Highlights
- U.S. GAAP diluted earnings per share of 55 cents vs. a loss of 55
cents in 2022; results include impact of 2022 business
divestments
- Comparable diluted earnings per share of 61 cents vs. 82
cents in 2022; results include impact of 2022 business
divestments
- Global beverage can shipments down 4.9%, excluding impact
of 2022 Russian business divestment
- Aerospace backlog $2.6
billion; contracts won-not-booked $6.0 billion, an increase of $1 billion year-to-date
- Positioned to generate approximately $750 million of free cash flow, grow EVA, reduce
leverage and return value to shareholders in 2023
- Reiterate ability to achieve $200
million of net inflation recovery and at least $150 million of cost savings in 2023
- In 2023, potential to achieve low end of long-term
comparable diluted earnings per share growth goal of 10 to 15
percent, inclusive of divested Russian operating earnings
headwind
WESTMINSTER, Colo., Aug. 3, 2023
/PRNewswire/ -- Ball Corporation (NYSE: BALL) today reported, on a
U.S. GAAP basis, second quarter 2023 net earnings attributable to
the corporation of $173 million
(including a net after-tax loss of $21
million, or 6 cents per
diluted share for business consolidation and other non-comparable
items) or diluted earnings per share of 55
cents, on sales of $3.57
billion, compared to a net loss attributable to the
corporation of $174 million
(including a net after-tax loss of $437
million, or $1.37 per diluted
share for business consolidation and other non-comparable items,
including the non-cash, long-lived asset impairment for the Russian
beverage packaging operations) or a loss of 55 cents per diluted share, on sales of
$4.13 billion in 2022. Results for
the first six months of 2023 were net earnings attributable to the
corporation of $350 million, or
$1.10 per diluted share, on sales of
$7.06 billion compared to
$272 million, or 84 cents per diluted share, on sales of
$7.85 billion for the first six
months of 2022.
Ball's second quarter and year-to-date 2023 comparable earnings
per diluted share were 61 cents and
$1.30, respectively, versus second
quarter and year-to-date 2022 comparable earnings per diluted share
of 82 cents and $1.59, respectively.
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.
"We delivered strong second quarter results despite lower global
volumes driven largely by a U.S. beer customer's brand disruption
and tough year-over-year comparisons associated with 2022 business
divestments and higher interest costs. Notable inflationary cost
recovery, benefits of cost-out actions and a diversified customer
mix as well as improved operational efficiencies across all
business operations will significantly improve full-year results.
Following a multi-year period of investment, organic growth and
leveraging our team and unique technologies to win an even larger
portfolio of mission critical space-based aerospace contracts,
additional actions are being assessed real time to further position
the business for all stakeholders' long-term success and accelerate
our near-term return of value to Ball shareholders. We remain a
trusted mission partner to our customers and colleagues and
anticipate providing an update on the assessment in the second
half," said Daniel W. Fisher,
chairman and chief executive officer.
Beverage Packaging, North and Central America
Beverage packaging, North and Central
America, segment comparable operating earnings for second
quarter 2023 were $175 million on
sales of $1.54 billion compared to
$164 million on sales of $1.78 billion during the same period in 2022.
Second quarter sales reflect lower shipments and the contractual
pass through of lower aluminum costs favorably offset by
incremental inflation recovery.
Second quarter segment comparable operating earnings increased
year-over-year largely due to incremental inflation recovery and
improved operational performance offset by 8.5 percent lower
volumes driven by customer mix, particularly in the domestic mass
beer category. Aluminum beverage cans continue to outperform other
substrates in the current retail pricing and macroeconomic
environment.
To maximize profitability and optimize low-cost production
across our North American plant system during the current
environment, the company will continue to prudently manage
production output at certain locations to serve our customers'
demand for innovative aluminum packaging. As a result of balancing
supply/demand year-to-date and improvement in select customer
demand trends late in the second quarter, inventory levels for coil
aluminum and finished can inventories have largely normalized and
full-year cash generation goals are on track. Fixed cost and
SG&A savings, the contractual recovery of prior year
inflationary costs and our ability to leverage the flexibility of
manufacturing plant network to serve customers experiencing higher
growth than anticipated are expected to improve year-over-year
results, largely in the second half of 2023.
Beverage Packaging, EMEA
Beverage packaging, EMEA, segment comparable operating earnings
for second quarter 2023 were $98
million on sales of $920
million compared to $129
million on sales of $1.13
billion during the same period in 2022. Second quarter sales
reflect lower year-over-year shipments 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 will continue to be reflected in
beverage packaging, EMEA segment results. See Note 1 "Business
Segment Information" for additional information about the sale
agreement and historical results.
Second quarter operating earnings reflect the year-over-year
$40 million earnings headwind due to
the sale of the Russian operations during the third quarter of 2022
and start-up costs for two new facilities, partially offset by
inflationary cost recovery. Packaging mix shift to aluminum cans
supported by ongoing packaging legislation in certain countries
continues to be a driver of aluminum beverage packaging growth.
Year-over-year second quarter segment volumes increased
approximately 1 percent, excluding Russia, and were down 16.6 percent, including
Russia.
The new Kettering, U.K., and
Pilsen, Czech Republic, facilities
concluded start-up activities in the quarter and production from
the new can lines will enable accelerated volume growth for
sustainable aluminum packaging across the region during the second
half of 2023. During 2023, contractual recovery of 2022 inflation
and cost savings are anticipated to offset the earnings headwind
associated with the Russian business sale.
Beverage Packaging, South
America
Beverage packaging, South
America, segment comparable operating earnings for second
quarter 2023 were $30 million on
sales of $405 million compared to
$52 million on sales of $534 million during the same period in 2022.
Year-over-year sales reflect lower volumes and the contractual pass
through of lower aluminum costs. Second quarter segment comparable
operating earnings decreased year-over-year due to lower volumes
and unfavorable regional product mix in Brazil.
Segment volumes decreased 5.1 percent in the second quarter. To
maximize profitability and optimize low-cost production across our
South American plant system, the company temporarily modified
production output across certain facilities in its Brazilian
footprint during the second quarter. As the year progresses,
certain facilities will reinitiate production to prepare for the
busy fourth quarter summer selling season. Across South America, multi-year customer initiatives
to increase the use of sustainable aluminum packaging are expected
to continue, and in Brazil,
package mix shift to aluminum is expected to improve in the second
half of 2023 due to more favorable aluminum price trends relative
to 2022 levels.
Aerospace
Aerospace segment comparable operating earnings for second
quarter 2023 were $54 million on
sales of $499 million compared to
$36 million on sales of $490 million during the same period in 2022.
Backlog remained strong at $2.6
billion, and contracts won, but not yet booked into backlog,
finished the quarter at $6.0 billion,
an increase of $1.0 billion
year-to-date. As previously disclosed, demand for Ball Aerospace's
services and technologies is accelerating and, over the next
several quarters, will transition into the company's total
backlog.
Strong second quarter segment comparable operating earnings
reflect new program wins, favorable operational performance and
improving supply chain dynamics. The segment continues to leverage
its talent, manufacturing and test capabilities, and its
engineering and support workspace, to secure additional defense,
climate change and Earth-monitoring contracts to provide
mission-critical programs and technologies to U.S. government
defense, intelligence, reconnaissance and surveillance
customers.
During the second quarter, Ball Corporation announced that it is
considering options that could better position its aerospace
business to provide value to shareholders and customers. There is
no certainty that any formal decision will be made. If and when
appropriate, a further announcement will be made.
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.
Second quarter 2023 results reflect higher year-over-year
undistributed corporate expenses, partially offset by improved
operational performance in the extruded aluminum aerosol business
and the other non-reportable beverage can manufacturing facilities.
Volume across the company's global extruded aluminum bottles and
aerosol containers increased 3.2 percent during the quarter. During
the quarter, the company's global aluminum aerosol customers and
regional water and personal care brands continued to pursue next
generation lightweight sustainable packaging solutions and expand
usage of refillable aluminum bottles for certain venues. The
company will execute incremental extruded aluminum bottle
investments throughout the year to provide increased production
capabilities to meet contracted growing customer demand.
Outlook
"Our teams are doing an excellent job of managing costs and
working capital, while also assessing ways to unlock value across
all of our businesses. EVA is core to our capital allocation
strategy and employing the best positioned, low-cost average
invested capital base is key. As a result of multiple disciplined
actions over the past 18 months to address costs, capital and
growth, we remain well-positioned to deliver free cash flow of
approximately $750 million in 2023.
Looking ahead, the reduction of capital expenditures to
depreciation levels will increase free cash flow generation, allow
for additional deleveraging and accelerate return of value to
shareholders via share buybacks and dividends in 2024 and beyond,"
said Scott C. Morrison, executive
vice president and chief financial officer.
"Maximizing returns, improving free cash conversion, driving
organic growth by leveraging sustainability and innovation
tailwinds and being good stewards of our capital are our core areas
of focus. We look forward to driving a circular economy through the
broader use of sustainable aluminum packaging and exquisite
environmental, aerospace and defense technologies to preserve our
planet and achieve the best outcomes for our stakeholders. Despite
higher interest costs, year-to-date demand trends and the Russian
business divestment headwind, the potential remains for us to
achieve our long-term comparable diluted earnings per share growth
goal of 10 to 15 percent, improve EVA generation, and increase cash
flow to deleverage and return value to shareholders in 2023 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 2022 net sales of $15.35 billion. For more information, visit
www.ball.com, or connect with us on Facebook or Twitter.
Conference Call Details
Ball Corporation (NYSE:
BALL) will hold its second 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 800-954-1053. International callers should
dial +1 212-231-2903. Please use the following URL for a webcast of
the live call:
https://edge.media-server.com/mmc/p/vjxntzs8
For those unable to listen to the live call, a taped replay will
be available from 11 a.m. Mountain
time on August 3, 2023, until
11 a.m. Mountain time on August 10, 2023. To access the replay, call
800-633-8284 (North American callers) or +1 402-977-9140
(international callers) and use reservation number 22027409. 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," 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; 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; and successful or unsuccessful joint ventures,
acquisitions and divestitures, and their effects on Ball's
operating results and business generally.
Condensed Financial
Statements (Second Quarter 2023)
|
|
Unaudited Condensed
Consolidated Statements of Earnings (Loss)
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
($ in millions, except per share
amounts)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
3,566
|
|
$
|
4,134
|
|
$
|
7,055
|
|
$
|
7,850
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
(excluding depreciation and amortization)
|
|
|
(2,916)
|
|
|
(3,445)
|
|
|
(5,761)
|
|
|
(6,461)
|
Depreciation and
amortization
|
|
|
(170)
|
|
|
(168)
|
|
|
(336)
|
|
|
(353)
|
Selling, general and
administrative
|
|
|
(165)
|
|
|
(161)
|
|
|
(296)
|
|
|
(347)
|
Business consolidation
and other activities
|
|
|
6
|
|
|
(467)
|
|
|
(14)
|
|
|
(186)
|
|
|
|
(3,245)
|
|
|
(4,241)
|
|
|
(6,407)
|
|
|
(7,347)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) before interest and
taxes
|
|
|
321
|
|
|
(107)
|
|
|
648
|
|
|
503
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
(115)
|
|
|
(68)
|
|
|
(228)
|
|
|
(137)
|
Debt refinancing and
other costs
|
|
|
-
|
|
|
(2)
|
|
|
-
|
|
|
(2)
|
Total interest
expense
|
|
|
(115)
|
|
|
(70)
|
|
|
(228)
|
|
|
(139)
|
Earnings (loss) before
taxes
|
|
|
206
|
|
|
(177)
|
|
|
420
|
|
|
364
|
Tax (provision)
benefit
|
|
|
(36)
|
|
|
(1)
|
|
|
(77)
|
|
|
(101)
|
Equity in results of
affiliates, net of tax
|
|
|
3
|
|
|
13
|
|
|
10
|
|
|
19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss)
|
|
|
173
|
|
|
(165)
|
|
|
353
|
|
|
282
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
attributable to noncontrolling interests, net of tax
|
|
|
-
|
|
|
9
|
|
|
3
|
|
|
10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss) attributable to Ball
Corporation
|
|
$
|
173
|
|
$
|
(174)
|
|
$
|
350
|
|
$
|
272
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.55
|
|
$
|
(0.55)
|
|
$
|
1.11
|
|
$
|
0.85
|
Diluted
|
|
$
|
0.55
|
|
$
|
(0.55)
|
|
$
|
1.10
|
|
$
|
0.84
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding
(000s):
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
314,561
|
|
|
317,006
|
|
|
314,400
|
|
|
318,944
|
Diluted
|
|
|
316,867
|
|
|
317,006
|
|
|
316,764
|
|
|
323,316
|
Condensed Financial
Statements (Second Quarter 2023)
|
|
Unaudited Condensed
Consolidated Statements of Cash Flows
|
|
|
|
|
Six Months Ended
|
|
|
|
June 30,
|
($ in millions)
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
Cash Flows from Operating
Activities:
|
|
|
|
|
|
|
Net earnings
(loss)
|
|
$
|
353
|
|
$
|
282
|
Depreciation and
amortization
|
|
|
336
|
|
|
353
|
Business consolidation
and other activities
|
|
|
14
|
|
|
186
|
Deferred tax provision
(benefit)
|
|
|
(23)
|
|
|
(32)
|
Pension
contributions
|
|
|
(9)
|
|
|
(108)
|
Other, net
|
|
|
15
|
|
|
(96)
|
Changes in working
capital components, net of dispositions
|
|
|
(325)
|
|
|
(983)
|
Cash provided by (used
in) operating activities
|
|
|
361
|
|
|
(398)
|
Cash Flows from Investing
Activities:
|
|
|
|
|
|
|
Capital
expenditures
|
|
|
(608)
|
|
|
(819)
|
Business dispositions,
net of cash sold
|
|
|
-
|
|
|
298
|
Other, net
|
|
|
4
|
|
|
25
|
Cash provided by (used
in) investing activities
|
|
|
(604)
|
|
|
(496)
|
Cash Flows from Financing
Activities:
|
|
|
|
|
|
|
Changes in borrowings,
net
|
|
|
756
|
|
|
1,541
|
Acquisitions of
treasury stock
|
|
|
(3)
|
|
|
(578)
|
Dividends
|
|
|
(126)
|
|
|
(128)
|
Other, net
|
|
|
17
|
|
|
(1)
|
Cash provided by (used
in) financing activities
|
|
|
644
|
|
|
834
|
Effect of currency
exchange rate changes on cash, cash equivalents and restricted
cash
|
|
|
9
|
|
|
(13)
|
Change in cash, cash equivalents and restricted
cash
|
|
|
410
|
|
|
(73)
|
Cash, cash equivalents and restricted cash -
beginning of period
|
|
|
558
|
|
|
579
|
Cash, cash equivalents and restricted cash - end of
period
|
|
$
|
968
|
|
$
|
506
|
Condensed Financial
Statements (Second Quarter 2023)
|
|
Unaudited Condensed
Consolidated Balance Sheets
|
|
|
|
June 30,
|
($ in millions)
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
955
|
|
$
|
480
|
Receivables,
net
|
|
|
2,291
|
|
|
3,139
|
Inventories,
net
|
|
|
1,982
|
|
|
2,473
|
Other current
assets
|
|
|
207
|
|
|
401
|
Total current
assets
|
|
|
5,435
|
|
|
6,493
|
Property, plant and equipment,
net
|
|
|
7,280
|
|
|
6,629
|
Goodwill
|
|
|
4,269
|
|
|
4,350
|
Intangible assets, net
|
|
|
1,366
|
|
|
1,474
|
Other assets
|
|
|
1,821
|
|
|
1,980
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
20,171
|
|
$
|
20,926
|
|
|
|
|
|
|
|
Liabilities and Equity
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
Short-term debt and
current portion of long-term debt
|
|
$
|
2,245
|
|
$
|
251
|
Payables and other
accrued liabilities
|
|
|
4,681
|
|
|
6,232
|
Total current
liabilities
|
|
|
6,926
|
|
|
6,483
|
Long-term debt
|
|
|
7,507
|
|
|
8,847
|
Other long-term liabilities
|
|
|
1,833
|
|
|
2,063
|
Equity
|
|
|
3,905
|
|
|
3,533
|
|
|
|
|
|
|
|
Total liabilities and equity
|
|
$
|
20,171
|
|
$
|
20,926
|
Notes to the Condensed Financial Statements (Second 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.
Other consists of a non-reportable operating segment (beverage
packaging, other) that manufactures and sells aluminum beverage
containers in India, Saudi Arabia and throughout the Asia Pacific region; 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.
During 2022, the company completed an evaluation of the
estimated useful lives of its manufacturing equipment, buildings
and certain assembly and test equipment. The company utilized a
third-party appraiser to assist in the evaluation, which was
performed as a result of the company's experience with the duration
over which its equipment can be utilized. Effective July 1, 2022, Ball revised the estimated useful
lives of its equipment and buildings, which resulted in a net
reduction in depreciation expense of approximately $27 million ($20
million after tax, or $0.06
per diluted share) for the three months ended June 30, 2023, and $52
million ($40 million after
tax, or $0.13 per diluted share) for
the six months ended June 30, 2023,
as compared to the amounts of depreciation expense that would have
been recognized by utilizing the prior depreciable lives.
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 $213 million for the nine months ended
September 30, 2022, and for the year
ended December 31, 2022. The
impairment loss in the second quarter and the gain on sale in the
third quarter were recorded in business consolidation and other
activities. Ball's historical operations and results of the Russian
aluminum beverage packaging business are included in the results of
the beverage packaging, EMEA, business through the date of the
disposal in the third quarter of 2022.
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
June 30,
|
|
|
June 30,
|
($ in millions)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
|
|
|
|
|
|
|
|
|
Beverage packaging,
North and Central America
|
$
|
1,537
|
|
$
|
1,775
|
|
$
|
3,041
|
|
$
|
3,384
|
Beverage packaging,
EMEA (a)
|
|
920
|
|
|
1,133
|
|
|
1,754
|
|
|
2,075
|
Beverage packaging,
South America
|
|
405
|
|
|
534
|
|
|
855
|
|
|
1,028
|
Aerospace
|
|
499
|
|
|
490
|
|
|
1,007
|
|
|
994
|
Reportable segment
sales
|
|
3,361
|
|
|
3,932
|
|
|
6,657
|
|
|
7,481
|
Other
|
|
205
|
|
|
202
|
|
|
398
|
|
|
369
|
Net sales
|
$
|
3,566
|
|
$
|
4,134
|
|
$
|
7,055
|
|
$
|
7,850
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable operating earnings
|
|
|
|
|
|
|
|
|
|
|
|
Beverage packaging,
North and Central America
|
$
|
175
|
|
$
|
164
|
|
$
|
358
|
|
$
|
338
|
Beverage packaging,
EMEA (a)
|
|
98
|
|
|
129
|
|
|
171
|
|
|
229
|
Beverage packaging,
South America
|
|
30
|
|
|
52
|
|
|
80
|
|
|
130
|
Aerospace
|
|
54
|
|
|
36
|
|
|
114
|
|
|
79
|
Reportable segment
comparable operating earnings
|
|
357
|
|
|
381
|
|
|
723
|
|
|
776
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
(b)
|
|
(8)
|
|
|
11
|
|
|
7
|
|
|
(18)
|
Comparable operating earnings
|
|
349
|
|
|
392
|
|
|
730
|
|
|
758
|
Reconciling items
|
|
|
|
|
|
|
|
|
|
|
|
Business consolidation
and other activities
|
|
6
|
|
|
(467)
|
|
|
(14)
|
|
|
(186)
|
Amortization of
acquired Rexam intangibles
|
|
(34)
|
|
|
(32)
|
|
|
(68)
|
|
|
(69)
|
Earnings (loss) before interest and
taxes
|
$
|
321
|
|
$
|
(107)
|
|
$
|
648
|
|
$
|
503
|
_____________________________
|
(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 $32 million and $15 million for the
three months ended June 30, 2023 and 2022, respectively, and $42
million and $48 million for the six months ended June 30, 2023 and
2022, respectively.
|
A summary of the results of the Russian aluminum beverage
packaging business and the non-Russian components of the beverage
packaging, EMEA, segment, for the three and six months ended
June 30, 2023 and 2022, are shown
below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
($ in millions)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
|
|
|
|
|
|
|
|
|
|
Russia
|
|
$
|
—
|
|
$
|
226
|
|
$
|
—
|
|
$
|
381
|
Non-Russia
|
|
|
920
|
|
|
907
|
|
|
1,754
|
|
|
1,694
|
Beverage packaging,
EMEA, segment
|
|
$
|
920
|
|
$
|
1,133
|
|
$
|
1,754
|
|
$
|
2,075
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable operating earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
Russia
|
|
$
|
—
|
|
$
|
40
|
|
$
|
—
|
|
$
|
72
|
Non-Russia
|
|
|
98
|
|
|
89
|
|
|
171
|
|
|
157
|
Beverage packaging,
EMEA, segment
|
|
$
|
98
|
|
$
|
129
|
|
$
|
171
|
|
$
|
229
|
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 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.
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
|
|
Six Months Ended
|
|
|
June 30,
|
|
June 30,
|
($ in millions, except per share
amounts)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss)
attributable to Ball Corporation
|
|
$
|
173
|
|
$
|
(174)
|
|
$
|
350
|
|
$
|
272
|
Facility closure costs
and other items (1)
|
|
|
(6)
|
|
|
31
|
|
|
14
|
|
|
32
|
Business divestments
and other related items (2)
|
|
|
-
|
|
|
438
|
|
|
-
|
|
|
126
|
Donation to The Ball
Foundation
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
30
|
Amortization of
acquired Rexam intangibles
|
|
|
34
|
|
|
32
|
|
|
68
|
|
|
69
|
Non-comparable tax
items
|
|
|
(7)
|
|
|
(64)
|
|
|
(21)
|
|
|
(14)
|
Comparable Net Earnings
|
|
$
|
194
|
|
$
|
263
|
|
$
|
411
|
|
$
|
515
|
Comparable Diluted Earnings Per
Share
|
|
$
|
0.61
|
|
$
|
0.82
|
(a)
|
$
|
1.30
|
|
$
|
1.59
|
|
|
(a)
|
The company reported a
U.S. GAAP net loss in the three months ended June 30, 2022, and, as
a result, all potentially issuable securities were excluded in the
diluted earnings (loss) per share calculation as their effect would
have been anti-dilutive. Had these securities been included,
approximately 320.8 million weighted average shares would have been
used in calculating diluted earnings (loss) per share for the three
months ended June 30, 2022. Comparable net earnings for the three
months ended June 30, 2022, was positive; therefore, approximately
320.8 million weighted average shares were used to calculate
comparable diluted earnings per share.
|
(1)
|
In the first quarter of
2023, Ball announced the planned closure of its aluminum beverage
can manufacturing facility in Wallkill, New York. The charges for
the six months ended June 30, 2023, primarily were composed of
costs for employee severance and benefits, accelerated depreciation
and other shutdown costs related to this planned
closure.
|
(2)
|
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 during
the second quarter of 2022. For the six months ended June 30, 2022,
this loss was partially offset by the gain on sale from Ball
selling its remaining 49 percent owned equity method investment in
Ball Metalpack.
|
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
|
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
($ in millions)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss)
attributable to Ball Corporation
|
|
$
|
173
|
|
$
|
(174)
|
|
$
|
350
|
|
$
|
272
|
|
Net earnings
attributable to noncontrolling interests, net of tax
|
|
|
-
|
|
|
9
|
|
|
3
|
|
|
10
|
|
Net earnings
(loss)
|
|
|
173
|
|
|
(165)
|
|
|
353
|
|
|
282
|
|
Equity in results of
affiliates, net of tax
|
|
|
(3)
|
|
|
(13)
|
|
|
(10)
|
|
|
(19)
|
|
Tax provision
(benefit)
|
|
|
36
|
|
|
1
|
|
|
77
|
|
|
101
|
|
Earnings (loss) before
taxes
|
|
|
206
|
|
|
(177)
|
|
|
420
|
|
|
364
|
|
Total interest
expense
|
|
|
115
|
|
|
70
|
|
|
228
|
|
|
139
|
|
Earnings (loss) before
interest and taxes
|
|
|
321
|
|
|
(107)
|
|
|
648
|
|
|
503
|
|
Business consolidation
and other activities
|
|
|
(6)
|
|
|
467
|
|
|
14
|
|
|
186
|
|
Amortization of
acquired Rexam intangibles
|
|
|
34
|
|
|
32
|
|
|
68
|
|
|
69
|
|
Comparable Operating
Earnings
|
|
$
|
349
|
|
$
|
392
|
|
$
|
730
|
|
$
|
758
|
|
A summary of
Comparable EBITDA and Net Debt is as
follows:
|
|
|
|
Twelve
|
|
Less: Six
|
|
Add: Six
|
|
|
|
|
|
Months Ended
|
|
Months Ended
|
|
Months Ended
|
|
Year Ended
|
|
|
|
December 31,
|
|
June 30,
|
|
June 30,
|
|
June 30,
|
|
($ in millions, except
ratios)
|
|
2022
|
|
2022
|
|
2023
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
attributable to Ball Corporation
|
|
$
|
719
|
|
$
|
272
|
|
$
|
350
|
|
$
|
797
|
|
Net earnings
attributable to noncontrolling interests, net of tax
|
|
|
13
|
|
|
10
|
|
|
3
|
|
|
6
|
|
Net earnings
|
|
|
732
|
|
|
282
|
|
|
353
|
|
|
803
|
|
Equity in results of
affiliates, net of tax
|
|
|
(7)
|
|
|
(19)
|
|
|
(10)
|
|
|
2
|
|
Tax provision
(benefit)
|
|
|
159
|
|
|
101
|
|
|
77
|
|
|
135
|
|
Earnings before
taxes
|
|
|
884
|
|
|
364
|
|
|
420
|
|
|
940
|
|
Total interest
expense
|
|
|
330
|
|
|
139
|
|
|
228
|
|
|
419
|
|
Earnings before
interest and taxes
|
|
|
1,214
|
|
|
503
|
|
|
648
|
|
|
1,359
|
|
Business consolidation
and other activities
|
|
|
71
|
|
|
186
|
|
|
14
|
|
|
(101)
|
|
Amortization of
acquired Rexam intangibles
|
|
|
135
|
|
|
69
|
|
|
68
|
|
|
134
|
|
Comparable Operating Earnings
|
|
|
1,420
|
|
|
758
|
|
|
730
|
|
|
1,392
|
|
Depreciation and
amortization
|
|
|
672
|
|
|
353
|
|
|
336
|
|
|
655
|
|
Amortization of
acquired Rexam intangibles
|
|
|
(135)
|
|
|
(69)
|
|
|
(68)
|
|
|
(134)
|
|
Comparable EBITDA
|
|
$
|
1,957
|
|
$
|
1,042
|
|
$
|
998
|
|
$
|
1,913
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest
expense
|
|
$
|
(330)
|
|
$
|
(139)
|
|
$
|
(228)
|
|
$
|
(419)
|
|
Debt refinancing and
other costs
|
|
|
18
|
|
|
2
|
|
|
-
|
|
|
16
|
|
Interest expense
|
|
$
|
(312)
|
|
$
|
(137)
|
|
$
|
(228)
|
|
$
|
(403)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total debt at period
end
|
|
|
|
|
|
|
|
|
|
|
$
|
9,752
|
|
Cash and cash
equivalents
|
|
|
|
|
|
|
|
|
|
|
|
(955)
|
|
Net Debt
|
|
|
|
|
|
|
|
|
|
|
$
|
8,797
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable EBITDA/Interest Expense (Interest
Coverage)
|
|
|
|
|
|
|
|
|
|
|
|
4.7
|
x
|
Net Debt/Comparable
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
4.6
|
x
|
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SOURCE Ball Corporation