 158 142
Foreign exchange | Derivatives designated as net investment hedges    
Derivatives, Fair Value [Line Items]    
Derivative, Notional Amount 1,075 1,075
Commodities | Derivatives in cash flow hedges    
Derivatives, Fair Value [Line Items]    
Derivative, Notional Amount 356 334
Interest Rate Swap | Derivatives in cash flow hedges    
Derivatives, Fair Value [Line Items]    
Derivative, Notional Amount $ 200 $ 200