Financial Performance - Net sales for the three months ended June 30, 2019, were $3,017 million, a decrease from $3,101 million in the same period of 2018, primarily due to the divestiture of the U.S. steel food and aerosol business [155]. - Net earnings attributable to Ball Corporation for the three months ended June 30, 2019, increased to $197 million, compared to $119 million in the same period of 2018, representing a net earnings margin of 7% [155]. - Cost of sales for the three months ended June 30, 2019, was $2,428 million, accounting for 80% of consolidated net sales, consistent with the same percentage in 2018 [158]. - Selling, general and administrative expenses for the three months ended June 30, 2019, were $111 million, representing 4% of consolidated net sales, down from $127 million in the same period of 2018 [159]. - The effective income tax rate for the three months ended June 30, 2019, was 13.7%, a significant decrease from 27.7% in the same period of 2018 [163]. - Comparable operating earnings for Q2 2019 were $65 million, down from $66 million in Q2 2018, reflecting a decrease of approximately 1.5% [171]. - Net sales for Q2 2019 were $377 million, slightly lower than $379 million in Q2 2018, indicating a decrease of about 0.5% [171]. - Comparable net earnings for the six months ended June 30, 2019, were $386 million, slightly down from $387 million in the same period of 2018 [189]. - Diluted earnings per share, as reported, increased to $0.58 for the three months ended June 30, 2019, from $0.34 in the same period of 2018, marking a 70% increase [189]. Segment Performance - Beverage packaging segment sales for the three months ended June 30, 2019, were $1,286 million, an increase of $45 million compared to $1,241 million in the same period of 2018, driven by higher volumes [168]. - Comparable operating earnings for the beverage packaging segment for the three months ended June 30, 2019, were $141 million, down from $157 million in the same period of 2018, with a margin of 11% [168]. - The aerospace segment reported a sales increase of $89 million for Q2 2019 compared to Q2 2018, representing a growth of approximately 30.7% [180]. - Total segment earnings for the aerospace segment were $38 million in Q2 2019, up from $24 million in Q2 2018, marking a growth of 58.3% [183]. - Beverage packaging sales in South America decreased by $2 million in Q2 2019 compared to Q2 2018, while comparable operating earnings fell by $1 million [174]. - The beverage packaging segment in Europe saw a sales increase of $12 million in Q2 2019, primarily due to higher sales volumes [177]. - Comparable operating earnings for the beverage packaging segment in Europe increased by $12 million in Q2 2019, reflecting improved operational efficiencies [178]. Strategic Initiatives and Investments - The company is expanding its geographic reach with new investments in beverage manufacturing facilities in Spain, Mexico, Myanmar, and Panama, as well as an extruded aluminum aerosol manufacturing facility in India [153]. - Ball Corporation's strategic initiatives include maximizing value in existing businesses and expanding into new products and capabilities, such as lightweight aluminum aerosol packaging [153]. - The company is constructing a new beverage can manufacturing facility in Paraguay, expected to begin production in the second half of 2019 [173]. - The beverage packaging facility in San Martino, Italy, was closed in December 2018 to optimize operations [176]. Cash Flow and Capital Expenditures - Cash flows provided by operating activities were $253 million for the six months ended June 30, 2019, down from $434 million in the same period of 2018, primarily due to higher working capital outflows [191]. - The company expects capital expenditures for property, plant, and equipment to be approximately $600 million for 2019, with $397 million contractually committed as of June 30, 2019 [194]. - Share repurchases totaled $388 million during the six months ended June 30, 2019, compared to $175 million during the same period in 2018, indicating a significant increase in share buyback activity [197]. Debt and Pension Contributions - As of June 30, 2019, the company had outstanding interest-bearing debt of $7.3 billion, an increase from $6.7 billion at the end of 2018 [199]. - Contributions to defined benefit pension plans were $73 million in the first six months of 2019, significantly higher than $14 million in the same period of 2018, with an expected total of $92 million for the full year [193]. - The company refinanced its credit facilities in March 2019, providing up to $1.75 billion in revolving credit, with approximately $1.27 billion available as of June 30, 2019 [200]. - The company had approximately $749 million of cash held outside the U.S. as of June 30, 2019, with no material restrictions on repatriation for U.S. operations [195].

Financial Data and Key Metrics Changes - Comparable diluted earnings per share for Q2 2019 was $0.64, up from $0.58 in Q2 2018, reflecting strong global beverage can shipments and solid aerospace contract performance [22][24] - Net debt at the end of the quarter was $6.5 billion, with expectations to remain around $6 billion by year-end 2019 [23][24] - The company anticipates free cash flow for 2019 to be in the range of $1 billion, despite elevated capital expenditures [24][86] Business Line Data and Key Metrics Changes - Global beverage volumes increased approximately 5%, with specialty can growth at 13% [5][8] - Aerospace revenues were up over 30%, with operating earnings increasing by 55% [10][27] - North American segment volumes grew by 4%, while South America saw a 12% increase, and Europe experienced a 7% growth [9][18][20] Market Data and Key Metrics Changes - North and Central America beverage can market grew approximately 4%, while South America and Europe grew by 12% and 7% respectively [9][18][20] - EMEA market faced slight declines due to macroeconomic issues [9][21] - Specialty cans now represent over 42% of the global mix [8] Company Strategy and Development Direction - The company plans to invest in debottlenecking existing lines and building new capacity to meet customer demand [6][12] - Focus on sustainability and innovation in packaging solutions, including the launch of infinitely recyclable aluminum cups [11][27] - Long-term strategy includes increasing EVA dollars and expanding aerospace operations while returning value to shareholders [12][29] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth, expecting headwinds to mitigate in the second half of the year [12][24] - The company is confident in achieving a 10% to 15% growth in diluted earnings per share over the next few years, driven by strong volume growth and improved mix [29][78] - Management noted that sustainability trends are driving demand for aluminum packaging, with expectations for continued growth in beverage cans [70][82] Other Important Information - The company received antitrust approval for the sale of its China beverage can business, with the transaction expected to close later in the year [9] - Significant investments in talent acquisition, with plans to add at least 600 new aerospace employees by year-end [27] Q&A Session Summary Question: Volume assumptions for EPS growth - Management indicated that historical global unit volume growth is around 2%, but they expect it to be double that in the short term, with a long-term expectation of 4% [30][32] Question: Headwinds in operational inefficiencies - Management is hopeful that operational headwinds, particularly in North America, will dissipate in Q3, with plans in place to address metal scrap issues [33][34] Question: Specialty can volume growth by region - Specialty can volumes in North America grew in the upper single digits, while South America saw low 20% growth [36][37] Question: Concerns about industry capacity - Management believes that market growth will be sufficient to absorb new capacity, citing a growing North American can market [47][48] Question: Capital allocation and share buybacks - Management plans to continue investing in growth while also returning capital to shareholders through stock buybacks [50][53] Question: Impact of weather on volumes - No significant weather-related issues were reported in North America, although Europe experienced some challenges [88][89]

Table of Contents ClassTrading Symbol Name of Exchange Outstanding at April 30, 2019 Common Stock, without par value BLL NYSE 334,744,071 shares UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 31, 2019 or ◻ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 001-07349 BALL CORPORATION State o ...

Ball Corporation (BLL) Q1 2019 Results Earnings Conference Call May 2, 2019 11:00 AM ET Company Participants John Hayes - Chairman, President, Chief Executive Officer Dan Fisher - Senior Vice President, Chief Operating Officer of Global Beverage Packaging Scott Morrison - Senior Vice President, Chief Financial Officer Conference Call Participants Anthony Pettinari - Citi Edlain Rodriguez - UBS Matt Krueger - Baird Tyler Langton - JPMorgan George Staphos - Merrill Lynch Neel Kumar - Morgan Stanley Scott Gaff ...

PART I [Business](index=3&type=section&id=Item%201.%20Business) Ball Corporation is a global leader in metal packaging and aerospace systems, with packaging accounting for 90% of its $12 billion net sales in 2018, driven by its "Drive for 10" strategy and organized into four key segments 2018 Net Sales Breakdown | Business Segment | Percentage of Net Sales | | :--- | :--- | | Packaging | 90% | | Aerospace | 10% | - The company's core business strategy is defined by its "Drive for 10" vision, which encompasses five key levers: maximizing value in existing businesses, expanding into new products, aligning with the right customers and markets, broadening geographic reach, and leveraging technological expertise[11](index=11&type=chunk) - Ball Corporation's financial strategy aims for long-term comparable diluted earnings per share growth of **10% to 15% per annum** and maximizing free cash flow generation[11](index=11&type=chunk) - The company operates through four reportable segments: (1) beverage packaging, North and Central America; (2) beverage packaging, South America; (3) beverage packaging, Europe; and (4) aerospace[17](index=17&type=chunk) [Beverage Packaging, North and Central America Segment](index=6&type=section&id=Beverage%20Packaging%2C%20North%20and%20Central%20America%2C%20Segment) This segment is Ball's largest, contributing 40% of consolidated net sales in 2018 and producing approximately 46 billion recyclable aluminum beverage containers - This is Ball's largest segment, accounting for **40% of consolidated net sales** in 2018[19](index=19&type=chunk) - The segment produced approximately **46 billion recyclable aluminum beverage containers** in 2018, representing about **44% of the aggregate production** in the U.S., Canada, and Mexico[22](index=22&type=chunk) - A new facility in Goodyear, Arizona, began production in Q2 2018 to meet growing demand for specialty cans, while facilities in Birmingham, AL, Chatsworth, CA, and Longview, TX, ceased production in 2018 as part of network optimization[21](index=21&type=chunk)[25](index=25&type=chunk) [Beverage Packaging, South America Segment](index=6&type=section&id=Beverage%20Packaging%2C%20South%20America%2C%20Segment) This segment accounted for 15% of consolidated net sales in 2018, is the largest producer in the region, and is expanding capacity with a new facility in Paraguay - This segment accounted for **15% of consolidated net sales** in 2018 and is the largest producer in the region with an estimated **53% of shipments**[26](index=26&type=chunk) - The company is expanding capacity in South America by constructing a new facility in Paraguay (expected to begin production in H2 2019) and adding capacity in Argentina and Chile, while ceasing operations at its Cuiabá, Brazil facility in July 2018[28](index=28&type=chunk) [Beverage Packaging, Europe Segment](index=8&type=section&id=Beverage%20Packaging%2C%20Europe%2C%20Segment) The Europe segment contributed 23% of consolidated net sales in 2018, is the largest producer in the region, and has expanded with a new facility near Madrid, Spain - The Europe segment contributed **23% of consolidated net sales** in 2018 and is the largest producer in the region with an estimated **43% of shipments**[30](index=30&type=chunk) - The company constructed a new two-line facility near Madrid, Spain, to support growth, while ceasing production at facilities in Recklinghausen, Germany (Q3 2017) and San Martino, Italy (December 2018)[33](index=33&type=chunk) [Aerospace Segment](index=8&type=section&id=Aerospace%20Segment) The Aerospace segment accounted for 10% of consolidated net sales in 2018, with 99% of sales from U.S. government contracts, and reported a $2.2 billion contracted backlog - The Aerospace segment accounted for **10% of consolidated net sales** in 2018, with **99% of its sales** derived from contracts with the U.S. government and its agencies[34](index=34&type=chunk) Aerospace Segment Contracted Backlog | Year End | Contracted Backlog (in billions) | | :--- | :--- | | Dec 31, 2018 | $2.2 | | Dec 31, 2017 | $1.75 | [Risk Factors](index=13&type=section&id=Item%201A.%20Risk%20Factors) The company identifies several key risks, including potential difficulties in realizing the full benefits of the Rexam acquisition, a significant debt level of $6.7 billion, and dependence on a limited number of major customers - The company may not realize all anticipated benefits from the Rexam acquisition due to the complexity of integrating the two businesses, which could lead to unanticipated problems, expenses, and diversion of management's attention[48](index=48&type=chunk)[49](index=49&type=chunk) - As of December 31, 2018, the company had **$6.7 billion of interest-bearing debt**, which could increase vulnerability to adverse economic conditions and limit cash flow for operations and investments[52](index=52&type=chunk) - The company faces significant competition from substitute products, particularly PET plastic bottles in the U.S., Europe, and China, which could result in lower profits[60](index=60&type=chunk) - The aerospace segment's primary customers are U.S. government agencies, making it subject to risks from funding cuts, delays, budget changes, and government shutdowns[57](index=57&type=chunk)[75](index=75&type=chunk) - There is a risk of noncash goodwill impairment for the beverage packaging, Asia Pacific, and beverage packaging, AMEA, reporting units, with goodwill balances of **$78 million** and **$100 million**, respectively, at year-end 2018[86](index=86&type=chunk) [Properties](index=27&type=section&id=Item%202.%20Properties) The company's corporate headquarters and aerospace management offices are located in Broomfield, Colorado, with detailed lists of global manufacturing facilities provided - Ball's corporate headquarters and aerospace segment management offices are located in Broomfield, Colorado, with the aerospace segment occupying approximately **1.8 million square feet** of space[107](index=107&type=chunk) - The report lists the approximate floor space for manufacturing locations across all significant packaging operations, including North and Central America, South America, Europe, AMEA, Asia Pacific, and Aerosol Packaging[109](index=109&type=chunk)[111](index=111&type=chunk)[112](index=112&type=chunk) [Legal Proceedings](index=30&type=section&id=Item%203.%20Legal%20Proceedings) This section refers to Note 23 of the consolidated financial statements for detailed information regarding the company's legal proceedings - Details of the company's legal proceedings are included in Note 23 to the consolidated financial statements within Item 8 of this annual report[113](index=113&type=chunk) PART II [Market for the Registrant's Common Stock and Related Stockholder Matters](index=31&type=section&id=Item%205.%20Market%20for%20the%20Registrant%27s%20Common%20Stock%20and%20Related%20Stockholder%20Matters) Ball Corporation's common stock (BLL) is traded on the NYSE, with over 6 million shares repurchased in Q4 2018, and its 5-year total shareholder return significantly outperformed benchmarks Common Stock Repurchases (Q4 2018) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | Oct 1 - Dec 31, 2018 | 6,029,927 | $47.07 | 5-Year Cumulative Total Shareholder Return (2013-2018) | Company/Index | 12/31/2013 | 12/31/2018 | Cumulative Return | | :--- | :--- | :--- | :--- | | Ball Corporation (BLL) | $100.00 | $185.62 | 85.6% | | S&P 500 | $100.00 | $135.63 | 35.6% | | DJ US Containers & Packaging | $100.00 | $115.42 | 15.4% | [Selected Financial Data](index=33&type=section&id=Item%206.%20Selected%20Financial%20Data) This section provides a five-year overview of Ball Corporation's key financial metrics, showing net sales growth from $8.6 billion in 2014 to $11.6 billion in 2018 and a 2018 free cash flow of $750 million Five-Year Selected Financial Data (in millions, except per share amounts) | Metric | 2018 | 2017 | 2016 | 2015 | 2014 | | :--- | :--- | :--- | :--- | :--- | :--- | | Net sales | $11,635 | $10,983 | $9,061 | $7,997 | $8,570 | | Net earnings (GAAP) | $454 | $374 | $263 | $281 | $470 | | Diluted EPS (GAAP) | $1.29 | $1.05 | $0.81 | $1.00 | $1.65 | | Comparable net earnings (Non-GAAP) | $775 | $728 | $563 | $490 | $553 | | Diluted EPS (Comparable) | $2.20 | $2.04 | $1.74 | $1.74 | $1.94 | | Total interest bearing debt | $6,729 | $6,971 | $7,532 | $5,051 | $3,133 | | Free cash flow (Non-GAAP) | $750 | $922 | $(413) | $509 | $669 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2018, consolidated sales increased by $652 million to $11.6 billion, with net earnings rising by $80 million to $454 million, supported by strong liquidity and $750 million in free cash flow Consolidated Financial Highlights (2017 vs 2018) | Metric (in millions) | 2018 | 2017 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $11,635 | $10,983 | +$652 | | Net Earnings | $454 | $374 | +$80 | 2018 Segment Performance vs. 2017 (in millions) | Segment | 2018 Sales | Change vs. 2017 | 2018 Comparable Operating Earnings | Change vs. 2017 | | :--- | :--- | :--- | :--- | :--- | | Bev. Packaging, N. & C. America | $4,626 | +$448 | $551 | +$18 | | Bev. Packaging, South America | $1,701 | +$9 | $313 | -$20 | | Bev. Packaging, Europe | $2,619 | +$259 | $282 | +$49 | | Aerospace | $1,196 | +$205 | $113 | +$15 | Cash Flow and Liquidity Summary (in millions) | Metric | 2018 | 2017 | | :--- | :--- | :--- | | Cash from Operating Activities | $1,566 | $1,478 | | Capital Expenditures | $(816) | $(556) | | Free Cash Flow | $750 | $922 | - The company projects cash flows from operating activities for 2019 to be in excess of **$1.6 billion**, with capital expenditures of approximately **$600 million**, resulting in expected free cash flow exceeding **$1 billion**[197](index=197&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=54&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company manages market risks related to commodity prices, interest rates, and currency exchange rates, with sensitivity analyses showing potential after-tax earnings reductions from adverse changes - A hypothetical **10% adverse change in aluminum prices** would result in an estimated **$8 million after-tax reduction** in net earnings over one year[208](index=208&type=chunk) - A **100-basis point increase in interest rates** would result in an estimated **$2 million after-tax reduction** in net earnings over one year[210](index=210&type=chunk) - A hypothetical **10% strengthening of the U.S. dollar** against other currencies would result in an estimated **$15 million after-tax reduction** in net earnings over one year[212](index=212&type=chunk) [Financial Statements and Supplementary Data](index=57&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section contains the company's audited consolidated financial statements for 2016-2018, including statements of earnings, balance sheets, and cash flows, along with detailed notes on accounting policies and significant transactions Consolidated Statement of Earnings Highlights (in millions) | Line Item | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | | Net Sales | $11,635 | $10,983 | $9,061 | | Earnings Before Interest and Taxes | $935 | $802 | $463 | | Net Earnings Attributable to Ball | $454 | $374 | $263 | Consolidated Balance Sheet Highlights (in millions) | Line Item | Dec 31, 2018 | Dec 31, 2017 | | :--- | :--- | :--- | | Total Current Assets | $3,940 | $3,758 | | Total Assets | $16,554 | $17,169 | | Total Current Liabilities | $4,095 | $4,107 | | Long-Term Debt | $6,510 | $6,518 | | Total Liabilities | $12,992 | $13,123 | | Total Shareholders' Equity | $3,562 | $4,046 | - In 2018, the company adopted new accounting standards for Revenue from Contracts with Customers and the Statement of Cash Flows, applying the modified retrospective and retrospective methods, respectively[215](index=215&type=chunk)[261](index=261&type=chunk)[270](index=270&type=chunk) - On July 31, 2018, Ball sold its U.S. steel food and steel aerosol packaging business, receiving approximately **$600 million in cash** and a **49% ownership interest** in the newly formed joint venture, Ball Metalpack, recording a **$41 million loss** on the sale[300](index=300&type=chunk)[301](index=301&type=chunk) [Controls and Procedures](index=153&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures and internal control over financial reporting were effective as of December 31, 2018 - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of December 31, 2018[541](index=541&type=chunk) - Management concluded that internal control over financial reporting was effective as of December 31, 2018, based on the COSO framework (2013)[542](index=542&type=chunk) PART III [Directors, Executive Officers and Corporate Governance of the Registrant](index=153&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance%20of%20the%20Registrant) This section lists the executive officers as of February 22, 2019, including their ages, positions, and tenure, with further information on directors and corporate governance incorporated by reference - The report lists the names, ages, and positions of eight executive officers, including **John A. Hayes** (Chairman, President and CEO) and **Scott C. Morrison** (Senior Vice President and CFO)[544](index=544&type=chunk)[547](index=547&type=chunk)[548](index=548&type=chunk) [Executive Compensation](index=154&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the company's proxy statement to be filed within 120 days after the fiscal year-end - Detailed information on executive compensation is incorporated by reference from the company's proxy statement[552](index=552&type=chunk) [Security Ownership of Certain Beneficial Owners and Management](index=155&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management) Information regarding security ownership is incorporated by reference from the company's proxy statement, with a table summarizing over 22 million securities available for future issuance under equity compensation plans Equity Compensation Plan Information | Plan Category | Securities to be Issued Upon Exercise | Weighted-Average Exercise Price | Securities Remaining for Future Issuance | | :--- | :--- | :--- | :--- | | Equity compensation plans approved by security holders | 22,371,159 | $27.45 | 22,371,159 | PART IV [Exhibits, Financial Statement Schedules](index=156&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists the financial statements, schedules, and exhibits filed as part of the Form 10-K report, including consolidated financial statements and a comprehensive list of corporate and debt documents - The financial statements included in Part II, Item 8 are listed, along with a statement that financial statement schedules have been omitted as they are not applicable or the required information is included elsewhere[558](index=558&type=chunk)[559](index=559&type=chunk) - A detailed list of exhibits filed with the report is provided, including corporate governance documents, debt agreements, management compensation plans, and required SEC certifications[560](index=560&type=chunk)[561](index=561&type=chunk)[562](index=562&type=chunk)[563](index=563&type=chunk)

Ball Corporation (BLL) Q4 2018 Earnings Conference Call January 31, 2019 11:00 AM ET Company Participants John Hayes - Chairman, President and CEO Daniel Fisher - SVP and COO, Global Beverage Packaging Scott Morrison - SVP and CFO Conference Call Participants Anthony Pettinari - Citigroup Global Markets, Inc. (Broker) George Staphos - Bank of America Merrill Lynch Scott Gaffner - Barclays Capital, Inc. Matthew Krueger - Robert W. Baird & Co. Neel Kumar - Morgan Stanley Tyler Langton - JPMorgan Securities LL ...