Crown Holdings Reports Third Quarter 2014 Results

Crown Holdings, Inc. (NYSE: CCK) today announced its financial results for the third quarter ended September 30, 2014.

Third Quarter Highlights

• Income per diluted share $1.76; before certain items $1.36 versus $1.04 in 2013
• YTD income per diluted share $2.70; before certain items $2.94 compared to $2.50 in 2013
• Entered into agreement to acquire Mexican beverage packaging company EMPAQUE from Heineken N.V.

Net sales in the third quarter grew to $2,594 million over the $2,389 million in the third quarter of 2013 primarily due to the impact of the Mivisa acquisition.

Segment income (a non-GAAP measure) rose to $328 million in the third quarter over the $281 million in the third quarter of 2013 primarily due to improvements in North America Food and Asia Pacific along with contributions from the Mivisa acquisition.

Commenting on the quarter, John W. Conway, Chairman and Chief Executive Officer, stated, "We are pleased with our performance during the third quarter as sales, segment income and income per share before certain items all increased significantly.  The integration of the Mivisa acquisition is proceeding according to plan and European food can demand in the third quarter was strong.  Demand for beverage cans was robust throughout our developing market portfolio and was particularly strong in Southeast Asia and Turkey.

"We are fortunate to have reached an agreement to acquire EMPAQUE, Mexico's leading producer of beverage cans.  This acquisition will significantly enhance Crown's position in beverage packaging, both regionally and globally.  In North America, we will become the second largest beverage can producer, supplying over 24 billion cans annually to a balanced portfolio of beer and soft drink customers.  On a global basis, over 50% of our beverage can revenue will be in the faster growing developing regions.  In addition, we will add to Crown the Western Hemisphere's largest bottle cap business and an excellent Mexican glass bottle business."

Interest expense in the third quarter was $64 million compared to $58 million in the third quarter of 2013 primarily due to higher average debt outstanding.

Net income attributable to Crown Holdings in the third quarter was $244 million compared to $101 million in the third quarter last year.  Income per diluted share was $1.76 in the third quarter compared to $0.73 in the third quarter of 2013.  Net income per diluted share before certain items increased to $1.36 over the $1.04 in the third quarter of 2013.

During the third quarter of 2014, the Company recorded an income tax benefit of $90 million in connection with the reversal of tax valuation allowances in France.  Also in the third quarter, the Company issued  €650 million of 4.0% senior notes due 2022 and recorded a charge of $34 million ($27 million net of tax) for premiums paid and the write off of deferred financing fees in connection with the redemption of its outstanding €500 million senior notes due 2018.

On August 31, 2014 the Company entered into a definitive agreement to acquire EMPAQUE, a leading Mexican manufacturer of aluminum cans and ends, bottle caps and glass bottles for the beverage industry, from Heineken N.V., in a cash transaction valued at $1.225 billion, subject to adjustment. The acquisition is subject to customary closing conditions, including competition authority approval.  As previously announced, EMPAQUE is expected to contribute between $0.15 and $0.20 to Crown's earnings per share on an annual basis before synergies, but including estimated amortization and depreciation for purchase accounting adjustments.

A reconciliation from net income and income per diluted share to net income before certain items and income per diluted share before certain items is provided below.

Nine Month Results

Net sales for the first nine months of 2014 rose to $6,970 million over the $6,585 million in the first nine months of 2013, reflecting the impact of the Mivisa acquisition and increased global beverage can volumes.

Segment income in the first nine months of 2014 grew to $813 million from the $749 million in the first nine months of 2013 primarily due to increased beverage can volumes and contributions from the Mivisa acquisition.

Interest expense for the first nine months of 2014 was $188 million compared to $179 million in the same period of 2013, reflecting higher average debt outstanding.

Net income attributable to Crown Holdings for the first nine months of 2014 was $374 million compared to $275 million in the first nine months of 2013.  Income per diluted share for the first nine months of 2014 grew to $2.70 compared to $1.94 in the same period last year.  Net income per diluted share before certain items increased to $2.94 over the $2.50 in 2013.

www.crowncork.com