EX-20 3 ex20_f10q3qtr2004.htm SUBSIDIARY GUARANTEES OF DEBT Ball Corporation Exhibit 20 for Form 10-Q Third Quarter 2004

Exhibit 20

Subsidiary Guarantees of Debt

The company’s senior 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 October 3, 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
October 3, 2004
Ball
Corporation

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries

Eliminating
Adjustments

Consolidated
Total

ASSETS                        
Current assets  
  Cash and cash equivalents   $ 30.5   $ 0.9   $ 36.4   $ --   $ 67.8  
  Receivables, net    1.6    140.4    375.5    --    517.5  
  Inventories, net    --    380.0    197.2    --    577.2  
  Deferred taxes and prepaid expenses    277.7    174.7    15.6    (402.0 )  66.0  





    Total current assets    309.8    696.0    624.7    (402.0 )  1,228.5  





Property, plant and equipment, at cost    35.4    1,902.8    901.8    --    2,840.0  
Accumulated depreciation    (13.8 )  (1,128.8 )  (259.8 )  --    (1,402.4 )





                       21.6    774.0    642.0    --    1,437.6  





Investments in subsidiaries    2,091.2    515.7    9.8    (2,616.7 )  --  
Investments in affiliates    4.2    31.8    63.6    --    99.6  
Goodwill    --    339.3    984.6    --    1,323.9  
Intangibles and other assets, net    67.9    96.7    97.7    --    262.3  





    Total Assets   $ 2,494.7   $ 2,453.5   $ 2,422.4   $ (3,018.7 ) $ 4,351.9  





LIABILITIES AND SHAREHOLDERS'
    EQUITY
  
Current liabilities  
  Short-term debt and current portion   $ 1.8   $ 6.4   $ 115.8   $ --   $ 124.0  
    of long-term debt  
  Accounts payable    (13.3 )  292.8    189.3    --    468.8  
  Accrued employee costs    20.0    137.4    34.2    --    191.6  
  Income taxes payable    --    449.4    64.2    (402.0 )  111.6  
  Other current liabilities    34.0    24.1    62.9    --    121.0  





    Total current liabilities    42.5    910.1    466.4    (402.0 )  1,017.0  
  Long-term debt    1,055.1    22.7    421.6    --    1,499.4  
  Intercompany borrowings    287.3    218.3    193.3    (698.9 )  --  
  Employee benefit obligations    136.9    152.9    422.7    --    712.5  
  Deferred taxes and other liabilities    (21.2 )  34.2    109.7    --    122.7  





    Total liabilities    1,500.6    1,338.2    1,613.7    (1,100.9 )  3,351.6  





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    587.4    726.1    681.1    (1,407.2 )  587.4  
  Retained earnings (deficit)    960.3    507.9    (147.3 )  (360.6 )  960.3  
  Accumulated other comprehensive
      earnings (loss)
    1.7    (118.7 )  89.1    29.6    1.7  
  Treasury stock, at cost    (555.3 )  --    --    --    (555.3 )





    Common shareholders' equity    994.1    1,115.3    622.9    (1,738.2 )  994.1  





       Total shareholders' equity    994.1    1,115.3    802.5    (1,917.8 )  994.1  





    Total Liabilities and Shareholders'  
       Equity   $ 2,494.7   $ 2,453.5   $ 2,422.4   $ (3,018.7 ) $ 4,351.9  






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  





Investments in subsidiaries    1,855.8    511.2    8.5    (2,375.5 )  --  
Investments in affiliates    4.3    28.6    59.9    --    92.8  
Goodwill    --    339.7    997.2    --    1,336.9  
Intangibles and other assets, net    37.9    104.1    103.3    --    245.3  





    Total Assets   $ 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
      earnings (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  





    Total Liabilities and Shareholders'  
       Equity   $ 1,906.3   $ 2,689.9   $ 2,199.1   $ (2,725.7 ) $ 4,069.6  






CONSOLIDATED STATEMENT OF EARNINGS
For the Three Months Ended October 3, 2004
Ball
Corporation

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries

Eliminating
Adjustments

Consolidated
Total

Net sales     $ --   $ 1,144.4   $ 419.2   $ (84.9 ) $ 1,478.7  
Costs and expenses  
  Cost of sales (excluding  
    depreciation and amortization)    --    966.4    314.9    (84.9 )  1,196.4  
  Depreciation and amortization    0.5    33.2    23.0    --    56.7  
  Business consolidation gains    --    (0.7 )  (6.0 )  --    (6.7 )
  Selling and administrative    10.2    39.0    13.8    --    63.0  
  Interest expense    0.8    14.7    10.2    --    25.7  
  Equity in results of subsidiaries    (101.1 )  --    --    101.1    --  
  Corporate allocations    (17.9 )  16.1    1.8    --    --  





                       (107.5 )  1,068.7    357.7    16.2    1,335.1  





Earnings (loss) before taxes    107.5    75.7    61.5    (101.1 )  143.6  
Tax provision    (5.8 )  (27.6 )  (12.9 )  --    (46.3 )
Minority interests    --    --    (0.3 )  --    (0.3 )
Equity in results of affiliates    --    1.4    3.3    --    4.7  





Net earnings (loss)   $ 101.7   $ 49.5   $ 51.6   $ (101.1 ) $ 101.7  






CONSOLIDATED STATEMENT OF EARNINGS
For the Three Months Ended September 28, 2003
Ball
Corporation

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries

Eliminating
Adjustments

Consolidated
Total

Net sales     $ --   $ 1,032.9   $ 414.2   $ (87.8)  $1,359.3  
Costs and expenses  
  Cost of sales (excluding  
    depreciation and amortization)    --    879.9    312.9    (87.8 )  1,105.0  
  Depreciation and amortization    0.7    32.7    16.5    --    49.9  
  Business consolidation gains    --    (0.2 )  (3.3 )  --    (3.5 )
  Selling and administrative    8.9    34.9    20.8    --    64.6  
  Interest expense    29.1    6.4    10.6    --    46.1  
  Equity in results of subsidiaries    (82.6 )  --    --    82.6    --  
  Corporate allocations    (17.3 )  15.9    1.4    --    --  





                       (61.2 )  969.6    358.9    (5.2 )  1,262.1  





Earnings (loss) before taxes    61.2    63.3    55.3    (82.6 )  97.2  
Tax provision    7.6    (23.4 )  (13.3 )  --    (29.1 )
Minority interests    --    --    (0.2 )  --    (0.2 )
Equity in results of affiliates    --    0.3    0.6    --    0.9  





Net earnings (loss)   $ 68.8   $ 40.2   $ 42.4   $ (82.6 ) 68.8  






CONSOLIDATED STATEMENT OF EARNINGS
For the Nine Months Ended October 3, 2004
Ball
Corporation

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries

Eliminating
Adjustments

Consolidated
Total

Net sales     $ --   $ 3,207.7   $ 1,171.7   $ (202.0 ) $ 4,177.4  
Costs and expenses  
  Cost of sales (excluding  
    depreciation and amortization)    --    2,715.0    889.4    (202.0 )  3,402.4  
  Depreciation and amortization    1.8    98.8    62.1    --    162.7  
  Business consolidation gains    --    (0.7 )  (6.0 )  --    (6.7 )
  Selling and administrative    30.7    114.9    56.2    --    201.8  
  Interest expense    6.9    40.8    31.3    --    79.0  
  Equity in results of subsidiaries    (236.4 )  --    --    236.4    --  
  Corporate allocations    (49.6 )  44.3    5.3    --    --  





                       (246.6 )  3,013.1    1,038.3    34.4    3,839.2  





Earnings (loss) before taxes    246.6    194.6    133.4    (236.4 )  338.2  
Tax provision    (7.4 )  (71.4 )  (29.8 )  --    (108.6 )
Minority interests    --    --    (0.8 )  --    (0.8 )
Equity in results of affiliates    --    3.1    7.3    --    10.4  





Net earnings (loss)   $ 239.2   $ 126.3   $ 110.1   $ (236.4 ) $ 239.2  






CONSOLIDATED STATEMENT OF EARNINGS
For the Nine Months Ended September 28, 2003
Ball
Corporation

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries

Eliminating
Adjustments

Consolidated
Total

Net sales     $ --   $ 2,907.4   $ 1,076.5   $ (200.4 ) $ 3,783.5  
Costs and expenses  
  Cost of sales (excluding depreciation  
    and amortization)    --    2,470.2    824.3    (200.4 )  3,094.1  
  Depreciation and amortization    1.8    97.3    52.2    --    151.3  
  Business consolidation costs (gains)    --    1.7    (3.8 )  --    (2.1 )
  Selling and administrative    22.2    98.5    61.1    --    181.8  
  Interest expense    49.4    27.6    34.5    --    111.5  
  Equity in net results of subsidiaries    (190.6 )  --    --    190.6    --  
  Corporate allocations    (45.8 )  41.4    4.4    --    --  





                       (163.0 )  2,736.7    972.7    (9.8 )  3,536.6  





Earnings (loss) before taxes    163.0    170.7    103.8    (190.6 )  246.9  
Provision for taxes    11.6    (63.0 )  (26.9 )  --    (78.3 )
Minority interests    --    --    (0.7 )  --    (0.7 )
Equity in net results of affiliates    --    1.0    5.7    --    6.7  





Net earnings (loss)   $ 174.6   $ 108.7   $ 81.9   $ (190.6 ) $ 174.6  






CONSOLIDATED STATEMENT OF CASH FLOWS
For the Nine Months Ended October 3, 2004
Ball
Corporation

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries

Eliminating
Adjustments

Consolidated
Total

Cash flows from operating activities                        
  Net earnings (loss)   $ 239.2   $ 126.3   $ 110.1   $ (236. 4) $ 239.2  
  Adjustments to reconcile net earnings  
    to net cash provided by (used in)  
    operating activities:  
    Depreciation and amortization    1.8    98.8    62.1    --    162.7  
    Deferred taxes    15.8    14.7    (0.6 )  --    29.9  
    Equity in results of subsidiaries    (236.4 )  --    --    236.4    --  
    Other, net    9.6    (26.1 )  (13.8 )  --    (30.3 )
  Changes in working capital  
    components, excluding effects of acquisitions    (65.9 )  161.3    (205.1 )  --    (109.7 )





       Net cash provided by (used in)  
         operating activities    (35.9 )  375.0    (47.3 )  --    291.8  





Cash flows from investing activities  
  Additions to property, plant and equipment    (3.7 )  (60.9 )  (35.3 )  --    (99.9 )
  Business acquisition, net of cash acquired    --    (30.0 )  --    --    (30.0 )
  Investments in and advances to affiliates    143.7    (299.8 )  156.1    --    --  
  Other, net    (9.7 )  3.7    5.0    --    (1.0 )





       Net cash provided by (used in)  
         investing activities    130.3    (387.0 )  125.8    --    (130.9 )





Cash flows from financing activities  
  Long-term borrowings    --    13.0    (0.2 )  --    12.8  
  Repayments of long-term borrowings    (1.4 )  (1.0 )  (83.9 )  --    (86.3 )
  Change in short-term borrowings    --    --    15.1    --    15.1  
  Proceeds from issuance of common  
    stock under various employee and  
    shareholder plans    24.3    --    --    --    24.3  
  Acquisitions of treasury stock    (67.8 )  --    --    --    (67.8 )
  Common dividends    (27.8 )  --    --    --    (27.8 )
  Other, net    --    --    (0.4 )  --    (0.4 )





       Net cash provided by (used in)  
         financing activities    (72.7 )  12.0    (69.4 )  --    (130.1 )





Effect of exchange rate changes on cash    --    --    0.5    --    0.5  
Net Change in Cash and Cash Equivalents    21.7    --    9.6    --    31.3  
Cash and Cash Equivalents -  
  Beginning of Period    8.8    0.9    26.8    --    36.5  





Cash and Cash Equivalents -  
  End of Period   $ 30.5   $ 0.9   $ 36.4   $ --   $ 67.8  






CONSOLIDATED STATEMENT OF CASH FLOWS
For the Nine Months Ended September 28, 2003
Ball
Corporation

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries

Eliminating
Adjustments

Consolidated
Total

Cash flows from operating activities                        
  Net earnings (loss)   $ 174.6   $ 108.7   $ 81.9   $ (190. 6) $ 174.6  
  Adjustments to reconcile net earnings  
    to net cash provided by (used in)  
    operating activities:  
    Depreciation and amortization    1.8    97.3    52.2    --    151.3  
    Deferred taxes    11.7    23.2    0.8    --    35.7  
    Equity in results of subsidiaries    (190.6 )  --    --    190.6    --  
    Other, net    5.6    (12.1 )  4.8    --    (1.7 )
  Debt refinancing costs:  
    Debt prepayment costs    10.3    --    --    --    10.3  
    Noncash write off of unamortized  
       deferred financing costs    4.9    --    --    --    4.9  
  Withholding tax payment related to  
    European acquisition    --    --    (138.3 )  --    (138.3 )
  Changes in working capital  
    components, excluding effects of acquisitions    (30.0 )  31.9    (200.5 )  --    (198.6 )





       Net cash provided by (used in)  
         operating activities    (11.7 )  249.0    (199.1 )  --    38.2  





Cash flows from investing activities  
  Additions to property, plant and equipment    (4.6 )  (82.2 )  (11.7 )  --    (98.5 )
  Business acquisition    --    (28.0 )  --    --    (28.0 )
  Ball Packaging Europe purchase price  
    adjustments    --    --    31.1    --    31.1  
  Investments in and advances to affiliates    107.4    (136.3 )  28.9    --    --  
  Other, net    (9.7 )  0.3    2.3    --    (7.1 )





       Net cash provided by (used in)  
         investing activities    93.1    (246.2 )  50.6    --    (102.5 )





Cash flows from financing activities  
  Repayments of long-term borrowings    (53.0 )  --    (44.2 )  --    (97.2 )
  Change in short-term borrowings    --    --    19.1    --    19.1  
  Debt prepayment costs    (10.3 )  --    --    --    (10.3 )
  Proceeds from issuance of common  
    stock under various employee and  
    shareholder plans    25.5    --    --    --    25.5  
  Acquisitions of treasury stock    (56.4 )  --    --    --    (56.4 )
  Common dividends    (18.4 )  --    --    --    (18.4 )
  Other, net    0.3    --    0.5    --    0.8  





       Net cash used in financing activities    (112.3 )  --    (24.6 )  --    (136.9 )





Effect of exchange rate changes on cash    --    --    0.4    --    0.4  
  Net Change in Cash and Cash Equivalents    (30.9 )  2.8    (172.7 )  --    (200.8 )
Cash and Cash Equivalents -  
  Beginning of Period    47.6    0.3    211.3    --    259.2  





  Cash and Cash Equivalents - End of Period   $ 16.7   $ 3.1   $ 38.6   $ --   $ 58.4