Business Consolidation and Other Activities

6 Months Ended

Jun. 30, 2020

Business Consolidation and Other Activities

Business Consolidation and Other Activities

6.     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 June 30,				Six Months Ended June 30,
($ in millions)	2020		2019		2020		2019
Beverage packaging, North and Central America	$	(1)	$	(5)	$	(4)	$	(6)
Beverage packaging, EMEA		(3)		(16)		(6)		(15)
Beverage packaging, South America		(3)		37		(4)		36
Other		(105)		(16)		(213)		(29)
	$	(112)	$	—	$	(227)	$	(14)

2020

Beverage Packaging, North and Central America

During the three and six months ended June 30, 2020, the company recorded charges of $1 million and $4 million, respectively, for individually insignificant activities in connection with previously announced closures in 2018 of certain beverage can and end manufacturing facilities and other activities.

Beverage Packaging, EMEA

During the three and six months ended June 30, 2020, the company recorded charges of $3 million and $6 million, respectively, for individually insignificant activities in connection with previously announced plant closures, restructuring and other activities.

Beverage Packaging, South America

Charges in the three and six months ended June 30, 2020, included $3 million and $4 million of expense, respectively, for individually insignificant activities.

Other

During the three months ended June 30, 2020, the company recorded the following amounts:

● A non-cash settlement loss of $97 million related to the purchase of non-participating group annuity contracts and lump-sum payments to settle the projected pension benefit obligations for certain of Ball’s U.S. defined pension plans, which triggered settlement accounting. The settlement loss primarily reflects the recognition of aggregate unamortized actuarial losses in these U.S. pension plans.

● Charges of $8 million for individually insignificant activities.

During the six months ended June 30, 2020, the company recorded the following amounts:

● A non-cash settlement loss of $97 million related to the purchase of non-participating group annuity contracts and lump-sum payments to settle the projected pension benefit obligations for certain of Ball’s U.S. defined pension plans, which triggered settlement accounting. The settlement loss primarily reflects the recognition in the second quarter of aggregate unamortized actuarial losses in these U.S. pension plans.

● A non-cash impairment charge of $62 million related to the goodwill of the new beverage packaging, other, operating segment. See Note 11 for further details.

● A non-cash charge of $23 million resulting from the current deterioration in the real estate market in China, which led the company to reduce the value of potential future consideration due as part of the sale of its China beverage packaging business.

● Charges of $15 million resulting from an adjustment to the selling price of the company’s steel food and aerosol business.

● A credit of $11 million related to the reversal of reserves against working capital recorded in the fourth quarter of 2019 in the new beverage packaging, other, segment as previously at-risk balances were subsequently collected.

● Charges of $6 million for long-term incentive and other compensation arrangements associated with the Rexam acquisition.

● Charges of $21 million for individually insignificant activities.

2019

Beverage Packaging, North and Central America

During the three and six months ended June 30, 2019, the company recorded charges of $5 million and $6 million, respectively, in connection with previously announced closures in 2018 of certain beverage can and end manufacturing facilities.

Beverage Packaging, EMEA

During the three and six months ended June 30, 2019, the company recorded charges of $13 million and $11 million, respectively, in connection with previously announced closures of certain beverage can and end manufacturing facilities and other activities.

Other charges in the three and six months ended June 30, 2019, included $3 million and $4 million, respectively, of expense for individually insignificant activities.

Beverage Packaging, South America

During the three and six months ended June 30, 2019, the company recorded a $56 million gain related to indirect tax gain contingencies in Brazil as these amounts were determined to be estimable and realizable. The company’s Brazilian subsidiaries filed lawsuits in 2014 and 2015 to challenge the Brazilian tax authorities regarding the computation of certain indirect taxes, claiming amounts were overpaid to the tax authorities because the tax base included a “tax on tax” component. See Note 21 for further details. The amounts recorded in business consolidation and other activities relate to periods prior to 2019. In the event other comparable cases are resolved and the amounts claimed become estimable and realizable, the company will record gains, which may result in material reimbursements to the company in future periods.

During the three and six months ended June 30, 2019, the company recorded charges of $16 million composed of facility shutdown costs, asset impairment, accelerated depreciation and other costs related to restructuring activities.

Charges in the three and six months ended June 30, 2019, included $3 million and $4 million of expense, respectively, for individually insignificant activities.

Other

During the three months ended June 30, 2019, the company recorded the following amounts:

● Charges of $3 million for estimated employee severance costs and professional services associated with the planned sale of the China beverage packaging business, which closed in the fourth quarter of 2019.

● Charges of $3 million for long-term incentive and other compensation arrangements associated with the Rexam acquisition and integration.

● Charges of $10 million for individually insignificant activities.

During the six months ended June 30, 2019, the company recorded the following amounts:

● Charges of $16 million for estimated employee severance costs and professional services associated with the fourth quarter 2019 sale of the China beverage packaging business.

● Charges of $7 million for long-term incentive and other compensation arrangements associated with the Rexam acquisition and integration.

● Charges of $6 million for individually insignificant activities.