Subsidiary Guarantees of Debt

6 Months Ended

Jun. 30, 2019

Subsidiary Guarantees of Debt

Subsidiary Guarantee of Debt

23.    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, 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 June 30, 2019, and December 31, 2018, and for the three and six months ended June 30, 2019 and 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.

	Unaudited Condensed Consolidating Statement of Earnings
	Three Months Ended June 30, 2019
($ in millions)	Ball Corporation		Guarantor Subsidiaries		Non-Guarantor    Subsidiaries		Eliminating Adjustments		Consolidated Total
Net sales	$	—	$	1,737	$	1,493	$	(213)	$	3,017
Cost and expenses
Cost of sales (excluding depreciation and amortization)		—		(1,528)		(1,113)		213		(2,428)
Depreciation and amortization		(1)		(51)		(119)		—		(171)
Selling, general and administrative		(37)		(34)		(40)		—		(111)
Business consolidation and other activities		(10)		(9)		19		—		—
Equity in results of subsidiaries		251		125		—		(376)		—
Intercompany		66		(31)		(35)		—		—
		269		(1,528)		(1,288)		(163)		(2,710)
Earnings (loss) before interest and taxes		269		209		205		(376)		307
Interest expense		(82)		1		—		—		(81)
Debt refinancing and other costs		—		—		—		—		—
Total interest expense		(82)		1		—		—		(81)
Earnings (loss) before taxes		187		210		205		(376)		226
Tax (provision) benefit		10		(18)		(23)		—		(31)
Equity in results of affiliates, net of tax		—		3		(1)		—		2
Net earnings (loss)		197		195		181		(376)		197
Less net earnings attributable to noncontrolling interests		—		—		—		—		—
Net earnings (loss) attributable to Ball Corporation	$	197	$	195	$	181	$	(376)	$	197
Comprehensive earnings (loss) attributable to Ball Corporation	$	189	$	180	$	168	$	(348)	$	189

	Unaudited Condensed Consolidating Statement of Earnings
	Three Months Ended June 30, 2018
($ in millions)	Ball Corporation		Guarantor Subsidiaries		Non-Guarantor    Subsidiaries		Eliminating Adjustments		Consolidated Total
Net sales	$	—	$	1,802	$	1,515	$	(216)	$	3,101
Cost and expenses
Cost of sales (excluding depreciation and amortization)		—		(1,524)		(1,176)		216		(2,484)
Depreciation and amortization		(2)		(52)		(124)		—		(178)
Selling, general and administrative		—		(73)		(54)		—		(127)
Business consolidation and other activities		(4)		(48)		(17)		—		(69)
Equity in results of subsidiaries		103		19		—		(122)		—
Intercompany		94		(110)		16		—		—
		191		(1,788)		(1,355)		94		(2,858)
Earnings (loss) before interest and taxes		191		14		160		(122)		243
Interest expense		(80)		4		(1)		—		(77)
Debt refinancing and other costs		—		—		—		—		—
Total interest expense		(80)		4		(1)		—		(77)
Earnings (loss) before taxes		111		18		159		(122)		166
Tax (provision) benefit		8		(15)		(39)		—		(46)
Equity in results of affiliates, net of tax		—		(5)		5		—		—
Net earnings (loss)		119		(2)		125		(122)		120
Less net earnings attributable to noncontrolling interests		—		—		(1)		—		(1)
Net earnings (loss) attributable to Ball Corporation	$	119	$	(2)	$	124	$	(122)	$	119
Comprehensive earnings (loss) attributable to Ball Corporation	$	25	$	(112)	$	13	$	99	$	25

	Unaudited Condensed Consolidating Statement of Earnings
	For the Six Months Ended June 30, 2019
($ in millions)	Ball Corporation		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminating Adjustments		Consolidated Total
Net sales	$	—	$	3,286	$	2,928	$	(412)	$	5,802
Cost and expenses
Cost of sales (excluding depreciation and amortization)		—		(2,852)		(2,241)		412		(4,681)
Depreciation and amortization		(2)		(99)		(240)		—		(341)
Selling, general and administrative		(61)		(88)		(89)		—		(238)
Business consolidation and other activities		(16)		(7)		9		—		(14)
Equity in results of subsidiaries		387		145		—		(532)		—
Intercompany		127		(64)		(63)		—		—
		435		(2,965)		(2,624)		(120)		(5,274)
Earnings (loss) before interest and taxes		435		321		304		(532)		528
Interest expense		(160)		3		(1)		—		(158)
Debt refinancing and other costs		(4)		—		—		—		(4)
Total interest expense		(164)		3		(1)		—		(162)
Earnings (loss) before taxes		271		324		303		(532)		366
Tax (provision) benefit		43		(39)		(45)		—		(41)
Equity in results of affiliates, net of tax		—		(13)		2		—		(11)
Net earnings		314		272		260		(532)		314
Less net earnings attributable to noncontrolling interests		—		—		—		—		—
Net earnings attributable to Ball Corporation	$	314	$	272	$	260	$	(532)	$	314
Comprehensive earnings (loss) attributable to Ball Corporation	$	431	$	422	$	353	$	(775)	$	431

	Unaudited Condensed Consolidating Statement of Earnings
	For the Six Months Ended June 30, 2018
($ in millions)	Ball Corporation		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminating Adjustments		Consolidated Total
Net sales	$	—	$	3,337	$	2,947	$	(398)	$	5,886
Cost and expenses
Cost of sales (excluding depreciation and amortization)		—		(2,830)		(2,289)		398		(4,721)
Depreciation and amortization		(3)		(104)		(251)		—		(358)
Selling, general and administrative		(34)		(114)		(91)		—		(239)
Business consolidation and other activities		(17)		(54)		(28)		—		(99)
Equity in results of subsidiaries		265		53		—		(318)		—
Intercompany		176		(152)		(24)		—		—
		387		(3,201)		(2,683)		80		(5,417)
Earnings (loss) before interest and taxes		387		136		264		(318)		469
Interest expense		(156)		7		(1)		—		(150)
Debt refinancing and other costs		(1)		—		—		—		(1)
Total interest expense		(157)		7		(1)		—		(151)
Earnings (loss) before taxes		230		143		263		(318)		318
Tax (provision) benefit		14		(32)		(62)		—		(80)
Equity in results of affiliates, net of tax		—		(2)		9		—		7
Net earnings		244		109		210		(318)		245
Less net earnings attributable to noncontrolling interests		—		—		(1)		—		(1)
Net earnings attributable to Ball Corporation	$	244	$	109	$	209	$	(318)	$	244
Comprehensive earnings (loss) attributable to Ball Corporation	$	133	$	(4)	$	97	$	(93)	$	133

	Unaudited Condensed Consolidating Balance Sheet
	June 30, 2019
($ in millions)	Ball Corporation		Guarantor Subsidiaries		Non-Guarantor    Subsidiaries		Eliminating Adjustments		Consolidated Total
Assets
Current assets
Cash and cash equivalents	$	15	$	—	$	749	$	—	$	764
Receivables, net		23		663		1,270		—		1,956
Intercompany receivables		108		475		1,690		(2,273)		—
Inventories, net		—		471		712		—		1,183
Other current assets		33		29		98		—		160
Assets held for sale		—		4		466		—		470
Total current assets		179		1,642		4,985		(2,273)		4,533
Noncurrent assets
Property, plant and equipment, net		28		1,399		2,958		—		4,385
Investment in subsidiaries		11,627		3,348		(100)		(14,875)		—
Goodwill		—		1,191		3,242		—		4,433
Intangible assets, net		18		392		1,694		—		2,104
Other assets		266		292		1,096		—		1,654
Total assets	$	12,118	$	8,264	$	13,875	$	(17,148)	$	17,109
Liabilities and Equity
Current liabilities
Short-term debt and current portion of long-term debt	$	331	$	—	$	61	$	—	$	392
Accounts payable		13		980		1,746		—		2,739
Intercompany payables		2,290		92		488		(2,870)		—
Accrued employee costs		41		121		94		—		256
Other current liabilities		163		139		263		—		565
Liabilities held for sale		—		—		182		—		182
Total current liabilities		2,838		1,332		2,834		(2,870)		4,134
Noncurrent liabilities
Long-term debt		6,913		—		3		—		6,916
Employee benefit obligations		886		294		285		—		1,465
Intercompany long-term notes		(1,840)		(746)		1,989		597		—
Deferred taxes		(249)		246		609		—		606
Long-term deferred tax and other liabilities		110		119		195		—		424
Total liabilities		8,658		1,245		5,915		(2,273)		13,545
Common stock		1,172		2,523		4,681		(7,204)		1,172
Preferred stock		—		—		5		(5)		—
Retained earnings		5,651		5,010		3,538		(8,548)		5,651
Accumulated other comprehensive earnings (loss)		(797)		(514)		(368)		882		(797)
Treasury stock, at cost		(2,566)		—		—		—		(2,566)
Total Ball Corporation equity		3,460		7,019		7,856		(14,875)		3,460
Noncontrolling interests		—		—		104		—		104
Total equity		3,460		7,019		7,960		(14,875)		3,564
Total liabilities and equity	$	12,118	$	8,264	$	13,875	$	(17,148)	$	17,109

	Unaudited Condensed Consolidating Balance Sheet
	December 31, 2018
($ in millions)	Ball Corporation		Guarantor Subsidiaries		Non-Guarantor    Subsidiaries		Eliminating Adjustments		Consolidated Total
Assets
Current assets
Cash and cash equivalents	$	4	$	—	$	717	$	—	$	721
Receivables, net		21		613		1,168		—		1,802
Intercompany receivables		66		495		1,657		(2,218)		—
Inventories, net		—		527		744		—		1,271
Other current assets		32		31		77		—		140
Assets held for sale		—		4		2		—		6
Total current assets		123		1,670		4,365		(2,218)		3,940
Noncurrent assets
Property, plant and equipment, net		24		1,378		3,140		—		4,542
Investment in subsidiaries		11,145		3,779		(99)		(14,825)		—
Goodwill		—		1,191		3,284		—		4,475
Intangible assets, net		18		409		1,761		—		2,188
Other assets		213		215		981		—		1,409
Total assets	$	11,523	$	8,642	$	13,432	$	(17,043)	$	16,554
Liabilities and Equity
Current liabilities
Short-term debt and current portion of long-term debt	$	173	$	—	$	46	$	—	$	219
Accounts payable		50		1,178		1,867		—		3,095
Intercompany payables		2,310		49		466		(2,825)		—
Accrued employee costs		39		144		106		—		289
Other current liabilities		153		119		220		—		492
Total current liabilities		2,725		1,490		2,705		(2,825)		4,095
Noncurrent liabilities
Long-term debt		6,504		—		6		—		6,510
Employee benefit obligations		871		286		298		—		1,455
Intercompany long-term notes		(1,977)		3		1,368		606		—
Deferred taxes		(172)		169		648		—		645
Other liabilities		114		45		128		—		287
Total liabilities		8,065		1,993		5,153		(2,219)		12,992
Common stock		1,157		2,523		5,314		(7,837)		1,157
Preferred stock		—		—		5		(5)		—
Retained earnings		5,341		4,712		3,316		(8,028)		5,341
Accumulated other comprehensive earnings (loss)		(835)		(586)		(460)		1,046		(835)
Treasury stock, at cost		(2,205)		—		—		—		(2,205)
Total Ball Corporation equity		3,458		6,649		8,175		(14,824)		3,458
Noncontrolling interests		—		—		104		—		104
Total equity		3,458		6,649		8,279		(14,824)		3,562
Total liabilities and equity	$	11,523	$	8,642	$	13,432	$	(17,043)	$	16,554

	Unaudited Condensed Consolidating Statement of Cash Flows
	For the Six Months Ended June 30, 2019
($ in millions)	Ball Corporation		Guarantor Subsidiaries		Non-Guarantor    Subsidiaries		Consolidated Total
Cash provided by (used in) operating activities	$	(155)	$	134	$	274	$	253
Cash flows from investing activities
Capital expenditures		(7)		(123)		(145)		(275)
Other, net		2		3		6		11
Cash provided by (used in) investing activities		(5)		(120)		(139)		(264)
Cash flows from financing activities
Long-term borrowings		1,045		—		1		1,046
Repayments of long-term borrowings		(605)		—		(4)		(609)
Net change in short-term borrowings		138		—		15		153
Proceeds from issuances of common stock, net of shares used for taxes		8		—		—		8
Acquisitions of treasury stock		(396)		—		—		(396)
Common stock dividends		(83)		—		—		(83)
Intercompany		77		(14)		(63)		—
Other, net		(12)		—		—		(12)
Cash provided by (used in) financing activities		172		(14)		(51)		107
Effect of exchange rate changes on cash		—		—		12		12
Change in cash, cash equivalents and restricted cash		12		—		96		108
Cash, cash equivalents and restricted cash – beginning of period		3		—		725		728
Cash, cash equivalents and restricted cash – end of period	$	15	$	—	$	821	$	836

	Unaudited Condensed Consolidating Statement of Cash Flows
	For the Six Months Ended June 30, 2018
($ in millions)	Ball Corporation		Guarantor Subsidiaries		Non-Guarantor    Subsidiaries		Consolidated Total
Cash provided by (used in) operating activities	$	(59)	$	(120)	$	613	$	434
Cash flows from investing activities
Capital expenditures		(4)		(265)		(175)		(444)
Proceeds from dispositions, net of cash sold		(45)		—		—		(45)
Other, net		—		10		29		39
Cash provided by (used in) investing activities		(49)		(255)		(146)		(450)
Cash flows from financing activities
Long-term borrowings		1,425		1		—		1,426
Repayments of long-term borrowings		(835)		(1)		(4)		(840)
Net change in short-term borrowings		(111)		—		(54)		(165)
Proceeds from issuances of common stock, net of shares used for taxes		9		—		—		9
Acquisitions of treasury stock		(184)		—		—		(184)
Common stock dividends		(70)		—		—		(70)
Intercompany		(82)		377		(295)		—
Other, net		(11)		(1)		—		(12)
Cash provided by (used in) financing activities		141		376		(353)		164
Effect of exchange rate changes on cash		(4)		—		(46)		(50)
Change in cash, cash equivalents and restricted cash		29		1		68		98
Cash, cash equivalents and restricted cash – beginning of period		5		—		454		459
Cash, cash equivalents and restricted cash – end of period	$	34	$	1	$	522	$	557