Ball Corp. Earns $69.5 Million for First Quarter

BALL CORPORATION PRESS RELEASE

Ball Corporation (NYSE: BLL) today reported first quarter net earnings of $69.5 million, or 73 cents per diluted share, on sales of $1.59 billion, compared to $83.8 million, or 85 cents per diluted share, on sales of $1.74 billion in the first quarter of 2008.

In the quarter, $5 million ($3.1 million after tax, or 4 cents per diluted share) of accelerated depreciation expense was recorded as expected in connection with a prior business consolidation charge to close a metal beverage can plant in Kansas City, Mo. The plant was closed by the end of the first quarter. A gain of $7.1 million ($4.4 million after tax, or 5 cents per diluted share) on the sale of an Australian subsidiary is included in first quarter 2008 results. Details of comparable segment earnings and business consolidation activities can be found in Notes 1 and 2 to the unaudited consolidated financial statements that accompany this news release.

“On a comparable basis, our diluted earnings per share were 77 cents in the quarter, down slightly from our record first quarter results of 80 cents in 2008,” said R. David Hoover, chairman, president and chief executive officer. “Metal food and household products packaging, Americas, segment results showed marked improvement due to pricing and cost recovery initiatives. The seasonally slow first quarter and significant inventory holding losses in our other packaging businesses negatively affected results, but we anticipate volume and margin trends will improve to more historical levels as we head into the traditionally busier summer season. Our aerospace segment performed in line with expectations.”

“We continue to take disciplined actions to better balance our supply with market demand in this difficult economic environment and to manage Ball for long-term growth,” said John A. Hayes, executive vice president and chief operating officer. “Margins in our global beverage can business are expected to improve as we work through higher priced metal in inventories and as customers begin summer promotional activity. Aggressive cost reduction activities are in place in all of our businesses and cost savings from prior plant closures will begin to contribute to performance improvement over the course of the year.”

Aerospace and Technologies

Aerospace and technologies comparable segment results were operating earnings of $14.6 million on sales of $178.1 million in the quarter, compared to $22 million, including the gain on the sale of an Australian subsidiary, on sales of $178 million in 2008. Backlog at the end of the quarter was $592 million.

The Ball Aerospace-built Kepler spacecraft successfully launched in March carrying the largest camera ever sent by NASA beyond Earth’s orbit. Kepler is the first NASA mission capable of finding Earth-sized planets in potentially habitable zones. Ball Aerospace was also selected during the quarter as the contractor for the Ares I Instrument Unit Assembly Flight Computer and Command Telemetry Computer.

Metal Beverage Packaging, Americas & Asia

Metal beverage packaging, Americas and Asia, comparable segment operating earnings, including $5 million in accelerated depreciation, were $41.2 million in the first quarter on sales of $620.4 million, compared to $74 million on sales of $703.9 million in the first quarter of 2008. First quarter results were lower primarily due to reduced North American sales volumes and to higher cost inventory in the segment.

In Asia, an earlier than usual Lunar New Year resulted in some holiday sales volumes in China occurring in December rather than in January. Ball’s joint venture metal beverage packaging plant under construction in Tres Rios, Brazil is on schedule to begin production in late 2009.

Metal Beverage Packaging, Europe

Metal beverage packaging, Europe, comparable segment results in the quarter were operating earnings of $30.9 million on sales of $343.8 million, compared to $48 million on sales of $405.6 million in 2008. Higher priced metal in inventories and a stronger U.S. dollar negatively affected segment results.

Ball’s strong export volumes during the quarter, largely to Africa, partially alleviated the effects of a decrease in industry sales volumes in Europe. A continued focus on aligning Ball’s supply with market demand and on cost optimization throughout the supply chain positively affected results.

Metal Food & Household Products Packaging, Americas

Metal food and household products packaging, Americas, comparable segment results in the quarter were operating earnings of $49.6 million on sales of $283.6 million, compared to $14.8 million in 2008 on sales of $263.8 million.

Disciplined pricing initiatives, higher volumes later in the quarter and metal inventory holding gains contributed significantly to improved results. Strong cost control and focused execution in manufacturing plants also improved performance in the quarter.

Plastic Packaging, Americas

Plastic packaging, Americas, comparable segment results in the first quarter were operating earnings of $3.6 million on sales of $159.7 million, compared to $4.8 million on sales of $188.9 million in the first quarter of 2008. While overall volumes decreased, the custom/commodity product mix improved as the segment continued its focus on growing the custom portion of the business and delivering value through innovation.

Ball announced earlier this month that it will permanently cease manufacturing operations at two monolayer PET bottle plants in North America and consolidate volumes from those plants into larger manufacturing facilities. As a result, an after-tax charge of approximately $14 million will be recorded in the company’s second quarter results. Cost savings associated with these actions are expected to be approximately $12 million annually beginning in 2010.

Outlook

“We continue to anticipate full-year free cash flow to be in the range of $375 million, and capital spending for the year is expected to be less than $250 million,” said Raymond J. Seabrook, executive vice president and chief financial officer. “Lower manufacturing costs as a result of the plant closings completed at the end of the first quarter, the elimination of higher cost inventories and a $35 million full year reduction in interest expense will contribute to improved second half results.”

“We are managing our businesses with a sharp focus on controlling costs, delivering value with our products and proactively balancing our supply with market demand,” Hoover said. “While the first quarter was three cents below the same period last year, we expect diluted earnings per share to be higher for the full year than they were in 2008.”

Ball Corporation is a supplier of high-quality metal and plastic packaging for beverage, food and household products customers, and of aerospace and other technologies and services, primarily for the U.S. government. Ball Corporation and its subsidiaries employ more than 14,000 people worldwide and reported 2008 sales of approximately $7.6 billion. For the latest Ball news and for other company information, please visit www.ball.com.