Subsidiary Guarantees of Debt

9 Months Ended

Sep. 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 September 30, 2019, and December 31, 2018, and for the three and nine months ended September 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 September 30, 2019
($ in millions)	Ball Corporation		Guarantor Subsidiaries		Non-Guarantor    Subsidiaries		Eliminating Adjustments		Consolidated Total
Net sales	$	—	$	1,680	$	1,480	$	(207)	$	2,953
Cost and expenses
Cost of sales (excluding depreciation and amortization)		—		(1,443)		(1,127)		207		(2,363)
Depreciation and amortization		(2)		(51)		(116)		—		(169)
Selling, general and administrative		41		(84)		(47)		—		(90)
Business consolidation and other activities		(7)		(2)		(124)		—		(133)
Equity in results of subsidiaries		80		(37)		—		(43)		—
Intercompany		49		(24)		(25)		—		—
		161		(1,641)		(1,439)		164		(2,755)
Earnings (loss) before interest and taxes		161		39		41		(43)		198
Interest expense		(80)		1		—		—		(79)
Debt refinancing and other costs		—		—		—		—		—
Total interest expense		(80)		1		—		—		(79)
Earnings (loss) before taxes		81		40		41		(43)		119
Tax (provision) benefit		11		(13)		(30)		—		(32)
Equity in results of affiliates, net of tax		—		1		4		—		5
Net earnings (loss)		92		28		15		(43)		92
Less net earnings attributable to noncontrolling interests		—		—		—		—		—
Net earnings (loss) attributable to Ball Corporation	$	92	$	28	$	15	$	(43)	$	92
Comprehensive earnings (loss) attributable to Ball Corporation	$	173	$	84	$	89	$	(173)	$	173

	Unaudited Condensed Consolidating Statement of Earnings
	Three Months Ended September 30, 2018
($ in millions)	Ball Corporation		Guarantor Subsidiaries		Non-Guarantor    Subsidiaries		Eliminating Adjustments		Consolidated Total
Net sales	$	—	$	1,666	$	1,481	$	(201)	$	2,946
Cost and expenses
Cost of sales (excluding depreciation and amortization)		—		(1,405)		(1,158)		201		(2,362)
Depreciation and amortization		(1)		(49)		(121)		—		(171)
Selling, general and administrative		(244)		179		(48)		—		(113)
Business consolidation and other activities		(53)		13		8		—		(32)
Equity in results of subsidiaries		369		8		—		(377)		—
Intercompany		52		(6)		(46)		—		—
		123		(1,260)		(1,365)		(176)		(2,678)
Earnings (loss) before interest and taxes		123		406		116		(377)		268
Interest expense		(79)		3		—		—		(76)
Debt refinancing and other costs		—		—		—		—		—
Total interest expense		(79)		3		—		—		(76)
Earnings (loss) before taxes		44		409		116		(377)		192
Tax (provision) benefit		15		(103)		(52)		—		(140)
Equity in results of affiliates, net of tax		—		3		4		—		7
Net earnings (loss)		59		309		68		(377)		59
Less net earnings attributable to noncontrolling interests		—		—		—		—		—
Net earnings (loss) attributable to Ball Corporation	$	59	$	309	$	68	$	(377)	$	59
Comprehensive earnings (loss) attributable to Ball Corporation	$	26	$	313	$	8	$	(321)	$	26

	Unaudited Condensed Consolidating Statement of Earnings
	For the Nine Months Ended September 30, 2019
($ in millions)	Ball Corporation		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminating Adjustments		Consolidated Total
Net sales	$	—	$	4,966	$	4,408	$	(619)	$	8,755
Cost and expenses
Cost of sales (excluding depreciation and amortization)		—		(4,295)		(3,368)		619		(7,044)
Depreciation and amortization		(4)		(150)		(356)		—		(510)
Selling, general and administrative		(20)		(172)		(136)		—		(328)
Business consolidation and other activities		(23)		(9)		(115)		—		(147)
Equity in results of subsidiaries		467		108		—		(575)		—
Intercompany		176		(88)		(88)		—		—
		596		(4,606)		(4,063)		44		(8,029)
Earnings (loss) before interest and taxes		596		360		345		(575)		726
Interest expense		(240)		4		(1)		—		(237)
Debt refinancing and other costs		(4)		—		—		—		(4)
Total interest expense		(244)		4		(1)		—		(241)
Earnings (loss) before taxes		352		364		344		(575)		485
Tax (provision) benefit		54		(52)		(75)		—		(73)
Equity in results of affiliates, net of tax		—		(12)		6		—		(6)
Net earnings		406		300		275		(575)		406
Less net earnings attributable to noncontrolling interests		—		—		—		—		—
Net earnings attributable to Ball Corporation	$	406	$	300	$	275	$	(575)	$	406
Comprehensive earnings (loss) attributable to Ball Corporation	$	604	$	506	$	442	$	(948)	$	604

	Unaudited Condensed Consolidating Statement of Earnings
	For the Nine Months Ended September 30, 2018
($ in millions)	Ball Corporation		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminating Adjustments		Consolidated Total
Net sales	$	—	$	5,003	$	4,428	$	(599)	$	8,832
Cost and expenses
Cost of sales (excluding depreciation and amortization)		—		(4,235)		(3,447)		599		(7,083)
Depreciation and amortization		(4)		(153)		(372)		—		(529)
Selling, general and administrative		(278)		65		(139)		—		(352)
Business consolidation and other activities		(70)		(41)		(20)		—		(131)
Equity in results of subsidiaries		634		61		—		(695)		—
Intercompany		228		(158)		(70)		—		—
		510		(4,461)		(4,048)		(96)		(8,095)
Earnings (loss) before interest and taxes		510		542		380		(695)		737
Interest expense		(235)		10		(1)		—		(226)
Debt refinancing and other costs		(1)		—		—		—		(1)
Total interest expense		(236)		10		(1)		—		(227)
Earnings (loss) before taxes		274		552		379		(695)		510
Tax (provision) benefit		29		(135)		(114)		—		(220)
Equity in results of affiliates, net of tax		—		1		13		—		14
Net earnings		303		418		278		(695)		304
Less net earnings attributable to noncontrolling interests		—		—		(1)		—		(1)
Net earnings attributable to Ball Corporation	$	303	$	418	$	277	$	(695)	$	303
Comprehensive earnings (loss) attributable to Ball Corporation	$	159	$	309	$	105	$	(414)	$	159

	Unaudited Condensed Consolidating Balance Sheet
	September 30, 2019
($ in millions)	Ball Corporation		Guarantor Subsidiaries		Non-Guarantor    Subsidiaries		Eliminating Adjustments		Consolidated Total
Assets
Current assets
Cash and cash equivalents	$	7	$	—	$	476	$	—	$	483
Receivables, net		9		594		1,354		—		1,957
Intercompany receivables		103		237		1,711		(2,051)		—
Inventories, net		—		506		674		—		1,180
Other current assets		37		39		133		—		209
Total current assets		156		1,376		4,348		(2,051)		3,829
Noncurrent assets
Property, plant and equipment, net		34		1,403		2,883		—		4,320
Investment in subsidiaries		11,678		2,589		(99)		(14,168)		—
Goodwill		—		1,191		3,180		—		4,371
Intangible assets, net		18		383		1,626		—		2,027
Other assets		315		299		1,076		—		1,690
Total assets	$	12,201	$	7,241	$	13,014	$	(16,219)	$	16,237
Liabilities and Equity
Current liabilities
Short-term debt and current portion of long-term debt	$	239	$	—	$	122	$	—	$	361
Accounts payable		17		949		1,692		—		2,658
Intercompany payables		2,379		123		156		(2,658)		—
Accrued employee costs		49		119		88		—		256
Other current liabilities		136		142		220		—		498
Total current liabilities		2,820		1,333		2,278		(2,658)		3,773
Noncurrent liabilities
Long-term debt		6,620		—		3		—		6,623
Employee benefit obligations		822		293		268		—		1,383
Intercompany long-term notes		(1,263)		(1,764)		2,420		607		—
Deferred taxes		(247)		247		602		—		602
Long-term deferred tax and other liabilities		84		128		179		—		391
Total liabilities		8,836		237		5,750		(2,051)		12,772
Common stock		1,177		2,523		3,900		(6,423)		1,177
Preferred stock		—		—		5		(5)		—
Retained earnings		5,694		4,939		3,553		(8,492)		5,694
Accumulated other comprehensive earnings (loss)		(716)		(458)		(294)		752		(716)
Treasury stock, at cost		(2,790)		—		—		—		(2,790)
Total Ball Corporation equity		3,365		7,004		7,164		(14,168)		3,365
Noncontrolling interests		—		—		100		—		100
Total equity		3,365		7,004		7,264		(14,168)		3,465
Total liabilities and equity	$	12,201	$	7,241	$	13,014	$	(16,219)	$	16,237

	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		35		79		—		146
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 Nine Months Ended September 30, 2019
($ in millions)	Ball Corporation		Guarantor Subsidiaries		Non-Guarantor    Subsidiaries		Consolidated Total
Cash provided by (used in) operating activities	$	(332)	$	256	$	732	$	656
Cash flows from investing activities
Capital expenditures		(12)		(186)		(227)		(425)
Proceeds from dispositions, net of cash sold		—		—		(50)		(50)
Other, net		(2)		10		18		26
Cash provided by (used in) investing activities		(14)		(176)		(259)		(449)
Cash flows from financing activities
Long-term borrowings		1,095		—		3		1,098
Repayments of long-term borrowings		(900)		—		(6)		(906)
Net change in short-term borrowings		47		—		84		131
Proceeds from issuances of common stock, net of shares used for taxes		16		—		—		16
Acquisitions of treasury stock		(614)		—		—		(614)
Common stock dividends		(133)		—		—		(133)
Intercompany		849		(80)		(769)		—
Other, net		(10)		—		—		(10)
Cash provided by (used in) financing activities		350		(80)		(688)		(418)
Effect of exchange rate changes on cash		—		—		(20)		(20)
Change in cash, cash equivalents and restricted cash		4		—		(235)		(231)
Cash, cash equivalents and restricted cash – beginning of period		3		—		725		728
Cash, cash equivalents and restricted cash – end of period	$	7	$	—	$	490	$	497

	Unaudited Condensed Consolidating Statement of Cash Flows
	For the Nine Months Ended September 30, 2018
($ in millions)	Ball Corporation		Guarantor Subsidiaries		Non-Guarantor    Subsidiaries		Consolidated Total
Cash provided by (used in) operating activities	$	(103)	$	148	$	982	$	1,027
Cash flows from investing activities
Capital expenditures		(5)		(356)		(255)		(616)
Proceeds from dispositions, net of cash sold		(53)		604		—		551
Other, net		(1)		18		33		50
Cash provided by (used in) investing activities		(59)		266		(222)		(15)
Cash flows from financing activities
Long-term borrowings		1,475		—		—		1,475
Repayments of long-term borrowings		(1,525)		—		(6)		(1,531)
Net change in short-term borrowings		(138)		—		(51)		(189)
Proceeds from issuances of common stock, net of shares used for taxes		25		—		—		25
Acquisitions of treasury stock		(464)		—		—		(464)
Common stock dividends		(104)		—		—		(104)
Intercompany		905		(413)		(492)		—
Other, net		(12)		(1)		—		(13)
Cash provided by (used in) financing activities		162		(414)		(549)		(801)
Effect of exchange rate changes on cash		—		—		(59)		(59)
Change in cash, cash equivalents and restricted cash		—		—		152		152
Cash, cash equivalents and restricted cash – beginning of period		5		—		454		459
Cash, cash equivalents and restricted cash – end of period	$	5	$	—	$	606	$	611