Exhibit 13.2
Ball Corporation and Subsidiaries
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF INCOME (LOSS)
(Millions of dollars except per share amounts)
Three months ended Nine months ended
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September 29, October 1, September 29, October 1,
1996 1995 1996 1995
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Net sales $ 622.2 $ 595.7 $1,684.3 $1,575.6
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Costs and expenses
Cost of sales 566.7 540.4 1,539.1 1,408.4
General and administrative expenses 16.8 21.8 56.8 64.3
Selling and product development expenses
5.1 3.4 12.7 11.8
Net gain on dispositions of businesses -- -- -- (3.8)
Interest expense 8.6 6.9 24.8 20.7
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597.2 572.5 1,633.4 1,501.4
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Income from continuing operations
before taxes on income 25.0 23.2 50.9 74.2
Provision for income tax expense (4.5) (7.7) (14.2) (26.3)
Minority interests (0.3) (0.5) (0.1) (1.2)
Equity in (losses) earnings of affiliates (0.8) 1.7 1.7 2.6
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Net income (loss) from:
Continuing operations 19.4 16.7 38.3 49.3
Discontinued operations 0.7 (74.0) (0.9) (68.4)
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Net income (loss) 20.1 (57.3) 37.4 (19.1)
Preferred dividends, net of tax benefit (0.7) (0.7) (2.2) (2.3)
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Earnings (loss) attributable to common
shareholders $ 19.4 $ (58.0) $ 35.2 $ (21.4)
================= ============== ================= ==============
Earnings (loss) per share of common stock:
Continuing operations $ 0.62 $ 0.53 $ 1.19 $ 1.57
Discontinued operations 0.02 (2.46) (0.03) (2.28)
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$ 0.64 $ (1.93) $ 1.16 $ (0.71)
================= ============== ================= ==============
Fully diluted earnings (loss) per share:
Continuing operations $ 0.58 $ 0.50 $ 1.14 $ 1.47
Discontinued operations 0.02 (2.28) (0.03) (2.11)
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$ 0.60 $ (1.78) $ 1.11 $ (0.64)
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Cash dividends declared per common share $ 0.15 $ 0.15 $ 0.45 $ 0.45
================= ============== ================= ==============
See accompanying notes to unaudited condensed consolidated financial statements.
Ball Corporation and Subsidiaries
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET
(Millions of dollars)
September 29, December 31,
1996 1995
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ASSETS
Current assets
Cash and temporary investments $ 10.8 $ 5.1
Accounts receivable, net 380.6 190.2
Inventories, net
Raw materials and supplies 91.2 82.8
Work in process and finished goods 196.7 235.7
Deferred income tax benefits and prepaid expenses 69.3 60.5
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Total current assets 748.6 574.3
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Discontinued operations 188.7 200.8
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Property, plant and equipment, at cost 1,267.5 1,133.4
Accumulated depreciation (551.7) (505.3)
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715.8 628.1
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Investment in affiliates 98.3 84.5
Goodwill and other assets 151.5 126.3
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$ 1,902.9 $ 1,614.0
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Short-term debt and current portion of long-term debt $ 292.8 $ 155.0
Accounts payable 250.9 195.3
Salaries, wages and other current liabilities 124.8 146.7
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Total current liabilities 668.5 497.0
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Noncurrent liabilities
Long-term debt 427.8 320.4
Employee benefit obligations, deferred income taxes and other 182.1 207.9
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Total noncurrent liabilities 609.9 528.3
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Contingencies
Minority interests 7.3 6.0
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Shareholders' equity
Series B ESOP Convertible Preferred Stock 62.4 65.6
Unearned compensation - ESOP (47.3) (50.4)
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Preferred shareholder's equity 15.1 15.2
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Common stock (issued 32,807,794 shares - 1996;
32,172,768 shares - 1995) 313.9 293.8
Retained earnings 357.8 336.4
Treasury stock, at cost (2,197,145 shares - 1996;
2,058,173 shares - 1995) (69.6) (62.7)
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Common shareholders' equity 602.1 567.5
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$ 1,902.9 $ 1,614.0
================== ==================
See accompanying notes to unaudited condensed consolidated financial statements.
Ball Corporation and Subsidiaries
UNAUDITED CONDENSED CONSOLIDATED
STATEMENT OF CASH FLOWS
(Millions of dollars)
Nine months ended
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September 29, October 1,
1996 1995
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Cash flows from operating activities
Net income from continuing operations $ 38.3 $ 49.3
Reconciliation of net income from continuing operations
to net cash (used in) provided by operating activities:
Net gain on dispositions, restructuring and other -- (3.8)
Depreciation and amortization 63.5 57.6
Deferred taxes on income 11.4 5.0
Other, net (26.8) (1.4)
Changes in working capital components (89.8) (84.2)
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Net cash (used in) provided by operating activities (3.4) 22.5
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Cash flows from financing activities
Net change in long-term debt 124.0 (54.9)
Net change in short-term debt 124.1 (17.5)
Common and preferred dividends (16.1) (16.0)
Net proceeds from issuance of common stock under various employee
and shareholder plans 20.0 25.7
Acquisitions of treasury stock (6.8) (19.0)
Other, net (30.3) (1.2)
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Net cash provided by (used in) financing activities 214.9 (82.9)
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Cash flows from investing activities
Additions to property, plant and equipment (144.5) (99.2)
Investments in and advances to affiliates
and foreign joint ventures (39.4) (37.5)
Net cash related to the dispositions of businesses -- 14.5
Cash flows attributable to discontinued operations:
Net cash related to the sale of Ball Glass (14.6) 317.5
Investment in Ball-Foster -- (180.6)
Net cash from (to) glass packaging business 7.1 (18.1)
Net cash flows from company owned life insurance (8.5) 85.0
Other, net (5.9) 9.9
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Net cash (used in) provided by investing activities (205.8) 91.5
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Net increase in cash 5.7 31.1
Cash and temporary investments:
Beginning of period 5.1 10.4
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End of period $ 10.8 $ 41.5
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See accompanying notes to unaudited condensed consolidated financial statements.
Ball Corporation and Subsidiaries
September 29, 1996
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. General.
The accompanying condensed consolidated financial statements have been prepared
by the company without audit. Certain information and footnote disclosures,
including significant accounting policies, normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. However, the company believes that the financial
statements reflect all adjustments which are necessary for a fair statement of
the results for the interim period. Results of operations for the periods shown
are not necessarily indicative of results for the year, particularly in view of
some seasonality in packaging operations. It is suggested that these unaudited
condensed consolidated financial statements and accompanying notes should be
read in conjunction with the consolidated financial statements and the notes
thereto included in the company's latest annual report.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements, and
reported amounts of revenues and expenses during the reporting period. Future
events could affect these estimates.
2. Restatement.
With the sale of the company's investment in Ball-Foster Glass Container Co.,
L.L.C. (Ball-Foster), the company no longer participates in the manufacture of
glass packaging containers. Accordingly, the accompanying Unaudited Condensed
Consolidated Financial Statements and notes have been restated from amounts
previously reported to segregate the financial effects of the commercial glass
packaging business as discontinued operations. See Note 3 - "Discontinued
Operations", for more information.
3. Discontinued Operations.
Effective October 1, 1996, the company sold its remaining 42-percent interest in
Ball-Foster, a manufacturer of glass containers, to a wholly-owned subsidiary of
Saint-Gobain Corporation for approximately $190 million in cash. The company
expects to report a fourth quarter gain from the sale of this investment. The
following table provides summary income statement data related to the
discontinued glass business.
Three months ended Nine months ended
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September 29, October 1, September 29, October 1,
(dollars in millions) 1996 1995 1996 1995
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Net sales $ -- $ 165.0 $ -- $ 545.9
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Loss attributable to previously
consolidated Ball Glass operations
before interest and taxes -- (102.1) -- (82.6)
Allocated interest expense (1.9) (3.3) (5.5) (9.8)
Ball's share of the net earnings (loss)
of Ball-Foster 3.3 1.0 (7.6) 1.0
Impact of reserves released and other (0.3) -- 11.0 --
Provision for income tax (expense) benefit (0.4) 31.5 1.2 26.0
Minority interest -- (1.1) -- (3.0)
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Net income (loss) attributable
to the glass business $ 0.7 $ (74.0) $ (0.9) $ (68.4)
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The year-to-date 1996 net loss attributable to the company's interest in
Ball-Foster includes a provision for costs associated with the closure of two
glass manufacturing facilities that were previously owned by Ball and
amortization of moulds previously capitalized by the Foster-Forbes glass
business. Ball's share of Ball-Foster's net loss was more than offset by the
release of related reserves during the second quarter, which had been provided
by Ball in connection with the sale of the glass business to Ball-Foster in
1995, and that Ball has since determined are no longer required. Included in the
1995 loss attributable to previously consolidated Ball Glass operations for the
quarter and year-to-date periods is a charge of $113.3 million in connection
with the sale of substantially all of the assets of Ball Glass Container Co.
(Ball Glass), a wholly-owned subsidiary of Ball, to Ball-Foster.
4. Subsequent Event.
On November 8,1996, the company announced that it had signed an agreement with
Lam Soon (Hong Kong) Limited to acquire Lam Soon's controlling interest in
M.C. Packaging (Hong Kong) Limited for approximately $73 million. The
acquisition, which will be made through the company's Hong Kong-based
subsidiary, FTB Packaging Limited (FTB), is expected to close early in 1997,
subject to having received certain approvals.
M.C. Packaging produces two-piece aluminum beverage cans as well as three-piece
steel beverage and general purpose cans and plastic packaging products. M.C.
Packaging has 14 manufacturing sites, one in Hong Kong and 13 through affiliates
in the People's Republic of China (PRC), with an estimated 19 percent market
share of beverage cans in the PRC and a 50 percent beverage can market share in
Hong Kong. Sales in 1995 were $195 million. FTB currently operates seven plants
in China, primarily producing beverage cans and ends, with an estimated 30
percent market share.
Subsequent to the acquisition of the controlling interest in M.C. Packaging, a
general offer will be made to acquire outstanding public shares of M.C.
Packaging. If all public shares are tendered, Ball would ultimately expect to
own, directly and indirectly, approximately 74 percent of M.C. Packaging.
5. Shareholders' Equity.
Issued and outstanding shares of the Series B ESOP Convertible Preferred Stock
were 1,699,900 shares at September 29, 1996, and 1,786,852 shares at
December 31, 1995.
6. Contingencies.
In the ordinary course of business, the company is subject to various risks and
uncertainties due, in part, to the highly competitive nature of the industries
in which the company participates, its operations in developing markets outside
the U.S., volatile costs of commodity materials used in the manufacture of its
products, and changing capital markets. Where possible and practicable, the
company attempts to minimize these risks and uncertainties.
From time to time, the company is subject to routine litigation incidental to
its business. Additionally, the U.S. Environmental Protection Agency has
designated the company as a potentially responsible party, along with numerous
other companies, for the cleanup of several hazardous waste sites. However, the
company's information at this time does not indicate that these matters will
have a material, adverse effect upon financial condition, results of operations,
capital expenditures or competitive position of the company.