Amcor plc 10-Q for FY2021 Q3

Amcor plc (AMCR)

10-Q 2021-11-04 For: 2021-09-30

Added on April 10, 2026

About this 10-Q

Amcor plc filed this 10-Q on November 4, 2021, covering the quarter ended September 30, 2021 (FY2021 Q3).

Headline figures

Quarter ended September 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $3.42B; up 10.4% from $3.1B a year earlier
Net income: $202M; up 2.0% from net income of $198M a year earlier
Diluted EPS: $0.13; up 4.0% from $0.13 a year earlier

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Jersey						98-1455367
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)


Large Accelerated Filer	☒	Emerging Growth Company	☐
Non-Accelerated Filer	☐	Smaller Reporting Company	☐
Accelerated Filer	☐


Part I
Item 1.	Financial Statements	6
	Condensed Consolidated Statements of Income	6
	Condensed Consolidated Statements of Comprehensive Income	7
	Condensed Consolidated Balance Sheets	8
	Condensed Consolidated Statements of Cash Flows	9
	Condensed Consolidated Statements of Equity	10
	Notes to Condensed Consolidated Financial Statements	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	33
	Summary of Financial Results	33
	Overview	34
	Significant Items Affecting the Periods Presented	34
	Results of Operations	37
	Presentation of Non-GAAP Information	40
	Supplemental Guarantor Information	42
	New Accounting Pronouncements	44
	Critical Accounting Estimates and Judgments	44
	Liquidity and Capital Resources	45
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	47
Item 4.	Controls and Procedures	48

Part II
Item 1.	Legal Proceedings	49
Item 1A.	Risk Factors	49
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	49
Item 3.	Defaults Upon Senior Securities	49
Item 4.	Mine Safety Disclosures	49
Item 5.	Other Information	49
Item 6.	Exhibits	50
	Signatures	51


	Three Months Ended September 30,
($ in millions, except per share data)	2021		2020
Net sales	$	3,420	$	3,097
Cost of sales	(2,770)		(2,443)

Gross profit	650		654

Operating expenses:
Selling, general, and administrative expenses	(313)		(329)
Research and development expenses	(25)		(26)
Restructuring and related expenses, net	(8)		(23)
Other expenses, net	(8)		—

Operating income	296		276

Interest income	5		3
Interest expense	(40)		(40)
Other non-operating income, net	5		3

Income before income taxes and equity in income of affiliated companies	266		242

Income tax expense	(63)		(61)
Equity in income of affiliated companies, net of tax	—		19

Net income	$	203	$	200

Net income attributable to non-controlling interests	(1)		(2)

Net income attributable to Amcor plc	$	202	$	198

Basic earnings per share:	$	0.131	$	0.127




Diluted earnings per share:	$	0.131	$	0.126


	Three Months Ended September 30,
($ in millions)	2021		2020
Net income	$	203	$	200
Other comprehensive income (loss):
Net gains (losses) on cash flow hedges, net of tax (a)	(2)		4
Foreign currency translation adjustments, net of tax (b)	(95)		24

Pension, net of tax (c)	—		2
Other comprehensive income (loss)	(97)		30
Total comprehensive income	106		230
Comprehensive income attributable to non-controlling interest	—		(2)
Comprehensive income attributable to Amcor plc	$	106	$	228

(a) Tax expense related to cash flow hedges	$	—	$	(1)
(b) Tax benefit (expense) related to foreign currency translation adjustments	$	(2)	$	3

(c) Tax benefit related to pension adjustments	$	—	$	1


($ in millions except share and per share data)	September 30, 2021		June 30, 2021
Assets
Current assets:
Cash and cash equivalents	$	633	$	850
Trade receivables, net of allowance for doubtful accounts of $26 and $28, respectively	1,938		1,864
Inventories, net	2,113		1,991
Prepaid expenses and other current assets	595		561
Total current assets	5,279		5,266
Non-current assets:

Property, plant, and equipment, net	3,701		3,761
Operating lease assets	520		532
Deferred tax assets	136		139
Other intangible assets, net	1,792		1,835
Goodwill	5,385		5,419
Employee benefit assets	51		52
Other non-current assets	180		184
Total non-current assets	11,765		11,922
Total assets	$	17,044	$	17,188
Liabilities
Current liabilities:
Current portion of long-term debt	$	5	$	5
Short-term debt	63		98
Trade payables	2,412		2,574
Accrued employee costs	411		523
Other current liabilities	1,126		1,145
Total current liabilities	4,017		4,345
Non-current liabilities:
Long-term debt, less current portion	6,524		6,186
Operating lease liabilities	451		462
Deferred tax liabilities	688		696
Employee benefit obligations	294		307
Other non-current liabilities	365		371
Total non-current liabilities	8,322		8,022
Total liabilities	12,339		12,367

Commitments and contingencies (See Note 13)

Shareholders' Equity
Amcor plc shareholders’ equity:
Ordinary shares ($0.01 par value)
Authorized (9,000 million shares)
Issued (1,533 and 1,538 million shares, respectively)	$	15	$	15
Additional paid-in capital	5,074		5,092
Retained earnings	473		452
Accumulated other comprehensive loss	(862)		(766)
Treasury shares (4 and 3 million shares, respectively)	(50)		(29)
Total Amcor plc shareholders' equity	4,650		4,764
Non-controlling interest	55		57
Total shareholders' equity	4,705		4,821
Total liabilities and shareholders' equity	$	17,044	$	17,188


($ in millions, except per share data)	Ordinary Shares		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Shares		Non-controlling Interest		Total
Balance as of June 30, 2020	$	16	$	5,480	$	246	$	(1,049)	$	(67)	$	61	$	4,687
Net income					198						2		200
Other comprehensive income							30				—		30

Dividends declared ($0.115 per share)					(181)						(7)		(188)
Options exercised and shares vested			(13)						18				5



Share-based compensation expense			14										14
Change in non-controlling interest											1		1
Cumulative adjustment related to the adoption of ASC 326					(5)								(5)
Balance as of September 30, 2020	$	16	$	5,481	$	258	$	(1,019)	$	(49)	$	57	$	4,744















Balance as of June 30, 2021	$	15	$	5,092	$	452	$	(766)	$	(29)	$	57	$	4,821
Net income					202						1		203
Other comprehensive loss							(96)				(1)		(97)
Share buyback/cancellations	—		(64)										(64)
Dividends declared ($0.1175 per share)					(181)						(2)		(183)
Options exercised and shares vested			(28)						110				82
Settlement of forward contracts to purchase equity to meet share-based incentive plans, net of tax			59										59
Purchase of treasury shares									(131)				(131)
Share-based compensation expense			15										15
Change in non-controlling interest			—								—		—

Balance as of September 30, 2021	$	15	$	5,074	473		$	(862)	$	(50)	$	55	$	4,705


($ in millions)	2019 Bemis Integration Plan (1)		Other Restructuring Plans		Total Restructuring and Related Expenses (1)
Fiscal year 2019 net charges to earnings	$	48	$	19	$	67
Fiscal year 2020 net charges to earnings	60		18		78
Fiscal year 2021 net charges to earnings	68		6		74
Fiscal year 2022 first quarter net charges to earnings	7		1		8
Expense incurred to date	$	183	$	44	$	227


($ in millions)	Employee Costs		Fixed Asset Related Costs		Other Costs		Total Restructuring Costs
Liability balance at June 30, 2021	$	78	$	—	$	17	$	95
Net charges to earnings	2		—		3		5

Cash paid	(8)		1		(4)		(11)
Other non-cash	—		(1)		—		(1)
Foreign currency translation	(4)		—		(1)		(5)
Liability balance at September 30, 2021	$	68	$	—	$	15	$	83


($ in millions)	Flexibles Segment		Rigid Packaging Segment		Total
Balance as of June 30, 2021	$	4,437	$	982	$	5,419

Foreign currency translation	(31)		(3)		(34)
Balance as of September 30, 2021	$	4,406	$	979	$	5,385


	September 30, 2021
($ in millions)	Gross Carrying Amount		Accumulated Amortization and Impairment (1)		Net Carrying Amount
Customer relationships	$	1,983	$	(438)	$	1,545
Computer software	236		(158)		78
Other (2)	327		(158)		169
Total other intangible assets	$	2,546	$	(754)	$	1,792


	September 30, 2021				June 30, 2021
	Carrying Value		Fair Value		Carrying Value		Fair Value
($ in millions)			(Level 2)				(Level 2)
Total long-term debt with fixed interest rates (excluding commercial paper and finance leases)	$	3,894	$	4,126	$	4,325	$	4,558


	September 30, 2021
($ in millions)	Level 1		Level 2		Level 3		Total
Assets
Commodity contracts	$	—	$	14	$	—	$	14
Forward exchange contracts	—		6		—		6
Interest rate swaps	—		1		—		1

Total assets measured at fair value	$	—	$	21	$	—	$	21

Liabilities
Contingent purchase consideration liabilities	$	—	$	—	$	16	$	16

Forward exchange contracts	—		21		—		21


Total liabilities measured at fair value	$	—	$	21	$	16	$	37


($ in millions)	Balance Sheet Location	September 30, 2021		June 30, 2021
Assets
Derivatives in cash flow hedging relationships:
Commodity contracts	Other current assets	$	14	$	14
Forward exchange contracts	Other current assets	2		3
Derivatives in fair value hedging relationships:
Interest rate swaps	Other current assets	1		15
Derivatives not designated as hedging instruments:
Forward exchange contracts	Other current assets	4		4

Total current derivative contracts		21		36
Derivatives in fair value hedging relationships:
Interest rate swaps	Other non-current assets	—		4


Total non-current derivative contracts		—		4
Total derivative asset contracts		$	21	$	40

Liabilities
Derivatives in cash flow hedging relationships:

Forward exchange contracts	Other current liabilities	3		2

Derivatives not designated as hedging instruments:
Forward exchange contracts	Other current liabilities	18		2

Total current derivative contracts		21		4






Total non-current derivative contracts		—		—
Total derivative liability contracts		$	21	$	4


	Location of Gain (Loss) Reclassified from AOCI into Income (Effective Portion)	Gain (Loss) Reclassified from AOCI into Income (Effective Portion)
		Three Months Ended September 30,
($ in millions)		2021		2020
Derivatives in cash flow hedging relationships
Commodity contracts	Cost of sales	$	6	$	(3)


Treasury locks	Interest expense	(1)		(1)
Total		$	5	$	(4)


($ in millions)	September 30, 2021		June 30, 2021
Raw materials and supplies	$	994	$	905
Work in process and finished goods	1,237		1,193
Less: inventory reserves	(118)		(107)
Total inventories, net	$	2,113	$	1,991


	Three Months Ended September 30,
	2021						2020
($ in millions)	Flexibles		Rigid Packaging		Total		Flexibles		Rigid Packaging		Total
North America	$	1,019	$	629	$	1,648	$	900	$	587	$	1,486
Latin America	256		157		413		227		111		338
Europe	938		—		938		894		—		894
Asia Pacific	421		—		421		378		—		378
Net sales	$	2,634	$	786	$	3,420	$	2,399	$	698	$	3,097


	Three Months Ended September 30,
($ in millions)	2021			2020
Net sales including intersegment sales	$	2,634		$	2,400
Adjusted EBIT	339			312
Adjusted EBIT as a percentage of net sales	12.9		%	13.0		%


	Location of Gain (Loss) Recognized in the Unaudited Condensed Consolidated Statements of Income	Gain (Loss) Recognized in Income for Derivatives Not Designated as Hedging Instruments
		Three Months Ended September 30,
($ in millions)		2021		2020
Derivatives not designated as hedging instruments
Forward exchange contracts	Other expenses, net	$	(13)	$	7
Cross-currency interest rate swaps	Other expenses, net	—		(4)
Total		$	(13)	$	3


	Ordinary Shares			Treasury Shares
(shares and $ in millions)	Number of Shares	Amount		Number of Shares	Amount
Balance as of June 30, 2020	1,569	$	16	7	$	(67)

Options exercised and shares vested	—	—		(2)	18


Balance as of September 30, 2020	1,569	$	16	5	$	(49)

Balance as of June 30, 2021	1,538	$	15	3	$	(29)
Share buyback/cancellations	(5)	—		—	—
Options exercised and shares vested	—	—		(10)	110

Purchase of treasury shares	—	—		11	(131)
Balance as of September 30, 2021	1,533	$	15	4	$	(50)


	Foreign Currency Translation		Net Investment Hedge		Pension		Effective Derivatives		Total Accumulated Other Comprehensive Loss
($ in millions)	(Net of Tax)		(Net of Tax)		(Net of Tax)		(Net of Tax)
Balance as of June 30, 2020	$	(896)	$	(14)	$	(106)	$	(34)	$	(1,049)
Other comprehensive income (loss) before reclassifications	(1)		—		(1)		1		(1)
Amounts reclassified from accumulated other comprehensive loss	25		—		3		3		31
Net current period other comprehensive income	24		—		2		4		30
Balance as of September 30, 2020	$	(872)	$	(14)	$	(104)	$	(30)	$	(1,019)

Balance as of June 30, 2021	$	(691)	$	(13)	$	(54)	$	(8)	$	(766)
Other comprehensive income (loss) before reclassifications	(94)		—		—		2		(92)
Amounts reclassified from accumulated other comprehensive loss	—		—		—		(4)		(4)
Net current period other comprehensive loss	(94)		—		—		(2)		(96)
Balance as of September 30, 2021	$	(785)	$	(13)	$	(54)	$	(10)	$	(862)


	Three Months Ended September 30,
(in millions, except per share amounts)	2021		2020
Numerator
Net income attributable to Amcor plc	$	202	$	198
Distributed and undistributed earnings attributable to shares to be repurchased	—		—
Net income available to ordinary shareholders of Amcor plc—basic and diluted	$	202	$	198



Denominator
Weighted-average ordinary shares outstanding	1,534		1,563
Weighted-average ordinary shares to be repurchased by Amcor plc	(4)		(2)
Weighted-average ordinary shares outstanding for EPS—basic	1,530		1,561
Effect of dilutive shares	4		5
Weighted-average ordinary shares outstanding for EPS—diluted	1,534		1,566

Per ordinary share income


Basic earnings per ordinary share	$	0.131	$	0.127



Diluted earnings per ordinary share	$	0.131	$	0.126


($ in millions)	Three Months Ended September 30, 2021
Net sales - external	$	263
Net sales - to subsidiaries outside the Obligor Group	3
Total net sales	266

Gross profit	44





Net income (1)	$	34

Net (income) loss attributable to non-controlling interests	—

Net income attributable to Obligor Group	$	34


(in millions)	September 30, 2021		June 30, 2021
Assets
Current assets - external	$	1,359	$	814
Current assets - due from subsidiaries outside the Obligor Group	56		95
Total current assets	1,415		909
Non-current assets - external	1,421		1,428
Non-current assets - due from subsidiaries outside the Obligor Group	11,550		11,838
Total non-current assets	12,971		13,266
Total assets	$	14,386	$	14,175
Liabilities
Current liabilities - external	$	1,635	$	1,183
Current liabilities - due to subsidiaries outside the Obligor Group	11		22
Total current liabilities	1,646		1,205
Non-current liabilities - external	6,649		6,321
Non-current liabilities - due to subsidiaries outside the Obligor Group	11,179		11,563
Total non-current liabilities	17,828		17,884
Total liabilities	$	19,474	$	19,089


Period	Total Number of Shares Purchased (2)	Average Price Paid Per Share (2)(3)		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 (1)
July 1 - 31, 2021	—	$	—	—	$	—
August 1 - 31, 2021	10,700	12.27		—	400
September 1 - 30, 2021	5,151	12.35		5,151	336
Total	15,851	$	12.29	5,151


Exhibit		Description
22		Subsidiary Guarantors and Issuers of Guaranteed Securities.
31	.1	Chief Executive Officer Certification required by Rules 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended.
31	.2	Chief Financial Officer Certification required by Rules 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended.
32		Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes Oxley Act of 2002.
101	.INS	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.
101	.SCH	Inline XBRL Taxonomy Extension Schema Document.
101	.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101	.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.
101	.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.
101	.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).


			AMCOR PLC


Date	November 4, 2021	By	/s/ Michael Casamento
			Michael Casamento, Executive Vice President and Chief Financial Officer (Principal Financial Officer)

Date	November 4, 2021	By	/s/ Julie Sorrells
			Julie Sorrells, Vice President and Corporate Controller (Principal Accounting Officer)


Name of Guarantor						Jurisdiction of Incorporation
Amcor plc						Jersey
Amcor Flexibles North America, Inc. (1)						United States of America
Amcor Finance (USA) Inc. (1)						United States of America
Amcor Pty Ltd						Australia
Amcor UK Finance plc (1)						United Kingdom


Date	November 4, 2021	/s/ Ronald Delia
		Ronald Delia, Managing Director and Chief Executive Officer