Crown Cork & Seal is a leading supplier of packaging products to consumer marketing companies around the world. World headquarters are located in Philadelphia Pennsylvania. Crown Holdings Inc. has a market cap of $4.25 billion; its shares were traded at around $26.53 with a P/E ratio of 13.5 and P/S ratio of 0.5.
Highlight of Business Operations:Financing activities used cash of $236 during the first nine months of 2009 compared to cash provided of $149 during the same period in 2008. Proceeds from long-term debt of $399 in 2009 included $388 from notes issued in May 2009 as discussed under “Liquidity” below. Payments of long-term debt of $577 in 2009 included $362 (€246) of notes purchased in a tender offer and $200 of debt satisfied through an irrevocable deposit with a trustee, also discussed under the heading “Liquidity” below. Other financing activities of $40 in 2008 represents payments received related to the settlement of foreign currency derivatives used to hedge intercompany debt obligations.
Also in September 2009, the Company made an irrevocable deposit of $212 with a trustee to satisfy and discharge all of the outstanding indebtedness with respect to the 8.0% debentures of Crown Cork & Seal Company, Inc. due 2023. The payment of $212 included $200 for the principal amount of the debentures, $9 for accrued and unpaid interest to the redemption date of October 30, 2009, and $3 for a redemption premium of 1.525% of the principal amount redeemed.
As of September 30, 2009, the Company had $668 of borrowing capacity available under its revolving credit facility, equal to the total facility of $758 less $71 of outstanding standby letters of credit and $19 of borrowings.
The Company s current sources of liquidity and borrowings expire or mature as follows – its $225 North American securitization facility in March 2010; its €120 European securitization facility in June 2010; its $758 revolving credit facility in May 2011; its €214 first priority senior secured notes in September 2011; its $742 first priority term loans in November 2012; its $500 7.625% senior notes in November 2013; its $600 7.75% senior notes in November 2015; and its $400 7.625% senior notes in May 2017.
At September 30, 2009, purchase obligations covering new agreements for raw materials and other consumables increased $128 for 2010, $355 for 2011 and $244 for 2012 above amounts provided within Part I, Item 7, “Management s Discussion and Analysis of Financial Condition and Results of Operations,” including, but not limited to, in the “Liquidity and Capital Resources” section of the Company s Annual Report on Form 10-K for the year ended December 31, 2008.
As of December 31, 2008, the Company had a valuation allowance of $246 against certain U.S. deferred tax assets that management believes will not be realized. The Company expects to realize a significant portion of its U.S. deferred tax assets but does not believe, after considering all sources of potential future income that it is more likely than not that it will have sufficient taxable income to use certain of its deferred tax assets before they expire. The valuation allowance of $246 includes $161 for benefits from state tax loss carryforwards, $54 for foreign tax credits, $26 for capital loss carryforwards, and $5 for research credits. The state tax loss carryforwards expire as follows: $7 in 2009 through 2015, $56 in 2016 through 2020, and $98 in 2021 through 2026. The foreign tax credits expire in 2016 through 2018, the capital loss carryforwards expire in 2012 and 2013, and the research credits expire in 2014 through 2019.
Read the The complete ReportCCK is in the portfolios of Jean-Marie Eveillard of Arnhold & S. Bleichroeder Advisers, LLC.