Page 12

Notes to Unaudited Condensed Consolidated Financial Statements

Ball Corporation and Subsidiaries

~~The options granted in April 2007 included 402,168 stock-settled stock appreciation rights, which have the same terms as the stock options.~~ 13. Shareholders’ Equity and Comprehensive Earnings (continued)

The weighted average remaining contractual term for all options outstanding at ~~September~~March 30, ~~2007,~~2008, was ~~6.4~~6 years and the aggregate intrinsic value (difference in exercise price and closing price at that date) was ~~$107.3~~$60.8 million. The weighted average remaining contractual term for options vested and exercisable at ~~September~~March 30, ~~2007,~~2008, was 54.6 years and the aggregate intrinsic value was ~~$94.5~~$62.6 million. The company received ~~$3.1~~$0.9 million from options exercised during the three months ended ~~September~~March 30, ~~2007.~~2008. The intrinsic value associated with these exercises was ~~$4.7~~$1.2 million, and the associated tax benefit of ~~$1.6~~$0.4 million was reported as other financing activities in the condensed consolidated statement of cash flows. During the nine months ended September 30, 2007, the company received $17.8 million from options exercised. The intrinsic value associated with exercises for that period was $24.9 million and the associated tax benefit reported as other financing activities was $8.3 million.

Based on the Black-Scholes option pricing model, adapted for use in valuing compensatory stock options in accordance with SFAS No. 123 (revised 2004), options granted in April 2007 have an estimated weighted average fair value at the date of grant of $11.22 per share. The actual value an employee may realize will depend on the excess of the stock price over the exercise price on the date the option is exercised. Consequently, there is no assurance that the value realized by an employee will be at or near the value estimated. The fair values were estimated using the following weighted average assumptions:

~~Expected dividend yield~~		~~0.81%~~
~~Expected stock price volatility~~		~~17.94%~~
~~Risk-free interest rate~~		~~4.55%~~
~~Expected life of options~~		~~4.75 years~~
~~Forfeiture rate~~		~~12.00%~~

~~Page 17~~

~~Notes to Unaudited Condensed Consolidated Financial Statements~~

~~Ball Corporation and Subsidiaries~~

~~14.~~

~~Shareholders’ Equity and Comprehensive Earnings~~ ~~(continued)~~

In addition to stock options, the company ~~issues~~may issue to officers and certain employees restricted shares and restricted stock units, which vest over various periods but, other than the performance-contingent grants discussed below, generally in equal installments over five years. Compensation cost is recorded based upon the fair value of the shares at the grant date.

To encourage certain senior management employees and outside directors to invest in Ball stock, Ball adopted a deposit share program in March 2001 (subsequently amended and ~~restated)~~restated in April 2004) that matches purchased shares with restricted shares. In general, restrictions on the matching shares lapse at the end of four years from date of grant, or earlier in stages if established share ownership guidelines are met, assuming the relevant qualifying purchased shares are not sold or transferred prior to that time. Grants under the plan are accounted for as equity awards and compensation expense is recorded based upon the fair value of the shares at the grant date.

In April 2007 the company’s board of directors granted 170,000 performance-contingent restricted stock units to key employees, which will cliff vest if the company’s return on average invested capital during a 33-month performance period is equal to or exceeds the company’s ~~estimated~~ cost of capital. If the performance goal is not met, the shares will be forfeited. Current assumptions are that the performance targets will be met and, accordingly, grants under the plan are being accounted for as equity awards and compensation expense is recorded based upon the fair value (closing market price) of the shares at the grant date. On a quarterly basis, the company reassesses the probability of the goal being met and adjusts compensation expense as appropriate. No such adjustment was considered necessary at the end of the ~~third~~first quarter ~~2007.~~2008.

For the three ~~and nine~~ months ended ~~September~~March 30, ~~2007,~~2008, the company recognized ~~in selling, general and administrative expenses~~ pretax expense of ~~$4.5~~$4.2 million ($~~2.8~~2.6 million after tax) ~~and $21.9 million ($13.3 million after tax), respectively,~~ for share-based compensation arrangements, which represented $0.03 per basic and diluted ~~share for the third quarter of 2007 and $0.13 per basic and diluted share for the first nine months.~~share. For the three ~~and nine~~ months ended ~~October~~April 1, ~~2006,~~2007, the company recognized pretax expense of ~~$2.8~~$3.1 million ($~~1.7 million after tax) and $10.1 million ($6.1~~1.9 million after tax) for such arrangements, which represented $0.02 per basic and diluted ~~share and $0.06 per basic and diluted share, respectively, for those periods.~~share. At ~~September~~March 30, ~~2007,~~2008, there was ~~$34.9~~$28.5 million of total unrecognized compensation costs related to nonvested share-based compensation arrangements. This cost is expected to be recognized in earnings over a ~~weighted-average~~weighted average period of ~~2.7~~2.4 years.

Stock Repurchase Agreements

~~15.~~

~~Earnings per Share~~

Through the first quarter of 2008, we repurchased $125 million of our common stock, net of issuances, including a $31 million settlement on January 7, 2008, of a forward contract entered into in December 2007 for the repurchase of 675,000 shares.

Ball’s first quarter 2008 net share repurchases also included the preliminary settlement of an accelerated share repurchase agreement entered into in December 2007 to buy $100 million of the company’s common shares. Ball advanced the $100 million on January 7, 2008, and received approximately 2 million shares, which represented 90 percent of the total shares as calculated using the previous day’s closing price. The exact number of shares to be repurchased under the agreement, which will be determined on the settlement date (no later than June 5, 2008), is subject to an adjustment based on a weighted average price calculation for the period between the initial purchase date and the settlement date. The company has the option to settle the contract in either cash or shares.

Three Months Ended Nine Months Ended
($ in millions, except per share amounts; shares in thousands)

September 30,
2007

October 1,
2006

September 30,
2007

October 1,
2006

Diluted Earnings per Share:

Net earnings $
60.9
$
107.1
$
248.0
$
281.3

Weighted average common shares 101,422 103,292 101,691 103,397
Effect of dilutive securities 1,575 1,609 1,681 1,727
Weighted average shares applicable to diluted earnings per share
102,997

104,901

103,372

105,124

Diluted earnings per share $
0.59
$
1.02
$
2.40
$
2.68

Page 1813

Notes to Unaudited Condensed Consolidated Financial Statements

Ball Corporation and Subsidiaries

14. Earnings Per Share

	Three Months Ended
($ in millions, except per share amounts; shares in thousands)	March 30,		April 1,
	2008		2007
Diluted Earnings per Share:
Net earnings	$	83.8	$	81.2

Weighted average common shares		97,199		102,110
Effect of dilutive securities		1,390		1,705
Weighted average shares applicable to diluted earnings per share		98,589		103,815

Diluted earnings per share	$	0.85	$	0.78

Information needed to compute basic earnings per share is provided in the condensed consolidated statements of earnings.

15.

~~Earnings per Share~~ ~~(continued)~~

Fair Value of Financial Instruments

~~The following outstanding options were excluded from~~Ball adopted SFAS No. 157 effective January 1, 2008, for financial assets and liabilities measured on a recurring basis. As discussed in Note 1, SFAS No. 157 establishes a framework for measuring value and expands disclosures about fair value measurements. Although it does not require any new fair value measurements, the ~~diluted earnings per share calculation since they were anti-dilutive (i.e.,~~statement emphasizes that fair value is a market-based measurement, not an entity-specific measurement, and should be determined based on the ~~sum~~assumptions that market participants would use in pricing the asset or liability. As defined in SFAS No. 157, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). However, it permits a mid-market pricing convention (the mid-point price between bid and ask prices) as a practical expedient. SFAS No. 157 requires that the fair value of a liability include the ~~proceeds, including~~nonperformance risk (including entity’s credit risk and other risks such as settlement risk) related to the ~~unrecognized compensation, exceeded the average closing stock price for the period):~~

Three Months Ended Nine Months Ended
Option Price:
September 30,
2007

October 1,
2006

September 30,
2007

October 1,
2006

$ 39.74 − 694,600 – –
$ 43.69 − 901,200 89,250 901,200
$ 49.32 944,600 − 944,600 –
944,600 1,595,800 1,033,850 901,200

liability being measured.

The statement establishes a fair value hierarchy that prioritizes the inputs used to measure fair value using the following definitions (from highest to lowest priority):

●	Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Level 1 primarily consists of financial instruments, such as exchange-traded derivatives and listed equity securities.

~~16.~~

●

Level 2 – Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors and current market and contractual prices for the underlying instruments. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category include non-exchange-traded derivatives, such as over-the-counter forwards and options.

●	Level 3 – Prices or valuation techniques requiring inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

Page 14

Notes to Unaudited Condensed Consolidated Financial Statements

Ball Corporation and Subsidiaries

15.	Fair Value of Financial Instruments ~~Subsequent Events~~(continued)

The following table summarizes by level within the fair value hierarchy the company’s financial assets and liabilities accounted for at fair value on a recurring basis as of March 30, 2008. The company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels.

($ in millions)	Level 1		Level 2		Total

Assets:
Current commodity derivatives (a)	$	–	$	68.7	$	68.7
Noncurrent commodity derivatives (b)		–		58.5		58.5
Nonmonetary exchanges (c)		–		23.9		23.9
Other assets		–		6.0		6.0
Total assets	$	–	$	157.1	$	157.1

Liabilities:
Current commodity derivatives (d)	$	–	$	49.5	$	49.5
Noncurrent commodity derivatives (e)		–		37.6		37.6
Deferred compensation liabilities (f)		109.2		68.0		177.2
Other liabilities		–		6.5		6.5
Total liabilities	$	109.2	$	161.6	$	270.8

(a)	Amounts are included in the consolidated balance sheet within deferred taxes and other current assets.

(b)	Amounts are included in the consolidated balance sheet within intangibles and others assets, net.

(c)	Amounts are included in the consolidated balance sheet within receivables, net.

(d)	Amounts are included in the consolidated balance sheet within other current liabilities.

(e)	Amounts are included in the consolidated balance sheet within deferred taxes and other liabilities.

(f)	See Note 12.

The company has not identified any Level 3 items at March 30, 2008. The fair value of the company’s pension assets will be evaluated under SFAS No. 157 as of December 31, 2008, as part of the year-end valuation of the company’s pension benefit obligations.

The company uses closing spot and forward market prices as published by the London Metal Exchange, Reuters and Bloomberg to determine the fair value of its aluminum, currency and interest rate spot and forward contracts. Option contracts are valued using a Black Scholes model with observable market inputs for aluminum, currency and interest rates. The company additionally evaluates counterparty creditworthiness to determine if any adjustment to fair value is needed, and since the company’s financial derivatives are traded in highly liquid markets, no illiquidity reserve is taken against the determined fair value.

For the three months ended March 30, 2008, the company recorded a net pretax loss of $2.6 million for the changes in the fair value of its derivative instruments, the majority of which is expected to reverse in future periods.

As permitted, the company’s long-term debt is not carried in the company’s financial statements at fair value. The fair value of the long-term debt was estimated at $2,596.2 million as of March 30, 2008, as compared to its carrying value of $2,585.8 million. Rates currently available to the company for loans with similar terms and maturities are used to estimate the fair value of long-term debt based on cash flows.

Page 15

Notes to Unaudited Condensed Consolidated Financial Statements

Ball Corporation and Subsidiaries

16.	Subsequent Event

On ~~October 24, 2007, Ball~~April 23, 2008, the company announced plans to close a U.S. metal beverage packaging plant in Kent, Washington. The plant operates two, 12-ounce aluminum beverage can manufacturing ~~facilities and~~lines that produce approximately 1.1 billion cans annually. Those lines will be redeployed to ~~exit the custom and decorative tinplate can business located~~generate higher returns on those assets elsewhere in Baltimore, Maryland. Ball will close its food and household products packaging facilities in Tallapoosa, Georgia, and Commerce, California, both of which manufacture aerosol and general line cans. The two plant closures will result in a net reduction in manufacturing capacity of 10 production lines, including the relocation of two aerosol lines into existing Ball facilities. An after-taxBall's worldwide system. A pretax charge of approximately ~~$26~~$12 million ($7 million after tax) will be recorded in the ~~fourth quarter. The cash costs of these actions, which are planned to be completed in early 2009, are~~second quarter results, and the plant is expected to be ~~offset by proceeds on asset dispositions and tax recoveries.~~

~~Page 21~~

We recognize sales under long-term contracts in the aerospace and technologies segment using the cost-to-cost, percentage of completion method of accounting. Our present contract mix consists of approximately ~~two-thirds~~70 percent cost-type contracts, which are billed at our costs plus an agreed upon and/or earned profit component, ~~and approximately one-third~~while the remainder are fixed price contracts. We include time and material contracts in the fixed price category because such contracts typically provide for the sale of engineering labor at fixed hourly rates. ~~The segment’s failure~~Failure to be awarded certain key contracts could adversely affect ~~its performance during 2008 compared to 2007.~~segment performance.

Throughout the period of contract performance, we regularly reevaluate and, if necessary, revise our estimates of BATC’s total contract revenue, total contract cost and progress toward completion. Because of contract payment schedules, limitations on funding and other contract terms, our sales and accounts receivable for this segment include amounts that have been earned but not yet billed.

Management uses various measures to evaluate company performance. The primary financial metric we use is economic value added (tax-effected operating earnings, as defined by the company, less a charge for net operating assets employed). Our goal is to increase economic value added on an annual basis. Other financial metrics we use are earnings before interest and taxes (EBIT); earnings before interest, taxes, depreciation and amortization (EBITDA); diluted earnings per share; operating cash flow and free cash flow (generally defined by the company as cash flow from operating activities less capital expenditures). These financial measures may be adjusted at times for items that affect comparability between periods. Nonfinancial measures in the packaging segments include production efficiency and spoilage rates, quality control figures, environmental, health and safety statistics and production and shipment volumes. Additional measures used to evaluate performance in the aerospace and technologies segment include contract revenue realization, award and incentive fees realized, proposal win rates and backlog (including awarded, contracted and funded backlog).

We recognize that attracting, developing and retaining ~~quality~~highly talented employees isare essential to the success of Ball and, because of this, we strive to pay employees competitively and encourage their ownership of the company’s common stock as part of a diversified portfolio. For most management employees, a meaningful portion of compensation is at risk as an incentive, dependent upon economic ~~value added~~value-added operating performance. For more senior positions, more compensation is at ~~risk.~~risk through economic value-added performance and various stock compensation plans. Through our employee stock purchase plan and 401(k) plan, which matches employee contributions with Ball common stock, employees, regardless of organizational level, have opportunities to own Ball stock.

CONSOLIDATED SALES AND EARNINGS

The company has five reportable segments organized along a combination of product lines and geographic areas: (1) metal beverage packaging, ~~Americas;~~Americas and Asia; (2) metal beverage packaging, ~~Europe/Asia;~~Europe; (3) metal food and household products packaging, Americas; (4) plastic packaging, Americas; and (5) aerospace and technologies. Due to first quarter 2008 management reporting changes, Ball’s PRC operations are now included in the metal beverage packaging, Americas and Asia, segment. The 2007 segment information has been retrospectively adjusted to conform to the current year presentation. We also have investments in companies in the U.S., the PRC and Brazil, which are accounted for using the equity method of accounting and, accordingly, those results are not included in segment sales or earnings.

During the fourth quarter of 2006, the company changed its method of inventory accounting for certain inventories in the metal beverage, Americas, and the metal food and household products packaging, Americas, segments from the last-in, first-out (LIFO) method to the first-in, first-out (FIFO) method. Effective January 1, 2007,a plastic pail product line with expected annual net sales of $59 million was transferred from the metal food and household products packaging, Americas, segment to the plastic packaging, Americas, segment. The three months and nine months ended October 1, 2006, have been retrospectively adjusted to conform to the ~~current presentation for the FIFO inventory accounting method and the transfer of the plastic pail product line.~~

Metal Beverage Packaging, Americas and Asia

The metal beverage packaging, Americas and Asia, segment consists of operations located in the U.S., Canada, ~~and~~ Puerto Rico and the PRC, which manufacture metal container products used in beverage ~~packaging.~~ During the second quarter of 2007, Miller Brewing Company (Miller), a U.S. customer, asserted various claims against a wholly owned subsidiary of the company, primarily related to the pricing of the aluminum component of thepackaging, as well as non-beverage plastic containers ~~supplied to Miller. On October 4, 2007, the dispute was settled in mediation. Ball will continue to supply all of Miller~~’~~s beverage can~~manufactured and ~~end business through 2015 and Miller will receive $85.6 million ($51.8 million after tax), with approximately $70 million to be paid~~sold mainly in the ~~first quarter of 2008. The remainder of the third quarter accrual will be recovered over the life of the contract. Segment sales and earnings were reduced by the $85.6 million charge.~~

~~Page 22~~

~~Including the reduction of net sales resulting from the customer settlement, this~~PRC. This segment accounted for 3441 percent of consolidated net sales in the ~~third quarter~~first three months of ~~2007 (36~~2008 (41 percent in ~~2006) and 37 percent in the first nine months (40 percent in 2006)~~2007). Sales in 2008 were ~~5 percent higher in the first nine months of~~essentially flat compared to 2007 ~~than in 2006~~ as ~~a result of~~ higher sales prices ~~which were~~in 2008, primarily due to rising aluminum prices, ~~and the pass through of various cost increases to customers. These favorable factors~~ were offset by an overall decrease in volumes of more than 4 percent. The decrease in North American sales volumes was somewhat offset by a 6 percent sales volume increase in the ~~customer settlement which had~~PRC. Lower first quarter sales volumes in North America were caused in part by the ~~effect~~loss of ~~decreasing sales by 4 percent~~certain 12-ounce beer can business that the company decided not to continue.

Page 19

First quarter segment earnings of $74 million were lower than first quarter 2007 earnings of $101.9 million primarily due to approximately $43 million of raw material inventory gains realized in 2007 ~~as compared to 2006.~~

~~Including the effect of the customer settlement, the segment had a loss of $20.6 million~~not recurring in ~~the third~~2008. First quarter ~~of 2007, compared to~~ third quarter 2006 earnings of $73 million. Earnings of $155.8 million in the first nine months of 2007 were 19 percent lower than the prior year earnings of $193.5 million for the same period. Excluding the $85.6 million settlement,2008 earnings were ~~$241.4 million, or 25 percent~~favorably impacted by higher ~~than in the prior year. Third quarter 2007 comparable segment earnings were lower due to~~sales prices and improved sales mix ~~claims~~totaling approximately $9 million and certain higher costs compared to third quarter 2006. Contributing to the higher segment earnings, before the settlement, in the first nine months of 2007 were gains from purchases of raw materials in advance of scheduled price increases, lower manufacturing costs due to thepositive cost impacts from the new end technology ~~project, improved production efficiencies~~projects and ~~reduced energy costs.~~other cost saving measures totaling approximately $6 million.

We continue to focus efforts on the growing custom beverage can business, which includes cans of different shapes, diameters and fill volumes, ~~as well as~~and cans with added functional attributes (such as recloseability) for new products and product line extensions.

Subsequent Event

On April 23, 2008, the company announced plans to close a U.S. metal beverage packaging plant in Kent, Washington. The plant operates two, 12-ounce aluminum beverage can manufacturing lines that produce approximately 1.1 billion cans annually. Those lines will be redeployed to generate higher returns on those assets elsewhere in Ball's worldwide system. A pretax charge of approximately $12 million ($7 million after tax) will be recorded in the second quarter results, and the plant is expected to cease production during the third quarter of 2008. On final disposition of the plant and equipment, the closure is expected to be approximately $4 million cash positive inclusive of income tax benefits.

Metal Beverage Packaging, ~~Europe/Asia~~Europe

The metal beverage packaging, ~~Europe/Asia,~~Europe, segment includes metal beverage packaging products manufactured and sold mainly in ~~Europe and Asia, as well as plastic containers manufactured and sold in Asia.~~Europe. This segment accounted for 2723 percent of consolidated net sales in the ~~third quarter~~first three months of ~~2007 and 26~~2008 (19 percent in ~~the first nine months (23 percent in the respective periods in 2006)~~2007). Segment sales in the ~~third~~first quarter ~~and first nine months~~ of ~~2007~~2008 were ~~23 percent and 25~~26 percent higher ~~respectively,~~ compared to the same ~~periods~~period of the prior year due largely to ~~strong demand,~~13 percent higher volumes consistent with overall market growth ~~higher sales volumes, higher pricing~~ and 13 percent related to foreign currency gains on the strength of the euro. Higher segment sales volumes were aided by ~~overall market dynamics in Europe and~~ the ~~PRC that favor beverage cans, as well as~~ growth in Europe of custom can ~~volumes. Offsetting these favorable trends was colder and wetter than normal summer weather in many parts~~volumes, including the successful introduction of ~~Europe.~~the Ball sleek can into Italy. The slow return of the metal beverage can to the German market, following the mandatory deposit legislation previously reported on, is being augmented by stronger demand outside Germany.

Segment earnings were ~~$81 million in the third quarter of 2007 and $218.5~~$48 million in the first ~~nine~~three months of 2008 compared to ~~$66 million and $235.7~~$36.8 million for the same ~~periods~~period in ~~2006, respectively. The third quarter~~2007. Earnings in 2008 were approximately $39 million higher due to the combination of increased sales volumes and ~~first nine months of 2006 included $2.8~~price recovery initiatives, as well as $4 million ~~and $76.9 million, respectively, of property insurance gains~~ related to the fire at the company’s Hassloch, Germany, metal beverage can plant (further details are provided below). Earnings in 2007 were favorably impacted by increased sales volumes; price recovery initiatives; a stronger ~~euro; and manufacturing and selling, general and administrative cost control programs.~~euro. These improvements were partially offset by $34 million of higher raw material, freight and energy costs.

On April 1, 2006, a fire in the metal beverage can plant in Hassloch, Germany, damaged a significant portion of the building and machinery and equipment. A €26.7 million ($33.8 million) fixed asset write down was recorded in 2006 to reflect the estimated impairment of the assets damaged as a result of the fire. As a result, pretax gains of €58.4 million ($74.1 million) and €2.2 million ($2.8 million) were recorded in the consolidated statement of earnings in the second and third quarters of 2006, respectively. The total pretax gain was revised to €59.6 million ($75.5 million) by the end of 2006. In accordance with the final agreement reached with the insurance company in November 2006, the final property insurance proceeds of €37.6 million ($48.6 million) were received in January 2007. Additionally, ~~€5.1~~€8.3 million ($710.9 million) ~~and €26.2 million ($35.1 million) were~~was recognized ~~as reductions~~in the first quarter of ~~cost of sales during the third quarter and first nine months of~~ 2007 ~~respectively,~~ for insurance recoveries related to business interruption ~~costs. A total of €0.8 million of additional business interruption recoveries has been agreed upon with~~costs and is contemplated in the ~~insurance carrier and will be recognized during the fourth quarter of 2007.~~

earnings improvement discussed above.

~~Page 23~~

Metal Food & Household Products Packaging, Americas

The metal food and household products packaging, Americas, segment consists of operations located in the U.S., Canada and Argentina. The ~~company acquired U.S. Can Corporation (U.S. Can) on March 27, 2006, and with that acquisition, added to its metal food can business~~segment includes the ~~production~~manufacture and sale of metal cans used for food packaging, aerosol cans, paint cans and decorative specialty cans. ~~Effective January 1, 2007,~~ responsibility for a plastic pail product line was transferred to the plastic packaging, Americas, segment. Accordingly, 2006 segment amounts have been retrospectively adjusted to reflect the transfer.

Segment sales ~~which comprised 18~~in the first quarter of 2008 constituted 15 percent of consolidated net sales (17 percent in 2007). First quarter 2008 sales were 5 percent lower than in the ~~third~~first quarter of 2007 ~~(20 percent in 2006)~~due to lower preseason shipments to seasonal customers and ~~16 percent~~decisions by management to discontinue unprofitable business, resulting in the ~~first nine months (17 percent in 2006), were 5 percent below the third~~closure of our Commerce, California, and Tallapoosa, Georgia, facilities.

Page 20

First quarter of 2006 and 7 percent above the first nine months. The decrease in the third quarter was due to lost business that impacted third quarter 2007 sales volumes along with customer operating issues, including a fire in a customer’s factory, and unfavorable weather conditions in the Midwest. The increase in the first nine months was due to the inclusion of sales from the acquisition of U.S. Can, partially offset by the unfavorable factors discussed above.

~~Segment~~segment earnings were ~~$14.5~~$14.8 million ~~in the third quarter of 2007~~ compared to ~~$19.7 million in the third quarter~~a loss of ~~2006, and $25.4 million in the first nine months of 2007 compared to $25.5~~$0.2 million in the same period ~~in 2006.~~last year. The ~~decrease in earnings~~performance in the ~~third~~first quarter of 2008 was primarily related to lower manufacturing costs and efficiencies in the first quarter of 2008 attributable to ongoing integration efforts related to the closure of Ball’s Burlington, Ontario, manufacturing facility in the fourth quarter of 2006. First quarter 2008 earnings also reflect improved pricing and manufacturing performance, partially offset by lower sales volumes as customers worked off higher 2007 year end finished goods inventories.

The company announced in the fourth quarter of 2007 ~~was due to lower sales volumes, for~~that by the ~~reasons discussed above,~~end of 2008 it would close metal food and ~~increased raw material costs. The flat earnings~~household products packaging plants in ~~the first nine months of 2007 compared to the first nine months of 2006 was due to increased raw material costs, offset by improved manufacturing performance in 2007~~Commerce, California, and higher cost of sales in the second quarter of 2006 due to inventory step-up costs relating to the U.S. Can acquisition. The first nine months of 2006 included a net pretax charge of $1.7 million ($1.2 million after tax), primarily related to the shut down of a food can manufacturing line in Whitby, Ontario.

Tallapoosa, Georgia. Additional details regarding business consolidation activities are available in Note 5 accompanying the unaudited condensed consolidated financial statements included within Item 1 of this report.

Plastic Packaging, Americas

The plastic packaging, Americas, segment consists of operations located in the U.S. and Canada, which manufacture polyethylene terephthalate (PET) and polypropylene plastic container products used mainly in beverage and food packaging, as well as high density polyethylene and polypropylene containers for industrial and household product applications. On March 28, 2006, Ball acquired certain North American plastic bottle container assets from Alcan Packaging (Alcan), including two plastic container manufacturing plants in the U.S. and one in Canada, as well as certain manufacturing equipment and other assets from other Alcan facilities. Effective January 1, 2007, the plastic packaging, Americas, segment assumed responsibility for plastic pail assets acquired as part of the U.S. Can acquisition. Accordingly, 2006 segment amounts have been retrospectively adjusted to reflect the transfer.

Segment sales, which accounted for 1011 percent of consolidated net sales in ~~both~~ the ~~third~~first quarter ~~and first nine months~~ of ~~2007~~2008 (11 percent ~~and 10 percent for the comparable periods~~ in ~~2006)~~2007), were ~~down 3 percent~~up $2.3 million compared to the ~~third quarter~~same period in 2007. The increase was primarily the result of ~~2006, and 11 percent higher than~~raw material cost increases passed through, which accounted for approximately $20 million of the ~~first nine months of 2006. The segment sales~~increase. This increase in ~~the first nine months of 2007~~net sales was ~~related to the March 2006 Alcan acquisition and the inclusion of the acquired U.S. Can plastic pail business, as well as higher PET~~offset by 5 percent lower bottle sales volumes ~~and prices compared~~due to ~~2006. The segment sales~~a decrease in ~~the third quarter of 2007 was attributable to lower~~carbonated soft drink and water bottle ~~volumes,~~sales, partially offset by higher ~~prices on existing~~sales in specialty business ~~lines~~markets (e.g., custom hot-fill, alcohol, food and juice drinks) and decreased preform sales due to Ball's decision to forego certain low margin business.

Segment earnings of $4.8 million in the first three months of 2008 were higher than prior year earnings of $2.3 million largely due to the ~~pass through of resin cost increases.~~ previously mentioned increase in specialty business sales partially offset by the lower carbonated soft drink, water and preform sales volumes.

In view of the substandard ~~performance of our~~ PET ~~business,~~margins, we continue to focus our efforts on margin recovery initiatives, as well as PET development efforts in the custom hot-fill, beer, wine, flavored alcoholic beverage and specialty container markets. In the polypropylene plastic container ~~area,~~arena, development efforts are primarily focused on custom packaging markets.

~~Segment earnings of $7.7million in the third quarter of 2007~~Aerospace and $17.1 million in the first nine months were lower than 2006 earnings of $7.9 million and $18.3 million for the same periods, respectively. The lower earnings were largely due to lower margins related to the temporary idling of PET bottle production capacity attributable to lower-than-expected custom PET sales volumes and higher labor and depreciation costs.

~~Page 24~~

~~Aerospace &~~ Technologies

Aerospace and technologies segment sales, which represented 10 percent of consolidated net sales in the ~~third~~first quarter of ~~2007 (9~~2008 (12 percent in ~~2006) and 11~~2007), were 14 percent lower than in the first ~~nine months (10 percent in 2006), were 15 percent higher in the third~~ quarter of ~~2007 than in 2006~~2007. The reduction is the result of a combination of large programs winding down and ~~18 percent higher in the first nine months. The higher sales for both periods were~~program terminations and delays due to government funding constraints. The reductions were partially offset by new ~~programs,~~program starts and increased scope on previously awarded ~~contracts~~contracts.

On February 15, 2008, BATC completed the sale of its shares in Ball Solutions Group Pty Ltd (BSG) to QinetiQ Pty Ltd for approximately $10.5 million, including cash sold of $1.8 million. BSG was previously a wholly owned Australian subsidiary of BATC that provided services to the Australian department of defense and ~~cost overruns.~~related government agencies. After an adjustment for working capital items, the sale resulted in a pretax gain of $7.1 million ($4.4 million after tax). Segment earnings ~~were $18.3 million in the third quarter~~ of ~~2007 compared to $15.6 million in 2006 and $53.5~~$22 million in the first ~~nine~~three months of 2008 included this gain. On a comparable basis, segment earnings were $14.9 million compared to ~~$33.4~~$19.6 million for the same period in ~~2006. Earnings improvement through~~2007. Excluding the ~~third quarter~~gain on sale, earnings were lower in 2008 than in 2007 as a result of ~~2007 was due to an improved contract mix~~the lower sales and ~~better~~a number of nonrecurring favorable program ~~execution.~~profit adjustments in 2007.

Contracted backlog in the aerospace and technologies segment at ~~September~~March 30, ~~2007,~~2008, was ~~$882~~$727 million compared to a backlog of ~~$886~~$774 million at December 31, ~~2006.~~2007. Comparisons of backlog are not necessarily indicative of the trend of future operations.

Page 21

Additional Segment Information

For additional information on our segment operations, see the ~~Summary of~~ Business by Segment Information in Note 3 accompanying the unaudited condensed consolidated financial statements included within Item 1 of this report.

~~Subsequent Event~~

On October 24, 2007, Ball announced plans to close two manufacturing facilities and to exit the custom and decorative tinplate can business located in Baltimore, Maryland. Ball will close its food and household products packaging facilities in Tallapoosa, Georgia, and Commerce, California, both of which manufacture aerosol and general line cans. The two plant closures will result in a net reduction in manufacturing capacity of 10 production lines, including the relocation of two aerosol lines into existing Ball facilities. An after-tax charge of approximately $26 million will be recorded in the fourth quarter and, once completed in early 2009, these actions are expected to yield annualized pretax cost savings in excess of $15 million. The cash costs of these actions are expected to be offset by proceeds on asset dispositions and tax recoveries.

Selling, General and Administrative

Selling, general and administrative (SG&A) expenses were ~~$84.3~~$81.6 million in the ~~third~~first quarter of ~~2007~~2008 compared to ~~$66.5~~$82.2 million for the same period in 2006 and $253.8 million in the first nine months of 2007 compared to $210.3 million in the first nine months of 2006. Contributing to higher expenses in 2007 compared to 2006 were $4.5 million of additional SG&A from the U.S. Can acquisition, expense of $9.6 million associated with the mark-to-market adjustment of a deferred stock incentive compensation plan, higher2007. Lower research and development costs ~~increased sales~~of $4 million and ~~marketing efforts and normal~~other miscellaneous net cost reductions in 2008 were partially offset by $1 million of higher stock-based compensation and ~~benefit increases, including incentive compensation. Also,~~ a ~~$5.8~~$2 million ~~out-of-period adjustment was included~~increase in ~~SG&A expenses in the first quarter of 2006 (discussed in further detail in Note 1 accompanying the unaudited condensed consolidated financial statements included within Item 1 of this report).~~bad debt expense.

Interest and Taxes

Consolidated interest expense was $36.2 million for the ~~third quarter~~first three months of ~~2007~~2008 compared to ~~$37.2~~$37.9 million ~~for~~in the same period of ~~2006 and $112.2 million for the first nine months of 2007 compared to $98.1 million for the same period in 2006.~~2007. The ~~higher~~reduced expense in ~~2007~~2008 was primarily due to ~~higher average borrowings in connection with the company’s acquisitions in March 2006, as well as higher foreign exchange rates and~~lower interest ~~rates on foreign currency borrowings in Europe, partially offset by the reduced debt levels in the third quarter of 2007 compared to the third quarter of 2006.~~rates.

~~The consolidated~~While the effective income tax rate was ~~26.5~~approximately 32 percent for the first ~~nine months~~quarters of both 2008 and 2007, ~~compared to 29.7 percent for~~ the ~~same period in 2006. The lower~~ rate in ~~2007~~2008 was ~~primarily~~favorably impacted by the ~~result of a tax benefit recorded at the marginal rate on the legal settlement of a customer claim and net tax benefit adjustments of $17.2 million recorded~~earnings mix increasing in ~~the third quarter of 2007, as compared to $6.4 million in 2006. The $17.2 million third quarter net reduction in the tax provision was a result of enacted income tax rate reductions in~~lower taxed jurisdictions, including Germany and the United Kingdom, ~~and a tax loss related to the company’s Canadian operations. These benefits were~~which had enacted rate reductions effective January 1, 2008. This was somewhat offset by a decrease in U.S. foreign tax ~~provision to adjust for~~credit utilization and the ~~final settlement negotiations concluded in~~U.S. research and development credit expiring at the ~~quarter with the Internal Revenue Service (IRS)~~

~~Page 25~~

~~related to a company-owned life insurance plan (discussed below). Without the above reduction in the benefit in the third quarter~~end of 2007, the effective tax rate for 2007 would be higher than 2006 due to the following: (1) the impact of Financial Accounting Standards Board (FASB) Interpretation No. (FIN) 48, “Accounting for Uncertainty in Income Taxes,” which the company adopted as of January 1, 2007; (2) lower projected tax credits in 2007; (3) the expiration in 2007 of the extraterritorial income exclusion for exporters and (4) a shift in the pretax income mix to higher tax jurisdictions.

The company concluded final settlement negotiations with the IRS on the deductibility of interest expense on incurred loans from a company-owned life insurance plan. An additional accrual of $7 million was made in the quarter under FIN 48 to adjust the accrued liability to the final settlement of $18.4 million, including interest, for the years 2000-2004, which were under examination, and for the unaudited years 2005-2007 (year-to-date). This settlement included agreement on the prospective treatment of interest deductibility on the policy loans, which will not have a significant impact on earnings per share, cash flow or liquidity in future periods.

~~Further details are available in Note 12 to the unaudited condensed consolidated financial statements within Item 1 of this report.~~2007.

NEW ACCOUNTING PRONOUNCEMENTS

For information regarding recent accounting pronouncements, see Note 2 to the unaudited condensed consolidated financial statements within Item 1 of this report.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

Our primary sources of liquidity are cash provided by operating activities and external borrowings. We believe that cash flows from operations and cash provided by short-term and revolver borrowings, when necessary, will be sufficient to meet our ongoing operating requirements, scheduled principal and interest payments on debt, dividend payments and anticipated capital expenditures. However, our liquidity could be impacted significantly by a decrease in demand for our products, which could arise from competitive circumstances, or any of the other factors described in Item 1A, “Risk Factors,” within the company’s annual report.

Cash flows ~~provided by~~used in operations were ~~$405.2~~$214.6 million in the first ~~nine~~three months of ~~2007~~2008 compared to ~~$116.1~~$107.7 million in the first ~~nine~~three months of ~~2006.~~2007. The ~~improvement over 2006~~reduction in 2008 was primarily due to ~~higher net earnings before~~ the approximately $70 million payment in January of a legal settlement to a customer, as well as a higher increase in ~~2007 and~~seasonal inventories, partially offset by an increase in the ~~insurance gain in 2006 related to the Hassloch fire. The improvement in 2007 was also the result of reduced changes in working capital components and lower income tax payments.~~accounts receivable sales program.

Based on information currently available, we estimate ~~2007~~2008 capital spending to be approximately ~~$300~~$350 million ~~net of property insurance recoveries,~~ compared to ~~2006 net~~2007 capital spending of ~~$218.3 million.~~$259.9 million (net of $48.6 million in insurance recoveries). Approximately 75 percent of the total capital spending will be in the metal beverage can segments and more than 50 percent of the total spending will be for new top-line growth projects. The 2008 capital spending projection includes the effects of foreign currency exchange rates as many of our capital projects will occur in Europe.

Interest-bearing debt ~~decreased~~increased to ~~$2,398.3~~$2,759.6 million at ~~September~~March 30, ~~2007,~~2008, compared to ~~$2,451.7~~$2,358.6 million at December 31, ~~2006,~~2007, primarily due to ~~improved cash flows from operations, partially offset by~~seasonal working capital needs, higher common stock repurchases ~~higher capital spending~~ and a higher ~~euro.~~euro exchange rate. We intend to allocate our operating cash flow in ~~the balance of 2007~~2008 to capital spending programs, common stock repurchases and ~~pension funding.~~dividends. Our stock repurchase program, net of issuances, is expected to be ~~approximately $200~~in the range of $300 million in ~~2007~~2008 compared to ~~$45.7~~$211.3 million in ~~2006.~~2007. Through the first ~~nine months~~quarter of ~~2007,~~2008, we repurchased ~~$155.1~~$125 million of our common stock, net of issuances, including ~~the $51.9~~a $31 million settlement inon January ~~2007~~7, 2008, of a forward contract ~~commenced~~entered into in December ~~2006.~~2007 for the repurchase of 675,000 shares.

Page 22

Total required contributions to the company’s defined benefit plans, not including the unfunded German plans, are expected to be approximately ~~$57~~$47 million in 2007. As part of the company’s overall debt reduction plan, we anticipate contributing up to an incremental $45 million ($27 million after tax) over the minimum required contributions to our North American pension plans during the fourth quarter of 2007. We expect these incremental contributions to bring the North American pension plans’ funding to the 95 percent level.2008. This estimate may change based on plan asset performance, the revaluation of the plans’ liabilities later in ~~2007~~2008 and revised estimates of ~~2007~~2008 full-year cash flows. Payments to participants in the unfunded German plans are expected to be approximately ~~€19~~€18 million (approximately $28 million) for the full ~~year (approximately $26 million).~~year.

At ~~September~~March 30, ~~2007,~~2008, approximately ~~$683~~$465 million was available under the company’s multi-currency revolving credit facilities. In addition, the company had short-term uncommitted credit facilities of ~~up to $342~~$337 million at the end of the ~~third~~first quarter, of which ~~$36.4~~$173.8 million was ~~outstanding and due on demand.~~outstanding.

~~Page 26~~

The company has a receivables sales agreement that provides for the ongoing, revolving sale of a designated pool of trade accounts receivable of Ball’s North American packaging operations, up to $250 ~~million (increased from $225 million in August 2007).~~million. The agreement qualifies as off-balance sheet financing under the provisions of Statement of Financial Accounting Standards (SFAS) No. 140, as amended by SFAS No. 156. Net funds received from the sale of the accounts receivable totaled ~~$170~~$238 million at ~~September~~March 30, ~~2007,~~2008, and ~~$201.3~~$170 million at December 31, ~~2006,~~2007, and are reflected as a reduction of accounts receivable in the condensed consolidated balance sheets.

The company was in compliance with all loan agreements at ~~September~~March 30, ~~2007,~~2008, and has met all debt payment obligations. Additional details about the company’s debt and receivables sales agreement are available in Notes 11 and 6, respectively, accompanying the unaudited condensed consolidated financial statements included within Item 1 of this report.

In accordance with new United Kingdom pension regulations, Ball has provided an £8 million guarantee to the plan for its defined benefit plan in the United Kingdom. If the company’s credit rating falls below specified levels, Ball will be required to either: (1) contribute an additional £8 million to the plan; (2) provide a letter of credit to the plan in that amount or (3) if imposed by the appropriate regulatory agency, provide a lien on company assets in that amount for the benefit of the plan. The guarantee can be removed upon approval by both Ball and the pension plan trustees.

CONTINGENCIES, INDEMNIFICATIONS AND GUARANTEES

Details about the company’s contingencies, indemnifications and guarantees are available in Notes 17 and 18 accompanying the unaudited condensed consolidated financial statements included within Item 1 of this report.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

In the ordinary course of business, we employ established risk management policies and procedures to reduce our exposure to fluctuations in commodity prices, interest rates, foreign currencies and prices of the company’s common stock in regard to common share repurchases. Although the instruments utilized involve varying degrees of credit, market and interest risk, the counterparties to the agreements are expected to perform fully under the terms of the agreements.

We have estimated our market risk exposure using sensitivity analysis. Market risk exposure has been defined as the changes in fair value of derivative instruments, financial instruments and commodity positions. To test the sensitivity of our market risk exposure, we have estimated the changes in fair value of market risk sensitive instruments assuming a hypothetical 10 percent adverse change in market prices or rates. The results of the sensitivity analysis are summarized below.

Page 23

Commodity Price Risk

We manage our North American commodity price risk in connection with market price fluctuations of aluminum primarily by entering into ~~can and can end~~container sales contracts ~~which generally~~that include aluminum-based pricing terms that ~~consider~~generally reflect price fluctuations under our commercial supply contracts for aluminum purchases. ~~Such~~The terms ~~may~~ include a fixed, ~~price~~floating or ~~an upper limit to the~~pass-through aluminum component ~~of pricing, although fixed prices or upper limits have been used much less frequently in recent years given the significant increase in aluminum ingot prices.~~pricing. This matched pricing affects substantially all of our North American metal beverage packaging ~~Americas,~~ net sales. We also, at times, use certain derivative instruments such as option and forward contracts as cash flow and fair value hedges ~~to match~~of commodity price risk ~~with~~where there is not a pass-through arrangement in the sales ~~contracts.~~contract.

Most of the plastic packaging, Americas, sales contracts ~~negotiated through the end of the third quarter~~ include provisions to fully pass through resin cost changes. As a result, we believe we have minimal exposure related to changes in the cost of plastic resin. ~~Many of our~~Most metal food and household products packaging, Americas, sales contracts ~~negotiated through the end of the third quarter~~ either include provisions permitting us to pass through some or all steel cost changes we incur, or they incorporate annually negotiated steel costs. In 2008 and in 2007, we were able to pass through to our customers the majority of steel cost increases. We anticipate that we will be able to pass through the majority of the steel price increases that occur ~~through~~over the ~~end of 2007 and into 2008.~~next twelve months.

~~Page 27~~

In Europe and ~~Asia,~~the PRC, the company manages the aluminum and steel raw material commodity price risks through annual and long-term contracts for the purchase of the materials, as well as certain sales ~~contracts,~~of containers, that reduce the ~~company~~’scompany's exposure to fluctuations in commodity prices within the current year. These purchase and sales contracts include fixed price, floating and pass-through pricing arrangements. ~~To minimize Ball’s exposure to significant price changes, the company~~We also ~~uses~~use forward and option contracts as cash flow hedges to manage future aluminum price risk and foreign exchange exposures for those sales contracts where there is not a pass-through ~~arrangement.~~arrangement to minimize the company’s exposure to significant price changes.

~~Outstanding~~The company had aluminum contracts hedging its aluminum exposure with notional amounts of approximately $1 billion at March 30, 2008, and December 31, 2007. The aluminum contracts include cash flow and fair value hedges that offset sales contracts of various terms and lengths, as well as other derivative ~~contracts at~~instruments for which the ~~end of the third quarter of 2007~~company elects mark-to-market accounting. Cash flow and fair value hedges related to forecasted transactions and firm commitments expire within ~~five~~the next four years. Included in shareholders’ equity at ~~September~~March 30, ~~2007,~~2008, within accumulated other comprehensive earnings, is ~~approximately $6.3~~a net after-tax gain of $28 million ~~of net loss~~ associated with these contracts, of which ~~$7.1~~a net gain of $14 million ~~of net loss~~ is expected to be recognized in the consolidated statement of earnings during the next 12twelve months. ~~Gains and/or losses~~The net gain on these derivative contracts will be ~~offset~~passed through to customers by ~~higher and/or~~ lower ~~costs on metal purchases.~~revenue from sales contracts. Additional details about the company’s unsettled commodity derivative contracts are available in Note 15 accompanying the unaudited condensed consolidated financial statements included within Item 1 of this report.

Considering the effects of derivative instruments, the company’s ability to pass through certain raw material costs through contractual provisions, the market’s ability to accept price increases and the company’s commodity price exposures under its contract terms, a hypothetical 10 percent adverse change in the company’s steel, aluminum and resin prices could result in an estimated ~~$14.1~~$8 million after-tax reduction ofin net earnings over a one-year period. Additionally, if foreign currency exchange rates were to change adversely by 10 percent, we estimate there could be ~~an $11.6~~a $14 million after-tax reduction ofin net earnings over a one-year period for foreign currency exposures on ~~metal.~~raw materials, the majority of which would occur from a weakening of the Chinese renminbi versus the U.S. dollar. Actual results may vary based on actual changes in market prices and rates.

The company is also exposed to fluctuations in prices for ~~energy such as~~ natural gas and electricity, as well as the cost of diesel fuel as a component of freight cost. A hypothetical 10 percent increase in our ~~utility~~natural gas and electricity prices, without considering such pass through provisions, could result in an estimated ~~$10.1~~$11 million after-tax reduction of net earnings over a one-year period. A hypothetical 10 percent increase in ~~our~~ diesel fuel ~~surcharge~~prices could result in an estimated ~~$2.1~~$2 million after-tax reduction of net earnings over the same period. Actual results may vary based on actual changes in market prices and rates.

	Large accelerated filer x	Accelerated filer o
	~~Large accelerated filer~~ x ~~Accelerated filer~~ o Non-accelerated filer o	Smaller reporting company o

	Class		Outstanding at ~~October 28, 2007~~April 27, 2008
	Common Stock, without par value		~~100,498,666~~97,778,085 shares

		Page Number

PART I.	FINANCIAL INFORMATION:

Item 1.	Financial Statements

	Unaudited Condensed Consolidated Statements of Earnings for the Three Months Ended March 30, 2008, and ~~Nine Months Ended September 30,~~April 1, 2007 ~~and October 1, 2006~~		1

	Unaudited Condensed Consolidated Balance Sheets at ~~September~~March 30, ~~2007,~~2008, and December 31, ~~2006~~2007		2

	Unaudited Condensed Consolidated Statements of Cash Flows for the ~~Nine~~Three Months Ended ~~September~~March 30, ~~2007,~~2008, and ~~October~~April 1, ~~2006~~	2007	3

	Notes to Unaudited Condensed Consolidated Financial Statements		4

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		21	18

Item 3.	Quantitative and Qualitative Disclosures About Market Risk		27	23

Item 4.	Controls and Procedures		29	26

PART II.	OTHER INFORMATION		31	28

	Three Months Ended						Nine Months Ended
($ in millions, except per share amounts)	September 30, 2007			October 1, 2006			September 30, 2007			October 1, 2006

Net sales	$	1,992.1		$	1,822.3		$	5,719.1		$	5,029.7
Legal settlement (Note 5)		(85.6	)		–			(85.6	)		–
Total net sales		1,906.5			1,822.3			5,633.5			5,029.7


Costs and expenses
Cost of sales (excluding depreciation and amortization) (a)		1,659.5			1,516.7			4,736.4			4,228.2
Depreciation and amortization (Notes 8 and 10)		71.8			64.5			206.7			184.0
Property insurance gain (Note 5)		−			(2.8	)		−			(76.9	)
Business consolidation costs (Notes 5 and 16)		−			−			−			1.7
Selling, general and administrative (Note 1)		84.3			66.5			253.8			210.3
		1,815.6			1,644.9			5,196.9			4,547.3


Earnings before interest and taxes (a)		90.9			177.4			436.6			482.4


Interest expense		(36.2	)		(37.2	)		(112.2	)		(98.1	)

Earnings before taxes		54.7			140.2			324.4			384.3
Tax provision (Note 12) (a)		3.1			(36.6	)		(85.9	)		(114.2	)
Minority interests		(0.1	)		(0.1	)		(0.3	)		(0.5	)
Equity results in affiliates		3.2			3.6			9.8			11.7


Net earnings (a)	$	60.9		$	107.1		$	248.0		$	281.3


*Earnings per share (Note 15) (a):*
Basic	$	0.60		$	1.04		$	2.44		$	2.72
Diluted	$	0.59		$	1.02		$	2.40		$	2.68

Weighted average common shares outstanding (in thousands) (Note 15):
Basic		101,422			103,292			101,691			103,397
Diluted		102,997			104,901			103,372			105,124

Cash dividends declared and paid, per common share	$	0.10		$	0.10		$	0.30		$	0.30

($ in millions)	September 30, 2007			December 31, 2006
ASSETS
Current assets
Cash and cash equivalents	$	79.4		$	151.5
Receivables, net (Note 6)		852.8			579.5
Inventories, net (Note 7)		867.6			935.4
Deferred taxes, prepaid expenses and other (Note 12)		80.1			94.9
Total current assets		1,879.9			1,761.3

Property, plant and equipment, net (Note 8)		1,941.0			1,876.0
Goodwill (Notes 4 and 9)		1,837.8			1,773.7
Intangibles and other assets, net (Note 10)		356.7			429.9
Total Assets	$	6,015.4		$	5,840.9

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Short-term debt and current portion of long-term debt (Note 11)	$	169.4		$	181.3
Accounts payable		737.5			732.4
Accrued employee costs		216.3			201.1
Income taxes payable (Note 12)		35.2			71.8
Other current liabilities (Note 5)		266.4			267.7
Total current liabilities		1,424.8			1,454.3

Long-term debt (Note 11)		2,228.9			2,270.4
Employee benefit obligations (Note 13)		857.8			847.7
Deferred taxes and other liabilities (Note 12)		145.3			102.1
Total liabilities		4,656.8			4,674.5

Contingencies (Note 17)
Minority interests		1.3			1.0

Shareholders’ equity (Note 14)
Common stock (160,881,984 shares issued – 2007; 160,026,936 shares issued – 2006)		752.1			703.4
Retained earnings		1,741.0			1,535.3
Accumulated other comprehensive earnings (loss)		32.1			(29.5	)
Treasury stock, at cost (59,759,605 shares – 2007; 55,889,948 shares – 2006)		(1,167.9	)		(1,043.8	)
Total shareholders’ equity		1,357.3			1,165.4
Total Liabilities and Shareholders’ Equity	$	6,015.4		$	5,840.9

($ in millions)	March 30,			December 31,
	2008			2007
ASSETS
Current assets
Cash and cash equivalents	$	89.9		$	151.6
Receivables, net (Note 6)		675.1			582.7
Inventories, net (Note 7)		1,134.0			998.1
Deferred taxes and other current assets		156.2			110.5
Total current assets		2,055.2			1,842.9

Property, plant and equipment, net (Note 8)		1,999.9			1,941.2
Goodwill (Note 9)		1,952.6			1,863.1
Intangibles and other assets, net (Note 10)		438.5			373.4
Total Assets	$	6,446.2		$	6,020.6

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Short-term debt and current portion of long-term debt (Note 11)	$	309.1		$	176.8
Accounts payable		734.7			763.6
Accrued employee costs		192.6			238.0
Income taxes payable		33.9			15.7
Other current liabilities		225.5			319.0
Total current liabilities		1,495.8			1,513.1

Long-term debt (Note 11)		2,450.5			2,181.8
Employee benefit obligations (Note 12)		794.6			799.0
Deferred taxes and other liabilities		246.8			183.1
Total liabilities		4,987.7			4,677.0

Contingencies (Note 17)
Minority interests		1.2			1.1

Shareholders’ equity (Note 13)
Common stock (160,761,666 shares issued – 2008; 160,678,695 shares issued – 2007)		767.4			760.3
Retained earnings		1,839.1			1,765.0
Accumulated other comprehensive earnings		236.4			106.9
Treasury stock, at cost (63,080,522 shares – 2008; 60,454,245 shares – 2007)		(1,385.6	)		(1,289.7	)
Total shareholders’ equity		1,457.3			1,342.5
Total Liabilities and Shareholders’ Equity	$	6,446.2		$	6,020.6

($ in millions)	Three Months Ended
	March 30, 2008			April 1, 2007
Cash Flows from Operating Activities
Net earnings	$	83.8		$	81.2
Adjustments to reconcile net earnings to net cash used in operating activities:
Depreciation and amortization		74.6			65.0
Gain on sale of subsidiary		(7.1	)		−
Deferred taxes		(5.1	)		(7.5	)
Other, net		(18.1	)		14.0
Changes in working capital components, excluding effects of acquisitions and dispositions		(342.7	)		(260.4	)
Cash used in operating activities		(214.6	)		(107.7	)

Cash Flows from Investing Activities
Additions to property, plant and equipment		(74.5	)		(88.1	)
Proceeds from sale of subsidiary, net of cash sold		8.7			−
Property insurance proceeds (Note 8)		–			48.6
Other, net		(2.3	)		2.4
Cash used in investing activities		(68.1	)		(37.1	)

Cash Flows from Financing Activities
Long-term borrowings		270.7			215.6
Repayments of long-term borrowings		(32.3	)		(103.7	)
Change in short-term borrowings		113.7			27.3
Proceeds from issuance of common stock		6.4			11.0
Acquisitions of treasury stock		(131.5	)		(98.5	)
Common dividends		(9.6	)		(10.2	)
Other, net		0.4			3.0
Cash provided by financing activities		217.8			44.5

Effect of exchange rate changes on cash		3.2			−

Change in cash and cash equivalents		(61.7	)		(100.3	)
Cash and cash equivalents - beginning of period		151.6			151.5
Cash and cash equivalents - end of period	$	89.9		$	51.2

Summary of Business by Segment	Three Months Ended
($ in millions)	March 30, 2008			April 1, 2007

Net Sales
Metal beverage packaging, Americas & Asia	$	703.9		$	701.8
Metal beverage packaging, Europe		405.6			320.7
Metal food & household products packaging, Americas		263.8			278.8
Plastic packaging, Americas		188.9			186.6
Aerospace and technologies		178.0			206.3
Net sales	$	1,740.2		$	1,694.2

Net Earnings
Metal beverage packaging, Americas & Asia	$	74.0		$	101.9
Metal beverage packaging, Europe		48.0			36.8
Metal food & household products packaging, Americas		14.8			(0.2	)
Plastic packaging, Americas		4.8			2.3
Aerospace and technologies		14.9			19.6
Gain on sale of subsidiary (Note 4)		7.1			–
Total aerospace and technologies		22.0			19.6
Segment earnings before interest and taxes		163.6			160.4
Corporate undistributed expenses, net		(10.2	)		(7.7	)
Earnings before interest and taxes		153.4			152.7
Interest expense		(36.2	)		(37.9	)
Tax provision		(37.2	)		(36.7	)
Minority interests		(0.1	)		(0.1	)
Equity in results of affiliates		3.9			3.2
Net earnings	$	83.8		$	81.2

($ in millions)	As of		As of
	March 30, 2008		December 31, 2007
Total Assets
Metal beverage packaging, Americas & Asia	$	1,531.3	$	1,400.8
Metal beverage packaging, Europe		2,731.9		2,369.3
Metal food & household products packaging, Americas		1,134.6		1,141.7
Plastic packaging, Americas		566.6		568.8
Aerospace & technologies		272.9		278.7
Segment assets		6,237.3		5,759.3
Corporate assets, net of eliminations		208.9		261.3
Total assets	$	6,446.2	$	6,020.6

($ in millions)	First Quarter		Second Quarter		Third Quarter			Fourth Quarter		Total 2007

Net sales
Metal beverage packaging, Americas & Asia	$	701.8	$	871.2	$	711.4	(a)	$	728.1	$	3,012.5
Metal beverage packaging, Europe		320.7		484.8		454.2			393.9		1,653.6

Earnings before interest and taxes
Metal beverage packaging, Americas & Asia		101.9		89.1		(14.4	)(a)		64.2		240.8
Metal beverage packaging, Europe		36.8		86.1		74.8			31.2		228.9

($ in millions)	As of September 30, 2007		As of December 31, 2006

Total Assets
Metal beverage packaging, Americas	$	1,169.2	$	1,147.2
Metal beverage packaging, Europe/Asia		2,584.6		2,412.7
Metal food & household products packaging, Americas (a)		1,214.4		1,094.9
Plastic packaging, Americas (a)		577.7		609.0
Aerospace & technologies		292.8		268.2
Segment assets		5,838.7		5,532.0
Corporate assets, net of eliminations		176.7		308.9
Total assets	$	6,015.4	$	5,840.9

($ in millions)	U.S. Can (Metal Food & Household Products Packaging, Americas)			Alcan (Plastic Packaging, Americas)			Total

Cash	$	0.2		$	–		$	0.2
Property, plant and equipment		164.6			73.6			238.2
Goodwill		353.2			48.6			401.8
Intangibles		63.9			33.7			97.6
Other assets, primarily inventories and receivables		220.1			40.1			260.2
Liabilities assumed (excluding refinanced debt), primarily current		(184.1	)		(11.3	)		(195.4	)
Net assets acquired	$	617.9		$	184.7		$	802.6

($ in millions)	Fixed Assets/ Spare Parts			Employee Costs			Other			Total

Balance at December 31, 2006	$	6.7		$	14.1		$	4.3		$	25.1
Payments		–			(8.4	)		(3.7	)		(12.1	)
Asset dispositions and other		(1.3	)		–			(0.3	)		(1.6	)
Balance at September 30, 2007	$	5.4		$	5.7		$	0.3		$	11.4

	Three Months Ended October 1, 2006				Nine Months Ended October 1, 2006
($ in millions, except per share amounts)	As Originally Reported		As Adjusted for Accounting Change		As Originally Reported			As Adjusted for Accounting Change

Consolidated statements of earnings:
Cost of sales	$	1,526.0	$	1,516.7	$	4,232.3		$	4,228.2
Tax provision		32.9		36.6		112.6			114.2
Net earnings		101.5		107.1		278.8			281.3
Basic earnings per share		0.98		1.04		2.70			2.72
Diluted earnings per share		0.97		1.02		2.65			2.68

Consolidated statements of cash flows:
Deferred taxes						26.1			27.7
Change in working capital components						(256.6	)		(260.7	)

($ in millions)	March 30, 2008		December 31, 2007

Raw materials and supplies	$	396.3	$	433.6
Work in process and finished goods		737.7		564.5
	$	1,134.0	$	998.1

($ in millions)	Metal Beverage Packaging, Americas		Metal Beverage Packaging, Europe/Asia			Metal Food & Household Products Packaging, Americas			Plastic Packaging, Americas			Total

Balance at December 31, 2006	$	279.4	$	1,020.6		$	389.0		$	84.7		$	1,773.7
Purchase accounting adjustments (a)		–		−			(4.7	)		(1.0	)		(5.7	)
Transfer of plastic pail product line		−		−			(30.0	)		30.0			−
FIN 48 adoption adjustments (Notes 2 and 12)		−		(9.3	)		−			−			(9.3	)
Effects of foreign currency exchange rates		–		78.7			−			0.4			79.1
Balance at September 30, 2007	$	279.4	$	1,090.0		$	354.3		$	114.1		$	1,837.8

($ in millions)	Metal Beverage Packaging, Americas & Asia		Metal Beverage Packaging, Europe		Metal Food & Household Products Packaging, Americas		Plastic Packaging, Americas		Total
Balance at December 31, 2007	$	310.1	$	1,084.6	$	354.3	$	114.1	$	1,863.1
Effects of foreign currency exchange rates		–		89.5		−		–		89.5
Balance at March 30, 2008	$	310.1	$	1,174.1	$	354.3	$	114.1	$	1,952.6

	September 30, 2007					December 31, 2006					March 30, 2008					December 31, 2007
(in millions)	In Local Currency		In U.S. $			In Local Currency		In U.S. $			In Local Currency		In U.S. $			In Local Currency		In U.S. $

Notes Payable
6.875% Senior Notes, due December 2012 (excluding premium of $2.8 in 2007 and $3.2 in 2006)	$	550.0	$	550.0		$	550.0	$	550.0
6.625% Senior Notes, due March 2018 (excluding discount of $0.8 in 2007 and $0.9 in 2006)	$	450.0		450.0		$	450.0		450.0
6.875% Senior Notes, due December 2012 (excluding premium of $2.5 in 2008 and $2.7 in 2007)											$	550.0	$	550.0		$	550.0	$	550.0
6.625% Senior Notes, due March 2018 (excluding discount of $0.8 in 2008 and $0.8 in 2007)											$	450.0		450.0		$	450.0		450.0
Senior Credit Facilities, due October 2011 (at variable rates)
Term A Loan, British sterling denominated	₤	85.0		173.9		₤	85.0		166.4		₤	82.9		165.3		₤	82.9		164.7
Term B Loan, euro denominated	€	350.0		499.1		€	350.0		462.0		€	341.3		539.3		€	341.3		498.2
Term C Loan, Canadian dollar denominated	C$	129.0		129.7		C$	134.0		114.9		C$	126.8		124.2		C$	126.8		127.6
Term D Loan, U.S. dollar denominated	$	500.0		500.0		$	500.0		500.0		$	487.5		487.5		$	487.5		487.5
U.S. dollar multi-currency revolver borrowings	$	10.0		10.0		$	15.0		15.0		$	240.0		240.0		$	–		–
British sterling multi-currency revolver borrowings	₤	4.0		8.2		₤	4.0		7.8		₤	2.1		4.2		₤	2.1		4.2
Canadian dollar multi-currency revolver borrowings	C$	7.5		7.5			−		−
Industrial Development Revenue Bonds
Floating rates due through 2015	$	13.0		13.0		$	20.0		20.0		$	9.5		9.5		$	13.0		13.0
Other	Various			20.5		Various			25.5		Various			15.8		Various			13.7
				2,361.9					2,311.6					2,585.8					2,308.9
Less: Current portion of long-term debt				(133.0	)				(41.2	)				(135.3	)				(127.1	)
			$	2,228.9				$	2,270.4				$	2,450.5				$	2,181.8

	Nine Months Ended
	September 30, 2007									October 1, 2006
($ in millions)	U.S.			Foreign			Total			U.S.			Foreign			Total

Service cost	$	30.7		$	6.6		$	37.3		$	20.7		$	6.7		$	27.4
Interest cost		35.3			22.5			57.8			34.2			20.3			54.5
Expected return on plan assets		(40.9	)		(13.6	)		(54.5	)		(37.9	)		(11.9	)		(49.8	)
Amortization of prior service cost		0.7			(0.4	)		0.3			2.8			(0.2	)		2.6
Recognized net actuarial loss		10.1			3.6			13.7			14.1			2.5			16.6
Subtotal		35.9			18.7			54.6			33.9			17.4			51.3
Non-company sponsored plans		0.9			0.1			1.0			0.8			–			0.8
Net periodic benefit cost	$	36.8		$	18.8		$	55.6		$	34.7		$	17.4		$	52.1

($ in millions)	Foreign Currency Translation		Effective Financial Derivatives(a) (net of tax)			Pension and Other Postretirement Items (net of tax)			Accumulated Other Comprehensive Earnings (Loss)			Foreign Currency Translation		Pension and Other Postretirement Items (net of tax)			Effective Financial Derivatives(a) (net of tax)			Accumulated Other Comprehensive Earnings

December 31, 2006	$	131.8	$	0.6		$	(161.9	)	$	(29.5	)
December 31, 2007												$	221.8	$	(104.0	)	$	(10.9	)	$	106.9
Change		56.2		(1.6	)		7.0			61.6			86.3		2.0			41.2			129.5
September 30, 2007	$	188.0	$	(1.0	)	$	(154.9	)	$	32.1
March 30, 2008												$	308.1	$	(102.0	)	$	30.3		$	236.4

	Outstanding Options					Nonvested Options
	Number of Shares			Weighted Average Exercise Price		Number of Shares			Weighted Average Grant Date Fair Value		Outstanding Options					Nonvested Options
											Number of Shares			Weighted Average Exercise Price		Number of Shares			Weighted Average Grant Date Fair Value
Beginning of year		4,852,978		$	26.69		1,286,937		$	10.27		4,747,005		$	32.06		1,664,980		$	10.88
Granted		949,200			49.32		949,200			11.22
Vested							(497,857	)		9.98							–			–
Exercised		(847,653	)		21.00							(47,593	)		18.84
Canceled/forfeited		(40,400	)		42.70		(40,400	)		10.54		(16,400	)		43.28		(16,200	)		10.70
End of period		4,914,125			31.91		1,697,880			10.88		4,683,012			32.16		1,648,780			10.88

Vested and exercisable, end of period		3,216,245			24.38							3,034,232			24.52
Reserved for future grants		4,784,331										4,777,777

	Three Months Ended		Nine Months Ended
Option Price:	September 30, 2007	October 1, 2006	September 30, 2007	October 1, 2006

$ 39.74	−	694,600	–	–
$ 43.69	−	901,200	89,250	901,200
$ 49.32	944,600	−	944,600	–
	944,600	1,595,800	1,033,850	901,200


Purchases of Securities	Purchases of Securities										Purchases of Securities
($ in millions)		Total Number of Shares Purchased			Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (b)			Total Number of Shares Purchased			Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs(b)

July 2 to August 5, 2007			557		$	52.28		557		7,216,165
August 6 to September 2, 2007			936,308			50.95		936,308		6,279,857
September 3 to September 30, 2007			669,741			53.28		669,741		5,610,116
January 1 to February 3, 2008													2,039,533		$	49.05		2,039,533		11,999,198
February 4 to March 2, 2008													10,072		$	45.06		10,072		11,989,126
March 3 to March 30, 2008													–			–		–		11,989,126
Total			1,606,606	(a)		51.92		1,606,606					2,049,605	(a)	$	49.03		2,049,605

20	Subsidiary Guarantees of Debt

31	Certifications pursuant to Rule 13a-14(a) or Rule 15d-14(a), by R. David Hoover, Chairman of the Board, President and Chief Executive Officer of Ball Corporation and by Raymond J. Seabrook, Executive Vice President and Chief Financial Officer of Ball Corporation

32	Certifications pursuant to Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code, by R. David Hoover, Chairman of the Board, President and Chief Executive Officer of Ball Corporation and by Raymond J. Seabrook, Executive Vice President and Chief Financial Officer of Ball Corporation

99	Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995, as amended

Ball Corporation
(Registrant)


By:	/s/ Raymond J. Seabrook
	Raymond J. Seabrook
	Executive Vice President and Chief Financial Officer


Date:	~~November~~May 7, ~~2007~~2008

Description		Exhibit

Subsidiary Guarantees of Debt (Filed herewith.)		EX-20

Certifications pursuant to Rule 13a-14(a) or Rule 15d-14(a), by R. David Hoover, Chairman of the Board, President and Chief Executive Officer of Ball Corporation and by Raymond J. Seabrook, Executive Vice President and Chief Financial Officer of Ball Corporation (Filed herewith.)		EX-31

Certifications pursuant to Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code, by R. David Hoover, Chairman of the Board, President and Chief Executive Officer of Ball Corporation and by Raymond J. Seabrook, Executive Vice President and Chief Financial Officer of Ball Corporation (Furnished herewith.)		EX-32

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995, as amended (Filed herewith.)		EX-99