Business Segment Information

9 Months Ended

Sep. 30, 2016

Business Segment Information

Business Segment Information

3.     Business Segment Information

During the third quarter of 2016, Ball made certain segment realignments as a result of the Rexam acquisition and sale of Ball’s existing beverage packaging businesses and select beverage can assets of Rexam (the Divestment Business) to align with how Ball now manages its businesses. Ball has retrospectively adjusted prior period amounts to conform to the current segment presentation. 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.

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

Beverage packaging, Europe:  Consists of operations in numerous countries in Europe, including Russia, that manufacture and sell metal beverage containers.

Food and aerosol packaging:  Consists of operations in the U.S., Europe, Canada, Mexico, Argentina and India that manufacture and sell steel food, aerosol, paint and general line containers, as well as extruded aluminum aerosol containers and aluminum slugs.

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

Other consists of non-reportable segments in Asia Pacific, Africa, Middle East and Asia that manufacture and sell metal beverage containers; undistributed corporate expenses; intercompany eliminations; and other business activities.

The company also has investments in operations in Guatemala, Panama, South Korea, the U.S. and Vietnam which are accounted for under the equity method of accounting and, accordingly, those results are not included in segment sales or earnings.

The accounting policies of the segments are the same as those in the unaudited condensed consolidated financial statements. A discussion of the company’s critical and significant accounting policies can be found in Ball’s annual report.

Summary of Business by Segment

	Three Months Ended September 30,				Nine Months Ended September 30,
($ in millions)	2016		2015		2016		2015
Net sales
Beverage packaging, North and Central America	$	1,076	$	818	$	2,653	$	2,466
Beverage packaging, South America		318		134		577		407
Beverage packaging, Europe		687		450		1,522		1,310
Food and aerosol packaging		329		372		911		1,012
Aerospace		204		204		577		648
Reportable segment sales		2,614		1,978		6,240		5,843
Other		201		119		360		349
Net sales	$	2,815	$	2,097	$	6,600	$	6,192
Comparable operating earnings
Beverage packaging, North and Central America	$	145	$	109	$	356	$	316
Beverage packaging, South America		60		14		100		43
Beverage packaging, Europe		72		61		184		150
Food and aerosol packaging		31		31		84		89
Aerospace		24		21		61		61
Reportable segment comparable operating earnings		332		236		785		659
Reconciling items
Other (a)		(21)		(8)		(67)		(45)
Business consolidation and other activities		(79)		(152)		(319)		(138)
Amortization of acquired Rexam intangibles		(33)		—		(33)		—
Cost of sales associated with Rexam inventory step-up		(83)		—		(83)		—
Earnings before interest and taxes		116		76		283		476
Interest expense		(80)		(38)		(159)		(107)
Debt refinancing and other costs		(2)		(21)		(108)		(86)
Total interest expense		(82)		(59)		(267)		(193)
Earnings before taxes		34		17		16		283
Tax (provision) benefit		(38)		31		191		(48)
Equity in results of affiliates, net of tax		7		2		6		3
Net earnings		3		50		213		238
Less net earnings attributable to noncontrolling interests		(3)		(5)		(3)		(12)
Net earnings attributable to Ball Corporation	$	—	$	45	$	210	$	226

(a) Includes undistributed corporate expenses,net, of $43 million and $17 million for the third quarter of 2016, and 2015 respectively, and $78 million and $69 million for the first nine months of 2016 and 2015, respectively.