Business Consolidation Activities

9 Months Ended

Oct. 02, 2011

Business Consolidation Activities

Business Consolidation Activities

6. Business Consolidation Activities

2011

Metal Beverage Packaging, Americas and Asia

In January 2011, Ball announced plans to close its Torrance, California, beverage can manufacturing plant; relocate a

12-ounce can line from the Torrance plant to its Whitby, Ontario, plant; and expand specialty can production in its Fort

Worth, Texas, plant. The company recorded charges of $1.4 million and $14.2 million during the third quarter and first nine months of 2011, respectively, in connection with these activities. Of the total $14.2 million recorded in the first nine months, $10.1 million represented severance, pension and other employee benefits; $2.4 million represented accelerated depreciation; and $1.7 million represented other costs. The first quarter of 2011 also included an impairment charge of $2.3 million to reduce the plant to its estimated net realizable value. The impairment charge was reversed during the third quarter based on information received during the quarter regarding the saleable value of the plant. In October 2011, the land and building at the Torrance location were sold for net proceeds of $23.4 million, resulting in a gain of $6.9 million, which will be reported in the fourth quarter.

An additional $0.6 million of net charges were recorded in the first nine months of 2011, primarily to reflect individually insignificant charges related to previously announced plant closures.

Metal Beverage Packaging, Europe

In connection with the acquisition of Aerocan discussed in Note 4, the company recorded charges totaling $2.9 million for transaction costs, which are required to be expensed as incurred.

Metal Food and Household Products Packaging, Americas

In September 2011, the company discontinued production of certain products in a facility and recorded a charge of $1.4 million in connection with this discontinuance.

Corporate and Other Costs

Net charges of $0.6 million were recorded during the first nine months of 2011 primarily to reflect individually insignificant charges related to previously announced plant closures.

2010

Metal Beverage Packaging, Americas and Asia

Net earnings of $0.4 million were recorded in the first nine months of 2010 to reflect individually insignificant costs and gains related to previously announced plant closures.

Metal Food and Household Products Packaging, Americas

In September 2010, Ball announced the closure of its metal food container manufacturing plant in Richmond, British Columbia, and the plant ceased production in the first quarter of 2011. In connection with the closure, the company recorded a charge of $4.6 million primarily for severance and other employee benefits.

During the third quarter of 2010, the company identified an accrual of a pension liability related to a Canadian plant closure that occurred in 2006. The amount of the accrual was $17.8 million and was the result of recognizing the final settlement of the pension plan prior to the actual settlement of the pension obligation as defined in the pension accounting guidance. A third quarter 2010 out-of-period adjustment eliminated the excess pension liability balance related to the final settlement. The accrual for the pension settlement liability, as determined at that time, will be charged to earnings from accumulated other comprehensive earnings (loss) upon final settlement of the related pension obligation when the criteria in the accounting guidance are deemed to have been met and all regulatory clearances have been given. Management has assessed the impact of this adjustment and does not believe these amounts were quantitatively or qualitatively material, individually or in the aggregate, to any previously issued financial statements, including the results of operations for 2006, or to the third quarter, first nine months or full year of 2010 .

Corporate and Other Costs

In the third quarter of 2010, $0.7 million of transaction costs were recorded in connection with the acquisition of Neuman (discussed in Note 4). In the second quarter, charges of $3.1 million were recorded to establish a reserve associated with an environmental matter at a previously owned facility.

Following is a summary of activity by segment related to business consolidation 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	14.8			1.4			0.6			16.8
Cash payments and other activity	(14.2		)	(5.7		)	(3.5		)	(23.4		)
Balance at October 2, 2011	$	8.1		$	5.2		$	8.1		$	21.4

The carrying value of fixed assets remaining for sale in connection with plant closures was approximately $19.5 million at October 2, 2011.