SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
October 1, 1996
(Date of earliest event reported)
BALL CORPORATION
(Exact name of Registrant as specified in its charter)
Indiana 1-7349 35-0160610
(State of (Commission File No.) (IRS Employer
Incorporation) Identification No.)
345 South High Street
Muncie, Indiana 47307
(Address of principal executive offices, including zip code)
(317) 747-6100
(Registrant's telephone number, including area code)
ITEM 2. DISPOSITION OF ASSETS
On October 1, 1996, BG Holdings I, Inc., BG Holdings II, Inc.
(each indirect wholly owned subsidiaries of Ball Corporation ("Ball") and
collectively referred to herein as the "Ball Subsidiaries"), Saint-Gobain
Corporation and its wholly-owned subsidiary, Saint-Gobain Holdings I Corp
(the "Saint-Gobain Subsidiary") and Ball-Foster Glass Container Co., L.L.C.
("Ball-Foster") entered into a Purchase Agreement (the "Purchase
Agreement") pursuant to which each Ball Subsidiary sold its 21% Ordinary
Interest (42% in the aggregate) in Ball-Foster to the Saint-Gobain
Subsidiary for an aggregate purchase price of $190 million in cash.
Capitalized terms not otherwise defined herein are used as defined in the
Purchase Agreement. The Purchase Price for the transaction was determined as
a result of arms length negotiations between the parties. Prior to the
closing of the transactions contemplated by the Purchase Agreement, the
Saint-Gobain Subsidiary owned a 58% Ordinary Interest in Ball-Foster. As a
result of the transaction, Ball and its affiliates have no further equity
interest in Ball-Foster. Ball-Foster was formed by affiliates of Ball and
Saint-Gobain on September 15, 1995, at which time Ball-Foster acquired the
glass container manufacturing business (the "Ball Glass Business") owned by
certain Ball affiliates. Ball continues to provide certain services to
Ball-Foster for which Ball receives a fee. In addition, in connection with
the closing under the Purchase Agreement described above, the final post-
closing purchase price adjustment due in connection with the sale of the
Ball Glass Business to Ball-Foster was determined, resulting in a payment
of an additional $11 million to an affiliate of Ball.
ITEM 5. OTHER EVENTS.
On October 7, 1996, Ball Corporation ("Ball") announced that it
plans to exit the aerosol can manufacturing business by selling its
Cincinnati manufacturing plant and certain other assets to BWAY Corporation
of Atlanta for an aggregate purchase price of $36 million. The transaction
is expected to close in the fourth quarter, contingent upon required
regulatory filings. A copy of the press release that was issued by Ball
relating to such agreement and certain other matters is attached hereto as
an Exhibit and incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL IN-
FORMATION AND EXHIBITS.
(b) Unaudited Pro Forma Financial Information
The following unaudited pro forma condensed consolidated statements
of income (loss) of Ball Corporation and Subsidiaries ("the Company")
for the year ended December 31, 1995 and for the six-month period
ended June 30, 1996 and the condensed consolidated balance sheet as
of June 30, 1996 give effect to the following two transactions:
(1) the sale of substantially all of the assets of Ball Glass
Container Corporation ("Ball Glass") a wholly-owned subsidiary of
the Company on September 15, 1995 to Ball-Foster Glass Container
Co., L.L.C. ("Ball-Foster"), a joint venture limited liability
company of which the Company acquired a 42% interest (the "1995
Transactions"); (2) the sale of the Company's 42% interest in
Ball-Foster to Compagnie de Saint-Gobain on October 1, 1996, (the
"1996 Transaction"). The pro forma statements are prepared as if
the aforementioned transactions had occurred January 1, 1995 for
the statements of income (loss) and at June 30, 1996 for the
balance sheet.
Proceeds of the 1995 Transactions were $141.9 million and proceeds of
the 1996 Transaction include $190.0 million of cash from the sale of
the Company's 42% interest in Ball-Foster, $11.0 million in
settlement of the purchase price adjustment for the September 15,
1995 sale of Ball Glass to Ball-Foster and $8.4 million received as
cash distributions from Ball-Foster under the limited liability
company agreement.
The unaudited pro forma condensed consolidated statements of income
(loss) are not necessarily indicative of the results which would have
been obtained had the transactions occurred at January 1, 1995, nor
are they necessarily indicative of future results. The unaudited pro
forma condensed consolidated balance sheet is not necessarily
indicative of the actual application of the proceeds had the
transactions occurred at June 30, 1996. The pro forma financial
information should be read in conjunction with: the accompanying
notes to unaudited pro forma condensed consolidated statements of
income (loss); the accompanying notes to unaudited pro forma
condensed consolidated balance sheet; the Company's Annual Report
on Form 10-K for the year ended December 31, 1995 and Company's
Quarterly Reports on Form 10-Q for the quarters ended March 31,
1996 and June 30, 1996.
Ball Corporation and Subsidiaries
Pro Forma Condensed Consolidated Statement of Income (Loss)
For the Year Ended December 31, 1995
(Unaudited)
Ball Reverse
(dollars in millions except for per Corporation Ball Glass/ Pro Forma Pro Forma
share amounts) Historical Ball-Foster Adjustments As Adjusted
Net Sales $ 2,591.7 $ (545.9) (a) $ 2,045.8
COSTS AND EXPENSES:
Cost of sales 2,339.4 (502.8) (a) 1,836.6
Selling, general and administrative
expenses 112.1 (16.2) (a) 5.4 (d) 101.3
Net loss on dispositions (net),
restructuring and other 118.2 (111.1) (b) 7.1
Interest expense 37.8 - (a) (17.1)(e) 20.7
-------------- ---------------- ------------ ----------
(Loss) income before taxes on
income, minority interests and
equity in earnings of affiliates (15.8) 84.2 11.7 80.1
Provision for income tax benefit
(expense) 0.1 (24.5) (a), (b) (4.6)(f) (29.0)
Minority interests (4.6) 2.9 (a) (1.7)
Equity in earnings of affiliates 1.7 1.3 (c) 3.0
-------------- ---------------- ------------- -----------
Net (loss) income (18.6) 63.9 7.1 52.4
Preferred dividends, net of tax
benefit (3.1) (3.1)
-------------- ---------------- ------------- ----------
Net (loss) earnings attributable to
common shareholders $ (21.7) $ 63.9 $ 7.1 $ 49.3
============== ================ ============= ===========
Net (loss) earnings per share of
common stock $ (0.72) $ 1.64
============== ============
Fully diluted (loss) earnings per
share $ (0.72) $ 1.55
============== ============
(number of shares in thousands)
Weighted average common shares
outstanding 30,024 30,024
============== ============
Weighted average shares
outstanding--fully diluted 32,328 32,328
============== ============
See accompanying notes to pro forma condensed consolidated statements of income (loss).
Ball Corporation and Subsidiaries
Pro Forma Condensed Consolidated Statement of Income (Loss)
For the Six-Month Period Ended June 30, 1996
(Unaudited)
Ball Reverse
(dollars in millions except for per Corporation Ball Glass/ Pro Forma Pro Forma
share amounts) Historical Ball-Foster Adjustments As Adjusted
Net Sales $ 1,062.1 $ 1,062.1
COSTS AND EXPENSES:
Cost of sales 972.4 972.4
Selling, general and administrative
expenses 47.9 47.9
Interest expense 19.8 (4.8)(e) 15.0
---------- --------- -------------- --------
Income before taxes on income,
minority interests and
equity in earnings of affiliates 22.0 4.8 26.8
Provision for income tax expense (8.1) (1.9)(f) (10.0)
Minority interests 0.2 0.2
Equity in earnings of affiliates 3.2 (0.7)(c) 2.5
---------- ---------- -------------- --------
Net income 17.3 (0.7) 2.9 19.5
Preferred dividends, net of tax
benefit (1.5) (1.5)
---------- --------- -------------- --------
Net earnings attributable to
common shareholders $ 15.8 $ (0.7) $ 2.9 $ 18.0
=========== ========= ============== ===========
Net earnings per share of
common stock $ 0.52 $ 0.60
=========== ===========
Fully diluted earnings per
share $ 0.50 $ 0.57
=========== ===========
(number of shares in thousands)
Weighted average common shares
outstanding 30,145 30,145
=========== ===========
Weighted average shares
outstanding--fully diluted 32,260 32,260
=========== ===========
See accompanying notes to pro forma condensed consolidated statements of income (loss).
Ball Corporation and Subsidiaries
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF
INCOME (LOSS) (Unaudited)
(a) To reverse the results of Ball Glass included in the consolidated
results for the period from January 1, 1995 through September 15,
1995 (date of sale of Ball Glass to Ball-Foster). Interest expense
has not been adjusted since interest-bearing indebtedness related
to Ball Glass was retained by the Company.
(b) To exclude the nonrecurring loss recognized upon disposition of
Ball Glass in September 1995.
(c) To reverse the Company's 42% equity interest in Ball-Foster's
earnings/loss for the periods of September 15, 1995 through
December 31, 1995, and January 1, 1996 through June 30, 1996.
(d) To reflect certain allocated corporate overhead costs which were
not eliminated as a consequence of the sale of Ball Glass.
(e) Reflects the application of the $141.9 million proceeds received
from the 1995 Transactions, and the $209.4 million proceeds
received from the 1996 Transaction, to reduce the Company's
indebtedness. Interest expense was reduced at weighted average
interest rates of 4.9% in 1995 and 4.6% in 1996.
(f) To reflect the income tax effects of the pro forma adjustments at
statutory rates.
Ball Corporation and Subsidiaries
Pro Forma Condensed Consolidated Balance Sheet
As of June 30, 1996
(Unaudited)
Ball
Corporation Sale of Application Pro Forma
(dollars in millions) Historical Ball-Foster of Proceeds As Adjusted
ASSETS
Current Assets
Cash $ 20.2 $ 209.4 (a) $ (209.4)(b) $ 20.2
Accounts receivable, net 326.8 326.8
Inventories, net 338.0 338.0
Other current assets 85.3 (19.8) (a) 65.5
-------------- ---------------- --------------- -----------
Total current assets 770.3 189.6 (209.4) 750.5
Property, plant and equipment, net 697.0 697.0
Investments in affiliates 253.6 (167.4) (a) 86.2
Other long-term assets 145.0 (2.1) (a) 142.9
-------------- ---------------- --------------- -----------
$ 1,865.9 $ 20.1 $ (209.4) $ 1,676.6
============== ================ =============== ============
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities
Short-term debt and current
portion of long-term debt $ 266.9 $ (183.0)(b) $ 83.9
Accounts payable 242.0 242.0
Other current liabilities 134.8 134.8
-------------- ---------------- --------------- -----------
Total current liabilities 643.7 (183.0) 460.7
Long-term debt 431.7 (26.4) (b) 405.3
Other long-term liabilities 184.3 10.1 (a) 194.4
-------------- ---------------- --------------- -----------
Total noncurrent liabilities 616.0 10.1 (26.4) 599.7
Minority interests 9.5 9.5
Shareholders' equity 596.7 10.0 (a) 606.7
-------------- ---------------- --------------- -----------
$ 1,865.9 $ 20.1 $ (209.4) $ 1,676.6
============== ================ =============== ============
See accompanying notes to pro forma condensed consolidated balance sheet.
Ball Corporation and Subsidiaries
NOTES TO PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
(a) To reflect the sale of the Company's 42% equity
interest in Ball-Foster. The $10.0 million
addition to shareholders' equity represents the Company's
preliminary estimate of the after-tax gain to be
recognized from the sale.
(b) Reflects the application of the net cash proceeds
from the 1996 Transaction to reduce indebtedness at
June 30, 1996.
(c) Exhibits:
Exhibit 2: Purchase Agreement, dated as of September 13, 1996,
by and among BG Holdings I, Inc., BG Holdings II, Inc.,
Saint-Gobain Corporation, and Ball-Foster Glass Container Co.,
L.L.C..
Exhibit 99.1: Ball Corporation Press Release, issued September
16, 1996.
Exhibit 99.2: Ball Corporation Press Release, issued October
7, 1996.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
By:/s/ Donald C. Lewis
-------------------------------
Name: Donald C. Lewis
Title: General Counsel and
Assistant Corporate Secretary
Date: October 16, 1996
EXHIBIT INDEX
- -------------
Exhibit Description
- ------- -----------
2 Purchase Agreement, dated as of September
13, 1996, by and among BG Holdings I, Inc., BG
Holdings II, Inc., Saint-Gobain Corporation,
and Ball-Foster Glass Container Co., L.L.C..
99.1 Press release issued September 16, 1996.
99.2 Press release issued October 7, 1996.