# BALL Corp (BALL) FY 2024 MD&A

Verbatim Item 7 Management's Discussion and Analysis from BALL Corp's 10-K for fiscal year 2024.

SEC filing source: https://www.sec.gov/Archives/edgar/data/9389/000155837025001190/ball-20241231x10k.htm
Accession: 0001558370-25-001190
Filing date: 2025-02-20
Report date: 2024-12-31
Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary.
Confidence: high

Company profile: /company/BALL/
All MD&A years: /company/BALL/mda/
Previous year: /company/BALL/mda/fy2023/ (FY 2023)
Next year: /company/BALL/mda/fy2025/ (FY 2025)

Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

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Management’s discussion and analysis should be read in conjunction with the consolidated financial statements and accompanying notes included in Item 8 of this Annual Report on Form 10-K (annual report), which include additional information about our accounting policies, practices and the transactions underlying our financial results. The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) requires us to make estimates and assumptions that affect the reported amounts in our consolidated financial statements and the accompanying notes, including various claims and contingencies related to lawsuits, taxes, environmental and other matters arising during the normal course of business. We apply our best judgment, our knowledge of existing facts and circumstances and actions that we may undertake in the future in determining the estimates that affect our consolidated financial statements. We evaluate our estimates on an ongoing basis using our historical experience, as well as other factors we believe appropriate under the circumstances, such as current economic conditions, and adjust or revise our estimates as circumstances change. As future events and their effects cannot be determined with precision, actual results may differ from these estimates. Ball Corporation and its subsidiaries are referred to collectively as “Ball Corporation,” “Ball,” “the company,” “we” or “our” in the following discussion and analysis.

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OVERVIEW

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Business Overview and Industry Trends

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Ball Corporation is one of the world’s leading aluminum packaging suppliers. With a growth mindset and by pursuing operational excellence, we lean on our competitive strengths to reach our financial goals. We are focused on maintaining our strong financial position by listening to and partnering with our global customers, delivering operational efficiencies and an innovative product portfolio from our best-in-class manufacturing facilities and returning value to shareholders via share repurchases and dividends. In the aluminum packaging industry, sales and earnings can be increased by reducing costs, increasing prices, developing new products, expanding volume and making strategic acquisitions.

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We sell our aluminum packaging products mainly to large, multinational beverage, personal care and household products companies with which we have developed long-term relationships. This is evidenced by our high customer retention and our large number of long-term supply contracts. While we have a diversified customer base, we sell a significant portion of our packaging products to major companies and brands, as well as to numerous regional customers. The overall global aluminum packaging industry is growing and is expected to continue to grow in the medium to long term.

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We purchase our raw materials from relatively few suppliers. We also have exposure to inflation, in particular the rising costs of raw materials, as well as other direct cost inputs. We mitigate our exposure to the changes in the costs of aluminum through the inclusion of provisions in contracts covering the majority of our volumes to pass-through aluminum price changes, as well as through the use of derivative instruments. The pass-through provisions generally result in proportional increases or decreases in sales and costs with a greatly reduced impact, if any, on net earnings; however, there may be timing differences of when the costs are passed through. Because of our customer and supplier concentration, our business, financial condition and results of operations could be adversely affected by the loss, insolvency or bankruptcy of a major customer or supplier or a change in a supply agreement with a major customer or supplier, although our contract provisions generally mitigate the risk of customer loss, and our long-term relationships represent a known, stable customer base.

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From time to time, we have evaluated and expect to continue to evaluate possible transactions that we believe will benefit the company and our shareholders, which may include strategic acquisitions, divestitures of parts of our company or equity investments. At any time, we may be engaged in discussions or negotiations at various stages of development with respect to one or more possible transactions or may have entered into non-binding letters of intent. As part of any such initiatives, we may participate in processes being run by other companies or leading our own activities.

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RESULTS OF OPERATIONS

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Management’s discussion and analysis for our results of operations on a consolidated and segment basis include a quantification of factors that had a material impact. Other factors that did not have a material impact, but that are significant to understand the results, are qualitatively described.

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Refer to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of the company’s Annual Report on Form 10-K for the year ended December 31, 2023, as filed on February 20, 2024, for a comparison of our 2023 results of operations to the 2022 results. On February 16, 2024, the company completed the divestiture of its aerospace business. Effective as of the first quarter of 2024, the company reports its financial performance in three reportable segments: (1) beverage packaging, North and Central America; (2) beverage packaging, Europe, Middle East and Africa (beverage packaging, EMEA) and (3) beverage packaging, South America. See Note 1 for further information on the basis of presentation. As a result of the divestiture, prior periods disclosed herein reflect the aerospace business’ financial results as discontinued operations.

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Global Economic Environment

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Recent data has indicated that the rate of inflation is slowing in the majority of regions where we operate. That said, current and future inflationary effects may continue to be impacted by, among other things, supply chain disruptions, governmental stimulus or fiscal and monetary policies, changes in interest rates, tariffs, and changing demand for certain goods and services. We cannot predict with any certainty the impact that 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, hyperinflation in Argentina and Egypt, or the continuation or escalation of global conflicts, including the conflict between Russia and Ukraine and the instability in the Middle East and Myanmar, 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.

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Consolidated Sales and Earnings

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[[GREPCENT_TABLE]]
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[[/GREPCENT_TABLE]]

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Sales in 2024 decreased $267 million compared to 2023 primarily due to decreases of $213 million from lower sales prices and $70 million from lost volume as a result of the 2023 fire at the company’s Verona, Virginia extruded aluminum slug manufacturing facility.

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Net earnings attributable to Ball Corporation in 2024 increased $3.30 billion compared to 2023 primarily due to increases of $3.36 billion from discontinued operations, net of tax, $129 million from the results of the reportable segments discussed below, $167 million from lower interest expense and $42 million from higher interest income in corporate undistributed expenses, net, partially offset by increases in costs of $287 million from business consolidation and other activities and $82 million from incremental compensation cost from the successful sale of the aerospace business.

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When analyzing net earnings attributable to Ball Corporation as a percentage of net sales, it is important to note that net earnings attributable to Ball Corporation includes discontinued operations, net of tax resulting from the net sales attributable to the historical aerospace reportable segment through the date of the divestiture on February 16, 2024, that are now reported as discontinued operations. However, net sales attributable to the historical aerospace reportable segment are not included in the net sales figures in the table above.

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Cost of Sales (Excluding Depreciation and Amortization)

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Cost of sales, excluding depreciation and amortization, was $9,354 million in 2024 compared to $9,754 million in 2023. These amounts represented 79 percent and 81 percent of consolidated net sales for the years ended 2024 and 2023,

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respectively. The decrease year-over-year was primarily due to lower manufacturing costs, including lower aluminum costs of $281 million, and lower freight expenses of $53 million. We took actions to normalize inventory levels and reduce fixed and variable costs in 2024 and 2023.

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Depreciation and Amortization

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Depreciation and amortization expense was $611 million in 2024 compared to $605 million in 2023. These amounts represented 5 percent of consolidated net sales for the years ended 2024 and 2023. The increase compared to the same period in 2023 was primarily due to the company’s larger depreciable asset base.

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Selling, General and Administrative

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Selling, general and administrative (SG&A) was $647 million in 2024 compared to $532 million in 2023. These amounts represented 5 percent and 4 percent of consolidated net sales for the years ended 2024 and 2023, respectively. The increase was primarily due to higher compensation costs of $93 million, which included incremental cash bonuses and stock-based compensation cost from the successful sale of the aerospace business.

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Business Consolidation and Other Activities

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Business consolidation and other activities resulted in charges of $420 million in 2024 compared to charges of $133 million in 2023. These amounts represented 4 percent and 1 percent of consolidated net sales for 2024 and 2023, respectively. The amounts in 2024 primarily include a $233 million noncash charge to adjust the carrying value of the aluminum cups business to its estimated fair value less cost to sell and facility shutdown costs. The amounts in 2023 included facility shutdown costs, a foreign exchange loss associated with the company’s Argentina business and transaction costs related to the sale of the aerospace business. Further details regarding business consolidation and other activities are provided in Note 6.

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Interest Income

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Interest income was $68 million in 2024 compared to $36 million in 2023. These amounts represented less than 1 percent of consolidated net sales for the years ended 2024 and 2023. The increase in interest income was primarily due to the higher amount of cash on hand in 2024 from the sale of the aerospace business.

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Interest Expense

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Interest expense was $293 million in 2024 compared to $460 million in 2023. Interest expense as a percentage of average borrowings decreased by approximately 10 basis points from 4.9 percent in 2023 to 4.8 percent in 2024. The interest expense decrease was primarily driven by a decrease of $160 million from a smaller amount of weighted average principal outstanding during the year, resulting mainly from the use of proceeds from the aerospace disposal, and a decrease of $7 million from lower weighted average interest rates on outstanding debt during the year.

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Tax Provision

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The company’s effective tax rate is affected by recurring items such as income earned in non-U.S. jurisdictions with tax rates that differ from the U.S. tax rate and by discrete items that may occur in any given year but are not consistent from year to year.

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The 2024 effective income tax rate was 24.9 percent compared to 23.8 percent for 2023. As compared with the statutory U.S. federal income tax rate of 21 percent, the 2024 effective income tax rate was reduced by 2.1 percent for the impact of state and local taxes. This reduction was offset by an increase of 5.8 percent for currency exchange on revaluation of deferred tax balances. While these items are expected to recur, the potential magnitude of each item is uncertain.

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Further details of taxes on income are provided in Note 16 to the consolidated financial statements within Item 8 of this annual report.

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RESULTS OF BUSINESS SEGMENTS

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Segment Results

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Ball’s operations are organized and reviewed by management along its product lines and geographical areas, and its operating results are presented in the three reportable segments discussed below.

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Beverage Packaging, North and Central America

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[[GREPCENT_TABLE]]
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[[/GREPCENT_TABLE]]

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Ball permanently ceased production at its aluminum beverage can manufacturing facility in St. Paul, Minnesota in the first quarter of 2023, permanently ceased production at its aluminum beverage can manufacturing facility in Wallkill, New York in the third quarter of 2023, permanently discontinued plans to construct a beverage can plant in North Las Vegas in the third quarter of 2023 and permanently ceased production at its aluminum beverage can manufacturing facility in Kent, Washington in the first quarter of 2024.

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Segment sales in 2024 were $344 million lower compared to 2023 primarily due to decreases of $193 million from price/mix and $150 million from lower volume.

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Comparable operating earnings in 2024 were $37 million higher compared to 2023 primarily due to increases of $66 million from price/mix and $61 million from lower costs, partially offset by decreases of $51 million from lower volume and $32 million from income recognized in 2023 from the termination of a long term power supply contract that offset higher energy costs.

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Beverage Packaging, EMEA

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[[GREPCENT_TABLE]]
[["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","Years Ended December 31,","\u200b"],["($ in millions)","\u200b","2024","","2023","","2022"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Net sales","\u200b","$","3,466","\u200b","$","3,395","\u200b","$","3,854","\u200b"],["Comparable operating earnings","\u200b","\u200b","416","\u200b","\u200b","354","\u200b","\u200b","358","\u200b"],["Comparable operating earnings as a % of segment net sales","\u200b","\u200b","12","%","\u200b","10","%","\u200b","9","%"]]
[[/GREPCENT_TABLE]]

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Segment sales in 2024 were $71 million higher compared to 2023 primarily due to an increase of $104 million from higher volume, partially offset by a decrease of $21 million resulting mainly from lower aluminum prices.

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Comparable operating earnings in 2024 were $62 million higher compared to 2023 primarily due to increases of $40 million from price/mix and $44 million from higher volume, partially offset by higher costs.

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Beverage Packaging, South America

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[[GREPCENT_TABLE]]
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[[/GREPCENT_TABLE]]

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Segment sales in 2024 were $9 million lower compared to 2023 primarily due to a decrease of $22 million from price/mix partially offset by a higher volume of $13 million.

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Comparable operating earnings in 2024 were $30 million higher compared to 2023 primarily due to an increase of $12 million from price/mix and $16 million from lower costs.

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Management Performance Measures

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Management internally uses various measures to evaluate company performance such as comparable operating earnings (earnings before interest expense, taxes and business consolidation and other non-comparable items); comparable net earnings (net earnings attributable to Ball Corporation before business consolidation and other non-comparable items after tax); comparable diluted earnings per share (comparable net earnings divided by diluted weighted average shares outstanding); return on average invested capital (net operating earnings after tax over the relevant performance period divided by average invested capital over the same period); economic value added (EVA®) dollars (net operating earnings after tax less a capital charge on average invested capital employed); earnings before interest expense, taxes, depreciation and amortization (EBITDA); and diluted earnings per share. In addition, management uses operating cash flows, free cash flow (cash flows from operating activities less capital expenditures; and, it may be adjusted for additional items that affect comparability between periods) and adjusted free cash flow (free cash flow adjusted for payments made for income tax liabilities related to the aerospace disposition and other material dispositions) as measures to evaluate the company’s liquidity. We believe this information is also useful to investors as it provides insight into the earnings and cash flow criteria that management uses to make strategic decisions. These financial measures may be adjusted at times for items that affect comparability between periods, including business consolidation and other non-comparable items.

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Nonfinancial measures used in the packaging businesses include production efficiency and spoilage rates; quality control figures; environmental, health and safety statistics; production and sales volume data; asset utilization rates and measures of sustainability. References to sales volume data represent units shipped.

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Many of the above noted financial measurements are presented on a non-U.S. GAAP basis and should be considered in connection with the consolidated financial statements within Item 8 of this annual report. Non-U.S. GAAP measures should not be considered in isolation and should not be considered superior to, or a substitute for, financial measures calculated in accordance with U.S. GAAP. A presentation of earnings in accordance with U.S. GAAP is available in Item 8 of this annual report.

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CRITICAL ACCOUNTING POLICIES AND ESTIMATES

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For information regarding the company’s critical and significant accounting policies, as well as recent accounting pronouncements, see Note 1 and Note 2 to the consolidated financial statements within Item 8 of this annual report.

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The company considers certain accounting estimates to be critical, as their application is made in accordance with generally accepted accounting principles that involve a significant level of estimation uncertainty and have had, or are reasonably likely to have, a material impact on the financial condition or results of operations. Detailed below is a discussion of why, to the extent the estimate is material, these estimates are subject to uncertainty and the sensitivity of the reported amounts to the methods and assumptions underlying the estimate’s calculation.

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Defined Benefit Pension Plans

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The company has defined benefit plans which require management to make assumptions relating to the long-term rate of return on plan assets, discount rates used to determine the present value of future obligations and expenses, salary inflation rates, mortality rates and other assumptions. The company believes the accounting estimates related to its pension plans are critical accounting estimates because several of the company’s defined benefit plans have significant asset and liability balances, and because the assumptions used are highly susceptible to change from period to period based on the performance of plan assets, actuarial valuations, market conditions and contracted benefit changes. These assumptions do not change during the company’s fiscal year unless a remeasurement event occurs in one of the plans, such as a significant settlement. The assumptions used in accounting for the company’s defined benefit plans and how they have changed over time, as well as the sensitivity of the plans to changes in their related assumptions, can be found in Note 17 to the consolidated financial statements within Item 8 of this annual report.

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FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

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Cash Flows and Capital Expenditures

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Our primary sources of liquidity are cash provided by operating activities and external borrowings. We believe that cash flows from operating activities, even in the absence of operating cash flows from the historical aerospace reportable segment, and cash provided by short-term, long-term and committed revolver borrowings, when necessary, will be sufficient to meet our ongoing operating requirements, scheduled principal and interest payments on debt, dividend payments, anticipated share repurchases and anticipated capital expenditures. We have limited near-term debt maturities and our senior credit facilities are in place until 2027. The following table summarizes our cash flows:

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[[/GREPCENT_TABLE]]

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Cash flows from the historical aerospace reportable segment are presented within each cash flow statement category in the consolidated statements of cash flows. Depreciation and amortization, capital expenditures and significant operating and investing noncash items of the aerospace discontinued operation are presented in Note 4.

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Cash flows provided by operating activities were $115 million in 2024, primarily driven by earnings from continuing operations of $430 million, along with reconciling adjustments to operating cash flows of $620 million for depreciation and amortization and a $233 million noncash impairment charge on the aluminum cups business, partially offset by $766 million of income taxes paid related to the sale of the aerospace business and the company’s decision to reduce its use of factoring by $476 million. We currently estimate a total cash tax of $875 million for the sale of the aerospace business. See Note 4 for further details. In a dynamic economic environment, payment terms with our customers and vendors become a more important element of total mix of information used to negotiate our contract terms. At December 31, 2024, days sales outstanding, net of factored receivables, was 68 days; therefore, a change of one day in days sales outstanding will impact cash flows provided by (used in) operating activities by $32 million. At December 31, 2024, days payable outstanding was 130 days; therefore, a change of one day in days payable outstanding will impact cash flows provided by (used in) operating activities by $25 million. At December 31, 2024, days inventory outstanding was 58 days; therefore, a change of one day in days inventory on hand will impact cash flows provided by (used in) operating activities by $25 million.

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Cash flows provided by investing activities were $5.00 billion in 2024, primarily driven by the initial cash proceeds received at close from the sale of the aerospace business of $5.42 billion, partially offset by capital expenditures of $484 million.

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Cash flows used in financing activities were $4.79 billion in 2024, primarily driven by net repayments of long-term borrowings of $2.86 billion, repurchases of common stock of $1.71 billion and common stock dividends of $244 million. See Note 15 for further details on the company’s borrowings, and additional amounts available.

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We have entered into several regional accounts receivable factoring programs with various financial institutions for certain of our accounts receivables. The programs are accounted for as true sales of the receivables, with limited recourse to Ball, and had combined limits of approximately $1.60 billion and $2.00 billion at December 31, 2024 and 2023, respectively. A total of $428 million and $350 million were available for sale under these programs as of December 31, 2024 and 2023, respectively. The combined limit and available for sale amount as of December 31, 2023, included $160 million and $97 million, respectively, associated with receivable factoring programs included within the historical aerospace reportable segment. The company has recorded $44 million, $93 million and $64 million of expense related to its factoring programs in 2024, 2023 and 2022, respectively, and has presented these amounts in selling, general and administrative in its consolidated statements of earnings.

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The company has several regional supplier finance programs with various financial institutions that act as the paying agent for certain payables of the company. The amount of obligations outstanding that the company confirmed as valid to the financial institutions under the company's programs was $423 million and $703 million at December 31, 2024 and

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2023, respectively. Our payment terms are not dependent on whether the suppliers participate in the supplier finance programs or if the suppliers decide to factor their receivables with the financial institutions; therefore, we do not believe that future changes in the availability of supplier finance programs will have a significant impact on our liquidity.

Contributions to the company’s defined benefit pension plans were $32 million and $42 million for the years ended 2024 and 2023, respectively, inclusive of contributions in 2023 to the Salaried Employees of Ball Aerospace & Technologies Corp. Pension Plan. Contributions are expected to be approximately $32 million for the full year of 2025. This estimate may change based on changes in the Pension Protection Act, actual plan asset performance and available company cash flow, among other factors.

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As of December 31, 2024, approximately $416 million of our cash was held outside of the U.S. In the event that we would need to utilize any of the cash held outside of the U.S. for purposes within the U.S., there are no material legal or other economic restrictions regarding the repatriation of cash from any of the countries outside the U.S. where we have cash. The company believes its U.S. operating cash flows and cash on hand, as well as availability under its long-term, revolving credit facilities, uncommitted short-term credit facilities and accounts receivable factoring programs, will be sufficient to meet the cash requirements of the U.S. portion of our ongoing operations, scheduled principal and interest payments on U.S. debt, dividend payments, capital expenditures and other U.S. cash requirements. If non-U.S. funds are needed for our U.S. cash requirements and we are unable to provide the funds through intercompany financing arrangements, we may be required to repatriate funds from non-U.S. locations where the company has previously asserted indefinite reinvestment of funds outside the U.S.

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Based on its indefinite reinvestment assertion, the company has not provided deferred taxes on earnings in certain non-U.S. subsidiaries because such earnings are intended to be indefinitely reinvested in its international operations. It is not practical to estimate the additional taxes that might become payable if these earnings were remitted to the U.S.

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Share Repurchases

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The company’s share repurchases were $1.71 billion in 2024 and $3 million in 2023. The repurchases were completed using cash on hand, cash provided by operating activities, proceeds from the sale of businesses and available borrowings. The company plans to continue capital return to shareholders via an estimated $1.3 billion in share repurchases in 2025.

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On April 24, 2024, Ball’s Board of Directors approved the repurchase by the company of up to a total of 40 million shares of its common stock. This repurchase authorization replaced all previous authorizations. On January 29, 2025, the Board of Directors approved the repurchase by the company of up to a total of $4.00 billion in shares of its common stock. This repurchase authorization replaced the April 24, 2024, authorization. 

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Debt Facilities and Refinancing

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Given our cash flow projections and unused credit facilities that are available until June 2027, our liquidity is strong and is expected to meet our ongoing cash and debt service requirements. Total interest-bearing debt of $5.69 billion and $8.62 billion was outstanding at December 31, 2024 and 2023, respectively.

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On February 14, 2024, Ball announced a public tender of the $1.00 billion 5.25% senior notes due July 2025 and the $750 million 4.875% senior notes due March 2026. On March 14, 2024, $811 million of the $1.00 billion 5.25% senior notes and $494 million of the $750 million 4.875% senior notes were validly tendered and accepted. Additionally, in the first quarter of 2024, Ball repaid at maturity the outstanding 0.875% euro denominated senior notes due in the amount of $817 million and prepaid $700 million of the Term A loan outstanding balance.

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The company’s senior credit facilities include a $1.35 billion term loan and long-term, multi-currency revolving facilities that mature in June 2027, which provide the company with up to the U.S. dollar equivalent of $1.75 billion. At December 31, 2024, approximately $1.73 billion was available under the company’s long-term, multi-currency committed revolving credit facilities. In addition to these facilities, the company had $109 million of committed short-term loans outstanding and a $24 million short-term finance lease outstanding. The company also had approximately $978 million of short-term uncommitted credit facilities available at December 31, 2024, of which $37 million was outstanding and due on demand. At December 31, 2023, the company had $196 million of committed short-term loans outstanding and $13 million outstanding under short-term uncommitted credit facilities.

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While ongoing financial and economic conditions in certain areas may raise concerns about credit risk with counterparties to derivative transactions, the company mitigates its exposure by allocating the risk among various counterparties and limiting exposure to any one party. We also monitor the credit ratings of our suppliers, customers, lenders and counterparties on a regular basis.

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We were in compliance with the leverage ratio requirement at December 31, 2024, and for all prior years presented, and have met all debt payment obligations. The U.S. note agreements and bank credit agreement contain certain restrictions relating to dividend payments, share repurchases, investments, financial ratios, guarantees and the incurrence of additional indebtedness. The most restrictive of our debt covenants requires us to maintain a leverage ratio (as defined) of no greater than 5.0 times, which will change to 4.5 times as of September 30, 2025. As of December 31, 2024, the company could borrow an additional $2.35 billion under its long-term multi-currency committed revolving facilities and short-term uncommitted credit facilities. Additional details about our debt are available in Note 15 accompanying the consolidated financial statements within Item 8 of this annual report. In 2024, we entered into and designated net investment hedges against the net assets of our euro denominated operations. See Note 21 for further details.

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Aluminum Cups

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At December 31, 2024, the assets and liabilities of the aluminum cups operating segment are presented as current assets held for sale and current liabilities held for sale on the consolidated balance sheet. See Note 4 for further details.

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Saudi Arabia

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In November 2024, the company entered into an agreement to sell 41 percent of its share in Ball United Arab Can Manufacturing Company, which will trigger deconsolidation upon closing of the transaction. See Note 4 for further details.

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Defined Benefit Pension Plans

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In November 2023, the Trustee Board of the U.K. defined benefit pension plan entered into an agreement with an insurance company for a bulk annuity purchase, or “buy-in,” for its U.K. defined benefit pension plan to reduce retirement plan risk, while delivering promised benefits to plan participants. The plan was frozen on April 5, 2024. See Note 17 for further details.

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Other Liquidity Measures

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The company expects that 2025 capital expenditures for property, plant and equipment will likely be in the range of $600 million and we intend to return approximately $220 million to shareholders in the form of dividends. We further intend to utilize our operating cash flows, when available, to repurchase Ball common stock or fund acquisitions that meet our rate of return criteria.

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We have committed contracts to purchase raw materials and we align these purchase commitments with long-term sales contracts with our customers such that any commitment to purchase aluminum and other direct materials corresponds to a contractual sale. These aluminum purchase commitments include pass-through provisions which generally result in proportional changes in both sales and costs of sales; however, there may be timing differences of when the costs are passed through.

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The company’s growth and asset maintenance plans require capital expenditures over the coming years, which will be funded by operating cash flows and external borrowings. Approximately $244 million of capital expenditures were contractually committed as of December 31, 2024. Maturities for Ball’s long-term debt are disclosed in Note 15 to the consolidated financial statements within Item 8 of this annual report. Repayments of debt and other operational cash requirements will also be funded by operating cash flows and external borrowings. The company has no material off-balance sheet arrangements.

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CONTINGENCIES, INDEMNIFICATIONS AND GUARANTEES

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Details of the company’s contingencies, legal proceedings, indemnifications and guarantees are available in Note 22 and Note 23 to the consolidated financial statements within Item 8 of this annual report. The company is routinely subject to litigation incidental to operating its businesses and has been designated by various federal, state, and international environmental agencies as a potentially responsible party, along with numerous other companies, for the clean-up of several hazardous waste sites. The company believes the matters identified will not have a material adverse effect upon its liquidity, results of operations or financial condition.

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Guaranteed Securities

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The company’s senior notes are guaranteed on a full and unconditional, joint and several basis by the issuer of the company’s senior notes and the subsidiaries that guarantee the notes (the obligor group). The entities that comprise the obligor group are 100 percent owned by the company. As described in the supplemental indentures governing the company’s existing senior notes, the senior notes are guaranteed by any of the company’s domestic subsidiaries that guarantee any other indebtedness of the company.

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The following summarized financial information relates to the obligor group as of and for the years ended December 31, 2024 and 2023. Intercompany transactions, equity investments and other intercompany activity between obligor group subsidiaries have been eliminated from the summarized financial information. Investments in subsidiaries not forming part of the obligor group have also been eliminated. The results and balance sheet information of the historical aerospace reportable segment are included in the following summarized financial information of the obligor group as of and for the year ended December 31, 2023, as the guarantees of the aerospace business legal entities were in effect through that date. On February 16, 2024, the company completed the divestiture of the aerospace business. As such, the following summarized financial information of the obligor group as of and for the year ended December 31, 2024, does not include results and balance sheet information of the historical aerospace reportable segment.

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[[GREPCENT_TABLE]]
[["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","Years Ended December 31,"],["($ in millions)","\u200b","2024","","2023"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Net sales","\u200b","$","6,708","\u200b","$","8,962"],["Gross profit (a)","\u200b","\u200b","807","\u200b","\u200b","1,074"],["Net earnings","\u200b","\u200b","3,824","\u200b","\u200b","493"],["Net earnings attributable to Ball Corporation","\u200b","\u200b","3,824","\u200b","\u200b","493"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["(a)","Gross profit is shown after depreciation and amortization related to cost of sales of $189 million and $272 million for the years ended December 31, 2024 and 2023, respectively."]]
[[/GREPCENT_TABLE]]

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[[GREPCENT_TABLE]]
[["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","December 31,"],["($ in millions)","","2024","","2023"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Current assets","\u200b","$","2,144","\u200b","$","2,339"],["Noncurrent assets","\u200b","\u200b","14,698","\u200b","\u200b","15,955"],["Current liabilities","\u200b","\u200b","4,096","\u200b","\u200b","5,163"],["Noncurrent liabilities","\u200b","\u200b","8,415","\u200b","\u200b","10,857"]]
[[/GREPCENT_TABLE]]

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Included in the amounts disclosed in the tables above, at December 31, 2024 and 2023, the obligor group held receivables due from other subsidiary companies of $440 million and $768 million, respectively, long-term notes receivable due from other subsidiary companies of $10.03 billion and $10.20 billion, respectively, payables due to other subsidiary companies of $1.79 billion and $1.83 billion, respectively, and long-term notes payable due to other subsidiary companies of $2.20 billion and $2.32 billion, respectively.

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For the years ended December 31, 2024 and 2023, the obligor group recorded the following transactions with other subsidiary companies: sales to them of $1.23 billion and $1.13 billion, respectively, net credits from them of $75 million and $38 million, respectively, and net interest income from them of $336 million and $344 million, respectively. During the years ended December 31, 2024 and 2023, the obligor group received dividends from other subsidiary companies of $54 million and $814 million, respectively.

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A description of the terms and conditions of the company’s debt guarantees is located in Note 23 to the consolidated financial statements within Item 8 of this annual report.

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FORWARD-LOOKING STATEMENTS

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This report contains “forward-looking” statements concerning future events and financial performance. Words such as “expects,” “anticipates,” “estimates,” “will,” “believe,” “continue,” “goal” and similar expressions typically identify forward looking statements, which are generally any statements other than statements of historical fact. Such statements are based on current expectations or views of the future and are subject to risks and uncertainties, which could cause actual results or events to differ materially from those expressed or implied. You should therefore not place undue reliance upon any forward-looking statements, and they should be read in conjunction with, and qualified in their entirety by, the cautionary statements referenced below. Ball undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Key factors, risks and uncertainties that could cause actual outcomes and results to be different are summarized in filings with the Securities and Exchange Commission, including Exhibit 99 in Ball’s Form 10-K, which are available on Ball’s website and at www.sec.gov. Additional factors that might affect: a) Ball’s packaging segments include product capacity, supply, and demand constraints and fluctuations and changes in consumption patterns; availability/cost of raw materials, equipment, and logistics; competitive packaging, pricing and substitution; changes in climate and weather and related events such as drought, wildfires, storms, hurricanes, tornadoes and floods; footprint adjustments and other manufacturing changes, including the opening and closing of facilities and lines; failure to achieve synergies, productivity improvements or cost reductions; unfavorable mandatory deposit or packaging laws; customer and supplier consolidation; power and supply chain interruptions; changes in major customer or supplier contracts or loss of a major customer or supplier; inability to pass-through increased costs; war, political instability and sanctions, including relating to the situation in Russia and Ukraine and its impact on Ball’s supply chain and its ability to operate in Europe, the Middle East and Africa regions generally; changes in foreign exchange or tax rates; and tariffs, trade actions, or other governmental actions, including business restrictions and orders affecting goods produced by Ball or in its supply chain, including imported raw materials; and b) Ball as a whole include those listed above plus: the extent to which sustainability-related opportunities arise and can be capitalized upon; changes in senior management, succession, and the ability to attract and retain skilled labor; regulatory actions or issues including those related to tax, environmental, social and governance reporting, competition, environmental, health and workplace safety, including U.S. Federal Drug Administration and other actions or public concerns affecting products filled in Ball’s containers, or chemicals or substances used in raw materials or in the manufacturing process; technological developments and innovations; the ability to manage cyber threats; litigation; strikes; disease; pandemic; labor cost changes; inflation; rates of return on assets of Ball’s defined benefit retirement plans; pension changes; uncertainties surrounding geopolitical events and governmental policies; reduced cash flow; interest rates affecting Ball’s debt; successful or unsuccessful joint ventures, acquisitions and divestitures, and their effects on Ball’s operating results and business generally.

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