BALL Corp Income Taxes Disclosure

16. Taxes on Income

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The amount of earnings before income taxes is:

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The provision (benefit) for income tax expense is:

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The following table is a reconciliation of the U.S. federal statutory rate of 21 percent to the company’s effective tax rate for the year ended December 31, 2025 in accordance with the guidance of the new income tax disclosures:

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The income tax provision recorded within the consolidated statements of earnings differs from the provision determined by applying the U.S. statutory tax rate to pretax earnings as a result of the following presented in accordance with the guidance prior to the adoption of the new income tax disclosures:

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The company generally intends to limit distributions from non-U.S. subsidiaries to earnings previously taxed in the U.S. The company has accrued approximately $79 million and $53 million for 2025 and 2024, respectively, for estimated non-U.S. withholding taxes on portions of the non-U.S. earnings that are not indefinitely reinvested. The company has not provided deferred taxes on any other outside basis differences in its investments in other non-U.S. subsidiaries as these other outside basis differences are indefinitely reinvested. A determination of the unrecognized deferred taxes related to any of these other outside basis differences is not practicable.

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The following disclosure related to the undistributed earnings in non-U.S. subsidiaries is in accordance with guidance prior to the adoption of the new tax disclosures. As of December 31, 2024, the company has $2.64 billion of adjusted retained earnings in non-U.S. subsidiaries. Of these undistributed earnings, $933 million were previously subjected to U.S. federal income tax.

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Several of Ball’s Brazilian subsidiaries benefit from various tax holidays with expiration dates ranging from 2026 to 2033. The company regularly applies for and has historically been granted, similar tax holidays upon expiration. These tax holidays reduced income tax by $37 million or $0.13 per share, $37 million or $0.12 per share and $71 million or $0.22 per share for 2025, 2024 and 2023, respectively. Benefits from tax holidays in Ball’s other subsidiaries were immaterial in 2025, 2024 and 2023.

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The following table of income taxes paid, net of refunds received, for the year ended December 31, 2025, is in accordance with the guidance of the new income tax disclosures:

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The Federal amount paid in 2025 represents purchases of transferable tax credits.

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The following disclosure was prepared in accordance with the guidance prior to the adoption of the new income tax disclosures. Income tax payments, net of refunds received and inclusive of payments related to the historical aerospace business, were $922 million and $179 million in 2024 and 2023, respectively.

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

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

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At December 31, 2025, Ball has recorded deferred tax assets related to net operating and capital loss carryforwards of $279 million, deferred interest expense carryforwards of $153 million, and credit carryforwards for foreign taxes and various other business credits of $84 million. These attributes are spread across the regions in which the company operates, including Europe, North and Central America, Asia and South America. The majority of the attributes with expiration dates consists of $23 million of foreign tax credits which expire beginning 2027 through 2035. This has been assessed for realization as of December 31, 2025.

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Ball’s 2025 effective tax rate was impacted by $5 million of the net change in the valuation allowance. The company’s overall valuation allowances increased by a net $32 million. The increase was primarily due to year-over-year currency exchange rate fluctuations in Europe and Brazil. These increases were partially offset by utilization of carryforward losses and nondeductible interest in U.K. entities.

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

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

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

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At December 31, 2025, the amounts of unrecognized tax benefits that, if recognized, would reduce tax expense were $26 million, inclusive of interest, penalties and the indirect benefits of related items. The company and its subsidiaries file income tax returns in the U.S. federal, various state, local and non-U.S. jurisdictions. The U.S. federal statute of limitations is closed for years prior to 2022. With a few exceptions, the company is no longer subject to examination by state and local tax authorities for years prior to 2022. The company’s significant non-U.S. filings are in Argentina, Austria, Brazil, Canada, Chile, the Czech Republic, Egypt, France, Germany, Italy, Mexico, the Netherlands, Paraguay, Poland, Serbia, Spain, Sweden, Switzerland, Turkey and the U.K. The company’s non-U.S. statutes of limitations are generally open for years after 2020. At December 31, 2025, the company is either under examination or has been notified of a pending examination by tax authorities in Argentina, Brazil, Chile, the Czech Republic, Egypt, France, Germany, India, Paraguay, Spain, the U.K., the U.S. and various U.S. states.