Crown Holdings Announces Intention To Settle Its U.K. Pension Plan Obligations

Rhea-AI Summary

Crown Holdings (NYSE: CCK) announced that its U.K. pension plan, the Metal Box Pension Scheme, will fully insure its liabilities with Pension Insurance Corporation. This transaction covers approximately 10,300 retirees and 2,200 deferred members. The completion of administrative processes is expected in October, with the transfer scheduled for November 2021, eliminating $2.5 billion in cash flow and earnings risk. A non-cash charge of approximately $1.3 billion is anticipated in the fourth quarter. This settlement aims to stabilize Crown's financial outlook.

Positive

• Elimination of cash flow and earnings risk associated with $2.5 billion in U.K. pension plan assets and liabilities.
• Transfer of pension obligations expected to be completed by November 2021, improving financial stability.

Negative

• A non-cash charge of approximately $1.3 billion is expected in Q4 2021, impacting short-term financials.

YARDLEY, Pa., Oct. 1, 2021 /PRNewswire/ -- Crown Holdings, Inc. (NYSE: CCK) (Crown) announced today that the Trustees of its U.K. defined benefit pension plan (the Metal Box Pension Scheme) have entered into a transaction with Pension Insurance Corporation (PIC) to fully insure all of its U.K. pension liabilities.  The transaction provides a policy which covers the benefits for approximately 10,300 retirees and 2,200 deferred members.  PIC is a specialist U.K. insurance company providing tailored pension insurance buyouts and buy-ins for U.K. defined benefit pension funds.

The intention and expectation is that the transaction will be followed by completion of administrative processes during October, which will result in the irrevocable transfer of the plan's obligations to PIC in November 2021.  Upon completion of the transfer, the Company will eliminate its cash flow and earnings risk associated with over $2.5 billion in both U.K. pension plan assets and liabilities.

The Company expects to record a charge of approximately $1.3 billion ($1.1 billion after tax) in the fourth quarter of 2021 in connection with the November plan settlement.  The charge is non-cash with the exception of a contribution to the plan of approximately $90 million to facilitate the transaction.

About Crown Holdings, Inc.
Crown Holdings, Inc., through its subsidiaries, is a leading global supplier of rigid packaging products to consumer marketing companies, as well as transit and protective packaging products, equipment and services to a broad range of end markets.  World headquarters are located in Yardley, Pennsylvania.  For more information, visit www.crowncork.com.

Cautionary Note Regarding Forward-Looking Statements
Except for historical information, all other information in this press release consists of forward-looking statements.  These forward-looking statements involve a number of risks, uncertainties and other factors, including whether the full settlement and irrevocable transfer of the Company's risk related to the plan obligations will occur in November 2021, or at all; the amount of the charge the Company will incur in connection with the plan settlement; and the impact of the transaction and plan settlement on the Company's future cash flow and earnings.  Important factors that could cause the statements made in this press release or the actual results of operations or financial condition of Crown to differ are discussed under the caption "Forward Looking Statements" in Crown's Form 10-K Annual Report for the year ended December 31, 2020 and in subsequent filings made prior to or after the date hereof.  Crown does not intend to review or revise any particular forward-looking statement in light of future events.

For more information, contact:
Thomas A. Kelly, Senior Vice President and Chief Financial Officer, (215) 698-5341
Thomas T. Fischer, Vice President, Investor Relations and Corporate Affairs, (215) 552-3720

View original content:https://www.prnewswire.com/news-releases/crown-holdings-announces-intention-to-settle-its-uk-pension-plan-obligations-301389891.html

SOURCE Crown Holdings, Inc.

FAQ

What is Crown Holdings' recent pension plan announcement?

Crown Holdings announced the full insurance of its U.K. pension liabilities with Pension Insurance Corporation, covering over 12,000 members.

When does Crown Holdings expect to complete the pension plan transfer?

Crown Holdings expects to complete the transfer of the pension plan obligations by November 2021.

What financial impact will the pension plan transfer have on Crown Holdings?

The company anticipates a non-cash charge of approximately $1.3 billion in Q4 2021 due to the pension plan settlement.

How many retirees will be affected by Crown Holdings' pension plan settlement?

Approximately 10,300 retirees and 2,200 deferred members will be covered by the pension plan settlement.

What risks will Crown Holdings eliminate with this pension plan transfer?

Crown Holdings will eliminate cash flow and earnings risk associated with $2.5 billion in U.K. pension plan assets and liabilities.