Ball 10-Q 2024-03-31

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

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FORM 10-Q

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☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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For the Quarterly Period Ended March 31, 2024

or

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☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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Commission file number 001-07349

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BALL CORPORATION

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State of Indiana (State or other jurisdiction of incorporation or organization)	35-0160610 (I.R.S. Employer Identification No.)

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9200 West 108th Circle Westminster**,** CO (Address of registrant’s principal executive office)	80021 (Zip Code)

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Registrant’s telephone number, including area code: 303**/**469-3131

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Securities registered pursuant to section 12(b) of the Act:

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Class	​	Trading Symbol	​	Name of Exchange	​	Outstanding at May 2, 2024
Common Stock, without par value	​	BALL	​	NYSE	​	310,377,752 shares

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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

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Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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Large accelerated filer ☒	Accelerated filer ◻
Non-accelerated filer ◻	Smaller reporting company◻
​	Emerging growth company ◻

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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ⌧

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Ball Corporation

QUARTERLY REPORT ON FORM 10-Q

For the period ended March 31, 2024

INDEX

​	​	Page****Number
PART I.	FINANCIAL INFORMATION	1
Item 1.	Financial Statements	1
​	Unaudited Condensed Consolidated Statements of Earnings for the Three Months Ended March 31, 2024 and 2023	1
​	Unaudited Condensed Consolidated Statements of Comprehensive Earnings (Loss) for the Three Months Ended March 31, 2024 and 2023	2
​	Unaudited Condensed Consolidated Balance Sheets at March 31, 2024, and December 31, 2023	3
​	Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2024 and 2023	4
​	Notes to the Unaudited Condensed Consolidated Financial Statements
​	Note 1. Basis of Presentation	5
​	Note 2. Accounting Pronouncements	6
​	Note 3. Business Segment Information	7
​	Note 4. Acquisitions and Dispositions	9
​	Note 5. Revenue from Contracts with Customers	11
​	Note 6. Business Consolidation and Other Activities	12
​	Note 7. Supplemental Cash and Cash Flow Statement Disclosures	12
​	Note 8. Receivables, Net	13
​	Note 9. Inventories, Net	13
​	Note 10. Property, Plant and Equipment, Net	14
​	Note 11. Goodwill	14
​	Note 12. Intangible Assets, Net	14
​	Note 13. Other Assets	14
​	Note 14. Leases	15
​	Note 15. Debt	15
​	Note 16. Taxes on Income	16
​	Note 17. Employee Benefit Obligations	16
​	Note 18. Equity and Accumulated Other Comprehensive Earnings (Loss)	18
​	Note 19. Earnings and Dividends Per Share	19
​	Note 20. Financial Instruments and Risk Management	20
​	Note 21. Contingencies	24
​	Note 22. Indemnifications and Guarantees	24
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34
Item 4.	Controls and Procedures	34
PART II.	OTHER INFORMATION	35

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PART I. FINANCIAL INFORMATION

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BALL CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

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​	​	​	​	​	​	​
​	​	Three Months Ended March 31,
($ in millions, except per share amounts)	​	2024			2023
​	​	​	​	​	​	​
Net sales	​	$	2,874	​	$	2,981
​	​	​	​	​	​	​
Costs and expenses	​	​	​	​	​	​
Cost of sales (excluding depreciation and amortization)	​	​	(2,283)	​	​	(2,432)
Depreciation and amortization	​	​	(158)	​	​	(147)
Selling, general and administrative	​	​	(211)	​	​	(115)
Business consolidation and other activities	​	​	(26)	​	​	(20)
​	​	​	(2,678)	​	​	(2,714)
​	​	​	​	​	​	​
Earnings before interest and taxes	​	​	196	​	​	267
​	​	​	​	​	​	​
Interest expense	​	​	(93)	​	​	(113)
Debt refinancing and other costs	​	​	(2)	​	​	—
Total interest expense	​	​	(95)	​	​	(113)
​	​	​	​	​	​	​
Earnings before taxes	​	​	101	​	​	154
Tax (provision) benefit	​	​	(27)	​	​	(33)
Equity in results of affiliates, net of tax	​	​	5	​	​	7
Earnings from continuing operations	​	​	79	​	​	128
Discontinued operations, net of tax	​	​	3,607	​	​	52
Net earnings	​	​	3,686	​	​	180
Net earnings attributable to noncontrolling interests	​	​	1	​	​	3
Net earnings attributable to Ball Corporation	​	$	3,685	​	$	177
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Earnings per share:	​	​	​	​	​	​
Basic - continuing operations	​	$	0.25	​	$	0.40
Basic - discontinued operations	​	​	11.45	​	​	0.16
Total basic earnings per share	​	$	11.70	​	$	0.56
​	​	​	​	​	​	​
Diluted - continuing operations	​	$	0.25	​	$	0.40
Diluted - discontinued operations	​	​	11.36	​	​	0.16
Total diluted earnings per share	​	$	11.61	​	$	0.56
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​	​	​	​	​	​	​
Weighted average shares outstanding: (000s)	​	​	​	​	​	​
Basic	​	​	314,950	​	​	314,236
Diluted	​	​	317,385	​	​	316,667

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See accompanying notes to the unaudited condensed consolidated financial statements.

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BALL CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (LOSS)

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​	​	​	​	​	​	​	​
​	​	Three Months Ended March 31,					​
($ in millions)		2024			2023		​
​	​	​	​	​	​	​	​
Net earnings	​	$	3,686	​	$	180	​
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Other comprehensive earnings (loss):	​	​	​	​	​	​	​
Currency translation adjustment	​	​	(87)	​	​	20	​
Pension and other postretirement benefits	​	​	141	​	​	1	​
Derivatives designated as hedges	​	​	8	​	​	29	​
Total other comprehensive earnings (loss)	​	​	62	​	​	50	​
Income tax (provision) benefit	​	​	(39)	​	​	(8)	​
Total other comprehensive earnings (loss), net of tax	​	​	23	​	​	42	​
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Total comprehensive earnings	​	​	3,709	​	​	222	​
Comprehensive earnings attributable to noncontrolling interests	​	​	1	​	​	3	​
Comprehensive earnings attributable to Ball Corporation	​	$	3,708	​	$	219	​

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See accompanying notes to the unaudited condensed consolidated financial statements.

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BALL CORPORATION

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

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​	​	​	​	​	​	​
​	​	March 31,		​	December 31,
($ in millions)		2024			2023
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Assets	​	​	​	​	​	​
Current assets	​	​	​	​	​	​
Cash and cash equivalents	​	$	1,719	​	$	695
Receivables, net	​	​	3,050	​	​	2,057
Inventories, net	​	​	1,498	​	​	1,531
Other current assets	​	​	225	​	​	231
Current assets held for sale	​	​	32	​	​	369
Total current assets	​	​	6,524	​	​	4,883
Noncurrent assets	​	​	​	​	​	​
Property, plant and equipment, net	​	​	6,634	​	​	6,715
Goodwill	​	​	4,211	​	​	4,250
Intangible assets, net	​	​	1,199	​	​	1,248
Other assets	​	​	1,330	​	​	1,354
Noncurrent assets held for sale	​	​	—	​	​	853
Total assets	​	$	19,898	​	$	19,303
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Liabilities and Equity	​	​	​	​	​	​
Current liabilities	​	​	​	​	​	​
Short-term debt and current portion of long-term debt	​	$	281	​	$	1,065
Accounts payable	​	​	3,257	​	​	3,661
Accrued employee costs	​	​	257	​	​	245
Other current liabilities	​	​	1,589	​	​	779
Current liabilities held for sale	​	​	—	​	​	435
Total current liabilities	​	​	5,384	​	​	6,185
Noncurrent liabilities	​	​	​	​	​	​
Long-term debt	​	​	5,519	​	​	7,504
Employee benefit obligations	​	​	645	​	​	735
Deferred taxes	​	​	591	​	​	421
Other liabilities	​	​	382	​	​	384
Noncurrent liabilities held for sale	​	​	—	​	​	237
Total liabilities	​	​	12,521	​	​	15,466
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Equity	​	​	​	​	​	​
Common stock (683,560,199 shares issued - 2024; 683,241,401 shares issued - 2023)	​	​	1,352	​	​	1,312
Retained earnings	​	​	11,386	​	​	7,763
Accumulated other comprehensive earnings (loss)	​	​	(893)	​	​	(916)
Treasury stock, at cost (370,544,422 shares - 2024; 367,551,366 shares - 2023)	​	​	(4,537)	​	​	(4,390)
Total Ball Corporation shareholders' equity	​	​	7,308	​	​	3,769
Noncontrolling interests	​	​	69	​	​	68
Total equity	​	​	7,377	​	​	3,837
Total liabilities and equity	​	$	19,898	​	$	19,303

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See accompanying notes to the unaudited condensed consolidated financial statements.

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BALL CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

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​	​	​	​	​	​	​
​	​	Three Months Ended March 31,
($ in millions)		2024			2023
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Cash Flows from Operating Activities	​	​	​	​	​	​
Net earnings	​	$	3,686	​	$	180
Adjustments to reconcile net earnings to cash provided by (used in) operating activities:	​	​	​	​	​	​
Depreciation and amortization	​	​	167	​	​	166
Business consolidation and other activities	​	​	26	​	​	20
Deferred tax provision (benefit)	​	​	176	​	​	—
Gain on Aerospace disposal	​	​	(4,695)	​	​	—
Pension contributions	​	​	(10)	​	​	(4)
Other, net	​	​	46	​	​	49
Changes in working capital components, net of dispositions	​	​	(643)	​	​	(686)
Cash provided by (used in) operating activities	​	​	(1,247)	​	​	(275)
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Cash Flows from Investing Activities	​	​	​	​	​	​

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Management’s discussion and analysis should be read in conjunction with the unaudited condensed consolidated financial statements (consolidated financial statements) and accompanying notes included in Item 1 of this Quarterly Report on Form 10-Q, which include additional information about our accounting policies, practices and the transactions underlying our financial results. The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) requires us to make estimates and assumptions that affect the reported amounts in our consolidated financial statements and the accompanying notes, including various claims and contingencies related to lawsuits, taxes, environmental and other matters arising during the normal course of business. We apply our best judgment, our knowledge of existing facts and circumstances and actions that we may undertake in the future in determining the estimates that affect our consolidated financial statements. We evaluate our estimates on an ongoing basis using our historical experience, as well as other factors we believe appropriate under the circumstances, such as current economic conditions, and adjust or revise our estimates as circumstances change. As future events and their effects cannot be determined with precision, actual results may differ from these estimates. Ball Corporation and its subsidiaries are referred to collectively as “Ball Corporation,” “Ball,” “the company,” “we” or “our” in the following discussion and analysis.

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OVERVIEW

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Business Overview and Industry Trends

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Ball Corporation is one of the world’s leading aluminum packaging suppliers. Our packaging products are produced for a variety of end uses, are manufactured in facilities around the world and are competitive with other substrates, such as plastics and glass. In the aluminum packaging industry, sales and earnings can be increased by reducing costs, increasing prices, developing new products, expanding volumes and making strategic acquisitions.

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We sell our aluminum packaging products mainly to large, multinational beverage, personal care and household products companies with which we have developed long-term relationships. This is evidenced by our high customer retention and our large number of long-term supply contracts. While we have a diversified customer base, we sell a significant portion of our packaging products to major companies and brands, as well as to numerous regional customers. The overall global aluminum beverage and aerosol container industries are growing and are expected to continue to grow in the medium to long term.

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We purchase our raw materials from relatively few suppliers. We also have exposure to inflation, in particular the rising costs of raw materials, as well as other direct cost inputs. We mitigate our exposure to the changes in the costs of aluminum through the inclusion of provisions in contracts covering the majority of our volumes to pass through aluminum price changes, as well as through the use of derivative instruments. The pass through provisions generally result in proportional increases or decreases in sales and costs with a greatly reduced impact, if any, on net earnings; however, there may be timing differences of when the costs are passed through. Because of our customer and supplier concentration, our business, financial condition and results of operations could be adversely affected by the loss, insolvency or bankruptcy of a major customer or supplier or a change in a supply agreement with a major customer or supplier, although our contract provisions generally mitigate the risk of customer loss, and our long-term relationships represent a known, stable customer base.

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From time to time, we have evaluated and expect to continue to evaluate possible transactions that we believe will benefit the company and our shareholders, which may include strategic acquisitions, divestitures of parts of our company or equity investments. At any time, we may be engaged in discussions or negotiations at various stages of development with respect to one or more possible transactions or may have entered into non-binding letters of intent. As part of any such initiatives, we may participate in processes being run by other companies or leading our own activities.

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RESULTS OF CONSOLIDATED OPERATIONS

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Management’s discussion and analysis for our results of operations on a consolidated and segment basis include a quantification of factors that had a material impact. Other factors that did not have a material impact, but that are significant to understand the results, are qualitatively described.

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On February 16, 2024, the company completed the divestiture of its aerospace business. Effective as of the first quarter of 2024, the company will report its financial performance in three reportable segments: (1) beverage packaging, North and Central America; (2) beverage packaging, Europe, Middle East and Africa (beverage packaging, EMEA) and (3) beverage packaging, South America. See Note 1 for further information on the basis of presentation.

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Global Economic Environment

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Recent data has indicated continued high inflation in the regions where we operate. Current and future inflationary effects may continue to be impacted by, among other things, supply chain disruptions, governmental stimulus or fiscal and monetary policies, changes in interest rates, and changing demand for certain goods and services. We cannot predict with any certainty the impact that rising interest rates, a global or any regional recession, or higher inflation may have on our customers or suppliers. Additionally, we are unable to predict the potential effects that any future pandemic, or the continuation or escalation of global conflicts, including the conflict between Russia and Ukraine and the rising instability in the Middle East, and related sanctions or market disruptions, may have on our business. It remains uncertain how long any of these conditions may last or how severe any of them may become.

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Consolidated Sales and Earnings

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​	​	​	​	​	​	​	​
​	​	Three Months Ended March 31,					​
($ in millions)		2024			2023		​
​	​	​	​	​	​	​	​
Net sales	​	$	2,874	​	$	2,981	​
Net earnings attributable to Ball Corporation	​	​	3,685	​	​	177	​
Net earnings attributable to Ball Corporation as a % of net sales	​	​	128	%	​	6	%

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Sales in the three months ended March 31, 2024, decreased $107 million compared to the same period in 2023 primarily due to a decrease of $142 million from lower sales prices resulting mainly from lower aluminum prices.

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Net earnings attributable to Ball Corporation for the three months ended March 31, 2024, increased $3.51 billion compared to the same period in 2023 primarily due to increases of $3.56 billion from discontinued operations, net of tax and $26 million from the results of the reportable segments discussed below, partially offset by $79 million of incremental compensation cost from the successful sale of the aerospace business.

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When analyzing net earnings attributable to Ball Corporation as a percentage of net sales, it is important to note that net earnings attributable to Ball Corporation includes discontinued operations, net of tax resulting from the net sales attributable to the historical aerospace reportable segment through the date of the divestiture on February 16, 2024, that are now reported as discontinued operations. However, net sales attributable to the historical aerospace reportable segment are not included in the net sales figures in the table above.

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Cost of Sales (Excluding Depreciation and Amortization)

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Cost of sales, excluding depreciation and amortization, was $2,283 million and $2,432 million for the three months ended March 31, 2024 and 2023, respectively. These amounts represented 79 percent and 82 percent of consolidated net sales for the three months ended March 31, 2024 and 2023, respectively. The decrease year-over-year is primarily due to lower manufacturing costs, including lower aluminum costs of $122 million and other items discussed in the reportable segment sections below.

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Depreciation and Amortization

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Depreciation and amortization expense was $158 million and $147 million for the three months ended March 31, 2024 and 2023, respectively. These amounts represented 5 percent of consolidated net sales for the three months ended March 31, 2024 and 2023. The increase in expense compared to the same period in 2023 was primarily due to the company’s larger depreciable asset base.

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Selling, General and Administrative

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Selling, general and administrative (SG&A) expenses were $211 million and $115 million for the three months ended March 31, 2024 and 2023, respectively. These amounts represented 7 percent and 4 percent of consolidated net sales for the three months ended March 31, 2024 and 2023, respectively. The increase for the three months ended March 31, 2024, was primarily due to increased compensation costs of $87 million, including incremental compensation cost from the successful sale of the aerospace business consisting of cash bonuses and stock based compensation, and $12 million of reduced foreign exchange gains, partially offset by $22 million from additional interest income.

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Business Consolidation Costs and Other Activities

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Business consolidation and other activities resulted in charges of $26 million and $20 million for the three months ended March 31, 2024 and 2023, respectively. The amounts in 2024 and 2023 primarily included facility shutdown costs. Further details and quantification regarding business consolidation costs and other activities are provided in Note 6.

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Interest Expense

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Total interest expense was $95 million and $113 million for the three months ended March 31, 2024 and 2023, respectively. Interest expense, excluding the effect of debt refinancing and other costs, as a percentage of average borrowings increased by approximately 40 basis points from 4.8 percent for the three months ended March 31, 2023 to 5.2 percent for the three months ended March 31, 2024. The decrease in interest expense was primarily driven by a decrease of $46 million from a smaller amount of weighted average principal outstanding during the quarter, resulting mainly from the use of proceeds from the aerospace disposal, and an increase of $26 million from higher weighted average interest rates on outstanding debt during the year. The company expects to carry a smaller amount of weighted average principal throughout 2024 compared to 2023, with nearly all amounts outstanding having fixed rates. See Note 15 for further details.

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Income Taxes

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The effective tax rate for the three months ended March 31, 2024, was 26.7 percent compared to 21.4 percent for the same period in 2023. The increase of 5.3 percentage points for the three months ended March 31, 2024, was primarily due to increases in U.S. permanent differences, non-U.S. rate differences and withholding taxes net of credits and Pillar Two Global Minimum Taxes. Similar impacts may occur in future periods, but given their inherent uncertainty, the company is unable to reasonably estimate their potential future impacts.

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RESULTS OF BUSINESS SEGMENTS

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Segment Results

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Ball’s operations are organized and reviewed by management along its product lines and geographical areas, and its operating results are presented in the three reportable segments discussed below.

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Beverage Packaging, North and Central America

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​	​	​	​	​	​	​	​	​
​	​	​	Three Months Ended March 31,					​
($ in millions)		​	2024			2023
​	​	​	​	​	​	​	​	​
Net sales	​	​	$	1,403	​	$	1,504	​
Comparable operating earnings	​	​	​	192	​	​	183	​
Comparable operating earnings as a % of segment net sales	​	​	​	14	%	​	12	%

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Ball permanently ceased production at its aluminum beverage can manufacturing facility in St. Paul, Minnesota in the first quarter of 2023, permanently ceased production at its aluminum beverage can manufacturing facility in Wallkill, New York in the third quarter of 2023 and permanently ceased production at its aluminum beverage can manufacturing facility in Kent, Washington in the first quarter of 2024.

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Segment sales for the three months ended March 31, 2024, were $101 million lower compared to the same period in 2023. The decrease for the three months ended March 31, 2024, was primarily due to a decrease of $90 million from lower sales prices resulting mainly from lower aluminum prices.

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Comparable operating earnings for the three months ended March 31, 2024, were $9 million higher compared to the same period in 2023. The increase for the three months ended March 31, 2024, was primarily due to increases of $23 million from fixed and variable cost out actions, $11 million from product mix and $8 million from the annual pass-through of inflationary costs net of current year inflation, partially offset by a decrease of $32 million from income recognized in 2023 from the termination of a long term power supply contract that offset higher energy costs.

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Beverage Packaging, EMEA

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​	​	​	​	​	​	​	​
​	​	Three Months Ended March 31,					​
($ in millions)		2024			2023
​	​	​	​	​	​	​	​
Net sales	​	$	810	​	$	834	​
Comparable operating earnings	​	​	85	​	​	73	​
Comparable operating earnings as a % of segment net sales	​	​	10	%	​	9	%

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Segment sales for the three months ended March 31, 2024, were $24 million lower compared to the same period in 2023. The decrease for the three months ended March 31, 2024, was primarily due to a decrease from lower sales prices resulting mainly from lower aluminum prices.

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Comparable operating earnings for the three months ended March 31, 2024, were $12 million higher compared to the same period in 2023 primarily due to increases of $10 million from improved operational efficiencies and $9 million from product mix.

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Beverage Packaging, South America

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​	​	​	​	​	​	​	​
​	​	Three Months Ended March 31,					​
($ in millions)		2024			2023
​	​	​	​	​	​	​	​
Net sales	​	$	482	​	$	450	​
Comparable operating earnings	​	​	55	​	​	50	​
Comparable operating earnings as a % of segment net sales	​	​	11	%	​	11	%

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Segment sales for the three months ended March 31, 2024, were $32 million higher compared to the same period in 2023. The increase for the three months ended March 31, 2024, was primarily due to an increase of $62 million from higher volumes, partially offset by a decrease of $25 million from lower sales prices resulting mainly from lower aluminum prices.

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Comparable operating earnings for the three months ended March 31, 2024, were $5 million higher compared to the same period in 2023. The increase for the three months ended March 31, 2024, was primarily due to an increase of $24 million from higher volumes, partially offset by a decrease of $10 million from lower sales prices resulting mainly from product mix.

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Management Performance Measures

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Management internally uses various measures to evaluate company performance such as comparable operating earnings (earnings before interest expense, taxes and business consolidation and other non-comparable items); comparable net earnings (earnings before business consolidation costs and other non-comparable items after tax); comparable diluted earnings per share (comparable net earnings divided by diluted weighted average shares outstanding); return on average invested capital (net operating earnings after tax over the relevant performance period divided by average invested capital over the same period); economic value added (EVA®) dollars (net operating earnings after tax less a capital charge on average invested capital employed); earnings before interest expense and taxes (EBIT); earnings before interest expense, taxes, depreciation and amortization (EBITDA); and diluted earnings per share. In addition, management uses operating cash flows as a measure to evaluate the company’s liquidity. We believe this information is also useful to investors as it provides insight into the earnings and cash flow criteria that management uses to make strategic decisions. These financial measures may be adjusted at times for items that affect comparability between periods, including business consolidation costs and other non-comparable items.

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Nonfinancial measures used in the packaging businesses include production efficiency and spoilage rates; quality control figures; environmental, health and safety statistics; production and sales volume data; asset utilization rates and measures of sustainability. References to sales volume data represent units shipped.

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Many of the above noted financial measurements are presented on a non-U.S. GAAP basis and should be considered in connection with the consolidated financial statements included within Item 1 of this report. Non-U.S. GAAP measures should not be considered in isolation and should not be considered superior to, or a substitute for, financial measures calculated in accordance with U.S. GAAP. A presentation of earnings in accordance with U.S. GAAP is available in Item 1 of this report.

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NEW ACCOUNTING PRONOUNCEMENTS

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For information regarding recent accounting pronouncements, see Note 2 to the consolidated financial statements included within Item 1 of this report on Form 10-Q.

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FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

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Cash Flows and Capital Expenditures

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Our primary sources of liquidity are cash provided by operating activities and external borrowings. We believe that cash flows from operating activities, even in the absence of operating cash flows from the historical aerospace reportable segment, and cash provided by short-term, long-term and committed revolver borrowings, when necessary, will be sufficient to meet our ongoing operating requirements, scheduled principal and interest payments on debt, dividend payments, anticipated share repurchases and anticipated capital expenditures. The following table summarizes our cash flows:

​	​	​	​	​	​	​
​	​	Three Months Ended March 31,
($ in millions)		2024			2023
​	​	​	​	​	​	​
Cash flows provided by (used in) operating activities	​	​	(1,247)	​	$	(275)
Cash flows provided by (used in) investing activities	​	​	5,292	​	​	(336)
Cash flows provided by (used in) financing activities	​	​	(2,978)	​	​	649

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Cash flows from the historical aerospace reportable segment are presented within each cash flow statement category in the consolidated statements of cash flows. Depreciation and amortization, capital expenditures and significant operating and investing noncash items of the aerospace discontinued operation are presented in Note 4.

​

Cash flows used in operating activities were $1.25 billion in 2024, primarily driven by the company’s decision to reduce its use of factoring by $1.09 billion as a result of having significant cash on hand from the Aerospace sale. On February 16, 2024, the company completed the divestiture of the aerospace business. We currently estimate a cash tax of $1.00 billion to be recorded as a cash outflow from operations in 2024. See Note 4 for further details. In an elevated interest rate environment, payment terms with our customers and vendors become a more important element of total mix of information used to negotiate our contract terms. At March 31, 2024, days sales outstanding, net of factored receivables, was 96 days; therefore, a change of one day in days sales outstanding will impact cash flows provided by (used in) operating activities by $32 million. At March 31, 2024, days payable outstanding was 123 days; therefore, a change of one day in days payable outstanding will impact cash flows provided by (used in) operating activities by $25 million. At March 31, 2024, days inventory outstanding was 59 days; therefore, a change of one day in days inventory outstanding will impact cash flows provided by (used in) operating activities by $25 million.

​

Cash flows provided by investing activities were $5.29 billion in 2024, primarily driven by the initial cash proceeds received at close from the sale of the aerospace business of $5.42 billion, which is subject to further customary closing adjustments.

​

Cash flows used in financing activities were $2.98 billion in 2024, primarily driven by net repayments of long-term borrowings of $2.83 billion and repurchases of common stock of $182 million. See Note 15 for further details on the company’s borrowings, and additional amounts available.

​

We have entered into several regional committed and uncommitted accounts receivable factoring programs with various financial institutions for certain of our accounts receivable. The programs are accounted for as true sales of the receivables, with limited recourse to Ball, and had combined limits of approximately $1.86 billion and $2.00 billion at March 31, 2024 and December 31, 2023, respectively. A total of $1.30 billion and $350 million were available for sale under these programs as of March 31, 2024, and December 31, 2023, respectively. The combined limit and available for sale amount as of December 31, 2023, include $160 million and $97 million, respectively, associated with receivable factoring programs included within the historical aerospace reportable segment. The company has recorded expense related to its factoring programs of $13 million and $15 million for the three months ended March 31, 2024 and 2023, respectively, and has presented these amounts in selling, general and administrative in its unaudited condensed consolidated statements of earnings.

​

The company has several regional supplier finance programs with various financial institutions that act as the paying agent for certain payables of the company. The amount of obligations outstanding that the company confirmed as valid to the financial institutions under the company's programs was $573 million and $703 million at March 31, 2024 and December 31, 2023, respectively. Our payment terms are not dependent on whether the suppliers participate in the supplier finance programs or if the suppliers decide to factor their receivables with the financial institutions; therefore, we do not believe that future changes in the availability of supplier finance programs will have a significant impact on our liquidity.

Contributions to the company’s defined benefit pension plans were $10 million in the first three months of 2024 compared to $4 million in the same period of 2023, and such contributions are expected to be approximately $33 million for the full year of 2024. This estimate may change based on changes in the Pension Protection Act, actual plan asset performance and available company cash flow, among other factors.

​

The company has approximately $191 million of capital expenditures for property, plant and equipment contractually committed as of March 31, 2024, and intends to return approximately $245 million to shareholders in the form of dividends for the full year 2024, inclusive of the cash dividend of 20 cents per share, payable June 17, 2024, to shareholders of record as of June 3, 2024.

​

As of March 31, 2024, approximately $554 million of our cash was held outside of the U.S. In the event that we would need to utilize any of the cash held outside of the U.S. for purposes within the U.S., there are no material legal or other economic restrictions regarding the repatriation of cash from any of the countries outside the U.S. where we have cash, other than market liquidity constraints that limit the ability to convert Egyptian pounds held by the company in Egypt with a U.S. dollar equivalent value of $55 million into other currencies. The company believes its U.S. operating cash flows and cash on hand, as well as availability under its long-term, revolving credit facilities, uncommitted short-term credit facilities and committed and uncommitted accounts receivable factoring programs, will be sufficient to meet the cash requirements of the U.S. portion of our ongoing operations, scheduled principal and interest payments on U.S. debt, dividend payments, capital expenditures and other U.S. cash requirements. If non-U.S. funds are needed for our U.S. cash requirements and we are unable to provide the funds through intercompany financing arrangements, we may be required to repatriate funds from non-U.S. locations where the company has previously asserted indefinite reinvestment of funds outside the U.S.

​

Based on its indefinite reinvestment assertion, the company has not provided deferred taxes on earnings in certain non-U.S. subsidiaries because such earnings are intended to be indefinitely reinvested in its international operations. It is not practical to estimate the additional taxes that might become payable if these earnings were remitted to the U.S.

​

Share Repurchases

​

The company’s share repurchases totaled $182 million during the three months ended March 31, 2024, compared to $3 million of repurchases during the same period of 2023. The repurchases were completed using cash on hand, cash provided by operating activities, proceeds from the sale of businesses and available borrowings. The company plans to continue capital return to shareholders via an estimated $1.3 billion in share repurchases in 2024 using cash from the aerospace divestiture and operating activities.

​

On April 24, 2024, Ball’s Board of Directors approved the repurchase by the company of up to a total of 40 million shares of its common stock. This repurchase authorization replaced all previous authorizations.

​

Debt Facilities and Refinancing

​

Given our cash flow projections and unused credit facilities that are available until June 2027, our liquidity is strong and is expected to meet our ongoing cash and debt service requirements. Total interest-bearing debt of $5.84 billion and $8.62 billion was outstanding at March 31, 2024, and December 31, 2023, respectively.

​

On February 14, 2024, Ball announced a public tender of the $1.00 billion 5.25% senior notes due July 2025 and the $750 million 4.875% senior notes due March 2026. On March 14, 2024, $811 million of the $1.00 billion 5.25% senior notes and $494 million of the $750 million 4.875% senior notes were validly tendered and accepted. Additionally, in the first quarter of 2024, Ball repaid at maturity the outstanding 0.875% euro denominated senior notes due in the amount of $817 million and prepaid $700 million of the Term A loan outstanding balance.

​

The company’s senior credit facilities include a $1.35 billion term loan and long-term, multi-currency revolving facilities that mature in June 2027, which provide the company with up to the U.S. dollar equivalent of $1.75 billion. At March 31, 2024, approximately $1.69 billion was available under the company’s long-term, multi-currency committed revolving credit facilities. In addition to these facilities, the company had $278 million of committed short-term loans outstanding. The company also had approximately $937 million of short-term uncommitted credit facilities available at March 31, 2024. At December 31, 2023, the company had $196 million of committed short-term loans outstanding and $13 million outstanding under short-term uncommitted credit facilities.

​

While ongoing financial and economic conditions in certain areas may raise concerns about credit risk with counterparties to derivative transactions, the company mitigates its exposure by allocating the risk among various counterparties and limiting exposure to any one party. We also monitor the credit ratings of our suppliers, customers, lenders and counterparties on a regular basis.

​

We were in compliance with the leverage ratio requirement at March 31, 2024, and for all prior periods presented, and have met all debt payment obligations. The U.S. note agreements and bank credit agreement contain certain restrictions relating to dividends, investments, financial ratios, guarantees and the incurrence of additional indebtedness. The most restrictive of our debt covenants requires us to maintain a leverage ratio (as defined) of no greater than 5.0 times, which will change to 4.5 times as of September 30, 2025. As of March 31, 2024, the company could borrow an additional $2.34 billion under its long-term multi-currency committed revolving facilities and short-term uncommitted credit facilities. Additional details about our debt are available in Note 15 accompanying the consolidated financial statements within Item 1 of this report.

​

Argentina

​

See Note 1 for information relevant to economic and other government policies that may have an impact on financial condition, liquidity and capital resources of the company’s Argentina operations.

​

Defined Benefit Pension Plans

​

In November 2023, the Trustee Board of the U.K. defined benefit pension plan entered into an agreement with an insurance company for a bulk annuity purchase, or “buy-in,” for its U.K. defined benefit pension plan to reduce retirement plan risk, while delivering promised benefits to plan participants. See Note 17 for further details.

​

CONTINGENCIES, INDEMNIFICATIONS AND GUARANTEES

​

Details of the company’s contingencies, legal proceedings, indemnifications and guarantees are available in Note 21 and Note 22 accompanying the consolidated financial statements within Item 1 of this report. The company is routinely subject to litigation incidental to operating its businesses and has been designated by various federal, state, and international environmental agencies as a potentially responsible party, along with numerous other companies, for the clean-up of several hazardous waste sites. The company believes the matters identified will not have a material adverse effect upon its liquidity, results of operations or financial condition.

​

Guaranteed Securities

​

The company’s senior notes are guaranteed on a full and unconditional, joint and several basis by the issuer of the company’s senior notes and the subsidiaries that guarantee the notes (the obligor group). The entities that comprise the obligor group are 100 percent owned by the company. As described in the supplemental indentures governing the company’s existing senior notes, the senior notes are guaranteed by any of the company’s domestic subsidiaries that guarantee any other indebtedness of the company.

​

The following summarized financial information relates to the obligor group as of March 31, 2024, and December 31, 2023. Intercompany transactions, equity investments and other intercompany activity between obligor group subsidiaries have been eliminated from the summarized financial information. Investments in subsidiaries not forming part of the obligor group have also been eliminated. The results and balance sheet information of the historical aerospace reportable segment are included in the following summarized financial information of the obligor group as of and for the year ended December 31, 2023, as the guarantees of the aerospace business legal entities were in effect through that date. On February 16, 2024, the company completed the divestiture of the aerospace business. As such, the following summarized financial information of the obligor group as of and for the three months ended March 31, 2024, does not include results and balance sheet information of the historical aerospace reportable segment.

​

​	​	​	​	​	​	​
​	​	Three Months Ended		​	Year Ended
($ in millions)	​	March 31, 2024			December 31, 2023
​	​	​	​	​	​	​
Net sales	​	$	1,680	​	$	8,962
Gross profit (a)	​	​	206	​	​	1,074
Net earnings	​	​	3,625	​	​	493
Net earnings attributable to Ball Corporation	​	​	3,625	​	​	493

(a)	Gross profit is shown after depreciation and amortization related to cost of sales of $48 million for the three months ended March 31, 2024, and $272 million for the year ended December 31, 2023.

​

For the three months ended March 31, 2024, and the year ended December 31, 2023, the obligor group recorded the following transactions with other subsidiary companies: sales to them of $314 million and $1.13 billion, respectively, net credits from them of $21 million and $38 million, respectively, and net interest income from them of $83 million and $344 million, respectively. The obligor group received dividends from other subsidiary companies of $38 million and $814 million, during the three months ended March 31, 2024, and the year ended December 31, 2023, respectively.

​

​	​	​	​	​	​	​
​	​	March 31,		​	December 31,
($ in millions)		2024			2023
​	​	​	​	​	​	​
Current assets	​	$	3,736	​	$	2,339
Noncurrent assets	​	​	15,144	​	​	15,955
Current liabilities	​	​	4,478	​	​	5,163
Noncurrent liabilities	​	​	8,534	​	​	10,857

​

Included in the amounts disclosed in the table above, at March 31, 2024, and December 31, 2023, the obligor group held receivables due from other subsidiary companies of $724 million and $768 million, respectively, long-term notes receivable due from other subsidiary companies of $10.31 billion and $10.20 billion, respectively, payables due to other subsidiary companies of $1.80 billion and $1.83 billion, respectively, and long-term notes payable due to other subsidiary companies of $2.11 billion and $2.32 billion, respectively.

​

A description of the terms and conditions of the company’s debt guarantees is located in Note 22 of Item 1 of this report.

​

​

The company employs established risk management policies and procedures which seek to reduce the company’s commercial risk exposure to fluctuations in commodity prices, interest rates, currency exchange rates and prices of the company’s common stock with regard to common share repurchases and the company’s deferred compensation stock plan. However, there can be no assurance that these policies and procedures will be successful. Although the instruments utilized involve varying degrees of credit, market and interest risk, the counterparties to the agreements are expected to perform fully under the terms of the agreements. The company monitors counterparty credit risk, including lenders, on a regular basis, but Ball cannot be certain that all risks will be discerned or that its risk management policies and procedures will always be effective. Additionally, in the event of default under the company’s master derivative agreements, the non-defaulting party has the option to set off any amounts owed with regard to open derivative positions. Further details are available in Item 7A within Ball’s 2023 Annual Report on Form 10-K filed on February 20, 2024, and in Note 20 accompanying the consolidated financial statements included within Item 1 of this report.

​

Our chief executive officer and chief financial officer participated in management’s evaluation of our disclosure controls and procedures, as defined by the Securities and Exchange Commission (SEC), as of the end of the period covered by this report and concluded that our controls and procedures were effective. There were no changes to internal controls during the company’s first quarter of 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Upon the sale of the aerospace business on February 16, 2024, the controls over the aerospace business were no longer considered in Ball’s internal control over financial reporting for periods subsequent to the sale.

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FORWARD-LOOKING STATEMENTS

​

This report contains “forward-looking” statements concerning future events and financial performance. Words such as “expects,” “anticipates,” “estimates,” “believes,” and similar expressions typically identify forward looking statements, which are generally any statements other than statements of historical fact. Such statements are based on current expectations or views of the future and are subject to risks and uncertainties, which could cause actual results or events to differ materially from those expressed or implied. You should therefore not place undue reliance upon any forward-looking statements, and they should be read in conjunction with, and qualified in their entirety by, the cautionary statements referenced below. Ball undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Key factors, risks and uncertainties that could cause actual outcomes and results to be different are summarized in filings with the Securities and Exchange Commission, including Exhibit 99 in Ball’s Form 10-K, which are available on Ball’s website and at www.sec.gov. Additional factors that might affect: a) Ball’s packaging segments include product capacity, supply, and demand constraints and fluctuations and changes in consumption patterns; availability/cost of raw materials, equipment, and logistics; competitive packaging, pricing and substitution; changes in climate and weather and related events such as drought, wildfires, storms, hurricanes, tornadoes and floods; footprint adjustments and other manufacturing changes, including the startup of new facilities and lines; failure to achieve synergies, productivity improvements or cost reductions; unfavorable mandatory deposit or packaging laws; customer and supplier consolidation; power and supply chain interruptions; changes in major customer or supplier contracts or loss of a major customer or supplier; inability to pass through increased costs; war, political instability and sanctions, including relating to the situation in Russia and Ukraine and its impact on Ball’s supply chain and its ability to operate in Europe, the Middle East and Africa regions generally; changes in foreign exchange or tax rates; and tariffs, trade actions, or other governmental actions, including business restrictions and orders affecting goods produced by Ball or in its supply chain, including imported raw materials; and b) Ball as a whole include those listed above plus: the extent to which sustainability-related opportunities arise and can be capitalized upon; changes in senior management, succession, and the ability to attract and retain skilled labor; regulatory actions or issues including those related to tax, environmental, social and governance reporting, competition, environmental, health and workplace safety, including U.S. Federal Drug Administration and other actions or public concerns affecting products filled in Ball’s containers, or chemicals or substances used in raw materials or in the manufacturing process; technological developments and innovations; the ability to manage cyber threats; litigation; strikes; disease; pandemic; labor cost changes; inflation; rates of return on assets of Ball’s defined benefit retirement plans; pension changes; uncertainties surrounding geopolitical events and governmental policies, including policies, orders, and actions related to COVID-19; reduced cash flow; interest rates affecting Ball’s debt; successful or unsuccessful joint ventures, acquisitions and divestitures, and their effects on Ball’s operating results and business generally.

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PART II. OTHER INFORMATION

​

Item 1. Legal Proceedings

​

There were no events required to be reported under Item 1 for the three months ended March 31, 2024, except as discussed in Note 21 to the consolidated financial statements included within Part I, Item 1 of this report.

​

​

There were no changes required to be reported under Item 1A for the three months ended March 31, 2024; however, upon the sale of the aerospace business on February 16, 2024, the risk factors related to the aerospace business are no longer relevant.

​

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

​

The following table summarizes the company’s repurchases of its common stock during the first quarter of 2024.

​

​	​	​	​	​	​	​	​	​	​
Purchases of Securities
($ in millions)		Total Number of Shares Purchased (a)		Average Price Paid per Share			Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (a)		Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (b)
​	​	​	​	​	​	​	​	​	​
January 1 to January 31, 2024	​	—	​	$	—	​	—	​	19,596,607
February 1 to February 29, 2024	​	1,217,374	​	​	61.36	​	1,217,374	​	18,379,233
March 1 to March 31, 2024	​	1,847,248	​	​	65.93	​	1,847,248	​	16,531,985
Total	​	3,064,622	​	​	​	​	3,064,622	​	​

(a)	Includes any open market purchases (on a trade-date basis), share repurchase agreements and/or shares retained by the company to settle employee withholding tax liabilities.

(b)	As of March 31, 2024, the company had an ongoing repurchase program for which 50 million shares were authorized for repurchase by Ball’s Board of Directors. On April 24, 2024, Ball’s Board of Directors approved the repurchase by the company of up to a total of 40 million shares of its common stock. This repurchase authorization replaced all previous authorizations.

​

Item 3. Defaults Upon Senior Securities

​

There were no events required to be reported under Item 3 for the three months ended March 31, 2024.

​

Item 4. Mine Safety Disclosures

​

Not applicable.

​

​

There were no events required to be reported under Item 5 for the three months ended March 31, 2024.

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​	​	​
2.1	​	Stock Purchase Agreement, dated as of August 16, 2023, by and among Ball Corporation, BAE Systems, Inc., and, solely for the purposes set forth therein, BAE Systems plc
​	​	​
10.1	​	Retention Agreement, dated as of August 17, 2023, by and between David Kaufman and Ball Aerospace Technologies Corp.
​	​	​
22	​	Obligor group subsidiaries of Ball Corporation
​	​	​
31.1		Certification pursuant to Rule 13a-14(a) or Rule 15d-14(a) by Daniel W. Fisher, Chairman and Chief Executive Officer of Ball Corporation.
​	​	​
31.2	​	Certification pursuant to Rule 13a-14(a) or Rule 15d-14(a) by Howard H. Yu, Executive Vice President and Chief Financial Officer of Ball Corporation.
​	​	​
32.1	​	Certification pursuant to Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code by Daniel W. Fisher, Chairman and Chief Executive Officer of Ball Corporation.
​	​	​
32.2	​	Certification pursuant to Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code by Howard H. Yu, Executive Vice President and Chief Financial Officer of Ball Corporation.
​	​	​
99	​	Cautionary statement for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended.
​	​	​
101.INS	​	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
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101.SCH	​	Inline XBRL Taxonomy Extension Schema Document.
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101.CAL	​	Inline XBRL Taxonomy Extension Calculation Linkbase Document
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101.DEF	​	Inline XBRL Taxonomy Extension Definitions Linkbase Document
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101.LAB	​	Inline XBRL Taxonomy Extension Label Linkbase Document
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101.PRE	​	Inline XBRL Taxonomy Extension Presentation Linkbase Document
​	​	​
104	​	The cover page of the company’s quarterly report on Form 10-Q for the quarter ended March 31, 2024, formatted in Inline XBRL (contained in Exhibit 101), the: (i) Unaudited Condensed Consolidated Statement of Earnings, (ii) Unaudited Condensed Statement of Comprehensive Earnings (Loss), (iii) Unaudited Condensed Consolidated Balance Sheet, (iv) Unaudited Condensed Consolidated Statement of Cash Flows and (v) Notes to the Unaudited Condensed Consolidated Financial Statements.

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SIGNATURE

​

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

​

Ball Corporation
(Registrant)
​	​
​	​
By:	/s/ Howard H. Yu	​
​	Howard H. Yu	​
​	Executive Vice President and Chief Financial Officer	​
​	​	​
​	​	​
Date:	May 7, 2024	​

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