Crown Holdings, Inc. Annual Report 2019

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Crown Holdings, Inc. Segment income increased primarily due to higher sales unit volumes and lower freight costs in the Company's North America food can business and favorable product mix in the Company's equipment operations, partially offset by higher tinplate and other operating costs in the Company's global aerosol businesses that were not fully passed through in selling price. Year ended December 31, 2018 compared to 2017 Net sales increased primarily due to $67 related to the pass-through of higher tinplate costs in the North America food can business and global aerosol businesses and $12 related to the impact of foreign currency translation. Higher sales volumes in the Company's North America food can business and equipment operations were offset by lower sales unit volumes in the Company's global aerosol businesses. Segment income was comparable as the impact of higher sales unit volumes in the North America food can business and the Company's equipment operations were partially offset by higher freight costs in the North America food can business. Corporate and unallocated 2019 $ (158)

Corporate and unallocated

2018 $ (139)

2017 $ (143)

Corporate and unallocated costs increased from 2018 to 2019 primarily due to higher incentive compensation in 2019 and lower claims activity in 2018. COST OF PRODUCTS SOLD (EXCLUDING DEPRECIATION AND AMORTIZATION) Cost of products sold (excluding depreciation and amortization) increased from $9,028 in 2018 to $9,349 in 2019 primarily due to the Signode acquisition in April 2018, partially offset by $214 from the impact of foreign currency translation. Cost of products sold (excluding depreciation and amortization) increased from $7,006 in 2017 to $9,028 in 2018 primarily due to the Signode acquisition, the impact of higher raw material costs and $115 from the impact of foreign currency translation. Cost of products sold (excluding depreciation and amortization) as a percentage of net sales was 80% in 2019 and 81% in 2018 and 2017. DEPRECIATION AND AMORTIZATION Depreciation and amortization expense increased from $425 in 2018 to $490 in 2019 primarily due to the impact of an additional quarter of ownership of Signode in 2019 and higher depreciation due to recent capacity expansion. Depreciation and amortization expense increased from $247 in 2017 to $425 in 2018 primarily due to the impact of the Signode acquisition. SELLING AND ADMINISTRATIVE EXPENSE Selling and administrative expense increased from $367 in 2017 to $558 in 2018 and $631 in 2019 primarily due to the impact of the Signode acquisition. INTEREST EXPENSE Interest expense decreased from $384 in 2018 to $378 in 2019 primarily due to lower interest rates offset by higher average outstanding debt incurred to finance the Signode acquisition. Interest expense increased from $252 in 2017 to $384 in 2018 primarily due to higher outstanding debt from borrowings incurred to finance the Signode acquisition.

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