Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 30, 2018 | |
Document and Entity Information | ||
Entity Registrant Name | BALL CORP | |
Entity Central Index Key | 9,389 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 349,240,025 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS shares in Thousands, $ in Millions | May 16, 2017 | Mar. 31, 2018USD ($)$ / sharesshares | Mar. 31, 2017USD ($)$ / sharesshares |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS | |||
Net sales | $ 2,785 | $ 2,473 | |
Costs and expenses | |||
Cost of sales (excluding depreciation and amortization) | (2,237) | (1,975) | |
Depreciation and amortization | (180) | (148) | |
Selling, general and administrative | (112) | (143) | |
Business consolidation and other activities | (30) | (55) | |
Total costs and expenses | (2,559) | (2,321) | |
Earnings before interest and taxes | 226 | 152 | |
Interest expense | (73) | (68) | |
Debt refinancing and other costs | (1) | ||
Total interest expense | (74) | (68) | |
Earnings before taxes | 152 | 84 | |
Tax (provision) benefit | (34) | (22) | |
Equity in results of affiliates, net of tax | 7 | 8 | |
Net earnings | 125 | 70 | |
Net earnings attributable to noncontrolling interests | (2) | ||
Net earnings attributable to Ball Corporation | $ 125 | $ 68 | |
Earnings per share: | |||
Basic (in dollars per share) | $ / shares | $ 0.36 | $ 0.19 | |
Diluted (in dollars per share) | $ / shares | $ 0.35 | $ 0.19 | |
Weighted average shares outstanding (000s): | |||
Basic (in shares) | shares | 350,215 | 350,048 | |
Diluted (in shares) | shares | 357,552 | 357,934 | |
Cash dividends declared and paid, per share (in dollars per share) | $ / shares | $ 0.10 | $ 0.065 | |
Stock split ratio | 2 |
UNAUDITED CONDENSED CONSOLIDAT3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (LOSS) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (LOSS) | ||
Net earnings | $ 125 | $ 70 |
Other comprehensive earnings (loss): | ||
Foreign currency translation adjustment | 11 | 69 |
Pension and other postretirement benefits | 16 | 6 |
Effective financial derivatives | (52) | 64 |
Total other comprehensive earnings (loss) | (25) | 139 |
Income tax (provision) benefit | 8 | (11) |
Total other comprehensive earnings (loss), net of tax | (17) | 128 |
Total comprehensive earnings | 108 | 198 |
Comprehensive (earnings) loss attributable to noncontrolling interests | (2) | |
Comprehensive earnings (loss) attributable to Ball Corporation | $ 108 | $ 196 |
UNAUDITED CONDENSED CONSOLIDAT4
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS $ in Millions | May 16, 2017 | Mar. 31, 2018USD ($) | Jan. 02, 2018USD ($) | Dec. 31, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Current assets | ||||||
Cash and cash equivalents | $ 477 | $ 448 | $ 458 | $ 597 | ||
Receivables, net | 2,090 | $ 1,941 | 1,634 | |||
Inventories, net | 1,447 | 1,285 | 1,526 | |||
Other current assets | 146 | 146 | 150 | |||
Total current assets | 4,160 | 3,758 | ||||
Noncurrent assets | ||||||
Property, plant and equipment, net | 4,727 | 4,610 | ||||
Goodwill | 4,970 | 4,933 | ||||
Intangible assets, net | 2,432 | 2,462 | ||||
Other assets | 1,442 | 1,406 | ||||
Total assets | 17,731 | 17,169 | ||||
Current liabilities | ||||||
Short-term debt and current portion of long-term debt | 337 | 453 | ||||
Accounts payable | 2,822 | 2,762 | ||||
Accrued employee costs | 221 | 352 | ||||
Other current liabilities | 525 | 557 | 540 | |||
Total current liabilities | 3,905 | 4,107 | ||||
Noncurrent liabilities | ||||||
Long-term debt | 7,131 | 6,518 | ||||
Employee benefit obligations | 1,484 | 1,463 | ||||
Deferred taxes | 690 | 702 | 695 | |||
Other liabilities | 383 | 340 | ||||
Total liabilities | 13,593 | 13,123 | ||||
Shareholders' equity | ||||||
Common stock (671,611,572 shares issued - 2018; 670,576,215 shares issued - 2017) | 1,100 | 1,084 | ||||
Retained earnings | 5,114 | 5,024 | 4,987 | |||
Accumulated other comprehensive earnings (loss) | (673) | $ (655) | (656) | |||
Treasury stock, at cost (321,435,190 shares - 2018; 320,694,598 shares - 2017) | (1,508) | (1,474) | ||||
Total Ball Corporation shareholders' equity | 4,033 | 3,941 | ||||
Noncontrolling interests | 105 | 105 | ||||
Total shareholders' equity | 4,138 | 4,046 | ||||
Total liabilities and shareholders' equity | $ 17,731 | $ 17,169 | ||||
Stock split ratio | 2 |
UNAUDITED CONDENSED CONSOLIDAT5
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares | Mar. 31, 2018 | Dec. 31, 2017 |
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Common stock, shares issued | 671,611,572 | 670,576,215 |
Treasury stock, at cost | 321,435,190 | 320,694,598 |
UNAUDITED CONDENSED CONSOLIDAT6
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash Flows from Operating Activities | ||
Net earnings | $ 125 | $ 70 |
Adjustments to reconcile net earnings to cash provided by (used in) continuing operating activities: | ||
Depreciation and amortization | 180 | 148 |
Business consolidation and other activities | 30 | 55 |
Deferred tax provision (benefit) | 3 | 2 |
Other, net | 8 | 4 |
Changes in working capital components, net of dispositions (a) | (420) | (680) |
Total cash provided by (used in) operating activities | (74) | (401) |
Cash Flows from Investing Activities | ||
Capital expenditures | (242) | (125) |
Business dispositions, net of cash sold | (45) | |
Business dispositions, net of cash sold | 31 | |
Other, net | 3 | 3 |
Cash provided by (used in) investing activities | (284) | (91) |
Cash Flows from Financing Activities | ||
Long-term borrowings | 1,162 | 185 |
Repayments of long-term borrowings | (683) | (50) |
Net change in short-term borrowings | (14) | 273 |
Proceeds from issuances of common stock | (1) | |
Acquisitions of treasury stock | (35) | (3) |
Common dividends | (35) | (23) |
Other, net | (11) | (1) |
Cash provided by (used in) financing activities | 384 | 380 |
Effect of exchange rate changes on cash | 1 | (30) |
Cash and cash equivalents – beginning of year | 448 | 597 |
Cash and cash equivalents – end of year | 477 | 458 |
Change in cash, cash equivalents and restricted cash | 27 | (142) |
Cash, cash equivalents and restricted cash - beginning of period | 459 | 607 |
Cash, cash equivalents and restricted cash - end of period | $ 486 | $ 465 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2018 | |
Basis of Presentation | |
Basis of Presentation | 1. Basis of Presentation The accompanying unaudited condensed 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 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 unaudited condensed 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 Current Report on Form 8-K filed on March 6, 2018, pursuant to the Securities Exchange Act of 1934 for the fiscal year ended December 31, 2017 (annual report). The preparation of 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 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 financial statements reflect all adjustments 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. |
Accounting Pronouncements
Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2018 | |
New Accounting Pronouncements | |
Accounting Pronouncements | 2. Accounting Pronouncements Recently Adopted Accounting Standards Revenue from Contracts with Customers On January 1, 2018, Ball adopted Accounting Standard Codification 606, “Revenue from Contracts with Customers,” and all related amendments (collectively, the new revenue standard) applying the modified retrospective method to all contracts that were not completed as of January 1, 2018. The cumulative effect of initially applying the new revenue standard was recognized as an adjustment to the retained earnings balance as of January 1, 2018. Comparative periods have not been restated and continue to be reported under the accounting standards in effect for those periods. The cumulative effect of the changes made to the consolidated January 1, 2018, balance sheet for the adoption of the new revenue standard is as follows: ($ in millions) Balance at December 31, 2017 Adjustments Due to Adoption Balance at January 1, Assets Receivables, net $ 1,634 $ 307 $ 1,941 Inventories, net 1,526 (241) 1,285 Other current assets 150 (4) 146 Liabilities Other current liabilities 540 17 557 Deferred taxes 695 7 702 Shareholders' equity Retained earnings 4,987 37 5,024 Accumulated other comprehensive earnings (loss) (656) 1 (655) In accordance with the disclosure requirements of the new revenue standard, the impact of adoption on our consolidated statement of earnings and balance sheet was as follows: Three Months Ended March 31, 2018 ($ in millions, except per share amounts) As Reported Balances Without Adoption Effect of Net sales $ 2,785 $ 2,752 $ 33 Cost of sales (excluding depreciation and amortization) (2,237) (2,206) (31) Earnings before interest and taxes 226 224 2 Tax (provision) benefit (34) (34) — Net earnings attributable to Ball Corporation 125 123 2 Basic earnings per share 0.36 0.35 0.01 Diluted earnings per share 0.35 0.34 0.01 March 31, 2018 ($ in millions) As Reported Balances Without Adoption Effect of Change Assets Receivables, net $ 2,090 $ 1,745 $ 345 Inventories, net 1,447 1,720 (273) Other current assets 146 150 (4) Liabilities Other current liabilities 525 504 21 Deferred taxes 690 683 7 Shareholders' equity Retained earnings 5,114 5,075 39 Accumulated other comprehensive earnings (loss) (673) (674) 1 The following summarizes the significant changes to the company’s unaudited condensed consolidated statement of earnings and consolidated balance sheet as a result of the new revenue standard adopted on January 1, 2018, compared to if the company had continued to recognize sales under the previous revenue recognition guidance: · For the metal beverage packaging segments and, to a lesser extent, in our food and aerosol packaging segment, the new revenue standard accelerated the recognition of certain sales to be over time such that a portion of sales was recognized prior to shipment or delivery of goods. The accelerated recognition of sales caused the company’s inventory to decrease with an offsetting increase to unbilled receivables to the extent the amounts had not yet been invoiced to the customer and right to payment was unconditional. · For the aerospace segment, sales from the majority of the company’s contracts continue to be recognized over time under the “cost-to-cost” method based on the continuous transfer of control to the customer, which is consistent with how sales were recognized under previous revenue recognition guidance. Therefore, no cumulative adjustment was required to be made upon adoption. · Ball recognized a contract liability when the customer’s payment, or Ball’s unconditional right to that consideration, preceded the company’s performance. Share-Based Compensation In May 2017, amendments to existing accounting guidance were issued to provide clarity and reduce diversity in practice, cost and complexity when applying stock compensation accounting guidance regarding modifications to the terms or conditions of a share-based payment award. The amendments specify that all changes to the terms and conditions of a share-based payment award will require an entity to apply modification accounting unless all of the following are met: (1) the fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified, (2) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified and (3) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The guidance was applied prospectively on January 1, 2018, and it did not have an impact on the company’s unaudited condensed consolidated financial statements. Pension and Postretirement Benefit Costs In March 2017, amendments to existing accounting guidance were issued to change the presentation of net periodic pension cost and net periodic postretirement benefit cost. Employers are required to report the service cost component in the same line item as other compensation costs arising from services rendered by the associated employees during the period. The other components of net periodic pension cost and net periodic postretirement benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. The amendments also permit only the service cost component of net benefit cost to be eligible for capitalization. This guidance was adopted by the company on January 1, 2018, and the capitalization of the service cost component was applied on a prospective basis. Curtailment and settlement losses are reported by the company in business consolidation and other activities. All other non-service components are immaterial and will be presented in selling, general and administrative (SG&A) expenses beginning in 2018. These non-service costs were reported in both cost of sales and SG&A in prior periods; however, due to immateriality in all prior periods presented, no retrospective adjustments were considered necessary. Such costs were $6 million for the first quarter of 2017 and $21 million for the full year 2017. Sales of Nonfinancial Assets In February 2017, amendments to existing accounting guidance were issued to clarify the scope and to add guidance for partial sales of nonfinancial assets. The guidance requires that all entities account for the derecognition of a business in accordance with guidance for consolidation, including instances in which the business is considered to be in substance real estate. This guidance was applied on January 1, 2018, using a modified retrospective approach and did not have a material impact on the company’s unaudited condensed consolidated financial statements. Definition of a Business In January 2017, amendments to existing accounting guidance were issued to further clarify the definition of a business in determining whether or not a company has acquired or sold a business. The amendments provide a screen to determine when an integrated set of assets and activities (collectively referred to as a “set”) is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. If the screen is not met, the amendments in this update (1) require that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output and (2) remove the evaluation of whether a market participant could replace missing elements. The amendments also narrow the definition of the term “output” so that the term is consistent with how outputs are described in the new guidance for revenue recognition. The guidance was applied prospectively for Ball on January 1, 2018, and did not have an impact on the company’s unaudited condensed consolidated financial statements. Statement of Cash Flows In November 2016, accounting guidance was issued requiring the statement of cash flows to reconcile the change in the total of cash, cash equivalents and restricted cash or restricted cash equivalents. This guidance was applied retrospectively on January 1, 2018, and the impact on the 2017 statement of cash flow was not material. The impact on the 2016 statement of cash flows was material due to approximately $2 billion of restricted cash held by the company at December 2015, in an acquisition escrow account. In July 2016, the funds in the escrow account were used to pay a portion of the cash component of the acquisition price of Rexam. The impact on the statement of cash flows for the three months ended March 31, 2017, was a $3 million reduction in cash flows from operating activities. In August 2016, accounting guidance was issued addressing the following eight specific cash flow issues: · Debt prepayment or debt extinguishment costs · Settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing · Contingent consideration payments made after a business combination · Proceeds from the settlement of insurance claims · Proceeds from the settlement of corporate-owned life insurance policies (including bank-owned life insurance policies) · Distributions received from equity method investees · Beneficial interests in securitization transactions · Separately identifiable cash flows and, for cash flows with aspects of more than one class which are not separately identifiable, classification based on the predominant source for those cash flows This guidance was applied retrospectively on January 1, 2018, and did not have a material impact on the company’s unaudited condensed consolidated statement of cash flows. Intra-Entity Transfers In October 2016, amendments to existing accounting guidance were issued that require entities to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs, as opposed to when the asset is sold to an unrelated third party. The amendments also eliminate the exception for an intra-entity transfer of an asset other than inventory. This guidance was applied on a modified retrospective basis on January 1, 2018, and did not have a material impact on the company’s unaudited condensed consolidated financial statements. Financial Assets and Liabilities In January 2016, accounting guidance was issued on the classification and measurement of financial assets and liabilities (equity securities and financial liabilities) under the fair value option and the presentation and disclosure requirements for financial instruments. Subsequent guidance was issued in February 2018 to clarify certain aspects of the guidance issued in January 2016. The guidance modifies how entities measure equity investments and present changes in the fair value of financial liabilities. Under the new guidance, entities have to measure equity investments that do not result in consolidation and are not accounted for under the equity method at fair value and recognize any related changes in fair value in net income unless the investments qualify for the new practicality exception. An exception applies to those equity investments that do not have a readily determinable fair value and do not qualify for the practical expedient to estimate fair value under the guidance and, as such, these investments may be measured at cost. The guidance was applied on January 1, 2018, and did not have a material impact on the company’s unaudited condensed consolidated financial statements . New Accounting Guidance Stranded Tax Effects In February 2018, accounting guidance was issued to permit the reclassification from accumulated other comprehensive income to retained earnings of stranded tax effects resulting from the U.S. Tax Cuts and Jobs Act signed into law in December 2017. The guidance is effective for Ball on January 1, 2019, and the company is currently assessing whether or not to early adopt the new guidance. Financial Assets In June 2016, amendments to existing guidance were issued requiring financial assets or a group of financial assets measured at amortized cost basis to be presented at the net amount expected to be collected when finalized. The allowance for credit losses is a valuation account that will be deducted from the amortized cost basis of the financial asset to present the net carrying value at the amount expected to be collected on the financial asset. This guidance affects loans, debt securities, trade receivables, net investments in leases, off-balance-sheet credit exposures, reinsurance receivables and any other financial assets not excluded from the scope that have the contractual right to receive cash. The guidance will be effective on January 1, 2020. The company is currently assessing the impact that the adoption of this new guidance will have on its consolidated financial statements. Lease Accounting In February 2016, lease accounting guidance was issued which, for operating leases, will require a lessee to recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, on its balance sheet. The guidance also requires a lessee to recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term, generally on a straight-line basis. We have established a cross-functional implementation team, which includes representatives from all of our business segments. We are utilizing a bottoms-up approach to analyze the impact of the new standard by reviewing our current lease population, including completeness, to identify potential accounting, data and other operational changes that might be required under the new guidance. In addition, we are assessing changes to our business processes, systems and controls to support recognition and disclosure under the standard upon adoption. The guidance will be effective for Ball on January 1, 2019, and it is expected that a material amount of lease assets and liabilities will be recorded on its consolidated balance sheet. |
Business Segment Information
Business Segment Information | 3 Months Ended |
Mar. 31, 2018 | |
Business Segment Information | |
Business Segment Information | 3. Business Segment Information Ball’s operations are organized and reviewed by management along its product lines and geographical areas and presented in the five reportable segments outlined below: Beverage packaging, North and Central America : Consists of operations in the U.S., Canada and Mexico that manufacture and sell metal beverage containers throughout those countries. Beverage packaging, South America : Consists of operations in Brazil, Argentina and Chile that manufacture and sell metal beverage containers throughout most of South America. Beverage packaging, Europe : Consists of operations in numerous countries in Europe, including Russia, that manufacture and sell metal beverage containers throughout most of Europe. Food and aerosol packaging : Consists of operations in the U.S., Europe, Canada, Mexico, Argentina and India that manufacture and sell steel food and aerosol containers, extruded aluminum aerosol containers and aluminum slugs. 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 below, other consists of non-reportable segments in Africa, Middle East and Asia (AMEA) and Asia Pacific that manufacture and sell metal beverage containers, undistributed corporate expenses, intercompany eliminations and other business activities. The accounting policies of the segments are the same as those in the consolidated financial statements and are discussed in Note 1. The company also has investments in operations in Guatemala, Panama, South Korea, 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. Summary of Business by Segment Three Months Ended March 31, ($ in millions) 2018 2017 Net sales Beverage packaging, North and Central America $ 1,035 $ 949 Beverage packaging, South America 459 371 Beverage packaging, Europe 609 508 Food and aerosol packaging 275 272 Aerospace 264 236 Reportable segment sales 2,642 2,336 Other 143 137 Net sales $ 2,785 $ 2,473 Comparable operating earnings Beverage packaging, North and Central America $ 113 $ 123 Beverage packaging, South America 98 58 Beverage packaging, Europe 60 47 Food and aerosol packaging 23 21 Aerospace 25 21 Reportable segment comparable operating earnings 319 270 Reconciling items Other (a) (19) (31) Business consolidation and other activities (30) (55) Amortization of acquired Rexam intangibles (44) (32) Earnings before interest and taxes 226 152 Interest expense (73) (68) Debt refinancing and other costs (1) — Total interest expense (74) (68) Earnings before taxes 152 84 Tax (provision) benefit (34) (22) Equity in results of affiliates, net of tax 7 8 Net earnings 125 70 Net earnings attributable to noncontrolling interests — (2) Net earnings attributable to Ball Corporation $ 125 $ 68 (a) Includes undistributed corporate expenses, net, of $22 million and $45 million for the first quarters of 2018 and 2017, respectively. The company does not disclose total assets by segment as it is not provided to the chief operating decision makers. |
Revenue from Contracts With Cus
Revenue from Contracts With Customers | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer [Text Block] | 4. Revenue from Contracts with Customers Disaggregation of Sales The company disaggregates net sales by reportable segments as disclosed in Note 3, and based on the timing of transfer of control for goods and services as explained below. The transfer of control for goods and services may occur at a point in time or over time; in other words, sales may be recognized over the course of the underlying contract, or they may occur at a single point in time based upon the transfer of control. This distinction is discussed in further detail below. The company determined that disaggregating sales into these categories achieves the disclosure objective to depict how the nature, amount, timing, and uncertainty of sales and cash flows are affected by economic factors. As noted in the segment information footnote, the company’s business consists of five reportable segments, which encompass disaggregated product lines and geographical areas: (1) beverage packaging, North and Central America; (2) beverage packaging, South America; (3) beverage packaging, Europe; (4) food and aerosol packaging; and (5) aerospace. The following table disaggregates the company’s net sales based on the timing of transfer of control: Three Months Ended March 31, 2018 ($ in millions) Point in Time Over Time Total Total net sales $ 662 $ 2,123 $ 2,785 Contract Balances The company enters into contracts to sell beverage packaging, food and aerosol packaging, and aerospace products. The payment terms and conditions in customer contracts vary. Those customers that prepay are represented by the contract liabilities below until the performance obligations are satisfied. Contract assets would exist when sales have been recorded (i.e., control of the goods or services has been transferred to the customer) but customer payment is contingent on a future event beyond the passage of time (i.e., satisfaction of additional performance obligations). The company does not have any contract assets. 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: Contracts Contract Liabilities Liabilities ($ in millions) (Current) (Noncurrent) Balance at December 31, 2017 $ 45 $ — Increase 7 6 Balance at March 31, 2018 $ 52 $ 6 The amounts of sales recognized in the period that were included in the opening contract liabilities balances were $42 million, all of which related to current contract liabilities. Contract liabilities increased by $13 million, which is net of cash received of $55 million and amounts recognized as sales during the period. The difference between the opening and closing balances of the company’s contract liabilities primarily results from the timing difference between the company’s performance and the customer’s payment. 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 sales of $4 million from performance obligations satisfied (or partially satisfied) in prior periods. This amount of sales is a result of changes in the transaction price of the company’s contracts with customers. Contract Costs The company has determined that there are no material costs that meet the capitalization criteria for costs to obtain or fulfill a contract. Practical Expedients For the company’s contracts that have an original duration of one year or less, the company elected the practical expedient applicable to such contracts and has not disclosed the transaction price for the future performance obligations as of the end of each reporting period or when the company expects to recognize sales. The company has elected the sales tax practical expedient; therefore, sales and other taxes assessed by a governmental authority that are collected concurrent with revenue-producing activities are excluded from the transaction price. For shipping and handling activities performed after a customer obtains control of the goods, the company has elected to account for these costs as activities to fulfill the promise to transfer the goods; therefore, these activities are not assessed as separate performance obligations. The company has also elected the significant financing component practical expedient which allows the company to not assess whether the contract has a significant financing component if, at contract inception, the expectation is that the contract duration is less than one year. Beverage Packaging and Food and Aerosol Products Performance Obligations At contract inception, the company assesses the goods and services promised in its contracts with customers and identifies a performance obligation for each promise to transfer goods or services to the customer. The performance obligation may be represented by a good or service (or series of goods or services) that is distinct, or by a series of distinct goods or services that are substantially the same and have the same pattern of transfer to the customer. In each instance, the company treats the promise to transfer the customer goods or services as a single performance obligation. To identify the performance obligations, the company considers all of the goods or services promised in the contract, regardless of whether they are explicitly stated or are implied by customary business practices. The company has determined that the following distinct goods and services represent separate performance obligations: · Manufacture of food and aerosol containers, which may be generic or unique · Manufacture of beverage cans, which may be generic or unique · Manufacture of beverage, food, and aerosol lids and ends, which may be generic or unique Performance obligations for products with no alternative use are recognized over time, when the company has manufactured a unique item and has an enforceable right to payment. Conversely, generic products with alternative use are recognized at a point in time. Contracts may be short-term or long-term, with varying payment terms. Our payment terms vary by the type and location of our customer and the products or services offered. Customers pay in accordance with negotiated terms, which are typically triggered upon ownership transfer. All payment terms are less than one year. For these contracts, the transaction price is determined upon establishment of the contract that contains the final terms of the sale, including the description, quantity, and price of each product or service purchased. Transaction Price Allocated to Remaining Performance Obligations In the context of the revenue recognition standard, enforceable contracts are those that have an enforceable right to payment, which Ball typically has once a binding forecast or purchase order (or similar evidence) is in place and Ball produces under the contract. Within Ball’s packaging segments, enforceable contracts as defined all have a duration of less than one year. Contracts that have an original duration of less than one year are excluded from the requirement to disclose remaining performance obligations based on the company’s election to use the practical expedient. The nature of the remaining performance obligations within these contracts, as well as the nature of the variability and how it will be resolved, are described in the section below. Significant Judgments Timing of Recognition Within the beverage packaging and food and aerosol segments, performance obligations are recognized both over time and at a point in time. The determination that sales should be recognized at a point in time most often results from the existence of an alternative use for the product. Cans and ends that are not customized prior to delivery are considered to have alternative use and sales are recognized at the point of control transfer. Determining when control transfer occurs requires management to make judgments that affect the timing of when sales are recognized. The new revenue accounting standard provides five indicators that a customer has obtained control of an asset: 1) present right to payment; 2) transfer of legal title; 3) physical possession; 4) significant risks and rewards of ownership; and 5) customer acceptance. The company considers control to have transferred for these products upon shipment or delivery, depending on the legal terms of the contract, because the company has a present right to payment at that time, the customer has legal title to the asset, the company has transferred physical possession of the asset or the customer has significant risks and rewards of ownership of the asset. The company determines that control transfers to a customer as described above and provides a faithful depiction of the transfer of goods. For performance obligations related to products that are specialized with no alternative use (e.g., specialized sizes or customer-specific materials, or labeled with customer-specific artwork), the company transfers control and records sales over time. The recognition of sales occurs over time as goods are manufactured and Ball has an enforceable right to payment for those goods, which is an output method. Determining a measure of progress requires management to make judgments that impact the timing of when sales are recognized. The company has determined the above provides a faithful depiction of the transfer of goods to the customer. The number of units manufactured that have an enforceable right to payment is the best measure of depicting the company’s performance as control is transferred. The customer obtains value as each unit is produced against a binding contract. The enforceable right to payment may be explicit or implied in the contract. If the enforceable right to payment is not explicit in the contract, Ball must consider if there is an implied right based on customer relationships or previous business practices and applicable law. Typically, Ball has an enforceable right to payment of costs plus a reasonable margin once a binding forecast or purchase order (or similar evidence) is in place and Ball produces under the contract. Determining the Transaction Price including Variable Consideration In making its determination of stand-alone selling price, Ball maximizes its use of observable inputs. Stand-alone selling price is then used to allocate total consideration proportionally to the various performance obligations within a contract. To estimate variable consideration, we may apply both the “expected value” method and “most likely amount” method based on the form of variable consideration, according to which method would provide the best prediction of consideration to be received from our customers. The expected value method involves a probability-weighted determination of the expected amount, whereas the most likely amount method identifies the single most likely outcome in a range of possible amounts. In certain cases, both methods may be used within a single contract if multiple forms of variable consideration exist. However, once a method has been applied to one form of variable consideration, it is applied consistently throughout the contract term. The primary types of variable consideration present in the company’s contracts are per-unit price changes, volume discounts and rebates. Once variable consideration has been estimated, it will be constrained if a significant reversal of the cumulative amounts of sales is probable in the context of the contract. Aerospace Performance Obligations At contract inception, the company assesses the goods and services promised in its contracts with customers and identifies a performance obligation for each promise to transfer goods or services to the customer. The performance obligation may be represented by a good or service (or a series of goods or services) that is distinct, or by a series of distinct goods or services that are substantially the same and have the same pattern of transfer to the customer. In each of these scenarios, the company treats the promise to transfer the customer goods or services as a single performance obligation. To identify its performance obligations, the company considers all of the goods or services promised in the contract, regardless of whether they are explicitly stated or are implied by customary business practices. The company has determined that the following distinct goods and services represent separate performance obligations: · Manufacture and delivery of distinct spacecraft and/or hardware components; · Research reports, for contracts under which such reports are the sole or primary deliverables; · Design, add-on, or special studies for contracts under which such studies have stand-alone value or for which a material right exists due to discounted pricing; and · Warranty and performance guarantees beyond standard repair/replacement. Performance obligations with no alternative use are recognized over time, when the company has an enforceable right to payment for efforts completed to-date. Because of sales contract payment schedules, limitations on funding, and contract terms, our sales and accounts receivable generally include amounts that have been earned but not yet billed. Our payment terms vary by the type and location of our customer and the products or services offered. All payment terms are less than one year. Contracts are often modified to account for changes in contract specifications and requirements. We consider contract modifications to exist when the modification either creates new or revised enforceable rights and obligations. Most of our contract modifications are for goods or services that are not distinct from the existing contract due to the significant integration service provided in the context of the contract, and such contract modifications are accounted for as if they were part of that existing contract. The effect of a contract modification on the transaction price and our measure of progress for the performance obligation to which it relates, is recognized as an adjustment to sales (either as an increase or reduction of sales) on a cumulative catch-up basis. 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) Rolling Twelve Months Thereafter Total Sales expected to be recognized on multi-year contracts in place as of March 31, 2018 $ 862 $ 777 $ 1,639 The contracts with original durations of less than one year, which are excluded from the table above based on the company’s election of the practical expedient, are primarily related to contracts where control will be fully transferred to the customers in less than one year. The nature of the remaining performance obligations within these contracts, as well as the nature of the variability and how it will be resolved, are described in the section below. Significant Judgments Timing of Recognition Within the aerospace segment, performance obligations are recognized over time. Aerospace contracts involve specialized and unique products that are tailored to the specific needs of the customer, such as a spacecraft or other hardware conforming to the specifications required by the customer, and as such, no alternative use exists. When there is an enforceable right to payment at cost plus reasonable margin for performance completed to-date, the sales are recorded over time as the goods are manufactured or services are performed. Determining a measure of progress requires management to make judgments that affect the timing of recording sales. Sales under long-term contracts in the aerospace segment are primarily recognized using percentage-of-completion under the cost-to-cost method of accounting, which is an input method. Under this method, the extent of progress towards completion is measured based on the ratio of costs incurred to date versus the total estimated costs upon completion of the performance obligation. The cost-to-cost method best depicts the transfer of assets to the customer as we incur costs on our contracts. The two primary types of long-term sales contracts utilized are cost-type contracts, which are agreements to perform for cost plus an agreed-upon profit component, and fixed price sales contracts, which are completed for a fixed price. Cost-type sales contracts can have different types of fee arrangements, including fixed-fee, cost, milestone and performance incentive fees, award fees or a combination thereof. At the inception of contract performance, we estimate sales associated with base, incentive and other fees exclusive of any constraint. In other words, we estimate sales to the extent that it is not probable a significant reversal would occur over the period of contract performance. The company has determined that the above provides a faithful depiction of the transfer of goods to the customer, and is the best measure of depicting the company’s performance as control is transferred to customers. Determining the Transaction Price including Variable Consideration Due to the unique and customized nature of deliverables within aerospace contracts, a readily observable selling price for a similar good is not typically available; therefore, in making its determination of stand-alone selling price, the company generally applies the “expected cost plus a margin” approach (whereby the transaction price is allocated based on the relative amount of costs plus an appropriate margin). Use of the expected cost plus a margin approach requires Ball to determine the expected costs for each performance obligation, as well as an appropriate margin (i.e., cost to cost percentage of completion). The calculation is made at contract inception to determine the allocation of consideration. Uncertainty as to the total amount that will be paid by the customer (such as the exact amount of costs that will be incurred and fees that will be earned by Ball Aerospace to satisfy the contractual requirements) gives rise to variable consideration. To estimate variable consideration, we typically apply the “most likely amount” method or the “expected value” method depending on the nature of the variable consideration. The most likely amount method identifies the single most likely outcome in a range of possible amounts, while the expected value method involves a probability-weighted determination of the expected amount. The most likely amount method is used primarily when the possible outcomes are binary (i.e., either the cost/fee will be incurred or it will not). In certain cases, both methods may be used within a single contract if multiple forms of variable consideration exist. However, once a method has been applied to one form of variable consideration, it is applied consistently throughout the contract term. The primary types of variable consideration present in the company’s contracts are cost reimbursements, performance award fees, incremental funding and finalization of government rates. These types of arrangements are most commonly (though not exclusively) estimated based on the “most likely” method. Once variable consideration has been estimated, it will be constrained if a significant reversal of the cumulative amount of sales is probable in the context of the contract. |
Business Consolidation and Othe
Business Consolidation and Other Activities | 3 Months Ended |
Mar. 31, 2018 | |
Business Consolidation and Other Activities | |
Business Consolidation and Other Activities | 5. 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 March 31, ($ in millions) 2018 2017 Beverage packaging, North and Central America $ (3) $ (4) Beverage packaging, South America — 3 Beverage packaging, Europe (10) (3) Food and aerosol packaging — 10 Other (17) (61) $ (30) $ (55) 2018 Beverage Packaging, North and Central America During the first quarter of 2018, the company recorded income of $5 million for revised estimates of charges recorded in prior periods in connection with the previously announced closures of its beverage can manufacturing facilities in Chatsworth, California, and Longview, Texas, and its beverage end manufacturing facility in Birmingham, Alabama. The Birmingham and Longview plants are expected to cease production by the end of the second quarter of 2018, and the Chatsworth plant is expected to cease production by the end of the third quarter of 2018. The majority of the charges are expected to be paid prior to the plants ceasing production. During the first quarter of 2018, the company recorded charges of $2 million related to the closure of its Reidsville, North Carolina, plant, which ceased production in 2017. Other charges in the first quarter included $6 million for individually insignificant activities. Beverage Packaging, Europe During the first quarter of 2018, the company recorded charges of $4 million for employee severance and benefits and $6 million for facility shutdown costs and other costs in connection with the closure of its Recklinghausen, Germany, plant which ceased production during the third quarter of 2017. The majority of the closure costs are expected to be paid by the end of 2018. Corporate and Other During the first quarter of 2018, the company recorded expense of $11 million for long-term incentive and other compensation arrangements associated with the Rexam acquisition. Other charges in the first quarter included $6 million for individually insignificant activities. 2017 Beverage Packaging, North and Central America During the first quarter of 2017, the company recorded charges of $3 million for employee severance and accelerated depreciation related to the closure of its Reidsville, North Carolina, plant. Other charges in the first quarter included $1 million for individually insignificant activities. Beverage Packaging, South America Income in the first quarter of 2017 included $3 million for individually insignificant activities. Beverage Packaging, Europe During the first quarter of 2017, the company recorded charges of $2 million for professional services and other costs associated with the acquisition of Rexam. Other charges in the first nine months of 2017 included $1 million for individually insignificant activities. Food and Aerosol Packaging During the first quarter of 2017, the company recorded charges of $3 million for facility shutdown costs and accelerated depreciation for the closure of its Weirton, West Virginia, plant, which ceased production during the first quarter of 2017. During the first quarter of 2017, the company sold its food and aerosol packaging paint and general line can plant in Hubbard, Ohio, and recorded a gain on sale of $15 million. Other charges in the first quarter included $2 million for individually insignificant activities. Corporate and Other During the first quarter of 2017, the company recorded the following amounts: · Expense of $27 million for the estimated amount of claims covered by the indemnification for certain tax matters provided to the buyer of the businesses divested (Divestment Business) in connection with the 2016 Rexam acquisition. · A $14 million reduction in the gain recognized in connection with the sale of the Ball portion of the Divestment Business. · Expense of $9 million for long-term incentive and other compensation arrangements associated with the Rexam acquisition. · Expense of $5 million for professional services and other costs associated with the acquisition of Rexam. · Expense of $6 million for individually insignificant activities. Following is a summary by segment for the restructuring liabilities recorded in connection with business consolidation activities: ($ in millions) Beverage Packaging, North & Central America Beverage Packaging, Europe Food & Aerosol Packaging Total Balance at December 31, 2017 $ 26 $ 41 $ 1 $ 68 Charges in earnings (5) 10 — 5 Cash payments and other activity (1) (33) (1) (35) Balance at March 31, 2018 $ 20 $ 18 $ — $ 38 |
Cash, Cash Equivalents and Rest
Cash, Cash Equivalents and Restricted Cash | 3 Months Ended |
Mar. 31, 2018 | |
Cash and Cash Equivalents [Abstract] | |
Cash, Cash Equivalents and Restricted Cash | 6. March 31, ($ in millions) 2018 2017 Beginning of period: Cash and cash equivalents $ 448 $ 597 Current restricted cash (included in other current assets) 10 9 Noncurrent restricted cash (included in other assets) 1 1 Total cash, cash equivalents and restricted cash $ 459 $ 607 End of period: Cash and cash equivalents $ 477 $ 458 Current restricted cash (included in other current assets) 8 6 Noncurrent restricted cash (included in other assets) 1 1 Total cash, cash equivalents and restricted cash $ 486 $ 465 The company’s restricted cash is primarily related to receivables factoring programs and represents amounts collected from customers not yet 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 $97 million at March 31, 2018 and $124 million at December 31, 2017. In connection with the sale of a business in connection with the June 2016 acquisition of Rexam, the company provided indemnifications for uncertain tax positions associated with the business. During the first quarter of 2018, the company made payments of $45 million in relation to these liabilities and reported them within investing activities in the unaudited condensed consolidated statement of cash flows. |
Receivables
Receivables | 3 Months Ended |
Mar. 31, 2018 | |
Receivables | |
Receivables | 7. Receivables March 31, December 31, ($ in millions) 2018 2017 Trade accounts receivable $ 1,332 $ 1,206 Unbilled receivables 429 147 Less allowance for doubtful accounts (10) (10) Net trade accounts receivable 1,751 1,343 Other receivables 339 291 $ 2,090 $ 1,634 Unbilled receivables at March 31, 2018, include the effect of adopting new revenue recognition accounting guidance as of January 1, 2018. Further details of the new guidance and its adoption are included in Notes 2 and 4. The company has entered into several regional committed and uncommitted accounts receivable factoring programs with various financial institutions for certain receivables of the company. The programs are accounted for as true sales of the receivables, without recourse to Ball, and had combined limits of approximately $800 million at March 31, 2018. A total of $211 million and $439 million were available for sale under these programs as of March 31, 2018, and December 31, 2017, respectively. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2018 | |
Inventories | |
Inventories | 8. Inventories March 31, December 31, ($ in millions) 2018 2017 Raw materials and supplies $ 719 $ 691 Work-in-process and finished goods 794 902 Less inventory reserves (66) (67) $ 1,447 $ 1,526 |
Property, Plant and Equipment
Property, Plant and Equipment | 3 Months Ended |
Mar. 31, 2018 | |
Property, Plant and Equipment | |
Property, Plant and Equipment | 9. Property, Plant and Equipment March 31, December 31, ($ in millions) 2018 2017 Land $ 174 $ 172 Buildings 1,391 1,390 Machinery and equipment 5,378 5,282 Construction-in-progress 666 542 7,609 7,386 Accumulated depreciation (2,882) (2,776) $ 4,727 $ 4,610 Property, plant and equipment are stated at historical or acquired cost. Depreciation expense amounted to $125 million and $107 million for the three months ended March 31, 2018 and 2017, respectively. |
Goodwill
Goodwill | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets | |
Goodwill | 10. Goodwill ($ in millions) Beverage Beverage Beverage Food Aerospace Other Total Balance at December 31, 2017 $ 1,275 $ 1,299 $ 1,531 $ 609 $ 40 $ 179 $ 4,933 Effects of currency exchange — — 33 4 — — 37 Balance at March 31, 2018 $ 1,275 $ 1,299 $ 1,564 $ 613 $ 40 $ 179 $ 4,970 The company’s annual goodwill impairment test completed in the fourth quarter of 2017 indicated the fair value of the beverage packaging, Asia (Beverage Asia), reporting unit exceeded its carrying amount by approximately 24 percent. The current supply of metal beverage packaging exceeds demand in China, resulting in pricing pressure and negative impacts on the profitability of our Beverage Asia reporting unit. If it becomes an expectation that this oversupply situation will continue for an extended period of time, the company may be required to record a noncash impairment charge for some or all of the goodwill associated with the Beverage Asia reporting unit, the total balance of which was $78 million at March 31, 2018. |
Intangible Assets ,net
Intangible Assets ,net | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets | |
Intangible Assets, net | 11. Intangible Assets, Net March 31, December 31, ($ in millions) 2018 2017 Acquired Rexam intangibles (net of accumulated amortization of $284 million at March 31, 2018, and $246 million at December 31, 2017) $ 2,286 $ 2,303 Capitalized software (net of accumulated amortization of $134 million at March 31, 2018, and $129 million at December 31, 2017) 82 84 Other intangibles (net of accumulated amortization of $173 million at March 31, 2018, and $163 million at December 31, 2017) 64 75 $ 2,432 $ 2,462 Total amortization expense of intangible assets amounted to $55 million and $41 million for the three months ended March 31, 2018 and 2017, respectively. |
Other Assets
Other Assets | 3 Months Ended |
Mar. 31, 2018 | |
Other Assets.. | |
Other Assets. | 12. Other Assets March 31, December 31, ($ in millions) 2018 2017 Long-term deferred tax assets $ 316 $ 325 Long-term pension assets 532 504 Investments in affiliates 281 274 Company and trust-owned life insurance 168 160 Other 145 143 $ 1,442 $ 1,406 |
Debt and Interest Costs
Debt and Interest Costs | 3 Months Ended |
Mar. 31, 2018 | |
Debt and Interest Costs | |
Debt and Interest Costs | 13. Debt and Interest Costs Long-term debt consisted of the following: March 31, December 31, ($ in millions) 2018 2017 Senior Notes 5.25% due July 2025 $ 1,000 $ 1,000 4.375% due December 2020 1,000 1,000 4.00% due November 2023 1,000 1,000 4.375%, euro denominated, due December 2023 863 840 5.00% due March 2022 750 750 4.875% due March 2026 750 — 3.50%, euro denominated, due December 2020 493 480 Senior Credit Facilities, due March 2021 (at variable rates) Term A loan, due June 2021 998 1,313 Multi-currency, U.S. dollar revolver, due March 2021 330 285 Other (including debt issuance costs) (44) (37) 7,140 6,631 Less: Current portion of long-term debt (9) (113) $ 7,131 $ 6,518 The senior credit facilities include long-term, multi-currency committed revolving credit facilities that provide the company with up to the U.S. dollar equivalent of $1.5 billion. At March 31, 2018, taking into account outstanding letters of credit, approximately $1.1 billion was available under existing long-term, revolving credit facilities. In addition to these facilities, the company had approximately $880 million of short-term uncommitted credit facilities available at March 31, 2018, of which $328 million was outstanding and due on demand. At December 31, 2017, the company had $340 million outstanding under short-term uncommitted credit facilities. In March 2018, Ball issued $750 million of 4.875 percent senior notes and used the proceeds to repay $315 million of its Term A loan and outstanding multi-currency revolver and short-term credit facility borrowings. The fair value of long-term debt was estimated to be $7.4 billion at March 31, 2018, and $7.0 billion at December 31, 2017. The fair value reflects the market rates at each period end for debt with credit ratings similar to the company’s ratings and is classified as Level 2 within the fair value hierarchy. Rates currently available to the company for loans with similar terms and maturities are used to estimate the fair value of long-term debt based on discounted cash flows. Ball provides letters of credit in the ordinary course of business to secure liabilities recorded in connection with certain self-insurance arrangements. Letters of credit outstanding were $33 million at March 31, 2018, and $33 million at December 31, 2017. The company’s senior notes and senior credit facilities are guaranteed on a full, unconditional and joint and several basis by certain of the company’s material subsidiaries. Each of the guarantor subsidiaries is 100 percent owned by Ball Corporation. These guarantees are required in support of these notes and credit facilities, are coterminous with the terms of the respective note indentures and would require performance upon certain events of default referred to in the respective guarantees. Note 21 includes further details about the company’s debt guarantees and Note 22 contains further details, as well as required unaudited condensed consolidating financial information for the company, segregating the guarantor subsidiaries and non-guarantor subsidiaries as defined in the debt agreements. The U.S. note agreements and bank credit agreement contain certain restrictions relating to dividend payments, share repurchases, investments, financial ratios, guarantees and the incurrence of additional indebtedness. The most restrictive covenant is in the company’s bank credit agreement and requires the company to maintain a net leverage ratio (as defined) of no greater than 4.25 times at March 31, 2018. The company was in compliance with all loan agreements and debt covenants at March 31, 2018, and December 31, 2017, and has met all debt payment obligations. |
Employee Benefit Obligations
Employee Benefit Obligations | 3 Months Ended |
Mar. 31, 2018 | |
Employee Benefit Obligations | |
Employee Benefit Obligations | 15. Employee Benefit Obligations March 31, December 31, ($ in millions) 2018 2017 Underfunded defined benefit pension liabilities $ 957 $ 945 Less: Current portion (23) (27) Long-term defined benefit pension liabilities 934 918 Long-term retiree medical liabilities 198 196 Deferred compensation plans 275 275 Other 77 74 $ 1,484 $ 1,463 Components of net periodic benefit cost associated with the company’s defined benefit pension plans were: Three Months Ended March 31, 2018 2017 ($ in millions) U.S. Foreign Total U.S. Foreign Total Ball-sponsored plans: Service cost $ 13 $ 4 $ 17 $ 12 $ 4 $ 16 Interest cost 24 18 42 33 22 55 Expected return on plan assets (27) (27) (54) (33) (26) (59) Recognized net actuarial loss 10 1 11 9 1 10 Net periodic benefit cost for Ball sponsored plans 20 (4) 16 21 1 22 Net periodic benefit cost for multi-employer plans — — — 1 — 1 Total net periodic benefit cost $ 20 $ (4) $ 16 $ 22 $ 1 $ 23 Non-service pension income totaling $1 million for the three months ended March 31, 2018, are included in SG&A expenses. Non-service pension costs totaling $6 million for the three months ended March 31, 2017, are included in cost of sales and SG&A and were not retrospectively adjusted due to immateriality. Contributions to the company’s defined benefit pension plans, not including unfunded German, Swedish and certain U.S. plans, were $3 million in the first three months of 2018 compared to $8 million in the first three months of 2017 and are expected to be in the range of $45 million for the full year of 2018. This estimate may change based on any changes to the U.S. Pension Protection Act and actual plan asset performance, among other factors. Payments to participants in the unfunded German, Swedish and certain U.S. plans were $5 million in the first three months of 2018 compared to $6 million in the first three months of 2017 and are expected to be in the range of $21 million for the full year of 2018. |
Shareholders_ Equity and Compre
Shareholders’ Equity and Comprehensive Earnings | 3 Months Ended |
Mar. 31, 2018 | |
Shareholders’ Equity and Comprehensive Earnings | |
Shareholders’ Equity and Comprehensive Earnings | 16. Shareholders’ Equity and Comprehensive Earnings In April 2017, the company’s board of directors declared a two-for-one split of Ball Corporation’s common stock, which was effective as of May 16, 2017. In August 2017, in a privately negotiated transaction, Ball entered into an accelerated share repurchase agreement to buy $100 million of its common shares using cash on hand and available borrowings, and the company received 2.5 million shares. Accumulated Other Comprehensive Earnings (Loss) The activity related to accumulated other comprehensive earnings (loss) was as follows: ($ in millions) Foreign Currency Translation (Net of Tax) Pension and Other Postretirement Benefits (Net of Tax) Effective Derivatives (Net of Tax) Accumulated Other Comprehensive Earnings (Loss) Balance at December 31, 2017 $ (307) $ (362) $ 13 $ (656) Other comprehensive earnings (loss) before reclassifications 14 5 (57) (38) Amounts reclassified from accumulated other comprehensive earnings (loss) — 7 14 21 Balance at March 31, 2018 $ (293) $ (350) $ (30) $ (673) The following table provides additional details of the amounts recognized into net earnings from accumulated other comprehensive earnings (loss): Three Months Ended March 31, ($ in millions) 2018 2017 Gains (losses) on cash flow hedges: Commodity contracts recorded in net sales $ (3) $ (3) Commodity contracts recorded in cost of sales 10 8 Currency exchange contracts recorded in business consolidation and other activities — 3 Cross-currency swaps recorded in selling, general and administrative (29) (17) Cross-currency swaps recorded in interest expense 3 — Total before tax effect (19) (9) Tax benefit (expense) on amounts reclassified into earnings 5 (15) Recognized gain (loss) $ (14) $ (24) Amortization of pension and other postretirement benefits: (a) Actuarial gains (losses) (9) (9) Total before tax effect (9) (9) Tax benefit (expense) on amounts reclassified into earnings 2 3 Recognized gain (loss) $ (7) $ (6) (a) The pension components are included in the computation of net periodic benefit cost included in Note 15. |
Stock-Based Compensation Progra
Stock-Based Compensation Programs | 3 Months Ended |
Mar. 31, 2018 | |
Stock-Based Compensation Programs | |
Stock-Based Compensation Programs | 17. Stock-Based Compensation Programs The company has shareholder-approved stock plans under which options and stock-settled appreciation rights (SSARs) have been granted to employees at the market value of the company’s stock at the date of grant. In general, options and SSARs are exercisable in four equal installments commencing one year from the date of grant and terminating 10 years from the date of grant. There were 2.1 million stock options granted in January 2018. These options and SSARs cannot be traded in any equity market. However, based on the Black-Scholes option pricing model, options and SSARs granted in January 2018 and January 2017 have estimated weighted average fair values at the date of grant of $9.07 per share and $8.54 per share, respectively (reflects the two-for-one stock split effective May 16, 2017). The actual value an employee may realize will depend on the excess of the stock price over the exercise price on the date the option or SSAR is exercised. Consequently, there is no assurance the value realized by an employee will approximate the value estimated. The fair values were estimated using the following weighted average assumptions: January 2018 January 2017 Expected dividend yield 1.03 % 0.68 % Expected stock price volatility 21.98 % 20.49 % Risk-free interest rate 2.47 % 2.07 % Expected life of options (in years) 6.10 years 5.94 years During the first quarter of 2018 and 2017, the company’s board of directors granted 261,174 and 237,452 performance-contingent restricted stock units (PCEQs) (on a post-stock split basis), respectively, to key employees. These PCEQs vest three years from the date of grant, and the number of shares available at the vesting date is based on the company’s growth in economic value added (EVA®) dollars in excess of the EVA® dollars generated in the calendar year prior to the grant as the minimum threshold, and can range from zero to 200 percent of each participant’s assigned PCEQ award. If the minimum performance goals are not met, the PCEQ will be forfeited. Grants under the plan are being accounted for as equity awards and compensation expense is recorded based upon the most probable outcome using the closing market price of the shares at the grant date. On a quarterly and annual basis, the company reassesses the probability of the goals being met and adjusts compensation expense as appropriate. Also during the first quarter of 2017, the company’s board of directors granted 1.1 million performance-contingent restricted stock units (on a post-stock split basis) to employees related to the Special Acquisition-Related Incentive Plan. The number of shares issued at the vesting date in January 2020 will be based on the company’s achievement of cumulative EVA® and Cash Flow performance goals through the vesting date and can range from zero to 200 percent of each participant’s assigned award. If the minimum performance goals are not met, the awards will be forfeited. Grants under the plan are being accounted for as equity awards and compensation expense is recorded based upon the most probable outcome using the closing market price of the shares at the grant date. On a quarterly basis the company reassesses the probability of the goals being met and adjusts compensation expense as appropriate. |
Earnings and Dividends Per Shar
Earnings and Dividends Per Share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings and Dividends Per Share | |
Earnings and Dividends Per Share | 18. Earnings and Dividends Per Share Three Months Ended March 31, ($ in millions, except per share amounts; shares in thousands) 2018 2017 Net earnings attributable to Ball Corporation $ 125 $ 68 Basic weighted average common shares (a) 350,215 350,048 Effect of dilutive securities (a) 7,337 7,886 Weighted average shares applicable to diluted earnings per share (a) 357,552 357,934 Per basic share (a) $ 0.36 $ 0.19 Per diluted share (a) $ 0.35 $ 0.19 (a) Amounts in 2017 have been retrospectively adjusted for the two-for-one stock split that was effective on May 16, 2017. Certain outstanding options were excluded from the diluted earnings per share calculation because they were anti-dilutive (i.e., their assumed conversion into common stock would increase rather than decrease earnings per share). The options excluded totaled 5 million for the first quarter of 2018 and 4 million for the first quarter of 2017. The company declared and paid dividends of $0.10 per share in the first quarter of 2018 and $0.065 per share (on a post-stock split basis) in the first quarter of 2017. |
Financial Instruments and Risk
Financial Instruments and Risk Management | 3 Months Ended |
Mar. 31, 2018 | |
Financial Instruments and Risk Management | |
Financial Instruments and Risk Management | 19. Financial Instruments and Risk Management 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 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 offset any amounts owed with regard to open derivative positions. Commodity Price Risk Aluminum The company manages commodity price risk in connection with market price fluctuations of aluminum ingot through two different methods. First, the company enters into container sales contracts that include aluminum ingot-based pricing terms that generally reflect the same price fluctuations under commercial purchase contracts for aluminum sheet. The terms include fixed, floating or pass through aluminum ingot component pricing. Second, the company uses certain derivative instruments, including option and forward contracts as economic and cash flow hedges of commodity price risk where there are material differences between sales and purchase contracted pricing and volume. At March 31, 2018, the company had aluminum contracts limiting its aluminum exposure with notional amounts of approximately $844 million, of which $822 million received hedge accounting treatment. The aluminum contracts, which are recorded at fair value, include economic derivative instruments that are undesignated, as well as cash flow hedges that offset sales and purchase contracts of various terms and lengths. Cash flow hedges relate to forecasted transactions that will occur within the next t wo years. Included in shareholders’ equity at March 31, 2018, within accumulated other comprehensive earnings (loss), is a net after-tax gain of $10 million associated with these contracts. A net after-tax gain of $14 million is expected to be recognized in the consolidated statement of earnings during the next 12 months, the majority of which will be offset by pricing changes in sales and purchase contracts, thus resulting in little or no earnings impact to Ball. Steel Most sales contracts involving our steel products either include provisions permitting the company to pass through some or all steel cost changes incurred, or they incorporate annually negotiated steel prices. Interest Rate Risk The company’s objective in managing exposure to interest rate changes is to minimize the impact of interest rate changes on earnings and cash flows and to lower our overall borrowing costs. To achieve these objectives, the company may use a variety of interest rate swaps, collars and options to manage our mix of floating and fixed-rate debt. At March 31, 2018, the company had outstanding interest rate swap and option contracts with notional amounts of approximately $1.3 billion paying fixed rates expiring within the next two years. Currency Exchange Rate Risk The company’s objective in managing exposure to currency fluctuations is to limit the exposure of cash flows and earnings from changes associated with currency exchange rate changes through the use of various derivative contracts. In addition, at times the company manages earnings translation volatility through the use of currency option strategies, and the change in the fair value of those options is recorded in the company’s net earnings. The company’s currency translation risk results from the currencies in which we transact business. The company faces currency exposures in its global operations as a result of various factors including intercompany currency denominated loans, selling our products in various currencies, purchasing raw materials and equipment in various currencies and tax exposures not denominated in the functional currency. Sales contracts are negotiated with customers to reflect cost changes and, where there is not an exchange pass-through arrangement, the company uses forward and option contracts to manage currency exposures. At March 31, 2018, the company had outstanding exchange rate forward and option contracts with notional amounts totaling approximately $2.2 billion. Approximately $3 million of net after-tax gain related to these contracts is included in accumulated other comprehensive earnings at March 31, 2018, all of which is expected to be recognized in the unaudited condensed consolidated statement of earnings during the next 12 months. The contracts outstanding at March 31, 2018 expire within the next year. Additionally, the company entered into a $1 billion cross-currency swap contract to partially mitigate the risk associated with foreign currency denominated intercompany debt incurred in 2016. Approximately $43 million of net after-tax loss related to this contract is included in accumulated other comprehensive earnings at March 31, 2018, of which the amount expected to be recognized during the next 12 months is dependent upon changes in currency exchange rates. As of March 31, 2018, the fair value of the cross-currency swap was a $164 million loss. The contract expires within the next three years. Common Stock Price Risk The company’s deferred compensation stock program is subject to variable plan accounting and, accordingly, is marked to fair value using the company’s closing stock price at the end of the related reporting period. The company entered into total return swaps to reduce the company’s earnings exposure to these fair value fluctuations that will be outstanding through March 2019 and that have a combined notional value of 2.7 million shares. Based on the current number of shares in the program, each $1 change in the company’s stock price has an insignificant impact on pretax earnings, net of the impact of related derivatives. As of March 31, 2018, the fair value of the swap was a $2 million loss. Collateral Calls The company’s agreements with its financial counterparties require the company to post collateral in certain circumstances when the negative mark to fair value of the derivative contracts exceeds specified levels. Additionally, the company has collateral posting arrangements with certain customers on these derivative contracts. The cash flows of the margin calls are shown within the investing section of the company’s consolidated statements of cash flows. As of March 31, 2018, and December 31, 2017, the aggregate fair value of all derivative instruments with credit-risk-related contingent features that were in a net liability position was $20 million and $27 million, respectively, and no collateral was required to be posted. Fair Value Measurements The company has classified all applicable financial derivative assets and liabilities as Level 2 within the fair value hierarchy as of March 31, 2018, and December 31, 2017, and presented those values in the tables below. The company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. March 31, 2018 December 31, 2017 ($ in millions) Derivatives Derivatives not Total Derivatives Derivatives not Total Assets: Commodity contracts $ 30 $ 5 $ 35 $ 46 $ 3 $ 49 Foreign currency contracts 3 6 9 5 10 15 Total current derivative contracts $ 33 $ 11 $ 44 $ 51 $ 13 $ 64 Commodity contracts $ 1 $ — $ 1 $ 6 $ — $ 6 Total noncurrent derivative contracts $ 1 $ — $ 1 $ 6 $ — $ 6 Liabilities: Commodity contracts $ 15 $ 4 $ 19 $ 4 $ 4 $ 8 Foreign currency contracts 1 12 13 — 21 21 Interest rate and other contracts — 2 2 — 2 2 Total current derivative contracts $ 16 $ 18 $ 34 $ 4 $ 27 $ 31 Commodity contracts $ 5 $ — $ 5 $ — $ — $ — Foreign currency contracts 1 — 1 — — — Interest rate and other contracts 164 — 164 117 3 120 Total noncurrent derivative contracts $ 170 $ — $ 170 $ 117 $ 3 $ 120 The company uses closing spot and forward market prices as published by the London Metal Exchange, the Chicago Mercantile Exchange, Reuters and Bloomberg to determine the fair value of any outstanding aluminum, currency, energy, inflation and interest rate spot and forward contracts. Option contracts are valued using a Black-Scholes model with observable market inputs for aluminum, currency and interest rates. We value each of our financial instruments either internally using a single valuation technique or from a reliable observable market source. The company does not adjust the value of its financial instruments except in determining the fair value of a trade that settles in the future by discounting the value to its present value using a12-month LIBOR rate as the discount factor. Ball performs validations of its internally derived fair values reported for our financial instruments on a quarterly basis utilizing counterparty valuation statements. Additionally, the company evaluates counterparty creditworthiness and, as of March 31, 2018, has not identified any circumstances requiring the reported values of its financial instruments to be adjusted. The following table provides the effects of derivative instruments in the consolidated statement of earnings and on accumulated other comprehensive earnings (loss): Three Months Ended March 31, 2018 2017 ($ in millions) Location of Gain (Loss) Cash Flow Gain (Loss) on Cash Flow Gain (Loss) on Commodity contracts - manage exposure to customer pricing Net sales $ (3) $ 1 $ (3) $ — Commodity contracts - manage exposure to supplier pricing Cost of sales 10 — 8 — Foreign currency contracts - manage general exposure with the business Selling, general and administrative — (11) — (15) Foreign currency contracts - manage exposure for proposed acquisition of Rexam Business consolidation and other activities — — 3 — Cross-currency swaps - manage intercompany currency exposure within the business Selling, general and administrative (29) — (17) — Cross-currency swaps - manage intercompany currency exposure within the business Interest expense 3 — — — Equity contracts Selling, general and administrative — 4 — (2) Total $ (19) $ (6) $ (9) $ (17) The changes in accumulated other comprehensive earnings (loss) for effective derivatives were as follows: Three Months Ended March 31, ($ in millions) 2018 2017 Amounts reclassified into earnings: Commodity contracts $ (7) $ (5) Cross-currency swap contracts 26 17 Currency exchange contracts — (3) Change in fair value of cash flow hedges: Commodity contracts (30) 51 Cross-currency swap contracts (39) (12) Currency exchange contracts (1) 3 Foreign currency and tax impacts 8 6 $ (43) $ 57 |
Contingencies
Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Contingencies | |
Contingencies | 20. Contingencies Ball is subject to numerous lawsuits, claims or proceedings arising out of the ordinary course of business, including actions related to product liability; personal injury; the use and performance of company products; warranty matters; patent, trademark or other intellectual property infringement; contractual liability; the conduct of the company’s business; tax reporting in domestic and foreign jurisdictions; workplace safety and environmental and other matters. The company has also been identified as a potentially responsible party (PRP) at several waste disposal sites under U.S. federal and related state environmental statutes and regulations and may have joint and several liability for any investigation and remediation costs incurred with respect to such sites. In addition, we have received claims alleging that employees in certain plants have suffered damages due to exposure to alleged workplace hazards. Some of these lawsuits, claims and proceedings involve substantial amounts, including as described below, and some of the environmental proceedings involve potential monetary costs or sanctions that may be material. Ball has denied liability with respect to many of these lawsuits, claims and proceedings and is vigorously defending such lawsuits, claims and proceedings. The company carries various forms of commercial, property and casualty, and other forms of insurance; however, such insurance may not be applicable or adequate to cover the costs associated with a judgment against Ball with respect to these lawsuits, claims and proceedings. The company estimates that potential liabilities for all currently known and estimable environmental matters are approximately $37 million in the aggregate and have been included in other current liabilities and other noncurrent liabilities at March 31, 2018. As previously reported, the U.S. Environmental Protection Agency (USEPA) considers the company a PRP with respect to the Lowry Landfill site located east of Denver, Colorado. In 1992, the company was served with a lawsuit filed by the City and County of Denver (Denver) and Waste Management of Colorado, Inc., seeking contributions from the company and approximately 38 other companies. The company filed its answer denying the allegations of the complaint. Subsequently in 1992, the company was served with a third-party complaint filed by S.W. Shattuck Chemical Company, Inc., seeking contribution from the company and other companies for the costs associated with cleaning up the Lowry Landfill. The company denied the allegations of the complaint. Also in 1992, Ball entered into a settlement and indemnification agreement with Chemical Waste Management, Inc., and Waste Management of Colorado, Inc. (collectively Waste Management) and Denver pursuant to which Waste Management and Denver dismissed their lawsuit against the company, and Waste Management agreed to defend, indemnify and hold harmless the company from claims and lawsuits brought by governmental agencies and other parties relating to actions seeking contributions or remedial costs from the company for the clean-up of the site. Waste Management, Inc., has agreed to guarantee the obligations of Waste Management. Waste Management and Denver may seek additional payments from the company if the response costs related to the site exceed $319 million. In 2003 Waste Management, Inc., indicated that the cost of the site might exceed $319 million in 2030, approximately three years before the projected completion of the project. In February 2018, Waste Management reported that total project costs through 2016 were approximately $142 million. The company might also be responsible for payments (based on 1992 dollars) for any additional wastes that may have been disposed of by the company at the site but which are identified after the execution of the settlement agreement. While remediating the site, contaminants were encountered, which could add an additional clean-up cost of approximately $10 million. This additional clean-up cost could, in turn, add approximately $1 million to total site costs for the PRP group. At this time, there are no Lowry Landfill actions in which the company is actively involved. Based on the information available to the company at this time, we do not believe that this matter will have a material adverse effect upon the liquidity, results of operations or financial condition of the company. In November 2012, the USEPA wrote to the company asserting that it is one of at least 50 PRPs with respect to the Lower Duwamish site located in Seattle, Washington, based on the company’s ownership of a glass container plant prior to 1995, and notifying the company of a proposed remediation action plan. A site was selected to begin data review on over 30 industrial companies and government entities and at least two PRP groups have been discussing various allocation proposals. The USEPA issued the site Record of Decision (ROD) in December 2014. Ball submitted its initial responses to the allocator’s questionnaire in March 2015, and after reviewing submissions from the PRPs alleging deficiencies in certain of Ball’s responses, the allocator denied certain of the allegations and directed the company to answer others, to which Ball responded during the fourth quarter of 2016. A group of de minimis PRPs, including Ball, retained a technical consultant to assist with their positions vis-à-vis larger PRPs, and further presentations were made to the site allocator during the fourth quarter of 2017 and the first quarter of 2018. Total site remediation costs of $342 million, to cover remediation of approximately 200 acres of river bottom, are expected according to the proposed remediation action plan, which does not include $100 million that has already been spent, and which will be allocated among the numerous PRPs in due course. Based on the information available to the company at this time, we do not believe that this matter will have a material adverse effect upon the liquidity, results of operations or financial condition of the company. In February 2012, Ball Metal Beverage Container Corp. (BMBCC) filed an action against Crown Packaging Technology, Inc. (Crown) in the U.S. District Court for the Southern District of Ohio seeking a declaratory judgment that the manufacture, sale and use of certain ends by BMBCC and its customers do not infringe certain claims of Crown’s U.S. patents. Crown subsequently filed a counterclaim alleging infringement of certain claims in these patents seeking unspecified monetary damages, fees and declaratory and injunctive relief. The District Court issued a claim construction order at the end of December 2015 and held a scheduling conference on February 10, 2016, to determine the timeline for future steps in the litigation. The case was stayed by mutual agreement of the parties into the third quarter of 2016, during which Crown made preparations for its discovery with respect to certain ends previously produced by Rexam, and such discovery began during the first half of 2017. The parties attempted to mediate the case on August 1, 2017, but no progress was made, and the case continues as scheduled, with discovery expected to continue through the third quarter of 2018. Based on the information available to the company at the present time, the company does not believe that this matter will have a material adverse effect upon the liquidity, results of operations or financial condition of the company. A former Rexam Personal Care site in Annecy, France, was found in 2003 to be contaminated following a leak of chlorinated solvents (TCE) from an underground feedline. The site underwent extensive investigation and an active remediation treatment system was put in place in 2006. The business operating from the site was sold to Albea in 2013 and in turn to French company CATIDOM (operating as Reboul). Reboul vacated the site in September 2014, and the site reverted back to Rexam during the first quarter of 2015. As part of the site closure regulatory requirements, a new regulatory permit (Prefectoral Order) was issued in June 2016, which includes requirements to undertake a cost-benefit analysis and pilot studies of further treatment for the known residual solvent contamination following the shutdown of the current on-site treatment system. A new management plan will be proposed to the French Environmental Authorities (DREAL) during 2018. Based on the information available to the company at this time, we do not believe that this matter will have a material adverse effect upon the liquidity, results of operations or financial condition of the company. The company’s operations in Brazil are involved in various governmental assessments, principally related to claims for taxes on the internal transfer of inventory, gross sales taxes and indirect tax incentives. The company does not believe that the ultimate resolution of these matters will materially impact the company’s results of operations, financial position or cash flows. Under customary local regulations, the company’s Brazilian subsidiaries may need to post cash or other collateral if the process to challenge any administrative assessment proceeds to the Brazilian court system; however, the level of any potential cash or collateral required would not significantly impact the liquidity of those subsidiaries or Ball Corporation. During the first quarter of 2017, the Brazilian Supreme Court (the Court) ruled against the Brazilian tax authorities in a leading case related to the computation of certain indirect taxes. The Court ruled that the indirect tax base should not include a value-added tax known as “ICMS.” By removing the ICMS from the tax base, the Court effectively eliminated a “tax on tax.” The Court decision, in principle, affects all applicable judicial proceedings in progress. However, after publication of the decision in October 2017, the Brazilian tax authorities filed an appeal seeking clarification of certain matters, including the amount of ICMS to which taxpayers would be entitled in order to reduce their indirect tax base (i.e., the gross rate or net rate). The appeal also requested a modulation of the decision’s effects, which may limit its impact on taxpayers. Our Brazilian subsidiaries have paid to the Brazilian tax authorities the gross amounts of certain indirect taxes (which included ICMS in their tax base) and have filed lawsuits in 2014 and 2015, in order to challenge the legislation regarding those taxes. Pursuant to these lawsuits, we have requested reimbursement of prior excess tax payments. Taking into consideration that the Court may settle different premises for ICMS exclusion, which will be resolved only after the pending appeal is decided, we believe the outcome of this matter is uncertain at this time. The resolution of the appeal may result in a material reimbursement to the company from the Brazilian government, the amount of which cannot be estimated at this time. |
Indemnifications and Guarantees
Indemnifications and Guarantees | 3 Months Ended |
Mar. 31, 2018 | |
Indemnifications and Guarantees | |
Indemnifications and Guarantees | 21. Indemnifications and Guarantees General Guarantees The company or its appropriate consolidated direct or indirect subsidiaries, including Rexam and its subsidiaries, have made certain indemnities, commitments and guarantees under which the specified entity may be required to make payments in relation to certain transactions. These indemnities, commitments and guarantees include indemnities to the customers of the subsidiaries in connection with the sales of their packaging and aerospace products and services; guarantees to suppliers of subsidiaries of the company guaranteeing the performance of the respective entity under a purchase agreement, construction contract or other commitment; guarantees in respect of certain foreign subsidiaries’ pension plans; indemnities for liabilities associated with the infringement of third-party patents, trademarks or copyrights under various types of agreements; indemnities to various lessors in connection with facility, equipment, furniture and other personal property leases for certain claims arising from such leases; indemnities to governmental agencies in connection with the issuance of a permit or license to the company or a subsidiary; indemnities pursuant to agreements relating to certain joint ventures; indemnities in connection with the sale of businesses or substantially all of the assets and specified liabilities of businesses; and indemnities to directors, officers and employees of the company to the extent permitted under the laws of the State of Indiana and the United States of America. The duration of these indemnities, commitments and guarantees varies and, in certain cases, is indefinite. In addition, many of these indemnities, commitments and guarantees do not provide for any limitation on the maximum potential future payments the company could be obligated to make. As such, the company is unable to reasonably estimate its potential exposure under these items. Other than the indemnifications provided in connection with the sale of the Divestment Business, the company has not recorded any material liabilities for these indemnities, commitments and guarantees in the accompanying consolidated balance sheets. The company does, however, accrue for payments under promissory notes and other evidences of incurred indebtedness and for losses for any known contingent liability, including those that may arise from indemnifications, commitments and guarantees, when future payment is both reasonably estimable and probable. Finally, the company carries specific and general liability insurance policies and has obtained indemnities, commitments and guarantees from third-party purchasers, sellers and other contracting parties, which the company believes would, in certain circumstances, provide recourse to any claims arising from these indemnifications, commitments and guarantees. Debt Guarantees The company’s and its subsidiaries’ obligations under the senior notes and senior credit facilities (or, in the case of U.S. domiciled foreign subsidiaries under the senior credit facilities, the obligations of foreign credit parties only) are guaranteed on a full, unconditional and joint and several basis by certain of the company’s domestic subsidiaries and the domestic subsidiary borrowers, and obligations of other guarantors and the subsidiary borrowers under the senior credit facilities are guaranteed by the company, in each case with certain exceptions and subject to grace periods. These guarantees are required in support of the senior notes and senior credit facilities referred to above, are coterminous with the terms of the respective note indentures, senior notes and credit agreement and could be enforced by the holders of the obligations thereunder during the continuation of an event of default under the note indentures, the senior notes or the credit agreement or any other loan document in respect thereof. The maximum potential amounts which could be required to be paid under such guarantees are essentially equal to the then outstanding obligations under the respective senior notes or the credit agreement (or, in the case of U.S. domiciled foreign subsidiaries under the senior credit facilities, the obligations of foreign credit parties only), with certain exceptions. All obligations under the guarantees of the senior credit facilities are secured, with certain exceptions and subject to certain grace periods, by a valid first priority perfected lien or pledge on (i) 100 percent of the capital stock of each of the company's material wholly owned domestic subsidiaries directly owned by the company or any of its wholly owned domestic subsidiaries and (ii) 65 percent of the capital stock of each of the company's material wholly owned first-tier foreign subsidiaries directly owned by the company or any of its wholly owned domestic subsidiaries. In addition, the obligations of certain foreign borrowers and foreign pledgors under the loan documents will be secured, with certain exceptions and subject to certain grace periods, by a valid first priority perfected lien or pledge on 100 percent of the capital stock of certain of the company's material wholly owned foreign subsidiaries and material wholly owned U.S. domiciled foreign subsidiaries directly owned by the company or any of its wholly owned material subsidiaries. The company is not in default under the above senior notes or senior credit facilities. The condensed consolidating financial information for the guarantor and non-guarantor subsidiaries is presented in Note 22. Separate financial statements for the guarantor subsidiaries and the non-guarantor subsidiaries are not presented because management has determined that such financial statements are not required under the Securities and Exchange Commission (SEC) regulations. |
Subsidiary Guarantees of Debt
Subsidiary Guarantees of Debt | 3 Months Ended |
Mar. 31, 2018 | |
Subsidiary Guarantees of Debt | |
Subsidiary Guarantee of Debt | 22. Subsidiary Guarantees of Debt The following unaudited condensed consolidating financial information is presented in accordance with SEC Regulations S‑X Rule 3-10, Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered. For purposes of the presentation of unaudited condensed consolidating financial information, the subsidiaries of the company providing the guarantees are referred to as the guarantor subsidiaries, and subsidiaries of the company other than the guarantor subsidiaries are referred to as the non-guarantor subsidiaries. The eliminating adjustments substantively consist of intercompany transactions and the elimination of equity investments and earnings of subsidiaries. Separate financial statements for the guarantor subsidiaries and the non-guarantor subsidiaries are not presented because management has determined that such financial statements are not required under SEC regulations. The company’s senior notes are guaranteed on a full and unconditional guarantee joint and several basis by certain domestic subsidiaries of the company. Each of the guarantor subsidiaries is 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 is unaudited condensed consolidating financial information for the company, segregating the guarantor subsidiaries and non-guarantor subsidiaries, as of March 31, 2018, and December 31, 2017, and for the first quarter of 2018 and 2017. The information for the three months ended March 31, 2017, has been retrospectively adjusted to reflect the addition of three new subsidiary guarantors of the company’s debt obligations in March 2018. The unaudited condensed consolidating financial information presented below is not necessarily indicative of the financial position, results of operations, earnings or cash flows of the company or any of the company’s subsidiaries on a stand-alone basis. Condensed Consolidating Statement of Earnings For the Three Months Ended March 31, 2018 ($ in millions) Ball Guarantor Non-Guarantor Subsidiaries Eliminating Consolidated Net sales $ — $ 1,535 $ 1,432 $ (182) $ 2,785 Cost and expenses Cost of sales (excluding depreciation and amortization) — (1,306) (1,113) 182 (2,237) Depreciation and amortization (1) (52) (127) — (180) Selling, general and administrative (34) (41) (37) — (112) Business consolidation and other activities (13) (6) (11) — (30) Equity in results of subsidiaries 162 34 5 (201) — Intercompany 82 (42) (40) — — 196 (1,413) (1,323) (19) (2,559) Earnings (loss) before interest and taxes 196 122 109 (201) 226 Interest expense (76) 3 — — (73) Debt refinancing and other costs (1) — — — (1) Total interest expense (77) 3 — — (74) Earnings (loss) before taxes 119 125 109 (201) 152 Tax (provision) benefit 6 (17) (23) — (34) Equity in results of affiliates, net of tax — 3 4 — 7 Net earnings 125 111 90 (201) 125 Less net earnings attributable to noncontrolling interests — — — — — Net earnings attributable to Ball Corporation $ 125 $ 111 $ 90 $ (201) $ 125 Comprehensive earnings (loss) attributable to Ball Corporation $ 108 $ 108 $ 89 $ (197) $ 108 Condensed Consolidating Statement of Earnings For the Three Months Ended March 31, 2017 ($ in millions) Ball Guarantor Non-Guarantor Subsidiaries Eliminating Consolidated Net sales $ — $ 1,287 $ 1,203 $ (17) $ 2,473 Cost and expenses Cost of sales (excluding depreciation and amortization) — (1,062) (930) 17 (1,975) Depreciation and amortization (2) (47) (99) — (148) Selling, general and administrative (45) (48) (50) — (143) Business consolidation and other activities (51) 6 (10) — (55) Equity in results of subsidiaries 123 7 (7) (123) — Intercompany 81 (41) (40) — — 106 (1,185) (1,136) (106) (2,321) Earnings (loss) before interest and taxes 106 102 67 (123) 152 Interest expense (65) 1 (4) — (68) Debt refinancing and other costs — — — — — Total interest expense (65) 1 (4) — (68) Earnings (loss) before taxes 41 103 63 (123) 84 Tax (provision) benefit 27 (40) (9) — (22) Equity in results of affiliates, net of tax — 3 5 — 8 Net earnings 68 66 59 (123) 70 Less net earnings attributable to noncontrolling interests — — (2) — (2) Net earnings attributable to Ball Corporation $ 68 $ 66 $ 57 $ (123) $ 68 Comprehensive earnings (loss) attributable to Ball Corporation $ 196 $ 169 $ 142 $ (311) $ 196 Condensed Consolidating Balance Sheet March 31, 2018 ($ in millions) Ball Guarantor Non-Guarantor Eliminating Consolidated Assets Current assets Cash and cash equivalents $ — $ — $ 477 $ — $ 477 Receivables, net 4 489 1,597 — 2,090 Intercompany receivables 67 501 167 (735) — Inventories, net — 722 725 — 1,447 Other current assets 15 49 82 — 146 Total current assets 86 1,761 3,048 (735) 4,160 Noncurrent assets Property, plant and equipment, net 23 1,439 3,265 — 4,727 Investment in subsidiaries 8,837 3,945 397 (13,179) — Goodwill — 1,545 3,425 — 4,970 Intangible assets, net 15 458 1,959 — 2,432 Other assets 191 292 959 — 1,442 Total assets $ 9,152 $ 9,440 $ 13,053 $ (13,914) $ 17,731 Liabilities and Shareholders' Equity Current liabilities Short-term debt and current portion of long-term debt $ 157 $ — $ 180 $ — $ 337 Accounts payable 18 1,002 1,802 — 2,822 Intercompany payables (100) 120 715 (735) — Accrued employee costs 18 115 88 — 221 Other current liabilities 124 126 275 — 525 Total current liabilities 217 1,363 3,060 (735) 3,905 Noncurrent liabilities Long-term debt 7,118 1 12 — 7,131 Employee benefit obligations 329 827 328 — 1,484 Intercompany long-term notes (2,622) 864 1,758 — — Deferred taxes (109) 107 692 — 690 Other liabilities 186 48 149 — 383 Total liabilities 5,119 3,210 5,999 (735) 13,593 Common stock 1,100 2,463 4,286 (6,749) 1,100 Preferred stock — — 5 (5) — Retained earnings 5,114 4,345 2,939 (7,284) 5,114 Accumulated other comprehensive earnings (loss) (673) (578) (281) 859 (673) Treasury stock, at cost (1,508) — — — (1,508) Total Ball Corporation shareholders' equity 4,033 6,230 6,949 (13,179) 4,033 Noncontrolling interests — — 105 — 105 Total shareholders' equity 4,033 6,230 7,054 (13,179) 4,138 Total liabilities and shareholders' equity $ 9,152 $ 9,440 $ 13,053 $ (13,914) $ 17,731 Condensed Consolidating Balance Sheet December 31, 2017 ($ in millions) Ball Guarantor Non-Guarantor Eliminating Consolidated Assets Current assets Cash and cash equivalents $ 5 $ — $ 443 $ — $ 448 Receivables, net 3 260 1,371 — 1,634 Intercompany receivables 39 1,285 102 (1,426) — Inventories, net — 673 853 — 1,526 Other current assets 9 52 89 — 150 Total current assets 56 2,270 2,858 (1,426) 3,758 Noncurrent assets Property, plant and equipment, net 20 1,364 3,226 — 4,610 Investment in subsidiaries 8,639 3,885 389 (12,913) — Goodwill — 1,545 3,388 — 4,933 Intangible assets, net 15 470 1,977 — 2,462 Other assets 185 282 939 — 1,406 Total assets $ 8,915 $ 9,816 $ 12,777 $ (14,339) $ 17,169 Liabilities and Shareholders' Equity Current liabilities Short-term debt and current portion of long-term debt $ 351 $ — $ 102 $ — $ 453 Accounts payable 14 1,084 1,664 — 2,762 Intercompany payables 705 82 639 (1,426) — Accrued employee costs 28 182 142 — 352 Other current liabilities 170 111 259 — 540 Total current liabilities 1,268 1,459 2,806 (1,426) 4,107 Noncurrent liabilities Long-term debt 6,504 — 14 — 6,518 Employee benefit obligations 333 811 319 — 1,463 Intercompany long-term notes (3,172) 1,305 1,867 — — Deferred taxes (109) 107 697 — 695 Other liabilities 150 50 140 — 340 Total liabilities 4,974 3,732 5,843 (1,426) 13,123 Common stock 1,084 2,463 4,286 (6,749) 1,084 Preferred stock — — 5 (5) — Retained earnings 4,987 4,196 2,818 (7,014) 4,987 Accumulated other comprehensive earnings (loss) (656) (575) (280) 855 (656) Treasury stock, at cost (1,474) — — — (1,474) Total Ball Corporation shareholders' equity 3,941 6,084 6,829 (12,913) 3,941 Noncontrolling interests — — 105 — 105 Total shareholders' equity 3,941 6,084 6,934 (12,913) 4,046 Total liabilities and shareholders' equity $ 8,915 $ 9,816 $ 12,777 $ (14,339) $ 17,169 Condensed Consolidating Statement of Cash Flows For the Three Months Ended March 31, 2018 ($ in millions) Ball Guarantor Non-Guarantor Consolidated Cash provided by (used in) operating activities $ 21 $ (226) $ 131 $ (74) Cash flows from investing activities Capital expenditures (3) (155) (84) (242) Business dispositions, net of cash sold (45) — — (45) Other, net (2) 2 3 3 Cash provided by (used in) investing activities (50) (153) (81) (284) Cash flows from financing activities Long-term borrowings 1,160 1 1 1,162 Repayments of long-term borrowings (680) (1) (2) (683) Net change in short-term borrowings (89) — 75 (14) Proceeds from issuances of common stock, net of shares used for taxes — — — — Acquisitions of treasury stock (35) — — (35) Common stock dividends (35) — — (35) Intercompany (287) 379 (92) — Other, net (10) — (1) (11) Cash provided by (used in) financing activities 24 379 (19) 384 Effect of exchange rate changes on cash — — 1 1 Change in cash, cash equivalents and restricted cash (5) — 32 27 Cash, cash equivalents and restricted cash – beginning of period 5 — 454 459 Cash, cash equivalents and restricted cash – end of period $ — $ — $ 486 $ 486 Condensed Consolidating Statement of Cash Flows For the Three Months Ended March 31, 2017 ($ in millions) Ball Guarantor Non-Guarantor Consolidated Cash provided by (used in) operating activities $ 7 $ (182) $ (226) $ (401) Cash flows from investing activities Capital expenditures (4) (82) (39) (125) Business dispositions, net of cash sold — 31 — 31 Other, net 2 13 (12) 3 Cash provided by (used in) investing activities (2) (38) (51) (91) Cash flows from financing activities Long-term borrowings 185 — — 185 Repayments of long-term borrowings (48) — (2) (50) Net change in short-term borrowings 116 1 156 273 Proceeds from issuances of common stock, net of shares used for taxes (1) — — (1) Acquisitions of treasury stock (3) — — (3) Common stock dividends (23) — — (23) Intercompany (229) 232 (3) — Other, net — (1) — (1) Cash provided by (used in) financing activities (3) 232 151 380 Effect of exchange rate changes on cash 1 — (31) (30) Change in cash, cash equivalents and restricted cash 3 12 (157) (142) Cash, cash equivalents and restricted cash – beginning of period 2 (11) 616 607 Cash, cash equivalents and restricted cash – end of period $ 5 $ 1 $ 459 $ 465 |
Accounting Pronouncements (Poli
Accounting Pronouncements (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Pronouncements | |
Accounting Pronouncements Recently Adopted | Recently Adopted Accounting Standards Revenue from Contracts with Customers On January 1, 2018, Ball adopted Accounting Standard Codification 606, “Revenue from Contracts with Customers,” and all related amendments (collectively, the new revenue standard) applying the modified retrospective method to all contracts that were not completed as of January 1, 2018. The cumulative effect of initially applying the new revenue standard was recognized as an adjustment to the retained earnings balance as of January 1, 2018. Comparative periods have not been restated and continue to be reported under the accounting standards in effect for those periods. The cumulative effect of the changes made to the consolidated January 1, 2018, balance sheet for the adoption of the new revenue standard is as follows: ($ in millions) Balance at December 31, 2017 Adjustments Due to Adoption Balance at January 1, Assets Receivables, net $ 1,634 $ 307 $ 1,941 Inventories, net 1,526 (241) 1,285 Other current assets 150 (4) 146 Liabilities Other current liabilities 540 17 557 Deferred taxes 695 7 702 Shareholders' equity Retained earnings 4,987 37 5,024 Accumulated other comprehensive earnings (loss) (656) 1 (655) In accordance with the disclosure requirements of the new revenue standard, the impact of adoption on our consolidated statement of earnings and balance sheet was as follows: Three Months Ended March 31, 2018 ($ in millions, except per share amounts) As Reported Balances Without Adoption Effect of Net sales $ 2,785 $ 2,752 $ 33 Cost of sales (excluding depreciation and amortization) (2,237) (2,206) (31) Earnings before interest and taxes 226 224 2 Tax (provision) benefit (34) (34) — Net earnings attributable to Ball Corporation 125 123 2 Basic earnings per share 0.36 0.35 0.01 Diluted earnings per share 0.35 0.34 0.01 March 31, 2018 ($ in millions) As Reported Balances Without Adoption Effect of Change Assets Receivables, net $ 2,090 $ 1,745 $ 345 Inventories, net 1,447 1,720 (273) Other current assets 146 150 (4) Liabilities Other current liabilities 525 504 21 Deferred taxes 690 683 7 Shareholders' equity Retained earnings 5,114 5,075 39 Accumulated other comprehensive earnings (loss) (673) (674) 1 The following summarizes the significant changes to the company’s unaudited condensed consolidated statement of earnings and consolidated balance sheet as a result of the new revenue standard adopted on January 1, 2018, compared to if the company had continued to recognize sales under the previous revenue recognition guidance: · For the metal beverage packaging segments and, to a lesser extent, in our food and aerosol packaging segment, the new revenue standard accelerated the recognition of certain sales to be over time such that a portion of sales was recognized prior to shipment or delivery of goods. The accelerated recognition of sales caused the company’s inventory to decrease with an offsetting increase to unbilled receivables to the extent the amounts had not yet been invoiced to the customer and right to payment was unconditional. · For the aerospace segment, sales from the majority of the company’s contracts continue to be recognized over time under the “cost-to-cost” method based on the continuous transfer of control to the customer, which is consistent with how sales were recognized under previous revenue recognition guidance. Therefore, no cumulative adjustment was required to be made upon adoption. · Ball recognized a contract liability when the customer’s payment, or Ball’s unconditional right to that consideration, preceded the company’s performance. Share-Based Compensation In May 2017, amendments to existing accounting guidance were issued to provide clarity and reduce diversity in practice, cost and complexity when applying stock compensation accounting guidance regarding modifications to the terms or conditions of a share-based payment award. The amendments specify that all changes to the terms and conditions of a share-based payment award will require an entity to apply modification accounting unless all of the following are met: (1) the fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified, (2) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified and (3) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The guidance was applied prospectively on January 1, 2018, and it did not have an impact on the company’s unaudited condensed consolidated financial statements. Pension and Postretirement Benefit Costs In March 2017, amendments to existing accounting guidance were issued to change the presentation of net periodic pension cost and net periodic postretirement benefit cost. Employers are required to report the service cost component in the same line item as other compensation costs arising from services rendered by the associated employees during the period. The other components of net periodic pension cost and net periodic postretirement benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. The amendments also permit only the service cost component of net benefit cost to be eligible for capitalization. This guidance was adopted by the company on January 1, 2018, and the capitalization of the service cost component was applied on a prospective basis. Curtailment and settlement losses are reported by the company in business consolidation and other activities. All other non-service components are immaterial and will be presented in selling, general and administrative (SG&A) expenses beginning in 2018. These non-service costs were reported in both cost of sales and SG&A in prior periods; however, due to immateriality in all prior periods presented, no retrospective adjustments were considered necessary. Such costs were $6 million for the first quarter of 2017 and $21 million for the full year 2017. Sales of Nonfinancial Assets In February 2017, amendments to existing accounting guidance were issued to clarify the scope and to add guidance for partial sales of nonfinancial assets. The guidance requires that all entities account for the derecognition of a business in accordance with guidance for consolidation, including instances in which the business is considered to be in substance real estate. This guidance was applied on January 1, 2018, using a modified retrospective approach and did not have a material impact on the company’s unaudited condensed consolidated financial statements. Definition of a Business In January 2017, amendments to existing accounting guidance were issued to further clarify the definition of a business in determining whether or not a company has acquired or sold a business. The amendments provide a screen to determine when an integrated set of assets and activities (collectively referred to as a “set”) is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. If the screen is not met, the amendments in this update (1) require that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output and (2) remove the evaluation of whether a market participant could replace missing elements. The amendments also narrow the definition of the term “output” so that the term is consistent with how outputs are described in the new guidance for revenue recognition. The guidance was applied prospectively for Ball on January 1, 2018, and did not have an impact on the company’s unaudited condensed consolidated financial statements. Statement of Cash Flows In November 2016, accounting guidance was issued requiring the statement of cash flows to reconcile the change in the total of cash, cash equivalents and restricted cash or restricted cash equivalents. This guidance was applied retrospectively on January 1, 2018, and the impact on the 2017 statement of cash flow was not material. The impact on the 2016 statement of cash flows was material due to approximately $2 billion of restricted cash held by the company at December 2015, in an acquisition escrow account. In July 2016, the funds in the escrow account were used to pay a portion of the cash component of the acquisition price of Rexam. The impact on the statement of cash flows for the three months ended March 31, 2017, was a $3 million reduction in cash flows from operating activities. In August 2016, accounting guidance was issued addressing the following eight specific cash flow issues: · Debt prepayment or debt extinguishment costs · Settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing · Contingent consideration payments made after a business combination · Proceeds from the settlement of insurance claims · Proceeds from the settlement of corporate-owned life insurance policies (including bank-owned life insurance policies) · Distributions received from equity method investees · Beneficial interests in securitization transactions · Separately identifiable cash flows and, for cash flows with aspects of more than one class which are not separately identifiable, classification based on the predominant source for those cash flows This guidance was applied retrospectively on January 1, 2018, and did not have a material impact on the company’s unaudited condensed consolidated statement of cash flows. Intra-Entity Transfers In October 2016, amendments to existing accounting guidance were issued that require entities to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs, as opposed to when the asset is sold to an unrelated third party. The amendments also eliminate the exception for an intra-entity transfer of an asset other than inventory. This guidance was applied on a modified retrospective basis on January 1, 2018, and did not have a material impact on the company’s unaudited condensed consolidated financial statements. Financial Assets and Liabilities In January 2016, accounting guidance was issued on the classification and measurement of financial assets and liabilities (equity securities and financial liabilities) under the fair value option and the presentation and disclosure requirements for financial instruments. Subsequent guidance was issued in February 2018 to clarify certain aspects of the guidance issued in January 2016. The guidance modifies how entities measure equity investments and present changes in the fair value of financial liabilities. Under the new guidance, entities have to measure equity investments that do not result in consolidation and are not accounted for under the equity method at fair value and recognize any related changes in fair value in net income unless the investments qualify for the new practicality exception. An exception applies to those equity investments that do not have a readily determinable fair value and do not qualify for the practical expedient to estimate fair value under the guidance and, as such, these investments may be measured at cost. The guidance was applied on January 1, 2018, and did not have a material impact on the company’s unaudited condensed consolidated financial statements . |
New Accounting Guidance | New Accounting Guidance Stranded Tax Effects In February 2018, accounting guidance was issued to permit the reclassification from accumulated other comprehensive income to retained earnings of stranded tax effects resulting from the U.S. Tax Cuts and Jobs Act signed into law in December 2017. The guidance is effective for Ball on January 1, 2019, and the company is currently assessing whether or not to early adopt the new guidance. Financial Assets In June 2016, amendments to existing guidance were issued requiring financial assets or a group of financial assets measured at amortized cost basis to be presented at the net amount expected to be collected when finalized. The allowance for credit losses is a valuation account that will be deducted from the amortized cost basis of the financial asset to present the net carrying value at the amount expected to be collected on the financial asset. This guidance affects loans, debt securities, trade receivables, net investments in leases, off-balance-sheet credit exposures, reinsurance receivables and any other financial assets not excluded from the scope that have the contractual right to receive cash. The guidance will be effective on January 1, 2020. The company is currently assessing the impact that the adoption of this new guidance will have on its consolidated financial statements. Lease Accounting In February 2016, lease accounting guidance was issued which, for operating leases, will require a lessee to recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, on its balance sheet. The guidance also requires a lessee to recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term, generally on a straight-line basis. We have established a cross-functional implementation team, which includes representatives from all of our business segments. We are utilizing a bottoms-up approach to analyze the impact of the new standard by reviewing our current lease population, including completeness, to identify potential accounting, data and other operational changes that might be required under the new guidance. In addition, we are assessing changes to our business processes, systems and controls to support recognition and disclosure under the standard upon adoption. The guidance will be effective for Ball on January 1, 2019, and it is expected that a material amount of lease assets and liabilities will be recorded on its consolidated balance sheet. |
Accounting Pronouncements (Tabl
Accounting Pronouncements (Tables) - ASU 2014-09 | 3 Months Ended |
Mar. 31, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Cumulative effect of change | ($ in millions) Balance at December 31, 2017 Adjustments Due to Adoption Balance at January 1, Assets Receivables, net $ 1,634 $ 307 $ 1,941 Inventories, net 1,526 (241) 1,285 Other current assets 150 (4) 146 Liabilities Other current liabilities 540 17 557 Deferred taxes 695 7 702 Shareholders' equity Retained earnings 4,987 37 5,024 Accumulated other comprehensive earnings (loss) (656) 1 (655) |
Schedule of impact of adoption of new accounting pronouncements on current period financial statements | Three Months Ended March 31, 2018 ($ in millions, except per share amounts) As Reported Balances Without Adoption Effect of Net sales $ 2,785 $ 2,752 $ 33 Cost of sales (excluding depreciation and amortization) (2,237) (2,206) (31) Earnings before interest and taxes 226 224 2 Tax (provision) benefit (34) (34) — Net earnings attributable to Ball Corporation 125 123 2 Basic earnings per share 0.36 0.35 0.01 Diluted earnings per share 0.35 0.34 0.01 March 31, 2018 ($ in millions) As Reported Balances Without Adoption Effect of Change Assets Receivables, net $ 2,090 $ 1,745 $ 345 Inventories, net 1,447 1,720 (273) Other current assets 146 150 (4) Liabilities Other current liabilities 525 504 21 Deferred taxes 690 683 7 Shareholders' equity Retained earnings 5,114 5,075 39 Accumulated other comprehensive earnings (loss) (673) (674) 1 |
Business Segment Information (T
Business Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Business Segment Information | |
Summary of business by segment | Three Months Ended March 31, ($ in millions) 2018 2017 Net sales Beverage packaging, North and Central America $ 1,035 $ 949 Beverage packaging, South America 459 371 Beverage packaging, Europe 609 508 Food and aerosol packaging 275 272 Aerospace 264 236 Reportable segment sales 2,642 2,336 Other 143 137 Net sales $ 2,785 $ 2,473 Comparable operating earnings Beverage packaging, North and Central America $ 113 $ 123 Beverage packaging, South America 98 58 Beverage packaging, Europe 60 47 Food and aerosol packaging 23 21 Aerospace 25 21 Reportable segment comparable operating earnings 319 270 Reconciling items Other (a) (19) (31) Business consolidation and other activities (30) (55) Amortization of acquired Rexam intangibles (44) (32) Earnings before interest and taxes 226 152 Interest expense (73) (68) Debt refinancing and other costs (1) — Total interest expense (74) (68) Earnings before taxes 152 84 Tax (provision) benefit (34) (22) Equity in results of affiliates, net of tax 7 8 Net earnings 125 70 Net earnings attributable to noncontrolling interests — (2) Net earnings attributable to Ball Corporation $ 125 $ 68 (a) Includes undistributed corporate expenses, net, of $22 million and $45 million for the first quarters of 2018 and 2017, respectively. |
Revenue from Contracts With C31
Revenue from Contracts With Customers (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of the disaggregation of revenue by timing of transfer of control | Three Months Ended March 31, 2018 ($ in millions) Point in Time Over Time Total Total net sales $ 662 $ 2,123 $ 2,785 |
Schedule of balances of contract liabilities | Contracts Contract Liabilities Liabilities ($ in millions) (Current) (Noncurrent) Balance at December 31, 2017 $ 45 $ — Increase 7 6 Balance at March 31, 2018 $ 52 $ 6 |
Schedule of transaction price allocated to remaining performance obligations | ($ in millions) Rolling Twelve Months Thereafter Total Sales expected to be recognized on multi-year contracts in place as of March 31, 2018 $ 862 $ 777 $ 1,639 |
Business Consolidation and Ot32
Business Consolidation and Other Activities (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Business Consolidation and Other Activities | |
Summary of business consolidation and other activity (charges) / income included in the condensed consolidated statements of earnings | Three Months Ended March 31, ($ in millions) 2018 2017 Beverage packaging, North and Central America $ (3) $ (4) Beverage packaging, South America — 3 Beverage packaging, Europe (10) (3) Food and aerosol packaging — 10 Other (17) (61) $ (30) $ (55) |
Summary by segment of the activity in the business consolidation reserves | ($ in millions) Beverage Packaging, North & Central America Beverage Packaging, Europe Food & Aerosol Packaging Total Balance at December 31, 2017 $ 26 $ 41 $ 1 $ 68 Charges in earnings (5) 10 — 5 Cash payments and other activity (1) (33) (1) (35) Balance at March 31, 2018 $ 20 $ 18 $ — $ 38 |
Cash, Cash Equivalents and Re33
Cash, Cash Equivalents and Restricted Cash (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of cash, cash equivalents and restricted cash | March 31, ($ in millions) 2018 2017 Beginning of period: Cash and cash equivalents $ 448 $ 597 Current restricted cash (included in other current assets) 10 9 Noncurrent restricted cash (included in other assets) 1 1 Total cash, cash equivalents and restricted cash $ 459 $ 607 End of period: Cash and cash equivalents $ 477 $ 458 Current restricted cash (included in other current assets) 8 6 Noncurrent restricted cash (included in other assets) 1 1 Total cash, cash equivalents and restricted cash $ 486 $ 465 |
Receivables (Tables)
Receivables (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Receivables | |
Schedule of receivables | March 31, December 31, ($ in millions) 2018 2017 Trade accounts receivable $ 1,332 $ 1,206 Unbilled receivables 429 147 Less allowance for doubtful accounts (10) (10) Net trade accounts receivable 1,751 1,343 Other receivables 339 291 $ 2,090 $ 1,634 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Inventories | |
Schedule of inventories | March 31, December 31, ($ in millions) 2018 2017 Raw materials and supplies $ 719 $ 691 Work-in-process and finished goods 794 902 Less inventory reserves (66) (67) $ 1,447 $ 1,526 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Property, Plant and Equipment | |
Schedule of property, plant and equipment | March 31, December 31, ($ in millions) 2018 2017 Land $ 174 $ 172 Buildings 1,391 1,390 Machinery and equipment 5,378 5,282 Construction-in-progress 666 542 7,609 7,386 Accumulated depreciation (2,882) (2,776) $ 4,727 $ 4,610 |
Goodwill (Tables)
Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets | |
Schedule of goodwill | ($ in millions) Beverage Beverage Beverage Food Aerospace Other Total Balance at December 31, 2017 $ 1,275 $ 1,299 $ 1,531 $ 609 $ 40 $ 179 $ 4,933 Effects of currency exchange — — 33 4 — — 37 Balance at March 31, 2018 $ 1,275 $ 1,299 $ 1,564 $ 613 $ 40 $ 179 $ 4,970 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets | |
Schedule of Finite-Lived Intangible Assets | March 31, December 31, ($ in millions) 2018 2017 Acquired Rexam intangibles (net of accumulated amortization of $284 million at March 31, 2018, and $246 million at December 31, 2017) $ 2,286 $ 2,303 Capitalized software (net of accumulated amortization of $134 million at March 31, 2018, and $129 million at December 31, 2017) 82 84 Other intangibles (net of accumulated amortization of $173 million at March 31, 2018, and $163 million at December 31, 2017) 64 75 $ 2,432 $ 2,462 |
Other Assets (Tables)
Other Assets (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Other Assets.. | |
Schedule of other assets | March 31, December 31, ($ in millions) 2018 2017 Long-term deferred tax assets $ 316 $ 325 Long-term pension assets 532 504 Investments in affiliates 281 274 Company and trust-owned life insurance 168 160 Other 145 143 $ 1,442 $ 1,406 |
Debt and Interest Costs (Tables
Debt and Interest Costs (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt and Interest Costs | |
Schedule of long-term debt | March 31, December 31, ($ in millions) 2018 2017 Senior Notes 5.25% due July 2025 $ 1,000 $ 1,000 4.375% due December 2020 1,000 1,000 4.00% due November 2023 1,000 1,000 4.375%, euro denominated, due December 2023 863 840 5.00% due March 2022 750 750 4.875% due March 2026 750 — 3.50%, euro denominated, due December 2020 493 480 Senior Credit Facilities, due March 2021 (at variable rates) Term A loan, due June 2021 998 1,313 Multi-currency, U.S. dollar revolver, due March 2021 330 285 Other (including debt issuance costs) (44) (37) 7,140 6,631 Less: Current portion of long-term debt (9) (113) $ 7,131 $ 6,518 |
Employee Benefit Obligations (T
Employee Benefit Obligations (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Employee Benefit Obligations | |
Schedule of employee benefit obligations | March 31, December 31, ($ in millions) 2018 2017 Underfunded defined benefit pension liabilities $ 957 $ 945 Less: Current portion (23) (27) Long-term defined benefit pension liabilities 934 918 Long-term retiree medical liabilities 198 196 Deferred compensation plans 275 275 Other 77 74 $ 1,484 $ 1,463 |
Components of net periodic benefit cost | Three Months Ended March 31, 2018 2017 ($ in millions) U.S. Foreign Total U.S. Foreign Total Ball-sponsored plans: Service cost $ 13 $ 4 $ 17 $ 12 $ 4 $ 16 Interest cost 24 18 42 33 22 55 Expected return on plan assets (27) (27) (54) (33) (26) (59) Recognized net actuarial loss 10 1 11 9 1 10 Net periodic benefit cost for Ball sponsored plans 20 (4) 16 21 1 22 Net periodic benefit cost for multi-employer plans — — — 1 — 1 Total net periodic benefit cost $ 20 $ (4) $ 16 $ 22 $ 1 $ 23 |
Shareholders_ Equity and Comp42
Shareholders’ Equity and Comprehensive Earnings (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Shareholders’ Equity and Comprehensive Earnings | |
Schedule of activity related to accumulated other comprehensive earnings (loss) | ($ in millions) Foreign Currency Translation (Net of Tax) Pension and Other Postretirement Benefits (Net of Tax) Effective Derivatives (Net of Tax) Accumulated Other Comprehensive Earnings (Loss) Balance at December 31, 2017 $ (307) $ (362) $ 13 $ (656) Other comprehensive earnings (loss) before reclassifications 14 5 (57) (38) Amounts reclassified from accumulated other comprehensive earnings (loss) — 7 14 21 Balance at March 31, 2018 $ (293) $ (350) $ (30) $ (673) |
Stock-Based Compensation Prog43
Stock-Based Compensation Programs (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Stock-Based Compensation Programs | |
Schedule of weighted average assumptions used for estimating fair values of options | January 2018 January 2017 Expected dividend yield 1.03 % 0.68 % Expected stock price volatility 21.98 % 20.49 % Risk-free interest rate 2.47 % 2.07 % Expected life of options (in years) 6.10 years 5.94 years |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings and Dividends Per Share | |
Schedule of earnings per share | Three Months Ended March 31, ($ in millions, except per share amounts; shares in thousands) 2018 2017 Net earnings attributable to Ball Corporation $ 125 $ 68 Basic weighted average common shares (a) 350,215 350,048 Effect of dilutive securities (a) 7,337 7,886 Weighted average shares applicable to diluted earnings per share (a) 357,552 357,934 Per basic share (a) $ 0.36 $ 0.19 Per diluted share (a) $ 0.35 $ 0.19 (a) Amounts in 2017 have been retrospectively adjusted for the two-for-one stock split that was effective on May 16, 2017. |
Financial Instruments and Ris45
Financial Instruments and Risk Management (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Financial Instruments and Risk Management | |
Schedule of fair value of derivative instruments | March 31, 2018 December 31, 2017 ($ in millions) Derivatives Derivatives not Total Derivatives Derivatives not Total Assets: Commodity contracts $ 30 $ 5 $ 35 $ 46 $ 3 $ 49 Foreign currency contracts 3 6 9 5 10 15 Total current derivative contracts $ 33 $ 11 $ 44 $ 51 $ 13 $ 64 Commodity contracts $ 1 $ — $ 1 $ 6 $ — $ 6 Total noncurrent derivative contracts $ 1 $ — $ 1 $ 6 $ — $ 6 Liabilities: Commodity contracts $ 15 $ 4 $ 19 $ 4 $ 4 $ 8 Foreign currency contracts 1 12 13 — 21 21 Interest rate and other contracts — 2 2 — 2 2 Total current derivative contracts $ 16 $ 18 $ 34 $ 4 $ 27 $ 31 Commodity contracts $ 5 $ — $ 5 $ — $ — $ — Foreign currency contracts 1 — 1 — — — Interest rate and other contracts 164 — 164 117 3 120 Total noncurrent derivative contracts $ 170 $ — $ 170 $ 117 $ 3 $ 120 |
Schedule of impact on earnings from derivative instruments | Three Months Ended March 31, 2018 2017 ($ in millions) Location of Gain (Loss) Cash Flow Gain (Loss) on Cash Flow Gain (Loss) on Commodity contracts - manage exposure to customer pricing Net sales $ (3) $ 1 $ (3) $ — Commodity contracts - manage exposure to supplier pricing Cost of sales 10 — 8 — Foreign currency contracts - manage general exposure with the business Selling, general and administrative — (11) — (15) Foreign currency contracts - manage exposure for proposed acquisition of Rexam Business consolidation and other activities — — 3 — Cross-currency swaps - manage intercompany currency exposure within the business Selling, general and administrative (29) — (17) — Cross-currency swaps - manage intercompany currency exposure within the business Interest expense 3 — — — Equity contracts Selling, general and administrative — 4 — (2) Total $ (19) $ (6) $ (9) $ (17) |
Schedule of changes in accumulated other comprehensive earnings (loss) for effective derivatives | Three Months Ended March 31, ($ in millions) 2018 2017 Amounts reclassified into earnings: Commodity contracts $ (7) $ (5) Cross-currency swap contracts 26 17 Currency exchange contracts — (3) Change in fair value of cash flow hedges: Commodity contracts (30) 51 Cross-currency swap contracts (39) (12) Currency exchange contracts (1) 3 Foreign currency and tax impacts 8 6 $ (43) $ 57 |
Subsidiary Guarantees of Debt (
Subsidiary Guarantees of Debt (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Subsidiary Guarantees of Debt | |
Schedule of Condensed Consolidating Statement of Earnings | Condensed Consolidating Statement of Earnings For the Three Months Ended March 31, 2018 ($ in millions) Ball Guarantor Non-Guarantor Subsidiaries Eliminating Consolidated Net sales $ — $ 1,535 $ 1,432 $ (182) $ 2,785 Cost and expenses Cost of sales (excluding depreciation and amortization) — (1,306) (1,113) 182 (2,237) Depreciation and amortization (1) (52) (127) — (180) Selling, general and administrative (34) (41) (37) — (112) Business consolidation and other activities (13) (6) (11) — (30) Equity in results of subsidiaries 162 34 5 (201) — Intercompany 82 (42) (40) — — 196 (1,413) (1,323) (19) (2,559) Earnings (loss) before interest and taxes 196 122 109 (201) 226 Interest expense (76) 3 — — (73) Debt refinancing and other costs (1) — — — (1) Total interest expense (77) 3 — — (74) Earnings (loss) before taxes 119 125 109 (201) 152 Tax (provision) benefit 6 (17) (23) — (34) Equity in results of affiliates, net of tax — 3 4 — 7 Net earnings 125 111 90 (201) 125 Less net earnings attributable to noncontrolling interests — — — — — Net earnings attributable to Ball Corporation $ 125 $ 111 $ 90 $ (201) $ 125 Comprehensive earnings (loss) attributable to Ball Corporation $ 108 $ 108 $ 89 $ (197) $ 108 Condensed Consolidating Statement of Earnings For the Three Months Ended March 31, 2017 ($ in millions) Ball Guarantor Non-Guarantor Subsidiaries Eliminating Consolidated Net sales $ — $ 1,287 $ 1,203 $ (17) $ 2,473 Cost and expenses Cost of sales (excluding depreciation and amortization) — (1,062) (930) 17 (1,975) Depreciation and amortization (2) (47) (99) — (148) Selling, general and administrative (45) (48) (50) — (143) Business consolidation and other activities (51) 6 (10) — (55) Equity in results of subsidiaries 123 7 (7) (123) — Intercompany 81 (41) (40) — — 106 (1,185) (1,136) (106) (2,321) Earnings (loss) before interest and taxes 106 102 67 (123) 152 Interest expense (65) 1 (4) — (68) Debt refinancing and other costs — — — — — Total interest expense (65) 1 (4) — (68) Earnings (loss) before taxes 41 103 63 (123) 84 Tax (provision) benefit 27 (40) (9) — (22) Equity in results of affiliates, net of tax — 3 5 — 8 Net earnings 68 66 59 (123) 70 Less net earnings attributable to noncontrolling interests — — (2) — (2) Net earnings attributable to Ball Corporation $ 68 $ 66 $ 57 $ (123) $ 68 Comprehensive earnings (loss) attributable to Ball Corporation $ 196 $ 169 $ 142 $ (311) $ 196 |
Schedule of Condensed Consolidating Balance Sheet | Condensed Consolidating Balance Sheet March 31, 2018 ($ in millions) Ball Guarantor Non-Guarantor Eliminating Consolidated Assets Current assets Cash and cash equivalents $ — $ — $ 477 $ — $ 477 Receivables, net 4 489 1,597 — 2,090 Intercompany receivables 67 501 167 (735) — Inventories, net — 722 725 — 1,447 Other current assets 15 49 82 — 146 Total current assets 86 1,761 3,048 (735) 4,160 Noncurrent assets Property, plant and equipment, net 23 1,439 3,265 — 4,727 Investment in subsidiaries 8,837 3,945 397 (13,179) — Goodwill — 1,545 3,425 — 4,970 Intangible assets, net 15 458 1,959 — 2,432 Other assets 191 292 959 — 1,442 Total assets $ 9,152 $ 9,440 $ 13,053 $ (13,914) $ 17,731 Liabilities and Shareholders' Equity Current liabilities Short-term debt and current portion of long-term debt $ 157 $ — $ 180 $ — $ 337 Accounts payable 18 1,002 1,802 — 2,822 Intercompany payables (100) 120 715 (735) — Accrued employee costs 18 115 88 — 221 Other current liabilities 124 126 275 — 525 Total current liabilities 217 1,363 3,060 (735) 3,905 Noncurrent liabilities Long-term debt 7,118 1 12 — 7,131 Employee benefit obligations 329 827 328 — 1,484 Intercompany long-term notes (2,622) 864 1,758 — — Deferred taxes (109) 107 692 — 690 Other liabilities 186 48 149 — 383 Total liabilities 5,119 3,210 5,999 (735) 13,593 Common stock 1,100 2,463 4,286 (6,749) 1,100 Preferred stock — — 5 (5) — Retained earnings 5,114 4,345 2,939 (7,284) 5,114 Accumulated other comprehensive earnings (loss) (673) (578) (281) 859 (673) Treasury stock, at cost (1,508) — — — (1,508) Total Ball Corporation shareholders' equity 4,033 6,230 6,949 (13,179) 4,033 Noncontrolling interests — — 105 — 105 Total shareholders' equity 4,033 6,230 7,054 (13,179) 4,138 Total liabilities and shareholders' equity $ 9,152 $ 9,440 $ 13,053 $ (13,914) $ 17,731 Condensed Consolidating Balance Sheet December 31, 2017 ($ in millions) Ball Guarantor Non-Guarantor Eliminating Consolidated Assets Current assets Cash and cash equivalents $ 5 $ — $ 443 $ — $ 448 Receivables, net 3 260 1,371 — 1,634 Intercompany receivables 39 1,285 102 (1,426) — Inventories, net — 673 853 — 1,526 Other current assets 9 52 89 — 150 Total current assets 56 2,270 2,858 (1,426) 3,758 Noncurrent assets Property, plant and equipment, net 20 1,364 3,226 — 4,610 Investment in subsidiaries 8,639 3,885 389 (12,913) — Goodwill — 1,545 3,388 — 4,933 Intangible assets, net 15 470 1,977 — 2,462 Other assets 185 282 939 — 1,406 Total assets $ 8,915 $ 9,816 $ 12,777 $ (14,339) $ 17,169 Liabilities and Shareholders' Equity Current liabilities Short-term debt and current portion of long-term debt $ 351 $ — $ 102 $ — $ 453 Accounts payable 14 1,084 1,664 — 2,762 Intercompany payables 705 82 639 (1,426) — Accrued employee costs 28 182 142 — 352 Other current liabilities 170 111 259 — 540 Total current liabilities 1,268 1,459 2,806 (1,426) 4,107 Noncurrent liabilities Long-term debt 6,504 — 14 — 6,518 Employee benefit obligations 333 811 319 — 1,463 Intercompany long-term notes (3,172) 1,305 1,867 — — Deferred taxes (109) 107 697 — 695 Other liabilities 150 50 140 — 340 Total liabilities 4,974 3,732 5,843 (1,426) 13,123 Common stock 1,084 2,463 4,286 (6,749) 1,084 Preferred stock — — 5 (5) — Retained earnings 4,987 4,196 2,818 (7,014) 4,987 Accumulated other comprehensive earnings (loss) (656) (575) (280) 855 (656) Treasury stock, at cost (1,474) — — — (1,474) Total Ball Corporation shareholders' equity 3,941 6,084 6,829 (12,913) 3,941 Noncontrolling interests — — 105 — 105 Total shareholders' equity 3,941 6,084 6,934 (12,913) 4,046 Total liabilities and shareholders' equity $ 8,915 $ 9,816 $ 12,777 $ (14,339) $ 17,169 |
Schedule of Condensed Consolidating Statement of Cash Flows | Condensed Consolidating Statement of Cash Flows For the Three Months Ended March 31, 2018 ($ in millions) Ball Guarantor Non-Guarantor Consolidated Cash provided by (used in) operating activities $ 21 $ (226) $ 131 $ (74) Cash flows from investing activities Capital expenditures (3) (155) (84) (242) Business dispositions, net of cash sold (45) — — (45) Other, net (2) 2 3 3 Cash provided by (used in) investing activities (50) (153) (81) (284) Cash flows from financing activities Long-term borrowings 1,160 1 1 1,162 Repayments of long-term borrowings (680) (1) (2) (683) Net change in short-term borrowings (89) — 75 (14) Proceeds from issuances of common stock, net of shares used for taxes — — — — Acquisitions of treasury stock (35) — — (35) Common stock dividends (35) — — (35) Intercompany (287) 379 (92) — Other, net (10) — (1) (11) Cash provided by (used in) financing activities 24 379 (19) 384 Effect of exchange rate changes on cash — — 1 1 Change in cash, cash equivalents and restricted cash (5) — 32 27 Cash, cash equivalents and restricted cash – beginning of period 5 — 454 459 Cash, cash equivalents and restricted cash – end of period $ — $ — $ 486 $ 486 Condensed Consolidating Statement of Cash Flows For the Three Months Ended March 31, 2017 ($ in millions) Ball Guarantor Non-Guarantor Consolidated Cash provided by (used in) operating activities $ 7 $ (182) $ (226) $ (401) Cash flows from investing activities Capital expenditures (4) (82) (39) (125) Business dispositions, net of cash sold — 31 — 31 Other, net 2 13 (12) 3 Cash provided by (used in) investing activities (2) (38) (51) (91) Cash flows from financing activities Long-term borrowings 185 — — 185 Repayments of long-term borrowings (48) — (2) (50) Net change in short-term borrowings 116 1 156 273 Proceeds from issuances of common stock, net of shares used for taxes (1) — — (1) Acquisitions of treasury stock (3) — — (3) Common stock dividends (23) — — (23) Intercompany (229) 232 (3) — Other, net — (1) — (1) Cash provided by (used in) financing activities (3) 232 151 380 Effect of exchange rate changes on cash 1 — (31) (30) Change in cash, cash equivalents and restricted cash 3 12 (157) (142) Cash, cash equivalents and restricted cash – beginning of period 2 (11) 616 607 Cash, cash equivalents and restricted cash – end of period $ 5 $ 1 $ 459 $ 465 |
Accounting Pronouncements - Rev
Accounting Pronouncements - Revenue Recognition (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | ||||
Mar. 31, 2018 | Mar. 31, 2017 | Jan. 02, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | |
Assets [Abstract] | |||||
Receivables, net | $ 2,090 | $ 1,941 | $ 1,634 | ||
Inventories, net | 1,447 | 1,285 | 1,526 | ||
Other current assets | 146 | 146 | 150 | ||
Liabilities [Abstract] | |||||
Accounts payable | 2,822 | 2,762 | |||
Other current liabilities | 525 | 557 | 540 | ||
Deferred taxes | 690 | 702 | 695 | ||
Other liabilities | 383 | 340 | |||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest [Abstract] | |||||
Retained earnings | 5,114 | 5,024 | 4,987 | ||
Accumulated other comprehensive earnings (loss) | (673) | $ (655) | (656) | ||
Noncontrolling interests | 105 | $ 105 | |||
Net Income (Loss) Attributable to Parent [Abstract] | |||||
Net sales | 2,785 | $ 2,473 | |||
Cost of sales (excluding depreciation and amortization) | (2,237) | (1,975) | |||
Earnings before interest and taxes | 226 | 152 | |||
Tax (provision) benefit | (34) | (22) | |||
Net earnings attributable to Ball Corporation | $ 125 | $ 68 | |||
Basic (in dollars per share) | $ 0.36 | $ 0.19 | |||
Diluted (in dollars per share) | $ 0.35 | $ 0.19 | |||
Adjustments Due to New Guidance | ASU 2014-09 | |||||
Assets [Abstract] | |||||
Receivables, net | $ 345 | $ 307 | |||
Inventories, net | (273) | (241) | |||
Other current assets | (4) | (4) | |||
Liabilities [Abstract] | |||||
Other current liabilities | 21 | 17 | |||
Deferred taxes | 7 | 7 | |||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest [Abstract] | |||||
Retained earnings | 39 | 37 | |||
Accumulated other comprehensive earnings (loss) | 1 | $ 1 | |||
Net Income (Loss) Attributable to Parent [Abstract] | |||||
Net sales | 33 | ||||
Cost of sales (excluding depreciation and amortization) | (31) | ||||
Earnings before interest and taxes | 2 | ||||
Net earnings attributable to Ball Corporation | $ 2 | ||||
Basic (in dollars per share) | $ 0.01 | ||||
Diluted (in dollars per share) | $ 0.01 | ||||
Balance before adoption | |||||
Assets [Abstract] | |||||
Receivables, net | $ 1,745 | ||||
Inventories, net | 1,720 | ||||
Other current assets | 150 | ||||
Liabilities [Abstract] | |||||
Other current liabilities | 504 | ||||
Deferred taxes | 683 | ||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest [Abstract] | |||||
Retained earnings | 5,075 | ||||
Accumulated other comprehensive earnings (loss) | (674) | ||||
Net Income (Loss) Attributable to Parent [Abstract] | |||||
Net sales | 2,752 | ||||
Cost of sales (excluding depreciation and amortization) | (2,206) | ||||
Earnings before interest and taxes | 224 | ||||
Tax (provision) benefit | (34) | ||||
Net earnings attributable to Ball Corporation | $ 123 | ||||
Basic (in dollars per share) | $ 0.35 | ||||
Diluted (in dollars per share) | $ 0.34 |
Accounting Pronouncements - Def
Accounting Pronouncements - Defined benefits and cash flow (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2015 | |
ASU 2017-07 | ||||
Pension and Postretirement Benefit Costs | ||||
Other non-service components of pension and postretirement benefit costs | $ (6) | $ 21 | ||
Amount of adjustments to non-service costs of defined benefit costs | $ 0 | |||
ASU 2016-18 | ||||
New Accounting Pronouncements, Retrospective adjustments | ||||
Escrow cash account | $ 2,000 | |||
Decrease in cash flows from operating activities | $ (3) |
Business Segment Information -
Business Segment Information - Summary of Business (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2018USD ($)segment | Mar. 31, 2017USD ($) | |
Business Segment Information | ||
Number of reportable segments | segment | 5 | |
Segment Reporting Information, Revenue for Reportable Segment [Abstract] | ||
Net sales | $ 2,785 | $ 2,473 |
Reconciling items | ||
Other | (19) | (31) |
Business consolidation and other activities | (30) | (55) |
Amortization of acquired Rexam intangibles | (55) | (41) |
Earnings before interest and taxes | 226 | 152 |
Interest expense | (73) | (68) |
Debt refinancing and other costs | (1) | |
Total interest expense | (74) | (68) |
Earnings before taxes | 152 | 84 |
Tax (provision) benefit | (34) | (22) |
Equity in results of affiliates, net of tax | 7 | 8 |
Net earnings | 125 | 70 |
Net earnings attributable to noncontrolling interests | (2) | |
Net earnings attributable to Ball Corporation | 125 | 68 |
Undistributed corporate expenses | 22 | 45 |
Depreciation and Amortization | ||
Depreciation, Amortization and Accretion, Net | 180 | 148 |
Amortization of Intangible Assets | 55 | 41 |
Capital Expenditures | ||
Payments to Acquire Property, Plant, and Equipment | 242 | 125 |
Beverage packaging, Europe | ||
Reconciling items | ||
Business consolidation and other activities | 2 | |
Operating Segments | ||
Segment Reporting Information, Revenue for Reportable Segment [Abstract] | ||
Net sales | 2,642 | 2,336 |
Segment Reporting Information, Operating Income (Loss) [Abstract] | ||
Reportable segment comparable operating earnings | 319 | 270 |
Operating Segments | Beverage packaging, North And Central America | ||
Segment Reporting Information, Revenue for Reportable Segment [Abstract] | ||
Net sales | 1,035 | 949 |
Segment Reporting Information, Operating Income (Loss) [Abstract] | ||
Reportable segment comparable operating earnings | 113 | 123 |
Reconciling items | ||
Business consolidation and other activities | (3) | (4) |
Operating Segments | Beverage packaging, South America | ||
Segment Reporting Information, Revenue for Reportable Segment [Abstract] | ||
Net sales | 459 | 371 |
Segment Reporting Information, Operating Income (Loss) [Abstract] | ||
Reportable segment comparable operating earnings | 98 | 58 |
Reconciling items | ||
Business consolidation and other activities | 3 | |
Operating Segments | Beverage packaging, Europe | ||
Segment Reporting Information, Revenue for Reportable Segment [Abstract] | ||
Net sales | 609 | 508 |
Segment Reporting Information, Operating Income (Loss) [Abstract] | ||
Reportable segment comparable operating earnings | 60 | 47 |
Reconciling items | ||
Business consolidation and other activities | (10) | (3) |
Operating Segments | Food and aerosol packaging | ||
Segment Reporting Information, Revenue for Reportable Segment [Abstract] | ||
Net sales | 275 | 272 |
Segment Reporting Information, Operating Income (Loss) [Abstract] | ||
Reportable segment comparable operating earnings | 23 | 21 |
Reconciling items | ||
Business consolidation and other activities | 10 | |
Operating Segments | Aerospace | ||
Segment Reporting Information, Revenue for Reportable Segment [Abstract] | ||
Net sales | 264 | 236 |
Segment Reporting Information, Operating Income (Loss) [Abstract] | ||
Reportable segment comparable operating earnings | 25 | 21 |
Corporate and Other | ||
Segment Reporting Information, Revenue for Reportable Segment [Abstract] | ||
Net sales | 143 | 137 |
Reconciling items | ||
Business consolidation and other activities | (17) | (61) |
Rexam | ||
Reconciling items | ||
Amortization of acquired Rexam intangibles | (44) | (32) |
Depreciation and Amortization | ||
Amortization of Intangible Assets | $ 44 | $ 32 |
Revenue from Contracts With C50
Revenue from Contracts With Customers - Dissaggregation (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2018USD ($)segment | Mar. 31, 2017USD ($) | |
Disaggregation of Revenue [Line Items] | ||
Number of reportable segments | segment | 5 | |
Total net sales | $ 2,785 | $ 2,473 |
Point in Time | ||
Disaggregation of Revenue [Line Items] | ||
Total net sales | 662 | |
Over Time | ||
Disaggregation of Revenue [Line Items] | ||
Total net sales | $ 2,123 |
Revenue from Contracts With C51
Revenue from Contracts With Customers - Contract balances (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Contract with Customer, Asset and Liability [Abstract] | ||
Contract Liabilities (Current) | $ 52 | $ 45 |
Contract Liabilities (Noncurrent) | 6 | |
Increase (decrease) current | 7 | |
Increase (decrease) noncurrent | 6 | |
Increase (decrease) in contract liabilities | 13 | |
Cash received on contract liabilities | 55 | |
Revenue recognized previously included in contract liabilities current | 42 | |
Revenue recognized from obligations satisfied or partially satisfied in prior periods | $ 4 | |
Maximum | ||
Contract with Customer, Asset and Liability [Abstract] | ||
Payment term | 1 year |
Revenue from Contracts With C52
Revenue from Contracts With Customers - Performance obligations (Details) - Aerospace $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Sales expected to be recognized on multi-year contracts in place as of the end of the period | $ 1,639 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Period in which remaining performance obligations expect to be satisfied and revenue recognized | 12 months |
Sales expected to be recognized on multi-year contracts in place as of the end of the period | $ 862 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Period in which remaining performance obligations expect to be satisfied and revenue recognized | 0 months |
Sales expected to be recognized on multi-year contracts in place as of the end of the period | $ 777 |
Revenue from Contract With Cust
Revenue from Contract With Customers - Performance domain (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($)contract | |
Maximum | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Payment term | 1 year |
Aerospace | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Sales expected to be recognized on multi-year contracts in place as of the end of the period | $ | $ 1,639 |
Number of types of long-term sales contracts utilized | contract | 2 |
Aerospace | Maximum | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Payment term | 1 year |
Business Consolidation and Ot54
Business Consolidation and Other Activities (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Sep. 30, 2017 | |
Business consolidation and other activities | |||
Business consolidation and other activities | $ (30) | $ (55) | |
Beverage packaging, North And Central America | |||
Business consolidation and other activities | |||
Charges related to facilities closure | 5 | ||
Charges for insignificant items | 6 | 1 | |
Beverage packaging, North And Central America | Facility Shutdown Costs And Accelerated Depreciation | |||
Business consolidation and other activities | |||
Charges related to facilities closure | 3 | ||
Beverage packaging, North And Central America | Reidsville North Carolina Plant | Facility Closing | |||
Business consolidation and other activities | |||
Charges related to facilities closure | 2 | ||
Beverage packaging, South America | |||
Business consolidation and other activities | |||
Charges for insignificant items | 3 | ||
Beverage packaging, Europe | |||
Business consolidation and other activities | |||
Business consolidation and other activities | 2 | ||
Charges for insignificant items | $ 1 | ||
Beverage packaging, Europe | Employee Severance And Benefits | |||
Business consolidation and other activities | |||
Charges related to facilities closure | 4 | ||
Beverage packaging, Europe | Facility Shutdown Costs Asset Impairment Accelerated Depreciation And Other Costs | |||
Business consolidation and other activities | |||
Charges related to facilities closure | 6 | ||
Food and aerosol packaging | |||
Business consolidation and other activities | |||
Charges for insignificant items | 2 | ||
Food and aerosol packaging | Facility Shutdown Costs And Accelerated Depreciation | |||
Business consolidation and other activities | |||
Charges related to facilities closure | 3 | ||
Food and aerosol packaging | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||
Business consolidation and other activities | |||
Gain (loss) on dispositions | 15 | ||
Operating Segments | Beverage packaging, North And Central America | |||
Business consolidation and other activities | |||
Business consolidation and other activities | (3) | (4) | |
Operating Segments | Beverage packaging, South America | |||
Business consolidation and other activities | |||
Business consolidation and other activities | 3 | ||
Operating Segments | Beverage packaging, Europe | |||
Business consolidation and other activities | |||
Business consolidation and other activities | (10) | (3) | |
Operating Segments | Food and aerosol packaging | |||
Business consolidation and other activities | |||
Business consolidation and other activities | 10 | ||
Corporate and Other | |||
Business consolidation and other activities | |||
Business consolidation and other activities | (17) | (61) | |
Charges for insignificant items | 6 | 6 | |
Corporate and Other | Rexam | |||
Business consolidation and other activities | |||
Professional services and other costs | 5 | ||
Compensation arrangement expense | 9 | ||
Corporate and Other | Beverage packaging, Europe | Rexam | |||
Business consolidation and other activities | |||
Compensation arrangement expense | 11 | ||
Divestment Business | Corporate and Other | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||
Business consolidation and other activities | |||
Expense of indemnifications of uncertain tax positions | 27 | ||
Adjustment to gain on sale of Divestment Business | (14) | ||
Ball Corporation | |||
Business consolidation and other activities | |||
Business consolidation and other activities | $ (13) | $ (51) |
Business Consolidation and Ot55
Business Consolidation and Other Activities - Restructuring liabilities (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Activity in business consolidation reserves | |
Balance at beginning of period | $ 68 |
(Gains) charges in earnings | 5 |
Cash payments and other activity | (35) |
Balance at end of period | 38 |
Beverage packaging, North And Central America | |
Activity in business consolidation reserves | |
Balance at beginning of period | 26 |
(Gains) charges in earnings | (5) |
Cash payments and other activity | (1) |
Balance at end of period | 20 |
Beverage packaging, Europe | |
Activity in business consolidation reserves | |
Balance at beginning of period | 41 |
(Gains) charges in earnings | 10 |
Cash payments and other activity | (33) |
Balance at end of period | 18 |
Food and aerosol packaging | |
Activity in business consolidation reserves | |
Balance at beginning of period | 1 |
Cash payments and other activity | $ (1) |
Cash, Cash Equivalents and Re56
Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | |
Cash, Cash Equivalents and Restricted Cash | ||||
Cash and cash equivalents | $ 477 | $ 448 | $ 458 | $ 597 |
Current restricted cash | 8 | 10 | 6 | 9 |
Restricted cash non current | 1 | 1 | 1 | 1 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Total | 486 | 459 | $ 465 | $ 607 |
Other Non-cash items | ||||
Noncash capital expenditures | 97 | $ 124 | ||
Payment of indemnification guarantees | $ 45 |
Receivables (Details)
Receivables (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Jan. 02, 2018 | Dec. 31, 2017 |
Receivables | |||
Trade accounts receivable | $ 1,332 | $ 1,206 | |
Unbilled receivables | 429 | 147 | |
Less allowances for doubtful accounts | (10) | (10) | |
Net trade accounts receivable | 1,751 | 1,343 | |
Other receivables | 339 | 291 | |
Receivables, net | 2,090 | $ 1,941 | 1,634 |
Accounts receivable available for sale under factoring programs | 211 | $ 439 | |
Maximum | |||
Receivables | |||
Accounts receivable available for sale under factoring programs | $ 800 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Jan. 02, 2018 | Dec. 31, 2017 |
Inventories | |||
Raw materials and supplies | $ 719 | $ 691 | |
Work-in-process and finished goods | 794 | 902 | |
Less inventory reserves | (66) | (67) | |
Inventories, net | $ 1,447 | $ 1,285 | $ 1,526 |
Property, Plant and Equipment59
Property, Plant and Equipment (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Property, plant and equipment | |||
Property, plant and equipment, gross | $ 7,609 | $ 7,386 | |
Accumulated depreciation | (2,882) | (2,776) | |
Net property, plant and equipment | 4,727 | 4,610 | |
Depreciation expense | 125 | $ 107 | |
Noncash capital expenditures | 97 | 124 | |
Land | |||
Property, plant and equipment | |||
Property, plant and equipment, gross | 174 | 172 | |
Buildings | |||
Property, plant and equipment | |||
Property, plant and equipment, gross | 1,391 | 1,390 | |
Machinery and equipment | |||
Property, plant and equipment | |||
Property, plant and equipment, gross | 5,378 | 5,282 | |
Construction-in-progress | |||
Property, plant and equipment | |||
Property, plant and equipment, gross | $ 666 | $ 542 |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Goodwill | ||
Balance at the beginning of the period | $ 4,933 | |
Effects of currency exchange | 37 | |
Balance at the end of the period | 4,970 | |
Goodwill | 4,933 | |
Beverage packaging, North And Central America | ||
Goodwill | ||
Balance at the beginning of the period | 1,275 | |
Balance at the end of the period | 1,275 | |
Goodwill | 1,275 | |
Beverage packaging, South America | ||
Goodwill | ||
Balance at the beginning of the period | 1,299 | |
Balance at the end of the period | 1,299 | |
Goodwill | 1,299 | |
Beverage packaging, Europe | ||
Goodwill | ||
Balance at the beginning of the period | 1,531 | |
Effects of currency exchange | 33 | |
Balance at the end of the period | 1,564 | |
Goodwill | 1,531 | |
Food and aerosol packaging | ||
Goodwill | ||
Balance at the beginning of the period | 609 | |
Effects of currency exchange | 4 | |
Balance at the end of the period | 613 | |
Goodwill | 609 | |
Aerospace | ||
Goodwill | ||
Balance at the beginning of the period | 40 | |
Balance at the end of the period | 40 | |
Goodwill | 40 | |
Beverage Asia Pacific | ||
Goodwill | ||
Balance at the end of the period | 78 | |
Percentage of fair value exceeding carrying value | 24.00% | |
Goodwill | 78 | |
Corporate and Other | ||
Goodwill | ||
Balance at the beginning of the period | 179 | |
Balance at the end of the period | 179 | |
Goodwill | $ 179 |
Intangibles Assets, Net (Detail
Intangibles Assets, Net (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Total annual intangible asset amortization expense | |||
Acquired intangible assets, net of accumulated amortization | $ 64 | $ 75 | |
Accumulated amortization | 173 | 163 | |
Capitalized software (net of accumulated amortization) | 82 | 84 | |
Accumulated amortization - capitalized software | 134 | 129 | |
Total intangible assets, net | 2,432 | 2,462 | |
Amortization of Intangible Assets | 55 | $ 41 | |
Rexam | |||
Total annual intangible asset amortization expense | |||
Acquired intangible assets, net of accumulated amortization | 2,286 | 2,303 | |
Accumulated amortization | 284 | $ 246 | |
Amortization of Intangible Assets | $ 44 | $ 32 |
Other Assets (Details)
Other Assets (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Other assets | ||
Long-term deferred tax assets | $ 316 | $ 325 |
Long-term pension assets | 532 | 504 |
Investments in affiliates | 281 | 274 |
Company and trust-owned life insurance | 168 | 160 |
Other | 145 | 143 |
Other Assets | $ 1,442 | $ 1,406 |
Debt and Interest Costs - Long
Debt and Interest Costs - Long term debt (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Long-term debt | ||
Other (including debt issuance costs) | $ (44) | $ (37) |
Long-term debt, Total | 7,140 | 6,631 |
Less: Current portion of long-term debt | (9) | (113) |
Long-term debt excluding current maturities | 7,131 | 6,518 |
Senior Notes 5.25 percent, due July 2025 | ||
Long-term debt | ||
Long-term Debt, Gross | $ 1,000 | 1,000 |
Interest rate (as a percent) | 5.25% | |
Senior Notes 4.375 percent, due December 2020 | ||
Long-term debt | ||
Long-term Debt, Gross | $ 1,000 | 1,000 |
Interest rate (as a percent) | 4.375% | |
Senior Notes 4.00 percent , due November 2023 | ||
Long-term debt | ||
Long-term Debt, Gross | $ 1,000 | 1,000 |
Interest rate (as a percent) | 4.00% | |
Senior Notes 4.375 percent, euro denominated, due December 2023 | ||
Long-term debt | ||
Long-term Debt, Gross | $ 863 | 840 |
Interest rate (as a percent) | 4.375% | |
Senior Notes 5.00 percent, due March 2022 | ||
Long-term debt | ||
Long-term Debt, Gross | $ 750 | $ 750 |
Interest rate (as a percent) | 5.00% | |
Senior Notes 4.875 Percent Due March 2026 [Member] | ||
Long-term debt | ||
Long-term Debt, Gross | $ 750 | |
Interest rate (as a percent) | 4.875% | 4.875% |
Senior Notes 3.50 Percent, euro denominated, due December 2020 | ||
Long-term debt | ||
Long-term Debt, Gross | $ 493 | $ 480 |
Interest rate (as a percent) | 3.50% | |
Term A Loan, due June 2021 | ||
Long-term debt | ||
Long-term Debt, Gross | $ 998 | 1,313 |
Multi-currency U.S. dollar revolver, due March 2021 | ||
Long-term debt | ||
Long-term Debt, Gross | $ 330 | $ 285 |
Debt and Interest Costs - Activ
Debt and Interest Costs - Activity (Details) - USD ($) $ in Millions | 1 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Committed multi-currency revolving credit facilities due 2021 | ||
Revolving credit facility | ||
Available borrowing capacity under line of credit facility | $ 1,100 | |
Short-term uncommitted credit facilities | ||
Revolving credit facility | ||
Available borrowing capacity under line of credit facility | 880 | |
Amount of credit facility outstanding and due on demand | 328 | $ 340 |
Senior Notes 4.875 Percent Due March 2026 [Member] | ||
Revolving credit facility | ||
Face amount of debt | 750 | |
2018 Revolver | ||
Revolving credit facility | ||
Maximum borrowing capacity of revolving credit facility | 1,500 | |
Term A Loan, euro denominated, due June 2021 | ||
Revolving credit facility | ||
Repayment of debt | $ 315 |
Debt and Interest Costs - FV, M
Debt and Interest Costs - FV, Maturities, etc. (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Long term debt value | ||
Letters of credit, outstanding amount | $ 33 | $ 33 |
Ownership interest in guarantor subsidiaries (as a percent) | 100.00% | |
Leverage ratio, maximum | 4.25 | |
Level 2 | ||
Long term debt value | ||
Fair value of the long-term debt | $ 7,400 | $ 7,000 |
Taxes on Income - Tax reform es
Taxes on Income - Tax reform estimates (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Dec. 31, 2017 | Mar. 31, 2018 | Jan. 02, 2018 | |
Effect of Tax Cuts and Jobs Act | |||
Income tax expense for the estimated impact of the Tax Act adjustments | $ 83 | ||
Provisional increase of tax expense, change in tax rate effect on tax asset position | 52 | ||
Provisional increase of transition tax expense | 31 | ||
Retained Earnings (Accumulated Deficit) | $ 4,987 | $ 5,114 | $ 5,024 |
Employee Benefit Obligations -
Employee Benefit Obligations - Total (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Employee Benefit Obligations | ||
Underfunded defined benefit pension liabilities | $ 957 | $ 945 |
Less current portion | (23) | (27) |
Long-term defined benefit pension liabilities | 934 | 918 |
Long-term retiree medical liabilities | 198 | 196 |
Deferred compensation plans | 275 | 275 |
Other | 77 | 74 |
Total non-current employee benefit obligations | $ 1,484 | $ 1,463 |
Employee Benefit Obligations 68
Employee Benefit Obligations - Components of net periodic benefit cost (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2018 | |
Ball-sponsored plans: | |||
Total net periodic benefit cost | $ 16 | $ 23 | |
Non-service pension income (cost) | 1 | (6) | |
Ball Sponsored Plans | |||
Ball-sponsored plans: | |||
Service cost | 17 | 16 | |
Interest cost | 42 | 55 | |
Expected return on plan assets | (54) | (59) | |
Recognized net actuarial loss | 11 | 10 | |
Net periodic benefit cost for Ball sponsored plans | 16 | 22 | |
Multi-employer Plans | |||
Ball-sponsored plans: | |||
Net periodic benefit cost for multiemployer plans | 1 | ||
Defined Benefit Pension Plans | German Swedish And Certain U S Plans | Unfunded Plan | |||
Ball-sponsored plans: | |||
Payments to participants | 5 | 6 | |
Defined Benefit Pension Plans | German Swedish And Certain U S Plans | Forecast | Unfunded Plan | |||
Ball-sponsored plans: | |||
Expected benefit payments to plan participants for the full year | $ 21 | ||
Defined Benefit Pension Plans | Excluding German Swedish And Certain U S Plans | |||
Ball-sponsored plans: | |||
Contributions to pension plans | 3 | 8 | |
Defined Benefit Pension Plans | Excluding German Swedish And Certain U S Plans | Forecast | |||
Ball-sponsored plans: | |||
Expected contributions to pension plans for the full year | $ 45 | ||
U.S. | |||
Ball-sponsored plans: | |||
Total net periodic benefit cost | 20 | 22 | |
U.S. | Ball Sponsored Plans | |||
Ball-sponsored plans: | |||
Service cost | 13 | 12 | |
Interest cost | 24 | 33 | |
Expected return on plan assets | (27) | (33) | |
Recognized net actuarial loss | 10 | 9 | |
Net periodic benefit cost for Ball sponsored plans | 20 | 21 | |
U.S. | Multi-employer Plans | |||
Ball-sponsored plans: | |||
Net periodic benefit cost for multiemployer plans | 1 | ||
Foreign | |||
Ball-sponsored plans: | |||
Total net periodic benefit cost | (4) | 1 | |
Foreign | Ball Sponsored Plans | |||
Ball-sponsored plans: | |||
Service cost | 4 | 4 | |
Interest cost | 18 | 22 | |
Expected return on plan assets | (27) | (26) | |
Recognized net actuarial loss | 1 | 1 | |
Net periodic benefit cost for Ball sponsored plans | $ (4) | $ 1 |
Shareholders' Equity and Compre
Shareholders' Equity and Comprehensive Earnings (Details) $ / shares in Units, shares in Millions, $ in Millions | May 16, 2017 | Aug. 31, 2017USD ($)shares | Mar. 31, 2018$ / shares | Mar. 31, 2017$ / shares |
Shareholders’ Equity and Comprehensive Earnings | ||||
Stock split ratio | 2 | |||
Dividends declared (in dollars per share) | $ / shares | $ 0.10 | $ 0.065 | ||
Stock Repurchase Program [Abstract] | ||||
Accelerated share repurchase agreement amount | $ | $ 100 | |||
Shares received | shares | 2.5 |
Shareholders' Equity - AOCI Act
Shareholders' Equity - AOCI Activity (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Accumulated Other Comprehensive Earnings (Loss) | |
Stockholders' Equity Attributable to Parent, Beginning Balance | $ 3,941 |
Stockholders' Equity Attributable to Parent, Ending Balance | 4,033 |
Foreign Currency Translation | |
Accumulated Other Comprehensive Earnings (Loss) | |
Stockholders' Equity Attributable to Parent, Beginning Balance | (307) |
Other comprehensive earnings (loss) before reclassifications | 14 |
Stockholders' Equity Attributable to Parent, Ending Balance | (293) |
Pension and Other Postretirement Benefits (Net of Tax) | |
Accumulated Other Comprehensive Earnings (Loss) | |
Stockholders' Equity Attributable to Parent, Beginning Balance | (362) |
Other comprehensive earnings (loss) before reclassifications | 5 |
Amounts reclassified from accumulated other comprehensive earnings (loss) | 7 |
Stockholders' Equity Attributable to Parent, Ending Balance | (350) |
Effective Derivatives (Net of Tax) | |
Accumulated Other Comprehensive Earnings (Loss) | |
Stockholders' Equity Attributable to Parent, Beginning Balance | 13 |
Other comprehensive earnings (loss) before reclassifications | (57) |
Amounts reclassified from accumulated other comprehensive earnings (loss) | 14 |
Stockholders' Equity Attributable to Parent, Ending Balance | (30) |
Accumulated Other Comprehensive Earnings (Loss) | |
Accumulated Other Comprehensive Earnings (Loss) | |
Stockholders' Equity Attributable to Parent, Beginning Balance | (656) |
Other comprehensive earnings (loss) before reclassifications | (38) |
Amounts reclassified from accumulated other comprehensive earnings (loss) | 21 |
Stockholders' Equity Attributable to Parent, Ending Balance | $ (673) |
Shareholders' Equity - AOCI Add
Shareholders' Equity - AOCI Additional Details (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Gains (losses) on cash flow hedges | ||
Net sales | $ 2,785 | $ 2,473 |
Cost of sales (excluding depreciation and amortization) | (2,237) | (1,975) |
Selling, general and administrative | (112) | (143) |
Business consolidation and other activities | (30) | (55) |
Earnings before taxes | 152 | 84 |
Tax benefit (expense) on amounts reclassified into earnings | (34) | (22) |
Net earnings | 125 | 70 |
Effective Derivatives (Net of Tax) | Amount Reclassified from Accumulated Other Comprehensive Earnings (Loss) | ||
Gains (losses) on cash flow hedges | ||
Earnings before taxes | (19) | (9) |
Tax benefit (expense) on amounts reclassified into earnings | 5 | (15) |
Net Income (Loss) Attributable to Parent, Total | (14) | (24) |
Effective Derivatives (Net of Tax) | Amount Reclassified from Accumulated Other Comprehensive Earnings (Loss) | Commodity contracts | ||
Gains (losses) on cash flow hedges | ||
Net sales | (3) | (3) |
Cost of sales (excluding depreciation and amortization) | 10 | 8 |
Effective Derivatives (Net of Tax) | Amount Reclassified from Accumulated Other Comprehensive Earnings (Loss) | Foreign currency contracts | ||
Gains (losses) on cash flow hedges | ||
Business consolidation and other activities | 3 | |
Effective Derivatives (Net of Tax) | Amount Reclassified from Accumulated Other Comprehensive Earnings (Loss) | Cross-currency swap | ||
Gains (losses) on cash flow hedges | ||
Selling, general and administrative | (29) | (17) |
Interest expense | 3 | |
Pension and Other Postretirement Benefits (Net of Tax) | ||
Amortization Of Pension And Other Postretirement Benefits: | ||
Total before tax effect | (9) | (9) |
Tax benefit (expense) on amounts reclassified into earnings | 2 | 3 |
Recognized gain (loss) | (7) | (6) |
Actuarial gains (losses) | ||
Amortization Of Pension And Other Postretirement Benefits: | ||
Total before tax effect | $ (9) | $ (9) |
Stock-Based Compensation Prog72
Stock-Based Compensation Programs (Details) | May 16, 2017 | Jan. 31, 2018$ / sharesshares | Jan. 31, 2017$ / shares | Mar. 31, 2018installmentshares | Mar. 31, 2017shares |
Stock-Based Compensation Programs | |||||
Stock split ratio | 2 | ||||
Stock option and SSARs | |||||
Stock-Based Compensation Programs | |||||
Number of equal installments commencing one year from the date of grant | installment | 4 | ||||
Vesting period | 1 year | ||||
Expiration period of options | 10 years | ||||
Granted (in shares) | 2,100,000 | ||||
Weighted average fair value at grant date (in dollars per share) | $ / shares | $ 9.07 | $ 8.54 | |||
Weighted average assumptions used in estimation of fair values of options | |||||
Expected dividend yield (as a percent) | 1.03% | 0.68% | |||
Expected stock price volatility (as a percent) | 21.98% | 20.49% | |||
Risk-free interest rate (as a percent) | 2.47% | 2.07% | |||
Expected life of options | 6 years 1 month 6 days | 5 years 11 months 9 days | |||
PCEQs | |||||
Stock-Based Compensation Programs | |||||
Vesting period | 3 years | ||||
Weighted average assumptions used in estimation of fair values of options | |||||
Granted (in shares) | 261,174 | 237,452 | |||
PCEQs | Minimum | |||||
Weighted average assumptions used in estimation of fair values of options | |||||
Percent of participant PCEQ award assigned that determines the number of shares available at vesting date | 0.00% | 0.00% | |||
PCEQs | Maximum | |||||
Weighted average assumptions used in estimation of fair values of options | |||||
Percent of participant PCEQ award assigned that determines the number of shares available at vesting date | 200.00% | 200.00% | |||
PCEQs | Special Acquisition Related Incentive Plan | |||||
Stock-Based Compensation Programs | |||||
Granted (in shares) | 1,100,000 | ||||
PCEQs | Special Acquisition Related Incentive Plan | Minimum | |||||
Weighted average assumptions used in estimation of fair values of options | |||||
Percent of participant PCEQ award assigned that determines the number of shares available at vesting date | 0.00% | ||||
PCEQs | Special Acquisition Related Incentive Plan | Maximum | |||||
Weighted average assumptions used in estimation of fair values of options | |||||
Percent of participant PCEQ award assigned that determines the number of shares available at vesting date | 200.00% |
Stock-Based Compensation Prog73
Stock-Based Compensation Programs - Weighted average assumptions (Details) - Stock option and SSARs | 1 Months Ended | |
Jan. 31, 2018 | Jan. 31, 2017 | |
Weighted average assumptions used in estimation of fair values of options | ||
Expected dividend yield (as a percent) | 1.03% | 0.68% |
Expected stock price volatility (as a percent) | 21.98% | 20.49% |
Risk-free interest rate (as a percent) | 2.47% | 2.07% |
Expected life of options | 6 years 1 month 6 days | 5 years 11 months 9 days |
Stock-Based Compensation Prog74
Stock-Based Compensation Programs - PCEQs (Details) - PCEQs - shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Stock-Based Compensation Programs | ||
Granted (in shares) | 261,174 | 237,452 |
Vesting period | 3 years | |
Minimum | ||
Stock-Based Compensation Programs | ||
Percent of participant PCEQ award assigned that determines the number of shares available at vesting date | 0.00% | 0.00% |
Maximum | ||
Stock-Based Compensation Programs | ||
Percent of participant PCEQ award assigned that determines the number of shares available at vesting date | 200.00% | 200.00% |
Special Acquisition Related Incentive Plan | Minimum | ||
Stock-Based Compensation Programs | ||
Percent of participant PCEQ award assigned that determines the number of shares available at vesting date | 0.00% | |
Special Acquisition Related Incentive Plan | Maximum | ||
Stock-Based Compensation Programs | ||
Percent of participant PCEQ award assigned that determines the number of shares available at vesting date | 200.00% |
Earnings and Dividends Per Sh75
Earnings and Dividends Per Share (Details) $ / shares in Units, shares in Thousands, $ in Millions | May 16, 2017 | Mar. 31, 2018USD ($)$ / sharesshares | Mar. 31, 2017USD ($)$ / sharesshares |
Earnings and Dividends Per Share | |||
Net earnings attributable to Ball Corporation | $ | $ 125 | $ 68 | |
Basic weighted average common shares | shares | 350,215 | 350,048 | |
Effect of dilutive securities (in shares) | shares | 7,337 | 7,886 | |
Weighted average shares applicable to diluted earnings per share | shares | 357,552 | 357,934 | |
Basic (in dollars per share) | $ / shares | $ 0.36 | $ 0.19 | |
Diluted (in dollars per share) | $ / shares | $ 0.35 | $ 0.19 | |
Stock split ratio | 2 | ||
Number of outstanding options excluded from computation of diluted earnings per share | shares | 5,000 | 4,000 | |
Dividends declared (in dollars per share) | $ / shares | $ 0.10 | $ 0.065 | |
Dividends paid (in dollars per share) | $ / shares | $ 0.10 | $ 0.065 |
Financial Instruments and Ris76
Financial Instruments and Risk Management - General (Details) $ / shares in Units, $ in Millions | 3 Months Ended | ||
Mar. 31, 2018USD ($)approach$ / shares | Dec. 31, 2017USD ($) | Sep. 30, 2016USD ($) | |
Financial Instruments and Risk Management | |||
Aggregate fair value of derivative instruments with credit-risk-related contingent features that were in a net liability position | $ 20 | $ 27 | |
Collateral amount posted for derivative instruments with credit-risk-related contingent features that were in a net liability position | $ 0 | $ 0 | |
Commodity contracts | |||
Financial Instruments and Risk Management | |||
Number of methods through which entity manages commodity price risk in connection with market price fluctuations of aluminum ingot | approach | 2 | ||
Notional amount of derivatives | $ 844 | ||
Net gain expected to be recognized in the consolidated statement of earnings during the next 12 months | 14 | ||
Gain (loss) on derivatives included in AOCI, net of tax | 10 | ||
Commodity contracts | Derivatives Designated As Hedging Instruments | Cash Flow Hedging | |||
Financial Instruments and Risk Management | |||
Notional amount of derivatives | $ 822 | ||
Commodity contracts | Maximum | |||
Financial Instruments and Risk Management | |||
Period within which derivative will expire | 2 years | ||
Interest rate swap and option contracts | |||
Financial Instruments and Risk Management | |||
Notional amount of derivatives | $ 1,300 | ||
Period within which derivative will expire | 2 years | ||
Currency Exchange Rate Risk | |||
Financial Instruments and Risk Management | |||
Notional amount of derivatives | $ 2,200 | ||
Net after-tax gain (loss) included in AOCI | 3 | ||
Cross-currency swap | |||
Financial Instruments and Risk Management | |||
Gain (loss) on derivatives included in AOCI, net of tax | (43) | ||
Amount of hedge contract | $ 1,000 | ||
Fair value of swaps | $ (164) | ||
Equity contracts | |||
Financial Instruments and Risk Management | |||
Change in company's stock price (in dollars per share) | $ / shares | $ 1 | ||
Fair value of swaps | $ 2 |
Financial Instruments and Ris77
Financial Instruments and Risk Management - Fair Value (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Fair Value Measurements | ||
Total current derivative contracts, assets | $ 44 | $ 64 |
Total noncurrent derivative contracts, assets | 1 | 6 |
Total current derivative contracts, liabilities | 34 | 31 |
Total noncurrent derivative contracts, liabilities | 170 | 120 |
Commodity contracts | ||
Fair Value Measurements | ||
Total current derivative contracts, assets | 35 | 49 |
Total noncurrent derivative contracts, assets | 1 | 6 |
Total current derivative contracts, liabilities | 19 | 8 |
Foreign currency contracts | ||
Fair Value Measurements | ||
Total current derivative contracts, assets | 9 | 15 |
Total current derivative contracts, liabilities | 13 | 21 |
Derivatives Designated As Hedging Instruments | ||
Fair Value Measurements | ||
Total current derivative contracts, assets | 33 | 51 |
Total noncurrent derivative contracts, assets | 1 | 6 |
Total current derivative contracts, liabilities | 16 | 4 |
Total noncurrent derivative contracts, liabilities | 170 | 117 |
Derivatives Designated As Hedging Instruments | Commodity contracts | ||
Fair Value Measurements | ||
Total current derivative contracts, assets | 30 | 46 |
Total noncurrent derivative contracts, assets | 1 | 6 |
Total current derivative contracts, liabilities | 15 | 4 |
Derivatives Designated As Hedging Instruments | Foreign currency contracts | ||
Fair Value Measurements | ||
Total current derivative contracts, assets | 3 | 5 |
Total current derivative contracts, liabilities | 1 | |
Derivatives Not Designated as Hedging Instruments | ||
Fair Value Measurements | ||
Total current derivative contracts, assets | 11 | 13 |
Total current derivative contracts, liabilities | 18 | 27 |
Total noncurrent derivative contracts, liabilities | 3 | |
Derivatives Not Designated as Hedging Instruments | Commodity contracts | ||
Fair Value Measurements | ||
Total current derivative contracts, assets | 5 | 3 |
Total current derivative contracts, liabilities | 4 | 4 |
Derivatives Not Designated as Hedging Instruments | Foreign currency contracts | ||
Fair Value Measurements | ||
Total current derivative contracts, assets | 6 | 10 |
Total current derivative contracts, liabilities | $ 12 | $ 21 |
Financial Instruments and Ris78
Financial Instruments and Risk Management - Impact on Earnings (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Impact on Earnings from Derivative Instruments | ||
Cash Flow Hedge - Reclassified Amount from Accumulated Other Comprehensive Earnings (Loss) | $ (19) | $ (9) |
Gain (Loss) on Derivatives not Designated as Hedge Instruments | (6) | (17) |
Amounts reclassified into earnings: | ||
Commodity contracts | (7) | (5) |
Cross currency swap contracts | 26 | 17 |
Currency exchange contracts | (3) | |
Change in fair value of cash flow hedges: | ||
Derivative, Gain (Loss) on Derivative, Net | (19) | (9) |
Changes in accumulated other comprehensive earnings (loss) for effective derivatives | (43) | 57 |
Commodity contracts | ||
Impact on Earnings from Derivative Instruments | ||
Cash Flow Hedge - Reclassified Amount from Accumulated Other Comprehensive Earnings (Loss) | (30) | 51 |
Change in fair value of cash flow hedges: | ||
Derivative, Gain (Loss) on Derivative, Net | (30) | 51 |
Commodity contracts | Net sales | ||
Impact on Earnings from Derivative Instruments | ||
Cash Flow Hedge - Reclassified Amount from Accumulated Other Comprehensive Earnings (Loss) | (3) | (3) |
Gain (Loss) on Derivatives not Designated as Hedge Instruments | 1 | |
Change in fair value of cash flow hedges: | ||
Derivative, Gain (Loss) on Derivative, Net | (3) | (3) |
Commodity contracts | Cost of sales | ||
Impact on Earnings from Derivative Instruments | ||
Cash Flow Hedge - Reclassified Amount from Accumulated Other Comprehensive Earnings (Loss) | 10 | 8 |
Change in fair value of cash flow hedges: | ||
Derivative, Gain (Loss) on Derivative, Net | 10 | 8 |
Foreign currency contracts | Selling, general and administrative | ||
Impact on Earnings from Derivative Instruments | ||
Gain (Loss) on Derivatives not Designated as Hedge Instruments | (11) | (15) |
Foreign currency contracts | Business consolidation and other activities | ||
Impact on Earnings from Derivative Instruments | ||
Cash Flow Hedge - Reclassified Amount from Accumulated Other Comprehensive Earnings (Loss) | 3 | |
Change in fair value of cash flow hedges: | ||
Derivative, Gain (Loss) on Derivative, Net | 3 | |
Equity contracts | Selling, general and administrative | ||
Impact on Earnings from Derivative Instruments | ||
Gain (Loss) on Derivatives not Designated as Hedge Instruments | 4 | (2) |
Cross-currency swap | ||
Impact on Earnings from Derivative Instruments | ||
Cash Flow Hedge - Reclassified Amount from Accumulated Other Comprehensive Earnings (Loss) | (39) | (12) |
Change in fair value of cash flow hedges: | ||
Derivative, Gain (Loss) on Derivative, Net | (39) | (12) |
Cross-currency swap | Interest expense. | ||
Impact on Earnings from Derivative Instruments | ||
Cash Flow Hedge - Reclassified Amount from Accumulated Other Comprehensive Earnings (Loss) | 3 | |
Change in fair value of cash flow hedges: | ||
Derivative, Gain (Loss) on Derivative, Net | 3 | |
Cross-currency swap | Selling, general and administrative | ||
Impact on Earnings from Derivative Instruments | ||
Cash Flow Hedge - Reclassified Amount from Accumulated Other Comprehensive Earnings (Loss) | (29) | (17) |
Change in fair value of cash flow hedges: | ||
Derivative, Gain (Loss) on Derivative, Net | (29) | (17) |
Currency exchange contract | ||
Impact on Earnings from Derivative Instruments | ||
Cash Flow Hedge - Reclassified Amount from Accumulated Other Comprehensive Earnings (Loss) | (1) | 3 |
Change in fair value of cash flow hedges: | ||
Derivative, Gain (Loss) on Derivative, Net | (1) | 3 |
Foreign currency and tax impacts | ||
Impact on Earnings from Derivative Instruments | ||
Cash Flow Hedge - Reclassified Amount from Accumulated Other Comprehensive Earnings (Loss) | 8 | 6 |
Change in fair value of cash flow hedges: | ||
Derivative, Gain (Loss) on Derivative, Net | $ 8 | $ 6 |
Indemnifications and Guarante79
Indemnifications and Guarantees (Details) | 3 Months Ended |
Mar. 31, 2018 | |
Material Wholly Owned Domestic Subsidiaries | |
Guarantees | |
Percent of capital stock pledged | 100.00% |
Material Wholly Owned First Tier Foreign Subsidiaries | |
Guarantees | |
Percent of capital stock pledged | 65.00% |
Material Wholly Owned Foreign Subsidiaries And Material Wholly Owned U S Domiciled Foreign Subsidiaries | |
Guarantees | |
Percent of capital stock pledged | 100.00% |
Subsidiary Guarantees of Debt -
Subsidiary Guarantees of Debt - Condensed Consolidating Statement of Earnings (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Subsidiary Guarantees of Debt | ||
Ownership interest in guarantor subsidiaries (as a percent) | 100.00% | |
Net sales | $ 2,785 | $ 2,473 |
Costs and expenses | ||
Cost of sales (excluding depreciation and amortization) | (2,237) | (1,975) |
Depreciation and amortization | (180) | (148) |
Selling, general and administrative | (112) | (143) |
Business consolidation and other activities | (30) | (55) |
Total costs and expenses | (2,559) | (2,321) |
Earnings before interest and taxes | 226 | 152 |
Interest expense | (73) | (68) |
Debt refinancing and other costs | (1) | |
Total interest expense | (74) | (68) |
Earnings before taxes | 152 | 84 |
Tax (provision) benefit | (34) | (22) |
Equity in results of affiliates, net of tax | 7 | 8 |
Net earnings | 125 | 70 |
Net earnings attributable to noncontrolling interests | (2) | |
Net earnings attributable to Ball Corporation | 125 | 68 |
Comprehensive earnings (loss) attributable to Ball Corporation | 108 | 196 |
Eliminating Adjustments | ||
Subsidiary Guarantees of Debt | ||
Net sales | (182) | (17) |
Costs and expenses | ||
Cost of sales (excluding depreciation and amortization) | 182 | 17 |
Equity in results of subsidiaries | (201) | (123) |
Total costs and expenses | (19) | (106) |
Earnings before interest and taxes | (201) | (123) |
Earnings before taxes | (201) | (123) |
Net earnings | (201) | (123) |
Net earnings attributable to Ball Corporation | (201) | (123) |
Comprehensive earnings (loss) attributable to Ball Corporation | (197) | (311) |
Ball Corporation | ||
Costs and expenses | ||
Depreciation and amortization | (1) | (2) |
Selling, general and administrative | (34) | (45) |
Business consolidation and other activities | (13) | (51) |
Equity in results of subsidiaries | 162 | 123 |
Intercompany | 82 | 81 |
Total costs and expenses | 196 | 106 |
Earnings before interest and taxes | 196 | 106 |
Interest expense | (76) | (65) |
Debt refinancing and other costs | (1) | |
Total interest expense | (77) | (65) |
Earnings before taxes | 119 | 41 |
Tax (provision) benefit | 6 | 27 |
Net earnings | 125 | 68 |
Net earnings attributable to Ball Corporation | 125 | 68 |
Comprehensive earnings (loss) attributable to Ball Corporation | 108 | 196 |
Guarantor Subsidiaries | ||
Subsidiary Guarantees of Debt | ||
Net sales | 1,535 | 1,287 |
Costs and expenses | ||
Cost of sales (excluding depreciation and amortization) | (1,306) | (1,062) |
Depreciation and amortization | (52) | (47) |
Selling, general and administrative | (41) | (48) |
Business consolidation and other activities | (6) | 6 |
Equity in results of subsidiaries | 34 | 7 |
Intercompany | (42) | (41) |
Total costs and expenses | (1,413) | (1,185) |
Earnings before interest and taxes | 122 | 102 |
Interest expense | 3 | 1 |
Total interest expense | 3 | 1 |
Earnings before taxes | 125 | 103 |
Tax (provision) benefit | (17) | (40) |
Equity in results of affiliates, net of tax | 3 | 3 |
Net earnings | 111 | 66 |
Net earnings attributable to Ball Corporation | 111 | 66 |
Comprehensive earnings (loss) attributable to Ball Corporation | 108 | 169 |
Non-Guarantor Subsidiaries | ||
Subsidiary Guarantees of Debt | ||
Net sales | 1,432 | 1,203 |
Costs and expenses | ||
Cost of sales (excluding depreciation and amortization) | (1,113) | (930) |
Depreciation and amortization | (127) | (99) |
Selling, general and administrative | (37) | (50) |
Business consolidation and other activities | (11) | (10) |
Equity in results of subsidiaries | 5 | (7) |
Intercompany | (40) | (40) |
Total costs and expenses | (1,323) | (1,136) |
Earnings before interest and taxes | 109 | 67 |
Interest expense | (4) | |
Total interest expense | (4) | |
Earnings before taxes | 109 | 63 |
Tax (provision) benefit | (23) | (9) |
Equity in results of affiliates, net of tax | 4 | 5 |
Net earnings | 90 | 59 |
Net earnings attributable to noncontrolling interests | (2) | |
Net earnings attributable to Ball Corporation | 90 | 57 |
Comprehensive earnings (loss) attributable to Ball Corporation | $ 89 | $ 142 |
Subsidiary Guarantees of Debt81
Subsidiary Guarantees of Debt - Condensed Consolidating Balance Sheet (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Jan. 02, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets | |||||
Cash and cash equivalents | $ 477 | $ 448 | $ 458 | $ 597 | |
Receivables, net | 2,090 | $ 1,941 | 1,634 | ||
Inventories, net | 1,447 | 1,285 | 1,526 | ||
Other Assets, Current | 146 | 146 | 150 | ||
Total current assets | 4,160 | 3,758 | |||
Noncurrent assets | |||||
Property, plant and equipment, net | 4,727 | 4,610 | |||
Goodwill | 4,970 | 4,933 | |||
Intangible assets, net | 2,432 | 2,462 | |||
Other assets | 1,442 | 1,406 | |||
Total assets | 17,731 | 17,169 | |||
Current liabilities | |||||
Short-term debt and current portion of long-term debt | 337 | 453 | |||
Accounts payable | 2,822 | 2,762 | |||
Accrued employee costs | 221 | 352 | |||
Other current liabilities | 525 | 557 | 540 | ||
Total current liabilities | 3,905 | 4,107 | |||
Noncurrent liabilities | |||||
Long-term debt | 7,131 | 6,518 | |||
Employee benefit obligations | 1,484 | 1,463 | |||
Long-term derivative liabilities | 170 | 120 | |||
Deferred taxes | 690 | 702 | 695 | ||
Other liabilities | 383 | 340 | |||
Total liabilities | 13,593 | 13,123 | |||
Common stock | 1,100 | 1,084 | |||
Retained earnings | 5,114 | 5,024 | 4,987 | ||
Accumulated other comprehensive earnings (loss) | (673) | $ (655) | (656) | ||
Treasury stock, at cost | (1,508) | (1,474) | |||
Total Ball Corporation shareholders' equity | 4,033 | 3,941 | |||
Noncontrolling interests | 105 | 105 | |||
Total shareholders' equity | 4,138 | 4,046 | |||
Total liabilities and shareholders' equity | 17,731 | 17,169 | |||
Eliminating Adjustments | |||||
Current assets | |||||
Intercompany receivables | (735) | (1,426) | |||
Total current assets | (735) | (1,426) | |||
Noncurrent assets | |||||
Investment in subsidiaries | (13,179) | (12,913) | |||
Total assets | (13,914) | (14,339) | |||
Current liabilities | |||||
Intercompany payables | (735) | (1,426) | |||
Total current liabilities | (735) | (1,426) | |||
Noncurrent liabilities | |||||
Total liabilities | (735) | (1,426) | |||
Common stock | (6,749) | (6,749) | |||
Preferred stock | (5) | (5) | |||
Retained earnings | (7,284) | (7,014) | |||
Accumulated other comprehensive earnings (loss) | 859 | 855 | |||
Total Ball Corporation shareholders' equity | (13,179) | (12,913) | |||
Total shareholders' equity | (13,179) | (12,913) | |||
Total liabilities and shareholders' equity | (13,914) | (14,339) | |||
Ball Corporation | |||||
Current assets | |||||
Cash and cash equivalents | 5 | ||||
Receivables, net | 4 | 3 | |||
Intercompany receivables | 67 | 39 | |||
Other Assets, Current | 15 | 9 | |||
Total current assets | 86 | 56 | |||
Noncurrent assets | |||||
Property, plant and equipment, net | 23 | 20 | |||
Investment in subsidiaries | 8,837 | 8,639 | |||
Intangible assets, net | 15 | 15 | |||
Other assets | 191 | 185 | |||
Total assets | 9,152 | 8,915 | |||
Current liabilities | |||||
Short-term debt and current portion of long-term debt | 157 | 351 | |||
Accounts payable | 18 | 14 | |||
Intercompany payables | (100) | 705 | |||
Accrued employee costs | 18 | 28 | |||
Other current liabilities | 124 | 170 | |||
Total current liabilities | 217 | 1,268 | |||
Noncurrent liabilities | |||||
Long-term debt | 7,118 | 6,504 | |||
Employee benefit obligations | 329 | 333 | |||
Intercompany long-term notes | (2,622) | (3,172) | |||
Deferred taxes | (109) | (109) | |||
Other liabilities | 186 | 150 | |||
Total liabilities | 5,119 | 4,974 | |||
Common stock | 1,100 | 1,084 | |||
Retained earnings | 5,114 | 4,987 | |||
Accumulated other comprehensive earnings (loss) | (673) | (656) | |||
Treasury stock, at cost | (1,508) | (1,474) | |||
Total Ball Corporation shareholders' equity | 4,033 | 3,941 | |||
Total shareholders' equity | 4,033 | 3,941 | |||
Total liabilities and shareholders' equity | 9,152 | 8,915 | |||
Guarantor Subsidiaries | |||||
Current assets | |||||
Receivables, net | 489 | 260 | |||
Intercompany receivables | 501 | 1,285 | |||
Inventories, net | 722 | 673 | |||
Other Assets, Current | 49 | 52 | |||
Total current assets | 1,761 | 2,270 | |||
Noncurrent assets | |||||
Property, plant and equipment, net | 1,439 | 1,364 | |||
Investment in subsidiaries | 3,945 | 3,885 | |||
Goodwill | 1,545 | 1,545 | |||
Intangible assets, net | 458 | 470 | |||
Other assets | 292 | 282 | |||
Total assets | 9,440 | 9,816 | |||
Current liabilities | |||||
Accounts payable | 1,002 | 1,084 | |||
Intercompany payables | 120 | 82 | |||
Accrued employee costs | 115 | 182 | |||
Other current liabilities | 126 | 111 | |||
Total current liabilities | 1,363 | 1,459 | |||
Noncurrent liabilities | |||||
Long-term debt | 1 | ||||
Employee benefit obligations | 827 | 811 | |||
Intercompany long-term notes | 864 | 1,305 | |||
Deferred taxes | 107 | 107 | |||
Other liabilities | 48 | 50 | |||
Total liabilities | 3,210 | 3,732 | |||
Common stock | 2,463 | 2,463 | |||
Retained earnings | 4,345 | 4,196 | |||
Accumulated other comprehensive earnings (loss) | (578) | (575) | |||
Total Ball Corporation shareholders' equity | 6,230 | 6,084 | |||
Total shareholders' equity | 6,230 | 6,084 | |||
Total liabilities and shareholders' equity | 9,440 | 9,816 | |||
Non-Guarantor Subsidiaries | |||||
Current assets | |||||
Cash and cash equivalents | 477 | 443 | |||
Receivables, net | 1,597 | 1,371 | |||
Intercompany receivables | 167 | 102 | |||
Inventories, net | 725 | 853 | |||
Other Assets, Current | 82 | 89 | |||
Total current assets | 3,048 | 2,858 | |||
Noncurrent assets | |||||
Property, plant and equipment, net | 3,265 | 3,226 | |||
Investment in subsidiaries | 397 | 389 | |||
Goodwill | 3,425 | 3,388 | |||
Intangible assets, net | 1,959 | 1,977 | |||
Other assets | 959 | 939 | |||
Total assets | 13,053 | 12,777 | |||
Current liabilities | |||||
Short-term debt and current portion of long-term debt | 180 | 102 | |||
Accounts payable | 1,802 | 1,664 | |||
Intercompany payables | 715 | 639 | |||
Accrued employee costs | 88 | 142 | |||
Other current liabilities | 275 | 259 | |||
Total current liabilities | 3,060 | 2,806 | |||
Noncurrent liabilities | |||||
Long-term debt | 12 | 14 | |||
Employee benefit obligations | 328 | 319 | |||
Intercompany long-term notes | 1,758 | 1,867 | |||
Deferred taxes | 692 | 697 | |||
Other liabilities | 149 | 140 | |||
Total liabilities | 5,999 | 5,843 | |||
Common stock | 4,286 | 4,286 | |||
Preferred stock | 5 | 5 | |||
Retained earnings | 2,939 | 2,818 | |||
Accumulated other comprehensive earnings (loss) | (281) | (280) | |||
Total Ball Corporation shareholders' equity | 6,949 | 6,829 | |||
Noncontrolling interests | 105 | 105 | |||
Total shareholders' equity | 7,054 | 6,934 | |||
Total liabilities and shareholders' equity | $ 13,053 | $ 12,777 |
Subsidiary Guarantees of Debt82
Subsidiary Guarantees of Debt - Condensed Consolidating Statement of Cash Flows (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Subsidiary Guarantees of Debt | ||
Cash provided by (used in) operating activities | $ (74) | $ (401) |
Cash flows from investing activities | ||
Capital expenditures | (242) | (125) |
Business dispositions, net of cash sold | (45) | |
Business dispositions, net of cash sold | 31 | |
Other, net | 3 | 3 |
Cash provided by (used in) investing activities | (284) | (91) |
Cash Flows from Financing Activities | ||
Long-term borrowings | 1,162 | 185 |
Repayments of long-term borrowings | (683) | (50) |
Net change in short-term borrowings | (14) | 273 |
Proceeds from issuances of common stock | (1) | |
Acquisitions of treasury stock | (35) | (3) |
Common stock dividends | (35) | (23) |
Other, net | (11) | (1) |
Cash provided by (used in) financing activities | 384 | 380 |
Effect of exchange rate changes on cash | 1 | (30) |
Cash and cash equivalents – beginning of year | 448 | 597 |
Cash and cash equivalents – end of year | 477 | 458 |
Change in cash, cash equivalents and restricted cash | 27 | (142) |
Cash, cash equivalents and restricted cash - beginning of period | 459 | 607 |
Cash, cash equivalents and restricted cash - end of period | 486 | 465 |
Ball Corporation | ||
Subsidiary Guarantees of Debt | ||
Cash provided by (used in) operating activities | 21 | 7 |
Cash flows from investing activities | ||
Capital expenditures | (3) | (4) |
Business dispositions, net of cash sold | (45) | |
Other, net | (2) | 2 |
Cash provided by (used in) investing activities | (50) | (2) |
Cash Flows from Financing Activities | ||
Long-term borrowings | 1,160 | 185 |
Repayments of long-term borrowings | (680) | (48) |
Net change in short-term borrowings | (89) | 116 |
Proceeds from issuances of common stock | (1) | |
Acquisitions of treasury stock | (35) | (3) |
Common stock dividends | (35) | (23) |
Intercompany | (287) | (229) |
Other, net | (10) | |
Cash provided by (used in) financing activities | 24 | (3) |
Effect of exchange rate changes on cash | 1 | |
Cash and cash equivalents – beginning of year | 5 | |
Change in cash, cash equivalents and restricted cash | (5) | 3 |
Cash, cash equivalents and restricted cash - beginning of period | 5 | 2 |
Cash, cash equivalents and restricted cash - end of period | 5 | |
Guarantor Subsidiaries | ||
Subsidiary Guarantees of Debt | ||
Cash provided by (used in) operating activities | (226) | (182) |
Cash flows from investing activities | ||
Capital expenditures | (155) | (82) |
Business dispositions, net of cash sold | 31 | |
Other, net | 2 | 13 |
Cash provided by (used in) investing activities | (153) | (38) |
Cash Flows from Financing Activities | ||
Long-term borrowings | 1 | |
Repayments of long-term borrowings | (1) | |
Net change in short-term borrowings | 1 | |
Intercompany | 379 | 232 |
Other, net | (1) | |
Cash provided by (used in) financing activities | 379 | 232 |
Change in cash, cash equivalents and restricted cash | 12 | |
Cash, cash equivalents and restricted cash - beginning of period | (11) | |
Cash, cash equivalents and restricted cash - end of period | 1 | |
Non-Guarantor Subsidiaries | ||
Subsidiary Guarantees of Debt | ||
Cash provided by (used in) operating activities | 131 | (226) |
Cash flows from investing activities | ||
Capital expenditures | (84) | (39) |
Other, net | 3 | (12) |
Cash provided by (used in) investing activities | (81) | (51) |
Cash Flows from Financing Activities | ||
Long-term borrowings | 1 | |
Repayments of long-term borrowings | (2) | (2) |
Net change in short-term borrowings | 75 | 156 |
Intercompany | (92) | (3) |
Other, net | (1) | |
Cash provided by (used in) financing activities | (19) | 151 |
Effect of exchange rate changes on cash | 1 | (31) |
Cash and cash equivalents – beginning of year | 443 | |
Cash and cash equivalents – end of year | 477 | |
Change in cash, cash equivalents and restricted cash | 32 | (157) |
Cash, cash equivalents and restricted cash - beginning of period | 454 | 616 |
Cash, cash equivalents and restricted cash - end of period | $ 486 | $ 459 |