Ball Corporation BLL announced that it has completed the previously announced redemption of all of its outstanding 6.75% Senior Notes due 2020 and all of its outstanding 5.75% Senior Notes due 2021. Consequently, the company will record a pre-tax charge of approximately $55.8 million in the first quarter of 2015.
The 2020 Notes were redeemed at a redemption price of 103.375% of the principal amount of the 2020 Notes outstanding plus accrued and unpaid interest to the redemption date of Mar 21, 2015. The 2021 Notes were redeemed at a redemption price of 100% of the principal amount of the 2021 Notes outstanding plus the Applicable Premium.
As of Mar 21, the redemption date, $500 million principal amount of the 2020 Notes and $500 million principal amount of the 2021 Notes remained outstanding. Ball Corporation had utilized its cash in hand and borrowings under its existing bank credit facilities and accounts receivable securitization program to fund these redemptions. The company had cash and cash equivalents of $191.4 million at the end of 2014 compared with $416 million at 2013 end.
Ball Corporation reported fourth-quarter 2014 adjusted earnings of 84 cents per share, down 2% from 86 cents per share earned in the year-ago quarter. Strong manufacturing performance and a lower tax rate were offset by flat demand for global metal packaging and unfavorable currency translation. Earnings also lagged the Zacks Consensus Estimate by a penny.
Ball Corporation expects 2015 free cash flow to be roughly in line with the $620 million reported in 2014. The company has maintained its long-term earnings per share growth goal of 10–15%.
Ball Corporation’s acquisition of Rexam PLC REXMY will create the world's largest manufacturer of food and beverage cans with the capability to handle capital spending and cost management more efficiently. Moreover, the company will continue to benefit from its continuous focus on cost containment. Product launches and expansion in the emerging markets will also drive growth.
However, uncertainty in the global economic scenario remains a headwind. Moreover, manufacturing challenges and tough volume comparisons will remain areas of concern for Ball Corporation.
Broomfield, CO-based Ball Corporation is the largest manufacturer of beverage cans in North America. It also supplies aerospace as well as other technologies and services to the government and commercial customers.
Currently, Ball Corporation has a Zacks Rank #3 (Hold). Some better-ranked stocks in the sector include Berry Plastics, Group Inc. BERY and Bemis Company, Inc. BMS, both of which carry a Zacks Rank #2 (Buy).
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