State of Indiana
|
35-0160610
|
Large accelerated filer x
|
Accelerated filer o
|
Non-accelerated filer o
|
Smaller reporting company o
|
Class
|
Outstanding at May 1, 2011
|
|||
Common Stock,
without par value
|
167,964,470 shares
|
Page Number
|
||
PART I.
|
FINANCIAL INFORMATION:
|
|
Item 1.
|
Financial Statements
|
|
Unaudited Condensed Consolidated Statements of Earnings for the Three Months Ended April 3, 2011, and March 28, 2010
|
1
|
|
Unaudited Condensed Consolidated Balance Sheets at April 3, 2011, and December 31, 2010
|
2
|
|
Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended April 3, 2011, and March 28, 2010
|
3
|
|
Notes to Unaudited Condensed Consolidated Financial Statements
|
4
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
25
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
33
|
Item 4.
|
Controls and Procedures
|
33
|
PART II.
|
OTHER INFORMATION
|
35
|
PART I.
|
FINANCIAL INFORMATION
|
Item 1.
|
FINANCIAL STATEMENTS
|
Three Months Ended
|
||||||||
($ in millions, except per share amounts)
|
April 3, 2011
|
March 28, 2010
|
||||||
Net sales
|
$ | 2,011.2 | $ | 1,592.3 | ||||
Costs and expenses
|
||||||||
Cost of sales (excluding depreciation)
|
(1,630.7 | ) | (1,318.2 | ) | ||||
Depreciation and amortization
|
(73.6 | ) | (62.7 | ) | ||||
Selling, general and administrative
|
(99.4 | ) | (79.3 | ) | ||||
Business consolidation and other activities
|
(13.5 | ) | 0.5 | |||||
(1,817.2 | ) | (1,459.7 | ) | |||||
Earnings before interest and taxes
|
194.0 | 132.6 | ||||||
Interest expense
|
(46.5 | ) | (33.9 | ) | ||||
Earnings before taxes
|
147.5 | 98.7 | ||||||
Tax provision
|
(48.0 | ) | (20.9 | ) | ||||
Equity in results of affiliates, net of tax
|
− | 4.7 | ||||||
Net earnings from continuing operations
|
99.5 | 82.5 | ||||||
Discontinued operations, net of tax
|
(1.3 | ) | (3.1 | ) | ||||
Net earnings
|
98.2 | 79.4 | ||||||
Less net earnings attributable to noncontrolling interests
|
(6.9 | ) | (0.1 | ) | ||||
Net earnings attributable to Ball Corporation
|
$ | 91.3 | $ | 79.3 | ||||
Amounts attributable to Ball Corporation:
|
||||||||
Continuing operations
|
$ | 92.6 | $ | 82.4 | ||||
Discontinued operations
|
(1.3 | ) | (3.1 | ) | ||||
Net earnings
|
$ | 91.3 | $ | 79.3 | ||||
Earnings per share (a):
|
||||||||
Basic – continuing operations
|
$ | 0.55 | $ | 0.44 | ||||
Basic – discontinued operations
|
(0.01 | ) | (0.02 | ) | ||||
Total basic earnings per share
|
$ | 0.54 | $ | 0.42 | ||||
Diluted – continuing operations
|
$ | 0.54 | $ | 0.44 | ||||
Diluted – discontinued operations
|
(0.01 | ) | (0.02 | ) | ||||
Total diluted earnings per share
|
$ | 0.53 | $ | 0.42 |
(a)
|
Earnings per share amounts in 2010 have been retrospectively adjusted for the two-for-one stock split that was effective on February 15, 2011.
|
April 3,
|
December 31,
|
|||||||
($ in millions)
|
2011
|
2010
|
||||||
Assets
|
||||||||
Current assets
|
||||||||
Cash and cash equivalents
|
$ | 193.1 | $ | 152.0 | ||||
Receivables, net
|
1,079.6 | 849.7 | ||||||
Inventories, net
|
1,245.7 | 1,083.9 | ||||||
Deferred taxes and other current assets
|
196.0 | 220.1 | ||||||
Total current assets
|
2,714.4 | 2,305.7 | ||||||
Property, plant and equipment, net
|
2,217.0 | 2,048.2 | ||||||
Goodwill
|
2,320.2 | 2,105.3 | ||||||
Intangibles and other assets, net
|
531.4 | 468.5 | ||||||
Total Assets
|
$ | 7,783.0 | $ | 6,927.7 | ||||
Liabilities and Shareholders’ Equity
|
||||||||
Current liabilities
|
||||||||
Short-term debt and current portion of long-term debt
|
$ | 320.0 | $ | 110.7 | ||||
Accounts payable
|
854.0 | 700.3 | ||||||
Accrued employee costs
|
205.5 | 258.2 | ||||||
Other current liabilities
|
303.9 | 314.1 | ||||||
Total current liabilities
|
1,683.4 | 1,383.3 | ||||||
Long-term debt
|
3,197.3 | 2,701.6 | ||||||
Employee benefit obligations
|
980.8 | 963.3 | ||||||
Deferred taxes and other liabilities
|
239.2 | 221.4 | ||||||
Total liabilities
|
6,100.7 | 5,269.6 | ||||||
Contingencies
|
||||||||
Shareholders’ equity (a)
|
||||||||
Common stock (326,351,909 shares issued – 2011; 325,423,462 shares issued – 2010)
|
910.5 | 893.4 | ||||||
Retained earnings
|
2,909.2 | 2,829.8 | ||||||
Accumulated other comprehensive earnings (loss)
|
(9.4 | ) | (82.1 | ) | ||||
Treasury stock, at cost (157,632,211 shares – 2011; 153,265,070 shares – 2010)
|
(2,282.4 | ) | (2,123.1 | ) | ||||
Total Ball Corporation shareholders’ equity
|
1,527.9 | 1,518.0 | ||||||
Noncontrolling interests
|
154.4 | 140.1 | ||||||
Total shareholders’ equity
|
1,682.3 | 1,658.1 | ||||||
Total Liabilities and Shareholders’ Equity
|
$ | 7,783.0 | $ | 6,927.7 |
(a)
|
Share amounts in 2010 have been retrospectively adjusted for the two-for-one stock split that was effective on February 15, 2011.
|
Three Months Ended
|
||||||||
($ in millions)
|
April 3, 2011
|
March 28, 2010
|
||||||
Cash Flows from Operating Activities
|
||||||||
Net earnings
|
$ | 98.2 | $ | 79.4 | ||||
Discontinued operations, net of tax
|
1.3 | 3.1 | ||||||
Adjustments to reconcile net earnings to net cash used in continuing operating activities:
|
||||||||
Depreciation and amortization
|
73.6 | 62.7 | ||||||
Business consolidation and other activities, net of cash payments
|
10.9 | (0.5 | ) | |||||
Deferred taxes
|
4.3 | (10.7 | ) | |||||
Other, net
|
19.8 | 13.6 | ||||||
Changes in working capital components
|
(280.9 | ) | (425.8 | ) | ||||
Cash provided by (used in) continuing operating activities
|
(72.8 | ) | (278.2 | ) | ||||
Cash provided by (used in) discontinued operating activities
|
(1.6 | ) | 6.2 | |||||
Total cash provided by (used in) operating activities
|
(74.4 | ) | (272.0 | ) | ||||
Cash Flows from Investing Activities
|
||||||||
Additions to property, plant and equipment
|
(95.0 | ) | (33.3 | ) | ||||
Acquisition of business, net of cash acquired
|
(295.2 | ) | − | |||||
Other, net
|
6.0 | (11.3 | ) | |||||
Cash provided by (used in) continuing investing activities
|
(384.2 | ) | (44.6 | ) | ||||
Cash provided by (used in) discontinued investing activities
|
– | (3.7 | ) | |||||
Total cash provided by (used in) investing activities
|
(384.2 | ) | (48.3 | ) | ||||
Cash Flows from Financing Activities
|
||||||||
Long-term borrowings
|
463.9 | 789.0 | ||||||
Repayments of long-term borrowings
|
(2.2 | ) | (222.2 | ) | ||||
Net change in short-term borrowings
|
196.2 | 66.7 | ||||||
Proceeds from issuances of common stock
|
13.7 | 9.7 | ||||||
Acquisitions of treasury stock
|
(164.3 | ) | (129.4 | ) | ||||
Common dividends
|
(11.7 | ) | (9.2 | ) | ||||
Other, net
|
2.4 | (6.4 | ) | |||||
Cash provided by (used in) financing activities
|
498.0 | 498.2 | ||||||
Effect of exchange rate changes on cash
|
1.7 | 2.9 | ||||||
Change in cash and cash equivalents
|
41.1 | 180.8 | ||||||
Cash and cash equivalents – beginning of period
|
152.0 | 210.6 | ||||||
Cash and cash equivalents – end of period
|
$ | 193.1 | $ | 391.4 |
1.
|
Basis of Presentation
|
2.
|
Accounting Pronouncements
|
3.
|
Business Segment Information
|
3.
|
Business Segment Information (continued)
|
Summary of Business by Segment
|
Three Months Ended
|
||||||||
($ in millions)
|
April 3, 2011
|
March 28, 2010
|
||||||
Net Sales
|
||||||||
Metal beverage packaging, Americas & Asia
|
$ | 1,032.3 | $ | 774.4 | ||||
Metal beverage packaging, Europe
|
443.0 | 367.5 | ||||||
Metal food & household products packaging, Americas
|
344.7 | 285.4 | ||||||
Total packaging operations
|
1,820.0 | 1,427.3 | ||||||
Aerospace & technologies
|
191.2 | 165.0 | ||||||
Net sales
|
$ | 2,011.2 | $ | 1,592.3 | ||||
Net Earnings
|
||||||||
Metal beverage packaging, Americas & Asia
|
$ | 115.6 | $ | 74.0 | ||||
Business consolidation activities
|
(10.9 | ) | 0.5 | |||||
Total metal beverage packaging, Americas & Asia
|
104.7 | 74.5 | ||||||
Metal beverage packaging, Europe
|
53.1 | 35.0 | ||||||
Business consolidation and other activities
|
(2.6 | ) | – | |||||
Total metal beverage packaging, Europe
|
50.5 | 35.0 | ||||||
Metal food & household products packaging, Americas
|
39.8 | 21.7 | ||||||
Total packaging operations
|
195.0 | 131.2 | ||||||
Aerospace & technologies
|
18.7 | 13.5 | ||||||
Segment earnings before interest and taxes
|
213.7 | 144.7 | ||||||
Undistributed corporate expenses, net
|
(19.7 | ) | (12.1 | ) | ||||
Earnings before interest and taxes
|
194.0 | 132.6 | ||||||
Interest expense
|
(46.5 | ) | (33.9 | ) | ||||
Tax provision
|
(48.0 | ) | (20.9 | ) | ||||
Equity in results of affiliates, net of tax
|
– | 4.7 | ||||||
Net earnings from continuing operations
|
$ | 99.5 | $ | 82.5 |
April 3,
|
December 31,
|
|||||||
($ in millions)
|
2011
|
2010
|
||||||
Total Assets
|
||||||||
Metal beverage packaging, Americas & Asia
|
$ | 3,114.5 | $ | 2,965.8 | ||||
Metal beverage packaging, Europe
|
2,869.0 | 2,210.6 | ||||||
Metal food & household products packaging, Americas
|
1,249.0 | 1,184.3 | ||||||
Aerospace & technologies
|
292.7 | 280.9 | ||||||
Segment assets from continuing operations
|
7,525.2 | 6,641.6 | ||||||
Corporate assets, net of eliminations
|
257.8 | 286.1 | ||||||
Total assets
|
$ | 7,783.0 | $ | 6,927.7 |
4.
|
Acquisitions
|
($ in millions)
|
||||
Other assets and liabilities, net
|
$ | 10.4 | ||
Property, plant and equipment
|
95.7 | |||
Goodwill
|
137.9 | |||
Other intangible assets
|
75.5 | |||
Deferred taxes
|
(17.4 | ) | ||
Noncontrolling interest
|
(6.9 | ) | ||
Net assets acquired
|
$ | 295.2 |
Latapack-Ball Embalagens, Ltda. (Latapack-Ball)
|
Cash
|
$ | 69.3 | ||
Current assets
|
84.7 | |||
Property, plant and equipment
|
265.9 | |||
Goodwill
|
100.2 | |||
Intangible asset
|
52.8 | |||
Current liabilities
|
(53.2 | ) | ||
Long-term liabilities
|
(174.1 | ) | ||
Net assets acquired
|
$ | 345.6 | ||
Noncontrolling interest
|
$ | (132.9 | ) |
4.
|
Acquisitions (continued)
|
Neuman Aluminum (Neuman)
|
Guangdong Jianlibao Group Co., Ltd (Jianlibao)
|
5.
|
Dispositions
|
Plastics Packaging, Americas
|
The following table summarizes the operating results for the discontinued operations:
|
Three Months Ended
|
||||||||
($ in millions)
|
April 3, 2011
|
March 28, 2010
|
||||||
Net sales
|
$ | − | $ | 113.9 | ||||
Earnings from operations
|
$ | − | $ | (2.0 | ) | |||
Loss on sale of business
|
(0.8 | ) | − | |||||
Loss on business consolidation activities
|
(1.3 | ) | (2.9 | ) | ||||
Tax benefit (provision)
|
0.8 | 1.8 | ||||||
Discontinued operations, net of tax
|
$ | (1.3 | ) | $ | (3.1 | ) |
6.
|
Business Consolidation and Other Activities
|
($ in millions)
|
Metal Beverage
Packaging,
Americas
& Asia
|
Metal Food
& Household
Products
Packaging,
Americas
|
Corporate
and Other
Costs
|
Total
|
||||||||||||
Balance at December 31, 2010
|
$ | 7.5 | $ | 9.5 | $ | 11.0 | $ | 28.0 | ||||||||
Charges (gains) in continuing operations
|
10.9 | − | − | 10.9 | ||||||||||||
Cash payments and other activity
|
(1.2 | ) | (1.5 | ) | (0.8 | ) | (3.5 | ) | ||||||||
Balance at April 3, 2011
|
$ | 17.2 | $ | 8.0 | $ | 10.2 | $ | 35.4 |
7.
|
Receivables, Net
|
April 3,
|
December 31,
|
|||||||
($ in millions)
|
2011
|
2010
|
||||||
Trade accounts receivable, net
|
$ | 987.6 | $ | 774.3 | ||||
Other receivables
|
92.0 | 75.4 | ||||||
$ | 1,079.6 | $ | 849.7 |
8.
|
Inventories, Net
|
April 3,
|
December 31,
|
|||||||
($ in millions)
|
2011
|
2010
|
||||||
Raw materials and supplies
|
$ | 462.2 | $ | 478.0 | ||||
Work in process and finished goods
|
783.5 | 605.9 | ||||||
$ | 1,245.7 | $ | 1,083.9 |
9.
|
Property, Plant and Equipment, Net
|
April 3,
|
December 31,
|
|||||||
($ in millions)
|
2011
|
2010
|
||||||
Land
|
$ | 99.8 | $ | 95.0 | ||||
Buildings
|
892.3 | 848.7 | ||||||
Machinery and equipment
|
3,119.6 | 2,945.6 | ||||||
Construction in progress
|
279.9 | 237.8 | ||||||
4,391.6 | 4,127.1 | |||||||
Accumulated depreciation
|
(2,174.6 | ) | (2,078.9 | ) | ||||
$ | 2,217.0 | $ | 2,048.2 |
10.
|
Goodwill
|
($ in millions)
|
Metal
Beverage
Packaging,
Americas
& Asia
|
Metal
Beverage
Packaging,
Europe
|
Metal Food &
Household
Products
Packaging,
Americas
|
Total
|
||||||||||||
Balance at December 31, 2010
|
$ | 739.4 | $ | 985.6 | $ | 380.3 | $ | 2,105.3 | ||||||||
Business acquisition (Note 4)
|
– | 137.9 | – | 137.9 | ||||||||||||
Effects of foreign currency exchange rates
|
– | 77.0 | – | 77.0 | ||||||||||||
Balance at April 3, 2011
|
$ | 739.4 | $ | 1,200.5 | $ | 380.3 | $ | 2,320.2 |
11.
|
Intangibles and Other Assets, Net
|
April 3,
|
December 31,
|
|||||||
($ in millions)
|
2011
|
2010
|
||||||
Intangible assets (net of accumulated amortization of $120.2 at April 3, 2011, and $113.5 at December 31, 2010)
|
$ | 224.0 | $ | 149.1 | ||||
Company and trust-owned life insurance (net of loans of $16.2 at April 3, 2011, and $10.3 at December 31, 2010)
|
141.3 | 131.1 | ||||||
Other (Note 17)
|
166.1 | 188.3 | ||||||
$ | 531.4 | $ | 468.5 |
12.
|
Debt
|
April 3, 2011
|
December 31, 2010
|
|||||||||||||||
(in millions)
|
In Local
Currency
|
In U.S. $
|
In Local
Currency
|
In U.S. $
|
||||||||||||
Notes Payable
|
||||||||||||||||
7.125% Senior Notes, due September 2016
|
$ | 375.0 | $ | 375.0 | $ | 375.0 | $ | 375.0 | ||||||||
6.625% Senior Notes, due March 2018
|
$ | 450.0 | 450.0 | $ | 450.0 | 450.0 | ||||||||||
7.375% Senior Notes, due September 2019
|
$ | 325.0 | 325.0 | $ | 325.0 | 325.0 | ||||||||||
6.75% Senior Notes, due September 2020
|
$ | 500.0 | 500.0 | $ | 500.0 | 500.0 | ||||||||||
5.75% Senior Notes, due May 2021
|
$ | 500.0 | 500.0 | $ | 500.0 | 500.0 | ||||||||||
Senior Credit Facilities, due December 2015 (at variable rates)
|
||||||||||||||||
Term A Loan, U.S. dollar denominated
|
$ | 200.0 | 200.0 | $ | 200.0 | 200.0 | ||||||||||
Term B Loan, British sterling denominated
|
₤ | 51.0 | 81.9 | ₤ | 51.0 | 78.9 | ||||||||||
Term C Loan, euro denominated
|
€ | 100.0 | 141.7 | € | 100.0 | 132.5 | ||||||||||
U.S. dollar multi-currency revolver borrowings
|
$ | 75.0 | 75.0 | $ | − | − | ||||||||||
Euro multi-currency revolver borrowings
|
€ | 292.0 | 413.7 | € | − | − | ||||||||||
Latapack-Ball Notes Payable (at variable rates, due in October 2017)
|
$ | 135.0 | 135.0 | $ | 135.0 | 135.0 | ||||||||||
Industrial Development Revenue Bonds
|
||||||||||||||||
Floating rates due through 2015
|
$ | 5.4 | 5.4 | $ | 5.4 | 5.4 | ||||||||||
Other (including discounts and premiums)
|
Various
|
33.2 |
Various
|
34.3 | ||||||||||||
3,235.9 | 2,736.1 | |||||||||||||||
Less: Current portion of long-term debt
|
(38.6 | ) | (34.5 | ) | ||||||||||||
$ | 3,197.3 | $ | 2,701.6 |
12.
|
Debt (continued)
|
13.
|
Employee Benefit Obligations
|
April 3,
|
December 31,
|
|||||||
($ in millions)
|
2011
|
2010
|
||||||
Total defined benefit pension liability
|
$ | 562.8 | $ | 541.1 | ||||
Less current portion
|
(24.3 | ) | (23.4 | ) | ||||
Long-term defined benefit pension liability
|
538.5 | 517.7 | ||||||
Retiree medical and other postemployment benefits
|
187.9 | 186.1 | ||||||
Deferred compensation plans
|
227.2 | 224.5 | ||||||
Other
|
27.2 | 35.0 | ||||||
$ | 980.8 | $ | 963.3 |
Three Months Ended
|
||||||||||||||||||||||||
April 3, 2011
|
March 28, 2010
|
|||||||||||||||||||||||
($ in millions)
|
U.S.
|
Foreign
|
Total
|
U.S.
|
Foreign
|
Total
|
||||||||||||||||||
Service cost
|
$ | 10.8 | $ | 2.0 | $ | 12.8 | $ | 11.1 | $ | 1.8 | $ | 12.9 | ||||||||||||
Interest cost
|
14.4 | 7.6 | 22.0 | 14.2 | 7.5 | 21.7 | ||||||||||||||||||
Expected return on plan assets
|
(18.0 | ) | (4.3 | ) | (22.3 | ) | (17.0 | ) | (3.7 | ) | (20.7 | ) | ||||||||||||
Amortization of prior service cost
|
0.3 | (0.1 | ) | 0.2 | 0.3 | (0.1 | ) | 0.2 | ||||||||||||||||
Recognized net actuarial loss
|
5.4 | 1.4 | 6.8 | 4.3 | 1.2 | 5.5 | ||||||||||||||||||
Curtailment loss (Note 6)
|
4.4 | − | 4.4 | − | − | − | ||||||||||||||||||
Subtotal
|
17.3 | 6.6 | 23.9 | 12.9 | 6.7 | 19.6 | ||||||||||||||||||
Multi-employer plans
|
0.4 | − | 0.4 | 0.4 | – | 0.4 | ||||||||||||||||||
Net periodic benefit cost
|
$ | 17.7 | $ | 6.6 | $ | 24.3 | $ | 13.3 | $ | 6.7 | $ | 20.0 |
Accumulated Other Comprehensive Earnings (Loss)
|
($ in millions)
|
Foreign
Currency
Translation
|
Pension and
Other
Postretirement
Items
(Net of Tax)
|
Effective
Derivatives
(Net of Tax)
|
Gain on
Available for
Sale Securities
(Net of Tax)
|
Accumulated
Other
Comprehensive
Earnings (Loss)
|
|||||||||||||||
December 31, 2010
|
$ | 123.1 | $ | (287.8 | ) | $ | 72.4 | $ | 10.2 | $ | (82.1 | ) | ||||||||
Change
|
71.0 | 5.2 | 6.7 | (10.2 | ) | 72.7 | ||||||||||||||
April 3, 2011
|
$ | 194.1 | $ | (282.6 | ) | $ | 79.1 | $ | − | $ | (9.4 | ) |
Three Months Ended
|
||||||||
($ in millions)
|
April 3, 2011
|
March 28, 2010
|
||||||
Net earnings attributable to Ball Corporation
|
$ | 91.3 | $ | 79.3 | ||||
Foreign currency translation adjustment
|
71.0 | (57.5 | ) | |||||
Pension and other postretirement items, net of tax
|
5.2 | 2.7 | ||||||
Effect of derivative instruments, net of tax (a)
|
6.7 | 24.9 | ||||||
Gain on available for sale securities reclassified into earnings, net of tax
|
(10.2 | ) | 1.4 | |||||
Comprehensive earnings attributable to Ball Corporation
|
$ | 164.0 | $ | 50.8 |
(a)
|
Comprehensive earnings (loss) related to effective derivatives were as follows:
|
Three Months Ended
|
||||||||
($ in millions)
|
April 3, 2011
|
March 28, 2010
|
||||||
Amounts reclassified into earnings (Note 17):
|
||||||||
Commodity contracts
|
$ | (14.2 | ) | $ | 15.4 | |||
Interest rate and foreign currency contracts
|
(0.2 | ) | 1.7 | |||||
Change in fair value of cash flow hedges:
|
||||||||
Commodity contracts
|
15.3 | 22.8 | ||||||
Interest rate and foreign currency contracts
|
3.8 | (1.2 | ) | |||||
Foreign currency and tax impacts
|
2.0 | (13.8 | ) | |||||
$ | 6.7 | $ | 24.9 |
15.
|
Stock-Based Compensation Programs
|
Outstanding Options (a)
|
Nonvested Options (a)
|
|||||||||||||||
Number of
Shares
|
Weighted
Average
Exercise Price
|
Number of
Shares
|
Weighted
Average Grant
Date Fair Value
|
|||||||||||||
Beginning of year
|
10,766,646 | $ | 21.39 | 3,918,684 | $ | 6.13 | ||||||||||
Granted
|
1,347,060 | 35.84 | 1,347,060 | 9.77 | ||||||||||||
Vested
|
(914,584 | ) | 6.06 | |||||||||||||
Exercised
|
(533,676 | ) | 17.12 | |||||||||||||
Canceled/forfeited
|
(34,900 | ) | 23.22 | (34,900 | ) | 5.99 | ||||||||||
End of period
|
11,545,130 | 23.27 | 4,316,260 | 7.28 | ||||||||||||
Vested and exercisable, end of period
|
7,228,870 | 20.82 | ||||||||||||||
Reserved for future grants
|
6,444,430 |
(a)
|
Amounts have been retrospectively adjusted for the two-for-one stock split that was effective on February 15, 2011.
|
Expected dividend yield
|
0.78%
|
||
Expected stock price volatility
|
30.05%
|
||
Risk-free interest rate
|
1.97%
|
||
Expected life of options
|
5.0 years
|
Three Months Ended
|
||||||||
($ in millions, except per share amounts; shares in thousands)
|
April 3,
2011
|
March 28,
2010
|
||||||
Net earnings attributable to Ball Corporation
|
$ | 91.3 | $ | 79.3 | ||||
Basic weighted average common shares (a)
|
169,189 | 186,106 | ||||||
Effect of dilutive securities (a)
|
3,732 | 2,770 | ||||||
Weighted average shares applicable to diluted earnings per share (a)
|
172,921 | 188,876 | ||||||
Basic earnings per share (a)
|
$ | 0.54 | $ | 0.42 | ||||
Diluted earnings per share (a)
|
$ | 0.53 | $ | 0.42 |
(a)
|
Amounts in 2010 have been retrospectively adjusted for the two-for-one stock split that was effective on February 15, 2011.
|
17.
|
Financial Instruments and Risk Management
|
17.
|
Financial Instruments and Risk Management (continued)
|
Collateral Calls
|
17.
|
Financial Instruments and Risk Management (continued)
|
Fair Value Measurements
|
($ in millions)
|
Derivatives
Designated As
Hedging
Instruments
|
Derivatives Not
Designated As
Hedging
Instruments
|
Total
|
|||||||||
Assets:
|
||||||||||||
Commodity contracts
|
$ | 51.8 | $ | 25.2 | $ | 77.0 | ||||||
Other derivative contracts
|
2.4 | 2.1 | 4.5 | |||||||||
Total current derivative contracts
|
$ | 54.2 | $ | 27.3 | $ | 81.5 | ||||||
Noncurrent commodity contracts
|
$ | 54.5 | $ | – | $ | 54.5 | ||||||
Other noncurrent contracts
|
1.7 | 0.6 | 2.3 | |||||||||
Total noncurrent derivative contracts
|
$ | 56.2 | $ | 0.6 | $ | 56.8 | ||||||
Liabilities:
|
||||||||||||
Commodity contracts
|
$ | 13.7 | $ | 24.4 | $ | 38.1 | ||||||
Other derivative contracts
|
1.6 | 6.3 | 7.9 | |||||||||
Total current derivative contracts
|
$ | 15.3 | $ | 30.7 | $ | 46.0 | ||||||
Noncurrent commodity contracts
|
$ | 0.1 | $ | − | $ | 0.1 | ||||||
Other noncurrent contracts
|
0.5 | – | 0.5 | |||||||||
Total noncurrent derivative contracts
|
$ | 0.6 | $ | − | $ | 0.6 |
17.
|
Financial Instruments and Risk Management (continued)
|
($ in millions)
|
Derivatives
Designated As
Hedging
Instruments
|
Derivatives Not
Designated As
Hedging
Instruments
|
Total
|
|||||||||
Assets:
|
||||||||||||
Commodity contracts
|
$ | 59.9 | $ | 35.8 | $ | 95.7 | ||||||
Other derivative contracts
|
0.2 | 6.7 | 6.9 | |||||||||
Total current derivative contracts
|
$ | 60.1 | $ | 42.5 | $ | 102.6 | ||||||
Noncurrent commodity contracts
|
$ | 47.3 | $ | 1.8 | $ | 49.1 | ||||||
Other noncurrent contracts
|
1.3 | 0.5 | 1.8 | |||||||||
Total noncurrent derivative contracts
|
$ | 48.6 | $ | 2.3 | $ | 50.9 | ||||||
Liabilities:
|
||||||||||||
Commodity contracts
|
$ | 12.9 | $ | 35.4 | $ | 48.3 | ||||||
Foreign currency contracts
|
1.4 | 7.7 | 9.1 | |||||||||
Other derivative contracts
|
1.9 | − | 1.9 | |||||||||
Total current derivative contracts
|
$ | 16.2 | $ | 43.1 | $ | 59.3 | ||||||
Noncurrent commodity contracts
|
$ | 0.3 | $ | 1.9 | $ | 2.2 | ||||||
Other noncurrent contracts
|
0.4 | – | 0.4 | |||||||||
Total noncurrent derivative contracts
|
$ | 0.7 | $ | 1.9 | $ | 2.6 |
17.
|
Financial Instruments and Risk Management (continued)
|
Three Months Ended
|
||||||||||||||||
April 3, 2011
|
March 28, 2010
|
|||||||||||||||
($ in millions)
|
Cash Flow Hedge –
Reclassified
Amount From
Other
Comprehensive
Earnings
(Loss) – Gain (Loss) |
Gain (Loss) On
Derivatives Not
Designated As
Hedge
Instruments
|
Cash Flow Hedge –
Reclassified
Amount From
Other
Comprehensive
Earnings
(Loss) – Gain (Loss)
|
Gain (Loss) On
Derivatives Not
Designated As
Hedge
Instruments
|
||||||||||||
Commodity contracts (a)
|
$ | 14.2 | $ | (0.1 | ) | $ | (15.4 | ) | $ | 0.3 | ||||||
Interest rate contracts (b)
|
0.6 | − | (1.4 | ) | − | |||||||||||
Inflation option contracts (c)
|
− | − | – | (0.1 | ) | |||||||||||
Foreign currency contracts (d)
|
(0.4 | ) | (1.6 | ) | (0.3 | ) | 1.8 | |||||||||
Equity contracts (e)
|
– | 0.9 | − | − | ||||||||||||
Total
|
$ | 14.4 | $ | (0.8 | ) | $ | (17.1 | ) | $ | 2.0 |
(a)
|
Gains and losses on commodity contracts are recorded in sales and cost of sales in the statement of earnings. Virtually all these amounts were passed through to our customers, resulting in no significant impact to earnings.
|
(b)
|
Gains and losses on interest contracts are recorded in interest expense in the statement of earnings.
|
(c)
|
Gains and losses on inflation options are recorded in cost of sales in the statement of earnings.
|
(d)
|
Gains and losses on foreign currency contracts to hedge sales of product are recorded in cost of sales. Gains and losses on foreign currency hedges used for translation between segments are reflected in selling, general and administrative expenses in the statement of earnings.
|
(e)
|
Gains and losses on equity contracts are recorded in selling, general and administrative expenses in the statement of earnings.
|
18.
|
Contingencies
|
18.
|
Contingencies (continued)
|
18.
|
Contingencies (continued)
|
19.
|
Indemnifications and Guarantees
|
19.
|
Indemnifications and Guarantees (continued)
|
Three Months Ended
|
||||||||
($ in millions)
|
April 3, 2011
|
March 28, 2010
|
||||||
Net sales
|
$ | 2,011.2 | $ | 1,592.3 | ||||
Net earnings from continuing operations
|
99.5 | 82.5 |
Three Months Ended
|
||||||||
($ in millions)
|
April 3, 2011
|
March 28, 2010
|
||||||
Net sales
|
$ | 1,032.3 | $ | 774.4 | ||||
Segment earnings
|
$ | 115.6 | $ | 74.0 | ||||
Business consolidation activities (a)
|
(10.9 | ) | 0.5 | |||||
Total segment earnings
|
$ | 104.7 | $ | 74.5 |
(a)
|
Further details of these items are included in Note 6 to the unaudited condensed consolidated financial statements within Item 1 of this report.
|
Three Months Ended
|
||||||||
($ in millions)
|
April 3, 2011
|
March 28, 2010
|
||||||
Net sales
|
$ | 443.0 | $ | 367.5 | ||||
Segment earnings
|
$ | 53.1 | $ | 35.0 | ||||
Business consolidation and other activities (a)
|
(2.6 | ) | − | |||||
Total segment earnings
|
$ | 50.5 | $ | 35.0 |
(a)
|
Further details of these items are included in Note 6 to the unaudited condensed consolidated financial statements within Item 1 of this report.
|
Three Months Ended
|
||||||||
($ in millions)
|
April 3, 2011
|
March 28, 2010
|
||||||
Net sales
|
$ | 344.7 | $ | 285.4 | ||||
Segment earnings
|
39.8 | 21.7 |
Three Months Ended
|
||||||||
($ in millions)
|
April 3, 2011
|
March 28, 2010
|
||||||
Net sales
|
$ | 191.2 | $ | 165.0 | ||||
Segment earnings
|
18.7 | 13.5 |
The following table summarizes the operating results for the discontinued operations:
|
Three Months Ended
|
||||||||
($ in millions)
|
April 3, 2011
|
March 28, 2010
|
||||||
Net sales
|
$ | – | $ | 113.9 | ||||
Earnings from operations
|
$ | – | $ | (2.0 | ) | |||
Loss on sale of business
|
(0.8 | ) | – | |||||
Loss on business consolidation activities
|
(1.3 | ) | (2.9 | ) | ||||
Tax benefit (provision)
|
0.8 | 1.8 | ||||||
Discontinued operations, net of tax
|
$ | (1.3 | ) | $ | (3.1 | ) |
Three Months Ended
|
||||||||
($ in millions)
|
April 3, 2011
|
March 28, 2010
|
||||||
Cash flows provided by (used in) operating activities (including discontinued operations)
|
$ | (74.4 | ) | $ | (272.0 | ) | ||
Cash flows provided by (used in) investing activities (including discontinued operations)
|
(384.2 | ) | (48.3 | ) | ||||
Cash flows provided by (used in) financing activities
|
498.0 | 498.2 |
Three Months Ended
|
||||||||
($ in millions)
|
April 3, 2011
|
March 28, 2010
|
||||||
Earnings before taxes, as reported
|
$ | 147.5 | $ | 98.7 | ||||
Add interest expense
|
46.5 | 33.9 | ||||||
Earnings before interest and taxes (EBIT)
|
194.0 | 132.6 | ||||||
Business consolidation activities
|
13.5 | (0.5 | ) | |||||
Adjusted EBIT
|
$ | 207.5 | $ | 132.1 |
Three Months Ended
|
||||||||
($ in millions, except per share amounts)
|
April 3, 2011
|
March 28, 2010
|
||||||
Net earnings attributable to Ball Corporation, as reported
|
$ | 91.3 | $ | 79.3 | ||||
Discontinued operations, net of tax
|
1.3 | 3.1 | ||||||
Business consolidation activities, net of tax
|
8.4 | (0.3 | ) | |||||
Adjusted net earnings (Comparable Earnings)
|
$ | 101.0 | $ | 82.1 | ||||
Per diluted share from continuing operations, as reported (a)
|
$ | 0.54 | $ | 0.44 | ||||
Per diluted share, as adjusted (a)
|
0.58 | 0.43 |
(a)
|
Amounts in 2010 have been retrospectively adjusted for the two-for-one stock split that was effective on February 15, 2011.
|
($ in millions, except ratios)
|
||||
Net earnings from continuing operations
|
$ | 565.6 | ||
Add interest expense
|
170.8 | |||
Add tax provision
|
202.9 | |||
Equity in results of affiliates
|
(113.3 | ) | ||
Earnings before interest and taxes (EBIT)
|
826.0 | |||
Add business consolidation and other activities
|
3.0 | |||
Adjusted EBIT
|
829.0 | |||
Add depreciation and amortization
|
276.4 | |||
Adjusted EBITDA
|
$ | 1,105.4 | ||
Interest expense, excluding debt refinancing costs of $8.8 million
|
$ | (162.0 | ) | |
Total debt at April 3, 2011
|
$ | 3,517.3 | ||
Less cash
|
(193.1 | ) | ||
Net debt
|
$ | 3,324.2 | ||
Adjusted EBIT/Interest coverage
|
5.1 | x | ||
Net debt/Adjusted EBITDA
|
3.0 | x |
Item 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
Item 4.
|
CONTROLS AND PROCEDURES
|
PART II.
|
OTHER INFORMATION
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Changes in Securities
|
Purchases of Securities
|
||||||||||||||||
($ in millions)
|
Total Number
of Shares
Purchased
|
Weighted
Average
Price Paid
per Share
|
Total Number
of Shares
Purchased as
Part of Publicly
Announced
Plans
or Programs
|
Maximum Number
of Shares that May
Yet Be Purchased
Under the Plans
or Programs (b)
|
||||||||||||
January 1 to February 6, 2011
|
3,704,176 | $ | 35.20 | 3,704,176 | 19,188,436 | |||||||||||
February 7 to March 6, 2011
|
437,342 | $ | 36.66 | 437,342 | 18,751,094 | |||||||||||
March 7 to April 3, 2011
|
515,126 | $ | 34.66 | 515,126 | 18,235,968 | |||||||||||
Total
|
4,656,644 | (a) | $ | 35.27 | 4,656,644 |
(a)
|
Includes open market purchases (on a trade-date basis) and/or shares retained by the company to settle employee withholding tax liabilities.
|
(b)
|
The company has an ongoing repurchase program for which shares are authorized from time to time by Ball’s board of directors. On January 26, 2011, the Board authorized the repurchase by the company of up to a total of 20 million shares. This repurchase authorization also replaced all previous authorizations.
|
Item 3.
|
Defaults Upon Senior Securities
|
Item 4.
|
(Reserved)
|
Item 5.
|
Other Information
|
20
|
Unaudited condensed consolidating guarantor financial statements.
|
31.1
|
Certification pursuant to Rule 13a-14(a) or Rule 15d-14(a) by John A. Hayes, President and Chief Executive Officer of Ball Corporation.
|
31.2
|
Certification pursuant to Rule 13a-14(a) or Rule 15d-14(a) by Scott C. Morrison, Senior Vice President and Chief Financial Officer of Ball Corporation.
|
32.1
|
Certification pursuant to Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code by John A. Hayes, President and Chief Executive Officer of Ball Corporation.
|
32.2
|
Certification pursuant to Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code by Scott C. Morrison, Senior Vice President and Chief Financial Officer of Ball Corporation.
|
99
|
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995, as amended.
|
101
|
The following materials from the company’s quarterly report on Form 10-Q for the quarter ended April 3, 2011, formatted in XBRL (Extensible Business Reporting Language): (i) the Unaudited Condensed Consolidated Statement of Earnings, (ii) the Unaudited Condensed Consolidated Balance Sheet, (iii) the Unaudited Condensed Consolidated Statement of Cash Flows, and (iv) Notes to Unaudited Condensed Consolidated Financial Statements, tagged as blocks of text.
|
Ball Corporation
|
||
(Registrant)
|
||
By:
|
/s/ Scott C. Morrison
|
|
Scott C. Morrison
|
||
Senior Vice President and Chief Financial Officer
|
||
Date:
|
May 10, 2011
|
Description
|
Exhibit
|
Unaudited condensed consolidating guarantor financial statements (Filed herewith.)
|
EX-20
|
Certification pursuant to Rule 13a-14(a) or Rule 15d-14(a) by John A. Hayes, President and Chief Executive Officer of Ball Corporation (Filed herewith.)
|
EX-31.1
|
Certification pursuant to Rule 13a-14(a) or Rule 15d-14(a) by Scott C. Morrison, Senior Vice President and Chief Financial Officer of Ball Corporation (Filed herewith.)
|
EX-31.2
|
Certification pursuant to Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code by John A. Hayes, President and Chief Executive Officer of Ball Corporation (Furnished herewith.)
|
EX-32.1
|
Certification pursuant to Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code by Scott C. Morrison, Senior Vice President and Chief Financial Officer of Ball Corporation (Furnished herewith.)
|
EX-32.2
|
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995, as amended (Filed herewith.)
|
EX-99
|
The following materials from the company’s quarterly report on Form 10-Q for the quarter ended April 3, 2011, formatted in XBRL (Extensible Business Reporting Language): (i) the Unaudited Condensed Consolidated Statement of Earnings, (ii) the Unaudited Condensed Consolidated Balance Sheet, (iii) the Unaudited Condensed Consolidated Statement of Cash Flows, and (iv) Notes to Unaudited Condensed Consolidated Financial Statements, tagged as blocks of text (Furnished herewith.)
|
EX-101
|
UNAUDITED CONDENSED CONSOLIDATING
STATEMENT OF EARNINGS
|
||||||||||||||||||||
For the Three Months Ended April 3, 2011
|
||||||||||||||||||||
Ball
|
Guarantor
|
Non-Guarantor
|
Eliminating
|
Consolidated
|
||||||||||||||||
($ in millions)
|
Corporation
|
Subsidiaries
|
Subsidiaries
|
Adjustments
|
Total
|
|||||||||||||||
Net sales
|
$ | – | $ | 1,285.0 | $ | 726.2 | $ | – | $ | 2,011.2 | ||||||||||
Costs and expenses
|
||||||||||||||||||||
Cost of sales (excluding depreciation)
|
– | (1,070.8 | ) | (559.9 | ) | – | (1,630.7 | ) | ||||||||||||
Depreciation and amortization
|
(0.8 | ) | (37.2 | ) | (35.6 | ) | – | (73.6 | ) | |||||||||||
Selling, general and administrative
|
(20.2 | ) | (48.3 | ) | (30.9 | ) | – | (99.4 | ) | |||||||||||
Business consolidation activities
|
− | (10.9 | ) | (2.6 | ) | – | (13.5 | ) | ||||||||||||
Equity in results of subsidiaries
|
107.8 | – | – | (107.8 | ) | – | ||||||||||||||
Intercompany license fees
|
34.4 | (31.7 | ) | (2.7 | ) | – | – | |||||||||||||
121.2 | (1,198.9 | ) | (631.7 | ) | (107.8 | ) | (1,817.2 | ) | ||||||||||||
Earnings (loss) before interest and taxes
|
121.2 | 86.1 | 94.5 | (107.8 | ) | 194.0 | ||||||||||||||
Interest expense
|
(40.0 | ) | 1.0 | (7.5 | ) | − | (46.5 | ) | ||||||||||||
Earnings (loss) before taxes
|
81.2 | 87.1 | 87.0 | (107.8 | ) | 147.5 | ||||||||||||||
Tax provision
|
10.1 | (40.4 | ) | (17.7 | ) | − | (48.0 | ) | ||||||||||||
Equity in results of affiliates
|
– | (0.6 | ) | 0.6 | – | − | ||||||||||||||
Net earnings (loss) from continuing operations
|
91.3 | 46.1 | 69.9 | (107.8 | ) | 99.5 | ||||||||||||||
Discontinued operations, net of tax
|
− | (1.3 | ) | − | – | (1.3 | ) | |||||||||||||
Net earnings (loss)
|
91.3 | 44.8 | 69.9 | (107.8 | ) | 98.2 | ||||||||||||||
Less net earnings attributable to noncontrolling interests
|
− | − | (6.9 | ) | − | (6.9 | ) | |||||||||||||
Net earnings (loss) attributable to Ball Corporation
|
$ | 91.3 | $ | 44.8 | $ | 63.0 | $ | (107.8 | ) | $ | 91.3 |
UNAUDITED CONDENSED CONSOLIDATING
STATEMENT OF EARNINGS
|
||||||||||||||||||||
For the Three Months Ended March 28, 2010
|
||||||||||||||||||||
Ball
|
Guarantor
|
Non-Guarantor
|
Eliminating
|
Consolidated
|
||||||||||||||||
($ in millions)
|
Corporation
|
Subsidiaries
|
Subsidiaries
|
Adjustments
|
Total
|
|||||||||||||||
Net sales
|
$ | –– | $ | 1,122.5 | $ | 469.8 | $ | – | $ | 1,592.3 | ||||||||||
Costs and expenses
|
||||||||||||||||||||
Cost of sales (excluding depreciation)
|
– | (952.2 | ) | (366.0 | ) | – | (1,318.2 | ) | ||||||||||||
Depreciation and amortization
|
(0.8 | ) | (36.9 | ) | (25.0 | ) | – | (62.7 | ) | |||||||||||
Selling, general and administrative
|
(11.1 | ) | (44.2 | ) | (24.0 | ) | – | (79.3 | ) | |||||||||||
Business consolidation activities
|
− | 0.5 | – | – | 0.5 | |||||||||||||||
Equity in results of subsidiaries
|
77.8 | – | – | (77.8 | ) | – | ||||||||||||||
Intercompany license fees
|
46.7 | (45.0 | ) | (1.7 | ) | – | – | |||||||||||||
112.6 | (1,077.8 | ) | (416.7 | ) | (77.8 | ) | (1,459.7 | ) | ||||||||||||
Earnings (loss) before interest and taxes
|
112.6 | 44.7 | 53.1 | (77.8 | ) | 132.6 | ||||||||||||||
Interest expense
|
(30.7 | ) | 0.4 | (3.6 | ) | – | (33.9 | ) | ||||||||||||
Earnings (loss) before taxes
|
81.9 | 45.1 | 49.5 | (77.8 | ) | 98.7 | ||||||||||||||
Tax provision
|
(2.4 | ) | (6.0 | ) | (12.5 | ) | – | (20.9 | ) | |||||||||||
Equity in results of affiliates
|
– | − | 4.7 | – | 4.7 | |||||||||||||||
Net earnings (loss) from continuing operations
|
79.5 | 39.1 | 41.7 | (77.8 | ) | 82.5 | ||||||||||||||
Discontinued operations, net of tax
|
(0.2 | ) | (2.3 | ) | (0.6 | ) | – | (3.1 | ) | |||||||||||
Net earnings (loss)
|
79.3 | 36.8 | 41.1 | (77.8 | ) | 79.4 | ||||||||||||||
Less net earnings attributable to noncontrolling interests
|
– | – | (0.1 | ) | – | (0.1 | ) | |||||||||||||
Net earnings (loss) attributable to Ball Corporation
|
$ | 79.3 | $ | 36.8 | $ | 41.0 | $ | (77.8 | ) | $ | 79.3 |
CONDENSED, CONSOLIDATING BALANCE SHEET
|
||||||||||||||||||||
April 3, 2011
|
||||||||||||||||||||
($ in millions)
|
Ball
|
Guarantor
|
Non-Guarantor
|
Eliminating
|
Consolidated
|
|||||||||||||||
Corporation
|
Subsidiaries
|
Subsidiaries
|
Adjustments
|
Total
|
||||||||||||||||
ASSETS
|
||||||||||||||||||||
Current assets
|
||||||||||||||||||||
Cash and cash equivalents
|
$ | 0.5 | $ | 1.5 | $ | 191.1 | $ | – | $ | 193.1 | ||||||||||
Receivables, net
|
(1.2 | ) | 173.2 | 907.6 | – | 1,079.6 | ||||||||||||||
Inventories, net
|
– | 828.9 | 416.8 | –– | 1,245.7 | |||||||||||||||
Deferred taxes and other current assets
|
11.3 | 106.4 | 78.3 | – | 196.0 | |||||||||||||||
Total current assets
|
10.6 | 1,110.0 | 1,593.8 | – | 2,714.4 | |||||||||||||||
Property, plant and equipment, net
|
32.3 | 890.9 | 1,293.8 | – | 2,217.0 | |||||||||||||||
Investment in subsidiaries
|
3,551.4 | 352.2 | 78.7 | (3,982.3 | ) | – | ||||||||||||||
Goodwill
|
– | 927.0 | 1,393.2 | – | 2,320.2 | |||||||||||||||
Intangibles and other assets, net
|
182.3 | 110.9 | 238.2 | – | 531.4 | |||||||||||||||
Total Assets
|
$ | 3,776.6 | $ | 3,391.0 | $ | 4,597.7 | $ | (3,982.3 | ) | $ | 7,783.0 | |||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||||||||||||||
Current liabilities
|
||||||||||||||||||||
Short-term debt and current portion of long-term debt
|
$ | 16.9 | $ | 0.2 | $ | 302.9 | $ | – | $ | 320.0 | ||||||||||
Accounts payable
|
39.9 | 404.8 | 409.3 | – | 854.0 | |||||||||||||||
Accrued employee costs
|
27.9 | 106.0 | 71.6 | – | 205.5 | |||||||||||||||
Other current liabilities
|
16.1 | 163.6 | 124.2 | – | 303.9 | |||||||||||||||
Total current liabilities
|
100.8 | 674.6 | 908.0 | – | 1,683.4 | |||||||||||||||
Long-term debt
|
2,406.6 | 0.2 | 790.5 | – | 3,197.3 | |||||||||||||||
Intercompany borrowings
|
(493.9 | ) | 150.2 | 343.7 | – | – | ||||||||||||||
Employee benefit obligations
|
273.0 | 344.3 | 363.5 | – | 980.8 | |||||||||||||||
Deferred taxes and other liabilities
|
(37.8 | ) | 73.1 | 203.9 | – | 239.2 | ||||||||||||||
Total liabilities
|
2,248.7 | 1,242.4 | 2,609.6 | – | 6,100.7 | |||||||||||||||
Shareholders’ equity
|
||||||||||||||||||||
Convertible preferred stock
|
– | – | 4.8 | (4.8 | ) | – | ||||||||||||||
Preferred shareholders’ equity
|
– | – | 4.8 | (4.8 | ) | – | ||||||||||||||
Common stock
|
910.5 | 819.2 | 646.9 | (1,466.1 | ) | 910.5 | ||||||||||||||
Retained earnings
|
2,909.2 | 1,525.6 | 986.8 | (2,512.4 | ) | 2,909.2 | ||||||||||||||
Accumulated other comprehensive earnings (loss)
|
(9.4 | ) | (196.2 | ) | 195.2 | 1.0 | (9.4 | ) | ||||||||||||
Treasury stock, at cost
|
(2,282.4 | ) | – | – | – | (2,282.4 | ) | |||||||||||||
Common shareholders’ equity
|
1,527.9 | 2,148.6 | 1,828.9 | (3,977.5 | ) | 1,527.9 | ||||||||||||||
Total Ball Corporation shareholders’ equity
|
1,527.9 | 2,148.6 | 1,833.7 | (3,982.3 | ) | 1,527.9 | ||||||||||||||
Noncontrolling interests
|
– | – | 154.4 | – | 154.4 | |||||||||||||||
Total shareholders’ equity
|
1,527.9 | 2,148.6 | 1,988.1 | (3,982.3 | ) | 1,682.3 | ||||||||||||||
Total Liabilities and Shareholders’ Equity
|
$ | 3,776.6 | $ | 3,391.0 | $ | 4,597.7 | $ | (3,982.3 | ) | $ | 7,783.0 |
CONDENSED, CONSOLIDATING BALANCE SHEET
|
||||||||||||||||||||
December 31, 2010
|
||||||||||||||||||||
($ in millions)
|
Ball
|
Guarantor
|
Non-Guarantor
|
Eliminating
|
Consolidated
|
|||||||||||||||
Corporation
|
Subsidiaries
|
Subsidiaries
|
Adjustments
|
Total
|
||||||||||||||||
ASSETS
|
||||||||||||||||||||
Current assets
|
||||||||||||||||||||
Cash and cash equivalents
|
$ | 0.2 | $ | 1.7 | $ | 150.1 | $ | – | $ | 152.0 | ||||||||||
Receivables, net
|
(0.5 | ) | 157.0 | 693.2 | – | 849.7 | ||||||||||||||
Inventories, net
|
– | 763.3 | 320.6 | – | 1,083.9 | |||||||||||||||
Deferred taxes and other current assets
|
19.0 | 126.8 | 74.3 | – | 220.1 | |||||||||||||||
Total current assets
|
18.7 | 1,048.8 | 1,238.2 | – | 2,305.7 | |||||||||||||||
Property, plant and equipment, net
|
29.6 | 893.8 | 1,124.8 | – | 2,048.2 | |||||||||||||||
Investment in subsidiaries
|
3,372.9 | 217.3 | 151.0 | (3,741.2 | ) | - | ||||||||||||||
Goodwill
|
– | 927.0 | 1,178.3 | – | 2,105.3 | |||||||||||||||
Intangibles and other assets, net
|
176.0 | 129.0 | 163.5 | – | 468.5 | |||||||||||||||
Total Assets
|
$ | 3,597.2 | $ | 3,215.9 | $ | 3,855.8 | $ | (3,741.2 | ) | $ | 6,927.7 | |||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||||||||||||||
Current liabilities
|
||||||||||||||||||||
Short-term debt and current portion of long-term debt
|
$ | 17.9 | $ | 0.2 | $ | 92.6 | $ | – | $ | 110.7 | ||||||||||
Accounts payable
|
17.5 | 362.2 | 320.6 | – | 700.3 | |||||||||||||||
Accrued employee costs
|
24.7 | 165.1 | 68.4 | – | 258.2 | |||||||||||||||
Other current liabilities
|
59.3 | 126.8 | 128.0 | – | 314.1 | |||||||||||||||
Total current liabilities
|
119.4 | 654.3 | 609.6 | – | 1,383.3 | |||||||||||||||
Long-term debt
|
2,333.5 | 0.4 | 367.7 | – | 2,701.6 | |||||||||||||||
Intercompany borrowings
|
(536.7 | ) | 105.3 | 431.4 | – | – | ||||||||||||||
Employee benefit obligations
|
197.1 | 419.9 | 346.3 | – | 963.3 | |||||||||||||||
Deferred taxes and other liabilities
|
(34.1 | ) | 65.8 | 189.7 | – | 221.4 | ||||||||||||||
Total liabilities
|
2,079.2 | 1,245.7 | 1,944.7 | – | 5,269.6 | |||||||||||||||
Shareholders’ equity
|
||||||||||||||||||||
Convertible preferred stock
|
– | – | 4.8 | (4.8 | ) | – | ||||||||||||||
Preferred shareholders’ equity
|
– | – | 4.8 | (4.8 | ) | – | ||||||||||||||
Common stock
|
893.4 | 684.4 | 719.2 | (1,403.6 | ) | 893.4 | ||||||||||||||
Retained earnings
|
2,829.8 | 1,480.8 | 923.8 | (2,404.6 | ) | 2,829.8 | ||||||||||||||
Accumulated other comprehensive earnings (loss)
|
(82.1 | ) | (195.0 | ) | 123.2 | 71.8 | (82.1 | ) | ||||||||||||
Treasury stock, at cost
|
(2,123.1 | ) | – | – | – | (2,123.1 | ) | |||||||||||||
Common shareholders’ equity
|
1,518.0 | 1,970.2 | 1,766.2 | (3,736.4 | ) | 1,518.0 | ||||||||||||||
Total Ball Corporation shareholders’ equity
|
1,518.0 | 1,970.2 | 1,771.0 | (3,741.2 | ) | 1,518.0 | ||||||||||||||
Noncontrolling interests
|
– | – | 140.1 | – | 140.1 | |||||||||||||||
Total shareholders’ equity
|
1,518.0 | 1,970.2 | 1,911.1 | (3,741.2 | ) | 1,658.1 | ||||||||||||||
Total Liabilities and Shareholders’ Equity
|
$ | 3,597.2 | $ | 3,215.9 | $ | 3,855.8 | $ | (3,741.2 | ) | $ | 6,927.7 |
UNAUDITED CONDENSED CONSOLIDATING
STATEMENT OF CASH FLOWS
|
||||||||||||||||
For the Three Months Ended April 3, 2011
|
||||||||||||||||
Ball
|
Guarantor
|
Non-Guarantor
|
Consolidated
|
|||||||||||||
($ in millions)
|
Corporation
|
Subsidiaries
|
Subsidiaries
|
Total
|
||||||||||||
Cash provided by (used in) continuing operating activities
|
$ | (66.0 | ) | $ | 96.9 | $ | (103.7 | ) | $ | (72.8 | ) | |||||
Cash provided by (used in) discontinued operating activities
|
− | (1.3 | ) | (0.3 | ) | (1.6 | ) | |||||||||
Total cash provided by (used in) operating activities
|
(66.0 | ) | 95.6 | (104.0 | ) | (74.4 | ) | |||||||||
Cash flows from investing activities
|
||||||||||||||||
Additions to property, plant and equipment
|
(3.6 | ) | (34.7 | ) | (56.7 | ) | (95.0 | ) | ||||||||
Acquisition of business
|
– | − | (295.2 | ) | (295.2 | ) | ||||||||||
Investments in and advances to affiliates
|
157.3 | (65.8 | ) | (91.5 | ) | – | ||||||||||
Other, net
|
1.1 | 4.9 | − | 6.0 | ||||||||||||
Total cash provided by (used in) investing activities
|
154.8 | (95.6 | ) | (443.4 | ) | (384.2 | ) | |||||||||
Cash flows from financing activities
|
||||||||||||||||
Long-term borrowings
|
75.0 | − | 388.9 | 463.9 | ||||||||||||
Repayments of long-term borrowings
|
− | (0.2 | ) | (2.0 | ) | (2.2 | ) | |||||||||
Change in short-term borrowings
|
(3.6 | ) | – | 199.8 | 196.2 | |||||||||||
Proceeds from issuances of common stock
|
13.7 | – | – | 13.7 | ||||||||||||
Acquisitions of treasury stock
|
(164.3 | ) | – | – | (164.3 | ) | ||||||||||
Common dividends
|
(11.7 | ) | – | – | (11.7 | ) | ||||||||||
Other, net
|
2.4 | – | – | 2.4 | ||||||||||||
Cash provided by (used in) financing activities
|
(88.5 | ) | (0.2 | ) | 586.7 | 498.0 | ||||||||||
Effect of exchange rate changes on cash
|
– | – | 1.7 | 1.7 | ||||||||||||
Change in cash and cash equivalents
|
0.3 | (0.2 | ) | 41.0 | 41.1 | |||||||||||
Cash and cash equivalents – beginning of period
|
0.2 | 1.7 | 150.1 | 152.0 | ||||||||||||
Cash and cash equivalents – end of period
|
$ | 0.5 | $ | 1.5 | $ | 191.1 | $ | 193.1 |
UNAUDITED CONDENSED CONSOLIDATING
STATEMENT OF CASH FLOWS
|
||||||||||||||||
For the Three Months Ended March 28, 2010
|
||||||||||||||||
Ball
|
Guarantor
|
Non-Guarantor
|
Consolidated
|
|||||||||||||
($ in millions)
|
Corporation
|
Subsidiaries
|
Subsidiaries
|
Total
|
||||||||||||
Cash provided by (used in) continuing operating activities
|
$ | 2.8 | $ | 81.6 | $ | (362.6 | ) | $ | (278.2 | ) | ||||||
Cash provided by (used in) discontinued operating activities
|
(0.2 | ) | 6.4 | − | 6.2 | |||||||||||
Total cash provided by (used in) operating activities
|
2.6 | 88.0 | (362.6 | ) | (272.0 | ) | ||||||||||
Cash flows from investing activities
|
||||||||||||||||
Additions to property, plant and equipment
|
(2.4 | ) | (15.9 | ) | (15.0 | ) | (33.3 | ) | ||||||||
Investments in and advances to affiliates
|
(191.4 | ) | (60.0 | ) | 251.4 | – | ||||||||||
Other, net
|
(4.8 | ) | (6.5 | ) | − | (11.3 | ) | |||||||||
Cash provided by (used in) continuing investing activities
|
(198.6 | ) | (82.4 | ) | 236.4 | (44.6 | ) | |||||||||
Cash used in discontinued investing activities
|
– | (3.7 | ) | − | (3.7 | ) | ||||||||||
Total cash provided by (used in) investing activities
|
(198.6 | ) | (86.1 | ) | 236.4 | (48.3 | ) | |||||||||
Cash flows from financing activities
|
||||||||||||||||
Long-term borrowings
|
720.3 | – | 68.7 | 789.0 | ||||||||||||
Repayments of long-term borrowings
|
(220.3 | ) | (1.9 | ) | − | (222.2 | ) | |||||||||
Change in short-term borrowings
|
– | – | 66.7 | 66.7 | ||||||||||||
Proceeds from issuances of common stock
|
9.7 | – | – | 9.7 | ||||||||||||
Acquisitions of treasury stock
|
(129.4 | ) | – | – | (129.4 | ) | ||||||||||
Common dividends
|
(9.2 | ) | – | – | (9.2 | ) | ||||||||||
Other, net
|
(6.4 | ) | – | – | (6.4 | ) | ||||||||||
Cash provided by (used in) financing activities
|
364.7 | (1.9 | ) | 135.4 | 498.2 | |||||||||||
Effect of exchange rate changes on cash
|
– | – | 2.9 | 2.9 | ||||||||||||
Change in cash and cash equivalents
|
168.7 | − | 12.1 | 180.8 | ||||||||||||
Cash and cash equivalents – beginning of period
|
111.3 | 0.1 | 99.2 | 210.6 | ||||||||||||
Cash and cash equivalents – end of period
|
$ | 280.0 | $ | 0.1 | $ | 111.3 | $ | 391.4 |
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
(1)
|
the quarterly report on Form 10-Q for the quarter ended April 3, 2011, filed with the U.S. Securities and Exchange Commission on May 10, 2011 (“Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as amended; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of the operations of Ball Corporation as of, and for, the periods presented in the Report.
|
(1)
|
the quarterly report on Form 10-Q for the quarter ended April 3, 2011, filed with the U.S. Securities and Exchange Commission on May 10, 2011 (“Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as amended; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of the operations of Ball Corporation as of, and for, the periods presented in the Report.
|
●
|
Fluctuation in customer and consumer growth, demand and preferences, particularly during the months when the demand for metal beverage beer and soft drink cans is heaviest; loss of one or more major customers or suppliers or changes to contracts with one or more customers or suppliers; manufacturing overcapacity or under capacity; failure to achieve anticipated productivity improvements or production cost reductions including those associated with capital expenditures; changes in climate and weather; fruit, vegetable and fishing yields; interest rates affecting our debt; labor strikes and work stoppages; antitrust, intellectual property, consumer and other litigation; level of maintenance and capital expenditures; capital availability; economic conditions; and acts of war, terrorism or catastrophic events.
|
●
|
Competition in pricing and the possible decrease in, or loss of, sales resulting therefrom.
|
●
|
The timing and extent of regulation or deregulation; competition in each line of business; product development and introductions; and technology changes.
|
●
|
Ball’s ability or inability to have available sufficient production capacity in a timely manner.
|
●
|
Overcapacity in foreign and domestic metal container industry production facilities and its impact on pricing and financial results.
|
●
|
Regulatory action or federal, state, local or foreign laws, including mandatory deposit or restrictive packaging legislation such as recycling laws.
|
●
|
Regulatory action or laws including tax, environmental, health and workplace safety, including in respect of climate change, or chemicals or substances used in raw materials or in the manufacturing process, particularly publicity concerning Bisphenol-A, or BPA, a chemical used in the manufacture of epoxy coatings applied to many types of containers (including certain of those products produced by the company).
|
●
|
Regulations and standards, including changes in generally accepted accounting principles or their interpretation.
|
●
|
Loss contingencies related to income and other tax matters, including those arising from audits performed by U.S. and foreign tax authorities.
|
●
|
The availability and cost of raw materials, supplies, power and natural resources needed for the production of metal containers as well as aerospace products.
|
●
|
Changes in senior management; increases and trends in various employee benefits and labor costs, including pension, medical and health care costs incurred in the countries in which Ball has operations; rates of return projected and earned on assets and discount rates used to measure future obligations and expenses of the company’s defined retirement plans; and changes in the company’s pension plans.
|
●
|
The ability or inability to pass on to customers changes in raw material cost, particularly steel and aluminum.
|
●
|
The recent global recession, including in the United States, and its effects on liquidity, credit risk, asset values and the economy; international business and market risks (including foreign exchange rates or tax rates), particularly in Europe, and in countries such as China, Brazil and Argentina; political and economic instability in foreign markets; restrictive trade practices of the United States or foreign governments; the imposition of duties, taxes or other government charges by the United States or foreign governments; exchange controls.
|
●
|
Changes in the foreign exchange rate of the United States dollar against the European euro, British pound, Polish zloty, Serbian dinar, Czech koruna, Hong Kong dollar, Canadian dollar, Chinese renminbi, Brazilian real and Argentine peso, and in the foreign exchange rate of the euro against the British pound, Polish zloty, Serbian dinar and Czech koruna.
|
●
|
Undertaking successful and unsuccessful acquisitions, joint ventures and divestitures and the integration activities associated with acquisitions and joint ventures, including the recent disposition of our plastics business and the recent Aerocan S.A.S. acquisition.
|
●
|
The ability or inability to achieve technological and product extensions or new technological and product advances in the company’s businesses.
|
●
|
Delays, extensions and technical uncertainties, as well as schedules of performance associated with contracts for aerospace products and services, and the success or lack of success of satellite launches and the businesses and governments associated with aerospace products, services and launches.
|
●
|
The authorization, funding and availability and returns of government contracts and the nature and continuation of those contracts and related services provided thereunder, as well as the delay, cancellation or termination of contracts for the United States government, other customers or other government contractors.
|
●
|
Actual versus estimated business consolidation and investment exit costs and the estimated net realizable values of assets associated with such activities; and goodwill impairment.
|
●
|
Changes to unaudited results due to statutory audits of our financial statements or management’s evaluation of the company’s internal controls over financial reporting.
|
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