Highlights
- Full-year 2014 comparable earnings per diluted share were $3.88 vs. $3.28 in 2013; an increase of 18 percent
- Fourth quarter comparable earnings per diluted share were 84 cents vs. 86 cents in 2013
- Solid manufacturing performance and a lower tax rate nearly offset flat demand for global metal packaging and unfavorable earnings translation in the fourth quarter
- Strong free cash flow exceeded $620 million in 2014
Ball Corporation (NYSE:BLL) today reported full-year 2014 net earnings attributable to the corporation of $470.0 million (including after tax charges of $82.8 million, or 58 cents per diluted share for business consolidation costs, debt refinancing costs and other activities), or $3.30 per diluted share, on sales of $8.6 billion, compared to $406.8 million, or $2.73 per diluted share, on sales of $8.5 billion in 2013. Ball's full-year 2014 results were comparable net earnings of $552.8 million, or $3.88 per diluted share, compared to $489.6 million, or $3.28 per diluted share, in 2013.
"2014 was a record year for the company in terms of comparable earnings per share and free cash flow. Our global beverage can business performed very well in the year, and our aerospace business also achieved record results through solid program execution and the benefit of several launches," said John A. Hayes, chairman, president and chief executive officer. "We continue to actively manage our asset base and work with our aerospace and packaging customers to meet their future needs."
Fourth quarter 2014 net earnings attributable to Ball Corporation were $76.0 million, or 54 cents per diluted share, on sales of $2.0 billion, compared to $124.5 million, or 85 cents per diluted share, on sales of $2.0 billion, in the fourth quarter of 2013. On a comparable basis, Ball's fourth quarter results were net earnings of $118.0 million, or 84 cents per diluted share, compared to $126.8 million, or 86 cents per diluted share in the fourth quarter of 2013.
Details of comparable segment earnings for the full year and the fourth quarter can be found in the notes to the unaudited condensed consolidated financial statements that accompany this news release.
Metal Beverage Packaging, Americas & Asia
Metal beverage packaging, Americas and Asia, comparable segment operating earnings were $534.8 million on sales of $4.2 billion for full-year 2014, compared to $512.4 million on sales of $4.2 billion in 2013. For the fourth quarter, comparable earnings were $134.0 million on sales of $1.0 billion, compared to $147.3 million on sales of $1.0 billion in 2013.
Comparable segment results for the full-year were up versus 2013 due to continued strong demand for specialty packaging in the Americas and exceptional operating performance in North America. During the fourth quarter, specialty project start-up costs, the timing of certain contractual payments in Brazil and lower than expected demand in China led to weaker year-over-year quarterly results. Late in the first quarter of 2015, the company will introduce its second-generation aluminum bottle shaping technology in North America.
Metal Beverage Packaging, Europe
Metal beverage packaging, Europe, comparable segment results in 2014 were operating earnings of $222.9 million on sales of $1.9 billion, compared to $182.6 million on sales of $1.8 billion in 2013. For the fourth quarter, comparable operating earnings in 2014 were $29.9 million on sales of $398.5 million, compared to $39.4 million on sales of $427.8 million in the fourth quarter of 2013.
Full-year operating earnings were affected favorably by improved cost management and growth of specialty cans across Europe. Comparable segment earnings were lower in the fourth quarter due to higher year-over-year aluminum premiums, unfavorable currency translation and low single-digit volume declines due to lower exports outside of Europe. A third production line at our existing Oss, Netherlands, facility is scheduled to begin manufacturing specialty cans in the second quarter of 2015.
Metal Food & Household Products Packaging
Metal food and household products packaging comparable segment results for 2014 were operating earnings of $154.2 million on sales of $1.5 billion, compared to $177.4 million in 2013 on sales of $1.6 billion. For the fourth quarter of 2014, comparable segment results were operating earnings of $35.1 million on sales of $345.0 million, compared to $36.8 million on sales of $345.2 million in the same period of 2013.
Full-year 2014 results were lower due to mid-single-digit volume declines for steel food cans and previously reported service center manufacturing inefficiencies in the U.S., offset by continued strong performance in global aerosol packaging. In an effort to match can supply with future customer requirements across the segment, the company ceased operations at its Danville, Ill., steel aerosol manufacturing plant, and reduced steel food can production and the workforce at its Oakdale, Calif., facility during the quarter. The company continues to initiate investments in Europe, India and North America to meet continued strong demand for aerosol containers and other value-added products.
Aerospace and Technologies
Aerospace and technologies comparable segment results were operating earnings of $93.6 million on sales of $934.8 million in 2014, compared to $80.1 million on sales of $897.1 million in 2013. For the fourth quarter, earnings were $23.5 million on sales of $251.3 million, compared to $25.1 million on sales of $222.1 million in the fourth quarter of 2013. Contracted backlog at the close of the year was $765 million.
Full-year comparable operating earnings were up significantly due to exceptional program performance across the business and key product deliveries and launches during 2014. Fourth quarter performance was roughly in line with 2013 as the segment continues to position itself for nontraditional growth projects to leverage its existing capabilities ahead of the award of additional U.S. government contracts out for bid.
Outlook
"We achieved record free cash flow in excess of $620 million in 2014 and anticipate full-year 2015 free cash flow to be in roughly the same range," said Scott C. Morrison, senior vice president and chief financial officer.
"Given the strength of our 2014 financial performance, we've created a challenging earnings comparison for 2015, especially in the first half when we are ramping up multiple global capital projects and awaiting the award of additional aerospace contracts," Hayes said. "We expect the second half to be stronger than the first half and it is unlikely we will attain our long-term 10-15 percent earnings per diluted share growth goal in 2015. We will continue to generate a significant amount of free cash flow, execute our capital allocation strategy to foster future EVA dollar growth and return value for our shareholders in 2015 and beyond."
