QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction | (I.R.S. Employer | ||||||||||
of incorporation or organization) | Identification No.) | ||||||||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
☒ | Accelerated filer | ☐ | ||||||||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||||||||
Emerging growth company |
SILGAN HOLDINGS INC. | |||||
TABLE OF CONTENTS | |||||
Page No. | |||||
Sept. 30, 2020 | Sept. 30, 2019 | Dec. 31, 2019 | |||||||||||||||
(unaudited) | (unaudited) | ||||||||||||||||
Assets | |||||||||||||||||
Current assets: | |||||||||||||||||
Cash and cash equivalents | $ | $ | $ | ||||||||||||||
Trade accounts receivable, net | |||||||||||||||||
Inventories | |||||||||||||||||
Prepaid expenses and other current assets | |||||||||||||||||
Total current assets | |||||||||||||||||
Property, plant and equipment, net | |||||||||||||||||
Goodwill | |||||||||||||||||
Other intangible assets, net | |||||||||||||||||
Other assets, net | |||||||||||||||||
$ | $ | $ | |||||||||||||||
Liabilities and Stockholders’ Equity | |||||||||||||||||
Current liabilities: | |||||||||||||||||
Revolving loans and current portion of long-term debt | $ | $ | $ | ||||||||||||||
Trade accounts payable | |||||||||||||||||
Accrued payroll and related costs | |||||||||||||||||
Accrued liabilities | |||||||||||||||||
Total current liabilities | |||||||||||||||||
Long-term debt | |||||||||||||||||
Deferred income taxes | |||||||||||||||||
Other liabilities | |||||||||||||||||
Stockholders’ equity: | |||||||||||||||||
Common stock | |||||||||||||||||
Paid-in capital | |||||||||||||||||
Retained earnings | |||||||||||||||||
Accumulated other comprehensive loss | ( | ( | ( | ||||||||||||||
Treasury stock | ( | ( | ( | ||||||||||||||
Total stockholders’ equity | |||||||||||||||||
$ | $ | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
Sept. 30, 2020 | Sept. 30, 2019 | Sept. 30, 2020 | Sept. 30, 2019 | ||||||||||||||||||||
Net sales | $ | $ | $ | $ | |||||||||||||||||||
Cost of goods sold | |||||||||||||||||||||||
Gross profit | |||||||||||||||||||||||
Selling, general and administrative expenses | |||||||||||||||||||||||
Rationalization charges | |||||||||||||||||||||||
Other pension and postretirement income | ( | ( | ( | ( | |||||||||||||||||||
Income before interest and income taxes | |||||||||||||||||||||||
Interest and other debt expense before loss on early extinguishment of debt | |||||||||||||||||||||||
Loss on early extinguishment of debt | |||||||||||||||||||||||
Interest and other debt expense | |||||||||||||||||||||||
Income before income taxes | |||||||||||||||||||||||
Provision for income taxes | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Earnings per share: | |||||||||||||||||||||||
Basic net income per share | $ | $ | $ | $ | |||||||||||||||||||
Diluted net income per share | $ | $ | $ | $ | |||||||||||||||||||
Weighted average number of shares: | |||||||||||||||||||||||
Basic | |||||||||||||||||||||||
Effect of dilutive securities | |||||||||||||||||||||||
Diluted | |||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
Sept. 30, 2020 | Sept. 30, 2019 | Sept. 30, 2020 | Sept. 30, 2019 | ||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Other comprehensive income (loss), net of tax: | |||||||||||||||||||||||
Changes in net prior service credit and actuarial losses | |||||||||||||||||||||||
Change in fair value of derivatives | ( | ( | ( | ||||||||||||||||||||
Foreign currency translation | ( | ( | ( | ||||||||||||||||||||
Other comprehensive income (loss) | ( | ( | ( | ||||||||||||||||||||
Comprehensive income | $ | $ | $ | $ |
2020 | 2019 | ||||||||||
Cash flows provided by (used in) operating activities: | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Rationalization charges | |||||||||||
Stock compensation expense | |||||||||||
Loss on early extinguishment of debt | |||||||||||
Other changes that provided (used) cash, net of effects from acquisitions: | |||||||||||
Trade accounts receivable, net | ( | ( | |||||||||
Inventories | ( | ||||||||||
Trade accounts payable | ( | ( | |||||||||
Accrued liabilities | ( | ||||||||||
Other, net | |||||||||||
Net cash provided by (used in) operating activities | ( | ||||||||||
Cash flows provided by (used in) investing activities: | |||||||||||
Purchase of businesses, net of cash acquired | ( | ||||||||||
Capital expenditures | ( | ( | |||||||||
Other, net | |||||||||||
Net cash used in investing activities | ( | ( | |||||||||
Cash flows provided by (used in) financing activities: | |||||||||||
Borrowings under revolving loans | |||||||||||
Repayments under revolving loans | ( | ( | |||||||||
Proceeds from issuance of long-term debt | |||||||||||
Repayments of long-term debt | ( | ( | |||||||||
Changes in outstanding checks - principally vendors | ( | ( | |||||||||
Dividends paid on common stock | ( | ( | |||||||||
Debt issuance costs | ( | ||||||||||
Repurchase of common stock | ( | ( | |||||||||
Net cash provided by financing activities | |||||||||||
Effect of exchange rate changes on cash and cash equivalents | ( | ||||||||||
Cash and cash equivalents: | |||||||||||
Net (decrease) increase | ( | ||||||||||
Balance at beginning of year | |||||||||||
Balance at end of period | $ | $ | |||||||||
Interest paid, net | $ | $ | |||||||||
Income taxes paid, net |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
Sept. 30, 2020 | Sept. 30, 2019 | Sept. 30, 2020 | Sept. 30, 2019 | |||||||||||||||||||||||
Common stock - shares outstanding | ||||||||||||||||||||||||||
Balance at beginning of period | ||||||||||||||||||||||||||
Net issuance of treasury stock for vested restricted stock units | ||||||||||||||||||||||||||
Repurchases of common stock | ( | ( | ( | |||||||||||||||||||||||
Balance at end of period | ||||||||||||||||||||||||||
Common stock - par value | ||||||||||||||||||||||||||
Balance at beginning and end of period | $ | $ | $ | $ | ||||||||||||||||||||||
Paid-in capital | ||||||||||||||||||||||||||
Balance at beginning of period | ||||||||||||||||||||||||||
Stock compensation expense | ||||||||||||||||||||||||||
Net issuance of treasury stock for vested restricted stock units | ( | ( | ||||||||||||||||||||||||
Balance at end of period | ||||||||||||||||||||||||||
Retained earnings | ||||||||||||||||||||||||||
Balance at beginning of period | ||||||||||||||||||||||||||
Net income | ||||||||||||||||||||||||||
Dividends declared on common stock | ( | ( | ( | ( | ||||||||||||||||||||||
Adoption of accounting standards updates related to credit losses in 2020 and leases in 2019 | — | — | ( | ( | ||||||||||||||||||||||
Balance at end of period | ||||||||||||||||||||||||||
Accumulated other comprehensive loss | ||||||||||||||||||||||||||
Balance at beginning of period | ( | ( | ( | ( | ||||||||||||||||||||||
Other comprehensive income (loss) | ( | ( | ( | |||||||||||||||||||||||
Balance at end of period | ( | ( | ( | ( | ||||||||||||||||||||||
Treasury stock | ||||||||||||||||||||||||||
Balance at beginning of period | ( | ( | ( | ( | ||||||||||||||||||||||
Net issuance of treasury stock for vested restricted stock units | ( | ( | ||||||||||||||||||||||||
Repurchases of common stock | ( | ( | ( | |||||||||||||||||||||||
Balance at end of period | ( | ( | ( | ( | ||||||||||||||||||||||
Total stockholders' equity | $ | $ | $ | $ | ||||||||||||||||||||||
Dividends declared on common stock per share | $ | $ | $ | $ | ||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
Sept. 30, 2020 | Sept. 30, 2019 | Sept. 30, 2020 | Sept. 30, 2019 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Metal containers | $ | $ | $ | $ | |||||||||||||||||||
Closures | |||||||||||||||||||||||
Plastic containers | |||||||||||||||||||||||
$ | $ | $ | $ |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
Sept. 30, 2020 | Sept. 30, 2019 | Sept. 30, 2020 | Sept. 30, 2019 | |||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
North America | $ | $ | $ | $ | ||||||||||||||||||||||
Europe and other | ||||||||||||||||||||||||||
$ | $ | $ | $ |
Trade accounts receivable | $ | ||||
Inventories | |||||
Property, plant and equipment | |||||
Other intangible assets | |||||
Other assets | |||||
Trade accounts payable and accrued liabilities | ( | ||||
Deferred income tax liabilities | ( | ||||
Debt and other liabilities | ( | ||||
Total identifiable net assets | |||||
Goodwill | |||||
Cash paid at closing, net of cash acquired | $ |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
Sept. 30, 2020 | Sept. 30, 2019 | Sept. 30, 2020 | Sept. 30, 2019 | |||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
Metal containers | $ | $ | $ | $ | ||||||||||||||||||||||
Closures | ||||||||||||||||||||||||||
Plastic containers | ||||||||||||||||||||||||||
$ | $ | $ | $ |
Employee Severance and Benefits | Plant Exit Costs | Non-Cash Asset Write-Down | Total | |||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
Balance at December 31, 2019 | $ | $ | $ | $ | ||||||||||||||||||||||
Charged to expense | ||||||||||||||||||||||||||
Utilized and currency translation | ( | ( | ( | ( | ||||||||||||||||||||||
Balance at September 30, 2020 | $ | $ | $ | $ |
Unrecognized Net Defined Benefit Plan Costs | Change in Fair Value of Derivatives | Foreign Currency Translation | Total | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Balance at December 31, 2019 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Other comprehensive loss before reclassifications | ( | ( | ( | ( | |||||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss | |||||||||||||||||||||||
Other comprehensive loss | ( | ( | ( | ||||||||||||||||||||
Balance at September 30, 2020 | $ | ( | $ | ( | $ | ( | $ | ( |
Sept. 30, 2020 | Sept. 30, 2019 | Dec. 31, 2019 | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Raw materials | $ | $ | $ | ||||||||||||||
Work-in-process | |||||||||||||||||
Finished goods | |||||||||||||||||
Other | |||||||||||||||||
Adjustment to value inventory at cost on the LIFO method | ( | ( | ( | ||||||||||||||
$ | $ | $ |
Metal Containers | Closures | Plastic Containers | Total | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Balance at December 31, 2019 | $ | $ | $ | $ | |||||||||||||||||||
Acquisitions | — | — | |||||||||||||||||||||
Currency translation | ( | ||||||||||||||||||||||
Balance at September 30, 2020 | $ | $ | $ | $ | |||||||||||||||||||
Sept. 30, 2020 | Dec. 31, 2019 | ||||||||||||||||||||||
Gross Amount | Accumulated Amortization | Gross Amount | Accumulated Amortization | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Definite-lived intangibles: | |||||||||||||||||||||||
Customer relationships | $ | $ | ( | $ | $ | ( | |||||||||||||||||
Other | ( | ( | |||||||||||||||||||||
( | ( | ||||||||||||||||||||||
Indefinite-lived intangibles: | |||||||||||||||||||||||
Trade names | — | — | |||||||||||||||||||||
$ | $ | ( | $ | $ | ( | ||||||||||||||||||
Sept. 30, 2020 | Sept. 30, 2019 | Dec. 31, 2019 | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Bank debt | |||||||||||||||||
Bank revolving loans | $ | $ | $ | ||||||||||||||
U.S. term loans | |||||||||||||||||
Canadian term loans | |||||||||||||||||
Other foreign bank revolving and term loans | |||||||||||||||||
Total bank debt | |||||||||||||||||
4¾% Senior Notes | |||||||||||||||||
3¼% Senior Notes | |||||||||||||||||
4⅛% Senior Notes | |||||||||||||||||
2¼% Senior Notes | |||||||||||||||||
Finance leases | |||||||||||||||||
Total debt - principal | |||||||||||||||||
Less unamortized debt issuance costs and debt discount | |||||||||||||||||
Total debt | |||||||||||||||||
Less current portion | |||||||||||||||||
$ | $ | $ |
Carrying Amount | Fair Value | ||||||||||
(Dollars in thousands) | |||||||||||
Assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Liabilities: | |||||||||||
Bank debt | $ | $ | |||||||||
4¾% Senior Notes | |||||||||||
3¼% Senior Notes | |||||||||||
4⅛% Senior Notes | |||||||||||
2¼% Senior Notes | |||||||||||
Derivative instruments (accrued and other liabilities) |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
Sept. 30, 2020 | Sept. 30, 2019 | Sept. 30, 2020 | Sept. 30, 2019 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Service cost | $ | $ | $ | $ | |||||||||||||||||||
Interest cost | |||||||||||||||||||||||
Expected return on plan assets | ( | ( | ( | ( | |||||||||||||||||||
Amortization of prior service cost | |||||||||||||||||||||||
Amortization of actuarial losses | |||||||||||||||||||||||
Net periodic benefit credit | $ | ( | $ | ( | $ | ( | $ | ( |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
Sept. 30, 2020 | Sept. 30, 2019 | Sept. 30, 2020 | Sept. 30, 2019 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Service cost | $ | $ | $ | $ | |||||||||||||||||||
Interest cost | |||||||||||||||||||||||
Amortization of prior service credit | ( | ( | ( | ( | |||||||||||||||||||
Amortization of actuarial gains | ( | ( | ( | ( | |||||||||||||||||||
Net periodic benefit credit | $ | ( | $ | ( | $ | ( | $ | ( |
Metal Containers | Closures | Plastic Containers | Corporate | Total | |||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
Three Months Ended September 30, 2020 | |||||||||||||||||||||||||||||
Net sales | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Depreciation and amortization(1) | |||||||||||||||||||||||||||||
Rationalization charges | |||||||||||||||||||||||||||||
Segment income | ( | ||||||||||||||||||||||||||||
Three Months Ended September 30, 2019 | |||||||||||||||||||||||||||||
Net sales | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Depreciation and amortization(1) | |||||||||||||||||||||||||||||
Rationalization charges | |||||||||||||||||||||||||||||
Segment income | ( | ||||||||||||||||||||||||||||
Nine Months Ended September 30, 2020 | |||||||||||||||||||||||||||||
Net sales | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Depreciation and amortization(1) | |||||||||||||||||||||||||||||
Rationalization charges | |||||||||||||||||||||||||||||
Segment income | ( | ||||||||||||||||||||||||||||
Nine Months Ended September 30, 2019 | |||||||||||||||||||||||||||||
Net sales | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Depreciation and amortization(1) | |||||||||||||||||||||||||||||
Rationalization charges | |||||||||||||||||||||||||||||
Segment income | ( |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
Sept. 30, 2020 | Sept. 30, 2019 | Sept. 30, 2020 | Sept. 30, 2019 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Total segment income | $ | $ | $ | $ | |||||||||||||||||||
Interest and other debt expense | |||||||||||||||||||||||
Income before income taxes | $ | $ | $ | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
Sept. 30, 2020 | Sept. 30, 2019 | Sept. 30, 2020 | Sept. 30, 2019 | ||||||||||||||||||||
Net sales | |||||||||||||||||||||||
Metal containers | 57.6 | % | 62.2 | % | 53.1 | % | 55.3 | % | |||||||||||||||
Closures | 31.9 | 26.8 | 33.6 | 31.2 | |||||||||||||||||||
Plastic containers | 10.5 | 11.0 | 13.3 | 13.5 | |||||||||||||||||||
Consolidated | 100.0 | 100.0 | 100.0 | 100.0 | |||||||||||||||||||
Cost of goods sold | 82.6 | 84.3 | 81.9 | 83.8 | |||||||||||||||||||
Gross profit | 17.4 | 15.7 | 18.1 | 16.2 | |||||||||||||||||||
Selling, general and administrative expenses | 6.2 | 5.8 | 7.7 | 6.8 | |||||||||||||||||||
Rationalization charges | 0.2 | 0.2 | 0.2 | 1.4 | |||||||||||||||||||
Other pension and postretirement income | (0.7) | (0.3) | (0.8) | (0.4) | |||||||||||||||||||
Income before interest and income taxes | 11.7 | 10.0 | 11.0 | 8.4 | |||||||||||||||||||
Interest and other debt expense | 1.9 | 2.1 | 2.1 | 2.5 | |||||||||||||||||||
Income before income taxes | 9.8 | 7.9 | 8.9 | 5.9 | |||||||||||||||||||
Provision for income taxes | 2.2 | 1.7 | 2.2 | 1.3 | |||||||||||||||||||
Net income | 7.6 | % | 6.2 | % | 6.7 | % | 4.6 | % |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
Sept. 30, 2020 | Sept. 30, 2019 | Sept. 30, 2020 | Sept. 30, 2019 | ||||||||||||||||||||
(dollars in millions) | |||||||||||||||||||||||
Net sales | |||||||||||||||||||||||
Metal containers | $ | 856.7 | $ | 822.3 | $ | 1,962.4 | $ | 1,904.9 | |||||||||||||||
Closures | 475.1 | 353.4 | 1,242.7 | 1,073.0 | |||||||||||||||||||
Plastic containers | 156.7 | 145.6 | 490.3 | 463.7 | |||||||||||||||||||
Consolidated | $ | 1,488.5 | $ | 1,321.3 | $ | 3,695.4 | $ | 3,441.6 | |||||||||||||||
Segment income | |||||||||||||||||||||||
Metal containers (1) | $ | 94.5 | $ | 81.1 | $ | 213.8 | $ | 134.1 | |||||||||||||||
Closures (2) | 64.2 | 44.8 | 168.0 | 131.9 | |||||||||||||||||||
Plastic containers (3) | 21.9 | 11.4 | 66.9 | 36.9 | |||||||||||||||||||
Corporate (4) | (6.6) | (4.6) | (41.3) | (14.9) | |||||||||||||||||||
Consolidated | $ | 174.0 | $ | 132.7 | $ | 407.4 | $ | 288.0 |
Exhibit Number | Description | |||||||
31.1 | ||||||||
31.2 | ||||||||
32.1 | ||||||||
32.2 | ||||||||
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document. | |||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | |||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |||||||
104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). |
SILGAN HOLDINGS INC. | ||||||||
Dated: November 6, 2020 | /s/ Robert B. Lewis | |||||||
Robert B. Lewis | ||||||||
Executive Vice President and | ||||||||
Chief Financial Officer | ||||||||
(Principal Financial and | ||||||||
Accounting Officer) |
1. | I have reviewed this Quarterly Report on Form 10-Q for the period ended September 30, 2020 of Silgan Holdings Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: November 6, 2020 | /s/ Anthony J. Allott | ||||
Anthony J. Allott | |||||
Chairman of the Board and | |||||
Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q for the period ended September 30, 2020 of Silgan Holdings Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: November 6, 2020 | /s/ Robert B. Lewis | ||||
Robert B. Lewis | |||||
Executive Vice President and | |||||
Chief Financial Officer |
(1) The Quarterly Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |||||
(2) The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Anthony J. Allott | ||
Anthony J. Allott | ||
Chairman of the Board and | ||
Chief Executive Officer |
(1) The Quarterly Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |||||
(2) The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Robert B. Lewis | ||
Robert B. Lewis | ||
Executive Vice President and | ||
Chief Financial Officer |
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
---|---|---|---|
Current assets: | |||
Cash and cash equivalents | $ 193,759 | $ 203,824 | $ 117,389 |
Trade accounts receivable, net | 865,436 | 504,986 | 751,404 |
Inventories | 678,181 | 633,005 | 703,206 |
Prepaid expenses and other current assets | 84,715 | 64,993 | 61,310 |
Total current assets | 1,822,091 | 1,406,808 | 1,633,309 |
Property, plant and equipment, net | 1,785,787 | 1,570,331 | 1,522,541 |
Goodwill | 1,702,463 | 1,142,223 | 1,128,151 |
Other intangible assets, net | 633,256 | 354,615 | 358,046 |
Other assets, net | 508,982 | 457,082 | 431,970 |
Assets, Total | 6,452,579 | 4,931,059 | 5,074,017 |
Current liabilities: | |||
Revolving loans and current portion of long-term debt | 284,465 | 29,813 | 841,430 |
Trade accounts payable | 592,881 | 727,053 | 550,557 |
Accrued payroll and related costs | 119,369 | 66,866 | 69,191 |
Accrued liabilities | 245,626 | 194,797 | 156,599 |
Total current liabilities | 1,242,341 | 1,018,529 | 1,617,777 |
Long-term debt | 3,163,305 | 2,214,608 | 1,809,955 |
Deferred income taxes | 371,966 | 254,836 | 274,107 |
Other liabilities | 456,104 | 419,764 | 403,648 |
Stockholders’ equity: | |||
Common stock | 1,751 | 1,751 | 1,751 |
Paid-in capital | 301,463 | 289,422 | 285,061 |
Retained earnings | 2,348,728 | 2,141,302 | 2,118,860 |
Accumulated other comprehensive loss | (272,352) | (259,742) | (287,923) |
Treasury stock | (1,160,727) | (1,149,411) | (1,149,219) |
Total stockholders’ equity | 1,218,863 | 1,023,322 | 968,530 |
Liabilities and Equity, Total | $ 6,452,579 | $ 4,931,059 | $ 5,074,017 |
Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
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Income Statement [Abstract] | ||||
Net sales | $ 1,488,499 | $ 1,321,342 | $ 3,695,353 | $ 3,441,635 |
Cost of goods sold | 1,230,148 | 1,113,727 | 3,027,809 | 2,884,510 |
Gross profit | 258,351 | 207,615 | 667,544 | 557,125 |
Selling, general and administrative expenses | 91,525 | 76,065 | 282,011 | 233,816 |
Rationalization charges | 2,505 | 3,195 | 7,247 | 48,594 |
Other pension and postretirement income | (9,712) | (4,340) | (29,122) | (13,320) |
Income before interest and income taxes | 174,033 | 132,695 | 407,408 | 288,035 |
Interest and other debt expense before loss on early extinguishment of debt | 27,725 | 26,767 | 77,051 | 82,272 |
Loss on early extinguishment of debt | 0 | 1,676 | 1,481 | 1,676 |
Interest and other debt expense | 27,725 | 28,443 | 78,532 | 83,948 |
Income before income taxes | 146,308 | 104,252 | 328,876 | 204,087 |
Provision for income taxes | 33,457 | 22,978 | 80,253 | 45,117 |
Net income | $ 112,851 | $ 81,274 | $ 248,623 | $ 158,970 |
Earnings per share | ||||
Basic net income per share (usd per share) | $ 1.02 | $ 0.73 | $ 2.24 | $ 1.43 |
Diluted net income per share (usd per share) | $ 1.01 | $ 0.73 | $ 2.23 | $ 1.43 |
Weighted average number of shares | ||||
Basic (in shares) | 110,921 | 111,058 | 110,895 | 110,985 |
Effect of dilutive securities (in shares) | 691 | 463 | 565 | 554 |
Diluted (in shares) | 111,612 | 111,521 | 111,460 | 111,539 |
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
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Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 112,851 | $ 81,274 | $ 248,623 | $ 158,970 |
Other comprehensive income (loss), net of tax: | ||||
Changes in net prior service credit and actuarial losses | 1,807 | 2,625 | 4,555 | 7,745 |
Change in fair value of derivatives | 681 | (159) | (1,670) | (2,647) |
Foreign currency translation | 22,520 | (25,016) | (15,495) | (24,213) |
Other comprehensive income (loss) | 25,008 | (22,550) | (12,610) | (19,115) |
Comprehensive income | $ 137,859 | $ 58,724 | $ 236,013 | $ 139,855 |
Significant Accounting Policies |
9 Months Ended |
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Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Basis of Presentation. The accompanying unaudited condensed consolidated financial statements of Silgan Holdings Inc., or Silgan, have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP, for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the accompanying financial statements include all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation. The results of operations for any interim period are not necessarily indicative of the results of operations for the full year. The Condensed Consolidated Balance Sheet at December 31, 2019 has been derived from our audited consolidated financial statements at that date, but does not include all of the information and footnotes required by GAAP for complete financial statements. You should read the accompanying condensed consolidated financial statements in conjunction with our consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2019. Goodwill and Other Intangible Assets. We review goodwill and other indefinite-lived intangible assets for impairment as of July 1 of each year and more frequently if circumstances indicate a possible impairment. We determined that our goodwill and other indefinite-lived intangible assets were not impaired in our annual 2020 assessment performed during the third quarter. Recently Adopted Accounting Pronouncements. In June 2016, the Financial Accounting Standards Board, or FASB, issued an accounting standards update, or ASU, that amends the guidance on the . This new standard introduces an approach, based on expected losses, to estimate credit losses on certain types of financial instruments. The new approach to estimating credit losses (referred to as the current expected credit losses model) applies to most financial assets measured at amortized cost and certain other instruments, including trade and other receivables. We adopted this new standard on January 1, 2020 using the transition method, which allowed us to recognize the effects of applying this standard as a cumulative effect to retained earnings as of January 1, 2020. As a result of the adoption of this standard, we reduced retained earnings by $0.7 million. The adoption of this standard did not have a material impact on our financial position, results of operations or cash flows.
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Revenue |
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Revenue Recognition [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue | Revenue The following tables present our revenues disaggregated by reportable business segment and geography as they best depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. Revenues by business segment were as follows:
Revenues by geography were as follows:
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Acquisitions |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | Acquisitions Cobra Plastics Acquisition On February 4, 2020 we acquired Cobra Plastics, Inc., or Cobra Plastics, a manufacturer and seller of injection molded plastic closures for a wide variety of consumer products, with a particular focus on the aerosol overcap market. The purchase price for this acquisition of $39.8 million, net of cash acquired, was primarily funded with revolving loan borrowings under our amended and restated senior secured credit facility, or the Credit Agreement. For this acquisition, we applied the acquisition method of accounting and recognized assets acquired and liabilities assumed at fair value as of the acquisition date, and we recognized goodwill of $18.4 million and a customer relationship intangible asset of $11.5 million. Cobra Plastics' results of operations were included in our closures business since the acquisition date and were not significant since such date. Albéa Dispensing Business Acquisition On June 1, 2020, we acquired the dispensing operations of the Albéa Group, or the Albéa Dispensing Business, a leading global supplier of highly engineered pumps, sprayers and foam dispensing solutions to major branded consumer goods product companies in the beauty and personal care markets. It operates a global network of ten manufacturing facilities across North America, Europe, South America and Asia. This acquisition is strategically important for us, as it expands our closures franchise and, in particular, our dispensing systems operations. The Albéa Dispensing Business is included in our closures business as of the acquisition date. We acquired the Albéa Dispensing Business for a purchase price in cash of $901.0 million, net of cash acquired. The purchase price is subject to adjustment for working capital, other current assets and current liabilities and net indebtedness. We incurred acquisition related costs for the Albéa Dispensing Business totaling $0.7 million and $19.0 million for the three and nine months ended September 30, 2020, respectively, which are included in selling, general and administrative expenses in our Condensed Consolidated Statements of Income. We funded the purchase price for this acquisition with term and revolving loan borrowings under the Credit Agreement, including a delayed draw term loan of $900 million. See Note 8 for further information. The initial purchase price has been allocated to assets acquired and liabilities assumed based on estimated fair values at the date of acquisition using valuation techniques including the income, cost and market approaches, primarily using Level 3 inputs (as defined in Note 9). The purchase price allocation is preliminary and subject to change pending a final valuation of the assets and liabilities, including property, plant and equipment and intangible assets, and the related tax impact of any adjustments to such valuations. In connection with this acquisition, we recorded a charge of $3.5 million related to the write-up of acquired inventory of the Albéa Dispensing Business as a result of purchase accounting. The allocated fair value of assets acquired and liabilities assumed are summarized as follows (in thousands)
Goodwill of $502.6 million consists largely of our increased capacity to serve our global customers and achieve operational synergies and has been assigned to our closures segment. A majority of the goodwill is not expected to be deductible for income tax purposes. Other intangible assets consist of customer relationships of $257.0 million with an estimated remaining life of 24 years and technology know-how of $28.0 million with an estimated remaining life of 8 years. Acquired property, plant and equipment are being depreciated on a straight-line basis with estimated remaining lives of up to 35 years. Our consolidated results of operations for the three and nine months ended September 30, 2020 included the results for the Albéa Dispensing Business since the acquisition date. Net sales from the Albéa Dispensing Business operations of $81.3 million and $111.2 million were included in our Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2020, respectively.
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Rationalization Charges |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rationalization Charges | Rationalization Charges We continually evaluate cost reduction opportunities across each of our businesses, including rationalizations of our existing facilities through plant closings and downsizings. We use a disciplined approach to identify opportunities that generate attractive cash returns. Rationalization charges by business segment were as follows:
Activity in reserves for our rationalization plans were as follows:
Rationalization reserves as of September 30, 2020 were recorded in our Condensed Consolidated Balance Sheets as accrued liabilities of $4.8 million and other liabilities of $37.4 million. Exclusive of the footprint optimization plan for our metal container business and our resulting withdrawal from the Central States, Southeast and Southwest Areas Pension Plan, or the Central States Pension Plan, announced in 2019, remaining expenses and cash expenditures for our rationalization plans are expected to be $2.1 million and $3.9 million, respectively. Remaining expenses for the accretion of interest for the withdrawal liability related to the Central States Pension Plan are expected to average approximately $1.1 million per year and be recognized annually for the next twenty years, and remaining cash expenditures for the withdrawal liability related to the Central States Pension Plan are expected to be approximately $3.1 million annually for the next twenty years, beginning in 2020.
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Accumulated Other Comprehensive Loss |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss Accumulated other comprehensive loss is reported in our Condensed Consolidated Statements of Stockholders’ Equity. Amounts included in accumulated other comprehensive loss, net of tax, were as follows:
The amounts reclassified to earnings from the unrecognized net defined benefit plan costs component of accumulated other comprehensive loss for the three and nine months ended September 30, 2020, were net (losses) of $(2.4) million and $(7.3) million, respectively, excluding income tax benefits of $0.6 million and $1.9 million, respectively. For the three and nine months ended September 30, 2020 these net (losses) consisted of amortization of net actuarial (losses) of $(2.9) million and $(8.6) million and amortization of net prior service credit of $0.4 million and $1.3 million, respectively. Amortization of net actuarial losses and net prior service credit was recorded in other pension and postretirement income in our Condensed Consolidated Statements of Income. See Note 11 for further information. The amounts reclassified to earnings from the change in fair value of derivatives component of accumulated other comprehensive loss for the three and nine months ended September 30, 2020 were not significant. Other comprehensive loss before reclassifications related to foreign currency translation for the three and nine months ended September 30, 2020, consisted of (i) foreign currency gains related to translation of quarter end financial statements of foreign subsidiaries utilizing a functional currency other than the U.S. dollar of $42.4 million and $19.4 million, respectively, (ii) foreign currency (losses) related to intra-entity foreign currency transactions that are of a long-term investment nature of $(0.4) million and $(3.3) million, respectively, and (iii) foreign currency (losses) related to our net investment hedges of $(25.2) million and $(41.4) million, respectively, excluding income tax benefits of $6.0 million and $9.8 million, respectively. See Note 9 for further discussion.
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Inventories |
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Inventories | Inventories Inventories consisted of the following:
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Goodwill and Other Intangibles |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangibles | Goodwill and Other Intangibles Changes in the carrying amount of goodwill were as follows:
In connection with our acquisitions of Cobra Plastics and the Albéa Dispensing Business as discussed in Note 3, we recognized goodwill of $521.0 million. The components of other intangible assets, net were as follows:
In connection with our acquisitions of Cobra Plastics and the Albéa Dispensing Business as discussed in Note 3, we recognized intangible assets for customer relationships of $268.5 million and technology know-how of $28.0 million. Amortization expense was $10.4 million and $25.4 million for the three and nine months ended September 30, 2020, respectively, and $6.7 million and $20.4 million for the three and nine months ended September 30, 2019, respectively. Amortization expense is expected to be $35.9 million, $40.7 million, $39.9 million, $39.9 million and $38.3 million for the years ended December 31, 2020 through 2024, respectively.
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Long-Term Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt | Long-Term Debt Long-term debt consisted of the following:
At September 30, 2020, the current portion of long-term debt consisted of $246.0 million of bank revolving loans under the Credit Agreement, $36.6 million of other foreign bank revolving and term loans and $1.9 million of finance leases. On February 26, 2020, we issued (i) an additional $200 million aggregate principal amount of our 4⅛% Senior Notes due 2028, or the 4⅛% Notes, at 99.5 percent of their principal amount, plus accrued and unpaid interest from November 12, 2019, and €500 million aggregate principal amount of our 2¼% Senior Notes due 2028, or the 2¼% Notes, at 100 percent of their principal amount. We used the net proceeds from these issuances and revolving loan borrowings under the Credit Agreement to prepay all of our outstanding U.S. term loans under the Credit Agreement at that time. As a result of this prepayment, we recorded a pre-tax charge for the loss on early extinguishment of debt of $1.5 million during the first quarter of 2020 for the write-off of unamortized debt issuance costs. 2¼% SENIOR NOTES The 2¼% Notes are general unsecured obligations of Silgan, ranking equal in right of payment with our existing and future unsecured unsubordinated indebtedness, including our 4¾% Senior Notes due 2025, or the 4¾% Notes, our 3¼% Senior Notes due 2025, or the 3¼% Notes, and the 4⅛% Notes, and ahead of our existing and future subordinated debt, if any. The 2¼% Notes are effectively subordinated to Silgan’s secured debt to the extent of the assets securing such debt and structurally subordinated to all obligations of subsidiaries of Silgan. The 2¼% Notes will mature on June 1, 2028. Interest on the 2¼% Notes will be payable semi-annually in cash on January 15 and July 15 of each year, beginning on July 15, 2020. The 2¼% Notes were issued pursuant to an indenture by and among Silgan, U.S. Bank National Association, as trustee, Elavon Financial Services DAC, UK Branch, as paying agent, and Elavon Financial Services DAC, as registrar and transfer agent, which indenture contains covenants that are generally less restrictive than those in the Credit Agreement and substantially similar to the covenants in the indenture for the 4¾% Notes and the 3¼% Notes and the indenture for the 4⅛% Notes. The 2¼% Notes are redeemable, at our option, in whole or in part, at any time after March 1, 2023, initially at 101.125 percent of their principal amount, plus accrued and unpaid interest to the redemption date, declining ratably to 100 percent of their principal amount, plus accrued and unpaid interest to the redemption date, on or after March 1, 2025. In addition, prior to March 1, 2023, we may redeem up to 35 percent of the aggregate principal amount of the 2¼% Notes with the proceeds of certain equity offerings at a redemption price of 102.25 percent of their principal amount, plus accrued and unpaid interest to the date of redemption. We may also redeem the 2¼% Notes, in whole or in part, prior to March 1, 2023 at a redemption price equal to 100 percent of their principal amount plus a make-whole premium as provided in the indenture for the 2¼% Notes, together with accrued and unpaid interest to the date of redemption. We will be required to make an offer to repurchase the 2¼% Notes at a repurchase price equal to 101 percent of their principal amount, plus accrued and unpaid interest to the date of repurchase, upon the occurrence of a change of control repurchase event as provided in the indenture for the 2¼% Notes. Incremental U.S. Term Loans On April 17, 2020, we and certain of our subsidiaries entered into an Incremental Term Loan Commitment Agreement, or the Incremental Term Loan Commitment Agreement, with the lenders thereunder and Wells Fargo Bank, National Association, as Administrative Agent and a lender. The Incremental Term Loan Commitment Agreement was entered into pursuant to the Credit Agreement and provided for the lenders thereunder to lend to us, on a delayed draw basis, $900 million of Incremental U.S. Term Loans, or the Incremental U.S. Term Loans, to fund the purchase price for the acquisition of the Albéa Dispensing Business. On June 1, 2020, we borrowed $900 million of Incremental U.S. Term Loans under the Incremental Term Loan Commitment Agreement to fund the purchase price for the acquisition of the Albéa Dispensing Business. The Incremental U.S. Term Loans mature on May 30, 2024 and are repayable in installments of $90 million on each of December 31, 2021, 2022 and 2023, with the remaining outstanding principal balance to be repaid on May 30, 2024. The Incremental U.S. Term Loans initially have an Applicable Margin (as defined in the Credit Agreement) of 1.75 percent per annum in the case of Eurodollar Rate Loans (as defined in the Credit Agreement) and 0.75 percent per annum in the case of Base Rate Loans (as defined in the Credit Agreement), in both cases until the delivery of our financial statements for the fiscal quarter ending June 30, 2020. The Applicable Margin will vary between 1.25 percent to 1.75 percent per annum for Eurodollar Rate Loans and between 0.25 percent to 0.75 percent per annum for Base Rate Loans, in both cases based on our Total Net Leverage Ratio (as defined in the Credit Agreement). The Incremental U.S. Term Loans are guaranteed by the US Guarantors (as defined in the Credit Agreement) and secured on a pari passu basis by the same collateral that secures our outstanding loans under the Credit Agreement.
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Financial Instruments |
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Investments, All Other Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments | Financial Instruments The financial instruments recorded in our Condensed Consolidated Balance Sheets include cash and cash equivalents, trade accounts receivable, trade accounts payable, debt obligations and swap agreements. Due to their short-term maturity, the carrying amounts of trade accounts receivable and trade accounts payable approximate their fair market values. The following table summarizes the carrying amounts and estimated fair values of our other financial instruments at September 30, 2020:
Fair Value Measurements GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). GAAP classifies the inputs used to measure fair value into a hierarchy consisting of three levels. Level 1 inputs represent unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 inputs represent unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability. Level 3 inputs represent unobservable inputs for the asset or liability. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Financial Instruments Measured at Fair Value The financial assets and liabilities that were measured on a recurring basis at September 30, 2020 consisted of our cash and cash equivalents and derivative instruments. We measured the fair value of cash and cash equivalents using Level 1 inputs. We measured the fair value of our derivative instruments using the income approach. The fair value of our derivative instruments reflects the estimated amounts that we would pay or receive based on the present value of the expected cash flows derived from market interest rates and prices. As such, these derivative instruments were classified within Level 2. Financial Instruments Not Measured at Fair Value Our bank debt, 4¾% Senior Notes, 3¼% Senior Notes, 4⅛% Senior Notes and 2¼% Senior Notes were recorded at historical amounts in our Condensed Consolidated Balance Sheets, as we have not elected to measure them at fair value. We measured the fair value of our variable rate bank debt using the market approach based on Level 2 inputs. Fair values of the 4¾% Senior Notes, 3¼% Senior Notes, 4⅛% Senior Notes and 2¼% Senior Notes were estimated based on quoted market prices, a Level 1 input. Derivative Instruments and Hedging Activities Our derivative financial instruments were recorded in the Condensed Consolidated Balance Sheets at their fair values. Changes in fair values of derivatives are recorded in each period in earnings or comprehensive income, depending on whether a derivative is designated as part of a hedge transaction and, if it is, the type of hedge transaction. We utilize certain derivative financial instruments to manage a portion of our interest rate and natural gas cost exposures. We generally limit our use of derivative financial instruments to interest rate and natural gas swap agreements. We do not engage in trading or other speculative uses of these financial instruments. For a financial instrument to qualify as a hedge, we must be exposed to interest rate or price risk, and the financial instrument must reduce the exposure and be designated as a hedge. Financial instruments qualifying for hedge accounting must maintain a high correlation between the hedging instrument and the item being hedged, both at inception and throughout the hedged period. We utilize certain internal hedging strategies to minimize our foreign currency exchange rate risk. Net investment hedges that qualify for hedge accounting result in the recognition of foreign currency gains or losses, net of tax, in accumulated other comprehensive loss. We generally do not utilize external derivative financial instruments to manage our foreign currency exchange rate risk. Interest Rate Swap Agreements We have entered into two U.S. dollar interest rate swap agreements, each for $50.0 million notional principal amount, to manage a portion of our exposure to interest rate fluctuations. These agreements have a fixed rate of 2.878 percent and mature on March 24, 2023. The difference between amounts to be paid or received on our interest rate swap agreements is recorded in interest and other debt expense in our Condensed Consolidated Statements of Income and was not significant for the three and nine month periods ended September 30, 2020. These agreements are with a financial institution which is expected to fully perform under the terms thereof. The total fair value of our interest rate swap agreements in effect at September 30, 2020 was not significant. Natural Gas Swap Agreements We have entered into natural gas swap agreements to manage a portion of our exposure to fluctuations in natural gas prices. The difference between amounts to be paid or received on our natural gas swap agreements is recorded in cost of goods sold in our Condensed Consolidated Statements of Income and was not significant for the three and nine month periods ended September 30, 2020. These agreements are with a financial institution which is expected to fully perform under the terms thereof. The total fair value of our natural gas swap agreements in effect at September 30, 2020 was not significant. Foreign Currency Exchange Rate Risk In an effort to minimize foreign currency exchange rate risk, we have financed acquisitions of foreign operations primarily with borrowings denominated in Euros and Canadian dollars. In addition, where available, we have borrowed funds in local currency or implemented certain internal hedging strategies to minimize our foreign currency exchange rate risk related to foreign operations. We have designated the 3¼% Senior Notes and the 2¼% Senior Notes, which are Euro denominated, as net investment hedges. Foreign currency losses related to our net investment hedges included in accumulated other comprehensive loss for the three and nine months ended September 30, 2020 were $(25.2) million and $(41.4) million, respectively.
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Commitments and Contingencies |
9 Months Ended |
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Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and ContingenciesA competition authority in Germany commenced an antitrust investigation in 2015 involving the industry association for metal packaging in Germany and its members, including our metal container and closures subsidiaries in Germany. At the end of April 2018, the European Commission commenced an antitrust investigation involving the metal packaging industry in Europe including our metal container and closures subsidiaries, which should effectively close out the investigation in Germany. Given the current stage of the investigation, we cannot reasonably assess what actions may result from these investigations or estimate what costs we may incur as a result thereof. We are a party to other legal proceedings, contract disputes and claims arising in the ordinary course of our business. We are not a party to, and none of our properties are subject to, any pending legal proceedings which could have a material adverse effect on our business or financial condition.
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Retirement Benefits |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits | Retirement Benefits The components of the net periodic pension benefit credit were as follows:
The components of the net periodic other postretirement benefit credit were as follows:
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Income Taxes |
9 Months Ended |
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Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesSilgan and its subsidiaries file U.S. Federal income tax returns, as well as income tax returns in various states and foreign jurisdictions. The Internal Revenue Service, or IRS, has completed its review of the 2018 tax year with no change to our filed federal income tax return. We have been accepted into the Compliance Assurance Program for the 2019 and 2020 tax years which provides for the review by the IRS of tax matters relating to our tax return prior to filing. |
Treasury Stock |
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Sep. 30, 2020 | |
Equity [Abstract] | |
Treasury Stock | Treasury Stock On October 17, 2016, our Board of Directors authorized the repurchase by us of up to an aggregate of $300.0 million of our common stock by various means from time to time through and including December 31, 2021. During the nine months ended September 30, 2020, we repurchased an aggregate of 259,461 shares of our common stock at an average price per share of $26.71, for a total purchase price of $6.9 million. At September 30, 2020, we had approximately $105.6 million remaining under this authorization for the repurchase of our common stock. During the first nine months of 2020, we issued 582,151 treasury shares which had an average cost of $3.16 per share for restricted stock units that vested during the period. In accordance with the Silgan Holdings Inc. Amended and Restated 2004 Stock Incentive Plan, we repurchased 217,325 shares of our common stock at an average cost of $28.63 to satisfy minimum employee withholding tax requirements resulting from the vesting of such restricted stock units. We account for treasury shares using the first-in, first-out (FIFO) cost method. As of September 30, 2020, 64,226,667 shares of our common stock were held in treasury.
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Stock-Based Compensation |
9 Months Ended |
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Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based CompensationWe currently have one stock-based compensation plan in effect under which we have issued options and restricted stock units to our officers, other key employees and outside directors. During the first nine months of 2020, 453,622 restricted stock units were granted to certain of our officers, other key employees and outside directors. The fair value of these restricted stock units at the grant date was $13.6 million, which is being amortized ratably over the respective vesting period from the grant date. |
Business Segment Information |
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Segment Information | Business Segment Information Reportable business segment information was as follows:
_____________ (1)Depreciation and amortization excludes amortization of debt discount and debt issuance costs of $1.2 million and $3.3 million for the three and nine months ended September 30, 2020, respectively, and amortization of debt issuance costs of $0.8 million and $2.6 million for the three and nine months ended September 30, 2019, respectively. Total segment income is reconciled to income before income taxes as follows:
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Significant Accounting Policies (Policies) |
9 Months Ended |
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Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation. The accompanying unaudited condensed consolidated financial statements of Silgan Holdings Inc., or Silgan, have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP, for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the accompanying financial statements include all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation. The results of operations for any interim period are not necessarily indicative of the results of operations for the full year. The Condensed Consolidated Balance Sheet at December 31, 2019 has been derived from our audited consolidated financial statements at that date, but does not include all of the information and footnotes required by GAAP for complete financial statements. You should read the accompanying condensed consolidated financial statements in conjunction with our consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2019.
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Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets. We review goodwill and other indefinite-lived intangible assets for impairment as of July 1 of each year and more frequently if circumstances indicate a possible impairment. We determined that our goodwill and other indefinite-lived intangible assets were not impaired in our annual 2020 assessment performed during the third quarter. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements. In June 2016, the Financial Accounting Standards Board, or FASB, issued an accounting standards update, or ASU, that amends the guidance on the . This new standard introduces an approach, based on expected losses, to estimate credit losses on certain types of financial instruments. The new approach to estimating credit losses (referred to as the current expected credit losses model) applies to most financial assets measured at amortized cost and certain other instruments, including trade and other receivables. We adopted this new standard on January 1, 2020 using the transition method, which allowed us to recognize the effects of applying this standard as a cumulative effect to retained earnings as of January 1, 2020. As a result of the adoption of this standard, we reduced retained earnings by $0.7 million. The adoption of this standard did not have a material impact on our financial position, results of operations or cash flows. |
Revenue (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | Revenues by business segment were as follows:
Revenues by geography were as follows:
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Acquisitions (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The allocated fair value of assets acquired and liabilities assumed are summarized as follows (in thousands)
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Rationalization Charges (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Activity in Rationalization Plan Reserves | Rationalization charges by business segment were as follows:
Activity in reserves for our rationalization plans were as follows:
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Accumulated Other Comprehensive Loss (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amounts Included in Accumulated Other Comprehensive Loss, Net of Tax | Amounts included in accumulated other comprehensive loss, net of tax, were as follows:
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Inventories (Tables) |
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories consisted of the following:
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Goodwill and Other Intangibles (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | Changes in the carrying amount of goodwill were as follows:
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Schedule of Finite-Lived Intangible Assets | The components of other intangible assets, net were as follows:
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Schedule of Indefinite-Lived Intangible Assets | The components of other intangible assets, net were as follows:
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Long-Term Debt (Tables) |
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term Debt | Long-term debt consisted of the following:
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Financial Instruments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, All Other Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Carrying Amounts and Estimated Fair Values of Other Financial Instruments | The following table summarizes the carrying amounts and estimated fair values of our other financial instruments at September 30, 2020:
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Retirement Benefits (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Net Periodic Benefit Cost | The components of the net periodic pension benefit credit were as follows:
The components of the net periodic other postretirement benefit credit were as follows:
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Business Segment Information (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reportable Business Segment Information | Reportable business segment information was as follows:
_____________ (1)Depreciation and amortization excludes amortization of debt discount and debt issuance costs of $1.2 million and $3.3 million for the three and nine months ended September 30, 2020, respectively, and amortization of debt issuance costs of $0.8 million and $2.6 million for the three and nine months ended September 30, 2019, respectively.
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Reconciliation of Segment Income from Operations to Income before Income Taxes | Total segment income is reconciled to income before income taxes as follows:
|
Significant Accounting Policies - Narrative (Details) - USD ($) $ in Thousands |
9 Months Ended | |||
---|---|---|---|---|
Sep. 30, 2020 |
Jan. 01, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
|
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201613Member | |||
Reduction in retained earnings | $ (2,348,728) | $ (2,141,302) | $ (2,118,860) | |
Cumulative Effect, Period of Adoption, Adjustment | ||||
Reduction in retained earnings | $ 700 |
Revenue (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Dec. 31, 2019 |
|
Net sales | $ 1,488,499 | $ 1,321,342 | $ 3,695,353 | $ 3,441,635 | |
Trade Accounts Receivable | Unbilled Accounts Receivable | |||||
Contract assets | 80,200 | 73,400 | 80,200 | 73,400 | $ 71,100 |
North America | |||||
Net sales | 1,143,562 | 1,078,187 | 2,858,561 | 2,747,518 | |
Europe and other | |||||
Net sales | 344,937 | 243,155 | 836,792 | 694,117 | |
Metal containers | |||||
Net sales | 856,660 | 822,262 | 1,962,370 | 1,904,941 | |
Closures | |||||
Net sales | 475,105 | 353,436 | 1,242,725 | 1,072,979 | |
Plastic containers | |||||
Net sales | $ 156,734 | $ 145,644 | $ 490,258 | $ 463,715 |
Acquisitions - Schedule of Recognized Identified Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Jun. 01, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
---|---|---|---|---|
Business Acquisition [Line Items] | ||||
Goodwill | $ 1,702,463 | $ 1,142,223 | $ 1,128,151 | |
Albea Dispensing Business, Business Acquisition | ||||
Business Acquisition [Line Items] | ||||
Trade accounts receivable | $ 42,742 | |||
Inventories | 41,102 | |||
Property, plant and equipment | 192,723 | |||
Other intangible assets | 285,000 | |||
Other assets | 33,478 | |||
Trade accounts payable and accrued liabilities | (62,930) | |||
Deferred income tax liabilities | (101,795) | |||
Debt and other liabilities | (31,843) | |||
Total identifiable net assets | 398,477 | |||
Goodwill | 502,570 | |||
Cash paid at closing, net of cash acquired | $ 901,047 |
Rationalization Charges - Rationalization Charges by Business Segment (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Restructuring Cost and Reserve [Line Items] | ||||
Rationalization charges | $ 2,505 | $ 3,195 | $ 7,247 | $ 48,594 |
Metal containers | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Rationalization charges | 1,639 | 3,035 | 4,755 | 42,280 |
Closures | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Rationalization charges | 787 | 72 | 2,229 | 5,979 |
Plastic containers | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Rationalization charges | $ 79 | $ 88 | $ 263 | $ 335 |
Rationalization Charges - Narrative (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Dec. 31, 2019 |
|
Restructuring Cost and Reserve [Line Items] | ||
Restructuring reserve | $ 42,195 | $ 43,713 |
Other Restructuring | Rationalization Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Remaining expenses | 2,100 | |
Remaining cash expenditure | 3,900 | |
Annually Over Next Twenty Years | Central States Pension Plan withdrawal | ||
Restructuring Cost and Reserve [Line Items] | ||
Remaining interest accretion expense | 1,100 | |
Remaining cash expenditure | 3,100 | |
Accrued Liabilities | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring reserve | 4,800 | |
Other Liabilities | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring reserve | $ 37,400 |
Inventories (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
---|---|---|---|
Inventory Disclosure [Abstract] | |||
Raw materials | $ 294,896 | $ 286,953 | $ 275,015 |
Work-in-process | 154,157 | 134,417 | 127,590 |
Finished goods | 370,406 | 355,337 | 413,864 |
Other | 15,217 | 12,793 | 12,620 |
Inventories, gross | 834,676 | 789,500 | 829,089 |
Adjustment to value inventory at cost on the LIFO method | (156,495) | (156,495) | (125,883) |
Inventories | $ 678,181 | $ 633,005 | $ 703,206 |
Goodwill and Other Intangibles - Schedule of Goodwill (Details) $ in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2020
USD ($)
| |
Goodwill [Roll Forward] | |
Balance at December 31, 2019 | $ 1,142,223 |
Acquisitions | 520,946 |
Currency translation | 39,294 |
Balance at September 30, 2020 | 1,702,463 |
Metal containers | |
Goodwill [Roll Forward] | |
Balance at December 31, 2019 | 113,463 |
Currency translation | 2,217 |
Balance at September 30, 2020 | 115,680 |
Closures | |
Goodwill [Roll Forward] | |
Balance at December 31, 2019 | 801,776 |
Acquisitions | 520,946 |
Currency translation | 37,511 |
Balance at September 30, 2020 | 1,360,233 |
Plastic containers | |
Goodwill [Roll Forward] | |
Balance at December 31, 2019 | 226,984 |
Currency translation | (434) |
Balance at September 30, 2020 | $ 226,550 |
Goodwill and Other Intangibles - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Schedule of Intangible Assets (Excluding Goodwill) [Line Items] | ||
Definite-lived intangibles, Gross Amount | $ 766,769 | $ 461,489 |
Accumulated Amortization | (165,653) | (139,014) |
Intangible Assets, Gross | 798,909 | 493,629 |
Trade names | ||
Schedule of Intangible Assets (Excluding Goodwill) [Line Items] | ||
Indefinite-lived intangibles, Gross Amount | 32,140 | 32,140 |
Customer relationships | ||
Schedule of Intangible Assets (Excluding Goodwill) [Line Items] | ||
Definite-lived intangibles, Gross Amount | 696,003 | 422,042 |
Accumulated Amortization | (136,583) | (116,575) |
Other | ||
Schedule of Intangible Assets (Excluding Goodwill) [Line Items] | ||
Definite-lived intangibles, Gross Amount | 70,766 | 39,447 |
Accumulated Amortization | $ (29,070) | $ (22,439) |
Long-Term Debt - 2 1/4% Senior Notes (Details) - 2¼% Senior Notes |
Feb. 26, 2020 |
Sep. 30, 2020 |
---|---|---|
Debt Instrument [Line Items] | ||
Senior note interest rate (in percentage) | 2.25% | |
Debt Instrument, Redemption - Post March 1 2023 | ||
Debt Instrument [Line Items] | ||
Initial redemption price (in percentage) | 101.125% | |
Final redemption price (in percentage) | 100.00% | |
Debt Instrument, Redemption - Pre March 1 2023 | ||
Debt Instrument [Line Items] | ||
Maximum redemption percent allowed and limited to proceeds from equity offering (in percentage) | 35.00% | |
Debt redemption, price percent of principal amount, from the proceeds of certain equity offerings (in percentage) | 102.25% | |
Debt instrument, redemption price, (in percentage) | 100.00% | |
Redemption price percent if change in control occurs (in percentage) | 101.00% |
Financial Instruments - Additional Information (Details) |
3 Months Ended | 9 Months Ended |
---|---|---|
Sep. 30, 2020
USD ($)
|
Sep. 30, 2020
USD ($)
|
|
USD Interest Rate Swap Contract One | ||
Derivative [Line Items] | ||
Derivative, notional amount | $ 50,000,000.0 | $ 50,000,000.0 |
Fixed interest rate | 2.878% | 2.878% |
USD Interest Rate Swap Contract Two | ||
Derivative [Line Items] | ||
Derivative, notional amount | $ 50,000,000.0 | $ 50,000,000.0 |
Fixed interest rate | 2.878% | 2.878% |
Accumulated Translation Adjustment | ||
Derivative [Line Items] | ||
Foreign currency (losses) gains of net investment hedges included in accumulated other comprehensive loss | $ (25,200,000) | $ (41,400,000) |
Retirement Benefits - Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Pension Benefit Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 2,983 | $ 2,871 | $ 9,958 | $ 9,383 |
Interest cost | 5,816 | 7,149 | 17,236 | 21,241 |
Expected return on plan assets | (18,104) | (15,200) | (54,091) | (45,425) |
Amortization of prior service cost | 43 | 46 | 154 | 86 |
Amortization of actuarial losses | 2,993 | 4,084 | 8,862 | 12,324 |
Net periodic benefit credit | (6,269) | (1,050) | (17,881) | (2,391) |
Other Postretirement Benefit Plans, Defined Benefit | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 18 | 16 | 66 | 60 |
Interest cost | 142 | 200 | 425 | 569 |
Amortization of prior service cost | (487) | (586) | (1,454) | (1,749) |
Amortization of actuarial losses | (115) | (33) | (254) | (366) |
Net periodic benefit credit | $ (442) | $ (403) | $ (1,217) | $ (1,486) |
Stock-Based Compensation - Additional Information (Details) - Restricted Stock Units $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2020
USD ($)
shares
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Restricted stock units granted (shares) | shares | 453,622 |
Fair value of restricted stock units granted | $ | $ 13.6 |
Business Segment Information - Reportable Business Segment Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|||
Segment Reporting Information [Line Items] | ||||||
Net sales | $ 1,488,499 | $ 1,321,342 | $ 3,695,353 | $ 3,441,635 | ||
Depreciation and amortization | [1] | 58,031 | 51,875 | 160,127 | 154,151 | |
Rationalization charges | 2,505 | 3,195 | 7,247 | 48,594 | ||
Segment Income | 174,033 | 132,695 | 407,408 | 288,035 | ||
Amortization of debt issuance costs and discounts | 1,200 | 3,300 | ||||
Amortization of debt discount | 800 | 2,600 | ||||
Metal Containers | ||||||
Segment Reporting Information [Line Items] | ||||||
Net sales | 856,660 | 822,262 | 1,962,370 | 1,904,941 | ||
Depreciation and amortization | [1] | 21,008 | 21,477 | 62,034 | 64,021 | |
Rationalization charges | 1,639 | 3,035 | 4,755 | 42,280 | ||
Segment Income | 94,497 | 81,128 | 213,757 | 134,053 | ||
Closures | ||||||
Segment Reporting Information [Line Items] | ||||||
Net sales | 475,105 | 353,436 | 1,242,725 | 1,072,979 | ||
Depreciation and amortization | [1] | 27,777 | 20,847 | 69,927 | 62,345 | |
Rationalization charges | 787 | 72 | 2,229 | 5,979 | ||
Segment Income | 64,161 | 44,784 | 167,971 | 131,896 | ||
Plastic Containers | ||||||
Segment Reporting Information [Line Items] | ||||||
Net sales | 156,734 | 145,644 | 490,258 | 463,715 | ||
Depreciation and amortization | [1] | 9,207 | 9,512 | 28,046 | 27,665 | |
Rationalization charges | 79 | 88 | 263 | 335 | ||
Segment Income | 21,887 | 11,425 | 66,918 | 36,902 | ||
Corporate | ||||||
Segment Reporting Information [Line Items] | ||||||
Net sales | 0 | 0 | 0 | 0 | ||
Depreciation and amortization | [1] | 39 | 39 | 120 | 120 | |
Rationalization charges | 0 | 0 | 0 | 0 | ||
Segment Income | $ (6,512) | $ (4,642) | $ (41,238) | $ (14,816) | ||
|
Business Segment Information - Reconciliation of Segment Income to Income before Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Segment Reporting [Abstract] | ||||
Segment Income | $ 174,033 | $ 132,695 | $ 407,408 | $ 288,035 |
Interest and other debt expense | 27,725 | 28,443 | 78,532 | 83,948 |
Income before income taxes | $ 146,308 | $ 104,252 | $ 328,876 | $ 204,087 |
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