Taxes on Income

12 Months Ended

Dec. 31, 2024

Taxes on Income

Taxes on Income

16. Taxes on Income

The amount of earnings before income taxes is:

	Years Ended December 31,
($ in millions)	2024		2023		2022
U.S.	$	(8)	$	58	$	326
Non-U.S.		543		556		387
	$	535	$	614	$	713

The provision (benefit) for income tax expense is:

	Years Ended December 31,
($ in millions)	2024		2023		2022
Current
U.S.	$	5	$	(1)	$	—
State and local		(6)		4		10
Non-U.S.		184		169		134
Total current		183		172		144
Deferred
U.S.		6		(32)		84
State and local		(11)		5		9
Non-U.S.		(45)		1		(99)
Total deferred		(50)		(26)		(6)
Tax provision (benefit)	$	133	$	146	$	138

The income tax provision recorded within the consolidated statements of earnings differs from the provision determined by applying the U.S. statutory tax rate to pretax earnings as a result of the following:

	Years Ended December 31,
($ in millions)	2024			2023			2022
Statutory U.S. federal income tax	$	112		$	129		$	150
Increase (decrease) due to:
Non-U.S. tax rate differences including tax holidays		3			(38)			(21)
Non-U.S. tax law and rate changes		1			3			12
Currency exchange (gain) loss on revaluation of deferred tax balances		31			(13)			(8)
Global intangible low-taxed income (GILTI)		7			6			2
Permanent differences on business dispositions or impairments		—			—			(12)
U.S. state and local taxes, net		(11)			7			14
U.S. taxes on non-U.S. earnings, net of tax deductions and credits		(1)			(38)			6
Uncertain tax positions, including interest		(2)			(4)			(10)
Change in valuation allowances		(3)			106			(4)
Equity compensation related impacts		(3)			(6)			13
Other, net		(1)			(6)			(4)
Provision (benefit) for taxes	$	133		$	146		$	138
Effective tax rate expressed as a percentage of pretax earnings		24.9	%		23.8	%		19.4	%

The company generally intends to limit distributions from non-U.S. subsidiaries to earnings previously taxed in the U.S. As of December 31, 2024, the company has $2.64 billion of adjusted retained earnings in non-U.S. subsidiaries. Of these undistributed earnings, $933 million were previously subjected to U.S. federal income tax. The company has accrued approximately $53 million for estimated non-U.S. withholding taxes on portions of the non-U.S. earnings that are not indefinitely reinvested. The company has not provided deferred taxes on any other outside basis differences in its investments in other non-U.S. subsidiaries as these other outside basis differences are indefinitely reinvested. A determination of the unrecognized deferred taxes related to any of these other outside basis differences is not practicable.

Several of Ball’s Brazilian subsidiaries benefit from various tax holidays with expiration dates ranging from 2025 to 2032. These tax holidays reduced income tax by $37 million or $0.12 per share, $71 million or $0.22 per share and $59

million or $0.18 per share for 2024, 2023 and 2022, respectively. Benefits from tax holidays in Ball’s other subsidiaries were immaterial in 2024, 2023 and 2022.

Net income tax payments, inclusive of payments related to the historical aerospace business, were $922 million, $179 million and $143 million in 2024, 2023 and 2022, respectively. The amount paid in 2024 includes $236 million for purchases of transferable investment tax credits.

The significant components of deferred tax assets and liabilities are as follows:

	December 31,
($ in millions)	2024		2023
Deferred tax assets:
Deferred compensation	$	68	$	81
Accrued employee benefits		62		71
Accrued pensions		39		90
Capitalized research and development		235		289
Net operating losses, tax credits and other tax attributes		345		640
Deferred interest		143		178
Operating lease liabilities		75		102
Other		113		134
Total deferred tax assets		1,080		1,585
Valuation allowance		(370)		(386)
Net deferred tax assets		710		1,199
Deferred tax liabilities:
Property, plant and equipment		(450)		(620)
Goodwill and other intangible assets		(406)		(448)
Deferred revenue		(190)		(241)
Operating lease right of use assets		(71)		(96)
Other		(124)		(101)
Total deferred tax liabilities		(1,241)		(1,506)
Net deferred tax asset (liability)	$	(531)	$	(307)

The net deferred tax asset (liability) was included on the consolidated balance sheets as follows:

	December 31,
($ in millions)	2024		2023
Other assets	$	63	$	114
Deferred taxes		(594)		(421)
Net deferred tax asset (liability)	$	(531)	$	(307)

At December 31, 2024, Ball has recorded deferred tax assets related to net operating and capital loss carryforwards of $276 million, deferred interest expense carryforwards of $143 million, and credit carryforwards for foreign taxes and various other business credits of $69 million. These attributes are spread across the regions in which the company operates, including Europe, North and Central America, Asia and South America. The majority of the attributes with expiration dates consists of $41 million of foreign tax credits which expire beginning 2027 through 2034. This has been assessed for realization as of December 31, 2024.

In 2024, the company’s overall valuation allowances decreased by a net $16 million. The decrease was primarily due to the utilization of carryforward losses generated by various non-operating U.K. entities and the Argentinian beverage packaging business. These decreases were partially offset by operating losses related to the Brazilian beverage packaging business, nondeductible U.K. interest expense and U.S. foreign tax credits, none of which are expected to be utilized in future periods. Ball’s 2024 effective tax rate was impacted by $3 million of the net change in the valuation allowance.

In 2023, the company’s overall valuation allowances increased by a net $111 million. The increase was primarily due to losses incurred in various non-operating U.K. entities. The valuation allowance was further increased due to nondeductible U.K. interest expense, and operating losses related to the Argentinean beverage packaging business, driven by the sudden devaluation of the Argentine peso. Ball’s 2023 effective tax rate was impacted by $106 million of the net change in the valuation allowance.

In 2022, the company’s overall valuation allowances decreased by a net $28 million. The decrease was primarily due to currency exchange fluctuations and the reduction of the valuation allowance related to the Indian beverage packaging business. These decreases were partially offset by increases due to nondeductible U.K. interest expense and certain U.S. tax credits, none of which are expected to be utilized in future periods. Ball’s 2022 effective tax rate was impacted by $4 million of the net change in the valuation allowance.

A roll forward of the company’s unrecognized tax benefits, as included in other noncurrent liabilities, related to uncertain income tax positions at December 31 follows:

($ in millions)	2024		2023		2022
Balance at January 1	$	28	$	32	$	36
Additions for tax positions of prior years		—		1		5
Reductions for settlements		—		(5)		—
Reductions due to lapse of statute of limitations		(2)		—		(7)
Reductions due to business dispositions		—		—		(1)
Effect of currency exchange rates		—		—		(1)
Balance at December 31	$	26	$	28	$	32

At December 31, 2024, the amounts of unrecognized tax benefits that, if recognized, would reduce tax expense were $20 million, inclusive of interest, penalties and the indirect benefits of related items. The company and its subsidiaries file income tax returns in the U.S. federal, various state, local and non-U.S. jurisdictions. The U.S. federal statute of limitations is closed for years prior to 2021. With a few exceptions, the company is no longer subject to examination by state and local tax authorities for years prior to 2021. The company’s significant non-U.S. filings are in Argentina, Austria, Brazil, Canada, Chile, the Czech Republic, Egypt, France, Germany, Italy, Mexico, the Netherlands, Paraguay, Poland, Serbia, Spain, Sweden, Switzerland, Turkey and the U.K. The company’s non-U.S. statutes of limitations are generally open for years after 2019. At December 31, 2024, the company is either under examination or has been notified of a pending examination by tax authorities in Argentina, Brazil, Chile, the Czech Republic, Egypt, France, Germany, India, the Netherlands, Paraguay, Spain, the U.K. and various U.S. states.

The company does not expect any expiration of statutes of limitations or settlements of its unrecognized tax benefits in the coming year.