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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1993
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to _____
___________________________________________________________
Ball Corporation
Commission File Number 1-7349
State of Indiana 35-0160610
345 South High Street, P.O. Box 2407
Muncie, Indiana 47307-0407
Registrant's telephone number,
including area code: (317) 747-6100
___________________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
------------------------------- -----------------------------
Common Stock, without par value New York Stock Exchange, Inc.
Midwest Stock Exchange, Inc.
Pacific Stock Exchange, Inc.
Securities registered pursuant to Section 12(g) of the Act: NONE
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES [ X ] NO [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [X]
The aggregate market value of voting stock held by non-affiliates of the
registrant was $737.0 million based upon the closing market price on March 1,
1994 (excluding Series B ESOP Convertible Preferred Stock of the registrant,
which series is not publicly traded and which has an aggregate liquidation
preference of $68.7 million).
Number of shares outstanding as of the latest practicable date.
Class Outstanding at March 1, 1994
- ---------------------------- ----------------------------
Common Stock, without par value 29,557,117
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DOCUMENTS INCORPORATED BY REFERENCE
1. Annual Report to Shareholders for the year ended December 31, 1993 to the
extent indicated in Parts I, II, and IV. Except as to information
specifically incorporated, the 1993 Annual Report to Shareholders is not to
be deemed filed as part of this Form 10-K report.
2. Proxy statement filed with the Commission dated March 21, 1994 to the
extent indicated in Part III.
PART I
Item 1. Business
Ball Corporation is an Indiana corporation organized in 1880 and incorporated
in 1922. Its principal executive offices are located at 345 South High Street,
Muncie, Indiana 47305-2326. The terms "Ball" and the "company" as used herein
refer to Ball Corporation and its consolidated subsidiaries.
Ball Corporation is a manufacturer of packaging products for use primarily in
the packaging of food and beverage products. The company also provides
aerospace and communications systems and professional services to the federal
sector and commercial customers.
The following sections of the 1993 Annual Report to Shareholders contain
financial and other information concerning company business developments and
operations, and are incorporated herein by reference: the financial statement
notes "Restructuring and Other Charges," "Spin-Off," "Business Segment
Information" and "Acquisitions" on pages 22 through 26; and, "Management's
Discussion and Analysis of Operations" on pages 9 through 15.
Recent Business Developments
Restructuring and Other Charges
In the company's major packaging markets, excess manufacturing capacity and
severe pricing pressures have been significant competitive challenges in recent
years. Moreover, reductions in federal defense expenditures and other attempts
to curb the federal budget deficit have resulted in excess capacity in the
aerospace and defense industry as the number of new contract bidding
opportunities has declined and existing programs have been curtailed or
delayed.
In order to adapt the company's manufacturing capabilities and administrative
organizations to meet foreseeable requirements of its packaging and aerospace
markets, management developed plans to restructure the company's businesses.
These plans involve plant closures to consolidate manufacturing activities into
fewer, more efficient facilities, principally in the glass and metal food
container businesses, and administrative consolidations in the glass, metal
packaging and aerospace and communications businesses. In addition to the
restructuring plans, decisions were made during the year to discontinue two
aerospace and communications segment product lines.
The financial impact of these plans was recognized through restructuring and
other charges recorded in the third and fourth quarters of 1993 in the
aggregate amount of $108.7 million ($66.3 million after tax or $2.31 per
share). Further information regarding the company's restructuring plans is
included in the Notes to Consolidated Financial Statements and Management's
Discussion and Analysis of Operations, which are incorporated herein by
reference.
Heekin Can, Inc.
On March 19, 1993, the company acquired Heekin Can, Inc. (Heekin), a
manufacturer of metal containers primarily for the food, pet food and aerosol
markets, with 1992 sales of $355 million. The acquisition, which has been
accounted for as a purchase business combination, was effected by issuance of
approximately 2.5 million shares of Ball Corporation common stock valued at
approximately $88.3 million, in exchange for 100 percent of Heekin's issued and
outstanding common stock. Further information regarding this transaction is
included in the Notes to Consolidated Financial Statements and Management's
Discussion and Analysis of Operations, which are incorporated herein by
reference.
Spin-Off
On April 2, 1993, the company completed the spin-off of seven diversified
businesses by means of a distribution of 100 percent of the common stock of
Alltrista, a then wholly-owned subsidiary, to holders of company common stock.
The distributed net assets of Alltrista included the following businesses: the
consumer products division; the zinc products division; the metal decorating
and services division; the industrial systems division; and the plastics
products businesses, consisting of Unimark plastics, industrial plastics and
plastic packaging. Following the distribution, Alltrista operated as an
independent, publicly-owned corporation. Accordingly, the net assets and
results of operations of the Alltrista businesses have been classified
separately from continuing operations in the accompanying consolidated
financial statements. Additional information regarding this transaction can be
found in the Notes to Consolidated Financial Statements, which are incorporated
herein by reference.
Other Information Pertaining to the Business of the Company
The company's continuing businesses are comprised of two segments: packaging,
and aerospace and communications.
Packaging Segment
The company's principal business segment develops, manufactures and sells rigid
packaging products, containers and materials primarily for use in packaging
food and beverage products. Most of the company's packaging segment products
are sold in highly competitive markets, primarily based on price, service,
quality and performance. The majority of the company's packaging sales are
made directly to major companies having leading market positions in packaged
food and beverage businesses. While a substantial portion of the company's
sales of packaging products is made to relatively few customers, the company
believes that its competitors exhibit similar customer concentrations.
The packaging business is capital intensive, requiring significant investments
in machinery and equipment, and profitability is sensitive to production
volumes and the cost of significant raw materials. Generally, profitability is
enhanced where greater unit volumes can be produced from a given investment in
productive equipment and where material and labor costs per unit of product can
be reduced.
Raw materials used by the company's packaging businesses consist principally of
metals (aluminum and steel), sand and soda ash and are generally available from
several sources. Currently, the company is not experiencing any shortage of
raw materials. The company's manufacturing facilities are dependent, in
varying degrees, upon the availability of process energy, such as propane,
natural gas, fuel oil, and electricity. While certain of these energy sources
may become increasingly in short supply, or subject to government allocation or
excise taxes, the company cannot predict the effects, if any, of such
occurrences on its future operations.
Research and development efforts in these businesses generally seek to improve
manufacturing efficiencies and lower unit costs, principally raw material
costs, by reducing the material content of containers while improving or
maintaining other physical properties such as material strength.
In the packaging segment, the company sells under supply contracts for minimum
(generally exceeded) or indeterminate quantities and, accordingly, is unable to
furnish backlog information.
The operations and products within this segment are discussed below:
Metal Packaging
Metal packaging is manufactured by the company's domestic metal beverage
container operation as well as its wholly owned subsidiaries, Ball Packaging
Products Canada, Inc. and Heekin Can, Inc., and is comprised primarily of two
product lines: two-piece beverage containers and two and three-piece food
containers.
Metal beverage containers
Metal beverage containers and ends represent the company's largest product line
accounting for approximately 44 percent of 1993 consolidated net sales.
Decorated two-piece aluminum beverage cans are produced by seven domestic
manufacturing facilities; ends are produced by two of these facilities. Three
manufacturing facilities operated by Ball Canada produce aluminum beverage
cans; ends are produced at one of these facilities as well as at one other
facility. The company believes it is the third largest commercial supplier of
aluminum beverage cans and ends to the combined U.S. and Canadian market in
1993 with an approximate 16 percent market share, based upon estimated 1993
total industry shipments. The company estimates that its two larger
competitors together represent less than 50 percent of estimated 1993 total
industry shipments for the U.S. and Canada, and that one slightly smaller
competitor had a market share estimated at 12 percent in 1993. This latter
competitor's recent purchase of the beverage can manufacturing operations of a
self-manufacturer likely will result in a future market share of approximately
16 percent, based on estimated 1993 shipments.
The U.S. and Canadian metal beverage container industry has experienced steady
demand growth at a compounded annual rate of approximately 5 percent over the
last decade, with much of that growth in the soft drink market segment. In
1992, the latest year for which data is available, metal containers accounted
for approximately 52 percent and 70 percent of estimated total U.S. packaged
soft drink and beer units shipped, respectively. In Canada, metal beverage
containers have captured significantly lower percentages of the packaged
beverage market than in the U.S., particularly in the packaged beer market, in
which the market share of metal containers has been hindered by trade barriers
within Canada. As a result of recent General Agreement on Tariffs and Trade
(GATT) rulings, there has been pressure to remove these trade barriers.
However, in May 1992, the Ontario government enacted an "environmental" tax
levy of 10 cents (Canadian) per can of beer sold in Ontario. This tax
discriminates against cans in favor of refillable glass bottles. Shipments of
cans to the Ontario beer industry declined sharply after this tax was enacted.
Beverage container industry production capacity in the U.S. and Canada has
exceeded demand in the last several years. As a result, selling prices have
declined as competitors attempted to maintain sufficient volumes to operate
their manufacturing facilities economically.
Metal beverage containers are sold primarily to brewers and fillers of
carbonated soft drinks, beer and other beverages, under long-term supply or
annual contracts. Sales to the company's largest customer, Anheuser-Busch
Companies, Inc., accounted for approximately 11 percent of consolidated 1993
sales, or approximately 25 percent of total metal beverage container sales.
Sales to all bottlers of Pepsi-Cola and Coca-Cola branded beverages comprised
approximately 22 percent of consolidated 1993 sales, or approximately 50
percent of total metal beverage container sales. Sales volume of metal
beverage cans and ends tends to be highest during the period between April and
September.
Metal food containers
Two-piece and three-piece steel food containers are manufactured by Ball Canada
and Heekin, and sold primarily to food processors in Canada and the Midwestern
United States. In 1993, metal food container sales comprised approximately 15
percent of consolidated sales. Sales to one customer represented more than 10
percent of this operation's 1993 sales. Sales volume of metal food containers
tends to be highest from June through October.
The company has one principal competitor in Canada and numerous competitors in
the U.S. food container market. With the acquisition of Heekin, the company
estimates that it was the third largest metal food container manufacturer with
an approximate 12 percent share of the North American market for metal food
containers, based on estimated 1993 industry shipments. A competitor's recent
acquisition of a major food processor's self-manufacturing operations likely
will result in that competitor becoming the third largest food can manufacturer
in the North American market with an approximate 25 percent market share.
In the food container industry, capacity significantly exceeds market demand
resulting in a highly price competitive market. During 1993, the company
completed consolidation of certain facilities in Canada. In conjunction with
the restructuring plans described above, the company has announced the closure
of its Augusta, Wisconsin plant and the sale of its Alsip, Illinois plant.
Other metal packaging
The company also manufactures containers for aerosol products and other
specialty goods, and sells flat sheet products, primarily to customers which
manufacture cans for their own use.
Glass Packaging
Ball-InCon Glass Packaging Corp., a wholly-owned subsidiary, manufactures a
diversified line of glass containers for sale primarily to processors, packers
and distributors of food and juice, wine and liquor products. Ball-InCon
currently operates fourteen glass container manufacturing facilities and a
glass mold manufacturing facility. One glass plant is owned by Madera Glass
Company, a 51 percent owned subsidiary of Ball-InCon. Ball-InCon's 1993 sales
of glass containers accounted for approximately 29 percent of consolidated
sales.
The company estimates that Ball-InCon is the third largest domestic producer of
commercial glass containers with an estimated 14 percent market share, based
upon 1993 sales dollars. Its two larger competitors together are estimated to
comprise in excess of 60 percent of the domestic market. However, Ball-InCon
has focused upon the food and juice, still wines and champagnes, and distilled
spirits market segments in which service, quality and performance are
discriminating competitive factors. Ball-InCon's share positions in these
markets are estimated to be approximately 26 percent, 17 percent and 7 percent,
respectively.
One of the primary markets segments served by Ball-InCon, food and juice,
experienced an 11.1 percent, 0.6 percent and 4.7 percent increase in units
shipped in 1993, 1992 and 1991, respectively. The total market for all types
of glass containers increased approximately 2.5 percent in 1993, but has
declined by an average of 0.6 percent per annum since 1982 as other packaging
materials, such as metal, plastic and flexible packaging, have captured a share
of products previously packaged in glass, e.g., beer, carbonated soft drinks
and specialty items, and due to a decline in alcoholic beverage consumption.
Declining long-term demand for glass packaging has resulted in manufacturers
reducing their production capacity in order to maintain a balance between
market demand and supply.
In 1992, three plants were closed in the industry: two by the company and one
by a competitor. Although several furnaces were idled in 1993, no plants were
closed in the industry. In 1994, the company announced the closing of its
Asheville, North Carolina glass container manufacturing plant.
The majority of Ball-InCon's sales are made directly to major companies having
leading market positions in packaged food and juice, and still wines and
champagnes. Sales to no one customer represented more than 10 percent of Ball-
InCon's 1993 sales.
Aerospace and Communications Segment
The aerospace and communications segment provides systems, products and
services to the aerospace and defense, and commercial telecommunications
markets. In 1993, approximately 10 percent of the segment's sales were made to
the commercial telecommunications industry and 10 percent of sales were made to
international customers.
The majority of the company's aerospace business involves work under relatively
short term contracts (generally one to five years) for the National Aeronautics
and Space Administration (NASA), the U.S. Department of Defense (DoD) and
foreign governments. Contracts funded by the various agencies of the Federal
government represented approximately 77 percent of this segment's sales in
1993. Overall, competition within the aerospace businesses is expected to
intensify. Declining defense spending may result in greater competition for
DoD contracts as the military market decreases, as well as greater competition
for NASA and other civilian aerospace contracts historically serviced by Ball,
as major defense contractors seek to enter those markets.
The segment also supplies commercial telecommunications equipment to customers
in satellite and ground communications, and navigation markets. Products are
supplied on a fixed price basis to original equipment manufacturers both
domestically and internationally. These markets are generally characterized as
having relatively high growth rates (10 percent annually) and the products
supplied typically have life cycles of 3 to 5 years.
The operations which comprise the aerospace and communications segment
presently are organized as two divisions: the aerospace systems division and
the telecommunications products division. Included in the aerospace systems
division are space systems, systems engineering services, and electro-optics
and cryogenics products. The telecommunications products division is comprised
of commercial and video products, advanced antenna systems, and time and
frequency standard devices. A description of the principal products and
services of the aerospace and communications segment follows:
Space systems and systems engineering services
These businesses provide complete space systems including satellites, ground
systems and launch vehicle integration to NASA, the DoD and to commercial and
international customers. The products and services include mission definition
and design; satellite design, manufacture and testing; payload and launch
vehicle definition and integration; and satellite ground station control
hardware and software.
Ball also provides a range of professional technical services to government
customers including systems engineering support; simulation studies, analysis
and prototype hardware; and hardware and software research and development
tasks for test and evaluation of government programs. Revenues derived from
services represented less than two percent of consolidated 1993 sales.
Electro-optics and cryogenics products
Primary products of the electro-optics business include: spacecraft guidance,
control instruments and sensors; defense subsystems for surveillance, warning,
target identification and attitude control in military and civilian space
applications; and scientific instruments used in various space and earth
science applications.
Primary products in the cryogenics business include: open cycle cryogenic
storage and cooling devices; mechanical refrigerators that provide cryogenic
cooling; and thermal electric coolers and radiative coolers, all of which are
used for the cooling of detectors and associated equipment for space science
and earth remote sensing applications. Open cycle cryogenic systems are also
provided to NASA for life support on the Space Shuttle and Space Station.
Telecommunication products
Ball provides advanced radio frequency transmission and reception antennae for
a variety of aerospace and defense platforms, including aircraft, missile,
spacecraft, ground mobile equipment and for ships. Antenna products are also
provided for commercial aircraft for satellite communication and collision
avoidance applications.
Precision rubidium and quartz oscillators and associated systems are also
produced for both commercial and government users, worldwide. These products
are used as time or frequency references with primary application in
navigation, land line telecommunication and cellular telephone systems.
Backlog
Backlog of the aerospace and communication segment was approximately $305
million at December 31, 1993 and $317 million at December 31, 1992 and consists
of the aggregate contract value of firm orders excluding amounts previously
recognized as revenue. The 1993 backlog includes approximately $182 million
which is expected to be billed during 1994 with the remainder expected to be
billed thereafter. Unfunded amounts included in backlog for certain firm
government orders which are subject to annual funding were approximately $172
million at December 31, 1993. Year-to-year comparisons of backlog are not
necessarily indicative of future operations.
The company's aerospace and communications segment has contracts with the U.S.
Government which have standard termination provisions. The Government retains
the right to terminate contracts at its convenience. However, if contracts are
terminated, the company is entitled to be reimbursed for allowable costs and
profits to the date of termination relating to authorized work performed to
such date. U.S. Government contracts are also subject to reduction or
modification in the event of changes in Government requirements or budgetary
constraints.
Patents
In the opinion of the company, none of its active patents is essential to the
successful operation of its business as a whole.
Research and Development
The note, "Research and Development," on page 35 of the 1993 Annual Report to
Shareholders contains information on company research and development activity
and is incorporated herein by reference.
Environment
Compliance with federal, state and local provisions which have been enacted or
adopted relating to protection of the environment has not had a material,
adverse effect upon capital expenditures, earnings or competitive position of
the company. As more fully described under Item 3. Legal Proceedings, the
Environmental Protection Agency (EPA) and/or various state environmental
agencies 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.
Legislation which would prohibit, tax or restrict the sale or use of certain
types of containers, and would require diversion of solid wastes such as
packaging materials from disposal in landfills, has been or may be introduced
in U.S. Congress and the Canadian Parliament, in state and Canadian provincial
legislatures and other legislative bodies. While such container legislation
has been adopted in a few jurisdictions, similar legislation has been defeated
in public referenda in several other states, in local elections and in many
state and local legislative sessions. The company anticipates that continuing
efforts will be made to consider and adopt such legislation in many
jurisdictions in the future. Such legislation has not had a significant effect
on the operations of the company. However, in view of the company's
substantial North American sales and investment in metal beverage container
manufacture as well as its investments in glass container packaging, such
legislation, if widely adopted, could have a material adverse effect on the
business of the company, as well as on the container manufacturing industry
generally.
Glass and aluminum containers are recyclable and significant amounts of used
containers are being recycled and diverted from the solid waste stream. In
1993, approximately 63 percent of aluminum beverage containers sold in the U.S.
were recycled, such that the estimated percentage of aluminum beverage can
production derived from recycled aluminum was in excess of 50 percent. Glass
containers produced by Ball-InCon in 1993 contained, on average, 19 percent
post-consumer recycled glass.
Employees
As of March 1994, Ball employed approximately 13,807 people.
Item 2. Properties
The company's properties are well maintained, are considered adequate and are
being utilized for their intended purposes.
The Corporate headquarters, glass packaging headquarters and certain research
and engineering facilities are located in Muncie, Indiana. The headquarters
for metal packaging operations are based in Westminster, Colorado. Also
located at Westminster is the Edmund F. Ball Technical Center, which serves as
a research and development facility primarily for the metal packaging
operations. Headquarters for the aerospace and communications group are
located in Broomfield, Colorado.
Information regarding the approximate size of the manufacturing facilities for
significant packaging operations, which are owned by the company except where
indicated otherwise, is provided below.
The Colorado-based operations of the aerospace and communications segment,
operate from a variety of company owned and leased facilities in Boulder,
Broomfield and Westminster, Colorado, which together aggregate approximately
1,074,000 square feet of office, laboratory, research and development,
engineering and test, and manufacturing space. Other aerospace and
communications operations are based in San Diego and Irvine, California.
Approximate
Floor Space in
Plant Location Square Feet
----------------------------------------- --------------
Metal packaging manufacturing facilities:
Red Deer, Alberta (leased) 52,000
Blytheville, Arkansas (leased) 10,000
Springdale, Arkansas 160,000
Richmond, British Columbia 204,000
Fairfield, California 145,000
Golden, Colorado 330,000
Tampa, Florida 139,000
Alsip, Illinois* 90,000
Columbus, Indiana 222,000
Saratoga Springs, New York 283,000
Cincinnati, Ohio 565,000
Columbus, Ohio 50,000
Findlay, Ohio 450,000
Burlington, Ontario 309,000
Hamilton, Ontario 347,000
Whitby, Ontario 195,000
Pittsburgh, Pennsylvania (leased) 81,000
Baie d'Urfe, Quebec 117,000
Chestnut Hill, Tennessee 70,000
Conroe, Texas 284,000
Williamsburg, Virginia 260,000
Weirton, West Virginia (leased) 87,000
Augusta, Wisconsin* 20,000
DeForest, Wisconsin 45,000
Glass packaging manufacturing facilities:
El Monte, California 456,000
Madera, California
(Madera Glass Company) 771,000
Dolton, Illinois 490,000
Lincoln, Illinois 290,000
Plainfield, Illinois 419,000
Dunkirk, Indiana (leased) 715,000
Ruston, Louisiana 430,000
Carteret, New Jersey 326,000
Asheville, North Carolina* 353,000
Henderson, North Carolina 760,000
Okmulgee, Oklahoma 374,000
Port Allegany, Pennsylvania 451,000
Laurens, South Carolina 627,000
Seattle, Washington 640,000
*The company has announced the pending closure or sale of these facilities.
Additional warehousing facilities are leased for use. The leased mould making
facility operated by Ball-InCon is located in Washington, Pennsylvania and has
approximately 56,000 square feet of manufacturing and office space.
Item 3. Legal Proceedings
As previously reported, the United States Environmental Protection Agency (EPA)
considers the company to be a Potentially Responsible Party (PRP) with respect
to the Lowry Landfill ("site") located east of Denver, Colorado. On June 12,
1992, the Company was served with a lawsuit filed by the City and County of
Denver and Waste Management of Colorado, Inc., seeking contribution from the
company and approximately 38 other companies. The Company filed its answer
denying the allegations of the Complaint. On July 8, 1992, the company was
served with a third party complaint filed by S. W. Shattuck Chemical Company,
Inc., seeking contribution from the company and other companies for the costs
associated with cleaning up the Lowry Landfill. The company denied the
allegations of the complaint.
On July 31, 1992, the company entered into a settlement and indemnification
agreement with the City and County of Denver ("Denver"), Chemical Waste
Management, Inc., and Waste Management of Colorado, Inc., pursuant to which
Chemical Waste Management, Inc., and Waste Management of Colorado, Inc.
(collectively "Waste"), have dismissed their lawsuit against the company and
will defend, indemnify, and hold harmless the company from claims and lawsuits
brought by governmental agencies and other parties relating to actions seeking
contributions or remedial costs from the company for the cleanup of the site.
Several other companies which are defendants in the above-referenced lawsuits
have already entered into the settlement and indemnification agreement with
Denver and Waste. Waste Management, Inc., has guaranteed the obligations of
Chemical Waste Management, Inc., and Waste Management of Colorado, Inc. Waste
and Denver may seek additional payments from the company if the response costs
related to the site exceed $319 million. The company might also be responsible
for payments (calculated in 1992 dollars) for any additional wastes disposed of
by the company at the site, which are identified after the execution of the
settlement agreement. The company's information at this time does not indicate
that this matter will have a material, adverse effect upon its financial
condition.
As previously reported, the EPA issued in August 1988, an administrative order
to 12 companies, including the company, pursuant to Section 106A of the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended (CERCLA), ordering them to remove certain abandoned drums and
surface waste at the AERR CO site located in Jefferson County, Colorado. AERR
CO, which used the site to recycle wastes, filed a petition with the United
States Bankruptcy Court in Denver, Colorado, seeking protection from its
creditors. Several of the companies, including the company, are subject to the
EPA's order, and have cleaned up the site. The companies negotiated with the
EPA with regard to its demand for the payment of oversight costs. The
companies and the EPA entered into a settlement agreement on or about January
24, 1994, pursuant to which this matter was settled by payment of $488,867.41
by the companies. The company's portion of this payment was $28,594.82. The
company's information at this time does not indicate that this matter will have
a material, adverse effect upon its financial condition.
As previously reported, in September 1989, the company received a federal grand
jury subpoena to produce documents relating to financial transactions and
results of operations of the Ball Aerospace Systems Group Colorado operations
since 1985. A supplemental subpoena was served in January 1990 requesting
additional documents. The company has complied fully with the subpoenas. The
Assistant United States Attorney has refused to disclose the specific nature of
the investigation, but has indicated informally that the company is not a
target of the investigation. The company does not believe that this matter
will have a material, adverse effect upon its financial condition.
As previously reported, in April 1990, the company received from the EPA,
Region V, Chicago, Illinois, a general notice letter and information request
regarding the NL Industries/Taracorp Superfund site located at Granite City,
Illinois. The EPA alleges that the company, through its former Zinc Products
Division (formerly known as Ball Metal and Chemical Division) located in
Greeneville, Tennessee, may be a PRP with respect to the NL Industries/Taracorp
site. The EPA requested that the company provide the EPA with any and all
information with respect to any business conducted with Taracorp or NL
Industries between 1977 and 1983. The company has responded to the EPA's
request for information. The company is currently part of a group of companies
who are organized to negotiate a de minimis settlement with the EPA. The
company's information at this time does not indicate that this matter will have
a material, adverse effect upon its financial condition.
As previously reported, in April 1987, the EPA notified the company and its
wholly owned subsidiary that they may be PRPs in connection with the alleged
disposal of waste at the American Chemical Services, Inc. (ACS) site located in
Griffith, Indiana. In the fall of 1987, the company, as part of a group of
companies, filed a lawsuit in the United States District Court for the Northern
District of Indiana against the operators of the facility, ACS, and the Town of
Griffith, Indiana, seeking a declaration of landowner's liability under CERCLA
and seeking contribution from the landowners for the costs incurred by the
companies of performing a remedial investigation and feasibility study. In
September of 1990, ACS filed a counterclaim against the companies, including
the company. ACS sought a declaratory judgment that the companies are
responsible for a proportionate share of the liability for costs associated
with the cleanup. The company has denied the allegations of the counterclaim.
This lawsuit has now been settled. Based upon the information available to the
company at this time, the company does not believe that this matter will have a
material, adverse effect upon its financial condition.
As previously reported, on or about August 28, 1990, the company received a
notice from the Department of Environmental Resources, State of Pennsylvania
(DER), that the company may have been responsible for disposing of waste at the
Industrial Solvents and Chemical Company site located in York County,
Pennsylvania. The company is cooperating with several hundred other companies
and the DER to resolve this matter. In December 1993, the company entered into
a De Minimis Settlement Agreement with certain other companies who have agreed
to indemnify the company with respect to claims arising out of the alleged
disposal of hazardous waste at the site in consideration of the company paying
$11,031.70 to the indemnifying companies. Based upon information available to
the company at this time, the company believes that this matter will not have a
material, adverse effect upon its financial condition.
As previously reported, the company has been notified by Chrysler Corporation
(Chrysler) that Chrysler, Ford Motor Company, and General Motors Corporation
have been named in a lawsuit filed in the U.S. District Court in Reno, Nevada,
by Jerome Lemelson, alleging infringement of three of his vision inspection
system patents used by defendants. One or more of the vision inspection
systems used by the defendants may have been supplied by the company's former
Industrial Systems Division or its predecessors. The suit seeks injunctive
relief and unspecified damages. Chrysler has notified the Industrial Systems
Division that the Division may have indemnification responsibilities to
Chrysler. The company has responded to Chrysler that it appears at this time
that the systems sold to Chrysler by the company either were not covered by the
identified patents or were sold to Chrysler before the patents were issued.
Based on that information, it is not expected that any obligation to Chrysler
because of the patents referred to will have a material, adverse effect on the
financial condition of the company.
As previously reported, in July 1992, DeSoto, Inc., and other plaintiffs sued
the company and other defendants claiming contribution from the defendants,
including the company, through its former Plastics Division, for response costs
incurred in connection with the Industrial Waste Control Landfill Site located
in Fort Smith, Arkansas. The plaintiffs allege that the defendants are jointly
and severally liable for response costs in excess of $9 million. The company
has denied the allegations contained in the complaint, on the basis, primarily,
that the Division did not dispose of hazardous waste at the site. In March
1993, the plaintiffs agreed to dismiss their complaint against the company.
The company's information at this time indicates that this matter will not have
a material, adverse effect on its financial condition.
As previously reported, in September 1992, the company, as a fourth-party
defendant, was served with a lawsuit filed by Allied Signal and certain other
fourth-party plaintiffs seeking the recovery of certain response costs and
contribution under CERCLA with respect to the alleged disposal by its former
Metal Decorating & Service Division of hazardous waste at the Cross Brothers
Site in Kankakee, Illinois, during the years 1961 to 1980. Also in September
1992, the company was sued by another defendant, Krueger Ringier, Inc. In
October 1992, the Illinois Environmental Protection Agency filed an action to
join the company as a Defendant seeking to recover the State's costs in
removing waste from the Cross Brothers Site. The company has denied the
allegations of the Complaints and will defend these matters, but is unable at
this time to predict the outcome of the litigation. The company and certain
other companies have entered into a Consent Decree with the EPA pursuant to
which the EPA will receive approximately $2.9 million dollars and provide the
companies with contribution protection and a covenant not to sue. Ball's share
of the settlement amount is $858,493.60. The Court has set a hearing on the
Consent Decree for April 11, 1994. The limited information that the company
has at this time, however, does not indicate that this matter is likely to have
a material, adverse effect on the financial condition of the company.
As previously reported, on October 12, 1992, the company received notice that
it may be a potentially responsible party for the cleanup of the Aqua-Tech
Environmental site located in Greer, South Carolina. The company is
investigating this matter. Based upon the limited information that the company
has at this time, the company does not believe this matter will have a
material, adverse effect upon its financial condition.
As previously reported, on April 24, 1992, the company was notified by the
Muncie Race Track Steering Committee that the company, through its former
Consumer Products Division and former Zinc Products Division, may be a PRP with
respect to waste disposed at the Muncie Race Track Site located in Delaware
County, Indiana. The company is currently attempting to identify additional
information regarding this matter. The Steering Committee has requested that
the company pay two percent of the cleanup costs which are estimated at this
time to be $10 million. The company has declined to participate in the PRP
group because the company's records do not indicate the company contributed
hazardous waste to the site. The company has also declined to participate in
funding an allocation study to be conducted by a consulting company. Based
upon the information available to the company at this time, the company does
not believe that this matter will have a material, adverse effect upon the
company.
As previously reported, the company was notified on June 19, 1989, that the EPA
has designated the company and numerous other companies as PRPs responsible for
the cleanup of certain hazardous wastes that have been released at the
Spectron, Inc., site located in Elkton, Maryland. In December 1989, the
company, along with other companies whose alleged hazardous waste contributions
to the Spectron, Inc., site were considered to be de minimis, entered into a
settlement agreement with the EPA. The PRPs have agreed with the EPA to
perform a groundwater study of the site, which study was ongoing during 1992.
The company's information at this time does not indicate that this matter will
have a material, adverse effect upon its financial condition.
As previously reported, the company has received information that it has been
named a PRP with respect to the Solvents Recovery Site located in Southington,
Connecticut. According to the information received by the company, it is
alleged that the company contributed approximately .08816% of the waste
contributed to the site on a volumetric basis. The company is attempting to
identify additional information regarding this matter. The company's
information at this time does not indicate that this matter will have a
material, adverse effect upon its financial condition.
On or about June 14, 1990, the El Monte plant of Ball-InCon Glass Packaging
Corp., a wholly-owned subsidiary of the Corporation, received a general
notification letter and information request from EPA, Region IX, notifying
Ball-InCon that it may have potential liability as defined in Section 107(a) of
the Comprehensive Environmental Response, Compensation and Liability Act
(CERCLA) incurred with respect to the San Gabriel Valley areas 1-4 Superfund
sites located in Los Angeles County, California. The EPA requested certain
information from Ball-InCon, and Ball-InCon has responded. After a period of
inactivity, the federal and state governments are proceeding to complete the
remedial investigation study which will lead to a proposed cleanup. In this
regard, the California Regional Water Quality Control Board has requested El
Monte area industries to commence resampling groundwater monitoring wells. The
company received notice from the City of El Monte that, pursuant to a proposed
city economic redevelopment plan, the City proposes to commence groundwater
cleanup by a pump & treat remediation process. The company submitted comments
to the City that, while Ball-InCon approved the expenditures of public monies
for groundwater remediation, as opposed to assessing civil liability against
individual industries, Ball-InCon requests further scientific substantiation
that treatment at a city water well adjacent to the El Monte plant would not
increase concentration of groundwater contamination under the plant. A hearing
was held January 12, 1994, by the El Monte Community Redevelopment Agency to
discuss various methods of public financing available to fund the City's
proposed water treatment project. The company is awaiting a report from that
hearing. Based on the information, or lack thereof, available at the present
time, the company is unable to express an opinion as to the actual exposure of
the company for this matter.
Prior to the acquisition on April 19, 1991, of the lenders' position in the
term debt and 100 percent ownership of Ball Canada, the company had owned
indirectly 50 percent of Ball Canada through a joint venture holding company
owned equally with Onex Corporation (Onex). The 1988 Joint Venture Agreement
had included a provision under which Onex, beginning in late 1993, could "put"
to the company all of its equity in the holding company at a price based upon
the holding company's fair value. Onex has since claimed that its "put" option
entitled it to a minimum value founded on Onex's original investment of
approximately $22.0 million. On December 9, 1993, Onex served notice on the
company that Onex was exercising its alleged right under the Joint Venture
Agreement to require the company to purchase all of the holding company shares
owned or controlled by Onex, directly or indirectly, for an amount including
"approximately $40 million" in respect of the Class A-2 Preference Shares owned
by Onex in the holding company. Such "$40 million" is expressed in Canadian
dollars and would represent approximately $30 million at year-end exchange
rates. The company's position is that it has no obligation to purchase any
shares from Onex or to pay Onex any amount for such shares, since, among other
things, the Joint Venture Agreement, which included the "put" option, is
terminated. On January 24, 1994, the Ontario Court (General Division
Commercial List) ordered that Onex's August 1993 Application for Rectification
to reform the Joint Venture Agreement document be stayed, and the Court
referred the parties to arbitration on the matter. Under date of January 31,
1994, Onex provided a Notice of Appeal of the Court's order. The company is
opposing the appeal but is unable to predict its outcome. The company believes
that the matter will result likely in arbitration or possibly in other
litigation instituted against it by Onex. The company believes that it has
meritorious defenses against Onex's claims, although, because of the
uncertainties inherent in the arbitration or litigation process, it is unable
to predict the outcome of any such arbitration or other litigation.
On March 8, 1994, the company and its wholly owned subsidiary, Heekin Can,
Inc., were served with a lawsuit by Harlan Yoder, an employee of Heekin Can,
Inc., and his spouse seeking $6,500,000 jointly and severally as the result of
an alleged injury to Mr. Yoder on or about April 26, 1993. Mr. Yoder sustained
a crushing injury to his left hand while operating machinery. The company and
Heekin Can, Inc., deny the material allegation of the complaint filed by the
Yoders. Based upon the information available to the company at this time, the
company does not believe that this matter will have a material adverse effect
upon its financial condition.
Item 4. Submission of Matters to Vote of Security Holders
There were no matters submitted to the security holders during the fourth
quarter of 1993.
Part II
Item 5. Market for the Registrant's Common Stock and Related Stockholder
Matters
Ball Corporation common stock (BLL) is traded on the New York, Midwest and
Pacific Stock Exchanges. There were 9,486 common shareholders of record on
March 1, 1994.
Other information required by Item 5 appears under the caption, "Quarterly
Stock Prices and Dividends," in the section titled, "Items of Interest to
Shareholders," on page 40 of the 1993 Annual Report to Shareholders and is
incorporated herein by reference.
Item 6. Selected Financial Data
The information required by Item 6 for the five years ended December 31, 1993
appearing in the section titled, "Seven Year Review of Selected Financial
Data," on page 37 of the 1993 Annual Report to Shareholders is incorporated
herein by reference.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Management's Discussion and Analysis of Operations, on pages 9 through 15 of
the 1993 Annual Report to Shareholders is incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data
The consolidated financial statements and notes thereto, appearing on pages 17
through 36 of the 1993 Annual Report to Shareholders, together with the report
thereon of Price Waterhouse, dated January 25, 1994, appearing on page 16 of
the 1993 Annual Report to Shareholders, are incorporated herein by reference.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
There were no matters required to be reported under this item.
Part III
Item 10. Directors and Executive Officers of the Registrant
The executive officers of the company are as follows:
1. Delmont A. Davis, 58, President and Chief Executive Officer, since April
1991; President and Chief Operating Officer, 1989-1991; Executive Vice
President, Packaging Products, 1988-1989; Executive Vice President, Metal
Containers, 1987-1988; Group Vice President, Metal Containers, 1976-1987.
2. William A. Lincoln, 52, Executive Vice President, Metal Container
Operations, since March 1993; Executive Vice President, Metal Packaging
Operations, 1992-1993; Group Vice President, 1991-1992; President and
Chief Executive Officer, Ball Packaging Products Canada, Inc., since 1988;
Vice President and Group Executive, Research, Development and Engineering,
Packaging Products, 1988; Vice President, Engineering and Development,
Metal Container Division, 1978-1988.
3. Duane E. Emerson, 56, Senior Vice President, Administration, since April
1985; Vice President, Administration, 1980-1985.
4. R. David Hoover, 48, Senior Vice President and Chief Financial Officer,
since August 1992; Vice President and Treasurer, 1988-1992; Assistant
Treasurer, 1987-1988; Vice President, Finance and Administration,
Technical Products, 1985-1987; Vice President, Finance and Administration,
Management Services Division, 1983-1985.
5. George A. Sissel, 57, Senior Vice President, Corporate Affairs; Corporate
Secretary and General Counsel, since January 1993; Senior Vice President,
Corporate Secretary and General Counsel, 1987-1992; Vice President,
Corporate Secretary and General Counsel, 1981-1987.
6. John A. Haas, 57, Group Vice President; President, Metal Food Container
and Specialty Products Group, since March 1993; President and Chief
Executive Officer, Heekin Can, Inc., since 1988.
7. Donovan B. Hicks, 56, Group Vice President; President, Aerospace and
Communications Group, since January 1988; Group Vice President, Technical
Products, 1980-1988; President, Ball Brothers Research
Corporation/Division, 1978-1980.
8. H. Ray Looney, 58, Group Vice President, since January 1992; President and
Chief Executive Officer, Ball-InCon Glass Packaging Corp., since 1987.
9. David B. Sheldon, 52, Group Vice President; President, Metal Beverage
Container Group; Group Vice President, Packaging Products, 1992-1993; Vice
President and Group Executive, Sales and Marketing, Packaging Products
Group, 1988-1992; Vice President and Group Executive, Sales and Marketing,
Metal Container Group, 1985-1988.
10. Richard E. Durbin, 52, Vice President, Information Services, since April
1985; Corporate Director, Information Services, 1983-1985; Corporate
Director, Data Processing, 1981-1983.
11. Larry T. Gillam, 48, Vice President, Corporate Facilities and Support
Services, since January 1993; Corporate Director, Colorado Facilities and
Support Services, 1990-1992; Vice President, Operations Support Services,
Aerospace Systems, 1989; Vice President, Human Resource Management,
Aerospace Systems, 1985-1989
12. Albert R. Schlesinger, 52, Vice President and Controller, since January
1987; Assistant Controller, 1976-1986.
13. Raymond J. Seabrook, 43, Vice President and Treasurer, since August 1992;
Senior Vice President and Chief Financial Officer, Ball Packaging
Products, Canada, Inc., 1988-1992.
14. Harold L. Sohn, 48, Vice President, Corporate Relations, since March 1993;
Director, Industry Affairs, Packaging Products, 1988-1993.
15. Charles E. Wild, 65, Vice President, Corporate Compliance, since January
1993; Vice President, Human Resources, 1985-1992; Corporate Director,
Employee Relations, 1979-1985.
16. Elizabeth A. Overmyer, 54, Assistant Corporate Secretary, since April
1981; Administrator, Office of the Corporate Secretary, 1979-1981.
17. Donald C. Lewis, 51, Assistant Corporate Secretary and Associate General
Counsel, since May 1990; Associate General Counsel 1983-1990; Assistant
General Counsel, 1980-1983.
Other information required by Item 10 appearing under the caption, "Director
Nominees and Continuing Directors," on pages 3 through 5 of the company's proxy
statement filed pursuant to Regulation 14A dated March 21, 1994 is incorporated
herein by reference.
Item 11. Executive Compensation
The information required by Item 11 appearing under the caption, "Executive
Compensation," on pages 7 through 13 of the company's proxy statement filed
pursuant to Regulation 14A dated March 21, 1994 is incorporated herein by
reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The information required by Item 12 appearing under the caption, "Voting
Securities and Principal Shareholders," on pages 1 and 2 of the company's proxy
statement filed pursuant to Regulation 14A dated March 21, 1994 is incorporated
herein by reference.
Item 13. Certain Relationships and Related Transactions
The information required by Item 13 appearing under the caption, "Relationship
with Independent Public Accountants and Certain Other Relationships and Related
Transactions," on page 14 of the company's proxy statement filed pursuant to
Regulation 14A dated March 21, 1994 is incorporated herein by reference.
Part IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a) List of documents filed as part of this report.
(1) Financial Statements:
The following documents are filed as part of this report and incorporated
herein by reference from the indicated pages of the 1993 Annual Report to
Shareholders.
Page(s) in
Annual Report
-------------
Consolidated statement of (loss)
income - Years ended Decem-
ber 31, 1993, 1992 and 1991 17
Consolidated balance sheet -
December 31, 1993 and 1992 18
Consolidated statement of
cash flows - Years ended
December 31, 1993, 1992
and 1991 19
Consolidated statement of
changes in shareholders'
equity - Years ended
December 31, 1993, 1992
and 1991 20
Notes to consolidated
financial statements 21-36
Report of independent
accountants 16
(2) Financial Statement Schedules:
Report of Independent Accountants on Financial Statement Schedules
Consent of Independent Accountants
Schedule V Property, Plant and Equipment
Schedule VI Accumulated Depreciation of Property, Plant and Equipment
Schedule IX Short-Term Borrowings
Schedule X Supplementary Income Statement Information
The financial statement schedules should be read in conjunction with the
consolidated financial statements in the 1993 Annual Report to
Shareholders. Schedules not included in this additional financial data
have been omitted because they are not applicable or the required
information is shown in the consolidated financial statements or notes
thereto.
Separate financial statements of 50 percent or less owned persons are not
required to be filed since no such person meets any of the conditions set
forth in Regulation S-X, Rule 1-02(v), substituting 20 percent for 10
percent in the tests used therein to determine a significant subsidiary.
(3) Exhibits:
See the Index to Exhibits which appears at the end of this document and
which is incorporated by reference herein.
(b) Reports on Form 8-K
A Current Report on Form 8-K, dated October 12, 1993, filed October 15,
1993, which includes the text of a company press release indicating
management's expectation that third quarter 1993 earnings would be less
than 1992 third quarter earnings and analysts' current estimates.
A Current Report on Form 8-K, dated October 20, 1993, filed October 22,
1993, which includes the text of a company press release reporting
financial results for the third quarter ended October 3, 1993.
A Current Report on Form 8-K, dated December 9, 1993, filed December 13,
1993, updating the legal proceeding reported under Item 1. of the
Quarterly Report on Form 10-Q for the period ended October 3, 1993 in the
matter of Onex Corporation.
A Current Report on Form 8-K, dated January 26, 1994, filed January 27,
1994, which includes the text of a company press release reporting
financial results for the calendar year 1993.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
BALL CORPORATION
(Registrant)
By: \s\ Delmont A. Davis
--------------------
Delmont A. Davis, President and
Chief Executive Officer
March 29, 1994
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the registrant and
in the capacities and on the dates indicated below.
(1) Principal Executive Officer:
\s\ Delmont A. Davis
---------------------
Delmont A. Davis, President and Chief Executive Officer
March 29, 1994
(2) Principal Financial Accounting Officer:
\s\ R. David Hoover
--------------------
R. David Hoover, Senior Vice President and Chief Financial Officer
March 29, 1994
(3) Controller:
\s\ Albert R. Schlesinger
--------------------------
Albert R. Schlesinger, Vice President and Controller
March 29, 1994
(4) A Majority of the Board of Directors:
\s\ Delmont A. Davis*
----------------------
President and Chief Executive Officer and Director
Delmont A. Davis
March 29, 1994
\s\ Howard M. Dean*
-------------------
Director
Howard M. Dean
March 29, 1994
\s\ Richard M. Gillett*
------------------------
Director
Richard M. Gillett
March 29, 1994
\s\ John T. Hackett*
---------------------
Director
John T. Hackett
March 29, 1994
\s\ John F. Lehman*
--------------------
Director
John F. Lehman
March 29, 1994
\s\ Alvin Owsley*
------------------
Chairman of the Board
Alvin Owsley
March 29, 1994
\s\ Delbert C. Staley*
-----------------------
Director
Delbert C. Staley
March 29, 1994
\s\ W. Thomas Stephens*
------------------------
Director
W. Thomas Stephens
March 29, 1994
\s\ William P. Stiritz*
------------------------
Director
William P. Stiritz
March 29, 1994
* By George A. Sissel as Attorney-in-Fact pursuant to a Limited Power of
Attorney executed by the directors listed above, which Power of Attorney
has been filed with the Securities and Exchange Commission.
By: \s\ George A. Sissel
--------------------
George A. Sissel, As Attorney-In-Fact
March 29, 1994
Ball Corporation and Subsidiaries
Annual Report on Form 10-K
For the year ended December 31, 1993
INDEX TO FINANCIAL STATEMENT SCHEDULES
Report of Independent Accountants on Financial Statement Schedules
Consent of Independent Accountants
Schedule V Property, Plant and Equipment
Schedule VI Accumulated Depreciation: Property, Plant and Equipment
Schedule IX Short-Term Borrowings
Schedule X Supplementary Income Statement Information
The financial statement schedules should be read in conjunction with the
consolidated financial statements in the 1993 Annual Report to
Shareholders. Schedules not included in this additional financial data
have been omitted because they are not applicable or the required
information is shown in the consolidated financial statements or notes
thereto.
Separate financial statements of 50 percent or less owned persons are not
required to be filed since no such person meets any of the conditions set
forth in Regulation S-X, Rule 1-02(v), substituting 20 percent for 10
percent in the tests used therein to determine a significant subsidiary.
Report of Independent Accountants on
Financial Statement Schedules
To the Board of Directors
Ball Corporation
Our audits of the consolidated financial statements referred to in our report
dated January 25, 1994, appearing on page 16 of the 1993 Annual Report to
Shareholders of Ball Corporation (which report and consolidated financial
statements are incorporated by reference in this Annual Report on Form 10-K)
also included an audit of the Financial Statement Schedules listed in Item
14(a)(2) of this Form 10-K. In our opinion, these Financial Statement
Schedules present fairly, in all material respects, the information set forth
therein when read in conjunction with the related consolidated financial
statements.
/s/PRICE WATERHOUSE
Indianapolis, Indiana
January 25, 1994
Consent of Independent Accountants
We hereby consent to the incorporation by reference in each Prospectus
constituting part of each Post-Effective Amendment No. 1 on Form S-3 to Form S-
16 Registration Statement (Registration Nos. 2-62247 and 2-65638) and in each
Prospectus constituting part of each Form S-3 Registration Statement or Post-
Effective Amendment (Registration Nos. 33-3027, 33-16674, 33-19035 and 33-
40196) and in each Form S-8 Registration Statement or Post-Effective Amendment
(Registration Nos. 33-21506, 33-40199, 33-37548, 33-28064, 33-15639, 33-61986
and 33-51121) of Ball Corporation of our report dated January 25, 1994
appearing on page 16 of the 1993 Annual Report to Shareholders which is
incorporated by reference in this Annual Report on Form 10-K. We also consent
to the incorporation by reference of our report on the Financial Statement
Schedules which appears above.
/s/PRICE WATERHOUSE
Indianapolis, Indiana
March 29, 1994
Schedule V
Ball Corporation and Subsidiaries
Property, Plant and Equipment
Reclassifications,
Balance at retirements, Balance
beginning Additions sales and at end
of period at cost transfers of period
- -------------------------------------------------------------------------------
(Dollars in millions)
1993
Land $ 33.7 $ - $ (0.4) $ 33.3
Buildings 275.1 6.4 19.8 301.3
Machinery and equipment 933.4 134.5 46.8 1,114.7
--------- ------- ------- ---------
$1,242.2 $ 140.9 $ 66.2(1)(2) $ 1,449.3
========= ======= ======= =========
1992
Land $ 33.9 $ 0.1 $ (0.3) $ 33.7
Buildings 268.1 4.2 2.8 275.1
Machinery and equipment 837.8 105.9 (10.3) 933.4
--------- ------- ------- ---------
$1,139.8 $ 110.2 $ (7.8)(3) $ 1,242.2
========= ======= ======= =========
1991
Land $ 23.8 $ - $ 10.1 $ 33.9
Buildings 222.0 5.3 40.8 268.1
Machinery and equipment 655.1 82.0 100.7 837.8
--------- ------- ------- ---------
$ 900.9 $ 87.3 $151.6(4) $ 1,139.8
========= ======= ======= =========
-------------------------
(1) Includes $121.7 million of Heekin Can, Inc. assets acquired March
19, 1993.
(2) Includes $29.4 million of asset write-offs and writedowns recorded
in conjunction with restructuring and other charges provided in
1993.
(3) Includes $34.1 million of assets acquired from Kerr Group, Inc. on
February 28, 1992.
(4) Includes $175.1 million of Ball Packaging Products Canada, Inc.
assets acquired April 19, 1991.
Schedule VI
Ball Corporation and Subsidiaries
Accumulated Depreciation of Property, Plant and Equipment
Reclassifications,
Balance at retirements, Balance
beginning Additions sales and at end
of period at cost transfers of period
- -------------------------------------------------------------------------------
(Dollars in millions)
1993
Buildings $ 72.0 $ 12.6 $ (1.6) $ 83.0
Machinery and equipment 460.3 97.4 (14.1) 543.6
--------- ------- ------- ---------
$ 532.3 $ 110.0(1) $(15.7) $ 626.6
========= ======= ======= =========
1992
Buildings $ 62.2 $ 11.3 $ (1.5) $ 72.0
Machinery and equipment 393.5 87.4 (20.6) 460.3
--------- ------- ------- ---------
$ 455.7 $ 98.7 $(22.1) $ 532.3
========= ======= ======= =========
1991
Buildings $ 49.4 $ 10.0 $ 2.8 $ 62.2
Machinery and equipment 311.6 78.4 3.5 393.5
--------- ------- ------- ---------
$ 361.0 $ 88.4 $ 6.3(2) $ 455.7
========= ======= ======= =========
-------------------------
(1) Includes $12.7 million related to assets of Heekin Can, Inc.
acquired March 19, 1993.
(2) Includes $25.6 million related to assets of Ball Packaging
Products Canada, Inc. assets acquired April 19, 1991.
Schedule IX
Ball Corporation and Subsidiaries
Short-Term Borrowings
Weighted Maximum Average Weighted
Average Amount Amount Average
Balance Interest Outstanding Outstanding Interest
at Rate at During the During the Rate During
Dec. 31, Dec. 31, Year(2) Year(3) the Year(4)
- -------------------------------------------------------------------------------------------
(Dollars in millions)
1993
Notes payable to banks (1) $ 35.7 3.5% $148.0 $ 113.1 3.3%
Commercial paper 38.9 4.2% 62.1 47.2 5.1%
1992
Notes payable to banks (1) $ 12.5 3.4% $164.9 $ 141.7 5.0%
Commercial paper 37.9 8.2% 94.1 49.5 6.4%
1991
Notes payable to banks (1) 128.5 7.6% 131.7 102.4 6.4%
-------------------------
(1) Short-term borrowings are under credit facilities with domestic
and foreign banks.
(2) Maximum aggregate amount of short-term borrowings outstanding at
any fiscal month end.
(3) The average amount outstanding during the year represents an
average daily amount outstanding computed by weighting the daily
borrowings by the number of days outstanding then dividing by 365.
(4) The weighted average interest rate was computed by dividing the
actual interest expense by the average amount outstanding during
the year.
Schedule X
Ball Corporation and Subsidiaries
Supplementary Income Statement Information
(Dollars in millions)
Charged to costs and expenses
Year ended December 31,
------------------------------
1993 1992 1991
------ ------ ------
Maintenance and Repairs $80.8 $72.6 $63.9
Other specified items were omitted from this schedule because the
required information is included within the consolidated financial
statements or notes thereto, or the items did not exceed 1% of total
sales.
Ball Corporation and Subsidiaries
Annual Report on Form 10-K
For the year ended December 31, 1993
Index to Exhibits
Exhibit
Number Description of Exhibit
- ------- ---------------------------------------------
3.(i) Amended Articles of Incorporation as of November 26, 1990 (filed by
incorporation by reference to the Current Report on Form 8-K dated
November 30, 1990) filed December 13, 1990.
3.(ii) Bylaws of Ball Corporation as amended January 25, 1994. (Filed herewith.)
4.1 Ball Corporation and its subsidiaries have no long-term debt instruments
in which the total amount of securities authorized under any instrument
exceeds 10% of the total assets of the registrant and its subsidiaries on
a consolidated basis. Ball Corporation hereby agrees to furnish a copy of
any long-term debt instruments upon the request of the Commission.
4.2 Dividend distribution payable to shareholders of record on August 4, 1986,
of one preferred stock purchase right for each outstanding share of common
stock under the Rights Agreement dated as of July 22, 1986, and as amended
by the Amended and Restated Rights Agreement dated as of January 24, 1990
and the First Amendment, dated as of July 27, 1990, between the
corporation and The First National Bank of Chicago (filed by incorporation
by reference to the Form 8-A Registration Statement, No. 1-7349, dated
July 25, 1986, as amended by Form 8, Amendment No. 1, dated January 24,
1990 and by Form 8, Amendment No. 2, dated July 27, 1990) filed August 2,
1990.
10.1 1975 Stock Option Plan as amended, 1980 Stock Option and Stock
Appreciation Rights Plan, as amended, 1983 Stock Option and Stock
Appreciation Rights Plan (filed by incorporation by reference to the Form
S-8 Registration Statement, No. 2-82925) filed April 27, 1983.
10.2 Restricted Stock Plan (filed by incorporation by reference to the Form S-8
Registration Statement, No. 2-61252) filed May 2, 1978.
10.3 1988 Restricted Stock Plan and 1988 Stock Option and Stock Appreciation
Rights Plan (filed by incorporation by reference to the Form S-8
Registration Statement, No. 33-21506) filed April 27, 1988.
10.4 Ball Corporation Deferred Incentive Compensation Plan (filed by
incorporation by reference to the Annual Report on Form 10-K for the year
ended December 31, 1987) filed March 25, 1988.
10.5 Ball Corporation 1986 Deferred Compensation Plan (filed by incorporation
by reference to the Annual Report on Form 10-K for the year ended December
31, 1987) filed March 25, 1988.
10.6 Ball Corporation 1988 Deferred Compensation Plan (filed by incorporation
by reference to the Annual Report on Form 10-K for the year ended December
31, 1987) filed March 25, 1988.
10.7 Ball Corporation 1989 Deferred Compensation Plan (filed by incorporation
by reference to the Annual Report on Form 10-K for the year ended December
31, 1988) filed March 29, 1989.
10.8 Form of Severance Agreement which exists between the company and its
executive officers (filed by incorporation by reference to the Annual
Report on Form 10-K for the year ended December 31, 1988) filed March 29,
1989.
10.9 An agreement dated September 15, 1988 between Ball Corporation and Onex
Corporation to form a joint venture company known as Ball-Onex Packaging
Corp., since renamed Ball Packaging Products Canada, Inc. (filed by
incorporation by reference to the Current Report on Form 8-K dated
December 8, 1988) filed December 23, 1988.
10.10 Stock Purchase Agreement dated as of June 29, 1989 between Ball
Corporation and Mellon Bank, N.A. (filed by incorporation by reference to
the Quarterly Report on Form 10-Q for the quarter ended July 2, 1989)
filed August 15, 1989.
10.11 Stock Purchase Agreement dated July 30, 1990 between Ball Corporation and
NV Hollandsch-Amerikaansche Beleggingsmaatschappij (Holland-American
Investment Corporation) (filed by incorporation by reference to the
Current Report on Form 8-K dated November 30, 1990) filed December 13,
1990, as amended under cover of Form 8 filed on February 12, 1991.
10.12 Ball Corporation 1986 Deferred Compensation Plan for Directors, as amended
October 27, 1987 (filed by incorporation by reference to the Annual Report
on Form 10-K for the year ended December 31, 1990) filed April 1, 1991.
10.13 1991 Restricted Stock Plan for Nonemployee Directors of Ball Corporation
(filed by incorporation by reference to the Form S-8 Registration
Statement, No. 33-40199) filed April 26, 1991.
10.14 Agreement of Purchase and Sale, dated April 11, 1991, between Ball
Corporation and the term lenders of Ball Packaging Products Canada, Inc.,
Citibank Canada, as Agent (filed by incorporation by reference to the
Quarterly Report on Form 10-Q for the quarter ended March 31, 1991) filed
May 15, 1991.
10.15 Ball Corporation 1992 Economic Value Added Incentive Compensation Plan for
Key Members of Management (filed by incorporation by reference to the
Annual Report on Form 10-K for the year ended December 31, 1991) filed
March 30, 1992.
10.16 Agreement and Plan of Merger among Ball Corporation, Ball Sub Corp. and
Heekin Can, Inc. dated as of December 1, 1992 and as amended as of
December 28, 1992 (filed by incorporation by reference to the Registration
Statement on Form S-4, No. 33-58516) filed February 19, 1993.
10.17 Distribution Agreement between Ball Corporation and Alltrista (filed by
incorporation by reference to the Alltrista Corporation Form 8, Amendment
No. 3 to Form 10, No. 0-21052, dated December 31, 1992) filed March 17,
1993.
10.18 1993 Stock Option Plan (filed by incorporation by reference to the Form S-
8 Registration Statement, No. 33-61986) filed April 30, 1993.
10.19 Letter agreement, dated March 22, 1993, confirming offer and terms of
employment to Mr. John A. Haas as Group Vice President; President, Metal
Food Container and Specialty Products Group. (Filed herewith.)
10.20 Employment agreement, dated December 1, 1992, among Heekin Can, Inc. and
John A. Haas. (Filed herewith.)
11.1 Statement re: Computation of Earnings Per Share (Filed herewith.)
13.1 Ball Corporation 1993 Annual Report to Shareholders (The Annual Report to
Shareholders, except for those portions thereof incorporated by reference,
is furnished for the information of the Commission and is not to be deemed
filed as part of this Form 10-K.) (Filed herewith.)
21.1 List of Subsidiaries of Ball Corporation (Filed herewith.)
24.1 Limited Power of Attorney (Filed herewith.)
99.1 Specimen Certificate of Common Stock (filed by incorporation by reference
to the Annual Report on Form 10-K for the year ended December 31, 1979)
filed March 24, 1980.