OREANDA-NEWS. Ball Corporation (NYSE: BLL) today reported second quarter 2016 net earnings attributable to the corporation of $369 million, or $2.54 per diluted share (including the net effect of after-tax income of $217 million, or $1.49 per diluted share for business consolidation, debt refinancing and other costs and the estimated gain on the sale of divested assets) on sales of $2.0 billion, compared to $160 million of net earnings attributable to the corporation, or $1.13 per diluted share (including after-tax income of $35 million, or 24 cents per diluted share for debt refinancing costs, economic hedging gains, business consolidation and other costs), on sales of $2.2 billion in the second quarter of 2015. Results for the first six months of 2016 were net earnings attributable to the corporation of $242 million, or $1.67 per diluted share, on sales of $3.8 billion compared to $181 million, or $1.28 per diluted share, on sales of $4.1 billion for the first six months of 2015.

Comparable earnings per diluted share for the second quarter and year-to-date 2016 were $1.05 and $1.63, respectively, versus second quarter and year-to-date 2015 comparable earnings per diluted share of 89 cents and $1.57, respectively.

Details of comparable segment earnings, business consolidation activities, Rexam acquisition-related hedging, purchase accounting and costs, as well as divestment-related accounting, can be found in the notes to the unaudited condensed consolidated financial statements that accompany this news release. The company's unaudited condensed statements of cash flows will be provided in the company's Form 10-Q expected to be filed by August 12, 2016.

"Our strong second quarter results, the completion of legacy metal packaging growth projects, a robust aerospace backlog and the recent Rexam acquisition provide a very solid foundation for a multi-year, value-compounding growth period for our company and our shareholders," said John A. Hayes, chairman, president and chief executive officer. "One month into the acquisition integration, business-related services and manufacturing operations are running smoothly. The past 17 months of planning have evolved into action, and the synergy execution process is well underway in all value-capture work streams."

Metal Beverage Packaging, Americas & Asia

Metal beverage packaging, Americas and Asia, comparable segment earnings in the second quarter 2016 were $137 million on sales of $1.1 billion, compared to $126 million on sales of $1.1 billion in the second quarter 2015. For the first six months, comparable segment operating earnings were $239 million on sales of $2.0 billion, compared to $252 million on sales of $2.2 billion during the same period in 2015.       

In the Americas, second quarter volumes improved with continued strength in specialty can demand in North America and Brazil. Successful cost-out initiatives in China were unable to fully offset the second quarter impact of high single-digit volume declines and lower pricing in the region. Year-to-date Americas and Asia revenues were impacted by the pass through of lower year-over-year aluminum prices and price compression in China.

In June, the company started up the second beverage can line at its Monterrey, Mexico, facility, as well as production at its new facility in Myanmar. These projects represent the remaining legacy capital projects that Ball began prior to the initiation of the company's offer for Rexam.

Metal Beverage Packaging, Europe

Metal beverage packaging, Europe, comparable segment earnings in the second quarter 2016 were $74 million on sales of $479 million, compared to $59 million on sales of $481 million in the second quarter 2015.  For the first six months, comparable segment operating earnings were $113 million on sales of $835 million, compared to $88 million on sales of $860 million during the same period in 2015.

Comparable segment earnings were higher in the second quarter and year-to-date due to lower year-over-year aluminum premiums and solid demand for specialty containers.

Food and Aerosol Packaging

Food and aerosol packaging comparable segment earnings in the second quarter 2016 were $33 million on sales of $298 million, compared to $29 million on sales of $332 million in the second quarter 2015. For the first six months, comparable segment operating earnings were $53 million on sales of $583 million, compared to $59 million on sales of $640 million during the same period in 2015.

During the second quarter, strong global demand for aerosol containers outpaced single-digit declines for food cans in North America.

Operational performance across the segment was strong in the quarter and the previously announced actions to reposition steel cutting and coating equipment across Ball's existing U.S. manufacturing locations is on schedule.

Aerospace

Aerospace comparable quarterly segment earnings in the second quarter 2016 were $19 million on sales of $193 million, compared to $20 million on sales of $230 million in the second quarter 2015. For the first six months, comparable segment operating earnings were $37 million on sales of $373 million, compared to $39 million on sales of $445 million during the same period in 2015.      

Contracted backlog grew to more than $1 billion at the end of second quarter, with more of the new business awards being oriented to cost-plus contracts. A diverse portfolio of new contracts will leverage Ball's existing technologies and value-added approach to deliver solutions to our customers. The aerospace team is staffing up to further support this backlog and the added labor base will bolster revenue growth in the second half of the year.

Outlook

"While we are still in the midst of our 90-day business review, our early estimate is for full-year 2017 free cash flow to be in the range of $750 million to $850 million, excluding one-time items related to the Rexam acquisition. Though not precluded from repurchasing our shares in the near term, our current plan is to reduce our leverage as quickly as possible, continue our dividend and then return value to shareholders via notable share repurchases as soon as our targeted capital structure is in the range of 3.0 to 3.5 times net debt to comparable EBITDA," said Scott C. Morrison, senior vice president and chief financial officer.

"This acquisition is truly a step change for our company, and we take this responsibility seriously, both operationally and strategically. We have hit the ground running with respect to our synergy realization around the Rexam transaction. The second half of 2016 will be a time to implement many of these efforts, with the benefits beginning to be realized in 2017," Hayes said. "We look forward to the many opportunities that lie ahead to grow EVA, earnings and cash flow. Given the strength of our underlying businesses and the value potential of the Rexam acquisition, we see a path to doubling Ball's long-term goal of 10 to 15 percent comparable diluted earnings per share growth over each of the next three years." 

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 18,700 people worldwide and reported pro forma 2015 sales of $11.0 billion.

Condensed Financial Statements (Second Quarter 2016)

Unaudited Condensed Consolidated Statements of Earnings
             
     

Three Months Ended

    

Six Months Ended
     

June 30,

    

June 30,

($ in millions, except per share amounts)

  

2016

  

2015

  

2016

  

2015
                         

Net sales

  

$

2,030

  

$

2,172

  

$

3,785

  

$

4,095
                         

Costs and expenses

                        

Cost of sales (excluding depreciation and amortization)

    

(1,596)

    

(1,775)

    

(3,012)

    

(3,336)

Depreciation and amortization

    

(78)

    

(71)

    

(153)

    

(139)

Selling, general and administrative

    

(105)

    

(118)

    

(213)

    

(234)

Business consolidation and other activities

    

16

    

66

    

(251)

    

14
     

(1,763)

    

(1,898)

    

(3,629)

    

(3,695)
                         

Earnings before interest and taxes

    

267

    

274

    

156

    

400
                         

Interest expense

    

(41)

    

(31)

    

(79)

    

(70)

Debt refinancing and other costs

    

(46)

    

(5)

    

(106)

    

(65)

Total interest expense

    

(87)

    

(36)

    

(185)

    

(135)

Earnings (loss) before taxes

    

180

    

238

    

(29)

    

265

Tax (provision) benefit

    

188

    

(79)

    

271

    

(79)

Equity in results of affiliates, net of tax

    

1

    

1

    

-

    

2

Net earnings

    

369

    

160

    

242

    

188
                         

Less net earnings attributable to noncontrolling interests

    

-

    

-

    

-

    

(7)
                         

Net earnings attributable to Ball Corporation

  

$

369

  

$

160

  

$

242

  

$

181
                         

Earnings per share:

                        

Basic

  

$

2.60

  

$

1.16

  

$

1.71

  

$

1.32

Diluted

  

$

2.54

  

$

1.13

  

$

1.67

  

$

1.28
                         

Weighted average shares outstanding (000s):

                        

Basic

    

142,038

    

137,801

    

141,916

    

137,446

Diluted

    

145,227

    

141,540

    

145,165

    

141,302

Condensed Financial Statements (Second Quarter 2016)

Unaudited Condensed Consolidated Balance Sheets
       
   

June 30,

  

($ in millions)

  

2016

  

2015

  
               

Assets

              

Current assets

              

Cash and cash equivalents

  

$

6,399

  

$

227

  

Receivables, net

    

1,899

    

1,192

  

Inventories, net

    

1,483

    

929

  

Other current assets

    

238

    

157

  

Total current assets

    

10,019

    

2,505

  

Property, plant and equipment, net

    

4,396

    

2,483

  

Goodwill

    

4,902

    

2,209

  

Restricted cash

    

2,124

    

-

  

Other assets, net

    

3,537

    

656

  
               

Total assets

  

$

24,978

  

$

7,853

  
               

Liabilities and Shareholders' Equity

              

Current liabilities

              

Short-term debt and current portion of long-term debt

  

$

3,125

  

$

278

  

Cash purchase price payable to Rexam's shareholders

    

3,825

    

-

  

Payables and other accrued liabilities

    

3,305

    

1,914

  

Total current liabilities

    

10,255

    

2,192

  

Long-term debt

    

8,234

    

2,982

  

Other long-term liabilities

    

2,624

    

1,336

  

Shareholders' equity

    

3,865

    

1,343

  
               

Total liabilities and shareholders' equity

  

$

24,978

  

$

7,853

  

Notes to the Condensed Financial Statements (Second Quarter 2016)
 

1.     Business Segment Information
         
 

Three Months Ended

  

Six Months Ended

  
 

June 30,

  

June 30,

  

($ in millions)

2016

  

2015

  

2016

  

2015

  
                         

Net sales -

                        

Metal beverage packaging, Americas & Asia

$

1,053

  

$

1,132

  

$

1,990

  

$

2,155

  

Metal beverage packaging, Europe

  

479

    

481

    

835

    

860

  

Food and aerosol packaging

  

298

    

332

    

583

    

640

  

Aerospace

  

193

    

230

    

373

    

445

  

Corporate and intercompany eliminations

  

7

    

(3)

    

4

    

(5)

  

Net sales

$

2,030

  

$

2,172

  

$

3,785

  

$

4,095

  
                         

Earnings (loss) before interest and taxes -

                        

Metal beverage packaging, Americas & Asia

$

137

  

$

126

  

$

239

  

$

252

  

Business consolidation and other activities

  

(12)

    

-

    

(16)

    

(3)

  

Total metal beverage packaging, Americas & Asia

  

125

    

126

    

223

    

249

  
                         

Metal beverage packaging, Europe

  

74

    

59

    

113

    

88

  

Business consolidation and other activities

  

(5)

    

(5)

    

(9)

    

(7)

  

Total metal beverage packaging, Europe

  

69

    

54

    

104

    

81

  
                         

Food and aerosol packaging

  

33

    

29

    

53

    

59

  

Business consolidation and other activities

  

(3)

    

(1)

    

(17)

    

(1)

  

Total food and aerosol packaging

  

30

    

28

    

36

    

58

  
                         

Aerospace

  

19

    

20

    

37

    

39

  

Business consolidation and other activities

  

-

    

-

    

-

    

1

  

Total aerospace

  

19

    

20

    

37

    

40

  
                         

Segment earnings before interest and taxes

  

243

    

228

    

400

    

428

  
                         

Corporate expenses, intercompany eliminations, and other, net

  

(12)

    

(26)

    

(35)

    

(52)

  

Business consolidation and other activities

  

36

    

72

    

(209)

    

24

  
                         

Total corporate expenses, intercompany eliminations, and other, net

  

24

    

46

    

(244)

    

(28)

  
                         

Earnings before interest and taxes

$

267

  

$

274

  

$

156

  

$

400

  

Notes to the Condensed Financial Statements (Second Quarter 2016)
 

2.     Business Consolidation, Debt Refinancing and Other Activities
               
   

Announcement

  

Three Months Ended June 30,

  

Six Months Ended June 30,

  

($ in millions)

  

Date

  

2016

  

2015

  

2016

  

2015

  
                               

Business Consolidation and Other Activities:

                              

Metal beverage packaging, Americas & Asia

                              

 Rexam transaction costs (1)

  

Jun. 2016

  

$

(9)

  

$

-

  

$

(9)

  

$

-

  

 Individually insignificant items

        

(3)

    

-

    

(7)

    

(3)

  

Total metal beverage packaging, Americas & Asia

        

(12)

    

-

    

(16)

    

(3)

  
                               

Metal beverage packaging, Europe

                              

 Rexam transaction costs (1)

  

Jan. 2016

    

(3)

    

-

    

(7)

    

-

  

 Asset impairment (2)

  

Jun. 2015

    

-

    

(5)

    

-

    

(5)

  

 Individually insignificant items

        

(2)

    

-

    

(2)

    

(2)

  

Total metal beverage packaging, Europe

        

(5)

    

(5)

    

(9)

    

(7)

  
                               

Food and aerosol packaging

              

-

          

-

  

 Weirton facility closure costs (3)

  

Feb. 2016

    

(2)

    

-

    

(11)

    

-

  

 Individually insignificant items

  

Mar. 2016

    

(1)

    

(1)

    

(6)

    

(1)

  

Total food and aerosol packaging

        

(3)

    

(1)

    

(17)

    

(1)

  
                               

Aerospace individually insignificant items

        

-

    

-

    

-

    

1

  
                               

Corporate

                              

 Currency exchange loss for restricted cash, intercompany loans and 2020, 2023 euro senior notes (4)

  

Dec. 2015

    

(170)

    

-

    

(266)

    

-

  

 Economic hedge - currency exchange rate risk (1)

  

Feb. 2015

    

(91)

    

96

    

(179)

    

68

  

 Cross-currency swaps (5)

  

Dec. 2015

    

32

    

-

    

(4)

    

-

  

 Rexam transaction costs (1)

  

Feb. 2015

    

(53)

    

(24)

    

(77)

    

(44)

  

 Gain on sale of business to Ardagh (10)

  

Jun. 2016

    

320

    

-

    

320

    

-

  

 Individually insignificant items

        

(2)

    

-

    

(3)

    

-

  

Total corporate

        

36

    

72

    

(209)

    

24

  
                               

Total business consolidation and other activities, pretax

        

16

    

66

    

(251)

    

14

  
                               

Tax effect on business consolidation and other activities

        

234

    

(25)

    

329

    

(8)

  

Individually insignificant items

        

(1)

    

(2)

    

(2)

    

(3)

  

 Total tax effect

        

233

    

(27)

    

327

    

(11)

  

Total business consolidation and other activities, net of tax

      

$

249

  

$

39

  

$

76

  

$

3

  
                               

Debt Refinancing and Other Costs:

                              

Interest expense on 3.5% and 4.375% senior notes (8)

  

Dec. 2015

  

$

(25)

  

$

-

  

$

(49)

  

$

-

  

Economic hedge - interest rate risk (1)

  

Feb. 2015

    

(4)

    

5

    

(20)

    

5

  

Refinancing of bridge, and revolving credit facilities (6)

  

Mar. 2016

    

(17)

    

(5)

    

(30)

    

(5)

  

Amortization of unsecured, committed bridge facility financing fees (7)

  

Feb. 2015

    

-

    

(5)

    

(7)

    

(7)

  

Redemption of 6.75% and 5.75% senior notes, due September 2020 and May 2021, respectively, and refinance of senior credit facilities (9)

  

Feb. 2015

    

-

    

-

    

-

    

(58)

  

 Total debt refinancing and other costs

        

(46)

    

(5)

    

(106)

    

(65)

  

 Tax effect

        

14

    

1

    

35

    

21

  

 Total debt refinancing and other costs, net of tax

      

$

(32)

  

$

(4)

  

$

(71)

  

$

(44)

  
                               
         

(1)

During the first two quarters of 2016 and 2015, the company recorded charges for professional services and other costs associated with the acquisition of Rexam which closed on June 30, 2016.
   
 

Also during the two quarters of 2016 and 2015, the company recorded losses related to derivative financial instruments to reduce its currency exchange rate exposure associated with the British pound denominated cash portion of the Rexam acquisition purchase price and entered into derivative financial instruments to mitigate its exposure to interest rate changes associated with anticipated debt issuances in connection with the cash portion of the Rexam acquisition purchase price.

Notes to the Condensed Financial Statements (Second Quarter 2016)
   

2.     Business Consolidation, Debt Refinancing and Other Activities (continued)
   

(2)

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

(3)

During the first quarter of 2016, the company announced the closure of the Weirton, West Virginia, plant, a food and household packaging flat sheet production and end-making facility, which will cease production in early 2017. Charges in the first two quarters of 2016 were comprised of employee severance and benefits, facility shutdown costs, and asset impairment and disposal costs.
   

(4)

The company recorded foreign currency exchange losses from the revaluation of foreign currency denominated restricted cash, intercompany loans related to the cash component of the Rexam acquisition purchase price and the revaluation of the euro-denominated debt issuances in December 2015 (see Note 8 below).
   

(5)

In connection with the December 2015 issuance of $1 billion of U.S. dollar senior notes due 2020, the company executed cross-currency swaps to convert the fixed-rate U.S. dollar debt issuance to fixed-rate euro debt for the life of the notes to more effectively match the future cash flows of our business. These contracts were not accounted for as hedges, and therefore, changes in the fair value of these contracts are recognized in earnings.
   

(6)

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.
   
 

During the first two quarters of 2016, the company recorded charges for the write-off of unamortized deferred financing costs associated with the refinancing of the revolving credit facility and the unsecured, committed bridge facility.
   
 

Also in the first two quarters of 2016, the company recorded interest expense related to the new Term A U.S. dollar and Term A euro loans.
   

(7)

During the first quarter of 2016 and 2015, respectively, 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 proposed Rexam acquisition purchase price.
   

(8)

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.
   

(9)

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.
   
 

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.
   

(10)

In connection with the acquisition of Rexam, the company was required to divest certain assets of the combined company, including a portion of Ball's existing metal beverage packaging businesses and certain metal beverage can assets of Rexam (combined, the Divestment Business). The sale of the combined Divestment Business to Ardagh Group S.A., was completed immediately after the Rexam acquisition on June 30, 2016, for $3.42 billion, subject to customary closing adjustments. A preliminary gain of $320 million was recorded in connection with the sale of the assets and liabilities of Ball's divested packaging businesses.
 
 
 

  Notes to the Condensed Financial Statements (Second Quarter 2016)
 

3.     Non-U.S. GAAP Financial Measures
 

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 Earnings Before Interest, Taxes, Depreciation and Amortization (Comparable EBITDA) and Comparable Operating Earnings - Comparable EBITDA is earnings before interest, taxes, depreciation and amortization, business consolidation and other items, and Comparable Operating Earnings is earnings before interest, taxes and business consolidation costs and other items. We use Comparable EBITDA and Comparable Operating 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

    

Six Months Ended

  
   

June 30,

    

June 30,

  

($ in millions, except per share amounts)

  

2016

    

2015

    

2016

    

2015

  
                                 

Net earnings attributable to Ball Corporation

  

$

369

    

$

160

    

$

242

    

$

181

  

Add: Business consolidation and other activities, net of tax

    

(249)

      

(39)

      

(76)

      

(3)

  

Add: Debt refinancing and other costs, net of tax

    

32

      

4

      

71

      

44

  
                                 

Net earnings attributable to Ball Corporation before above transactions (Comparable Net Earnings)

  

$

152

    

$

125

    

$

237

    

$

222

  

Per diluted share before above transactions

  

$

1.05

    

$

0.89

    

$

1.63

    

$

1.57

  

A summary of the effects of the above transactions on earnings before interest and taxes is as follows:
             
   

Three Months Ended

    

Six Months Ended

  
   

June 30,

    

June 30,

  

($ in millions)

  

2016

  

2015

  

2016

  

2015

  
                           

Net earnings attributable to Ball Corporation

  

$

369

  

$

160

  

$

242

  

$

181

  

Add: Net earnings attributable to noncontrolling interests

    

-

    

-

    

-

    

7

  

Net earnings

    

369

    

160

    

242

    

188

  

Less: Equity in results of affiliates, net of tax

    

(1)

    

(1)

    

-

    

(2)

  

Add: Tax provision (benefit)

    

(188)

    

79

    

(271)

    

79

  

Earnings (loss) before taxes

    

180

    

238

    

(29)

    

265

  

Add: Total interest expense

    

87

    

36

    

185

    

135

  

Earnings before interest and taxes

    

267

    

274

    

156

    

400

  

Add: Business consolidation and other activities

    

(16)

    

(66)

    

251

    

(14)

  
                           

    EBIT before above transactions (Comparable Operating Earnings)

  

$

251

  

$

208

  

$

407

  

$

386

  

Notes to the Condensed Financial Statements (Second Quarter 2016)
       

3.     Non-U.S. GAAP Financial Measures (continued)
       

A summary of net debt and adjusted net debt is as follows:
       
   

Twelve Months

  
   

Ended

  

($ in millions, except ratios)

  

June 30, 2016

  
         

Net earnings attributable to Ball Corporation

    

342

  

Add: Net earnings attributable to noncontrolling interests

  

$

15

  

Net earnings

    

357

  

Less: Equity in results of affiliates, net of tax

    

(3)

  

Add: Tax provision (benefit)

    

(303)

  

Net earnings before taxes

    

51

  

Add: Total interest expense

    

310

  

Earnings before interest and taxes (EBIT)

    

361

  

Add: Business consolidation and other activities (A)

    

460

  

Comparable Operating Earnings

    

821

  

Add: Depreciation and amortization

    

299

  

Comparable EBITDA

  

$

1,120

  
         

Interest expense, excluding debt refinancing and other costs (Interest Expense)

  

$

(152)

  
         

Total debt at June 30, 2016

  

$

11,359

  

Less: Cash and cash equivalents

    

(6,399)

  

Less: Restricted cash, noncurrent

    

(2,124)

  
         

Net Debt (B)

  

$

2,836

  
         

Add: Cash purchase price payable to Rexam's shareholders

  

$

3,825

  

Add: Payment to acquired UK pension plan for escrow, post-closing

    

173

  

Add: Acquisition related derivatives settled, post-closing

    

152

  
         

Adjusted Net Debt (C)

  

$

6,986

  
         

Comparable Operating Earnings/Interest Expense (Interest Coverage)

    

5.4x

  

Net Debt/Comparable EBITDA

    

2.5x

  
         
 

Notes to the Condensed Financial Statements (Second Quarter 2016)
                 

3.     Non-U.S. GAAP Financial Measures (continued)
                 
   

Twelve
Months Ended
December 31, 2015

  

Less: Six
Months Ended
June 30, 2015

  

Add: Six
Months Ended
June 30, 2016

  

Twelve Months
Ended
June 30, 2016
 

($ in millions, except ratios)
                                 

Net earnings (loss) attributable to Ball Corporation

  

$

281

    

$

181

    

$

242

    

$

342

  

Add: Net earnings attributable to noncontrolling interests

    

22

      

7

      

-

      

15

  

Net earnings (loss)

    

303

      

188

      

242

      

357

  

Less: Equity in results of affiliates, net of tax

    

(5)

      

(2)

      

-

      

(3)

  

Add: Tax provision (benefit)

    

47

      

79

      

(271)

      

(303)

  

Earnings (loss) before taxes

    

345

      

265

      

(29)

      

51

  

Add: Total interest expense

    

260

      

135

      

185

      

310

  

Earnings (loss) before interest and taxes (EBIT)

    

605

      

400

      

156

      

361

  

Add: Business consolidation and other activities

    

195

      

(14)

      

251

      

460

  

Comparable Operating Earnings

    

800

      

386

      

407

      

821

  

Add: Depreciation and amortization

    

285

      

139

      

153

      

299

  

Comparable EBITDA

  

$

1,085

    

$

525

    

$

560

    

$

1,120

  
                                 

Total interest expense

  

$

(260)

    

$

(135)

    

$

(185)

    

$

(310)

  

Less: debt refinancing and other costs

    

117

      

65

      

106

      

158

  

Interest expense, excluding debt refinancing and other costs (Interest)

  

$

(143)

    

$

(70)

    

$

(79)

    

$

(152)

  
                                 

Total Debt at period end

    

5,052

                      

11,359

  

Less: Cash

    

(224)

                      

(6,399)

  

Less: Restricted cash, noncurrent

    

(2,154)

                      

(2,124)

  

Net Debt

  

$

2,674

                    

$

2,836

  
                                 

Add: Cash purchase price payable to Rexam's shareholders

    

-

                      

3,825

  

Add: Payment to acquired UK pension plan for escrow, post-closing

    

-

                      

173

  

Add: Acquisition related derivatives settled, post-closing

    

-

                      

152

  
                                 

Adjusted Net Debt

  

$

2,674

                    

$

6,986

  
                                 

Rolling four quarters Comparable Operating Earnings/Interest

    

5.6x

                      

5.4x

  

Net Debt/Comparable EBITDA

    

2.5x

                      

2.5x