EX-20 4 ex20-1_f10q1qtr2004.htm SUBSIDIARY GUARANTEES OF DEBT Exhibit 20.1 for Ball Corporation's 1st Qtr 2004 10-Q

Exhibit 20.1

Subsidiary Guarantees of Debt

The company’s Senior Notes, Senior Subordinated Notes and senior credit facilities are guaranteed on a full, unconditional and joint and several basis by certain of the company’s wholly owned domestic subsidiaries. The following is condensed, consolidating financial information for the company, segregating the guarantor subsidiaries and non-guarantor subsidiaries, as of April 4, 2004, and December 31, 2003 (in millions of dollars). The presentation of certain prior-year amounts has been changed in order to conform to the current-year presentation. Separate financial statements for the guarantor subsidiaries and the non-guarantor subsidiaries are not presented because management has determined that such financial statements would not be material to investors.

CONSOLIDATED BALANCE SHEET
April 4, 2004
Ball
Corporation
 Guarantor
Subsidiaries
 Non-Guarantor
Subsidiaries
 Eliminating
Adjustments
 Consolidated
Total
ASSETS            
Current assets 
  Cash and cash equivalents  $      11.4   $        2.4   $      27.4   $       --   $      41.2  
  Receivables, net  0.9   101.9   270.0   --   372.8  
  Inventories, net  --   439.2   206.3   --   645.5  
  Deferred taxes and prepaid expenses  250.4   181.6   16.7   (359.3 ) 89.4  
    Total current assets  262.7   725.1   520.4   (359.3 ) 1,148.9  
Property, plant and equipment, at cost  34.1   1,866.7   863.9   --   2,764.7  
Accumulated depreciation  (13.7 ) (1,067.9 ) (216.2 ) --   (1,297.8 )
   20.4   798.8   647.7   --   1,466.9  
Investments in subsidiaries  1,865.5   516.8   9.8   (2,392.1 ) --  
Investments in affiliates  4.2   28.9   57.9   --   91.0  
Goodwill, net  --   338.0   962.9   --   1,300.9  
Intangibles and other assets, net  51.8   96.2   97.4   --   245.4  
    Total Assets  $ 2,204.6   $ 2,503.8   $ 2,296.1   $ (2,751. 4) $ 4,253.1  
LIABILITIES AND SHAREHOLDERS' EQUITY 
Current liabilities 
  Short-term debt and current portion 
    of long-term debt  $      51.9   $        6.4   $    150.5   $       --   $    208.8  
  Accounts payable  (31.9 ) 246.3   186.4   --   400.8  
  Accrued employee costs  17.1   80.5   24.6   --   122.2  
  Income taxes payable  --   397.5   45.6   (359.3 ) 83.8  
  Other current liabilities  44.5   38.2   73.8   --   156.5  
    Total current liabilities  81.6   768.9   480.9   (359.3 ) 972.1  
  Long-term debt  1,164.4   22.7   445.3   --   1,632.4  
  Intercompany borrowings  42.7   483.8   172.4   (698.9 ) --  
  Employee benefit obligations  116.5   167.4   416.9   --   700.8  
  Deferred taxes and other liabilities  (23.5 ) 31.8   110.3   --   118.6  
    Total liabilities  1,381.7   1,474.6   1,625.8   (1,058.2 ) 3,423.9  
Contingencies  --   --   --   --   --  
Minority interests  --   --   6.3   --   6.3  
Shareholders' equity: 
  Convertible preferred stock  --   --   179.6   (179.6 ) --  
    Preferred shareholders' equity  --   --   179.6   (179.6 ) --  
  Common stock  576.7   726.0   681.1   (1,407.1 ) 576.7  
  Retained earnings (deficit)  787.3   415.0   (241.9 ) (173.1 ) 787.3  
  Accumulated other comprehensive loss  (16.5 ) (111.8 ) 45.2   66.6   (16.5 )
  Treasury stock, at cost  (524.6 ) --   --   --   (524.6 )
    Common shareholders' equity  822.9   1,029.2   484.4   (1,513.6 ) 822.9  
       Total shareholders' equity  822.9   1,029.2   664.0   (1,693.2 ) 822.9  
    Total Liabilities and Shareholders' 
       Equity  $ 2,204.6   $ 2,503.8   $ 2,296.1   $ (2,751. 4) $ 4,253.1  
CONSOLIDATED BALANCE SHEET
December 31, 2003
Ball
Corporation
 Guarantor
Subsidiaries
 Non-Guarantor
Subsidiaries
 Eliminating
Adjustments
 Consolidated
Total
ASSETS            
Current assets 
  Cash and cash equivalents  $       8.8   $       0.9   $     26.8   $         --   $     36.5  
  Accounts receivable, net  1.2   107.4   141.5   --   250.1  
  Inventories, net  --   363.7   182.5   --   546.2  
  Deferred taxes and 
    prepaid expenses  (22.2 ) 446.2   16.9   (350.2 ) 90.7  
    Total current assets  (12.2 ) 918.2   367.7   (350.2 ) 923.5  
Property, plant and equipment, at cost  36.5   1,836.5   863.9   --   2,736.9  
Accumulated depreciation  (16.0 ) (1,048.4 ) (201.4 ) --   (1,265.8 )
   20.5   788.1   662.5   --   1,471.1  
Investment in subsidiaries  1,855.8   511.2   8.5   (2,375.5 ) --  
Investment in affiliates  4.3   28.6   59.9   --   92.8  
Goodwill, net  --   339.7   997.2   --   1,336.9  
Other assets  37.9   104.1   103.3   --   245.3  
   $1,906.3   $2,689.9   $2,199.1   $(2,725.7 ) $4,069.6  
LIABILITIES AND SHAREHOLDERS' EQUITY 
Current liabilities 
  Short-term debt and current portion 
    of long-term debt  $       1.9   $       4.5   $   101.2   $         --   $   107.6  
  Accounts payable  11.1   178.0   160.6   --   349.7  
  Accrued employee costs  15.7   134.5   30.4   --   180.6  
  Income taxes payable  --   379.9   45.3   (350.2 ) 75.0  
  Other current liabilities  44.4   26.6   77.2   --   148.2  
    Total current liabilities  73.1   723.5   414.7   (350.2 ) 861.1  
Long-term debt  1,056.9   11.5   510.9   --   1,579.3  
Intercompany borrowings  147.7   515.0   36.2   (698.9 ) --  
Employee benefit obligations  120.6   152.3   428.8   --   701.7  
Deferred taxes and other liabilities  (299.8 ) 298.3   115.0   --   113.5  
    Total liabilities  1,098.5   1,700.6   1,505.6   (1,049.1 ) 3,255.6  
Contingencies 
Minority interests  --   --   6.2   --   6.2  
Shareholders' equity 
  Convertible preferred stock  --   --   179.6   (179.6 ) --  
    Preferred shareholders' equity  --   --   179.6   (179.6 ) --  
  Common stock  567.3   726.0   687.6   (1,413.6 ) 567.3  
  Retained earnings (deficit)  748.8   380.4   (263.8 ) (116.6 ) 748.8  
  Accumulated other comprehensive loss 
   (1.4 ) (117.1 ) 83.9   33.2   (1.4 )
  Treasury stock, at cost  (506.9 ) --   --   --   (506.9 )
    Common shareholders' equity  807.8   989.3   507.7   (1,497.0 ) 807.8  
       Total shareholders' equity  807.8   989.3   687.3   (1,676.6 ) 807.8  
   $1,906.3   $2,689.9   $2,199.1   $(2,725.7 ) $4,069.6  
CONSOLIDATED STATEMENT OF EARNINGS
For the Three Months Ended April 4, 2004
Ball
Corporation
 Guarantor
Subsidiaries
 Non-Guarantor
Subsidiaries
 Eliminating
Adjustments
 Consolidated
Total
Net sales     $ --   $ 947.7   $ 338.6   $ (54.8 ) $1,231.5  
Costs and expenses  
  Cost of sales (excluding depreciation  
    and amortization)    --    805.9    261.4    (54.8 )  1,012.5  
  Depreciation and amortization    0.5    33.2    20.1    --    53.8  
  Selling and administrative    10.2    34.4    26.5    --    71.1  
  Interest expense    3.4    13.2    11.7    --    28.3  
  Equity in results of subsidiaries    (46.3 )  --    --    46.3    --  
  Corporate allocations    (15.7 )  14.0    1.7    --    --  
                       (47.9 )  900.7    321.4    (8.5 )  1,165.7  
Earnings (loss) before taxes    47.9    47.0    17.2    (46.3 )  65.8  
Tax provision    (1.1 )  (16.9 )  (3.5 )  --    (21.5 )
Minority interests    --    --    (0.3 )  --    (0.3 )
Equity in results of affiliates    --    0.7    2.1    --    2.8  
Net earnings (loss)   $ 46.8   $ 30.8   $ 15.5   $ (46.3 ) $46.8  


CONSOLIDATED STATEMENT OF EARNINGS
For the Three Months Ended March 30, 2003
Ball
Corporation
 Guarantor
Subsidiaries
 Non-Guarantor
Subsidiaries
 Eliminating
Adjustments
 Consolidated
Total
Net sales     $ --   $ 842.3   $ 274.8   $ (46.2 ) $1,070.9  
Costs and expenses  
  Cost of sales (excluding depreciation  
    and amortization)    --    710.7    221.5    (46.2 )  886.0  
  Depreciation and amortization    0.6    31.8    17.5    --    49.9  
  Business consolidation costs    --    1.9    (0.5 )  --    1.4  
  Selling and administrative    9.4    30.0    17.3    --    56.7  
  Interest expense    13.7    6.3    12.0    --    32.0  
  Equity in results of subsidiaries    (37.6 )  --    --    37.6    --  
  Corporate allocations    (14.4 )  12.9    1.5    --    --  
                       (28.3 )  793.6    269.3    (8.6 )  1,026.0  
Earnings (loss) before taxes    28.3    48.7    5.5    (37.6 )  44.9  
Tax provision    3.2    (17.7 )  (1.2 )  --    (15.7 )
Minority interests    --    --    (0.3 )  --    (0.3 )
Equity in results of affiliates    --    0.3    2.3    --    2.6  
Net earnings (loss)   $ 31.5   $ 31.3   $ 6.3   $ (37.6 ) $31.5  
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Three Months Ended April 4, 2004
Ball
Corporation
 Guarantor
Subsidiaries
 Non-Guarantor
Subsidiaries
 Eliminating
Adjustments
 Consolidated
Total
Cash flows from operating activities            
  Net earnings (loss)  $   46.8   $ 30.8   $   15.5   $(46.3 ) $   46.8  
  Adjustments to reconcile net earnings 
    to net cash provided by (used in) 
    operating activities: 
    Depreciation and amortization  0.5   33.2   20.1   --   53.8  
    Deferred taxes  6.1   0.6   1.6   --   8.3  
    Equity in results of subsidiaries  (46.3 ) --   --   46.3   --  
    Other  8.0   0.8   3.0   --   11.1  
  Changes in working capital 
    components, excluding effects of  (52.9 ) 6.1   (143.3 ) --   (189.4 )
    acquisitions 
       Net cash provided by (used in) 
         operating activities  (37.8 ) 71.5   (103.1 ) --   (69.4 )
Cash flows from investing activities 
  Additions to property, plant and 
    equipment  (1.0 ) (20.1 ) (13.8 ) --   (34.9 )
  Business acquisition, net of cash acquired  --   (30.0 ) --   --   (30.0 )
  Investments in and advances to 
    affiliates, net of dividends  (85.3 ) (35.2 ) 120.5   --   --  
  Other  (8.7 ) 3.1   (0.2 ) --   (5.8 )
       Net cash provided by (used in) 
         investing activities  (95.0 ) (82.2 ) 106.5   --   (70.7 )
Cash flows from financing activities 
  Long-term borrowings  108.4   13.0   --   --   121.4  
  Repayments of long-term borrowings  --   (0.8 ) (54.4 ) --   (55.2 )
  Change in short-term borrowings  50.0   --   52.1   --   102.1  
  Proceeds from issuance of common 
    stock under various employee and 
    shareholder plans  7.7   --   --   --   7.7  
  Acquisitions of treasury stock  (22.3 ) --   --   --   (22.3 )
  Common dividends  (8.4 ) --   --   --   (8.4 )
  Other  --   --   (0.4 ) --   (0.4 )
       Net cash provided by (used in) 
         financing activities  135.4   12.2   (2.7 ) --   144.9  
Effect of exchange rate changes on cash  --   --   (0.1 ) --   (0.1 )
Net Change in Cash and Cash 
  Equivalents  2.6   1.5   0.6   --   4.7  
Cash and Cash Equivalents - 
  Beginning of Period  8.8   0.9   26.8   --   36.5  
Cash and Cash Equivalents - 
  End of Period  $   11.4   $   2.4   $   27.4   $     --   $   41.2  
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Three Months Ended March 30, 2003
Ball
Corporation
 Guarantor
Subsidiaries
 Non-Guarantor
Subsidiaries
 Eliminating
Adjustments
 Consolidated
Total
Cash flows from operating activities                        
  Net earnings (loss)   $ 31.5   $ 31.3   $ 6.3   $ (37.6 ) $ 31.5  
  Adjustments to reconcile net earnings to
        net cash used in operating activities:		 
    Depreciation and amortization    0.6    31.8    17.5    --    49.9  
    Deferred taxes    5.4    1.7    (1.3 )  --    5.8  
    Equity in results of subsidiaries    (37.6 )  --    --    37.6    --  
    Other    1.9    (3.0 )  (1.3 )  --    (2.4 )
  Withholding tax payment related to  
    European acquisition    --    --    (138.3 )  --    (138.3 )
  Other changes in working capital  
    components, excluding effects of    (9.3 )  (175.4 )  (66.3 )  --    (251.0  
    acquisitions  
       Net cash used in operating    (7.5 )  (113.6 )  (183.4 )  --    (304.5 )
         activities  
Cash flows from investing activities  
  Additions to property, plant and  
    equipment    (0.4 )  (26.5 )  (3.4 )  --    (30.3 )
  Business acquisition, net of cash acquired    --    (28.0 )  --    --    (28.0 )
  Investments in and advances to  
    affiliates, net of dividends    (73.3 )  168.4    (95.1 )  --    --  
  Other    (7.7 )  0.8    1.3    --    (5.6 )
       Net cash provided by (used in)  
         investing activities    (81.4 )  114.7    (97.2 )  --    (63.9 )
Cash flows from financing activities  
  Long-term borrowings    44.7    --    116.0    --    160.7  
  Repayments of long-term borrowings    --    --    (16.3 )  --    (16.3 )
  Change in short-term borrowings    6.0    --    11.7    --    17.7  
  Proceeds from issuance of common  
    stock under various employee and  
    shareholder plans    13.5    --    --    --    13.5  
  Acquisitions of treasury stock    (7.3 )  --    --    --    (7.3 )
  Common dividends    (4.9 )  --    --    --    (4.9 )
  Other    (2.8 )  --    1.6    --    (1.2 )
       Net cash provided by financing  
         activities    49.2    --    113.0    --    162.2  
Effect of exchange rate changes on cash    --    --    1.1    --    1.1  
Net Change in Cash and Cash  
  Equivalents    (39.7 )  1.1    (166.5 )  --    (205.1 )
Cash and Cash Equivalents -  
  Beginning of Period    47.6    0.3    211.3    --    259.2  
Cash and Cash Equivalents -  
  End of Period   $ 7.9   $ 1.4   $ 44.8   $ --   $ 54.1