Bemis Company, Inc., a Missouri corporation (the “Registrant” or “Company”), continues a business formed in 1858. The Registrant was incorporated in 1885 as Bemis Bro. Bag Company with the name changed to Bemis Company, Inc. in 1965. The Registrant is a principal manufacturer of flexible packaging products and pressure sensitive materials selling to customers throughout the United States, Canada, and Europe with a growing presence in Asia Pacific, South America, and Mexico. In 2004, approximately 80 percent of the Registrant’s sales were derived from the Flexible Packaging segment and approximately 20 percent were derived from the Pressure Sensitive Materials segment.

The Registrant’s products are sold to customers primarily in the food industry. Other customers include companies in the following types of businesses: chemical, agribusiness, medical, pharmaceutical, personal care products, batteries, electronics, automotive, construction, graphic industries, and other consumer goods. Further information about the Registrant’s operations in its business segments is available at Note 13 to the Consolidated Financial Statements included in Item 8 of this Form 10-K Annual Report.

As of December 31, 2004, the Registrant had approximately 11,900 employees, about 8,300 of whom were classified as production employees. Many of the North American production employees are covered by collective bargaining contracts involving four different international unions and one independent union and 19 individual contracts with terms ranging from one to six years. During 2004, six contracts covering approximately 2,000 employees at six different locations in the United States were successfully negotiated. During 2005, three domestic and one Canadian labor agreements covering approximately 600 employees are scheduled to expire. Many of the non-North American production employees as well as some of the non-North American salaried workforce are covered by collective bargaining contracts involving six different unions with terms ranging from one to two years.

Working capital elements fluctuate throughout the year in relation to the level of customer volume and other marketplace conditions. Customer and vendor payment terms are split approximately equally between net 30 days and discountable terms. Discounts are generally one percent for payment within ten days. Inventory levels reflect a reasonable balance between raw material pricing and availability, and the Registrant’s commitment to promptly fill customer orders. Backlogs are not a significant factor in the industries in which the Registrant operates as most orders placed with the Registrant are for delivery within 90 days or less. The business of each of the segments is not seasonal to any significant extent.

The Registrant is the owner or licensee of a number of United States and foreign patents and patent applications that relate to certain of its products, manufacturing processes, and equipment. The Registrant also has a number of trademarks and trademark registrations in the United States and in foreign countries. The Registrant’s patents, licenses, and trademarks collectively provide a competitive advantage. However, the loss of any single patent or license alone would not have a material adverse effect on the Registrant’s results as a whole or those of either of its segments.

The Registrant’s business activities are organized around its two business segments, Flexible Packaging and Pressure Sensitive Materials. Both internal and external reporting conform to this organizational structure. A summary of the Registrant’s business activities reported by its two business segments follows.

Flexible Packaging Segment

The flexible packing segment manufactures a broad range of consumer and industrial packaging. Multilayer flexible polymer film structures and barrier laminates are sold for food, medical, and personal care products as well as non-food applications utilizing controlled or modified atmosphere packaging or unique open or close features. Monolayer and coextruded films are also produced for applications with fewer barrier requirements. Additional products include blown and cast stretchfilm products, carton sealing tapes and application equipment, custom thermoformed plastic packaging, multiwall and single-ply paper bags, printed paper roll stock, and bag closing materials. Markets for our products include processed and fresh meat, liquids, frozen foods, cereals, snacks, cheese, coffee, condiments, candy, pet food, bakery, seed, lawn and garden, tissue, fresh produce, personal care and hygiene, disposable diapers, printed shrink overwrap for the food and beverage industry, agribusiness, minerals, and medical device packaging.

Pressure Sensitive Materials Segment

The pressure sensitive materials segment manufactures pressure sensitive materials that are sold into label markets, graphic markets, and technical markets.

Products for label markets include narrow-web rolls of pressure sensitive paper, film, and metalized film printing stocks used in high-speed printing and die-cutting of primary package labeling, secondary or promotional decoration, and for high-speed, high-volume data processing (EDP) stocks, bar code labels, and numerous laser printing applications. Primary markets include food packaging, personal care product packaging, inventory control labeling, shipping labels, postage stamps, and laser/ink jet printed labels.

Products for graphic markets include pressure sensitive papers and films used for decorative signage through computer-aided plotters, digital and screen printers, and photographic overlaminate and mounting materials including optically clear films with built-in UV inhibitors. Offset printers, sign makers, and photo labs use these products on short-run and/or digital printing technology to create labels, signs, or vehicle graphics. Primary markets are indoor and outdoor signage, photograph and digital print overlaminates, and vehicle graphics.

Products for technical markets are pressure sensitive materials that are technically engineered for performance in varied industrial applications. They include micro-thin film adhesives used in delicate electronic parts assembly and pressure sensitives

utilizing foam and tape based stocks to perform fastening and mounting functions. Tapes sold to medical markets feature medical-grade adhesives suitable for direct skin contact. Primary markets are batteries, electronics, automotive, construction, medical, and pharmaceuticals.

Marketing, Distribution, and Competition

While the Registrant’s sales are made through a variety of distribution methods, more than 90 percent of each segment’s sales are made by the Registrant’s direct sales force. Sales offices and plants are located throughout the United States, Canada, United Kingdom, Continental Europe, Scandinavia, Asia Pacific, South America, and Mexico to provide prompt and economical service to more than 30,000 customers. The Registrant’s technically trained sales force is supported by product development engineers, design technicians, and a customer service organization.

No single customer accounts for ten percent or more of the Registrant’s total sales. Furthermore, the loss of one or a few major customers would not have a material adverse effect on the Registrant’s operating results. Nevertheless, business arrangements with large customers require a large portion of the manufacturing capacity at a few individual manufacturing sites. Any change in the business arrangement would typically occur over a period of time, which would allow for an orderly transition for both the Registrant’s manufacturing site and the customer.

The major markets in which the Registrant sells its products are highly competitive. Areas of competition include service, innovation, quality, and price. This competition is significant as to both the size and the number of competing firms. Major competitors in the Flexible Packaging segment include Amcor Limited, Exopack Company, Hood Packaging Corporation, Intertape Polymer Group Inc., Alcan Packaging, Pliant Corporation, Printpack, Inc., Sealed Air Corporation, Sonoco Products Company, Smurfit-Stone Container Corporation, and Wihuri OY. In the Pressure Sensitive Materials segment major competitors include Avery Dennison Corporation, Acucote, Inc., Green Bay Packaging Inc., 3M, Ricoh Company, Ltd., Ritrama Inc., Flexcon Co., Inc., Spinnaker Industries, Inc., Technicote Inc., UPM-Kymmene Corporation, and Wausau Coated Products Inc.

The Registrant considers itself to be a significant factor in the market niches it serves; however, due to the diversity of the Flexible Packaging and Pressure Sensitive Materials segments, the Registrant’s precise competitive position in these markets is not reasonably determinable. Advertising is limited primarily to business and trade publications emphasizing the Registrant’s product features and related technical capabilities and the individual problem-solving approach to customer problems.

Raw Materials

Plastic resins and films, paper, inks, adhesives, and chemicals constitute the basic major raw materials. These are purchased from a variety of industry sources and the Registrant is not dependent on any one supplier for its raw materials. While temporary shortages of raw materials may occur occasionally, these items are currently readily available.

Research and Development Expense

Research and development expenditures were as follows:

	2004		2003		2002
Flexible Packaging	$	16,923,000	$	17,060,000	$	14,509,000
Pressure Sensitive Materials	4,215,000		4,394,000		2,937,000
Total	$	21,138,000	$	21,454,000	$	17,446,000

The increase in 2003 reflects additional effort related to new product development.

Environmental Control

Compliance with federal, state, and local provisions which have been enacted or adopted regulating discharges of materials into the environment or otherwise relating to the protection of the environment, is not expected to have a material effect upon the capital expenditures, earnings, or competitive position of the Registrant and its subsidiaries.

Available Information

The Registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2) and is also an electronic filer. Electronically filed reports (Forms 4, 8-K, 10-K, 10-Q, S-3, S-8, etc.) can be accessed at the Securities and Exchange Commission (SEC) website (http://www.sec.gov) or by visiting the SEC’s Public Reference Room located at 450 Fifth Street NW, Washington, DC 20549 (call 1-800-792-0330 for hours of operation). Electronically filed reports can also be accessed through the Registrant’s own website (http://www.bemis.com), under Investor Relations/SEC Filings or by writing for free information, including SEC filings, to Investor Relations, Bemis Company, Inc., 222 South Ninth Street, Suite 2300, Minneapolis, Minnesota 55402-4099, or calling (612) 376-3000. In addition, the Registrant’s Board Committee charters and the Company’s standards of business conduct can be electronically accessed at the Company’s website under Company Overview or, free of charge, by writing directly to the Company. The Registrant has adopted a Financial Code of Ethics which is filed as an exhibit to this Annual Report on Form 10-K, and is also posted on the Registrant’s website. The Registrant intends to post any amendment to, or waiver from, a provision of the Financial Code of Ethics that applies to our principal executive officer, principal financial officer, principal accounting officer, controller and other persons performing similar functions on the Investor Relations section of its website (www.bemis.com) promptly following the date of such amendment or waiver.

Explanation of Terms Describing the Registrant’s Products

Barrier laminate – A multilayer plastic film made by laminating two or more films together with the use of glue or a molten plastic to achieve a barrier for the planned package contents.

Blown film – A plastic film that is extruded through a round die in the form of a tube and then expanded by a column of air in the manufacturing process.

Cast film – A plastic film that is extruded through a straight slot die as a flat sheet during its manufacturing process.

Coextruded film – A multiple layer extruded plastic film.

Controlled atmosphere packaging – A package which limits the flow of elements, such as oxygen or moisture, into or out of the package.

Decorative products – Pressure sensitive materials used for decorative signage, promotional items, and displays and advertisements.

Flexible polymer film – A non-rigid plastic film.

Flexographic printing – The most common flexible packaging printing process in North America using a raised rubber or alternative material image mounted on a printing cylinder.

Barrier Products – Products that provide protection and extend the shelf life of the contents of the package. These products provide this protection by combining different types of plastics and chemicals into a multilayered plastic package. These products protect the contents from such things as moisture, sunlight, odor, or other elements.

In-line overlaminating capability – The ability to add a protective coating to a printed material during the printing process.

Labelstock – Base material for pressure sensitive labels.

Modified atmosphere packaging – A package in which the atmosphere inside the package has been modified by a gas such as nitrogen.

Monolayer film – A single layer extruded plastic film.

Multiwall paper bag – A package made from two or more layers of paper.

Paper products – Products that consist primarily of multiwall and single ply paper bags and printed paper roll stock.

Polyolefin shrink film – A packaging film consisting of polyethylene and/or polypropylene resins extruded via the blown process. The film can be irradiated in a second process to cross link the molecules for added strength, durability, and toughness. The product is characterized by thin gauge, high gloss, sparkle, transparency, and good sealing properties.

Pressure sensitive material – A material with adhesive such that upon contact with another material it will stick.

Roll label products – Pressure sensitive materials made up and sold in roll form.

Rotogravure printing – A high quality, long run printing process utilizing a metal cylinder.

Sheet products – Pressure sensitive materials cut into sheets and sold in sheet form.

Stretch film – A plastic film used to wrap pallets in the shipping process, which has significant ability to stretch.

Technical products – Technically engineered pressure sensitive materials used primarily for fastening and mounting functions.

Thermoformed plastic packaging – A package formed by applying heat to a film to shape it into a tray or cavity and then placing a flat film on top of the package after it has been filled.

UV inhibitors – Chemicals which protect against ultraviolet rays.

ITEM 2 - PROPERTIES

Properties utilized by the Registrant at December 31, 2004, were as follows:

Flexible Packaging Segment

This segment has 43 manufacturing plants located in 14 states and eight non-USA countries, of which 36 are owned directly by the Registrant or its subsidiaries, six are leased from outside parties, and one is leased from the Registrant’s Mexican joint venture partner on a month-to-month basis. Initial lease terms generally provide for minimum terms of two to 25 years and have one or more renewal options. The initial terms of leases in effect at December 31, 2004, expire between 2005 and 2010. In addition a flexible packaging operating location leased adjacent vacant land in 1999 for an initial lease term of 42 years.

Pressure Sensitive Materials Segment

This segment has eight manufacturing plants located in four states and two non-USA countries, of which seven are owned directly by the Registrant or its subsidiaries and one is leased from an outside party. The initial term, excluding renewal options, of the lease in effect as of December 31, 2004, expires in 2006.

Corporate and General

The executive offices of the Registrant, which are leased, are located in Minneapolis, Minnesota. The Registrant considers its plants and other physical properties to be suitable, adequate, and of sufficient productive capacity to meet the requirements of its business. The manufacturing plants operate at varying levels of utilization depending on the type of operation and market conditions.

ITEM 3 - LEGAL PROCEEDINGS

The Registrant is involved in a number of lawsuits incidental to its business, including environmental related litigation. Although it is difficult to predict the ultimate outcome of these cases, management believes, except as discussed below, that any ultimate liability would not have a material adverse effect upon the Registrant’s financial condition or results of operations.

The Indiana Department of Environmental Management has issued a Notice of Violation to the Registrant regarding various permitting and air emissions violations at its Terre Haute, Indiana facility. The Registrant is cooperating with the Indiana agency and is seeking to resolve all open issues raised by the Notice of Violation. Any settlement or other resolution of these matters may include a penalty. While the Registrant cannot reasonably estimate the amount of any such penalty, management believes that it would not have a material adverse effect upon the Registrant’s financial condition or results of operations.

The Registrant is a potentially responsible party (PRP) in twelve superfund sites around the United States. The Registrant expects its future liability relative to these sites to be insignificant, individually and in the aggregate. The Registrant has reserved an amount that it believes to be adequate to cover its exposure.

Dixie Toga S.A., acquired by the Company on January 5, 2005, is involved in a tax dispute with the City of São Paulo. The City has assessed a city services tax on the production and sale of printed labels and packaging products. Dixie Toga, along with a number of other packaging companies disagree and contend that the city services tax is not applicable and that the products are subject only to the state value added tax (VAT). Under Brazilian law, state VAT and city services tax are mutually exclusive and the same transaction can be subject to only one of those taxes. Based on a ruling from the State of São Paulo, advice from legal counsel, and long standing business practice, Dixie Toga did not pay the city services tax but instead continued to collect and pay the state VAT.

The City of São Paulo disagreed and assessed Dixie Toga the city services tax for the years 1991-1995. The assessments for those years are estimated to be approximately $40.0 million at the date the Company acquired Dixie Toga. Dixie Toga challenged the assessments and ultimately litigated the issue. A lower court decision in 2002 cancelled all of the assessments for 1991-1995. The City of São Paulo, the State of São Paulo, and Dixie Toga have each appealed parts of the lower court decision. The City continues to assert the applicability of the city services tax and has issued assessments for the subsequent years 1996-2001. The assessments for those years for tax and penalties (exclusive of interest) are estimated to be approximately $26.0 million.

Dixie Toga strongly disagrees with the City’s position. The Company believes that Dixie Toga has a strong legal position and intends to vigorously challenge any assessments by the City of São Paulo. The Company is unable at this time to predict the ultimate outcome of the controversy. An adverse resolution could be material to the results of operations and/or cash flows of the period in which the matter is resolved.

The Company first disclosed in a Form 8-K filed with the Securities and Exchange Commission on April 23, 2003, that the Department of Justice expected to initiate a criminal investigation into competitive practices in the labelstock industry and the Company further discussed the investigation and disclosed that it expected to receive a subpoena in its Form 10-Q filed for the quarter ended June 30, 2003. In a Form 8-K filed with the Securities and Exchange Commission on August 15, 2003, the Company disclosed that it had received a subpoena from the U.S. Department of Justice in connection with the Department’s criminal investigation into competitive practices in the labelstock industry. The Company has responded to the subpoena and will continue to cooperate fully with the requests of the U.S. Department of Justice.

The Company and its wholly-owned subsidiary, Morgan Adhesives Company, have been named as defendants in twelve civil lawsuits. Five of these lawsuits purport to represent a nationwide class of labelstock purchasers, and each alleges a conspiracy to fix prices within the self-adhesive labelstock industry. On November 5, 2003, the Judicial Panel on MultiDistrict Litigation issued a decision consolidating all of the federal class actions for pretrial purposes in the United States District Court for the Middle District of Pennsylvania, before the Honorable Chief Judge Vanaskie. Judge Vanaskie entered an order which calls for discovery to be taken on the issues relating to class certification and briefing on plaintiffs’ motion for class certification to be completed in November 2005. At this time, a discovery cut-off and a trial date have not been set. The Company has also been named in four lawsuits filed in the California Superior Court in San Francisco. Three of these lawsuits seek to represent a class of all California indirect purchasers of labelstock and each alleged a conspiracy to fix prices within the self-adhesive labelstock industry. These three lawsuits have been consolidated. The fourth lawsuit seeks to represent a class of California direct purchasers of labelstock and alleges a conspiracy to fix prices within the self-adhesive labelstock industry. Finally, the Company has been named in one lawsuit in Vermont, seeking to represent a class of all Vermont indirect purchasers of labelstock, one lawsuit in Ohio, seeking to represent a class of all Ohio indirect purchasers of labelstock, and one lawsuit in Tennessee, seeking to represent a class of purchasers of labelstock in various jurisdictions, all alleging a conspiracy to fix prices within the self-adhesive labelstock industry. The Company intends to vigorously defend these lawsuits.

In a Form 8-K filed with the Securities and Exchange Commission on May 25, 2004, the Company disclosed that representatives from the European Commission had commenced a search of business records and interviews of certain Company personnel at its self-adhesive labelstock operation in Soignies, Belgium to investigate possible violations of European competition law in connection with an investigation of potential anticompetitive activities in the European paper and forestry products sector. The Company continues to cooperate fully with the European Commission.

Given the ongoing status of the U.S. Department of Justice investigation, the related class-action civil lawsuits, and the European Commission investigation, the Company is unable to predict the outcome of these matters although the effect could be material to the results of operations and/or cash flows of the period in which the matter is resolved. The Company is currently not otherwise subject to any pending litigation other than routine litigation arising in the ordinary course of business, none of which is expected to have a material adverse effect on the business, results of operations, financial position, or liquidity of the Company.

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders during the fourth quarter of 2004.

PART II - ITEMS 5, 6, 7, 7A, 8, 9, 9A, and 9B

ITEM 5 - MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

The Company’s common stock is traded on the New York Stock Exchange under the symbol BMS. On December 31, 2004, there were 4,465 registered holders of record of our common stock. Dividends paid and the high and low common stock prices per share were as follows:

For the Quarterly Periods Ending:	March 31		June 30		September 30		December 31
2004
Dividend paid per common share	$	0.16	$	0.16	$	0.16	$	0.16
Common stock price per share
High	$	26.42	$	28.65	$	28.45	$	29.49
Low	$	23.24	$	25.22	$	24.83	$	24.74
2003
Dividend paid per common share	$	0.14	$	0.14	$	0.14	$	0.14
Common stock price per share
High	$	25.58	$	24.15	$	24.33	$	25.03
Low	$	19.66	$	20.86	$	21.39	$	21.77
2002
Dividend paid per common share	$	0.13	$	0.13	$	0.13	$	0.13
Common stock price per share
High	$	29.12	$	28.53	$	27.19	$	27.15
Low	$	23.32	$	23.55	$	19.70	$	22.77

ITEM 6 - SELECTED FINANCIAL DATA

FIVE-YEAR CONSOLIDATED REVIEW

(dollars in millions, except per share amounts)

Years Ended December 31,	2004			2003			2002			2001			2000
Operating Data
Net sales	$	2,834.4		$	2,635.0		$	2,369.0		$	2,293.1		$	2,164.6
Cost of products sold and other expenses	2,525.2			2,383.2			2,086.5			2,035.4			1,921.5
Interest expense	15.5			12.6			15.5			30.3			31.6
Income before income taxes	293.7			239.2			267.0			227.4			211.5
Provision for income taxes	113.7			92.1			101.5			87.1			80.9
Net income	180.0			147.1			165.5			140.3			130.6
Net income as a percent of net sales	6.3		%	5.6		%	7.0		%	6.1		%	6.0		%

Common Share Data
Basic earnings per share	$	1.68		$	1.39		$	1.56		$	1.33		$	1.23
Diluted earnings per share	1.67			1.37			1.54			1.32			1.22
Dividends per share	0.64			0.56			0.52			0.50			0.48
Book value per share	12.23			10.72			9.06			8.38			7.59
Stock price/earnings ratio range	14-18		x	15-19		x	13-19		x	11-20		x	10-16		x
Weighted-average shares outstanding for computation of diluted earnings per share	107,941,738			107,733,383			107,492,974			106,243,596			107,105,406
Common shares outstanding at December 31,	106,947,128			106,242,046			105,887,476			105,739,858			105,204,828

Capital Structure and Other Data							`
Current ratio	2.3		x	2.4		x	2.2		x	2.5		x	1.3		x
Working capital	$	498.6		$	436.3		$	395.8		$	348.7		$	144.9
Total assets	2,486.7			2,292.9			2,256.7			1,923.0			1,888.6
Short-term debt	5.7			6.5			5.2			5.7			234.8
Long-term debt	533.9			583.4			718.3			595.2			438.0
Stockholders’ equity	1,307.9			1,138.7			959.0			886.1			798.8
Return on average stockholders’ equity	14.7		%	14.0		%	17.9		%	16.7		%	17.1		%
Return on average total capital	9.7		%	8.4		%	10.3		%	10.0		%	10.8		%
Depreciation and amortization	$	130.8		$	128.2		$	119.2		$	124.1		$	108.1
Capital expenditures	134.5			106.5			91.0			117.5			100.4
Number of common stockholders	4,465			4,484			4,542			4,747			5,005
Number of employees	11,907			11,505			11,837			11,012			10,969

ITEM 7 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s Discussion and Analysis

Three years ended December 31, 2004

Management’s Discussion and Analysis should be read in conjunction with the Consolidated Financial Statements and related Notes included in Item 8 of this Annual Report on Form 10-K.

	Percent of Net Sales
Three-year review of results	2004		2003		2002
Net sales	100.0	%	100.0	%	100.0	%
Cost of products sold	79.0		79.8		77.7
Gross margin	21.0		20.2		22.3
Selling, general, and administrative expenses	10.1		9.7		9.7
All other expenses	0.6		1.4		1.3
Income before income taxes	10.3		9.1		11.3
Provision for income taxes	4.0		3.5		4.3
Net income	6.3	%	5.6	%	7.0	%
Effective income tax rate	38.7	%	38.5	%	38.0	%

Presentation of Non-GAAP Information

Some of the information presented below reflects adjustments to “As reported” results to exclude certain amounts related to the company’s restructuring initiative and certain non-recurring gains. This adjusted information should not be construed as an alternative to the reported results determined in accordance with accounting principles generally accepted in the United States of America (GAAP). It is provided solely to assist in an investor’s understanding of the impact of the Company’s restructuring initiative and certain non-recurring gains on the comparability of the Company’s operations. A reconciliation of the GAAP amounts to the Non-GAAP amounts follows:

	Twelve Months Ended
	December 31,
(dollars in millions except per share amounts)	2004			2003

Reconciliation by Segment of GAAP to Non-GAAP Operating Profit and Operating Profit as a Percentage of Net Sales
Flexible Packaging
Net Sales	$	2,249.6		$	2,101.0

Operating Profit as reported	308.3			263.7

Non-GAAP adjustments:
Restructuring and related charges (income)	(0.7		)	13.9
(Gain) on sale of certain manufacturing assets	(5.6		)
Operating Profit as adjusted	$	302.0		$	277.6

Operating Profit as a percentage of Net Sales
As reported	13.7		%	12.6		%
As adjusted	13.4		%	13.2		%

Pressure Sensitive Materials
Net Sales	$	584.8		$	534.1

Operating Profit as reported	33.9			16.3

Non-GAAP adjustments:
Restructuring and related charges (income)	3.1			2.7
Operating Profit as adjusted	$	37.0		$	19.0

Operating Profit as a percentage of Net Sales
As reported	5.8		%	3.1		%
As adjusted	6.3		%	3.6		%

Reconciliation of GAAP to Non-GAAP Earnings per Share
Diluted earnings per share as reported	$	l.667		$	1.366

Non-GAAP adjustments per share, net of taxes:
Restructuring and related charges (income)	0.014			0.095
(Gain) on sale of certain manufacturing assets	(0.032		)
Diluted earnings per share as adjusted	$	1.649		$	1.461

Overview

Bemis Company, Inc. is a leading manufacturer of flexible packaging and pressure sensitive materials supplying a variety of industries. Generally about 65 percent of our total company net sales are to customers in the food industry. Sales of our flexible packaging products are widely diversified among food categories and can be found in nearly every aisle of the grocery store. Other markets into which we sell our flexible packaging products include medical devices, personal care, and lawn care. Our emphasis on supplying packaging to the food industry provides a more stable market environment for our flexible packaging business segment, which accounts for about 80 percent of our net sales. The remaining 20 percent of our net sales is from the pressure sensitive materials business segment which, while diversified in end use products, is less focused on food industry applications and more exposed to economically sensitive end markets.

Market Conditions

During 2004, higher petrochemical feedstock costs significantly increased the price of polymer resins and adhesives, the primary raw materials for our business segments. Our business model has been developed to accommodate such cost increases by adjusting selling prices to reflect increased costs. In addition, we focus on marketing value-added, unique materials and customer service that cannot be easily duplicated by our competition. During the year, we experienced increased customer demand for innovative packaging and pressure sensitive solutions, reflecting a strengthening economy and our customers’ focus on new product introductions.

Restructuring and Related Charges

During the third quarter of 2003, we initiated a restructuring program in which three flexible packaging plants were closed. This program eliminated less efficient capacity and consolidated production of monolayer blown film into fewer, more efficient facilities. While most of the restructuring activities were completed as of December 31, 2003, gains and losses related to the sale of these closed facilities resulted in a net gain of $0.7 million during 2004.

During the fourth quarter of 2003, we initiated a restructuring program for our pressure sensitive materials business segment to reduce capacity and fixed costs associated with our label materials product line. The majority of the restructuring activities were completed by the second quarter of 2004. Restructuring charges totaled $2.7 million in the fourth quarter of 2003 and $3.1 million in 2004.

Acquisitions

Our acquisitions strategy is growth oriented, focused on the identification of businesses that offer unique packaging technologies, access to new markets or product lines, or critical mass. Since the beginning of 2002, we have completed four such acquisitions to enhance the breadth of our product offerings and expand the market and geographic participation of our business segments. These four acquisitions have added about $275 million of net sales, about two-thirds of which is from non-U.S. manufacturing plants. Our non-U.S. plants are focused on serving the flexible packaging needs of the geographic regions in which each plant resides. These acquisitions are more fully discussed in Note 5 to the Consolidated Financial Statements.

On May 26, 2004, Bemis and our Mexican joint venture partner completed the purchase of certain flexible packaging assets of Masterpak S.A. de C.V., including a converting facility in Tultitlán, Mexico. These assets produce flexible packaging for dry foods, personal care products, pharmaceuticals, confectionery and bakery products. Annual sales related to the assets acquired were approximately $35 million. We own 51 percent of the acquired business, which will focus on supplying the packaging needs of Mexican food and consumer goods markets.

On January 5, 2005, subsequent to year-end 2004, we acquired majority ownership of Dixie Toga S.A., one of the largest packaging companies in South America with annual revenues in excess of $300 million. The acquisition included the outstanding voting common stock of Dixie Toga in addition to 43 percent of the outstanding nonvoting preferred stock. The cash purchase price was approximately $250 million. This acquisition significantly increases our exposure to the growing South American packaging market and provides a strong platform from which to introduce our propriety film products to a new region. Since 1998, Bemis and Dixie Toga have operated a joint venture in Brazil, known as Itap Bemis Ltda., and have established a successful working relationship. Dixie Toga has a strong regional management team, a business model similar to Bemis’ and growing, profitable operations. We expect this acquisition to have a positive impact on our financial results in 2005.

Results of Operations

Consolidated Overview

For the year ended December 31, 2004, net sales increased 7.6 percent to $2.83 billion, compared to $2.64 billion for the year ended December 31, 2003. Acquisitions made during the fourth quarter of 2003 and the second quarter of 2004 accounted for 1.1 percent of the 7.6 percent increase in net sales while currency translation accounted for 2.3 percent. Increased unit sales in both business segments drove a 3.1 percent increase in net sales during the year, while price and mix accounted for the remaining 1.1 percent increase. Demand for innovative packaging for a variety of food categories such as meat and cheese, frozen foods, confectionery products and snack foods led flexible packaging volumes, while technical products drove an increase in pressure sensitive materials. Net sales in 2003 increased 11.2 percent from net sales of $2.37 billion in 2002. Acquisitions accounted for 6.6 percent of the net sales growth, while currency translation accounted for about 3.0 percent. The remaining 1.6 percent sales growth reflects primarily the increased sales volumes in flexible packaging during 2003.

Operating profit increased to $342.2 million in 2004 from $280.1 million in 2003 and $316.4 million in 2002. Operating profit in 2004 reflects a $5.6 million gain on the sale of an in-house rotogravure graphics plant. In addition, restructuring and related charges included in operating profit totaled $2.4 million and $16.7 million in 2004 and 2003, respectively. Excluding the impact of the gain on the sale of the plant and any restructuring charges, operating profit would have been $339.0 million for 2004, an increase of 14.3

percent from $296.7 million for 2003. There were no restructuring charges during 2002. Cost savings in 2004 resulting from the completed restructuring programs were partially offset by increased pension expense. Sales mix improvements resulted in increased operating profit during 2004. During 2003, competitive pricing pressures for flexible packaging products sold into industrial markets and for pressure sensitive label materials, in addition to increases in certain resin costs, contributed to lower margins.

Net income totaled $180.0 million in 2004, $147.1 million in 2003, and $165.5 million in 2002. Diluted earnings per share were $1.67 for 2004, including restructuring and related charges of about $0.014 per share. Results for 2004 also reflect a gain of $0.032 per share on the sale of rotogravure plant assets during the fourth quarter of the year. For 2003, diluted earnings per share were $1.37, including restructuring and related charges of about $0.095 per share. Diluted earnings per share for 2002 totaled $1.54.

Flexible Packaging Business Segment

Our flexible packaging business segment provides packaging to a variety of end markets, including meat and cheese, confectionery, frozen foods, lawn and garden, personal care, beverages, medical devices, bakery and snack foods. These markets are generally less affected by economic cycles and grow through product innovation and geographical expansion.

The most significant raw materials used in this business segment are polymer resins, which we use to develop and manufacture single layer and multilayer film products. During periods of unusual raw material cost volatility, selling price changes may lag behind changes in our raw material costs. During 2004, resin costs steadily increased, resulting in double-digit percentage increases by year-end. These raw material costs were reflected in increased selling prices during the year. During 2003, polyethylene resin prices increased 30 percent during the first quarter in anticipation of natural gas shortages due to conflict in the Middle East and other international supply concerns. As concerns subsided in April, prices drifted back down, resulting in a volatile pricing period that delayed our ability to adjust selling prices, which negatively impacted 2003 operating margins.

In July 2003, we announced a restructuring effort to reduce fixed costs, take out monolayer film capacity and direct production volume to more efficient facilities. We closed three flexible packaging manufacturing facilities in the third quarter of 2003, recording restructuring and related charges of $13.9 million during 2003. Of this total charge, $7.1 million related to accelerated depreciation of assets and was classified as costs of products sold. The remaining $6.8 million of charges included $5.0 million for employee severance and related costs and $1.8 million of other costs, primarily equipment relocation, all of which have been recorded as other costs (income), net. With the flexible packaging restructuring efforts essentially completed at December 31, 2003, the net restructuring gain of $0.7 million classified as other costs (income), net, in 2004 relates primarily to the sale of closed facilities offset by ongoing costs to maintain these closed facilities.

Our flexible packaging business segment recorded net sales of $2.25 billion in 2004, a 7.1 percent increase from $2.10 billion in 2003. The acquisition of the flexible packaging assets of Masterpak, a Mexican joint venture investment made during the second quarter of 2004, contributed 0.8 percent sales growth. Currency translation accounted for a 1.8 percent increase in sales, primarily reflecting the impact of our exposure to the strengthening Euro. Strong unit sales to markets for meat and cheese, confectionery and snack foods, frozen foods, personal care products, cereal products and unitizing film for products such as bottled water was partially offset by lower unit sales to bakery, pet product and industrial markets. Price and mix increased sales by about 1.1 percent in total, as customers balanced price increases with changes in product mix. Net sales increased 12.3 percent in 2003 from $1.87 billion in 2002. Acquisitions accounted for an increase of 8.4 percent and currency translation accounted for 2.0 percent of the improvement from 2002.

Operating profit increased to $308.3 million in 2004 compared to $263.8 million in 2003 and $289.1 million in 2002. Operating profit as a percentage of net sales increased to 13.7 percent in 2004 compared to 12.6 percent in 2003. Operating profit was 15.5 percent in 2002. During the fourth quarter of 2004, we recorded a gain of $5.6 million from the sale of a manufacturing facility in Florence, Kentucky that supported internal rotogravure graphics capabilities. Excluding the impact of both the gain on the sale of that facility as well as restructuring charges, operating profit as a percentage of net sales would have been 13.4 percent in 2004 compared to 13.2 percent in 2003. Savings resulting from the restructuring program were significantly offset by increased pension costs and incentive compensation in 2004. In addition, operating losses from the newly acquired joint venture in Mexico totaled $3.7 million in 2004 where resolution of supplier issues and deferred maintenance activities related to the previous ownership is continuing. Factors that dampened flexible packaging operating profits in 2003 included increased employee pension and other benefit costs and unusual volatility in the price of polyethylene resin during the first half of the year.

Pressure Sensitive Materials Business Segment

The pressure sensitive materials business segment offers adhesive products to three markets: prime and variable information labels, which include roll label stock used in a wide variety of label markets; graphic design, used to create signage and decorations; and technical components, which represent pressure sensitive components for industries such as the electronics, automotive, battery, construction and medical industries.

Paper and adhesive are the primary raw materials used in our pressure sensitive materials business segment. For the last several years, general economic conditions have had a greater negative influence on selling prices and operating performance than raw material costs. During 2004, the increased cost of petrochemical products caused an associated increase in the cost of adhesive materials, in addition to a concern about availability of adhesive from suppliers. In response to these cost increases, we increased selling prices and secured alternative supplies of raw materials in case of shortages. We focused on margin expansion by introducing new product innovations and quality initiatives during the year. In addition, recent restructuring activities resulted in better capacity utilization in label products.

In October of 2003, we announced the restructuring of our label products capacity. We closed two facilities to reduce fixed costs and improve capacity utilization in our label products line. Restructuring and related charges of $2.7 million were recorded in

2003, of which $2.3 million related to severance and related charges and was recorded as other costs (income), net. The remaining $0.4 million related to accelerated depreciation of assets and related charges and was recorded as an element of costs of products sold. During 2004, restructuring and related charges totaling $3.1 million related primarily to the cost of closing a label products plant in Nevada. Of this total, $1.8 million related to costs and equipment relocation and was recorded as other costs (income), net, with the remaining costs associated with accelerated depreciation charged to costs of products sold.

Our pressure sensitive materials business segment reported net sales of $584.8 million in 2004, an increase of 9.5 percent from net sales of $534.1 million in 2003. An acquisition in the fourth quarter of 2003 of a graphic business in Europe increased net sales by 2.6 percent during 2004 and currency translation provided a 4.2 percent increase. About 44 percent of the sales from this business segment are from our manufacturing operations in Belgium, which benefited from the strengthening of the European currencies during 2004. Stronger unit sales of technical products more than offset slightly lower unit sales of label and graphic products compared to 2003. Price and mix provided a combined improvement to net sales during the year of about 1.0 percent. Net sales in 2003 increased 7.0 percent from $498.9 million in 2002, primarily due to the strengthening of the Euro during 2003.

Operating profit increased substantially in 2004 to $33.9 million or 5.8 percent of net sales, compared to $16.3 million or 3.1 percent of net sales in 2003, and $27.3 million or 5.5 percent of net sales in 2002. Excluding the impact of restructuring and related charges, operating profit would have been $37.0 million or 6.3 percent of net sales in 2004, and $19.0 million or 3.6 percent of net sales in 2003. Currency translation contributed $2.2 million to operating profit in 2004 and $2.9 million in 2003. Improved profit levels in 2004 reflect improved sales mix and the savings associated with restructuring activities early in the year, partially offset by increased pension expense. During 2003, label product markets were very competitive, as reduced selling prices offset much of the benefits of improving production volume during the year.

Gross Margin

Gross margin as a percent of net sales increased to 21.0 percent in 2004 compared to 20.2 percent in 2003. Gross margin was 22.3 percent in 2002. Restructuring and related charges reduced gross margins by $1.1 million in 2004 and $7.6 million in 2003. Lower margins in 2004 reflect the impact of higher resin costs in advance of selling price increases and an increased proportion of lower margin non-U.S. sales. We are implementing improvements in Europe and Mexico to increase profitability at those locations. During 2003, unusual volatility in raw material prices for flexible packaging products coupled with pricing pressure in markets for certain commodity-like products caused margins to decline from 2002 levels.

Selling, General and Administrative Expenses

Selling, general and administrative expenses as a percentage of net sales were 10.1 percent for 2004, compared to 9.7 percent for both 2003 and 2002. Total expenses were $285.0 million in 2004, $256.7 million in 2003, and $229.3 million in 2002. Increased expenses for 2004 reflect the larger sales organization associated with our global sales efforts and an increase from 2003 in broad-based incentive compensation and pension expense.

Research and Development Expenses

Research and development expenses decreased slightly in 2004 to $21.1 million compared to $21.5 million in 2003. Expenses in 2002 totaled $17.4 million. Our efforts to introduce new products continue at a steady pace and are an integral part of our daily plant operations. Our research and development engineers work directly on commercial production equipment, bringing new products to market without the use of pilot equipment. We believe this approach significantly improves the efficiency, effectiveness and relevance of our research and developments activities and results in earlier commercialization of new products. Expenditures that are not distinctly identifiable as research and development costs are included in costs of products sold.

Interest Expense

Substantially all of our outstanding debt for each of the three years presented was subject to variable interest rates. During 2004, short-term interest rates increased gradually from about 1.1 percent at December 31, 2003 to about 2.3 percent at December 31, 2004. The impact of this increase in short-term interest rates was partially offset by a $42.6 million decrease in outstanding debt during 2004. Interest expense increased in 2004 to $15.5 million compared to $12.6 million in 2003. During 2002, we recorded interest expense of $15.4 million, reflecting lower interest rates but higher outstanding debt levels. We expect interest expense to increase substantially in 2005 due to increasing short-term interest rates and higher debt levels. On January 5, 2005, we acquired a Brazilian packaging company for which we assumed about $40 million in interest-bearing debt and borrowed approximately $250 million to complete the acquisition.

Other Costs (Income), Net

We reported net other income of $20.1 million in 2004, reflecting a $5.6 million gain on the sale of a rotogravure facility during the fourth quarter partially offset by restructuring and related charges of $1.2 million. Equity income from our Brazilian joint venture was $11.7 million in 2004, reflecting improved profitability in addition to an increase in our equity ownership from 33 percent to 45 percent in January 2004. The remainder of other income in 2004 is primarily interest income. During 2003, net other costs of $2.7 million included $8.9 million of restructuring and related charges related to employee severance and the closure of manufacturing facilities. The Brazilian joint venture accounted for $3.2 million of equity income during 2003. Net other income of $1.2 million in 2002 was primarily related to interest income.

Income Taxes

Our effective tax rate was 38.7 percent in 2004, 38.5 percent in 2003, and 38.0 percent in 2002. The difference between our overall tax rate and the U. S. statutory tax rate of 35 percent in each of those three years principally relates to state and local income taxes net of federal income tax benefits.

Contractual Obligations

The following table provides a summary of contractual obligations including our debt payment obligations, capital lease obligations, operating lease obligations and certain other purchase obligations as of December 31, 2004.

	Contractual Payments Due by Period
			Less than		1 to 3		3 to 5		More than
(in millions)	Total		1 year		years		years		5 years
Debt payments (1)	$	572.0	$	115.7	$	25.4	$	422.4	$	8.5
Capital leases (2)	0.7		0.2		0.4		0.1		0.0
Operating leases (3)	26.0		6.8		7.4		4.4		7.4
Purchase obligations (4)	136.5		132.7		3.7		0.1		0.0
Pension contributions (5)	5.2		5.2

(1)		Amount noted includes estimated interest costs. Long-term and short-term debt obligations, excluding interest, are included in our Consolidated Balance Sheets. A portion of this debt is commercial paper backed by a bank credit facility that expires on September 2, 2009. See Note 11 of the Notes to the Consolidated Financial Statements for additional information about our debt and related matters.

(2)		Amount noted includes estimated interest costs. The present value of these obligations, excluding interest, is included on our Consolidated Balance Sheets. See Note 10 of the Notes to the Consolidated Financial Statements for additional information about our capital lease obligations.

(3)		We enter into operating leases in the normal course of business. Substantially all lease agreements have fixed payments terms based on the passage of time. Some lease agreements provide us with the options to renew the lease. Our future operating lease obligations would change if we exercised these renewal options and if we entered into additional operating lease agreements. Our operating lease obligations are described in Note 10 of our Consolidated Financial Statements.

(4)		Purchase obligations represent contracts or commitments for the purchase of raw materials, utilities, capital equipment and various other goods and services.

(5)		Amount noted is funding requirements of non-U.S. pension plans. No requirements exist for future funding.

Interest Rate Swaps

Our long-term unsecured notes include $100 million due in July 2005 and $250 million due in August 2008. In September 2001, we entered into interest rate swap agreements with three U.S. banks, which increased our exposure to variable rates. We generally prefer variable rate debt since it has been our experience that borrowing at variable rates is less expensive than borrowing at fixed rates over the long term. These interest rate swap agreements, which expire in 2005 and 2008, reduced the interest cost of the $350 million of long-term debt from about 6.6 percent to about 3.2 percent in 2004. Since these variable rates are based upon six-month London Interbank Offered Rates (LIBOR), calculated in arrears, at the semiannual interest payment dates of the corresponding notes, increases in short-term interest rates will directly impact the amount of interest we pay. For each one percent increase in variable interest rates, the annual interest expense on $518.4 million of total debt outstanding would increase by $5.2 million.

Accounting principles generally accepted in the United States of America require that the fair value of these swaps, which have been designated as hedges of our fixed rate unsecured notes outstanding, be recorded as an asset or liability of the Company. The fair value of these swaps was recorded as an asset of $14.9 million at December 31, 2004, and an asset of $22.6 million at December 31, 2003. For each period, an offsetting increase is recorded in the fair value of the related long-term notes outstanding. These fair value adjustments do not impact the actual balance of outstanding principal on the notes, nor do they impact the income statement or related cash flows. Credit loss from counterparty nonperformance is not anticipated.

Market Risks and Foreign Currency Exposures

We enter into contractual arrangements (derivatives) in the ordinary course of business to manage foreign currency exposure and interest rate risks. We do not enter into derivative transactions for trading purposes. Our use of derivative instruments is subject to internal policies that provide guidelines for control, counterparty risk, and ongoing reporting. These derivative instruments are designed to reduce the income statement volatility associated with movement in foreign exchange rates, establish rates for future issuance of public bonds, and to achieve greater exposure to variable interest rates.

Interest expense calculated on our outstanding debt is substantially subject to short-term interest rates. As such, increases in short-term interest rates will directly impact the amount of interest we pay. For each one percent increase in variable interest rates, the annual interest expense on $518.4 million of total debt outstanding would increase by $5.2 million.

Our international operations enter into forward foreign currency exchange contracts to manage foreign currency exchange rate exposures associated with certain foreign currency denominated receivables and payables, principally for transactions in non-Euro zone countries. At December 31, 2004 and 2003, we had outstanding forward exchange contracts with notional amounts aggregating $3.5 million and $5.2 million, respectively. Forward exchange contracts generally have maturities of less than nine months and relate primarily to major Western European currencies. Counterparties to the forward exchange contracts are major financial institutions. Credit loss from counterparty nonperformance is not anticipated. We have not designated these derivative instruments as hedging instruments. The net settlement amount (fair value) related to the active forward foreign currency exchange contacts is insignificant and

recorded on the balance sheet within current liabilities and as an element of other costs (income), net, which offsets the related transactions gains and losses on the related foreign denominated asset or liability.

The operating results of our international operations are recorded in local currency and translated into U.S. dollars for consolidation purposes. The impact of foreign currency translation on 2004 net sales was an increase of $59.6 million or 2.3 percent from 2003. Operating profit improved by approximately $4.8 million as a result of the positive effect of foreign currency translation during 2004.

Long-term Compensation

While our practice of awarding long-term compensation has relied primarily on restricted stock programs that are valued at the time of the award and expensed over the vesting period, we have also granted some stock options in the past. Beginning in 2004, we discontinued the awarding of stock options. Stock options granted prior to 2004 were granted at prices equal to the fair market value on the date of grant and exercisable, upon vesting, over varying periods up to ten years from the date of grant. Stock options for Directors vested immediately, while options for Company employees become vested over three years (one-third per year). Pursuant to Statement of Financial Accounting Standards (SFAS) No. 123, “Accounting for Stock Options,” we disclose the impact on net income and earnings per share of stock options outstanding, as if compensation expense were measured using a fair value method, in the footnotes accompanying our financial statements. Beginning July 1, 2005, accounting rules will require us to follow a fair value based method of recognizing expense for stock options. If we followed this fair value method during 2004, diluted earnings per share would have been reduced by one cent for the year ended 2004, two cents for the year ended 2003, and one cent for the year ended 2002. We expect the impact to diluted earnings per share for 2005 to be insignificant.

Critical Accounting Estimates and Judgments

Our discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. On an ongoing basis, management evaluates its estimates and judgments, including those related to retirement benefits, intangible assets, goodwill, and expected future performance of operations. Our estimates and judgments are based upon historical experience and on various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.

We believe the following are critical accounting estimates used in the preparation of our consolidated financial statements.

• The calculation of annual pension costs and related assets and liabilities; and

• The valuation and useful lives of intangible assets and goodwill.

Accounting for annual pension costs

We account for our defined benefit pension plans in accordance with SFAS No. 87, “Employers’ Accounting for Pensions,” which requires that amounts recognized in financial statements be determined on an actuarial basis. A substantial portion of our pension amounts relate to our defined benefit plans in the United States. As permitted by SFAS No. 87, we use a calculated value of plan assets (which is further described below). SFAS No. 87 requires that the effects of the performance of the pension plan’s assets and changes in pension liability discount rates on our computation of pension income or expense be amortized over future periods.

Pension expense recorded in 2004 was $25.2 million, compared to pension expense of $9.6 million in 2003 and pension income of $3.2 million in 2002. We expect 2005 pension expense to be comparable to the levels of 2004.

One element used in determining annual pension income and expense in accordance with SFAS No. 87 is the expected return on plan assets. As of January 1, 2005, for our U.S. defined benefit pension plans, we have assumed that the expected long-term rate of return on plan assets will be 8.75 percent. This represents a decrease from the 9.0 percent level assumed for 2004 and 9.5 percent level assumed for 2003.

To develop the expected long-term rate of return on assets assumption, we considered compound historical returns and future expectations based upon our target asset allocation. Using historical long-term investment periods of 10, 15 and 20 years, our pension plan assets have earned rates of return of 10.9 percent, 10.1 percent and 11.1 percent, respectively, each in excess of our assumed rates.

In future years, we expect that returns will be lower than the historical returns discussed above due to a generally lower inflation and interest rate environment. Considering this, we selected an 8.75 percent long-term rate of return on assets assumption as of January 1, 2005. Using our target asset allocation of plan assets of 80 percent equity securities and 20 percent fixed income securities, our outside actuaries have used their independent economic model to calculate a range of expected long-term rates of return and have determined our assumptions to be reasonable.

This assumed long-term rate of return on assets is applied to a calculated value of plan assets, which recognizes changes in the fair value of plan assets in a systematic manner over approximately three years. This process calculates the expected return on plan assets that is included in pension income or expense. The difference between this expected return and the actual return on plan assets is generally deferred and recognized over subsequent periods. The net deferral of asset gains and losses affects the calculated value of pension plan assets and, ultimately, future pension income and expense.

At the end of each year, we determine the discount rate to be used to calculate the present value of pension plan liabilities. This discount rate is an estimate of the current interest rate at which the pension liabilities could be effectively settled at the end of the year. In estimating this rate, we look to changes in rates of return on high quality, fixed income investments that receive one of the two highest ratings given by a recognized ratings agency. At December 31, 2004, for our U.S. defined benefit pension plans we determined this rate to be 5.75 percent, a decrease of one half of one percent from the 6.25 percent rate used at December 31, 2003.

Pension assumptions sensitivity analysis

Based upon current assumptions of 5.75 percent for the discount rate and 8.75 percent for the expected rate of return on pension plan assets, we expect pension expense before the effect of income taxes for 2005 to be in a range of $25 million to $28 million. The following charts depict the sensitivity of estimated 2005 pension expense to incremental changes in the discount rate and the expected long-term rate of return on assets.

	Total increase (decrease)				Total increase (decrease)
	to pension expense				to pension expense
($ in millions)	from current assumptions				from current assumptions
Discount rate				Rate of Return on Plan Assets
5.00 percent	$	6.0		8.00 percent		$	2.9
5.25 percent	4.0			8.25 percent	1.9
5.50 percent	2.0			8.50 percent	1.0
5.75 percent–Current Assumption	0.0			8.75 percent – Current Assumption	0.0
6.00 percent	(1.9		)	9.00 percent	(1.0			)
6.25 percent	(3.8		)	9.25 percent	(1.9			)
6.50 percent	(5.7		)	9.50 percent	(2.9			)

The following chart depicts the sensitivity of the minimum pension liability adjustment on equity, net of tax, resulting from changes in the assumed discount rate.

	Total (increase) decrease in equity
	from current assumptions
Discount rate
5.00 percent	$	55.2
5.25 percent (1)	46.9
5.50 percent	2.7
5.75 percent – Current Assumption	0.0
6.00 percent	(2.6		)
6.25 percent	(5.2		)
6.50 percent	(7.6		)

(1)

If the discount rate had been reduced to 5.25 percent at December 31, 2004, the accumulated benefit obligation for the largest of the defined benefit pension plans would have exceeded the related plan assets. This would then have required a minimum pension liability adjustment with a corresponding reduction to equity, net of tax, of about $46.9 million. A further decrease in the discount rate to 5.00 percent would only result in an additional equity adjustment of $8.3 million.

Intangible assets and goodwill

The purchase price of each new acquisition is allocated to tangible assets, identifiable intangible assets, liabilities assumed, and goodwill. Determining the portion of the purchase price allocated to identifiable intangible assets and goodwill requires us to make significant estimates. The amount of the purchase price allocated to intangible assets is generally determined by estimating the future cash flows of each asset and discounting the net cash flows back to their present values. The discount rate used is determined at the time of the acquisition in accordance with accepted valuation methods.

Goodwill represents the excess of the aggregate purchase price over the fair value of net assets acquired, including intangible assets. We review our goodwill for impairment annually and assess whether significant events or changes in the business circumstances indicate that the carrying value of the goodwill may not be recoverable. The test for impairment requires us to make estimates about fair value, most of which are based on projected future cash flows. Our estimates associated with the goodwill impairment tests are considered critical due to the amount of goodwill recorded on our consolidated balance sheet and the judgment required in determining fair value amounts, including projected future cash flows. Goodwill was $442.2 million as of December 31, 2004.

Intangible assets consist primarily of purchased technology, customer relationships, patents, trademarks, and tradenames and are amortized using the straight-line method over their estimated useful lives, which range from one to 20 years, when purchased. We review these intangible assets for impairment as changes in circumstances or the occurrence of events suggest that the remaining value is not recoverable. The test for impairment requires us to make estimates about fair value, most of which are based on projected future cash flows. These estimates and projections require judgments as to future events, condition and amounts of future cash flows.

New Accounting Pronouncements

On December 15, 2004, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 123R, “Share-Based Payment” (SFAS 123R), which will significantly change accounting practice with respect to employee stock options. FAS 123R requires that a public entity measure the cost of equity-based service awards based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to

provide service in exchange for the award or the requisite service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite service. A public entity will initially measure the cost of liability-based service awards based on its current fair value; the fair value of that award will be remeasured subsequently at each reporting date through the settlement date. Changes in fair value during the requisite service period will be recognized as compensation cost over that period. The Company expects that the impact of adopting this standard will be insignificant to the Company’s results of operation.

On November 24, 2004, the FASB issued SFAS No. 151 “Inventory Costs, an amendment of ARB No. 43, Chapter 4”. The standard adopts the International Accounting Standards Board (IASB) view related to inventories that abnormal amounts of idle capacity and spoilage costs should be excluded from the cost of inventory and expensed when incurred. Additionally, the Board made the decision to clarify the meaning of the term “normal capacity”. The provisions of SFAS No. 151 are applicable to inventory costs incurred during fiscal years beginning after June 15, 2005. The Company has not determined the impact of this SFAS No. 151 to its inventory accounting results which may result upon adoption of this statement on January 1, 2006.

In December 2004, the FASB issued FASB Staff Positions (FSP) No. FAS 109-1, “Application of FASB Statement No. 109, Accounting for Income Taxes, to the Tax Deduction on Qualified Production Activities Provided by the American Jobs Creation Act of 2004”. This FSP provides guidance on how an enterprise should account for the deduction for qualified production activities provided by the American Jobs Act of 2004. We are currently evaluating the impact of this new deduction, the benefit of which will be considered in our future tax provisions.

In December 2004, the FASB also issued FSP No. FAS 109-2, “Accounting and Disclosure Guidance for the Foreign Earnings Repatriation Provision within the American Jobs Creation Act of 2004”. This FSP allows additional time for companies to determine how the new law affects a company’s accounting for deferred tax liabilities on unremitted foreign earnings. The new law provides for a special one-time deduction of 85% of certain foreign earnings that are repatriated and which meet certain requirements. We are currently evaluating whether any of the earnings of our non-U.S. operations will be repatriated in accordance with the terms of this law.

Subsequent Events

On January 5, 2005, Bemis announced that it had acquired majority ownership of Dixie Toga S.A., one of the largest packaging companies in South America and Bemis’ Brazil-based partner in the Itap Bemis Ltda. joint venture. In this transaction, we acquired the outstanding voting common stock and 43 percent of the outstanding nonvoting preferred stock of Dixie Toga for a total cash price of approximately $250 million. The purchase price was initially financed with commercial paper and, combined with a small amount of debt assumed in the acquisition, our debt to total capitalization ratio increased on the acquisition date to approximately 36 percent. Preferred stock of Dixie Toga is publicly traded on the Brazilian Bovespa Stock Exchange. Dixie Toga recorded annual revenues during 2004 in excess of $300 million. With this acquisition, the results of operations of Dixie Toga will include our Brazilian joint venture, Itap Bemis Ltda., and will be consolidated in our financial statements beginning in January of 2005. We expect this acquisition to have a positive impact on our financial results in 2005.

Forward-looking Statements

This Annual Report contains certain estimates, predictions, and other “forward-looking statements” (as defined in the Private Securities Litigation Reform Act of 1995, and within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended). Forward-looking statements are generally identified with the words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “target,” “may,” “will,” “plan,” “project,” “should,” “continue,” or the negative thereof or other similar expressions, or discussion of future goals or aspirations, which are predictions of or indicate future events and trends and which do not relate to historical matters. Such statements are based on information available to management as of the time of such statements and relate to, among other things, expectations of the business environment in which we operate, projections of future performance (financial and otherwise), including those of acquired companies, perceived opportunities in the market and statements regarding our mission and vision. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause actual results, performance or achievements to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

Factors that could cause actual results to differ from those expected include, but are not limited to, general economic conditions caused by inflation, interest rates, consumer confidence, rates of unemployment and foreign currency exchange rates; investment performance of assets in our pension plans; operating results and cash flows from acquisitions may differ from what we anticipate; competitive conditions within our markets, including the acceptance of our new and existing products; threats or challenges to our patented or proprietary technologies; raw material costs, availability, and terms, particularly for polymer resins and adhesives; price changes for raw materials and our ability to pass these price changes on to our customers or otherwise manage commodity price fluctuation risks; the presence of adequate cash available for investment in our business in order to maintain desired debt levels; changes in governmental regulation, especially in the areas of environmental, health and safety matters, and foreign investment; unexpected outcomes in our current and future litigation proceedings, including the U.S. Department of Justice criminal investigation into competitive practices in the labelstock industry, any related proceedings or civil lawsuits, and the investigation by European Anticompetitive Authorities into the competitive practices in the Paper and Forestry Products industries; unexpected outcomes in our current and future tax proceedings; changes in our labor relations; and the impact of changes in the world political environment including threatened or actual armed conflict. These and other risks, uncertainties, and assumptions identified from time to time in our filings with the Securities and Exchange Commission, including without limitation, our Annual Report on Form 10-K and our quarterly reports on Form 10-Q, could cause actual future results to differ materially from those projected in the forward-looking statements. In addition, actual future results could differ materially from those projected in the forward-looking statement as a result of changes in the assumptions used in making such forward-looking statement.

Missouri		43-0178130
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

		Name of Each Exchange
Title of Each Class		on Which Registered
Common Stock, par value $.10 per share		New York Stock Exchange
Preferred Share Purchase Rights		New York Stock Exchange

Part I
	Item 1.	Business
	Item 2.	Properties

	Item 3.	Legal Proceedings
	Item 4.	Submission of Matters to a Vote of Security Holders

Part II
	Item 5.	Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
	Item 6.	Selected Financial Data

	Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 7A.	Quantitative and Qualitative Disclosures About Market Risk

	Item 8.	Financial Statements and Supplementary Data
		Management’s Responsibility Statement
		Report of Independent Registered Public Accounting Firm
		Consolidated Statement of Income
		Consolidated Balance Sheet
		Consolidated Statement of Cash Flows
		Consolidated Statement of Stockholders’ Equity
		Notes to Consolidated Financial Statements

	Item 9.	Changes In and Disagreements With Accountants on Accounting and Financial Disclosure
	Item 9A.	Controls and Procedures
	Item 9B.	Other Information

Part III
	Item 10.	Directors and Executive Officers of the Registrant
	Item 11.	Executive Compensation

	Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

	Item 13.	Certain Relationships and Related Transactions
	Item 14.	Principal Accountant Fees and Services

Part IV
	Item 15.	Exhibits and Financial Statement Schedules

Signatures
Exhibit Index

Schedule II – Valuation and Qualifying Accounts and Reserves
Report of Independent Registered Public Accounting Firm on Financial Statement Schedules

Exhibit 21 – Parent and Subsidiaries of the Registrant
Exhibit 23 – Consent of PricewaterhouseCoopers LLP

Exhibit 31.1 – Certification of Jeffrey H. Curler, Chief Executive Officer of the Company, pursuant to Rule 13a-14(a)/15d-14(a), dated March 8, 2005

Exhibit 31.2 – Certification of Gene C. Wulf, Chief Financial Officer of the Company, pursuant to Rule 13a-14(a)/15d-14(a), dated March 8, 2005

Exhibit 32 – Certification of Jeffrey H. Curler, Chief Executive Officer of the Company, and Gene C. Wulf, Chief Financial Officer of the Company, pursuant to Section 1350, dated March 8, 2005

Jeffrey H. Curler	Gene C. Wulf	Stanley A. Jaffy
President and	Vice President, Chief Financial	Vice President and
Chief Executive Officer	Officer and Treasurer	Controller