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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2023

or

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 001-07349

BALL CORPORATION

State of Indiana

(State or other jurisdiction of incorporation or
organization)

35-0160610

(I.R.S. Employer Identification No.)

9200 West 108th Circle

Westminster, CO

(Address of registrant’s principal executive office)

80021

(Zip Code)

Registrant’s telephone number, including area code: 303/469-3131

Securities registered pursuant to section 12(b) of the Act:

Class

Trading Symbol

Name of Exchange

Outstanding at July 31, 2023

Common Stock, without par value

BALL

NYSE

315,058,592 shares

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No

Ball Corporation

QUARTERLY REPORT ON FORM 10-Q

For the period ended June 30, 2023

INDEX

Page
Number

PART I.

FINANCIAL INFORMATION

1

Item 1.

Financial Statements

1

Unaudited Condensed Consolidated Statements of Earnings (Loss) for the Three and Six Months Ended June 30, 2023 and 2022

1

Unaudited Condensed Consolidated Statements of Comprehensive Earnings (Loss) for the Three and Six Months Ended June 30, 2023 and 2022

2

Unaudited Condensed Consolidated Balance Sheets at June 30, 2023, and December 31, 2022

3

Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2023 and 2022

4

Notes to the Unaudited Condensed Consolidated Financial Statements

Note 1. Basis of Presentation

5

Note 2. Accounting Pronouncements

6

Note 3. Business Segment Information

6

Note 4. Acquisitions and Dispositions

8

Note 5. Revenue from Contracts with Customers

9

Note 6. Business Consolidation and Other Activities

10

Note 7. Supplemental Cash Flow Statement Disclosures

10

Note 8. Receivables, Net

11

Note 9. Inventories, Net

11

Note 10. Property, Plant and Equipment, Net

12

Note 11. Goodwill

12

Note 12. Intangible Assets, Net

12

Note 13. Other Assets

13

Note 14. Leases

13

Note 15. Debt

14

Note 16. Taxes on Income

14

Note 17. Employee Benefit Obligations

15

Note 18. Equity and Accumulated Other Comprehensive Earnings (Loss)

16

Note 19. Earnings (Loss) and Dividends Per Share

18

Note 20. Financial Instruments and Risk Management

18

Note 21. Contingencies

22

Note 22. Indemnifications and Guarantees

24

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

25

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

35

Item 4.

Controls and Procedures

36

PART II.

OTHER INFORMATION

36

PART I. FINANCIAL INFORMATION

Item 1.   FINANCIAL STATEMENTS

BALL CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)

Three Months Ended June 30,

Six Months Ended June 30,

($ in millions, except per share amounts)

2023

    

2022

    

2023

    

2022

Net sales

$

3,566

$

4,134

$

7,055

$

7,850

Costs and expenses

Cost of sales (excluding depreciation and amortization)

(2,916)

(3,445)

(5,761)

(6,461)

Depreciation and amortization

(170)

(168)

(336)

(353)

Selling, general and administrative

(165)

(161)

(296)

(347)

Business consolidation and other activities

6

(467)

(14)

(186)

(3,245)

(4,241)

(6,407)

(7,347)

Earnings (loss) before interest and taxes

321

(107)

648

503

Interest expense

(115)

(68)

(228)

(137)

Debt refinancing and other costs

(2)

(2)

Total interest expense

(115)

(70)

(228)

(139)

Earnings (loss) before taxes

206

(177)

420

364

Tax (provision) benefit

(36)

(1)

(77)

(101)

Equity in results of affiliates, net of tax

3

13

10

19

Net earnings (loss)

173

(165)

353

282

Net earnings attributable to noncontrolling interests

9

3

10

Net earnings (loss) attributable to Ball Corporation

$

173

$

(174)

$

350

$

272

Earnings (loss) per share:

Basic

$

0.55

$

(0.55)

$

1.11

$

0.85

Diluted

$

0.55

$

(0.55)

$

1.10

$

0.84

Weighted average shares outstanding: (000s)

Basic

314,561

317,006

314,400

318,944

Diluted

316,867

317,006

316,764

323,316

See accompanying notes to the unaudited condensed consolidated financial statements.

1

BALL CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (LOSS)

Three Months Ended June 30,

Six Months Ended June 30,

($ in millions)

    

2023

    

2022

    

2023

    

2022

Net earnings (loss)

$

173

$

(165)

$

353

$

282

Other comprehensive earnings (loss):

Currency translation adjustment

38

346

58

254

Pension and other postretirement benefits

8

(6)

9

2

Derivatives designated as hedges

15

(86)

44

(19)

Total other comprehensive earnings (loss)

61

254

111

237

Income tax (provision) benefit

(6)

11

(14)

(1)

Total other comprehensive earnings (loss), net of tax

55

265

97

236

Total comprehensive earnings (loss)

228

100

450

518

Comprehensive earnings attributable to noncontrolling interests

9

3

10

Comprehensive earnings (loss) attributable to Ball Corporation

$

228

$

91

$

447

$

508

See accompanying notes to the unaudited condensed consolidated financial statements.

2

BALL CORPORATION

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

June 30,

December 31,

($ in millions)

    

2023

    

2022

Assets

Current assets

Cash and cash equivalents

$

955

$

548

Receivables, net

2,291

2,594

Inventories, net

1,982

2,179

Other current assets

207

168

Total current assets

5,435

5,489

Noncurrent assets

Property, plant and equipment, net

7,280

7,053

Goodwill

4,269

4,235

Intangible assets, net

1,366

1,417

Other assets

1,821

1,715

Total assets

$

20,171

$

19,909

Liabilities and Equity

Current liabilities

Short-term debt and current portion of long-term debt

$

2,245

$

1,408

Accounts payable

3,433

4,383

Accrued employee costs

267

236

Other current liabilities

981

981

Total current liabilities

6,926

7,008

Noncurrent liabilities

Long-term debt

7,507

7,540

Employee benefit obligations

840

847

Deferred taxes

524

540

Other liabilities

469

447

Total liabilities

16,266

16,382

Equity

Common stock (682,728,458 shares issued - 2023; 682,144,408 shares issued - 2022)

1,291

1,260

Retained earnings

7,533

7,309

Accumulated other comprehensive earnings (loss)

(582)

(679)

Treasury stock, at cost (367,792,637 shares - 2023; 368,036,369 shares - 2022)

(4,406)

(4,429)

Total Ball Corporation shareholders' equity

3,836

3,461

Noncontrolling interests

69

66

Total equity

3,905

3,527

Total liabilities and equity

$

20,171

$

19,909

See accompanying notes to the unaudited condensed consolidated financial statements.

3

BALL CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended June 30,

($ in millions)

    

2023

    

2022

Cash Flows from Operating Activities

Net earnings (loss)

$

353

$

282

Adjustments to reconcile net earnings (loss) to cash provided by (used in) operating activities:

Depreciation and amortization

336

353

Business consolidation and other activities

14

186

Deferred tax provision (benefit)

(23)

(32)

Pension contributions

(9)

(108)

Other, net

15

(96)

Changes in working capital components, net of dispositions

(325)

(983)

Cash provided by (used in) operating activities

361

(398)

Cash Flows from Investing Activities

Capital expenditures

(608)

(819)

Business dispositions, net of cash sold

298

Other, net

4

25

Cash provided by (used in) investing activities

(604)

(496)

Cash Flows from Financing Activities

Long-term borrowings

1,700

3,216

Repayments of long-term borrowings

(902)

(1,895)

Net change in short-term borrowings

(42)

220

Acquisitions of treasury stock

(3)

(578)

Common stock dividends

(126)

(128)

Other, net

17

(1)

Cash provided by (used in) financing activities

644

834

Effect of exchange rate changes on cash

9

(13)

Change in cash, cash equivalents and restricted cash

410

(73)

Cash, cash equivalents and restricted cash - beginning of period

558

579

Cash, cash equivalents and restricted cash - end of period

$

968

$

506

See accompanying notes to the unaudited condensed consolidated financial statements.

4

1.     Basis of Presentation

The accompanying unaudited condensed consolidated financial statements (consolidated financial statements) include the accounts of Ball Corporation and its controlled affiliates, including its consolidated variable interest entities (collectively Ball, the company, we or our), and have been prepared by the company. Certain information and footnote disclosures, including critical and significant accounting policies normally included in consolidated financial statements prepared in accordance with generally accepted accounting principles, have been condensed or omitted for this quarterly presentation.

Results of operations for the periods shown are not necessarily indicative of results for the year, particularly in view of the seasonality in the packaging segments and the variability of contract sales in the company’s aerospace segment. These consolidated financial statements and accompanying notes should be read in conjunction with the consolidated financial statements and the notes thereto included in the company’s 2022 Annual Report on Form 10-K filed on February 21, 2023, pursuant to the Securities Exchange Act of 1934 for the fiscal year ended December 31, 2022 (annual report).

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) requires Ball’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting periods. These estimates are based on historical experience and various assumptions believed to be reasonable under the circumstances. Ball’s management evaluates these estimates on an ongoing basis and adjusts or revises the estimates as circumstances change. As future events and their impacts cannot be determined with precision, actual results may differ from these estimates. In the opinion of management, the consolidated financial statements reflect all adjustments that are of a normal recurring nature and are necessary to fairly state the results of the periods presented.

Certain prior year amounts have been reclassified in order to conform to the current year presentation.

Risks and Uncertainties

Global Economic Environment

Recent data has indicated continued high inflation in the regions where we operate. Current and future inflationary effects may continue to be impacted by, among other things, supply chain disruptions, governmental stimulus or fiscal policies, changes in interest rates, and changing demand for certain goods and services as recovery from the COVID-19 pandemic continues. We cannot predict with any certainty the impact that rising interest rates, a global or any regional recession, or higher inflation may have on our customers or suppliers. Additionally, we are unable to predict the potential effects that any future pandemic, or the continuation or escalation of the military conflict between Russia and Ukraine, and related sanctions or market disruptions, may have on our business. It remains uncertain how long any of these conditions may last or how severe any of them may become.

Ball management has reviewed the estimates used in preparing the company’s consolidated financial statements and the following have a reasonably possible likelihood of being affected, to a material extent, by the direct and indirect impacts of the current global economic environment in the near term.

Estimates regarding the future financial performance of the business used in the impairment tests for goodwill, long-lived assets, equity method investments, recoverability of deferred tax assets and estimates regarding cash needs and associated indefinite reinvestment assertions;
Estimates of recoverability for customer receivables;
Estimates of net realizable value for inventory; and
Estimates regarding the likelihood of forecasted transactions associated with hedge accounting positions at June 30, 2023, which could impact the company’s ability to satisfy hedge accounting requirements and result in the recognition of income and/or expenses.

5

In addition to the above potential impacts on the estimates used in preparing the financial statements, the current global economic environment has the potential to increase Ball’s vulnerabilities to near-term severe impacts related to certain concentrations in its business. In line with other companies in the packaging and aerospace industries, Ball makes the majority of its sales and significant purchases to or from a relatively small number of global, or large regional, customers and suppliers. Furthermore, Ball makes the majority of its sales from a small number of product lines. The potential of the current global economic environment to affect a significant customer or supplier, or to affect demand for certain products to a significant degree, heightens the vulnerability of Ball to these concentrations.

2.     Accounting Pronouncements

Recently Adopted Accounting Standards

Supplier Finance Programs

In 2022, new guidance was issued by the FASB with the goal of enhancing transparency around supplier finance programs. On January 1, 2023, Ball adopted all required disclosures effective for 2023, on a retrospective basis. The company will adopt the rollforward disclosure requirements, on a prospective basis, when they become effective in 2024.

The company has several regional supplier finance programs, all of which have substantially similar characteristics, with various financial institutions that act as the paying agent for certain payables of the company. The company establishes these programs through agreements with the financial institutions to enable more efficient payment processing to our suppliers while also providing our suppliers a potential source of liquidity to the extent they enter into a factoring agreement with the financial institutions. Our suppliers’ participation in the programs is voluntary, and the company is not involved in negotiations of the suppliers’ arrangements with the financial institutions to sell their receivables, and our rights and obligations to our suppliers are not impacted by our suppliers’ decisions to sell amounts under these programs. Under these supplier finance programs, the company pays the financial institutions the stated amount of confirmed invoices from its participating suppliers on the original maturity dates of the invoices, which vary based on the negotiated terms with each supplier. All payment terms are short-term in nature and are not dependent on whether the suppliers participate in the supplier finance programs or if the suppliers elect to receive early payment from the financial institutions. Our supplier finance programs do not include any of the following: guarantees to the financial institutions, assets pledged as securities or interest accruing on the obligation prior to the due date.

Based on the review of the facts and circumstances of our supplier finance programs, including but not limited to those noted above, the company has concluded that the characteristics of the obligations due under our supplier finance programs have not changed and remain those of standard accounts payables, rather than indicative of debt.

The amount of obligations outstanding that the company confirmed as valid to the financial institutions under the company's programs was $488 million and $930 million at June 30, 2023 and December 31, 2022, respectively. These amounts are classified within accounts payable on the unaudited condensed consolidated balance sheets, and the associated payments are reflected in the cash flows from operating activities section of the unaudited condensed consolidated statements of cash flows.

3.     Business Segment Information

Ball’s operations are organized and reviewed by management along its product lines and geographical areas and presented in the four reportable segments outlined below.

Beverage packaging, North and Central America: Consists of operations in the U.S., Canada and Mexico that manufacture and sell aluminum beverage containers throughout those countries.

Beverage packaging, EMEA: Consists of operations in numerous countries throughout Europe, as well as Egypt and Turkey, that manufacture and sell aluminum beverage containers throughout those countries. Ball sold its former operations located in Russia during the third quarter of 2022. See Note 4 for further details. Ball’s operations and results of its former Russian aluminum beverage packaging business are included in the results of the beverage packaging, EMEA, business through the date of the disposal in the third quarter of 2022.

6

Beverage packaging, South America: Consists of operations in Brazil, Argentina, Paraguay and Chile that manufacture and sell aluminum beverage containers throughout most of South America.

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.

As presented in the table below, Other consists of a non-reportable operating segment (beverage packaging, other) that manufactures and sells aluminum beverage containers in India, Saudi Arabia and throughout the Asia Pacific region; a non-reportable operating segment that manufactures and sells extruded aluminum aerosol containers and recloseable aluminum bottles across multiple consumer categories as well as aluminum slugs (aerosol packaging) throughout North America, South America, Europe, and Asia; a non-reportable operating segment that manufactures and sells aluminum cups (aluminum cups); undistributed corporate expenses; and intercompany eliminations and other business activities.

The accounting policies of the segments are the same as those used in the consolidated financial statements, as discussed in Note 1. The company also has investments in operations in Guatemala, Panama, 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. In the first quarter of 2022, Ball sold its remaining equity method investment in Ball Metalpack. Refer to Note 4 for additional details.

Summary of Business by Segment

Three Months Ended June 30,

Six Months Ended June 30,

($ in millions)

    

2023

    

2022

    

2023

    

2022

Net sales

Beverage packaging, North and Central America

$

1,537

$

1,775

$

3,041

$

3,384

Beverage packaging, EMEA

920

1,133

1,754

2,075

Beverage packaging, South America

405

534

855

1,028

Aerospace

499

490

1,007

994

Reportable segment sales

3,361

3,932

6,657

7,481

Other

205

202

398

369

Net sales

$

3,566

$

4,134

$

7,055

$

7,850

Comparable operating earnings

Beverage packaging, North and Central America

$

175

$

164

$

358

$

338

Beverage packaging, EMEA

98

129

171

229

Beverage packaging, South America

30

52

80

130

Aerospace

54

36

114

79

Reportable segment comparable operating earnings

357

381

723

776

Reconciling items

Other (a)

(8)

11

7

(18)

Business consolidation and other activities

6

(467)

(14)

(186)

Amortization of acquired intangibles

(34)

(32)

(68)

(69)

Earnings (loss) before interest and taxes

321

(107)

648

503

Interest expense

(115)

(68)

(228)

(137)

Debt refinancing and other costs

(2)

(2)

Total interest expense

(115)

(70)

(228)

(139)

Earnings (loss) before taxes

$

206

$

(177)

$

420

$

364

(a)Includes undistributed corporate expenses, net, of $32 million and $15 million for the three months ended June 30, 2023 and 2022, respectively, and $42 million and $48 million for the six months ended June 30, 2023 and 2022, respectively.

7

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

4.     Acquisitions and Dispositions

Russia

In the first quarter of 2022, the company announced that it was pursuing the sale of its aluminum beverage packaging business located in Russia. In the second quarter of 2022, Ball experienced deteriorating conditions and determined this constituted a triggering event for its Russian long-lived asset group. As a result, Ball recorded an impairment loss of $435 million during the second quarter of 2022. In the third quarter of 2022, the company completed the sale of its Russian aluminum beverage packaging business for total cash consideration of $530 million and recorded a gain on disposal of $222 million. When considering the impairment loss recorded during the second quarter 2022 of $435 million, the impairment loss net of gain on the sale of the Russian business was $213 million for the nine months ended September 30, 2022, and for the year ended December 31, 2022. The impairment loss in the second quarter and the gain on sale in the third quarter were recorded in business consolidation and other activities in the unaudited condensed consolidated statements of earnings (loss).

In connection with this sale, Ball entered into a call option agreement that is contingently exercisable between September 2025 and September 2032, and if it becomes exercisable, will provide Ball the right to repurchase the business subject to the status of sanctions and certain other contingencies outside of Ball’s control. The option price, if exercised, would provide a customary compounded annual rate of return to the purchaser based on defined cash flows associated with the purchase and operation of the business from the purchase date through the exercise date of the option. Because the option strike price could limit the residual returns generated by the purchaser, if exercised, the option represents a variable interest retained by Ball in the Russian business. Based on the terms of the option relative to current market conditions in Russia, we determined that the option had an immaterial value at the date of sale. Neither the option nor any other terms in the sales agreement result in Ball being the primary beneficiary of the business and, therefore, it was deconsolidated.

Ball Metalpack Investment

During the first quarter of 2022, Ball sold its remaining 49 percent owned equity method investment in Ball Metalpack to Sonoco, a global provider of consumer, industrial, healthcare and protective packaging, for total consideration of approximately $298 million, all of which was received in cash in the first quarter of 2022. Ball’s carrying value of the investment before the sale was zero; therefore, a gain from the sale of $298 million was reported in business consolidation and other activities in the unaudited condensed consolidated statements of earnings (loss). Cash proceeds of $298 million related to the sale are presented in business dispositions, net of cash sold, in the unaudited condensed consolidated statements of cash flows.

Ball also received proceeds from Ball Metalpack for the repayment of an outstanding promissory note and accrued interest of approximately $16 million, which was recorded as a gain in business consolidation and other activities in the unaudited condensed consolidated statements of earnings (loss).

8

5.     Revenue from Contracts with Customers

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

Three Months Ended June 30,

Six Months Ended June 30,

($ in millions)

Point in Time

Over Time

Total

 

Point in Time

Over Time

Total

2023

$

560

$

3,006

$

3,566

$

1,104

$

5,951

$

7,055

2022

705

3,429

4,134

1,306

6,544

7,850

Contract Balances

The company did not have any contract assets at either June 30, 2023, or December 31, 2022. 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, 2022

$

316

$

12

Increase (decrease)

(49)

(1)

Balance at June 30, 2023

$

267

$

11

During the six months ended June 30, 2023, contract liabilities decreased by $50 million, which is net of cash received of $456 million and amounts recognized as sales of $506 million, the majority of which related to current contract liabilities. The amount of sales recognized in the six months ended June 30, 2023, that was included in the opening contract liabilities balance, was $316 million, all of which related to current contract liabilities. Current contract liabilities are classified within other current liabilities on the unaudited condensed consolidated balance sheets and noncurrent contract liabilities are classified within other liabilities.

The company also recorded a reduction in net sales of $1 million and additional net sales of $15 million in the three and six months ended June 30, 2023, respectively, and a reduction in net sales of $4 million and additional net sales of $5 million in the three and six months ended June 30, 2022, 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

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 June 30, 2023

$

1,347

$

1,160

$

2,507

9

6.     Business Consolidation and Other Activities

Following is a summary of business consolidation and other activity (charges)/income included in the unaudited condensed consolidated statements of earnings (loss):

Three Months Ended June 30,

Six Months Ended June 30,

($ in millions)

    

2023

    

2022

    

2023

    

2022

Beverage packaging, North and Central America

$

5

$

(2)

$

(17)

$

(1)

Beverage packaging, EMEA

(438)

5

(439)

Beverage packaging, South America

1

(21)

(1)

(22)

Other

(6)

(1)

276

$

6

$

(467)

$

(14)

$

(186)

2023

During the six months ended June 30, 2023, the charges of $14 million primarily related to facility closure costs.

2022

During the three months ended June 30, 2022, the charges of $467 million primarily related to $435 million associated with impairment losses on Russia’s long-lived asset group. The charges of $186 million during the six months ended June 30, 2022, primarily related to the impairment losses on Russia’s long-lived asset group and a charge related to a donation of $30 million to The Ball Foundation, partially offset by a gain of $298 million for the sale of Ball’s remaining equity method investment in Ball Metalpack. See Note 4 for further details on the Russia and Ball Metalpack transactions.

7.

Supplemental Cash Flow Statement Disclosures

June 30,

($ in millions)

2023

    

2022

    

Beginning of period:

    

Cash and cash equivalents

$

548

    

$

563

Current restricted cash (included in other current assets)

10

    

16

Total cash, cash equivalents and restricted cash

$

558

    

$

579

    

End of period:

    

Cash and cash equivalents

$

955

    

$

480

Current restricted cash (included in other current assets)

13

    

26

Total cash, cash equivalents and restricted cash

$

968

    

$

506

The company’s restricted cash is primarily related to receivables factoring programs and represents amounts collected from customers that have not yet been remitted to the banks as of the end of the reporting period.

10

Noncash investing activities include the acquisition of property, plant and equipment (PP&E) for which payment has not been made. These noncash capital expenditures are excluded from the unaudited condensed consolidated statements of cash flows. A summary of the PP&E acquired but not yet paid for is as follows:

June 30,

($ in millions)

2023

    

2022

    

Beginning of period:

    

PP&E acquired but not yet paid

$

392

    

$

540

End of period:

    

PP&E acquired but not yet paid

$

204

    

$

565

8.     Receivables, Net

June 30,

December 31,

($ in millions)

2023

    

2022

Trade accounts receivable

$

1,041

$

1,373

Unbilled receivables

793

746

Less: Allowance for doubtful accounts

(11)

(12)

Net trade accounts receivable

1,823

2,107

Other receivables

468

487

$

2,291

$

2,594

The company has entered into several regional committed and uncommitted accounts receivable factoring programs with various financial institutions for certain receivables of the company. The programs are accounted for as true sales of the receivables and had combined limits of approximately $2.02 billion and $2.04 billion at June 30, 2023, and December 31, 2022, respectively. A total of $272 million and $488 million were available for sale under these programs as of June 30, 2023, and December 31, 2022, respectively.

Other receivables include income and indirect tax receivables, aluminum scrap sale receivables and other miscellaneous receivables.

9.     Inventories, Net

June 30,

December 31,

($ in millions)

    

2023

    

2022

Raw materials and supplies

$

1,405

$

1,541

Work-in-process and finished goods

673

729

Less: Inventory reserves

(96)

(91)

$

1,982

$

2,179

11

10.     Property, Plant and Equipment, Net

June 30,

December 31,

($ in millions)

    

2023

    

2022

Land

$

221

$

187

Buildings

2,351

2,159

Machinery and equipment

7,626

7,277

Construction-in-progress

1,415

1,504

11,613

11,127

Accumulated depreciation

(4,333)

(4,074)

$

7,280

$

7,053

Depreciation expense amounted to $130 million and $129 million for the three months ended June 30, 2023 and 2022, respectively, and $257 million and $269 million for the six months ended June 30, 2023 and 2022, respectively.

During 2022, the company completed an evaluation of the estimated useful lives of its manufacturing equipment, buildings and certain assembly and test equipment. The company utilized a third-party appraiser to assist in the evaluation, which was performed as a result of the company’s experience with the duration over which its equipment can be utilized. Effective July 1, 2022, Ball revised the estimated useful lives of its equipment and buildings, which resulted in a net reduction in depreciation expense of approximately $27 million ($20 million after tax, or $0.06 per diluted share) for the three months ended June 30, 2023, and $52 million ($40 million after tax, or $0.13 per diluted share) for the six months ended June 30, 2023, as compared to the amounts of depreciation expense that would have been recognized by utilizing the prior depreciable lives.

As discussed in Note 4, in the second quarter of 2022, Ball recorded a noncash impairment charge related to its Russian long-lived asset group, of which $296 million related to property, plant and equipment associated with the company’s Russian aluminum beverage packaging business, which resulted in fully impairing the assets that were subsequently disposed through the sale of the Russia aluminum beverage packaging business. See Note 4 for further details.

11.     Goodwill

($ in millions)

    


Beverage
Packaging,
North & Central
America

    


Beverage
Packaging,
EMEA

    


Beverage
Packaging,
South America

    


Aerospace

    

Other

    

Total

Balance at December 31, 2022

$

1,275

$

1,342

$

1,298

$

40

$

280

$

4,235

Effects of currency exchange

20