Ball reports 2016 results

Ball Corporation (NYSE: BLL) reported, on a U.S. GAAP basis, full-year 2016 net earnings attributable to the corporation of $224 million (including the net effect of after-tax charges of $339 million, or $2.10 per diluted share for business consolidation, debt refinancing and other non-comparable costs) or $1.39 per diluted share, on sales of $9.1 billion, compared to $281 million of net earnings attributable to the corporation, or $1.99 cents per diluted share (including the net effect of after-tax charges of $209 million, or $1.49 cents per diluted share for business consolidation costs, economic hedging losses, and debt refinancing and other costs), on sales of $8.0 billion in 2015. Ball’s comparable full-year 2016 results were net earnings of $563 million, or $3.49 per diluted share, compared to $490 million, or $3.48 per diluted share in 2015.

Fourth quarter 2016 net earnings attributable to Ball Corporation were $14 million, or 8 cents per diluted share, on sales of $2.5 billion, compared to $55 million, or 39 cents per diluted share, on sales of $1.8 billion, in the fourth quarter of 2015. On a comparable basis, Ball’s fourth quarter 2016 results were net earnings of $155 million, or 87 cents per diluted share, compared to $113 million, or 80 cents per diluted share in the fourth quarter of 2015. Earnings per share figures for 2016 reflect the impact of shares issued for the acquisitions of Rexam and Latapack-Ball.

During the second half of 2016, Ball realigned its operating segments as a result of the Rexam transaction. The company retrospectively adjusted prior period amounts to conform to the current segment presentation; comparable operating results prior to June 30, 2016, exclude the effects of the Rexam transaction. Details of comparable segment earnings, business consolidation activities and other non-comparable costs, as well as descriptions of the company’s new business segments, can be found in the notes to the unaudited condensed consolidated financial statements that accompany this news release. The company’s consolidated statements of cash flows will be provided in the company’s Form 10-K expected to be filed by March 1, 2017.

Beverage Packaging, North and Central America

Beverage packaging, North and Central America, comparable segment operating earnings for full-year 2016 were $469 million on sales of $3.6 billion, compared to $402 million on sales of $3.2 billion in 2015. For the fourth quarter 2016, comparable segment operating earnings were $114 million on sales of $959 million, compared to $86 million on sales of $736 million during the same period in 2015.

Full-year and fourth quarter 2016 segment revenues and operating earnings benefitted from the additional operations from the Rexam acquisition and continued growth in beer, specialty and certain non-alcoholic categories in the U.S. and Mexico, as well as solid manufacturing performance across the segment.

Beverage Packaging, South America

Beverage packaging, South America, comparable segment operating earnings for full-year 2016 were $185 million on sales of $1.0 billion, compared to $80 million on sales of $591 million in 2015. For the fourth quarter, comparable segment operating earnings were $85 million on sales of $437 million, compared to $37 million on sales of $184 million during the same period in 2015.

In South America, full-year and fourth quarter revenues and operating earnings were higher due to the inclusion of operations from the Rexam acquisition. Overall industry demand declined high single digits in the fourth quarter and low to mid-single digits for the full-year 2016 in line with beverage consumption and GDP declines in Brazil. Despite the weakness in the Brazilian economy, beverage cans performed well versus other packaging substrates, and specialty cans continue to represent approximately 45 percent of the package mix for the segment.

Beverage Packaging, Europe

Beverage packaging, Europe, comparable segment operating earnings for the full-year 2016 were $217 million on sales of $2.0 billion, compared to $192 million on sales of $1.7 billion in 2015. For the fourth quarter 2016, comparable segment operating earnings were $32 million on sales of $449 million, compared to $43 million on sales of $343 million during the same period in 2015.

Comparable segment earnings in the fourth quarter and year-to-date reflect the inclusion of operations from the Rexam acquisition. Fourth quarter 2016 segment results were negatively impacted by depreciation associated with fixed asset write-ups from the acquisition in the European segment given its scale relative to other reporting segments involved in the acquisition and the acquired business has more pronounced seasonality versus our legacy European business. Plans have been initiated to address revenue and margin improvement in 2017 and beyond.

Overall industry demand was up slightly led by solid demand across continental Europe offset somewhat by the normal seasonal slowdown in Russia. To support strong growth for beverage cans on the Iberian Peninsula, the company began construction of a two-line, aluminum beverage can manufacturing facility near Madrid, Spain, with most of the new capacity secured under a long-term customer contract. The plant will be operational in 2018 and produce multiple can sizes.