November 5, 2021 - 10-Q: Quarterly report pursuant to Section 13 or 15(d)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q


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

For the Quarterly Period Ended September 30, 2021


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

Commission file number 001-07349

BALL CORPORATION

State of Indiana

(State or other jurisdiction of incorporation or
organization)

35-0160610

(I.R.S. Employer Identification No.)

9200 West 108th Circle

Westminster, CO

(Address of registrant’s principal executive office)

80021

(Zip Code)

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

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

Class		Trading Symbol		Name of Exchange		Outstanding at October 31, 2021
Common Stock, without par value		BLL		NYSE		323,894,182 shares

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 ☐

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 ☐

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.


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

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. ☐

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

Table of Contents

Ball Corporation

QUARTERLY REPORT ON FORM 10-Q

For the period ended September 30, 2021

INDEX

		Page Number
PART I.	FINANCIAL INFORMATION	1
Item 1.	Financial Statements	1
	Unaudited Condensed Consolidated Statements of Earnings for the Three and Nine Months Ended September 30, 2021 and 2020	1
	Unaudited Condensed Consolidated Statements of Comprehensive Earnings (Loss) for the Three and Nine Months Ended September 30, 2021 and 2020	2
	Unaudited Condensed Consolidated Balance Sheets at September 30, 2021, and December 31, 2020	3
	Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2021 and 2020	4
	Notes to the Unaudited Condensed Consolidated Financial Statements	5
	Note 1, Basis of Presentation	5
	Note 2, Accounting Pronouncements	6
	Note 3, Business Segment Information	6
	Note 4, Acquisitions and Dispositions	8
	Note 5, Revenue from Contracts with Customers	8
	Note 6, Business Consolidation and Other Activities	9
	Note 7, Supplemental Cash Flow Statement Disclosures	11
	Note 8, Receivables, Net	12
	Note 9, Inventories, Net	12
	Note 10, Property, Plant and Equipment, Net	12
	Note 11, Goodwill	12
	Note 12, Intangible Assets, Net	13
	Note 13, Other Assets	13
	Note 14, Leases	13
	Note 15, Debt	14
	Note 16, Taxes on Income	15
	Note 17, Employee Benefit Obligations	15
	Note 18, Equity and Accumulated Other Comprehensive Earnings	17
	Note 19, Earnings and Dividends Per Share	19
	Note 20, Financial Instruments and Risk Management	19
	Note 21, Contingencies	24
	Note 22, Indemnifications and Guarantees	26
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	37
Item 4.	Controls and Procedures	38
PART II.	OTHER INFORMATION	38

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

BALL CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS


	Three Months Ended September 30,				Nine Months Ended September 30,
($ in millions, except per share amounts)	2021		2020		2021		2020

Net sales	$	3,553	$	3,093	$	10,137	$	8,679

Costs and expenses
Cost of sales (excluding depreciation and amortization)		(2,851)		(2,430)		(8,104)		(6,875)
Depreciation and amortization		(175)		(160)		(515)		(499)
Selling, general and administrative		(148)		(121)		(471)		(363)
Business consolidation and other activities		(141)		(8)		(136)		(235)
		(3,315)		(2,719)		(9,226)		(7,972)

Earnings before interest and taxes		238		374		911		707

Interest expense		(68)		(68)		(201)		(206)
Debt refinancing and other costs		(1)		(1)		(1)		(41)
Total interest expense		(69)		(69)		(202)		(247)

Earnings before taxes		169		305		709		460
Tax (provision) benefit		2		(73)		(146)		(92)
Equity in results of affiliates, net of tax		8		8		18		(13)
Net earnings		179		240		581		355
Net (earnings) loss attributable to noncontrolling interests		—		1		—		3
Net earnings attributable to Ball Corporation	$	179	$	241	$	581	$	358


Earnings per share:
Basic	$	0.55	$	0.74	$	1.78	$	1.10
Diluted	$	0.54	$	0.72	$	1.75	$	1.08


Weighted average shares outstanding: (000s)
Basic		325,876		326,549		327,097		325,965
Diluted		331,595		332,654		332,938		332,152

See accompanying notes to the unaudited condensed consolidated financial statements.

Table of Contents

BALL CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (LOSS)


	Three Months Ended September 30,				Nine Months Ended September 30,
($ in millions)	2021		2020		2021		2020

Net earnings	$	179	$	240	$	581	$	355

Other comprehensive earnings (loss):
Currency translation adjustment		(17)		(130)		19		(292)
Pension and other postretirement benefits		193		9		242		(2)
Derivatives designated as hedges		16		44		122		63
Total other comprehensive earnings (loss)		192		(77)		383		(231)
Income tax (provision) benefit		(48)		(10)		(82)		(14)
Total other comprehensive earnings (loss), net of tax		144		(87)		301		(245)

Total comprehensive earnings (loss)		323		153		882		110
Comprehensive (earnings) loss attributable to noncontrolling interests		—		1		—		3
Comprehensive earnings (loss) attributable to Ball Corporation	$	323	$	154	$	882	$	113

See accompanying notes to the unaudited condensed consolidated financial statements.

Table of Contents

BALL CORPORATION

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS


	September 30,		December 31,
($ in millions)	2021		2020

Assets
Current assets
Cash and cash equivalents	$	1,446	$	1,366
Receivables, net		2,489		1,738
Inventories, net		1,638		1,353
Other current assets		344		218
Total current assets		5,917		4,675
Noncurrent assets
Property, plant and equipment, net		6,170		5,351
Goodwill		4,407		4,484
Intangible assets, net		1,732		1,883
Other assets		1,906		1,859
Total assets	$	20,132	$	18,252

Liabilities and Equity
Current liabilities
Short-term debt and current portion of long-term debt	$	762	$	17
Accounts payable		4,210		3,430
Accrued employee costs		364		347
Other current liabilities		795		650
Total current liabilities		6,131		4,444
Noncurrent liabilities
Long-term debt		7,755		7,783
Employee benefit obligations		1,322		1,613
Deferred taxes		673		634
Other liabilities		486		441
Total liabilities		16,367		14,915

Equity
Common stock (680,667,421 shares issued - 2021; 679,524,325 shares issued - 2020)		1,209		1,167
Retained earnings		6,611		6,192
Accumulated other comprehensive earnings (loss)		(653)		(954)
Treasury stock, at cost (355,842,472 shares - 2021; 351,938,709 shares - 2020)		(3,463)		(3,130)
Total Ball Corporation shareholders' equity		3,704		3,275
Noncontrolling interests		61		62
Total equity		3,765		3,337
Total liabilities and equity	$	20,132	$	18,252

See accompanying notes to the unaudited condensed consolidated financial statements.

Table of Contents

BALL CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


	Nine Months Ended September 30,
($ in millions)	2021		2020

Cash Flows from Operating Activities
Net earnings	$	581	$	355
Adjustments to reconcile net earnings to cash provided by (used in) operating activities:
Depreciation and amortization		515		499
Business consolidation and other activities		136		235
Deferred tax provision (benefit)		34		(23)
Other, net		(142)		7
Changes in working capital components, net of dispositions		(248)		(728)
Cash provided by (used in) operating activities		876		345
Cash Flows from Investing Activities
Capital expenditures		(1,204)		(683)
Business acquisitions, net of cash acquired		—		(69)
Business dispositions, net of cash sold		111		(17)
Other, net		(11)		18
Cash provided by (used in) investing activities		(1,104)		(751)
Cash Flows from Financing Activities
Long-term borrowings		850		2,552
Repayments of long-term borrowings		(14)		(2,792)
Net change in short-term borrowings		10		(3)
Proceeds (payments) from issuances of common stock, net of shares used for taxes		31		(12)
Acquisitions of treasury stock		(356)		(57)
Common stock dividends		(164)		(149)
Other, net		(30)		(60)
Cash provided by (used in) financing activities		327		(521)

Effect of exchange rate changes on cash		(22)		(96)

Change in cash, cash equivalents and restricted cash		77		(1,023)
Cash, cash equivalents and restricted cash - beginning of period		1,381		1,806
Cash, cash equivalents and restricted cash - end of period	$	1,458	$	783

See accompanying notes to the unaudited condensed consolidated financial statements.

Table of Contents

Ball Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements

1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements (consolidated financial statements) include the accounts of Ball Corporation and its controlled affiliates, including its consolidated variable interest entities (collectively Ball, the company, we or our), and have been prepared by the company. Certain information and footnote disclosures, including critical and significant accounting policies normally included in consolidated financial statements prepared in accordance with generally accepted accounting principles, have been condensed or omitted for this quarterly presentation.

Results of operations for the periods shown are not necessarily indicative of results for the year, particularly in view of the seasonality in the packaging segments and the variability of contract sales in the company’s aerospace segment. These consolidated financial statements and accompanying notes should be read in conjunction with the consolidated financial statements and the notes thereto included in the company’s 2020 Annual Report on Form 10-K filed on February 17, 2021, pursuant to the Securities Exchange Act of 1934 for the fiscal year ended December 31, 2020 (annual report).

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) requires Ball’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the consolidated financial statements and reported amounts of sales and expenses during the reporting periods. These estimates are based on historical experience and various assumptions believed to be reasonable under the circumstances. Ball’s management evaluates these estimates on an ongoing basis and adjusts or revises the estimates as circumstances change. As future events and their impacts cannot be determined with precision, actual results may differ from these estimates. In the opinion of management, the consolidated financial statements reflect all adjustments that are of a normal recurring nature and are necessary to fairly state the results of the periods presented.

Certain prior year amounts have been reclassified in order to conform to the current year presentation.

Risks and Uncertainties – Novel Coronavirus (COVID-19)

The preparation of consolidated financial statements requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the reporting date and revenues and expenses during the reporting periods. These estimates represent management’s judgement about the outcome of future events. The current global business environment continues to be impacted directly and indirectly by the effects of the ongoing novel coronavirus (COVID-19) pandemic, and it is not possible to accurately estimate the impacts of COVID-19 and its emerging variants. However, Ball management has reviewed the estimates used in preparing the company’s consolidated financial statements and the following have a reasonably possible likelihood of being affected, to a material extent, by the direct and indirect impacts of COVID-19 in the near term.

●

Estimates regarding the future financial performance of the business used in the company’s impairment tests for goodwill, long-lived assets, equity method investments, recoverability of deferred tax assets and estimates regarding cash needs and associated indefinite reinvestment assertions;

●

Estimates of recoverability for customer receivables;

●

Estimates of net realizable value for inventory;

●

Estimates regarding the likelihood of forecasted transactions associated with hedge accounting positions at September 30, 2021, which could impact the company’s ability to satisfy hedge accounting requirements and result in the recognition of income and/or expenses.

Table of Contents

Ball Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements

In addition to the above potential impacts on the estimates used in preparing consolidated financial statements, COVID-19 has the potential to increase Ball’s vulnerabilities to near-term severe impacts related to certain concentrations in its business. In line with other companies in the packaging and aerospace industries, Ball makes the majority of its sales and significant purchases to or from a relatively small number of global, or large regional, customers and suppliers. Furthermore, Ball makes the majority of its sales from a small number of product lines. The potential of COVID-19 to affect a significant customer or supplier, or to affect demand for certain products to a significant degree, heightens the vulnerability of Ball to these concentrations.

2. Accounting Pronouncements

Recently Adopted Accounting Standards

Income Tax Simplification

In December 2019, new guidance was issued to simplify the accounting for income taxes. Ball adopted this guidance and all related amendments on January 1, 2021, applying either the retrospective basis, the modified retrospective method, or the prospective method where appropriate. The adoption of this guidance had no impact on the company’s consolidated financial statements.

3. Business Segment Information

Ball’s operations are organized and reviewed by management along its product lines and geographical areas and presented in the four reportable segments outlined below.

Beverage packaging, North and Central America: Consists of operations in the U.S., Canada and Mexico that manufacture and sell aluminum beverage containers throughout those countries.

Beverage packaging, EMEA: Consists of operations in numerous countries throughout Europe, including Russia, as well as Egypt and Turkey, that manufacture and sell aluminum beverage containers throughout those regions.

Beverage packaging, South America: Consists of operations in Brazil, Argentina, Paraguay and Chile that manufacture and sell aluminum beverage containers throughout most of South America.

Aerospace: Consists of operations that manufacture and sell aerospace and other related products and provide services used in the defense, civil space and commercial space industries.

As presented in the table below, Other consists of a non-reportable operating segment (beverage packaging, other) that manufactures and sells aluminum beverage containers in India, Saudi Arabia and throughout the Asia Pacific region; a non-reportable operating segment that manufactures and sells extruded aluminum aerosol containers and aluminum slugs (aerosol packaging) throughout North America, South America, Europe, and Asia; a non-reportable operating segment that manufactures and sells aluminum cups (aluminum cups); undistributed corporate expenses; intercompany eliminations and other business activities.

The accounting policies of the segments are the same as those used in the company’s consolidated financial statements as discussed in Note 1. The company also has investments in operations in Guatemala, Panama, the U.S. and Vietnam that are accounted for under the equity method of accounting and, accordingly, those results are not included in segment sales or earnings. In the third quarter of 2021, Ball sold its minority-owned investment in South Korea. Refer to Note 4 for additional details.

Table of Contents

Ball Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements

Summary of Business by Segment


	Three Months Ended September 30,				Nine Months Ended September 30,
($ in millions)	2021		2020		2021		2020

Net sales
Beverage packaging, North and Central America	$	1,519	$	1,327	$	4,339	$	3,775
Beverage packaging, EMEA		937		809		2,639		2,177
Beverage packaging, South America		462		432		1,401		1,166
Aerospace		498		451		1,381		1,321
Reportable segment sales		3,416		3,019		9,760		8,439
Other		137		74		377		240
Net sales	$	3,553	$	3,093	$	10,137	$	8,679

Comparable operating earnings
Beverage packaging, North and Central America	$	186	$	209	$	519	$	544
Beverage packaging, EMEA		125		117		349		248
Beverage packaging, South America		74		64		245		173
Aerospace		46		44		115		114
Reportable segment comparable operating earnings		431		434		1,228		1,079
Reconciling items
Other (a)		(14)		(15)		(67)		(26)
Business consolidation and other activities		(141)		(8)		(136)		(235)
Amortization of acquired intangibles		(38)		(37)		(114)		(111)
Earnings before interest and taxes		238		374		911		707
Interest expense		(68)		(68)		(201)		(206)
Debt refinancing and other costs		(1)		(1)		(1)		(41)
Total interest expense		(69)		(69)		(202)		(247)
Earnings before taxes	$	169	$	305	$	709	$	460

(a)	Includes undistributed corporate expenses, net, of $17 million and $13 million for the three months ended September 30, 2021 and 2020, respectively, and $71 million and $33 million for the nine months ended September 30, 2021 and 2020, respectively.

The company does not disclose total assets by segment as such information is not provided to the chief operating decision maker.

Table of Contents

Ball Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements

4. Acquisitions and Dispositions

South Korea Investment

In the third quarter of 2021, Ball sold its minority-owned investment in South Korea. Consideration for the transaction was cash of $120 million, of which $110 million has been received, and is presented in business dispositions in cash flows from investing activities in Ball’s unaudited condensed consolidated statements of cash flows. The remaining $10 million will be received on or before December 31, 2022, and is presented in other assets on Ball’s unaudited condensed consolidated balance sheets. In the second quarter of 2021, the company recorded a loss of $5 million related to the disposal, which is presented in business consolidation and other activities in the unaudited condensed consolidated statement of earnings. See Note 6 for further details.

Brazil Aluminum Aerosol Packaging Business

In the third quarter of 2020, the company acquired the entire share capital of Tubex Industria E Comercio de Embalagens Ltda, an aluminum aerosol packaging business with a plant in Itupeva, Brazil, for the purchase price of $80 million, subject to customary closing adjustments, including initial cash consideration of $69 million plus potential additional consideration not to exceed $30 million in total. The business is part of Ball’s aerosol packaging operating segment. The transaction broadens the geographic reach of Ball’s aluminum aerosol packaging business, serving the growing Brazilian personal care market.

5. Revenue from Contracts with Customers

Disaggregation of Sales

The company disaggregates net sales by reportable segments as disclosed in Note 3, and based on the timing of transfer of control for goods and services as explained below. The transfer of control for goods and services may occur at a point in time or over time.

The following table disaggregates the company’s net sales based on the timing of transfer of control:


	Three Months Ended September 30,						Nine Months Ended September 30,
($ in millions)	Point in Time		Over Time		Total		Point in Time		Over Time		Total

2021	$	603	$	2,950	$	3,553	$	1,837	$	8,300	$	10,137
2020		604		2,489		3,093		1,638		7,041		8,679

Contract Balances

The company did not have any contract assets at either September 30, 2021, or December 31, 2020. Unbilled receivables, which are not classified as contract assets, represent arrangements in which sales have been recorded prior to billing and right to payment is unconditional.

The opening and closing balances of the company’s current and noncurrent contract liabilities are as follows:


	Contract		Contract
	Liabilities		Liabilities
($ in millions)	(Current)		(Noncurrent)

Balance at December 31, 2020	$	108	$	29
Increase (decrease)		118		6
Balance at September 30, 2021	$	226	$	35

Table of Contents

Ball Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements

During the nine months ended September 30, 2021, total contract liabilities increased by $124 million, which is net of cash received of $503 million and amounts recognized as sales of $379 million, the majority of which related to current contract liabilities. The amount of sales recognized in the nine months ended September 30, 2021, which were included in the opening contract liabilities balances, was $108 million, all of which related to current contract liabilities. Current contract liabilities are classified within other current liabilities on the unaudited condensed consolidated balance sheet and noncurrent contract liabilities are classified within other liabilities.

The company also recognized net sales of $7 million and $9 million in the three months ended September 30, 2021 and 2020, respectively, and net sales of $18 million and $12 million in the nine months ended September 30, 2021 and 2020, respectively, from performance obligations satisfied (or partially satisfied) in prior periods. These sales amounts are the result of changes in the transaction price of the company’s contracts with customers.

Transaction Price Allocated to Remaining Performance Obligations

The table below discloses: (1) the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied (or partially unsatisfied) as of the end of the reporting period for contracts with an original duration of greater than one year, and (2) when the company expects to record sales on these multi-year contracts.


($ in millions)	Next Twelve Months		Thereafter		Total

Sales expected to be recognized on multi-year contracts in place as of September 30, 2021	$	1,398	$	1,290	$	2,688

6. Business Consolidation and Other Activities

The following is a summary of business consolidation and other activity (charges)/income included in the unaudited condensed consolidated statements of earnings:


	Three Months Ended September 30,				Nine Months Ended September 30,
($ in millions)	2021		2020		2021		2020

Beverage packaging, North and Central America	$	—	$	—	$	(1)	$	(4)
Beverage packaging, EMEA		(2)		(2)		(5)		(8)
Beverage packaging, South America		(9)		3		11		(1)
Other		(130)		(9)		(141)		(222)
	$	(141)	$	(8)	$	(136)	$	(235)

2021

Beverage Packaging, North and Central America

During the nine months ended September 30, 2021, the company recorded net charges of $1 million for individually insignificant activities in connection with previously announced closures of certain plants and other activities.

Beverage Packaging, EMEA

During the three and nine months ended September 30, 2021, the company recorded charges of $2 million and $5 million, respectively, for individually insignificant activities in connection with previously announced plant closures, restructuring and other activities.

Table of Contents

Ball Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements

Beverage Packaging, South America

During the nine months ended September 30, 2021, the company recorded a $22 million gain related to indirect tax gain contingencies in Brazil as these amounts are now estimable and realizable. The company’s Brazilian subsidiaries filed lawsuits in 2014 and 2015 to challenge the Brazilian tax authorities regarding the computation of certain indirect taxes, claiming amounts were overpaid to the tax authorities because the tax base included a “tax on tax” component. See Note 21 for further details. During the three and nine months ended September 30, 2021, the company recorded charges of $4 million in connection with previously announced plant closures. Additional charges in the three and nine months ended September 30, 2021, were $5 million and $7 million, respectively, for individually insignificant activities.

Other

During the three months ended September 30, 2021, the company recorded the following amounts:

●

A non-cash settlement loss of $130 million related to the purchase of non-participating group annuity contracts and lump-sum payments to settle the projected pension benefit obligations for certain of Ball’s U.S. defined benefit pension plans, which triggered settlement accounting. The settlement loss primarily reflects the third quarter recognition of unamortized actuarial losses in these U.S. pension plans.

During the nine months ended September 30, 2021, the company recorded the following amounts:

●

A loss of $5 million related to the sale of its minority-owned investment in South Korea. See Note 4 for further details.

●

Charges of $6 million for individually insignificant activities.

2020

Beverage Packaging, North and Central America

During the nine months ended September 30, 2020, the company recorded charges of $4 million for individually insignificant activities.

Beverage Packaging, EMEA

During the three and nine months ended September 30, 2020, the company recorded charges of $2 million and $8 million, respectively, for individually insignificant activities.

Beverage Packaging, South America

During the three and nine months ended September 30, 2020, the company recorded credits of $3 million and charges of $1 million, respectively, for individually insignificant activities.

Other

During the three months ended September 30, 2020, the company recorded the following amounts:

●

Settlement charges of $5 million associated with lump-sum payments made to settle the projected pension benefit obligations for certain of Ball’s U.S. defined benefit pension plans.

●

Charges of $4 million for individually insignificant activities.

Table of Contents

Ball Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements

During the nine months ended September 30, 2020, the company recorded the following amounts:

●

A non-cash settlement loss of $102 million related to the purchase of non-participating group annuity contracts and lump-sum payments to settle the projected pension benefit obligations for certain of Ball’s U.S. defined benefit pension plans, which triggered settlement accounting. The settlement loss primarily reflects the second quarter recognition of aggregate unamortized actuarial losses in these U.S. pension plans.

●

A non-cash impairment charge of $62 million related to the goodwill of the beverage packaging, other, operating segment. See Note 11 for further details.

●

A non-cash charge of $23 million resulting from the deterioration of China’s real estate market in 2020, which led the company to reduce the value of potential future consideration due as part of the 2019 sale of its China beverage packaging business.

●

Charges of $15 million resulting from an adjustment to the selling price of the company’s former steel food and aerosol business.

●

A credit of $11 million related to the reversal of reserves against working capital recorded in 2019 in the beverage packaging, other, segment, as previously at-risk balances were subsequently collected.

●

Charges of $6 million for long-term incentive and other compensation arrangements associated with the 2016 Rexam acquisition.

●

Charges of $25 million for individually insignificant activities.

7.	Supplemental Cash Flow Statement Disclosures


	September 30,
($ in millions)	2021		2020

Beginning of period:
Cash and cash equivalents	$	1,366	$	1,798
Current restricted cash (included in other current assets)		15		8
Total cash, cash equivalents and restricted cash	$	1,381	$	1,806

End of period:
Cash and cash equivalents	$	1,446	$	771
Current restricted cash (included in other current assets)		12		12
Total cash, cash equivalents and restricted cash	$	1,458	$	783

The company’s restricted cash is primarily related to receivables factoring programs and represents amounts collected from customers that have not yet been remitted to the banks as of the end of the reporting period.

Noncash investing activities include the acquisition of property, plant and equipment (PP&E) for which payment has not been made. These noncash capital expenditures are excluded from the statement of cash flows. The PP&E acquired but not yet paid for amounted to approximately $550 million at September 30, 2021, and $409 million at December 31, 2020.

8. Receivables, Net


	September 30,		December 31,
($ in millions)	2021		2020

Trade accounts receivable	$	1,282	$	825
Unbilled receivables		702		528
Less: Allowance for doubtful accounts		(8)		(9)
Net trade accounts receivable		1,976		1,344
Other receivables		513		394
	$	2,489	$	1,738

Table of Contents

Ball Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements

The company has entered into several regional committed and uncommitted accounts receivable factoring programs with various financial institutions for certain of its receivables. The programs are accounted for as true sales of the receivables, without recourse to Ball, and had combined limits of approximately $1.7 billion at September 30, 2021, and $1.6 billion at December 31, 2020. A total of $430 million and $232 million were available for sale under these programs as of September 30, 2021, and December 31, 2020, respectively.

Other receivables include income and sales tax receivables and other miscellaneous receivables.

9. Inventories, Net


	September 30,		December 31,
($ in millions)	2021		2020

Raw materials and supplies	$	1,012	$	889
Work-in-process and finished goods		716		557
Less: Inventory reserves		(90)		(93)
	$	1,638	$	1,353

10. Property, Plant and Equipment, Net


	September 30,		December 31,
($ in millions)	2021		2020

Land	$	165	$	163
Buildings		1,944		1,653
Machinery and equipment		6,736		6,214
Construction-in-progress		1,130		883
		9,975		8,913
Accumulated depreciation		(3,805)		(3,562)
	$	6,170	$	5,351

Depreciation expense amounted to $130 million and $115 million for the three months ended September 30, 2021 and 2020, respectively, and $380 million and $365 million for the nine months ended September 30, 2021 and 2020, respectively.

11. Goodwill

Form: 10-Q

Documents