UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q



x☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED ~~September 30, 2017~~March 31, 2021



¨☐			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.)

~~One Crown Way, Philadelphia, PA~~770 Township Line Road	Yardley	~~19154-4599~~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 x☒ No ¨☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ 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 x☒ 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		☐

~~Large accelerated filer~~		x	~~Accelerated filer~~	¨

Non-accelerated filer	o ~~(Do not check if a smaller reporting company)~~ ☐		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.~~ ¨Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2). Yes ¨☐ No x☒

There ~~were 134,272,870~~ were 134,898,957shares of Common Stock outstanding as of ~~October 26, 2017.~~April 21, 2021.

Crown Holdings, Inc.

PART I – FINANCIAL INFORMATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions except per share data)

(Unaudited)


	Three Months Ended
	March 31,
		2021		2020
Net sales		$	3,078	$	2,757
Cost of products sold, excluding depreciation and amortization		2,401		2,220
Depreciation and amortization		127		122
Selling and administrative expense		164		162
Restructuring and other		2		7
Income from operations		384		246

Other pension and postretirement		(1)		31
Interest expense		71		80
Interest income		(2)		(4)
Foreign exchange		(2)		(12)
Income before taxes		318		151
Provision for income taxes		75		38
Equity earnings in affiliates		2		1


Net income		245		114
Net income attributable to noncontrolling interests		(34)		(26)
Net income attributable to Crown Holdings		$	211	$	88

Earnings per common share attributable to Crown Holdings:


Basic		$	1.58	$	0.66



Diluted		$	1.57	$	0.65

Three Months Ended Nine Months Ended
September 30 September 30
2017 2016 2017 2016
Net sales $ 2,468
$ 2,326
$ 6,530
$ 6,361
Cost of products sold, excluding depreciation and amortization 1,956
1,838
5,194
5,050
Depreciation and amortization 63
63
183
188
Selling and administrative expense 90
90
272
275
Restructuring and other 12
20
26
19
Income from operations 347

315
855
829
Loss from early extinguishments of debt —
10
7
37
Interest expense 64
59
187
181
Interest income (4 ) (3 ) (10 ) (8 )
Foreign exchange —
(5 ) 4
(22 )
Income before income taxes 287
254
667

641
Provision for income taxes 79
48
178
151
Net income 208
206
489

490
Net income attributable to noncontrolling interests (31 ) (23 ) (77 ) (59 )
Net income attributable to Crown Holdings $ 177
$ 183
$ 412
$ 431

Earnings per common share attributable to Crown Holdings:
Basic $ 1.32
$ 1.32
$ 3.03
$ 3.11
Diluted $ 1.32
$ 1.31
$ 3.02
$ 3.09

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

Crown Holdings, Inc.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

(Unaudited)


	Three Months Ended
	March 31,
		2021		2020
Net income		$	245	$	114

Other comprehensive (loss) / income, net of tax:
Foreign currency translation adjustments		(35)		(319)
Pension and other postretirement benefits		15		257
Derivatives qualifying as hedges		15		(34)
Total other comprehensive loss		(5)		(96)

Total comprehensive income		240		18
Net income attributable to noncontrolling interests		(34)		(26)
Translation adjustments attributable to noncontrolling interests		1		3
Derivatives qualifying as hedges attributable to noncontrolling interests		(1)		2
Comprehensive income / (loss) attributable to Crown Holdings		$	206	$	(3)

Three Months Ended Nine Months Ended
September 30 September 30
2017 2016 2017 2016
Net income $ 208
$ 206
$ 489
$ 490

Other comprehensive income, net of tax:
Foreign currency translation adjustments 17
(45 ) 226
(170 )
Pension and other postretirement benefits 23
2
40
25
Derivatives qualifying as hedges 4
2
12
26
Total other comprehensive income / (loss) 44
(41 ) 278
(119 )

Total comprehensive income 252
165
767
371
Net income attributable to noncontrolling interests (31 ) (23 ) (77 ) (59 )
Translation adjustments attributable to noncontrolling interests (1 ) —
(3 ) —
Derivatives qualifying as hedges attributable to noncontrolling interests —
1
—
(2 )
Comprehensive income attributable to Crown Holdings $ 220
$ 143
$ 687
$ 310

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

Crown Holdings, Inc.

CONSOLIDATED BALANCE SHEETS (Condensed)

(In millions)

(Unaudited)


	March 31, 2021		December 31, 2020
Assets
Current assets
Cash and cash equivalents	$	588	$	1,173
Receivables, net	1,868		1,783
Inventories	1,817		1,673
Prepaid expenses and other current assets	330		254

Total current assets	4,603		4,883

Goodwill	4,487		4,593
Intangible assets, net	1,793		1,880
Property, plant and equipment, net	4,190		4,198
Operating lease right-of-use assets, net	203		214
Other non-current assets	904		902
Total	$	16,180	$	16,670

Liabilities and equity
Current liabilities
Short-term debt	$	80	$	121
Current maturities of long-term debt	82		67
Current portion of operating lease liabilities	54		55
Accounts payable	2,500		2,845
Accrued liabilities	1,040		1,173

Total current liabilities	3,756		4,261

Long-term debt, excluding current maturities	7,875		8,023
Non-current portion of operating lease liabilities	153		164
Postretirement and pension liabilities	743		762
Other non-current liabilities	845		856
Commitments and contingent liabilities (Note J)	0		0
Noncontrolling interests	431		406
Crown Holdings shareholders’ equity	2,377		2,198
Total equity	2,808		2,604
Total	$	16,180	$	16,670

September 30,
2017 December 31,
2016
Assets
Current assets
Cash and cash equivalents $ 374
$ 559
Receivables, net 1,098
865
Inventories 1,430
1,245
Prepaid expenses and other current assets 251
172
Total current assets 3,153
2,841

Goodwill and intangible assets, net 3,562
3,263
Property, plant and equipment, net 3,066
2,820
Other non-current assets 715
675
Total $ 10,496
$ 9,599

Liabilities and equity
Current liabilities
Short-term debt $ 50
$ 33
Current maturities of long-term debt 68
161
Accounts payable and accrued liabilities 2,919
2,702
Total current liabilities 3,037
2,896

Long-term debt, excluding current maturities 5,114
4,717
Postretirement and pension liabilities 519
620
Other non-current liabilities 714
698
Commitments and contingent liabilities (Note K)

Noncontrolling interests 314
302
Crown Holdings shareholders’ equity 798
366
Total equity 1,112
668
Total $ 10,496
$ 9,599

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

Crown Holdings, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Condensed)

(In millions)

(Unaudited)


	Three Months Ended
	March 31,
	2021		2020
Cash flows from operating activities
Net income	$	245	$	114
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization	127		122
Restructuring and other	2		7
Pension expense	12		43
Pension contributions	(5)		(5)
Stock-based compensation	11		10
Working capital changes and other	(777)		(898)
Net cash used for operating activities	(385)		(607)
Cash flows from investing activities
Capital expenditures	(135)		(110)
Net investment hedge	13		14
Proceeds from sale of property, plant and equipment	2		0
Net cash used for investing activities	(120)		(96)
Cash flows from financing activities
Net change in revolving credit facility and short-term debt	(13)		872
Proceeds from long-term debt	36		93
Payments of long-term debt	(26)		(12)
Foreign exchange derivatives related to debt	(4)		(5)
Payments of finance leases	(1)		(1)
Contributions from noncontrolling interests	0		2
Dividends paid to noncontrolling interests	(9)		(11)
Dividends paid to shareholders	(27)		0
Common stock issued	1		1
Common stock repurchased	(12)		(57)
Net cash (used for) / provided by financing activities	(55)		882
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(11)		(21)
Net change in cash, cash equivalents and restricted cash	(571)		158
Cash, cash equivalents and restricted cash at January 1	1,238		663
Cash, cash equivalents and restricted cash at March 31	$	667	$	821

Nine Months Ended
September 30
2017 2016
Cash flows from operating activities
Net income $ 489
$ 490
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 183
188
Restructuring and other 26
19
Pension expense 14
21
Pension contributions (46 ) (81 )
Stock-based compensation 16
15
Deferred income taxes 60
45
Changes in assets and liabilities:
Receivables (218 ) (131 )
Inventories (108 ) (95 )
Accounts payable and accrued liabilities 48
(42 )
Other, net 24
(53 )
Net cash provided by operating activities 488
376
Cash flows from investing activities
Capital expenditures (282 ) (244 )
Proceeds from sale of property, plant and equipment 8
6
Other (15 ) 10
Net cash used for investing activities (289 ) (228 )
Cash flows from financing activities
Proceeds from long-term debt 1,054
1,379
Payments of long-term debt (1,100 ) (1,810 )
Net change in revolving credit facility and short-term debt 22
108
Debt issue costs (15 ) (16 )
Common stock issued 8
8
Common stock repurchased (339 ) (8 )
Contributions from noncontrolling interests —
1
Dividends paid to noncontrolling interests (68 ) (43 )
Foreign exchange derivatives related to debt 38
53
Net cash used for financing activities (400 ) (328 )
Effect of exchange rate changes on cash and cash equivalents 16
(11 )
Net change in cash and cash equivalents (185 ) (191 )
Cash and cash equivalents at January 1 559
717
Cash and cash equivalents at September 30 $ 374
$ 526

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

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, 2021	$	929	$	179	$	4,538	$	(3,193)	$	(255)	$	2,198	$	406	$	2,604

Net income					211						211		34		245
Other comprehensive loss							(5)				(5)		0		(5)
Dividends paid to shareholders					(27)						(27)				(27)
Dividends paid to noncontrolling interests											—		(9)		(9)

Restricted stock awarded			(1)						1		—				0
Stock-based compensation			11								11				11
Common stock issued			1						0		1				1
Common stock repurchased			(11)						(1)		(12)				(12)


Balance at March 31, 2021	$	929	$	179	$	4,722	$	(3,198)	$	(255)	$	2,377	$	431	$	2,808




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											0		(11)		(11)

Restricted stock awarded			(1)						1		0				0
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

Crown Holdings, Inc. Shareholders’ Equity
Common Stock Paid-in Capital Accumulated Earnings Accumulated Other Comprehensive Loss Treasury Stock Total Crown Equity Noncontrolling Interests Total
Balance at January 1, 2016 $ 929
$ 426
$ 2,125
$ (3,154 ) $ (232 ) $ 94
$ 291
$ 385
Net income 431
431
59
490
Other comprehensive income (121 ) (121 ) 2
(119 )
Dividends paid to noncontrolling interests —
(43 ) (43 )
Contribution from noncontrolling interests —
1
1
Restricted stock awarded �� (1 ) 1
—
—
Stock-based compensation 15
15
15
Common stock issued 6
2
8
8
Common stock repurchased (7 ) (1 ) (8 ) (8 )
Balance at September 30, 2016 $ 929
$ 439
$ 2,556
$ (3,275 ) $ (230 ) $ 419
$ 310
$ 729

Balance at January 1, 2017 $ 929
$ 446
$ 2,621
$ (3,400 ) $ (230 ) $ 366
$ 302
$ 668
Cumulative effect of change in accounting principle 60
60
60
Net income 412
412
77
489
Other comprehensive income 275
275
3
278
Dividends paid to noncontrolling interests —
(68 ) (68 )
Restricted stock awarded (1 ) 1
—
—
Stock-based compensation 16
16
16
Common stock issued 7
1
8
8
Common stock repurchased (308 ) (31 ) (339 ) (339 )
Balance at September 30, 2017 $ 929
$ 160
$ 3,093
$ (3,125 ) $ (259 ) $ 798
$ 314
$ 1,112

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

Crown Holdings, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share and statistical data)

(Unaudited)


A.	~~Statement of Information Furnished~~

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 ~~September 30, 2017~~March 31, 2021 and the results of its operations for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2021 and ~~2016~~2020 and of its cash flows for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016.~~2020. The results reported in these consolidated financial statements are not necessarily indicative of the results that may be expected for the entire year. 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, ~~2016.~~2020.


B.	~~Accounting and Reporting Developments~~

~~Recently Adopted~~ B.Accounting ~~Standards~~and Reporting Developments

In July 2015, the FASB issued new guidance related to the subsequent measurement of inventory. The new guidance requires an entity to subsequently measure inventory at the lower of cost or net realizable value, which is defined as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The guidance became effective forOn January 1, 2021, the Company ~~on January 1, 2017 and did not have a material impact on the Company’s consolidated financial statements.~~

~~In March 2016, the FASB issued~~adopted new guidance on how share-based payments are accounted for and presented in the financial statements. The standard eliminates the APIC pool concept and requires that excess tax benefits and deficiencies be recorded in the income statement when awards are settled. The pronouncement also addresses simplifications related to statement of cash flows classification, accounting for forfeitures, and minimum statutory tax withholding requirements. Upon adoption of the standard on January 1, 2017, the Company recorded $60 of deferred tax assets attributable to excess tax benefits that were not previously recognized, because they did not reduce taxes payable, as a cumulative-effect adjustment to retained earnings under the modified retrospective method. The Company also prospectively adopted the guidance requiring all excess tax benefits and deficiencies to be recognized as income tax expense or benefit as discrete items and the guidance requiring all excess tax benefits or deficiencies to be reported as operating activities in the statement of cash flows. Adoption of these provisions did not have a material impact on the the Company's results of operations or statement of cash flows. The treatment of forfeitures has not changed as the Company is electing to continue the current process of estimating forfeitures.

In January 2017, the FASB issued guidance that clarifies the definition of a business by adding a framework to assist entities in evaluating whether transactions should be accounted for as acquisitions of assets or businesses. In order to be considered a business under the new guidance, the assets in the transaction need to include an input and a substantive process that together significantly contribute to the ability to create outputs. The Company early adopted this guidance as of January 1, 2017. Adoption did not have an impact on the Company's consolidated financial statements. However, it could have a material impact on the Company’s consolidated financial statements if the Company enters into future business combinations.

~~In January 2017, the FASB issued~~ guidance to simplify the accounting for ~~goodwill impairment~~income taxes by, ~~removing step two of~~among other things, reducing complexity in the ~~impairment test, which requires a hypothetical purchase price allocation.~~interim-period accounting for year-to-date loss limitations and changes in tax laws. The ~~Company early adopted this~~ guidance ~~as of January 1, 2017. The amount of goodwill impaired will now be the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill.~~

~~Crown Holdings, Inc.~~

In May 2017, the FASB issued guidance to clarify when to account for a change to terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions or the classification of an award change as a result of a change in terms or conditions. Previously, judgment was required to determine if certain changes to an award were substantive and may have impacted whether or not modification accounting was applied. The Company early adopted this guidance during the second quarter of 2017. Adopting this standard did not have a material impact on the Company's consolidated financial statements.

~~Recently Issued Accounting Standards~~

In May 2014, the FASB issued new guidance which outlines a single comprehensive model to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance. Under the new guidance, revenue is recognized when a customer obtains control of promised goods or services which will either be at a point in time or over time. Certain products thatC. Subsequent Event

On April 8, 2021, the Company ~~manufactures~~entered into a Share and Asset Purchase Agreement which provides for ~~customers have no alternative use~~the sale (the “Transaction”) of its European Tinplate business (the “Business”) to Kouti B.V., an affiliate of KPS Capital Partners LP. The Business comprises the Company’s European Food segment and ~~are expected to follow an over-time revenue recognition model. For example, beverage cans are generally printed for a specific customer~~its European Aerosol and ~~do not have an alternative use. Food cans may be printed depending upon customer preference~~Promotional Packaging reporting unit which ~~can vary by geographic market. Under current guidance,~~is reported in the ~~Company generally recognizes revenue upon shipment or delivery.~~Company's other segments. In 2020, the Business had net sales of $2,183. The Company expects to receive pre-tax proceeds of approximately €1.9 billion ($2.2 billion at March 31, 2021) from the Transaction and retain a ~~material impact~~20% minority interest in the Business.

The completion of the Transaction is subject to the ~~timing~~fulfillment of ~~our revenue recognition for products that follow an over-time revenue recognition model as a portion~~various conditions, including, among others, receipt of ~~revenue will be recognized prior~~approvals from antitrust regulators in certain jurisdictions. Completion of the Transaction is expected to ~~shipment or delivery dependent upon contract-specific terms. In addition to accelerating~~occur during the timing of revenue recognition, an unbilled receivable will be recognized with an offsetting decrease to inventory. The new guidance also requires enhanced disclosures about the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The Company has completed its initial assessment and is in the process of designing and implementing changes to processes, systems and controls to be in a position to adopt the standard on a modified retrospective basis in the firstthird quarter of ~~2018.~~2021. However, given the number of jurisdictions in which antitrust approval is required, there is no assurance that the Transaction can be completed on that timeframe.

~~In February 2016,~~Beginning with the FASB issued new guidance on lease accounting. Under the new guidance, lease classification criteria and income statement recognition are similar to current guidance; however, all leases with a term longer than one year will be recorded on the balance sheet through a right-of-use asset and a corresponding lease liability. The guidance will be effective for the Company on January 1, 2019. The Company is currently evaluating the impact of adopting this guidance, which may have a material impact on its financial position.

In August 2016, the FASB issued new guidance related to the classification of certain cash receipts and payments on the statement of cash flows. Under the new guidance, cash payments resulting from debt prepayment or extinguishment will be classified as cash outflows from financing activities. In addition, beneficial interests obtained in a securitization of financial assets should be disclosed as a noncash activity and cash receipts from the beneficial interests should be classified as cash inflows from investing activities. Under existing guidance, the Company classifies cash receipts from beneficial interests in securitized receivables and cash payments resulting from debt prepayment or extinguishment as cash flows from operating activities. The guidance will be effective for the Company on January 1, 2018. The Company is currently evaluating the impact of adopting this guidance, which may have a material impact on its cash flows from operating and investing activities.

In October 2016, the FASB issued new guidance related to intra-entity transfers of assets other than inventory. Under current guidance, income tax expense associated with intra-entity profits in an intercompany sale or transfer of assets is deferred untilquarterly period ended June 30, 2021, the assets ~~leave~~and liabilities of the consolidated group. Similarly, the entity is prohibited from recognizing deferred tax assets for any increases in tax bases due to the intercompany sale or transfer. The new guidance allows for the recognition of income tax expense and deferred tax benefits on increases on tax bases when an intercompany sale or transfer of other assets occurs. Income tax effects of intercompany inventory transactions will continue to be deferred until the assets leave the consolidated group. The guidance will be effective for the Company on January 1, 2018. The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements.

In March 2017, the FASB issued new guidance on the presentation of pension and other postretirement benefit costs. Under the new guidance only the service cost component of pension and other postretirement benefit costsBusiness will be presented ~~with other employee compensation costs within income from~~as held for sale in the Company's Consolidated Balance Sheet and the results of operations ~~or capitalized in assets. The other components~~ will be reported ~~separately outside of income from~~as discontinued operations and will not be eligible for capitalization. The guidance will be effective for the Company on January 1, 2018. The guidance is not expected to have a material impact on the Company's consolidated pension and other postretirement benefit costs or net income but is expected to have a material impact on its income from operations.

~~Crown Holdings, Inc.~~

In August 2017, the FASB issued new guidance on hedge accounting. The new guidance will allow contractually-specified price components of a commodity purchase or sale to be eligible for hedge accounting. Additionally, the new standard permits qualitative effectiveness assessments for certain hedges after the initial hedge qualification analysis. Finally, the standard amends various presentation and disclosure requirements. The guidance is effective as of January 1, 2019, however, early adoption is permitted. The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements.


C.	~~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, 2016 $ (1,690 ) $ (1,446 ) $ (18 ) $ (3,154 )
Other comprehensive (loss) income before reclassifications (13 ) (170 ) 19
(164 )
Amounts reclassified from accumulated other comprehensive income 38
—
5
43
Other comprehensive income (loss) 25
(170 ) 24
(121 )
Balance at September 30, 2016 $ (1,665 ) $ (1,616 ) $ 6
$ (3,275 )

Balance at January 1, 2017 $ (1,524 ) $ (1,879 ) $ 3
$ (3,400 )
Other comprehensive income before reclassifications 20
223
27
270
Amounts reclassified from accumulated other comprehensive income 20
—
(15 ) 5
Other comprehensive income 40
223
12
275
Balance at September 30, 2017 $ (1,484 ) $ (1,656 ) $ 15
$ (3,125 )

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

~~Crown Holdings, Inc.~~

Three Months Ended Nine Months Ended
Details about accumulated other September 30 September 30 Affected line item in the
comprehensive income components 2017 2016 2017 2016 statement of operations
(Gains) losses on cash flow hedges
    Commodities $ (7 ) $ —
$ (22 ) $ 10
Cost of products sold
(7 ) —
(22 ) 10
Income before taxes
1
—
6
(3 ) Provision for income taxes
$ (6 ) $ —
$ (16 ) $ 7
Net income

    Foreign exchange $ 3
$ 3
$ 6
$ 7
Net sales
(2 ) (4 ) (5 ) (9 ) Cost of products sold
1
(1 ) 1
(2 ) Income before taxes
—
—
—
—
Provision for income taxes
$ 1
$ (1 ) $ 1
$ (2 ) Net income

Total (gains) losses on cash flow hedges $ (5 ) $ (1 ) $ (15 ) $ 5

Amortization of defined benefit plan items
    Actuarial losses $ 21
$ 34
$ 70
$ 90
(a)
    Prior service credit (14 ) (14 ) (40 ) (40 ) (a)
7
20
30
50
Income before taxes
(4 ) (5 ) (10 ) (12 ) Provision for income taxes
$ 3
$ 15
$ 20
$ 38
Net income

Total reclassifications for the period $ (2 ) $ 14
$ 5
$ 43

~~(a) These accumulated other comprehensive income components are included in the computation of net periodic pension and postretirement cost. See~~ ~~Note M~~ ~~for further details.~~


D.	~~Stock-Based Compensation~~

~~A summary of restricted stock transactions during the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2017~~ ~~follows:~~



	~~Number of shares~~
~~Non-vested stock awards outstanding at January 1, 2017~~	~~1,321,292~~
~~Awarded:~~
~~Time-vesting shares~~	~~144,141~~
~~Performance-based shares~~	~~149,843~~
~~Released:~~
~~Time-vesting shares~~	~~(351,403~~	)
~~Performance-based shares~~	~~(115,732~~	)
~~Forfeitures:~~
~~Time-vesting shares~~	~~(29,325~~	)
~~Performance-based shares~~	~~(58,749~~	)
~~Non-vested stock awards outstanding at September 30, 2017~~	~~1,060,067~~

~~Crown Holdings, Inc.~~

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 will be 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 will be settled in stock.

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

~~The weighted average grant-date fair value of the 2017 time-vesting stock awards was $55.55 and the performance-based stock awards was $51.90.~~

The fair value of the performance-based shares subject to a market condition awarded in 2017 was calculated using a Monte Carlo valuation model, including a weighted average stock price volatility of 21.1%, an expected term of three years, and a weighted average risk-free interest rate of 1.43%.

As of September 30, 2017, unrecognized compensation cost related to outstanding non-vested stock awards was $31. The weighted average period over which the expense is expected to be recognized is 1.8 years. The aggregate market value of the shares released on the vesting dates was $26 for the nine months ended September 30, 2017.


E.	~~Receivables~~

September 30, 2017 December 31, 2016
Accounts receivable $ 963
$ 769
Less: allowance for doubtful accounts (80 ) (76 )
Net trade receivables 883
693
Miscellaneous receivables 215
172
Receivables, net $ 1,098
$ 865

The Company uses receivable securitization facilities in the normal course of business as part of managing its cash flows. In connection with certain receivable securitization facilities, the Company recognized deferred purchase price receivables of $149 and $83 at September 30, 2017 and December 31, 2016, which were included in prepaid expenses and other current assets in the Consolidated Balance Sheet. The net change in deferred purchase price receivable was reflected in the receivables line item in the Consolidated Statement of Operations.

Crown Holdings, Inc.

D. Cash, ~~Flows.~~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:


F.	~~Inventories~~


	March 31, 2021		December 31, 2020
Cash and cash equivalents	$	588	$	1,173

Restricted cash included in prepaid expenses and other current assets	78		64
Restricted cash included in other non-current assets	1		1
Total restricted cash	79		65

Total cash, cash equivalents and restricted cash	$	667	$	1,238

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

E. Receivables


	March 31, 2021		December 31, 2020
Accounts receivable	$	1,316	$	1,297
Less: allowance for credit losses	(62)		(59)
Net trade receivables	1,254		1,238
Unbilled receivables	338		294
Miscellaneous receivables	276		251
Receivables, net	$	1,868	$	1,783

F. Inventories

Inventories are stated at the lower of cost or market, with cost ~~for U.S. inventories~~ principally determined under the first-in first-out ~~(“FIFO”~~("FIFO") ~~method. Non-U.S. inventories are principally determined under the FIFO~~ or average cost method.


	March 31, 2021		December 31, 2020
Raw materials and supplies	$	1,018	$	1,003
Work in process	185		164
Finished goods	614		506
	$	1,817	$	1,673

September 30, 2017 December 31, 2016
Raw materials and supplies 698
$ 658
Work in process 153
116
Finished goods 579
471
$ 1,430
$ 1,245

Crown Holdings, Inc.


G.	~~Derivative and Other Financial Instruments~~

G. Intangible Assets

~~Fair Value Measurements~~

~~Under GAAP a framework exists for measuring fair value, providing a three-tier hierarchy~~Gross carrying amounts and accumulated amortization of ~~pricing inputs used to report~~finite-lived intangible assets ~~and liabilities that are adjusted to fair value. Level 1 includes inputs such~~by major class were 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 I~~ ~~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 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 and using sales agreements that permit the pass-through of commodity price and foreign exchange rate risk to customers.

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, except for ineffectiveness, are recorded in 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 comprehensive income is the same as that of the underlying exposure. Contracts outstanding at September 30, 2017 mature between one and thirty-seven 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 fair value accumulated in other comprehensive income are recognized immediately in earnings.

~~Crown Holdings, Inc.~~

~~The Company uses 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. Often, foreign currency risk is hedged together with the related commodity price risk.

~~The following table sets forth financial information about the impact on accumulated other comprehensive income (“AOCI”) and earnings from changes in the fair value of derivative instruments.~~follows:

Amount of gain/(loss) Amount of gain/(loss)
recognized in AOCI reclassified from AOCI
(effective portion) into earnings
Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended
Derivatives in cash flow hedges September 30, 2017 September 30, 2017 September 30, 2017 September 30, 2017

Foreign exchange $ (2 ) $ 1
$ (1 ) $ (1 )
Commodities 11
26
6
16
Total $ 9
$ 27
$ 5
$ 15

Amount of gain/(loss) Amount of gain/(loss)
recognized in AOCI reclassified from AOCI
(effective portion) into earnings
Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended
Derivatives in cash flow hedges September 30, 2016 September 30, 2016 September 30, 2016 September 30, 2016

Foreign exchange $ —
$ 3
$ 1
$ 2
Commodities 4
16
—
(7 )
Total $ 4
$ 19
$ 1
$ (5 )


	March 31, 2021						December 31, 2020
	Gross		Accumulated amortization		Net		Gross		Accumulated amortization		Net
Customer relationships	$	1,623	$	(488)	$	1,135	$	1,661	$	(470)	$	1,191
Trade names	553		(70)		483		565		(65)		500
Technology	162		(72)		90		165		(67)		98
Long term supply contracts	137		(57)		80		142		(55)		87
Patents	17		(12)		5		16		(12)		4
	$	2,492	$	(699)	$	1,793	$	2,549	$	(669)	$	1,880

~~For the three and nine months ended September 30, 2017, the Company recognized a loss~~Total amortization expense of $1 (less than $1, net of tax) and a loss of $2 ($1, net of tax) in earnings related to hedge ineffectiveness caused by volatility in the metal premium component of aluminum prices. For the nine months ended September 30, 2016, the Company recognized a gain of $1 ($1, net of tax) in earnings related to hedge ineffectiveness caused by this volatility.

~~For the twelve month period ending September 30, 2018, a net~~ ~~gain~~ of ~~$15~~ (~~$12, net of tax) is expected to be reclassified to earnings.~~ No ~~amounts were reclassified during the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2017~~ ~~and~~ ~~2016~~ ~~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~~intangible 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.

~~Crown Holdings, Inc.~~

Certain derivative financial instruments, including foreign exchange contracts related to intercompany debt, were not designated in hedge relationships; however, they are effective economic hedges as the changes in their fair value, except for time value, are offset by changes in 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 currencies other than the entity's functional currency. Changes in fair value of these derivative instruments are immediately recognized in earnings as foreign exchange adjustments.

~~The impact on earnings from foreign exchange contracts designated as fair value hedges was a gain of less than~~ $1 ~~and a loss of less than $1~~ for the three ended March 31, 2021 and ~~nine months ended September 30, 2017~~2020 was $47 and ~~a loss of $1~~$45.

H. Restructuring and a loss of $6 for the three and nine months ended September 30, 2016. The impact on earnings from foreign exchange contracts not designated as hedges was a gain of $9 and a gain of $29 for the three and nine months ended September 30, 2017 and a gain of $6 and a gain of $32 for the same periods in 2016. These amounts were reported within foreign exchange in the Consolidated Statements of Operations and were offset by changes in the fair values of the related underlying hedged items.Other

For the nine months ended September 30, 2017 and 2016, certain commodity hedges did not meet the criteria for hedge accounting and therefore the change in their fair value during the quarter was recognized in earnings. For the three and nine months ended September 30, 2017 , the Company recognized a gain of $2 ($1, net of tax) and a gain of less than $1 ($1, net of tax). For the three and nine months ended September 30, 2016 the Company recognized a gain of $1 ($1, net of tax) and a gain of $5 ($4, net of tax) in earnings related to these ineffective hedges.

~~Net Investment Hedges~~

During the three and nine months ended September 30, 2017 , the Company recorded losses of $38 ($30, net of tax) and $134 ($107, net of tax) in accumulated other comprehensive income for certain debt instruments that are designated as hedges of its net investment in a euro-based subsidiary. For the three and nine months ended September 30, 2016 the Company recorded a losses of $13 ($8, net of tax) and $31 ($20, net of tax) in accumulated other comprehensive income related to these net investment hedges.

~~Crown Holdings, Inc.~~

~~Fair Values of Derivative Financial Instruments and Valuation Hierarchy~~

~~The following table sets forth the fair value hierarchy for the Company's financial assets and liabilities that were accounted for at fair value on a recurring basis as of~~ ~~September 30, 2017~~ ~~and~~ ~~December 31, 2016, respectively.~~

Balance Sheet classification Fair Value hierarchy September 30,
2017 December 31,
2016
Derivative assets
Derivatives designated as hedges:

Foreign exchange Other current assets 2 $ 12
$ 24
Commodities Other current assets 2 16
13
Commodities Other non-current assets 2 3
3
Derivatives not designated as hedges:
Commodities Other current assets 2 15
5
Commodities Other non-current assets 2 1
—
Total $ 47
$ 45

Derivative liabilities
Derivatives designated as hedges:
Foreign exchange Accounts payable and accrued liabilities 2 $ 12
$ 28
Commodities Accounts payable and accrued liabilities 2 1
3
Foreign exchange Other non-current liabilities 2 —
1
Derivatives not designated as hedges:
Foreign exchange Accounts payable and accrued liabilities 2 10
5
Commodities Accounts payable and accrued liabilities 2 8
—
Commodities Other non-current liabilities 2 1
—
Total $ 32
$ 37

~~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 September 30, 2017
Derivative assets $47 $10 $37
Derivative liabilities 32 10 22

Balance at December 31, 2016
Derivative assets 45 6 39
Derivative liabilities 37 6 31

~~Crown Holdings, Inc.~~

~~Notional Values of Outstanding Derivative Instruments~~

~~The aggregate U.S. dollar-equivalent notional values of outstanding derivative instruments in the Consolidated Balance Sheets at September 30, 2017 and December 31, 2016 were:~~

September 30, 2017 December 31, 2016
Derivatives in cash flow hedges:
Foreign exchange $ 479
$ 644
Commodities 228
180
Derivatives in fair value hedges:

Foreign exchange 47
73
Derivatives not designated as hedges:
Foreign exchange 855
618
Commodities 52
72


H.	~~Restructuring and Other~~

The Company recorded restructuring and other ~~charges / (benefits)~~items as follows:


												Three Months Ended
	Three Months Ended					Nine Months Ended						March 31,
	September 30					September 30							2021		2020
Restructuring											Restructuring		$	8	$	3
Other (income) / costs											Other (income) / costs		(8)		3
Transaction costs											Transaction costs		2		—
Asset impairments and sales											Asset impairments and sales		0		1
	2017			2016		2017		2016					$	2	$	7
Asset impairments and sales	$	9		$	4	$	3	$	(3	)
Restructuring	4			7		8		10
Other costs	(1		)	9		15		12
	$	12		$	20	$	26	$	19

For the three and nine months ended September 30, 2017 and 2016, the Company recorded charges of $8 and $3 to write down the carrying value of fixed assets and $2 and $3 for termination benefits related to the announced closures of two beverage plants in the Company's Asia Pacific segment. The Company announced plans to close these plants in an effort to reduce costs by consolidating manufacturing processes in China.

For the nine months ended September 30, 2017, asset impairments and sales includes a benefit of $5 due to the expiration of an environmental indemnification related to the sale of certain operations in the Company's European Specialty Packaging business during 2015.

For the three and nine months ended September 30, 2017, other costs include charges of $3 and $19 due to the settlement of a litigation matter related to Mivisa that arose prior to acquisition by the Company in 2014 and a $4 pension curtailment benefit.

~~For the three and nine months ended September 30, 2016, other costs primarily relate to pension settlement charges.~~

At ~~September 30, 2017,~~March 31, 2021, the Company had restructuring ~~accruals~~accruals of ~~$12 primarily~~$18, primarily related to ~~prior actions to reduce manufacturing capacity and~~ headcount reductions in its European ~~businesses.~~and Transit Packaging divisions. The Company ~~continues~~expects to ~~review its supply and demand profile and long-term plans in its businesses, and it is possible that~~pay these amounts over the ~~Company may record additional restructuring charges in the future.~~next twelve months.

I. Asbestos-Related Liabilities

~~Crown Holdings, Inc.~~


I.	~~Debt~~

~~The Company's outstanding debt was as follows:~~

September 30, 2017 December 31, 2016
Principal Carrying Principal Carrying
outstanding amount outstanding amount
Short-term debt $ 50
$ 50
$ 33
$ 33

Long-term debt

Senior secured borrowings:

Revolving credit facilities $ 49
$ 49
$ —
$ —
Term loan facilities

U.S. dollar at LIBOR + 1.75% due 2022 745
739
654
649
Euro at EURIBOR + 1.75% due 2022¹
321
321
61
61
Farm credit facility at LIBOR + 2.00% due 2019 —
—
351
347
Senior notes and debentures:

€650 at 4.0% due 2022 768
761
684
676
U. S. dollar at 4.50% due 2023 1,000
991
1,000
991
€600 at 2.625% due 2024 709
702
631
623
€600 at 3.375% due 2025 709
700
631
622
U.S. dollar at 4.25% due 2026 400
393
400
393
U.S. dollar at 7.375% due 2026 350
347
350
347
U.S. dollar at 7.50% due 2096 45
45
45
45
Other indebtedness in various currencies 112
112
124
124
Capital lease obligations 22
22

Total long-term debt 5,230
5,182

4,931

4,878
Less current maturities (68 ) (68 ) (162 ) (161 )
Total long-term debt, less current maturities $ 5,162

$ 5,114

$ 4,769

$ 4,717

~~(1) €272 and €58 at September 30, 2017 and December 31, 2016.~~

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 $5,485 at September 30, 2017 and $5,043 at December 31, 2016.

In April 2017, the Company amended its credit agreement to provide for a $1,400 revolving credit facility, a $750 Term A Facility and a €275 Term Euro Facility. Interest rates can be reduced up to one-half percent per annum if the Company's total leverage ratio decreases to agreed levels. In connection with the amendment, the Company recorded a loss from early extinguishment of debt of $7 during the second quarter of 2017.

~~2016 Activity~~

In February 2016, the Company amended its credit agreement to provide for an additional $300 of term loan borrowings, the proceeds of which, along with borrowings under the revolving credit facilities and cash on hand, were used to redeem the Company's $700 6.25% senior notes due 2021. In September 2016, the Company issued €600 principal amount of 2.625% senior unsecured notes due 2024 and used the proceeds to repay a portion of the Euro term loan facility. In September 2016, the Company also issued $400 principal amount of 4.25% senior unsecured notes due 2026 and used the proceeds to repay a portion of the U.S dollar term loan facility.

In connection with the above transactions, the Company recorded a loss from early extinguishment of debt of $37 for the nine months ended September 30, 2016 for premiums paid and the write-off of deferred financing fees.

~~Crown Holdings, Inc.~~


J.	~~Asbestos-Related Liabilities~~

Crown Cork & Seal Company, Inc. (“Crown Cork”) is one of many defendants in a substantial number of lawsuits filed throughout the ~~United States~~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.~~Cork.r

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.

Crown Holdings, Inc.

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, in a 6-2 decision, reversed a lower court decision, Barbara Robinson v. Crown Cork & Seal Company, Inc., No. 14-04-00658-CV, Fourteenth Court of Appeals, Texas, which had upheld the dismissal of an asbestos-related case against Crown Cork. 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 ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2021, the Company paid ~~$10~~$2 to settle ~~outstanding~~asbestos claims and pay related legal and defense costs and had claims activity as follows:

~~Crown Holdings, Inc.~~

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, ~~2016,~~2020, the Company's outstanding claims were:



Claimants alleging first exposure after 1964			~~16,000~~16,500
Claimants alleging first exposure before or during 1964 filed in:
Texas			13,000
Pennsylvania			~~2,000~~1,500
Other states that have enacted asbestos legislation			6,000
Other states			~~18,500~~19,000
Total claims outstanding			~~55,500~~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

Crown Holdings, Inc.

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:


	2016		2015		2014			2020		2019
Total claims	22	%	22	%	22	%	Total claims	23	%	22	%
Pre-1964 claims in states without asbestos legislation	41	%	41	%	41	%	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 ~~September 30, 2017~~.March 31, 2021.

As of ~~September 30, 2017~~,March 31, 2021, the Company’s accrual for pending and future asbestos-related claims and related legal costs was $~~327~~,$249, including $~~270~~$207 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 ~~82%~~81% of the claims outstanding at the end of ~~2016~~)2020), 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).

~~Crown Holdings, Inc.~~


K.	~~Commitments and Contingent Liabilities~~

J. Commitments and Contingent Liabilities

The Company, along with others in most cases, has been identified by the ~~EPA~~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 ~~$9 for~~$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~~accruals of $7 ~~for~~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 ~~FCO’s investigation is ongoing. To date, the FCO has not officially charged the~~ Company ~~or any of its subsidiaries with any violations of competition law. The Company commenced~~conducted an internal investigation into the matter and discovered instances of inappropriate conduct by certain employees of German subsidiaries of the Company. The

Crown Holdings, Inc.

Company ~~is cooperating~~cooperated with the FCO and submitted a leniency application with the FCO which disclosed the findings of its internal investigation to ~~date~~date. In April 2018, the FCO discontinued its national investigation and ~~which may lead~~referred the matter to the ~~reduction~~European Commission (the “Commission”). Following the referral, Commission officials conducted unannounced inspections of ~~penalties that~~ the ~~FCO may impose. If~~premises of several metal packaging manufacturers, including Company subsidiaries in Germany, France and the ~~FCO finds that~~United Kingdom.

The Commission's investigation is ongoing and, to date, the Commission has not officially charged the Company or any of its subsidiaries ~~violated~~with violations of competition ~~law,~~law. The Company is cooperating with the ~~FCO has wide discretion~~Commission and submitted a leniency application with the Commission with respect to ~~levy fines.~~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. However, the Company~~probable but is unable to predict the ultimate outcome of the ~~FCO’s~~Commission’s investigation and is unable to estimate the loss or possible range of ~~any additional~~ losses that could be incurred, ~~which~~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~~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 and~~2004-2009. CBP initially assessed a penalty of ~~$18.~~$18 and subsequently mitigated to $6. The Company has acknowledged to CBP that the goods were misclassified and has paid all related ~~duties, which were approximately $1.~~duties. The Company has asserted that the misclassification was unintentional and disputes the penalty assessment. ~~The Company cannot predict the ultimate outcome of this matter and has not accrued a liability with respect to the assessed penalty.~~ 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 ~~however,~~ 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.

~~Crown Holdings, Inc.~~

At ~~September 30, 2017,~~March 31, 2021, 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. ~~At September 30, 2017,~~

K. 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.

Crown Holdings, Inc.

and may affect the valuation of assets and liabilities measured at fair value and their placement within 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 L for fair value disclosures related to debt.

Derivative Financial Instruments

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, 2021 mature between one and twenty-two 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 ~~had guarantees~~designates certain foreign exchange contracts as cash flow hedges of $6anticipated 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.

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		2021		2020
Foreign exchange		$	(1)	$	1
Interest Rate		1		(1)
Commodities		25		(39)
		$	25	$	(39)

	Amount of gain/(loss) reclassified from AOCI into income
	Three Months Ended March 31,
Derivatives in cash flow hedges		2021		2020		Affected line items in the Statement of Operations
Foreign exchange		$	0	$	(1)	Net sales
Commodities		4		3		Net sales
Foreign exchange		0		(1)		Cost of products sold
Commodities		(19)		(10)		Cost of products sold
		(15)		(9)		Income before taxes
		4		2		Provision for income taxes
Total reclassified		$	(11)	$	(7)	Net income

For the twelve-month period ending March 31, 2022, a net gain of $49 ($39, net of tax) is expected to be reclassified to earnings for commodity and foreign exchange contracts. NaN amounts were reclassified during the three months ended March 31, 2021 and 2020 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, 2021 and 2020, the Company recorded a gain of $7 and loss 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.

Crown Holdings, Inc.

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


	Pre-tax amounts of gain/(loss) recognized in income on derivative
	Three Months Ended March 31,
Derivatives not designated as hedges		2021		2020		Affected line item in the Statement of Operations





Foreign exchange		$	(1)	$	(1)	Net sales
Foreign exchange		1		1		Cost of products sold

Foreign exchange		(13)		6		Foreign exchange

		$	(13)	$	6

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, 2021 and 2020, the Company recorded a gain of $54 ($54, net of tax) and a gain of $26 ($26, 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, 2021 and December 31, 2020, cumulative gains of $21 ($44, net of tax) and losses of $33 ($10, 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 €1,115 ($1,308) at March 31, 2021.

The following tables set forth the impact on AOCI from changes in the fair value of derivative instruments designated as net investment hedges.


	Amount of gain / (loss) recognized in AOCI
	Three months ended March 31,
Derivatives designated as net investment hedges		2021		2020
Foreign exchange		$	22	$	61

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, 2021 and December 31, 2020, respectively. The fair values of these financial instruments were reported under Level 2 of the fair value hierarchy.

Crown Holdings, Inc.


	Balance Sheet classification	March 31, 2021		December 31, 2020		Balance Sheet classification	March 31, 2021		December 31, 2020
Derivatives designated as hedging instruments
Foreign exchange contracts cash flow	Other current assets	$	20	$	9	Accrued liabilities	$	22	$	8
	Other non-current assets	0		0		Other non-current liabilities	0		1
Foreign exchange contracts fair value	Other current assets	5		2		Accrued liabilities	2		6

Commodities contracts cash flow	Other current assets	69		45		Accrued liabilities	21		11
	Other non-current assets	6		4		Other non-current liabilities	1		0
Interest rate contracts cash flow	Other non-current assets	0		0		Other non-current liabilities	1		2
Net investment hedge	Other non-current assets	26		7		Other non-current liabilities	11		20
		$	126	$	67		$	58	$	48
Derivatives not designated as hedging instruments
Foreign exchange contracts	Other current assets	$	9	$	9	Accrued liabilities	$	14	$	4





		$	9	$	9		$	14	$	4

Total derivatives		$	135	$	76		$	72	$	52

Fair Value Hedge Carrying Amounts




	Carrying amount of the hedged assets / liabilities
	March 31, 2021		December 31, 2020
Line item in the Balance Sheet in which the hedged item is included
Cash and cash equivalents	$	23	$	22
Receivables, net	35		11
Accounts payable	136		100

As of March 31, 2021, the cumulative amount of fair value hedging adjustments included in the carrying amount of the hedge assets and liabilities was a loss of $3. As of December 31, 2020, the cumulative amount of fair value hedging adjustments included in the carrying amount of the hedge assets and liabilities was a gain of $4.

Offsetting of Derivative Assets and Liabilities

Crown Holdings, Inc.


	Gross amounts recognized in the Balance Sheet	Gross amounts not offset in the Balance Sheet	Net amount
Balance at March 31, 2021
Derivative assets	$135	$22	$113
Derivative liabilities	72	22	50

Balance at December 31, 2020
Derivative assets	76	11	65
Derivative liabilities	52	11	41

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, 2021 and December 31, 2020 were:


	March 31, 2021		December 31, 2020
Derivatives designated as cash flow hedges:
Foreign exchange	$	932	$	1,127
Commodities	216		248
Interest rate	200		200
Derivatives designated as fair value hedges:
Foreign exchange	280		183
Derivatives designated as net investment hedges:
Foreign exchange	1,075		1,075
Derivatives not designated as hedges:
Foreign exchange	723		722

Crown Holdings, Inc.

L. Debt

The Company's outstanding debt was as follows:


	March 31, 2021				December 31, 2020
	Principal		Carrying		Principal		Carrying
	outstanding		amount		outstanding		amount
Short-term debt	$	80	$	80	$	121	$	121

Long-term debt
Senior secured borrowings:
Revolving credit facilities	26		26		0		0
Term loan facilities
U.S. dollar at LIBOR + 1.2% due 2024	1,022		1,017		1,029		1,023

Euro at EURIBOR + 1.2% due 20241	368		368		387		387

Senior notes and debentures:
€650 at 4.0% due 2022	762		760		794		791
U. S. dollar at 4.50% due 2023	1,000		997		1,000		997
€335at 2.25% due 2023	393		391		409		407
€550 at 0.75% due 2023	645		642		671		666
€600 at 2.625% due 2024	704		700		733		729
€600 at 3.375% due 2025	704		699		733		728
U.S. dollar at 4.25% due 2026	400		396		400		396
U.S. dollar at 4.75% due 2026	875		865		875		865
U.S. dollar at 7.375% due 2026	350		348		350		348
€500 at 2.875% due 2026	586		580		610		603
U.S. dollar at 7.50% due 2096	40		40		40		40
Other indebtedness in various currencies	128		128		110		110

Total long-term debt	8,003		7,957		8,141		8,090
Less current maturities	(82)		(82)		(67)		(67)
Total long-term debt, less current maturities	$	7,921	$	7,875	$	8,074	$	8,023

(1) €314 and €317 at March 31, 2021 and December 31, 2020

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 $8,414 at March 31, 2021 and $8,617 at December 31, 2020.

M. Pension and Other Postretirement Benefits

The components of net periodic pension and other postretirement benefits costs for the three months ended March 31, 2021 and 2020 were as follows:


	Three Months Ended
	March 31,
Pension benefits – U.S. plans		2021		2020
Service cost		$	5	$	5
Interest cost		6		10
Expected return on plan assets		(15)		(18)

Recognized net loss		15		14
Net periodic cost		$	11	$	11

Crown Holdings, Inc.


	Three Months Ended
	March 31,
Pension benefits – Non-U.S. plans		2021		2020
Service cost		$	3	$	3
Interest cost		9		14
Expected return on plan assets		(20)		(31)

Settlement loss		0		37

Recognized net loss		9		9

Net periodic cost		$	1	$	32


	Three Months Ended
	March 31,
Other postretirement benefits		2021		2020

Interest cost		$	1	$	1
Recognized prior service credit		(7)		(6)
Recognized net loss		1		1
Net periodic benefit		$	(5)	$	(4)

In the three months ended March 31, 2020, the Company recorded settlement charges related to the ~~residual values~~payment of ~~leased~~lump sum buy-outs to settle certain non-U.S. pension obligations using plan assets.

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
	March 31,
Details about accumulated other comprehensive income components		2021		2020		Affected line items in the statement of operations
Actuarial losses		$	25	$	24	Other pension and postretirement
Settlements		0		37		Other pension and postretirement
Prior service credit		(7)		(6)		Other pension and postretirement

		18		55		Income before taxes
		(3)		(4)		Provision for income taxes
Total reclassified		$	15	$	51	Net income

Crown Holdings, Inc.

N. 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, 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		0		7		58
Other comprehensive income / (loss)	257		(316)		(32)		(91)
Balance at March 31, 2020	$	(1,192)	$	(1,984)	$	(46)	$	(3,222)

Balance at January 1, 2021	$	(1,464)	$	(1,759)	$	30	$	(3,193)

Other comprehensive (loss) / income before reclassifications	0		(34)		25		(9)
Amounts reclassified from accumulated other comprehensive income	15		0		(11)		4
Other comprehensive income / (loss)	15		(34)		14		(5)
Balance at March 31, 2021	$	(1,449)	$	(1,793)	$	44	$	(3,198)

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


L.	~~Earnings Per Share~~

O. Revenue

For the three months ended March 31, 2021 and 2020, the Company recognized revenue as follows:


	Three Months Ended
	March 31,
		2021		2020
Revenue recognized over time		$	1,628	$	1,475
Revenue recognized at a point in time		1,450		1,282
Total revenue		$	3,078	$	2,757

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

The Company recorded contract assets of $52 and $37 in prepaid and other current assets as of March 31, 2021 and December 31, 2020. For the three months ended March 31, 2021, the Company recorded new contract assets related to customized work-in-process inventory in the Company's equipment business.

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,
		2021		2020
Net income attributable to Crown Holdings		$	211	$	88
Weighted average shares outstanding:
Basic		133.6		134.1
Dilutive restricted stock		1.0		0.9
Diluted		134.6		135.0
Basic earnings per share		$	1.58	$	0.66
Diluted earnings per share		$	1.57	$	0.65

Three Months Ended Nine Months Ended
September 30 September 30
2017 2016 2017 2016
Net income attributable to Crown Holdings $ 177
$ 183
$ 412
$ 431
Weighted average shares outstanding:
Basic 134.0
138.7
135.9
138.4
Dilutive stock options and restricted stock 0.4
0.8
0.5
1.0
Diluted 134.4
139.5
136.4
139.4
Basic earnings per share $ 1.32
$ 1.32
$ 3.03
$ 3.11
Diluted earnings per share $ 1.32
$ 1.31
$ 3.02
$ 3.09

For the three ~~and nine~~ months ended September 30, 2017, there were no contingently issuable common shares excluded from the computation of diluted earnings per share because the effect would be anti-dilutive. For the three and nine months ended September 30, 2016, 0.1 million and 0.5March 31, 2020, 0.4 million contingently issuable common shares were excluded from the computation of diluted earnings per share because the effect would be anti-dilutive.


M.	~~Pension and Other Postretirement Benefits~~

The ~~components~~Company declared and paid cash dividends of ~~net periodic pension and other postretirement benefits costs~~$.20 per share for the three ~~and nine~~ months ended ~~September 30, 2017 and 2016 were as follows:~~

Three Months Ended Nine Months Ended
September 30 September 30
Pension benefits – U.S. plans 2017 2016 2017 2016
Service cost $ 4
$ 5
$ 11
$ 12
Interest cost 12
12
37
37
Expected return on plan assets (21 ) (23 ) (62 ) (68 )
Recognized net loss 13
12
39
37
Net periodic cost $ 8
$ 6
$ 25
$ 18

Three Months Ended Nine Months Ended
September 30 September 30
Pension benefits – Non-U.S. plans 2017 2016 2017 2016
Service cost $ 5
$ 6
$ 16
$ 17
Interest cost 20
25
58
78
Expected return on plan assets (38 ) (39 ) (108 ) (121 )
Recognized prior service credit (3 ) (3 ) (9 ) (9 )
Recognized net loss 11
12
32
38
Net periodic (benefit) cost $ (5 ) $ 1
$ (11 ) $ 3

~~Crown Holdings, Inc.~~

Three Months Ended Nine Months Ended
September 30 September 30
Other postretirement benefits 2017 2016 2017 2016
Service cost $ 1
$ 1
$ 1
$ 1
Interest cost 1
1
3
3
Recognized prior service credit (11 ) (11 ) (31 ) (31 )
Recognized net loss 1
1
3
3
Net periodic benefit $ (8 ) $ (8 ) $ (24 ) $ (24 )

The Company also recorded a pension curtailment benefit of $4 during the three and nine months ended September 30, 2017 and pension settlement charges of $9 and $12 during the three and nine months ended September 30, 2016 which were included in restructuring and other in the Consolidated Statement of Operations.


N.	~~Income Taxes~~

~~The provision for income taxes differs from the amount of income tax determined by applying the U.S. statutory federal income tax rate to pre-tax income as a result of the following items:~~

Three Months Ended Nine Months Ended
September 30 September 30
2017 2016 2017 2016
U.S. statutory rate at 35% $ 100
$ 89
$ 233
$ 225
Tax on foreign income (33 ) (30 ) (75 ) (71 )
Tax contingencies —
8
5
9
Valuation allowance 4
(27 ) 7
(25 )
Other items, net 8
8
8
13
Income tax provision $ 79
$ 48
$ 178
$ 151

In the third quarter of 2016, the Company recognized a benefit of $31 to release the valuation allowance against its net deferred tax assets in Canada. The Company's operations in Canada returned to profitability in part due to benefits from recent restructuring actions and improved cost performance. BasedMarch 31, 2021. Additionally, on current projections, the Company believes it is more likely than not that it will realize the deferred tax assets. The Company's loss carryforwards in Canada expire at various dates beginning in 2026. If future changes impactApril 22, 2021, the Company's ~~profitability in Canada, it is possible that the Company may~~Board of Directors declared a dividend of $.20 per share payable on May 20, 2021 to shareholders of record ~~an additional valuation allowance in the future.~~on May 6, 2021.

In the third quarter of 2016, the Company recognized a charge of $5 for the write off of certain tax credit carryforwards that the Company will be unable to utilize as a result of an internal reorganization of the Company's operations in the U.K.

In the third quarter of 2016, the Spanish tax authorities concluded their audits of Mivisa's Spanish operations for the years 2009 to 2014. In connection with the audits, the Company recognized a charge of $8 to settle certain tax contingencies.Q. Segment Information


O.	~~Segment Information~~

The Company evaluates performance and allocates resources based on segment ~~income. Segment~~ income, which is not a defined term under ~~GAAP, is defined by the~~GAAP. The Company defines segment income as income from operations adjusted to ~~add back~~exclude intangibles amortization charges, provisions for asbestos and restructuring and other, and the impact of fair value adjustments ~~related~~ to ~~the sale of~~ inventory acquired in an ~~acquisition and the timing impact of hedge ineffectiveness.~~ acquisition.

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

~~Crown Holdings, Inc.~~

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


	External Sales				External Sales					External Sales
	Three Months Ended				Nine Months Ended					Three Months Ended
	September 30				September 30					March 31,
	2017		2016		2017		2016				2021		2020
Americas Beverage	$	763	$	719	$	2,166	$	2,068	Americas Beverage		$	993	$	871
North America Food	194		190		514		504
European Beverage	428		413		1,133		1,129		European Beverage		389		346
European Food	639		599		1,477		1,459		European Food		460		402
Asia Pacific	300		281		865		839		Asia Pacific		331		301
Transit Packaging									Transit Packaging		557		522
Total reportable segments	2,324		2,202		6,155		5,999		Total reportable segments		2,730		2,442
Non-reportable segments	144		124		375		362
Other segments									Other segments		348		315
Total	$	2,468	$	2,326	$	6,530	$	6,361	Total		$	3,078	$	2,757

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

Crown Holdings, Inc.


	Intersegment Sales				Intersegment Sales					Intersegment Sales
	Three Months Ended				Nine Months Ended					Three Months Ended
	September 30				September 30					March 31,
	2017		2016		2017		2016				2021		2020
Americas Beverage	$	9	$	11	$	32	$	44	Americas Beverage		$	0	$	6
North America Food	4		6		15		19
European Beverage	—		1		1		2		European Beverage		36		1
European Food	17		14		52		50		European Food		32		21
Asia Pacific	—		—		—		—

Transit Packaging									Transit Packaging		7		4
Total reportable segments	30		32		100		115		Total reportable segments		75		32
Non-reportable segments	17		48		68		110
Other segments									Other segments		38		29
Total	$	47	$	80	$	168	$	225	Total		$	113	$	61

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,
		2021		2020
Americas Beverage		$	188	$	134
European Beverage		62		39
European Food		63		33
Asia Pacific		52		45
Transit Packaging		70		66
Total reportable segments		$	435	$	317

Segment Income Segment Income
Three Months Ended Nine Months Ended
September 30 September 30
2017 2016 2017 2016
Americas Beverage $ 131
$ 119
$ 345
$ 329

North America Food 23
25
61
57

European Beverage 78
83
201
204

European Food 96
96
210
212

Asia Pacific 40
37
124
111

Total reportable segments $ 368
$ 360
$ 941
$ 913

~~Crown Holdings, Inc.~~

A reconciliation of segment income of reportable segments to income before income taxes is as follows:


	Three Months Ended
	March 31,
		2021		2020
Segment income of reportable segments		$	435	$	317
Segment income of other segments		37		19
Corporate and unallocated items		(39)		(38)
Restructuring and other		(2)		(7)
Amortization of intangibles		(47)		(45)

Other pension and postretirement		1		(31)
Interest expense		(71)		(80)
Interest income		2		4
Foreign exchange		2		12
Income before income taxes		$	318	$	151

Three Months Ended Nine Months Ended
September 30 September 30
2017
2016 2017
2016
Segment income of reportable segments $ 368
$ 360
$ 941
$ 913

Segment income of non-reportable segments 20
19
52
52

Corporate and unallocated items (29 ) (44 ) (112 ) (117 )
Restructuring and other (12 ) (20 ) (26 ) (19 )
Loss from early extinguishments of debt —
(10 ) (7 ) (37 )
Interest expense (64 ) (59 ) (187 ) (181 )
Interest income 4
3
10
8

Foreign exchange —
5
(4 ) 22

Income before income taxes $ 287

$ 254
$ 667
$ 641

For the three ~~and nine~~ months ended ~~September 30, 2017,~~March 31, 2021 and 2020, intercompany ~~profit~~profits of $2 and less than $1 ~~and $5 and for the three and nine months ended September 30, 2016, intercompany profit of $8 and $12 was~~were eliminated within segment income of ~~non-reportable~~other segments.

Corporate and unallocated items includes corporate and division administrative costs, technology costs, and unallocated items such as ~~the U.S. and U.K. pension plan costs, fair value adjustments for the sale of inventory acquired in an acquisition and the timing impact of hedge ineffectiveness.~~stock-based compensation.

Crown Holdings, Inc.


P.	~~Condensed Combining Financial Information~~

~~Crown Cork & Seal Company, Inc. (Issuer), a 100% owned subsidiary of the Company, has~~ ~~$350~~ ~~principal amount of~~ ~~7.375%~~ ~~senior notes due~~ ~~2026~~ ~~and~~ ~~$45~~ ~~principal amount of~~ ~~7.5%~~ ~~senior notes due~~ ~~2096~~ ~~outstanding that are fully and unconditionally guaranteed by Crown Holdings, Inc. (Parent). No other subsidiary guarantees the debt and the guarantees are made on a joint and several basis.~~

~~The following condensed combining financial statements:~~

•~~statements of comprehensive income for the three and nine months ended September 30, 2017 and~~ ~~2016~~,

•~~balance sheets as of September 30, 2017 and~~ ~~December 31, 2016, and~~

•~~statements of cash flows for the~~ ~~nine~~ ~~months ended September 30, 2017 and~~ ~~2016~~

~~are presented on the following pages to comply with the Company’s requirements under Rule 3-10 of Regulation S-X.~~

~~CONDENSED COMBINING STATEMENT OF COMPREHENSIVE INCOME~~

~~For the three months ended~~ ~~September 30, 2017~~

~~(in millions)~~

Parent Issuer
Non-
Guarantors
Eliminations
Total
Company
Net sales

$ 2,468

$ 2,468
Cost of products sold, excluding depreciation and amortization

1,956

1,956
Depreciation and amortization

63

63
Selling and administrative expense
$ 1
89

90
Restructuring and other

12

12
Income from operations (1 ) 348
347
Net interest expense
23
37

60
Income/(loss) before income taxes (24 ) 311
287
Provision for / (benefit from) income taxes
(15 ) 94

79
Equity earnings / (loss) in affiliates $ 177
155

$ (332 ) —
Net income 177
146
217
(332 ) 208
Net income attributable to noncontrolling interests

(31 )
(31 )
Net income attributable to Crown Holdings $ 177
$ 146
$ 186
$ (332 ) $ 177

Comprehensive income $ 220
$ 184
$ 261
$ (413 ) $ 252
Comprehensive income attributable to noncontrolling interests

(32 )
(32 )
Comprehensive income attributable to Crown Holdings $ 220
$ 184
$ 229
$ (413 ) $ 220

~~Crown Holdings, Inc.~~

~~CONDENSED COMBINING STATEMENT OF COMPREHENSIVE INCOME~~

~~For the three months ended~~ ~~September 30, 2016~~

~~(in millions)~~

Parent Issuer
Non-
Guarantors
Eliminations
Total
Company
Net sales

$ 2,326

$ 2,326
Cost of products sold, excluding depreciation and amortization

1,838

1,838
Depreciation and amortization

63

63
Selling and administrative expense
$ 3
87

90
Restructuring and other
9
11

20
Income from operations (12 ) 327
315
Loss from early extinguishment of debt

10

10
Net interest expense
27
29

56
Foreign exchange

(5 )
(5 )
Income/(loss) before income taxes (39 ) 293

254
Provision for / (benefit from) income taxes
(19 ) 67

48
Equity earnings / (loss) in affiliates $ 183
180

$ (363 ) —
Net income 183
160
226
(363 ) 206
Net income attributable to noncontrolling interests

(23 )
(23 )
Net income attributable to Crown Holdings $ 183
$ 160
$ 203
$ (363 ) $ 183

Comprehensive income $ 143
$ 113
$ 165
$ (256 ) $ 165
Comprehensive income attributable to noncontrolling interests

(22 )
(22 )
Comprehensive income attributable to Crown Holdings $ 143
$ 113
$ 143
$ (256 ) $ 143

~~Crown Holdings, Inc.~~

~~CONDENSED COMBINING STATEMENT OF COMPREHENSIVE INCOME~~

~~For the nine months ended~~ ~~September 30, 2017~~

~~(in millions)~~

Parent Issuer Non-
Guarantors Eliminations Total
Company
Net sales

$ 6,530

$ 6,530
Cost of products sold, excluding depreciation and amortization

5,194

5,194
Depreciation and amortization

183

183
Selling and administrative expense
$ 5
267

272
Restructuring and other
(1 ) 27

26
Income from operations (4 ) 859
855
Loss from early extinguishment of debt

7

7
Net interest expense
69
108

177
Foreign exchange

4

4
Income/(loss) before income taxes (73 ) 740
667
Provision for / (benefit from) income taxes
(33 ) 211

178
Equity earnings / (loss) in affiliates $ 412
384

$ (796 ) —
Net income 412
344
529
(796 ) 489
Net income attributable to noncontrolling interests

(77 )
(77 )
Net income attributable to Crown Holdings $ 412
$ 344
$ 452
$ (796 ) $ 412

Comprehensive income $ 687
$ 429
$ 807
$ (1,156 ) $ 767
Comprehensive income attributable to noncontrolling interests

(80 )
(80 )
Comprehensive income attributable to Crown Holdings $ 687
$ 429
$ 727
$ (1,156 ) $ 687

~~Crown Holdings, Inc.~~

~~CONDENSED COMBINING STATEMENT OF COMPREHENSIVE INCOME~~

~~For the nine months ended~~ ~~September 30, 2016~~

~~(in millions)~~

Parent Issuer Non-
Guarantors Eliminations Total
Company
Net sales

$ 6,361

$ 6,361
Cost of products sold, excluding depreciation and amortization

5,050

5,050
Depreciation and amortization

188

188
Selling and administrative expense
$ 8
267

275
Restructuring and other
12 7

19
Income from operations (20 ) 849
829
Loss from early extinguishment of debt

37

37
Net interest expense
79
94

173
Foreign exchange

(22 )
(22 )
Income/(loss) before income taxes (99 ) 740
641
Provision for / (benefit from) income taxes
(42 ) 193

151
Equity earnings / (loss) in affiliates $ 431
403

$ (834 ) —
Net income 431
346
547
(834 ) 490
Net income attributable to noncontrolling interests

(59 )
(59 )
Net income attributable to Crown Holdings $ 431
$ 346
$ 488
$ (834 ) $ 431

Comprehensive Income $ 310
$ 299
$ 428
$ (666 ) $ 371
Comprehensive income attributable to noncontrolling interests

(61 )
(61 )
Comprehensive income attributable to Crown Holdings $ 310
$ 299
$ 367
$ (666 ) $ 310

~~Crown Holdings, Inc.~~

~~CONDENSED COMBINING BALANCE SHEET~~

~~As of September 30, 2017~~

~~(in millions)~~

Parent Issuer
Non-
Guarantors
Eliminations
Total
Company
Assets
Current assets
Cash and cash equivalents

$ 374

$ 374
Receivables, net

1,098

1,098
Inventories

1,430

1,430
Prepaid expenses and other current assets $ 1

250

251
Total current assets 1
—
3,152
3,153

Intercompany debt receivables

3,568
$ (3,568 ) —
Investments 3,324
3,348

(6,672 ) —
Goodwill and intangible assets, net

3,562

3,562
Property, plant and equipment, net

3,066

3,066
Other non-current assets
513
202

715
Total $ 3,325
$ 3,861
$ 13,550
$ (10,240 ) $ 10,496

Liabilities and equity
Current liabilities
Short-term debt

$ 50

$ 50
Current maturities of long-term debt

68

68
Accounts payable and accrued liabilities $ 18
$ 40
2,861

2,919
Total current liabilities 18
40
2,979
3,037

Long-term debt, excluding current maturities
392
4,722

5,114
Long-term intercompany debt 2,509
1,059

$ (3,568 ) —
Postretirement and pension liabilities

519

519
Other non-current liabilities
347
367

714
Commitments and contingent liabilities

Noncontrolling interests

314

314
Crown Holdings shareholders’ equity/(deficit) 798
2,023
4,649
(6,672 ) 798
Total equity/(deficit) 798
2,023
4,963
(6,672 ) 1,112
Total $ 3,325
$ 3,861
$ 13,550
$ (10,240 ) $ 10,496

~~Crown Holdings, Inc.~~

~~CONDENSED COMBINING BALANCE SHEET~~

~~As of December 31, 2016~~

~~(in millions)~~

Parent Issuer
Non-
Guarantors
Eliminations
Total
Company
Assets
Current assets
Cash and cash equivalents

$ 559

$ 559
Receivables, net

865

865
Inventories

1,245

1,245
Prepaid expenses and other current assets $ 1

171

172
Total current assets 1
—
2,840
2,841

Intercompany debt receivables

3,447
$ (3,447 ) —
Investments 2,857
$ 2,915

(5,772 ) —
Goodwill and intangible assets, net

3,263

3,263
Property, plant and equipment, net

2,820

2,820
Other non-current assets
447
228

675
Total $ 2,858
$ 3,362
$ 12,598
$ (9,219 ) $ 9,599

Liabilities and equity
Current liabilities
Short-term debt

$ 33

$ 33
Current maturities of long-term debt

161

161
Accounts payable and accrued liabilities $ 23
$ 40
2,639

2,702
Total current liabilities 23
40
2,833
2,896

Long-term debt, excluding current maturities
392
4,325

4,717
Long-term intercompany debt 2,469
978

$ (3,447 ) —
Postretirement and pension liabilities

620

620
Other non-current liabilities
358
340

698
Commitments and contingent liabilities

Noncontrolling interests

302

302
Crown Holdings shareholders’ equity/(deficit) 366
1,594
4,178
(5,772 ) 366
Total equity/(deficit) 366
1,594
4,480
(5,772 ) 668
Total $ 2,858
$ 3,362
$ 12,598
$ (9,219 ) $ 9,599

~~Crown Holdings, Inc.~~

~~CONDENSED COMBINING STATEMENT OF CASH FLOWS~~

~~For the nine months ended September 30, 2017~~

~~(in millions)~~

Parent Issuer
Non-
Guarantors
Eliminations
Total
Company
Net cash provided by/(used for) operating activities $ (4 ) $ (23 ) $ 551
$ (36 ) $ 488
Cash flows from investing activities
Capital expenditures

(282 )
(282 )
Proceeds from sale of property, plant and equipment

8

8
Intercompany investing activities 235

(235 ) —
Other

(15 )
(15 )
Net cash provided by/(used for) investing activities 235

(289 ) (235 ) (289 )
Cash flows from financing activities
Proceeds from long-term debt

1,054

1,054
Payments of long-term debt

(1,100 )
(1,100 )
Net change in revolving credit facility and short-term debt

22

22
Net change in long-term intercompany balances 100
23
(123 )
—
Debt issue costs

(15 )
(15 )
Common stock issued 8

8
Common stock repurchased (339 )

(339 )
Dividends paid

(271 ) 271
—
Dividend paid to noncontrolling interests

(68 )
(68 )
Foreign exchange derivatives related to debt

38

38
Net cash provided by/(used for) financing activities (231 ) 23
(463 ) 271
(400 )
Effect of exchange rate changes on cash and cash equivalents

16

16
Net change in cash and cash equivalents —
—
(185 ) —
(185 )
Cash and cash equivalents at January 1

559

559
Cash and cash equivalents at September 30 $ —
$ —
$ 374
$ —

$ 374

~~Crown Holdings, Inc.~~

~~CONDENSED COMBINING STATEMENT OF CASH FLOWS~~

~~For the nine months ended September 30, 2016~~

~~(in millions)~~

Parent Issuer
Non-
Guarantors
Eliminations
Total
Company
Net cash provided by/(used for) operating activities $ 6
$ (86 ) $ 466
$ (10 ) $ 376
Cash flows from investing activities
Capital expenditures

(244 )
(244 )
Proceeds from sale of property, plant and equipment

6

6
Intercompany investing activities 150

(150 ) —
Other

10

10
Net cash provided by/(used for) investing activities 150

(228 ) (150 ) (228 )
Cash flows from financing activities
Proceeds from long-term debt

1,379

1,379
Payments of long-term debt

(1,810 )
(1,810 )
Net change in revolving credit facility and short-term debt

108

108
Net change in long-term intercompany balances (156 ) 86
70

—
Debt issue costs

(16 )
(16 )
Common stock issued 8

8
Common stock repurchased (8 )

(8 )
Dividends paid

(160 ) 160
—
Contribution from noncontrolling interests

1

1
Dividend paid to noncontrolling interests

(43 )
(43 )
Foreign exchange derivatives related to debt

53

53
Net cash provided by/(used for) financing activities (156 ) 86
(418 ) 160
(328 )
Effect of exchange rate changes on cash and cash equivalents

(11 )
(11 )
Net change in cash and cash equivalents —
—
(191 ) —
(191 )
Cash and cash equivalents at January 1

717

717
Cash and cash equivalents at September 30 $ —
$ —
$ 526
$ —
$ 526

~~Crown Holdings, Inc.~~

Crown Americas, LLC, Crown Americas Capital Corp. IV and Crown Americas Capital Corp. V (collectively, the Issuer), 100% owned subsidiaries of the Company, have outstanding $1,000 principal amount of 4.5% senior notes due 2023 and $400 principal amount of 4.25% senior notes due 2026, which are fully and unconditionally guaranteed by Crown Holdings, Inc. (Parent) and substantially all of its subsidiaries in the United States. The guarantors are 100% owned by the Company and the guarantees are made on a joint and several basis.

~~The following condensed combining financial statements:~~

~~statements of comprehensive income for the three and nine months ended September 30, 2017 and~~ ~~2016~~,

~~balance sheets as of September 30, 2017 and~~ ~~December 31, 2016, and~~

~~statements of cash flows for the~~ ~~nine~~ ~~months ended September 30, 2017 and~~ ~~2016~~

~~are presented on the following pages to comply with the Company’s requirements under Rule 3-10 of Regulation S-X.~~

~~CONDENSED COMBINING STATEMENT OF COMPREHENSIVE INCOME~~

~~For the three months ended~~ ~~September 30, 2017~~

~~(in millions)~~

Parent Issuer Guarantors
Non-
Guarantors
Eliminations
Total
Company
Net sales

$ 512
$ 1,956

$ 2,468
Cost of products sold, excluding depreciation and amortization

407
1,549

1,956
Depreciation and amortization

10
53

63
Selling and administrative expense
$ 3
31
56

90
Restructuring and other

12

12
Income from operations

(3 ) 64
286
347
Net interest expense
16
25
19

60
Technology royalty

(15 ) 15

—
Foreign exchange
23

$ (23 ) —
Income/(loss) before income taxes (42 ) 54
252
23
287
Provision for / (benefit from) income taxes
(16 ) 18
69
8
79
Equity earnings / (loss) in affiliates $ 177
67
110

(354 ) —
Net income 177
41
146
183
(339 ) 208
Net income attributable to noncontrolling interests

(31 )
(31 )
Net income attributable to Crown Holdings $ 177
$ 41
$ 146
$ 152
$ (339 ) $ 177

Comprehensive income $ 220
$ 37
$ 184
$ 245
$ (434 ) $ 252
Comprehensive income attributable to noncontrolling interests

(32 )
(32 )
Comprehensive income attributable to Crown Holdings $ 220
$ 37
$ 184
$ 213
$ (434 ) $ 220

~~Crown Holdings, Inc.~~

~~CONDENSED COMBINING STATEMENT OF COMPREHENSIVE INCOME~~

~~For the three months ended~~ ~~September 30, 2016~~

~~(in millions)~~

Parent Issuer Guarantors
Non-
Guarantors
Eliminations
Total
Company
Net sales

$ 513
$ 1,813

$ 2,326
Cost of products sold, excluding depreciation and amortization

404
1,434

1,838
Depreciation and amortization

9
54

63
Selling and administrative expense
$ 2
34
54

90
Restructuring and other

10
10

20
Income from operations (2 ) 56
261
315
Loss from early extinguishment of debt
5

5

10
Net interest expense
15
22
19

56
Technology royalty

(13 ) 13

—
Foreign exchange
9

(5 ) $ (9 ) (5 )
Income/(loss) before income taxes (31 ) 47
229
9
254
Provision for / (benefit from) income taxes
(12 ) 13
44
3
48
Equity earnings / (loss) in affiliates $ 183
68
126

(377 ) —
Net income 183
49
160
185
(371 ) 206
Net income attributable to noncontrolling interests

(23 )
(23 )
Net income attributable to Crown Holdings $ 183
$ 49
$ 160
$ 162
$ (371 ) $ 183

Comprehensive income $ 143
$ 33
$ 113
$ 169
$ (293 ) $ 165
Comprehensive income attributable to noncontrolling interests

(22 )
(22 )
Comprehensive income attributable to Crown Holdings $ 143
$ 33
$ 113
$ 147
$ (293 ) $ 143

~~Crown Holdings, Inc.~~

~~CONDENSED COMBINING STATEMENT OF COMPREHENSIVE INCOME~~

~~For the nine months ended~~ ~~September 30, 2017~~

~~(in millions)~~

Parent Issuer Guarantors Non-
Guarantors Eliminations Total
Company
Net sales

$ 1,462
$ 5,068

6,530
Cost of products sold, excluding depreciation and amortization

1,181
4,013

5,194
Depreciation and amortization

30
153

183
Selling and administrative expense
$ 8
99
165

272
Restructuring and other

2
24

26
Income from operations (8 ) 150
713
855
Loss from early extinguishment of debt
6

1

7
Net interest expense
49
69
59

177
Technology royalty

(33 ) 33

—
Foreign exchange
78
(1 ) 5
$ (78 ) 4
Income/(loss) before income taxes (141 ) 115
615
78
667
Provision for / (benefit from) income taxes
(54 ) 38
167
27
178
Equity earnings / (loss) in affiliates $ 412
167
267

(846 ) —
Net income 412
80
344
448
(795 ) 489
Net income attributable to noncontrolling interests

(77 )
(77 )
Net income attributable to Crown Holdings 412
80
344
371
(795 ) 412

Comprehensive Income $ 687
$ 83
$ 429
$ 787
$ (1,219 ) $ 767
Comprehensive income attributable to noncontrolling interests

(80 )
(80 )
Comprehensive income attributable to Crown Holdings $ 687
$ 83
$ 429
$ 707
$ (1,219 ) $ 687

~~Crown Holdings, Inc.~~

~~CONDENSED COMBINING STATEMENT OF COMPREHENSIVE INCOME~~

~~For the nine months ended~~ ~~September 30, 2016~~

~~(in millions)~~

Parent Issuer Guarantors Non-
Guarantors Eliminations Total
Company
Net sales

$ 1,468
$ 4,893

$ 6,361
Cost of products sold, excluding depreciation and amortization

1,174
3,876

5,050
Depreciation and amortization

25
163

188
Selling and administrative expense
$ 7
102
166

275
Restructuring and other
(5 ) 14
10
19
Income from operations (2 ) 153
678
829
Loss from early extinguishment of debt
32

5
37
Net interest expense
50
65
58

173
Technology royalty

(32 ) 32

—
Foreign exchange
24

(22 ) $ (24 ) (22 )
Income/(loss) before income taxes (108 ) 120
605
24
641
Provision for / (benefit from) income taxes
(41 ) 42
142
8
151
Equity earnings / (loss) in affiliates $ 431
165
268

(864 ) —
Net income 431
98
346
463
(848 ) 490
Net income attributable to noncontrolling interests

(59 )
(59 )
Net income attributable to Crown Holdings $ 431
$ 98
$ 346
$ 404
$ (848 ) $ 431

Comprehensive income $ 310
$ 88
$ 299
$ 378
$ (704 ) $ 371
Comprehensive income attributable to noncontrolling interests

(61 )
(61 )
Comprehensive income attirbutable to Crown Holdings $ 310
$ 88
$ 299
$ 317
$ (704 ) $ 310

~~Crown Holdings, Inc.~~

~~CONDENSED COMBINING BALANCE SHEET~~

~~As of September 30, 2017~~

~~(in millions)~~

Parent Issuer Guarantors
Non-
Guarantors
Eliminations
Total
Company
Assets
Current assets
Cash and cash equivalents
$ 47

$ 327

$ 374
Receivables, net

$ 20
1,078

1,098
Intercompany receivables

35
8
$ (43 ) —
Inventories

345
1,085

1,430
Prepaid expenses and other current assets $ 1
1
17
232

251
Total current assets 1
48
417
2,730
(43 ) 3,153

Intercompany debt receivables
2,818
3,379
1,032
(7,229 ) —
Investments 3,324
2,448
1,265

(7,037 ) —
Goodwill and intangible assets, net

467
3,095

3,562
Property, plant and equipment, net
1
529
2,536

3,066
Other non-current assets
11
545
159

715
Total $ 3,325
$ 5,326
$ 6,602
$ 9,552
$ (14,309 ) $ 10,496

Liabilities and equity
Current liabilities
Short-term debt

$ 50

$ 50
Current maturities of long-term debt
$ 18
$ 3
47

68
Accounts payable and accrued liabilities $ 18
17
626
2,258

2,919
Intercompany payables

8
35
$ (43 ) —
Total current liabilities 18
35
637
2,390
(43 ) 3,037

Long-term debt, excluding current maturities
2,128
413
2,573

5,114
Long-term intercompany debt 2,509
1,702
2,782
236
(7,229 ) —
Postretirement and pension liabilities

391
128

519
Other non-current liabilities

356
358

714
Commitments and contingent liabilities

Noncontrolling interests

314

314
Crown Holdings shareholders’ equity/(deficit) 798
1,461
2,023
3,553
(7,037 ) 798
Total equity/(deficit) 798
1,461
2,023
3,867
(7,037 ) 1,112
Total $ 3,325
$ 5,326
$ 6,602
$ 9,552
$ (14,309 ) $ 10,496

~~Crown Holdings, Inc.~~

~~CONDENSED COMBINING BALANCE SHEET~~

~~As of~~ ~~December 31, 2016~~

~~(in millions)~~

Parent Issuer Guarantors
Non-
Guarantors
Eliminations
Total
Company
Assets
Current assets
Cash and cash equivalents
$ 83

$ 476

$ 559
Receivables, net
3
$ 20
842

865
Intercompany receivables

33
6
$ (39 ) —
Inventories

313
932

1,245
Prepaid expenses and other current assets $ 1
2
13
156

172
Total current assets 1
88
379
2,412
(39 ) 2,841

Intercompany debt receivables
2,703
3,234
690
(6,627 ) —
Investments 2,857
2,319
954

(6,130 ) —
Goodwill and intangible assets, net

469
2,794

3,263
Property, plant and equipment, net
1
496
2,323

2,820
Other non-current assets
3
464
208

675
Total $ 2,858
$ 5,114
$ 5,996
$ 8,427
$ (12,796 ) $ 9,599

Liabilities and equity
Current liabilities
Short-term debt

$ 33

$ 33
Current maturities of long-term debt
$ 118

43

161
Accounts payable and accrued liabilities $ 23
32
$ 577
2,070

2,702
Intercompany payables

6
33
$ (39 ) —
Total current liabilities 23
150
583
2,179
(39 ) 2,896

Long-term debt, excluding current maturities
2,258
392
2,067

4,717
Long-term intercompany debt 2,469
1,328
2,624
206
(6,627 ) —
Postretirement and pension liabilities

422
198

620
Other non-current liabilities

381
317

698
Commitments and contingent liabilities

Noncontrolling interests

302

302
Crown Holdings shareholders’ equity/(deficit) 366
1,378
1,594
3,158
(6,130 ) 366
Total equity/(deficit) 366
1,378
1,594
3,460
(6,130 ) 668
Total $ 2,858
$ 5,114
$ 5,996
$ 8,427
$ (12,796 ) $ 9,599

~~Crown Holdings, Inc.~~

~~CONDENSED COMBINING STATEMENT OF CASH FLOWS~~

~~For the nine months ended September 30, 2017~~

~~(in millions)~~

Parent Issuer Guarantors
Non-
Guarantors
Eliminations
Total
Company
Net provided by/(used for) operating activities $ (4 ) $ (46 ) $ 90
$ 525
$ (77 ) $ 488
Cash flows from investing activities
Capital expenditures

(91 ) (191 )
(282 )
Proceeds from sale of property, plant and equipment

1
7

8
Intercompany investing activities 235

(235 ) —
Other

(20 ) 5

(15 )
Net cash provided by/(used for) investing activities 235
—
(110 ) (179 ) (235 ) (289 )
Cash flows from financing activities
Proceeds from long-term debt
750
9
295

1,054
Payments of long-term debt
(1,010 ) (2 ) (88 )
(1,100 )
Net change in revolving credit facility and short-term debt
25

(3 )
22
Net change in long-term intercompany balances 100
259
13
(372 )
—
Debt issue costs
(14 )
(1 )
(15 )
Common stock issued 8

8
Common stock repurchased (339 )

(339 )
Dividends paid

(312 ) 312
—
Dividends paid to noncontrolling interests

(68 )
(68 )
Foreign exchange derivatives related to debt

38

38
Net cash provided by/(used for) financing activities (231 ) 10
20
(511 ) 312
(400 )
Effect of exchange rate changes on cash and cash equivalents

16

16
Net change in cash and cash equivalents —
(36 ) —
(149 ) —
(185 )
Cash and cash equivalents at January 1
83

476

559
Cash and cash equivalents at September 30 $ —
$ 47
$ —
$ 327
$ —
$ 374

~~Crown Holdings, Inc.~~

~~CONDENSED COMBINING STATEMENT OF CASH FLOWS~~

~~For the nine months ended September 30, 2016~~

~~(in millions)~~

Parent Issuer Guarantors
Non-
Guarantors
Eliminations
Total
Company
Net provided by/(used for) operating activities $ 6
$ (61 ) $ 108
$ 353
$ (30 ) $ 376
Cash flows from investing activities
Capital expenditures

(81 ) (163 )
(244 )
Proceeds from sale of property, plant and equipment

1
5

6
Intercompany investing activities 150

150

(300 ) —
Other

10

10
Net cash provided by/(used for) investing activities 150
—
80
(158 ) (300 ) (228 )
Cash flows from financing activities
Proceeds from long-term debt
700

679

1,379
Payments of long-term debt
(1,100 )
(710 )
(1,810 )
Net change in revolving credit facility and short-term debt
60

48

108
Net change in long-term intercompany balances (156 ) 352
(187 ) (9 )
—
Debt issue costs
(7 )
(9 )
(16 )
Common stock issued 8

8
Common stock repurchased (8 )

(8 )
Dividends paid

(330 ) 330
—
Dividends paid to noncontrolling interests

(43 )
(43 )
Contributions from noncontrolling interests

1

1
Foreign exchange derivatives related to debt

53

53
Net cash provided by/(used for) financing activities (156 ) 5
(187 ) (320 ) 330
(328 )
Effect of exchange rate changes on cash and cash equivalents

(11 )
(11 )
Net change in cash and cash equivalents —
(56 ) 1
(136 ) —
(191 )
Cash and cash equivalents at January 1
104

613

717
Cash and cash equivalents at September 30 $ —
$ 48
$ 1
$ 477
$ —
$ 526

~~Crown Holdings, Inc.~~

PART I - FINANCIAL INFORMATION

Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations

~~(dollars~~ (dollars in millions)

Introduction

The following discussion presents management's analysis of the results of operations for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2021 compared to ~~2016~~2020 and changes in financial condition and liquidity from December 31, ~~2016.~~2020. 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, ~~2016,~~2020, 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 ~~international~~ 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 ~~the~~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 globally and this is expected~~growing. In North America, beverage can growth has accelerated in recent years mainly due to ~~continue~~the outsized portion of new beverage products being introduced in ~~the coming years. While emerging~~cans versus other packaging formats. In addition, markets such as Brazil, Europe, Mexico and Southeast Asia ~~and Mexico~~ have also experienced higher ~~growth rates due to rising per capita incomes~~volumes and ~~accompanying increases~~market expansion, although volumes in ~~beverage consumption, the more mature economies in Europe and North America have also seen market expansion. This is being propelled~~certain of those markets were negatively affected by the ~~growth~~impact of ~~beverages such as energy drinks, teas, juices, sparkling waters and craft beer and an increased preference for cans over certain other forms of beverage packaging. In addition,~~ the ~~Company's acquisition of Empaque~~coronavirus pandemic in ~~2015 significantly increased its strategic position in beverage cans and its presence in the growing Mexican market.~~

~~Global food and aerosol can sales unit volumes have been stable to declining in recent years primarily due to lower consumer spending.~~2020. The Company continues to ~~benefit from~~invest in capacity expansion to meet the ~~2014 acquisition of Mivisa which provided~~accelerating demand.

The Company's primary capital allocation focus has been to reduce leverage, as was successfully accomplished following previous acquisitions, and to begin to return capital to its shareholders. In April 2021, the Company announced an agreement to sell its European Tinplate business (the "Business"). The Business comprises the ~~leading position in Spain, a major~~Company’s European ~~agricultural market.~~

~~While the opportunity for organic volume growth~~Food segment and its European Aerosol and Promotional Packaging reporting unit which is reported in the Company's ~~mature markets~~other segments. The Company will receive pre-tax proceeds of approximately €1.9 billion ($2.2 billion at March 31, 2021) from the transaction and retain a 20% ownership stake in the business. The Company expects to use the net proceeds, after closing working capital adjustments, taxes and other transaction related costs, to further reduce debt, fund capital projects and repurchase shares over time under the $1.5 billion share repurchase program approved by its Board in February 2021.

Beginning with the quarterly period ended June 30, 2021, the results of operations will be reported as discontinued operations in the Consolidated Statement of Operations. In connection with the sale, it is ~~not comparable~~possible that the Company records additional charges that could be material.

In response to ~~that in targeted international growth markets,~~the ongoing coronavirus pandemic, the Company continues to ~~generate strong returns on invested capital and significant cash flow from these businesses.~~take actions to ensure the safety of its employees. The Company ~~monitors capacity across all~~has increased safety measures in its manufacturing facilities to protect the safety of its ~~businesses~~employees and ~~where necessary, may take action such~~the products they produce. In addition, as ~~closing~~many employees as possible are working remotely.

The Company’s products are a ~~plant or reducing headcount to better manage its costs. Any or all of these actions may result in additional restructuring charges in the future, which may be material.~~

~~Aluminum and steel prices can be subject to significant volatility and there has not been a consistent and predictable trend in pricing. As~~vital part of the ~~Company's efforts to manage cost, it attempts to pass-through increases in the cost of aluminum and steel to its customers. The Company's ability to pass-through aluminum premium costs~~support system to its customers ~~varies by market. There can be no assurance~~and consumers. In addition to manufacturing containers that provide protection for food and beverages, the Company ~~will be able to recover from its customers~~also produces closures for baby food, aerosol containers for cleaning and sanitizing products and numerous other products that provide for the ~~impact~~safe and secure transportation of ~~any such increased costs.~~goods in transit.

The Company ~~also continues~~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 ~~evaluate select growth opportunities through capacity additions in existing plants, new plants in markets~~mitigate potential areas of risk and manage inventories.

Crown Holdings, Inc.

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

The Company continues to actively elevate its industry-leading commitment to sustainability, which is a core value of the Company. In 2020, the Company debuted Twentyby30, a robust program that ~~it already knows~~outlines twenty measurable environmental, social and ~~understands, and potential strategic acquisitions in geographic areas and product lines in which it already operates~~governance goals to be completed by 2030 or ~~that complement its existing businesses.~~sooner.

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 ~~add back~~exclude intangibles amortization charges, provisions for asbestos and restructuring and other, and the impact of fair value adjustments ~~related~~ to ~~the sale of~~ inventory acquired in an ~~acquisition and the timing impact of hedge ineffectiveness.~~acquisition.

~~Crown Holdings, Inc.~~

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

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 ~~businesses,~~and Transit Packaging segments and the ~~Brazilian real,~~ Canadian dollar and Mexican peso in the Company's Americas ~~segments and the Chinese renminbi and Thai baht in the Company's Asia Pacific~~Beverage 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 ~~foreign~~ exchange rates.

Net Sales and Segment Income


	Three Months Ended
	March 31,
		2021		2020
Net sales		$	3,078	$	2,757

Three Months Ended Nine Months Ended
September 30 September 30
2017 2016 2017 2016
Net sales $ 2,468
$ 2,326
$ 6,530
$ 6,361
Beverage cans and ends as a percentage of net sales 55 % 56 % 58 % 58 %
Food cans and ends as a percentage of net sales 31 % 30 % 27 % 27 %

Three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2021 compared to ~~2016~~2020

Net sales increased primarily due to ~~the pass-through of~~ higher ~~raw material costs and higher global beverage, food and aerosol can~~ sales unit ~~volumes. Additionally, net sales would have been $38 lower for~~volumes across each of the ~~three months ended September 30, 2017~~Company's businesses and ~~$64 higher for~~$92 from the ~~nine months ended September 30, 2017 using exchange rates in effect during 2016.~~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 ~~are mature markets which~~ have experienced ~~stable volumes~~recent growth due to the introduction of new beverage products in ~~recent years.~~ cans versus other packaging formats. To meet volume requirements in these markets, the Company began commercial production on a new beverage can line at its Toronto, Ontario plant in January 2020 and on the third line at its Nichols, NY facility in June 2020. Additionally, the Company has announced a new beverage can facility in Bowling Green, Kentucky, with the first line expected to begin production in the second quarter of 2021 and a second line scheduled for a late third quarter 2021 start-up. To meet the expanding requirements of specialty cans in the Pacific Northwest, the Company will construct a third line in its Olympia, Washington plant which is scheduled to begin production during the third quarter of 2021. The Company also announced construction of a new facility in Henry County, Virginia which is expected to commence operations during the second quarter of 2022.

In Brazil ~~Mexico~~ and ~~Colombia,~~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 forms of beverage packaging.

~~In December 2016, the~~ The Company ~~began commercial production~~will construct a second line at ~~a new beverage can plant in Monterrey, Mexico~~its Rio Verde, Brazil facility that is ~~capable~~expected to commence operations during the fourth quarter of producing multiple can sizes. Additionally, in the first half of 2017, the Company began commercial shipments from its new beverage can plant in Nichols, New York. In addition to enhancing the Company's presence in specialty beverage can sizes, the plant provides an attractive cost platform, including reduced freight, from which to serve customers in the northeastern region of the U.S. and eastern region of Canada. In June 2017, the Company completed a capacity expansion project in Colombia.2021. The Company has also ~~announced plans to construct~~begun construction of a ~~one-furnace glass bottle~~two-line facility in ~~Chihuahua, Mexico, which is~~Minas Gerais, Brazil, with the first line expected to ~~be operational in~~begin production during the ~~first half~~second quarter of ~~2018.~~2022 and the second line scheduled to start up during the fourth quarter of 2022.

Crown Holdings, Inc.

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

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


	Three Months Ended
	March 31,
		2021		2020
Net sales		$	993	$	871
Segment income		188		134

Three Months Ended Nine Months Ended
September 30 September 30
2017 2016 2017 2016
Net sales $ 763
$ 719
$ 2,166
$ 2,068
Segment income 131
119
345
329

~~Crown Holdings, Inc.~~

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

Three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2021 compared to ~~2016~~2020

Net sales increased primarily due to 9% higher sales unit volumes and the pass-through of higher aluminum costs of $26 and $97 and 2% higher sales unit volume. Net sales would have been $11 lower for the three months ended September 30, 2017 and $13 higher for the nine months ended September 30, 2017 using exchange rates in effect during 2016.costs.

Segment income increased primarily due to higher sales unit volumes and ~~geographic mix, partially offset by start-up costs associated with the Company's new facility in Nichols, New York.~~improved pricing.

~~North America Food~~

The North America Food segment manufactures steel and aluminum food cans and ends and metal vacuum closures and supplies a variety of customers from its operations in the U.S., Canada and Mexico. The North American food can and closures market is a mature market which has experienced stable to slightly declining volumes in recent years.

~~Net sales and segment income in the North America Food segment are as follows:~~

Three Months Ended Nine Months Ended
September 30 September 30
2017 2016 2017 2016
Net sales $ 194
$ 190
$ 514
$ 504
Segment income 23
25
61
57

~~Three months ended September 30, 2017 compared to 2016~~

~~Net sales increased primarily due to the pass-through of higher raw material costs. Segment income decreased primarily due to product mix.~~

~~Nine months ended September 30, 2017 compared to 2016~~

~~Net sales increased primarily due to 3% higher sales unit volumes and the pass-through of higher raw material costs.~~

~~Segment income in 2016 included a negative impact from steel purchased in 2015 being converted and sold at lower prevailing prices in 2016.~~

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 ~~market has~~markets have been growing.

In the ~~fourth~~second quarter of ~~2016, a second line at~~2020, two beverage can lines in the ~~Osmaniye, Turkey~~Seville, Spain plant began commercial production ~~in response to growing demand for multiple can sizes. In addition, the Company completed the conversion~~ of ~~its plant in Custines, France, from steel to~~ aluminum with the start-up of the second high-speed line in April 2017. The Company has also announced plans to construct a new plant in the Valencia region of Spain which will facilitate the conversion from steel to aluminum beverage cans. ~~Production is expected to commence during the fourth quarter of 2018.~~

~~Crown Holdings, Inc.~~

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

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


	Three Months Ended				Nine Months Ended					Three Months Ended
	September 30				September 30					March 31,
	2017		2016		2017		2016				2021		2020
Net sales	$	428	$	413	$	1,133	$	1,129	Net sales		$	389	$	346
Segment income	78		83		201		204		Segment income		62		39

Three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2021 compared to ~~2016~~2020

Net sales increased ~~primarily~~ due to $21 from the impact of foreign currency translation, 6% higher sales unit volumes and the pass-through of higher ~~raw material costs and 2%~~aluminum costs.

Segment income increased primarily due to higher sales unit volumes ~~with higher volumes in Europe partially offset by lower volumes in the Middle East. Net sales would have been $7 lower for the three months ended September 30, 2017~~ and ~~$19 higher for the nine months ended September 30, 2017 using exchange rates in effect during 2016.~~improved cost performance.

~~Segment income decreased primarily due to lower sales in the Middle East being partially offset by higher sales unit volumes in Europe.~~

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 ~~which has experienced stable~~where consumer preference continues to ~~slightly declining volumes in recent years. In 2016,~~favor the ~~Company announced the closure of two European Food facilities in an effort~~can due to ~~reduce cost by eliminating excess capacity~~product protection and ~~consolidating manufacturing processes.~~food preservation.

Net sales and segment income in the European Food segment ~~are~~were as follows:


	Three Months Ended				Nine Months Ended					Three Months Ended
	September 30				September 30					March 31,
	2017		2016		2017		2016				2021		2020
Net sales	$	639	$	599	$	1,477	$	1,459	Net sales		$	460	$	402
Segment income	96		96		210		212		Segment income		63		33

Three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2021 compared to ~~2016~~2020

Net sales increased primarily due to the pass-through of higher tinplate costs. Net sales would have been $18 lower for the three months ended September 30, 2017 and $15 higher for the nine months ended September 30, 2017 using exchange rates in effect during 2016.

For the three months ended September 30, 2017, segment income was comparable, mainly due to the benefit of prior year restructuring actions and improved cost performance offsetting the negative impact of product mix.

~~For the nine months ended September 30, 2017, segment income decreased primarily due to~~$36 from the impact of ~~product mix, partially offset by improved cost performance~~foreign currency translation and ~~the benefit of prior year restructuring actions.~~6% higher sales unit volumes.

Crown Holdings, Inc.

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

Segment income increased as the three months ended March 31, 2020 included charges of $18 from the carryover of higher tinplate costs from the prior year that did not recur in 2021. Additionally, segment income increased due to higher sales unit volumes and $5 from the impact of foreign currency translation.

Asia Pacific

The Company's Asia Pacific segment ~~primarily~~ consists of beverage can operations in Cambodia, China, Indonesia, Malaysia, Myanmar, Singapore, Thailand and Vietnam and ~~also includes the Company's~~ non-beverage can operations, primarily food cans and specialty ~~packaging in China, Singapore, Thailand and Vietnam.~~packaging. In recent years, the beverage can market in Southeast Asia has been growing. In 2020, however, industry volumes decreased due to the impact of the coronavirus pandemic. The ~~Company's third~~Company began commercial production at a one-line beverage can plant in ~~Cambodia began commercial production~~Nong Khae, Thailand in ~~the second quarter of 2016.~~July 2020. Additionally, the Company ~~commenced commercial production at~~has begun construction of a ~~new beverage can facility in Jakarta, Indonesia, and a second line at the~~one-line beverage can plant in ~~Danang,~~Vung Tao, Vietnam, that is expected to begin commercial production in June and October 2017. A new beverage can plant in Yangon, Myanmar is scheduled for start-up in the first half of 2018. The Company also announced the closure of its Shanghai and Beijing beverage can facilities in 2016 and 2017 in an effort to reduce cost by consolidating manufacturing processes in China.September 2021.

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


	Three Months Ended				Nine Months Ended					Three Months Ended
	September 30				September 30					March 31,
	2017		2016		2017		2016				2021		2020
Net sales	$	300	$	281	$	865	$	839	Net sales		$	331	$	301
Segment income	40		37		124		111		Segment income		52		45

Three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2021 compared to ~~2016~~2020

Net sales increased ~~primarily~~ due to ~~12% and~~ 8% higher sales unit ~~volume in SoutheastAsia, partially offset by a sales unit volume decrease related to~~volumes and $6 from the ~~closure~~impact of ~~the Shanghai and Beijing beverage can facilities. Net sales would have been $6 higher for the nine months ended September 30, 2017 using exchange rates in effect during 2016.~~foreign currency translation.

Segment income increased primarily due to higher sales unit volumes.

Transit Packaging

The Transit Packaging segment includes the Company's global consumables and equipment and tools businesses. Consumables include steel strap, plastic strap and industrial film and other related products that are used in a wide range of industries, and transit protection products that help prevent movement during transport for a wide range of industrial and consumer products. Equipment and tools includes manual, semi-automatic and automatic equipment and tools used in end-of-line operations to apply industrial solutions consumables.

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


	Three Months Ended
	March 31,
		2021		2020
Net sales		$	557	$	522
Segment income		70		66

Three months ended March 31, 2021 compared to 2020

Net sales increased primarily due to $17 from the impact of foreign currency translation, higher sales unit volumes and ~~improved cost performance related to~~ the ~~closure~~pass-through of ~~the Shanghai and Beijing beverage can facilities, partially offset by~~ higher raw material ~~costs.~~prices.

Segment income increased primarily due to higher sales unit volumes.

~~Non-reportable~~

Crown Holdings, Inc.

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

Other Segments

The Company's ~~non-reportable~~other segments include its ~~European~~food can and closures businesses in North America, its aerosol can businesses in North America and ~~specialty packaging business, its North American aerosol can business~~Europe, and its tooling and equipment operations in the U.S. and U.K. ~~In recent years, the Company's aerosol can and specialty packaging businesses have experienced slightly declining volumes.~~

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


	Three Months Ended				Nine Months Ended					Three Months Ended
	September 30				September 30					March 31,
	2017		2016		2017		2016				2021		2020
Net sales	$	144	$	124	$	375	$	362	Net sales		$	348	$	315
Segment income	20		19		52		52		Segment income		37		19

Three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2021 compared to ~~2016~~2020

Net sales increased primarily due to higher sales in the Company's beverage can equipment operations, the pass-through of higher ~~raw material~~tinplate costs ~~in the Company's global aerosol businesses.~~

~~Segment income was comparable in each period.~~

~~Crown Holdings, Inc.~~

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

~~Corporate and Unallocated Expense~~

Three Months Ended Nine Months Ended
September 30 September 30
2017 2016 2017 2016
Corporate and unallocated expense $ (29 ) $ (44 ) $ (112 ) $ (117 )

~~For the three months ended September 30, 2017, corporate and unallocated decreased primarily due to lower pension expense, technology and other general corporate costs.~~

For the nine months ended September 30, 2017, corporate and unallocated expenses decreased primarily due to the timing impact of hedge ineffectiveness, which was a charge of $2 for the nine months ended September 30, 2017 compared to a benefit of $6 for the nine months ended September 30, 2016.

~~Cost of Products Sold (Excluding Depreciation and Amortization)~~

~~For the three and nine months ended September 30, 2017 compared to 2016, cost of products sold (excluding depreciation and amortization) increased~~$8 from $1,838 to $1,956 and from $5,050 to $5,194 primarily due to the impact of higher raw material costs. Cost of products sold would have been $30 lower for the three months ended September 30, 2017 and $49 higher for the nine months ended September 30, 2017 using exchange rates in effect for 2016.

~~Depreciation and Amortization~~

~~For the nine months ended September 30, 2017 compared to 2016, depreciation and amortization expense decreased from from $188 to $183 primarily due to~~ the impact of foreign currency translation.

Segment income increased due to higher sales in the Company's beverage can equipment operations and lower tinplate carryover costs as compared to the three months ended March 31, 2020.

~~Selling~~

Corporate and ~~Administrative~~Unallocated Expense

~~For~~


	Three Months Ended
	March 31,
		2021		2020
Corporate and unallocated expense		$	(39)	$	(38)

Corporate and unallocated expenses were comparable for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 compared to ~~2016, selling and administrative expense decreased from $275 to $272 primarily due to the impact of foreign currency translation partially offset by higher corporate costs.~~2020.

Interest Expense

For the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2021 compared to ~~2016,~~2020, interest expense ~~increased~~decreased from ~~$59~~$80 to ~~$64 and from $181 to $187 primarily~~$71 due to ~~increased average borrowing rates.~~lower interest rates and outstanding debt balances.

~~Crown Holdings, Inc.~~

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

~~Taxes on Income~~

~~The Company's effective income tax rate was as follows:~~

Three Months Ended Nine Months Ended
September 30 September 30
2017 2016 2017 2016
Income before income taxes $ 287
$ 254
$ 667
$ 641
Provision for income taxes 79
48
178
151
Effective income tax rate 28 % 19 % 27 % 24 %

The low effective income tax rate in 2016 was primarily due to a benefit recognized in the third quarter of 2016 to release the valuation allowance against the Company's net deferred tax assets in Canada as further discussed in ~~Note N~~ ~~to the consolidated financial statements.~~

Net Income Attributable to Noncontrolling Interests

For the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2021 compared to ~~2016,~~2020, net income attributable to noncontrolling interests increased from ~~$23~~$26 to ~~$31 and from $59 to $77 primarily~~$34 due to higher earnings in the Company's beverage can operations in Brazil.

Liquidity and Capital Resources

Cash from Operations

Cash ~~provided by~~used for operating activities ~~increased~~decreased from ~~$376~~$607 for the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2020 to ~~$488~~$385 for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021. The decrease in cash used for operating activities was primarily due to higher ~~income from operations~~earnings and ~~lower pension contributions.~~changes in working capital.

Days sales outstanding for trade receivables, ~~increased from 41~~excluding the impact of unbilled receivables, was 36 days ~~at September 30, 2016~~as of March 31, 2020 compared to 4237 days ~~at September 30, 2017.~~as of March 31, 2021.

Inventory turnover was 6665 days at ~~September 30, 2016~~March 31, 2020 compared to 6863 days at ~~September 30, 2017.~~March 31, 2021. Inventory turnover at ~~September 30, 2017 increased compared~~March 31, 2021 was comparable to 6664 days at December 31, ~~2016 due to seasonality in the Company's food~~2020.

Crown Holdings, Inc.

Item 2. Management's Discussion and ~~beverage can businesses.~~ Analysis (Continued)

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~~ 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 9485 days at ~~September 30, 2016~~March 31, 2020 compared to ~~108~~88 days at ~~September 30, 2017 primarily due to higher raw material costs.~~

March 31, 2021.

Investing Activities

Cash used for investing activities increased from ~~$228~~$96 for the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2020 to ~~$289 in 2017~~$120 for the three months ended March 31, 2021 primarily due to ~~an increase~~increased capital expenditures related to capacity expansion projects in ~~capital expenditures.~~ the Americas Beverage segment.

The Company currently expects capital expenditures ~~for 2017~~in 2021 to be approximately ~~$450.~~$900.

~~Crown Holdings, Inc.~~

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

Financing Activities

~~Cash used for financing~~Financing activities ~~increased from $328~~provided cash of $882 for the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2020 and used cash of $55 for the three months ended March 31, 2021. The Company had higher net borrowings and repurchased $57 of capital stock in 2020. During the three months ended March 31, 2021, the Company paid dividends to ~~$400 in 2017 primarily due to repurchases~~stockholders of $27.

Liquidity

As of March 31, 2021, $525 of the Company's common stock and higher dividends paid to noncontrolling interest partially offset by lower debt payments. In 2016, financing activities primarily included borrowings under the Company’s term loan and revolving credit facilities which were used together with cash on hand to redeem the Company's $700 6.25% senior notes due 2021.

~~Liquidity~~

As$588 of ~~September 30, 2017, $311 of the Company's $374 of cash~~cash and cash equivalents was located outside the U.S. The Company ~~is not currently aware of any legal restrictions under foreign law that materially impact its access to cash held outside the U.S.~~

~~The Company~~ funds its cash needs in the U.S. through ~~a combination of~~ cash flows from operations 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. The Company records current and/or deferred U.S. taxes for the earnings of certain foreign subsidiaries. For certain other foreign subsidiaries, the Company considers earnings indefinitely reinvested and has not recorded any U.S. taxes. Of the cash and cash equivalents located outside the U.S., ~~$242~~$447 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 ~~U.S.~~ taxes on the repatriated funds.

As of ~~September 30, 2017,~~March 31, 2021, the Company had ~~$1,310~~$1,561 of borrowing capacity available under its revolving credit facility, equal to the total facility of ~~$1,400~~$1,650 less borrowings of ~~$49~~$26 and ~~$41 of~~ outstanding standby letters of ~~credit.~~credit of $63. The Company could have borrowed this amount at ~~September 30, 2017~~March 31, 2021 and still have been in compliance with its leverage ratio covenants. The Company's net total leverage ratio, as defined by the credit agreement, of 3.71 to 1.0 at March 31, 2021 was in compliance with the covenant requiring a ratio of no greater than 5.0 to 1.0. The required net total leverage ratio under the agreement reduces to 4.5 to 1.0 at December 31, 2022.

Capital Resources

As of ~~September 30, 2017,~~March 31, 2021, the Company had approximately ~~$113~~$215 of capital commitments primarily related to its Americas Beverage segment. The Company expects to fund these commitments primarily through cash flows ~~generated~~ from operations and ~~to fund any excess needs through external borrowings.~~proceeds from the sale of its European Tinplate business.

Contractual Obligations

During the ~~first nine~~three months ~~of 2017,~~ended March 31, 2021 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, ~~2016,~~2020, which information is incorporated herein by ~~reference,~~reference.

Crown Holdings, Inc.

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

Supplemental Guarantor Financial Information

As disclosed in Note L, the Company and certain of its 100% directly or indirectly owned subsidiaries provide guarantees of senior notes and debentures issued by other 100% directly or indirectly owned subsidiaries. These senior notes and debentures are fully and unconditionally guaranteed by the Company and substantially all of its subsidiaries in the United States, except ~~for~~in the ~~April 2017~~case of the Company’s outstanding senior notes issued by Crown Cork & Seal Company, Inc., which are fully and unconditionally guaranteed by Crown Holdings, Inc. (Parent). No other subsidiary guarantees the debt ~~issuances~~ and ~~repayments described in~~ ~~Note I~~the guarantees are made on a joint and several basis.

The following tables present summarized financial information related to the ~~consolidated financial statements included~~senior notes issued by the Company’s subsidiary debt issuers and guarantors on a combined basis for each issuer and its guarantors (together, an “obligor group”) after elimination of (i) intercompany transactions and balances among the Parent and the guarantors and (ii) equity in ~~this Quarterly Report on Form 10-Q.~~earnings from and investments in any subsidiary that is a non-guarantor. Crown Cork Obligor group consists of Crown Cork & Seal Company, Inc. and the Parent. Crown Americas Obligor group consists of Crown Americas LLC, Crown Americas Capital Corp. IV, Crown Americas Capital Corp. V, Crown Americas Capital Corp. VI, the Parent, and substantially all of the Company’s subsidiaries in the United States.

Crown Cork Obligor Group


	Three Months Ended
	March 31, 2021
Net sales		$	—
Gross Profit		—
Income from operations		(3)
Net income1		(18)
Net income attributable to Crown Holdings1		(18)

(1) Includes $9 of expense related to intercompany interest with non-guarantor subsidiaries


	March 31, 2021		December 31, 2020
Current assets	$	14	$	12
Non-current assets	104		118
Current liabilities	53		63
Non-current liabilities1	4,345		4,305

(1) Includes payables of $3,663 and $3,623 due to non-guarantor subsidiaries as of March 31, 2021 and December 31, 2020

Crown Americas Obligor Group


	Three Months Ended
	March 31, 2021
Net sales1		$	1,017
Gross profit2		172
Income from operations2		64
Net income3		8
Net income attributable to Crown Holdings3		8

(1) Includes $110 of sales to non-guarantor subsidiaries

(2) Includes $11 of gross profit related to sales to non-guarantor subsidiaries

(3) Includes $17 of income related to intercompany interest and technology royalties with non-guarantor subsidiaries

Crown Holdings, Inc.

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


	March 31, 2021		December 31, 2020
Current assets1	$	921	$	917
Non-current assets2	3,307		3,248
Current liabilities3	1,028		1,081
Non-current liabilities4	4,561		4,491

(1) Includes receivables of $42 and $45 due from non-guarantor subsidiaries as of March 31, 2021 and December 31, 2020

(2) Includes receivables of $157 and $142 due from non-guarantor subsidiaries as of March 31, 2021 and December 31, 2020

(3) Includes payables of $46 and $54 due to non-guarantor subsidiaries as of March 31, 2021 and December 31, 2020

(4) Includes payables of $130 and $31 due to non-guarantor subsidiaries as of March 31, 2021 and December 31, 2020

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 KJ, 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.

~~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 ~~United States~~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, ~~2016~~2020 describe the significant accounting estimates and policies used in the preparation of the consolidated financial statements. ~~There have been no significant changes in~~Updates to the Company's ~~critical~~ accounting policies ~~during~~related to new accounting pronouncements are included in Note B to the ~~first nine months of 2017. The discussion below supplements the discussion from the Company's Annual~~consolidated financial statements included in this Quarterly Report on Form ~~10-K for the year ended December 31, 2016 with respect to goodwill.~~10-Q.

~~Goodwill Impairment~~

As of October 1, 2016, the estimated fair values of the European Aerosols and Specialty Packaging and the North America Food reporting units were 25% and 26% higher than their carrying values. These reporting units operate in low-growth environments with multiple competitors, which could result in lower selling prices. In addition, shifts in consumer demand could result in lower volumes. While the Company believes current Adjusted EBITDA projections are reasonable, the reporting units' ability to maintain or grow Adjusted EBITDA could be negatively impacted by the above factors. If Adjusted EBITDA of the European Aerosols and Specialty Packaging and the North America Food reporting units decreased by 15% and 13%, the fair value of these reporting units would approximate carrying value. To the extent future operating results were to decline, causing the estimated fair values to fall below carrying values, it is possible that an impairment charge of up to $95 for the European Aerosols and Specialty Packaging reporting unit and $118 for the North America Food reporting unit could 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,” including, but not limited~~Operations” (such as statements regarding the Company's expectation and ability to pay quarterly dividends in the future or statements regarding the Company's initiation of a share repurchase program) and in the discussions of asbestos in Note JI and commitments and contingencies in Note KJ to the consolidated financial statements included in this Quarterly Report on Form 10-Q, and also in Part I, Item 1:1, “Business” and Item 3:3, “Legal Proceedings” and in Part II, Item 7:7, “Management's Discussion and Analysis of Financial Condition and Results of Operations,” within the Company's Annual Report on Form 10-K for the ~~fiscal~~ year ended December 31, ~~2016,~~2020, which are not historical facts (including any statements concerning the direct or indirect impact of coronavirus, plans, the sale of the Company's European tinplate business (including whether the sale will ultimately be consummated within the expected timeframe or at all and whether the sale will ultimately prove to be beneficial to the Company) 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.

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, ~~2016~~2020 within Part II, Item 7: “Management's Discussion and Analysis of Financial Condition and Results of Operations” under the caption “Forward Looking Statements” and is incorporated herein by reference. Some of the factors are also discussed elsewhere in this Form 10-Q (including under Item 1A of Part II below) and in prior Company filings with the SEC. In addition, other factors have been or may be discussed from time to time in the Company's SEC filings.


~~Item 3.~~	~~Quantitative and Qualitative Disclosures About Market Risk~~

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 ~~September 30, 2017,~~March 31, 2021, see Note GK to the consolidated financial statements included in this Quarterly Report on Form 10-Q.

As of ~~September 30, 2017,~~March 31, 2021, the ~~Company~~Company had ~~$1.2 billion~~$1.5 billion principal floating interest rate debt. A change of 0.25% in these floating interest rates would change annual interest expense by ~~approximately $3 million~~approximately $4 million before tax.


~~Item 4.~~	~~Controls and Procedures~~

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 ~~Securities and Exchange Commission,~~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.

~~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 JI entitled “Asbestos-Related Liabilities” and Note KJ 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.

Crown Holdings, Inc.

Item 1A. Risk Factors

The information set forth in this report should be read in conjunction with the risk factors discussed in Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, ~~2016 and in Item 1A of the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2017. The~~2020. Such risks ~~described in the Company's Quarterly Report on Form 10-Q~~ 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 ~~may~~ materially adversely affect the Company's business, financial condition and/or operating results.

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

The following table provides information about the Company's ~~purchase~~purchases of equity securities during the three months ended ~~September 30, 2017.~~March 31, 2021. The table excludes 117,296 shares surrendered to cover taxes on the vesting of restricted stock during the three months ended March 31, 2021.

Total Number
of Shares
Purchased
Average Price Per Share
Total Number of Shares Purchased as Part of Publicly Announced Programs⁽¹⁾
Approximate Dollar Value of Shares
that May Yet Be Purchased
under the Programs
As of the end of the period
(millions of dollars)

July 128,724 $59.66 128,724 $712
August 297,059 $57.30 297,059 $695
September 433,330 $59.91 433,330 $669
Total 859,113 $58.97 859,113 $669


~~(1)~~	~~The~~Total number of shares ~~were repurchased pursuant to~~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 ~~December 2016 authorization~~programs as of ~~the Company's Board of Directors which authorized the repurchase of an aggregate amount of $1 billion of the Company's common stock through~~ the end of ~~2019. Share repurchases under~~ the ~~Company's programs may be made in the open market or through privately negotiated transactions, and at times and in such amounts as management deems appropriate. The timing and actual number~~period (millions of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements and other market conditions. As of September 30, 2017, $669 million of the Company’s outstanding common stock may be repurchased under the program.dollars)
February	—	—	—	$	1,500
March	—	—	—	1,500
	—		—

In February 2021, the Company's Board of Directors authorized the repurchase of an aggregate amount of $1.5 billion of Company common stock through the end of 2023. Share repurchases under the Company's program may be made in the open market or through privately negotiated transactions, and at times and in such amounts as management deems appropriate.

Item 3. Defaults Upon Senior Securities

There were no events required to be reported under Item 3 for the ~~nine~~three months ended ~~September 30, 2017.~~March 31, 2021.

Item 4. Mine Safety Disclosures

Not applicable.

~~Crown Holdings, Inc.~~

Item 5. Other Information

~~None.~~Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

On April 21, 2021, the Company entered into Amendment No. 1 to the Senior Executive Retirement Agreement with Didier Sourisseau, dated April 1, 2017 (the “SERP Amendment”). The SERP Amendment provides that Mr. Sourisseau’s retirement benefit under the Company’s Senior Executive Retirement Plan will become fully vested upon the completion of the sale of the Company’s European tinplate business (the “Transaction”), provided that Mr. Sourisseau remains in continuous employment with the Company through the completion of the Transaction. The SERP Amendment is attached as an exhibit to this Form 10-Q and is incorporated herein by reference.

Submission of Matters to a Vote of Security Holders

(a) Crown Holdings, Inc. (the “Company”) held its Annual Meeting of Shareholders on April 22, 2021 (the “Annual Meeting”). As of March 2, 2021, the record date for the meeting, 134,912,097 shares of Common Stock, par value $5.00 per share, of the Company (“Common Stock”) were issued and outstanding. A quorum of 116,307,905 shares of Common Stock were present or represented at the meeting.

Crown Holdings, Inc.

(b) The following individuals were nominated and elected to serve as directors:

John W. Conway, Timothy J. Donahue, Richared H. Fearon, Andrea J. Funk, Stephen J. Hagge, Rose Lee, James H. Miller, Josef M. Müller, B. Craig Owens, Caesar F. Sweitzer, Jim L. Turner, William S. Urkiel and Dwayne A. Wilson.

At the Annual Meeting, the Company’s shareholders voted on the three matters below as follows:

1)The Company's shareholders elected the following directors pursuant to the following vote:


Directors	Votes For	Votes Withheld	Broker Non-Vote

John W. Conway	109,708,730	2,045,739	4,553,436

Timothy J. Donahue	110,698,696	1,055,773	4,553,436

Richard H. Fearon	110,582,131	1,172,338	4,553,436

Andrea J. Funk	110,805,454	949,015	4,553,436

Stephen J. Hagge	110,663,553	1,090,916	4,553,436

Rose Lee	110,623,770	1,130,699	4,553,436

James H. Miller	105,149,913	6,604,556	4,553,436

Josef M. Müller	110,284,493	1,469,976	4,553,436

B. Craig Owens	111,066,059	688,410	4,553,436

Caesar F. Sweitzer	110,346,109	1,408,360	4,553,436

Jim L. Turner	106,250,758	5,503,711	4,553,436

William S. Urkiel	107,682,585	4,071,884	4,553,436

Dwayne A. Wilson	111,361,209	393,260	4,553,436

2)The Company's shareholders ratified the appointment of PricewaterhouseCoopers LLP as the Company's independent auditor for the fiscal year ending December 31, 2021 pursuant to the following vote:


Votes For	Votes Against	Votes Abstaining	Broker Non-Vote
108,816,878	7,355,330	135,697	—

Crown Holdings, Inc.

3)The Company's shareholders approved by non-binding advisory vote, the resolution on executive compensation (as further described in the Company's 2021 Proxy Statement) pursuant to the following vote:


Votes For	Votes Against	Votes Abstaining	Broker Non-Vote
103,795,888	7,776,515	182,066	4,553,436

Item 6.Exhibits


10.w			Share and Asset Purchase Agreement, dated as of April 8, 2021, by and among the Company, Crown Cork & Seal Deutschland Holdings GmbH, Blitz F21-387 GmbH, Kouti B.V. and Macsco 20.10 Limited (incorporated by reference to Exhibit 2.1 of the Registrant's Current Report on Form 8-K dated April 13, 2021 (File No. 000-50189)).

10(d) (11)			Amendment No. 1 to Senior Executive Retirement Agreement, effective as of April 21, 2021, by and between Crown Holdings, Inc. and Didier Sourisseau.
~~31.1~~
22			List of Guarantor Subsidiaries

31.1			Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2			Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32			Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, executed by Timothy J. Donahue, President and Chief Executive Officer of Crown Holdings, Inc. and Thomas A. Kelly, Senior Vice President and Chief Financial Officer of Crown Holdings, Inc.

101			The following financial information from the Registrant's Quarterly Report on Form 10-Q for the quarter ended ~~September 30, 2017~~March 31, 2021 formatted in inline XBRL (eXtensible Business Reporting Language): (i) Consolidated Statements of Operations for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2021 and ~~2016,~~2020, (ii) Consolidated Statements of Comprehensive Income for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2021 and ~~2016,~~2020, (iii) Consolidated Balance Sheets as of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016,~~2020, (iv) Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016,~~2020, (v) Consolidated Statements of Changes in Equity for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016~~2020 and (vi) Notes to Consolidated Financial Statements.

104			Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).

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 23, 2021

~~Date:~~ ~~October 27, 2017~~



	September 30, 2017		December 31, 2016
Assets
Current assets
Cash and cash equivalents	$	374	$	559
Receivables, net	1,098		865
Inventories	1,430		1,245
Prepaid expenses and other current assets	251		172
Total current assets	3,153		2,841

Goodwill and intangible assets, net	3,562		3,263
Property, plant and equipment, net	3,066		2,820
Other non-current assets	715		675
Total	$	10,496	$	9,599

Liabilities and equity
Current liabilities
Short-term debt	$	50	$	33
Current maturities of long-term debt	68		161
Accounts payable and accrued liabilities	2,919		2,702
Total current liabilities	3,037		2,896

Long-term debt, excluding current maturities	5,114		4,717
Postretirement and pension liabilities	519		620
Other non-current liabilities	714		698
Commitments and contingent liabilities (Note K)
Noncontrolling interests	314		302
Crown Holdings shareholders’ equity	798		366
Total equity	1,112		668
Total	$	10,496	$	9,599



	Three Months Ended						Nine Months Ended
Details about accumulated other	September 30						September 30						Affected line item in the
comprehensive income components	2017			2016			2017			2016			statement of operations
(Gains) losses on cash flow hedges
Commodities	$	(7	)	$	—		$	(22	)	$	10		Cost of products sold
	(7		)	—			(22		)	10			Income before taxes
	1			—			6			(3		)	Provision for income taxes
	$	(6	)	$	—		$	(16	)	$	7		Net income

Foreign exchange	$	3		$	3		$	6		$	7		Net sales
	(2		)	(4		)	(5		)	(9		)	Cost of products sold
	1			(1		)	1			(2		)	Income before taxes
	—			—			—			—			Provision for income taxes
	$	1		$	(1	)	$	1		$	(2	)	Net income

Total (gains) losses on cash flow hedges	$	(5	)	$	(1	)	$	(15	)	$	5

Amortization of defined benefit plan items
Actuarial losses	$	21		$	34		$	70		$	90		(a)
Prior service credit	(14		)	(14		)	(40		)	(40		)	(a)
	7			20			30			50			Income before taxes
	(4		)	(5		)	(10		)	(12		)	Provision for income taxes
	$	3		$	15		$	20		$	38		Net income

Total reclassifications for the period	$	(2	)	$	14		$	5		$	43



	September 30, 2017			December 31, 2016
Accounts receivable	$	963		$	769
Less: allowance for doubtful accounts	(80		)	(76		)
Net trade receivables	883			693
Miscellaneous receivables	215			172
Receivables, net	$	1,098		$	865



	Amount of gain/(loss)					Amount of gain/(loss)
	recognized in AOCI					reclassified from AOCI
	(effective portion)					into earnings
	Three Months Ended			Nine Months Ended		Three Months Ended			Nine Months Ended
Derivatives in cash flow hedges	September 30, 2017			September 30, 2017		September 30, 2017			September 30, 2017

Foreign exchange	$	(2	)	$	1	$	(1	)	$	(1	)
Commodities	11			26		6			16
Total	$	9		$	27	$	5		$	15


	Amount of gain/(loss)					Amount of gain/(loss)
	recognized in AOCI					reclassified from AOCI
	(effective portion)					into earnings
	Three Months Ended			Nine Months Ended		Three Months Ended			Nine Months Ended
Derivatives in cash flow hedges	September 30, 2016			September 30, 2016		September 30, 2016			September 30, 2016

Foreign exchange	$	—		$	3	$	1		$	2
Commodities	4			16		—			(7		)
Total	$	4		$	19	$	1		$	(5	)



	Balance Sheet classification	Fair Value hierarchy	September 30, 2017		December 31, 2016
Derivative assets
Derivatives designated as hedges:

Foreign exchange	Other current assets	2	$	12	$	24
Commodities	Other current assets	2	16		13
Commodities	Other non-current assets	2	3		3
Derivatives not designated as hedges:
Commodities	Other current assets	2	15		5
Commodities	Other non-current assets	2	1		—
	Total		$	47	$	45

Derivative liabilities
Derivatives designated as hedges:
Foreign exchange	Accounts payable and accrued liabilities	2	$	12	$	28
Commodities	Accounts payable and accrued liabilities	2	1		3
Foreign exchange	Other non-current liabilities	2	—		1
Derivatives not designated as hedges:
Foreign exchange	Accounts payable and accrued liabilities	2	10		5
Commodities	Accounts payable and accrued liabilities	2	8		—
Commodities	Other non-current liabilities	2	1		—
	Total		$	32	$	37



	September 30, 2017		December 31, 2016
Derivatives in cash flow hedges:
Foreign exchange	$	479	$	644
Commodities	228		180
Derivatives in fair value hedges:
Foreign exchange	47		73
Derivatives not designated as hedges:
Foreign exchange	855		618
Commodities	52		72



	Parent		Issuer			Non- Guarantors			Eliminations			Total Company
Net sales						$	2,468					$	2,468
Cost of products sold, excluding depreciation and amortization						1,956						1,956
Depreciation and amortization						63						63
Selling and administrative expense			$	1		89						90
Restructuring and other						12						12
Income from operations			(1		)	348						347
Net interest expense			23			37						60
Income/(loss) before income taxes			(24		)	311						287
Provision for / (benefit from) income taxes			(15		)	94						79
Equity earnings / (loss) in affiliates	$	177	155						$	(332	)	—
Net income	177		146			217			(332		)	208
Net income attributable to noncontrolling interests						(31		)				(31		)
Net income attributable to Crown Holdings	$	177	$	146		$	186		$	(332	)	$	177

Comprehensive income	$	220	$	184		$	261		$	(413	)	$	252
Comprehensive income attributable to noncontrolling interests						(32		)				(32		)
Comprehensive income attributable to Crown Holdings	$	220	$	184		$	229		$	(413	)	$	220



	Parent		Issuer			Guarantors			Non- Guarantors			Eliminations			Total Company
Net sales						$	512		$	1,956					$	2,468
Cost of products sold, excluding depreciation and amortization						407			1,549						1,956
Depreciation and amortization						10			53						63
Selling and administrative expense			$	3		31			56						90
Restructuring and other									12						12
Income from operations			(3		)	64			286						347
Net interest expense			16			25			19						60
Technology royalty						(15		)	15						—
Foreign exchange			23									$	(23	)	—
Income/(loss) before income taxes			(42		)	54			252			23			287
Provision for / (benefit from) income taxes			(16		)	18			69			8			79
Equity earnings / (loss) in affiliates	$	177	67			110						(354		)	—
Net income	177		41			146			183			(339		)	208
Net income attributable to noncontrolling interests									(31		)				(31		)
Net income attributable to Crown Holdings	$	177	$	41		$	146		$	152		$	(339	)	$	177

Comprehensive income	$	220	$	37		$	184		$	245		$	(434	)	$	252
Comprehensive income attributable to noncontrolling interests									(32		)				(32		)
Comprehensive income attributable to Crown Holdings	$	220	$	37		$	184		$	213		$	(434	)	$	220



	Total Number of Shares Purchased	Average Price Per Share	Total Number of Shares Purchased as Part of Publicly Announced Programs⁽¹⁾	Approximate Dollar Value of Shares that May Yet Be Purchased under the Programs As of the end of the period (millions of dollars)

July	128,724	$59.66	128,724	$712
August	297,059	$57.30	297,059	$695
September	433,330	$59.91	433,330	$669
Total	859,113	$58.97	859,113	$669

Beginning claims

~~55,500~~56,000

New claims

Settlements or dismissals

~~(2,000~~(100)

Ending claims

~~55,500~~56,400