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Ball (BALL) - 2020 Q2 - Quarterly Report
Ball Ball (US:BALL)2020-08-07 18:47

Financial Performance - Ball Corporation reported net sales of $2,801 million for the three months ended June 30, 2020, a decrease from $3,017 million in the same period of 2019, representing a decline of approximately 7.2%[127] - Net earnings attributable to Ball Corporation for the three months ended June 30, 2020, were $94 million, down from $197 million in the same period of 2019, reflecting a decrease of about 52.3%[127] - Cash flows from operating activities for the six months ended June 30, 2020, were $(232) million, a decrease from $253 million in the same period of 2019[153] - The company recorded net sales of $3,508 million for the six months ended June 30, 2020, compared to $6,540 million for the year ended December 31, 2019[173] - Gross profit for the six months ended June 30, 2020, was $446 million, down from $789 million for the year ended December 31, 2019[173] Cost and Expenses - Cost of sales for the three months ended June 30, 2020, was $2,230 million, accounting for 80% of consolidated net sales, compared to 80% in the same period of 2019[124] - Selling, general and administrative expenses were $111 million for the three months ended June 30, 2020, consistent with the same period in 2019, representing 4% of consolidated net sales[126] - Business consolidation costs were $112 million for the three months ended June 30, 2020, compared to $14 million in the same period of 2019, representing 4% of consolidated net sales[128] - Total interest expense for the three months ended June 30, 2020, was $67 million, down from $81 million in the same period of 2019, with interest expense as a percentage of average monthly borrowings at 3%[129] Tax and Earnings - The effective tax rate for the three months ended June 30, 2020, was 20.7%, an increase from 13.7% in the same period of 2019, primarily due to the revaluation of deferred tax assets[130] - Comparable diluted earnings per share for the six months ended June 30, 2020, were $1.26 compared to $1.13 in the same period in 2019[151] - Comparable operating earnings for the three months ended June 30, 2020, were $48 million higher compared to the same period in 2019, and for the six months, they were $76 million higher[136] Segment Performance - Segment sales for the three months ended June 30, 2020, were $19 million lower compared to the same period in 2019, while for the six months, they were $31 million higher[135] - Net sales for the Beverage Packaging segment in South America for the three months ended June 30, 2020, were $48 million lower compared to the same period in 2019[143] - Comparable operating earnings for the Aerospace segment for the three months ended June 30, 2020, were $30 million lower compared to the same period in 2019[144] - Total segment earnings for the Beverage Packaging segment in EMEA for the three months ended June 30, 2020, were $45 million compared to $65 million in the same period in 2019[137] - Comparable operating earnings as a percentage of segment net sales for the Beverage Packaging segment in South America were 14% for the three months ended June 30, 2020, compared to 17% in the same period in 2019[142] Investments and Capital Expenditures - The company expects capital expenditures for property, plant, and equipment to exceed $900 million for 2020, with approximately $700 million contractually committed as of June 30, 2020[160] - Cash outflows from investing activities increased by $177 million, from $264 million in 2019 to $441 million in 2020, primarily due to a $172 million increase in capital expenditures for large growth projects[155] Cash Flow and Debt - Cash flows from financing activities decreased by $495 million, from inflows of $107 million in 2019 to outflows of $388 million in 2020, mainly due to the redemption of €400 million and $1 billion senior notes[156] - Total interest-bearing debt was $7.7 billion as of June 30, 2020, compared to $7.8 billion at December 31, 2019[163] - As of June 30, 2020, approximately $436 million of cash was held outside the U.S., with no material restrictions on repatriation[161] COVID-19 Impact - The company is unable to reasonably estimate the full impact of the COVID-19 outbreak on its financial results[185] - The company has implemented alternative work arrangements, including work from home, to minimize risks associated with COVID-19[187] - The company may face increased competition within the beverage packaging and aerospace industries due to COVID-19[185] - The company could lose key customers or experience a reduction in demand for its products and services[185] - The company may be subject to adverse fluctuations in currency exchange rates impacting its operations[185] - The company has taken actions such as delaying growth capital spending and modifying payment terms with customers to mitigate potential supply disruptions[187] - The company may face prolonged work stoppages at its facilities due to the pandemic[185] - The company’s access to capital markets may be restricted, adversely affecting its short-term liquidity[185] - The company may be impacted by deterioration in the global credit, financial, and economic environment[185] - The company has the potential for goodwill and other long-lived assets to become impaired due to the pandemic[185]