Business Segment Information

6 Months Ended

Jun. 30, 2017

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 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.

Other consists of non-reportable segments in Asia Pacific and AMEA 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 June 30,				Six Months Ended June 30,
($ in millions)	2017		2016		2017		2016
Net sales
Beverage packaging, North and Central America	$	1,151	$	844	$	2,100	$	1,577
Beverage packaging, South America		349		133		720		258
Beverage packaging, Europe		665		479		1,173		835
Food and aerosol packaging		274		298		546		583
Aerospace		257		193		493		373
Reportable segment sales		2,696		1,947		5,032		3,626
Other		159		83		296		159
Net sales	$	2,855	$	2,030	$	5,328	$	3,785
Comparable operating earnings
Beverage packaging, North and Central America (b)	$	156	$	118	$	279	$	211
Beverage packaging, South America (b)		69		22		127		39
Beverage packaging, Europe (b)		63		74		110		113
Food and aerosol packaging		25		33		46		53
Aerospace		26		19		47		37
Reportable segment comparable operating earnings		339		266		609		453
Reconciling items
Other (a) (b)		(21)		(15)		(52)		(46)
Business consolidation and other activities		(41)		28		(96)		(239)
Amortization of acquired Rexam intangibles		(51)		—		(83)		—
Catch-up depreciation and amortization for 2016 from finalization of Rexam valuation		(39)		—		(39)		—
Earnings before interest and taxes		187		279		339		168
Interest expense		(74)		(41)		(142)		(79)
Debt refinancing and other costs		(1)		(46)		(1)		(106)
Total interest expense		(75)		(87)		(143)		(185)
Earnings (loss) before taxes		112		192		196		(17)
Tax (provision) benefit		(22)		114		(44)		197
Equity in results of affiliates, net of tax		10		1		18		—
Net earnings		100		307		170		180
Net earnings attributable to noncontrolling interests		(1)		—		(3)		—
Net earnings attributable to Ball Corporation	$	99	$	307	$	167	$	180

(a) Includes undistributed corporate expenses, net, of $32 million and $12 million for the three months ended June 30, 2017 and 2016, respectively, and $77 million and $35 million for the six months ended June 30, 2017 and 2016, respectively.

(b) The three months ended June 30, 2017, includes catch-up depreciation for the three months ended March 31, 2017, from the finalization of fair values and useful lives for the Rexam acquisition associated with the following segments: $8 million for beverage packaging, Europe; $1 million for beverage packaging, North and Central America; $1 million for beverage packaging, South America; and $1 million for other.

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