Ball (BALL) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements Financial statements show increased sales from continuing operations but lower total net earnings due to the 2024 aerospace business divestiture - The financial statements reflect the aerospace business as discontinued operations for all periods presented, following its divestiture on February 16, 2024, which significantly impacts year-over-year comparisons of net earnings and cash flows[16] Unaudited Condensed Consolidated Statements of Earnings Net sales and earnings from continuing operations grew, but total net earnings fell sharply without the prior year's gain from the aerospace sale Consolidated Earnings Summary (in millions, except EPS) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $3,338 | $2,959 | $6,435 | $5,833 | | Earnings from Continuing Operations | $215 | $159 | $396 | $238 | | Discontinued Operations, net of tax | $0 | $0 | $(2) | $3,607 | | Net Earnings Attributable to Ball | $212 | $158 | $391 | $3,843 | | Diluted EPS - Continuing Operations | $0.76 | $0.51 | $1.40 | $0.75 | | Total Diluted EPS | $0.76 | $0.51 | $1.39 | $12.21 | Unaudited Condensed Consolidated Balance Sheets Total assets and liabilities increased, driven by higher long-term debt, while total equity decreased due to treasury stock purchases Balance Sheet Summary (in millions) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $5,252 | $4,841 | | Total Assets | $18,608 | $17,628 | | Long-Term Debt | $6,479 | $5,312 | | Total Liabilities | $13,331 | $11,698 | | Total Equity | $5,277 | $5,930 | Unaudited Condensed Consolidated Statements of Cash Flows Operating cash use improved, while investing activities saw a significant outflow, contrasting with the prior year's large inflow from divestiture Six-Month Cash Flow Summary (in millions) | Activity | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | | Cash from Operating Activities | $(333) | $(995) | | Cash from Investing Activities | $(391) | $5,204 | | Cash from Financing Activities | $88 | $(3,496) | | Change in Cash | $(613) | $638 | Notes to the Unaudited Condensed Consolidated Financial Statements Notes detail the aerospace divestiture's impact, strategic transactions, new debt issuance, and share repurchase programs - The company completed the divestiture of its aerospace business on February 16, 2024, for $5.6 billion, resulting in a pre-tax gain of $4.61 billion, which is reported in discontinued operations[38][40] - In February 2025, the company acquired Florida Can Manufacturing for $160 million in cash to strengthen its supply network in the North and Central America segment[36] - The company entered an agreement to sell a 41% interest in its Saudi Arabian business, which is expected to close in Q3 2025 and result in deconsolidation and an estimated gain of $85 million[33] - In May 2025, Ball issued €850 million of 4.25% senior notes due in 2032 and used the proceeds to repay outstanding amounts on its revolving credit facilities[62] - The Board of Directors approved a new $4.0 billion share repurchase authorization effective through the end of 2027; in Q2 2025, the company entered into a $250 million accelerated share repurchase (ASR) agreement[76][75] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Sales and earnings growth is attributed to higher volumes and favorable pricing, with all segments performing well and strong liquidity supporting shareholder returns Results of Consolidated Operations Q2 sales increased by $379 million from higher volume and price/mix, while net earnings rose due to lower consolidation costs Drivers of Sales Increase - Q2 2025 vs Q2 2024 (in millions) | Driver | Impact | | :--- | :--- | | Higher Volume | +$224 | | Price/Mix | +$127 | | Currency Translation | +$53 | | Total Increase | +$379 | - The decrease in Selling, General and Administrative expenses for the six-month period was primarily due to $63 million in lower compensation costs, as 2024 included incremental bonuses related to the successful sale of the aerospace business[117] Results of Business Segments All beverage packaging segments reported year-over-year growth in sales and comparable operating earnings, driven by increased volumes Segment Performance - Q2 2025 vs Q2 2024 (in millions) | Segment | Net Sales 2025 | Net Sales 2024 | Comp. Op. Earnings 2025 | Comp. Op. Earnings 2024 | | :--- | :--- | :--- | :--- | :--- | | Bev. Pkg, N. & Central America | $1,613 | $1,469 | $208 | $210 | | Bev. Pkg, EMEA | $1,050 | $880 | $129 | $113 | | Bev. Pkg, South America | $477 | $422 | $51 | $37 | Financial Condition, Liquidity and Capital Resources The company maintains sufficient liquidity through cash flow and credit facilities to fund capital expenditures and shareholder returns - The company expects 2025 capital expenditures to be in the range of $600 million[142] - Share repurchases totaled $1.02 billion in the first six months of 2025, and the company plans to continue capital return with an estimated $1.3 billion in share repurchases for the full year 2025[145] - As of June 30, 2025, the company had $1.36 billion available under its long-term, multi-currency committed revolving credit facilities, which mature in June 2027[150] - The company utilizes accounts receivable factoring programs with combined limits of approximately $1.78 billion as of June 30, 2025, of which $602 million was available for sale[138] Item 3. Quantitative and Qualitative Disclosures About Market Risk The company uses derivative instruments and contractual provisions to manage commodity, interest rate, and currency risks - Ball employs risk management procedures to reduce exposure to fluctuations in commodity prices (e.g., aluminum), interest rates, and currency exchange rates[161] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[162] PART II. OTHER INFORMATION Item 1. Legal Proceedings No new material legal proceedings were reported during the quarter - There were no new material events to report under this item for the three months ended June 30, 2025, other than those already discussed in Note 21[165] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company repurchased 7.6 million shares in Q2 2025, with $3.22 billion remaining under the current authorization Share Repurchases - Q2 2025 | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 2025 | 2,077,904 | $48.62 | | May 2025 | 1,098,462 | $53.72 | | June 2025 (Open Market) | 795,102 | $54.26 | | June 2025 (ASR) | 3,626,473 | (c) | | Total Q2 | 7,597,941 | N/A | - In June 2025, the company entered into a $250 million accelerated share repurchase (ASR) arrangement, receiving an initial delivery of 3.63 million shares[172] - As of the end of Q2 2025, $3.22 billion remained available under the company's $4.0 billion share repurchase program authorized through 2027[147][168]