Revenue from Contracts With Customers

9 Months Ended

Sep. 30, 2020

Revenue from Contract with Customer

Revenue from Contracts with Customers

5.     Revenue from Contracts with Customers

Disaggregation of Sales

The company disaggregates net sales by reportable segments as disclosed in Note 3, and based on the timing of transfer of control for goods and services as explained below. The transfer of control for goods and services may occur at a point in time or over time. As disclosed in Note 3, the company’s business consists of four reportable segments, which encompass disaggregated product lines and geographical areas: (1) beverage packaging, North and Central America; (2) beverage packaging, EMEA; (3) beverage packaging, South America; and (4) aerospace.

The following table disaggregates the company’s net sales based on the timing of transfer of control:

	Three Months Ended September 30, 2020						Nine Months Ended September 30, 2020
($ in millions)	Point in Time		Over Time		Total		Point in Time		Over Time		Total
Total net sales	$	604	$	2,489	$	3,093	$	1,638	$	7,041	$	8,679
	Three Months Ended September 30, 2019						Nine Months Ended September 30, 2019
($ in millions)	Point in Time		Over Time		Total		Point in Time		Over Time		Total
Total net sales	$	555	$	2,398	$	2,953	$	1,659	$	7,096	$	8,755

Contract Balances

The company enters into contracts to sell beverage packaging, aerosol packaging, and aerospace products and services. The company did not have any contract assets at either September 30, 2020, or December 31, 2019. Unbilled receivables, which are not classified as contract assets, represent arrangements in which sales have been recorded prior to billing and right to payment is unconditional.

The opening and closing balances of the company’s current and noncurrent contract liabilities are as follows:

	Contract		Contract
	Liabilities		Liabilities
($ in millions)	(Current)		(Noncurrent)
Balance at December 31, 2019		87		9
Increase (decrease)		5		(1)
Balance at September 30, 2020	$	92	$	8

During the nine months ended September 30, 2020, total contract liabilities increased by $4 million, which is net of cash received of $407 million and amounts recognized as sales of $411 million, all of which related to current contract liabilities. The amount of sales recognized in the nine months ended September 30, 2020, which were included in the opening contract liabilities balances, was $87 million, all of which related to current contract liabilities. Current contract liabilities are classified within other current liabilities on the unaudited condensed consolidated balance sheet and noncurrent contract liabilities are classified within other liabilities.

The company also recognized net sales of $9 million and $12 million in the three and nine months ended September 30, 2020, respectively, and net sales of $4 million and $10 million in the three and nine months ended September 30, 2019, respectively, from performance obligations satisfied (or partially satisfied) in prior periods. These sales amounts are the result of changes in the transaction price of the company’s contracts with customers.

Transaction Price Allocated to Remaining Performance Obligations

Ball typically enters into master agreements with customers, which establish the terms and conditions for subsequent orders of goods. These master agreements do not create enforceable rights and obligations on a stand-alone basis. In the context of the revenue recognition standard, enforceable contracts are those that have an enforceable right to payment, which Ball typically has once a binding forecast or purchase order (or similar contract) is in place and Ball produces under the contract. Within Ball’s packaging segments, these enforceable contracts all have a duration of less than one year. Contracts that have an original duration of less than one year are excluded from the requirement to disclose remaining performance obligations based on the company’s election to use the practical expedient.

The table below discloses: (1) the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied (or partially unsatisfied) as of the end of the reporting period for contracts with an original duration of greater than one year, and (2) when the company expects to record sales on these multi-year contracts.

($ in millions)	Next Twelve Months		Thereafter		Total
Sales expected to be recognized on multi-year contracts in place as of September 30, 2020	$	1,354	$	926	$	2,280