Exhibit 99.1

 

News Release For Immediate Release www.ball.com

Investor Contact: Ann T. Scott 303-460-3537, ascott@ball.com Media Contact: Renee Robinson 303-460-2476, rarobins@ball.com

Ball Reports 2016 Results

 

Highlights
●	Full-year and fourth quarter U.S. GAAP earnings per diluted share of $1.39 and 8 cents, respectively, vs. full-year and fourth quarter 2015 results of $1.99 and 39 cents, respectively
●	Full-year and fourth quarter comparable earnings per diluted share of $3.49 and 87 cents, respectively, vs. 2015 results of $3.48 and 80 cents, respectively; 2016 results reflect higher year-over-year share count
●	Solid global beverage and aerosol can demand and contribution from the Rexam acquisition drove the increase in comparable operating results
●	Aerospace contracted backlog of $1.4 billion at year end
●	Company reaffirms 2017 and long-term financial goals

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.

 

"Following a very complex and rewarding year, our 2016 comparable results were in line with our expectations.  We had previously discussed that the momentum in our existing business combined with the addition of our acquisition would generate sequential momentum as we moved into 2017. This momentum continues to build in all of our businesses and our packaging products are excellently positioned to support our customers' plans to market sustainable packaging to all generations for any occasion," said John A. Hayes, chairman, president and chief executive officer. "We once again reaffirm our financial goals for 2017 through 2019 and expect $150 million of transaction-related synergies to be recognized in 2017 with at least another $150 million expected by the end of 2019."

 

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.

Aerospace

"Our year-end 2016 net debt of $6.9 billion was slightly better than our forecast of $7.0 billion. We continue to expect 2017 free cash flow to be in the range of $750 million to $850 million after capital spending of approximately $500 million," said Scott C. Morrison, senior vice president and chief financial officer.

"The company is on course to deliver improved free cash flow, EVA dollar growth and comparable diluted earnings per share growth of at least 20 percent in 2017. We are fully executing upon our post-acquisition plans with the completed closure of the former Rexam headquarters, the closure of the Charlotte, North Carolina, regional support center slated for mid-2017, and additional transformative process and footprint work slated for the second half 2017 and beyond," Hayes said.

About Ball Corporation

Ball Corporation supplies innovative, sustainable packaging solutions for beverage, food 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 18,450 people worldwide and reported 2016 net sales of $9.1 billion. For more information, visit www.ball.com, or connect with us on Facebook or Twitter.

 

Ball Corporation (NYSE: BLL) will hold its fourth quarter 2016 earnings call today at 9 a.m. Mountain time (11 a.m. Eastern). The North American toll-free number for the call is 800-695-8859. International callers should dial 303-223-4378. Please use the following URL for a webcast of the live call:

For those unable to listen to the live call, a taped replay will be available from 11 a.m. Mountain time on Feb. 2, 2017, until 11 a.m. Mountain time on Feb. 9, 2017. To access the replay, call 800-633-8284 (North American callers) or 402-977-9140 (international callers) and use reservation number 21840800. 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."

This release contains "forward-looking" statements concerning future events and financial performance. Words such as "expects," "anticipates," "estimates," "believes," "targets," "likely" 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 of 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 demand fluctuations; availability/cost of raw materials; competitive packaging, pricing and substitution; changes in climate and weather; competitive activity; failure to achieve synergies, productivity improvements or cost reductions; mandatory deposit or other restrictive packaging laws; customer and supplier consolidation, power and supply chain influence; changes in major customer or supplier contracts or a loss of a major customer or supplier; political instability and sanctions; currency controls; and changes in foreign exchange or tax rates; 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 plus: changes in senior management; 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; litigation; strikes; 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 the U.S. government elections, budget, sequestration and debt limit; reduced cash flow; ability to achieve cost-out initiatives and synergies; interest rates affecting our debt; and successful or unsuccessful acquisitions and divestitures, including with respect to the Rexam PLC acquisition and its integration, or the associated divestiture; the effect of the acquisition or the divestiture on our business relationships, operating results and business generally.

# # #

Condensed Financial Statements (Fourth Quarter 2016)

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Unaudited Condensed Consolidated Statements of Earnings

			Three Months Ended						Year Ended
			December 31,						December 31,
($ in millions, except per share amounts)		2016			2015			2016			2015
Net sales		$	2,516		$	1,805		$	9,116		$	7,997
Costs and expenses
Cost of sales (excluding depreciation and amortization)			(2,000)			(1,434)			(7,351)			(6,460)
Depreciation and amortization			(154)			(74)			(453)			(286)
Selling, general and administrative			(164)			(111)			(512)			(450)
Business consolidation and other activities			(40)			(56)			(359)			(195)
			(2,358)			(1,675)			(8,675)			(7,391)
Earnings before interest and taxes			158			130			441			606
Interest expense			(70)			(36)			(229)			(143)
Debt refinancing and other costs			(1)			(31)			(109)			(117)
Total interest expense			(71)			(67)			(338)			(260)
Earnings before taxes			87			63			103			346
Tax (provision) benefit			(82)			1			109			(47)
Equity in results of affiliates, net of tax			9			1			15			4
Net earnings			14			65			227			303
Less net earnings attributable to noncontrolling interests			-			(10)			(3)			(22)
Net earnings attributable to Ball Corporation		$	14		$	55		$	224		$	281
Earnings per share:
Basic		$	0.08		$	0.40		$	1.42		$	2.05
Diluted		$	0.08		$	0.39		$	1.39		$	1.99
Weighted average shares outstanding (000s):
Basic			174,712			136,976			158,271			137,300
Diluted			177,770			140,525			161,442			140,984

Condensed Financial Statements (Fourth Quarter 2016)

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Unaudited Condensed Consolidated Balance Sheets

		December 31,
($ in millions)		2016			2015
Assets
Current assets
Cash and cash equivalents		$	597		$	224
Receivables, net			1,477			885
Inventories, net			1,413			898
Other current assets			152			177
Total current assets			3,639			2,184
Property, plant and equipment, net			4,379			2,686
Goodwill			5,095			2,177
Restricted cash			-			2,154
Intangible assets, net			1,934			195
Other assets, net			1,331			301
Total assets		$	16,378		$	9,697
Liabilities and Shareholders' Equity
Current liabilities
Short-term debt and current portion of long-term debt		$	222		$	77
Payables and other accrued liabilities			2,763			2,065
Total current liabilities			2,985			2,142
Long-term debt			7,310			4,974
Other long-term liabilities			2,581			1,320
Shareholders' equity			3,502			1,261
Total liabilities and shareholders' equity		$	16,378		$	9,697

Notes to the Condensed Financial Statements (Fourth Quarter 2016)

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1.  Business Segment Information

During the third quarter of 2016, Ball made certain segment realignments as a result of the Rexam acquisition and sale of a portion of Ball's existing beverage packaging businesses and select beverage can assets of Rexam (the Divestment Business) to align with how Ball now manages its businesses. Ball has retrospectively adjusted prior period amounts to conform to the current segment presentation. Ball's operations are organized and reviewed by management along its product lines and geographical areas and presented in the five reportable segments outlined below:

Beverage packaging, North and Central America: Consists of operations in the U.S., Canada and Mexico that manufacture and sell metal beverage containers.

Beverage packaging, South America: Consists of operations in Brazil, Argentina and Chile that manufacture and sell metal beverage containers.

Beverage packaging, Europe: Consists of operations in numerous countries in Europe, including Russia, that manufacture and sell metal beverage containers.

Food and aerosol packaging: Consists of operations in the U.S., Europe, Canada, Mexico, Argentina and India that manufacture and sell steel food, aerosol, paint and general line containers, as well as extruded aluminum aerosol containers and aluminum slugs.

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 non-reportable segments in Asia Pacific, Africa, the Middle East and Asia that manufacture and sell metal beverage containers; 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 which are accounted for under the equity method of accounting and, accordingly, those results are not included in segment sales or earnings.

The accounting policies of the segments are the same as those in the unaudited condensed consolidated financial statements. A discussion of the company's critical and significant accounting policies can be found in Ball's annual report.

Notes to the Condensed Financial Statements (Fourth Quarter 2016)

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1.  Business Segment Information (continued)

	Three Months Ended							Year Ended
	December 31,							December 31,
($ in millions)	2016			2015			2016			2015
Net sales
Beverage packaging, North and Central America	$	959		$	736		$	3,612		$	3,202
Beverage packaging, South America		437			184			1,014			591
Beverage packaging, Europe		449			343			1,970			1,653
Food and aerosol packaging		259			285			1,171			1,297
Aerospace		241			162			818			810
Reportable segment sales		2,345			1,710			8,585			7,553
Other		171			95			531			444
Net sales	$	2,516		$	1,805		$	9,116		$	7,997
Comparable operating earnings
Beverage packaging, North and Central America	$	114		$	86		$	469		$	402
Beverage packaging, South America		85			37			185			80
Beverage packaging, Europe		32			43			217			192
Food and aerosol packaging		24			18			109			108
Aerospace		26			21			88			82
Reportable segment comparable operating earnings		281			205			1,068			864
Other (a)		(23)			(19)			(92)			(63)
Comparable operating earnings		258			186			976			801
Reconciling items
Business consolidation and other activities		(40)			(56)			(359)			(195)
Amortization of acquired Rexam intangibles		(32)			-			(65)			-
Cost of sales associated with Rexam inventory step-up		(1)			-			(84)			-
Egyptian pound devaluation		(27)			-			(27)			-
Earnings before interest and taxes		158			130			441			606
Interest expense		(70)			(36)			(229)			(143)
Debt refinancing and other costs		(1)			(31)			(109)			(117)
Total interest expense		(71)			(67)			(338)			(260)
Earnings before taxes		87			63			103			346
Tax (provision) benefit		(82)			1			109			(47)
Equity in results of affiliates		9			1			15			4
Net earnings		14			65			227			303
Less net earnings attributable to noncontrolling interests		-			(10)			(3)			(22)
Net earnings attributable to Ball Corporation	$	14		$	55		$	224		$	281

(a)	Includes undistributed corporate expenses of $32 million and $24 million for the fourth quarter 2016 and 2015, respectively, and $110 million and $93 million for the year ended 2016 and 2015, respectively.

			Three Months Ended December 31,						Year Ended December 31,
($ in millions)			2016			2015			2016			2015
Non-comparable items - income (expense)
Beverage packaging, North and Central America
Business consolidation and other activities
Rexam transaction related costs (1)			$	-		$	-		$	(4)		$	-
Bristol facility closure costs (2)				1			1			(4)			(19)
Reidsville facility closure costs (3)				(9)			-			(9)			-
Individually insignificant items				-			1			(3)			-
Other non-comparable items
Cost of sales associated with Rexam inventory step-up (4)				-			-			(10)			-
Amortization of acquired Rexam intangibles (5)				(5)			-			(11)			-
Total beverage packaging, North and Central America				(13)			2			(41)			(19)
Beverage packaging, South America
Business consolidation and other activities
Rexam transaction related costs (1)				1			-			(14)			-
Individually insignificant items				-			(3)			(1)			(3)
Other non-comparable items
Cost of sales associated with Rexam inventory step-up (4)				-			-			(20)			-
Amortization of acquired Rexam intangibles (5)				(8)			-			(17)			-
Total beverage packaging, South America				(7)			(3)			(52)			(3)
Beverage packaging, Europe
Business consolidation and other activities
Rexam transaction related costs (1)				(4)			-			(22)			-
Asset impairment (6)				-			-			-			(5)
Individually insignificant items				(1)			(1)			(2)			(5)
Other non-comparable items
Cost of sales associated with Rexam inventory step-up (4)				(1)			-			(47)			-
Amortization of acquired Rexam intangibles (5)				(16)			-			(31)			-
Total beverage packaging, Europe				(22)			(1)			(102)			(10)
Food and aerosol packaging
Weirton facility closure costs (7)				(4)			-			(18)			-
Gain on sale of Baltimore facility (8)				9			-			9			-
Manufacturing asset rationalization (9)				(10)			-			(10)			-
Individually insignificant items				-			1			(7)			-
Total food and aerosol packaging				(5)			1			(26)			-
Aerospace individually insignificant items				-			-			-			1
Other
Business consolidation and other activities
Rexam transaction related costs (1)				(17)			(34)			(301)			(139)
Currency exchange gain (loss) for restricted cash, intercompany loans and 2020, 2023 euro senior notes (10)				-			(14)			(173)			(14)
Rexam acquisition related compensation arrangements (11)				(3)			-			(108)			-
Gain on sale of the Divestment Business (12)				(5)			-			322			-
Individually insignificant items				2			(7)			(14)			(11)
Other non-comparable items
Cost of sales associated with Rexam inventory step-up (4)				-			-			(7)			-
Amortization of acquired Rexam intangibles (5)				(3)			-			(6)			-
Egyptian pound devaluation (13)				(27)			-			(27)			-
Total other				(53)			(55)			(314)			(164)
Total business consolidation and other activities				(40)			(56)			(359)			(195)
Total other non-comparable items				(60)			-			(176)			-
Total non-comparable items				(100)			(56)			(535)			(195)

			Three Months Ended December 31,						Year Ended December 31,
($ in millions)			2016			2015			2016			2015
Tax effect on business consolidation and other activities (18)				(58)			18			241			66
Tax effect on other non-comparable items				17			-			31			-
Individually insignificant items				-			-			-			(4)
Total tax effect				(41)			18			272			62
Total non-comparable items, net of tax			$	(141)		$	(38)		$	(263)		$	(133)
Debt Refinancing and Other Costs
Interest expense on 3.5% and 4.375% senior notes (14)			$	-		$	(5)		$	(49)		$	(5)
Economic hedge - interest rate risk (1)				-			(6)			(20)			(16)
Refinancing of bridge and revolving credit facilities (15)				-			(11)			(30)			(16)
Amortization of unsecured, committed bridge facility financing fees (16)				-			(9)			(7)			(23)
Redemption of 6.75% and 5.75% senior notes, due September 2020 and May 2021, respectively, and refinance of senior credit facilities (17)				-			-			-			(57)
Individually insignificant items				(1)			-			(3)			-
Total debt refinancing and other costs				(1)			(31)			(109)			(117)
Tax effect on debt refinancing and other costs				1			11			33			41
Total debt refinancing and other costs, net of tax			$	-		$	(20)		$	(76)		$	(76)

(1)

During the fourth quarter of 2015 and the year ended 2016, the company recorded charges for professional services and other costs associated with the June 30, 2016, acquisition of Rexam.

Also during the years ended 2016 and 2015, the company recorded gains and losses associated with financial instruments purchased to reduce its currency exchange rate exposure associated with the British pound denominated cash portion of the Rexam acquisition purchase price and purchased derivative financial instruments to mitigate its exposure to interest rate changes associated with anticipated debt issuances to pay the cash portion of the Rexam acquisition purchase price.

(2)

During the third quarter of 2015, the company announced the planned closure of its beverage packaging end-making facility in Bristol, Virginia, which ceased production in the second quarter of 2016. The closure realigned end-making capacities in North America to position the company to meet customer demand. Charges composed of severance, pension and other employee benefits, as well as other individually insignificant items.

(3)

In December 2016, the company announced the planned closure of its beverage packaging facility in Reidsville, North Carolina, which is expected to cease production in the middle of 2017. The charges in the fourth quarter of 2016 were composed of employee severance, pension and other benefits, asset impairments, and facility shutdown and disposal costs.

(4)

During the third and fourth quarters of 2016, the company recorded cost of sales associated with the step-up in value of inventory acquired from Rexam.

(5)

During the third and fourth quarters of 2016, the company recorded amortization expense for customer relationships and other intangible assets identified as part of the Rexam acquisition.

(6)

During the second quarter of 2015, the company recorded charges for the write down of property held for sale.

(7)

During the first quarter of 2016, the company announced the closure of its food and aerosol packaging flat sheet production and end-making facility in Weirton, West Virginia, which is expected to cease production in early 2017. Charges were composed of employee severance and benefits, facility shutdown costs, and asset impairment and disposal costs.

(8)

In October 2016, the company sold its specialty tin manufacturing facility in Baltimore, Maryland, which resulted in a gain on sale of $9 million.

(9)

During the fourth quarter of 2016, the company rationalized certain manufacturing equipment to align production capacity with its customer requirements. The fourth quarter charge consisted of accelerated depreciation of the rationalized equipment and write-offs of costs associated with relocated assets.

(10)

The company recorded net foreign currency exchange losses from the revaluation of foreign currency denominated restricted cash, and intercompany loans related to the cash component of the Rexam acquisition purchase price, the sale of the Divestment Business and the revaluation of the euro-denominated debt issuances in December 2015.

(11)

During the last three quarters of 2016, the company incurred charges associated with long term incentive and other compensation arrangements associated with the Rexam acquisition.

(12)

The sale of the Divestment Business was completed immediately after the Rexam acquisition on June 30, 2016, for $3.42 billion, subject to customary closing adjustments. During the year ended 2016, a gain of $322 million has been recognized in connection with the sale of Ball's portion of the divested packaging businesses.

(13)

In early November 2016, Egypt's central bank elected to allow their currency, the Egyptian Pound, to float more freely in the market resulting in a significant devaluation of the Egyptian Pound from 8.9 to approximately 17 per U.S. Dollar, an approximate 90 percent devaluation. The devaluation generated currency exchange losses in the company's income statement for the non-Egyptian Pound denominated net liability position of the company's Egypt operations based on current liability balances and the 17 per U.S. Dollar exchange rate for the Egyptian Pound. Currency exchange movements since the significant devaluation are not included in non-comparable items.

(14)

During the first two quarters of 2016, the company recorded interest expense associated with the $1 billion of 4.375 percent senior notes and €400 million of 3.5 percent senior notes, both due in December 2020, and €700 million of 4.375 percent senior notes, due in December 2023.  In July 2016 Ball used the net proceeds to fund a portion of the cash component of the purchase price in connection with the acquisition of Rexam.

(15)

In March 2016, the company entered into a new $4.1 billion senior secured credit facility which includes a multicurrency revolving facility, a Term A U.S. dollar loan and a Term A euro loan, all maturing in 2021. These facilities replaced the company's existing revolving credit facility and the unsecured, committed bridge facilities that were entered into in February 2015. In July 2016 Ball used the net proceeds from the Term A U.S. dollar loan and the Term A euro loan to fund a portion of the cash component of the Rexam acquisition purchase price.

(16)

During the first quarter of 2016 and full year of 2015, the company recorded charges for the amortization of deferred financing costs associated with the £3.3 billion unsecured, committed bridge facility, entered into in February 2015, in connection with the Rexam acquisition purchase price.

(17)

In February 2015, the company entered into a new $3 billion revolving credit facility to: 1) replace its existing revolving credit facility, 2) repay its Term C loan, 3) repay the outstanding balance on the existing revolving credit facility, 4) redeem the 2020 and 2021 senior notes and 5) repay the existing private placement debt of Rexam upon closing of the acquisition of Rexam. As a result, during the first quarter of 2015, the company recorded charges for the write-off of unamortized deferred financing costs associated with the refinancing of the revolving credit facility and repayment of the Term C loan.

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.

Comparable Operating Earnings and Comparable Net Earnings - Comparable Operating Earnings is earnings before interest, taxes and business consolidation costs and other items, and Comparable Net Earnings is earnings before business consolidation costs and other non-comparable costs after-tax. We use Comparable EBITDA, Comparable Operating Earnings and Comparable Net Earnings internally to evaluate the company's operating performance.

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)		2016				2015				2016				2015
Net earnings attributable to Ball Corporation		$	14			$	55			$	224			$	281
Add: Business consolidation and other activities			40				56				359				195
Add: Amortization of acquired Rexam intangibles			32				-				65				-
Add: Cost of sales associated with Rexam inventory step-up			1				-				84				-
Add: Egyptian pound devaluation			27				-				27				-
Add: Debt refinancing and other costs			1				31				109				117
Add: Tax effect on above items			40				(29)				(305)				(103)
Net earnings attributable to Ball Corporation before above transactions (Comparable Net Earnings)		$	155			$	113			$	563			$	490
Per diluted share before above transactions		$	0.87			$	0.80			$	3.49			$	3.48

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)		2016			2015			2016			2015
Net earnings attributable to Ball Corporation		$	14		$	55		$	224		$	281
Add: Net earnings attributable to noncontrolling interests			-			10			3			22
Net earnings			14			65			227			303
Less: Equity in results of affiliates, net of tax			(9)			(1)			(15)			(4)
Add: Tax provision (benefit)			82			(1)			(109)			47
Earnings (loss) before taxes			87			63			103			346
Add: Total interest expense			71			67			338			260
Earnings before interest and taxes			158			130			441			606
Add: Business consolidation and other activities			40			56			359			195
Add: Amortization of acquired Rexam intangibles			32			-			65			-
Add: Cost of sales associated with Rexam inventory step-up			1			-			84			-
Add: Egyptian pound devaluation			27			-			27			-
EBIT before above transactions (Comparable Operating Earnings)		$	258		$	186		$	976		$	801