What changed in this filing

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Item 1. Financial Statements

2023-05-03 compared with 2022-11-03 · 103 added, 169 removed, 324 unchanged (46% of the section changed)

3 unchanged sentences

(Dollars in thousands)

30, 2022 Sept.

30, 2021 Dec.

March 31, 2023 March 31, 2022 Dec.

(unaudited) (unaudited)

31 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

For the three and nine months ended September 30, 2022 and 2021

For the three months ended March 31, 2023 and 2022

(Dollars and shares in thousands, except per share amounts)

Three Months Ended Nine Months Ended

30, 2022 Sept.

30, 2021 Sept.

30, 2022 Sept.

Net sales $ 1,418,281 $ 1,441,886

3 unchanged sentences

Rationalization charges 4,121 1,379

Other pension and postretirement income ( 11,051 ) ( 12,297 ) ( 33,729 ) ( 37,934 )

Other pension and postretirement expense (income) 1,286 ( 11,329 )

Income before interest and income taxes 131,228 143,392

2 unchanged sentences

Loss on early extinguishment of debt

— — 1,481 883

Interest and other debt expense 36,766 30,830

12 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the three and nine months ended September 30, 2022 and 2021

For the three months ended March 31, 2023 and 2022

(Dollars in thousands)

Three Months Ended Nine Months Ended

30, 2022 Sept.

30, 2021 Sept.

30, 2022 Sept.

Net income $ 72,029 $ 84,875

3 unchanged sentences

Foreign currency translation 19,721 12,350

Other comprehensive loss ( 57,140 ) ( 27,725 ) ( 105,528 ) ( 30,205 )

Other comprehensive income 20,740 15,186

Comprehensive income $ 92,769 $ 100,061

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the nine months ended September 30, 2022 and 2021

For the three months ended March 31, 2023 and 2022

(Dollars in thousands)

26 unchanged sentences

Dividends paid on common stock ( 20,575 ) ( 18,722 )

Debt issuance costs — ( 4,909 )

Repurchase of common stock ( 13,412 ) ( 11,474 )

Net cash (used in) provided by financing activities ( 90,561 ) 761,886

Net cash provided by (used in) financing activities 610,375 ( 35,843 )

Effect of exchange rate changes on cash and cash equivalents 3,828 1,396

8 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the three and nine months ended September 30, 2022 and 2021

For the three months ended March 31, 2023 and 2022

(Dollars and shares in thousands, except per share amounts)

Three Months Ended Nine Months Ended

30, 2022 Sept.

30, 2021 Sept.

30, 2022 Sept.

Common stock - shares outstanding

3 unchanged sentences

Repurchases of common stock

— — ( 650 ) —

Balance at end of period

7 unchanged sentences

Stock compensation expense

4,047 5,268 12,917 15,605

Net issuance of treasury stock for vested restricted stock units ( 1,363 ) ( 2,126 )

12 unchanged sentences

( 345,310 ) ( 259,828 )

Other comprehensive loss ( 57,140 ) ( 27,725 ) ( 105,528 ) ( 30,205 )

Other comprehensive income 20,740 15,186

Balance at end of period

5 unchanged sentences

Repurchases of common stock

— — ( 26,367 ) —

Balance at end of period

5 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Information at September 30, 2022 and 2021 and for the

three and nine months then ended is unaudited)

(Information at March 31, 2023 and 2022 and for the

three months then ended is unaudited)

Significant Accounting Policies

7 unchanged sentences

You should read the accompanying condensed consolidated financial statements in conjunction with our consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022.

Goodwill and Other Intangible Assets.

We review goodwill and other indefinite-lived intangible assets for impairment as of July 1 of each year and more frequently if circumstances indicate a possible impairment.

We determined that our goodwill and other indefinite-lived intangible assets were not impaired in our annual 2022 assessment performed during the third quarter.

The following tables present our revenues disaggregated by reportable segment and geography as they best depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.

Revenues by segment were as follows:

Three Months Ended Nine Months Ended

30, 2022 Sept.

30, 2021 Sept.

30, 2022 Sept.

Revenues by segment for the three months ended March 31 were as follows:

(Dollars in thousands)

3 unchanged sentences

$ 1,418,281 $ 1,441,886

Revenues by geography were as follows:

Three Months Ended Nine Months Ended

30, 2022 Sept.

30, 2021 Sept.

30, 2022 Sept.

Revenues by geography for the three months ended March 31 were as follows:

(Dollars in thousands)

2 unchanged sentences

$ 1,418,281 $ 1,441,886

Our contract assets primarily consist of unbilled accounts receivable related to over time revenue recognition and were $ 113.3 million, $ 94.6 million, and $ 78.2 million as of September 30, 2022 and 2021 and December 31, 2021, respectively.

Our contract assets primarily consist of unbilled accounts receivable related to over time revenue recognition and were $ 108.5 million, $ 99.1 million, and $ 110.2 million as of March 31, 2023 and 2022 and December 31, 2022, respectively.

Unbilled receivables are included in trade accounts receivable, net on our Condensed Consolidated Balance Sheets.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Information at September 30, 2022 and 2021 and for the

three and nine months then ended is unaudited)

(Information at March 31, 2023 and 2022 and for the

three months then ended is unaudited)

Rationalization Charges

1 unchanged sentence

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

Rationalization charges by segment were as follows:

Three Months Ended Nine Months Ended

30, 2022 Sept.

30, 2021 Sept.

30, 2022 Sept.

Rationalization charges by segment for the three months ended March 31 were as follows:

(Dollars in thousands)

5 unchanged sentences

and Benefits Plant

Costs Non-Cash

Write-Down Total

(Dollars in thousands)

3 unchanged sentences

Utilized and currency translation ( 2,813 ) ( 2,319 ) ( 5,132 )

Balance at September 30, 2022

Balance at March 31, 2023

$ 30,625 $ 164 $ 30,789

Non-cash asset write-downs were the result of comparing the carrying value of certain production related assets to their fair value using estimated future discounted cash flows, a Level 3 fair value measurement (see Note 7 for information regarding a Level 3 fair value measurement).

Rationalization reserves as of September 30, 2022 were recorded in our Condensed Consolidated Balance Sheet as accrued liabilities of $ 4.4 million and other liabilities of $ 36.2 million.

Rationalization reserves as of March 31, 2023 were recorded in our Condensed Consolidated Balance Sheet as accrued liabilities of $ 3.2 million and other liabilities of $ 27.6 million.

Excluding the impact of our withdrawal from the Central States, Southeast and Southwest Areas Pension Plan, or the Central States Pension Plan, in 2019, remaining expenses and cash expenditures for our rationalization plans are expected to be $ 1.7 million and $ 5.4 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 $ 0.9 million per year and be recognized annually through 2040, and remaining cash expenditures for the withdrawal liability related to the Central States Pension Plan are expected to be approximately $ 3.1 million annually through 2040.

SILGAN HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Information at September 30, 2022 and 2021 and for the

three and nine months then ended is unaudited)

(Information at March 31, 2023 and 2022 and for the

three months then ended is unaudited)

Accumulated Other Comprehensive Loss

9 unchanged sentences

$ ( 156,733 ) $ ( 772 ) $ ( 187,805 ) $ ( 345,310 )

Other comprehensive loss before reclassifications — 3,135 ( 109,957 ) ( 106,822 )

Other comprehensive income before reclassifications — ( 1,714 ) 19,721 18,007

Amounts reclassified from accumulated other

1 unchanged sentence

2,306 427 — 2,733

Other comprehensive loss 1,731 2,698 ( 109,957 ) ( 105,528 )

Balance at September 30, 2022

Other comprehensive income 2,306 ( 1,287 ) 19,721 20,740

Balance at March 31, 2023

$ ( 154,427 ) $ ( 2,059 ) $ ( 168,084 ) $ ( 324,570 )

The amounts reclassified to earnings from the unrecognized net defined benefit plan costs component of accumulated other comprehensive loss for the three and nine months ended September 30, 2022 were net (losses) of $( 0.9 ) million and $( 2.4 ) million, respectively, excluding income tax benefits of $ 0.3 million and $ 0.7 million, respectively.

For the three and nine months ended September 30, 2022, these net (losses) consisted of amortization of net actuarial (losses) of $( 1.3 ) million and $( 3.5 ) million and amortization of net prior service credit of $ 0.4 million and $ 1.1 million, respectively.

The amounts reclassified to earnings from the unrecognized net defined benefit plan costs component of accumulated other comprehensive loss for the three months ended March 31, 2023 were net (losses) of $( 2.6 ) million, excluding income tax benefits of $ 0.3 million.

These net (losses) consisted of amortization of net actuarial (losses) of $( 2.8 ) million and amortization of net prior service credit of $ 0.2 million.

Amortization of net actuarial losses and net prior service credit was recorded in other pension and postretirement income in our Condensed Consolidated Statements of Income.

See Note 10 for further information.

The amounts reclassified to earnings from the change in fair value of derivatives component of accumulated other comprehensive loss for the three and nine months ended September 30, 2022 were not significant.

Other comprehensive loss before reclassifications related to foreign currency translation for the three and nine months ended September 30, 2022 consisted of (i) foreign currency (losses) related to translation of quarter end financial statements of foreign subsidiaries utilizing a functional currency other than the U.S.

dollar of $( 82.5 ) million and $( 168.1 ) million, respectively, (ii) foreign currency gains related to intra-entity foreign currency transactions that are of a long-term investment nature of $ 1.2 million and $ 3.1 million, respectively, and (iii) foreign currency gains related to our net investment hedges of $ 30.2 million and $ 72.2 million, respectively, excluding income tax (provisions) of $( 7.1 ) million and $( 17.1 ) million, respectively.

The amounts reclassified to earnings from the change in fair value of derivatives component of accumulated other comprehensive loss for the three months ended March 31, 2023 were not significant.

Other comprehensive loss before reclassifications related to foreign currency translation for the three months ended March 31, 2023 consisted of (i) foreign currency gains related to translation of quarter end financial statements of foreign subsidiaries utilizing a functional currency other than the U.S.

dollar of $ 25.6 million, (ii) foreign currency gains related to intra-entity foreign currency transactions that are of a long-term investment nature of $ 0.8 million, and (iii) foreign currency (losses) related to our net investment hedges of $( 8.8 ) million, excluding an income tax benefit of $ 2.1 million.

See Note 7 for further discussion.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Information at September 30, 2022 and 2021 and for the

three and nine months then ended is unaudited)

(Information at March 31, 2023 and 2022 and for the

three months then ended is unaudited)

Inventories consisted of the following:

30, 2022 Sept.

30, 2021 Dec.

March 31, 2023 March 31, 2022 Dec.

(Dollars in thousands)

6 unchanged sentences

$ 1,055,079 $ 1,018,685 $ 769,403

During the nine months ended September 30, 2022, we implemented an inventory management program which resulted in permanent reductions of inventories valued under the last-in, first-out basis.

This resulted in liquidations of inventory layers carried at costs prevailing in prior years and thereby decreased cost of goods sold by $ 26.2 million and $ 33.5 million for the three and nine months ended September 20, 2022, respectively.

Long-Term Debt

Long-term debt consisted of the following:

30, 2022 Sept.

30, 2021 Dec.

March 31, 2023 March 31, 2022 Dec.

(Dollars in thousands)

6 unchanged sentences

4⅛% Senior Notes 600,000 600,000 600,000

636,740 753,285 739,180

2¼% Senior Notes 543,200 556,300 533,600

2¼% Senior Notes 489,800 579,450 568,600

1.4% Senior Secured Notes 500,000 500,000 500,000

5 unchanged sentences

$ 3,370,346 $ 3,445,633 $ 3,345,381

At September 30, 2022, the current portion of long-term debt consisted of $ 497.0 million of bank revolving loans and $ 50.0 million of U.S.

term loans under our amended and restated senior secured credit facility, as amended, or the Credit Agreement, $ 41.6 million of other foreign bank revolving and term loans and $ 2.7 million of finance leases.

At March 31, 2023, the current portion of long-term debt consisted of $ 755.0 million of U.S.

revolving loans under our amended and restated senior secured credit facility, as amended, or the Credit Agreement, $ 27.4 million of other foreign bank revolving and term loans and $ 2.4 million of finance leases.

SILGAN HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Information at September 30, 2022 and 2021 and for the

three and nine months then ended is unaudited)

On March 28, 2022, we redeemed all $ 300.0 million aggregate principal amount of our outstanding 4¾% Senior Notes due 2025, or the 4¾% Notes, at a redemption price of 100 percent of their principal amount plus accrued and unpaid interest to the redemption date.

We funded this redemption with revolving loan borrowings under the Credit Agreement and cash on hand.

As a result of this redemption, we recorded a pre-tax charge for the loss on early extinguishment of debt of $ 1.5 million during the first quarter of 2022 for the write-off of unamortized debt issuance costs.

(Information at March 31, 2023 and 2022 and for the

three months then ended is unaudited)

Financial Instruments

1 unchanged sentence

Due to their short-term maturity, the carrying amounts of trade accounts receivable and trade accounts payable approximate their fair market values.

The following table summarizes the carrying amounts and estimated fair values of our other financial instruments at September 30, 2022:

The following table summarizes the carrying amounts and estimated fair values of our other financial instruments at March 31, 2023:

(Dollars in thousands)

13 unchanged sentences

Financial Instruments Measured at Fair Value

The financial assets and liabilities that were measured on a recurring basis at September 30, 2022 consisted of our cash and cash equivalents and derivative instruments.

The financial assets and liabilities that were measured on a recurring basis at March 31, 2023 consisted of our cash and cash equivalents and derivative instruments.

We measured the fair value of cash and cash equivalents using Level 1 inputs.

6 unchanged sentences

Fair values of the 3¼% Senior Notes, 4⅛% Senior Notes, 2¼% Senior Notes and 1.4% Senior Secured Notes were estimated based on quoted market prices, a Level 1 input.

SILGAN HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Information at September 30, 2022 and 2021 and for the

three and nine months then ended is unaudited)

Derivative Instruments and Hedging Activities

1 unchanged sentence

Changes in fair values of derivatives are recorded in each period in earnings or comprehensive income, depending on whether a derivative is designated as part of a hedge transaction and, if it is, the type of hedge transaction.

SILGAN HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Information at March 31, 2023 and 2022 and for the

three months then ended is unaudited)

We utilize certain derivative financial instruments to manage a portion of our interest rate and natural gas cost exposures.

6 unchanged sentences

Interest Rate Swap Agreements

We have entered into two U.S.

We had two U.S.

dollar interest rate swap agreements, each for $ 50.0 million notional principal amount, to manage a portion of our exposure to interest rate fluctuations, with a fixed rate of 2.878 percent, that matured on March 24, 2023.

In March 2023, we entered into four U.S.

dollar interest rate swap agreements, each for $ 75.0 million notional principal amount, to manage a portion of our exposure to interest rate fluctuations.

These agreements have a fixed rate of 2.878 percent and mature on March 24, 2023.

The difference between amounts to be paid or received on our interest rate swap agreements is recorded in interest and other debt expense in our Condensed Consolidated Statements of Income and was not significant for the three and nine months ended September 30, 2022.

These agreements are with a financial institution which is expected to fully perform under the terms thereof.

The total fair value of our interest rate swap agreements in effect at September 30, 2022 was not significant.

These agreements have a fixed rate ranging from 3.930 percent to 3.942 percent, mature on April 3, 2026 and were entered into with financial institutions which are expected to fully perform under the terms thereof.

The total fair value of our interest rate swaps agreements in effect at March 31, 2023 was not significant.

Natural Gas Swap Agreements

We have entered into natural gas swap agreements to manage a portion of our exposure to fluctuations in natural gas prices.

The difference between amounts to be paid or received on our natural gas swap agreements is recorded in cost of goods sold in our Condensed Consolidated Statements of Income and was not significant for the three and nine months ended September 30, 2022.

These agreements are with a financial institution which is expected to fully perform under the terms thereof.

The total fair value of our natural gas swap agreements in effect at September 30, 2022 was not significant.

The total fair value of our natural gas swap agreements in effect at March 31, 2023 was not significant.

Foreign Currency Exchange Rate Risk

1 unchanged sentence

In addition, where available, we have borrowed funds in local currency or implemented certain internal hedging strategies to minimize our foreign currency exchange rate risk related to foreign operations, including net investment hedges related to the 3¼% Senior Notes which are Euro denominated.

Foreign currency gains related to our net investment hedges included in accumulated other comprehensive loss for the three and nine months ended September 30, 2022 were $ 30.2 million and $ 72.2 million, respectively.

Foreign currency (losses) related to our net investment hedges included in accumulated other comprehensive loss for the three months ended March 31, 2023 were $( 8.8 ) million.

SILGAN HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Information at September 30, 2022 and 2021 and for the

three and nine months then ended is unaudited)

(Information at March 31, 2023 and 2022 and for the

three months then ended is unaudited)

Commitments and Contingencies

On July 12, 2022, we concluded a settlement with the European Commission to end a long-running investigation of our metal packaging operations in Europe.

This investigation was started in 2015 by the German antitrust authority and was transferred in 2018 to the European Commission.

With the settlement, the European Commission closed its investigation and we paid a fine of € 23.9 million in October 2022, although we do not fully concur with the facts and legal qualifications put forth by the European Commission.

We are a party to other legal proceedings, contract disputes and claims arising in the ordinary course of our business.

We are not a party to, and none of our properties are subject to, any pending legal proceedings which could have a material adverse effect on our business or financial condition.

Supply Chain Finance Program

We have a supply chain finance (“SCF”) program with a major global financial institution.

Under this SCF program, qualifying suppliers may elect, but are not obligated, to sell their receivables from us to such financial institution.

We agree to pay the financial institution the stated amount of invoices from our suppliers electing to participate on the original maturity dates of the invoices.

We may terminate our agreement with the financial institution upon at least 30 days’ notice, and the financial institution may terminate our agreement upon at least 10 days’ notice.

Additionally, suppliers who elect to participate in this SCF program may terminate their participation upon at least 30 days’ notice.

The suppliers' invoices sold under this SCF program can be outstanding up to 210 days from the invoice date.

Suppliers’ invoices included in this SCF program were $ 318.4 million, $ 372.2 million and $ 346.8 million at March 31, 2023 and 2022 and December 31, 2022, respectively, and were included in accounts payable in our Condensed Consolidated Balance Sheets.

Retirement Benefits

The components of the net periodic pension benefit credit were as follows:

Three Months Ended Nine Months Ended

30, 2022 Sept.

30, 2021 Sept.

30, 2022 Sept.

The components of the net periodic pension benefit cost (credit) for the three months ended March 31 were as follows:

(Dollars in thousands)

4 unchanged sentences

Amortization of actuarial losses 2,945 1,155

Net periodic benefit credit $ ( 7,720 ) $ ( 8,605 ) $ ( 23,060 ) $ ( 25,847 )

The components of the net periodic other postretirement benefit credit were as follows:

Three Months Ended Nine Months Ended

30, 2022 Sept.

30, 2021 Sept.

30, 2022 Sept.

Net periodic benefit cost (credit) $ 3,722 $ ( 7,645 )

The components of the net periodic other postretirement benefit credit for the three months ended March 31 were as follows:

(Dollars in thousands)

10 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Information at September 30, 2022 and 2021 and for the

three and nine months then ended is unaudited)

(Information at March 31, 2023 and 2022 and for the

three months then ended is unaudited)

Treasury Stock

On March 4, 2022, our Board of Directors authorized the repurchase by us of up to an aggregate of $ 300.0 million of our common stock by various means from time to time through and including December 31, 2026.

During the nine months ended September 30, 2022, we repurchased an aggregate of 649,727 shares of our common stock at an average price per share of $ 40.56 , for a total purchase price of $ 26.4 million.

At September 30, 2022, we had approximately $ 273.6 million remaining under this authorization for the repurchase of our common stock.

During the first nine months of 2022, we issued 765,917 treasury shares which had an average cost of $ 3.19 per share for restricted stock units that vested during the period.

In accordance with the Silgan Holdings Inc.

Amended and Restated 2004 Stock Incentive Plan, we repurchased 310,904 shares of our common stock at an average cost of $ 41.92 to satisfy minimum employee withholding tax requirements resulting from the vesting of such restricted stock units.

During the three months ended March 31, 2023, we repurchased an aggregate of 92,996 shares of our common stock at an average price per share of $ 51.60 , for a total purchase price of $ 4.8 million.

At March 31, 2023, we had approximately $ 263.1 million remaining under this authorization for the repurchase of our common stock.

During the first three months of 2023, we issued 427,763 treasury shares which had an average cost of $ 3.19 per share for restricted stock units that vested during the period that had been previously issued under the Silgan Holdings Inc.

Amended and Restated 2004 Stock Incentive Plan.

In accordance with the applicable agreements for such restricted stock units, we repurchased 161,328 shares of our common stock at an average cost of $ 53.38 to satisfy minimum employee withholding tax requirements resulting from the vesting of such restricted stock units.

We account for treasury shares using the first-in, first-out (FIFO) cost method.

As of September 30, 2022, 64,896,981 shares of our common stock were held in treasury.

Stock-Based Compensation

We currently have one stock-based compensation plan in effect under which we have issued options and restricted stock units to our officers, other key employees and outside directors.

During the first nine months of 2022, 429,731 restricted stock units were granted to certain of our officers, other key employees and outside directors.

The fair value of these restricted stock units at the grant date was $ 17.9 million, which is being amortized ratably over the respective vesting period from the grant date.

SILGAN HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Information at September 30, 2022 and 2021 and for the

three and nine months then ended is unaudited)

As of March 31, 2023, 64,860,050 shares of our common stock were held in treasury.

Segment Information

Reportable segment information was as follows:

We evaluate performance of our business segments and allocate resources based on the adjusted EBIT of our business segments.

Adjusted EBIT is not a defined term under GAAP.

We define adjusted EBIT as income before interest and income taxes excluding acquired intangible asset amortization expense, other pension expense (income) for U.S.

pension plans, rationalization charges, the impact from charges for the write-up of acquired inventory required under purchase accounting, the charge for the European Commission settlement and costs attributed to announced acquisitions.

We began using adjusted EBIT in 2023.

Previously, we used segment income, without any adjustments, for our business segments.

We have provided adjusted EBIT for 2022 below for comparative purposes.

Adjusted EBIT should not be considered in isolation or as a substitute for income before interest and income taxes or any other financial data prepared in accordance with GAAP and may not be comparable to calculations of similarly titled measures by other companies.

Reportable segment information for the three months ended March 31 was as follows:

Dispensing and Specialty Closures Metal

2 unchanged sentences

(Dollars in thousands)

Three Months Ended September 30, 2022

Net sales $ 575,530 $ 1,212,034 $ 182,881 $ — $ 1,970,445

Depreciation and amortization (1)

36,056 17,811 9,882 39 63,788

Rationalization charges 346 2,480 ( 100 ) — 2,726

Segment income 79,163 121,267 24,262 ( 5,282 ) 219,410

Three Months Ended September 30, 2021

Net sales $ 533,329 $ 942,125 $ 175,616 $ — $ 1,651,070

Depreciation and amortization (1)

30,830 21,231 10,072 38 62,171

Rationalization charges 406 1,822 87 — 2,315

Segment income 60,090 94,271 22,704 ( 9,148 ) 167,917

Nine Months Ended September 30, 2022

Three months ended March 31, 2023

Net sales $ 579,932 $ 670,096 $ 168,253 $ — $ 1,418,281

Depreciation and amortization (1)

109,216 58,749 29,699 120 197,784

Rationalization charges 346 7,182 5 — 7,533

Segment income (2)

257,825 225,634 79,846 ( 42,486 ) 520,819

Nine Months Ended September 30, 2021

Adjusted EBIT 82,936 52,400 20,034 ( 5,966 ) 149,404

Depreciation 24,759 17,988 8,835 40 51,622

Three months ended March 31, 2022

Net sales $ 597,927 $ 650,726 $ 193,233 $ — $ 1,441,886

Depreciation and amortization (1)

88,821 63,809 29,077 119 181,826

Rationalization charges 5,704 7,068 254 — 13,026

Segment income 199,571 198,520 74,434 ( 25,105 ) 447,420

_____________

(1) Depreciation and amortization excludes amortization of debt discount and debt issuance costs of $ 1.3 million and $ 1.4 million for the three months ended September 30, 2022 and 2021, respectively, and $ 4.1 million for each of the nine months ended September 30, 2022 and 2021.

(2) Corporate includes a charge of $ 25.2 million for the settlement with the European Commission for the nine months ended September 30, 2022.

Total segment income is reconciled to income before income taxes as follows:

Three Months Ended Nine Months Ended

30, 2022 Sept.

30, 2021 Sept.

30, 2022 Sept.

(Dollars in thousands)

Total segment income $ 219,410 $ 167,917 $ 520,819 $ 447,420

Interest and other debt expense 33,743 27,039 93,233 80,751

Income before income taxes $ 185,667 $ 140,878 $ 427,586 $ 366,669

Adjusted EBIT 96,528 32,951 23,364 ( 6,624 ) 146,219

Depreciation 24,661 20,731 8,743 42 54,177

SILGAN HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Information at September 30, 2022 and 2021 and for the

three and nine months then ended is unaudited)

Sales and segment income of our metal containers segment and of part of our dispensing and specialty closures segment are dependent, in part, upon the vegetable and fruit harvests in the United States and, to a lesser extent, in a variety of national growing regions in Europe.

(Information at March 31, 2023 and 2022 and for the

three months then ended is unaudited)

Total adjusted EBIT is reconciled to income before income taxes for the three months ended March 31 as follows:

(Dollars in thousands)

Total adjusted EBIT $ 149,404 $ 146,219

Acquired intangible asset amortization expense 13,221 13,430

Other pension expense (income) for U.S.

pension plans 834 ( 11,982 )

Rationalization charges 4,121 1,379

Income before interest and income taxes 131,228 143,392

Less interest and other debt expense 36,766 30,830

Income before income taxes $ 94,462 $ 112,562

Net sales and adjusted EBIT of our metal containers segment and of part of our dispensing and specialty closures segment are dependent, in part, upon the vegetable and fruit harvests in the United States and, to a lesser extent, in a variety of national growing regions in Europe.

The size and quality of these harvests varies from year to year, depending in large part upon the weather conditions in applicable regions.

Because of the seasonality of the harvests, we have historically experienced higher unit sales volume in the third quarter of our fiscal year and generated a disproportionate amount of our annual segment income during that quarter.

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 1. Financial Statements