What changed in this filing

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Item 2. Management’s Discussion and Analysis

2020-08-07 compared with 2020-05-08 · 122 added, 62 removed, 61 unchanged (75% of the section changed)

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As a result, the actual results of our operations or our financial condition could differ materially from those expressed or implied in these forward-looking statements.

We are a leading manufacturer of rigid packaging for consumer goods products.

We are a leading manufacturer of sustainable rigid packaging solutions for consumer goods products.

We currently produce steel and aluminum containers for human and pet food and general line products;

metal and plastic closures and dispensing systems for food, beverage, health care, garden, personal care, home and beauty products;

metal and plastic closures and dispensing systems for food, beverage, health care, garden, home, personal care and beauty products;

and custom designed plastic containers for personal care, food, health care, pharmaceutical, household and industrial chemical, pet food and care, agricultural, automotive and marine chemical products.

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RESULTS OF OPERATIONS

The following table sets forth certain unaudited income statement data expressed as a percentage of net sales for the three months ended March 31

The following table sets forth certain unaudited income statement data expressed as a percentage of net sales for the periods presented:

Three Months Ended Six Months Ended

June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019

Metal containers 50.8 % 52.7 % 50.1 % 51.1 %

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Net income 6.7 % 2.8 % 6.2 % 3.7 %

Summary unaudited results of operations for the three months ended March 31 are provided below.

Summary unaudited results of operations for the periods presented are provided below.

Three Months Ended Six Months Ended

June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019

(dollars in millions)

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$ 71.8 $ 14.0 $ 119.3 $ 52.9

58.6 46.9 103.8 87.1

Plastic containers (3)

23.0 13.4 45.0 25.5

Corporate (4)

(22.2) (5.7) (34.7) (10.2)

Consolidated $ 131.2 $ 68.6 $ 233.4 $ 155.3

(1) Includes rationalization charges of $2.0 million and $0.2 million for the three months ended March 31, 2020 and 2019, respectively.

(2) Includes rationalization charges of $0.7 million and $5.7 million for the three months ended March 31, 2020 and 2019, respectively.

(3) Includes rationalization charges of $0.1 million and $0.2 million for the three months ended March 31, 2020 and 2019, respectively.

(4) Includes costs attributed to announced acquisitions of $2.3 million in 2020.

Three Months Ended March 31, 2020 Compared with Three Months Ended March 31, 2019

Consolidated net sales were $1.03 billion in the first quarter of 2020, a 0.3 percent increase as compared to the first quarter of 2019 primarily due to higher volumes across all businesses, partially offset by the pass through of lower raw material costs, a less favorable mix of products sold and the impact of unfavorable foreign currency translation.

Income before interest and income taxes for the first quarter of 2020 was $102.1 million, a $15.4 million increase as compared to the same period in 2019 primarily due to higher unit volumes, strong operating performance in both the metal and plastic container businesses, higher pension income and lower rationalization charges, partially offset by a less favorable mix of products sold in the metal container and closures businesses, the benefit in the prior year period from the delayed pass through of lower resin costs in the closures business, higher selling, general and administrative expenses and foreign currency transaction losses.

Results for the first quarters of 2020 and 2019 included rationalization charges of $2.8 million and $6.1 million, respectively.

Results for the first quarter of 2020 also included a loss on early extinguishment of debt of $1.5 million.

Net income for the first quarter of 2020 was $57.6 million as compared to $46.7 million for the same period in 2019.

Net income per diluted share for the first quarter of 2020 was $0.52 as compared to $0.42 for the same period in 2019.

The $3.3 million increase in consolidated net sales in the first quarter of 2020 as compared to the first quarter of 2019 was the result of higher net sales across all the businesses.

Net sales for the metal container business increased $1.5 million, or 0.3 percent, in the first quarter of 2020 as compared to the same period in 2019.

This increase was primarily the result of the higher unit volumes of approximately eight percent, partially offset by the pass through of lower raw material costs, a less favorable mix of products sold and the impact of unfavorable foreign currency translation of approximately $2.0 million.

The increase in unit volumes was primarily due to lower volumes in the first quarter of 2019 as a result of the 2018 pre-buy of products by customers in anticipation of significant metal inflation in 2019 and the benefit in the first quarter of 2020 from higher volumes starting in March as a result of a spike in consumer demand in response to the coronavirus (COVID-19) crisis.

Net sales for the closures business increased $1.0 million, or 0.3 percent, in the first quarter of 2020 as compared to the same period in 2019.

This increase was primarily the result of higher unit volumes of approximately five percent, partially offset by the pass through of lower raw material costs, a less favorable mix of products sold and the impact of unfavorable foreign currency translation of approximately $5.0 million.

The increase in unit volumes was principally the result of strong volumes for food and beverage products as well as certain consumer health and personal care products starting in March due to a spike in consumer demand in response to the coronavirus (COVID-19) crisis, lower volumes in the first quarter of 2019 as a result of the 2018 pre-buy of products by customers in anticipation of significant metal inflation in 2019 and volumes from the recent acquisition of Cobra Plastics.

These volume gains were partially offset by some weakness in certain beauty products as consumers shifted buying patterns as a result of the coronavirus (COVID-19) crisis.

Net sales for the plastic container business increased $0.8 million, or 0.5 percent, in the first quarter of 2020 as compared to the same period in 2019.

This increase was principally due to higher volumes of approximately six percent, partially offset by the pass through of lower raw material costs and a less favorable mix of products sold.

The increase in volumes was due primarily to higher demand for certain food and consumer health products starting in March as a result of a spike in consumer demand in response to the coronavirus (COVID-19) crisis.

(1) Includes rationalization charges of $1.2 million and $39.0 million for the three months ended June 30, 2020 and 2019, respectively, and $3.1 million and $39.3 million for the six months ended June 30, 2020 and 2019, respectively.

(2) Includes rationalization charges of $0.7 million and $0.2 million for the three months ended June 30, 2020 and 2019, respectively, and $1.4 million and $5.9 million for the six months ended June 30, 2020 and 2019, respectively.

Includes a charge of $3.5 million for the write-up of inventory for purchase accounting as a result of the acquisition of the Albéa Dispensing Business for each of the three and six months ended June 30, 2020.

(3) Includes rationalization charges of $0.1 million for each of the three months ended June 30, 2020 and 2019 and $0.2 million for each of the six months ended June 30, 2020 and 2019.

(4) Includes costs attributed to announced acquisitions of $16.1 million and $18.3 million for the three and six months ended June 30, 2020, respectively.

Three Months Ended June 30, 2020 Compared with Three Months Ended June 30, 2019

Consolidated net sales were $1.18 billion in the second quarter of 2020, a 7.6 percent increase as compared to the second quarter of 2019 primarily due to higher volumes across all businesses, including the impact from acquisitions, and a more favorable mix of products sold in the closures business, partially offset by the pass through of lower raw material costs, a less favorable mix of products sold in the metal and plastic container businesses and the impact of unfavorable foreign currency translation.

Income before interest and income taxes for the second quarter of 2020 was $131.2 million, a $62.6 million increase as compared to the same period in 2019, primarily due to higher volumes and strong operating performance across all businesses, lower rationalization charges, higher pension income and a more favorable mix of products sold in the closures business, partially offset by acquisition related costs of $16.1 million, a less favorable mix of products sold in the metal container business, the negative impact of a charge for the purchase accounting write-up of acquired inventory of the Albéa Dispensing Business and the unfavorable impact of a charge for a non-commercial legal dispute relating to prior periods in the plastic container business.

Results for the second quarters of 2020 and 2019 included rationalization charges of $2.0 million and $39.3 million, respectively.

Results for the second quarters of 2020 and 2019 also included other pension and postretirement income of $9.7 million and $4.5 million, respectively.

Results for the second quarter of 2020 also included costs attributed to announced acquisitions of $16.1 million.

Net income for the second quarter of 2020 was $78.2 million as compared to $31.0 million for the same period in 2019.

Net income per diluted share for the second quarter of 2020 was $0.70 as compared to $0.28 for the same period in 2019.

The $83.3 million increase in consolidated net sales in the second quarter of 2020 as compared to the second quarter of 2019 was the result of higher net sales across all the businesses.

Net sales for the metal container business increased $21.6 million, or 3.8 percent, in the second quarter of 2020 as compared to the same period in 2019.

This increase was primarily the result of higher unit volumes of approximately fifteen percent, partially offset by the pass through of lower raw material costs, a less favorable mix of products sold and the impact of unfavorable foreign currency translation of approximately $2.0 million.

The increase in unit volumes was primarily due to continued higher demand for products consumed in the home, partially offset by the volume benefit in the prior year from a certain customer that increased purchases following a destocking of inventory in previous periods.

Net sales for the closures business increased $47.1 million, or 13 percent, in the second quarter of 2020 as compared to the same period in 2019.

This increase was primarily the result of higher unit volumes of approximately three percent and a more favorable mix of products sold, partially offset by the impact of unfavorable foreign currency translation of approximately $7.0 million and the pass through of lower raw material costs.

The increase in unit volumes was principally the result of strong volumes for certain consumer health, hygiene, personal care and food products as well as the inclusion of the recent acquisitions of Cobra Plastics and the Albéa Dispensing Business.

These volume gains were partially offset by weak demand for certain beauty and beverage products.

Net sales for the plastic container business increased $14.6 million, or 9.5 percent, in the second quarter of 2020 as compared to the same period in 2019.

This increase was principally due to higher volumes of approximately fourteen percent, partially offset by a less favorable mix of products sold, the pass through of lower raw material costs and the impact of unfavorable foreign currency translation of approximately $1.0 million.

The increase in volumes was due primarily to continued higher demand for certain food and consumer health and hygiene products.

Gross Profit .

Gross profit margin increased 1.8 percentage points to 18.0 percent in the first quarter of 2020 as compared to the same period in 2019 for the reasons discussed below in "Income before Interest and Income Taxes."

Gross profit margin increased 2.3 percentage points to 19.1 percent in the second quarter of 2020 as compared to the same period in 2019 for the reasons discussed below in "Income before Interest and Income Taxes."

Selling, General and Administrative Expenses .

Selling, general and administrative expenses as a percentage of consolidated net sales increased to 8.7 percent in the first quarter of 2020 as compared to 7.6 percent in the same period in 2019.

Selling, general and administrative expenses increased $12.2 million to $89.9 million for the first quarter of 2020 as compared to $77.7 million for the same period in 2019.

The increase in selling, general and administrative expenses was principally the result of higher employee incentive expense due primarily to one-time plant employee incentive payments during the coronavirus (COVID-19) crisis, costs attributed to announced acquisitions and foreign currency transaction losses in the current year period.

Selling, general and administrative expenses as a percentage of consolidated net sales increased to 8.5 percent in the second quarter of 2020 as compared to 7.3 percent in the same period in 2019.

Selling, general and administrative expenses increased $20.5 million to $100.6 million for the second quarter of 2020 as compared to $80.1 million for the same period in 2019.

The increase in selling, general and administrative expenses was principally due to costs attributed to announced acquisitions of $16.1 million, the inclusion of the selling, general and administrative expenses from Cobra Plastics and the Albéa Dispensing Business which were acquired in 2020 and a charge of $2.8 million for a non-commercial legal dispute relating to prior periods.

Income before Interest and Income Taxes .

Income before interest and income taxes for the first quarter of 2020 increased by $15.4 million as compared to the first quarter of 2019, and margins increased to 9.9 percent from 8.4 percent over the same periods.

The increase in income before interest and income taxes was primarily the result of higher income in each of the businesses, partially offset by higher corporate expense.

Rationalization charges were $2.8 million and $6.1 million in the first quarters of 2020 and 2019, respectively.

Segment income of the metal container business for the first quarter of 2020 increased $8.6 million as compared to the same period in 2019, and segment income margin increased to 9.3 percent from 7.7 percent over the same periods.

The increase in segment income was primarily attributable to higher unit volumes, strong operating performance and higher pension income, partially offset by a less favorable mix of products sold, higher rationalization charges and foreign currency transaction losses in the current year period.

Rationalization charges were $2.0 million and $0.2 million in the first quarters of 2020 and 2019, respectively.

Segment income of the closures business for the first quarter of 2020 increased $5.0 million as compared to the same period in 2019, and segment income margin increased to 12.7 percent from 11.3 percent over the same periods.

The increase in segment income was primarily due to higher unit volumes, lower rationalization charges and higher pension income, partially offset by a less favorable mix of products sold and the benefit in the prior year period from the delayed pass through of lower resin costs.

Rationalization charges were $0.7 million and $5.7 million in the first quarters of 2020 and 2019, respectively.

Segment income of the plastic container business for the first quarter of 2020 increased $9.9 million as compared to the same period in 2019, and segment income margin increased to 13.4 percent from 7.4 percent over the same periods.

The increase in segment income was primarily attributable to higher volumes, lower manufacturing costs including for raw materials, and higher pension income.

Income before interest and income taxes for the second quarter of 2020 increased by $62.6 million as compared to the second quarter of 2019, and margins increased to 11.2 percent from 6.3 percent over the same periods.

The increase in income before interest and income taxes was primarily the result of higher income in each of the

businesses and lower rationalization charges, partially offset by higher selling, general and administrative expenses.

Rationalization charges were $2.0 million and $39.3 million in the second quarters of 2020 and 2019, respectively.

Segment income of the metal container business for the second quarter of 2020 increased $57.8 million as compared to the same period in 2019, and segment income margin increased to 12.0 percent from 2.4 percent over the same periods.

The increase in segment income was due primarily to lower rationalization charges, higher unit volumes and higher pension income, partially offset by a less favorable mix of products sold.

Rationalization charges were $1.2 million and $39.0 million in the second quarters of 2020 and 2019, respectively.

Segment income of the closures business for the second quarter of 2020 increased $11.7 million as compared to the same period in 2019, and segment income margin increased to 14.3 percent from 12.9 percent over the same periods.

The increase in segment income was primarily due to higher unit volumes, a more favorable mix of products sold and higher pension income, partially offset by the negative impact of a $3.5 million charge for the purchase accounting write-up of inventory of the Albéa Dispensing Business.

Segment income of the plastic container business for the second quarter of 2020 increased $9.6 million as compared to the same period in 2019, and segment income margin increased to 13.6 percent from 8.7 percent over the same periods.

The increase in segment income was primarily attributable to higher volumes, lower manufacturing costs including for raw materials and higher pension income, partially offset by the unfavorable impact of a $2.8 million charge for a non-commercial legal dispute relating to prior periods.

Interest and Other Debt Expense.

Interest and other debt expense before loss on early extinguishment of debt for the first quarter of 2020 decreased $3.6 million to $23.5 million as compared to $27.1 million in the same period in 2019.

This decrease was primarily due to lower weighted average interest rates and lower weighted average outstanding borrowings during the quarter as a result of the utilization of prior year free cash flow to repay debt.

Weighted average interest rates were lower during the current quarter due to the redemption of all outstanding 5½% Senior Notes due 2022 in the third quarter of 2019 and lower variable market rates.

In February 2020, we issued the 2¼% Notes and the additional 4⅛% Notes.

The net proceeds from these issuances were utilized to prepay outstanding U.S.

A term loans under the Credit Agreement.

In conjunction with this prepayment, we recognized a loss on early extinguishment of debt of $1.5 million in the first quarter of 2020.

Interest and other debt expense for the second quarter of 2020 decreased $2.6 million to $25.8 million as compared to $28.4 million in the same period in 2019.

This decrease was due to lower weighted average interest rates, partially offset by higher average outstanding borrowings primarily related to the acquisition of the Albéa Dispensing Business and additional revolving loan borrowings in the current year quarter principally to hold cash and cash equivalents to ensure liquidity against potential credit market disruptions as a result of the COVID-19 pandemic.

We repaid such additional revolving loan borrowings in June 2020.

Weighted average interest rates were lower during the current quarter due to lower variable market rates and the redemption of all outstanding 5½% Senior Notes due 2022 in the third quarter of 2019.

Provision for Income Taxes.

The effective tax rates were 25.4 percent and 21.6 percent for the first quarters of 2020 and 2019, respectively.

The effective tax rate in the first quarter of 2019 was favorably impacted by the timing of certain tax deductions recognized in the quarter and changes in certain state tax rates.

The effective tax rates were 25.8 percent and 23.0 percent for the second quarters of 2020 and 2019, respectively.

The effective tax rate in the second quarter of 2020 was unfavorably impacted by certain nondeductible expenses principally related to costs incurred for the acquisition of the Albéa Dispensing Business.

The effective tax rate in the second quarter of 2019 was favorably impacted by the resolution of a prior year tax audit.

Six Months Ended June 30, 2020 Compared with Six Months Ended June, 2019

Consolidated net sales were $2.21 billion in the first six months of 2020, a 4.1 percent increase as compared to the first six months of 2019 primarily as a result of higher volumes in each of our businesses, including the impact from acquisitions, and a more favorable mix of products sold in the closures business, partially offset by the pass through of lower raw material costs across all businesses, a less favorable mix of products sold in the metal and plastic container businesses and the impact of unfavorable foreign currency translation.

Income before interest and income taxes for the first six months of 2020 increased by $78.1 million as compared to the same period in 2019 primarily due to higher volumes and strong operating performance in each of the businesses, lower rationalization charges, higher pension income and a more favorable mix of products sold in the closures business.

These increases were partially offset by higher selling, general and administrative expenses, a less favorable mix of products sold in the metal container business, the negative impact from the purchase accounting write-up of acquired inventory of the Albéa Dispensing Business and the unfavorable impact of a charge in the plastic container business for a non-commercial legal dispute relating to prior periods.

Results for the first six months of 2020 and 2019 included rationalization charges of $4.7 million and $45.4 million, respectively.

Results for the first six months of 2020 also included costs attributed to acquisitions of $18.3 million and a loss on early extinguishment of debt of $1.5 million.

Results for the first six months of 2020 and 2019 also included other pension and postretirement income of $19.4 million and $9.0 million, respectively.

Net income for the first six months of 2020 was $135.8 million as compared to $77.7 million for the same period in 2019.

Net income per diluted share for the first six months of 2020 was $1.22 as compared to $0.70 for the same period in 2019.

The $86.5 million increase in consolidated net sales in the first six months of 2020 as compared to the first six months of 2019 was the result of higher net sales across all businesses.

Net sales for the metal container business increased $23.0 million, or 2.1 percent, in the first six months of 2020 as compared to the same period in 2019.

This increase was primarily the result of higher unit volumes of approximately eleven percent, partially offset by the pass through of lower raw material and other manufacturing costs, a less favorable mix of products sold and the impact of unfavorable foreign currency translation of approximately $4.0 million.

The increase in unit volumes was primarily the result of continued higher demand for products consumed in the home and lower volumes in the first quarter of 2019 as a result of the 2018 pre-buy of products by customers in anticipation of significant metal inflation in 2019, partially offset by the volume benefit in the prior year from a certain customer that increased purchases following a destocking of inventory in previous periods.

Net sales for the closures business increased $48.1 million, or 6.7 percent, in the first six months of 2020 as compared to the same period in 2019.

This increase was primarily the result of higher unit volumes of approximately four percent and a more favorable mix of products sold, partially offset by the pass through of lower raw material costs and the impact of unfavorable foreign currency translation of approximately $12.0 million.

The increase in unit volumes was principally the result of strong volumes for certain consumer health, hygiene, personal care and food products, the inclusion of the recent acquisitions of Cobra Plastics and the Albéa Dispensing Business and lower volumes in the first quarter of 2019 as a result of the 2018 pre-buy of products by customers in anticipation of significant metal inflation in 2019.

These volume gains were partially offset by weak demand for certain beauty and beverage products.

Net sales for the plastic container business increased $15.4 million, or 4.8 percent, in the first six months of 2020 as compared to the same period in 2019.

This increase was primarily due to higher volumes of approximately ten percent, partially offset by the pass through of lower raw material costs, a less favorable mix of products sold and the impact of unfavorable foreign currency translation of approximately $1.0 million.

The increase in volumes was due primarily to continued higher demand for certain food and consumer health and hygiene products.

Gross Profit .

Gross profit margin increased 2.0 percentage points to 18.5 percent in the first six months of 2020 as compared to the same period in 2019 for the reasons discussed below in "Income before Interest and Income Taxes".

Selling, General and Administrative Expenses .

Selling, general and administrative expenses as a percentage of consolidated net sales increased to 8.6 percent for the first six months of 2020 as compared to 7.4 percent in the same period in 2019.

Selling, general and administrative expenses increased $32.7 million to $190.5 million for the first six months of 2020 as compared to $157.8 million for the same period in 2019.

The increase in selling, general and administrative expenses was principally the result of costs attributed to announced acquisitions of $18.3 million, the inclusion of selling, general and administrative expenses from Cobra Plastics and the Albéa Dispensing Business which were acquired in 2020, one-time plant employee incentive payments in the first quarter of 2020 and a charge of $2.8 million for a non-commercial legal dispute relating to prior periods.

Income before Interest and Income Taxes .

Income before interest and income taxes for the first six months of 2020 increased by $78.1 million as compared to the first six months of 2019, and margins increased to 10.6 percent from 7.3 percent over the same periods.

The increase in income before interest and income taxes was primarily due to higher income in each of the businesses, partially offset by higher selling, general and administrative expenses.

Rationalization charges were $4.7 million and $45.4 million for the first six months of 2020 and 2019, respectively.

Segment income of the metal container business for the first six months of 2020 increased $66.4 million as compared to the same period in 2019, and segment income margin increased to 10.8 percent from 4.9 percent over the same periods.

The increase in segment income was primarily attributable to lower rationalization charges, higher unit volumes and higher pension income, partially offset by a less favorable mix of products sold.

Rationalization charges were $3.1 million and $39.3 million in the first six months of 2020 and 2019, respectively.

Segment income of the closures business for the first six months of 2020 increased $16.7 million, as compared to the same period in 2019, and segment income margin increased to 13.5 percent from 12.1 percent over the same periods.

The increase in segment income was primarily due to higher unit volumes, a more favorable mix of products sold, higher pension income and lower rationalization charges, partially offset by the negative impact from the purchase accounting write-up of inventory of the Albéa Dispensing Business.

Segment income of the plastic container business for the first six months of 2020 increased $19.5 million as compared to the same period in 2019, and segment income margin increased to 13.5 percent from 8.0 percent over the same periods.

The increase in segment income was primarily attributable to higher volumes, lower manufacturing costs including for raw materials and higher pension income, partially offset by the unfavorable impact of a charge for a non-commercial legal dispute relating to prior periods.

Interest and Other Debt Expense.

Interest and other debt expense before loss on early extinguishment of debt for the first six months of 2020 decreased $6.2 million to $49.3 million as compared to $55.5 million in the same period in 2019 primarily due to lower weighted average interest rates, partially offset by higher average outstanding borrowings primarily related to the acquisition of the Albéa Dispensing Business and additional revolving loan borrowings in the current year period principally to hold cash and cash equivalents to ensure liquidity against potential credit market disruptions as a result of the COVID-19 pandemic.

We repaid such additional revolving loan borrowings in June 2020.

Weighted average interest rates were lower during the first six months of 2020 due to lower variable market rates and the redemption of all outstanding 5½% Senior Notes due 2022 in the third quarter of 2019.

In the first quarter of 2020, we recognized a loss on early extinguishment of debt of $1.5 million in conjunction with the prepayment of U.S.

term loans under the Credit Agreement.

Provision for Income Taxes.

The effective tax rates were 25.6 percent and 22.2 percent for the first six months of 2020 and 2019, respectively.

The effective tax rate for the first six months of 2020 was unfavorably impacted by certain nondeductible expenses principally related to costs incurred for the acquisition of the Albéa Dispensing Business.

The effective tax rate for the first six months of 2019 was favorably impacted by the timing of certain tax deductions and the resolution of a prior year tax audit.

CAPITAL RESOURCES AND LIQUIDITY

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We used the net proceeds from these issuances and revolving loan borrowings under the Credit Agreement to prepay all of our outstanding U.S.

A term loans under the Credit Agreement.

term loans under the Credit Agreement.

As a result of this prepayment, we recorded a pre-tax charge for the loss on early extinguishment of debt of $1.5 million during the first quarter of 2020 for the write-off of unamortized debt issuance costs.

You should also read Note 7 to our Condensed Consolidated Financial Statements for the three months ended March 31, 2020 included elsewhere in this Quarterly Report.

For the three months ended March 31, 2020, we used net borrowings of revolving loans of $828.1 million and net proceeds from the issuance of the 2¼% Notes and the additional 4⅛% Notes of $739.7 million to fund repayments of long-term debt of $766.2 million, cash used in operations of $168.1 million, decreases in outstanding checks of $79.0 million, net capital expenditures and other investing activities of $64.6 million, the purchase of Cobra Plastics for $39.8 million, dividends paid on our common stock of $13.8 million, repurchases of our common stock of $12.7 million, debt issuance costs of $7.5 million and to increase cash and cash equivalents (including the negative effect of exchange rate changes of $5.1 million) by $411.0 million.

For the three months ended March 31, 2019, we used net borrowings of revolving loans of $408.3 million to fund cash used in operations of $155.8 million, decreases in outstanding checks of $83.7 million, net capital expenditures and other investing activities of $61.7 million, dividends paid on our common stock of $14.2 million, repayments of long-term debt of $8.2 million

and repurchases of our common stock of $15.0 million and to increase cash and cash equivalents (including the negative effect of exchange rate changes of $1.1 million) by $68.6 million.

To ensure access to liquidity in light of the coronavirus (COVID-19) crisis, we borrowed $500 million of revolving loans under the Credit Agreement in March 2020 to increase our cash and cash equivalents.

Accordingly, we held cash and cash equivalents of $614.8 million at March 31, 2020.

At March 31, 2020, we had $827.0 million of revolving loans outstanding under the Credit Agreement.

After taking into account outstanding letters of credit, the available portion of revolving loans under the Credit Agreement at March 31, 2020 was $346.3 million and Cdn $15.0 million.

On April 17, 2020, we and certain of our subsidiaries entered into the Incremental Term Loan Commitment Agreement pursuant to the Credit Agreement, which provided for the lenders thereunder to lend to us, on a delayed draw basis, $900 million of Incremental U.S.

Term Loans to fund the purchase price for the acquisition of the Albéa Dispensing Business.

On June 1, 2020, we borrowed the Incremental U.S.

Term Loans to fund the purchase price for the acquisition of the Albéa Dispensing Business.

On June 1, 2020, we acquired the Albéa Dispensing Business.

This business operates a global network of ten manufacturing facilities across North America, Europe, South America and Asia.

We funded the purchase price for this acquisition with the Incremental U.S.

Term Loans and revolving loan borrowings under the Credit Agreement.

You should also read Notes 3 and 8 to our Condensed Consolidated Financial Statements for the three and six months ended June 30, 2020 included elsewhere in this Quarterly Report.

For the six months ended June 30, 2020, we used net proceeds from the issuance of the 2¼% Notes and the additional 4⅛% Notes and the Incremental U.S.

Term Loans of $1,639.7 million, net borrowings of revolving loans of $356.4 million and cash and cash equivalents of $10.0 million (excluding the negative effect of exchange rate changes of $2.7 million) to fund the purchases of the Albéa Dispensing Business and Cobra Plastics for $941.1 million, repayments of long-term debt of $766.2 million, net capital expenditures and other investing activities of $105.5 million, decreases in outstanding checks of $79.0 million, cash used in operations of $63.8 million, dividends paid on our common stock of $27.1 million, repurchases of our common stock of $13.1 million and debt issuance costs of $10.3 million.

For the six months ended June 30, 2019, we used net borrowings of revolving loans of $416.0 million to fund cash used in operations of $129.1 million, decreases in outstanding checks of $83.7 million, net capital expenditures and other investing activities of $115.6 million, dividends paid on our common stock of $26.4 million, repayments of long-term debt of $8.2 million and repurchases of our common stock of $15.2 million and to increase cash and cash equivalents (including the positive effect of exchange rate changes of $0.7 million) by $38.5 million.

At June 30, 2020, we had $354.0 million of revolving loans outstanding under the Credit Agreement.

After taking into account outstanding letters of credit, the available portion of revolving loans under the Credit Agreement at June 30, 2020 was $819.3 million and Cdn $15.0 million.

Because we sell metal containers and closures used in fruit and vegetable pack processing, we have seasonal sales.

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We use a disciplined approach to identify opportunities that generate attractive cash returns.

Under our rationalization plans, we made cash payments of $3.6 million and $0.8 million for the three months ended March 31, 2020 and 2019, respectively.

Exclusive of the footprint optimization plan for our metal container business and our resulting withdrawal from the Central States Pension Plan announced in 2019, remaining expenses for our rationalization plans of $1.9 million are expected primarily through 2020 and remaining cash expenditures for our rationalization plans of $3.6 million are expected through 2023.

Under our rationalization plans, we made cash payments of $3.6 million and $1.9 million for the six months ended June 30, 2020 and 2019, respectively.

Exclusive of the footprint optimization plan for our metal container business and our resulting withdrawal from the Central States Pension Plan announced in 2019, remaining expenses and cash expenditures for our rationalization plans are expected to be $1.9 million and $3.4 million, respectively.

Remaining expenses for the accretion of interest for the withdrawal liability related to the Central States Pension Plan are expected to average approximately $1.1 million per year and be recognized annually for the next twenty years, and remaining cash expenditures for the withdrawal liability related to the Central States Pension Plan are expected to be approximately $3.1 million annually for the next twenty years, beginning in 2020.

You should also read Note 4 to our Condensed Consolidated Financial Statements for the three months ended March 31, 2020 included elsewhere in this Quarterly Report.

You should also read Note 4 to our Condensed Consolidated Financial Statements for the three and six months ended June 30, 2020 included elsewhere in this Quarterly Report.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis