Slide 1: Safe harbor comments
Safe harbor comments Regulation G The information presented here regarding adjusted EPS relates to net earnings from continuing operations attributable to the Company (exclusive of items management considers not representative of ongoing operations) divided by weighted average shares outstanding (di
Slide 2: Headlines
Adjusted EPS of $2.00, in line with guidance Free cash flow of $210 million Comparable to 2014 in constant currency Launching strategic initiatives; impacting now Successfully integrating acquired business Strong 4Q operations drive robust EBITDA margin Accretive to free cash flow in 4Q15 New global
Slide 3: Market trends unchanged
4 Market trends unchanged Mature markets: Stable demand trends, with pockets of growth Consumer tastes drive increased demand for craft and premium products Imports, particularly from Mexico, are the fastest growing segment of U.S. beer Emerging geographies: Modest growth expected, with some uncerta
Slide 4: Progress on key initiatives
Progress on key initiatives 5 Stabilize, then selectively grow volumes Long-term contracts Europe North America Integrate sales and operations decision-making and execution More details coming at investor day on March 1, 2016 Elevate plant performance Concrete targets at all plants Plant Improvement
Slide 5: 4Q15 segment sales and operating profit
4Q15 segment sales and operating profit 6 Note: Reportable segment data excludes the Company’s global equipment business Price on par with prior year 4Q Shipments up 14%; up 2% excluding acquisition Strengthening USD decreased sales by ~13% Segment Sales ($ Millions) 4Q14 as reported $1,591 Currency
Slide 6: 4Q15 adjusted EPS bridge
Improved segment operating profit more than offsets higher interest expense and taxes 4Q15 is a record 4th quarter adjusted EPS in recent history on a constant currency basis 4Q15 adjusted EPS bridge ($0.13) $0.19 ($0.14) $0.02 Currency headwind assumes 4Q15 exchange rates. See appendix for a reconc
Slide 7: Continued favorable trends in asbestos
Continued favorable trends in asbestos Payments in 2015 were one-third lower than 2008 Average age of claimant is >80 years old Asbestos liability on balance sheet now represents a 4 year view1 In past years, balance sheet liability reflected a 3 year view1 4Q15 charge of $225 million is effectively
Slide 8: 2015 financial summary
2015 financial summary 9 1 See appendix for a reconciliation to adjusted earnings and constant currency for EPS. 2 Free cash flow is defined as cash provided by continuing operating activities less additions to property, plant and equipment. See appendix for free cash flow reconciliations. 3 As defi
Slide 9: 2016 business outlook
2016 business outlook Acquisition accretive and operations improve in largely stable macro environment 10 Europe Improving operational performance on largely stable sales volumes Price likely to cover cost inflation, after carryover headwind in 1Q16 North America Legacy: higher volume driven by long
Slide 10: Acquisition update: Strong underlying operations
Acquisition update: Strong underlying operations Strong business performance New Monterrey furnace to supply the fastest growing beer segment in the US Mexican peso devaluation Impacts translation Impacts USD-based costs D&A higher than initially expected Valuation studies yield high value to strong
Slide 11: Acquisition expected to generate strong cash flow
Acquisition expected to generate strong cash flow Acquisition contributed positive free cash flow generation in 4Q15 Expected cash flow1 generation of ~$85M in 2016, in line with expectations Capex reverts to a more normalized level of ~$65M Capex in 2015 was unusually high, driven by the constructi
Slide 12: 2016 non-operational outlook
2016 non-operational outlook 13 Corporate expense expected to be substantially lower than average of prior years However, 2015 benefited from currency hedges, sales of machine parts and reduced management incentive compensation Higher expected interest expense driven by acquisition debt Tax rate1 ex
Slide 13: Higher adjusted EPS expected in 2016
Higher adjusted EPS expected in 2016 $0.20 – $0.25 (~0.05 ) (~0.25) (~0.08) ~0.30 $2.00 $2.10- $2.25 $2.45- $2.60 $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 2015 Legacy segment operating profit in constant currency Acquisition excl. incremental D&A Corporate/ interest/ taxes 2016f "Controllable" Acqu
Slide 14: 1Q16 adjusted EPS guidance
1Q16 adjusted EPS guidance Guidance modestly up since December 15 1Q15 Adjusted EPS $0.44 Currency Impact ($0.08) Assumptions:1 EUR = 1.10; BRL = 4.00; COP = 3,200; AUD= 0.73; MXN = 17.25 1Q15 Adjusted EPS – Constant Currency $0.36 Europe Carryover pricing pressure; improving operations North Americ
Slide 15: 2016 free cash flow expected to be ~$280M
16 2016 free cash flow expected to be ~$280M * Free cash flow is defined as cash provided by continuing operating activities less additions to property, plant and equipment. See appendix for free cash flow reconciliations. ** Working capital includes an approximate $135M expected VAT refund from the
Slide 16: Capital structure review
Capital structure review Deleveraging remains the key priority for use of FCF 17 Total debt $5.6B at year-end 2015 Acquisition funding of $2.25B at ~4.2% blended interest rate Repaid remaining 7.375% senior notes due in 2016 Leverage ratio of 4.0 times at 12/31/15 Negotiated more flexible leverage r
Slide 17: Capital structure review
Capital structure review Deleveraging remains the key priority for use of FCF = Total debt $5.6B at year-end 2015 Acquisition funding of $2.25B at ~4.2% blended interest rate Repaid remaining 7.375% senior notes due in 2016 Leverage ratio of 4.0 times at 12/31/15 = Negotiated more flexible leverage
Slide 18: Appendix
Appendix 19
Slide 19: Full year Adjusted EPS bridge
Full year Adjusted EPS bridge 20 Full Year Adjusted EPS 2014 Adjusted EPS $2.63 Currency (0.56) 2014 Adjusted EPS at constant currency1 2.07 Segment operating profit (0.11) Retained corporate costs 0.13 Net interest expense (0.06) Effective tax rate (0.06) Noncontrolling interests (0.02) Share count
Slide 20: 4Q regional segment operating profit
4Q regional segment operating profit 21 1 Prior year translated at 4Q15 exchange rates 2014 2014 2014 2014 1 1 1 1 $53 $44 $28 $0 $20 $40 $60 As Reported Constant Currency 2015 Europe $72 $52 $75 $0 $20 $40 $60 $80 As Reported Constant Currency 2015 Latin America $26 $25 $51 $0 $20 $40 $60 As Report
Slide 21: Full year regional segment operating profit
22 1 Prior year translated at 2015 exchange rates 2014 2014 2014 2014 1 1 1 1 Full year regional segment operating profit $353 $290 $209 $0 $100 $200 $300 $400 As Reported Constant Currency 2015 Europe $227 $169 $183 $0 $100 $200 $300 As Reported Constant Currency 2015 Latin America $240 $237 $265 $
Slide 22: Pension
Pension 23 1 Related to the “amortization of actuarial loss” component of pension expense, which may be excluded in certain non-GAAP pension accounting methods Sustained non cash pension expense1 reduces EPS by ~$0.50 In 2015, pension contributions were ~$10M lower than prior year Modest uptick in p
Slide 23: 4Q price, volume and currency impact on reportable segment sales
4Q price, volume and currency impact on reportable segment sales 24 1 Reportable segment sales exclude the Company’s global equipment business $ Millions Europe North America Latin America Asia Pacific Total1 4Q14 Segment Sales $589 $460 $333 $209 $1,591 Currency (71) (7) (93) (29) (200) 4Q14 at con
Slide 24: Full year price, volume and currency impact on reportable segment sales
Full year price, volume and currency impact on reportable segment sales 25 1 Reportable segment sales exclude the Company’s global equipment business $ Millions Europe North America Latin America Asia Pacific Total1 FY14 Segment Sales $2,794 $2,003 $1,159 $793 $6,749 Currency (445) (26) (293) (117)
Slide 25: Reconciliation to adjusted earnings and constant currency
Reconciliation to adjusted earnings and constant currency 26 (1) Currency effect on earnings determined by using month-end foreign currency exchange rates in the three and twelve month periods ended December 31, 2015, to translate the local currency results for the same periods in 2013 and 2014. (2)
Slide 26: Reconciliation to free cash flow
Reconciliation to free cash flow 27 (1) Currency effect on free cash flow determined by using month-end foreign currency exchange rates in 2015 to translate the local currency results for the same periods in 2013 and 2014. Reconciliation to Free Cash Flow $ Millions Year ended December 31 2015 2014
Slide 27: Leverage ratio: Reconciliations of adjusted EBITDA and net debt
Leverage ratio Reconciliations of adjusted EBITDA and net debt 28 1 Based on historical EBITDA of acquired entities and for those periods not already included in net earnings from continuing operations $ 5,174 $ 2,948 $ 3,184 $ 5,589
Slide 28: Reconciliation of segment operating profit
Reconciliation of segment operating profit 29 Note: Reportable segment data excludes the Company’s global equipment business 1 Prior year translated at 2015 exchange rates $ Millions 4Q Full Year 4Q14 Segment Operating Profit $180 2014 Segment Operating Profit $908 Currency (34) Currency (141) 4Q14
Slide 29: Estimated impact from currency rate changes
Estimated impact from currency rate changes 30 Translation impact on EPS from a 10% change compared with the U.S. dollar Currency Approximate EPS impact Euro $0.10 Mexican peso $0.07 Brazilian real $0.05 Colombian peso $0.03 Australian dollar + New Zealand dollar $0.05
Slide 30: Estimated impact from currency rate changes
Estimated impact from currency rate changes Translation impact on EPS from a 10% change compared with the U.S. dollar Currency Approximate EPS impact Euro $0.10 Mexican peso $0.07 Brazilian real $0.05 Colombian peso $0.03 Australian dollar + $0.05 New Zealand dollar Gr GLASS IS LIFE