| News Release For Immediate Release
http://www.ball.com | Investor Contact: Ann T. Scott
(303) 460-3537, ascott@ball.com Media Contact: Renee Robinson
(303) 460-2476, rarobins@ball.com |
Ball Reports Third Quarter Results
Highlights |
| ● | Third quarter 2015 comparable earnings per diluted share of $1.10 vs. $1.10 in 2014 |
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| ● | Multiple growth capital projects nearing completion to benefit 2016 and beyond |
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| ● | Solid global metal beverage and aerosol volumes, particularly in metal beverage for Europe and Brazil |
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| ● | Proposed offer for Rexam PLC regulatory reviews proceeding as expected |
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| ● | 2015 free cash flow expected to be in the range of $550 million, after approximately $500 million of capital expenditures and excluding cash costs for the proposed Rexam acquisition |
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BROOMFIELD, Colo., October 29, 2015 — Ball Corporation (NYSE:BLL) today reported third quarter 2015 net earnings attributable to the corporation of $44.5 million, or 32 cents per diluted share (including net after-tax expense of $110.4 million, or 78 cents per diluted share for business consolidation costs, including economic hedging losses, in addition to debt refinancing and other costs) on sales of $2.1 billion, compared to $147.4 million, or $1.04 per diluted share, on sales of $2.2 billion in the third quarter of 2014. Results for the first nine months of 2015 were net earnings attributable to the corporation of $225.6 million, or $1.60 per diluted share, on sales of $6.2 billion, compared to $394.0 million, or $2.76 per diluted share, on sales of $6.5 billion in the first nine months of 2014.
Comparable earnings per diluted share for the third quarter and year-to-date 2015 were $1.10 and $2.67, respectively, versus third quarter and year-to-date 2014 comparable earnings per diluted share of $1.10 and $3.04, respectively.
Details of comparable segment earnings, business consolidation activities, historical segment reporting, Rexam transaction-related hedging and costs can be found in the notes to the unaudited condensed consolidated financial statements that accompany this news release.
"Results from operations and global metal packaging volumes were in line with our expectations for the quarter. Foreign currency translation headwinds and project start-up costs both continued, the impact of which totaled 11 cents in the third quarter and 45 cents year-to-date, including net aluminum premium impacts and director retirement costs," said John A. Hayes, chairman, president and chief executive officer. "We continue to work on our proposed offer for Rexam PLC, including reaching agreement with our Brazilian joint venture partners for an exchange of Ball shares for the partners' remaining interest in the joint
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venture. Conversations with regulators in Europe, Brazil and the U.S. continue, with a goal of securing necessary approvals to enable the acquisition to close in the first half of 2016, which is consistent with our prior communications."
Metal Beverage Packaging, Americas & Asia
Metal beverage packaging, Americas and Asia, comparable segment operating earnings in the third quarter 2015 were $131.9 million on sales of $1.1 billion, compared to $133.7 million on sales of $1.1 billion in third quarter 2014. For the first nine months, comparable segment operating earnings were $383.4 million on sales of $3.2 billion, compared to $400.8 million on sales of $3.2 billion during the same period in 2014.
High single-digit growth for specialty beverage packaging in the segment was unable to offset single-digit volume declines and continuing price pressure in China, despite significant cost-out initiatives executed in the region. In Brazil, year-over-year volume comparisons turned favorable and the beverage can continues to gain strength in the packaging mix for beer and energy drinks.
Metal Beverage Packaging, Europe
Metal beverage packaging, Europe, comparable segment operating earnings in the third quarter 2015 were $61.1 million on sales of $450.1 million, compared to $63.8 million on sales of $489.2 million in the third quarter 2014. Results for the first nine months were comparable segment operating earnings of $149.6 million on sales of $1.3 billion, compared to $193.0 million on sales of $1.5 billion in 2014.
Mid-single-digit volume growth for beverage cans across Europe and a small aluminum premium tailwind in the quarter were not enough to offset unfavorable currency translation. On a euro basis, comparable segment earnings were up in the quarter. Our European plant footprint navigated a tight supply situation and absorbed out-of-pattern freight to ensure our customers' needs were met.
Metal Food & Household Products Packaging
Metal food and household products packaging comparable segment operating earnings in the third quarter 2015 of $30.6 million on sales of $372.0 million, compared to $43.0 million on sales of $450.6 million in the third quarter 2014. Year-to-date results were comparable segment operating earnings of $89.5 million on sales of $1.0 billion, compared to $119.1 million on sales of $1.2 billion in 2014.
Third quarter segment results and volumes were influenced by the previously disclosed U.S. food container customer shift, unfavorable currency effects and project start-up costs. Global aluminum aerosol volume grew mid-single digits in the quarter and our new aluminum aerosol plant in India celebrated its grand opening earlier this month.
Aerospace and Technologies
Aerospace and technologies comparable segment operating earnings in the third quarter 2015 were $21.4 million on sales of $203.4 million, compared to $21.2 million on sales of $221.7 million in the third quarter 2014. For the first nine months, comparable segment operating earnings were $60.9 million on sales
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of $648.4 million compared to $70.1 million on sales of $683.5 million during the same period last year. Backlog at the end of the quarter was $638.4 million.
During the quarter, the segment successfully integrated the propulsion subsystem for NASA's Green Propellant Infusion Mission (GPIM) onto the spacecraft bus and began system performance and environmental testing. GPIM is scheduled for a 2016 launch.
Year-to-date 2015 segment earnings continue to reflect the greater number of program completions that occurred in the first nine months of 2014. Effective cost management continues across the segment and contracted backlog has stabilized ahead of various programs expected to be awarded in late 2015 or early 2016, including several recently submitted proposals.
Outlook
"The businesses are effectively managing working capital and, including approximately $500 million of capital expenditures, we now expect 2015 free cash flow to be in the range of $550 million, excluding cash costs for the proposed Rexam acquisition. Though the purchase price and interest rate hedges we executed to mitigate risk related to the proposed transaction's purchase price economics impacted our quarterly GAAP results, we are financially well positioned at this stage in the acquisition timeline," said Scott C. Morrison, senior vice president and chief financial officer.
"Our third quarter was largely consistent with our expectations given anticipated currency translation and start-up cost headwinds. The difficult year-over-year volume comparisons and aluminum premiums headwinds are behind us and existing growth capital projects will provide momentum as we move into 2016," Hayes said.
About Ball Corporation
Ball Corporation supplies innovative, sustainable packaging solutions for beverage, food 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 14,500 people worldwide and reported 2014 sales of $8.6 billion. For more information, visit www.ball.com, or connect with us on Facebook or Twitter.
Conference Call Details
Ball Corporation will announce its third quarter 2015 earnings on Thursday, October 29, 2015, before trading begins on the New York Stock Exchange. At 9 a.m. Mountain Time on that day (11 a.m. Eastern), Ball will hold its regular quarterly conference call on the company's results and performance. The North American toll-free number for the call is 800‑909‑4756. International callers should dial 212‑231‑2938. Please use the following URL for a webcast of the live call:
http://edge.media-server.com/m/p/dgfvho7g/lan/en
For those unable to listen to the live call, a taped replay will be available from 11 a.m. Mountain Time on October 29, 2015, until 11 a.m. Mountain Time on November 5, 2015. To access the replay, call 800‑633‑8284 (North American callers) or 402‑977‑9140 (international callers) and use reservation number 21777526. 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."
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Forward-Looking Statements
This release contains "forward-looking" statements concerning future events and financial performance. Words such as "expects," "anticipates," "estimates" and similar expressions identify forward-looking statements. Such statements are subject to risks and uncertainties, which could cause actual results to differ materially from those expressed or implied. 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 risks and uncertainties 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. Factors that might affect: a) our packaging segments include product demand fluctuations; availability/cost of raw materials; competitive packaging, pricing and substitution; changes in climate and weather; crop yields; competitive activity; failure to achieve productivity improvements or cost reductions; mandatory deposit or other restrictive packaging laws; customer and supplier consolidation, power and supply chain influence; changes in major customer or supplier contracts or loss of a major customer or supplier; political instability and sanctions; and changes in foreign exchange or tax rates; 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: changes in senior management; 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; litigation; strikes; labor cost changes; rates of return on assets of the company's defined benefit retirement plans; pension changes; uncertainties surrounding the U.S. government budget, sequestration and debt limit; reduced cash flow; ability to achieve cost-out initiatives; interest rates affecting our debt; and successful or unsuccessful acquisitions and divestitures, including, with respect to the proposed Rexam PLC acquisition, the effect of the announcement of the acquisition on our business relationships, operating results and business generally; the occurrence of any event or other circumstances that could give rise to the termination of our definitive agreement with Rexam PLC in respect of the acquisition; the outcome of any legal proceedings that may be instituted against us related to the definitive agreement with Rexam PLC; and the failure to satisfy conditions to completion of the acquisition of Rexam PLC, including the receipt of all required regulatory approvals.
No profit forecast
Nothing contained herein shall be deemed to be a forecast, projection or estimate of the future financial performance of Ball, Rexam or the combined business of Ball and Rexam following completion of the combination, unless otherwise stated.
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