³Ô¹Ï51±¬ÁÏÍø

Consolidated Statements of Operations (Unaudited)

(in millions, except share and per share data)

Three Months Ended March 31,

2019

2018

Net sales

$2,755

$2,197

Cost of products sold

2,210

1,808

Depreciation and amortization

122

65

Selling and administrative expense

157

90

Restructuring and other

4

13

Income from operations ⁽¹⁾

262

221

Pension settlements and curtailments

(14)

Other pension and postretirement

(4)

(17)

Foreign exchange

1

18

Earnings before interest and taxes

279

220

Interest expense

98

74

Interest income

(3)

(6)

Loss from early extinguishment of debt

6

Income before income taxes

178

152

Provision for income taxes

48

39

Equity earnings

1

Net income

131

113

Net income attributable to noncontrolling interests

(28)

(23)

Net income attributable to ³Ô¹Ï51±¬ÁÏÍø Holdings

$103

$90

Earnings per share attributable to ³Ô¹Ï51±¬ÁÏÍø Holdings

common shareholders:

Basic

$0.77

$0.67

Diluted

$0.77

$0.67

Weighted average common shares outstanding:

Basic

133,789,042

133,479,364

Diluted

134,437,309

133,806,636

Actual common shares outstanding at quarter end

135,352,754

134,299,633

⁽¹⁾ Reconciliation from income from operations to segment income follows.

Consolidated Supplemental Financial Data (Unaudited)

(in millions)

Reconciliation from Income from Operations to Segment Income

The Company views segment income, as defined below, as a principal measure of performance of its operations and for the allocation of resources. Segment income is defined by the Company as income from operations adjusted to exclude intangibles amortization charges, provisions for asbestos and restructuring and other, and the impact of fair value adjustments to inventory acquired in an acquisition.

Three Months Ended March 31,

2019

2018

Income from operations

$

262

$

221

Intangibles amortization ⁽¹⁾

49

11

Provision for restructuring and other

4

13

Segment Income

$

315

$

245

⁽¹⁾ In addition to intangibles amortization charges, the amount for 2019 also includes $2 of accelerated depreciation related to the planned shutdown of a steel beverage can operation in Spain.

Segment Information

Three Months Ended March 31,

Net Sales

2019

2018

Actual

Actual

Americas Beverage

$

788

$

758

European Beverage

339

371

European Food

423

428

Asia Pacific

321

337

Transit Packaging

569

Total reportable segments

2,440

1,894

Non-reportable segments ⁽²⁾

315

303

Total net sales

$

2,755

$

2,197

Segment Income

Americas Beverage

$

113

$

98

European Beverage

39

55

European Food

48

56

Asia Pacific

45

44

Transit Packaging

73

Total reportable segments

318

253

Non-reportable segments ⁽²⁾

36

31

Corporate and other unallocated items

(39)

(39)

Total segment income

$

315

$

245

⁽²⁾

Includes the Company's food can and closures businesses in North America, aerosol can businesses in North America and Europe, the promotional packaging business in Europe, and tooling and equipment operations in the U.S. and United Kingdom.

Consolidated Supplemental Data (Unaudited)

(in millions, except per share data)

Reconciliation from Net Income and Diluted Earnings Per Share to Adjusted Net Income and Adjusted Diluted Earnings Per Share

The following table reconciles reported net income and diluted earnings per share attributable to the Company to adjusted net income and adjusted diluted earnings per share, as used elsewhere in this release.

Three Months Ended March 31,

2019

2018

Net income/diluted earnings per share attributable to
³Ô¹Ï51±¬ÁÏÍø Holdings, as reported

$103

$0.77

$90

$0.67

Intangibles amortization ⁽¹⁾

49

0.36

11

0.08

Restructuring and other ⁽²⁾

4

0.03

13

0.10

Acquisition costs ⁽³⁾

24

0.18

Pension curtailment ⁽⁴⁾

(14)

(0.10)

Loss from early extinguishment of debt ⁽⁵⁾

6

0.04

Income taxes ⁽⁶⁾

(10)

(0.07)

(12)

(0.09)

Noncontrolling interests ⁽⁷⁾

3

0.02

Adjusted net income/diluted earnings per share

$141

$1.05

$126

$0.94

Effective tax rate as reported

27.0%

25.7%

Adjusted effective tax rate

26.0%

25.5%

Adjusted net income, adjusted diluted earnings per share and the adjusted effective tax rate are non-GAAP measures and are not meant to be considered in isolation or as a substitute for net income, diluted earnings per share and effective tax rates determined in accordance with U.S. generally accepted accounting principles. The Company believes these non-GAAP measures provide useful information to evaluate the performance of the Company's ongoing business.

(1)

In the first quarters of 2019 and 2018, the Company recorded charges of $47 million ($35 million net of tax) and $11 million ($8 million net of tax) for intangibles amortization arising from prior acquisitions. Also in 2019, the Company recorded a charge of $2 million ($2 million net of tax) for accelerated depreciation related to the planned shutdown of a steel beverage can operation in Spain.

(2)

In the first quarter of 2019, the Company recorded net restructuring and other charges of $4 million ($5 million net of tax) including charges of $9 million primarily related to headcount reductions in its European Division and $4 million for asset sales and impairments primarily due to losses from a fire at a production facility in Asia, offset by a gain of $9 million arising from a favorable court ruling in a lawsuit brought by one of the Company's Brazilian subsidiaries claiming it was overcharged by the local tax authorities for indirect taxes paid in prior years. Certain other Brazilian subsidiaries of the Company have similar suits pending in other jurisdictions.

In the first quarter of 2018, the Company recorded restructuring and other charges of $13 million ($11 million net of tax) including $7 million for asset sales and impairments, $3 million for restructuring and other costs, and $3 million for transaction costs.

(3)

In the first quarter of 2018, the Company recorded a charge of $15 million ($10 million net of tax) for net losses arising from its hedge of the U.S. dollar purchase price for its acquisition of Signode. In addition, the Company incurred net charges of $9 million ($7 million net of tax) for pre-acquisition interest carrying costs on borrowings to finance the transaction.

(4)

In the first quarter of 2019, the Company recorded a curtailment gain of $14 million ($12 million net of tax) in connection with the closure of a defined benefit pension plan to future accrual for active members.

(5)

In the first quarter of 2019, the Company recorded a charge of $6 million ($5 million net of tax) for the write off of deferred financing fees in connection with the repayment of a portion of its term loan.

(6)

In the first quarter of 2019, the Company recorded income tax benefits of $10 million related to the items described above. In the first quarter of 2018, the Company recorded income tax benefits of $12 million related to the items described above.

(7)

In the first quarter of 2019, the Company recorded noncontrolling interest charges of $3 million related to the items described above.

Consolidated Balance Sheets (Condensed & Unaudited)

(in millions)

March 31,

2019 ⁽¹⁾

2018

Assets

Current assets

Cash and cash equivalents

$

301

$

2,201

Receivables, net

1,686

1,386

Inventories

1,851

1,431

Prepaid expenses and other current assets

186

243

Total current assets

4,024

5,261

Goodwill and intangible assets

6,554

3,621

Property, plant and equipment, net

3,734

3,322

Other non-current assets

1,045

875

Total

$

15,357

$

13,079

Liabilities and equity

Current liabilities

Short-term debt

$

125

$

32

Current maturities of long-term debt

83

61

Accounts payable and accrued liabilities

3,134

2,768

Total current liabilities

3,342

2,861

Long-term debt, excluding current maturities

8,814

7,778

Other non-current liabilities

1,699

1,328

Noncontrolling interests

368

347

³Ô¹Ï51±¬ÁÏÍø Holdings shareholders' equity

1,134

765

Total equity

1,502

1,112

Total

$

15,357

$

13,079

⁽¹⁾

On January 1, 2019, the Company adopted new lease accounting guidance resulting in increases in other non-current assets and other non-current liabilities of $220. Prior period amounts have not been recast and continue to be reported in accordance with accounting guidance in effect for those periods.

Consolidated Statements of Cash Flows (Condensed & Unaudited)

(in millions)

Three months ended March 31,

2019

2018

Cash flows from operating activities

Net income

$

131

$

113

Depreciation and amortization

122

65

Restructuring and other

4

13

Pension expense

(2)

1

Pension contributions

(7)

(5)

Stock-based compensation

8

6

Working capital changes and other

(922)

(944)

Net cash used for operating activities ⁽¹⁾

(666)

(751)

Cash flows from investing activities

Capital expenditures

(75)

(92)

Beneficial interest in transferred receivables

175

Proceeds from sale of assets

5

Other

6

(25)

Net cash provided by/(used for) investing activities

(64)

58

Cash flows from financing activities

Net change in debt

450

2,475

Dividends paid to noncontrolling interests

(9)

Common stock repurchased

(1)

(1)

Other, net

(23)

(19)

Net cash provided by financing activities

417

2,455

Effect of exchange rate changes on cash and cash equivalents

2

14

Net change in cash and cash equivalents

(311)

1,776

Cash and cash equivalents at January 1

659

435

Cash and cash equivalents at March 31 ⁽²⁾

$

348

$

2,211

(1)

Adjusted free cash flow is defined by the Company as net cash used for operating activities plus beneficial interest in transferred receivables less capital expenditures and certain other items. A reconciliation from net cash used for operating activities to adjusted free cash flow for the three months ended March 31, 2019 and 2018 follows.

(2)

Cash and cash equivalents includes $47 and $10 of restricted cash at March 31, 2019 and 2018.

Three months ended March 31,

2019

2018

Net cash used for operating activities

($666)

($751)

Beneficial interest in transferred receivables ⁽³⁾

175

Acquisition costs

3

Adjusted cash used for operating activities

(666)

(573)

Interest included in investing activities ⁽⁴⁾

6

Capital expenditures

(75)

(92)

Adjusted free cash flow

($735)

($665)

(3)

Subsequent to amendments to the Company's receivables securitization program during the third quarter of 2018, certain activity that was previously reported as investing activity is now reported as operating activity.

(4)

Interest benefit of cross currency swap included in investing activities.

Consolidated Supplemental Data (Unaudited)

(in millions, except per share data)

Impact of Foreign Currency Translation by Segment ⁽¹⁾

Net Sales

Segment Income

Americas Beverage

(11)

(1)

European Beverage

(19)

(2)

European Food

(35)

(4)

Asia Pacific

(4)

Transit Packaging

(25)

(3)

Corporate and Non-Reportable

(6)

($100)

($10)

⁽¹⁾

The impact of foreign currency translation represents the difference between actual current year U.S. dollar results and pro forma amounts assuming constant foreign currency exchange rates for translation in both periods. In order to compute the difference, the Company compares actual U.S. dollar results to an amount calculated by multiplying or dividing, as appropriate, the current U.S. dollar results by current year average foreign exchange rates and then multiplying or dividing, as appropriate, those amounts by the applicable prior year average foreign exchange rates.

Comparative Results for Transit Packaging

Revenue

Segment Income

Depreciation ⁽²⁾

2019

2018

2019

2018

2019

2018

Q1

$569

$588

$73

$79

$15

$13

Q2

620

94

14

Q3

585

81

15

Q4

595

80

14

$2,388

$334

$56

⁽²⁾

Amount of depreciation expense included in segment income, including step-up depreciation in 2019.

Reconciliation of Adjusted EBITDA

Q1 2019

Q1 2018

Full Year 2018

Twelve Months ended

March 31, 2019

Income from operations

$262

$221

$1,096

$1,137

Add:

Intangibles amortization

49

11

148

186

Fair value adjustment to inventory

40

40

Provision for restructuring and other

4

13

44

35

Segment income

315

245

1,328

1,398

Other pension and postretirement

4

17

67

54

Depreciation

73

54

277

296

Adjusted EBITDA

$392

$316

$1,672

$1,748