BROOMFIELD, Colo., July 23 /PRNewswire-FirstCall/ -- Ball
Corporation (NYSE:BLL) today reported second quarter net earnings
of $133.3 million, or $1.40 cents per diluted share, on sales of
$1.93 billion, compared to earnings of $100 million, or $1.02 cents
per diluted share, on sales of $2.08 billion in the second quarter
of 2008. For the first six months of 2009, Ball's earnings were
$202.8 million, or $2.14 per diluted share, on sales of $3.51
billion. First half 2008 results were earnings of $183.8 million,
or $1.87 per diluted share, on sales of $3.82 billion. Second
quarter 2009 results include an after-tax gain of $30.7 million, or
32 cents per diluted share, for the sale of a portion of the
company's interest in DigitalGlobe, and an after-tax charge of
$11.6 million, or 12 cents per diluted share, primarily for the
closure of two plastic packaging plants and for transaction costs
relating to the acquisition of certain of Anheuser-Busch InBev's
metal beverage packaging assets. Details of comparable segment
earnings and business consolidation activities can be found in
Notes 1 and 2 to the unaudited consolidated financial statements
that accompany this news release. "On a comparable basis, Ball
reported diluted earnings per share of $1.20 for the second quarter
compared to $1.10 for the second quarter of 2008," said R. David
Hoover, chairman, president and chief executive officer. "Our
results reflect the actions we have taken over the past 18 months
to better align our supply with demand, a seasonal increase in
volumes and better plant performance throughout our operations.
"Improved comparable operating margins in our North American
packaging businesses in the second quarter were the result of lower
costs due to plant rationalization programs and better pricing in
certain packaging segments," Hoover said. Metal Beverage Packaging,
Americas & Asia Metal beverage packaging, Americas and Asia,
comparable segment operating earnings for the second quarter were
$74.8 million on sales of $749.1 million, compared to $77.4 million
on sales of $833.9 million for the same period in 2008. For the
first six months, comparable earnings were $121 million on sales of
$1.37 billion, compared to $151.4 million on sales of $1.54 billion
in the first half of 2008. Second quarter results were lower
primarily due to reduced North American sales volumes and inventory
holding losses on aluminum. Inventory holding losses were lower in
the second quarter than in the first quarter. Ball announced on
July 1 that the company had signed a definitive agreement with
Anheuser-Busch InBev to acquire four of AB InBev's plants in the
U.S. for $577 million. The plants produce annually about 10 billion
aluminum cans and 10 billion easy-open can ends. The transaction is
expected to close by the end of the year or early in the first
quarter of 2010, subject to regulatory approval, and to be
accretive to Ball's earnings and cash flow in 2010. "These large,
low-cost manufacturing plants are an excellent fit within our North
American metal beverage packaging operations and support our
strategy of growing our global metal beverage packaging business,"
said John A. Hayes, executive vice president and chief operating
officer. Metal Beverage Packaging, Europe Metal beverage packaging,
Europe, segment results in the quarter were operating earnings of
$64.8 million on sales of $490.6 million, compared to $77.2 million
on sales of $571 million in 2008. For the first six months,
earnings were $95.7 million on sales of $834.4 million, compared to
$125.2 million on sales of $976.6 million in the first half of
2008. While volumes were flat compared to the second quarter of
2008, higher raw material prices, unfavorable product mix and
negative foreign exchange conversion due to a stronger U.S. dollar
contributed to the decline in segment earnings. Metal Food &
Household Products Packaging, Americas Metal food and household
products packaging, Americas, segment results in the quarter were
operating earnings of $35.1 million on sales of $323.4 million,
compared to $14.3 million in 2008 on sales of $283.2 million. For
the first six months, earnings were $84.7 million on sales of $607
million, compared to $29.1 million on sales of $547 million in the
first half of 2008. A combination of selling price increases
implemented this year, metal inventory holding gains and improved
plant performance more than offset a decline in sales volumes and
contributed to better results. Plastic Packaging, Americas Plastic
packaging, Americas, comparable segment results in the second
quarter were operating earnings of $7.8 million on sales of $181.6
million, compared to $5.7 million on sales of $201 million in the
second quarter of 2008. For the first six months, comparable
earnings were $11.4 million on sales of $341.3 million, compared to
$10.5 million on sales of $389.9 million in the first half of 2008.
Better pricing helped offset sales volume declines in the second
quarter. A pretax charge of approximately $11.9 million was
recorded in the company's second quarter results related to
permanently ceasing manufacturing operations at two monolayer PET
bottle plants and consolidating volumes from those plants into
larger manufacturing facilities. Cost savings associated with these
actions are expected to be approximately $12 million annually
beginning in 2010. Aerospace and Technologies Aerospace and
technologies comparable segment results were operating earnings of
$14.8 million on sales of $181.5 million in the quarter, compared
to $22.7 million on sales of $191.2 million in 2008. For the first
six months, comparable earnings were $29.4 million on sales of
$359.6 million, compared to $37.6 million on sales of $369.2
million in the first half of 2008. Backlog at the end of the
quarter was $587 million. Segment margins in the quarter returned
to more normal levels compared to the second quarter of 2008, which
included unusually high margins due primarily to higher profit
accruals on certain fixed-price contracts. In May, astronauts for
NASA's shuttle servicing mission to the Hubble Space Telescope
successfully installed two science instruments built by Ball and
completed critical repairs to two previously installed science
instruments from Ball. All four of the Ball-built instruments are
operating flawlessly. Ball announced last week a contract from the
U.S. Air Force's National Air and Space Intelligence Center to
continue providing Measurement and Signature Intelligence and
Advanced Geospatial Intelligence to warfighters through the
Advanced Technical Exploitation Program. The five-year, indefinite
quantity contract has a ceiling value of $600 million to be
competed among three contractors. Outlook "We anticipate full-year
free cash flow to be in the range of $375 million, and capital
spending for the year is expected to be below $250 million," said
Raymond J. Seabrook, executive vice president and chief financial
officer. "Lower manufacturing costs as a result of plant
rationalizations, reduced interest expense and a lower share count
benefited second quarter results." "Seasonal volume trends in our
packaging segments are improving, though volumes for the first half
of 2009 were below 2008 levels, and we expect continued improvement
over the balance of the year," Hoover said. "We are pleased with
our first half results and our strong second quarter performance,
and we expect full year 2009 diluted earnings per share to exceed
2008 results." Ball Corporation is a supplier of high-quality metal
and plastic packaging for beverage, food and household products
customers, and of aerospace and other technologies and services,
primarily for the U.S. government. Ball Corporation and its
subsidiaries employ more than 14,000 people worldwide and reported
2008 sales of approximately $7.6 billion. For the latest Ball news
and for other company information, please visit
http://www.ball.com/. Conference Call Details Ball Corporation
(NYSE:BLL) will hold its regular quarterly conference call on the
company's results and performance today at 9 a.m. (11 a.m. Eastern
Time). The North American toll-free number for the call is
800-732-5617. International callers should dial 212-231-2900.
Please use the following URL for a Web cast of the live
call:http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=115234&ev
entID=2286370. For those unable to listen to the live call, a taped
replay will be available after the call's conclusion until 1 p.m.
Eastern Time on July 30, 2009. To access the replay, call
800-633-8284 (North American callers) or 402-977-9140
(international callers) and use reservation number 21429825. A
written transcript of the call will be posted within 48 hours of
the call's conclusion to Ball's Web site at http://www.ball.com/ in
the investors section under "presentations." Forward-Looking
Statements This release contains "forward-looking" statements
concerning future events and financial performance. Words such as
"expects," "anticipates," "estimates" and similar expressions are
intended to 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 99.2 in our Form 10-K, which are available at our
Web site and at http://www.sec.gov/. Factors that might affect our
packaging segments include fluctuation in product demand and
preferences; availability and cost of raw materials; competitive
packaging availability, pricing and substitution; changes in
climate and weather; crop yields; competitive activity; failure to
achieve anticipated productivity improvements or production cost
reductions, including our beverage can end project; mandatory
deposit or other restrictive packaging laws; changes in major
customer or supplier contracts or loss of a major customer or
supplier; and changes in foreign exchange rates, tax rates and
activities of foreign subsidiaries. Factors that might affect our
aerospace segment include: funding, authorization, availability and
returns of government and commercial contracts; and delays,
extensions and technical uncertainties affecting segment contracts.
Factors that might affect the company as a whole include those
listed plus: accounting changes; changes in senior management; the
current global credit squeeze and its effects on liquidity, credit
risk, asset values and the economy; successful or unsuccessful
acquisitions, joint ventures or divestitures; integration of
recently acquired businesses; regulatory action or laws including
tax, environmental, health and workplace safety, including in
respect of chemicals or substances used in raw materials or in the
manufacturing process; governmental investigations; technological
developments and innovations; goodwill impairment; antitrust,
patent and other litigation; strikes; labor cost changes; rates of
return projected and earned on assets of the company's defined
benefit retirement plans; pension changes; reduced cash flow;
interest rates affecting our debt; and changes to unaudited results
due to statutory audits or other effects. Condensed Financials
(June 2009)
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Unaudited Statements of Consolidated Earnings Three months ended
Six months ended ------------------- ------------------ ($ in
millions, except per June 28, June 29, June 28, June 29, share
amounts) 2009 2008 2009 2008
-------------------------------------------------------------------------
Net sales (Note 1) $1,926.2 $2,080.3 $3,511.8 $3,820.5
-------------------------------------------------------------------------
Costs and expenses Cost of sales (excluding depreciation) 1,593.2
1,738.5 2,905.7 3,176.2 Depreciation and amortization 69.4 76.2
136.1 150.8 Selling, general and administrative 77.9 78.5 153.1
160.1 Business consolidation And other activities (Note 2) 19.1
11.5 24.1 11.5 Gain on sales of investments (Note 2) (34.8) -
(34.8) (7.1) ----- --- ----- ---- 1,724.8 1,904.7 3,184.2 3,491.5
-------------------------------------------------------------------------
Earnings before interest and taxes (Note 1) 201.4 175.6 327.6 329.0
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Interest expense (24.7) (34.7) (50.5) (70.9) Tax provision (48.4)
(45.4) (76.5) (82.6) Equity in results of affiliates 5.2 4.6 2.5
8.5 Less net earnings attributable to noncontrolling interests
(0.2) (0.1) (0.3) (0.2)
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Net earnings $133.3 $100.0 $202.8 $183.8
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Earnings per share (Note 2): Basic $1.42 $1.03 $2.17 $1.89 Diluted
$1.40 $1.02 $2.14 $1.87 Weighted average shares outstanding (000s):
Basic 93,763 96,911 93,655 97,055 Diluted 94,981 98,459 94,829
98,465 Condensed Financials (June 2009)
-------------------------------------------------------------------------
Unaudited Statements of Consolidated Cash Flows Three months ended
Six months ended -------------------- -------------------- June 28,
June 29, June 28, June 29, ($ in millions) 2009 2008 2009 2008
--------- --------- --------- --------- Cash Flows From Operating
Activities: Net earnings $133.3 $100.0 $202.8 $183.8 Depreciation
and amortization 69.4 76.2 136.1 150.8 Business consolidation and
other activities (Note 2) 16.5 11.5 21.5 11.5 Gain on sales of
investments (Note 2) (34.8) - (34.8) (7.1) Income taxes (5.2) (1.1)
6.1 6.3 Legal settlement - - - (70.3) Other changes in working
capital 136.6 (54.8) (331.2) (366.3) Other 1.2 13.2 8.7 21.7 ---
---- --- ---- 317.0 145.0 9.2 (69.6)
-----------------------------------------------------------------------
Cash Flows From Investing Activities: Additions to property, plant
and equipment (40.3) (86.0) (108.1) (160.5) Cash collateral
deposits, net 33.8 - 54.7 - Proceeds from sales of investments
(Note 2) 37.0 - 37.0 8.7 Other (0.4) (7.9) (0.7) (10.2) ---- ----
---- ----- 30.1 (93.9) (17.1) (162.0)
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Cash Flows From Financing Activities: Net change in borrowings
(343.9) (16.8) (58.0) 335.3 Dividends (9.4) (9.4) (18.7) (19.0)
Issuances (purchases) of common stock, net 6.1 (56.1) 11.0 (181.2)
Other 0.5 2.0 2.9 2.4 --- --- --- --- (346.7) (80.3) (62.8) 137.5
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Effect of exchange rate changes on cash 6.0 2.7 2.8 5.9 Change in
cash 6.4 (26.5) (67.9) (88.2) Cash-beginning of period 53.1 89.9
127.4 151.6 ---- ---- ----- ----- Cash-end of period $59.5 $63.4
$59.5 $63.4 ------------------ ===== ===== ===== ===== Condensed
Financials (June 2009)
-----------------------------------------------------------------------
Unaudited Consolidated Balance Sheets June 28, June 29, ($ in
millions) 2009 2008 -------- -------- Assets Current assets Cash
and cash equivalents $59.5 $63.4 Receivables, net 772.7 839.0
Inventories, net 1,001.4 1,092.8 Cash collateral - receivable 119.4
- Deferred taxes and other current assets 258.9 170.2 ----- -----
Total current assets 2,211.9 2,165.4 Property, plant and equipment,
net 1,822.5 2,016.0 Goodwill 1,821.8 1,951.6 Other assets, net
450.4 447.6
-----------------------------------------------------------------------
Total assets $6,306.6 $6,580.6
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Liabilities and Shareholders' Equity Current liabilities Short-term
debt and current portion of long-term debt $359.3 $327.1 Cash
collateral - liability 69.5 - Payables and accrued liabilities
1,317.9 1,261.4 ------- ------- Total current liabilities 1,746.7
1,588.5 Long-term debt 2,014.0 2,415.3 Other long-term liabilities
1,236.1 1,052.2 Shareholders' equity 1,309.8 1,524.6
-----------------------------------------------------------------------
Total liabilities and shareholders' equity $6,306.6 $6,580.6
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Notes to Condensed Financials (June 2009)
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1. Business Segment Information Three months ended Six months ended
------------------- ------------------ June 28, June 29, June 28,
June 29, ($ in millions) 2009 2008 2009 2008 -------- ---------
-------- -------- Sales- Metal beverage packaging, Americas &
Asia $749.1 $833.9 $1,369.5 $1,537.8 Metal beverage packaging,
Europe 490.6 571.0 834.4 976.6 Metal food & household
packaging, Americas 323.4 283.2 607.0 547.0 Plastic packaging,
Americas 181.6 201.0 341.3 389.9 Aerospace & technologies 181.5
191.2 359.6 369.2 ----- ----- ----- ----- Net sales $1,926.2
$2,080.3 $3,511.8 $3,820.5 ======== ======== ======== ========
Earnings before interest and taxes- Metal beverage packaging,
Americas & Asia $74.8 $77.4 $121.0 $151.4 Business
consolidation activities (Note 2) (3.3) (3.4) (8.3) (3.4) ---- ----
---- ---- Total metal beverage packaging, Americas & Asia 71.5
74.0 112.7 148.0 ---- ---- ----- ----- Metal beverage packaging,
Europe 64.8 77.2 95.7 125.2 ---- ---- ---- ----- Metal food &
household packaging, Americas 35.1 14.3 84.7 29.1 ---- ---- ----
---- Plastic packaging, Americas 7.8 5.7 11.4 10.5 Business
consolidation activities (Note 2) (11.9) (4.3) (11.9) (4.3) -----
---- ----- ---- Total plastic packaging, Americas (4.1) 1.4 (0.5)
6.2 ---- --- ---- --- Aerospace & technologies 14.8 22.7 29.4
37.6 Gain on sale of investment (Note 2) - - - 7.1 --- --- --- ---
Total aerospace & technologies 14.8 22.7 29.4 44.7 ---- ----
---- ---- Segment earnings before interest and taxes 182.1 189.6
322.0 353.2 Undistributed corporate costs, net (11.6) (10.2) (25.3)
(20.4) Gain on sale of investment (Note 2) 34.8 - 34.8 - Business
consolidation and other activities (Note 2) (3.9) (3.8) (3.9) (3.8)
---- ---- ---- ---- Total undistributed corporate costs, net 19.3
(14.0) 5.6 (24.2) ---- ----- --- ----- Earnings before interest and
taxes $201.4 $175.6 $327.6 $329.0 ====== ====== ====== ====== Notes
to Condensed Financials (June 2009)
-------------------------------------------------------------------------
2. Business Consolidation Activities and Other Significant
Nonoperating Items 2009 In the first quarter, a restructuring
charge of $5 million ($3.1 million after-tax) was recorded for
accelerated depreciation in connection with the closure of a North
American metal beverage plant. The following significant business
consolidation and nonoperating activities occurred in the second
quarter: - The company recorded restructuring charges of $16.2
million ($9.8 million after-tax) for the closure of two plastic
packaging manufacturing plants, administrative downsizing in our
North American metal beverage business and clean-up costs related
to previously closed and sold facilities. A pre-tax charge of
approximately $9 million ($5.4 million after-tax) will occur in the
second half of the year related to accelerated depreciation and
lease termination costs for the closed plastic plants. - The
company sold a portion of its interest in DigitalGlobe for proceeds
of approximately $37 million. As a result of this transaction, a
gain of $34.8 million ($30.7 million after-tax) was recorded in
corporate costs. - The company recorded $2.9 million ($1.8 million
after-tax) for transaction costs pertaining to the acquisition
discussed in Note 3. An additional $6 million after-tax of
transaction costs are expected to be incurred prior to closing the
acquisition. 2008 In the first quarter, Ball Aerospace &
Technologies Corp. sold its shares in an Australian subsidiary for
$10.5 million that resulted in a pretax gain of $7.1 million ($4.4
million after tax). In the second quarter, a net restructuring
charge of $11.5 million ($8.1 million after-tax) was recorded
primarily for the closure of a North American metal beverage plant,
the closure of a Canadian plastic packaging manufacturing plant and
clean-up costs related to previously closed and sold facilities. A
summary of the effects of the above transactions on after-tax
earnings follows: Three months ended Six months ended
-------------------- ------------------- ($ in millions, except per
June 28, June 29, June 28, June 29, share amounts) 2009 2008 2009
2008 --------- --------- -------- --------- Net earnings as
reported $133.3 $100.0 $202.8 $183.8 Business consolidation costs,
net of tax 9.8 8.1 12.9 8.1 Gain on sales of investments, net of
tax (30.7) - (30.7) (4.4) Acquisition transaction costs, net of tax
1.8 - 1.8 - --- --- --- --- Net earnings before above transactions
$114.2 $108.1 $186.8 $187.5 ====== ====== ====== ====== Per diluted
share before above transactions $1.20 $1.10 $1.97 $1.90 ===== =====
===== ===== Ball's management segregates the above items to
evaluate the performance of the company's operations. The
information is presented on a non-U.S. GAAP basis and should be
considered in connection with the unaudited statements of
consolidated earnings. Non-U.S. GAAP measures should not be
considered in isolation. 3. Subsequent Event On July 1, 2009, the
company announced that it has signed a definitive agreement with
Anheuser-Busch InBev (AB InBev) to acquire three of AB InBev's
beverage can manufacturing plants and one of its beverage can end
plants, all of which are located in the U.S., for $577 million.
These plants produce about 10 billion aluminum cans and 10 billion
easy-open can ends annually. The transaction is expected to close
at the end of the year or early in the first quarter of 2010,
subject to regulatory approval, and to generate revenue and
earnings before interest, taxes, depreciation and amortization of
approximately $680 million and $94 million, respectively, in the
first full year of operation. DATASOURCE: Ball Corporation CONTACT:
Investors, Ann T. Scott, +1-303-460-3537, , or Media, Scott
McCarty, +1-303-460-2103, , both of Ball Corporation Web Site:
http://www.ball.com/
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