Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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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. With a growth mindset and by pursuing operational excellence, we lean on our competitive strengths to reach our financial goals. We are focused on maintaining our strong financial position by listening to and partnering with our global customers, delivering operational efficiencies and an innovative product portfolio from our best-in-class manufacturing facilities and returning value to shareholders via share repurchases and dividends. In the aluminum packaging industry, sales and earnings can be increased by reducing costs, increasing prices, developing new products, expanding volume 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 packaging industry is growing and is 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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Geopolitical Conflicts

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Ball is monitoring current geopolitical conflicts across the globe and may experience increased costs for inputs such as energy and transportation, as well as aluminum, due to the negative impact on the global economy and reduction in supply. Ongoing conflicts have the potential to impact Ball across its global business, and it is not possible to accurately predict all future impacts. As such, current conflicts and the resulting effects have the potential to materially impact the company’s results of operations.

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Consolidated Sales and Earnings

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​	​	​	​	​	​	​	​	​
​	​	Three Months Ended March 31,					​	​
($ in millions)	​ ​ ​	2026		​ ​ ​	2025		​	​ ​ ​
​	​	​	​	​	​	​	​	​
Net sales	​	$	3,603	​	$	3,097	​	​
Net earnings attributable to Ball Corporation	​	​	205	​	​	179	​	​
Net earnings attributable to Ball Corporation as a % of net sales	​	​	6	%	​	6	%	​

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Sales in the three months ended March 31, 2026, increased $506 million compared to the same period in 2025 primarily due to increases of $345 million from price/mix, mainly from higher aluminum prices, $33 million from higher volume and $107 million from currency translation.

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Net earnings attributable to Ball Corporation for the three months ended March 31, 2026, increased $26 million compared to the same period in 2025 primarily due to increases from the results of the reportable segments discussed below.

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Cost of Sales (Excluding Depreciation and Amortization)

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Cost of sales, excluding depreciation and amortization, was $2,957 million and $2,493 million for the three months ended March 31, 2026, and 2025, respectively. These amounts represented 82 percent and 80 percent of consolidated net sales for the three months ended March 31, 2026, and 2025, respectively. The increase for the three months ended March 31, 2026, was primarily due to higher raw materials costs of $357 million, driven by higher aluminum prices and higher volumes.

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Depreciation and Amortization

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Depreciation and amortization expense was $159 million and $150 million for the three months ended March 31, 2026, and 2025, respectively. These amounts represented 4 percent and 5 percent of consolidated net sales for the three months ended March 31, 2026, and 2025, respectively.

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Selling, General and Administrative

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Selling, general and administrative was $150 million and $149 million for the three months ended March 31, 2026, and 2025, respectively. These amounts represented 4 percent and 5 percent of consolidated net sales for the three months ended March 31, 2026, and 2025, respectively.

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Business Consolidation and Other Activities

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Business consolidation and other activities resulted in charges of $11 million and $13 million for the three months ended March 31, 2026, and 2025, respectively. The 2026 amounts include costs for previously announced facility closures. The 2025 amount includes a loss related to the aluminum cups business transaction and costs for previously announced facility closures. Further details regarding business consolidation and other activities are provided in Note 6.

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Interest Income

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Interest income was $10 million and $7 million for the three months ended March 31, 2026, and 2025, respectively.

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Interest Expense

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Interest expense was $78 million and $70 million for the three months ended March 31, 2026, and 2025, respectively. Interest expense as a percentage of average borrowings decreased approximately 40 basis points from 4.4 percent for the three months ended March 31, 2025, to 4.0 percent for the three months ended March 31, 2026. The increase in interest expense for the three months ended March 31, 2026, was primarily driven by a higher amount of weighted average principal outstanding during the year, partially offset by lower weighted average interest rates on outstanding debt during the year.

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Income Taxes

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The effective tax rate for the three months ended March 31, 2026, was 24.0 percent, compared to 23.1 percent for the same period in 2025. The increase of 0.9 percentage points for the three months ended March 31, 2026, was due to increased non-U.S. rate differences, U.S. tax on foreign items net of credits and effects of share-based compensation. This was partially offset by the effects of U.S. permanent differences. 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. As of first quarter of 2026, the manufacturing facilities in the beverage packaging, other non-reportable segment are now included in the beverage packaging, EMEA segment. In addition, the company made changes to its measure of profitability, comparable segment operating earnings, which better aligns to how the CODM assesses segment performance and resource allocation. The company’s segment results and disclosures for the three months ended March 31, 2025, have been retrospectively recast to conform to current year presentation. See Note 3 for further details on the changes to segment results.

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Beverage Packaging, North and Central America

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​	​	​	​	​	​	​	​	​	​
​	​	​	Three Months Ended March 31,					​	​
($ in millions)	​ ​ ​	​	2026		​ ​ ​	2025		​ ​ ​	​
​	​	​	​	​	​	​	​	​	​
Net sales	​	​	$	1,776	​	$	1,463	​	​
Comparable operating earnings	​	​	​	205	​	​	200	​	​
Comparable operating earnings as a % of segment net sales	​	​	​	12	%	​	14	%	​

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Ball acquired an aluminum beverage can manufacturing facility in Winter Haven, Florida, in the first quarter of 2025 as part of its acquisition of Florida Can Manufacturing. See Note 4 for further details on the acquisition.

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Segment sales for the three months ended March 31, 2026, were $313 million higher compared to the same period in 2025. The increase for the three months ended March 31, 2026, was primarily due to increases of $271 million from price/mix, mainly from higher aluminum prices, and $42 million from higher volume.

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Comparable operating earnings for the three months ended March 31, 2026, were $5 million higher compared to the same period in 2025. The increase for the three months ended March 31, 2026, was primarily due to increases of $29 million from higher volume and $26 million from price/mix, partially offset by $49 million from higher costs.

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Beverage Packaging, EMEA

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​	​	​	​	​	​	​	​	​
​	​	Three Months Ended March 31,					​	​
($ in millions)	​ ​ ​	2026		​ ​ ​	2025		​ ​ ​	​
​	​	​	​	​	​	​	​	​
Net sales	​	$	1,111	​	$	958	​	​
Comparable operating earnings	​	​	134	​	​	111	​	​
Comparable operating earnings as a % of segment net sales	​	​	12	%	​	12	%	​

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Ball acquired an 80 percent capital share of Benepack’s European beverage can manufacturing business from ORG Technology Co. Ltd. (ORG), in the first quarter of 2026. See Note 4 for further details on the acquisition.

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Segment sales for the three months ended March 31, 2026, were $153 million higher compared to the same period in 2025. The increase for the three months ended March 31, 2026, was primarily due to increases of $32 million from higher volume and $92 million from currency translation.

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Comparable operating earnings for the three months ended March 31, 2026, were $23 million higher compared to the same period in 2025. The increase for the three months ended March 31, 2026, was primarily due to higher volume and currency translation.

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Beverage Packaging, South America

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​	​	​	​	​	​	​	​	​
​	​	Three Months Ended March 31,					​	​
($ in millions)	​ ​ ​	2026		​ ​ ​	2025		​ ​ ​	​
​	​	​	​	​	​	​	​	​
Net sales	​	$	585	​	$	544	​	​
Comparable operating earnings	​	​	67	​	​	67	​	​
Comparable operating earnings as a % of segment net sales	​	​	11	%	​	12	%	​

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Segment sales for the three months ended March 31, 2026, were $41 million higher compared to the same period in 2025. The increase for the three months ended March 31, 2026, was primarily due to higher price/mix of $55 million, mainly from higher aluminum prices, partially offset by a decrease from lower volume.

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Comparable operating earnings for the three months ended March 31, 2026, were flat when compared to the same period in 2025. This was primarily due to an increase in price/mix, offset by decreases from higher costs and lower volume.

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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 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. We have limited near-term debt maturities and our senior credit facilities are in place until 2030. The following table summarizes our cash flows:

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​	​	​	​	​	​	​	​
​	​	Three Months Ended March 31,					​
($ in millions)	​ ​ ​	2026		​ ​ ​	2025		​ ​ ​
​	​	​	​	​	​	​	​
Cash flows provided by (used in) operating activities	​	$	(777)	​	$	(665)	​
Cash flows provided by (used in) investing activities	​	​	(306)	​	​	(207)	​
Cash flows provided by (used in) financing activities	​	​	605	​	​	396	​

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Cash flows used in operating activities were $777 million in 2026, primarily driven by working capital outflow of $1.15 billion, partially offset by earnings from continuing operations of $205 million and a reconciling adjustment to operating cash flow of $159 for depreciation and amortization. In a dynamic economic 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, 2026, a change of one day in days sales outstanding will impact cash flows provided by (used in) operating activities by $40 million, a change of one day in days payable outstanding will impact cash flows provided by (used in) operating activities by $33 million and a change of one day in days inventory on hand will impact cash flows provided by (used in) operating activities by $33 million.

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Cash flows used in investing activities were $306 million in 2026, primarily driven by capital expenditures of $161 million, $75 million of cash consideration, net of cash acquired, for the acquisition of Benepack’s European beverage can manufacturing business and $52 million for the purchase of notes linked to the stock market performance of ORG. See Note 4 for further details on the acquisition. See Note 13 for further details on the equity-linked notes.

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Cash flows provided by financing activities were $605 million in 2026, primarily driven by a net inflow from long-term and short-term borrowing of $650 million. See Note 15 for further details on the company’s borrowings and additional amounts available.

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We have entered into several regional 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 $1.77 billion and $1.82 billion at March 31, 2026, and December 31, 2025, respectively. A total of $308 million and $364 million were available for sale under these programs as of March 31, 2026, and December 31, 2025, respectively. The company has recorded expense related to its factoring programs of $10 million for the three months ended March 31, 2026, and 2025, respectively, and has presented these amounts in selling, general and administrative in its unaudited condensed consolidated statements of earnings.

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The amount of obligations outstanding that the company confirmed as valid to the financial institutions under the company's regional supplier finance programs was $229 million and $424 million at March 31, 2026, and December 31, 2025, respectively. These amounts are classified within accounts payable on the unaudited condensed consolidated balance sheets, and the associated payments are reflected in the cash flows from operating activities section of the unaudited condensed consolidated statements of cash flows.

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Contributions to the company’s defined benefit pension plans were $7 million in the first three months of 2026 and 2025, and such contributions are expected to be approximately $29 million for the full year of 2026. 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 anticipates a “buy-out” for its U.K. defined benefit pension plan will occur within the second half of 2026, which will trigger a pension settlement that will result in all plan balances, including accumulated pension components within other comprehensive income, being charged to expense as a noncash settlement charge. As of March 31, 2026, accumulated other comprehensive income included $463 million of unrecognized pension losses, expected to be recognized upon settlement.

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The company expects that 2026 capital expenditures for property, plant and equipment will likely be in the range of $600 million. Approximately $280 million of capital expenditures for property, plant and equipment were contractually committed as of March 31, 2026, and the company intends to return approximately $210 million to shareholders in the form of dividends for the full year of 2026, inclusive of the cash dividend of 20 cents per share, payable June 15, 2026, to shareholders of record as of June 1, 2026.

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As of March 31, 2026, approximately $622 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. 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 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.

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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.

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Share Repurchases

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The company had immaterial share repurchase activity during the three months ended March 31, 2026, compared to $555 million of repurchases during the same period of 2025. The company plans to continue capital return to shareholders via an estimated $600 million in share repurchases in 2026.

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On January 29, 2025, the Board of Directors approved the repurchase by the company of up to $4.00 billion in shares of its common stock through the end of 2027. This repurchase authorization replaced all previous authorizations. At March 31, 2026, $2.93 billion remains available to be repurchased.

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Debt Facilities and Other Activities

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Given our cash flow projections and unused credit facilities that are available until November 2030, our liquidity is expected to meet our ongoing cash and debt service requirements. Total debt of $7.86 billion and $7.01 billion was outstanding at March 31, 2026, and December 31, 2025, respectively.

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The company’s senior credit facilities include a $1.50 billion term loan and long-term multi-currency revolving facilities that mature in November 2030, which provide the company with up to U.S. dollar equivalent of $2.00 billion.

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At March 31, 2026, approximately $1.24 billion was available under the company’s long-term, multi-currency committed revolving credit facilities. The company also had approximately $940 million of short-term uncommitted credit facilities available at March 31, 2026, of which $139 million was outstanding and due on demand. At December 31, 2025, the company had $19 million outstanding under short-term uncommitted credit facilities.

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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.

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We were in compliance with the leverage ratio requirement at March 31, 2026, 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 dividend payments, share repurchases, 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 March 31, 2026. As of March 31, 2026, the company could borrow an additional $1.93 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.

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Benepack

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In January 2026, the company acquired an 80 percent capital share of Benepack’s European beverage can manufacturing business from ORG Technology Co. Ltd. The business includes two manufacturing facilities, one in Belgium and one in Hungary, and are included in Ball’s beverage packaging, EMEA, segment. See Note 4 for further details.

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CONTINGENCIES, INDEMNIFICATIONS AND GUARANTEES

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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.

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Guaranteed Securities

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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.

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The following summarized financial information relates to the obligor group as of March 31, 2026, and December 31, 2025. 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.

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​	​	​	​
​	​	Three Months Ended
($ in millions)	​	March 31, 2026
​	​	​	​
Net sales	​	$	1,751
Gross profit (a)	​	​	208
Net earnings	​	​	112
Net earnings attributable to Ball Corporation	​	​	112

(a)	Gross profit is shown after depreciation and amortization related to cost of sales of $41 million for the three months ended March 31, 2026.

​	​	​	​	​	​	​
​	​	March 31,		​	December 31,
($ in millions)	​ ​ ​	2026		​ ​ ​	2025
​	​	​	​	​	​	​
Current assets	​	$	2,637	​	$	2,222
Noncurrent assets	​	​	13,630	​	​	13,453
Current liabilities	​	​	3,778	​	​	3,399
Noncurrent liabilities	​	​	12,843	​	​	12,761

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Included in the amounts disclosed in the table above, at March 31, 2026, and December 31, 2025, the obligor group held receivables due from other subsidiary companies of $795 million and $503 million, respectively, long-term notes receivable due from other subsidiary companies of $10.07 billion and $9.93 billion, respectively, payables due to other subsidiary companies of $1.09 billion, and long-term notes payable due to other subsidiary companies of $5.06 billion and $4.97 billion, respectively.

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For the three months ended March 31, 2026, the obligor group recorded the following transactions with other subsidiary companies: sales to them of $183 million, net credits from them of $13 million, and net interest income from them of $70 million.

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

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