BROOMFIELD, Colo., Aug. 6, 2020 /PRNewswire/ -- Ball Corporation
(NYSE: BLL) today reported, on a U.S. GAAP basis, second quarter
2020 net earnings attributable to the corporation of $94 million (including net after-tax charges of
$122 million, or 37 cents per diluted share for business
consolidation and other non-comparable items) or 28 cents per diluted share, on sales of
$2.8 billion, compared to
$197 million net earnings
attributable to the corporation, or 58
cents per diluted share (including net after-tax charges of
$22 million, or 6 cents per diluted share for business
consolidation and other non-comparable items), on sales of
$3.0 billion in 2019. Results for the
first six months of 2020 were net earnings attributable to the
corporation of $117 million, or
35 cents per diluted share, on sales
of $5.6 billion, compared to
$314 million net earnings
attributable to the corporation, or 92
cents per diluted share on sales of $5.8 billion for the first six months of
2019.
Ball's second quarter and year-to-date 2020 comparable earnings
per diluted share were 65 cents and
$1.26, respectively, versus second
quarter and year-to-date 2019 comparable earnings per diluted share
of 64 cents and $1.13, respectively, representing, year-over-year
second quarter and year-to-date growth of 2 percent and 12 percent,
respectively.
Second quarter and year-to-date results reflect the 2019 sale of
the company's Argentine steel aerosol business and Chinese beverage
can assets, and new segment reporting for the company's beverage
packaging, EMEA business and other non-reportable results.
References to volume data represent units shipped, and
year-over-year global beverage volumes referenced exclude the
impact of the 2019 sale of the Chinese beverage can assets. Details
of comparable segment earnings, business consolidation activities,
business segment descriptions and other non-comparable items can be
found in the notes to the unaudited condensed consolidated
financial statements that accompany this news release.
"The resiliency of our businesses and ability to maintain safe,
continuous business operations is reflected in our results. Our
team is working diligently to satisfy the needs of our global
aluminum packaging and aerospace customers amidst a dynamic
operating environment. Ball's financial strength, growth
investments, sustainable products and ability to provide for our
employees, customers and communities where we operate has never
been more important," said John A.
Hayes, chairman, president and chief executive officer.
"During the quarter, our company posted 2 percent comparable
earnings per diluted share growth on flat operating earnings with
strong aluminum beverage can demand in North America continuing to outpace regional
supply offset somewhat by high single-digit volume declines in
EMEA, early-quarter sharp volume declines in South America aluminum beverage and an
aerospace supply chain issue impacting segment results. Our global
beverage, aerosol and aerospace businesses rebounded swiftly
following the initial impact of the global pandemic and all are
exiting the quarter with momentum for improved performance in the
second half and beyond."
"With demand for our aluminum packaging solutions and aerospace
technologies increasing even higher than we anticipated, much
needed capacity additions and hiring will benefit our company and
customers in the second half of 2020 and beyond. Our previously
announced projects are on track and we will continue to deploy
additional capital across our existing business portfolio to
support new customer contracts. Ball remains well positioned to
grow diluted earnings per share, and deliver shareholder returns
now and into the future," Hayes said.
Beverage Packaging, North and Central America
Beverage packaging, North and Central
America, comparable segment operating earnings for second
quarter 2020 were $189 million on
sales of $1.3 billion compared to
$141 million on sales of $1.3 billion during the same period in 2019. For
the first six months, comparable segment operating earnings were
$335 million on sales of $2.4 billion compared to $259 million on sales of $2.4 billion during the same period in 2019.
Low single-digit volume growth during the quarter, benefits from
new contractual terms and improved operational performance led to
strong performance, and were partially offset by employee costs
related to continued hiring in preparation for new production lines
starting up in the second half of 2020. Higher at-home consumption
combined with already tight supply/demand conditions outpaced
domestically produced volume. Continued SKU rationalization with
certain customers and the short-term benefit of imported cans from
our global network will provide availability of cans for consumers'
significant demand for soft drinks, sparkling water, spiked
seltzers and beer during the busy summer selling season.
Throughout 2020, continued benefits from new customer contracts,
operational efficiency, strong demand for aluminum beverage
packaging, and increased availability of cans from our new
production lines starting up in Georgia and Texas during the second half are expected to
add to year-over-year results. In addition, two new can
manufacturing facilities in Arizona and the northeastern U.S. will be
operational by mid-2021.
Beverage Packaging, EMEA
Beverage packaging, EMEA, comparable segment operating earnings
for the second quarter 2020 were $63
million on sales of $699
million compared to $98
million on sales of $768
million during the same period in 2019. For the first six
months, comparable segment operating earnings were $131 million on sales of $1.4 billion compared to $172 million on sales of $1.5 billion during the same period in 2019.
Beginning in 2020, current and historical quarterly results for the
company's existing facilities in Cairo,
Egypt, and Manisa, Turkey,
have been consolidated into the segment.
Strong at-home consumption trends in the U.K. and Russia were unable to offset softness in other
areas of Europe, resulting in high
single-digit volume declines for the segment during the quarter.
Early in the quarter, travel restrictions and ongoing border
closures stifled typical seasonal demand patterns across
Western Europe, Turkey and the Mediterranean, pressuring
earnings due to lower absorption for multiple weeks. Demand
rebounded late in the quarter as borders opened and limited tourism
was allowed in certain countries. Packaging mix shift to cans for
traditional and non-traditional beverages and strong growth for
energy drinks is expected to accelerate in the second half.
Second half results are expected to reflect notable
year-over-year improvement as multiple beverage can line additions
ramp up across the existing European plant network to support the
European recovery as well as provide short-term support for
increased North American beverage can demand.
Beverage Packaging, South
America
Beverage packaging, South
America, comparable segment operating earnings for the
second quarter 2020, were $46 million
on sales of $329 million compared to
$65 million on sales of $377 million during the same period in 2019. For
the first six months, comparable segment operating earnings were
$109 million on sales of $734 million compared to $133 million on sales of $818 million for the same period in 2019.
Segment volume ended the quarter flat despite steep double-digit
volume declines in Brazil during
April which pressured earnings due to lower absorption. In May and
June, Brazilian demand rebounded significantly as small grocery
stores and gas stations reopened and store owners emphasized
recyclable aluminum beverage packaging over returnable glass.
As we look forward, performance in the second half is expected
to improve meaningfully with customer packaging mix continuing to
favor aluminum beverage packaging over other substrates. In
mid-2021, multiple new Brazilian production lines will come on line
to support anticipated growth across the region.
Aerospace
Aerospace comparable segment operating earnings for second
quarter 2020 were $30 million on
sales of $438 million compared to
$38 million on sales of $379 million during the same period in 2019. For
the first six months, comparable segment operating earnings were
$70 million on sales of $870 million compared to $68 million on sales of $707 million. Contracted backlog remains strong
at $2.1 billion and contracts already
won, but not yet booked into current contracted backlog, increased
10 percent since the first quarter to $5.3
billion.
Segment results were dampened late in the quarter due to a
subcontractor supply chain issue on a key program. Other programs
continued to operate at a high level and hiring gained momentum
throughout the quarter. The company continues to win and provide
mission-critical programs and technologies to U.S. government,
defense, intelligence, reconnaissance and surveillance customers.
Multiple projects to expand manufacturing capacity, test
capabilities engineering and support workspace remain on track. In
2020 and beyond, the larger labor base will execute on a broad base
of defense, civil, climate monitoring and weather prediction
contracts leading segment comparable operating earnings to grow on
a full-year basis for the foreseeable future.
Non-reportable
Second quarter and year-to-date results in non-reportable
reflect the benefit of lower undistributed corporate expenses and
were more than offset by the impact of the 2019 sale of the Chinese
beverage can assets and Argentine steel aerosol business, lower
operating results in the remaining non-reportable beverage and
aluminum aerosol businesses, and investments in the recently
launched aluminum cup business. The current and historical results
from the existing facilities in Cairo,
Egypt, and Manisa, Turkey,
have been consolidated into the beverage packaging, EMEA segment
beginning in 2020.
The results for the company's global aluminum aerosol business
and beverage can manufacturing facilities in India, Saudi
Arabia and Myanmar and
investments in the company's new aluminum cup business continue to
be reported as non-reportable segments. During the quarter, the
company's global aluminum aerosol volumes declined 6 percent with
stable demand in North America
offset by double-digit declines in India and high single-digit declines in
Europe. Going forward, growth in
sanitizing sprays and health and pharmaceutical packaging are
expected to partially offset the lower demand for other personal
care products. The company's announced aluminum aerosol
manufacturing facility acquisition in Brazil is expected to close in the third
quarter.
Outlook
"Our company continues to operate from a position of strength.
Ample liquidity and cash flow continue to bolster our ability to
accelerate growth investments while continuing to return value to
shareholders. Given the exciting growth trajectory in our North
American beverage business, we foresee 2020 capital expenditures
exceeding $900 million and additional
EVA-enhancing opportunities in 2021 and beyond," said Scott C. Morrison, senior vice president and
chief financial officer.
"We are proud of our colleagues around the world. During the
quarter, we faced many challenges on both a human and operational
level, and our team came together to execute our global business
strategy as effectively and safely as possible. While lingering
challenges are likely, our products and operations have proven
their resiliency by exiting the second quarter with notable
momentum across all of our operations. We currently expect to grow
our earnings per diluted share this year while returning capital to
our shareholders. Beyond 2020, we look forward to continuing to
grow our EVA dollars on an even larger capital base and achieving
our long-term diluted earnings per share growth goal of 10 to 15
percent," Hayes said.
About Ball Corporation
Ball Corporation
supplies innovative, sustainable aluminum packaging solutions for
beverage, personal care and household products customers, as well
as aerospace and other technologies and services primarily for the
U.S. government. Ball Corporation and its subsidiaries employ
18,300 people worldwide and reported 2019 net sales of $11.5 billion. For more information, visit
www.ball.com, or connect with us on Facebook or Twitter.
Conference Call Details
Ball Corporation (NYSE: BLL)
will hold its second quarter 2020 earnings call today at
9 a.m. Mountain time (11 a.m. Eastern). The North American toll-free
number for the call is 800-379-4140. International callers should
dial 212-231-2930. Please use the following URL for a webcast of
the live call:
https://edge.media-server.com/mmc/p/kqgkjh39
For those unable to listen to the live call, a taped replay will
be available from 11 a.m. Mountain
time on August 6, 2020, until
11 a.m. Mountain time on August 13, 2020. To access the replay, call
800-633-8284 (North American callers) or 402-977-9140
(international callers) and use reservation number 21965114. A
written transcript of the call will be posted within 48 hours of
the call's conclusion to Ball's website at www.ball.com/investors
under "news and presentations."
Forward-Looking Statements
This release contains
"forward-looking" statements concerning future events and financial
performance. Words such as "expects," "anticipates," "estimates,"
"believes," "targets," "likely," "positions" and similar
expressions typically identify forward-looking statements, which
are generally any statements other than statements of historical
fact. Such statements are based on current expectations or views of
the future and are subject to risks and uncertainties, which could
cause actual results or events to differ materially from those
expressed or implied. You should therefore not place undue reliance
upon any forward-looking statements and any such statements should
be read in conjunction with, and, qualified in their entirety by,
the cautionary statements referenced below. The company undertakes
no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise. Key factors, risks and uncertainties that could cause
actual outcomes and results to be different are summarized in
filings with the Securities and Exchange Commission, including
Exhibit 99 in our Form 10-K, which are available on our website and
at www.sec.gov. Additional factors that might affect: a) our
packaging segments include product capacity, supply, and demand
constraints and fluctuations, including due to virus and disease
outbreaks and responses thereto; availability/cost of raw materials
and logistics; competitive packaging, pricing and substitution;
changes in climate and weather; footprint adjustments and other
manufacturing changes, including the startup of new facilities and
lines; failure to achieve synergies, productivity improvements or
cost reductions; mandatory deposit or other restrictive packaging
laws; customer and supplier consolidation; power and supply chain
interruptions; potential delays and tariffs related to the U.K's
departure from the EU; changes in major customer or supplier
contracts or a loss of a major customer or supplier; political
instability and sanctions; currency controls; changes in foreign
exchange or tax rates; and tariffs, trade actions, or other
governmental actions, including business restrictions and
shelter-in-place orders in any country or jurisdiction affecting
goods produced by us or in our supply chain, including imported raw
materials, such as those related to COVID-19 and those pursuant to
Section 232 of the U.S. Trade Expansion Act of 1962 or Section 301
of Trade Act of 1974; b) our aerospace segment include funding,
authorization, availability and returns of government and
commercial contracts; and delays, extensions and technical
uncertainties affecting segment contracts; c) the company as a
whole include those listed plus: the extent to which
sustainability-related opportunities arise and can be capitalized
upon; changes in senior management, succession, and the ability to
attract and retain skilled labor; regulatory action or issues
including tax, environmental, health and workplace safety,
including U.S. FDA and other actions or public concerns affecting
products filled in our containers, or chemicals or substances used
in raw materials or in the manufacturing process; technological
developments and innovations; the ability to manage cyber threats
and the success of information technology initiatives; litigation;
strikes; disease; pandemic; labor cost changes; rates of return on
assets of the company's defined benefit retirement plans; pension
changes; uncertainties surrounding geopolitical events and
governmental policies both in the U.S. and in other countries,
including policies, orders and actions related to COVID-19, the
U.S. government elections, stimulus package(s), budget,
sequestration and debt limit; reduced cash flow; interest rates
affecting our debt; and successful or unsuccessful joint ventures,
acquisitions and divestitures, and their effects on our operating
results and business generally.
Condensed
Financial Statements (Second Quarter 2020)
|
|
Unaudited
Condensed Consolidated Statements of Earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
|
June
30,
|
|
|
June
30,
|
($ in millions,
except per share amounts)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
|
$
|
2,801
|
|
$
|
3,017
|
|
$
|
5,586
|
|
$
|
5,802
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
(excluding depreciation and amortization)
|
|
|
(2,230)
|
|
|
(2,428)
|
|
|
(4,445)
|
|
|
(4,681)
|
Depreciation and
amortization
|
|
|
(170)
|
|
|
(171)
|
|
|
(339)
|
|
|
(341)
|
Selling, general and
administrative
|
|
|
(111)
|
|
|
(111)
|
|
|
(242)
|
|
|
(238)
|
Business consolidation
and other activities
|
|
|
(112)
|
|
|
-
|
|
|
(227)
|
|
|
(14)
|
|
|
|
(2,623)
|
|
|
(2,710)
|
|
|
(5,253)
|
|
|
(5,274)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before
interest and taxes
|
|
|
178
|
|
|
307
|
|
|
333
|
|
|
528
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
(67)
|
|
|
(81)
|
|
|
(138)
|
|
|
(158)
|
Debt refinancing and
other costs
|
|
|
-
|
|
|
-
|
|
|
(40)
|
|
|
(4)
|
Total interest
expense
|
|
|
(67)
|
|
|
(81)
|
|
|
(178)
|
|
|
(162)
|
Earnings before
taxes
|
|
|
111
|
|
|
226
|
|
|
155
|
|
|
366
|
Tax (provision)
benefit
|
|
|
(23)
|
|
|
(31)
|
|
|
(19)
|
|
|
(41)
|
Equity in results of
affiliates, net of tax
|
|
|
4
|
|
|
2
|
|
|
(21)
|
|
|
(11)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings
|
|
|
92
|
|
|
197
|
|
|
115
|
|
|
314
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable
to noncontrolling interests, net of tax
|
|
|
2
|
|
|
-
|
|
|
2
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
attributable to Ball Corporation
|
|
$
|
94
|
|
$
|
197
|
|
$
|
117
|
|
$
|
314
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.29
|
|
$
|
0.59
|
|
$
|
0.36
|
|
$
|
0.94
|
Diluted
|
|
$
|
0.28
|
|
$
|
0.58
|
|
$
|
0.35
|
|
$
|
0.92
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding (000s):
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
325,994
|
|
|
332,825
|
|
|
325,670
|
|
|
333,528
|
Diluted
|
|
|
331,717
|
|
|
341,637
|
|
|
331,884
|
|
|
342,233
|
Condensed
Financial Statements (Second Quarter 2020)
|
|
Unaudited
Condensed Consolidated Statements of Cash Flows
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
|
|
June
30,
|
($ in
millions)
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
Cash Flows from
Operating Activities:
|
|
|
|
|
|
|
Net earnings
|
|
$
|
115
|
|
$
|
314
|
Depreciation and
amortization
|
|
|
339
|
|
|
341
|
Business consolidation
and other activities
|
|
|
227
|
|
|
14
|
Deferred tax provision
(benefit)
|
|
|
(50)
|
|
|
(7)
|
Other, net
|
|
|
78
|
|
|
6
|
Changes in working
capital
|
|
|
(941)
|
|
|
(415)
|
Cash provided by (used
in) operating activities
|
|
|
(232)
|
|
|
253
|
Cash Flows from
Investing Activities:
|
|
|
|
|
|
|
Capital
expenditures
|
|
|
(447)
|
|
|
(275)
|
Business
dispositions
|
|
|
(17)
|
|
|
-
|
Other, net
|
|
|
23
|
|
|
11
|
Cash provided by (used
in) investing activities
|
|
|
(441)
|
|
|
(264)
|
Cash Flows from
Financing Activities:
|
|
|
|
|
|
|
Changes in borrowings,
net
|
|
|
(172)
|
|
|
590
|
Net issuances
(purchases) of common stock
|
|
|
(82)
|
|
|
(388)
|
Dividends
|
|
|
(100)
|
|
|
(83)
|
Other, net
|
|
|
(34)
|
|
|
(12)
|
Cash provided by (used
in) financing activities
|
|
|
(388)
|
|
|
107
|
Effect of currency
exchange rate changes on cash, cash equivalents and restricted
cash
|
|
|
(92)
|
|
|
12
|
Change in cash,
cash equivalents and restricted cash
|
|
|
(1,153)
|
|
|
108
|
Cash, cash
equivalents and restricted cash - beginning of
period
|
|
|
1,806
|
|
|
728
|
Cash, cash
equivalents and restricted cash - end of period
|
|
$
|
653
|
|
$
|
836
|
Condensed
Financial Statements (Second Quarter 2020)
|
|
|
Unaudited
Condensed Consolidated Balance Sheets
|
|
|
|
|
|
|
|
|
|
June
30,
|
($ in
millions)
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
643
|
|
$
|
764
|
Receivables,
net
|
|
|
1,810
|
|
|
1,956
|
Inventories,
net
|
|
|
1,388
|
|
|
1,183
|
Other current
assets
|
|
|
169
|
|
|
630
|
Total current
assets
|
|
|
4,010
|
|
|
4,533
|
Property, plant
and equipment, net
|
|
|
4,662
|
|
|
4,385
|
Goodwill
|
|
|
4,314
|
|
|
4,433
|
Intangible assets,
net
|
|
|
1,902
|
|
|
2,104
|
Other
assets
|
|
|
1,722
|
|
|
1,654
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
16,610
|
|
$
|
17,109
|
|
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
Short-term debt and
current portion of long-term debt
|
|
$
|
523
|
|
$
|
392
|
Payables and other
accrued liabilities
|
|
|
3,603
|
|
|
3,742
|
Total current
liabilities
|
|
|
4,126
|
|
|
4,134
|
Long-term
debt
|
|
|
7,158
|
|
|
6,916
|
Other long-term
liabilities
|
|
|
2,496
|
|
|
2,495
|
Equity
|
|
|
2,830
|
|
|
3,564
|
|
|
|
|
|
|
|
Total liabilities
and equity
|
|
$
|
16,610
|
|
$
|
17,109
|
Notes to the
Condensed Financial Statements (Second Quarter 2020)
|
1. Business
Segment Information
|
|
Ball's operations are
organized and reviewed by management along its product lines and
geographical areas and presented in the four reportable segments
outlined below. Effective January 1, 2020, the company implemented
changes to its management and internal reporting structure for cost
reduction and operational efficiency purposes. As a result of these
changes, the company's plants in Cairo, Egypt, and Manisa, Turkey,
are now included in the beverage packaging, Europe, Middle East and
Africa (beverage packaging, EMEA), segment. The company's
operations in India and Saudi Arabia are now combined with the
former non-reportable beverage packaging, Asia Pacific, operating
segment as a new non-reportable beverage packaging, other,
operating segment. The company's segment results and disclosures
for the three and six months ended June 30, 2019, have been
retrospectively adjusted to conform to the current year
presentation.
|
|
Beverage
packaging, North and Central America: Consists of
operations in the U.S., Canada and Mexico that manufacture and sell
metal beverage containers.
|
|
Beverage
packaging, EMEA: Consists of operations in numerous
countries throughout Europe, including Russia, as well as Egypt and
Turkey that manufacture and sell metal beverage containers
throughout those regions.
|
|
Beverage
packaging, South America: Consists of operations in
Brazil, Argentina, Paraguay and Chile that manufacture and sell
metal beverage containers throughout most of South
America.
|
|
Aerospace: Consists of operations
that manufacture and sell aerospace and other related products and
the provision of services used in the defense, civil space and
commercial space industries.
|
|
Other consists of a
non-reportable operating segment (beverage packaging, other),
discussed above, that manufactures and sells aluminum beverage
containers; a non-reportable segment that manufactures and sells
extruded aluminum aerosol containers and aluminum slugs (aerosol
packaging); a non-reportable operating segment that manufactures
and sells aluminum cups (aluminum cups); undistributed corporate
expenses; intercompany eliminations and other business
activities.
|
|
The company also has
investments in operations in Guatemala, Panama, South Korea, the
U.S. and Vietnam that are accounted for under the equity method of
accounting and, accordingly, those results are not included in
segment sales or earnings.
|
1. Business
Segment Information (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
June
30,
|
|
|
June
30,
|
($ in
millions)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
|
|
|
|
|
|
|
|
|
|
|
Beverage packaging,
North and Central America
|
$
|
1,267
|
|
$
|
1,286
|
|
$
|
2,448
|
|
$
|
2,417
|
Beverage packaging,
EMEA
|
|
699
|
|
|
768
|
|
|
1,368
|
|
|
1,452
|
Beverage packaging,
South America
|
|
329
|
|
|
377
|
|
|
734
|
|
|
818
|
Aerospace
|
|
438
|
|
|
379
|
|
|
870
|
|
|
707
|
Reportable segment
sales
|
|
2,733
|
|
|
2,810
|
|
|
5,420
|
|
|
5,394
|
Other
|
|
68
|
|
|
207
|
|
|
166
|
|
|
408
|
Net
sales
|
$
|
2,801
|
|
$
|
3,017
|
|
$
|
5,586
|
|
$
|
5,802
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable
operating earnings
|
|
|
|
|
|
|
|
|
|
|
|
Beverage packaging,
North and Central America
|
$
|
189
|
|
$
|
141
|
|
$
|
335
|
|
$
|
259
|
Beverage packaging,
EMEA
|
|
63
|
|
|
98
|
|
|
131
|
|
|
172
|
Beverage packaging,
South America
|
|
46
|
|
|
65
|
|
|
109
|
|
|
133
|
Aerospace
|
|
30
|
|
|
38
|
|
|
70
|
|
|
68
|
Reportable segment
comparable operating earnings
|
|
328
|
|
|
342
|
|
|
645
|
|
|
632
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
(a)
|
|
(1)
|
|
|
5
|
|
|
(11)
|
|
|
(10)
|
Comparable operating earnings
|
|
327
|
|
|
347
|
|
|
634
|
|
|
622
|
Reconciling
items
|
|
|
|
|
|
|
|
|
|
|
|
Business
consolidation and other activities
|
|
(112)
|
|
|
-
|
|
|
(227)
|
|
|
(14)
|
Amortization of
acquired Rexam intangibles
|
|
(37)
|
|
|
(40)
|
|
|
(74)
|
|
|
(80)
|
Earnings before
interest and taxes
|
$
|
178
|
|
$
|
307
|
|
$
|
333
|
|
$
|
528
|
|
|
|
|
|
|
|
|
(a)
|
Includes
undistributed corporate expenses, net, of $6 million and $15
million for the three months ended June 30, 2020 and 2019,
respectively, and $20 million and $38 million for the six months
ended June 30, 2020 and 2019, respectively.
|
2. Non-U.S. GAAP
Measures
|
|
Non-U.S. GAAP
Measures – Non-U.S. GAAP measures should not be considered
in isolation. They should not be considered superior to, or a
substitute for, financial measures calculated in accordance with
U.S. GAAP and may not be comparable to similarly titled measures of
other companies. Presentations of earnings and cash flows presented
in accordance with U.S. GAAP are available in the company's
earnings releases and quarterly and annual regulatory filings.
Information reconciling forward-looking U.S. GAAP measures to
non-U.S. GAAP measures is not available without unreasonable
effort. We have not provided guidance for the most directly
comparable U.S. GAAP financial measures, as they are not available
without unreasonable effort due to the high variability, complexity
and low visibility with respect to certain special items, including
restructuring charges, business consolidation and other costs,
gains and losses related to acquisition and divestiture of
businesses, the ultimate outcome of certain legal or tax
proceedings and other non-comparable items. These items are
uncertain, depend on various factors and could be material to our
results computed in accordance with U.S. GAAP.
|
|
Comparable
Earnings Before Interest, Taxes, Depreciation and Amortization
(Comparable EBITDA), Comparable Operating Earnings, Comparable Net
Earnings, Comparable Diluted Earnings Per Share and Net Debt –
Comparable EBITDA is earnings before interest, taxes, depreciation
and amortization, business consolidation and other non-comparable
costs. Comparable Operating Earnings is earnings before interest,
taxes, business consolidation and other non-comparable costs.
Comparable Net Earnings is net earnings attributable to Ball
Corporation before business consolidation and other non-comparable
costs after tax. Comparable Diluted Earnings Per Share is
Comparable Net Earnings divided by diluted weighted average shares
outstanding. We use Comparable EBITDA, Comparable Operating
Earnings, Comparable Net Earnings, and Comparable Diluted Earnings
Per Share internally to evaluate the company's operating
performance. Net Debt is total debt less cash and cash equivalents,
which are derived directly from the company's financial statements.
Ball management uses Net Debt to Comparable EBITDA and Comparable
EBITDA to interest expense as metrics to monitor the credit quality
of Ball Corporation.
|
|
2. Non-U.S. GAAP
Measures (continued)
|
|
Please see the
company's website for further details of the company's non-U.S.
GAAP financial measures at www.ball.com/investors under the
"FINANCIALS" tab.
|
|
A summary of
the effects of the above transactions on after tax earnings is as
follows:
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
June
30,
|
|
|
June
30,
|
($ in millions,
except per share amounts)
|
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
attributable to Ball Corporation
|
|
$
|
94
|
|
$
|
197
|
|
|
$
|
117
|
|
$
|
314
|
Add: Business
consolidation and other activities
|
|
|
112
|
|
|
-
|
|
|
|
227
|
|
|
14
|
Add: Amortization of
acquired Rexam intangibles
|
|
|
37
|
|
|
40
|
|
|
|
74
|
|
|
80
|
Add: Share of equity
method affiliate non-comparable costs
|
|
|
-
|
|
|
4
|
|
|
|
30
|
|
|
16
|
Add: Debt refinancing
and other costs
|
|
|
-
|
|
|
-
|
|
|
|
40
|
|
|
4
|
Less: Noncontrolling
interest share of non-comparable costs
|
|
|
-
|
|
|
-
|
|
|
|
1
|
|
|
-
|
Less: Non-comparable
tax items
|
|
|
(27)
|
|
|
(22)
|
|
|
|
(71)
|
|
|
(42)
|
Net earnings
attributable to Ball Corporation before above transactions
(Comparable Net Earnings)
|
|
$
|
216
|
|
$
|
219
|
|
|
$
|
418
|
|
$
|
386
|
Comparable diluted
earnings per share
|
|
$
|
0.65
|
|
$
|
0.64
|
|
|
$
|
1.26
|
|
$
|
1.13
|
|
A summary of
the effects of the above transactions on earnings before interest
and taxes is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
June
30,
|
|
|
June
30,
|
($ in
millions)
|
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
attributable to Ball Corporation
|
|
$
|
94
|
|
$
|
197
|
|
|
$
|
117
|
|
$
|
314
|
Add: Net loss
attributable to noncontrolling interests
|
|
|
(2)
|
|
|
-
|
|
|
|
(2)
|
|
|
-
|
Net
earnings
|
|
|
92
|
|
|
197
|
|
|
|
115
|
|
|
314
|
Less: Equity in
results of affiliates, net of tax
|
|
|
(4)
|
|
|
(2)
|
|
|
|
21
|
|
|
11
|
Add: Tax provision
(benefit)
|
|
|
23
|
|
|
31
|
|
|
|
19
|
|
|
41
|
Earnings before
taxes
|
|
|
111
|
|
|
226
|
|
|
|
155
|
|
|
366
|
Add: Total interest
expense
|
|
|
67
|
|
|
81
|
|
|
|
178
|
|
|
162
|
Earnings before
interest and taxes
|
|
|
178
|
|
|
307
|
|
|
|
333
|
|
|
528
|
Add: Business
consolidation and other activities
|
|
|
112
|
|
|
-
|
|
|
|
227
|
|
|
14
|
Add: Amortization of
acquired Rexam intangibles
|
|
|
37
|
|
|
40
|
|
|
|
74
|
|
|
80
|
Comparable Operating Earnings
|
|
$
|
327
|
|
$
|
347
|
|
|
$
|
634
|
|
$
|
622
|
2. Non-U.S. GAAP
Measures (continued)
|
|
A summary of
Comparable EBITDA and Net Debt is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve
|
|
Less:
Six
|
|
Add:
Six
|
|
Twelve
|
|
|
|
Months
Ended
|
|
Months
Ended
|
|
Months
Ended
|
|
Months
Ended
|
|
|
|
December
31,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
($ in millions,
except ratios)
|
|
2019
|
|
2019
|
|
2020
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
attributable to Ball Corporation
|
|
$
|
566
|
|
$
|
314
|
|
$
|
117
|
|
$
|
369
|
|
Add: Net loss
attributable to noncontrolling interests
|
|
|
(30)
|
|
|
-
|
|
|
(2)
|
|
|
(32)
|
|
Net
earnings
|
|
|
536
|
|
|
314
|
|
|
115
|
|
|
337
|
|
Less: Equity in
results of affiliates, net of tax
|
|
|
1
|
|
|
11
|
|
|
21
|
|
|
11
|
|
Add: Tax provision
(benefit)
|
|
|
71
|
|
|
41
|
|
|
19
|
|
|
49
|
|
Earnings before
taxes
|
|
|
608
|
|
|
366
|
|
|
155
|
|
|
397
|
|
Add: Total interest
expense
|
|
|
324
|
|
|
162
|
|
|
178
|
|
|
340
|
|
Earnings before
interest and taxes (EBIT)
|
|
|
932
|
|
|
528
|
|
|
333
|
|
|
737
|
|
Add: Business
consolidation and other activities (a)
|
|
|
244
|
|
|
14
|
|
|
227
|
|
|
457
|
|
Add: Amortization of
acquired Rexam intangibles (a)
|
|
|
155
|
|
|
80
|
|
|
74
|
|
|
149
|
|
Comparable Operating
Earnings
|
|
|
1,331
|
|
|
622
|
|
|
634
|
|
|
1,343
|
|
Add: Depreciation and
amortization
|
|
|
678
|
|
|
341
|
|
|
339
|
|
|
676
|
|
Less: Amortization of
acquired Rexam intangibles (a)
|
|
|
(155)
|
|
|
(80)
|
|
|
(74)
|
|
|
(149)
|
|
Comparable
EBITDA
|
|
$
|
1,854
|
|
$
|
883
|
|
$
|
899
|
|
$
|
1,870
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest
expense
|
|
$
|
(324)
|
|
$
|
(162)
|
|
$
|
(178)
|
|
$
|
(340)
|
|
Less: Debt
refinancing and other costs
|
|
|
7
|
|
|
4
|
|
|
40
|
|
|
43
|
|
Interest
expense
|
|
$
|
(317)
|
|
$
|
(158)
|
|
$
|
(138)
|
|
$
|
(297)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total debt at period
end
|
|
|
|
|
|
|
|
|
|
|
$
|
7,681
|
|
Less: Cash and cash
equivalents
|
|
|
|
|
|
|
|
|
|
|
|
(643)
|
|
Net
Debt
|
|
|
|
|
|
|
|
|
|
|
$
|
7,038
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable
EBITDA/Interest Expense (Interest Coverage)
|
|
|
|
|
|
|
|
|
|
6.3
|
x
|
Net Debt/Comparable
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
3.8
|
x
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
For detailed
information on these items, please see the respective quarterly
filings and/or earnings releases, which can be found on our website
at www.ball.com.
|
3. Non-Comparable
Items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
($ in
millions)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-comparable
items - income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
Beverage packaging,
North and Central America
|
|
|
|
|
|
|
|
|
|
|
|
|
Business consolidation
and other activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Facility closure costs
(1)
|
|
$
|
(1)
|
|
$
|
(5)
|
|
$
|
(2)
|
|
$
|
(6)
|
Individually
insignificant items
|
|
|
-
|
|
|
-
|
|
|
(2)
|
|
|
-
|
Other non-comparable
items
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
acquired Rexam intangibles
|
|
|
(6)
|
|
|
(7)
|
|
|
(13)
|
|
|
(15)
|
Total beverage
packaging, North and Central America
|
|
|
(7)
|
|
|
(12)
|
|
|
(17)
|
|
|
(21)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beverage packaging,
EMEA
|
|
|
|
|
|
|
|
|
|
|
|
|
Business consolidation
and other activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Facility closure and
restructuring costs (2)
|
|
|
(3)
|
|
|
(13)
|
|
|
(5)
|
|
|
(11)
|
Individually
insignificant items
|
|
|
-
|
|
|
(3)
|
|
|
(1)
|
|
|
(4)
|
Other non-comparable
items
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
acquired Rexam intangibles
|
|
|
(15)
|
|
|
(17)
|
|
|
(31)
|
|
|
(35)
|
Total beverage
packaging, EMEA
|
|
|
(18)
|
|
|
(33)
|
|
|
(37)
|
|
|
(50)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beverage packaging,
South America
|
|
|
|
|
|
|
|
|
|
|
|
|
Business consolidation
and other activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Brazilian indirect
taxes
|
|
|
-
|
|
|
56
|
|
|
-
|
|
|
56
|
Facility closure
costs
|
|
|
-
|
|
|
(16)
|
|
|
-
|
|
|
(16)
|
Individually
insignificant items
|
|
|
(3)
|
|
|
(3)
|
|
|
(4)
|
|
|
(4)
|
Other non-comparable
items
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
acquired Rexam intangibles
|
|
|
(14)
|
|
|
(14)
|
|
|
(28)
|
|
|
(28)
|
Total beverage
packaging, South America
|
|
|
(17)
|
|
|
23
|
|
|
(32)
|
|
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
Business consolidation
and other activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension settlements
(3)
|
|
|
(97)
|
|
|
-
|
|
|
(97)
|
|
|
-
|
Rexam acquisition
related compensation arrangements
|
|
|
-
|
|
|
(3)
|
|
|
(6)
|
|
|
(7)
|
Goodwill impairment
charges in beverage packaging, other segment (4)
|
|
|
-
|
|
|
-
|
|
|
(62)
|
|
|
-
|
Reversal of certain
provisions in beverage packaging, other segment (5)
|
|
|
-
|
|
|
-
|
|
|
11
|
|
|
-
|
Adjustment to selling
price of steel food and steel aerosol business (6)
|
|
|
-
|
|
|
-
|
|
|
(15)
|
|
|
-
|
Loss on sale of China
business and related costs (7)
|
|
|
-
|
|
|
(3)
|
|
|
(23)
|
|
|
(16)
|
Individually
insignificant items
|
|
|
(8)
|
|
|
(10)
|
|
|
(21)
|
|
|
(6)
|
Other non-comparable
items
|
|
|
|
|
|
|
|
|
|
|
|
|
Share of equity method
affiliate non-comparable costs (8)
|
|
|
-
|
|
|
(4)
|
|
|
(30)
|
|
|
(16)
|
Noncontrolling
interest's share of non-comparable costs, net of tax
|
|
|
-
|
|
|
-
|
|
|
(1)
|
|
|
-
|
Amortization of
acquired Rexam intangibles
|
|
|
(2)
|
|
|
(2)
|
|
|
(2)
|
|
|
(2)
|
Debt extinguishment
and refinance costs (9)
|
|
|
-
|
|
|
-
|
|
|
(40)
|
|
|
(4)
|
Total other
|
|
|
(107)
|
|
|
(22)
|
|
|
(286)
|
|
|
(51)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total business
consolidation and other activities
|
|
|
(112)
|
|
|
-
|
|
|
(227)
|
|
|
(14)
|
Total other
non-comparable items
|
|
|
(37)
|
|
|
(44)
|
|
|
(145)
|
|
|
(100)
|
Total non-comparable
items
|
|
|
(149)
|
|
|
(44)
|
|
|
(372)
|
|
|
(114)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discrete non-comparable
tax items (10)
|
|
|
(9)
|
|
|
10
|
|
|
(9)
|
|
|
10
|
Tax effect on business
consolidation and other activities
|
|
|
27
|
|
|
-
|
|
|
44
|
|
|
5
|
Tax effect on other
non-comparable items
|
|
|
9
|
|
|
12
|
|
|
36
|
|
|
27
|
Total non-comparable
tax items
|
|
|
27
|
|
|
22
|
|
|
71
|
|
|
42
|
Total
non-comparable items, net of tax
|
|
$
|
(122)
|
|
$
|
(22)
|
|
$
|
(301)
|
|
$
|
(72)
|
|
|
(1)
|
In 2018, the company
closed its beverage packaging facilities in Chatsworth, California,
Longview, Texas, and Birmingham, Alabama. Charges in 2020 and 2019
were the result of updated estimates for the costs of employee
severance and benefits and facility shutdown costs.
|
|
|
(2)
|
The company recorded
charges in 2020 and credits in 2019 for asset impairments,
accelerated depreciation and inventory impairments related to plant
closures and restructuring activities.
|
|
|
(3)
|
During the second
quarter of 2020, the company completed the purchase of
non-participating group annuity contracts for benefit obligations
related to certain of the company's U.S. pension plans. These
purchases of annuity contracts triggered settlement
accounting.
|
|
|
(4)
|
In the first quarter
of 2020, the company recorded a non-cash impairment charge for the
goodwill of the new beverage packaging, other, reporting unit as
the carrying amount of the reporting unit exceeded its fair
value.
|
|
|
(5)
|
In the first quarter
of 2020, the company reversed provisions recorded in the fourth
quarter of 2019 against working capital in the new beverage
packaging, other, segment as balances due have been
collected.
|
|
|
(6)
|
The company recorded
a charge in connection with an adjustment to the selling price of
the company's U.S. steel food and aerosol business.
|
|
|
(7)
|
The company, noting a
current period deterioration in the real estate market in China,
reduced the expected value of the contingent consideration due as
part of the sale in 2019 of the company's China beverage packaging
business.
|
|
|
(8)
|
In the first quarter
of 2020, the shareholders of Ball Metalpack provided additional
equity contributions and loans to Ball Metalpack, of which Ball's
share was $30 million, which resulted in Ball recognizing
previously unrecorded equity method losses associated with prior
periods.
|
|
|
(9)
|
In the first quarter
of 2020, Ball redeemed the outstanding euro-denominated 3.50%
senior notes due in 2020 in the amount of €400 million and the
outstanding 4.375% senior notes due in 2020 in the amount of $1
billion and recorded debt extinguishment costs related to these
redemptions.
|
|
|
(10)
|
In the first six
months of 2020, the company incurred foreign exchange losses on its
deferred tax balances in Brazil following depreciation of the
Brazilian real against the U.S. dollar, which was partially offset
by excess tax benefits from the vesting of Rexam acquisition
related compensation arrangements. During 2019, the company
obtained a tax benefit as a result of restructuring certain legal
entities in Brazil.
|
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SOURCE Ball Corporation