Highlights
- Full-year and fourth quarter U.S. GAAP diluted earnings per
share of $2.23 and 49 cents, respectively
- Full-year and fourth quarter comparable diluted earnings per
share of $2.90 and 78 cents, respectively
- Full-year and fourth quarter global beverage can shipments down
7.4% and 3.2%, respectively, including Russia
- Full-year and fourth quarter global beverage can shipments down
3.3% and down 3.2%, respectively, excluding Russia
- Announced sale of aerospace business projected to close in the
first half of 2024
- Generated $818 million in free
cash flow and returned $255 million
to shareholders in 2023
- In 2024, positioned to grow diluted earnings per share,
generate strong free cash flow, deleverage and accelerate return of
value to shareholders
WESTMINSTER, Colo., Feb. 1, 2024
/PRNewswire/ -- Ball Corporation (NYSE: BALL) today reported, on a
U.S. GAAP basis, full-year 2023 net earnings attributable to the
corporation of $707 million
(including net after-tax charges of $213
million, or 67 cents per
diluted share for business consolidation and other non-comparable
items) or diluted earnings per share of $2.23, on sales of $14.03
billion, compared to $719
million net earnings attributable to the corporation, or
$2.25 per diluted share (including
net after-tax charges of $172
million, or 53 cents per
diluted share for business consolidation and other non-comparable
items) on sales of $15.35 billion in
2022. Ball's full-year 2023 comparable net earnings were
$920 million, or $2.90 per diluted share compared to $891 million, or $2.78 per diluted share in 2022.
Ball's fourth quarter 2023 net earnings attributable to the
corporation on a U.S. GAAP basis, were $154
million, or 49 cents per
diluted share, on sales of $3.40
billion compared to $55
million, or 17 cents per
diluted share, on sales of $3.55
billion in the fourth quarter of 2022. Ball's fourth quarter
2023 comparable earnings per diluted share were 78 cents versus fourth quarter 2022 comparable
earnings per diluted share of 44
cents.
"We delivered strong fourth quarter and full-year comparable
operating earnings and free cash flow. The resiliency of our team
amid a major brand disruption in North
America, challenging year-over-year comparisons in EMEA
following the 2022 Russian business sale, hyperinflationary effects
in Argentina and activities
associated with the ongoing aerospace sale process was outstanding.
Those actions coupled with sequential volume improvement,
operational efficiencies and the planned deployment of aerospace
sale proceeds to reduce leverage and accelerate share repurchases,
position the business for continued diluted earnings per share
growth, strong free cash flow generation and return of value to
shareholders in 2024 and beyond," said Daniel W. Fisher, chairman and CEO.
Details of segment comparable operating earnings, business
consolidation and other 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. References to volume data represent
units shipped. Year-over-year global and EMEA segment volume data
exclude the impact of the Russian beverage can business sale
completed in third quarter of 2022, unless specifically noted
otherwise.
On August 17, 2023, the company
announced that it reached an agreement to sell its aerospace
business to BAE Systems for gross proceeds of approximately
$5.6 billion in cash. The transaction
is subject to regulatory approvals and certain closing conditions
and adjustments; therefore, prospective estimates for certain
financial metrics provided in today's release exclude any potential
impact of the projected aerospace business sale.
Beverage Packaging, North and Central America
Beverage packaging, North and Central
America, segment comparable operating earnings for full-year
2023 were $710 million on sales of
$5.96 billion compared to
$642 million on sales of $6.70 billion in 2022. For the fourth quarter
2023, segment comparable operating earnings were $156 million on sales of $1.38 billion compared to $99 million on sales of $1.51 billion during the same period in 2022.
Full-year 2023 sales reflect lower shipments and the contractual
pass through of lower aluminum costs favorably offset by
incremental inflation recovery.
Full-year and fourth quarter segment comparable operating
earnings increased year-over-year due to contractual inflation
recovery, cost savings and improved operating performance despite
lower than anticipated volume driven largely by our customer
exposure to a U.S. mass beer brand disruption. Full-year and fourth
quarter segment volumes decreased 6.9 percent and 3.7 percent,
respectively, and quarter-to-quarter segment volumes improved
sequentially from the double-digit declines experienced in the
third quarter of 2023.
During the quarter, the company announced plans to permanently
cease production at its leased Kent,
Washington, facility in the first half of 2024. The
combination of this and other previously announced footprint
actions ensures supply/demand balance is appropriate for current
macroeconomic conditions while also providing our customers access
at scale to high-quality, innovative aluminum cans and bottles and,
will also enable our ability to achieve appropriate returns on
capital for the value delivered to customers. Fixed and variable
cost management and operational performance initiatives continue
and are expected to improve results in 2024 and beyond.
Aluminum beverage cans continue to outperform other substrates.
We remain dedicated to enabling the greater use of low-carbon,
best-value innovative aluminum packaging solutions across our
customer mix over the long term. After the first quarter, we
anticipate sequential volume improvement to return in our North and
Central American business following the April 2024 anniversary of the U.S. customer brand
disruption and incremental contracted volume growth supported by
business development efforts across diverse beverage
categories.
Beverage Packaging, EMEA
Beverage packaging, EMEA, segment comparable operating earnings
for full-year 2023 were $354 million
on sales of $3.40 billion compared to
$358 million on sales of $3.85 billion in 2022. For the fourth quarter,
segment comparable operating earnings were $80 million on sales of $739 million compared to $47 million on sales of $748 million during the same period in 2022.
Full-year sales reflect lower year-over-year shipments, largely due
to the sale of the Russian operations during the third quarter of
2022, and the contractual pass through of lower aluminum costs.
Historical results for the Russian operations are reflected in
beverage packaging, EMEA segment 2022 full-year results. See Note 1
"Business Segment Information" for additional information about the
sale agreement and historical results.
Full-year segment comparable operating earnings reflect
favorable price/mix, inflationary recovery and cost management and,
in alignment with our stated goal, nearly offset the $86 million comparable operating earnings
headwind associated with the Russian business sale completed in
September of 2022. Fourth quarter segment comparable operating
earnings increased significantly year-over-year driven by
inflationary recovery and lower costs offset by lower volumes.
Packaging mix shift to aluminum cans supported by ongoing
packaging legislation in certain countries continues to be a driver
of aluminum beverage packaging growth despite recent
inflation-induced consumer demand weakness. Segment volumes
decreased 7.0 percent and 1.0 percent in the fourth quarter and
full-year, respectively, excluding the 2022 Russian business sale
headwind, and were down 7.0 percent and down 12.9 percent in the
fourth quarter and full-year, respectively, including the 2022
Russian business sale headwind.
Beverage Packaging, South
America
Beverage packaging, South
America, segment comparable operating earnings for full-year
2023 were $266 million on sales of
$1.96 billion compared to
$275 million on sales of $2.11 billion in 2022. For the fourth quarter,
comparable segment operating earnings were $125 million on sales of $616 million compared to $78 million on sales of $614 million during the same period in 2022.
Full-year and fourth quarter year-over-year sales reflect higher
volumes, offset by the contractual pass through of lower aluminum
costs and unfavorable regional product mix amid challenging
economic conditions in Argentina.
Segment volumes increased 2.2 percent and 2.0 percent in the
fourth quarter and full-year, respectively. Across South America, multi-year customer initiatives
to increase the use of sustainable aluminum packaging are expected
to continue into 2024, and in Argentina, the company continues to serve
customers and assess risks given the dynamic economic and policy
environment.
Aerospace
Aerospace segment comparable operating earnings for full-year
2023 were $219 million on sales of
$1.97 billion compared to
$170 million on sales of $1.98 billion in 2022. Backlog finished the year
at $2.98 billion and contracts won,
but not yet booked into backlog, finished the year at $5.9 billion. For the fourth quarter, segment
comparable operating earnings were $59
million on sales of $500
million compared to $44
million on sales of $506
million during the same period in 2022. On August 17, 2023, the company announced that it
reached an agreement to sell its aerospace business. The
transaction is subject to regulatory approvals and certain closing
conditions and adjustments. The transaction is projected to close
in the first half of 2024.
Non-reportable
In addition to undistributed corporate expenses, the results for
the company's global aluminum aerosol business, beverage can
manufacturing facilities in India,
Saudi Arabia and Myanmar and the company's aluminum cup
business continue to be reported in other non-reportable.
Full-year 2023 results reflect lower year-over-year
undistributed corporate expenses and improved comparable operating
earnings for the aluminum packaging businesses in other
non-reportable. Fourth quarter 2023 results reflect slightly higher
undistributed corporate costs more than offset by improved
comparable operating earnings for the aluminum aerosol and cups
businesses. Volume across the company's global extruded aluminum
bottles and aerosol containers increased in the fourth quarter and
full-year 2023, by 6.6 percent and 8.2 percent, respectively.
Throughout 2023, the company's global aluminum aerosol business
executed incremental extruded aluminum line investments to provide
increased production capabilities to serve regional water and
personal care brands pursuing next generation lightweight
sustainable packaging solutions and expanded usage of refillable
aluminum bottles for certain venues.
Outlook
"Our team achieved double-digit comparable operating earnings
growth and generated $818 million of
free cash flow in 2023. Looking ahead in 2024, incremental volume
recovery and continuous improvement on cost management will drive
comparable operating earnings and, strong free cash flow generation
and approximately $4.5 billion of
after-tax proceeds from the projected aerospace sale will be used
to immediately reduce debt by approximately $2 billion driving leverage to in the range of
2.7x net debt to comparable EBITDA and, approximately $2 billion of proceeds will be used to increase
return of value to shareholders via share buybacks and pay
dividends moving forward," said Howard
Yu, executive vice president and chief financial
officer.
"In 2024, we are positioned to grow diluted earnings per share,
generate strong free cash flow and accelerate return of value to
shareholders. Looking ahead, we are focused on executing our
enterprise-wide strategy with purpose and pace to advance
sustainable aluminum packaging solutions at scale, win commercially
through partnership and breakthrough innovation and unlock value
within the organization by driving continuous process improvement
and operational excellence. Together, we will strive to deliver
innovative aluminum packaging solutions that can free the world
from waste and embark on a path to deliver compounding shareholder
returns in 2024 and beyond," Fisher 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
21,000 people worldwide and reported 2023 net sales of $14.03 billion. For more information, visit
www.ball.com, or connect with us on Facebook or X (Twitter).
Conference Call Details
Ball Corporation (NYSE: BALL)
will hold its fourth quarter 2023 earnings call today at
9 a.m. Mountain time (11 a.m. Eastern). The North American toll-free
number for the call is 877-497-9071. International callers should
dial +1 201-689-8727. Please use the following URL for a webcast of
the live call:
https://event.choruscall.com/mediaframe/webcast.html?webcastid=ZhcPstuQ
For those unable to listen to the live call, a webcast replay,
and 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," 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
they should be read in conjunction with, and qualified in their
entirety by, the cautionary statements referenced below. Ball
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 Ball's Form 10-K, which are available on
Ball's website and at www.sec.gov. Additional factors that might
affect: a) Ball's packaging segments include product capacity,
supply, and demand constraints and fluctuations and changes in
consumption patterns; availability/cost of raw materials,
equipment, and logistics; competitive packaging, pricing and
substitution; changes in climate and weather and related events
such as drought, wildfires, storms, hurricanes, tornadoes and
floods; footprint adjustments and other manufacturing changes,
including the startup of new facilities and lines; failure to
achieve synergies, productivity improvements or cost reductions;
unfavorable mandatory deposit or packaging laws; customer and
supplier consolidation; power and supply chain interruptions;
changes in major customer or supplier contracts or loss of a major
customer or supplier; inability to pass through increased costs;
war, political instability and sanctions, including relating to the
situation in Russia and
Ukraine and its impact on Ball's
supply chain and its ability to operate in Europe, the Middle
East and Africa regions
generally; changes in foreign exchange or tax rates; and tariffs,
trade actions, or other governmental actions, including business
restrictions and orders affecting goods produced by Ball or in its
supply chain, including imported raw materials; b) Ball's aerospace
segment include funding, authorization, availability and returns of
government and commercial contracts; and delays, extensions and
technical uncertainties affecting segment contracts; failure to
obtain, or delays in obtaining, required regulatory approvals or
clearances for the proposed transaction; any failure by the parties
to satisfy any of the other conditions to the proposed transaction;
the possibility that the proposed transaction is ultimately not
consummated; potential adverse effects of the announcement or
results of the proposed transaction on the ability to develop and
maintain relationships with personnel and customers, suppliers and
others with whom it does business or otherwise on the business,
financial condition, results of operations and financial
performance; risks related to diversion of management's attention
from ongoing business operations due to the proposed transaction;
the impact of the proposed transaction on the ability to retain and
hire key personnel; and c) Ball as a whole include those listed
above 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 actions or issues including those related
to tax, environmental, social and governance reporting,
competition, environmental, health and workplace safety, including
U.S. Federal Drug Administration and other actions or public
concerns affecting products filled in Ball's containers, or
chemicals or substances used in raw materials or in the
manufacturing process; technological developments and innovations;
the ability to manage cyber threats; litigation; strikes; disease;
pandemic; labor cost changes; inflation; rates of return on assets
of Ball's defined benefit retirement plans; pension changes;
uncertainties surrounding geopolitical events and governmental
policies, including policies, orders, and actions related to
COVID-19; reduced cash flow; interest rates affecting Ball's debt;
successful or unsuccessful joint ventures, acquisitions and
divestitures, and their effects on Ball's operating results and
business generally; and potential adverse effects of the
announcement or results of the proposed transaction on the market
price of Ball Corporation's common stock.
Condensed Financial
Statements (Fourth Quarter 2023)
|
|
Unaudited Condensed
Consolidated Statements of Earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Year Ended
|
|
|
|
December 31,
|
|
|
December 31,
|
($ in millions, except per share
amounts)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
3,403
|
|
$
|
3,548
|
|
$
|
14,029
|
|
$
|
15,349
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
(excluding depreciation and amortization)
|
|
|
(2,704)
|
|
|
(3,030)
|
|
|
(11,359)
|
|
|
(12,766)
|
Depreciation and
amortization
|
|
|
(177)
|
|
|
(162)
|
|
|
(686)
|
|
|
(672)
|
Selling, general and
administrative
|
|
|
(130)
|
|
|
(120)
|
|
|
(558)
|
|
|
(626)
|
Business consolidation
and other activities
|
|
|
(92)
|
|
|
(48)
|
|
|
(153)
|
|
|
(71)
|
|
|
|
(3,103)
|
|
|
(3,360)
|
|
|
(12,756)
|
|
|
(14,135)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before interest and
taxes
|
|
|
300
|
|
|
188
|
|
|
1,273
|
|
|
1,214
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
(109)
|
|
|
(96)
|
|
|
(459)
|
|
|
(312)
|
Debt refinancing and
other costs
|
|
|
-
|
|
|
(16)
|
|
|
-
|
|
|
(18)
|
Total interest
expense
|
|
|
(109)
|
|
|
(112)
|
|
|
(459)
|
|
|
(330)
|
Earnings before
taxes
|
|
|
191
|
|
|
76
|
|
|
814
|
|
|
884
|
Tax (provision)
benefit
|
|
|
(44)
|
|
|
(20)
|
|
|
(123)
|
|
|
(159)
|
Equity in results of
affiliates, net of tax
|
|
|
7
|
|
|
-
|
|
|
20
|
|
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
|
|
|
154
|
|
|
56
|
|
|
711
|
|
|
732
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
attributable to noncontrolling interests, net of tax
|
|
|
-
|
|
|
1
|
|
|
4
|
|
|
13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings attributable to Ball
Corporation
|
|
$
|
154
|
|
$
|
55
|
|
$
|
707
|
|
$
|
719
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.49
|
|
$
|
0.18
|
|
$
|
2.25
|
|
$
|
2.27
|
Diluted
|
|
$
|
0.49
|
|
$
|
0.17
|
|
$
|
2.23
|
|
$
|
2.25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding
(000s):
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
315,306
|
|
|
313,873
|
|
|
314,775
|
|
|
316,433
|
Diluted
|
|
|
317,306
|
|
|
316,127
|
|
|
317,022
|
|
|
320,008
|
Condensed Financial
Statements (Fourth Quarter 2023)
|
|
Unaudited Condensed
Consolidated Statements of Cash Flows
|
|
|
|
|
|
|
|
|
|
|
Year Ended
|
|
|
December 31,
|
($ in millions)
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
Cash Flows from Operating
Activities:
|
|
|
|
|
|
|
Net earnings
|
|
$
|
711
|
|
$
|
732
|
Depreciation and
amortization
|
|
|
686
|
|
|
672
|
Business consolidation
and other activities
|
|
|
153
|
|
|
71
|
Deferred tax provision
(benefit)
|
|
|
(67)
|
|
|
(2)
|
Pension
contributions
|
|
|
(42)
|
|
|
(124)
|
Other, net
|
|
|
62
|
|
|
(124)
|
Changes in working
capital components, net of dispositions
|
|
|
360
|
|
|
(924)
|
Cash provided by (used
in) operating activities
|
|
|
1,863
|
|
|
301
|
Cash Flows from Investing
Activities:
|
|
|
|
|
|
|
Capital
expenditures
|
|
|
(1,045)
|
|
|
(1,651)
|
Business dispositions,
net of cash sold
|
|
|
-
|
|
|
759
|
Other, net
|
|
|
(8)
|
|
|
106
|
Cash provided by (used
in) investing activities
|
|
|
(1,053)
|
|
|
(786)
|
Cash Flows from Financing
Activities:
|
|
|
|
|
|
|
Changes in borrowings,
net
|
|
|
(440)
|
|
|
1,361
|
Acquisitions of
treasury stock
|
|
|
(3)
|
|
|
(618)
|
Dividends
|
|
|
(252)
|
|
|
(254)
|
Other, net
|
|
|
33
|
|
|
(4)
|
Cash provided by (used
in) financing activities
|
|
|
(662)
|
|
|
485
|
Effect of currency
exchange rate changes on cash, cash equivalents and restricted
cash
|
|
|
4
|
|
|
(21)
|
Change in cash, cash equivalents and restricted
cash
|
|
|
152
|
|
|
(21)
|
Cash, cash equivalents and restricted cash -
beginning of period
|
|
|
558
|
|
|
579
|
Cash, cash equivalents and restricted cash - end of
period
|
|
$
|
710
|
|
$
|
558
|
Condensed Financial
Statements (Fourth Quarter 2023)
|
|
Unaudited Condensed
Consolidated Balance Sheets
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
($ in millions)
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
695
|
|
$
|
548
|
Receivables,
net
|
|
|
2,334
|
|
|
2,594
|
Inventories,
net
|
|
|
1,559
|
|
|
2,179
|
Other current
assets
|
|
|
295
|
|
|
168
|
Total current
assets
|
|
|
4,883
|
|
|
5,489
|
Property, plant and equipment,
net
|
|
|
7,380
|
|
|
7,053
|
Goodwill
|
|
|
4,290
|
|
|
4,235
|
Intangible assets, net
|
|
|
1,309
|
|
|
1,417
|
Other assets
|
|
|
1,441
|
|
|
1,715
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
19,303
|
|
$
|
19,909
|
|
|
|
|
|
|
|
Liabilities and Equity
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
Short-term debt and
current portion of long-term debt
|
|
$
|
1,065
|
|
$
|
1,408
|
Payables and other
accrued liabilities
|
|
|
5,120
|
|
|
5,600
|
Total current
liabilities
|
|
|
6,185
|
|
|
7,008
|
Long-term debt
|
|
|
7,504
|
|
|
7,540
|
Other long-term liabilities
|
|
|
1,777
|
|
|
1,834
|
Equity
|
|
|
3,837
|
|
|
3,527
|
|
|
|
|
|
|
|
Total liabilities and equity
|
|
$
|
19,303
|
|
$
|
19,909
|
|
Notes to the Condensed Financial Statements (Fourth Quarter
2023)
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.
Beverage packaging, North and Central America: Consists of
operations in the U.S., Canada and
Mexico that manufacture and sell
aluminum beverage containers throughout those countries.
Beverage packaging, EMEA: Consists of operations
in numerous countries throughout Europe, as well as Egypt and Turkey, that manufacture and sell aluminum
beverage containers throughout those countries.
Beverage packaging, South
America: Consists of operations in Brazil, Argentina, Paraguay and Chile that manufacture and sell aluminum
beverage containers throughout most of South America.
Aerospace: Consists of operations that manufacture
and sell aerospace and other related products and provide services
used in the defense, civil space and commercial space industries.
In the third quarter of 2023, Ball entered into a Stock Purchase
Agreement (Agreement) with BAE Systems, Inc. (BAE) and, for the
limited purposes set forth therein, BAE Systems plc, to sell all of
the outstanding equity interests in Ball's aerospace business to
BAE for a purchase price of approximately $5.6 billion in cash, which sale, if
consummated, would result in an estimated $4.5 billion in after-tax proceeds and an
estimated pre-tax gain in excess of $4.5
billion. These estimates are subject to customary closing
adjustments to the purchase price under the terms of the Agreement.
The closing of the transaction has been approved by the Committee
on Foreign Investment in the United
States, and is pending the approval, clearance, or waiting
period expiration or termination required under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
among other customary closing conditions. As of December 31, 2023, we are in the process of
seeking such regulatory approval, clearance, or waiting period
expiration or termination and cannot yet assert that it is probable
that such approval, clearance, or waiting period expiration or
termination will be obtained or the other closing conditions will
be satisfied. Due to these conditions, as of December 31, 2023, Ball's aerospace business does
not meet the requirements for held for sale presentation in Ball's
financial statements.
Other consists of a non-reportable operating segment (beverage
packaging, other) that manufactures and sells aluminum beverage
containers in India, Saudi Arabia and Myanmar; a non-reportable operating segment
that manufactures and sells extruded aluminum aerosol containers
and recloseable aluminum bottles across multiple consumer
categories as well as aluminum slugs (aerosol packaging) throughout
North America, South America, Europe, and Asia; a non-reportable operating segment that
manufactures and sells aluminum cups (aluminum cups); undistributed
corporate expenses; and intercompany eliminations and other
business activities.
The company also has investments in operations in Guatemala, Panama, 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.
Although Ball's functional currency in Argentina is the US dollar, a portion of its
transactions are denominated in pesos. The company is currently
placing increased importance on managing its currency exchange rate
risk in Argentina given the
devaluation of the country's currency. This devaluation and
economic conditions in Argentina
make it difficult to manage currency exchange rate risk, and have
an adverse effect on the company's results of operations. Ball's
Argentinean business, which is presented in its beverage packaging,
South America, reportable
operating segment, represented approximately 1 percent of the
company's total comparable operating earnings for the year ended
December 31, 2023. In addition, our
plant in Argentina accounted for
approximately 2 percent of the company's 105 billion global
beverage can unit shipments for the year ended December 31, 2023. During the fourth quarter of
2023, Argentina devalued its peso
relative to the US dollar by approximately 55%. As a result, Ball
recorded a $22 million devaluation
charge in business consolidation and other activities in the
consolidated statement of earnings. Ball's peso-denominated net
assets in Argentina were
approximately $20 million at
December 31, 2023. As of December 31, 2023, Ball's Argentinean business
had net asset exposure of $404
million, which consisted primarily of working capital and
property, plant and equipment.
In the first quarter of 2022, the company announced that it was
pursuing the sale of its aluminum beverage packaging business
located in Russia. In the second
quarter of 2022, Ball experienced deteriorating conditions and
determined this constituted a triggering event for its Russian
long-lived asset group. As a result, Ball recorded an impairment
loss of $435 million during the
second quarter of 2022. In the third quarter of 2022, the company
completed the sale of its Russian aluminum beverage packaging
business for total cash consideration of $530 million and recorded a gain on disposal of
$222 million. When considering the
impairment loss recorded during the second quarter 2022 of
$435 million, the impairment loss net
of gain on the sale of the Russian business was $213 million for the year ended December 31, 2022. The impairment loss in the
second quarter and the gain on sale in the third quarter were
recorded in business consolidation and other activities in the
consolidated statement of earnings. Ball's historical operations
and results of the Russian aluminum beverage packaging business are
included in the results of the beverage packaging, EMEA, business
through the date of the disposal in the third quarter of 2022.
1. Business Segment Information (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Year Ended
|
|
December 31,
|
|
|
December 31,
|
($ in millions)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
|
|
|
|
|
|
|
|
|
Beverage packaging,
North and Central America
|
$
|
1,381
|
|
$
|
1,512
|
|
$
|
5,963
|
|
$
|
6,696
|
Beverage packaging,
EMEA (a)
|
|
739
|
|
|
748
|
|
|
3,395
|
|
|
3,854
|
Beverage packaging,
South America
|
|
616
|
|
|
614
|
|
|
1,960
|
|
|
2,108
|
Aerospace
|
|
500
|
|
|
506
|
|
|
1,967
|
|
|
1,977
|
Reportable segment
sales
|
|
3,236
|
|
|
3,380
|
|
|
13,285
|
|
|
14,635
|
Other
|
|
167
|
|
|
168
|
|
|
744
|
|
|
714
|
Net sales
|
$
|
3,403
|
|
$
|
3,548
|
|
$
|
14,029
|
|
$
|
15,349
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable operating earnings
|
|
|
|
|
|
|
|
|
|
|
|
Beverage packaging,
North and Central America
|
$
|
156
|
|
$
|
99
|
|
$
|
710
|
|
$
|
642
|
Beverage packaging,
EMEA (a)
|
|
80
|
|
|
47
|
|
|
354
|
|
|
358
|
Beverage packaging,
South America
|
|
125
|
|
|
78
|
|
|
266
|
|
|
275
|
Aerospace
|
|
59
|
|
|
44
|
|
|
219
|
|
|
170
|
Reportable segment
comparable operating earnings
|
|
420
|
|
|
268
|
|
|
1,549
|
|
|
1,445
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
(b)
|
|
5
|
|
|
1
|
|
|
12
|
|
|
(25)
|
Comparable operating earnings
|
|
425
|
|
|
269
|
|
|
1,561
|
|
|
1,420
|
Reconciling items
|
|
|
|
|
|
|
|
|
|
|
|
Business consolidation
and other activities
|
|
(92)
|
|
|
(48)
|
|
|
(153)
|
|
|
(71)
|
Amortization of
acquired Rexam intangibles
|
|
(33)
|
|
|
(33)
|
|
|
(135)
|
|
|
(135)
|
Earnings before interest and
taxes
|
$
|
300
|
|
$
|
188
|
|
$
|
1,273
|
|
$
|
1,214
|
|
|
(a)
|
See the accompanying
information below for results of the Russian aluminum beverage
packaging business divested in September 2022.
|
(b)
|
Includes
undistributed corporate expenses, net, of $14 million and $9
million for the three months ended December 31, 2023 and 2022,
respectively, and $74 million and $82 million for the twelve months
ended December 31, 2023 and 2022, respectively.
|
|
|
1. Business Segment Information (continued)
A summary of the results of the Russian aluminum beverage
packaging business and the non-Russian components of the beverage
packaging, EMEA, segment, for the three months and years ended
December 31, 2023 and 2022, are shown
below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
Year Ended December 31,
|
($ in millions)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
|
|
|
|
|
|
|
|
|
|
Russia
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
554
|
Non-Russia
|
|
|
739
|
|
|
748
|
|
|
3,395
|
|
|
3,300
|
Beverage packaging,
EMEA, segment
|
|
$
|
739
|
|
$
|
748
|
|
$
|
3,395
|
|
$
|
3,854
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable operating earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
Russia
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
86
|
Non-Russia
|
|
|
80
|
|
|
47
|
|
|
354
|
|
|
272
|
Beverage packaging,
EMEA, segment
|
|
$
|
80
|
|
$
|
47
|
|
$
|
354
|
|
$
|
358
|
|
The Russian sales and comparable operating earnings figures in
the above table include historical support by Russia for non-Russian regions.
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 EBITDA is earnings
before interest, taxes, depreciation and amortization, business
consolidation and other non-comparable costs.
Comparable Operating Earnings, Comparable Operating
Earnings is earnings before interest, taxes, business consolidation
and other non-comparable costs.
Comparable Net Earnings, 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, Comparable Diluted
Earnings Per Share is Comparable Net Earnings divided by diluted
weighted average shares outstanding.
Net Debt, Net Debt is total debt less cash and cash
equivalents, which are derived directly from the company's
financial statements.
Free Cash Flow, Free cash flow is typically derived
directly from the company's cash flow statements and is defined as
cash flows from operating activities less capital expenditures;
and, it may be adjusted for additional items that affect
comparability between periods. Free cash flow is not a defined term
under U.S. GAAP, and it should not be inferred that the entire free
cash flow amount is available for discretionary expenditures.
We use Comparable EBITDA, Comparable Operating Earnings,
Comparable Net Earnings, and Comparable Diluted Earnings Per Share
internally to evaluate the company's operating performance. Ball
management uses Interest Coverage (Comparable EBITDA to
interest expense) and Leverage (Net Debt to Comparable
EBITDA) as metrics to monitor the credit quality of Ball
Corporation. Management internally uses a free cash flow measure
to: (1) evaluate the company's liquidity, (2) evaluate strategic
investments, (3) plan stock buyback and dividend levels and (4)
evaluate the company's ability to incur and service debt. Note that
when non-U.S. GAAP measures exclude amortization of acquired Rexam
intangibles, the measures include the revenue of the acquired
entities and all other expenses unless otherwise stated and the
acquired assets contribute to revenue generation.
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 non-comparable items on after
tax earnings is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Year Ended
|
|
|
December 31,
|
|
December 31,
|
($ in millions, except per share
amounts)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
attributable to Ball Corporation
|
|
$
|
154
|
|
$
|
55
|
|
$
|
707
|
|
$
|
719
|
Facility closure costs
and other items (1)
|
|
|
80
|
|
|
48
|
|
|
112
|
|
|
134
|
Business divestments
and other related items (2)
|
|
|
12
|
|
|
-
|
|
|
41
|
|
|
(93)
|
Donation to The Ball
Foundation
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
30
|
Amortization of
acquired Rexam intangibles
|
|
|
33
|
|
|
33
|
|
|
135
|
|
|
135
|
Debt refinancing and
other costs
|
|
|
-
|
|
|
16
|
|
|
-
|
|
|
18
|
Non-comparable tax
items
|
|
|
(33)
|
|
|
(14)
|
|
|
(75)
|
|
|
(52)
|
Comparable Net Earnings
|
|
$
|
246
|
|
$
|
138
|
|
$
|
920
|
|
$
|
891
|
Comparable Diluted Earnings Per
Share
|
|
$
|
0.78
|
|
$
|
0.44
|
|
$
|
2.90
|
|
$
|
2.78
|
|
|
(1)
|
In the first quarter of
2023, Ball announced the planned closure of its aluminum beverage
can manufacturing facility in Wallkill, New York. Production ceased
at this facility in the third quarter of 2023. In the fourth
quarter of 2023, Ball announced the planned closure of its aluminum
beverage can manufacturing facility in Kent, Washington and is
expected to cease production in the first half of 2024. The charges
for the three months and year ended December 31, 2023, primarily
were composed of costs for employee severance and benefits,
accelerated depreciation and other shutdown costs related to these
closures. The charges for the three months and year ended December
31, 2023, also include the devaluation charge associated with the
Argentina business. Additionally, the charges for the year ended
December 31, 2023, include costs recorded to reflect the damage to
assets, less insurance receipts, incurred as a result of the fire
at the company's Verona, Virginia extruded aluminum slug
manufacturing facility. During future periods, the company
anticipates receiving additional insurance proceeds for replacement
costs and business interruption coverage which will be recorded as
a gain. During 2022, Ball announced the closures of its aluminum
beverage can manufacturing facilities in Santa Cruz, Brazil,
Phoenix, Arizona, and St. Paul, Minnesota, which ceased production
in the third quarter of 2022, the fourth quarter of 2022 and the
first quarter of 2023, respectively.
|
(2)
|
During the third
quarter of 2023, Ball entered into an Agreement to sell all of the
outstanding equity interests in Ball's aerospace business. The
charges for the three months and year ended December 31, 2023, were
primarily composed of transaction costs related to this potential
sale. During 2022, Ball recorded a gain of $298 million from the
sale of its remaining 49 percent owned equity method investment in
Ball Metalpack. This gain was offset by the company selling
its Russian aluminum beverage packaging business and recording an
impairment loss net of gain on the sale of the Russian business of
$213 million for the year ended December 31, 2022
|
|
|
2. Non-U.S. GAAP Measures (continued)
A summary of the effects of non-comparable items
on earnings before interest and taxes
is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Year Ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
($ in millions)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
attributable to Ball Corporation
|
|
$
|
154
|
|
$
|
55
|
|
$
|
707
|
|
$
|
719
|
|
Net earnings
attributable to noncontrolling interests, net of tax
|
|
|
-
|
|
|
1
|
|
|
4
|
|
|
13
|
|
Net earnings
|
|
|
154
|
|
|
56
|
|
|
711
|
|
|
732
|
|
Equity in results of
affiliates, net of tax
|
|
|
(7)
|
|
|
-
|
|
|
(20)
|
|
|
(7)
|
|
Tax provision
(benefit)
|
|
|
44
|
|
|
20
|
|
|
123
|
|
|
159
|
|
Earnings before
taxes
|
|
|
191
|
|
|
76
|
|
|
814
|
|
|
884
|
|
Total interest
expense
|
|
|
109
|
|
|
112
|
|
|
459
|
|
|
330
|
|
Earnings before
interest and taxes
|
|
|
300
|
|
|
188
|
|
|
1,273
|
|
|
1,214
|
|
Business consolidation
and other activities
|
|
|
92
|
|
|
48
|
|
|
153
|
|
|
71
|
|
Amortization of
acquired Rexam intangibles
|
|
|
33
|
|
|
33
|
|
|
135
|
|
|
135
|
|
Comparable Operating
Earnings
|
|
$
|
425
|
|
$
|
269
|
|
$
|
1,561
|
|
$
|
1,420
|
|
|
|
2. Non-U.S. GAAP Measures (continued)
A summary of Comparable EBITDA, Net Debt, Interest
Coverage and Leverage is as follows:
|
|
|
|
|
|
|
|
|
|
|
Year Ended
|
|
|
|
December 31,
|
|
($ in millions, except
ratios)
|
|
2023
|
|
|
|
|
|
|
Net earnings
attributable to Ball Corporation
|
|
$
|
707
|
|
Net earnings
attributable to noncontrolling interests, net of tax
|
|
|
4
|
|
Net earnings
|
|
|
711
|
|
Equity in results of
affiliates, net of tax
|
|
|
(20)
|
|
Tax provision
(benefit)
|
|
|
123
|
|
Earnings before
taxes
|
|
|
814
|
|
Total interest
expense
|
|
|
459
|
|
Earnings before
interest and taxes
|
|
|
1,273
|
|
Business consolidation
and other activities
|
|
|
153
|
|
Amortization of
acquired Rexam intangibles
|
|
|
135
|
|
Comparable Operating Earnings
|
|
|
1,561
|
|
Depreciation and
amortization
|
|
|
686
|
|
Amortization of
acquired Rexam intangibles
|
|
|
(135)
|
|
Comparable EBITDA
|
|
$
|
2,112
|
|
|
|
|
|
|
Total interest
expense
|
|
$
|
(459)
|
|
Debt refinancing and
other costs
|
|
|
-
|
|
Interest expense
|
|
$
|
(459)
|
|
|
|
|
|
|
Total debt at period
end
|
|
$
|
8,569
|
|
Cash and cash
equivalents
|
|
|
(695)
|
|
Net Debt
|
|
$
|
7,874
|
|
|
|
|
|
|
Interest Coverage (Comparable
EBITDA/Interest Expense)
|
|
|
4.6
|
x
|
Leverage (Net Debt/Comparable
EBITDA)
|
|
|
3.7
|
x
|
|
|
|
|
|
Based on the company's definition, free cash flow for 2023
was:
|
|
|
|
($ in millions)
|
|
2023
|
|
|
|
|
Total cash provided by
(used in) operating activities
|
|
$
|
1,863
|
Less: Capital
expenditures
|
|
|
(1,045)
|
Free cash
flow
|
|
$
|
818
|
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multimedia:https://www.prnewswire.com/news-releases/ball-reports-strong-fourth-quarter-and-full-year-2023-results-302050187.html
SOURCE Ball Corporation