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Income
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(Exact name of Registrant as specified in its charter)
iJersey
i98-1455367
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
i83 Tower Road North
iWarmley,
BristoliBS30 8XP
iUnited Kingdom
(Address of principal executive offices)
Registrant’s telephone number, including area code:
+i44i117i9753200
Securities registered pursuant to Section 12(b) of the Act:
Title
of each class
Trading symbol(s)
Name of each exchange on which registered
iOrdinary Shares, Par Value $0.01 Per Share
iAMCR
iNew
York Stock Exchange
i1.125% Guaranteed Senior Notes Due 2027
iAUKF/27
iNew
York Stock Exchange
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. iYes☒ No
☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). iYes☒ No ☐
1
Indicate
by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer,""accelerated filer,""smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):
iLarge
Accelerated Filer
☒
Emerging Growth Company
i☐
Non-Accelerated Filer
☐
Smaller Reporting Company
i☐
Accelerated
Filer
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes i☐No ☒
Unless otherwise indicated, references to "Amcor," the "Company,""we,""our," and "us" in this Quarterly Report on Form 10-Q refer to Amcor plc and its consolidated subsidiaries.
This Quarterly Report on Form 10-Q contains certain statements that are "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are generally identified with words like "believe,""expect,""target,""project,""may,""could,""would,""approximately,""possible,""will,""should,""intend,""plan,""anticipate,""estimate,""potential,""outlook," or "continue," the negative of these words, other terms of similar meaning, or the use of future dates. Such statements are based on the current expectations of the management of Amcor and are qualified by the inherent risks and uncertainties surrounding future expectations generally. Actual results could differ materially from those currently anticipated due to a number of risks and uncertainties. None of Amcor or any of its respective directors, executive officers, or advisors, provide any representation, assurance, or guarantee that the occurrence of the events expressed or implied in any forward-looking statements will actually occur. Risks and uncertainties that could cause actual results to differ from expectations include, but are not limited to:
• changes in consumer demand
patterns and customer requirements in numerous industries;
• the loss of key customers, a reduction in their production requirements, or consolidation among key customers;
• significant competition in the industries and regions in which we operate;
• the inability to expand our current business effectively through either organic growth, including by product innovation, or acquisitions;
• the failure to successfully integrate acquisitions in the expected time frame;
• challenges to or the loss of our intellectual property rights;
• adverse impacts from the ongoing 2019 Novel Coronavirus ("COVID-19") pandemic or other similar outbreaks on Amcor and its customers, suppliers, employees, and the geographic
markets in which Amcor and its customers operate;
• challenging current and future global economic conditions;
• impact of operating internationally;
• price fluctuations or shortages in the availability of raw materials, energy, and other inputs, which could adversely affect our business;
• production, supply, and other commercial risks, including counterparty credit risks, which may be exacerbated in times of economic downturn;
• a failure or disruption in our information technology systems;
• an inability to attract and retain key personnel;
• costs and liabilities related to current and future environmental and health and safety laws and regulations;
•
labor disputes;
• the possibility that the phase out of the London Interbank Offered Rate ("LIBOR") causes our interest expense to increase;
• foreign exchange rate risk;
• an increase in interest rates;
• a significant increase in our indebtedness or a downgrade in our credit rating that could increase our borrowing costs and negatively affect our financial condition and results of operations;
• a failure to hedge effectively against adverse fluctuations in interest rates and foreign exchange rates;
• a significant write-down of goodwill and/or other intangible assets;
• our need to maintain an effective system of internal control over financial reporting;
•
an inability of our insurance policies, including our use of a captive insurance company, to provide adequate protection against all of the risks we face;
• litigation, including product liability claims, or regulatory developments;
• increasing scrutiny and changing expectations with respect to our Environmental, Social, and Governance ("ESG") policies resulting in additional costs or exposure to additional risks;
• changing government regulations in environmental, health, and safety matters;
• changes in tax laws or changes in our geographic mix of earnings; and
• our ability to develop and successfully introduce new products and to develop, acquire, and retain intellectual property rights.
These
risks and uncertainties are supplemented by those identified from time to time in our filings with the Securities and Exchange Commission, including without limitation, those described under Part I, "Item 1A - Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended June 30, 2021. You can obtain copies of Amcor’s filings with the SEC for free at the SEC’s website (www.sec.gov). Forward-looking statements included herein are made only as of the date hereof and Amcor does not undertake any obligation to update any forward-looking statements, or any other information in this communication, as a result of new information, future developments or otherwise, or to correct any inaccuracies or omissions in them which
4
become
apparent, except as expressly required by law. All forward-looking statements in this communication are qualified in their entirety by this cautionary statement.
Notes to Condensed Consolidated Financial Statements
Note 1 - iNature
of Operations and Basis of Presentation
Amcor plc ("Amcor" or the "Company") is a global packaging company that develops and produces a broad range of packaging products including flexible packaging, rigid packaging containers, specialty cartons, and closures.
iThe accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") for interim financial information.
Consistent with these requirements, this Form 10-Q does not include all the information required by U.S. GAAP for complete financial statements. It is management's opinion, however, that all material and recurring adjustments have been made that are necessary for a fair statement of its interim financial position, results of operations, and cash flows. For further information, this Form 10-Q should be read in conjunction with the audited Consolidated Financial Statements and accompanying Notes in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2021. There have been no material changes in the accounting policies followed by the Company during the current fiscal year.
iCertain
amounts in the Company's notes to unaudited condensed consolidated financial statements may not add or recalculate due to rounding.
11
Note 2 - iNew
Accounting Guidance
i
Recently Adopted Accounting Standards
In December 2019, the FASB issued updated guidance to simplify the accounting for income taxes by removing certain exceptions and improving the consistent application of U.S. GAAP in other tax accounting areas. This guidance is effective for annual reporting periods, and any interim periods within those annual periods, that begin after December 15, 2020 with early adoption
permitted. The guidance became effective for the Company on July 1, 2021 and the adoption did not have a material impact on the Company's unaudited condensed consolidated financial statements.
Accounting Standards Not Yet Adopted
In November 2021, the FASB issued an Accounting Standards Update ("ASU") 2021-10 that adds certain disclosure requirements for entities that receive government assistance. The standard is effective for annual periods beginning after December 15, 2021 with early application permitted. The
Company will adopt this guidance in fiscal year 2023 and does not expect the adoption to have a material impact on its results of operation, financial position, and disclosures.
The Company considers the applicability and impact of all ASUs issued by the FASB. The Company determined at this time that all other ASUs not yet adopted are either not applicable or are expected to have minimal impact on its results of operation, financial position, and disclosures.
12
Note
3 - iRestructuring
2019 Bemis Integration Plan
In connection with the acquisition of Bemis Company, Inc. ("Bemis"), the Company initiated restructuring activities in the fourth quarter of fiscal year 2019 aimed at integrating and optimizing the combined organization. As previously announced, the
Company continues to target realizing at least $i180 million of pre-tax synergies driven by procurement, supply chain, and general and administrative savings by the end of fiscal year 2022.
The Company's total 2019 Bemis Integration Plan pre-tax integration costs are expected to be approximately $i230
million to $i250 million. The total 2019 Bemis Integration Plan costs include approximately $i190 million to $i210
million of restructuring and related expenses, net, and $i40 million of general integration expenses. The Company estimates that net cash expenditures including disposal proceeds will be approximately $i160
million to $i170 million, of which $i40 million relates to general integration expenses.
As of December 31, 2021, the Company has incurred $i137 million in employee related expenses, $i39
million in fixed asset related expenses, $i35 million in other restructuring and $i33 million in restructuring related expenses, partially offset by a gain on disposal of a business of $i51 million.
The six months ended December 31, 2021 resulted in net cash outflows of $i30 million, of which $i28
million were payments related to restructuring and related expenditures. Cash payments of approximately $i60 million to $i65
million are expected for the balance of the fiscal year for restructuring and related expenses. The 2019 Bemis Integration Plan relates to the Flexibles segment and Corporate and is expected to be substantially completed by the end of fiscal year 2022.
iRestructuring related costs are directly attributable to restructuring activities; however, they do not qualify for special accounting treatment as exit or disposal activities.
General integration costs are not linked to restructuring. The Company believes the disclosure of restructuring related costs provides more information on the total cost of the 2019 Bemis Integration Plan. The restructuring related costs relate primarily to the closure of facilities and include costs to replace graphics, train new employees on relocated equipment, and anticipated losses on sale of closed facilities.
Other Restructuring Plans
The Company has entered into other individually immaterial restructuring plans ("Other Restructuring Plans"). The Company's
restructuring charges related to these plans were iizero/ for the three months ended December
31, 2021 and 2020, and $i1 million and $i9 million for the six months ended December 31, 2021
and 2020, respectively. The Company's total incurred restructuring charges for Other Restructuring Plans primarily relate to the Flexibles reporting segment.
Consolidated Amcor Restructuring Plans
iThe total costs incurred from the beginning of the
Company's 2019 Bemis Integration Plan and Other Restructuring Plans are as follows:
($ in millions)
2019 Bemis Integration Plan (1)
Other Restructuring Plans
Total
Restructuring and Related Expenses (1)
Fiscal year 2019 net charges to earnings
$
i48
$
i19
$
i67
Fiscal
year 2020 net charges to earnings
i60
i18
i78
Fiscal
year 2021 net charges to earnings
i68
i6
i74
Fiscal
year 2022 first quarter net charges to earnings
i7
i1
i8
Fiscal
year 2022 second quarter net charges to earnings
i10
i—
i10
Expense
incurred to date
$
i193
$
i44
$
i237
(1)Total
restructuring and related expenses include restructuring related costs from the 2019 Bemis Integration Plan of $i2 million, $i15 million, $i13 million,
$i3 million, and $i2 million for fiscal year 2019, fiscal year 2020, fiscal year 2021, first quarter of fiscal year 2022, and second quarter of fiscal year 2022, respectively.
13
An
analysis of the restructuring charges by type incurred follows:
Three Months Ended December 31,
Six Months Ended December 31,
($
in millions)
2021
2020
2021
2020
Employee costs
$
i1
$
i13
$
i3
$
i25
Fixed
asset related costs
i—
i2
i—
i3
Other
costs
i7
i4
i10
i13
Total
restructuring costs, net
$
i8
$
i19
$
i13
$
i41
iAn
analysis of the Company's restructuring plan liability follows:
The
costs related to restructuring activities have been presented on the unaudited condensed consolidated statements of income as restructuring and related expenses, net. The accruals related to restructuring activities have been recorded on the unaudited condensed consolidated balance sheets under other current liabilities.
(1)Accumulated
amortization and impairment included $ii34/ million
for December 31, 2021 and June 30, 2021, respectively, of accumulated impairment in the Other category.
(2)Other included $ii17/ million
for December 31, 2021 and June 30, 2021, respectively, of acquired intellectual property assets not yet being amortized as the related R&D projects have not yet been completed.
Amortization expenses for intangible assets were $ii45/
million during the three months ended December 31, 2021 and 2020, respectively, and $ii90/
million during the six months ended December 31, 2021 and 2020, respectively.
16
Note 6 - iiFair
Value Measurements /
The fair values of the Company’s financial assets and financial liabilities listed below reflect the amounts that would be received to sell the assets or paid to transfer the liabilities in an orderly transaction between market participants at the measurement date (exit price).
The Company’s non-derivative financial instruments primarily include cash and cash equivalents, trade receivables, trade payables, short-term debt, and long-term debt. At December
31, 2021 and June 30, 2021, the carrying value of these financial instruments, excluding long-term debt, approximated fair value because of the short-term nature of these instruments.
The carrying value of long-term debt with variable interest rates approximates its fair value. The fair value of the Company’s long-term debt with fixed interest rates is based on market prices, if available, or expected future cash flows discounted at the current interest rate for financial liabilities with similar risk profiles.
iThe
carrying values and estimated fair values of long-term debt with fixed interest rates (excluding capital leases) were as follows:
Total long-term debt with fixed interest rates (excluding commercial paper and finance leases)
$
i3,595
$
i3,769
$
i4,325
$
i4,558
Assets
and Liabilities Measured and Recorded at Fair Value on a Recurring Basis
Additionally, the Company measures and records certain assets and liabilities, including derivative instruments and contingent purchase consideration liabilities, at fair value. iThe following table summarizes the fair value of these instruments, which are measured
at fair value on a recurring basis, by level, within the fair value hierarchy:
The
fair value of the commodity contracts was determined using a discounted cash flow analysis based on the terms of the contracts and observed market forward prices discounted at a currency-specific rate. Forward exchange contract fair values were determined based on quoted prices for similar assets and liabilities in active markets using inputs such as currency rates and forward points. The fair value of the interest rate swaps was determined using a discounted cash flow method based on market-based swap yield curves, taking into account current interest rates.
Contingent purchase consideration liabilities arise from business acquisitions.
As of December 31, 2021, the Company's contingent purchase consideration liabilities consist of a $i10 million liability that is contingent on future royalty income generated by Discma AG, a subsidiary acquired in March 2017, and a $i6 million
balance relating to consideration for small business acquisitions where payments are contingent on the Company vacating a certain property or performance criteria. The fair value of the contingent purchase consideration liabilities was determined for each arrangement individually. The fair value was determined using the income approach with significant inputs that are not observable in the market. Key assumptions include the discount rates consistent with the level of risk of achievement and probability adjusted financial projections. The expected outcomes are recorded at net present value, which requires adjustment over the life for changes in risks and probabilities. Changes arising from modifications in forecasts related to contingent consideration are expected to be immaterial.
The fair value of contingent purchase
consideration liabilities is included in other current liabilities and other non-current liabilities in the unaudited condensed consolidated balance sheets.
Assets and Liabilities Measured and Recorded at Fair Value on a Nonrecurring Basis
In addition to assets and liabilities that are recorded at fair value on a recurring basis, the Company records assets and liabilities at fair value on a nonrecurring basis. The Company measures certain assets, including technology intangible assets, equity method and other investments, and other long-lived and intangible assets at fair value on a nonrecurring basis when they are deemed to be other than temporarily impaired. The fair
values of these assets are determined, when applicable, based on valuation techniques using the best information available, and may include quoted market prices, market comparables, and discounted cash flow projections.
Following a commitment to sell non-core assets during the three and six months ended December 31, 2021, the Company has recorded an expense of $i9 million,
predominantly to adjust the long-lived assets to their fair value less cost to sell as determined in reference to the selling price in the signed sale and purchase agreement. During the six months ended December 31, 2021, long-lived assets with a carrying value of $i12 million were written down to a fair value of izero
as the Company's Durban, South Africa, manufacturing facility was destroyed in a fire as the result of general civil unrest. In addition, other long-lived assets in South Africa, with a carrying amount of $i8 million, were written down to their estimated fair value of $i4 million
using level 3 inputs.
The Company sold its equity method investment in AMVIG Holdings Limited ("AMVIG") on September 30, 2020. Refer to Note 15, "Disposals."
The Company tests indefinite-lived intangibles for impairment when facts and circumstances indicate the carrying value may not be recoverable from their undiscounted cash flows. During the six months ended December 31, 2021, and 2020, there were no triggering events and iino/
indefinite-lived intangible impairment charges recorded.
18
Note 7 - iiDerivative
Instruments /
The Company periodically uses derivatives and other financial instruments to hedge exposures to interest rate, commodity price, and currency risks. The Company does not hold or issue financial instruments for speculative or trading purposes. For hedges that meet the hedge accounting criteria, the Company, at inception, formally designates and documents the instrument as a fair value hedge or a cash flow hedge of a specific underlying exposure. On an ongoing basis, the
Company assesses and documents that its hedges have been and are expected to continue to be highly effective.
Interest Rate Risk
The Company’s policy is to manage exposure to interest rate risk by maintaining a mixture of fixed-rate and variable-rate debt, monitoring global interest rates and, where appropriate, hedging floating interest rate exposure or debt at fixed interest rates through various interest rate derivative instruments, including, but not limited to, interest rate swaps, cross-currency interest rate swaps, and interest rate locks. For interest rate swaps that are accounted for as fair value hedges, the gains and losses related to the changes in the fair value of the interest rate swaps are included in interest expense and offset changes
in the fair value of the hedged portion of the underlying debt that are attributable to the changes in market interest rates. Changes in the fair value of interest rate swaps that have not been designated as hedging instruments are reported in the accompanying unaudited condensed consolidated statements of income under other non-operating income, net.
During December 2021, the Company entered into an aggregate $i250 million notional
amount of receive-fixed/pay-variable interest rate swaps, which will mature on May 15, 2028. These swaps were designated as a fair value hedge against i50% of $i500 million
of principal on the i4.50% U.S. dollar notes due in May 2028. Also during December 2021, we settled $i100 million of a receive-fixed/pay-variable interest rate swap as a result of the full
redemption of $i275 million i5.95% U.S. private placement notes at maturity. This interest rate swap was designated as a fair value hedge at inception.
In
July 2021, the Company terminated $i400 million of its receive-fixed/pay-variable interest rate swaps that were designated as fair value hedges and received $i2 million
in net proceeds. This termination was in association with the full redemption of the $i400 million i4.50% U.S. dollar notes due October 2021, completed on July
15, 2021. In July 2021, the Company also terminated an aggregate amount of €i300 million (equivalent of $i357 million)
receive-fixed/pay-variable interest rate swaps and received €i13 million (equivalent of $i15 million)
in net proceeds. These interest rate swaps, which were to mature in March 2023, were designated as fair value hedges against €i300 million of principal on the i2.75% Euro bonds due March
2023. The gain on the termination of the aforementioned swaps is deferred and is being amortized to interest income over the remaining contractual term of the i2.75% Euro bonds due March 2023.
As of December 31, 2021, and June 30, 2021, the total notional amount of the Company’s receive-fixed/pay-variable interest rate swaps
accounted for as fair value hedges was $i650 million and $i1,257 million, respectively.
Foreign Currency Risk
The
Company manufactures and sells its products and finances its operations in a number of countries throughout the world and, as a result, is exposed to movements in foreign currency exchange rates. The purpose of the Company’s foreign currency hedging program is to manage the volatility associated with the changes in exchange rates.
To manage this exchange rate risk, the Company utilizes forward contracts. Contracts that qualify for hedge accounting are designated as cash flow hedges of certain forecasted transactions denominated in foreign currencies.
The effective portion of the changes in fair value of these instruments is reported in accumulated other comprehensive loss ("AOCI") and reclassified into earnings in the same financial statement line item and in the same period or periods during which the related hedged transactions affect earnings. The ineffective portion is recognized in earnings over the life of the hedging relationship in the same unaudited condensed consolidated statements of income line item as the underlying hedged item. Changes in the fair value of forward contracts that have not been designated as hedging instruments are reported in the accompanying unaudited condensed consolidated statements of income.
Certain raw materials used in the Company's production processes are subject to price volatility caused by weather, supply conditions, political and economic variables, and other unpredictable factors. The Company's policy is to minimize
19
exposure to price volatility by passing through the commodity price risk to customers, including through the use of fixed price swaps. The
Company purchases on behalf of customers fixed price commodity swaps to offset the exposure of price volatility on the underlying sales contracts. These instruments are cash closed out on maturity and the related cost or benefit is passed through to customers. Information about commodity price exposure is derived from supply forecasts submitted by customers and these exposures are hedged by a central treasury unit. Changes in the fair value of commodity hedges are recognized in AOCI. The cumulative amount of the hedge is recognized in the unaudited condensed consolidated statements of income when the forecasted transaction is realized.
iThe
Company had the following outstanding commodity contracts to hedge forecasted purchases:
Certain
derivative financial instruments are subject to master netting arrangements and are eligible for offset. The Company has made an accounting policy election not to offset the fair values of these instruments within the unaudited condensed consolidated balance sheets.
iThe following tables provide the effects
of derivative instruments on AOCI and in the unaudited condensed consolidated statements of income:
Location of Gain/(Loss) Reclassified from AOCI into Income (Effective
Portion)
Gain/(Loss) Reclassified from AOCI into Income (Effective Portion)
Location
of (Loss) Recognized in the Unaudited Condensed Consolidated Statements of Income
(Loss) Recognized in Income for Derivatives in Fair Value Hedging Relationships
Three Months Ended December 31,
Six Months Ended December 31,
($ in millions)
2021
2020
2021
2020
Derivatives
in fair value hedging relationships
Interest rate swaps
Interest expense
$
(i3)
$
(i8)
$
(i7)
$
(i9)
Total
$
(i3)
$
(i8)
$
(i7)
$
(i9)
/
21
Note
8 - iComponents of Net Periodic Benefit Cost
iNet periodic
benefit cost for benefit plans included the following components:
Three Months Ended December 31,
Six Months Ended December 31,
($ in millions)
2021
2020
2021
2020
Service
cost
$
i6
$
i6
$
i12
$
i12
Interest
cost
i10
i10
i21
i20
Expected
return on plan assets
(i17)
(i15)
(i33)
(i30)
Amortization
of actuarial loss
i2
i2
i3
i4
Amortization
of prior service credit
(i1)
i—
(i2)
i—
Settlement
costs
i3
i—
i3
i—
Net
periodic benefit cost
$
i3
$
i3
$
i4
$
i6
iService
cost is included in operating income. All other components of net periodic benefit cost other than service cost are recorded within other non-operating income, net.
On October 12, 2021, the Company contracted with Pacific Life Insurance Company to purchase a group annuity contract and to transfer $i186 million
of its pension plan assets and related benefit obligations. This transaction required a remeasurement of the pension plan assets and obligations and resulted in the recognition of a $i3 million non-cash pension settlement loss in the three and six months ended December 31, 2021.
22
Note
9 - iDebt
On December 15, 2021, the Company redeemed U.S. private placement notes of a principal amount of $i275 million
at maturity using the proceeds from the commercial paper program. The notes carried an interest rate of i5.95%.
On July 15, 2021, the Company redeemed U.S. dollar notes of a principal amount of $i400 million.
The notes had a contractual maturity of October 15, 2021 and carried an interest rate of i4.50%.
23
Note
10 - iiIncome Taxes /
The
provision for income taxes for the three and six months ended December 31, 2021 and 2020 is based on the Company’s estimated annual effective tax rate for the respective fiscal years, and is applied on income before income taxes and equity in income of affiliated companies, and adjusted for specific items that are required to be recognized in the period in which they are incurred.
The effective tax rate for the three months ended December 31, 2021 increased by i1.1
percentage points compared to the three months ended December 31, 2020 from i19.9% to i21.0% primarily due to timing
of discrete events in the corresponding periods, including benefits on integration and restructuring costs in the prior period and changes to the taxability of certain items. For the six months ended December 31, 2021 and 2020, the effective tax rate was ii22.3/%.
24
Note
11 - iShareholders' Equity
iThe changes in ordinary and treasury shares during the
six months ended December 31, 2021 and 2020 were as follows:
(1)During
the six months ended December 31, 2020, the Company recorded a gain on disposal of AMVIG and other non-core businesses. Upon completion of the disposals, $i25 million of accumulated foreign currency translation was transferred from accumulated other comprehensive loss to earnings. Refer to Note 15, "Disposals," for more information on disposals.
26
Note
12 - iiSegments /
The
Company's business is organized and presented in the iitwo/
reportable segments outlined below:
Flexibles: Consists of operations that manufacture flexible and film packaging in the food and beverage, medical and pharmaceutical, fresh produce, snack food, personal care, and other industries.
Rigid Packaging: Consists of operations that manufacture rigid containers for a broad range of predominantly beverage and food products, including carbonated soft drinks, water, juices, sports drinks, milk-based beverages, spirits and beer, sauces, dressings, spreads, and personal care items, and plastic caps for a wide variety of applications.
Other consists of the Company's undistributed corporate expenses including executive
and functional compensation costs, equity method and other investments, intercompany eliminations, and other business activities.
The accounting policies of the reportable segments are the same as those in the unaudited condensed consolidated financial statements.
27
iThe
following table presents information about reportable segments:
Three Months Ended December 31,
Six Months Ended December 31,
($ in millions)
2021
2020
2021
2020
Sales
including intersegment sales
Flexibles
$
i2,713
$
i2,450
$
i5,347
$
i4,850
Rigid
Packaging
i794
i654
i1,580
i1,352
Other
i—
i—
i—
i—
Total
sales including intersegment sales
i3,507
i3,104
i6,927
i6,202
Intersegment
sales
Flexibles
i—
i1
i—
i2
Rigid
Packaging
i—
i—
i—
i—
Other
i—
i—
i—
i—
Total
intersegment sales
i—
i1
i—
i2
Net
sales
$
i3,507
$
i3,103
$
i6,927
$
i6,200
Adjusted
earnings before interest and taxes ("Adjusted EBIT")
Flexibles
$
i352
$
i341
$
i691
$
i653
Rigid
Packaging
i55
i62
i117
i134
Other
(i19)
(i18)
(i39)
(i45)
Adjusted
EBIT
i388
i385
i769
i743
Less:
Material restructuring programs (1)
(i10)
(i25)
(i17)
(i39)
Less:
Material acquisition costs and other (2)
i—
(i4)
(i2)
(i13)
Less:
Amortization of acquired intangible assets from business combinations (3)
(i41)
(i41)
(i82)
(i82)
Less:
Impact of hyperinflation (4)
(i2)
(i6)
(i4)
(i11)
Add/(Less):
Net gain/(loss) on disposals (5)
(i9)
i—
(i9)
i9
Add/(Less):
Property and other gains/(losses), net (6)
i1
i—
(i27)
i—
Less:
Pension settlement (7)
(i3)
i—
(i3)
i—
Earnings
before interest and taxes ("EBIT")
i324
i310
i625
i608
Interest
income
i5
i4
i10
i7
Interest
expense
(i39)
(i37)
(i79)
(i77)
Equity
in income of affiliated companies, net of tax
i—
i—
i—
(i19)
Income
before income taxes and equity in income of affiliated companies
$
i290
$
i277
$
i556
$
i519
(1)Material
restructuring programs includes restructuring and related expenses for the 2019 Bemis Integration Plan for the three and six months ended December 31, 2021 and for the 2018 Rigid Packaging Restructuring Plan and the 2019 Bemis Integration Plan for the three and six months ended December 31, 2020. Refer to Note 3, "Restructuring," for more information about the Company's restructuring activities.
(2)Includes costs associated with the Bemis transaction.
(3)Amortization of acquired intangible assets from business combinations includes amortization expenses related to all acquired intangible assets from past acquisitions.
(4)Impact
of hyperinflation includes the adverse impact of highly inflationary accounting for subsidiaries in Argentina where the functional currency was the Argentine Peso.
(5)Net gain/(loss) on disposals for the three and six months ended December 31, 2021 includes an expense of $i9 million triggered by a commitment to sell non-core assets. Refer to Note 6, "Fair Value Measurements"
for more information. The six months ended December 31, 2020 includes the gain realized upon the disposal of AMVIG and the loss upon disposal of other non-core businesses not part of material restructuring programs. Refer to Note 15, "Disposals," for more information about the Company's disposals.
(6)Property and other gains/(losses), net, includes property and related business losses primarily associated with the destruction of the Company's Durban, South Africa, facility during general civil unrest in July 2021, net of insurance recovery deemed probable for incurred losses.
(7)Pension settlement for the
three and six months ended December 31, 2021 relates to the purchase of a group annuity contract and transfer of pension plan assets and related benefit obligations. Refer to Note 8, "Components of Net Periodic Benefit Cost" for more information.
28
iThe
following tables disaggregate net sales, excluding intersegment sales, by geography in which the Company operates based on manufacturing or selling operations:
The
Company applies the two-class method when computing its earnings per share ("EPS"), which requires that net income per share for each class of share be calculated assuming all of the Company's net income is distributed as dividends to each class of share based on their contractual rights.
iBasic EPS is computed by dividing net income available to ordinary shareholders by
the weighted-average number of ordinary shares outstanding, after excluding the ordinary shares to be repurchased using forward contracts. Diluted EPS includes the effects of share options, restricted shares, performance rights, performance shares, and share rights, if dilutive.
Three
Months Ended December 31,
Six Months Ended December 31,
(in millions, except per share amounts)
2021
2020
2021
2020
Numerator
Net
income attributable to Amcor plc
$
i225
$
i219
$
i427
$
i417
Distributed
and undistributed earnings attributable to shares to be repurchased
(i1)
(i1)
(i1)
(i1)
Net
income available to ordinary shareholders of Amcor plc—basic and diluted
$
i224
$
i218
$
i426
$
i416
Denominator
Weighted-average
ordinary shares outstanding
i1,523
i1,562
i1,528
i1,562
Weighted-average
ordinary shares to be repurchased by Amcor plc
(i3)
(i2)
(i4)
(i2)
Weighted-average
ordinary shares outstanding for EPS—basic
i1,520
i1,560
i1,524
i1,560
Effect
of dilutive shares
i4
i10
i4
i7
Weighted-average
ordinary shares outstanding for EPS—diluted
i1,524
i1,570
i1,528
i1,568
Per
ordinary share income
Basic
earnings per ordinary share
$
i0.148
$
i0.140
$
i0.280
$
i0.267
Diluted
earnings per ordinary share
$
i0.148
$
i0.139
$
i0.279
$
i0.265
Note:
Per share amounts are computed independently for each of the quarters presented. The sum of the quarters may not equal the total year amount due to the impact of changes in average quarterly shares outstanding and all other quarterly amounts may not equal the total year due to rounding.
Certain outstanding share options were excluded from the diluted earnings per share calculation because they were anti-dilutive. The excluded share options for the three and six months ended December 31, 2021 represented an aggregate of i9
million and i5 million shares, respectively. The excluded share options for three and six months ended December 31, 2020 represented an aggregate of i0
million and i11 million shares, respectively.
30
Note 14 - iContingencies
and Legal Proceedings
Contingencies - Brazil
The Company's operations in Brazil are involved in various governmental assessments and litigation, principally related to claims for excise and income taxes. The Company vigorously defends its positions and believes it will prevail on most, if not all, of these matters. The Company does not believe that the ultimate resolution of these matters will materially impact the Company's consolidated results of operations, financial position, or cash flows.
Under customary local regulations, the Company's Brazilian subsidiaries may need to post cash or other collateral, if a challenge to any administrative assessment proceeds to the Brazilian court system. However, the level of cash or collateral already pledged or potentially required to be pledged would not significantly impact the Company's liquidity. At December 31, 2021 and June 30, 2021, the Company had recorded accruals of $ii11/
million, included in other non-current liabilities. The Company has estimated a reasonably possible loss exposure in excess of the accrual of $i18 million and $i17
million at December 31, 2021 and June 30, 2021, respectively. The litigation process is subject to many uncertainties and the outcome of individual matters cannot be accurately predicted. The Company routinely assesses these matters as to probability of ultimately incurring a liability and records the best estimate of the ultimate loss in situations where the likelihood of an ultimate loss is probable. The Company's assessments are based on its knowledge and experience, but the ultimate outcome of any of these matters may differ from the Company's estimates.
As
of December 31, 2021, the Company has provided letters of credit of $i34 million, judicial insurance of $i1
million, and deposited cash of $i10 million with the courts to continue to defend the cases.
Contingencies - Environmental Matters
The Company, along with others, has been identified as a potentially responsible party ("PRP") at several waste disposal sites under U.S. federal and related state environmental statutes and regulations and may face potentially material
environmental remediation obligations. While the Company benefits from various forms of insurance policies, actual coverage may not, or may only partially, cover the total potential exposures. The Company has recorded aggregate accruals of $i17 million for its share of estimated future remediation costs at these sites.
In
addition to the matters described above, the Company has also recorded aggregate accruals of $i48 million for potential liabilities for remediation obligations at various worldwide locations that are owned or operated by the Company, or were formerly owned or operated.
While the
Company believes that its accruals are adequate to cover its future obligations, there can be no assurance that the ultimate payments will not exceed the accrued amounts. Nevertheless, based on the available information, the Company does not believe that its potential environmental obligations will have a material adverse effect upon its liquidity, results of operations, or financial condition.
Other Matters
In the normal course of business, the Company is subject to legal proceedings, lawsuits, and other claims. While the potential financial impact with respect to these ordinary course matters is subject to many factors and uncertainties, management believes that any
financial impact to the Company from these matters, individually and in the aggregate, would not have a material adverse effect on the Company's financial position or results of operation.
31
Note 15 - iDisposals
During
the first quarter of fiscal year 2021, the Company disposed of an equity method investment and other non-core businesses. The Company completed the sale of the equity method investment in AMVIG on September 30, 2020, realizing a net gain of $i15 million, which was recorded in the line equity in income of affiliated companies, net of tax.
The Company also completed the disposal of itwo non-core businesses in India and Argentina in the Flexibles segment during the first quarter of fiscal 2021, recording a loss on sale of $i6 million,
which was primarily driven by the reclassification of cumulative translation adjustments through the income statements that had previously been recorded in other comprehensive income.
32
Note 16 - iSubsequent Events
On
February 1, 2022, the Company's Board of Directors declared a quarterly cash dividend of $i0.12 per share to be paid on March 15, 2022 to shareholders of record as of February 23, 2022. Amcor has received a waiver from the Australian Securities Exchange ("ASX") settlement operating rules, which will allow Amcor to defer processing conversions
between ordinary share and CHESS Depositary Instrument ("CDI") registers from February 22, 2022 to February 23, 2022, inclusive.
On February 1, 2022, the Company's Board of Directors approved a $i200 million
buyback of ordinary shares and Chess Depositary Instruments ("CDIs") in addition to the $i400 million buyback approved in August 2021. Pursuant to this program, purchases of the Company's ordinary shares and CDIs will be made subject to market conditions and at prevailing market prices, through open market purchases. The Company
expects to complete the share buyback in fiscal year 2022; however, the timing, volume and nature of repurchases may be amended, suspended or discontinued at any time.
33
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Management’s Discussion and Analysis ("MD&A") should be read in conjunction with the Financial Statements and Notes to Condensed Consolidated
Financial Statements. Throughout the MD&A, amounts and percentages may not recalculate due to rounding.
Summary of Financial Results
Three
Months Ended December 31,
Six Months Ended December 31,
($ in millions)
2021
2020
2021
2020
Net sales
$
3,507
100.0
%
$
3,103
100.0
%
$
6,927
100.0
%
$
6,200
100.0
%
Cost
of sales
(2,862)
(81.6
%)
(2,452)
(79.0
%)
(5,632)
(81.3
%)
(4,895)
(79.0
%)
Gross
profit
645
18.4
%
651
21.0
%
1,295
18.7
%
1,305
21.0
%
Operating
expenses:
Selling, general, and administrative expenses
(303)
(8.6
%)
(308)
(9.9
%)
(616)
(8.9
%)
(637)
(10.3
%)
Research
and development expenses
(23)
(0.7
%)
(23)
(0.7
%)
(48)
(0.7
%)
(49)
(0.8
%)
Restructuring
and related expenses, net
(10)
(0.3
%)
(23)
(0.7
%)
(18)
(0.3
%)
(46)
(0.7
%)
Other
income, net
13
0.4
%
10
0.3
%
5
0.1
%
10
0.2
%
Operating
income
322
9.2
%
307
9.9
%
618
8.9
%
583
9.4
%
Interest
income
5
0.1
%
4
0.1
%
10
0.1
%
7
0.1
%
Interest
expense
(39)
(1.1
%)
(37)
(1.2
%)
(79)
(1.1
%)
(77)
(1.2
%)
Other
non-operating income, net
2
0.1
%
3
0.1
%
7
0.1
%
6
0.1
%
Income
before income taxes and equity in income of affiliated companies
290
8.3
%
277
8.9
%
556
8.0
%
519
8.4
%
Income
tax expense
(61)
(1.7
%)
(55)
(1.8
%)
(124)
(1.8
%)
(116)
(1.9
%)
Equity
in income of affiliated companies, net of tax
—
—
%
—
—
%
—
—
%
19
0.3
%
Net
income
$
229
6.5
%
$
222
7.2
%
$
432
6.2
%
$
422
6.8
%
Net
income attributable to non-controlling interests
(4)
(0.1
%)
(3)
(0.1
%)
(5)
(0.1
%)
(5)
(0.1
%)
Net
income attributable to Amcor plc
$
225
6.4
%
$
219
7.1
%
$
427
6.2
%
$
417
6.7
%
34
Overview
Amcor
is a global leader in developing and producing responsible packaging for food, beverage, pharmaceutical, medical, home and personal-care, and other products. We work with leading companies around the world to protect their products and the people who rely on them, differentiate brands, and improve supply chains through a range of flexible and rigid packaging, specialty cartons, closures, and services. We are focused on making packaging that is increasingly light-weighted, recyclable and reusable, and made using an increasing amount of recycled content. During fiscal year 2021, Amcor generated $12.9 billion in sales from operations.
Significant Items Affecting the Periods Presented
Impact of COVID-19
The
ongoing 2019 Novel Coronavirus ("COVID-19") pandemic has resulted in a period of historic uncertainty and challenges with the extent and severity of the pandemic continuing to fluctuate among the various regions in which we operate. Our business is almost entirely exposed to end markets which have demonstrated the same resilience experienced through past economic cycles. Our operations have been largely recognized as 'essential' by governments and authorities around the world given the role we play in the supply chains for critical food and healthcare products. Our scale and global footprint has enabled us to collaborate with customers and suppliers to navigate changes in demand and continue to service our customers. In dealing with the exceptional challenges posed by COVID-19, we have established three guiding principles focusing on the health and safety of our employees, keeping our operations running, and contributing to relief efforts in our communities.
Health
and Safety
Our commitment to the health and safety of our employees remains our first priority. Our rigorous precautionary measures include global and regional response teams that maintain contact with authorities and experts to actively manage the situation, restrictions on company travel, quarantine protocols for employees who may have had exposure or have symptoms, frequent disinfecting of our locations, and other measures designed to help protect employees, customers, and suppliers. We expect to continue to evaluate our response and related precautions until the COVID-19 pandemic has been resolved as a public health crisis.
Operations
To support our business partners, we have instituted business continuity plans in each of our operations and offices globally which address
infection prevention measures, incident response, return to work protocols, and supply chain risks. We have experienced minimal disruptions to our operations to date as we have largely been deemed as providing essential services. Our facilities have largely been exempt from government mandated closure orders and while governmental measures may be modified, we expect that our facilities will remain operational given the essential products we supply. However, despite our best efforts to contain the impact in our facilities, it remains possible that significant disruptions could occur as a result of the pandemic, including temporary closures of our facilities.
Contributions to Our Communities
To support our local communities, we launched a global program to help mitigate the impact of COVID-19 by donating food and healthcare packaging products
and by funding local community initiatives to improve access to healthcare, education or food, and other essential products.
Looking Ahead
We continue to believe we are well-positioned to meet the challenges of the ongoing COVID-19 pandemic. However, we cannot reasonably estimate the duration and severity of this pandemic or its ultimate impact on the global economy and our operations and financial results. Globally, many governments continue to place restrictions on their citizens in reaction to the ongoing pandemic and vaccination rates are not at a level in many regions to prevent further spread of COVID-19. The ultimate near-term impact of the pandemic on our business will depend on the extent and nature of any future disruptions across the supply chain, the duration of social distancing measures and other government imposed restrictions,
as well as the nature and pace of macroeconomic recovery in key global economies.
35
Raw Material and Supply Chain Trends
During the first half of fiscal year 2022, we continued to experience supply shortages and price volatility of certain resins and raw materials in both of our reportable segments as a result of market dynamics that first materialized in the second half of fiscal year 2021. While our teams have executed well through the unprecedented supply challenges to meet customer requirements, the increased supply chain disruptions did result in an inability
to fulfill our complete order book in the first half of the fiscal year 2022. The underlying causes for the volatility can be attributed to a variety of factors, including the ongoing impacts of the COVID-19 pandemic resulting in labor shortages and transportation constraints, and energy shortages and weather disruptions impacting raw material supply in certain regions. The complex factors driving ongoing market volatility are not expected to abate in the near term. We will continue to work closely with our suppliers and customers, leveraging our global capabilities and expertise to work through supply and other resulting issues.
South Africa Fire
On July 13, 2021, our Durban, South Africa, manufacturing facility was destroyed by fire associated with general civil unrest. The facility
employed 350 individuals and no employees were injured as the facility had been closed in advance of the disturbance. In the first quarter of fiscal year 2022, we recorded $43 million related to inventory and property and equipment losses from the fire and other related expenses. We have insurance for the majority of property and other losses from the fire and have recorded an insurance receivable of $20 million for incurred losses where reimbursement is deemed probable. While we expect to recover additional insurance proceeds, the timing and extent of recovery is currently unknown. No further material expenses related to this event are expected.
2019 Bemis Integration Plan
In connection with the acquisition of Bemis, we initiated restructuring activities in the fourth quarter of fiscal year 2019 aimed at integrating and optimizing
the combined organization. As previously announced, we continue to target realizing at least $180 million of pre-tax synergies driven by procurement, supply chain, and general and administrative savings by the end of fiscal year 2022.
Our total 2019 Bemis Integration Plan pre-tax integration costs are expected to be approximately $230 million to $250 million. The total 2019 Bemis Integration Plan costs include approximately $190 million to $210 million of restructuring and related expenses, net, and $40 million of general integration expenses. We estimate that net cash expenditures including disposal proceeds will be approximately $160 million to $170 million, of which $40 million relates to general integration expense. As of December 31, 2021, we have incurred $137 million in employee related expenses, $39 million in fixed asset related expenses, $35
million in other restructuring and $33 million in restructuring related expenses, partially offset by a gain on disposal of a business of $51 million. The six months ended December 31, 2021 resulted in net cash outflows of $30 million, of which $28 million were payments related to restructuring and related expenditures. Cash payments of approximately $60 million to $65 million are expected for the balance of the fiscal year for restructuring and related expenses. The 2019 Bemis Integration Plan relates to the Flexibles segment and Corporate and is expected to be substantially completed by the end of fiscal year 2022.
Restructuring related costs are directly attributable to restructuring activities; however, they do not qualify for special accounting treatment as exit or disposal activities. General integration costs are not linked to restructuring. We believe
the disclosure of restructuring related costs provides more information on the total cost of the 2019 Bemis Integration Plan. The restructuring related costs relate primarily to the closure of facilities and include costs to replace graphics, train new employees on relocated equipment and anticipated losses on sale of closed facilities.
We sold our equity method investment in AMVIG on September 30, 2020, realizing a net gain of $15 million, which was recorded in equity in income of affiliated companies, net of tax in the unaudited condensed consolidated statements of income.
36
Highly
Inflationary Accounting
We have subsidiaries in Argentina that historically had a functional currency of the Argentine Peso. As of June 30, 2018, the Argentine economy has been designated as highly inflationary for accounting purposes. Accordingly, beginning July 1, 2018, we began reporting the financial results of our Argentine subsidiaries with a functional currency of the Argentine Peso at the functional currency of the parent, which is the U.S. dollar. Highly inflationary accounting in the three months ended December 31, 2021 and 2020
resulted in a negative impact of $2 million and $6 million, respectively, and $4 million and $11 million in the six months ended December 31, 2021 and 2020, respectively, in foreign currency transaction losses that was reflected in the unaudited condensed consolidated statements of income.
Net
sales increased by $404 million, or 13%, to $3,507 million for the three months ended December 31, 2021, from $3,103 million for the three months ended December 31, 2020. Excluding the impact of disposed and ceased operations of $24 million, or (0.8%), negative currency impacts of $43 million, or (1.4%), and pass-through of raw material costs of $365 million, or 11.8%, the increase in net sales for the three months ended December 31, 2021 was $106 million or 3.4%, driven by favorable volumes of 1.5% and favorable price/mix of 1.9%.
Net income attributable to Amcor plc increased by $6 million, or 2.7%, to $225 million for the three months ended December 31, 2021, from $219 million for the three months ended
December 31, 2020 mainly as a result of lower selling, general, and administrative expenses and restructuring and related expenses, net.
Diluted earnings per share ("Diluted EPS") increased to $0.148, or by 6.5%, for the three months ended December 31, 2021, from $0.139 for the three months ended December 31, 2020, with the net income attributable to ordinary shareholders of Amcor plc increasing by 2.7% and the diluted weighted average number of shares outstanding decreasing 2.9% for the three months ended December 31, 2021 compared to the three months ended December 31, 2020. The decrease in the diluted weighted average number of shares outstanding
was due to repurchase of shares under announced share buyback programs.
Segment Results of Operations
Flexibles Segment
The Flexibles reportable segment develops and supplies flexible packaging globally.
Three Months Ended December 31,
($ in millions)
2021
2020
Net
sales including intersegment sales
$
2,713
$
2,450
Adjusted EBIT
352
341
Adjusted EBIT as a percentage of net sales
13.0
%
13.9
%
Net
sales including intersegment sales increased by $263 million, or 10.7%, to $2,713 million for the three months ended December 31, 2021, from $2,450 million for the three months ended December 31, 2020. Excluding the impact of disposed and ceased operations of $24 million, or (1%), negative currency impacts of $40 million, or (1.6%), and pass-through of raw material costs of $270 million, or 11%, the increase in net sales including intersegment sales for the three months ended December 31, 2021, was $57 million, or 2.3%, driven by favorable price/mix of 1.6% and favorable volumes of 0.7%.
Adjusted earnings before interest and tax ("Adjusted EBIT") increased by $11 million, or 3.2%, to $352 million for the three months ended December
31, 2021, from $341 million for the three months ended December 31, 2020. Excluding the impact of disposed and ceased operations of $2 million, or (0.6%), negative currency impacts of $5 million, or (1.4%), the increase in Adjusted EBIT for the three months ended December 31, 2021, was $18 million, or 5.2%, driven by favorable volumes of 3.0%, plant cost improvements of 2.4%, favorable selling, general, and administrative ("SG&A"), and other cost impacts of 1.1%, partially offset by unfavorable price/mix of (1.3%).
38
Rigid Packaging Segment
The
Rigid Packaging reportable segment manufactures rigid packaging containers and related products.
Three Months Ended December 31,
($ in millions)
2021
2020
Net sales
$
794
$
654
Adjusted
EBIT
55
62
Adjusted EBIT as a percentage of net sales
6.9
%
9.4
%
Net sales increased by $140 million, or 21.5%, to $794 million for the three months ended December 31, 2021, from $654 million for the three months ended December 31, 2020. Excluding negative currency impacts of $3
million, or (0.5%) and pass-through of raw material costs of $95 million, or 14.5%, the increase in net sales for the three months ended December 31, 2021 was $48 million, or 7.5%, driven by favorable volumes of 4.5%, and favorable price/mix of 3.0%.
Adjusted EBIT decreased by $7 million, or 11.3%, to $55 million for the three months ended December 31, 2021, from $62 million for the three months ended December 31, 2020. Excluding negative currency impacts of $1 million, or (0.8%), the decrease in Adjusted EBIT for the three months ended December 31, 2021 was $6 million, or (10.5%), driven by favorable price/mix of 9.5%, favorable SG&A and other costs of 1.4% and unfavorable plant costs/volume impacts of
(21.4%).
Consolidated Gross Profit
Three Months Ended December 31,
($ in millions)
2021
2020
Gross profit
$
645
$
651
Gross
profit as a percentage of net sales
18.4
%
21.0
%
Gross profit decreased by $6 million, or 0.9%, to $645 million for the three months ended December 31, 2021, from $651 million for the three months ended December 31, 2020. The decrease was primarily driven by timing of passing through higher raw material and related costs.
Consolidated Selling, General, and Administrative ("SG&A") Expenses
Three
Months Ended December 31,
($ in millions)
2021
2020
SG&A expenses
$
(303)
$
(308)
SG&A expenses as a percentage of net sales
(8.6
%)
(9.9
%)
SG&A
expenses decreased by $5 million, or 1.6%, to $303 million for the three months ended December 31, 2021, from $308 million for the three months ended December 31, 2020. The decrease was primarily due to lower Bemis integration costs, restructuring benefits, and other savings initiatives.
Consolidated Restructuring and Related Expenses, Net
Three Months Ended December 31,
($
in millions)
2021
2020
Restructuring and related expenses, net
$
(10)
$
(23)
Restructuring and related expenses, net, as a percentage of net sales
(0.3
%)
(0.7
%)
Restructuring
and related expenses, net, decreased by $13 million, or 56.5%, to $10 million for the three months ended December 31, 2021, from $23 million for the three months ended December 31, 2020. The decrease was primarily driven by the completion of the Rigid Packaging Restructuring Plan in June 2021, as well as lower restructuring costs in the Flexibles reporting segment.
Net sales increased $727 million, or 11.7%, to $6,927 million for the six months ended December 31, 2021, from $6,200 million for the six months ended December 31, 2020. Excluding the impact of disposed and ceased operations of $46 million, or (0.7%), negative currency impacts of $11 million, or (0.2%), and pass-through of raw material cost of $649 million, or 10.5%, the increase in net sales for the six months ended December 31, 2021 was
$135 million, or 2.1%, driven by favorable price/mix of 1.6% and favorable volumes of 0.5%.
Net income attributable to Amcor plc increased $10 million, or 2.4%, to $427 million for the six months ended December 31, 2021, from $417 million for the six months ended December 31, 2020 mainly as a result of lower restructuring and related expenses, net, of $28 million and lower selling, general, and administrative expenses of $21 million, partially offset by net property and related business losses of $27 million primarily associated with the destruction of our Durban, South Africa, facility during general civil unrest in July 2021.
Diluted earnings per share increased to $0.279, or by 5.3%, for the six months ended December
31, 2021, from $0.265 for the six months ended December 31, 2020, with the net income attributable to ordinary shareholders of Amcor plc increasing by 2.4% and the diluted weighted average number of shares outstanding decreasing 2.5% for the six months ended December 31, 2021 compared to the six months ended December 31, 2020. The decrease in the diluted weighted average number of shares outstanding was due to the repurchase of shares under announced share buyback programs.
Segment Results of Operations
Flexibles Segment
Our Flexibles reporting segment develops and supplies flexible packaging globally.
Six
Months Ended December 31,
($ in millions)
2021
2020
Net sales including intersegment sales
$
5,347
$
4,850
Adjusted EBIT
$
691
$
653
Adjusted
EBIT as a percentage of net sales
12.9
%
13.5
%
Net sales including intersegment sales increased $497 million, or 10.2%, to $5,347 million for the six months ended December 31, 2021, from $4,850 million for the six months ended December 31, 2020. Excluding the impact of disposed and ceased operations of $46 million, or (0.9%), negative currency impacts of $12 million, or (0.2%), pass-through of raw material cost of $480 million, or 9.9%, the increase in net sales including intersegment sales for the six months ended December
31, 2021 was $75 million, or 1.5%, driven by favorable price/mix and volume.
Adjusted EBIT increased $38 million, or 5.8%, to $691 million for the six months ended December 31, 2021, from $653 million for the six months ended December 31, 2020. Excluding the impact of disposed and ceased operations of $3 million, or (0.4%), negative currency impacts of $3 million, or (0.4%), the increase in Adjusted EBIT for the six months ended December 31, 2021 was $44 million, or 6.6%, driven by plant cost improvements of 6.1%, SG&A and other cost improvements of 1.0%, favorable volumes of 0.8%, partially offset by unfavorable price/mix of (1.3%).
40
Rigid
Packaging Segment
Our Rigid Packaging reporting segment manufactures rigid packaging containers and related products.
Six Months Ended December 31,
($ in millions)
2021
2020
Net
sales
$
1,580
$
1,352
Adjusted EBIT
$
117
$
134
Adjusted EBIT as a percentage of net sales
7.4
%
9.9
%
Net
sales increased $228 million, or 16.9%, to $1,580 million for the six months ended December 31, 2021, from $1,352 million for the six months ended December 31, 2020. Excluding pass-through of raw material costs of $169 million, or 12.5%, the increase in net sales for the six months ended December 31, 2021 was $59 million, or 4.4%, driven by favorable volumes of 2.9% and favorable price/mix of 1.5%.
Adjusted EBIT decreased $17 million, or 12.7%, to $117 million for the six months ended December 31, 2021, from $134 million for the six months ended December 31, 2020, driven primarily by favorable price/mix of 7.8% and favorable SG&A and other costs of 0.1%,
offset by unfavorable plant costs/volume impacts of (20.6%).
Consolidated Gross Profit
Six Months Ended December 31,
($ in millions)
2021
2020
Gross profit
$
1,295
$
1,305
Gross
profit as a percentage of net sales
18.7
%
21.0
%
Gross profit decreased by $10 million, or 0.8%, to $1,295 million for the six months ended December 31, 2021, from $1,305 million for the six months ended December 31, 2020. The decrease was primarily driven by timing of passing through higher raw material and related costs.
Consolidated Selling, General, and Administrative ("SG&A") Expenses
Six
Months Ended December 31,
($ in millions)
2021
2020
SG&A expenses
$
(616)
$
(637)
SG&A expenses as a percentage of net sales
(8.9
%)
(10.3
%)
SG&A
expenses decreased by $21 million, or 3.3%, to $616 million for the six months ended December 31, 2021, from $637 million for the six months ended December 31, 2020. The decrease was primarily due to lower Bemis integration costs, restructuring benefits, and other savings initiatives.
Consolidated Restructuring and Related Expenses, Net
Six Months Ended December 31,
($
in millions)
2021
2020
Restructuring and related expenses, net
$
(18)
$
(46)
Restructuring and related expenses, net, as a percentage of net sales
(0.3
%)
(0.7
%)
Restructuring
and related expenses, net, decreased by $28 million, or 60.9%, to $18 million for the six months ended December 31, 2021, from $46 million for the six months ended December 31, 2020. The decrease was primarily driven by the completion of the Rigid Packaging Restructuring Plan in June 2021, as well as lower restructuring costs in the Flexibles reporting segment.
41
Consolidated Other Income, Net
Six
Months Ended December 31,
($ in millions)
2021
2020
Other income, net
$
5
$
10
Other income, net, as a percentage of net sales
0.1
%
0.2
%
Other
income, net decreased by $5 million, or 50.0%, to $5 million for the six months ended December 31, 2021, from $10 million for the six months ended December 31, 2020, mainly driven by property and related business losses in the Flexibles reportable segment primarily associated with the destruction of our Durban, South Africa, facility during general civil unrest in July 2021 that were partially offset by individually immaterial items.
Consolidated Income Tax Expense
Six
Months Ended December 31,
($ in millions)
2021
2020
Income tax expense
$
(124)
$
(116)
Effective income tax rate
22.3
%
22.3
%
The
provision for income taxes for the three and six months ended December 31, 2021 and 2020 is based on our estimated annual effective tax rate for the respective fiscal years before income taxes and equity in income of affiliated companies and adjusted for specific items that are required to be recognized in the period in which they are incurred.
Income tax expense for the three and six months ended December 31, 2021 is $61 million and $124 million, respectively, compared to $55 million and $116 million for the three and six months ended December 31, 2020, respectively.
The effective tax rate for the six months ended December
31, 2021 and 2020 was 22.3%.
Equity in Income of Affiliated Companies, Net of Tax
Six Months Ended December 31,
($ in millions)
2021
2020
Equity
in income of affiliated companies, net of tax
—
19
Equity in income of affiliated companies, net of tax decreased by $19 million for the six months ended December 31, 2021 due to the sale of the equity investment in AMVIG on September 30, 2020. For further information, refer to Note 15, "Disposals."
42
Presentation
of Non-GAAP Information
This Quarterly Report on Form 10-Q refers to non-GAAP financial measures: adjusted earnings before interest and taxes ("Adjusted EBIT"), adjusted net income, and net debt. These non-GAAP financial measures adjust for factors that are unusual or unpredictable. These measures exclude the impact of significant tax reforms, certain amounts related to the effect of changes in currency exchange rates, acquisitions, and restructuring, including employee-related costs, equipment relocation costs, accelerated depreciation, and the write-down of equipment. These measures also exclude gains or losses on sales of significant property and divestitures, significant property impairments, net of insurance recovery, certain litigation matters, and certain acquisition-related expenses, including transaction expenses, due diligence expenses, professional and legal fees, purchase accounting
adjustments for inventory, order backlog, intangible amortization, and changes in the fair value of deferred acquisition payments.
This adjusted information should not be construed as an alternative to results determined in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). We use the non-GAAP measures to evaluate operating performance and believe that these non-GAAP measures are useful to enable investors and other external parties to perform comparisons of our current and historical performance.
A reconciliation of reported net income attributable to Amcor plc to Adjusted EBIT and Adjusted net income for the three and six months ended December 31, 2021 and 2020 is as follows:
Three
Months Ended December 31,
Six Months Ended December 31,
($ in millions)
2021
2020
2021
2020
Net income attributable to Amcor plc, as reported
$
225
$
219
$
427
$
417
Add:
Net income attributable to non-controlling interests
4
3
5
5
Net income
229
222
432
422
Add:
Income tax expense
61
55
124
116
Add: Interest expense
39
37
79
77
Less:
Interest income
(5)
(4)
(10)
(7)
Earnings before interest and taxes ("EBIT")
324
310
625
608
Add:
Material restructuring programs (1)
10
25
17
39
Add: Material acquisition costs and other (2)
—
4
2
13
Add:
Amortization of acquired intangible assets from business combinations (3)
41
41
82
82
Add: Impact of hyperinflation (4)
2
6
4
11
Add/(Less):
Net (gain)/loss on disposals (5)
9
—
9
(9)
Add/(Less): Property and other (gains)/losses, net (6)
(1)
—
27
—
Add:
Pension settlement (7)
3
—
3
—
Adjusted EBIT
$
388
$
385
$
769
$
743
Less:
Income tax expense
(61)
(55)
(124)
(116)
Less: Adjustments to income tax expense (8)
(12)
(19)
(23)
(29)
Less:
Interest expense
(39)
(37)
(79)
(77)
Add: Interest income
5
4
10
7
Less:
Net income attributable to non-controlling interests
(4)
(3)
(5)
(5)
Adjusted net income
$
277
$
276
$
548
$
522
(1)Material
restructuring programs includes restructuring and related expenses for the 2019 Bemis Integration Plan for the three and six months ended December 31, 2021 and for the 2018 Rigid Packaging Restructuring Plan and the 2019 Bemis Integration Plan three and six months ended December 31, 2020. Refer to Note 3, "Restructuring," for more information about the Company's restructuring activities.
(2)Includes costs associated with the Bemis transaction.
(3)Amortization of acquired intangible assets from business combinations includes amortization expenses related to all acquired intangible assets from past acquisitions.
(4)Impact
of hyperinflation includes the adverse impact of highly inflationary accounting for subsidiaries in Argentina where the functional currency was the Argentine Peso.
43
(5)Net (gain)/loss on disposals for three and six months ended December 31, 2021 includes an expense of $9 million, triggered by a commitment to sell non-core assets. Refer to Note 6, "Fair Value Measurements" for more information. The six months ended December 31, 2020 includes the gain realized upon the disposal of AMVIG and the loss upon disposal of other non-core
businesses not part of material restructuring programs. Refer to Note 15, "Disposals," for more information about our disposals.
(6)Property and other (gains)/losses, net, includes property and related business losses primarily associated with the destruction of our Durban, South Africa, facility during general civil unrest in July 2021, net of insurance recovery deemed probable for incurred losses.
(7)Pension settlement for the three and six months ended December 31, 2021 relates to the purchase of a group annuity contract and transfer of pension plan assets and related benefit obligations. Refer to Note 8, "Components of Net Periodic Benefit Cost" for more information.
Amcor plc, along with certain wholly owned subsidiary guarantors, guarantee the following senior notes issued by the wholly owned subsidiaries, Amcor Finance (USA), Inc., Amcor Flexibles North America, Inc. and Amcor UK Finance plc.
•3.100% Guaranteed Senior Notes due 2026 of Amcor Flexibles North America, Inc.
•2.630% Guaranteed Senior Notes due 2030 of Amcor Flexibles North America, Inc.
•2.690% Guaranteed Senior Notes due 2031 of Amcor Flexibles North America, Inc.
•3.625% Guaranteed
Senior Notes due 2026 of Amcor Finance (USA), Inc.
•4.500% Guaranteed Senior Notes due 2028 of Amcor Finance (USA), Inc.
•1.125% Guaranteed Senior Notes due 2027 of Amcor UK Finance plc
The three notes issued by Amcor Flexibles North America, Inc. are guaranteed by its parent entity Amcor plc and the subsidiary guarantors Amcor Pty Ltd, Amcor Finance (USA), Inc., and Amcor UK Finance plc. The two notes issued by Amcor Finance (USA), Inc. are guaranteed by its parent entity Amcor plc and the subsidiary guarantors Amcor Pty Ltd, Amcor Flexibles North America, Inc., and Amcor UK Finance plc. The note issued by Amcor UK Finance plc is guaranteed by its parent entity, Amcor plc and the subsidiary guarantors Amcor Pty Ltd, Amcor Flexibles North America, Inc., and Amcor Finance
(USA), Inc.
All guarantors fully, unconditionally, and irrevocably guarantee, on a joint and several basis, to each holder of the notes the due and punctual payment of the principal of, and any premium and interest on, such note and all other amounts payable, when and as the same shall become due and payable, whether at stated maturity, by declaration of acceleration, call for redemption or otherwise, in accordance with the terms of the notes and related indenture. The obligations of the applicable guarantors under their guarantees will be limited as necessary to recognize certain defenses generally available to guarantors (including those that relate to fraudulent conveyance or transfer, voidable preference, financial assistance, corporate purpose, or similar laws) under applicable law. The guarantees will be unsecured
and unsubordinated obligations of the guarantors and will rank equally with all existing and future unsecured and unsubordinated debt of each guarantor. None of our other subsidiaries guarantee such notes. The issuers and guarantors conduct large parts of their operations through other subsidiaries of Amcor plc.
Amcor Flexibles North America, Inc. is incorporated in Missouri in the United States, Amcor Finance (USA), Inc. is incorporated in Delaware in the United States, Amcor UK Finance plc is incorporated in England and Wales, United Kingdom, and the guarantors are incorporated under the laws of Jersey, Australia, the United States, and England and Wales and, therefore, insolvency proceedings with respect to
the issuers and guarantors could proceed under, and be governed by, among others, Jersey, Australian, United States, or English insolvency law, as the case may be, if either issuer or any guarantor defaults on its obligations under the applicable Notes or Guarantees, respectively.
Set forth below is the summarized financial information of the combined Obligor Group made up of Amcor plc (as parent guarantor), Amcor Flexibles North America, Inc., Amcor Finance (USA), Inc., and Amcor UK Finance plc (as subsidiary issuers of the notes and guarantors of each other’s notes) and Amcor Pty Ltd (as the remaining subsidiary guarantor).
45
Basis
of Preparation
The following summarized financial information is presented for the parent, issuer, and guarantor subsidiaries ("Obligor Group") on a combined basis after elimination of intercompany transactions between entities in the combined group and amounts related to investments in any subsidiary that is a non-guarantor.
This information is not intended to present the financial position or results of operations of the combined group of companies in accordance with U.S. GAAP.
Current assets - due from subsidiaries
outside the Obligor Group
74
95
Total current assets
1,504
909
Non-current assets - external
1,414
1,428
Non-current assets - due from subsidiaries
outside the Obligor Group
11,390
11,838
Total non-current assets
12,804
13,266
Total assets
$
14,308
$
14,175
Liabilities
Current
liabilities - external
$
2,029
$
1,183
Current liabilities - due to subsidiaries outside the Obligor Group
23
22
Total current liabilities
2,052
1,205
Non-current
liabilities - external
6,653
6,321
Non-current liabilities - due to subsidiaries outside the Obligor Group
11,252
11,563
Total non-current liabilities
17,905
17,884
Total
liabilities
$
19,957
$
19,089
46
New
Accounting Pronouncements
Refer to Note 2, "New Accounting Guidance," in "Item 1. Financial Statements - Notes to Condensed Consolidated Financial Statements."
Critical Accounting Estimates and Judgments
Our discussion and analysis of our financial condition and results of operations is based on our unaudited condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements
and the reported amounts of expenses during the reporting period. Our estimates and judgments are based on historical experience and on various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. These critical accounting estimates are discussed in detail in “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Estimates and Judgments” in our Annual Report on Form 10-K for the year ended June 30, 2021.
47
Liquidity
and Capital Resources
We finance our business primarily through cash flows provided by operating activities, borrowings from banks, and proceeds from issuances of debt and equity. We periodically review our capital structure and liquidity position in light of market conditions, expected future cash flows, potential funding requirements for debt refinancing, capital expenditures and acquisitions, the cost of capital, sensitivity analyses reflecting downside scenarios, the impact on our financial metrics and credit ratings, and our ease of access to funding sources.
On December 15, 2021, we redeemed U.S. private placement notes of a principal amount of $275 million at maturity. The notes carried an interest rate of 5.95%.
On
July 15, 2021, we redeemed U.S. dollar notes with a principal amount of $400 million that had a contractual maturity of October 15, 2021 and carried an interest rate of 4.50%.
The COVID-19 pandemic has not had a material impact on our operations to date and therefore has not negatively impacted our liquidity position and current and expected cash flows from operating activities and available cash. We believe that our cash flows provided by operating activities, together with borrowings available under our credit facilities and access to the commercial paper market, backstopped by our bank debt facilities, will continue to provide sufficient liquidity to fund our operations, capital expenditures, and other commitments, including dividends and purchases of our ordinary shares and CHESS Depositary Instruments
under authorized share repurchase programs, into the foreseeable future.
Overview
Six Months Ended December 31,
($ in millions)
2021
2020
Net cash provided by operating activities
$
323
$
442
Net
cash used in investing activities
(265)
(76)
Net cash used in financing activities
(235)
(409)
Cash Flow Overview
Net Cash Provided by Operating Activities
Net cash provided by operating activities decreased by $119 million, or 27%, to $323 million inflow for the six months ended December
31, 2021, from $442 million inflow for the six months ended December 31, 2020. The reduction was mainly driven by the timing impact of higher raw material costs on working capital partially offset by the timing of tax and other payments.
Net Cash Used in Investing Activities
Net cash used in investing activities increased by $189 million, or 249%, to $265 million outflow for the six months ended December 31, 2021, from a $76 million outflow for the six months ended December 31, 2020. The increase in net cash used in investing activities was primarily due to proceeds from divestitures in the prior period following the disposal of AMVIG and other non-core businesses, and higher capital expenditures
in the current period.
Net Cash Used in Financing Activities
Net cash used in financing activities decreased by $174 million, or 43%, to $235 million outflow for the six months ended December 31, 2021, from a $409 million outflow for the six months ended December 31, 2020. The decrease in net cash used in financing activities is primarily due to higher cash net debt drawdowns compared with the prior period, partially offset by higher share buybacks in the current period.
Net Debt
We borrow from financial institutions and debt investors in the form of bank overdrafts, bank loans, corporate bonds, unsecured notes,
and commercial paper. We have a mixture of fixed and floating interest rates and use interest rate swaps to provide further flexibility in managing the interest cost of borrowings.
48
Short-term debt consists of bank debt with a duration of less than 12 months and bank overdrafts which are classified as current due to the short-term nature of the borrowings, except where we have the ability and intent to refinance and as such extend the debt beyond 12 months. The current portion of the long-term debt consists of debt amounts repayable within a year after the balance sheet date.
Our primary bank debt facilities and notes are unsecured and subject to negative pledge
arrangements limiting the amount of secured indebtedness we can incur to 10.0% of our total tangible assets, subject to some exceptions and variations by facility. In addition, the bank debt facilities require us to maintain a leverage ratio not higher than 3.9 times. The negative pledge arrangements and the financial covenants are defined in the related debt agreements. As of December 31, 2021, we were in compliance with all applicable covenants under our bank debt facilities.
As
of December 31, 2021, we had undrawn credit facilities available in the amount of $0.9 billion. Our senior facilities are available to fund working capital, growth capital expenditures, and refinancing obligations and are provided to us by three separate bank syndicates. These facilities mature between April 2023 and April 2025, and we have an option to extend the maturities for 12 months.
As of December 31, 2021, the revolving senior bank debt facilities had an aggregate limit of $3.8 billion, of which $2.9 billion had been drawn (inclusive of amounts drawn under commercial paper programs reducing the overall balance of available senior facilities).
Dividend Payments
We
declared and paid a $0.1175 cash dividend per ordinary share during the first fiscal quarter which ended September 30, 2021 and a $0.12 cash dividend per ordinary share during the second fiscal quarter which ended December 31, 2021.
Credit Rating
Our capital structure and financial practices have earned us investment grade credit ratings from two internationally recognized credit rating agencies. These investment grade credit ratings are important to our ability to issue debt at favorable rates of interest, for various terms, and from a diverse range of markets that are highly liquid, including European and U.S. debt capital markets and from global financial institutions.
Share
Repurchases
On August 17, 2021, our Board of Directors approved a $400 million buyback of ordinary shares and Chess Depositary Instruments ("CDIs"). During the six months ended December 31, 2021, we repurchased approximately $295 million of ordinary shares and CDIs in the aggregate, including transaction costs, or 25 million shares. The shares repurchased as part of the program were canceled upon repurchase.
We had cash outflows of $133 million and zero for the purchase of our shares in the open market and using forwards contracts to purchase our own equity during the six months ended December 31,
2021 and 2020, respectively, as treasury shares to satisfy the vesting and exercises of share-based compensation awards. As of December 31, 2021, and June 30, 2021, we held treasury shares at cost of $37 million and $29 million, representing 3 million and 3 million shares, respectively.
49
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes in
our market risk during the three and six months ended December 31, 2021. For additional information, refer to Note 6, "Fair Value Measurements," and Note 7, "Derivative Instruments," to the notes to our unaudited condensed consolidated financial statements, and to "Item 7A. - Quantitative and Qualitative Disclosures About Market Risk" of our Annual Report on Form 10-K for the year ended June 30, 2021.
50
Item 4. Controls and Procedures
Evaluation
of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2021. The term "disclosure controls and procedures," as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be
disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including its principal executive and financial officers, as appropriate, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of December 31, 2021.
Changes in Internal Control Over Financial Reporting
There
were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the second quarter of fiscal 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
51
Part II - Other Information
Item 1. Legal Proceedings
The material set forth
in Note 14, "Contingencies and Legal Proceedings," in "Item 1. Financial Statements - Notes to Condensed Consolidated Financial Statements" is incorporated herein by reference.
Item 1A. Risk Factors
There have been no material changes from the risk factors contained in "Item 1A. - Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended June 30, 2021.
Item 2. Unregistered Sales of Equity Securities and Use
of Proceeds
Share Repurchases
Share repurchase activity during the three months ended December 31, 2021 was as follows (in millions, except number of shares, which are reflected in thousands, and per share amounts, which are expressed in U.S. dollars):
Period
Total
Number of Shares Purchased (1)
Average Price Paid Per Share (1)(2)
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
Approximate Dollar Value of Shares That May Yet Be Purchased Under the Programs (3)
October 1 - 31, 2021
—
$
—
—
$
336
November
1 - 30, 2021
7,437
12.25
7,291
247
December 1 - 31, 2021
12,150
11.61
12,150
106
Total
19,587
$
11.86
19,441
(1)
Includes shares purchased on the open market to satisfy the vesting and exercises of share-based compensation awards.
(2) Average price paid per share excludes costs associated with the repurchase.
(3) On August 17, 2021, our Board of Directors approved a buyback of $400 million of ordinary shares and/or CHESS Depositary Instruments ("CDIs") during the following twelve months. In addition, on February 1, 2022, our Board of Directors approved an additional $200 million buyback of ordinary shares and CDIs during the next twelve months. The timing, volume, and nature of share repurchases may be amended, suspended, or discontinued at any time.
Inline 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.
Cover Page Interactive Data File (formatted as
Inline XBRL and contained in Exhibit 101).
53
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.