Ball Reports Strong 2020 Results
WESTMINSTER, Colo., Feb. 4, 2021 /PRNewswire/ -- Ball Corporation (NYSE: BLL) today reported, on a U.S. GAAP basis, full-year 2020 net earnings attributable to the corporation of $585 million (including net after-tax charges of $402 million, or $1.21 per diluted share for business consolidation and other non-comparable items), or $1.76 per diluted share, on sales of $11.8 billion, compared to $566 million net earnings attributable to the corporation, or $1.66 per diluted share (including net after-tax charges of $295 million, or 87 cents per diluted share for business consolidation and other non-comparable items), on sales of $11.5 billion in 2019. Ball's full-year 2020 comparable net earnings were $987 million, or $2.97 per diluted share, compared to $861 million, or $2.53 per diluted share in 2019.
Fourth quarter 2020 net earnings attributable to the corporation, on a U.S. GAAP basis, were $227 million, or 68 cents per diluted share, on sales of $3.1 billion compared to $160 million, or 48 cents per diluted share, on sales of $2.7 billion in the fourth quarter of 2019. Ball's fourth quarter 2020 comparable net earnings were $272 million, or 81 cents per diluted share versus fourth quarter 2019 comparable net earnings of $238 million, or 71 cents per diluted share.
Results reflect the 2019 sale of the company's Argentine steel aerosol business and Chinese beverage can assets, and new segment reporting for the company's beverage packaging, EMEA business and other non-reportable results. References to volume data represent units shipped, and year-over-year global beverage volumes referenced exclude the impact of the 2019 sale of the Chinese beverage can assets. Details of comparable segment earnings, business consolidation 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.
During the quarter, the company posted 14 percent comparable earnings per diluted share growth on 12 percent global beverage volume growth and 18 percent growth in funded and unfunded aerospace backlog. In addition, the successful fourth quarter startup of the company's aluminum cup manufacturing facility in Rome, Georgia, will support the North American retail launch of the new aluminum cup during the first half of 2021.
"We finished 2020 with positive momentum. Significant demand growth for our aluminum packaging products and aerospace technologies continues, full-year comparable diluted earnings per share increased 17 percent, and our strong balance sheet and cash flow from operations underpinned $1.1 billion of capital investments to address sustainable growth across our global operations. Our company continues to be well-positioned, and our focus remains on our employees' safety, our customers' success, the efficient startup of various multi-year, EVA-enhancing capital projects, and the training and development of our workforce to ensure value creation for our stakeholders in 2021 and beyond," said John A. Hayes, chairman and chief executive officer.
Beverage Packaging, North and Central America
Beverage packaging, North and Central America, comparable segment operating earnings for full-year 2020 were $683 million on sales of $5.1 billion compared to $555 million on sales of $4.8 billion in 2019. For the fourth quarter 2020, comparable segment operating earnings were $139 million on sales of $1.3 billion compared to $139 million on sales of $1.1 billion during the same period in 2019.
Full-year comparable segment earnings increased by 23 percent supported by mid-single-digit volume growth, benefits from new contractual terms, higher specialty mix and improved operational performance offset by startup and labor costs. In the fourth quarter, 11 percent volume growth offset $25 million of startup costs related to capacity expansion projects in Glendale, Arizona, and Pittston, Pennsylvania, that are expected to be online in the first and second quarters of 2021, respectively, resulting in flat comparable segment earnings versus the fourth quarter of 2019. Demand continues to outstrip supply, and the business will continue to address consumers' significant demand by leveraging production from mid-2020 commissioned can manufacturing lines in Rome, Georgia, and Fort Worth, Texas, and the short-term benefit of imported cans from our global network in 2021 and 2022.
To deliver longer-duration contracted volume growth and align with our customers' can-filling investments, additional can manufacturing investments are anticipated beyond 2021. The company recently announced construction of a new aluminum end manufacturing facility in Bowling Green, Kentucky, to align end capacity with growing can demand. The new Bowling Green facility is scheduled to begin production in 2022.
Beverage Packaging, EMEA
Beverage packaging, EMEA, comparable segment operating earnings for full-year 2020 were $354 million on sales of $2.9 billion compared to $351 million on sales of $2.9 billion in 2019. For the fourth quarter 2020, comparable segment operating earnings were $106 million on sales of $768 million compared to $74 million on sales of $642 million during the same period in 2019. Beginning in 2020, current and historical quarterly results for the company's existing facilities in Cairo, Egypt, and Manisa, Turkey, have been consolidated into the segment.
Full-year comparable segment earnings reflect 5 percent segment volume growth following the second half demand recovery associated with strong at-home consumption trends in the U.K., Nordics and Russia. In the fourth quarter, 20 percent segment volume growth and improved customer and specialty mix offset slightly by higher labor costs led to a 43 percent increase in comparable segment earnings. Packaging mix shift to sustainable aluminum cans for traditional and non-traditional beverages continues to accelerate, and additional beverage can line investments in the U.K., Czech Republic and Russia are on track to support regional contracted demand in 2021 and beyond.
Beverage Packaging, South America
Beverage packaging, South America, comparable segment operating earnings for full-year 2020 were $280 million on sales of $1.7 billion compared to $288 million on sales of $1.7 billion in 2019. For the fourth quarter 2020, comparable segment operating earnings were $107 million on sales of $529 million compared to $95 million on sales of $460 million during the same period in 2019.
Segment volume ended the year and quarter up 11 percent and 12 percent, respectively. Full-year earnings reflect the extreme demand volatility experienced in the second quarter and the significant demand rebound heading into the seasonally strong fourth quarter. In Brazil, demand remains strong and continues to outstrip supply as small grocery stores and gas stations continue to emphasize recyclable aluminum beverage packaging over returnable glass.
To support contracted volume growth and align with our customers' brewing capacity additions and can-filling investments across South America, additional can manufacturing investments are anticipated in 2021 and beyond. The previously announced multi-line facility in Frutal, Brazil, will begin production in the second half of 2021.
Aerospace
Aerospace comparable segment operating earnings for full-year 2020 were $153 million on sales of $1.7 billion compared to $140 million on sales of $1.5 billion in 2019. For the fourth quarter, comparable segment operating earnings were $39 million on sales of $420 million compared to $37 million on sales of $398 million. Contracted backlog ended the year at $2.4 billion and year-over-year unfunded backlog consisting of contracts already won, but not yet booked into current contracted backlog, increased 30 percent to $5.5 billion.
Segment results were strong for the full-year and fourth quarter despite inefficiencies created from tighter safety protocols, certain supply chain inefficiencies and costs due to COVID-19. The company continues to win defense, climate change and Earth-monitoring contracts to provide mission-critical programs and technologies to U.S. government, defense, intelligence, and reconnaissance and surveillance customers. Multiple projects to expand manufacturing capacity, test capabilities engineering, and support workspace remain on track.
Non-reportable
Full-year results in non-reportable reflect higher year-over-year undistributed corporate expenses, the impact of the 2019 sale of the Chinese beverage can assets and Argentine steel aerosol business, lower operating results in the remaining non-reportable beverage businesses, and start-up costs in the recently launched aluminum cup business. The current and historical results from the existing facilities in Cairo, Egypt, and Manisa, Turkey, have been consolidated into the beverage packaging, EMEA segment beginning in 2020.
The results for the company's global aluminum aerosol business and beverage can manufacturing facilities in India, Saudi Arabia and Myanmar and investments in the company's new aluminum cup business continue to be reported as non-reportable segments. During the quarter, the company's global aluminum aerosol volumes increased high-single-digits, excluding the impact of the recently acquired Brazilian facility, and the aluminum cup business successfully ramped up production at its new Rome, Georgia, manufacturing facility. Multi-channel, retail shipments of aluminum cups are expected to commence in the first half of 2021. In the fourth quarter, the company recorded higher corporate costs associated with compensation and benefits costs as well as investments to support a 15 percent higher year-over-year labor base.
Outlook
"Our company generates significant cash from operations, and we will continue to allocate significant capital to organic growth investments while continuing to return value to shareholders. In 2020, capital expenditures exceeded $1.1 billion, and given the substantial growth in contracted volumes and backlog, total capital expenditures are expected to exceed $1.5 billion in 2021, to support additional EVA-enhancing projects," said Scott C. Morrison, executive vice president and chief financial officer.
"As we embark on our 141st year in operation, our company has never been stronger and the opportunities never so vast. We achieved record 2020 results because of our team's ability to adapt and work safely together while also leveraging our Drive for 10 vision and enduring culture to guide our journey through unforeseen challenges and emerging opportunities. The momentum in our businesses is accelerating, and we continue to hire and develop a diverse workforce and mentor next-generation leaders to execute multiple growth projects as efficiently and safely as possible with our employees, customers and supply chains. In 2021 and beyond, we look forward to continuing to grow our cash from operations and EVA dollars on an even larger capital base while returning capital to our shareholders and exceeding our long-term diluted earnings per share growth goal of at least 10 to 15 percent," Hayes 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 21,500 people worldwide and reported 2020 net sales of $11.8 billion. For more information, visit www.ball.com, or connect with us on Facebook or Twitter.
Conference Call Details
Ball Corporation (NYSE: BLL) will hold its fourth quarter 2020 earnings call today at 9 a.m. Mountain time (11 a.m. Eastern). The North American toll-free number for the call is 800-354-6885. International callers should dial 303-223-2698. Please use the following URL for a webcast of the live call:
https://edge.media-server.com/mmc/p/z5zrx42g
For those unable to listen to the live call, a taped replay will be available from 11 a.m. Mountain time on Feb. 4, 2021, until 11 a.m. Mountain time on Feb. 12, 2021. To access the replay, call 800-633-8284 (North American callers) or 402-977-9140 (international callers) and use reservation number 21989087. 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," "targets," "likely," "positions" 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 any such statements should be read in conjunction with, and, qualified in their entirety by, the cautionary statements referenced below. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Key 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 our Form 10-K, which are available on our website and at www.sec.gov. Additional factors that might affect: a) our packaging segments include product capacity, supply, and demand constraints and fluctuations, including due to virus and disease outbreaks and responses thereto; availability/cost of raw materials, equipment, and logistics; competitive packaging, pricing and substitution; changes in climate and weather; 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; potential delays and tariffs related to the U.K's departure from the EU; changes in major customer or supplier contracts or a loss of a major customer or supplier; political instability and sanctions; currency controls; changes in foreign exchange or tax rates; and tariffs, trade actions, or other governmental actions, including business restrictions and shelter-in-place orders in any country or jurisdiction affecting goods produced by us or in our supply chain, including imported raw materials; b) our aerospace segment include funding, authorization, availability and returns of government and commercial contracts; and delays, extensions and technical uncertainties affecting segment contracts; c) the Company 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 action or issues including tax, environmental, health and workplace safety, including U.S. FDA and other actions or public concerns affecting products filled in our 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; rates of return on assets of the Company's defined benefit retirement plans; pension changes; uncertainties surrounding geopolitical events and governmental policies both in the U.S. and in other countries, including policies, orders and actions related to COVID-19, the U.S. government elections, stimulus package(s), budget, sequestration and debt limit; reduced cash flow; interest rates affecting our debt; and successful or unsuccessful joint ventures, acquisitions and divestitures, and their effects on our operating results and business generally.
# # #
Condensed Financial Statements (Fourth Quarter 2020)
---
Unaudited Condensed Consolidated Statements of Earnings
Three Months Ended Year Ended
December 31, December 31,
($ in millions, except per share amounts) 2020 2019 2020 2019
Net sales $
3,102 $
2,719 $
11,781 $
11,474
---
Costs and expenses
Cost of sales (excluding depreciation and amortization) (2,448) (2,159) (9,323) (9,203)
Depreciation and amortization (169) (168) (668) (678)
Selling, general and administrative (162) (89) (525) (417)
Business consolidation and other activities (27) (97) (262) (244)
(2,806) (2,513) (10,778) (10,542)
Earnings before interest and taxes 296 206 1,003 932
---
Interest expense (69) (80) (275) (317)
Debt refinancing and other costs (3) (41) (7)
Total interest expense (69) (83) (316) (324)
Earnings before taxes 227 123 687 608
Tax (provision) benefit (7) 2 (99) (71)
Equity in results of affiliates, net of tax 7 5 (6) (1)
Net earnings 227 130 582 536
---
Net loss attributable to noncontrolling interests, net of tax 30 3 30
Net earnings attributable to Ball Corporation $
227 $
160 $
585 $
566
---
Earnings per share:
Basic $
0.69 $
0.49 $
1.79 $
1.71
Diluted $
0.68 $
0.48 $
1.76 $
1.66
Weighted average shares outstanding (000s):
Basic 327,137 326,282 326,260 331,102
Diluted 333,898 334,860 332,815 340,121
Unaudited Condensed Consolidated Statements of Cash Flows
Year Ended
December 31,
($ in millions) 2020 2019
Cash Flows from Operating Activities:
Net earnings $
582 $
536
Depreciation and amortization 668 678
Business consolidation and other activities 262 244
Deferred tax provision (benefit) 17 (45)
Other, net 9 (101)
Changes in working capital (106) 236
Cash provided by (used in) operating activities 1,432 1,548
---
Cash Flows from Investing Activities:
Capital expenditures (1,113) (598)
Business acquisitions (69)
Business dispositions (17) 160
Other, net 18 16
Cash provided by (used in) investing activities (1,181) (422)
---
Cash Flows from Financing Activities:
Changes in borrowings, net (262) 1,112
Net issuances (purchases) of common stock (75) (945)
Dividends (198) (182)
Other, net (67) (31)
Cash provided by (used in) financing activities (602) (46)
---
Effect of currency exchange rate changes on cash, cash equivalents and restricted cash (74) (2)
Change in cash, cash equivalents and restricted cash (425) 1,078
Cash, cash equivalents and restricted cash - beginning of period 1,806 728
Cash, cash equivalents and restricted cash - end of period $
1,381 $
1,806
---
Unaudited Condensed Consolidated Balance Sheets
December 31,
($ in millions) 2020 2019
Assets
Current assets
Cash and cash equivalents $
1,366 $
1,798
Receivables, net 1,738 1,631
Inventories, net 1,353 1,274
Other current assets 218 181
Total current assets 4,675 4,884
Property, plant and equipment, net 5,351 4,470
Goodwill 4,484 4,419
Intangible assets, net 1,883 2,002
Other assets 1,859 1,585
Total assets $
18,252 $
17,360
---
Liabilities and Equity
Current liabilities
Short-term debt and current portion of long-term debt $
17 $
1,480
Payables and other accrued liabilities 4,427 4,097
Total current liabilities 4,444 5,577
Long-term debt 7,783 6,337
Other long-term liabilities 2,688 2,427
Equity 3,337 3,019
Total liabilities and equity $
18,252 $
17,360
---
Notes to the
Condensed
Financial
Statements
(Fourth Quarter
2020)
---
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.
Effective
January 1,
2020, the
company
implemented
changes to its
management and
internal
reporting
structure for
cost reduction
and operational
efficiency
purposes. As a
result of these
changes, the
company's
plants in
Cairo, Egypt,
and Manisa,
Turkey, are now
included in the
beverage
packaging,
Europe, Middle
East and Africa
(beverage
packaging,
EMEA), segment.
The company's
operations in
India and Saudi
Arabia are now
combined with
the former non-
reportable
beverage
packaging, Asia
Pacific,
operating
segment as a
new non-
reportable
beverage
packaging,
other,
operating
segment. The
company's
segment results
and disclosures
for the three
months and year
ended December
31, 2019, have
been
retrospectively
adjusted to
conform to the
current year
presentation.
Beverage
packaging,
North and
Central
America
: Consists of
operations in
the U.S.,
Canada and
Mexico that
manufacture and
sell aluminum
beverage
containers.
---
Beverage
packaging,
EMEA
:
Consists of
operations in
numerous
countries
throughout
Europe,
including
Russia, as well
as Egypt and
Turkey, that
manufacture and
sell aluminum
beverage
containers
throughout
those regions.
---
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
the provision
of services
used in the
defense, civil
space and
commercial
space
industries.
---
Other consists
of a non-
reportable
operating
segment
(beverage
packaging,
other),
discussed
above, that
manufactures
and sells
aluminum
beverage
containers; a
non-reportable
segment that
manufactures
and sells
extruded
aluminum
aerosol
containers and
aluminum slugs
(aerosol
packaging); a
non-reportable
operating
segment that
manufactures
and sells
aluminum cups
(aluminum
cups);
undistributed
corporate
expenses;
intercompany
eliminations
and other
business
activities.
The company also
has investments
in operations
in Guatemala,
Panama, South
Korea, 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.
Three Months Ended Year Ended
December 31, December 31,
($ in millions) 2020 2019 2020 2019
Net sales
Beverage
packaging, North
and Central
America $
1,301 $
1,111 $
5,076 $
4,758
Beverage
packaging, EMEA 768 642 2,945 2,857
Beverage
packaging, South
America 529 460 1,695 1,670
Aerospace 420 398 1,741 1,479
Reportable segment
sales 3,018 2,611 11,457 10,764
Other 84 108 324 710
Net sales $
3,102 $
2,719 $
11,781 $
11,474
Comparable
operating
earnings
Beverage
packaging, North
and Central
America $
139 $
139 $
683 $
555
Beverage
packaging, EMEA 106 74 354 351
Beverage
packaging, South
America 107 95 280 288
Aerospace 39 37 153 140
Reportable segment
comparable
operating
earnings 391 345 1,470 1,334
Other (a) (29) (5) (55) (3)
Comparable
operating
earnings 362 340 1,415 1,331
Reconciling items
Business
consolidation and
other activities (27) (97) (262) (244)
Amortization of
acquired Rexam
intangibles (39) (37) (150) (155)
Earnings before
interest and
taxes $
296 $
206 $
1,003 $
932
____________________
(a) Includes undistributed corporate expenses,
net, of $25 million and $8 million for the
three months ended December 31, 2020 and
2019, respectively, and $58 million and $50
million for the years ended December 31,
2020 and 2019, respectively.
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 the above transactions on after tax earnings is as follows:
Three Months Ended Year Ended
December 31, December 31,
($ in millions, except
per share amounts) 2020 2019 2020 2019
Net earnings
attributable to Ball
Corporation $
227 $
160 $
585 $
566
Add: Business
consolidation and
other activities 27 97 262 244
Add: Amortization of
acquired Rexam
intangibles 39 37 150 155
Add: Share of equity
method affiliate non-
comparable costs, net
of tax 31 16
Add: Debt refinancing
and other costs 3 41 7
Less: Noncontrolling
interest share of
non-comparable
costs, net of tax (32) 1 (32)
Less: Non-comparable
tax items (21) (27) (83) (95)
Net earnings
attributable to Ball
Corporation before
above transactions
(Comparable Net
Earnings) $
272 $
238 $
987 $
861
Comparable diluted
earnings per share $
0.81 $
0.71 $
2.97 $
2.53
A summary of the effects of the above transactions on earnings before interest and taxes is as follows:
Three Months Ended Year Ended
December 31, December 31,
($ in millions) 2020 2019 2020 2019
Net earnings attributable
to Ball Corporation $
227 $
160 $
585 $
566
Add: Net loss attributable
to noncontrolling
interests, net of tax (30) (3) (30)
Net earnings 227 130 582 536
Less: Equity in results of
affiliates, net of tax (7) (5) 6 1
Add: Tax provision
(benefit) 7 (2) 99 71
Earnings before taxes 227 123 687 608
Add: Total interest expense 69 83 316 324
Earnings before interest
and taxes 296 206 1,003 932
Add: Business consolidation
and other activities 27 97 262 244
Add: Amortization of
acquired Rexam intangibles 39 37 150 155
Comparable Operating
Earnings $
362 $
340 $
1,415 $
1,331
A summary of Comparable EBITDA and Net Debt is as follows:
Year Ended
December 31,
($ in millions, except ratios) 2020
Net earnings attributable to Ball
Corporation $
585
Add: Net loss attributable to noncontrolling
interests, net of tax (3)
Net earnings 582
Less: Equity in results of affiliates, net of
tax 6
Add: Tax provision (benefit) 99
Earnings before taxes 687
Add: Total interest expense 316
Earnings before interest and taxes (EBIT) 1,003
Add: Business consolidation and other activities
(a) 262
Add: Amortization of acquired Rexam intangibles
(a) 150
Comparable Operating Earnings 1,415
Add: Depreciation and amortization 668
Less: Amortization of acquired Rexam intangibles
(a) (150)
Comparable EBITDA $
1,933
Total interest expense $
(316)
Less: Debt refinancing and other costs 41
Interest expense $
(275)
Total debt at period end $
7,800
Less: Cash and cash equivalents (1,366)
Net Debt $
6,434
Comparable EBITDA/Interest Expense (Interest
Coverage) 7.0 x
Net Debt/Comparable EBITDA 3.3 x
____________________
(a) For detailed information on these items,
please see the respective quarterly filings
and/or earnings releases, which can be
found on our website at www.ball.com.
3. Non-Comparable Items
Three Months Ended December 31, Year Ended December 31,
($ in millions) 2020 2019 2020 2019
Non-comparable items - income
(expense)
Beverage packaging, North and Central
America
Business consolidation and other
activities
Facility closure costs (1)
$ $
(1) $
(2) $
(8)
Individually insignificant items (1) (5) (3) (6)
Other non-comparable items
Amortization of acquired Rexam
intangibles (7) (7) (27) (29)
Total beverage packaging, North and
Central America (8) (13) (32) (43)
Beverage packaging, EMEA
Business consolidation and other
activities
Facility closure and restructuring costs
(2) (3) (9) (10) (26)
Individually insignificant items 1 (6) (13)
Other non-comparable items
Amortization of acquired Rexam
intangibles (17) (16) (64) (67)
Total beverage packaging, EMEA (19) (31) (74) (106)
Beverage packaging, South America
Business consolidation and other
activities
Brazilian indirect taxes (3) 1 4 57
Facility closure costs (29)
Individually insignificant items 2 (8) (3) (13)
Other non-comparable items
Amortization of acquired Rexam
intangibles (13) (14) (55) (56)
Total beverage packaging, South America (11) (21) (54) (41)
Other
Business consolidation and other
activities
Pension settlements (4) (18) (120) (8)
Rexam acquisition related compensation
arrangements 2 (6) (3)
Goodwill impairment charges in beverage
packaging, other segment (5) (62)
Reversal of certain provisions in
beverage packaging, other segment (6) 11
Loss from sale of and subsequent
adjustment to selling price of steel
food and steel aerosol business (7) (15) (52)
Loss on sale of China business and
related costs (8) (2) (23) (63)
Impairment of long-lived and other
assets in Saudi Arabian beverage
packaging business (64) (64)
Individually insignificant items (8) (5) (33) (16)
Other non-comparable items
Share of equity method affiliate non-
comparable costs, net of tax (9) (31) (16)
Noncontrolling interest's share of non-
comparable costs (income), net of tax 32 (1) 32
Amortization of acquired Rexam
intangibles (2) (4) (3)
Debt extinguishment and refinance costs
(10) (3) (41) (7)
Total other (28) (40) (325) (200)
Total business consolidation and other
activities (27) (97) (262) (244)
Total other non-comparable items (39) (8) (223) (146)
Total non-comparable items (66) (105) (485) (390)
Discrete non-comparable tax items (11) 5 1 (25) 13
Tax effect on business consolidation and
other activities 7 16 52 35
Tax effect on other non-comparable
items 9 10 56 47
Total non-comparable tax items 21 27 83 95
Total non-comparable items, net of tax $
(45) $
(78) $
(402) $
(295)
(1) In 2018, the company closed its
beverage packaging facilities in
Chatsworth, California, Longview,
Texas, and Birmingham, Alabama.
Charges were the result of updated
estimates for the costs of employee
severance and benefits and facility
shutdown costs.
(2) The company recorded charges for
asset impairments, accelerated
depreciation and inventory
impairments related to plant
closures and restructuring
activities.
(3) The company recorded gains related to
indirect tax contingencies in
Brazil. Our Brazilian subsidiaries
filed lawsuits to challenge the
Brazilian tax authorities regarding
the computation of certain indirect
taxes, claiming amounts were
overpaid to the tax authorities. The
amounts recorded in business
consolidation and other activities
related to prior periods.
(4) The company completed partial
settlements of benefit obligations
related to certain of the company's
pension plans in both 2020 and 2019,
triggering settlement accounting.
Charges in 2020 relate to a
terminated vested lump sum exercise
in the quarter ended December 31,
the purchase of non-participating
group annuity contracts in the
quarter ended June 30 and normal
lump sum payments.
(5) The company recorded a non-cash
impairment charge for the goodwill
of the beverage packaging, other,
reporting unit as the carrying
amount of the reporting unit
exceeded its fair value.
(6) The company reversed provisions
recorded in the fourth quarter of
2019 against working capital in the
beverage packaging, other, segment
as balances due have been collected.
(7) The company recorded charges related
to the sale of its U.S. steel food
and aerosol business resulting from
the adjustment to the selling price.
(8) The company, noting a deterioration
in the real estate market in China,
reduced the expected value of the
contingent consideration due as part
of the sale in 2019 of the company's
China beverage packaging business.
(9) In 2020, the company recorded its
share of equity method non-
comparable costs, principally
related to the provision of
additional equity contributions and
loans to Ball Metalpack by its
shareholders. Ball's share was $30
million, resulting in the
recognition of previously unrecorded
equity method losses associated with
prior periods.
(10) The company recorded debt
extinguishment costs, principally
related to the redemption of
outstanding euro-denominated 3.50%
senior notes due in 2020 in the
amount of EUR400 million and the
outstanding 4.375% senior notes due
in 2020 in the amount of $1 billion.
(11) During 2020, the company recorded a
tax charge to revalue its U.K.
deferred tax balances for a change
in the U.K. tax rate, incurred
foreign exchange losses on its
deferred tax balances in Brazil and
updated the Canadian tax impact of a
prior business disposition. These
amounts were partially offset by a
tax benefit for U.S. tax losses
carried back to a year with a higher
enacted tax rate and excess tax
benefits from the vesting of Rexam
acquisition related compensation
arrangements.
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SOURCE Ball Corporation
