8-K

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 8-K
CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

November 20, 2002
(Date of earliest event reported)

Commission file number 1-7349

BALL CORPORATION
(Exact name of Registrant as specified in its charter)

Indiana	1-7349	35-0160610
(State of Incorporation)	(Commission File No.)	(IRS Employer Identification No.)

10 Longs Peak Drive, P.O. Box 5000, Broomfield, CO 80021-2510
(Address of principal executive offices, including ZIP code)

(303) 469-3131
(Registrant's telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)

Ball Corporation
Current Report on Form 8-K
Dated November 20, 2002

Item 5. Other Events.

        Ball Corporation is commencing the solicitation of consents from holders of its 7³/4% Senior Notes due 2006 and 8¹/4% Senior Subordinated Notes due 2008 to amend certain provisions of the senior note indenture and the senior subordinated note indenture covering those securities. A copy of the press release is attached as Exhibit 99.3 to this Form 8-K.

Item 7. Financial Statements, Pro Forma Financial Information and Exhibits

        In accordance with general instruction B.2 of Form 8-K, the information in Exhibits 99.1 and 99.2 are furnished pursuant to Item 9 and shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section.

        The following are furnished as Exhibits to this report.

Exhibit 99.1	Combined Historical Financial Statements of Schmalbach–Lubeca Beverage Cans
Exhibit 99.2	Combined Interim Financial Statements of Schmalbach–Lubeca Beverage Cans
Exhibit 99.3	Press Release dated November 20, 2002

        The financial statements and financial and other information concerning the beverage can business that is being acquired with an allocated portion of the corporate headquarters function of Schmalbach–Lubeca AG contained in or furnished as exhibits to this report have been derived from publicly filed annual and interim reports prepared by Schmalbach–Lubeca AG or otherwise provided by Schmalbach–Lubeca AG.

Item 9. Regulation FD Disclosure

        On August 29, 2002, Ball Corporation and its newly formed, indirect, wholly-owned subsidiary, Ball Pan–European Holdings, Inc., entered into an acquisition agreement with Schmalbach–Lubeca Holding GmbH and AV Packaging GmbH to acquire 100% of the capital stock of Schmalbach–Lubeca AG, the second largest manufacturer of metal beverage containers in Europe. Following consummation of the acquisition, which has not yet been completed and is subject to various conditions under the acquisition agreement, it is expected that Schmalbach–Lubeca AG will be operated as an indirect, wholly-owned European subsidiary of Ball Corporation and will be a restricted subsidiary under the indentures governing the notes.

        Ball Corporation expects to finance the acquisition with the proceeds from the borrowings under new credit facilities and through the offering of new senior notes of Ball Corporation.

        Ball Corporation also intends to solicit consents from the holders of its outstanding notes in order to amend certain provisions contained in the indentures governing the notes. The consummation of the acquisition is not conditioned on the successful completion of the consent solicitation.

        Although the acquisition has not yet been completed, Ball Corporation may provide the financial and other information contained in this Current Report on Form 8-K to its existing and potential investors in connection with the consent solicitation and new financings.

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MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS OF SCHMALBACH-LUBECA BEVERAGE CANS

Management's discussion and analysis should be read in conjunction with the financial statements of Schmalbach-Lubeca Beverage Cans and the accompanying notes contained therein, each contained elsewhere in this Current Report on Form 8-K.

Overview

        Schmalbach is the second largest manufacturer of metal beverage containers in Europe. Its 12 plants, which include two end plants, can produce over 12 billion containers annually. Leading producers of beer, soft drinks and other beverages, including Coca-Cola, Britvic (Pepsi), Coors, Heineken, Interbrew and South African Breweries represent substantially all of Schmalbach's customers.

        Prior to July 1, 2002, Schmalbach–Lubeca AG consisted of three operating segments—PET containers, White Cap closures and beverage cans. On July 1, 2002, Schmalbach sold both the PET and White Cap businesses. This Management's Discussion and Analysis is based on Schmalbach's financial statements included herein which represent the beverage can business and the corporate headquarters function as allocated to beverage cans and exclude the businesses that were sold on July 1, 2002. The Schmalbach financial statements were prepared in accordance with International Accounting Standards, which differ in some respects from accounting principles generally accepted in the United States.

Comparison of Nine Months Ended September 30, 2002 and 2001

Sales and Earnings

        Sales in the Schmalbach beverage can product line increased 24% in the first nine months of 2002 to €888.4 million from €716.2 million in the first nine months of 2001.

        The increase in 2002 was largely attributable to the additional sales associated with two new plants acquired from Rexam in October 2001. The two new plants, located in Southern France and in the United Kingdom, contributed to increased market share with approximately 1.9 billion cans, on an annual basis, and the existing two can end production facilities shipped an additional 1.8 billion ends in connection with the increase in can sales. Also contributing to the increased sales were the installation of a second line in Poland, which is now running at full speed after the initial start-up phase, and an overall growth in the European beverage can market of more than 4%.

        The acquisition of two new plants was the principal reason for Schmalbach's share in the European beverage can market increasing from 27% in 2001 to 31% in 2002. The increase resulted in higher capacity utilization at all plants. Volumes were redistributed based on locations of customers in order to minimize freight costs.

        Operating margins for the beverage can business, excluding corporate overhead, improved from 13.1% for the first nine months of 2001 to 17.3% in the first nine months of 2002. This was mainly due to higher sales of cans and ends and overall improved capacity utilization. The improvement also came from lower raw material costs, in particular global market prices of aluminum, and further success in down-gauging programs. An improved organization, which is more focused on cost management, also contributed to the improved operating margin.

Financial Condition, Liquidity and Capital Resources

        Cash flow from operations totaled €139 million in the first nine months of 2002 compared to a usage of €17 million in the same period of 2001, an improvement attributable to the increased

2

operating results for the first nine months of 2002. The addition of new business associated with the two plants acquired in October 2001 increased average working capital for 2002, but was partially offset by a decrease in days on hand in inventory.

        Capital expenditures in Schmalbach's beverage can product group during the first nine months of 2002 were €6.2 million higher than those for the same period in 2001. The increase was primarily related to two projects occurring in the first half of 2002: increasing the speed of the lines in the Polish plant and construction of a warehouse directly attached to the Poland plant in order to improve logistics as a result of the plant's higher output. Additional spending was done to improve production and capacity of the end plants to help meet increased demand. Capital expenditures are expected to be approximately €40 to €50 million for the 12 months ended September 2003 primarily for upspeeding projects in certain plants and normal ongoing capital expenditures.

Comparison of Years Ended December 31, 2001, 2000 and 1999

Sales and Earnings

        Sales in the beverage can product line were €953.1 million in 2001, €869.2 million in 2000 and €764.3 million in 1999.

        The 10% increase in sales in 2001 was attributable mainly to additional sales associated with two new plants acquired from Rexam in October 2001. The two new plants, located in southern France and the United Kingdom, have helped Schmalbach gain entry into the growing Southern European market and have enhanced its presence in the United Kingdom with increased capacity utilization for end production. The increase was further attributable to strong sales in Poland, where Schmalbach experienced double-digit growth in sales for the second consecutive year. The increase in sales was slightly offset by the sale of a plant in the Czech Republic, which resulted in the redistribution of capacity to other plants and an improvement in operating margins.

        The increase in sales from 1999 to 2000 of 14% was largely due to the increased demand for beverage cans in Eastern Europe and Germany. Schmalbach was able to capitalize on the growth in the Eastern European market, as well as gain market share, as a result of its expanded production capacity at its Polish plant. The European Soccer Championship helped to increase demand in general during the summer months of 2000.

        Operating margins improved in 2001 compared to 2000, due largely to higher sales, as well as a favorable product mix. Offsetting this improvement were increased material costs which could only be partially passed through to the customer. More effective cost management and more efficient line capacity utilization had a positive impact on results in Germany. A second line in Poland contributed to better earnings, despite being hampered by competitive pricing pressures.

        Operating margins in 2000 were slightly lower than in 1999 with the favorable effects of higher sales and an improved product mix being negatively impacted by increased material costs and downward pressure on prices due to competition. In addition, during the construction of a second production line in Poland during the first six months of 2000, a large amount of sales to Polish customers were filled from Schmalbach plants in other countries, resulting in higher freight costs.

Financial Condition, Liquidity and Capital Resources

        Despite the strengthening of the U.S. dollar by 5%, working capital at the end of 2001 was lower than at the end of 2000 due to Schmalbach's cash management and lower accounts receivable as a result of expanding its securitization programs. A cautious investment policy also contributed to a positive cash flow. Through cash flows from operations, Schmalbach was able to repay a significant portion of its bank debt.

3

        Major capital expenditure projects during 2001 included the modernization of can end manufacturing in manufacturing facilities in Germany and in the United Kingdom, as well as the upgrade of production facilities to down-gauge beverage cans at various locations. In part due to the latter project, steel consumption decreased by approximately 3% compared to the prior year. Capital expenditures were €30.1 million, €47.9 million and €52.1 million in 2001, 2000 and 1999, respectively. The principal capital expenditures in these periods, other than normal maintenance capital expenditures, included €28.8 million in 1999 to rebuild the Hassloch plant which was damaged by fire and €11.4 million in 2000 to install a second line in Poland.

Financial Instruments and Risk Management

        Schmalbach utilizes derivative instruments in accordance with internationally accepted accounting principles to hedge transactions and control risk. Under these principles, gains and losses generated from derivative transactions are offset against the gains and losses associated with the underlying transactions when a clear assignment of a derivative to such a transaction is documented (International Accounting Standards No. 39). If no clear relationship is established, increases in the fair values of the instruments are added to the instrument's book value while decreases are recognized in current period earnings. Although these derivative transactions involve varying degrees of credit and interest risk, the agreements are with financial institutions and other counter parties, which are expected to perform fully under the terms of the agreements.

        Contracts outstanding at December 31, 2001, relating to aluminum hedging had underlying values totaling €48 million, representing futures transactions for 2003 and 2004.

        Exchange rate hedging transactions are undertaken to stabilize the foreign currency rates for U.S. dollar loans to affiliated companies and purchases of aluminum in U.S. dollars.

        Various interest rate instruments are used to minimize Schmalbach's exposure to interest rate fluctuations. Contracts outstanding at December 31, 2001, included interest caps, cross-currency swaps, quanto swaps and interest options.

4

UNAUDITED SUMMARY PRO FORMA FINANCIAL DATA

        The following table sets forth summary pro forma combined financial data of Schmalbach and Ball derived from the "Unaudited Pro Forma Condensed Combined Financial Data" contained elsewhere herein.

        Prior to July 1, 2002, Schmalbach–Lubeca AG consisted of three operating segments—PET containers, White Cap closures and beverage cans. On July 1, 2002, Schmalbach sold both the PET and White Cap businesses. The Schmalbach historical statements included herein represent the beverage can business and an allocated portion of the corporate headquarters function and exclude the businesses that were sold on July 1, 2002. The Schmalbach combined financial statements include substantially all of the assets, liabilities, results of operations and cash flows attributable to the historical beverage can operations of Schmalbach in addition to an allocated portion of the corporate headquarters function and acquired assets and liabilities of Schmalbach. The combined statement of earnings includes all items of revenue and income generated by the beverage can operations and all items of expense directly incurred by it or charged to it. Certain corporate expenses, assets and liabilities were allocated to the combined financial statements. They include certain historical corporate activities of Schmalbach, relating to the beverage can business, which are not reflective of what the recurring operations of that business under Ball ownership and management will be.

        The unaudited summary pro forma condensed combined financial data should be read in conjunction with:

•

Ball's audited consolidated financial statements and related notes contained in Ball's Annual Report on Form 10-K for the year ended December 31, 2001, Ball's unaudited condensed consolidated financial statements and related notes contained in Ball's Quarterly Report on Form 10-Q for the quarter ended September 29, 2002 and "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in our Annual Report on Form 10-K for the year ended December 31, 2001 and Quarterly Report on Form 10-Q for the quarter ended September 29, 2002, and



•

Schmalbach's audited combined financial statements for the year ended December 31, 2001 and Schmalbach's unaudited combined financial statements for the nine months ended September 30, 2002, together with related notes, as well as "Schmalbach's Management's Discussion and Analysis of Financial Condition and Results of Operations," in each case contained in this Current Report on Form 8-K.

        Adjustments for the transactions are based upon historical financial information of Ball and Schmalbach and certain assumptions that management of Ball believes are reasonable. The acquisition will be accounted for using the purchase method of accounting. Under this method, the purchase price has been allocated to the assets and liabilities acquired based on preliminary estimates of fair value. The actual fair value will be determined upon the consummation of the acquisition and may vary from the preliminary estimates. For purposes of the pro forma information, a total purchase price of $940.4 million has been used, which consists of cash of $885.6 million, the retention of $18.8 million of Schmalbach debt plus acquisition costs of $36 million. The pro forma earnings data does not take into account an anticipated write-off of $5.6 million related to the debt being refinanced in the transactions.

        For purposes of preparing the pro forma financial statements, the combined statements of earnings and cash flows of Schmalbach have been translated at the average of the daily closing rates for the periods presented. These rates were: (1) $0.89671 to €1.00 for the year ended December 31, 2001; (2) $0.89605 to €1.00 for the nine months ended September 30, 2001; and (3) $0.92559 to €1.00 for the nine months ended September 29, 2002. The combined balance sheet as of September 29, 2002 has been translated at the rate of $0.9772 to €1.00.

5

	Year Ended December 31, 2001			Nine Months Ended September 29, 2002			Twelve Months Ended September 29, 2002
	(dollars in millions)
Pro Forma Statement of Earnings Data:
Net sales	$	4,540.8		$	3,771.0		$	4,826.9
Cost of sales (excluding depreciation and amortization)		3,818.3			3,071.9			3,963.5
Depreciation and amortization		186.8			141.8			189.7
Business consolidation costs and other		271.2			(4.2	)		13.3
Selling and administrative		197.5			170.1			228.0
Receivable securitization fees and other		4.1			6.2			7.1
Earnings before interest and taxes		62.9			385.2			425.3
Net earnings (loss)	$	(63.1	)	$	200.0		$	209.8
Other Pro Forma Data:
EBITDA(1)	$	249.7		$	527.0		$	615.0
EBITDA margin		5.5	%		14.0	%		12.7	%
Adjusted EBITDA(1)	$	520.9		$	522.8		$	628.3
Adjusted EBITDA margin		11.5	%		13.9	%		13.0	%
Interest expense	$	137.2		$	99.4		$	133.9
Capital expenditures		95.5			104.8			139.8
Selected Pro Forma Ratios:
Net debt/Adjusted EBITDA								3.1	x
Total debt/Adjusted EBITDA								3.1	x
Adjusted EBITDA/Interest expense								4.7	x
							September 29, 2002 Pro Forma As Adjusted
Pro Forma Balance Sheet Data (end of period):
Cash and cash equivalents							$	58.2
Working capital								84.9
Total assets								3,950.1
Total debt, including current maturities								1,978.3
Shareholders' equity								536.0

(1)

EBITDA represents net earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA represents EBITDA, plus (i) for the year ended December 31, 2001 Ball's nonrecurring business consolidation costs of $271.2 million, (ii) for the 12 months ended September 29, 2002, Ball's nonrecurring business consolidation costs of $17.5 million and Schmalbach's nonrecurring items of $(4.2) million and (iii) for the nine months ended September 29, 2002, Schmalbach's nonrecurring items of $(4.2) million. Schmalbach's nonrecurring items of $(4.2) million include €1.4 million ($1.3 million) of costs under IAS and a $(5.5) million adjustment required under US GAAP. There were no nonrecurring costs for Ball in the nine months ended September 29, 2002, and no nonrecurring costs for Schmalbach in the year ended December 31, 2001. EBITDA and Adjusted EBITDA are presented because we believe they are frequently used by securities analysts, investors and other interested parties in the evaluation of a company's ability to service and/or incur debt. However, other companies in our industry may calculate EBITDA and Adjusted EBITDA differently than we do. EBITDA and Adjusted EBITDA are not measurements of financial performance under accounting principles generally accepted in the U.S. and should not be considered as an alternative to cash flow from operating activities or as a measure of liquidity or an alternative to net income as indicators of our operating performance or any other measures of performance derived in accordance with accounting principles generally accepted in the U.S.

6

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA

        The unaudited pro forma condensed combined financial data are based on the consolidated financial statements of Ball and the combined financial statements of Schmalbach. The unaudited pro forma condensed combined balance sheet at September 29, 2002, is based on the consolidated financial statements of Ball and the combined financial statements of Schmalbach and adjusted to give effect to the transactions as if they had occurred on September 29, 2002. The unaudited pro forma condensed combined statements of earnings for the year ended December 31, 2001, the nine-month period ended September 29, 2002, and the twelve-month period ended September 29, 2002, are based on the consolidated financial statements of Ball and the combined financial statements of Schmalbach and adjusted to give effect to the transactions as if they had occurred on January 1, 2001.

        Prior to July 1, 2002, Schmalbach–Lubeca AG consisted of three operating segments—PET containers, White Cap closures and beverage cans. On July 1, 2002, Schmalbach sold both the PET and White Cap businesses. The Schmalbach historical financial statements included herein represent the beverage can business and an allocated portion of the corporate headquarters function and exclude the businesses that were sold on July 1, 2002. The Schmalbach combined financial statements include substantially all of the assets, liabilities, results of operations and cash flows attributable to the historical beverage can operations of Schmalbach in addition to an allocated portion of the corporate headquarters function and acquired assets and liabilities of Schmalbach. The combined statement of earnings includes all items of revenue and income generated by the beverage can operations and all items of expense directly incurred by it or charged to it. Certain corporate expenses, assets and liabilities were allocated to the combined financial statements. They include certain historical corporate activities of Schmalbach, relating to the beverage can business, which are not reflective of what the recurring operations of the business under Ball ownership and management will be.

        The Schmalbach combined financial statements were prepared in accordance with International Accounting Standards, or IAS, which differ in certain respects from accounting principles generally accepted in the United States, or US GAAP, and were adjusted to US GAAP. The combined statements of earnings were prepared in euros and translated to U.S. dollars at the average of the daily closing rates for the periods presented. The combined balance sheet was translated at the September 27, 2002, noon buying rate in The City of New York of $0.9772 to €1.00. Certain reclassifications were made to the Schmalbach financial statements to conform them to Ball's presentation.

        Adjustments for the transactions are based upon historical financial information of Ball and Schmalbach and certain assumptions that management of Ball believes are reasonable. The acquisition will be accounted for using the purchase method of accounting. Under this method, the purchase price has been allocated to the assets and liabilities acquired based on preliminary estimates of fair value. The actual fair value will be determined upon the consummation of the acquisition and may vary from the preliminary estimates. For purposes of the pro forma information, a total purchase price of $940.4 million has been used, which consists of cash of $885.6 million, the retention of $18.8 million of Schmalbach debt plus acquisition costs of $36 million.

        The pro forma financial data do not necessarily reflect the results of operations or the financial position of Ball that actually would have resulted had the transactions occurred at the date indicated, or project the results of operations or financial position of Ball for any future date or period.

        The unaudited pro forma condensed combined financial data should be read in conjunction with:

•

Ball's audited consolidated financial statements and related notes contained in Ball's Annual Report on Form 10-K for the year ended December 31, 2001, Ball's unaudited condensed consolidated financial statements and related notes contained in Ball's Quarterly Report on Form 10-Q for the quarter ended September 29, 2002 and "Management's Discussion and

7

Analysis of Financial Condition and Results of Operations" contained in our Annual Report on Form 10-K for the year ended December 31, 2001 and Quarterly Report on Form 10-Q for the quarter ended September 29, 2002, and

•

Schmalbach's audited combined financial statements for the year ended December 31, 2001 and Schmalbach's unaudited combined financial statements for the nine months ended September 30, 2002, together with related notes, as well as "Schmalbach's Management's Discussion and Analysis of Financial Condition and Results of Operations," in each case contained in this Current Report on Form 8-K.

8

Unaudited Pro Forma Condensed Combined Statement of Earnings

Year ended December 31, 2001

(dollars in millions, except per share data)

		Ball Historical US GAAP			Schmalbach Historical US GAAP(1)			Other pro forma adjustments US GAAP(2)			Pro forma Total US GAAP
Net sales		$	3,686.1		$	854.7		$	—		$	4,540.8
Cost of sales (excluding depreciation and amortization)			3,142.2			676.3			(0.2	)(a)		3,818.3
Depreciation and amortization			152.5			63.4			(0.6	)(a)		186.8
									3.9	(b)
									(29.2	)(b)
									(3.2	)(c)
Business consolidation cost and other			271.2			—			—			271.2
Selling and administrative			135.6			60.6			1.3	(a)		197.5
Receivable securitization fees and other			10.0			(6.8	)		0.9	(a)		4.1
	Earnings (loss) before interest and taxes		(25.4	)		61.2			27.1			62.9
Interest expense			88.3			14.4			(12.6	)(d)		137.2
									47.1	(e)
	Earnings (loss) before taxes		(113.7	)		46.8			(7.4	)		(74.3	)
Tax provision			9.7			(14.8	)		11.2	(f)		6.1
Minority interests			0.8			0.3			—			1.1
Equity in results of affiliates			4.0			—			—			4.0
	Net earnings (loss)		(99.2	)		32.3			3.8			(63.1	)
Preferred dividends, net of tax			(2.0	)		—			—			(2.0	)
	Earnings (loss) attributable to common shareholders	$	(101.2	)	$	32.3		$	3.8		$	(65.1	)
Earnings (loss) per share:
	Basic	$	(1.85	)							$	(1.19	)
	Diluted(3)	$	(1.85	)							$	(1.19	)
Weighted average common shares outstanding (in thousands):
	Basic		54,880									54,880
	Diluted		58,858									58,858

(1)

Reconciliation of IAS to US GAAP is included on page 16.

(2)

Footnote explanations of pro forma adjustments are included on pages 12 and 13.

(3)

The diluted loss per share is the same as the basic loss per share because the assumed exercise of stock options and conversion of Ball's employee stock ownership plan preferred stock would have been antidilutive.

9

Unaudited Pro Forma Condensed Combined Statement of Earnings

Nine Months Ended September 29, 2002

(dollars in millions, except per share data)

		Ball Historical US GAAP			Schmalbach Historical US GAAP(1)			Other pro forma adjustments US GAAP(2)			Pro forma Total US GAAP
Net sales		$	2,948.7		$	822.3		$	—		$	3,771.0
Cost of sales (excluding depreciation and amortization)			2,475.4			596.5			—			3,071.9
Depreciation and amortization			109.0			32.4			0.2	(a)		141.8
									3.0	(b)
									(2.8	)(c)
Business consolidation costs and other			—			(4.2	)		—			(4.2	)
Selling and administrative			117.0			50.9			2.2	(a)		170.1
Receivable securitization fees and other			2.8			3.0			0.4	(a)		6.2
	Earnings (loss) before interest and taxes		244.5			143.7			(3.0	)		385.2
Interest expense			55.1			3.3			(1.6	)(d)		99.4
									42.6	(e)
	Earnings (loss) before taxes		189.4			140.4			(44.0	)		285.8
Tax provision			(66.3	)		(39.2	)		15.4	(f)		(90.1	)
Minority interests			(1.4	)		—			—			(1.4	)
Equity in results of affiliates			5.7			—			—			5.7
	Net earnings (loss)	$	127.4		$	101.2		$	(28.6	)	$	200.0
Earnings (loss) per common share:
	Basic	$	2.26								$	3.55
	Diluted	$	2.21								$	3.47
Weighted average common shares outstanding (in thousands):
	Basic		56,347									56,347
	Diluted		57,612									57,612

(1)

Reconciliation of IAS to US GAAP is included on page 17.

(2)

Footnote explanations of pro forma adjustments are included on pages 12 and 13.

10

Unaudited Pro Forma Condensed Combined Statement of Earnings

Twelve Months Ended September 29, 2002

(dollars in millions, except per share data)

		Ball Historical US GAAP			Schmalbach Historical US GAAP(1)			Other pro forma adjustments US GAAP(2)			Pro forma Total US GAAP
Net sales		$	3,791.7		$	1,035.2		$	—		$	4,826.9
Cost of sales (excluding depreciation and amortization)			3,190.9			772.8			(0.2	)(a)		3,963.5
Depreciation and amortization			146.8			53.3			(0.5	)(a)		189.7
									4.0 (7.4 (6.5	(b) )(b) )(c)
Business consolidation costs and other			17.5			(4.2	)		—			13.3
Selling and administrative			161.0			64.0			3.0	(a)		228.0
Receivable securitization fees and other			4.1			0.1			2.9	(a)		7.1
	Earnings before interest and taxes		271.4			149.2			4.7			425.3
Interest expense			74.9			7.8			(5.4	)(d)		133.9
									56.6	(e)
	Earnings (loss) before taxes		196.5			141.4			(46.5	)		291.4
Tax provision			(67.9	)		(38.1	)		18.5	(f)		(87.5	)
Minority interests			(1.3	)		(1.0	)		—			(2.3	)
Equity in results of affiliates			8.2			—			—			8.2
	Net earnings (loss)		135.5			102.3			(28.0	)		209.8
Preferred dividends, net of tax			(0.2	)		—			—			(0.2	)
	Net earnings (loss) attributable to common shareholders	$	135.3		$	102.3		$	(28.0	)	$	209.6
Earnings (loss) per common share:
	Basic	$	2.42								$	3.74
	Diluted	$	2.36								$	3.65
Weighted average common shares outstanding (in thousands):
	Basic		55,993									55,993
	Diluted		57,373									57,373

(1)

Reconciliation of IAS to US GAAP is included on page 18.

(2)

Footnote explanations of pro forma adjustments are included on pages 12 and 13.

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NOTES TO UNAUDITED PRO FORMA CONDENSED
COMBINED STATEMENT OF EARNINGS

(a)

Historically, certain corporate overhead costs were allocated to the beverage can business. For purposes of preparing Schmalbach's historical financial statements, included elsewhere herein, where it was possible to specifically identify costs as relating to the beverage can business, those costs were charged directly to it. Where it was not possible to specifically identify the costs relating to a particular business, a portion of the costs were allocated to the beverage can business based on revenues. In addition, certain corporate expenses were allocated to the combined financial statements of Schmalbach for the sole purpose of preparing them. These included historical corporate activities of Schmalbach which are either unrelated to the beverage can business or not reflective of the recurring operations on a standalone basis. Accordingly, we have made certain adjustments that reflect the corporate overhead costs that we anticipate Schmalbach will incur as a wholly-owned subsidiary of Ball.

(b)

Represents the reversal of goodwill amortization from Ball's and Schmalbach's historical earnings to reflect the adoption of Statement of Financial Accounting Standards No. 142 retroactive to January 1, 2001, and the amortization of other identified intangible assets over a period of 7.3 years. Ball and Schmalbach did not amortize goodwill in the nine months ended September 29, 2002.

(c)

Represents the change in depreciation resulting from the step-up of plant and equipment to their respective fair values, as required by Statement of Financial Accounting Standards No. 141, as well as changing the historical useful lives of the plant and equipment to their estimated remaining useful lives. Plant and equipment are being depreciated over periods from two to 25 years.

(d)

Represents the elimination of interest expense on Schmalbach debt not assumed by Ball Corporation. Ball Corporation is assuming approximately $15.6 million in loans, $3.1 million in capital leases and an amount up to $27.9 million under the accounts receivable securitization program.

(e)

Interest expense for the year ended December 31, 2001, was adjusted to reflect the following borrowings:

		Weighted Average
Debt Instrument		Average Principal		Interest Rate		Interest Expense
		(dollars in millions)
Existing Senior Notes due 2006		$	300.0	7.75	%	$	23.3
Existing Senior Subordinated Notes due 2008			250.0	8.25	%		20.6
New Senior Notes due 2012*			200.0	7.50	%		15.0
Multi-currency Term Loans			878.3	5.15	%		45.2
Multi-currency Revolving Credit Facilities			416.8	4.29	%		17.9
Other Debt			148.3	5.12	%		7.6
Finance Cost Amortization							6.8
Commitment, LC & Other Interest Expense							0.8
	Total					$	137.2

A change in interest rates of 1/8% would have increased or decreased interest expense by approximately $1.6 million.

12

Interest expense for the nine months ended September 29, 2002, was adjusted to reflect the following borrowings:

		Weighted Average
Debt Instrument		Average Principal		Interest Rate		Interest Expense
		(dollars in millions)
Existing Senior Notes due 2006		$	300.0	7.75	%	$	17.4
Existing Senior Subordinated Notes due 2008			250.0	8.25	%		15.5
New Senior Notes due 2012*			200.0	7.50	%		11.3
Multi-currency Term Loans			828.5	5.13	%		31.9
Multi-currency Revolving Credit Facilities			290.7	4.36	%		9.5
Other Debt			110.7	4.70	%		3.9
Finance Cost Amortization							5.1
Commitment, LC & Other Interest Expense							4.8
	Total					$	99.4

A change in interest rates of 1/8% would have increased or decreased interest expense by approximately $1.1 million.

Interest expense for the 12 months ended September 29, 2002, was adjusted to reflect the following borrowings:

		Weighted Average
Debt Instrument		Average Principal		Interest Rate		Interest Expense
		(dollars in millions)
Existing Senior Notes due 2006		$	300.0	7.75	%	$	23.3
Existing Senior Subordinated Notes due 2008			250.0	8.25	%		20.6
New Senior Notes due 2012*			200.0	7.50	%		15.0
Multi-currency Term Loans			836.3	5.13	%		42.9
Multi-currency Revolving Credit Facilities			299.4	4.34	%		13.0
Other Debt			119.5	4.93	%		5.9
Finance Cost Amortization							6.7
Commitment, LC & Other Interest Expense							6.5
	Total					$	133.9

A change in interest rates of 1/8% would have increased or decreased interest expense by approximately $1.5 million.

*

If the offering of $200 million of new notes is not consummated on or before the closing of the acquisition, Ball Corporation expects instead to borrow $200 million under the Tranche C Term Loan Facility of the new credit facilities. The assumed interest rate on the New Senior Notes due 2012 is not necessarily indicative of the rate on the New Senior Notes, if issued, and the actual rate will be subject to market conditions.

(f)

Income tax expense was adjusted to reflect an effective tax rate of 35% on the pro forma adjustments, which is the expected effective tax rate for Ball.

13

Unaudited Pro Forma Condensed Combined Balance Sheet
September 29, 2002
(dollars in millions)

			Ball Historical			Schmalbach Historical US GAAP(1)		Adjustments for Non-acquired Assets/Liabilities(2)			Other Pro Forma Adjustments(2)			Pro Forma Total
ASSETS
Current assets
	Cash and cash equivalents		$	58.2		$	39.5	$	(39.5	)(a)	$	—		$	58.2
	Accounts receivable, net			299.4			153.1		(12.8	)(b)		6.6	(c)		446.3
	Inventories, net			397.6			95.7		—			8.1	(d)		501.4
	Deferred income tax benefit and prepaid expenses			64.5			43.0		(35.0	)(b)		0.1	(c)		72.6
		Total current assets		819.7			331.3		(87.3	)		14.8			1,078.5
Property, plant and equipment, net				931.3			426.1		—			0.2	(c)		1,403.5
												(426.1	)(e)
												472.0	(f)
Goodwill				355.8			588.0		—			(588.0	)(g)		1,110.6
												754.8	(f)
Intangibles and other assets				275.3			54.0		(27.1	)(b)		0.3	(c)		357.5
												29.9	(h)
												(5.6	)(i)
												30.7	(h)
Total assets			$	2,382.1		$	1,399.4	$	(114.4	)	$	283.0		$	3,950.1
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
	Short-term debt and current portion of long-term debt		$	134.1		$	76.3	$	(60.4	)(a)	$	(25.5	)(j)	$	124.5
	Accounts payable			287.1			133.6		—			4.1	(c)		424.8
	Accrued employee costs and other current liabilities			242.7			192.6		—			9.0	(c)		444.3
		Total current liabilities		663.9			402.5		(60.4	)		(12.4	)		993.6
Long-term debt				888.9			17.8		—			947.1	(j)		1,853.8
Employee benefit obligations, deferred taxes and other liabilities				282.2			254.9		(6.4	)(b)		30.5	(f)		561.2
		Total liabilities		1,835.0			675.2		(66.8	)		965.2			3,408.6
Minority interests				5.5			—		—			—			5.5
Shareholders' equity
	Common stock			508.8			—		—			—			508.8
	Retained earnings			522.2			724.2		(47.6	)		(676.6	)(k)		516.6
												(5.6	)(i)
	Accumulated other comprehensive loss			(54.0	)		—		—			—			(54.0	)
	Treasury stock			(435.4	)		—		—			—			(435.4	)
		Total shareholders' equity		541.6			724.2		(47.6	)		(682.2	)		536.0
Total liabilities and shareholders' equity			$	2,382.1		$	1,399.4	$	(114.4	)	$	283.0		$	3,950.1

(1)

Reconciliation of IAS to US GAAP is included on pages 20 and 21.

(2)

Footnote explanations of pro forma adjustments are included on page 15.

14

NOTES TO UNAUDITED PRO FORMA CONDENSED
BALANCE SHEET
(dollars in millions)

(a)

Represents the elimination of cash and debt balances that will not be purchased or assumed by Ball, as provided in the purchase agreement.

(b)

Represents the elimination of balances related to a minority investment Schmalbach has in Impress, a food can manufacturer, that will not be purchased by Ball, as provided for in the purchase agreement.

(c)

Represents the adjustment from the Schmalbach historical financial statement balances related to allocated assets and liabilities that are being purchased and assumed by Ball.

(d)

Inventory was adjusted to record the fair market value as of the acquisition date.

(e)

Fixed assets were adjusted to eliminate the existing fixed assets from the Schmalbach historical financial statements and record the fair market value as of the acquisition date.

(f)

These amounts reflect the preliminary estimates of the adjustments necessary to record the Schmalbach assets acquired and liabilities assumed at their respective fair values. The total purchase price was determined and allocated as follows:

Cash purchase price for Schmalbach beverage can business	$	885.6
Plus assumed debt		18.8
Plus acquisition costs		36.0
Total purchase price	$	940.4
Purchase price allocated to:
Tangible assets	$	731.0
Goodwill		754.8
Other intangible assets		87.8
Liabilities, including assumed debt		(633.2	)
Total purchase price allocated	$	940.4

Tangible assets includes a step-up for fixed assets of $45.9 million in addition to the step-up of fixed assets of approximately $105 million that occurred in Schmalbach's historical financial statements in August 2000, as well as an inventory step-up of $8.1 million. Other intangible assets include an increase in the fair value, previously valued at August 2000, for a customer-based intangible asset from $21.4 million to $52.1 million and $29.9 million of acquisition financing costs.

(g)

Goodwill was adjusted to eliminate the existing goodwill from the Schmalbach historical financial statements.

(h)

Other assets were adjusted to reflect the capitalization of (i) $29.9 million of financing costs that will be amortized over the life of the new notes and the new credit facilities and (ii) the allocation of $30.7 million of additional intangible assets related to a customer-based intangible asset that will be amortized over an estimated life of 7.3 years.

(i)

Other assets were adjusted by $5.6 million to reflect the nonrecurring cost of writing off, effective at closing, the remaining capitalized finance costs related to the refinanced debt.

(j)

Long-term debt was adjusted to reflect: (i) gross proceeds of $200 million from the issuance of the new notes and net additional borrowings of $721.6 million under the new credit facilities and (ii) the reclassification of $25.5 million of short-term debt to long-term debt.

(k)

The adjustment reflects the elimination of the former owner's equity of Schmalbach.

15

RECONCILIATION OF IAS TO US GAAP
OF SCHMALBACH UNAUDITED STATEMENTS OF EARNINGS

        The following table reconciles from IAS to US GAAP the Schmalbach unaudited combined statement of earnings for the year ended December 31, 2001. The amounts have been translated at an average daily closing rate for the period of $0.89671 to €1.00.

Unaudited Pro Forma Condensed Combined Statement of Income
Year ended December 31, 2001
(in millions)

		Schmalbach IAS (in €)			US GAAP Adjustments (in €)(1)			Schmalbach US GAAP (in €)			Reclassifications to Ball Presentation (in €)			Schmalbach US GAAP in Ball Presentation (in €)			Schmalbach US GAAP (in $)
Net sales		€	953.1		€	—		€	953.1		€	—		€	953.1		$	854.7
Cost of sales			777.9			13.4 (3.9) (0.2) 0.1 (0.1) (0.2)	(i) (ii) (iii)  (iv) (viii) (ix)		787.0			(32.8	)		754.2			676.3
Depreciation and amortization			—			—			—			70.7			70.7			63.4
Business consolidation costs and other			—			—			—			—			—			—
Selling expenses			27.0			—			27.0			(27.0	)		—
Selling and administrative			—			—			—			67.6			67.6			60.6
General and administrative expenses			46.2			—			46.2			(46.2	)		—
Other operating income			(44.5	)		20.0	(iii)		(24.5	)		24.5			—
Receivable securitization fees and other			—			—			—			(7.6	)		(7.6	)		(6.8	)
Other operating expenses			32.5			16.4 0.3	(ii)  (ix)		49.2			(49.2	)		—
	Earnings (loss) before interest and taxes		114.0			(45.8	)		68.2			—			68.2			61.2
Interest expense			29.7			(13.4 (0.4 0.2	)(i) )(iv)  (viii)		16.1			—			16.1			14.4
	Earnings (loss) before taxes		84.3			(32.2	)		52.1			—			52.1			46.8
Tax provision			(23.1	)		6.6	(v)		(16.5	)		—			(16.5	)		(14.8	)
Minority interests			0.3			—			0.3			—			0.3			0.3
	Net earnings (loss)	€	61.5		€	(25.6	)	€	35.9		€	—		€	35.9		$	32.3

(1)

Footnote explanations of reconciliation of IAS to US GAAP are included on page 19.

16

        The following table reconciles from IAS to US GAAP the Schmalbach unaudited combined statement of earnings for the nine months ended September 30, 2002. The amounts have been translated at an average daily closing rate for the period of $0.92559 to €1.00.

Unaudited Pro Forma Condensed Combined Statement of Income
Nine Months Ended September 29, 2002
(in millions)

		Schmalbach IAS (in €)			US GAAP Adjustments (in €)(1)			Schmalbach US GAAP (in €)			Reclassifications to Ball Presentation (in €)			Schmalbach US GAAP in Ball Presentation (in €)			Schmalbach US GAAP (in $)
Net sales		€	888.4		€	—		€	888.4		€	—		€	888.4		$	822.3
Cost of sales			663.1			10.5 (4.2 (2.5 0.1 (0.1 (0.4	(i) )(ii) )(iii)  (iv) )(viii) )(ix)		666.5			(22.0	)		644.5			596.5
Depreciation and amortization			—			—			—			35.0			35.0			32.4
Business consolidation costs and other			—			—			—			(4.5	)		(4.5	)		(4.2	)
Selling expenses			27.1			—			27.1			(27.1	)		—			—
Selling and administrative			—			—			—			55.0			55.0			50.9
General and administrative expenses			34.3			—			34.3			(34.3	)		—			—
Other operating income			(25.6	)		—			(25.6	)		25.6			—			—
Receivable securitization fees and other			—			—			—			3.2			3.2			3.0
Other operating expenses			41.9			(5.9 (5.8 0.7	)(vi) )(vii)  (ix)		30.9			(30.9	)		—			—
	Earnings before interest and taxes		147.6			7.6			155.2			—			155.2			143.7
Interest expense			14.0			(10.5) 0.1	(i)  (viii)		3.6			—			3.6			3.3
	Earnings before taxes		133.6			18.0			151.6			—			151.6			140.4
Tax provision for income taxes			(41.4	)		(1.0	)(v)		(42.4	)		—			(42.4	)		(39.2	)
Minority interests			—			—			—			—			—			—
	Net earnings	€	92.2		€	17.0		€	109.2		€	—		€	109.2		$	101.2

(1)

Footnote explanations of reconciliation of IAS to US GAAP are included on page 19.

17

        The following table reconciles from IAS to US GAAP the Schmalbach unaudited combined statement of earnings for the 12 months ended September 30, 2002. The amounts have been translated at the following average daily closing rates: (1) $0.89671 to €1.00 for the year ended December 31, 2001; (2) $0.89605 to €1.00 for the nine months ended September 30, 2001; and (3) $0.92559 to €1.00 for the nine months ended September 29, 2002.

Unaudited Pro Forma Condensed Combined Statement of Income
Twelve Months Ended September 29, 2002
(in millions)

		Schmalbach IAS (in €)			US GAAP Adjustments (in €)(1)			Schmalbach US GAAP (in €)			Reclassifications to Ball Presentation (in €)			Schmalbach US GAAP in Ball Presentation (in €)			Schmalbach US GAAP (in $)
Net sales		€	1,125.3		€	—		€	1,125.3		€	—		€	1,125.3		$	1,035.2
Cost of sales			866.4			13.9 (3.2 (2.7 0.1 (0.1 (0.6	(i) )(ii) )(iii)  (iv) )(viii) )(ix)		873.8			(33.1	)		840.7			772.8
Depreciation and amortization			—			—			—			58.3			58.3			53.3
Business consolidation costs and other			—			—			—			(4.5	)		(4.5	)		(4.2	)
Selling expenses			36.7			—			36.7			(36.7	)		—			—
Selling and administrative			—			—			—			69.5			69.5			64.0
General and administrative expenses			43.5			—			43.5			(43.5	)		—			—
Other operating income			(57.0	)		20.0	(iii)		(37.0	)		37.0			—			—
Receivable securitization fees and other			—			—			—			0.1			0.1			0.1
Other operating expenses			53.7			4.1 (5.9 (5.8 1.0	(ii) )(vi) )(vii)  (ix)		47.1			(47.1	)		—			—
	Earnings (loss) before interest and taxes		182.0			(20.8	)		161.2			—			161.2			149.2
Interest expense			22.3			(13.9 0.2	)(i)  (viii)		8.6			—			8.6			7.8
	Earnings (loss) before taxes		159.7			(7.1	)		152.6			—			152.6			141.4
Tax provision			(46.9	)		5.8	(v)		(41.1	)		—			(41.1	)		(38.1	)
Minority interests			(1.1	)		—			(1.1	)		—			(1.1	)		(1.0	)
	Net earnings (loss)	€	111.7		€	(1.3	)	€	110.4		€	—		€	110.4		$	102.3

(1)

Footnote explanations of reconciliation of IAS to US GAAP are included on page 19.

18

NOTES TO IAS TO US GAAP RECONCILIATION OF
SCHMALBACH UNAUDITED STATEMENTS OF EARNINGS

(i)

Under IAS, Schmalbach reflected the interest cost element of pension expense as interest expense. Under US GAAP, the interest cost element is reflected in cost of sales.



(ii)

Effective August 31, 2000, a new basis of accounting was established resulting from certain transactions made by Schmalbach's parent company. The adjustment reflects the effects of depreciation of fixed assets and the amortization of goodwill and intangible assets, after applicable taxes. There was no other impact to the unaudited pro forma condensed combined statements of earnings as a result of the new basis of accounting.



(iii)

In December 2000, it was determined in accordance with IAS and US GAAP that an impairment charge of €20 million was required for certain operating assets. In the fourth quarter 2001, events occurred which impacted the future expected cash flows of these operating assets such that a restoration of the 2000 impairment loss was required under IAS. However, under US GAAP, restoration of an impairment loss is not permitted. Therefore, the impairment loss has been reinstated and the resulting impact on the carrying value and the depreciation expense has been added back under US GAAP.



(iv)

This adjustment reflects the effect of capitalization under US GAAP of financing costs related to significant plant and equipment construction projects.



(v)

Current and deferred taxes have been provided on all adjustments at the applicable local country rate to which the adjustment applies.



(vi)

In June 2002, Schmalbach's investment in China was sold, resulting in a loss on sale. The loss included the write-off of €5.9 million for goodwill that had been previously offset against equity under IAS. For US GAAP purposes, this goodwill was previously written-off in 2000. Therefore, a US GAAP adjustment is required to reverse the charge taken for IAS. The US GAAP difference results from the cost basis difference between US GAAP and IAS at the time of sale.



(vii)

Represents the reversal of goodwill amortization from Schmalbach's historical earnings to reflect the adoption of Statement of Financial Accounting Standards (SFAS) No. 142.



(viii)

Represents the effects of adjusting IAS accounting to capitalize certain leases in accordance with SFAS No. 13.



(ix)

Represents the reversal of the amortization of negative goodwill recorded by Schmalbach in connection with the acquisition of the production facility in La Ciotat, France, and the depreciation of the related adjustment to property, plant and equipment.

19

RECONCILIATION OF IAS TO US GAAP
OF SCHMALBACH UNAUDITED COMBINED BALANCE SHEET

         The following table reconciles from IAS to US GAAP the Schmalbach unaudited combined balance sheet as of September 30, 2002. The amounts have been translated at a rate of $0.9772 to €1.00.

Unaudited Pro Forma Condensed Combined Balance Sheet
September 30, 2002
(in millions)

		Schmalbach IAS (in €)		US GAAP Adjustments (in €)			Schmalbach US GAAP (in €)		Reclassifications to Ball Presentation (in €)			Schmalbach US GAAP in Ball Presentation (in €)		Schmalbach US GAAP (in $)
ASSETS
Current assets
Liquid funds		€	40.4	€	—		€	40.4	€	(40.4	)	€	—	$	—
Cash and temporary investments			—		—			—		40.4			40.4		39.5
Accounts receivable, trade			122.5		—			122.5		(122.5	)		—		—
Accounts receivable, net			—		—			—		156.7			156.7		153.1
Inventories, net			97.9		—			97.9		—			97.9		95.7
Other receivables and assets			34.2		—			34.2		(34.2	)		—		—
Other prepaid expenses			0.1		—			0.1		(0.1	)		—		—
Deferred income tax benefit and prepaid expenses			—		—			—		44.0			44.0		43.0
	Total current assets		295.1		—			295.1		43.9			339.0		331.3
Property, plant and equipment, net			320.6		136.0 2.6 1.1 (17.4 (6.9	(i)  (ii)  (iii) )(iv) )(v)		436.0		—			436.0		426.1
Intangible assets			127.7		470.3 4.0 5.8	(i)  (v)  (vi)		607.8		(607.8	)		—		—
Shares in associated companies			0.1		—			0.1		(0.1	)		—		—
Other financial assets			64.3		—			64.3		(64.3	)		—		—
Goodwill			—		—			—		601.7			601.7		588.0
Deferred taxes			5.5		2.5	(vii)		8.0		(8.0	)		—		—
Intangibles and other assets			—		20.7	(i)		20.7		34.6			55.3		54.0
	Total assets	€	813.3	€	618.7		€	1,432.0	€	—		€	1,432.0	$	1,399.4

20

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Short-term debt and current portion of long-term debt			€	—	€	—		€	—	€	78.1		€	78.1	$	76.3
Accounts payable				—		—			—		136.7			136.7		133.6
Accrued employee costs and other current liabilities				—		—			—		197.1			197.1		192.6
	Total current liabilities			—		—			—		411.9			411.9		402.5
Reserves and accrued liabilities
Pension reserves and accruals for similar obligations				251.2		—			251.2		(251.2	)		—		—
Accrued taxes				84.9		49.5	(i)		134.4		(134.4	)		—		—
Other reserves and accrued liabilities				32.8		(1.3	)(i)		31.5		(31.5	)		—		—
				368.9		48.2			417.1		(417.1	)		—		—
Liabilities due to banks and bonds				93.1		3.1	(ii)		96.2		(96.2	)		—		—
Accounts payable, trade				136.7		—			136.7		(136.7	)		—		—
Other liabilities				40.3		—			40.3		(40.3	)		—		—
				270.1		3.1			273.2		(273.2	)		—		—
Deferred income				0.6		—			0.6		(0.6	)		—		—
Long-term debt				—		—			—		18.2			18.2		17.8
Employee benefit obligations, deferred taxes and other liabilities				—		—			—		260.8			260.8		254.9
	Total liabilities			639.6		51.3			690.9		—			690.9		675.2
Minority interests				—		—			—		—			—		—
Shareholders' equity				173.7		567.4			741.1		(741.1	)		—		—
	Common stock			—		—			—		—			—		—
	Retained earnings			—		—			—		741.1			741.1		724.2
	Accumulated other comprehensive loss			—		—			—		—			—		—
	Treasury stock			—		—			—		—			—		—
		Total shareholders' equity		173.7		567.4			741.1		—			741.1		724.2
		Total liabilities and shareholders' equity	€	813.3	€	618.7		€	1,432.0	€	—		€	1,432.0	$	1,399.4

(1)

Footnote explanations of reconciliation of IAS to US GAAP are included on page 22.

21

NOTES TO IAS TO US GAAP RECONCILIATION
OF SCHMALBACH UNAUDITED BALANCE SHEET

(i)

Effective September 1, 2000, a new basis of accounting was established resulting from certain transactions consummated by Schmalbach's parent company. As a result of the establishment of this new basis of accounting, property, plant and equipment, intangible assets, inventories and goodwill were stepped-up at the date of the establishment of the new basis of accounting, net of any applicable depreciation or amortization.



(ii)

Certain operating leases have been capitalized in accordance with US GAAP.



(iii)

Financing costs related to significant plant and equipment construction projects have been capitalized in accordance with US GAAP.



(iv)

In December 2000, it was determined in accordance with IAS and US GAAP that an impairment charge was required for certain operating assets. In the fourth quarter of 2001, events occurred which impacted the expected future cash flows of these operating assets such that a restoration of the 2000 impairment loss was required in accordance with IAS. Under US GAAP, restoration of an impairment loss is not permitted. Therefore, the impairment loss has been reinstated and the resulting impact on the carrying value of the related operating assets has been added back in accordance with US GAAP.



(v)

In 2001, negative goodwill was recorded in connections with the acquisition of a production facility in La Ciotat, France. Under US GAAP, negative goodwill is not recorded. As a result, the negative goodwill has been reversed and a corresponding adjustment has been made to the carrying value of property, plant and equipment net of the effects of the difference in the depreciation of property, plant and equipment under US GAAP versus the amortization of the negative goodwill under IAS.



(vi)

Amortization of goodwill has been added back to goodwill in accordance with Statement of Financial Accounting Standard No. 142, which eliminates the amortization of goodwill.



(vii)

Current and deferred taxes have been provided on all adjustments at the applicable local statutory rate to which the adjustment relates.

22

SIGNATURE

        Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

BALL CORPORATION (Registrant)
By:	/s/  RAYMOND J. SEABROOK Name: Raymond J. Seabrook Title: Senior Vice President and Chief Financial Officer

Date: November 20, 2002

23

Ball Corporation and Subsidiaries
Form 8-K
November 20, 2002

EXHIBIT INDEX

Exhibit	Description
99.1	Combined Historical Financial Statements of Schmalbach–Lubeca Beverage Cans
99.2	Combined Interim Financial Statements of Schmalbach–Lubeca Beverage Cans
99.3	Press Release dated November 20, 2002

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Ball Corporation Current Report on Form 8-K Dated November 20, 2002
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF SCHMALBACH-LUBECA BEVERAGE CANS
UNAUDITED SUMMARY PRO FORMA FINANCIAL DATA
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA
Unaudited Pro Forma Condensed Combined Statement of Earnings Year ended December 31, 2001 (dollars in millions, except per share data)
Unaudited Pro Forma Condensed Combined Statement of Earnings Nine Months Ended September 29, 2002 (dollars in millions, except per share data)
Unaudited Pro Forma Condensed Combined Statement of Earnings Twelve Months Ended September 29, 2002 (dollars in millions, except per share data)
Unaudited Pro Forma Condensed Combined Statement of Income Year ended December 31, 2001 (in millions)
Unaudited Pro Forma Condensed Combined Statement of Income Nine Months Ended September 29, 2002 (in millions)
Unaudited Pro Forma Condensed Combined Statement of Income Twelve Months Ended September 29, 2002 (in millions)
Unaudited Pro Forma Condensed Combined Balance Sheet September 30, 2002 (in millions)
SIGNATURE
EXHIBIT INDEX

EX-99.1

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Exhibit 99.1

In accordance with general instruction B.2 of Form 8-K, the information in this exhibit is furnished pursuant to Item 9 and shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section.

REPORT OF INDEPENDENT ACCOUNTANTS

        To the Supervisory Board and Shareholders of Schmalbach–Lubeca AG

        In our opinion, the accompanying combined balance sheets as of December 31, 2001 and December 31, 2000 and the related combined statements of income, cash flows and division equity for the 12 months ended December 31, 2001, the 4 months ended December 31, 2000, the 8 months ended August 31, 2000 and the 12 months ended December 31, 1999 present fairly, in all material respects, the financial position of the Beverage Can Division of Schmalbach-Lubeca AG as defined on page 5 in conformity with International Accounting Standards. These financial statements are the responsibility of the company's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

        The Beverage Can Division of Schmalbach-Lubeca AG has not operated as a separate entity. Accordingly, the basis of presentation as explained in the notes to the financial statements include the allocation of certain costs, that have been deemed to be incurred by the parent company on behalf of the beverage division. There can be no assurance that such cost allocations will be indicative of future results or indicative of costs that would have been incurred if it had been a separate stand alone entity.

        International Accounting Standards vary in certain significant respects from accounting principles generally accepted in the United States. The application of the latter would have affected the determination of combined net income expressed in Euros for the year ended December 31, 2001, four months ended December 31, 2000, eight months ended August 31, 2000, and year ended December 31, 1999 and the determination of combined divisional equity and combined financial position at December 31, 2001 and 2000. The extent of this impact as of and for the year ended December 31 2001, four months ended December 31, 2000, and eight months ended August 31, 2000 is summarised in Note 34 to the combined financial statements.

Düsseldorf, October 30, 2002
PwC Deutsche Revision
Aktiengesellschaft
Wirtschaftsprüfungsgesellschaft

Schwarzhof	ppa. Schmidt
Wirtschaftsprüfer	Wirtschaftsprüfer

COMBINED HISTORICAL FINANCIAL STATEMENTS
OF SCHMALBACH–LUBECA BEVERAGE CANS AND SUBSIDIARIES

Schmalbach–Lubeca

Beverage Cans

Combined Statements of Income

(in thousands of Euros)

	Note	For the 12 months ended 31/12/01		For the 4 months ended 31/12/00		For the 8 months ended 31/08/00		For the 12 months ended 31/12/99
Sales		953,101		289,825		579,359		764,271
Cost of Sales	1	(777,935	)	(260,166	)	(475,365	)	(624,184	)
Gross profit		175,166		29,659		103,994		140,087
Selling expenses	2	(26,955	)	(6,573	)	(12,463	)	(20,861	)
General and administrative expenses	3	(46,201	)	(11,174	)	(34,344	)	(42,150	)
Other operating income	4	44,560		895		29,678		85,899
Other operating expenses	5	(32,465	)	(27,814	)	(16,978	)	(41,437	)
Income from operating activities		114,105		(15,007	)	69,887		121,538
Interest expense	6	(29,692	)	(12,672	)	(15,749	)	(21,168	)
Income/(loss) before income taxes and minority interests		84,413		(27,679	)	54,138		100,370
Taxes on income	7	(23,158	)	9,598		(18,546	)	(16,495	)
Income/(loss) before minority interests		61,255		(18,081	)	35,592		83,875
Minority interests share of loss/(income)	8	276		(1,837	)	(1,548	)	(3,423	)
Net income/(loss)		61,531		(19,918	)	34,044		80,452

The accompanying notes are an integral part of these combined financial statements.

1

Schmalbach–Lubeca

Beverage Cans

Combined Balance Sheet

(in thousands of Euros)

		Note	31/12/01	31/12/00
Assets
Fixed assets
	Goodwill and intangible assets	13	101,408	113,078
	Property, plant and equipment	13	367,613	320,430
	Shares in associated companies	16	6,825	6,852
	Other financial assets	17	64,850	64,940
			540,696	505,300
Current assets
	Inventories	18	97,498	92,081
	Accounts receivable, trade	19	73,891	63,531
	Other receivables and assets	19	24,442	29,894
	Liquid funds	20	5,131	2,075
			200,962	187,581
Deferred charges and prepaid expenses
	Deferred taxes	21/25	13,081	—
	Other prepaid expenses	21	1,036	797
			14,117	797
Total Assets			755,775	693,678
Liabilities and Divisional Equity
Divisional equity
	S-L AG investment in Beverage Can Product Group	22	4,742	(63,678	)
Minority interests		8	20,555	23,450
Reserves and accrued liabilities
	Pension reserves and accruals for similar obligations	23/24	248,321	247,658
	Accrued taxes	23/25	41,583	34,747
	Other reserves and accrued liabilities	23	25,431	34,773
			315,335	317,178
Liabilities
	Liabilities due to banks	27	67,059	89,807
	Liabilities due parent	27	173,950	157,428
	Accounts payable, trade	27	118,665	121,310
	Other liabilities	27	54,628	40,267
			414,302	408,812
Deferred Income			841	7,916
Total Liabilities and Divisional Equity			755,775	693,678

The accompanying notes are an integral part of these combined financial statements.

2

Schmalbach–Lubeca

Beverage Cans

Development of Divisional Equity

(in thousands of Euros)

	Divisional Equity
As at December 31, 1998	(170,142	)
Currency adjustments (Note 14)	6,646
Net income	80,452
As at December 31, 1999	(83,044	)
Currency adjustments (Note 14)	5,863
Net income	34,044
As at August 31, 2000	(43,137	)
Currency adjustments (Note 14)	(623	)
Net loss	(19,918	)
As at December 31, 2000	(63,678	)
Currency adjustments (Note 14)	6,889
Net income	61,531
As at December 31, 2001	4,742

The accompanying notes are an integral part of these combined financial statements.

3

Schmalbach–Lubeca

Beverage Cans

Combined Statements of Cash Flows

(in thousands of Euros)

			Note (33)	For the 12 months ended 31/12/01		For the 4 months ended 31/12/00		For the 8 months ended 31/08/00		For the 12 months ended 31/12/099
	Operations
	Net income/(loss)			61,531		(19,918	)	34,044		80,452
	+	Depreciation and amortization		58,015		31,949		36,221		59,536
	–	(Reduction)/increase in accruals		(10,184	)	51,649		(60,381	)	(39,715	)
	–	Other (income)/expense not affecting cash		(27,964	)	(30,895	)	40,647		1,199
	+	Reduction/(increase) in inventories, trade accounts receivable and other assets		22,373		41,782		(64,643	)	37,689
	–	(Reduction)/increase in trade accounts payable and other liabilities		(29,441	)	(22,151	)	53,376		(20,067	)
I.	Cash flow from operations			74,330		52,416		39,264		119,094
	Investing activities
	+	Proceeds from the disposal of fixed assets		—		2,465		—		—
	–	Expenditure on fixed assets		(30,139	)	(15,737	)	(32,149	)	(52,094	)
	–	Expenditure on intangible assets		—		—		(5,372	)	(4,587	)
	+	Proceeds from disposal of financial assets		—		5,595		5,798		—
	–	Expenditure on financial assets		—		—		—		(5,263	)
	+	Proceeds from the sale of consolidated companies and other business units		26,108		—		—		—
	–	Expenditure for the acquisition of consolidated companies and other business units		(59,986	)	(1,120	)	(8,707	)	(339	)
	–	Other		1,028		(82	)	661		292
II.	Cash flow from investing activities			(62,989	)	(8,879	)	(39,769	)	(61,991	)
	Financing activities
	–	Dividend payments to minority shareholders		(3,269	)	(3,577	)	(3,263	)	—
	+	Increase/(decrease) in borrowing		(5,565	)	(59,808	)	6,794		(45,411	)
III.	Cash flow from financing activities			(8,834	)	(63,385	)	3,531		(45,411	)
	Funds available
	Changes in funds affecting payments			2,507		(19,848	)	3,026		11,692
	+	Changes in funds resulting from exchange rates and valuations		549		194		1,033		867
	+	Funds at the beginning of the period		2,075		21,729		17,670		5,111
IV.	Funds at the end of the period			5,131		2,075		21,729		17,670

The accompanying notes are an integral part of these combined financial statements.

4

Schmalbach–Lubeca

Beverage Cans

Notes to the Combined Financial Statements

Schmalbach–Lubeca AG

        Schmalbach–Lubeca ("S-L AG") is established in the legal form of a German Aktiengesellschaft (AG) and is located in Ratingen, Germany. The company is registered in the commercial register of Dusseldorf, Germany. S-L AG is a subsidiary of AV Packaging GmbH, Munich ("AVP"), which holds 97.6% of the shares in S-L AG, with the remaining 2.4% of the shares held by external shareholders. Substantially all the shares in AVP are held by E.ON AG and Allianz Capital Partners GmbH, a subsidiary of Allianz AG. At December 31, 2001, S-L AG consisted of 8 German and 70 non-German fully consolidated companies, one associated company included at equity and one investment included at cost. S-L AG was comprised of three operating segments, PET containers, White Cap closures and Beverage cans. PET containers manufactures returnable and one-way PET bottles, preforms and tooling and moulds for injection moulding and stretch-blow moulding machines. White Cap closures manufactures plastic and composite closures for oxygen-sensitive, vacuum-packaged and aseptically vacuum-packaged food products and beverages. Beverage cans manufactures two-piece tinplate and aluminium beverage cans and ends ("Beverage Can Operations").

Divestments

        On May 8, 2002, S-L AG announced agreement for the sale of both the PET container and White Cap closures operations to the Australian packaging company Amcor Limited ("Amcor Transaction"). The transaction closed on July 1, 2002.

        On August 29, 2002, S-L AG announced agreement for the sale of the stock of S-L AG (the "Ball Transaction") to the American based packaging company Ball Corporation ("Ball"). Ball will be acquiring the German-based company for approximately EUR 922.3 million in cash plus assumption of S-L AG's pension liabilities, which, for purposes of establishing the purchase price, were valued at December 31, 2001 at approximately EUR 245 million, less the assumption of approximately EUR 16 million of debt. The final purchase price is subject to working capital and other post-closing adjustments. The transaction is expected to close in late 2002 or early 2003.

        Proceeds from the Amcor Transaction will be used to liquidate all debt, except the EUR 16 million of debt to be assumed by Ball. Any remaining proceeds will be distributed to AVP prior to the closing of the Ball Transaction. In addition, a reorganization of S-L AG will occur prior to the close of the Ball Transaction in order to remove certain other assets and liabilities that Ball is not acquiring, primarily a share investment in Impress Metal Packaging Holdings B.V, which is accounted for at cost.

        At the closing of the Ball Transaction, S-L AG will primarily consist of the Beverage Can Operations, the S-L AG corporate headquarters function and certain acquired assets and liabilities of S-L AG. At the closing, the Beverage Can Operations will consist of 10 can plants, 2 end facilities, and a technical center. These facilities are located in Germany, the United Kingdom, France, Netherlands, and Poland. An investment in China was sold in June 2002.

Basis of combination and presentation

        These combined financial statements include substantially all of the assets, liabilities, results of operations and cash flows attributable to the historical Beverage Can Operations of S-L AG in addition to the S-L AG corporate headquarters function allocated to the Beverage Can Operations and certain acquired assets and liabilities to be acquired of S-L AG (hereinafter referred to collectively as

5

"Beverage Cans"). The Beverage Can Operations constitute a single business segment based primarily in Europe. As such, no segment reporting is included in the Beverage Cans combined financial statements. Beverage Cans is not a separate legal entity and has not been separately financed. The combined financial statements are prepared on a historical cost basis from the books and records of the Beverage Can Operations and S-L AG. An eight-month and four-month stub period have been presented for 2000 because of the acquisition of S-L AG by AV Packaging more fully described in Note 34.

        The Beverage Cans combined financial statements have been prepared on the basis of established accounting methods, practices, procedures and policies and the accounting judgments and estimation methodologies used by Beverage Cans and S-L AG as explained below. Beverage Cans combined financial statements are prepared in accordance with the International Accounting Standards (IAS) of the International Accounting Standards Board (IASB), taking into account the interpretations of the Standing Interpretations Committee (SIC). IAS differs in certain respects from generally accepted accounting principles (US GAAP) in the United States and certain other countries. Material differences between IAS and US GAAP that effect the Beverage Cans combined financial statements are discussed in Note 34 to the combined financial statements.

        The combined statement of income includes all items of revenue and income generated by the Beverage Can Operations and all items of expense directly incurred by it and expenses charged or allocated to it by S-L AG in the normal course of business. Certain S-L AG corporate expenses were allocated to the combined financial statements of Beverage Cans for the sole purpose of preparing the combined financial statements. The basis of allocation of S-L AG expenses, assets and liabilities is discussed in Summary of Significant Accounting Policies.

Summary of Significant Accounting Policies

Allocation of S-L AG Corporate assets, liabilities and expenses

        The Beverage Cans combined financial statements include an allocation of selected corporate assets and liabilities and expenses of S-L AG's corporate headquarters, including certain expenses recorded in S-L AG consolidation entries (referred to collectively as "Corporate").

Expense Allocations

        The Beverage Can Operations, as a part of Beverage Cans, receive the benefit of certain services rendered by S-L AG (the allocation of Interest and Taxes are discussed separately below). Costs incurred primarily include the costs of the headquarter function such as personnel costs, supplies, outside services and other costs related to the corporate, accounting, legal, treasury, tax, information services and purchasing functions. Where it is possible to specifically identify these costs as relating to the Beverage Can Operations, the costs are charged directly to Beverage Cans, at cost. Where it is possible to specifically identify costs related to the PET containers and White-Cap closure operations, the costs are charged directly to those operations and are therefore excluded from the Beverage Cans combined financial statements. Where it is not possible to specifically identify the costs as relating to Beverage Cans or the PET container and White-Cap closure operations, a portion of the total costs for these services are allocated, at cost, to Beverage Cans. The allocation process for these costs differs based on whether the costs relate to S-L AG operations within Germany, S-L AG operations outside Germany or S-L AG costs not specifically related to or specifically identifiable as German or non-German operations.

6

        The costs specifically identified as relating to the operations within Germany are allocated to all operating units (i.e., Beverage Can Operations, PET containers and White-Cap closures) based on their respective revenues within Germany relative to total consolidated S-L AG revenues within Germany. The costs specifically identified as relating to the operations outside of Germany are allocated to all operating units based upon their respective revenues outside of Germany relative to total consolidated S-L AG revenues outside of Germany. Finally, the costs that cannot be specifically identified as relating to German or non-German operations are allocated to all operating units based upon their respective revenues relative to total consolidated S-L AG revenues.

        These allocated costs are included in the appropriate line on the Beverage Cans combined statement of income according to the nature of the costs.

Interest Expense

        Interest expense is determined for the Beverage Cans combined financial statements based upon the level of debt assigned to Beverage Cans relative to the overall debt of consolidated S-L AG. The allocation of debt is discussed below. Interest related to debt held by, or directly-attributable to, the fully included subsidiaries that contain the Beverage Can Operations is retained in the Beverage Cans combined financial statements.

Taxes

        Beverage Cans' results have been historically included in the S-L AG, and subsidiary, applicable country and local tax returns that in some cases were filed in combined group returns, including the PET container and White Cap closure operations. The provision for income taxes, the related assets and liabilities and the disclosures in the footnotes for the Beverage Cans combined financial statements are presented and based upon a calculation of a standalone Beverage Cans tax provision on a separate return basis for each company in the Beverage Can Operations. There is also a tax provision based on the allocation of the Corporate costs assigned to Beverage Cans and the net income before taxes of the German beverage can plants and technical center owned by S-L AG.

Balance Sheet Allocations

        The assets and liabilities of Corporate are allocated to Beverage Cans in a manner consistent with the allocation of expenses. However, the pension obligations of S-L AG, excluding obligations for active participants related to the PET containers and White-Cap closure operations, have been included in the Beverage Cans combined financial statements consistent with the Share Sale and Transfer Agreement between Ball and AVP. The debt reflected in the combined financial statements of Beverage Cans consists of all debt directly attributable to the Beverage Can Operations and advances from S-L AG ("Advances"). Advances are provided or repaid for all periods based upon the net cash inflow or outflow of Beverage Cans in excess of the debt directly attributable to the Beverage Can Operations. Interest on Advances is recorded in Beverage Cans at a rate consistent with the average cost of third party debt, including in some periods related party debt, obtained by S-L AG.

        Management believes that the accounting judgments, estimations and allocations made in preparing these combined financial statements are reasonable under the circumstances; however, the costs allocated are not necessarily indicative of the costs that would have been incurred if Beverage Cans had incurred these costs and performed these functions as a standalone entity. There can be no assurances that such allocations will necessarily be indicative of future results or what the financial

7

position and results of the operations of Beverage Cans would have been had it been a separate, standalone entity during the periods presented.

Principles of Combination

        These combined financial statements include the accounts of Beverage Cans after eliminating profits and losses on transactions within the Beverage Cans group. Fully combined in the balance sheet for Beverage Cans at December 31, 2001, are 4 German and 11 non-German subsidiaries, along with three operating plants and the technical center owned by S-L AG. The fully included subsidiaries consist of Continental Can Europe Beteiligungsgesellschaft GmbH, Schmalbach–Lubeca Getrankedosen GmbH, Schmalbach–Lubeca Unterstutzungskasse GmbH, Continental Can UK Holding Company Ltd., Continental Can Company Ltd., Schmalbach–Lubeca Nederland B.V., Continental Can Benelux B.V., Continental Can France S.A.S., Continental Can La Ciotat S.A.S., Continental Can Handelsgesellschaft GmbH, Continental Can Polska Sp. z.o.o., Continental Can Trading Sp. z.o.o., Continental Can Europe Espana S.A. i.L., Schmalbach–Lubeca South East Europe d.o.o., and Pacific Can Enterprises Company Limited. North Pacific Can Co. (Dalian) Ltd., and Recal Organizacja Odzysku S.A., associate investments, are included under the equity method of accounting. The combined financial statements also fully include three dormant companies and four insignificant companies whose assets and liabilities are allocated to Beverage Cans. These seven companies will be transferred to an affiliate of AVP prior to closing of the Ball Transaction.

        The combined financial statements include the consolidation of the subsidiaries specified above. Significant intercompany transactions are eliminated. The associate investments included under the equity method of accounting are 50% or less owned investments and Beverage Cans does not control, but exercises significant influence over, operating and financial affairs. Other investments that are less than 20% owned are carried at fair value, which for non-quoted shares is historical cost.

        Subsidiaries are eliminated from the combined balance sheet when control ceases. Goodwill relating to the divested subsidiaries or parts of subsidiaries is taken into account as a disposal affecting net earnings.

Use of Estimates

        International accounting principles require management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and reported revenues and expenses. These estimates are based on historical experience and various other assumptions believed to be reasonable under the circumstances. Actual results could differ from these estimates under different assumptions or conditions.

Revenue Recognition

        Sales of beverage cans and ends are recorded only when delivery has occurred and there is a transfer of risk and rewards of ownership, when persuasive evidence of a contract or arrangement exists and collectibility is reasonably assured. Reported sales result from the sale of goods to customers.

Inventories

        Inventories are valued at average acquisition or production cost. In the case of raw materials, lower replacement costs do not lead to devaluation if the contributions made as a result of further

8

processing are large enough to guarantee net realizable values. Production cost includes not only the directly attributable costs (material and personnel) and special individual production costs (e.g. tooling and moulds) but also material and production overheads and depreciation on a pro rata basis on the assumption of normal capacity utilization levels. Costs of non-utilized capacities, administration costs, superannuating costs, fringe benefit costs and interest charges are recorded as a period cost. Finished goods are stated at lower of cost or net realizable value.

Foreign currency transactions and translation

        Receivables and liabilities to be settled in a currency other than a location's measurement currency are valued at the historical rate in the individual balance sheets. At year-end the valuation is carried out using the mean rate on the balance sheet date. Profits and losses from changes in the exchange rate between the date on which they are earned or incurred and the balance sheet date are taken into account affecting net earnings.

        In the profit and loss accounts, earnings and expenses in foreign currency are valued at the exchange rates applicable at the dates on which they are earned or incurred. The differences due to the translation of the equity capital at changed reporting date exchange rates are shown in the earned surplus and/or minority interests. In the profit and loss account, the earnings, the expenses, the net income/loss for the year and its appropriation are translated at the annual average market rate. The difference between translation at annual average market rates and the mean rate prevailing on the balance sheet date is charged to the earned surplus with no effect on net income. The subsidiaries included in Beverage Cans financial statements as a rule use the Euro as the measurement currency with the exception of subsidiaries in the United Kingdom, Czech Republic, China and Poland which use the British pound sterling, the Czech Koruna, Hong Kong dollar/China Reminbi and Polish Zloty, respectively, as the measurement currency.

9

        The main exchange rates on which combined financial statements are based are listed in the following table:

        Main exchange rates:

Currencies	For the 12 months ended 31/12/01	For the 4 months ended 31/12/00	For the 8 months ended 31/08/00	For the 12 months ended 31/12/99
Mean rate on the balance sheet date:
1 EUR = GBP	0.6118	0.6241	0.6145	0.6218
1 EUR = PLN	3.5190	3.8498	3.9109	4.1587
1 EUR = USD	0.8904	0.9305	0.8936	1.0045
1 EUR = HKD	6.9432	7.2578	6.9695	7.8004
1 EUR = CZK	N/A	35.0470	35.3655	36.1031
Average annual rate:
1 EUR = GBP	0.6219	0.6109	0.6153	0.6587
1 EUR = PLN	3.6696	4.0216	4.0764	4.2258
1 EUR = USD	0.8960	0.9207	0.9463	1.0657
1 EUR = HKD	6.9881	7.2235	7.4446	8.2685
1 EUR = CZK	34.0685	35.7209	36.0590	36.9059

Research and development expenses

        Research costs are expensed as incurred. Development costs are reviewed to determine whether the conditions for capitalization required by IAS 38 are satisfied with regard to the uncertainty of the success until the product is launched on the market. Development efforts that are not carried out on the basis of an order placed by a customer do not as a rule meet these conditions and are expensed in the period incurred. No development costs have been capitalized in the periods presented in any of these combined financial statements.

Property, plant and equipment

        Property, plant and equipment is stated at acquisition or production cost less scheduled depreciation. The production costs of internally manufactured assets by the company itself include directly attributable individual costs and appropriate overheads excluding any financing costs.

        Property, plant and equipment are depreciated by the straight-line method. At each balance sheet date the management assesses whether there is any indication of impairment. When carrying amount of an asset is greater than its estimated recoverable amount the asset is written down immediately to its recoverable amount. Write-ups are made as the reasons for these unscheduled depreciation charges no longer apply. Fixed assets which are no longer used for operating purposes are posted as disposals in

10

the fixed assets development schedule when sold or scrapped. The scheduled depreciable lives for tangible assets are based on the following estimates of their commercially useful lives:

Buildings	20 to 33 years
Machinery	6 to 12 years
Customer service equipment	6 to 10 years
Operational and office equipment	3 to 10 years
Motor vehicles	3 to 5 years

Goodwill and Intangibles

        Trademarks, patents, licenses and similar rights, and licenses to such rights, are recorded in the financial statements at acquisition or production cost and subsequently depreciated by the straight-line method over their commercially useful life. Goodwill is depreciated over 30 years on a straight-line basis. A useful life of 30 years has been assigned to goodwill due to the stability of the market for Beverage Cans' products, the slow rate of technological change in the industry and the fact that we expect the demand for Beverage Cans' existing products to continue to be strong. Intangibles and goodwill are annually evaluated for impairment or when events suggest that they may be impaired or may not be fully recoverable. Negative goodwill is being amortized over a period of 5 years.

Taxes on Income

        The positive and negative effects of taxes on income are taken into account in the combination affecting net income, and deferred taxes are included at the tax rate expected for the applicable company included in the combined financial statements. Deferred taxes reflect the future tax consequences of differences between the tax bases of assets and liabilities and their financial reporting amounts at each balance sheet date, based on enacted income tax laws and tax rates. Deferred tax assets and operating tax loss carryforwards are recognized to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized.

Derivative Financial Instruments

        Beverage Cans uses derivative financial instruments for the purpose of hedging exposures to fluctuations in interest rates, foreign currency exchange rates and raw materials purchasing. The company uses mark-to-market accounting for all derivatives for the periods presented, as a clear assessment of the derivative to the hedged transaction has not been documented according to IAS 39.

Leases

        Beverage Cans has entered into various operating leases the payments under which are treated as rentals and charged to the profit and loss account on a straight-line basis over the lease terms.

Provisions

        Provisions are recognized when Beverage Cans has a present legal or constructive obligation as a result of past events when it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made. Where Beverage Cans expects a provision to be reimbursed, the reimbursement is recognized as an asset only when the reimbursement is virtually certain. Beverage Cans recognizes the estimated liability to replace products still under

11

warranty at the balance sheet date. The provision is calculated based on historical experience of the level of replacements.

Explanatory notes to the profit and loss account

(1) Cost of sales

        The cost of sales comprises the costs of the products sold and the acquisition costs of trading stock. In accordance with IAS 2, it includes overheads, e.g. the costs of production management, planning, administration, plant security, environmental protection, utility supplies and waste disposal, in addition to the material and personnel costs which can be directly allocated, and impairment charges.

	For the 12 months Ended 31/12/01	For the 4 months ended 31/12/00	For the 8 months ended 31/08/00	For the 12 months ended 31/12/99
	(in thousands of Euros)
Material costs	511,213	159,870	291,922	349,592
Personnel expenses	86,839	28,664	53,849	79,367
Depreciation	47,759	17,337	31,100	51,803
Maintenance	52,176	19,066	34,411	44,075
Freight	37,162	10,152	25,630	29,057
Other expenses	42,786	25,077	38,453	70,290
	777,935	260,166	475,365	624,184

(2) Selling expenses

        The selling expenses include advertising costs, allowance for doubtful accounts receivable and logistics costs as well as the costs of the sales departments.

(3) General and administrative expenses

        The costs of management and initial and further training and administration costs such as data processing, purchasing, training and accounting, are included in the general and administrative expenses.

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(4) Other operating income

	For the 12 months ended 31/12/01	For the 4 months ended 31/12/00	For the 8 months ended 31/08/00	For the 12 months ended 31/12/99
	(in thousands of Euros)
Reversal of Accruals	3,383	486	4,981	6,905
Disposal of fixed assets	3,048	374	6,712	41,346
Write-ups	20,000	—	—	—
Business interruption insurance payment	—	—	—	13,000
Exchange rate earnings	5,441	—	5,517	9,325
Others	12,688	35	12,468	15,323
	44,560	895	29,678	85,899

(5) Other operating expenses

	For the 12 months ended 31/12/01		For the 4 months ended 31/12/00		For the 8 months ended 31/08/00		For the 12 months ended 31/12/99
	(in thousands of Euros)
Restructuring expenses	(152	)	(401	)	(166	)	(3,333	)
Amortization of goodwill and intangibles	(5,453	)	(12,497	)	(3,453	)	(5,024	)
Loss on disposal of fixed assets	(60	)	(145	)	—		—
Research and development	(13,725	)	(3,659	)	(9,175	)	(13,001	)
Exchange rate losses	(8,480	)	(7,697	)	(1,906	)	(12,226	)
Others	(4,595	)	(3,415	)	(2,278	)	(7,853	)
	(32,465	)	(27,814	)	(16,978	)	(41,437	)

        The EUR 12.5 million of goodwill amortization for the four months ended December 31, 2000, includes the write-off of EUR 10.8 million related to the China investment. An impairment charge on the China goodwill was taken as the expected future discounted cash flows indicated that the goodwill had been impaired.

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(6) Interest expense

	For the 12 months ended 31/12/01		For the 4 months ended 31/12/00		For the 8 months ended 31/08/00		For the 12 months ended 31/12/99
	(in thousands of Euros)
Interest income	1,771		449		897		1,267
(thereof from affiliated companies)	—		—		—		—
Interest expense	(18,083	)	(8,661	)	(7,726	)	(9,437	)
(thereof from affiliated companies)	(14,429	)	(7,280	)	(7,504	)	(9,018	)
Non cash income and expenses:
Interest included in the allocation to pension reserves	(13,380	)	(4,460	)	(8,920	)	(12,998	)
	(29,692	)	(12,672	)	(15,749	)	(21,168	)

(7) Taxes on income

	For the 12 months ended 31/12/01		For the 4 months ended 31/12/00	For the 8 months ended 31/08/00		For the 12 months ended 31/12/99
	(in thousands of Euros)
Actual taxes on income	(20,106	)	6,254	(25,234	)	(18,719	)
Deferred taxes on income	(3,052	)	3,344	6,688		2,224
	(23,158	)	9,598	(18,546	)	(16,495	)

        Deferred taxes are calculated by applying the applicable country tax rates expected at the time when the taxes will be paid. The tax rate assumptions are based on the legal regulations in force or adopted on the balance sheet date.

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        Deferred tax assets resulting from tax loss carry forwards are only recognized to the extent that it is probable future taxable profit will be available to offset the tax loss carry forwards.

	2001 EUR m		2001 %		2000 EUR m		2000 %		1999 EUR m		1999 %
Income (loss) before income taxes and minority interests	84.4				26.5				100.4
Anticipated tax rate			39.0				39.0				43.0
Anticipated tax expenditure	32.9		100.0		10.3		100.0		43.2		100.0
Increase (decrease) in tax due to change in deferred tax assets not recognized	(7.8	)	(23.7	)	8.6		75.4		—		—
Reduction in tax due to tax holiday and tax-free income	(2.2	)	(6.7	)	(3.9	)	(34.2	)	(9.3	)	(21.5	)
Changes in tax due to non-tax-deductible expenses and (non-taxable income)	2.9		8.8		8.3		72.8		(17.4	)	(40.3	)
Decrease in tax due to subsidiary stock loss writedowns	—		—		(19.0	)	(166.7	)	—		—
Other tax effects	(2.6	)	(7.9	)	4.6		44.7		—		—
Actual tax expenditure	23.2		70.5		8.9		78.1		16.5		38.2
Actual tax rate in %			27.5	%			33.6	%			16.4	%

(8) Profit/loss due to minority shareholders and development of minority interests

        Dividends to minority shareholders in 2001 and 2000 were annually EUR 3.3 million to minority shareholders (10% ownership) in a subsidiary (CCUK) of a Beverage Can subsidiary via a preferential dividend. These minority shareholders have a call option to purchase an additional 41% of CCUK at fair value (determined by discounted cash flow method) which is exercisable if CCUK does not make the preferential dividend payment for two consecutive years and there is no purchaser for the shares (10%) currently held by the minority shareholders at a purchase price equal to or greater than an agreed minimum sum. The Beverage Can subsidiary also has a call option, exercisable upon the exercise of the minority shareholders call option to repurchase at fair value, but no less than an agreed minimum sum, the shares (10%) currently held by the minority shareholders.

        The minority interest share of net income after taxes were comprised of minority interest in Beverage Cans operations in the United Kingdom and China.

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        Minority interests on the balance sheet for 2000 and 2001 developed as follows (in thousands of Euros):

As at December 31, 1999	23,058
Accrued dividends	(2,216	)
Currency adjustments	853
Net income	1,548
As at August 31, 2000	23,243
Accrued dividends	(1,108	)
Currency adjustments	(522	)
Net income	1,837
As at December 31, 2000	23,450
Accrued dividends	(3,324	)
Currency adjustments	705
Net income	(276	)
As at December 31, 2001	20,555

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(9) Personnel expenses

        Total personnel expenses included in cost of sales, selling and general and administrative expenses were as follows:

	For the 12 months ended 31/12/01	For the 4 months ended 31/12/00	For the 8 months ended 31/08/00	For the 12 months ended 31/12/99
	(in thousands of Euros)
Wages and salaries	99,666	32,257	61,005	88,151
Social security and similar expenses	18,631	5,863	11,078	17,959
Pension expenses	5,495	1,324	2,395	2,903
	123,792	39,444	74,478	109,013

(10) Employees

        The average number of employees in 2001 was 2,566 (previous year 2,494).

(11) Total remuneration paid to members of the Supervisory Board and the Board of Management

        The total remuneration paid to the members of the Supervisory Board amounts to EUR 88,000, EUR 192,000 and EUR 177,418 and that to the members of the Board of Management of Schmalbach–Lubeca AG totals EUR 2,180,000, EUR 1,755,000 and EUR 1,661,700, in 2001, 2000 and 1999, respectively. Total provisions of EUR 16,425,000, EUR 16,509,000 and EUR 16,133,308, in 2001, 2000 and 1999, respectively, were recorded to cover pension commitments to former board members or directors and their surviving dependants. Pension payments totaled EUR 1,635,000, EUR 1,650,000 and EUR 1,580,404 in 2001, 2000 and 1999, respectively.

(12) Related Party Transactions

        All debt included in the accounts of Beverage Cans that has not been obtained from third party lenders has been provided by S-L AG, the owner of the Beverage Can Operations. S-L AG also provides various services to Beverage Cans, which are included in the results of operations of Beverage Cans as discussed in the Notes to the Financial Statements "Allocation of S-L AG Corporate assets, liabilities, and expenses." Additionally, Beverage Cans, through S-L AG, has entered into several insurance contracts with Allianz Versicherung and a power supply contract with E.ON Benelux, a subsidiary of E.ON. Both E.ON and Allianz are direct or indirect significant shareholders of AVP, the parent company of S-L AG. These contracts were concluded based on arm's length terms and normal conditions. There were no other business relations with affiliated companies and persons in the Beverage Cans group, significant shareholders or other related parties.

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Explanatory notes to the balance sheet

(13) Fixed asset, goodwill and intangible assets

        The development of fixed assets, goodwill and intangible assets is shown below:

			2000 Opening Balance		Additions		Change in Consolidation— Additions	Disposals		Reclass and Transfers		Change in Consolidation— Disposals		Currency Diffs		2000 Ending Balance
			(in thousands of Euros)
I.	Intangible Assets Acquisition/manufacturing cost
	1.	Trademarks, patents, licenses, and similar rights and licenses to such rights	12,737		3,205		1,164	(36	)	2,955		(94	)	76		20,007
	2.	Goodwill	173,740		(2	)	6,448	(5,778	)	(5,873	)	—		(46	)	168,489
	3.	Negative Goodwill	(14	)	—		—	—		14		—		—		—
	4.	Development costs/self-manufactured intangible assets	18		—		—	—		(18	)	—		—		—
	5.	Advances paid on intangible assets	168		129		—	(166	)	(57	)	—		—		74
	Subtotal		186,649		3,332		7,612	(5,980	)	(2,979	)	(94	)	30		188,570
	Provision for depreciation and write-downs
	1.	Trademarks, patents, licenses, and similar rights and licenses to such Rights	10,149		735		291	(2	)	608		(97	)	95		11,779
	2.	Goodwill	58,935		16,039		—	(5,325	)	(5,901	)	—		(35	)	63,713
	3.	Negative Goodwill	—		—		—	—		—		—		—		—
	4.	Development costs/self-manufactured intangible assets	8		—		—	28		(37	)	—		1		—
	5.	Advances paid on intangible assets	—		—		—	—		—		—		—		—
	Subtotal		69,092		16,774		291	(5,299	)	(5,330	)	(97	)	61		75,492
	Net book value
	1.	Trademarks, patents, licenses, and similar rights and licenses to such Rights	2,588		2,470		873	(34	)	2,347		3		(19	)	8,228
	2.	Goodwill	114,805		(16,041	)	6,448	(453	)	28		—		(11	)	104,776
	3.	Negative Goodwill	(14	)	—		—	—		14		—		—		—
	4.	Development costs/self-manufactured intangible assets	10		—		—	(28	)	19		—		(1	)	—
	5.	Advances paid on intangible assets	168		129		—	(166	)	(57	)	—		—		74
	Total intangible assets		117,557		(13,442	)	7,321	(681	)	2,351		3		(31	)	113,078

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II.	Property, plant and equipment Acquisition/manufacturing cost
	1.	Land, leasehold rights and buildings including buildings on non-owned land	110,577		212		5,339	(931	)	(497	)	(23	)	561	115,238
	2.	Technical equipment, plant and machinery	595,794		20,617		17,533	(4,782	)	22,170		(17,397	)	1,909	635,844
	3.	Other equipment, operational and office equipment	49,753		2,551		1,204	(1,899	)	1,676		(682	)	45	52,648
	4.	Advance payments and construction in Progress	13,912		24,506		—	943		(26,439	)	5,561		33	18,516
	Subtotal		770,036		47,886		24,076	(6,669	)	(3,090	)	(12,541	)	2,548	822,246
	Provision for depreciation and write-downs
	1.	Land, leasehold rights and buildings including buildings on non-owned land	43,229		4,126		991	(187	)	243		(21	)	18	48,399
	2.	Technical equipment, plant and machinery	363,160		42,648		6,818	(3,523	)	11,840		(11,907	)	108	409,144
	3.	Other equipment, operational and office equipment	33,727		4,609		946	(1,631	)	3,593		(697	)	21	40,568
	4.	Advance payments and construction in progress	(1,136	)	13		—	1,137		3,691		—		—	3,705
	Subtotal		438,980		51,396		8,755	(4,204	)	19,367		(12,625	)	147	501,816
	Net book value
	1.	Land, leasehold rights and buildings Including buildings on non-owned land	67,348		(3,914	)	4,348	(744	)	(740	)	(2	)	543	66,839
	2.	Technical equipment, plant and machinery	232,634		(22,031	)	10,715	(1,259	)	10,330		(5,490	)	1,801	226,700
	3.	Other equipment, operational and office equipment	16,026		(2,058	)	258	(268	)	(1,917	)	15		24	12,080
	4.	Advance payments and construction in progress	15,048		24,493		—	(194	)	(30,130	)	5,561		33	14,811
	Total property, plant and equipment		331,056		(3,510	)	15,321	(2,465	)	(22,457	)	84		2,401	320,430

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			2001 Opening Balance	Additions		Change in Consolidation— Additions	Disposals		Reclass and Transfers		Change in Consolidation— Disposals		Currency Diffs	2001 Ending Balance
			(in thousands of Euros)
I.	Intangible Assets Acquisition/manufacturing cost
	1.	Trademarks, patents, licenses, and similar rights and licenses to such rights	20,007	132		407	(38	)	444		(116	)	292	21,128
	2.	Goodwill	168,489	—		—	—		(28	)	—		374	168,835
	3.	Negative Goodwill	—	(4,954	)	—	—		—		—		—	(4,954	)
	4.	Development costs/self-manufactured intangible assets	—	—		—	—		—		—		—	—
	5.	Advances paid on intangible assets	74	289		—	—		(57	)	(15	)	1	292
	Subtotal		188,570	(4,822	)	407	(38	)	359		(131	)	667	185,301
	Provision for depreciation and write-downs
	1.	Trademarks, patents, licenses, and similar rights and licenses to such rights	11,779	2,009		374	(11	)	52		(62	)	209	14,350
	2.	Goodwill	63,713	6,015		—	—		—		—		61	69,789
	3.	Negative Goodwill	—	(246	)	—	—		—		—		—	(246	)
	4.	Development costs/self-manufactured intangible assets	—	—		—	—		—		—		—	—
	5.	Advances paid on intangible assets	—	—		—	—		—		—		—	—
	Subtotal		75,492	7,778		374	(11	)	52		(62	)	270	83,893
	Net book value
	1.	Trademarks, patents, licenses, and similar rights and licenses to such rights	8,228	(1,877	)	33	(27	)	392		(54	)	83	6,778
	2.	Goodwill	104,776	(6,015	)	—	—		(28	)	—		313	99,046
	3.	Negative Goodwill	—	(4,708	)	—	—		—		—			(4,708	)
	4.	Development costs/self-manufactured intangible assets	—	—		—	—		—		—		—	—
	5.	Advances paid on intangible assets	74	289		—	—		(57	)	(15	)	1	292
	Total intangible assets		113,078	(12,311	)	33	(27	)	307		(69	)	397	101,408

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II.	Property, plant and equipment Acquisition/manufacturing cost
	1.	Land, leasehold rights and buildings including buildings on non-owned land	115,238	3,085		32,183	(142	)	2,178		(8,654	)	1,824	145,712
	2.	Technical equipment, plant and machinery	635,844	10,443		72,407	(1,350	)	10,965		(16,420	)	8,902	720,791
	3.	Other equipment, operational and office equipment	52,648	1,786		2,661	(757	)	4,351		(1,007	)	615	60,297
	4.	Advance payments and construction in progress	18,516	14,825		342	(117	)	(17,643	)	(176	)	318	16,065
	Subtotal		822,246	30,139		107,593	(2,366	)	(149	)	(26,257	)	11,659	942,865
	Provision for depreciation and write-downs
	1.	Land, leasehold rights and buildings including buildings on non-owned land	48,399	3,207		7,568	—		(1,096	)	(2,884	)	423	55,617
	2.	Technical equipment, plant and machinery	409,141	41,789		36,976	(1,271	)	(13,194	)	(4,025	)	4,340	473,756
	3.	Other equipment, operational and office office equipment	40,571	6,356		2,205	(748	)	(1,981	)	(962	)	438	45,879
	4.	Advance payments and construction in progress	3,705	(1,115	)	—	—		(2,590	)	—		—	—
	Subtotal		501,816	50,237		46,749	(2,019	)	(18,861	)	(7,871	)	5,201	575,252
	Net book value
	1.	Land, leasehold rights and buildings including buildings on non-owed land	66,839	(122	)	24,615	(142	)	3,274		(5,770	)	1,401	90,095
	2.	Technical equipment, plant and machinery	226,703	(31,346	)	35,431	(79	)	24,159		(12,395	)	4,562	247,035
	3.	Other equipment, operational and office equipment	12,077	(4,570	)	456	(9	)	6,332		(45	)	177	14,418
	4.	Advance payments and construction in progress	14,811	15,940		342	(117	)	(15,053	)	(176	)	318	16,065
	Total property, plant and equipment		320,430	(20,098	)	60,844	(347	)	18,712		(18,386	)	6,458	367,613

        In December 2000, it was determined that an impairment charge of EUR 20 million was required for certain operating assets with a carrying value of EUR 23.1 million as the discounted cash flows for

21

the respective assets indicated an impairment had been incurred. The impairment loss is included in cost of sales in the income statement. The recoverable amount of the assets, primarily plant, equipment and machinery, was determined on the basis of its value using a discount rate of approximately 6.0%.

        In the fourth quarter of 2001, events occurred, primarily related to the disposition of the Czech plant described in Note 15, which increased the expected future cash flows of these operating assets such that a restoration of the full amount of EUR 20 million impairment loss was required and recorded in December 2001. The reversal of the impairment loss is included in other operating income in the income statement.

        Intangibles include trademark, patents, licenses and similar rights and data processing software. The additions are primarily due to the installation of the SAP R/3 software at the Beverage Cans facilities.

(14) Currency adjustments in divisional equity

Currency adjustments (in thousands of Euros)	For the 12 months ended 31/12/01	For the 4 months ended 31/12/00		For the 8 months ended 31/08/00
Changes from the translation of foreign financial statements into EUR	6,889	(623	)	5,863

(15) Acquisitions and divestitures

        In 2000, Rexam PLC ("Rexam"), a competitor in Europe, purchased the beverage can business of American National Can including operations in Europe. Antitrust considerations in Europe mandated Rexam to divest itself of certain of its plants, including some of the acquired plants. Effective October 1, 2001, Beverage Cans acquired for approximately EUR 34.5 million 100% of the shares in Continental Can La Ciotat S.A.S., France. Liquid funds of EUR 4.1 million were acquired in this transaction. The fair market value of the La Ciotat assets exceeded the purchase price resulting in negative goodwill of EUR 4.9 million. The net assets of La Ciotat S.A.S. at the date of acquisition amounted to EUR 39.4 million comprising of EUR 79.7 million assets and EUR 40.3 million liabilities. Beverage Cans also acquired from Rexam for approximately EUR 25.6 million the net assets of a plant located in Runcorn, United Kingdom. The net assets of the plant in Runcorn at the date of acquisition amounted to EUR 25.6 million. Both of these transactions were accounted for as purchase business combinations. Concurrently, the shares in Schmalbach–Lubeca Czech Republic s.r.o. were sold to Rexam for approximately EUR 25.6 million and resulted in a loss of EUR 0.2 million. The net assets of Schmalbach–Lubeca Czech Republic s.r.o. at the date of the disposal amounted to EUR 26.1 million assets and 0.3 million liabilities. Due to the sale of Schmalbach–Lubeca Czech Republic s.r.o., significant production volumes have been allocated to Beverage Cans' Netherlands operations, leading to improved, positive cash flows for that operation.

(16) Shares in associated companies

        The shares in associated companies relate to the 25.5% interest in Dalian North Pacific Can Co. Ltd. Dalian, China, which are accounted for using the equity method and a 50% investment in Recal Organizacja Odzysku S.A.

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(17) Other financial assets

        The main non-consolidated holding is Impress Metal Packaging Holdings B.V., Deventer ("Impress"), at EUR 27.7 million which is accounted for at cost. Fair value cannot be reliably measured, as there is no quoted market price and there are no other methods of reasonably estimating the fair value. The loans to companies in which an interest is held contain a subordinate non-terminable loan to Impress totaling EUR 35.8 million, which will be paid out upon the sale of the majority shareholding in Impress, upon liquidation of the company or at the latest after ten years. Annual interest rate amounts to 6%. In the event that Impress is offered or traded on the stock exchange, the loan can be converted into a shareholding.

        The holding in Impress and the holdings of S-L AG and its subsidiaries in certain recycling companies are carried at fair value, which for non-quoted shares is assumed to be historical cost. These shares are not quoted on the market, but there is no indication that the market valuation would deviate significantly from the acquisition costs. The same applies to the loan made to Impress B.V.

        The other loans fundamentally concern loans to customers and staff, for which no market values can be readily determined. These loans are therefore valued at acquisition cost, and in the case of low-interest or interest-free loans, at net present value.

        The financial assets declared are fundamentally to be classified as available for sale.

(18) Inventories

        Inventories are valued at average acquisition or production cost. In the case of raw materials, lower replacement costs do not lead to devaluation if the contributions made as a result of further processing are large enough to guarantee net realizable values.

        Inventories were comprised of:

	31/12/01 EUR 000s	31/12/00 EUR 000s
Raw materials and supplies	41,875	49,329
Work in progress	843	1,119
Finished goods	54,776	41,629
Advance payments	4	4
	97,498	92,081

        Neither in the current year nor in the previous year were there security for debt restrictions on the right of disposal/assignment of inventories.

        EUR 6.8 million of the inventories declared as at 31.12.2001 are carried at their lower realizable values rather than at their acquisition or production cost (previous year EUR 4.1 million). There was no income from write-ups of inventory recognized in 2001, 2000 or 1999.

23

(19) Trade Accounts Receivable and Other Receivables and Assets

        Receivables and other assets are valued at historical cost which approximates market value because of their short-term nature. An estimate is made for doubtful receivables based on a review of all outstanding amounts at the year end. Bad debts are written-off when identified.

        The receivables amounted to:

	31/12/01 Total EUR 000s	31/12/00 Total EUR 000s
Trade accounts receivable	73,891	63,531
Receivables from affiliated companies	55	—
Interest receivables	11,013	8,364
Other assets	13,374	21,530
Total other receivables and assets	24,442	29,894
Total	98,333	93,425

        Interest receivables fundamentally comprise interest due from the loan to Impress Metal Packaging Holdings B.V., Deventer.

        The other assets are essentially composed of other receivables totaling EUR 13.4 million (previous year EUR 21.3 million) from customers and suppliers resulting from projects and suppliers. Furthermore, capitalized premiums on derivatives (options) of EUR 0.7 million (previous year EUR 1.3 million) are also reported here. The status of the cumulative allowance for bad debts was EUR 6.1 million (previous year EUR 4.3 million). The status of the cumulative allowance for other assets was EUR 1.1 million (previous year EUR 1.2 million).

        Details of the exchange rate risk are presented in Note 29.

(20) Liquid funds

	31/12/01 EUR 000s	31/12/00 EUR 000s
Securities	388	—
Cash at banks, cheques, cash in hand	4,743	2,075
	5,131	2,075

(21) Deferred charges and prepaid expenses

	31/12/01 EUR 000s	31/12/00 EUR 000s
Deferred taxes	13,081	—
Loan discount	94	112
Other prepaid expenses	942	685
	14,117	797

24

        Information on deferred taxes is presented in Note 25. The loan discount relates to a government loan with a term ending in 2009.

(22) Divisional equity

        The individual components of the divisional equity and its development in the years 2000 and 2001 are shown in the Development of Divisional Equity on page 3.

(23) Development of provisions and accruals

Provisions/accruals in EUR 000's	12/2000		Additions		Interest	Utilization	Reversal	Change in Consolidated Companies		Exchange rate diff.		12/2001
Pensions	(247,658	)	(18,819	)	—	17,520	5	636		(5	)	(248,321	)
Taxes, actual	(20,472	)	(20,106	)	—	22,125	—	—		—		(18,453	)
Taxes, deferred	(14,275	)	(8,855	)	—	—	—	—		—		(23,130	)
Total taxes	(34,747	)	(28,961	)	—	22,125	—	—		—		(41,583	)
Outstanding invoices	—		—		—	—	—	—		—		—
Warranty obligations	(1,223	)	(1,533	)	—	868	—	4		—		(1,884	)
Environment <1 year	—		—		—	—	—	—		—		—
Environment >1 year	—		—		—	—	—	—		—		—
Impending losses <1 year	(3,692	)	(1,172	)	—	2,040	1,049	—		(2	)	(1,777	)
Impending losses >1 year	28		(326	)	—	—	—	—		(5	)	(303	)
Restructuring programmes <1 year	(2,445	)	(1,463	)	—	1,579	269	607		(11	)	(1,464	)
Restructuring programmes >1 year	(259	)	(1,496	)	—	279	—	(19	)	—		(1,495	)
Others <1 year	(18,247	)	(98,540	)	—	104,068	1,372	1,936		(69	)	(9,480	)
Others >1 year	(8,935	)	(554	)	—	110	555	(204	)	—		(9,028	)
Other provisions	(34,773	)	(105,084	)	—	108,944	3,245	2,324		(87	)	(25,431	)
Total provisions/accruals	(317,178	)	(152,864	)	—	148,589	3,250	2,960		(92	)	(315,335	)

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(23) Development of provisions (Continued)

Provisions/accruals in EUR 000's	12/1999		Additions		Interest	Utilization	Reversal	Change in Consolidated Companies		Exchange Rate diff.		12/2000
Pensions	(248,770	)	(13,773	)	—	14,850	44	—		(9	)	(247,658	)
Taxes, actual	(8,378	)	(18,980	)	—	6,886	—	—		—		(20,472	)
Taxes, deferred	(28,214	)	13,939		—	—	—	—		—		(14,275	)
Total taxes	(36,592	)	(5,041	)	—	6,886	—	—		—		(34,747	)
Outstanding invoices	—		—		—	—	—	—		—		—
Warranty obligations	(1,385	)	(5,134	)	—	5,284	12	—		—		(1,223	)
Environment <1 year	—		—		—	—	—	—		—		—
Environment >1 year	—		—		—	—	—	—		—		—
Impending losses <1 year	(6,747	)	(8,237	)	—	8,751	2,553	—		(12	)	(3,692	)
Impending losses >1 year	(6	)	(1,714	)	—	348	1,401	—		(1	)	28
Restructuring programmes <1 year	(3,615	)	(860	)	—	1,995	3	38		(6	)	(2,445	)
Restructuring programmes >1 year	(933	)	(167	)	—	876	5	(40	)	—		(259	)
Others <1 year	(26,418	)	(139,645	)	—	147,011	897	(29	)	(63	)	(18,247	)
Others >1 year	(9,024	)	(467	)	—	542	—	15		(1	)	(8,935	)
Total other provisions	(48,128	)	(156,224	)	—	164,807	4,871	(16	)	(83	)	(34,773	)
Total provisions/accruals	(333,490	)	(175,038	)	—	186,543	4,915	(16	)	(92	)	(317,178	)

(24) Pension liabilities and other employee benefits

      The pensions and similar obligations can be broken down as follows:

	31/12/01 EUR 000s	31/12/00 EUR 000s
Pension liabilities	245,744	246,845
Accruals for other similar obligations	2,577	813
	248,321	247,658

        The pension liabilities are calculated in accordance with IAS 19 (revised in 2000) on the basis of the projected unit credit method for acquired pension rights, taking future changes in wage, salary and pension payments to pensioners.

        S-L AG and the British subsidiaries have different pension schemes that can be summarized as follows:

(a)

All employees have a pension entitlement from the date on which they join the company, once they have completed a minimum period of service of 5 to 10 years (in other cases, no minimum service period is stipulated).



(b)

The employee is generally entitled to a pension when he or she retires. In Germany the pension is determined by calculating 0.3 to 0.5% of the assessment basis, which corresponds to

26

the salary/wage that is subject to social security contributions. A rate of 0.66 to 1.0% applies in the case of remuneration that exceeds the assessment basis.

(c)

In Germany, there is a contractual promise to increase the pension payments by 1% each year, with the statutory inflation compensation being offset against the increase.



(d)

There are also rules for retirement before the age of 63 or in the case of disability as well as for widows' and surviving dependants' pensions and for specific limited groups of people, some of them relating to closed pension schemes that no longer accept new members.



(e)

The UK pension scheme is based on the system that they are fed by contributions from the employee and the company amounting to 4% and 9.7% of pensionable earnings and that pension entitlements are granted which amount to 1.67% of the final pensionable earnings for each year of participation in the scheme. From his or her fortieth birthday onwards, the beneficiary has the right to increase this to 2% by increasing his/her contribution to 5%.

        The net periodic pension cost, which consists of the current service cost and the interest costs incurred to increase the pension liability, are determined from the scheduled development of the liabilities for pension entitlements. Differences from the defined benefit obligation (DBO) of these liabilities that exceed 10% of the net present value are distributed over the average remaining service time of the beneficiaries.

        The defined benefit plans are financed mainly by the scheduled accumulation of pension accruals at S-L AG. Payments are made to capital funds in the United Kingdom and the Netherlands. Provision is therefore only made for obligations in the balance sheet if the current value of the capital fund is lower than the pension obligations.

        The surpluses, which reduce the charges from future wage, salary and state old-age pension increases, are included in the balance sheet with an amortization period of 5 years. They are shown in the prepaid expenses item.

        The actuarial assumptions on which the pension accrual calculation was based were:

	2001		2000		1999
Percent
	D	GB	D	GB	D	GB
Interest rate	6.0	5.75	6.25	5.75	6.0	5.75
Wage/salary trend (including promotion effects)	3.0	4.0	2.75	4.0	3.00	4.0
Expected yield on the money invested in the funds	—	7.0	—	7.0	—	7.0
Cost trend for medical care	—	—	—	—	—	—

        The Heubeck mortality tables of 1998 were used as the biometric basis for the German companies both for the 2001 annual accounts and the previous year's figures.

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        The pension reserves developed as follows on the basis of the planning assumptions:

	2001 Funds with a deficit EUR 000s		2000 Funds with a deficit EUR 000s
Pension obligations—unfunded	(245,247	)	(246,899	)
Pension obligations—funded	(74,672	)	(69,070	)
Plan assets	59,347		64,126
	(15,325	)	(4,944	)
Actuarial gains/losses	14,828		4,998
Less:
Prepaid expenses	—		54
Additional pension obligation	(497	)	—
Pension liabilities in the balance sheet	(245,744	)	(246,845	)

Factors influencing the Pension liabilities (without accruals for similar obligations)	For the 12 months ended 31/12/01 EUR 000s		For the 4 months ended 31/12/00 EUR 000s		For the 8 months ended 31/08/00 EUR 000s
Liabilities as at beginning of period	(246,845	)	(248,127	)	(248,227	)
Exchange rate changes	(5	)	19		(10	)
Net periodic pension cost	(18,863	)	(5,784	)	(11,315	)
Payments into the funds and to retirees	19,969		7,047		11,425
Liabilities as at end of period	(245,744	)	(246,845	)	(248,127	)

        The expenditure for the pension schemes was as follows:

	For the 12 months ended 31/12/01		For the 4 months ended 31/12/00		For the 8 months ended 31/08/00		For the 12 months ended 31/12/99
	(in thousands of Euros)
Current service cost	9,845		3,132		5,550		7,210
Interest expenses	13,395		4,460		8,920		12,998
Expected return on plan assets	(4,569	)	(1,873	)	(3,284	)	(4,488	)
Actuarial amortization amounts:
Amortization of transition obligation	192		65		129		181
Past service cost	—		—		—		—
Total expenditure for the pension schemes	18,863		5,784		11,315		15,901

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        The actual return on plan assets amounted to a loss of EUR 4.0 million (previous year loss of EUR 4.7 million) as a result of declining stock exchange prices.

        There were no expenses or income due to changes in the planned commitments. These entitlements are secured exclusively by the formation of accruals rather than by payments into funds.

        The direct pension commitments and the other obligations similar to pensions are determined by independent experts on an actuarial basis.

(25) Accruals for taxes

        The accruals for actual taxes relate primarily to commitments from 2001 and earlier business years. The actual tax expenses determined are modified by making adjustments for deferred taxes in accordance with IAS 12. Taxable temporary differences are differences which result in amounts that are taxable in determining taxable profit in future periods when the carrying amount of the asset or liability is recovered or settled. Deferred tax items are also created for tax-deductible losses which will probably be able to be carried forward, and for consolidations affecting net income. The allocations are made on the basis of the future tax charges or relief. Tax charges and tax relief are offset against each other on a country by country basis if the relevant receivables and payables can also be offset against each other. A tax rate of 39% applied to German companies in the current business year (previous year 39%), and the relevant tax rates in the countries concerned (between 28% and 40%) continued to be applied to foreign companies.

29

        The deferred tax adjustments are causally attributable to the following items in the balance sheet:

	31/12/01 EUR 000s		31/12/00 EUR 000s
Accrual for deferred taxes
Tax free reserves	(296	)	(282	)
Intangible assets	—		—
Property, plant and equipment	(46,072	)	(45,865	)
Financial assets	—		(431	)
Inventories	(528	)	(264	)
Other items	—		—
Netting miscellaneous deferred taxes (assets/liabilities)	23,766		32,567
	(23,130	)	(14,275	)
Deferred tax assets
Pension reserves	11,957		14,002
Other accruals	4,430		4,669
Other items	8,883		422
Financial assets	4,120		—
Tax credits	—		—
Credit from tax-deductible losses carried forward	7,457		13,474
Netting of miscellaneous deferred taxes (assets/liabilities)	(23,766	)	(32,567	)
	13,081		—
Total deferred taxes	(10,049	)	(14,275	)

        Deferred tax assets on tax-deductible losses carried forward or other tax credits are only recorded if utilization is probable.

        There are offsetting options from tax-deductible losses carried forward amounting to EUR 6.3 million for which no deferred tax credits were stated due to the related uncertainties. These loss carry forwards have an unlimited carry forward period.

        No deferred tax accruals for future charges in the form of withholding or other taxes have been made in relation to the undistributed profits of foreign subsidiaries, because these amounts will be reinvested permanently. It is not practicable to estimate the additional taxes that might become payable upon the eventual remittance of the foreign earnings for which no provision has been made.

(26) Other reserves and accrued liabilities

        Accruals were formed for individual warranty obligations. For the other sales, an accrual was formed at an average percentage rate to cover the general warranty risk based on experience from previous years. There are no major individual risks.

30

        The accruals for impending losses contain no provision for purchasing contracts and EUR 2.1 million for other contractual risks including derivatives (EUR 2.0 million in prior year). The accruals for restructuring programs include EUR 3.6 million for personnel programs and early retirement programs (EUR 2.7 million in prior year). The other accruals cover a large number of different risks. The major individual items included are accruals for personnel costs of EUR 1.1 million (prior year of EUR 1.1 million), accruals for various contractual risks of EUR 1.9 million (EUR 6.1 million in prior year) and a EUR 6.5 million accrual for risks associated with a previously owned company (EUR 6.5 million in prior year).

(27) Liabilities due to banks and other

        The liabilities are declared at repayment value which represents the fair value. Non-interest bearing liabilities due in more than one year are reduced to their net present value by deducting interest. The liabilities can be broken down as follows:

		Total EUR 000s	31/12/01 thereof due in more than one Year EUR 000s	Total EUR 000s	31/12/00 thereof due in more than one Year EUR 000s
1.	Liabilities due to banks	67,059	15,900	89,807	16,600
2.	Liabilities due to parent	173,950	—	157,428	—
3.	Trade accounts payable	118,665	—	121,310	—
4.	Accounts due to affiliated companies	2,017	—	346	—
5.	Other liabilities	52,611	—	39,921	—
Total		414,302	15,900	408,812	16,600

        The other liabilities contain not only the social security costs, but also liabilities of EUR 8.5 million for wages and salaries (EUR 6.3 million in prior year), EUR 11.4 million for liabilities from aluminum hedges, EUR 12.5 million in liabilities to customers (EUR 6.7 million in prior year) and EUR 4.6 million for accrued dividend to minority shareholder (EUR 4.6 million in prior year).

        Liabilities due to banks totaling EUR 37.6 million (EUR 22.8 million in the prior year) were secured by Beverage Cans trade accounts receivable in Great Britain, France and Germany.

(28) Contingent liabilities and other financial commitments

        There were no contingent liabilities at December 31, 2001 and 2000.

        Commitments resulting from the purchase orders already placed on the balance sheet date but not yet fulfilled (relating essentially to investment projects) amounted to EUR 1 million and EUR 5 million for the periods ended December 31, 2001 and 2002, respectively.

31

(29) Financial instruments

        Financial instruments are understood to comprise all receivables and payables including financial assets which are not created by trading but rather serve to procure funds for the company or lead to an outflow of funds. As the financial assets at "Beverage Cans" are not intended for sale and do not therefore produce any short-term returns, they are declared in total in the section"Financial assets" of the balance sheet. The value of the remaining financial instruments is subject to fluctuations which result in the case of non-interest bearing financial instruments with different due dates from the combination of the cash value with a risk premium for the creditor or debtor. When these conditions apply, "Beverage Cans" values the financial instruments with a term of more than one year at cash value. Adjustments are applied to individual receivables. A uniform risk deduction of 2% is applied to the remaining receivables. No risk deduction is applied to the liabilities.

        Unrealized losses of EUR 5.0 million (prior year 0.4 million) and profits of EUR 1.7 million (prior year 1.9 million) from the adjustment of payables and receivables to market value in 2001, the greater part of which is due to the translation of loans raised in foreign currencies were posted with affect on net income.

        The following tables provide an insight into the structure of the financial instruments and the associated exchange rate and other risks.

Trade accounts receivable and other receivables		2001 EUR m	2000 EUR m	Payables (excl. financial liabilities)	2001 EUR m	2000 EUR m
The returns are in
	EUR	59.0	66.0	EUR	118.1	94.7
	USD	6.5	2.6	USD	9.2	10.3
	GBP	15.1	9.4	GBP	33.6	35.8
	Rmb/HKD	11.4	7.1	Rmb/HKD	11.0	13.6
	PLN	6.3	7.4	PLN	1.4	3.8
	CZK	0.0	0.9	CZK	0.0	3.4
		98.3	93.4		173.3	161.6

        The loans from banks and advances from S-L AG are in the following currencies as at the balance sheet date:

Currency	2001 EUR m	2000 EUR m
EUR	200.8	227.5
USD	—	—
GBP	29.7	9.2
Rmb/HKD	10.5	10.5
Total	241.0	247.2

32

(30) Financial liabilities

        The financial liabilities have the following maturity periods and interest rates (breakdown by liability items):

		31/12/01 EUR m	Average interest rate in percent		31/12/00 EUR m	Average interest rate in percent
Advances from S-L AG
Term up to 1 year		174.0	6.94	%	157.4	7.35	%
Liabilities due to banks:
With variable interest rates
	up to 1 year	49.8	8.9	%	72.8	9.50	%
	1 - 2 years	—	0.00	%	—	0.00	%
	over 2 years	—	0.00	%	—	0.00	%
With fixed interest rates
	up to 1 year	1.3	5.34	%	0.4	3.00	%
	1 - 2 years	1.7	5.37	%	1.5	5.31	%
	over 2 years	14.2	4.85	%	15.1	4.90	%
Total		241.0			247.2

        An average interest rate of 7.4% was payable on the financial liabilities taken up from banks and S-L AG globally in 2001 (6.2% in prior year).

(31) Derivative instruments

        As part of its risk management strategy, Schmalbach–Lubeca uses derivatives as instruments to hedge transactions and control risk levels. The company uses mark-to-market accounting for all derivatives for the periods presented, as a clear assessment of the derivative to the hedged transaction has not been documented.

        All these transactions are performed with a specific group of partners of first class credit standing. The conclusion, posting and monitoring of the transactions are organized separately. Derivatives are subject to constant direct supervision by the treasurer and are the subject of monthly risk reports to the Board of Management.

        The nominal amount is the total of all the buying and selling amounts on which the business transactions are based. The market values relate to the redemption values of the financial derivatives

33

on the balance sheet date. The nominal amounts and market values of the derivative instruments developed as follows:

	Nominal	Market value		Nominal	Market value
	31/12/01			31/12/00
	EUR m	EUR m		EUR m	EUR m
Aluminum hedging	48.0	(0.4	)	20.4	(0.3	)
Exchange rate hedging	41.1	(0.6	)	178.3	0.6
Interest rate hedging	121.6	0.5		113.4	1.0
Total	210.7	(0.5	)	312.1	1.3

        In the course of the 2001 business year, 65,100 tonnes of aluminum were purchased in a futures transaction for 2002. These forward purchases were hedged by identical counter-transactions at the end of the year, simultaneously with the conclusion of purchase contracts for sheet aluminum and the losses on these transactions were recognized in the 2000 and 2001 income statement under mark-to-market accounting. The open aluminum hedging transactions shown in the table for 2001 represent transactions hedged in 2003 and 2004 while the open aluminum hedging transactions shown in the table for 2000 are hedges for 2001 transactions.

        The exchange rate hedging transactions primarily relate to hedging the aluminum purchases in USD by the European subsidiaries of S-L AG.

        There were four interest rate hedging instruments deployed by the Group as at 31.12.2001. Interest caps amounting to EUR 50 million secure S-L AG against a rise in money market interest rates above 4.5% until August 2005. A cross currency swap eliminates all the foreign currency risks to a British company resulting from a loan denominated as EUR 6.2 million. Quanto swaps make the short-term EUR interest rates the determining factor for GBP 20 million in place of the short-term GBP interest rates from November 2004 to 2009, without any exchange rate risk. A sold interest option contains the contingent liability of GBP 20 million in funding having to be taken up at a fixed rate of 5.5% between September 2004 and 2009. The premium received has been posted as a liability.

        The valuation of the interest rate derivatives is positive, as no fixed interest rates have been agreed. With this structure, as forecast in the annual report for the previous year, Schmalbach–Lubeca has been able to benefit from falling money market interest rates.

(32) Leasing

        Beverage Cans is a party to leasing agreements for buildings with original terms of between 15 and 25 years. The rents paid by Schmalbach–Lubeca in 2001 totaled EUR 10.1 million, EUR 3.3 million for the four months ended December 31, 2000, EUR 6.5 million for the eight months ended August 31, 2000, and EUR 9.5 million in 1999.

34

        The agreed future rental and leasing payments from the non-terminable rental and leasing contracts entered into by the balance sheet date were as follows (nominal values):

		31/12/01 EUR m	31/12/00 EUR m
Rental and leasing contracts:
	up to 1 year	4.8	5.1
	between 1 and 5 years	13.0	14.6
	over 5 years	10.7	8.8
Less income from subletting:
	up to 1 year	—	0.1
	between 1 and 5 years	—	0.3
	over 5 years	—	—
Others		—	—

(33) Supplemental Cash Flow Information

	For 12 months ended 31/12/01 EUR m	For 4 months ended 31/12/00 EUR m		For 8 months ended 08/31/00 EUR m	For 12 months ended 31/21/99 EUR m
Cash flow from interest and dividends received	1.8	0.4		0.9	1.3
Cash flow from interest and dividends paid	20.0	9.8		13.4	9.4
Cash paid/(received) for income taxes	20.1	(6.2	)	25.2	18.7

35

(34) Reconciliation of significant differences between IAS and United States Generally Accepted Accounting Principles (US GAAP)

        The combined financial statements have been prepared in accordance with IAS, which as applied by Beverage Cans, differs in certain significant respects from US GAAP. The effects of the application of US GAAP to net income and equity are set out in the tables below:

	Notes	For the 12 Months Ended 31/12/01		For the 4 Months Ended 31/12/00		For the 8 Months Ended 31/08/00
		(in thousands of Euros)
Net income (loss) reported under IAS		61,531		(19,918	)	34,044
US GAAP adjustments:
Capital leases	a	(100	)	(34	)	(69	)
Capitalized interest	b	341		425		426
Fixed asset impairment charges	c	(20,000	)	—		—
Depreciation adjustment on impaired assets	c	118		—		—
Negative goodwill—amortization adjustment	e	(246	)	—		—
Negative goodwill—depreciation adjustment	e	156		—		—
Deferred taxes on reconciling items	f	6,638		(50	)	(98	)
New basis of accounting	g	(12,479	)	(9,907	)	—
Goodwill impairment	h	—		(5,900	)
Net income (loss) reported under US GAAP		35,959		(35,384	)	34,303

	Notes	For the 12 months ended 31/12/01		For the 4 months ended 31/12/00		For the 8 months ended 31/08/00
		(in thousands of Euros)
Divisional equity reported under IAS		4,742		(63,678	)	(47,231	)
US GAAP adjustments:
Capital vs. operating leases—fixed assets	a	2,691		2,845		2,896
Capital vs. operating leases—debt	a	(3,221	)	(3,275	)	(3,291	)
Capitalized interest—fixed assets	b	1,191		851		426
Fixed asset impairment charges—fixed assets	c	(19,881	)	—		—
Negative goodwill	e	4,708		—		—
Negative goodwill—fixed assets	e	(7,349	)	—		—
Deferred taxes on reconciling items	f	8,912		(275	)	(226	)
New basis of accounting	g	569,228		581,707		—
Divisional equity reported under US GAAP		561,021		518,175		(47,426	)

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(a)

Capital leases

        Under IAS, lease costs are accounted for in accordance with IAS 17, "Leases." For purposes of US GAAP, leases are accounted for in accordance with SFAS No. 13 "Accounting for Leases." SFAS No. 13 is more prescriptive than IAS; for example, in order to qualify as an operating lease rather than a finance lease, under US GAAP, the lease payments cannot exceed 90% of the original cost of the asset. Therefore, certain costs permitted to be expensed as lease expense under IAS must be capitalized under US GAAP. The reconciliation reflects the impact of capitalization of certain operating leases under US GAAP.

(b)

Capitalized interest

        IAS 23 "Borrowing Costs" provides the option to companies of capitalizing financing costs. Beverage Cans does not capitalize financing costs. US GAAP requires the capitalization of borrowing costs attributable to the acquisition, construction or production of a qualifying asset. Therefore, certain costs permitted to be accounted for as interest expense under IAS must be capitalized under US GAAP. The effects of the capitalization and depreciation of financing costs related to significant plant and equipment construction projects is reflected in the reconciliation.

(c)

Impairment Losses

        Under IAS 36 "Impairment of Assets" impairment losses are recognized whenever the carrying amount of an asset exceeds its recoverable amount. Under US GAAP, an impairment loss should be recognized under similar circumstances and provisions to IAS 36. However, under US GAAP, after an impairment loss is recognized, the reduced carrying value of the asset shall be accounted for as its new cost and restoration of previously recognized impairment losses is not permitted. In December 2000, it was determined in accordance with IAS and US GAAP that an impairment charge of EUR 20 million was required for certain operating assets. In the fourth quarter of 2001, events occurred, primarily related to the transactions described in Note 15, which impacted the future expected cash flows of these operating assets such that a restoration of the 2000 impairment loss was required under IAS 36. However, under US GAAP, the restoration of the impairment loss to the carrying value of the property is not permitted. Therefore, the effect of reversing the impairment loss in the IAS statements and the resulting impact on the carrying value and depreciation expense under US GAAP is reflected in the reconciliation.

(d)

Pensions

        Based upon a review by independent appraisors and the provisions of the Beverage Cans pension plans, there were no significant differences in determining the pension expense and related assets and liabilities under IAS and US GAAP. Therefore, the impact on net investment and net income would be the same. Under IAS, Beverage Cans reflects the interest cost element as interest expense, rather than cost of sales. Under US GAAP, the interest cost is included as pension expense and therefore reflected in cost of sales. The reclassification of pension expense to cost of sales from interest expense under US GAAP was EUR 13.4 million for the year ended December 31, 2001, EUR 4.5 million for the four months ended December 31, 2000 and EUR 8.9 million for the eight months ended August 31, 2000. There was no impact on net income.

37

(e)

Negative goodwill

        Under IAS, when the fair market value of the acquired assets less liabilities exceeds the purchase price, the purchase price allocation results in negative goodwill, and the negative goodwill is amortized over the appropriate period. Under US GAAP, the excess is allocated as a reduction of non-current assets. The reconciliation reflects the reduction of the carrying value of plant machinery and equipment to eliminate the negative goodwill recorded under IAS and reflects the impact on net income due to the difference in depreciation of the plant and machinery versus the amortization under IAS of the negative goodwill.

(f)

Deferred Taxes

        Deferred taxes have been provided on all adjustments at the applicable local country rate to which the adjustment applies.

(g)

New Basis of Accounting

        Prior to June 19, 2000, S-L AG was owned 59.8% by VIAG. On June 19, 2000, VIAG merged with VEBA to form what is now E.ON AG. In preparation for a potential investment by Allianz in S-L AG, E.ON AG contributed its investment in S-L AG to AVP. On September 4, 2000, Allianz acquired 51% of AVP through an investment in newly issued capital. Also on September 4, 2000, all but the remaining 2.7% external shareholders S-L AG at that time tendered their S-L AG shares to AVP. As a result of these transactions, AVP owned 97.3% of S-L AG.

        Under rules and regulations promulgated by the Securities and Exchange Commission, because the cumulative percentage of S-L AG acquired by AVP after the September 4, 2000, acquisition exceeded 95%, the Beverage Cans combined financial statements should be reflected as of the end of August 2000 on a "push down" accounting basis. Therefore, a new basis of accounting was established for periods subsequent to August 31, 2000, reflecting the fair values of acquired assets and liabilities.

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        The consideration allocated to the beverage can operations from the consideration for the acquisition of 97.3% of S-L AG was EUR 591.6 million. This purchase price was allocated to the assets and liabilities of Beverage Cans based on the respective fair market values as follows:

	Historical Cost (EUR 000's)		Fair Value (EUR 000's)		Useful Life (years)
Intangible assets	6,100		35,562		5 - 7.3
Goodwill	110,646		602,846
Property, plant and equipment	335,596		452,800		2 - 26
Shares in associated companies	18,776		18,776
Other financial assets	65,178		65,178
Inventories	83,892		90,165
Accounts receivable, trade	98,969		98,969
Other receivables and assets	31,255		31,255
Liquid funds	21,730		21,730
Other prepaid assets	1,002		1,002
Pension reserves and accruals for similar obligations	(248,996	)	(248,996	)
Current and deferred taxes	172		(53,353	)
Other reserves and accrued liabilities	(58,919	)	(58,919	)
Liabilities due to banks and bonds	(154,542	)	(154,542	)
Related party loans	(139,965	)	(139,965	)
Other liabilities	(64,918	)	(64,918	)
Accounts payable, trade	(115,116	)	(115,116	)
Deferred income	(10,777	)	(10,777	)
Minority interests	(23,243	)	(23,243	)
	(43,160	)	548,454

        As a result of the new basis of accounting, net assets were increased and additional charges are reflected in the reconciliation from IAS to US GAAP. The new basis of accounting is reflected in all periods subsequent to August 31, 2000. The pro forma impact on net income as if the transaction had occurred on January 1, 1999 related to the new basis of accounting for the eight-month period ended August 31, 2000 and December 31, 1999 consisted of the effects of depreciation of fixed assets and the amortization of goodwill and intangible assets. The impact related to depreciation and amortization resulted in a reduction of net income, after applicable taxes, of EUR 8.6 million and EUR 12.8 million, for the period ended August 31, 2000 and December 31, 1999, respectively. There was no other impact to the income statement as a result of the new basis of accounting.

(h)

Goodwill impairment

        In the four months ended December 31, 2000, an impairment charge under IAS 36 was recorded for EUR 10.8 million to write-off the goodwill related to Beverage Can's China investment. A charge for US GAAP under FASB 121 was also appropriate. However, under IAS 22, prior to amendment in

39

1995, there was additional goodwill related to China that was offset against equity. Under US GAAP, goodwill cannot be offset against equity, so this goodwill would also have been impaired in 2000 under US GAAP. Therefore, an additional charge of EUR 5.9 million is required for US GAAP purposes for the four months ended December 31, 2000.

(i)

New US accounting standards

        In June 2001, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 141, "Business Combinations" ("FAS No. 141"). FAS No. 141 requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001, provides specific criteria for the initial recognition and measurement of intangible assets apart from goodwill and requires that unamortized negative goodwill be written off immediately as an extraordinary gain instead of being deferred and amortized. The statement supercedes APB No 16 "Business Combinations."

        In July 2001, the FASB issued FAS No. 142, "Goodwill and other intangible assets" ("FAS No. 142"). The statement will be effective for the years beginning after December 15, 2001, and may not be retroactively applied to the financial statements of prior periods. FAS No. 142 requires that goodwill, including previously existing goodwill, and intangible assets with indefinite lives will no longer be amortized but should be tested for impairment annually. Goodwill and intangible assets with indefinite lives will no longer be tested for impairment under FAS No. 121. Beverage Cans is in the process of assessing the impact of this statement on its operating results and the financial position. No transition adjustment has been provided as the required impairment tests for the adoption of FAS No. 142 have been performed and we have determined that no impairment exists at this time.

        In July 2001, the FASB issued FAS No. 143, "Accounting for Obligations Associated with the Retirement of Long-Lived Assets." This standard will be effective for Beverage Cans for the year ending December 31, 2003. The standard provides the accounting requirements for retirement obligations associated with tangible long-lived assets. The standard requires that the obligation associated with the retirement of the tangible long-lived assets be capitalized into the asset cost at the time of initial recognition. The liability is then discounted to its fair value at the time of recognition using the guidance provided by the standard. We have not yet quantified the impact that adoption of SFAS No. 143 will have on our results of operations and financial position.

        In October 2001, the FASB issued FAS No. 144, "Accounting for the impairment or disposal of long lived assets" ("FAS No. 144"). This standard will be effective for Beverage Cans for the years beginning after December 15, 2001. FAS No. 144 supercedes FAS No. 121 and APB 30. FAS No. 144 applies to all long-lived assets, including discontinued operations. The standard develops one accounting model for long-lived assets that are to be disposed of by sale. FAS No. 144 requires that long-lived assets that are to be disposed of by sale be measured at the lower of book value or fair value less costs to sell. Beverage Cans is in the process of assessing the impact of this statement on the operating results and the financial position.

        In April 2002, the FASB issued FAS No. 145, "Rescission of FASB Statement Nos. 4, 44 and 64, amendment of FASB Statement No. 12, and "Technical Corrections" ("FAS No. 145"). FAS No. 145 is effective for fiscal years beginning and certain transactions entered into after May 15, 2002. The issues

40

and amendments addressed by FAS No. 145 are not expected to have a material effect on the financial position or results of operations of the Beverage Cans.

        In June 2002, the FASB issued FAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities" ("FAS No. 146"). FAS No. 146 addresses financial accounting and reporting for costs associated with exit or disposal activities (excluding an entity newly acquired in a business combination), often referred to as "restructuring costs", and nullifies prior accounting guidance with respect to such costs. This Statement will spread out the reporting of expenses related to restructurings initiated after 2002, because a commitment to a plan to exit an activity or dispose of long-lived assets will no longer be enough to record a liability for the anticipated costs. The provisions of FAS No. 146 is effective for exit or disposal activities initiated after December 31, 2002, with no retroactive restatement allowed. Beverage Cans is unable to determine at this time whether these costs will be incurred or whether they will be material to its results of operations or financial position.

(35) Subsequent events

        On September 30, 2002, one of our subsidiaries in Poland received a tax assessment relating to corporate income tax for the year 1996. Beverage Cans was granted a tax holiday by the Polish authorities in 1995, provided that it met certain conditions which included complying with environmental regulations and achieving certain export sales ratios. The tax assessment challenges many aspects of the subsidiary's business, including whether it had met the environmental requirements contained in the tax holiday. The assessment also questioned the appropriateness of transfer pricing policies between the subsidiary and related companies within the group, which could impact export sales ratios contained in the tax holiday. If the challenge by the tax authority is successful, we may be liable for corporate income tax on profits generated in Poland for the period from 1996 onwards together with late payment interest. We presently estimate that the potential liability amounts to EUR 15 million to EUR 27 million for which no provision has been made. We have submitted an appeal against the tax assessment, which is currently being considered by the authorities. At this time, Beverage Cans believes that it is not probable that the liability will be incurred.

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QuickLinks

Exhibit 99.1

Schmalbach–Lubeca Beverage Cans Combined Statements of Income (in thousands of Euros)
Schmalbach–Lubeca Beverage Cans Combined Balance Sheet (in thousands of Euros)
Schmalbach–Lubeca Beverage Cans Development of Divisional Equity (in thousands of Euros)
Schmalbach–Lubeca Beverage Cans Combined Statements of Cash Flows (in thousands of Euros)
Schmalbach–Lubeca Beverage Cans Notes to the Combined Financial Statements

EX-99.2

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Exhibit 99.2

In accordance with general instruction B.2 of Form 8-K, the information in this exhibit is furnished pursuant to Item 9 and shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section.

COMBINED INTERIM FINANCIAL STATEMENTS
OF SCHMALBACH–LUBECA BEVERAGE CANS AND SUBSIDIARIES

Schmalbach-Lubeca

Beverage Cans

Unaudited Combined Statements of Income

(in thousands of Euros)

	For the 9 months ended 30/09/02		For the 9 months ended 30/09/01
Sales	888,375		716,247
Cost of Sales	(663,111	)	(574,569	)
Gross Profit	225,264		141,678
Selling expenses	(27,142	)	(17,424	)
General and administrative expenses	(34,300	)	(37,007	)
Other operating income	25,619		13,064
Other operating expenses	(41,869	)	(20,675	)
Income from operating activities	147,572		79,636
Interest expense	(13,980	)	(21,415	)
Income before income taxes and minority interests	133,592		58,221
Taxes on income	(41,368	)	(17,619	)
Income before minority interests	92,224		40,602
Minority interests share of income	—		1,365
Net income	92,224		41,967

The accompanying notes are an integral part of these combined financial statements.

1

Schmalbach-Lubeca

Beverage Cans

Unaudited Combined Balance Sheet

(in thousands of Euros)

		30/09/2002	31/12/2001
Assets
Fixed assets
	Intangible assets	127,723	101,408
	Property, plant and equipment	320,570	367,613
	Shares in associated companies	73	6,825
	Other financial assets	64,291	64,850
		512,657	540,696
Current assets
	Inventories	97,860	97,498
	Accounts receivable, trade	122,513	73,891
	Other receivables and assets	34,231	24,442
	Liquid funds	40,368	5,131
		294,972	200,962
Deferred charges and prepaid expenses
	Deferred taxes	5,541	13,081
	Other prepaid expenses	89	1,036
		5,630	14,117
Total assets		813,259	755,775
Liabilities and Divisional Equity
Divisional equity
	SL-AG investment in Beverage Can Product Group	173,748	4,742
Minority interests		—	20,555
Reserves and accrued liabilities
	Pension reserves and accruals for similar obligations	251,153	248,321
	Accrued taxes	84,912	41,583
	Other reserves and accrued liabilities	32,771	25,431
		368,836	315,335
Liabilities
Liabilities due to banks		93,119	67,059
	Liabilities due to parent	—	173,950
	Accounts payable, trade	136,643	118,665
	Other liabilities	40,270	54,628
		270,032	414,302
Deferred income		643	841
Total Liabilities and Divisional Equity		813,259	755,775

The accompanying notes are an integral part of these combined financial statements.

2

Schmalbach-Lubeca

Beverage Cans

Unaudited Development of the Divisional Equity

(in thousands of Euros)

	Divisional Equity
As at 31 December 2000	(63,678	)
Currency adjustments	554
Net income	41,967
As at 30 September 2001	(21,157	)
Currency adjustments	6,335
Net income	19,564
As at 31 December 2001	4,742
Conversion of S-L AG advances to equity	87,426
Currency adjustments	(10,644	)
Net income	92,224
As at 30 September 2002	173,748

The accompanying notes are an integral part of these combined financial statements.

3

Schmalbach-Lubeca

Beverage Cans

Unaudited Condensed Combined Statements of Cash Flows

(in thousands of Euros)

		For the 9 months ended 30/09/02		For the 9 months ended 30/09/01
I.	Cash flow from operations	139,000		16,973
II.	Cash flow from investing activities	(64,316	)	(12,243	)
	Subtotal of cumulated cash flow	74,684		4,730
III.	Cash flow from financing activities	(37,170	)	28,582
	Funds available
	Changes in funds affecting payments	37,514		33,312
	+Changes in funds resulting from exchange rates and valuations	(2,277	)	(554	)
	+Funds at the beginning of the period	5,131		2,075
IV.	Funds at the end of the period	40,368		34,833

The accompanying notes are an integral part of these combined financial statements.

4

Schmalbach-Lubeca

Beverage Cans

Notes to the Unaudited Combined Financial Statements

Schmalbach-Lubeca AG

        Schmalbach-Lubeca ("S-L AG") is established in the legal form of a German Aktiengesellschaft (AG) and is located in Ratingen, Germany. The company is registered in the commercial register of Dusseldorf, Germany. S-L AG is a subsidiary of AV Packaging GmbH, Munich ("AVP"), which holds 97.6% of the shares in S-L AG, with the remaining 2.4% of the shares held by external shareholders. Substantially all the shares in AVP are held by E.ON AG and Allianz Capital Partners GmbH, a subsidiary of Allianz AG. At December 31, 2001, S-L AG consisted of 8 German and 70 non-German fully consolidated companies, one associated company included at equity and one investment included at cost. S-L AG was comprised of three operating segments, PET containers, White Cap closures and Beverage cans. PET containers manufactures returnable and one-way PET bottles, preforms and tooling and moulds for injection molding and stretch-blow molding machines. White Cap closures manufactures plastic and composite closures for oxygen-sensitive, vacuum-packaged and aseptically vacuum-packaged food products and beverages. Beverage cans manufactures two-piece tinplate and aluminum beverage cans and ends ("Beverage Can Operations").

Divestments

        On May 8, 2002, S-L AG announced agreement for the sale of both the PET container and White Cap closures operations to the Australian packaging company Amcor Limited ("Amcor Transaction"). The transaction closed on July 1, 2002.

        On August 29, 2002, S-L AG announced agreement for the sale of the stock of S-L AG (the "Ball Transaction") to the American based packaging company Ball Corporation ("Ball"). Ball will be acquiring the German-based company for approximately EUR 922.3 million in cash plus assumption of S-L AG's pension liabilities, which, for purposes of establishing the purchase price, were valued at December 31, 2001 at approximately EUR 245 million, less the assumption of approximately EUR 16 million of debt. The final purchase price is subject to working capital and other post-closing adjustments. The transaction is expected to close in late 2002 or early 2003.

        Proceeds from the Amcor Transaction were used to liquidate the debt of S-L AG, except the EUR 16 million of debt to be assumed by Ball and minor amounts related to specific tax positions in certain countries, which will be liquidated prior to closing of the Ball Transaction. Any remaining proceeds will be distributed to AVP prior to the closing of the Ball Transaction. In addition, a reorganization of S-L AG will occur prior to the close of the Ball Transaction in order to remove certain other assets and liabilities that Ball is not acquiring, primarily a share investment in Impress Metal Packaging Holdings B.V, which is accounted for at cost.

        At the closing of the Ball Transaction, S-L AG will primarily consist of the Beverage Can Operations, the S-L AG corporate headquarters function and certain acquired assets and liabilities of S-L AG. At the closing, the Beverage Can Operations will consist of 10 can plants, 2 end facilities, and a technical center. These facilities are located in Germany, England, France, Netherlands, and Poland. An investment in China was sold in June 2002.

Basis of combination and presentation

        These combined financial statements include substantially all of the assets, liabilities, results of operations and cash flows attributable to the historical Beverage Can Operations of S-L AG in addition to the S-L AG corporate headquarters function allocated to the Beverage Can Operations and certain

5

acquired assets and liabilities of S-L AG to be acquired (hereinafter referred to collectively as "Beverage Cans"). The Beverage Can Operations constitute a single business segment based primarily in Europe. As such, no segment reporting is included in the Beverage Cans combined financial statements. Beverage Cans is not a separate legal entity and has not been separately financed. The combined financial statements are prepared on a historical cost basis from the books and records of the Beverage Can Operations and S-L AG.

        The Beverage Cans combined financial statements have been prepared on the basis of established accounting methods, practices, procedures and policies and the accounting judgments and estimation methodologies used by Beverage Cans and S-L AG as explained below. Beverage Cans combined financial statements are prepared in accordance with the International Accounting Standards ("IAS") of the International Accounting Board ("IAB"), taking into account the interpretations of the Standing Interpretations Committee ("SIC"). IAS differs in certain respects from generally accepted accounting principles ("GAAP") in the United States and certain other countries. Material differences between IAS and GAAP that effect the Beverage Cans combined financial statements are discussed in the notes to these combined financial statements.

        The combined statement of income includes all items of revenue and income generated by the Beverage Can Operations and all items of expense directly incurred by it and expenses charged or allocated to it by S-L AG in the normal course of business. Certain S-L AG corporate expenses were allocated to the combined financial statements of Beverage Cans as representative of costs related to the Beverage Can Operations. The basis of allocation of S-L AG expenses, assets and liabilities is discussed in Summary of Significant Accounting Policies.

Summary of Significant Accounting Policies

Allocation of S-L AG Corporate assets, liabilities and expenses

        The Beverage Cans combined financial statements include an allocation of selected corporate assets and liabilities and expenses of S-L AG's corporate headquarters, including certain expenses recorded in S-L AG consolidation entries (referred to collectively as "Corporate").

Expense Allocations

        The Beverage Can Operations, as a part of Beverage Cans, receive the benefit of certain services rendered by S-L AG (the allocation of Interest and Taxes are discussed separately below). Costs incurred primarily include the costs of the headquarter function such as personnel costs, supplies, outside services and other costs related to the corporate, accounting, legal, treasury, tax, information services and purchasing functions. Where it is possible to specifically identify these costs as relating to the Beverage Can Operations, the costs are charged directly to Beverage Cans, at cost. Where it is possible to specifically identify costs related to the PET containers and White Cap closure operations, the costs are charged directly to those operations and are therefore excluded from the Beverage Cans combined financial statements. Where it is not possible to specifically identify the costs as relating to Beverage Cans or the PET container and White Cap closure operations, a portion of the total costs for these services are allocated, at cost, to Beverage Cans. The allocation process for these costs differs based on whether the costs relate to S-L AG operations within Germany, S-L AG operations outside Germany or S-L AG costs not specifically related to or specifically identifiable as German or non-German operations.

6

        The costs specifically identified as relating to the operations within Germany are allocated to all operating units (i.e., Beverage Can Operations, PET containers and White Cap closures) based on their respective revenues within Germany relative to total consolidated S-L AG revenues within Germany. The costs specifically identified as relating to the operations outside of Germany are allocated to all operating units based upon their respective revenues outside of Germany relative to total consolidated S-L AG revenues outside of Germany. Finally, the costs that cannot be specifically identified as relating to German or non-German operations are allocated to all operating units based upon their respective revenues relative to total consolidated S-L AG revenues.

        These allocated costs are included in the appropriate line on the Beverage Cans combined statement of income according to the nature of the costs.

Interest Expense

        Interest expense is determined for the Beverage Cans combined financial statements based upon the level of debt assigned to Beverage Cans relative to the overall debt of consolidated S-L AG. The allocation of debt is discussed below. Interest related to debt held by, or directly attributable to, the fully included subsidiaries that contain the Beverage Can Operations is retained in the Beverage Cans combined financial statements.

Taxes

        Beverage Cans' results have been historically included in the S-L AG, and subsidiary, applicable country and local tax returns that in some cases were filed in combined group returns, including the PET container and White Cap closure operations. The provision for income taxes, the related assets and liabilities and the disclosures in the footnotes for the Beverage Cans combined financial statements are presented and based upon a calculation of a standalone Beverage Cans tax provision on a separate return basis for each company in the Beverage Can Operations. There is also a tax provision based on the allocation of the Corporate costs assigned to Beverage Cans and the net income before taxes of the German beverage can plants and technical center owned by S-L AG.

Balance Sheet Allocations

        The assets and liabilities of Corporate are allocated to Beverage Cans in a manner consistent with the allocation of expenses. However, the pension obligations of S-L AG, excluding obligations for active participants related to the PET containers and White Cap closure operations, have been included in the Beverage Cans combined financial statements consistent with the Share Sale and Transfer Agreement between Ball and AVP. The debt reflected in the combined financial statements of Beverage Cans consists of all debt directly attributable to the Beverage Can Operations and advances from S-L AG ("Advances"). Advances are provided or repaid for all periods based upon the net cash inflow or outflow of Beverage Cans in excess of the debt directly attributable to the Beverage Can Operations. Interest on Advances is recorded in Beverage Cans at a rate consistent with the average cost of third party debt, including in some periods related party debt, obtained by S-L AG.

        Management believes that the accounting judgments, estimations and allocations made in preparing these combined financial statements are reasonable under the circumstances; however, the costs allocated are not necessarily indicative of the costs that would have been incurred if Beverage Cans had incurred these costs and performed these functions as a standalone entity. In addition, there can be no assurances that such allocations will necessarily be indicative of future results or what the

7

financial position and results of the operations of Beverage Cans would have been had it been a separate, standalone entity during the periods presented.

Principles of Combination

        These combined financial statements include the accounts of Beverage Cans after eliminating profits and losses on transactions within the Beverage Cans group. Fully combined in the balance sheet for Beverage Cans at December 31, 2001, are 4 German and 12 non-German subsidiaries, along with 3 operating plants and the technical center owned by S-L AG. The fully included subsidiaries consist of Continental Can Europe Beteiligungsgesellschaft GmbH, Schmalbach-Lubeca Getrankedosen GmbH, Schmalbach-Lubeca Unterstützungskasse GmbH, Continental Can UK Holding Company Ltd., Continental Can Company Ltd., Schmalbach-Lubeca Nederland B.V., Continental Can Benelux B.V., Continental Can France S.A.S., Continental Can La Ciotat S.A.S., Continental Can Handelsgesellschaft GmbH, Continental Can Polska Sp. z.o.o., Continental Can Trading Sp. z.o.o., Continental Can Europe Espana S.A. i.L., Schmalbach-Lubeca South East Europe d.o.o., Recal Organizacja Odzysku S.A. and Pacific Can Enterprises Company Limited. North Pacific Can Co. (Dalian) Ltd., an associate investment, is included under the equity method of accounting. The combined financial statements also fully include three dormant companies and four insignificant companies whose assets and liabilities are allocated to Beverage Cans. These seven companies will be transferred to an affiliate of AVP prior to closing of the Ball Transaction.

        The combined financial statements include the consolidation of the subsidiaries specified above. Significant intercompany transactions are eliminated. The associate investments included under the equity method of accounting are 50% or less owned investments and Beverage Cans does not control, but exercises significant influence over, operating and financial affairs. Other investments that are less than 20% owned are carried at cost.

        Subsidiaries are eliminated from the combined balance sheet when control ceases. Goodwill relating to the divested subsidiaries or parts of subsidiaries is taken into account as a disposal affecting net earnings.

General

        The accompanying condensed interim combined financial statements have been prepared in accordance with IAS 34 "Interim Financial Reporting" by Beverage Cans without audit. The same accounting policies and methods of computation are followed in the interim financial statements as compared with the most recently prepared Beverage Cans combined annual financial statements. Certain information and footnote disclosures, included in the Beverage Cans combined annual financial statements prepared in accordance with IAS of the IAB, taking into account the interpretations of the SIC, have been condensed or omitted. IAS differs in certain respects from US GAAP and GAAP in certain other countries. Material differences between IAS and US GAAP that effect the Beverage Cans' financial statements are discussed below.

        The preparation of financial statements in conformity with IAS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and reported amounts of revenues and expenses during the reporting period. These estimates are based on historical experience and various other assumptions believed to be reasonable under the circumstances. However, management of Beverage Cans believes that the financial statements reflect all adjustments of a normal

8

recurring nature and are necessary for a fair statement of the results for the interim period. Actual results could differ from these estimates under different assumptions or conditions.

        Results of operations for the periods shown are not necessarily indicative of results for the year, particularly in view of some seasonality in packaging operations. It is suggested that these unaudited condensed combined financial statements and accompanying notes be read in conjunction with Beverage Can's combined financial statements and the accompanying notes thereto.

Significant Events

        In the first nine months of 2002, Beverage Cans sales increased 24% to EUR 888 million (previous interim period EUR 716 million). Earnings before interest and taxes for the first nine months rose to EUR 147.6 million (previous interim period EUR 79.6 million). Increases in volumes in France and the United Kingdom following the acquisition of plants in La Ciotat and Runcorn were significant factors in these increases. In addition, operating margins increased for the nine-month period ended September 30, 2002, as compared to the comparable prior year period, primarily due to a decrease in aluminum prices.

        Capital expenditures in the first nine months of 2002 were higher than the comparable prior year interim period. The largest individual projects were the installation of an additional can end press at the Braunschweig plant and the modernization of a can production line at the plant in Oss, the Netherlands.

        In the nine months ended September 30, 2002, Beverage Cans acquired the minority shareholding in its British company previously held by a financial investor. The total purchase price was EUR 51 million and resulted in additional goodwill of EUR 31 million.

        In June 2002, Beverage Cans sold its investment in China for EUR 12 million. The transaction resulted in a loss of EUR 1.4 million.

        On September 30, 2002, one of our subsidiaries in Poland received a tax assessment relating to corporate income tax for the year 1996. Beverage Cans was granted a tax holiday by the Polish authorities in 1995, provided that it met certain conditions which included complying with environmental regulations and achieving certain export sales ratios. The tax assessment challenges many aspects of the subsidiary's business, including whether it had met the environmental requirements contained in the tax holiday. The assessment also questioned the appropriateness of transfer pricing policies between the subsidiary and related companies within the group, which could impact export sales ratios contained in the tax holiday. If the challenge by the tax authority is successful, we may be liable for corporate income tax on profits generated in Poland for the period from 1996 onwards together with late payment interest. We presently estimate that the potential liability amounts to EUR 15 to 27 million for which no provision has been made. We have submitted an appeal against the tax assessment, which is currently being considered by the authorities. At this time, Beverage Cans believes that it is not probable that the liability will be incurred.

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Significant differences between IAS and United States Generally Accepted Accounting Principles (US GAAP)

        The Operation's consolidated financial statements have been prepared in accordance with IAS, which as applied by the Operation, differs in certain significant respects from US GAAP. The effects of the application of US GAAP to net income and equity are set out in the tables below:

	Notes	For the 9 Months Ended 30/09/02		For the 9 Months Ended 30/09/01
Net income reported under IAS		92,224		41,967
US GAAP adjustments:
Capital leases	a	(73	)	(75	)
Capitalized interest	b	(80	)	367
Depreciation adjustment on impaired assets	c	2,516		—
Negative goodwill — amortization adjustment	d	(743	)	—
Negative goodwill — depreciation adjustment	d	469		—
Deferred taxes on above adjustments	e	(1,058	)	(198	)
Goodwill — amortization adjustment	f	5,826		—
New basis of accounting	g	4,217		(8,835	)
Basis adjustment	j	5,900		—
Net income reported under US GAAP		109,198		33,226

	Notes	For the 9 Months Ended 30/09/02		For the 9 Months Ended 30/09/01
Equity reported under IAS		173,748		(21,157	)
US GAAP adjustments:
Capital vs. operating leases — fixed assets	a	2,575		2,729
Capital vs. operating leases — debt	a	(3,179	)	(3,235	)
Capitalized interest — fixed assets	b	1,112		1,218
Fixed asset impairment charges — fixed assets	c	(17,366	)	—
Negative goodwill	d	3,965		—
Negative goodwill — fixed assets	d	(6,880	)	—
Deferred taxes on above adjustments	e	7,855		(474	)
Goodwill — amortization adjustment	f	5,826		—
New basis of accounting	g	573,446		572,872
		741,102		551,953

        (a)  Capital leases

        Under IAS, lease costs are accounted for in accordance with IAS 17, "Leases." For purposes of US GAAP, leases are accounted for in accordance with SFAS No. 13 "Accounting for Leases." SFAS

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No. 13 is more prescriptive than IAS; for example, in order to qualify as a finance lease rather than an operating lease, under US GAAP, the lease payments cannot exceed 90% of the original cost of the asset. Therefore, certain costs permitted to be expensed as lease expense under IAS must be capitalized under US GAAP. The reconciliation reflects the impact of capitalization of certain operating leases under US GAAP.

        (b)  Capitalized interest

        IAS 23 "Borrowing Costs" provides the option to companies of capitalizing financing costs. Beverage Cans does not capitalize financing costs. US GAAP requires the capitalization of borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset. Therefore, certain costs permitted to be accounted for as interest expense under IAS must be capitalized under US GAAP. The effects of the capitalization and depreciation of financing costs related to significant plant and equipment construction projects is reflected in the reconciliation.

        (c)  Impairment Losses

        Under IAS 36 "Impairment Assets" impairment losses are recognized whenever the carrying amount of an asset exceeds its recoverable amount. Under US GAAP, an impairment loss should be recognized under similar circumstances and provisions to IAS 36. However, under US GAAP, after an impairment loss is recognized, the reduced carrying value of the asset shall be accounted for as its new cost and restoration of previously recognized impairment losses is not permitted. In December 2000, it was determined in accordance with IAS and US GAAP that an impairment charge of EUR 20 million was required for certain operating assets. In the fourth quarter of 2001, events occurred, primarily related to the transactions described in Note 15, which impacted the future expected cash flows of these operating assets such that a restoration of the 2000 impairment loss was permitted under IAS 36. However, under US GAAP, the restoration of the impairment loss to the carrying value of the property is not permitted. Therefore, the effect of reversing the impairment loss in the IAS statements and the resulting impact on the carrying value and depreciation expense under US GAAP is reflected in the reconciliation.

        (d)  Negative goodwill

        Under IAS, when the fair market value of the acquired assets less liabilities exceeds the purchase price, the purchase price allocation results in negative goodwill, and the negative goodwill is amortized over the appropriate period. Under US GAAP, the excess is allocated as a reduction of non-current assets. The reconciliation reflects the reduction of the carrying value of plant machinery and equipment to eliminate the negative goodwill recorded under IAS and reflects the impact on net income due to the difference in depreciation of the plant and machinery versus the amortization under IAS of the negative goodwill.

        (e)  Deferred Taxes

        Deferred taxes have been provided on all adjustments at the applicable local country rate to which the adjustment applies.

        (f)    Goodwill

        Under IAS 22 "Business Combinations" Goodwill is amortized on a systematic basis over its useful life. Under US GAAP FAS No. 142 requires that goodwill, including previously existing goodwill, and intangible assets with indefinite lives will no longer be amortized but should be tested for impairment annually. The reconciliation reflects the elimination of the amortization of goodwill. No transition

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adjustment was required as the impairment tests required upon adoption in January 1, 2002, have been performed and no impairment exists at this time.

        (g)  New Basis of Accounting

        Prior to June 19, 2000, S-L AG was owned 60% by VIAG. On June 19, 2000, VIAG merged with VEBA to form what is now E.ON AG. In preparation for a potential investment by Allianz in S-L AG, E.ON AG contributed its investment in S-L AG to AVP. On September 4, 2000, Allianz acquired 51% of AVP through an investment in newly issued capital. Also on September 4, 2000, all but the remaining 2.7% external shareholders of S-L AG at that time tendered their S-L AG shares to AVP. As a result of these transactions, AVP owned 97.3% of S-L AG.

        Under rules and regulations promulgated by the Securities and Exchange Commission, because the cumulative percentage of S-L AG acquired by AVP after the September 4, 2000, acquisition exceeded 95%, the Beverage Cans combined financial statements should be reflected as of the end of August 2000 on a "push down" accounting basis. Therefore, a new basis of accounting was established effective for August 31, 2000, reflecting the fair values of acquired assets and liabilities. The consideration allocated to the beverage can operations from the consideration for the acquisition of 97.3% of S-L AG was EUR 591.6 million. This purchase price was allocated to the assets and liabilities of Beverage Cans based on the respective fair market values as follows:

	Historical Cost (EUR 000's)		Fair Value (EUR 000's)		Useful Life (years)
Intangible assets	6,100		35,562		5—7.3
Goodwill	110,646		602,846
Property, plant and equipment	335,596		452,800		2—26
Shares in associated companies	18,776		18,776
Other financial assets	65,178		65,178
Inventories	83,892		90,165
Accounts receivable, trade	98,969		98,969
Other receivables and assets	31,255		31,255
Liquid funds	21,730		21,730
Other prepaid assets	1,002		1,002
Pension reserves and accruals for similar obligations	(248,996	)	(248,996	)
Current and deferred taxes	172		(53,353	)
Other reserves and accrued liabilities	(58,919	)	(58,919	)
Liabilities due to banks and bonds	(154,542	)	(154,542	)
Related party loans	(139,965	)	(139,965	)
Other liabilities	(64,918	)	(64,918	)
Accounts payable, trade	(115,116	)	(115,116	)
Deferred income	(10,777	)	(10,777	)
Minority interests	(23,243	)	(23,243	)
	(43,160	)	548,454

        As a result of the new basis of accounting, net assets were increased and additional charges are reflected in the reconciliation from IAS to US GAAP. The new basis of accounting is reflected in all periods subsequent to August 31, 2000. The pro forma impact on net income consisted of the effects of depreciation of fixed assets and the amortization of goodwill and intangible assets.

        (h)  Pensions

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        Based upon a review by independent appraisers and the provisions of the Beverage Cans pension plans, there were no significant differences in determining the pension expense and related assets and liabilities under IAS and US GAAP. Therefore, the impact on net investment and net income would be the same. Under IAS, Beverage Cans reflects the interest cost element as interest expense, rather than cost of sales. Under US GAAP, the interest cost is included as pension expense and therefore reflected in cost of sales. The reclassification of pension expense to cost of sales from interest expense under US GAAP was EUR 10.5 million for the nine months ended September 30, 2002 and EUR 10.0 million for the nine months ended September 30, 2001. There was no impact on net income.

        (i)    Basis adjustment

        In June 2002, Beverage Can's investment in China was sold for EUR 12 million that resulted in a loss of EUR 1.4 million under IAS. The loss included the write-off of EUR 5.9 million for goodwill that had been previously offset against equity under IAS 22, prior to amendment in 1995. For US GAAP purposes, this goodwill has been previously written off in the four-month period ending December 31, 2000. Therefore, a US GAAP adjustment is required to reverse the charge taken for IAS for the EUR 5.9 million of goodwill. The US GAAP difference results from the cost basis difference between US GAAP and IAS at the time of sale.

        (j)    New US accounting standards

        In July 2001, the FASB issued Statement of Financial Accounting Standards ("FAS") No. 143, "Accounting for Obligations Associated with the Retirement of Long-Lived Assets." This standard will be effective for Beverage Cans for the year ending December 31, 2003. The standard provides the accounting requirements for retirement obligations associated with tangible long-lived assets. The standard requires that the obligation associated with the retirement of the tangible long-lived assets be capitalized into the asset cost at the time of initial recognition. The liability is then discounted to its fair value at the time of recognition using the guidance provided by the standard. We have not yet quantified the impact that adoption of FAS No. 143 will have on our results of operations and financial position.

        In April 2002, the FASB issued FAS No. 145, "Rescission of FASB Statement Nos. 4, 44 and 64, amendment of FASB Statement No. 12, and Technical Corrections" ("FAS No. 145"). FAS No. 145 is effective for fiscal years beginning and certain transactions entered into after May 15, 2002. The issues and amendments addressed by FAS No. 145 are not expected to have a material effect on the financial position or results of operations of the Beverage Cans.

        In June 2002 the FASB issued FAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities," ("FAS No. 146"). FAS No. 146 addresses financial accounting and reporting for costs associated with exit or disposal activities (excluding an entity newly acquired in a business combination), often referred to as "restructuring costs", and nullifies prior accounting guidance with respect to such costs. This Statement will spread out the reporting of expenses related to restructurings initiated after 2002, because a commitment to a plan to exit an activity or dispose of long-lived assets will no longer be enough to record a liability for the anticipated costs. The provisions of FAS No. 146 are effective for exit or disposal activities initiated after December 31, 2002, with no retroactive restatement allowed. Beverage Cans is unable to determine at this time whether these costs will be incurred or whether they will be material to its results of operations or financial position.

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Exhibit 99.2

Schmalbach-Lubeca Beverage Cans Unaudited Combined Statements of Income (in thousands of Euros)
Schmalbach-Lubeca Beverage Cans Unaudited Combined Balance Sheet (in thousands of Euros)
Schmalbach-Lubeca Beverage Cans Unaudited Development of the Divisional Equity (in thousands of Euros)
Schmalbach-Lubeca Beverage Cans Unaudited Condensed Combined Statements of Cash Flows (in thousands of Euros)
Schmalbach-Lubeca Beverage Cans Notes to the Unaudited Combined Financial Statements

EX-99.3

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Exhibit 99.3

        Following is the text of a press release disseminated by the registrant on November 20, 2002:

Ball Corporation 10 Longs Peak Drive, Broomfield, Colorado 80021-2510

For Immediate Release		http://www.ball.com
Media Contact:	Scott McCarty	303.460.2103, smccarty@ball.com
Investor Contact:	Ann Scott	303.460.3537, ascott@ball.com

Noteholders with questions regarding the consent solicitation should contact Lehman Brothers Inc. at 800.438.3242 or 212.528.7581. Copies of the consent solicitation statement and related documents can be obtained from Georgeson Shareholder Communications at 866.423.4873 or 212.440.9800.

Ball Corporation Announces Noteholder Consent Solicitation

        BROOMFIELD, Colo., Nov. 20, 2002—Ball Corporation [NYSE: BLL] announced today that it will solicit consents from the holders of its 7³/4 percent senior notes due 2006 and 8¹/4 percent senior subordinated notes due 2008 to amend certain provisions of the senior indenture and the senior subordinated indenture that govern the notes.

        Ball and Schmalbach–Lubeca Holding GmbH announced on Aug. 29 that the companies had signed a definitive agreement for Ball to acquire Schmalbach–Lubeca AG. The acquisition is expected to be financed with proceeds from new Ball credit facilities and other borrowings. Amending the existing indentures will permit Ball to own and operate Schmalbach and other foreign operations in a more tax efficient manner. Completion of the Schmalbach acquisition is conditioned upon, among other things, Ball's obtaining the necessary financing for the acquisition, but does not require receipt of the consents needed to amend the indentures. The transaction is expected to close in December 2002.

        The consent solicitation commenced today and will expire at 5 p.m. Eastern Standard Time on Dec. 3, 2002, unless extended. Only record holders of notes as of the close of business on Nov. 19, 2002, will be eligible to consent to the proposed amendments. The consent solicitation is conditioned on the receipt of consents from record holders representing, in each case, at least a majority in aggregate principal amount and other customary conditions. Holders of the notes who properly consent to the proposed amendments before the consent solicitation expires will receive a cash payment of $2.50 for each $1000 in principal amount of notes for which they give consents if the amendments to the indentures are approved by Ball noteholders and the Schmalbach acquisition is completed.

        Ball Corporation is one of the world's leading suppliers of metal and plastic packaging to the beverage and food industries. The Company also owns Ball Aerospace & Technologies Corp. Ball reported 2001 sales of $3.7 billion, of which approximately $3.3 billion came from its packaging segment and $400 million from its aerospace and technologies segment.

Forward-Looking Statements

        The information in this news release contains "forward-looking" statements. Actual results or outcomes may differ materially from those expressed or implied. As time passes, the relevance and accuracy of forward-looking statements contained in this release may change. The Company currently does not intend to update any particular forward-looking statement except, as it deems necessary at quarterly or annual release of earnings. Please refer to the Form 10-Q filed by Ball Corporation on November 14, 2002, for a summary of key risk factors that could affect actual results or outcomes. Factors that might affect the packaging segment or business of the company are: fluctuation in consumer and customer demand; competitive packaging material availability, pricing and substitution; the weather; fruit, vegetable and fishing yields; company and industry productive capacity and competitive activity; lack of productivity improvement or production cost reductions; regulatory action

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or laws, the proposed German mandatory deposit or other restrictive packaging legislation such as recycling laws; availability and cost of raw materials, energy and transportation; the ability or inability to pass on to customers changes in these costs, particularly resin, steel and aluminum; pricing and ability or inability to sell scrap; and international business risks (including foreign exchange rates) particularly in the United States, Europe and in developing countries such as China and Brazil. Factors that may affect the aerospace segment or business are: funding, authorization, and availability of government contracts; and technical uncertainty associated with Aerospace segment contracts. Factors that could affect the company as a whole include those listed plus: successful and unsuccessful acquisitions, joint ventures or divestitures and the integration activities associated therewith including the integration and operation of the business of Schmalbach–Lubeca AG; the inability to purchase the company's common stock; regulatory action or laws including those related to corporate governance and financial reporting, regulations and standards, business consolidation investment costs and the net realizable value of assets associated with the company's activities; goodwill impairment; changes in generally accepted accounting principles or their interpretation; litigation; antitrust, intellectual property, consumer and other issues; strikes; boycotts; interest rates and level of company debt; terrorist activities, war or catastrophic events; and U.S. and foreign economic conditions.

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Exhibit 99.3