Packaging

Ball Reports Strong 2010 Results, Expects Further Growth in 2011

Friday 28. January 2011 - Full-year comparable earnings per diluted share from continuing operations of $4.72, vs. $3.92 in 2009, an increase of more than 20 percent

Highlights
Full-year comparable earnings per diluted share from continuing operations of $4.72, vs. $3.92 in 2009, an increase of more than 20 percent
Fourth quarter comparable earnings per diluted share from continuing operations of $1.06, including a tax benefit of 13 cents per diluted share, vs. 83 cents in 2009
The company generated $506 million in free cash flow, including an incremental after-tax pension contribution of approximately $37 million in the fourth quarter of 2010 and excluding a change in accounting for receivables securitization
Aerospace contracted backlog increased to $989 million
Ball Corporation (NYSE: BLL) today reported full-year 2010 net earnings from continuing operations of $542.9 million, or $5.92 per diluted share, on sales of $7.6 billion, compared to $390.1 million, or $4.10 per diluted share, on sales of $6.7 billion in 2009. On a comparable basis, Ball’s full-year 2010 results were net earnings of $433.0 million, or $4.72 per diluted share, compared to $372.4 million, or $3.92 per diluted share, in 2009.
Fourth quarter 2010 net earnings from continuing operations were $93.7 million, or $1.06 per diluted share,on sales of $2.0 billion, compared to $79.7 million, or 83 cents per diluted share, on sales of $1.7 billion, in the fourth quarter of 2009. On a comparable basis, Ball’s fourth quarter results were net earnings of $94.4 million, or $1.06 per diluted share including a tax benefit of 13 cents per diluted share, compared to $79.1 million, or 83 cents per diluted share, in the fourth quarter of 2009.
The fourth quarter and year-to-date results include a tax benefit of $11.8 million (13 cents per diluted share) related to the refinancing in December of the company’s bank facilities.
“Excellent operating performance, the consolidation of our Brazilian joint venture into our financial results, continued growth in emerging markets and strong aerospace program performance all contributed to the significant improvement in results,” said John A. Hayes, president and chief executive officer. “Our fourth quarter diluted earnings per share, adjusted for the impact of the tax benefit of 13 cents, were 93 cents, an increase over 83 cents a year ago.”
Full-year 2010 and 2009 results include the effects of business consolidation activities and related items. Details of the comparable segment earnings can be found in the notes to the unauditedconsolidated financial statements that accompany this news release.
Ball announced yesterday a two-for-one split of the company’s common stock, effective Feb. 15 to shareholders of record on Feb. 4, and a 40 percent increase in the company’s quarterly cash dividend, payable March 15 to shareholders of record on March 1. Ball’s board also authorized the repurchase of up to 20 million of the company’s post-split shares.
Metal Beverage Packaging, Americas & Asia
Metal beverage packaging, Americas and Asia, comparable segment operating earnings were $418.3 million in 2010 on sales of $3.8 billion, compared to $296.0 million in 2009 on sales of $2.9 billion. For the fourth quarter, comparable earnings were $117.0 million on sales of $1.0 billion, compared to $72.1 million on sales of $812.9 million in 2009. The consolidation of our Brazilian joint venture into the company’s financial results, double-digit volume growth in China and Brazil and excellent operating performance drove improved results.
Ball announced on Tuesday the planned closure of its Torrance, Calif., beverage can plant as part of a reduction of 12-ounce can capacity. The company also announced it will expand specialty beverage can production in its Fort Worth, Texas, plant. These actions better align Ball’s manufacturing footprint with demand and increase operational efficiencies.
Metal Beverage Packaging, Europe
Metal beverage packaging, Europe, comparable segment results in 2010 were operating earnings of $212.9 million on sales of $1.7 billion, compared to $214.8 million on sales of $1.7 billion in 2009. For the fourth quarter, comparable operating earnings in 2010 were $42.3 million on sales of $408.5 million, compared to $50.3 million on sales of $427.1 million in the fourth quarter of 2009.
Single-digit volume growth partially offset the negative effects of a lower year-over-year Euro exchange rate, unfavorable weather conditions in fourth quarter and lower exports. The German beverage can market continued its steady growth as more retail outlets stocked cans. Earlier this month, Ball completed its acquisition of Aerocan S.A.S., a leading supplier of extruded aluminum aerosol cans and bottles in Europe.
Metal Food & Household Products Packaging, Americas
Metal food and household products packaging, Americas, comparable segment results for 2010 were operating earnings of $129.1 million on sales of $1.4 billion, compared to $130.8 million in 2009 on sales of $1.4 billion. For the fourth quarter of 2010, comparable segment results were operating earnings of $24.6 million on sales of $352.6 million, compared to $18.3 million on sales of $326.4 million in the same period of 2009.
Excellent plant performance and the positive impact of the acquisition of Neuman Aluminum in July 2010 contributed to improved results.
Aerospace and Technologies
Aerospace and technologies comparable segment results were operating earnings of $69.8 million on sales of $713.7 million in 2010, compared to $61.4 million on sales of $689.2 million in 2009. For the fourth quarter, earnings were $19.3 million on sales of $200.6 million, compared to $15.8 million on sales of $161.2 million in the quarter in 2009. Strong execution on existing contracts, and initial activity on spacecraft and instrument design and development contracts won during the second half of 2010, led to improved results. Contracted backlog at the close of the year was $989 million.
During the quarter, the STPSat-2 satellite, built by Ball Aerospace for the U.S. Air Force, lifted off successfully from Alaska. It is the first spacecraft in Ball’s STP Standard Interface Vehicle product line, and is compatible with multiple launch vehicles and supports a variety of experimental and risk reduction payloads at different low-Earth orbits. In January 2011, NASA’s Kepler mission confirmed the discovery in 2010 of its first rocky planet, named Kepler-10b. Ball Aerospace developed the Kepler flight system and supports mission operations with the Laboratory for Atmospheric and Space Physics at the University of Colorado in Boulder.
Outlook
“During 2010 we extended the company’s debt profile and achieved favorable terms on our borrowing facility, resulting in a very competitive capital structure that provides greater flexibility to grow our business and return capital to our shareholders,” said Scott C. Morrison, senior vice president and chief financial officer. “We expect to generate at least $400 million in free cash flow in 2011 after investing in key projects to respond to organic and emerging market growth opportunities, and the majority of our free cash flow will be used to repurchase stock.”
“We are executing on our strategy to grow our worldwide beverage can business and aerospace business, further develop our metal food and household products packaging business and utilize free cash flow and earnings growth to increase shareholder value,” Hayes said. “Ball is well positioned for continued growth in 2011, and we expect the company’s full-year 2011 earnings to exceed those of 2010.”