Ball (BALL) is expected to deliver a year-over-year increase in earnings on lower revenues when it reports results for the quarter ended December 2023. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on February 1. On t ...

WESTMINSTER, Colo., Jan. 24, 2024 /PRNewswire/ -- Ball Corporation's (NYSE: BALL) board of directors (the "Board") today declared a cash dividend of 20 cents per share, payable March 15, 2024, to shareholders of record as of March 1, 2024. In addition, the board elected three existing regional business leaders to serve as senior vice presidents of the corporation. Kathleen Pitre was named senior vice president and president, North and Central America, Fauze Villatoro was named senior vice president and pres ...

Core Viewpoint - The perception of eco-friendly stocks has shifted significantly, with a growing emphasis on sustainability among younger generations, particularly Generation Z, where 82% express concern for the planet [1] Group 1: NXP Semiconductors (NXPI) - NXP Semiconductors specializes in advanced chips, particularly for electric vehicles (EVs) and smart grids, aligning with environmental directives [2] - The company's electrification solutions support safe communication between electrified endpoints and the cloud, crucial for the expanding EV sector [2][3] Group 2: Clean Harbors (CLH) - Clean Harbors provides essential environmental and industrial services, focusing on waste management, particularly hazardous waste from hydrocarbon and chemical industries [4] - The company offers safety and efficiency services that help mitigate the environmental impact of necessary industries, with analysts rating it a strong buy and a price target of $184.60, indicating an 11% upside potential [5] Group 3: Ball Corp (BALL) - Ball Corp is the largest manufacturer of recyclable metal containers, leveraging sustainable manufacturing principles and contributing to the circular economy [6] - The global circular economy is projected to grow at a compound annual growth rate (CAGR) of 21.59% from 2023 to 2031, highlighting the potential for Ball Corp's business model [6] - Analysts rate Ball Corp a moderate buy, with an average price target of $59.64, suggesting a 6% upside, while a high-side target of $75 indicates potential growth of 33% [7]

Financial Data and Key Metrics Changes - Third quarter 2023 comparable diluted earnings per share were $0.83, up from $0.75 in the third quarter of 2022, indicating a year-over-year increase [16] - Third quarter sales decreased compared to the same period in 2022, primarily due to lower aluminum prices and lower volumes from the sale of the Russian business, offset by inflationary cost pass-through and currency translation [16] - Comparable net earnings increased due to the pass-through of inflationary costs, a lower tax rate, and fixed cost savings, despite higher interest expenses and lower volumes [16][19] Business Line Data and Key Metrics Changes - Global shipments were down 3% in the third quarter, an improvement from a 5% decline in the second quarter of 2023, with double-digit volume growth in Brazil and better-than-industry performance in EMEA [10][11] - The Aerospace and Aluminum Aerosol businesses saw demand growth, with a 10.4% increase in third quarter shipments for the Global Aluminum Aerosol Business [13] - The company is experiencing a significant reduction in raw and finished goods inventory, which is expected to improve operational efficiencies [17] Market Data and Key Metrics Changes - In South America, volumes increased by 14.1% in the quarter, while the North American market is facing challenges due to mass beer brand demand disruptions [18] - EMEA has successfully navigated the impacts of the Russian business sale and is on track to recover comparable operating earnings [18] - The company ended the third quarter with approximately $3 billion in cash and committed credit facilities, positioning it well for upcoming bond maturities [19] Company Strategy and Development Direction - The company plans to utilize proceeds from the Aerospace business sale to strengthen the balance sheet and return value to shareholders through share repurchases and dividends [11][20] - Focus on improving operational efficiencies, reducing fixed costs, and leveraging sustainability attributes of aluminum packaging to enhance commercial positioning [11][12] - The company aims to maintain a strong liquidity position while managing costs and adapting to the current macroeconomic environment [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving low to mid-single-digit growth in comparable diluted EPS for 2023, with expectations for improved performance in 2024 [15] - The company is managing supply-demand dynamics and expects to see a return to growth in North America and Europe, although the timing remains uncertain [44][78] - Management acknowledged the challenges posed by a weaker end consumer in Europe and North America but remains optimistic about future growth opportunities [78] Other Important Information - A fire at the Verona, Virginia aluminum slug manufacturing facility caused significant damage, but insurance is expected to cover most of the financial impact [14] - The company is evaluating its footprint and considering options for the damaged facility, with plans to ensure customer demand is met from remaining facilities [70] Q&A Session Summary Question: Capacity closures impact on growth expectations - Management indicated that despite capacity closures, there remains sufficient capacity to grow into over the next few years, with productivity gains expected without significant capital expenditure [25][26] Question: Drivers behind Brazil's volume increase - The improvement in Brazil is attributed to better economic conditions, reduced inflationary pressures, and a shift from returnable glass to aluminum [29][30] Question: Aerospace sale regulatory approval status - Management characterized discussions regarding regulatory approvals as constructive, with expectations for closure in the first half of 2024 [39] Question: North American and South American volume differences - The differences in volumes are primarily due to customer partnerships in South America and exposure to mass beer in North America, with normalization expected moving forward [37][38] Question: Future capacity additions in the industry - Management does not foresee new entrants in the market due to high capital costs and current industry challenges, suggesting that existing players will absorb growth [50] Question: Use of proceeds from the Aerospace sale - The plan is to use half of the after-tax proceeds for debt reduction and the other half for share buybacks, with no significant need for large investments in new capacity [52]

Table of Contents ClassTrading Symbol Name of Exchange Outstanding at October 30, 2023 Common Stock, without par value BALL NYSE 315,301,214 shares 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 September 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 ...

Financial Data and Key Metrics Changes - In Q2 2023, comparable diluted earnings per share were $0.61, down from $0.82 in Q2 2022 [10] - Sales decreased due to the sale of the Russian business, lower volumes, currency translation, and the pass-through of lower aluminum prices [10] - Net comparable earnings decreased primarily due to higher interest expense, the headwind from the Russian business sale, and lower volumes [11] - The company ended Q2 with approximately $2.65 billion in cash and committed credit facilities [13] Business Line Data and Key Metrics Changes - Global beverage volumes were down 11%, impacted by the Russian sale and a notable domestic beer brand experiencing demand disruption in North America [5] - North America segment earnings are expected to accelerate in Q3 due to contractual inflation recovery [12] - EMEA is anticipated to improve in Q4 as it laps the last Russian earnings headwind [12] Market Data and Key Metrics Changes - North America volume is projected to be down low single digits, while South America and EMEA volumes are expected to be up mid-single digits [9] - The company estimates flat global volume growth for the full year, excluding Russia [9] Company Strategy and Development Direction - The company is considering options for its aerospace business, indicating a strategic review of its assets [4] - Focus remains on delivering earnings, free cash flow, and high-quality products while managing costs and working capital [6] - The company aims to return value to shareholders through deleveraging and innovative packaging solutions [6] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a challenging operating environment but expressed confidence in the company's ability to manage costs and improve operational efficiencies [5] - The outlook for 2023 includes an anticipated $750 million of free cash flow and a potential low-end achievement of 10% to 15% comparable diluted EPS growth [8] - Management remains optimistic about the second half of 2023, expecting improvements in Brazil and a recovery in mass beer volumes [24][37] Other Important Information - The company declared its quarterly cash dividend and emphasized reducing leverage before resuming share repurchases [14] - The effective tax rate on comparable earnings for 2023 is expected to be around 19% [13] Q&A Session Summary Question: Volume trends in early Q3 across regions - Management noted that there is a notable filled product issue with one customer in the mass beer space, but overall inventory levels are in good shape [17][21] Question: Strategic review of aerospace business - The aerospace business has become much larger and more profitable, prompting the strategic review [31] Question: North American market pressures - No pressure on contracts was reported, and management expects a return to volume momentum in the second half of the year [68][70] Question: Volume outlook for 2024 - Management believes that North America will see improved volumes in 2024, with growth anticipated in both Europe and South America [64] Question: Impact of promotional activity on mass beer market - Increased promotional activity has not yet translated into volume momentum, with expectations for a more significant impact in Q4 [45]

Table of Contents ClassTrading Symbol Name of Exchange Outstanding at July 31, 2023 Common Stock, without par value BALL NYSE 315,058,592 shares 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 ...

Ball Corporation (NYSE:BALL) Q1 2023 Earnings Conference Call May 4, 2023 11:00 AM ET Company Participants Dan Fisher - Chairman and CEO Scott Morrison - Executive Vice President and CFO Conference Call Participants Ghansham Panjabi - Baird George Staphos - Bank of America Angel Castillo - Morgan Stanley Cleve Rueckert - UBS Bryan Burgmeier - Citi Arun Viswanathan - RBC Mike Roxland - Truist Phil Ng - Jefferies Mike Leithead - Barclays Kyle White - Deutsche Bank Gabe Hajde - Wells Fargo Adam Samuelson - Gol ...

PART I. FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents Ball Corporation's unaudited condensed consolidated financial statements for Q1 2023, showing decreased net sales and earnings year-over-year Condensed Consolidated Statements of Earnings (Unaudited) | ($ in millions, except per share amounts) | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | **Net sales** | $3,489 | $3,716 | | **Earnings before interest and taxes** | $327 | $610 | | **Net earnings attributable to Ball Corporation** | $177 | $446 | | **Diluted earnings per share** | $0.56 | $1.37 | Condensed Consolidated Balance Sheets (Unaudited) | ($ in millions) | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Total current assets** | $5,507 | $5,489 | | **Total assets** | $20,109 | $19,909 | | **Total current liabilities** | $7,220 | $7,008 | | **Total liabilities** | $16,401 | $16,382 | | **Total equity** | $3,708 | $3,527 | Condensed Consolidated Statements of Cash Flows (Unaudited) | ($ in millions) | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | **Cash provided by (used in) operating activities** | ($275) | ($804) | | **Cash provided by (used in) investing activities** | ($336) | ($46) | | **Cash provided by (used in) financing activities** | $649 | $715 | [Note 1-2: Basis of Presentation and Accounting Pronouncements](index=8&type=section&id=Note%201-2%3A%20Basis%20of%20Presentation%20and%20Accounting%20Pronouncements) This note outlines the basis of financial statement preparation, highlights global economic risks impacting estimates, and details the adoption of new accounting for supplier finance programs - The company identified the global economic environment, including inflation and geopolitical conflicts, as a significant risk that could materially affect estimates for goodwill, asset impairment, deferred tax assets, and customer receivables[21](index=21&type=chunk)[22](index=22&type=chunk) - The company adopted new guidance on supplier finance programs. Obligations under these programs totaled **$608 million** at March 31, 2023, and are classified as accounts payable, with payments reflected in operating cash flows[27](index=27&type=chunk) [Note 3: Business Segment Information](index=10&type=section&id=Note%203%3A%20Business%20Segment%20Information) This note details the performance of the company's four reportable segments, showing a decrease in total sales and comparable operating earnings for Q1 2023 compared to Q1 2022 Net Sales and Comparable Operating Earnings by Segment (Q1 2023 vs. Q1 2022) | ($ in millions) | Net Sales Q1 2023 | Net Sales Q1 2022 | Comparable Operating Earnings Q1 2023 | Comparable Operating Earnings Q1 2022 | | :--- | :--- | :--- | :--- | :--- | | **Bev. pkg, North & Central America** | $1,504 | $1,609 | $183 | $174 | | **Bev. pkg, EMEA** | $834 | $942 | $73 | $100 | | **Bev. pkg, South America** | $450 | $494 | $50 | $78 | | **Aerospace** | $508 | $504 | $60 | $43 | [Note 4: Acquisitions and Dispositions](index=14&type=section&id=Note%204%3A%20Acquisitions%20and%20Dispositions) This note details the sale of the Russian aluminum beverage packaging business in Q3 2022 and the divestiture of the remaining Ball Metalpack equity in Q1 2022 - The company completed the sale of its Russian aluminum beverage packaging business in Q3 2022 for **$530 million** cash consideration[36](index=36&type=chunk) - In Q1 2022, Ball sold its remaining investment in Ball Metalpack for approximately **$305 million**, recognizing a gain of **$298 million**[38](index=38&type=chunk) [Note 10 & 12: Property, Plant & Equipment and Intangible Assets](index=19&type=section&id=Note%2010%20%26%2012%3A%20PP%26E%20and%20Intangible%20Assets) This note reports a slight increase in net property, plant, and equipment and a decrease in net intangible assets, along with the impact of a revision in estimated useful lives on depreciation expense - A change in the estimated useful lives of equipment and buildings, effective July 1, 2022, reduced depreciation expense by approximately **$25 million** (**$19 million** after tax) for the three months ended March 31, 2023[61](index=61&type=chunk) [Note 15: Debt](index=23&type=section&id=Note%2015%3A%20Debt) This note details the increase in total long-term debt to $9.16 billion as of March 31, 2023, primarily due to higher revolver borrowings, while confirming compliance with debt covenants Long-Term Debt Composition | ($ in millions) | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Senior Notes | $7,059 | $7,042 | | Senior Credit Facility | $2,150 | $1,550 | | Other | ($45) | ($49) | | **Total** | **$9,164** | **$8,543** | - The company was in compliance with its most restrictive debt covenant, a leverage ratio of no greater than 5.0 times, at March 31, 2023[75](index=75&type=chunk) [Note 21: Contingencies](index=34&type=section&id=Note%2021%3A%20Contingencies) This note outlines various ongoing lawsuits and claims, including environmental matters, patent litigation, and a Brazilian customer dispute, with estimated liabilities and expected financial impacts - The company estimates potential liabilities for all known environmental matters to be approximately **$26 million**[105](index=105&type=chunk) - Ball is in ongoing patent litigation with Crown Packaging Technology, Inc. The case was remanded back to the District Court, and a motion for summary judgment was filed by Ball in March 2023[106](index=106&type=chunk) - In Brazil, a regional customer breached a supply agreement, with Ball's remaining financial exposure confirmed at **$37 million** under a four-year repayment plan signed in March 2023[113](index=113&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=39&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the Q1 2023 net sales decrease to the Russian business sale, lower volumes, and unfavorable currency, while net earnings fell due to a prior-year asset sale gain and higher interest expense - Q1 2023 net sales decreased to **$3.49 billion** from **$3.72 billion** in Q1 2022, primarily due to the sale of the Russian business, decreased volumes, currency translation, and the pass-through of lower aluminum prices[136](index=136&type=chunk) - Net earnings decreased significantly in Q1 2023, impacted by the prior year's gain on the sale of the Ball Metalpack investment, the sale of the Russian business, lower volumes, and a **$44 million** increase in interest expense[137](index=137&type=chunk)[141](index=141&type=chunk) - The company continues to execute its 'Drive for 10' vision, focusing on maximizing value, expanding into new products like the aluminum cup, aligning with key customers, broadening geographic reach, and leveraging technological expertise[128](index=128&type=chunk)[131](index=131&type=chunk) - Cash used in operating activities was **$275 million** in Q1 2023, an improvement from an **$804 million** use of cash in Q1 2022, but still reflecting working capital outflows[160](index=160&type=chunk) [Results of Business Segments](index=47&type=section&id=Results%20of%20Business%20Segments) Segment performance in Q1 2023 varied, with Aerospace showing strong growth, North & Central America beverage packaging improving operating earnings, and EMEA and South America beverage packaging experiencing declines - **Beverage Packaging, North and Central America:** Comparable operating earnings increased by **$9 million** YoY, driven by cost savings from facility closures, lower depreciation, and income from a terminated power contract, which offset lower volumes[146](index=146&type=chunk) - **Beverage Packaging, EMEA:** Comparable operating earnings decreased by **$27 million** YoY, primarily due to the sale of the Russian business; excluding Russia, the segment's sales and earnings grew[148](index=148&type=chunk)[151](index=151&type=chunk) - **Beverage Packaging, South America:** Comparable operating earnings fell by **$28 million** YoY due to decreased volumes and unfavorable customer/product mix[153](index=153&type=chunk) - **Aerospace:** Comparable operating earnings increased by **$17 million** YoY due to new program wins and strong operational performance, with contract backlog standing at **$2.77 billion**[155](index=155&type=chunk)[156](index=156&type=chunk) [Financial Condition, Liquidity and Capital Resources](index=50&type=section&id=Financial%20Condition%2C%20Liquidity%20and%20Capital%20Resources) The company's liquidity is supported by operating cash flows and external borrowings, with total debt increasing to $9.72 billion and sufficient available credit to meet obligations and planned capital expenditures - Total interest-bearing debt stood at **$9.72 billion** at March 31, 2023, up from **$9.00 billion** at year-end 2022[167](index=167&type=chunk) - The company had approximately **$890 million** available under its long-term committed revolving credit facilities as of March 31, 2023[168](index=168&type=chunk) - Share repurchases in Q1 2023 were minimal, totaling only **$3 million**, compared to **$98 million** in Q1 2022[167](index=167&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=56&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company employs established risk management policies to mitigate exposure to fluctuations in commodity prices, interest rates, and currency exchange rates - The company employs risk management policies and procedures to reduce commercial risk exposure to fluctuations in commodity prices, interest rates, and currency exchange rates[180](index=180&type=chunk) [Controls and Procedures](index=58&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2023, with no material changes to internal control over financial reporting during Q1 2023 - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period[182](index=182&type=chunk) - No changes in internal control over financial reporting occurred during Q1 2023 that have materially affected, or are reasonably likely to materially affect, internal controls[182](index=182&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=58&type=section&id=Item%201.%20Legal%20Proceedings) This section confirms no new material legal proceedings were reported for Q1 2023 beyond those already disclosed in Note 21 of the financial statements - No new reportable events under this item occurred during the quarter, with reference made to Note 21 for ongoing matters[184](index=184&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=60&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section summarizes common stock repurchases for Q1 2023, detailing shares bought back and the remaining availability under the board-authorized program Share Repurchases Q1 2023 | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | Jan 2023 | — | $ — | | Feb 2023 | — | $ — | | Mar 2023 | 51,784 | $51.14 | | **Total** | **51,784** | **$51.14** | [Exhibits](index=61&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and XBRL data files - The report includes CEO and CFO certifications (Exhibits 31.1, 31.2, 32.1, 32.2) and Inline XBRL documents (Exhibit 101)[192](index=192&type=chunk)

```markdown [PART I. Business Overview and Risk Factors](index=3&type=section&id=PART%20I.) Provides an overview of business operations and key risk factors [Item 1. Business](index=5&type=section&id=Item%201.%20Business) Ball Corporation is a global leader in aluminum packaging for beverages, personal care, and household products, with **87%** of **2022 net sales** from packaging and **13%** from its aerospace segment. The company's strategy, 'Drive for 10,' focuses on maximizing value, expanding products, aligning with markets, broadening geographic reach, and leveraging technological expertise, while maintaining a disciplined financial strategy aimed at **10-15% comparable diluted EPS growth** and **maximizing cash flow**. Sustainability and circularity are core to its business, emphasizing **infinitely recyclable aluminum** and a commitment to reducing **GHG emissions** - Ball Corporation is a leading global supplier of aluminum packaging for beverage, personal care, and household products, and also provides aerospace technologies and services[11](index=11&type=chunk) 2022 Consolidated Net Sales Breakdown | Segment | Percentage of Consolidated Net Sales | | :---------------- | :----------------------------------- | | Packaging | **87%** | | Aerospace | **13%** | - The 'Drive for 10' vision guides the company's strategy, focusing on maximizing value, expanding products, aligning with customers/markets, broadening geographic reach, and leveraging technological expertise[14](index=14&type=chunk) - Financial strategy aims for **10-15% comparable diluted EPS growth**, **maximizing cash flow** and increasing **Economic Value Added (EVA®) dollars**[14](index=14&type=chunk) - Sustainability and circularity are integral to Ball's business strategy, with a commitment to a science-based **55% reduction in GHG footprint** by **2030** and **net-zero carbon emissions** before **2050**, driven by the **infinite recyclability** of aluminum[16](index=16&type=chunk)[17](index=17&type=chunk)[18](index=18&type=chunk)[19](index=19&type=chunk) [Our Strategy](index=5&type=section&id=Our%20Strategy) Outlines the company's strategic vision and financial objectives - The 'Drive for 10' vision, launched in **2011**, defines Ball's overall business strategy through five strategic levers: maximizing value in existing businesses, expanding into new products/capabilities, aligning with key customers/markets, broadening geographic reach, and leveraging technological expertise[14](index=14&type=chunk) - The financial strategy focuses on delivering **10-15% comparable diluted EPS growth**, **maximizing cash flow generation**, and increasing **Economic Value Added (EVA®) dollars**[14](index=14&type=chunk) - Cash generated is primarily used for operations, growth capital investments, debt servicing, and shareholder returns via stock buybacks and dividends[15](index=15&type=chunk) [Sustainability and Circularity](index=7&type=section&id=Sustainability%20and%20Circularity) Highlights the company's commitment to environmental, social, and economic sustainability - Sustainability and circularity are core to Ball's 'Drive for 10' vision, adopting a triple bottom-line approach (environmental, economic, social) and aiming for truly circular economic solutions[16](index=16&type=chunk) - Key ESG commitments include a science-based **55% reduction in GHG footprint** by **2030** and **net-zero carbon emissions** before **2050**, human capital management (diversity and inclusion), and community engagement[17](index=17&type=chunk) - Aluminum packaging is highlighted for its **infinite recyclability** and high economic value, with **75%** of all aluminum ever produced still in use today, contrasting with plastic's limited recyclability and downcycling[19](index=19&type=chunk)[20](index=20&type=chunk) - The aerospace business contributes to sustainability by providing systems for environmental monitoring, weather prediction, climate change monitoring, and **GHG emissions** tracking[24](index=24&type=chunk) - Ball received an **A- score** in CDP's climate change program, maintained an MSCI AA ESG rating, and was included on the **2022** Dow Jones Sustainability Index[27](index=27&type=chunk) [Human Capital and Employees](index=9&type=section&id=Human%20Capital%20and%20Employees) Describes the company's global workforce, culture, and talent management initiatives - As of the end of **2022**, Ball and its subsidiaries employed approximately **21,000** employees globally, with about **10,300** in the U.S[28](index=28&type=chunk) - The company's culture is built on uncompromising integrity, customer focus, ownership mentality, attention to detail, and innovation[29](index=29&type=chunk) - Diversity and Inclusion (D&I) is a key part of the 'Drive for 10' vision, with initiatives including unconscious bias training, Ball Network and Interest Groups (BNIs), and a focus on diversity in talent acquisition and leadership[30](index=30&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk) - Talent management focuses on attracting, developing, and retaining talent through rigorous hiring processes, a leadership framework ('Inspire, Connect, Achieve'), and succession planning[34](index=34&type=chunk) - Training and development resources include tuition reimbursement, a learning management platform, leadership discussions, and a new LinkedIn Learning platform[35](index=35&type=chunk)[36](index=36&type=chunk) - Employee engagement is fostered through clear communication (town halls, eNews) and recognition programs, with regular surveys indicating high engagement levels[38](index=38&type=chunk) - Total rewards are competitive and performance-based, reflecting a pay-for-performance philosophy, including **EVA®-based incentive plans**[39](index=39&type=chunk) - Health, safety, and wellness are top priorities, with policies and procedures to reduce workplace risks, regular training, and an expanded Employee Assistance Program (EAP) for global employees[40](index=40&type=chunk) [Our Reportable Segments](index=13&type=section&id=Our%20Reportable%20Segments) Identifies the company's primary business segments for financial reporting - Ball Corporation reports financial performance across four segments: Beverage Packaging, North and Central America; Beverage Packaging, Europe, Middle East and Africa (EMEA); Beverage Packaging, South America; and Aerospace[42](index=42&type=chunk) [Beverage Packaging, North and Central America, Segment](index=13&type=section&id=Beverage%20Packaging,%20North%20and%20Central%20America,%20Segment) Provides an overview of the North and Central America beverage packaging operations Beverage Packaging, North and Central America, Segment (2022) | Metric | Value | | :----------------------------------- | :---------- | | Percentage of consolidated net sales | **44%** | | Units shipped | **52 billion** | | Market share (estimated) | **37%** | - The segment operates **18** manufacturing facilities in the U.S., **one** in Canada, and **two** in Mexico. Facilities in Phoenix, Arizona, and St. Paul, Minnesota, were permanently closed in **Q4 2022** and **Q1 2023**, respectively[43](index=43&type=chunk)[44](index=44&type=chunk) - Sales volumes are typically highest from April through September. The company mitigates aluminum cost changes through contract provisions and derivative instruments[46](index=46&type=chunk)[47](index=47&type=chunk) [Beverage Packaging, EMEA, Segment](index=15&type=section&id=Beverage%20Packaging,%20EMEA,%20Segment) Provides an overview of the EMEA beverage packaging operations Beverage Packaging, EMEA, Segment (2022) | Metric | Value | | :----------------------------------- | :---------- | | Percentage of consolidated net sales | **25%** | | Units shipped (excluding Russia) | **35 billion** | | Market share (estimated, ex-Russia) | **39%** | - The segment includes **17** facilities in Europe and **one** each in Cairo, Egypt, and Manisa, Turkey. Ball completed the sale of its Russian aluminum beverage packaging business (three facilities) in **Q3 2022**[48](index=48&type=chunk) - New plants in Pilsen, Czech Republic, and Northamptonshire, U.K., are expected to begin production in **H1 2023**[48](index=48&type=chunk) - Sales volumes are highest from May through August, with a smaller peak before winter holidays in the U.K. Aluminum's **infinite recyclability** is driving increased brand adoption[49](index=49&type=chunk) [Beverage Packaging, South America, Segment](index=17&type=section&id=Beverage%20Packaging,%20South%20America,%20Segment) Provides an overview of the South America beverage packaging operations Beverage Packaging, South America, Segment (2022) | Metric | Value | | :----------------------------------- | :---------- | | Percentage of consolidated net sales | **14%** | | Units shipped | **19 billion** | | Market share (estimated) | **46%** | - Operations include **12** facilities (**9** in Brazil, **1** each in Argentina, Chile, Paraguay). The Santa Cruz, Brazil, facility ceased operations in **Q3 2022**, and production was temporarily reduced across other Brazilian facilities[51](index=51&type=chunk) - Sales volumes are typically highest from September through December. Aluminum cost exposure is limited by pass-through provisions in sales contracts and derivative instruments[52](index=52&type=chunk) [Aerospace Segment](index=17&type=section&id=Aerospace%20Segment) Details the company's aerospace technologies and services business Aerospace Segment (2022) | Metric | Value | | :----------------------------------- | :----------- | | Percentage of consolidated net sales | **13%** | | Backlog (Dec 31, 2022) | **$2.97 billion** | | Backlog (Dec 31, 2021) | **$2.47 billion** | | 2023 Revenue from Backlog (expected) | **$1.52 billion** | - The segment focuses on national defense hardware, antenna and video tactical solutions, civil and operational space hardware, and systems engineering services[53](index=53&type=chunk) - The majority of business (**98%** of **2022 sales**) is under contracts with U.S. government agencies (DoD, NASA) as a prime or subcontractor, typically **1-5** years in duration[53](index=53&type=chunk) - **Backlog** increased from **$2.47 billion** in **2021** to **$2.97 billion** in **2022**, with **$1.52 billion** expected to be recognized as revenue in **2023**[56](index=56&type=chunk) [Other Business Activities](index=19&type=section&id=Other) Covers non-reportable operating segments including aerosol packaging and aluminum cups - The 'Other' category includes non-reportable operating segments: beverage packaging in India, Saudi Arabia, and Myanmar; extruded aluminum aerosol containers and slugs (aerosol packaging); and aluminum cups[57](index=57&type=chunk)[58](index=58&type=chunk)[59](index=59&type=chunk)[60](index=60&type=chunk) - Aerosol packaging represented less than **5%** of Ball's consolidated **net sales** in **2022**, with **1.4 billion** units shipped out of a **6.6 billion** unit market in its operating countries[59](index=59&type=chunk) - The aluminum cups business, produced in Rome, Georgia, aims to meet demand for sustainable beverage packaging and expand adoption across various establishments[60](index=60&type=chunk) [Patents](index=19&type=section&id=Patents) Discusses the materiality of the company's active patents to its business operations - Management believes none of the company's active patents or groups of patents are material to the overall successful operation of the business[61](index=61&type=chunk) [Research and Development](index=21&type=section&id=Research%20and%20Development) Outlines R&D efforts in packaging innovation and aerospace product development - R&D in packaging focuses on innovation (new features, sizes, shapes, uses) and improving manufacturing efficiencies and product sustainability[63](index=63&type=chunk) - Aerospace R&D concentrates on designing, developing, and manufacturing innovative aerospace products and systems, including spacecraft, instruments, sensors, and advanced technologies for deep space missions[63](index=63&type=chunk) [Where to Find More Information](index=21&type=section&id=Where%20to%20Find%20More%20Information) Directs to official sources for company reports and corporate governance documents - Ball Corporation's SEC reports, proxy materials, and other information are available on the SEC's website (www.sec.gov) and the company's investor relations website (www.ball.com/investors)[65](index=65&type=chunk) - Corporate governance documents, including guidelines, ethics statements, and committee charters, are also available on the company's investor relations website[65](index=65&type=chunk) [Item 1A. Risk Factors](index=21&type=page&id=Item%201A.%20Risk%20Factors) Ball Corporation faces a range of risks that could materially impact its business, including challenges in managing growth and change, regional operating losses, customer concentration, significant debt levels, intense competition from alternative products, and exposure to broader geographic operations. The company is also vulnerable to raw material price fluctuations, reliance on estimates in aerospace contracts, potential goodwill impairment, and pension plan underperformance. Regulatory changes, IT security threats, human capital retention issues, and environmental factors like climate change and remediation costs further contribute to business uncertainties - Failure to effectively manage change and growth, including rebalancing manufacturing capacity, attracting talent, and implementing IT systems, could adversely affect the business[68](index=68&type=chunk) - Operating losses in specific regions or overcapacity could negatively impact financial results[69](index=69&type=chunk) - Dependence on a limited number of major customers in packaging and U.S. government agencies in aerospace poses a risk of significant sales impact from loss of customers or reduced purchasing levels[70](index=70&type=chunk)[71](index=71&type=chunk) Interest-Bearing Debt (December 31, 2022) | Metric | Value | | :---------------------- | :----------- | | Total Interest-Bearing Debt | **$9.00 billion** | - High **debt levels** (**$9.00 billion** at Dec **31**, **2022**) increase vulnerability to economic downturns, limit **cash flow** for operations/investments, and restrict financial flexibility[72](index=72&type=chunk) - Intense competition in both packaging (price, innovation, sustainability, service, quality) and aerospace (technical capability, cost, schedule) industries, including from alternative products like plastic and glass, could negatively impact profitability[73](index=73&type=chunk)[74](index=74&type=chunk) - Broad geographic operations (**45%** of **2022 net sales** from outside the U.S.) expose the company to political/economic instability, restrictive trade policies, exchange rate risks, and inflation[76](index=76&type=chunk) - Vulnerability to fluctuations in raw material supply and price (especially aluminum) due to economic conditions, commodity price changes, and supply chain disruptions, despite pass-through provisions and derivative instruments[78](index=78&type=chunk)[79](index=79&type=chunk) - Reliance on estimates in aerospace contracts (**percentage-of-completion method**) and defined benefit **pension plans** could lead to materially different financial results if assumptions change[81](index=81&type=chunk)[82](index=82&type=chunk)[85](index=85&type=chunk)[86](index=86&type=chunk) - Significant **goodwill** on the balance sheet is subject to annual recoverability tests, and impairment could materially affect **net earnings** and **net assets**[83](index=83&type=chunk)[84](index=84&type=chunk) - Restricted access to **capital markets** could adversely affect short-term liquidity and ability to meet debt obligations[87](index=87&type=chunk) - Increased **IT security threats** and sophisticated computer crime pose risks to systems, networks, products, and data, potentially leading to compromise of confidential information, operational disruptions, and reputational harm[108](index=108&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk) - Failure to retain key management and personnel could hinder the implementation of key objectives[111](index=111&type=chunk) - Prolonged **work stoppages** at facilities with union employees (**9%** North America, **38%** Europe) could jeopardize financial position[111](index=111&type=chunk)[112](index=112&type=chunk) - Adverse weather and climate changes may reduce demand for products and disrupt supply chains[114](index=114&type=chunk) - Substantial **environmental remediation** and compliance costs are ongoing due to federal, state, provincial, and local laws and regulations[115](index=115&type=chunk) [General Risks](index=22&type=section&id=General%20Risks) Addresses broad operational, financial, and competitive risks facing the company - Risks include managing growth, rebalancing manufacturing capacity, attracting/retaining personnel, expanding regulatory compliance, and optimizing IT systems[68](index=68&type=chunk) - Operating losses in specific regions or overcapacity can occur, making it difficult to forecast and meet customer needs[69](index=69&type=chunk) - Loss of a key customer or reduction in their requirements could significantly impact sales, especially given reliance on a limited number of major beverage, personal care, and household product companies[70](index=70&type=chunk) - Aerospace segment contracts with U.S. government agencies are subject to funding cuts, delays, technical uncertainties, and budget changes[71](index=71&type=chunk) - The company's **$9.00 billion interest-bearing debt** at December **31**, **2022**, increases vulnerability to adverse economic conditions and limits **cash flow** for operations and investments[72](index=72&type=chunk) - Intense competition in packaging (price, innovation, sustainability, service, quality) and aerospace (technical capability, cost, schedule) industries, with potential for lower prices or superior products from competitors[73](index=73&type=chunk) - Competition from substitute products like PET and glass bottles could reduce profits and **cash flows**, especially given the narrow product range of aluminum packaging[74](index=74&type=chunk)[75](index=75&type=chunk) - Broader geographic operations (**45%** of **2022 net sales** from outside the U.S.) lead to volatile financial results due to political/economic instability, trade policies, exchange rate risks, and inflation[76](index=76&type=chunk) - Exposure to exchange rate fluctuations, particularly the euro to U.S. dollar, impacts financial results and capital ratios, managed through derivative instruments[77](index=77&type=chunk)[78](index=78&type=chunk) - Vulnerability to supply and price fluctuations of raw materials (especially aluminum), with risks of supply shortages and unrecoverable cost increases despite pass-through provisions and hedging[79](index=79&type=chunk) - Changes in estimates for aerospace contracts (**percentage-of-completion**) and **goodwill** recoverability could materially affect future financial results[81](index=81&type=chunk)[82](index=82&type=chunk)[83](index=83&type=chunk)[84](index=84&type=chunk) - **Pension plan** underperformance could require additional contributions, impacting **cash flow** and **shareholder equity**, with risks from multi-employer plans[85](index=85&type=chunk)[86](index=86&type=chunk) - Restricted access to **capital markets** could hinder funding for operations, **capital expenditures**, and **debt service**[87](index=87&type=chunk) - The global credit, financial, and economic environment could negatively impact operations, including customer/supplier creditworthiness, pension asset values, debt covenant compliance, and **cash flows**[88](index=88&type=chunk) - Changes in U.S. GAAP and SEC rules could materially impact reported results and key financial ratios[89](index=89&type=chunk) - Material weaknesses in **internal control over financial reporting** could lead to misstatements in financial statements; however, no material weaknesses were identified as of December **31**, **2022**[89](index=89&type=chunk)[90](index=90&type=chunk)[91](index=91&type=chunk) - Risks related to health epidemics, pandemics (like COVID-19), and military conflicts (Russia-Ukraine) could cause loss of customers, supply disruptions, **work stoppages**, and impact financial results[93](index=93&type=chunk) [Governmental and regulatory risks](index=31&type=section&id=Governmental%20and%20regulatory%20risks) Covers risks related to compliance with laws, environmental standards, and government contracts - The company is subject to increasing federal, state, provincial, and local laws and regulations regarding manufacturing, product content, safety, climate change, and environmental standards, which could adversely affect operations and sales[96](index=96&type=chunk) - Regulations on 'conflict minerals' and container-related legislation (e.g., deposit systems, EPR programs) could increase costs and affect supply chains[97](index=97&type=chunk)[98](index=98&type=chunk) - Aerospace segment contracts are subject to U.S. government funding cuts, modifications, and terminations, with budgetary constraints and potential sequestration impacting revenue and **backlog**[99](index=99&type=chunk)[100](index=100&type=chunk) - As a U.S. government contractor, Ball is subject to audits and investigations (DCAA, DCMA), with risks of unallowable costs, penalties, or debarment if improper activities or inadequate systems are found[102](index=102&type=chunk)[103](index=103&type=chunk) - Increased regulation on raw materials like epoxy-based coatings (containing BPA) and per- and polyfluoroalkyl substances (PFAS) could materially affect the business, requiring conversion to alternative coatings[104](index=104&type=chunk)[105](index=105&type=chunk) - Changes in tax laws, including OECD and European Commission initiatives for minimum tax thresholds, could impact **earnings** and **cash flows**[106](index=106&type=chunk) [Technological risks](index=35&type=section&id=Technological%20risks) Examines risks associated with technology development, IT security, and data privacy - Decreases in the ability to develop or apply new technology and know-how, or to improve production processes and introduce new products, may affect competitiveness[108](index=108&type=chunk) - Increased **IT security threats** and sophisticated computer crime pose risks to systems, networks, products, and data, potentially leading to compromise of confidential information, operational disruptions, and reputational harm[108](index=108&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk) - Data privacy and protection laws are evolving, increasing compliance challenges, costs, and potential fines[110](index=110&type=chunk) [Human capital risks](index=35&type=section&id=Human%20capital%20risks) Focuses on risks related to talent retention and potential labor disruptions - Failure to retain key management and personnel, especially without appropriate succession planning, could make it difficult to manage the business and meet objectives[111](index=111&type=chunk) - Prolonged **work stoppages** or strikes at facilities with union employees (**9%** North American, **38%** European) could materially affect business, financial condition, **cash flows**, or results of operations[111](index=111&type=chunk)[112](index=112&type=chunk) [Environmental risks](index=37&type=section&id=Environmental%20risks) Highlights risks from climate change, adverse weather, and environmental compliance costs - Adverse weather and climate changes can reduce demand for beverages and impact supply chains, production, and input costs[114](index=114&type=chunk) - The company is subject to substantial **environmental remediation** and compliance costs due to laws and regulations concerning emissions, waste, and hazardous substances, and is designated as a potentially responsible party at several waste sites[115](index=115&type=chunk) [Item 1B. Unresolved Staff Comments](index=37&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) There were no unresolved staff comments required to be reported under this item - No matters required to be reported under this item[116](index=116&type=chunk) [Item 2. Properties](index=37&type=section&id=Item%202.%20Properties) Ball Corporation's properties, including its corporate headquarters in Westminster, Colorado, and aerospace segment offices in Broomfield, Colorado, are well-maintained and adequate for their intended purposes. The company operates numerous owned or leased manufacturing facilities globally across its beverage packaging (North & Central America, EMEA, South America, Other), aerosol packaging, and aluminum cups segments - Ball's corporate headquarters are in Westminster, Colorado, and aerospace segment management offices are in Broomfield, Colorado, with various owned and leased facilities for aerospace operations[117](index=117&type=chunk) - The company maintains manufacturing locations for significant packaging operations across North and Central America (e.g., Bowling Green, KY; Monterrey, Mexico), EMEA (e.g., Belgrade, Serbia; Gelsenkirchen, Germany), South America (e.g., Aguas Claras, Brazil; Buenos Aires, Argentina), and Other (e.g., Dammam, Saudi Arabia; Mumbai, India)[118](index=118&type=chunk)[120](index=120&type=chunk) - Aerosol packaging facilities are located in Europe, U.S., Canada, Brazil, Mexico, and India, while the dedicated aluminum cups manufacturing facility is in Rome, Georgia[120](index=120&type=chunk) [Item 3. Legal Proceedings](index=41&type=section&id=Item%203.%20Legal%20Proceedings) Details of the company's legal proceedings are included in Note **22** to the consolidated financial statements - Legal proceedings are detailed in Note **22** of the consolidated financial statements[121](index=121&type=chunk) [Item 4. Mine Safety Disclosures](index=41&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to Ball Corporation - Not applicable[121](index=121&type=chunk) [PART II. Financial Information](index=41&type=section&id=PART%20II.) Provides an overview of the company's financial performance and condition [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases](index=41&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases) Ball Corporation's **common stock** is traded on the New York Stock Exchange under the ticker symbol BALL. As of February **16**, **2023**, there were **6,739** **common shareholders** of record. The company did not repurchase any **common stock** during the fourth quarter of **2022**, but has an ongoing repurchase program with **50 million** shares authorized. Shareholder return performance for BALL lagged the S&P **500** but outperformed the DJ US Containers & Packaging Index over the five-year period ended December **31**, **2022** - Ball Corporation **common stock** is listed on the New York Stock Exchange (ticker: BALL), with **6,739** **common shareholders** of record as of February **16**, **2023**[123](index=123&type=chunk) Common Stock Repurchases (Q4 2022) | Period | Total Number of Shares Purchased | | :-------------------------- | :------------------------------- | | October 1 to October 31, 2022 | — | | November 1 to November 30, 2022 | — | | December 1 to December 31, 2022 | — | | Total | — | - The company has an ongoing repurchase program with **50 million** shares authorized by the Board of Directors[125](index=125&type=chunk) Cumulative Total Return Analysis (2017-2022) | Index | 12/31/2017 | 12/31/2018 | 12/31/2019 | 12/31/2020 | 12/31/2021 | 12/31/2022 | | :--------------------------- | :--------- | :--------- | :--------- | :--------- | :--------- | :--------- | | BALL | **$100.00** | **$122.65** | **$173.97** | **$252.58** | **$263.00** | **$141.42** | | S&P 500 | **$100.00** | **$95.62** | **$125.72** | **$148.85** | **$191.58** | **$156.88** | | DJ US Containers & Packaging | **$100.00** | **$79.85** | **$100.28** | **$118.67** | **$129.17** | **$103.73** | [Item 6. [Reserved]](index=42&type=section&id=Item%206.%20%5BReserved%5D) Item **6** of Part II has been removed and reserved - Item **6** of Part II has been removed and reserved[127](index=127&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=43&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Ball Corporation's management discussion and analysis highlights its position as a leading aluminum packaging supplier and aerospace technology provider. In **2022**, consolidated **net sales** increased to **$15.35 billion**, primarily due to higher aluminum prices, but **net earnings** decreased to **$719 million** due to increased manufacturing and inflationary costs. The company is implementing cost recovery programs and production rightsizing to improve future results. Each business segment experienced varying sales and **earnings** trends, with aerospace showing **backlog** growth. The company's financial condition is supported by strong liquidity, with **cash flows** from operations and external borrowings used for **capital expenditures**, **debt service**, and shareholder returns. Critical accounting policies include **revenue recognition** in aerospace and defined benefit **pension plans**, both requiring significant management estimates - Ball Corporation is a leading aluminum packaging supplier and aerospace technology provider, with packaging products competing with plastics and glass[129](index=129&type=chunk) - The company's 'Drive for 10' vision guides its corporate strategy, focusing on maximizing value, expanding products, aligning with customers, broadening geographic reach, and leveraging technological expertise[134](index=134&type=chunk)[135](index=135&type=chunk) Consolidated Sales and Earnings (2020-2022) | Metric | 2022 | 2021 | 2020 | | :---------------------------------------------- | :----------- | :----------- | :----------- | | Net sales | **$15,349 M** | **$13,811 M** | **$11,781 M** | | Net earnings attributable to Ball Corporation | **$719 M** | **$878 M** | **$585 M** | | Net earnings as a % of net sales | **5%** | **6%** | **5%** | - **Net sales** in **2022** increased by **$1,538 million** YoY, primarily due to the pass-through of higher aluminum prices and delayed recovery of inflationary costs, partially offset by currency translation[140](index=140&type=chunk) - **Net earnings attributable to Ball Corporation** in **2022** decreased by **$159 million** YoY, mainly due to increased manufacturing and inflationary costs, and net charges from Russian asset impairment/sale, partially offset by gains from Ball Metalpack sale and lower pension settlement charges[141](index=141&type=chunk) - **Cost of sales** (excluding D&A) increased to **$12,766 million** in **2022** (**83%** of **net sales**) from **$11,085 million** in **2021** (**80%** of **net sales**), driven by higher manufacturing costs, inflation, and supply chain disruptions[141](index=141&type=chunk) - **Depreciation and amortization expense** decreased to **$672 million** in **2022** from **$700 million** in **2021**, primarily due to revised estimated useful lives of manufacturing equipment and the sale of the Russian business[142](index=142&type=chunk)[143](index=143&type=chunk) - Total **interest expense** increased to **$330 million** in **2022** from **$283 million** in **2021**, due to higher global interest rates and increased **debt levels**[147](index=147&type=chunk) - The **effective income tax rate** increased to **18.0%** in **2022** from **15.5%** in **2021**[148](index=148&type=chunk) Cash Flows Summary (2020-2022) | Cash Flow Activity | 2022 | 2021 | 2020 | | :---------------------------------- | :----------- | :----------- | :----------- | | Operating Activities | **$301 M** | **$1,760 M** | **$1,432 M** | | Investing Activities | **$(786) M** | **$(1,639) M** | **$(1,181) M** | | Financing Activities | **$485 M** | **$(894) M** | **$(602) M** | - **Cash flows from operating activities** significantly decreased to **$301 million** in **2022** from **$1,760 million** in **2021**, primarily due to **working capital outflows**[171](index=171&type=chunk) - Total **interest-bearing debt** increased to **$9.00 billion** at December **31**, **2022**, from **$7.78 billion** at December **31**, **2021**[177](index=177&type=chunk) - The company expects **2023 capital expenditures** to be around **$1.2 billion** and intends to return approximately **$250 million** to shareholders in dividends[184](index=184&type=chunk) [OVERVIEW](index=43&type=section&id=OVERVIEW) Provides a general introduction to Ball Corporation's business and strategic direction - Ball Corporation is a leading global aluminum packaging supplier and provider of aerospace technologies and services[129](index=129&type=chunk) - The company sells packaging products to large multinational beverage, personal care, and household product companies, maintaining long-term relationships and contracts[130](index=130&type=chunk) - Raw material costs, particularly aluminum, are mitigated through pass-through provisions in contracts and derivative instruments, though timing differences can impact **net earnings**[131](index=131&type=chunk) - The aerospace business primarily serves U.S. government agencies under **1-5** year contracts, characterized by intense competition and long operating cycles[132](index=132&type=chunk) - The 'Drive for 10' vision encompasses five strategic levers: maximizing value in existing businesses, expanding into new products, aligning with customers/markets, broadening geographic reach, and leveraging technological expertise[134](index=134&type=chunk)[135](index=135&type=chunk) - Key achievements include Aluminum Stewardship Initiative certification, commercializing the aluminum cup, introducing lightweight aerosol packaging, and expanding global manufacturing footprint[134](index=134&type=chunk)[135](index=135&type=chunk) [RESULTS OF OPERATIONS](index=47&type=section&id=RESULTS%20OF%20OPERATIONS) Analyzes the company's consolidated sales, earnings, and cost trends - The global economic environment in **2022** saw a sharp rise in inflation, impacted by supply chain disruptions, governmental policies, interest rates, and changing demand post-COVID-19[139](index=139&type=chunk) Consolidated Sales and Earnings (2020-2022) | Metric | 2022 | 2021 | 2020 | | :---------------------------------------------- | :----------- | :----------- | :----------- | | Net sales | **$15,349 M** | **$13,811 M** | **$11,781 M** | | Net earnings attributable to Ball Corporation | **$719 M** | **$878 M** | **$585 M** | | Net earnings as a % of net sales | **5%** | **6%** | **5%** | - **Net sales** increased by **$1,538 million** in **2022** compared to **2021**, primarily due to the pass-through of higher aluminum prices and delayed recovery of inflationary costs, partially offset by currency translation[140](index=140&type=chunk) - **Net earnings attributable to Ball Corporation** decreased by **$159 million** in **2022** compared to **2021**, mainly due to increased manufacturing and inflationary costs, and net charges from the Russian business impairment/sale, partially offset by gains from the Ball Metalpack sale and lower pension settlement charges[141](index=141&type=chunk) - **Cost of sales** (excluding D&A) increased to **$12,766 million** in **2022** (**83%** of **net sales**) from **$11,085 million** in **2021** (**80%** of **net sales**), driven by higher manufacturing costs, general inflationary pressures, and global supply chain disruptions[141](index=141&type=chunk) - **Depreciation and amortization expense** decreased to **$672 million** in **2022** from **$700 million** in **2021**, primarily due to revised estimated useful lives of manufacturing equipment and the impairment/sale of the Russian business, resulting in a **$49 million** reduction in depreciation for **2022**[142](index=142&type=chunk)[143](index=143&type=chunk)[145](index=145&type=chunk) - Selling, general and administrative (**SG&A**) expenses increased to **$626 million** in **2022** from **$593 million** in **2021**, mainly due to higher accounts receivable factoring costs[145](index=145&type=chunk) - Business consolidation costs and other activities decreased to **$71 million** in **2022** from **$142 million** in **2021**, including Russian asset impairment/sale, Ball Metalpack gain, and Brazilian contract breach charges[146](index=146&type=chunk) - Total **interest expense** increased to **$330 million** in **2022** from **$283 million** in **2021**, driven by higher global interest rates and increased **debt levels**[147](index=147&type=chunk) - The **effective income tax rate** was **18.0%** in **2022**, up from **15.5%** in **2021**, influenced by non-U.S. income, R&D credits, and state/local taxes[148](index=148&type=chunk) [RESULTS OF BUSINESS SEGMENTS](index=51&type=section&id=RESULTS%20OF%20BUSINESS%20SEGMENTS) Presents the financial performance of each of the company's operating segments Beverage Packaging, North and Central America Segment Performance (2020-2022) | Metric | 2022 | 2021 | 2020 | | :-------------------------- | :-------- | :-------- | :-------- | | Net sales | **$6,696 M** | **$5,856 M** | **$5,076 M** | | Comparable operating earnings | **$642 M** | **$681 M** | **$683 M** | | % of segment net sales | **10%** | **12%** | **13%** | - North and Central America segment sales increased by **$840 million** in **2022** YoY due to higher aluminum price pass-through, but comparable **operating earnings** decreased by **$39 million** due to unfavorable fixed cost absorption, higher inflation, and unfavorable customer mix[152](index=152&type=chunk) Beverage Packaging, EMEA Segment Performance (2020-2022) | Metric | 2022 | 2021 | 2020 | | :-------------------------- | :-------- | :-------- | :-------- | | Net sales | **$3,854 M** | **$3,509 M** | **$2,945 M** | | Comparable operating earnings | **$358 M** | **$452 M** | **$354 M** | | % of segment net sales | **9%** | **13%** | **12%** | - EMEA segment sales increased by **$345 million** in **2022** YoY due to higher aluminum price pass-through and **4% volume growth**, but comparable **operating earnings** decreased by **$94 million** due to unfavorable currency translation, higher inflation, energy costs, and the sale of the Russian business[153](index=153&type=chunk)[154](index=154&type=chunk) Beverage Packaging, South America Segment Performance (2020-2022) | Metric | 2022 | 2021 | 2020 | | :-------------------------- | :-------- | :-------- | :-------- | | Net sales | **$2,108 M** | **$2,016 M** | **$1,695 M** | | Comparable operating earnings | **$275 M** | **$348 M** | **$280 M** | | % of segment net sales | **13%** | **17%** | **17%** | - South America segment sales increased by **$92 million** in **2022** YoY due to higher aluminum price pass-through, but comparable **operating earnings** decreased by **$73 million** due to lower volumes (**6% decline**), unfavorable customer/product mix, and fixed cost absorption in Brazil[160](index=160&type=chunk) Aerospace Segment Performance (2020-2022) | Metric | 2022 | 2021 | 2020 | | :-------------------------- | :-------- | :-------- | :-------- | | Net sales | **$1,977 M** | **$1,911 M** | **$1,741 M** | | Comparable operating earnings | **$170 M** | **$169 M** | **$153 M** | | % of segment net sales | **9%** | **9%** | **9%** | - Aerospace segment sales increased by **$66 million** in **2022** YoY, and comparable **operating earnings** increased by **$1 million**, driven by new program wins and **backlog growth**, offset by supply chain inefficiencies and cost increases[161](index=161&type=chunk) Aerospace Segment Backlog (2021-2022) | Metric | 2022 | 2021 | | :---------------------- | :------------ | :------------ | | Backlog (Dec 31) | **$2.97 billion** | **$2.47 billion** | | 2023 Revenue from Backlog | **$1.52 billion** | N/A | [Management Performance Measures](index=55&type=section&id=Management%20Performance%20Measures) Explains the key financial and non-financial metrics used by management to evaluate performance - Management uses various measures to evaluate performance, including comparable **operating earnings**, comparable **net earnings**, comparable **diluted EPS**, return on average invested capital, **EVA® dollars**, EBIT, EBITDA, and **diluted EPS**[165](index=165&type=chunk) - Nonfinancial measures for packaging include production efficiency, spoilage rates, quality control, EHS statistics, volume data, and asset utilization. Aerospace uses contract revenue realization, award/incentive fees, proposal win rates, and **backlog**[166](index=166&type=chunk) [CRITICAL ACCOUNTING POLICIES AND ESTIMATES](index=55&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES%20AND%20ESTIMATES) Discusses accounting policies requiring significant management judgment and estimation - Critical accounting estimates involve significant judgment and estimation uncertainty, with potential material impact on financial condition or results[167](index=167&type=chunk) - **Revenue recognition** in the aerospace segment for **fixed-price long-term contracts** uses the **percentage-of-completion method**, requiring significant estimation of revenues, **costs at completion**, and future events[168](index=168&type=chunk) - Defined benefit **pension plans** require management to make assumptions about **long-term rate of return on plan assets**, **discount rates**, **salary inflation**, and **mortality rates**, which are highly susceptible to change[169](index=169&type=chunk) [FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES](index=56&type=section&id=FINANCIAL%20CONDITION,%20LIQUIDITY%20AND%20CAPITAL%20RESOURCES) Assesses the company's financial health, cash flows, debt, and capital allocation - Primary liquidity sources are **cash** from **operating activities** and external borrowings, expected to be sufficient for ongoing operations, **debt payments**, dividends, **share repurchases**, and **capital expenditures**[170](index=170&type=chunk) Cash Flows Summary (2020-2022) | Cash Flow Activity | 2022 | 2021 | 2020 | | :---------------------------------- | :----------- | :----------- | :----------- | | Operating Activities | **$301 M** | **$1,760 M** | **$1,432 M** | | Investing Activities | **$(786) M** | **$(1,639) M** | **$(1,181) M** | | Financing Activities | **$485 M** | **$(894) M** | **$(602) M** | - **Cash from operating activities** decreased significantly in **2022** to **$301 million** (from **$1,760 million** in **2021**) due to **working capital outflows**[171](index=171&type=chunk) - **Cash outflows from investing activities** were **$786 million** in **2022**, driven by **$1.65 billion** in **capital expenditures**, partially offset by **$455 million** from the sale of the Russian business and **$298 million** from the sale of Ball Metalpack[172](index=172&type=chunk) - **Cash inflows from financing activities** were **$485 million** in **2022**, primarily from new **senior notes** and credit facility borrowings, offset by **debt repayments**, **share repurchases**, and dividends[