PRESS RELEASE OF FINANCIALS
Published on January 26, 2006
Exhibit
99
 |
|
News
Release
|
|
For
Immediate Release
|
http://www.ball.com
|
||
|
Investor
Contact:
|
Ann
T. Scott
|
303-460-3537,
ascott@ball.com
|
|
|
Media
Contact:
|
Scott
McCarty
|
303-460-2103,
smccarty@ball.com
|
|
Ball
Corporation Reports Full-Year 2005 Results
BROOMFIELD,
Colo., Jan. 26, 2006—Ball Corporation [NYSE:BLL] today reported full year
2005 net earnings of $261.5 million, or $2.38 per diluted share, on
sales of $5.75 billion, compared to $295.6 million, or $2.60 per
diluted share, on sales of $5.44 billion in 2004.
The
2005
results include net after-tax charges of $25.7 million, or 24 cents
per diluted share, related to various business consolidation and debt
refinancing costs during the year. The 2004 results included an after-tax
gain
of $9.5 million, or eight cents per diluted share, related primarily to
China business consolidation activities.
Fourth
quarter 2005 net earnings were $44.6 million, or 42 cents per diluted
share, on sales of $1.29 billion, compared to $56.4 million, or
50 cents per diluted share, on sales of $1.26 billion in the fourth
quarter of 2004. The 2005 fourth quarter results include business consolidation
and debt refinancing costs of $7.3 million, or seven cents per diluted
share. The 2004 fourth quarter results included a net gain of $5.3 million,
or five cents per diluted share, from the China business consolidation
activities.
R. David
Hoover, chairman, president and chief executive officer, said results for
2005
were in line with the company’s expectations for the year and were rewarding in
view of a difficult cost environment for primary materials used in the
manufacture of packaging products as well as for energy, fuel and coating
materials.
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Ball
Corporation
10
Longs
Peak Drive ·
P.O. Box
5000 ·
Broomfield, CO 80021
Ball
Corporation - 2
“On
a
comparable basis, excluding business consolidation and debt refinancing costs
in
both years, our diluted earnings per share grew from $2.52 cents to
$2.62 cents,” Hoover said. “2005 was also significant for the investments
we began to make in our best performing businesses, the further improvement
in
our overall financing structure and the large number of our shares we
repurchased. Our capital projects have been progressing extremely well and
our
financial actions have helped position us nicely for the future.”
North
American Packaging Segment
North
American packaging segment sales were $3.7 billion in 2005 compared to
$3.54 billion in 2004. Sales in the quarter were $827.8 million
compared to $823.2 million in the fourth quarter of 2004. Operating
earnings for the year and the quarter (see note 1 of the attached condensed
consolidated financials) were down in part due to business consolidation
activities (discussed in note 2 of the financials).
“Annual
sales revenues were up in all three of our North American Packaging product
lines, in part the result of the pass through of some higher metal and resin
costs,” Hoover said. “Operating earnings for the segment were lower due to
business consolidation costs, higher energy, fuel and coating costs, as well
as
higher costs for the steel used to produce food cans. An increase in LIFO
inventory reserves and non-cash pension costs also reduced operating
earnings.
“We
temporarily lost some beverage can sales volume in 2005 due to contract shifts,
and a smaller amount of production capacity as we converted some lines from
the
manufacture of standard 12-ounce beverage cans to the production of specialty
sized cans,” Hoover said. “In 2006 we expect volumes to return to 2004 levels,
and our ability to meet the growing demand for specialty cans has been enhanced
significantly.”
Hoover
said the corporation’s plastic container operations had a better year in 2005,
in part due to focusing efforts on heat-set and barrier containers. He said
that
focus will continue and the company is adding capacity to meet the incremental
growth in demand for those containers. He said Ball is continuing to explore
ways to reduce production costs for those containers and for the commodity
bottles it supplies for soft drinks and water.
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Ball
Corporation
10
Longs
Peak Drive ·
P.O. Box
5000 ·
Broomfield, CO 80021
Ball
Corporation - 3
International
Packaging Segment
Full
year
sales for the international packaging segment were $1.35 billion compared
to $1.25 billion in 2004. Fourth quarter sales were $296.1 million in
2005 compared to $278.5 million in 2004 (see notes 1 and 2 of the
financials).
“Our
sales volumes and revenues increased in both Europe and China in 2005, though
operating earnings were down due to many of the same factors that affected
our
North American packaging segment,” Hoover said. “The China business
consolidation activities we began several years ago are now complete and
we are
much better sized and positioned to compete in the China market. A lower
euro
exchange rate contributed to lower operating earnings from Europe in the
fourth
quarter.
“Our
joint venture operations in Brazil had a very good year in 2005,” Hoover said.
“We foresee continued growth in the demand for beverage cans in Brazil and
are
undertaking projects to increase our production capacity through enhancements
to
our existing operations there.”
Aerospace
and Technologies Segment
Aerospace
and technologies segment sales were a record $694.8 million, up from
$653 million in 2004, which was the previous record for the segment.
Operating earnings were also a record at $54.7 million, compared to
$48.7 million in 2004 and breaking the previous record of
$49.5 million in 2003.
“Margins
in our aerospace and technologies segment improved in 2006 as that business
continued to grow,” Hoover said. “We ended the year with a record backlog of
$761 million as we won several important contracts during the year. We
began expansion of our facilities in order to meet demand for our products
and
services.
“The
Deep
Impact mission to study a comet and add to knowledge of the formation of
the
solar system was a tremendous success in 2005,” Hoover added. “2006 marks the
50th
anniversary of our aerospace business and our history has been to build on
past
successes in order to expand our future market presence.”
Outlook
“We
are
pleased with our results in a challenging 2005, even though the 4 percent
improvement in diluted earnings per share from operations was below our goal
to
increase those earnings 10 to 15 percent per year over time,” Hoover said. “In
2006 we anticipate improvement more in line with our stated goals as we
compensate for some of the cost pressures we face with stringent controls
and
cost recovery measures throughout the corporation.
-
more
-
Ball
Corporation
10
Longs
Peak Drive ·
P.O. Box
5000 ·
Broomfield, CO 80021
Ball
Corporation - 4
“We
expect volumes in our North American beverage can operations to return to
2004
levels after a dip in 2005, and for growth in demand for our specialty cans
to
continue,” Hoover said. “Our plastic container operations will attempt to build
on their improved 2005 performance. Our metal food can operations are in
a
challenging environment. We closed a plant in 2005 and are working on numerous
projects to improve results in those operations.
“Indications
are that 2006 will be the year the beverage can begins a comeback in Germany
after three years of being largely out of the market due to the imposition
of a
deposit on containers without an adequate system to handle the redemption
of
deposit containers,” Hoover said. “That, plus production from our Belgrade
plant, provide upside in our international packaging segment, though we
recognize there may be cost pressures, exchange rates and other variables
in
Europe and China that could affect results as well.
“We
expect another strong year in our aerospace and technologies segment, though
operating earnings could decline marginally due to an increase in non-cash
pension costs,” Hoover said. “Strong demand continues for our capabilities and
we see opportunities for sustained growth in defense/intelligence, remote
sensing and space exploration in particular.”
Raymond J.
Seabrook, senior vice president and chief financial officer, said lower interest
expense, a low effective tax rate, a reduced number of shares outstanding
and
continued strong cash flow generation all contribute to a positive outlook
for
2006.
“Our
free
cash flow should be in the range of $250 million in 2006, after capital
spending, on top of the $267 million we generated in 2005,” Seabrook said.
“We are entering the second year of a three-year capital spending program
to
make improvements in our packaging segments and accommodate continued growth
in
our aerospace segment.
“We
repurchased more than $350 million of our stock in 2005,” Seabrook added,
“and the 2006 stock buyback is anticipated to be in the $150 million range.
New accounting rules for expensing stock options are expected to reduce our
2006
diluted earnings per share by three cents.”
Ball
Corporation is a supplier of high-quality metal and plastic packaging products
and owns Ball Aerospace & Technologies Corp., which develops sensors,
spacecraft, systems and components for government and commercial customers.
The
company employs more than 13,500 people worldwide.
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Ball
Corporation
10
Longs
Peak Drive ·
P.O. Box
5000 ·
Broomfield, CO 80021
Ball
Corporation - 5
Conference
Call Details
At
9 a.m. Mountain Time today (11 a.m. Eastern), Ball will hold its
regular quarterly conference call on the company's fourth quarter and full-year
2005 results and performance.
The
North
American toll-free number for the call is 888-294-1314.
International callers should dial +1 212-346-6533.
For
those unable to listen to the live call, a taped rebroadcast will be available
until 11 a.m. Mountain Time on Feb. 2, 2006. To access the
rebroadcast, dial 800-633-8284
(domestic
callers) or +1 402-977-9140
(international
callers) and enter 21279483 as
the
reservation number.
Please
use the following URL for a Web cast of the live call and for the
replay:
http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=115234&eventID=1187105
A
written
transcript of the call will be posted within 48 hours of the call's conclusion
to Ball's Web site at www.ball.com in the investor relations section under
“presentations.”
Forward-Looking
Statements
This
news
release contains “forward-looking” statements concerning future events and
financial performance. Words such as “expects,” “anticipates,” “estimates,” and
variations of same and similar expressions are intended to identify
forward-looking statements. Such statements are subject to risks and
uncertainties which could cause actual results to differ materially from
those
expressed or implied. The company undertakes no obligation to publicly update
or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise. Key risks and uncertainties are summarized in
filings with the Securities and Exchange Commission, including in Exhibit
99.2
in our Form 10-K. These filings are available at our Web site and at
www.sec.gov. Factors that might affect our packaging segments include
fluctuation in consumer and customer demand and preferences; availability
and
cost of raw materials, including recent significant increases in resin, steel,
aluminum and energy costs, and the ability to pass such increases on to
customers; competitive packaging availability, pricing and substitution;
changes
in climate and weather; fruit, vegetable and fishing yields; industry productive
capacity and competitive activity; failure to achieve anticipated productivity
improvements or production cost reductions, including those associated with
our
beverage can end project; the German mandatory deposit or other restrictive
packaging laws; changes in major customer or supplier contracts or loss of
a
major customer or supplier; changes in foreign exchange rates, tax rates
and
activities of foreign subsidiaries; and the effect of LIFO accounting. Factors
that might affect our aerospace segment include: funding, authorization,
availability and returns of government contracts; and delays, extensions
and
technical uncertainties affecting segment contracts. Factors that might affect
the company as a whole include those listed plus: acquisitions, joint ventures
or divestitures; regulatory action or laws including tax, environmental and
workplace safety; governmental investigations; technological developments
and
innovations; goodwill impairment; antitrust, patent and other litigation;
strikes; labor cost changes; rates of return projected and earned on assets
of
the company's defined benefit retirement plans; reduced cash flow; interest
rates affecting our debt; and changes to unaudited results due to statutory
audits or other effects.
4/06 #
#
#
Ball
Corporation
10
Longs
Peak Drive ·
P.O. Box
5000 ·
Broomfield, CO 80021
|
Condensed
Financials (Year
ended December 2005)
|
|||||||||||||
|
Unaudited
Statements of Consolidated Earnings
|
|||||||||||||
|
Three
months ended December 31,
|
Year
ended December 31,
|
||||||||||||
|
($
in millions, except per share amounts)
|
2005
|
2004
|
2005
|
2004
|
|||||||||
|
Net
sales (Note
1)
|
$
|
1,291.2
|
$
|
1,262.8
|
$
|
5,751.2
|
$
|
5,440.2
|
|||||
|
Costs
and expenses
|
|||||||||||||
|
Cost
of sales (excluding depreciation and amortization)
|
1,093.8
|
1,031.1
|
4,822.4
|
4,433.5
|
|||||||||
|
Business
consolidation (gains) costs (Note
1 and 2)
|
(6.9
|
)
|
(8.5
|
)
|
21.2
|
(15.2
|
)
|
||||||
|
Depreciation
and amortization
|
52.7
|
52.4
|
213.5
|
215.1
|
|||||||||
|
Selling
and administrative
|
60.0
|
66.1
|
231.6
|
267.9
|
|||||||||
|
1,199.6
|
1,141.1
|
5,288.7
|
4,901.3
|
||||||||||
|
Earnings
before interest and taxes (Note
1)
|
91.6
|
121.7
|
462.5
|
538.9
|
|||||||||
|
Interest
expense before debt refinancing costs
|
(22.6
|
)
|
(24.7
|
)
|
(97.1
|
)
|
(103.7
|
)
|
|||||
|
Debt
refinancing costs (Note 2)
|
(18.0
|
)
|
-
|
(19.3
|
)
|
-
|
|||||||
|
Total
interest expense
|
(40.6
|
)
|
(24.7
|
)
|
(116.4
|
)
|
(103.7
|
)
|
|||||
|
Tax
provision (Note 3)
|
(10.0
|
)
|
(30.6
|
)
|
(99.3
|
)
|
(139.2
|
)
|
|||||
|
Minority
interests
|
(0.1
|
)
|
(0.2
|
)
|
(0.8
|
)
|
(1.0
|
)
|
|||||
|
Equity
in results of affiliates (Note 4)
|
3.7
|
(9.8
|
)
|
15.5
|
0.6
|
||||||||
|
Net
earnings
|
$
|
44.6
|
$
|
56.4
|
$
|
261.5
|
$
|
295.6
|
|||||
|
Earnings
per share:
|
|||||||||||||
|
Basic
|
$
|
0.43
|
$
|
0.51
|
$
|
2.43
|
$
|
2.67
|
|||||
|
Diluted
|
$
|
0.42
|
$
|
0.50
|
$
|
2.38
|
$
|
2.60
|
|||||
|
Weighted
average shares outstanding (000s):
|
|||||||||||||
|
Basic
|
103,046
|
110,657
|
107,758
|
110,846
|
|||||||||
|
Diluted
|
104,892
|
113,706
|
109,732
|
113,790
|
|||||||||
|
Condensed
Financials (Year
ended December 2005)
|
|||||||||||||
|
Unaudited
Statements of Consolidated Cash Flows
|
|||||||||||||
|
Three
months ended December 31,
|
Year
ended December 31,
|
||||||||||||
|
($
in millions)
|
2005
|
2004
|
2005
|
2004
|
|||||||||
|
Cash
Flows From Operating Activities:
|
|||||||||||||
|
Net
earnings
|
$
|
44.6
|
$
|
56.4
|
$
|
261.5
|
$
|
295.6
|
|||||
|
Depreciation
and amortization
|
52.7
|
52.4
|
213.5
|
215.1
|
|||||||||
|
Change
in working capital
|
168.3
|
116.8
|
103.4
|
7.1
|
|||||||||
|
Other
|
8.4
|
18.5
|
(19.6
|
)
|
18.1
|
||||||||
|
274.0
|
244.1
|
558.8
|
535.9
|
||||||||||
|
Cash
Flows From Investing Activities:
|
|||||||||||||
|
Additions
to property, plant and equipment
|
(97.5
|
)
|
(96.1
|
)
|
(291.7
|
)
|
(196.0
|
)
|
|||||
|
Business
acquisitions
|
-
|
(0.2
|
)
|
-
|
(17.2
|
)
|
|||||||
|
Other
|
10.9
|
4.6
|
1.7
|
3.6
|
|||||||||
|
(86.6
|
)
|
(91.7
|
)
|
(290.0
|
)
|
(209.6
|
)
|
||||||
|
Cash
Flows From Financing Activities:
|
|||||||||||||
|
Net
change in borrowings
|
(153.4
|
)
|
(6.9
|
)
|
1.5
|
(78.3
|
)
|
||||||
|
Dividends
|
(10.2
|
)
|
(11.1
|
)
|
(42.5
|
)
|
(38.9
|
)
|
|||||
|
Purchase
of common stock, net
|
(47.7
|
)
|
(6.5
|
)
|
(358.1
|
)
|
(50.0
|
)
|
|||||
|
Other
|
(11.6
|
)
|
(0.5
|
)
|
(11.6
|
)
|
(0.9
|
)
|
|||||
|
(222.9
|
)
|
(25.0
|
)
|
(410.7
|
)
|
(168.1
|
)
|
||||||
|
Effect
of exchange rate changes on cash
|
6.1
|
3.5
|
4.2
|
4.0
|
|||||||||
|
Increase
(decrease) in cash
|
(29.4
|
)
|
130.9
|
(137.7
|
)
|
162.2
|
|||||||
|
Cash-beginning
of period
|
90.4
|
67.8
|
198.7
|
36.5
|
|||||||||
|
Cash-end
of period
|
$
|
61.0
|
$
|
198.7
|
$
|
61.0
|
$
|
198.7
|
|||||
|
Condensed
Financials (Year
ended December 2005)
|
|||||||
|
Unaudited
Consolidated Balance Sheets
|
|||||||
|
December
31,
|
December
31,
|
||||||
|
($
in millions)
|
2005
|
2004
|
|||||
|
Assets
|
|||||||
|
Current
assets
|
|||||||
|
Cash
and cash equivalents
|
$
|
61.0
|
$
|
198.7
|
|||
|
Receivables,
net
|
376.6
|
346.8
|
|||||
|
Inventories,
net
|
670.3
|
629.5
|
|||||
|
Deferred
taxes and prepaid expenses
|
117.9
|
70.6
|
|||||
|
Total
current assets
|
1,225.8
|
1,245.6
|
|||||
|
Property,
plant and equipment, net
|
1,556.6
|
1,532.4
|
|||||
|
Goodwill
|
1,258.6
|
1,410.0
|
|||||
|
Other
assets
|
302.4
|
289.7
|
|||||
|
Total
assets
|
$
|
4,343.4
|
$
|
4,477.7
|
|||
|
Liabilities
and Shareholders’ Equity
|
|||||||
|
Current
liabilities
|
|||||||
|
Short-term
debt and current portion of long-term debt
|
$
|
116.4
|
$
|
123.0
|
|||
|
Payables
and accrued liabilities
|
1,073.1
|
873.3
|
|||||
|
Total
current liabilities
|
1,189.5
|
996.3
|
|||||
|
Long-term
debt
|
1,473.3
|
1,537.7
|
|||||
|
Other
liabilities and minority interests
|
845.3
|
857.1
|
|||||
|
Shareholders’
equity
|
835.3
|
1,086.6
|
|||||
|
Total
liabilities and shareholders’ equity
|
$
|
4,343.4
|
$
|
4,477.7
|
|||
|
Notes
to Condensed Financials (Year
ended December 2005)
|
|||||||||||||
|
($
in millions)
|
Three
months ended December 31,
|
Year
ended December 31,
|
|||||||||||
|
1. Business
Segment Information
|
2005
|
2004
|
2005
|
2004
|
|||||||||
|
Sales-
|
|||||||||||||
|
North
American packaging-
|
|||||||||||||
|
Metal
beverage
|
$
|
545.7
|
$
|
539.2
|
$
|
2,390.4
|
$
|
2,360.6
|
|||||
|
Metal
food
|
168.5
|
190.6
|
824.0
|
777.5
|
|||||||||
|
Plastic
containers
|
113.6
|
93.4
|
487.5
|
401.0
|
|||||||||
|
827.8
|
823.2
|
3,701.9
|
3,539.1
|
||||||||||
|
International
packaging-
|
|||||||||||||
|
Europe
metal beverage
|
257.4
|
248.7
|
1,181.4
|
1,105.4
|
|||||||||
|
Asia
metal beverage and plastic containers
|
38.7
|
29.8
|
173.1
|
142.7
|
|||||||||
|
296.1
|
278.5
|
1,354.5
|
1,248.1
|
||||||||||
|
Aerospace
and technologies
|
167.3
|
161.1
|
694.8
|
653.0
|
|||||||||
|
Consolidated
net sales
|
$
|
1,291.2
|
$
|
1,262.8
|
$
|
5,751.2
|
$
|
5,440.2
|
|||||
|
Earnings
before interest and taxes-
|
|||||||||||||
|
North
American packaging
|
$
|
51.3
|
$
|
75.2
|
$
|
289.3
|
$
|
333.9
|
|||||
|
Business
consolidation gains (costs) (Note 2)
|
(2.4
|
)
|
0.3
|
(30.5
|
)
|
1.1
|
|||||||
|
Total
North American packaging
|
48.9
|
75.5
|
258.8
|
335.0
|
|||||||||
|
International
packaging
|
26.7
|
35.5
|
172.5
|
184.3
|
|||||||||
|
Business
consolidation gains (Note 2)
|
9.3
|
7.8
|
9.3
|
13.7
|
|||||||||
|
Total
international packaging
|
36.0
|
43.3
|
181.8
|
198.0
|
|||||||||
|
Aerospace
and technologies
|
15.7
|
13.5
|
54.7
|
48.3
|
|||||||||
|
Business
consolidation gains (Note 2)
|
-
|
0.4
|
-
|
0.4
|
|||||||||
|
15.7
|
13.9
|
54.7
|
48.7
|
||||||||||
|
Segment
earnings before interest and taxes
|
100.6
|
132.7
|
495.3
|
581.7
|
|||||||||
|
Undistributed
corporate costs
|
(9.0
|
)
|
(11.0
|
)
|
(32.8
|
)
|
(42.8
|
)
|
|||||
|
Earnings
before interest and taxes
|
$
|
91.6
|
$
|
121.7
|
$
|
462.5
|
$
|
538.9
|
|||||
2. Business
Consolidation Activities and Debt Refinancing Costs
Debt
Refinancing Costs-
On
October 13, 2005, Ball refinanced its senior secured credit facilities. The
new six-year, $1,450 million senior credit facilities consist of British
sterling, Euro, and Canadian dollar term loans, as well as a multicurrency
revolving credit facility. The new credit facilities provide more flexibility,
extend maturities at lower interest rate spreads and allow for added borrowing
capacity. The refinancing resulted in a pretax fourth quarter added interest
charge of $11.5 million ($7.6 million after tax) related to the
write-off of unamortized debt issuance costs.
On
November 14, 2005, Ball refinanced all outstanding 7.75% Senior Notes due
in August 2006 through the drawdown of funds under the new senior credit
facilities. In connection with the refinancing of the higher interest rate
debt,
a pretax charge of $6.5 million ($3.9 million after tax) was also
recorded in the fourth quarter as additional interest to reflect the call
premium and write off of unamortized debt issuance costs. Also in the third
quarter, Ball redeemed $31 million of the 7.75% Senior Notes which resulted
in a pretax interest charge of $1.3 million ($0.8 million after
tax).
Notes
to Condensed Financials (Year
ended December 2005)
2. Business
Consolidation Activities and Debt Refinancing Costs
(continued)
Business
Consolidation Activities-
2005
In
the
fourth quarter of 2005, Ball recognized $9.3 million of earnings
($5.8 million after tax) primarily related to the final resolution of tax
matters on prior restructuring activities in China. The China restructuring
activities have been concluded. The company also recorded a charge of
$4.6 million ($3.1 million after tax) for employee severance and
pension costs related to a reduction in the work force in a metal food container
plant in Canada which was somewhat offset by a $2.2 million gain ($1.5
million after tax) to adjust the Baie d’Urfe plant to net realizable value,
initially written down in the second quarter of 2005.
In
the
third quarter of 2005, Ball commenced a project to upgrade and streamline
its
North American beverage can end manufacturing capabilities, a project that
is
expected to result in productivity gains and cost reductions. In connection
with
these activities, the company recorded a $19.3 million charge
($11.7 million after tax) primarily for the write off of obsolete equipment
spare parts and employee termination costs.
In
the
second quarter of 2005, Ball announced the closure of the Baie d’Urfe metal food
container plant in Canada. In connection with the closure, the company recorded
a charge of $8.8 million ($5.9 million after tax), primarily comprised
of employee termination costs and the write down of fixed assets to net
realizable value.
2004
In
2004,
the company recorded $15.2 million of earnings ($9.5 million after
tax) related to the recovery of amounts previously expensed in a prior year
business consolidation charge of which $8.5 million ($5.3 million
after tax) was recorded in the fourth quarter of 2004.
A
summary of the effects of the above transactions on after-tax earnings
follows:
|
Three
months ended
|
Twelve
months ended
|
||||||||||||
|
($
in millions, except per share amounts)
|
Dec.31,
2005
|
Dec.
31,
2004
|
Dec.
31,
2005
|
Dec.
31,
2004
|
|||||||||
|
Net
earnings as reported
|
$
|
44.6
|
$
|
56.4
|
$
|
261.5
|
$
|
295.6
|
|||||
|
Business
consolidation costs (gains), net of tax
|
(4.2
|
)
|
(5.3
|
)
|
13.4
|
(9.5
|
)
|
||||||
|
Debt
refinancing costs, net of tax
|
11.5
|
-
|
12.3
|
-
|
|||||||||
|
Net
earnings before the above items
|
$
|
51.9
|
$
|
51.1
|
$
|
287.2
|
$
|
286.1
|
|||||
|
Per
basic share before the above items
|
$
|
0.50
|
$
|
0.46
|
$
|
2.67
|
$
|
2.58
|
|||||
|
Per
diluted share before the above items
|
$
|
0.49
|
$
|
0.45
|
$
|
2.62
|
$
|
2.52
|
|||||
|
Increase
over prior year
|
8%
|
|
4%
|
|
|||||||||
Ball’s
management segregates the above items related to closed facilities and debt
refinancing costs to evaluate the company’s performance of current operations.
The above is presented on a non-U.S. GAAP basis and should be considered
in
connection with the unaudited statement of consolidated earnings. Non-U.S.
GAAP
measures should not be considered in isolation.
3. Repatriation
of Foreign Earnings and Capital
In
July
2005, the company’s CEO approved a foreign dividend and capital distribution
plan that includes the repatriation of undistributed earnings of certain
of its
foreign subsidiaries during the third and fourth quarters of 2005. The company
recorded a current tax payable of $16 million that was more than offset by
the release of $19.2 million of accrued taxes on prior year unremitted
foreign earnings, resulting in a net decrease in tax expense of
$3.2 million.
4. Equity
in Results of Affiliates
A
$15.2 million loss (13 cents per diluted share) was recognized in the
fourth quarter of 2004 pertaining to an allowance for doubtful accounts recorded
in a minority-owned PRC joint venture. The remaining carrying value of the
investment of $3.4 million was written off in the first quarter of 2005 in
earnings before interest and taxes.
5. Free
Cash Flow
Management
internally uses a free cash flow measure (1) to evaluate the company’s
operating results, (2) for planning purposes, (3) to evaluate
strategic investments and (4) to evaluate the company’s ability to incur
and service debt. Free cash flow is not a defined term under U.S. generally
accepted accounting principles (a non-U.S. GAAP measure). Non-U.S. GAAP measures
should not be considered in isolation or as a substitute for net earning
or cash
flow data prepared in accordance with U.S. GAAP and may not be comparable
to
similarly titled measures of other companies.
Free
cash
flow is typically derived directly from the company’s cash flow statements and
defined as cash flows from operating activities less additions to property,
plant and equipment; however it may be adjusted for items that affect
comparability between periods. Cash flow from operating activities is the
most
comparable GAAP term to free cash flow and it should not be inferred that
the
entire free cash flow amount is available for discretionary
expenditures.
Free
cash
flow in 2005 amounted to $267 million.